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Citation: Matharu v. Ontario (CEO of FSRA), 2021 ONFST 16 FST File No. M0910-2020 Date: 2021/10/18

IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29 (the “Act”), in particular sections 38 and 39;

AND IN THE MATTER OF the Notice of Proposal to Impose Administrative Penalties dated August 12, 2020 issued by the Director, Litigation and Enforcement by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority (“FSRA”);

AND IN THE MATTER OF a Request for Hearing in accordance with section 39(5) of the Act.

and

CHIEF EXECUTIVE OFFICER of the FINANCIAL SERVICES REGULATORY AUTHORITY

BEFORE:

Bethune Whiston Chair of the Panel and Vice-Chair of the Tribunal

Applicant – No submissions received.

Respondent - Mr. Troy Harrison, Counsel and Ms. Marie Abraham, Counsel, Chief Executive Officer

I. INTRODUCTION

1Mr. Matharu was a licensed mortgage broker (licence #M08003413) from May 13, 2009 until May 31, 2020. His licence was not renewed at that time and it expired.

2On August 12, 2020, the Director of Litigation and Enforcement of FSRA, by delegated authority from the Chief Executive Officer (“CEO”), issued a Notice of Proposal to Impose Administrative Penalties (the “NOP”). The NOP proposed to impose 14 administrative penalties in the total amount of $82,500. The NOP details five complaints against Mr. Matharu received by members of the public who had approached him for help arranging their mortgages. The NOP further details the investigations undertaken by FSRA prior to its issuing the NOP. The NOP indicates that Mr. Matharu “failed to provide the information and documents requested by the investigator under the delegated authority from the Chief Executive Officer, despite promising to do so and despite the investigator following up on multiple occasions”.

3Mr. Matharu filed a Request for Hearing with the Financial Services Tribunal on September 14, 2020. In the Request for Hearing, Mr. Matharu indicated he disagreed with the CEO’s proposed or intended decision; he was ill and wanted the trial [sic] date to be in 2021; he would assign someone to represent him “soon”.

4The above information is provided for context only. No hearing has been held and no allegations proven. It is important to note, though, that:

a. the CEO’s allegations are serious and relate to members of the public suffering financial and other harms;

b. the proposed administrative monetary penalties are significant;

c. the NOP was issued approximately six months into the COVID-19 pandemic;

d. the Applicant claims to be very ill; and

e. the Applicant was self-represented throughout the nearly twelve months between the issuance of the NOP and the issuance of the Notice of Intention to Dismiss.

5On July 29, 2021, following,

a. six pre-hearing conferences,

b. numerous orders of the Tribunal that were not complied with by the Applicant, and

c. no evidence provided of a health issue or issues that would cause the Applicant to be unable to proceed with the orders,

the Respondent filed with the Tribunal and served on the Applicant submissions supporting a motion requesting a dismissal of the proceeding for delay.

6In accordance with Rule 34.01 of the Rules of Practice and Procedure For Proceedings Before the Financial Services Tribunal (the “Rules”), the Tribunal gave notice on August 3, 2021, to Mr. Matharu, that it proposed to dismiss the proceeding without a hearing (the “Notice”) unless certain steps were taken within 30 days (by September 2, 2021) of the giving of the Notice or reasonable cause was shown for failure to take those steps.

7Mr. Matharu did not respond before the deadline or subsequent to it by taking any of the directed steps or showing reasonable cause for failure to take the steps.

8For the following reasons, I order that the Applicant’s Request for Hearing is Dismissed.

II. FACTS AND ANALYSIS

9A total of six pre-hearing conferences (PHC) were held in this matter from November 10, 2020 to July 29, 2021. Mr. Matharu was in attendance for the first five PHCs.

10At the first PHC, held on November 10, 2020, the Applicant requested an adjournment because his medical condition had kept him from being able to prepare and was interfering with his ability to proceed. The Respondent indicated that if there were further issues respecting the scheduling of the PHC or the hearing, he would not be willing to agree to delays in scheduling without further supporting medical information being provided by Mr. Matharu. The PHC was adjourned.

11At the second PHC, held on January 21, 2021, Mr. Matharu raised issues with his health, issues with receiving information from the Respondent and a desire not to engage counsel until he could meet with counsel in person. These issues were all discussed and addressed. With the consent of the parties, the Chair ordered deadlines for actions to be taken by Mr. Matharu to:

a. provide medical information he was willing to share,

b. speak to his lawyer and share disclosure documentation from the CEO with his lawyer, and

c. provide disclosure to the Respondent.

Training for Mr. Matharu on Microsoft Teams was to be arranged.

12A third PHC was held on March 12, 2021. The Respondent advised that he had only received a one-page hospital discharge summary from Mr. Matharu. Mr. Matharu advised he had engaged a lawyer and provided his contact details and the Respondent advised he would be in contact with the Applicant’s counsel. Mr. Matharu said he had not received the disclosure material that the Respondent advised had been sent and the Respondent agreed to resend the disclosure material. Mr. Matharu was given a new deadline to provide his disclosure to the Respondent. Training for Mr. Matharu on Microsoft Teams was scheduled.

13A fourth PHC was held on April 7, 2021. The Respondent advised that he had reached out to the person Mr. Matharu said had been engaged and was told that the lawyer was not engaged and would not be acting for Mr. Matharu. Mr. Matharu again expressed concerns with meeting a lawyer in person. Mr. Matharu was advised a doctor’s note would be required to support any future requested delays in respect of steps to be taken in this proceeding. There had been significant delays already in this proceeding and the matter must move forward unless there was evidence of serious medical issues. The Respondent advised that any doctor’s note would have to indicate that, in the doctor’s professional opinion, Mr. Matharu was unable to proceed with the specified activity.

14Also at the April 7, 2021 PHC,

a. the Respondent advised that the Applicant had only made partial disclosure and the Chair set a deadline for Mr. Matharu to provide the remaining documents;

b. the issues were agreed to with some modifications proposed by the Chair to assist the Applicant in answering the case against him, and dates set for both the Respondent providing the modified issues to the Applicant and the Applicant advising if he had any concern with the revised wording;

c. a schedule for the filing of the Agreed Statement of Facts and Agreed Book of Documents was ordered;

d. a schedule for exchanging witness lists was ordered; and

e. a new Microsoft Teams training session for Mr. Matharu was set as he had not accepted the prior invitation.

15On June 2, 2021, the CEO provided an update on continuing issues communicating with Mr. Matharu and advised the Tribunal, copying Mr. Matharu, “We have advised Mr. Matharu that we will be asking the Tribunal to dismiss the proceedings for delay if we do not receive his witness list on June 21, 2021, as required under paragraph 14(b) of the PHC memo of April 13, 2021.”

16A fifth PHC was held on June 22, 2021. Mr. Matharu continued to focus on his health concerns. The Chair reminded the Applicant that he had requested a hearing in front of the Tribunal. The Applicant was advised that:

a. the hearing process was his opportunity to convince the Tribunal that the penalties proposed to be ordered by FSRA should not be ordered, or if ordered, should be lower;

b. once the hearing process with the Tribunal had started, however, the Tribunal was obligated to proceed in a timely fashion;

c. unnecessary delays had to be avoided.

The Chair summarized what had occurred so far and indicated serious concern that the Applicant had not complied with orders made by the Chair at previous PHCs. The Respondent had expressed concern with the delays and advised that he would be willing to give the Applicant a 30-day period in order to correct his non-compliance with the Tribunal’s orders. If that did not occur he would be asking the Tribunal to dismiss the proceedings for delay.

17The Chair went over with Mr. Matharu more than once the items that he would be ordered to respond to and the timelines that would be imposed. The Chair indicated to Mr. Matharu the consequences that would occur if he did not comply with the orders. Mr. Matharu indicated that he understood. The Chair reordered five specific activities to be undertaken by Mr. Matharu and advised that if he did not comply with the orders the Tribunal would consider a motion expected to be brought by the Respondent at the next PHC to dismiss the proceeding for delay.

18Mr. Matharu did not comply with the orders of the Chair in accordance with the deadlines established at the PHC. At the sixth PHC, held on July 29, 2021, the Respondent filed with the Tribunal and served on the Applicant submissions supporting a motion requesting a dismissal of the proceeding for delay. Despite attempts to contact Mr. Matharu by the Registrar of the Tribunal on the morning of July 29, 2021, Mr. Matharu did not attend the PHC held on July 29, 2021.

III. Notice of intention to dismiss

19On August 3, 2021, the Tribunal issued a Notice of Intention to Dismiss. The Notice specified that the Tribunal was of opinion that Sukhdippal Singh Matharu has initiated this proceeding and had taken no step for an undue period, specifically:

a. He had not confirmed if he had successfully hired a lawyer or not, and provided the contact details for a lawyer, if hired.

b. He had not provided a copy of any additional documentation he may be relying on at the hearing or confirmed that his disclosure was complete.

c. He had not communicated that he agrees with the issues as revised or, if he does not agree, provided his proposed changes or additions to the wording of the issues.

d. He had not communicated that he agrees with the draft Agreed Statement of Facts and Agreed Book of Documents, or, if he does not agree, provided his proposed changes or additions to those materials.

e. He had not provided a list of witnesses he expects to call or confirmed that he does not expect to call any witnesses.

20In the Notice, the Applicant was told that the Tribunal would dismiss the proceeding without a hearing unless those specified steps were taken by the Applicant within 30 days of the giving of the Notice (namely, by September 2, 2021).

21The Applicant was further told that, (a) he had the right to provide reasonable cause for failure to take the above-noted steps, (b) he had the right to make written submissions to the Tribunal on the issue of whether the Tribunal should dismiss the proceeding without a hearing, and (c) after considering any submissions received, the Tribunal could dismiss the proceeding without further hearing.

22The Applicant did not take the required steps set out in the August 3, 2021 Notice of Intention to Dismiss and no submissions were received from the Applicant

IV. Respondent’s submissions, rules and authorities

23Written submissions of counsel for the CEO were received by the Tribunal on July 29, 2021, together with a Book of Authorities and a supporting affidavit. The affidavit attached exhibits which included a full record of the proceedings and relevant communications between the Tribunal and the Applicant, the Respondent and the Applicant, and the Respondent and one of the individuals who the Applicant had indicated he had retained as his counsel. The Respondent provided thorough and well documented submissions related to every delay caused by the Applicant and every order not complied with by the Applicant.

24The submissions propose that the process so far has been very fair to Mr. Matharu and has provided him with two periods of notice that the hearing was at risk of being dismissed equalling 30 days each. CEO’s counsel suggested that Mr. Matharu had received notice which meets or exceeds the notice required by Rule 34.

25Rule 34.01 to 34.03 provide that where a party who has initiated a proceeding has taken no step in the proceeding for an undue period, the Tribunal may give notice of intention to dismiss the proceeding without a hearing unless such steps as are directed by the Tribunal are taken within 30 days of the notice or reasonable cause is shown for failure to take those steps. The parties who have been given notice have the right to make written submissions to the Tribunal with respect to the dismissal of the proceeding within 30 days of the giving of the notice. After considering such submissions, if any, the Tribunal may dismiss the proceeding without a hearing.

26The Book of Authorities includes five precedents where the Tribunal has dismissed proceedings for delay:

a. Abraham v. Ontario (Superintendent Financial Services), 2014 ONFST 13 (“Abraham”),

b. Rajaratnam v. Ontario (Superintendent Financial Services), 2018 ONFST 13,

c. 2210968 Ontario Inc. operating as GCA Group v. Ontario (Superintendent Financial Services), 2018 ONFST 23,

d. Lexxco Investment Services Corporation and Lewis v. Ontario (Superintendent Financial Services), 2017 ONFST 6, and

e. Anthony v. Ontario (Superintendent Financial Services), 2018 ONFST 10.

27In addition, the decision in Abraham provides support for the following principles:

a. If an applicant intends to retain counsel, they must do so in a reasonable and timely manner (see Abraham at para. 30);

b. An applicant’s desire to delay a hearing does not outweigh the public interest in having the hearing heard in a timely fashion (see Abraham at para. 33);

c. The onus is on the party requesting a delay for medical reasons to provide evidence to show that they cannot proceed due to a medical condition (see Abraham at para. 24).

28The above decisions provide ample support for the Tribunal’s authority to dismiss proceedings for delay where a party has taken no steps in a proceeding or has shown an intent not to take a step required to be taken in a proceeding.

29I made note in the Introduction, that:

a. the CEO’s allegations are serious and relate to members of the public suffering financial and other harms;

b. the proposed administrative monetary penalties are significant;

c. the NOP was issued approximately six months into the COVID-19 pandemic;

d. the Applicant claims to be very ill; and

e. the Applicant was self-represented throughout the nearly twelve months between the issuance of the NOP and the issuance of the Notice of Intention to Dismiss.

30Because of the circumstances listed in paragraph 29b. through e. I found it very important to give the Applicant, 1. more than one opportunity to engage counsel, as he indicated he wished to do, 2. more than one opportunity to provide evidence of a medical condition that would affect his ability to proceed, and 3. more than one opportunity to comply with orders of the Tribunal. This was done. However, the Tribunal must also consider the implications of paragraph 29a., namely, the CEO’s allegations are serious and relate to members of the public suffering financial and other harms.

31In its submissions the Respondent argues that the Applicant:

a. has not provided evidence that he cannot proceed due to a medical condition,

b. has not retained counsel in a reasonable and timely manner,

c. has taken no steps in the proceeding for an undue period of time,

d. has failed to take steps ordered by the Tribunal, and

e. has significantly delayed the proceeding,

and in light of all this, the Tribunal should dismiss the Applicant’s Request for Hearing.

32I agree with the above submissions of the Respondent. We have reached the point where the Applicant has been given sufficient opportunity to show that he intends to take this process seriously and move forward and/or provide evidence that he cannot proceed due to a medical condition. He has not done either. In accordance with Abraham, an applicant’s desire to delay a hearing does not outweigh the public interest in having the hearing heard in a timely fashion. On a balance of considerations, the public interest must now take priority.

V. ORDER

33Based on the Applicant’s actions, the submissions of the Respondent and in accordance with the Rules and previous decisions of the Tribunal, the Tribunal orders the Applicant’s Request for Hearing is dismissed. The CEO is ordered to carry out the Notice of Proposal issued to Mr. Sukhdippal Matharu, namely, we order him to impose fourteen (14) administrative penalties in the total amount of $82,500 on Mr. Sukhdippal Matharu.

Dated at Toronto, this 18th day of October, 2021.

“Bethune Whiston”______________ Bethune Whiston

Matharu v. Ontario (CEO of FSRA), 2021 ONFST 16

Case Summary

I. INTRODUCTION

II. FACTS AND ANALYSIS