McGill Health Services et. al. v. Ontario (CEO of FSRA), 2022 ONFST 5

FINANCIAL SERVICES TRIBUNAL

Citation: McGill Health Services et. al. v. Ontario (CEO of FSRA) 2022 ONFST 5 FST File No.: I0936-2021 Date: 2022/03/04

IN THE MATTER OF the Insurance Act, R.S.O. 1990, c. I.8, as amended (the "Act"), in particular sections 441, 441.2 and 441.3;

AND IN THE MATTER OF a Notice of Proposal to Impose a Compliance Order and Notice of Proposal to Impose Administrative Penalties dated February 19, 2021, issued by the Director, Litigation and Enforcement by delegated authority from the Chief Executive Officer;

AND IN THE MATTER OF a proceeding commenced through a Request for Hearing in accordance with subsections 441(3), 441(5), 441.3(2) and 441.3(5) of the Act.

B E T W E E N:

2070375 ONTARIO INC. o/a MCGILL HEALTH SERVICES and PETER MACCABE APPLICANTS

and

CHIEF EXECUTIVE OFFICER of the FINANCIAL SERVICES REGULATORY AUTHORITY RESPONDENT

BEFORE: Bethune Whiston, Chair of the Panel and Vice-Chair of the Tribunal

WRITTEN SUBMISSIONS: For the Applicants – No submissions filed. For the Respondent, Chief Executive Officer – No submissions filed.

REASONS FOR DECISION

I. INTRODUCTION

1A Notice of Proposal to Impose a Compliance Order and Notice of Proposal to Impose Administrative Penalties ("NOP"), dated February 19, 2021, was issued by the Director, Litigation and Enforcement by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority (the "CEO") to Peter Maccabe and to 2070375 Ontario Inc. o/a McGill Health Services ("McGill Health"). The NOP, pursuant to section 441 of the Act, proposed three things; 1) to order McGill Health to immediately cease soliciting insurance business in Ontario and permanently cease operating six listed websites, 2) to impose an administrative penalty of $5,000 on Peter Maccabe, for failing to comply with a requirement established under the Act, namely, an obligation assumed by way of an undertaking under the Act as defined under section 441.1(d) of the Act, and 3) to impose an administrative penalty of $10,000 on McGill Health, for failing to comply with a requirement established under the Act, namely, an obligation assumed by way of an undertaking under the Act as defined under section 441.1(d) of the Act.

2A Request for Hearing was filed on March 24, 2021 by the Applicants with the Financial Services Tribunal, asking for the Tribunal to order: 1) that the action be discharged with no penalty or costs based upon a mutual agreed plan going forward, and 2) full disclosure of all documents and forms/evidence withheld from 2010 to the present.

II. DECISION

3Having considered the following facts and statutory framework, the FST orders that the Applicants' Request for Hearing be dismissed.

III. FACTS

4Four pre-hearing teleconferences ("PHCs") in this matter have been held. The first on May 25, 2021, the second on September 7, 2021, the third on October 4, 2021 and the fourth on January 26, 2022. The Applicants were in attendance at the first three PHCs but not in attendance at the January 26, 2022 PHC, despite being given proper notice of the PHC and reminded of the date of the PHC by CEO's counsel in an email dated January 14, 2022. Each PHC was documented in a Pre-Hearing Conference Memorandum ("PHCM") issued to the parties.

5In the February 2, 2022 PHCM documenting the January 26, 2022 PHC, it was noted that Mr. Maccabe had communicated with the Registrar's office on December 17, 2021 and advised "he would not be continuing to participate in the proceedings but was unwilling to file a Withdrawal/Discontinuance in Form 5".

6It was also noted in the February 2, 2022 PHCM that "Mr. Maccabe had communicated with CEO's Counsel on several occasions his intention to stop participating unless the CEO withdrew the Notice of Proposal in this proceeding. CEO's counsel had provided their submissions to Mr. Maccabe on January 14, 2022 and had reminded the Applicant of the deadline of January 31, 2022 for the Applicant to file his submissions. Counsel had also suggested that the Applicant raise his concerns at the January 26, 2022 PHC".

7At the January 26, 2022 PHC Counsel for the CEO requested that the Chair dismiss the proceeding. The request was documented in the February 2, 2022 PHCM as follows, "In addition to the non-attendance at the PHC today and the Applicant's indication of an unwillingness to continue participating in the proceedings, the Respondent expressed concern at the Applicant's history of non-compliance with the Chair's orders for deadlines to complete specific actions as set out in the PHC memoranda for the PHCs held on May 25, 2021, September 7, 2021 and October 4, 2021".

8On January 28, 2022, a Notice of Intention to Dismiss was issued by the Tribunal to the Applicants (the "Notice"). The Notice indicated that the Tribunal proposed to dismiss the proceeding without a hearing if reasonable cause was not shown within 30 days of the giving of the Notice for, 1) Mr. Maccabe advising the Registrar on December 17, 2021 that he would not continue to participate in the proceedings but was unwilling to file a Withdrawal of his Request for Hearing, and 2) Mr. Maccabe's failure to appear at the pre-hearing teleconference on January 26, 2022.

9The Applicants were advised that they had the right to make written submissions to the Tribunal on the issue of reasonable cause for the above communication to the Registrar and the failure to appear, provided the submissions were received within 30 days of the giving of the Notice (by February 28, 2022). After considering the submissions, if any, the Tribunal could dismiss the proceeding without further hearing or could order it to continue, with or without conditions.

10The Applicants were also advised in the Notice that if the Tribunal dismisses the proceeding without further hearing, the CEO, or his delegate, could impose the Compliance Order and Administrative Penalties outlined in the February 19, 2021 Notice of Proposal.

11Mr. Maccabe sent an email to the Registrar on February 4, 2022, indicating, among other things, "I received your second note regarding the 'motion to dismiss' the action above. What is the purpose of this?" He was advised by the Registrar as follows:

"The Notice of Intention to Dismiss was issued following your failure to appear at the scheduled pre-hearing conference. Parties have the opportunity to file submissions explaining why the Request for Hearing should not be dismissed. Following the expiry of the deadline set out in the Notice the Chair will review any submissions filed and issue a decision determining if the Request for Hearing should be dismissed or should be allowed to continue. Any submissions you wish to make on the matter should be sent to this email address, and copied to counsel for the Respondent…"

12No written submissions have been received from the Applicants.

IV. STATUTORY FRAMEWORK

13The FST is governed by certain legislation in Ontario, including the Statutory Powers Procedure Act, R.S.O. 1990, Chapter S.22 (the "SPPA"). Section 4.6 of the SPPA describes the conditions required for a tribunal to dismiss a proceeding without a hearing.

14Subsection 4.6(6) states, "A tribunal shall not dismiss a proceeding under this section unless it has made rules under section 25.1 respecting the early dismissal of proceedings and those rules shall include…

b. the right of the parties who are entitled to receive notice under subsection (2) to make submissions with respect to the dismissal; and

c. the time within which the submissions must be made."

15The FST has made rules under section 25.1 respecting the early dismissal of proceedings. Rule 35.01 of the Rules of Practice and Procedure For Proceedings Before the Financial Services Tribunal (the "Rules"), states, in part, as follows: "Where a party who has initiated a proceeding does not appear at a scheduled hearing or pre-hearing conference of which proper notice has been given in accordance with these Rules, the Tribunal may give notice of intention to dismiss the proceeding if reasonable cause is not shown within 30 days of the giving of the notice for the party's failure to appear."

16Rule 35.02 of the Rules, states, in part, as follows: "A party who has been given notice of intention to dismiss under Rule 35.01 shall have the right to make written submissions to the Tribunal on the issue of reasonable cause for failure to appear within 30 days of the giving of such notice. After considering the submissions, if any, the Tribunal may dismiss the proceeding without further hearing…"

V. ORDER

17In light of the foregoing facts and statutory framework, the Tribunal orders the Applicants' Request for Hearing is dismissed.