FINANCIAL SERVICES TRIBUNAL

Citation: Mann v. Ontario (CEO of FSRA), 2024 ONFST 15 FST File No. I0985-2023 Date: 2024/10/08

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

AND IN THE MATTER OF a Notice of Proposal to Impose Administrative Penalties dated April 24, 2023 issued by the Director, Litigation and Enforcement by delegated authority from the Chief Executive Officer of the Financial Service Regulatory Authority;

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

B E T W E E N:

TEJPAL MANN

APPLICANT

and

CHIEF EXECUTIVE OFFICER of the FINANCIAL SERVICES REGULATORY AUTHORITY

RESPONDENT

BEFORE:

Paul Farley, Chair of the Panel and Vice-chair of the Tribunal

Mohammad Faisal Siddiqi, Member of the Panel and Member of the Tribunal

Garnet Fenn, Member of the Panel and Member of the Tribunal

APPEARANCES:

For the Applicant – Mr. Tejpal Mann, not appearing

For the Respondent – Ms. Kelsey Chisamore-Johnston

DATE HEARD: September 18, 2024

REASONS FOR DECISION

I. INTRODUCTION

1This matter has its genesis in a Notice of Proposal issued on April 24, 2023, by the CEO of the Financial Services Regulatory Authority “FSRA” (the CEO or the Respondent). In the Notice of Proposal, the CEO proposed to impose an administrative penalty on Tejpal Mann (the Applicant or Mr. Mann) in the amount of $20,000 for directly or indirectly paying or allowing compensation to be paid to a non-licensee, contrary to section 403(1) of the Insurance Act¹.

2The Applicant filed a Request for Hearing on May 8, 2023, within the time permitted by legislation. He challenged the penalty set out in the Notice of Proposal as being “…unreasonable and excessive…”.

3The hearing was set, peremptory on Mr. Mann, for September 18, 19 and 20, 2024. Mr. Mann did not attend the hearing, and the Tribunal dismissed the proceeding without further hearing and without further notice. These are our reasons for doing so.

II. background

4On September 11, 2023, in response to the Request for Hearing filed by Mr. Mann, a pre-hearing conference was held. Mr. Mann attended this first pre-hearing conference virtually by way of Microsoft Teams and agreed to the issues in the case. He also agreed to several scheduling matters in preparation for the hearing, including setting dates for the disclosure of documents between the Parties and selecting a timetable for the preparation of an agreed statement of facts and agreed book of documents. Mr. Mann consented to the electronic delivery of documents, a fact that will become relevant later in these reasons. At the conclusion of this first pre-hearing conference the Parties agreed to January 23, 2024, as the date for the next pre-hearing conference.

5It was agreed by the Parties that each pre-hearing conference, and the hearings that were scheduled in this proceeding, were to take place virtually. There were no in-person attendances scheduled.

6On January 15, 2024, Mr. Mann emailed Counsel for the Respondent and requested an adjournment of the January 23, 2024, pre-hearing conference because he was “…sick for the last couple of weeks [and] didn’t get a chance to review documents…”. The Respondent consented to the adjournment and the pre-hearing conference was adjourned for one month, on consent, to February 16, 2024.

7On February 16, 2024, Mr. Mann did not attend the pre-hearing conference and did not communicate with the Respondent, nor the Registrar, as to why he was not in attendance. After the commencement of the pre-hearing conference the Registrar attempted to contact Mr. Mann and was successful in reaching him by telephone. Mr. Mann told the Registrar that he had been in a car accident and could not attend. Once again, the pre-hearing conference was adjourned on consent. It was rescheduled for February 23, 2024.

8On February 21, 2024, Mr. Mann wrote the Registrar to advise that he could not attend the February 23, 2024, pre-hearing because “[My] vehicle is a write off…” and “I have to [sic] much work load and have to turn over couple of jobs this week.” It was not explained why a brief pre-hearing conference would materially affect either of the reasons given for an adjournment, but the Respondent consented to another adjournment. It was left to the Registrar to arrange, with the Chair and the Parties, new dates for the next pre-hearing conference.

9Mr. Mann did not respond to attempts by the Registrar to arrange another pre-hearing conference to replace the lost February 23, 2024 date. As a result, the Chair of the Tribunal, directed that Notice be sent to the Parties that the next pre-hearing conference would take place March 1, 2024, at 9:30 am.

10On March 1, 2024, Mr. Mann attended the pre-hearing conference. At that time the Parties agreed that the hearing would take place on June 26, 27 and 28, 2024 beginning each day at 9:30 in the morning. Shortly after the March 1, 2024, pre-hearing conference the Registrar sent to the Parties a pre-hearing conference memorandum confirming the dates for hearing as well as the schedules agreed to by the Parties for the exchange of documents and the finalization of other pre-hearing matters.

11On March 7, 2024, the Parties were sent a Notice of Hearing with respect to the June hearing dates. This Notice set out the issues to be determined at the hearing and cautioned the Parties with respect to the consequences of a failure to participate at the hearing. The Notice stated:

IF ANY PARTY FAILS TO PARTICIPATE in the hearing in accordance with this Notice, the Tribunal may proceed with the hearing without the party’s participation and in the party’s absence, and the party will not be entitled to any further notice in the proceeding.

12On May 23, 2024, after receiving the Respondent’s Book of Authorities, Mr. Mann emailed Respondent’s Counsel, and copied the Registrar, advising that “as per my mental condition and the amount of data sent to me I need 2 months time to go through this.” Mr. Mann also advised that he was considering hiring a legal firm. Although Mr. Mann did not specifically ask for an adjournment, Respondent’s Counsel advised the Tribunal that they opposed this apparent request for an adjournment.

13On May 23, May 24, May 27 and May 28, 2024, the Registrar attempted to contact the Applicant to arrange for a pre-hearing conference to deal with the apparent adjournment request. The Registrar reached out to Mr. Mann by email (as well as by telephone, unsuccessfully) to schedule a pre-hearing conference. Mr. Mann finally responded by email on May 28, 2024. He stated that he is struggling to make ends meet and “…Miss Kelsey [counsel for the Respondent] asked for PHC I don't know why, she can go ahead do this, as I have no time for this…”.

14On May 29, 2024, because Mr. Mann declined the opportunity to attend a pre-hearing conference to make submissions in support of adjourning the June hearing, the Chair of the Tribunal advised the Parties, through the Registrar,

While Mr. Mann has told counsel for FSRA that he is considering hiring a legal firm and that he needs two months to review the materials sent to him, he has not filed a motion to request an adjournment with the Registrar. In addition, Mr. Mann has not availed himself of the opportunity to request an adjournment orally and argue in support of that request at a PHC. In my view there is, at this time, nothing concrete before me to decide.

If I am wrong in this regard, and the May 23 email from Mr. Mann to counsel for FSRA is a request for an adjournment, I decline to grant the adjournment.

Rule 25.01 of the Rules of Practice and Procedure for the FST provides a discretion in the Tribunal to grant an adjournment in appropriate cases. The person requesting an adjournment must provide a reasonable basis for the request. Vague assertions that a party is considering hiring a legal firm and that another month is required to respond to a book of authorities and written submissions from FSRA, particularly when the parties agreed at the March 1 PHC that the Applicant would file their written submissions by May 31, 2024, is not a sufficient basis for an adjournment.

The hearing scheduled for June 26, 27 and 28, 2024, will proceed as agreed to by the parties

15As circumstances unfolded, notwithstanding the decision of the Tribunal Chair to proceed on the dates scheduled for the hearing, the June hearing did not, in fact, proceed.

16On June 7, 2024, Mr. Mann emailed the Registrar and Respondent’s Counsel, this time specifically requesting an adjournment, to seek clarification and guidance “…perhaps from legal counsel or other trusted advisors…”. In response the Respondent’s Counsel did not oppose “…a relatively short adjournment…in order for the Applicant to seek legal advice.”.

17On June 11, 2024, the Respondent’s Counsel advised the Applicant and Registrar that the Respondent would be calling an additional witness at the hearing. On the same date Mr. Mann wrote to oppose the calling of additional witnesses by the Respondent.

18On June 11, 2024, given the consent to an adjournment by the Respondent’s counsel, the Tribunal Chair advised the Parties, through the Registrar, that the June hearing dates were adjourned and that the first day scheduled for the hearing, June 26, 2024, was to be retained as a pre-hearing conference day to deal with the Applicant’s objection to the Respondent calling an additional witness.

19On June 13, 2024, the Parties were served with a Notice of Pre-hearing Conference to take place on June 26, 2024, at 9:30 in the morning. This Notice contained the caution that the matter will proceed “…without the party’s participation and in the party’s absence…” should a Party fail to participate.

20On June 26, 2024, having been properly served with a Notice of Pre-hearing Conference, Mr. Mann failed to attend. He did not respond to telephone calls from the Registrar made during the pre-hearing conference. The Respondent’s Counsel took the position that, rather than dismissing the proceeding outright for a failure of the Applicant to participate, an option permitted by Rule 35.01², the matter be set down for hearing to give the Applicant a further opportunity to present his case.

21The June 26, 2024, pre-hearing conference was then adjourned for three months to September 18, 19, 20, 2024 at 9:30 each morning for hearing, peremptory on the Applicant. The Chair noted in the pre-hearing conference memorandum that was circulated to the Parties shortly after the adjourned June hearing, that the matter was set peremptory on the Applicant and “Baring some extraordinary event the matter will proceed on those dates.”

22On June 27, 2024, the Registrar emailed the Parties and provided a Notice of Hearing for September 18, 19 and 20, 2024 commencing at 9:30 each morning. This Notice contained the usual caution, referred to above, with respect to the possible results of a failure of a Party to participate.

23On September 18, 2024, at 9:30 a.m. the Respondent’s Counsel attended before the Tribunal, with witnesses, ready to present the case for the Respondent in support of the Notice of Proposal provided to Mr. Mann in April 2023. Mr. Mann did not attend the hearing. No one appeared on his behalf.

24The Registrar confirmed that the Notice of Hearing, dated June 27, 2024, for the hearing set to begin September 18, 2024, had been delivered to Mr. Mann by email on June 27, 2024, and that attached to the Notice was the Registrar’s name, address, telephone number and electronic mail address as well as the date and time of transmission as required by the Rules³. In addition, the Notice had been sent by ordinary mail to the Applicant’s last known address. As noted above, Mr. Mann agreed, at the first pre-hearing conference, to accept service of documents by email.

25The Tribunal was satisfied that Mr. Mann was properly served with the Notice of Hearing in accordance with the Tribunal’s Rules of Practice and Procedure.

26The commencement of the September 18, 2024 hearing was adjourned briefly to allow the Registrar an opportunity to attempt contact with Mr. Mann at the telephone number that had been used in the past to reach Mr. Mann, and to allow some time for Mr. Mann to appear after the 9:30 a.m. start time. The Registrar received no response to her phone calls.

27Mr. Mann did not attend, nor contact the Registrar nor the Respondent, at any time prior to the conclusion of the hearing on September 18, 2024 at 10:15 a.m.

III. disposition

28Counsel for the Respondent made submissions with respect to the choices available to the Tribunal under Rule 35.01 and the Tribunal deliberated.

29The Tribunal agrees with the Respondent’s counsel that the Tribunal has four options to choose from when determining how to proceed where a Party does not appear.

i. Adjourn the matter to another date.

ii. Proceed with the hearing without the Applicant being present.

iii. 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.

iv. Dismiss the proceeding without further hearing and without further notice.

30Respondent’s counsel did not take a position on which option was most appropriate in the circumstances, but merely presented the alternatives available.

31The Tribunal, having considered carefully the facts of the case, determined that option four is the most appropriate course of action in this case and, therefore, dismissed this proceeding without further hearing and without further notice.

IV. analysis

32The Tribunal is of the view that it is only in exceptional cases that the power contained in “Rule 35. Non-Attendance by Party who has initiated a Proceeding” will be used to dismiss a proceeding without further hearing and without notice. In our view, given the history of this case as set out above, this is one of those exceptional cases.

Precedent

33Precedents for dismissing a hearing without notice are scarce. Counsel for the Respondent referred the Tribunal to Sohi and Sandhu⁴ a case where both Applicants were licensed insurance agents, and the subject of Notices of Proposals to revoke their insurance agent licenses. Both filed Requests for Hearing and agreed to consolidation of their respective proceedings. Mr. Sohi attended on the date set for the hearing. Mr. Sandhu did not appear and provided no explanation for his absence.

34As in this case, the hearing was briefly adjourned, and attempts were made by the Registrar, without success, to contact Mr. Sandhu. The Chair of the Tribunal, sitting alone, decided, pursuant to Rule 35.01, to proceed with the hearing without Mr. Sandhu in attendance, and ultimately ordered the revocation of both Applicants’ insurance agent’s licences.

35The Sohi and Sandhu case, however, can be distinguished from the case before us. In the Sohi and Sandhu case dismissal without hearing was not the preferred approach because the other Applicant on the consolidated hearing, Mr. Sohi was present and ready for the hearing and, therefore, a hearing was going to take place in any event. In this case, there is only one person the subject of a Notice of Proposal, Mr. Mann, and a hearing is not inevitable.

36The circumstances surrounding the case of Peo v. Ontario (Superintendent of Financial Services)⁵, also referred to by Respondent’s counsel, are more closely aligned with this case. In the Peo case a Notice of Proposal to Impose a Monetary Penalty was served on Ms. Peo who then filed a Request for Hearing. Ms. Peo did not attend a pre-hearing conference that had been scheduled and did not attend the hearing that had been scheduled. On the hearing date, the Respondent, like here, attended, ready for hearing with witnesses present and was ready to proceed. The Tribunal relied on Rule 35.01 to dismiss the proceeding without further hearing and without notice.

37The Applicant in the Peo case appeared to entirely ignore the process from the time the Request for Hearing was filed, while here, the Applicant has been involved in the process, to an extent. The result, however, is the same, a hearing scheduled, time wasted and no Applicant in attendance to present their case. In our view the behaviour of Mr. Mann is more egregious than Ms. Peo (who simply chose to ignore the entire process) because Mr. Mann, by participating in a sporadic way with failures to attend and requests for adjournment, caused the process to continue with no resolution, thereby delaying the process, for almost a year and a half.

38Dates were set for this hearing, to begin on September 18, 2024, peremptory on the Applicant, because the Applicant had shown by his conduct that he had little interest in proceeding with his Application diligently.

39The Applicant failed to attend pre-hearing conferences with little practical consequence to himself and, having been granted requests for adjournments for several reasons, including so that he could prepare, or obtain counsel, or take steps to further his Request for Hearing, he has squandered the additional time given to him. The adjournment of the hearing to this date on a peremptory basis was a last chance for the Applicant to be heard. He squandered that opportunity as well.

Protection of the Public

40FSRA is mandated, by its governing legislation, to regulate and generally supervise the regulated sectors, including the insurance sector, and, by doing so, to contribute to public confidence in the regulated sectors.⁶ With respect to the financial services sector, which includes insurance, FSRA’s objects include promoting high standards of business conduct and protecting the rights and interests of consumers.⁷

41In our view, public confidence is not enhanced by a regulatory process that drags on endlessly with adjournment after adjournment and culminates in yet another non-attendance by the Applicant at a hearing that has been set peremptory on him.

42The delays in this case, which rest squarely at the feet of Mr. Mann, come at considerable cost to the process. Time and effort and expense on the part of the Tribunal and the Regulator are wasted, rather than being spent on ensuring the objects of the Regulator as set out in the FSRA Act⁸ are met.

The alternatives available under Rule 35.01 when a Party fails to participate

43Rule 35.01 provides to the Tribunal considerable authority to control its own process in cases where a Party is not advancing their cause diligently. Rule 35.01 states:

35. Non-Attendance by Party who has initiated a Proceeding

35.01 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 proceed in the absence of that party, may dismiss the proceeding without further hearing and without further notice, or 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.

44There is no question that proper notice has been given the Applicant.

Adjourning the hearing to another date

45Simply adjourning the September 18, 2024 hearing to another date, the first alternative presented by the Respondent’s counsel, in our view, would incur further delay with little chance for resolution, based on the prior actions of the Applicant. This hearing date was set peremptory on the Applicant to no effect.

Notice of intention to dismiss

46To give a Notice of Intention to dismiss if reasonable cause is not shown within 30 days of the giving of the notice for the party’s failure to appear is also, in our view, not appropriate in these circumstances. The history of this Applicant on this case suggests that giving Notice of Intention to Dismiss would result in more delay with little benefit to the Applicant, who has a history of failing to respond and attend, and certainly no benefit to the process.

Proceeding in the absence of the Applicant

47Proceeding with the hearing in the absence of the Applicant, pursuant to Rule 35.01, was a possibility in this case. Counsel for the CEO indicated the Respondent was ready to proceed, witnesses were present, and documents prepared. Because there was no agreement on facts or documents the Tribunal was told that the hearing was likely to take two of the three days scheduled. The Tribunal decided against this approach in all the circumstances.

48In deciding not to proceed with the hearing in the absence of the Applicant, who had shown little interest in actively advancing their cause, the Tribunal considered it relevant that a general administrative monetary penalty proposed by the CEO of FSRA under the Insurance Act can be imposed, and will be carried out, if the person to whom the proposal is directed does nothing, i.e., does not file a Request for Hearing within 15 days.

49While the Applicant in this case filed a Request for Hearing within the time prescribed, he has done little to further his request. By simply filing a three page “Request for Hearing” Form, the Applicant has avoided the requirement to pay the administrative penalty proposed since May 9, 2023 (fifteen days after the Notice of Proposal was issued) while, at the same time, requiring the Respondent to devote significant time and resources to preparing for hearing. A hearing that, ultimately, the Applicant failed to attend, without notice or explanation.

50To hold a hearing in these circumstances, without the Applicant present, would, in our view, reward the behaviour of the Applicant and encourage others to file a Request for Hearing and then not take the steps necessary to advance it. This would not be a proper result and would seriously undermine the legislature’s intent to have an expedited administrative process for dealing with contraventions or failures to comply with the Insurance Act and Regulations.⁹ The resources of the Regulator in fulfilling its objects are better spent elsewhere.

Dismiss the proceeding without hearing and without notice

51The Tribunal is aware, that of the three alternatives available to it under Rule 35.01 when a Party does not participate, the Tribunal has selected the alternative with the most significant immediate consequence to the Applicant. In deciding to dismiss the hearing without further hearing and without further notice, the Tribunal has concluded, based on all the circumstances, that this case is, in fact, exceptional.

52The facts here show an Applicant who, having started the hearing process by simply filling out and filing a “Request for Hearing” Form has, time and again conducted himself in a manner which has the effect of ensuring a hearing does not take place in a timely manner.

53At the March 4, 2024, pre-hearing conference Mr. Mann agreed that he was available for the hearing of this matter on June 26, 27 and 28, 2024. He had almost four months to prepare for the hearing.

54One month before the June hearing, on May 24, 2024, Mr. Mann said he could not be ready. Although he indicated reasons for a possible delay, he did not specifically request an adjournment and did not answer the telephone calls and emails from the Registrar who was attempting to schedule a time to allow him to explain his position that an adjournment was necessary, if one was in fact being requested.

55Only when Mr. Mann, who had not responded to the Registrar, was told of the decision of the Chair that the hearing would proceed, as scheduled, did he formally seek an adjournment.

56Once again, Mr. Mann was provided an accommodation. The hearing scheduled for June did not proceed, the June hearing dates were cancelled, and Mr. Mann was told that the first day of the now cancelled hearing, June 26, 2024, would be set aside as a pre-hearing conference so he could make submissions with respect to his objection to the Respondent’s intention to call a further witness. Mr. Mann, without explanation, did not attend on June 26, 2024.

57Rather than dismissing the hearing on June 26, 2024, based on non-attendance by a Party who has initiated a proceeding (Rule 35.01), the matter was again adjourned to September 18, 19 and 20, 2024 thereby providing Mr. Mann a further opportunity to present his evidence and argument in support of his request for hearing. Because of the history of Applicant induced delay in this case, the September hearing dates were set peremptory on Mr. Mann.

58Mr. Mann, again without explanation, did not attend the hearing set for September 18, 19 and 20, 2024. Mr. Mann’s failure to attend the hearing resulted in a Rule 35.01 argument being presented by the Respondent and heard by the Tribunal.

59This is not a case of a first-time failure to attend a hearing. This is a case where the Applicant has failed to appear on scheduled pre-hearing conference dates, has received a requested adjournment of a scheduled three-day hearing and has failed to attend a further pre-hearing scheduled to argue an issue that he had raised without explanation.

60This is a case where the Applicant has failed on numerous occasions to respond to communications from the Registrar by email and telephone.

61This is a case where the Applicant has said “…I have no time for this [process]…”, a process which he started with a Request for Hearing.

62Where a Request for Hearing is filed there is an onus on the Applicant to participate in the process and to take the steps necessary to further its completion, including attending hearings when scheduled.

63This Applicant, by his actions in this case, has delayed a process that should have been completed months ago. He has been given numerous chances to present his case and has not done so. In our view, the circumstances of this case, and the integrity of the process, requires that this case be dismissed.

V. ORDERs

64IT IS ORDERED THAT the Request for Hearing filed by the Applicant May 8, 2023, is hereby dismissed.

65IT IS FURTHER ORDERED THAT the CEO of FSRA carry out the Notice of Proposal to Impose Administrative Penalties on the Applicant dated April 24, 2023.

66The Respondent did not seek costs in this matter and so none are ordered.

Footnotes

1. 1R.S.O. 1990, c.I.8
2. 2Financial Services Tribunal Rules of Practice and Procedure, Rule 35.01
3. 3Ibid., Rule 9
4. 4Sohi and Sandhu v. Ontario (Superintendent Financial Services), 2019 ONFST 9,
5. 52015 ONFST 33,
6. 6Financial Services Regulatory Authority of Ontario Act, 2016, S.O. 2016, c. 37, section 3(1)
7. 7Ibid., section 3(2)
8. 8Ibid., section 3(1)
9. 9Insurance Act, R.S.O. 1990, c. I.8, sec. 441.3