Masoud Asnafi and Approved Mortgage Brokers v. Chief Executive Officer of the Financial Services Regulatory Authority, 2024 ONFST 17

FINANCIAL SERVICES TRIBUNAL

2024 ONFST 17

FST File No. M1043-2024 and M1046-2024 Date: 2024/12/09

IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c. 29, as amended (the “Act”), in particular sections 16, 21, 38 and 39;

AND IN THE MATTER OF a Notice of Proposal to Refuse to Renew Licence and to Impose Administrative Penalties dated May 30, 2024, issued by the Director, Litigation and Enforcement by delegated authority from the Chief Executive Officer;

AND IN THE MATTER OF a proceeding commenced through Requests for Hearing in accordance with section 39(2) and 39(5) of the Act.

B E T W E E N:

MASOUD ASNAFI AND APPROVED MORTGAGE BROKERS

APPLICANT

and

CHIEF EXECUTIVE OFFICER of the

FINANCIAL SERVICES REGULATORY AUTHORITY

RESPONDENT

BEFORE:

Bethune Whiston, Vice-Chair, Financial Services Tribunal

APPEARANCES:

For the Applicant (Masoud Asnafi and Approved Mortgage Brokers) – Self-represented

For the Respondent – Ms. Kelsey Chisamore-Johnston, Counsel, and Mariya Savova, Litigation Specialist

DATE HEARD:

November 22, 2024

REASONS FOR DECISION

I. INTRODUCTION

1. On October 25, 2024, the respondent made an oral motion asking for summary dismissal of this proceeding (matter number M1043-2024) and matter number M1046-2024, and I issued a Notice of Intention to Dismiss. The request was made in accordance with the following Rules of Practice and

Procedure for Proceedings before the Financial Services Tribunal: Rules 14.01(a), 35 and 36. After the request and the issuance of the Notice, the two matters were consolidated on consent.

In this decision, where the term “applicant” is used it will refer to both Mr. Asnafi and Approved Mortgage Brokers Inc.

II. DECISION

2. After considering the submissions made by Mr. Asnafi, and based on the reasons that follow, the proceeding will continue on the terms outlined in the Order below.

III. DESCRIPTION OF EVENTS IN THE PROCEEDING

3. A Notice of Proposal dated May 30, 2024, was issues by the Director, Litigation and Enforcement, by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority, proposing, among other things:

a. to refuse to renew the mortgage broker licence (# M12001788) issued to Mr. Asnafi;

b. to impose twenty-one administrative penalties in the total amount of $110,000 on Mr. Asnafi; and

c. to impose an administrative penalty in the amount of $10,000 on Approved Mortgage Brokers Inc.

4. The proceeding commenced when Mr. Asnafi on June 13 and 14, 2024, respectively, requested on behalf of himself and Approved Mortgage Brokers, a hearing in front of the Financial Services Tribunal challenging the proposals.

5. Pre-hearing conferences had been scheduled, with input from both the applicant and the respondent, for September 25, 2024 and October 25, 2024. The applicant missed both PHCs without contacting the FST or FSRA to advise of his absence or request the PHCs be rescheduled.

6. After the first missed PHC the applicant was advised by email dated September 25, 2024, “if you do not attend the rescheduled PHC and do not...request a further postponement, FSRA may bring a motion seeking summary dismissal of the proceeding.”

7. When the applicant missed the second PHC, FSRA requested that the proceedings be dismissed and I issued a Notice of Proposal to Dismiss the proceedings dated October 25, 2024. The notice indicated that the applicant had the right to make written submissions to the Tribunal on the issue of reasonable cause for failure to appear, provided that the submissions must be received within 30 days of the giving of the notice.

8. The applicant contacted the FST asking to speak with someone regarding his absence. On November 7, 2024, the FST offered dates for a further PHC, but advised the applicant, “if the [applicant wishes] to have an opportunity to proceed with the hearing

process, the applicant… must provide compelling reasons why the two scheduled PHCs were missed...The submissions must be filed with the Tribunal on or prior to November 25, 2024.”

9. The applicant then offered to provide doctor’s notes to support his absences at the two PHCs. By email dated November 13, 2024, the applicant was advised as follows:

“...The Chair has advised that your opportunity to have a hearing will be lost if you do not respond to the Notice of Intention to Dismiss your request for a hearing.

If you lose your chance to have a hearing, then the Financial Services

Regulatory Authority will be free to take the actions they proposed in their Notice of Proposal dated May 30, 2024. They will likely refuse to renew your licence and impose on you the proposed $110,000 in administrative penalties and on Approved Mortgage Brokers Inc. the proposed $10,000 administrative penalty.

Your response to the Notice of Intention to Dismiss is due by November 25. As we told you in our email dated November 7, if you want to have an opportunity to proceed with the hearing process, you must provide compelling reasons why the two scheduled PHCs were missed. The doctor’s notes would be helpful as part of those reasons but we will also need more information about what is going on. We need to know you are serious about proceeding with the hearing and will communicate with us when you are expected to and you will meet deadlines that are set.

We can help explain this to you at a pre-hearing conference before the due date for your submissions...”

10. The applicant provided the two doctor’s notes and a PHC was set for November 21, 2024.

11. At the PHC, I explained the PHC process and heard from the parties. Ms. Chisamore- Johnston indicated that the doctor’s notes were not a sufficient answer to explain the behaviour of the applicant. Mr. Asnafi then explained the challenges he was facing. Ms. Chisamore-Johnston advised that since Mr. Asnafi had attended the PHC on November 21, 2024, the respondent was willing to proceed toward a hearing, although if the behaviour happened again she would move for a motion to dismiss the proceeding.

12. The applicant was asked to provide, on or prior to November 25, 2024, some further written information, such as he had provided orally at the PHC, to supplement the doctor’s notes for his submissions in response to the Notice to Dismiss. I indicated that the information did not need to include personal medical information. Mr. Asnafi agreed, and followed up with an email to the Tribunal on November 22, 2024, with the requested information.

IV. ANALYSIS AND DECISION

13. The applicant missed the first two pre-hearing conferences set in this proceeding without providing any notice to the respondent or the Tribunal. The applicant had been 3

warned about this behaviour after the first PHC that he missed and he had been warned that he might face a request from the respondent to have the proceeding dismissed if it happened again. When the same behaviour occurred a second time a Notice of Intention to Dismiss was issued by the Tribunal at the request of the respondent.

14. After receiving the Notice of Intention to Dismiss the applicant reached out to the Tribunal to confirm that he still wished to proceed with the hearing process, so a third PHC was scheduled for November 21, 2024. Prior to the third scheduled PHC, the applicant provided doctor’s notes to support his non-attendance at the first two PHCs. At the November PHC, the Tribunal and the respondent both indicated that the doctor’s notes were not sufficient to, a. explain the applicant’s absences, and b. provide confidence that the applicant would attend future scheduled events and respect other orders of the Tribunal.

15. At the November PHC, and subsequently in writing, the applicant provided further context to support the doctor’s notes and indicated that the behaviour would not happen again. The respondent was agreeable to providing the applicant with another opportunity to proceed toward a hearing.

16. Rule 1.03 of the Tribunal’s Rules indicates that the “Rules shall be broadly interpreted to produce the quickest, most just and least expensive determination of the issues before the Tribunal.” It is just, in these circumstances and considering the applicant’s oral and written submissions, to provide the applicant with another opportunity to proceed toward a hearing. However, it is time-consuming and expensive to schedule PHCs and order deadlines, usually on the agreement of all parties, and then not have the schedules and other orders respected. Therefore, the order to proceed will be conditional, as indicated below.

V. ORDER

17. The proceedings shall continue, on the condition that in future the applicant attend PHCs that are scheduled and meet deadlines ordered by the Tribunal. If he is unable to do so, the applicant must communicate with the respondent and the Tribunal in advance of any scheduled PHC he is unable to attend or deadlines he is unable to meet to request the PHC be rescheduled or the deadline be extended.

Dated at Toronto, this 9th day of December, 2024

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