SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-14-498381
DATE: 20140730

RE: PRO-DEMNITY INSURANCE COMPANY

Applicant

• and –

FINANCIAL SERVICES COMMISSION OF ONTARIO and ATTORNEY GENERAL OF ONTARIO

Respondents

BEFORE: Justice D.L. Corbett

COUNSEL: Mark Frederick, for the Applicant

Robert Ratcliffe, for the Respondents

DATE HEARD:

D.L. CORBETT J.

E N D O R S E M E N T

[1] The applicant applies for a declaration that the proposed expansion of the scope of its insurance business is not inconsistent with s. 2(5) of the Architects Act.[^1] If this declaration is granted, this would remove one “concern” raised by the Financial Services Commission of Ontario (“FSCO”) about the applicant’s proposal.

[2] During argument I raised concerns about the court’s jurisdiction. The parties take the position that discussions between FSCO and the applicant have not reached the point where there is an adverse “decision” from FSCO. Rather, what has been raised are “concerns” by FSCO. Thus, at present, there is no decision to appeal or from which to seek judicial review.

[3] FSCO is a specialized regulator responsible for regulating the insurance industry (among other things). This Court should be reluctant to fashion an alternate path to the usual administrative processes for deciding issues properly within the mandate of FSCO. See: Mahar v. Rogers Cablesystems Ltd. and cases following it.[^2]

[4] As reflected in Mahar and the decisions following it, there are two questions that arise. First, does this Court have jurisdiction at all, given the regulatory framework that applies to this issue? Second, if this Court technically has jurisdiction, should it decline to exercise that jurisdiction and defer to FSCO to decide the issue, subject to whatever appeals and/or judicial review that may flow from FSCO’s decision?

[5] On the day of the hearing of this application, counsel responded to the Court’s concerns on this issue as best they could, given that they had no notice of it.

[6] I have concluded that the parties should have a proper opportunity to address the Court’s jurisdictional concerns before I decide the point. To paraphrase from Sharpe J. in Mahar, while it is true that this is not a case where a review is sought of a decision of FSCO nor is it a collateral attack on such a decision, in some ways this case could present a more serious challenge to the integrity of the regulatory regime established by the Legislature. If this Court decides this case, this could have the result of establishing an alternate forum for determination of an important aspect of the statutory scheme for insurance regulation.[^3] On the other hand, if the Court declines to decide the issue, the applicant could find itself having to go through a lengthy administrative process that could have been resolved more efficiently by a prompt determination of a question of law.

[7] I do not have a complete record addressing jurisdictional factors and I do not have submissions from the parties respecting an appropriate schedule for the exchange of further materials. Therefore I establish a timetable that is subject to revision once counsel have an opportunity to consider it. I have reversed the order for exchange of materials because the jurisdictional issue is properly a responding issue that should be greater general concern to FSCO than it is to Pro-Demnity.

[8] For these reasons, order to go as follows:

(a) This application is adjourned to return before D.L. Corbett J. on a date on or after October 6, 2014, to be arranged with the civil motions office for an estimated two hours;

(b) The respondent shall deliver any further materials upon which it intends to rely on the issue of jurisdiction by August 31, 2014;

(c) The applicant shall deliver any materials upon which it intends to rely on the issue of jurisdiction by September 19, 2014;

(d) Brief supplementary factums addressing the issue of jurisdiction shall be delivered by the parties by September 30, 2014;

(e) All materials filed in accordance with this order shall be delivered to D.L. Corbett J. via Judges’ Administration at 361 University Avenue, excepting only that the motion shall be confirmed in the usual course with the motions office; and

(f) Counsel may vary this schedule on consent provided that this motion is returned no later than November 30, 2014. If either party wishes to vary this schedule either not on consent, or to provide for a return date after November 30, 2014, counsel shall arrange a brief teleconference with D.L. Corbett J.

D.L. CORBETT J.

DATE: July 30, 2014

[^1]: R.S.O. 1990, c. A.26, s.2(5)

[^2]: (1995). 1995 7129 (ON SC), 25 O.R. (3d) 690 (Gen. Div.), per Sharpe J. (as he then was), and Ontario Hydro v. Kelly, 1998 14678 (ON SC), 39 O.R. (3d) 107 (Gen. Div.), per Macpherson J. (as he then was) and Toronto (City) v. 1095909 Ontario Ltd., 2012 ONSC 1344, per McEwen J.

[^3]: Mahar, at p. 701