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Insurance - Licences. Ontario (Financial Services Regulatory Authority, Chief Executive Officer) v. Ahuj [misrepresentation in licence application]
In Ontario (Financial Services Regulatory Authority, Chief Executive Officer) v. Ahuja (Ont Div Ct, 2025) the Ontario Divisional Court dismissed an appeal brought by the CEO of the FSRA (the 'FSRA'), this after the FSRA issued "a Notice of Proposal (“NOP”) to refuse to renew insurance agent licences" and the FRSA, on appeal, "ordered that the licences be issued".
Here the court considers law on 'material mistatement' in a licence application:[2] This appeal by the FSRA is brought pursuant to s. 407.1(5) of the Insurance Act, R.S.O. 1990 c. I.8, which provides that a decision of the Tribunal can be appealed to the Divisional Court.
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THE LAW
[14] In the event an applicant makes a “material misstatement” on the application for a license, the FSRA has discretion as to whether or not to suspend or revoke a licence: O. Reg. 347/24, s. 8(b). A material misstatement does not automatically disentitle an applicant from being licensed.
[15] The Insurance Act provides at s. 407.1 that if the FSRA proposes to refuse to issue or renew a licence the applicant or licensee is entitled to request a hearing before the Tribunal. Subsections (4) and (5) then state:(4) The Tribunal may, by order, direct the Chief Executive Officer to carry out the proposal with or without changes or substitute its opinion for that of the Chief Executive Officer, and the Tribunal may impose such conditions as it considers appropriate in the circumstances.
(5) A party to a hearing held by the Tribunal may appeal the order of the Tribunal to the Divisional Court. [16] As this is a statutory appeal, appellate standards of review apply: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at para. 37. The standard of review is correctness for issues of law and palpable and overriding error for issues of fact and for issues of mixed fact and law where there is no extricable issue of law. If there is an extricable issue of law it may amount to an error of law which is reviewable on a correctness standard: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 8, 10, 19, 26-37.
[17] The determination of whether an individual is suitable to be licensed is an issue of mixed fact ant [sic] law. In Alves v. Superintendent of Financial Services (2009), 2009 CanLII 36993 (ON SCDC), 251 O.A.C. 276 (Div. Ct.) this court upheld a Tribunal decision to refuse a mortgage broker licence, stating at para. 8 that “[t]he real issue in this case is the manner in which the Tribunal applied the facts of the case to the law in reaching its conclusion.”
[18] The Tribunal has on several occasions found that licensees who provided false information on applications were nevertheless suitable to be licensed in all of the circumstances: see Edwards v. Ontario (Superintendent of Financial Services), 2009 ONFST 2; Vettese v. Ontario (Superintendent of Financial Services), 2016 ONFST 20; and Michalopoulos v. Ontario (CEO of FSRA), 2024 ONFST 3.
[19] In Prince v. Chief Executive Officer of the Financial Services Regulatory Authority, 2023 ONSC 2979 (Div. Ct.), this court upheld a decision of the Tribunal to revoke a mortgage agent’s licence stating, at para. 7:[7] Where a penalty imposed by a regulatory tribunal is reviewed on appeal, the reviewing court will consider whether the penalty was imposed with reference to the facts of the case and prior penalties imposed for similar infractions or in similar circumstances to consider whether the penalty imposed in the case before it was “clearly unfit” or a substantial departure from the cases before the tribunal. [Citations omitted.]
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