The Obligation to Respond to the Syndic
This column is based on actual cases brought before the Syndic’s Office. Its purpose is to help you reflect on the quality of your professional practice, specifically with respect to your ethical obligations.
In the wake of its investigation of a damage insurance representative, the Syndic’s Office asked the representative make a formal commitment to demonstrate that he had taken measures to correct the shortcomings observed in his professional practice. He was given 14 days to do so.
Despite two reminders, followed by two extensions of the deadline, the representative never made the formal commitment.
Noting that the representative had neither responded to nor complied with its requests, the Syndic’s Office invited him to a meeting, which he failed to attend.
Over a period of almost four months, the respondent received several reminders and postponements. Furthermore, almost one year later, as of the date the complaint was scheduled to be heard, the formal commitment had still not been made.
THE ALLEGED FACTS
It was clear that the respondent had repeatedly failed to comply with his professional obligations. He was alleged to have:
- failed to answer without delay any correspondence from the Syndic’s Office; and
- failed to attend a meeting called by the Syndic’s Office.
Both actions violated section 342 of the Act respecting the distribution of financial products and services:
No person may hinder the work of a person conducting an inquiry, in particular by misleading that person.
They were also in violation of sections 34, 34.1 and 35 of the Code of ethics of damage insurance representatives:
Section 34: A damage insurance representative must answer without delay any correspondence from the syndic, the co-syndic or an assistant to the syndic in the performance of the duties devolved upon them under the Act and the regulations thereunder.
Section 34.1: A damage insurance representative must, in particular, appear before the syndic, an assistant of the syndic or a member of their staff as soon as he is required to do so.
Article 35: A damage insurance representative must not, directly or indirectly, obstruct the work of the Authority, the Chamber, one of its committees, the syndic, the co-syndic, an assistant to the syndic of the Chamber or a member of their personnel.
THE DISCIPLINARY DECISIONS
Failing to attend the hearing on the formal complaint against him was yet another sign of the respondent’s indifference. He did, however, attend the hearing on the sanction2, at which time the Discipline Committee obliged him to make his formal commitment by a specific deadline. In doing so, the Committee avoided having to include in the ruling on the sanction an order to answer the requests from the Syndic’s Office.
Given that the respondent had clearly committed disciplinary offences related to interfering with the work of the Syndic’s Office of the ChAD, the Discipline Committee imposed the following sanctions:
- being temporarily struck off the roll for 30 days;
- a fine of $3,000;
- the publication of the decision in a newspaper in the respondent’s region; and
- the payment of disbursements and costs for publishing the notice of being temporarily struck off the roll.
CASE LAW: INTERFERENCE AND PROTECTING THE PUBLIC
There is extensive case law dealing with interference. Here are a few examples cited in the decision:
- The Supreme Court of Canada decision in Pharmascience v. Binet, 2006 S.C.C. 48, serves as a reminder to both professionals and third parties that they must cooperate with the syndic’s investigation or risk sanctions.
- An excerpt from the decision of the Discipline Committee of the ChAD:3
Failing to respond to members of the Oversight Committee or to the Syndic is an extremely serious offence and is always viewed as such by Discipline Committees. Essentially, the role of both the Oversight Department and the Syndic’s Department is to protect the public. Thus, refusing to respond to their requests within the specified deadline paralyses the operations of these departments and prevents them carrying out their role of protecting the public. [Unofficial translation]
In two other files heard by the Discipline Committee, the respondents’ counsel alleged that the Syndic’s Office had made odd requests in the course of its investigation and that the Office had gone on a “fishing expedition.” In these files, there is a sense that the respondents were attempting to dictate to the Syndic’s Office how it should conduct its investigations. In response, the Discipline Committee clarified the following point of law:
Any form of interference in the work of the Syndic causes such serious harm to the protection of the public that in 2008, the government saw fit to make this grounds for immediately temporarily striking the respondent off the roll. 4 [Unofficial translation]
Furthermore, in its conclusion, the Discipline Committee clarified the following points:
Lastly, it should be realized that when a professional announces that he intends to answer correspondence from the syndic, this is actually not an answer, but rather a disguised means of refusing or neglecting to answer.5 [Unofficial translation]
When the Syndic’s Office contacts a representative, it is because the Office is conducting an analysis or an investigation and seeking to reconstruct the facts surrounding a seemingly abnormal situation. The obligation to answer requests from the Syndic’s Office within the prescribed deadline is set out in the Code of Ethics and supported by extensive case law. Refusing to comply with this obligation may result in a formal complaint before the Discipline Committee of the ChAD.
1. Chambre de l’assurance de dommages v. Gignac, 2014 CanLII 41706 (QC CDCHAD).
2. Chambre de l’assurance de dommages v. Gignac, 2014 CanLII 76158 (QC CDCHAD).
3. Chambre de l’assurance de dommages v. Lambert, 2000 CanLII 21167 (QC CDCHAD).
4. Chambre de l’assurance de dommages v. Mayer, 2009 CanLII 73927 (QC CDCHAD).
By Jean-François Hamel, C.I.B., CRM, Syndic