Canada: Divisional Court Confirms That Interlocutory OSC Orders Not Eligible For Appeal, Judicial Review

In the recent decision of Cheng v Ontario Securities Commission, 2018 ONSC 2502, the Divisional Court held that an interlocutory order of the OSC was not subject to challenge through an appeal or judicial review.

Background

The OSC commenced enforcement proceedings against Benedict Cheng in April 2017 on allegations of insider tipping. Cheng brought a preliminary motion seeking a stay of the proceeding or alternatively to exclude certain evidence during the hearing on the grounds of solicitor and client privilege.

OSC staff was in possession of the evidence of Mr. K, a lawyer. Cheng alleged that he and Mr. K had been in a lawyer-client relationship such that documents authored by Mr. K were subject to solicitor and client privilege. After a five-day hearing, the OSC dismissed the motion, finding that there was no lawyer-client relationship, and thus no privilege.

Cheng appealed that decision; when advised by OSC staff that he could not appeal an interlocutory order, Cheng commenced a judicial review on the same grounds. The OSC moved to quash the appeal and judicial review.

Appeal dismissed as not being of a final decision

Appeals of OSC decisions are prescribed by s. 9(1) of the Securities Act :

9 (1) A person or company directly affected by a final decision of the Commission, other than a decision under section 74, may appeal to the Divisional Court within thirty days after the later of the making of the final decision or the issuing of the reasons for the final decision.

Cheng argued that, because the motion decision determined his substantive rights, it was a final decision. He relied on jurisprudence in the context of cases determining the appropriate route of appeal, which often turn on whether a decision is final or interlocutory, and a ruling from the Court of Appeal for Ontario in which it was held that an order depriving a party of a substantive right that could be determinative of the action is a final order.

The Divisional Court disagreed with this approach, relying on prior rulings in which the distinction between final and interlocutory orders from civil courts was not applied to administrative proceedings. Motivated by policy reasons, the Court reiterated its reasons from Law Society of Upper Canada v Piersanti 2018 ONSC 640 in observing that "the hearing process would soon grind to a halt if mid-hearing rulings were generally subject to immediate appeal."¹ The Court also declined Cheng's argument that there should be a special carve-out to this principle for determination of a solicitor-client privilege issue.

For these reasons, the appeal was quashed for want of jurisdiction.

Judicial review quashed as premature and not giving rise to exceptional circumstances

Cheng's judicial review application was also quashed on largely policy grounds.

The Court held that the facts of the case were not so rare that early intervention was required for risk of manifest unfairness to the proceedings. This view appears to have been informed by an interest in expeditious administrative proceedings: "[i]ndeed, if Mr. Cheng's argument were accepted, it would open the way for numerous efforts to review evidentiary rulings rejecting a claim of solicitor and client privilege, with the resulting fragmentation and delay of administrative proceeding that the doctrine of prematurity seeks to avoid".²

The Court declined to exercise its discretion to hear a premature application for judicial review.

This ruling confirms the Court's intention to allow administrative tribunals to resolve cases expeditiously and finally before their decisions come under judicial scrutiny. Tribunal litigants faced with adverse decisions on a preliminary issue should be advised that Courts will likely prefer to have the tribunal process run its course before considering intervention.

The author would like to thank Shirley Wong, Student-At-Law, for her contribution to this article.

Footnotes

[1] Cheng at para 13, citing Piersanti at para 17 and Law Society of Upper Canada v. Paul Alexander Robson, 2013 ONLSAP 0003 at para 31.

[2] Cheng at para 30.

About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.

Law around the world
nortonrosefulbright.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.