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...