Last Call For Relevant Appeals From The OSC

To the extent it was ever really open, the door to relevant appeals from decisions of the Ontario Securities Commission ("OSC" or the "Commission") has inexorably been swinging closed. The presumption cultivated in the jurisprudence of the Supreme Court of Canada that the Commission engages its specialized expertise on all matters that come before it, has made an appeal an exercise in futility. The appellate courts in Ontario have made it clear that they are not enthusiastic about the prospect of reviewing, let alone overturning, a decision of the Commission on a matter within its presumed expertise. As the standard of a review on an appeal is now the deferential standard of "reasonableness" in practically all cases, it would take a disastrously bad decision for the courts to consider overturning a merits decision of the Commission. To date, the Commission has never been overturned on a merits decision.

One fleeting exception was the decision of the Divisional Court in Finkelstein et al. v Ontario Securities Commission,1 discussed further below, in which the Commission's finding of liability for insider trading was overturned against one of the respondents, Francis Cheng. The OSC appealed the decision and the Commission's finding of liability was restored. It was in this context that one last opening emerged to argue that decisions of the Commission on certain issues of law should be reviewed by a standard of "correctness" rather than "reasonableness". Shortly before the appeal was heard, a decision of the British Columbia Court of Appeal in Poonian v. British Columbia Securities Commission2 was released in which the Court held that the British Columbia Securities Commission's ("BCSC") interpretation of the "disgorgement" section of the B.C. Securities Act should be reviewed by a standard of correctness on the basis that the Act gave the same remedial power to the B.C. Supreme Court in an identically worded section. The B.C. Court of Appeal applied the decision of the Supreme Court of Canada in Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada,3 and held that it must be presumed that the Legislature would not have intended the courts and the Commission to interpret the section differently.

The Court of Appeal ruled that it was an error for the BCSC to order disgorgement against all the respondents on a joint and several basis, thereby requiring the Poonians to disgorge money that they had not received. Surprisingly, the BCSC did not seek leave to appeal to the SCC.

Back in Ontario, Cheng and co-respondent Miller sought leave to make supplementary submissions on the standard of review based on the decision of the B.C. Court of Appeal. After granting leave to hear submissions on the point, the Ontario Court of Appeal thought better of it and declined to rule on the issue, leaving it for "another day". Leave to appeal to the Supreme Court of Canada has been sought by Cheng and Miller on the issue of the standard of review.

In light of the decision of the B.C. Court of Appeal in Poonian, which reintroduces in B.C. a correctness standard of review for issues of law in which the courts exercise a concurrent jurisdiction, there is a possibility that the Supreme Court will adjudicate this issue on appeal from Ontario.

What are the Prospects for a Correctness Standard on Appeal?

Probably not good. Since the decision of the Supreme Court of Canada in Dunsmuir v. New Brunswick,4 the trend line in Supreme Court decisions has been one directional in favour of letting the provincial securities commissions interpret their governing securities legislation as they see fit. Indeed, in McLean v. BCSC,5 the Court expressed irritation that it has become "fashionable" for defence counsel to try to have the decisions of administrative tribunals on questions of law reviewed on appeal by a standard of correctness (can they not just get with the program?). The Supreme Court has reiterated that, the "modern approach to judicial review" recognizes that courts "may not be as well qualified as a given agency to provide interpretations of that agency's constitutive statute that make sense given the broad policy context within which that agency must work".6

The exception to an assumption of greater expertise on the part of the administrative tribunal to interpret its "home" statute, alluded to so tantalizingly in Dunsmuir, is with respect to a true jurisdictional issue or more broadly, to "general questions of law that are both of central importance to the legal system as a whole and outside of the adjudicator's specialized area of expertise". The "wave" of appeals7 in which appellants have (annoyingly) suggested that their issue of law is such an issue, has not yet revealed any. The Supreme Court's goal of introducing "predictability and clarity" into judicial review is steadily erasing the Dunsmuir exception to one of mere legend.

This leaves the issue of where the legislature has given the courts a concurrent jurisdiction to interpret and apply statutory provisions in the tribunal's "home" statute. Even the Supreme Court has recognised that it is a bit of a stretch to infer that the legislature intended the interpretation of an administrative tribunal to prevail over that of the courts when it has given the same jurisdiction to the courts. Plus, there is the prospect of inconsistent decisions by the tribunal and the courts.

This was the basis for the decision of the Supreme Court in Rogers, which arose in...