Ontario Divisional Court Applies Vavilov To Appeals From Ontario Securities Commission

• Published date: 08 October 2020
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Securities
• Law Firm: Bennett Jones LLP
• Author: Mr Alan Gardner, Jonathan G. Bell and Douglas Fenton

The Ontario Securities Commission (OSC) has traditionally been regarded by the Ontario Divisional Court¹ as a specialized administrative tribunal entitled to significant deference on appeal and judicial review proceedings. On this deferential approach, the Divisional Court would review decisions of the OSC on a "reasonableness" standard of review-the Court would follow the Dunsmuir approach and defer to the OSC provided that the decision fell within a range of reasonable outcomes. As a practical matter, this meant that it was very difficult to successfully challenge a decision of the OSC on substantive legal grounds.

But the Divisional Court's recent decision in Quadrexx Hedge Capital Management Ltd. v. OSC, 2020 ONSC 4392, has clarified that statutory appeals from the OSC will no longer automatically be reviewed on a deferential standard of review. Applying the framework articulated in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (the Supreme Court of Canada's recent, seminal decision on administrative law), the Divisional Court held that statutory appeals from decisions of the OSC will now be reviewed on appellate standards of review. On this approach, questions of law will attract a "correctness" standard of review; and questions of fact or mixed fact and law will attract a "palpable and overriding error" standard of review. In the final analysis, the Divisional Court's decision following the Vavilov standard signals not only a likely material increase in the prospects of a successful appeal on questions of law, but also a potential increase in the number of appeals from decisions of the OSC.

The Traditional Approach

Prior to the Supreme Court's decision in Vavilov, the governing approach to determining the standard of review in respect of administrative decision-making was the approach articulated in Dunsmuir v. New Brunswick, 2008 SCC 9. The Dunsmuir approach applied to both judicial review and statutory appeals from administrative decision-makers.

The Dunsmuir framework articulated certain categories of administrative decisions that would attract a "reasonableness" standard of review, and a much more limited group of categories that would attract a "correctness" standard of review. For example, a "reasonableness" standard of review would presumptively apply where the administrative decision-maker was interpreting or applying a provision of its "home statute" or a statute closely linked to the tribunal's functions. Where...