In SA Capital Growth Corp. v. Mander Estate, 2012 ONCA 681 the Court of Appeal for Ontario held that requests for third-party document production in relation to Ontario Securities Commission ("OSC") proceedings should be determined by the OSC, and not the courts.
An alleged Ponzi scheme triggered regulatory proceeding before the OSC and a civil proceeding with a court-appointed receiver. Each of the OSC and the receiver were investigating the appellant, Peter Sbaraglia, in relation to this Ponzi scheme.
The appellant brought a motion before an OSC commissioner requesting third-party production from the receiver to aid in his defence. The OSC commissioner ruled that the OSC lacked the authority to order such production. The appellant did not challenge this ruling and sought third-party productions from the Ontario Superior Court of Justice (which had appointed the receiver).
Justice Pattillo of the Superior Court ordered that the receiver produce some, but not all, of the documents sought by the appellant. The judge applied by analogy the procedure used in R. v. O'Connor, 1995 CanLII 51 (S.C.C.) with respect to obtaining third-party records in criminal matters.
The appellant appealed to request further productions; the receiver cross-appealed claiming it should not have to produce anything.
The Court of Appeal overruled Pattillo J.'s decision to require some productions from the receiver on jurisdictional grounds. Third-party production matters in a regulatory proceeding should be dealt with by the relevant tribunal. In this case, the OSC was best placed to weigh the issues such as relevance, cost, delay and fairness. The Superior Court should not ordinarily grant what would amount to interlocutory procedural orders in relation to regulatory matters.
This case is another example of the deference afforded to the OSC before conclusion of a regulatory proceeding. There is a long line of cases, including the Supreme Court of Canada's decision in Deloitte & Touche LLP v. Ontario (Securities Commission), 2003 SCC 61, that affirm the OSC's ability to disclose compelled documents to respondents before it. Persons seeking productions from third parties to assist in their defence at the OSC should ensure that they exhaust the OSC's internal processes before seeking a remedy in the Superior Court. Here, the OSC has the power under the OSC's Rules of Procedure to issue a summons under s. 12 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 requiring a third party to produce "documents and things specified by the tribunal."
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