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
The appellant appealed to request further productions; the
receiver cross-appealed claiming it should not have to produce
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
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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