Deloitte & Touche LLP v. Ontario Securities Commission

• Jurisdiction: Federal Jurisdiction (Canada)
• Court: Supreme Court (Canada)
• Judge: McLachlin, C.J.C., Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps, JJ.
• Citation: (2003), 179 O.A.C. 1 (SCC),2003 SCC 61
• Date: 10 June 2003

Deloitte & Touche v. Securities Comm. (2003), 179 O.A.C. 1 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2003] O.A.C. TBEd. OC.108

Deloitte & Touche LLP (appellant) v. Ontario Securities Commission (respondent) and Attorney General of Ontario and Executive Director of the British Columbia Securities Commission (interveners)

(29300; 2003 SCC 61; 2003 CSC 61)

Indexed As: Deloitte & Touche LLP v. Ontario Securities Commission

Supreme Court of Canada

McLachlin, C.J.C., Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps, JJ.

October 31, 2003.

Summary:

The Ontario Securities Commission's in­ves­ti­gative staff (the staff) commenced an investigation into a public offering made by Philip Services Corp. (Philip). The staff expanded the inquiry to include the conduct of Philip's auditors (Deloitte). The staff compelled Deloitte to produce documents and six of its partners to attend examination under oath (the compelled material). The staff commenced proceedings under s. 127 of the Ontario Securities Act against Philip and several of its officers (the Philip respon­dents). No proceedings were commenced against Deloitte. The staff determined that all of the compelled material was relevant to the s. 127 proceedings and had to be disclosed to the Philip respondents (Rule of Practice 3.3(2)). The staff obtained an order from the Commission under s. 17(1) authorizing dis­closure of the material. Deloitte appealed.

The Ontario Divisional Court, E. Mac­Donald, J., dissenting in part, allowed the appeal and set aside the Com­mission's order without prejudice to the staff to re-apply for an order under s. 17(1)(b) on a proper evi­den­tiary basis. The Commission appealed.

The Ontario Court of Appeal, in a decision reported at 159 O.A.C. 257, allowed the appeal, set aside the Divisional Court's order and restored the Commission's order. De­loitte appealed.

The Supreme Court of Canada dismissed the appeal.

Administrative Law - Topic 6201

Judicial review - Statutory appeal - Scope or standard of review - Section 13 of the Ontario Securities Act authorized a person con­duct­ing an investigation or examination under s. 11 or 12 to compel testimony and pro­duction of material - Section 17(1) author­ized disclosure of the compelled material if disclosure was "in the public interest" - The Ontario Court of Appeal stated that the Ontario Securities Commi­ssion's task on a s. 17(1) application had two stages - First, the Commission had to give meaning to "public interest" - In doing so, it had to identify relevant factors and describe the analytical framework within which those factors could be weighed - Second, the Commission had to apply that framework to the specific cir­cumstances - The import­ance of the Com­mission's expertise at both stages strongly suggested a deferential approach on an appeal - A statutory right of appeal and the absence of a privative clause suggested less deference - The reasonableness stan­dard of review accom­modated both of those factors - The Supreme Court of Canada affirmed that the appropriate stan­dard of review was reason­ableness - See paragraph 22.

Administrative Law - Topic 9122

Boards and tribunals - Administrative ap­peals - Scope of appeal or standard of re­view - [See Administrative Law - Topic 6201 ].

Securities Regulation - Topic 1242

Regulatory commissions - Powers or juris­diction - Public interest - The Ontario Securities Commission commenced an in­ves­­ti­­gation into a public offering by Philip Services Corp. (Philip) - The inquiry ex­panded to include the conduct of Philip's auditors (Deloitte) - The investiga­tive staff compelled Deloitte to produce documents and six partners to attend for examination (the compelled material) - The staff com­menced proceedings against Philip and sev­eral officers (Securities Act, s. 127) - The staff determined that the compelled mater­ial was "relevant" to the s. 127 pro­ceedings and had to be disclosed to the Philip re­spondents (Ontario Securities Commission Rule of Practice 3.3(2)) - The staff sought authorization for disclosure under s. 17(1) - The Commission weighed the extent to which the Act's policies were served by the purpose of disclosure against the harm that disclosure would cause to individual interests - The Commission, using a global approach, concluded that the compelled ma­terial met the relevance standard in R. v. Stinchcombe (S.C.C.) and the "public interest" favoured disclosure - The Su­preme Court of Canada held that the deci­sion was reasonable - The court stated that if Deloitte had established that there was not a reasonable possibility that a particu­lar document was relevant, it would have been improper for the Com­mission to have ordered disclosure - The Commis­sion's or­der properly balanced Deloitte's privacy interests against Philip's disclosure inter­ests and the Commission's obligation to con­duct hearings fairly and properly by restricting the disclosure to that which was necessary to pursue its mandate.

Securities Regulation - Topic 1253

Regulatory commissions - Powers or juris­diction - Respecting disclosure of informa­tion - [See Securities Regulation - Topic 1242 ].

Securities Regulation - Topic 1386

Regulatory commissions - Statutory appeal to courts or judicial review - Scope of appeal or standard of review - [See Ad­min­istrative Law - Topic 6201 ].

Cases Noticed:

Biscotti, Costantini and Orton v. Ontario Securities Commission (1991), 45 O.A.C. 293; 1 O.R.(3d) 409 (C.A.), refd to. [para. 14].

R. v. Stinchcombe, [1991] 3 S.C.R. 326; 130 N.R. 277; 120 A.R. 161; 8 W.A.C. 161, refd to. [para. 15].

Dr. Q., Re, [2003] 1 S.C.R. 226; 302 N.R. 34; 179 B.C.A.C. 170; 295 W.A.C. 170, refd to. [para. 22].

Ryan v. Law Society of New Brunswick, [2003] 1 S.C.R. 247; 302 N.R. 1; 257 N.B.R.(2d) 207; 674 A.P.R. 207, refd to. [para. 22].

Statutes Noticed:

Securities Act, R.S.O. 1990, c. S-5, sect. 17(1) [Annex].

Counsel:

J.L. McDougall, Q.C., Norman J. Emblem and Randall S. Bennett, for the appellant;

Hugh Corbett and Karen Manarin, for the respondent;

Sara Blake and Richard Coutinho, for the intervener, Attorney General of Ontario;

James A. Angus and Kristine M. Mactag­gart, for the intervener, Executive Direc­tor of the British Columbia Securities Commission.

Solicitors of Record:

Fraser Milner Casgrain, Toronto, Ontario, for the appellant;

Ontario Securities Commission, Toronto, Ontario, for the respondent;

Ministry of the Attorney General for Ontario, Toronto, Ontario, for the intervener, Attorney General of Ontario;

British Columbia Securities Commission, Vancouver, British Columbia, for thein­tervener, Executive Director of the British Columbia Securities Commission.

This appeal was heard on June 10, 2003, by McLachlin, C.J.C., Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour, LeBel and Deschamps, JJ., of the Supreme Court of Canada. Iacobucci, J., delivered the follow­ing judgment in both official languages for the court on October 31, 2003.