Capital Markets Tribunal
Citation: Miller Bernstein LLP (Re), 2023 ONCMT 18 Date: 2023-05-10 File No. 2023-2
IN THE MATTER OF MILLER BERNSTEIN LLP
REASONS FOR DECISION (Rule 17 of the Capital Markets Tribunal Rules of Procedure and Forms)
Adjudicators: James Douglas (chair of the panel) Timothy Moseley
Hearing: By videoconference, March 10, 2023
Appearances: Sarah McLeod For Staff of the Ontario Securities Commission
Robert Staley Nathan Shaheed For Miller Bernstein LLP
REASONS FOR DECISION
1. OVERVIEW
1Miller Bernstein LLP applied under Rule 17 of the Capital Markets Tribunal Rules of Procedure and Forms (the Rules of Procedure) for relief from the common law "implied undertaking rule" in respect of certain interview transcripts and materials that Staff of the Ontario Securities Commission (Staff) received on a voluntary basis and disclosed to Miller Bernstein during an investigation. We explain the implied undertaking rule below; broadly speaking, it is an implicit promise to a court or tribunal by the parties to a proceeding not to make collateral use of material disclosed in the proceeding without leave of the adjudicative body.
2Miller Bernstein and Staff both asked that this application for relief from the rule, and any materials filed in connection with it, be kept confidential.
3The Tribunal convened a hearing with the parties to decide the issue of confidentiality and address other procedural matters. At the hearing on March 10, 2023, we denied the parties' request for confidentiality, for reasons to follow.1 These are our reasons for that decision.
4Hearings before the Capital Markets Tribunal are to take place in public unless a panel orders otherwise. Under Rule 22(2) of the Rules of Procedure a panel may order that all or part of a hearing take place in the absence of the public where matters involving public security or intimate financial or personal matters may be disclosed, or where a confidential hearing is required by law.
5The parties failed to demonstrate that any of the Rule 22(2) criteria were met on this application. Neither are we convinced that the implied undertaking rule necessitates a confidential hearing in these circumstances.
2. ANALYSIS
2.1 Does the Application Meet the Criteria for a Confidential Hearing?
6There is a presumption that hearings will be open to the public.2 Confidentiality orders are therefore not to be made lightly.
7Miller Bernstein filed no evidence in support of an order under Rule 22(2) and conceded in oral argument that this application does not fit neatly into any of the rule's criteria. Miller Bernstein advised the Panel that it sought confidentiality for its application out of an abundance of caution due to similarities with an application for authorization to disclose under s. 17 of the Securities Act (the Act)3. Section 17 applications are typically held in the absence of the public due to the confidential nature of Part VI investigations and the disclosure restrictions in s. 16 of the Act.
8Without citing any authority directly on point, Miller Bernstein argued that the same principles that require s. 17 applications to be confidential may apply to its application for relief from the implied undertaking rule. Miller Bernstein expressed a concern that simply bringing the application without a confidentiality order might be seen to violate the rule from which it seeks relief or otherwise make the application unnecessary. However, in the end, Miller Bernstein conceded that seeking a confidentiality order in this application was more a matter of prudence, based on observation of past practice in other cases, rather than preference.
9Staff supported Miller Bernstein's request for a confidentiality order but similarly filed no evidence to demonstrate that one or more of the criteria under Rule 22(2) was satisfied in the circumstances. Staff submitted that we should follow the s. 17 application precedents even though s. 17 is not engaged in this application, and even though Staff were unable to cite any authority directly on point. Staff argued that the language of Rule 22(2)(b) was broad enough to give the panel the discretion to order confidentiality in