Paul Azeff v. Ontario Securities Commission 2014 ONSC 5365
CITATION: Paul Azeff v. Ontario Securities Commission 2014 ONSC 5365
DIVISIONAL COURT FILE NO.: 374/14
DATE: 20140916
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SACHS, NORDHEIMER & MACKINNON JJ.
BETWEEN:
Paul Azeff and Korin Bobrow
Applicants
– and –
ONTARIO SECURITIES COMMISSION
Respondent
C. Bredt & T. Hodgson, for the applicants
M. Britton & C. Devlin, for the respondent
G. Capern, for Mitchell Finkelstein
S. Bieber, for Howard Miller
HEARD at Toronto: September 12, 2014
REASONS FOR JUDGMENT
NORDHEIMER J.:
[1] The applicants bring this application, on an urgent basis, for judicial review of the decision of the Ontario Securities Commission dated July 31, 2014 in which the Commission denied a request by the applicants for an adjournment of a hearing involving allegations of insider tipping and trading involving the applicants along with Messrs. Finkelstein and Miller. The hearing is now scheduled to commence on September 29, 2014. At the conclusion of the argument, we dismissed the application with reasons to follow. Given the time constraints in this matter, we undertook to provide our reasons as quickly as possible and certainly within the next week. Those reasons now follow, albeit in a more succinct fashion than might otherwise be the case if those time constraints were not present.
[2] The applicants’ request for an adjournment was based on three events. First and foremost was the fact that the applicants’ expert had lost all of her work product through a computer error. While efforts had been made to reproduce the lost material, the evidence of the expert was that it would take her another six to nine months to reproduce all of the lost work product. Second was the fact that Commission staff had recently further amended the statement of allegations against the applicants and the others. Third was the fact that a third party had not fully complied with a production order made by the Commission.
[3] The first issue that fell to be considered was whether this judicial review application should be dismissed because it is premature. As a general rule, this court will not entertain reviews of procedural decisions of an administrative tribunal prior to the final determination of the proceeding before it. This is a long-standing practice, as was recently observed by Dambrot J. in Minty v. Lucas, [2014] O.J. No. 2579 (Div. Ct.) at para. 18:
This Court has consistently held that save in extraordinary circumstances, applications for judicial review of the decisions of administrative tribunals should not be brought until the completion of the tribunals’ proceedings. The Court has consistently followed a well-established line of authority against a piecemeal approach to the judicial review of administrative action. In the absence of exceptional circumstances, it is preferable to allow administrative proceedings to run their full course before a tribunal and to consider the legal issues arising from the proceeding, including procedural matters, against the backdrop of a full record and a reasoned decision of the tribunal [citations omitted].
[4] This general rule is designed to avoid the fragmentation of proceedings that increases the delay in having matters finally determined as well as increasing the costs of doing so: Haigh v. College of Denturists (Ontario), [2011] O.J. No. 1851 (Div. Ct.).
[5] This general rule is not without exceptions, however. As was observed in Ontario (Liquor Control Board) v. Lifford Wine Agencies (2005), 76 O.R. (3d) 401 (C.A.) by Cronk J.A. at para. 43:
This general rule, however, is not absolute and should not be applied rigidly if there is a prospect of real unfairness through, for example, the denial of natural justice. In these circumstances, which will arise infrequently, the courts will intervene before completion of an administrative hearing and prior to the exhaustion of all alternative remedies. [citation omitted]
[6] As is evident from a review of the prevailing authorities, not every decision of a Tribunal regarding the procedure that it will follow generally, and in particular whether to grant an adjournment, amounts to a denial of natural justice. As was noted in Lifford, even rulings rejecting relevant evidence do not automatically amount to a breach of natural justice.
[7] In my view, to rise to the level where a procedural ruling constitutes a breach of natural justice, and thus justify the intervention of this court, the ruling must go to the very core of the proceeding such that, to allow the ruling to stand, would visit a real unfairness on a party by depriving that party of a full and complete opportunity to effectively participate in the proceeding. The ruling must, in effect, so taint the proceeding that, if the hearing was allowed to continue, the result of a later judicial review would be preordained.
[8] The Commission considered all of the issues raised by the adjournment application. It also took the unusual step of hearing from the applicants’ expert in an in camera hearing so that the expert could further explain the impact on her ability to fulfill her role that arose both from the loss of her work product and the changed allegations being advanced by the Commission staff. The Commission considered all of that evidence. The Commission also considered the delay that had already occurred in this case. The proceeding itself dates back to 2010 and the events involved go as far back as 2004. Of some importance to the Commission, in reaching its decision, was the fact that the applicants’ expert is not herself going to be a witness. Rather, her mandate is to provide assistance to the applicants’ counsel in terms of understanding the documentation and cross-examining the various witnesses.
[9] The applicants complain that the Commission refused their request for an adjournment on the basis of three “key findings” that the applicants assert are not borne out by the evidence and are unreasonable. Central among these findings was the Commission’s conclusion that the applicants’ expert could be prepared to undertake her role by the time of the hearing. The applicants say that this finding is contrary to the evidence because the applicants’ expert said that she could not be prepared.
[10] The applicants’ submission on this point is, in my view, faulty. It is well-settled that a trier of fact is not obliged to accept a witness’ evidence just because it is not contradicted by other evidence. The trier of fact is entitled to reach its own conclusion. Courts and tribunals are frequently faced with positions taken by counsel and parties, especially on adjournment applications, as to their state of preparedness. They are not obliged to accept what they are told by counsel or a party on such an issue. A court or a tribunal must make its own determination as to what the state of affairs is, or should be, and to proceed accordingly. In this case, the Commission, after hearing from the expert herself, concluded that the applicants’ expert would be sufficiently prepared to perform her role by the time of the hearing. That is a conclusion that was reasonably open to the Commission to reach on the evidence. In particular, it was open to the Commission to conclude that while, because of these unusual events, the expert might not be as prepared as she might otherwise be, or like to be, the expert would nonetheless be adequately prepared such that she would be able to perform her function.
[11] With those facts in mind, I conclude that this application is premature. The applicants have failed to establish that the Commission’s refusal to grant an adjournment of the hearing, in these circumstances, was so manifestly unfair as to amount to a breach of natural justice. Whether the refusal of the adjournment has unfairly compromised the applicants’ ability to respond to these accusations can only be properly evaluated once the hearing has been held, the witnesses heard and a decision reached. We note that the Commission is alert to the applicants’ concerns and has indicated that it will be quick to assist counsel in this regard. By way of example, if problems arise, the Commission could, in its discretion, postpone cross-examination of the lead investigator (who is to be the first witness and whose role we understand is to lay out the Staff’s essential allegations), it could order the recalling of witnesses and it could, ultimately, still afford any adjournment of the hearing that it deems necessary at any point. The simple reality is that, until the proceeding is completed, there is no basis to conclude either that the applicants’ concerns will actually materialize or that their impact will be as fundamental as the applicants contend.
[12] It is for these reasons that the application for judicial review was dismissed. The respondent is entitled to its costs of this application fixed in the amount of $5,000 inclusive of
disbursements and HST payable by the applicants within thirty days.
NORDHEIMER J.
SACHS J.
MACKINNON J.
Date of Release:
CITATION: Paul Azeff v. Ontario Securities Commission 2014 ONSC 5365
DIVISIONAL COURT FILE NO.: 374/14
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SACHS, NORDHEIMER & MACKINNON JJ.
BETWEEN:
Paul Azeff and Korin Bobrow
Applicants
– and –
ONTARIO SECURITIES COMMISSION
Respondent
REASONS FOR JUDGMENT
NORDHEIMER J.
Date of Release: