Court File and Parties

COURT FILE NO.: DC-08-00000589-00JR

DATE: December 5, 2008

SUPERIOR COURT OF JUSTICE - ONTARIO

(DIVISIONAL COURT)

RE: dale smith v. ONTARIO SECURITIES COMMISSION

BEFORE: Justice Ferrier

COUNSEL: Alister Crawley, for the Applicant

Anne Sonnen, Pamela Foy and Usman M.Sheikh, for the Respondent

HEARD AT TORONTO: December 5, 2008

E N D O R S E M E N T

Ferrier, J.

[1] The Applicants have launched an application for Judicial Review, seeking an order for prohibition against the Ontario Securities Commission (O.S.C.) on the basis of a loss of jurisdiction.

[2] A proceeding is pending before the O.S.C. under section 127 of the Securities Act RSO 190 C S-5 based on allegations that the applicants are responsible for multiple breaches of the Securities Act. The honesty and integrity of the applicants are squarely in issue in the O.S.C. proceeding.

[3] In that proceeding, the evidence was completed on November 17, 2008 and the matter is adjourned to December 8, 200 for argument.

[4] On November 23, 2008 in a CBC television interview the Chair of the O.S.C. expressed direct negative opinions about the honesty and integrity of the applicants in the context of the very proceedings pending before the O.S.C. The Chair is not a member of the three member panel hearing the proceeding.

[5] The applicants take the position that the statements made by the Chair, as detailed in the evidence filed in this court, would cause a reasonable person to conclude that the O.S.C. has prejudged the conduct of the applicants and that they will not receive a fair hearing before the O.S.C. On this basis they seek Judicial Review as above noted.

[6] They move in the pending application for a stay of the proceedings in the O.S.C. until the application for Judicial Review is determined by a panel of this court.

[7] The O.S.C. has brought a cross-motion, to quash the application for Judicial Review on the ground that it is premature. The O.S.C. also resists the stay sought by the applicants, on the same ground and on the basis of the test for an interim stay.

[8] Dealing first with the O.S.C.’s motion to quash, that motion is dismissed, for the following reasons.

[9] Quashing an application for Judicial Review on the basis of prematurity is a discretionary remedy. It is not appropriate for a single judge to deprive a Divisional Court panel of the exercise of its discretion by determining the issue of prematurity on a motion prior to the hearing of the application. Counsel were unable to provide this court with any case in which single judge has quashed an application for prematurity when the application is pending before a panel. (This is not a case of a single judge hearing the application on an urgent basis under section 6(2) of the Judicial Review Procedures Act).

[10] Concerning the motion by the applicants for a stay of the O.S.C. proceedings pending the hearing of the Judicial Review application, the motion is dismissed for the following reasons.

[11] There is ample authority in this court to the effect that absent exceptional or extraordinary circumstances demonstrating that the application must be heard, this court should only consider issues arising from a tribunal’s proceedings on a full record, including a decision by the tribunal on the very issue.

[12] Shortly put, proceedings below should be pursued to completion, including all remedies available below before this court should entertain an application. (See Ontario College of Art v. Ontario H.R.C., Coady v. Law Society of Upper Canada, Hamilton Street Rentway Cot v. Ontario H.R.C.)

[13] Even in cases of allegations of bias, this court has dismissed applications as premature. (See Lorenz v. Air Canada, Coady, Ontario College of Art, Gollogly v. O.S.C.)

[14] I now consider the test for an interim stay, assuming that the usual test applies.

(a) Serious issue to be tried. The issue is not a frivolous one. To be sure, the public statements of the Chair on their face quite understandably cause the applicants legitimate concern. Whether these events and that concern can ultimately form the basis of a prohibition order in this court remains to be seen. There is a serious issue to be resolved.

(b) Irreparable harm. It is argued that the damage to the reputation of the applicants will be irreparable should the O.S.C. proceeding continue to a conclusion, on the merits, against the applicants, even if the court overturns the result. I disagree. The issue of bias, if decided against the applicants below, can be fully and appropriately dealt with in this court.

(c) Balance of convenience. For the same reason that this court rejects premature applications, so should the court reject a motion for an interim stay, absent “exceptional or extraordinary circumstances demonstrating that the applicants must be heard” (Ontario College of Art).

[15] Accordingly the motion for an interim stay is dismissed.

[16] Costs fixed at $5,000.00 to be awarded by the panel in its discretion.

[17] Citations for the above noted cases are referenced in the factums of the parties.

Ferrier, J.

DATE: December 5, 2008