DATE OF HANDWRITTEN ENDORSEMENT: 20180202
SUPERIOR COURT OF JUSTICE – ONTARIO
(COMMERCIAL LIST)
RE: Autorité des marchés financiers (“AMF”), Applicant
AND:
David Baazov, Yoel Altman, Benjamin Ahdoot, Diocles Capital Inc., 2374879 Ontario Inc. and Sababa Consulting Inc., Respondents
BEFORE: Conway J.
COUNSEL: Christina Galbraith and Magdalini Vassilikos, for the Applicant
Rohit R. Kumar, for Errol Gordon, proposed witness
Stéphanie Lapierre and Nathalie Nouvet, for Yoel Altman, Diocles Capital Inc., 2374879 Ontario Inc. and Sababa Consulting Inc., Respondents
Caroline Larouche, for David Baazov, Respondent
Alexandre Mireault, for Benjamin Ahdoot, Respondent
HEARD: January 12, 2018 and February 2, 2018
reasons for decision (handwritten endorsement delivered in court)
1The AMF is prosecuting the Respondents for alleged securities violations in a trial before the provincial court of Quebec, commencing in February 2018. In that regard, the AMF has obtained from that court a summons to various witnesses (the “Summons”) in Ontario to testify at the trial, by way of video-link, from the offices of the Ontario Securities Commission in Toronto. The AMF emphasizes the need for all relevant evidence to be brought before a court as part of its truth-seeking function and further argues that the existence of provincial boundaries should not stand in the way of the search for truth at the trial.
2The AMF originally came before this court to recognize the Quebec Summons under s. 152(4) of the Ontario Securities Act, R.S.O. 1990, c. S.5 (“OSA”) or alternatively pursuant to s. 2 of the Interprovincial Summonses Act, R.S.O. 1990, c. I.12, as amended (the “ISA”). The AMF has, with this court’s permission, made additional submissions that the Summons can be recognized in Ontario on the basis of the court’s inherent jurisdiction and the principle of comity. The Respondents and Mr. Gordon, one of the proposed witnesses, oppose the recognition of the Summons.
3I will deal with each of these grounds in turn.
I. Section 152(4) of the OSA
I. Section 152(4) of the OSA
4This section was introduced as a reciprocal provision to enable an Ontario court to facilitate the obtaining of Ontario witness testimony for use “at a proceeding before the securities commission or other body”. The AMF argues that the Quebec provincial court is a “body empowered by statute to administer or regulate trading in securities or derivatives” for purposes of that section. I disagree. I need go no further than the language of s. 152(4):
The section clearly uses the word “court” when it wants to refer to a judicial entity.
There is no basis to read “court” and “body empowered by statute to administer or regulate trading in securities or derivatives” as being the same.
If the legislature had wanted this section to apply to obtaining witness evidence for use at a proceeding before a securities commission or a court, it could have said so.
In the context of the section as a whole, I read it as applying to obtaining witness evidence for use before a proceeding before a securities commission or other equivalent administrative tribunal, not for a court proceeding.
II. The ISA
II. The ISA
5There is no basis on which the Summons can be recognized under the ISA. Section 2 states when a summons shall be recognized. However, section 3 is prohibitive and clear. It states that a court “shall not receive a summons from another province under section 2 unless the law of that other province has a provision similar to section 6 providing absolute immunity…” It is undisputed that Quebec does not have such a law. The inquiry stops there. There is no need, nor is this court entitled to, analyze whether immunity is required in this case, whether testifying by video-conference obviates the need for immunity, etc. In effect, the AMF is asking this court to read in an exception to section 3 where an Ontario witness testifies by video-conference. Our legislature has not created an exception to that effect and it is not the role of this court to do so. I should add that the Quebec bar has brought to the attention of the Quebec legislators the difficulties arising from the lack of an immunity section in Quebec law and the Quebec legislators have not introduced such a law as yet. It is not the role of this court to provide a solution to those issues.
III. Inherent Jurisdiction/Comity
III. Inherent Jurisdiction/Comity
6The AMF argues that even if the statutory provisions do not apply, this court has inherent jurisdiction to recognize the Summons on the basis of pre-Confederation laws that enable the court to issue subpoenas to witnesses in any part of Canada, pursuant to its powers to aid and assist inferior courts, and pursuant to the principle of comity that permits recognition of judgments of foreign courts. I am not persuaded that in light of the statutory regime developed in the provinces for recognition of subpoenas issued in other provinces, the inherent jurisdiction exists. I note the observation of the New Brunswick Court of Appeal in Quebec (Fédération des producteurs acéricoles) v. Caisse populaire de Restigouche Ltée, 2013 NBCA 61, paras. 31-33, that the goal of the ISA was “to establish a comprehensive code of general application in connection with all applications for the adoption of a “subpoena” from another province.”
7However, even if such inherent jurisdiction does exist, I would not be prepared to exercise it to overcome the requirement of an immunity law that our statute clearly requires. As stated in R. v. Caron, 2011 SCC 5, paras. 30 and 32, broad inherent jurisdiction is to be “exercised sparingly and with caution”, and is not to be exercised in matters regulated by statute if it would result in the contravention of a statutory provision. In this case, exercising inherent jurisdiction (if it exists) to order an Ontario witness to give evidence in a Quebec court proceeding, without the legal protection of immunity required by the ISA, would completely undermine that statutory protection afforded to Ontarians by our legislature.
8There may be other means for the AMF to obtain the evidence of the Ontario witnesses – for example, through the Rules of Civil Procedure. Nothing in these Reasons shall be read as entitling the AMF to those other means nor shall they be read as precluding the AMF from pursuing them.
9The Application is dismissed. No costs are sought, none are ordered.
Conway J.
Date of Handwritten Endorsement: February 2, 2018
Date of Release: February 7, 2018