The Ontario Superior Court of Justice has ruled in favour of the Ontario Securities Commission (OSC) regarding a motion bought by Ben Cheng, a fund manager with Toronto-based Aston Hill Financial Inc.
In January, an OSC hearing panel dismissed a motion brought by Cheng, who is facing allegations of illegal insider tipping.
Cheng sought to exclude certain evidence from the OSC’s proceedings against him on the grounds of solicitor-client privilege.
“Cheng has not established on a balance of probabilities that he had a solicitor-client relationship with Mr. K. at the time of the relevant events,” the hearing panel ruled.
Cheng then sought a judicial review of the panel’s ruling, but the Ontario Superior Court of Justice upheld the hearing panel’s decision.
In its decision released on April 30, the court stated it does not have jurisdiction to hear an appeal of a procedural decision of a regulatory tribunal, and that it can only review final decisions of the panel in these sorts of proceedings.
The court also rejected the argument that it should intervene to prevent an unfair hearing from going ahead. It noted that the OSC panel rejected the claim of privilege after a lengthy hearing and gave detailed reasons for that decision.
“This is not the rare case where early intervention is warranted because there is a danger of manifest unfairness in the hearing,” the court said. “Indeed, if Mr. Cheng’s argument were accepted, it would open the way for numerous efforts to review evidentiary rulings rejecting a claim of solicitor and client privilege, with the resulting fragmentation and delay of the administrative proceeding that the doctrine of prematurity seeks to avoid.”
Cheng will be able to challenge the commission’s ruling “if he ultimately loses on the merits and chooses to appeal,” the court said.
“In sum, this is not one of the rare cases where a court should or would exercise its discretion to hear a premature application for judicial review, and the application for judicial review should be quashed,” the court said.
The allegations against Cheng in the regulatory proceeding have not been proven. The OSC’s hearing into the allegations, which was initially scheduled to take place in April, has been put off until September.