E. J. Gunn NOVA SCOTIA COURT OF APPEAL Citation: Potter v. Nova Scotia Securities Commission, 45 Date: 20060419 Docket: CA 256947 Registry: Halifax Between: The Nova Scotia Securities Commission v. Daniel Potter Respondent Judges: Bateman, Cromwell and Saunders, JJ.A. Appeal Heard: March 24, 2006, in Halifax, Nova Scotia Held: Leave to appeal is granted and the appeal is allowed; application for fresh evidence is dismissed per reasons for judgment of Cromwell, J.A.; Bateman and Saunders, JJ.A. concurring. Counsel: Agnes MacNeil, for the Appellant Respondent in person Edward Gores, Q.C., for the Attorney General of Nova Scotia Reasons for judgment: I. INTRODUCTION: [1] At the root of this appeal is the question of how much “elbow room” the courts should give the Securities Commission to carry out its regulatory duties. In my view, the short answer in this case is quite lot. [2] The Commission ordered an investigation of the trading in the securities of Knowledge House Inc., a company of which Mr. Potter is President, CEO and Chair of the Board. Mr. Potter applied to the Supreme Court of Nova Scotia for certiorari to quash that investigation. number of procedural issues arose. They became the subject of two interlocutory applications one by Mr. Potter and the other by the Commission before Richard, J. in Supreme Court chambers. His order gave rise to this appeal by the Commission. [3] Mr. Potter’s interlocutory application before the chambers judge asked for orders requiring the Commission to file complete return as required by Civil Procedure Rule 56.08, staying proceedings pending the judicial review application and returning to him the contents of his email documents which had been obtained by the Commission. In effect, Mr. Potter said the return should contain the fruits of the investigation which the Commission had ordered and that he should have access to virtually everything the investigators had obtained. The Commission’s interlocutory application requested orders setting aside notice of examination issued by Mr. Potter to one of the investigators, striking out one of Mr. Potter’s affidavits and striking out amendments to his originating notice. [4] The chambers judge essentially granted Mr. Potter’s application and dismissed the Commission’s. The judge ordered the Commission to file return which would include virtually all of the fruits of the investigation in relation to Mr. Potter and upheld (with some variation) the notice of examination which Mr. Potter had issued to the investigator. [5] The Commission seeks leave to appeal. Its main submission is that the underlying judicial review application is improper and premature and that, as a result, the procedural orders under appeal should not have been made. In short, the Commission says that Mr. Potter ought, in the first instance, to take his complaints about the investigation to it, not to the courts. [6] For the reasons which follow, agree with the Commission’s position. I would therefore grant leave, allow the appeal and direct that the underlying judicial review application be stayed. [7] Although many issues are raised on appeal, it is only necessary, in my view, to deal with two of them: 1. Should we consider the appropriateness of the underlying judicial review application on this interlocutory appeal? 2. If so, should the underlying judicial review application be stayed or dismissed with the result that it is not necessary to address the other issues raised? ANALYSIS: A. Should We Consider the Appropriateness of the Underlying Judicial Review Application on this Interlocutory Appeal? [8] The Commission’s fundamental argument on appeal is that the underlying judicial application is inappropriate and premature. It follows that the chambers judge should not have entertained Mr. Potter’s interlocutory applications. If we were to accept this argument, the foundation of the interlocutory order under appeal would disappear. Accordingly, the question of whether we should address the Commission’s attack on the underlying judicial review application is an important and potentially dispositive threshold issue. [9] In my view, we should address this issue. No one has been taken by surprise. The Commission’s factum on appeal, as Mr. Potter notes, has put the appropriateness of the underlying judicial review application “front and centre” before this Court. The substance of the Commission’s position was argued before Richard, J. and has been fully argued in the facta and oral submissions in this Court. The issue is potentially dispositive and, as shall discuss later, dealing with the appropriateness of the underlying judicial review application avoids the court having to do either preliminary assessment of Mr. Potter’s substantive complaints or the balancing of the interests of disclosure and confidentiality which it is ill-equipped to carry out at this preliminary stage. B. Is the Judicial Review Application Ill-founded or Premature? [10] The Commission submits that: (a) certiorari is not available to review an investigation; and (b) the court should allow the Commission to address the matters raised in the judicial review application. [11] should first set out some of the background. The Commission issued an investigation order (which has been amended on couple of occasions) for the investigation of “the affairs of Knowledge House Inc, reporting issuer, and any company or business owned, controlled or operated, in law or in fact, by Knowledge House Inc.”: see s. 27 of the Securities Act, R.S.N.S. 1989, c. 418. Mr. Potter indicates that he is President, CEO and Chair of the Board of Knowledge House. [12] Mr. Potter sought judicial review and requested orders quashing, staying and prohibiting the Commission from pursuing the investigation. In brief, he claimed that large number of emails, including many in his own email box, had been wrongfully obtained from the server or servers of Knowledge House Inc. by counsel for National Bank Financial, Messrs. Parish and Awad. Some of these emails, Mr. Potter said, are subject to his solicitor-client privilege. Mr. Parish supplied the emails to the Commission and, Mr. Potter claimed, the Commission in turn supplied file of information to the RCMP. Mr. Potter alleged that the Commission acted improperly in taking possession of this material without warrant, in using it in the course of its investigation and in forwarding information to the RCMP. As noted, Mr. Potter also issued notice of examination to one of the investigators, Mr. Peacock. [13] With that brief background, return to the two issues: whether certiorari is available to challenge an investigation and whether Mr. Potter’s application for certiorari is premature. 1. Availability of Certiorari: [14] The Commission’s first submission is that certiorari is simply not available to review investigations. do not accept this broad proposition. Long gone are the days when the availability of certiorari turned on the classification of the administrative process as adjudicative (or judicial) rather than investigative. As Donald J.M. Brown and The Honourable John M. Evans say in Judicial Review of Administrative Action in Canada, looseleaf, (Toronto: Canvasback Publishing, updated to January 2005) at para. 1:2231: “... certiorari ... will lie to review the conduct of an investigation ... on the ground that even if not legally binding, the investigation has exceeded the terms of the statutory mandate or that the procedure followed is in breach of the duty of procedural fairness.” [15] conclude that the underlying judicial review application should not at this stage be dismissed or stayed on the basis that certiorari is never available to attack an investigation by an administrative agency. 2. Prematurity: [16] If certiorari is potentially available, we are left with the court’s exercise of discretion as to whether to intervene in the investigation. Generally speaking, courts exercise that discretion with great caution and restraint while the administrative process is ongoing. This restraint is based on the concern that intervention may result in multiplication of proceedings with the attendant costs and delay and in the failure to accord appropriate deference to the administrative decision-maker: see, e.g., Brown and Evans, para. 3:4100; Psychologist “Y” v. Nova Scotia Board of Examiners in Psychology (2005), 2005 NSCA 116 (CanLII), 236 N.S.R. (2d) 273; N.S.J. No. 350 (Q.L.)(C.A.) at paras. 22-25. Of course, the rights of the challenger are critical part of the analysis and so the courts also consider whether there are other effective means of redress within the administrative scheme. [17] Taking all of these considerations into account, conclude that this is clearly case in which Mr. Potter’s complaints about the investigation should go in the first instance to the Commission. will briefly summarize my reasons. (a) The return and the examination of Mr. Peacock: [18] It is critical to keep the questions about the scope of the return and the examination of the investigator at the forefront of the analysis which follows. Before turning to my reasons for thinking that this matter should be addressed by the Commission, will set out the nature of the problems facing the court in relation to the scope of the return and whether the investigator should be discovered at this preliminary stage. [19] Rule 56.08 sets out the template for the return on certiorari application. However, the law recognizes that one size of return does not fit all judicial review cases. tribunal’s return must reflect and, to the appropriate extent, be responsive to the grounds of review asserted. In Waverley (Village Commissioners) v. Kerr et al. (1994), 1994 CanLII 4136 (NS CA), 129 N.S.R. (2d) 298; N.S.J. No. 84 (Q.L.)(C.A.) Freeman, J.A., writing for the Court, wisely pointed out that the contents of the return as specified in Rule 56.08 can apply only by analogy when, as here, discretionary matters are under review. As he put it, ... the circumstances must govern.”: at para. 50. As for discovery in the context of judicial review, the general rule is that it will not lightly be permitted: see Waverley, supra at para. 30. [20] In many respects, the issue about the scope of the return and the availability of discovery raise the same fundamental issue in case like this one. That issue is how to balance two competing requirements: the applicant’s need to know and the investigators need to keep secret. On the one hand, the applicant for judicial review needs, and ought to have access to, the relevant information for the purposes of review. Mr. Potter needs to know what the investigators did in order to mount his challenge. On the other hand, administrative actors should not have to reveal information which they are permitted (or required) to keep confidential simply because someone challenges their actions. The investigative process could break down if full access to its fruits were available simply by filing judicial review application. [21] These two requirements are in acute tension in this case. Mr. Potter alleges serious impropriety on the part of the investigators and, to prove it, requires access to information about their actions. He says that the investigators required, but did not have, warrant issued by judge under s. 27(5) of the Act to obtain his email records. He also claims that, as some of the emails are subject to solicitor and client privilege, the investigators ought to have invoked the process under s. 29F(3) of the Act to have judge determine the issues of solicitor and client privilege in relation to those materials. In addition, Mr. Potter claims that the investigators used privileged material for the purposes of their investigation and may have handed it over to the RCMP, thereby tainting the process. [22] As serious as these allegations are, however, one must also consider the importance of confidentiality in the investigative process. Granting routine access to the fruits of an investigation to anyone who has filed certiorari application could put the whole system of securities regulation at risk: the ability to investigate in private would, for practical purposes, no longer exist. [23] In general, the record and any permitted discovery should reflect and be responsive to the matter under challenge. But there also must be reason why particular information is required: IMS Health Canada Ltd. v. Information and Privacy Commissioner, [2005] A.J. No. 1293 (Q.L.)(C.A.) at para. 34. bare allegation in judicial review proceeding will not necessarily open the doors to material that the tribunal or agency has right to keep confidential. For example, in IMS, the court said that the principle of deliberative secrecy of tribunals may only be overcome if the applicant for judicial review demonstrates valid reason that the intrusion is necessary: at para. 46. My purpose in mentioning this is not to enter debate about the precise limits of tribunal deliberative secrecy. The point is simply to explain why, in case like this one, the contents of the return or the availability of discovery cannot meaningfully be assessed without some threshold examination of the merits of the judicial review application. [24] In addition, a balancing of interests is required. The investigative process lies at the heart of the regulatory system established by the Act. The balance between confidentiality and disclosure within that process is one that is critical to the effective discharge of the Commission’s mandate. While investigators must not, of course, be allowed to run roughshod over people’s rights, they must be allowed to exercise their broad powers in the public interest. [25] To sum up, in order to determine the proper scope of the return or whether discovery should be available, the court must do two things: it must make some preliminary assessment of the merits of the judicial review application and then balance the competing interests. Absent some such assessment and balancing, the Court would simply be ordering confidential material to be turned over to Mr. Potter in order to support challenge of unknown merit and with virtually unknown impact on the investigative process. [26] While the court would have to engage in some form of preliminary assessment of the merits and perform some preliminary balancing of the interests of disclosure and confidentiality, it would at this preliminary stage be severely handicapped in carrying them out. The court would not have the documentation or full argument on the merits or full grasp of the context in order to appreciate the nature and scope of the investigation. It would, therefore, have to arrive at its determinations without having an in-depth knowledge of the legal or factual issues or the impact of disclosure on the investigative process. (b) Discretion: [27] As noted earlier, courts exercise considerable restraint when asked to intervene in an ongoing administrative process. That restraint is based on number of interrelated concerns: creating multiplicity of proceedings with the attendant addition of expense and delay, failing to accord appropriate deference to the administrative decision-maker and permitting the challenger to short-circuit the administrative process. Of course, the latter concern presupposes that there are effective means of redress available to the challenger in the administrative process. In my view, each of these factors strongly favours requiring Mr. Potter to take his complaints to the Commission in the first instance and not to the courts by way of certiorari application. (i) Effective administrative redress: [28] The Commission submits, and accept, that it has the statutory authority and the means to address Mr. Potter’s complaints about the conduct of the investigators. [29] Mr. Potter is certainly person “directly affected” by the Commission’s investigation orders and, in particular, by the way the investigation authorized by those orders has been conducted. He, therefore, has the right to apply to the Commission under s. of the Act and to ask the Commission to invoke its broad, discretionary powers under s. 6(2). The Commission also has broad powers to “... make an order on such terms and conditions as may be imposed revoking or varying any decisions made under [the] Act ...”: s. 151. This section appears to give the Commission broad powers to regulate the ways in which its investigation orders are being carried out. The Securities Commission General Rules of Practice and Procedure (1996), made under s. 150 of the Act contemplate the Commission originating proceedings of its own motion (s. 2.3) or on the application of private party (s. 2.5). Investigators are obliged to provide “full and complete report of investigation” to the Commission (s. 27(15)) and the Commission has statutory discretion to permit disclosure of “any information or evidence obtained ...”: s. 29A. [30] In short, the Commission appears to have the power and the tools to address Mr. Potter’s complaints. [31] Mr. Potter says that, under the Act, his complaints would inevitably be resolved in court, not before the Commission and that his immediate recourse to the courts is therefore appropriate. [32] He submits first, that the investigators were obliged by s. 27(5) of the Act to apply to court for warrant before obtaining the material which they obtained from Mr. Parish. While would not want, at this point, to finally resolve that issue, Mr. Potter’s position does not seem to me to be so clearly right that the Commission should not have the opportunity to rule on this point before pre-emptive judicial review application. [33] Mr. Potter says, secondly, that the issues of solicitor and client privilege would inevitably be addressed in court under s. 29F(3). Without expressing final view on the matter, the present case does not at first blush appear to be one that falls within s. 29F(2) and s. 29F(3) does not appear on its face to provide the only mechanism to resolve issues of solicitor-client privilege. do not understand Nova Scotia Securities Commission v. W. (1996), 152 N.S.R. (2d) 1; N.S.J. No. 232 (Q.L.) (S.C.) to have decided otherwise. [34] note, as is well known, that there is extensive litigation already before the Supreme Court of Nova Scotia addressing the issue of privilege in relation to this material. It would seem regrettable to have parallel proceedings dealing with that issue. [35] Moreover, there are many administrative and practical issues to be addressed even before the privilege issue is finally resolved. These include how the investigation should respond to the risk that privileged materials have been obtained, how the allegedly privileged material should be dealt with in the interim and what disclosure should be made to Mr. Potter at this stage. These are matters which it seems to me the Commission could properly address now even without final resolution of the privilege claims. (ii) Multiplying and fragmenting proceedings: [36] Pre-emptive strikes in court against ongoing administrative proceedings should not be encouraged: see, for example, David J. Mullan, Administrative Law, 3rd ed., (Thomson Canada Ltd., 1996) at para. 539. Where, as here, there is comprehensive statutory scheme and specialized, expert tribunal, the tribunal generally should be permitted to address issues before the courts intervene. This consideration supports permitting the Commission to address the issues raised by Mr. Potter in his judicial review application. [37] As we shall see, the Commission would be entitled to some judicial deference in relation to critical aspects of the issues Mr. Potter raises. This strengthens the arguments in favour of allowing the Commission to address them first. Judicial intervention at this stage would effectively prevent any deference being accorded to the Commission on these issues for the simple reason that the court cannot defer to decision that has not been made. [38] Under s. 29A of the Act, much of what Mr. Potter seeks to have included in the record or to obtain by way of discovery is to be kept confidential unless the Commission grants permission for its release. The decision to release the information or not requires balancing of the competing interests in light of the overall statutory scheme and of the specific circumstances of the case. The Commission is in the best position and has the statutory discretion to perform that balancing. Its decisions in this area are entitled to judicial deference. [39] It is well-settled that securities commissions are entitled to measure of judicial deference as they carry out their statutory duties in the public interest. They have the central and pre-eminent role in the field of securities regulation in the public interest and the courts have stressed the nature and importance of this role over and over again: see, e.g., Pezim v. British Columbia (Superintendent of Brokers), 1994 CanLII 103 (SCC), [1994] S.C.R. 557 at 589, 593 and 595; British Columbia Securities Commission v. Branch, 1995 CanLII 142 (SCC), [1995] S.C.R. at para. 34. [40] The issues raised by Mr. Potter require three types of decisions: an interpretation of the statutory powers of investigators under s. 27 of the Act, determination of the extent of disclosure that should be made and determination of the mechanisms that should be put in place to address both the substance and the practical implications of his claim of solicitor and client privilege. While the substance of the privilege issue is pure question of general law, the other issues involve the proper interpretation of the Act and the exercise of discretion. [41] On these issues, the Commission is generally entitled to deference on appeal or judicial review. This is the case in relation to the interpretation of its statutory mandate, in relation to the exercise of its statutory discretionary powers, as well as in relation to the exercise of its powers to disclose investigative material: see Deloitte Touche LLP v. Ontario Securities Commission, 2002 CanLII 44980 (ON CA), [2002] O.J. No. 2350 (Q.L.)(C.A.), aff’d 2003 SCC 61 (CanLII), [2003] S.C.R. 713; Pezim, supra, Committee for Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities Commission), 2001 SCC 37 (CanLII), [2001] S.C.R. 132; Cartaway Resources Corp. (Re), 2004 SCC 26 (CanLII), [2004] S.C.R. 672; Nova Scotia (Securities Commission) v. Schriver, 2006 N.S.J. No. (Q.L.)(C.A.). [42] At the heart of this point is s. 29A of the Securities Act, which requires that investigative material be kept confidential unless the Commission otherwise orders. Section 29A of the Act provides: 29A No person or company, without the consent of the Commission, shall disclose, except to that person's counsel, any information or evidence obtained or the name of any witness examined or sought to be examined pursuant to Section 27 or Section 29. 1990, c. 15, s. 30. [43] The Commission makes two arguments based on s. 29A. The first is that it prevents the court from ordering disclosure of investigative material and the second is that the section evidences legislative intention that the Commission and not the court should decide issues of disclosure in the first instance. While do not accept the Commission’s first argument, agree with the second. [44] do not agree that s. 29A prevents the court from ordering disclosure of the material in proper case. We are told that there is no case law in Nova Scotia interpreting this provision. However, counsel has drawn our attention to the jurisprudence in Ontario and British Columbia in relation to similarly worded provisions: Deloitte Touche LLP v. Ontario (Securities Commission), [2005] O.J. No. 1510 (Q.L.)(Ont. Sup. Ct. J.); Deloitte Touche LLP v. Ontario (Securities Commission), 2002 CanLII 44980 (ON CA), [2002] O.J. No. 2350 (Q.L.)(C.A.), aff’d 2003 SCC 61 (CanLII), [2003] S.C.R. 713; Smolensky v. British Columbia (Securities Commission) (2004), 2004 BCCA 81 (CanLII), 236 D.L.R. (4th) 262 (C.A.); B.C.J. No. 298 (Q.L.), leave to appeal dismissed [2004] S.C.C.A. No. 274. These cases, however, deal with the disclosure obligation of the Commission to persons affected by Notice of Hearing. While they are helpful in considering the scheme of the confidentiality and disclosure obligations of the Commission in general, they do not address the authority of the court to order production. [45] The question of whether the court may order production is one of statutory interpretation. The applicable principle of statutory interpretation is that any limitation on the authority of superior court to order production must be clearly expressed in the statute: Glover v. Glover et al. (No. 1) (1980), 1980 CanLII 63 (ON CA), 113 D.L.R. (3d) 161 (Ont. C.A.), aff’d 1981 CanLII 64 (SCC), [1981] S.C.R. 561; R. v. Snider, 1954 CanLII 40 (SCC), [1954] S.C.R. 479; Cook v. Ip (1986), 1985 CanLII 163 (ON CA), 52 O.R. (2d) 289 (C.A.). As Cory, J.A. (as he then was) put it in the latter case at p. 293: “There is an inherent jurisdiction in the court to ensure that all relevant documents are before it. ... On the other hand, it is quite clear that the Legislature may by statute prohibit [potential witnesses] from giving testimony [or an agency from] producing its records at trial... If the Legislature is to achieve that result, it must specify the restriction in clear and unambiguous terms.” (Emphasis added) [46] In my view, s. 29A does not clearly take away the power of the superior courts to order production of relevant evidence. The section is directed to person or company, not to court. There is no reference to legal process and nothing which expressly or by necessary implication detracts from the court’s power to compel evidence. The language of s. 29A is markedly different from that of provisions which have been held to take away the courts’ power to order production. For example, the provisions considered in Glover expressly prohibited persons from giving evidence or producing records in legal proceedings. In Swinimer v. Canada (Minister of National Defence) (2005), 2005 NSSC 55 (CanLII), 231 N.S.R. (2d) 129 (S.C.), the statute under consideration provided that the investigators were not compellable witnesses: see para. 24. No comparable language is present in s. 29A. In short, there is no express language and no clear legislative intention in s. 29A to take away the inherent authority of superior court to compel documents and testimony. [47] That is not the end of the matter, however. Simply because the courts have the power to require production, it does not follow that they should use that power in the first instance without providing the Commission with an opportunity to carry out its statutory mandate. In my view, deference is due to the Commission in the sense that it ought to have the first opportunity in this case to address the scope of disclosure to Mr. Potter. agree with the Commission that s. 29A, read in the context of the legislative scheme, reflects an important aspect of the Commission’s responsibility to balance the interests of fair investigation and effective regulation in the public interest. [48] The Commission, subject to appeal or judicial review, has the lead responsibility to strike and maintain the required balance with respect to disclosure of investigative material: see, e.g., Deloitte Touche, LLP v. Ontario (Securities Commission), supra [S.C.R] at paras. 21 29. As the Court said in Smolensky, supra, testimony and other information obtained under compulsion in securities investigations engage privacy interests and the ability to keep such information confidential will likely enhance the effectiveness of the investigation. However, the Court also noted that there are corresponding claims of procedural fairness tending to require disclosure which must be balanced on case by case basis in light of the Commission’s public interest mandate. [49] Not only is the balancing of confidentiality and disclosure in the investigative context central to the Commission’s statutory mandate, the Commission is better placed than the courts to perform that balancing, particularly at this preliminary stage. Unlike the courts, the Commission’s balancing may be performed in light of the actual information in issue and detailed grasp of the investigation and the underlying policy issues in relation to securities regulation. (iv) Conclusion: [50] For all of these reasons, requiring Mr. Potter to go to the Commission in the first instance rather than to court by way of judicial review is the preferable course of action. It has the potential to provide Mr. Potter with effective redress for his complaint, respects the role and expertise of the Commission, is potentially less intrusive into the investigative process, relieves the court of the responsibility of making an initial and somewhat speculative assessment of the merits of his allegations and reduces the risk that confidential information will be released for no good reason. IV. DISPOSITION: [51] I would accordingly grant leave, allow the appeal and order that: 1. The order of Richard, J. be set aside except for para. 2(a) on page 4 thereof with the result that the material given to Mr. Potter pursuant to that part of the order shall remain in his possession and the material filed by the Commission in the Supreme Court shall remain sealed and in the custody of the Court; 2. The judicial review application filed by Mr. Potter by Originating Notice (Application Inter Partes) dated March 29, 2004, and the amended Originating Notice (Application Inter Partes) dated July 4, 2005, be stayed until further order of the Supreme Court; 3. The notice of examination for discovery of R. Scott Peacock dated August 29, 2005, be struck out, the Commission’s application to strike out the affidavit of Dan Potter sworn March 29, 2004, and to strike out the July 4, 2005, amendments to the Originating Notice (Application Inter Parties) be dismissed, all without prejudice to the Notice of Examination being re-issued and the Commission’s application to strike it out as well as its applications in relation to the March 29, 2004 affidavit and the July 5, 2005 Originating Notice being renewed in the event that the stay of the judicial review application is lifted. 4. The material filed by the Commission pursuant to para. of Richard, J.’s order will be returned to it to be dealt with by the Commission according to law. [52] The purpose of the stay of the judicial review application is to provide Mr. Potter an opportunity to raise the matters on which it is based with the Commission and for the Commission to address them. The stay may be lifted by a judge of the Supreme Court on application with notice. specifically note that there has been no determination on the merits of any of the allegations made by Mr. Potter in his judicial review application. [53] should also say, respectfully, that the Commission appears from the material before us to have been slow to recognize the seriousness of the implications of the allegations made by Mr. Potter in relation to the investigation. say this without in any way pre-judging the ultimate merits of those allegations. It has been obvious for many months that there are serious claims of solicitor-client privilege in relation to material in the Commission’s hands and yet, so far as we can tell, it has done virtually nothing to come to grips with the implications of those claims for the investigation it has authorized. The Commission has also had the benefit for many months of Scanlan, J.’s decision in National Bank Financial Ltd. v. Potter (2005), 2005 NSSC 113 (CanLII), 233 N.S.R. (2d) 123; N.S.J. No. 186 (Q.L.)(S.C.) which held that the onus is not on the party claiming privilege to take steps to have the privilege issue determined: see para. 62. The judge also set out some very clear statements of what he understood to be the ethical obligations of lawyers who come into the possession of material for which privilege is claimed: see paras. 62 -63. It cannot have been lost on the Commission, which we are advised had counsel on watching brief throughout the proceedings before Scanlan, J., that these statements have serious implications for some or all of its investigators. The Commission, through counsel, claims to have the authority and the tools to address these issues. This decision gives it the opportunity to put those submissions into action. [54] In short, while prefer to extend considerable judicial deference to the Commission in the discharge of its regulatory responsibilities in the public interest, that deference is neither absolute nor open-ended. It is, in my view, essential that the Commission take serious and immediate steps to come to grips with the obvious issues which have arisen in the course of the investigation which it has ordered. [55] The fresh evidence application is dismissed and would make no order as to costs. Cromwell, J.A. Concurred in: Bateman, J.A. Saunders, J.A.
The president of a company against whom the Securities Commission had ordered an investigation applied to the court for certiorari to quash the investigation. He alleged that the investigators had improperly obtained and used the contents of his email, some of which were subject to solicitor and client privilege. In the context of the certiorari application, the company president successfully argued that the Commission's return should contain the fruits of the investigation so far and that he should be entitled to examine one of the investigators for discovery. The Commission appealed, arguing that the underlying judicial review application was improper and premature and thus, the procedural orders should not have been made. Appeal allowed; the underlying judicial review application is stayed; the stay may be lifted by a judge of the Supreme Court on application with notice; the Order of the chambers judge on the procedural matters arising in that application is set aside. The underlying judicial review application was premature because the Commission should have had the opportunity to consider and address the company president's complaints. The decision as to whether or not to release the information sought required the balancing of competing interests in light of the overall statutory scheme and the specific circumstances of the case; the Commission was in the best position to conduct such an exercise.