Recent Changes to Proceedings Before the Capital Markets Tribunal

On March 19, 2024, the Capital Markets Tribunal (the “Tribunal”) introduced substantial amendments to its Rules of Procedure (the “Rules”). The new Rules replace the former Rules of Procedure and Forms and Practice Guideline to provide a single source of guidance to improve the efficiency of Tribunal proceedings, and apply to all Tribunal proceedings, including those proceedings commenced prior to the implementation of the new Rules.

This bulletin summarizes the key amendments to the Rules.

1. New Address for Service

Where anything in the Rules is required to be served upon the Ontario Securities Commission (the “Commission”) and the Commission has no representative of record in the proceeding, the new Rules provide that the Commission shall be served by email at originalservice@osc.gov.on.ca.^[1]

The Rules also provide that where the Tribunal issues a summons to require a person resident in Ontario to give evidence under oath or produce any document or thing specified in the summons at an oral hearing, service on the person summonsed must be effected by personal delivery.^[2]

2. New Address for Filing

Anything required to be filed with the Tribunal shall be sent by email in PDF format to the Registrar at registrar@capitalmarketstribunal.ca, copying all parties and identifying the proceeding’s file number, if the proceeding has already been commenced.^[3] The Registrar’s new address is intended to “better reflect the Tribunal’s independence from the Ontario Securities Commission.”

3. Commencement and Title of Proceedings

References to the filing of a Statement of Allegations being a precursor to the issuance of a notice of hearing by the Tribunal and the commencement of a proceeding have been removed. Now, a proceeding is commenced by the Tribunal issuing a notice of hearing after an application is filed. Before filing an application, an applicant is required to make reasonable efforts to consult the other parties and propose one or more dates to the Registrar for the first hearing in the proceeding.^[4]

The new Rules also impose an obligation on parties to consult among themselves and agree on a schedule prior to attending at a hearing at which dates will be set for further steps in the proceeding or, at the very least, come to the hearing prepared to present competing schedules to the Tribunal.^[5]

The title of proceeding for every application shall set out the names of all of the parties, with the part(ies) commencing the application as “applicant(s)” and opposing part(ies) as “respondent(s).” Where the Commission is not the applicant, it shall be named as a respondent.^[6]

4. Availability of Enforcement Proceedings Without Opportunity to Be Heard

The former Rules prescribed an expedited procedure for enforcement proceedings commenced by the Commission pursuant to s. 127(1) of the Securities Act, RSO 1990, c S.5. Pursuant to s. 11(3) of the former Rules, the Commission was required to provide notice of its election to proceed by way of expedited procedure to all of the respondents.

Under the new rule 14, the Commission may, in certain circumstances, request that an order under s. 127(1) of the Securities Act be made without providing the person or company that is subject to the order with an opportunity to be heard.^[7] Specifically, in making such request, the Commission may rely on ss.127(4.0.1) (prior conviction), 127(4.0.2) (prior order) or 127(4.0.3) (prior settlement agreement) of the Securities Act, and shall follow the following procedure:

(a) make the request by application;

(b) file its book of documents and written submissions in support of the application at the same time as its application; and

(c) as soon as is practicable after the Tribunal issues the order, provide a copy of the order to the person or company that is subject to the order.^[8]

5. Mode of Hearing of Applications for Authorization to Disclose

The former Rules were silent on the mode of hearing of an application under s. 17 of the Securities Act for disclosure of information about an investigation or examination. The new Rules provide that such applications shall proceed by way of a written hearing if the Tribunal is satisfied that it can proceed without notice under s. 17(2.1) of the Securities Act, or with the consent of the person and companies named by the Tribunal and the person or company from which the information was obtained. Otherwise, the hearing shall be held as an oral hearing.^[9]

6. Service Requirements for Requests for a Temporary Order or Extension of a Temporary Order

A request for a temporary order pursuant to s. 127(5) of the Securities Act or a request to extend a temporary order pursuant to ss. 127(7) or (8) of the Securities Act may be made by way of application (if the request is not made in an existing proceeding) or a motion (if the request is made in an existing proceeding).

The new Rules provide that if a request is made by motion, the motion must be filed at least 10 days before the requested motion date.^[10] If a request is made by application, the application record must conform with the requirements in rule 21 regarding content and technical file specifications.

7. Additional Parties to Be Served With Applications for Review of a Decision

Previously, an applicant requesting a review of a decision pursuant to s. 8 of the Securities Act was only required to serve the application and notice of hearing on “every other party to the original proceeding” and “Enforcement Staff.” The new Rules specify that the following parties must be served:

(a) the Commission;

(b) the entity from which the direction, decision, order or ruling was made;

(c) if the direction, decision, order or ruling to be reviewed emanated from a proceeding, then on every other party to the original proceeding; and

(d) if there was no original proceeding, then on every person or company that made submissions leading to the direction, decision, order or ruling.^[11]

A party may seek permission to rely on witness testimony, or on documents or things not included in the record of the original proceeding, by filing a motion.^[12]

8. Rules Regarding Evidence

The new Rules (specifically, rules 29-31) set out the requirements as to the form and content of written materials filed with the Tribunal, including affidavits, statements of agreed facts, joint books of documents, and documentary aids.

Most notably:

(a) unless all parties consent and the Tribunal permits otherwise, any witness who provides affidavit evidence must be available for cross-examination at the hearing in which it will be tendered;^[13]

(b) the Tribunal may order that all or part of a witness’ evidence be provided by affidavit;^[14]

(c) documentary aids must be served no later than 10 days before the hearing,^[15] unless there is no dispute as to whether the chart or aid fairly distils or analyzes the underlying evidence, in which case, it may be filed at the hearing;^[16]

(d) citations of authorities in written submissions must identify the passage that the party relies on and hyperlink to a free online source (i.e., CanLII or Ontario e-Laws), where possible;^[17]

(e) any written submissions exceeding 500 pages must be separated into two or more volumes. Each volume must include the main body of the submissions;^[18]

(f) any party seeking an order from the Tribunal is required to provide a draft of the terms of the order as a part of their closing submissions. The draft order must identify the statutory or other provision giving the Tribunal jurisdiction to make such order;^[19] and

(g) where a party objects to the admissibility of an expert’s testimony, notice identifying the grounds for the objection must be served on every other party to the proceeding.^[20]

9. Motions Procedure

A party who intends to bring a motion now has several obligations, including:

(a) canvassing the responding parties for:

(i) potential hearing dates for a case management hearing;

(ii) the responding parties’ preliminary positions on the motion; and

(iii) an agreed-upon schedule for the exchange of materials for the motion, to be presented to the Tribunal for consideration;

(b) arranging with the Registrar a date for a case management hearing; and

(c) filing the motion and serving the motion on every other party.^[21]

Previously, the timeline for the exchange of materials in a motion was standardized in the Tribunal’s Practice Guidelines. The new Rules provide that the schedule will, instead, be as agreed to by the parties or ordered by the Tribunal.^[22]

The Rules now also provide a summary dismissal procedure for applications or motions.^[23]

Conclusion

The Tribunal’s updated Rules are intended to clarify and streamline procedures for proceedings conducted before the Tribunal, and evidence an increased focus on practicality and efficiency.

If you require assistance with any matter or question related to the updated Rules, please reach out to the authors or a member of our Litigation & Dispute Resolution Group.