Appeals from the Ontario Securities Commission Post-Vavilov

The Supreme Court of Canada’s decisions in companion appeals Canada (Minister of Citizenship and Immigration) v. Vavilov[1] and Bell Canada v. Canada (Attorney General)[2] established a revised framework for appellate and judicial review of administrative law matters, which applies to the decisions of securities regulators. This new framework should bring an end to the wide-ranging, nearly complete deference that courts have afforded to decisions of the Ontario Securities Commission (“OSC”). Appeals will now be reviewed on the same standard as appeals from lower court decisions, which will mean a much less deferential standard for questions of law than the OSC enjoyed in the past. As a recent Ontario Divisional Court case exemplifies, the impact of Vavilov is much less important where the grounds of appeal are factual in nature.[3]

Traditionally, courts have shown securities regulators a high degree of deference in recognition of the fact that “securities regulation is a highly specialized activity that requires specific knowledge and expertise in the complexities of capital and financial markets.”[4] However, the traditional approach has been criticized for failing to give effect to the fact that section 9.1 of the Securities Act provides a direct right of appeal (rather than a right of judicial review) from the decisions of the OSC without any privative clause. This, critics have said, shows the legislature’s intention to have a robust right of appeal from OSC decisions.

Vavilov and Bell

The most significant change wrought by Vavilov and Bell is that the ordinary appellate standard of review now applies where the legislature has statutorily provided for a right of appeal.[5] This is significant to securities regulators because each province’s securities legislation provides an appeal as of right.[6] In Ontario, the statutory right of appeal from OSC decisions is broad, and contemplates wide-ranging relief.

Quadrexx: The End of Deference?

In Quadrexx Hedge Capital Management Ltd. v. Ontario Securities Commission, the Ontario Divisional Court heard an appeal from the OSC decision finding that the respondents had committed fraud. Although originally argued prior to Vavilov, the Court received additional written submissions after that decision was released.

In accordance with Vavilov, Court found that the appellate standard of review applied to their review of the decision. This meant that questions of law would be reviewed on the correctness standard, that questions of fact would be reviewed on the “palpable and overriding error” standard, and that questions of mixed-fact and law lie on a spectrum between the two.[7] The Divisional Court applied a “demonstrably unfit” standard to its review of the OSC’s sanctions decision.[8]

The Divisional Court’s decision highlights that framing issues on appeal is important and, notwithstanding Vavilov, many grounds can be characterized such that a considerable degree of deference will still be applied under the appellate standard. The appellants alleged that the OSC had made nineteen errors of fact and three errors of mixed fact and law in finding they had committed fraud. Neither the appellants nor the Divisional Court identified a single “pure” question of law to which the correctness standard would apply. Furthermore, the Divisional Court noted the breadth of the OSC’s discretion in applying the public interest power.[9]


Quadrexx confirms that Vavilov has changed the law regarding appeals from securities commission decisions. Appeals may now be justifiable in circumstances where they would previously have had little chance of success. Appellants framing issues on appeal as questions of fact or mixed fact and law may derive little benefit from the changes wrought by the Supreme Court of Canada, if Quadrexx is indicative. Questions of law should stand a much greater likelihood of success since the expertise of the OSC as a specialized tribunal no longer justifies courts giving deference on questions of law. On appeal, courts are charged with responsibility for ensuring correctness on questions of law.

Critical questions of law will arise in connection with the extent of the OSC public interest jurisdiction and the deference to be shown to it, particularly when it is exercised in the absence of any securities law violation. As a practical matter, it may take time, and well-suited cases, for the shift introduced by Vavilov to be fully implemented by the courts.


[1] Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [Vavilov]

[2] Bell Canada v. Canada (Attorney General), 2019 SCC 66,

[3] Quadrexx Hedge Capital Management Ltd. v. Ontario Securities Commission, 2020 ONSC 4392.

[4] Ibid., at para. 75.

[5] Vavilov at paras. 17; 36-37.

[6] See e.g. Securities Act, R.S.A. 2000, c. S-4, s. 38; Securities Act, RSO 1990, c S.5; Securities Act, S.N.B. 2004, c. S-5.5, s. 195; Securities Act, R.S.B.C. 1996, c. 418, s. 167

[7] Quadrexx Hedge Capital Management Ltd. v. Ontario Securities Commission, 2020 ONSC 4392, at paras. 77-81.

[8] Ibid., at para. 72.

[9] Ibid., at para. 126

Vavilov OSC appeal judicial review Ontario Securities Commission Ontario Securities Act



Stay Connected

Get the latest posts from this blog

Please enter a valid email address