Ontario’s Capital Markets Tribunal refused a motion to stay proceedings against the founders of failed fund manager Bridging Finance Inc. while a judicial review of an earlier tribunal decision takes place.
On May 5, the tribunal heard arguments from lawyers for David and Natasha Sharpe, the founders and former executives at Bridging who are facing allegations of misconduct from the Ontario Securities Commission (OSC) that led to the regulator asking an Ontario court to place the firm in receivership.
Those allegations have not been proven, and are scheduled to be heard over 35 days in a proceeding slated to start in June and to wrap up in February 2024.
At the latest hearing, the Sharpes (who served as CEO and chief investment officer at the firm, respectively) argued that proceedings should be adjourned pending the outcome of a judicial review in Ontario’s Divisional Court of a tribunal decision in February. That decision rejected motions from the Sharpes seeking added disclosure from the OSC and alleging “abuse of process” by the regulator.
In that decision, the tribunal found that the Sharpes failed to make the case for their motions for disclosure or that the regulator’s actions represented an abuse of process.
In its latest decision rejecting the motion for an adjournment, the tribunal said it was “not satisfied that the Sharpes’ judicial review application is an ‘exceptional circumstance’ that requires granting the adjournments.”
It also noted that many of the arguments made by the lawyers for the Sharpes were based on the premise that the February ruling was incorrect and contained “numerous significant reviewable legal errors.”
The tribunal said it “cannot entertain the premise” that its February decision was incorrect and therefore “must reject the submission that that decision deprived the Sharpes of evidence necessary for them to advance their motions for a stay of proceedings.”
It stressed that it cannot speculate about the outcome of the judicial review or relitigate issues that it has already decided.
“Should the Divisional Court set aside the tribunal’s decision, the tribunal can rehear the matter in accordance with any directions given by the court,” it said.
While this could lead to further delay and expense, “We were not persuaded that the possibility of additional costs outweighed the need to proceed expeditiously.”
The tribunal also rejected the argument that a recent Supreme Court of Canada decision regarding the standard for granting a stay in a criminal case should be applied to regulatory proceedings.
“We did not grasp the relevance of the recent decision of the Supreme Court of Canada, R. v. Haevischer, upon which the Sharpes placed strong reliance,” the tribunal said in its ruling. “Whether Haevischer has any implications for the Tribunal’s February 21, 2023, decision is a matter for the Divisional Court hearing the Sharpes’ judicial review.”