Ontario’s Capital Markets Tribunal denied a request for a sweeping public blackout on an enforcement proceeding, ruling that the “open courts” principle sets a high bar for holding a hearing behind closed doors — and that the man seeking a confidentiality order failed to clear that bar.
The case involves an allegation that a settlement between the Ontario Securities Commission (OSC) and Benjamin Ward, which was reached back in 2022 — and prohibits Ward from serving as a director or officer of an issuer for six years — was breached by Ward.
That allegation has not been proven.
In the meantime, Ward brought a motion seeking that the current proceeding be kept confidential — and, if not, that the proceeding be stayed entirely.
According to the tribunal’s decision, Ward argued that a blanket confidentiality order is needed “to give him a fair and full hearing.”
And, he said that his defence in the current case will rely on evidence that was ordered to be kept confidential in the earlier proceeding, which resulted in his settlement with the OSC.
Indeed, back in 2020, the regulator ordered that portions of a transcript of the OSC’s compelled interview of Ward be kept confidential as part of its proceedings against Ward and others — including Canada Cannabis Corp., Canadian Cannabis Corp, Silvio Serrano, and Peter Strang. It also ordered that portions of that hearing be held behind closed doors, in order to keep the material covered by the confidentiality order private.
That decision ultimately led the Tribunal to stay the proceedings against Serrano in 2023, ruling that he couldn’t properly defend himself without access to the full, unredacted transcript; and that the commission was prevented from providing that evidence to him by the confidentiality decision from 2020.
In the current case, the Tribunal said that Ward didn’t meet the test for a fully confidential hearing, or for a stay of this proceeding.
In its decision, the panel said that, while Ward said that he intends to rely on evidence made confidential under the 2020 order, he didn’t detail the specific evidence that he intends to use, or to explain how it’s relevant to the new proceeding.
“Further, he does not provide evidence of any specific risks, nor does he even identify any specific risks, that would arise if a blanket confidentiality order were not granted,” the panel said. “He simply asserts that the materials are required to make full answer and defence.”
The OSC opposed the motion for blanket confidentiality, and the tribunal ultimately sided with the regulator, ruling that Ward failed to meet the test for a broad confidentiality order, saying, “There is a strong presumption in favour of open courts, and accordingly, confidentiality orders should be made only in rare circumstances.”
“A person seeking a confidentiality order must show that openness presents a serious risk to a competing interest of public importance, that a confidentiality order is necessary to prevent the risk, and that the benefits of an order restricting openness outweigh its negative effects,” the tribunal said.
In this case, the tribunal ruled that Ward didn’t meet that test, and it dismissed his motion, without prejudice — meaning that he could bring another motion seeking a more limited confidentiality order.
“Ward cast his confidentiality request too broadly,” the tribunal said. “… His broad request would include making confidential the entire application for enforcement proceeding and all the evidence and materials that the commission filed on this motion setting out the evidentiary basis for this proceeding, including multiple publicly available corporate records. Ward failed to meet the high standard for a confidentiality order.”
In the meantime, the tribunal did order that parts of the adjudicative record in this proceeding be redacted and kept private to prevent the disclosure of evidence covered by the original confidentiality order.
On the motion for a stay, the tribunal said that staying a proceeding is “a drastic remedy,” and it dismissed that request too, saying that Ward, “has not established prejudice to his right to a fair hearing or the integrity of the justice system, nor has he established there are no alternative remedies to address his concerns …”