The Capital Markets Tribunal (“the Tribunal”) recently dismissed an application under Section 17 of the Securities Act (the “Act”) for authorization to disclose confidential documents – arising from an Ontario Securities Commission (“OSC”) investigation – in UK civil proceedings on the basis that the order sought was not in the public interest.
In this article, Dan Thomas provides a detailed update to his April 2025 article on the Tribunal’s proceedings in Katanga Mining Limited v Ontario Securities Commission, 2025 ONCMT 16 (“Katanga”).
THE STORY SO FAR
Katanga Mining Limited (“Katanga”) concluded a settlement agreement, approved by the Tribunal in December 2018, following a confidential investigation by the OSC. Katanga later became a wholly-owned subsidiary of Glencore plc (“Glencore”). Glencore is currently a defendant in a civil claim in the High Court of Justice of England & Wales (“UK High Court”) alleging material misleading statements and omissions in its public company disclosure. The UK High Court ordered that Confidential Documents provided by the OSC to Katanga during the investigation must be disclosed in the UK proceedings, to the extent that they are relevant to issues in the UK litigation.
In March 2025 the Tribunal authorized Katanga to share some of the Confidential Documents with Glencore’s UK counsel for the sole purpose of conducting a relevance review. Subsequently, Glencore’s UK counsel determined that all but one of the Confidential Documents must be disclosed to comply with the UK High Court’s production order.
THE ISSUE BEFORE THE TRIBUNAL
Katanga returned to the Tribunal for its application under section 17 of the Act to be determined. Katanga sought permission to disclose the Confidential Documents identified by UK counsel in the UK proceedings. The sole issue for the Tribunal to determine was whether it was in the public interest to authorize such disclosure.
THE TRIBUNAL’S DECISION
In dismissing Katanga’s application on the basis that the disclosure order sought was not in the public interest the Tribunal observed that “[d]isclosure of information protected by s.16 for use in private civil proceedings is generally not in the public interest, and a court order stating that relevant documents must be disclosed cannot alone satisfy the public interest analysis.” (para. 2, Katanga) The Tribunal ruled that a case management order issued by a UK court, or any foreign court, requiring production of confidential documents “without more”, cannot determine the outcome of an application under section 17 of the Act (paras. 29-30, Katanga).
The Tribunal reaffirms its public policy obligations
As we noted in our previous article on this case, the Tribunal was always going to take a much closer look at the public interest if Katanga returned to request disclosure of any Confidential Documents in the UK proceedings. As such, the Tribunal’s decision is perhaps unsurprising as it reaffirms the long-standing public policy, pursued by Ontario and other jurisdictions, that confidentiality is essential to the integrity and effectiveness of regulatory investigations. Furthermore, the Tribunal followed the well-established position – particularly in light of X and A Co (Re), 2007 ONSEC 1 – that it is generally not in the public interest to disclose information protected by section 16 for use in private civil proceedings.
However, it is worthy of note that the Tribunal confirmed (citing the Ontario Court of Appeal in Biscotti v OSC, 1991 CanLII 7216) that there is “no blanket rule” against disclosure for use in private civil litigation and that each request would be considered on its own merits and in the specific circumstances of each case.
Failing the public interest test
In respect of the public interest test under section 17 of the Act, the Tribunal affirmed its prior decision in Black (Re), 31 OSCB 10387 that an order under section 17 will require the “most unusual circumstances” (para. 19, Katanga).
In ruling against disclosure, the Tribunal held that: (i) the facts of the instant case were not unusual; (ii) materials obtained by an OSC investigator would always be relevant to private civil litigation arising from the same or related subject matter; (and iii) the UK proceeding lacked any special features.
Impact on section 17 disclosure applications arising from foreign civil proceedings
From a cross-border perspective, the Tribunal made several interesting observations:
- A case management order of a UK or other foreign court, “without more”, cannot determine the outcome under section 17 (para. 40, Katanga).
- The Tribunal’s jurisdiction is limited to determining whether disclosure would advance the purposes of the Act. Therefore, a foreign court order, grounded in foreign procedural rules and directed to the conduct of foreign civil litigation, does not fulfil those purposes.
- The principles of comity do not permit the Tribunal to disregard express legislative confidentiality requirements, nor expand the statutory exceptions in section 16, nor shift the focus of the section 17 inquiry from Ontario’s regulatory purposes to the procedural needs of foreign private litigants.
- The Tribunal distinguished the decision in Hamlin (Re), 2023 ONCMT 5, due to its “unusual and complicated” facts (para. 34, Katanga) and concluded that Hamlin indicated that a foreign disclosure order is a contextual fact, but not a substitute for the statutory analysis required by section 17. The Tribunal distinguished between foreign assistance tied to an OSC section 11 investigation (as in Hamlin) and foreign private litigation unconnected to the Act’s purposes (as in Katanga).
It is important to note that the Tribunal did not determine that a foreign court order regarding disclosure could neveradvance the purposes of the Act. So, in what circumstances could such an order be seen to advance the general purposes set out in section 1.1 of the Act? The Tribunal has already provided a partial answer to this question in Hamlin. Depending on the specific circumstances of the case, where disclosure in foreign proceedings aligns with the public interest under section 11 of the Act, disclosure might be permitted.
Confidentiality is a continuing requirement
As we noted in our prior article on the Tribunal’s interim decision in Katanga, non-disclosure obligations arising from an OSC investigation are ongoing. The Tribunal in Katanga considered that the age of the investigation and settlement agreement was not a factor that held sway, finding once again that the Tribunal and supervising courts have long recognized that confidentiality under section 16 does not lapse when an investigation concludes.
Compelled testimony considerations
The Tribunal clearly found it persuasive that two of the individuals whose compelled testimony was included in the Confidential Documents earmarked for disclosure in the UK litigation advised the Tribunal that disclosure was contrary to their expectations, and a third witness advised that they objected to the release of their testimony. Underscoring its view of the importance surrounding maintaining the confidentiality of compelled evidence, the Tribunal reached back to a 1983 utterance from a Commission chair, cited in Couglan, Re, [2000] OJ No. 5109 (Div Ct), stating: “The effective functioning of the Commission depends upon the reliance which parties affected by its operations can place upon the confidentiality of the Commission’s administrative proceedings.”
FUTURE CONSIDERATIONS
The Tribunal’s parting message in Katanga is stark: “It is not in the public interest that compelled information be transformed into a litigation resource serving the procedural needs of external proceedings.” (para. 47, Katanga). We can therefore expect that the Tribunal will scrutinise similar requests in the future through an especially narrow lens.
Parties subject to confidential investigations by the OSC need to be aware of the reality that confidential documents and information may be highly sought after, following any publicly available settlement agreement being published, by adverse parties in subsequent foreign securities civil actions and could potentially be requested by those parties in such proceedings.
The Tribunal has helpfully recognized in Katanga a common sense method by which a party’s internal, and now external, counsel is afforded the opportunity to determine the relevance of confidential information and/or documentation to any foreign proceeding before any disclosure to an adverse party is considered, or takes place. Nonetheless, the Tribunal will consider relief on a case-by-case basis.
An application under section 17(1) of the Act is the appropriate means by which a party may seek approval for disclosure of confidential information/documents sought in foreign proceedings. The Tribunal in Katanga has helpfully clarified the correct procedure when parties are faced with such a scenario, and the Tribunal has re-emphasized that it is the sole gatekeeper of such applications.
