Ruling acknowledges lower privacy expectations for production orders in regulatory context
The Ontario Court of Appeal determined that a summons issued by an Ontario Securities Commission (OSC) investigator to Binance Holdings Limited contravened the right against unreasonable searches or seizures under s. 8 of the Canadian Charter of Rights and Freedoms.
Binance – the appellant in Binance Holdings Limited v. Ontario Securities Commission, 2025 ONCA 751 – was a Cayman Islands corporation that ran an online crypto asset trading platform accessible to thousands of Ontarian investors.
The OSC, as the respondent in this case, began investigating whether Binance’s business in Ontario breached Ontario’s Securities Act, 1990.
The OSC-appointed investigator issued a wide-ranging summons compelling Binance to produce documents and potentially provide interrogatory responses regarding its operations. Binance challenged the summons as unconstitutional for being overbroad.
The Capital Markets Tribunal, the Ontario Divisional Court, and the OSC all refused to resolve the merits of Binance’s argument assailing the constitutional validity of the summons.
Binance appealed from the Divisional Court order dated Sept. 28, 2023, and the OSC order dated Apr. 30, 2024.
Summons set aside
The Ontario Court of Appeal partly allowed Binance’s appeal, set aside the summons without prejudice to the investigator providing a Charter-compliant version, and ordered the OSC to return documents seized under the invalid summons.
The appeal court awarded Binance $15,000 in collective costs of the appeal and the motion for leave to appeal, including the applicable taxes and disbursements, as agreed.
The appeal court ruled that the summons breached s. 8 of the Charter because it authorized an unreasonable search and asked Binance to produce documents that the OSC had no grounds to believe might be relevant to its investigation.
First, the appeal court rejected Binance’s argument that the OSC had jurisdiction under s. 144(1) of the Securities Act to vary or revoke the appointed investigator’s decision to issue a summons under s. 13 of the Securities Act. The appeal court said the s.144(1) jurisdiction did not arise, as this did not involve an OSC decision, as required.
Second, the appeal court saw no error in the Divisional Court’s Sept. 28, 2023 decision declining to set aside the June 26, 2023 decision of Justice Janet Leiper of the Divisional Court, which refused to stay the summons pending the Divisional Court decision on judicial review.
Rejecting Binance’s contention, the appeal court found no error in Justice Leiper’s rejection of or failure to consider Binance’s claimed constitutional right to a review of the summons before compliance.
Third, the appeal court agreed with Binance that the Divisional Court, which had jurisdiction to judicially review the investigator’s decision to issue a summons under s. 13 of the Securities Act, erred in exercising its discretion to decline to judicially review Binance’s Charter arguments.
Fourth, the appeal court agreed with Binance that this was a suitable case to address the ’ constitutional validity of the summons, even though the prior decisions did not rule upon the Charter arguments.
The appeal court deemed it inappropriate to edit the summons or permit the OSC to keep the documents in its possession until it could provide a Charter-compliant summons, which would enable the regulator to review the documents and compromise Binance’s privacy expectations.
Privacy considerations
The Court of Appeal for Ontario determined that the production of business documents compelled under the securities regulator’s summons engaged Binance’s s. 8 Charter rights.
The appeal court acknowledged Binance’s modest but reasonable privacy expectations in business records seized under the regulator’s production order. The appeal court recognized the lower privacy expectations in the regulatory context, particularly for production orders for documents, which were far less intrusive than searches and seizures conducted directly by state agents.
However, the appeal court emphasized that Binance still had privacy expectations. The appeal court added that fair and reasonable terms should limit the scope of the regulator’s production order over the documents and information sought, pursuant to s. 8 of the Charter.
The appeal court rejected Binance’s bald assertion that it had heightened reasonable privacy expectations because the demand in the summons covered chats and texts on social media platforms, which could include personal messages.
The appeal court acknowledged the higher reasonable privacy expectations in personal documents. However, the appeal court held that Binance did nothing to establish any personal messages sent or received.
The appeal court agreed with the OSC that a regulated party could not increase the intensity of its privacy expectations in its business platforms by permitting their use for personal purposes.
