Patricia McLean
served as a director of Hucamp Mines Ltd., a reporting issuer registered in
Ontario under the Ontario Securities Act, from March of 1996
to June of 2001. Beginning in July of 2001, McLean began cooperating with the
Ontario Securities Commission ("OSC") in respect of certain
possible improper actions at Hucamp. Although the OSC announced in July of 2005
that it would hold a hearing under its public interest powers to sanction McLean
and others for their alleged misconduct at Hucamp, McLean did not enter into a
settlement agreement with the OSC until September 8, 2008. In the settlement
agreement, McLean consented to the making of an order against her which barred
her for 5 years from trading in securities, with some exceptions, and banned her for 10
years from acting as an officer or director of certain entities registered under
the Ontario Securities Act.
It was not until 15
months latter - January 14, 2010 - that the executive director of the British Columbia
Securities Commission notified McLean that he was applying to that commission
for a "public interest" order against her in British Columbia. The BC
Commission relied on McLean's settlement agreement with the OSC in bringing the
proceeding. However, section 159 of the BC Securities
Act provides that all proceedings under that Act "must not be
commenced more than 6 years after the date of the events that gave rise to the
proceedings". The BC Commission issued an order adopting the same
prohibitions that were set out in the OSC's order. In doing so, it interpreted
that "the event" that had triggered the 6 year limitation period was McLean's
entering into a settlement agreement with the OSC and not the misconduct that
occurred in 2001 or earlier. The BC Court of Appeal applied a correctness
standard of review and upheld the commissions implied
decision.
McLean appealed to the Supreme Court of Canada. The court dismissed her
appeal.
Justice Moldaver,
writing for the majority of the court, held that that issue before the court was whether "the
event" that triggered the 6 year limitation period, was the underlying
misconduct that gave rise to McLean's settlement agreement with the OSC or the settlement
agreement itself.
Justice Moldaver found that in reviewing the ordinary
meaning, the context and the purpose of the relevant provisions of the BC
Securities Act, the Commission's conclusion that
the event giving rise to the proceeding was McLean's settlement agreement was
reasonably supported.
He further held that
the appropriate standard of review of the Commission's decision was
"reasonableness", not correctness as the BC Court of Appeal had held. Justice Moldaver held that both parties, i.e. the Commission and McLean, had proposed
reasonable interpretations of the British Columbia Securities Act.
However, under the reasonableness review, the courts will defer to any reasonable
interpretation adopted by an administrative decision maker, even if other
reasonable interpretations may exist. Because the Commission'`s interpretation
was not shown to be an unreasonable one, there was no basis to interfere on
judicial review.
Justice Moldaver
held that the modern approach to judicial review recognizes that courts may not
be as qualified as an administrative tribunal to interpret that tribunal's home
statute. In particular, the resolution of unclear language in a home statute is
usually best left to the administrative tribunal because the tribunal is
presumed to be in the best position to weigh the policy considerations often
involved in choosing between multiple reasonable interpretations of such
language.
Allowing secondary
jurisdictions (British Columbia in this case) to wait until the conclusion of a primary proceeding (the OSC proceeding) obviates the
need for parallel and duplicative proceedings that will overburden securities
commissions and the targets of proceedings. The Commission's interpretation of
its statute therefore furthered the legislative goal of improving
inter-jurisdictional cooperation between provinces and
territories.
Finally, Justice
Moldaver found that although the Commission's interpretation significantly
extended the duration of time for which a person might be subject to regulatory
action, of itself, that was not offensive to the purpose of limitation periods.
Limitation periods are always driven by policy choices in an attempt to balance
the interests of the parties. The Commission's interpretation struck a
reasonable balance between facilitation of inter-provincial cooperation and the
underlying purposes of limitation periods.
Regards,
Blair
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