SUPREME COURT OF
CANADA
Between:
Patricia McLean
Appellant
and
Executive Director
of the British Columbia Securities Commission
Respondent
- and -
Financial Advisors
Association of Canada and Ontario Securities Commission
Interveners
Coram:
LeBel, Fish, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.
Reasons for
Judgment:
(paras. 1 to 73)
Concurring
Reasons:
(paras. 74 to 82)
|
Moldaver J. (LeBel, Fish, Rothstein, Cromwell and Wagner
JJ. concurring)
Karakatsanis J.
|
McLean v.
British Columbia (Securities Commission), 2013 SCC 67, [2013] 3
S.C.R. 895
Patricia McLean Appellant
v.
Executive
Director of the British Columbia Securities
Commission Respondent
and
Financial
Advisors Association of Canada and
Ontario Securities Commission Interveners
Indexed as: McLean v. British Columbia (Securities Commission)
2013 SCC 67
File
No.: 34593.
2013: March 21;
2013: December 5.
Present:
LeBel, Fish, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.
on
appeal from the court of appeal for british columbia
Administrative law
— Securities — Standard of review — Limitation of actions — Appellant entering
into settlement agreement with Ontario Securities Commission in respect to
certain possible improper actions — B.C. Securities Commission initiating
secondary proceedings based on settlement agreement — B.C. Securities Act
establishing limitation period of six years from date of “events” giving rise
to proceedings — Whether “events” triggering six‑year limitation period
are the underlying misconduct giving rise to the settlement agreement, or the
settlement agreement itself — Whether the standard of review of the Commission’s
decision should be correctness or reasonableness — Having regard to the
standard of review, whether there is any basis to interfere with the Commission’s
interpretation — Securities Act, R.S.B.C. 1996, c. 418, ss. 159,
161(6)(d).
On September 8,
2008, M entered into a settlement agreement with the Ontario Securities
Commission in respect to misconduct that occurred in Ontario, in 2001 or
earlier. The Ontario Securities Commission issued an order in the public
interest barring her from trading in securities for five years and banning her
from acting as an officer or director of certain entities registered in Ontario
for 10 years. On January 14, 2010, the respondent notified M that he
was applying to the British Columbia Securities Commission for a public
interest order against her based on s. 161(6)(d) of the Securities Act,
R.S.B.C. 1996, c. 418. Section 161(6)(d) empowers the Commission to
bring proceedings in the public interest against persons who have agreed with
another jurisdiction’s securities regulator, by way of a settlement agreement,
to be subject to regulatory action. Section 159 of the Securities Act
sets out that all proceedings under the Act “must not be commenced more than 6
years after the date of the events that give rise to the proceedings”. The
Commission issued a reciprocal order adopting the same prohibitions as are set
out in the Ontario Securities Commission’s order. In doing so, the Commission
implicitly interpreted s. 159, as it applies to s. 161(6)(d), such
that “the event” that triggered the six‑year limitation period was M’s
entering into a settlement agreement and not the misconduct that occurred in
2001 or earlier. The Court of Appeal applied a correctness standard of review
and upheld the Commission’s implied decision that “the event” that gave rise to
the proceedings in British Columbia under s. 161(6)(d) was the agreement
in Ontario.
Held:
The appeal should be dismissed
Per LeBel,
Fish, Rothstein, Cromwell, Moldaver and Wagner JJ.: The question
presented is whether, for purposes of s. 161(6)(d), “the events” that
trigger the six‑year limitation period in s. 159 are (i) the
underlying misconduct that gave rise to the settlement agreement or (ii) the
settlement agreement itself. A review of the
ordinary meaning, the context, and the purpose of both ss. 159 and 161(6) of
the Securities Act reasonably
supports the Commission’s conclusion that the event giving rise to a
proceeding under s. 161(6)(d) is the fact of having agreed with a
securities regulatory authority to be subject to regulatory action. The
appropriate standard of review is reasonableness. Both parties proposed
reasonable interpretations of s. 159 of the Securities Act, as it
applies to s. 161(6)(d). However, under
reasonableness review, courts defer to any reasonable interpretation adopted by
an administrative decision maker, even if other reasonable interpretations may
exist. Because the Commission’s interpretation has not been shown to be an
unreasonable one, there is no basis to interfere on judicial review.
The Court of Appeal
erred by applying a correctness standard of review. It is presumed that courts will defer to an administrative decision maker
interpreting its own statute or statutes closely connected to its function. This
presumption is not rebutted in this case. Nor does the question fall
within any exceptional category that warrants a
correctness standard. Although limitation periods generally are of
central importance to the fair administration of justice, the issue here is
statutory interpretation in a particular context within the Commission’s specialized
area of expertise. The possibility that other provincial securities
commissions may arrive at different interpretations of similar statutory
limitation periods is a function of the Constitution’s federalist structure and
does not provide a basis for a correctness review. Finally, and most
significantly, 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.
The Commission’s
interpretation of the limitations period here is reasonable. The ordinary
meaning of “the events” in s. 159 that give rise to a proceeding under s. 161(6)(d)
is the fact of having agreed with a securities regulatory authority to be subject
to regulatory action. Although s. 159 predates s. 161(6), and
originally limitation periods were understood to run from the date of the
underlying misconduct, that drafting history is not dispositive. The phrase
“the events” is deliberately open‑ended and applicable to a variety of
contexts. As applied to s. 161(6)(d), it can mean the date the person
“has agreed with a securities regulatory authority”. Finally, allowing secondary
jurisdictions to wait until the conclusion of a primary proceeding
obviates the need for parallel and duplicative proceedings that will overburden
securities commissions and the targets of proceedings. The Commission’s
interpretation thus furthers the legislative goal of improving
interjurisdictional cooperation between provinces and territories.
Although the
Commission’s interpretation significantly extends the duration of time for
which a person may be subject to regulatory action, of itself, that is not
offensive to the purpose of limitation periods. Limitation periods are always
driven by policy choices that attempt to balance the interests of the parties.
The Commission’s interpretation strikes a reasonable balance between
facilitation of interprovincial cooperation and the underlying purposes of
limitation periods.
Per
Karakatsanis J.: The Commission was reasonable in interpreting s. 159
to require that secondary proceedings under s. 161(6) must be initiated
within six years of a person being sanctioned in another jurisdiction. However,
the opposite interpretation — that the limitation period runs from the time of
the underlying misconduct — is not reasonable. Such an interpretation would
require duplicative proceedings in cases, like this one, where an investigation
in another jurisdiction does not conclude within six years of the underlying
misconduct. It is inconsistent with the legislative objective of facilitating
interjurisdictional cooperation and it is at odds with a purposive interpretation.
Consequently, it would not have been open to the Commission to interpret the
limitations period as the appellant urges.
Cases Cited
By Moldaver J.
Distinguished:
Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers
of Canada, 2012 SCC 35, [2012] 2 S.C.R. 283; referred to: Committee
for the Equal Treatment of Asbestos Minority Shareholders v. Ontario
(Securities Commission), 2001 SCC 37, [2001] 2 S.C.R. 132; McLean (Re),
2008 LNONOSC 660, 31 O.S.C.B. 8734; Heidary (Re), 2000 LNONOSC 79, 23
O.S.C.B. 959; Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190;
Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R.
557; Dr. Q v. College of Physicians and Surgeons of British Columbia,
2003 SCC 19, [2003] 1 S.C.R. 226; Alberta
(Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654; City of
Arlington, Texas v. Federal Communications Commission, 133 S. Ct. 1863
(2013); Canada (Canadian Human Rights Commission) v. Canada (Attorney
General), 2011 SCC 53, [2011] 3 S.C.R. 471; Nor‑Man Regional Health Authority Inc. v. Manitoba Association of
Health Care Professionals, 2011 SCC
59, [2011] 3 S.C.R. 616; Communications, Energy and Paperworkers Union of
Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34, [2013] 2
S.C.R. 458; British Columbia Securities Commission v. Bapty,
2006 BCSC 638 (CanLII); National Corn Growers Assn. v. Canada (Import
Tribunal), [1990] 2 S.C.R. 1324; Council of Canadians with Disabilities
v. VIA Rail Canada Inc., 2007 SCC 15, [2007] 1 S.C.R. 650; Construction
Labour Relations v. Driver Iron Inc., 2012 SCC 65, [2012] 3 S.C.R. 405; Woods
(Re), 1997 LNBCSC 11 (QL); Seto (Re), 2006 BCSECCOM 569 (CanLII); Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559; Canada
(Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339; Canadian
Pacific Air Lines Ltd. v. Canadian Air Line Pilots Assn., [1993] 3 S.C.R.
724; ATCO Gas and Pipelines Ltd. v. Alberta (Energy and Utilities Board),
2006 SCC 4, [2006] 1 S.C.R. 140; Montréal (City) v. 2952‑1366 Québec
Inc., 2005 SCC 62, [2005] 3 S.C.R. 141; Dennis (Re), 2005 BCSECCOM
65, 2004 LNBCSC 705 (QL); Perka v. The Queen, [1984] 2 S.C.R. 232; Global
Securities Corp. v. British Columbia (Securities Commission), 2000 SCC
21, [2000] 1 S.C.R. 494; Novak v. Bond, [1999] 1 S.C.R. 808; Friedland
(Re), 2010 BCSECCOM 654 (CanLII); Nielsen (Re), 2013 LNONOSC 254, 36
O.S.C.B. 3478; Robinson (Re), 2013 LNABASC 295, 2013 ABASC 317 (CanLII);
Maitland Capital Ltd. (Re), 2012 LNONOSC 95, 35 O.S.C.B. 1729; M. (K.)
v. M. (H.), [1992] 3 S.C.R. 6; Cholmondeley v. Clinton (1820), 2
Jac. & W. 1, 37 E.R. 527; Lines v.
British Columbia (Securities Commission), 2012 BCCA 316, 35 B.C.L.R. (5th) 281; Roncarelli v. Duplessis,
[1959] S.C.R. 121; Manitoba Metis Federation
Inc. v. Canada (Attorney General),
2013 SCC 14, [2013] 1 S.C.R. 623; Murphy v. Welsh, [1993] 2 S.C.R. 1069;
Agraira v. Canada (Public Safety and Emergency Preparedness),
2013 SCC 36, [2013] 2 S.C.R. 559.
By Karakatsanis J.
Referred
to: Global Securities Corp. v. British Columbia (Securities
Commission), 2000 SCC 21, [2000] 1 S.C.R. 494; Reference re Securities
Act, 2011 SCC 66, [2011] 3 S.C.R. 837.
Statutes and Regulations Cited
Bill
20, Securities Amendment Act, 2006, 2nd Sess., 38th Parl., British Columbia
(Third reading, April 25, 2006).
Bill
28, Securities Amendment Act, 2007, 3rd Sess., 38th Parl., British Columbia
(Third reading, October 23, 2007).
Securities
Act, C.C.S.M., c. S50, ss. 137, 148.4(1).
Securities
Act, R.S.A. 2000, c. S‑4, s. 198(1.1).
Securities
Act, R.S.B.C. 1996, c. 418, ss. 127, 127.1, 140(a), 140.94, 159,
161(1), (6).
Securities
Act, R.S.N.L. 1990, c. S‑13, ss. 127(1.1), 129.
Securities
Act, R.S.N.S. 1989, c. 418, s. 134(1A).
Securities
Act, R.S.O. 1990, c. S.5, s. 127(10).
Securities
Act, R.S.P.E.I. 1988, c. S‑3.1, s. 60(3).
Securities
Act, S.N.B. 2004, c. S‑5.5, s. 184(1.1).
Securities
Act, S.Nu. 2008, c. 12, s. 60(3).
Securities
Act, S.N.W.T. 2008, c. 10, s. 60(3).
Securities
Act, S.Y. 2007, c. 16, s. 60(3).
Securities
Act, 1988, S.S. 1988‑89, c. S‑42.2, s. 134(1.1).
Securities
Amendment Act, 2006, S.B.C. 2006, c. 32.
Authors Cited
Canada. A Provincial/Territorial Memorandum of
Understanding Regarding Securities Regulation, 2004 (online: http://www.securitiescanada.org/2004_0930_mou_english.pdf).
Côté, Pierre-André,
in collaboration with Stéphane Beaulac and Mathieu Devinat. The
Interpretation of Legislation in Canada, 4th ed. Toronto: Carswell, 2011.
Driedger,
Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths,
1983.
Sullivan,
Ruth. Sullivan on the Construction of Statutes, 5th ed. Markham,
Ont.: LexisNexis, 2008.
Teplitsky,
Martin. “Standard of review of administrative adjudication: ‘What a tangled
web we weave . . .’” (2013), Advocates’ Soc. J. 3.
Willis,
John. “Statute Interpretation in a Nutshell” (1938), 16 Can. Bar Rev.
1.
APPEAL
from a judgment of the British Columbia Court of Appeal (Saunders,
Chiasson and Neilson JJ.A.), 2011 BCCA 455, 312 B.C.A.C. 288, 531 W.A.C.
288, 343 D.L.R. (4th) 432, [2011] B.C.J. No. 2124 (QL), 2011 CarswellBC
2929, allowing an appeal from a decision by the British Columbia Securities
Commission, 2010 BCSECCOM 262, 2010 LNBCSC 222 (QL). Appeal dismissed.
Christopher H.
Wirth and Fredrick Schumann, for the appellant.
Stephen M.
Zolnay, for the respondent.
Lou
Brzezinski and John Polyzogopoulos, for the intervener the Financial
Advisors Association of Canada.
Johanna M.
Superina and Usman M. Sheikh, for the intervener the Ontario
Securities Commission.
The judgment of LeBel, Fish,
Rothstein, Cromwell, Moldaver and Wagner JJ. was delivered by
Moldaver J. —
I. Introduction
[1]
In Canada, the individual provinces and
territories bear primary responsibility for the regulation of stocks, bonds,
and other securities. However, because modern securities markets transcend
provincial and territorial borders, the provinces and territories have in
recent years taken steps to harmonize their securities laws and to improve
cooperation between their securities regulators.
[2]
As a result of these efforts, the British
Columbia Securities Commission (the “Commission”), like all of its provincial and
territorial peers, has been empowered to bring proceedings in the public
interest against persons who, among other things, have agreed with
another jurisdiction’s securities regulator, by way of a settlement agreement,
to be subject to regulatory action; see s. 161(6)(d) of the Securities Act, R.S.B.C. 1996, c.
418. In the jargon of the industry, these proceedings
are known as “secondary proceedings” because they piggy-back on another
jurisdiction’s efforts. Subject to a few exceptions, all proceedings under the
Act — secondary or otherwise — “must not be commenced more than 6 years
after the date of the events that give rise to the proceedings” (s. 159).
[3]
At issue in this appeal is whether, for purposes
of s. 161(6)(d), “the events” that trigger the six-year limitation period in s.
159 are (i) the underlying misconduct that gave rise to the settlement
agreement or (ii) the settlement agreement itself. The Commission takes the
position that the settlement agreement is the triggering event. On that basis,
it commenced secondary proceedings against the appellant after she entered into
a settlement agreement with another regulator, even though the underlying
misconduct referred to in that agreement occurred roughly nine years earlier.
Had the Commission adopted the alternative interpretation, as the appellant
argues it should have, the secondary proceeding would have been commenced
outside the six-year limitation period and thus been statute-barred.
[4]
Applying the governing standard of review, which
I consider to be reasonableness, I am satisfied that the Commission’s
interpretation is a reasonable construction of the relevant statutory
language. Significantly, the Commission’s conclusion supports the legislative
objective of facilitating interjurisdictional cooperation in secondary
proceedings and does so without undercutting the crucial role of limitation
periods. Accordingly, I see no reason to interfere and would dismiss the
appeal.
II. Facts
A. The Primary Investigation and The Settlement Agreement
[5]
The facts are straightforward and undisputed.
From March 1996 to June 2001, the appellant, Patricia McLean, served as a director
of Hucamp Mines Ltd., a reporting issuer registered in Ontario under the Securities
Act, R.S.O. 1990, c. S.5. Beginning in July 2001, the appellant began
cooperating with the Ontario Securities Commission (“OSC”) in respect of
“certain possible improper actions at Hucamp” (Settlement Agreement Between OSC
Staff and Patricia McLean, at para. 63 (A.R., at p. 45)). The particulars of
the alleged misconduct are not relevant, but the timing is — the allegations
pertain to conduct that occurred in 2001 or earlier.
[6]
On July 11, 2005, the OSC announced that it
would hold a hearing under its public interest powers to sanction the appellant
and certain others for their alleged misconduct at Hucamp; see Securities
Act, ss. 127 and 127.1. Such powers, which exist in each of the provincial
and territorial statutes, confer a “very wide discretion” to make whatever
orders the OSC considers to be in the public interest (Committee for the
Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities
Commission), 2001 SCC 37, [2001] 2 S.C.R. 132, at para. 39).
[7]
Three years later, on September 8, 2008, the
appellant entered into a settlement agreement with the OSC staff wherein she
“consent[ed] to the making of [such] an order against her” (Settlement
Agreement, at para. 2 (A.R., at p. 33)). On the same day, the OSC approved the
settlement agreement and issued the agreed-upon order (McLean (Re), 2008
LNONOSC 660, 31 O.S.C.B. 8734).
[8]
In its pertinent parts, the OSC order barred the
appellant for five years from trading in securities (with some exceptions) and
banned her for ten years from acting as an officer or director of certain
entities registered under the Ontario Securities Act. By virtue of the OSC’s
provincial jurisdiction, the reach of these sanctions did not extend beyond
Ontario’s borders. No one challenges the propriety of the OSC’s order.
B. The Secondary
Investigation and the B.C. Order
[9]
All was quiet for the next 15 months — until
January 14, 2010 to be exact — when the appellant was notified by the Executive
Director of the B.C. Securities Commission (the respondent) that he was
applying to the Commission under s. 161(1) of the Act for a “public
interest” order against her based on s. 161(6)(d). For present purposes, the
relevant aspects of those provisions are as follows:
159 [Limitation Period] Proceedings
under this Act, other than an action referred to in section 140, must not be
commenced more than 6 years after the date of the events that give rise
to the proceedings.
. . .
161 (1) [Enforcement Orders] If
the commission or the executive director considers it to be in the public
interest, the commission or the executive director, after a hearing, may
order one or more of the following:
. . .
(b) that
. . .
(ii) the person or persons named in the order, . .
.
. . .
cease trading in, or be prohibited from purchasing, any securities or exchange contracts, a specified security or exchange contract or
a specified class of securities or class of exchange contracts;
. . .
(d) that a person
(i) resign any position that the person holds as a
director or officer of an issuer or registrant,
(ii) is prohibited from becoming or acting as a
director or officer of any issuer or registrant,
. . .
(6) The commission or the executive director may,
after providing an opportunity to be heard, make an order under subsection
(1) in respect of a person if the person
(a) has been convicted in Canada or elsewhere of an
offence
(i) arising from a transaction, business or course of
conduct related to securities or exchange contracts, or
(ii) under the laws of the jurisdiction respecting
trading in securities or exchange contracts,
(b) has been found by a court in Canada or elsewhere to
have contravened the laws of the jurisdiction respecting trading in securities
or exchange contracts,
(c) is subject to an order made by a securities
regulatory authority, a self regulatory body or an exchange, in Canada or
elsewhere, imposing sanctions, conditions, restrictions or requirements on the
person, or
(d) has agreed with a securities regulatory authority,
a self regulatory body or an exchange, in Canada or elsewhere, to be subject
to sanctions, conditions, restrictions or requirements.
[10]
In asserting that it had authority to make an
order under s. 161(1) based on s. 161(6)(d), the Commission relied on the
appellant’s settlement agreement with the OSC. And thus began the present
case.
[11]
There is no dispute that had the Commission
proceeded solely under s. 161(1), the proceeding would have run
afoul of s. 159. The respondent accepts that the six-year limitation period in
s. 159 as applied to s. 161(1) alone begins to run from “the last event in the
series of events which form the course of conduct” sanctioned by the order
(R.F., at para. 79, citing Heidary (Re), 2000 LNONOSC 79, 23 O.S.C.B.
959, at p. 961). By January 2010, it had been almost nine years since the last
event described in the settlement agreement.
[12]
The question in this case is whether the same
conclusion holds true for secondary proceedings initiated using s. 161(6)(d).
If it does, as the appellant contends, the Commission’s order must be set aside
for the same reason that an order based on s. 161(1) alone would be — it had
been almost nine years after the last event described in the settlement
agreement and three years beyond the requisite limitation period. If, however,
the clock under s. 161(6)(d) starts running on the date of the settlement
agreement referred to in that provision, as the Commission concluded, the
Commission’s order must stand because the proceeding was commenced well within
the six-year window prescribed by s. 159.
III. Proceedings Below
A. British Columbia Securities Commission, 2010 BCSECCOM 262
(CanLII)
[13]
After receiving notice of the secondary
proceeding, the appellant “made extensive written submissions on the limitation
period issue” to the Commission arguing that it lacked authority to make an
order against her by virtue of s. 159 (A.F., at para. 10). She raised no other
issues or arguments.
[14]
The Commission implicitly rejected the
appellant’s limitations argument by issuing what it termed a “reciprocal order”
that was substantially identical to the OSC order. In particular, the
Commission barred the appellant from trading in securities under s. 161(1)(b)
(except for those trades permitted under the OSC order) and prohibited her from
acting as an officer or director of certain entities registered under the Act
under s. 161(1)(d)(i) and (ii). The prohibitions expired on the same day
as the OSC order — that is, five years and ten years, respectively, from
September 8, 2008.
[15]
As a consequence of the twin orders from the
Ontario and B.C. Commissions, the appellant was prohibited from engaging in
substantially identical conduct in both Ontario and British Columbia for identical
periods of time.
B. British Columbia Court of Appeal, 2011 BCCA 455, 312
B.C.A.C. 288
[16]
On appeal, the appellant reiterated her
limitations argument. The B.C. Court of Appeal concluded that “generally the
interpretation of a limitation period provision in a statute by an
administrative tribunal will engage the standard of correctness” (para. 15).
Applying that standard, it nonetheless found in favour of the Commission. On a
“plain reading”, the court concluded that “although the acts which gave rise to
the Ontario proceedings obviously occurred before the agreement was made, the
event that gave rise to the [B.C.] proceedings under s. 161(6)(d) was the
agreement in Ontario” (para. 20). The interpretation put forward by the
appellant “would eliminate the effective operation of s. 161(6)(d) which cannot
have been the intention of the Legislature” (ibid.).
[17]
The appellant also challenged the Commission’s
failure to give reasons for its order, both as to the limitation period and as
to why the order was in the public interest. As regards the limitation
argument, the court held that “although it might have been of assistance” had
the Commission given reasons for its interpretation of s. 159, reasons
were not essential because the question was one of law reviewable on a standard
of correctness (para. 27). With respect to the order being in the public
interest, the court concluded that “the complete absence of reasons makes
appellate review of the public interest aspect of the decision and the sanctions
imposed impossible” (para. 30). Hence, the court remitted the matter to the
Commission for a “brief explanation” (para. 31). The Commission subsequently
provided such an explanation (2012 BCSECCOM 50 (CanLII)), and that aspect of
its decision is not challenged before this Court.
IV. Issues
[18]
At issue in this appeal is the proper
interpretation of the limitation period in s. 159 as it relates to public
interest orders made under s. 161(6)(d) of the Act. The following two questions arise:
(1) What is the standard of review
for the Commission’s interpretation of s. 159 as it applies to s. 161(6)(d)?
(2) Having regard to the applicable
standard of review, is there any basis to interfere with the Commission’s
interpretation?
V. Analysis
A. Standard of Review
(1) The Presumption of Reasonableness
Review for Home Statutes
[19]
As noted, the Court of Appeal was of the view
that the standard of review was correctness. Before this Court, the parties
and the intervener, the OSC, disagreed on that issue. For the reasons that
follow, I am satisfied that the standard of review is reasonableness.
[20]
Before turning to my analysis, I pause to note
that the standard of review debate is one that generates strong opinions on all
sides, especially in the recent jurisprudence of this Court. However, the
analysis that follows is based on this Court’s existing jurisprudence — and it
is designed to bring a measure of predictability and clarity to that framework.
[21]
Since Dunsmuir v. New Brunswick, 2008
SCC 9, [2008] 1 S.C.R. 190, this Court has repeatedly underscored that “[d]eference will usually result where a
tribunal is interpreting its own statute or statutes closely connected to its
function, with which it will have particular familiarity” (para. 54). Recently, in an
attempt to further simplify matters, this Court held that an administrative
decision maker’s interpretation of its home or closely-connected statutes
“should be presumed to be a question of statutory interpretation subject to
deference on judicial review” (Alberta (Information and Privacy
Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3
S.C.R. 654, at para. 34).
[22]
The presumption
endorsed in Alberta Teachers, however, is not carved in stone. First,
this Court has long recognized that certain categories of questions — even when
they involve the interpretation of a home statute — warrant review on a
correctness standard (Dunsmuir, at paras. 58-61). Second, we have also
said that a contextual analysis may “rebut the presumption of reasonableness
review for questions involving the interpretation of the home statute” (Rogers Communications Inc. v. Society of Composers, Authors and
Music Publishers of Canada, 2012 SCC 35, [2012] 2
S.C.R. 283, at para. 16). The appellant follows both these routes in urging us
to accept a correctness standard. I propose to deal with her second argument
first as it can be dispensed with quickly.
(2) The Presumption of Reasonableness
Review Is Not Rebutted
[23]
The appellant contends that the presumption of
reasonableness review has been rebutted. She relies on our recent decision in Rogers,
where we held that a correctness standard was appropriate because of a
statutory scheme under which both an administrative tribunal and the courts had
concurrent jurisdiction at first instance in interpreting the relevant
statute.
[24]
This case is different. As Rothstein J. made
clear in Rogers, it was the fact that both the tribunal and the courts
“may each have [had] to consider the same legal question at first
instance” that “rebutt[ed] the presumption of reasonableness review” (para. 15
(emphasis added)). Here, the legal question is the interpretation of s. 159 as
it applies to s. 161(6)(d) — and it is solely the Commission that
is tasked with considering that matter in the first instance. Accordingly,
there is no possibility of conflicting interpretations with respect to the
question actually at issue. The logic of Rogers is thus inapplicable.
(3) The Question Does Not Fall Into an
Exceptional Category
[25]
I return then to the appellant’s first argument
— that the question presented falls into an exceptional category warranting
“correctness” review. Post-Dunsmuir, it has become fashionable for
counsel to argue that the question before an administrative decision maker
falls into one of the few recognized exceptional categories. One wave of cases
focuses on whether the question raised is a “true” question of vires or
jurisdiction; see Alberta Teachers, at paras. 37-38 (citing various
cases). In that case, the Court expressed serious reservations about whether
such questions can be distinguished as a separate category of questions of law,
but ultimately left the door open to the possibility (para. 34).
[26]
A second wave — the one which the appellant now
rides — focuses on “general
questions of law that are both of central importance to the legal system as a
whole and outside the adjudicator’s specialized area of expertise” (Canada (Canadian Human Rights Commission) v. Canada (Attorney
General), 2011 SCC 53, [2011] 3 S.C.R. 471 (“Mowat”),
at para. 22, referring to Dunsmuir, at para. 60); see also Nor-Man Regional Health Authority Inc. v.
Manitoba Association of Health Care Professionals, 2011 SCC 59, [2011] 3 S.C.R. 616; Communications,
Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd.,
2013 SCC 34, [2013] 2 S.C.R. 458. In each of these cases, this Court
unanimously found that the question presented did not fall into this
exceptional category — and I would do so again here.
[27]
The logic underlying the “general question”
exception is simple. As Bastarache and LeBel JJ. explained in Dunsmuir,
“[b]ecause of their impact on the administration of justice as a whole, such
questions require uniform and consistent answers” (para. 60). Or, as LeBel and
Cromwell JJ. put it in Mowat, correctness review for such questions “safeguard[s] a basic consistency in the
fundamental legal order of our country” (para. 22).
[28]
Here, the appellant’s arguments in support of
her contention that this case falls into the general question category fail for
three reasons. First, although I agree that limitation periods, as a
conceptual matter, are generally of central importance to the fair
administration of justice, it does not follow that the Commission’s
interpretation of this limitation period must be reviewed for its
correctness. The meaning of “the events” in s. 159 is a nuts-and-bolts
question of statutory interpretation confined to a particular context. Indeed,
the arguably complex legal doctrines such as discoverability that the appellant
says demand correctness review (see A.R.F., at para. 9) have been
specifically excluded from any application to s. 159. The
appellant recognizes this fact elsewhere in her submissions (A.F., at para. 25,
citing British Columbia Securities Commission v. Bapty, 2006 BCSC 638
(CanLII), at para. 28). Accordingly, there is no question of law of central
importance to the legal system as a whole, let alone one that falls outside the
Commission’s specialized area of expertise.
[29]
Second, while it is true that reasonableness
review in this context necessarily entails the possibility that other
provincial and territorial securities commissions may arrive at different
interpretations of their own statutory limitation periods, I cannot agree that
such a result provides a basis for correctness review — and thus judicially mandated
“consisten[cy] . . . across the country” (A.R.F., at para. 13). No one
disputes that each of the provincial and territorial legislatures can enact
entirely different limitation periods. Indeed, one of them has; see Manitoba’s
Securities Act, C.C.S.M., c. S50, s. 137 (providing an eight-year
period, instead of the six-year norm). By the same token, it may be the case
that provincial and territorial securities regulators come to differing (but
nonetheless reasonable) interpretations of those limitation periods (though
that has yet to occur). If there is a problem with such a hypothetical
outcome, it is a function of our Constitution’s federalist structure — not the
administrative law standards of review.
[30]
Third, and most significantly, the problem with
the appellant’s argument is her narrow view of the Commission’s expertise. In
particular, the appellant argues that limitation periods “are not in themselves
part of substantive securities regulation, the area of the [Commission’s]
specialised expertise” (A.R.F., at para. 9). The argument presupposes a neat
division between what one might call a “lawyer’s question” and a “bureaucrat’s
question”. The logic seems to be that because the meaning of “the events” in
s. 159 cannot possibly require any great technical expertise — there is, after
all, no specialized “bureaucratese” to interpret — why should the matter be
left to the Commission?
[31]
While such a view may have carried some weight
in the past, that is no longer the case. The modern approach to judicial
review recognizes that courts “may not be as well qualified as a given agency
to provide interpretations of that agency’s constitutive statute that make
sense given the broad policy context within which that agency must work” (National
Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324, at p.
1336, per Wilson J.; see also Council of Canadians with Disabilities
v. VIA Rail Canada Inc., 2007 SCC 15, [2007] 1 S.C.R. 650, at para. 92; Mowat,
at para. 25).
[32]
In plain terms, because legislatures do not
always speak clearly and because the tools of statutory interpretation do not
always guarantee a single clear answer, legislative provisions will on occasion
be susceptible to multiple reasonable interpretations (Dunsmuir, at
para. 47; see also Construction Labour Relations v. Driver Iron Inc.,
2012 SCC 65, [2012] 3 S.C.R. 405). Indeed, that is the case here, as I will
explain in a moment. The question that arises, then, is who gets to decide
among these competing reasonable interpretations?
[33]
The answer, as this Court has repeatedly
indicated since Dunsmuir, is that the resolution of unclear language in
an administrative decision maker’s home statute is usually best left to the
decision maker. That is so because the choice between multiple reasonable
interpretations will often involve policy considerations that we presume the
legislature desired the administrative decision maker — not the courts —
to make. Indeed, the exercise of that interpretative discretion is part of an
administrative decision maker’s “expertise”.
B. The Commission’s Interpretation of Section 159 Was
Reasonable
(1) Overview
(a) The Appellant’s Position
[34]
In a nutshell, the appellant argues that s.
161(6) merely “codifies the [Commission’s] already-existing ability to rely on
convictions, findings, orders, or agreements as evidence of a person’s
conduct contrary to the public interest” (A.F., at para. 40 (emphasis in
original)). The law is clear that the Commission could — and did — issue
reciprocal orders using its existing power under s. 161(1) on the strength of
factual findings in other jurisdictions prior to the introduction of s. 161(6);
see, e.g., Woods (Re), 1997 LNBCSC 11 (QL), at p. 5 (where the
Commission relied on “the findings of fact and law of the Ontario courts, and
the enforcement orders made by the Ontario Securities Commission”); Seto
(Re), 2006 BCSECCOM 569 (CanLII), at para. 4 (where the Commission drew the
facts “solely from the decision and order of the [Alberta Securities
Commission] and the judgment of the Alberta Provincial Court”).
[35]
In those earlier cases, “the events” meant the
underlying misconduct — and no one suggests otherwise. As such, the
Commission’s choice to rely on the “procedural shortcut” reflected in s.
161(6)(d) does not change the nature of the proceedings such that the agreement
becomes the event (A.F., at para. 40). Rather, because s. 161(6)(d)
must be fused with s. 161(1), the proceedings remain s. 161(1) proceedings —
and “the events” must thus remain the underlying misconduct.
(b) The Respondent’s Position
[36]
The respondent says that the appellant’s
argument is untenable because the plain wording of s. 161(6) says nothing about
decisions, orders, or settlement agreements being admissible as “evidence”.
Rather, “the provisions empower the Commission to make an order in specific
circumstances (i.e., if a person is subject to another regulator’s order
or has agreed to be subject to sanctions)” (R.F., at para. 53). Because
securities investigations do not always conclude within the six-year window,
the purpose of s. 161(6)(d) would be undermined if the Commission were “barred
from making an order in any case where the extra-provincial proceeding
concludes more than six years after the date of the wrongdoer’s misconduct”
(R.F., at para. 84). Put simply, on the appellant’s interpretation, the
limitation period could expire before the event referred to in s. 161(6)(d)
ever occurs — and that would all but defeat the purpose of the provision.
(c) The Choice Between the Two
Interpretations
[37]
For the reasons that follow, I conclude that
both interpretations are reasonable. Here, the statutory language is less than crystal clear. Or, as
Professor Willis once put it, “the words are ambiguous enough to induce two
people to spend good money in backing two opposing views as to their meaning”
(J. Willis, “Statute Interpretation in a Nutshell” (1938), 16 Can. Bar Rev.
1, at pp. 4-5, cited in Bell ExpressVu Limited Partnership v. Rex, 2002
SCC 42, [2002] 2 S.C.R. 559, at para. 30).
[38]
It will not always be the case that a particular
provision permits multiple reasonable interpretations. Where the ordinary
tools of statutory interpretation lead to a single reasonable interpretation and
the administrative decision maker adopts a different interpretation, its
interpretation will necessarily be unreasonable — no degree of deference can
justify its acceptance; see, e.g., Dunsmuir, at para. 75; Mowat,
at para. 34. In those cases, the
“range of reasonable outcomes” (Canada (Citizenship and Immigration) v.
Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at para. 4) will necessarily be
limited to a single reasonable interpretation — and the administrative decision
maker must adopt it.
[39]
But, as I say, this is
not one of those clear cases. As between the two possible interpretations put
forward with respect to the meaning of s. 159 as it applies to s. 161(6)(d),
both find some support in the text, context, and purpose of the
statute. In a word, both interpretations are reasonable. The litmus
test, of course, is that if the Commission had adopted the other interpretation
— that is, if the Commission had agreed with the appellant — I am hard-pressed
to conclude that we would have rejected its decision as unreasonable.
[40]
The bottom line here, then, is that the
Commission holds the interpretative upper hand: under reasonableness review,
we defer to any reasonable interpretation adopted by an administrative decision
maker, even if other reasonable interpretations may exist. Because the
legislature charged the administrative decision maker rather than the courts
with “administer[ing] and apply[ing]” its home statute (Pezim, at p.
596), it is the decision maker, first and foremost, that has the discretion to
resolve a statutory uncertainty by adopting any interpretation that the
statutory language can reasonably bear. Judicial deference in such instances
is itself a principle of modern statutory interpretation.
[41]
Accordingly, the appellant’s burden here is not
only to show that her competing interpretation is reasonable, but also that the
Commission’s interpretation is unreasonable. And that she has not
done. Here, the Commission,
with the benefit of its expertise, chose the interpretation it did. And
because that interpretation has not been shown to be an unreasonable one, there
is no basis for us to interfere on judicial review — even in the face of a
competing reasonable interpretation.
(2) Ordinary Meaning
[42]
Beginning with the ordinary meaning of “the
events”, on the surface it would appear that “the even[t]” giving rise to a
proceeding under s. 161(6)(d) is the fact of “ha[ving] agreed with a securities
regulatory authority” to be subject to regulatory action. By ordinary meaning,
I refer simply to the “natural meaning which appears when the provision is
simply read through” (Canadian Pacific Air Lines Ltd. v. Canadian Air Line
Pilots Assn., [1993] 3 S.C.R. 724, at p. 735). The ordinary meaning would
thus appear to support the Commission’s interpretation.
[43]
However, satisfying oneself as to the ordinary
meaning of the phrase “is not determinative and does not constitute the end of
the inquiry” (ATCO Gas and Pipelines Ltd. v. Alberta (Energy and Utilities
Board), 2006 SCC 4, [2006] 1 S.C.R. 140, at para. 48). Although it is
presumed that the ordinary meaning is the one intended by the legislature,
courts are obliged to look at other indicators of legislative meaning as part
of their work of interpretation. That is so because
[w]ords
that appear clear and unambiguous may in fact prove to be ambiguous once placed
in their context. The possibility of the context revealing a latent ambiguity
such as this is a logical result of the modern approach to interpretation.
(Montréal (City) v. 2952-1366 Québec Inc., 2005
SCC 62, [2005] 3 S.C.R. 141, at para. 10)
[44]
That possibility is realized here. Though the
ordinary meaning seems apparent enough, digging deeper into the context and
purpose of the provision casts some doubt on that conclusion — and introduces
the possibility of another reasonable interpretation.
(3) Drafting History
[45]
The limitation period in s. 159 predates the
addition of s. 161(6) by roughly a decade. Before s. 161(6) was introduced by
the Securities Amendment Act, 2006, S.B.C. 2006, c. 32, it was clear that s. 159 ran from the date of
the underlying misconduct; see, e.g., Dennis (Re), 2005 BCSECCOM 65, 2004
LNBCSC 705 (QL), at para. 38; Bapty, at para. 28. As mentioned, the
parties do not contend otherwise.
[46]
It was only with the addition of s. 161(6) that
the start date for the limitations clock became unclear. Given that the
legislature chose not to change the wording of s. 159 after it added s. 161(6),
it stands to reason that the legislature intended “the events” in s. 159 to
continue to refer to the misconduct at issue, regardless of the addition of s.
161(6). In other words, the original meaning of “the events” did not change
overnight. And as Dickson J. (as he then was) observed, “words must be given
the meanings they had at the time of enactment” (Perka v. The Queen,
[1984] 2 S.C.R. 232, at p. 265, citing E. A. Driedger, Construction of
Statutes (2nd ed. 1983), at p. 163). If one accepts this line of
reasoning, it lends support to the appellant’s interpretation.
[47]
On the other hand, one could argue that the
original meaning of “the events” never changed — all that did was what
qualified as an “event” in a particular context. It is important to
distinguish between these two concepts. As Professor Sullivan has explained,
“even though the meaning of a word remains constant, the things or
events that fall within its ambit may change dramatically over time” (R.
Sullivan, Sullivan on the Construction of Statutes (5th ed. 2008), at p. 149;
see also P.-A. Côté, in collaboration with S. Beaulac and M. Devinat, The
Interpretation of Legislation in Canada (4th ed. 2011), at pp. 287-88).
This argument, which lends support to the Commission’s interpretation, is best
illustrated by a contextual reading of s. 159, to which I now turn.
(4) The Provision Read in Context
[48]
The use of the phrase “the events that give rise
to the proceedings” in s. 159 is relatively open-ended, as can be seen
when contrasted with the language used in other limitations provisions in the Act.
For example, s. 140(a), which provides for limitation periods for actions for
rescission, speaks of “180 days after the date of the transaction that
gave rise to the cause of action”. Section 140.94, which concerns actions
related to secondary market disclosure, speaks of “3 years after the date on
which the document containing the misrepresentation was first released”.
[49]
The distinctive diction of s. 159 arguably makes
sense in context. Unlike ss. 140 and 140.94, which refer to specific
proceedings in the Act, s. 159 is a residual limitation provision
applicable to all other proceedings. Thus, it stands to reason that
“the events” is a deliberately open-ended phrase because it must be capable of
applying to a variety of different contexts. As applied to s. 161(1)(a)(i),
“the events” read in its ordinary sense means the date of the misconduct
whereby a person was “contravening . . . a provision of [the] Act”. That, of
course, was the interpretation as understood prior to the introduction of s.
161(6). But it is also easy to see how, as applied to s. 161(6)(a), “the
events” can mean the date the person “has been convicted . . . of an offence”.
And as applied to s. 161(6)(d), the provision at issue here, “the events” can
mean the date the person “has agreed with a securities regulatory authority [.
. .] to be subject to sanctions, conditions, restrictions or requirements”.
[50]
What the appellant asks the Commission to do is
to interpret “the events that give rise to the proceedings” restrictively as
“the misconduct that gives rise to the proceedings”. Indeed, that is
essentially how Manitoba’s general limitation provision reads; see Securities
Act, s. 137 (“the proceedings to prosecute a person or company for an
offence under this Act shall not be commenced after eight years after the date
on which the offence was committed”). It cannot be said, however, that
a contextual reading of s. 159 points toward such a restrictive
interpretation. Rather, a flexible reading of “the events” — capable of
adapting to the various provisions to which it is applied, including new
provisions added over time, such as s. 161(6)(d) itself — makes more sense in
context. Accordingly, and setting aside whatever quibbles one might have with
the significance of the provision’s drafting history, a contextual reading of
s. 159 supports the Commission’s interpretation.
(5) The Nature of Secondary Proceedings
[51]
For better or worse, securities regulation in
Canada remains largely a matter of provincial and territorial jurisdiction.
However, given the reality of interprovincial, if not international, capital
markets, “[t]here can be no disputing the indispensable nature of
interjurisdictional co-operation among securities regulators today” (Global
Securities Corp. v. British Columbia (Securities Commission), 2000 SCC 21,
[2000] 1 S.C.R. 494, at para. 27). That is where provisions such as s.
161(6)(d) come in.
[52]
In 2004, recognizing the inefficiencies of the
existing framework, all the provinces and territories (except Ontario, for
reasons that are not relevant here) signed a memorandum of understanding
(“MOU”); see A Provincial/Territorial Memorandum of Understanding Regarding
Securities Regulation (online). The MOU set up a “passport system” for
securities regulation, which provides a single window of access to market
participants. Under this passport system,
[h]ost jurisdictions will
rely on the securities regulator in the primary jurisdiction of a market
participant for the enforcement of the requirements
of securities laws applicable to those areas covered by the passport system.
• The securities regulator in a host jurisdiction that receives
a complaint about a market participant will conduct a preliminary assessment of
the complaint and refer the complaint along with their findings and the
documents compiled to the primary jurisdiction for further investigation
and, if appropriate, enforcement action.
• The host securities regulator will await the outcome of the
primary securities regulator’s investigation and will undertake its own
investigation and, if appropriate, enforcement action if it is in the public
interest to do so or if the primary securities regulator has referred the
matter back to the host securities regulator for further action. [Emphasis
added; para. 5.6.]
[53]
Not long after the MOU was signed, the B.C.
legislature introduced legislation to implement its provisions, including the
secondary proceeding powers now found in s. 161(6); see Bill 20, Securities
Amendment Act, 2006; Bill 28, Securities Amendment Act, 2007.
Section 161(6)(d), of course, recognizes settlement agreements in other
jurisdictions; other provisions speak to convictions for securities-related
offences (s. 161(6)(a)), judicial findings as to securities laws (s.
161(6)(b)), and regulatory orders (s. 161(6)(c)).
[54]
As a consequence of these legislative
amendments, while the Commission cannot abrogate its responsibility to make its
own determination as to whether an order is in the public interest, one could
argue, as the respondent does, that s. 161(6) obviates the need for inefficient
parallel and duplicative proceedings in British Columbia by expressly providing
a new basis on which to initiate proceedings. In other words, s. 161(6)
achieves the legislative goal of facilitating interprovincial cooperation by
providing a triggering “event” other than the underlying misconduct.
The corollary to this point must be the ability to actually rely on that
triggering event — that is, the other jurisdiction’s settlement agreement (or
conviction or judicial finding or order, as the case may be) — in commencing a
secondary proceeding. But the appellant’s reading of s. 159 as it applies to
s. 161(6) leads to the troublesome conclusion that the Commission could be
time-barred from proceeding under this provision before the triggering event
even exists.
[55]
The appellant’s response is that where there is
a risk that the six-year limitation window could expire before the primary
jurisdiction has completed its proceeding, British Columbia and every other
secondary province and territory should initiate their own proceedings
in reliance on s. 161(1) alone — or, in the case of another province or
territory, their provincial or territorial equivalent of that section — with
the possibility that s. 161(6) or its equivalent could be invoked later on. Of
course, the implication of this approach is clear: the appellant says that s. 161(6)
does not change anything with respect to the timing of when a secondary
proceeding must begin.
[56]
The facts of this case, however, illustrate how
problematic the appellant’s interpretation can prove in practice. Though the
OSC was first alerted to the issues at Hucamp in 2001, it did not commence
formal proceedings until 2005 (four years later). A settlement agreement was
not reached until 2008 (a further three years later, and a full seven years
after the last event of misconduct). No one suggests this lengthy period
reflects any foot-dragging on the OSC’s part. And yet, on the appellant’s
view, as the calendar turned to 2007, the B.C. Commission should have commenced
its own proceeding under s. 161(1) so as to preserve its ultimate authority to
make an order using both ss. 161(1) and 161(6)(d). If that had been done, the
appellant seems to accept that the Commission could then have waited until the
conclusion of the OSC’s proceeding to make its actual order.
[57]
The difficulty with the appellant’s approach is
that if each province and territory has to initiate proceedings before its
limitations clock runs out — instead of relying on the outcome of the
proceedings in the primary jurisdiction — overlapping cases would clog up the
legal system and overburden the securities commissions. A multiplicity of
simultaneous proceedings would also place a high burden on the target of the
proceedings, who could well face multiple proceedings all across the country,
all needing to be defended simultaneously.
[58]
On the other hand, allowing secondary
jurisdictions to use s. 161(6) such that they can wait until the conclusion of
the primary proceeding avoids some of these complications. That can happen
only if the secondary jurisdictions are allowed to begin their work (and their
limitation clocks start ticking) once the original proceeding has actually
concluded — and no earlier. As such, it can be said that the very purpose
of s. 161(6) is to provide a new limitation clock. Unless it is
interpreted in this manner, s. 161(6) is no solution to the challenges inherent
in the decentralized structure of securities regulation in Canada.
[59]
In the end, the Commission’s interpretation is a
reasonable one because it furthers the legislature’s manifest goal of improving
interprovincial cooperation. The appellant’s interpretation, by contrast, fits
uneasily with the broader indicators of legislative intent available to us. In
reducing s. 161(6) to a belts-and-suspenders codification of what is already
common practice, her interpretation does little to improve interprovincial
cooperation. I do not say that the appellant’s interpretation is inconsistent
with such efforts — only that it does not further them to the same extent as
the Commission’s interpretation.
(6) The Purpose of Limitation Periods
[60]
I would be wary of focussing only on the
legislative purpose of secondary provisions while overlooking the legislative
purpose of limitation periods. Instead, regard must also be had for the
legislative purpose of both s. 161(6)(d) and s. 159.
[61]
The appellant fears that the Commission’s
interpretation undermines two of the three purposes of limitation periods,
namely, allowing for repose and encouraging diligence (Novak v. Bond,
[1999] 1 S.C.R. 808, at para. 67). Most notable is the possibility that allowing
the limitations clock to start with each new proceeding would allow a string of
secondary proceedings, piggy-backing on each other, which could stretch for
decades. We are told that “[w]ith twelve jurisdictions having such provisions,
a person could be subject to serial proceedings for seventy-four years”
(A.F., at para. 54 (emphasis in original)).
[62]
There is also a related concern with respect to
s. 161(6)(c), which provides that the Commission may commence a proceeding so
long as a person is “subject to an order” by another regulator. Public
interest orders may last 20 years or more; see, e.g., Friedland (Re),
2010 BCSECCOM 654 (CanLII) (20 years); Nielsen (Re), 2013 LNONOSC 254,
36 O.S.C.B. 3478 (25 years); Robinson (Re), 2013 LNABASC 295, 2013 ABASC
317 (CanLII) (permanent); Maitland Capital Ltd. (Re), 2012 LNONOSC 95,
35 O.S.C.B. 1729 (permanent). Were the Commission able to commence a secondary
proceeding six years after a person is no longer “subject to” such a
primary order, that approach could radically expand the length of the
limitation period — even beyond 74 years.
[63]
Such concerns, in my view, are not idle.
Limitations periods exist for good reasons, two of which deserve mention here.
First, “[t]here comes a time . . . when a potential defendant should be secure
in his reasonable expectation that he will not be held to account for ancient
obligations” (M. (K.) v. M. (H.), [1992] 3 S.C.R. 6, at p. 29). Second,
at some point “[i]t is better that the negligent [plaintiff], who has omitted
to assert his right within the prescribed period, should lose his right, than
that an opening should be given to interminable litigation” (Cholmondeley v.
Clinton (1820), 2 Jac. & W. 1, 37 E.R. 527, at p. 577; see also M. (K.),
at p. 30).
[64]
Against those rationales, the appellant’s
interpretation has something to it. Manifestly, the Commission’s reading
significantly extends the duration of time for which a person may be subject to
regulatory action. Common sense suggests that the authorities will always want
more time to go after law-breakers, but fairness demands their chase eventually
come to an end. Absent more, regard for the purpose of limitation periods thus
counsels in favour of the appellant’s interpretation.
[65]
There is, however, a simple answer to the disquieting
hypotheticals raised by the appellant. Although securities commissions are
conferred with broad discretion to make orders in the public interest, their
authority “is not unlimited” (Asbestos Minority Shareholders, at para.
41). Accordingly, no order — secondary or otherwise — is immune from appellate
review for its reasonableness;
see, e.g., Lines v. British Columbia (Securities Commission), 2012 BCCA
316, 35 B.C.L.R. (5th) 281 (where the court found the Commission’s order under
s. 161(6)(d) unreasonable because it imposed a severe sanction in sole reliance
on another jurisdiction’s settlement agreement in which no wrongdoing was
admitted).
[66]
“[T]here is always a perspective within which a statute is intended
to operate” (Roncarelli v. Duplessis, [1959] S.C.R. 121, at p. 140).
And keeping the appellant’s concerns in mind, it seems to me that a regulator
that sought to act on these scenarios would run afoul of the legislative purpose
of limitation periods and distort the purpose of secondary proceeding
provisions.
[67]
To his credit, the respondent acknowledges as
much in his oral and written submissions (see transcript, at p. 55; R.F., at
para. 90). In what I believe is a reasonable and responsible approach, he
accepts the following three propositions:
1. Regardless of which of the four
secondary proceeding clauses in s. 161(6) is at issue, “the events” refers
to the date the relevant action first occurred. Accordingly, if a settlement
agreement is entered into on January 1, 2013 and terminates on January 1, 2015,
it is the first date, not the second, which starts the clock.
2. A secondary proceeding may not be
commenced under s. 161(6) if the period of the original order has already
lapsed. In other words, using the same example, the Commission could not
commence a secondary proceeding on February 1, 2015, because the original order
would no longer be in place at that time.
3. Any order initiated using s.
161(6) must be based on an original proceeding in the primary
jurisdiction. Secondary proceedings cannot be “stacked” on top of one another
in the manner feared by the appellant.
Although this is not the
case to put our stamp of approval on these concessions, to my mind, they make
eminent good sense. Thus, to the extent that regulators commence secondary
proceedings in these situations, they must, as always, be prepared to defend
the reasonableness of their decisions on appellate review.
[68]
While it is true that
the application of s. 159 to the secondary proceeding provisions such as s.
161(6)(d) will have the effect, as a practical matter, of extending the period
under which the cloud of potential regulatory action hangs over a person, that,
of itself, is not offensive to the legislative purpose of limitation
provisions. Limitations periods are always “driven by specific policy choices
of the legislatures” (Manitoba Metis Federation Inc. v. Canada (Attorney
General), 2013 SCC 14, [2013] 1 S.C.R. 623, at para. 230, per Rothstein
J., dissenting), as they attempt to “balance the interests of both sides” (Murphy
v. Welsh, [1993] 2 S.C.R. 1069, at p. 1080).
[69]
The Commission’s
interpretation strikes a reasonable balance between facilitation of
interprovincial cooperation and the underlying purposes of limitation periods.
Thus, notwithstanding the appellant’s reasonable concerns, I am unable to
conclude that the Commission’s interpretation is rendered unreasonable in light
of the purpose of limitation periods.
(7) Conclusion on the Commission’s
Interpretation
[70]
A review of the
ordinary meaning, the context, and the purpose of both ss. 159 and 161(6)
reasonably supports the conclusion that “the even[t]”
giving rise to a proceeding under s. 161(6)(d) is the fact of “ha[ving] agreed
with a securities regulatory authority” to be subject to regulatory action.
That is not to say that the appellant’s interpretation is not a reasonable
alternative. But as I have said,
when faced with two competing reasonable interpretations that result from a
lack of clarity in its home statute, the Commission, with the benefit of its
expertise, is entitled to choose between them. Courts must respect that
choice.
C. The Commission’s Failure to Give Reasons
[71]
Briefly, I note that the Commission here failed
to give reasons for its interpretation of s. 159. Instead, the Commission
issued its order and, in doing so, impliedly decided that the proceeding was
not time-barred. As noted in Alberta Teachers, “deference under the
reasonableness standard is best given effect when administrative decision
makers provide intelligible and transparent justification for their decisions”
(at para. 54; see also Dunsmuir, at para. 47). Nonetheless, “when a
reasonable basis for the decision is apparent to the reviewing court, it will
generally be unnecessary to remit the decision to the tribunal” (at para. 55;
see also Agraira v. Canada (Public Safety and Emergency Preparedness),
2013 SCC 36, [2013] 2 S.C.R. 559, at para. 58).
[72]
Unlike Alberta Teachers, in the case at
bar, we do not have the benefit of the Commission’s reasoning from its
decisions in other cases involving the same issue (see paras. 56-57). However,
a basis for the Commission’s interpretation is apparent from the arguments
advanced by the respondent, who is also empowered to make orders under (and
thus to interpret) s. 161(1) and (6). These arguments follow from
established principles of statutory interpretation.
Accordingly, though reasons would have been preferable, there is nothing to be
gained here from requiring the Commission to explain on remand what is readily
apparent now.
VI. Disposition
[73]
For these reasons, I would dismiss the appeal
with costs.
The
following are the reasons delivered by
[74]
Karakatsanis J. — I agree with Justice Moldaver’s proposed disposition of this
appeal and with much of his analysis. I accept his conclusion that the British
Columbia Securities Commission was reasonable in interpreting the limitation
period contained in s. 159 of the British Columbia Securities Act,
R.S.B.C. 1996, c. 418, to require that secondary proceedings under s. 161(6) of
the Act must be initiated within six years of a person being sanctioned in
another jurisdiction, not within six years of the underlying misconduct.
[75]
However, I part company with my colleague when
he suggests that the opposite interpretation urged by the appellant — that the
limitation period runs from the time of the underlying misconduct, not the
Ontario Securities Commission order — is also reasonable. I do not agree.
[76]
While the text of the provision, or its drafting
history, might bear different interpretations if considered in a vacuum, the
legislative objective of facilitating interjurisdictional cooperation weighs
heavily against the appellant’s interpretation.
[77]
Here, legislatures across Canada have enacted similar
provisions to permit secondary proceedings in furtherance of
interjurisdictional cooperation and consistency in securities regulation and
enforcement across the country.
These objectives are also reflected in the Provincial/Territorial
Memorandum of Understanding Regarding Securities Regulation. As my
colleague notes, this Court has recognized that interjurisdictional cooperation
is “indispensable” to securities regulation: Global Securities Corp. v.
British Columbia (Securities Commission), 2000 SCC 21, [2000] 1 S.C.R. 494,
at para. 27. It is particularly important in light of Reference re
Securities Act, 2011 SCC 66, [2011] 3 S.C.R. 837.
[78]
On the appellant’s reading, the British Columbia
Securities Commission may only initiate secondary proceedings against a person
if it does so within six years of the underlying misconduct. This would mean
that in cases — like this one — where an investigation in another jurisdiction
does not conclude in an order or settlement within six years of the underlying
misconduct, the Commission could not use its secondary proceedings power unless
it had already started proceedings before the six year clock had elapsed. The
appellant’s solution, that the Commission could instead initiate its own
primary proceedings before the other jurisdiction’s had concluded, strikes me
as duplication that is inconsistent with the objectives of the secondary
proceedings regime.
[79]
In this context, I am not persuaded that it
would have been open to the Commission to reasonably interpret the limitation
period as the appellant urges. It is at odds with a purposive interpretation.
[80]
My colleague’s conclusion that both
interpretations are reasonable would permit securities commissions in different
jurisdictions across the country to come to completely opposite conclusions
about the application of essentially equivalent statutory provisions enacted
for the same purposes. Such a result has the potential to thwart the legislative
objectives of consistency and cooperation that underlie the secondary
proceedings regime.
[81]
As my colleague notes, the disposition of this
appeal does not require us to decide whether the appellant’s alternative
interpretation is reasonable.
[82]
Accordingly, with this reservation regarding my
colleague’s reasons, I too would dismiss the appeal.
Appeal
dismissed with costs.
Solicitors
for the appellant: Stockwoods, Toronto.
Solicitor
for the respondent: British Columbia Securities Commission,
Vancouver.
Solicitors
for the intervener the Financial Advisors Association of Canada: Blaney
McMurtry, Toronto.
Solicitor for the intervener the
Ontario Securities Commission: Ontario Securities Commission,
Toronto.