The Supreme Court of Canada's recent decision in McLean v British Columbia (Securities Commission, 2013 SCC 67 ("McLean") adopts a broad interpretation of the limitation period provided for in section 159 of the British Columbia Securities Act, RSBC 1996, c 418 (the "Act") and effectively extends the limitation period for secondary proceedings.
Facts
In 2005 the Ontario Securities Commission (the "OSC") commenced proceedings against McLean under its public interest powers and accused McLean of "certain possible improper actions at Hucamp" (Settlement Agreement Between OSC Staff and Patricia McLean at para. 63 (A.R. at p.45)).
McLean served as a director of Hucamp Mines Ltd., a reporting issuer in Ontario, from 1996 to 2001 during which time she participated in the alleged "improper actions." Four years later, in 2005, the OSC commenced proceedings. In 2008, McLean entered into a settlement agreement with the OSC (the "Settlement") under which McLean was barred from trading in securities for five years and banned from acting as an officer or director of certain entities registered under securities legislation in Ontario for ten years.
Fifteen months later, in 2010, the British Columbia Securities Commission (the "BCSC") applied for a "public interest" order under the Act which would prohibit McLean from engaging in "substantially identical conduct in both Ontario and British Columbia for identical periods of time" (at para 15).
McLean appealed the BCSC's decision on the basis that the definition of "events" in section 159 of the Act was restricted to the event or events constituting the impugned course of conduct, and that a settlement agreement in another jurisdiction did not qualify as an "event." The issue before the Supreme Court of Canada was 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" (at para 18).
Section 159 of the Act requires that 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 specific question was whether entering into a settlement agreement in another jurisdiction constituted an event for the purposes of triggering the limitation period in section 159.
Court Prioritizes Cooperation Among Provincial Securities Commissions
Speaking for the Court, Moldaver concluded that "both interpretations are reasonable" (at para 39) however, because McLean failed to show the BCSC's interpretation of the statute was unreasonable "there is no basis for us to interfere on judicial review – even in the face of a competing reasonable interpretation" (at para 41).
In its reasons, the Court emphasized the importance of promoting and facilitating interprovincial cooperation among the securities commissions stating:
The Court concluded the "the very purpose of section 161(6) is to provide a new limitation clock" (at para 58) and as the BCSC's interpretation aligned more closely with the goal of interprovincial cooperation, the Court upheld the BCSC's order and dismissed the appeal.
Impact on Administration of Securities Legislation in Canada
The Court clearly favoured a more cooperative approach to the administration of securities legislation, and recognized the significance of such cooperation in light of Reference re Securities Act, 2011 SCC 66, [2011] 3 SCR 837.
Where the legislation in other provinces mirrors the language of section 159 of the Act, as it does in Alberta, settlement agreements in other jurisdictions will extend the limitation period for secondary proceedings. Section 201 of the Alberta Securities Act, RSA 2000, c S-4 provides that "No proceedings under this Part shall be commenced in a court or before the Commission more than 6 years from the day of the occurrence of the event that gave rise to the proceedings" and in light of McLean, the limitation period in connection with secondary proceedings will most likely be the same as in B.C.
- See more at: http://www.davis.ca/en/entry/litigation/settlement-agreements-in-other-jurisdictions-extend-the-limitation-period-for-secondary-proceedings/#sthash.NeJSYARI.dpuf
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