On December 5, the Supreme Court of Canada released its decision
in McLean v. British Columbia (Securities
Commission), a case in which the Court found that a
standard of reasonableness applied to its review of a BCSC decision in respect of the limitation
period applicable to secondary proceedings under the Securities Act(British Columbia).
In September 2008, the appellant McLean entered into a
settlement agreement with the OSC in regards to claims of
misconduct that allegedly occurred between March 1996 and June
2001. The settlement agreement and the corresponding agreed-upon
order issued by the OSC generally barred her from trading in
securities for a period of five years and from acting as
an officer or director of certain registered entities for a period
of ten years.
In January 2010, the Executive Director of the BCSC applied for
a public interest order against the appellant based on the
OSC settlement. The applicable limitation provision in British
Columbia'sSecurities Act provides that such an
action cannot be commenced more than six years after the date of
the events that gave rise to the proceedings. Whether the
reference to "events" in the provision refers
the underlying misconduct or to a settlement agreement is not
specified. Rejecting the appellant's argument that the
reference is to the underlying misconduct, the BCSC issued a
reciprocal order which contained the same prohibitions and expired
at the same time as the OSC order. The Supreme Court thus
considered two issues: (i) the applicable standard of review; and
(ii) whether the BCSC's decision met the applicable review
In considering the standard of review, the Supreme Court cited
Dunsmuir v. New Brunswickfor the principle that
deference should be given to a tribunal interpreting its own
statute or one closely connected to the tribunal's function.
Since the presumption of reasonableness was not rebutted and the
question as to the limitation period did not fall into an
exceptional category warranting a standard of correctness, as had
been argued by the appellant, the Supreme Court found that
reasonableness was the appropriate standard of review.
The Supreme Court then considered whether the
event triggering the six-year limitation period for secondary
proceedings under the Securities Act was
the appellant's initial misconduct or the
subsequent settlement agreement with the OSC. Ultimately, the
Supreme Court found that the ordinary meaning of the term
"the events" in the limitation period provision
supported the BCSC's interpretation, and noted that the provision allowing the BCSC to initiate
proceedings based on the existence of an agreement with a
securities regulator in another
jurisdiction "obviates the need for inefficient
parallel and duplicative proceedings". Further, in
providing for a triggering event based on the settlement agreement,
the BCSC's interpretation of the limitation period provision
achieved the legislative goal of facilitating interprovincial
The Supreme Court thus found the BCSC's interpretation
of the limitation period provision to be reasonable.
Interestingly, the Court noted that, while the appellant's
interpretation was also reasonable given the provision's
ambiguity, the BCSC was entitled to deference even where other
reasonable interpretations existed. According to the Supreme
Court, "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."
As such, the BCSC's interpretation of the provision was
upheld and the appeal was dismissed.
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