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.
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
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
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
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
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 his 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 (at para 54).
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
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,  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.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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