The Supreme Court of Canada rendered judgment in one case likely to be of interest to Canadian business and professions.
In McLean v. British Columbia (Securities Commission), 2013 SCC 67, the Supreme Court of Canada clarified the limitation period applicable to “secondary proceedings” in the context of securities enforcement.
The SCC dismissed Patricia McLean’s appeal of a 2010 British Columbia Securities Commission (“BCSC”) order which made sanctions approved by the Ontario Securities Commission (“OSC”) as part of a 2008 settlement agreement with McLean effective in British Columbia. In the settlement agreement with the OSC, McLean acknowledged her misconduct which had occurred in 2001 and 2002, and agreed to certain sanctions. In May 2010, the BCSC issued an order mirroring the Ontario sanctions.
McLean appealed the BCSC order to the BC Court of Appeal, arguing that the six-year limitation period in section 159 of the BC Securities Act had elapsed because the event triggering its running was the underlying misconduct that gave rise to the settlement agreement and not the settlement agreement itself. The court disagreed, holding it was the settlement agreement which triggered the running of the limitation period. As a result of this reasoning, the Court denied this ground of appeal. The appeal was ultimately allowed on separate grounds – namely, the BCSC’s failure to issue written reasons.
The SCC dismissed the further appeal, clarifying the standard of review for a tribunal when interpreting its own statute (reasonableness, not correctness) and reaffirming that deference is owed. The SCC accepted that other provincial and territorial securities commissions may arrive at different interpretations of their own statutory limitation periods, giving rise to the possibility that sequential orders from various securities commissions could result in very lengthy regulatory actions against individuals.