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's Securities 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 standard.
In considering the standard of review, the Supreme Court cited Dunsmuir v. New Brunswick for 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 cooperation.
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.