Administrative law – Stock brokers – Disciplinary proceedings – Penalties – Decisions of administrative tribunals – Securities Commission – Conflict of interest – Judicial review – Delay – Standard of review – Reasonableness simpliciter
Roeder v. British Columbia (Securities Commission),  B.C.J. No. 693, British Columbia Court of Appeal, April 4, 2005, Huddart, Saunders and Oppal JJ.A.
The Appellant appealed the dismissal of his application under section 171 of the B.C. Securities Act to revoke protective orders that the B.C. Securities Commission (the “Commission”) made in 1995 following findings that his conduct while president of a corporation constituted violations under the Act. The Appellant based his application on allegations that the Respondents W.N. and R.F. had acted in a conflict of interest and engaged in an abuse of process at the hearing giving rise to the protective orders. It was the Appellant’s contention that his former lawyer, Mr. B., who at one point worked at the same firm as W.N. and R.F., had received confidential information during a prior retainer that may have been used by W.N. and/or R.F. during the Appellant’s cross-examination at the 1994 hearing.
The Appellant did not file his application until October 20, 2000. The Commission found that the Appellant was aware of R.F.’s potential conflict within days of the commencement of the hearing in 1994, and that he discussed this potential for conflict with his counsel and chose not to pursue the matter. The Commission held that the Appellant had sufficient information no later than May 16, 1995 to raise the issue about the nature of W.N.’s involvement in the hearing with the Commission but failed to do so. The Commission therefore dismissed the Appellant’s application due to delay, holding that the effectiveness of the adjudication process would be prejudiced if the Commission’s decisions were subject to re-examination years after the fact by the bringing of applications that, with the exercise of reasonable diligence, could have been dealt with at or near the time of the original hearing. The Commission therefore did not consider the merits of the Appellant’s application.
The issue on appeal was whether the Commission panel erred in dismissing the Appellant’s application to revoke without any inquiry into the merits of his underlying allegation of conflict of interest and abuse of process.
The court held that the Commission’s decision was to be reviewed on a standard of reasonableness. The court’s task was therefore to apply the somewhat probing examination mandated by the reasonableness standard to the Commission’s analysis and decision, consider whether its reasons were tenable, grounded in the evidence and supported the order made. The court held that the Commission’s reasons met that test. The essence of the reasons was that the Appellant failed to exercise reasonable diligence in putting forward his complaint about the potential conflict of interest when he had the opportunity to seek to disqualify W.N. and R.F. before and during the hearing and, after the hearing, he had the opportunity to raise the potential conflict as a ground of appeal. However, the Appellant did nothing until he received a copy of the order for costs in August 2000.
The court also held that it was not unreasonable for the Commission to impute the knowledge of the Appellant’s counsel at the time of the hearing to the Appellant and to equate that constructive knowledge with actual knowledge. While it was unusual not to see some consideration of the merits given the extraordinary use of section 171 of the Act, it was not unreasonable for the Commission to decide the application as it did.
The appeal was dismissed.
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