The Court dismissed the Plaintiff’s claim for damages against the Defendant British Columbia Securities Commission (the “Commission”), among others, on the basis that the action itself was an abuse of process. The Plaintiff had fully exhausted his right of review of the Commission’s 1995 and 2003 decisions determining that he had failed to comply with his obligations as and officer and director of a publicly traded company and restraining him from acting in such a capacity in British Columbia for 17 years. This present action for damages was a collateral attack on those decisions and, as such was an abuse of the Court’s process. Additionally, the Plaintiff’s pleading that the Commission committed the tort of abuse of public office failed to set out the essential elements of the tort and, in any event, was vexatious, and should be struck out.

28. February 2006 0

Administrative law – Decisions of administrative tribunals – Securities Commission – Investigations – Director of corporation – Penalties – Judicial review – Abuse of public office – Procedural requirements and fairness – Disclosure – Relevance of information disclosed – No reasonable cause of action – Abuse of process

Roeder v. Lang Michener Lawrence & Shaw, [2005] B.C.J. No. 2830, British Columbia Supreme Court, December 21, 2005, Rogers J.

The Plaintiff Roeder was a director of Keywest Resources Ltd, a publicly traded company subject to the supervisory jurisdiction of the British Columbia Securities Commission (the “Commission”). In 1995, following a hearing, the Commission determined that the Plaintiff had acted contrary to the public interest by failing to comply with his obligations as an officer and director of Keywest and imposed an order restraining the Plaintiff for acting as an officer and director for 17 years. The Plaintiff sought leave to appeal of the decision to the Court of Appeal pursuant to the provisions of the Securities Act, R.S.B.C. 1996, c.418 (the “Act”). Leave was denied.

In October 2000, the Plaintiff applied to the Commission under s.171 of the Act to revoke or vary its 1995 order on the basis that he had previously received legal advice from a solicitor concerning how to extract value from ownership of a controlling interest in a publicly traded company after the company’s business had failed. The solicitor later joined the firm Lang Michener Lawrence & Shaw, who was retained by the Commission staff to advise it with respect to the Plaintiff and the activity concerning Keywest. In 2003, the Commission heard and dismissed the Plaintiff’s s.171 application. The Plaintiff once again sought and was denied leave to appeal this decision by the Court of Appeal. Prior to the leave application, the Plaintiff commenced an action against the Commission and various solicitors for breach of various duties owed to him with respect to, among other things, confidential documents and fairness of process. The Commission sought to dismiss the Plaintiff’s civil proceedings on the basis that it disclosed no cause of action, is vexatious, frivolous, or an abuse of process and was commenced out of time.

The focus of the Plaintiff’s claim was that he suffered damages as a result of the Commission Panel’s decision. To establish the necessary causal link, he must show on a balance of probabilities that the Panel’s decision would have been favourable to him had his former solicitor not disclosed confidential information. The Panel’s decision and reasoning, which were tested by the Court of Appeal and found satisfactory, did not make use of any information that the former solicitor may have leaked to his colleagues. In effect, the Plaintiff is asking the Court to retry the 1995 case before the Commission, this time excluding the impugned information. This is a classic collateral attack – he wishes the Court to make findings of fact inconsistent with findings the Commission Panel legitimately made, and therefore the suit is an abuse of process and must be struck. The Plaintiff’s claim with respect to the s.171 application seeking damages for Commission decision not to reverse his ban from trading in public securities is likewise an abuse of process as it is again a collateral attack on what the Commission legitimately denied him.

Finally, the allegation that the Commission had committed the tort of abuse of public office did not meet the essential elements that the Commission engaged in deliberate unlawful conduct cognisant that the conduct was unlawful and would harm the Plaintiff. In any event, the pleading was vexatious and must be struck from the statement of claim.

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