The Court of Appeal remitted the matter back to the BC Securities Commission after it failed to provide an explanation for why its decision to limit the appellant’s ability to trade securities was in the best interests of the public

Administrative law – Decisions of administrative tribunals – Securities Commission – Stock brokers – Disciplinary proceedings – Penalties – Public interest – Judicial review – Compliance with legislation – Standard of review – Correctness – Failure to provide reasons – Limitations

McLean v. British Columbia (Securities Commission), [2011] B.C.J. No. 2124, 2011 BCCA 455, British Columbia Court of Appeal, November 10, 2011, M.E. Saunders, E.C. Chiasson and K.E. Neilson JJ.A.

The appellant, McLean, appealed an order against her in the public interest issued by the British Columbia Securities Commission (the “BCSC”). The appellant had entered into a settlement agreement with the Ontario Securities Commission (the “OSC”) in September 2008 in which she consented to the making of an order against her. The provisions of the order prohibited her from trading in any securities for a five-year period save for one non-RRSP account in her name and in one corporate account, both of which would be subject to numerous restrictions. The appellant was also reprimanded under the order, and was banned from acting as an officer or director of a reporting issuer or registrant of the OSC for a period of ten years.

In January 2010, the respondent, the executive director of the BCSC, applied for an order against the appellant under s.161(6) of the Securities Act, R.S.B.C. 1996, c.418 (the “Act”) in the public interest, limiting the appellant’s ability to trade securities in British Columbia. After considering the appellant’s written submissions, the BCSC delivered an order, essentially identical to that made by the OSC, restricting the appellant’s ability to trade securities or act as a director or officer of a reporting issuer or registrant of the BCSC.

The appellant appealed the order, asserting that the BCSC was in breach of s.159 of the Act in making an order more than six years after the events underlying the Ontario Agreement had taken place, and that the BCSC was in error in failing to provide reasons for its order. The appellant sought a review on a standard of correctness.

The Court, applying a standard of correctness to its standard of review, was of the view that the limitation period began to run only when the appellant entered into her original agreement with the OSC and as such had not expired at the time of the BCSC’s order. While the Court did not accede to the first ground of the appeal, it went on to hold that the BCSC’s failure to provide an explanation for why its order was in the public interest was inappropriate in the circumstances and remitted the matter back to the BCSC so that it might provide a brief explanation for its decision.

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