Lavallee v. Alberta Securities Commission, (2010) 474 A.R. 295 (CA)

• Judge: Conrad, Hunt and Paperny, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: December 04, 2009
• Citations: (2010), 474 A.R. 295 (CA);2010 ABCA 48

Lavallee v. Securities Comm. (2010), 474 A.R. 295 (CA);

      479 W.A.C. 295

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. FE.096

Lambert "Bert" Lavallee, Arbour Energy Inc. and Dennis Morice (appellants/applicants) v. Alberta Securities Commission (respondent) and The Attorney General of Alberta (intervenor)

(0901-0051-AC; 2010 ABCA 48)

Indexed As: Lavallee v. Alberta Securities Commission

Alberta Court of Appeal

Conrad, Hunt and Paperny, JJ.A.

February 11, 2010.

Summary:

The applicants faced two notices of hearing before the Alberta Securities Commission, each alleging breaches of the Securities Act including fraudulent and illegal activity. The applicants asserted that ss. 29(e) and 29(f) of the Securities Act violated ss. 7 and 11 of the Charter and offended s. 1(a) of the Alberta Bill of Rights.

The Alberta Court of Queen's Bench, in a decision reported at 467 A.R. 152, held that ss. 7 and 11 of the Charter were not violated. The court found the operation of ss. 29(e) and 29(f) was inconsistent with s. 1(a) of the Alberta Bill of Rights in limited circumstances. The applicants appealed the conclusion that their Charter rights were not infringed by the operation of ss. 29(e) and 29(f). The conclusion with respect to the Alberta Bill of Rights was not appealed.

The Alberta Court of Appeal dismissed the appeal.

Civil Rights - Topic 1205

Security of the person - Security of the person defined - The applicants asserted that ss. 29(e) and 29(f) of the Securities Act violated ss. 7 and 11 of the Charter - Sections 29(e) and 29(f) provided that "For the purpose of a hearing before the Commission or the Executive Director, as the case may be, the following applies: ... (e) the Commission or the Executive Director, as the case may be, shall receive that evidence that is relevant to the matter being heard; (f) the laws of evidence applicable to judicial proceedings do not apply" - The applicants submitted that the operation of the two sections together required the Commission to receive and admit evidence that would not otherwise be admissible in light of established administrative law principles - The applicants argued that the prospect of the imposition of penal consequences in hearings before the Commission ought to engage the application of s. 7 of the Charter based on the potential penalties (under ss. 198 and 199) and considering the legislated absence of procedural protections - They claimed that the Commission should not be entitled to exercise its powers without affording certain safeguards, including procedural fairness - They also submitted that the security of the person was engaged by the stigma and psychological harm suffered by the applicants - They argued that the Commission had the power to exclude them from the financial life of the community, which, added to the other powers of the Commission, engaged s. 7, because it curtailed the ability of an individual to make fundamental personal decisions - They contended that this was done in a way that did not accord with the principles of fundamental justice - The chambers judge held that ss. 29(e) and 29(f) did not violate s. 7 of the Charter - The concept of property had been excluded from s. 7 and did not extend protection to economic rights - Most individuals involved in similar proceedings in which their honesty was questioned would experience some level of stress - However, it was not the type of harm protected under s. 7 - Section 7 was not meant to afford protection against ordinary stresses suffered by most people as a result of civil or administrative proceedings - The Alberta Court of Appeal dismissed the applicants' appeal - See paragraphs 26 to 29.

Civil Rights - Topic 1206.5

Security of the person - Right to psychological integrity (incl. dignity, reputation, etc.) - [See Civil Rights - Topic 1205 ].

Civil Rights - Topic 3126

Trials - Due process, fundamental justice and fair hearings - Criminal and quasi-criminal proceedings - Fair hearing - What constitutes - The applicants asserted that ss. 29(e) and 29(f) of the Securities Act violated ss. 7 and 11 of the Charter - Sections 29(e) and 29(f) provided that "For the purpose of a hearing before the Commission or the Executive Director, as the case may be, the following applies: ... (e) the Commission or the Executive Director, as the case may be, shall receive that evidence that is relevant to the matter being heard; (f) the laws of evidence applicable to judicial proceedings do not apply" - The applicants submitted that the operation of the two sections together required the Commission to receive and admit evidence that would not otherwise be admissible in light of established administrative law principles - The applicants asserted that ss. 29(e) and 29(f) were contrary to s. 11(d) of the Charter because they did not afford a fair hearing - The applicants submitted that s. 11 protections should be extended to individuals who found themselves the subject of proceedings that might lead to the imposition of penal consequences, regardless of whether the proceedings themselves could be labelled "penal" or "punitive" - The chambers judge held that ss. 29(e) and 29(f) did not engage s. 11 of the Charter - The potential imposition of administrative penalties (under ss. 198 and 199 of the Act) of a certain magnitude reflected the legislative intent to ensure that penalties were not simply considered as another cost of doing business - Accordingly, no true penal consequences arose under ss. 198 and 199 - The Alberta Court of Appeal dismissed the applicants' appeal - See paragraphs 20 to 25.

Civil Rights - Topic 3180

Trials - Due process, fundamental justice and fair hearings - Administrative and noncriminal proceedings - Fair hearing - [See Civil Rights - Topic 3126 ].

Securities Regulation - Topic 6

General principles - Securities legislation - Nature of - [See Statutes - Topic 2417 ].

Securities Regulation - Topic 1370

Regulatory commissions (incl. self-regulatory organizations) - Practice - Hearings - Evidence - [See Civil Rights - Topic 1205 , Civil Rights - Topic 3126 and Statutes - Topic 2417 ].

Statutes - Topic 2417

Interpretation - Interpretation of words and phrases - "May" and "shall" - The applicants asserted that ss. 29(e) and 29(f) of the Securities Act violated ss. 7 and 11 of the Charter and offended s. 1(a) of the Alberta Bill of Right - Sections 29(e) and 29(f) provided that "For the purpose of a hearing before the Commission or the Executive Director, as the case may be, the following applies: ... (e) the Commission or the Executive Director, as the case may be, shall receive that evidence that is relevant to the matter being heard; (f) the laws of evidence applicable to judicial proceedings do not apply"- The applicants submitted that the operation of the two sections together required the Commission to receive and admit evidence that would not otherwise be admissible in light of established administrative law principles - The Alberta Court of Appeal interpreted the use of the word "shall" in s. 29(e) - The court noted "when the word 'shall' is used in an enactment, the court will generally conclude that the legislature intended the provision to be construed as mandatory or imperative, in the sense that it must be obeyed, unless such an interpretation 'would be utterly inconsistent with the context in which it has been used or would render the sections irrational or meaningless'" - The court held that "[t]o read s. 29(e) as removing all discretion from the Commission in the conduct of its hearings and mandating the admission of all relevant evidence would, in my view, render the section irrational or meaningless and could lead to absurd consequences" - A Commission panel had the right, and arguably the legal obligation, to consider the admissibility of evidence - Accordingly, the Commission retained a discretion under s. 29(e) as to the relevant evidence it would admit in a hearing - See paragraphs 6 to 19.

Words and Phrases

Shall - The Alberta Court of Appeal discussed the meaning of the word "shall" as used in s. 29(e) of the Securities Act, R.S.A. 2000, c. S-4 - See paragraphs 6 to 19.

Cases Noticed:

Manitoba Language Rights Reference, [1985] 1 S.C.R. 721; 59 N.R. 321; 35 Man.R.(2d) 83; 19 D.L.R.(4th) 1, refd to. [para. 7].

Rocky View No. 44 (Municipal District) v. McKinnon et al. (2009), 460 A.R. 280; 462 W.A.C. 280; 2009 ABCA 268, refd to. [para. 8].

Grand Trunk Pacific Railway Co. v. Dearborn (1919), 58 S.C.R. 315, refd to. [para. 8].

Pritchard v. Human Rights Commission (Ont.) et al., [2004] 1 S.C.R. 809; 319 N.R. 322; 187 O.A.C. 1; 2004 SCC 31, refd to. [para. 9].

Blood Tribe Department of Health v. Privacy Commissioner (Can.) et al., [2008] 2 S.C.R. 574; 376 N.R. 327; 2008 SCC 44, refd to. [para. 11].

Sentinel Financial Management Corp., Re, 2008 ABASC 477, refd to. [para. 15].

Alberta Securities Commission v. Brost et al. (2008), 440 A.R. 7; 438 W.A.C. 7; 2 Alta. L.R.(5th) 102; 2008 ABCA 326, refd to. [para. 17].

R. v. Wigglesworth, [1987] 2 S.C.R. 541; 81 N.R. 161; 61 Sask.R. 105; 24 O.A.C. 321; 45 D.L.R.(4th) 235 (S.C.C.), refd to. [para. 21].

Thow v. British Columbia Securities Commission (2009), 266 B.C.A.C. 140; 449 W.A.C. 140; 2009 BCCA 46, dist. [para. 24].

Cartaway Resources Corp. et al., Re, [2004] 1 S.C.R. 672; 319 N.R. 1; 195 B.C.A.C. 161; 319 W.A.C. 161; 2004 SCC 26, refd to. [para. 25].

Blencoe v. Human Rights Commission (B.C.) et al., [2000] 2 S.C.R. 307; 260 N.R. 1; 141 B.C.A.C. 161; 231 W.A.C. 161; 2000 SCC 44, refd to. [para. 27].

Yin v. Lewin (2006), 403 A.R. 79; 2006 ABQB 402, affd. (2007), 422 A.R. 263; 415 W.A.C. 263; 2007 ABCA 406, refd to. [para. 27].

Statutes Noticed:

Canadian Charter of Rights and Freedoms, 1982, sect. 7 [para. 26 et seq.]; sect. 11 [para. 20 et seq].

Securities Act, R.S.A. 2000, c. S-4, sect. 29(e), sect. 29(f) [para. 1].

Authors and Works Noticed:

Bryant, Alan W., Lederman, Sidney N., and Fuerst, Michelle K., Sopinka, Lederman and Bryant: The Law of Evidence in Canada (3rd Ed. 2009), p. 926 [para. 9].

Counsel:

V.C. Olson and E.C. Archer, for the appellants;

J. Petch, Q.C., and K. Hannan, for the respondent;

R.S. Wiltshire, for the intervenor.

This appeal was heard on December 4, 2009, and January 8, 2010, by Conrad, Hunt and Paperny, JJ.A., of the Alberta Court of Appeal. The reasons for judgment reserved of the Court of Appeal were delivered on February 11, 2010, and included the following opinions:

Paperny, J.A. (Hunt, J.A., concurring) - see paragraphs 1 to 30;

Conrad, J.A., concurring - see paragraph 31.