Lavallee v. Alberta Securities Commission,

• Judge: Wittmann
• Neutral Citation: 2009 ABQB 17
• Citation: 2009 ABQB 17,(2009), 467 A.R. 152 (QB),467 AR 152,(2009), 467 AR 152 (QB),467 A.R. 152
• Date: 08 September 2008
• Court: Court of Queen's Bench of Alberta (Canada)

Lavallee v. Securities Comm. (2009), 467 A.R. 152 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. JA.126

Lambert "Bert" Lavallee (applicant) v. Alberta Securities Commission (respondent)

Arbour Energy Inc. and Dennis Morice (applicants) v. Alberta Securities Commission (respondent)

(0801 05159; 0801 05161; 2009 ABQB 17)

Indexed As: Lavallee v. Alberta Securities Commission

Alberta Court of Queen's Bench

Judicial District of Calgary

Wittmann, A.C.J.Q.B.

January 9, 2009.

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 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.

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 and offended s. 1(a) of the Alberta Bill of Rights - 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 Alberta Court of Queen's Bench 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 - See paragraphs 101 to 120.

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 and offended s. 1(a) of the Alberta Bill of Rights - 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 Alberta Court of Queen's Bench 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 - See paragraphs 121 to 165.

Civil Rights - Topic 3180

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

Civil Rights - Topic 8005

Canadian or provincial Bill of Rights - Principles of operation and interpretation - Due process - Right to life, liberty, security and enjoyment of property - 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 - 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 Alberta Bill of Rights applied to the Securities Act - They argued that s. 29 had to be interpreted and applied by the Commission so as to conform to s. 1(a) of the Alberta Bill of Rights - As such, the Securities Act had to be interpreted in a manner so as to not deprive any individual of his or her right to liberty, security of the person and enjoyment of property unless "due process of law" was followed - The applicants submitted that the proceedings under the Securities Act and the prospect of the penalties imposed under ss. 198 and 199 engaged the right to enjoyment of property - The Alberta Court of Queen's Bench held that the operation of ss. 29(e) and 29(f) was inconsistent with s. 1(a) of the Alberta Bill of Rights in that the effect of the word "shall" found under s. 29(e) would, in some limited instances, deprive individuals of the right to enjoyment of property without due process of law - The court concluded ss. 29(e) and 29(f) to be inoperative only where the admission of relevant evidence would violate due process of law - See paragraphs 166 to 207.

Civil Rights - Topic 8305.1

Canadian Charter of Rights and Freedoms - General - Application - Section 11 - [See Civil Rights - Topic 3126 ].

Securities Regulation - Topic 6

General principles - Securities legislation - Nature of - [See both Statutes - Topic 2401 and 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 , Civil Rights - Topic 8005 , both Statutes - Topic 2401 and Statutes - Topic 2417 ].

Statutes - Topic 2401

Interpretation - Interpretation of words and phrases - General - 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 - 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 Queen's Bench interpreted the use of the word "receive" in s. 29(e) and held that "in this context, 'receive' is synonymous with 'admit'. In our context, the wording 'shall receive' found under s. 29(e) means that virtually everything relevant becomes 'statutorily' admissible evidence" - See paragraphs 54 to 59.

Statutes - Topic 2401

Interpretation - Interpretation of words and phrases - General - 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 - 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 Queen's Bench interpreted the use of the phrase "evidence that was relevant to the matter" in s. 29(e) and agreed with the ruling in R. v. Zeolkowski (S.C.C.) that "all relevant evidence" encompassed all facts that were logically probative of the issue - Evidence lacking reliability could be given the appropriate weight - See paragraphs 60 and 61.

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 Rights - 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 Queen's Bench interpreted the use of the word "shall" in s. 29(e) and stated that "[i]t is clear that absent s. 29(e), the [Commission] would have discretion with respect to the admissibility of evidence. In this legislative context, the word 'shall' in s. 29(e) can only mean that it is mandatory, because if it meant 'may', s. 29(e) would add nothing more to what is already included in s. 29(f); a permissive 'shall' would render s. 29(e) meaningless. In this case, the effect of s. 29(e) is to remove the discretion of the [Commission] with respect to the receivability of relevant evidence" - See paragraphs 44 to 53.

Words and Phrases

Shall - The Alberta Court of Queen's Bench 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 44 to 53.

Words and Phrases

Receive - The Alberta Court of Queen's Bench discussed the meaning of the word "receive" as used in s. 29(e) of the Securities Act, R.S.A. 2000, c. S-4 - See paragraphs 54 to 59.

Words and Phrases

Evidence that was relevant to the matter - The Alberta Court of Queen's Bench discussed the meaning of the phrase "evidence that was relevant to the matter" as used in s. 29(e) of the Securities Act, R.S.A. 2000, c. S-4 - See paragraphs 60 and 61.

Cases Noticed:

Pezim v. British Columbia Securities Commission et al., [1994] 2 S.C.R. 557; 168 N.R. 321; 46 B.C.A.C. 1; 75 W.A.C. 1, refd to. [para. 7].

Pezim v. Superintendent of Brokers (B.C.) - see Pezim v. British Columbia Securities Commission et al.

Barry and Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301; 93 N.R. 1; 96 A.R. 241, refd to. [para. 7].

British Columbia Securities Commission v. Branch and Levitt, [1995] 2 S.C.R. 3; 180 N.R. 241; 60 B.C.A.C. 1; 99 W.A.C. 1, refd to. [para. 7].

Del Bianco et al. v. Alberta Securities Commission (2004), 357 A.R. 361; 334 W.A.C. 361; 2004 ABCA 344, refd to. [para. 7].

Latimer (W.D.) Co. v. Bray (1974), 6 O.R.(2d) 129 (C.A.), refd to. [para. 10].

Toronto Newspaper Guild v. Globe Printing Co., [1953] 2 S.C.R. 18, refd to. [para. 49].

R. v. Marsham, [1892] 1 Q.B. 371, refd to. [para. 49].

Ironside, Re, 2006 ABASC 1930, refd to. [para. 51].

Sentinel Financial Management Corp., Re, 2008 ABASC 477, refd to. [para. 52].

Holoboff and McKinney v. Alberta Securities Commission (1991), 117 A.R. 17; 2 W.A.C. 17 (C.A.), refd to. [para. 55].

Kusumoto, Re, 2007 ABASC 40, refd to. [para. 56].

R. v. Zeolkowski, [1989] 1 S.C.R. 1378; 95 N.R. 149; 58 Man.R.(2d) 63, appld. [para. 60].

Authorson v. Canada (Attorney General), [2003] 2 S.C.R. 40; 306 N.R. 335; 175 O.A.C. 363; 2003 SCC 39, refd to. [para. 62].

Wells v. Newfoundland and Board of Commissioners of Public Utilities (Nfld.), [1999] 3 S.C.R. 199; 245 N.R. 275; 180 Nfld. & P.E.I.R. 269; 548 A.P.R. 269, refd to. [para. 62].

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 65].

Bell Canada v. Canadian Telephone Employees Association et al., [2003] 1 S.C.R. 884; 306 N.R. 34; 2003 SCC 36, refd to. [para. 65].

Sebastian v. Saskatchewan Securities Commission et al. (1985), 39 Sask.R. 252 (Q.B.), refd to. [para. 69].

R. v. Vine (1875), L.R. 10 Q.B. 195, refd to. [para. 74].

R. v. Wigglesworth, [1987] 2 S.C.R. 541; 81 N.R. 161; 24 O.A.C. 321; 61 Sask.R. 105, consd. [para. 79].

Gregory & Co. Inc. v. Quebec Securities Commission, [1961] S.C.R. 584, refd to. [para. 80].

Bennett et al. v. British Columbia Securities Commission (1992), 18 B.C.A.C. 191; 31 W.A.C. 191; 69 B.C.L.R.(2d) 171 (C.A.), leave to appeal refused (1992), 143 N.R. 396; 20 B.C.A.C. 80; 35 W.A.C. 80 (S.C.C.), refd to. [para. 81].

Alberta Securities Commission v. Brost et al. (2008), 440 A.R. 7; 438 W.A.C. 7; 2008 ABCA 326, appld. [para. 83].

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. 100].

Singh v. Minister of Employment and Immigration, [1985] 1 S.C.R. 177; 58 N.R. 1, refd to. [para. 102, footnote 1].

MacBain v. Canadian Human Rights Commission et al., [1985] 1 F.C. 856; 62 N.R. 117 (F.C.A.), refd to. [para. 102, footnote 1].

Mussani v. College of Physicians and Surgeons (Ont.) (2004), 193 O.A.C. 23; 74 O.R.(3d) 1 (C.A.), refd to. [para. 105].

Morguard Investments Ltd. et al. v. De Savoye, [1990] 3 S.C.R. 1077; 122 N.R. 81, refd to. [para. 114, footnote 3].

Gosselin v. Quebec (Procureur général), [2002] 4 S.C.R. 429; 298 N.R. 1; 2002 SCC 84, refd to. [para. 115].

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. 115].

Davidson v. Slaight Communications Inc., [1989] 1 S.C.R. 1038; 93 N.R. 183, refd to. [para. 132].

Johnson v. British Columbia Sercurities Commission et al. (2001), 158 B.C.A.C. 69; 258 W.A.C. 69 (C.A.), refd to. [para. 133].

Martineau v. Ministre du Revenu national, [2004] 3 S.C.R. 737; 328 N.R. 48; 2004 SCC 81, refd to. [para. 134].

R. v. Fitzpatrick (B.), [1995] 4 S.C.R. 154; 188 N.R. 248; 65 B.C.A.C. 1; 106 W.A.C. 1, refd to. [para. 136].

McLeod et al. v. Alberta Securities Commission et al. (2006), 391 A.R. 121; 377 W.A.C. 121; 2006 ABCA 231, leave to appeal refused (2007), 366 N.R. 400; 412 A.R. 399; 404 W.A.C. 399 (S.C.C.), refd to. [para. 154].

Asbestos Corp., Société nationale de l'Amiante and Quebec (Province), Re, [2001] 2 S.C.R. 132; 269 N.R. 311; 146 O.A.C. 201; 2001 SCC 37, refd to. [para. 155].

Committee for Equal Treatment of Asbestos Minority Shareholders v. Ontario Securities Commission - see Asbestos Corp., Société nationale de l'Amiante and Quebec (Province), Re.

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. 158].

Morrison Williams Investment Management Ltd., Re (2000), 7 ASCS 2888, refd to. [para. 163].

Alberta v. Nilsson (1999), 246 A.R. 201; 70 Alta. L.R.(3d) 267; 1999 ABQB 440, affd. (2002), 320 A.R. 88; 288 W.A.C. 88; 220 D.L.R.(4th) 474; 2002 ABCA 283, leave to appeal refused [2003] 2 S.C.R. xi; 320 N.R. 398; 363 A.R. 194; 343 W.A.C. 194; [2004] 1 W.W.R. 197; 2003 CarswellAlta 1050, refd to. [para. 166].

Midgley v. Law Society of Alberta and Alberta (Attorney General) (1980), 31 A.R. 118; 12 Alta. L.R.(2d) 35 (Q.B.), affd. [1980] A.J. No. 712 (C.A.), refd to. [para. 169].

Marr v. Marr Estate and Vallejos (1989), 101 A.R. 47 (Q.B.), refd to. [para. 169].

Trelenberg v. Alberta (Minister of the Environment) (1980), 31 Alta. L.R.(3d) 353 (Q.B.), refd to. [para. 169].

R. v. Greckol (1991), 115 A.R. 124 (Q.B.), refd to. [para. 178].

Driver Control Board (Alta.) v. Lupien (2001), 295 A.R. 291; 2001 ABQB 511, refd to. [para. 184].

Curr v. R., [1972] S.C.R. 889; 7 C.C.C.(2d) 181, refd to. [para. 185].

Alberta Securities Commission v. Brost et al. (2008), 442 A.R. 116; 2008 ABQB 161, refd to. [para. 199].

Congrégation des témoins de Jéhovah de St-Jérôme-Lafontaine v. Lafontaine (Village), [2004] 2 S.C.R. 650; 323 N.R. 1; 2004 SCC 48, refd to. [para. 200].

Statutes Noticed:

Alberta Bill of Rights, R.S.A. 1980, c. A-16, sect. 1(a) [para. 167].

Canadian Charter of Rights and Freedoms, sect. 7 [para. 101]; sect. 11 [para. 122].

Securities Act, R.S.A. 2000, c. S-4, sect. 29(e), sect. 29(f) [para. 2]; sect. 198, sect. 199 [para. 15].

Authors and Works Noticed:

Brown, Donald J.M., and Evans, John M., Judicial Review of Administrative Action in Canada (2007 Looseleaf Update), pp. 10-80, 10-81 [para. 204].

Dussault, René, and Borgeat, Louis, Administrative Law: A Treatise (2nd Ed.) (1990), vol. 4, pp. 287, 288 [para. 50].

Dyzenhaus, David, Development in Administrative Law: The 1992-93 Term (1994), 5 Sup. Ct. L. Rev.(2d) 189, pp. 213 to 215 [para. 50].

Hogg, Peter W., Constitutional Law of Canada (5th Ed.) (2007 Looseleaf Supp.), pp. 47-17, 47-18 [para. 114]; 47-84 [paras. 65, 102].

Jones, David Phillip, and de Villars, Anne S., Principles of Administrative Law (4th Ed. 2004), pp. 234, 235 [para. 62].

MacAulay, Robert W., and Sprague, James L.H., Practice and Procedure before Administrative Tribunals (2004) (Looseleaf), pp. 17-5, 17-6 [para. 47]; 17-6.4, 17-6.5, 17-6.13, 17-6.14 [para. 48].

Mullan, David J., Administrative Law: Cases, Text and Materials (5th Ed. 2003), pp. 453, 454 [para. 50].

Sopinka, John, Lederman, Sidney N., and Bryant, Alan W., The Law of Evidence in Canada (2nd Ed. 1999), p. 23 [para. 31].

Counsel:

John D. James and John K. Phillips, for the applicant, Lambert "Bert" Lavallee;

E. Christopher Archer and John D. James, for the applicants, Arbour Energy Inc. and Dennis Morice;

John Petch, Q.C, and A.G. Bell, for the respondent, Alberta Securities Commission;

R.S. Wiltshire, for the Attorney General of Alberta;

Glenn S. Solomon, for the respondents by Order, Merendon Mining Corp. Ltd. and Gary Sorenson;

John D. Blair, for Institute for Financial Learning Group of Companies Inc. and Milo Brost.

This application was heard on September 8, 2008, by Wittmann, A.C.J.Q.B., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on January 9, 2009.