Multiple Access Ltd. v. McCutcheon, Lowry, Craig, Gibbs and Jarvis, (1982) 44 N.R. 181 (SCC)

• Judge: Laskin, C.J.C., Martland, Ritchie, Dickson, Beetz, Estey, McIntyre, Chouinard and Lamer, JJ.
• Court: Supreme Court (Canada)
• Case Date: August 09, 1982
• Jurisdiction: Canada (Federal)
• Citations: (1982), 44 N.R. 181 (SCC);[1982] 2 SCR 161;1982 CanLII 55 (SCC);138 DLR (3d) 1;18 BLR 138;44 NR 181;[1982] SCJ No 66 (QL)

Multiple Access Ltd. v. McCutcheon (1982), 44 N.R. 181 (SCC)

MLB headnote and full text

Multiple Access Limited v. McCutcheon, Lowry, Craig, Gibbs and Jarvis (defendants) and Attorneys General of Canada, Quebec, New Brunswick, Alberta and Saskatchewan (intervenants)

Indexed As: Multiple Access Ltd. v. McCutcheon, Lowry, Craig, Gibbs and Jarvis

Supreme Court of Canada

Laskin, C.J.C., Martland, Ritchie, Dickson, Beetz, Estey, McIntyre, Chouinard and Lamer, JJ.

August 9, 1982.

Summary:

On a motion by two shareholders of Multiple Access Limited the Ontario Securities Commission was ordered to commence action in the name of and on behalf of the company against the the defendant president, directors and other officers of the company as a result of their insider trading contrary to s. 113 of the Securities Act, R.S.O 1970, c. 426. The defendants pleaded that ss. 113 and 114 of the Securities Act were duplications of ss. 100.4 and 100.5 of the Canada Corporations Act and were inoperative by the doctrine of paramountcy. The issue of paramountcy was heard before trial by the Ontario Weekly Court, which ruled that ss. 113 and 114 were not inoperative. The Ontario Divisional Court reversed and held that the doctrine of paramountcy invalidated ss. 113 and 114. The Ontario Court of Appeal dismissed the appeal. The company appealed.

The Supreme Court of Canada allowed the appeal and held that the doctrine of paramountcy did not invalidate and render inoperative ss. 113 and 114. See paragraphs 1 to 51.

Estey, J., Beetz and Chouinard, JJ., concurring, would have allowed the appeal, but on the ground that ss. 100.4 and 100.5 of the Canada Corporations Act were ultra vires Parliament. See paragraphs 52 to 102.

Constitutional Law - Topic 1581

Extent of powers conferred - Double aspect doctrine - General - The Supreme Court of Canada held that the similar insider trading provisions of the Ontario Securities Act and the Canada Corporations Act have both a securities law and a companies law aspect and that, since the province had jurisdiction over securities and Parliament jurisdiction over companies, the legislation of both on the matter could co-exist - See paragraphs 29 to 32.

Constitutional Law - Topic 3504

Paramountcy of federal statutes - General principles - Requirement of conflict or repugnancy - The insider trading provisions of both the Ontario Securities Act and the Canada Corporations Act were similar - The Supreme Court of Canada held that such duplication did not constitute conflict for the purpose of invoking the doctrine of paramountcy of federal legislation - The court stated that the insider trading provisions of both statutes could live and operate concurrently - See paragraphs 37 to 49.

Constitutional Law - Topic 4703

Peace, order and good government - Companies - Federally incorporated - The Supreme Court of Canada held that the insider trading provisions of the Canada Corporations Act were valid federal legislation within the peace, order and good government clause of s. 91 of the British North America Act - See paragraphs 12 to 33.

Constitutional Law - Topic 6724

Federal jurisdiction - Corporations - Insider trading - The Supreme Court of Canada held that the insider trading provisions of the Canada Corporations Act were within the federal jurisdiction over corporations - See paragraphs 12 to 33.

Constitutional Law - Topic 7285

Provincial jurisdiction - Property and civil rights - Securities - The Supreme Court of Canada held that the insider trading provisions of the Ontario Securities Act were within the provincial jurisdiction over securities - See paragraphs 34 to 36.

Cases Noticed:

Percival v. Wright, [1902] 2 Ch. 421, consd. [para. 2].

Construction Montcalm Inc. v. The Minimum Wage Commission, [1979] 1 S.C.R. 754; 25 N.R. 1, consd. [para. 12].

Solicitor General of Canada v. The Royal Commission of Inquiry into the Confidentiality of Health Records in Ontario (1981), 38 N.R. 588, consd. [para. 12].

Citizens' Insurance Co. v. Parsons (1881), 7 App. Cas. 96, appld. [para. 17].

John Deere Plow Company Limited v. Warton, [1915] A.C. 330 (P.C.), consd. [paras. 21, 28, 35, 69, 72, 75].

Rathie v. Montreal Trust Company (1952), 6 W.W.R.(N.S.) 652, consd. [para. 21].

Lukey v. The Ruthenian Farmers' Elevator Co. Ltd., [1924] S.C.R. 56, consd. [paras. 21, 82].

Attorney General for Manitoba v. Attorney General for Canada, [1929] A.C. 260, consd. [paras. 21, 69, 82].

Reference Concerning the Constitutional Validity of Section 110 of the Dominion Companies Act, [1934] S.C.R. 653, consd. [paras. 22, 69, 73].

Esso Standard (Inter-America) Inc. v. J.W. Enterprises Inc. et al., [1963] S.C.R. 144, consd. [paras. 24, 66, 77].

Smith v. The Queen, [1960] S.C.R. 776, consd. [paras. 31, 32, 35, 39, 55].

Lymburn v. Mayland, [1932] A.C. 318, consd. [paras. 35, 69, 73, 91].

Great West Saddlery Co. Ltd. v. The King, [1921] 2 A.C. 91, consd. [paras. 35, 69, 72].

Gregory and Company Inc. v. The Quebec Securities Commission, [1961] S.C.R. 584, consd. [paras. 35, 82].

Canadian Indemnity Co., The v. Attorney General of British Columbia, [1977] 2 S.C.R. 504; 11 N.R. 466, consd. [para. 36].

Robinson v. Countrywide Factors Ltd., [1978] 1 S.C.R. 753, consd. [para. 40].

Letain v. Conwest Exploration Company Limited (1960), 23 D.L.R.(2d) 444 (B.C.C.A.), consd. [paras. 69, 77].

Morgan and Jacobsen v. Attorney General for P.E.I., [1976] 2 S.C.R. 349; 5 N.R. 455, consd. [para. 69].

A.G. for Ontario v. A.G. for Canada, [1896] A.C. 348 (P.C.), consd. [para. 71].

Local Prohibition Case, [1896] A.C. 348 (P.C.), consd. [para. 71].

A.G. for Canada v. A.G. for B.C., [1930] A.C. 111 (P.C.), consd. [para. 71].

Fish Canneries Case, [1930] A.C. 111 (P.C.), consd. [para. 71].

Pacific Coast Coin Exchange v. Ontario Securities Commission, [1978] 2 S.C.R. 112; 18 N.R. 52, consd. [para. 82].

American Sumatra Tabacco Corporation v. Securities and Exchange Commission, 110 F. 2d 117 (U.S.C.A. (D.C.), 1940), consd. [para. 87].

Smolowe v. Delendo Corporation et al., 36 F. Supp. 790 (D.C., S.D.N.Y., 1940), consd. [para. 87].

Keech v. Sanford (1726), 25 E.R. 223, consd. [para. 93].

Zwicker v. Stanbury, [1953] 2 S.C.R. 438, consd. [para. 93].

Regal (Hastings) Ltd. v. Gulliver, [1942] 1 All E.R. 378 (H.L.), consd. [para. 93].

Boardman v. Phipps, [1967] 2 A.C. 46 (H.L.), consd. [para. 93].

Cook v. Deeks, [1916] 1 A.C. 554 (P.C.), consd. [para. 93].

Canadian Aero Services Ltd. v. O'Malley, [1974] S.C.R. 592, consd. [para. 93].

Ex Parte James (1803), 32 E.R. 385, consd. [para. 93].

Smolowe v. Delendo Corporation, 136 F. 2d 231 (Second Circuit, 1943), consd. [para. 94].

Statutes Noticed:

British North America Act, 1867, sect. 91(2), sect. 92(11), sect. 92(13), sect. 92(16).

Canada Corporations Act, R.S.C. 1970, c. C-32, sect. 100(1), sect. 100.1(5) [para. 62]; sect. 100.4, sect. 100.5 [paras. 4, 61]; sect. 125 [para. 62].

Canada Corporations Act Regulations, Insider Trading Regulations, S.O.R. 71-125, P.C. 1971-539 [para. 68].

Insider Trading Regulations - see Canada Corporations Act Regulations above.

Securities Act, R.S.O. 1970, c. 426, sect. 1(1)(22) [para. 81]; sect. 109 [para. 89]; sect. 113, sect. 114 [paras. 4, 79].

Authors and Works Noticed:

Abel, Laskin's Canadian Constitutional Law (1975), p. 117 [para. 43].

Anisman, The Proposals for Securities Market Law for Canada: Purpose and Process (1981), 19 Osgoode Hall L.J. 329, 352 [para. 15].

Anisman and Hogg, Proposals for a Securities Market Law for Canada, "Constitutional Aspects of Federal Securities Legislation" (1979), vol. 3, p. 137 [paras. 33, 35].

Brudney, Insiders, Outsiders and Informational Advantages Under the Federal Securities Laws (1979), 93 Harv. L. Rev. 322, 344 [para. 26].

Gower, Principles of Modern Company Law (4th Ed. 1979), p. 631 [para. 93].

Hogg, Constitutional Law of Canada (1977), pp. 102 [para. 5]; 110 [paras. 42, 47]; 11 [para. 42]; 351 [para. 21]; 553 [para. 74].

Lederman, The Concurrent Operation of Federal and Provincial Laws in Canada (1962-63), 9 McGill L.J. 185 [paras. 28, 43, 48].

Lederman, The Courts and the Canadian Constitution, "Classification of Laws and the British North America Act" (1964), p. 177 at 193 [para. 29].

Wegenast, F.W., Canadian Companies (1931), pp. 38-44 [para. 70].

Williamson, Supplement to Securities Regulation in Canada, p. 358 [para. 17].

Ziegel, Studies in Canadian Company Law (1967) [paras. 17, 28, 86].

Counsel:

John J. Robinette, Q.C., for the appellant and the Attorney General for Ontario;

Bryan Finlay and N.W.C. Ross, for the respondent John O. McCutcheon;

P.S.A. Lamek, Q.C., and M.J. Penman, for the respondents David K. Lowry and John Craig;

Jean-K. Samson and Jean-Francois Jobin, for the intervenant the Attorney General of Quebec;

Alan D. Reid, for the intervenant the Attorney General of New Brunswick;

John D. Whyte and M.C. Crane, for the intervenant the Attorney General of Saskatchewan;

William Henkel, Q.C., for the intervenant the Attorney General of Alberta;

T.B. Smith, Q.C., and Morris Rosenberg, for the intervenant the Attorney General of Canada.

This case was heard on November 25 and 26, 1981, at Ottawa, Ontario, before LASKIN, C.J.C., MARTLAND, RITCHIE, DICKSON, BEETZ, ESTEY, McINTRYE, CHOUINARD and LAMER, JJ., of the Supreme Court of Canada.

On August 9, 1982, the judgment of the Supreme Court of Canada was delivered and following opinions were filed:

DICKSON, J. - see paragraphs 1 to 51;

ESTEY, J., dissenting in part - see paragraphs 52 to 102.

LASKIN, C.J.C., MARTLAND, RITCHIE, McINTYRE and LAMER, JJ., concurred with DICKSON, J.

BEETZ and CHOUINARD, JJ., concurred with ESTEY, J.