R. v. Del Bianco (D.J.), (2008) 456 A.R. 134 (QB)

• Judge: Graham, P.C.J.
• Court: Provincial Court of Alberta (Canada)
• Case Date: September 05, 2008
• Citations: (2008), 456 A.R. 134 (QB);2008 ABPC 248

R. v. Del Bianco (D.J.) (2008), 456 A.R. 134 (QB)

MLB headnote and full text

Temp. Cite: [2008] A.R. TBEd. SE.059

Her Majesty the Queen v. David John Del Bianco (041472770P1-01-001-004; 050386945P1-01-001-009; 2008 ABPC 248)

Indexed As: R. v. Del Bianco (D.J.)

Alberta Provincial Court

Graham, P.C.J.

September 5, 2008.

Summary:

The Alberta Securities Commission (ASC) issued sanctions against Del Bianco, requiring him to resign as a director or officer of any issuer, prohibiting him from becoming or acting as a director or officer or as both a director and officer of any issuer for four years and ordering him to cease trading in securities for four years. He was subsequently charged with breaching the ASC's order by acting as director of eight companies alleged to be issuers in Alberta (8 counts) and by trading in securities (2 counts). He was also charged with trading in securities without registration as a salesperson (2 counts).

The Alberta Provincial Court convicted the accused of the eight counts of breaching the ASC's order by acting as a director of the eight corporations, all issuers in Alberta. He was also convicted of one count of trading in securities contrary to the order and one count of trading in securities without proper registration. He was acquitted for jurisdictional reasons on one count of trading in securities and one count of trading while unregistered. He was also acquitted of one other count on which the Crown elected not to proceed.

Constitutional Law - Topic 1581

Extent of powers conferred - Double aspect doctrine - General - [See fifth Securities Regulation - Topic 5316 ].

Constitutional Law - Topic 3614

Paramountcy of federal statutes - Overlapping legislation - Conflict - What constitutes - [See fifth Securities Regulation - Topic 5316 ].

Constitutional Law - Topic 6444

Federal jurisdiction (s. 91) - Criminal law - Matters not criminal - [See fourth Securities Regulation - Topic 5316 ].

Constitutional Law - Topic 7285

Provincial jurisdiction (s. 92) - Property and civil rights - Regulatory statutes - Securities - [See fourth Securities Regulation - Topic 5316 ].

Criminal Law - Topic 7285

Summary conviction proceedings - Informations - Form and content - (incl. sufficiency of charge and jurat) - [See Trials - Topic 1083 ].

Securities Regulation - Topic 1255

Regulatory commissions - Powers or jurisdiction - To investigate or prosecute - [See sixth Securities Regulation - Topic 5316 ].

Securities Regulation - Topic 5015

Registration - Securities advisors and sales persons - Exemptions - [See third Securities Regulation - Topic 5316 ].

Securities Regulation - Topic 5308

Trading in securities - Offences - Defence of due diligence - [See third Securities Regulation - Topic 5316 ].

Securities Regulation - Topic 5316

Trading in securities - Offences - Contravention of securities laws (incl. breach of securities commission order) - The Alberta Securities Commission (ASC) issued sanctions against Del Bianco, requiring him to resign as a director or officer of any issuer, prohibiting him from becoming or acting as a director or officer or as both a director and officer of any issuer for four years and ordering him to cease trading in securities for four years - He was subsequently charged under the Securities Act with breaching the ASC order - He argued that the ASC decisions were not "securities laws" within the meaning of s. 194(1) of the Securities Act and therefore contravention of the order was not an offence under s. 194(1) - The Alberta Provincial Court was satisfied that the ASC had the authority to issue decisions or orders, that ASC orders were "securities laws" and that contravention of an ASC order was an offence under the Securities Act - See paragraphs 65 to 71.

Securities Regulation - Topic 5316

Trading in securities - Offences - Contravention of securities laws (incl. breach of securities commission order) - The Alberta Securities Commission (ASC) issued sanctions against Del Bianco, requiring him to resign as a director or officer of any issuer, prohibiting him from becoming or acting as a director or officer or as both a director and officer of any issuer for four years and ordering him to cease trading in securities for four years - He was subsequently charged under the Securities Act with breaching the ASC order - He argued that the companies to which the counts referred did not fall within the definition of "issuer" pursuant to the ASC order, being private issuers or private companies - The Alberta Provincial Court rejected this argument - The court stated that "All of the corporations of which the accused was director had issued securities in the form of 'shares' and were therefore 'issuers' pursuant to the Securities Act. The accused was the 100% shareholder. The prohibitions in the ASC order mirror the legislation; they require him to resign any position as a director or officer of 'any issuer', and prohibit him from becoming or acting as a director and/or officer of 'any issuer'. Any doubt as to whether the accused might have been entitled to an exemption from registration is erased by the terms of the ASC order which expressly states that the accused is 'denied all of the exemptions contained in Alberta securities laws for four years from the date of these reasons ... '" - See paragraphs 72 to 81.

Securities Regulation - Topic 5316

Trading in securities - Offences - Contravention of securities laws (incl. breach of securities commission order) - The Alberta Securities Commission (ASC) issued sanctions against Del Bianco, requiring him to resign as a director or officer of any issuer, prohibiting him from becoming or acting as a director or officer or as both a director and officer of any issuer for four years and ordering him to cease trading in securities for four years - He was subsequently charged with breaching the ASC's order by acting as director of eight companies alleged to be issuers in Alberta (8 counts) and by trading in securities (2 counts) - He was also charged with trading in securities without registration as a salesperson (2 counts) - Issues arose as to mens rea and whether any exemptions from the registration requirements were applicable - The Alberta Provincial Court stated that "There is no mens rea element in these offences and no evidence presented as to whether the accused took any steps toward exercising due diligence to prevent commission of the offence. Statutory exemptions from the requirement for registration would not have provided a legal defence to a breach of the ASC order. With respect to the offences of trading in securities without registration as a salesperson, the ASC order expressly denies the accused of all of the exemptions contained in Alberta securities laws for the term of the order and in any case, no evidence was presented to substantiate the same" - See paragraphs 82 to 94.

Securities Regulation - Topic 5316

Trading in securities - Offences - Contravention of securities laws (incl. breach of securities commission order) - The accused was charged with breaching an Alberta Securities Commission order contrary to s. 194(1) of the Alberta Securities Act) - Section 194(1) provided that "A person or company that contravenes Alberta securities laws is guilty of an offence and is liable to a fine of not more than $5,000,000 or to imprisonment for a term of not more than 5 years less a day, or to both" - The accused argued that because of the severity of the penalties, s. 194(1) was criminal law and therefore ultra vires the provincial legislature - The Alberta Provincial Court stated that severity of the penalty was not the test for constitutionality - The provinces had the power to regulate trade in corporate securities as a matter within property and civil rights in the province under s. 92(13) of the Constitution Act - Section 194(1) was not ultra vires the provincial legislature - See paragraphs 99 to 111.

Securities Regulation - Topic 5316

Trading in securities - Offences - Contravention of securities laws (incl. breach of securities commission order) - The accused was charged under the Alberta Securities Act with breaching an Alberta Securities Commission order and with trading in securities without proper registration - The accused argued that there was inappropriate duplication between the Securities Act and the Criminal Code (i.e., offences under the Securities Act were already dealt with under ss. 380-402 of the Criminal Code) - The Alberta Provincial Court found no duplication and therefore no express contradiction between the Securities Act and ss. 380-402 of the Criminal Code - The court stated that "Securities regulation has been recognized as having a 'double aspect' in which both federal and provincial laws may validly operate. Mere duplication of legislation, where there is any, will not invoke the doctrine of paramountcy unless there is an 'express contradiction'. That is, that compliance with one will necessarily mean breach of the other" - See paragraphs 112 to 116.

Securities Regulation - Topic 5316

Trading in securities - Offences - Contravention of securities laws (incl. breach of securities commission order) - The accused was charged under the Alberta Securities Act with breaching an Alberta Securities Commission (ASC) order - The accused argued that it was improper for the ASC to pursue a breach of an administrative order with a quasi-criminal prosecution (i.e., that the ASC was bound to pursue proceedings in an administrative forum) - He argued further that the ASC improperly exercised its prosecutorial discretion by electing to proceed with penal sanctions for breach of the order - The Alberta Provincial Court rejected the accused's arguments - The court stated that "There is no application before the court for a stay of the charges, no Charter notice filed, and no supporting evidence of improper motives or abuse of the court's process presented by Defence Counsel in argument related to prosecutorial discretion. It may be stated nonetheless, that by electing to proceed with prosecution for failure to comply with an administrative order, the Alberta Securities Commission is simply exercising one of its statutorily prescribed options for enforcement set out in the Securities Act. Exercising such an option, particularly for failure to comply with a administrative order imposed after a hearing, demonstrates a measured, rather than an abusive or oppressive response to the Accused's action" - See paragraphs 117 to 141.

Trials - Topic 1083

Summary convictions - Informations - Form - Del Bianco was charged under the Securities Act in two informations with breaching an Alberta Securities Commission order by acting as director of eight companies (8 counts) - The charges alleged that the offences took place "between February 14, 2003 and the present, at Calgary, Alberta, and elsewhere ... " - The accused argued that the use of the words "present" in reference to the date of the offence and "elsewhere" in reference to the place of the offence made some of the charges too vague to allow him to make full answer and defence - The Alberta Provincial Court held that there was no evidence that the accused had been misled or prejudiced in his defence by the form of the charges - There was no need for an amendment as to the place of the offence, because, while the use of the phrase "and elsewhere" in the charge was "unusual", there was sufficient evidence to establish that the offences took place within the territorial jurisdiction of the court (i.e., Alberta) - As to the time and date of the offences, again, the use of the phrase "and the present", was "unusual" - Time was not an essential element of these offences, there being no suggestion that the ASC order was not in force during the time period - However, the offence date could not have proceeded beyond the dates on which the informations were sworn, specifically December 15, 2004 and April 7, 2005; therefore, the informations were amended by deleting "the present" and substituting the dates the informations were sworn - See paragraphs 41 to 64.

Words and Phrases

Securities laws - The Alberta Provincial Court discussed the meaning of this phrase as it was used in s. 194(1) of the Securities Act, R.S.A. 2000, c. S-4 - See paragraphs 65 to 71.

Cases Noticed:

R. v. G.B. et al. (No. 2), [1990] 2 S.C.R. 30; 111 N.R. 31; 86 Sask.R. 111, refd to. [para. 47].

Brodie v. R., [1936] S.C.R. 188, refd to. [para. 47].

R. v. Clark (1974), 19 C.C.C.(2d) 445 (Alta. C.A.), refd to. [para. 53].

R. v. Daoust (C.) et al., [2004] 1 S.C.R. 217; 316 N.R. 203, refd to. [para. 55].

R. v. Moore, [1988] 1 S.C.R. 1097; 85 N.R. 195, refd to. [para. 57].

R. v. McCrae and Ramsay (1981), 25 Man.R.(2d) 32 (Co. Ct.), refd to. [para. 58].

R. v. Alexander, 2005 BCPC 480, refd to. [para. 79].

R. v. Sault Ste. Marie (City) (1978), 21 N.R. 295; 40 C.C.C.(2d) 353 (S.C.C.), refd to. [para. 84].

Lymburn v. Mayland, [1932] A.C. 318; 57 C.C.C. 311 (P.C.), refd to. [para. 88].

R. v. Boyle (K.P.) et al. (2001), 300 A.R. 284; 2001 ABPC 152, refd to. [para. 88].

R. v. Buck River Resources Ltd. (1984), 25 B.L.R. 209 (Alta. Prov. Ct.), affd. [1988] A.J. No. 1248 (Q.B.), refd to. [para. 89].

R. v. Lee's Poultry Ltd. (1985), 7 O.A.C. 100 (C.A.), refd to. [para. 93].

R. v. Daniels (1990), 60 C.C.C.(3d) 392 (B.C.C.A.), refd to. [para. 93].

R. v. Henry (K.J.) (2004), 362 A.R. 309 (Q.B.), refd to. [para. 96].

R. v. Dwernychuk (M.K.) (1992), 135 A.R. 31; 33 W.A.C. 31; 77 C.C.C.(3d) 385 (C.A.), leave to appeal refused (1993), 151 N.R. 400; 141 A.R. 317; 46 W.A.C. 317; 79 C.C.C.(3d) vi (S.C.C.), refd to. [para. 96].

R. v. Kutynec (1992), 52 O.A.C. 59; 70 C.C.C.(3d) 289 (C.A.), refd to. [para. 96].

R. v. Loveman (1992), 52 O.A.C. 94; 71 C.C.C.(3d) 123 (C.A.), refd to. [para. 96].

Smith v. R., [1960] S.C.R. 238, refd to. [para. 99].

Multiple Access Ltd. v. McCutcheon et al., [1982] 2 S.C.R. 161; 44 N.R. 181, refd to. [para. 99].

R. v. Corry (1932), 26 Alta. L.R. 390 (C.A.), refd to. [para. 103, footnote 8].

R. v. Wason, [1890] O.J. No. 50 (C.A.), refd to. [para. 104].

R. v. Chief, [1964] 3 C.C.C. 347 (Man. Q.B.), affd. (1964), 44 D.L.R.(2d) 108 (Man. C.A.), refd to. [para. 106].

R. v. Skelley, [1981] B.C.J. No. 1884 (S.C.), affd. [1982] B.C.J. No. 223 (C.A.), refd to. [para. 107].

R. v. Dhalin (1919), 27 B.C.R. 564, refd to. [para. 107].

R. v. Hauser, [1979] 1 S.C.R. 984; 26 N.R. 541; 16 A.R. 91, refd to. [para. 108].

Knox Contracting Ltd. and Knox v. Canada and Minister of National Revenue et al., [1990] 2 S.C.R. 338; 110 N.R. 171; 106 N.B.R.(2d) 408; 265 A.P.R. 408, refd to. [para. 110].

Smith v. R., [1960] S.C.R. 776, refd to. [para. 113].

Wilder et al. v. Ontario Securities Commission (2001), 142 O.A.C. 300; 53 O.R.(3d) 519 (C.A.), refd to. [para. 120].

Gregory & Co. v. Quebec Securities Commission, [1961] S.C.R. 584, refd to. [para. 129].

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. 129].

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. 129].

Ironside et al. v. Smith (1998), 223 A.R. 379; 183 W.A.C. 379; 1998 ABCA 366, refd to. [para. 131].

R. v. Toronto Electric Commissioners (1994), 24 W.C.B.(2d) 267; 1994 CLB 2372 (Ont. C.J. Prov. Div.), refd to. [para. 136].

R. v. Keyowski (1988), 83 N.R. 296; 65 Sask. R. 122; 40 C.C.C.(3d) 481 (S.C.C.), refd to. [para. 136].

R. v. Bennett (1991), 46 O.A.C. 99; 64 C.C.C.(3d) 449 (C.A.), refd to. [para. 136].

R. v. Power (E.) (1994), 165 N.R. 241; 117 Nfld. & P.E.I.R. 269; 365 A.P.R. 269; 89 C.C.C.(3d) 1 (S.C.C.), refd to. [para. 137].

R. v. Commander Business Furniture Inc., 1992 CarswellOnt 222 (C.J. Prov. Div.), refd to. [para. 137].

Statutes Noticed:

Securities Act, R.S.A. 2000, c. S-4, sect. 194(1) [para. 65]; sect. 198 [para. 75].

Authors and Works Noticed:

Hogg, Peter W., Constitutional Law of Canada (5th Ed.) (2008 Looseleaf Supp.), pp. 18.13 [para. 100]; 21.10 [para. 99, footnote 7].

Counsel:

Don Young, for the Crown;

Robert W. Hladun, Q.C., for the defence.

This matter was heard by Graham, P.C.J., of the Alberta Provincial Court, who delivered the following decision on September 5, 2008.