Shapray v. British Columbia Securities Commission, 2009 BCCA 322

• Judge: Newbury, Bauman and Groberman, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: July 08, 2009
• Jurisdiction: British Columbia
• Citations: 2009 BCCA 322;(2009), 274 B.C.A.C. 58 (CA)

Shapray v. Securities Comm. (2009), 274 B.C.A.C. 58 (CA);

    463 W.A.C. 58

MLB headnote and full text

Temp. Cite: [2009] B.C.A.C. TBEd. JL.029

Howard Shapray (appellant/petitioner) v. British Columbia Securities Commission (respondent/respondent)

(CA035313; 2009 BCCA 322)

Indexed As: Shapray v. British Columbia Securities Commission

British Columbia Court of Appeal

Newbury, Bauman and Groberman, JJ.A.

July 8, 2009.

Summary:

Shapray, a lawyer, often acted on behalf of persons who were the subject of investigative orders or summons under the Securities Act (B.C.). He and his clients were "subject to and directly affected by" s. 148(1) of the Act which prohibited any person from disclosing, except to his or her counsel, "any information or evidence obtained or sought to be obtained, or the name of any witness examined" under ss. 143, 144 or 145 of the Act, unless the Commission had consented to such disclosure. Under s. 155 it was an offence punishable by a fine of up to $3 million or imprisonment for up to three years or both to violate this prohibition. Shapray sought a declaration that s. 148(1) violated his freedom of expression under s. 2(b) of the Charter.

The British Columbia Supreme Court, in a decision reported at [2007] B.C.T.C. Uned. E05, held that s. 148(1) violated s. 2(b) of the Charter, but was saved by s. 1. Shapray appealed.

The British Columbia Court of Appeal allowed the appeal, but delayed the coming into effect of the order of invalidity for 12 months.

Civil Rights - Topic 1851.3

Freedom of speech or expression - Limitations on - Securities regulation - Shapray, a lawyer, often acted on behalf of persons who were the subject of investigative orders or summons under the Securities Act (B.C.) - He and his clients were "subject to and directly affected by" s. 148(1) of the Act which prohibited any person from disclosing, except to his or her counsel, "any information or evidence obtained or sought to be obtained, or the name of any witness examined" under ss. 143, 144 or 145 of the Act, unless the Commission had consented to such disclosure - Under s. 155 it was an offence punishable by a fine of up to $3 million or imprisonment for up to three years or both to violate this prohibition - A chambers judge held that s. 148(1) violated s. 2(b) of the Charter, but was saved by s. 1 - Shapray appealed - The British Columbia Court of Appeal allowed the appeal, but delayed the coming into effect of the order of invalidity for 12 months - Section 148(1) was a limit imposed by law on free expression that was "drafted in very general terms" and which gave "no recognition to disclosure and access interests" - The restriction did not apply to a disclosure to counsel and, by reason of the Commission's own policy, did not apply once a notice of hearing was issued - Otherwise, it continued forever - It applied whether or not the securities in question traded on a public market; whether the matter under investigation was ongoing or historical; and whether or not it was likely that a security's market price or a person's privacy interests would be affected by the disclosure - It contemplated that the Commission could consent to an exception, but provided no guidance as to when such consent would be granted - In order to obtain a consent a lawyer was likely to be required to disclose information to the Commission that he would not otherwise find it prudent to disclose - There was no evidence as to when the Commission granted the consent or the factors that it considered in doing so - It simply asserted as a general proposition that disclosure of information during an investigation would undermine its effectiveness, could damage a person or company's reputation, violate privacy, and unfairly affect the price of securities - Compared to the "flexible and contextual" test courts applied to publication bans in criminal cases, it was a blunt instrument indeed - A prohibition on disclosure would be justifiable in many cases in which Commission staff were carrying out investigations - However, a blanket provision like this one did not fall within a range of reasonable alternatives that minimally impaired free expression - See paragraphs 34 to 60.

Civil Rights - Topic 8348

Canadian Charter of Rights and Freedoms - Application - Exceptions - Reasonable limits prescribed by law (Charter, s. 1) - [See Civil Rights - Topic 1851.3 ].

Civil Rights - Topic 8380.2

Canadian Charter of Rights and Freedoms - Denial of rights - Remedies - Declaration of statute invalidity - [See Civil Rights - Topic 1851.3 ].

Civil Rights - Topic 8584

Canadian Charter of Rights and Freedoms - Practice - Time for raising Charter issues - Shapray, a lawyer, often acted on behalf of persons who were the subject of investigative orders or summons under the Securities Act (B.C.) - He and his clients were "subject to and directly affected by" s. 148(1) of the Act which prohibited any person from disclosing, except to his or her counsel, "any information or evidence obtained or sought to be obtained, or the name of any witness examined" under ss. 143, 144 or 145 of the Act, unless the Commission had consented to such disclosure - Shapray sought a declaration that s. 148(1) violated his freedom of expression under s. 2(b) of the Charter - The Attorney General argued that the evidentiary foundation was inadequate for the challenge to proceed - On appeal, the British Columbia Court of Appeal held that even though the evidence was "thin", the chambers judge did not err in entering into the constitutional analysis in the absence of an (unsuccessful) application by Shapray for the Commission's consent to disclose information in the instances described in his affidavit - Shapray's case had to stand or fall on the general information he provided, just as the Commission's defence had to stand or fall on the affidavit of its Director of Corporate Finance - The latter's affidavit provided no details as to the circumstances in which statutory consent was granted and that kind of information was only within the Commission's ability to provide - See paragraphs 20 to 28.

Civil Rights - Topic 8586

Canadian Charter of Rights and Freedoms - Practice - Method of raising Charter issues - [See Civil Rights - Topic 8584 ].

Securities Regulation - Topic 1253

Regulatory commissions - Powers or jurisdiction - Respecting disclosure of information - [See Civil Rights - Topic 1851.3 and Securities Regulation - Topic 5302 ].

Securities Regulation - Topic 5302

Trading in securities - Offences - Legislation - Interpretation - Shapray, a lawyer, often acted on behalf of persons who were the subject of investigative orders or summons under the Securities Act (B.C.) - He and his clients were "subject to and directly affected by" s. 148(1) of the Act which prohibited any person from disclosing, except to his or her counsel, "any information or evidence obtained or sought to be obtained, or the name of any witness examined" under ss. 143, 144 or 145 of the Act, unless the Commission had consented to such disclosure - The British Columbia Court of Appeal discussed the scope of s. 148(1) of the Act - See paragraphs 29 to 33.

Cases Noticed:

Global Securities Corp. v. British Columbia Securities Commission et al., [2000] 1 S.C.R. 494; 252 N.R. 290; 134 B.C.A.C. 207; 219 W.A.C. 207; 2000 SCC 21, refd to. [para. 5].

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. 5].

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. 5].

Smolensky v. British Columbia Securities Commission, [2003] B.C.T.C. 1189; 17 B.C.L.R.(4th) 145; 2003 BCSC 1189, refd to. [para. 20].

Smolensky v. British Columbia Securities Commission (2004), 193 B.C.A.C. 240; 316 W.A.C. 240; 23 B.C.L.R.(4th) 205; 2004 BCCA 81, refd to. [para. 21].

Deloitte & Touche LLP v. Ontario Securities Commission (2003), 310 N.R. 376; 179 O.A.C. 1; 2003 SCC 61, refd to. [para. 21].

R. v. Oakes, [1986] 1 S.C.R. 103; 65 N.R. 87; 14 O.A.C. 335, refd to. [para. 25].

Multani v. Commission scolaire Marguerite-Bourgeoys et al., [2006] 1 S.C.R. 256; 345 N.R. 201; 2006 SCC 6, refd to. [para. 26].

Baier et al. v. Alberta, [2007] 2 S.C.R. 673; 365 N.R. 1; 412 A.R. 300; 404 W.A.C. 300; 2007 SCC 31, refd to. [para. 30].

Irwin Toy Ltd. v. Québec (Procureur général), [1989] 1 S.C.R. 927; 94 N.R. 167; 24 Q.A.C. 2, refd to. [para. 31].

JTI-Macdonald Corp. et al. v. Canada (Attorney General) (2007), 364 N.R. 89; 2007 SCC 30, refd to. [para. 35].

Health Services and Support - Facilities Subsector Bargaining Association et al. v. British Columbia, [2007] 2 S.C.R. 391; 363 N.R. 226; 242 B.C.A.C. 1; 400 W.A.C. 1; 2007 SCC 27, refd to. [para. 35].

R. v. Mentuck (C.G.), [2001] 3 S.C.R. 442; 277 N.R. 160; 163 Man.R.(2d) 1; 269 W.A.C. 1; 2001 SCC 76, refd to. [para. 45].

Canadian Broadcasting Corp. v. Dagenais et al., [1994] 3 S.C.R. 835; 175 N.R. 1; 76 O.A.C. 81, refd to. [para. 46].

R. v. Toronto Star Newspaper Ltd. et al., [2005] 2 S.C.R. 188; 335 N.R. 201; 200 O.A.C. 348; 2005 SCC 41, refd to. [para. 47].

RJR-MacDonald Inc. et Imperial Tobacco Ltd. c. Canada (Procureur général), [1995] 3 S.C.R. 199; 187 N.R. 1, refd to. [para. 54].

Lovell v. Griffin (City) (1938), 303 U.S. 444 (Sup. Ct.), refd to. [para. 56].

Saia v. New York (1948), 334 U.S. 558 (Sup. Ct.), refd to. [para. 56].

Shuttlesworth v. Birmingham (City) (1969), 394 U.S. 147 (Sup. Ct.), refd to. [para. 56].

Lakewood (City) v. Plain Dealer Publishing Co. (1988), 486 U.S. 750 (Sup. Ct.), refd to. [para. 56].

Forsythe County, Georgia v. The Nationalist Movement (1992), 505 U.S. 123 (Sup. Ct.), refd to. [para. 56].

Epilepsy Canada v. Alberta (Attorney General) et al. (1994), 155 A.R. 212; 73 W.A.C. 212; 115 D.L.R.(4th) 501 (C.A.), refd to. [para. 57].

Ontario Film and Video Appreciation Society and Ontario Board of Censors, Re (1983), 147 D.L.R.(4th) 58 (H.C.), affd. (1984), 2 O.A.C. 388; 5 D.L.R.(4th) 766 (C.A.), refd to. [para. 57].

Little Sisters Book and Art Emporium et al. v. Canada (Minister of Justice) et al., [2000] 2 S.C.R. 1120; 263 N.R. 203; 145 B.C.A.C. 1; 237 W.A.C. 1, refd to. [para. 57].

R. v. Glad Day Bookshops Inc. et al., [2004] O.T.C. 368; 70 O.R.(3d) 691 (Sup. Ct.), refd to. [para. 57].

Statutes Noticed:

Securities Act, R.S.B.C. 1996, c. 418, sect. 148(1) [para. 8].

Authors and Works Noticed:

Hogg, Peter W., Constitutional Law of Canada (5th Ed. 2007), pp. 43-14, 43-15 [para. 56].

Counsel:

H. Shapray, Q.C., acting on his own behalf, and B. Cramer, for the appellant;

D. Muir, for the respondent;

B.A. Mackey, for the Attorney General of British Columbia.

This appeal was heard at Vancouver, B.C., on May 21 and 22, 2009, by Newbury, Bauman and Groberman, JJ.A., of the British Columbia Court of Appeal. Newbury, J.A., delivered the following reasons for judgment for the court on July 8, 2009.