The respondents were senior managers of Prime and Calpine, two reporting issuers involved in mineral exploration.
The British Columbia Securities Commission found that the respondents breached the timely disclosure provisions of the Securities Act by failing to disclose material changes, including drilling results, a private placement, and a contractual dispute, before engaging in securities transactions.
The Court of Appeal set aside the Commission's orders, finding errors of law in the interpretation of "material change".
The Supreme Court of Canada allowed the appeal, holding that considerable deference is owed to specialized tribunals like the Securities Commission, even where there is a statutory right of appeal and no privative clause.
The Court restored the Commission's findings and orders, confirming that drilling results can constitute a material change and that senior management has a duty to inquire about material changes before causing an issuer to engage in securities transactions.
