Brosseau v. Alberta Securities Commission, 1989 CanLII 121 (SCC), [1989] 1 SCR 301
Georges R. Brosseau Appellant
v.
The Alberta Securities Commission Respondent
indexed as: brosseau v. alberta securities commission
1988: March 28; 1989: March 9.
Present: Dickson C.J. and Estey*, Lamer, Wilson, Le Dain*, La Forest and L'Heureux-Dubé JJ.
on appeal from the court of appeal for alberta
Administrative law -- Reasonable apprehension of bias -- Commission conducting hearing with respect to trading in securities and/or the possible deprivation of certain statutory exemptions -- Chairperson of Commission receiving report in his investigative capacity prior to hearing -- Whether or not reasonable apprehension of bias.
Statutes -- Interpretation -- Retrospective effect -- Statute imposing penalty related to a past event -- Goal of penalty not to punish person in question but to protect the public -- Whether or not statute attracting presumption against retrospective effect -- Securities Act, S.A. 1981, c. S-6.1, ss. 28, 165, 166.
Appellant Brosseau, in his capacity as solicitor, prepared the prospectus of a company that later went into bankruptcy. The R.C.M.P. and the Alberta Securities Commission conducted separate investigations into the affairs of the company. The investigation initiated by the Securities Commission found no evidence of any violations of the Securities Act. The R.C.M.P. investigation, however, resulted in the laying of criminal charges against Brosseau and a colleague, Barry. The charges related to the making of false or misleading statements in the prospectus under the `old' Securities Act, R.S.A. 1970, c. 333.
The Commission's investigation was reopened when the Assistant Deputy Minister of the Department of Consumer and Corporate Affairs informed the Chairman that litigation was pending concerning the collapse of the company, and that the Alberta Government was named as a party. There was a suggestion in some documents that the Alberta Government felt that any liability which attached to it would do so because of negligence on the part of the Commission. The Chairman forwarded the materials received from the Assistant Deputy Minister to the Deputy Director, Enforcement, of the Securities Commission. A review was conducted, and a copy of the Commission's staff report was given to the Chairman in March 1984.
The Alberta Securities Commission gave a notice of hearing to determine if Brosseau and Barry should be made subject to a cease trading order and/or possible deprivation of certain statutory exemptions. Brosseau and Barry, after their acquittal on the criminal charges in 1985, brought a preliminary application before the Alberta Securities Commission seeking an order and declaration that the Commission had no jurisdiction to hold a hearing against them. The Commission ruled it had jurisdiction pursuant to s. 26 of the "new" Securities Act, S.A. 1981, c. S-6.1, denied the application and directed that the hearing continue. An appeal to the Alberta Court of Appeal was dismissed. Barry discontinued his appeal before this Court and appellant Brosseau restricted his to two issues. The first was whether or not there was a reasonable apprehension of bias given the fact that the Commission Chairperson, in his investigative capacity, had received a report prior to the hearing from the Deputy Director of Enforcement. The second was whether or not the action taken by the Commission under the "new" Securities Act attracted the presumption against the retrospectivity of statutes. Before this Court, the appellant abandoned all argument based on s. 11 of the Charter.
Held: The appeal should be dismissed.
The facts of this case neither raise a reasonable apprehension of bias nor do they undermine public confidence in the impartiality of the Securities Commission.
The principle that no one should be a judge in his own action underlies the doctrine of "reasonable apprehension of bias". An exception occurs, however, where an overlap of functions is authorized by statute.
It was not necessary to decide to what extent the Chairman initiated the investigation because the Act contemplated his involvement at several stages of the proceedings.
The broad and formal investigatory powers granted the Commission by s. 28 of the Securities Act suggest that the Commission has the implied authority to conduct a more informal internal review. The Commission logically would first investigate the facts before ordering a s. 28 investigation. Only if irregularities were uncovered would the Commission proceed to either a more thorough s. 28 investigation or a hearing to probe more deeply into the matter.
Securities commissions, by their nature, undertake several different functions. The Commission's empowering legislation clearly indicates that the Commission was not meant to act like a court in conducting its internal reviews and certain activities, which might otherwise be considered "biased", form an integral part of its operations. A section 28 investigation is of a different nature from this type of proceeding.
A security commission's protective role, which gives it a special character, its structure and responsibilities, must be considered in assessing allegations of bias. A "reasonable apprehension of bias" affecting the Commission as a whole cannot be said to exist if the Chairman did not act outside of his statutory authority and if there were no evidence to show involvement beyond the Chairman's fulfilling his statutory duties.
The Chairman, as Chief Executive Officer of the Commission, did not exceed the bounds of authority of his office. The report in question was also made available to the appellant.
There was no element of "improper purpose" in the Commission's conduct of the proceedings against the appellant. Any suspicion that the Commission's actions were motivated with a view to escaping its own potential liability in any pending litigation was not supported by the evidence.
The presumption against retrospectivity, that statutes are not to be construed as having retrospective operation unless such a construction is expressly or by necessary implication required by the language of the Act, applies only to "penal" statutes. It does not apply to statutes imposing a penalty related to a past event, so long as the goal of the penalty is not to punish the person in question, but to protect the public. The provisions here are designed to disqualify persons from trading in securities that the Commission found to have committed acts calling their business integrity into question. The presumption against the retrospective effect of statutes is effectively rebutted because these provisions in question are designed to protect the public in keeping with the general regulatory role of the Commission.
Cases Cited
Considered: Re W. D. Latimer Co. and Attorney-General for Ontario (1973), 1973 CanLII 417 (ON SC), 2 O.R. (2d) 391, aff'd sub nom. Re W. D. Latimer Co. and Bray (1974), 1974 CanLII 698 (ON CA), 6 O.R. (2d) 129; distinguished: Angus v. Sun Alliance Insurance Co., 1988 CanLII 5 (SCC), [1988] 2 S.C.R. 256; referred to: Committee for Justice and Liberty v. National Energy Board (the Crowe case), 1976 CanLII 2 (SCC), [1978] 1 S.C.R. 369; Gregory & Co. v. Quebec Securities Commission, 1961 CanLII 75 (SCC), [1961] S.C.R. 584; Nova, An Alberta Corporation v. Amoco Canada Petroleum Co., 1981 CanLII 211 (SCC), [1981] 2 S.C.R. 437; Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, 1975 CanLII 4 (SCC), [1977] 1 S.C.R. 271; R. v. Vine (1875), 10 L.R. Q.B. 195; Re A Solicitor's Clerk, [1957] 3 All E.R. 617.
Statutes and Regulations Cited
Canadian Charter of Rights and Freedoms, ss. 1, 11(d), (h).
Securities Act, R.S.A. 1970, c. 333, s. 136.
Securities Act, S.A. 1981, c. S-6.1, ss. 11, 28, 29, 65, 66, 107, 115, 116, 132, 133, 165, 166.
Authors Cited
Côté, Pierre-André. The Interpretation of Legislation in Canada. Cowansville, Quebec: Yvon Blais, 1984.
Driedger, Elmer A. "Statutes: Retroactive, Retrospective Reflections" (1978), 56 Can. Bar Rev. 264.
Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.
Krauss, Michel. "Réflexions sur la rétroactivité des lois" (1983), 14 R.G.D. 287.
APPEAL from a judgment of the Alberta Court of Appeal (1986), 1986 ABCA 34, 67 A.R. 222, 25 D.L.R. (4th) 730, dismissing an appeal from a judgment of the Alberta Securities Commission. Appeal dismissed.
Rostyk Sadownik, for the appellant.
P. J. McIntyre, for the respondent.
//L'Heureux-Dubé J.//
The judgment of the Court was delivered by
L'HEUREUX-DUBÉ J. -- The facts of this case raise two main issues. The first concerns the existence of a reasonable apprehension of bias with respect to the activities of the Alberta Securities Commission (the Commission). The second deals with the retroactive application of the Alberta Securities Act, S.A. 1981, c. S-6.1, as amended.
Facts
The appellant Brosseau was the solicitor for Dial Mortgage Co. Ltd. (Dial). In his capacity as solicitor, he prepared the company's prospectus, and filed it with the Commission in 1980.
In 1981, it became apparent that Dial was experiencing financial troubles. It was placed in receivership on February 2, 1981, and went into bankruptcy on April 16, 1981.
The Commission was concerned about the collapse of Dial. It ordered its staff to conduct a review of its files to determine if there had been any violation of the Securities Act, R.S.A. 1970, c. 333. On March 13, 1981 the staff reported that there was no evidence of any violations.
In March of 1982 the R.C.M.P. became involved in an investigation surrounding the affairs of Dial. They asked the Commission about its role in approving the Dial prospectus. The investigation was undertaken with a view to the laying of criminal charges. At the request of the R.C.M.P., the Commission provided them with documents from their files.
In early 1983, the Assistant Deputy Minister of the Department of Consumer and Corporate Affairs informed the Chairman of the Commission that litigation was pending which named the Alberta Government as a party to an action concerning the collapse of Dial. There is a suggestion in the documents in the case on appeal that the Alberta government felt that any liability which attached to it would be as a result of negligence on the part of the Commission. Subsequently, the Chairman forwarded the materials received from the Assistant Deputy Minister to the Deputy Director, Enforcement, of the Commission. The Deputy Director directed the Commission staff to conduct an investigation into the matter. The investigation included a review of the Commission's files, as well as meetings with former employees of the Commission, in order to clarify matters relating to the prospectus filed by Dial. The investigators also reviewed seized documents at R.C.M.P. headquarters, and attended an R.C.M.P. interview of the appellant Brosseau.
The Chairman was given a copy of the Commission staff's report on March 13, 1984. A notice of hearing was issued by the commission on June 25, 1984.
Proceedings
I will turn now to a discussion of the proceedings which ensued as a result of the investigations by both the Commission and the R.C.M.P. The investigation involved two individuals, Georges Brosseau and Wayne Barry. The latter, who was originally a party to the appeal, withdrew.
The R.C.M.P. investigation led to the laying of charges against Brosseau and Barry. The charge stated that:
. . . between the 29th day of November, A.D. 1979, and the 2nd day of April, A.D. 1980, at or near the city of Edmonton and elsewhere in the Province of Alberta, did jointly and severally make statements in a prospectus dated the 29th day of August, A.D. 1979, required to be filed or furnished under The Securities Act, 1970 R.S.A. c. 333 or the Regulations enacted thereunder, which said statements at the time and in the light of the circumstances under which they were made, were false or misleading with respect to material facts, the particulars of the said statements appearing in the said prospectus include, but are not limited . . . .
On February 26, 1985, the Alberta Provincial Court held that it had no jurisdiction to proceed with the charges "because the limitation period had lapsed upon swearing of the Information". The accused were acquitted.
On June 25, 1984, pursuant to ss. 165 and 166 of the Alberta Securities Act, the Commission issued a notice of hearing in order to determine whether the Commission should make an order against either or both of them:
(a)under section 165 that trading cease in respect of any securities or that a person or company cease trading in securities or specified securities for a period of time as specified in the order
and to order, or alternatively may order, as against the Respondents, or each of them,
(b)under section 166 that any or all of the exemptions contained in sections 65, 66, 107, 115, 116, 132 and 133, or in the Regulations do not apply to the person or company named in the order.
(One notes that the criminal charges based on substantially the same allegations were brought under the "old" Securities Act, R.S.A. 1970, c. 333, whereas the notice of hearing was based on the provisions of the "new" Securities Act, S.A. 1981, c. S-6.1.)
The hearing before the Commission was adjourned from time to time at the request of the parties in order to allow for the completion of the hearing of the charges in Provincial Court. Ultimately, the hearing before the Commission was never proceeded with, due to a preliminary application brought by Brosseau and Barry. After their acquittal from the criminal charges, they sought an order and declaration that the Commission did not have jurisdiction to hold a hearing against them pursuant to ss. 165 and 166 of the Alberta Securities Act, S.A. 1981, c. S-6.1.
The bases of the preliminary application before the Commission are set out as follows in the decision of the Commission dated September 11, 1985:
1.Double jeopardy -- an infringement of the Respondents' rights as set out in section 11(h) of the Canadian Charter of Rights and Freedoms
2.Bias
3.Improper purpose
4.Expiry of limitation date for commencement of the proceedings
5.Other grounds
The Commission dismissed each of these arguments, ruled it had jurisdiction, denied the application and directed that the hearing continue. Brosseau and Barry appealed the decision to the Alberta Court of Appeal. Stevenson J.A., delivering the unanimous judgment of the Court of Appeal (1986), 1986 ABCA 34, 67 A.R. 222, rejected their contentions and dismissed the appeal.
In their motion for leave to appeal to this Court, Brosseau and Barry raised constitutional issues which the Chief Justice stated as follows:
Does a hearing of the Alberta Securities Commission pursuant to ss. 165 and 166 of the Securities Act, S.A. 1981, c. S-6.1, to determine whether certain persons should be subject to a cease-trading order and deprived of certain exemptions provided by the said Act, infringe or deny the rights guaranteed by s. 11(h) of the Canadian Charter of Rights and Freedoms of persons who previously had been acquitted of an offence under s. 136 of the Securities Act, R.S.A. 1970, c. 333, in respect of the same factual allegations?
Does a hearing of the Alberta Securities Commission pursuant to ss. 165 and 166 of the Securities Act, S.A. 1981, c. S-6.1, infringe or deny the right to a fair and public hearing by an independent and impartial tribunal guaranteed by s. 11(d) of the Canadian Charter of Rights and Freedoms if the Alberta Securities Commission was involved in the investigation of allegations which are to be considered at the hearing?
If and to the extent that such a hearing of the Alberta Securities Commission would infringe or deny rights guaranteed by s. 11(d) or s. 11(h), is such a hearing justifiable under s. 1 of the Canadian Charter of Rights and Freedoms as a reasonable limit prescribed by law?
On March 1, 1988, before this case was to be heard, the appellant Brosseau informed the Court that he was abandoning any argument based on s. 11 of the Charter and would restrict his argument to the following two points:
1.Reasonable apprehension of bias, and
2.Statutory interpretation.
As a consequence, the Attorneys General of Canada, Alberta, Manitoba, Ontario, Quebec and New Brunswick, who had intervened in the case, gave notice of the withdrawal of their intervention.
Issues
After the Charter questions were dropped by the appellant, his two remaining arguments were as follows:
Whether the Court of Appeal erred in holding that, apart from the Charter, participation by the same members of the Commission in both investigative and adjudicatory functions did not raise a reasonable apprehension of bias precluding the Commission from holding the Hearing.
Whether the Court of Appeal erred in holding that the objects of Sections 165 and 166 of the New Act are protective, rather than punitive, and that therefore the presumption against retrospective application of statutes does not apply to prohibit the Commission from holding the Hearing to consider whether sanctions only provided for in the New Act should be imposed against the Appellants in respect of acts alleged to have been committed at a time when the Old Act governed the trading of securities in Alberta.
I will deal with these issues in the order in which they were argued.
Reasonable Apprehension of Bias
The appellant contends that a reasonable apprehension of bias arose by the fact that the Chairman, who had received the investigative report, was also designated to sit on the panel at the hearing of the matter. He objects to the Chairman's participation at both the investigatory and adjudicatory levels.
The maxim nemo judex in causa sua debet esse underlies the doctrine of "reasonable apprehension of bias". It translates into the principle that no one ought to be a judge in his own cause. In this case, it is contended that the Chairman, in acting as both investigator and adjudicator in the same case, created a reasonable apprehension of bias. As a general principle, this is not permitted in law because the taint of bias would destroy the integrity of proceedings conducted in such a manner.
As with most principles, there are exceptions. One exception to the "nemo judex" principle is where the overlap of functions which occurs has been authorized by statute, assuming the constitutionality of the statute is not in issue. A case in point relied on by the respondents, Re W. D. Latimer Co. and Attorney-General for Ontario (1973), 1973 CanLII 417 (ON SC), 2 O.R. (2d) 391, affirmed sub nom. Re W. D. Latimer Co. and Bray (1974), 1974 CanLII 698 (ON CA), 6 O.R. (2d) 129, addresses this particular issue with respect to the activities of a securities commission. In that case, as in this one, members of the panel assigned to hear proceedings had also been involved in the investigatory process. Dubin J.A. for the Court of Appeal found that the structure of the Act itself, whereby commissioners could be involved in both the investigatory and adjudicatory functions did not, by itself, give rise to a reasonable apprehension of bias. He wrote at pp. 140-41:
Where by statute the tribunal is authorized to perform tripartite functions, disqualification must be founded upon some act of the tribunal going beyond the performance of the duties imposed upon it by the enactment pursuant to which the proceedings are conducted. Mere advance information as to the nature of the complaint and the grounds for it are not sufficient to disqualify the tribunal from completing its task.
In order to disqualify the Commission from hearing the matter in the present case, some act of the Commission going beyond its statutory duties must be found.
Administrative tribunals are created for a variety of reasons and to respond to a variety of needs. In establishing such tribunals, the legislator is free to choose the structure of the administrative body. The legislator will determine, among other things, its composition and the particular degrees of formality required in its operation. In some cases, the legislator will determine that it is desirable, in achieving the ends of the statute, to allow for an overlap of functions which in normal judicial proceedings would be kept separate. In assessing the activities of administrative tribunals, the courts must be sensitive to the nature of the body created by the legislator. If a certain degree of overlapping of functions is authorized by statute, then, to the extent that it is authorized, it will not generally be subject to the doctrine of "reasonable apprehension of bias" per se. In this case, the appellant complains that the Chairman was both the investigator and adjudicator and that therefore, the hearing should be prevented from continuing on the grounds of reasonable apprehension of bias.
In the course of deciding this case, it became clear to this Court that the arguments presented by the parties in their factums and in oral argument before this Court were insufficient to properly address these questions. As a result, the parties were requested to provide written submissions in answer to the following questions:
(1) pursuant to what statutory authority was the investigation directed?
(2) was the investigation directed solely at the initiative of the Chairman?
(3) was the investigation confined to documents on file with the Commission, i.e. was it a purely internal investigation or was it broader in scope?
In his written submissions, the appellant claimed that there was no authority for the investigation. He maintained that it was directed solely at the initiative of the Chairman, and was not confined to documents on file. Not surprisingly, the respondents disagreed. They argued that while not specifically authorized by statute, implicit authority for the investigation could be found in the general scheme of the Securities Act.
If the investigation was without statutory authority, and if it was also directed at the initiative of the Chairman, then it is clear that the Chairman was attempting to act in the role of both investigator and adjudicator in circumstances which would not permit an abrogation of the general rules against bias. The appellant claims that the investigation was initiated by the Chairman. The respondent contends that it was, in fact, the Director who ordered the investigation. In my view, the available evidence does not favour one position over the other. While it appears that the Chairman may have had some role in "initiating" the investigation, it is far from clear that he initiated it in the sense of directing what should be done, how, and by whom. However, I do not feel it necessary to decide this point since I believe that the Act contemplates the involvement of the Chairman at several stages of proceedings.
Section 28 of the Securities Act provides authority for the Commission to carry out a full scale investigation which includes a wide range of powers. The person appointed to make the investigation under s. 28 has, by virtue of s. 29, "the same power as is vested in the Court of Queen's Bench for the trial of civil actions." Because of the extensive nature of the powers granted to an investigator under s. 28, such an investigation must be ordered by the Commission, and not by the Chairman alone.
There is no evidence in the present case that a s. 28 investigation was ordered by the Commission. In fact, the record and submissions suggest that this was not the route chosen by the Commission. The appellant contends that the only permissible route for an investigation is s. 28, and that therefore there was no statutory authorization for the action taken by the Chairman.
The respondent argues that the Act implies powers on a different level from the s. 28 formal investigative procedures. It contends that an informal "enforcement review" is the mechanism used by the Commission to bring to its attention those matters which warrant a more in depth investigation. Because of the formalities surrounding the s. 28 investigation, and because of the broad powers conferred, I am inclined to agree that the Commission must have the implied authority to conduct a more informal internal review. It would be unreasonable to say that a securities commission requires express statutory authority to review the documents it has on file, or to keep itself informed of the course of an R.C.M.P. investigation. To do so would be to make mandatory a resort to a s. 28 investigation for what are often simple administrative purposes. Such an approach might have the effect of paralysing the operations of the Commission. It would seem logical that before ordering a s. 28 investigation, the Commission would have first investigated the facts. If no wrongdoing is found, that would end the matter. If irregularities are uncovered, then the Commission could proceed either to a more thorough s. 28 investigation or to order a hearing, as in this case, to probe more deeply into the matter.
Section 11 of the Securities Act provides that the Chairman of the Commission is its Chief Executive Officer. As such, it appears to me that he would necessarily have the authority to receive information from the Assistant Deputy Minister or from the R.C.M.P., pass this material along to the Director of the Commission, require that the Director verify the allegations and complaints, and receive a report of any review made by the Director. There is no evidence that his participation went beyond these bounds. It is also to be noted that the report in question was made available to the appellant.
Certain other factors should be taken into consideration along with the question of statutory authorization. For example, in a specialized body such as the Commission, it is more than likely that the same decision-makers will have repeated dealings with a given party on a number of occasions and for a variety of reasons. It is hardly surprising, given the fact that there is only one Alberta Securities Commission, that the Commission in this case was required to deal with many aspects of the failure of Dial over a period of years.
Securities commissions, by their nature, undertake several different functions. They are involved in overseeing the filing of prospectuses, regulating the trade in securities, registering persons and companies who trade in securities, carrying out investigations and enforcing the provisions of the Act. By their nature, they will have repeated dealings with the same parties. The dealings could be in an administrative or adjudicative capacity. When a party is subjected to the enforcement proceedings contemplated by the s. 165 or s. 166 of the Act, that party is given an opportunity to present its case in a hearing before the Commission, as was done in this case. The Commission both orders the hearing and decides the matter. Given the circumstances, it is not enough for the appellant to merely claim bias because the Commission, in undertaking this preliminary internal review, did not act like a court. It is clear from its empowering legislation that, in such circumstances, the Commission is not meant to act like a court, and that certain activities which might otherwise be considered "biased" form an integral part of its operations. A section 28 investigation is of a different nature from this type of proceeding.
Securities acts in general can be said to be aimed at regulating the market and protecting the general public. This role was recognized by this Court in Gregory & Co. v. Quebec Securities Commission, 1961 CanLII 75 (SCC), [1961] S.C.R. 584, where Fauteux J. observed at p. 588:
The paramount object of the Act is to ensure that persons who, in the province, carry on the business of trading in securities or acting as investment counsel, shall be honest and of good repute and, in this way, to protect the public, in the province or elsewhere, from being defrauded as a result of certain activities initiated in the province by persons therein carrying on such a business.
This protective role, common to all securities commissions, gives a special character to such bodies which must be recognized when assessing the way in which their functions are carried out under their Acts.
The special circumstances of the tribunal in this case are substantially the same as those in the case of Re W. D. Latimer Co. and Attorney-General for Ontario, supra. In the Supreme Court of Ontario, Wright J. made the following observation at p. 404:
What fair play is in particular circumstances, and whether and how the power of the Courts to enforce it should be exercised are what the Court must decide. It must on the one hand see that the citizen is not unfairly dealt with or put in a position of potential unjustified peril at the hands of some person or body exercising jurisdiction. It must on the other hand see that such persons or bodies seeking to perform their public duty are not unduly hampered in their work and that the purpose of the Legislature, if it be the source of their jurisdiction, is respected and realized as it has been expressed.
The particular structure and responsibilities of the Commission must be considered in assessing allegations of bias. Upon the appeal of Latimer to the Ontario Court of Appeal, Dubin J.A., for a unanimous Court, dismissed the complaint of bias. He acknowledged that the Commission had a responsibility both to the public and to its registrants. He wrote at p. 135:
. . . I view the obligation of the Commission towards its registrants as analogous to a professional body dealing in disciplinary matters with its members. The duty imposed upon the Commission of protecting members of the public from the misconduct of its registrants is, of course, a principal object of the statute, but the obligation of the Commission to deal fairly with those whose livelihood is in its hands is also by statute clearly placed upon it, and nothing is to be gained, in my opinion, by placing a priority upon one of its functions over the other.
Dubin J.A. found that the structure of the Act whereby commissioners could be involved in both the investigatory and adjudicatory functions did not, by itself, give rise to a reasonable apprehension of bias.
I am in agreement with this proposition. So long as the Chairman did not act outside of his statutory authority, and so long as there is no evidence to show involvement above and beyond the mere fact of the Chairman's fulfilling his statutory duties, a "reasonable apprehension of bias" affecting the Commission as a whole cannot be said to exist.
Improper Purpose
Although not argued before this Court, I have also considered the question of whether there may have been some element of "improper purpose" in the conduct of the proceedings against the appellant. For example, if the Commission conducted a review of Dial and ordered a hearing with a view to escaping its own potential liability in any pending litigation against the Commission, then otherwise legitimate proceedings could be tainted with bias. However, after a careful review of the file I am satisfied that any such "suspicion" of the motives of the Chairman, or of the Commission, is completely unfounded. While there seems, at one point, to have been pending litigation, there is no evidence as to the actual existence of claims against the Commission. More importantly, there is no evidence of the nature of such claims, or of the possible defences available to the Commission. In short, any argument of bias founded on such scanty information would hardly be a reasonable suspicion. It would be more easily categorized as sheer conjecture.
Of course, had there been any evidence of a possible conflict between the interest of the Commission in the outcome of the hearing, and their duty to give a fair hearing to the appellant, it would be a different matter, and might raise a reasonable apprehension of bias. However, in my view, this is not the case here.
Conclusion
In Committee for Justice and Liberty v. National Energy Board (the Crowe case), 1976 CanLII 2 (SCC), [1978] 1 S.C.R. 369, Chief Justice Laskin stated the principle behind the test of reasonable apprehension of bias. He wrote, at p. 391:
This test is grounded in a firm concern that there be no lack of public confidence in the impartiality of adjudicative agencies . . . .
In my view, the facts of this case do not raise a reasonable apprehension of bias, nor can they undermine public confidence in the impartiality of the Commission. I would therefore dismiss this first ground of appeal.
Retroactivity
The appellant claims that ss. 165 and 166 of the new Act (1981) cannot be applied retrospectively to him. The appellant maintains that these provisions of the new Act broaden the powers of the Commission. He submits that the Court of Appeal erred "in relying upon the case of Re A Solicitor's Clerk, [1957] 3 All E.R. 617, as authority for the proposition that where the objectives of a statute are protective', rather than penal', then the presumption against retrospective operation of statutes does not apply." The appellant contends that under ss. 165 and 166 of the new Act (1981), sanctions are penal and consequently the Act should not be applied retrospectively.
The relevant legislation consists of s. 136 of the Securities Act, R.S.A. 1970, c. 333, and ss. 165 and 166 of the current Securities Act, S.A. 1981, c. S-6.1:
- (1) Every person or company who
(b)makes a statement in any application, report, prospectus . . . required to be filed or furnished . . . that . . . is false or misleading is . . . guilty of an offence.
165(1) The Commission may order that
(a) trading cease in respect of any security for a period of time as is specified in the order, or
(b) that a person or company cease trading in securities or specified securities for a period of time as is specified in the order.
(2) The Commission shall not make an order under subsection (1) without conducting a hearing.
166(1)The Commission may order that any or all of the exemptions contained in sections 65, 66, 107, 115, 116, 132 and 133 or in the regulations do not apply to the person or company named in the order.
(2) The Commission shall not make an order under subsection (1) without conducting a hearing.
The basic rule of statutory interpretation, that laws should not be construed so as to have retrospective effect, was reiterated in the recent decision of this Court in Angus v. Sun Alliance Insurance Co., 1988 CanLII 5 (SCC), [1988] 2 S.C.R. 256. That case, however, dealt with the question of the retrospective effect of procedural versus substantive provisions. The present case presents a different facet of the problem of retrospectivity.
While the presumption against retrospective effect is clear, there seems to be a great deal of confusion among the authorities and case law as to what constitutes such an effect. Michel Krauss in "Réflexions sur la rétroactivité des lois" (1983), 14 R.G.D. 287, observes at p. 291:
[TRANSLATION] . . . there is unanimity when it comes to recognizing that the "non-retrospectivity rule" is now applicable. However, the content of this presumption has still to be determined in order to apply it consistently and precisely. In our opinion, this concept is not precisely defined in our law.
Pierre-André Côté (The Interpretation of Legislation in Canada (1984)) wrote on the subject of the application of the rule against retroactive application of laws at p. 91:
Examination of the case law reveals a great number of judgments based on general principles. It is difficult to discern a logical thread in this panoply of decisions that are difficult to reconcile.
This Court has had the opportunity to consider the matter of the retrospective application of laws. In Nova, An Alberta Corporation v. Amoco Canada Petroleum Co., 1981 CanLII 211 (SCC), [1981] 2 S.C.R. 437, Estey J. dealt with the issue of retrospectivity by scrutinizing the intent behind the particular piece of legislation. He stated at p. 448 that "each statute must, for the purpose of its interpretation, stand on its own and be examined according to its terminology and the general legislative pattern it establishes". In Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, 1975 CanLII 4 (SCC), [1977] 1 S.C.R. 271, Dickson J. (as he then was) stated the general principle with respect to retrospectivity of enactments at p. 279:
The general rule is that statutes are not to be construed as having retrospective operation unless such a construction is expressly or by necessary implication required by the language of the Act. An amending enactment may provide that it shall be deemed to have come into force on a date prior to its enactment or it may provide that it is to be operative with respect to transactions occurring prior to its enactment. In those instances the statute operates retrospectively.
The so-called presumption against retrospectivity applies only to prejudicial statutes. It does not apply to those which confer a benefit. As Elmer Driedger, Construction of Statutes (2nd ed. 1983), explains at p. 198:
. . . there are three kinds of statutes that can properly be said to be retrospective, but there is only one that attracts the presumption. First, there are the statutes that attach benevolent consequences to a prior event; they do not attract the presumption. Second, there are those that attach prejudicial consequences to a prior event; they attract the presumption. Third, there are those that impose a penalty on a person who is described by reference to a prior event, but the penalty is not intended as further punishment for the event; these do not attract the presumption.
A sub-category of the third type of statute described by Driedger is enactments which may impose a penalty on a person related to a past event, so long as the goal of the penalty is not to punish the person in question, but to protect the public. This distinction was elaborated in the early case of R. v. Vine (1875), 10 L.R. Q.B. 195, where Cockburn C.J. wrote at p. 199:
If one could see some reason for thinking that the intention of this enactment was merely to aggravate the punishment for felony by imposing this disqualification in addition, I should feel the force of Mr. Poland's argument, founded on the rule which has obtained in putting a construction upon statutes -- that when they are penal in their nature they are not to be construed retrospectively, if the language is capable of having a prospective effect given to it and is not necessarily retrospective. But here the object of the enactment is not to punish offenders, but to protect the public against public-houses in which spirits are retailed being kept by persons of doubtful character . . . the legislature has categorically drawn a hard and fast line, obviously with a view to protect the public, in order that places of public resort may be kept by persons of good character; and it matters not for this purpose whether a person was convicted before or after the Act passed, one is equally bad as the other and ought not to be intrusted with a licence.
In Re A Solicitor's Clerk, [1957] 3 All E.R. 617, a statute concerning the practice of law by solicitors was amended so as to enable an order disqualifying a person from acting as a solicitor's clerk if such person had been convicted of larceny, embezzlement or fraudulent conversion of property. A clerk who had been convicted of one of those offenses before the coming into effect of the new law, contested his disqualification on the basis that the law was being given a retrospective effect. The Court of Queen's Bench dismissed these arguments. Lord Goddard C.J. found that there was no retrospective effect since the real aim of the law was prospective and aimed at protecting the public. He wrote at p. 619:
In my opinion, however, this Act is not in truth retrospective. It enables an order to be made disqualifying a person from acting as a solicitor's clerk in the future and what happened in the past is the cause or reason for the making of the order; but the order has no retrospective effect. It would be retrospective if the Act provided that anything done before the Act came into force or before the order was made should be void or voidable or if a penalty were inflicted for having acted in this or any other capacity before the Act came into force or the order was made. This Act simply enables a disqualification to be imposed for the future which in no way affects anything done by the appellant in the past.
Elmer Driedger summarizes the point in "Statutes: Retroactive, Retrospective Reflections" (1978), 56 Can. Bar Rev. 264, at p. 275:
In the end, resort must be had to the object of the statute. If the intent is to punish or penalize a person for having done what he did, the presumption applies, because a new consequence is attached to a prior event. But if the new punishment or penalty is intended to protect the public, the presumption does not apply.
Stevenson J.A. of the Court of Appeal likened the situation in the present appeal to that in the Solicitor's Clerk case at p. 229:
In my view the principle in the Solicitor's Clerk case is indistinguishable. An additional power is given to the Commission -- based on previous conduct. A new punishment cannot be added but that is not the nature of the office of ss. 166 and 167. It is the same office that the Solicitor's Clerk case deals with, namely to provide a disqualification based on past conduct which may show unfitness for the exemption.
The present case involves the imposition of a remedy, the application of which is based upon conduct of the appellant before the enactment of ss. 165 and 166. Nonetheless, the remedy is not designed as a punishment for that conduct. Rather, it serves to protect members of the public.
The fact that the relief is not really punitive in nature is supported by the conclusion of Stevenson J.A. that the imposition of the new remedy did not lie at the root of the appellant's concern in this matter at p. 229:
In essence, the appellants fear the stigma arising from a finding that they did, or failed to do, what is alleged in the hearing notice. That root concern was well illustrated by the suggestion made in argument that neither would be particularly aggrieved by the remedy being imposed against them, indeed they could accept the remedies, but were concerned about the finding of wrong doing.
The provisions in question are designed to disqualify from trading in securities those persons whom the Commission finds to have committed acts which call into question their business integrity. This is a measure designed to protect the public, and it is in keeping with the general regulatory role of the Commission. Since the amendment at issue here is designed to protect the public, the presumption against the retrospective effect of statutes is effectively rebutted.
In the result, I would dismiss this appeal with costs.
Appeal dismissed with costs.
Solicitors for the appellant: Wheatley, Sadownik, Edmonton.
Solicitors for the respondent: Burnet, Duckworth & Palmer, Calgary.
- Estey and Le Dain JJ. took no part in the judgment.
