The British Columbia Court of Appeal has issued a couple of decisions upholding the investigation powers of the B.C. Securities Commission.

The court heard two appeals from “CWM” (referred to by initials in order to protect his privacy) appeals two orders of Mr. Justice Macaulay, the first dated Oct. 23, 2000, and the second dated May 3, 2002. Since the second order flowed from the first, the court treated them as essentially one matter.

The focus of the first appeal was the investigation and enforcement powers given to the BCSC. The second appeal was concerned with the protection of solicitor-client privilege and the power of the court both to safeguard the privilege when the powers given by statute to a tribunal may jeopardize it. The Law Society of B.C. also appeared as an intervener on the privilege issue.

CWM deposed that he is an “authorized agent” of Fortress International Ltd., a company incorporated in the Bahamas. Since late 1999, the securities commission has been investigating the trading of securities that may have been carried out in violation of the Act by Fortress, Great American Gold Ltd., Corporate ExpressClub Inc., and Offshore Knowledge Network, and four individuals, one of whom is CWM.

The court rejected both appeals. It said that precedent has established that, “securities regulation is subject to much less stringent procedural safeguards than criminal law and that the compelling of personal attendance and document production for investigative purposes are generally not constitutionally objectionable.”

It continued, “There is simply no basis in law for the notion that a person in CWM’s position has a constitutionally-protected right to cross-examine an investigator on an affidavit filed in support of a petition in the circumstances of this case. If it were otherwise, what is intended to be a time- and cost-efficient administrative function would become an ‘investigation of the investigators’, beset with all the formalities and delays of a criminal trial.”

As for the solicitor-client privilege issue, the court said, “the Chambers judge correctly recognized that privilege extends only to documents created for the purpose of giving or receiving legal advice and that the onus lies on the party asserting the privilege.” It found that this privilege was not violated in this case.