The BC Court of Appeal has decided against the B.C. Superintendent of Financial Institutions in a jurisdictional dispute involving the Bank of Nova Scotia.

The bank challenged the superintendent’s use of B.C. Financial Institutions Act, to claim jurisdiction over its insurance-selling activities, because banks are regulated by the federal government — as set out in the constitution.

Bank of Nova Scotia and its representative, Optima Communications Canada Inc., market Scotia Visa Balance Insurance by telephone solicitation to some
of the bank’s customers, inviting them to enroll in the bank’s group insurance policy.

The bank and Optima pleaded that neither the bank, the bank’s employees, Optima, nor its’ employees, are subject to the FIA. Therefore, none of them
Should be required to obtain a license under the provisions of that Act before
lawfully marketing SVBI.

The provincial regulator took the position that this telemarketing scheme was unlawful because neither the bank, nor Optima are licensed to solicit insurance applications under the FIA. They argued that BNS’ telemarketing scheme is subject to the FIA because the telemarketing of SVBI is part of the insurance business.

The bank brought an application for judicial review of the superintendent’s decision and the judge agreed with the superintendent. He held that the telemarketing program “is not part of, or incidental to, the business of banking and that no constitutional issue arose.” He therefore dismissed the application.

But the bank appealed and won. “On a true statutory interpretation of the FIA, BNS and Optima are not subject to its provisions because BNS and the Optima telemarketers are exempt.” In the alternative, the appeal court decided, “the telemarketing activity of both BNS and Optima is immune from the FIA licensing scheme by virtue of the doctrine of inter-jurisdictional immunity. I would allow the appeal.”

The appeal court granted a declaration stating that the Superintendent “is without legislative authority to issue orders in respect of BNS and Optima, because BNS and the Optima telemarketers are exempt from the licensing requirements of the FIA, and further declare that the provisions of the FIA are inapplicable to BNS and Optima by virtue of the doctrine of inter-jurisdictional immunity.”