The question of whether notorious fraudster Ian Thow has to pay a $250,000 penalty imposed by the British Columbia Securities Commission (BCSC) must go to a court hearing, the Supreme Court of B.C. ruled in its reasons for judgment dated Oct. 22.
According to the court’s reasons, Thow has never paid anything towards a $250,000 penalty levied against him by the BCSC in 2008. He has, however, made some payments toward the $3.9 million in restitution he was ordered to pay part of the criminal case against him.
Thow, a former financial advisor, was released from prison in 2012 after serving approximately three years of a nine-year prison sentence, which was handed down after he pleaded guilty to 20 counts of fraud for persuading investors to put their money in non-existent securities.
The commission had applied to the B.C. supreme court to renew the penalty judgment against him before the 10-year limitation period expires.
Thow opposed the BCSC’s application on the grounds that it is not suitable for a summary judgment, according to the court’s reasons. He argued the commission had never sought payment of the penalty, and that he was told by a commission official that it has no intention of collecting on the penalty, as long as he was making payments on the restitution order.
The BCSC argued there is no legal basis for denying the renewal of the penalty order; it denied telling Thow that it wouldn’t pursue collection of the penalty.
Indeed, the court heard that the BCSC filed an affidavit from Catherine Palmer, senior enforcement officer at the commission, which states, “at no time has the commission represented to Mr. Thow, directly or indirectly, that the commission considered the sanctions decision unenforceable or that the commission relinquished or abandoned any rights as judgment creditor… I am not aware of any employee or appointee at the commission who has made such a representation and I do not believe any other employee or appointee did or could make such a representation.”
The court ruled that it couldn’t decide the issue without a hearing, given that the evidence from both sides was fundamentally at odds.
“I am unable to conclusively determine whether Mr. Thow’s contention that he was advised by a representative of the commission that the debt would not be pursued is true, or whether the evidence of the plaintiff should be accepted on that issue. Accordingly, I am unable to decide the matter in the context of a summary trial proceeding,” Justice James Williams stated in the reasons for judgment.
As a result, the court dismissed the BCSC’s application for summary judgment, and ordered the commission to produce a list of documents within two weeks and Palmer to be made available for cross-examination on her affidavit.