The British Columbia Securities Commission has won an appeal brought against it arguing that that it should be ordered to turn over more information of its case against PSI individuals. The B.C. Court of Appeal has deferred to the BCSC in its procedural treatment of Pacific International Securities Inc. and its directors.

BCSC enforcement staff have alleged that Pacific International and its directors failed to set up appropriate procedures to identify and deal with suspicious clients and account activity. As is normal in any court proceeding, the Pacific International directors sought further “particulars” from commission staff about the allegations against them. The commission ordered staff to deliver some particulars, but refused to order staff to deliver other particulars requested.

As a result an appeal of the commission’s decision was brought in the BCCA. It was unsuccessful. “As I see it,” wrote the BCCA chief justice in his decision, “the essence of the appellants’ complaint is not that the commission committed legal error” but that it placed too little emphasis on the importance of the decision to the individuals affected by it in its consideration of procedural fairness. “Accordingly, I am not persuaded that the Commission applied a wrong legal standard or otherwise committed legal error in this regard.”

The Pacific International directors also argued that the commission erred by refusing to order that particulars be delivered to them individually. They submitted that individualized particulars should be required because each individual played a different role and had different responsibilities in respect of the business of the Pacific International. The court disagreed.

“As commission staff assert a case of group responsibility against the appellants, I do not think that the commission erred in law in the circumstances of this case in refusing to order staff to provide particulars of the allegations on an individual basis. Moreover, whether the directors can be held collectively responsible for the misdeeds alleged in the notice of hearing is a question that should not be decided on an interlocutory application for particulars. The appellants will have an opportunity to make that argument before the commission where it can be viewed, in the context of the evidence and the legislative scheme, through the lens of the commission’s expertise in the area.”

The BCSC’s case against Pacific International and its directors will continue at the commission.