Canadian Case Law Update - nasaa.org

Canadian Case Law Update

NASAA Enforcement TrainingMiami, Fl 2021

Don Young – ASC

Legal Areas

1 Standard of Review for Admin Decisions

2 Pump and Dumps = Fraud

3 Dismissal for Inordinate Delay

4 No Right to In Person Hearing

Standard of Review - Canada (Minister of Citizenship and Immigration) v Vavilov

• Three cases/one key issue• Nature and scope of judicial review of administrative action

• Story – subject of TV series The Americans

Vavilov

• Before deciding if decision is lawful – how to review?

• Standard of review (how much deference?)• Correctness – decision must be correct (court does fresh analysis)

• Reasonableness – deference to expertise, decision within a range of possible outcomes

Vavilov

• Presumptive standard is reasonableness

• UNLESS – statutory right of appeal (common for securities law)• Then (sigh!)… correctness applies

Vavilov

• Dissent – majority decision is a “eulogy for deference”

Pump and Dump Fraud – Re Bluforest Inc.

• Illegal distribution, prohibited representations, market manipulation, fraud (Bluforest, Can, Miller)

• Settlements – Nikoo, Anderson (lawyer)

Bluforest

• Can – mastermind, elaborate “pump and dump scheme”

• Fouani – “why should I answer you, you are a fugitive and thief!!”

• FBI proffer – Winsor

Bluforest

• Bad guys binder

• Pump and dump blueprint

• P&D schemes “clearly” a prohibited act – dishonest and antithetical to… fair and efficient capital market

Inordinate Delay – Abrametz v Law Society of Saskatchewan

• Audit investigation 2012

• Guilty 2018 – four counts of conduct unbecoming lawyer

• Sask CA – Did LS err in dismissing application for stay due to undue delay causing abuse of process?

Abrametz

• Blencoe v British Columbia (Human Rights Commission) – leading case admin proceedings delay

• Timely justice essential to rule of law• Magna Carta – [t]o none will we sell, to none will we deny, or delay, right

or justice (King John)

Abrametz

• Mere passage of time not enough – delay must cause impact

• Three distinct forms of prejudicial impact• Hearing fairness

• Personal – psychological or reputational

• Inordinate or unacceptable delay – damage to public interest

Abrametz

• Evidence needed to explain delay – who is responsible

• If caused by admin body, was that prejudicial?

• Test: does damage to public interest in admin process fairness exceed harm to public interest in not enforcing leg’n

Abrametz

• Applied Vavilov (no deference), Jordan, Blencoe…

• Clock starts ticking – investigation to hearing

• 53 months – 18 (inherent), 2.5 Abrametz, 32.5 law society

Abrametz

• LS delay inordinate – caused actual prejudice of such magnitude that public’s sense of decency and fairness offended

• Decision appealed to SCC…

No Right to In Person Hearing – First Global Data Ltd.

• OSC allegations/hearing

• Should hearing proceed by videoconference?

First Global Data

• Respondents• Hearings with witnesses should be in person

• No harm in delaying during COVID

• Staff – Let’s get it on!

First Global Data

• Complexity and length – without more – not determinative• Miller quote – “there is nothing about a remote procedure, whether large,

complex, and potentially final, or small, straightforward, and interim, that is inherently unfair to either side. This is particularly so now that the legal community has had time to digest the use of virtual hearing technology”

First Global Data

• Respondents – where credibility in issue, in person required

• No – assessment of credibility NOT more reliable in person• “The judge is not given a divine insight into the hearts and minds of the

witnesses appearing before him. Justice does not descend automatically upon the best actor in the witness-box”

First Global Data

• Respondents – large number of participants (panel, registrar, court reporter, parties, counsel, witnesses) – video impractical

• No – special skill/software not needed – device with camera/mic

• Demeaning to suggest unrepresented party cannot manage

Citations

• Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65

• Re Bluforest Inc, 2020 ABASC 138

• Abrametz v Law Society of Saskatchewan, 2020 SKCA 81

• First Global Data Ltd (Re), 2020 ONSEC 23

This presentation is provided for general information purposes only and does not constitute legal advice. Information has been summarized and paraphrased for presentation purposes only. Information in this presentation reflects securities legislation

and other relevant standards that are in effect as of the date of the presentation. The contents of this presentation should not be modified without the express written permission of the presenters.

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