Going Behind the Corporate Veil

Regulators have special challenges when regulating practitioners who practise through a corporate structure. One such challenge is being clear in any notice of hearing whether the regulator is pursuing allegations against the individual, the corporation or both. In Best Import Auto Ltd. v Motor Dealer Council of British Columbia, 2018 BCSC 834, http://canlii.ca/t/hs4n5, the notice of hearing clearly indicated that the corporation could face sanction, but was less clear whether the responsible officer / owner was also at risk of sanction. As a result the Court set aside the sanction imposed against the individual.

On another issue the Court gave short shrift to the concern about a single hearing being held on both the issues of finding and sanction. The defendants complained that they should have been given full detail of the findings before being required to address sanction. The Court noted that many courts and tribunals combine both stages of the hearing. The Court noted that the defendants could waive their right to separate hearings. Only where the defendants requested separate hearings and they were denied was this a true issue of fairness.

The Court also indicated that under the legislation in issue, an implied aspect of the power to impose a revocation was the added authority to specify a time period before the defendant could apply for reinstatement. In this case the specified period was ten years.

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