No Back Door to Obtaining Disclosure

It is only natural for people participating in regulatory investigations to want to know what the regulator knows before answering questions. However, regulators often want to know what the witness knows without the witness being influenced by the then-available evidence. In British Columbia (Securities Commission) v Brar, 2023 BCSC 1122 (CanLII), the Court limited a possible back door route for participants to obtain early disclosure.

In that case two witnesses (who were not the subject of the investigation) were summoned to provide information to the regulator. The witnesses failed to attend. The regulator brought contempt proceedings to court to compel the cooperation of the witnesses.

The main part of the decision deals with the witnesses’ attempt to have the contempt enforcement provisions declared unconstitutional primarily on the basis that provisions enabling contempt orders usurped the constitutional role of the courts. The Court rejected those arguments.

The witnesses also sought disclosure of all of the non-privileged information in the possession of the regulator relied upon to issue the original summons. The witnesses argued that they were entitled to full disclosure because they were subject to significant sanction should they be found in contempt. The Court accepted that the witnesses were entitled to Stinchcombe-type disclosure in the proceedings. However, only relevant information needed to be disclosed. The information about the investigation leading up to the summons was irrelevant. Only the information related to the content and delivery of the summons itself and the failure to cooperate was relevant to the contempt proceedings. That information had been disclosed.

Thus, the regulator was not required to disclose its information on the merits of the investigation in advance of the witnesses’ cooperation. The matter will now proceed to a hearing of the application for contempt itself.

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