Not “Bogging Down” Investigations

Yet another court has emphasized the minimal nature of procedural requirements for regulatory investigators requiring cooperation from registrants and witnesses: Brar v. British Columbia (Securities Commission), 2023 BCCA 432 (CanLII).

An investigator for a securities regulator summoned two witnesses to assist in an investigation. Under the enabling legislation the investigator had the same power to summon witnesses as the courts have in civil actions. The witnesses refused to comply with multiple summonses. The investigator initiated contempt proceedings. The witnesses commenced various applications to challenge the summonses. In some of those applications they sought disclosure of the investigator’s file. The witnesses also objected to being interviewed by video conference.

The witnesses had been notified who was being investigated (it was not the witnesses) and what the investigation was for. However, the witnesses also wanted to be told the basis for the issuance of the summonses and their relevance to the subject and scope of the investigation.

The Court concluded that no “decision” had been made by issuing the summonses.

It is simply a step taken by the investigating staff of the Commission at the earliest stage of a process that may or may not lead to further steps with legal consequences for the subjects of the investigation. No such consequences affecting the witnesses have been suggested.

Thus, there was no right to judicial review.

However, even if there was a right of judicial review, the Court said that the application would still fail. Any duty of procedural fairness to the witnesses was quite low at this stage. If full disclosure was required at this stage it might open the door for the subject of the investigation “to take evasive action” or “bog down” investigations with proceedings that would “delay and distract” the regulator from completing its investigation. Investigators have “to start somewhere” and regulators do not need to justify a summons at this point in the process.

Procedural fairness did not require more disclosure than what had already been made. The Court upheld the dismissal of the challenges by the witnesses. The regulator could now schedule the contempt proceedings against the witnesses.

It should be noted that more than three years had elapsed since the first summons was issued. So much for not bogging down investigations.

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