In British Columbia (Securities Commission) v. BridgeMark Financial Corp, 2020 BCCA 301, the British Columbia Court of Appeal upheld a decision of the British Columbia Securities Commission (Commission) to release documents obtained during an investigation and filed as evidence at a hearing to consider whether to extend a temporary cease trade order. A firm of class action lawyers (the Law Firm) requested access to the evidence for use in a class action against the subjects of the investigation. The persons subject to the investigation appealed the Commission’s decision to grant access to the Law Firm.


Temporary Order

In December 2018, as a result of an investigation into alleged abusive conduct to capital markets and the illegal distribution of securities, the Commission issued a temporary cease-trade order (the Temporary Order) which limited the trading activities of various individuals and companies.

Shortly after issuing the Temporary Order and following a hearing on the issue (Hearing), the Commission ruled that it was not in the public interest to proceed with a separate hearing addressing the suspected violations of securities legislation until the Commission staff completed their investigation, and extended the Temporary Order pursuant to section 161(3) of the B.C. Securities Act (Act).  

Application for Access to Evidence Filed at the Hearing

In April 2019, Glacier Media applied for access to exhibits and transcripts filed at the Hearing, redacted for sensitive financial and personal information. The Commission granted Glacier Media access, stating that section 19 of the Securities Regulation requires that hearings before the Commission be open to the public unless a public hearing would be unduly prejudicial to a party or witness. While section 11 of the Act requires every person acting under the authority of the Act to keep confidential all facts, information and records obtained or provided under the Act, there is an exception where a person’s public duty requires the person not to keep the information confidential. The Commission’s public duty extended to making public the evidence submitted in hearings and transcripts of hearings, subject to other considerations in the public interest.

Subsequently, in July 2019, the Law Firm applied for and was granted access to news releases and affidavits that were filed as exhibits at the Hearing. The Law Firm made it clear that the evidence requested was to advance civil proceedings against the respondents.

That decision was appealed by certain individuals and corporations subject to the Temporary Order. They argued that:

  • the affidavits were filed in connection with proceedings related to temporary orders, as opposed to a hearing on the merits of the allegations in the notice of hearing;
  • the principle of open tribunal proceedings must be balanced with other public interest objectives; and
  • the material in question was received by the Commission on an implied undertaking to keep it confidential and used for no purpose other than its investigation.

The Court of Appeal Upholds the Commission’s Decision

The British Columbia Court of Appeal dismissed the appeal. It determined that the Commission did not err in law in concluding that once it elected to hold a hearing to consider whether to extend the Temporary Order, its enabling statutory framework gave rise to the public duty to make that hearing open to the public and maintain a record of the proceeding. This public duty permitted the public to have access to the record of the proceeding unless doing so would be unduly prejudicial to a party or a witness and withholding access would not be prejudicial to the public interest.

The Commission did not misdirect itself in exercising its discretion to grant the Law Firm access to the evidence filed at the Hearing. The Commission did not occupy a position analogous to a litigant. It gives no undertaking to the subjects of its investigations or third parties from whom it seeks documents concerning their use. The use that the Commission can make of documents obtained pursuant to its powers to compel production “is limited by statute, not convention.”

Further, the Commission was not required to weigh the specific use for which the Law Firm sought the evidence. The disclosure of the evidence to the public would not preclude the appellants from raising any available objection to its use in any other proceedings.

Key Takeaways

Persons subject to investigations by securities regulators should assume that, like court proceedings, evidence filed at hearings that are open to the public, including in connection with requests to extend temporary enforcement orders, will be accessible to third parties.

Careful consideration should be given when objecting to holding a hearing in public at the time of the hearing, where warranted. For example, in Ontario, section 9 of the Statutory Powers Procedure Act permits a tribunal to decide to hold a hearing in the absence of the public in certain circumstances, such as where intimate financial, personal matters, or other matters may be disclosed at the hearing. This is specific to matters of such a nature that the desirability of avoiding their disclosure in the interests of any person affected or in the public interest outweighs the desirability of adhering to the principle that hearings be open to the public.

The authors would like to thank articling student Bryant Oakes for his contribution.