Jeffrey Mitchell Seabrook, Jon Stanbrough, Rylie David Ableman, Altaf Goolab, Richard Cartledge, Adrian Ting Lee, David Strong, Aaron Leslie Evans, Raymond Wong, Raymond Christopher Dove, Andrew David Greig, Matthew Mitchell Phillips, Daniel Ross Warburton, Peter Forward v. Travis Brian Arnold, 2003 BCCA 194

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Seabrook v. British Columbia (Securities Commission), 2003 BCCA 194 Date: 20030326 Docket: CA030418 Between: Jeffrey Mitchell Seabrook, Jon Stanbrough, Rylie David Ableman, Altaf Goolab, Richard Cartledge, Adrian Ting Lee, David Strong, Aaron Leslie Evans, Raymond Wong, Raymond Christopher Dove, Andrew David Greig, Matthew Mitchell Phillips, Daniel Ross Warburton, Peter Forward and Travis Brian Arnold Appellants And British Columbia Securities Commission Respondent Before: The Honourable Mr. Justice Donald (In Chambers) R.W. Cooper Counsel for the Appellants J.A.

Bernardo S.

Boyle Counsel for the Respondent Place and Date of Hearing: Vancouver, British Columbia 28 February 2003 Place and Date of Judgment: Vancouver, British Columbia 26 March 2003 Reasons for Judgment of the Honourable Donald: [ 1 ] The proposed appellants apply for leave to appeal a temporary order issued by a panel of the British Columbia Securities Commission on 11 December 2002 enjoining them from engaging in certain activities, and if leave is granted, for a stay of the order pending the proposed appeal. [ 2 ] To avoid confusion, I will refer to the proposed appellants as the applicants because that is their status in this Court. [ 3 ] A search of business premises in Vancouver pursuant to a warrant turned up evidence of what the Executive Director alleges is a “boiler room”, a place where unregistered telemarketing in securities occurs.

The applicants, none of whom are registered under the Securities Act , R.S.B.C. 1996, c. 418 , to deal in securities, were found in the room manning the telephones at their stations. [ 4 ] The Executive Director exercised the authority given him by s. 161(1)(a), (

b) and (

d) of the Act by making a series of temporary orders (they cannot exceed 15 days) effectively prohibiting the applicants from trading in securities and from engaging in investor relations activities. On 27 and 29 November 2002 a panel of the Commission (hereafter “the panel”) heard an application by Commission staff to extend the temporary orders. On 11 December 2002, having found a prima facie case of breaches of the Act, the

panel granted a temporary order pending the hearing substantially in the terms imposed by the Executive Director. [ 5 ] The applicants seek leave to appeal the order on grounds that the panel erred in law: 1. In admitting the affidavit of an investigator in the enforcement division of the Commission, Brian F. Edwards, which consisted of opinions rather than facts; 2. In concluding that there was prima facie evidence that the applicants contravened s. 34 of the Act; 3.

In concluding that there was a sufficient evidentiary basis to determine that it was “necessary and in the public interest” to extend the temporary order pursuant to s. 161(3) of the Act; and 4. In extending the temporary order without considering whether the extension was “necessary” pursuant to s. 161(3) of the Act. [ 6 ] In the course of his submissions Mr. Cooper, counsel for the applicants, refined his position on evidence to argue that the panel had no evidentiary basis for the order. [ 7 ] For the Commission, Mr. Bernardo offered additional evidence arising from the search.

This material was presented to the panel on 20 February 2003, at the hearing of the applicants’ request for an early hearing on the allegations of breach. The panel reserved its decision on the early hearing application. No objection was taken to the additional material coming before me. Authority for its admission can be found in Gudaitis v .

Abacus Systems Inc. (1992), 1992 CanLII 819 (BC CA) , 65 B.C.L.R. (2d) 1 at 6-7 (C.A.). [ 8 ] Whatever might be said about the quality of the evidence considered by the panel in the first instance, the later evidence makes out a strong prima facie case that the applicants were engaged in a boiler room operation contrary to the Act. Consequently, even if I were to grant leave and impose a stay on the temporary order, the panel could make a new order on the basis of the augmented record and the applicants would be no further ahead. [ 9 ] The applicants have to clear two hurdles to obtain leave.

First, they must satisfy the usual requirements for leave to appeal from a tribunal: Omineca Enterprises Ltd. v . British Columbia (Minister of Forests) , 2000 BCCA 591 at ¶9-11, affirming the tests set out in Queen’s Plate Development Ltd. v . British Columbia (Assessor of Area No. 9–Vancouver) (1987), 1987 CanLII 2626 (BC CA) , 16 B.C.L.R. (2d) 104 at 109, per Taggart J.A. in chambers; and second, and no less onerously, they must justify interrupting the course of the tribunal’s proceedings by appealing an interlocutory matter: Key-West Resources Ltd. v . British Columbia (Securities Commission) , [1998] B.C.J.

No. 2434 (Q.L.) (C.A.) ; application for review dismissed [1998] B.C.J. No. 2997 (Q.L.) at ¶3 (C.A.); and Zündel v . Canada (Human Rights Commission) , 2000 CanLII 17138 (FCA) , [2000] 4 F.C. 255 at ¶10 (C.A.). [ 10 ] The utility of the proposed appeal is said to be the determination by this Court as to what constitutes a prima facie case for a temporary order. It is argued that this would serve as a guide for the Commission in future cases. In support of this submission the applicants rely on Pessl v. British Columbia (Securities Commission) , [1992] B.C.J.

No. 2702 (Q.L.) (C.A.) , where Gibbs J.A. in chambers granted leave to appeal a similar temporary order. He said: If leave to appeal is granted the applicants propose to argue as grounds of appeal such issues as, inter alia, the application of the principles of procedural fairness and fundamental justice to the making of temporary orders and cease trading orders and extensions thereof and the “evidentiary threshold” necessary as a condition to a determination that “it is necessary and in the public interest” to make such orders or extend them.

I am satisfied that those kinds of issues are of sufficient importance to warrant consideration by a division of this Court. Accordingly, leave to appeal is granted. [ 11 ] I do not find Pessl helpful in the present matter. Here, the parties agree that the test for a temporary order is a prima facie case and that the Commission must be satisfied that an order is “necessary and in the public interest”. Neither of the legal standards is in issue.

The applicants do not allege a breach of the duty of fairness other than to argue that the panel should not have acted without a reasonable evidentiary foundation. [ 12 ] Since the panel could readily and with unquestionable justification issue a replacement order, the proposed appeal would take on an academic character. I do not think a division of this Court should attempt to define in the abstract what constitutes a prima facie case in a securities matter, or what is necessary and in the public interest.

These are questions for the Commission to decide in the wide variety of cases coming before them, and they lie within the field of expertise expressly assigned to the Commission by the Legislature. [ 13 ] In any event, and new evidence aside, I have not been persuaded that the applicants raise a question of law. The real issue they propose to argue is the sufficiency of evidence. I cannot say in my reading of the record before the panel in the first instance that there was no evidence supporting the order.

The applicants are left with the argument that the panel found the wrong facts and drew the wrong inferences, a position unlikely to succeed given the reluctance of this Court to interfere with the Commission’s fact finding: see for example, O.E.X. Electromagnetic Inc. (Re) (1990), 1990 CanLII 262 (BC CA) , 46 B.C.L.R. (2d) 195 at 208 (C.A.), where Hollinrake J.A. said for the Court: As to the findings of fact and the conclusions drawn from them, the law is clear that the courts should be slow to interfere in the decisions of these Commissions. [ 14 ] In the result, I refuse leave.

It is unnecessary to consider the stay application.

The Honourable Mr. Justice Donald