The B.C. Court of Appeal has dismissed a constitutional challenge of the B.C. Securities Commission (BCSC)’s power to seek contempt orders for witnesses who refuse to cooperate with an investigation.
The July 16 appeals court decision stems from Harjit Gahunia and Ranvir Brar’s refusal to be interviewed in 2020 and 2021 as witnesses during a BCSC investigation.
Gahunia and Brar filed their constitutional challenge after the BCSC applied in court, under B.C.’s Securities Act, for an order that they were in contempt for refusing to be interviewed. If a court finds that someone is in contempt, it can impose jail time and fines.
The B.C. Supreme Court dismissed their challenge in 2023, finding that the Act’s provision for a contempt application is not unconstitutional, nor overly broad or vague, and that the only disclosure required in a contempt proceeding is for evidence of a person’s alleged refusal to cooperate.
Noting the Supreme Court of Canada (SCC)’s recognition of the importance of securities legislation in protecting the public, the Court of Appeal found that the B.C. Supreme Court “made no error” in dismissing Gahunia and Brar’s application, writing that “a similar provision of the Securities Act withstood constitutional scrutiny and the chambers judge was correct when she decided that she was bound by the [SCC] precedent.”
The decision went on to recognize that “the Commission’s power to enforce compliance with its investigations is essential to the effectiveness of its investigatory powers.”
The BCSC is now able to issue an administrative penalty of up to $1 million, as well as other sanctions, for failing to comply with a summons because of Act amendments that came into force in 2023.
