Morabito v. British Columbia (Securities Commission),  
2022 BCCA 279  
Date: 20220812  
Docket: CA47836  
Mark Morabito and Susan Morabito  
British Columbia Securities Commission and  
the Executive Director of the British Columbia Securities Commission  
Global Crossing Airlines Inc., formerly known as Canada Jetlines Ltd.  
The Honourable Chief Justice Bauman  
The Honourable Madam Justice Newbury  
The Honourable Mr. Justice Harris  
On appeal from: A decision of the British Columbia Securities Commission, dated  
October 6, 2021 (Re Application 20210107, 2021 BCSECCOM 394).  
Counsel for the Appellants:  
R.J.C. Deane  
P. Burnham  
Counsel for the Respondents  
S. Zolnay  
British Columbia Securities Commission  
and the Executive Director of the  
British Columbia Securities Commission:  
Place and Date of Hearing:  
Place and Date of Judgment:  
Vancouver, British Columbia  
June 9, 2022  
Vancouver, British Columbia  
August 12, 2022  
Morabito v. British Columbia (Securities Commission)  
Page 2  
Written Reasons by:  
The Honourable Madam Justice Newbury  
Concurred in by:  
The Honourable Chief Justice Bauman  
The Honourable Mr. Justice Harris  
Morabito v. British Columbia (Securities Commission)  
Page 3  
Appellant Mr. M was a shareholder and insider of a publicly-listed company,  
“Jetlines”. He transferred some shares to his wife, also an appellant, and reported  
the trade to the Securities Commission as required. Shortly after, market price of  
Jetlines shares increased significantly for a short period of time. The Commission  
issued an investigation order under s. 142 of Securities Act into appellants’ trading in  
Jetlines and knowledge of certain insider information. Investigation went on for  
several months, during which a freeze order was issued and undertakings were  
required of Mr. M. Long periods of time passed without any action being apparent.  
There was also an incident concerning a visit to the Mshome by investigator,  
accompanied by a police officer, early in the morning when Mrs. M was home alone.  
Appellants sought an order revoking investigation order under s. 171 of the Act on  
the basis that investigators had abused their powers in a way that brought  
Commission processes into disrepute, and public interest demanded that  
investigation be terminated. At hearing of the application, executive director adduced  
very little evidence, effectively relying on the assumption that the applicants bore the  
onus of proving that terminating the investigation would not be prejudicial to the  
public interest. Proceeding on this basis, panel ruled that investigation should  
continue in the public interest. The Ms appealed. They submitted that because an  
investigation order is issued without notice and without hearing the parties, onus of  
proof should be on executive director, similar to the onus for revocation of a freeze  
order as found recently in Party A v. British Columbia (Securities Commission) 2021  
BCCA 358. Leave to appeal was granted only on one question where did the  
onus of proof (or “burden of persuasion”) lie?  
Held: onus of proof lies on an applicant under s.171. Unlike freeze orders,  
investigation orders under s. 142 fall at low end of spectrum of procedural fairness.  
The making of such an order requires only that some basis for suspicion of a  
contravention of the Act be shown. The order does not affect the “rights” of the  
subject, and the SCC has made it clear that investors in the public market can  
expect little privacy. It is not until investigation report is made and hearing ordered  
that the principle of audi alteram partem applies. The onus is on the applicant to  
show public interest will not be prejudiced by the revocation. In cases where an  
applicant alleges an abuse of process or undue delay and adduces evidence in  
support, however, the evidentiary onus may shift in a hearing to the executive  
director to provide some evidence to explain the conduct complained of.  
Reasons for Judgment of the Honourable Madam Justice Newbury:  
The sole question to be decided on this appeal may be simply stated: where  
does the onus lie in an application under s. 171 of the Securities Act, R.S.B.C. 1996,  
Morabito v. British Columbia (Securities Commission)  
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c. 4181 (the “Act”) for the revocation or variation of an investigation order made  
under s. 142? The general rule (to which there are many exceptions) is of course  
that the onus of proof, or “burden of persuasion”, lies on the party seeking to prove  
or disprove the existence or non-existence of a fact or issue: see Lederman, Bryant  
and Fuerst, The Law of Evidence in Canada (5th ed., 2018) at § 3.1.1. Consistent  
with that rule, it has been assumed that the onus was on an applicant under s. 171  
to show that the order sought would not be prejudicial to the public interest: see Re  
Bossteam 2012 BCSECCOM 377 at para. 70; British Columbia (Securities  
Commission) v. Pioneer Ventures Inc. 2021 BCCA 1 at para. 15.  
However, the question of onus was addressed directly in connection with  
asset freeze orders in a recent appeal, Party A v. British Columbia (Securities  
Commission) 2021 BCCA 358. This court held that where the order under  
s. 151(1)(a) was obtained under circumstances that did not give the applicant an  
opportunity to be heard”, the executive director (a Commission staff person who has  
investigative and prosecutorial functions under the Act) bore the onus of satisfying  
the Commission that the public interest would be served by the continuation of the  
freeze order. This determination, the Court said, should be made in the context of a  
new hearing, without deference being owed to the original order. (At paras. 2223.)  
The appellants in this case seek a similar ruling of law with respect to the  
revocation or variation of an investigation order made under s. 142(1). It provides:  
The commission may, by order, appoint a person to make an investigation  
the commission considers expedient  
(a) for the administration of this Act,  
(b) to assist in the administration of the securities or derivatives laws  
of another jurisdiction,  
(c) in respect of matters relating to trading in securities or derivatives  
in British Columbia, or  
1 The Act was amended effective March 27, 2020 and various sections and section numbers have  
been changed; however, since the amendments do not apply in this case, the “old” numbers and  
sections will be used in these reasons.  
Morabito v. British Columbia (Securities Commission)  
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(d) in respect of matters in British Columbia relating to trading in  
securities or derivatives in another jurisdiction  
As with freeze orders, the authority to vary or revoke an investigation order is  
found in s. 171, which states:  
If the commission, the executive director or a designated organization  
considers that to do so would not be prejudicial to the public interest, the  
commission, executive director or designated organization, as the case may  
be, may make an order revoking in whole or in part or varying a decision the  
commission, the executive director or the designated organization, as the  
case may be, has made under this Act, another enactment or a former  
enactment, whether or not the decision has been filed under section 163.  
[Emphasis added.]  
The issue for us, then, is whether the parallels between the two types of order  
should be extended to require that at least where an investigation order has been  
obtained without the subject’s having had the opportunity to make submissions —  
which is usually, if not always, the case the onus should be on the executive  
director to show that the variation or revocation of the order would be prejudicial to  
the public interest.  
Commission Practice  
At the outset, it may be useful to provide a brief summary of how  
investigations and hearings are initiated and how they proceed in practice under the  
Act, the Securities Regulation (B.C. Reg. 196/197) and the Commission’s published  
policies. In general terms, the investigative, adjudicative and enforcement functions  
of the Commission are kept separate. Under s. 7(4), for example, an investigator  
may not be included in the panel sitting on the ultimate hearing, and under s. 7(2)  
the Commission may not delegate any power or duty referred to in s. 151 to an  
executive director.  
The Court in Party A described the statutory provisions governing the  
obtaining of an investigation order under s. 142 as follows:  
The practice to obtain a s. 142 investigation order involves an application to a  
single Commission member by the executive director. The structure of the  
section presumes the single Commission member will consider the matter  
before issuing such an order. The process is consistent with this  
Morabito v. British Columbia (Securities Commission)  
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presumption, as Commission staff will prepare and provide a memorandum to  
the Commission member setting out a summary of the preliminary evidence  
obtained in support of the need for an investigation order. ...  
[At para. 27.; emphasis added.]  
An investigation order may be made without prior notice to the target (or “subject”) or  
other persons affected thereby. While a copy of the order may be served on the  
subject, it appears that this is not required: Borden Ladner Gervais LLP, Securities  
Law and Practice (3rd ed., 2022) (release 6) at § 6.1.2; see also Re Parhar 2017  
BCSECCOM 286 at para. 14.  
Once appointed, an investigator has broad authority to “investigate, inquire  
into, inspect and examine” records, transactions, property and relationships between  
individuals as detailed in Part 17 of the Act. Under s. 143, for example, an  
investigator may “use or alter” records, property or things in order to facilitate the  
investigation, and under s. 144 may compel and enforce the attendance of  
witnesses, compel them to give evidence on oath, and compel persons to preserve  
“records and things or classes of records and things” in the same manner as the  
Supreme Court may do in connection with the trial of a civil action. At the same time,  
investigators do not have decision-making authority, and are empowered only to  
investigate and report their findings to the Commission.  
At the request of the Commission, an investigator must provide it with a  
complete report of the investigation, including any transcript of evidence and  
material in his or her possession relating to the investigation: s. 146. If the  
Commission determines that action should be taken against the subject, the  
Commission must issue a notice of hearing under s. 161 of the Act to any party who  
would be directly affected by the proposed action: Regulation s. 15. Under Hearings  
Policy 15-601, the notice of hearing must set out, among other details, the  
allegations being made and the orders that the executive director will be seeking.  
[10] Both parties must provide full and timely disclosure prior to the hearing:  
Policy 15-601. The Commission has determined that procedural fairness calls for the  
application of the disclosure standard set out in R. v. Stinchcombe [1991] 3  
Morabito v. British Columbia (Securities Commission)  
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S.C.R. 326 to enforcement hearings under the Act: Re Fernback 2004 BCSECCOM  
378 at paras. 33–6. The executive director must disclose “all relevant information  
that is not privileged” as well as a ‘reliance listthat identifies the records on which  
he or she intends to rely at the hearing. As a matter of general practice, the  
Commission requires the director to disclose will-saystatements and reliance lists  
approximately 30 days before the hearing, and respondents to disclose the same  
approximately 15 days before.  
[11] The subject, or respondent, is entitled to be represented by counsel at the  
hearing, to call and cross-examine witnesses, and to provide both written and oral  
submissions: Regulation s. 17; Policy 15-601. Unless otherwise ordered, the hearing  
is open to the public. The subject may be required to pay prescribed fees or charges  
for the costs of the hearing: s. 174.  
[12] Where the panel’s decision adversely affects the rights of a person, the  
person chairing the hearing must issue written reasons and give notice of the  
decision and accompanying reasons as soon as practicable: Regulation s. 18. The  
Commission will generally issue its findings of fact and law before hearing  
submissions on sanctions: Policy 15-601.  
[13] In short, there is a considerable body of rules and policies designed to ensure  
a high degree of procedural fairness governing a hearing ordered under s. 161 at the  
end of an investigation. None of the rules or policies, however, deals directly with  
onus of proof.  
Factual Context  
[14] Against this background, I turn to the facts of the case at bar. The appellant  
Mark Morabito was at all material times the executive chairman and a shareholder of  
Canada Jetlines Ltd. (“Jetlines”), which came into being in February 2017 as the  
result of a reverse takeover transaction. Jetlines was planning to start up an “ultra  
low-cost” scheduled airline service in Canada and the United States. Its shares were  
registered for trading on the TSX Venture Exchange and on an over-the-counter  
market. In addition to obtaining the necessary government approvals and licences,  
Morabito v. British Columbia (Securities Commission)  
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one of Jetlines’ major challenges was to acquire or lease suitable aircraft. On  
September 7, 2017, the company had published a news release indicating that it  
was targeting sometime in the summer of 2018 for the start of flight operations. As  
required, the news release cautioned investors that its ability to meet this target was  
contingent on a number of factors and assumptions that could prove to be incorrect.  
[15] Mr. Morabito has deposed that in October 2017, for reasons related to his and  
his wife’s personal financial planning, he “made plans” to transfer 352,945 shares of  
Jetlines held in his name to his wife, Susan Morabito. He says it was not until  
February 23, 2018, that he “got around” to submitting the necessary forms to  
complete the trade. His affidavit does not state whether the transfer was gratuitous  
or if not, what price he received for the shares. As an insider of Jetlines, he made  
timely disclosure of the trade to the Commission.  
[16] Mr. Morabito deposed that in early March 2018, “for reasons that are not  
apparent to me”, shares in Jetlines “went on a run” such that shares that had traded  
at $0.88 on February 28 went as high as $1.42 on March 13, 2018. In the second  
half of March, the share prices returned to their previous levels and by the end of  
April they were trading at $0.78.  
[17] On March 13, 2018, Jetlines published a news release disclosing that it would  
not be achieving the targeted start-up date in June 2018 as previously projected.  
The principal reasons for this were said to be:  
... the well-documented engine manufacturing issues for the Airbus neo-  
powered aircraft, the increased demand for the Boeing freighter conversion  
program for Boeing 737-800s and world-wide traffic demand exceeding  
projections. All of these factors have led to increased demand and decreased  
supply of used aircraft available for lease. Jetlines previously secured aircraft  
under an LOI; however, the lessor was unable to provide a definitive delivery  
date. ...  
... [Jetlines] expects to provide an update announcement in the second  
quarter of 2018. In the interim Jetlines continues to advance its efforts with  
personnel recruitment, airport agreements, the licensing process and the  
financing plan.  
Morabito v. British Columbia (Securities Commission)  
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Also in the spring of 2018, two senior members of Jetlines’ board left the company  
involuntarily, one resigning before he could be terminated and the other agreeing at  
Mr. Morabito’s direction not to stand for re-election.  
[18] Under s. 57.2 of the Act, an insider who knows of a material fact or change  
that has not been “generally disclosed” regarding an issuer (here, Jetlines) is  
prohibited from entering into a transaction involving a security of the issuer.  
Section 57.4 provides for several defences, including where the insider reasonably  
believes that the other party to the transaction knows of the material fact or change.  
[19] On August 14, 2018, the Commission issued an ex parte investigation order  
under s. 142 of the Act into:  
1) trading in the securities of Canada Jetlines Ltd. (Canada Jetlines) by Mark  
Morabito and Susan Morabito  
2) Mark Morabito and Susan Morabito’s knowledge of information contained  
in Canada Jetlines’ March 13, 2018 news release which announced that  
Canada Jetlines would not meet its projected June 2018 start-up date  
3) Mark and Susan’s use of the proceeds obtained from the trading in the  
securities of Canada Jetlines  
from approximately January 1, 2017 forward.  
Mr. Morabito’s affidavit does not indicate the date on which he became aware of the  
[20] On the morning of November 5, 2018, Mr. Morabito had just arrived at his  
office when he received a call from his wife, who was home alone. Mr. Morabito  
... When Susan called me, she was very upset and scared. She told me that  
someone from the Commission had come onto our property and had banged  
on our front door demanding that she open it. She told me that it was a man,  
and that he was accompanied by a police officer. She said that she had been  
too frightened to open the door, but the man had yelled loudly (as he would  
have to have done, given that our heavy front door remained closed) that he  
was with “the Commission” and was there to talk about “the trades”. The man  
identified himself as Mr. Pesunti because that was the name on the card he  
Susan has described this disturbing incident in her Affidavit and in the  
correspondence she has exhibited. For my part, I do not understand why  
Morabito v. British Columbia (Securities Commission)  
Page 10  
Mr. Pesunti considered it to be at all appropriate to go to my home, shortly  
after I left for work (he may have even seen me drive away) to intimidate my  
wife like that. There can be no reason for him to have gone to our home at all,  
much less accompanied by the police. It is completely inappropriate and  
unprofessional. The only logical conclusion, in my view, is that he was trying  
to intimidate Susan and, through her, me.  
While this incident disturbed me greatly, I resolved to continue co-operating  
with the Commission as best as I could, with the expectation that they would  
conduct a speedy and focused investigation and bring this matter to an end.  
Subsequent events proved me wrong.  
[21] Counsel for the Morabitos exchanged correspondence with Mr. Pesunti  
regarding this incident. Mr. Pesunti said he wanted to speak to Mrs. Morabito and  
would issue a summons to compel her attendance. In later correspondence with  
counsel, Mr. Muir of the Commission’s Enforcement Division said he had reviewed  
Mrs. Morabito’s complaints and did not agree with her characterization of what had  
occurred. When the appellants pursued the matter, counsel for the Commission  
responded that based on the investigation,Mrs. Morabito’s characterization of  
events was “not supported by the evidence.” (Neither Mr. Muir nor Commission  
counsel had contacted Mrs. Morabito.)  
[22] A complaint to the Ombudsperson led to a request by the Ombudsperson’s  
office to the Commission to supply the Morabitos with further information as to why  
its response had been as brief as it was. The Ombudsperson’s file was then closed.  
[23] Over the following months, Mr. Pesunti issued the first of a series of  
production orders directed to Jetlines under s. 141 of the Act. An order dated  
December 4, 2018 required that the company provide:  
1. the identities of all individuals associated with the Company who had  
knowledge or awareness of the Companys inability to secure aircrafts  
and/or delay of start-up date which was announced in the Companys  
news release on March 13, 2018 (the News Release), and the date that  
they first became aware  
2. all documents and correspondence in relation to the Companys progress  
in securing aircrafts which gave rise to the News Release  
3. a chronological listing of all events, including, but not limited to, meetings,  
telephone conversations, and correspondence, in relation the Companys  
progress in securing aircrafts leading up to the News Release  
Morabito v. British Columbia (Securities Commission)  
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Although it would seem the investigation was being extended beyond the trade of  
Mr. Morabito’s shares to his wife in February 2018, the investigation order was not  
amended in any way.  
[24] In April 2019, Mr. Morabito was required to provide an undertaking to give 48  
hours advance notice to the Commission of any transaction he intended to conduct  
that involved a security of any reporting issuer with which he was in a “special  
relationship” — i.e., of which he was an insider. The Commission staff told him that  
the undertaking could be withdrawn only once the investigation proceedings were  
[25] Next, on December 3, 2019, the Commission issued a freeze order under  
s. 151 of the Act, which provides in material part:  
(1) The commission may make a direction under subsection (2) if  
(a) it proposes to order an investigation in respect of a person  
under section 142 or during or after an investigation in  
respect of a person under section 142 or 147…  
(2) In the circumstances described in subsection (1), the commission may  
direct, in writing,  
(a) a person having on deposit, under control or for safekeeping  
any funds, securities, exchange contracts or other property of  
the person referred to in subsection (1), to hold those funds,  
securities, exchange contracts or other property, and  
(b) a person referred to in subsection (1)  
(i) to refrain from withdrawing any funds, securities,  
exchange contracts or other property from any person  
having them on deposit, under control or for safekeeping,  
(ii) to hold all funds, securities, exchange contracts or other  
property of clients or others in the person's possession or  
control in trust for an interim receiver, custodian, trustee,  
receiver manager, receiver or liquidator appointed under  
the Bankruptcy Act (Canada), the Company Act, the  
Business Corporations Act, the Law and Equity Act, the  
Personal Property Security Act, the Winding-up Act  
(Canada), the Supreme Court Act or this Act.  
Morabito v. British Columbia (Securities Commission)  
Page 12  
[26] The order required that all cash, securities or other property in his account at  
Wellington-Altus Private Wealth Inc., Mr. Morabito’s wealth management firm, be  
held for safekeeping. He deposed:  
The Freeze Order was wholly unnecessary. There was no risk of dissipation  
of assets that would affect any remedy the Commission might order. In the  
circumstances, I believe this was a purely tactical step taken by Staff to  
embarrass me and thereby attempt to put further pressure on me to seek a  
voluntary resolution.  
[27] On January 30, 2020, the freeze order was varied to allow Mr. Morabito to sell  
securities as long as the proceeds of sale were held in the account and only  
purchases of securities recommended by Wellington-Altus for long-term investment  
were acquired. The operative portion of the order stated:  
The Commission, considering it not prejudicial to the public interest to do so,  
varies the Freeze Order pursuant to section 171 of the Act [to read] as  
1. Wellington-Altus Private Wealth Inc. (Wellington-Altus) hold all funds,  
securities, exchange contracts, or other property that is on deposit, under  
control or for safekeeping, for the following account in the name of Mark  
Morabito (Morabito), except to allow Morabito  
(a) to sell securities, provided that the proceeds remain in the account,  
(b) to purchase securities recommended to him by Wellington-Altus for  
long-term investing with a time horizon of over twenty (20) years:  
Account Name  
Mark Morabito  
Account Number  
Account Type  
Margin Account  
2. The Subjects refrain from withdrawing all funds, securities, exchange  
contracts or other property described in this Order, except to pay  
reasonable and customary brokerage fees to Wellington-Altus. [Emphasis  
[28] In June 2019, the Commission made a demand for documents to a company  
called King & Bay West Management Corp. (“King & Bay”), which provided  
management services to Jetlines. Mr. Morabito was its chairman and CEO. It was  
Morabito v. British Columbia (Securities Commission)  
Page 13  
required to produce to Mr. Pesunti no later than June 20, 2019 all “records and  
things” in its possession relating to:  
1. all incoming and outgoing electronic mail messages, in their native format,  
of Mark Morabito which, in any way, relate to Canada Jetlines Ltd.  
(Canada Jetlines, TSX-V: JET) and/or Susan Morabito during the period  
from December 1, 2017 through to March 31, 2018 (the Relevant Period)  
2. all incoming and outgoing electronic mail messages, in their native format,  
of Kate-Lynn Genzel [an employee of King & Bay] which, in any way,  
relate to Canada Jetlines, Mark Morabito and/or Susan Morabito during the  
Relevant Period.  
Mr. Morabito deposes that compliance with these demands was onerous and  
expensive for the management company. Its director of finance was examined under  
oath in October 2019.  
[29] Still the investigation continued. As at the date of his affidavit (January 5,  
2021), Mr. Morabito had received no notice of hearing arising from the investigation  
Mr. Morabito, Sr.  
[30] Also in evidence is an affidavit of Mr. Joseph Morabito, Mr. Morabito’s father.  
Mr. Morabito Sr. is the sole trustee of the Morabito Family Trust and although now  
retired, is a highly-experienced banking executive. He is now over 80 years old and  
not in good health.  
[31] On May 7, 2020, Mr. Morabito Sr. received a demand for production from  
Mr. Pesunti seeking a “broad range of information” relating to the Trust. Five days  
later he received another demand regarding details of any travelling he had done  
outside Canada between March 1, 2018 and March 13, 2018. During much of that  
period, he had been in hospital in the United States as the result of a stroke;  
nevertheless, he deposes that he made good faith efforts to provide the demanded  
information. His legal counsel corresponded with the Commission on May 29, 2020,  
providing information regarding the Trust and also stating:  
We are making enquires into the remainder of the requests in the Demand  
and are also considering whether they properly fall within the scope of the  
Morabito v. British Columbia (Securities Commission)  
Page 14  
Investigation Order. In the interim, we are advised that during the identified  
period December 12, 2017 to March 13, 2018 (the “Period”), Mr. Morabito  
has no recollection of any specific discussion of the business of Canada  
Jetlines Ltd. (“Jetlines”) with his son Mark, though such a broad topic may  
have come up in general conversation in a high level manner. Mr. Morabito  
similarly had no specific discussions about leasing aircrafts or the March 13,  
2018 news release with his son during the Period. Mr. Morabito did mention  
his sale of Jetlines shares to his son after that trade had been made. The  
context was in relation to a discussion of how Mr. Morabito raised cash to  
repay a promissory note to the Trust. To the extent that the timing of  
Mr. Morabito’s hospitalization provides sufficient response to your inquiry in a  
broad sense, please advise as soon as possible. [Emphasis added.]  
Despite counsel’s assurances that they were making enquiries into any outstanding  
requests, Mr. Morabito Sr. deposes that the Commission “jumped to the conclusion”  
that he had refused to respond to those requests. He received a letter dated June 5,  
2020 demanding he provide his responses or specific reasons for failing to do so. He  
responded to the remainder of requests in the form of sworn written testimony to  
which were attached 343 pages of exhibits.  
[32] In July 2020, Mr. Pesunti demanded additional information. Mr. Morabito Sr.  
deposes that he became very concerned “about how [Commission] Staff was  
conducting their investigation, especially since I had made it clear in my response to  
the First Demand and Second Demand that I had no connection to the matters  
under investigation”. Another affidavit was sent on September 20, 2020 by his  
lawyer in response to the “Third Demand” of July 29.  
[33] Evidently, the Commission responded by letter to his lawyer on November 12,  
2020. The copy of that letter exhibited to his affidavit was not provided to us.  
[34] In the 33 months between the date of the investigation order and the date of  
the hearing under review, then, Commission investigators, accompanied by a police  
officer, had attended the Morabitos’ home unannounced on a weekday morning  
when they would have expected that Mrs. Morabito was at home alone; summonsed  
and interviewed Mrs. Morabito; issued demands for production to Jetlines, King &  
Bay, and Mr. Morabito Sr.; conducted an examination of the director of finance of  
King & Bay; required Mr. Morabito to give an undertaking that would remain in place  
Morabito v. British Columbia (Securities Commission)  
Page 15  
until the investigation was concluded; and issued a freeze order blocking him from  
withdrawing funds from a specified account (in which he deposes he had never  
traded shares of Jetlines). In his pleading, Mr. Morabito describes the investigation  
as having “spiralled out of control without approaching a timely conclusion” and  
asserted that Commission staff, in particular Mr. Pesunti, had “intruded into many  
aspects” of his and his wife’s lives which were “wholly unrelated to the trade in  
[35] In the meantime, Jetlines was amalgamated with another company and is no  
longer in operation.  
Application for Revocation  
[36] On January 7, 2021, Mr. and Mrs. Morabito applied under s. 171 for an order  
revoking the investigation order. In their Notice of Application, they characterized the  
investigative powers granted to Commission staff as “significant, and … inherently  
capable of abuse.” They noted that the Commission is responsible for monitoring  
staff and ensuring that they stay within the proper boundaries of their investigative  
powers. (Citing British Columbia (Securities Commission) v. Branch [1995] 2  
S.C.R. 3.)  
[37] The appellants did not contend that the investigation order itself should not  
have been issued in the first place; rather they contended that Commission staff —  
in particular Mr. Pesunti had abused their powers in a way that brought the  
Commission’s processes into disrepute, contrary to the public interest. They  
asserted that there was a “collateral purpose at work” and that staff had “artificially  
prolonged and weaponized the investigation”. They sought an order revoking the  
investigation order in its entirety to protect the integrity of its process and the powers  
reposed in it by the Legislature.  
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Page 16  
[38] The appellants quoted a passage from the concurring reasons of  
L’HeureuxDubé J. in Branch in which she emphasized the importance of securities  
commissions completing investigations in a timely way:  
... [W]e must be cognizant of the fact that the securities industry is acutely  
“time sensitive”. The longer improper market activities are permitted to  
continue unabated, the greater the potential adverse impact on the investing  
public. In order to address this danger, the Commission is empowered with  
the ability, amongst other things, to suspend all trading of particular securities  
and to suspend particular individuals from trading securities without a hearing  
in appropriate circumstances. Expeditious investigation into irregularities and  
suspected market misconduct is an important way by which to minimize the  
severity of such orders. ... [At para. 86; emphasis added.]  
In this case, the appellants submitted, the investigation had not been conducted  
expeditiously. In their words:  
The Investigation has been extant for over two years. Staff appear to  
periodically engage with the investigation, usually to press matters far beyond  
the margin of any reasonable interpretation of the Investigation Order. But  
there is no prospect it will end any time soon at least not until the Applicants  
buckle under the pressure and seek to make a voluntary resolution. The  
record supports the inference that that is the overarching objective.  
[39] Mr. and Mrs. Morabito went on in their Application to contrast the simple  
nature of the single trade that had taken place in February 2018 between them, with  
the “sweeping investigation” that had since proceeded in fits and starts, “without any  
apparent regard for the impact on the Applicants and their legitimate personal  
interests, and apparently without any concern” that the staff would be called to  
account by the Commission for their abuse of their powers. They urged the  
Commission to intervene to revoke the investigation order in order to do justice to  
their legitimate personal interests which step, they contended, would not be  
prejudicial to the public interest. To the contrary, they argued that revoking the order  
was what the public interest demanded.  
[40] I emphasize this “public interest” theme of the appellants in their Notice of  
Application, in order to distinguish it from an assertion of abuse of process  
independent of an application under s. 171. Although the Notice does refer at one  
point to an abuse of processon the part of Commission staff, Mr. Deane on behalf  
Morabito v. British Columbia (Securities Commission)  
Page 17  
of the appellants confirmed to the panel, and to us, that his clients were not pursuing  
that cause, which would ‘distract’ from the public interest principle embedded in  
s. 171. I will therefore proceed on this basis, but will advert briefly at the end of these  
reasons to Law Society of Saskatchewan v. Abrametz 2022 SCC 29, a recent  
decision concerning abuse of process in the administrative law context.  
The Hearing  
[41] The application under s. 171 was heard by a three-member panel of the  
Commission on May 17, 2021. At the outset, the appellants sought an order that the  
hearing be held in private and that their names not be publicly disclosed due to the  
possible prejudice to their personal reputations and other related persons. The  
executive director did not object to this request and the panel granted it, subject to  
any change in circumstances in the course of the proceeding. (At para. 9.)  
[42] In general terms, the director argued that the investigation order had not been  
confined to any single trade; that all investigative steps taken had been within the  
scope of the order; that there was “nothing unusual” about the length of time of the  
investigation, nor any evidence of ulterior motive behind the investigation; that the  
appellants had not established (my emphasis) any unfair or oppressive behaviour on  
the Commission’s part and had not suffered any “actual prejudice”; and that the  
application amounted to an “impermissible collateral attack” on steps taken during  
the investigation. In the director’s submission, the fact that the appellants had fully  
co-operated throughout the investigation and had failed to seek revocation or  
variation until 2021 meant that they should not be permitted at this late stage to have  
the investigation struck in its entirety. (At para. 33.) Finally, the director asserted that  
some of the arguments made by the appellants in their Notice of Application had  
been made on behalf of third parties who had no standing in the application. He did  
not name such persons or elaborate further.  
[43] One of the few pieces of evidence filed by the Commission respondents was  
an affidavit of the police officer who had attended with Mr. Pesunti at the doorstep of  
Mrs. Morabito’s home in November 2018. He deposed that he had not seen or heard  
Morabito v. British Columbia (Securities Commission)  
Page 18  
Mr. Pesunti “harassing, threatening, intimidating or acting aggressively toward  
Mrs. Morabito.” The officer was called as a witness and recalled very little of the  
[44] The panel took the matter under reserve.  
Application to Re-Open  
[45] Three days after the hearing, however, the appellants received a call from  
counsel for the executive director, requesting a “without prejudice” conference call  
with counsel for the appellants. This call took place on May 25, 2021.  
[46] In the call, counsel for the director made some mention of “litigation privilege”  
and told the appellants’ counsel, Ms. Burnham, that the director was ready to issue a  
notice of hearing in connection with the investigation. According to an affidavit of  
Ms. Burnham, the Morabitos were told that the individuals who would be namedin  
the notice of hearing were Mr. Morabito, Global Crossing Airlines (the corporate  
successor to Canada Jetlines) and Mr. Stanley Gadek, the former CEO of Jetlines.  
Counsel for the executive director said she wanted to give the appellants an  
opportunity to “make a proposal” to him, the director, before the notice of hearing  
was issued.  
[47] Counsel for the appellants responded that they found the timing of this call to  
be “inherently suspicious given that it was taking place only a few days after a  
hearing in which our clients were seeking to quash the Investigation Order.” The  
appellants did not make any “proposal” at this time or at any other.  
[48] The appellants did seek to introduce as fresh evidence in the revocation  
hearing an affidavit of Ms. Burnham concerning the call referred to as a  
“re-openingapplication. The panel denied the application for reasons set forth at  
paras. 7081 of its later reasons. In response to the allegation that the call was  
another indicator that the executive director was attempting to “extract a settlement”  
from the Morabitos, the panel observed that it had “very little, if any” evidence about  
the director’s motivations. The panel was “unable to infer, based on timing alone,  
Morabito v. British Columbia (Securities Commission)  
Page 19  
any improper motiveon his part and found there was “simply insufficient evidence”  
to draw the inference sought by the appellants. Indeed, there were “potential  
legitimate explanations for the conduct in question besides bad faith and intentional  
misconduct”. The panel continued:  
For the same reasons, if we had the evidence of the Call at the time of the  
hearing and we considered that with all the other evidence before us, we still  
would not be able to infer any improper motive on the part of the Executive  
Director, and it would not have caused us to decide the section 171  
application differently. It follows that we do not find the fresh evidence  
compelling. Given that, it is not necessary to address the other elements of  
the test for re-opening the hearing. The Applicants are not successful in  
meeting the Deyrmenjian test and we decline to admit the evidence of the  
Finally, as part of the application, the Applicants sought an order from the  
Commission preventing the Executive Director from exercising his discretion  
under section 161 of the Act to issue a notice of hearing, for at least 60 days  
after this decision. The practical application of such an order would prevent a  
notice of hearing from being issued until after the appeal period in the Act  
relating to this decision expired. [At paras. 812; emphasis added.]  
The Panel’s Decision  
[49] The panel rejected procedural arguments made by the director concerning  
standing and collateral attack. It ruled that it was sufficient that the appellants were  
directly affected by the order; the fact it might affect other parties did not affect their  
standing. The panel also accepted the appellants’ argument that the application was  
not a collateral attack on the investigation, since they were “not seeking to set aside  
any particular order or demand issued during the investigation, but rather the Order  
as a whole.” (At para. 38.)  
Substantive Issues  
[50] With respect to the substantive issues raised by the appellants, the panel  
began by noting at para. 22 that the executive director had disclosed “very little  
information about further steps taken during the ongoing investigation.” The  
Morabito v. British Columbia (Securities Commission)  
Page 20  
appellants had made their allegations of misconduct and delay “around four main  
propositions”, which the panel summarized as follows:  
a) The investigation has gone on for too long, some 33 months as of the date  
of the application. They add that the investigation has had significant  
impacts on the Applicants, especially in light of the ongoing freeze order  
and undertaking. The Applicants also note that the mere fact of having the  
investigation hanging over their heads is a burden and it is problematic  
that some of their confidential advisors have necessarily become aware  
that they are under investigation for securities related conduct.  
b) The investigation was prompted by a single trade between the Applicants  
in February 2018, but the investigation has intruded into many aspects of  
the Applicants’ lives wholly-unrelated to the trade in question. The  
investigators exceeded the scope of the Order, or at minimum interpreted  
it in an overly broad manner, when they made very significant requests for  
documents and other information from the Applicants and from other  
parties. The Applicants submit that these requests are excessive,  
particularly in light of the significant efforts expended in complying with  
c) The investigation began with a visit to the residence of the Applicants at a  
time of day when it would be reasonable to assume that only  
Ms. Executive would be at home. They submit that there can be no proper  
motive for such a visit, and that it in fact caused significant distress.  
d) The investment advisor who arranged for the execution of a key sell order  
by the family trust has evidence which might exonerate the Applicants and,  
so far, the investigators have elected not to interview that individual.  
The Applicants submit that the evidence is sufficient for us to draw an  
inference that the investigators were motivated by an improper purpose. The  
Applicants put the point this way in their application:  
More than two years on, Staff move the investigation forward, if at all, at  
less than a glacial pace. The only reasonable inference to be drawn is that  
this investigation, like perhaps others, is being prolonged for improper and  
collateral purposes, namely to induce the Applicants to seek to make a  
voluntary resolution. The record supports the conclusion that Staff have  
artificially prolonged and weaponized the investigation process. This ought  
to be a matter of significant concern to the Commission, including in its  
supervisory function. [At paras. 278; emphasis added.]  
[51] With respect to the conduct of the investigation, the panel noted that the  
Supreme Court in Branch had made it clear that the degree of fairness afforded to  
an individual is lower during the investigation phase of an enforcement proceeding  
than during the hearing phase. There is always a reasonable expectation that  
market participants who choose to participate in a highly-regulated industry might be  
“questioned by a regulator”, and securities investigations by their very nature are  
Morabito v. British Columbia (Securities Commission)  
Page 21  
complex and difficult. The panel quoted a well-known passage, again from the  
concurring reasons of L’HeureuxDubé J. in Branch:  
First, the argument that fundamental fairness may require different standards  
in different contexts is evidenced by the different procedural protections that  
we generally accord to witnesses called to appear at hearings similar to that  
challenged in the present case. Although those conducting an investigation  
are always under a duty to act fairly, this Court has held that fairness in the  
context of such hearings does not require that the persons who are the  
“subjects” of the investigation participate in the examination of other  
witnesses, or that they be provided with an opportunity to adduce evidence or  
make submissions to the investigator: Roper v. Royal Victoria Hospital,  
[1975] 2 S.C.R. 62, and Irvine v. Canada (Restrictive Trade Practices  
Commission), [1987] 1 S.C.R. 181. See also Ontario Securities Commission  
v. Biscotti (1988), 40 B.L.R. 160 (Ont. H.C.).  
Second, although activity in the securities sphere is of immense economic  
value to society generally, it must be remembered that participants engage in  
this licensed activity of their own volition and ultimately for their own profit. In  
return for permitting persons to obtain the fruits of participation in this  
industry, society requires that market participants also undertake certain  
corresponding obligations in order to safeguard the public welfare and trust.  
Participants must conform with the extensive regulations and requirements  
set out by the provincial securities commissions. Many of these requirements  
are fundamental to maintaining an efficient, competitive market environment  
in a context where imperfect information is endemic. They are also essential  
to prevent and deter abuses of such asymmetries of information, and  
therefore to maintain the integrity of the securities system and protect the  
public interest.  
Third, given the nature and breadth of this obligation, as well as the important  
economic stake that the investing public holds in its proper fulfilment, I fail to  
see how market participants would not expect to be questioned by regulators  
from time to time as to their market activities. ... [At paras. 768; emphasis  
[52] At para. 40, the panel noted that in a recent decision, Re Parhar, a panel had  
referred to the seminal case on procedural fairness in administrative law, Baker v.  
Canada (Minister of Citizenship and Immigration) [1999] 2 S.C.R. 817, to which I  
shall return below. Baker had been applied by the Ontario Securities Commission  
(“OSC”) in Re Azeff 2012 ONSEC 16, in connection with the duty of fairness owed to  
a person under investigation, and prior to the issuance of a notice of hearing. One of  
the subjects of the investigation sought a stay of proceedings based on abuse of  
process. The panel concluded that the “scope for intervention into an ongoing  
Morabito v. British Columbia (Securities Commission)  
Page 22  
investigation should be limited” and quoted with approval a passage from Re  
Proprietary Industries Inc. 2005 ABASC 745, aff’d 2010 ABCA 405:  
Staff's conduct of an investigation and its subsequent conduct of a hearing,  
including its determination of which witnesses to call, are matters of  
prosecutorial discretion. It follows that however well (or poorly) an  
investigation is carried out, and however competently Staff present their case,  
it is not the function of a hearing panel, except in the most egregious of  
circumstances, to enter into the investigative or prosecutorial process or to  
substitute our opinions in these matters. [At para. 113; emphasis added.]  
[53] The panel in this case also referred to X Corp. 2004 ONSEC 19, where the  
applicants had sought the revocation of an investigation order made under s. 144 of  
the Ontario Securities Act after 18 months had passed without any hearing. They  
asserted this had caused “prejudice and harm” to the issuer company. In its reasons,  
the OSC acknowledged that in considering such an application, the panel must  
balance the objectives of the Act the protection of investors, along with the  
fostering of fair and efficient capital markets and public confidence in them. This will  
almost always, the panel in the case at bar noted, “include the reality that an  
investigation by staff into the affairs of an issuer will always cause some prejudice”.  
(At para. 42.) The OSC ruled in X Corp. that it was in the public interest to continue  
the investigation.  
[54] The panel in the case at bar agreed with the appellants that the test to be  
applied under s. 171 was whether the variation or revocation of the order would be  
prejudicial to the public interest, and that any consideration of the public interest  
“should be made in light of the impacts of the Order on the Applicants.” At the same  
time, the panel agreed with the executive director at the outset of its analysis that the  
onus was on the applicants to establish that a variation or revocation would not be  
prejudicial to the public interest. (At para. 44.)  
[55] Approaching the appellants’ four main complaints “through an objective lens  
which includes the broader context”, the panel pointed out that s. 159(1) of the Act  
contained a six-year limitation period for the commencement of an action other than  
one referred to in s. 140. The order here was well within the six-year period. (The  
panel did not explain the logic of comparing a delay in carrying out an investigation  
Morabito v. British Columbia (Securities Commission)  
Page 23  
with the time allowed for the commencement of an action.) Although the panel  
agreed with the Court in Branch that there is a need for the Commission to “proceed  
quickly” with investigations, it observed that the need to move quickly to prevent  
harm (as for example where someone who has breached the Act is in the process of  
removing funds from the province) should not permit the subject of an investigation  
to impose an artificial timeline. The panel continued:  
The length of time taken in this case along with the fact of and the events  
during the home visit appeared to be the primary reasons given during oral  
arguments by the Applicants’ counsel for why we should conclude that the  
investigation has been motivated by an improper and ulterior motive. The  
difficulty with this submission is that securities regulatory investigations, by  
their nature, are often complex. They often occur in multiple stages, where  
investigators gather information which may lead to further rounds of  
information collection, with analysis of the gathered information at each  
stage. We see evidence of that in the facts described in paragraph 20 above.  
All of these steps take time. The duration of this investigation is not  
inconsistent with many investigations that result in enforcement proceedings  
before us and, as stated above, well within the limitation period in section  
159. We are unable to conclude, from the evidence before us, that the length  
of time taken in this investigation has been inappropriately long. [At para. 52;  
emphasis added.]  
[56] With respect to the appellants’ argument that the scope of the investigation  
did not justify the large volume of records and other information demanded by the  
executive director, the panel found there was “evidence in the record” that showed  
circumstances justifying the existence of an investigation. This would “logically  
extend to the topic of whether Mr. [Morabito] caused trades to be executed through  
accounts which he might have had some form of control over but which might not  
have been in his name.” (At para. 53.) Further, the fact that the investigation seemed  
to go dormant for long periods was based solely on outside appearancesof  
inactivity. The total duration of the investigation thus far was found not to be beyond  
the norm.  
[57] The third general matter raised by the appellants related to the unannounced  
visit to Mrs. Morabito’s home minutes after her husband had left for work. The  
executive director denied the investigator had acted inappropriately or in an  
intimidating way, but provided no evidence or explanation regarding the “motivation  
Morabito v. British Columbia (Securities Commission)  
Page 24  
and strategy” behind the visit. The panel reviewed the factors that had made  
Mrs. Morabito especially sensitive to what had happened (see para. 56) and  
concluded on this point:  
The Applicants assert that, especially given the decision of the Executive  
Director to not call evidence explaining the motivation and strategy behind the  
home visit, it is appropriate for us to draw an inference that the motivation  
was improper. It is true that much of the evidence which comes before this  
tribunal and which has been collected from the subjects of investigations is  
collected in the course of formal interviews. Such interviews are often  
conducted in the Commission’s offices with the subject of the interview  
accompanied by counsel and after appointments have been arranged.  
Having said that, it does not follow that it is improper for investigators to seek  
to interview someone at their home without an appointment. Objectively,  
there is not a sufficient basis in the evidence to infer an improper purpose  
and we do not draw such an inference. (At para. 59; emphasis added.]  
[58] Finally, the panel considered the appellants’ objection that the investigators  
had not interviewed the investment advisor who could have been expected to have  
extensive knowledge of the affairs of the Family Trust and certain key trading  
instructions. Again, the executive director offered no evidence or explanation as to  
why this witness had not been interviewed. His response was that the investigation  
was not yet over and that it was not for the panel to “micro-manage investigations or  
to force investigators to reveal significant details” while an investigation is ongoing.  
[59] The panel agreed. After again citing the principle that participants in public  
markets should expect to be investigated from time to time, the panel found that the  
“background facts” in this instance confirmed the existence of issues that justify  
investigation” and that there was an obvious public interest in learning “the truth”  
about certain trading in Jetlines shares. In the panel’s words:  
For instance, the evidence suggests that shortly before the Issuer published a  
news release setting out what would likely be viewed in the market as bad  
news, a material instruction to sell shares of the Issuer was placed by the  
family trust as mentioned above. We do not find the steps taken by the  
investigators in light of that information to be surprising or outside the scope  
of the Order.  
In order to be effective, investigators need independence to follow leads and  
to explore new avenues which emerge as information is collected. The  
primary restraints on the scope of investigations are the limitation period in  
the Act and the parameters set by the terms of the investigation orders. There  
Morabito v. British Columbia (Securities Commission)  
Page 25  
is a very significant public interest in letting investigations run their course  
within those authorized parameters. Implicitly, this suggests that Applicants  
must establish very significant competing public interest factors before the  
Commission should revoke an investigation order. [At paras. 667; emphasis  
In the result, the panel concluded that none of the four areas of complaint, taken  
singly or together, was sufficient to support the conclusion that the public interest  
favoured bringing the investigation to an end. (At para. 69.)  
[60] Ultimately, a notice of hearing was issued two days after the panel’s decision  
was released.  
On Appeal  
[61] Leave to appeal the panel’s dismissal of the application for revocation was  
granted by Mr. Justice Grauer in chambers, who formulated the sole question to be  
heard: did the panel err in law by placing the onus on the appellants to satisfy the  
panel that revoking the decision to issue the investigation order would not be  
prejudicial to the public interest?  
[62] Not surprisingly, the appellants rely heavily on Party A, which was released a  
few days before the release of the panel’s reasons and obviously was not referred to  
in its reasons. I do not intend to rehearse this court’s entire reasons in Party A, but  
will try to limit my review to those portions that are relevant to procedural fairness in  
general and onus in particular.  
Party A  
[63] Speaking for the Court, Madam Justice Griffin began her analysis in Party A  
with a review of the key statutory provisions relating to asset freeze orders. Under  
s. 151(1)(a), such an order may be issued where there is a proposed or existing  
investigation under s. 142 or an existing investigation under s. 147. The investigation  
order in Party A had been made under s. 142(1), which was also invoked by the  
Commission in the case at bar. It is reproduced at para. 3 above.  
Morabito v. British Columbia (Securities Commission)  
Page 26  
[64] The Court noted that s. 7 of the Act prohibits the Commission from delegating  
a power or duty referred to in (inter alia) ss. 142 or 148152 to the executive  
director. Under subsection (4), a member of the Commission must not sit on any  
hearing to be held with respect to any matter in relation to which the member  
exercised a power or performed a duty referred to in ss. 142 or 148152 and which  
was delegated to the member under subsection (1).  
[65] Section 171 (reproduced above at para. 4) applies to a variety of decisions of  
the Commission, including of course decisions to make investigation orders and  
freeze orders. Griffin J.A. reviewed Hearings Policy 15-601 of the Commission and  
Both versions of the Hearings Policy 15601 provide that the Commission  
generally does not hold a hearing but will consider written submissions where  
a party is applying to the Commission under s. 171 to revoke or vary a  
decision of a single commissioner. Both versions of the policy state that:  
Before the Commission changes a decision, it must consider that it  
would not be prejudicial to the public interest ….  
[Emphasis added.]  
The previous hearings policy further stated that:  
This usually means that the party must show the Commission new  
evidence or a significant change in the circumstances.  
[Emphasis added.]  
This requirement is carried forward in the new policy, with a qualification:  
If a panel of the Commission is considering its own decision, this  
usually means that the party must show the Commission new and  
compelling evidence that was not before the original decision  
maker, or a significant change in the circumstances since the  
original decision was made. If the Commission is considering a  
decision made by a single commissioner, the Commission may  
consider other factors.  
A party must apply to the Commission in advance of the hearing  
and demonstrate why the evidence that was not before the original  
decision maker is new and compelling, and should be admitted. The  
Commission will hear submissions from all parties. In some  
circumstances, the Commission may hear the application to  
introduce new evidence as part of the hearing to revoke or vary a  
decision. In that case, it will receive the evidence for the purposes  
of determining if it meets the test to be admitted. [At paras. 457;  
emphasis added.]  
Morabito v. British Columbia (Securities Commission)  
Page 27  
[66] The Court noted that since the purpose of a freeze order is to preserve assets  
that may be needed to satisfy claims brought under the Act, an order may not be  
made under s. 151(1)(a) where there are no proceedings pending or extant against  
the named owners of the assets sought to be ‘frozen’. (At paras. 127, 140.) The  
Legislature had recognized the “intrusive nature” of a freeze order at the  
investigative stage by providing some built-in safeguards. In particular:  
... These safeguards provide for independent assessment of when a freeze  
order should be issued and when it should be revoked or varied:  
a) Only the Commission may issue a freeze order; this is a power  
that cannot be delegated to the executive director: ss. 7(2), 151.  
b) A s. 151(1)(a) order can only be made in respect of a proposed  
investigation under s. 142, or an actual investigation under  
ss. 142 or 147. These are formal investigations approved by the  
Commission or Minister respectively, and these types of  
investigations expressly require that the scope of the  
investigation be specified, in contrast to informal investigations  
commenced by the executive director.  
c) A Commission member who issues a freeze order cannot sit on  
the Commission panel hearing the question of whether to  
revoke or vary the freeze order, unless the parties consent:  
ss. 7(4), 171.  
d) A party has the right to seek leave to appeal a decision of the  
Commission: s. 167.  
This is consistent with the overall structure of the Act, which gives the  
Commission a broad public interest mandate, but at the same time imposes  
limits on the tools available and contains checks and balances. Examples are  
also seen in the procedures surrounding investigation orders, temporary  
orders, and investigatory powers. [At paras. 1434; emphasis added.]  
[67] As an example of “checks and balances”, the Court noted that an  
investigation order under s. 142 sets limits on the scope of the enquiry, which is  
necessary in turn to justify and define the scope of an investigator’s powers to  
compel testimony and subpoena witnesses. The executive director argued in Party A  
that the threshold for a freeze order was “extremely low”, given the fact that such an  
order may be issued when an investigation is only being proposed and has not yet  
been formally ordered. The Court pointed out that although there may be urgent  
situations in which an asset freeze order may be sought and issued before an  
investigation is approved, it is only an investigation proposed under s. 142 that may  
Morabito v. British Columbia (Securities Commission)  
Page 28  
be relied upon to support a freeze order under s. 151(1)(a). Aside from these  
circumstances, the existence of an investigation or proposed investigation order  
alone is not sufficient to justify the issuance of an asset freeze order. (At paras. 151–  
[68] Although the issuance of a freeze order pending completion of an  
investigation required an exercise of discretion by the chair and consideration of the  
“public interest in all the circumstances known at the time of the request”, this left  
open the content and context of the “public interest” to be considered under  
s. 151(1)(a). In the Court’s opinion:  
... the Commission’s public interest mandate requires that there be a  
preliminary assessment of the basis of the proposed investigation and that all  
relevant factors in the public interest be considered, which factors can vary  
from case to case but can include factors beyond the protection of the  
investing public. [At para. 156; emphasis added.]  
[69] The Court found that the Legislature had intended that some “evidentiary  
threshold” exist for the issuance and maintenance of asset freeze orders at the  
investigatory stage; that the Commission was required to assess the evidence to  
determine if it raised a serious question that the investigation could show breaches  
of the Act leading to financial consequences against the asset owner; that while the  
evidence must be more than mere speculation or suspicion, it can be less than  
evidence of the level required to satisfy a balance of probabilities; and that the  
evidentiary standard is “low and flexible” and will not “unduly constrain the  
enforcement arm” of the Commission. (At paras. 1769.)  
[70] The Court noted the well-known goals of securities legislation the  
protection of the investing public, capital market efficiency, and ensuring public  
confidence in the system. (See the cases cited at para. 182 of Party A.) These  
goals, however, may not be relied on to extend what the Commission may do under  
the Act. As this court had observed in Poonian, “The public interest is not unlimited.”  
(At para. 120; quoted in Party A at para. 184.) After noting in particular this court’s  
comments at para. 31 of Pioneer Ventures and at para. 12 of Exchange Bank &  
Trust Inc. v. British Columbia (Securities Commission) 2000 BCCA 389, Griffin J.A.  
Morabito v. British Columbia (Securities Commission)  
Page 29  
brought together her conclusions regarding the evidentiary threshold required for a  
freeze order under s. 151(1)(a) and the role of the public interest. In her analysis:  
What is necessary prior to a s. 151(1)(a) order being made is that an  
investigation must either be in place under ss. 142 or 147 or proposed under  
s. 142. It is necessary that the Commission conduct a preliminary  
assessment of the evidence and conclude that it raises a serious question  
that the investigation could show breaches of the Act leading to financial  
consequences in the form of penalties or claims against the owner of the  
assets. Mere speculation will not be enough. The Commission will rely on its  
expertise, experience and common sense in assessing the evidence and in  
drawing any available reasonable inferences arising from the evidence.  
Additionally, the Commission must be satisfied that the issuance of the asset  
freeze order is in the public interest by considering all factors relevant to the  
case at hand. The public interest includes not only protection of the public,  
but also public confidence in the markets. Public confidence will often require  
the Commission to take into account the interests of the asset owners and to  
recognize that an asset freeze order is extremely intrusive.  
There can be any number of factors relevant to the public interest in a given  
case, depending on the circumstances. A nonexhaustive list of factors that  
may be relevant in a given case includes: the seriousness and scope of the  
allegations; the stage of the investigation and any urgency; the scope and  
value of the assets to be frozen in relation to the potential claims or penalties;  
the potential consequences of the order on the asset owner or other parties;  
and the strength of the evidence in support of the asset freeze order. Other  
factors may also be relevant, including whether there is a link between the  
assets and the wrongful conduct, a risk of dissipation of assets, or other  
security for the potential claims or penalties. These are not mandatory criteria  
that must be analyzed in a checklist fashion, but simply examples of factors  
that may be relevant to the public interest analysis. [At paras. 2079;  
emphasis added.]  
Onus of Proof  
[71] Finally, the Court in Party A came to the question of onus of proof. With  
respect to the language of s. 171, Griffin J.A. noted that the requirement that the  
Commission be satisfied that revoking the order would not be prejudicial to the  
public interest, would require proving a negative — a “notoriously difficult” burden.  
Section 171 should not be taken as setting up an impossibly high burden of proof”  
on the applicant; such an assumption would make the review process  
“meaningless”. The fact that s. 171 applies to a broad variety of review applications,  
she observed, suggests that a decision-maker considering an application for  
Morabito v. British Columbia (Securities Commission)  
Page 30  
revocation or variation must look at the circumstances extant when the order was  
made as well those as at the time of the application. Griffin J.A. continued:  
... These circumstances will impact the question of onus.  
In my view, where the order under review is an asset freeze made pursuant  
to s. 151(1)(a), this requires the Commission to take into account whether the  
asset owner had an opportunity to be heard at the time the order was made.  
It is likely that in most cases, the asset owner’s first opportunity to be heard  
would be on their application to set aside the asset freeze order, pursuant to  
s. 171.  
The Latin maxim audi alteram partem, which means “hear the other side”, is a  
longstanding principle of natural justice. It means that in order for there to be  
a fair process, a judicial or quasi judicial decision depriving a person of their  
rights, including property rights, ought not to be made without giving the  
person a right to be heard: see Rt. Hon. Lord Woolf et al, De Smith’s Judicial  
Review, 6th ed (London, UK: Sweet & Maxwell, 2007), at 32425; Kapoor v.  
Makkar, 2020 BCCA 223. [At paras. 2168; emphasis added.]  
[72] The Court noted that the audi alteram partem principle is reflected in court  
proceedings to set aside an injunction that has been obtained ex parte. In such  
cases, it is recognized that restricting the affected party to raising only new issues’  
would work an injustice and result in less than a fair hearing. (Citing Kapoor v.  
Makkar 2020 BCCA 223 at para. 10 and Ocean Port Hotel Ltd. v. British Columbia  
(General Manager, Liquor Control and Licensing Branch) 2001 SCC 52.) From the  
absence of clear statutory language denying the right to an impartial hearing on an  
application to set aside an ex parte order and from the requirement that the panel  
hearing the s. 171 application must be different than the original decision-maker, the  
Court in Party A inferred that the Legislature had expected the audi alteram partem  
principle to apply in this context. (At para. 221.) Although that principle does not  
necessarily entail the placing of an onus on one party or the other, Griffin J.A. ruled  
that the onus lay on the executive director to establish that (a) the evidence raises a  
serious question that could show a breach or breaches of the Act leading to financial  
consequences and (b) the public interest would be served by the continuation of the  
order, taking into account any “relevant public interest factors”. The panel should,  
Morabito v. British Columbia (Securities Commission)  
Page 31  
the Court said, take a “fresh look” in a new hearing, without according deference to  
the original order made under s. 151(1)(a). (At para. 223.)  
[73] Party A was recently applied in Dunn v. British Columbia (Securities  
Commission) 2022 BCCA 132, in connection with a preservation order under the  
new s. 164.04 of the amended Act.  
Standard of Review  
[74] I turn to the question of onus of proof in an application for the variation or  
revocation of an investigation order. The parties agree, as do I, that since the  
question is one of law, and we are not being asked to review the final ruling of the  
panel applying the law to the facts, the standard of review is one of correctness.  
[75] The appellants began their argument with the proposition that investigation  
orders “affect the rights of the targets of the investigation” (my emphasis), giving  
investigators broad statutory powers such as those mentioned at para. 8 above.  
They emphasize that the subject of an investigation order is not usually heard before  
the order is made; and that they, the appellants, were still not aware (at the time of  
commencing their application for revocation) of what information was before the  
Commission member who made the order in this case.  
[76] The appellants emphasize that a “key factor” on the issue of onus in Party A  
was whether the applicants had been heard when the freeze order was first made,  
or whether the revocation application under s. 171 was the first opportunity for them  
to be heard in connection with the matter. (The facts of the case at bar clearly come  
within the latter class.) In their submission, the approach taken by the panel in this  
case was the “opposite” of what s. 171 requires: the executive director adduced  
almost no evidence and the Commission began its analysis with the proposition that  
the appellants bore the onus of showing that revoking the investigation order would  
not be prejudicial to the public interest. (See para. 44.) The appellants contend that  
the director’s failure to explain or provide evidence concerning the four issues raised  
Morabito v. British Columbia (Securities Commission)  
Page 32  
by the appellants meant that they, the appellants, were forced to bear the burden of  
dislodging an assumption built on facts and evidence unknown to them.”  
[77] In response, the director and the Securities Commission submit that it is not  
correct to say, as the appellants do in their factum, that the same interpretive  
considerations as were applied in Party A in respect of freeze orders, apply to  
investigation orders under s. 142. They describe the ruling in Party A as based on  
procedural fairness concerns that do not arise in the circumstances of this case.”  
[78] On an even more general level, these respondents rely on the reasoning in  
Branch to the effect that fairness in the context of investigatory hearings does not  
require that the subjects of the investigation participate in the examination of  
witnesses or be provided with an opportunity to adduce evidence or make  
submissions at the investigation stage. They again refer in particular to the  
comments of L’HeureuxDubé J. in Branch:  
… Although those conducting an investigation are always under a duty to act  
fairly, this Court has held that fairness in the context of such hearings does  
not require that the persons who are the "subjects" of the investigation  
participate in the examination of other witnesses, or that they be provided  
with an opportunity to adduce evidence or make submissions to the  
investigator: Roper v. Royal Victoria Hospital, [1975] 2 S.C.R. 62, and Irvine  
v. Canada (Restrictive Trade Practices Commission), [1987] 1 S.C.R. 181.  
See also Ontario Securities Commission v. Biscotti (1988), 40 B.L.R. 160  
(Ont. H.C.) [At para. 76.]  
The Commission respondents also cited Ironside v. Alberta (Securities  
Commission), 2009 ABCA 134, where the Court observed at para. 113 that “Even in  
the criminal law and Charter context, there is no clear duty to inform an investigation  
target of the case against him or provide him the chance to debate the potential  
charges beforehand.”  
[79] Gatti v. Ontario (Securities Commission) [2001] O.J. No. 1496 was also  
noted. There, an applicant challenged an investigation by the OSC on the ground  
that he had been denied natural justice. In particular, he argued that the OSC had  
failed to have a commissioner consider the evidence obtained on the investigation  
before deciding whether a notice of hearing should be issued. As well, he said the  
Morabito v. British Columbia (Securities Commission)  
Page 33  
investigation into his conduct had not been “balanced” because he had not been  
given a sufficient opportunity at that stage to respond to the evidence against him.  
The OSC dismissed his application and the Divisional Court dismissed his appeal,  
reasoning that there was nothing in the Ontario Securities Act that required the  
Commission to consider the adequacy of an investigation before issuing a notice of  
hearing. In fact, recent amendments to the statute signalled an intention to “isolate  
the Commissioners from the investigative and prosecutorial functions of the  
Commission.” The Court noted that the statutory scheme differed from those  
discussed in cases that arose in contexts that require “pre-charge approval”. In the  
Court’s words:  
The duty of fairness is at this stage minimal. As Sharpe J. (as he then was),  
noted in Glendale Securities Inc. v. Ontario Securities Commission, [1996]  
O.J. No. 2861 (Gen. Div.), the scope for review of the act of issuing a Notice  
of Hearing while not wholly immune from review is limited. A court would be  
justified to intervene if it were demonstrated that the Notice had been issued  
in bad faith, or for an improper purpose of that proceeding further would  
involve a failure of natural justice -- none of which is demonstrated on the  
facts before us. [At para. 8; emphasis added.]  
Onus of proof was not mentioned in the Court’s analysis, although para. 8 might be  
read as suggesting it would have been up to the applicants to demonstratean  
improper purpose or bad faith at the investigatory stage.  
[80] At the end of the day, and with the exception of Party A, we were not referred  
to any instance in which the duty of fairness under a securities statute has been  
found to impose more than a minimal duty of fairness at the investigation stage.  
Procedural Fairness (General)  
[81] Stepping back from the securities context, I note that the authors of  
D.P. Jones and A.S. de Villars, Principles of Administrative Law (7th ed., 2020) write  
that whether a duty of fairness applies at the investigative stage of an administrative  
process is a question that has changed over time. Traditionally, a duty of fairness  
was not applied at this stage. In Guay v. Lafleur [1965] S.C.R. 12, for example, the  
Supreme Court ruled that audi alteram partem did not apply to an administrative  
officer whose function was simply to collect information and make a report, and who  
Morabito v. British Columbia (Securities Commission)  
Page 34  
had no power either to impose a liability or to give a decision affecting the rights of  
the parties. Other courts, the authors recount, took the view that a duty of fairness  
did not apply where the investigation was conducted in accordance with the  
requirements of the relevant statute. (Citing J.T. Casey, The Regulation of  
Professions in Canada (loose-leaf, 2019) at 77.)  
[82] In the 1990s, however, the Supreme Court of Canada extended the reach of  
procedural fairness at the investigative stage, particularly in the judicial review of  
decisions made by the councils of self-governing professional bodies. In 1989, the  
Supreme Court in Syndicat des employés de production du Québec & de l’Acadie v.  
Canada (Human Rights Commission) [1989] 2 S.C.R. 879 (“SEPQA”) adopted the  
reasoning of Lord Denning in Selvarajan v. Race Relations Board [1976] 1 All  
E.R. 12 (C.A.) that:  
In all these cases it has been held that the investigating body is under a duty  
to act fairly; but that which fairness requires depends on the nature of the  
investigation and the consequences which it may have on the persons  
affected by it. The fundamental rule is that, if a person may be subjected to  
pains or penalties, or be exposed to prosecution or proceedings, or deprived  
of remedies or redress, or in some such way adversely affected by the  
investigation and report, then he should be told the case made against him  
and be afforded a fair opportunity of answering it. [At 19; emphasis added.]  
The Supreme Court held in SEPQA that the distinction made in the past between  
administrative or investigative proceedings and quasi-judicial proceedings was no  
longer determinative of whether procedural fairness applied: see Jones and de  
Villars at 286; Knight v. Indian Head School Division No. 19 [1990] 1 S.C.R. 653  
at 669.  
[83] In 1999, the Supreme Court in Baker undertook a thorough analysis of many  
outstanding issues in administrative law. For our purposes it is noteworthy that the  
Court echoed Le Dain J. in Cardinal v. Director of Kent Institution [1985] 2  
S.C.R. 643 at 653) in confirming that procedural fairness applies wherever an  
administrative decision affects the “rights, privileges or interests” of an individual.  
However, the content, or degree, of that duty was said to be “eminently variable” and  
“flexible”, ranging between minimal and trial-like, depending on all relevant factors.  
Morabito v. British Columbia (Securities Commission)  
Page 35  
(See paras. 202.) These included the nature of the decision and the process  
followed in reaching it; the nature of the statutory scheme and the terms of the  
relevant statute; the importance of the decision to the individuals affected; and their  
legitimate expectations. (At paras. 238.)  
[84] Baker appears to remain the seminal authority on the duty of procedural  
fairness in administrative law despite the fact that it applied the now-abandoned  
“pragmatic and functional” standard of judicial review envisioned in Dunsmuir v. New  
Brunswick 2008 SCC 9, now superseded by Canada (Minister of Citizenship and  
Immigration) v. Vavilov 2019 SCC 65. Jones and de Villars conclude that generally  
speaking, the less final the tribunal’s decision that affects the rights of an individual,  
the weaker the content of the duty of fairness in the pre-hearing stage; and that the  
content of the duty will “vary with the context”, although it is “likely to be of a more  
limited nature than is required at the hearing stage.” (At 289; see also Sara Blake,  
Administrative Law in Canada (6th ed., 2017) at § 2.324 and Donald J.M. Brown  
and John M. Evans, Judicial Review of Administrative Action in Canada (loose-leaf,  
2022, release 2) at § 9.2.  
[85] In my respectful view, the statutory scheme in this case, the Baker factors,  
and the relevant authorities place investigation orders made under s. 142 of the  
Securities Act at the low end of the spectrum of procedural fairness. In this sense,  
they may be distinguished from asset freeze orders. An investigation order is not  
“final” in any sense; it merely initiates an investigation that may or may not have  
legal consequences for the subject. If and when a hearing is ordered, the legal  
position changes: the subject is in jeopardy in the form of a penalty or other legal  
sanction under the Act. The subject is informed of the allegations against him or her  
and (as seen earlier) is obviously entitled to disclosure of the investigator’s case,  
and to be heard with or without counsel and to testify and adduce evidence at  
the hearing.  
[86] The evidentiary standard to be met for the issuance of an investigation order  
is a low one. As suggested in Exchange Bank and Trust, as long as some basis —  
Morabito v. British Columbia (Securities Commission)  
Page 36  
as opposed to mere speculation is shown for the possibility that a breach of the  
Act may have occurred, is occurring or may occur in future, the order may be made.  
As far as freeze orders are concerned, Party A has now clarified a more onerous  
standard: the Commission must “conduct a preliminary assessment of the evidence  
and conclude that it raises a serious question that the investigation could show  
breaches of the Act leading to financial consequences in the form of penalties or  
claims against the owner of the assets” (at para. 207) and the particular factors  
relevant to the public interest, including the rights of asset owners (at para. 208).  
Griffin J.A. quoted from Exchange Bank & Trust as follows:  
One of the grounds for making an order under section 151 appears to require  
nothing more than the existence of an investigation order, or the intention to  
issue one. However, a freeze order generally has far more serious and  
immediate consequences than an investigation order. Property of the alleged  
wrongdoers is immediately affected and the property of innocent third parties  
can be captured in the freeze. The Commission must therefore consider the  
seriousness of the allegations and the evidence supporting them so it can  
weigh the threat to the public interest against the potential consequences of  
the order. [At para. 12; emphasis added.]  
[87] As a corollary of the low standard of evidence required for an investigation  
order, the onus on an applicant for revocation of such an order is a heavy one.  
However, one can imagine situations in which the Commission might have confused  
individuals having the same name, for example, or received faulty information  
concerning a trade. The necessary evidence to correct such an error will usually lie  
within the subject’s knowledge and mistakes of this kind should not be “impossible”  
for the applicant to demonstrate. In the case at bar, of course, the appellants did not  
allege that the investigation order was not properly made in the first place. They did  
not, and do not now, contest the fact that the trade between Mr. and Mrs. Morabito  
took place, nor that Mr. Morabito was an insider of Jetlines at a time when  
confidential information may have been known to him. In this sense, and setting  
aside for the moment how the investigation was conducted, the placing of the onus  
of proof in the revocation application would not be critical: the fact of the trade would  
in any event be sufficient to provide “some basis” for the suspicion that a  
contravention of the Act may have occurred.  
Morabito v. British Columbia (Securities Commission)  
Page 37  
[88] The legal significance of the investigation order to the subject is low in  
comparison to final orders made following a hearing, and in comparison to freeze  
orders. The latter types of order affect rights of the subject and potentially others. An  
investigation order may affect the privacy of the subject, but according to the Court  
in Branch, participants in securities markets can have little or no expectation of  
privacy in their investment activities. The Supreme Court has also recognized that  
investigations are basically the only tool available to government authorities in  
regulating the securities industry, where “asymmetries of information” are “endemic”:  
Branch at paras. 77, 80.  
[89] In my view there are also practical considerations that militate in favour of the  
conclusion that the subject of an investigation is not entitled to require the  
Commission to justify that order before the investigation has been completed and a  
hearing ordered under s. 161. Placing the onus on the director would normally  
require him or her to disclose what the investigation has shown so far and what he  
or she expects it will show as it progresses. In my opinion, such disclosure would  
open the door to the subjects of such orders to take evasive actions to forestall the  
discovery of possible contraventions of the Act. Many investigations would grind to a  
halt or bog down into ‘pre-hearingsthat would delay and distract the Commission  
from completing the investigation. Moreover, the Act currently places no limit on the  
number of times an application for revocation may be brought; nothing would stop  
the subject from applying repeatedly in respect of the same matter.  
[90] Finally, I note that even in the context of self-governing professions, this court  
has ruled that statutory investigations should generally be allowed to run their course  
before a higher level of procedural fairness will be required. In Puar v. Association of  
Professional Engineers and Geoscientists (British Columbia) 2009 BCCA 487, for  
example, an engineer was being investigated but the investigation was not yet  
complete. He relied on Netupsky v. Association of Professional Engineers and  
Geoscientists (British Columbia) [1997] B.C.J No. 1694 (C.A.), lve to app. dism’d  
[1997] S.C.C.A No. 475, where the broad statement of Lord Denning in Selvarajan  
had been conceded by the Association. However, this court, per Mr. Justice Finch  
Morabito v. British Columbia (Securities Commission)  
Page 38  
(as he then was), dismissed Mr. Netupsky’s complaint that the inquiry process  
should be “stopped” at the investigative stage due to unfairness and delay.  
Finch J.A. reasoned:  
In my respectful view, the learned chambers judge did not err in his  
disposition of the issues before him. It was not open to him on the application  
for judicial review, nor is it open to us, to decide the merits of Mr. Netupsky's  
bridge design. Whether it is deserving of professional censure is an issue  
which can only be addressed in a hearing. At that time Mr. Netupsky's  
allegations that his critics have misapprehended the design criteria, are  
biased, or are otherwise in error, can be fully explored. I have not been  
persuaded that there has been any breach of the rules of procedural fairness  
which would require intervention by this Court at this stage to prevent an  
injustice from occurring.[At para. 5; emphasis added.]  
[91] In Puar itself, Lowry J.A. for the Court adopted similar reasoning:  
What the Association conceded in Netupsky goes only as far as establishing  
that before a decision is ultimately taken to discipline a member of the  
Association, the member is entitled to know the allegations against him and  
be given the opportunity to respond. Netupsky does not assist Mr. Puar. It  
does not establish that, where the investigative function in a disciplinary  
process is distinct from the adjudicative function, as is the case here,  
procedural fairness requires the duty to disclose an allegation and afford the  
opportunity to be heard to be discharged at the investigative stage. While  
early disclosure may be useful, it is not normally required until the  
adjudicative stage where the member can expect to be afforded a hearing.  
[At para. 22; emphasis added.]  
In the result, no breach of the duty of procedural fairness prior to the issuance of a  
notice of inquiry was found in Puar. The applicant was not entitled to disclosure of  
the investigator’s report, or to make submissions, unless and until such a notice was  
issued and a hearing ordered. (At para. 24.)  
Abuse of Process  
[92] I reiterate that the appellants argued their case before the panel, and in this  
court, on the basis that it was in the public interest for the Commission to grant an  
order revoking the investigation order outright. As mentioned earlier, they did not  
contend that the order had not been properly made in the first place. Instead, they  
complained (in my opinion, not without some justification) about how the  
investigation was being carried out that it was proceeding at a “glacial pace”; that  
Morabito v. British Columbia (Securities Commission)  
Page 39  
the director’s tactics, if not abusive, were heavy-handed and unprofessional; and  
that if the director had in fact wished to get to the truth”, he should have spoken to  
the Morabitos’ investment advisor.  
[93] From these complaints, counsel for the respondent Commission and the  
executive director inferred that abuse of process per se was being asserted and that  
effectively, a stay was being sought. Given Mr. Deane’s position that this inference  
was erroneous, we need not consider the recent decision in Abrametz in detail. I  
note, however, that the Supreme Court confirmed the high standard of seriousness  
required to show that a stay of proceedings is appropriate where an abuse of  
process has been made out. A stay should be granted, the majority stated, only in  
the “clearest of cases” where the abuse “falls at the high end of the spectrum of  
seriousness” (at para. 83, citing Blencoe v. British Columbia (Human Rights  
Commission) 2000 SCC 44, and R. v. Power [1994] 1 S.C.R. 601 at 616); or where  
the “community’s sense of fairness and decency” would be “shocked” (citing R. v.  
Regan 2002 SCC 12 at para. 107). Rowe J. for the majority in Abrametz went on to  
say this about the public interest:  
The decision whether to grant a stay involves a balancing of public interests.  
On one hand, the public has an interest in ensuring that a tribunal established  
for its protection follows fair procedures, untainted by an abuse of process.  
On the other hand, the public has an interest in the resolution of  
administrative cases on the merits. A balance must be struck between the  
public interest in a fair administrative process untainted by abuse and the  
competing public interest in having the complaint decided on its merits .... [At  
para. 84.]  
[94] The Court ultimately ruled that delays on the part of the Law Society of  
Saskatchewan in disciplinary proceedings brought against a member lawyer had not  
been inordinate and that abuse of process was not proven. Onus of proof was not  
addressed directly but the Court appears to have proceeded (see, e.g., paras. 72  
and 90) on the basis that it lay on the party asserting abuse of process. The Court in  
Blencoe had left no doubt on the point: it was for Mr. Blencoe to discharge the  
“heavy burden” of showing a stay was the appropriate remedy. (See paras. 117 and  
Morabito v. British Columbia (Securities Commission)  
Page 40  
[95] I express no opinion as to whether the same degree of seriousness would  
also be required where the conduct of the investigation is challenged in an  
application under s. 171. What is certain is that all circumstances relevant to the  
public interest stand to be considered by the decision makers in both contexts.  
[96] In the end, I return to the comments of Griffin J.A. in Party A emphasizing the  
many aspects of public interest considerations that may be relevant in any given  
the courts have made clear that the public interest mandate is fulfilled not  
by regulation of the securities market in any manner whatsoever, but by  
regulation in a lawful manner, or to put it another way, in a manner that is not  
arbitrary or capricious: Future Solar at para. 25. This means that when the  
Commission exercises discretion to issue or maintain freeze orders under the  
Act, it must consider all relevant factors.  
There is more than one aspect of the public interest that may be relevant to  
the question of whether to issue or maintain asset freeze orders. Certainly,  
the Commission’s primary concern will be the protection of those members of  
the investing public who might be harmed by wrongful conduct. But the  
persons affected by the Commission’s orders, whether market participants or  
not, are part of the “public” as well, and their interests need to be considered  
so as to retain public confidence in the systemone of the three goals of  
securities legislation. [At paras. 1856; emphasis added.]  
[97] I have concluded that the proper balancing of these factors requires that the  
onus lies on the applicant for an order revoking an investigation order under s. 171.  
This does not mean, however, that an executive director or any other investigator  
should sit back in every instance and simply rely on the fact the burden of proof lies  
on the applicant. In cases where the applicant alleges unprofessional conduct or an  
abuse of some kind and adduces evidence supporting his or her case, the  
evidentiary burden may well shift to the director to respond in a meaningful way to  
explain why a particular tactic was followed, for example, or why an investigation has  
been inordinately delayed. Respectfully, the public interest would not be served by a  
regulatory system that the investing public perceives to be biased, unfair or  
chronically inefficient.  
Morabito v. British Columbia (Securities Commission)  
Page 41  
[98] In the result, I would respond to the question stated by Grauer J.A. in his  
order giving leave, by ruling that the onus of persuasion in an application under  
s. 171 lies on the applicant to satisfy the Commission that the revocation or variation  
of an investigation order would not be prejudicial to the public interest.  
The Honourable Madam Justice Newbury”  
I agree:  
The Honourable Chief Justice Bauman”  
I agree:  
The Honourable Mr. Justice Harris”  
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