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Langford Sharp c. Autorité des marchés financiers |
2021 QCCA 1364 |
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COURT OF APPEAL |
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CANADA |
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PROVINCE OF QUEBEC |
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REGISTRY OF |
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Nos. : |
500-09-028096-196, 500-09-028123-198 |
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(500-11-054667-189) |
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DATE: |
September 15, 2021 |
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No. 500-09-028096-196 |
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FREDERICK LANGFORD SHARP |
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APPELLANT - Petitioner |
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v. |
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AUTORITÉ DES MARCHÉS FINANCIERS |
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RESPONDENT - Impleaded party |
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and |
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SHAWN VAN DAMME |
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VINCENZO ANTONIO CARNOVALE |
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PASQUALE ANTONIO ROCCA |
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IMPLEADED PARTIES - Petitioners |
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and |
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SOLO INTERNATIONAL INC. |
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MICHEL PLANTE |
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IMPLEADED PARTIES - Impleaded parties |
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and |
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FINANCIAL MARKETS ADMINISTRATIVE TRIBUNAL |
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IMPLEADED PARTY - Respondent ____________________________________________________________________ No. 500-09-028123-198 SHAWN VAN DAMME |
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VINCENZO ANTONIO CARNOVALE |
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PASQUALE ANTONIO ROCCA APPELLANTS - Petitioners |
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v. |
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AUTORITÉS DES MARCHÉS FINANCIERS |
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RESPONDENT - Impleaded party |
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and |
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FREDERICK LANGFORD SHARP |
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IMPLEADED PARTY - Petitioner |
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and |
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SOLO INTERNATIONAL INC. |
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MICHEL PLANTE |
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IMPLEADED PARTIES- Impleaded parties |
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and |
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FINANCIAL MARKETS ADMINISTRATIVE TRIBUNAL |
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IMPLEADED PARTY - Respondent |
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[1] On appeal from a judgment of the Superior Court, District of Montreal, rendered on January 9, 2019, by the Honourable Justice David R. Collier, which dismissed an application for judicial review of a decision of the Financial Markets Administrative Tribunal.
[2] For the reasons of Justice Marcotte, J.A., with which Justice Moore, J.A., agrees, and for the concurring reasons of Justice Mainville, J.A., THE COURT:
[3] DISMISSES the appeals, with legal costs.
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REASONS OF MARCOTTE, J.A. |
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[4] The judgment under appeal[1] dismissed an application for judicial review of a decision of the Financial Markets Administrative Tribunal (the “FMAT”)[2] that denied the Appellant’s motion for a declinatory exception and confirmed the FMAT’s jurisdiction to hear an action brought against them by the Autorité des marchés financiers (the “AMF”) under the Quebec Securities Act.[3]
[5] In its introductory motion, the AMF alleged that the Appellants, Van Damme, Carnovale, Rocca and Sharp, participated in a transnational “pump and dump”[4] scheme whereby they improperly influenced or manipulated the price of a stock in contravention of sections 195.2 and 199.1 of the Quebec Securities Act.
[6] According to the AMF, the Appellants, who reside in British Columbia, made financial transactions through offshore companies incorporated in several countries (e.g., the Marshall Islands, Belize and Antilles, among others) and with bank accounts in Europe (namely Switzerland and the United Kingdom). They allegedly acted in concert to (1) acquire the shares of Solo International Inc. (“Solo”); (2) give Solo a legitimate “face”; (3) promote Solo’s business (to increase its shares’ value fraudulently); (4) sell its shares for a profit; and (5) distribute this profit among themselves.
[7] Solo was incorporated in Nevada in April 2010 to do business in interior design and became a “shell” available for purchase in the early months of 2011.
[8] On October 10, 2011, Michel Plante (“Plante”), a Quebec resident, acquired 3,000,000 shares in Solo and became its majority shareholder, taking control of both the company and its subsidiary, 9252-4768 Québec Inc.
[9] While Plante had no previous experience in the mining industry, in the course of the fall of 2011, Solo purchased mining claims in Quebec through its subsidiary.
[10] Offshore entities linked to the Appellants financed this venture. Between September 2011 and March 2012, most of Solo’s original shares were transferred to offshore entities linked to the Appellants.
[11] The first “pump” operation happened during the months of January and February 2012. To promote its mining venture, Solo published six press releases, some of which were issued in Montreal. These press releases[5] touted Solo’s development and mining exploration activities in Quebec and represented that “the province of Quebec, where Solo International is based, offers some of the best infrastructure and mineral exploration incentives of any state or province in North America”. They also referred to Quebec’s “favourable policy environment to go along with the mineral potential” with “stable policies provid[ing] companies with the certainty that reduces risk for long-term projects” and insisted on the fact that “[a]ll of the Company’s properties are currently at the exploration stage in Quebec”. Several websites also advertised Solo’s shares in a stock market publicity campaign.
[12] Appellant Van Damme took an active part in writing these press releases and allegedly financed, at least in part, the publicity campaign via one of his offshore entities. Despite these promotional efforts, there were no substantial developments at Solo. The value of its shares nonetheless increased during this period: 2,784,508 shares were sold (“dumped”) for a profit of $390,249. All transactions were allegedly made by or to the benefit of offshore entities linked to Appellants Sharp, Van Damme and Rocca.
[13] The second “pump” operation occurred on a single day, November 14, 2012, at which time eight promoters marketed Solo’s shares. Van Damme and Rocca allegedly financed this promotional effort via their offshore entities.
[14] Again, despite this promotion, Solo remained inoperative. However, between November and December 2012, 43,405,400 of Solo’s shares were sold for a profit of $2,241,726. All transactions were allegedly made by or to the benefit of offshore entities linked to the Appellants. Transfers were made between the Appellants’ offshore entities to distribute the profits resulting from the first and second “pump” operations.
[15] Moreover, the AMF alleges that, at all material times, Solo was under the direction of Michel Plante, a Quebec resident, and was a reporting issuer in Quebec with a business address at 1155 René-Lévesque Blvd. W., suite 2500, in Montreal. Additionally, the promotional efforts described earlier (some of which originated from Montreal) were accessible to Quebec residents and a number of Quebec investors suffered losses (approximately 15 investors lost a total of $5,000).
[16] On February 28, 2017, the AMF brought an action before the FMAT seeking conclusions to:
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Order the Appellants to cease any activity in
respect of a transaction in securities pursuant to section
·
Prohibit the Appellants, for five years, from
acting as directors or officers of an issuer, dealer, adviser or investment
fund manager pursuant to section
and, pursuant to sections 195.2, 199.1(1) and 273.1 of the Securities Act to:
· Impose an administrative penalty of $2,000,000 on Sharp;
· Impose an administrative penalty of $500,000 on Van Damme;
· Impose an administrative penalty of $300,000 on Carnovale; and
· Impose an administrative penalty of $630,000 on Rocca.
[17] On June 7, 2017, Rocca, Van Damme and Carnovale filed a motion for a declinatory exception.
[18] On June 26, 2017, Sharp also filed a separate motion for a declinatory exception.
[19] On November 22, 2017, the FMAT dismissed both motions.
[20] On December 21, 2017, the Appellants sought the judicial review of the FMAT decision before the Superior Court.
[21] On January 9, 2019, the Superior Court dismissed the Appellants’ applications for judicial review[6]. On February 11 and 19, 2019, the Appellants filed their respective motions for leave to appeal the Superior Court decision. These motions were granted by a judge of this Court on March 15, 2019.[7]
[22] In its decision, the FMAT acknowledged the transnational character of the alleged infractions, but nevertheless confirmed that it had jurisdiction over the matter, after finding a real and substantial connection between these infractions and the province of Quebec.
[23] In coming to this conclusion, the FMAT relied on three cases: (1) the Supreme Court decision in Libman v. The Queen,[8] which applied the real and substantial connection test in a transnational transactional fraud context; (2) the Supreme Court decision in Global Securities Corp. v. British-Columbia Securities Commission,[9] which confirmed that the province’s authority over securities regulation is not limited to “purely intraprovincial matters”; and (3) the British Columbia Court of Appeal decision in McCabe v. British Columbia Securities Commission,[10] which defined the real and substantial connection test as being one where “[t]he question is whether there is a real and substantial connection, not whether a particular connection is the most real and substantial” and further highlighted that “[t]he analysis of whether a real and substantial connection exists must reflect the realities of modern securities regulation”.
[24] In its decision, the FMAT described the Appellants’ central role in the pump and dump scheme via their offshore entities and underlined the five key allegations of the AMF proceedings which served to establish a real and substantial connection with the province of Quebec: (1) Solo was a reporting issuer in Quebec; (2) Solo had a business address in Montreal; (3) Solo was under the direction of a Quebec resident at all material times; (4) the promotion of Solo’s activities was available to Quebec residents; and (5) some Quebec residents ultimately were defrauded by the Appellants’ scheme.
[25] The FMAT also emphasized that the existence of global and interconnected markets increases the opportunity for market manipulation while making detection and enforcement more difficult. It held that the discretionary powers provided under sections 93 and 94 of the Act respecting the regulation of the financial sector[11] must be used in the public interest to maintain the integrity of Quebec’s securities market and to protect local investors, and that this public interest weighed in favour of the recognition of its jurisdiction over the matter.
[26]
Finally, the FMAT dismissed the Appellants’ forum
non conveniens argument, as codified under article
[27] The Superior Court dismissed the Appellants’ application for judicial review.
[28] Following a short overview of the FMAT decision and its factual context, the judge addressed the determination of the applicable standard of review. Having found no conclusive answer in the case law and although he found an “arguable basis” for the application of the reasonableness standard, he followed the approach of the British Columbia Court of Appeal in Torudag v. British Columbia (Securities Commission)[12] and held that it was “unnecessary to decide the [applicable standard of review] since the Tribunal’s conclusions were both reasonable and correct”.
[29] Relying on the Supreme Court decision in Global Securities,[13] the judge also confirmed that the scope of the FMAT’s jurisdiction should not be limited to intraprovincial matters.
[30] Moreover, he referred to the “contours” of the real and substantial connection test as laid out by the Supreme Court in Club Resorts Ltd. v. Van Breda,[14] insisting on the purpose of this test, which is to limit the reach of provincial conflict rules or the assumption of jurisdiction by provincial courts.
[31] Upon reviewing the key allegations of the proceedings, the Superior Court judge found that they contained sufficient objective connecting factors to this province. Citing the Supreme Court in Unifund[15] (as referred to in the McCabe decision cited by the FMAT), he underlined that “what constitutes a ‘sufficient’ connection depends on the relationship among the enacting jurisdiction, the subject matter of the legislation and the individual or entity sought to be regulated by it”.
[32] Referring to Torudag v. British Columbia (Securities Commission),[16] he added:
[40] In a world of global financial transactions the relationship between the forum, the individual and the relevant legislation may be of greater significance in determining a real and substantial connection, than the physical location of the actors or their trading activities.[17]
[33] He then reviewed the factual elements of the case establishing a real and substantial connection, prior to concluding that the FMAT “was correct to consider that the connecting factors, including public interest, were sufficient to establish jurisdiction”.[18]
[34] While he acknowledged the six (6) factors listed by the FMAT in its decision,[19] the Superior Court judge underlined that the conspiracy alleged by the AMF weighed heavily in the FMAT’s decision to assert jurisdiction and held that the FMAT’s inference that the Appellants acted in concert to manipulate the market price of Solo shares was reasonable “given the highly coordinated timing of their share purchases, and the large volume of coordinated share sales at a time when at least three of the petitioners (and Plante) were involved in touting a shell company with no real business or income”.[20] The judge also insisted on the fact that the indirect participation of a single person could result in liability for each of the petitioners for the alleged infraction under section 199.1 of the Securities Act.[21]
[35]
As part of an obiter, he noted that, although
the FMAT had not referred to the provisions of Book Ten of the C.C.Q.
entitled “Private international law”, the Appellants’ actions through misleading
press releases could amount to a fault committed in the province and that the
allegations of injury suffered by Quebec investors and of possible harm to the
Quebec securities market through the undermining of investor confidence could
be factors attributing jurisdiction to Quebec courts in actions of a personal
patrimonial nature under article 3148 para.
[36] The issues raised in the appeal can be broken down into two main questions:
1. Did the Superior Court judge fail to properly identify the standard of review and to apply it to the FMAT decision?
ANALYSIS
1. Did the Superior Court judge fail to properly identify the standard of review and to apply it to the FMAT decision?
[37] Faced with opposing views from the parties as to the applicable standard of review, and with no determinative authorities having been submitted on the issue, the Superior Court judge examined various factors in an effort to identify the applicable standard.
[38] He found no clear indication of the legislature’s intent to protect the FMAT decision by the application of a reasonableness standard. He noted that FMAT decisions are only partially protected by a privative clause, given that its decisions may be appealed to the Court of Québec,[22] save for questions of jurisdiction, which are subject to judicial review.[23]
[39] He did, however, point to various other factors that could weigh in favour of applying a deferential standard of review. For one, the FMAT is invested with broad statutory discretion to be exercised in the public interest. Also, its members have an expertise in financial regulatory matters that is well recognized by the courts, including expertise in determining what could constitute an infraction under the Securities Act, a statute closely associated with the functions of the FMAT.
[40] The Superior Court judge also emphasized that the real and substantial connection test is not entirely an issue of jurisdiction that would command a standard of review of correctness because it relies on the particular facts of the case and involves questions of mixed fact and law that would command deference. He also underlined that decisions that are based on discretion and policy considerations would also be subject to deference.
[41] In the end, however, although he recognized an “arguable basis” for the application of a reasonableness standard when reviewing conclusions reached under the real and substantial connection test, he concluded, as the British Columbia Court of Appeal had done in Torudag,[24] that it was unnecessary to decide the issue, since the FMAT’s conclusions were both reasonable and correct.
[42] Given that the Superior Court judgment was rendered prior to the Supreme Court decision in Vavilov,[25] which introduced a new framework for determining the applicable standard of review, the analysis must now be carried out in appeal from this new perspective: reasonableness is now presumed unless otherwise indicated by legislative intent (such as a statutory appeal) or unless the rule of law requires that the correctness standard be applied “for certain categories of questions, namely constitutional questions, general questions of law of central importance to the legal system as a whole and questions related to the jurisdictional boundaries between two or more administrative bodies”.[26]
[43] In light of this new framework, the Appellants argue that the applicable standard is correctness given that the application of private international law rules “inevitably raises constitutional issues”, as the Supreme Court stated in Van Breda.[27] They also submit that the FMAT’s choice of these rules between the common law and the C.C.Q. constitutes a “general [question] of law of central importance to the legal system as a whole”, as it concerns all administrative tribunals in a similar situation. In their view, it requires a “uniform and consistent”[28] answer for a coherent application of jurisdictional rules in cases involving administrative sanctions as they apply to out-of-province defendants, with “implications [that go] beyond the decision at hand”.[29] According to the Appellants, reviewing this question under reasonableness would lead to uncertainty, regardless of the fact that determination of a sufficient connection is factually driven and could otherwise be reviewed under reasonableness.
[44] The Respondent, AMF, answers that the Appellants have not challenged the constitutional validity of the Securities Act and that they erroneously seek the application of private international law rules of the C.C.Q. Moreover, it claims that the lack of a substantial and real connection with Quebec courts is an issue that depends on the facts of the case and requires the application of the reasonableness standard.
[45] Both parties bring forward arguments that deserve comments. For one, the Appellants are right in seeking the application of the correctness standard, as the issue is indeed a constitutional one, but not so much by reason of the fact that it is a jurisdictional issue. Rather, the issue relates to the constitutional applicability of a provincial law to foreigners or to matters with extraterritorial aspects. Here, the FMAT had to apply the real and substantial connection test within its constitutional law dimension and determine “whether or not the sections of the ARRFS and the Securities Act are constitutionally applicable to the Appellants in this case’s particular circumstances”.
[46] Since it involves a constitutional issue which calls for the application of the correctness standard, as the Supreme Court recognized in Vavilov,[30] the FMAT’s determination is subject to the correctness standard, despite the fact that the determination may give rise to questions of mixed fact and of law. As the Supreme Court outlined in Westcoast Energy v. Canada, the focus must be on the question to be answered :[31]
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39 Although at first glance it may appear that the finding on which this controversy centres is one of fact, modest examination reveals that it is one of mixed law and fact. The key to this determination is to consider the purpose for which the finding was made, that is, what question it was intended to answer. (…) 40 As stated above, even questions of mixed law and fact are to be accorded some measure of deference, but this is not so in every case. It would be particularly inappropriate to defer to a tribunal like the Board, the expertise of which lies completely outside the realm of legal analysis, on a question of constitutional interpretation. Questions of this type must be answered correctly and are subject to overriding by the courts. It seems reasonable to accept the proposition that courts are in a better position than administrative tribunals to adjudicate constitutional questions. It is interesting to note that this particular panel’s professional training was not in law. So, although the question here was one of mixed law and fact, it follows that the Board was not entitled to deference because of the nature of the legal question to be answered.
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39 Bien que, à première vue, la conclusion sur laquelle porte la controverse puisse sembler une conclusion de fait, il ressort d’un examen sommaire de celle-ci qu’il s’agit plutôt d’une question de droit et de fait. La clé de cette constatation consiste à se demander dans quel but on a tiré cette conclusion, c’est-à-dire à quelle question on voulait répondre. […] 40 Comme je l’ai déjà dit, même les questions mixtes de droit et de fait doivent faire l’objet d’une certaine retenue, mais ce n’est pas le cas dans tous les cas. Il serait particulièrement inapproprié de s’en remettre à un tribunal comme la Commission, dont l’expertise se situe complètement en dehors du domaine de l’analyse juridique, sur une question d’interprétation constitutionnelle. Les questions de ce type doivent recevoir une réponse correcte et peuvent être soumises à l’annulation des tribunaux. Il semble raisonnable d’accepter la proposition selon laquelle les cours de justice sont mieux à même que les tribunaux administratifs de trancher des questions constitutionnelles. Il est intéressant de noter que la formation professionnelle de ce groupe n’était pas en droit. Ainsi, bien qu’il s’agissait en l’espèce d’une question mixte de droit et de fait, il s’ensuit que la Commission n’avait pas droit à la retenue en raison de la nature de la question juridique à laquelle il fallait répondre. (Emphasis added) |
[47] Here, the question to be answered is the constitutional applicability of the Securities Act to the Appellants’ alleged scheme. While expertise (or lack thereof) no longer plays a role in determining the applicable standard of review, the rule of law requires the FMAT to correctly apply the Securities Act within the Constitution’s boundaries, even where the real and substantial connection analysis involves factual determinations. Moreover, in the context of a motion for a declinatory exception where the facts at play are those alleged in the proceedings, which facts are deemed to be true, there is little concern for deference towards factual determinations.
[48] In any event, insofar as the Appellants claim that the FMAT failed to consider the private international law rules of the C.C.Q., the issue of the applicability these rules in the context of this matter also warrants the application of the correctness standard, given the central importance of the issue to the legal system.
[49] This brings us to an examination of the second issue that must be decided in order to provide an answer to the question of whether the Superior Court judge properly applied the correctness standard.
2. Did the Superior Court misconstrue the applicable rules limiting the FMAT’s extraterritorial jurisdiction, by failing to apply the private international law rules of the C.C.Q. or, in the alternative, by finding a real and substantial connection with Quebec?
[50] This issue can be divided into two sub-issues as follows:
i. Do the private international law rules of the C.C.Q. apply to the case at hand?
ii. Was the Superior Court correct in finding that the FMAT’s finding of a real and substantial connection with the province of Quebec was correct?
[51]
Prior to addressing the first sub-issue dealing
with the applicability of the private international law rules of the C.C.Q.,
it is appropriate to refer to the relevant provisions that establish the FMAT’s
jurisdiction in relation to the allegations of the AMF proceedings and to
determine whether section 93 of the ARRFS and sections
Relevant legislative provisions and their constitutional applicability to the case
[52] Section 93 of the ARRFS provides that the function of the FMAT is to make determinations with respect to matters brought under the Act or the Acts listed in Schedule I, as follows:
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93. The function of the Tribunal is to make determinations with respect to matters brought under this Act, the Money-Services Businesses Act (chapter E-12.000001) and the Acts listed in Schedule I. Except where otherwise provided by law, the Tribunal shall exercise its jurisdiction to the exclusion of any other tribunal or adjudicative body. The Tribunal shall exercise its discretion in the public interest. (…) |
93. Le Tribunal a pour fonction de statuer sur les questions portées en vertu de la présente loi, de la Loi sur les entreprises de services monétaires (chapitre E-12.000001) et des lois énumérées à l’annexe I. Sauf disposition contraire de la loi, le Tribunal exerce sa compétence à l’exclusion de tout autre tribunal ou organisme juridictionnel. Le Tribunal exerce son pouvoir discrétionnaire dans l’intérêt public. […] (Emphasis added) |
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[53] The Securities Act is listed in Schedule I and forms part of the legislation over which the FMAT has the authority to make determinations “to the exclusion of any other tribunal or adjudicative body”.
[54]
Sections
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265. The Financial Markets Administrative Tribunal may order a person to cease any activity in respect of a transaction in securities. (…) 273.1. Where the Financial Markets Administrative Tribunal becomes aware of facts establishing that a person has, by an act or omission, contravened, or aided in the contravention of, a provision under this Act or a regulation made under its authority, the Tribunal may impose an administrative penalty on the offender and have it collected by the Authority. (…) 273.3. The Financial Markets Administrative Tribunal may
prohibit a person from acting as a director or officer of an issuer, dealer,
adviser or investment fund manager on the grounds set out in article
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265. Le Tribunal administratif des marchés financiers peut ordonner à une personne de cesser toute activité relative à une opération sur valeurs mobilières. […] 273.1. Lorsque le Tribunal administratif des marchés financiers prend connaissance de faits établissant qu’une personne a, par un acte ou une omission, contrevenu ou aidé à contrevenir à une disposition de la présente loi ou d’un règlement pris en vertu de son autorité, il peut imposer une sanction administrative au contrevenant et la faire recueillir par l’Autorité. […] 273.3. Le Tribunal administratif des
marchés financiers peut interdire à une personne d’agir à titre
d’administrateur ou de dirigeant d’un émetteur, d’un courtier, d’un
conseiller ou d’un gestionnaire de fonds d’investissement pour les motifs
prévus à l’article (Emphasis added) |
[55] Such power is discretionary and, according to section 93 of the ARRFS, must be exercised in the public interest.[32] While the public interest appears to be the only requirement under section 265, sections 273.1 and 273.3 further require a demonstration that the Securities Act has been contravened. In this case, the Respondent alleges that the Appellants violated sections 195.2 and 199.1 of this Act:[33]
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195.2. Influencing or attempting to influence the market price or the value of securities by means of unfair, improper or fraudulent practices is an offence. (…) 199.1. A person who directly or indirectly engages or participates in any transaction or series of transactions in securities or any trading method relating to a transaction in securities, or in any act, practice or course of conduct is guilty of an offence if the person knows, or ought reasonably to know, that the transaction, series of transactions, trading method, act, practice or course of conduct (1) creates or contributes to a misleading appearance of trading activity in, or an artificial price for, a security; |
195.2. Le fait d’influencer ou de tenter d’influencer le prix du marché ou la valeur des valeurs mobilières au moyen de pratiques déloyales, irrégulières ou frauduleuses constitue une infraction. […] 199.1. Commet une infraction toute personne qui, même indirectement, se livre ou participe à une opération ou à une série d’opérations sur des titres ou à une méthode de négociation relative à une opération sur des titres, à un acte, à une pratique ou à une conduite si elle sait, ou devrait raisonnablement savoir, que l’opération, la série d’opérations, la méthode de négociation, l’acte, la pratique ou la conduite: 1° crée ou contribue à créer une apparence trompeuse d’activité de négociation d’un titre, ou un cours artificiel pour un titre; (Emphasis added) |
[56] None of these sections provide any indication regarding their territorial reach. However, they are presumed to apply within the boundaries of the province.[34]
[57] Here, contrary to the Appellants’ submission, there is no extraterritorial jurisdiction of the FMAT at issue. We are only concerned with the FMAT’s territorial jurisdiction over out-of-province defendants for alleged actions that have a connection with the province of Quebec.
[58] The FMAT and the Superior Court judge did not explicitly refer to the “constitutional applicability” of the Securities Act. However, the FMAT reproduced sections 93 and 94 of the ARRFS, which give it the authority to make the required determination in the public interest, and it referred to the real and substantial connection test as developed in the context of constitutional applicability determinations in order to assert its jurisdiction over the matter.
[59] The FMAT referred to the McCabe decision, in which a resident of British Columbia, who had carried on his business from his home, challenged the applicability of British Columbia laws with respect to his alleged misrepresentations regarding an American company whose shares traded exclusively on the Over-the-Counter Bulletin Board (“OTCBB”) in the United States. The fact that the British Columbia Securities Commission had a presence-based jurisdiction over him was not in debate. The British Columbia Court of Appeal relied on the Supreme Court decision in Unifund, which established a framework using the real and substantial connection concept, and examined the constitutional applicability of the provincial regulatory regime imposing administrative sanctions without referring to private international law rules. Goepel, J.A., wrote:[35]
[32] Modern securities markets are complex and multi-jurisdictional. The Act is regulatory in nature and the Commission is part of a network of administrative bodies that regulate securities markets throughout Canada and other jurisdictions.
[33] The Commission plays the central role in the regulation of securities markets in British Columbia and has been granted a wide mandate to do so under the Act. The primary goal of the Act is to serve the public interest in British Columbia by protecting investors, fostering capital market efficiency, and promoting public confidence in the system. The Commission is a highly specialized regulatory tribunal that provides expertise in interpreting and applying the Act, and has broad discretion to determine what is in the public interest with respect to the securities industry.
[34] In Unifund, the Supreme Court of Canada held that consideration of a provincial statute’s constitutional applicability can be conveniently organized around the following propositions (at para. 56):
1. The territorial limits on the scope of provincial legislative authority prevent the application of the law of a province to matters not sufficiently connected to it;
2. What constitutes a “sufficient” connection depends on the relationship among the enacting jurisdiction, the subject matter of the legislation and the individual or entity sought to be regulated by it;
3. The applicability of an otherwise competent provincial legislation to out-of-province defendants is conditioned by the requirements of order and fairness that underlie our federal arrangements;
4. The principles of order and fairness, being purposive, are applied flexibly according to the subject matter of the legislation.
[35] The question is whether there is a real and substantial connection, not whether a particular connection is the most real and substantial. This question is to be answered with reference to the regulatory regime at issue, the particular provision being applied, the impugned conduct, and the individual or entity who is subject to the regulatory body.
[36] In the context of securities regulation,
the Commission’s jurisdiction depends on whether the impugned conduct has a
sufficient connection to British Columbia, or, as recently expressed by this
Court, there is “a state of facts demonstrating circumstances in which it would
be appropriate for a tribunal to take jurisdiction over a legal issue or
controversy”: Torudag v. British Columbia (Securities Commission),
[37] The analysis of whether a real and substantial connection exists must reflect the realities of modern securities regulation. For instance, conduct involving securities will often be transnational in nature, crossing provincial and state borders.
[60] The Superior Court judge, in turn, relied on the real and substantial connection factors elaborated in Van Breda prior to concluding that there were sufficient connecting factors to establish jurisdiction according to the Unifund case,[36] which defined the “sufficient” connection test for asserting jurisdiction as one that “depends on the relationship among the enacting jurisdiction, the subject matter of the legislation and the individual or entity sought to be regulated by it”.
[61] He also cited the Torudag case,[37] which concerned the constitutional applicability of British Columbia securities legislation to trading activities carried outside the province, in support of the proposition that the factors listed in Unifund “may be of greater significance in determining a real and substantial connection, than the physical location of the actors or their trading activities” in the context of global financial transactions. In that case, the British Columbia Court of Appeal had also dismissed the argument of jurisdictional overreach, based on the fact that the securities traded were those of a British Columbia reporting issuer and that a large proportion of the shares had been sold by British Columbia residents. It held, as a result, that there was a real and substantial connection to the jurisdiction, which permitted the British Columbia Securities Commission to properly take jurisdiction over the matter.
[62]
The Superior Court judge noted that the FMAT had
not referred to the private international law rules of the C.C.Q., but
he stopped short of determining whether these provisions would apply to the
determination of the FMAT’s jurisdiction. However, he wrote as an obiter
that the criteria of article 3148 para.
[63] This last comment may have led to the arguments submitted in appeal regarding the applicability of the private international law rules of the C.C.Q., which had not been raised earlier in the Appellants’ proceedings. In my view, however, and as will be addressed in the following section, the issue is one of constitutional applicability of Quebec securities legislation rather than one of private international law calling for the application of these provisions.
i. Do the private international law rules of the C.C.Q. apply to the jurisdictional question?
[64] Both the FMAT and the Superior Court ultimately recognized that the FMAT had authority over the subject matter of the alleged violations of the Securities Act and the issuance of administrative sanctions.
[65] The Appellants argue that the FMAT (and the Superior Court) failed to apply the private international law rules of the C.C.Q. This argument appears to have been officially raised for the first time in appeal and, as previously stated, is not found in the lower court proceedings (be it in the motions for a declinatory exception or the applications for judicial review), although it may have been pleaded at the time of the hearing before the FMAT.[38]
[66] The Appellants now argue that, in the absence of explicit provisions in the Securities Act defining the FMAT’s jurisdiction over extraterritorial offences, the private international law rules of the C.C.Q. provide an exhaustive set of rules for all matters regarding the assumption of jurisdiction by Quebec authorities over out-of-province defendants, including public law matters and administrative tribunals in the province. Relying on the Supreme Court decisions in Van Breda and Uashaunnuat, they submit that these rules apply where the issue of jurisdiction over out-of-province defendants in Quebec is at play, including where administrative sanctions are being sought under a securities regulatory regime. They claim that, by virtue of those rules, the FMAT has no jurisdiction.
[67] Relying, among other sources, on this Court’s recent judgment in Donaldson,[39] the Respondent answers that the private international law rules of the C.C.Q. do not apply in matters of administrative law such as the matter at hand, which involves administrative sanction proceedings by the AMF before the FMAT.
[68] In Van Breda, in the context of a tort action, the Supreme Court defined conflicts rules within the constitutional structure and, in doing so, referred to the Quebec private international law rules of the C.C.Q.:[40]
[21] Conflicts rules must fit within Canada’s
constitutional structure. Given the nature of private international law, its
application inevitably raises constitutional issues. This branch of
the law is concerned with the jurisdiction of courts of the Canadian provinces,
with whether that jurisdiction should be exercised, with what law should apply
to a dispute, and with whether a court should recognize and enforce a judgment
rendered by a court of another province or country. The rules of private
international law can be found, in the common law provinces, in the common law
and in statute law and, in Quebec, in the Civil Code of Québec, S.Q.
1991, c. 64, which contains a well-developed set of rules and
principles in this area (see Civil Code of Québec,
Book Ten, arts. 3076 to 3168). The interplay between provincial jurisdiction
and external legal situations takes place within a constitutional framework
which limits the external reach of provincial laws and of a province’s courts.
The Constitution assigns powers to the provinces. But these powers are subject
to the restriction that they be exercised within the province in question (see
P. W. Hogg, Constitutional Law of Canada (5th ed. 2007), vol. 1, at pp.
364-65 and 376-77; H. Brun, G. Tremblay and E. Brouillet, Droit
constitutionnel (5th ed. 2008), at p. 569; British Columbia v. Imperial
Tobacco Canada Ltd.,
[69] Also, in Uashaunnuat, the minority judges stated that the C.C.Q. rules also apply to “certain aspects of public law”:
[T]he C.C.Q. is not limited to “private law” rules; rather, it is the “jus commune” of Quebec, as is expressly stated in its preliminary provision. Therefore, in the matters to which it relates - including the jurisdiction of Quebec authorities, which is the subject of Title Three of Book Ten - the C.C.Q. encompasses certain aspects of public law (…).[41]
(Emphasis added)
[70] It must be emphasized that in Uashaunnuat, the rights claimed were personal rights and a sui generis right (an aboriginal title right under section 35 of the Constitution)[42] and, as such, would qualify as private rights. However, it is undeniable that the C.C.Q. acts as suppletive law for a large number of matters, including certain aspects of public law. In fact, the preliminary provision of the C.C.Q. specifically refers to the jus commune, which does not only encompass private law.[43] Moreover, it is obvious that the C.C.Q. rules, including Book Ten entitled “Private international law”, apply to administrative tribunals. The comments of the Minister of Justice are clear in that they specify that the private international law rules apply equally to all Quebec authorities, including judicial and administrative tribunals.[44] However, in my view, these comments should not be interpreted as meaning that these rules will be held to apply systematically to all matters dealing with property and civil rights contemplated by Section 92 (13) of the Constitutional Act of 1867, regardless of whether there are any private rights at issue.
[71] In my view, the scope of Book Ten cannot be broadened to the point of determining jurisdiction in matters of public or criminal law that do not call for private international law rules, where the primary basis of jurisdiction is not personal or real but is territorial,[45] such as in the present case.
[72] As Laforest, J. stated in Libman v. The Queen:[46]
The primary basis of criminal jurisdiction is territorial. The reasons for this are obvious. States ordinarily have little interest in prohibiting activities that occur abroad and they are, as well, hesitant to incur the displeasure of other states by indiscriminate attempts to control activities that take place wholly within the boundaries of those other countries; see R. v. Martin, [1956] 2 All E.R. 86, at p. 92. It is, however, permissible under international law to exercise jurisdiction on other bases. For example, states have long exercised jurisdiction over ships that fly their flags and over their nationals abroad. As well, along with other types of protective measures, states increasingly exercise jurisdiction over criminal behaviour in other states that has harmful consequences within their own territory or jurisdiction; see The Lotus (1927), P.C.I.J., Ser. A., No. 10. It follows from this that the same criminal act may occasionally be subject to prosecution in more than one country, a matter to which I shall refer from time to time.
(Emphasis added)
[73] While I recognize that the case at hand is not a criminal matter and that it deals with administrative sanctions, I take the view that this matter is not one of private international law, and that the primary basis of the FMAT’s jurisdiction is territorial in a public law context. I also wish to emphasize that, under the common law, the distinction between private and public international law rules is seldom addressed, as it bears little consequence because the applicable test is the same under both regimes, namely, the real and substantial connection test.
[74] Furthermore, the Van Breda and Uashaunnuat cases dealt with matters of “relations between persons”, which fall under private international law, and the Supreme Court’s statements were made in relation to the application of private international law rules.
[75] Finally, it is also worth noting that the minority judges in Uashaunnuat laid out a definition of the private international law rules that limits their application to situations where there is a conflict of jurisdictions or of legal systems:
[101] Private international law “is designed to resolve conflicts between different jurisdictions, the legal systems or rules of different jurisdictions and decisions of courts of different jurisdictions”; this area of the law “consists of legal principles that apply in situations in which more than one court might claim jurisdiction, to which the law of more than one jurisdiction might apply or in which a court must determine whether it will recognize and enforce a foreign judgment or, in Canada, a judgment from another province”: Van Breda, at para. 15; S. G. A. Pitel and N. S. Rafferty, Conflict of Laws (2nd ed. 2016), at p. 1. In other words, private international law is the branch of the law that “is concerned with the jurisdiction of courts of the Canadian provinces, with whether that jurisdiction should be exercised, with what law should apply to a dispute, and with whether a court should recognize and enforce a judgment rendered by a court of another province or country”: Van Breda, at para. 21.
(Emphasis added)
[76] Professor Alain Prujner highlights the distinction between private and public international law, by emphasizing the territorial nature of public international law:[47]
Pourquoi existe-t-il un droit international privé ? À quel besoin répond-il ? Pour le comprendre, il faut mettre l’accent sur la nature privée des droits en question. Ceux-ci sont liés à des systèmes ou des ordres juridiques, le plus souvent étatiques. Les relations de droit public sont étroitement liées aux États et au principe de territorialité, contrairement aux relations privées, interindividuelles, lesquelles échappent en partie à cette limitation.
Un exemple permet d’illustrer cette différence : une personne passe la frontière entre le Québec et le Maine. Au Québec, elle est mariée, a deux enfants et est aussi propriétaire de la voiture qu’elle conduit. Son métier est d’être policier à la Sûreté du Québec, avec tous les pouvoirs liés à ce statut. Le passage de la frontière va agir différemment sur les divers éléments juridiques liés à cette personne. Ceux qui sont reliés à l’autorité publique (pouvoirs de police en particulier) seront profondément modifiés par le changement de souveraineté étatique; néanmoins, ceux qui sont relatifs au statut matrimonial et familial, ou aux liens de propriété sur divers biens, résisteront mieux. Elle est encore mariée et propriétaire, même si cela est lié à un autre système juridique que celui de l’État où elle se trouve. Cette personne sera aussi désormais soumise à l’autorité des tribunaux des États-Unis, en cas d’infraction au code de la route par exemple, mais elle ne pourra pas nécessairement leur soumettre tout litige, comme une demande en divorce.
Ces différences proviennent de la nature des droits en cause. Il n’est pas question de maintenir l’exercice d’une autorité publique hors du territoire de cette autorité sans un accord préalable avec les autorités de l’autre territoire. La protection de la souveraineté d’un État sur son territoire empêche toute intervention policière d’origine étrangère. Par conséquent, franchir une frontière est souvent l’objectif d’un fuyard, ce qui a été abondamment illustré au cinéma. La souveraineté des États exige qu’aucune règle de droit public d’un autre État ne puisse avoir d’effet sur son territoire sans son consentement préalable. Le droit public est donc très territorialisé. Il relève d’une organisation étatique qui est limitée à un territoire. Les relations entre ces ordres étatiques relèvent du droit international public, qui découle de la volonté des États et de la coutume internationale.
(Emphasis added)
[77] In the case at hand, it may be more accurate to refer to international public law rather than public international law, as we are concerned with the relationship between a state and private individuals and not with relations between states.[48]
[78] In my view, in this case, there is no conflict of jurisdiction nor any conflict of laws that would call for the application of private international law rules. The FMAT seeks to apply a single provincial statute, the Securities Act, over which it has the exclusive jurisdiction to make determinations pursuant to section 93 of the ARRFS.
[79] That is not to say that other provinces or states may not also seek to prohibit or sanction the Appellants’ conduct on their own territory under their own securities legislation. The situation may lead to the application of more than one set of laws and may trigger the need to examine the principle of international comity or courtesy. However, it does not bring about any conflict of laws or jurisdiction regarding the alleged violations of the Securities Act which are connected to this province.
[80] In my opinion, the FMAT remains the only competent authority empowered to apply administrative sanctions within the limits of the province and it is tasked with doing so for the purpose of protecting Quebec investors and ensuring the efficiency of Quebec’s securities market and public confidence therein.[49]
[81] Hence, I cannot agree with the Appellants’ contention that the case is an attempt to apply provincial legislation outside the limits of the province and that it constitutes an extraterritorial reach of provincial courts.
[82] The matter is strictly one concerned with the constitutional applicability of a provincial law, being the Securities Act, to acts committed by persons who reside outside the limits of the province but whose actions were allegedly performed both inside and outside the province, given the transnational nature of their alleged wrongdoings.
[83] Professeur Pierre-André Côté acknowledges that certain difficulties may arise in ascertaining the territorial limits of a state’s legislation and underlines that such difficulties are resolved by determining whether or not the law has a real and substantial connection with the state in question. He points out that, in doing so, courts may be guided (although not exclusively so) by the connecting factors that apply in private international law:[50]
782. Il est difficile d’établir avec certitude le champ d’application spatiale d’un texte législatif en raison des problèmes que suscite la localisation des personnes, des biens, des actes ou des faits que la loi prétend régir. D’une part, le lieu physique où se trouve une personne ou un bien, où se conclut un acte, où se produit un fait ne coïncide pas nécessairement avec le situs, le lieu, que lui assigne le droit. D’autre part, des considérations liées aux exigences de la courtoisie entre États influent sur la qualification de l’effet territorial d’un texte.
783. Un État peut juger inopportun ou contraire à la courtoisie entre États (un principe de droit international public) de régir des personnes ou des biens qui, matériellement situés à l’intérieur de ses frontières, n’entretiennent cependant avec lui que des liens superficiels ou accidentels.
[...]
785. […] une loi n’a pas d’effet extraterritorial simplement parce qu’elle prétend régir une personne, un bien, un acte ou un fait physiquement situés à l’étranger. C’est le situs aux yeux du droit qui doit être pris en considération.
786. En résumé, et en simplifiant, on peut dire que la loi d’un État a un effet extraterritorial lorsqu’elle entend régir des personnes, des biens, des actes ou des faits juridiques qui n’ont pas un « lien réel et important » avec cet État.
787. Quand peut-on dire qu’un tel lien existe ? Pour répondre à cette question, les tribunaux feront appel, pour les guider, principalement (mais non exclusivement) aux méthodes de rattachement développées en droit international privé. La localisation d’une personne, d’un bien, d’un acte ou d’un fait juridiques exigera la qualification du problème juridique et l’application des diverses règles de rattachement qui indiquent le système juridique qui doit régir la situation.
(Emphasis added)
[84] While private international law rules (and the corresponding connecting factors) may serve to guide the courts in resolving issues of jurisdiction, they will not apply automatically nor serve as an obstacle to them asserting jurisdiction over persons who reside outside the province in matters of public law where there is no private international law issue at play and where there is a real and substantial connection between the matter and the province.
[85] There is in fact nothing precluding a provincial law from applying to persons who do not reside on its territory for actions that occur on its territory. The provincial taxation powers are a good example of the principle that foreigners are not exempted from provincial laws, as the Supreme Court outlined in Dunne v. Quebec (Deputy Minister of Revenue):[51]
Section
(Emphasis added)
[86] In the case at hand, as the Respondent argues, the constitutional validity of the ARRFS and Securities Act is not challenged. Both acts serve to regulate the Quebec securities market for the protection of investors, for capital market efficiency and for ensuring public confidence in the system[52] and they fall within the exclusive provincial jurisdiction over property and civil rights pursuant to section 92(13) of the Constitution Act, 1867.[53]
[87] The only question is whether the FMAT has jurisdiction over the action instituted by the AMF against the Appellants, despite the foreign elements raised on their behalf to support the dismissal of the action at this stage.
[88] There is nothing restraining the Quebec securities market regulator from seeking to impose administrative sanctions on persons despite the fact that they do not reside in the province, provided these sanctions relate to actions bearing a sufficient connection with this province.
[89]
It should also be pointed out that section 236.1
of the Securities Act[54] specifically provides, in dealing with civil sanctions, that “in
matters pertaining to the distribution of a security, the laws of Québec are
applicable where the subscriber or purchaser resides in Québec, regardless of
the place of the contract” and that any action may be brought before the court
of the plaintiff’s residence. Also, “[a]ny contrary stipulation as to the
jurisdiction of the courts or the applicable legislation is without effect”.
This provision confers upon the Securities Act the status of a law of
immediate application (“loi d’application immédiate”, also known
as “loi police”) by virtue of article
[90] In the international public law context of the matter, where the issue is one of constitutional applicability, there is no need to rely on the private international law rules of the C.C.Q. This may explain why the Securities Act does not specifically provide the same protection to administrative sanctions regarding the FMAT’s jurisdiction that it affords to civil sanctions. The FMAT’s authority should be determined by relying on the real and substantial connection as developed in Unifund, where Binnie, J. pointed out that this “real and substantial connection test” must be applied in the particular context of the applicability of a provincial regulatory scheme to an out-of-province defendant, bearing in mind that this connection must be “sufficient” to support the application of this regulatory regime.
[91] My colleague Mainville proposes to confirm the FMAT’s jurisdiction through the application of private international law rules, by resorting to article 3136 C.C.Q.[56] and the two-step analysis which requires the demonstration of a sufficient connection of the matter with the province of Quebec and the impossibility or the unreasonableness of requiring the institution of proceedings abroad. It is obvious that the AMF has no authority to institute proceedings abroad, which brings us back to the only relevant criterion for assessing the FMAT’s jurisdiction in the case at hand, namely the “sufficient connection” test which, incidentally, is the same test developed under the constitutional applicability doctrine in Unifund,[57] and applied in Libman.[58]
[92] For these reasons, I am of the opinion that the FMAT correctly relied on the real and substantial connection test rather than on the C.C.Q. rules of private international law to assert jurisdiction over the matter. Hence, the Superior Court judge was correct in concluding that its decision regarding the applicable test was both correct and reasonable.
ii. Was the Superior Court correct in finding that the FMAT’s finding of a real and substantial connection with the province of Quebec was correct?
[93] The Appellants argue alternatively that the FMAT misapplied the real and substantial connection test by relying on “open-ended” factors, such as public interest, and that the FMAT’s rationale allows for an improper broadening of securities regulators’ territorial reach: from their perspective, the FMAT is looking to apply the Securities Act to transactions that occurred outside the province, in the USA where the shares were traded in the over-the-counter market, through the OTCBB, despite the fact that none of the profits were collected or channelled through this province. Moreover, the Appellants claim that the allegations are not sufficiently substantiated to provide a connection with each Appellant individually. Finally, they also invoke the principle of comity to convince this Court that “international courtesy” commands that such territorial overreach on the part of the FMAT towards foreigners for actions committed outside Quebec’s territory be set aside.
[94] Both the FMAT and the Superior Court correctly referred to the framework laid out by the Supreme Court in Unifund to ascertain the existence of a real and substantial connecting factor with the province. The FMAT did so indirectly by citing the McCabe decision which relied on Unifund, as appears from the extracts of its decisions reproduced at paragraph [58] of this judgment. As noted by the Superior Court and emphasized earlier, the sufficient connection test developed in Unifund “depends on the relationship among the enacting jurisdiction, the subject matter of the legislation and the individual or entity sought to be regulated by it”.
[95] The FMAT recognized that there was a real and substantial connection with the province based on the key allegations of the proceedings, while taking into account the modern reality of the global and interconnected securities market and the increased opportunities for market manipulation in such a context, as well as the public interest.
[96] The key allegations retained by the FMAT to assert its jurisdiction over the matter were not related to the sale and purchase of the Solo shares through the OTCBB or to the channelling of profits abroad. They had to do with the market manipulation actions, being the “pump and dump” scheme, a large portion of which occurred in Quebec through misleading press releases that enabled the stock manipulation of a Quebec-based corporation holding mining claims in the province.
[97]
As previously mentioned, the FMAT has
jurisdiction to make determinations on alleged infractions and to impose
sanctions within the boundaries of Quebec. Solo’s
presence in Quebec pointed to a strong relationship between the FMAT’s
territorial jurisdiction and the subject matter of the litigation, being the
Appellants’ alleged violations of sections
[98]
The AMF alleged that the Appellants were part of
that pump and dump scheme in contravention of sections
[99] The “pump” aspect of the violation was highly dependent upon the business carried on in Quebec by Solo. This business was essential for creating an appearance of profitability and for luring investors into buying its shares.
[100] The connection to this province was apparent in the multiple references to Quebec in the press releases (two of which bear the mention “Montreal” at the beginning[61]), which claim that “the company is taking this opportunity to highlight the significance of focusing its mining efforts on Quebec”.[62] Solo’s business in the field of mining exploration in Quebec, through the acquisition of mining claims by its subsidiary, played a central role in the pump part of the scheme. Solo stated that it carried on a business in the province, that it was a reporting issuer in Quebec, that it had a business address in Montreal and that it was under the direction of a Quebec resident.
[101] As far as the connection between the infractions and the Appellants is concerned, the Respondent alleged that all the Appellants contributed to the financing of Solo’s acquisition of mining claims. As a result, they were no strangers to the business carried on in the province and they allegedly participated at one point or another in the pump and dump scheme, although they were not all operating from within the province since modern financial schemes can operate from multiple locations at a given time through the internet and offshore entities.
[102] The Appellants argue that the allegations of the proceedings do not sufficiently single out their actions to justify asserting jurisdiction over each of the Appellants individually. They argue that a real and substantial connection would require that their situs, or at least one of the alleged infractions’ components, be within the province of Quebec.
[103] Appellants Van Damme, Carnovale and Rocca argue more specifically that all the components of the scheme happened outside Quebec and that the connection between the scheme and Quebec is too weak to comply with constitutional limitations.
[104] Appellant Sharp focuses on the fact that he did not participate in the promotion of Solo’s activities, which was the only tangible part of the scheme in Quebec. Given that all the acquisitions and transfers of Solo’s shares occurred outside Quebec, in foreign countries and via offshore entities allegedly linked to him, and given his domicile in British Colombia, Sharp argues that there is no real and substantial connection between him and the FMAT or Quebec.
[105] An individual connection was not required in order to establish a real and substantial connection with each of the Appellants. It was sufficient to show a connection between the subject matter of the litigation (the infractions) and the forum, as Laforest, J. proposed in Libman.[63]
[106] As the Superior Court judge mentioned, an infraction under 199.1 of the Securities Act could be demonstrated against the persons who participated in the infraction as part of a conspiracy.
[107] Moreover, as the FMAT correctly pointed out, whether the infractions are demonstrated with respect to all or part of the Appellants will depend on the evidence adduced at trial and need not be determined at this early stage, where the facts are taken as alleged.
[108] With respect to the principle of comity, the Appellants claim that the principle would be violated if the FMAT were allowed to assert jurisdiction in a case such as this one.
[109] I disagree. The situation is no different from that described by Laforest, J. in Libman,[64] where the Supreme Court resorted to the real and substantial link test and, in doing so, addressed the issue of comity in the particular circumstances of transnational fraudulent transactions which also involved a conspiracy:
I might summarize my approach to the limits of territoriality in this way. As I see it, all that is necessary to make an offence subject to the jurisdiction of our courts is that a significant portion of the activities constituting that offence took place in Canada. As it is put by modern academics, it is sufficient that there be a “real and substantial link” between an offence and this country, a test well-known in public and private international law; see Williams and Castel, supra; Hall, supra. As Professor Hall notes (p. 277), this does not require legislation. It was the courts after all that defined the manner in which the doctrine of territoriality applied, and the test proposed simply amounts to a revival of the earlier way of formulating the principle. It is in fact the test that best reconciles all the cases. The only ones that do not fall within it are those like Harden and Rush which, in my view, should no longer be followed.
That this approach is attuned to modern times is evident from the fact that some variant of it has been recommended by numerous law reform bodies or adopted in legislation; see, inter alia, the English Law Commission’s Report on the Territorial and Extraterritorial Extent of the Criminal Law (Law Com. 91, 1978); the American Law Institute’s Model Penal Code (Proposed Official Draft, 1962) § 1.03; the New Zealand Crimes Act, 1961, 1961 (N.Z.), No. 43, s. 7, and the recent Law Reform Commission of Canada Working Paper 37, Extraterritorial Jurisdiction, Part III.
Just what may constitute a real and substantial link in a particular case, I need not explore. There were ample links here. The outer limits of the test may, however, well be coterminous with the requirements of international comity.
As I have already noted, in some of the early cases the English courts tended to express a narrow view of the territorial application of English law so as to ensure that they did not unduly infringe on the jurisdiction of other states. However, even as early as the late 19th century, following the invention and development of modern means of communication, they began to exercise criminal jurisdiction over transnational transactions as long as a significant part of the chain of action occurred in England. Since then means of communications have proliferated at an accelerating pace and the common interests of states have grown proportionately. Under these circumstances, the notion of comity, which means no more nor less than “kindly and considerate behaviour towards others”, has also evolved. How considerate is it of the interests of the United States in this case to permit criminals based in this country to prey on its citizens? How does it conform to its interests or to ours for us to permit such activities when law enforcement agencies in both countries have developed cooperative schemes to prevent and prosecute those engaged in such activities? To ask these questions is to answer them. No issue of comity is involved here. In this regard, I make mine the words of Lord Diplock in Treacy v. Director of Public Prosecutions cited earlier. I also agree with the sentiments expressed by Lord Salmon in Director of Public Prosecutions v. Doot, supra, that we should not be indifferent to the protection of the public in other countries. In a shrinking world, we are all our brother’s keepers. In the criminal arena this is underlined by the international cooperative schemes that have been developed among national law enforcement bodies.
For these reasons, I have no difficulty in holding on the facts agreed upon for the purpose of this appeal, that the counts of fraud with which the appellant is charged may properly be prosecuted in Canada, and I see nothing in the requirements of international comity that would dictate that this country refrain from exercising its jurisdiction. Since these fraudulent activities took place in Canada, it follows for the reasons set forth in the Chapman case that the conspiracy count may also be proceeded with in Canada.
Under these circumstances, I need not
enter into a discussion of the apparent conflict between the English case of Board
of Trade v. Owen and the Canadian cases such as Bachrack, Ecrement
and Shulman regarding the situation where substantially the only overt
act that takes place in Canada is the agreement, the substantive offence taking
place abroad. There may be a danger, particularly in relation to common law
conspiracy, for this country in essence to engage in punishing acts that take
place wholly in another country that are not criminal there. This appears
to be the major consideration underlying the judgment of the House of Lords in Owen.
There is cogency in the argument but there are countervailing arguments that
have found favour in the Canadian cases. Since those cases were decided
Parliament has provided in s.
(Emphasis added)
[110] Much in the same way here, there is no issue of comity involved insofar as the U.S., where the trading took place, or the province of B.C., where the Appellants reside, are concerned. These other states or provinces could hardly voice disagreement with the sanctions or preventive or deterrent measures sought by the AMF in the circumstances, provided that the violations do indeed show a sufficient real and substantial connection with the province of Quebec.
[111] Deterrence is only useful if “individual jurisdictions take action wherever possible”, and it is desirable that “other jurisdictions take a similar approach.”[65] “As a practical issue, it may be necessary to wait until someone comes from offshore (…) before effective enforcement can be taken”.[66] There is a need for collective repressive actions, as opposed to actions coming strictly from the source (as the source is often difficult to determine), to dissuade unlawful securities practices. The geographical origin of the scheme may prove difficult to pinpoint and may result from the concerted efforts of multiple participants, thus weighing in favour of a flexible approach to the real and substantial connection test. Unlawful securities practices can only be efficiently and collectively repressed, and the mission of securities regulators fulfilled, where financial schemes aimed at benefiting from assets in a given territory are discouraged.
[112] Looking at the decision as a whole, it is clear that the FMAT relied mainly on objective facts (the key allegations) prior to concluding that there was such a real and substantial connection with the province.
[113] By carrying on a business in the province, even indirectly, the Appellants chose to use Quebec as the “face” of their alleged pump and dump scheme. In doing so, they established a real and substantial connection between the FMAT’s authority and the alleged “pump” infractions to enable the FMAT to decide whether it should take preventive and punitive measures against them following a hearing on the merits of the case.
[114] I am satisfied that the FMAT could consider that the fraudulent promotion to Quebec residents in which the Appellants participated through either promotional or financing efforts at one point or another, together with the fact that Solo had a business address in Montreal and was under the direction of a Quebec resident, Michel Plante, established at this stage a real and substantial connection with the alleged pump and dump scheme.
[115] Finally, the FMAT also concluded that it had jurisdiction over the Appellants as a matter of public interest, given its role as defined under the ARRFS and the Securities Act and the purpose of regulating the securities market in its modern reality and protecting consumers from fraudulent practices.
[116] The public interest factor also supports a flexible approach to the determination of the sufficiency of the real and substantial connection test under such circumstances. There is indeed here a real and substantial connection between this objective, the FMAT’s role, the Appellants and the province. The sanctions sought by the Respondent aim to punish the Appellants’ alleged participation in a pump and dump scheme and, more precisely, their fraudulent manipulation and misrepresentation of securities. As previously stated, the “pump” part (i.e., the manipulation and misrepresentation of securities) was inextricably linked to buying mining claims in Quebec and, therefore, fell within the province.
[117] In my view, the decision rendered by the FMAT, which considered the key allegations as well as the public interest in asserting jurisdiction, the whole within the constitutional applicability of the Securities Act, was correct and the Superior Court was also correct in concluding as it did.
[118] That being said, my conclusion would not have been any different had I opted to apply the reasonableness standard instead of the correctness standard. The FMAT decision was also reasonable. Its reasons demonstrate a transparent, intelligible, decision[67] providing coherent reasoning and justification in light of the legal and factual constraints bearing on the decision.[68]
[119] For these reasons, I suggest that this Court dismiss the appeals with legal costs.
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GENEVIÈVE MARCOTTE, J.A. |
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MOTIFS DU JUGE MAINVILLE |
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[120] Je souscris à la conclusion proposée par la juge Marcotte, soit le rejet des appels. Par contre, je ne puis souscrire à la thèse de ma collègue voulant que les règles du titre troisième du livre dixième du Code civil du Québec (« C.c.Q. ») portant sur la compétence internationale des autorités du Québec ne soient ni applicables ni pertinentes à la question dont nous sommes saisis.
[121] La question qui se pose en l’instance est celle de l’applicabilité des articles 195.2, 199.1, 265, 273.1 et 273.3 de la Loi sur les valeurs mobilières[69] du Québec à des défendeurs domiciliés à l’extérieur du Québec et de la compétence du Tribunal administratif des marchés financiers pour imposer des sanctions administratives à ceux-ci en vertu de ces dispositions.
[122] Aucun doute que cette question soulève des réflexions d’ordre constitutionnel puisqu’elle concerne l’applicabilité d’une loi provinciale de nature réglementaire à des non-résidents du Québec pour des activités menées en grande partie hors Québec. Cette question est similaire - mais non identique - à celle traitée par la Cour d’appel de la Colombie-Britannique dans l’affaire McCabe[70].
[123] Dans cette affaire, M. McCabe, un résident de la Colombie-Britannique, contestait la compétence de la Securities Commission de cette province de lui ordonner de restituer environ 2,78 millions de dollars et de lui imposer une pénalité administrative de 1,5 million de dollars en lien avec des pratiques déloyales portant sur des actions d’une société du Nevada exclusivement transigées aux États-Unis. La Securities Commission de la Colombie-Britannique soutenait sa compétence sur le fait que les pratiques déloyales avaient été commises par M. McCabe à même son domicile situé dans la province.
[124] La Cour d’appel de la Colombie-Britannique a confirmé l’applicabilité de la législation provinciale en cause au cas de M. McCabe en faisant appel aux critères de l’arrêt Unifund[71] de la Cour suprême du Canada portant sur l’applicabilité extraterritoriale d’une loi provinciale de nature réglementaire[72], lesquels critères s’articulent autour des propositions suivantes[73] :
1. La limitation territoriale de la portée du pouvoir de légiférer des provinces empêche les lois d’une province de s’appliquer aux affaires qui ne présentent pas de lien suffisant avec cette dernière.
2. Le caractère « suffisant » du lien dépend du rapport qui existe entre le ressort ayant légiféré, l’objet du texte de loi et l’individu ou l’entité qu’on cherche à assujettir à celui-ci.
3. L’applicabilité d’une loi provinciale par ailleurs valide à un défendeur de l’extérieur de la province concernée est fonction des exigences d’ordre et d’équité qui sous-tendent nos structures fédérales.
4. Comme ils visent une finalité, les principes d’ordre et d’équité sont appliqués d’une manière souple, en fonction de l’objet de la loi.
[125] Comme le signale le juge Binnie dans Unifund, bien qu’ils se rapprochent l’un de l’autre, le « lien suffisant » (« sufficient connection ») requis afin de déterminer du point de vue constitutionnel les limites territoriales du pouvoir de légiférer des provinces n’est pas nécessairement subsumé dans le critère du « lien réel et substantiel » (« real and substantial connection ») de la common law qui permet aux tribunaux de se déclarer compétents à l’égard d’un litige, ce dernier critère propre au droit international privé pouvant « ne pas être suffisant pour que les lois de cette province décident de l’issue du litige »[74]. Ainsi, dans l’affaire McCabe, le fait que la Securities Commission pouvait invoquer une compétence sur M. McCabe résultant de son domicile en Colombie-Britannique (une question de droit international privé) ne pouvait suffire en soi pour décider de l’applicabilité constitutionnelle de la législation provinciale en cause[75].
[126] Or, dans l’affaire dont nous sommes saisis, il se pose tant : (1) la question de l’applicabilité constitutionnelle des dispositions en cause de la Loi sur les valeurs mobilières selon le critère du « lien suffisant » propre aux règles du droit constitutionnel, que (2) celle de la compétence du Tribunal administratif des marchés financiers en vertu des règles du droit international privé à l’égard des appelants qui résident hors Québec, laquelle compétence, fondée sur des considérations d’ordre, d’équité procédurale et de courtoisie internationale, en plus de comporter une dimension constitutionnelle, est principalement, sinon exclusivement, régie par les dispositions du titre troisième du livre dixième du C.c.Q.[76].
[127] Ainsi, je suis d’avis que les dispositions du titre troisième du livre dixième du C.c.Q. portant sur la compétence internationale des autorités du Québec s’appliquent en l’occurrence. Voici pourquoi.
[128] La
réglementation des valeurs mobilières est de compétence provinciale en tant que
question relevant de la propriété et des droits civils, des domaines visés par
le par.
[129] D’ailleurs,
le C.c.Q. contient plusieurs dispositions concernant les valeurs
mobilières, notamment les articles
[130] Bien que
la réglementation des valeurs mobilières relève du droit civil, elle n’est pas
entièrement comprise dans le C.c.Q., mais se retrouve principalement
dans des lois particulières, notamment la Loi sur les valeurs mobilières,
la Loi sur le transfert de valeurs mobilières et l’obtention de titres
intermédiaires[81]
et la Loi sur les instruments dérivés[82].
Par contre, toutes ces lois s’appliquent en harmonie avec les dispositions du C.c.Q.
et y réfèrent d’ailleurs abondamment[83].
À titre d’exemple propre au présent dossier, l’article
[131] La Loi sur les valeurs mobilières distingue d’ailleurs clairement entre plusieurs types de recours, dont notamment les recours en sanctions pénales (art. 202 à 213), les recours en sanctions civiles (art. 213.1 à 236.1 et 268 à 269.2) et les recours en sanctions administratives (art. 265 à 267, 270 à 273.3 et 274.1), dont les pénalités administratives prévues par l’art. 273.1.
[132] Il faut
noter que ces pénalités administratives recherchées par le Tribunal
administratif des marchés financiers à l’encontre des appelants en vertu de
l’article
[133] Il est donc inapproprié, quant à moi, d’invoquer les règles de compétence du droit criminel, dont plus particulièrement l’arrêt Libman[85], pour asseoir la compétence du Tribunal administratif des marchés financiers dans cette affaire puisque cet arrêt s’applique tout au plus aux recours en sanctions pénales et non pas aux autres types de recours entrepris en vertu de la Loi sur les valeurs mobilières[86]. Quoi qu’il en soit, les règles de compétence à l’égard d’infractions criminelles répondent à des critères et des impératifs propres au droit criminel[87], qui ne sont pas nécessairement exportables aux recours civils ou administratifs. Ainsi, de façon générale, on ne peut procéder à un procès criminel si l’accusé n’est pas présent, ce qui met en cause la procédure d’extradition dans le cas d’accusés domiciliés à l’étranger. Or, ce n’est pas la procédure d’extradition qui s’applique à un défendeur étranger contre lequel on cherche à imposer une mesure administrative, mais plutôt les principes du droit international privé, entre autres les règles qui confèrent compétence au tribunal et celles qui permettent d’exécuter le jugement du tribunal à l’étranger lorsqu’il vise un défendeur étranger[88].
[134] Bien que
dans l’arrêt Donaldson[89],
la Cour ait conclu que les pénalités administratives prévues par l’art.
[135] Les
dispositions du C.c.Q. portant sur la compétence internationale des
autorités du Québec ont d’ailleurs une portée bien plus large que celles de
l’article
Comme il n’existait pas de règles pour déterminer la compétence des autorités du Québec dans les litiges présentant un élément d’extranéité. La jurisprudence avait étendu à ces situations les règles de compétence du droit interne, prévues au Code de procédure civile.
L’objectif général du Titre troisième est de remédier à cette lacune, en prévoyant des règles spécifiques pour déterminer la compétence internationale des autorités du Québec, tribunaux judiciaires ou administratifs et autorités administratives diverses. Il est divisé en deux chapitres, l’un comportant des dispositions générales et l’autre des dispositions particulières aux matières personnelles à caractère extrapatrimonial ainsi qu’aux matières réelles et mixtes. Les règles visent généralement à ne saisir les autorités du Québec que dans les cas où les litiges présentent des liens étroits avec elles, dans un souci de courtoisie internationale.
L’expression autorité a été retenue plutôt que celle de tribunal pour couvrir à la fois les instances judiciaires, administratives et même ecclésiastiques, par exemple. Cependant une autorité n’en est une que si la loi québécoise la considère comme telle. Également, l’expression traditionnelle de conflit de juridiction n’a pas été reprise, car, il s’agit ici uniquement de déterminer les cas où les autorités québécoises auront compétence pour entendre un litige présentant un élément d’extranéité et non pas les cas où les autorités étrangères auront compétence.
[136] La volonté législative ne peut être plus claire. Premièrement, comme le souligne le ministre, les dispositions du C.c.Q. portant sur la compétence internationale des autorités du Québec s’étendent aux tribunaux administratifs, dont nécessairement le Tribunal administratif des valeurs mobilières. Ces dispositions s’étendent à l’ensemble des recours relevant de la compétence constitutionnelle du Québec sur la propriété et les droits civils. Comme l’énonce le ministre de la Justice du Québec dans ses Commentaires, ces règles visent généralement à ne saisir les autorités du Québec, dont les tribunaux administratifs, que dans les cas où les litiges présentent des liens étroits avec elles, dans un souci de courtoisie internationale.
[137] De plus, ces règles s’appliquent qu’on soit en présence ou non d’un conflit de juridiction. Comme le souligne encore une fois le ministre de la Justice du Québec dans ses Commentaires, l’expression traditionnelle de conflit de juridiction n’a pas été reprise au titre troisième du livre dixième du C.c.Q., car il s’agit là uniquement de déterminer les cas où les autorités québécoises ont compétence pour entendre un litige présentant un élément d’extranéité et non pas les cas où les autorités étrangères ont compétence. Il n’est donc pas nécessaire d’être en présence d’un conflit de compétence pour appliquer ces règles, celles-ci s’appliquant même en l’absence d’un tel conflit.
[138] La portée très large du titre troisième du livre dixième du C.c.Q., comme énoncé dans les Commentaires du ministre de la Justice du Québec, a d’ailleurs été confirmée par la Cour suprême du Canada. Ainsi, dans l’arrêt Van Breda, le juge LeBel s’exprimait comme suit pour une Cour suprême unanime[94] :
[21] Les règles du droit international
privé doivent être conformes au régime constitutionnel canadien. Compte
tenu de la nature du droit international privé, son application soulève
inévitablement des questions constitutionnelles. Cette branche du droit
traite de la compétence des tribunaux provinciaux canadiens, de l’opportunité
d’exercer cette compétence, de la loi applicable dans un litige donné et des
conditions de la reconnaissance et de l’exécution d’un jugement rendu par un
tribunal d’une autre province ou d’un tribunal étranger. Ses règles se
trouvent dans la common law et dans les lois des provinces de common law et, au
Québec, dans le Code civil du Québec, L.Q. 1991, ch. 64, qui
contient un ensemble complet de règles et de principes en la matière (voir
le Code civil du Québec, Livre dixième, art. 3076 à 3168).
L’interaction de la compétence provinciale et des situations juridiques
survenues à l’extérieur de la province se situe à l’intérieur d’un cadre
constitutionnel qui limite la portée extraterritoriale des lois provinciales et
des tribunaux provinciaux. En effet, la Constitution attribue des
pouvoirs aux provinces, mais elle n’en autorise l’exercice que sur leur
territoire (voir P. W. Hogg, Constitutional Law of Canada (5e éd.
2007), vol. 1, p. 364-365 et 376-377; H. Brun,
G. Tremblay et E. Brouillet, Droit constitutionnel (5e éd.
2008), p. 569; Colombie-Britannique c. Imperial Tobacco Canada
Ltée,
(Soulignement et caractères gras ajoutés)
[139] Plus
récemment, dans l’affaire Uashaunnuat[95],
la Cour suprême est venue confirmer à nouveau que les dispositions du titre
troisième du livre dixième du C.c.Q. s’appliquent aux recours qui ne
tombent pas nécessairement sous la classification classique d’un recours civil
personnel, réel ou mixte. Dans cette affaire, des peuples autochtones
réclamaient devant la Cour supérieure du Québec des compensations monétaires et
recherchaient l’émission d’une injonction et des déclarations judiciaires
visant des sociétés minières. Leur recours était entièrement fondé sur des
atteintes alléguées à leur titre ancestral et à leurs droits ancestraux
reconnus et confirmés par l’article
[140] Les juges
majoritaires ont reconnu que le recours entrepris contre les sociétés minières
domiciliées au Québec concernait des droits qui n’étaient ni définis ni
directement régis par le C.c.Q.[96]
et qu’il ne se fondait ni sur un droit personnel, ni sur un droit réel, ni sur
un mélange des deux[97].
Ils ont donc conclu que la compétence de la Cour supérieure sur le recours
entrepris se fondait sur le domicile québécois des compagnies minières
défenderesses, notamment selon l’article
[141] Les juges
minoritaires ont aussi fondé leurs conclusions sur les dispositions du titre
troisième du livre dixième du C.c.Q., malgré que le recours entrepris ne
relevait pas du droit civil et ne constituait pas à proprement parler une
action personnelle, réelle ou mixte au sens du C.c.Q.[101].
Pour décider de la portée territoriale de la compétence de la Cour supérieure,
ils ont eux aussi procédé par analogie[102].
Qualifiant par analogie le recours d’action réelle, les juges dissidents ont
conclu que les règles du titre troisième du livre dixième du C.c.Q.,
notamment l’article
[142] Quoi qu’il en soit, aux fins du présent appel, la décision de la Cour suprême du Canada dans Uashaunnuat confirme sans ambiguïté que les dispositions du titre troisième du livre dixième du C.c.Q. ont une portée large et s’appliquent aussi à des recours qui ne relèvent pas nécessairement dudit code.
[143] Qu’en est-il en l’espèce?
[144] Il me
semble que le recours entrepris contre les appelants, sans être nécessairement
une action personnelle à caractère patrimonial au sens classique du droit
civil, s’en rapproche sensiblement. Il y a donc lieu, selon moi, d’appliquer
par analogie les dispositions de l’article 3148 al.
[145] De plus, tel que je l’explique plus bas, le « lien suffisant » requis afin de déterminer si, du point de vue constitutionnel, la Loi sur les valeurs mobilières du Québec s’applique au litige est aussi établi dans ce dossier, comme c’était le cas dans l’affaire McCabe.
[146] Cela
étant, même si l’on ne pouvait appliquer par analogie l’article 3148 al.
[147] L’article
[148] Dans ce
cas-ci, l’article
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3136. Bien qu’une autorité québécoise ne soit pas compétente pour connaître d’un litige, elle peut, néanmoins, si une action à l’étranger se révèle impossible ou si on ne peut exiger qu’elle y soit introduite, entendre le litige si celui-ci présente un lien suffisant avec le Québec. |
3136. Even though a Québec authority has no jurisdiction to hear a dispute, it may nevertheless hear it provided the dispute has a sufficient connection with Québec, if proceedings abroad prove impossible or the institution of proceedings abroad cannot reasonably be required. |
[149] Comme on
peut le constater, les dispositions de cet article réfèrent précisément au
critère du « lien suffisant » (« sufficient connection »),
faisant ainsi écho au critère constitutionnel qui permet de cerner les limites
territoriales du pouvoir de légiférer des provinces. Il y a donc une harmonie
entre ce critère constitutionnel et celui énoncé à l’article
[150]
Cependant, l’article
[151] C’est donc une analyse en deux volets qui doit être faite
sous cette disposition : (1) il faut déterminer dans un premier temps si
la législation provinciale concernée, en l’occurrence les articles
[152] Dans ce cas-ci, le critère du « lien suffisant » m’apparaît satisfait. Dans la demande introductive d’instance (« DII ») de l’Autorité des marchés financiers, les faits qui appuient la demande (lesquels sont tenus pour avérés à ce stade des procédures) permettent notamment de constater ce qui suit :
(a) bien que la société émettrice concernée, Solo International Inc. (« Solo ») soit incorporée au Nevada, il s’agit d’un émetteur assujetti au Québec qui opère à même une adresse située sur le boul. René-Lévesque Ouest au centre-ville de Montréal (par. 7 et 10 DII);
(b) le président-directeur général de Solo est Michel Plante, un résident du Québec, lequel agit aussi comme son secrétaire et trésorier et en constitue l’actionnaire majoritaire (par. 8-9 et 12-13 DII);
(c) les activités de Solo comprennent essentiellement l’acquisition de droits miniers au Québec par le biais d’une filiale incorporée au Québec et dirigée par Plante (par. 11 et 14 DII);
(d) les appelants, bien que n’étant pas domiciliés au Québec, ont participé à une ou plusieurs des étapes de manipulation des valeurs mobilières de Solo afin d’en faire accroître artificiellement la valeur au moyen d’un stratagème classique de promotion/délestage dit de « pump and dump » (par. 24-41 DII);
(e) ces manipulations menées par les appelants comprenaient l’acquisition de droits miniers québécois sans véritable valeur de façon contemporaine à la nomination de Plante comme dirigeant de Solo (par. 70-71 DII);
(f) ces manipulations des appelants comprenaient aussi une campagne promotionnelle visant à mousser artificiellement le titre de Solo, principalement au moyen de communiqués de presse, dont plusieurs semblent émis de Montréal, faisant ainsi faussement croire que les droits miniers québécois acquis par cette société pouvaient avoir une valeur importante (par. 76-80, 88 et pièce D-35);
(g) ces manipulations comprenaient également une campagne de promotion boursière via Internet sur plusieurs sites accessibles, entre autres aux résidents du Québec (par. 81-85 DII);
(h) le volume des transactions des valeurs mobilières de Solo et leur valeur accrue résultent largement des transactions malhonnêtes répétitives et concertées des appelants via des sociétés et comptes étrangers (par. 90-98 DII);
(i) l’ensemble de ces manipulations a permis aux appelants de récolter des profits substantiels via des sociétés étrangères (par. 99-100 DII).
[153] De fait, l’Autorité des marchés financiers allègue que les appelants ont mis sur pied leur stratagème, dont l’émission de communiqués de presse vraisemblablement de Montréal, afin d’accroître artificiellement les valeurs mobilières d’une société dont l'établissement était situé au Québec, dont le dirigeant principal était domicilié au Québec et dont l’activité principale consistait en l’acquisition de droits miniers sur le territoire québécois, et ce, en utilisant une panoplie de sociétés-écrans et de comptes bancaires situés à l’extérieur du Québec dans des juridictions aussi exotiques que la République des îles Marshall, la Fédération de Saint-Christophe-et-Niévès des Petites Antilles, l’état indépendant des Samoa et le Bélize[105].
[154] Le critère du « lien suffisant » doit s’appliquer en fonction de l’objet du régime législatif provincial en cause, dans ce cas-ci, la réglementation des valeurs mobilières, tout en tenant compte des réalités et des défis réels d’une telle réglementation dans le cadre d’un monde moderne de plus en plus interconnecté. Comme le soulignait avec raison la Cour d’appel de la Colombie-Britannique dans McCabe[106] :
[37] The analysis of whether a real and substantial connection exists must reflect the realities of modern securities regulation. For instance, conduct involving securities will often be transnational in nature, crossing provincial and state borders.
[155] À cet égard, les commentaires suivants du Tribunal administratif des marchés étrangers dans la présente affaire m’apparaissent particulièrement pertinents[107] :
[72] La réalité contemporaine des défis internationaux auxquels font face les régulateurs financiers nationaux - en particulier pour ce qui a trait aux stratagèmes transnationaux de manipulation du marché des valeurs mobilières - est fort bien décrite dans le rapport de l’Organisation international des commissions de valeurs (ci-après « OICV ») intitulé Investigating and Prosecuting Market Manipulation, lequel fut publié en 2000 et fit l’objet d’un addenda en 2013. Ce rapport fait notamment le fondamental constat suivant :
" The existence of global and interconnected markets increases the opportunities for market manipulation, as well as the difficulty in detecting and investigating manipulation. "
[73] Le Tribunal ne peut, dans l’intérêt public, ignorer cette réalité contemporaine qui fait qu’un stratagème de manipulation du marché d’une valeur mobilière a souvent une portée et des composantes reliées à plusieurs juridictions, et ce, pour l’évidente raison - généralement fort bien connue de son ou de ses auteurs - que ces caractéristiques le rendent plus difficile à identifier et à réprimer.
[156] Tenant
compte à la fois de l’objet du régime législatif provincial portant sur la
réglementation des valeurs mobilières et des réalités et défis contemporains
d’une telle réglementation, je suis d’opinion que, dans les circonstances
factuelles du présent dossier, le critère du « lien suffisant » est
satisfait tant sur le plan du droit constitutionnel que de celui de l’art.
[157] Il s’agit maintenant de déterminer si une action à l’étranger se révèle aussi « impossible ou si on ne peut exiger qu’elle y soit introduite » / « if proceedings abroad prove impossible or the institution of proceedings abroad cannot reasonably be required ».
[158] Le
deuxième volet de l’analyse en vertu de l’article
[159] En
l’occurrence, le Tribunal administratif des marchés financiers a souligné dans
la présente affaire « qu’aucune preuve ne lui a été présentée par les
intimés à l’effet que les autorités d’un autre État seraient à même de prendre
des décisions dans la présente affaire »[109].
Bien que ce constat ait été fait dans le contexte du rejet d’une demande pour
décliner compétence sur la base du principe du forum non conveniens, il
est néanmoins tout à fait pertinent à l’analyse sous le second volet de l’art.
[160] Cela
suffit pour rejeter l’appel. Que ce soit en appliquant par analogie l’article
3148 al.
[161] Pourquoi est-il important d’appliquer les règles du droit international public du C.c.Q. dans cette affaire?
[162] Ce qu’il faut éviter, selon moi, c’est de confondre, d’une part, l’application de la Loi sur les valeurs mobilières selon le critère constitutionnel du « lien suffisant » et, d’autre part, la compétence exclusive de l’Administration des marchés financiers ou du Tribunal administratif des marchés financiers en vertu de cette loi. Ainsi, par exemple, lors d’une émission pancanadienne de valeurs mobilières, la Loi sur les valeurs mobilières du Québec s’applique selon le critère constitutionnel du « lien suffisant », puisque la transaction envisagée aura des effets sur le marché québécois des valeurs mobilières. Cela étant, les autorités québécoises ne se voient pas ainsi conférer une compétence sur la transaction pancanadienne dans son ensemble, puisque leur compétence exclusive ne s’étend pas au-delà des aspects québécois de l’affaire selon des considérations d’ordre, d’équité procédurale et de courtoisie internationale propres aux règles du droit international privé, lesquelles comportent aussi une dimension constitutionnelle.
[163] C’est pourquoi je ne peux souscrire à la proposition qu’il existerait une équivalence entre, d’une part, le critère constitutionnel du « lien suffisant » aux fins de l’application de la Loi sur les valeurs mobilières et, d’autre part, la compétence exclusive du Tribunal administratif des marchés financiers en vertu de cette loi. Pour ma part, pour les motifs exprimés ci-haut, je suis plutôt d’avis que ce sont les dispositions plus nuancées du titre troisième du livre dixième du C.c.Q. qui s’imposent aussi dans le cadre de l’analyse, lesquelles sont fondées sur des considérations d’ordre, d’équité procédurale et de courtoisie internationale propres du droit international privé.
[164] En conclusion, je rejetterais les appels, avec les frais de justice.
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ROBERT M. MAINVILLE, J.A. |
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[1] Langford Sharp v. Financial Markets
Administrative Tribunal,
[2]
Autorité des marchés financiers v. Solo International inc.,
[3] Securities Act, CQLR, c. V-1.1 [Securities Act].
[4] The U.S. Exchange and Securities Commission describes a pump and dump scheme as having “two parts. In the first, promoters try to boost the price of a stock with false or misleading statements about the company. Once the stock price has been pumped up, fraudsters move on to the second part, where they seek to profit by selling their own holdings of the stock, dumping shares into the market”. Securities Exchange Commission Office of Education and Advocacy, “Pump and Dump Schemes”, on Investor.gov, online: https://www.investor.gov/protect-your-investments/fraud/types-fraud/pump-and-dump-schemes.
[5] Exhibit D-35.
[6] Judgment under appeal, supra, note 1.
[7]
Langford Sharp v. Autorité des marchés financiers,
[8] Libman v. The Queen, 1985 CanLII 51 SCC,
[9] Global Securities Corp. v. British Columbia
(Securities Commission),
[10] McCabe v. British Columbia Securities Commission,
[11] Act respecting the regulation of the financial sector, CQLR, c. E-6.1, ss. 93-94 [ARRFS], previously the Act respecting the Autorité des marchés financiers.
[12] Torudag v. British Columbia (Securities Commission),
[13] Global Securities, supra, note 9.
[14] Club Resorts Ltd. v. Van Breda,
[15] Unifund Assurance v. Insurance Corp of B.C.,
[16] Torudag, supra, note 12, para. 12.
[17] Judgment under appeal, supra, note 6, para. 40.
[18] Id., para. 42.
[19] FMAT decision, supra, note 2, paras. 80-82.
[20] Judgment under appeal, supra, note 6, para. 42.
[21] Although at paragraph 43 of his judgment, the judge refers to an infraction under section 99.1, it appears obvious that he meant to refer to section 199.1.
[22] ARRFS, supra, note 11, s.115.16:
|
115.16. Any person directly interested in a final decision of the Tribunal may appeal the decision to the Court of Québec. |
115.16. Toute personne directement intéressée par une décision finale du Tribunal peut interjeter appel de cette décision devant la Cour du Québec. |
[23] ARRFS, supra, note 11, s. 115.15.63:
|
115.15.63. Except on a question of jurisdiction, no application for judicial review under the Code of Civil Procedure (chapter C-25.01) may be exercised nor any injunction granted against the Tribunal or Tribunal members acting in their official capacity. A judge of the Court of Appeal may, on an application, summarily annul any decision, order or injunction made or granted contrary to this section. |
115.15.63. Sauf sur une question de compétence, aucune demande de contrôle judiciaire en vertu du Code de procédure civile (chapitre C-25.01) ne peut être exercée ni aucune injonction accordée contre le Tribunal ou les membres du Tribunal agissant en leur qualité officielle. Un juge de la Cour d’appel peut, sur demande, annuler sommairement toute décision, ordonnance ou injonction rendue ou accordée à l’encontre du présent article. |
[24] Torudag, supra, note 12.
[25] Canada (Minister of Citizenship and Immigration) v. Vavilov,
[26] Vavilov, supra, note 25, paras. 16-17.
[27] Van Breda, supra, note 14, para. 21.
[28] Vavilov, supra, note 25, para. 59.
[29] Ibid.
[30] Vavilov, supra, note 25, paras. 55-56:
[55] Questions regarding
the division of powers between Parliament and the provinces, the relationship
between the legislature and the other branches of the state, the scope of
Aboriginal and treaty rights under s.
[56] The Constitution — both written and unwritten — dictates the limits of all state action. Legislatures and administrative decision makers are bound by the Constitution and must comply with it. A legislature cannot alter the scope of its own constitutional powers through statute. Nor can it alter the constitutional limits of executive power by delegating authority to an administrative body. In other words, although a legislature may choose what powers it delegates to an administrative body, it cannot delegate powers that it does not constitutionally have. The constitutional authority to act must have determinate, defined and consistent limits, which necessitates the application of the correctness standard.
[31] Westcoast Energy Inc. v. Canada
(National Energy Board),
[32]
Stéphane Rousseau, “La responsabilité civile des régulateurs en valeurs
mobilières : quelle portée pour la mission de protection des investisseurs
en droit civil?”,
[33] Securities Act, supra, note 3, ss. 195.2 and 199.1.
[34] Pierre-André Côté in collaboration with Stéphane Beaulac and Mathieu Devinat, Interprétation des lois, 4th ed., Montreal, Thémis, 2009, p. 230, para. 771.
[35] McCabe, supra, note 10, paras. 32-34.
[36] Unifund, supra, note 15.
[37] Torudag, supra, note 12.
[38] FMAT decision, supra, note 2, para. 13.
[39]
Donaldson v. Autorité des marchés financiers,
[40] Van Breda, supra, note 14, para. 21.
[41] Newfoundland and Labrador (Attorney General) v. Uashaunnuat
(Innu of Uashat and of Mani-Utenam),
[42] Uashaunnuat, supra, note 41, paras. 58-59.
[43] The preliminary provision of the C.C.Q. reads as follows:
The Civil Code of Québec, in harmony with the Charter of human rights and freedoms (chapter C-12) and the general principles of law, governs persons, relations between persons, and property.
The Civil Code comprises a body of rules which, in all matters within the letter, spirit or object of its provisions, lays down the jus commune, expressly or by implication. In these matters, the Code is the foundation of all other laws, although other laws may complement the Code or make exceptions to it.
In its previous version, the preliminary provision specifically referred to private international law.
See also
Alain-François Bisson, “La Disposition préliminaire du Code civil du Québec”,
[44] Ministère de la justice, Commentaires du ministre de la Justice : Le Code civil du Québec, t. 2, Quebec, Publications du Québec, 1993, p. 1998.
[45] See Alain Prujiner, “Fascicule 1: Introduction: principes et méthodes du droit international privé québécois”, at no. 4 in Pierre-Claude Lafond, ed, JCQ Droit international privé.
[46] Libman, supra, note 8, p. 183-184.
[47] Alain Prujiner, “Fascicule 1 - Introduction: principes et méthodes du droit international privé québécois”, at no. 4 in Pierre-Claude Lafond, ed, JCQ Droit international privé.
[48]
Pierre Mayer, Vincent Heuzé et Benjamin Remy,
En tant que droit applicable aux rapports entre les personnes privées, le droit international privé se distingue également du droit public international, droit applicable à l’aspect international des rapports entre un État et les personnes privées ; relève, par exemple, de ce droit le problème de la compétence d’un État pour taxer une opération faite à l’étranger par l’un de ses nationaux.
[49]
Pezim v. British Columbia (Superintendent of Brokers), 1994
CanLII 103 (SCC),
[50] Pierre-André Côté in collaboration with Stéphane Beaulac and Mathieu Devinat, supra, note 34, p. 234, paras. 782-783.
[51]
Henri Brun, Guy Tremblay and Eugénie Brouillet,
[52] Pezim, supra, note 49; Stéphane Rousseau, “L’application de la législation sur les valeurs mobilières au Québec : une étude du rôle du Tribunal administratif des marchés financiers”, supra, note 49.
[53] Reference re Securities Act, 2011,
[54] Securities Act, supra, note 3, s. 236.1:
|
236.1. Any action under this Title or any action under the ordinary rules of law in respect of facts related to the distribution of a security or to a take-over bid or issuer bid may be brought before the court of the plaintiff’s residence. In matters pertaining to the distribution of a security, the laws of Québec are applicable where the subscriber or purchaser resides in Québec, regardless of the place of the contract. Any contrary stipulation as to the jurisdiction of the courts or the applicable legislation is without effect. |
236.1. L’action fondée sur le présent titre ou l’action intentée selon le droit commun pour des faits reliés au placement d’une valeur ou à une offre publique d’achat ou de rachat peut être portée devant le tribunal de la résidence du demandeur. En ce qui concerne le placement d’une valeur, la loi du Québec est applicable dès lors que le souscripteur ou l’acquéreur réside au Québec, indépendamment du lieu du contrat. Toute stipulation contraire concernant la compétence des tribunaux ou la loi applicable est sans effet. |
[55] Article
|
3076. The rules contained in this Book apply subject to those rules of law in force in Québec which are applicable by reason of their particular object. |
3076. Les règles du présent livre s’appliquent sous réserve des règles de droit en vigueur au Québec dont l’application s’impose en raison de leur but particulier. |
See Gérald Goldstein, “Fascicule 6: Méthodes alternatives : loi de police, règles matérielles et méthode de reconnaissance”, at no. 10 in Pierre-Claude Lafond, ed, JCQ Droit international privé.
[56] Article
|
3136. Bien qu’une autorité québécoise ne soit pas compétente pour connaître d’un litige, elle peut, néanmoins, si une action à l’étranger se révèle impossible ou si on ne peut exiger qu’elle y soit introduite, entendre le litige si celui-ci présente un lien suffisant avec le Québec. |
3136. Even though a Québec authority has no jurisdiction to hear a dispute, it may nevertheless hear it provided the dispute has a sufficient connection with Québec, if proceedings abroad prove impossible or the institution of proceedings abroad cannot reasonably be required. |
[57] Unifund, supra, note 15.
[58] Libman, supra, note 8.
[59] Sections
[60] Ibid.
[61] Exhibit D-35.
[62] Ibid.
[63] Libman, supra, note 8.
[64] Id., p. 212-215.
[65] World Stock Exchange (Re), 2000 LNABASC 39, p. 36.
[66] Ibid.
[67] Vavilov, supra, note 25, para. 81.
[68] Id., para. 101.
[69] Loi sur les valeurs mobilières, RLRQ, c. V-1.1.
[70] McCabe v. British Columbia (Securities Commission),
[71] Unifund Assurance Co. c. Insurance
Corp. of British Columbia,
[72] McCabe, supra, note 70, par. 34.
[73] Unifund, supra, note 71, par. 56; Voir aussi Club
Resorts Ltd. c. Van Breda,
[74] Unifund, supra, note 71, par. 58.
[75] Voir à ces égards les propos du juge Binnie aux par. 54-55 de Unifund.
[76]
Spar Aerospace Ltée c. American Mobile Satellite Corp.,
[77]
Renvoi relatif à la Loi sur les valeurs mobilières,
[78]
Id., par. 45; Global Securities Corp. c. Colombie-Britannique
(Securities Commission),
[79]
Renvoi relatif à la Loi sur les valeurs mobilières,
[80]
Voir notamment les articles
[81] Loi sur le transfert de valeurs mobilières et l’obtention de titres intermédiaires, RLRQ, c. T-11.002.
[82] Loi sur les instruments dérivés, RLRQ, c. I-14.01.
[83] Voir notamment la Loi sur les valeurs mobilières, art. 109.6, 235 et 273.3; Loi sur le transfert de valeurs mobilières et l’obtention de titres intermédiaires, art. 29, 111 et 129.
[84]
Guindon c. Canada,
[85]
Libman c. La Reine,
[86] Ontario Securities Commission v. DaSilva, 2017 ONSC 4576, par. 56.
[87] Voir à cet égard Martin Vauclair et Tristan Desjardins, Traité général de preuve et de procédure pénales, 27e éd., Cowansville, Yvon Blais, 2020, par. 5.78 à 5.113 (p.120-134).
[88] Au Québec, ces règles se trouvent codifiées au titre quatrième du livre dixième du C.c.Q. intitulé « De la reconnaissance et de l’exécution des décisions étrangères et de la compétence des autorités étrangères ».
[89]
Donaldson c. Autorité des marchés financiers,
[90] Id., par. 42, citant Stéphane Rousseau, « L’application de la législation sur les valeurs mobilières au Québec : une étude du rôle du Tribunal administratif des marchés financiers », (2017) 76 R. du B. 1, p. 13.
[91]
Procureur général du Québec c. Labrecque,
[92]
Id., p. 1081-1082. Voir aussi Prud’homme c. Prud’homme,
[93] Ministère de la Justice, Commentaires du ministre de la Justice : Le Code civil du Québec, t. 2, Québec, Publications du Québec, 1993, p. 1998.
[94]
Van Breda, par. 21. Le principe que le livre dixième du C.c.Q.
comprend un ensemble complet de règles et de principes en la
matière est aussi énoncé dans l’arrêt Spar Aerospace, par. 22-23, et ce
principe fut d’ailleurs repris récemment par les juges Brown et Rowe
dans Uashaunnuat, par. 102. Voir aussi Chandler c. Volkswagen Aktiengesellschaft,
[95]
Terre-Neuve-et-Labrador (Procureur général) c. Uashaunnuat (Innus de
Uashat et de Mani-Utenam),
[96] Uashaunnuat, par. 19.
[97] Id., par. 34.
[98] Id., par. 53.
[99] Id., par. 35-36 et 53-61.
[100] Id., par. 44-52.
[101] Id., par. 75, 117-119 et 126-135.
[102] Id., par. 136-140, 158 et 162.
[103] Id., par.163, 174-180 et 203.
[104] Jugement de la Cour supérieure, par. 44.
[105]
Autorité des marchés financiers c. Solo International inc.,
[106] McCabe, par. 37; Berger v. Saskatchewan (Financial and
Consumer Affairs Authority),
[107] Autorité des marchés financiers c. Solo International inc., supra, note 105, par. 72-73.
[108]
Lamborghini (Canada) inc. c. Automobile Lamborghini S.P.A.,
[109] Autorité des marchés financiers c. Solo International inc., supra, note 105, par. 85.
AVIS :
Le lecteur doit s'assurer que les décisions consultées sont finales et sans
appel; la consultation
du plumitif s'avère une précaution utile.