The respondent, British Columbia Securities Commission found that the appellants, Thalbinder Singh Poonian and Shailu Poonian, breached the Securities Act, R.S.B.C. 1996, c. 418, by engaging in conduct that resulted in the misleading appearance of trading activity in, or an artificial price for, a corporation’s shares. It then imposed both a disgorgement order and an administrative penalty against the Poonians.
The Commission applied to the BCSC for an order declaring that the amounts owed to it by the Poonians were debts that would not be released by an order of discharge under the Bankruptcy and Insolvency Act. The BCSC granted the Commission’s application. It concluded that the debts fell within two exemptions to the discharge of debts outlined at s. 178(1) of the BIA: the debts were fines, penalties or restitution orders imposed by a court (s. 178(1)(a)) and they resulted from obtaining property or services by false pretences or fraudulent misrepresentation (s. 178(1)(e)). The Court of Appeal for British Columbia dismissed the appeal. While it disagreed that the sanctions had been imposed by a court, it concluded that the BCSC had not erred in finding that the sanctions in this case fell within the exemption defined in s. 178(1)(e) of the BIA. The fact that the misrepresentation was not made to the creditor, in this case, the Commission, did not preclude the Commission from relying on the exemption.
Argued Date
2023-12-06
Keywords
Bankruptcy and insolvency - Securities - Bankruptcy and Insolvency — Debts not released by discharge — Securities Commission finding appellants breached Securities Act, R.S.B.C. 1996, c. 418, and imposing disgorgement order and administrative penalties — Courts below granting declaration that amounts appellants owe Securities Commission are not to be released by any order or discharge granted under the Bankruptcy and Insolvency Act — Whether Court of Appeal erred in finding Commission’s administrative monetary penalties and disgorgement orders survived Poonian’s discharge from bankruptcy — If so, whether Court of Appeal erred in finding creditors seeking to avail themselves of s. 178(1)(e) of the Bankruptcy and Insolvency Act did not have to prove they were same party debtor made direct representations to by fraud or fraudulent pretense — Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 178(1).
Notes
(British Columbia) (Civil) (By Leave)
Language
English Audio
Disclaimers
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