British Columbia (Securities Commission) v. Pasquill

2021 BCSC 1047 British Columbia (Securities Commission) v. Pasquill

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: British Columbia (Securities Commission) v. Pasquill, 2021 BCSC 1047 Date: 20210601 Docket: S188653 Registry: Vancouver Between: British Columbia Securities Commission Plaintiff And Earle Douglas Pasquill, Vicki Irene Pasquill and Vicker Holdings Ltd. Defendants - and - Docket: S1914087 Registry: Vancouver Between: Vicki Irene Pasquill and Vicker Holdings Ltd. Plaintiffs And British Columbia Securities Commission Defendant Before: The Honourable Mr. Justice Davies Reasons for Judgment Counsel for the Plaintiff in Action No.S188653 and Defendant in Action No. S1914087: L. Bevan Counsel for the Defendants, Vicki Pasquill and Vicker Holdings Ltd. in Action No. S188653 and Plaintiffs in Action No. S1914087: J. Kenneth McEwan, Q.C. L. Smith Counsel for the Defendant, Earle Pasquill in Action No. S188653: D. Yaverbaum Place and Date of Trial/Hearing: Vancouver, B.C. January 11 - 15, 2021 Place and Date of Judgment: Vancouver, B.C. June 1, 2021 Table of Contents INTRODUCTION.. 4 BACKGROUND TO THE COMPETING APPLICATIONS. 7 DISCUSSION AND ANALYSIS. 14 ISSUE #1: Applications by Vicki Pasquill and Vicker Holdings Ltd. to strike the Commission's Second Amended Notice of Civil Claim in the Collection Action. 14 1) Does the Commission have Statutory Authority to bring and maintain the Collection Action?. 16 2) Did registration of the $21.7

million Judgment awarded under the Sanctions Decision as a judgment in the Supreme Court of British Columbia merge with and extinguish the underlying action including alternative remedies that may have been sought in the underlying action?. 24 3) Is the declaratory relief sought by the Commission upon which the equitable remedies advanced against Vicki Pasquill and Vicker Holdings Ltd. available to the Commission?. 29 4) Are all causes of action pleaded by the Commission against Vicki Pasquill and Vicker Holdings Ltd. bound to fail?. 32 a) Claims that the applicants hold property on an express, resulting and/or constructive trust 33 b) Claims based upon knowing receipt 37 c) Claims of unjust enrichment 40 d) Fraudulent Preference and Fraudulent Conveyance claims. 43 ISSUE #2: Applications by Vicki Pasquill and Vicker Holdings Ltd. to cancel the CPLs registered against the Properties. 51 ISSUE #3: The Commission's application to further amend its Notice of Civil Claim in the Collection Action to plead, amongst other things, amendments to the enforcement provisions of the Securities Act 52 ISSUE #4: The Commission's application to strike Vicki Pasquill and Vicker Holdings Ltd.'s Second Amended Notice of Civil Claim in the Tort Action. 57 COSTS. 61

INTRODUCTION [1] These Rulings are delivered in two competing actions arising out of collection proceedings commenced by the British Columbia Securities Commission (the "Commission") in respect of administrative proceedings (the "Securities Proceedings") under the Securities Act, R.S.B.C. 1996, c. 418 [the Act] against Earle Pasquill, Michael Lathigee and three corporate respondents that were members of a group of companies collectively known as the Freedom Investment Club Group ("the FIC Group"). [2] Among the penalties imposed by a tribunal of the Commission were orders made in the penalty phase of the Securities Proceedings (the "Sanctions Decision") that, under s. 161(1)(g) of the Act, Earle Pasquill and Michael Lathigee pay to the Commission $21.7 million obtained directly or indirectly as a consequence of their contraventions of the Act as well as an administrative penalty of $15 million imposed under s. 162 of the Act. [3] On April 1, 2015 pursuant to Rule 17.1 of the Supreme Court Rules, B.C. Reg. 168/2009 (the "Rules"), the Commission caused the $21.7 million penalty imposed under the Sanctions Decision to be registered as a judgment of this Court in the amount of $21.7 million (the "$21.7 million Judgment") under file number L150117 [4] Earle Pasquill and Michael Lathigee appealed to the British Columbia Court of Appeal (the "Appeal") on the basis and quantum of both

of the penalties levied against them by the Tribunal. [5] The Appeal, together with appeals from other decisions of the Commission heard at the same time, was dismissed by the Court of Appeal on May 31, 2017 in Poonian v. British Columbia Securities Commission, 2017 BCCA 207 [Poonian]. [6] On August 9, 2018 the Commission filed proceedings in Vancouver Registry No. S188653 (the "Collection Action") against Earle Pasquill and his wife, Vicki Pasquill seeking to enforce the $21.7 million Judgment against each of them. The Commission did so notwithstanding that Vicki Pasquill had never been a party in the Securities Proceedings or to the Appeal. [7] By a subsequent amendment of its Notice of Civil Claim in the Collection Action the Commission joined Vicker Holdings Ltd. (a corporation owned by Vicki Pasquill) as a defendant against whom it also sought to enforce the $21.7 million Judgment. [8] In the Collection Action, amongst other claims, the Commission advanced a claim to interests in seven properties owned by Vicki Pasquill and/or Vicker Holdings Ltd. having an assessed value in 2018 of $20,040,000. [9] In doing so the Commission also filed Certificates of Pending Litigation ("CPLs") against the titles to those properties under the provisions of the Land Title Act, R.S.B.C. 1996, c. 250. [10] Vicki Pasquill and Vicker Holdings Ltd. have now applied to strike the proceedings

against them in the Collection Action as disclosing no reasonable claim under Rule 9-5(1)(a) and as an abuse of process under Rule 9-5(1)(d). [11] Alternatively, Vicki Pasquill and Vicker Holdings Ltd. seek the cancellation of the CPLs registered against their properties under the provisions of s. 215 of the Land Title Act. [12] The Commission opposes those applications. It has also applied to file a Third Amended Notice of Civil Claim in the Collection Action relying upon, among other things, recent amendments to the enforcement provisions of the Act, details of which I will discuss later in these reasons. [13] Vicki Pasquill and Vicker Holdings Ltd. oppose the making of those amendments in the Collection Action alleging, amongst other things, that the proposed amendments constitute a continuing abuse of process. [14] On December 12, 2019 Vicki Pasquill and Vicker Holdings Ltd. commenced proceedings against the Commission (the "Tort Action") in which they seek damages on the bases that: 1) the commencement of the Collection Action and the filing of the CPLs were done for improper collateral purposes and are tortious abuses of process; and 2) the Commission's actions in pursuing enforcement remedies against them, including the filing of the CPLs against their properties, constitutes misfeasance in public office. [15] The Commission has applied to strike Vicki Pasquill and

Vicker Holdings Ltd.'s pleadings in the Tort Action as disclosing no reasonable claim under Rule 9‑5(1)(a) or, alternatively as being an abuse of process under Rule 9-5(1)(d). [16] In partial response to that application Vicki Pasquill and Vicker Holdings Ltd. seek to amend their Notice of Civil Claim in the Tort Action by, among other things, naming as defendants the Commission's Chair and Executive Director. They did not, however, make an application to do so. [17] The Commission objected to any consideration of any such proposed amendments in the determination of the applications presently before the Court. [18] The complexities of the competing claims of the parties in the Collection Action and the Tort Action, and the various applications brought by each of them as described above, require that I decide the issues raised by the parties in both actions both individually and cumulatively. [19] I will accordingly discuss the applications and issues raised in the following order: 1) Vicki Pasquill and Vicker Holdings Ltd.'s applications to strike the Commission's Second Amended Notice of Civil Claim in the Collection Action.

2) Vicki Pasquill and Vicker Holdings Ltd.'s applications to cancel the CPLs filed against their properties.

3) The Commission's application to further amend its Second Amended Notice of Civil Claim in the Collection Action to plead, amongst other things, amendments to the enforcement provisions of the Act.

4) The Commission's application to strike Vicki Pasquill and Vicker Holdings Ltd.'s Second Amended Notice of Civil Claim in the Tort Action.

BACKGROUND TO THE COMPETING APPLICATIONS [20] In 2009 the Commission commenced an investigation into the companies in the FIC Group that were, at the time, jointly directed by Earle Pasquill and his then business partner Michael Lathigee. [21] That investigation resulted in the Securities Proceedings commenced in 2012 by the Executive Director of the Commission against Earle Pasquill, Michael Lathigee and companies in the FIC Group under the provisions of s. 161(1) and 161(2) of the Act. [22] In the Securities Proceedings the Commission alleged that by February 2008 the FIC Group had taken over $35 million in debt in relation to several Alberta real estate properties it was attempting to develop known as the Genesis Project. [23] The Commission alleged that fraud was perpetrated by Earle Pasquill and Michael Lathigee in breach of s. 57(b) of the Act from February 2008 through August 2008 when they: 1) Raised $21.7 million from 698 investors without telling the investors important facts about the financial conditions of the FIC Group; and 2) Raised $9.9 million from 331 investors in FIC Foreclosure Fund Ltd. for the purpose of investing in foreclosures of residential properties in the United States and instead used most of the funds to make loans to other FIC Group companies. [24] On July 8, 2014 a panel of the Commission's adjudicative arm issued lengthy reasons (the Liability

Decision) in which it held that Earle Pasquill and Michael Lathigee had subjective knowledge that the financial conditions of the FIC Group could cause deprivation to the investors who had been solicited to invest because they understood or should have understood that the FIC Group "was close to insolvency or because the Toronto Dominion Bank would call the [$21.7 million] loan" resulting in a finding of fraud contrary to s. 57(b) of the Act. [25] The panel also concluded that a second fraud was perpetrated in relation to a sub-set of the $21.7 million raised from the investors in that the second $10 million that was raised was supposed to be for the purpose of investing in foreclosure properties in the United States. Instead it was used to assist with the FIC Groups' debts and cash flow problems, exposing the investors to the "business and credit risks of the FIC Group as a whole". [26] There were no findings of fact made by the panel that anyone other than Michael Lathigee and Earle Pasquill directed or controlled the FIC Group or any of the companies that were found to have breached the Act. [27] There were also no findings made by the panel that any of the investors' funds that gave rise to findings against Earle Pasquill, Michael Lathigee or companies in the FIC Group were transferred to either Vicki Pasquill or Vicker Holdings Ltd. or used for the benefit of either of

them and neither is referred to in the panel's Liability Decision. [28] Following the Liability Decision, the panel issued the Sanctions Decision on March 16, 2015. [29] On the issue of the enrichment of the respondents in the Securities Proceedings (a factor relevant to sanctions under the Act) the Executive Director took the position that documents showed that approximately $388,000 was transferred out of the FIC Group directly to Earle Pasquill comprised of: $58,931.91 in pay cheques: $242,000 in expenses and a "one--time payable" of $87,000. [30] The panel thus confirmed that on the evidence before it the limit of Earle Pasquill's enrichment since January 2008 was less than $400,000 and that "the bulk of the $21.7 million was used for the benefit of the FIC Group of companies". [31] In the Sanctions Decision the panel ordered that Earle Pasquill, Michael Lathigee and the three corporate respondents were jointly and severally liable to pay to the Commission $21.7 million pursuant to s. 161(1)(g) of the Act being the total amount obtained directly or indirectly as a result of their contraventions of the Act. [32] Both Earle Pasquill and Michael Lathigee were also ordered to pay an administrative penalty of $15 million. [33] Section 161(1)(g) of the Act provides: 161. (1) If the commission or the executive director considers it to be in the public interest, the commission or

the executive director, after a hearing, may order one or more of the following: (g) if a person has not complied with this Act, the regulations or a decision of the commission or the executive director, that the person pay to the commission any amount obtained, or payment or loss avoided, directly or indirectly, as a result of the failure to comply or the contravention; [34] Earle Pasquill and Michael Lathigee obtained leave to appeal the Commission's s. 161(1)(g) enforcement order to the Court of Appeal. [35] In the Appeal, Earle Pasquill and Michael Lathigee, who did not personally "obtain" the $21.7 million (which was instead used to benefit the FIC Group), asked the Court of Appeal to determine whether s. 161(1)(g) requires that the "amount obtained" be obtained by the person against whom the order is made and also whether the section permits joint and several orders. [36] In Poonian, in deciding those questions, MacKenzie J.A. for the Court of Appeal held: 1) At para. 100 that: the phrase "any amount obtained" refers to amounts obtained directly or indirectly by the person who is to pay pursuant to the order, because the person contravened the Act. The fact that "amount obtained" must also be causally connected to ("as a result of") the contravention (or failure to comply) of the person further supports this interpretation as the consistent, plain, and ordinary meaning.

[Emphasis of MacKenzie J.A.] and; 2) At paras. 125 to 126 that: [125] The Executive Director here, for example, submits the Poonians and Sihotas were each found to have been "directly involved in and contributed to" the market manipulation scheme (Poonian Sanctions at paras. 82-83). This finding is not challenged on appeal. Therefore, the Executive Director contends they all acted in concert with the common purpose of perpetrating the manipulation scheme, which supports the propriety of a joint and several disgorgement order against them, as was the case in Limelight. [126] Respondents cannot be held jointly and severally liable for a s. 161(1)(g) order purely on the basis they acted in concert with the common purpose of breaching the Act. This is because the language of s. 161(1)(g) requires the disgorged amount to be obtained, directly or indirectly, by the person. Acting jointly is not synonymous with obtaining amounts, directly or indirectly. As I will explain below, however, having direction and control over another respondent or entity may constitute indirect obtainment. [Emphasis of MacKenzie J.A.] [37] Notwithstanding those conclusions the Court of Appeal dismissed the Appeal. In doing so the Court determined (at para. 130) that by establishing a link in s. 161(1)(b) between the "amount obtained" by the person subject to the order by using the works "directly or

indirectly" modifying "obtained", the Legislature ensured that the purpose of the section was not frustrated by complex schemes. [38] Justice MacKenzie went on to say at para. 131: [131] In my view, the use of these explicit words indicates that the amount need not be obtained directly by the person who has contravened the Act (who is also the person against whom the order to pay is made). In addition, it could be obtained indirectly. By using those words, the Legislature intended "amount obtained" to capture amounts the wrongdoer obtained through indirect means (e.g., through agents, nominees, alter egos), as opposed to direct means (i.e., where the money is received directly into that wrongdoer's "pockets" or accounts). This is especially operative in certain types of wrongdoing such as illegal distributions (e.g., non-exempt trading without prospectus or registration) where, by the nature of the activity (fundraising), the money flows not to the wrongdoer (e.g., the promoter), but to some other entity (e.g., the corporate issuer of securities). If s. 161(1)(g) is to function properly and achieve its goal of deterrence by the divesting of ill-gotten amounts, then the amounts obtained by the issuer must also be capable of being disgorged. [39] In result, in respect of the Commission's findings of liability and imposition of sanctions upon Earle Pasquill and Michael Lathigee

under s. 161(1)(g), MacKenzie J.A. concluded (at paras. 157 to 162) that: [157] Whether the corporate entity was initially created for a fraudulent purpose or later became a vehicle for fraud does not change the fact that the corporate entity, controlled and directed by the individual wrongdoers, was a vehicle for fraud. The critical finding is that these entities obtained funds as a result of the fraud, and the individuals controlling and directing them received the funds indirectly. [158] Lathigee and Pasquill also contend that some of the funds fraudulently raised were used for their intended purpose (i.e., invested in the advertised opportunities). I cannot sustain this argument. While some of the funds may have been used for their intended purpose, the fact they were raised by fraudulent misrepresentations or omissions is what constitutes the contravention. [159] As to the receipt of the funds by the corporate, and not the personal, entities, this argument founders when one considers the economic reality of raising capital. It is the nature of fraudulent fundraising that funds raised are received (obtained) by the corporate vehicle, and not the personal fraudster. Indeed, the entire transaction is the exchange for money of securities of the issuer. The money goes to the issuer, not to the individual. An interpretation sensitive to economic reality would hold jointly and severally liable the fraudster and the vehicle he was found to have directed and controlled for the amounts they received because the fraudster had indirectly received those funds. [160] The Commission found as a fact that Lathigee and Pasquill had jointly directed and controlled the relevant FIC Group entities that raised (obtained) the money: Lathigee Liability at para.

5. This factual finding is not challenged on appeal, and I see no reason to disturb it. [161] Therefore, the Commission found that each of Lathigee and Pasquill had "obtained" the offering "amount", albeit indirectly through certain FIC Group entities they directed and controlled. This accords with the decision in Michaels because Lathigee and Pasquill and their corporate entities were "effectively one person". [162] On that basis, I consider it was appropriate and within the scope of s. 161(1)(g) to make the joint and several order for the full offering amount. [40] No steps were taken by the Commission to collect on the $21.7 million Sanctions Decision award against Earle Pasquill and Michael Lathigee that had been confirmed by the Court of Appeal in Poonian in May 2017 until after the Vancouver Sun published an article on November 17, 2017 under the headline "Hundreds of Millions in Penalties issued by the B.C. Securities Commission Going Unpaid". [41] That article specifically addressed the uncollected fines levied against Earle Pasquill and set out information concerning Vicki Pasquill's ownership of her various valuable real estate assets in Vancouver. [42] Shortly after that article the British Columbia Minister of Finance issued a written statement concerning the Commission's collection record. [43] In that statement (reported in the Vancouver Sun on November 21, 2017)

the Minister stated, amongst other things, that the Government would "encourage any proposals" from the Commission "on any new mechanisms they may need to collect the fines they issue under the B.C. Securities Act." [44] After those developments the Commission took steps to enforce the orders it had made against Earle Pasquill and Michael Lathigee as follows: 1) In March 2018 the Commission commenced proceedings against Michael Lathigee in Nevada (where he lives) to enforce the $21.7 million Judgment. In doing so the Commission filed a declaration under Nevada's Uniform Foreign-Country Monetary Judgment Recognition Act, NRS 17.770 declaring that the order made by the Commission and filed as a judgment of this Court is final, conclusive and enforceable.

2) On August 9, 2018 the Commission commenced the Collection Action against Earle Pasquill and Vicki Pasquill, and later added Vicker Holdings Ltd. as a defendant, and, as noted above, as security for the relief it sought in the Collection Action filed the CPLs against the titles to the seven real estate properties in British Columbia owned by Vicki Pasquill and Vicker Holdings Ltd. having an assessed value of $20.4 million. [45] On October 28, 2019 Vicki Pasquill and Vicker Holdings Ltd. filed an application to set aside the CPLs returnable on November 18 and 19, 2019. [46] That application, brought on the basis of hardship and inconvenience, also included allegations that the pleadings in the Collection Action failed to disclose a cause of action and constituted abuse of process. [47] Those applications were however, at the request of the Commission, adjourned to February 2020 to, among other things, allow it time to consider the potential impact of proposed amendments to the Act which had passed third reading on October 31, 2019. [48] Negotiations next ensued with respect to the release of the CPLs filed against four properties owned by Vicki Pasquill because of hardship and inconvenience. [49] On November 28, 2019 the amendments to the Act upon which the Commission relies in seeking to further amend its Notice of Civil Claim received Royal Assent. [50] On December 12, 2019

Vicki Pasquill and Vicker Holdings Ltd. commenced the Tort Action alleging abuse of process by the Commission in pursuing the Collection Action and in the filing of the CPLs. [51] On December 16, 2019 agreement was reached to allow the temporary release of the CPL filed against one of Vicki Pasquill's properties on the basis of hardship and inconvenience to allow refinancing in the amount of $1.1 million. [52] The balance of Vicki Pasquill and Vicker Holdings Ltd.'s application to set aside the CPLs and to strike the pleadings in the Collection Action was then adjourned to February 14, 2020. [53] Before these applications were heard the Commission served counsel for Vicki Pasquill and Vicker Holdings Ltd. with an application to strike their pleadings in the Tort Action that was set for a five-day hearing from April 6 to 10, 2020. [54] All of the competing applications were then adjourned to the April 6, 2020 hearing date. [55] However, because of the closure of all courthouses in the Province on March 18, 2020 due to the Covid‑19 pandemic all of those applications were then adjourned generally. [56] On March 27, 2020 the amendments to the Act came into force. [57] On October 19, 2020 the Commission filed an application to amend its Notice of Civil Claim in the Collection Action (now for the third time) to seek relief based upon those amendments.

DISCUSSION AND ANALYSIS [58] All of the competing outstanding applications in the Collection Action and the Tort Action were heard from January 11 to 15, 2021, and are now before the Court for determination. ISSUE #1: Applications by Vicki Pasquill and Vicker Holdings Ltd. to strike the Commission's Second Amended Notice of Civil Claim in the Collection Action [59] The Commission does not dispute that the applications by Vicki Pasquill and Vicker Holdings Ltd. to strike the Commission's Second Amended Notice of Civil Claim in the Collection Action should be determined based upon the pleadings as they presently stand without reference to the Commission's application to further amend its Second Notice of Civil Claim to plead the new statutory causes of action created by the amendments to the Act. [60] Vicki Pasquill and Vicker Holdings Ltd.'s application to strike the Commission's Second Amended Notice of Civil Claim as disclosing no reasonable cause of action relies upon Rule 9-5(1)(a). In the alternative, the applicants apply to strike the Second Amended Notice of Civil Claim under Rule 9-5(1) (d). [61] Rules 9-5(1)(a) and (d) provide: (1) At any stage of a proceeding, the court may order to be struck out or amended the whole or any part of a pleading, petition or other document on the ground that (a) it discloses no reasonable claim or defence, as the case may be, (d) it is

otherwise an abuse of the process of the court, and the court may pronounce judgment or order the proceeding to be stayed or dismissed and may order the costs of the application to be paid as special costs. [62] Rule 9-5(2) provides that no evidence is admissible on an application under sub-rule 9-5(1) (a). [63] Vicki Pasquill and Vicker Holdings Ltd. assert that the Second Amended Notice of Civil Claim discloses no reasonable claim and must accordingly be struck because: 1) The Commission may only exercise the powers expressly conferred upon it by the Act or those implicitly necessary to accomplish its statutory mandate and none of those powers apply in the present circumstances.

2) Registration of the $21.7 million Judgment awarded under the Sanctions Decision as a judgment of this Court merged with and extinguished the underlying action including all alternative remedies that may have been sought in the underlying action.

3) The specific declaratory relief sought by the Commission upon which the equitable remedies advanced by it against Vicki Pasquill and Vicker Holdings Ltd., are based is not available to the Commission.

4) The Commission's equitable claims against Vicki Pasquill and Vicker Holdings Ltd., as well as the fraudulent preference and fraudulent conveyance claims pleaded by it, are bound to fail. [64] I will address in turn each of those bases upon which the applicants rely. [65] In order to do so, given the length and complexity of the Commission's pleadings, I have for ease of reference and completeness, attached as Appendix A to these reasons a copy of Parts 1, 2 and 3 of the Commission's Second Amended Notice of Civil Claim.

1) Does the Commission have Statutory Authority to bring and maintain the Collection Action? [66] The applicants submit that the Commission may only exercise the powers expressly conferred upon it by the Act or those implicitly necessary to accomplish its statutory mandate. They submit that none of those powers authorize the claims made by the Commission against Vicki Pasquill or Vicker Holdings Ltd. in the Collection Action so that those claims are made without jurisdiction and must be dismissed. [67] In making those submissions the applicants rely upon their status as strangers to the proceedings against Earle Pasquill that gave rise to and resulted in the Sanctions Decision against him upon which the $21.7 million Judgment now sought to be enforced against them is based. [68] Before considering those submissions in detail I must observe that I am satisfied that those statutory authority and jurisdictional submissions cannot apply to all of the legal bases for relief sought by the Commission in its Second Amended Notice of Civil Claim in the Collection Action. [69] That is so because in its Second Amended Notice of Civil Claim the Commission alleges facts and seeks relief against Vicki Pasquill and Vicker Holdings Ltd. that engage creditor's remedies principles that are available to judgment creditors whose recovery of a debt due and owing to them is defeated or hindered by

third parties by means of conduct amounting to fraudulent preference or fraudulent conveyance. [70] Those fraudulent preference and fraudulent conveyance allegations and the relief sought as a consequence of those allegations arise solely from the Commission's right to enforce payment of the $21.7 million Judgment against Earle Pasquill. While I will later discuss those causes of action in some detail when considering the applicants' submission that they are bound to fail, those pleadings are not engaged by the applicants' allegations of lack of statutory authority or jurisdiction. [71] Concerning their allegations of lack of statutory authority and jurisdiction Vicki Pasquill and Vicker Holdings Ltd. rely upon ATCO Gas and Pipelines Ltd. v. Alberta (Energy and Utilities Board), 2006 SCC 4 [ATCO] in which at paras. 35 and 38 Bastarache J. for the majority wrote: 35 Administrative tribunals or agencies are statutory creations: they cannot exceed the powers that were granted to them by their enabling statute; they must "adhere to the confines of their statutory authority or 'jurisdiction'[; and t]hey cannot trespass in areas where the legislature has not assigned them authority": Mullan, at pp. 9-10 (see also S. Blake, Administrative Law in Canada (3rd ed. 2001), at pp. 183-84). 36 In order to determine whether the Board's decision that it had the jurisdiction to allocate

proceeds from the sale of a utility's asset was correct, I am required to interpret the legislative framework by which the Board derives its powers and actions. 2.3.1 General Principles of Statutory Interpretation 37 For a number of years now, the Court has adopted E. A. Driedger's modern approach as the method to follow for statutory interpretation (Construction of Statutes (2nd ed. 1983), at p. 87): Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. (See, e.g., Rizzo& Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 21; Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42, at para. 26; H.L. v. Canada (Attorney General), [2005] 1 S.C.R. 401, 2005 SCC 25, at paras. 186-87; Marche v. Halifax Insurance Co., [2005] 1 S.C.R. 47, 2005 SCC 6, at para. 54; Barrie Public Utilities, at paras. 20 and 86; Contino v. Leonelli-Contino, [2005] 3 S.C.R. 217, 2005 SCC 63, at para. 19.) 38 But more specifically in the area of administrative law, tribunals and boards obtain their jurisdiction over matters from two sources: (1) express grants of jurisdiction under various statutes (explicit powers); and (2) the common law, by application of the doctrine of jurisdiction

by necessary implication (implicit powers) (see also D. M. Brown, Energy Regulation in Ontario (loose-leaf ed.), at p. 2-15). [72] The applicants submit that the Act only expressly confers upon the Commission powers to initiate proceedings in this Court in relation to situations directly related to its regulation of the securities market. [73] They submit that none of the claims advanced by the Commission against Vicki Pasquill or Vicker Holdings Ltd. seeking compensation or restitution from them for the acts of Earle Pasquill are authorized by those regulatory powers. [74] That submission starts with the fact that the $21.7 million award against Earle Pasquill that the Commission not only seeks to enforce against him but also against Vicki Pasquill and Vicker Holdings Ltd. as a judgment was made against Earle Pasquill in the Commission proceedings as a consequence of his beaches of s. 161(1)(g) of the Act. [75] As to the Commission's lack of authority to seek compensation and restitution in this Court from them as a consequence of Earl Pasquill's breach of s. 161(1)(g), the applicants rely upon the fact that that section is not included in s. 155 of the Act as an offence that can be enforced in this Court. [76] More specifically, as to the Commission's claims against them for compensation and restitution arising from Earle Pasquill's breaches of s. 161(1)(g) of the Act the

applicants submit that ss. 155.1 and 157(1) (i) and (j) of the Act, precludes the pursuit of such claims against them in this Court. They say that any authority that may exist to make claims for compensation and restitution is limited to actions against Earle Pasquill, Michael Lathigee and those corporations comprising the FIC Group who were subject to the regulatory proceedings under the Act and against whom findings of liability were made and sanctions imposed. [77] In making those submissions the applicants rely upon a plain reading of those sections as they were in force when the Collection Action was commenced which provided: 155.1 If the court finds that a person has committed an offence under section 155, the court may make an order that (a) the person compensate or make restitution to another person, or 157 (1) In addition to any other powers it may have, if the commission considers that a person has contravened or is contravening a provision of this Act or of the regulations, or has failed to comply or is not complying with a decision, and the commission considers it in the public interest to do so, the commission may apply to the Supreme Court for one or more of the following: (i) an order that the person compensate or make restitution to any other person; (j) an order that the person pay general or punitive damages to any other person; [Emphasis added.] [78] The

applicants further submit that specifically with respect to proceedings against third parties, prior to the March 2020 amendments s. 162.1 of the Act provided that only in certain circumstances could the Commission demand payment from third parties. [79] Those circumstances were limited to situations in which a third party was indebted to a person who owed money to the Commission arising from that person's contravention of the Act or its regulations. [80] In those circumstances, payment by that third party to the Commission could result in a form of enforcement in the nature of set off by way of a reduction of the debt owed to the Commission by the offending party. [81] The specific circumstances in which such third party set off proceedings were then available were in relation to: administrative penalties; costs related to a Commission investigation; and, hearing fees and charges, none of which are applicable to the claims made by the Commission against Vicki Pasquill or Vicker Holdings Ltd. in the Commission's Second Amended Notice of Civil Claim. [82] Vicki Pasquill and Vicker Holdings Ltd. thus submit that the limited circumstances in which the Commission may commence proceedings in the Supreme Court of British Columbia and most significantly the exclusion of breaches of s. 161(1)(g) of the Act from compensation and restitution proceedings reflects the legislative intent to

limit the Commission's jurisdiction to pursue such claims in this Court. [83] The applicants say that because the legislature did not explicitly provide the Commission with the power to initiate proceedings by way of a Supreme Court action against third parties to recover amounts due to it under an enforcement order issued against a respondent to a Commission proceeding under s. 161(1)(g) (when the Act provided such power in other circumstances), application of the presumption of coherence in interpreting the Act's provisions must lead to the conclusion that the Commission had no power to commence its claims for compensation or restitution against them in the Collection Action. See: Ted Leroy Tucking Ltd. v. British Columbia (Minister of Revenue), 2008 BCCA 285 at para. 20. [84] I agree with that submission. [85] The applicants also submit that the Court of Appeal's decision in Poonian further precludes any conclusion that the Act implicitly authorizes enforcement actions by the Commission against third parties to recover monies due to it by a respondent found to have breached s. 161(1)(g) of the Act. [86] They say that is so because, as noted above, at para. 100 in Poonian in considering the nature of orders under s. 161(1)(g) of the Act, MacKenzie J.A. concluded as a matter of statutory interpretation: the phrase "any amount obtained" refers to amounts obtained directly or

indirectly by the person who is to pay pursuant to the order, because the person contravened the Act. The fact that "amount obtained" must also be causally connected to ("as a result of") the contravention (or failure to comply) of the person further supports this interpretation as the consistent, plain, and ordinary meaning. [Emphasis of MacKenzie J.A.] [87] Vicki Pasquill and Vicker Holdings Ltd. thus submit that because they were not respondents to the Commission proceedings that gave rise to the findings against Earle Pasquill and there is no allegation that either of them took any step in contravention of the Act, Poonian precludes a determination that the Collection Action against them is implicitly authorized. [88] I also agree with that submission. [89] In response to the applicants' jurisdictional arguments the Commission submits that although the Commission was not itself defrauded by Earle Pasquill it is the "keeper of the statutory mechanism" that would see any funds collected on payment of its order under s. 161(1)(g) of the Act be made available to those who were defrauded. [90] The Commission thus submits that it is not a stranger between the wrongdoer and those who were defrauded because of its mandate to act in the public interest to protect investors and promote public confidence in the securities market in British Columbia, including by taking decisive action

to enforce orders issued by the Commission. [91] The Commission submits that its public interest mandate thus authorizes the Collection Action against Vicki Pasquill and Vicker Holdings Ltd. to recover funds it alleges they have received directly or indirectly from Earle Pasquill so that funds recovered will be available to be applied to the amounts Earle Pasquill has been ordered to pay under the Act and then be made available to investors defrauded by him. [92] I will address the substantive issues arising from the Commission's "keeper of a statutory mechanism" submissions later in these reasons when considering the specific causes of action it asserts, and the remedies it seeks, against Vicki Pasquill and Vicker Holdings Ltd. in its Second Amended Notice of Civil Claim. [93] However, as to the Commission's submission that its "public interest mandate" to recover funds owing to investors defrauded by Earle Pasquill provides the authority and jurisdiction to initiate and continue its claims in the Second Amended Notice of Civil Claim in the Collection Action against Vicki Pasquill and Vicker Holdings Ltd., I am satisfied that the submission must fail. [94] I reach that conclusion because in Poonian at paras. 112 and 113, in discussing the enforcement of orders made by the Commission under s. 161(1)(g) in the context of an argument by the Commission that because of its public

interest mandate it was not limited in its use of the statutory enforcement provisions engaged, the Court stated: [112] Section 161(1)(g) must be read in the context of its neighbours in ss. 161 and 162. As Stratas J.A. put it in Burchill v. Canada, 2010 FCA 145 at para. 11, referring to the Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.), "Subsection 56(1)(a)(i) does not stand in splendid isolation in the Act; rather, it is part of an interconnected web of provisions." Section 161(1)(g) must be recognized as one in a list of enforcement tools open to the Commission. The Commission has a broad arsenal of sanctions to enable it to discharge its public interest mandate. Each tool, however, takes a specific form to achieve a specific purpose. Disgorgement is a specific tool, and the Commission must not, in the name of the public interest, use that tool in such a way as to extend it beyond its specific, permissible purpose. Its purpose is to prevent wrongdoers from retaining amounts obtained from their wrongdoing. It is not to punish or compensate, although those aims are achievable by other means in the Act, or in conjunction with other sections of the Act. [113] In my view, the suggestion that limiting the scope of s. 161(1)(g) conflicts with the Act's overarching protective goal erroneously conflates the discrete and recognized purposes of a s.161(1)(g) "disgorgement" order with

the general purposes of the Act overall, which are achieved by the availability of the vast array of different enforcement tools employable in concert. This interpretation is not disharmonious with the remedial and protective nature of the Act. Instead, it recognizes that the Act's overarching goals are achieved by a host of specific measures, which themselves may have different purposes and be informed by different principles (e.g., punishment, compensation, specific and general deterrence, removal of incentives for non-compliance, etc.). Indeed, the Commission's public interest jurisdiction is not punitive, as the Court noted in Committee for the Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities Commission), 2001 SCC 37: [42] I agree with Laskin J.A. [(1999), 43 O.R. (3d) 257] that "[t]he purpose of the Commission's public interest jurisdiction is neither remedial nor punitive; it is protective and preventive, intended to be exercised to prevent likely future harm to Ontario's capital markets" (p. 272). It is also consistent with the objective of regulatory legislation in general. The focus of regulatory law is on the protection of societal interests, not punishment of an individual's moral faults [95] I find that the Commission's public interest mandate does not empower it to make the claims advanced by it against Vicki Pasquill or Vicker Holdings Ltd.

in the Collection Action other than in compliance with the specific tools available to it under the Act. [96] Since I have found that the disgorgement remedies authorized under s. 155.1(a) and (b) and under s. 157(1) (i) and (j) of the Act do not authorize the restitution or compensation claims advanced by the Commission against Vicki Pasquill and Vicker Holdings Ltd. for moneys owed by Earle Pasquill to the Commission by reason of s. 161(1)(g) of the Act, it follows that (except with respect to the specific creditor's remedies pleadings that I have addressed above), the pleadings in the Second Amended Notice of Civil Claim against Vicki Pasquill or Vicker Holdings Ltd. based upon restitution and compensation for Earle Pasquill's regulatory delicts must be struck as disclosing no reasonable claim. [97] Notwithstanding that conclusion, however, given the complexity of the issues involved in the competing applications in both the Collection Action and the Tort Action and the overlap that exists in respect of the two proceedings, as well as the fact that they were fully argued and may impact the future conduct of both proceedings, I have decided to address the other issues raised under Rule 9-5(1)(a) by Vicki Pasquill and Vicker Holdings Ltd. in asserting that pleadings in the Second Amended Notice of Civil Claim in the Collection Action should be struck as disclosing no reasonable claim.

2) Did registration of the $21.7 million Judgment awarded under the Sanctions Decision as a judgment in the Supreme Court of British Columbia merge with and extinguish the underlying action including alternative remedies that may have been sought in the underlying action? [98] Vicki Pasquill and Vicker Holdings Ltd. submit that the effect of the Commission's registration of the $21.7 million Judgment on April 1, 2015 pursuant to Rule 17.1 renders the Court functus officio as to the matters underlying it. They submit that upon registration the cause of action merges in the judgment so that it ceases to exist and cannot be revived. [99] In making those submissions the applicants rely upon the decision of the Supreme Court of Canada in Paper Machinery Ltd. et al v. J.O. Ross Engineering Corp. et al, [1934] S.C.R. 186, in which the respondent applied for a re‑hearing of an appeal to amend an appeal judgment that had "been drawn up and properly entered". [100] In determining whether the Court had the power to do so Rinfret J. wrote at page 188: In such a case, the rule followed in England is, we think,-and we see no reason why it should not also be the rule followed by this Court- that there is no power to amend a judgment which has been drawn up and entered, except in two cases: (1) Where there has been a slip in drawing it up, or (2) Where there has been error in expressing the

manifest intention of the court (In re Swire (1); Preston Banking Company v. Allsup & Sons (2) ; Ainsworth v. Wilding (3)). In a very recent case (MacCarthy v. Agard (4)), the authorities were all reviewed and the principle was re-asserted. In that case, although, in-deed, all the judges expressed the view that the circum­stances were particularly favourable to the applicant, but because neither of the conditions mentioned were present, the Court of Appeal came to the conclusion that it had no power to interfere. [101] The applicants also rely upon the decision of our Court of Appeal in Prairie Hydraulic Equipment Ltd. v. Everest Equipment Inc., 1998 CanLII 6426 at paras. 32 and 33 in which Southin J.A. stated: [32] Res judicata and its two related doctrines of issue estoppel, and the rule in Henderson v. Henderson (1843), 3 Hare 100, which generally limits a litigant to one action founded on a particular set of facts, are founded upon two principles usually stated by their Latin maxims: (1) Interest reipublicae ut sit finis litium; (2) Nemo debet bis vexari. [33] The essence of the first doctrine is that upon judgment the cause of action merges into the judgment and thus ceases to exist and cannot be revived. It applies as much to consent judgments as to judgments upon a contested action. [Emphasis added.] [102] Also, in McIntosh v. Parent, [1924] 4 D.L.R. 420 (Ont. S.C.

(A.D.)) Middleton J.A. in discussing the doctrine of merger by judgment wrote at page 423: The other doctrine is often discussed under the maxim nemo debet bis vexari, or as merger by judgment, or splitting of a cause of action, and makes it obligatory upon a plaintiff asserting a cause of action to claim all his relief in respect thereto, and prevents any second attempt to invoke the aid of the courts for the same cause, for on his first recovery his entire cause of action has become merged in his judgment and is gone for ever. This is clearly stated by Parke, B., in the leading case of King v. Hoare (1844), 13 M. & W. 494, at p. 504: " If there be a breach of contract, or wrong done, or any other cause of action by one against another, and judgment be recovered in a court of record, the judgment is a bar to the original cause of action, because it is thereby reduced to a certainty, and the object of the suit attained, so far as it can be at that stage; and it would be useless and vexatious to subject the defendant to another suit for the purpose of attaining the same result. Hence the legal maxim, transit in rem judicatam -- the cause of action is changed into matter of record, which is of a higher nature, and the inferior remedy is merged in the higher." One consequence is that an action against one of several tort-feasors will bar recovery against the others, so absolutely

is the original cause of action gone. [103] Specifically, in relation to awards by tribunals, the applicants rely upon Spencer, Bower and Handley, Res Judicata, 4th ed. 2009 at page 267 in which it is stated: A person in whose favour an English judicial tribunal of competent jurisdiction has pronounced a final judgment, is precluded from recovering before any English tribunal a second judgment on the same cause of action. The principle extends to awards by competent tribunals. A plea of former recovery is distinguishable from one of res judicata estoppel. The latter prohibits contradiction, the former reassertion. [104] The text further explains the rationale for the doctrine at page 268: The doctrine of former recovery has been justified on three grounds, two of which apply to res judicata estoppel. Firstly, the general interest of the community in the termination of disputes between litigants: interest reipublicae ut sit finis litium. Second, the interest of the individual litigant in the termination of disputes: nemo debet bis vexari pro una et eadem causa, regardless of the apparent merits of the second claim. The third, merger, only applies to the doctrine of former recovery. Any cause of action for which judgment is given by an English judicial tribunal merges in that judgment: transit in rem judicatam. [105] The applicants submit that the doctrine operates in this case

to preclude the claims now advanced by the Commission against them because of the provisions of ss. 163(1) and (2) of the Act which state: 163 (1) If the commission has made a decision under section 161 or 162, or if the executive director has made a decision under section 161, the commission or the executive director, as applicable, may file the decision at any time in a Supreme Court registry by filing a certified copy of the decision. (2) On being filed under subsection (1), the decision has the same force and effect, and all proceedings may be taken on it, as if it were a judgment of the Supreme Court. [106] Vicki Pasquill and Vicker Holdings Ltd. also submit that the Commission's actions in relying upon the registration of the Sanctions Decision as a judgment of this Court and after affirming and representing in the Nevada action against Michael Lathigee that the $21.7 million Judgment is "final, conclusive and enforceable" under the laws of the State of Nevada preclude it from now asserting new causes of action against the defendants in the Collection Action. [107] In response to the applicants' submissions on the doctrine of merger by judgment the Commission submits that registration of the Sanctions Decision under s. 163 of the Act does not convert the Sanctions Decision into a judgment of this Court. [108] In Fraser v. Victoria City Police Department, 1990 CanLII 2036

(B.C.C.A.) [Fraser] the Court considered the effect of the registration provisions under s. 17(4) of the Human Rights Act, S.B.C. 1984, c. 22. [109] At page 7 the Court stated: Section 17(4) [of the Human Rights Act] says that "the order has the same force and effect, and all proceedings may be taken on it, as if it were a judgment of that court". The emphasis (which I have added) is on enforceability. The order is still an order of the tribunal which made it, but for enforcement purposes it has the same force and effect as if it were an order of the court. [110] The Commission submits that the doctrine of merger by judgment does not preclude the bringing of the causes of action against Vicki Pasquill and Vicker Holdings Ltd. asserted in its Second Amended Notice of Civil Claim because the criteria necessary to exhaust a cause of action have not been met. [111] As to those criteria the Commission relies upon the decision of the Alberta Court of Appeal in Sherwood Steel Ltd. v. Odyssey Construction Inc., 2014 ABCA 320 [Sherwood Steel] at para. 19 in which, relying on the decision of the Supreme Court of Canada in Grandview v. Doering, [1976] 2 S.C.R. 637, the Court stated: 19 When is a cause of action exhausted (or "merged" into the prior judgment)? In Grandview, the Supreme Court identified four criteria (at 630-39), which have been summarized as follows: (1) There must be a

final decision of a court of competent jurisdiction in the prior action; (2) The parties to the subsequent litigation must have been parties to or in privy [sic] with the parties to the prior action [mutuality]; (3) The cause of action in the prior action must not be separate and distinct; and (4) The basis of the cause of action and the subsequent action was argued or could have been argued in the prior action if the parties had exercised reasonable diligence. (Bjarnarson v. Manitoba (1987), 21 CPC (2d) 302 at 304, 38 DLR (4th) 32 (MBQB), aff'd (1987) 21 CPC (2d) 302 at 309, 45 DLR (4th) 776 (MBCA).) [112] Although the Commission submits that none of those criteria apply to exhaust the causes of action asserted against Vicki Pasquill and Vicker Holdings Ltd. I have concluded it is not necessary to examine its arguments in respect of each criteria. [113] I say that because I am satisfied that the absence of the necessity for a mutuality of parties in both the Securities Proceedings and the Collection Action, as well as the fact that the causes of action now asserted by the Commission against Vicki Pasquill and Vicker Holdings Ltd. could not have been brought in the Securities Proceedings, precludes application of the doctrine of merger by judgment. [114] More specifically, the fact that the Commission's Executive Director did not allege that either Vicki Pasquill or Vicker

Holdings Ltd. contravened s. 57(b) of the Act or participated in the fraud committed by Earle Pasquill renders the causes of action alleged against them separate and distinct from the matters and parties that could properly have been before the Commission in the Securities Proceedings. [115] I also find that the actions of the Commission in relying upon s. 163 of the Act and its registration of the $21.7 million Judgment as being "final, conclusive and enforceable" in its proceedings against Michael Lathigee in the State of Nevada does not bar the Commission from bringing claims and seeking remedies against Vicki Pasquill and Vicker Holdings Ltd. in the Collection Action. [116] I say that because I am satisfied that the actions taken against Michael Lathigee in Nevada are, in substance, enforcement proceedings that, as explained in Fraser, would not otherwise be available to the Commission as an administrative tribunal. [117] In result, I find that Vicki Pasquill and Vicker Holdings Ltd. have not established that the Commission's claims against them in the Second Amended Notice of Civil Claim in the Collection Action are precluded by operation of the doctrine of merger by judgment.

3) Is the declaratory relief sought by the Commission upon which the equitable remedies advanced against Vicki Pasquill and Vicker Holdings Ltd. available to the Commission? [118] At paras. 6 to 8 of the Second Amended Notice of Civil Claim in the Collection Action the Commission includes in Part 1 (Statement of Facts) excerpts of findings made against Earle Pasquill by the Commission in the Liability Decision. [119] Emphasized in those pleadings at para. 6 is the statement that the Commission found that Earle Pasquill perpetrated "a fraud (the "Fraud") contrary to section 57(b) of the Act" between February and August 2008. [120] At para. 30 in Part 2 (Relief Sought) of its Second Amended Notice of Civil Claim the Commission then seeks: 30. As against Earle Douglas Pasquill: (a) a declaration that the Sanctions Decision arose out of fraud, misappropriation, or defalcation contrary to the Securities Act; (b) a tracing in equity and common law, of the Proceeds of Fraud; and (c) to the extent that any of the Proceeds of Fraud were used to purchase or can be traced into them, a declaration that Mr. Pasquill holds any and all funds, monies, investments, chattels, including motor vehicles, or other property or assets of whatever kind in trust for and as trustee of the Commission to the extent of his indebtedness to the Commission; and [121] Also, at paras. 31 and 32 the Commission

seeks additional declaratory relief against some or all of the defendants, related to and derived from the Commission's findings of fraud. [122] Rule 20-4 provides: Declaratory order (1) A proceeding is not open to objection on the ground that only a declaratory order is sought, and the court may make binding declarations of right whether or not consequential relief is or could be claimed. [123] Vicki Pasquill and Vicker Holdings Ltd. submit that the Rule does not apply in this case because the Commission does not seek a declaration of right. They submit that what the Commission asks the Court to do by way of declaratory relief is to bind Vicki Pasquill and Vicker Holdings Ltd. to findings of fraud against Earle Pasquill. [124] The findings of the Commission in the Liability Decision and the award in the Sanctions Decision are binding upon Earle Pasquill. The $21.7 million Judgment registered in this Court is also binding upon him. Those findings by the Commission thus serve no substantive purpose in relation to the claims against Earle Pasquill in the Collection Action. [125] The questions to be decided on this application are, however: 1) Whether the declaratory relief sought against Vicki Pasquill and Vicker Holdings Ltd. is available against them; and 2) If so, what substantive purpose that declaratory relief would serve in relation to the various causes of action alleged

against Vicki Pasquill and Vicker Holdings Ltd. [126] In assessing those issues, I have concluded that the declaratory relief sought by the Commission against Vicki Pasquill and Vicker Holdings Ltd. is not available as a matter of law and thus could serve no substantive purpose. [127] I say that because the Commission does not seek a declaration of an existing right. Rather, it seeks a declaration that past conduct was wrongful. [128] In Architectural Institute of British Columbia v. Lee's Design and Engineering (1979), 96 D.L.R. (3d) 385 (B.C.S.C.) at pages 429 to 430, in considering the availability of declaratory relief in that case Trainor J. stated: I have cited earlier the provisions of the Laws Declaratory Act by which the Court is charged with the responsibility of acting in each cause to grant such remedies as may resolve all matters completely and finally and to avoid a multiplicity of legal proceedings. Zamir, The Declaratory Judgment said, at p. 227: Closely related remedies (which are often claimed together with declaratory relief) consist of an implied declaration of the Plaintiff's right plus an order to the defendant to respect or give effect to this right. S.A. de Smith, in his Judicial Review of Administrative Action, said, at p. 387: ...the main factor conductive to an expansion of the role of the injunction in public law has been its close association with

the declaratory Judgment. It is quite common for injunctive and declaratory relief to be claimed in the same proceedings, and in such cases the courts tend to refrain from drawing a fine distinction between the permissible scope of the two remedies. Then, at p. 393, he says: In most of the situations where a court has power to award an injunction it has power to award a declaration also, but a declaration is less efficacious than an injunction, though it is occasionally more appropriate in the special circumstances of the case. Frequently a plaintiff seeks and obtains both an injunction and a declaration. There are numerous authorities cited to me that in the exercise of this discretion caution is the byword, but as plaintiff's counsel pointed out, those cases largely turn on the question of whether declaratory relief should be granted in lieu of another form of relief which had been denied or was not available. As the rule itself says, the right to a declaratory order does not depend on whether or not consequential relief is or could be claimed, but of course the existence of consequential relief may well be a significant factor in the exercise of the discretion. In Fremont Cannery Co. v. Wall & Fine Foods of Can. Ltd., [1941] 3 D.L.R. 96 at p. 102, [1941] O.R. 379; (1941), 3 D.L.R. 96, at p. 403 Robertson, C.J.O. said: ...I think a claim for a declaration of right under s.

15(b)...must state what right is to be declared, and a declaration that certain action by the chairman of the meeting was wrongful and illegal is not in the proper sense a declaration of right, even if, to make it, it is necessary incidentally, to decide some right. In that instance the application for a declaration was refused. The defendants rely on that decision as authority that the rule refers to "declarations of right". Here too the declaration sought is one which seeks an order of the Court that certain past conduct is wrong rather than being a declaration of right. [My Emphasis.] [129] Similarly, in Rusche v. Insurance Corporation of British Columbia, [1992] CarswellBC 662 at para. 8, Catliff J. wrote: 8 Rule 5(22) [now Rule 20-4] allows the court to make binding declarations of right whether or not consequential relief is or could be claimed. The declaration must, however, be of a right and cannot be "that certain past conduct is wrong". (Architectural Institute of British Columbia v. Lee's Design and Engineering (1979), 96 D.L.R. (3d) 385 (B.C.S.C.) at p. 430.) [130] The declaratory relief sought by the Commission in its Second Amended Notice of Civil Claim is premised upon findings that the past conduct of Earle Pasquill was wrong. Such declaratory relief is not available as a matter of law. [131] Accordingly, the Commission's pleadings seeking to import its findings

against Earle Pasquill and others into the Collection Action as declarations of past wrongdoing by him as a foundation for the substantive claims against Vicki Pasquill and Vicker Holdings Ltd. discloses no reasonable claim and must therefore be struck. [132] I say that not only because of the nature of the declaration sought but also because neither Vicki Pasquill nor Vicker Holdings Ltd. were parties in the Commission proceedings and, as admitted by the Commission, could never have been parties in those proceedings. [133] I previously concluded that that the applicants' submissions that the underlying action was extinguished by the doctrine of merger by judgment fail in part because Vicki Pasquill and Vicker Holdings Ltd. were not parties to the Securities Proceedings. [134] That same lack of mutuality precludes the Commission from relying upon its conclusions in those proceedings to seek declaratory relief against strangers to the administrative process.

4) Are all causes of action pleaded by the Commission against Vicki Pasquill and Vicker Holdings Ltd. bound to fail? [135] Vicki Pasquill and Vicker Holdings Ltd. submit that none of the equitable claims advanced against them as pleaded in the Second Amended Notice of Civil Claim "amount to any cause of action at all, let alone one that the Commission has standing to pursue". [136] The applicants further submit that the Commission's unparticularized pleadings in respect of alleged transfers by Earle Pasquill of unspecified amounts of funds at unspecified times to Vicki Pasquill to defeat an expected debt to the Commission is "nothing but bald speculation". [137] Vicki Pasquill and Vicker Holdings Ltd. thus submit that all of the Commission's claims based upon express, constructive or resulting trust, knowing receipt, unjust enrichment as well as its allegations of fraudulent preference and fraudulent conveyance are "doomed to fail because the Commission fails to plead the requisite elements of the cause of action and cannot in good faith do so". [138] Those submissions require consideration and application of the principles that govern the striking of pleadings under Rule 9-5(1)(a) with respect to each of the causes of action alleged by the Commission against Vicki Pasquill and Earle Pasquill to determine whether any or all must be struck as being bound to fail. a) Claims that the applicants hold property on an express, resulting and/or constructive trust [139] In paras. 37 to 40 of the Second Amended Notice of Civil Claim the Commission alleges that: 37.

33. Ms. Pasquill knowingly used or accepted the use, and caused Vicker to use or accept the use, of some or all of the Proceeds of Fraud for (i) the purchase, (ii) the betterment, improvement and maintenance of the Properties including in respect of payment of taxes, holding costs and other levies, or (iii) to service the mortgage debt on the Properties, through which she was and/or Vicker were able to acquire equity in the Properties, directly or indirectly. 38.

34. In the circumstances, Ms. Pasquill and Vicker each holds her their interest in the Properties, or a portion thereof, , on an express, resulting or constructive trust in favour of the Commission, to the extent that the Proceeds of Fraud can be traced, either directly or indirectly through payment of holding costs, into the Properties. 39.

35. Mr. Pasquill and Mrs. Pasquill, directly and through Vicker, also knowingly used the Proceeds of Fraud to purchase, maintain and grow the Secondary Assets. 40.

36. In the circumstances, Mr. Pasquill and., Ms. Pasquill and Vicker hold their interest in the Secondary Assets on an express, resulting or constructive trust in favour of the Commission, to the extent that the Proceeds of Fraud can be traced into the Secondary Assets. 41.

37. In the alternative, Ms. Pasquill has and Vicker have been unjustly enriched by knowing receipt of the Proceeds of Fraud, without juristic reason. The Commission claims against Ms. Pasquill and Vicker for unjust enrichment arid monies had and received. 42.

38. In the further alternative, to the extent that Mr. Pasquill made any of the Fraudulent Dispositions after March 1, 2012, such transfers were made with the intention to defeat, delay, or hinder the Commission's just and lawful remedies, both on its own behalf or on behalf of investors, and as such, the transfer is void and of no effect as against the Commission. 43.

39. The Commission pleads and relies on the Fraudulent Conveyance Act, R.S.B.C. 1996, c. 163 and, to the extent that Ms. Pasquill had any claim as against Mr. Pasquill, the Fraudulent Preference Act, R.S.B.C. 1996, c. 164. [140] In its pleadings the Commission described or defined terms referred to in paras. 37-43 of its Second Amended Notice of Civil Claim as follows: 1) "the Proceeds of Fraud" (from para. 14) which alleges: 14. 13 -Ms. Pasquill knew or ought to have known of Mr. Pasquill's wrongful, conduct and breach of trust, and specifically, that monies earned by or paid to Mr. Pasquill from FIC Group, and then subsequently transferred or paid to Ms. Pasquill and/or Vicker, represented the proceeds of the Fraud (the "Proceeds of Fraud"), 2) "the Fraud" (from para. 6) which alleges: 6.

5. In a decision dated July 8, 2014 (the "Liability Findings"), the Commission found that Mr. Pasquill, together with others, perpetrated a fraud (the "Fraud"), contrary to section 57(b) of the Act when, between February and August 2008, the FIC Group: (a) raised $21.7 million from 698 investors without disclosing to those investors important facts about FIC Group's financial condition; and (b) raised $9.9 million from 331 investors for the purpose of investing in foreclosure properties, and instead used most of the funds to make unsecured loans to other FIC Group companies, the proceeds of which were used at least in part to pay salaries and other overhead expenses of the FIC Group. 3) "the Properties" (from para. 15) being collectively the seven properties described therein, against the title to each of which the Commission has filed Certificates of Pending Litigation; and 4) "the Secondary Assets" (from para. 24) which alleges: 24.

19. Mr. Pasquill and Ms. Pasquill also knowingly used the Proceeds of Fraud to purchase, in whole or in part for their own direct or indirect benefit, various assets, investments, registered retirement savings plans, chattels, including motor vehicles, and services (the "secondary Assets"), the particulars of which are presently unknown to the Commission. [141] Vicki Pasquill and Vicker Holdings Ltd. submit that the Commission's claims based upon its allegations that they hold interests in "the Properties" or the "Secondary Assets" on an "express, resulting or constructive trust" must be struck because the Commission has not and could not plead any facts that could give rise to any such trusts. [142] More specifically as to each of the trusts alleged: 1) Relying upon Creyke v. Creyke, 2016 BCCA 499 at para. 51 and Fellowship Deaconry Association of British Columbia v. Fellowship Deaconry, Inc., 2019 BCSC 1476 at para. 58, Vicki Pasquill and Vicker Holdings Ltd. submit that any claim to an express trust must fail because there is not and cannot be any suggestion that Earle Pasquill or any other party transferred money to them with the intention that it be held for the benefit of the Commission.

2) Relying upon Rascal Trucking Ltd. v. Nishi, 2011 BCCA 348 at paras. 32 and 33, Vicki Pasquill and Vicker Holdings Ltd. submit that any claim to a resulting trust must fail because there is not and cannot be any suggestion that the Commission originally transferred any property to them.

3) Relying upon Nouhi v. Pourtaghi, 2019 BCSC 794, Peter v. Beblow, [1993] 1 S.C.R. 980 and BNSF Railway Company v. Teck Metals Ltd., 2016 BCCA 350, Vicki Pasquill and Vicker Holdings Ltd. submit that any claim to a constructive trust, whether substantive or remedial, must fail because there is not and cannot be any suggestion that the Commission's own assets were in any way used to contribute to their properties or that there exists the requisite link between the Commission and those properties. [143] The applicants submit that the fundamental flaw in the Commission's pleadings is the assertion that any trust upon which Vicki Pasquill or Vicker Holdings Ltd. hold the alleged Properties or the Secondary Assets is actionable as a trust in favour of the Commission. They submit that that assertion is bound to fail because the Commission only has rights and status as a judgment creditor of Earle Pasquill and others, not as a beneficiary of any trust as alleged. [144] Although derivative claims of trust based upon allegations of fraudulent preference or fraudulent conveyance can be pursued by a judgment creditor such claims are founded upon allegations that third parties hold property in trust for the judgment debtor not directly for the judgment creditor. If successful, a fraudulent preference or fraudulent conveyance action will result in return of the property to the debtor where

it would then be available for execution by the judgment creditor. [145] The Commission submits that the trust claims it advances are not bound to fail because the equitable claims in breach of trust (as well as those of knowing receipt and unjust enrichment that I will next discuss) are consistent with "the nature of the Commission's mandate". [146] That submission is founded upon the proposition to which I earlier alluded that as a public interest regulator the Commission's ability to advance these equitable claims aligns with the public interest objectives in ss. 161(1) and 162 of the Act to promote honesty, protect investors and foster public confidence in capital markets. [147] More specifically, the Commission relies upon its statutory mandate under ss. 15 and 15.1 of the Act and Part 3 of the Regulations to make revenue paid under s. 161(1)(g) orders available to the investors who suffered direct pecuniary losses as a consequence of Earle Pasquill's fraud. [148] The Commission thus asserts that ss. 15 and 15.1 of the Act connect the Commission with the trust beneficiaries (the wronged investors) and the wrongdoer. [149] I am satisfied that the "connection" of the Commission to the investors who could be beneficiaries of a trust if they were able to establish that their monies were used by Earle Pasquill in breach of that trust does not serve to constitute the Commission

as a beneficiary who can enforce the alleged trust on behalf of those investors. The fact that the Act allows for payment to investors from monies recovered by the Commission from the wrongdoer does not act as an assignment of trust rights that are then actionable by the Commission as if the Commission was itself a beneficiary. [150] The Commission remains a judgment creditor of Earle Pasquill by reason of the order made by it under s. 161(1)(g) of the Act and is thus entitled to execute against his assets as a judgment creditor. It is not statutorily mandated to pursue claims in trust directly against the property of third parties as a trust beneficiary on behalf of investors without specific assignment of the rights of those investors. [151] I find that the Commission lacks jurisdiction or standing to advance the breach of trust claims it has advanced against Vicki Pasquill and Vicker Holdings Ltd. as pleaded in the Second Amended Notice of Civil Claim. Those claims must accordingly be struck. b) Claims based upon knowing receipt [152] The Commission's claims against the applicants as pleaded in paras. 38 and 40 of the Second Amended Notice of Civil Claim are founded upon allegations that Vicki Pasquill and Vicker Holdings Ltd. knowingly accepted or used some or all of "the Proceeds of Fraud" for the purchase, betterment, improvement or maintenance of "the Properties" and/or

the servicing of mortgage debts to acquire equity in them. [153] In Vancouver Coastal Health v. Moscipan, 2019 BCCA 17 at paras. 57 and 58 Goepel J.A. for the Court wrote: [57] The decisions in Citadel and Gold v. Rosenberg, [1997] 3 S.C.R. 767, which were released concurrently, remain the seminal decisions on knowing receipt. In Gold, Mr. Justice Iacobucci described the essence of a knowing receipt claim at paras. 41, 46 and 49: The essence of a knowing receipt claim is that, by receiving the trust property, the defendant has been enriched. Because the property was subject to a trust in favour of the plaintiff, the defendant's enrichment was at the plaintiff's expense. The claim, accordingly, falls within the law of restitution. As Denning J. said in Nelson v. Larholt, [1948] 1 K.B. 339, at p. 343: The right here is not peculiar to equity or contract or tort, but falls naturally within the important category of cases where the court orders restitution.... A stranger in receipt of trust property is unjustly enriched at the expense of the trust beneficiary. Participation in a fraudulent breach is irrelevant to the plaintiff's claim. Liability essentially turns on whether or not the defendant has taken property subject to an equity in favour of the plaintiff. The jurisprudence has long held that, in order to take subject to an equity, a person need not have actual knowledge of

the equity; notice will suffice. In my view, the same standard applies to cases of knowing receipt. Rather, the cause of action in knowing receipt arises simply because the defendant has improperly received property which belongs to the plaintiff. The plaintiff's claim amounts to nothing more than, "You unjustly have my property. Give it back." Unlike knowing assistance, there is no finding of fault, no legal wrong done by the defendant and no claim for damages. It is, at base, simply a question of who has a better claim to the disputed property. [58] Iacobucci J. concluded his discussion by setting out what a plaintiff must prove in order to recover the disputed property at para. 53: Therefore, to conclude my discussion of the applicable legal principles, in order to recover the disputed property, the plaintiff must prove the following: (1) That the property was subject to a trust in favour of the plaintiff; (2) That the property, which the defendant received, was taken from the plaintiff in breach of trust; and (3) That the defendant did not take the property as a bona fide purchaser for value without notice. The defendant will be taken to have notice if the circumstances were such as to put a reasonable person on inquiry, and the defendant made none, or if the defendant was put off by an answer which would not have satisfied a reasonable person. [154] The applicants submit

that, as with the trust claims advanced by the Commission, its knowing receipt claims must fail for lack of standing because there are no facts pleaded that, if true, could establish that any money was subject to a trust in favour of the Commission and because no property was taken from the Commission in breach of trust. [155] As to what the Commission must prove in order to sustain a claim in knowing receipt against Vicki Pasquill and/or Vicker Holdings Ltd., I find that: 1) The Properties were not subject to a trust in favour of the Commission. I have previously rejected the Commission's submissions that as a public interest regulator it is empowered by ss. 15 and 15.1 of the Act to effectively stand in the shoes of the investors of the FIC Group who were defrauded by Earle Pasquill and others to pursue claims in trust.

2) It follows that the Properties were not taken by Vicki Pasquill and/or Vicker Holdings Ltd. from the Commission in breach of trust. [156] The Commission has also acknowledged that neither Vicki Pasquill nor Vicker Holdings Ltd. was a participant in any of the activities of Earle Pasquill that gave rise to the findings of fraud against him upon which the Commission relies in seeking disgorgement from him. [157] For those reasons I have rejected the Commission's submissions with respect to its standing to pursue breach of trust claims as well as its substantive ability to do so I also reject the Commission's virtually identical submissions with respect to its "knowing receipt" allegations. Those pleadings must also be struck. c) Claims of unjust enrichment [158] In para. 41 of its Second Amended Notice of Civil Claim the Commission pleads, in the alternative to its breach of trust and knowing receipt allegations, that Vicki Pasquill and Vicker Holdings Ltd. "have been unjustly enriched by knowing receipt of the Proceeds of Fraud, without juristic reason" and claims against them for "unjust enrichment and monies wrongfully had and received". [159] In Kerr v. Baranow, 2011 SCC 10 at paras. 36 to 40 the Supreme Court of Canada addressed the elements of an unjust enrichment claim as follows: (1) Enrichment and Corresponding Deprivation [36] The first and second steps in the unjust

enrichment analysis concern first, whether the defendant has been enriched by the plaintiff and second, whether the plaintiff has suffered a corresponding deprivation. [37] The Court has taken a straightforward economic approach to the first two elements -- enrichment and corresponding deprivation. Accordingly, other considerations, such as moral and policy questions, are appropriately dealt with at the juristic reason stage of the analysis: see Peter, at p. 990, referring to Pettkus, Sorochan v. Sorochan, [1986] 2 S.C.R. 38, and Peel, affirmed in Garland v. Consumers' Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 31. [38] For the first requirement -- enrichment -- the plaintiff must show that he or she gave something to the defendant which the defendant received and retained. The benefit need not be retained permanently, but there must be a benefit which has enriched the defendant and which can be restored to the plaintiff in specie or by money. Moreover, the benefit must be tangible. It may be positive or negative, the latter in the sense that the benefit conferred on the defendant spares him or her an expense he or she would have had to undertake (Peel, at pp. 788 and 790; Garland, at paras. 31 and 37). [39] Turning to the second element -- a corresponding deprivation -- the plaintiff's loss is material only if the defendant has gained a benefit or been enriched (Peel,

at pp. 789-90). That is why the second requirement obligates the plaintiff to establish not simply that the defendant has been enriched, but also that the enrichment corresponds to a deprivation which the plaintiff has suffered (Pettkus, at p. 852; Rathwell, at p. 455). (2) Absence of Juristic Reason [40] The third element of an unjust enrichment claim is that the benefit and corresponding detriment must have occurred without a juristic reason. To put it simply, this means that there is no reason in law or justice for the defendant's retention of the benefit conferred by the plaintiff, making its retention "unjust" in the circumstances of the case: see Pettkus, at p. 848; Rathwell, at p. 456; Sorochan, at p. 44; Peter, at p. 987; Peel, at pp. 784 and 788; Garland, at para. 30. [160] Those elements were confirmed and further discussed in Moore v. Sweet, 2018 SCC 52 [Moore] at paras. 35 to 38 in which Cromwell J. writing for the Court stated: [35] Broadly speaking, the doctrine of unjust enrichment applies when a defendant receives a benefit from a plaintiff in circumstances where it would be "against all conscience" for him or her to retain that benefit. Where this is found to be the case, the defendant will be obliged to restore that benefit to the plaintiff. As recognized by McLachlin J. in Peel (Regional Municipality) v. Canada, [1992] 3 S.C.R. 762, at p. 788, "At the heart

of the doctrine of unjust enrichment . . . lies the notion of restoration of a benefit which justice does not permit one to retain." [36] Historically, restitution was available to plaintiffs whose cases fit into certain recognized "categories of recovery" -- including where a plaintiff conferred a benefit on a defendant by mistake, under compulsion, out of necessity, as a result of a failed or ineffective transaction, or at the defendant's request (Peel, at p. 789; Kerr, at para. 31). Although these discrete categories exist independently of one another, they are each premised on the existence of some injustice in permitting the defendant to retain the benefit that he or she received at the plaintiff's expense. [37] In the latter half of the 20th century, courts began to recognize the common principles underlying these discrete categories and, on this basis, developed "a framework that can explain all obligations arising from unjust enrichment" (L. Smith, "Demystifying Juristic Reasons" (2007), 45 Can. Bus. L.J. 281, at p. 281; see also Rathwell v. Rathwell, [1978] 2 S.C.R. 436, and Murdoch v. Murdoch, [1975] 1 S.C.R. 423, per Laskin J., dissenting). Under this principled framework, a plaintiff will succeed on the cause of action in unjust enrichment if he or she can show: (a) that the defendant was enriched; (b) that the plaintiff suffered a corresponding deprivation; and (c)

that the defendant's enrichment and the plaintiff's corresponding deprivation occurred in the absence of a juristic reason (Pettkus v. Becker, [1980] 2 S.C.R. 834, at p. 848; Garland, at para. 30; Kerr, at paras. 30-45). While the principled unjust enrichment framework and the categories coexist (Kerr, at paras. 31-32), the parties in this case made submissions only under the principled unjust enrichment framework. These reasons proceed on this basis. [38] This principled approach to unjust enrichment is a flexible one that allows courts to identify circumstances where justice and fairness require one party to restore a benefit to another. Recovery is therefore not restricted to cases that fit within the categories under which the retention of a conferred benefit was traditionally considered unjust (Kerr, at para. 32). As observed by McLachlin J. in Peel (at p. 788): The tri‑partite principle of general application which this Court has recognized as the basis of the cause of action for unjust enrichment is thus seen to have grown out of the traditional categories of recovery. It is informed by them. It is capable, however, of going beyond them, allowing the law to develop in a flexible way as required to meet changing perceptions of justice. [161] Vicki Pasquill and Vicker Holdings Ltd. submit that the Commission's claims are bound to fail because the Commission has not and

cannot reasonably in good faith plead that it has suffered any deprivation or other "wrong" justifying disgorgement. They submit that the funds allegedly received by Vicki Pasquill and Vicker Holdings Ltd. never belonged to the Commission and it therefore cannot be said that their alleged transfer "deprived" the Commission of anything. [162] In response, the Commission submits that application of the "flexible" approach to unjust enrichment discussed in Moore precludes a finding that its unjust enrichment claims are bound to fail because, if it is not permitted to advance the claims in this action, the Commission "is deprived of its ability to recover on its monetary sanctions and those funds are not available for investors under s. 15.1 [of the Act]. The wrongdoer retains the benefit of the wrong". [163] The Commission also submits that the "flexible" approach to unjust enrichment promotes judicial economy, efficiency and fairness to the investors and the defendants as well as the more specific public interest objectives of the Act. [164] I do not accept the Commission's submissions that the "flexible" approach discussed in Moore precludes a finding that its claims against Vicki Pasquill and Vicker Holdings Ltd. in unjust enrichment are bound to fail. [165] I say that because: 1) The Commission's claims are not capable of establishing the requirements of the first stage of the unjust enrichment analysis. For the same reason the Commission's trust claims against Vicki Pasquill and Vicker Holdings Ltd. are bound to fail, because any alleged enrichment of the applicants derived from monies of the investors, not those of the Commission.

2) The Commission's "deprivation" submission based upon the proposition that it will be deprived of an ability to recover on its monetary sanctions (against Earle Pasquill) must fail because in Poonian (at para. 76) the Court of Appeal specifically determined that the purpose of an order under s. 161(1)(g) of the Act is not compensatory. See also: Re Dhanani, 2018 BCSECCOM 31 at paras. 41 to 45.

3) The Commission's submission that the wrongdoer (Earle Pasquill) will retain the benefit of the wrong (the finding of fraud under s. 161(1)(g) of the Act) if its unjust enrichment claim is not allowed to proceed conflates the identity and status of Earle Pasquill as a judgment creditor with the identity and status of the applicants who were not, and as admitted by the Commission, could not have been parties to the administrative proceedings under the Act. [166] I find that the Commission lacks standing to advance its unjust enrichment claims against Vicki Pasquill and Vicker Holdings Ltd. and that as pleaded those claims are bound to fail. d) Fraudulent Preference and Fraudulent Conveyance claims [167] I have ruled that the Commission lacks statutory authority and jurisdiction to pursue many of the claims it has advanced against Vicki Pasquill and Vicker Holdings Ltd. [168] I excluded from those rulings the Commission's pleadings based upon allegations of the participation by those defendants in transactions to defeat, hinder or delay creditors. [169] Those allegations and the relief sought arise solely from the Commission's right to enforce payment of the $21.7 million Judgment against Earle Pasquill and do not engage issues of lack of statutory authority or jurisdiction. [170] The paragraphs in the Second Amended Notice of Civil Claim that specifically allege participation

by Vicki Pasquill and Vicker Holdings Ltd. in transactions to defeat, hinder or delay the Commission as a creditor of Earle Pasquill are paras. 14, 25, 31, 42 and 43. [171] Those pleadings state: 14. 13 -Ms. Pasquill knew or ought to have known of Mr. Pasquill's wrongful, conduct and breach of trust, and specifically, that monies earned by or paid to Mr. Pasquill from FIC Group, and then subsequently transferred or paid to Ms. Pasquill and/or Vicker, represented the. proceeds of the Fraud (the "Proceeds of Fraud"), or that property was being disposed of by Mr. Pasquill to her directly or indirectly, including to Vicker (the "Fraudulent Dispositions") to defeat, delay or hinder the lawful rights of the FIC Group investors and/or the Commission. 25.

22. At all material times when the benefit of the Proceeds of Fraud were being acquired or used by, and/or the Fraudulent Dispositions were made to Ms. Pasquill, she knew or ought to have known that: (a) Mr. Pasquill was liable to or in debt to various investors in the FIC Group arising from the Fraud; (b) the effect of receiving such transfers of property and the Proceeds of Fraud would be to defeat, delay, or hinder the investors and, after March 1, 2021, the Commission's lawful remedies as against Mr. Pasquill; and that (c) the transfers of property, including the Proceeds of Fraud, were being made for no or nominal consideration. 31.

28. As against Earle Douglas Pasquill and., Vicki Irene Pasquill and Vicker Holdings Ltd.: (a) A declaration that the Fraudulent Dispositions and transfer of Proceeds of Fraud were made to defeat, delay or hinder the lawful remedies of the Commission, and are void as against the Commission; and (b) A declaration that the Commission may proceed against any of the property making up the Fraudulent Dispositions as if it were the property of Earle Douglas Pasquill. 42.

38. In the further alternative, to the extent that Mr. Pasquill made any of the Fraudulent Dispositions after March 1, 2012, such transfers were made with the intention to defeat, delay, or hinder the Commission's just and lawful remedies, both on its own behalf or on behalf of investors, and as such, the transfer is void and of no effect as against the Commission. 43.

39. The Commission pleads and relies on the Fraudulent Conveyance Act, R.S.B.C. 1996, c. 163 and, to the extent that Ms. Pasquill had any claim as against Mr. Pasquill, the Fraudulent Preference Act, R.S.B.C. 1996, c. 164. [172] To establish a fraudulent preference a plaintiff must prove that when a transfer of property is made the person making the transfer was in insolvent circumstances, unable to pay their debts in full or knew that they were on the eve of insolvency and that the transfer was made (a) with intent to defeat, hinder, delay or prejudice creditors or some of them; or (b) to or for a creditor with intent to give the creditor a preference over other creditors or some of them. See: Fraudulent Preference Act, R.S.B.C., 1996 c. 164, s. 3. [173] To establish that a fraudulent conveyance has occurred a plaintiff must prove that there was a disposition of property and that the disposition was made to delay, hinder or defraud a creditor. See: Fraudulent Conveyance Act, R.S.B.C., 1996 c. 163 s. 1 and Finness Yachting Inc. v. Menzies, 2015 BCSC 1322 at para. 18 aff'd 2016 BCCA 360. [174] In submitting that the Commission's allegations of fraudulent preference and fraudulent conveyance are bound to fail and should be struck for reasons other than the Commission's lack of statutory authority to pursue such claims against them, Vicki Pasquill and Vicker Holdings Ltd. assert

that the Commission's pleadings should be struck as being general, speculative and hypothetical. [175] In response to those submissions the Commission submitted that it has pleaded the "Fraudulent Dispositions" as material facts and that any defect in the pleadings "may be easily corrected by amendment before trial" so that the pleading should not be struck out. [176] In making the submission that the pleadings should now be struck without the potential for amendment, the applicants relied upon the decisions of this Court in Shi v. Duan, 2017 BCSC 2002 at para. 25; Singh v. Nielsen, 2016 BCSC 2420 at paras. 6-7; and Bigham v. Northern Health Authority, 2019 BCSC 377 at para. 57, all of which confirm that in considering a claim to strike pleadings under Rule 9-5 although all material facts pleaded must be assumed to be true, bare allegations, combined with assumptions and speculation, are not material facts in support of claims. [177] The applicants also relied upon the decision in Beauchesne v. W.J. Stelmaschuk and Associates Ltd., 2015 BCSC 921 in which, in answer to an application to adjourn an application to strike pleadings until an examination for discovery had been completed, the Court relied upon the Supreme Court of Canada's decision in R. v. Imperial Tobacco Canada Ltd. 2011 SCC 42 [Imperial Tobacco] at para. 22 to deny an adjournment and struck the pleading in issue. [178] In Imperial Tobacco at para. 22 the Court stated: [22] A motion to strike for failure to disclose a reasonable cause of action proceeds on the basis that the facts pleaded are true, unless they are manifestly incapable of being proven: Operation Dismantle Inc. v. The Queen, [1985] 1 S.C.R. 441, at p.

455. No evidence is admissible on such a motion: r. 19(27) of the Supreme Court Rules (now r. 9-5(2) of the Supreme Court Civil Rules). It is incumbent on the claimant to clearly plead the facts upon which it relies in making its claim. A claimant is not entitled to rely on the possibility that new facts may turn up as the case progresses. The claimant may not be in a position to prove the facts pleaded at the time of the motion. It may only hope to be able to prove them. But plead them it must. The facts pleaded are the firm basis upon which the possibility of success of the claim must be evaluated. If they are not pleaded, the exercise cannot be properly conducted. [179] In considering whether the Commission's pleadings of alleged Fraudulent Dispositions in respect of its pleas of alleged fraudulent preference and/or fraudulent conveyance are bound to fail, I have examined those pleas having regard to: 1) The timing of the breaches of the Act by Earle Pasquill and others that are the subject of the Commission's Liability Decision and its Sanctions Decision; and 2) The dates and particulars of the applicants' acquisition of their interests in the individual properties against which Certificates of Pending Litigation were filed by the Commission that are collectively defined as the "Properties" in the Second Amended Notice of Civil Claim. [180] In that regard, as I have earlier

noted: 1) In the Liability Decision the Commission panel found that the fraud committed by Earle Pasquill and others contrary to s. 57(b) of the Act which eventually gave rise to the $21.7 million Judgment that the Commission now seeks to enforce in the Collection Action occurred between February and August 2008; 2) The Commission's investigation that gave rise to the hearing concerning the affairs of the FIC Group was commenced in June 2009; 3) The Notice of Hearing that resulted in the Liability Decision was dated March 1, 2012; 4) The Liability Decision was dated July 8, 2014; 5) The Sanctions Decision was issued on March 16, 2015; 6) The $21.7 million Judgment arising from the Sanctions Decision was registered as a judgment of this Court on April 1, 2015; and 7) The original Notice of Claim in the Collection Action was filed on August 9, 2018. [181] To the extent that the Commission claims that the interests in the Properties now owned by the applicants were obtained in circumstances that would render them void as against the Commission as being the result of a fraudulent preference or fraudulent conveyance, any transactions (the alleged Fraudulent Dispositions) that gave rise to the obtaining of that ownership must, at minimum, have occurred after February of 2008. [182] Before that date there is no temporal nexus between the acquisition of the interest in property by the

applicants and the fraud perpetrated by Earle Pasquill that is the foundation of those claims. [183] Of the interests held by Vicki Pasquill and Vicker Holdings Ltd. in the seven properties identified in paras. 15 through 23 of Second Amended Notice of Civil Claim: 1) Vicki Pasquill's interests in the 27th Avenue Property obtained on May 12, 1995 and December 12, 2000 by transfers each time of a 50% interest in that property were both acquired from Earle Pasquill at least eight years before the events that gave rise to the findings of fraud relied upon by the Commission as a basis for its fraudulent conveyance claims.

2) There is no allegation that in either May 1995 or December 2000 Earle Pasquill was insolvent or on the eve of insolvency and no pleading that Vicki Pasquill was a creditor of Earle Pasquill who received a preference as a consequence of either transfer.

3) With the exception of a 50% interest in the 7th Avenue Property acquired by Vicki Pasquill in March 2012 from Mary Colarch for $623,000, all other dispositions by which Vicki Pasquill obtained interest in any of the Properties occurred before March 1, 2006.

4) No financing or refinancing of any of the Properties (including Vicki Pasquill's 50% interest in the 7th Avenue Property) acquired in March 2012 by Vicki Pasquill or Vicker Holdings Ltd. occurred after March 1, 2006. [184] In result, on the facts pleaded by the Commission, the Second Amended Notice of Civil Claim discloses no reasonable claim of fraudulent preference or fraudulent conveyance in relation to the acquisition of any ownership interest by either Vicki Pasquill or Vicker Holdings Ltd. in any of the Properties from the disposition of the Proceeds of Fraud by Earle Pasquill as alleged by the Commission. [185] I am also satisfied that the Commission's pleadings alleging that the proceeds of fraud were used to service mortgages to increase equity in the Properties (as alleged in para. 28 of the Second Amended Notice of Civil Claim) or were used to obtain the Secondary Assets (as alleged in paras. 24 and 29 of the Second Amended Notice of Civil Claim) must be dismissed. [186] I say that because, when considered in the context of the timing of the acquisition of all of the Properties by Vicki Pasquill or Vicker Holdings Ltd. and also the dates when all financing and refinancing occurred, all of which were many years before the events of February to August 2008 that gave rise to the findings against Earle Pasquill relied upon by the Commission as the foundation for its

claims, the Commission's allegation of the "indirect disposition" of the Proceeds of Fraud to Vicki Pasquill and Vicker Holdings Ltd. to defeat hinder or delay the lawful rights of the FIC Group investors and/or the Commission are bare allegations, combined with assumptions and speculation, that do not constitute material facts in support of the claims pleaded. [187] However, to the extent that the Commission alleges that the Proceeds of Fraud were used to obtain Vicki Pasquill's 50% interest in the 7th Avenue Property (in March 2012), I am satisfied that notwithstanding a lack of particulars, that specific pleading is not bound to fail because that transaction occurred after the alleged fraud was committed in 2008 by Earle Pasquill. [188] In summary, I thus conclude that, with the exception of its claims in respect of Vicki Pasquill's 50% interest in the 7th Avenue Property obtained by her in March 2012, all of the Commission's pleadings of fraudulent preference and fraudulent conveyance must be struck. [189] In summary, as to Issue #1, I have found that: 1) The Commission lacks statutory authority to bring and maintain all of the causes of action alleged in the Collection Action with the exception of its claims of fraudulent preference and/or fraudulent conveyance.

2) Registration of the $21.7 million Judgment awarded under the Sanctions Decision as a judgment in the Supreme Court of British Columbia does not merge with and extinguish the underlying action or alternative remedies that may have been sought in the underlying action.

3) The declaratory relief upon which equitable remedies are advanced against Vicki Pasquill and Vicker Holdings Ltd. by the Commission is not available to it and must be struck.

4) The Commission's claims that Vicki Pasquill and Vicker Holdings Ltd. hold property on an express, resulting and/or constructive trust; claims based upon knowing receipt; and, claims based upon unjust enrichment are bound to fail.

5) Except with respect to Vicki Pasquill's 50% interest in the 7th Avenue Property obtained by her in March 2012, the Commission's claims against the applicants based upon allegations of fraudulent preference and/or fraudulent conveyance disclose no reasonable cause of action. [190] Given those findings I will not address Vicki Pasquill and Vicker Holdings Ltd.'s applications to strike the Commission's pleadings in the Collection Action as an abuse of process under Rule 9-5(1)(d) because I am satisfied that it is not necessary to do so. [191] I also do not do so because Vicki Pasquill and Vicker Holdings Ltd.'s allegations of tortious abuse of process in the Tort Action are largely factually identical to their abuse of process submissions under Rule 9-5(1)(d) in the Collection Action so that consideration of the issues in the pleadings context in the Collection Action at this time on an incomplete evidentiary record has the potential to result in inconsistent findings in the two proceedings. ISSUE #2: Applications by Vicki Pasquill and Vicker Holdings Ltd. to cancel the CPLs registered against the Properties [192] In the alternative to their applications to strike the Second Amended Notice of Civil Claim, Vicki Pasquill and Vicker Holdings Ltd. have also applied to cancel the CPLs filed by the Commission against the seven properties described in para. 15 of the Second Amended

Notice of Civil Claim. [193] That application is brought pursuant to s. 215 of the Land Title Act which provides: 215 (1) A person who has commenced or is a party to a proceeding, and who is (a) claiming an estate or interest in land, or (b) given by another enactment a right of action in respect of land, may register a certificate of pending litigation against the land in the same manner as a charge is registered, and the registrar of the court in which the proceeding is commenced must attach to the certificate a copy of the pleading or petition by which the proceeding was commenced, or, in the case of a certificate of pending litigation under Part 5 of the Court Order Enforcement Act, a copy of the notice of application or other document by which the claim is made. [194] The parties agree that the leading case on the cancellation of CPLs under s. 215 of the Land Title Act is Bilin v. Sidhu, 2017 BCCA 429 [Bilin]. [195] In Bilin at paras. 43 to 62 Kirkpatrick J.A. writing for the Court confirmed that where a claim fails to meet the pre-condition in s. 215(1) of being a claim to an interest in land it will be cancelled. [196] More specifically, as it applies to the CPLs filed in this case they will be cancelled if the pleadings as they stand at the time of filing (not as they may be amended) are incapable of supporting a claim to an interest in land. [197] As with applications

to strike pleadings as disclosing no reasonable cause of action under Rule 9-5(1)(a) applications to cancel CPLs under s. 215 of the Land Title Act are to be decided by reference to the pleadings, assuming the facts pleaded to be true in order to determine if an interest in land capable of supporting a CPL has been established. See: Yi Teng Investment Inc. v. Keltic (Brighouse) Development Ltd., 2019 BCCA 357 at paras. 36 and 38. [198] The Commission has asserted interests in the lands against which it filed CPLs based upon its pleadings claiming that Vicki Pasquill and Vicker Holdings Ltd. hold their interests in the Properties by operation of express, constructive and/or resulting trusts, knowing receipt, or unjust enrichment. [199] The Commission further asserted an interest in land based upon its allegations that the Properties were obtained by Vicki Pasquill and Vicker Holdings Ltd. from Earle Pasquill directly or indirectly as fraudulent preferences or fraudulent conveyances. [200] Given my findings with respect to Issue #1 it follows that with the exception of Vicki Pasquill's 50% interest in the 7th Avenue Property, the Commission's pleadings in the Second Amended Notice of Civil Claim are incapable of supporting its claims to interests in land under s. 215(1) of the Land Title Act. [201] I accordingly order that other than with respect to the CPL filed against Vicki

Pasquill's 50% interest in the 7th Avenue Property the CPLs filed against all of the other Properties described in para. 15 of the Second Amended Notice of Civil Claim be cancelled. ISSUE #3: The Commission's application to further amend its Notice of Civil Claim in the Collection Action to plead, amongst other things, amendments to the enforcement provisions of the Securities Act [202] As I have noted above, the amendments to the Act upon which the Commission relies in seeking to further amend its Notice of Civil Claim in the Collection Action came into force on March 27, 2020. [203] The provisions of the amended Act upon which the Commission now seeks to rely are extensive and substantively significant in respect of new statutory causes of action that have been created by the introduction of Part 18.1 of the Act that are the first of their kind in Canada. [204] Most importantly, with respect to those amendments upon which the Commission seeks to rely in its application to further amend its Notice of Civil Claim are provisions that: 1) Allow the Commission to now apply to the Court under s. 164.09 of the Act as amended for an order that Vicki Pasquill and Vicker Holdings Ltd. are jointly and severally liable to the Commission with Earle Pasquill in an amount equal to an "undervalue benefit" (as defined by s. 164.01) received by each of them.

2) Allow the Commission to apply to the Court under s. 164.10 of the Act as amended for orders forfeiting Vicki Pasquill or Vicker Holdings Ltd.'s interest in property and real property in whole or in part to the extent that it is "claimable property" as also defined in s. 164.01. [205] An "undervalue benefit" is defined by s. 164.01 to be: "undervalue benefit" means the amount by which the fair market value of a property at the time of its transfer exceeded the consideration given for the property in respect of the transfer; [206] A "claimable property" is defined by s. 164.01 to be: "claimable property" means, (a) with respect to a family member of a person referred to in section 164.04 (2), (i) property that was transferred to the family member, at any time, from the person, and (ii) if property referred to in paragraph (a) (i) has been transferred by the family member to another person, other property of the family member that, as of the valuation date, is equivalent in value to the property referred to in paragraph (a) (i), and [207] A "family member" is defined by s. 164.01 to be: "family member" means (a) a spouse, former spouse, parent, grandparent, sibling, child or grandchild of a person, and (b) if a person has a spouse or former spouse, a parent, grandparent, sibling, child or grandchild of the spouse or former spouse; [208] Most significantly, in relation to the

Properties as defined in para. 15 of the Second Amended Notice of Civil Claim under s. 164.09 and s. 164.10 there is now no time limitation on claims by the Commission concerning transfers to a family member that results in an undervalue benefit or is in respect of "claimable property" so that an impugned transfer can now be the subject of enforcement proceedings regardless of when the transfer occurred. [209] The general principles to be applied concerning applications to amend pleadings under Rule 6‑1(1)(b)(i) were usefully summarized by G.P. Weatherill J. in Peterson v. 446690 B.C. Ltd., 2014 BCSC 1531 at para. 37 as follows: 1) Amendments to pleadings should be allowed unless the pleadings fail to disclose a cause of action or defence; 2) Amendments are usually permitted to determine the issue between the parties and ought to be allowed unless it would cause prejudice to a party's ability to defend an action; 3) The party resisting an amendment must prove prejudice to preclude an amendment and mere potential prejudice is insufficient to preclude an amendment; 4) Costs are the general means of protecting against prejudice unless it would be a wholly inadequate remedy; and 5) Courts should only disallow amendments as a last resort. [210] The amendments sought by the Commission rely for the most part upon the provisions of ss. 164.09 and 164.10 of the Act to, in some cases

particularize and in others, recast and/or supplement their previous assertions of breach of trust; knowing receipt; unjust enrichment; fraudulent preference and/or fraudulent conveyance in respect of the acquisition of the Properties by Vicki Pasquill and Vicker Holdings Ltd. to seek relief pursuant to the new statutory causes of action and remedies that are now but were not previously available. [211] In addition, the Commission proposes to advance claims against Vicki Pasquill and Vicker Holdings Ltd. concerning property held in two life income funds (referred to as "LIF Accounts") from which it asserts that Earle Pasquill receives draws each month in the approximate amount of $6,575.94. [212] The Commission proposes to plead that Earle Pasquill uses a portion of those monthly draws to maintain the 27th Avenue Property that is solely owned by Vicki Pasquill including by the payment of property taxes and utilities. [213] The Commission also seeks to plead that the Fraudulent Dispositions as defined in para. 14 of the Second Amended Notice of Civil Claim in the Collection Action include transfers of the proceeds of the LIF Accounts to Vicki Pasquill and/or Vicker Holdings Ltd. or to their benefit before, during, or after the Fraud. [214] Vicki Pasquill and Vicker Holdings Ltd. oppose that further amendment of the Commission's Notice of Civil Claim. [215] The primary bases upon which the amendments are opposed by Vicki Pasquill and Vicker Holdings Ltd. relate to: 1) The substance of those amendments to the Act which purport to make available causes of action and remedies against the applicants that did not exist when the Collection Action was commenced.

2) The timing of the amendments to the Act following upon the unfavourable publicity engendered by the Commission's failure to recover significant amounts of money from offenders such as Earle Pasquill. [216] Those issues, as well as allegations that the Commission filed CPLs against properties owned by Vicki Pasquill and Vicker Holdings Ltd. having a value in excess of $20 million when it knew it did not have validly enforceable causes of action against them or their property interests when the Collection Action was commenced are at the heart of the applicants' abuse of process arguments in the Collection Action as well as of their allegations of tortious abuse of process in the Tort Action. [217] Those issues which remain outstanding for determination do not, however, preclude the amendments now sought by the Commission to seek recovery based upon the Act as now amended. [218] That is so because the amendments sought by the Commission concern new and novel substantive statutory causes of action and remedies. [219] While the applicants may have defences to both, including limitation defences and possible Charter challenges or remedies because of the differentiation in the treatment of family members and unrelated third parties under the Act, those are important issues that must be fully and properly explored in the litigation process on a full evidentiary record. [220] Such

issues should not and cannot be summarily dismissed at the amendment stage. [221] Although the amended pleadings may be lacking in respect of particulars, that can, of course, be the subject of demands for particulars under the Rules. [222] I am also satisfied that neither Vicki Pasquill nor Vicker Holdings Ltd. has established that they are prejudiced by the proposed amendments in a way that cannot ultimately be addressed and, if necessary, remedied by an order for costs. [223] Having said that, I do not, however, find that the proposed amendments to the Second Amended Notice of Civil Claim as presented by the Commission in its draft Third Amended Notice of Civil Claim should be allowed. [224] I say that because the draft Third Amended Notice of Civil Claim as presented continues to advance and in some cases re-cast, re-organize, and/ or particularize allegations, causes of actions and remedies against Vicki Pasquill and Vicker Holdings Ltd. that I have found are not available to the Commission because most of its pleadings in the Second Amended Notice of Civil Claim must be struck. [225] To the extent that the proposed Third Amended Notice of Civil Claim does not accord with those rulings it cannot be allowed to proceed. [226] In order to rectify that situation by removing those claims that cannot proceed the Commission will have liberty, on notice to the defendants, to apply

to amend the Second Amended Notice of Civil Claim to conform to my rulings. [227] If those amendments are not opposed they will be allowed to proceed. If not, I will be seized of that further amendment application unless I otherwise order. ISSUE #4: The Commission's application to strike Vicki Pasquill and Vicker Holdings Ltd.'s Second Amended Notice of Civil Claim in the Tort Action. [228] Vicki Pasquill and Vicker Holdings Ltd. commenced the Tort Action against the Commission on December 12, 2019. [229] In the Tort Action they allege that the Collection Action was commenced and the CPLs were filed by the Commission for improper collateral purposes as tortious abuses of process. Vicki Pasquill and Vicker Holdings Ltd. have also alleged that engaging in those tortious acts amounted to misfeasance in public office by the Commission's chair and its Executive Director. [230] Vicki Pasquill and Vicker Holdings Ltd.'s claims of abuse of process against the Commission in the Tort Action mirror those assertions of abuse of process which they relied upon in seeking to strike the Commission's Second Amended Notice of Civil Claim in the Collection Action. [231] Substantively, however, Vicki Pasquill and Vicker Holdings Ltd.'s claims of abuse of process against the Commission in the Tort Action primarily differ from their abuse of process assertions in the Collection Action in that they

claim damages for the Commission's alleged tortious abuses of process in commencing the Collection Action and filing the CPLs. [232] Among other things, Vicki Pasquill and Vicker Holdings Ltd. plead that in bad faith and for collateral and improper purposes the Collection Action was commenced to put "illegitimate pressure" on Vicki Pasquill as the spouse of Earle Pasquill including by the improper filing of the CPLs to "secure" her property "pending passage of amendments to the Securities Act which will purport to give the Commission rights to make claims against the assets of [debtor's] family members retrospectively in certain circumstances." [233] The Commission has applied to strike Vicki Pasquill and Vicker Holdings Ltd.'s Second Amended Notice of Civil Claim in the Tort Action in its entirety pursuant to Rule 9-5(1)(a) on the basis that the pleadings in the Tort Action disclose no reasonable claim against the Commission or, alternatively pursuant to Rule 9‑5(1)(b) on the grounds that the pleadings are unnecessary, scandalous, frivolous or vexatious. [234] In the further alternative, the Commission applies to strike the pleadings in the Tort Action pursuant to Rule 9-5(1)(c) on the basis that they may embarrass the hearing of the Collection Action or, alternatively under Rule 9-5(1)(d) on the basis that the Tort Action is otherwise an abuse of process. [235] The

Commission's submissions in support of its application to strike the abuse of process pleadings in the Tort Action rely primarily upon assertions that: 1) The tort of abuse of process represents a narrow exception to the rule that a person (including the Commission with the powers of a natural person pursuant to s. 5(2) of the Act) can initiate and maintain court proceedings without risking civil liability for doing so.

2) The tort is intended to capture "only very serious conduct that undermines the integrity of the judicial process".

3) Even assuming the facts pleaded in the Second Amended Notice of Civil Claim are true the claim of abuse of process must be struck because the plaintiffs have not pleaded material facts to support an allegedly improper purpose.

4) The plaintiffs have not proven a supportable claim for damages against the Commission since the Land Title Act provides mechanisms by which a registered owner who suffers hardship and inconvenience caused by registration of a CPL may apply to the Court for relief and there is no plea that the registration of the CPLs interfered with any pending sale or financing resulting in a financial loss.

5) The Second Amended Notice of Civil Claim makes gratuitous allegations of unparticularized wrongdoing against the Commission "unconnected to any material fact pleaded" including about the Commission's conduct of the Collection Action. [236] Concerning Vicki Pasquill and Vicker Holdings Ltd.'s allegations of misfeasance in public office the Commission submits that the claim is bound to fail because, as an intentional tort, it must be advanced against the individual public officer who allegedly committed the wrongdoing in question. The claim cannot be advanced against the Commission by merely naming the offices or positions held by the Commission's Chair or its Executive Director instead of identifying the individuals who held those offices. [237] During the hearing of that aspect of the Commission's submissions counsel for Vicki Pasquill and Vicker Holdings Ltd. decided to abandon all claims in misfeasance of public office against the Commission rather than seek to amend the pleadings to name as defendants those individuals who held the offices in issue. [238] Accordingly, the Commission's application then only proceeded on the basis that the plaintiffs' abuse of process claims in the Tort Action be struck. [239] While I am concerned about some lack of specificity in the pleadings of abuse of process advanced by the plaintiffs against the Commission in the Tort Action, I am

not satisfied that the pleadings are so deficient in the pleading of material facts or damages allegedly suffered that they should be struck at this stage of the proceeding. [240] Although I accept that the tort of abuse of process is narrow in scope and application I do not find that on the facts pleaded (that must be assumed to be true) the pleadings "disclose no reasonable claim or have no reasonable prospect of success". [241] I also do not find that the pleading is unnecessary or vexatious or would be a waste of the court's resources given the vast amounts of money involved and, the novel substance of the amendments to the Act in expanding the reach of the Commission to include the ability to collect monetary judgements from family members of debtors even with respect to property that was owned by a family member before any wrongdoing by the debtor that gave rise to the judgment. [242] In concluding that most of the Commission's Second Amended Notice of Civil Claim must be struck under Rule 9-5(1)(a) as disclosing no reasonable claims for those reasons I detailed above in respect of Issue #1, I decided not to address Vicki Pasquill and Vicker Holdings Ltd.'s alternative application to strike the Commission's pleadings in the Collection Action as an abuse of process under Rule 9-5(1)(d). [243] I reached that decision not only because it was not necessary to do so given the

outcome of the balance of that application to strike the Commission's pleadings but also because Vicki Pasquill and Vicker Holdings Ltd.'s allegations of tortious abuse of process in the Tort Action are largely factually identical to their abuse of process submissions under Rule 9-5(1)(d) in the Collection Action. [244] I thus concluded that consideration of the abuse of process issues in the pleadings context had the potential to result in inconsistent findings in the Collection Action and in the Tort Action. [245] Since the substance of the Collection Action will now almost entirely be concerned with the enforceability of the amendments to the Act, I have concluded that to allow the Tort Action to continue while the Collection Action is also ongoing not only gives rise to the potential embarrassment of inconsistent findings of fact in the two proceedings, but would also not promote principles of judicial economy or finality. [246] In those circumstances I am satisfied that the appropriate orders to be made are to allow the Tort Action to proceed with such amendment as is necessary to delete the plaintiffs' claim of misfeasance in public office; and, to otherwise stay the proceedings in the Tort Action until the issues in the Collection Action have been determined.

COSTS [247] The costs of all of the applications considered in the Collection Action in these reasons will be costs in the cause of that proceeding. [248] The costs of the Commission's application in the Tort Action will be costs in the cause of that proceeding. "Davies, J." Appendix A