Introduction
Part 18.1 of the Securities Act1 was introduced in 2020 and permits the retroactive recovery of “claimable property” transferred to family members. In Pasquill v. British Columbia (Securities Commission),2 the British Columbia Court of Appeal clarified that amendments to pleadings based on Part 18.1 do not necessarily introduce new causes of action and, as such, where amendments to claims do not vary the key underlying facts, they will not be barred by the six-year limitation period found in section 159(1) of the Securities Act.
Background
In 2015, the British Columbia Securities Commission (the Commission) ordered Earle Pasquill to pay $36.7 million resulting from a fraudulent scheme he perpetrated with others in contravention of section 57(b) of the Securities Act. Following this judgment, in 2018, the Commission initiated a Collection Action against Mr. Pasquill, his wife, and Vicker Holdings Ltd (Vicker), a company solely owned by Ms. Pasquill, alleging knowing receipt, unjust enrichment, fraudulent conveyance and fraudulent preference.
In 2020, the Securities Act was amended to include Part 18.1 which provides the Commission a broader scope for collections by creating a new retroactive legal basis for recovering “claimable property” from family members. The Commission drafted a proposed Third Amended Notice of Civil Claim advancing claims under the newly enacted sections 164.09 and 164.12 under Part 18.1 of the Securities Act (the Draft Claim).
Ms. Pasquill and Vicker applied to strike the Commission’s pleading in the Collection Action on the basis that it was legally deficient. In his 2021 decision, Justice Davies agreed and held that much of the Commission’s pleading was legally deficient and dismissed the Commission’s application to amend its claim based on the 2020 enactments at that time. Despite this, Justice Davies granted the Commission leave to fix the deficiencies in the Draft Claim and re-apply for leave to amend a proposed claim.
In 2023, the Commission applied to amend its pleadings and file a Third Amended Notice of Civil Claim, which the British Columbia Supreme Court allowed. The Appellants appealed this decision, arguing that the amendments to the pleadings advance a “new cause of action” and are thus barred by the six-year limitation period in subsection 159(1) of the Securities Act.
The Applicable Limitation Period
The Court rejected the Appellant’s position that the new claim under Part 18.1 constituted a new cause of action, finding instead that the limitation issue related to the relationship between the original claim and the new claim. The Court found that the focus of the analysis is the factual scope rather than legal theory of the claim. As such, when assessing whether a new cause of action is being advanced for the purposes of a limitation period, the court must ask whether the proposed pleading raises new factual issues.
Based on this framework, the Court agreed with the chambers judge’s analysis of the factual landscape which found that the essential factual components of the amended pleadings under Part 18.1 were the same as those in the initial claim. Accordingly, the appeal was dismissed, and the amended pleadings were allowed as they did not constitute a new cause of action.
The Outcome
This case demonstrates the expanded scope of the Commission’s collection powers as a result of Part 18.1, including in claims that existed prior to the inception of Part 18.1 of the Securities Act. The Commission now has the power to seek penalties from family members and closely held corporations. This power applies retroactively and, where the factual foundations of the amended pleadings overlap with the original claim, is not barred by the six-year limitation period set out in the Securities Act.
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1 Securities Act, R.S.B.C. 1996, c. 418 (Securities Act).
2 Pasquill v. British Columbia (Securities Commission), 2025 BCCA 287.