British Columbia’s appeal court has declared a section of that province’s securities legislation to be invalid, ruling that a provision that prevents the subject of an investigation from talking about it interferes with the right to free speech.

A Vancouver lawyer, Howard Shapray, petitioned the court over a section in B.C.’s Securities Act that prohibits anyone from disclosing, except to their counsel, “any information or evidence obtained or sought to be obtained, or the name of any witness examined” unless the B.C. Securities Commission consents to that disclosure. Violating that prohibition is an offence, punishable by a fine of up to $3 million or imprisonment for up to three years.

According to the decision, Shapray argued that this section effectively prohibits “innocent and otherwise lawful speech” and that the provision is not justified under the Charter of Rights and Freedoms. In July 2006, he filed a petition in the Supreme Court of B.C. seeking a declaration that the section is inconsistent with his rights of free expression under the Charter.

He lost that case, but the appeal court was more sympathetic. It allowed his appeal, saying, “I fully accept that a prohibition on disclosure will be justifiable in many cases in which commission staff are carrying out investigations. However, I am not persuaded that a blanket provision like this one can be said to fall within a range of reasonable alternatives that minimally impair free expression.”

However, the court also delayed the order declaring that section invalid for a year to give the legislature time to consider how to achieve the objectives of the disclosure restriction in a way that is consistent with the Charter. It noted that this provision was enacted long before the Charter came into effect, so the province did not have the opportunity to consider less intrusive alternatives.