DATE: 20030501
DOCKET: M29047
COURT OF APPEAL FOR ONTARIO
ROSENBERG, MOLDAVER and SIMMONS JJ.A.
B E T W E E N :
COMMISSIONER OF COMPETITION
Harry Underwood for the appellants Noranda Inc., Noranda Dupont of Canada Inc. and Noranda Metallurgy Inc.
Respondent
Alan D. Macleod, Q.C. and
- and -
Robert Frank for the appellants Falconbridge Limited
FALCONBRIDGE LIMITED, NORANDA INC., NORANDA DUPONT OF CANADA INC. and NORANDA METALLURGY INC.
Appellants
James D. Sutton for the respondent
Heard: January 30, 2003
On appeal from the order of Justice Lynn Ratushny of the Superior Court of Justice dated October 1, 2002.
ROSENBERG AND MOLDAVER JJ.A.:
[1] This is an application for leave to appeal under s. 35 of the Mutual Legal Assistance in Criminal Matters Act, R.S.C. 1985, c. 30 (4th Supp.) (the “Act”) from the judgment of Ratushny J. That judgment dealt with an application by the respondent, the Commissioner of Competition, for a sending order under s. 15 of the Act, applications by the appellants to have search warrants and evidence gathering orders set aside and seized records returned to them, applications by the appellants for certain declarations concerning the application of the Act and the Treaty Between the Government of Canada and the Government of the United States of America on Mutual Legal Assistance in Criminal Matters, Can. T.S. 1990 No. 19 (Canada Gazette, Part 1, 1990, p. 953) (the “Treaty”), and an application for the continuation of a sealing order.
[2] The application judge held that the sending order should be made in respect of the items seized under the search warrants. She dismissed all of the applications by the appellants and also refused to stay her order refusing to continue the sealing order. On October 3, 2002, Charron J.A. made an order sealing the court file and all related appeal proceedings until a final determination of the application for leave to appeal.
[3] On December 15, 2001, Doherty J.A. directed that the application for leave to appeal and, if leave be granted, the appeal itself, would be heard by a panel of this court. Since we are of the view that leave to appeal must be granted on at least some of the issues raised by the appellants we heard the leave application and the appeal together in accordance with Doherty J.A.’s order.
[4] Accordingly, while leave to appeal is granted, for the following reasons, the appeal is dismissed. In accordance with the May 27, 2002 order of the application judge the “remaining issues”, such as whether any terms or conditions should be included in the sending order in accordance with s. 15(1)(b) of the Act, are remitted to the application judge.
THE FACTS
[5] This case arises out of a grand jury investigation in the United States concerning possible violations by the appellants and others of the Sherman Act, 15 U.S.C. §1. In 1999, the United States made a request of the Government of Canada for assistance under the Treaty in connection with possible anti-trust offences under the Sherman Act. The Minister of Justice approved the request and sent it to the Commissioner of Competition as the “competent authority” within the meaning of the Treaty and the Act. On the basis of ex parte applications by the Commissioner, the application judge issued search warrants under s. 12 of the Act. These searches were completed by October 15, 1999. In January 2000, on the basis of ex parte applications, the application judge made evidence gathering orders under s. 18 of the Act.
[6] The appellants then brought applications to set aside the warrants and the evidence gathering order. The respondent brought an application for a sending order in relation to the warrants only. The evidence obtained from the evidence-gathering orders is not yet at a stage where the respondent seeks a sending order in relation to that material. The appellants were permitted to cross-examine Jean-Claude Drapeau who swore the informations in support of the warrants and the evidence-gathering orders.
THE VALIDITY OF THE SEARCH WARRANTS AND EVIDENCE GATHERING ORDERS
Question of law
[7] Before dealing with the substance of the appellants’ appeal we will briefly address the respondent’s submission that none of the grounds of appeal concerning the sufficiency of the warrants and the informations raise questions of law alone. The respondent therefore argues that the court should refuse leave to appeal since s. 35 of the Act provides that an appeal lies with leave “on a question of law alone”. The respondent relies upon the reasons of Iacobucci J. in Canada (Director of Investigation and Research) v. Southam Inc., [1977] 1 S.C.R. 748 at para. 35 where he provided this explanation of the difference between questions of fact, law and mixed fact and law for the purposes of the Competition Tribunal Act, R.S.C. 1985, c. 19 (2nd Supp.):
Briefly stated, questions of law are questions about what the correct legal test is; questions of fact are questions about what actually took place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests.
[8] The respondent submits that the appellants are raising only questions of mixed law and fact since their issues concern whether the facts as set out in the warrants and informations and the other evidence satisfy the legal tests for sufficiency of warrants and informations. We do not accept this characterization of the issues. In the same paragraph set out above, Iacobucci J. acknowledged that the distinction between law and mixed law and fact is difficult and, “[o]n occasion, what appears to be mixed law and fact turns out to be law, or vice versa”. As counsel for the respondent fairly acknowledged, the subsequent decision of the Supreme Court in R. v. Araujo, 2000 SCC 65, [2000] 2 S.C.R. 992 would seem to be against his position. In Araujo, the court considered the sufficiency of affidavits in support of wiretap authorizations. Speaking for the court, LeBel J. rejected the submission from the accused/respondents that the Crown appeal did not raise a question of law. He held at para. 18 that “if a question is about the application of a legal standard, that is enough to make it a question of law”. More importantly, the questions dealt with by the court in Araujo are the very same type of questions raised in this case such as whether the factual circumstances revealed in the affidavit to obtain the wiretap authorization met the statutory requirements.
[9] We are therefore satisfied that the questions raised by the appellants on their application for leave raise questions of law alone. That said, we acknowledge that leave to appeal is not a mere formality. Ordinarily, it is dealt with by a single judge. Mutual legal assistance is part of an investigatory process that should be dealt with as expeditiously as possible. The court must be satisfied that the test for leave to appeal as set out by this court in National Cheese & Food Co. (Re), (1998) 1998 1089 (ON CA), 110 O.A.C. 151 at para. 9 and by Southin J.A. in United States of America v. Ross (1994), 1994 201 (BC CA), 44 B.C.A.C. 228 at para. 33 has been met. As indicated, we were satisfied that the test was met in this case.
Introduction
[10] After they launched their applications, the appellants were provided with edited copies of the informations to obtain the search warrants and the evidence-gathering orders. The editing was necessary to protect the identity of confidential informers who have provided information to the United States authorities. Notwithstanding the editing, it is possible to discern that the United States investigation concerns allegations of conspiracy to fix prices for the United States in the sulfuric acid industry and conspiracy to restrict output of sulfuric acid contrary to the Sherman Act. Before the application judge, the appellants argued that there were a number of defects in the warrants, the evidence-gathering orders, and the informations of Mr. Drapeau, such that those warrants and orders should be set aside. The application judge found that the warrants and orders were valid. The appellants repeat the same arguments in this court on their application for leave to appeal. We will deal with each of those arguments.
(1) The facial validity of the warrants
[11] The appellants submit that the warrants were invalid because they did not adequately describe the offence for which the items were sought. We will assume that the appellants are not precluded from raising this argument by this court’s decision in R. v. Gladwin (1997), 1997 1288 (ON CA), 116 C.C.C. (3d) 471 at para. 13.
[12] The warrants describe the offence in the following terms:
Contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade, punishable by fine not exceeding $10,000,000 if a corporation, or if any other person, $350,000, or by imprisonment not exceeding three years.
[13] This description, standing on its own, is insufficient. It does not set out the dates of the offence or object of the conspiracy. The purpose of specifying the offence is two-fold. It instructs the officers conducting the search and the person whose premises are being searched of the limits of the search. However, the entire warrant should be looked at to determine whether it reasonably informs the officers and the target of the search of the nature of the offence and the object of the search.
[14] The application judge found that when the warrants are read in their entirety there is no defect as to the sufficiency of the description of the offence. She referred to the description of the items to be seized as well as the description of the offence set out above. We agree with this approach. Those descriptions limit the scope of the search to items concerning competitive practices of the appellants relating to sulfuric acid. In all but one case the documents sought relate to a specific time period: from January 1, 1988 to the date of the search. The one exception relates to agreements, meetings, conversations, or other contacts concerning sulfuric acid. It may be that this one paragraph of the warrant could be severed. However, the appellants did not contend that the warrant could be set aside on this basis.
[15] Accordingly, we would not give effect to this ground of appeal.
(2) The facial validity of the evidence-gathering orders
[16] The evidence-gathering orders contain no statement of the offence for which the evidence is sought, other than that the evidence is sought for use by United States authorities in relation to an antitrust investigation. By reviewing the order, the target would suspect that the investigation relates to production of sulfuric acid during the years 1987 through 1999. In determining whether the orders made in this case are valid, it is necessary to consider the legislative scheme.
[17] There are important differences between an evidence-gathering order made under s. 18 of the Act and a search warrant issued under s. 12. Section 10 provides that the Criminal Code applies, with necessary modifications, to a search and seizure under the Act. The arrangement of the Act indicates that s. 10 is to apply only to search and seizures made under ss. 10 to 16 and not to an order under s. 18. Section 12(4) provides that a search warrant issued under that section may be in Form 5 in the Criminal Code. Form 5 is the form for the usual Criminal Code search warrant issued in accordance with s. 487 of the Code. Finally, once issued, state authorities execute the search warrant and, absent exceptional circumstances such as where the target is able to obtain an interim injunction as was done in Hunter v. Southam Inc. (1984), 1984 33 (SCC), 14 C.C.C. (3d) 97 (S.C.C.) at 101, the items sought are seized without court intervention or supervision. The only review of the validity of the warrant and lawfulness of the search is ex post facto.
[18] An evidence-gathering order is different. The order made in this case under s. 18(2)(b) requires the person named in the order to make copies of records and produce them to a person designated in the order. In this case the order designated Mr. Drapeau, and required that the appellant produce the records sought approximately one month later.
[19] In our view, these differences in procedure indicate that Parliament did not intend that the requirements for a search warrant apply to an evidence-gathering order. The Manitoba Court of Appeal reached a similar conclusion in United States of America v. Beach (2000), 2000 26951 (MB CA), 143 C.C.C. (3d) 494. There are a number of safeguards inherent in the procedure and explicitly provided in the legislation that protect the target of the order. First, as indicated, the authorities do not seize the material sought. The person against whom the order is made must produce them. This gives the person an opportunity to challenge the validity and scope of the order before a court. Second, the judge who made the order or any other judge may vary its terms and conditions pursuant to s. 18(6). Third, s. 18(7) provides that the person may refuse to produce a record or thing if producing the record or thing would disclose information that is protected by Canadian laws relating to privilege or non-disclosure of information. That subsection also provides that the person may refuse to produce if to do so would constitute a breach of a privilege recognized in the requesting state or an offence against the law of the requesting state. Finally, under s. 18(8) if, as in this case, the designated person is not a judge, he or she has no power to compel production. Rather, only a judge can make an order requiring the person to produce the record or thing under s. 19(3).
[20] In our view, the differences in procedure and these safeguards indicate that the evidence-gathering order must be sufficiently specific that the person against whom the order is made is able to identify the things for which production is sought. This may but does not necessarily require that the offence for which the things sought be set out in the order with the same specificity as a warrant. If the persons are concerned that the order goes beyond what is authorized by the statute they may make submissions to the court before producing anything. Since it was not suggested that the appellants were unable to identify the things sought to be produced or otherwise comply with the order, we would not give effect to this ground of appeal.
(3) The facial validity of the informations to obtain the warrants
[21] The appellants submit that the informations to obtain the warrants were deficient on their face in that they failed to disclose grounds for obtaining the warrants. The legislative scheme for obtaining a warrant under the Act is similar to the scheme under s. 487 of the Criminal Code. Further, as we have observed, s. 10 provides that the Criminal Code applies, with necessary modifications, to a search and seizure under the Act. The relevant part of the Act for this aspect of the appeal is s. 12(1):
- (1) A judge of a province to whom an application is made under subsection 11(2) may issue a search warrant authorizing a peace officer named therein to execute it anywhere in the province, where the judge is satisfied by statements under oath that there are reasonable grounds to believe that
(a) an offence has been committed;
(b) evidence of the commission of the offence or information that may reveal the whereabouts of a person who is suspected of having committed the offence will be found in a building, receptacle or place in the province; and
(c) it would not, in the circumstances, be appropriate to make an order under subsection 18(1).
[22] The thrust of this aspect of the appellants’ argument focused on the requirement of reasonable grounds to believe that evidence of the commission of the offence will be found in a building, receptacle or place. The law relating to the sufficiency of an information to obtain a warrant and the grounds upon which a court may review the validity of the information is set out in a number of cases. The most important for our purposes are R. v. Debot (1989), 1989 13 (SCC), 52 C.C.C. (3d) 193 (S.C.C.), R. v. Garofoli, 1990 52 (SCC), [1990] 2 S.C.R. 1421 and R. v. Araujo.
[23] In this case, the appellants have only been provided with an edited copy of the informations of Mr. Drapeau. The respondent submits that the editing is necessary to protect confidential informers who have provided information to the United States authorities. The facial sufficiency of the informations must be assessed on the basis of these edited informations. If the informations have been so heavily edited that the reviewing judge cannot find that they are sufficient, and if the state refuses to reconsider the editing, the informations and warrant would have to be set aside.
[24] At page 215 of Debot, Wilson J. summarized the court’s approach to sufficiency of an information to obtain a warrant based on information from a confidential informer:
In my view, there are at least three concerns to be addressed in weighing evidence relied on by the police to justify a warrantless search. First, was the information predicting the commission of a criminal offence compelling? Second, where that information was based on a "tip" originating from a source outside the police, was that source credible? Finally, was the information corroborated by police investigation prior to making the decision to conduct the search? I do not suggest that each of these factors forms a separate test. Rather, I concur with Martin J.A.'s view that the "totality of the circumstances" must meet the standard of reasonableness. Weaknesses in one area may, to some extent, be compensated by strengths in the other two.
[25] In our view, the informations, even as edited, meet this test, bearing in mind the limited scope of review as set out in Garofoli at p. 1452 that the reviewing court does not substitute its view for that of the authorizing judge and that if the judge “could” have granted the warrant, it should not interfere.
[26] The appellants identified the main problems with the informations as the failure to identify a criminal transaction and to provide credible evidence to substantiate any criminal transaction. To address these concerns we briefly summarize the edited informations. Mr. Drapeau states that he has reasonable grounds to believe that three offences have been committed:
(a) Noranda and its subsidiaries together with an unnamed company and others from January 1, 1988 to the present conspired to fix prices for the United States in the sulfuric acid industry, where the alleged conspirators are competitors contrary to the Sherman Act;
(b) Noranda and Falconbridge together with an unnamed corporation during the same period conspired to restrict output of sulfuric acid produced by a plant owned by an unnamed entity contrary to the Sherman Act; and
(c) Noranda together with unnamed companies during the same period conspired to restrict output of sulfuric acid by shutting down a competitor’s production facility contrary to the Sherman Act.
[27] Mr. Drapeau states that he has spoken to two named officers and trial attorneys of the Antitrust Division of the United States Department of Justice who are coordinating the investigation of the sulfuric acid industry. He has previously conducted investigations under the Competition Act that have also been the subject of investigation by the Antitrust Division. He has known these two officers and relied on their professional integrity. He indicates that the investigation began after an initial complaint in September 1998 from a company “engaged in the production and sale of sulfuric acid”. The information in the balance of Mr. Drapeau’s affidavit was obtained from these officials who had obtained their information from unnamed witnesses, from documents and from publicly available sources of information.
[28] There are two ways of producing sulfuric acid. Voluntary production arises from the burning of sulfuric ores. Involuntary production arises as a by-product of other industrial processes. Mr. Drapeau explains that due to environmental regulations, sulfuric dioxide, which used to be released into the environment as a by-product of industrial productions such as smelting, is now converted into acid. Once produced, there are virtually no commercially viable alternatives to disposing of sulfuric acid other than selling it in the open market. In the 1980’s there was an increasing supply of sulfuric acid in Canada as a result of this involuntary production but the Canadian demand for sulfuric acid was decreasing. The appellants Noranda and Falconbridge sought customers in the United States. The influx of Canadian product began to depress prices in the United States. The appellants could not reduce their sulfuric acid production without also reducing their smelting operations and Noranda therefore approached voluntary producers in the United States and persuaded them to agree to reduce supply and raise or stabilize prices. Noranda reached agreements to reduce production on its own and, after April 1990, as an agent for Falconbridge. Noranda reduced the volume of sulfuric acid in the United States market by persuading its competitors to agree to cut back their production and by persuading its competitors to close sulfuric acid plants. Pausing here, we agree with the appellants that this part of the Drapeau affidavits merely sets out bald allegations and on its own would not be sufficient to support the issuance of a warrant. There is, however, more, and to illustrate the point we will refer to the details of the production cutback conspiracy as detailed in the informations.
[29] According to an unnamed employee with an unnamed company, with responsibility for sulfuric acid sales, representatives of an unnamed company and Noranda met in Toronto on November 26, 1990. At this meeting, Noranda and the unnamed company agreed to act jointly to stabilize acid prices in the United States. The two United States officers have told Mr. Drapeau that this agreement is memoralized in documents produced by the unnamed informer, including letters between the unnamed company and Noranda describing the meeting. In 1991, Noranda began negotiating with an unnamed entity to distribute acid produced by Noranda and Falconbridge in the United States. Noranda and the unnamed entity agreed that the entity would cut back production at its unnamed plant by 120,000 metric tons per year beginning in 1992. In exchange for this reduction, Noranda would pay the entity a higher commission to sell the acid produced by Noranda and Falconbridge.
[30] Mr. Drapeau states that documents obtained by the Antitrust Division reflect that pursuant to this agreement, Noranda agreed to distribute 144,000 tons of Noranda and Falconbridge acid through the unnamed entity and to pay the entity a commission of $15/ton to account for the costs of both the production cutback and marketing. Two unnamed employees of an unnamed company responsible for sulfuric acid sales and production confirmed that this commission was to compensate for its agreement to cut back on production. The documents also show that the unnamed entity believed this coordinated cutback would raise the margins in the Southeastern United States on its other sulfuric acid sales. An unnamed employee responsible for sulfuric acid sales and production stated, and the documents confirm, that this agreement remained in force until December 31, 1998, although the conspirators adjusted the commission rate. The documents obtained by the Antitrust Division also confirm that the decisions to cut back production at the unnamed entity was not a unilateral action but the result of an agreement.
[31] The judge receiving this information could draw a number of conclusions. First, Mr. Drapeau reasonably relied upon the information provided to him by the United States investigators. He had dealt with them in the past and considered them to be honest. Thus, when they tell Mr. Drapeau that they have seen information in documents produced by the informer that support the existence of the conspiracy, Mr. Drapeau could rely upon that being the case, even if he had not personally seen those documents. Similarly, Mr. Drapeau could rely upon the officers’ reports of conversations with the confidential informer. The situation is similar to that in Debot where Wilson J. held at p. 215 that the officer making the search could rely upon the authenticity of another officer’s report of his conversation with the confidential informer. It is quite different from United States of America v. Future Électronique Inc. (2000), 2000 11375 (QC CA), 151 C.C.C. (3d) 403 (Que. C.A.) at pp. 414‑15 where the Canadian official gave no reasons for why he could rely upon the information provided by a named F.B.I. agent.
[32] Second, the informer is said to be an employee with responsibility for sulfuric acid sales. Thus, he or she is in a position within the industry to credibly have information about the alleged conspiracy.
[33] Third, it is apparent from the detail provided by the confidential informer, such as the date and place of a particular meeting, the actual amount of the cutbacks and the commission, that the informer was in a position to know about the conspiracy. As was said in Debot at p. 215, “The information did not take the form of bald conclusory statements or ‘mere rumour or gossip’”. The information provided is sufficiently detailed that it can be inferred that he or she has first hand knowledge of the facts; that he or she is not merely passing on rumour or gossip.
[34] Finally, the existence of the alleged conspiracy is confirmed by real evidence in the form of documents that the informer has turned over to the United States authorities. This constitutes some confirmation of the informer’s information. It is of course possible that the informer fabricated the written material as well as the other information. We think, however, that the judge would have been entitled to draw the common sense inference that this was highly unlikely, or that experienced anti-trust investigators could not be so easily misled.
[35] In our view, the information provided by the informer is sufficiently compelling and there is sufficient confirmation of that information to make up for the lack of any information as to the credibility of the informer. See R. v. Plant (1993), 1993 70 (SCC), 84 C.C.C. (3d) 203 (S.C.C.) at 216. The information provided by the informer concerning the plant shutdown conspiracies and the price-fixing conspiracy is also sufficient to meet the test in Debot. The question is not whether the reviewing court would have issued the warrant but whether the issuing judge could have done so. We are satisfied that the reviewing judge properly found that the informations to obtain the warrants were sufficient. See R. v. Garofoli at p. 1452 and R. v. Araujo at pp. 1017-19.
(4) The sub-facial validity of the informations to obtain the warrants
[36] The appellants submit that even if the informations are sufficient on their face, the cross-examination of Mr. Drapeau has shown that the authorizing judge was misled about the existence of the statutory requirement in s. 12(1)(c) that there were reasonable grounds to believe that “it would not, in the circumstances, be appropriate to make an order under subsection 18(1)”. Mr. Drapeau addressed the question of whether an evidence-gathering order under s. 18 would be appropriate in paragraphs 30 and 31 of one information:
The informant has reasonable grounds to believe and does believe that search warrants pursuant to section 12 of the Act are necessary to search for and seize evidence of the commission of the offences mentioned in paragraph 3 of this Information. John Henderson has told the Informant that, based on information from a cooperating witness, some of the subjects of the investigation may know there is some form of U.S. Department of Justice investigation. To the best of the prosecutor’s knowledge, however, no one other than the [ ] and the witnesses [ ] are aware of the nature or scope of the investigation.
Should the subjects of the investigation learn of the focus of the investigation, they may destroy records to conceal their involvement if search warrants are not used. John Henderson has told the Informant that there are good indications that targets of investigation by the Antitrust Division of the U.S. Department of Justice have destroyed relevant documents once they have learned that they were the focus of an investigation. The informant has reasonable grounds to believe and does believe, based on his experience of 28 years with the Competition Bureau, that targets of searches have destroyed or attempted to destroy relevant documents once a Search warrant has been served at their premises. Therefore, a significant possibility exists that, if evidence is sought with a production order alone, some, if not all, of the notes, memoranda, letters, calendars, and other records will be destroyed by those with criminal responsibility [emphasis added].
[37] Paragraph 38 is also relevant to this part of the appellants’ argument:
- Based on a conversation with John Henderson, the Informant has reasonable grounds to believe and does believe that the search for and seizure of the records and other things mentioned in paragraph 32 of this Information and of any other evidence of the commission of the offences mentioned in paragraph 3 of this Information must take place concurrently with similar investigative measures to be carried out in various locations in the United States of America on October 5, 1999, pursuant to a Grand Jury investigation [emphasis added].
[38] The appellants were given leave to cross-examine Mr. Drapeau. That cross-examination disclosed the following. Based on his lengthy experience, Mr. Drapeau had a “real fear” that documents would be destroyed if the authorities resorted merely to an evidence-gathering order. He was unable, however, to quantify the risk. He also testified that he asked Mr. Henderson, one of the antitrust investigators, what type of process the United States authorities were going to use on October 5, 1999 but Mr. Henderson did not answer his question. Mr. Drapeau stated that he “got the sense that I couldn’t push this issue any further.” He believed that his use of the phrase “similar investigative measures” in paragraph 38 to describe the United States investigation was not misleading and “reflected my knowledge of the information that I had at the time”. He later became aware that the United States authorities had issued Grand Jury subpoenas and not search warrants as part of their investigation.
[39] Mr. Drapeau also did not disclose in the search warrant informations that he intended to subsequently apply for evidence-gathering orders under s. 18. He testified that he did not consider that relevant.
[40] The respondent sought to supplement the record with the affidavit of François-B. Côté, Director of the Competition Law Division of the Legal Services Unit at the Department of Industry Canada. Mr. Côté provided legal advice to Mr. Drapeau and assisted him in drafting the informations to obtain the search warrants and the applications for the evidence-gathering orders. Mr. Côté had several conversations with the United States investigators from the Antitrust Division. He understood from these conversations that the United States investigators intended to have the search warrants executed in Canada simultaneously with the service of subpoenas duces tecum and the interview of individuals who were the subjects of the investigation in the United States, so called “drop-in” interviews. Counsel for the appellants cross-examined Mr. Côté on his affidavit. It becomes far less clear from the cross-examination when Mr. Côté learned of the process being used by the United States authorities and it may have been just before the warrants were executed. We do not see a serious inconsistency between the evidence of Mr. Côté and Mr. Drapeau. Counsel for the appellants also asked Mr. Côté why the Drapeau informations did not include reference to the fact that they intended to subsequently apply for s. 18 orders. He testified that he did not think it was relevant.
[41] The application judge was satisfied that the amplified record continued to contain sufficient information to support the conclusion that the requirement in s. 12(1)(c) of the Act was met:
It is certainly common sense to assume that crime participants may hide or destroy evidence if forewarned and particularly so for the personal and informal records that were sought under warrant.… With respect to the arguments that subpoenas were being used in the United States and there was no basis for believing an offence had been committed under Canadian law, the import of those matters, had they been known to the issuing judge, and the import of them to this court on review, is something for speculation only and does not affect the reasonable conclusion that there was need for surprise.
[42] We have not been persuaded that the application judge erred in her view that the informations remained sufficient in light of the amplified record. In this respect, it is important to bear in mind the very narrow scope for review. In R. v. Araujo at para. 51, LeBel J. adopted as the starting point for any reviewing judge, the Supreme Court’s earlier decision in Garofoli at p. 1452:
The reviewing judge does not substitute his or her view for that of the authorizing judge. If, based on the record which was before the authorizing judge as amplified on the review, the reviewing judge concludes that the authorizing judge could have granted the authorization, then he or she should not interfere. In this process, the existence of fraud, non-disclosure, misleading evidence and new evidence are all relevant, but, rather than being a prerequisite to review, their sole impact is to determine whether there continues to be any basis for the decision of the authorizing judge [emphasis added by LeBel J.].
[43] At para. 57 of Araujo, LeBel J. adopted an excerpt from this court’s decision in Re Church of Scientology and The Queen (No. 6) (1987), 31 C.C.C. (3d) 449 at 528-29: “[T]he function of the reviewing judge is to determine whether there is any evidence remaining, after disregarding the allegations found to be false and taking into consideration the facts found to have been omitted by the informant, upon which the justice could be satisfied that a search warrant should issue”.
[44] The appellants submit that the amplified record shows that surprise through execution of the search warrants did not matter and that the authorities should have resorted to the evidence-gathering order process in the same way that the United States investigators relied upon subpoenas. In our view, even on the basis of the amplified record there continued to be a basis for the decision of the authorizing judge. As the application judge pointed out, the search targets in this case were not innocent third parties but persons alleged to be involved in the conspiracy. The records sought included personal notes and memoranda, the very type of material that could be at risk of destruction if the targets became aware of the investigation. It is not apparent that the persons to be subpoenaed in the United States were similarly situated.
[45] We think that the Canadian authorities should have disclosed that the United States authorities intended to rely upon Grand Jury subpoenas rather than warrants (Mr. Côté’s version) or that they refused to say what process they intended to use (Mr. Drapeau’s version) but that non-disclosure did not remove the basis for granting the warrants. In cross-examination, Mr. Drapeau reaffirmed his position that there was a legitimate concern about destruction of evidence and it was open to the reviewing judge to accept that evidence. The alleged lack of candour, if it could be so characterized and we make no judgment on that, was not in the words of Cromwell J.A. in R. v. Morris (1998), 1998 NSCA 229, 134 C.C.C. (3d) 539 (N.S.C.A.) at p. 553 “so subversive of [the] process that the resulting warrant must be set aside to protect the process and the preventive function it serves”.[^1]
[46] We are also satisfied that the failure to disclose the intention to later obtain an evidence-gathering order did not undermine the s. 12(1)(c) requirement. The evidence sought under the order was of a different character than the evidence sought under the search warrants. The evidence sought under the order was information of a less sensitive nature such as corporate records, facilities involved in production of sulfuric acid, names and duties of employees, market studies, telephone directories, telephone records, reports about production or sale of sulfuric acid and records relating to the creation of the joint venture between the parties. This kind of material was unlikely to be destroyed, likely would be available in more than one location, and some would be in the public realm. While it might have been better to disclose the intention to later seek the s. 18 order, we are satisfied that failure to disclose that fact had no impact on the sufficiency of the informations.
(5) The validity of the informations to obtain the evidence-gathering orders
[47] We are satisfied that the evidence-gathering orders were properly made. In the informations to obtain these orders Mr. Drapeau made full disclosure of the earlier proceedings respecting the search warrants and the positions taken by counsel for the appellants. The appellants submit that a part of the informations was misleading. The sentence at issue is the following:
Although the appropriate offices for service of the order for the gathering of evidence are, in some cases, the same locations that were searched for records, the informant is advised by [the Anti-trust investigators], and believes that the United States authorities do not have sufficient evidence of the exact location of such relevant records to justify search warrants.
[48] This part of the informations is somewhat confusing. It seems to assume that in order to obtain an evidence-gathering order, the applicant must demonstrate that a search warrant would not be available. However, s. 18 of the Act imposes no such requirement. The judge need only be satisfied that there are reasonable grounds to believe that an offence has been committed and that evidence of the commission of the offence will be found in Canada. If the impugned part of the informations is excised from the informations, they still remain sufficient to justify granting the orders. There was a basis upon which the reviewing judge could find that documents and records not obtained in the execution of the search warrants were in Canada.
THE INTERPRETATION OF THE ACT AND TREATY
[49] The appellants raise three issues that involve the interpretation of certain provisions of the Act and the Treaty. Briefly stated, they are:
(1) What role, if any, does the judiciary have in determining whether an offence, for which the Minister has approved a request for assistance, is an offence within the meaning of the Act?
(2) Are the Sherman Act offences in the instant case ‘offences’ within the meaning of the Act?
(3) Does the Act contain a reciprocal offence requirement?
[50] The arguments raised by the appellants hinge in part on the meaning of the word ‘offence’ defined in s. 2(1) of the Act as follows:
“offence” means an offence within the meaning of the relevant agreement;
The word “agreement” is defined in s. 2(1) of the Act to mean:
“agreement” means a treaty, convention or other international agreement that is in force, to which Canada is a party and that contains a provision respecting mutual legal assistance in criminal matters;
[51] The relevant agreement in this case is the Treaty. Article 1 of the Treaty contains the following definition of the word “offence”:
ARTICLE I
Definitions
For the purpose of this Treaty,
“Offence” means
(a) for Canada, an offence created by a law of Parliament that may be prosecuted upon indictment, or an offence created by the Legislature of a Province specified in the Annex;
(b) for the United States, an offence for which the statutory penalty is a term of imprisonment of one year or more, or an offence specified in the Annex;[^2]
[52] The Sherman Act offences at issue here are contained in s. 1 of the Sherman Act. It reads as follows:
Sherman Act
s. 1 Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.
[53] Against this backdrop, we turn to issue one.
(1) The role of the judiciary
[54] This issue has its genesis in the second issue raised by the appellants. As indicated, the second issue questions whether the Sherman Act offences under consideration are “offences” within the meaning of the Act. The appellants take the position that they are not “offences” within the meaning of “Offence for the United States” as defined in s. 1 of the Treaty because they do not carry with them a mandatory minimum prison term of one year or more. Accordingly, they submit that the issuing judge should not have issued search warrants under s. 12(1)(a) of the Act because there were no reasonable grounds to believe that the Sherman Act offences constituted “Offences for the United States”. They rely upon the same submission in support of their argument that the application judge should have refused to make a sending order in respect of the documents seized under the warrants.
[55] More will be said about that argument shortly. For the moment, suffice it to say that the respondent’s first line of attack on the appellants’ argument is that it is for the Minister, not for the court, to determine whether an offence for which assistance is sought is covered by the Treaty and thus the Act.
[56] The application judge found favour with the respondent’s position. After observing that under s. 12(1)(a) of the Act, a judge issuing a search warrant must be satisfied, among other things, that “there are reasonable grounds to believe an offence has been committed”, she identified the jurisdictional issue as follows:
The question then becomes the extent of the judicial role under section 12 of the Act (and also section 15) as to reasonable grounds to believe an offence has been committed. Is it limited to accepting that the offence definition has been satisfied by the Minister’s decision to approve the request and then only assessing the record regarding reasonable grounds? Or, is it to assess not only whether there are reasonable grounds but also whether the offence for which the Minister has decided to approve the request for assistance is one covered by the Treaty? Or, to state the question somewhat differently, is it part of the role of the issuing judge under section 12 and part of the role of the reviewing judge under section 15 to determine if the Minister’s role under the Act has been carried out properly? (para. 55)
[57] Drawing heavily on the extradition model and cases such as McVey v. United States of America, 1992 48 (SCC), [1992] 3 S.C.R. 475 and Re Russian Federation and Pokidyshev (1999), 1999 3787 (ON CA), 138 C.C.C. (3d) 321 (Ont. C.A.), the application judge concluded, at paragraphs 62 and 63 of her reasons, that despite differences between the extradition scheme and the mutual legal assistance scheme, it was for the Minister, not the court, to determine whether the offence underlying the request for assistance is or is not one covered by the Treaty:
There is difference, of course, between the extradition scheme of the Extradition Act and its applicable treaty and the mutual legal assistance scheme of the Act and the Treaty in terms of judicial roles. Under the Extradition Act, at the committal hearing, the judge is to assess whether certain conduct, if it had occurred in Canada, would justify committal for trial for an offence under Canadian law. This limits the judge to a consideration only of Canadian criminal laws. Under the Act, the issuing judge is to assess whether there are reasonable grounds on the evidence before her that an offence under United States law has been committed. By its very terms, the Act seems to require some consideration of United States criminal laws.
However, in my view, the only judicial role in respect of the meaning of “offence” under both sections 12 and 15 of the Act, is to accept there is an alleged offence for which the requested state is asked to provide assistance, or, in other words, to accept the Minister’s approval of the request and go on to determine whether the evidence affords reasonable grounds that the alleged offence was committed. It is not part of the role of the issuing judge under section 12 or of the reviewing judge under section 15 to determine if the Minister’s role under the Act has been carried out properly.
[58] While there is much to be said for the application judge’s analysis, we prefer to leave the final determination of this issue for another day. We do so because we are firmly of the view (as was the application judge) that if judges do have a role in determining whether an offence for which assistance is sought comes within the Act, the Sherman Act offences in this case are offences within the meaning of the Act. That, of course, is the second issue, to which we now turn.
(2) Are the Sherman Act offences in the present case “offences” within the meaning of the Act?
[59] The appellants submit that the Sherman Act offences underlying the request for assistance do not constitute “offences” under the Act because upon conviction, they do not carry with them a mandatory minimum prison term of one or more years. The respondent counters with the argument that the appellants have misconstrued the meaning of the words “Offence for the United States” as defined in the Treaty. For convenience, the relevant portion of Article 1 of the Treaty is repeated below:
ARTICLE I
Definitions
For the purpose of this Treaty,
“Offence” means
(b) for the United States, an offence for which the statutory penalty is a term of imprisonment of one year or more …
[60] As indicated, the appellants submit that to come within that provision, the offence for which the United States seeks assistance, must, upon conviction, carry with it a mandatory minimum prison term of one or more years. That being so, they maintain that the Sherman Act offences in the present case do not meet that test because although they contemplate a maximum prison term of three years, they do not require a mandatory minimum term of imprisonment of at least one year.
[61] As a matter of precaution, the application judge considered this aspect of the appellants’ argument. She rejected it at para. 64 for the following reasons:
However, if I am wrong and it is part of the judicial role under the Act to determine if the alleged offence is one that is provided for in the Treaty, I also conclude, on a plain reading of both the French and English versions of the definition, that Section 1 Sherman Act offences are included in the Treaty’s definition of “offence”. The respondents’ position in this respect ignores the existence of the word “statutory” in the definition and instead argues possible penalties according to sentencing practices in American courts. I see no support for this position. The respondents also, by their position, effectively insert the words “mandatory” and “minimum” in the definition when they are not necessary to the plain meaning. Section 1 Sherman Act offences carry a statutory penalty of “imprisonment not exceeding three years” and this is clearly within the plain meaning of the Treaty definition of “an offence for which the statutory penalty is a term of imprisonment of one year or more”.
[62] We agree with the analysis and conclusion of the application judge. In particular, we see no reason why the words “mandatory” and “minimum” should be read into the definition of “Offence for the United States” under the Treaty. To do so would be to twist the plain language of the provision and add requirements that are contextually out of place and inconsistent with the fair, large and liberal interpretation to which Acts and Treaties of this nature are entitled.
[63] Writing the words “mandatory” and “minimum” into the “offence” provision for the United States would also lead to the illogical conclusion that the parties to the Treaty intended a gross imbalance in the range of cases for which the United States would be required to assist Canada. In this respect, we note that for Canada, under Article 1 of the Treaty, an offence includes “an offence created by a law of Parliament that may be prosecuted upon indictment”. That definition would of course include hybrid offences, many of which are punishable by a maximum term of six months imprisonment if the Crown elects to proceed summarily. In other words, acceptance of the appellant’s argument would mean that Canada could seek assistance for offences that have a maximum punishment of six months, with no minimum term prescribed, whereas the United States could only seek assistance for offences with a mandatory minimum prison term of one or more years. With respect, we reject such an interpretation. In our view it is unrealistic and contrary to the intention of the parties.
[64] Accordingly, we are satisfied that the Sherman Act offences in the present case are “offences” within the meaning of the Act.
(3) The requirement of reciprocity
[65] The appellants’ final statutory argument hinges on the interpretation of s. 8(1) of the Act. That provision reads as follows:
s. 8(1) If a request for mutual legal assistance is made under an agreement, the Minister may not give effect to the request by means of the provisions of this Part unless the agreement provides for mutual legal assistance with respect to the subject-matter of the request [emphasis added].
[66] The appellants focus on the words “with respect to the subject-matter of the request.” They submit that those words refer to (or at least include) the offence for which the requesting state is seeking assistance and that to determine their true meaning, regard must be had to the organizing principle of reciprocity that informs both the Treaty and the Act. Following that approach, they submit that in enacting s. 8(1) of the Act, Parliament intended that assistance should be denied when the offence for which the requesting state seeks assistance is not, in substance, an offence in Canada.
[67] In support of their position, the appellants rely upon the reasons of Owen‑Flood J. in United States of America v. Stuckey, (1999) 1999 5054 (BC SC), 181 D.L.R. (4th) 144 (B.C.S.C.). In Stuckey, four individuals were charged with money-laundering and related offences in the United States. Pursuant to a request for assistance from the Government of the United States, the Minister of Justice approved, and the Attorney General of British Columbia applied for and obtained, two gathering orders under s. 18 of the Act.
[68] In an application brought by the targets challenging the validity of those orders[^3], Owen-Flood J. considered the meaning of s. 8, Part I of the Mutual Legal Assistance in Criminal Matters Act, S.C. 1988, c. 37 which read as follows:
s. 8 The Minister may not give effect by means of the provisions of this Part to a request unless the relevant treaty provides for mutual legal assistance with respect to the subject-matter of the request.[^4]
[69] In his reasons, at pp. 163-64, Owen-Flood J. explained why in his view, s. 8 should be construed to contain a reciprocal offence requirement:
I find this means that when Canada receives a request under the Treaty from the United States of America, Canada must have, under the terms of the Treaty, a reciprocal right to make a request to the United States of America on the same subject matter. In other words, the subject matter on which the request is founded must come within the definitions given in the Treaty as to the meaning of the term “offence” both in Canada and in the United States of America. There must be a particular reciprocity in that any offence in the request must also be, in substance, an offence within the Requested State.
As Professor Shearer notes, supra, at 137-138, a purpose of the reciprocity requirement is to avoid “the social conscience of a State” being “embarrassed” by the provision of legal assistance upon certain foreign requests. It does so by ensuring that a State is not required to provide assistance in situations for which it, in return, would never have occasion to make demand. He adds:
The point is by no means an academic one even in these days of growing uniformity of standards; in Western Europe alone sharp variations are found among criminal laws relating to such matters as abortion, adultery, euthanasia, homosexual behaviour, and suicide.
This observation is insightful in relation to the Canada-United States Treaty. For example, in the State of Alabama, adultery and non-marital fornication are apparently offences that can be punishable by imprisonment for over a year. Likewise, sodomy either is or until very recently was an offence in numerous American states. Accordingly, these offences may form the subject matter of a request by the United States for Canadian assistance. However, s. 8 of the Act prevents the Minister of Justice from approving such requests for assistance on the grounds that these offences are not offences in Canada. The Canadian social conscience is thereby spared any shock resulting from a Minister of Justice approving such a request.
I note, however, that while s. 8 of the Act mandates that reciprocity exist for any particular request, it does not require the higher standard of dual criminality. The conduct outlined in the request, if it had occurred in Canada, does not have to constitute the counterpart offence(s) of those in the request. I will return to this point.
[70] Owen-Flood J. then went on to consider whether his proposed interpretation of s. 8 of the Act conflicted with Article II, s. 3 of the Treaty which reads as follows:
Article II
s. 3 Assistance shall be provided without regard to whether the conduct under investigation or prosecution in the Requesting State constitutes an offence or may be prosecuted by the Requested State.
[71] Without elaborating on his analysis, he concluded at p. 166, that his proposed interpretation of s. 8 of the Act did not collide with Article II, s. 3 of the Treaty:
Thus, in essence, the Treaty prohibits an assessment of dual criminality. Assistance cannot be denied on the grounds that the conduct would not constitute an offence in Canada. However, the Treaty allows for, and the Act demands, an assessment of reciprocity. Assistance must be denied if the offences that are the subject matter of the request are not, in substance, offences in Canada.
Hence, foreign requests such as the Alabama example cannot lawfully proceed to the fruition of implementation. Canada would not be in a position to make a similar request of the United States of America because adultery, sodomy and non-marital fornication in Alabama have no substantial counterpart offences in Canada. The reciprocity mandated by s. 8 would be lacking insofar as the subject matter of the request is concerned.
[72] Having interpreted s. 8 of the Act in the above manner, Owen-Flood J. directed his attention to the offences for which the United States Government was seeking assistance. He did so with a view to determining whether they had “their substantive counterparts in Canada”. In the end, he concluded that they did and he dismissed the application.
[73] An appeal by the applicants to the British Columbia Court of Appeal proved unsuccessful (see United States of America v. Stuckey (2000), 2000 BCCA 646, 194 D.L.R. (4th) 729). For present purposes, all that need be said about the appellate decision is that the court did not endorse or reject Owen-Flood J.’s interpretation of s. 8 of the Act. Writing for a unanimous court, Southin J.A. explained why, in her view, Owen-Flood J.’s analysis of that provision was unnecessary in the circumstances:
In my opinion, whether a statute to give assistance to foreign governments, must have, to pass constitutional muster, a requirement of double criminality, is not an issue which properly arises in this case and ought never to have been addressed in the court below. I say that because the offences set out in the order of Dohm A.C.J. have their Canadian counterpart. There is double criminality and counsel do not argue to the contrary.
Thus there is simply no factual underpinning for the constitutional arguments put forward here. The order under appeal was rightly made but, by so concluding, we do not in any way give our concurrence to the reasons of the learned trial judge on the constitutional questions posed to him [reported 1999 5054 (BC SC), 181 D.L.R. (4th) 144; supplementary reasons 2000 BCSC 171, 184 D.L.R. (4th) 328, 144 C.C.C. (3d) 184] [paras. 11 & 12].
[74] Mindful of the appellate decision in Stuckey, the appellants in the present case nonetheless rely upon Owen-Flood J.’s analysis of s. 8 of the Act and urge us to adopt it. The same argument was advanced before the application judge. In rejecting it, she expressed her respectful disagreement “with that part of the court’s decision in Re Stuckey interpreting s. 8 of the Act as requiring reciprocity.” Her reasons for so concluding are reproduced in part below:
In my view, section 8 simply ensures that the Minister only gives effect to an international obligation if it is one that is created under the Treaty or any other treaty or “agreement” creating international obligations to which the Act applies. The Act applies to a multitude of treaties at the present time and under the Act the Minister is not to give effect to a request unless the treaty or agreement creates an international obligation to do so. With respect to this Treaty, there is only an international obligation to give effect to requests regarding certain “offences” as defined in the Treaty and to give certain kinds of assistance also as set out in the Treaty and subject to various stipulated limitations. Under the Act, the Minister can only give effect to a request for legal assistance under the Treaty if the offence is within Canada’s international obligations as set out in the Treaty and if the kinds of assistance requested are also within Canada’s international obligations, again as set out in the Treaty.
In conclusion, I find that section 8 of the Act does not require reciprocity in terms of dual criminality. It simply states that the Minister is not to give effect to a request unless the international obligation to do so is provided for in the Treaty (paras. 73 & 74).
[75] For reasons that will become apparent, we are satisfied that the application judge reached the correct conclusion as to the meaning of s. 8(1) of the Act. It follows that we respectfully disagree with Owen-Flood J.’s analysis.
[76] In our view, there are several reasons for holding that s. 8(1) does not incorporate “a reciprocal offence requirement.” Before identifying them, in fairness to the appellants, we think that their position should be clearly set out so as to dispel the notion that they are advocating a “dual criminality” requirement in s. 8(1). Simply put, in light of Article II, s. 3 of the Treaty, that is not their position. For convenience, that Article is repeated below:
Article II
s. 3 Assistance shall be provided without regard to whether the conduct under investigation or prosecution in the Requesting State constitutes an offence or may be prosecuted by the Requested State [emphasis added].
[77] The appellants submit, correctly in our view, that Article II, s. 3 of the Treaty addresses the principle of dual criminality and expressly rejects it. The language in that provision, with its focus on conduct, mirrors the interpretation of dual criminality in the extradition context. The following excerpts from pp. 526-528 of La Forest J.’s reasons in McVey make this clear:
… That function [of the extradition hearing] is to determine whether there is sufficient evidence that a fugitive accused has committed an act in the requesting state that would, if committed in Canada, constitute a Canadian crime listed or described in the treaty. In short, and I shall have more to say about this later, what the extradition judge must determine is whether the conduct of the accused would constitute a crime if it had been committed in this country [emphasis in original].
The trial judge in the United States, of course, deals with the offence under the law of that country. The identity of that offence can be determined by reference to the text of that law supplied with the requisition. The extradition judge in Canada, on the other hand, is concerned with whether the underlying facts of the charge would, prima facie, have constituted a crime listed in the treaty if they had occurred in Canada. That is what is meant by saying that double criminality is conduct based. The courts of both countries deal with the offence under their own law, the law in which they are versed, but each must ascertain whether under that law the facts support the charge.
[78] As indicated, the appellants do not contend that s. 8(1) incorporates a “dual criminality” requirement. Rather, they maintain that it contains a “reciprocity of offence” requirement which they define as “a reciprocal right to make a request with respect to the same subject matter.” In other words, according to the appellants, the focus of s. 8(1) is not on conduct but on the content of the offence for which assistance is being sought and specifically, whether an offence exists in Canada that can be said to be the substantial counterpart of the foreign offence.
[79] With that distinction in mind, the appellants submit that the reasons of the application judge must be viewed with caution because throughout them, she equates the term “reciprocity” with the term “dual criminality”.[^5] While we appreciate the appellants’ concern, it does not alter our conclusion that the application judge came to the correct interpretation of s. 8(1) of the Act. In fairness to the application judge, the two terms may not have been delineated before her as clearly as they were before us. Regardless, for reasons that follow, we are satisfied that s. 8(1) does not contain a “reciprocity of offence” requirement.
[80] First, we believe that the distinction proposed by the appellants, namely that s. 8(1) does not require dual criminality but does require offence-based reciprocity is formalistic, not in keeping with the spirit and intent of the Treaty and capable of leading to illogical results. If correct, it would mean that Canada could not provide assistance in cases where an American offence is without substantive Canadian counterpart, even though the conduct underlying the American offence would, if committed in Canada, constitute a criminal offence. In consequence, Canada could well find itself in the illogical situation of being unable to render assistance in the investigation of a particular offence but quite able, in respect of the same offence, to extradite someone for trial, notwithstanding the far graver consequences attaching to extradition than legal assistance. With respect, that makes no sense.
[81] That is not to say that we as a nation should be unconcerned about the prospect of rendering assistance in circumstances where, for example, the foreign law is one that we do not adhere to and find socially or politically unacceptable. On the contrary, the concern is a legitimate one. Unlike the appellants, however, who argue that it is addressed under s. 8 (1) of the Act in the form of a reciprocal offence requirement, we believe that the authority to deal with such matters has been entrusted to the Minister of Justice under Article V of the Treaty headed “Limitations on Compliance”. Specifically, s. 1(b) of that Article provides:
s. 1 The Requested State may deny assistance to the extent that …
(b) execution of the request is contrary to its public interest as determined by its Central Authority.
[82] Under Article 1, “Central Authority” is defined for Canada as “the Minister of Justice and officials designated by him”. “Public Interest” is defined as “any substantial interest related to national security or other essential public policy”.
[83] Manifestly, the words “other essential public policy” are very broad and, in our view, they provide the Minister with the authority needed to refuse a request for assistance in circumstances where, for example, the lending of assistance in respect of a particular offence unknown to our law would shock Canada’s collective social conscience.
[84] Secondly, the plain wording of s. 8(1) of the Act does not support the reciprocal offence requirement advocated by the appellants. On the contrary, to the extent that the words “with respect to the subject-matter of the request” refer, among other things, to the offence under investigation in a foreign state, we see no reason why the word “offence” should take on a different meaning from the meaning ascribed to it in the Treaty. As indicated earlier in these reasons, the Act itself defines the word “offence” to mean “an offence within the meaning of the relevant agreement”. In the present case, given that the word “offence” in the Treaty has a different meaning for Canada than for the United States, it seems apparent to us that insofar as s. 8(1) is concerned, so long as the Minister is satisfied that the offence under investigation by the United States is one that is covered by the Treaty, using the definition of offence for the United States, nothing more is required. Under s. 8(1), the Minister would then go on to determine whether the type of assistance sought was covered by the Treaty. If so, the requirements of s. 8(1) would have been met.
[85] We recognize that such an interpretation places Canada in the position of providing assistance in situations for which it would never have occasion to make a demand. But that is precisely what the Treaty envisages. Grafting a reciprocal offence requirement onto s. 8(1) of the Act would not only be out of step with the Treaty, it would fly directly in its face.
[86] Interpreting s. 8(1) in the manner we suggest takes into account the fact that under s. 8(1), the Minister may only implement a request for assistance if “the relevant treaty” provides for mutual legal assistance with respect to the subject-matter of the request. In other words, under the Act, the Minister’s authority to give effect to a request for assistance is limited by the four corners of the relevant Treaty. The significance of that limitation becomes apparent when a comparison is made of the various treaties that Canada has entered into with different nations. Without going into detail, it is apparent that the various treaties differ in terms of the types of assistance that may be rendered, and the types of offences for and circumstances under which investigative assistance may be given, including in some instances, a requirement of dual criminality.
[87] For these reasons, we agree with the application judge that s. 8(1) of the Act does not contain a reciprocal offence requirement. Accordingly, we would not give effect to this argument.
The reciprocal offence requirement has been met
[88] Had we interpreted s. 8(1) to contain a reciprocal offence requirement, it would not have assisted the appellants. In our view, the Sherman Act offences for which the United States seeks assistance are in essence, restrictive trade practice offences and their Canadian counterparts are found in s. 45 of the Competition Act.
[89] Manifestly, the restrictive trade offences in the two jurisdictions are not identical. They do, however, relate to the same subject matter, they have the same object, and they address fundamentally the same conduct. As Gonthier J. observed in R. v. Nova Scotia Pharmaceutical Society, 1992 72 (SCC), [1992] 2 S.C.R. 606 at 650, under the Sherman Act, “American antitrust law has developed the two paradigms of adjudication known as the ‘per se rule’ and the ‘rule of reason’” and while the “distinction between the two is not airtight,” s. 45(1)(c) of the Act (then s. 32(1)(c) “lies somewhere on the continuum between a per se rule and a rule of reason”.
[90] As Gonthier J.’s succinct comparison illustrates, this is not a situation in which the subject matter of the American law is unknown to our law or contrary to our basic values. On the contrary, the offences in the two jurisdictions are closely connected and in our view, the nexus identified by Gonthier J. is sufficient to meet the “substantive counterpart” test. Thus, had we concluded that s. 8(1) does contain a reciprocal offence requirement, that requirement would have been met in this case. For that reason as well, we would not give effect to this ground of appeal.[^6]
FAILURE TO SEAL THE FILE AND MAKE A NON-PUBLICATION ORDER
[91] On May 27, 2002, at the outset of the s. 15 hearing, the application judge continued (on consent of the parties) a sealing order made by Lalonde J. on July 30, 2001. Among other things, Lalonde J.’s order required that “all documents, records, information and orders filed or made in these proceedings shall be sealed and kept confidential” pending the s. 15 hearing or further order of the court. In making that order, Lalonde J. stated that his intention was “to maintain the status quo in this file” until the s. 15 hearing.
[92] It should be noted that Lalonde J.’s order was not made on consent. The Commissioner of Competition had requested that the file, which had to date been sealed at the Commissioner’s behest, be unsealed except in relation to the unedited informations that had been filed in support of the search warrants and evidence-gathering order. Lalonde J. refused to give effect to the Commissioner’s request for several reasons, one being the appellants’ impending motion to have the search warrants quashed. Lalonde J. also took into account the fact that “no indictment [had] been returned by the Grand Jury” in the United States. In addition, he relied upon the Commissioner’s concession that the appellants had “not committed an offence under the laws of Canada.” Lalonde J. summed up his reasons for refusing to unseal the file as follows:
I have no intention at present to prejudice the interest of innocent persons or corporations. Unsealing documents now would cause the respondents [the company] huge financial expenses to defend themselves, at a time when no indictment has been returned by the Grand Jury in the United States of America, no offences have been committed in Canada and no one is asking for the information.
[93] As indicated, the application judge continued Lalonde J.’s order pending the determination of the s. 15 hearing. In her reasons of October 1, 2002 authorizing the sending order in relation to the items seized under the search warrants, she refused to continue the sealing order further except as it related to the unedited informations. She also refused to grant a limited publication ban to prevent disclosure of the appellants’ identity and the nature of the industry under investigation in the United States.
[94] The application judge provided comprehensive reasons for refusing to grant the relief sought by the appellants. In the end, after instructing herself on the applicable legal principles, she stated, at para. 93, that she was “not satisfied that the importance of access to any of the information related to these proceedings is outweighed by the possible commercial effects on the [appellants] of its disclosure” [emphasis added]. In reaching that conclusion, the validity of the search warrants was of course no longer in issue. That factor, it will be recalled, was one of the factors upon which Lalonde J. focused in deciding to preserve the status quo.
[95] In the circumstances, we are not persuaded that the application judge erred in exercising her discretion as she did. In essence, it was her conclusion that any possible prejudice to the appellants’ commercial interests did not outweigh in importance the cardinal principle of public access to judicial proceedings. We think she was entitled to come to that conclusion.
[96] In so finding, we take particular note of the views expressed by Dickson J. in A.G. (Nova Scotia) v. MacIntyre, 1982 14 (SCC), [1982] 1 S.C.R. 175. At issue in that case was the right of the public to inspect the material filed in support of several search warrants that had been issued and executed. At p. 185, Dickson J. made the following apposite observation:
Let me deal first with the ‘privacy’ argument. This is not the first occasion on which such an argument has been tested in the courts. Many times it has been urged that the ‘privacy’ of litigants requires that the public be excluded from court proceedings. It is now well established, however, that covertness is the exception and openness the rule. Public confidence in the integrity of the court system and understanding of the administration of justice are thereby fostered. As a general rule the sensibilities of the individuals involved are no basis for the exclusion of the public from judicial proceedings.
[97] After explaining why, in his view, the broad principle of “openness” in judicial proceedings applied not only at the trial stage but also at the pre-trial investigative stage, Dickson J. continued, at p. 186, as follows:
At every stage the rule should be one of public accessibility and concomitant judicial accountability; all with a view to ensuring there is no abuse in the issue of search warrants, that once issued they are executed according to law, and finally that any evidence seized is dealt with according to law.
In my view, curtailment of public accessibility can only be justified where there is present the need to protect social values of superordinate importance. One of these is the protection of the innocent.
[98] Expanding on the notion that protection of the innocent from unnecessary harm is a valid and important policy consideration, Dickson J. observed at p. 187:
In my view that consideration overrides the public access interest in those cases where a search is made and nothing is found. The public right to know must yield to the protection of the innocent.
[99] That, of course, is not this case. Numerous documents were seized from the appellants pursuant to the search warrants. Standing alone, that would not necessarily win the day for public access, especially if the appellants were truly innocent third parties.
[100] But on the facts of this case, the appellants can hardly be described as innocent third parties, at least in so far as the proceedings in the United States are concerned. In that regard, we have gone to some length to demonstrate that even on the edited informations filed with the court, reasonable grounds exist to believe that the appellants have committed offences under the Sherman Act. That is significant because the appellants’ primary concern about adverse publicity relates to possible commercial prejudice that they may suffer if a treble damages class action is commenced against them in the United States. Time alone will tell whether such an action is commenced. But if it is, it will occur in the United States where, we repeat, based on the edited informations, reasonable grounds exist to believe that the appellants have engaged in conduct that offends the Sherman Act. Viewed that way, we do not believe that the “protection of the innocent” exception, standing alone or combined with the possibility of economic harm to the appellants, should prevail over public accessibility.
[101] Accordingly we would not give effect to this ground of appeal.
CONCLUSION
[102] For the reasons stated, while we would give leave on the various issues raised, we would dismiss the appeal. In view of this disposition, we need not decide the additional issue raised by the respondent concerning the burden of proof in a s. 15 hearing. Finally, we accept the joint submission of the parties that the proceedings at hand are criminal in nature and thus, no costs award should be made.
Signed: “M. Rosenberg J.A.”
“M.J. Moldaver J.A.”
“I agree Janet Simmons J.A.”
RELEASED: “M.R.” MAY 1, 2003
[^1]: This passage from R. v. Morris was referred to with apparent approval by LeBel J. in R. v. Araujo at para. 54.
[^2]: It is common ground that the Sherman Act offences are not “specified in the Annex.”
[^3]: The challenge was based in part on a submission that if dual criminality was not required under the mutual legal assistance scheme, then the scheme contravened the applicants’ rights under ss. 7 and 8 of the Charter of Rights and Freedoms.
[^4]: Although the wording differs somewhat from the wording of the present provision, the differences are not significant and they do not impact on our analysis.
[^5]: See the wording of Issue 3 and paragraphs 67 and 74 of her reasons. For example, Issue 3 reads: Whether The Treaty And The Act Require There To Be “Reciprocity” In Terms Of “Dual Criminality”.
[^6]: Although not raised by the parties, we note that the Competition Act has recently been amended to add a new Part III, “Mutual Legal Assistance” for treaties that provide for mutual legal assistance in competition matters, other than a matter in respect of which the Mutual Legal Assistance in Criminal Matters Act applies.