Her Majesty the Queen v. Bruce Power Inc. et al. [Indexed as: R. v. Bruce Power Inc.]

98 O.R. (3d) 272

Court of Appeal for Ontario,

Feldman, MacPherson and R.P. Armstrong JJ.A.

July 17, 2009

Charter of Rights and Freedoms -- Remedies -- Stay of proceedings -- Crown in occupational health and safety prosecution coming into possession of defence document protected by solicitor-client and litigation privilege -- Document obtained in breach of s. 8 of Charter -- Stay of proceedings not only possible remedy where defence document protected by solicitor-client and litigation privilege comes into hands of Crown but stay being appropriate remedy in circumstances of this case -- Canadian Charter of Rights and Freedoms, ss. 8, 24(1).

Criminal law -- Evidence -- Privilege -- Prejudice to accused presumed where Crown comes into possession of defence document protected by solicitor-client and litigation privilege -- Accused not required to prove actual prejudice -- Crown failing to rebut presumption of prejudice -- Justice of the peace finding that document was obtained in violation of s. 8 of Charter -- Justice of the peace not erring in granting stay of proceedings -- Canadian Charter of Rights and Freedoms, ss. 8, 24(1).

The Crown in a prosecution under the Occupational Health and Safety Act, R.S.O. 1990, c. O.1 came into possession of a defence document (an investigation report) which was protected by solicitor-client and litigation privilege. The Crown sought to have the report admitted into evidence. The justice of the peace found that the report was obtained in breach of s. 8 of the Canadian Charter of Rights and Freedoms and stayed the charges. On appeal to the Court of Justice, the stay was set aside. The accused appealed. [page273]

Held, the appeal should be allowed.

Where the Crown has come into possession of a defence document that is protected by solicitor-client and litigation privilege, prejudice to the accused will be presumed, and the accused does not have to prove actual prejudice.

Not every breach of solicitor-client privilege will call for a stay of proceedings. Some breaches of privilege are trivial. However, in the circumstances of this case, the appeal judge erred in reversing the decision of the justice of the peace to grant a stay. She failed to give any credit to the justice of the peace's finding that the report clearly set out items that could well be used to the disadvantage and prejudice of the accused. She also gave little or no weight to the failure of the Crown to rebut the presumption of prejudice. A stay of proceedings was the appropriate remedy.

APPEAL from the judgment of Morneau J. of the Ontario Court of Justice dated November 13, 2007 allowing an appeal from the stay of proceedings.

Cases referred to Celanese Canada Inc. v. Murray Demolition Corp., [2006] 2 S.C.R. 189, [2006] S.C.J. No. 35, 2006 SCC 36, 269 D.L.R. (4th) 193, 352 N.R. 1, J.E. 2006-1518, 215 O.A.C. 266, 30 C.P.C. (6th) 193, 50 C.P.R. (4th) 241, EYB 2006-108007; MacDonald Estate v. Martin, 1990 32 (SCC), [1990] 3 S.C.R. 1235, [1990] S.C.J. No. 41, 77 D.L.R. (4th) 249, 121 N.R. 1, [1991] 1 W.W.R. 705, J.E. 91-85, 70 Man. R. (2d) 241, 48 C.P.C. (2d) 113, 24 A.C.W.S. (3d) 553, consd Other cases referred to Canada (Privacy Commissioner) v. Blood Tribe Department of Health, [2008] 2 S.C.R. 574, [2008] S.C.J. No. 45, 2008 SCC 44, EYB 2008-137487, J.E. 2008-1398, [2008] CLLC Â210-030, 376 N.R. 327, 294 D.L.R. (4th) 385, 67 C.P.R. (4th) 1, 74 Admin. L.R. (4th) 38, 168 A.C.W.S. (3d) 411; Lavallee, Rackel & Heintz v. Canada (Attorney General), [2002] 3 S.C.R. 209, [2002] S.C.J. No. 61, 2002 SCC 61, 216 D.L.R. (4th) 257, 292 N.R. 296, [2002] 11 W.W.R. 191, J.E. 2002-1713, 4 Alta. L.R. (4th) 1, 312 A.R. 201, 217 Nfld. & P.E.I.R. 183, 164 O.A.C. 280, 167 C.C.C. (3d) 1, 3 C.R. (6th) 209, 96 C.R.R. (2d) 189, [2002] 4 C.T.C. 143, 2002 D.T.C. 7267, 54 W.C.B. (2d) 401; Maranda v. Richer, [2003] 3 S.C.R. 193, [2003] S.C.J. No. 69, 2003 SCC 67, 232 D.L.R. (4th) 14, 311 N.R. 357, J.E. 2003-2138, 178 C.C.C. (3d) 321, 15 C.R. (6th) 1, 113 C.R.R. (2d) 76, 59 W.C.B. (2d) 553; R. v. Carosella (1997), 1997 402 (SCC), 31 O.R. (3d) 575, [1997] 1 S.C.R. 80, [1997] S.C.J. No. 12, 142 D.L.R. (4th) 595, 207 N.R. 321, J.E. 97-358, 98 O.A.C. 81, 112 C.C.C. (3d) 289, 4 C.R. (5th) 139, 41 C.R.R. (2d) 189, 33 W.C.B. (2d) 226; R. v. McClure, [2001] 1 S.C.R. 445, [2001] S.C.J. No. 13, 2001 SCC 14, 195 D.L.R. (4th) 513, 266 N.R. 275, J.E. 2001-564, 142 O.A.C. 201, 151 C.C.C. (3d) 321, 40 C.R. (5th) 1, 80 C.R.R. (2d) 217, 48 W.C.B. (2d) 514; R. v. Regan, [2002] 1 S.C.R. 297, [2002] S.C.J. No. 14, 2002 SCC 12, 209 D.L.R. (4th) 41, 282 N.R. 1, J.E. 2002-377, 201 N.S.R. (2d) 63, 161 C.C.C. (3d) 97, 49 C.R. (5th) 1, 91 C.R.R. (2d) 51, 52 W.C.B. (2d) 150 Statutes referred to Canadian Charter of Rights and Freedoms, ss. 7, 8, 11, (d), 24(1) Occupational Health and Safety Act, R.S.O. 1990, c. O.1

Mark D. Contini and David G. Cowling, for appellants. David R. McCaskill, for respondent Ministry of Labour. [page274]

The judgment of the court was delivered by

R.P. ARMSTRONG J.A.: -- Introduction

[1] This case comes to the court by way of leave to appeal from the Ontario Court of Justice on two questions: (i) When the Crown has come into possession of a defence document that is protected by solicitor-client and litigation privilege, does the accused bear the burden of proving actual prejudice or will prejudice be presumed? (ii) Additionally, in such circumstances, must the charges be stayed or is a lesser remedy appropriate?

[2] In a prosecution under the Occupational Health and Safety Act, R.S.O. 1990, c. O.1 (the "OHSA"), the Crown sought to have admitted into evidence an investigation report found to be protected by solicitor-client privilege. The report was also found to have been obtained in breach of s. 8 of the Canadian Charter of Rights and Freedoms. A justice of the peace granted a stay of the charges against the appellants based on an abuse of process including breaches of ss. 7 and 11(d) of the Charter. On appeal to the Ontario Court of Justice, the stay of the charges was set aside. The appellants appeal to this court pursuant to the grant of leave to appeal. Background

[3] On January 21, 2002, an employee of Vipond Inc., a subcontractor of Bruce Power Inc., was seriously injured in a fall while working at the nuclear power plant in Tiverton, Ontario.

[4] On the day of the accident, Inspector Peter Martin (the "Inspector") of the Ministry of Labour (the "MOL") attended at the power plant and commenced an investigation into the accident.

[5] Immediately after the accident, in-house counsel for Bruce Power contacted outside counsel for legal advice in anticipation that charges would be laid by the MOL under the OHSA.

[6] Outside counsel advised that Bruce Power undertake its own investigation of the accident with the purpose of producing a report for use by counsel in providing legal advice to the company and its employees and for use in the defence of the anticipated charges under the OHSA against the company and its employees.

[7] On the day following the accident, an investigation team was created, which included both management and union [page275] employees. Ian Ritchie, a representative of the Power Workers' Union, was a member of the team. Terms of reference were produced, which expressly provided that the investigation was undertaken in contemplation of litigation and that all documents created during the investigation, including the investigation report, were to be placed in the custody of Bruce Power's legal department where their confidentiality would be maintained.

[8] Five members of the investigative team, including Mr. Ritchie, conducted interviews of a number of people between January 22, 2002 and February 4, 2002. The people who were interviewed were expressly told, prior to the interview, that any report of the interview would remain confidential for use by legal counsel in anticipation of the charges under the OHSA. They were also advised that information obtained from the interviews would not be provided to the MOL or any other third party.

[9] A draft investigation report was prepared and was clearly marked in large, bold type, "Confidential". The draft report did not identify people by name. However, people were identified by their job classification or job description. It was circulated to team members with instructions in writing to keep the information confidential. They were also instructed to return or destroy all copies of the report in their possession.

[10] All members of the team, except Mr. Ritchie of the Power Workers' Union, returned their copies of the report. When the issue was raised with Mr. Ritchie, he gave an undertaking that he would destroy his copies of the report. He subsequently resiled from that undertaking.

[11] At some point in early 2002, the Inspector was made aware of the existence of the report by Mr. Ritchie, who requested the Inspector to order production of the report. When in-house counsel learned of this request, he advised the Inspector that the report was privileged and he took no steps to require production.

[12] The MOL investigation under the Inspector was completed in June 2002. On December 19, 2002, the Inspector swore informations against Bruce Power, Troy Ritchie (no relation to Ian Ritchie) and John Burley alleging breaches of the OHSA.

[13] The trial of the charges was scheduled to proceed in March 2004, but was adjourned to November 15, 2004.

[14] On April 29, 2004, the Inspector, in the company of Crown counsel, from the MOL, responsible for prosecuting the charges, attended the home of Mr. Ritchie. During the course of that meeting, counsel for the Crown and the Inspector came into possession of a copy of the report, which Mr. Ritchie had [page276] undertaken to destroy. In the proceedings before the justice of the peace, she was unable to conclude whether Mr. Ritchie volunteered the document or whether Crown counsel and the Inspector requested it. What is clear from the findings of fact of the justice of the peace is that the Inspector was fully aware, since early 2002, that the document was subject to a claim of privilege.

[15] The appellants became aware that the report was in the possession of the Crown in May 2004, when Crown counsel sent a copy to counsel for the appellants as part of the Crown's continuing disclosure obligations. Counsel for the appellants immediately wrote to Crown counsel to voice her objection to the Crown's having come into possession of the report for which privilege was claimed. Further correspondence was exchanged between Crown and defence counsel on this issue.

[16] In a letter dated July 16, 2004, addressed to defence counsel, Crown counsel advised that when she and the Inspector were at Mr. Ritchie's house on April 29, Mr. Ritchie produced the report in response to questions they asked. She further stated:

However, once we saw the report we did ask for a copy and Mr. Ritchie complied with our request by giving us his copy.

[17] What is also clear from the correspondence between the Crown and defence counsel is that counsel for the Crown intended to tender the draft report in evidence at trial.

[18] Counsel for the Crown also disclosed the report to counsel for Vipond Inc. Vipond Inc. had been charged with offences under the OHSA and counsel for the Crown initially intended to use the report in an attempt to reopen the trial against Vipond, which had already concluded with judgment under reserve. Ultimately, she decided not to pursue that course. The Motion for a Stay of Proceedings

[19] Counsel for the appellants brought a motion for a stay of proceedings before Justice of the Peace S. Woodworth which commenced on November 15, 2004. Counsel for the Crown provided to the court a list of witnesses that she intended to call at trial which included Inspector Martin, Mr. Ritchie, four workers employed by Vipond Inc. and four workers employed by Bruce Power. Crown counsel indicated that she intended to subpoena the persons whose names appeared on the face of the report for the purpose of trial. More importantly, counsel for the Crown advised that she would call Mr. Ritchie and the Inspector as witnesses on the motion. Crown counsel also [page277] questioned whether it would be necessary for her to go into the witness box on the motion.

[20] In spite of the express intention to call at least Mr. Ritchie and the Inspector on the motion, counsel for the Crown ultimately decided not to do so.

[21] The stay motion proceeded in two phases. The first phase addressed the issue of whether the report was privileged and, if so, whether the privilege had been waived. The second phase addressed the issue of whether this was a case for a stay of proceedings based upon abuse of process by the Crown.

[22] The justice of the peace delivered her decision on the privilege issue on March 23, 2005. The justice of the peace observed that the report "does not contain within it any legal strategy or thoughts or opinions of legal counsel". She described the report as "primarily informational in its content". However, in her subsequent reasons in the second phase she also said:

The report clearly sets out items that could well be used to the disadvantage and prejudice of the defendants in these proceedings and were intended to be privileged.

[23] In her review of the evidence, the justice of the peace said:

It is clear from the evidence presented that both Mr. Martelli [in-house counsel] and Ms. Fields [outside counsel] continually stressed with the members of the Investigative Team that the report was being prepared in anticipation of litigation and was privileged, and not to be released to anyone outside of the legal department or the Investigative Team. The evidence disclosed that Mr. Martelli went so far as to attend a meeting in order to explain the meaning of the document being prepared in anticipation of litigation and the privilege that would attach to it.

[24] The justice of the peace concluded that the report was subject to both solicitor-client and litigation privilege. She also concluded that the privilege had not been waived. As a result, she ordered that the Crown return the original report obtained from Mr. Ritchie, any copies that had been made of the report and any notes that related to the contents of the report. The issue of whether the appellants were entitled to a stay of proceedings was put over to another day.

[25] In the second phase of the stay motion, counsel for the appellants framed the abuse of process argument on alleged breaches of ss. 7, 8 and 11 of the Charter of Rights and Freedoms in respect of the two individuals and ss. 8 and 11 in respect of Bruce Power Inc.

[26] The justice of the peace delivered her judgment in respect of abuse of process and a stay of proceedings on February 17, 2006. The justice of the peace made the following findings of fact in respect of the conduct of the representatives of the Crown: [page278] (i) The undisputed evidence presented during the course of the privilege application established that Inspector Martin was aware of the existence of the report as far back as early 2002. (ii) The in-house counsel for Bruce Power gave uncontradicted evidence that the Inspector agreed that the report was privileged and took no steps to order disclosure. (iii) The Inspector was present at the time the report was obtained from Mr. Ritchie and it is clear that not only was he aware the draft report existed, he was aware of the claim of privilege made by Bruce Power. (iv) The Crown had taken no steps to limit access to the report and had provided no evidence that it had not used the report to assist in preparing the case against the appellants at trial.

[27] Counsel for the Crown, before the justice of the peace in the second phase of the motion, conceded that there had been a breach of the s. 8 Charter rights of the appellants in the circumstances under which they took the report from Mr. Ritchie. The justice of the peace also observed:

[The replacement Crown] appeared to concede that in respect of the individual defendants only, the prosecution would not be in a position to overcome the inference of irremediable prejudice resulting from this situation based on the ability of those parties to claim the protection of both section 7 and section 11 of the Charter of Rights and Freedoms and the court's more zealous protection of individual rights.

[28] The justice of the peace concluded that in respect of the individual appellants, their rights to a fair trial entrenched in ss. 7 and 11 of the Charter were breached by reason of the prosecutor's conduct in respect of the report. She also concluded that Bruce Power's right to a fair trial pursuant to s. 11 of the Charter was breached.

[29] The justice of the peace concluded that at least one of the individual appellants, Troy Ritchie, gave a statement to the investigation team. The justice of the peace noted:

There was a clear indication that some of the statements that he gave may well have been self-incriminating, and were provided, on the basis that those statements would be subject to solicitor-client and/or litigation privilege and would never be disclosed except to parties acting on behalf of the corporation in preparation for and in the course of trial.

[30] The justice of the peace also concluded that the report contained information "that could well be used to the disadvantage [page279] and prejudice of the defendants in these proceedings and [was] intended to be privileged".

[31] The justice of the peace accepted that it would be possible for the court to exclude the use of the report at trial. However, it would not be possible to discern whether a witness's knowledge of the report provided the basis for his or her evidence:

There is evidence before this court that the prosecution not only reviewed and retained the privileged document in question for a lengthy period, but that the prosecution was well aware of the value of that document to their case and the prejudice of that document to the defendants. Although this court is aware of the contents of the document and may be able to curtail its use in the trial proper it is apparent that other persons who will be called to give evidence have had possession of and reviewed the document in question. It would seem to be a situation where it will not be possible for the court to make a determination in some instances whether the knowledge of the document specifically forms the basis for the evidence being presented.

[32] The justice of the peace further observed that the new counsel for the Crown had given an assurance that he had not discussed the case with the original Crown. However, the justice of the peace concluded that "there is no accurate indication that the knowledge of the contents of [the report] have not been used in the preparation of the prosecution of this matter".

[33] In respect of the appropriate remedy, the justice of the peace concluded as follows:

All the defendants in this case have the right to a fair trial and the right to make full answer and defense, which includes the right to retain and instruct legal counsel in private. Those rights have been infringed by the actions of the prosecution in this case. Having regard to the evidence there is a real risk of prejudice and a strong inference that the fair trial rights of all of the defendants have been fundamentally and irremediably prejudiced. Any steps that the court might take to alleviate the prejudice short of a stay will in my opinion not be sufficient in the circumstances of this particular case to adequately remedy the violation of the defendant's fair trial interests. . . .

There is every indication that the prejudice caused by the abuse will be manifested, perpetuated, or aggravated by the conduct or outcome of the trial, and no other remedy is reasonably capable of removing that prejudice. As a result the charges against the individual defendants Troy Ritchie and John Burley and the corporate defendant Bruce Power Inc. are stayed.

[34] The justice of the peace awarded costs of $38,000 payable by the Crown to the appellants' lawyers. The Appeal to the Ontario Court of Justice

[35] The Crown appealed the decision of the justice of the peace to the Ontario Court of Justice. The appeal was heard in the spring of 2007 by the Honourable Justice Julia A. Morneau. [page280] Judgment was delivered on November 13, 2007. The summary appeal court judge (the "appeal judge") dismissed the appeal in respect of the findings of privilege and waiver of privilege.

[36] The appeal judge dismissed the appeal in respect of the breach of s. 8 of the Charter. She concluded that the appropriate remedy for the s. 8 breach is an order excluding the report from admission into evidence at trial.

[37] The findings in respect of the breaches of ss. 7 and 11(d) of the Charter were set aside. The appeal judge was unable to discern what subsection of s. 11 the justice of the peace was relying on but assumed that it was s. 11(d).

[38] The appeal judge made the following order in respect of ss. 7 and 11(d):

The respondents' application relating to abuse of process and violations of the Charter under sections 7 and 11(d) remains to be determined before the trial Justice at the conclusion of the trial or if necessary to be revisited during the course of the trial.

[39] The appeal judge concluded that the findings in respect of ss. 7 and 11 resulting in abuse of process were premature. She stated:

The abuse of process application including the sections 7 and 11 issues should have been deferred.

It was appropriate for the Justice to understand the abuse of process argument. However, she should have deferred her determination of that issue until she had heard trial evidence. With an exclusion of [the] report the trial could have proceeded. If necessary [t]he defence could have raised the issue again, either at the conclusion of trial or at some earlier point if necessary.

[40] Finally, the appeal judge set aside the costs order made against the Crown and directed that the case proceed to trial.

[41] The appeal judge said that her conclusion concerning the stay "would have been different had the draft report contained any advice and/or recommendations from legal counsel". This Appeal (i) Solicitor-client privilege

[42] At the outset, I should make it clear that the finding that the report is protected by solicitor-client and litigation privilege is not challenged in this court.

[43] The Supreme Court of Canada has made it abundantly clear that solicitor-client privilege is fundamental to the administration of justice in Canada. It is no longer simply an evidentiary rule and has become a general principle of substantive law: see Maranda v. Richer, 2003 SCC 67, [2003] 3 S.C.R. 193, [2003] S.C.J. No. 69. [page281]

[44] In Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44, [2008] 2 S.C.R. 574, [2008] S.C.J. No. 45, at para. 9, Binnie J. said:

Solicitor-client privilege is fundamental to the proper functioning of our legal system. The complex of rules and procedures is such that, realistically speaking, it cannot be navigated without a lawyer's expert advice. It is said that anyone who represents himself or herself has a fool for a client, yet a lawyer's advice is only as good as the factual information the client provides. Experience shows that people who have a legal problem will often not make a clean breast of the facts to a lawyer without an assurance of confidentiality "as close to absolute as possible":

[S]olicitor-client privilege must be as close to absolute as possible to ensure public confidence and retain relevance. As such, it will only yield in certain clearly defined circumstances, and does not involve a balancing of interests on a case-by-case basis. (Citations omitted)

[45] In R. v. McClure, 2001 SCC 14, [2001] 1 S.C.R. 445, [2001] S.C.J. No. 13, Major J. said, at paras. 2 and 4:

Solicitor-client privilege describes the privilege that exists between a client and his or her lawyer. This privilege is fundamental to the justice system in Canada. The law is a complex web of interests, relationships and rules. The integrity of the administration of justice depends upon the unique role of the solicitor who provides legal advice to clients within this complex system. At the heart of this privilege lies the concept that people must be able to speak candidly with their lawyers and so enable their interests to be fully represented. . . . . .

Solicitor-client privilege and the right to make full answer and defence are integral to our system of justice.

[46] Finally, in Lavallee, Rackel & Heintz v. Canada (Attorney General), 2002 SCC 61, [2002] 3 S.C.R. 209, [2002] S.C.J. No. 61, at para. 36, Arbour J. said:

Indeed, solicitor-client privilege must remain as close to absolute as possible if it is to retain relevance. Accordingly, this Court is compelled in my view to adopt stringent norms to ensure its protection. (Emphasis added)

[47] This case must be considered within the principled framework established by the Supreme Court of Canada for the protection of solicitor-client privilege and the related Charter right of an accused person to a fair trial. (ii) The nature of the breach of solicitor-client privilege in this case

[48] Although the justice of the peace referred to the report as primarily informational, she recognized that it was more than [page282] that. She pointed out that the report contained items that "could well be used to the disadvantage and prejudice of the defendants". In my view, it would be difficult, if not impossible, for a witness who has read the report to erase its contents from his or her consciousness. Moreover, it would be difficult, if not impossible, for the court to determine what effect the report may have had on a witness's testimony and whether the prosecutor's strategy has been indirectly, at least, affected by his witnesses having read the report.

[49] When one considers the lofty place that the protection for solicitor-client privilege holds in our law and its underlying rationale, it is simply not conceivable that the Inspector, in particular, could have been justified in taking the report into his possession -- given the finding by the justice of the peace that he knew of its status.

[50] What I find particularly surprising is that the Inspector did not testify on the motion before the justice of the peace to explain the conduct of the prosecution. The obvious inference to be drawn is that he had no credible explanation.

[51] I now turn to the questions directed to be answered by the court. The Questions for the Court (i) When the Crown has come into possession of a defence document that is protected by solicitor-client and litigation privilege, does the accused bear the burden of proving actual prejudice or will prejudice be presumed?

[52] The answer to this question is clearly found in the reasons for judgment of Binnie J. in Celanese Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, [2006] 2 S.C.R. 189, [2006] S.C.J. No. 35, at para. 3:

This Court's decision in MacDonald Estate v. Martin, 1990 32 (SCC), [1990] 3 S.C.R. 1235, makes it clear that prejudice will be presumed to flow from an opponent's access to relevant solicitor- client confidences. The major difference between the minority and majority in that case is that while the majority considered the presumption of risk of prejudice open to rebuttal in some circumstances (pp. 1260-61), the minority would not have permitted even the opportunity of rebuttal (p. 1266).

[53] Celanese involved the execution of an Anton Piller order that resulted in documents of the defendants, which were protected by solicitor-client privilege, falling into the hands of the lawyers for the plaintiffs. Binnie J. distinguished the case from the "moving solicitor" situation in MacDonald Estate [MacDonald Estate v. Martin, 1990 32 (SCC), [1990] 3 S.C.R. 1235, [1990] S.C.J. No. 41]. [page283] He discussed the kind of rebuttal evidence that would be expected from the party who obtained improper access to the privileged documents, at para. 4.

The Anton Piller situation is somewhat different because the searching solicitors ought to have a record of exactly what was seized and what material, for which confidentiality is claimed, they subsequently looked at. Here again, rebuttal should be permitted, but the rebuttal evidence should require the party who obtained access to disclose to the court what has been learned and the measures taken to avoid the presumed resulting prejudice. While all solicitor confidences are not of the same order of importance, the party who obtained the wrongful access is not entitled to have the court assume in its favour that such disclosure carried no risk of prejudice to its opponent, and therefore does not justify the removal of the solicitors. For the reasons that follow, I conclude, contrary to the view taken by the Court of Appeal, with respect, that Celanese and its lawyers did have the onus to rebut the presumption of a risk of prejudice and they failed to do so. (Emphasis in original)

[54] Celanese involved the removal of the solicitors for the plaintiffs from the case. That said, I see no difference in principle between the situations in MacDonald Estate and Celanese and the case at bar.

[55] Counsel for the Crown in this court sought to distinguish Celanese on the basis that it was a civil case in which the appellants were "attempting to utilize a civil onus to achieve a criminal result". I reject this submission. In my view, the above cases support the proposition that when the Crown comes into possession of a defence document that is protected by solicitor-client and litigation privilege, prejudice to the defence will be presumed. The presumption, however, is rebuttable. (ii) Additionally, in such circumstances, must the charges be stayed or is a lesser remedy appropriate?

[56] It is obvious that there is a significant public interest in proceeding to a trial of the merits in cases such as this. A stay of proceedings is the remedy of last resort for the purpose of curing the prejudice visited on the appellants by the breach of their solicitor-client privilege.

[57] LeBel J., writing for the majority in R. v. Regan, 2002 SCC 12, [2002] 1 S.C.R. 297, [2002] S.C.J. No. 14, at paras. 54 and 56, articulated the test for a stay as follows:

Regardless of whether the abuse causes prejudice to the accused, because of an unfair trial, or to the integrity of the justice system, a stay of proceedings will only be appropriate when two criteria are met: (1) the prejudice caused by the abuse in question will be manifested, perpetuated or aggravated through the conduct of the trial, or by its outcome; and [page284] (2) no other remedy is reasonably capable of removing that prejudice.

The Court's judgment in Tobiass, at para. 91, emphasized that the first criterion is critically important. It reflects the fact that a stay of proceedings is a prospective rather than a retroactive remedy. A stay of proceedings does not merely redress a past wrong. It aims to prevent the perpetuation of a wrong that, if left alone, will continue to trouble the parties and the community as a whole, in the future. . . . . .

Any likelihood of abuse which will continue to manifest itself if the proceedings continue then must be considered in relation to possible remedies less drastic than a stay. Once it is determined that the abuse will continue to plague the judicial process, and that no remedy other than a stay can rectify the problem, a judge may exercise her or his discretion to grant a stay. (Citation omitted)

[58] Common sense suggests that every breach of solicitor- client privilege does not attract the ultimate remedy. Some breaches of privilege are trivial and would not call for a stay of proceedings.

[59] In my view, the real issue for consideration in this case is whether the appeal judge erred in reversing the justice of the peace's decision to grant a stay of proceedings. I turn to that issue. Is this an Appropriate Case for a Stay?

[60] The standard of review to be applied to a trial judge's decision under s. 24(1) was described by Binnie J. (in dissent, but agreeing with the majority on this point) in Regan, at para. 139:

I agree with my colleague LeBel J. that the standard of review of the trial judge's decision to grant a remedy under s. 24(1) of the Canadian Charter of Rights and Freedoms was authoritatively stated by Gonthier J. in Elsom v. Elsom, 1989 100 (SCC), [1989] 1 S.C.R. 1367, at p. 1375, as follows: "[A]n appellate court will be justified in intervening in a trial judge's exercise of his discretion only if the trial judge misdirects himself or if his decision is so clearly wrong as to amount to an injustice"; see also R. v. Carosella, 1997 402 (SCC), [1997] 1 S.C.R. 80, at para. 48. In Carosella [R. v. Carosella (1997), 31 O.R. (3d) 575, [1997] 1 S.C.R. 80, [1997] S.C.J. No. 12], Sopinka J. said, at para. 50:

It is only after reaching the conclusion that the discretion has not been exercised in accordance with these principles that an appellate court is entitled to exercise a discretion of its own.

[61] The justice of the peace did a thorough review of the evidence and cited the appropriate authorities in respect of her consideration of whether a stay was the only available remedy. [page285]

[62] The appeal judge concluded that the justice of the peace was premature in ordering the stay. In her view, the trial should have proceeded and the issue of a stay deferred until the end of the trial. That may well be the preferred course in a different case. However, given the record before the justice of the peace and, in particular, the failure of the Crown to rebut the presumption of prejudice, I am not persuaded that she misdirected herself on the appropriate test or that her decision is so clearly wrong as to amount to an injustice.

[63] As I have already said, if the Crown had been able to lead evidence to rebut the presumption of prejudice, it would have done so. To let the trial proceed in these circumstances is, in effect, to permit the Crown to have a second chance to disprove prejudice when the record to date suggests it is incapable of doing so.

[64] In my view, the appeal judge erred in reversing the decision of the justice of the peace. The appeal judge said her decision would have been different had the report contained advice or recommendations of legal counsel. She failed to give any credit to the justice of the peace's finding that the report clearly sets out items that could well be used to the disadvantage and prejudice of the appellants. The appeal judge also gives little or no weight to the failure of the Crown to rebut the presumption of prejudice.

[65] The appeal judge said there was no evidence to support the justice of the peace's finding that the Crown failed to limit access to the report except to counsel for Vipond. The fact is that the Crown's witness list at trial contains the names of four employees from Vipond. There is no evidence as to what distribution, if any, was made of the contents of the report by Vipond. All we know is that counsel for Vipond retrieved the report from his client and returned it to counsel for Bruce Power.

[66] I would allow the appeal and restore the stay of the proceedings on the charges against the appellants.

[67] Finally, I return to the two questions raised by this appeal. In respect of the first question, I would conclude that when the Crown has come into possession of a defence document that is protected by solicitor-client and litigation privilege, prejudice will be presumed. The presumption is rebuttable by the Crown. In respect of the second question, I would conclude that in such circumstances, it does not necessarily follow that the charges should be stayed where a lesser remedy can solve the problem. Costs

[68] The appellants may make submissions as to costs in writing within ten days -- limited to three pages double spaced. The [page286] Crown may make responding submissions as to costs within ten days of the receipt of the appellants' submissions -- limited to three pages double spaced. If necessary, the appellants may then make brief reply to the Crown's costs submissions within three days of the receipt of the Crown's submissions -- limited to two pages double spaced.

Appeal allowed.