Court of Appeal for Ontario

Date: May 1, 2017 Docket: C62547

Judges: Laskin, Gillese and Watt JJ.A.

Between

Attorney General of Canada on behalf of the Kingdom of Belgium Respondent

and

Krishnan Suthanthiran, Best Theratronics Ltd. and Best Medical Belgium Inc. Appellants

Counsel:

• Scott C. Hutchison and Matthew R. Gourlay, for the appellants
• Jeffrey G. Johnston, for the respondent

Heard: September 28, 2016

On appeal from: The decision of Justice Robert L. Maranger, of the Superior Court of Justice dated March 30, 2016, on an application pursuant to s. 15 of the Mutual Legal Assistance in Criminal Matters Act, R.S.C. 1985, c. 30 (4th Supp) to send seized evidence to the Kingdom of Belgium.

Reasons for Decision

Watt J.A.:

Introduction

[1] Best Theratronics ("Best" or "Best Canada") is in the business of cancer diagnosis and treatment. Among other things, Best manufactures cyclotrons, machines that produce radioactive isotopes for use in radiation therapy.

[2] Krishnan Suthanthiran ("Suthanthiran") founded Best and owns the company. Suthanthiran also heads an international group of companies all in the business of providing medical equipment and supplies. The companies involved in this appeal, Best Canada and Best Medical Belgium Inc. ("BMB Inc."), are part of this international group.

[3] Belgian authorities believe that three transactions involving a loan and the purchase and sale of two cyclotrons were criminal offences in the Kingdom of Belgium ("Belgium").

[4] Belgium sought assistance from Canada under the mutual legal assistance treaty between the two countries. On behalf of Belgium, counsel for the Attorney General of Canada obtained a search warrant under s. 12 of the Mutual Legal Assistance in Criminal Matters Act, R.S.C. 1985, c. 30 (4th Supp) ("MLACMA"). The warrant authorized the search of Best's offices in Canada for records relating to what Belgium regarded as the criminal transactions. The premises were searched and records seized.

[5] Suthanthiran says that the records seized under the search warrant included documents that contain a vast array of commercially sensitive information, such as material about the design and manufacture of cyclotrons. This information, of an inestimable value to Best's competitors, is of little value in the potential criminal prosecution.

[6] Belgium sought a sending order under s. 15(1) of MLACMA. Best wanted the order tailored, by the inclusion of appropriate terms and conditions, to ensure that a state-owned competitor of Best did not get access to the commercially sensitive information included in the seized documents.

[7] A judge of the Superior Court of Justice made the sending order, but declined to attach any terms or conditions restricting access to the documents to those involved in the criminal prosecution.

[8] Best and Suthanthiran sought and obtained leave to appeal to this court from the chambers judge. Leave to appeal was granted on a single question of law:

Did the application judge err in law by refusing to impose terms and conditions within the Sending Order that would minimize the risk that the applicants' confidential information would be unnecessarily and inappropriately disclosed to third parties?

[9] These reasons explain why I would answer "no" to the question on which leave to appeal was granted and would dismiss the appeal.

The Background Facts

[10] The background and procedural history essential to an understanding of the issue on which leave was granted are, for the most part, uncontroversial.

The Request for Mutual Legal Assistance

[11] On May 7, 2014, Belgium sought legal assistance from Canada under the Treaty between the Government of Canada and the Government of the Kingdom of Belgium on Mutual Legal Assistance in Criminal Matters (the "Treaty"). Belgium sought assistance in connection with its investigation into three transactions said to involve Suthanthiran, Best Canada and BMB.

[12] Belgium sought issuance of a search warrant under Article 10 of the Treaty in connection with their investigation of several criminal offences under Belgian law, including misuse of company assets; concealing assets in an insolvency; making false statements; using false documents; and money laundering.

The Allegations

[13] Belgian authorities allege that Suthanthiran, through BMB, acquired ownership of a Belgian company specializing in nuclear applications in medicine. Upon acquisition, the company name was changed to BMB SA. Suthanthiran then fraudulently misappropriated funds from BMB SA and its creditors. He transferred these funds for his own benefit through a series of three transactions involving Best Canada.

[14] The first transaction involved a transfer of funds from BMB SA to Best USA. The transfer was said to be a loan. But the funds did not go to Best USA. Instead, the money went to Best Canada. The loan was never repaid.

[15] The second and third transactions involved the purported sale of two cyclotrons by Best Canada to BMB SA. The allegation is that BMB SA paid for the cyclotrons, at least in part, but that no cyclotron was ever delivered to BMB SA and no refund of BMB SA's purchase price was ever made.

[16] In the end, according to Belgian authorities, the loan and purchase payments liquidated BMB SA's assets and contributed to its insolvency.

Ministerial Approval

[17] On July 23, 2014, in accordance with s. 11(1) of MLACMA, the Minister of Justice approved the Belgian request for legal assistance. This approval permitted a competent authority, counsel for the Attorney General of Canada, to apply for a search warrant in accordance with the Request from Belgium.

The Search Warrant

[18] About two months after the Minister's approval, a judge of the Superior Court of Justice granted a search warrant under s. 12(1) of MLACMA. The warrant authorized search for and seizure of records relating to the three specific transactions including:

• correspondence, emails, electronic messages, faxes, notes, memoranda and reports;
• estimates, purchase orders, orders forms and invoices;
• agreements and contracts;
• financial records, accounting ledgers, bank records and receipts;
• drawings, drafts, plans and designs;
• production schedules and details of when production started and ended;
• information on the whereabouts of the finished products; and
• information showing the people in charge of the projects.

The Items Seized under Warrant

[19] Within days of its issuance, Canadian authorities executed the warrant at Best Canada's office. They made a forensic image of Best Canada's server and of the laptop used by its Director of Finance. The items seized from these sources included quotations, the terms and conditions of sales of the company's products, and drawings and documents related to the design and manufacture of cyclotron products.

The Report to the Issuing Judge

[20] About four and one-half months after execution of the search warrant, the author of the information to obtain the warrant (the "ITO") filed a report with the issuing judge as required under s. 14(1) of MLACMA.

The Preliminary Applications

[21] Counsel for the Attorney General of Canada sought a sending order under s. 15(1) of MLACMA on behalf of Belgium. At the outset of the sending hearing, Best and Suthanthiran alleged that Belgium was acting in bad faith and had obtained the search warrant by providing materially misleading information to the issuing judge. To advance their argument that the warrant should be quashed and the seized materials returned, Best and Suthanthiran sought disclosure of the Request to Send on which the Minister acted and also sought leave to cross-examine the author of the ITO.

[22] The judge at the sending hearing dismissed both preliminary applications brought by Best and Suthanthiran. He found that there was no air of reality to the claim that Belgium, through the submission of the ITO, had deliberately and materially misled the judge who issued the search warrant.

The Sending Hearing

[23] About nine months later, the sending hearing resumed. Best and Suthanthiran no longer pursued their challenge to the issuance of the search warrant. However, they resisted issuance of the sending order and, in the alternative, a sending order without terms and conditions adequately protecting against disclosure of their commercially sensitive information.

[24] Suthanthiran testified at the sending hearing. He described what he considered the consequences would be if what was turned over to Belgian authorities included commercially sensitive information about cyclotron design, and production. His principal concern was that Best's main competitor, a company owned in part by the Belgian government, could come into possession of Best's intellectual property in a parallel civil proceeding thereby jeopardizing his business. Suthanthiran persisted in his claim that the purpose that motivated the assistance request was to enable Best's main competitor to gain a competitive advantage by acquisition of commercially sensitive information from Best.

[25] Suthanthiran was not cross-examined.

[26] The sending hearing judge also received in evidence a letter from a Belgian attorney explaining the circumstances in which parties to a parallel civil proceeding may obtain access to materials in the criminal file. In Belgium, parties also have the option, in the course of civil proceedings, of dropping their claim and continuing as a civil party before the criminal court with access to materials in the criminal file. The attorney also pointed out the penal consequences that may ensue when a person uses the materials contained in a criminal file for an improper purpose:

It should however be noted that the Belgian criminal code punishes with a prison sentence of eight days up to one year or with a fine of 156 EUR up to 3,000 EUR (article 460ter Penal Code), any use of information obtained by having received access to/a copy of a criminal file, which aims at or results (i) in obstructing the criminal investigation, or (ii) infringing the privacy of a person mentioned in the file or (iii) in infringing the personal or moral integrity, or the assets, of a person mentioned in the file.

This being said, even if such improper use of the information can be sanctioned as such, this changes nothing to the mere fact that corporate documents containing very confidential or sensitive information will be disclosed at a certain moment to the persons being part to the criminal proceedings (accused persons and civil parties), namely when they will receive access to the criminal file.

[27] In conclusion, the attorney offered this advice:

It is why in practice it is advisable to ask the judge to restrict seized documents to the ones which are strictly related to the offences at stake and, if possible, to avoid the junction of documents which are not linked to the offences making the object of the investigation, certainly when they contain confidential or sensitive information which have nothing to do with such investigated offences.

The Reasons of the Sending Hearing Judge

[28] The sending hearing judge was satisfied that the search warrant had been executed according to its terms and conditions. He found no evidence that Belgium was acting in bad faith or that the Request for assistance was "part of [sic] grand conspiracy to obtain intellectual property belonging to [Suthanthiran and Best]".

[29] The sending order included none of the terms or conditions that Suthanthiran or Best sought to protect their commercially sensitive information. The sending hearing judge found that Suthanthiran's concerns were in large measure answered by Article 17 of the Treaty which restricts the Requesting State from disclosing or using the information except for the purpose for which it was requested without prior consent by the Minister of Justice.

[30] The sending judge further found that the commercially sensitive material was relevant to the criminal fraud investigation. Suthanthiran is in the business of manufacturing cyclotrons and all information related to this business is relevant at the investigative stage. All of the information was therefore included in the sending order.

The Issue on Appeal

[31] The chambers judge granted leave to appeal on a single question of law:

Did the application judge err in law by refusing to impose terms and conditions within the Sending Order that would minimize the risk that the applicants' confidential information would be unnecessarily and inappropriately disclosed to third parties?

The Arguments on Appeal

[32] Suthanthiran and Best ("the appellants") contend that the sending hearing judge erred in law in failing to include terms and conditions that would protect commercially sensitive information. On appeal they request the following terms and conditions: first, that items or copies of items not be disseminated to any private person, party, or litigant who is not involved in an official capacity in the criminal proceedings; and second, if the Belgian authorities wish to make a different use of the seized material, they can re-apply to a Superior Court of Justice for such permission.

[33] Section 15(1)(b) of MLACMA confers a broad discretion to attach terms and conditions to a sending order, including terms and conditions of the nature sought here. And the circumstances in this case warranted their inclusion.

[34] The appellants say that, on its face, s. 15(1) of MLACMA confers a broad discretion on the sending hearing judge. There is first a discretion to grant or refuse a sending order. However, what is of greater importance here is the discretion explicitly included in s. 15(1)(b) to include in the order any terms and conditions that the judge considers desirable.

[35] The appellants accept that the sending hearing judge must exercise the discretion in s. 15(1)(b) in a manner that comports with the language and overall purpose of MLACMA. But the inclusion of terms and conditions of the nature sought here falls well within these parameters. The proposed terms are consistent with the judicial duty to ensure that what is sent is used for a proper purpose, but without compromise of the legitimate interests of those affected.

[36] According to the appellants, several discrete errors infected the trial judge's analysis and warrant setting aside his conclusion.

[37] The appellants say that the sending hearing judge took an overly narrow view of the judicial role in mutual legal assistance proceedings. He ceded the important judicial work of taking cognizance of individual interests to the Minister. He failed to give effect to the persuasive force of several authorities which have imposed restricted or prohibited access terms like those sought here. The inclusion of terms and conditions is not simply a matter for the Minister, else there would be no need for the discretion conferred on the sentencing hearing judge by s. 15(1)(b).

[38] The appellants agree that the sending hearing judge was entitled to assume that Belgium would honour its legal obligations in its use of the material sent from Canada under Article 17 of the Treaty. That Belgium would do so, however, is cold comfort to the appellants who wish to ensure against compromise of their intellectual property. This is work for the sending hearing judge under s. 15, not for Belgium or for the Minister who acts in Belgium's stead under Article 17.

[39] In resisting the appellants' claims of error in the decision of the sending hearing judge, the respondent makes two overarching submissions. The first is that, assuming the sending hearing judge had the authority to include terms and conditions of the nature requested here, he made no error in failing to do so. The second is that inclusion of such terms and conditions would have exceeded the authority for which s. 15(1)(b) of MLACMA provides.

[40] The respondent says that the record is bereft of any evidentiary foundation to impose the requested terms, even if s. 15(1)(b) authorizes their inclusion in a sending order, which the respondent contests. After all, Article 17 of the Treaty prohibits Belgium from disclosing or using information or evidence furnished for purposes other than those stated in the Request. There is no evidence that Belgium would fail to adhere to its disclosure and use obligations under Article 17 of the Treaty. The sending hearing judge found that there was no air of reality to the allegation that Belgium was acting in bad faith. To impose terms or conditions placing limitations on use where this issue is already addressed by the Treaty would impugn the good faith of Belgium. To the extent that the material is disclosed to other parties in the course of the criminal proceedings in Belgium, Belgian law restricts the use of the material to legitimate purposes.

[41] The respondent reminds us that the Minister and the judiciary have different responsibilities at different stages of the mutual legal assistance process. These different responsibilities must be kept in mind in interpreting the judge's role at the sending hearing under s. 15(1) of MLACMA. The judge must be satisfied that the relevant search warrant was executed in accordance with its terms and that the records or things seized should be sent to the Requesting State.

[42] According to the respondent, the discretion conferred on the sending hearing judge under s. 15(1)(b) of MLACMA is not unbounded, rather is circumscribed by the division of responsibility between the Minister and the judiciary under MLACMA; the Treaty provisions; and the objectives of the mutual legal assistance regime. The authority under s. 15(1) must be exercised in a way that is consistent with the Act and provides the widest measure of mutual assistance in criminal matters as required by Article 1 of the Treaty. Any conditions imposed under s. 15(1)(b) cannot infringe on the Minister's authority to ensure compliance with the Treaty, or the Requesting State's authority to conduct proceedings within its jurisdiction in accordance with its own procedure.

[43] The respondent also takes issue with the appellants' reliance on several first instance decisions from British Columbia in which terms and conditions similar to those sought here have been included in sending orders. The respondent says those decisions proceed on an erroneous premise: that the principles developed in extradition proceedings apply equally to mutual legal assistance proceedings. No such rule of equivalence applies as this court has made clear in its rejection of the foundational British Columbia authority of United States of America v. Stuckey, 2000 BCSC 171, 144 C.C.C. (3d) 184.

The Governing Principles

[44] The issue framed by the chambers judge for our determination is a narrow one. However, it is one that is best informed by a brief canvass of the mutual legal assistance process which involves not only a domestic statute, but also the Treaty between Belgium and Canada.

The Nature of Mutual Legal Assistance

[45] Mutual legal assistance is a relationship between the governments of sovereign states. It is a relationship born of a desire on the part of both states to improve the effectiveness of both countries in the investigation, prosecution and suppression of crime through cooperation and mutual legal assistance in criminal matters.

[46] To formalize their mutual legal assistance relationship, the governments of sovereign states enter into treaties that define their obligations and the manner in which requests for and responses to requests for mutual legal assistance are to be carried out. In accordance with the Treaty, each party grants the other the widest measure of mutual assistance in criminal matters.

[47] A country that seeks legal assistance from a Treaty partner makes a Request through its central authority to the central authority of the Requested State. In this case, the request is made to and the response is made by the central authority for Canada – the Minister of Justice – or the officials designated by the Minister.

The Purpose of MLACMA

[48] Treaties between sovereign states require legislation to implement them domestically. MLACMA is domestic legislation that implements various treaties or other arrangements on mutual legal assistance. It sets out the procedure for assistance and cooperation to help treaty partners in their detection and investigation of crime. Among other things, it provides ways for our treaty partners to obtain information from Canadian sources to assist in investigations undertaken by the treaty partner: Russian Federation v. Pokidyshev, 138 C.C.C. (3d) 321 (Ont. C.A.), at paras. 15-16.

[49] As a domestic statute, MLACMA is subject to the usual rules of statutory interpretation, which require courts to look to the words of the statute, the scheme of the Act as a whole and Parliament's intention and purpose in its passage of the legislation: Pokidyshev, at para. 14.

[50] In general terms, MLACMA provides for various methods of evidence collection in Canada, post-collection supervision and conveyance of the evidence collected to the Requesting Treaty Partner. The Act also assigns responsibilities to the Minister, who is responsible for the implementation of the Treaty and the administration of the Act: MLACMA, s. 7(1).

Requests for Assistance

[51] A treaty partner, like Belgium, which seeks legal assistance, institutes its petition by a Request to the Minister of Justice, the central authority in Canada, under para. 1 of Article 15 the Treaty. The Request will describe, among other things, the nature of assistance sought: Treaty, Article 14.

Implementing the Request

[52] When a Request for mutual legal assistance is received, the Minister deals with it in accordance with the Treaty and MLACMA: MLACMA, s. 7(2). Where the Request is for or includes a search and seizure, and the Minister approves the Request, the Minister provides a "competent authority", as defined in s. 2(1) of MLACMA, with the documents and information necessary to apply for a search warrant: MLACMA, s. 11(1).

Issuing the Search Warrant

[53] Search warrants may be granted by a judge of the Superior Court of Justice on an ex parte application by the competent authority designated by the Minister. The evidentiary support for the application is an information on oath which must satisfy certain statutory requirements: MLACMA, ss. 11(2) and 12(1). The judge who issues the warrant may attach conditions to its execution, including but not only conditions relating to the time or manner of its execution: MLACMA, s. 12(2).

[54] The judge who issues a search warrant under MLACMA has a further obligation: to fix a time and place for a hearing to consider the execution of the warrant and the report of the peace officer who executed it: MLACMA, s. 12(3).

The Report to the Issuing Judge

[55] The officer who executes the search warrant issued under MLACMA is required to make a report about its execution, including a general description of the records or things seized under the warrant, and file that report with the issuing court at least five days before the hearing to consider the execution of the warrant: MLACMA, s. 14(1). The Minister is entitled to a copy of the report forthwith after its filing: MLACMA, s. 14(2).

The Sending Hearing

[56] Section 15 of MLACMA governs the hearing fixed by the judge who issued the warrant to consider the execution of the warrant and the report of the peace officer who executed it. For ease of reference, the term "sending hearing" is generally applied to this hearing.

[57] The sending hearing judge must first decide whether the warrant was executed according to its terms and conditions, or whether there is some other reason why what was seized should not be sent to the Requesting Treaty Partner. To inform this decision, the sending hearing judge is required to consider the representations of the Minister, the competent authority, the person from whom the things were seized under the warrant and anybody else who claims to have an interest in anything seized: MLACMA, s. 15(1).

[58] Where the sending hearing judge is not satisfied that there is any reason to return the things seized to their owner or the person from whom they were seized, the judge may order the record or things seized sent to the Requesting Treaty Partner: MLACMA, s. 15(1)(b).

Including Terms and Conditions in the Sending Order

[59] A sending hearing judge who decides to send records or things to the Requesting Treaty Partner is authorized to impose any terms or conditions the judge considers desirable in the sending order. Among the terms are those necessary to give effect to the request; to preserve and return to Canada any record or thing seized; and to protect the interests of third parties: MLACMA, s. 15(1)(b).

[60] Inclusion of terms or conditions is discretionary. The enabling language is the permissive "may", not the presumptive or mandatory "shall": United States of America v. Price, 2007 ONCA 526, 225 C.C.C. (3d) 307, at para. 16. However, this discretion to include terms and conditions is not unbounded. It must be exercised in a way that:

i. comports with the language and overall purpose of MLACMA;

ii. is consistent with the objectives and principles that underlie MLACMA in its broadest sense;

iii. is consonant with the purpose of a sending order; and

iv. accords with the principles of statutory interpretation of criminal legislation.

See, Price, at para. 18; Canada (Attorney General) v. Foster, 215 C.C.C. (3d) 59 (Ont. C.A.), at paras. 54, 56.

[61] Among the objectives of MLACMA, two are of particular significance. First, the Act fulfills Canada's international obligations to cooperate in the investigation of international crime and to provide legal assistance in criminal matters to other states. Second, by offering help to other states, Canada ensures that those same states will, in their turn, provide Canada with assistance when necessary to investigate crimes in which Canada has an interest: Foster, at para. 55.

[62] Both the Treaty and the statute must be construed in a fair and liberal manner so as to favour Canada's fulfillment of its international obligations and Parliament's accomplishment of its legislative objectives: United States of America v. Ross, 100 C.C.C. (3d) 320 (Que. C.A.), at p. 324. See also, Foster, at para. 57.

[63] In Pokidyshev, this court held that there were limits on the discretion of the sending hearing judge. Among other things, the sending hearing judge is not concerned with whether it is advisable to assist the foreign jurisdiction or whether the foreign jurisdiction will comply with any order the judge might make. Both are matters for the Minister: Pokidyshev, at para. 40.

[64] While these comments were made in relation to a sending hearing under s. 20 of MLACMA, regarding an evidence gathering order, the principles are applicable to a s. 15 sending hearing as well: United States of America v. El-Jabsheh, 2002 BCSC 246, 167 C.C.C. (3d) 82, at para. 21.

[65] Some courts have included terms and conditions in sending orders restricting use or disclosure of evidence sent to a requesting treaty partner.

[66] In Stuckey, counsel at the sending hearing agreed on terms restricting access to the material while it was in the United States and governing its return to Canada, but could not agree on the scope of its use by American authorities. The sending hearing judge, Owen-Flood J., agreed that a term that would restrict use of the evidence to the specific criminal proceedings involving Stuckey and his associates could not be included since it could frustrate a legitimate purpose of the Request: to investigate and potentially prosecute other related conduct and other persons then unknown: Stuckey, at paras. 9-10.

[67] Owen-Flood J. then adapted a form of the specialty principle from extradition law to ground a condition that would avoid the potential problems of foreign states making requests for assistance based on reciprocated offences, only to use the material sent for the investigation and prosecution of additional offences for which reciprocity does not exist: Stuckey, at paras. 11-13.

[68] In the end, Owen-Flood J. imposed terms and conditions that:

i. restricted use of the material to criminal proceedings related to the offences listed in the Request;

ii. required United States authorities to apply to the British Columbia Supreme Court if they wished to use the material in connection with criminal proceedings that related to offences other than those listed in the Request;

iii. prohibited dissemination of the things or copies to persons other than those involved in the criminal proceedings for the listed or approved offences; and

iv. directed the return of the items to Canada on final conclusion of the United States proceedings.

See, Stuckey, at para. 15.

[69] In Canada (Attorney General) v. Pacific Network Services, 2003 BCSC 171 (Burnyeat J., in chambers), the sending hearing judge considered that it was always appropriate to include a term in the sending order that restricted use of the items forwarded to criminal proceedings relating to the individuals or entities named in the Request. The items should not be used in other criminal proceedings including those relating to offences other than those listed in the original Request: Pacific Network Services, at para. 19. The sending hearing judge concluded that there was no other way to protect the interests of third parties apart from the inclusion of such a term: Pacific Network Services, at para. 20. In addition to the terms included in the order of Owen-Flood J., the sending judge in Pacific Network Services also included a re-application term in the event that United States authorities wanted to use the material sent in connection with proceedings other than those listed in the original Request. Contrary to the approach taken in Stuckey, such a further request was to be made by the United States of America to Canada, rather than to the sending hearing judge: Pacific Network Services, at para. 27.

[70] Two further authorities warrant brief reference.

[71] In Canada (Attorney General) v. Sharples, 2006 BCSC 1768 (Shabbits J., in chambers), the sending judge refused to include a term requiring the Treaty partner – the United States of America – to make a further request if it (the United States) proposed to use the items sent in proceedings relating to offences other than those listed in the original Request. Such a term, the judge reasoned, simply required the United States to comply with an Article of the Treaty, something the judge was prepared or required to assume and the Minister to supervise: Sharples, at paras. 11 and 16.

[72] But the Sharples court did include a term that the items sent could be used only in connection with criminal proceedings that related to the offence listed in the Request: Sharples, at paras. 25-26. And this despite a term in para. 2 of Article IX of the Treaty that prohibited use or disclosure "for purposes other than those stated in the request without the prior consent of the Central Authority of the Requested State": Sharples, at paras. 13, 25, 26.

[73] A similar term was imposed in United States of America v. Bin, 2016 BCSC 124, 127 W.C.B. (2d) 382. In that case, a condition was imposed that the sent material "may only be used for the purposes of a prosecution for the offences set out in the search warrant, except by further order of this Court": at para. 27.

[74] This court has rejected the approach and analysis taken in Stuckey. The principle of reciprocity as found in the extradition context has no place in the analysis under MLACMA: Canada (Commissioner of Competition) v. Falconbridge Ltd., 173 C.C.C. (3d) 466, at paras. 76-87.

Supervision of Use of Material Sent

[75] Two provisions govern disclosure and use of materials sent to the Requesting Treaty Partner.

[76] First, the Treaty.

[77] Article 17 of the Treaty prohibits Belgium from disclosing or using information or evidence furnished for purposes other than those stated in the Request without the prior consent of the Minister as the central authority of the Requested State.

[78] Second, the Act.

[79] Section 16 of MLACMA prohibits implementation of a sending order under s. 15 until the Minister is satisfied that the Requesting State has agreed to comply with any terms imposed in respect of the sending abroad of the record or thing.

The Principles Applied

[80] As I will explain, I am satisfied that the sending hearing judge did not err in failing or refusing to impose terms and conditions in the sending order to minimize the risk that confidential, commercially sensitive information in the materials seized under warrant was not inappropriately or unnecessarily disclosed to Best's Belgian competitor in related civil proceedings.

[81] First, some context.

[82] At the sending hearing, the appellant's primary claim was that a sending order should be refused because the Requesting State was acting in bad faith. The appellants claimed that Belgium invoked the instrumentality of mutual legal assistance by advancing a colourable allegation of fraudulent activity in order to obtain for a state-owned or supported competitor commercially sensitive documents of Best relating to the design and manufacture of cyclotrons.

[83] The sending hearing judge found that the claim had no air of reality. The appellants had not made a tenable allegation of bad faith. The judge made the sending order; and declined to include the terms or conditions sought by the appellants as an alternative remedy.

[84] In this court, the appellants have abandoned their allegation of bad faith, no longer contest the sending order and confine their claim to the inclusion of terms and conditions to prevent disclosure to and use by their Belgian competitor of what they characterize as commercially sensitive information.

[85] The appellants seek two specific terms on appeal:

• The items or copies of the items are not to be disseminated to any private person, party or litigant who is not involved in an official capacity in the criminal proceedings.

• If the Belgian authorities wish to make different use of the seized material, they can re-apply to the Superior Court of Justice for such permission.

The nature of the mutual legal assistance scheme does not favour inclusion of these terms and conditions.

[86] The fundamental authority for providing mutual legal assistance to a foreign jurisdiction is the Treaty or other agreement between the relevant sovereign nations. Canada and Belgium have agreed to grant each other the widest measure of mutual assistance in criminal matters. The Treaty partners exchange promises to fulfill their respective obligations as Requesting and Requested States. The mere existence of the Treaty attests to the belief of each partner that the other will discharge its obligations and conduct itself in accordance with those obligations.

[87] Under the Treaty, each partner acts through its central authority. All requests and responses must be transmitted to and received by that central authority. The central authority for Canada is the Minister of Justice.

[88] As the Requesting State, Belgium is required to observe any conditions imposed by the Requested State, Canada, in relation to any seized documents, records or objects that may be delivered to Belgium under para. 3 of Article 10 of the Treaty.

[89] The Request for assistance must include, among other things, a description of the nature of the investigation or proceedings; a summary of the relevant facts; and a copy or summary of the relevant laws. And the Requesting State must not disclose or use information or evidence furnished for purposes other than those stated in the Request without the prior consent of the Minister of Justice, the central authority of the Requested State, in this case, Canada.

[90] In the result, the Treaty makes it clear that use and disclosure of the assistance provided, as for example information, objects and things seized under warrant, is confined to the purpose stated in the Request. No other use or disclosure is permissible except with prior consent. And the only authority who can provide that consent, which must precede the proposed expanded use or disclosure, is the Minister of Justice.

[91] It is MLACMA that implements the Treaty domestically and assigns responsibilities to the Minister and the judiciary. These roles are discrete. They are not transferable. To each, his or her own. The Treaty and MLACMA work together as part of an integrated whole.

[92] Second, the role of the sending hearing judge under s. 15(1) of MLACMA. The primary role of the sending hearing judge is to ensure that the statutory conditions precedent to the making of a sending order have been met. This requires the judge to examine whether the warrant was executed according to its terms and conditions and whether there is any other reason why what has been seized should not be sent. The judge must ensure that the sending order strikes an appropriate balance between any state and individual interests engaged by the sending order.

[93] Third, the discretion to impose terms and conditions under s. 15(1)(b) of MLACMA is circumscribed by the division of responsibility between the Minister and the judiciary; the provisions of the Treaty; and the objectives of the mutual legal assistance scheme. This discretion does not extend to imposing terms and conditions that interfere with the conduct of an investigation or proceedings in the Requesting State. Nor does it assume that the Minister of Justice will not fulfill her role under MLACMA or the Treaty, or that the Requesting State will not adhere to its Treaty obligations about use and disclosure of sent material.

[94] Finally, the British Columbia authorities the appellants muster in support lack persuasive force. In large measure, they transport principles of extradition law to the mutual legal assistance context, as for example, the dual criminality requirement. The prevailing jurisprudence in this province is that mutual legal assistance proceedings do not require dual criminality.

[95] In addition, the British Columbia cases include a term or condition that seems redundant in light of the restricted use and disclosure provisions of the Treaty. What is more, their inclusion of a term that requires a further application to the court that made the sending order, if expanded use or disclosure is sought, is at odds with the Treaty requirement that assigns this responsibility to the Minister of Justice.

[96] The sending judge did not err in failing to include terms limiting the disclosure and use of the seized material. This is not to say that parties cannot craft appropriate terms and conditions to attach to a sending order. The Treaty contemplates the imposition of conditions. Under Article 10, the Requesting State shall observe any conditions imposed by the Requested State in relation to seized documents. The Act, which gives effect to this Treaty, also contemplates discretion to impose terms and conditions, as demonstrated by the language of s. 15(1)(b) and s. 16. Appropriate terms would do more than merely repeat the protections already afforded to the parties by the Treaty and would not frustrate the purposes of the Act.

[97] For example, if the material was clearly not relevant to the investigation or was privileged, redactions may be an appropriate exercise of the sending judge's discretion. Irrelevant material may also be omitted from the sending order: see, United States v. Equinix Inc., 2017 ONCA 260. However, this request was not made at the sending hearing in this case and the sending hearing judge can hardly be faulted for failing to omit any material from his order. Instead, the appellants at the sending hearing argued these matters in the abstract and relied upon largely undefined intellectual property concerns.

Conclusion

[98] For these reasons, I would dismiss the appeal.

Released: May 1, 2017 ("JL")

"David Watt J.A."

"I agree. John Laskin J.A."

"I agree. E.E. Gillese J.A."

Footnote

[1] The Attorney General of Canada sought leave to appeal from the decision of the sending hearing judge on the ground that he erred in holding that he was bound by the decision of Owen-Flood J. and also erred in imposing conditions under the provisions of s. 20 of the Act. Leave was refused on the basis that the issue raised was not of importance and that there was no reasonable prospect of success because s. 20 permitted the inclusion of conditions: Canada (Attorney General) v. Pacific Network Services, 2003 BCCA 685, 190 B.C.A.C. 289 (Oppal J.A., in chambers).