CITATION: Attorney General of Canada v. Suthanthiran, 2016 ONSC 2162
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE ATTORNEY GENERAL OF CANADA - KINGDOM OF BELGIUM Applicant
– and –
KRISHNAN SUTHANTHIRAN, BEST THERATRONICS LTD. AND BEST MEDICAL BELGIUM INC. Respondents
Jeffrey G. Johnston, for the Applicant
Joseph Addelman, for the Respondents
HEARD: March 11, 2016
IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 15(1) 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 JUDGMENT
MARANGER J.
Introduction:
1On July 23, 2014, the Minister of Justice for Canada approved a request from the Kingdom of Belgium dated May 7, 2014 seeking a search and seizure of business records from the registered offices of Best Theratronics Ltd. located at 413 March Rd., Ottawa, Ontario. The request was pursuant to a treaty between Canada and the government of Belgium under the Mutual Legal Assistance in Criminal Matters Act, R.S.C. 1985, c. 30 (4th Supp.) (the Act).
2The material sought is to further an investigation by Belgian authorities for the Belgian offences of misuse of company assets, concealing assets and insolvency, making false statements, using false documents and money-laundering, contrary to the Belgian Criminal Code. The allegations are made against Krishnan Suthanthiran or companies in his control.
3On September 30, 2014 Justice Beaudoin authorised a search warrant which was executed on October 2, 2014. The Attorney General of Canada has applied for a Sending Order pursuant to s. 15 of the Act, on February 26, 2015.
4On May 29, 2015 the court heard an application for an order requiring disclosure of the contents of the Request to Send dated May 17, 2014 presented to the Minister of Justice by Belgium authorities, and for an order requiring Corporal Goodgie of the RCMP to attend for cross-examination on the affidavit he filed to obtain a search warrant pursuant to section 12 (1) of the Act.
5The "preliminary" applications were brought under a broader application to set aside the search warrant granted by Justice Robert Beaudoin dated September 30, 2014 in the context of resisting the Sending Order.
6In reasons released on June 17, 2015 the application was dismissed, and at paragraph 11 of that decision the following was indicated "even if the contentions raised by the applicants had merit and the relevant portions of the officer's affidavit were excised, the remaining information in the affidavit would support the issuance of a search warrant by the authorizing Justice". As a consequence, the application to quash the search warrant was abandoned.
Background:
7The factual background to this application can be summarized as follows:
- The country of Belgium is investigating Krishnan Suthanthiran (Suthanthiran), Best Theratronics Limited. (Best Canada), and Best Medical Belgium Inc. (BMB) for the Belgian offences of misuse of company assets, concealing assets and insolvency, making false statements, using false documents and money laundering, contrary to the Belgian Criminal Code.
- The allegations involve a claim that Suthanthiran fraudulently misappropriated €9,656,000 from Best Medical Belgium SA (BMB SA) and its creditors by transferring funds to his benefit through Best Canada in a series of transactions between April 1, 2011 August 19, 2011. The thrust of the allegations are threefold: a) That Suthanthiran acquired ownership of BMB SA and then improperly transferred €5,500,000 from BMB SA in the form of a loan to Best USA which funds were instead received by Best Canada and not repaid, b) That Suthanthiran caused BMB SA to buy two cyclotrons (a miniature particular accelerator used to make radioactive isotopes in medicine) from Best Canada. The equipment in question was never delivered to BMB SA and is alleged BMB SA at Suthanthiran's direction made payments to Best Canada totaling €4,156,000 towards the purchase of the equipment and the funds were not repaid, and c) That Best Canada liquidated BMB SA's assets and thereby contributed to the company becoming fraudulently insolvent.
- An ex parte application by the Attorney General of Canada for a search warrant was bought before Justice Robert Beaudoin on September 30, 2014 pursuant to s. 12 (1) the Act.
- Pursuant to the search warrant a great deal of material was seized by the RCMP some of it contains information relating to the construction of cyclotrons, a great deal of the material is in regard to financial matters.
This Application
8At this hearing, the applicant seeks an order that the material seized pursuant to the search warrant be sent to the treaty partner the Kingdom of Belgium. The respondent resists the sending order on the basis that the material requested contains trade secrets (intellectual property secrets) relating to specifications in the construction and manufacturing of cyclotrons. In this regard the court heard testimony from Krishnan Suthanthiran, the founder and owner of Best Canada.
9The sending application is made pursuant to section 15 (1) of the Act which provides as follows:
15 (1) At the hearing to consider the execution of a warrant issued under section 12, after having considered any representations of the Minister, the competent authority, the person from whom a record or thing was seized in execution of the warrant and any person who claims to have an interest in the record or thing so seized, the judge who issued the warrant or another judge of the same court may
(a) where the judge is not satisfied that the warrant was executed according to its terms and conditions or where the judge is satisfied that an order should not be made under paragraph (b), order that a record or thing seized in execution of the warrant be returned to
(i) the person from whom it was seized, if possession of it by that person is lawful, or
(ii) the lawful owner or the person who is lawfully entitled to its possession, if the owner or that person is known and possession of the record or thing by the person from whom it was seized is unlawful; or
(b) in any other case, order that a record or thing seized in execution of the warrant be sent to the state or entity mentioned in subsection 11(1) and include in the order any terms and conditions that the judge considers desirable, including terms and conditions
(i) necessary to give effect to the request mentioned in that subsection,
(ii) with respect to the preservation and return to Canada of any record or thing seized, and
(iii) with respect to the protection of the interests of third parties.
10The thrust of the respondent's testimony in resisting the sending order was the following:
- That his principal competitor in the manufacture and development of cyclotrons will potentially come into possession of material seized including but not limited to: diagrams, schematics, notes and other materials that specify trade secrets concerning their cyclotrons. He alleges that this will ultimately destroy his business.
- That in Belgium criminal and civil proceedings are intertwined, that there is a conspiracy in this case where the Belgian government has a stake in his competitor's company, and that the proceedings in that country are for all intents and purposes being conducted to gain competitive advantage against him in the development and construction of cyclotrons.
- He also relied upon correspondence he filed authored by his counsel in Belgium that indicated the following: "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 be offences making the object of investigation".
Applicable law and analysis:
11In Euro-Can-Am Trading Inc. v. Ontario (A.G.) (1997), 1997 1288 (ON CA), 116 C.C.C. (3rd) 471 (Ont. C.A.), at para. 8, the Ontario Court of Appeal recognized that the role of the sending hearing judge under section 15 (1) of the Act is twofold: First, the judge must be satisfied that the search warrant was executed according to its terms and conditions. Second, the judge must be satisfied that there is no reason why the sending order should not be made, which vests the judge with a discretion to consider all relevant factors bearing on the application.
12In determining whether to grant a sending order, it is of prime importance that the Court consider whether the search warrant was lawfully executed.
13Some of the following legal principles have been established to assist the hearing judge in determining how to exercise his/her discretion in determining the issuance of a sending order:
- A recognition of the need to ensure Canada's international obligations are honoured and to foster cooperation between investigative authorities in different jurisdictions: R. v. Budd (2000), 2000 17014 (ON CA), 150 CCC (3rd) 108 (Ont. C.A.) at para 28.
- Unlike cases involving extradition, proceedings under the Act do not impose a dual criminality requirement: Canada (Commissioner of Competition) v. Falconbridge Ltd. (2003), 2003 52144 (ON CA), 173 CCC (3rd) 466 (Ont. C.A.)
- In deciding whether a sending order should issue, the sending hearing judge does not individually examine each of the seized documents: Germany v. Ebke (2001), 2001 NWTSC 52, 158 CCC (3rd) 253 (N.W.T.S.C.) at para 69.
- The exercise of discretion must be in a manner that conforms with the overall purpose of the Act: United States of America v. Price, 2007 ONCA 526, 86 O.R. (3d) 762) at para. 18.
- A generous view of relevance has to be given at this stage of the proceeding because it is still considered investigative.
- Finally, in the case of Mutual Legal Assistance in Criminal Matters Act (Re) (1999), 1999 3787 (ON CA), 138 CCC (3rd) 321, at para. 40, (Ont. CA) [Pokidishev], the Court of Appeal indicated the following regarding a sending judge's discretion under s. 20 of the Act. I take these principles to equally apply to the limits on the discretion exercised under s.15 :
[40] There are, however, limits on the discretion vested in the s. 20 judge. These limits flow from the nature of the judicial role in the process contemplated by the Act. In my view, a judge under s. 20 is not concerned with the advisability of assisting the foreign jurisdiction or whether the foreign jurisdiction will comply with any order the judge might make. Those matters must be addressed by the Minister of Justice. Similarly, I do not think that a judge on a s. 20 application can be concerned with either the ultimate evidentiary value of the requested material to the foreign jurisdiction or with the conduct of any proceedings in the foreign jurisdiction: United States of America v. Ross (1994), 1994 201 (BC CA), 44 B.C.A.C. 228 (B.C.C.A.), per Southin J.A. (In Chambers).
14In the case at hand, the concerns raised by the respondent about his intellectual property rights are, in large measure, answered by Article 17 of the Treaty which states "the requesting State shall not disclose or use information or evidence furnished for purposes other than those stated in the request without the prior consent of the central authority of the requested state". It is an issue to be dealt with by the Minister and not the court.
15I am satisfied that the search warrant was executed according to its terms and conditions.
16Furthermore, there is no evidence whatsoever to support the proposition that the Kingdom of Belgium is acting in bad faith, or that this is part of grand conspiracy to obtain intellectual property belonging to the respondent. It is a criminal investigation for an alleged multimillion dollar fraud relating to his business and funding provided for this business.
17The arguments raised here are very similar to those raised in Pokidishev: this is a criminal fraud investigation relating to the respondent's business practices, he is in the business of manufacturing cyclotrons, consequently all of the information in the broadest sense of the word relating to the business at an investigative stage can be considered relevant. Consequently a sending order, as proposed by the applicant, is reasonable in the circumstances.
18Therefore, the sending order as proposed by the applicant is hereby granted.
Maranger J.
Released: March 30, 2016
CITATION: Attorney General of Canada v. Suthanthiran, 2016 ONSC 2162
COURT FILE NO.: 13167
IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 15(1) 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
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
THE ATTORNEY GENERAL OF CANADA - KINGDOM OF BELGIUM Respondent
– and –
KRISHNAN SUTHANTHIRAN, BEST THERATRONICS LTD. AND BEST MEDICAL BELGIUM INC. Applicants
REASONS FOR JUDGMENT
Maranger J.
Released: March 30, 2016