R. v. Amway Corp., [1989] 1 S.C.R. 21
Her Majesty The Queen Appellant
v.
Amway Corporation Respondent
and
The Attorney General for Ontario Intervener
indexed as: r. v. amway corp.
File No.: 20232.
1988: October 5; 1989: January 19.
Present: Dickson C.J. and McIntyre, Lamer, Wilson, La Forest, L'Heureux-Dubé and Sopinka JJ.
on appeal from the federal court of appeal
Constitutional law -- Canadian Charter of Rights and Freedoms ‑‑ Evidence -- Compellability -- Right of person charged with an offence not be compelled to be a witness in proceedings against that person in respect of that offence -- Corporation sued civilly for forfeiture under Customs Act ‑‑ Application made to examine officer of corporation -- Whether or not s. 11(c) applicable -- If so, whether or not legislation justified under s. 1 ‑‑ Canadian Charter of Rights and Freedoms, ss. 1, 11(c).
Evidence -- Compellability -- Corporation sued civilly for forfeiture under Customs Act -- Application made to examine officer of corporation ‑‑ Whether or not respondent a witness and therefore not compellable pursuant to s. 4(1) of Canada Evidence Act -- Whether or not rules of common law and equity prevent respondent's being examined on discovery in forfeiture proceedings -- Canada Evidence Act, R.S.C. 1970, c. E-10, ss. 4(1), 5 -- Customs Act, R.S.C. 1970, c. C-40, ss. 102, 180, 192, 252.
Respondent was convicted under the Criminal Code of making false declarations with respect to goods imported into Canada to avoid duty and paid a fine. Appellant, prior to this conviction, commenced an action in Federal Court alleging that the respondent and Amway of Canada Limited incurred a forfeiture pursuant to the ss. 180 and 192 of the Customs Act, by making untrue declarations and passing false invoices, and alternatively under s. 192 by undervaluing the goods. Appellant further claimed that the respondent and Amway of Canada Limited were liable for duties and taxes payable on the imported goods pursuant to s. 102 of the Act.
Upon completion of the pleadings in this action and following the examination for discovery of appellant's nominee, appellant brought an application in the Federal Court Trial Division requesting an order pursuant to Rule 465(1) of the Federal Court Rules that respondent produce one of its officers for examination for discovery. The Federal Court of Appeal reversed the Trial Division's decision to grant the application. The issue here was whether the respondent may be ordered to produce an officer for examination for discovery pursuant to Rule 465(1). In addition, two constitutional questions were stated for consideration: whether Rule 465 infringed s. 11(c) of the Canadian Charter of Rights and Freedoms by requiring a corporate defendant to be examined for discovery in an action brought pursuant to ss. 180 and 192 of the Customs Act, and if so, whether such examination was justified under s. 1.
Held: The appeal should be allowed; the first constitutional question should be answered in the negative.
Any right of respondent to resist an order for discovery of its officer must be determined by reference to its rights at common law and not under s. 4(1) of the Canada Evidence Act. At common law an accused was neither competent nor compellable as a witness. Section 4(1) only addresses competence and the common law rule with respect to the non-compellability of an accused person at the instance of the Crown was left intact.
The common law privileges against self-incrimination were assumed, without deciding, not to have been subsumed in the Charter provisions.
A defendant in actions for forfeitures and penalties enjoyed three rights at common law: (1) to resist an order for discovery in forfeiture actions; (2) to resist an order for discovery in penalty actions; (3) to remain silent in the face of any question put to the defendant on discovery or at trial which tended to incriminate the defendant or subject the defendant to a forfeiture or penalty. There may also have been a right, comparable to that of an accused in a criminal proceeding not to be compelled at trial to testify at the instance of the party seeking to enforce the penalty or forfeiture, but that right did not extend to officers or employees of a corporation.
The broad discovery provisions of Rule 465 of the Federal Court Rules and of s. 5 of the Canada Evidence Act ended the existence of these rules. The enforcement of the first two rules against discovery in actions for forfeitures and penalties is out of keeping with the practice in our courts, reflected in Rule 465, to widen all avenues of discovery. Any policy against actions for forfeiture is now contained in various statutory provisions empowering the Court to grant relief from forfeiture and penalties. The third rule, the privilege of a witness against self-incrimination, was replaced by s. 5 of the Canada Evidence Act.
A corporation per se cannot be a witness and therefore cannot come within s. 11(c) of the Charter. There is only one witness under examination, the officer testifying for the corporation, not the corporation itself. The mere fact that rules of evidence permit greater latitude in the source of the information given by the witness does not transform the source into a witness. It would strain the interpretation of s. 11(c) if an artificial entity were held to be a witness. Section 11(c) was intended to protect the individual against the affront to dignity and privacy inherent in a practice which enables the prosecution to force the person charged to supply the evidence out of his or her own mouth. Its language is not adequate to overrule the cases denying corporations the common law right against compellability at trial at the instance of the Crown. It was not necessary to consider whether a corporation was a person and it was assumed that the proceedings in question amounted to being charged with an offence.
It was unnecessary to deal with whether the claim should be characterized as being one for duties and taxes.
The place of examination ought to have been fixed after affording the parties an opportunity to make representation and file any additional material required. In the absence of agreement as to the place of examination, this aspect of the matter should be remitted to the judge hearing the application to fix the place of examination in accordance with Rule 465(12).
Cases Cited
Considered: R. v. Judge of the General Sessions of the Peace for the Court of York, Ex p. Corning Glass Works of Canada Ltd. (1970), 3 C.C.C. (2d) 204; Pyneboard Pty. Ltd. v. Trade Practices Commission (1983), 45 A.L.R. 609; referred to: R. v. Oakes, [1986] 1 S.C.R. 103; Batary v. Attorney General for Saskatchewan, [1965] S.C.R. 465; R. v. J. J. Beamish Construction Co., [1967] 1 C.C.C. 301; Dubois v. The Queen, [1985] 2 S.C.R. 350; Attorney-General v. Radloff (1854), 10 Ex. 84, 156 E.R. 366; R. v. N. M. Paterson and Sons Ltd., [1980] 2 S.C.R. 679; Mexborough (Earl of) v. Whitwood Urban District Council, [1897] 2 Q.B. 111; Blunt v. Park Lane Hotel, Ltd., [1942] 2 K.B. 253; Rio Tinto Zinc Corp. v. Westinghouse Electric Corp., [1978] A.C. 547; Grevas v. R. (1956), 18 W.W.R. 412; R. v. Fox (1899), 18 O.P.R. 343; Malcolm v. Race (1894), 16 O.P.R. 330; Pickerel River Improvement Co. v. Moore (1896), 17 O.P.R. 287; Rose v. Croden (1902), 3 O.L.R. 383; Hodgson and Tait v. Turner (1937), 51 B.C.R. 308; Webster v. Solloway, Mills & Co., [1931] 1 D.L.R. 831; Triplex Safety Glass Co. v. Lancegaye Safety Glass 1934, Ltd., [1939] 2 K.B. 395; Klein v. Bell, [1955] S.C.R. 309; Di Iorio v. Warden of the Montreal Jail, [1978] 1 S.C.R. 152; Re Arrigo and The Queen (1986), 29 C.C.C. (3d) 77; Re PPG Industries Canada Ltd. and Attorney-General of Canada (1983), 3 C.C.C. (3d) 97; Rasins v. Foodcorp Ltd., [1980] 1 F.C. 729.
Statutes and Regulations Cited
Act to Restrict the Importation and Employment of Aliens, S.C. 1896-97, c. 11.
Canada Evidence Act, R.S.C. 1970, c. E-10, ss. 2, 4(1), 5.
Canadian Charter of Rights and Freedoms, ss. 1, 7, 11(c), 13.
Civil Evidence Act 1968, (U.K.) 1968, c. 64, ss. 14(1), 16(1)(a).
Courts of Justice Act, 1984, S.O. 1984, c. 11, s. 111.
Criminal Code, R.S.C. 1970, c. 34, s. 338(1)(a).
Customs Act, R.S.C. 1970, c. C-40, ss. 102, 180, 192, 252.
Evidence Act, R.S.B.C. 1948, c. 113, s. 5.
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 46(1).
Federal Court Rules, C.R.C. 1978, c. 663, s. 465(1), (7), (12).
Rules of the Supreme Courtof Canada, SOR/83-74, s. 32.
Trade Practices Act 1974, (Australia) 1974, No. 51.
Witness Declaratory Act (U.K.), 46 Geo. III, c. 37.
Authors Cited
Cross, Sir Rupert. Cross on Evidence, 6th ed. By Sir Rupert Cross and Colin Tapper. London: Butterworths, 1985.
Paciocco, David M. Charter Principles and Proof in Criminal Cases. Toronto: Carswells, 1987.
United Kingdom. Law Reform Committee. Sixteenth Report. Privilege in Civil Proceedings. London: H.M.S.O., 1967.
APPEAL from a judgment of the Federal Court of Appeal, [1987] 2 F.C. 133, 34 D.L.R. (4th) 190, allowing an appeal from a judgment of Reed J., [1987] 1 F.C. 3, [1986] 2 C.T.C. 148, 21 C.R.R. 238. Appeal allowed; the first constitutional question should be answered in the negative.
Edward Sojonky, Q.C., and Michail F. Ciavaglia, for the appellant.
John Brown, Q.C., Neil Finkelstein and Jeff Galway, for the respondent.
No one appearing for the intervener the Attorney General for Ontario.
The judgment of the Court was delivered by
Sopinka J. -- The issue in this case is whether the respondent may be ordered to produce an officer for examination for discovery pursuant to Rule 465(1) of the Federal Court Rules, C.R.C. 1978, c. 663. The Trial Division of the Federal Court had so ordered. The Federal Court of Appeal reversed this decision. Her Majesty the Queen appeals to this Court from that reversal.
The action in which an examination is sought arose out of the following circumstances. The respondent was convicted on November 10, 1983, under s. 338(1)(a) of the Criminal Code, R.S.C. 1970, c. 34, as amended, of making false declarations with respect to certain goods imported into Canada and thereby avoiding the payment of duty on those goods. It was ordered to pay and did pay a fine in the amount of $20,000,000.
On January 4, 1980, prior to the conviction under the Criminal Code, the appellant commenced, in the Federal Court of Canada, an action alleging that the respondent, together with Amway of Canada Limited, had provided false documentation when importing goods into Canada and had failed to set out the true market value of those goods. The appellant charged that in making untrue declarations and passing false invoices, the companies incurred a forfeiture pursuant to ss. 180 and 192 of the Customs Act, R.S.C. 1970, c. C-40, as amended. The appellant alleged in the alternative that the respondent undervalued the goods and thereby incurred a forfeiture pursuant to s. 192 of the Act. In addition to these "deemed forfeitures", the appellant further claimed that the respondent and Amway of Canada Limited were liable for duties and taxes payable on the imported goods pursuant to s. 102 of the Act.
Upon completion of the pleadings in this action and following the examination for discovery of the nominee of the appellant, the appellant brought an application in the Federal Court Trial Division requesting an order that the respondent produce for examination for discovery one of its officers. The application was opposed on two main grounds: (1) that at common law a court would not require a defendant to submit to discovery in an action to enforce a penalty or forfeiture, and (2) that the respondent was not required to produce any person to be examined for discovery in view of s. 11(c) of the Canadian Charter of Rights and Freedoms.
On the respondent's first ground, Reed J., in the Trial Division, examined the historical development of the privilege against self-incrimination in actions for forfeitures and penalties. She concluded that the practice of extending immunity from examinations for discovery and the right not to answer questions as a witness were both abrogated in Canada by the enactment of the Canada Evidence Act, S.C. 1893, c. 31. This change is now found in s. 5 of the Canada Evidence Act, R.S.C. 1970, c. E-10, as amended. With respect to the second ground, Reed J. concluded that s. 11(c) of the Charter applies to a "deemed forfeiture" proceeding in the Federal Court because of the action's "penal" nature. Applying the criteria in R. v. Oakes, [1986] 1 S.C.R. 103, Her Ladyship concluded that Rule 465 is a reasonable limit prescribed by law under s. 1 of the Charter. In the result, she ordered that upon an appointment being served upon its solicitors, the respondent produce the requested officers for examination for discovery.
In the Federal Court of Appeal, Mahoney J., speaking for the court, held that by virtue of s. 2 of the Canada Evidence Act, that Act applied to the proceedings, and that s. 4(1) of the Act protected the respondent from being compelled to produce an officer for an examination for discovery. His Lordship pointed out that this argument was apparently not made before Reed J. and accordingly was not addressed. Mahoney J. agreed with the application of s. 11(c) as found by Reed J., but disagreed that Rule 465 could constitute a reasonable limit under s. 1 of the Charter. His Lordship reasoned that an incompetent or non-compellable witness could not be made competent or compellable by a rule of practice. If Rule 465 purported to achieve this result it would be ultra vires the rule-making authority of s. 46(1) of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, which precludes passage of a rule which is inconsistent with the Canada Evidence Act. His Lordship also held that, in the circumstances, Reed J. had improperly delegated to the examiner the responsibility of selecting the place at which the examination for discovery was to be conducted.
In this Court, the respondent supported the judgment of the Federal Court of Appeal on the following grounds:
1.The respondent is a person charged with an offence and a witness within the meaning of s. 4(1) of the Canada Evidence Act and cannot therefore be compelled to produce an officer to attend on the examination for discovery and answer questions.
2.A rule of common law and equity prevents the respondent from being examined on discovery in penal proceedings to enforce a forfeiture.
3.Rule 465 cannot apply to compel an officer of the respondent to testify because a requirement that an officer testify would constitute a rule of substantive law and not of practice and procedure. Section 252 of the Customs Act which provides for the application of the usual practice and procedure of the court in civil cases in any suit for the recovery of any penalty or forfeiture, could not render such a requirement applicable.
4.The respondent is protected by s. 11(c) and s. 7 of the Charter from being compelled to be a witness in these proceedings.
5.This action is for forfeiture only and not for debt or a claim for duties and taxes under s. 102.
6.In the circumstances, Reed J. improperly delegated to the Examiner the court's power to fix the place of examination.
The following constitutional questions were stated by the Chief Justice on June 16, 1988:
1.Does Federal Court Rule 465 infringe on the right granted by s. 11(c) of the Canadian Charter of Rights and Freedoms to the extent that it requires a corporate defendant to be examined for discovery in an action brought pursuant to ss. 180 and 192 of the Customs Act, R.S.C. 1970, c. C-40?
2.If the answer to question 1 is in the affirmative, is requiring a corporate defendant to be so examined justified by s. 1 of the Canadian Charter of Rights and Freedoms and therefore not inconsistent with the Constitution Act, 1982?
Ground 1: Section 4(1) of the Canada Evidence Act
To succeed, the respondent's first submission requires an affirmative answer to both of the following propositions:
(a)Amway Corporation is a person charged with an offence within the meaning of s. 4(1);
(b)Section 4(1) prohibits compelling an officer of Amway to attend on an examination for discovery.
Section 4(1) provides:
4. (1) Every person charged with an offence, and, except as otherwise provided in this section, the wife or husband, as the case may be, of the person so charged, is a competent witness for the defence, whether the person so charged is charged solely or jointly with any other person.
If the respondent is a person charged within the meaning of s. 4(1) it must be further established that, by its terms, s. 4(1) prohibits the respondent from being compelled to attend on the examination for discovery. It is apparent from the words of the section that it addresses only one of the two components of the rights and obligations of a witness: that is, competence. It does not purport to deal with compellability. At common law an accused was neither competent nor compellable as a witness. By virtue of s. 4(1) of the Canada Evidence Act, first introduced in 1893 and amended by S.C. 1906, c. 10, s. 1, the common law was altered to make an accused a competent witness for the defence. These amendments left intact the common law with respect to the non-compellability of an accused person at the instance of the Crown. The history of these changes in the law of evidence is reviewed by Cartwright J. in Batary v. Attorney General for Saskatchewan, [1965] S.C.R. 465, at pp. 471-73. The effect of the amendments was stated more explicitly in R. v. J. J. Beamish Construction Co., [1967] 1 C.C.C. 301, at p. 340: "The privilege of an accused against self-incrimination is an ancient common law right which has not been altered by the Canada Evidence Act". In Cross on Evidence (6th ed. 1985), the learned author states, at p. 194:
The general rule is that the accused is not a competent witness for the prosecution in any criminal case. The rule is the result of the common law which, so far as this point is concerned, has not been modified by the Criminal Evidence Act 1898, because that statute confers competence on the accused only as a witness for the defence.
Accordingly, any right of the respondent to resist an order for discovery of its officer must be determined by reference to its rights at common law and not under s. 4(1). The effect of these rights is addressed under the respondent's second submission.
Ground 2: Common Law Rights to Resist Discovery and Against Self-Incrimination
I am prepared to assume without deciding that the common law privileges against self-incrimination were not subsumed in the Charter provisions -- an issue which is more squarely raised before this Court in Thompson Newspapers v. The Director of Investigation and Research, Stelco Inc. v. The Attorney General of Canada and McKinlay Transport Limited v. The Queen, (argued November 1 and 2, 1988).
In examining the rights of a defendant at common law in actions to enforce a forfeiture or penalty, it is necessary to bear in mind three separate and distinct concepts with respect to the defendant as a witness: competence, compellability and the privilege of a witness to refuse to answer questions tending to incriminate. These concepts and their historical background are reviewed in Cross on Evidence, supra, at pp. 187-90. The critical distinction between compellability and the privilege of a witness is well understood in the setting of a criminal trial. An accused charged with an offence under the Criminal Code is not compellable to enter the witness box but once that person does, he or she is not excused from answering questions which may tend to incriminate. The accused has only the rights of any other witness: namely, to object to answer such questions and to obtain the protection afforded by s. 5 of the Canada Evidence Act (see Batary v. Attorney General for Saskatchewan, supra, at p. 473). With the advent of the Charter the accused can avail himself or herself of the wider protection afforded by s. 13 of the Charter (see McIntyre J. in Dubois v. The Queen, [1985] 2 S.C.R. 350, at p. 377.)
Upon examining the authorities, it is apparent that a defendant in actions for forfeitures and penalties enjoyed three rights at common law:
1.to resist an order for discovery in forfeiture actions;
2.to resist an order for discovery in penalty actions;
3.to remain silent in the face of any question put to the defendant on discovery or at trial which tended to incriminate the defendant or subject the defendant to a forfeiture or penalty.
In addition, there may well have been a right comparable to that of an accused in a criminal proceeding not to be compelled at trial to testify at the instance of the party seeking to enforce the penalty or forfeiture (see Attorney General v. Radloff (1854), 10 Ex. 84, 156 E.R. 366). In relation to corporations, however, any right not to be compelled to testify at trial was altered in Canada by R. v. Judge of the General Sessions of the Peace for the Court of York, Ex p. Corning Glass Works of Canada Ltd. (1970), 3 C.C.C. (2d) 204, and R. v. N. M. Paterson and Sons Ltd., [1980] 2 S.C.R. 679. These cases determined that officers and employees, including an officer who is a directing mind, are compellable witnesses at the instance of the Crown where the corporation is accused of a criminal offence. Since a corporation can only testify through officers and employees, any right not to be compelled at trial was effectively removed. The principle of these cases applies a fortiori to a claim for forfeitures and penalties.
These three rights, enumerated above, were often subsumed under the general term "privilege against self-incrimination"; however, the rationale upon which they were based, as well as their character and operation, differed. The first two rights were rules of procedure adopted by the courts of common law and equity. A defendant could defeat an application for discovery by invoking the rule against discoveries in actions to enforce a forfeiture or penalty. In turn the reason for the rule differed in forfeiture actions and in penalty actions.
The character and operation of these three common law rights is examined in the Australian case of Pyneboard Pty. Ltd. v. Trade Practices Commission (1983), 45 A.L.R. 609. In that case, the High Court of Australia considered whether a statutory provision (the Trade Practices Act 1974, (Australia) 1974 No. 51) which required documents and information to be furnished to the Commission on Trade Practices was subject to these rights and privileges. The court held that these rights and privileges could not survive the general and comprehensive language of the statute.
With respect actions for forfeiture and to the privilege against self-exposure to forfeiture, Murphy J. stated, at p. 621:
Privilege against self-exposure to forfeiture: In England, this probably arose out of the special regard for land rights originally secured by feudal tenures and later by entailing and other devices. The privilege against forfeiture seems to have been confined to forfeitures of realty, particularly leases. The recognition of such a privilege in modern Australia is, in my opinion, not justified.
The respondent in its factum (paragraph 106) took the position that this action was exclusively an action for forfeiture pursuant to the Customs Act. Accepting this characterization, the common law rule against discoveries would not apply as it was limited to forfeitures of real estate or an interest in real estate. I am, however, prepared to assume that this terminology was used to distinguish the claim from a claim for debt and that the action is more appropriately characterized as a penal action to enforce a forfeiture. With respect to actions for penalty and the privilege against self-exposure to penalties, Murphy J. said, at p. 621:
Privilege against self-exposure to penalties: The origin of this privilege seems to have been judicial hostility to common informers' suits for penalties; the courts would not assist any informer in any way by their procedures (see Earl of Mexborough v Whitwood Urban District Council [1897] 2 QB 111 at 114-5). Any general privilege against self-exposure to civil actions for penalties, especially a privilege available outside judicial proceedings, is difficult to justify.
It is an absurd state of the law if a witness, in a civil or criminal trial, can lawfully refuse to answer because the answer may tend to expose him or her to some ecclesiastical censure, or to forfeiture of a lease, or to a civil action for penalties, but may not refuse if the exposure is to some other civil loss, such as an action for damages, even punitive damages. In so far as such absurdity has been introduced or maintained by judicial decision (see R v Associated Northern Collieries (1910) 11 CLR 738 at 742; Blunt v Park Lane Hotel Ltd [1942] 2 KB 253 at 257) it can and should be erased by judicial decision. Whatever their standing in judicial proceedings, I see no reason for recognizing such privileges outside judicial proceedings.
Although the first two rules are separate and distinct from the third (see Mexborough (Earl of) v. Whitwood Urban District Council, [1897] 2 Q.B. 111), all three were often treated as a package in the English authorities (see, for example, Blunt v. Park Lane Hotel, Ltd., [1942] 2 K.B. 253). This was no doubt because all three were grounded in a policy of the courts to assist as little as possible the party bringing an action to enforce a penalty or forfeiture.
The trend in Britain where these rules originated has been to purify the privilege against self-incrimination and purge it of its civil aspects. Prior to 1806 it was thought that a witness could rely on the privilege to refuse to answer a question which might expose him to civil liability other than a forfeiture or penalty. The Witness Declaratory Act (U.K.), 46 Geo. III, c. 37, abolished the right to refuse to answer questions tending to establish civil liability except in actions for penalty or forfeiture. In 1968, acting on a recommendation of the 16th Report of the Law Reform Committee, the Civil Evidence Act 1968 (U.K.), 1968, c. 64, abolished the privilege to refuse to answer questions or produce documents in respect of forfeitures (s. 16(1)(a)) but retained it in proceedings for the recovery of a penalty (s. 14(1)). This development in the English law is dealt with by Lord Denning in Rio Tinto Zinc Corp. v. Westinghouse Electric Corp., [1978] A.C. 547, at p. 563. No reference is made in either s. 14(1) or by Lord Denning in Rio Tinto Zinc, to the practice relating to discoveries, and the status in England of this ancient rule of practice is uncertain.
In Canada these rules have had a chequered career. In Grevas v. R. (1956), 18 W.W.R. 412 (B.C.C.A.), Wilson J. at trial alluded to the lack of logic in a rule which impedes the ascertainment of truth. Although he recognized the existence of the rule in forfeiture cases, he stated, at p. 414:
. . . that I do not seek to extend the application of this curious rule which, despite its general approval in the cases cited, seems to me an anomalous one allowing a man to deny in his pleadings that he has broken a contract, and subsequently to refuse to answer on oath questions relating to his denial.
The Court of Appeal reversed Wilson J. While acknowledging the existence of the rule, the Court severely limited its application by restricting it to a case seeking to bring about a forfeiture. Since a forfeiture had already been accomplished, the Crown was held to be entitled to discovery in order to support its case.
The Ontario Divisional Court in R. v. Fox (1899), 18 O.P.R. 343, allowed discovery in an action to recover a penalty for violation of the Alien Labour Act, S.C. 1896-97, c. 11. The majority was of the view that with the enactment of s. 5 of the Canada Evidence Act which required a witness to answer questions tending to subject the witness to an action for a penalty or forfeiture, inter alia, the foundation for the existence of the rule disappeared. Rose J., dissenting, was of the view that a person examined for discovery was not a witness within the meaning of s. 5 and therefore his or her rights were untouched by the enactment of s. 5. The rule has also been referred to in several other Canadian cases. See, for example, Malcolm v. Race (1894), 16 O.P.R. 330; Pickerel River Improvement Co. v. Moore (1896), 17 O.P.R. 287; Rose v. Croden (1902), 3 O.L.R. 383 (Div. Ct.); and Hodgson and Tait v. Turner (1937), 51 B.C.R. 308.
In my opinion none of the three rules has any basis in our law. They were grounded in a policy from a bygone era, a policy which does not exist in Canada today. With respect to actions of forfeiture, the rules applied only to forfeiture of land or an interest in land. Any policy against actions for forfeiture is contained in various statutory provisions empowering the Court to grant relief from forfeiture and penalties. Section 111 of the Courts of Justice Act, 1984, S.O. 1984, c. 11, is one example of such a provision. Actions by informers are extinct and in any event this is not an action by an informer but by the Crown. Moreover the enforcement of the first two rules against discovery in actions for forfeitures and penalties is out of keeping with the practice in our courts to widen all avenues of discovery. This policy is reflected in the Federal Court Rules, including Rule 465, which does not contain any exception which would exempt an officer of a corporation from being examined for discovery in an action for forfeiture or penalty. Indeed, it does not contain such an exception in the case of an individual. As for the third rule, as noted above, the privilege of a witness against self-incrimination was replaced by s. 5 of the Canada Evidence Act. For these reasons, I am prepared to find, as did the High Court of Australia in that country, that any shadowy existence which these rules may have enjoyed in Canada was terminated by the broad discovery provisions of Rule 465 of the Federal Rules and s. 5 of the Canada Evidence Act.
Ground 3: Rule 465
For the reasons stated under Ground 2 this submission fails.
Ground 4: Sections 11(c) and 7 of the Charter
Section 11(c) provides:
11. Any person charged with an offence has the right
...
(c) not to be compelled to be a witness in proceedings against that person in respect of the offence;
In order to obtain the benefit of this section of the Charter the respondent must establish that it is:
(a)a person;
(b)charged with an offence; and
(c)a witness in proceedings against that person.
With respect to (a) it is neither necessary nor desirable in this case to decide that under no circumstances may a corporation avail itself of the provisions of s. 11. I am also prepared to assume without deciding that the proceedings in question are such that the requirement in (b) is satisfied. In my opinion, however, a corporation cannot be a witness and therefore cannot come within s. 11(c).
Pre-Charter cases, including the decision of this Court in R. v. N. M. Paterson and Sons Ltd., supra, held that an officer of a corporation who testifies in criminal proceedings against the corporation, is the witness. This principle applied equally to an officer who is the directing mind of the corporation. Paterson followed the decision of the Ontario Court of Appeal in Corning Glass Works, supra.
In Paterson, Chouinard J. stated, at p. 691:
In my opinion, the fact that the manager like any other employee or agent of the operator who does any act or thing directed to the commission of an offence is himself a party and guilty of the offence, rather tends to show that the manager is, for the purposes of prosecution, a distinct person who could of course, as acknowledged by the appellant, seek for himself the protection of s. 5 of the Canada Evidence Act.
The same thing may be said of an officer of the respondent on the examination for discovery. It would be startling to suggest that the officer, if asked a question the answer to which tended to incriminate him, could not avail himself of s. 13 of the Charter and s. 5(2) of the Canada Evidence Act. If such protection is available, it must be because the officer is a witness. It is hard to rationalize that the officer is a witness and the corporation is a witness. There is only one witness under examination and that is the entity that swore the oath and that would be subject to a penalty for perjury. That is not to say that a witness must be one capable of taking an oath, but where the evidence is sworn evidence, it is my view that the Charter intended to protect the person who swore the oath.
It is true that following the above-quoted statement, Chouinard J. quotes with approval a passage from the decision of Arnup J.A. in Corning Glass Works, supra, in which a distinction is made between a witness at trial and a witness on discovery. In my opinion neither Chouinard J. nor Arnup J.A. went so far as to find that, when an officer of a corporation testifies on an examination for discovery of the corporation, the corporation is a witness. Arnup J.A. made the statement referred to in distinguishing two cases which were cited for the proposition that a corporation should not be compelled through its officers to incriminate itself. The first case was Webster v. Solloway, Mills & Co., [1931] 1 D.L.R. 831, a decision of the Alberta Court of Appeal, and the second was Triplex Safety Glass Co. v. Lancegaye Safety Glass 1934, Ltd., [1939] 2 K.B. 395, a decision of the English Court of Appeal which followed the Webster case. Neither of these cases accorded the privilege to the corporate party seeking to resist discovery on the basis that the corporation in question was a witness. Indeed, in the Webster case, it was expressly held that the party being examined was not a witness (supra, at p. 834). The corporate parties were entitled to resist discovery because the common law privilege was not limited to a protection of witnesses. It is clear therefore that in drawing a distinction between the role of an officer on discovery and at trial, Arnup J.A. was not suggesting that in the cases referred to above the corporate parties were witnesses. Rather he was observing that the common law privilege accorded to corporations in those cases could be justified on the ground that on an examination for discovery of an officer of a corporation, the corporation is supplying most of the information. As stated above, this privilege is now replaced by the provisions of s. 5 of the Canada Evidence Act.
Similarly, in Klein v. Bell, [1955] S.C.R. 309, relied on by the respondent, the privilege asserted was a common law privilege. Since the Court found s. 5 of the Evidence Act, R.S.B.C. 1948, c. 113, to be ultra vires the province as being in relation to criminal procedure, the common law applied. Indeed it was held in that case that officers of a corporation are witnesses. Rand J., in his concurring judgment, stated at p. 317:
A witness, in a broad sense, is one who, in the course of juridical processes, attests to matters of fact; and in the multiplying procedures directed to the elicitation of such matters, the object of the statute, dealing as it does with a basic right, would be defeated by limiting its protection to part only of coerced disclosure. Since, as assumed by all parties, the Province is within its jurisdiction in that compulsion, I have no difficulty in interpreting the challenged word to extend to one of the most effective instruments to the function of litigation.
While this Court held that at common law the privilege could be claimed on behalf of a corporation, that was not because the corporation was a witness.
In my view, it would strain the interpretation of s. 11(c) if an artificial entity were held to be a witness. Such a metamorphosis could not be justified on the basis that the rules of evidence on an examination for discovery do not restrict the person testifying to personal knowledge. That person may answer questions based on belief as well as on information obtained from the corporation. There are many proceedings where witnesses are permitted similar latitude. I need only mention public inquiries and proceedings before administrative tribunals to illustrate the point. Traditionally, witnesses in these proceedings have been accorded the protection of s. 5 of the Canada Evidence Act (see, for example, Di Iorio v. Warden of the Montreal Jail, [1978] 1 S.C.R. 152). The mere fact that rules of evidence permit greater latitude in the source of the information which the witness imparts to the tribunal does not have the effect of transforming the source into a witness.
Applying a purposive interpretation to s. 11(c), I am of the opinion that it was intended to protect the individual against the affront to dignity and privacy inherent in a practice which enables the prosecution to force the person charged to supply the evidence out of his or her own mouth. Although disagreement exists as to the basis of the principle against self-incrimination, in my view, this factor plays a dominant role.
In the United States it was this factor which was largely responsible for denying Fifth Amendment protection to corporations. The American situation is summed up in the following statement from Paciocco, Charter Principles and Proof in Criminal Cases, at p. 459:
Apart from this substantial obstacle, it appears that the most sensible way of resolving issues about the application of Charter provisions to corporations is to interpret them purposively. Even on this basis, section 13 should not be held to extend to corporations through the expedient of considering certain corporate officers to be the corporation for the purpose of testifying. This is because the principle that an accused should never be conscripted by his opponent to defeat him does not extend to corporations in a meaningful way. As stated in Wigmore on Evidence in recounting the American position which holds the privilege against self-incrimination to be inapplicable to corporations, "[t]his sentiment . . . is almost entirely confined to flesh-and-bone individuals." Why? Because it has to do with the intrinsic value of human beings and the necessity of according them a meaningful right to privacy until the real prospect of their guilt is raised so that they will truly be free. "[A] corporation, unlike an individual, cannot suffer the indignities prohibited by the amendment's protection of the accused's person and thoughts."
Although this is said in reference to s. 13 of the Charter, it is equally applicable in relation to s. 11(c).
It was the absence of this critical factor that, no doubt, was the underlying rationale for the decisions in Corning Glass Works, supra, and Paterson, supra. By virtue of these decisions, the common law right against compellability at trial at the instance of the Crown was wholly removed from corporations. These cases were well known and in my opinion the language of s. 11(c) is quite inapt if it were intended to overrule them. On the contrary, by using the word "witness", the framers of the Charter preserved that principle of those cases. If the corporation is compellable at trial through its officers it is difficult to rationalize the purpose of conferring on the corporation a protection on discovery. No affront to dignity or privacy is avoided by denying to the Crown on discovery what can be obtained at trial by the simple expedient of calling the relevant officers to testify.
Canadian judicial opinion to date, although sparse on this subject, supports the view that I have expressed. In Re Arrigo and The Queen (1986), 29 C.C.C. (3d) 77, at p. 91, Sutherland J. stated:
. . . the accused corporation, not being a witness or a person that ever could be a witness, is not a "person" that can benefit from s. 11(c) of the Charter.
In Re PPG Industries Canada Ltd. and Attorney-General of Canada (1983), 3 C.C.C. (3d) 97, all three members of the British Columbia Court of Appeal agreed on this point. Nemetz C.J.B.C. stated, at p. 103:
It can readily be seen that some paragraphs of s. 11 can apply to a corporation and others cannot. Obviously, s. 11(e) providing for bail is inapplicable. In that context "person" means an individual and does not include a corporation. Likewise, para. (c) is inapplicable.
Seaton J.A., although dissenting, agreed on this point stating, at p. 108:
The Crown says that paras. (c) and (e) cannot be applicable to a corporation, and that is so. It does not follow that the words "Any person charged with an offence" do not include corporations. In my view they do. But paras. (c) and (e) deal with rights that are not applicable to a corporation because they cannot be enjoyed by a corporation. They are rights that everyone has but which a corporation does not need.
Finally, Anderson J.A. at p. 115 comments:
Section 11(c) does not apply to a corporation because a corporation cannot be a witness.
Accordingly, I am in respectful disagreement with the Federal Court of Appeal that the respondent can obtain the benefit of s. 11(c). The answer therefore to the first constitutional question is no. The second constitutional question by its terms need not be answered.
The respondent also sought leave of this Court to rely on s. 7 of the Charter. Section 7 was raised for the first time in this Court. The applicant has not complied with Rule 32 of the Rules of the Supreme Court of Canada, SOR/83-74, as amended, requiring that a constitutional question be stated when a constitutional issue is raised. In my opinion, given the importance of s. 7 of the Charter, a decision should not be rendered with respect to its operation without the opinion of the courts below and without affording possible interveners the opportunity to participate in the proceedings.
Ground 5: Duty and Taxes
In ground 5 the respondent resisted attempts by the appellant to characterize part of its claim as being one for duties and taxes. In view of this disposition, it is unnecessary to deal with this point.
Ground 6: Place of Examination
The respondent contends that in lieu of fixing the place of the examination for discovery, Reed J. improperly delegated this responsibility to the examiner. While Rule 465(7) authorizes an examiner to issue a signed appointment fixing the time and place of the examination, Rule 465(12) applies where the individual to be questioned is outside of Canada. Accordingly, I agree that Reed J. ought to have fixed the place of examination after affording the parties an opportunity to make representation and file any additional material required. No special application, however, was required by the appellant. Reed J. could have so ordered on request, and indeed, on her own motion (see Rasins v. Foodcorp Ltd., [1980] 1 F.C. 729). In the absence of agreement as to the place of examination, this aspect of the matter should be remitted to Reed J. to fix the place of examination in accordance with Rule 465(12).
In the result, the appeal is allowed, the judgment of the Federal Court of Appeal is set aside and the order of Reed J. is restored. In the absence of agreement between the parties, the matter is remitted to Reed J. to fix the place of examination in accordance with Rule 465(12). The appellant is awarded costs of the appeal to the Federal Court of Appeal and to this Court.
Appeal allowed with costs; the first constitutional question should be answered in the negative.
Solicitor for the appellant: Frank Iacobucci, Ottawa.
Solicitors for the respondent: Blake, Cassels & Graydon, Toronto.
Solicitor for the intervener: Richard F. Chaloner, Toronto.