R. v. Clarke (B.E.) et al., 2015 NSSC 224

• Judge: Coady, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: July 10, 2015
• Jurisdiction: Nova Scotia
• Citations: 2015 NSSC 224;(2015), 363 N.S.R.(2d) 337 (SC)

R. v. Clarke (B.E.) (2015), 363 N.S.R.(2d) 337 (SC);

    1143 A.P.R. 337

MLB headnote and full text

Temp. Cite: [2015] N.S.R.(2d) TBEd. AU.016

Bruce Elliott Clarke, Robert Blois Colpitts and Daniel Frederick Potter (applicants) v. Her Majesty the Queen (respondent)

(CRH 346068; 2015 NSSC 224)

Indexed As: R. v. Clarke (B.E.) et al.

Nova Scotia Supreme Court

Coady, J.

August 12, 2015.

Summary:

The accused were charged with fraud and conspiracy to commit fraud for allegedly manipulating the price of Knowledge House Inc. shares over an 18 month period in 2000 and 2001. An extensive R.C.M.P. investigation commenced in 2003 with the assistance of an expert (Evans). Evans' 2010 report supported the Crown's theory and he would be a critical Crown witness at trial. The accused sought Crown disclosure of two drafts of Evans' report and an unredacted copy of an electronic Task 335 folder, which contained all R.C.M.P. discussions with Evans and any materials forwarded to him. The Crown claimed solicitor-client and litigation privilege respecting the redacted portions of the folder. The accused also sought particulars of the alleged offences to ensure that they would be able to make full answer and defence.

The Nova Scotia Supreme Court, in a judgment reported (2012), 319 N.S.R.(2d) 384; 1010 A.P.R. 384, ordered that the Crown disclose the two draft reports and the unredacted copy of the Task 335 folder. The court declined to order further particulars, other than ordering the Crown to advise the accused whether they intended to lead evidence from other conspirators beyond the 13 identified. One of the accused (Colpitts) applied for an order that the Crown breached its duty under R. v. McNeil (SCC) to make reasonable inquiries respecting relevant material known to be in the possession of the Nova Scotia Securities Commission and to attempt to obtain those materials. Colpitts sought disclosure or, alternatively, access to the materials.

The Nova Scotia Supreme Court, in a judgment reported (2013), 344 N.S.R.(2d) 10; 1089 A.P.R. 10, held that the Crown breached its McNeil obligation. Since Colpitts already had the materials (but was precluded by court order from accessing them), the appropriate order was to permit Colpitts access to the materials. Colpitts now applied for disclosure of all e- mails/correspondence between the Crown and the Securities Commission after the date the indictment was preferred. The Crown, which possessed the information, had declined to disclose it on the ground that the communications were not relevant.

The Nova Scotia Supreme Court, in a judgment reported (2014), 349 N.S.R.(2d) 352; 1101 A.P.R. 352, ordered that the e-mails/correspondence be disclosed. Given the previous McNeil application, there was a reasonable possibility that the e-mails/correspondence contained relevant information. The Crown's bald statement that the information was irrelevant was an assertion only. The court was satisfied that the information could reasonably assist all of the accused in advancing a defence or defining their trial strategy. The accused applied to have the judge recuse himself, alleging both actual bias and a reasonable apprehension of bias based on remarks made in two case management conferences and in the prior decision on third party production (i.e., unable to adjudicate the matter impartially).

The Nova Scotia Supreme Court, in a judgment reported (2014), 353 N.S.R.(2d) 355; 1115 A.P.R. 355, dismissed the recusal application. Colpitts then brought an O'Connor application for the Securities Commission to disclose third party documents for which privilege was claimed. Of the 19 third parties given notice, only one (National Bank) responded by advising that it had a possible interest in 125 of the thousands of documents. A hearing was held to determine which of the documents were privileged. Once the privilege issue was resolved, the court would then determine the "likely relevance" of the remaining non-privileged documents as directed by O'Connor and McNeil.

The Nova Scotia Supreme Court, in a judgment reported (2015), 355 N.S.R.(2d) 227; 1123 A.P.R. 227, determined which documents were privileged. Now at issue was the "likely relevance" of the non-privileged documents.

The Nova Scotia Supreme Court, in a judgment reported (2015), 356 N.S.R.(2d) 364; 1126 A.P.R. 364, held that the accused failed to meet the threshold onus of showing that any of the 400 documents, other than some investigator's notes, were "likely relevant". One of the accused (Colpitts) brought a second recusal motion, to be considered cumulatively with the first recusal motion and expanded grounds.

The Nova Scotia Supreme Court, in a judgment reported (2015), 358 N.S.R.(2d) 163; 1131 A.P.R. 163, dismissed the application. The R.C.M.P. investigation took eight years to complete, with the assistance (after 2007) of a federal IMET Quick Start Team that provided the training and resources to conduct such complex investigations. There was a further five year delay from the date of the charges to the end of the trial. The accused applied under s. 24(1) of the Charter for a stay of proceedings, alleging a denial of their rights under ss. 7 and 11(b) of the Charter on the basis of pre-charge and post-charge delay, and abuse of process.

The Nova Scotia Supreme Court dismissed the application.

Civil Rights - Topic 3130

Trials, due process, fundamental justice and fair hearings - Criminal proceedings - Delay (Charter, s. 7) - Pre-charge delay - The accused were charged with fraud and conspiracy to commit fraud for allegedly manipulating the price of Knowledge House Inc. shares over an 18 month period in 2000 and 2001 - An investigation by the Nova Scotia Securities Commission was concluded in early 2004, although that process continued alongside a separate R.C.M.P. investigation that resulted in the criminal charges being preferred in 2011 - The accused sought a stay of proceedings under s. 24(1) of the Charter on the ground of abuse of process respecting the eight years plus of pre-charge delay - The Nova Scotia Supreme Court first held that the regulatory and civil proceedings were not to be considered in determining whether to grant a stay, as neither implicated the accused's s. 7 Charter rights to liberty or security of the person - Often during the investigation, the investigative team lacked sufficient resources for this complex investigation - Although the pre-charge delay was unreasonable (charges should have been laid by mid-2008 rather than 2011), the accused's right to a fair trial was not prejudiced - There was no misconduct or improper motive by the state - The court stated that "I find that the defendant's circumstances are not caught by the residual category. There is nothing to suggest behaviour that is so unreasonable and unfair that it undermines fundamental notions of justice. I am unable to conclude that the investigation eroded the integrity of the judicial process. It was simply delay cause by bona fides choices in an under-resourced investigation. In light of these conclusions, I find that the defendant's section 7 rights were not infringed." - See paragraphs 51 to 99.

Civil Rights - Topic 3157.4

Trials - Due process, fundamental justice and fair hearings - Criminal and quasi-criminal proceedings - Abuse of process - The accused were charged with fraud and conspiracy to commit fraud for allegedly manipulating the price of Knowledge House Inc. shares over an 18 month period in 2000 and 2001 - An investigation by the Nova Scotia Securities Commission was concluded in early 2004, although that process continued alongside a separate R.C.M.P. investigation that resulted in the criminal charges being preferred in 2011 - The accused sought a stay of proceedings under s. 24(1) of the Charter on the ground of abuse of process respecting the actions of the Crown and R.C.M.P. during the investigative and prosecutorial periods - The Nova Scotia Supreme Court held that the manner in which the investigation and prosecution were conducted did not constitute an abuse of process - The court stated that "There is no way to credibly argue that these decisions would violate those fundamental principles of justice which underlie the community's sense of fair play and decency. Further, there is nothing to suggest these choices amounted to vexatious or oppressive proceedings. This is not even close to being one of the 'clearest of cases'. Section 7 of the Charter is not triggered. There is nothing to suggest fair trial rights have been infringed. There is nothing to suggest these choices undermined society's expectation of fairness in the administration of justice. ... This case is instructive on how serious the state's actions must be to trigger a breach of section 7 requiring a section 24(1) stay of proceedings." - See paragraphs 32 to 50.

Civil Rights - Topic 3265

Trials - Speedy trial - "Within a reasonable time" - What constitutes - The accused were charged with fraud and conspiracy to commit fraud for allegedly manipulating the price of Knowledge House Inc. shares over an 18 month period in 2000 and 2001 - After an investigatory period of slightly more than eight years, the trial was scheduled to commence in September 2015 and conclude by February 1, 2016 - The accused sought a stay of proceedings under s. 24(1) of the Charter on the ground that the 59 month delay from charge to completion of trial violated their s. 11(b) Charter right to be tried within a reasonable time - The Nova Scotia Supreme Court dismissed the application - Thirteen months was neutral as the inherent time requirements for this complex case, as initial Crown disclosure was vast and complicated and there were problems accessing these materials - The Crown and the court repeatedly urged the accused to utilize the O'Connor procedure to obtain documents from the Securities Commission - The accused steadfastly insisted that the Crown had a McNeil duty to pursue the documents from the Commission - The delay in bringing an O'Connor application was the accused's responsibility (12 months) - An almost six month delay in adjourning the trial was attributable to the accused - A further three months was attributable to the accused for making two unsuccessful recusal motions - Of the 59 month delay, only 13 months was attributable to the Crown - None of the accused were seriously prejudiced by the delay - Apart from the 13 months, the Crown was extremely diligent in attempting to move the prosecution along - The accused's right to be tried within a reasonable time was not infringed - See paragraphs 100 to 175.

Civil Rights - Topic 3270

Trials - Due process, fundamental justice and fair hearings - Speedy trial - Accused's right to - Evidence of prejudice and causes of delay - The accused were charged with fraud and conspiracy to commit fraud for allegedly manipulating the price of Knowledge House Inc. shares over an 18 month period in 2000 and 2001 - The criminal charges followed early regulatory proceedings before the Nova Scotia Securities Commission and civil proceedings - The accused argued that their s. 11(b) Charter right to be tried within a reasonable time was infringed and cited examples of the prejudice they suffered - The Nova Scotia Supreme Court stated that "the defendants suffered much of their prejudice as a result of the drawn out, high profile civil and regulatory proceedings. The additional prejudice suffered after the criminal charges were laid is not measurable. It must be noted that all persons criminally charged suffer prejudice. In this case I am unable to state that the delay in prosecution exacerbated the prejudice reported. It must be remembered that an accused must demonstrate they have suffered prejudice beyond the prejudice ordinarily suffered as a result of being charged with a criminal offence. The prejudice at issue in a section 11(b) analysis is prejudice resulting from the delay, as opposed to prejudice resulting from the charge." - See paragraph 168.

Civil Rights - Topic 8374

Canadian Charter of Rights and Freedoms - Denial of rights - Remedies - Stay of proceedings - [See Criminal Law - Topic 255 ].

Courts - Topic 2015

Jurisdiction - General principles - Controlling abuse of its process - [See Criminal Law - Topic 255 ].

Criminal Law - Topic 253

Abuse of process - Oppressive or other conduct constituting abuse of process - What constitutes - [See Criminal Law - Topic 255 ].

Criminal Law - Topic 255

General principles - Abuse of process - Power of court to prevent an abuse of process and to grant an accused a stay of proceedings - The Nova Scotia Supreme Court discussed what constituted an abuse of process by the state that warranted a stay of proceedings against an accused - Abuse of process was not limited to fair trial interests, but included a "residual category" to capture diverse and unforeseeable circumstances where the prosecution was conducted so unfairly that it contravened fundamental notions of justice - Once abuse of process was established, the court still had to determine whether a stay of proceedings was the appropriate remedy - A stay would be granted only if "(1) the prejudice caused by the abuse in question will be manifested, perpetuated or aggravated through the conduct of the trial, or by its outcome; and (2) no other remedy is reasonably capable of removing that prejudice" - A stay of proceedings was appropriate only where "the affront to fair play and decency is disproportionate to the societal interest in the effective prosecution of criminal cases" - See paragraphs 32 to 46.

Cases Noticed:

R. v. McNeil (L.) (2009), 383 N.R. 1; 246 O.A.C. 154; 2009 SCC 3, refd to. [para. 10].

R. v. Williams (G.F.J.) (1994), 130 N.S.R.(2d) 8; 367 A.P.R. 8 (S.C.), refd to. [para. 13].

R. v. Stinchcombe, [1991] 3 S.C.R. 326; 130 N.R. 277; 120 A.R. 161; 8 W.A.C. 161, refd to. [para. 16].

National Bank Financial Ltd. v. Potter et al. (2005), 233 N.S.R.(2d) 123; 739 A.P.R. 123; 2005 NSSC 113, refd to. [para. 21].

Potter v. Nova Scotia Securities Commission (2006), 246 N.S.R.(2d) 1; 780 A.P.R. 1; 2006 NSCA 45, refd to. [para. 22].

Barthe v. National Bank Financial Ltd. (2015), 359 N.S.R.(2d) 258; 1133 A.P.R. 258; 2015 NSCA 47, refd to. [para. 30].

R. v. Théroux (R.), [1993] 2 S.C.R. 5; 151 N.R. 104; 54 Q.A.C. 184, refd to. [para. 30].

R. v. Brown (L.A.) et al. (1998), 107 O.T.C. 281 (Gen. Div.), refd to. [para. 31].

R. v. Darwish (W.H.) (2010), 258 O.A.C. 272; 2010 ONCA 124, leave to appeal denied (2010), 410 N.R. 399 (S.C.C.), refd to. [para. 31].

R. v. Young (1984), 3 O.A.C. 254; 40 C.R.(3d) 289 (C.A.), refd to. [para. 33].

R. v. Jewitt, [1985] 2 S.C.R. 128; 61 N.R. 159, refd to. [para. 33].

R. v. O'Connor (H.P.), [1995] 4 S.C.R. 411; 191 N.R. 1; 68 B.C.A.C. 1; 112 W.A.C. 1, refd to. [para. 36].

R. v. Keyowski, [1988] 1 S.C.R. 657; 83 N.R. 296; 65 Sask.R. 122, refd to. [para. 37].

R. v. Power (E.), [1994] 1 S.C.R. 601; 165 N.R. 241; 117 Nfld. & P.E.I.R. 269; 365 A.P.R. 269, refd to. [para. 39].

R. v. Nixon (O.) (2011), 417 N.R. 274; 502 A.R. 18; 517 W.A.C. 18; 2011 SCC 34, refd to. [para. 40].

R. v. Cunningham, [1992] O.J. No. 2754 (C.A.), refd to. [para. 40].

R. v. Conway, [1989] 1 S.C.R. 1659; 96 N.R. 241; 34 O.A.C. 165, refd to. [para. 43].

R. v. Regan (G.A.) (2012), 282 N.R. 1; 201 N.S.R.(2d) 63; 629 A.P.R. 63; 2002 SCC 12, refd to. [para. 44].

R. v. Babos (A.), [2014] 1 S.C.R. 309; 454 N.R. 86; 2014 SCC 16, refd to. [para. 45].

R. v. Bailey (G.S.) (2014), 589 A.R. 212; 2014 ABPC 104, refd to. [para. 46].

Blencoe v. Human Rights Commission (B.C.) et al. (2000), 260 N.R. 1; 141 B.C.A.C. 161; 231 W.A.C. 161; 2000 SCC 44, refd to. [para. 51].

Singh v. Minister of Employment and Immigration, [1985] 1 S.C.R. 177; 58 N.R. 1, refd to. [para. 54].

Godbout v. Longueuil (Ville), [1997] 3 S.C.R. 844; 219 N.R. 1, refd to. [para. 55].

R. v. Mills, [1986] 1 S.C.R. 863; 67 N.R. 241; 16 O.A.C. 81, refd to. [para. 82].

Thomson Newspapers Ltd. v. Director of Investigation and Research, Combines Investigation Act et al., [1990] 1 S.C.R. 425; 106 N.R. 161; 39 O.A.C. 161, refd to. [para. 82].

R. v. Joudrey (G.W.) (2010), 292 N.S.R.(2d) 332; 2010 NSSC 230, refd to. [para. 86].

Ontario (Minister of Labour) v. Lee Valley Tools Ltd. (2009), 264 O.A.C. 213; 2009 ONCA 387, refd to. [para. 87].

R. v. Kalanj; R. v. Pion, [1989] 1 S.C.R. 1594; 96 N.R. 191, refd to. [para. 87].

R. v. S.P.C. (2014), 351 N.S.R.(2d) 230; 1111 A.P.R. 230; 2014 NSSC 388, refd to. [para. 100].

R. v. Morin, [1992] 1 S.C.R. 771; 134 N.R. 321; 53 O.A.C. 241, refd to. [para. 101].

R. v. Askov, Hussey, Melo and Gugliotta, [1990] 2 S.C.R. 1199; 113 N.R. 241; 42 O.A.C. 81, refd to. [para. 111].

R. v. Godin (M.) (2009), 389 N.R. 1; 252 O.A.C. 377; 2009 SCC 26, refd to. [para. 129].

R. v. MacDougall (P.A.) (1988), 231 N.R. 147; 168 Nfld. & P.E.I.R. 83; 517 A.P.R. 8, refd to. [para. 133].

R. v. Schertzer (J.) et al. (2009), 255 O.A.C. 45; 2009 ONCA 742, refd to. [para. 134].

R. v. Freelend (K.W.) (2010), 511 A.R. 61; 2010 ABQB 799, refd to. [para. 148].

R. v. Chowbay (V.) et al., [2010] O.T.C. Uned. 4083; 2010 ONSC 4083, refd to. [para. 148].

R. v. Ryz (L.M.) (2008), 422 A.R. 367; 415 W.A.C. 367; 2008 ABCA 28, refd to. [para. 148].

R. v. Dixon (S.), [1998] 1 S.C.R. 244; 222 N.R. 243; 166 N.S.R.(2d) 241; 498 A.P.R. 241, refd to. [para. 149].

Authors and Works Noticed:

Hogg, Peter W., Constitutional Law of Canada (5th Ed. 2007), p. 47-73 [para. 52].

Paciocco, David, Stinchcombe on Steroids: The Surprising Legacy of McNeil (2009), 62 C.R.(6th) 26, p. 3 [para. 143].

Stratas, David, Crossing the Rubicon: The Supreme Court and Regulatory Investigations (2002), 6 C.R.(6th) 74, p. 76 [para. 146].

Stuart, Don, Charter Justice in Canadian Criminal Law (5th Ed. 2010), generally [para. 83]; pp. 392, 407 [para. 130].

Counsel:

Mark Covan, James Martin and Scott Millar, for the federal Crown;

Barry Whynot and Joshua Nodelman, for Bruce Clarke;

Robert Blois Colpitts, self-represented;

George MacDonald, Q.C., and Jane O'Neill, for Daniel Potter.

This application was heard between April 20 and July 10, 2015, at Halifax, N.S., before Coady, J., of the Nova Scotia Supreme Court, who delivered the following judgment on August 12, 2015.