British Columbia Securities Commission v. Branch and Levitt, (1995) 60 B.C.A.C. 1 (SCC)

• Judge: Gonthier, Cory, McLachlin, Iacobucci and Major, JJ.
• Court: Supreme Court (Canada)
• Case Date: April 13, 1995
• Jurisdiction: Canada (Federal)
• Citations: (1995), 60 B.C.A.C. 1 (SCC)

Securities Comm. v. Branch & Levitt (1995), 60 B.C.A.C. 1 (SCC);

    99 W.A.C. 1

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Bruce Douglas Branch and Pal Arthur Levitt (appellants) v. British Columbia Securities Commission (respondent) and The Attorney General of Canada, the Attorney General for Ontario, the Attorney General of Quebec, the Attorney General of Nova Scotia, the Attorney General of Manitoba, the Attorney General of British Columbia, the Attorney General for Saskatchewan and the Attorney General for Alberta (intervenors)

(22978)

Indexed As: British Columbia Securities Commission v. Branch and Levitt

Supreme Court of Canada

Lamer, C.J.C., La Forest, L'Heureux-Dubé, Sopinka,

Gonthier, Cory, McLachlin, Iacobucci and Major, JJ.

April 13, 1995.

Summary:

Branch and Levitt were directors of a company being investigated by the British Columbia Securities Commission under authority of the Securities Act. Pursuant to s. 128(1) of the Act, summonses were issued to Branch and Levitt to attend before the Com­mission to testify and to bring all informa­tion and records in their possession respect­ing the investigated company and relevant companies. Branch and Levitt refused to testify, invoking their right to silence and claiming that the investigation was prelimi­nary to possible criminal or quasi-criminal charges against them. The Commission sought to have Branch and Levitt found in contempt. Branch and Levitt sought a dec­laration that s. 128(1) violated their rights under ss. 7, 8, 9 and 15(1) of the Charter.

The British Columbia Supreme Court, in a judgment reported 43 B.C.L.R.(2d) 286, ordered that Branch and Levitt testify or, in default, show cause or be held in contempt. The court held that s. 128(1) did not violate ss. 7, 8, 9, 10 or 15(1) of the Charter. Branch and Levitt appealed.

The British Columbia Court of Appeal, in a judgment reported 63 B.C.L.R.(2d) 331, dismissed the appeal. Branch and Levitt appealed. The issues were whether s. 128(1) of the Securities Act violated s. 7 or 8 of the Charter and, if so, whether s. 128(1) was a reasonable limit prescribed by law under s. 1 of the Charter.

The Supreme Court of Canada dismissed the appeal. The court held that s. 128(1) did not violate s. 7 or 8 of the Charter.

Civil Rights - Topic 1508

Property - Expectation of privacy - Di­rectors of a corporation being investigated by the B.C. Securities Com­mission were compelled under s. 128(1) of the Securities Act to appear before the Commission and produce "records and things" - The Supreme Court of Canada held that s. 128(1) did not constitute an unreasonable search and seizure (Charter, s. 8) - Section 128(1) did not unreasonab­ly infringe the limited expectation of priv­acy - The court stated that "persons involved in the busi­ness of trading secur­ities do not have a high expectation of privacy with respect to regulatory needs that have been generally expressed in securities legislation" - The court noted that the demand for production of docu­ments was one of the least intru­sive means of obtaining documentary evidence and that documents produced in the course of a regulated business had a lesser privacy right than personal docu­ments - See para­graphs 49 to 64.

Civil Rights - Topic 1508

Property - Expectation of privacy - The Supreme Court of Canada stated that the right to be secure against unreasonable search and seizure (Charter, s. 8) was to protect a person's reasonable expectation of privacy - The court distin­guished between reasonable expectation of privacy in a criminal and administrative or regulatory context - The court stated that "it is clear that the standard of reasonable­ness which prevails in the case of a search and seizure made in the course of enforce­ment in the criminal context will not usually be the appropriate standard for a determination made in an administrative or regulatory context. ... The greater the departure from the realm of criminal law, the more flex­ible will be the approach to the standard of reasonableness. The appli­cation of a less strenuous approach to regulatory or ad­ministrative searches and seizures is con­sistent with a purposive approach to the elaboration of s. 8" - See paragraph 52.

Civil Rights - Topic 1646

Property - Search and seizure - Unreas­onable search and seizure defined - [See both Civil Rights - Topic 1508 ].

Civil Rights - Topic 4304.1

Protection against self-incrimination - Compellability - Exemption - The Supreme Court of Canada stated that the protection against self-incrimination required that persons compelled to testify be granted, in certain circumstances, ex­emptions from compulsion to testify - The court stated that the test was whether "the predominant purpose for seeking the evi­dence is to obtain incriminating evidence against the person compelled to testify or rather some legitimate purpose" - The court stated that "if it is established that the predominant purpose is not to obtain the relevant evidence for the purpose of the instant proceedings, but rather to in­criminate the witness, the party seeking to compel the witness must justify the poten­tial prejudice to the right of the witness against self-incrimination. If it is shown that the only prejudice is the possible subsequent derivative use of the testimony then the compulsion to testify will occa­sion no prejudice for that witness. The witness will be protected against such use. Further, if the witness can show any other significant prejudice that may arise from the testimony such that his right to a fair trial will be jeopardized, then the witness should not be compellable." - See para­graphs 6 to 11.

Civil Rights - Topic 4304.1

Protection against self-incrimination - Compellability - Exemption - [See first and second Civil Rights - Topic 4462 ].

Civil Rights - Topic 4304.2

Protection against self-incrimination - Compellability - Documents - Two direc­tors of a company being investigated by the B.C. Securities Commission were required to testify and produce documents under s. 128(1) of the Securities Act - They might subsequently be charged with a criminal or quasi-criminal offence - With respect to documentary compulsion, the Supreme Court of Canada stated that the documents were compellable subject to a possible claim against their subsequent use as derivative evidence on the basis of the "but for" test - Compellability did not violate the protection against self-incrimi­nation guaranteed by s. 7 of the Charter - Protection against self-incrimination did not apply to corporations, but corporation representatives compelled to testify "may receive the benefit of immunity protection in so far as they are personally implicated by their own evidence" - The court stated that "we also leave for future consideration the relevance of the regulatory context in determining the scope of s. 7 protection against self-incrimination in a case where the documents do not pre-exist the statu­tory compulsion to produce, but rather have been created by statutory compul­sion." - See paragraphs 38 to 48.

Civil Rights - Topic 4462

Protection against self-incrimination - Use of incriminating evidence in other pro­ceedings - Derivative evidence - The Supreme Court of Canada stated that, in R. v. R.J.S. (1995), 177 N.R. 81, it deter­mined that "the principle against self-incrimination, one of the principles of fundamental justice protected by s. 7 of the Canadian Charter of Rights and Freedoms, requires that persons compelled to testify be provided with subsequent 'derivative-use immunity' in addition to the 'use im­munity' guaranteed by s. 13 of the Charter. In addition ... courts could, in certain circumstances, grant exemptions from compulsion to testify" - The court, in the present case, further refined derivative-use immunity and the circumstances relating to exemptions from compulsion to testify - See paragraphs 2 to 12.

Civil Rights - Topic 4462

Protection against self-incrimination - Use of incriminating evidence in other pro­ceedings - Derivative evidence - Two directors of a company being investigated by the B.C. Securities Commission were required to testify and produce documents under s. 128(1) of the Securities Act - They might subsequently be charged with a criminal or quasi-criminal offence - With respect to testimonial compulsion, the Supreme Court of Canada stated that the predominant purpose of compelling them to testify was to obtain relevant evidence for the purpose of the investigation and not to incriminate them - The Act was regula­tory, with the goal of protecting our econ­omy in the public interest - Accordingly, the directors were compellable (no exemp­tion) - If there were subsequent proceed­ings, the directors could claim derivative-use im­munity, notwithstanding that the source of their evidence may derive from corporate activity - See paragraphs 31 to 37.

Civil Rights - Topic 4462

Protection against self-incrimination - Use of incriminating evidence in other pro­ceedings - Derivative evidence - The Supreme Court of Canada stated that "the principle against self-incrimination ... requires that persons compelled to testify be provided with subsequent 'derivative-use immunity' in addition to the 'use im­munity' guaranteed by s. 13 of the Charter" - The court stated that the accused bore the evidentiary burden of showing a plaus­ible connection between the compelled testimony and the evidence sought to be adduced - If that burden was satisfied, the Crown was required to prove on a balance of probabilities that authorities would have discovered the impugned derivative evi­dence absent the compelled testimony - Derivative-use immunity could be claimed in subsequent proceedings where the for­mer witness was subject to penal sanctions or any proceeding which engaged s. 7 of the Charter - See paragraphs 2 to 5.

Securities Regulation - Topic 1253

Regulatory commissions - Powers or jurisdiction - Re disclosure of information - Directors of a corporation being investi­gated by the B.C. Securities Commission were compelled under s. 128(1) of the Securities Act to appear before the Com­mission to testify and produce "records and things" - The Supreme Court of Canada held that s. 128(1) did not constitute an unreasonable search and seizure (Charter, s. 8) and did not infringe the protection against self-incrimination (s. 7).

Cases Noticed:

R. v. R.J.S. (1995), 177 N.R. 81; 78 O.A.C. 161 (S.C.C.), refd to. [para. 1].

R. v. Primeau (D.J.) (1995), 180 N.R. 101 (S.C.C.), refd to. [para. 1].

R. v. Jobin et al. (1995), 180 N.R. 303 (S.C.C.), refd to. [para. 1].

Starr et al. v. Houlden, [1990] 1 S.C.R. 1366; 110 N.R. 81; 41 O.A.C. 161; 55 C.C.C.(3d) 472, refd to. [para. 8].

Robinson v. British Columbia (1986), 28 C.C.C.(3d) 489 (B.C.S.C.), refd to. [para. 21].

Transpacific Tours Ltd. v. Canada (Com­bines Investigation Act Director of In­vestigation and Research) (1985), 25 D.L.R.(4th) 202 (B.C.S.C.), refd to. [para. 22].

R. v. Hebert, [1990] 2 S.C.R. 151; 110 N.R. 1; 77 C.R.(3d) 145; 57 C.C.C.(3d) 1; [1990] 5 W.W.R. 1; 47 B.C.L.R.(2d) 1, refd to. [para. 23].

Haywood Securities Inc. v. Inter-Tech Resource Group Inc. (1985), 24 D.L.R.(4th) 724 (B.C.C.A.), refd to. [para. 24].

Bishop v. College of Physicians and Sur­geons of British Columbia (1985), 22 D.L.R.(4th) 185 (B.C.S.C.), refd to. [para. 25].

College of Physicians and Surgeons of British Columbia v. Bishop (1989), 56 D.L.R.(4th) 164 (B.C.S.C.), refd to. [para. 25].

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; 54 C.C.C.(3d) 417; 76 C.R.(3d) 129; 67 D.L.R.(4th) 161; 29 C.P.R.(3d) 97; 47 C.R.R. 1, refd to. [para. 28].

Pezim v. British Columbia Securities Commission et al., [1994] 2 S.C.R. 557; 168 N.R. 321; 46 B.C.A.C. 1; 75 W.A.C. 1, refd to. [para. 34].

Canada v. Amway Corp. et al., [1989] 1 S.C.R. 21; 91 N.R. 18, refd to. [para. 37].

Irwin Toy Ltd. v. Québec (Procureur gén­éral), [1989] 1 S.C.R. 927; 94 N.R. 167; 24 Q.A.C. 2; 58 D.L.R.(4th) 577; 25 C.P.R.(3d) 417, refd to. [para. 40].

Ventouris v. Mountain, [1991] 3 All E.R. 472 (C.A.), refd to. [para. 43].

R. v. Wurm, Wurm and Davidson (1979), 24 A.R. 380 (T.D.), refd to. [para. 43].

Dubai Bank Ltd. v. Galadari, [1989] 3 All E.R. 769 (C.A.), refd to. [para. 43].

R. v. Collins, [1987] 1 S.C.R. 265; 74 N.R. 276; 56 C.R.(3d) 193; [1987] 3 W.W.R. 699; 38 D.L.R.(4th) 508; 33 C.C.C.(3d) 1; 28 C.R.R. 122; 13 B.C.L.R.(2d) 1, refd to. [para. 46].

R. v. Container Minerals Ltd., [1940] 4 D.L.R. 293 (Ont. S.C.), refd to. [para. 47].

R. v. Famous Players, [1932] O.R. 307 (S.C.), refd to. [para. 47].

Southam Inc. v. Hunter, [1984] 2 S.C.R. 145; 55 N.R. 241; 55 A.R. 291; 9 C.R.R. 355; 14 C.C.C.(3d) 97; 41 C.R.(3d) 97; [1984] 6 W.W.R. 577; 33 Alta. L.R.(2d) 193; 27 B.L.R. 297; 84 D.T.C. 6467; 2 C.P.R.(3d) 1; 11 D.L.R.(4th) 641, refd to. [para. 49].

R. v. McKinlay Transport Ltd. and C.T. Transport Inc., [1990] 1 S.C.R. 627; 106 N.R. 385; 39 O.A.C. 385, refd to. [para. 51].

Gregory & Co. v. Quebec Securities Com­mission, [1961] S.C.R. 584, refd to. [para. 57].

Baron et al. v. Minister of National Rev­enue et al., [1993] 1 S.C.R. 416; 146 N.R. 270, refd to. [para. 60].

R. v. Borden (J.R.), [1994] 3 S.C.R. 145; 171 N.R. 1; 134 N.S.R.(2d) 321; 383 A.P.R. 321, refd to. [para. 61].

R. v. Kokesch, [1990] 3 S.C.R. 3; 121 N.R. 161; [1991] 1 W.W.R. 193; 61 C.C.C.(3d) 207; 1 C.R.(4th) 62; 51 B.C.L.R.(2d) 157, refd to. [para. 61].

R. v. Wiley (R.W.), [1993] 3 S.C.R. 263; 158 N.R. 321; 34 B.C.A.C. 135; 56 W.A.C. 135; 84 C.C.C.(3d) 161, refd to. [para. 61].

R. v. Director of Serious Fraud Office (ex parte Smith), [1993] A.C. 1, refd to. [para. 69].

R. v. Dubois, [1985] 2 S.C.R. 350; 62 N.R. 50; 66 A.R. 202; [1986] 1 W.W.R. 193; 41 Alta. L.R.(2d) 97; 48 C.R.(3d) 193; 22 C.C.C.(3d) 513; 23 D.L.R.(4th) 503; 18 C.R.R. 1, refd to. [para 73].

Edmonton Journal v. Alberta (Attorney General), [1989] 2 S.C.R. 1326; 102 N.R. 321; 103 A.R. 321; [1990] 1 W.W.R. 577; 64 D.L.R.(4th) 577; 71 Alta. L.R.(2d) 273; 45 C.R.R. 1, refd to. [para. 74].

R. v. Lyons, [1987] 2 S.C.R. 309; 80 N.R. 161; 82 N.S.R.(2d) 271; 207 A.P.R. 271; 37 C.C.C.(3d) 1, refd to. [para. 76].

R. v. Wholesale Travel Group Inc. and Chedore, [1991] 3 S.C.R. 154; 130 N.R. 1; 49 O.A.C. 161; 67 C.C.C.(3d) 193; 8 C.R.(4th) 145, refd to. [para. 76].

R. v. Ellis-Don Ltd. et al., [1992] 1 S.C.R. 840; 134 N.R. 236; 53 O.A.C. 312, refd to. [para. 76].

Roper v. Royal Victoria Hospital, [1975] 2 S.C.R. 62; 11 N.R. 39, refd to. [para. 77].

Restrictive Trade Practices Commission et al. v. Irvine et al., [1987] 1 S.C.R. 181; 74 N.R. 33, refd to. [para. 77].

Ontario Securities Commission v. Biscotti (1988), 40 B.L.R. 160 (Ont. H.C.), refd to. [para. 77].

R. v. Beare; R. v. Higgins, [1988] 2 S.C.R. 387; 88 N.R. 205; 71 Sask.R. 1; 45 C.C.C.(3d) 57; [1989] 1 W.W.R. 97; 66 C.R.(3d) 97, refd to. [para. 79].

Statutes Noticed:

Canada Evidence Act, R.S.C. 1985, c. C-5, sect. 5(2) [para. 42].

Canadian Charter of Rights and Freedoms, 1982, sect. 7, sect. 8, sect. 13 [para. 19].

Securities Act, S.B.C. 1985, c. 83, sect. 126(1), sect. 127, sect. 128(1), sect. 128(3) [para. 19]; sect. 144(1), sect. 144(2) [para. 15].

Authors and Works Noticed:

Reid, A.D., and Young, A.H., Administra­tive Search and Seizure Under the Char­ter (1985), 10 Queen's L.J. 392, pp. 398, 399 [para. 53].

Counsel:

Alastair Rees-Thomas, for the appellants;

Mark L. Skwarok, for the respondent;

Michael R. Dambrot, Q.C., and John S. Tyhurst, for the intervenor, Attorney General of Canada;

Leah Price and Michel Hélie, for the intervenor, Attorney General for Ontario;

Jacques Gauvin and Gilles Laporte, for the intervenor, Attorney General of Quebec;

Louise Walsh Poirier, for the intervenor, Attorney General of Nova Scotia;

Marva J. Smith, for the intervenor, Attor­ney General of Manitoba;

George H. Copley, for the intervenor, Attorney General of British Columbia;

Graeme G. Mitchell, for the intervenor, Attorney General for Saskatchewan;

Richard F. Taylor, for the intervenor, Attorney General for Alberta.

Solicitors of Record:

Rees-Thomas & Company, Richmond, British Columbia, for the appellants;

Mark L. Skwarok, Vancouver, British Columbia, for the respondent;

John C. Tait, Q.C., Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the intervenor, Attorney General of Canada;

George Thomson, Toronto, Ontario, for the intervenor, Attorney General for Ontario;

Department of Justice, Ste-Foy, Quebec, for the intervenor, Attorney General of Quebec;

Attorney General of Nova Scotia, Halifax, Nova Scotia, for the intervenor, Attorney General of Nova Scotia;

Department of Justice, Winnipeg, Manito­ba, for the intervenor, Attorney General of Manitoba;

Ministry of the Attorney General for Brit­ish Columbia, Victoria, British Colum­bia, for the intervenor, Attorney General of British Columbia;

W. Brent Cotter, Regina, Saskatchewan, for the intervenor, Attorney General for Saskatchewan;

Attorney General for Alberta, Edmonton, Alberta, for the intervenor, Attorney General for Alberta.

This appeal was heard on February 28 and March 1, 1994, before Lamer, C.J.C., La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major, JJ., of the Supreme Court of Canada.

The judgment of the Supreme Court of Canada was delivered in both official lan­guages on April 13, 1995 and the following opinions were filed:

Sopinka and Iacobucci, JJ. (Lamer, C.J.C., La Forest, Cory, McLachlin and Major, JJ., concurring) - see para­graphs 1 to 66;

Gonthier, J. - see paragraph 67;

L'Heureux-Dubé, J. - see paragraphs 68 to 100.