The Attorney General of Canada v. Ni-Met Resources Inc.

The Attorney General of Canada v. Ni-Met Resources Inc. Collection Decisions of the Court of Appeal Date 2005-03-31 Docket numbers M30449 Judges Borins, Stephen; Sharpe, Robert J.; Armstrong, Robert Patrick Subject Civil Decision Content DATE: 20050331 DOCKET: M30449 COURT OF APPEAL FOR ONTARIO BORINS, SHARPE and ARMSTRONG JJ.A. B E T W E E N : THE ATTORNEY GENERAL OF CANADA Respondent David M. Humphrey, for the applicant/appellant - and - NI-MET RESOURCES INC. Applicant/Appellant D.D. Graham Reynolds, Q.C., and Geoffrey Roy for the respondent Heard: February 23, 2005 On appeal from the order of Justice Lee K. Ferrier of the Superior Court of Justice dated September 24, 2003. SHARPE J.A.: [1] This application for leave to appeal involves the sufficiency of evidence required to support the issuance of a search warrant pursuant to s. 12(1) of the Mutual Legal Assistance in Criminal Matters Act, R.S., 1985, c. 30 (4th Supp.) (the “Act”). A Peel Regional Police Services constable swore an affidavit that essentially repeated and relied entirely on the information contained in an unsworn written request from United States authorities for a search warrant that he attached as an exhibit. He did not communicate directly with U.S. authorities, nor did he conduct any independent investigation prior to swearing the affidavit. The U.S. request, however, contained detailed factual allegations of criminal wrongdoing and referred to documentary evidence said to support those allegations. [2] Dilks J., the authorizing judge, issued a search warrant on the basis of the affidavit. The warrant was executed and material was seized. Ferrier J., the application judge, rejected the appellant’s argument that the evidence was not sufficient to justify the issuance of the warrant and granted the Attorney General of Canada’s request to send the material seized to the U.S. authorities pursuant s. 15(1) of the Act. In his brief oral reasons, the application judge adopted substantial portions of the factum filed by the Attorney General. [3] The applicant/appellant (“appellant”) seeks leave to appeal the s. 15(1) order, arguing that the application judge erred in concluding that the evidence was sufficient to support the issuance of a search warrant. The appellant also submits that the application judge’s reasons were insufficient in law. [4] I am satisfied that the application for leave to appeal raises issues of law upon which leave should be granted: Canada (Commissioner of Competition) v. Falconbridge Ltd. (2003), 173 C.C.C. (3d) 466 (Ont. C.A.) at paras. 7-9. However, for the reasons that follow, I would dismiss the appeal. FACTS [5] The request for a search warrant under the Act arises from an ongoing grand jury investigation into an alleged conspiracy to import silicon metal under a false country of origin to avoid anti-dumping duties conducted by the United States Attorney for the Eastern District of Michigan in Detroit, Michigan. U.S. authorities allege that a representative of the appellant directed a company in the Netherlands to repackage shipments of silicon originating from China to make it look like the shipments came from South Africa. They also allege the appellant created purchase contracts and commercial invoices falsely listing South Africa as the country of export. [6] The Deputy Director of the Office of International Affairs in the U.S. Justice Department, Criminal Division signed a written request for the search warrant. The request provided details of five shipments with dates and places of shipment, value and quantity of goods shipped, purchase order and sales contract invoice numbers, and inculpatory correspondence from the appellant. The documents were described and summarized, but no copies were provided. The request also provided extracts from relevant U.S. legislation indicating that on the facts alleged certain specified offences had been committed. The request indicated that the appellant had a statutory duty to retain the records sought for five years and, as three years had already passed since the allegedly fraudulent shipments, asked that Canadian police carry out the search expeditiously. [7] The request was approved on behalf of the Minister of Justice under s. 11(1) of the Act on June 24, 2002. On February 18, 2003, counsel for the Attorney General of Canada presented an ex parte application for a search warrant based on the affidavit of a constable with the Peel Regional Police Services Fraud Unit. The affidavit essentially repeated the allegations contained in the written request. The constable attached as exhibits to his affidavit copies of the written request, a copy of the Treaty between the Government of Canada and the Government of the United States of America on Mutual Legal Assistance in Criminal Matters (18 March 1985, Can. T.S. 1990 No. 19, 24 I.L.M. 1092) (entered into force 24 January 1990) (the “Treaty”) and certain sections of the Act. It is conceded by the respondent that the constable conducted no independent investigation, nor did he speak to those conducting the U.S. investigation to obtain confirmation from them of the information set out in the written request. [8] The authorizing judge granted the order for a search warrant under s. 12(1) of the Act. The warrant was executed and material was seized from the appellant’s offices on the morning of February 25, 2003. [9] On the application to send the seized material to the U.S. authorities pursuant to s.15(1) of the Act, the appellant argued that the evidence filed in support of the application for the search warrant had been inadequate and that, accordingly, the sending order should be refused and the seized materials returned to the appellant. The appellant submitted that as the affidavit simply repeated the information contained in the request, which itself was unsworn hearsay, and as the deponent had done nothing to verify the information, the evidence was unreliable and insufficient to justify an authorization of the search. [10] The application judge rejected that submission and granted the sending order. In his brief oral reasons for judgment, the application judge noted that he had been assisted by the written memoranda of argument filed by both parties. His reasons in their entirety state: In this application, I have been assisted significantly by the written memoranda of argument filed by each party. I have reviewed those memoranda again, and the authorities referred to, and have considered the oral submissions of each party. Because of the quality of the memoranda, these reasons can be brief, and I am able to incorporate extensive passages from the memoranda in my reasons. The facts are fully developed in the memoranda filed. The issues are as framed in paragraphs 8 to 12, inclusive, of the Attorney General’s memorandum and paragraph 17 of the respondent’s memorandum. For the reasons argued by the applicant, the Attorney General of Canada, in paragraphs 13 to 34, inclusive, of the Attorney General’s memorandum of argument, the order sought is granted. And I have so endorsed the application record. LEGISLATION AND TREATY [11] The Act, which came into force in 1988, implements Canada’s treaty obligations for mutual assistance in international criminal matters. Its purpose was described by Doherty J.A. in Russian Federation v. Pokidyshev (1999), 138 C.C.C. 321 (Ont. C.A.) at paras. 15-16: The purpose of this Act is clear. By 1988, when the Act was proclaimed, international crime had become a major problem. Criminals, especially sophisticated ones, used the limits imposed on police and prosecutors by national borders to facilitate their criminal schemes and avoid detection: United Kingdom v. Ramsden (1996), 108 C.C.C. (3d) 289 (Ont. C.A.) at 294-95, sub nom. United Kingdom v. James and Boyden, leave to appeal to S.C.C. refused May 1, 1997 [reported 114 C.C.C. (3d) vi]. In 1988, Canada had international obligations under various treaties and conventions to assist other states in the investigation and detection of crime, but had no domestic legislation in place to provide the necessary assistance and cooperation. The Act filled that void and must be read with that purpose in mind. The Act addresses various kinds of help that Canada and foreign states can provide to each other in their efforts to combat international crime. This appeal is concerned with Part I of the Act which provides various means by which a foreign state can obtain information from sources in Canada to assist that foreign state in its investigation of criminal activity. [12] The provisions of the Act relating to search and seizure relevant to this application are as follows. Search and Seizure 10. The Criminal Code applies, with any modifications that the circumstances require, in respect of a search or a seizure under this Act, except to the extent that the Criminal Code is inconsistent with this Act. 11. (1) When the Minister approves a request of a state or entity to have a search or a seizure, or the use of any device or investigative technique or other procedure or the doing of any other thing to be described in a warrant, carried out regarding an offence, the Minister shall provide a competent authority with any documents or information necessary to apply for a search warrant or other warrant. (2) The competent authority who is provided with the documents or information shall apply ex parte for a search warrant or other warrant to a judge of the province in which the competent authority believes that evidence may be found. 12. (1) A judge of a province to whom an application is made under subsection 11(2) may issue a search warrant authorizing a peace officer named therein to execute it anywhere in the province, where the judge is satisfied by statements under oath that there are reasonable grounds to believe that (a) an offence has been committed; (b) evidence of the commission of the offence or information that may reveal the whereabouts of a person who is suspected of having committed the offence will be found in a building, receptacle or place in the province; and (c) it would not, in the circumstances, be appropriate to make an order under subsection 18(1). … 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 (ii) with respect to the protection of the interests of third parties. [13] The following provisions of the Treaty are relevant to this appeal. Article VI Requests 1. Requests shall be made by the Central Authority of the Requesting State directly to the Central Authority of the Requested State. 2. Requests shall be made in writing where compulsory process is required in the Requested State or where otherwise required by the Requested State. In urgent circumstances, such requests may be made orally, but shall be confirmed in writing forthwith. 3. A request shall contain such information as the Requested State requires to execute the request, including: (a) the name of the competent authority conducting the investigation or proceeding to which the request relates; (b) the subject matter and nature of the investigation or proceeding to which the request relates; (c) a description of the evidence, information or other assistance sought; (d) the purpose for which the evidence, information or other assistance is sought, and any time limitations relevant thereto; and (e) requirements for confidentiality. 4. The Courts of the Requesting State shall be authorized to order lawful disclosure of such information as is necessary to enable the Requested State for [sic] execute the request. 5. The Requested State shall use its best efforts to keep confidential a request and its contents except when otherwise authorized by the Requesting State. Article VII Execution of Requests 1. The Central Authority of the Requested State shall promptly execute the request or, when appropriate, transmit it to the competent authorities, who shall make best efforts to execute the request. The Courts of the Requested State shall have jurisdiction to issue subpoenas, search warrants or other orders necessary to execute the request. 2. A request shall be executed in accordance with the law of the Requested State and, to the extent not prohibited by the law of the Requested State, in accordance with the directions stated in the request. ISSUES (1) Was there sufficient evidence to support the search warrant pursuant to s. 12(1) of the Act? (2) Did the application judge provide adequate reasons for refusing to review the authorization and for allowing the sending order pursuant s. 15(1) of the Act? ANALYSIS (1) Was there sufficient evidence to support the issuance of a search warrant pursuant to s. 12(1) of the Act? [14] It is common ground that on an application for a sending order under s. 15(1) of the Act, the party targeted by the search warrant is entitled to ask the application judge to review the sufficiency of the grounds for the warrant and that a test akin to that mandated by R. v. Garofoli (1990), 60 C.C.C. (3d) 161 (S.C.C.) at 188 is applicable: R. v. Budd (2000), 150 C.C.C. (3d) 108 (Ont. C.A.) at paras. 14-23. Garofoli states that a reviewing judge (here the application judge) should not review the authorization de novo: The reviewing judge does not substitute his or her view for that of the authorizing judge. If, based on the record which was before the authorizing judge as amplified on the review, the reviewing judge concludes that the authorizing judge could have granted the authorization, then he or she should not interfere. [15] I conclude that it was open on the record to the authorizing judge to grant the warrant and, accordingly, the application judge did not err in granting the sending order and refusing to return the seized material to the appellant. [16] The facts recited in the affidavit provided sufficient grounds for a search warrant. The central issue is whether or not the constable had enough familiarity or connection with the facts of the case to swear a reliable affidavit. The appellant submits that the requirement in s. 12(1) of the Act that the judge be “satisfied by statements under oath that there are reasonable grounds to believe that” an offence had been committed and that a search would lead to evidence of that offence could not be met by an affidavit that simply parrots unsworn allegations in the written request from a treaty partner. [17] The requirement for evidence on oath to support a search warrant must be taken seriously. Parliament expressly required evidence on oath for a s. 12 search warrant, presumably because of the constitutional requirements mandated by s. 8 of the Canadian Charter of Rights and Freedoms. In Hunter et al. v. Southam Inc. (1984), 14 C.C.C. (3d) 97 (S.C.C.) at 115, Dickson J. identified “reasonable and probable grounds, established on oath, to believe that an offence has been committed and that there is evidence to be found at the place of the search” to be “the minimum standard, consistent with s. 8 of the Charter, for authorizing search and seizure.” [18] However, it is well-established that hearsay evidence is admissible on an application for a search warrant and that the deponent may rely on unsworn information provided by others to establish reasonable grounds for the search. Although hearsay is admissible, the authorizing judge is required to assess the nature and quality of the sources for the deponent’s evidence to ensure that reasonable grounds have been made out: R. v. Debot (1989), 52 C.C.C. (3d) 193 (S.C.C.) at 214-15; Garofoli, supra at 191. [19] I do not accept the suggestion that a written request from a mutual assistance treaty partner must necessarily be considered inherently reliable. The evidence should be carefully scrutinized to ensure that the statutory and constitutional standards have been met. Both s. 10 of the Act and Art. VII(2) of the Treaty explicitly mandate the application of Canadian law. As stated in R. v. Cook, [1998] 2 S.C.R. 597 at 678, Canada’s international obligations cannot “truncate rights defined by the Charter”. On the other hand, when assessing the reliability of evidence filed in support of a search warrant under the Act, it is appropriate to take into account the treaty and the statutory scheme and to consider in the balance that the underlying facts are presented with the formal assurance of Canada’s treaty partner. As Fish J.A. put it in Attorney General of Canada v. Cuenca et al. (1995), 100 C.C.C. (3d) 320 (Que. C.A.) at 324: “Courts must construe both the treaty and the statute in a fair and liberal manner so as to favour the fulfilment by Canada of its international obligations and the accomplishment by Parliament of its legislative objectives.” [20] The affidavit was based on information formally presented by another state pursuant to a treaty and approved on behalf of the Minister of Justice. While by no means conclusive of the reliability of the information contained in the affidavit, the source of the information and the process spelled out in the Treaty and in the Act are factors that the judge is entitled to consider. Implicit in the Treaty and in the statutory scheme is an element of reliance on the assurances of the foreign authorities. The proposition that Canadian authorities have the responsibility of conducting an independent investigation to corroborate the facts contained in a request under the Act has been consistently rejected: Alberta (Attorney General) v. Dawson, [1999] A.J. No. 809 (Q.B.), leave to appeal to C.A. refused, [1999] A.J. No. 1332 (C.A.), further leave to appeal to S.C.C. refused, [1999] S.C.C.A. No. 570; The Attorney General of Canada v. Amhaz, 2002 BCSC 118 at para. 26; United States of America v. Barbarash, [2002] B.C.J. No. 2803 (S.C.) at para. 23; United States of America v. Stuckey (1999), 181 D.L.R. (4th) 144 (B.C.S.C.) at para. 149, aff’d (2000), 151 C.C.C. (3d) 312 (B.C.C.A.) [21] This, of course, is not to say that the information contained in a foreign request must be taken at face value. The sources for the allegations should be carefully reviewed. Allegations based on undisclosed or unspecified sources not capable of verification should be regarded with suspicion: see Barbarash, supra; Sherk v. Canada (Attorney General) (2003), 178 C.C.C. (3d) 297 (B.C.S.C.) at paras. 24-25. However, where, as in the present case, the request contains detailed factual allegations based on an apparently solid foundation, the authorizing judge is entitled to treat the request as a reliable source for the affidavit filed in support of the application. [22] In my view, the decision of the Quebec Court of Appeal in United States of America v. Future Électronique Inc. (2000), 151 C.C.C. (3d) 403 (appeal quashed as moot: [2001] C.S.C.R. no. 82) is distinguishable. The affidavit in that case depended on information from former employees of the target of the request, and Proulx J.A. concluded that there was insufficient information to assess the reliability of those informants. In the case at bar, the factual allegations in the request were detailed and precise. Specific shipments of specific quantities were identified. Dates, provenance and destination, purchase order and sales contract numbers, prices, and other details were provided. The information was derived from hard documentary evidence, not from inherently suspect sources such as anonymous tips or unidentified confidential informers. I would also distinguish Sherk, supra, as in that case, the affidavit did not attach, and thereby expose to judicial scrutiny, the written request from the foreign authorities. [23] Accordingly, I conclude that there was sufficient evidence to support the issuance of a search warrant pursuant to s. 12(1) of the Act. (3) Did the application judge provide adequate reasons for refusing to review the authorization and for allowing the sending order pursuant to s. 15(1) of the Act? [24] The appellant, relying on R. v. Sheppard (2002), 162 C.C.C. (3d) 298 (S.C.C.), submits that by simply adopting significant portions of the Attorney General’s factum, the application judge failed to provide adequate reasons for refusing to review the authorization and allowing the sending order. [25] Sheppard does not hold that a failure to provide adequate reasons amounts to an automatic, freestanding ground of appeal. Sheppard mandates a functional approach. The assessment of the sufficiency of reasons is “tied to their purpose and the purpose varies with the context” (para. 24). The adequacy of reasons as a ground of appeal is to be assessed with a view to determining whether the reasons effectively deprive a party of meaningful appellate review. As Binnie J. put it at para. 25, “If deficiencies in the reasons do not, in a particular case, foreclose meaningful appellate review, but allow for its full exercise”, the deficiencies will not by themselves justify appellate intervention. [26] It is frequently inadvisable for a judge to rely solely on the submissions of one party in providing reasons for judgment: see R. v. Gaudet (1998), 125 C.C.C. (3d) 17 (Ont. C.A.) at 35-36. On the other hand, there are cases where the issue is so clearly defined and argued by the parties that the purpose of giving reasons will be met if the judge simply adopts the submissions advanced by one of them. So long as the losing party is able to determine why he or she lost and is not deprived of meaningful appellate review, the Sheppard test will be satisfied. [27] In the present case, the parties provided the application judge with written submissions on a legal issue that was clearly defined and argued. The decision did not depend on the credibility of witnesses or findings of fact. When the application judge adopted the Attorney General’s argument, the appellant knew precisely why it lost. I fail to see how, in the circumstances of this case, the appellant has been deprived of meaningful appellate review. Accordingly, I would not give effect to this ground of appeal. CONCLUSION [28] For these reasons, I would grant leave to appeal but dismiss the appeal. “Robert J. Sharpe J.A.” “I agree S. Borins. J.A.” “I agree R.P. Armstrong J.A.” RELEASED: March 31, 2005