T-64-80
T-2207-80
T-3346-80
T-707-84
T-5652-80
The Queen (Plaintiff)
v.
Amway of Canada Limited/Amway du Canada
Ltée and Amway Corporation (Defendants)
INDEXED AS: R. V. AMWAY OF CANADA LTD.
Trial Division, Reed J. -Montréal, March 26;
Ottawa, June 6, 1986.
Customs and excise - Customs Act - Practice
"Deemed forfeiture" pursuant to Customs Act ss. 180 and 192
- Whether discovery of defendants' officers can be ordered =
Whether claims civil or penal and quasi-criminal - Forfeit
ure proceeding not in rem forfeiture - Common law privilege
against self-incrimination abrogated at federal level in 1893
- Statutory provisions establishing wide right of discovery
Defendants compellable at common law - Charter s. 11(c)
right not to be compelled to testify applicable, but right of
discovery restriction reasonable limit under s. 1 - Federal
Court Rules, C.R.C., c. 663, RR. 465(1)(b),(6),(8),(9),(11),
494(9) - Customs Act, R.S.C. 1970, c. C-40, ss. 2, 22 (as am.
by R.S.C. 1970 (2nd Supp.), c. 32, s. 2), 102, 160, 161, 180,
192, 248, 249 (as am. by R.S.C. 1970 (2nd Supp.), c. 10, s.
64(2)), 250, 251, 252 (as am. by R.S.C. 1970 (2nd Supp.), c. 10,
s. 64(2)) - Excise Tax Act, R.S.C. 1970, c. E-13, s. 58 -
Canadian Charter of Rights and Freedoms, being Part I of the
Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c.
11 (U.K.), ss. 1, 7, 8, 11(c),(d),(e),(f),(g),(h), 13 - Narcotic
Control Act, R.S.C. 1970, c. N-1, ss. 10, 11 - Environmental
Contaminants Act, S.C. 1974-75-76, c. 72, s. 13(2) - Fisher
ies Act, R.S.C. 1970, c. F-14, s. 58(5) - The Canada Evidence
Act, 1893, S.C. 1893, c. 31, s. 5 - An Act to amend The Law
of Evidence, 1851, 14 & 15 Vict., c. 99, ss. 2, 3 (U.K.)
Criminal Evidence Act, 1898, 61 & 62 Vict., c. 36, s.
1(a),(b),(e) (U.K.) - The Public Health Act, 1875, 38 & 39
Vict., c. 55 (U.K.) - Civil Evidence Act, 1968, 1968, c. 64
(U.K.) - Canada Evidence Act, R.S.C. 1970, c. E-10, ss. 2, 3,
5 - Rules of the Supreme Court (Revision) 1965, S.I.
1965/1776 - The Evidence Act, R.S.S. 1909, c. 60 - An Act
for the further Alteration and Amendment of the Laws and
Duties of Customs, 1854, 17 & 18 Vict., c. 122, s. 15 (U.K.)
The Supplemental Customs Consolidation Act, 1855, 18 & 19
Vict., c. 96, s. 36 (U.K.) - The Customs Amendment Act,
1857, 20 & 21 Vict., c. 62, ss. 14, 15 (U.K.) - The Crown
Suits, & c. Act, 1865, 28 & 29 Vict., c. 104, s. 34 (U.K.) - The
Customs Consolidation Act, 1876, 39 & 40 Vict., c. 36, s. 259
(U.K.) - An Act respecting the Customs, S.C. 1867, c. 6, s.
102 - An Act to amend and consolidate the Acts respecting
the Customs, S.C. 1877, c. 10, s. 103 - The Customs Act,
1883, S.C. 1883, c. 12, ss. 188, 190, 191 - Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, s. 3 - Immigration Act, 1976,
S.C. 1976-77, c. 52 - Income Tax Act, S.C. 1970-71-72,
c. 63 - Criminal Code, R.S.C. 1970, c. C-34.
Practice - Discovery - Examination for discovery
"Deemed forfeiture" under Customs Act - Whether discovery
can be ordered in claims for penalties or forfeitures
Common law privilege against self-incrimination abrogated at
federal level in 1893 - Statutory provisions establishing wide
right of discovery - Defendants compellable at common law
- Although Charter s. 11(c) right not to be compelled to
testify applicable, right of discovery restriction reasonable
limit under s. I - Ruling on Charter issue not premature at
examination for discovery stage - Federal Court Rules,
C.R.C., c. 663, RR. 465(1)(b),(6),(8),(9),(11), 494(9) - Cus
toms Act, R.S.C. 1970, c. C-40, ss. 2, 22 (as am. by R.S.C.
1970 (2nd Supp.), c. 32, s. 2), 102, 160, 161, 180, 192, 248, 249
(as am. by R.S.C. 1970 (2nd Supp.), c. 10, s. 64(2)), 250, 251,
252 (as am. by R.S.C. 1970 (2nd Supp.), c. 10, s. 64(2))
Excise Tax Act, R.S.C. 1970, c. E-13, s. 58 - Canadian
Charter of Rights and Freedoms, being Part I of the Constitu
tion Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11
(U.K.), ss. 1, 7, 8, 11(c),(d),(e),(f),(g),(h), 13 - Canada Evi
dence Act, R.S.C. 1970, c. E-10, ss. 2, 3, 5.
Constitutional law - Charter of Rights - Criminal process
- Right not to be compelled to testify - "Deemed forfeiture"
under Customs Act - Whether ordering production for dis
covery of defendants' officers contrary to Charter s. 11(c)
Only argument discovery prima facie infringement based on
distinction officer speaks 'for" company on examination for
discovery but not at trial - S. 11(c) applicable as applies to
penal as well as criminal matters - Discovery requirement in
"deemed forfeiture" procedures reasonable limit on Charter s.
11(c) right of non-compellability demonstrably justified in
free and democratic society - Ruling on Charter issue not
premature at examination for discovery stage - Federal
Court Rules, C.R.C., c. 663, RR. 465(1)(b),(6),(8),(9),(11),
494(9) - Customs Act, R.S.C. 1970, c. C-40, ss. 2, 22 (as am.
by R.S.C. 1970 (2nd Supp.), c. 32, s. 2), 102, 160, 161, 180,
192, 248, 249 (as am. by R.S.C. 1970 (2nd Supp.), c. 10, s.
64(2)), 250, 251, 252 (as am. by R.S.C. 1970 (2nd Supp.), c. 10,
s. 64(2)) - Excise Tax Act, R.S.C. 1970, c. E-13, s. 58 -
Canadian Charter of Rights and Freedoms, being Part I of the
Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c.
11 (U.K.), ss. 1, 7, 8, 11(c),(d),(e),(f),(g),(h), 13 - Narcotic
Control Act, R.S.C. 1970, c. N-1, ss. 10, 11 - Environmental
Contaminants Act, S.C. 1974-75-76, c. 72, s. 13(2) - Fisher
ies Act, R.S.C. 1970, c. F-14, s. 58(2) - Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, s. 3 — Immigration Act, 1976,
S.C. 1976-77, c. 52 — Income Tax Act, S.C. 1970-71-72, c.
63 — Criminal Code, R.S.C. 1970, c. C-34.
Unpaid customs duty, unpaid taxes and an amount attribut
able to a deemed forfeiture are claimed against the defendants
under subsection 180(2) and paragraph 192(2)(a) of the Cus
toms Act for alleged failure to report goods and the smuggling
into Canada of goods, contrary to the Act.
This is an application to compel the production for discovery
of two of the defendants' officers.
Two issues are raised: 1) whether compelling discovery would
infringe paragraph 11(c) of the Charter and 2) whether the
common law rule that discovery will not be ordered in claims
for penalties or forfeitures is still extant and applicable to the
present case.
Held, the application should be allowed.
It is clear that the commission of an offence is involved in the
claim, notwithstanding the fact that the Crown chose to pro
ceed by way of deemed forfeiture instead of by way of sum
mary conviction or indictment, as it could have done. The Act,
in subsection 192(2), refers to offences, the definition of which
is wide enough to include the present fact situation. Nor could
the proceeding be characterized as in rem forfeiture against the
goods. It is the conduct of the "offenders" which triggers a
"deemed forfeiture" against them. And although the deemed
forfeiture provisions of sections 180 and 192 of the Act resort
to a civil procedure, it is a means by which a penalty is imposed
for the commission of an offence.
The common law privilege enabling a witness to refuse to
answer incriminating questions including those which might
tend to expose the person to penalties or forfeiture was abol
ished in Canada, at the federal level, in 1893 and was replaced
by what is referred to as a subsequent use immunity. There is
no express statutory provision embodying common law rules
respecting penalties and forfeitures; on the contrary, our rules
expressly provide for a wide right of discovery. In fact, the
Canada Evidence Act expressly abrogated the common law
rules contended for here. Given the Federal Court rules appli
cable to discovery, a person being examined for discovery is in
substance a witness and section 5 of the Canada Evidence Act
applies to him.
A study of British and Canadian legislative history reveals
that a defendant in a forfeiture claim under the Customs Act
would be compellable. There could therefore be no underpin
ning on the basis of non-compellability to ground an immunity
from discovery, at common law.
To determine whether paragraph 11(c) of the Charter is
applicable in a particular case, the proper test is not the
jurisdiction of the Court. Nor can the proceeding chosen be, in
all cases, determinative. Although section 11 was intended to
apply mainly to proceedings in the ordinary criminal courts, it
is not expressly limited to criminal proceedings. Indeed, the
marginal note refers to proceedings in criminal and penal
matters. The present claim is clearly penal in nature.
Most significant is the fact that sections 180 and 192 provide
for parallel methods of enforcement of the penalties sought to
be imposed: one criminal, one civil. But the defendant's consti
tutional rights cannot depend on the Crown's choice of
procedure.
Paragraph 11(c) applies to the proceedings in the Federal
Court, at least insofar as the "deemed forfeiture" is concerned.
However, in the instant case, the limit on the right not to be
compelled to be a witness is demonstrably justified in a free and
democratic society. It is part of a taxation system based on
self-reporting and self-assessment. It meets the criteria set forth
by the Supreme Court of Canada in the Oakes case: the
objective is sufficiently important and the means are reasonably
proportional to the objectives sought.
Finally, it is not premature to determine a Charter issue such
as the present one at the examination for discovery stage.
CASES JUDICIALLY CONSIDERED
APPLIED:
Regina v. Fox et al. (1899), 18 P.R. 343 (Ont. C.A.);
R. v. Oakes, [1986] 1 S.C.R. 103; Allardice v. R., [1979]
1 F.C. 13 (T.D.); United States v. Bisceglia, 420 U.S.
141 (1975); Customs and Excise Comrs. v. Ingram,
[1948] 1 All E.R. 927 (C.A.).
DISTINGUISHED:
Belhumeur v. Discipline Ctee. of Que. Bar Assn. (1983),
34 C.R. (3d) 279 (Que. S.C.); Re James, [1983] 2
W.W.R. 316 (B.C.S.C.); R. v. Wigglesworth (1984), 11
C.C.C. (3d) 27 (Sask. C.A.); Denton y John Lister Ltd,
[1971] 3 All ER 669 (Q.B.D.); Rio Tinto Zinc Corpn. v.
Westinghouse Electric Corpn., [1978] A.C. 547 (H.L.),
reversing [1978] A.C. 553 (C.A.); Mexborough (Earl of)
v. Whitwood Urban District Council, [1897] 2 Q.B. 111
(C.A.); R. v. Mingo et al. (1982), 2 C.C.C. (3d) 23
(B.C.S.C.); R. v. Belcourt (1982), 69 C.C.C. (2d) 286
(B.C.S.C.); R. v. Boron (1983), 3 D.L.R. (4th) 238 (Ont.
H.C.); Caisse Populaire Laurier D'Ottawa Ltée v. Guer-
tin et al. (No. 2) (1983), 150 D.L.R. (3d) 541 (Ont.
H.C.); R. v. Taylor, [1985] 1 F.C. 331 (T.D.); Cutter
(Can.) Ltd. v. Baxter Travenol Laboratories of Can. Ltd.
(1984), 3 C.I.P.R. 143 (F.C.A.).
CONSIDERED:
Marun, Tvrtko Hardy v. The Queen, [1965] 1 Ex.C.R.
280; Blunt v. Park Lane Hotel, Ld., [1942] 2 K.B. 253
(C.A.); Martin v. Treacher (1886), 16 Q.B.D. 507
(C.A.); R. v. Big M Drug Mart Ltd. et al., [1985] 1
S.C.R. 295; R. v. Wooten (1983), 9 C.C.C. (3d) 513
(B.C.S.C.); Bowen v. Minister of Employment and
Immigration, [1984] 2 F.C. 507 (C.A.).
REFERRED TO:
R. v. Bureau, [1949] S.C.R. 367; Smith v. Coral, [1952]
3 D.L.R. 328 (Ont. H.C.); Dubois v. The Queen, [1985]
2 S.C.R. 350; Gosselin v. The King (1903), 33 S.C.R.
255; Grevas v. R. (1956), 18 W.W.R. 412 (B.C.C.A.);
Bartleman v. Moretti (1913), 4 W.W.R. 132 (Sask.
S.C.); Chambers v. Jaffray et al. (1906), 12 O.L.R. 377
(Div. Ct.); Klein v. Bell, [1955] S.C.R. 309; Ziegler v.
Hunter, [1984] 2 F.C. 608; (1984), 51 N.R. 1 (C.A.);
Stickney v. Trusz (1973), 16 C.C.C. (2d) 25 (Ont. H.C.);
Attorney General v. Radloff (1854), 10 Ex. 84; 156 E.R.
366; The King v. Doull, [1931] Ex.C.R. 159; Russell v.
Radley, [1984] 1 F.C. 543 (T.D.); R. v. Cohn (1984), 15
C.C.C. (3d) 150 (Ont. C.A.); Re Lazarenko and Law
Society of Alberta (1983), 4 D.L.R. (4th) 389 (Alta.
Q.B.); R. v. Judge of the General Sessions of the Peace
for the County of York, Ex p. Corning Glass Works of
Canada Ltd. (1970), 3 C.C.C. (2d) 204 (Ont. C.A.),
leave to appeal dismissed [1971] S.C.R. viii; R. v. Pater-
son (N.M.) and Sons Ltd., [1979] 1 W.W.R. 5 (Man.
C.A.).
COUNSEL:
Edward R. Sojonky, Q.C. and Michael F.
Ciavaglia for plaintiff.
Marc Noël and Guy Du Pont for defendants.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Verchère, Noël & Eddy, Montréal, for
defendants.
The following are the reasons for order ren
dered in English by
REED J.: This application is brought by the
plaintiff to compel the production for discovery of
two officers of the defendant corporations, pursu
ant to paragraph 465(1)(b) and subsection 465(8)
of the Federal Court Rules [C.R.C., c. 663]. The
actions to which the discovery relate are five
claims by the plaintiff against the defendants
under the Customs Act, R.S.C. 1970, c. C-40.
On the initial hearing of this motion the defen
dants raised the argument that discovery should
not be compelled against them because to do so
would be to infringe paragraph 11(c) of the
Canadian Charter of Rights and Freedoms [being
Part I of the Constitution Act, 1982, Schedule B,
Canada Act 1982, 1982, c. 11(U.K.)].
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;
This argument having been raised without prior
notice to either opposing counsel or the Court,
written argument thereon was sought from both
parties and the direction given that if, after
exchange of written arguments, either party
wished to make further oral representations with
respect to the paragraph 11(c) argument they
might do so. Such argument was subsequently
heard.
The defendants also argue that regardless of any
Charter argument which might apply there is a
common law rule that discovery will not be
ordered in claims for penalties or forfeitures and
that this rule is still extant and applicable to the
present case.
The proceedings under the Customs Act to
which the five motions relate allege: that the
defendants imported goods into Canada; that they
were required to present, for customs purposes,
invoices setting forth the fair market value of the
goods; that they provided false documentation in
this regard to the Department of National Reve
nue; that they made false declarations to customs
regarding fair market value; and in the alternative
that they undervalued the goods and thereby
defrauded the Revenue of duty. As a consequence
a claim is made for unpaid customs duty, unpaid
taxes and an amount attributable to a deemed
forfeiture of the goods:
duty $ 16,821,350.80
sales tax $ 12,770,989.58
value of goods $118,451,026.20
$148,043,366.58
One of the five actions (T-707-84) claims
unpaid duty and taxes only. No claim for forfeit
ure is made on that file; the relevant limitation
period had run by the time the claim was
commenced.
The claims for unpaid duties arise pursuant to
sections 102' and 22 [as am. by R.S.C. 1970 (2nd
Supp.), c. 32, s. 2] of the Customs Act. By virtue
of section 58 of the Excise Tax Act, R.S.C. 1970,
c. E-13 the applicable sales tax is included in those
claims.
The deemed forfeiture arises pursuant to sec
tions 180 and 192 of the Customs Act. Subsection
180(1), in conjunction with section 18 provides
that any person in charge of a vehicle arriving in
Canada or any person arriving on foot shall report
to the nearest customs house and make a report
respecting the quantities and value of goods being
imported. If this is not done the goods are forfeit
ed. Section 180 provides:
180. (1) Where the person in charge or custody of any
article mentioned in paragraph 18(b) has failed to comply with
any of the requirements of section 18, all the articles mentioned
in paragraph (b) of that section in the charge or custody of
such person shall be forfeited and may be seized and dealt with
accordingly.
' 102. The true amount of customs duties payable to Her
Majesty with respect to any goods imported into Canada or
exported therefrom, from and after the time when such duties
should have been paid or accounted for, constitutes a debt due
and payable to Her Majesty, jointly and severally, from the
owner of the goods at the time of the importation or exporta
tion thereof, and from the importer or exporter thereof, as the
case may be; and such debt may, at any time, be recovered with
full costs of suit, in any court of competent jurisdiction, and
any goods afterwards imported or exported by the owner are
subject to a lien for such debt and may be withheld from
delivery by customs until such debt is paid.
(2) If the articles so forfeited or any of them are not found,
the owner at the time of importation and the importer, and
every other person who has been in any way connected with the
unlawful importation of such articles shall forfeit a sum equal
to the value of the articles, and, whether such articles are found
or not,
(a) if the value for duty of the articles is under two hundred
dollars, is further liable on summary conviction before two
justices of the peace to a penalty not exceeding two hundred
dollars and not less than fifty dollars, or to imprisonment for
a term not exceeding one year and not less than one month,
or to both fine and imprisonment; and
(b) if the value for duty of the goods is two hundred dollars
or over, is guilty of an indictable offence and liable on
conviction to a penalty not exceeding one thousand dollars
and not less than two hundred dollars, or to imprisonment for
a term not exceeding four years, and not less than one year,
or to both fine and imprisonment. [Underlining added.]
And section 192:
192. (1) If any person
(a) smuggles or clandestinely introduces into Canada any
goods subject to duty under the value for duty of two
hundred dollars;
(b) makes out or passes or attempts to pass through the
custom-house, any false, forged or fraudulent invoice of any
goods of whatever value; or
(c) in any way attempts to defraud the revenue by avoiding
the payment of the duty or any part of the duty on any goods
of whatever value;
such goods if found shall be seized and forfeited, or if not found
but the value thereof has been ascertained, the person so
offending shall forfeit the value thereof as ascertained, such
forfeiture to be without power of remission in cases of offences
under paragraph (a).
(2) Every such person shall, in addition to any other penalty
to which he is subject for any such offence,
(a) forfeit a sum equal to the value of such goods, which sum
may be recovered in any court of competent jurisdiction; and
(b) further be liable on summary conviction before two
justices of the peace to a penalty not exceeding two hundred
dollars and not less than fifty dollars, or to imprisonment for
a term not exceeding one year and not less than one month,
or to both fine and imprisonment. [Underlining added.]
The definition section, section 2 of the Act,
provides:
2. (1) ...
"value" in respect of any penalty, punishment or forfeiture
imposed by this Act and based upon the value of any goods
or articles, means the duty-paid value of such goods or
articles at the time of the commission of the offence by which
such penalty, punishment or forfeiture is incurred; [Under-
lining added.]
The claim for all three components (duty, taxes
and amount as deemed forfeiture) is brought by
way of statement of claim in this Court pursuant
to sections 249 [as am. by R.S.C. 1970 (2nd
Supp.), c. 10, s. 64(2)] and 252 [as am. idem]:
249. (1) All penalties and forfeitures incurred under this Act,
or any other law relating to the customs or to trade or
navigation, may, in addition to any other remedy provided by
this Act or by law, and even if it is provided that the offender
shall be or become liable to any such penalty or forfeiture upon
summary conviction, be prosecuted, sued for and recovered
with full costs of suit, in the Federal Court of Canada, or in any
superior court having jurisdiction in that province of Canada
where the cause of prosecution arises, or wherein the defendant
is served with process.
(2) If the amount of any such penalty or forfeiture does not
exceed two hundred dollars, the same may also be prosecuted,
sued for and recovered in any court having jurisdiction to that
amount in the place where the cause of prosecution arises, or
where the defendant is served with process.
252. Every prosecution or suit in the Federal Court of
Canada, or in any superior court or court of competent jurisdic
tion, for the recovery or enforcement of any penalty or forfeit
ure imposed by this Act, or by any other law relating to the
customs or to trade or navigation, may be commenced, prose
cuted and proceeded with in accordance with any rules of
practice, general or special, established by the court for Crown
suits in revenue matters, or in accordance with the usual
practice and procedure of the court in civil cases, in so far as
such practice and procedure are applicable, and, whenever the
same are not applicable, then in accordance with the directions
of the court or a judge.
The plaintiff characterizes the five claims as
debt collection proceedings against the defendants
and therefore essentially civil in nature. The
defendants on the other hand argue that the for
feiture claims are penal and quasi-criminal.
Nature of the Claim
I do not think there can be much dispute that
the commission of an offence is involved in the
claim being made. Subsection 192(2) itself refers
to the activity giving rise to the forfeiture as an
offence, as does the definition section of the Act
itself. All the same elements (subject to what will
be said later about the burden of proof) must be
proven by the Crown for the purposes of these
proceedings as would be necessary to establish a
case under paragraph 180(2)(a) for summary
conviction, paragraph 180(2)(b) for indictable
offence, or under paragraph 192(2)(b) for sum
mary conviction, as must be proven in a forfeiture
claim alone under subsection 180(2) and para
graph 192(2)(a) respectively. This is not a case
such as Belhumeur v. Discipline Ctee. of Que. Bar
Assn. (1983), 34 C.R. (3d) 279 (Que. S.C.); Re
James, [1983] 2 W.W.R. 316 (B.C.S.C.) or R. v.
Wigglesworth ( 1984), 11 C.C.C. (3d) 27 (Sask.
C.A.). In those cases it could be said that the one
single act gave rise to more than one legal conse
quence: eg. a breach of the duty a person owes to
the state; a private cause of action vis-Ã -vis the
person injured; a breach of the duties of one's
office or calling. There are no such independent
breaches in subsection 180(2) and paragraph
192(2)(a). There is an integral connection between
the forfeiture and the proceedings by way of sum
mary conviction and indictment. The sections pro
vide alternative or potentially cumulative penalties
for the commission of the offences to which they
relate. The provisions can, for example, be, com
pared to the forfeiture provision in the Narcotic
Control Act. 2
What is more, it will immediately be noticed
that had the Crown proceeded by way of summary
conviction pursuant to paragraph 180(2)(a) or
paragraph 192(2)(b) for which a fine of two hun
dred dollars would be payable, or by way of indict
able offence under paragraph 180(2)(b) for which
a fine of one thousand dollars would be payable,
there would be no doubt that the Charter guaran
tee provided for by paragraph 11(c) would apply.
In any event the plaintiff did not proceed under
these provisions of the Customs Act. It proceeded
under subsection 180(2) and paragraph 192(2)(a)
on the basis of a deemed forfeiture and claimed an
2 See, for example, sections 10 and 11 of the Narcotic
Control Act, R.S.C. 1970, c. N-1, subsection 13(2) of the
Environmental Contaminants Act, S.C. 1974-75-76, c. 72 and
subsection 58(5) of the Fisheries Act, R.S.C. 1970, c. F-14 for
sections that are comparable to the Customs Act provisions but
which tie the forfeiture directly to conviction by way of sum
mary proceeding or indictment.
amount, as noted above, of $118,451,026.20 plus
the duties and taxes owing.
While the claims for unpaid duties and taxes
arise out of the fact of importation itself, as a debt
owed, this is not true of the monies sought by way
of "deemed forfeiture". This last is clearly punish
ment imposed as a result of culpable conduct; it is
a penalty imposed on the person "so offending" (in
the French version "la personne ainsi coupable"); 3
it is not a claim flowing from the non-payment of
duties and taxes per se as for example a claim for
interest would be.
In the Belhumeur case, cited above, Mr. Justice
Hugessen examined French and English defini
tions of "offence". With respect to the English
definitions, he was of the view that the word
"offence" in the Charter was reserved for: "le délit
public puni par l'état" (page 283). While he con
cluded that the violation of an ethical rule was not
an offence for the purposes of section 11, he
referred at pages 283 and 284 of his decision to the
definition found in Wharton's Law Lexicon, 14th
ed. (1938):
Offence ... It is used as a genus, comprehending every crime
and misdemeanour, or as a species, signifying a crime not
indictable, but punishable summarily, or by the forfeiture of a
penalty.
In my view, the present fact situation fits within
those definitions.
It was sought to characterize the proceeding as
an in rem forfeiture against the goods. But it is
really no such thing. It has none of the characteris
tics of an in rem forfeiture. A usual aspect of that
type of action is that the goods themselves are
proceeded against, regardless of the identity, con
duct or involvement of the owner in the proscribed
activity. 4 In this case the goods are not seized
independently of the identity or conduct of the
owner. It is the identity or conduct of the owner,
importer or other person which triggers a deemed
forfeiture against them under subsection 180(2).
And, it is the conduct of the owner or other
3 Subsection 192(2).
4 See Denton y John Lister Ltd, [1971] 3 All ER 669
(Q.B.D.).
individual, accused of an offence under subsection
192(1), which triggers the "deemed forfeiture" as
against that person. And the amount is "forfeited"
from whoever has committed the offence regard
less of whether he or she was owner of the goods or
had possession of them at the time the commission
of the offence occurred. In my view the phrase
"deemed forfeiture" is merely a way of describing
a fine imposed on the person found to have com
mitted the offence described by subsection 192(1).
That an offence is involved may be less clear
under subsection 180(2), than under paragraphs
192(1)(b) and (c), since subsection 180(2) seems
to visit a deemed forfeiture on every person "in
any way connected with the unlawful importa
tion", and does not expressly refer to the commis
sion of an offence. The very breadth of the subsec
tion raises a host of questions concerning its
constitutionality on grounds other than those
raised in this case. One wonders, for example,
whether it is not constitutionally suspect as con
trary to either sections 7 or 8 of the Charter. In
any event those considerations are not in argument
in this case, and, in my view, the words requiring a
person upon whom deemed forfeiture is imposed to
be a person in some way "connected with the
unlawful importation" indicates that the character
of that forfeiture is a fine for the commission of an
offence. The French version speaks of the forfeit
ure as "une amende égale It la valeur des
articles".
It is argued that the forfeiture claim is a debt
collection proceeding because: (1) the forfeiture
occurs automatically on the importation of the
goods in contravention of the Customs Act; (2) the
goods thereafter become the property of the
Crown; (3) a monetary debt is thus created and;
(4) the actions are civil proceedings to collect this
ascertained amount of money alleged due and
owing to the Crown. This argument relies on the
comments of Mr. Justice Cattanach in Marun,
Tvrtko Hardy v. The Queen, [1965] 1 Ex.C.R.
280, at page 295:
The forfeiture under sections 178 and 183 is automatic and
occurs immediately upon the unlawful importation by virtue of
section 2(1)(q) of the Customs Act reading as follows:
2.(1) In this Act, or in any other law relating to the Customs,
(q) "seized and forfeited", "liable to forfeiture" or "sub-
ject to forfeiture", or any other expression that might
of itself imply that some act subsequent to the com
mission of the offence is necessary to work the forfeit
ure, shall not be construed as rendering any such
subsequent act necessary, but the forfeiture shall
accrue at the time and by the commission of the
offence, in respect of which the penalty of forfeiture is
imposed;
The forfeiture is not brought about by any act of the
Customs officials or officers of the Department, but it is the
legal unescapable consequence of the unlawful importation of
the goods by the suppliant, Marun. The goods thereupon
became the property of the Crown and no act by any officer of
the Crown can undo that forfeiture. Therefore, any defect, if
such existed, in the notifications and procedure adopted by the
Department under sections 150 and 158 is not material.'
[Underlining added.]
I am not convinced that this analysis assists the
plaintiff in any way. The very paragraph to which
Mr. Justice Cattanach referred, 2(1) (q), makes it
clear that the forfeiture occurs as a result of and is
visited upon the individual committing the offence
described in section 192. I do not think character
izing the sum thus deemed to be owing as a "debt"
assists the plaintiff. It seems to me that a fine
imposed upon a person consequent upon a convic
tion for an offence in the criminal courts equally
could be said to be a debt owing to the Crown.
Reference to the history of the customs legisla
tion is essential to an understanding of the present
proceedings. The Customs Act obviously has its
roots in the customs and navigation laws of the
United Kingdom which pre-date confederation. In
that context there was no need to characterize
provisions of the law as criminal or civil. The
customs laws (and navigation acts) were simply
enforced in the Exchequer Court for the protection
of the King's revenue. Suits in the Exchequer for
forfeitures were commenced by civil information,
5 See also: R. v. Bureau, [1949] S.C.R. 367; Allardice v. R.,
[1979] 1 F.C. 13 (T.D.); Smith v. Goral, [1952] 3 D.L.R. 328
(Ont. H.C.).
either by a Crown Attorney or by an individual
suing both for himself and the state; 6 they were
either in personam or in rem depending upon the
statute or seizure involved.' The "Exchequer
procedure" of prosecuting what was in essence a
penal offence by a civil proceeding was simply
exported to this side of the Atlantic and prior to
confederation became part of the pre-confedera
tion laws of the colonies which eventually joined to
become Canada.
I would re-emphasize that this case does not
deal with an "in rem" forfeiture where goods or
vehicles are seized, for example, coming across the
border—where the goods might be said "to speak
for themselves". Under section 160 of the Customs
Act where a forfeiture is incurred a customs officer
reports that fact to the Minister. In this case it
would be the report of an investigation stating that
duties had been paid on the basis of untrue
invoices and claiming both the duties and taxes
owing as well as an amount equal to the value of
the goods from the defendants. The Minister, then,
under section 161 notifies "the person alleged to
have incurred the penalty or forfeiture". The rest
6 The capacity of individuals to initiate suit was, at least by
1859, withdrawn; section 250 of the present Customs Act
continues that situation:
250. All penalties and forfeitures imposed by this Act, or
by any other Act relating to the customs or to trade or
navigation shall, unless other provisions are made for the
recovery thereof, be sued for, prosecuted and recovered with
costs by the Attorney General of Canada, or in the name or
names of the Deputy Minister, or any officer or officers, or
other person or persons thereunto authorized by the Gover
nor in Council, either expressly or by general regulation or
order, and by no other person. [Underlining added.]
' See Harper L. A., English Navigation Laws, 1964 at pp.
111-113 for a description of the procedure. I note that United
States jurisprudence appears to have focussed on the distinction
between in rem and in personam forfeitures as significant for
constitutional purposes in that jurisdiction—see: J. R. Maxein-
er, Bane of American Forfeiture Law—Banished at Last?
(1977), 62 Cornell L. Rev. 768.
of the procedure under section 161 and following
does not need to be discussed. Suffice it to say that
the Crown ultimately commences action in this
Court for payment by the defendants of the
amounts claimed on the ground that they have
undervalued the goods, defrauded the revenue, etc.
As noted above, it is clear that the deemed forfeit
ure provisions of sections 180 and 192 of the
Customs Act provide for the imposition of a penal
ty for the commission of an offence, by means of a
civil procedure.
Common Law—Privilege Protecting Against Self-
Incrimination
Apart from any Charter argument, the defen
dants contend that discovery is not available
against them because a common law rule provides
that discovery will not be granted in the case of
claims for penalties or forfeitures. The defendants'
common law argument is based on the decision in
Rio Tinto Zinc Corpn. v. Westinghouse Electric
Corpn., [1978] A.C. 547 (H.L.), reversing [1978]
A.C. 553 (C.A.), especially the comments of Lord
Denning in the Court of Appeal at page 563; and,
on the decision in Mexborough (Earl of) v. Whit-
wood Urban District Council, [1897] 2 Q.B. 111
(C.A.).
The relevant comments of Lord Denning in the
Rio Tinto Zinc case (which involved the attempt
of an American court to obtain documents and
discovery against a United Kingdom corporation
with respect to an alleged uranium cartel) are as
follows [at page 563]:
We have a rule here against self-incrimination. The common
law has for centuries held that a person is not bound to answer
a question which may render him liable to punishment, penalty
or forfeiture. In the United States under the Fifth Amendment
an individual (not a company) is entitled to a privilege by
which he is not bound to answer questions by which he may
incriminate himself.
Take first our English position. We discussed it in the recent
case of Comet Products U.K. Ltd. v. Hawkex Plastics Ltd.,
[1971] 2 Q.B. 67. I quoted at p. 73 Bowen L.J. as saying in
Redfern v. Redfern [1891] P. 139, 147:
"It is one of the inveterate principles of English law that a
party cannot be compelled to discover that which, if
answered, would tend to subject him to any punishment,
penalty, forfeiture, ... 'no one is bound to criminate
himself ."
That privilege prevailed in England until an inquiry by the Law
Reform Committee, 16th Report in 1967 (Cmnd. 3472). They
recommended that the privilege in regard to forfeiture should
be abolished. It had been upheld in Earl of Mexborough v.
Whitwood Urban District Council [1897] 2 Q.B. 111. It was
expressly abolished by the Civil Evidence Act 1968, section
16(1)(a).
The Mexborough case dealt with the forfeiture
of a lease for a breach of a covenant thereof. The
Court of Appeal refused to grant discovery of
documents or administer interrogatories. Lord
Esher M.R. in giving reasons for his decision
stated, at pages 114-115:
I think that there are two rules of law which have always
existed as part of the common law of England, and have been
recognised as such by all courts whether of law or equity, and
the rights conferred by them have never been taken away by
any statute. The first is that, where a common informer sues for
a penalty, the Courts will not assist him by their procedure in
any way: and I think a similar rule has been laid down, and
acted upon from the earliest times, in respect of actions brought
to enforce a forfeiture of an estate in land. These are no doubt
rules of procedure, but they are much more than that: they are
rules made for the protection of people in respect of their
property, and against common informers. There has been a
great searching for reasons for these rules; but it does not
signify what the reasons for them are, if they are well recog
nised rules which have existed from time immemorial. But the
reasons for them have often been stated. It has been argued
that the reason why the Courts will not assist the plaintiff in an
action for a penalty is that it is a criminal action. But it is not.
There is no such thing as a criminal action. An action for a
penalty is a civil action just as much as an action for a
forfeiture. The rule b which a witness is .rotected from bein:
called on to answer questions which may tend to criminate
himself is often referred to in connection with this subject, but
it has really nothing to do with the two rules to which I have
referred. [Underlining added.]
In my view neither the Rio Tinto Zinc case nor
the Mexborough case are applicable in Canada
because our evidence laws have a different legisla
tive history from those in the United Kingdom.
The common law privilege enabling a witness to
refuse to answer incriminating questions including
those which might tend to expose the person to
penalties or forfeitures 8 was abolished in Canada,
at the federal level, in 1893. What is often referred
to as a subsequent use immunity was adopted
instead.' Section 5 of The Canada Evidence Act,
1893 [S.C. 1893, c. 31], the predecessor of our
present section provided:
5. No person [witness] shall be excused from answering any
question upon the ground that the answer to such question may
tend to criminate him, or may tend to establish his liability to a
civil proceeding at the instance of the Crown or of any other
person: Provided, however, that no evidence so given shall be
used or receivable in evidence against such person in any
criminal proceeding thereafter instituted against him other
than a prosecution for perjury in giving such evidence.
There is no comparable provision in the United
Kingdom legislation. Indeed, quite the contrary is
the case. When the common law position that
parties were neither competent nor compellable
was altered, with respect to civil proceedings, in
the United Kingdom by the Evidence Act of 1851
[An Act to amend The Law of Evidence, 1851, 14
& 15 Vict., c. 99 (U.K.)], the right of a witness
not to be compelled to answer incriminating ques
tions was specifically by statute preserved:
H. On the Trial of any Issue ... the Parties thereto ... shall
... be competent and compellable to give Evidence ....
III. But nothing herein contained ... shall render any Person
compellable to answer any Question tending to criminate him
self or herself .... [Underlining added.]
And when accused persons in criminal proceedings
were rendered competent, their immunity from
being compelled to be witnesses was statutorily
preserved.
It should be noted that while the Canadian
legislation seems to distinguish between answers
which may tend to "criminate" and those which
tend to establish liability to a civil proceeding
(penalties and forfeitures), the United Kingdom
legislation uses the term criminate more broadly as
including liability for criminal conviction, penalties
8 In the statute described as "liability to a civil proceeding at
the instance of the Crown or any other person".
9 A recent reference to this is found in the dissenting decision
by Mr. Justice McIntyre in Dubois v. The Queen, [1985] 2
S.C.R. 350, at pp. 376-377.
and forfeitures. '° Per Goddard L. J. in Blunt v.
Park Lane Hotel, Ld., [1942] 2 K.B. 253 (C.A.),
at page 257:
... the rule is that no one is bound to answer any question if the
answer thereto would, in the opinion of the judge, have a
tendency to expose the deponent to any criminal charge, penal
ty, or forfeiture which the judge regards as reasonably likely to
be preferred or sued for.
The question arises then whether despite the
abolition, in our law, of the privilege to refuse to
answer questions which incriminate or which
expose a person to civil liability there exists an
independent underpinning which establishes a
right to refuse discovery as claimed by the defend
ants. An answer is rendered difficult by the fact
that the origin and scope of the discovery rules are
not easy to ascertain. As noted above, Lord Esher
in the Mexborough case (which dealt with the
forfeiture of a lease) stated that the rule had
nothing to do with the principle protecting a
person from self-incrimination. What is more he
framed the rules as being applicable when a plain
tiff sought forfeiture of an interest in land or
brought an action for a penalty as a common
informer. (Neither of which condition is relevant
to the present case.) However, in Martin v.
Treacher (1886), 16 Q.B.D. 507 (C.A.), which
dealt with a claim by a plaintiff as common
informer for penalties against a defendant under
The Public Health Act, 1875, [38 & 39 Vict.,
c. 55 (U.K.)] Lord Esher M.R. refused to allow
interrogatories to be put to the defendant and in
commenting on the reasons for that decision stated
at pages 511-512:
1 S This is not the only terminology difference which bedevils
a comparative review of the development of the law, in the two
countries. The United Kingdom legislation distinguishes clearly
between competency and compellability: section 2 of the Evi
dence Act of 1851 states, "the Parties ... shall ... be com
petent and compellable to give Evidence" and section 3 "But
nothing herein contained shall render any Person who in any
criminal Proceeding is charged ... competent or compellable."
See also: The Criminal Evidence Act, 1898 [61 & 62 Vict.,
c. 36 (U.K.)], infra p. 26. Section 3 of our Act [Canada
Evidence Act, R.S.C. 1970, c. E-10] merely contains the cryp
tic statement "A person 'shall not be incompetent ...". But, see
Gosselin v. The King (1903), 33 S.C.R. 255, at p. 276 and
Schiff, Evidence in the Litigation Process, 2d ed., (1983), at
p. 171.
The reasons given seem substantially to amount to this:
although the penalty is not in strict law a criminal penalty, yet
the action is in the nature of a criminal charge against the
defendant: it is obvious in such a case that the action is of a
fishing character, the plaintiff first bringing his action and then
seeking to obtain the necessary materials to support it by
interrogating the defendant: and, the object of the action being
to subject the defendant to a penalty in the nature of a criminal
penalty, it would be monstrous that the plaintiff should be
allowed to bring such an action on speculation, and then,
admitting that he had not evidence to support it, to ask the
defendant to supply such evidence out of his own mouth and so
to criminate himself.
And Mr. Justice Lopes, at page 514:
I believe the true principle is that, when an action is brought
the sole object of which is to enforce penalties, interrogatories
cannot be administered, because the action is in the nature of a
criminal proceeding ....
Cross at page 276 of his text on Evidence (5th
ed., 1979) ascribes the origin of the discovery rule
respecting penalties to the doctrine that equity
would not assist a common informer. He ascribes
the rule respecting forfeitures to the doctrine that
equity would not grant discovery or order inter
rogatories in aid of a forfeiture of property. The
Law Reform Committee Report to which Lord
Denning referred in the Rio Tinto Zinc case,
supra at pages 17 and 18, is no more illuminating
with respect to the origin of the rules. It does
indicate (paragraph 13) that the rule respecting
penalties is of little practical importance at the
present time and that (paragraph 14) the rule
respecting forfeitures is an historical survival ref
lecting the reluctance of equity to aid a forfeiture
of property. It was recommended that this last be
abolished (which it was) because the courts now
possess and exercise full power to grant relief
against forfeiture in most cases. There is also some
indication that these rules originally developed
from the principle that the Court of Chancery
would only issue a bill of discovery to aid proceed
ings in the common law courts with respect to suits
relating to civil rights, not those relating to the
prosecution of an indictment or information:
Wigram, Points in the Law of Discovery (1840),
at pages 5, 79-85; 8 Wigmore, Evidence § 22'36
(McNaughton rev. 1961), at pages 334-336.
Meagher, Gummow and Lehane, Equity Doctrines
and Remedies (2nd ed., 1984), at pages 418 and
following also contains an exposition of these rules
of equity.
I do not think that these "curious rules", as they
have been described," respecting discovery should
be considered as having any independent existence
or survival outside the scope of the principles
respecting self-incrimination otherwise recognized
in Canadian law (federal or provincial as the case
may be). This is so not only because the legislation
respecting the rules of evidence differs in the two
jurisdictions but also because the rules of court
respecting discovery will differ. I note, for exam
ple, that order 24, rule 2(3) of the Rules of the
Supreme Court (Revision) 1965 [S.I. 1965/1776],
prior to the Civil Evidence Act, 1968 [1968, c. 64
(U.K.)] amendment expressly provided that dis
covery of documents in that court would not be
given to require:
... a defendant to an action for the recovery of any penalty
recoverable by virtue of any enactment to make discovery of
any documents or as requiring a defendant to an action to
enforce a forfeiture to make discovery of any documents relat
ing to the issue of forfeiture.
In any event, if a rule respecting a privilege
against self-incrimination, or other privilege, exists
for the purposes of a trial, the rules on discovery
should conform thereto. But in the absence of any
rule applicable at the trial stage limiting the com
pelling of evidence I cannot see why a discovery
rule should operate independently to provide a
broader protection or privilege unless some express
statutory provision or rule of court so provides.
There is no such express statutory provision
embodying the common law rules respecting
penalties and forfeitures which the defendants
claim apply. On the contrary, our rules expressly
provide for a wide right of discovery. In my view,
it is those express provisions which govern.
"Grevas v. R. (1956), 18 W.W.R. 412 (B.C.C.A.), at p.
414.
In addition, the effect of section 5 of the Canada
Evidence Act, R.S.C. 1970, c. E-10 on its own
terms, expressly abrogates the common law rules
contended for here. That Act applies "to all crimi
nal proceedings and to all civil proceedings and
other matters whatever respecting which the Par
liament of Canada has jurisdiction" (section 2).
Discovery proceedings pursuant to the Federal
Court Rules with respect to a customs action
brought in the Federal Court clearly fall within
that definition. As noted above, section 5 abro
gates the common law privilege to refuse to answer
questions on the ground of a tendency to incrimi
nate the person or establish liability with respect to
civil proceedings (ie: penalties and forfeitures). In
my view, whether the discovery rules are seen as
founded on the privilege of a witness to refuse to
answer questions which incriminate or on the basis
of some independent source in equity 12 they have
been expressly abolished by section 5 and section
2. This was the view of the majority of the Ontario
Court of Appeal in Regina v. Fox et al. (1899), 18
P.R. 343 13 and I find that view persuasive.
A different view was taken in Grevas v. R.
(1956), 18 W.W.R. 412 (B.C.C.A.). Although the
British Columbia Court of Appeal found that the
discovery rules existed they were held not to be
applicable to the fact situation of that case.
Some uncertainty as to the scope of section 5 of
the Canada Evidence Act as it relates to the
common law rules respecting discovery in actions
involving forfeiture exists because section 5 of the
Canada Evidence Act applies to "witnesses"
12 It seems clear that in the United Kingdom context they
were not based on any rule respecting non-compellability. Both
Cross in his text on evidence and the Law Reform Committee
Report referred to earlier (supra, p. 21) relate the two to the
privilege to refuse to answer questions as a witness. But a
consideration of compellability is set out infra pp. 25 ff.
13 Bartleman v. Moretti (1913), 4 W.W.R. 132 (Sask. S.C.),
adopted the same reasoning as applicable to the Saskatchewan
Evidence Act [The Evidence Act, R.S.S. 1909, c. 60]
There has been a view expressed that parties being
examined are not "witnesses": see the dissenting
judgment of Mr. Justice Rose in Regina v. Fox et
al. (1899), 18 P.R. 343 (Ont. C.A.), at page 357.
At the same time, where the applicable rules of
court provide that a person being examined on
discovery must testify "in the same manner, upon
the same terms and subject to the same rules of
examination as a witness" the issue seems to have
been clearly resolved. In that case section 5 of the
Canada Evidence Act applies and there is no privi
lege to refuse to answer questions on the basis that
the answers would be incriminating (or render one
liable to civil liability): Chambers v. Jaffray et al.
(1906), 12 O.L.R. 377 (Div. Ct.) especially at
page 380 per Mulock, C.J. and at pages 381-382
per Meredith, C.J. (C.A.). The reasoning in
Chambers v. Jaffray was approved by the
Supreme Court in Klein v. Bell, [1955] S.C.R.
309, at pages 313 and 317.
There is no provision in the Federal Court Rules
comparable to the Ontario rule which states that a
person being examined for discovery must testify
in the same manner as a witness. Nevertheless, I
think such a person is a "witness" for the purposes
of section 5 of the Canada Evidence Act. Rule
494(9) of the Federal Court Rules provides for the
use in evidence, at trial, of the examination for
discovery; at that stage the evidence of the person
being examined becomes evidence as if adduced
from a witness viva voce. The examination for
discovery takes place before a prothonotary, a
person agreed by the parties, or a judge (Rule
465(6)). Attendance of the person to be examined
may be enforced by subpoena (Rule 465(9)) "in
the same manner as the attendance of a witness at
trial". Unless otherwise agreed the examination
takes place under oath (Rule 465(11)). Thus, in
my view a person being examined for discovery is
in substance a witness and section 5 applies to him.
One last point to note, even if the defendants are
right and the old discovery rules re: forfeitures and
penalties are extant and applicable to the instant
case this would only excuse the defendants from
discovery insofar as the deemed forfeitures are
concerned. They would not be excused from dis
covery with respect to the duties and taxes owing.
It is clear that in "mixed" cases the Court will
order a limited discovery covering issues other
than those of penalty and forfeiture: Mexborough
(Earl of) v. Whitwood Urban District Council,
[1897] 2 Q.B. 111 (C.A.), at page 117.
Compellability
The principle of protection against self-incrimi
nation has two aspects: (1) the privilege to refuse
to answer questions, which in Canada has been
abrogated, with a subsequent use immunity being
adopted instead; (2) the right not to be compelled
to be a witness. 14 These two branches have differ
ent and independent historical roots, see: Cross,
Evidence (5th ed., 1979), at pages 163-166, 170-
172 and 275-278. The first branch (that of privi
lege) has been considered above. The second will
be discussed vis-Ã -vis the instant case first with
regard to its scope, as it existed in pre-Charter
days and then in the light of paragraph 11(c).
It seems impossible in this area of the law to
understand the present rules without delving into
the mists of history. Thus, I find it essential to
start with the United Kingdom Evidence Act of
1851 (1851, 14 & 15 Vict., c. 99 (U.K.)). That
statute altered the then existing common law posi
tion that parties were neither competent nor
compellable:
II. On the Trial of any Issue ... the Parties thereto ... shall
... be competent and compellable to give Evidence....
III. But nothing herein contained shall render any Person
who in any criminal Proceeding is charged with the Commis
sion of any indictable Offence, or any Offence punishable on
summary Conviction, competent or compellable to give Evi
dence for or against himself or herself .... [Underlining
added.]
14 See, for example, Ziegler v. Hunter, [1984] 2 F.C. 608;
(1984), 51 N.R. 1 (C.A.); Stickney v. Trusz (1973), 16 C.C.C.
(2d) 25 (Ont. H.C.) esp. at pp. 28-29; Ratushny, Is There a
Right Against Self-Incrimination in Canada (1973), 19
McGill L.J. 1 and his book Self-Incrimination in the Canadian
Criminal Process (Carswell, 1979), esp. at p. 92.
Then in 1898 persons charged with offences
were made competent but not compellable, the
Criminal Evidence Act, 1898, 61 & 62 Vict., c. 36
(U.K.):
1. Every person charged with an offence, ... shall be a
competent witness for the defence at every stage of the proceed
ings, ...
(a.) A person so charged shall not be called as a witness in
pursuance of this Act except upon his own application:
(b.) The failure of any person charged with an offence, ... to
give evidence shall not be made the subject of any comment
by the prosecution:
(e.) A person charged and being a witness in pursuance of
this Act may be asked any question in cross-examination
notwithstanding that it would tend to criminate him as to the
offence charged:
Shortly after the passage of the 1851 Act, but
before that of 1898 the question arose as to wheth
er a defendant in a customs forfeiture claim, for
treble value of the goods, was a person charged "in
any criminal proceedings". The Court held that he
was: Attorney General v. Radloff (1854), 10 Ex.
84; 156 E.R. 366. The Customs Act was thereafter
amended, to make it clear that a defendant in a
prosecution or suit for "the Recovery of any Penal
ties or Forfeitures, under any Law ... relating to
the Customs or Inland Revenue" was not covered
as being either competent or compellable: 15 An Act
for the further Alteration and Amendment of the
Laws and Duties of Customs, 1854, 17 & 18 Vict.,
c. 122, s. 15 (U.K.); The Supplemental Customs
Consolidation Act, 1855, 18 & 19 Vict., c. 96, s.
36 (U.K.); The Customs Amendment Act, 1857,
20 & 21 Vict., c. 62, s. 14 (U.K.). This last
provided:
XIV. The several Acts which declare and make competent
and compellable a Defendant to give Evidence in any Suit or
Proceeding to which he may be a Party shall not be deemed to
extend or apply to Defendants in any Suit or Proceeding
instituted under any Act relating to the Customs.
Section 15 of that Act provided:
XV. Whereas Doubts have arisen whether the several Sec
tions of "The Customs Consolidation Act, 1853," ... as also
"The Supplemental Customs Consolidation Act, 1855," are
15 That is, such proceedings were dealt with on the same basis
as criminal proceedings.
applicable to the British Possessions abroad: Be it enacted,
That the said recited Acts and the several Clauses therein and
in this Act contained shall and the same are hereby declared to
extend to and be of full Force and Effect in the several British
Possessions abroad, except where otherwise expressly provided
for by the said Acts ... and except also as to any such
Possession as shall by Local Act or Ordinance have provided, or
may hereafter, with the Sanction and Approbation of Her
Majesty and Her Successors, make entire Provision for the
Management and Regulation of the Customs Trade and Navi
gation of any such Possession, or make in like Manner express
Provisions in lieu or variation of any of the Clauses of the said
Act for the Purposes of such Possession.
In 1865 the The Crown Suits, & c. Act, 1865
(28 & 29 Vict., c. 104 (U.K.)) was passed. It
stated (section 34) that sections 2 and 3 of the
1851 Evidence Act:
34.... shall extend and apply to Proceedings at Law on the
Revenue Side of the Court; and any Proceeding at Law on the
Revenue Side of the Court shall not, for the Purposes of this
Act, be deemed a Criminal Proceeding within the Meaning of
the said Sections and Act as extended and applied by the
present Section.
This was reflected in the The Customs Consolida
tion Act, 1876, 39 & 40 Vict., c. 36, section 259
(U.K.):
259. If in any prosecution in respect of any goods seized for
nonpayment of duties, or any other cause of forfeiture, or for
the recovering of any penalty or penalties under the Customs
Act, any dispute shall arise whether the duties of Customs have
been paid in respect of such goods, or whether the same have
been lawfully imported or lawfully unshipped, or concerning
the place from whence such goods were brought, then and in
every such case the proof thereof shall be on the defendant in
such prosecution, and where any such proceedings are had in
the Exchequer Division of the High Court of Justice on the
Revenue side, the defendant shall be competent and compel-
lable to give evidence.
Thus as far as the United Kingdom is concerned
defendants in forfeiture claims under the Customs
Act were by statute rendered both competent and
compellable. 16
On this side of the Atlantic, the first Customs
Act (An Act respecting the Customs) enacted
after confederation: S.C. 1867, c. 6 provided in
section 102:
102. If the prosecution to recover any penalty or forfeiture
imposed by this Act, or by any other law relating to the
Customs or to Trade or Navigation, is brought in any Superior
Court of Law in either of the Provinces of Ontario, Nova
16 The comments in The King v. Doull, [1931J Ex.C.R. 159
would appear to have been made without knowledge of the
state of the United Kingdom law in 1897, in this regard.
Scotia or New Brunswick, it shall be heard and determined as
prosecutions for penalties and forfeitures are heard and deter
mined in Her Majesty's Court of Exchequer in England, in so
far as may be consistent with the established course and
practice of the Court in which the proceeding is instituted, and
with any law relating to the procedure in such Province, in suits
instituted on behalf of the Crown in matters relating to the
Revenue; and any such practice and law shall apply to prosecu
tions for the recovery of forfeitures and penalties under this
Act, in whatever Court they are instituted, so far as they can be
applied thereto consistently with this Act, and the venue in any
such case may be laid in any County in the Province in which
the proceeding is had, without alleging that the offence was
there committed. [Underlining added.]
This was carried forward in essentially the same
form in the 1877 Act [An Act to amend and
consolidate the Acts respecting the Customs]
(S.C. 1877, c. 10, s. 103). In 1875 the Exchequer
Court of Canada was created and in 1883 [The
Customs Act, 1883, S.C. 1883, c. 12] the above
noted sections of the Customs Act were amended
(see sections 188, 190 and 191 of that Act) to
become what are now sections 249, 251 and 252 in
the present Act (sections 249 and 252 are set out
above at page 11). Section 252 expressly provides
that for forfeiture claims "the usual practice and
procedure of the court in civil cases, insofar as
such practice and procedure are applicable" shall
apply.
In the light of this legislative history, it is my
view that, in the absence of any overriding Charter
provision, a defendant in a forfeiture claim under
the Customs Act would be compellable. This being
so there could be no underpinning on the basis of
non-compellability to ground an immunity from
discovery, at common law, as claimed by the
defendants.
Paragraph 11(c) of the Canadian Charter of
Rights and Freedoms
It is necessary, then, to consider paragraph
11(c) of the Charter. I set it out again, for
convenience:
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;
Counsel for the plaintiff argues that the section
is intended to apply only to suits brought in the
ordinary criminal courts by way of summary con
viction or indictable offence. It is argued that this
is clear from the use of the words "charged with
an offence" and by the other provisions of section
11;" that the defendants simply have not been
charged with an offence; they have been sued by
statement of claim for a debt owing; that the
burden of proof applicable is not that applicable in
criminal cases—the burden of proof is on the
defendants; that the other trappings of a criminal
proceeding are not in existence here; that revenue
laws are a category apart; they are enforced by
civil proceedings and paragraph 11(c) of the
Charter was simply not meant to apply to them.
Counsel for the defendants, on the other hand
argues that the substance of a deemed forfeiture
action is the imposition of punishment for an
offence; that the Charter provisions must be inter
preted with reference to the purpose they were
intended to serve; that to use the procedure
employed as a criteria for determining the applica
bility of Charter rights is both inappropriate and
creates a potential for abuse in allowing indirect
denial of constitutionally protected rights. The
decision of the Supreme Court in R. v. Big M
Drug Mart Ltd. et al., [1985] 1 S.C.R. 295, at
page 344 is cited:
In Hunter v. Southam Inc., [1984] 2 S.C.R. 145, this Court
expressed the view that the proper approach to the definition of
the rights and freedoms guaranteed by the Charter was a
purposive one. The meaning of a right or freedom guaranteed
by the Charter was to be ascertained by an analysis of the
purpose of such a guarantee; it was to be understood, in other
words, in the light of the interests it was meant to protect.
In my view this analysis is to be undertaken, and the purpose
of the right or freedom in question is to be sought by reference
to the character and the larger objects of the Charter itself, to
the language chosen to articulate the specific right or freedom,
to the historical origins of the concepts enshrined, and where
applicable, to the meaning and purpose of the other specific
17 ie: paragraphs (c) and (d) contemplate a proceeding in
which the crown must prove its case beyond a reasonable doubt;
paragraph (e) contemplates a proceeding that may result in a
person's imprisonment; paragraph (J) contemplates a proceed
ing that involves a jury trial; and paragraphs (g) and (h)
contemplate a proceeding that results in a finding of guilt or
innocence against someone.
rights and freedoms with which it is associated within the text
of the Charter. The interpretation should be, as the judgment in
Southam emphasizes, a generous rather than a legalistic one,
aimed at fulfilling the purpose of the guarantee and securing
for individuals the full benefit of the Charter's protection. At
the same time it is important not to overshoot the actual
purpose of the right or freedom in question, but to recall that
the Charter was not enacted in a vacuum, and must therefore,
as this Court's decision in Law Society of Upper Canada v.
Skapinker, [1984] 1 S.C.R. 357, illustrates, be placed in its
proper linguistic, philosophic and historical contexts.
With respect to the argument that section 11
contemplates only criminal proceedings in the
strict sense of that term the following are cited:
R. v. Belcourt (1982), 69 C.C.C. (2d) 286
(B.C.S.C.), at page 287; R. v. Mingo et al. (1982),
2 C.C.C. (3d) 23 (B.C.S.C.), at page 36; Re
James, [1983] 2 W.W.R. 316 (B.C.S.C.), at page
319; Belhumeur v. Discipline Ctee. of Que. Bar
Assn. (1983), 34 C.R. (3d) 279 (Que. S.C.);
Caisse Populaire Laurier D'Ottawa Ltée. v. Guer-
tin et al. (No. 2) (1983), 150 D.L.R. (3d) 541
(Ont. H.C.), at page 546; R. v. Boron (1983), 3
D.L.R. (4th) 238 (Ont. H.C.), at pages 242- 243;
R. v. Wooten (1983), 9 C.C.C. (3d) 513
(B.C.S.C.), at page 516 and Bowen v. Minister of
Employment and Immigration, [ 1984] 2 F.C. 507
(C.A.), at page 509.
Some of these (the James and Belhumeur cases)
have already been commented upon, supra pages
12 and 13. They are not really relevant to the fact
situation in issue here. They pertained to situations
where there were two (or more) separate legal
consequences to two or more persons or groups of
persons, arising out of one act.
The Mingo case, since it deals with penitentiary
disciplinary offences, also falls, insofar as its facts
are concerned, into this category. However, the
legal issue being debated was whether there was
an abuse of process because the defendant had
been prosecuted both for Criminal Code [R.S.C.
1970, c. C-34] offences and for penitentiary disci
plinary offences. In coming to the decision that
there was no abusive process since the two actions
were separate types of proceeding, ie. there was no
double jeopardy, the following comment was
made, at page 36:
The test of what constitutes an offence falls to be determined
by examining the enactment and determining, in so far as
federal legislation is concerned, if the allegation is dealt with by
a court with jurisdiction to hear an indictable or summary
conviction offence. In the case of provincial legislation, if the
allegation is dealt with by a court with jurisdiction to hear an
offence triable under the provisions of the Offence Act,
R.S.B.C. 1979, c. 305. [Underlining added.]
With respect, I do not think the test can be the
jurisdiction of the court. It must be more closely
linked to the nature or substance of the claim in
issue. In any event, such test as applied to a
customs forfeiture claim in the Federal Court
would be inconclusive since section 3 of the Feder
al Court Act, R.S.C. 1970 (2nd Supp.), c. 10
provides that:
3. The court of law, equity and admiralty in and for Canada
now existing under the name of the Exchequer Court of
Canada is hereby continued under the name of the Federal
Court of Canada as an additional court for the better adminis
tration of the laws of Canada and shall continue to be a
superior court of record having civil and criminal jurisdiction.
[Underlining added.]
The Belcourt, Boron and Caisse Populaire
Laurier cases all deal with situations in which a
criminal proceeding (without question) existed.
The Belcourt and Boron cases dealt with the ques
tion of when a charge might be said to have been
laid (laying of the information, arraignment or at
an earlier time than both). The issue in those cases
was whether or not the accused had been tried
within a reasonable time after the charge had been
laid. The Caisse Populaire Laurier case dealt with
whether a civil claim by the Caisse against the
defendant should be stayed pending the outcome
of a criminal charge against the defendant arising
out of the same fact situation. The case was con
cerned with the rules applicable after a charge had
been laid and the effect, if any, that should have
on the conduct of a parallel civil claim between
private parties. In all three of these cases a crimi
nal prosecution was in existence. There was no
question arising as to the scope of the words
"charged with an offence" as is in issue here.
Thus, whatever may be said in those cases to the
effect that section 11 covers criminal proceedings
only must be considered as dicta.
The Wooten and Bowen decisions I find more
helpful. They both deal with proceedings under the
Immigration Act, 1976 [S.C. 1976-77, c. 52] and
consider whether a person who is compelled to
attend and testify with respect thereto is being
compelled in contravention of paragraph 11(c) of
the Charter. In both decisions it was held that
there was no abrogation of paragraph 11(c). In
coming to those decisions the courts focussed on
the nature of the inquiry, not on the jurisdiction of
the court, not solely on the type of proceeding
being used to determine the issue in question. ' 8 It
was held that the purpose of the immigration
enquiry was to determine a person's status under
the Immigration Act, 1976, it was not to accuse
him or her of an offence and mete out punishment
therefor.
Mr. Justice MacDonald in the Wooten case did
rely, as well, on the fact that the immigration
proceedings were civil in nature. He commented
that paragraph "11(c) recognises and affirms the
historical distinction between civil and criminal
proceedings with respect to compellability" (at
page 516). He expressed the view that "s. 11(c) is
not intended to apply to civil proceedings."
With respect I do not share the view that the
nature of the proceeding chosen can in all cases be
determinative. I accept that the main thrust of
section 11 was clearly intended to be that it apply
to proceedings in, what counsel described as, the
ordinary criminal courts. At the same time, how
ever, section 11 is not expressly limited to criminal
proceedings. The marginal note to section 11 of
the Charter refers to "Proceedings in criminal and
penal matters". The claim in issue here, though
clothed in civil proceedings, is clearly penal. It is
not similar to the enquiries under the Immigration
Act dealt with in Wooten and Bowen.
18 A focus on the purpose of the claim coincides with the
analysis done by O. Hood Phillips in his treatise A First Book
of English Law, (6th ed., 1970) at pp. 247-248 where he tries
to define the difference between criminal offences and civil
wrongs.
But most significant in my view, indeed the
crucial aspect of this case, is the fact that sections
180 and 192 of the Customs Act provide for
parallel methods of enforcement of the penalties
sought to be imposed: one through indictment or
summary conviction in the ordinary criminal
courts (to which forfeiture might be an adjunct),
the other through "deemed forfeiture" by way of a
debt proceeding in the Federal Court (coupled, in
this case, with a claim for duties and taxes out
standing). I cannot accept that the Crown's right
to elect which procedure it will follow should
determine the defendant's constitutional rights.
I would indicate that I do not find the plaintiffs
argument that because the burden of proof is on
the defendants, by virtue of section 248 of the
Customs Act, the proceeding is one outside the
scope of section 11. This to me is a "bootstraps
argument". If the "deemed forfeiture" proceeding
is governed by paragraph 11(c), then paragraph
11(d) might also apply. It is not a compelling
argument to say that because Parliament has
imposed a reverse onus provision on the defen
dants, and therefore by statute dictated (or tried to
dictate) that paragraph 11(d) does not apply, the
action should not be considered to come within
paragraph 11 (c).
I was referred to Mr. Justice Rouleau's decision
in R. v. Taylor, [1985] 1 F.C. 331 (T.D.), at pages
339-340 where he characterized penalty sections
under the Income Tax Act [R.S.C. 1952, c. 148
(as am. by S.C. 1970-71-72, c. 63, s. 1)] as civil
proceedings, not quasi-criminal. The decision did
not deal with the Charter; it was concerned with
the statutory interpretation of the Income Tax Act
and the question of which party, the plaintiff or
the defendant should present its case first. I am
asked to draw the inference from that decision that
section 11 of the Charter only applies to ordinary
criminal proceedings. I do not do so. Also, I note
that there are cases of this Court which indicate
the contrary: Russell v. Radley, [1984] 1 F.C. 543
(T.D.) (a penitentiary disciplinary offence); Cutter
(Can.) Ltd. v. Baxter Travenol Laboratories of
Can. Ltd. (1984), 3 C.I.P.R. 143 (F.C.A.) (con-
tempt of court proceedings). See also: R. v. Cohn
(1984), 15 C.C.C. (3d) 150 (Ont. C.A.) especially
at pages 160-161. In addition, the reasoning of
Mr. Justice Sinclair in Re Lazarenko and Law
Society of Alberta (1983), 4 D.L.R. (4th) 389
(Alta. Q.B.) is instructive, even though the result
reached in that case may be against the developing
trend as exhibited in the jurisprudence generally in
the Belhumeur, Re James and Wigglesworth cases
(supra page 12).
Thus, the conclusion I have come to is that in
the present circumstances, paragraph 11(c) applies
to the proceedings in the Federal Court, at least
insofar as the "deemed forfeiture" is concerned.
Reasonable Limits Prescribed By Law
The plaintiff argues that revenue laws are a
category apart and that procedures not normally
sanctioned are both required and appropriate in
dealing with infractions thereof. This argument
relates to section one of the Charter which pro
vides that the constitutional guarantees set out in
the Charter shall be:
1. ... subject only to such reasonable limits prescribed by
law as can be demonstrably justified in a free and democratic
society.
While the plaintiff's argument, as a generality
(insofar as it relates to all aspects of all revenue
laws), may be too broad, I think it is well founded
insofar as it relates to discovery being sought from
the officers of the two corporate defendants in this
case. Counsel for the defendants cites the Supreme
Court decision in R. v. Oakes, [ 1986] 1 S.C.R. 103
as setting forth the criteria applicable. Chief Jus
tice Dickson at pages 138-139 states:
First, the objective, which the measures responsible for a limit
on a Charter right or freedom are designed to serve, must be
"of sufficient importance to warrant overriding a constitution
ally protected right or freedom" ... It is necessary, at a
minimum, that an objective relate to concerns which are press
ing and substantial in a free and democratic society before it
can be characterized as sufficiently important.
Second, once a sufficiently significant objective is recognized,
then the party invoking s. 1 must show that the means chosen
are reasonable and demonstrably justified. This involves "a
form of proportionality test": R. v. Big M Drug Mart Ltd.,
supra, at p. 352. Although the nature of the proportionality test
will vary depending on the circumstances, in each case courts
will be required to balance the interests of society with those of
individuals and groups. There are, in my view, three important
components of a proportionality test. First, the measures adopt
ed must be carefully designed to achieve the objective in
question. They must not be arbitrary, unfair or based on
irrational considerations. In short, they must be rationally
connected to the objective. Second, the means, even if rational
ly connected to the objective in this first sense, should impair
"as little as possible" the right or feeedom in question: R. v. Big
M Drug Mart Ltd., supra, at p. 352. Third, there must be a
proportionality between the effects of the measures which are
responsible for limiting the Charter right or freedom, and the
objective which has been identified as of "sufficient
importance".
In the first place the limit on the right not to be
compelled to be a witness is clearly "prescribed by
law": section 252 of the Customs Act read to
gether with the Federal Court Act and Rules,
particularly Rule 465. Secondly, the objective
which the statutory measures as a whole are
designed to serve are important to the body politic
as a whole. They are at least two in number: the
collection of revenue and the controlling of the
movement of goods across borders, for various
protective reasons such as economic protection to
local industries. Mr. Justice Dubé in Allardice v.
R., [1979] 1 F.C. 13 (T.D.), at page 22, wrote:
The purpose of the Act, obviously, is not to facilitate the
entry of foreign goods into Canada. Its true intent is twofold: to
protect the Canadian industry and to raise revenue. Subsection
2(3) prescribes a liberal construction for the protection of
revenue. It reads:
2....
(3) All the expressions and provisions of this Act, or of any
law relating to the customs, shall receive such fair and liberal
construction and interpretation as will best ensure the protec
tion of the revenue and the attainment of the purpose for
which this Act or such law was made, according to its true
intent, meaning and spirit.
The objectives of the more specific provision in
issue, ie: the compelling of discovery, have to be
considered in the context of the legislative measure
in which they are found: that is a taxation system
based on a system of self-reporting and self-assess-
ment. In that regard a decision of the United
States Supreme Court was cited to me: United
States v. Bisceglia, 420 U.S. 141 (1975). Quoting
from pages 145-146:
.. our tax structure is based on a system of self-reporting.
There is legal compulsion, to be sure, but basically the Govern
ment depends upon the good faith and integrity of each poten
tial taxpayer to disclose honestly all information relevant to tax
liability. Nonetheless, it would be naive to ignore the reality
that some persons attempt to outwit the system, and tax
evaders are not readily identifiable. Thus, § 7601 gives the
Internal Revenue Service a broad mandate to investigate and
audit "persons who may be liable" for taxes and § 7602
provides the power to "examine any books, papers, records, or
other data which may be relevant ... [and to summon] any
person having possession ... of books of account ... relevant or
material to such inquiry." Of necessity, the investigative au
thority so provided is not limited to situations in which there is
probable cause, in the traditional sense, to believe that a
violation of the tax laws exists. United States v. Powell, 379
U.S. 48 (1964). The purpose of the statutes is not to accuse,
but to inquire. Although such investigations unquestionably
involve some invasion of privacy, they are essential to our
self-reporting system, and the alternatives could well involve far
less agreeable invasions of house, business, and records.
We recognize that the authority vested in tax collectors may
be abused, as all power is subject to abuse. However, the
solution is not to restrict that authority so as to undermine the
efficacy of the federal tax system, which seeks to assure that
taxpayers pay what Congress has mandated and to prevent
dishonest persons from escaping taxation thus shifting heavier
burdens to honest taxpayers.
Similarly, in the United Kingdom extensive dis
covery in revenue matters is countenanced despite
the fact that such could be said to be self-
incriminating. In Customs and Excise Comrs. v.
Ingram, [1948] 1 All E.R. 927 (C.A.), at page 929
Lord Goddard, C.J. stated:
The only other matter which, I think, I need deal with is the
point which counsel for the defendants has argued, that the
court would not order the production of documents which may
incriminate the subject. In my opinion, one cannot make any
such limitation here. The very object of the Finance Act, 1946,
in the sections which relate to this matter, is to give to the
Crown the power of investigating a person's accounts and so
forth to see whether he is defrauding the Revenue by not
paying that which he ought to pay. To my mind, no new
principle here is introduced into the law. It is said that this is
compelling a man to incriminate himself or putting an onus on
a man to show that he has not been committing an offence, but,
it is quite a commonplace of legislation designed to protect the
revenue of the Crown, as it is realised that all the information
must generally be within the knowledge of the taxpayer or the
subject, to put an onus on him or to oblige him to do certain
things which may have the effect of incriminating him.
Not only do I think the objective of compelling
discovery in this case is sufficiently important to
meet the tests set out by the Supreme Court in the
Oakes case, I think the means are reasonably
proportional to the objectives sought. Chief Justice
Dickson in the Oakes case supra, indicated that
"the nature of the proportionality test will vary
depending on the circumstances". In this case the
proceedings are civil; there is no liability for
imprisonment, although the monetary penalties are
high. One could not say that what was being
sought was "arbitrary or unfair". No more is
required of the defendants than would be required
of a person in ordinary commercial litigation as
between private parties. There is a proportionality
and rational link between the effects and objec
tives of the measure. Whatever might be said
about some of the other aspects of the "deemed
forfeiture" procedures under the Customs Act, I
think those requiring discovery from the officers of
the defendant corporations are "reasonable limits"
on the right of non-compellability set out in para
graph 11(c), which are "demonstrably justified in
a free and democratic society".
Officers of a Corporation
The fundamental distinction on which counsel
for the defendants bases his whole argument in
this case is that drawn by Mr. Justice Arnup in R.
v. Judge of the General Sessions of the Peace for
the County of York, Ex p. Corning Glass Works
of Canada Ltd. (1970), 3 C.C.C. (2d) 204 (Ont.
C.A.). It was there held that on an examination
for discovery an officer being examined speaks
"for" the company (is the mouthpiece of the com
pany), while as a witness at trial such an officer
does not speak "for" the corporation. 19 He may be
required to testify but in that capacity he does so
as any other witness is required to do. It is only on
the basis of this distinction that one can make any
argument that discovery of the officers of the
defendant corporations is a prima facie infringe
ment of paragraph 11(c) of the Charter. An
application for leave to appeal the decision in the
Corning Glass case to the Supreme Court was
dismissed January 26, 1971 [[1971] S.C.R. viii].
There is some indication that where the corpora
tion is a "one-man" corporation there is an excep
tion to the rule set out in the Corning Glass case:
R. v. Paterson (N.M.) and Sons Ltd., [1979] 1
W.W.R. 5 (Man. C.A.). As counsel for the plain
tiff noted on the initial hearing of this motion,
however, from the material filed, it is clear that
the officers in question in this case do not fall into
that category.
Thus, the only effect of refusing to order the
officers of the corporation to appear for discovery
in the present case would be to postpone the
obtaining of their evidence until trial. In such
circumstances, even if I were wrong with respect to
the appropriateness of ordering discovery, it would
not be appropriate to refuse discovery outright. It
would be appropriate for the Court to use the
authority accorded to it by section 252 of the
Customs Act and adapt the applicable rules of
procedure. At the most, the defendants should be
subject to an order requiring them to produce the
requested officer for discovery, but qualifying the
weight to be given to evidence so produced as not
"binding" on the corporation. The answers would
be taken as having the same weight that they
would have at trial.
19 While it may be a bit of an overstatement to say that
answers given on discovery by an officer of a corporation
"bind" the corporation, since evidence contradicting what was
said can always be adduced at trial by the corporation, the
distinction is well settled in the jurisprudence. I can find no
reason to think that the position of an officer appearing for a
corporation is different under the Federal Court Rules than as
described by Arnup, J. with respect to those of Ontario.
Determination of the Issue—Premature?
One last argument remains to be considered.
Counsel for the plaintiff referred me to the Court
of Appeal decision in Cutter (Can.) Ltd. v. Baxter
Travenol Laboratories of Can. Ltd. (1984), 3
C.I.P.R. 143 (F.C.A.). That case dealt with an
attempt to invalidate a show cause order which
issued to require certain defendants to demon
strate why they were not in contempt of a court
order. The show cause order was challenged on the
ground that the affidavit evidence in support of the
application for the order had contained evidence
from an earlier related proceeding and therefore
was in contravention of section 13 of the Charter.
The Court of Appeal held that the show cause
order was comparable to a "summons" and that at
that stage of the proceedings it was difficult to see
how it could be said that the affidavit material was
being used "to incriminate" the defendants.
Mr. Justice Urie, speaking for the Court,
expressed the view, at page 153:
On the return of that order, proof must be made to support
the allegations of contempt. The evidence adduced, or attempt
ed to be adduced, in support of that proof may be challenged as
violating s. 13, in which event the trial Judge will be required to
make a ruling thereon. As I see it, there cannot be incriminato
ry evidence until the trial. To give the word "incriminate" the
broad meaning which would be required if the affidavit evi
dence was said to be incriminating, would extend its meaning
beyond that which it bears. [Underlining added.]
The plaintiff argues that similarly in this case
there can be no incriminating evidence until trial
and that to make a decision on the defendants'
argument now would be premature.
I cannot accept that contention. I do not think
the Cutter decision applies to this case. I do not
think it applies so broadly as to establish a rule
that a Charter issue, such as one under section 13
or paragraph 11(c), should not be determined at
the examination for discovery stage. The examina
tion for discovery stage is more closely linked to
the trial process than is the summons procedure
from which a show cause order issues. Also, an
extension of the Cutter decision, as contended for
by the plaintiff would not coincide with the multi-
tude of decisions from earlier days" which have
dealt with questions of privilege, forfeiture and
penalty at the discovery stage.
Conclusion
Accordingly, for the reasons given an order will
issue requiring the defendants to produce the
requested officers for discovery.
20 See for example: The King v. Doull, [1931] Ex.C.R. 159,
at p. 161.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.