Canada: Wires Crossed: Supreme Court Of Canada Permits Use Of Criminal Wiretap Evidence In Parallel Class Action

Last Updated: December 8 2014
Article by Imran Ahmad, Wendy Berman, Christopher Hersh and Jonathan Wansbrough

In its recent decision in Imperial Oil v. Jacques1, the Supreme Court of Canada (the "SCC") granted private class action litigants access to wiretap evidence obtained during a Competition Bureau (the "Competition Bureau") criminal investigation. The SCC's decision effectively puts the investigative arsenal of the state in the hands of civil litigants even prior to any criminal conviction or acquittal and notwithstanding the significant privacy rights at issue.

This decision considered the rules of the Quebec Code of Civil Procedure, and while time will tell how it will be applied elsewhere in Canada, the SCC has signalled that plaintiffs (and, more importantly, class counsel) may now gain access and use of wiretap evidence gathered in a criminal investigation for related civil cases.

Canadian police and regulatory agencies, including the Ontario Securities Commission ("OSC") Joint Serious Offences Team, are increasingly turning to more aggressive investigation tools, such as search warrants, wiretaps and wired informants. The ability of other parties to gain access to and share in the fruits of such invasive investigation tools raise difficult issues for corporations, and their directors and officers, in managing the legal, business and reputational risks of parallel regulatory or criminal investigations and proceedings (both domestic and cross-border) and related class actions or other civil litigation.

Further, increased cooperation and collaboration between law enforcement agencies, will likely open additional avenues for disclosure requests by civil litigants. For instance, the Competition Bureau and the OSC recently announced on November 25, 2014, that they have signed a Memorandum of Understanding to increase inter-agency cooperation, including in the areas of information sharing and providing assistance in investigations, litigation and enforcement actions. The OSC also recently formed several enforcement partnerships with municipal, provincial and federal policing agencies through its Joint Serious Offences Team. The enforcement landscape is changing and the ability of class action plaintiffs to share in the evidence obtained during a criminal investigation may result in an equally dramatic shift in the class action landscape.

Background

In 2004, the Competition Bureau launched an investigation into a potential conspiracy to fix retail gas prices in certain parts of Quebec. During the course of its investigation, the Competition Bureau sought and obtained wiretap orders under the Criminal Code and ultimately recorded over 220,000 private conversations. Criminal price fixing charges were ultimately laid against 54 individual and corporate defendants.

Following the criminal charges, a parallel class action was commenced in Quebec against certain of those charged and others for damages caused by the alleged illegal price fixing scheme. The plaintiffs sought disclosure of wiretap evidence gathered by the Competition Bureau in the course of its criminal investigation under article 402 of the Quebec Code of Civil Procedure.

The Quebec Court of Justice granted the plaintiffs' request and ordered the Competition Bureau to provide class counsel and their experts with the wiretap recordings that had been disclosed to the accused in the criminal proceedings. The Court of Appeal for Quebec dismissed the defendants' motion for leave to appeal this decision.

On appeal, the SCC considered, among other issues, whether the electronic communications intercepted during the course of a criminal investigation should be disclosed to the parties to the civil proceedings.

Decision and Analysis

While recognizing that privacy rights and the accused's right to a fair trial are fundamental rights, the SCC nonetheless rejected the notion that private communications intercepted by the state should be used only for the purpose for which they were obtained, criminal investigation and prosecution. The SCC focused on disclosure rights in the civil context, stating that "[t]he ultimate aim of any trial, criminal or civil, must be to seek and to ascertain the truth" and that in an adversarial system "the delicate task of bringing the truth to light falls first and foremost to the parties."

Provincial civil procedure rules similar to the Quebec Code of Civil Procedure permit parties to obtain documents in the possession of a third party under certain circumstances. While recognizing that such disclosure provisions are interpreted broadly, the SCC noted that limits may be necessary to avoid harming the interests of third parties and to avoid "fishing expeditions." In exercising its discretion regarding disclosure, the SCC held that courts should consider, inter alia:

  • the relevance of documents to the issues between the parties,
  • the extent to which the privacy of a party or of a third party to the proceedings is invaded and the importance of remaining sensitive to the duty to protect a person's privacy that flows from the Charter and the Civil Code of Quebec, and
  • proportionality. 

In the context where sought-after documents arise from a criminal investigation, the SCC stated that courts must also "consider ... the impact of disclosure of the documents in question on the efficient conduct of the criminal proceedings and ... on the right of the accused to a fair trial."

Since the wiretap information was collected under the Criminal Code (as opposed to the Competition Act, which contains limits on the use of collected information), the plaintiffs in the civil proceeding were able to rely on an exception from the general prohibition on the disclosure of wiretap evidence pursuant section 193(2) of the Criminal Code. This exception permits disclosure by a person "in the course of or for the purpose of giving evidence in any civil ... proceedings." The SCC interpreted this provision broadly and found it to apply during the pre-trial discovery phase as well as at trial.

Notwithstanding that the interception of private conversations is a serious infringement on privacy rights and allowed only in very limited circumstances, the SCC drew a distinction between the interception of private communications and whether communications that have already been intercepted can be disclosed in civil proceedings to serve other legitimate purposes, such as truth-finding, procedural fairness and ensuring the efficiency of the judicial process.

Ultimately the SCC found the disclosure of the wiretap information was appropriate under the circumstances, particularly given its limited scope of production only to counsel and the experts, which will protect third parties and not inhibit the efficiency of the criminal proceeding. The Court also found that there would be no undue financial or administrative burden on the party disclosing the information.

The majority's decision places significant emphasis on the importance of civil litigants being able to ascertain the "truth" during the trial process; however, it fails to balance this against the interests (including privacy interests) of the accused. Disclosing this wiretap evidence prior to the criminal trial and any challenge to its admissibility or authenticity, puts essentially untested evidence of private intercepted conversations into the hands of civil litigants, notwithstanding that the targets may be vindicated in the criminal proceeding and arguably gives such litigants unfair leverage in any resolution discussions.

Conclusion and Implications

It remains to be seen how the decision will be applied in the broader context, nevertheless, the potential implications are significant in that the decision effectively puts the extensive investigative arsenal of the state in the hands of civil litigants (including class counsel).The potential impact of the decision on the rights of the accused as well as the privacy rights of third parties is troubling especially in light of the lack of any clear guidance by the SCC on what might constitute a sufficient infringement to warrant nondisclosure of the requested information. Given the potential advantage of obtaining the fruits of the state's investigation file, we can expect such disclosure motions to become commonplace in class action proceedings with parallel regulatory, quasi-criminal and criminal investigations.

Footnote

1 2014 SCC 66.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Imran Ahmad
Wendy Berman
Christopher Hersh
Jonathan Wansbrough
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