The object of this paper is to discuss and analyze the purpose, evidentiary nature and constitutional aspects of s. 69(2) of the Competition Act. The section facilitates the admission in evidence of records found in the possession of a participant, on its premises or in the possession of one of its agents. Once the records are admitted as evidence, the section goes on to provide for rebuttable presumptions applicable against alleged participants to anti-competitive offences. These presumptions apply in both civil and criminal matters. In criminal cases, the section assists the prosecution in establishing a connection between an alleged agent of a participant and an alleged participant in that, in the absence of evidence to the contrary, the latter's knowledge and authority with respect to anything done, said or agreed by the agent or records received or written by him is deemed to have been proven. In 2014, notwithstanding 60 years of reliance by prosecutors and the courts, the presumptions set out in s. 69(2) were declared unconstitutional and of no force and effect in criminal cases by a judge of the Ontario Superior Court in R v. Durward. There, the trial judge found that the presumptions violated the right of an accused to be presumed innocent as guaranteed by ss. 7 and 11(d) of the Charter and that such infringement failed a s. 1 analysis under R. v. Oakes. First, the authors review the historical background and parliamentary debates to determine the purpose of the legislature in enacting the predecessor to s. 69. The authors then turn to consider the burden of proof placed on the accused to rebut the presumptions and whether the inferences are permissive or mandatory upon the trier of fact. The authors then discuss the constitutional issues raised under ss. 7 and 11(d) in light of the court's ruling in Durward. Finally, the article briefly examines whether the violation can or cannot be demonstrably justified under s. 1 of the Charter. In particular, the authors explore the question of the importance of the Competition Act's objective in general and the specific purposes sought by the presumptions of s. 69(2). The authors respectfully counter the Superior Court in Durward in that all presumptions set out under s. 69(2) cast an evidentiary burden on the accused, who may rebut the presumptions by adducing evidence to prevent the deemed inference. A review of the jurisprudence shows that the presumptions do not directly force the inference of elements of anti-competitive offences. Rather, s. 69(2) requires the trier(s) of fact to infer certain facts, but the presumptions do not compel conviction, as the trier(s) may weigh the totality of the evidence and conclude that the accused is not guilty of the indicted offence notwithstanding the deemed inference assuming no rebuttal evidence is led. While permissive presumptions of guilt do not violate the presumption of innocence, this paper maintains that in certain circumstances, the mandatory fact inferences set out under s. 69(2) may nonetheless lead to an infringement of ss. 7 and 11(d). In any event, the deemed presumptions nonetheless likely pursue a "pressing and substantial objective" and therefore satisfy the first step of the Oakes analysis. The constitutional validity of s. 69(2) will turn on the proportionality analysis mandated by Oakes, that is whether the overall benefits of the provision outweigh the negative effects produced by the breach of the presumption of innocence. If there is a Charter breach, the Ontario Court of Appeal will have to decide whether s. 1 of the Charter ought or ought not to save the provision on the basis of proportionality and validate 60 years of previous litigation.
In 2014, after being administered by courts for more than 60 years, the presumptions of section 69(2) of the Competition Act3 (the "Act") were declared unconstitutional by the Ontario Superior Court in R v. Durward,4 with no force and effect in respect of criminal proceedings.5 Madam Justice B. R. Warkentin held that the presumptions offend sections 7 and 11(d) of the Charter of human rights and freedoms6 (the "Charter") and that such violation is not demonstrably justified under s. 1 of the Charter.
Section 69(2) sets out rebuttable presumptions of fact in favour of the Crown applicable against "participants," i.e. persons against whom proceedings have been commenced under the Act, accused persons or persons alleged in a charge or indictment to have participated in or contributed to an offence.7 The presumptions of subparagraphs (a) and (b) assist the prosecution in establishing a connection between the agent of a participant and the participant as to the latter's knowledge and authority with respect to anything done, said or agreed upon by the agent or records received or written by him/her. Under s. 69(2) (c), the participant's knowledge, agreement and authority is presumed prima facie for records found in his/her possession, premises and files. These inferences greatly assist the Crown in making out its case against both corporate and individual participants, particularly in criminal proceedings for conspiracies to commit bid-rigging or price fixing. For ease of reference, s. 69 of the Act has been reproduced in Schedule A hereto.
The Crown's principal argument in Durward was that all presumptions set out in s. 69(2) are permissive, in that the trier of fact, having drawn the inferences contained therein, may still weigh the documentary evidence before rendering a verdict. In other words, there is no burden on the accused to rebut the inferences by adducing evidence to the contrary, as the judge or jury may find a reasonable doubt by evaluating the probative value of the documents. The Crown relied on the Supreme Court of Canada's holding that permissible presumptions of guilt do not infringe upon the presumption of innocence,8 and argued that should s. 69(2) violate the Charter, it is nonetheless justified under s. 1. Warkentin J. rejected the Crown's arguments, concluding that the presumptions of s. 69(2) are mandatory and pertain to essential elements of the offence (conspiracy to commit bid-rigging). More specifically, the Superior Court found that subparagraphs (a) and (b) impose an evidential burden on the accused to adduce evidence which is not disbelieved by the trier of fact and which raises a reasonable doubt in order to avoid conviction. As for subparagraph (c), the Superior Court construed it as a reverse onus clause9 (i.e. the presumed fact must be disproved on a balance of probabilities). Finding that there is no societal issue sufficiently serious and pressing to justify the presumptions, Warkentin J. held that the violation of ss. 7 and 11(d) of the Charter is not justified under s. 1.10
For the reasons that we discuss in this article, we are of the view that, contrary to what the Ontario Superior Court found in Durward, the presumptions of s. 69(2) all cast an evidential burden upon the accused and do not automatically lead to a conviction of the accused where the presumptions are triggered. Section 69(2) of the Act facilitates the admission in evidence of records found in the possession of a participant, on its premises or in the possession of one of its agents and makes it mandatory for the trier of fact to presume certain facts. However, as the case law demonstrates, the presumptions set out mandatory factual inferences, rather than inferences of guilt. The judge or jury, having considered the presumed facts and admitted documents, may still weigh the evidence to find that the accused was not guilty of the indicted offence. That said, we believe that the mandatory fact inferences set out under s. 69(2) may nonetheless lead to an infringement of ss. 7 and 11(d) in certain cases.
This paper discusses and analyzes the purpose, evidentiary nature and constitutional aspects of the s. 69(2) presumptions. First, we review the historical background and parliamentary debates to determine the intent of the legislature in enacting the predecessor to s. 69. We then assess the burden of proof placed on the accused for the rebuttal of the presumptions and whether the drawing of the inferences is permissive or mandatory upon the trier of fact. We then turn to a constitutional analysis, namely to determine whether the presumptions are capable of breaching ss. 7 and 11(d) of the Charter, as the Superior Court concluded in Durward. We finally briefly discuss whether the violation can be demonstrably justified under s. 1 of the Charter pursuant to the analysis set out by the Supreme Court in R. v. Oakes.11 In particular, we explore the question of the importance of the Act's objective in general and the specific purposes sought by the presumptions of s. 69(2).
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Originally published in the Canadian Competition Law Review, Vol. 28, No. 1
1 Lawyer, McMillan LLP. The authors wish to thank their reviewers, W. Michael G. Osborne and John M. Rosen, for their insightful feedback and comments. The authors are also grateful to Martin Bergeron for his help with research.
2 Partner, McMillan LLP. Prior to joining McMillan, Mtre Pinsonnault acted as General Counsel at the Competition Law Section of the Public Prosecution Service of Canada.
3 RSC 1985, c C-34 [the Act or Competition Act].
4 2014 ONSC 4194 [Durward].
5 Ibid at paras 73 and 74. The Court specified at paragraph 75 that "[n]othing [...] prevents the use of s 69(2) in a Competition Tribunal Proceeding."
6 The Constitution Act, 1982, Schedule B to the Canada Act 1982 (UK), 1982, c 11 [the Charter].
7 Competition Act, supra note 3, s 69(1).
8 R v Downey,  2 SCR 10, 1992 CanLII 109, 1992 CarswellAlta 56 at p 29 [Downey].
9 Durward, supra note 4 at para 54.
10 Ibid at paras 58-73.
11  1 SCR 103, 1986 CanLII 46 (SCC) [Oakes].
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2015