Lahaie v. Canada (Attorney General)

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Case Name:
Lahaie v. Canada (Attorney General)
Between
Andre Lahaie and Digital Super City Inc.,
Plaintiffs, and
Attorney General of Canada and Jean-Louis Noreau,
Defendants
[2008] O.J. No. 5276
Court File No. 02-CV-19982
Ontario Superior Court of Justice
D.J. Power J.
Heard: January 8 - 12, 15, 17, 19, February 26
and 28, 2007 and January 21 - 25, 30, 31 and
February 1, 2008.
Judgment: December 22, 2008.
(267 paras.)
Counsel:
Joseph Y. Obagi, Elizabeth Quigley, and Chelsea Gilder, for the Plaintiffs.
Elizabeth Richards and Alexander Gay, for the Defendants.
REASONS FOR DECISION
D.J. POWER J.:-Introduction
1
This action arises out of searches and seizures undertaken in 1998 and 1999 by the Royal
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Canadian Mounted Police (hereinafter "RCMP") and Industry Canada and their employees of
premises occupied by and businesses conducted by the plaintiffs.
2 The plaintiffs in this proceeding seek damages under s. 24 of the Canadian Charter of Rights
and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982
(U.K.), 1982, c. 11 [the "Charter"] against Jean-Louis Noreau, a corporal in the RCMP, and against
the Attorney General pursuant to the Crown Liability and Proceedings Act, R.S.C. 1985 c. C-50 for
the conduct of the RCMP and Industry Canada and their employees for the alleged improperly
obtained search warrants and the subsequent unreasonable searches and seizures. They argue that
the defendants' alleged misconduct constituted denials of their s. 8 Charter right to be free from
unreasonable search and seizure.
3 In my opinion, no valid claim has been made out on a balance of probabilities by the plaintiffs
with respect to Industry Canada or any of its employees and, therefore, the claim against the
Attorney General, insofar as Industry Canada and its employees are concerned, is dismissed.
4 The plaintiff, Digital Super City Inc. (hereinafter "Digital"), is an Ontario corporation. The
plaintiff, Andre Lahaie, was the majority shareholder and President of Digital. At all relevant times
Digital carried on business exclusively as a retail and wholesale importer and supplier of satellite
communications equipment and "smart cards" designed for the decoding and reception of encrypted
satellite television broadcasts emanating from the United States of America.
5 At the relevant times, Jean-Louis Noreau held the rank of constable. For ease of reference,
Jean-Louis Noreau and the Attorney General of Canada will sometimes hereinafter be referred to as
"the defendants".
6 The plaintiffs allege that in 1998, Digital operated its business from rental premises known
municipally as Unit #2 - 91 Rochester Street, Ottawa. Unit #1 at that address was occupied as a
residence by Mr. Lahaie and his family. Unit #3 was the residence of another tenant.
7 The plaintiffs argue that the digital satellite systems with which their business was involved "...
were legally imported into Canada from the United States and Mexico" and "[a]ll applicable custom
taxes and duties were paid by Digital Super City through their customs broker, ... and all necessary
declarations were made to Revenue Canada - Customs Border Services." The taxes, duties, and
declarations, indeed, were paid and made respectively. They allege that in addition, Digital "...
[w]as the exclusive supplier of digital satellite and related equipment to franchised retail outlets
located in Manotick, Kingston, Oshawa, Newbridge and Newmarket" in the province of Ontario.
They allege that Digital, however, was not the sole local supplier to the public of digital satellite and
related equipment used to receive and decode satellite broadcasts emanating from the United States.
They allege that it was "only one of numerous suppliers of such products which were openly selling
the said type of equipment ..." Digital also possessed and sold sophisticated computer software
applications used to re-program, or "hack" access cards used in these systems in order to receive
and decode the encrypted broadcast signals without paying a fee to the distributors.
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8 The plaintiffs allege that on November 24, 1998, the RCMP obtained a search warrant for all
three units in 91 Rochester Street on the strength of an "information" sworn by Jean-Louis Noreau.
It is alleged that on November 24, 1998, the aforesaid search warrants were acted upon by
Jean-Louis Noreau and other officers of the RCMP as well as officers from Industry Canada. In
particular, they allege that this search warrant was obtained under false pretenses and without
reasonable cause and was executed in an excessive fashion and, therefore, as noted above, the
actions of the defendants constituted a breach of the plaintiffs' fundamental rights and freedoms
contrary to s. 8 of the Charter. In particular, they argue that had full disclosure of the state of the
jurisprudence concerning ss. 9 and 10 of the Radiocommunication Act, R.S.C. 1985, c. R-2
(hereinafter, the "Act") been made to the issuing Justices of the Peace, the search warrants would
not have been authorized in neither 1998 or 1999.
9 According to the allegations of the plaintiffs, the defendants acted unreasonably in the
execution of the search warrants in that they removed all business records and computer equipment
utilized in Digital's day-to-day operations and, in particular, they allege that the equipment and
records seized in the course of executing the search warrants had a value of in excess of $250,000.
They plead that on November 25, 1998, RCMP officers conducted press conferences and interviews
with respect to the aforesaid searches, which conduct they allege to have been excessive and in
breach of their Charter rights. The plaintiffs also allege that what Corporal Noreau and the RCMP
were seeking, improperly it is argued, was a search warrant with as wide a scope as possible so that
they could use the results of these searches and seizures, not simply for use in a prosecution of the
plaintiffs but, rather, for the purpose of completely shutting down the plaintiffs' business; to make
an example of them and; as well, for use in the defendants' "kick-off project."
10 The plaintiffs argue that, instead of proceeding with these searches and seizures, the
defendants could have, as the Act allowed, moved for injunctive relief to prevent the plaintiffs from
carrying on their business pending their prosecution. The plaintiffs further argue that the defendants'
conduct was unreasonable, oppressive, and/or excessive.
11 It is alleged that, among other things, the defendants were wrong in their assumption that the
use which the plaintiffs made of the smart cards used to decode encrypted satellite signals and the
communications equipment were illegal in the sense that they were, allegedly, illicitly modified and
sold for the primary purpose of satellite signal theft.
12 On February 24, 1999, the plaintiffs were charged with a series of offences contrary to the Act
and, as well, the Criminal Code of Canada. These charges included counts of offering digital access
cards for sale, hacking access cards, and participation in what was then known as the "grey market."
13 The plaintiffs allege that, at all relevant times, there were numerous decisions of various
Canadian courts that rejected the applicability of the Act to the decoding of satellite signals
emanating from the United States. They allege that, indeed, at the relevant times, there were
inconsistent judicial pronouncements throughout Canada with respect to the scope of the Act but
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that the Justices of the Peace who issued the search warrants in question were mislead with respect
to the applicability of this statute and the then current state of the jurisprudence. In other words,
they allege that the Justices of the Peace were not provided with full, frank, and fair disclosure.
14 The plaintiffs allege that they were branded as criminals to the general public without
reasonable grounds for doing so and that the charges were laid "for the improper purpose of forcing
and/or coercing the plaintiffs out of business." Malice is alleged. The plaintiffs rely on the aforesaid
conduct of the defendants and, as well, on the defendants' failure to return the seized equipment
within a reasonable time. The plaintiffs submit that, in this technological age, changes do and will
occur at a rapid pace, a pace that has and will exceed developments in applicable laws. Therefore,
they submit, the defendants were under an obligation to proceed with caution and to employ means
and tactics that were as unobtrusive as possible. They submit further that the defendants failed to
consider appropriate alternatives to the unlawful and harsh conduct that was, in fact, adopted. They
also argue that the defendants actually planned to, and did, put them, the plaintiffs, out of business
by their alleged unreasonable conduct.
15 The position of the plaintiffs is that, in determining what was the state of the jurisprudence in
November 1998 and June 1999 and, therefore, the legal issue regarding whether the Justices of the
Peace were misled by the Application/Information for the search warrants, notwithstanding that the
Supreme Court of Canada in 2002 settled the jurisprudence, must be decided in the context of the
facts as they existed at that time, i.e., in 1988 and 1999.
16 The defendants plead that the plaintiffs carried on business as retail and wholesale suppliers of
satellite dishes, equipment, and services for the interception and decoding of signals emanating
from outside Canada contrary to the provisions of the Act and the Criminal Code.
17 It is the position of the defendants that, at the time the search warrants were obtained and the
charges were laid, there was no binding decision with respect to the relevant jurisprudence from the
Ontario Court of Appeal. The position of the defendants is that the uncertainty in the jurisprudence
concerning the Act disappeared when, in December of 2002, the Supreme Court of Canada decided
that, indeed, conduct similar to that of the plaintiffs, did, indeed, constitute an offence under the
statute. (See Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559). It is the defendants'
position that, because of the decision of the Supreme Court of Canada, at all relevant times,
decoding encrypted programming signals emanating from the United States contravened the statute.
In other words, it is their position that the correct interpretation of the statute, notwithstanding
conflicting lower court decisions, was that offences were created by the statute and prosecutions
could be instituted with respect to them. They say that the activities of the plaintiffs, therefore,
constituted offences at the time of the seizures.
18 The defendants deny that, in any event, the Justices of the Peace were misled and that the
searches and seizures and the press conferences were excessive. They argue that, at all relevant
times, they acted in good faith and without malicious intent or other improper motives in the
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execution of their duties.
19 The defendants submit that this case "is about a man [Mr. Lahaie] who thought the law did not
apply to him". Counsel argue that, by 1998, the Act had been in operation for some time under
circumstances where it had not been struck down or declared invalid by any Canadian court. As
aforesaid, they argue that, because of the Supreme Court of Canada's 2002 decision, it is an
incontrovertible question of law that in 1998 and 1999 it was illegal to import and distribute
equipment designed to decode American satellite signals. They argue further that the plaintiffs
knew that there existed legislation and jurisprudence that considered their activity to be illegal but
that they, the plaintiffs, nevertheless opened and operated a business which was involved
exclusively in distributing satellite equipment for the decoding of signals.
20 They submit that, in addition, the plaintiffs sold cards that had been modified to allow
individuals to intercept and receive the signals without paying anything to the owner of the signal
and, therefore, had to know that they were involved in unlawful activity.
21 According to defence counsel, the plaintiffs seek damages for the loss of a business which the
Supreme Court of Canada has ruled was illegal. It is their position that, throughout the entire
relevant time period, it was their policy to continue their attempts to enforce the Act. They argue
that the plaintiffs were not singled out for search, seizure, and prosecution but that, rather, the
RCMP had received complaints from individuals who had purchased the hacked or modified access
cards from a business associated with and supplied by the plaintiffs.
22 The defendants also argue that the damages alleged by the plaintiffs arise from the operation
of an illegal business and, therefore, cannot be recovered by virtue of the doctrine of ex turpi causa
non oritur actio. As well, they argue that the damages were the result of contributory conduct on the
part of the plaintiffs. They submit that this principle applies even if I find that the search warrants
were improperly obtained and/or the searches and seizures and subsequent press conferences were
excessive. They argue that to find in favour of the plaintiffs would be tantamount to accepting that:
(a)
(b)
Where there are judicial pronouncements contrary to the RCMP's
enforcement of valid federal legislation, citizens may ignore the law; and
Where judicial pronouncements in one or more provinces other than in
Ontario are contrary to the RCMP's interpretation of the relevant federal
legislation, the RCMP is estopped from enforcing the statute in Ontario.
23 In their Amended Fresh Statement of Claim the plaintiffs seek damages for abuse of process
in the amount of $1,000,000; damages for breach of fiduciary duty in the amount of $1,000,000;
punitive and aggravated damages in the amount of $1,250,000; damages pursuant to s. 24(1) of the
Charter and, in particular, general damages in the amount of $1,000,000, and punitive and
aggravated damages in the amount of $1,000,000; prejudgment and postjudgment interest; and costs
on a substantial indemnity scale. However, at trial these claims were changed to a claim for
damages at large for moral compensation in the amount of $250,000 and exemplary and punitive
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damages of $1,000,000 plus interest and costs.
The Relevant Statutory Provisions
The Radiocommunication Act
24
Sections 9(1)(c) and 10(1)(b) of the Radiocommunication Act read as follows:
9(1)(c)No person shall ... decode an encrypted subscription programming
signal or encrypted network feed otherwise than under and in
accordance with an authorization from the lawful distributor of the
signal or feed.
10(1)(b)Every person who without lawful excuse, manufactures, imports,
distributes, leases, offers for sale, sells, installs, modifies, operates or
possesses any equipment or device, or any component thereof, under
circumstances that give rise to a reasonable inference that the
equipment, device or component has been used, or is or was
intended to be used, for the purposes of contravening section 9, is
guilty of an offence punishable on summary conviction and is liable,
in the case of an individual, to a fine not exceeding five thousand
dollars or to imprisonment for a term not exceeding one year, or to
both, or, in the case of a corporation, to a fine not exceeding
twenty-five thousand dollars.
The Criminal Code of Canada
POSSESSION OF DEVICE TO OBTAIN TELECOMMUNICATION OR
SERVICE / Forfeiture / Limitation.
327(1) Every one who, without lawful excuse, the proof of which lies on him,
manufactures, possesses, sells or offers for sale or distributes any instrument or
device or any component thereof, the design of which renders it primarily useful
for obtaining the use of any telecommunication facility or service, under
circumstances that give rise to a reasonable inference that the device has been
used or is or was intended to be used to obtain the use of any telecommunication
facility or service without payment of a lawful charge therefor, is guilty of an
indictable offence and liable to imprisonment for a term not exceeding two years.
(2)
Where a person is convicted of an offence under subsection (1) or paragraph
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(3)
326(1)(b), any instrument or device in relation to which the offence was
committed or the possession of which constituted the offence, on such
conviction, in addition to any punishment that is imposed, may be ordered
forfeited to Her Majesty, whereupon it may be disposed of as the Attorney
General directs.
No order for forfeiture shall be made under subsection (2) in respect of
telephone, telegraph or other communication facilities or equipment owned by a
person engaged in providing telephone, telegraph or other communication
service to the public or forming part of the telephone, telegraph or other
communication service or system of such a person by means of which an offence
under subsection (1) has been committed if such person was not a party to the
offence.
The Canadian Charter of Rights and Freedoms
SEARCH AND SEIZURE
8.
Everyone has the right to be secure against unreasonable search or seizure.
...
Enforcement
24.(1) Anyone whose rights or freedoms, as guaranteed by this Charter, have
been infringed or denied may apply to a court of competent jurisdiction to obtain
such remedy as the court considers appropriate and just in the circumstances.
(2)
Where, in proceedings under subsection (1), a court concludes that evidence was
obtained in a manner that infringed or denied any rights or freedoms guaranteed
by this Charter, the evidence shall be excluded if it is established that, having
regard to all the circumstances, the admission of it in the proceedings would
bring the administration of justice into disrepute.
The Conflicting Jurisprudence and the Conduct of the Parties in the Context of the Conflict
25 The plaintiffs, as aforesaid, submit that this is a case involving overzealous and abusive police
conduct. They argue that the RCMP and Industry Canada sought to enforce a particular
interpretation of ss. 9 and 10 of the Act despite, and in the face of, judicial pronouncements in
various courts of this country that rejected the very legal interpretation the defendants were
advancing. Indeed, the plaintiffs argue that, at the relevant times, there were no judicial
pronouncements by the Ontario courts. They also argue that by November 1998, when the first
search and seizures occurred, the number of cases favouring the interpretation that the business
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operations with which this case is concerned were not operated in contravention of the Act greatly
outnumbered the decisions that agreed with the defendants' interpretation of the Act. The decisions
favouring the plaintiffs held that the decoding and interception of the encrypted U.S. satellite
signals was not prohibited by the Act and/or that the Act was ambiguous. Since 1998 there were at
least 23 additional judicial pronouncements across Canada and, again, there was a startling lack of
consistency.
26 The line of authority that favoured the defendants held that s. 9 of the Act created an absolute
prohibition against the interception and decoding of satellite signals inside Canada unless it was
authorized by a lawful distributor. The other line, as just noted, held that s. 9 was, first of all,
ambiguous, and, in any event, did not establish the offence of interception and decoding of satellite
signals even though the receivers and smart cards being marketed allowed persons to intercept the
signals without paying any fees. Iacobucci J. in Bell ExpressVu Limited Partnership v. Rex, supra,
noted that the appeal to the Supreme Court of Canada "... involves an issue that has divided courts
in our country. It concerns the proper interpretation of s. 9(1)(c) of the Radiocommunication Act, ...
In practical terms, the issue is whether s. 9(1)(c) prohibits the decoding of all encrypted satellite
signals, with a limited exception, or whether it bars only the unauthorized decoding of signals that
emanate from licensed Canadian distributors."
27
At para. 22 of the Supreme Court of Canada decision, Iacobucci J. said:
It is no exaggeration to state that s. 9(1)(c) of the federal Radiocommunication
Act has received inconsistent application in the courts of this country. On one
hand, there is a series of cases interpreting the provision (or suggesting that it
might be interpreted) so as to create an absolute prohibition, with a limited
exception where authorization from a lawful Canadian distributor is received: ...
28
He then goes on to say at para. 23:
On the other hand, there are a number of conflicting cases that have adopted the
more restrictive interpretation favoured by the majority of the Court of Appeal
for British Columbia in the case at bar: ...
29
At para. 24 he said:
As can be seen, the schism is not explained simply by the adoption of different
approaches in different jurisdictions. Although the highest courts in British
Columbia and Ontario have now produced decisions that bind the lower courts in
those provinces to the restrictive interpretation, and although the Federal Court of
Appeal has similarly bound the Trial Division courts under it to the contrary
interpretation, the trial courts in Alberta, Manitoba, and Quebec have produced
irreconcilable decisions. Those provinces remain without an authoritative
determination on the matter. This appeal, therefore, places this Court in a
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position to harmonize the interpretive dissonance that is echoing throughout
Canada. (Underlining added)
30 It is important to note that neither of the two U.S. satellite signal suppliers were lawful
distributors in Canada - i.e., neither was licensed.
31 It is necessary for a full understanding of the facts of this case to analyze the jurisprudence as
it developed. The first known case to deal with ss. 9 and 10 was R. v. Open Sky Inc., [1994] M.J.
No. 734 (Prov. Ct.). The accused was convicted of modifying satellite decoders without
authorization from the lawful distributor of the feed. The Court held that even where there was no
lawful distributor, there was an absolute prohibition of decoding encrypted subscription
programming signals. The Manitoba Court of Queen's Bench dismissed an appeal from the
conviction. (See R. v. Open Sky Inc., [1995] M.J. No. 530 (Q.B.)). The Court held that the
provincial court judge's interpretation of the Act was correct. The accused then sought leave to
appeal to the Manitoba Court of Appeal. Leave was refused. (See R. v. Open Sky Inc., [1996] M.J.
No. 208). The Court of Appeal, however, held that the second question proposed by the accused,
whether the Act prohibited decoding encrypted signals for which there was no authorized distributor
in Canada, was academic on the facts of that case as there were authorized Canadian distributors for
the signals in question.
32 In R. v. King, [1996] N.B.R. (2d) (Supp.) No. 56 (Q.B.(T.D.)) Klebuc J. quashed a search
warrant and prohibited further proceedings with respect to the warrant in circumstances where an
RCMP constable swore an information that he had reasonable grounds to believe that the applicants
sold cards which allowed access to television signals other than through the lawful distributor.
However, the New Brunswick Court of Appeal allowed an appeal from the trial judge's decision.
(See R. v. King, (1997), 187 N.B.R. (2d) 185 (C.A.). The Court of Appeal said:
While the respondents' submission respecting the inactivity of the licensed
distributor may become an issue at trial, it cannot affect the jurisdiction of a
Judge to authorize a warrant to search if the information satisfies the Judge that
such a warrant should be issued. To hold otherwise would oblige the officer, at
the investigation stage, to anticipate and disclose to the issuing judge every
possible defence that might be raised if charges proceed and, as a result,
characterize such failure as fraud on the part of the officer.
33 However, the Court held that the RCMP could have charged the accused with selling illegal
cards without subjecting him to the punishment of an extensive seizure of materials crucial to his
livelihood. The Court held that there was a lack of proportionality and that, therefore, the search and
seizure was unreasonable.
34 The Saskatchewan Court of Queen's Bench in R. v. Ereiser, [1997] S.J. No. 276 (Q.B.)
allowed an application for the return of articles seized pursuant to a search warrant. The search was
pursuant to a warrant obtained on suspicion of theft of telecommunications. The Court reasoned that
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no offence arose under s. 327 of the Criminal Code unless the telecommunication facility or service
in question was authorized by law and the provider was lawfully entitled to a fee for use thereof
and, since the signal provider was not licensed to broadcast in Canada, no offence was made out.
The Court also ruled that, similarly, no breach of s. 10(1)(b) of the Act had taken place since there
was no lawful distributor in Canada. As well, the Court reasoned that the search warrant and the
search and seizure under it were not proportional to this situation and were, therefore, unreasonable,
excessive, and a breach of Ereiser's rights under the s. 8 of the Charter. I pause to observe that, at
this time, the courts were already expressing concerns with the extent to which the police were
seizing goods. Klebuc J., however, granted an application by Ereiser for the return of the seized
articles. He reasoned that the search warrant and the search and seizure were not proportional to the
situation and, therefore, were unreasonable and excessive thus breaching Ereiser's Charter rights s. 8. He quashed the warrants. Klebuc J. agreed with Kennedy J.'s interpretation of the law in the
Love case. At para. 20 he said:
I agreed with Kennedy J. In addition, I am of the view that for a programming
signal to qualify as a 'subscription programming signal' under ss. 9(1) and
10(1)(b) of the RCA, it must be lawfully intended for reception by the public in
Canada and the public must also be entitled to lawfully subscribe for it in
Canada. Mere production of 'pirate' or 'grey market' programming signal is
insufficient to constitute an offence under s. 10(1)(b).
35 In R. v. Mitton, [1996] N.B.R. (2d) (Supp.) No. 69 (Q.B.(T.D.)) the Queen's Bench Trial
Division quashed a search warrant with respect to charges related to selling a direct satellite
television service without payment of a lawful charge and possession of equipment for decoding
television signals without authorization from a lawful distributor. The presiding judge followed the
decision of the Queen's Bench Trial Division in R. v. King, supra - i.e. the issuance and execution of
the warrant were not proportional to the situation and thus infringed the accused's s. 8 Charter right
to be secure from unreasonable search and seizure.
36 In R. v. Hollohan, [1996] B.C.J. No. 2479, (S.C.) the British Columbia Supreme Court refused
to quash a search warrant issued pursuant to, among other statutes, the Act. The applicant was
charged with theft on the grounds that he manufactured equipment to intercept television satellite
signals owned by an American satellite television signal provider without payment to the supplier.
The Court drew a distinction between the provisions of the Act and s. 327 of the Criminal Code
that, as observed earlier in these Reasons, prohibits the manufacture, possession, selling or
distributing any instrument or device or any component thereof "the design of which renders it
primarily useful for obtaining the use of any telecommunication facility or service, under
circumstances that give rise to a reasonable inference that the device has been used or is or was
intended to be used to obtain the use of any telecommunication facility or service without payment
of a lawful charge therefor, ..." The presiding judge held that s. 327 of the Code should be
interpreted more broadly as suggested by the applicant. He said, "the code, unlike the RCA, does
not require the existence of a lawful distributor and does not require the signals intercepted to have
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originated from a lawful distributor."
37 In R. v. Knibb, (1997), 198 A.R. 161, (Prov. Ct.) the Crown claimed that s. 9(1)(c) was
enacted to prevent encrypted subscription programmed communicated signals from being decoded,
and that no signal could be decoded unless there was a lawful distributor of that signal in Canada
who had authorized such signal to be decoded. The defendants argued that where there was no
lawful distributor in Canada, interception of such a signal could not amount to an offence.
LeGrandeur, Provincial Court Judge, in an oral judgment, held that the Broadcasting Act, R.S.C.
1991, c.11 declared that the entire broadcasting system was a single system and that, accordingly,
the Radiocommunication Act was part of that system. He held that the broadcast policy set out in the
Broadcasting Act was directed at all aspects of radiocommunication signals, including encrypted
radio signals, and was the single system that determined the intended application of s. 9(1)(c) of the
Act and that any interpretation that would allow unfettered access to encrypted signals from outside
and within Canada would fly in the face of broadcast regulatory policy and would be inconsistent
with the purpose of the Broadcasting Act, when read with the Radiocommunication Act. He held,
therefore, that s. 9(1)(c) of the Act provided an absolute prohibition against the decoding of
encrypted subscription program signals unless they emanated from a lawful distributor in Canada
and that distributor authorized their decoding. He reasoned that if there was no lawful distributor,
the signal could not be decoded. LeGrandeur followed the Provincial Court decision in Open Sky,
supra. This decision was affirmed by the Alberta Court of Queen's Bench (see R. v. Quality
Electronics, (Taber) Ltd., [1998] A.J. No. 628 (Q.B.)).
38 Kennedy J., in R. v. Love, [1997] M.J. No. 109 (Q.B.) dismissed an appeal from a conviction
under ss. 9 and 10 of the Act. He too followed the reasoning in the Open Sky case. The court
observed that the essential issue before it was whether, in the absence of a lawful distributor,
modification of a decoder was unlawful. Kennedy J. held that s. 9(1)(c) of the Act was not
ambiguous despite differences between the English and French texts. He said that the pith and
substance of both prohibited the decoding of an encrypted subscription programming signal other
than by the authorization of the lawful distributor.
39 I pause here to comment on the black and grey markets. During the course of the trial I heard
considerable evidence regarding the terms "grey market" and "black market". Notwithstanding the
fact that it is the defendants' position that both markets were illegal, these terms were in general use
at the time within the industry and within the RCMP and Industry Canada. The plaintiffs offered
services in both markets. The grey market involved the plaintiffs purchasing 18-inch satellite dishes
and receivers capable of decoding and receiving the American satellite signals. Canadian purchasers
of this equipment were provided with a U.S. post office box address so that it would appear to the
signal provider that the dish owners were residents of the U.S.A. To facilitate this business, the
plaintiffs opened and operated a business in the U.S.A. to assist them and their franchisees to
receive this equipment without the U.S. companies knowing that the dishes and the subscription
programs were going to Canadian residents. As far as the U.S. signal suppliers were concerned, the
theory goes, the equipment was being sold to American citizens. I would observe at this time,
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however, that there were representatives of the U.S. signal suppliers who, apparently, were aware of
the aforesaid practices. I note, of course, that this convoluted procedure, would, undoubtedly, raise
questions of its legality in the minds of ordinary/reasonable people.
40 The black market was concerned with the sale in Canada by the plaintiffs and others of blank
access cards (smart cards) purchased by the plaintiffs from American card suppliers and that were
later electronically hacked, modified or programmed to intercept the U.S. signals without any
compensation being paid to the signal suppliers. In fact, the U.S. suppliers tried to prevent this
activity by, from time to time, sending electronic counter-measures through the airwaves in an
attempt to shut down or render useless these unauthorized cards. Where the counter-measures were
successful, Canadian card users would then be required to return to the plaintiffs or other suppliers
in order to purchase, at their expense, new hacked or modified cards. The position of the RCMP and
Industry Canada at the relevant time was that this activity amounted to the illegal decoding of
encrypted television signals.
41 The next significant development in the jurisprudence is a decision of Gibson J. of the Federal
Court Trial Division in ExpressVu Inc. v. NII Norsat International Inc., [1998] 1 F.C. 245 (T.D.)
(hereinafter "Norsat"). ExpressVu, by that time, had been licensed by the C.R.T.C. to carry on a
"direct-to-home" satellite distribution system within Canada. ExpressVu and some of its licensees
sued Norsat for damages and an injunction on the grounds that Norsat was "importing and selling
wholesale receivers (small satellite dishes) and decoders for receiving direct broadcast satellite
signals from service providers in the U.S. Norsat moved for a summary judgment striking out the
statement of claim on various grounds including an allegation that there was no valid claim under
ss. 9 and 10 of the Radiocommunication Act. Gibson J. dismissed the motion on several grounds. He
followed LeGrandeur J.'s decision in R. v. Knibb, which, as noted, interpreted s. 9 of the Act as
providing an absolute prohibition of the conduct in question.
42 On November 20, 1997, the Federal Court of Appeal dismissed an appeal from Gibson J.'s
decision. (See ExpressVu Inc. v. NII Norsat International Inc. (c.o.b. Aurora Distributing), [1997]
F.C.J. No. 1563 (C.A.)). The court agreed that Gibson J.'s decision with respect to s. 9(1)(c) of the
Radiocommunication Act was reasonable, purposive, was supported by the text of the provision, and
was responsive to the problem it meant to remedy. The court held that there was no ambiguity in the
section's meaning. This decision, as will be observed, is the first definitive Court of Appeal
decision. It will also be observed that the decision was made in the context of a civil case.
43 Next follows the decision of Haliburton J. of the Nova Scotia Supreme Court in R. v. LeBlanc,
[1997] N.S.J. No. 476 (S.C.). The applicants were in the business of selling coded cards for the
purpose of descrambling encrypted television transmissions emanating from the United States. The
police obtained search warrants pursuant to the Radiocommunication Act and s. 327(1) of the
Criminal Code. The dealer moved to quash the search warrants and sought an order returning the
seized items. Haliburton J. held that there was no offence under the Act. He also questioned the
manner in which the RCMP had conducted itself.
Page 13
44
At para. 5 he said:
I am persuaded, in fact, that if the Applicant had, indeed, been committing
offences, it could have been successfully prosecuted without any of the materials
seized as a result of executing these search warrants. That conclusion appears to
support the contention of the Applicants that a significant motivating factor in
obtaining the warrants was to cause maximum embarrassment to the Applicants
and put them out of business.
45
At para. 6 he said:
The following quotes are from Ronald W. King and King T.V. and Satellite Inc.
v. Attorney General of Canada and Cst. Louis Plourde (unreported), New
Brunswick Court of Queen's Bench, S/M/130/96, dated September 17th, 1996:
(overturned on appeal for other reasons)
Because of the breadth of the seizure under the warrant to search, Mr. King and
his company were in effect punished before they had their day in court.
Instead of getting that search warrant, the RCMP could have simply charged Mr.
King and his company with selling an allegedly illegal decoding card to Cst.
Plourde. If that charge had been laid, the legal and Charter issues could have
been dealt with by the courts before Mr. King and his company were punished by
the extensive seizure.
46 LeBlanc subsequently sought an order for costs in these proceedings. (See R. v. LeBlanc,
[1998] N.S.J. No. 528 (S.C.)). Haliburton J. held that the case was a rare and exceptional one where
police misconduct was proven. His comments were restricted to the offence under s. 327 of the
Code. At para. 7 he said:
At the time the prosecution was initiated, there were two schools of thought
disclosed in the decided cases, none of which had reached the Appeal Court
level. In view of that division of opinion, however, it must have been evident to
the authorities that the possibility of a conviction would be speculative at best.
Ultimately, the Federal Court of Appeal concluded that the possession of such
equipment did not constitute an offence under Canadian law.
47
He then concluded at para. 13 as follows:
I reluctantly conclude that the conduct of the police authorities in this case was
designed to prejudice the business interests of the Accused and to destroy their
Page 14
reputations in their respective communities and had, in fact, serious impact on
their businesses. There was no inadvertence or carelessness displayed in what
had the appearance of being a carefully planned operation intended to shut down
significant portions, if not all, of the business operations of the Accused. In
addition, there is clear evidence that the searches, which were not justified in law
and which, in fact, were unnecessary to the success of a prosecution, were carried
out in an oppressive manner.
48 The Nova Scotia Court of Appeal, however, overturned Haliburton J.'s costs award. It held
that there was no evidentiary basis for the finding of bad faith against the police.
49 I find that it was, by 1998, and even earlier, obvious to the RCMP and others that the courts of
this country were experiencing significant difficulties dealing with this legislation and that they also
had real concerns regarding the manner in which the RCMP was enforcing the law. In my opinion,
these are very important facts that require consideration in the case at bar.
50 In R. v. Quality Electronics (Taber) Ltd., supra, the Alberta Court of Queen's Bench rejected
the reasoning of Haliburton J. in Leblanc.
51 In the fall of 1999, Bell ExpressVu Limited Partnership moved for a permanent injunction to
prohibit Tedmonds & Co. Inc. and others from "directly or indirectly manufacturing, importing or
exporting to Canada, distributing, leasing, selling, offering for sale, installing, modifying, operating
or possessing equipment or devices of any kind whatsoever (or any component thereof), that is or
are designed to be used in Canada or can be modified to be used in Canada to directly or indirectly
decode encrypted subscription programming signals that are not transmitted or broadcast by a
lawful distributor, including but not limited to, encrypted subscription programming signals
broadcaster transmitted by any party in any country other than Canada." Nordheimer J. granted the
injunction. (See Bell ExpressVu Limited Partnership v. Tedmonds & Co. Inc., [1999] O.J. No. 3679
(Sup. Ct.). He held that there was a serious issue to be tried and that it appeared that the defendants
were engaged in activities in violation of the Act and, perhaps, the Criminal Code. Nordheimer J.
noted that Bell ExpressVu had conceded that there was a serious issue to be tried regarding whether
the defendants were doing something illegal.
52 In December of 1999, the British Columbia Supreme Court dealt with Bell ExpressVu Limited
Partnership v. Rex for the first time. (See Bell ExpressVu Limited Partnership v. Rex (c.o.b.
"Can-Am Satellites", [1999] B.C.J. No. 3092 (S.C.) (hereinafter "Rex"). Brenner J. refused to grant
an injunction to ExpressVu enjoining the defendants from providing services that allowed Canadian
viewers to subscribe to American direct-to-home broadcast services. ExpressVu was one of two
Canadian companies that were, by that time, authorized to broadcast direct-to-home television
programming via satellite. Brenner J. held that the application should be dismissed because the
offence created by s. 9.1(c) was the theft of encrypted signals from distributors in Canada and that if
parliament had intended to make it an offence to decode foreign transmissions originating outside
Page 15
Canada, it could have done so in clear language. He also held that nothing in this section made it an
offence for someone in Canada to subscribe to an American direct to home broadcast service.
53 Baig J. of the Ontario Court of Justice in R. v. Krazy Krazy Audio Video Experts, [2000] O.J.
No. 3942 (Ct. J.), acquitted an accused on a charge under s. 10 of the Radiocommunication Act. He
reasoned that the section did not deal with foreign origin signals.
54 It should be noted that this summary is not one hundred percent complete. I have chosen to
delete reference to a few additional authorities as they add little to an understanding of this matter.
The fact is that, until the Supreme Court of Canada finally decided the issue, conflicting decisions
continued to emanate from Canadian courts.
55 The Rex case reached the British Columbia Court of Appeal in the spring of 2000. That court
released its decision on September 7, 2000. (See Bell ExpressVu Limited Partnership v. Rex, [2000]
B.C.J. No. 1803 (C.A.)). The appeal was dismissed. The Court of Appeal reasoned that s. 9(1)(c)
prohibited only the unauthorized reception of satellite television signals that were broadcast by
lawful distributors in Canada. The Court also reasoned that since the legislation bore penal
consequences, any ambiguities should be interpreted narrowly.
56 On September 8, 2000, Sheppard J. of the Ontario Superior Court of Justice in R. v. Branton,
[2000] O.J. No. 3323 (Sup. Ct.) allowed an application by Branton to quash three search warrants
pursuant to which her equipment was seized. Branton had been charged with selling equipment that
decoded encrypted signals without authorization contrary to the Radiocommunication Act. Sheppard
J. noted that, by that time, a considerable body of case law had developed regarding whether
Branton and others carrying on similar businesses were, in law, committing an offence against the
statute and/or s. 327(1) of the Code - i.e., possession of a device to obtain telecommunication
facility or services with the intention of not paying for the service.
57
At para. 9 of his decision he said:
The section [meaning 9(1)(c)] is not entirely clear as can be seen from the
number of cases that have very recently reached the courts in Canada due, I
should think, to the recent activity of the RCMP.
58 In Branton, an RCMP constable had filed an affidavit in support of the request for a search
warrant. That affidavit copied, to a large extent, a similar affidavit filed by another officer in
another case. At para. 36 of his decision, Sheppard J. said:
Interestingly, Lane does not include the following two paragraphs from Johnson's
affidavit:
13.
I am aware of a few court decisions in western and eastern Canada where
Page 16
14.
59
the courts ruled in favour of the defendant. One such case dealt with
unreasonable search and seizure, sufficient facts were not set out to allow a
Justice of the Peace to conclude there were reasonable grounds to believe
an offence had or was being committed in Canada and from submissions
by the defence, it was alleged the RCMP were being funded by U.S.
corporations. (Regina v. LeBlanc, Nova Scotia Supreme Court).
To the best of my knowledge the existence of these offences has not been
called into question by the Ontario courts.
At para. 37 he said:
Constable Lane's affidavit leaves off at paragraph 11 citing ExpressVu v. Norsat.
In cross-examination, Constable Lane was not sure what the state of the case law
was when he prepared his affidavit, but had he even looked at the decision in
ExpressVu v. Norsat, he would have seen cited R. v. Ereiser a decision rejecting
the interpretation of s. 9(1)(c) and 10(1)(b) advocated by the authorities. No
mention was made of R. v. LeBlanc as Corporal Johnson did in his affidavit. No
mention was made of R. v. Love. Is this full, frank and fair disclosure as the case
law requires? I think not. Is reference to a decision on a motion for summary
judgment in a civil action full, frank and fair disclosure? Again, I think not. In
paragraph 9, Constable Lane cited R. v. Knibb, a decision favouring the view of
the police authorities. Yet had Constable Lane looked at R. v. Knibb, he would
have seen reference to LeBlanc.
60
He went on at para. 38 to say:
This is not to say that the police authorities are required to know every decided
case on point, but when an affiant cites 2 favourable cases and deliberately omits
a case against his interest which is contained in the precedent which he is
copying, then the logical inference is the disclosure is one-sided and designed to
persuade the reviewing Justice to see matters his way.
61 Sheppard J. issued a supplementary judgment. (See R. v. Branton, [2000] O.J. No. 3325 (Sup.
Ct.) on September 11, 2000). He had been provided with a copy of the British Columbia Court of
Appeal's decision in Rex that, as aforesaid, held that the Radiocommunication Act did not prohibit
the reception in Canada of satellite television signals that originated in another jurisdiction.
Sheppard J. agreed with the B.C. Court of Appeal's decision.
62 On October 16, 2000, Forsyth J. of the Ontario Court of Justice issued a voir dire decision in
R. v. Beacock, [2000] O.J. No. 4299 (Ct. J.). The police had obtained a search warrant on the
grounds that it suspected Beacock of selling altered access cards to enable the decoding of
American programming signals by satellite dish owners. The information filed with the justice of
the peace asserted that such decoding was theft, even though there was no Canadian distributor for
Page 17
the American programming. The information also stated that grey market satellite dishes, two of
which were affixed to Beacock's roof, were no longer legal in Canada. Forsyth J. held that the
search violated s. 8 of the Charter and, therefore, the evidence upon which the Crown wished to
rely was inadmissible. The Court held that the information which was made up largely of
unfounded and misleading conclusory inferences regarding the facts and the current state of the law
could do no more than raise a suspicion of wrongful conduct. He held that the law in Canada was
unsettled. However, at para. 49 of his decision he said:
So, therefore, in this particular case, although I find that the disclosure of
Corporal Johnson in paragraph 18 was less than what was available to him in
terms of the state of the law in favour of a position of legality of such activity as
opposed to illegality and that some cases which were in existence at the time of
his drafting in January of 1998 were not mentioned by him, nevertheless I find
that even had the Justice of the Peace been apprised of each and every existing
decision, that the function of the Justice of the Peace would still have been to act
upon, on reasonable grounds, any of the decisions which were placed in front of
her indicating that the activity was illegal, and to make any other decision would
be, of course, basically supplanting the function of the trial court by the Justice of
the Peace.
63 The Crown appealed the decision in Branton to the Ontario Court of Appeal. The appeal was
dismissed. (See R. v. Branton, [2001] O.J. No. 1445 (C.A.)). As a result, the charges against the
plaintiffs in that matter were stayed. In Branton, the Court of Appeal held that in order for a search
warrant to be issued, there must be reasonable grounds to believe that the search will afford
evidence of an offence. It held that s. 9(1)(c) of the Act was ambiguous and the weight of authority
supported the interpretation that it is not an offence in Canada to subscribe to foreign satellite
programming. Therefore, it concluded, since s. 9(1)(c) was ambiguous, an interpretation favourable
to the accused should be adopted and, accordingly, the motion judge was correct in determining that
the offence was not one known to law.
64 As aforesaid, the Supreme Court of Canada decision in Rex, supra, was released in 2002. It
confirmed that the RCMP and Industry Canada's understanding of ss. 9 and 10 of the
Radiocommunication Act was correct - i.e., s. 9(1)(c) of the Act prohibits the decoding of all
encrypted satellite signals subject to a minor exception which is not relevant at this time. The Court
ruled that the section was not ambiguous.
65
I now return to the other relevant facts in the case at bar.
The Position Assumed by the RCMP Regarding the Enforceability of Sections 9 and 10 of the
Radiocommunication Act and s. 327 of the Code
66 The evidence of RCMP Staff Sergeant (retired) Dave Franklin was that, at the relevant time,
he was the section commander in charge of the Federal Enforcement Section for the Newmarket
Page 18
Detachment in the Central Ontario region. It was his responsibility to oversee the enforcement of
federal statutes and, in particular, the Radiocommunication Act. As such, he was in receipt of, and
privy to, policy directives from RCMP national headquarters. According to him, RCMP officers
were, during 1997 and later, being encouraged by senior staff to enforce ss. 9 and 10 of the Act.
67 National headquarters was, at this time, keeping the various regions apprised of judicial
developments concerning the statute. He recalled that there was "some confusion".
68 Headquarters' position was that, notwithstanding the uncertainty of the jurisprudence, it should
be "business as usual". In other words, officers were expected to continue to enforce the Act. Staff
Sergeant Franklin's understanding of the RCMP position at that time was that "if dishes and
equipment associated with those dishes were not legally registered in Canada through ExpressVu
and Star Choice, they were considered illegal" and that if an investigation revealed any such dishes,
"we should proceed with seizure and investigation accordingly."
69 Staff Sergeant Franklin summarized his understanding in a memo (e-mail) dated April 1,
1999, to Staff Sergeant Archibald at headquarters in Ottawa. (Staff Sergeant Archibald was one of
the headquarters' officers responsible for receiving and disseminating information to the various
operational sections of the police force across Canada). The memo reads as follows:
Arch, as we have recently spoke regarding this subject, I realize this will be an
additional upload of information and will perhaps be somewhat disappointing
and/or frustrating for you, but it is exactly from that perspective that I am writing
this memo to you. As you know and as you have discussed with both Milton and
ourselves, we took part on the 30th March in a major search and seizure as part
of Milton's file 98-1240. We had two sites within our detachment area to assist
them with.
From our perspective there are too many misunderstandings and interpretations,
not to mention a complete lack of commitment on the part of the Federal
government, for us to practically, professionally and fairly enforce any laws
regarding the use of these satellites. While we have written a guideline that
announces no grey area when it comes to these 18" dishes, we have as many
perceptions of what and how to investigate these matters, as we have
investigators.
Without our section, we interpreted the 'all black market' statement for what it
said. We have therefore proceeded to seize and charge people found to be dealing
in these dishes, as the information and reports come to us. During our
investigations, we seized all of the dishes found on site, for failure to do
otherwise would be, in our opinion, only a partial application of the law and
Page 19
would do little to promote a consistent approach to enforcement. However, as
you know, there are different interpretations being applied, which once again in
my estimation, compromises the fairness with which the law is being applied.
When we enter premises with a search warrant that stipulates we are looking for
access cards, receivers and satellite dishes which are illegal in Canada, I cannot
in good conscience take only 'some' and leave others which of course will
continue to be circulated. A comparable approach with the drug enforcement role
would be disastrous, let alone indefensible within the courts. I believe the same
principles are relevant within these statutes as well and I will not ask my
members to do selective enforcement around these foggy issues.
The fog not only exists within our own force, but within Industry Canada, within
the crown prosecutors offices and D.O.J., (i.e. the Department of Justice) but
permeates the government itself. How can these dishes be of concern to the
government, when they permit their importation into the country and then expect
us and others to play 'catch up' in trying to deter their use. It is through that very
act of negligence or stupidity, that creates the 'black market' in the first place.
Most recently, while assisting in a search at the site which housed hundreds of
these dishes, three trucks filled with satellite equipment arrived and were turned
away by us. None of the equipment was seized off the trucks, as was requested
by the lead investigator on this file. Not only are we confused by this type of
interpretation, we contemplate how we could justify these types of actions before
the courts. How is it that we can seize some and not others? How is it that we can
charge an owner of a store and not the truck driver who is in possession of the
same equipment? How do we educate and train the public and the dealers, as A
Division is attempting to do through the use of letters when we don't have similar
application in our enforcement between sections, not to mention regions or
provinces?
And, if all that is not enough, we have a kaleidoscope of decisions and
interpretations across the country by various courts.
As a closing commentary of the unreliable circumstances of these incidents and
investigations, we learn while on site with an Industry Canada representative,
that the explanation being offered by the suspect and store owner in this instance
is not only feasible, it is entirely legal and probably true. That explanation was
that our so-called victims, ie. ExpressVu and StarChoice have had various
Page 20
'amnesty programs', wherein they encourage customers to bring in their illegal,
U.S. dishes and equipment and they will be replaced by the Canadian companies
at no cost for the equipment and then put these people on their billing lists. These
turned in components are then SOLD to American dealers. This Canadian store
owner, is also the proud owner of an American Company who buys these
recycled products and then of course, his Canadian company imports these at a
fraction of the costs and begins the process of re-selling them to Canadian
customers all over again. So, we not only get to have these items brought into
Canada once, we get to chase them multiple times, due to the governments' lack
of desire to get serious about these issues.
Therefore in view of the lack of commitment, direction and standard
interpretations and applications of these statues [sic, statutes] I do not feel they
are worthy of our time and resources. Furthermore, in the face of empowerment
and the endeavours to be fair, professional and ethical I have directed members
of the Federal Enforcement Section here in Newmarket to cease all investigations
relevant to the possession, distribution and/or use of satellite dishes and their
equipment forthwith. Any enquiries we receive will be referred to Industry
Canada, with a suggestion that complaints or questions be referred to people's
Members of Parliament. Then, perhaps, someone will start to formulate a
response to these issues that will be easily understood and applicable across the
board.
This is not a question of 'giving up on the law'. Rather, it is taking a stance
against a statement that invites a multiple of interpretations, making it impossible
to provide a quality of service to our clients and our communities in a fair and
equitable fashion. Therefore, it is my contention that it is inappropriate to enforce
at this time.
Arch, this is not an attack on what you've been trying to do, nor is it an attack on
anyone else's interpretations. What's wrong here is the fact there can be this many
discrepancies and these types of misunderstandings occur. If we're about to
venture into setting precedent setting law, let's attempt to ensure that it will be
founded on good judgment on our part and thorough investigations which lead to
a favourable and strong case law.
(See exhibit 1, volume 1, tab 55 - note: the underlining has been added by me).
70
Staff Sergeant Franklin's concerns were real and were appropriate. Unfortunately, RCMP
Page 21
headquarters did not give his concerns sufficient weight.
71
At trial, Staff Sergeant Franklin testified as follows:
Discussions had taken place periodically between Graham Archibald and myself
around the issues of the Radiocommunication Act. We had a section
commanders' conference in O Division, which is Ontario, where Graham had
come down to speak to us on the Radiocommunication Act as well as other
components of the Federal Enforcement Responsibilities. And certainly I was
aware of the fact that he was frustrated by some of the situations that were
occurring in terms of judgments and rulings by courts, and interpretations that
various sections were following their own sections (of the police force)
perception as to what to do and how to do it. As a result of that search on the
30th of March, and the information that I came across during that time, was the
reason for sending this e-mail to Mr. Archibald, to inform him of further
information that had not been apparent to us prior to that date.
72 Staff Sergeant Franklin was asked, when testifying, to explain what he meant by
"misunderstandings" in the second paragraph of his memo. His answer was as follows:
To the application of the Radiocommunication Act, what was grey -- what was
termed as a 'grey area' versus what was a 'black area', and what should and
should not be considered illegal.
73 He also testified that these misunderstandings existed not only within the police force but, as
well, within the public generally. He observed that some officers felt that "we should only go after
illegal cards, the pirated cards". He then said, "others, and myself included, believed that if we were
going to enforce the act and an investigation came to our forefront, to our knowledge, that
everything associated with the reception of signals should be seized. So, there was [sic, were]
different interpretations of how to proceed with the investigations and the seizures that followed."
74 The following exchange then transpired while Staff Sergeant Franklin was still giving
evidence-in-chief:
Q.
A.
All right. As "A" Division is attempting to do through the use letters, and we
don't have a similar application in our enforcement between sections, not to
mention regions or provinces. What are you referring to here with respect to
applications between sections, regions and provinces?
I'm just following through with the train of thought is, how can we expect to
educate the public at large and dealers. "A" Division was attempting to
accomplish some of that, as I recall, through issuing letters and perhaps use of
media to forewarn people that these types of dishes were not legal.
Page 22
It was one component, one approach, one interpretation that was being
made by a section commander of the Federal Enforcement Section; that his
approach was to get the information out first, and then I believe they went to a -it subsequently came to their attention that [if] somebody continued to try and
sell them, that they would be served with a cease and desist notification.
And then third step was that if in fact they persisted in continuing to sell
them, then they would be searched and items would be seized and they would be
charged. That's the best of my recollection of what the plan was.
Q.
A.
What about regions and provinces; were there any other applications or
enforcements that you were aware of in different provinces or regions in Canada?
Again, by word of mouth, mostly through discussion with other members, as well
as conversation with Graham, was that some regions, after having investigated
numerous hours and dollars, were frustrated and sort of responded with a
hands-up response, after courts ruled that they shouldn't have seized the articles
to begin with. And that was prior to that court ruling that I referred to earlier.
So there was so many different interpretations, not only of how to enforce,
but it also consisted of some people simply shying we won't enforce.
Q.
All right. Then your last sentence, 'If all that is not enough, we have a
kaleidoscope of decisions and interpretations across the country by various
courts.' I think you've referred to those before.
Could I just clarify, I take it you were not doing independent research
yourself?
A. No.
Q.
So where would the information of these decisions and interpretations from the
courts have come to your attention?
A. Policy centre in Ottawa.
...
Page 23
75 Staff Sergeant Archibald responded to Staff Sergeant Franklin's memo on May 14, 1999 (see
exhibit 2, volume 2, tab 65). This memo contains some redacted portions. These were redacted to
protect the defendants' claim of solicitor-and-client privilege. (I would observe here that the
defendants do not argue that they acted in accordance with and reliance on legal advice.) That
memo reads as follows:
Thanks for your note of April 16. ... sorry for the delay in answering.
In your note you posed several questions:
You indicate in your second and third paragraph that there are too many
misinterpretations etc. ... I agree. .... The enforcement consistency is less than
desirable. I have written a memo and it is being translated ... it will go to all
divisions and talks about no grey market, the need for national enforcement
consistency and to treat the cards and dishes the same for investigative purposes.
For what it is worth you are interpreting the law and investigations correctly as I
see it. Should we lose more cases on the 18 dishes (old grey market) I believe I
would recommend you get out of the business until the legislation is changed but
I honestly don't see that happening given the Federal Court Ruling but if it does,
we need to stop wasting our time. .... until then I encourage business as usual.
The business about letting the items in the country...you are ... correct. .... These
items are not scheduled and Rev Can Customs will not detain ... period. .... A
new ruling recently indicates RCC should treat all information the same as tax
information and subsequently the local RCC employee who may have been
providing shipping information ion [sic, on] these items now can not provide us
with anything. In short there is no border enforcement for these in place nor can
we expect information from RCC. ... The same holds true for copyright. ... A
legislative change will be necessary. ... We have met with everyone in Ottawa on
this and they know our views. ... For example I indicated the other day at a
meeting that in the absence of any border enforcement for Copyright I refuse to
apologize for our low stats in Copyright anymore. I guess in short we have to
investigate after they are in the country as best we can until the political will to
change the law occurs.
You mention not seizing the dishes and just going after the cards. ... I'm
disappointed in this action or in-action. ... Again the letter covers consistency and
I hope it works.
Page 24
You also talk about the legality of these amnesty programs and I have two legal
opinions on this. ... (redacted portion)
Amnesty is the wrong word as the companies have no authority to grant amensty
(sic, amnesty). ... but we will use it for lack of a better term for now.
Having said that I am looking into what happens with these items and I will
report back to you when I have the full information on this. A decision will have
to be made if there is any fog here and we may have to insist on them ceasing. ...
again I'll let you know what comes out of this.
I hope this answers your questions. ... I have to say that the enforcement
consistency is a problem and I spoke to Insp. Smit about this just Wednesday
when he was here.
In my opinion I think this matter is clearer than a lot of people think. We have;
1.
2.
3.
4.
A good court decision that hopefully will be followed by other courts in the near
future.
Industry Canada has finally committed to writing on their Web-page that there is
no grey market.
"A" Division project has to date apparently eliminated the overt retail sale of
dishes in this area.
Several other FES units are considering the same consumer protection approach
"A" Division used.
There is the one problem at the border that we must deal with the best we can.
Anyway I have gone on long enough. ... I get back to you on the disposal of the
equipment through Star Choice and Express Vu as soon as I can. Until then I
encourage you to continue with these investigations.
I have attached the draft memo I spoke of ... it has been at Translation for some
Page 25
weeks now and I expect it finished and mailed next week.
76 As a result of this, Staff Sergeant Archibald drafted an Information Bulletin for use by
Inspector K. Hansen, the officer in charge of the Federal Operation Section at headquarters. This
reads as follows:
It has come to our attention that the enforcement of the Radiocommunications
Act as it pertains to American Satellite receivers is being interpreted differently
from division to division and in some cases from unit to unit. Many investigators
are still treating this problem as having two areas, the black market as it relates to
pirated access cards and the grey market as it pertains to the sale of equipment
capable of decoding American satellite signals. As the policy centre for this
enforcement initiative, we feel it is appropriate to clarify the current situation.
The Federal Court ruled in July 1997, the importation, distribution, sale and
possession of equipment capable of only one end use, the reception of satellite
TV signals emanating from an American service provider, is illegal. (Express Vu
Inc. Et al. v. NII Norsat International Inc. ET al). This decision was upheld at
appeal in November 1997. In light of this decision there is no longer a distinction
between the black and grey markets and units investigating subjects for breaches
of the Act relative to the pirating of access cards should not ignore the simple
sale and/or distribution of the dishes. It is also worthy of note that Industry
Canada has recently acknowledged that the grey market no longer exists and they
have changed their Web-page to reflect this.
The RCMP is responsible for this enforcement pursuant to a Memorandum of
Understanding with Industry Canada and as such, we are expected to provide our
clients with an appropriate and consistent level of national enforcement. As a
result of several negative court decisions prior to the July 1997 decision, the
enforcement in this regard had been sporadic, lately, however, several
investigations have resulted in numerous charges being laid relevant to the sale
and distribution of American equipment as well as pirated access cards. This
enforcement activity is encouraging. However, a more consistent national
approach is needed. Divisions and units are urged to consider approaching these
investigations with the view that there is no longer a grey market distinction and
both offences should be treated equally.
"A" Division recently commenced a three step Consumer Protection Project that
incorporates media coverage to warn consumers of the pitfalls associated to
purchasing the American systems opposed to purchasing an authorized Canadian
system. The second step was to advise local dealers that the continued
Page 26
distribution of these systems will result in court action. The last step of their
program will be to monitor the distributors and take enforcement action if
necessary. While this type of approach is consistent with our Community
Policing philosophy which highlights consumer protection as the paramount
issue, it may not suit every unit or division, however, I have attached some of the
materials utilized by "A" Division for your consideration. This type of approach
is not intended to be used to warn individuals engaged in the commercial pirating
of access cards.
It is requested that this memorandum receive wide distribution throughout your
Division. Should you or your staff have any questions in this regard, please
contact me at 613-993-8445 or Sergeant Graham Archibald at 613-990-6246.
77 Staff Sergeant Franklin testified that, notwithstanding the foregoing, he continued to operate
as he had previously operated. He testified that in his lengthy career as an RCMP officer, he had not
encountered such uncertainty and confusion in any other area of law. His candour was refreshing.
78 In cross-examination, Staff Sergeant Franklin drew an analogy between a search and seizure
with respect to Radiocommunication Act charges and a cocaine search and seizure. He said that, just
as in a drug seizure where the police should seize all cocaine found during the search, all hacked
cards, satellite and illegal satellite equipment should be seized. He testified that throughout the time
he was involved with the enforcement of the Radiocommunication Act, headquarters was confident
that the law was clear and that its obligation was to enforce the law based on its interpretation - i.e.,
that the Act prohibited the sale of satellite equipment for decoding American signals.
79 Staff Sergeant Archibald (now retired) between 1996 and 2000 was employed as an analyst at
the RCMP headquarters in Ottawa in the Federal Operations Section. He confirmed that at no time
during the relevant period of time did the RCMP change its policy of enforcement of the
Radiocommunication Act. I found this testimony to be troubling given the expressed concerns of
many courts across the country.
80 Following a meeting held on October 27, 1998, (one month prior to the first search and seizure
of the plaintiffs' premises) Staff Sergeant Archibald reported to Superintendent Lang as follows:
(see exhibit 1, tab 21)
SIR
FOR YOUR INFORMATION,
AFTER CONVERSATION WITH NCO I/C OTTAWA FES A MEETING WAS
SET UP WITH INDUSTRY CANADA, OTTAWA FES, RCMP LEGAL
SERVICES, LOCAL FEDERAL CROWN, CORNWALL DET AND
Page 27
KINGSTON DET TO DISCUSS:
1.
2.
3.
4.
5.
6.
ENFORCEMENT OF AMERICAN DISHES ACCORDING TO THE LATEST
FEDERAL COURT RULING.
UPDATE ON CURRENT CASES
UPDATE ON NEGOTIATIONS WITH REVENUE CANADA CUSTOMS AS
IT PERTAINS TO SECTION 101 OF THE CUSTOMS ACT
COMMERCIAL TARGETING
COMMUNITY POLICING APPROACH TO THIS PROBLEM
COOPERATION WITH INDUSTRY CANADA
TED FRIESEN, DOJ FOR INDUSTRY CANADA UPDATED THE GROUP
ON THE FEDERAL COURT RULING AND OTHER DECISIONS AND
UPDATED THEM ON THE WINNIPEG CASE WHICH IS ONGOING.
I UPDATED THE GROUP ON THE NEGOTIATIONS WITH REV CAN.
AND THE CURRENT MOU WITH INDUSTRY CANADA. I ALSO
INDICATED THAT WHEN AND IF ENFORCEMENT WAS NECESSARY
THAT WE MUST TARGET UPWARDS AND NOT GO WITH A SINGLE
DISH CASE. ... TARGET AS HIGH AS POSSIBLE.
OTTAWA FES COMMANDER WANTS INDUSTRY CANADA AND THE
LOCAL FEDERAL CROWN TO ENDORSE A LETTER THAT WILL BE
HAND DELIVERED TO ALL KNOW [sic, KNOWN] AMERICAN DISH
RETAILERS. THIS LETTER WOULD WARN THE RETAILERS TO STOP
SELLING DISHES OR FACE CHARGES UNDER THE ACT. THIS METHOD
GIVES THE RETAILERS FAIR WARNING TO ALL CONCERNED.
CORNWALL AND KINGSTON WOULD ALSO PARTICIPATE IN THIS
ENDEAVOUR. THIS ACTION WAS SUPPORTED BY HARRIS AND
MYSELF. INDUSTRY CANADA AND THE LOCAL FEDERAL CROWN
ENDORSED THIS INITIATIVE AND WILL ASSIST IN DRAFTING THE
LETTER. OTTAWA FES WILL ALSO USE THE MEDIA TO GET THEIR
POINT ACROSS TO THE PUBLIC AND RETAILERS. CHARGES WILL
RESULT IF RETAILERS REFUSE TO COMPLY AND CONTINUE TO SELL
DISHES AFTER BEING PERSONALLY WARNED AND PROVIDED WITH
THE LETTER.
Page 28
THIS OFFICE WILL BE PROVIDED WITH THE LETTER AND THE
RESULTS OF THIS INITIATIVE WILL BE WATCHED CLOSELY AND IF
SUCCESSFUL, CAN BE OFFERED TO OUR OTHER SECTIONS AS A
MODEL PROJECT.
I SHOULD ALSO NOTE THAT I STRESSED THAT ANY
INVESTIGATIONS MUST BE CONDUCTED ACCORDING TO THE
LETTER OF THE LAW AND ALL SEARCHES AND WARRANTS MUST
BE CAREFULLY PREPARED TO ENSURE WE DO NOT LOSE CASES ON
QUASHED WARRANTS AND END UP WITH MORE BAD CASE LAW.
A COPY OF THIS MESSAGE WILL BE PUT ON THE RADIO ACT FILE
ALONG WITH A LIST OF THE 14 MEETING PARTICIPANTS.
81
Corporal Noreau attended this meeting.
82 The "letters" referred to in this memo became a reality in the spring of 1999. However, as a
result of a civil action by a group challenging the denial of the alleged right to access American
signals, Industry Canada withdrew from its agreement to partner with the RCMP in the preparation
of such a letter and media coverage thus leaving the RCMP on its own.
83 In his testimony Staff Sergeant Archibald said that neither he nor other senior officers at
headquarters subscribed to the black and grey area distinctions. In other words, their position was
that both areas should be considered as black.
84 Superintendent James Hansen (then Inspector Hansen) was from December 1, 1998 to 2002
the officer in charge of the RCMP headquarters. Federal Operations was a policy centre having
jurisdiction over approximately 200 federal statutes, including the Radiocommunication Act.
Superintendent Hansen reported to the aforementioned Superintendent Lang. His section's
responsibility was to, among other things, set operational policy for the federal statute to be used for
guidance to the regional detachments throughout the country. It, the section, was concerned with
developing policy as to how investigations should be conducted and, as well, it developed "Memos
of Understanding" with other government departments with respect to enforcement, among other
things.
85 After his appointment, he quickly became aware of the conflicting jurisprudence concerning
the Act. He concluded, however, that the Federal Court of Appeal decision in Norsat "clarified that
American satellite equipment was illegal under the Act." He testified that from 1998 to 2001
"following the Norsat decision, it was that we were to enforce the Act as per the MOU
(Memorandum of Understanding)" subject to, because of resources and workloads, priority
decisions being made by local detachment commanders. In other words, his evidence was that local
Page 29
detachment commanders had discretion to set their own priorities with respect to what
investigations should be conducted and how they should conduct them. The views of local
prosecutors, he said, also had to be considered. He further stated that "each case would be looked at
on its own merits."
86 Superintendent Hansen explained that, pursuant to the aforesaid Memorandum of
Understanding with Industry Canada, the RCMP had an obligation to it to investigate and prosecute
offences under the Act. In practice, however, the RCMP's policy was not to target individual users
of "illegal" satellite equipment. Pursuant to the terms of the MOU, the target was "commercial
ventures."
87 Superintendent Hansen, in his testimony, stressed that decisions on whether to investigate and
prosecute were made "locally". He testified that following the Norsat decision, in the Ottawa area
and some other areas, "letters were directed at businesses to advise them that the Norsat decision in
late 1997 had basically made the sale of American satellite equipment illegal." He added that "it
was not aimed at those selling what I would call black market equipment, in other words equipment
that was capable of stealing a signal, but only those that were selling American equipment and using
fictitious American addresses." He explained what he meant by equipment as follows: "equipment
that had been modified so that access cards would access channels that the consumer was not
paying for and were being sold by satellite dealers."
88 According to Superintendent Hansen, there was no headquarters' policy applicable to press
releases concerning Radiocommunication Act offences.
89 In cross-examination he explained that headquarters' policy did not dictate how an individual
officer or officers should proceed to enforce the statute. In other words, the manner of enforcement
was left up to the officers in the field, i.e., headquarters' policy was to enforce the Act but how
officers were to go about enforcing it was up to them. I had, and have, some difficulty with this
testimony given that headquarters' position was, as aforesaid, business as usual. This situation was
not "usual."
90 Superintendent Hansen identified a July 8, 1997 memo from Superintendent Lang, addressed
to commanding officers across Canada entitled "ENFORCEMENT OF
RADIO-COMMUNICATION ACT OFFENCES." (See exhibit 1, tab 7). That memo reads as
follows:
In recent months there has been some confusion as to the state of the law
concerning the enforceability of sections 9 and 10 of the Radiocommunication
Act dealing with illegal decoding of encrypted television signals. This is the so
called "black market" interception of American Direct To Home (DTH)
television satellite signals.
Page 30
In 1996 and 1997 courts in "D", "E", "F", "H", "J" and "K" Divisions have sent
conflicting signals as to whether or not a prosecution could succeed, especially in
view of the fact that there has not been (until very recently) an operating "lawful
distributor" in Canada. Little consensus seemed to exist, even amongst judges.
We have discussed these concerns with Industry Canada, which is the department
responsible for administering the legislation and who share our frustration.
At present we are awaiting appeal court decisions in at least "F" and "K"
Divisions, which Industry Canada anticipates will be favourable for prosecutions
of section 9 and 10 offences even in the absence of a Canadian "lawful
distributor". At the same time, Industry Canada advised that in June 1997, in a
civil case brought by licensed Canadian Direct To Home (DTH) distributors
who are currently establishing services, the Federal Court Trial Division declared
that importing and selling American DTH satellite dishes dedicated to
unauthorized decoding of American programming services contravenes the
Radiocommunication Act. Industry Canada expects that this Federal Court
decision will be influential in future proceedings.
For now, it is business as usual for investigations under the Radiocommunication
Act. The Alberta case R. v. Quality Electronics and Knibb (a favourable
decision, now under appeal) is perhaps the clearest description of the law to date.
In light of the Federal Court ruling there is also an avenue open to investigators
to proactively educate and warn the public and local electronics distributors of
potentially illegal conduct, separate from actual investigation.
It should be noted that none of the decisions deal with what has been called "grey
marketing", namely the use of American accommodation addresses to subscribe
to and receive encrypted signals.
Industry Canada and Canadian DTH Industry representatives can also be called
upon to support our efforts with information, although these of course must be
used with discretion and independence. Names can be supplied upon request.
I ask that you disseminate this information as widely as possible amongst Federal
Enforcement Sections and others who may find themselves dealing with
Radiocommunication Act matters.
91
Superintendent Hansen identified a further memo from Superintendent Lang addressed to
Page 31
commanding officers dated December 17, 1997 with the same title. That memo reads as follows:
This is further to an earlier memorandum of 97-07-08 on this subject.
I had hoped there would be some more certainty in the law by now, but there
continues to be diverse interpretations of the provisions concerning illegal
decoding of encrypted television signals (sections 9 and 10 of the
Radicommunication Act). (underlining mine)
Two November court decisions have led in opposite directions. In the first,
known as Express Vu, the Federal Court of Appeal, in a civil matter, upheld an
understanding that the Radiocommunication Act effectively requires that in every
case of decoding there be a prior authorization to decode, which can only be
obtained from a lawful distributor in Canada. Where no lawful distributor exists,
no authorization can ever be given, and an offence would be committed in every
case. This would simplify enforcement significantly, and may eliminate the grey
and black market distinctions.
In the second case, known as Leblanc, the Nova Scotia Supreme Court, dealing
with an application to quash search warrants, found that section 327 of the
Criminal Code and section 9 of the Radiocommunication Act require the
existence of a "lawful charge" and "lawful distributor" respectively. Absent
these, no offence can be said to exist. Such a finding complicates enforcement
significantly, and also disregards the grey and black market distinctions.
Although not part of the reason for decision, the Court was also critical of the
scope of the search involved, finding it punitive in nature. A decision on a Crown
appeal is expected shortly.
An appeal of the successful prosecution in the Knibb case, from Alberta, is
expected in the spring of 1998. This case previewed the reasoning followed in
Express Vu.
A final factor, not present in Leblanc, but at the heart of Express Vu, is the
existence since the spring of 1997, of two Canadian distributors of DTH
television - Express Vu and Star Choice, which seems to meet at least the
concern in earlier cases that no lawful distributor existed in Canada whose
interests deserved court protection.
Page 32
Industry Canada, the responsible government department, has indicated their
desire for ensuring a fair marketplace, meaning in this context that we not relax
enforcement of this Act, especially as now Canadian service providers have
entered the arena. They also are concerned that future prosecutions take place in
a manner that enhances our Canadian relationships, rather that [sic, than]
allowing ourselves to be painted as pawns of the American DTH suppliers, as
was the case rightly or wrongly in Leblanc. Industry Canada is confident that the
law as stated in Knibb and Express Vu will prevail, and they have established
close working relationships with selected Crown Counsel to help bring this
about. Investigators should be encouraged to communicate early and often with
Industry Canada officials whenever concerns arise.
The services of Canadian industry representatives can be called upon to assist in
investigations or prosecutions, as can, for technical matters, our own High
Technology Crime Forensics Section in Ottawa. Some Divisions have already
received informal training and technical assistance from Star Choice, for
instance.
I ask that you disseminate this information as widely as possible amongst Federal
Enforcement Sections and others who may find themselves dealing with
Radiocommunication Act matters.
92 It is noteworthy that, in his testimony at trial Superintendent Hansen, despite the views of
lawyers and judges with respect to the enforcement of the said Act, took the position that the statute
was "quite clear". This attitude or perspective was held by, it seems, many RCMP officers and, I
infer, by Industry Canada officials. Indeed, in cross-examination, Superintendent Hansen was asked
how he could say that the law was clear in 1998 in the face of the memo of Superintendent Lang of
December 17, 1998 aforesaid. His evidence was as follows:
Q.
I'm trying to understand why your evidence is that the law was clear in '98, when
your supervisor sends out a memorandum to all commanding officers across the
country, saying that 'I'd hope there would be more certainty in the law, but there
continues to be diverse interpretations in the provisions concerning illegal
decoding.'
That seems to be inconsistent with your statement that the law was clear in
your mind?
A.
The law has been clear in my mind since the start. There have been different
Page 33
interpretations from the court, even after '97, even after '98, until the decision in
2002. There is [sic, are] interpretations in the Court of Appeal in British
Columbia, then Ontario and so on, that interpreted the Act differently. But that
didn't change our policy, other than the fact that when we went out, continue to
enforce the Act, but discuss it with the Crown prosecutor first to ensure that
you've got a case.
Q. All right.
A.
Q.
So the policy hasn't changed at all, I guess, if that's the question you were asking.
(underlining mine)
All right. So the policy itself doesn't change, you continue to enforce the Act.
And when you say you were clear on your interpretation, the RCMP's
interpretation from headquarters, you were clear on your interpretation?
A. That's right.
Q.
A.
And the fact that these courts were or were not agreeing with you was not
changing your interpretation; your interpretation stayed the same throughout?
Yes, I would have to say that that's correct. By the courts not agreeing, that
would affect the application of the policy in those particular provinces.
But my personal view is that the Act was clear right since day one, and that's
what the Supreme Court of Canada decided April 26th.
93 It is important to note that Superintendent Hansen's evidence was that headquarters did not
send out memos or briefing notes to RCMP officers across the country with respect to all ongoing
judicial developments with respect to the Act. In particular, he did not highlight those parts of the
December 1999 and May 2000 decisions in the trial court and Court of Appeal of British Columbia
in Bell ExpressVu v. Rex, supra that, as aforesaid, held that s. 9(1)(c) did not include theft by
Canadians from signal distributors outside Canada. Similarly, no briefing note or memo was sent to
officers concerning the September 2000 decision of the Ontario Superior Court in Branton. Officers
were not briefed on the Quebec Superior Court decisions in The Queen v. Theriault, [2000] J.Q. No.
3094 (C.Q.) which followed the British Columbia Court of Appeal in Rex.
94 There is, in my opinion, merit in plaintiffs' counsel (Mr. Obagi's) argument that RCMP
headquarters' agenda was to enforce its interpretation by choosing to almost ignore any judicial
opinion contrary to its interpretation of the Act, notwithstanding that, in hindsight, the RCMP
Page 34
opinion was correct. Superintendent Hansen testified that the RCMP felt that, eventually, the
Supreme Court of Canada would overturn the decisions that were contrary to the Federal Court of
Appeal decision in Norsat.
95 In fact, as Superintendent Hansen put it in his evidence, headquarters was "pushing" the
Federal Court of Appeal decision. (See, for example, exhibit 1, tab 8, the headquarters' memo of
December 17, 1997).
96 The inconsistencies in the enforcement of the Act across Canada are summarized in a May 19,
1999 memo from Superintendent Hansen addressed to "ALL CRIMINAL OPERATIONS
OFFICERS." This memo was drafted by Staff Sergeant Archibald. Staff Sergeant Archibald
testified that he prepared this later memo as a result of the longstanding confusion concerning the
"national position." There are some comments in these memos that illustrate the RCMP's reluctance
to accept the fact that, indeed, there were, even at that time, serious issues with respect to the
enforceability of the Act. For instance, in the seventh line of the November 9th memo, the following
is stated: "THE LAW IS CLEAR", meaning the legislation. The memo then goes on to say, "In July
1997 the Federal Court ruled the sale, use and distribution of this equipment was illegal. This
decision was upheld by the Federal Court of Appeal in November of 1997. RCMP investigators are
simply following these decisions." Superintendent Hansen approved of Staff Sergeant Archibald's
draft with a handwritten note as follows: "Graham looks good!" Later in the memo the following
appears: "There is no grey market ... only a black market. The 1997 Court rulings have made that
clear. The equipment is simply illegal." The following also appears later in the memo: "I think that a
charter challenge in the court is inevitable at some point but the RCMP is mandated to enforce
existing Canadian laws and statutes and as stated the law is crystal clear."
97 Staff Sergeant Archibald's testimony confirms that of Superintendent Hansen - i.e., that
headquarters considered the decisions of the Courts that held that there was no offence under the
Act as "unfavourable" or "poor" decisions or results because they were contrary to the views held at
headquarters. The following exchange took place during the cross-examination of Staff Sergeant
Archibald:
Q.
What is a right decision and wrong decision? Are you suggesting that the courts
under the RCA that did not agree with the RCMP's interpretation were wrong
decisions, and the ones that did agree were right decisions?
A. The short answer is yes.
Q.
All right. So the RCMP then did have, if you will, an interest in ensuring that
their interpretation of section 9 prevailed?
A. In that context, yes.
Page 35
98
In re-examination, Staff Sergeant Archibald elaborated as follows:
Q. What was not clear to you, and what was clear to you?
A.
Q.
In my opinion -- and I hesitate to say that it was muddy, when you mix the two
together, I don't know what choices I had. But the law itself always seemed to be
clear to me. But I refer to the law being only that of the section, of the sections of
the Act, and that's the point I tried to make. The case law does not have to be
followed. So I kind of had to struggle with putting them together as one
definition.
So if we can define the law as only the statute, being the Radiocommunication
Act, would your answer change, or how would your answer change?
A. I believe I'm on record saying I thought it was clear.
99
Again, in cross-examination, the following exchange took place:
Q.
A.
Is it fair to say then that from the policy perspective of the RCMP until the
Supreme Court of Canada said otherwise, the RCMP would simply continue to
enforce the Act, regardless of the decisions from the various provinces?
I think that our position remained unchanged, undaunted and I guess your
explanation would be fairly correct, that we continued with our enforcement
policy even after we had some unfavourable decisions, yes.
100 In cross-examination, Staff Sergeant Archibald agreed that by December 1997, there were
three Superior Court decisions contrary to the RCMP's views but that the RCMP, nevertheless, save
perhaps for some guidance regarding the avoidance of abuse of searches, continued its policy of
enforcement without alteration. In other words, "business as usual." He testified that, from a police
officer's perspective, the Act was clear notwithstanding that he understood that by late 1998, "we'd
actually taken a step backward." He also stated that notwithstanding Justice Haliburton's strong
comments regarding the search and seizure in the Leblanc Nova Scotia case, the RCMP should,
when executing a search and seizure, take possession of all "illegal units."
101 I will comment on Corporal Noreau's understanding of the jurisprudence later in these
reasons under the heading "The Search Warrant".
The Nature of the Plaintiffs' Business - Its Operations and Locations and the Plaintiffs' Beliefs
Concerning the Legality of the Businesses
102 The business premises of the plaintiffs situated at the Rochester Street site in Ottawa and of
the franchise operations in Manotick, Oshawa, Kingston, Newbridge, and Newmarket were all
situated in prominent locations. There was no attempt whatsoever to hide them in isolated locations.
Page 36
With the exception of the Rochester Street location, that basically consisted of an office and a
warehouse, these business premises had either separate signs or signs on their windows advertising
that they were in the business of selling satellite signals. Customers had the option, when
purchasing a receiver and dish, to purchase either an access card sold with these systems or they
could purchase a blank access card and have it programmed, hacked, or modified, to access the U.S.
signals.
103 Mr. Lahaie first became involved in the satellite business in 1992 or 1993. Distributors of
satellite systems were, at that time, operating in the open. He was aware that no U.S. signal provider
was licenced to market its signal in Canada and that, therefore, it was necessary for businesses like
his to establish a business address in the U.S. in order to purchase these satellite systems from
various U.S. systems manufacturers. The products were prominently displayed in store windows
and on store floors. Indeed, at the Oshawa location, the sign was "huge". In addition, the businesses
were actively advertising their products because the demand was "large" from the outset.
104 By 1997, as noted earlier, Bell ExpressVu and StarChoice had entered the satellite signal
market in Canada but in a very small way. Mr. Lahaie signed dealer agreements with these
Canadian operations. However, more than 97 percent of the plaintiffs' business in 1997 and 1998
related to the systems and cards used to access the U.S. signals.
105 The plaintiffs, by 1998, had established a business location in Myrtle Beach, South Carolina
with the intent of purchasing satellite equipment directly from the systems manufacturers thus
cutting out the wholesaler middleman mark-ups. It appears that representatives of these
manufactures were aware that the plaintiffs were then selling the equipment to Canadians
notwithstanding that equipment manufacturers' corporate policy was not to sell equipment to
Canadian dealers or Canadian residents. The plaintiffs' customers were told to avoid any direct
dealings with U.S. equipment manufacturers or signal suppliers.
106 Digital and its franchisees operated their respective businesses according to proper business
and accounting practices. The franchisees operated under written agreements with the plaintiffs and
were responsible for running their respective operations subject to inspection by Digital from time
to time. The franchisees were required to purchase their inventory from Digital. Digital received
monthly royalty payments from the franchisees on their sales.
107 At the Rochester Street premises in Ottawa, the ground floor was habited, by way of lease
from Mr. Dinardo, the property owner, by Mr. Lahaie and his family. Mr. Lahaie's daughter's room,
however, was situated on the second floor. The third floor was occupied by a residential tenant or
tenants under a lease with Mr. Dinardo. The second floor, apart from the room occupied by Mr.
Lahaie's daughter, housed Digital's office and the remaining space on this floor served as a
warehouse. The basement of the building was also used for some storage; however, this was
limited.
108
Mr. Dinardo testified at trial concerning his involvement in the business. I accept as credible
Page 37
his testimony that he was not aware, at the beginning, of any serious legal issues concerning the
legitimacy of the business operations. He did not, initially, seek a legal opinion concerning the
legality of the operations. He assumed that, because no objections were brought to his attention
concerning the legality of the business; because it was paying its taxes including G.S.T. and P.S.T.
and making the employee remittances; and since it was being charged customs duties for bringing
the equipment across the border, everything was lawful. Imports were handled through a customs
broker situated in Prescott, Ontario. However, by the spring of 1998, as a result of a visit to the
Kingston location by RCMP officers, he was aware that RCMP officers were "going around
warning our stores that it was illegal to import U.S. satellites." The visit occurred on May 20, 1998.
The visit was part of an RCMP plan to make local distributors of satellite dishes aware of the
provisions of the Radiocommunication Act and the RCMP and Industry Canada's responsibility to
enforce the Act. Ms. McGee, the new Kingston franchisee at the time, was told that if she did not
comply with the Act she might be subject to "goods being seized and charges being laid."
109 Mr. Dinardo's evidence was that he left these developments to be attended to by Mr. Lahaie
which Mr. Lahaie, in fact, did. Mr. Dinardo did, however, go online at which time he discovered
that there were court decisions concerning the legality of the business being conducted by it and
others. He testified that "and if I'm not mistaken, at that time, the government was down four cases
to one against it" and "so in court the government was losing these cases continually over the
importation and the use of the American satellite systems and based on that figure I felt quite
comfortable that we were not doing anything illegal."
110 Prior to the November 1998 search and seizure at the Rochester Street location, no police
officers, to Mr. Dinardo's knowledge, had contacted either he or Mr. Lahaie about Digital's
operations in Ottawa or in any other franchise areas.
111 At all relevant times Digital had a solicitor under retainer and one of his responsibilities was
to prepare franchise agreements and other legal documentation as required.
112 Mr. Dinardo added that because of the four to one ratio in the jurisprudence "that still made
my American system quite legal in my eyes." He was also aware that the satellite systems
association to which they belonged was seeking amendments to the Radiocommunication Act. He
cannot recall whether he had, in fact, actually read any of the court decisions.
113 Mr. Dinardo explained that Digital arranged for the maintenance of mail boxes in the U.S.
because Canadians could not directly purchase the American service from the U.S. signal supplier.
He agreed that he and Digital were in the business of selling a grey market product - i.e., a product
that included "receiving satellite signals from the U.S., modified or unmodified systems." He
included the hacking of cards as part of the grey market. He said, "a U.S. manufacturer who
happens to have their signals spilling over the Canadian border, which I am picking up, not
infringing on any legal, or Canadian business people or subscribers, as far as I'm concerned, is grey
market."
Page 38
114 Later, in cross-examination, he agreed that his legal counsel, following the laying of charges,
had entered into an agreement of facts with the Crown in which the hacking of cards was included
under the words "black market." I draw no negative inferences regarding Mr. Dinardo's credibility
from this contradiction.
115 Digital's work order forms delivered to customers at the time of purchase contained a
paragraph stating that "I am aware that DSS System is a grey market product and if any problem
should arise, I will contact Digital only." He agreed that Digital did not want its customers to
directly contact the U.S. supplier. The document also provided that if this commitment was
breached, the customers' programming could be permanently cancelled.
116 Mr. Dinardo explained that, following the November 1998 search and seizure, Digital
attempted to carry on its business through its franchisees and in the United States and that,
eventually, this came to the attention of the RCMP who laid further charges in the summer of 1999.
117 Prior to the criminal charges being stayed as a result of the decision in Branton, counsel for
the accused and for the Crown, as aforesaid, entered into an agreed statement of facts that, among
other things, included the following description of the business: "a business engaged in importation
of wholesale communications equipment specifically equipment and components designed for the
reception and decoding of direct-to-home satellite television broadcasts" and that they "possessed
sophisticated computer software applications to reprogram or hack the access cards ... to receive and
decode the U.S. broadcasting signals." In fact, these computer software applications were easily
downloaded off the Internet although further apparatus was necessary to complete the hacking
process.
118 Mr. Lahaie was aware that the law with respect to the legality of the business was in a "state
of flux" and that the business might be legal and, on the other hand, might be illegal. Indeed, prior
to commencing operations, Mr. Lahaie sought legal advice from his business lawyer. The lawyer
confirmed that the law was not clear and that, therefore, there was a risk in opening such a business.
119 Mr. Lahaie became aware that someone from Industry Canada or the RCMP had visited the
Kingston store to advise that, in their view of the law, the operation might be illegal and that their
advice was that the operator of the franchise should probably stop selling these products. The
message from this person or persons, according to Mr. Lahaie, was one that was not a clear order or
threat that he should discontinue the business.
120 Mr. Lahaie had also heard talk within his association of the issue of legality and learned that
the association had hired legal counsel to represent the interests of its members because charges
were being laid against some of the businesses.
121 On October 22, 1998, the law firm of Borden & Elliot wrote to Digital with respect to the
"grey market". The letter reads as follows: (see exhibit 1, tab 18)
Page 39
We are solicitors acting in Canada for U.S. Satellite Broadcasting ("USSB"), a
U.S. corporation headquartered in St. Paul, Minnesota.
In November of 1996 the Canadian government advised dealers and consumers
that:
'American DTH service providers do not have the lawful right in Canada to
authorize the decoding of their programming.
Retailers who distribute "grey market programming are aiding and abetting
consumers to decode DTH signals that are not authorized for distribution
in Canada and thereby putting themselves at legal risk.
Dealers should know that it is illegal to import, manufacture or sell
equipment used to decode signals provided by someone other than the
lawful distributor.'
(Consumer Alert, Industry Canada, Direct-to-Home Satellite
TV-Facts You Should Know,
13 November, 1996).
One year later, the government's position on the "grey market" was upheld by the
Federal Court of Appeal216 confirming a Trial Court decision which found that
the Radiocommunication Act ... 'provides an absolute prohibition against the
decoding of encrypted subscription program signals unless they emanate from a
lawful distributor in Canada and that distributor authorizes their decoding.'
You may be wondering why USSB would be concerned with Canadian law and
the actions of Canadian dealers and consumers concerning grey market activity.
To explain, satellite programming service providers such as Showtime and HBO
hold, directly or by license, copyright in their programs. These rights to use
programs can be licensed in different ways and for different territories, for
example U.S. rights for television, Canadian rights for pay-TV, world rights for
merchandise related to the characters in the programs.
Page 40
USSB offers a package of direct-to-home programming services delivered via
satellite to subscribers using digital satellite equipment in the United States.
USSB's contracts with its program suppliers only grant USSB the right to
distribute its service via direct broadcast satellite in the United States.
For their part, Canadian companies may have paid to obtain the rights to these
same programs to distribute them in various ways in Canada.
This letter is being sent to you and other Canadian dealers and retailers of
satellite receiving equipment and programming because as the holiday season
approaches, USSB is concerned that some Canadian dealers may be selling
digital satellite equipment to subscribers and assisting them to receive USSB
service, or otherwise advertising that USSB service is available and can be
lawfully received in Canada. Any such offer made by a dealer is not authorized
by USSB.
In addition, individuals involved in these efforts are purposely misleading
Canadian residents by indicating that they can receive USSB programming in
Canada. Not only is this untrue, but it encourages these Canadian residents to
purchase digital satellite units which may be of no use to them.
216 NII Norsat Intrnational Inc. et al. v. Expressvu Inc. et al., Docket:
A-527-97, November 20, 1997 (F.C.A.)
This has been clearly noted by the Canadian government in the same Consumer
Alert:
'The equipment used to illegally decode U.S. signals is expensive - yet it comes
with no guarantee that it can do the job, or can continue to do the job, for which
it was purchased.'
USSB takes its contractual obligations with its program providers very seriously.
If your company has been assisting in the sale of USSB service to subscribers in
Canada or using the USSB name, trademark or logos in any form, you are hereby
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required to cease such activity immediately.
Where USSB establishes and confirms that a Canadian subscriber is receiving its
service at a Canadian address, USSB will terminate the service. [Footnote
omitted]
122 Mr. Lahaie testified that even though this letter was found in the office on Rochester Street at
the time of the November 1998 seizure, he had not seen or read the letter. In other words, his
evidence was that when the letter was found during the search he then read it for the first time. In
my opinion, given the authorship of this letter, it does not matter when it was read.
123 The day after the November 1998 search, Mr. Lahaie met with Mark Ertel, a criminal
defence lawyer who had been referred to him. As a result of his conversation with Mr. Ertel, Mr.
Lahaie concluded that Mr. Ertel's advice was that his business was legal in the sense that,
eventually, courts would agree with Mr. Ertel's interpretation of the law. Mr. Ertel agreed when he
testified that there was some risk and that the ultimate interpretation might be that the business was
illegal. Messrs Ertel and Lahaie discussed plans about the possibility of launching a motion to quash
the writs and to secure the return of the seized goods. I will have more to say about Mr. Ertel's
testimony later in these reasons.
The Search Warrants
124 Corporal, then Constable, Noreau, on May 30, 1997, was assigned to "A" Division in Ottawa
to work as an investigator in the enforcement of federal legislation. In late September of 1998, he
became involved in matters concerning the Radiocommunication Act and, in part, was delegated to
supervise investigations concerning the interception of satellite signals. In October, he commenced
a review of the existing RCMP files and, in particular, he reviewed information on file regarding the
jurisprudence concerning the Act.
125 At trial, Corporal Noreau insisted that he had not actually read the legal decisions as such.
His evidence at trial regarding what he knew about the jurisprudence was not consistent with the
evidence he had given on his examination-for-discovery.
126 At trial, a considerable amount of time was spent on this issue because it was relevant to
Corporal Noreau's state of mind when he applied for the November 1998 and the 1999 search
warrants. In my opinion, Corporal Noreau's evidence, as to just what he did or did not read prior to
applying for the search warrant, is unsatisfactory. However, regardless of whether he actually read
the jurisprudence itself, or comments with respect to it, I find that he did, at the time he applied for
the search warrants, possess a detailed knowledge of the subtleties of the competing jurisprudence
and, in particular, the distinction between the black and grey markets and the manner in which the
legislation impacted those markets.
Page 42
127 He testified at trial that during his preliminary review of the RCMP files in early October, he
came across copies of the statement of claim and statement of defence in CFACT Inc. v. AG of
Canada, a civil action. His evidence was that he used these pleadings, as well as other information
available to him, in order to draft a "template" for future reference and use.
128 It was clearly demonstrated in cross-examination that when Corporal Noreau prepared this
template he omitted reference to those parts of the aforesaid statement of claim with which the
police disagreed. What is stated in the template, and, therefore, in his later affidavit attached to his
application for a search warrant, falls far short of full disclosure. Constable Noreau's evidence was
that he prepared the template from these documents intending to treat them as an agreed statement
of facts. Mr. Obagi spent considerable time cross-examining Corporal Noreau to demonstrate that
the template clearly is not a statement of what was agreed upon at that time between the Crown and
police on the one hand and those who argued that ss. 9 and 10 of the Radiocommunication Act did
not apply to what was transpiring with respect to both the black and grey markets on the other hand.
The template, quite clearly, was misleading insofar as the state of the law was concerned.
129
The following exchange took place late in Corporal Noreau's cross-examination:
Q.
But this doesn't flow because you included (i.e., in his sworn Information or
affidavit used in the application for the search warrant) the word "clearly" and
you specifically put it in, because it's not the words that are contained in the
statement of defence. You specifically put it in on October 6, 1998. And my
suggestion to you is you did that because that would be more persuasive to a
justice of the peace, to convince her or him to issue a search warrant?
A. What would you like me to say to that?
Q. I'm correct, am I not?
A. That was the way I wrote it at the time.
Q.
A.
Q.
But you wrote it to persuade the justice of the peace to issue the search warrant?
It's the word that was put again in October. I say clearly again back to the
legislation how clear reading the law was to me. That's why I put it in, it clearly
provides. It's possible a deviation from the French language when I put that word
in, I can't answer that for you.
All I'm asking you is that the reason you decided to throw in the word "clearly" is
to be able to persuade the justice of the peace to issue the search warrant?
A. It makes it more persuasive.
Q. Persuasive?
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A. Yes, it does.
Q.
Right. I could have used that word, and that's why you included it?
A. Yes.
Q.
And I suggest to you, sir, the reason you included paragraph 18, which is the
description of the offence, is once again the persuading the justice of the peace to
issue the search warrant?
A. Yes.
Q.
All right. And in attempting to persuade the justice of the peace to issue the
search warrant, you intentionally omitted or intentionally decided not to include
the argument that was contained in the statement of claim of CFACT?
A. I guess so. I did not put it in.
130
In my opinion, these answers are significant.
131 I find that, regardless of just how deeply Corporal Noreau inquired into the jurisprudence,
there was absolutely no reasonable basis for his statement in his affidavit, or information, in support
of the search warrants where he said that s. 9(1)(c) "clearly provides an absolute prohibition against
the decoding of encrypted subscription satellite signals where they emanate from a lawful
distributor in Canada and that distributor authorizes their decoding." (See exhibit 1, tab 22).
132 Corporal Noreau also testified that by early October 1998, as a result of his search of the
RCMP files, he was aware that a couple of complaints had been received against Digital in one of
its business locations outside Ottawa. These complaints, among other things, arose out of the need
to continue to reprogram access cards and the expenses associated with doing so.
133 On October 6, 1998, Corporal Noreau sent a memo to a Mr. Papineau at Industry Canada
enclosing a copy of the template. The memo is entitled "Radiocommunication Act Satellite
Distribution Undertakings - Canada Market." In the memo he says:
You will find enclosed part of a draft version of an Appendix "C" Search
Warrant I prepared with the information package provided to us earlier. With
regards to our conversation this morning, I found a quote written by Judge
LeGrandeur and referred to by Judge Frederick E. Gibson, Federal Court of
Canada T1639-96. In that, Judge LeGrandeur wrote:
Page 44
'Defence counsel urges the court to interpret this section such that unless
there is a lawful distributor, (i.e., a person who has the lawful right to
transmit an encrypted radio communication and authorize its decoding in
Canada), it cannot be an offence to decode an encrypted subscription
signal.
The Crown, on the other hand, argues that the section should be interpreted
such that no encrypted radio communication may be decoded by any
person in Canada unless there is a lawful distributor of that signal in
Canada.
Application of the Defence interpretation would mean that as long as there
was no lawful distributor in Canada for the signal intercepted (decoded)
there could be no offence and therefore any Canadian may intercept
(decode) any encrypted subscription signal.'
I understand the question of the grey market has not been declared with your
legal department. I will therefore hold on to any ongoing investigation until we
meet to further discuss the matter. Please contact the underwriter directly as I am
now assigned all "A" Division files in relation to the Radiocommunication Act.
Keep in touch.
134 In cross-examination, Corporal Noreau admitted that included in the "hold" on investigations
were the operations of the plaintiffs. When asked in cross-examination for an explanation of his
memo, Corporal Noreau contradicted his evidence-on-discovery. In any event, Corporal Noreau did
admit in cross-examination that his letter of October 6, 1998, contains a summary of the two
competing legal arguments and admitted that he understood those arguments at the time. In
particular, he agreed that he understood that the defence argument meant that even the hacking or
modifying of cards to intercept the U.S. satellite signal could be legal under the Act.
135 Following the preparation of the template, Corporal Noreau decided to wait for feedback
from his supervisors before seeking any search warrants or making any arrests. As a result of
discussions with his superiors it was agreed that a meeting would be set up between everyone
having an interest in the enforcement of the Act. This is the meeting of October 27th to which I
made reference earlier in these reasons.
136 Corporal Noreau testified that after reviewing the Norsat case he concluded that it was
"clearly illegal for anyone to obtain a signal in contravention of the legislation." I repeat that, at that
Page 45
time, as a result of whatever he read, was told, or heard, Constable Noreau knew that there were real
and significant differences of opinion by courts across Canada with respect to the applicability and
effect of ss. 9 and 10 of the Radiocommunication Act.
137 It is also important to note that following his preparation of the template, Corporal Noreau
passed it on to his supervising Staff Sergeant for review and, as well, he forwarded a copy to an
official at Industry Canada for his review. Corporal Noreau was aware at the time he prepared this
template that it would form part of what becomes Appendix "C" in an application/information for a
search warrant and that the judicial officer or judge to whom the application would be sent would
rely on the information in deciding whether to authorize the search warrant. The template was
marked as exhibit 29. Corporal Noreau agreed that the purpose of Appendix "C" in an application
for a search warrant is to persuade the issuing official that an offence has been, or is about to be,
committed.
138 Corporal Noreau, notwithstanding his review of the RCMP files, testified that at no time did
he see the July 8, 1997 and December 17, 1997 memos from headquarters. (Exhibit 1, tabs 7 and 8,
the RCMP memos that comment on the state of the judicial interpretations of the Act at those
times).
139 During his cross-examination he insisted that the decisions preceding Norsat were, basically,
irrelevant because it was "a question of which of the decisions was most current". He testified that
in drafting his template he did not take the Leblanc decision into account. Indeed, at one point he
said that in preparing his template he never "got close to" the Leblanc case. He explained that
Leblanc was "past"; that he had no interest in looking at all the case law; that "I enforce the law
based on the legislation at hand"; "the legislation was clear to me"; and that the law was made clear
by the Norsat case, i.e., that what was transpiring was illegal.
140 In fact, the Leblanc decision by Haliburton J. was not issued until five days after the Court of
Appeal decision in Norsat. Accordingly, Corporal Noreau's testimony to the effect that he followed
the law set out in the most recent case, the Norsat case, is suspect. I find that when Corporal Noreau
was assigned to the Radiocommunication Act investigations and enforcement in the fall of 1998 he
did, as aforesaid, read a fair amount of material and heard comments with respect to the ongoing
uncertainty in the courts and concluded that the views held by his superiors were correct. I find,
therefore, that from that point on he, Corporal Noreau, played down the existence of the conflict in
the jurisprudence. He adopted the position held by his superiors, a position which, in my opinion,
was not tenable.
141 Put another way, I find that the conclusion he reached at that time was less than a properly
considered one and, as aforesaid, was more a product of the prevailing RCMP opinions, or perhaps,
more accurately, "mindset" on this issue than on any reasoned conclusion concerning the then state
of the jurisprudence which, as aforesaid, he understood.
142
The following exchange took place during the cross-examination of Corporal Noreau:
Page 46
Q.
A.
Q.
A.
Sir, when you think of the law, do you think of the law as black and white in a
statute, or do you think of the law as what the statute says and how the judges
interpret those laws?
No, that's for lawyers to do that; I don't. When I think of the law, I think of the
legislation, black and white in the criminal code. That's what I use.
Why would you be interested in the Federal Court of Appeal decision if you are
not interested in what the judges have to say? Why is that decision so relevant in
your testimony?
Because I found out from that period of time that there were conflicting decisions
rendered for all sorts of reasons. And that from those conflicting decisions, there
was one decision that was rendered that clarified that, there's only one. That was
the only one I was going to go by, and that was the Court of Appeal decision
November 20, 1997. That's all I needed to know. I didn't need to read the law, the
case, the decisions; I didn't need to read that. I knew that from various sources,
and I was able to make my opinion. I verified and read on several occasions the
legislation, section 9 and 10 of the Radiocommunication Act, and I applied the
starting date, where it was now clear that an infraction against those sections of
the Radiocommunication Act was in contravention of the law.
143 Corporal Noreau's evidence was that the purpose of the October 27, 1998 meeting was not
the one suggested by Mr. Obagi in cross-examination - i.e., that the purpose was to bring some
clarification to the issues. His answer was as follows:
Q.
A.
Right. So it would be fair to say that one of the purposes of the meeting was
certainly to bring clarification to all members as to the state of the law as of
October 27, 1998?
Sir, again, it's not a matter of bringing clarification to the state of the law, it's a
matter of making it known to the police officers who would be enforcing the
Radiocommunication Act, to make it known to all of us present there that the law
was clear. There could have been confusions in the past, but as of that date in the
B.C. Court of Appeal decision he was clear, I knew that from my earlier reading
of such materials in October, and I knew that the day I did the search of Mr.
Lahaie's premises on November 24th.
144 Corporal Noreau testified that, by the fall of 1998, the RCMP had evidence that the plaintiffs
were hacking cards at Rochester Street and elsewhere. However, the police decided that because
they had no reliable evidence at the time, surveillance should be undertaken.
145 On November 24, 1998, Corporal Noreau and Constable Dubuc, just after 9 o'clock in the
morning, parked their cars near 91 Rochester Street in order to observe the area. At approximately
10 o'clock that morning, a large truck arrived and parked in front of 91 Rochester whereupon people
began unloading boxes containing satellite systems and carried them into the premises. Corporal
Page 47
Noreau testified that he knew that there was no lawful purpose for which this equipment was being
unloaded. He, therefore, concluded that the plaintiffs were committing offences under ss. 9 and 10
of the Act and that he should obtain a search warrant in order to enter the premises. Therefore,
Constable Dubuc remained at the scene while Corporal Noreau returned to his office to brief his
superiors whereupon it was agreed that a search and seizure should be conducted and a warrant
obtained for that purpose.
146 Corporal Noreau then drafted an application for a search warrant using the aforementioned
template and prepared an affidavit with supplementary information. (Exhibit 1, tab 22).
147
Appendix "A" to the application describes the "things to be searched for" as follows:
A quantity of boxes marked RCA, displaying a satellite dish on the cover of the
said box, any DSS (Direct Satellite System) or DTH (Direct To Home) satellite
systems and/or any of its composite thereof namely, Antennas, Low-Noise Block
Converters (LNB), Integrated Receiver Decoder(s) (IRD, Access Cards and/or
any cards used for the purpose of decoding authorized program material. It would
also include any technical apparel used or intended to be used for the
programming of any such cards, as described above, any computer or devices
used to create such programming. Further, it would include any document(s) in
relation to the sale, ordering, purchasing, exchange, distributing of any of the
components named above. It would also include any documentation in relation to
the lease contract of any of the three apartments located at 91 Rochester, any
documents that refer to Digital Super City store, its owner and operators. All of
these documents could be found in the form of receipts, ledgers, sales slips and
rental agreements, ordering forms, accounts books, inventories, scratch papers,
invoices, telephone books telephone ledgers and/or organizers. Those documents
could be found in any format, including electronically stored records.
148 Appendix "B" to the information/application quotes ss. 9 and 10 of the Radiocommunication
Act in support of his "reasonable ground to believe that an offence was being committed".
149 Appendix "C" to the information/application is Corporal Noreau's affidavit that, as aforesaid,
incorporates his template and additional information. The following are the relevant parts of
Appendix "C":
12.
Grey Market encrypted subscription programming signals are not approved by
CRTC and no US broadcasting undertaking has received licensing approval for
its signal broadcast into Canada. Accordingly, none is a licensed broadcasting
undertaking under the Broadcasting Act and none is a lawful distributor in
Canada for the purpose of the Radiocommunication Act.
Page 48
...
Offences under the Radiocommunication Act and Broadcasting Act
21.
Section 32 of the Broadcasting Act creates an offence, inter alea [sic, alia] for
any person to carry on a broadcasting undertaking without a licence issued by
CRTC. Section 9(1)(c) of the Radiocommunication Act requires that:
'No person shall decode an encrypted radiocommunication that is intended
for reception either directly or indirectly to the public in Canada or
elsewhere on payment of a subscription fee or other charge, otherwise than
under and in accordance with the authorization from a person who has a
lawful right in Canada to transmit it and authorize its decoding.'
That section clearly provides an absolute prohibition against the decoding of
encrypted subscription program signals unless they emanate from a lawful
distributor in Canada and that distributor authorizes their decoding.
Section 10(1)(b) of the Radiocommunication Act creates an offence, inter alea,
[sic, alia] to manufacture, sell or possess equipment under circumstances that
give rise to a reasonable inference that it was used or intended to be used to
contravene the prohibition in Section 9.
22.
The sale of equipment used to decode US DTH encrypted subscription program
signals is prohibited in Canada by Sections 9 and 10 of the Radiocommunication
Act. The arranging of subscriptions for Canadian residents to US DTH satellite
encrypted subscription programming signals by means of, inter alea, [sic, alia]
the use of false US residential addresses, is an offence under section 21 of the
Criminal Code of Canada (Parties to Offence) and section 9 of the
Radiocommunication Act. (Note: the underlining is mine)
...
33.
As a result of the information received from CST Mervin LANE of the
Bowmanville RCMP detachment, the information of Angelo SERGNESE of
Page 49
Woodbridge, Ontario, the information of Jovo SIMEUNOVICH of Oshawa,
Ontario, the observation made by CST Michel DUBUC of the "A" Division
RCMP, the Informant strongly believes the items listed in Appendix "A" of this
document, also described in this appendix "C", will afford further evidence to
prove the offense(s) mentioned in Appendix "B", and that they are located at the
believed residential address of André LAHAIE, appt. #1 (first floor, ground
level) 91 Rochester, Ottawa, Ontario and, that they are also located at the second
floor of the building erected at 91 Rochester, believed the Digital Super City
Warehouse floor, apartment #2 and, that they are also located at the third level,
believed apartment #3 of the said erected building, the so believed residential
address of Marshall BUREAU.
150 Nowhere in the information is any mention made of the recent inconsistent jurisprudence. In
fact, it will be noted that Corporal Noreau described the s. 9 as "clearly" providing an "absolute
prohibition."
151 Following completion of his first draft of the information/application Corporal Noreau
showed it to his fellow officers at which time changes were made before the finalization of the
application. Corporal Noreau was not acting alone.
152 In cross-examination, Corporal Noreau was questioned on the duty of an informant to make
full and fair disclosure. He gave the following testimony:
Q.
In your almost 28 years I suspect you've have prepared quite a few search
warrants?
A. At the time I had 19 years service.
Q.
Is it fair to state that your primary goal in preparing an affidavit in support of a
search warrant, Appendix "C" if you will, is to make full and fair disclosure to
the Justice of the Peace, both as it relates to the facts you rely upon and as it
relates to the applicable law?
A. Not the law, the facts.
Q.
So it's not important -- let me put it this way. Your primary goal then is to make
full and fair disclosure to the JP as to the facts?
Page 50
A. That's correct.
Q.
Is also one of your goals to make full and fair disclosure to the JP as to your
knowledge of the law?
A. No.
Q.
A.
I take it then, Sir you do not need to disclose anything regarding the law and the
search warrant?
All I have to disclose is which offence is being investigated and which offence
I'm seeking evidence in relation to.
Q. All right.
A.
Q.
Obviously, I have to know the legislation of the offence being investigated, if I
can tell the Judge, these are the motives, reasonable and probable grounds that
will support my search or evidence in order to further support the offence being
investigated.
So in your 19 years of experience, up to this point in time, had you been aware of
conflicting case laws, as you termed them, with respect to the subject matter of
your search, you would feel obliged to provide that disclosure to the Justice of
the Peace?
A. Absolutely not.
Q.
So full and fair disclosure to the Justice of the Peace includes full and fair
disclosure of the facts, but not with respect to the case laws?
A. That's correct.
Q.
All right. If you did make reference to the law in your search warrant, you would
agree with me that having made reference to the law, you would require full and
fair disclosure in respect of that?
Page 51
A. No.
153
This line of questioning continued as follows:
Q.
And to the extent that you provide a description of the offence, you are required
to provide a full and fair description of that offence?
A. That's right.
154 Corporal Noreau admitted, of course, that a justice of the peace when making his/her
decision on whether to authorize a search warrant relies on the affidavit sworn in support of it and
that the justice of the peace will assume in good faith that the information contained in the affidavit
is full and fair.
155 Following the completion of the information/application Corporal Noreau located a justice of
the peace. The justice of the peace made some minor changes to the document and ordered that the
search warrant be issued. She, the justice of the peace, did not question Corporal Noreau regarding
the grounds or motive for the warrant.
156 According to standard operating procedures the police officers involved in the search and
seizure wore vests, and carried service revolvers, batons, and handcuffs. On this occasion however,
they were wearing civilian clothing rather than police uniforms. In all, 13 officers were involved in
the execution of the search warrant although all of them did not actually enter the premises.
Corporal Noreau testified that "we searched every possible area."
157 Messrs Lahaie and Dinardo were present at 91 Rochester when, at approximately 6 p.m. on
November 24, 1998, the doorbell rang. Mr. Dinardo opened the door whereupon Corporal Noreau
presented him with the search warrant. Messrs Dinardo and Lahaie were advised that they would
not be arrested and an atmosphere of cooperation existed throughout the search.
158 Mr. Dinardo testified that he was quite surprised and confused by what was transpiring and
said in his evidence that "as far as I knew, I hadn't done anything wrong." Mr. Lahaie was advised
by Corporal Noreau that he was being investigated because the police had received allegations that
he and Digital were involved in altering, selling, and distributing access cards and, therefore, were
involved in illegal conduct.
159 Over the course of the next few hours, the police searched the entire premises including the
Lahaie residence and Mr. Lahaie's daughter's bedroom on the second floor and the tenants'
apartment on the third floor. Nothing was taken from the third floor apartment.
160 The police proceeded to remove inventory, office computers, business records, and
everything they considered associated with the business. The seizure was clearly a very extensive
one. The freshly delivered boxes were visible from the outside to someone looking through the
Page 52
second floor windows. In other words, nothing was concealed. As well, there was no concealment
of any of the equipment used to hack the access cards. Mr. Dinardo testified that the officers were
courteous at all times "if somewhat reluctant to discuss anything."
161 Mr. Lahaie testified that, notwithstanding the atmosphere of courtesy, he was shocked to see
how many officers were involved in the search and seizure and by their manner of dress. He said, "it
was like a swat team". He also testified that his 15-year-old daughter was hysterical and scared.
162 Corporal Noreau spoke to Mr. Lahaie about the applicable law. Mr. Lahaie stated that his
understanding was that he was doing nothing illegal while Corporal Noreau stated that his
interpretation of the law was that the business was an illegal one. Mr. Lahaie was upset because the
officers searched his daughter's bedroom and her personal items and as well they searched his and
his partner's personal effects. According to Mr. Lahaie, the police took, with minor exceptions,
"everything except the furniture, clothing and personal items." Mr. Lahaie commented that it looked
like they were "out of business."
163 Indeed, Mr. Lahaie's testimony was that, because the seizure was so complete, he was not
able to continue running the Rochester Street business.
164 Corporal Noreau testified that he found the aforementioned Borden & Elliot letter and
showed it to Mr. Lahaie. He testified that he asked Mr. Lahaie whether he had ever read the letter
and was advised by him that he had read it some time ago. Mr. Lahaie told Corporal Noreau that he
had discussed the legality of the business with a lawyer who had told him that the law was unclear.
165 Corporal Noreau, in his testimony, defended the extent of the seizure on the grounds that the
items removed had no lawful purpose. He said, "every box was in contravention of the Act" and that
he had no choice but to take everything." In fact, there were 65 boxes delivered that day. All were
seized. He also testified that the seizure was extensive because he was not going to allow a
continuation of the offences. He also said, "Mr. Lahaie was hacking access cards. I was not going to
allow another 50 or 60 satellite dishes to be distributed, and that the offence of hacking and stealing
signals to continue, I was not going to do that."
166 It is the position of the plaintiffs that the defendants, the day after the search and seizure,
used the services of the News medium to "brand" Mr. Lahaie and Digital as criminals at a time
when they, the defendants, knew that the law was in a state of uncertainty.
167 Indeed, on November 25, 1998, press releases were distributed and articles appeared in the
local newspapers clearly identifying the 91 Rochester Street premises. As well, the television press
was invited to attend at the RCMP premises to view what had been seized and to interview RCMP
officers. Broadcasts appeared in both the local French and English television stations. While the
plaintiffs' names were not revealed in the television broadcasts, the Rochester Street premises,
again, were featured.
Page 53
168 The press release indicated that a man would be "charged shortly". The television broadcasts
indicated that the police were issuing a warning to the population to be careful about becoming
involved with persons "guilty of fraud who are often operating through illegal or unlawful
businesses." They also indicated in the press release that "in Canada there would be - there are,
rather from 200,000 to 300,000 illegal satellite systems. To operate these systems the people or
persons guilty of fraud invent an American address for their Canadian clients, without the clients'
knowledge of this." The release went on to indicate that "the RCMP will soon lay charges against a
man in his 30s from Ottawa. The people or persons found guilty of this type of crime are subject to
a prison term, on top of a fine, that could go as high as $25,000."
169
The following is an extract of the audio portion of one of the television broadcasts:
The pirate, or hacker, arrested in this house, on Rochester Street in Ottawa, was
selling equipment which permitted, or allowed, the reception of an exclusively
American satellite signal without going through Canadian distributors of satellite
TV.
What you see on the table, especially in green, these are decoders. These are
decoders that do not come with those systems. Those systems that you see there
are hacked.
It's decoders that one would make in a basement, or one doesn't quite know
where, and one sells this card to a client for roughly between $600 and $900. An
electronic card, or a programming card like this one, works with a dish antenna
of 18 inch diameter. There would be between 200,000 and 300,000 dish antennae
of this type throughout the country and, in accordance with Canadian regulations,
they would be illegal, or unlawful.
170 The press release also indicated that persons purchasing this equipment are not aware that,
"at a given time their system will no longer be functional."
171 To be fair, the above quotes were taken from a quickly prepared handwritten translation of
the French television broadcasts. The translators were not provided with sufficient time to complete
a better translation.
172 Sergeant [then Corporal] Denis Angers worked with Corporal Noreau at the relevant time.
He was asked why the RCMP decided "to go with a full, full press bulletin and invite the press to
come and videotape the seized equipment." His answer was:
Our goal in working this file were not to go after one individual and prosecute
them and just get rid of it and then do another one. Our role, we decided when we
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began these kind of investigation was to also instruct the public about the legality
of owning satellite dishes and that the illegality of owning satellite coming from
the United States. We felt that this case was an excellent one to just to advise the
public that yes, this happened and it's no good to purchase it and it was some
kind of a [sic, an] education to the public. That was the main goal of this press
conference.
173 The defendants agree that the search and seizure presented a "perfect opportunity" for the
RCMP to advise the public that buying American satellite equipment was "dangerous" and that
purchasers could be prosecuted. They also agree that, given the size of the seizure, publicity would
serve to kick-start the defendants' media blitz to both local retailers and to the public to educate
them on what the RCMP believed to be the proper interpretation of ss. 9 and 10 of the Act. It is,
however, important to note that other press conferences had been called by the RCMP in other areas
all of which were designed to "educate the public to the fact that there was no such thing as the grey
market."
174 Corporal Noreau testified that while he had nothing to do with the set-up and preparation of
the press release and conferences, he agreed with them.
175 When Mr. Lahaie met with Mr. Ertel, his criminal lawyer, a day or so after the search and
seizure, no criminal charges had yet been laid. Upon his being retained, Mr. Ertel contacted
Constable Noreau for some background information and then conducted a study of the existing
jurisprudence with respect to ss. 9 and 10 of the Act. He testified that "it was pretty confusing". He
said that he told Mr. Lahaie and his solicitor that "the law was far from clear" but that it seemed to
him, Mr. Ertel, that the most reasonable interpretation of the law at that time, as he saw it, was that
there was no offence unless a person was stealing or obtaining something, i.e., a signal, by decoding
it from someone who was a lawful distributor in Canada and that from the information he had
received at the time, it did not appear that the plaintiffs were attempting to decode the signals of
either of the two Canadian service providers that had recently become licenced distributors. Mr.
Ertel advised them that the most likely outcome was that there was nothing illegal about what they
were doing although he qualified his opinion by indicating to them that "it could go either way".
176 Mr. Ertel advised them that he was more concerned with the so-called grey market than he
was with the black market. He put it this way in his evidence-in-chief:
... [I]ronically, at the same time, I think the phony address in the United States
method was being described as 'grey market' and the altered card with computer
software was being described as 'black market', which would sort of make you
think that the black one was worse than the grey one. But my advice to him was
that they should not be involved in what was being called 'grey market'.
And the reason for that was not because I thought it was going to cause anybody
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any problems in Canada. But in the United States there was a fraud going on.
There was a misrepresentation to American companies, that people lived at a
certain address when they didn't. It involved cross-border communications and
transportation. Had it actually meant that it was possible that that arrangement
was a violation of, like, mail and wire fraud, RICO statutes in the United States,
and it could have caused somebody to be possibly in some trouble in the United
States.
177 In any event, he advised them that he did not think there was any offence being committed in
Canada arising out of the hacking of cards because he was of the view that the U.S. satellite
companies had no proprietory interest in Canada because they had no licence to do business here.
178 It was Mr. Ertel's understanding at that time that the plaintiffs would carry on operating their
business. He said that he thought that Mr. Lahaie "was aware that there was some chance he was
taking." He went on to say, "but, based on my advice, I didn't think it was an unreasonable decision
for him to make because, in his opinion, the grey market would not expose him to prosecution
because he would not be breaking any Canadian laws. His concern was that Mr. Lahaie "could get
himself in trouble in the states."
179 The Crown initiated a proposal regarding the return of the seized goods; a proposal based on,
among other things, the furnishing by the accused of a bond in the amount of $10,000. Mr. Lahaie
was not able to raise the money.
180 The Crown made it known to Mr. Ertel that it was the Crown's position that ss. 9 and 10 of
the statute did create offences that could be prosecuted and that it was their position that
prosecutions would continue.
181 In cross-examination, Mr. Ertel explained the advice which he gave to the plaintiffs at the
time of his retainer in 1998. He said, "but it wasn't just a 'this could go either way, you make your
own decision', it was 'this could go either way. I think it's more likely to go this way. You're not
harming somebody' it's not like I'm saying maybe cocaine is going to be declared legal, so you can
go ahead and sell it. So, 'if you conduct your business, you'll be like Paul Magder Furs, you'll be
selling furs on Sunday and you might get fined. And you might ultimately win and you might not."
He then added, "I advised him there was a risk." Then he said, "I knew it (the Act) was in force in
Canada. One risk that I didn't envision was that he was ever going to have any trouble for importing
the stuff, because he was declaring the stuff at Customs. I still find it odd to this day that Customs
had a ruling that you can bring the stuff in, even though it's illegal to import it. That to me is -- And
I also explained to him, when I was explaining things to him, the defence of officially - induced
error, which I thought might arise on the facts." Mr. Ertel agreed, however, that there was no
binding decision in Ontario at that time that supported his interpretation of the law; however, he
added that similarly, there was no binding Ontario interpretation favouring the Crown's position.
182
Sergeant Puchniak [now retired] at the relevant time, was Constable Noreau's supervisor. He
Page 56
explained that the prosecution of the plaintiffs was regarded as a test case.
183
The following are extracts from his evidence:
Q.
A.
What was the intended purpose of this? [The invitation to the media to attend the
Press conference]. Why did you want authorization? Why did you want to invite
the media? What was the rationale behind ...
Well, it was a significant seizure, the number of items seized, the number of
receivers and so forth. And it sort of fit in with our plans to warn retailers and the
public that, well, this is illegal to either sell or buy these - - well, purchase these
systems because you're going to end up suffering for it.
So it was sort of an indication, I guess, also that, you know, the RCMP is
out there and we're working, or doing our job as we're supposed to be doing. I
would say a combination of things. Warn the public, warn the retailers. If it had
been two or three receivers, I guarantee there wouldn't have been a Press release.
It was the quantity also had a little bit to do with it.
Q. What better way to send the message?
A. Yes.
184
Later he said:
A.
So if you want to call it a test case, it was a case that - - it was the type of case
that headquarters was looking for to set a precedent and we would have good
case law, we could have a conviction, we would have punitive measures taken
and I guess the word you could use is a test case, but we had never called it, it's
going to be a test case, we had never looked at it as a test case. Just as a case that
was solid, that when we took to court we were going to be successful.
185 Corporal Noreau testified that he was surprised, in April of 1999 when he attended at the
Manotick Digital franchise, to see satellite receivers for American signals. A search warrant was
then obtained using essentially the same wording as was employed in November of 1998, save that
the 1999 affidavit contained a paragraph about reliance on personal information and information
from third parties. On cross-examination, Corporal Noreau acknowledged that, apart from seeing
two unopened boxes identified as US satellite dishes which he learned were purchased after the
1998 seizure and his knowledge that Digital was still importing satellite systems, he had absolutely
no evidence that the Manotick store, Mr. Lahaie, or Digital were continuing to be involved in the
sale of modified or hacked access cards. By this time, of course, none of the items that had been
seized on November 24, 1998 had been returned. In other words, Corporal Noreau agreed that in
April of 1999 he had absolutely no evidence that the plaintiffs were involved in the black market
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although the RCMP did have evidence of involvement in the grey market. Corporal Noreau testified
that he, at that time, had no evidence that the plaintiffs were hacking cards. Actually, his answer
was "I had no evidence that he [Mr. Lahaie] had quit hacking cards." Reliance, therefore, was
placed on the same evidence used at the time of the first application for a search warrant.
186 The 1999 search warrant application is exhibit 2, tab 72. In fact, the location to be searched
was not the Manotick franchise but, rather, the office of the plaintiffs' customs broker in Prescott
which business, of course, was not involved in smuggling - i.e., all necessary customs
documentation had been completed and all customs duties had been paid. The comments regarding
the law being clear are repeated.
187 The new set of charges laid following the 1999 seizure of the business records from the
customs broker all relate to the grey area. In re-examination Corporal Noreau testified that what he
was investigating at that time was the continuation of the importing of such devices - i.e., s. 10(1)(b)
offences.
188 Corporal Noreau was conscious of the fact that the effect of the seizure would be to put
Digital out of business or, at least, the "American" side of the business.
189 Corporal Noreau, when questioned about the word "clearly" in the application for a search
warrant, attempted to explain the lack of any reference to the contrary judicial interpretations of the
Act by stating that these other decisions were decided before the Federal Court of Appeal decision
and that he "went with" the most recent decision from the highest level of court. Given the history
of the jurisprudence, this answer is far from convincing.
190 In December of 1999, the plaintiffs received a memo circulated by Canada Customs and
Revenue Agency dated December 15, 1999, entitled "IMPORTATION OF SATELLITE DISHES".
This document reads as follows:
In keeping with the Canada Customs and Revenue Agency's principles of
transparency and responsible enforcement the following pertains to the legality
of importing satellite dishes and other satellite decoding equipment.
The Radiocommunication Act does not prohibit or regulate the importation of
satellite equipment, rather, it makes it an offence for a person to use devices for
the purpose of decoding unauthorized television programming. Therefore, the
Canada Customs and Revenue Agency will not prevent the importation of these
devices on behalf of Industry Canada.
You are cautioned to contact Steve Burak of Industry Canada at 905-639-3169 or
Sergeant G. M. Archibald of the RCMP at 613-990-6246, to discuss the
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provisions of the Radiocommunication Act. You may expect the items
immediately without having to pay duties and taxes. You are hereby advised that
it is illegal to use this equipment in Canada.
This ruling in no way eliminates the requirement for persons to declare all items
including satellite equipment, acquired outside of Canada and at duty free shops.
191 On January 14, 2000, the plaintiffs and other importers received another communication
from Canada Customs and Revenue Agency. This later communication is entitled "RE:
SATELLITE DISH IMPORTS" and reads as follows:
On December 15, 1999 the enclosed memo was released regarding the
importation of satellite dishes and other satellite decoding equipment. This
notification was issued to clarify the legality of importing satellite dishes and
other satellite decoding equipment. Our records indicate that you have imported
goods in the past using tariff items related to these types of goods and as such we
felt it would be appropriate for you to receive this notification.
For further information regarding this subject there are contacts listed in the
notice or you may telephone a Trade Services Officer at (613) 991-0537, fax us
at (613) 952-7149 or write to the above address.
192 In February 2000, yet another notice was received by the plaintiffs from Canada Customs
and Revenue Agency. This third notice is dated February 15, 2000 and is entitled "IMPORTATION
OF SATELLITE DISHES". It reads as follows:
In keeping with Canada Customs and Revenue Agency's (CCRA) principle of
transparency and responsible enforcement, the following pertains to the legality
of importing satellite dishes and other satellite equipment capable of decoding
encrypted TV satellite signals emanating from an unlicenced American service
provider.
Please be advised that while the Canada Customs and Revenue Agency cannot, at
this time, detain such goods under the provisions of the Customs Act, it is still
illegal to import, possess, sell or distribute this type of satellite equipment
pursuant to the Radiocommunication Act. Before importing such equipment or
requesting release of these goods if already imported, we strongly urge you to
contact Steve Burak of Industry Canada ... or Sergeant G.M. Archibald of the
RCMP at ... to discuss the provisions of the Radiocommunication Act dealing
with such matter.
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Should you decide not to request release of these goods, you have the choice of
abandoning or re-exporting them.
You should also be aware that CCRA and the RCMP are exploring options to
control the importation of satellite equipment at the border.
193 This notice was accompanied by a letter of even date from Canada Customs and Revenue
Agency referenced as "Subject: Satellite Equipment". This letter reads as follows:
On January 14, 2000, I sent you a memo regarding the importation of satellite
dishes and other satellite equipment. It appears that the wording of this memo
gives the impression that it is not illegal to import such equipment. This was not
the intent of the memo.
The intent of the memo was to advise importers that while currently, the Canada
Customs and Revenue Agency (CCRA) cannot detain satellite equipment under
the provisions of the Customs Act, it is still illegal to import, possess, sell or
distribute satellite dishes and other satellite equipment capable of decoding
encrypted TV satellite signals emanating from an unlicenced American service
provider pursuant to the Radiocommunication Act. While this situation may
change in the near future as the CCRA and the RCMP are exploring options to
control the importation of these types of goods at the border, the importers, prior
to importation, are strongly urged to contact Industry Canada or the RCMP to
discuss the provisions of the Radiocommunication Act.
Attached is a revised memo clarifying this matter.
I regret any inconveniences this may have caused you.
194
It seems that governmental authorities themselves were confused.
The Criminal Charges
195 As noted earlier, on February 24, 1999, Digital, Andre Lahaie, and others were charged with
a total of six counts involving ss. 9(1)(c) and 10(1)(b) of the Radiocommunication Act and ss. 21
and 465(1)(c) of the Criminal Code. Fresh charges were laid on April 22, 1999 in a slightly
different form.
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196 On July 15, 1999, Andre Lahaie, Rocco Dinardo and Digital were charged with 14 separate
counts with respect to offences under ss. 9(1)(c) and 10(1)(b) of the Radiocommunication Act.
Other Relevant Facts
197 Mr. Dinardo who, as aforesaid, was an investor in and the accountant for Digital testified,
and I accept his testimony as truthful, that by November 1998 "business was looking good -- "; "we
were quite exited we were finally in the black --; we were feeling confident that the business was
going forward; the franchise stores were starting to turn around and coming -- looking quite
strongly; and I was quite optimistic" as was Mr. Lahaie. Indeed, on the day of the search and seizure
at Rochester, Digital received the delivery of 65 RCA receivers, all of which were pre-sold.
198 Mr. Lahaie testified that within the space of very few years he had opened five stores, had
paid for his inventory, and by 1997 the business looked "pretty profitable". In 1998 his plan was to
operate a warehouse in Ottawa and distribute satellite systems from it to the five franchisees as well
as to other dealers.
199 Mr. Dinardo, as a result of Digital's financial demise, lost his $50,000 investment in the
company, his interest in the company, and the value of his time devoted to run the business. Mr.
Lahaie testified that by 1998, he had invested between $175,000 and $250,000 in the business.
200 Following the laying of the additional charges in July of 1999, the plaintiffs decided to cease
carrying on business as it appeared that the police were not going to allow the businesses to
continue unimpeded.
201 Following his retainer, Mr. Ertel had a number of discussions with the Crown concerning the
return of the seized equipment. These efforts were unsuccessful until long after it was too late to
salvage the business or make a meaningful recovery from the equipment. It is the position of the
plaintiffs that the Crown did not require all of the seized goods as evidence in support of the
charges.
202 As a result of the search and seizure and subsequent press conference and notoriety in the
community, Mr. Lahaie suffered personal and public humiliation and, as well, stress in his family
and personal relationships. Mr. Lahaie, as well, was angry about what he perceived to be the
decision of the police to single out his operation, notwithstanding that there were numerous
businesses like his throughout the country.
203 Notwithstanding his attempts to continue his business following the search and seizure, Mr.
Lahaie encountered severe difficulties obtaining equipment for the franchisees. Alternative product
sources were more expensive than those to which he had access prior to the search and seizure. The
franchisees became less competitive in their respective communities and, therefore, the royalties
owing to the plaintiffs dropped off. Cash flow was negatively impacted. Suppliers became reticent
to supply him with equipment. Businesses that had formerly looked to the plaintiffs for supplies
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were scared away. These difficulties were exacerbated once the charges were actually laid.
204 Because of the charges, Mr. Lahaie was restricted from crossing the border into the U.S. with
the result that the plaintiffs' U.S. operation suffered and eventually failed.
205 When the second set of charges was laid in July of 1999, Mr. Lahaie decided to end the
business operations of the plaintiffs. Incidentally, no equipment was seized by the police at the time
of the laying of the second set of charges. Mr. Ertel had advised Mr. Lahaie that, obviously, the
RCMP was not prepared to sit back and wait for a definitive judicial pronouncement before taking
steps to enforce the Act.
206 Following the abandonment of the business operations, Mr. Lahaie returned to the
automotive business where he had been earlier employed and with which he was familiar. As well,
he participated with his brother in the operation of a few satellite equipment stores restricted to
Canadian signals. In a relatively short period of time, these new endeavours became successful.
However, prior to that, on June 29, 2000, Mr. Lahaie declared personal bankruptcy from which he
was discharged on March 30, 2001.
207 Eventually, all of the charges were stayed following the release of the Ontario Court of
Appeal's decision in Branton, supra. Subsequently, the charges were dropped altogether in the
summer of 2001 following which the seized equipment was returned and disposed of at a fraction of
what had been paid for it.
The Relevant Legal Principles
208 "... The rule of law requires that police actions be authorized by a valid law and that police
conduct be subject to judicial review and, if illegal, the award of an appropriate remedy ... In recent
years, new potential civil causes of actions have been recognized with respect to matters such as ...
misuse of public office. Although civil lawsuits against the police are expensive and lengthy and
therefore relatively rare, they do serve an important accountability function." (See Commission of
Inquiry into the Actions of Canadian Officials in Relation to Maher Arar (Ottawa: Public Works
and Government Services Canada, 2006) at 263).
209 The Charter right of a person under s. 8 to be secure against unreasonable search and seizure
is a broad and general right and should be interpreted as such. The state must be able to demonstrate
that its right to interfere with a person's s. 8 rights is superior to the individual's right. The Supreme
Court of Canada in Canada (Combines Investigation Acts, Director of Investigation and Research)
v. Southam Inc., [1984] 2 S.C.R. 145, is authority for the foregoing proposition and also for the
proposition that "a requirement of prior authorization, usually in the form of a valid warrant, has
been a consistent prerequisite for a valid search and seizure both at common law and under most
statutes."
210
"Privacy, however, is not the only interest protected by section 8. As the reasons for
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judgment in Southam demonstrate, the rule requiring that searches be previously authorized by
warrant had its origins in the need to protect property rights. In the present case, the appellants have
an important property interest in the things seized which are, by definition, the books and records of
the business carried on by them. I believe we should take judicial notice of the fact that the seizure
of such books and records and their physical removal from the company's business premises is
bound to have the most serious repercussions on its ability to carry on its business." (from F.K.
Clayton Group Ltd. v. M.N.R., [1988] 2 F.C. 467 at para. 10 (C.A.)).
211 At para. 21, Hugessen J. added that "[t]he seizing officer may have acted in good faith and in
accordance with the law as he then presumably believed it to be, but that cannot make the seizure
itself reasonable."
212 The Ontario Court of Appeal in R. v. Branton, supra, at para. 16 ruled that "[o]ne of the
requirements for the issuance of a search warrant is that the search will provide evidence with
respect to an offence known to law."
213
At para. 31 of the Branton decision, the Court of Appeal had the following to say:
[31] Lane's [an RCMP officer] Information started out with 11 paragraphs ("the
template") copied from an Information prepared by Cpl. Johnson. The template
was found to be defective when it was originally sworn by Johnson and when it
was further relied upon in R. v. Beacock, [2000] O.J. No. 4300. The template
advises that "the theft of telecommunication signals" in the satellite television
industry is "a relatively new area". However, Lane's Information excluded one
paragraph from the Johnson template that referred to case law contradicting the
RCMP's opinion. The motions judge was very critical of Lane's Information. The
following excerpts from the motions judge's September 8 reasons [at paras.
37-39, 43] make up the substance of the motions judge's ruling on this point:
Constable Lane's affidavit leaves off at paragraph 11 citing [ExpressVu
Inc. v. NII Norsat International Inc., [[1998] 1 F.C. 245 (T.D.)]. In
cross-examination, Constable Lane was not sure what the state of the case
law was when he prepared his affidavit, but had he even looked at the
decision in ExpressVu v. Norsat, he would have seen cited R. v. Ereiser
[(1997), 156 Sask. R. 71 (Q.B.)], a decision rejecting the interpretation of
s. 9(1)(c) and 10(1)(b) advocated by the authorities. No mention was made
of R. v. LeBlanc [(1997), N.S.J. No. 476 (S.C.)] as Corporal Johnson did
in his affidavit. No mention was made of R. v. Love, [[1997] M.J. No. 109
(Man. Q.B.)]. Is this full, frank and fair disclosure as the case law requires?
I think not. Is reference to a decision on a motion for summary judgment in
a civil action full, frank and fair disclosure? Again, I think not. In
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paragraph 9, Constable Lane cited R. v. Knibb, [ [1997] 8 W.W.R. 115
(Alta. Prov. Ct.)], a decision favouring the view of the police authorities.
Yet had Constable Lane looked at R. v. Knibb, he would have seen
reference to LeBlanc.
This is not to say that the police authorities are required to know every
decided case on point, but when an affiant cites two favourable cases and
deliberately omits a case against his interest which is contained in the
precedent which he is copying, then the logical inference is the disclosure
is one-sided and designed to persuade the reviewing Justice to see matters
his way.
Further, paragraphs 1 to 11 inclusive have nothing to do with the police
investigation relating to Branton. Counsel for the respondent would have
the court disregard all eleven paragraphs and treat them as "Preamble", to
use his word. It is more than evident that no Justice of the Peace reading
these paragraphs would regard them as preamble, but rather statements of
fact applying to Branton. Paragraphs 2 and 3 use the word "theft";
paragraph 5 says: "This investigation concerns the theft of ..."; paragraph 6
says: "It is illegal ..."; and paragraph 7 says "These particular access cards
...". Surely, these are statements of fact required to lay the foundation to
enable the Justice of the Peace to conclude that there indeed does exist
reasonable grounds to believe that an offence has been committed.
214 The Court of Appeal then went on to again refer to the following comments of the motions
judge:
I believe the law concerning the content of the affidavit filed in support of the
application for a search warrant is that the affiant must provide full, frank and
fair disclosure of the material facts which will enable the reviewing Justice of the
Peace to objectively and independently conclude that there is a "credibly based
probability" that an offence has been committed and that the requested search
and seizure will afford evidence to substantiate the alleged offence. Clearly that
requires that the affiant preferably stick to statements of fact and keep the
narrative and conclusion of law to an absolute minimum, should they be present
at all. ...
215
At para. 34, the Court of Appeal said:
... I would agree with the motions judge that the affiant failed to provide full,
frank and fair disclosure to the justice of the peace issuing the warrant. This
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failure deprived the Justice of the Peace of his right to assess all of the
circumstances in deciding whether it was appropriate to issue the warrant. The
trial judge's decision to quash the warrant implies that the usable contents of the
search warrant failed to satisfy the statutory grounds for issuing the warrant. I
would agree.
In the result, the Court of Appeal upheld the quashing of the warrant by the motion judge.
216 Sheppard J., the motion judge (see [2000] O.J. No. 3323) also said, at para. 52, "[a]nd it
should be remembered that a search and seizure of a persons property is an extraordinary invasive
procedure into a person's right to privacy and therefore that statements made in the affidavit ought
to be clear, factual and impartial." The trial judge held, in particular, that the law presented to the
justice of the peace was a "partial presentation."
217 It is the duty of the police to investigate crime and enforce laws. Notwithstanding this, there
are also duties owed by the police to suspects under investigation. Wrongful police investigation of
a suspect may cause harm to the suspect. "At stake are his freedom, his reputation and how he may
spend a good portion of his life." Society needs protection from deliberate wrongful acts or
omissions of the police that lead to wrongful conviction. The recognition of the duty of a police
officer to act properly with respect to a suspect does not conflict with his/her duty to the public to
prevent crime. Police must not investigate in an unconstrained manner - it is their duty to investigate
in accordance with the law. This includes restrictions imposed by the Charter. It may also include
tort law. The suspect shares the public's interest in diligent investigation in accordance with the law.
Police are not required to evaluate evidence according to legal standards or to make legal
judgments. Police officers are professionals and must act professionally and reasonably. The
foregoing propositions have been taken or extrapolated from the Supreme Court of Canada decision
in Hill v. Hamilton-Wentworth Regional Services Board, [2007] 3 S.C.R. 129.
218 A justice of the peace who is satisfied by information on oath that there are reasonable
grounds to believe that there is in a building, receptacle or place anything on or in respect of which
any offence under the Criminal Code or any other Act of Parliament has been or is suspected to
have been committed may issue a warrant authorizing the police to search the building, receptacle
or place or any such thing and to seize it. (Criminal Code, s. 487(1)). A justice of the peace has a
discretion regarding whether a warrant should issue. The information in support of the application
should disclose whether there are alternative sources of the information and whether they have been
exhausted. (See Canadian Broadcasting Corp. v. New Brunswick (Attorney General) [1991] 3
S.C.R. 459).
219 A false statement in an Information to obtain a search warrant may vitiate the warrant. (See
R. v. Couture (1998), 129 C.C.C. (3d) 302 (Que. C.A.)).
220
In R. v. King, supra, the New Brunswick Court of Appeal, at para. 8, said the following:
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While the respondents' submission respecting the inactivity of the licensed
distributor may become an issue at trial, it cannot affect the jurisdiction of a
Judge to authorize a warrant to search if the information satisfies the Judge that
such a warrant should be issued. To hold otherwise would oblige the officer, at
the investigation stage, to anticipate and disclose to the issuing judge every
possible defence that might be raised if charges proceed and, as a result,
characterize such failure as fraud on the part of the officer.
221 It is not the role of a justice of the peace to attempt to resolve conflicting legal authorities
since that is the task of the trial judge. However, it is not proper to mislead the judge into believing
that the law is settled. I reach this conclusion from a reading of Forsyth J.'s decision in R. v.
Beacock, [2000] O.J. No. 4300 (Ct. J.) and, in particular, para. 44 of his decision.
222
Forsyth J. in R. v. Beacock, supra, at para. 44 had the following to say:
... it is obvious that even the fullest disclosure by Corporal Johnson of all
common law precedents on the point as of January 16, '98 could only have led
the Justice of the Peace to the conclusion that the law was unsettled, to say the
least, on the question of the legality of decoding or intercepting American
satellite signals where there was no licensed lawful Canadian distributor of them.
As long as there were any decisions extant as of January 16, '98 of which the
Justice of the Peace was apprised which supported the conclusion of illegality of
such interceptions, then surely the Justice of the Peace would be entitled to have
reasonable and probable grounds that such activity did indeed constitute a crime
under Section 327 of the Code or an infraction of the Radiocommunication Act.
To say otherwise would be to place the Justice of the Peace on January the 16th,
'98 in the position of a trial judge attempting to decide in the face of conflicting
authorities whether or not the Crown had proven beyond a reasonable doubt that
either or both of Section 327 of the Code and Section 9 and 10 of the
Radiocommunication as related to the interception of American satellite
telecommunication signals in the absence of a licensed lawful Canadian
distributor of them constituted an offence in Canada. That was not the standard
upon which the Justice of the Peace was obliged to ponder. Reasonable grounds
only was the standard.
223 Similar comments are found in the Supreme Court of Canada's decision in CanadianOxy
Chemicals Ltd. v. Canada (Attorney General), [1999] 1 S.C.R. 743 at paras. 21 and 22 as follows:
At the investigative stage the authorities are charged with determining the
following: What happened? Who did it? Is the conduct criminally culpable
behaviour? Search warrants are a staple investigative tool for answering those
questions, and the section authorizing their issuance must be interpreted in that
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light.
The purpose of s. 487(1) is to allow the investigators to unearth and preserve as
much relevant evidence as possible. To ensure that the authorities are able to
perform their appointed functions properly they should be able to locate, examine
and preserve all the evidence relevant to events which may have given rise to
criminal liability. It is not the role of the police to investigate and decide whether
the essential elements of an offence are made out - that decision is the role of the
courts. The function of the police, and other peace officers, is to investigate
incidents which might be criminal, make a conscientious and informed decision
as to whether charges should be laid, and then present the full and unadulterated
facts to the prosecutorial authorities. To that end an unnecessary and restrictive
interpretation of s. 487(1) defeats its purpose. See Re Church of Scientology and
the Queen (No. 6) (1987), 31 C.C.C. (3d) 449, p. 475:
Police work should not be frustrated by the meticulous examination of facts and
law that is appropriate to a trial process ... There may be serious questions of law
as to whether what is asserted amounts to a criminal offence ... However, these
issues can hardly be determined before the Crown has marshalled its evidence
and is in a position to proceed with the prosecution.
224 A person should not be unfairly singled out for prosecution among many others whose
conduct was the same. In circumstances where there is doubt concerning whether the conduct in
question constitutes a criminal offence, it may be appropriate at or before the laying of a charge to
proceed by way of a test case in the absence of an expensive search and seizure which will lead to
the destruction of a person's livelihood. (See R. v. Miles of Music Ltd., [1987] O.J. No. 2591 (Prov.
Ct.)).
225 In R. v. Miles of Music Ltd., [1989] O.J. No. 391 (C.A.) an appeal was allowed from the
Provincial Court decision; however, a dissenting opinion of Blair J.A. is noteworthy. At para. 36 he
said:
In these proceedings it can fairly be said that the prosecution used artillery to kill
a fly. The Crown did not dispute the conclusion of the experienced motions court
judge that [pp. 193-94 C.P.R.]:
A test case could have proceeded against Roch by simply swearing the
required informations and thereafter issuing him appearance notices and/or
summonses which procedure would have permitted him to continue to earn
his livelihood until the new legal issue involved had been resolved.
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The methods employed by the police were draconian. The police seized not only
Roch's compilation tapes but also the original recordings from which the tapes
were made, his equipment and his business records. This seizure put Roch out of
business and ruined him financially. The result was, as my brother Krever has
said, unfair to Roch. It now must be determined whether these proceedings, in
addition to being unfair, constituted an abuse of process.
226 McLellan J.'s decision in R. v. King, [1996] N.B.J. No. 449 (Q.B.) is one of many judicial
authorities for the proposition that, prior to proceeding with a search and seizure, the police should
consider whether the writ of search and seizure would be, in the circumstances, oppressive and
excessive or, put another way, whether the search and seizure is proportional to the charges to be
laid. The issue is reasonableness. Mr. King was subjected to the search and seizure on the grounds
that his business operations were similar to those of the plaintiffs in this action. McLellan J. had the
following to say under the heading "Unresolved Legal Questions":
[32] If Mr. King and his company are prosecuted, legal questions relating to the
absence of lawful distributors in Canada, freedom of expression and the legality
of clones, may have to be answered.
[33] At this stage of this case I think those legal questions must be kept in mind
in deciding whether the search and seizure on June 26, 1996 was reasonable or
unreasonable.
227
Under the heading "Reasonable or Unreasonable Search and Seizure" McLellan J. said:
[34] As noted, Mr. King and his company have Charter rights "to be secure
against unreasonable search or seizure" and "to be presumed innocent until found
guilty".
[35] Because of the breadth of the seizure under the warrant to search, Mr. King
and his company were in effect punished before they had their day in court.
[36] Instead of getting that search warrant, the RCMP could have simply charged
Mr. King and his company with selling an allegedly illegal decoding card to Cst.
Plourde. If that charge had been laid, the legal and Charter issues could have
been dealt with by the courts before Mr. King and his company were punished by
the extensive seizure.
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...
[38] In this case if at any time the police and the Minister of Communications
feel that some specific part of Mr. King's business should be stopped, the
Minister may apply for an injunction under s. 10(4) of the Radiocommunication
Act. A hearing would then have been held in court, before any sanctions might
have been imposed.
[39] Such careful, specific and proportional steps were not taken. Instead, to try
and enforce "grey law" against "grey market" parts of Mr. King's business, the
RCMP raided him. They seized what Mr. King calls "all of my company's
records, computers, other equipment and materials, bank records and client lists
with respect to the operation of my business". This raises "proportionality", a test
of validity of government action. Lamer C.J. said the:
... test involves balancing a number of factors to determine whether the means
chosen by the government are proportional to its objective. As Dickson C.J.
stated in Edward Books and Art Ltd. [[1986] 2 S.C.R. 573]] at p. 768:
Second, the means chosen to attain those objectives must be proportional
or appropriate to the ends. The proportionality requirement, in turn,
normally has three aspects: the limiting measures must be carefully
designed, or rationally connected, to the objective; they must impair the
right as little as possible; and their effects must not severely trench on
individual or group rights that the legislative objective, albeit important, is
nevertheless outweighed by the abridgement of rights.
Irwin Toy v. Quebec, [1989] 1 S.C.R. 927, at p. 991.
228 The New Brunswick Court of Appeal overruled McLellan J.'s decision. (See R. v. King,
[1997] N.B.J. No. 106 (C.A.)). However, the Court's rationale for overruling his McLellan J.'s
decision was founded on matters of practice. In other words, the plaintiff's application for relief was
based on Rule 69 of the New Brunswick Rules of Court and the two remedies that were sought were
in the nature of certiorari and prohibition. At para. 7 of the Court of Appeal's decision it observed
that the application, in substance, was an application to quash the search warrant because of a
"jurisdictional error." The Court then said, "The respondents made no allegation of deliberate or
reckless falsehood, intentional withholding of evidence, fraud or other deceptive conduct on the part
of Constable P. Nor did the respondents argue that Judge Brien lacked the power or jurisdiction to
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issue warrants to search, or that the search was unreasonable because of the volume of the items
seized."
229 The Court of Appeal then went on to find that the plaintiff had failed to establish any
jurisdictional error on the part of the issuing judge and noted that no Charter violation was alleged
or raised in the application. At para. 11 the Court said:
Judges must resist the temptation to raise new issues, particularly those that are
determinative, without giving the parties an opportunity to respond. In this case,
not only did the Judge not give the parties an opportunity to respond to the
Charter issues that he raised for the first time in his decision, and upon which he
decided the application, but he failed to consider the ground upon which the
application was based.
230 Accordingly, while the motion judge's decision was overruled, his comments with respect to
Charter issues are, nevertheless, consistent with the state of the law and helpful in the determination
of the case at bar. R. v. Branton, supra, of course, observes that the remedy for overseizure of goods
is a civil action for damages.
231 The Ontario Court of Appeal in R. v. Paul Magder Furs Ltd., [1989] 49 C.C.C. (3d) 267
(C.A.), at paras. 31, 33 and 34 stated as follows:
In order to prevail (i.e., where discrimination is alleged against the police) there
must be proof of more than mere conscious exercise of some selectivity in
enforcement. To prove discriminatory enforcement, the state action must be
shown to contain an element of intentional or purposeful discrimination.
...
The mere fact of discrimination in the prosecution of some cases and some
defendants is not itself improper. For the selectivity to be constitutionally
impermissible, it must fail on both of two standards. First, there must be a
showing that others in the same or similar position, or bearing the same or similar
characteristics, have not been prosecuted or have not been prosecuted in the same
or similar manner. Second, the standard upon which the discrimination is based
must itself be impermissible. ...
Discretion is an essential feature of the criminal justice system. A system that
attempted to eliminate discretion would be unworkably complex and rigid. Police
necessarily exercise discretion in deciding when to lay charges, to arrest and to
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conduct incidental searches, as prosecutors do in deciding whether or not to
withdraw a charge, enter a stay, consent to an adjournment, proceed by way of
indictment or summary conviction, launch an appeal and so on.
232 If there is non-disclosure or misleading information in the Information in support of the
application for a search warrant and it, the non-disclosure or misleading information, was for some
improper motive or was intended to mislead the justice of the peace, that non-disclosure or
misleading information standing alone may invalidate the warrant despite the presence of
reasonable and probable grounds to issue the warrant. (See R. v. Colbourne, 2001 CarswellOnt 3337
(C.A.)). The process of prior authorization is very important for the prevention of unreasonable
searches. It is not a mere formality. (See R. v. Feeney, [1997] 2 S.C.R. 13). "The prior authorization
process, however, is quite fragile. When the police attend before a justice of the peace, no one, for
obvious reasons, is there as an advocate of the interest of the target of the search. The justice of the
peace will usually not be a lawyer or a judge. The circumstances under which the warrant is sought
may be urgent and the process, of necessity, quite informal. This simply demonstrates that the
process depends on two things: the honesty, good faith and diligence of the police when they gather
and present their grounds for consideration and the independence and caution of the justice of the
peace deciding whether to authorize the proposed search." (See R. v. Morris (1998), 134 C.C.C.
(3d) 539 (N.S.C.A.)).
233 Section 24(1) of the Charter provides that, "Anyone whose rights or freedoms, as guaranteed
by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to
obtain such remedy as the court considers appropriate and just in the circumstances." The Supreme
Court of Canada in Nelles v. Ontario, [1989] 2 S.C.R. 170 stated that remedies under s. 24(1) of the
Charter must be just and appropriate. Lamer C.J. said at para. 50:
The question arises then, whether s. 24(1) of the Charter confers a right to an
individual to seek a remedy from a competent court. In my view it does. When a
person can demonstrate that one of his Charter rights has been infringed, access
to a court of competent jurisdiction to seek a remedy is essential for the
vindication of a constitutional wrong. To create a right without a remedy is
antithetical to one of the purposes of the Charter which surely is to allow courts
to fashion remedies when constitutional infringements occur. Whether or not a
common law or statutory rule can constitutionally have the effect of excluding
the courts from granting the just and appropriate remedy, their most meaningful
function under the Charter, does not have to be decided in this appeal. It is, in
any case, clear that such a result is undesirable and provides a compelling
underlying reason for finding that the common law itself does not mandate
absolute immunity.
234 The Supreme Court of Canada elaborated on this concept in R. v. 974649 Ontario Inc.,
[2001] 3 S.C.R. 575 as follows:
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[18] First, s. 24(1), like all Charter provisions, commands a broad and purposive
interpretation. This section forms a vital part of the Charter, and must be
construed generously, in a manner that best ensures the attainment of its objects:
R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295, at p. 344; Hunter v. Southam
Inc., [1984] 2 S.C.R. 145, at p. 155; Canadian National Railway Co. v. Canada
(Canadian Human Rights Commission), [1987] 1 S.C.R. 1114, at p. 1134.
Moreover, it is remedial, and hence benefits from the general rule of statutory
interpretation that accords remedial statutes a "large and liberal" interpretation:
British Columbia Development Corp. v. Friedmann, [1984] 2 S.C.R. 447, at p.
458; Toronto Area Transit Operating Authority v. Dell Holdings Ltd., [1997] 1
S.C.R. 32, at para. 21. Finally, and most importantly, the language of this
provision appears to confer the widest possible discretion on a court to craft
remedies for violations of Charter rights. In Mills, McIntyre J. observed at p. 965
that "[i]t is difficult to imagine language which could give the court a wider and
less fettered discretion". This broad remedial mandate for s. 24(1) should not be
frustrated by a "[n]arrow and technical" reading of the provision (see Law
Society of Upper Canada v. Skapinker, [1984] 1 S.C.R. 357, at p. 366).
[19] The second proposition flows from the first: s. 24 must be interpreted in a
way that achieves its [page587] purpose of upholding Charter rights by providing
effective remedies for their breach. If the Court's past decisions concerning s.
24(1) can be reduced to a single theme, it is that s. 24(1) must be interpreted in a
manner that provides a full, effective and meaningful remedy for Charter
violations: Mills, supra, at pp. 881-82 (per Lamer J.), p. 953 (per McIntyre J.);
Mooring, supra, at paras. 50-52 (per Major J.). As Lamer J. observed in Mills, s.
24(1) "establishes the right to a remedy as the foundation stone for the effective
enforcement of Charter rights" (p. 881). Through the provision of an enforcement
mechanism, s. 24(1) "above all else ensures that the Charter will be a vibrant and
vigorous instrument for the protection of the rights and freedoms of Canadians"
(p. 881).
[20] Section 24(1)'s interpretation necessarily resonates across all Charter rights,
since a right, no matter how expansive in theory, is only as meaningful as the
remedy provided for its breach. From the outset, this Court has characterized the
purpose of s. 24(1) as the provision of a "direct remedy" (Mills, supra, p. 953, per
McIntyre J.). As Lamer J. stated in Mills, "[a] remedy must be easily available
and constitutional rights should not be 'smothered in procedural delays and
difficulties'" (p. 882). Anything less would undermine the role of s. 24(1) as a
cornerstone upon which the rights and freedoms guaranteed by the Charter are
founded, and a critical means by which they are realized and preserved.
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235 There is considerable judicial authority for the proposition that a court may award damages
for breach of Charter rights. See, for instance, RJR-MacDonald Inc. v. Canada (Attorney General),
[1994] 1 S.C.R. 311. The Court in RJR-MacDonald, supra noted that, to that time, no court had yet
developed the principles which should govern an award of damages under s. 24(1) of the Charter.
However, in Doucet-Boudreau v. Nova Scotia (Minister of Education), [2003] 3 S.C.R. 3, the
Supreme Court of Canada did, indeed, establish relevant principles. The Court noted that, "The
requirement of a generous and expansive interpretive approach holds equally true for Charter
remedies as for Charter rights." (See para. 24.) At para. 25, the Court said,
Purposive interpretation means that remedies provisions must be interpreted in a
way that provides "a full, effective and meaningful remedy for Charter
violations" since "a right, no matter how expansive in theory, is only as
meaningful as the remedy provided for its breach" (Dunedin, supra, at paras.
19-20). A purposive approach to remedies in a Charter context gives modern
vitality to the ancient maxim ubi jus, ibi remedium: where there is a right, there
must be a remedy. More specifically, a purposive approach to remedies requires
at least two things. First, the purpose of the right being protected must be
promoted: courts must craft responsive remedies. Second, the purpose of the
remedies provision must be promoted: courts must craft effective remedies.
236
Commencing at para. 52 of the decision, the Supreme Court of Canada said:
What, then, is meant in s. 24(1) by the words "appropriate and just in the
circumstances"? Clearly, the task of giving these words meaning in particular
cases will fall to the courts ordering the remedies since s. 24(1) specifies that the
remedy should be such as the court considers appropriate and just. Deciding on
an appropriate and just remedy in particular circumstances calls on the judge to
exercise a discretion based on his or her careful perception of the nature of the
right and of the infringement, the facts of the case, and the application of the
relevant legal principles. Once again, we emphasize McIntyre J.'s words in Mills,
supra, at p. 965:
It is difficult to imagine language which could give the court a wider and
less fettered discretion. It is impossible to reduce this wide discretion to
some sort of binding formula for general application in all cases, and it is
not for appellate courts to pre-empt or cut down this wide discretion.
With respect, the approach to s. 24 reflected in the reasons of LeBel and
Deschamps JJ. would tend to pre-empt and reduce this wide discretion. Their
approach would also, in this case, pre-empt and devalue the constitutional
Page 73
promise respecting language rights in s. 23. In our view, judicial restraint and
metaphors such as "dialogue" must not be elevated to the level of strict
constitutional rules to which the words of s. 24 can be subordinated. The
[page37] same may be said of common law procedural principles such as functus
officio which may to some extent be incorporated in statutes. Rather, as LeBel
and Deschamps JJ. appear to recognize at paras. 135 and following, there are
situations in which our Constitution requires special remedies to secure the very
order it envisages.
While it would be unwise at this point to attempt to define, in detail, the words
"appropriate and just" or to draw a rigid distinction between the two terms, there
are some broad considerations that judges should bear in mind when evaluating
the appropriateness and justice of a potential remedy. These general principles
may be informed by jurisprudence relating to remedies outside the Charter
context, such as cases discussing the doctrine of functus and overly vague
remedies, although, as we have said, that jurisprudence does not apply strictly to
orders made under s. 24(1).
First, an appropriate and just remedy in the circumstances of a Charter claim is
one that meaningfully vindicates the rights and freedoms of the claimants.
Naturally, this will take account of the nature of the right that has been violated
and the situation of the claimant. A meaningful remedy must be relevant to the
experience of the claimant and must address the circumstances in which the right
was infringed or denied. An ineffective remedy, or one which was "smothered in
procedural delays and difficulties", is not a meaningful vindication of the right
and therefore not appropriate and just (see Dunedin, supra, at para. 20,
McLachlin C.J. citing Mills, supra, at p. 882, per Lamer J. (as he then was)).
Second, an appropriate and just remedy must employ means that are legitimate
within the framework of our constitutional democracy. As discussed above, a
court ordering a Charter remedy must strive to respect the relationships with and
separation of functions among the legislature, the [page38] executive and the
judiciary. This is not to say that there is a bright line separating these functions in
all cases. A remedy may be appropriate and just notwithstanding that it might
touch on functions that are principally assigned to the executive. The essential
point is that the courts must not, in making orders under s. 24(1), depart unduly
or unnecessarily from their role of adjudicating disputes and granting remedies
that address the matter of those disputes.
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Third, an appropriate and just remedy is a judicial one which vindicates the right
while invoking the function and powers of a court. It will not be appropriate for a
court to leap into the kinds of decisions and functions for which its design and
expertise are manifestly unsuited. The capacities and competence of courts can
be inferred, in part, from the tasks with which they are normally charged and for
which they have developed procedures and precedent.
Fourth, an appropriate and just remedy is one that, after ensuring that the right of
the claimant is fully vindicated, is also fair to the party against whom the order is
made. The remedy should not impose substantial hardships that are unrelated to
securing the right.
Finally, it must be remembered that s. 24 is part of a constitutional scheme for
the vindication of fundamental rights and freedoms enshrined in the Charter. As
such, s. 24, because of its broad language and the myriad of roles it may play in
cases, should be allowed to evolve to meet the challenges and circumstances of
those cases. That evolution may require novel and creative features when
compared to traditional and historical remedial practice because tradition and
history cannot be barriers to what reasoned and compelling notions of
appropriate and just remedies demand. In short, the judicial approach to remedies
must remain flexible and responsive to the needs of a given case.
237 An award of damages under s. 24(1) of the Charter should not be made unless there is proof
of wilfulness or mala fides by the government actor. See Hawley v. Bapoo, 2007 CarswellOnt 4355
(C.A.). In Hawley, supra the Court was concerned with whether or not an award of damages was
appropriate for a breach of s. 7 of the Charter. The Court of Appeal said at paras. 8-9:
The trial judge went on to hold that mala fides or wilfulness to breach the
Charter were not essential prerequisites to awarding damages as a remedy under
s. 24(1). Subsequent to the release of the trial judge's reasons, this court delivered
judgment in Ferri v. Root, [2007] O.J. No. 397 (Ont. C.A.). At para. 108,
LaForme J.A., writing for the majority, held that liability for a constitutional tort
under s. 7 of the Charter requires proof of wilfulness or mala fides. He said the
following:
Liability for a constitutional tort, such as under ss. 6 and 7 of the Charter as
claimed here by Ferri and Mammoliti, requires wilfulness or mala fides in the
creation of a risk or course of conduct that leads to damages. Proof of simple
negligence is not sufficient for an award of damages in an action under the
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Charter: McGillivary v. New Brunswick (1994), 116 D.L.R. (4th) 104 at 108
(N.B.C.A.), leave to appeal refused, [1994] S.C.C.A. No. 408.
Juriansz J.A., who dissented on other points, concurred with the majority on the
need for mala fides or wilfulness as a prerequisite for an award of damages for a
constitutional tort under the Charter (para. 167).
238 However, proof of actual financial loss is not necessary. The Federal Court of Appeal in
Dulude v. Canada, [2000] F.C.J. No. 1454 (C.A.), in a false imprisonment case, said:
[17] As I have already mentioned, the trial judge concluded that the appellant had
not submitted evidence of the material damage he claimed to have suffered.
There is nothing in the evidence or in the appellant's oral or written submissions
to allow this Court to intervene in this finding of fact.
[18] However, the appellant's constitutional rights were infringed and, under s.
24 of the Charter, he is entitled to a just and appropriate remedy in the
circumstances. As the harm results from illegal acts (unlawful imprisonment and
assault), the existence of damages is not a prerequisite for obtaining
compensation: see A. Linden, Canadian Tort Law, 3d ed. 1985, Butterworths and
Co. (Canada) Ltd., at pp. 44 and 45; G.H.L. Fridman, Torts, Waterlow
Publishers, London, 1990, at pp. 124 and 125. Though unintentional and not
from malice, the infringement is nonetheless serious and unjustified. The
appellant faced the system unaided, without financial resources, and represented
himself in this Court. It is quite apparent that the establishment and legal
vindication of his constitutional rights was a source of anxiety, anguish and
frustration for himself and his family. The respondent's defensive attitude only
increased his feeling of injustice and persecution. The appellant claimed
damages, including punitive and exemplary damages. I do not feel that he should
be awarded punitive and exemplary damages, but I believe that financial
compensation for the moral injury sustained is the proper remedy in the
circumstances. It only remains to determine the nature and extent of this.
239 The Federal Court, in Delude, supra, reviewed some then current precedents with respect to
quantum and awarded $10,000 "in moral damages." At para. 29, the Court held:
Since the case at bar arose in Ontario, I should add that the position there is no
different: see Davidson v. Toronto Blue Jays Baseball Ltd., [1999] O.J. No. 692
(O.C.J.), in which a jury awarded a person unlawfully arrested and subjected to
the use of force and detention general damages totalling $35,000, aggravated
damages of $50,000 and punitive damages of $125,000; Miller v. Stewart, [1991]
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O.J. No. 2238 (O.C.J.), in which general damages for unlawful arrest, unlawful
detention and assault were assessed at $10,000; Cunningham v. Welsh, [1984]
O.J. No. 939 (O.S.C.), where the victim who suffered partial permanent disability
in one arm as the result of excessive force used by police officers, received
$25,003 in general damages.
240 In Kent Roach, Constitutional Remedies in Canada, (Aurora: Canada Law Book, 2006), the
author has the following to say about exemplary or punitive damages awards under the Charter:
Exemplary or punitive damages will have a role to play under the Charter. Courts
have long recognized that punitive damages may be appropriate if rights are
deprived with malice or in a flagrantly unconstitutional manner...The purpose of
punitive damages is to respond to cases in which there was no reason why the
Charter should not have been respected and to provide incentives to respect it in
the future.
241 The Supreme Court of Canada in Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595 at para.
36 had the following to say with respect to punitive damages:
Punitive damages are awarded against a defendant in exceptional cases for
"malicious, oppressive and high-handed" misconduct that "offends the court's
sense of decency": Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R.
1130, at para. 196. The test thus limits the award to misconduct that represents a
marked departure from ordinary standards of decent behaviour. Because their
objective is to punish the defendant rather than compensate a plaintiff (whose
just compensation will already have been assessed), punitive damages straddle
the frontier between civil law (compensation) and criminal law (punishment).
242
At paras. 94 and 95 of the decision, the Court went on to say:
To this end, not only should the pleadings of punitive damages be more rigorous
in the future [page645] than in the past (see para. 87 above), but it would be
helpful if the trial judge's charge to the jury included words to convey an
understanding of the following points, even at the risk of some repetition for
emphasis. (1) Punitive damages are very much the exception rather than the rule,
(2) imposed only if there has been high-handed, malicious, arbitrary or highly
reprehensible misconduct that departs to a marked degree from ordinary
standards of decent behaviour. (3) Where they are awarded, punitive damages
should be assessed in an amount reasonably proportionate to such factors as the
harm caused, the degree of the misconduct, the relative vulnerability of the
plaintiff and any advantage or profit gained by the defendant, (4) having regard
to any other fines or penalties suffered by the defendant for the misconduct in
question. (5) Punitive damages are generally given only where the misconduct
Page 77
would otherwise be unpunished or where other penalties are or are likely to be
inadequate to achieve the objectives of retribution, deterrence and denunciation.
(6) Their purpose is not to compensate the plaintiff, but (7) to give a defendant
his or her just desert (retribution), to deter the defendant and others from similar
misconduct in the future (deterrence), and to mark the community's collective
condemnation (denunciation) of what has happened. (8) Punitive damages are
awarded only where compensatory damages, which to some extent are punitive,
are insufficient to accomplish these objectives, and (9) they are given in an
amount that is no greater than necessary to rationally accomplish their purpose.
(10) While normally the state would be the recipient of any fine or penalty for
misconduct, the plaintiff will keep punitive damages as a "windfall" in addition
to compensatory damages. (11) Judges and juries in our system have usually
found that moderate awards of punitive damages, which inevitably carry a stigma
in the broader community, are generally sufficient.
These particular expressions are not, of course, obligatory. What is essential in a
particular case will be a function of its particular circumstances, the [page646]
need to emphasize the nature, scope and exceptional nature of the remedy, and
fairness to both sides.
243 Later, commencing at para. 112, the Court set out some of the relevant criteria that should be
considered in making such awards. The judge, in making his/her assessment, must consider whether
the award is proportionate to the blameworthiness of the defendant's conduct; the degree of
vulnerability of the plaintiff; the proportion to the harm or potential harm directed specifically at the
plaintiff; other penalties both civil and criminal which have been or are likely to be inflicted on the
defendant for the same misconduct; and, the advantage wrongfully gained by a defendant from the
misconduct.
244
Counsel for the plaintiff argues that s. 24(2) of the Charter is relevant. It provides as follows:
Where, in proceedings under subsection (1), a court concludes that evidence was
obtained in a manner that infringed or denied any rights or freedoms guaranteed
by this Charter, the evidence shall be excluded if it is established that, having
regard to all the circumstances, the admission of it in the proceedings would
bring the administration of justice into disrepute.
245 Section 24(2), obviously, is concerned with conduct might bring the administration of justice
into disrepute. At para. 51 of the Supreme Court of Canada's decision in R. v. Greffe, [1990] 1
S.C.R. 755, the majority of the Court said:
I say this in full recognition of the fact that the evidence recovered was real
evidence that existed irrespective of the Charter violations, and whose admission
Page 78
therefore would not negatively affect the adjudicative fairness of the appellant's
trial. It must be recalled, however, that in addition to the consideration of a fair
trial, the Court must also consider whether by admitting the evidence it would be
condoning unacceptable conduct by the police. It is in that context that I now turn
to a consideration of the third set of factors, namely the effect of exclusion as
opposed to admission of the evidence. There is no doubt that what is at issue in
this case is a serious offence, indeed a serious social evil, the possession and
importation of drugs. Further, there is no doubt that but for the exclusion of the
evidence, the appellant would be convicted of the counts against him. It must not
be forgotten, however, that the inquiry under s. 24(2) cannot be focussed solely
on the specific prosecution at issue; it is the long-term consequences of regular
admission or exclusion of this type of evidence on the repute of the
administration of justice which must be considered. As the Chief Justice noted in
Genest, supra, at p. 82:
While the purpose of the rule is not to allow an accused to escape
conviction, neither should it be interpreted as available only in those cases
where it has no effect at all on the result of the trial. The consideration
whether to exclude evidence should not be so closely tied to the ultimate
result in a particular case.
In balancing the long-term consequences of regularly admitting the evidence in
this case in the light of how it was obtained against the consequences of
excluding it, I conclude that the balance [page798] tips in favour of exclusion.
The administration of our system of justice will be brought into greater disrepute
if this Court were to condone, taking the record as it is given to us by the police
and the prosecution, the practice of using an arrest for traffic warrants as an
artifice to conduct a rectal exam of an accused who the police do not have
reasonable and probable grounds to believe is carrying drugs. In fact, even if
reasonable and probable grounds existed, support for which was not established
by the Crown, there is still the admission by the Crown that the police
deliberately failed to provide the appellant with the proper reason for the arrest,
thereby infringing his rights under s. 10(a) of the Charter. The Crown refers to
this as "foolish" and a "blunder", but in fact, it amounts to the police deliberately
misleading the appellant and using that deception as an artifice to conduct a
highly invasive rectal search. Whatever the motives for this deception, it can only
lead to an inference of extreme bad faith on the part of the police in that they
wilfully circumvented the Charter, a factor which further supports the exclusion
of the evidence in this case. This is especially so when what is involved is a
violation of the right to counsel as well as a violation of the right to be secure
Page 79
against unreasonable searches. It would be easy, but at the same time very
dangerous, to allow the knowledge that the appellant must have had in respect of
his possession of the drugs, to influence this Court's assessment of whether the
evidence should be excluded. To do so would be to import an ex post facto chain
of reasoning that finds no place in an inquiry pursuant to s. 24(2) of the Charter.
246 The Supreme Court of Canada also dealt with this issue in R. v Collins, [1987] 1 S.C.R. 265.
At para. 49, the Court said:
There are other factors which are relevant to the seriousness of the Charter
violation and thus to the disrepute that will result from judicial acceptance of
evidence obtained through that violation. As Le Dain J. wrote in Therens at p.
652:
The relative seriousness of the constitutional violation has been assessed in
the light of whether it was committed in good faith, or was inadvertent or
of a merely technical nature, or whether it was deliberate, wilful or
flagrant. Another relevant consideration is whether the action which
constituted the constitutional violation was motivated by urgency or
necessity to prevent the loss or destruction of the evidence.
I should add that the availability of other investigatory techniques and the fact
that the evidence could have been obtained without the violation of the Charter
tend to render the Charter violation more serious. We are considering the actual
conduct of the authorities and the evidence must not be admitted on the basis that
they could have proceeded otherwise and obtained the evidence properly. In fact,
their failure to proceed properly when that option was open to them tends to
indicate a blatant disregard for the Charter, which is a factor supporting the
exclusion of the evidence.
247 The Ontario Court of Appeal said the following with respect to this issue in R. v. Clayton,
2005 CarswellOnt 1061 at para. 94:
Where, as in this case, constitutional violations reflect an institutional
indifference to, if not disregard for, individual rights, judicial failure to
disassociate itself from that conduct must have long-term negative consequences
for the proper administration of justice. The courts cannot be seen to at one and
the same time wave a judicial finger of disapproval at police conduct that violates
individual rights while embracing the evidentiary product of those violations
whenever they do not undermine trial fairness.
Page 80
248 The Supreme Court of Canada overruled the Ontario Court of Appeal in R. v. Clayton (see
2007 CarswellOnt 4268). However, at para. 129 of its decision, the Supreme Court said:
As stated, Doherty J.A. made an important point about the potential contribution
of inadequate training to excessive police conduct. A Charter violation caused by
systemic failure would raise greater concerns for the administration of justice
than an isolated act of a single misguided police officer. However, given my
conclusion that the roadblock (i.e., detention) was valid, I do not think the
adequacy of police training emerges as a s. 24(2) consideration in this case.
249 The defendants, as observed above, rely on the defence of ex turpi causa non oritur actio.
McLachlin J. (as she then was), in Hall v. Hebert, 1993 CarswellBC 92, in para. 2, set out the
question for the Court's determination as follows:
This case is one of great importance. The Court is asked to rule on the question
of whether and, if so, in what circumstances and under what doctrinal rubric
courts may prevent a plaintiff from recovering compensation in tort for loss
suffered by the fault of another on the ground that the plaintiff's conduct violated
legal or moral rules.
250 McLachlin J. disagreed with the reasons of Cory J. and set out her own view at para. 5 as
follows:
My own view is that courts should be allowed to bar recovery in tort on the
ground of the plaintiff's immoral or illegal conduct only in very limited
circumstances. The basis of this power, as I see it, lies in duty of the courts to
preserve the integrity of the legal system, and is exercisable only where this
concern is in issue. This concern is in issue where a damage award in a civil suit
would, in effect, allow a person to profit from illegal or wrongful conduct, or
would permit an evasion or rebate of a penalty prescribed by the criminal law.
The idea common to these instances is that the law refuses to give by its right
hand what it takes away by its left hand. It follows from this that, as a general
rule, the ex turpi causa principle will not operate in tort to deny damages for
personal injury, since tort suits will generally be based on a claim for
compensation, and will not seek damages as profit for illegal or immoral acts. As
to the form the power should take, I see little utility and considerable difficulty in
saying that the issue must be dealt with as part of the duty of care. Finally, I see
no harm in using the traditional label of ex turpi [page170] causa non oritur actio,
so long as the conditions that govern its use are made clear.
251 The defence, therefore, is a very limited one. In order for the court to bar recovery in a tort
claim, the court must find that the plaintiff was engaged in activity that was immoral or illegal. In
my view, the morality or illegality of the conduct must be determined in the context of when the
Page 81
activity took place. In other words, the immorality or illegality of the plaintiff's conduct must not be
considered with the benefit of hindsight. At para. 11 of her decision, McLachlin J. said:
One situation in which there seems to be a clear role for the doctrine is the case
where to allow the plaintiff's tort claim would be to permit the plaintiff to profit
from his or her wrong. It is important at the outset to define what is meant by
profit. As the cases illustrate, what is meant is profit in the narrow sense of a
direct pecuniary reward for an act of wrongdoing.
252
At para. 17 of her decision she said:
The narrow principle illustrated by the foregoing examples of accepted
application of the maxim of ex turpi causa non oritur actio in tort, is that a
plaintiff will not be allowed to profit from his or her wrongdoing. This
explanation, while accurate as far as it goes, may not, however, explain fully why
courts have rejected claims in these cases. Indeed, it may have the undesirable
effect of tempting judges to focus on the issue of whether the plaintiff is "getting
something" out of the tort, thus carrying the maxim into the area of compensatory
damages where its use has proved so controversial, and has defeated just claims
for compensation. A more satisfactory explanation for these cases, I would
venture, is that to allow recovery in these cases would be to allow recovery for
what is illegal. It would put the courts in the position of saying that the same
conduct is both legal, in the sense of being capable of rectification by the court,
and illegal. It would, in short, introduce an inconsistency in the law. It is
particularly important in this context that we bear in mind that the law must
aspire to be a unified institution, the parts of which -- contract, tort, the criminal
law -- must be in essential harmony. For the courts to punish conduct with the
one hand while rewarding it with the other, would be to "create an intolerable
fissure in the law's conceptually seamless web": Weinrib, supra, at p. 42. We thus
see that the concern, put at its most fundamental, is with the integrity of the legal
system.
253
As well, at para. 40 she said:
The doctrine of ex turpi causa non oritur actio properly applies in tort where it
will be necessary to invoke the doctrine in order to maintain the internal
consistency of the law. Most commonly, this concern will arise where a given
plaintiff genuinely seeks to profit from his or her illegal conduct, or where the
claimed compensation would amount to an evasion of a criminal sanction. ...
254 In Mandzuk v. Vierira, [1993] B.C.J. No. 1476 (S.C.) McLachlin J., as she then was, listed
the conditions to the application of the doctrine of ex turpi cause non oritur actio. C. Bruce J. in
Watts v. Klaemt, 2007 CarswellBC 1000 (S.C.) summarized these as follows:
Page 82
(1)
(2)
(3)
The plaintiff must have been engaged in a course of conduct or intended course
of conduct which was clearly reprehensible, typically in breach of the Criminal
Code of Canada.
There must be some connection (not necessarily direct causative) between the
criminal activity and the loss or injury.
The foregoing requirements, while necessary, are not alone sufficient to justify
application of the doctrine of ex turpi causa. The court must in addition be
satisfied that the offence is sufficiently reprehensible and its connection with the
injury sufficiently close that he [the plaintiff] should be disentitled to the
assistance of a court of law.
255 Bruce J. also notes in this decision that, in the Hall decision, McLachlin J. reasoned that the
onus of proof with respect to the application of ex turpi causa non oritur actio rests with the
defendant.
256 Rothstein J. in the recent Supreme Court of Canada decision in British Columbia v.
Zastowny, [2008] 1 S.C.R. 27 summarized the doctrine of ex turpi causa non oritur actio as follows
at para. 20:
The question is, "under what circumstances should the immoral or criminal
conduct of a plaintiff bar the plaintiff from recovering damages to which he or
she would otherwise be entitled" (p. 169). The following principles and approach
are established in Hall v. Hebert and are applicable in the present case.
1.
2.
3.
Application of the ex turpi doctrine in the tort context invalidates otherwise
valid and enforceable actions in tort,
Therefore, its application must be based on a firm doctrinal foundation and
be made subject to clear limits and should occur "in very limited
circumstances".
The only justification for its application is the preservation of the integrity
of the legal system. This concern is only in issue where a damage award in
a civil suit would allow a person to profit from illegal or wrongful conduct
or would permit evasion or rebate of a penalty prescribed by the criminal
law.
It would, in short, introduce an inconsistency in the law. It is
particularly important in this context that we bear in mind that
the law must aspire to be a unified institution, the parts of
which -- contract, tort, the criminal law -- must be in essential
harmony. For the courts to punish conduct with one hand
Page 83
while rewarding it with the other, would be to "create an
intolerable fissure in the law's conceptually seamless web":
Weinrib, supra, at p. 42. We thus see that the concern, put at
its most fundamental, is with the integrity of the legal system.
4.
The ex turpi doctrine generally does not preclude an award of damages in tort
because such awards tend to compensate the plaintiff rather than amount to
"profit":
Such damages accomplish nothing more than to put the plaintiff in
the position he or she would have been in had the tort not occurred ...
[A plaintiff should get] only the value of, or a substitute for, the
injuries he or she has suffered by the fault of another. He or she gets
nothing for or by reason of the fact he or she was engaged in illegal
conduct.
5.
6.
The ex turpi doctrine is a defence in a tort action. The plaintiff's illegal conduct
does not give rise to a judicial discretion to negate or refuse to consider the duty
of care which goes to the relationship between a plaintiff and a defendant. It is
independent of that relationship. The defendant may have caused harm by acting
wrongly or negligently, but the "responsibility for this wrong is suspended only
because concern for the integrity of the legal system trumps the concern that the
defendant be responsible".
Treating the ex turpi doctrine as a defence places the onus on the defendant to
prove the illegal or immoral conduct that precludes the plaintiff's action. And as a
defence, it allows for segregation between claims for personal injury and claims
that would constitute profit from illegal or immoral conduct or the evasion of or a
rebate of a penalty provided by the criminal law.
257 In the case of federal laws that are enforced in the Provincial Courts, there is ... the
possibility that a holding of invalidity in one province might not be followed in another province.
The general rule is that the courts of one province are not bound by decisions of the courts of
another province. This rule applies to the interpretation of federal laws: (Wolf v. The Queen [1975]
2 S.C.R. 107; so that the same law can have different meanings in different provinces - until the
Supreme Court of Canada rules on the issue. (Peter Hogg, Constitutional Law of Canada,
(Carswell, Toronto, 4th ed. Loose-leaf)).
258 The Supreme Court of Canada has advanced a high threshold of liability for actions against
the police. Good faith discharge of the duty of the police is a defence to an action for damages
Page 84
under s. 24(1) of the Charter. See Proulx v. Quebec (Attorney General), [2001] 3 S.C.R. 9 and see
also the Ontario Court of Appeal's decision in Euteneier v. Lee, [2005] O.J. No. 3896 (C.A.) where,
at para. 77, Cronk J. said:
In the end, therefore, the trial judge conducted a discrete assessment of
Euteneier's Charter claims, found that the conduct of the appellants was
reasonable and in accordance with approved police policy and practice, and held
that the police exhibited no malice or bad faith. Furthermore, there was no
showing by Euteneier that the applicable police policy and practice were
themselves unreasonable, negligent, otherwise fell below the standard of care to
which the appellants were bound, or that any real alternative measures were
available to the police given Euteneier's conduct. These factors would preclude
an award of damages to Euteneier even if it could be said, contrary to the trial
judge's findings, that her Charter rights were breached.
259 See also the decision of Gates J. in Tucker v. Canada (Attorney General) [2006] O.J. No.
3756 where, at para. 75, Gates J. said:
However a Charter breach does not per se give rise to damages under s. 24(1).
Rather, the Plaintiffs' must establish that there was malice or ill will.
The April 6, 2006 Interlocutory Decision of Hackland J.
260 Hackland J. heard an interlocutory motion in this action that arose out of objections made on
the examination for discovery of one or more of the then named individual defendants. As I
understand it, counsel for the plaintiffs was seeking to obtain information about the meeting held in
October 1998 referred to above with the intent of obtaining evidence to show that the state of the
case law under the Act and the impact knowledge of the uncertainty of the law would have on the
defendants' good faith defence to the allegation of abuse of public authority. The objection was
taken on the basis of solicitor-client privilege. At paras. 4 to 7 of his decision, Hackland J. said:
The plaintiffs decoded encrypted programming signals emanating from the
United States, as part of their business which was carried on in Ottawa. When the
investigation of the plaintiffs took place in November of 1998, there was some
conflict in the case law as to whether this activity constituted an offence under
section 9(1)(c) of the Broadcasting Act. This uncertainty continued until
December of 2002 when the Supreme Court of Canada decided that indeed such
an offence existed, in Bell express Vu Limited Partnership v. Rex, [2002] S.C.J.
No. 43. Justice Iacobucci commented at paragraph 24 of that decision, "This
appeal, therefore, places this Court in a position to harmonize the interpretive
dissonance that is echoing throughout Canada." In June 2001 the charges against
the plaintiffs were stayed by the Attorney General of Canada in light of a
decision of the Ontario Court of Appeal, R. v. Branton, [2001] O.J. No. 1443,
Page 85
which held that in regard to this type of activity, no offence was made out under
section 9(1)(c) of the Broadcasting Act. The charges were not revived within the
permissible one-year period when the Branton decision was overruled in Bell
express Vu. The plaintiffs have therefore benefited from the interpretive
resonance in not having to answer the charges on the merits.
One component of the evidence of alleged bad faith on the part of the
investigators is said to be that in obtaining the search warrants in November 1998
and in subsequent search warrant applications, the investigators did not advise
the justices of the peace concerned of the conflicting case law on the subject of
whether section 9(1)(c) of the Broadcasting Act created an offence. When the
search warrants were applied for and subsequently issued, there were no Ontario
decisions on point. The Federal Court of Appeal in a civil case had held that
there was such an offence, see Express Vu Inc. v. NII Norsat International Inc.,
[1997] F.C.J. No. 1563 and there were several conflicting trial level decisions in
other Canadian provinces. As noted, the issue was finally resolved, four years
later, in the Supreme Court of Canada's decision in Bell express Vu, in favour of
there being such an offence.
The plaintiffs submit that a central matter at issue in this litigation is whether the
RCMP were aware that "the actions of the plaintiffs did not constitute an offence
at the time that the investigation was occurring and that the law was ambiguous".
In my opinion, that statement is fundamentally wrong. At all material times the
law has been that decoding encrypted programming signals emanating from the
United States contravenes section 9(1)(c) of the Broadcasting Act. That was
decided by the Supreme Court of Canada in Bell express Vu in 2002. That
decision authoritatively decided what the correct interpretation of the law was,
notwithstanding conflicting lower court decisions that were overruled by the
Supreme Court. In particular, when the search warrants were applied for in
November 1998 the investigators represented to the justice of the peace that
section 9(1)(c) of the Act disclosed an offence. This was accurate and legally
correct. There can be no legal doubt or issue in this action that the plaintiffs
admitted activities "constituted an offence at the time the investigation was
occurring ...". In my opinion, the question of what the state of the law was on this
point, at the time of the investigation, is essentially a question of law. It is a
question that has been conclusively answered by our highest court. The factual
question of what relevant decisions were in existence is answered by the simple
act of looking up these decisions and ascertaining the date of their issuance. I
agree with the defendants' submission that the state of the law is an
incontrovertible question of law.
Page 86
Before attempting to ascertain whether there has been a waiver of the defendants'
solicitor-client privilege with respect to legal advice given by Mr. Friesen of the
Justice Department, the question should be asked as to whether the legal advice
he may have given is relevant in the sense of probative of some issue in the
action. In my opinion, Mr. Friesen's view of the state of the case law is not
probative of any issue. It may be argued that the advice he gave the investigators
goes to the issue of whether they had a good faith belief, when the charges were
laid, that section 9(1)(c) of the Act constituted an offence. In my respectful
opinion, the assertion by the investigators, when applying for the relevant search
warrants, that section 9(1)(c) of the Act discloses an offence and the later
authoritative ruling of the Supreme Court of Canada in Bell express Vu holding
that this is legally correct, eliminates this as a live issue in the case. A legally
correct representation in a search warrant application cannot constitute evidence
of bad faith. It is therefore not relevant to inquire of a Crown lawyer as to what
advice he gave as to the state of the case law on the point in question. Even if the
plaintiffs wish to advance the doubtful proposition that conflicting case law in
other jurisdictions must be brought to the attention of a justice of the peace in a
search warrant application, I am still unable to appreciate the relevance of what a
Crown lawyer has opined on the state of the case law. This is particularly so in a
case such as this where the advice was given at a meeting where, on the
evidence, there was a general review of legal issues surrounding section 9 of the
Broadcasting Act, but no discussion of the particular case involving the plaintiffs,
the investigation of which had not begun.
261 I must respectfully disagree with my brother Hackland J. In my opinion, Corporal Noreau, in
these peculiar circumstances, was under a clear duty to provide the justices of the peace with a full
and fair comment on the existence of the conflict because he and the RCMP knew that there were
many people operating businesses on the understanding that the law was uncertain and that indeed
there were judicial determinations that what they were doing was not unlawful. While it
subsequently turned out that the Act did, indeed, create an offence, it was not, in November 1998,
even remotely correct to state in the information that, "that section clearly provides an absolute
prohibition against the decoding of encrypted subscription program signals unless they emanate
from a lawful distributor in Canada and that distributor authorizes their decoding." The justice of
the peace was being asked at that time to exercise her discretion based on information that was
clearly misleading. While I have no trouble with Hackland J.'s finding that "[A] legally correct
representation in a search warrant application cannot constitute evidence of bad faith," the
representation at the relevant time was not "legally correct." My task as the trial judge is to examine
the conduct of the parties at the relevant times.
262
I note the first sentence of para. 6 quoted above - i.e., that a central issue was whether the
Page 87
RCMP were aware that the actions of the plaintiffs did not constitute an offence at the time that the
investigation was occurring and that the law was ambiguous. At trial, as aforesaid, the evidence
clearly established that the defendants were aware of the conflicting jurisprudence. The issue as
Hackland J. framed it is not the same issue requiring a decision by me at this time. Indeed, I agree
with Hackland J. that, given the Supreme Court of Canada decision in 2002, the actions of the
plaintiffs did constitute an offence under the Act. However, Hackland J.'s decision does not deal
with the questions I must determine with respect to whether the plaintiffs, at the relevant time, acted
immorally or illegally to their knowledge or, put another way, whether they were acting in a
conscious attempt to profit from illegal or wrongful conduct. In my opinion, wrongdoing on the part
of the plaintiffs in the context of the defence of ex turpi causa non oritur actio cannot be considered
as wrongful conduct where the plaintiffs had obtained legal advice to the effect that the law was
uncertain and that their activities may or may not be illegal or wrongful. As noted above, the
defence of ex turpi causa non oritur actio should be used only in the clearest of cases. In my view,
the facts in this case do not constitute a clear case giving rise to the imposition of the application of
this defence. The moral turpitude that is required has simply not been made out. The plaintiffs did
not act consciously and deliberately in contravention of the law. To use the words of McLachlin J.
in Mandzuk quoted in Watts, supra, the plaintiffs were not "engaged in a course of conduct or
intended course of conduct which was clearly reprehensible, typically in breach of the Criminal
Code of Canada."
263 When the plaintiffs conducted their business, they were not aware that decoding encrypted
programming signals emanating from the United States contravened the Act. Yes, indeed, the
Supreme Court of Canada's decision had a retroactive effect. However, it cannot be retroactive in
determining whether the defence of ex turpi causa non oritur actio applies. In other words, the
plaintiffs' actions were, in hindsight, unlawful; however, their information and understanding at the
time was that the business may not have been an unlawful one. Indeed, they took a chance.
However, once again, taking a chance is a significantly different thing than deliberately engaging in
a course of conduct which was clearly reprehensible, immoral, or unlawful.
264 I agree with Hackland J.'s reasoning that whether the activities conducted by the plaintiffs
were contrary to the Act is essentially a question of law. However, that conclusion does not impact
on whether the defence of ex turpi causa non oritur actio applies. The application of this defence to
the case at bar would be, in my opinion, perverse.
Final Conclusions
265 Based on the foregoing facts and applicable legal principles, and in addition to the
conclusions already expressed, I draw the following additional conclusions:
(a)
The conduct of Corporal Noreau cannot be considered in a vacuum. In other
words, the role played by him is just one part of a larger picture. In my opinion,
his conduct was the result of encouragement from his superiors and was
Page 88
(b)
(c)
(d)
(e)
(f)
condoned by his superiors.
The plaintiffs' Charter right to be secure against unreasonable search and seizure
was infringed by the RCMP and Corporal Noreau. The plaintiffs' privacy rights
were infringed and, in addition, their property rights were infringed as a
consequence of the manner in which the search warrants were obtained and the
manner in which they were executed. The justices of the peace who authorized
the issuance of the search warrants were probably misled by the information
supplied in support of the applications for the search warrants. Accordingly, the
justices of the peace were denied the opportunity to exercise an informed
discretion as to whether the search warrants should have been issued and the
terms upon which they were granted. The requirement of "prior authorization"
(see Southam Inc. supra) was not met and, as a result, both the issuance of the
warrants and their execution were irregular.
Corporal Noreau and the RCMP knew, or should have known, that their conduct
would result in a termination of the plaintiffs' business. While the termination of
a wrongdoers' business might inevitably be the result of a search and seizure and
the subsequent laying of criminal charges, there are cases, such as this, where,
given the uncertainty of the law, special or alternative circumstances should have
been, but were not, considered. In particular, the police could have, but did not,
seek injunctive relief under the Radiocommunication Act; they could have been
more selective in what they seized; they could have proceeded by way of test
case in the sense spelled out in Miles of Music Ltd., supra, referred to earlier in
these reasons; or they could have adopted "such careful, specific and proportional
steps" as suggested by McLennan J.'s decision in King, supra.
In the circumstances, the defendants acted without good faith. Regardless of the
fact that they may have believed that their interpretation of the law was the
correct one, it was a fundamental and important fact that courts across this
country were experiencing great difficulty in their attempts to interpret and apply
the relevant law. The defendants cannot hide behind the principle that it is not for
them or for the justices of the peace to consider the relevant jurisprudence. In this
case, the defendants knew that the law was uncertain and, therefore, that it was
not clear. Nevertheless, they misled the justices of the peace into believing that
the law was clear.
I agree with the reasoning in the Branton decision, which is applicable to the case
at bar by way of analogy, where the court said "This is not to say that the police
authorities are required to know every decided case on point, but when an affiant
cites two favourable cases and deliberately omits a case against his interest which
is contained in the precedent which he is copying, then the logical inference is
the disclosure is one-sided and designed to persuade the reviewing Justice to see
matters his way."
In the circumstances of this case, the "business as usual" policy was not an
Page 89
(g)
(h)
(i)
(j)
(k)
(l)
appropriate one. Enforcement of the relevant statutes, given the judicial
uncertainty, should have been conducted with caution and restraint, not with
blinders.
Subsequent clarification of the law by the Supreme Court of Canada does not
vitiate the misleading nature of the applications for the search warrants. The good
faith, or lack of good faith, of the defendants must be considered
contemporaneously with the conduct. In my view, the misleading of the justices
of the peace was not simply the result of over-zealous conduct but, rather, there
was a deliberate failure to present a full and fair picture to the justices. The
misleading was a strategic omission of a fundamental relevant and important
fact.
In the circumstances, it is not necessary for me to draw a firm conclusion that the
justices of the peace were actually misled and might have acted differently had
full disclosure been made. In my view, I need find only that the result of their
deliberations might have been different had full disclosure been made, a finding
which I make.
While, in ordinary circumstances, the police may be justified in enforcing the law
in order to "make an example" or in the enforcement of the law, to furnish a "test
case", such conduct, in these circumstances, was not acceptable. It was not
proportionate to the circumstances.
The fact that the defendants were under a duty to investigate and enforce the laws
of this country does not excuse them from their responsibility to make full and
fair disclosure when seeking the issuance of the search warrants. The defendants'
argument that it was reasonable for the defendants to rely on the only appellate
court decision in place at the relevant time is not convincing - it was, in my
opinion, not a reasonable position to adopt.
Section 25(1) of the Criminal Code which justifies police officers "in doing what
he is required or authorized to do" does not apply since this section applies only
where the police officer acts on reasonable grounds. In this case, the grounds
were not reasonable. Similarly, s. 25(2) of the Criminal Code does not furnish
the defendants with a defence with respect to the execution of the search warrants
because, as I have found, the police officers did not act in good faith. The
conduct of the defendants fails to comply with the decision of Dickson C.J. in
Edward Books and Art Ltd., supra, i.e., "... the means chosen to attain those
objectives must be proportional or appropriate to the ends. The proportionality
requirement, in turn, normally has three aspects: the limiting measures must be
carefully designed, or rationally connected, to the objective; they must impair the
right as little as possible; and their effects must not severely trench on individual
or group rights that the legislative objective, albeit important, is nevertheless
outweighed by the abridgement of rights."
In the circumstances, I find that the search and seizure and subsequent laying of
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charges against the plaintiffs were discriminatory and excessive. The press
conferences, in particular, were excessive.
The defendants' conduct lacks not only good faith but was, indeed, malicious.
The defendants were motivated by a desire to cause maximum embarrassment to
the plaintiffs including an attempt to put them out of business.
I expressly reject the defendants' submission that this is a case "about a man [Mr.
Lahaie] who thought the law did not apply to him." Rather, this is a case about
defendants who thought the law did not apply to them.
I reject as not convincing the Crown's argument that, if the offending portions of
the information filed in support of the applications for the search warrants are
removed, there is still enough information to support the issuance of the
warrants. In my opinion, the Crown's argument misses the point - i.e., that there
was a positive duty on the police officers to inform the justices of the peace of
the unique situation concerning the status of the law. Even if the offending parts
of the information are removed, there would still be finding of lack of good faith.
The judicial uncertainty with respect to the law was, as aforesaid, a crucial piece
of evidence requiring consideration by the justices of the peace in these unusual
circumstances. I adopt the following words of Romilly J. in R. v. Maton, 2005
CarswellBC 733 (S.C.) at para. 51 "In the case at bar, I am of the view that the
justice of the peace could have issued the warrant on the basis of what was left
after the misleading portions of the affidavit was excised. I have to remind
myself, however, that the purpose of the prior authorization process is to prevent
unreasonable searches, not to condemn them after the fact. It is my duty to
protect the prior authorization process. To uphold the warrant in this case would
amount to a dereliction of that duty. I am satisfied that the lack of candour by the
affiant in the case at bar was so subversive of the prior authorization process that
the resulting warrant must be set aside to protect the process and the preventive
function it serves." The defendants in the case at bar should have included in
their information a clear statement of the judicial uncertainty.
I observe again that good faith reliance on legal advice was not advanced as a
defence in this proceeding.
The RCMP policy of "business as usual" continued even after the Ontario Court
of Appeal decision in Branton. Accordingly, reliance on the Federal Court of
Appeal decision does not satisfactorily explain or justify the defendants' conduct.
I do agree with Crown counsel that Corporal Noreau and the RCMP believed that
there was a reasonable prospect of conviction when seeking the search warrants;
however, that does not excuse the overstating of their case to the justices of the
peace.
The burdens of proof and persuasion with respect to the application of the
defence of ex turpi causa non oritur actio rests with the plaintiffs and has not
been satisfied. The conduct of the defendants upon which the defendants rely
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does not meet the test established by the Supreme Court of Canada establishing
that the conduct complained of must be "clearly reprehensible." In any event, the
damages that I intend to award in this proceeding are not compensatory
pecuniary damages but, rather, damages for infringement of the plaintiffs' s. 8
Charter right. Accordingly, the plaintiffs will not be the recipients of profits from
illegal or wrongful conduct. My judgment does not compensate them for the loss
of their business. The bottom line, as I understand the facts of this case, is that
the plaintiffs knew that there were questions regarding whether their operations
were legal or illegal but did not knowingly act in a manner that was either
immoral or illegal. Yes, they did take a chance; however, taking a chance does
not give rise to the application of the defence of ex turpi causa non oritur actio.
The plaintiffs were not deliberately attempting to profit from illegal or wrongful
conduct. In reaching this conclusion I am not unaware of the existence of some
subterfuge and warnings concerning illegality; however, in my opinion, in the
circumstances of this matter, these facts do not warrant the application of this
defence especially given the fact that this defence is to be used only in clear
cases. This is not a clear case. As pointed out earlier, it is my opinion that the
morality and legality of the plaintiffs' conduct must be examined in the context of
when the activity took place. Hindsight is not good enough.
The defendants argued that the Court should take into consideration in
determining damages the fact that the plaintiffs assumed a risk. Counsel argued
that if damages were awarded, they should be reduced accordingly. I disagree.
The plaintiffs did not assume a risk that the defendants would mislead a justice of
the peace nor did they take a risk that the execution of search warrants would be
unreasonable. In other words, the risks that were assumed do not relate to the
conduct of the defendants which gives rise to an award of damages - i.e., a
breach of the plaintiffs' Charter rights.
It is my opinion that the wrongful conduct of the defendants must be
compensated by an award of damages pursuant to s. 24 of the Charter. The
measure of these damages should not simply be an attempt to equate them to an
amount equal to or approximating the actual losses incurred by the plaintiffs.
Rather, the quantum should be in accordance with the principles set out earlier in
these Reasons for Decision. The remedy for a Charter violation should be "full,
effective and meaningful" or, to use the words of s. 24(1) it should be
"appropriate and just in the circumstances". It is my opinion that an appropriate
and just award in these circumstances is an award of damages in the amount of
$100,000.
I believe that the amount of $100,000 "meaningfully vindicates the rights and
freedoms of the plaintiffs". I do not consider an award of $100,000 to be unfair to
the defendants given the wilfulness and significance of their conduct. It is not
unreasonable, in my opinion, to expect law enforcement persons and agencies to
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refrain from over-zealous enforcement of the law. The wrongful conduct here
was serious and unjustified.
I decline, however, to also make an award of exemplary or punitive damages in
addition to the aforesaid award of $100,000. In R. v. Clayton, supra, the Supreme
Court of Canada approved of the comments of Doherty J.A. of the Ontario Court
of Appeal where he noted that a Charter violation caused by systemic failure
would raise greater concerns for the administration of justice than an isolated act
of a single misguided police officer.
In reaching my decision to fix the damages at $100,000 I have also taken into
account that s. 8 of the Charter creates fundamental and important rights, rights
which must receive a broad and purposive interpretation and, violation of these
rights by the police must result in an award of meaningful and effective
remedies. A grant of declaratory relief only, or of nominal or minimum damages,
will not adequately reflect the serious nature of the Charter violations in this
case.
Judgment
266 In the result, therefore, a judgment shall issue requiring the Attorney General of Canada and
Jean-Louis Noreau to forthwith pay to the plaintiffs damages fixed at $100,000 together with
pre-judgment interest on that amount from April 1, 2002 at the rate of 2.3 percent in accordance
with s. 129 of the Courts of Justice Act, R.S.O. 1990, c. C-43 as well as post-judgment interest from
the date of this judgment at the rate of 5 percent on the amount of $100,000 plus pre-judgment
interest.
Costs
267 In the event that within 60 days following the release of these Reasons for Decision the
parties have been unable to conclude an agreement on legal costs, they may make brief written
submissions to me. The plaintiffs' submissions should be delivered first, followed within 21 days by
the submissions of the defendants, after which the plaintiffs shall have, if required, 10 days for the
filing of brief reply submissions.
D.J. POWER J.
cp/e/qllqs/qlmxb