For many years, there has been a growing concern in Alberta and elsewhere as to what might happen when the subject of a compelled examination under Alberta securities law faces potential scrutiny in other jurisdictions; can the results of those compelled interviews be shared with other jurisdictions? Even at the risk of potential violations of the subject’s rights against self-incrimination?
The Court of Appeal recently held (in Beaudette v Alberta (Securities Commission), 2016 ABCA 9) that the Alberta Securities Commission (ASC) may share compelled testimony of witnesses with other Canadian and foreign authorities, and that such sharing does not violate Charter rights against self-incrimination.
Scott Beaudette was the CEO and sole employee of Sunpeak Ventures Inc, a company subject to investigation by the ASC. An Investigation Order under section 42 of the Securities Act, RSA 2000, c S-4 compelled Beaudette to give evidence under oath and to produce all documents under his control to the ASC. The Securities Act requires a witness to answer questions put to them, even when those answers may result in the witness giving self-incriminating evidence. Beaudette refused to comply, and the ASC brought an application under section 197 of the Securities Act to force compliance with the previous order and hold him in contempt of court.
Beaudette was concerned that section 42 of the Securities Act compelled him to give potentially self-incriminating evidence, while section 46 allowed his evidence to be shared with other regulatory and law enforcement agencies in Canada and abroad. He argued that the combined effect of these provisions was a violation of his Charter rights, including his section 7 rights to life, liberty and security of the person, and his section 13 right against self-incrimination. Beaudette contended that the ASC was working in cooperation with not only other provincial securities authorities, but also with American police authorities to support or facilitate an American criminal prosecution. A justice of the Court of Queen’s Bench rejected Beaudette’s arguments.
Sharing Self-Incriminating Evidence with Foreign Authorities
The Court of Appeal upheld the Court of Queen’s Bench decision and found that the combination of sections 42 and 46 did not violate the appellant’s Charter rights. The Court was skeptical of a potential breach of Charter rights, and noted that a potential future breach and allegation of possible foreign state actions is not proof that those events are likely to happen. There must be a clear implication that rights would be violated for the rights to be implicated.
Immunity from the use of self-incriminating evidence in subsequent proceedings is recognized in Canada to prevent such evidence from being used in the criminal law context. However, the Court noted that whether the principle of self-incrimination has truly been brought into play is a fact-specific exercise; not all compelled evidence in front of a regulatory body will constitute a destruction of the right against self-incrimination.
The Court pointed to the importance of Canadian securities regulators and found that even though securities legislation allows for the investigation of offences committed both in Canada and elsewhere, the ASC has a legitimate regulatory purpose and is not in service of the criminal law.
The Court held that section 42 and the Securities Act as a whole “strike a balance between the privilege against self-incrimination and the principle that relevant evidence should be available in a search for the truth” (at para 42). Even though evidence could potentially be used in American proceedings, Canadian courts are not authorized by the Charter to evaluate or control the investigative and judicial processes of a friendly foreign rule of law democracy.
This decision is cold comfort to those compelled to appear before the ASC. This type of information sharing has long been of concern to those representing witnesses at compelled interviews. The ability of the ASC to share incriminating statements with American or other authorities is often a boon to those foreign authorities, who may never have been able to get such information without the ASC’s assistance. This is particularly the case with American authorities who, if they attempted to question the same witness directly, would likely be met with objections on the basis of the Fifth Amendment. In other words, the ASC may be able to provide those foreign authorities with evidence that the foreign authority could never have obtained by itself.
Any witnesses who have concerns about the cross-border use of evidence compelled by the ASC would be well-served to consult carefully with counsel about how best to maximize the possible protections available.