Consider the following scenario.

You stand accused in a criminal proceeding under the Competition Act. Email evidence is central to the Crown’s case against you. Under sections of the Competition Act, you are presumed to have read and approved everything that is in your email inbox, as well as the email inboxes of your employees and co-workers, including attachments.

It could be argued that this presumption of knowledge on your part contravenes the onus of proof that lies at the heart of Canada’s justice system – the presumption that you are innocent, until proven guilty.

In fact, Fasken Martineau Ottawa made that argument in one ongoing case, under the Canadian Charter of Rights and Freedoms, and scored a victory that promises to have a significant impact.

The case

On June 27, 2013, in the case of R. v. Durward, (2014 ONSC 4194), Madam Justice B.B. Warkentin of the Ontario Superior Court of Justice held that section 69(2) of the Competition Act violates sections 7 and 11(d) of the Canadian Charter of Rights and Freedoms when applied in criminal proceedings.

Section 69(2) of the Competition Act establishes the following presumptions:

  1. actions taken by an agent of a participant in a Competition Act proceeding are deemed to have been done, said or agreed to with the authority of that participant absent evidence to the contrary;
  2. records received or written by an agent of a participant are deemed to have been written or received with the authority of the participant absent evidence to the contrary; and,
  3. a record proven to be in the possession of a participant or on premises used or occupied by a participant or in the possession of an agent of a participant is prima facie proof that the participant had knowledge of the record and its contents, and that anything recorded in or by the record as having been done, said or agreed to by the participant or its agent was done, said or agreed to as recorded.

The Crown’s intent

The Crown was seeking to rely on section 69(2) in its prosecution of seven individuals and four organizations accused of criminal bid rigging, contrary to section 47 of the Competition Act, and conspiracy to bid rig, contrary to section 465 of theCriminal Code. At the trial, which began this month, the Crown is expected to rely on, as evidence, thousands of emails and other documents taken from computers seized from the business offices of the accused.

The challenge

Two of the accused challenged the constitutionality of section 69(2) on the grounds that the provision establishes a reverse onus. As a result of this reversal, an accused may be convicted, notwithstanding reasonable doubt of guilt, contrary to the presumption of innocence and the right to life, liberty and security of the person. The accused stressed that it was particularly troubling to presume that a person has read and approved everything in his or her email inbox as well as the email inboxes of employees and co-workers, including attachments.

The Crown’s rationale

The Crown argued that section 69(2) does not violate the Charter because the presumptions it contains are permissive and they are presumptions of fact, not presumptions that establish an element of a criminal offence. As the trier of fact (in this case, a jury) must weigh each record submitted and determine what it means with respect to any element of the offence, there is no reversal of the burden of proof. The Crown further argued that the presumptions in section 69(2) are similar to common law and statutory rules regarding the admissibility of business records, and that various circumstantial factors in competition law prosecutions support the trustworthiness of documents submitted under section 69.

Why the judge ruled in favour of the accused

In reasons issued July 15, 2014, Justice Warkentin held that section 69(2) establishes evidentiary and legal presumptions which reverse the onus of proof.

In reaching this conclusion, she agreed with the accused and their defence team that section 69(2) is directory, not permissive, and rejected the Crown’s contention that the provision is similar to rules governing the admissibility of business records. Justice Warkentin found that knowledge is an essential element of the offence of conspiracy. Accordingly, by requiring a judge and jury to accept that an accused has knowledge of records submitted by the Crown, the provision contravenes the presumption of innocence.

Justice Warkentin further held that in the context of a criminal proceeding, where loss of liberty and personal stigma may follow a guilty conviction, section 69(2) violates sections 7 and 11 (d) of the Charter. She also agreed with the accused and their defence team that there is no serious or pressing societal problem to justify the violations under section 1 of the Charter and, in the alternative, the objective is not proportionate to the jeopardy to an accused of the reverse onus.

Justice Warkentin concluded that section 69(2) is of no force and effect in a criminal proceeding. She was careful to note, however, that nothing in her decision prevents the use of section 69(2) in civil proceedings before the Competition Tribunal.