The risk of self-incrimination in cross-border disputes: The case of Canadian criminal proceedings and U.S. civil litigation

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One scenario in which the jeopardy to the privilege against self-incrimination may arise is when an individual is facing criminal or regulatory proceedings in Canada at the same time as the individual is engaged in civil litigation in the United States (U.S.).

King v. Drabinsky, 2008 ONCA 566, is one example.  The defendants were officers and director of Livent, an Ontario corporation that operated in both Canada and the U.S., who faced criminal prosecution in both the U.S. and Canada on the basis that they were alleged to have made material misrepresentations in financial information filed with securities regulators.  The defendants were Ontario residents and chose not to appear in the U.S. criminal proceedings; the Canadian criminal proceedings had not yet gone to trial.  Shareholders of Livent had brought a class action in the U.S. against the defendants, who relied upon the U.S. Constitution’s Fifth Amendment and refused to answer questions at depositions, as a result of which the U.S. Court granted judgment against them.  The plaintiffs then brought a motion in Ontario to have the U.S. judgment enforced.  In response, the defendants argued that their Charter rights had been violated because they were unable to testify in the U.S. class action due to the risk that their testimony would be used against them in the ongoing Canadian criminal proceedings.

The Ontario Court of Appeal rejected the defendants’ Charter argument for several reasons.

Firstly, the Court concluded that Charter principles are to be considered at the time the evidence is sought to be used against an accused, which is at trial, not at the time it is taken outside the jurisdiction.  The Court found that section 13 of the Charter would likely protect the defendants during the Canadian criminal trial from the use of incriminatory statements made by them in the U.S. class action.  In particular, the defendants would be permitted to seek an exclusion of their U.S. deposition evidence under section 7 of the Charter or under the trial judge’s residual discretion to exclude evidence to ensure a fair trial.

Secondly, the Court noted that evidence given by the accused persons voluntarily during depositions would likely be exculpatory, not incriminatory; only incriminating evidence is protected by section 13 of the Charter.

Thirdly, the Court balanced the principles of order and fairness articulated by the Supreme Court of Canada in a 2003 decision, Beals v. Saldanha, and concluded that the U.S. judgment would not operate unfairly in the circumstances.  The Court emphasized that the U.S. class action had been brought against Canadian citizens doing business in both the U.S. and Canada.

As a result, any defendant in the same situation is in the unenviable position of having to make the tactical decision of whether to be deposed in the U.S. to avoid a judgment that could bankrupt him or her or to testify and hope that a Canadian court will not admit the evidence as part of its discretion to ensure a fair trial.

 

Topics:  Canada, Criminal Prosecution, Cross-Border, Self-Incrimination

Published In: Civil Procedure Updates, Constitutional Law Updates, Criminal Law Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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