Appellant, a crown witness in a prosecution against a person charged under the Income Tax Act, refused to testify about his knowledge relating to specific customers and transactions of the Royal Bank in the Bahamas because s. 10 of the Bahamian Banks and Trust Companies Regulation Act, 1965, as amended, makes it a summary conviction offence punishable by a fine or a term of imprisonment to reveal such knowledge. Appellant, a resident and citizen of Canada, acquired this knowledge while he was manager of the main Freeport Branch in the Bahamas. He has not returned there since 1974. The Provincial Court ordered the appellant to testify but the order was quashed by a judge of the Supreme Court of Ontario. On appeal, the Court of Appeal restored the Provincial Court judge's order.
Held: The appeal should be dismissed.
Per Dickson C.J. and Beetz, McIntyre, Chouinard, Lamer, Wilson, Le Dain and La Forest JJ.: For the reasons given by the Court of Appeal, appellant is a compellable witness in Canada and must testify notwithstanding the Bahamian statute.
Furthermore, to compel appellant to testify does not constitute an infringement of s. 7 of the Canadian Charter of Rights and Freedoms which guarantees "everyone...the right to life, liberty and security of the person...." That section has no application in the present case. The infringement of liberty or security, if any, does not result from the operation of Canadian law, but solely from the operation of Bahamian law in the Bahamas. To allow the appellant to refuse to give evidence in the present circumstances would permit a foreign country to frustrate the administration of justice in this country in respect of a Canadian citizen in relation to what is essentially a domestic situation.
Per Estey J.: Canadian courts are not prevented from compelling a witness by the fact that giving the evidence sought may constitute a crime in another country. Our courts, however, should not lightly make orders which may result in a violation or an unnecessary circumvention of the laws or procedures of a friendly state. Here, a preferable alternative at trial would have been to grant a stay of proceedings to allow the appellant sufficient time to apply to a Bahamian court for an order permitting disclosure, which would exempt him from criminal liability under s. 10 of the Bahamian Banks and Trust Companies Regulation Act, 1965. If no such order had been sought or obtained within a reasonable time, our courts would have had no option but to compel the appellant to testify.
Cases Cited
Re Application of Chase Manhattan Bank, 297 F.2d 611 (1962); Hilton v. Guyot, 159 U.S. 113 (1895); Re International Bank of Washington, Supreme Court of the Bahamas, No. 38 of 1980; Re Nassau Bank and Trust Co., Supreme Court of the Bahamas, No. 95 of 1975, referred to.
Statutes and Regulations Cited
Banks and Trust Companies Regulation Act, 1965, Bahamas, No. 64 of 1965, s. 10 [am. No. 3 of 1980, s. 2].
Canadian Charter of Rights and Freedoms , s. 7 .
Income Tax Act, R.S.C. 1952, c. 148.
APPEAL from a judgment of the Ontario Court of Appeal (1983), 145 D.L.R. (3d) 344, 2 C.C.C. (3d) 526, setting aside a judgment of Montgomery J.1, quashing a decision of a Provincial Court judge ordering the appellant to testify. Appeal dismissed.
1 Summarized at (1982), 8 W.C.B. 111.
John Sopinka, Q.C., and Donald Houston, for the appellant.
Michael R. Dambrot, Mark L. Jewett and Robert W. Hubbard, for the respondent.
The judgment of Dickson C.J. and Beetz, McIntyre, Chouinard, Lamer, Wilson, Le Dain and La Forest JJ. was delivered by
1. La Forest J.‑‑In this case the Crown seeks to compel the appellant Mr. Spencer, who is a crown witness in a prosecution against one Robert McGregor for contravening the Income Tax Act, R.S.C. 1952, c. 148, as amended, to testify about his knowledge relating to specific customers and transactions of the Royal Bank in the Bahamas. Mr. Spencer, who is a resident and citizen of Canada, acquired this knowledge while he was a manager of the main Freeport Branch in the Bahamas where, subject to certain exceptions, s. 10 of the Bahamian Banks and Trust Companies Regulation Act, 1965, as amended, makes it a summary conviction offence punishable by a fine not exceeding $15,000 or a term of imprisonment not exceeding two years, or by both, to reveal such knowledge.
2. His Honour Judge Parker of the Ontario Provincial Court, who heard the case, ordered that Mr. Spencer must testify notwithstanding the Bahamian statute, but this order was quashed by Montgomery J. of the Supreme Court of Ontario. On appeal to the Ontario Court of Appeal (1983), 145 D.L.R. (3d) 344, 2 C.C.C. (3d) 526, that court set aside Montgomery J.'s judgment and restored the order of Judge Parker. In its view, the public and the courts have a right to Mr. Spencer's evidence whether or not the giving of this evidence constituted a crime in the Bahamas. I agree with this conclusion substantially for the reasons given by MacKinnon, A.C.J.O. Under these circumstances it becomes unnecessary to consider whether or not the Bahamian statute had extra‑territorial effect.
3. In this Court counsel for Mr. Spencer raised, though somewhat feebly, an argument not dealt with by the Ontario Court of Appeal, namely, that compelling Mr. Spencer either to breach Bahamian law or be found in contempt for not testifying constitutes an infringement of s. 7 of the Canadian Charter of Rights and Freedoms , which guarantees that everyone has a right not to be deprived of life, liberty or security of the person. This provision, he argued, afforded Mr. Spencer a protection similar to that given by the Fifth Amendment to the Constitution of the United States.
4. This argument raises the interesting question whether the Charter applies to a result flowing from the interplay of a common law principle (as opposed to a federal or provincial statute) and a foreign statute. I do not, however, find it necessary to comment on this point because, assuming the application of the Charter to common law principles, I do not think Mr. Spencer can successfully rely on s. 7. The Canadian law in no way deprives him of his liberty or security. To the extent that these may be interfered with, it is the foreign law that does so. Nor does the operation of the Canadian law substantially put him in jeopardy of prosecution under the law of the Bahamas, where he has not returned since 1974. Only if he decides to go there will he be in jeopardy of prosecution.
5. The infringement of Mr. Spencer's liberty or security, if any, does not result from the operation of Canadian law, but solely from the operation of Bahamian law in the Bahamas. Under these circumstances the Charter has no application. To allow Mr. Spencer to refuse to give evidence in the circumstances of this case would permit a foreign country to frustrate the administration of justice in this country in respect of a Canadian citizen in relation to what is essentially a domestic situation. Indeed such an approach could have serious repercussions on the operation of Canadian law generally.
6. I would dismiss the appeal.
The following are the reasons delivered by
7. Estey J.‑‑I am in respectful agreement with the law as expressed in the judgment of La Forest J. and the disposition there proposed. The fact that the giving of the evidence sought in this case may constitute a crime in another country cannot prevent the Canadian courts from compelling a witness to testify. However, the threat arising in a foreign jurisdiction of criminal proceedings against a Canadian resident for revealing information in a Canadian judicial proceeding is a serious consideration to be borne in mind in a proceeding such as this. Thus any course by which such a serious consequence may be avoided must be carefully considered by our courts. In these proceedings it is therefore relevant to take note of the fact that under Bahamian law an appropriate order releasing the appellant may be obtained from a Bahamian court. Section 10 of the Banks and Trust Companies Regulation Act, 1965, as amended, provides:
10.‑‑(1) No person who has acquired information in his capacity as
(a) director, officer, employee or agent of any licensee or former licensee;
...
shall, without the express or implied consent of the customer concerned, disclose to any person any such information relating to the identity, assets, liabilities, transactions, accounts of a customer of a licensee or relating to any application by any person under the provisions of this Act, as the case may be, except‑‑
...
(iii) when a licensee is lawfully required to make disclosure by any court of competent jurisdiction within The Bahamas, or under the provisions of any law of The Bahamas.
...
(3) Every person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence against this Act and shall be liable on summary conviction to a fine not exceeding fifteen thousand dollars or to a term of imprisonment not exceeding two years or to both such fine and imprisonment.
8. This Bahamian legislation was passed in order to ensure that the Bahamas remained an attractive location for foreign banks and other financial institutions. According to the Bahamian Chief Justice, "the secrecy provisions is one of the pillars of this part of our economic structure, the destruction of which would lead to the collapse of the whole structure which it supports" (Re Nassau Bank and Trust Co., Supreme Court of the Bahamas, No. 95 of 1975, unreported). The provisions are of equal importance to the Canadian and other foreign companies doing business in the Bahamas. In this context, international comity dictates that Canadian courts should not lightly disregard the Bahamian provisions by requiring the appellant in this case to testify. " `Comity' in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws": Hilton v. Guyot, 159 U.S. 113 (1895), at pp. 163‑64.
9. It therefore would have been a preferable alternative at the trial level to have granted a stay of these proceedings so as to allow the appellant sufficient time to make application to a Bahamian court of competent jurisdiction for an order permitting disclosure of the evidence sought to be compelled. Such an order was asked for and granted in the case of Re International Bank of Washington, Supreme Court of the Bahamas, No. 38 of 1980, unreported, in circumstances substantially similar to those existing in this case, and in Re Application of Chase Manhattan Bank, 297 F.2d 611 (2nd Cir. 1962), a subpoena duces tecum was modified to permit application to be made to the appropriate Panamanian authorities for permission to disclose information covered by Panama's secrecy provisions. Moore J. spoke at p. 613 in the latter case of the "obligation to respect the laws of other sovereign states even though they may differ in economic and legal philosophy from our own. As we recently said ... `upon fundamental principles of international comity, our courts dedicated to the enforcement of our laws should not take such action as may cause a violation of the laws of a friendly neighbor, or, at the least, any unnecessary circumvention of its procedures'."
10. If an authorizing order had not been sought or obtained within a reasonable time, the Canadian courts would have had no option, having regard to the subject matter of these proceedings, but to proceed in the manner indicated by the Ontario Court of Appeal below.
Appeal dismissed.
Solicitors for the appellant: Stikeman, Elliott, Toronto.
Solicitor for the respondent: Roger Tassé, Ottawa.
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