Held: The appeal should be dismissed.
The counts of fraud on which appellant stood charged could be properly prosecuted in Canada and nothing in the requirements of international comity dictated that Canada not exercise jurisdiction. The conspiracy count could be proceeded with as the fraudulent activities occurred in Canada.
In considering whether a criminal transaction falls outside territorial jurisdiction, account must be taken of all the relevant facts that took place in Canada giving this country an interest in prosecuting the offence and of whether or not anything in those facts offended against international comity. All that is necessary to make an offence subject to the jurisdiction of our courts is that a significant portion of the activities constituting that offence took place in Canada. It is sufficient that there be a "real and substantial link" between an offence and Canada. Sufficient activities preparatory to this fraudulent scheme occurred in Canada to warrant a court's holding that the offence took place in Canada: the scheme was devised here and the whole operation that made it function, including the directing minds and the telephone solicitation, was situated here. The fact that cases where the victims would be harmed outside the country would be caught made no difference. If an accused were prosecuted for the same offence in more than one country, any injustice could be obviated by the pleas of autrefois acquit or autrefois convict. No issue of comity was involved. The interests of other countries are not served by allowing criminals based in this country to prey on their citizens.
Cases Cited
R. v. Brixton Prison Governor, Ex parte Rush, [1969] 1 All E.R. 316; Re Chapman (1970), 5 C.C.C. 46; Board of Trade v. Owen, [1957] A.C. 602; Treacy v. Director of Public Prosecutions, [1971] A.C. 537; Director of Public Prosecutions v. Doot, [1973] A.C. 807, considered; R. v. Martin, [1956] 2 All E.R. 86; The Lotus (1927), P.C.I.J., Ser. A., No. 10; R. v. Keyn (1876), 2 Ex. D. 63; Macleod v. Attorney‑General for New South Wales, [1891] A.C. 455; R. v. Holmes (1883), 12 Q.B.D. 23; R. v. Jacobi and Hiller (1881), 46 L.T.R. 595n; R. v. Nillins (1884), 53 L.J.Q.B. (N.S.) M.C. 157; R. v. Godfrey, [1923] 1 K.B. 24; R. v. Peters (1886), 16 Q.B.D. 636; R. v. Ellis, [1899] 1 Q.B. 230; R. v. Stoddart (1909), 2 Cr. App. R. 217; R. v. Mackenzie and Higginson (1910), 6 Cr. App. R. 64; R. v. Robert Millar (Contractors) Ltd.; R. v. Millar, [1970] 2 Q.B. 54; R. v. Baxter, [1972] 1 Q.B. 1; R. v. Lyle (1924), 18 Cr. App. R. 59; R. v. Cox, [1968] 1 All E.R. 410; R. v. Harden, [1962] 1 All E.R. 286; Athanassiadis v. Government of Greece, [1969] 3 All E.R. 293; R. v. Tirado (1974), 59 Cr. App. R. 80; R. v. Governor of Pentonville Prison, Ex parte Khubchandani (1980), 71 Cr. App. R. 241; R. v. Wall, [1974] 1 W.L.R. 930; Secretary of State for Trade v. Markus, [1976] A.C. 35; Croft v. Dunphy, [1933] A.C. 156; R. v. Blythe (1895), 1 C.C.C. 263; Re Gertie Johnson (1904), 8 C.C.C. 243; R. v. Wettman (1894), 1 C.C.C. 287; R. v. Walkem (1908), 14 C.C.C. 122; In Re Criminal Code Sections Relating to Bigamy (1897), 27 S.C.R. 461; United States of America v. Novick (1960), 128 C.C.C. 319; R. v. Bachrack (1913), 21 C.C.C. 257; Ecrement v. Cusson and Connolly (1919), 33 C.C.C. 135, aff'd. (1920), 30 Que. K.B. 55; Shulman v. The King (1946), 2 C.R. 153; Re Brisbois (1962), 133 C.C.C. 188; Re Devlin, [1964] 3 C.C.C. 228; Re Hanes and The Queen (1982), 69 C.C.C. (2d) 420; R. v. Selkirk, [1965] 2 C.C.C. 353; R. v. Trudel, Ex parte Horbas and Myhaluk, [1969] 3 C.C.C. 95; R. v. W. McKenzie Securities Ltd., [1966] 4 C.C.C. 29; R. v. Olan, [1978] 2 S.C.R. 1175; Burrows v. Jemino (1726), 2 Strange 733, 93 E.R. 815; R. v. Roche (1775), 1 Leach 134, 168 E.R. 169; R. v. Azzopardi (1843), 2 Mood. 288, 169 E.R. 115; R. v. Aughet (1918), 13 Cr. App. R. 101; Bolduc v. Attorney General of Quebec, [1982] 1 S.C.R. 573, referred to.
Statutes and Regulations Cited
Bankruptcy Act, 1883 (U.K.), 46 & 47 Vict., c. 52.
Crimes Act 1961, 1961 (N.Z.), No. 43, s. 7.
Criminal Code, R.S.C. 1970, c. C‑34, ss. 5(2), 423(1)(d), (3).
Fugitive Offenders Act 1967, 1967 (U.K.), c. 68.
Securities Act, R.S.M. 1954, c. 237.
Statute of Westminster, 1931, R.S.C. 1970, App. II, No. 26.
Authors Cited
American Law Institute. Model Penal Code (Proposed Official Draft), Philadelphia, American Law Institute, 1962.
Canada. Law Reform Commission of Canada. Extraterritorial Jurisdiction (Working Paper 37), Ottawa, Minister of Supply and Services, 1984.
Canada. Law Reform Commission of Canada. Our Criminal Law (Report 3), Ottawa, Minister of Supply and Services, 1979.
England. The Law Commission. Report on the Territorial and Extraterritorial Extent of the Criminal Law (Law Com. 91), in Law Commission Reports, collected edition (unabridged), Abington, Oxford, Professional Books Ltd., 1978.
Hall, Lynden. " ‘Territorial’ Jurisdiction and the Criminal Law," [1972] Crim. L.R. 276, 276‑287.
Williams, Glanville. "Venue and the Ambit of Criminal Law" (1965), 81 L.Q.R. 276, 276‑288, 395‑421, 518‑538.
Williams, Sharon A. and J.‑G. Castel. Canadian Criminal Law, International and Transnational Aspects, Toronto, Butterworths, 1981.
APPEAL from a judgment of the Ontario Court of Appeal (1984), 8 C.C.C. (3d) 351n, dismissing an appeal from a judgment of Osler J. (1983), 6 C.C.C. (3d) 284, dismissing an application to quash the committal order for trial made by Kerr P.C.J. Appeal dismissed.
Symon Zucker, for the appellant.
John Pearson, for the respondent.
The judgment of the Court was delivered by
1. La Forest J.‑‑The appellant, Murray A. Libman, was committed for trial on seven counts of fraud and one count of conspiracy to commit fraud. Some of the activities on which these charges are based occurred outside Canada, and the accused sought, by motion, to have the committal quashed on the ground that the alleged offences occurred outside Canada, but the motion was refused. An appeal to the Ontario Court of Appeal was dismissed. Mr. Libman then sought and was granted leave to appeal to this Court.
Facts
2. The parties agreed to the following facts for the purposes of this appeal.
3. During the period covered by the informations, Mr. Libman operated a telephone sales solicitation room (or "boiler room") at 43 Menin Road in Toronto, where a number of individuals were employed as telephone sales personnel. Pursuant to Mr. Libman's directions the sales personnel telephoned United States residents and attempted to induce them to purchase shares in two companies, Hebilla Mining Corporation and Claravella Corporation, which purported to be engaged in gold mining in Costa Rica. In addition to the telephone representations, the United States residents also received promotional material which was mailed from Panama City, Panama and San José, Costa Rica by associates of Mr. Libman.
4. The telephone sales personnel, on the direction of Mr. Libman, made material misrepresentations with respect to their identity, where they were telephoning from, and the quality and value of the shares they were selling. As a result of these misrepresentations, a large number of United States residents were induced to purchase shares in the two mining companies. There was some evidence tendered at the preliminary inquiry from which it could be inferred that these shares were virtually worthless.
5. The United States residents who agreed to purchase shares were told by the telephone sales personnel to send their money to offices operated by Mr. Libman's associates in either San José, Costa Rica or Panama City, Panama. There was evidence tendered that Mr. Libman went to a location outside Canada, usually Costa Rica or Panama, to meet with his associates and receive his share of the proceeds of the sale of the shares. Mr. Libman then brought this money back to Toronto and distributed a portion of it to his sales personnel. There was also evidence tendered at the preliminary inquiry with respect to the wire transfer of monies from Panama City to Mr. Libman in Toronto.
Major Issues on Appeal
6. The basic point raised by the appellant was that the deprivation of the victim was an essential element, indeed, the essential element or grava‑ men, of the offence of fraud, and that any deprivation suffered by the purchasers of the shares in the present case had occurred outside Canada. The alleged offences could, therefore, not be prosecuted in Canada.
7. This point of view involves selecting one ingredient of an offence as its essential ingredient and holding that the offence occurred where the portion of the transaction constituting that ingredient took place. On this issue counsel for the appellant principally relied on R. v. Brixton Prison Governor, Ex parte Rush, [1969] 1 All E.R. 316, a decision of an English divisional court on facts substantially similar to the present case.
8. For its part, the Crown relied on Re Chapman (1970), 5 C.C.C. 46, a decision of the Ontario Court of Appeal which is also similar to the present case except that the proceeds of the sale were originally received by the accused in Canada and not in a foreign country. But the Crown also argued the case on the broader ground that the offences had been substantially committed in Canada, the fraudulent scheme having been devised and operated here and the proceeds accruing from it having been received by Mr. Libman in Canada as contemplated by the scheme.
9. The conspiracy charge was dealt with by Kerr J. who committed the accused to trial under s. 423(1)(d), which applies to conspiracies to commit a criminal offence in Canada, and not under s. 423(3) which expressly deals with conspiracies entered into in Canada to commit a crime outside Canada. The latter provision was enacted after some of the acts charged occurred, and in any event it was not relied on. Counsel for the defence, therefore, argued that s. 423(1)(d) applied only to conspiracies entered into in Canada to commit a substantive offence here which, if his argument that the gravamen of the substantive offence occurred abroad is accepted, was not the case here. For this proposition he also relied on Board of Trade v. Owen, [1957] A.C. 602, where the House of Lords held that a conspiracy in England to do a wrongful act abroad was not subject to prosecution in England.
General Considerations
10. Transnational offences of the kind in question here have been dealt with in a rather confusing fashion, probably because they are not of a type individual courts are called upon to deal with frequently. Accordingly, it will be useful to examine the legal background on a broad basis as the argument of the Crown rather invites us to do.
11. The primary basis of criminal jurisdiction is territorial. The reasons for this are obvious. States ordinarily have little interest in prohibiting activities that occur abroad and they are, as well, hesitant to incur the displeasure of other states by indiscriminate attempts to control activities that take place wholly within the boundaries of those other countries; see R. v. Martin, [1956] 2 All E.R. 86, at p. 92. It is, however, permissible under international law to exercise jurisdiction on other bases. For example, states have long exercised jurisdiction over ships that fly their flags and over their nationals abroad. As well, along with other types of protective measures, states increasingly exercise jurisdiction over criminal behaviour in other states that has harmful consequences within their own territory or jurisdiction; see The Lotus (1927), P.C.I.J., Ser. A., No. 10. It follows from this that the same criminal act may occasionally be subject to prosecution in more than one country, a matter to which I shall refer from time to time.
The English Legal Background
12. So far as this country is concerned, the English legal background necessarily sets the stage for our own experience. However, in this area there have been differences in emphasis so it is useful to deal with the experience in the two countries separately, beginning with the English.
13. Great Britain probably followed the territorial principle more stringently than other states. This was probably owing to its insular position, but it must also be remembered that most of the common law crimes, other than murder, tended by their nature to be territorially confined. Theft is an example. The early British cases, mostly dealing with murder, do not provide much assistance as the discussion in Board of Trade v. Owen, supra, demonstrates. And though the cases on venue, which involve the question of which court in England has competence to deal with prosecutions for acts committed in several countries within England, are helpful, they involve, as Lord Diplock noted in Treacy v. Director of Public Prosecutions, [1971] A.C. 537, at p. 559, other considerations including the fact that jurors were originally drawn from those who were more likely to know the facts alleged to constitute the crime; see also Director of Public Prosecutions v. Doot, [1973] A.C. 807, per Lord Salmon, at p. 834. I have, therefore, generally ignored the venue cases cited to us.
14. It took some time before English criminal law became sufficiently developed to deal with more sophisticated methods of getting the gullible or unwary to part with their property, by means of false pretenses for example. And it was later still, in the late 19th century following the organization of postal, telegraph and telephone systems that the practitioners of this gentle art of persuasion were able to extend their talents to the international plane. It is at this stage that the English experience really becomes relevant.
15. At this point it should be noted that Parliament seldom adverted to territorial considerations in defining criminal offences. It was rather the courts that confined criminal offences within the realm, sometimes by reference to international comity. It would have been possible, indeed probably more logical as Cockburn C.J. explained in R. v. Keyn (1876), 2 Ex. D. 63, at p. 233, to say that where different elements of an offence take place in two countries, the offence occurs beyond the territorial ambit of either country. But while there were occasional strong expressions of the territorial principle, particularly in earlier times (see Macleod v. Attorney‑General for New South Wales, [1891] A.C. 455, per Lord Halsbury at p. 458), the courts never followed logic that far. It would have permitted a too easy means of avoiding criminal sanctions. But once it is decided that transnational crimes must come within the jurisdiction of one state, then on what basis should one take or refuse jurisdiction?
16. The cases reveal several possibilities, of which I mention a few. One is to assume that jurisdiction lies in the country where the act is planned or initiated. Other possibilities include the place where the impact of an offence is felt, where it is initiated, where it is completed, or again where the gravamen, or essential element of the offence took place. It is also possible to maintain that any country where a substantial or any part of the chain of events constituting an offence takes place may take jurisdiction.
17. Though counsel for Mr. Libman argued that exclusive jurisdiction belongs to the country where the gravamen of the offence took place or where it was completed, a review of the English authorities does not really support that position. What it shows is that the courts have taken different stances at different times and the general result, as several writers have stated, is one of doctrinal confusion, a confusion compounded by the fact that the discussion often focuses on the specific offence charged, a discussion made more complicated by the further fact that some offences are aimed at the act committed and others at the result of that act.
18. The early cases were certainly not concerned with the place of impact of the crime or where the deprivation of the victim took place, or, for that matter, where the crime was completed. Rather, the courts seem to have weighed the various factors connecting the crime to the place where the charges were laid. Thus in R. v. Holmes (1883), 12 Q.B.D. 23, a case that bears some resemblance to the present, the accused wrote and posted a letter at Nottingham addressed to one Gobet in France that contained a false pretence by which Gobet was fraudulently induced to transmit a draft to the accused which the latter then cashed in Nottingham. The Court of Crown Cases Reserved had no difficulty in holding that the offence could be prosecuted in Nottingham where the letter was mailed and the proceeds arising out of the false pretence were paid. Lord Coleridge C.J., at p. 24, thought both ingredients of the offence, the false pretence and the receipt of the money took place there. Interestingly, he went on to suggest that one ingredient taking place in Nottingham would have been sufficient to give the court jurisdiction there.
19. Certainly, about the same time, the cases of R. v. Jacobi and Hiller (1881), 46 L.T.R. 595n, and R. v. Nillins (1884), 53 L.J.Q.B. (N.S.) M.C. 157, (which are remarkably similar to one another) made it clear that a crime could be prosecuted where its impact was felt by the victim; see also R. v. Godfrey, [1923] 1 K.B. 24. In Nillins, the accused sent letters containing false pretences from Southampton, England to a person in Hamburg, Germany, who then transferred goods to agents of the accused in Germany. The accused also sent his victims forged cheques there. In extradition proceedings, the court held he could be surrendered to Germany on the ground that the crime was committed there. In arriving at this conclusion the court, as in the Holmes case, appears to have weighed the factors that substantially connected the crime to the place seeking to prosecute him. Cave J. had this to say at p. M.C. 158:
... it cannot be seriously contended that he did not commit the crime in Germany; he procured the goods there, he uttered the forged notes there, and, further, they were delivered to the merchant of the port or his agent, and upon these the goods were delivered to his order at Hamburg.
20. Taken together, these cases indicate that it might be possible to charge an accused in two different countries, as Lord Coleridge suggests in Holmes. He made this suggestion even more explicit in giving the judgment of the Court of Crown Cases Reserved in the rather similar case of R. v. Peters (1886), 16 Q.B.D. 636. There the accused, an undischarged bankrupt, had, without informing the purchaser as required by the Bankruptcy Act, 1883 bought a horse from a farmer in Ireland for £‑22, the farmer to deliver it, at the direction of the accused on board a steamer at Larne in Ireland. This transaction was effected by means of a letter posted by the accused in Newcastle, England. The court, over Manisty J.'s dissent on the ground that property had passed when the horse was delivered to the carrier in Ireland, held that the offence could be prosecuted in Newcastle. Lord Coleridge's remarks justifying this holding are reminiscent of those of Cave J. in Holmes. He said at p. 639:
... the credit was obtained (assuming it to have been obtained at all) in Newcastle. The prisoner lived there; he wrote to the vendor thence; he received an answer there; he ordered the horse to be sent there; he received it there.
21. In sum, what the courts in these cases appear to have been doing, in determining whether a crime should be prosecuted in a particular area, was to consider the substantial links that connected the crime to that jurisdiction. They do not deny, as their holdings and Lord Coleridge's remarks attest, that there may be sufficient links to different jurisdictions to justify proceedings in more than one place.
22. Before leaving these cases, it is interesting to note that the last of them, Peters, bears a considerable resemblance to the present case. There, the communication came from England (here Canada) and property technically passed in Ireland (here, probably the United States, though possibly Costa Rica or Panama), but the benefit from the transaction was received by the accused in the country where the communication originated.
23. R. v. Ellis, [1899] 1 Q.B. 230, in the Court of Crown Cases Reserved, though not inconsistent with the cases already discussed, reveals an approach that is more supportive than they are of the theory advanced by appellant's counsel. There the major judgments seek to identify the gist or gravamen of the offence as revealed from its definition and hold that the offence was committed where the acts constituting its gist or gravamen occurred. In that case, Ellis who carried on business in Durham, England, obtained goods on credit there on the basis of false representations he had made to the supplier of the goods at the latter's place of business in Glasgow, Scotland, which was treated for the purpose of the case as a foreign country. He was convicted of the charge of obtaining goods by false pretences in Durham, the judges generally appearing to think the gist of the offence was the obtaining of the goods, and not the false pretences. Bruce J. however, gave voice to another theory which also supports the appellant's position. In his view, the offence could properly be dealt with where it was completed, i.e., Durham, notwithstanding that some of its ingredients might have occurred entirely outside the jurisdiction.
24. The "completion of the offence" theory was also used by the Court of Criminal Appeal in the case of R. v. Stoddart (1909), 2 Cr. App. R. 217, but on facts that were somewhat the reverse of those in Ellis. There postal orders obtained by false pretences were mailed in England and received by the defendant's agent abroad. The court concluded that the English criminal courts had jurisdiction, holding that the offence was complete when the letters containing the postal orders were mailed, an approach consistent with cases holding that a contract is complete when the acceptance of an offer is mailed.
25. Application of either the gist of the offence test or the completion of the offence test has the effect of limiting the courts' jurisdiction in criminal matters to a single location, namely, where the essential element of the offence occurred or where it was completed. Such a result does not appear to have occurred in the few cases reported over the next fifty years. In some cases the courts were able to avoid any limiting effect by creating the notion of continuity of offences. Thus in R. v. Mackenzie and Higginson (1910), 6 Cr. App. R. 64, the accused Mackenzie was accused of procuring a girl to have sexual intercourse with Higginson. Everything in the nature of procuring occurred in Scotland but the intercourse took place in London. The court concluded that the offence of procuring is continuous and since a part of the procuration occurred in England, the court had jurisdiction. This approach has continued to be applied in more recent cases; see R. v. Robert Millar (Contractors) Ltd.; R. v. Millar, [1970] 2 Q.B. 54 (C.A.); Treacy v. Director of Public Prosecutions, supra; R. v. Baxter, [1972] 1 Q.B. 1 (C.A.); Director of Public Prosecutions v. Doot, supra.
26. Occasionally, the courts sought refuge in the definition of the offence. Thus in R. v. Lyle (1924), 18 Cr. App. R. 59, the accused was charged with causing the proceeds of a cheque to be converted to his own use. The offence began in Accra on the Gold Coast but was not completed until the proceeds were paid to him in London. This approach has also been followed recently in the cases cited in the last paragraph.
27. Whether the courts during this period seriously intended to depart from the rationale in the early cases like Nillins, Holmes, and Peters it is difficult to say. The cases we have discussed were really not inconsistent with them and interestingly in Lyle the Court of Criminal Appeal clearly contemplated that the accused could have been charged with some of the offences both in London and in Accra. However that may be, it is clear that later, during the 1960's, the English courts did take seriously the notion that an offence could take place at one single locus, whether that was where the offence was completed or where the gist, gravamen or essential element of the offence took place. This approach was also encouraged by the views of a respected academic, Professor Glanville Williams; see "Venue and the Ambit of Criminal Law" (1965), 81 L.Q.R. 276, 276‑288, 395‑421, 518 et seq.
28. Discussion of this period may conveniently begin with the House of Lords' decision in Board of Trade v. Owen, supra, in 1957, although as I will attempt to explain that case is frequently misunderstood and is clearly inconsistent with any theory that an offence takes place where the gravamen or gist of the offence occurs. In that case, the accused were convicted of conspiring in London to defraud an export control department of the Federal Republic of Germany by causing the department to grant licences to export certain metals from Germany by fraudulently representing to the department that the metals would be supplied to Irish manufacturers, the accused well knowing that they would in fact be exported to Eastern Bloc countries. The conviction was, however, quashed by the Court of Criminal Appeal and a further appeal from this decision to the House of Lords was dismissed.
29. In considering that case, it should first be underlined that the conspiracy charged was a common law conspiracy. It involved an agreement in England to commit a crime or to effect an unlawful purpose abroad. It should also be noted that the House, at p. 622, viewed the evidence as showing "that the [false] representations were in fact made in Germany and the licence was issued there". Lord Tucker, who gave the major judgment, carefully distinguished that situation from the conviction for conspiracy to utter forged documents in count 5, which was not appealed, under which he noted, again at p. 622, that "the crime designed to be committed was the uttering of a forged document in this country with intent to defraud, it being immaterial whether the person or persons to be defrauded were in Germany or elsewhere".
30. In coming to its conclusion, the House of Lords expressly stated that it was not departing from the long established view that the gist of the offence of conspiracy was the agreement, which in that case had clearly been effected in England. The rationale of the decision is that the Law Lords simply did not wish to extend the courts' jurisdiction over criminal acts by the technique of conspiracy, which they described as "an already indeterminate field". That offence, it was noted, was devised as a means of preserving the Queen's peace within the realm by preventing the commission of an offence even before it reached the stage of an attempt. The fact that the object of the agreement was to take place outside the realm was, therefore, not irrelevant. The Law Lords left open the question whether a different conclusion might be warranted if the conspiracy resulted in some harmful effect in England, an approach soon adopted by the Court of Appeal in R. v. Cox, [1968] 1 All E.R. 410, and in later cases.
31. Whether the policy underlying the Owen case is sound and whether it accords with the Canadian position, I need not for the moment examine. Suffice it to say that it has nothing to do with the mechanical exercise of determining where the gist or gravamen of the offence took place. Indeed, as I noted, the House of Lords held there was no jurisdiction to try the offence in the English courts despite its express finding that the agreement constituting the gravamen of the offence took place in England.
32. Nonetheless in R. v. Harden, [1962] 1 All E.R. 286, the Court of Criminal Appeal again resorted to the expedient of determining where the acts constituting the gist of the offence had taken place and where the criminal act had been completed in determining the question of jurisdiction. There the accused carried on a business in Eastbourne, England of selling refrigerators, many of which were sold on hire‑purchase terms. To assist in financing the sales he made an arrangement with a finance company for what he called discounting of the hire purchase agreements, i.e., he would assign the agreements to the finance company for the sum owing less the company charges. These amounts were paid, in accordance with the contract between them, by a cheque posted in Jersey made payable to a company controlled by the accused. From time to time the accused forwarded a fictitious hire purchase agreement to the finance company, as a result of which the accused was ultimately charged in England with obtaining money by false pretences. The court held, following Ellis, that he could not be convicted because the gist of the offence, which was the obtaining of the money, was completed in Jersey. The contract between the parties made it clear that the parties intended that property in the cheque passed on posting.
33. The correctness of this case was later doubted by Lord Diplock in the House of Lords in Treacy v. Director of Public Prosecutions, supra, even though the House itself had used similar reasoning shortly before in an extradition case, though it had there held the court had jurisdiction; see Athanassiadis v. Government of Greece, [1969] 3 All E.R. 293. Later still the Court of Appeal in R. v. Tirado (1974), 59 Cr. App. R. 80, carefully confined Harden to its own facts, i.e., to cases where the parties have agreed to the place where delivery is to be made. But that situation must rank as a classic instance of the fallacy of transplanting a category to an inappropriate area. The fact that the parties decide that the posting of a letter shall mark the beginning of the contract has nothing to do with the policies that should guide a court in exercising criminal jurisdiction over a transnational transaction. Harden has, it is true, been followed recently but that was simply on the basis of stare decisis; see R. v. Governor of Pentonville Prison, Ex parte Khubchandani (1980), 71 Cr. App. R. 241 (Div. Ct.) On the basis of subsequent cases to be examined later, it seems clear that only the coup de grâce now remains to be administered.
34. I have elaborated on the treatment of Harden because it was heavily relied on, along with Ellis, Owen and Cox, supra, in R. v. Brixton Prison Governor, Ex parte Rush, supra, which forms the cornerstone of the appellant's case. There Canada sought to obtain the surrender of the accused from Great Britain under the English Fugitive Offenders Act 1967 for a number of offences based on facts on all fours with the present case, and, indeed, including some of the same participants. There, too, the "boiler room" was in Ontario and the people defrauded were United States residents who were invited to send their cheques for the stocks to Panama or Nassau. The charge discussed in the case is one of conspiracy to obtain goods by false pretences. The court refused to surrender the accused on that count since in its view the crime did not take place in Canada even though the cheques were obtained from the victims of the fraud either when they posted them in the United States or, at the latest, when they were received in Panama or Nassau at which point the indictable offence ended. What then happened to the cheques, the court continued, was neither here nor there.
35. I shall have more to say about the Rush case later. For the moment, I shall confine myself to a discussion of the more recent English cases, which clearly indicate that the type of reasoning in Rush and Harden no longer finds favour in the English courts.
36. The first of these cases is Treacy v. Director of Public Prosecutions, supra, decided by the House of Lords in 1971. There the accused in England posted a letter written by him to a woman in West Germany in which he demanded money or face exposure of her private life. He was charged with blackmail in England, i.e., with making an unwarranted demand with menaces. He objected to the court's jurisdiction, but the objection was overruled. On appeal to the Court of Appeal, John Stephenson J., giving the judgment of the court, held that the English courts had jurisdiction to try the offence, the demand having been first made when the letter was posted. He added, at p. 543, that the appellant might also be triable in Germany because "it may be right to regard the demand as continuing until it is received". A majority of the House of Lords agreed that blackmail was committed when the letter was posted but found it unnecessary to decide whether the demand could be considered as continuing until the letter was received. Lord Reid and Lord Morris of Borth‑y‑Gest, however, dissented on the ground that the offence was not completed until the letter was received.
37. Lord Diplock agreed with the majority but also decided the case on broader grounds. In his view, if the facts alleged and proved constitute the offence charged, the only reason (the technicalities of venue being jurisdictional and long ago abolished) for refusing to convict was to be found in the international rules of comity which it must be presumed Parliament did not intend to break. But he interpreted comity narrowly to attempts to regulate conduct abroad and not in the United Kingdom. As he put it, at p. 561:
It would be an unjustifiable interference with the sovereignty of other nations over the conduct of persons in their own territories if we were to punish persons for conduct which did not take place in the United Kingdom and had no harmful consequences there. But I see no reason in comity for requiring any wider limitation than that upon the exercise by Parliament of its legislative power in the field of criminal law.
In particular he noted that comity did not prevent Parliament from prohibiting conduct in England that has consequences abroad. Nor did it give immunity to persons abroad for conduct there that has harmful consequences in England. He continued at pp. 561‑62:
There is no rule of comity to prevent Parliament from prohibiting under pain of punishment persons who are present in the United Kingdom, and so owe local obedience to our law, from doing physical acts in England, notwithstanding that the consequences of those acts take effect outside the United Kingdom. Indeed, where the prohibited acts are of a kind calculated to cause harm to private individuals it would savour of chauvinism rather than comity to treat them as excusable merely on the ground that the victim was not in the United Kingdom itself but in some other state.
Nor, as the converse of this, can I see any reason in comity to prevent Parliament from rendering liable to punishment, if they subsequently come to England, persons who have done outside the United Kingdom physical acts which have had harmful consequences upon victims in England. The state is under a correlative duty to those who owe obedience to its laws to protect their interests and one of the purposes of criminal law is to afford such protection by deterring by threat of punishment conduct by other persons which is calculated to harm those interests. Comity gives no right to a state to insist that any person may with impunity do physical acts in its own territory which have harmful consequences to persons within the territory of another state. It may be under no obligation in comity to punish those acts itself, but it has no ground for complaint in international law if the state in which the harmful consequences had their effect punishes, when they do enter its territories, persons who did such acts.
See also his remarks at pp. 564‑65.
38. Lord Diplock's approach was soon followed by the Court of Appeal, Criminal Division, in R. v. Baxter, supra. There the accused who was resident in Northern Ireland posted letters there addressed to football pool promoters in England falsely claiming that he had correctly forecast the results of football matches and was entitled to winnings. He was charged with attempting to obtain property by deception, but he pleaded that the attempt was completed when the letters were posted in Northern Ireland and in consequence that the attempt was not committed within the jurisdiction of the English courts. The Court of Appeal, however, held that the attempt was a continuing one, and adopted the following ruling of the recorder at p. 11:
The conclusion to which I have come is that the attempts in this case were of a continuing nature. Whenever the defendant posted one of his fraudulent letters in Northern Ireland he set in motion a train of events for which he was solely responsible, the transportation of the letter to Liverpool and its delivery to and reading by the addressee. The reality of the situation is that the misrepresentations were designed to be made in England and were made there by the defendant's use of the post. Whether or not these offences are also triable in Northern Ireland, I am of the opinion they are triable here.
39. The technique of continuing offence was again employed by the House of Lords in Director of Public Prosecutions v. Doot, supra, in 1973 to uphold jurisdiction in the English courts in respect of a conspiracy entered into by aliens abroad to import drugs into England for ultimate shipment to the United States, the drugs having pursuant to the agreement been imported in England. Though the crime could be said to have been complete at the moment of agreement, it was held that the agreement continued while it was being consummated in England. While this appears to have been the approach taken by the majority of the House, several of the Lords expressed themselves in broader terms. Lord Wilberforce, for example, noted at p. 817 that there is no mechanical answer to the issue of jurisdiction in the case of crimes committed in several countries. And Lord Salmon set forth the realism that must prevail in approaching the notion of comity nowadays. At page 831 he had this to say:
It is surely no mitigation that the defendants intended to commit further crimes by exporting the prohibited drugs from this country. There is unfortunately a ready market in this country for these dangerous drugs. I do not doubt that if the respondents had received an acceptable offer for them here it would have been accepted. However this may be, it hardly seems in accordance with the rules of international comity that our courts should treat the defendants with special leniency because their crimes were more likely to ruin young lives in the United States of America than in this country.
At page 834 he continued:
I do not believe that any civilised country, even assuming that its own laws do not recognize conspiracy as a criminal offence, could today have any reasonable objection to its nationals being arrested, tried and convicted by English courts in the circumstances to which I have referred. Today, crime is an international problem‑‑perhaps not least crimes connected with the illicit drug traffic‑‑and there is a great deal of cooperation between the nations to bring criminals to justice. Great care also is taken by most countries to do nothing which might help their own nationals to commit what would be crimes in other countries: see, for example, section 3 (2) of the Dangerous Drugs Act 1965.
...
In any event, the rules of international comity are not static and I do not believe that in the modern world nations are nearly as sensitive about exclusive jurisdiction over crime as they may have been formerly.
40. The approach in Treacy and in Doot has been followed in later cases. In R. v. Wall, [1974] 1 W.L.R. 930 (C.A.), it was held that acts done abroad in order to further the fraudulent evasion of a restriction on importation of drugs into the United Kingdom were punishable under the relevant statute. As Cairns L.J., speaking for the court, noted at p. 934: "If it were not so, a person abroad who slipped a package containing a dangerous drug into the luggage of an innocent passenger who then brought it into this country would not be punishable...."
41. Again in Secretary of State for Trade v. Markus, [1976] A.C. 35, which also featured "a gigantic international swindle", Lord Diplock, giving the majority judgment in the House of Lords, stated that in the case of a "result crime" of the same general nature as obtaining by false pretence, the offence is justiciable in England if any part of the proscribed result takes place in England. There the proscribed result was taking part in arrangements by victims of the fraudulent inducements. However, it was not necessary there to canvas the broad approach he had taken in Treacy.
42. It cannot at this juncture be stated that the broad approach of Lords Diplock and Salmon has been definitively adopted in England. But the simple fact is that since the English cases relied upon by the appellant were decided, the English courts have decisively begun to move away from definitional obsessions and technical formulations aimed at finding a single situs of a crime by locating where the gist of the crime occurred or where it was completed. Rather, they now appear to seek by an examination of relevant policies to apply the English criminal law where a substantial measure of the activities constituting a crime take place in England, and restrict its application in such circumstances solely in cases where it can seriously be argued on a reasonable view that these activities should, on the basis of international comity, be dealt with by another country. Indeed, while the English courts in the past gave a variety of differing reasons, sometimes inconsistent, it can fairly be said that, with some muddling through, this is substantially what, with the exception of a relatively few cases, they have done over the last century.
The Canadian Background
43. Canada, as a British colony, of course, inherited the English tradition of territoriality in criminal jurisdiction, and indeed it is incorporated into s. 5(2) of the Criminal Code which sets forth the general rule that no person shall be convicted for an offence committed outside Canada.
44. In assessing Canada's experience this country's original colonial status must not be overlooked. During the early period following Confederation, Canadian courts tended to confine not only criminal but civil legislation strictly within Canadian territory. This was undoubtedly owing to concerns flowing from its condition of dependency reflected in the general doctrine of extra‑territoriality. It was not for many years that, in the words of Lord Macmillan in Croft v. Dunphy, [1933] A.C. 156, at p. 163, Canadian legislation having extra‑territorial implications could be viewed without regard to "any other consideration than is applicable to the legislation of a fully Sovereign State". Such limitations were not formally removed until the Statute of Westminster, 1931.
45. The restrictive character of judicial interpretation of Canadian legislative ambit can be seen in the early case of R. v. Blythe (1895), 1 C.C.C. 263 (B.C.C.A.), where an accused had by letters written in Victoria B.C. induced a girl under sixteen to leave the State of Washington where she lived with her parents to come to stay with him in Victoria. He met her when she arrived in Canada and took her to his home. He was acquitted on a charge of abduction, albeit by a 3 ‑ 2 majority, on the ground that the abduction took place in the State of Washington.
46. A case of that kind would seem to invite the application of the notion of a continuing offence, but neither the majority nor the minority considered this possibility. Nor, indeed, was it considered in Re Gertie Johnson (1904), 8 C.C.C. 243 (B.C.S.C.), a procuration case the facts of which bear a close similarity to the English case of Mackenzie and Higginson, supra, where that offence was construed as continuing. For other early cases where Canadian courts strictly confined criminal offences to Canadian territory, see R. v. Wettman (1894), 1 C.C.C. 287 (Ont. H.C.), and R. v. Walkem (1908), 14 C.C.C. 122 (B.C.C.A.) The territorial limitations then thought to be imposed by international law and British constitutional law can readily be discerned from reading In Re Criminal Code Sections Relating to Bigamy (1897), 27 S.C.R. 461.
47. A restricted view of the territorial application of criminal law may still occasionally be found in some cases even in fairly recent years; see for example, United States of America v. Novick (1960), 128 C.C.C. 319 (Que. S.C.), where the court narrowly restricted the offence of using the mails to defraud to restrict the place of commission to the place where a letter was posted and not where it was received. But generally speaking from about 1910, Canadian courts tended not to confine criminal offences as strictly to Canadian territory.
48. Interestingly enough, in light of Board of Trade v. Owen, supra, that tendency has been particularly evident in cases of conspiracy. An early example is R. v. Bachrack (1913), 21 C.C.C. 257 (Ont. C.A.) There the accused were charged with conspiracy to commit an abortion, the abortion having been committed in the United States. The jurisdictional point did not directly arise since the jury found that the accused had conspired to procure the abortion in Ontario. But the judgment of the court given by Meredith J.A. makes it clear that the jurisdictional argument would not have been countenanced. He says at p. 265:
The law would be lame if it were powerless to reach conspirators so long as they took care to agree to carry into effect their wrongs beyond the borders of the country in which they conspired to do the wrongs. It must be borne in mind always that the crime of conspiracy may be complete without any thing having been done to carry it out.
49. This approach was followed a few years later by Allan J. of the Superior Court of Quebec in Ecrement v. Cusson and Connolly (1919), 33 C.C.C. 135, aff'd. (1920), 30 Que. K.B. 55 (C.A.), which involved a conspiracy to commit robbery. More recently in Shulman v. The King (1946), 2 C.R. 153 (Que. C.A.), an objection to jurisdiction to a charge of conspiracy to defraud again failed. The facts resembled those in the present case in many ways. The conspiracy charged there involved an attempt to foist on members of the public outside Canada the shares of a worthless company by people whom Walsh J. described, at p. 156, as "an unholy alliance of swindlers organized in modern trappings". As in the present case, the scheme was organized and developed in Canada, but the monies therefrom were received in England by persons other than the accused although he ultimately obtained a portion of the funds here. Speaking of this aspect, Walsh J. had this to say at p. 156:
In the eyes of some people only financial gains matter; but there is more to conspiracy than its successful culmination. Its preparation and evolution, even in the case of failure, is reprehensible.
50. Interestingly, though the courts were willing to find jurisdiction in Canada when the agreement and preparation took place here, they were also ready to hold that the country where the results contemplated by the conspiracy took effect also had jurisdiction though the accused was not present there; see Re Brisbois (1962), 133 C.C.C. 188 (Ont. H.C.); Re Devlin, [1964] 3 C.C.C. 228 (Ont. Co. Ct.) Thus, as some of the English cases had earlier established, it was possible to prosecute an accused for the same acts in several jurisdictions. Whether an act fell outside the territory was a matter that was approached with some flexibility. And Brisbois and Devlin were conspiracy cases so it can scarcely be argued that the gist or gravamen of the offence determines its situs. I might add that Canadian cases where a court will exercise jurisdiction over an offence consisting of acts committed abroad that have adverse effects here are not limited to conspiracy; see Re Hanes and The Queen (1982), 69 C.C.C. (2d) 420 (Ont. H.C.)
51. This flexible approach was, however, interrupted in 1965 by a case in the Ontario Court of Appeal. In R. v. Selkirk, [1965] 2 C.C.C. 353, the accused filled out an application form in Ontario for a credit card containing false statements and mailed it to the credit card company in California which sent him a card with which he obtained goods and services on credit at various establishments in Ontario. He was charged and convicted of obtaining credit by fraud, and of defrauding the credit card company be deceit, falsehood or other fraudulent means. On appeal, the first count, which related to his obtaining goods in Canada with the credit card, was upheld even though the card had been issued in the United States because the transactions creating the debts occurred entirely in Canada. The conviction on the second count, of fraudulently obtaining the credit card, however, was quashed. The delivery of the card was made to the accused in California when it was received by the post office, the accused having made the postal authorities his agent by mailing his application. From this, the court reasoned, the offence took place in the United States.
52. But the law did not long remain in that state. The reasoning in the Selkirk case was soon rejected by the Manitoba Court of Appeal, Freedman, Guy and Dickson JJ.A. (now C.J.C.), in R. v. Trudel, Ex parte Horbas and Myhaluk, [1969] 3 C.C.C. 95. While the case was concerned with an interprovincial transaction, the court's reasoning is nonetheless relevant. The accused were there charged with conspiracy to forge documents. The alleged agreement was made outside Manitoba and the only act that took place in Manitoba was the receipt of false documents by the accused. It was argued, on the basis of Selkirk, that delivery of the documents was not an act in the commission of the offence since it was merely the consequence of a mailing that took place in Edmonton. But the court rejected the notion that the principles applicable to the place of formation of civil contracts were applicable to the determination of the place where a crime took place. In deciding the latter question, it noted, other considerations must be invoked, "including the fact that some criminal acts are of a continuing character and may rightly be deemed to occur in more than one jurisdiction".
53. The same court had acted in a similar way in an earlier case, R. v. W. McKenzie Securities Ltd., [1966] 4 C.C.C. 29. There the accused were charged under the Manitoba Securities Act with unlawfully trading in securities. However, they conducted their activities entirely from Toronto by letters and telephone calls. Here again, the court underlined that an offence could occur in more than one place. It had this to say, at pp. 37‑38:
Although offences are local, the nature of some offences is such that they can properly be described as occurring in more than one place. This is peculiarly the case where a transaction is carried on by mail from one territorial jurisdiction to another, or indeed by telephone from one such jurisdiction to another. This has been recognized by the common law for centuries.
...
I think it completely unrealistic to suggest that when the accused sent their letters by mail from Toronto, Ontario to Shilo, Manitoba, the act of solicitation there represented took place only in Toronto or at most within the borders of Ontario. Such an approach ignores completely the nature and character both of a letter and of the postal service. The invitation put forward by the accused in their letters was a continuing one. It started when written in Toronto; it continued when deposited in the post box there; it did not cease to exist during the period when it was being transported through the postal service (the agency selected for that purpose by the accused); and it retained its vitality and spoke with special effectiveness to McCaffrey at the time when he opened and read the letter in Shilo in Manitoba. It was in this Province that McCaffrey was solicited by the accused to purchase the shares in question, and it was in this Province that McCaffrey responded favourably to such solicitation. I would agree with the learned Magistrate and the learned County Court Judge that what took place in the present case constituted an act of trading in securities within the definition of the Securities Act of Manitoba.
54. These two cases, it is true, related to interprovincial rather than international situations, but it is clear from the rejection in Trudel of the reasoning in R. v. Selkirk that the court attached no importance to this distinction. In any event, the reasoning in Trudel was approved by a panel of five members of the Ontario Court of Appeal, consisting of Gale C.J.O. and McGillivray, Kelly, Laskin (later C.J.C.) and Brooke JJ.A., in 1970 in the important case of Re Chapman, supra. While that court refrained from saying that the situs of an offence can never be determined on the basis of notions derived from contract or agency, it concluded that the court in Selkirk had taken too limited a view. "Since the credit card did reach the accused in Toronto", it noted at p. 53, "there was factual realization of the fraudulent scheme put into motion by the accused, and hence, a sound basis for concluding that if an offence had been committed it was committed in Toronto".
55. Like the present case, Chapman concerned a complicated fraudulent scheme initiated in Canada. It is unnecessary to go into the details except to say that it involved, in the words of the court at p. 51, "the initiation and consummation of a scheme in Canada through the dispatch of letters from Canada and the receipt in Canada of money or valuable securities by way of cheques and money orders". The accused were charged with several counts including conspiracy to defraud the public by deceit, falsehood or other fraudulent means of property, money or valuable securities, using the mails to transmit letters for the purposes of defrauding the public and obtaining money under false pretences. The accused, of course, raised the question of jurisdiction.
56. The court did not address the question whether the conspiracy had been committed in Canada by reason of its formation and existence here and, therefore, found it unnecessary to consider the appropriateness in Canada of the principle set out in Board of Trade v. Owen, supra. That was because it came to the conclusion that the substantive offence of fraud took place in Canada, and, a fortiori, that the conspiracy to commit the fraud could be dealt with by a Canadian court.
57. The court's reasoning in support of its conclusion that the substantive offence took place in Canada is aptly summed up in the following paragraph at p. 51:
The recital of facts herein, referable to the Canadian phase of Jamster's operations, shows the initiation and consummation of a scheme in Canada through the dispatch of letters from Canada and the receipt in Canada of money or valuable securities by way of cheques and money orders. This is enough to support a charge of the substantive offence in Canada, subject only to the construction of the phrase "defrauds the public or any person". On the facts before this Court, the only members of the public or persons who could be said to have been defrauded were residents of the United States.
The completion of the offence under s. 323 (1) lies in the obtaining of the fruits of the fraudulent means or inducement. What is said in R. v. Brixton Prison Governor, Ex p. Rush, [1969] 1 All E.R. 316 at p. 322, also points to this conclusion. If there is an initiation of a fraudulent scheme in Canada (as was the case here in the mailing out of the letters of solicitation) and a realization thereof in Canada through receipt of money or securities intended to be brought in through the scheme, the offence has been committed in Canada although the inducement has extended only to persons outside Canada. In short, "the public or any person" in s. 323 (1) are not limited to the Canadian public or to persons in Canada: see Shulman v. The King (1946), 2 C.R. 153.
58. The court took a similar tack regarding the charge of using the mails to defraud. The object of the offence was "prohibiting the use of a public communications facility for fraudulent purposes" (p. 54). There was no justification for limiting "the public" sought to be protected by the section to the Canadian public. Leave to appeal to this Court was denied (see p. 55 [and [1970] S.C.R. viii]).
59. The Canadian experience may be summed up as follows. In the early years after Confederation the territorial principle was narrowly construed in both civil and criminal cases, consistent with Canada's dependent status. But as time went on the courts began to interpret their territorial jurisdiction more liberally. On the whole, though, despite their policy of extending jurisdiction, they tended to apply the gist of the offence approach more consistently and mechanically than the English courts. The countervailing policies that, rightly or wrongly, affected the House of Lords in Board of Trade v. Owen, supra, do not appear to have been perceived in the Canadian cases that took the opposite view. However, as in England, the Canadian courts were prepared to move beyond the gist of the offence test when the impact of a crime was felt in Canada. And like the English courts, too, they in time adopted techniques to avoid the strait‑jacket in which the rigorous application of that test had put them, notably the technique of continuing offences. In truth, though, they were not frequently presented with situations (such as that which arose in the English case of Peters) in which they were forced to go beyond the mechanical approach, then also prevelant in England but later decried by Lord Wilberforce in Director of Public Prosecutions v. Doot, supra. But Trudel established that they could, if called upon to do so, eschew mechanical formulations, such as the use of contractual concepts that had no bearing on the relevant policy issues.
60. It remains to examine the present case in light of this background.
Rationale and Conclusion
61. Counsel for the appellant framed his argument on the fraud counts in this way. Relying on the decision of this Court in R. v. Olan, [1978] 2 S.C.R. 1175, he asserted that the gist of that offence is the deprivation of the victims. On the basis of Rush, which he invited us to follow, the offence was at an end when the deprivation occurred. Here only the inducements originated in Canada, the monies having been posted in the United States to either Costa Rica or Panama where they were received. The deprivation was then completed in the United States or at the latest in Costa Rica or Panama. This approach, I may say, could not illogically be adopted even if one considered the offence to be of a continuing nature.
62. Counsel distinguished the Chapman case on the basis that there the monies were sent to Canada, and more fundamentally that Chapman having been decided before Olan was wrong in holding that the completion of the offence of fraud lies in the obtaining of the money.
63. I find it unnecessary to enter these niceties because my difficulties with the gist of the offence and the completion of the offence tests arise on a much broader plane. To begin with, these tests seem to me to involve a large measure of unreality. It requires, for example, that one hold that what happens to money obtained abroad when it is in fact brought to Canada in accordance with a carefully concocted fraudulent scheme originating here, is, in the words of the court in the Rush case, neither here nor there. This kind of thinking has, perhaps not altogether fairly, given rise to the reproach that a lawyer is a person who can look at a thing connected with another as not being so connected. For everyone knows that the transaction in the present case is both here and there.
64. This is not the only example of the rather special kind of thinking required to apply the tests proposed. We saw from Harden, for instance, that a criminal can locate a fraudulent scheme where it is most convenient to himself by simply arranging with the person whom he proposes to defraud where the agreement is to be completed. Such absurdities obviously invite a return to first principles.
65. As noted earlier, the territorial principle in criminal law was developed by the courts to respond to two practical considerations, first, that a country has generally little direct concern for the actions of malefactors abroad; and secondly, that other states may legitimately take umbrage if a country attempts to regulate matters taking place wholly or substantially within their territories. For these reasons the courts adopted a presumption against the application of laws beyond the realm, a presumption later codified in this country in s. 5(2) of the Criminal Code .
66. While, we saw, there were occasional strong expressions of the territorial doctrine, particularly in earlier times, the fact is that the courts never applied the doctrine rigidly. To have done so, as Cockburn C.J. noted in Keyn, supra, at p. 233, would have meant that a state could not apply its laws to offences whose elements occurred in several countries. This would have provided an easy escape for international criminals. What the courts sought to do, albeit in ways that were sometimes rather unsophisticated and at times inconsistent with the expressed rationales in earlier cases, was to give the principle an interpretation consistent with its underlying rationale. They did not, and indeed were not really invited to deal with transactions in other countries that had no domestic impact. But Canadian courts (like those in England and other countries for that matter) frequently took jurisdiction over transnational offences that occurred partly in Canada where they felt this country had a legitimate interest in doing so. Interestingly, s. 5(2) of the Code expresses the territorial principle in a manner that rather reflects its purpose. That provision does not say that criminal law is confined to Canadian territory; it says rather that no person "shall be convicted in Canada for an offence committed outside of Canada".
67. This country has a legitimate interest in prosecuting persons for activities that take place abroad but have an unlawful consequence here, (as in Peters, for example). Indeed, from an early period the English courts have recognized such an interest in other countries; see Jacobi and Hiller, Nillins and Godfrey, supra. The protection of the public in this country is widely acknowledged to be a legitimate purpose of criminal law, and one moreover that another nation could not easily say offended the dictates of comity.
68. But the courts did not confine themselves to taking jurisdiction over transnational offences whose impact was felt within the country. As early as 1883 (Holmes) they also took jurisdiction in cases where the victim and hence the impact was abroad. In the early cases, there was a tendency to justify this in terms of the links that connected the act to the jurisdiction. In doing so they foreshadowed modern academic writing on the subject, which points out that a similar approach prevails in both public and private international law; see Sharon A. Williams and J.‑G. Castel, Canadian Criminal Law, International and Transnational Aspects, c. 2, pp. 71 et seq; see also Lynden Hall, " `Territorial' Jurisdiction and the Criminal Law," [1972] Crim. L.R. 276.
69. Starting with Ellis in England, the courts began to use another test: that an offence takes place where its gist or gravamen occurs. This approach was particularly prevalent in Canada. It is possible to explain many of the cases on this basis which, at a superficial level, may seem rational. The location of the offence according to this approach also corresponds to the place where the fruits of the wrongful scheme are obtained, so one can easily be led into thinking that is where the wrongful act takes place. But whatever value the notion of the gist of an offence may have for other purposes, it has little relevance in this context. The offence of fraud, for example, consists not only of obtaining money, goods or other property; it also requires that they have been obtained by fraud. Both elements must be proved. Similarly in the offence of obtaining property by false pretences, no matter how much one insists that the gist of the offence is the obtaining, the offence can only take place if the property is obtained by false pretences. What is more I see no overriding policy reason that would favour the place of obtaining the goods. There are many cases, it is true, where this is also the place where the impact is felt, but that is not necessarily so (see Holmes for example). Nor will it necessarily be the place where the harm is felt (see Ellis).
70. Sometimes the gist or gravamen test is associated (though the two may be looked at separately) with the "completion of the offence" or terminatory test, as in the present case, for example. This seems more prevalent in England, at least in the eyes of some academics; see, for example, Glanville Williams, supra. That test may have the advantage of removing criminal liability for acts that take place after the offence as defined is completed, but it also has the result of removing from consideration earlier acts constituting the offence, here the fraudulent activities alleged to have occurred in Toronto.
71. It also ignores the fact that the fruits of the transaction were obtained in Canada as contemplated by the scheme. Their delivery here was not accidental or irrelevant. It was an integral part of the scheme. While it may not in strictness constitute part of the offence, it is, I think, relevant in considering whether a transaction falls outside Canadian territory. For in considering that question we must, in my view, take into account all relevant facts that take place in Canada that may legitimately give this country an interest in prosecuting the offence. One must then consider whether there is anything in those facts that offends international comity. If I may borrow the expression of Meredith J.A., in Bachrack, supra, the law would be lame indeed if its strictures could be avoided by the simple artifice of going outside the country to obtain the fruits of a scheme that was hatched in and largely put into effect in Canada. In this case, the whole operation of obtaining the proceeds of the fraud outside the country was a mere sham and should be treated as such.
72. Indeed, I would agree with Osler J., who heard the application to quash, that the preparatory activities to perpetrate the fraudulent scheme were in themselves sufficient to warrant a holding that the offence took place in Canada. The scheme was devised here, the whole operation that made it function, the directing minds, the boiler room‑‑all were situate in Toronto. The fact that this approach would catch cases where the victims of the scheme were harmed outside the country makes no difference. That would also occur under the gist of the offence test when the monies were obtained in Canada, as it would under the completion of the crime test when the crime was completed here. Apart from this, though the criminal law is undoubtedly intended for the protection of the public, it does not do so solely by the simple expedient of directly protecting the public from harm. Rather, in conformity with its major purpose, it attempts to underline the fundamental values of our society: see the Law Reform Commission of Canada, Report 3, Our Criminal Law (1979). In doing so, it reinforces the law‑abiding sentiments in society. Walsh J. in Shulman v. The King, supra, caught the essence of this when, after noting that "there is more to a...[criminal offence] than its successful culmination", he added: "Its preparation and evolution, even in the case of failure, is reprehensible". It would be a sad commentary on our law if it was limited to underlining society's values by the prosecution of minor offenders while permitting more seasoned practitioners to operate on a world‑wide scale from a Canadian base by the simple manipulation of a technicality of the law's own making. What would be underlined in the public's mind by allowing criminals to go free simply because their operations have grown to international proportions, I shall not attempt to expound.
73. I am also aware that the view I have taken leaves open the possibility that a person could be prosecuted for the same offence in more than one country, but any injustice that might result from this eventuality could be avoided by resort to the pleas of autrefois acquit and autrefois convict, which have been applied to persons tried in other countries; see Burrows v. Jemino (1726), 2 Strange 733, 93 E.R. 815; R. v. Roche (1775), 1 Leach 134, 168 E.R. 169; R. v. Azzopardi (1843), 2 Mood. 288, 169 E.R. 115; R. v. Aughet (1918), 13 Cr. App. R. 101; see also Treacy v. Director of Public Prosecutions, supra.
74. I might summarize my approach to the limits of territoriality in this way. As I see it, all that is necessary to make an offence subject to the jurisdiction of our courts is that a significant portion of the activities constituting that offence took place in Canada. As it is put by modern academics, it is sufficient that there be a "real and substantial link" between an offence and this country, a test well‑known in public and private international law; see Williams and Castel, supra; Hall, supra. As Professor Hall notes (p. 277), this does not require legislation. It was the courts after all that defined the manner in which the doctrine of territoriality applied, and the test proposed simply amounts to a revival of the earlier way of formulating the principle. It is in fact the test that best reconciles all the cases. The only ones that do not fall within it are those like Harden and Rush which, in my view, should no longer be followed.
75. That this approach is attuned to modern times is evident from the fact that some variant of it has been recommended by numerous law reform bodies or adopted in legislation; see, inter alia, the English Law Commission's Report on the Territorial and Extraterritorial Extent of the Criminal Law (Law Com. 91, 1978); the American Law Institute's Model Penal Code (Proposed Official Draft, 1962) § 1.03; the New Zealand Crimes Act, 1961, 1961 (N.Z.), No. 43, s. 7, and the recent Law Reform Commission of Canada Working Paper 37, Extraterritorial Jurisdiction, Part III.
76. Just what may constitute a real and substantial link in a particular case, I need not explore. There were ample links here. The outer limits of the test may, however, well be coterminous with the requirements of international comity.
77. As I have already noted, in some of the early cases the English courts tended to express a narrow view of the territorial application of English law so as to ensure that they did not unduly infringe on the jurisdiction of other states. However, even as early as the late 19th century, following the invention and development of modern means of communication, they began to exercise criminal jurisdiction over transnational transactions as long as a significant part of the chain of action occurred in England. Since then means of communications have proliferated at an accelerating pace and the common interests of states have grown proportionately. Under these circumstances, the notion of comity, which means no more nor less than "kindly and considerate behaviour towards others", has also evolved. How considerate is it of the interests of the United States in this case to permit criminals based in this country to prey on its citizens? How does it conform to its interests or to ours for us to permit such activities when law enforcement agencies in both countries have developed cooperative schemes to prevent and prosecute those engaged in such activities? To ask these questions is to answer them. No issue of comity is involved here. In this regard, I make mine the words of Lord Diplock in Treacy v. Director of Public Prosecutions cited earlier. I also agree with the sentiments expressed by Lord Salmon in Director of Public Prosecutions v. Doot, supra, that we should not be indifferent to the protection of the public in other countries. In a shrinking world, we are all our brother's keepers. In the criminal arena this is underlined by the international cooperative schemes that have been developed among national law enforcement bodies.
78. For these reasons, I have no difficulty in holding on the facts agreed upon for the purpose of this appeal, that the counts of fraud with which the appellant is charged may properly be prosecuted in Canada, and I see nothing in the requirements of international comity that would dictate that this country refrain from exercising its jurisdiction. Since these fraudulent activities took place in Canada, it follows for the reasons set forth in the Chapman case that the conspiracy count may also be proceeded with in Canada.
79. Under these circumstances, I need not enter into a discussion of the apparent conflict between the English case of Board of Trade v. Owen and the Canadian cases such as Bachrack, Ecrement and Shulman regarding the situation where substantially the only overt act that takes place in Canada is the agreement, the substantive offence taking place abroad. There may be a danger, particularly in relation to common law conspiracy, for this country in essence to engage in punishing acts that take place wholly in another country that are not criminal there. This appears to be the major consideration underlying the judgment of the House of Lords in Owen. There is cogency in the argument but there are countervailing arguments that have found favour in the Canadian cases. Since those cases were decided Parliament has provided in s. 423(3) of the Criminal Code that a person who conspires to do anything referred to in subss. 423(1) and (2) in a place outside Canada that is an offence there shall be deemed to have conspired to do that thing in Canada. In establishing an offence under that provision it is necessary not only to prove that the accused violated foreign law outside Canada, but also that that act would have constituted a crime in Canada; see Bolduc v. Attorney General of Quebec, [1982] 1 S.C.R. 573. However, s. 423(3) has no application here; the substantive offence in this case took place in Canada.
80. For these reasons, I would dismiss the appeal.
Appeal dismissed.
Solicitors for the appellant: Danson and Zucker, Toronto.
Solicitor for the respondent: Ministry of the Attorney General for Ontario, Toronto.
Email this Content