SUPREME
COURT OF CANADA
Between:
Tele‑Mobile
Company (a.k.a. Telus Mobility)
Appellant
v.
Her
Majesty The Queen (Ontario) and Her Majesty The Queen (Canada)
Respondents
‑
and ‑
Attorney
General of Quebec, Attorney General of British Columbia,
Canadian
Association of Chiefs of Police and Canadian Bankers Association
Interveners
Coram: McLachlin
C.J. and Bastarache, Binnie, LeBel, Deschamps, Fish, Abella, Charron and
Rothstein JJ.
|
Reasons
for Judgment:
(paras. 1 to
71)
|
Abella J. (McLachlin C.J. and Bastarache,
Binnie, LeBel, Deschamps, Fish, Charron and Rothstein JJ. concurring)
|
______________________________
Tele‑Mobile Co. v. Ontario, [2008] 1 S.C.R. 305, 2008
SCC 12
Tele‑Mobile Company (a.k.a. Telus Mobility) Appellant
v.
Her Majesty
The Queen (Ontario) and
Her Majesty The Queen (Canada) Respondents
and
Attorney
General of Quebec, Attorney General of British Columbia,
Canadian
Association of Chiefs of Police and Canadian Bankers
Association Interveners
Indexed as: Tele‑Mobile Co. v. Ontario
Neutral citation: 2008 SCC 12.
File No.: 31644.
2007: December 13; 2008: March 28.
Present: McLachlin C.J. and Bastarache, Binnie,
LeBel, Deschamps, Fish, Abella, Charron and Rothstein JJ.
on appeal from the court of justice for ontario
Criminal law — Production orders — Exemption from
compliance — Production orders issued to compel third party to provide police
with call records related to separate criminal investigations — Third party
arguing compliance without compensation unreasonable — Whether judge can make
compensation term or condition of production order — Whether financial costs of
compliance with production order unreasonable — Whether exemption should be
granted — Meaning of “unreasonable” in Criminal Code ’s exemption provision —
Criminal Code, R.S.C. 1985, c. C‑46, ss. 487.012 , 487.015(4) .
Amendments to the Criminal Code in 2004
introduced a new investigative tool for law enforcement agencies: a production
order that would compel third parties to produce documents or data for use in
criminal investigations. Two production orders required Telus to produce call
data records. Telus applied for exemptions from the orders on the grounds that
the burden of compliance would be unreasonable without compensation due to the
cost of retrieving the archived data. The Ontario Court of Justice dismissed
the application for exemptions. Telus appealed directly to the Supreme Court,
pursuant to s. 40(1) of the Supreme Court Act , arguing that the
broad wording in s. 487.012(4) of the Criminal Code permitting a
judge to add terms and conditions, allowed for the inclusion of a condition of
the production order directing payment of reasonable costs of compliance.
Held: The appeal should
be dismissed.
The production order scheme in the Criminal Code
does not permit a judge to order compensation for compliance with such orders.
This interpretation is based on the language of the relevant provisions, the
legislative history, the ex parte procedural mechanisms set out in the
legislation, and the principle that compensation is not ordinarily recoverable
in criminal matters. A judge can only consider the financial aspect of
compliance with a production order when deciding whether or not an exemption
order should be made on the basis that the financial burden associated with
compliance is unreasonable. [59]
The outcome of this case depended on the statutory
interpretation of the production order scheme. The legislative history was
significant in discerning the legislator’s intention with respect to compliance.
That history shows that the question of whether compensation should be paid to
telecommunication service providers for the costs of compliance with court
orders was part of an ongoing dialogue with those providers, including Telus.
Telus and other affected businesses and organizations consistently urged the
government to include express language providing for compensation. Parliament
introduced no such language. This reflects an intention that compensation not
be paid for compliance with production orders. [29‑31] [42-43]
The procedural scheme chosen by Parliament also supports
this interpretation. The ex parte procedure for obtaining a production
order or having an order revoked, renewed or varied is not amenable to
determining whether compensation should be a term of the order. Determination
of compensation would require information only obtainable by giving notice and
allowing the subject of the production order to call evidence. Parliament
could have provided for a process for notice and standing to third parties, as
it has done in other Criminal Code provisions, but it did not. [43] [44]
[47] [49]
Parliament acknowledges, in s. 487.015(4) (b)
of the Criminal Code , the potentially unreasonable burden that
production orders could impose by providing for an exemption from such orders,
rather than compensation for compliance with them. The standard of
unreasonableness in s. 487.015(4) (b) is familiar in law and there
is no need to further define it. In essence, the financial consequences must
be so burdensome that it would be unreasonable in the circumstances to expect
compliance. Reasonableness will be informed by a variety of factors, including
the breadth of the order being sought, the size and economic viability of the
object of the order, and the extent of the order’s financial impact on the
party from whom production is sought. Where the party is a repeated target of
production orders, the cumulative impact of multiple orders may also be
relevant. [63] [66‑67]
Based on the evidence, Telus had not established in this
case that the cost of compliance with the production orders was unreasonable.
[69]
Cases Cited
Referred to: Dedman
v. The Queen, [1985] 2 S.C.R. 2; Thomson
Newspapers Ltd. v. Canada (Director of Investigation and Research, Restrictive
Trade Practices Commission), [1990] 1 S.C.R. 425; Canadian Broadcasting
Corp. v. Lessard, [1991] 3 S.C.R. 421; Canada (Attorney General) v.
Pacific International Securities Inc. (2005), 209 C.C.C. (3d) 390, 2006
BCCA 303; Canada (Attorney General) v. Foster (2006), 215 C.C.C. (3d)
59; U.S. v. Jones, 351 F. Supp. 132 (1972); B. (R.) v.
Children’s Aid Society of Metropolitan Toronto, [1995] 1 S.C.R. 315; Canadian
Foundation for Children, Youth and the Law v. Canada (Attorney General),
[2004] 1 S.C.R. 76, 2004 SCC 4.
Statutes and Regulations Cited
Competition Act,
R.S.C. 1985, c. C‑34, ss. 11 , 12 , 30.11 .
Criminal Code, R.S.C.
1985, c. C‑46, ss. 83.28 , 462.32(6) , 462.33(7) , 487.01 , 487.012 to
487.017 [ad. 2004, c. 3, s. 7], 487.015(4)(b), 487.02, 708, 809, 839.
Excise Tax Act, R.S.C.
1985, c. E‑15, s. 107 .
Income Tax Act, R.S.C.
1985, c. 1 (5th Supp .), ss. 231 to 239 .
Mutual Legal Assistance in Criminal Matters Act, R.S.C. 1985, c. 30 (4th Supp .).
Securities Act,
R.S.B.C. 1996, c. 418, s. 144.
Supreme Court Act,
R.S.C. 1985, c. S‑26, s. 40(1) .
Telecommunications Act, S.C. 1993, c. 38 .
Authors Cited
Canada. Department of Justice. Discussion Paper. Lawful
Access: Operational Fees, December 12, 2003.
Canada. Department of Justice. News Release,
“Lawful Access Consultation Submission Summary Report Available on Department
of Justice Website”, August 6, 2003 (online:
http://www.canada.justice.gc.ca/eng/news-nouv/nr-cp/2003/doc_30958.html).
Canada. Department of Justice. Summary of
Submissions to the Lawful Access Consultation, prepared by Nevis Consulting
Group Inc., gen. ed., April 28, 2003 (online:
http://www.canada.justice.gc.ca/eng/cons/la-al/sum-res/sum-res.pdf).
Canada. Department of Justice, Industry Canada,
Solicitor General Canada. Lawful Access — Consultation Document, August
25, 2002.
Canada. Department of Justice, Industry Canada,
Solicitor General Canada. Lawful Access Consultation: Response of the
Canadian Wireless Telecommunications Association, December 16, 2002.
Canada. House of Commons. House of Commons
Debates, vol. 138, 2nd sess., 37th Parl., September 29, 2003, pp. 7933‑34.
Wigmore, John Henry. Evidence in
Trials at Common Law, vol. 8. Revised by John T. McNaughton.
Boston: Little, Brown & Co., 1961.
APPEAL from a judgment of the Ontario Court of Justice
(Vaillancourt J.) (2006), 81 O.R. (3d) 745, [2006] O.J. No. 2589 (QL),
2006 CarswellOnt 3896, 2006 ONCJ 229, dismissing an application for exemption
from a production order. Appeal dismissed.
Paul Burstein and Frank
Addario, for the appellant.
Randy Schwartz and
Joseph Perfetto, for the respondent Her Majesty the Queen (Ontario).
Janet Henchey and Robert
Frater, for the respondent Her Majesty the Queen (Canada).
Brigitte Bussières and Gilles
Laporte, for the intervener the Attorney General of Quebec.
Trevor Shaw and Gordon
Comer, for the intervener the Attorney General of British Columbia.
David Migicovsky
and Margaret R. Truesdale, for the intervener the Canadian
Association of Chiefs of Police.
Paul J. Martin
and Charles A. Toth, for the intervener the Canadian Bankers
Association.
The judgment of the Court was delivered by
[1]
Abella J. — A new
investigative tool was introduced to the Criminal Code in 2004: the
production order. Production orders compel third parties in possession of
information relevant to a criminal investigation to produce and generate
documents and data for law enforcement agencies. The Tele-Mobile Company
(“Telus”) argued that requiring it to comply with production orders without
compensation was unreasonable.
[2]
The issue in this case is whether a judge has the power to make it a
term or condition of a production order that the police compensate a third
party for expenses incurred in complying with the order. In my view, there is
no power to order compensation under the production order scheme. Where the
financial costs of compliance are unreasonable, the remedy lies in a full or
partial exemption from the production order.
[3]
The parties in this case agree that while there may be a number of
factors making a production order unreasonable, this appeal is limited to a
consideration of the reasonableness of the financial burden of compliance. The
burden on Telus was found not to be unreasonable by Vaillancourt J. I agree
with his conclusion.
Background
[4]
The scheme governing the use of production orders is found in ss.
487.012 to 487.017 of the Criminal Code, R.S.C. 1985, c. C-46 . The
relevant provisions (added by S.C. 2004, c. 3, s. 7 ) state:
487.012 (1) [Production order] A justice or judge may order a
person, other than a person under investigation for an offence referred to in
paragraph (3)(a),
(a)
to produce documents, or copies of them certified by affidavit to be true
copies, or to produce data; or
(b)
to prepare a document based on documents or data already in existence and
produce it.
(2) [Production to peace officer] The order shall require the
documents or data to be produced within the time, at the place and in the form
specified and given
(a)
to a peace officer named in the order; or
(b)
to a public officer named in the order, who has been appointed or designated to
administer or enforce a federal or provincial law and whose duties include the
enforcement of this or any other Act of Parliament.
(3) [Conditions for issuance of order] Before making an order, the
justice or judge must be satisfied, on the basis of an ex parte
application containing information on oath in writing, that there are
reasonable grounds to believe that
(a)
an offence against this Act or any other Act of Parliament has been or is
suspected to have been committed;
(b)
the documents or data will afford evidence respecting the commission of the offence;
and
(c)
the person who is subject to the order has possession or control of the
documents or data.
(4) [Terms and conditions] The order may contain any terms and
conditions that the justice or judge considers advisable in the circumstances,
including terms and conditions to protect a privileged communication between a
lawyer and their client or, in the province of Quebec, between a lawyer or a
notary and their client.
(5) [Power to revoke, renew or vary order] The justice or judge who
made the order, or a judge of the same territorial division, may revoke, renew
or vary the order on an ex parte application made by the peace officer
or public officer named in the order.
. . .
487.014 (1) [Power of peace officer] For greater certainty, no
production order is necessary for a peace officer or public officer enforcing
or administering this or any other Act of Parliament to ask a person to
voluntarily provide to the officer documents, data or information that the
person is not prohibited by law from disclosing.
(2) [Application of section 25] A person who provides documents, data
or information in the circumstances referred to in subsection (1) is deemed to
be authorized to do so for the purposes of section 25.
487.015 (1) [Application for exemption] A person named in an
order made under section 487.012 and a financial institution, person or entity
named in an order made under section 487.013 may, before the order expires,
apply in writing to the judge who issued the order, or a judge of the same
territorial division as the judge or justice who issued the order, for an
exemption from the requirement to produce any document, data or information
referred to in the order.
(2) [Notice] A person, financial institution or entity may only make
an application under subsection (1) if they give notice of their intention to
do so to the peace officer or public officer named in the order, within 30 days
after it is made.
(3) [Order suspended] The execution of a production order is suspended
in respect of any document, data or information referred to in the application
for exemption until a final decision is made in respect of the application.
(4)
[Exemption] The judge may grant the exemption if satisfied that
(a)
the document, data or information would disclose information that is privileged
or otherwise protected from disclosure by law;
(b) it
is unreasonable to require the applicant to produce the document, data or
information; or
(c)
the document, data or information is not in the possession or control of the
applicant.
487.017 [Offence] A financial institution,
person or entity who does not comply with a production order made under section
487.012 or 487.013 is guilty of an offence and liable on summary conviction to
a fine not exceeding $250,000 or imprisonment for a term not exceeding six
months, or to both.
[5]
This case arises out of two production orders issued pursuant to s.
487.012 of the Criminal Code , requiring Telus to produce call records
related to separate criminal investigations. The first was granted to the
Toronto Police Service on September 30, 2004, compelling Telus to produce a
report outlining the call data records relating to one of its subscribers who
was the subject of a murder investigation. The order provided:
WHEREAS IT
APPEARS UPON the Information of . . . a Peace Officer;
That there are
reasonable grounds to believe that an offence against the Criminal Code has
been committed, namely
First Degree
Murder . . .
AND UPON being
satisfied that the requested documents will afford evidence in respect of the
commission of the offence.
AND UPON being
satisfied that the persons who are the subject of this Order have possession or
control of the requested data.
IT IS ORDERED
that . . . the Director of Regulatory Affairs and Government Relations or any
other person occupying that position in a permanent or acting capacity, of the
TELE MOBILE COMPANY, otherwise known as Telus Mobility, produce, based on data
already in existence, the documents listed below:
(a) A report setting out all network activity records including
dialed numbers for outgoing calls, caller line identification for incoming
calls, automatic network registrations if available, and the time, date and
duration for each of these network events pertaining to the Telus Mobility
wireless telephone service [telephone number] from and including the dates of
March 10th, 2004 to March 24th, 2004, and
(b) A report setting out the cell site location and, if available,
cell sector information for all network events pertaining to the Telus Mobility
wireless telephone service [telephone number] from and including the dates of
March 10th, 2004 to March 24th, 2004.
This
Production Order is subject to the following terms and conditions:
(a) Within two business days of receiving a copy of this Order, the
person named will provide a report to the Officer indicating how long it will
take for the documents/data pursuant to this Order to be produced, and
(b) Copies of documents produced pursuant to this
Order need not be returned to the person named in this Order.
[6]
The second production order was obtained by the Ontario Provincial
Police on October 5, 2004, compelling Telus to produce call data records relevant
to a drug investigation. Specifically, it required Telus to produce:
A report
setting out:
(a) Records of all incoming and outgoing telephone numbers,
automatic network registrations (ie. Subscriber information for each outgoing
and incoming telephone number), and the time, date, and duration for each event
for the period of August 1, 2003 up to and including January 12, 2004 contained
in the form of data storage media otherwise known as magnetic tape or tapes
containing raw data showing activity records on the Tele-mobile Company
wireless network for the following cellular telephone numbers:
.
. .
The manner of
production of the documents/data will be:
.
. .
prepare a document described herein based on documents or data already in
existence and produce it. Provide an affidavit attesting that the prepared
document was prepared from original documents.
[7]
On July 14, 2005, Telus filed two applications under s. 487.015 of the Criminal
Code , seeking exemptions from each of the two production orders on the
basis that the financial burden of compliance would be unreasonable without
compensation.
[8]
Telus had already “archived” the information sought in both production
orders, that is, the raw data had been transferred to a magnetic tape and kept offsite.
In order to recover the information, the tapes had to be retrieved from the
archives, a process described in an affidavit by Telus’ Manager of Production
Operations:
The process for the recovery of archived data
includes identifying and locating the relevant magnetic tapes, arranging for
their transport from an off site location back to our computer processing
facilities, mounting the tapes onto a dedicated storage facility, searching the
tapes and processing the search results. There are substantial labour and
equipment costs engaged by this process.
[9]
By the time of the hearing, Telus had complied with both production
orders. It had also entered into an agreement with the Toronto Police Service
whereby the police would pay Telus “reasonable compensation” for the production
of archived data if its exemption application were successful.
[10]
The two applications were heard together by Vaillancourt J. in the
Ontario Court of Justice ((2006), 81 O.R. (3d) 745, 2006 ONCJ 229). He
identified several bases for concluding that the statutory scheme does not
allow a court to order that the police
compensate a
third party for the costs of compliance with production orders. He firstly
defined the function of the judge issuing the order as being to “consider the
statutory test for the issuance of the order, having regard to the
Constitutional rights impacted by the order and the interest of society in the
enforcement of its laws, and ultimately to determine if it is reasonable to
make the order” (para. 19). In his view, Telus’ claim for compensation had
nothing to do with these functions.
[11]
Secondly, Vaillancourt J. emphasized that production orders are obtained
in ex parte proceedings, proceedings which are not therefore conducive
to consideration of the issue of compensation. The police making the
application would not have the requisite information to enable a judge to
determine whether compensation is appropriate. This led Vaillancourt J. to
conclude that the design of the procedure did not make adjudicating claims for
compensation feasible. In other contexts, he noted, the Criminal Code
has provided a framework for third parties to assert their interests. This
framework is notably absent in connection with production orders.
[12]
Finally, Vaillancourt J. found that the exemption provision in s.
487.015 is unambiguous and limits the court’s jurisdiction either to granting
or not granting an exemption from a production order. The provision gives no
jurisdiction to vary or amend the original production order by adding
compensation. It is the availability of an exemption that ensures that no
unfairness flows from the fact that an issuing judge does not have the power to
make an order respecting compensation.
[13]
On an exemption application, Vaillancourt J. noted that an applicant has
the onus of satisfying the court, on a balance of probabilities, that one or
more of the statutory criteria for exemption applies. The only relevant
criterion in this case is found in s. 487.015(4) (b), which states that
“it is unreasonable to require the applicant to produce the document, data or
information”. The question then is whether production is “unreasonable” when
it is ordered without compensation.
[14]
Vaillancourt J. concluded that compliance without compensation, without
more, is not itself unreasonable. In his view, citizens and corporations have
a duty to assist in the enforcement of the laws of the state. This necessarily
requires that reasonable costs be borne. As he stated, “It is only where the
costs of providing assistance become overly burdensome that society’s interest
in the effective enforcement of its laws must yield to the individual interest
in conducting one’s affairs without interference from the state” (para. 43).
[15]
The duties placed on other participants in the criminal justice system,
like jurors and witnesses reflect this reality, and require that those
participants bear their own — often significant — costs. Vaillancourt J. found
that it was reasonable to assume that Parliament, by not providing for
compensation in production orders, intended the same principles to apply unless
compliance became unreasonable.
[16]
He rejected the Crown’s proposed standard of “undue hardship” as the
point at which compliance becomes unreasonable, instead finding that “an
applicant must demonstrate that the expenditure is significant to its financial
health” (para. 96).
[17]
All the parties argued the application using projected annual costs of
compliance rather than the financial burden imposed by the two specific
production orders in this case. Based on an annual estimated cost to Telus of
$662,000 for the retrieval of archived data, Vaillancourt J. concluded that
this projection amounted to
— 0.0087 per
cent of Telus Consolidated’s Operating Revenue for 2004
— 0.011 per
cent of Telus Consolidated’s Operating Expenses for 2004
— 0.12 per
cent of Telus Consolidated’s Net Income for 2004
— 0.023 per
cent of Telus Mobility’s Operating Revenue for 2004
— 0.039 per
cent of Telus Mobility’s Operating Expenses for 2004
— 0.058 per cent of Telus Mobility’s Earnings Before Interest, Taxes,
Depreciation and Amortization for 2004 [para. 49]
[18]
His overall conclusion on reasonableness was that, based on these
figures, the cost of compliance was not unreasonable in the circumstances.
[19]
Telus appealed directly to this Court pursuant to s. 40(1) of the Supreme
Court Act, R.S.C. 1985, c. S-26 .
[20]
It is Telus’ position that the broad wording in s. 487.012(4) ,
permitting a judge to add terms and conditions, allows for the inclusion in the
production order of a
condition that
the law enforcement agency pay the reasonable costs of compliance where:
1. The expense is greater than de minimus;
2. The party is one frequently called upon to assist in the
investigation of crime; and,
3. There is expertise involved in retrieving data and providing it to
the police.
[21]
In Telus’ submission, the question of when the expense will be greater
than de minimus will be determined in an exemption application brought
by the object of the order. Once the judge hearing the exemption application
determines the cost to be unreasonable, the police can then go back before a
judge, pursuant to s. 487.012(5), and request that the order be varied to
include a requirement of reasonable compensation. Telus submitted that the
amount of reasonable compensation would be worked out between industry and law
enforcement agencies, as it was in the agreement it reached with the Toronto
police in this case. Over time, Telus argued, an industry standard would
develop so that the police know at the outset when a provision for reasonable
compensation is required in the order. This would make the intermediate step
of an exemption application unnecessary.
[22]
Telus sought to distinguish itself from other unpaid or
under-compensated actors in the criminal justice system, such as jurors and
witnesses, on the basis that it is called upon repeatedly to assist in law
enforcement. It has a “Fraud and Wireless Security Management” department to
facilitate timely responses to requests from law enforcement agencies for
customer information. In 2004, it responded to 2,823 warrants seeking customer
records. That, it argued, makes it more like those who have regular contact
with the justice system, such as judges and expert witnesses, who are
compensated for their contribution.
[23]
The Canadian Bankers Association intervened. Its members are frequently
the object of production orders. The Association argued that while it would
rarely be appropriate for a judge to impose a term requiring payment of
reasonable costs of compliance with a production order on the original ex
parte application, a production order will be “unreasonable” — and
therefore subject to an exemption under s. 487.015 — when compliance with the
order would have a considerable adverse operational or financial impact on the
party subject to it. Upon finding such an impact, the judge’s powers are not
limited to granting the exemption; they extend to variation of the production
order, including the addition of terms for payment of costs or extended time
for compliance. This interpretation, it argued, is consistent with the desire
to facilitate compliance while avoiding unreasonable burdens.
[24]
The position of the Crowns (Federal, Ontario, Quebec and British
Columbia) is that it is clear from a plain reading of the legislation that a
judge has no authority under ss. 487.012(4) , (5) or 487.015 to make an order
for compensation. The permissible terms and conditions of a production order
relate solely to factors pertaining to the execution of the order. These terms
do not include terms designed to minimize the financial impact of compliance.
[25]
The Crowns submitted that only in exceptional circumstances, where the
costs of compliance amount to “undue hardship”, does the object of the
production order have a remedy in the form of an exemption pursuant to s.
487.015 . This threshold denotes an oppressive burden that amounts to more than
just a significant or considerable impact. The need for citizens to be
involved in the efficient administration of the criminal justice system is well
established. Like jury duty, the Criminal Code provides the option of
being excused from compliance with a production order if the burden is too
onerous to be reasonably borne. In both cases, the Crowns argued, the
exempting conditions must be strict.
[26]
The Canadian Association of Chiefs of Police agreed with the Crowns’
submission that an exemption from compliance under s. 487.015 should only be
available when the financial burden amounts to undue hardship.
Analysis
[27]
Three questions are to be answered in this case:
1. Do ss. 487.012(4), (5), and/or 487.015 of the Criminal Code give
a judge the power to make it a term or condition of a production order that the
police reimburse an innocent third party for reasonable expenses incurred in
complying with the order?
2. When should an exemption order be made on the basis that the
financial burden associated with compliance is “unreasonable”?
3. Should an exemption have been granted to Telus in this case?
[28]
As previously noted, Telus relied on the language of s. 487.012(4) to
argue that even though the power to do so is not specifically mentioned, a
judge issuing a production order has the authority to make reasonable
compensation a term of the production order. That provision states:
(4) [Terms and conditions] The order may contain any
terms and conditions that the justice or judge considers advisable in the
circumstances, including terms and conditions to protect a privileged
communication between a lawyer and their client or, in the province of Quebec,
between a lawyer or a notary and their client.
Telus argued
that s. 487.012(5) implicitly confers the same power:
(5) [Power to revoke, renew or vary order] The
justice or judge who made the order, or a judge of the same territorial
division, may revoke, renew or vary the order on an ex parte application
made by the peace officer or public officer named in the order.
[29]
The outcome of this case depends on statutory interpretation. The
legislation makes no reference to compensation. This ambiguity requires us to
examine the scheme, object and context of the production order provisions.
[30]
A review of the history preceding the creation of the production order
scheme is significant in discerning what the legislature’s intention was in
connection with compensation for compliance. That history shows that the
question of whether compensation should be paid to telecommunications service
providers for the costs of compliance with court orders has been part of an
ongoing conversation between these providers and the government for some time.
[31]
The position of telecommunications service providers, including Telus,
has consistently been that they are entitled to be reimbursed for expenses
incurred in complying with court orders. Parliament’s decision not to include
an express right of compensation in the scheme is given added significance when
understood in light of this history. In view of its critical role in this
interpretive analysis, and of Telus’ active part in it, the history is set out
in some detail.
[32]
In 1999, telecommunications service providers asserted their claim to
compensation before the Canadian Radio‑television and Telecommunications
Commission (“CRTC”). Telus had initiated the proceeding, proposing a tariff
that would apply to court-ordered wiretaps and production of confidential
subscriber information to law enforcement agencies. Telus’ application was
opposed by several police and government departments.
[33]
The CRTC issued Order No. 2000-676 on July 21, 2000, concluding that it
did not have jurisdiction to approve the tariff under the Telecommunications
Act, S.C. 1993, c. 38 :
In the
circumstances, the Commission considers that compensation for compliance with
court orders, notwithstanding the ancillary involvement of telecommunications,
is best dealt with by the courts.
If there is a concern that the current regime (where compensation for
compliance with court orders is left to the discretion of the courts) is not
appropriate given the potentially mounting costs, it is open to Parliament to
address the issue explicitly through legislative amendments. [paras. 12-13]
[34]
Industry and law enforcement representatives debated, inconclusively,
the meaning of this Order, as noted by the Department of Justice in a
discussion paper:
Some law
enforcement agencies interpreted the decision as a partial victory because the
Commission refrained from exerting its jurisdiction with respect to
court-ordered “services”. These law enforcement agencies took the position
that if the CRTC would not tariff such “services”, Telus could not charge fees
for such “services”. On the other hand, Telus believed, it would appear, that
the decision does not mean that telecommunications service providers were
prohibited from charging a fee for “services” rendered pursuant to a court
order.
(Department of Justice, Discussion Paper, Lawful Access: Operational
Fees, December 12, 2003, at p. 15)
[35]
The issue gained renewed visibility when the Department of Justice,
jointly with Industry Canada and the Solicitor General Canada, released a
consultation document inviting submissions on how to improve and modernize law
enforcement’s ability to intercept communications and obtain information of
assistance in the investigation of crime. The document identified the
following as the bases for the exercise:
(1) the need
to bring the provisions of the law into concordance with new telecommunications
technology; (2) the need for all telecommunications service providers to ensure
that the technical capability in their facilities permits lawful access by law
enforcement and national security agencies; and (3) the need for Canada to
adopt statutory measures that will permit ratification of the Council of Europe
Convention on Cyber-Crime [CETS No. 185, Article 18(1), requiring
participating countries to legislate the availability of production orders]
(Government of Canada, Lawful Access — Consultation Document,
August 25, 2002, at p. 6)
This document
generated more than 300 submissions (Canada, Department of Justice, News
Release: “Lawful Access Consultation Submission Summary Report Available on
Department of Justice Website”, August 6, 2003).
[36]
Among the groups making submissions on behalf of industry were Telus,
the Canadian Cable Television Association, and the Canadian Wireless Telecommunications
Association. Their position with respect to the costs of compliance with
lawful access requests was summarized in a government report entitled Summary
of Submissions to the Lawful Access Consultation, April 28, 2003:
The legislation should ensure that law enforcement
agencies remain responsible for reasonable costs incurred by service providers
making operational assistance available to law enforcement agencies in carrying
out lawful interception, seizure and preservation orders. These costs should
be worked out between each service provider and the agency concerned rather
than being based on universal tariffs laid out in the regulations for various
types of support. Industry Canada and the Solicitor General, or an independent
arbitrator, should mediate any disputes about fees for service between a
[communication service provider] and a law enforcement agency. [p. 7]
The Canadian
Wireless Telecommunications Association submitted “that the new legislation
should enshrine the principle that law enforcement should pay service providers
for assistance provided” (Lawful Access Consultation: Response of the
Canadian Wireless Telecommunications Association, December 16, 2002, at
para. 62).
[37]
In response to contrary submissions by law enforcement agencies who
argued that no compensation be payable, Telus’ EVP - Corporate Affairs and
General counsel wrote a letter in April 2003 to the then Minister of Justice
seeking express language in the proposed legislation which would require that
compensation be paid for providing lawful information to law enforcement
agencies:
Currently, a
couple of law enforcement agencies refuse to pay TELUS for court-ordered
services, relying on the fact that the court order usually does not require
that compensation be paid. It should be noted, however, that these orders are
obtained by [law enforcement agencies] on an ex parte basis, and the
court is not asked to consider whether compensation should be required. If the
court were asked to turn its mind to this issue and to consider the cost to the
service provider of complying with the order, it is likely that some
compensation would be ordered.
.
. .
I agree . . . that we need a legislated resolution to this issue.
Consistent with the views expressed by other telecom carriers, TELUS
recommends that the proposed legislation expressly require that [law
enforcement agencies] compensate service providers for their reasonable costs
of providing lawful access services. To the extent that [law enforcement
agencies] may require additional funds to do so, this support should be
provided by government and ultimately by the general taxpayer. . . . [C]lear
legislation will put an end to the current confusion and will benefit both law
enforcement and the telecommunications industry. [Emphasis added.]
[38]
On December 12, 2003, the Department of Justice published its discussion
paper entitled Lawful Access: Operational Fees, setting out the
“circumstances that gave rise to the complexity of lawful access operational
fees in the telecommunications sphere” (p. 1) and suggesting options to address
those fees. The authors of the paper noted:
Based on some of the wording of the Criminal Code in relation to
the issuance of the various court orders and the interpretation of that
wording, some argue that the courts might have an implied discretion to make
terms and conditions, including compensatory terms, in relation to warrants and
other legal demands. However, it would be surprising if courts would be in
a position to exert such jurisdiction absent express and clear wording in the Criminal
Code . Section 840 of the Criminal Code is the only section that
contains a schedule of fees. This schedule relates to a number of criminal
procedural matters, but only in relation to proceedings taken before summary
conviction courts or justices. There is no schedule of payments for proceedings
commenced by way of indictment in the Criminal Code . In some provinces,
witness fees are established in relevant administration of justice legislation.
[Emphasis added; p. 8.]
[39]
Notably, the question of compensation for compliance with production
orders was squarely in view:
An additional
factor that needs to be recognized in determining whether or not third parties
should be compensated for helping to execute court orders is the impact of the
new procedural tools being proposed within the context of the lawful access
initiative. The Lawful Access consultation document proposes the
creation of a number of new procedural tools to help law enforcement agencies
in performing their tasks whether or not in the context of the fight against
cyber-crime. Such proposals have raised significant concerns from third parties
other than service providers, such as banks or securities organizations, that
have raised concerns about the additional tasks that could be imposed on them
as a result of these new court orders. Their
main concern,
especially in relation to the proposed production orders, relates to law
enforcement agencies relying more and more on private sector entities to do the
work law enforcement agencies would be tasked with through the issuance of such
search warrants.
One way of
alleviating the previously noted concern would be to specifically provide in
the legislation creating these orders for the possibility for courts to provide
for third parties to be compensated for the payment of any unduly burdensome or
unreasonable costs. However, any specific provision to that effect would
open once again the issue of why third parties should be compensated for work
they undertake pursuant to their duties as good corporate citizens. Although
the increased workload resulting from the multiplication of court orders in
relation to specific types of third parties (e.g., service providers) is
certainly an argument that cannot be discounted,
a general obligation on governments (either per se or through its
law enforcement agencies) to pay for assistance with the execution of court
orders would create a financial strain on already limited resources in the
field of the administration of justice. [Emphasis added; footnote deleted; pp.
33-34.]
[40]
On June 12, 2003, Bill C-46, An Act to amend the Criminal Code
(capital markets fraud and evidence-gathering), was introduced. The Bill
proposed various amendments to the Criminal Code , including the creation
of the new production order scheme found in ss. 487.012 to 487.017 . At second
reading, Paul Harold Macklin, the Parliamentary Secretary to the then Minister
of Justice, explained the impetus behind the new investigative tool:
Production
orders are similar to search warrants. Whereas a search warrant allows police
to search a certain place for evidence, a production order compels a person to
produce the relevant information to the police.
Although this investigative tool is new to the Criminal Code , it
already exists in Canadian law, notably under the Competition Act and in
limited circumstances under other statutes. Further, it could also be
characterized as a codification of current practices. For example, today when a
police officer enters a bank with a warrant to seize record[s], he does not
usually shut down the bank to get those records. Nor will he seize the bank’s
computer system.
What generally happens is that the holder of the information sought in
the warrant will generally produce that information to the police himself. The
reason for this is twofold: first, it is more convenient for the bank, since
its business operations are not being interrupted; and second, it is more cost
effective and less time consuming for the police.
.
. .
Law enforcement agencies and crown prosecutors have been asking for a
new investigative tool for some time and with the proliferation of the
Internet and the widespread adoption of new communications technologies,
the timing is right for this form of investigative tool.
The production orders will solve a number of nagging issues for
investigators including extraterritorial searches and timing issues. Under
these new orders, persons who have possession or control of documents, data or
information will have to produce that information whether it resides in Canada
or abroad. Thus, as long as they have possession or control over the relevant
information, they will be required to produce it no matter where it is located.
This solves the problem that has in part been created by inexpensive
overseas data warehousing.
Second, the new production orders will be time sensitive so that the
third party served with the order will either have to produce the information
within the time specified in the order or report back to the court within the
specified time as to why he or she cannot comply. This solves the problem of
the inherent nature of informal arrangements which is they are informal and
they often lack specific mechanisms such as timing mechanisms.
.
. .
. . . Before issuing the order, the judge or justice must be
satisfied that there are reasonable grounds to believe an offence has been
committed, that the specific documents or data will afford evidence relating to
the commission of the offence and that the recipient of the order has
possession or control of these documents or data. These are the same basic
judicial safeguards as required by the existing Criminal Code search warrant
provisions. [Emphasis added.]
(House of Commons Debates, vol. 138, 2nd sess., 37th Parl.,
September 29, 2003, at pp. 7933-34)
[41]
There is no mention of compensation for the cost of compliance with the
orders. Instead, the only conditions of which the issuing judge must be
satisfied are those set out in s. 487.012(3), namely that
(a) an
offence against this Act or any other Act of Parliament has been or is
suspected to have been committed;
(b) the
documents or data will afford evidence respecting the commission of the
offence; and
(c) the person who is subject to the order has possession or
control of the documents or data.
Notably, no
mention is made of any factors relating either to hardship or costs incurred by
the object of the order.
[42]
While it cannot be said that legislative silence is necessarily
determinative of legislative intention, in this case the silence is
Parliament’s answer to the consistent urging of Telus and other affected
businesses and organizations that there be express
language in the
legislation to ensure that businesses can be reimbursed for the reasonable
costs of
complying with evidence-gathering orders. I see the legislative history as
reflecting Parliament’s intention that compensation not be paid for compliance
with production orders.
[43]
The procedural scheme chosen by Parliament also reflects an intention
that compensation not be ordered for complying with production orders.
[44]
The process outlined in s. 487.012 and s. 487.015 is triggered when a
peace officer makes an ex parte application before a judge (s.
487.012(3)). The judge may issue the order requiring the production or
preparation of documents or data where there
are reasonable
grounds to believe that an offence has been or is suspected to have been
committed, that the information sought is relevant to an ongoing investigation
and that it is in the possession of the object of the order (s. 487.012(1) and
(3)). The order may include “any terms and conditions that the justice or
judge considers advisable in the circumstances” (s. 487.012(4)). The peace
officer named in the order can apply at any time to the issuing justice or a
judge in the jurisdiction, in an ex parte application, to revoke, renew
or vary the original order (s. 487.012(5)).
[45]
The object of the order can apply at any time before it expires for an
exemption from compliance on the basis that the information sought is
privileged, that it is not in the object’s possession or control, or that it
would be unreasonable to require the object to produce the information (s. 487.015(1)
and (4) ). Initiation of the exemption application suspends the execution of the
order (s. 487.015(3)). A production order is unnecessary if parties make their
own arrangements for the voluntary provision of the documents or information,
so long as they are not prohibited by law from disclosing the information (s.
487.014).
[46]
The process set out in ss. 487.012 and 487.015 for obtaining a
production order confirms that Parliament did not intend the issuing judge to
consider the potentially complex and contentious question of cost at the stage
of issuing the production order, since to do so would contradict Parliament’s
intention to create a cost‑effective and timely mechanism for obtaining
information related to an investigation.
[47]
The ex parte procedure delineated in the legislation is not a
procedure amenable to determining whether compensation should be a term of the
order, which would require the issuing judge to have information about the cost
of compliance with the order and its impact on the person required to comply.
That information could only be obtained by giving notice to that person and
allowing him or her to call some evidence to support a claim for compensation.
Neither contingency is provided for in the legislation. Moreover, as
Vaillancourt J. observed, “[t]he adjudication of costs at this stage of the
proceedings would have the potential of hindering the confidentiality of the
investigation and frustrate the investigative goals of the authorities” (para.
30).
[48]
Similarly, a judge considering whether to “revoke, renew or vary the
order” under s. 487.012(5), does so in an ex parte application “made by
the peace officer or public officer named in the order”. Again, had Parliament
intended this procedure be used to adjudicate the issue of compensation, it
could reasonably be expected to have provided for a process whereby any party
could bring an application to vary the order so that the application could be
heard inter partes.
[49]
In other contexts, the Criminal Code does include provisions for
giving notice and standing to third parties whose interests are engaged. In
his reasons, Vaillancourt J. points to the following examples:
— Section 278
of the Code deals with the notice (s. 278.3(5)) and standing (s. 278.4(2))
provided to a complainant or witness regarding the production of their
confidential records.
— Part XII.2
of the Code involving the proceeds of Crime provides notice (ss. 462.32(5);
462.33(5); 462.41) and a detailed application process for innocent third parties
(ss. 462.41(3); 462.42) as well as an appeal process (s. 462.44).
— Sections 490.1-490.9 [deal] with offence-related property and claims
to that property by persons with a valid interest in the property. Provisions
for notice (s. 490.4), the application process (s. 490.5) and appeal (s. 490.6)
are included. [para. 31]
[50]
The conclusion that a judge cannot order compensation for compliance
with a production order also accords with what this Court affirmed as a general
“moral” and “social” duty imposed on citizens. Dickson C.J. explained the duty
in his dissenting reasons in Dedman v. The Queen, [1985] 2 S.C.R. 2, as
follows:
Society as a whole bears responsibility for the maintenance of law and
order; co‑operation between the public and the police is essential to the
effective fulfilment of the already difficult tasks performed by the police.
[p. 19]
(See also Thomson
Newspapers Ltd. v. Canada (Director of Investigation and Research, Restrictive
Trade Practices Commission), [1990] 1 S.C.R. 425, at p. 576, and Canadian
Broadcasting Corp. v. Lessard, [1991] 3 S.C.R. 421, at p. 447.)
[51]
Wigmore’s reflections on the burdens imposed on witnesses in criminal
trials also resonate:
[I]t may be a
sacrifice of time and labor, and thus of ease, of profits, of livelihood. This
contribution is not to be regarded as a gratuity, or a courtesy, or an
ill-required favor. It is a duty not to be grudged or evaded. Whoever is
impelled to evade or to resent it should retire from the society of organized
and civilized communities, and become a hermit. He who will live by society
must let society live by him, when it requires to.
(Wigmore on Evidence (McNaughton rev. 1961), vol. 8, at
§2192, p. 72)
[52]
This duty does not, however, give the state a licence to abusively
exploit the public’s civic responsibilities. That is why the scheme for
production orders includes relief in the form of an exemption where compliance
would be “unreasonable”.
[53]
The duty to assist in the administration of justice was recently
canvassed by the Courts of Appeal of British Columbia and Ontario in cases
dealing with whether the evidence-gathering provisions found in the Mutual
Legal Assistance in Criminal Matters Act, R.S.C. 1985, c. 30 (4th Supp .),
permit a court to order that the object of the order be compensated for the
production of evidence.
[54]
In Canada (Attorney General) v. Pacific International Securities Inc.
(2005), 209 C.C.C. (3d) 390, 2006 BCCA 303, the British Columbia Court of
Appeal concluded that there was no power to order compensation. The Ontario
Court of Appeal, on the
other hand,
concluded in Canada (Attorney General) v. Foster (2006), 215 C.C.C. (3d)
59, that there was discretion in the provisions to order compensation where
failure to do so would amount to undue hardship.
[55]
The statutory scheme under consideration in those cases was
significantly different from the production order scheme, but in their reasons,
both courts expressed general legal principles relevant to the interpretive
exercise before us. In Foster, Rosenberg J.A. noted:
In considering
a costs order, the paramount principle to bear in mind is that in criminal
matters costs are ordinarily not recoverable from, nor paid to, the Crown, the
accused or third parties, even where there is a statutory basis for awarding
costs. . . .
. . .
. . . Absent an express statutory basis, as for example can
be found in the victim compensation and restitution provisions of the Criminal
Code , a court dealing with criminal matters is not ordinarily concerned
with compensation for losses incurred in the course of criminal proceedings.
Compensation of innocent third parties is generally left to civil proceedings. Common
laws courts have consistently recognized that the investigation of crime is a
responsibility of society as a whole that includes an obligation to provide
evidence, even though the cost of doing so may be burdensome financially and
psychologically.
. . .
The general rule that witnesses and other innocent third parties (like
the innocent accused) are not compensated for losses and expenses occasioned by
the criminal process exists despite the fact that these costs can be onerous.
[Emphasis added; paras. 56, 59 and 65.]
[56]
In Pacific, Ryan J.A., writing for the majority of the British
Columbia Court of Appeal, observed:
. . . the [Mutual Legal Assistance in Criminal Matters Act ] should
be examined in the context of the longstanding practice in criminal law that
neither costs nor expenses are recoverable by persons involved in the
proceedings except in exceptional circumstances. Witnesses and jurors are not
paid their lost wages as a result of their compelled participation in the
criminal process. Witnesses who produce documents for use at the trial are not
entitled to be compensated for the expense of their production. . . . [T]his
policy stems from the accepted principle that the criminal justice system
functions for the good of all members of society. Consequently, society
requires members of the public to contribute to its effective operation. [para.
54]
[57]
This basic public duty finds expression in several laws. There is, for
example, no legislated right to compensation for compliance with general
warrants and assistance orders (ss. 487.01 and 487.02 of the Criminal Code ).
In addition, s. 83.28 of the Criminal Code , though no longer in force,
required a person named in an “order for the gathering of information” to
attend before a judge as a witness and produce material to assist in the
evidence-gathering process, with no legislated right of compensation. There
are also provisions in federal and provincial regulatory statutes compelling
the production of documents and testimony with no legislated right to
compensation for the costs of compliance (aside from ordinary witness fees),
such as the Competition Act, R.S.C. 1985, c. C-34, ss. 11 , 12 and 30.11 ;
Excise Tax Act, R.S.C. 1985, c. E-15, s. 107 ; Income Tax Act,
R.S.C. 1985, c. 1 (5th Supp .), ss. 231 to 239 ; and the Securities Act,
R.S.B.C. 1996, c. 418, s. 144.
[58]
On the other hand, there are provisions in the Criminal Code where
courts are explicitly given jurisdiction to award costs:
· Sections 462.32(6) and 462.33(7) , authorizing the seizure and
restraint of proceeds of crime, which state that the issuing judge shall
require an undertaking from the Attorney General of Canada for the payment of
damages or cost, or both, in relation to the execution of the order;
· Section 708, which provides that a court may order the payment of
costs incidental to the service of process in relation to a conviction for
contempt;
· Section 809, which gives a summary conviction court the power to order
such costs as it considers reasonable; and
· Section 839, which provides that orders of costs may be made in
relation to summary conviction appeals.
[59]
In the absence of a specific provision permitting the recovery of costs
in the production order scheme, therefore, and in light of the legislative
history, the ex parte procedural mechanisms set out in the legislation,
and the principle that compensation is
not ordinarily
recoverable in criminal matters (Foster, at para. 56), I agree with Vaillancourt
J. that s. 487.012(4) and (5) cannot be interpreted so broadly as to permit a
judge to order compensation for compliance with production orders.
[60]
I accept Telus’ concern that because of the nature of its business, it
will necessarily be the object of repeated production orders but, as an
American court observed in connection with banks, another entity from whom
requests for information are routinely sought, such requests are neither
unanticipated nor aberrational:
Any further
expenses incurred in connection with this investigation and examination of
these records, such as the salary of employees that may be necessarily assigned
to this project, are expenses to be borne by the bank. . . . They are
reasonably incident to the bank’s normal operations, and they are reasonable
expenses that the bank can be and should be prepared to sustain when it opens
and operates as a bank, knowing full well that some of its depositors will from
time to time get investigated by the Internal Revenue Service.
(U.S. v.
Jones, 351 F. Supp. 132 (M.D. Ala. 1972), per Johnson C.J., at p.
134)
[61]
The object of an unreasonable production order is not without remedy.
It lies in an application for an exemption pursuant to s. 487.015 , the
applicable portions of which are repeated here:
487.015 (1) [Application for exemption] A
person named in an order made under section 487.012 and a financial
institution, person or entity named in an order made under section 487.013 may,
before the order expires, apply in writing to the judge who issued the order,
or a judge of the same territorial division as the judge or justice who issued
the order, for an exemption from the requirement to produce any document, data
or information referred to in the order.
While there are
three possible grounds for an exemption under s. 487.015(4) , only para. (b)
is engaged in this case, namely that a judge may grant an exemption if
satisfied that
it is unreasonable to require the applicant to produce the document, data
or information;
[62]
The authority given to a judge is limited to granting “an exemption from
the requirement to produce any document, data or information referred to in the
order”. Exemption from compliance is the remedy Parliament has provided when a
judge is satisfied that the burden of compliance is unreasonable. I agree with
Vaillancourt J. when he says “there is no statutory power whereby a judge on an
exemption hearing can make an order for compensation” (para. 40). To the
extent that a judge hearing an exemption application considers the financial
consequences of the order, it is in the context of determining whether to grant
an exemption from full or partial compliance.
[63]
Parliament has thereby acknowledged that production orders potentially
represent an unreasonable burden, but expressed its intention that there be an
exemption from such orders rather than an order for compensation for compliance
with them. This is not to say, however, that although a judge cannot make
compensation a term of the order, the parties cannot make their own
arrangements in the face of a likely finding of unreasonableness. The Ontario
Crown accepted that possibility in its factum when it observed:
If an exemption is ordered because the costs of complying with a
production order cause undue financial hardship, the decision as to how to
proceed at that point belongs to the police. They may decide to forego the
evidence, or they may agree to compensate the target and obtain the
evidence, despite the budgetary impact that may have. Thus, the police retain
control over the evidence gathering process. No evidence is lost. [Emphasis in
original; para. 49.]
[64]
As earlier noted, it is the reasonableness of the financial burden
of compliance about which the parties argued in this case. The Crowns and the
Chiefs of Police argued that “unreasonable” in this context requires
application of a standard of “undue hardship”. Each interprets that phrase
slightly differently. Quebec, for example, argued that it would only be met in
circumstances nearing an abuse of process. According to British Columbia, an
applicant should be required to show near irreparable harm. The Canadian
Bankers Association, on the other hand, proposed a standard of “considerable
adversity”. Telus proposed a significantly lower threshold, one triggered
almost automatically for those who are the frequent objects of production
orders.
[65]
Vaillancourt J. rejected the proposed standard of “undue hardship” and
adopted instead a threshold which was met when “the expenditure is significant
to [the applicant’s] financial health” (para. 96).
[66]
I agree with Vaillancourt J. that there is no need to adopt an “undue
hardship” standard. I see no reason to embellish the statutory language. The
standard chosen by the legislature — unreasonableness — is a familiar one in
law. La Forest J. observed: “‘Reasonable’ is a flexible criterion that permits
adjustments to different situations” (B. (R.) v. Children’s Aid Society of
Metropolitan Toronto, [1995] 1 S.C.R. 315, at para. 92). And in Canadian
Foundation for Children, Youth and the Law v. Canada (Attorney General),
[2004] 1 S.C.R. 76, 2004 SCC 4, McLachlin C.J., writing for the majority, explained:
. . . the law
has long used reasonableness to delineate areas of risk, without incurring the
dangers of vagueness. . . . The criminal law also relies on it. The Criminal
Code expects that police officers will know what constitutes “reasonable
grounds” for believing that an offence has been committed, such that an arrest
can be made (s. 495 ); that an individual will know what constitutes “reasonable
steps” to obtain consent to sexual contact (s. 273.2 (b)); and that
surgeons, in order to be exempted from criminal liability, will judge whether
performing an operation is “reasonable” in “all the circumstances of the case”
(s. 45 ). These are merely a few examples; the criminal law is thick with the
notion of “reasonableness”.
The reality is that the term “reasonable” gives
varying degrees of guidance, depending upon the statutory and factual context.
[paras. 27-28]
[67]
In essence, the financial consequences must be so burdensome that it
would be unreasonable in the circumstances to expect compliance. This, I
readily acknowledge, is a somewhat tautological explanation, but I see no
purpose in offering alternative definitions for a term so well known and
understood as having a fact-specific compass. What is reasonable will be
informed by a variety of factors, including the breadth of the order being
sought, the size and economic viability of the object of the order, and the
extent of the order’s financial impact on the party from whom production is
sought. Where the party is a repeated target of production orders, the
cumulative impact of multiple orders may also be relevant.
[68]
In this case, the parties argued the application of the test of
“unreasonableness” using the annual costs of compliance to Telus, not just the
cost of the two specific production orders. Vaillancourt J. found that the
annual estimated cost of Telus’ compliance with production orders fell within a
range of $400,000 to $800,000. Based on the figures before him at the hearing,
he projected an annual cost to Telus of $662,000 and found that this
represented 0.058 percent of Telus’ earnings before interest, taxes,
depreciation and amortization, and 0.023 percent of Telus’ operating revenue
for 2004. This, as the Ontario Crown pointed out, is the equivalent of a person
earning $100,000 a year having to spend up to $58 to comply with jury duty.
[69]
Vaillancourt J.’s conclusion, based on the financial information before
him, was, essentially, that Telus had not met its onus of satisfying him that
the cost of compliance was unreasonable:
I agree that a number in and of itself is not the determining fact
when dealing with the issue of unreasonableness. Granted, $662,000 is not a
mere bagatelle. However, the cost of compliance must be viewed in the context
of the overall impact that figure has on a corporation’s total financial
picture. In the circumstances of this application, I find that the expenditure
is of no particular great moment.
. .
.
. . . A court must consider the actual expense to the
third party. This amount must be considered in light of the overall fiscal
health of the third party. . . . [A]n applicant must show that there is a significant
impact on the third party in all of the circumstances. The nature of [the]
third party’s business is also an underlying consideration. In the case at bar,
the applicant certainly would have or should have been aware that the nature of
it’s business leaves it open for production orders or like procedures. I have
found that at this particular time, the applicant has not been so
inconvenienced by the current production orders as to require the court to
grant an exemption from the production orders. [paras. 97 and 118]
[70]
I see no basis in this record for interfering with his conclusion. I
agree with Vaillancourt J. that in these circumstances, Telus has not
demonstrated that it would be unreasonable to require it to comply with the
production orders.
[71]
I would dismiss the appeal.
Appeal dismissed.
Solicitors for the appellant: Burstein, Unger, Toronto;
Sack Goldblatt Mitchell, Toronto.
Solicitor for the respondent Her Majesty the Queen
(Ontario): Attorney General of Ontario, Toronto.
Solicitor for the respondent Her Majesty the Queen
(Canada): Department of Justice, Ottawa.
Solicitor for the intervener the Attorney General of
Quebec: Department of Justice, Québec.
Solicitor for the intervener the Attorney General of British
Columbia: Attorney General of British Columbia, Vancouver.
Solicitors for the intervener the Canadian Association of Chiefs of
Police: Perley‑Robertson, Hill & McDougall, Ottawa.
Solicitors for the intervener the Canadian Bankers
Association: Fasken Martineau DuMoulin, Toronto.
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