Amway of Canada Limited/Amway Du Canada Ltée. v. Her Majesty the Queen, [1987] 1 CTC 105

Mahoney, J. (Heald, J concurring):—This is an appeal from an interlocutory order by the other defendant in the action described in my concurrent reasons for judgment in appeal no. A-365-86. For the reasons given therein, I accept that the action is a penal action and that, in the action, the appellant is a person charged with an offence. The order subject of this appeal follows.

IT IS ORDERED THAT the defendant Amway Canada Limited produce for the purposes of this action the documents listed in Schedule I, Part II, Part B, of its List of Documents filed August 12, 1985.

The appellant takes an unexceptionable objection to the order. The documents listed in Schedule 1, Part Il, Part B, are documents to which objection to production was asserted on the ground of self-incrimination. That objection was rejected. A number of the same documents were also included in the appellant’s claim of solicitor/client privilege, which was allowed. The order should be amended to delete from the documents required to be produced those subject of solicitor/client privilege.

A second objection borders on the trivial. The appellant objects to the inclusion of the term “for purposes of this action" in the order. Rule 455(2) speaks of "production and inspection" and "the making of copies”. I trust there was no sinister intention on the part of the framer of the notice of motion, whose verbiage the order adopted; however, in view of the objection, the order may as well be amended to delete the offending words and substitute "for inspection and the making of copies at the office of the appellant's counsel in Montreal”.

The appellant's principal argument is that, as a person charged with an offence, it cannot be compelled to testify and it cannot therefore be compelled to produce documents. The fallacy of this argument lies in the fact that a party does not testify by complying with the requirement that it produce documents. The evidentiary value, if any, of the documents is inherent; they speak for themselves. That they may be evidence against him does not depend at all on what the person required to produce them has to say about them. He cannot, if a person charged, be compelled to say anything about them.

The appellant's argument is the same one that was rejected in reasoned judgments of the Supreme Court of Canada in Marcoux et al v. The Queen, [1976] 1 S.C.R. 763; 24 C.C.C. (2d) 1 and this Court in Ziegler et al v. Hunter et al, [1984] 2 F.C. 608; 8 D.L.R. (4th) 648. In the former, Dickson, J., as he then was, at 769 (C.C.C. 5) epitomized the law in the following terms:

In short, the privilege extends to the accused qua witness and not qua accused, it is concerned with testimonial compulsion specifically and not with compulsion generally.

In the latter, at 639 (D.L.R. 673-74), Hugessen, J., explained why that is the law.

The rationale behind the privilege against self-incrimination is to prevent persons being questioned in inquisitorial proceedings and then prosecuted as a result of their answers. It is a logical counterpart to our rules relating to admissibility of confessions. The purpose of the privilege is surely not to prevent witnesses from being obliged to produce what could be taken from them by force in any event. An accused person cannot be forced to testify in his own case and, therefore, is entitled to be protected against the consequences of testifying in someone else’s; he has no protection against documents or things found in his possession being used against him and, therefore, has no right to refuse to produce them, when required.

While both of these decisions dealt with pre-Charter circumstances, I find nothing in the Canadian Charter of Rights and Freedoms that assists the appellant in its argument.

I would, pursuant to paragraph 52(b) of the Federal Court Act, vary the order of the Trial Division as indicated above, and would otherwise dismiss the appeal. Success being divided, I would make no order as to costs.

Stone, J. (Heald, J. concurring):—This appeal is brought from a decision of Reed, J. in the Trial Division rendered November 29, 1985 allowing a motion by the respondent requiring the appellant to produce some 33 documents listed in Schedule 1, Part 2, Part B of its Rule 448 List of Documents filed on August 6, 1985.

I agree with Mr. Justice Mahoney that the order below should be amended in the two aspects he proposes. As for the production of the documents in question, the appellant makes three assertions with which I wish to deal. They are:

(a) It is a principle of law that a plaintiff in an action to enforce a penalty for an offence is not entitled to discovery of documents from a defendant;

(b) It is a further principle of law that a defendant may refuse to produce for inspection any document that would tend to render him liable for punishment, penalty or forfeiture;

(c) Neither of these principles has been abolished by statute in Canada but, if any statute has purported to do so, it must be seen as inconsistent with paragraph 11(c) of the Canadian Charter of Rights and Freedoms and therefore of no force and effect to the extent of the inconsistency.

I will discuss these assertions in turn.

It is preliminary to application of the first principle that this be an action brought to enforce a penalty for an offence. I think it is. It is based upon alleged violations of the sections 18 and 180 and also of paragraphs 192(1 )(b) and (c) of the Customs Act, R.S.C. 1970, c. C-40. That a penalty is provided for is apparent from the phrase “in addition to any other penalty to which he is subject for any such offence” (my emphasis) in subsection 192(2).* [1] The respondent, in effect, asserts that offences were committed and claims a penalty under the statute for their commission. The penalty is a punishment inflicted on account of the appellant’s conduct. It is not merely a civil remedy for recovery of any unpaid customs duties and taxes. Punishment may also be by summary conviction.

The question then becomes whether the legal privilege asserted in (a) above still exists so as to disentitle the respondent to discovery of the documents. It is not to be confused with the common law privilege against selfincrimination asserted in (b) above. Although usually found together under the rubric "self-incrimination" they differ in substance and derivation.! [2] The former has been recognized in Canada for many years (Burton v. Young (1867), 17 L.C. Rep. 379 (Sup. Ct.)).

In Hunnings v. Williamson (1883), 10 Q.B.D. 459 at 462-64 the Queen's Bench Division rescinded an order of a master requiring discovery of documents by the defendants in an action for penalties under a statute. There were, it seems, what Lord Esher M.R. referred to in Mexborough (Earl of) v. Whitwood Urban District Council, [1897] 2 Q.B. 111 (C.A.) at pages 114, 115 as "two rules of law” which have always existed as part of the English common law "from time immemorial". And at the latter page he describes them:

The first is that, where a common informer sues for a penalty, the Courts will not assist him by their procedure in any way: and I think a similar rule has been laid down, and acted upon from the earliest times, in respect of actions brought to enforce a forfeiture of an estate in land. These are no doubt rules of procedure, but they are much more than that: they are rules made for the protection of people in respect of their property, and against common informers.

In England, in earlier times, an action for a penalty was sometimes brought by a "common informer". He was a member of the general public deriving authority to sue from the statute that inflicted the penalty. He either kept the entire amount recovered or, if the recovery was for the Sovereign, poor of the parish, etc., he shared it. In the latter case the action was qui tam or a purely penal one.! [3] The courts viewed a common informer with suspicion, so much so that they refused to assist him in his case. The defendant neither had to produce his documents nor answer interrogatories, and could stand mute at his trial. In commenting upon the decision of the Court of Appeal in Martin v. Treacher (1886), 16 Q.B.D. 507 wherein discovery of documents in an action for a penalty was refused, Lord Esher, M.R. said at 115 of Mexborough:

It was held in that case that there is a rule of law which prevents the application of any of the procedure with regard to discovery in an action for a penalty by a common informer. It is not put on any ground peculiar to courts of equity, but on the ground of a general rule of law applicable both in courts of law and courts of equity. The principle there laid down is equally applicable to discovery by affidavit of documents as to discovery by interrogatories. It was held that the procedure with regard to discovery, which includes both methods of discovery, was not available to an action by a common informer.

The same view was expressed by A.L. Smith, L.J. at 118. Thus, the principle asserted was well established both at law and in equity.

The present action is for a penalty. It is not brought by a common informer but that makes no difference nowadays. What is important is the nature of the proceeding. If it be for the sole purpose of recovering a penalty then, apart from statute, the defendant need not produce his documents for discovery (see e.g. Pickeral River Improvement Company v. Moore et al. (1896), 17 P.R. 287 (Ont.); Rose v. Croden (1902), 3 O.L.R. 383 (Div. Ct.) at 387; The King v. The Associated Northern Collieries and Others (1910), 11 C.L.R. 738 (H.C. of A.); Colne Valley Water Company v. Watford Gas and St. Albans Gas Company, [1947] 1 All E.R. 104 (C.A.), per Lord Goddard, C.J. at 106; Pyneboard Pty. Ltd. v. Trade Practices Commission and Another (1983), 45 A.L.R. 609 (H.C. of A.), per Mason, A.C.J., Wilson and Dawson, JJ. at 613-14, per Murphy, J. at 621 and per Brennan, J. at pages 624-25; Trade Practices Commission v. T.N.T. Management Pty. Ltd. and Others (1984), 53 A.L.R. 213 (F.C. of A.) at 217-18).

As for the principle asserted in (b) above, it amounts to an aspect of the old common law privilege against self-incrimination (see, e.g., Triplex Glass Co. Ltd. v. Lancegaye Safety Glass (1934), Limited, [1939] 2 K.B. 395 (C.A.), per Du Parcq, L.J. at 403; [1939] 2 All E.R. 613 at 617; Blunt v. Park Lane Hotel Limited et al., [1942] 2 K.B. 253 (C.A.) per Goddard, L.J. at 257; [1942] 2 All E.R. 187 at 189). That privilege has been whittled away by statute in Canada. In its statutory expression (section 5 of the Canada Evidence Act and provincial legislation of like effect) it no longer enjoys the scope it once did at common law. (see Marcoux et al. v. The Queen, [1976] 1 S.C.R. 763, per Dickson, J. at 768-69; Ziegler v. Hunter, [1984] 2 F.C. 608; 8 D.L.R. (4th) 648; and see also Ratushny, Self-Incrimination in the Canadian Criminal Process (Toronto: Carswell, 1979) at page 92.) I am in full agreement with Mr. Justice Mahoney that it cannot avail the appellant as a basis for refusing to produce the documents in question.

I come then to the next question, namely, whether the privilege in (a) above has been abolished in Canada. In this regard section 170 of the Customs Act is relevant. It was added to the statute in 1888 (51 Vict. c. 14), and reads:

170. Whenever any suit is instituted under this Act, or an order of the court is obtained, all invoices, accounts, books and papers relating to any imported goods to which such suit or order relates shall be produced in court, or to any person whom the court directs, and if the same are not so produced within such time as the court prescribes, the allegations on the part of the Crown shall be deemed to be proved, and judgment shall be given as in a case by default; but this provision does not relieve the person disobeying any such order from any other penalty or punishment that he may have incurred by disobedience of any such order.

The appellant would have us read it as merely establishing an alternative procedure for obtaining production of material in any suit brought by the Crown under the statute and that it has application only where the Crown obtains a Court order in such a suit. The absence of such an order in the present case, it is contended, means that the privilege in (a) above remains intact and is properly invoked. I cannot agree. The section requires production in court* [4] in any such action of all invoices, accounts, books and papers relating to any imported goods. No court order is needed. The words of the statute are sufficient. The obligation to produce flows from a suit being instituted. The Court may also order production of the material to “any person”. But the Crown is not entitled, in any event, to have judgment given as in a case by default unless it first obtains a Court order for production of the material within a prescribed time and shows non-compliance therewith.

It is true, as the appellant contends, that the section contains no explicit abolition of the privilege and that in general a statute will not be interpreted so as to take away a common law right unless the intention to do so is made clear either by express words or by necessary implication. On the other hand, the obligation to produce the material is cast in broad language that is not subject to any qualification. The section is part of a statutory scheme for imposing, levying and collecting customs duties and taxes. Its character and purpose are such that a construction which would defeat its operation ought to be avoided (see, e.g., Pyneboard Pty Ltd. v. Trade Practices Commission and Another (supra) at pages 617-18). Thus I must conclude that the section overrides the privilege and therefore that it is not available to the appellant in this action.

It seems to me that the words “all . . . papers relating to any imported goods” are amply broad to include the 33 documents here in issue. I cannot agree with the appellant that these words, in effect, must be read down so as to include only formal customs documents required for the purpose of importing the goods.

Finally, I must deal with the appellant’s ultimate assertion. It is that section 170 is inconsistent with paragraph 11(c) of the Chartert [5] and, accordingly, that subsection 52(1) of the Constitution Act, 1982 renders section 170 of no force and effect to the extent of that inconsistency. This is the only context in which a Charter argument is made by the appellant. With respect, I cannot see any inconsistency. Paragraph 11(c) of the Charter is concerned with protecting a person charged with an offence from being called against his will “to be a witness” in proceedings against him in respect of that offence. It has no application to the production of documents, including those required to be listed pursuant to Rule 448 and to be produced for inspection pursuant to Rule 453.

I would dispose of this appeal in the manner proposed by Mr. Justice Mahoney.

Appeal dismissed.