La Souveraine, Compagnie d’assurance générale v. Autorité des marchés financiers

La Souveraine, Compagnie d’assurance générale v. Autorité des marchés financiers
Collection
Supreme Court Judgments
Date
2013-11-21
Neutral citation
2013 SCC 63
Report
[2013] 3 SCR 756
Case number
34699
Judges
McLachlin, Beverley; LeBel, Louis; Fish, Morris J.; Abella, Rosalie Silberman; Rothstein, Marshall; Cromwell, Thomas Albert; Moldaver, Michael J.; Karakatsanis, Andromache; Wagner, Richard
On appeal from
Quebec
Subjects
Insurance
Notes
SCC Case Information: 34699
Decision Content
SUPREME COURT OF CANADA
Citation: La Souveraine, Compagnie d’assurance générale v. Autorité des marchés financiers, 2013 SCC 63, [2013] 3 S.C.R. 756
Date: 20131121
Docket: 34699
Between:
La Souveraine, Compagnie d’assurance générale
Appellant
and
Autorité des marchés financiers
Respondent
Official English Translation: Reasons of Wagner J.
Coram: McLachlin C.J. and LeBel, Fish, Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.
Reasons for Judgment:
(paras. 1 to 95)
Dissenting Reasons:
(paras. 96 to 118)
Dissenting Reasons:
(paras. 119 to 141)
Wagner J. (McLachlin C.J. and Rothstein, Cromwell, Moldaver and Karakatsanis JJ. concurring)
Fish J. (LeBel J. concurring)
Abella J.
La Souveraine, Compagnie d’assurance générale v. Autorité des marchés financiers, 2013 SCC 63, [2013] 3 S.C.R. 756
La Souveraine, Compagnie d’assurance générale Appellant
v.
Autorité des marchés financiers Respondent
Indexed as: La Souveraine, Compagnie d’assurance générale v. Autorité des marchés financiers
2013 SCC 63
File No.: 34699.
2013: March 20; 2013: November 21.
Present: McLachlin C.J. and LeBel, Fish, Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.
on appeal from the court of appeal for quebec
Provincial offences — Financial products and services — Nature of offence — Strict liability — Insurance company charged with committing offence on number of occasions by helping or inducing, through its consent and/or authorization, third party to violate regulatory provision — Regulator not responding to written explanations from insurance company before issuing statements of offence — Whether offence at issue one of strict liability — If so, whether proof of mens rea required — Whether actus reus of offence proved beyond reasonable doubt — Whether offence is discrete offence or party liability offence — Whether single conviction should be substituted for multiple convictions entered at trial — Act respecting the distribution of financial products and services, R.S.Q., c. D‑9.2, ss. 482, 491.
Provincial offences — Defences — Due diligence — Officially induced error — Conditions for availability of defence based on reasonable mistake of law — Whether official’s passive conduct may be reasonably relied on as approval or inducement.
S is an Alberta insurance company that is registered with the Autorité des marchés financiers (“AMF” or “Authority”) and is authorized to sell insurance products in Quebec; it offers such products through brokers. The AMF issued 56 statements of offence against S for helping or inducing, through its consent and/or authorization, a broker that was not registered with the AMF to violate a provision of the Act respecting the distribution of financial products and services, R.S.Q., c. D‑9.2 (“ADFPS”).
Before the statements of offence were issued, S had replied in writing to a request from the AMF for information, explaining why in S’s view, its conduct was not problematic. The AMF issued the statements of offence more than six months later without responding to S’s written explanations.
The trial judge convicted S on the basis that it had authorized, permitted or consented to the distribution by its broker of insurance products for property located in Quebec although it knew that the broker did not hold the licences required by the ADFPS. According to the trial judge, the offence at issue is one of strict liability, and the defence raised by S on the basis of a mistake of law was not valid.
The Superior Court allowed S’s appeal and acquitted S on the basis that neither the actus reus nor the mens rea of the offence had been proved beyond a reasonable doubt. According to the Superior Court, the offence at issue requires proof of a wilful act and of a specific intent, which had not been shown, since S had not known that its broker was breaking the law.
The Court of Appeal allowed the AMF’s appeal and restored the 56 convictions of S for the offence in question, which it characterized as one of strict liability. Concerning the actus reus, the majority of the Court of Appeal found that the authorization S had given its broker was sufficient to establish this element of the offence. They added that the due diligence defence is not available where the mistake being relied on is one of law and that the AMF’s failure to respond to S’s written explanations did not transform that mistake into one of mixed fact and law.
Held (LeBel and Fish JJ. dissenting in part and Abella J. dissenting): The appeal should be dismissed with costs.
Per McLachlin C.J. and Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.: The Court of Appeal was right to review the Superior Court’s conclusions with regard to both mens rea and the actus reus. Had it not been for the Superior Court’s conclusion that proof of mens rea was required for the offence at issue, that court would not have arrived at the same interpretation of the content of the actus reus, and the ratio decidendi of its judgment would have been different. Those issues are inextricably linked, and the Court of Appeal therefore had jurisdiction to decide the actus reus issue and set aside the acquittal entered by the Superior Court. Otherwise, the appeal to the Court of Appeal on the issue of mens rea would have become moot and irrelevant.
The offence provided for in s. 482 of the ADFPS is a regulatory offence. Such offences are generally strict liability offences, and strict liability offences do not require proof of mens rea. In enacting the ADFPS, the Quebec legislature chose to establish an independent offence in s. 482 rather than establishing a mode of participation in the commission of an offence as has been done in s. 21(1) (b) of the Criminal Code, R.S.C. 1985, c. C‑46 .
The difference between the wording of s. 21(1) (b) of the Criminal Code and that of s. 482 of the ADFPS, and in particular the omission of the words “for the purpose of” from s. 482 of the ADFPS, confirms the general rule that, unless otherwise indicated, regulatory offences adopted to protect the public fall into the category of strict liability offences. In this case, proof of mens rea was not required: it was not necessary to prove that S knew its broker intended to break the law or that the former had the specific intent of helping or inducing the latter to do so.
On the actus reus of the offence, the evidence shows that S’s conduct was not, strictly speaking, passive, since its failure to object in a timely manner to its broker’s actions constituted consent and/or authorization within the meaning of s. 482 of the ADFPS. S’s conduct had the effect of provoking a violation of the law by its broker, which means that the actus reus of the offence has been established beyond a reasonable doubt. S can avoid liability only by showing that it acted with due diligence.
The due diligence defence is available if the defendant reasonably believed in a mistaken set of facts that, if true, would have rendered his or her act or omission innocent. A defendant can also avoid liability by showing that he or she took all reasonable steps to avoid the particular event. However, this defence will not be available if the defendant relies solely on a mistake of law to explain the commission of the offence. A mistake of law can ground a valid defence only if the mistake was an officially induced error and if the conditions with respect to the application of such a defence are met. No matter how reasonable a mistake of law may be, it cannot — unlike a mistake of fact or an officially induced error — serve as a valid defence in the case of a strict liability offence. The objective of public protection that underlies the creation of regulatory offences militates strongly against accepting a general defence of reasonable mistake of law in this context.
Finally, although it is true that the offence provided for in s. 482 of the ADFPS is a discrete and independent offence and that S is not liable for the offences committed by its broker, this does not mean that S cannot have committed several discrete offences. That is in fact what occurred here. It would nevertheless be preferable for a prosecutor, when exercising its discretion to issue multiple statements of offence, to assess the context in which the offences were committed on a case‑by‑case basis.
Per LeBel and Fish JJ. (dissenting in part): The appeal should be allowed in part in order to substitute a single conviction for the 56 convictions entered at trial and restored by the Court of Appeal.
S stands convicted 56 times for what, as a matter of law, was a single offence. Section 482 of the ADFPS creates a discrete substantive offence, rather than a party liability offence. Manifestly, an insurer found to have violated s. 482 of the ADFPS is neither guilty of the same offence nor liable to the same penalty as the firm it helped or induced to contravene another provision of the Act or regulations. Party liability is expressly provided for in s. 491 of the ADFPS.
Section 491 was adopted in its present form in 2009. Had it been in force in 2006, when the proceedings in this case were instituted, it would have been open to the Authority to charge S with having participated as a party in the 56 offences under another provision of the Act committed by its broker. Here, without the benefit of s. 491, the Authority charged S with 56 counts under s. 482 ― a substantive offence with a different penalty ― and claimed 56 times the mandatory minimum penalty under s. 482 as if S, under that section, was a party to the offences allegedly committed by its broker.
Nowhere does s. 482 of the ADFPS provide that an insurer or its mandatary is liable for offences committed by the person or firm induced — by either the insurer or its mandatary — to commit them. Insurer and mandatary alike, when they aid or induce another to commit a substantive offence under the ADFPS, such as s. 482, may now be prosecuted under s. 491 of the ADFPS as parties to that offence. But they are not liable as parties when charged under s. 482, as S was in this case. The decision to create a discrete substantive offence by enacting s. 482 represents a deliberate legislative choice to which courts must give effect.
Per Abella J. (dissenting): The appeal should be allowed and the proceedings stayed.
To date, officially induced error has only been used as a defence in circumstances where an official actually gave erroneous information to an accused. It has been seen, in other words, as requiring official conduct of an active kind. But there is no principled basis for excluding conduct of a more passive nature, including silence from an official, which could, in some circumstances, reasonably be relied on as approval, or an “inducement”. This is particularly the case if the silence occurs in a regulatory framework that demonstrably requires a degree of expedition, such as the one S, an insurance company, was subject to. Underlying the defence of officially induced error is the broad principle that an individual not be held culpable when he or she is induced by an official’s conduct into relying on a reasonable but incorrect understanding of the law. Punishing a regulated entity who is dependent on the regulator’s timely response, and reasonably relies on its silence, perpetuates the very injustice that led to the development of the strict liability defences in the first place: finding the morally innocent culpable.
The question in dealing with an official’s passive conduct is whether a reasonable person in the position of the accused would have expected the official to inform him or her in a timely way that their understanding of the law was incorrect. The responsibilities of the official and the field and complexity of the regulation at issue will be relevant, as will the extent to which the accused could reasonably have expected a timely response in order to carry on its undertakings. If a body charged with supervising a regulatory domain fails inexplicably to respond relatively promptly to an accused’s erroneous assertion, it shares the blame for the accused’s ignorance of the law. In such circumstances, it is inappropriate for that very regulatory body to bring charges against an accused who has reasonably relied on its silence.
S took reasonable steps to satisfy itself that it was not violating the law. It set out its understanding of the relevant legal requirements and the basis for its understanding in an unambiguous letter to the investigator responsible for the file. Yet rather than respond to S’s letter, 7 months later the regulatory body brought 56 charges. It was reasonable for S to rely on the regulatory body’s conduct — in this case silence — as confirmation that its understanding of the law was correct and as an inducement to conduct itself accordingly. The regulatory body had a duty to be diligent in performing its statutory role. Had that body responded in any way, let alone in a timely one, S could have brought itself in conformity with the law.
Cases Cited
By Wagner J.
Applied: R. v. City of Sault Ste. Marie, [1978] 2 S.C.R. 1299; referred to: R. v. Keegstra, [1995] 2 S.C.R. 381; Vézeau v. The Queen, [1977] 2 S.C.R. 277; Lévis (City) v. Tétreault, 2006 SCC 12, [2006] 1 S.C.R. 420; Marston v. Autorité des marchés financiers, 2009 QCCA 2178 (CanLII); R. v. F. W. Woolworth Co. Ltd. (1974), 3 O.R. (2d) 629; R. v. Briscoe, 2010 SCC 13, [2010] 1 S.C.R. 411; R. v. Hibbert, [1995] 2 S.C.R. 973; Demers v. Autorité des marchés financiers, 2013 QCCA 323 (CanLII); R. v. Jorgensen, [1995] 4 S.C.R. 55; Molis v. The Queen, [1980] 2 S.C.R. 356; R. v. Wholesale Travel Group Inc., [1991] 3 S.C.R. 154; R. v. Power, [1994] 1 S.C.R. 601; R. v. O’Connor, [1995] 4 S.C.R. 411.
By Fish J. (dissenting in part)
Demers v. Autorité des marchés financiers, 2013 QCCA 323 (CanLII).
By Abella J. (dissenting)
R. v. City of Sault Ste. Marie, [1978] 2 S.C.R. 1299; Lévis (City) v. Tétreault, 2006 SCC 12, [2006] 1 S.C.R. 420; R. v. Jorgensen, [1995] 4 S.C.R. 55.
Statutes and Regulations Cited
Act respecting insurance, R.S.Q., c. A‑32.
Act respecting the Autorité des marchés financiers, R.S.Q., c. A‑33.2, ss. 4(2), (3), 7.
Act respecting the distribution of financial products and services, R.S.Q., c. D‑9.2, ss. 71, 462, 482, 487, 491 [am. 2009, c. 58, s. 85].
Code of Penal Procedure, R.S.Q., c. C‑25.1, art. 291.
Criminal Code, R.S.C. 1985, c. C‑46, s. 21 .
Securities Act, R.S.Q., c. V‑1.1, s. 208.
Authors Cited
Côté‑Harper, Gisèle, Pierre Rainville et Jean Turgeon. Traité de droit pénal canadien, 4e éd. Cowansville, Qué.: Yvon Blais, 1998.
Létourneau, Gilles. Code de procédure pénale du Québec: annoté, 9e éd. Montréal: Wilson & Lafleur, 2011.
Parent, Hugues. Traité de droit criminel, t. 1, 3e éd. Montréal: Thémis, 2008.
Parent, Hugues. Traité de droit criminel, t. 2, 2e éd. Montréal: Thémis, 2007.
Quebec. Assemblée nationale. Journal des débats de la Commission permanente des finances publiques, vol. 41, no 47, 1re sess., 39e lég., 26 novembre 2009, p. 20‑21.
APPEAL from a judgment of the Quebec Court of Appeal (Dalphond and Kasirer JJ.A. and Cournoyer J. (ad hoc)), 2012 QCCA 13, [2012] R.J.Q. 111, [2012] J.Q. no 33 (QL), 2012 CarswellQue 36, SOQUIJ AZ‑50819137, setting aside a decision of Martin J., 2009 QCCS 4494, [2009] Q.J. No. 10913 (QL), 2009 CarswellQue 10003, SOQUIJ AZ‑50578234, setting aside a decision of Boisvert J.C.Q., 2008 QCCQ 10557, [2008] J.Q. no 12056 (QL), 2008 CarswellQue 11563, SOQUIJ AZ‑50522982. Appeal dismissed, LeBel and Fish JJ. dissenting in part and Abella J. dissenting.
Jean‑Claude Hébert and Patrick Henry, for the appellant.
Éric Blais and Tristan Desjardins, for the respondent.
English version of the judgment of McLachlin C.J. and Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ. delivered by
[1] Wagner J. — The appellant, La Souveraine, Compagnie d’assurance générale (“La Souveraine”), is appealing a judgment of the Quebec Court of Appeal dated January 10, 2012. The Court of Appeal allowed an appeal of the respondent, the Autorité des marchés financiers (“AMF”), from a judgment rendered by the Quebec Superior Court on October 6, 2009 in which that court had set aside a decision of the Court of Québec dated November 10, 2008. The Court of Québec had convicted La Souveraine of committing, 56 times, the offence provided for in s. 482 of the Act respecting the distribution of financial products and services, R.S.Q., c. D‑9.2 (“ADFPS”).
[2] The appellant argues that the offence of which it was convicted requires proof of mens rea and that the subjective element of the offence was not proved beyond a reasonable doubt. In the alternative, it submits that, even if the offence is a strict liability offence, the actus reus was not proved. Finally, it argues that, in any event, it exercised due diligence and that, for all these reasons, this Court should acquit it.
[3] For the reasons that follow, I find that the appeal must fail. The offence in question is one of strict liability. The actus reus was established, and the due diligence defence was not available in this case, because the appellant was relying on a pure mistake of law.
I. Background
[4] The appellant is an Alberta insurance company that is duly registered with the AMF under the Act respecting insurance, R.S.Q., c. A‑32, and is authorized to sell insurance products in Quebec. It generally offers its products through a number of brokers that operate in various regions of Canada. Flanders Insurance Management and Administrative Services Ltd. (“Flanders”), a Winnipeg‑based company, was one of those brokers, but since it was not registered with the AMF, it was not authorized to offer insurance products in Quebec.
[5] In 2004, Flanders, acting on the appellant’s behalf, negotiated and issued to the insured, GE Commercial Distribution Finance Canada (“GE”), a master policy on inventories of goods financed by GE, namely recreational vehicles at various dealerships across Canada. Of those dealerships, 56 with establishments in Quebec agreed to participate under the master policy strictly to insure the portion of their inventories to which GE’s coverage applied. The broker then issued to each Quebec participant an individual insurance certificate in which GE was named as the [translation] “insured” and the dealership as the “certificate holder”. I should add that the insurance premiums were paid directly to the broker by GE, which billed the dealerships for them on a monthly basis. Any indemnity payable by the appellant following the occurrence of an event covered by the policy was paid directly to GE in Ontario.
[6] A competitor of Flanders that had previously done what Flanders was now doing filed a complaint with the AMF alleging, inter alia, that Flanders was pursuing these activities in Quebec without holding the required licences. The AMF began its investigation on January 13, 2005.
[7] In April of that year, the AMF asked the appellant for information about its business relationship with Flanders and GE, and about the insurance products covering the inventories financed by GE for the dealerships located in Quebec.
[8] On June 10, 2005, the appellant replied in writing that, in its view, the licensing issue was not problematic, since GE, Flanders’ client, had its head office in Ontario. The appellant added that the master policy had been negotiated and issued in Ontario and that the premiums were paid directly to Flanders by GE. It also mentioned that, in the event of a loss, the indemnity was payable directly to GE and not to the dealership. At the same time, the appellant sent the AMF a list of the Quebec dealerships that were participants under the master policy issued to GE.
[9] On August 25, 2005, Flanders invited the Quebec dealerships to renew their individual insurance certificates.
[10] In January 2006, the AMF issued 56 statements of offence against the appellant. This was the first “communication” between the parties since the last letter the appellant had sent on June 10, 2005.
[11] The statements of offence, which the appellant contested, were worded as follows:
[translation] At [place], on or about August 25, 2005, did consent to and/or authorize the issuance by Flanders . . ., a firm not registered with the Autorité des marchés financiers, of a floor plan insurance policy, number . . . to [name of dealership], contrary to section 71 of the [ADFPS] (the “Act”), thereby committing the offence provided for in section 482 of the Act and rendering itself liable to the penalty provided for in section 490 of the Act.
II. Judicial History
[12] Judge Boisvert of the Court of Québec convicted the appellant of the 56 offences (2008 QCCQ 10557 (CanLII)). He found that the offence provided for in s. 482 of the ADFPS is one of strict liability. He added that regardless of whether the offence is one of strict or specific liability, the evidence showed that the appellant had known that it was insuring property located in Quebec and that its broker, Flanders, was not duly registered in Quebec. According to Judge Boisvert, the appellant had therefore authorized, permitted or consented to the distribution by its broker of insurance products for property located in Quebec although it knew that the broker did not hold the required licences.
[13] Judge Boisvert accepted that the appellant had not known that Quebec legislation applied to the master policy for inventories of goods located in Quebec and that its mandatary had to be registered in that province. In his opinion, a mistake of law such as this cannot be raised as a defence. He also explained that the appellant had not done enough to ensure that its commercial transactions were consistent with provincial legislation, but had instead relied on its broker’s opinion without obtaining independent legal advice.
[14] In the Superior Court, Martin J. allowed La Souveraine’s appeal and acquitted it on all the counts (2009 QCCS 4494 (CanLII)). He found that the actus reus of the offence — the material fact — had not been proved beyond a reasonable doubt. In his view, the words “helps” and “induces” in s. 482 of the ADFPS require proof that the defendant performed a wilful act, and the appellant’s passive conduct in relation to the transactions in question could not be considered a wilful act. Martin J. added that the offence in this case requires proof of mens rea, or a guilty mind. In his opinion, a party liability offence that sanctions not the conduct of the principal offender but that of a secondary offender, that is, an individual who helped or induced the principal offender to commit the principal offence, continues to require proof of mens rea even if the principal offence is one of strict liability. Since the appellant had not known that Flanders was breaking the law, the mens rea had not been proved.
[15] In any event, Martin J. found that the appellant’s defence was valid, since the mistake the appellant was alleging was not a pure mistake of law, but one of mixed fact and law. That mistake had arisen not only from a misinterpretation of the applicable law, but also from the fact that the AMF’s silence following the letter of June 10, 2005 had been interpreted as a confirmation that the contemplated transactions were lawful.
[16] The Court of Appeal granted the AMF leave to appeal under art. 291 of the Code of Penal Procedure, R.S.Q., c. C‑25.1, on the following question of law (2012 QCCA 13 (CanLII)): Did the Superior Court judge err in law by imposing on the AMF a burden of proving a specific mens rea for the offence provided for in s. 482 of the ADFPS?
[17] The Court of Appeal, in reasons written by Kasirer and Cournoyer JJ.A., allowed the AMF’s appeal and restored the convictions. The majority found that the offence in this case is one of strict liability and that the actus reus of the offence had been proved beyond a reasonable doubt: the appellant had never maintained that Flanders had distributed the insurance products in question without its authorization, and this was sufficient to establish the actus reus. Moreover, the due diligence defence was not available in this case, because the mistake being relied on was one of law and because having exercised due diligence in inquiring into the applicable law is not a valid defence in either a criminal or a regulatory context. Finally, the AMF’s failure to reply to the appellant’s letter of June 10, 2005 did not transform that mistake of law into one of mixed fact and law.
[18] Dalphond J.A., dissenting, would have dismissed the AMF’s appeal and acquitted the appellant. He agreed with the majority that the offence provided for in s. 482 of the ADFPS is one of strict liability. However, he also agreed with the Superior Court that the actus reus had not been proved, because the wording of the section required active participation in the violation of the law. The appellant’s [translation] “passive acquiescence” (para. 56) to Flanders’ transactions could not have the effect of “helping” or “inducing” Flanders to commit such a violation. According to Dalphond J.A., even if the actus reus had been established, the appellant had to be acquitted, because it had exercised due diligence by [translation] “actively [seeking] to comply with the law” (para. 68).
[19] More specifically, Dalphond J.A. noted that the appellant had reviewed how its product was distributed and how the product was treated in the other provinces of Canada. It had sought information from Flanders and obtained legal advice to the effect that the transactions in question were lawful. Dalphond J.A. expressed the opinion that the defence of due diligence was available in this case because the appellant’s mistake was the result not only of an erroneous interpretation of the law, but [translation] “also of a set of concurrent facts leading La Souveraine to believe that this interpretation was well founded” (para. 76). These facts, in his view, included in particular the complexity of the transactions at issue, the fact that the insurance premiums and indemnities were payable outside Quebec, the fact that the coverage concerned only assets belonging to GE, the reassurance given by Flanders and its lawyers that the transactions were lawful and, finally, the AMF’s silence following the appellant’s explanatory letter of June 10, 2005.
III. Issues
[20] The appellant submits, first, that the Court of Appeal lacked jurisdiction to set aside the Superior Court’s judgment of acquittal, because leave had not been granted to appeal the conclusion in that judgment that the actus reus had not been proved in this case. It argues that the appeal was limited to the question whether the offence provided for in s. 482 of the ADFPS requires proof of mens rea.
[21] The appellant further submits that the offence in question is one that requires proof of a guilty mind. It argues that, at common law, mens rea is always required where the offence involves secondary penal liability. In the alternative, if this Court characterizes the offence as one of strict liability, the appellant submits that the actus reus of the offence has not been proved. Finally, it argues that the due diligence defence was available given that it had, at the very most, made only a reasonable mistake of law.
[22] The AMF takes the position that the offence provided for in s. 482 of the ADFPS is one of strict liability for which the actus reus has been proved beyond a reasonable doubt. It adds that the appellant’s mistake in this case was purely one of law and that a defence cannot be based on such a mistake.
[23] I will begin by discussing the preliminary issue of the Court of Appeal’s jurisdiction before turning to the four main issues raised by this appeal. The first of those issues concerns the nature of the offence provided for in s. 482 of the ADFPS in light of the three categories recognized since R. v. City of Sault Ste. Marie, [1978] 2 S.C.R. 1299: offences requiring proof of mens rea, strict liability offences and absolute liability offences. The second issue relates to the content of the actus reus of the offence at issue and whether that element was proved beyond a reasonable doubt. The third issue concerns the content of the due diligence defence and whether that defence was available in this case. The final issue is whether a defence based on a reasonable mistake of law should be accepted.
IV. Analysis
A. Jurisdiction of the Court of Appeal
[24] I find that the Court of Appeal was right to review the Superior Court’s conclusions with regard to both mens rea and the actus reus. In R. v. Keegstra, [1995] 2 S.C.R. 381, this Court considered the arguments that may be raised on appeal in criminal cases. On the subject of appeals for which leave to appeal has been granted, Lamer C.J. began by laying down a general rule (para. 28), but after doing so, he added some significant qualifications (paras. 29 and 31):
. . . the Court may choose to grant leave on restricted grounds or at large. Restricting the leave granted to specific issues constrains the arguments which may be raised by appellants. The arguments which may be raised by respondents are not affected by an order granting leave on narrow grounds. . . .
Leave granted under the Criminal Code provisions differs from leave granted under s. 40 of the Supreme Court Act in civil matters. While appeal routes in civil cases are not at issue in this motion, it is useful to clarify that the decision in Idziak v. Canada (Minister of Justice), [1992] 3 S.C.R. 631, is not relevant to criminal appeals. In Idziak, leave was granted on one ground only and both parties were restricted in their argument to addressing that ground. In civil matters, leave to appeal may be sought with respect to any finding adverse to the party in question. The number of such findings in a civil case is nearly always much greater than in a criminal case. Accordingly, as a matter of policy, when restricted leave is granted in civil cases, the respondent will normally be limited to arguing those issues set out by the Court in its order granting leave. . . .
. . .
. . . in some cases, two issues which may have been discussed separately at the court of appeal will be so inextricably linked as to form two aspects of the same question of law. In this case, an appellant who has a narrow right of appeal based on a dissent, or who has been granted leave to appeal on restricted grounds, will be able to address all aspects of the question, even if the court of appeal treated the different aspects separately. One example of this intertwining is the question of whether a particular error of law is so serious that it justifies setting aside the trial verdict. The provisions for taking account of the severity of errors (s. 686(1)(b)(iii) in the case of convictions, and the threshold set out in Vézeau v. The Queen, [1977] 2 S.C.R. 277, in the case of acquittals) will always be intertwined with any error of law considered by this Court. [Emphasis added; paras. 28‑31.]
[25] Although these principles were formulated in relation to a criminal offence, they are also relevant in the context of regulatory offences.
[26] In the instant case, Martin J. of the Superior Court found on the basis of his interpretation of the words “helps” and “induces” used in s. 482 of the ADFPS that there was no proof with respect to the actus reus or to mens rea (para. 140):
The operative words of “aiding” and “inducing” are however of prime importance in the resolution of this matter. The role that they play in relation to the culpability of the appellant is pivotal. In my view, these words indicate the requirement for some sort of voluntary action on the part of the accused as an essential element of the offence and secondly they also invest the offence with a mens rea component.
[27] It can be seen from Martin J.’s reasons that his interpretation of the content of the actus reus and his finding that there was no proof in this regard flowed directly from his reasoning with respect to mens rea, as all these elements are inextricably linked. In his opinion, the authorization the appellant had given its broker to distribute insurance products on its behalf was not sufficient to constitute the wilful act required to prove the offence. However, that authorization had clearly had the effect of inducing the broker to commit the offence. This means that the judge had to assume that the offence has a mens rea component, namely acting with a certain goal, or “for the purpose” of helping or inducing a third party, the appellant’s broker in this case, to perform a certain action. In other words, had it not been for his conclusion that proof of mens rea was required, Martin J. would not have arrived at the same interpretation of the content of the actus reus, and the ratio decidendi of his judgment would have been different (Vézeau v. The Queen, [1977] 2 S.C.R. 277). The Court of Appeal therefore had jurisdiction to decide the actus reus issue and set aside the acquittal he had entered.
[28] Indeed, as a matter of pure logic, no other conclusion is possible on the issue of the Court of Appeal’s jurisdiction. If the Court of Appeal had no legal authority to consider the actus reus issue and this issue was res judicata, decided in favour of the appellant, then the appeal to that court on the issue of mens rea, for which leave was granted, would have become moot and irrelevant. I cannot imagine that the Court of Appeal would have granted leave for an appeal that lacks relevance.
[29] Thus, the appellant’s arguments in this regard are without merit and must be rejected.
B. Nature of the Offence Provided for in Section 482 of the ADFPS
[30] Section 482 of the ADFPS reads as follows:
482. Every insurer that helps or, by encouragement, advice or consent or by an authorization or order, induces a firm or an independent representative or independent partnership through which it offers insurance products or an executive officer, director, partner, employee or representative of such a firm or independent partnership to contravene any provision of this Act or the regulations is guilty of an offence.
The same applies to any director, executive officer, employee or mandatary of an insurer.
[31] A court inquiring into the nature of an offence must interpret the relevant statutory provision. In doing so, it must take account of the presumption established by this Court that regulatory offences are generally strict liability offences. In Lévis (City) v. Tétreault, 2006 SCC 12, [2006] 1 S.C.R. 420, at para. 16, LeBel J. explained this as follows, citing the presumption of statutory interpretation articulated by this Court in Sault Ste. Marie:
Classifying the offence in one of the three categories now recognized in the case law thus becomes a question of statutory interpretation. Dickson J. noted that regulatory or public welfare offences usually fall into the category of strict liability offences rather than that of mens rea offences. As a general rule, in accordance with the common law rule that criminal liability ordinarily presupposes the existence of fault, they are presumed to belong to the intermediate category:
Public welfare offences would prima facie be in the second category. They are not subject to the presumption of full mens rea. An offence of this type would fall in the first category only if such words as “wilfully,” “with intent,” “knowingly,” or “intentionally” are contained in the statutory provision creating the offence. [p. 1326]
[32] I note, first, that the offence provided for in s. 482 of the ADFPS is a regulatory offence. Protection of the public is the underlying rationale for such offences, which are enacted as “incidental sanctions whose purpose is to enforce the performance of various duties, thereby safeguarding the general welfare of society” (City of Lévis, at para. 13, per LeBel J.). The objective of the scheme established by the ADFPS, which includes the offence provided for in s. 482, is essentially to regulate the insurance products distribution industry in order to protect the public (Marston v. Autorité des marchés financiers, 2009 QCCA 2178 (CanLII), at para. 46).
[33] Accordingly, in keeping with the presumption of statutory interpretation established in Sault Ste. Marie, and in the absence of specific language indicating a contrary intention on the legislature’s part, the regulatory offence provided for in s. 482 of the ADFPS will be presumed to be one of strict liability, hence one that does not require proof of mens rea.
[34] In the case at bar, the appellant refers to other considerations in support of its argument that the offence provided for in s. 482 of the ADFPS falls into the category of mens rea offences. According to the appellant, in the case of a party liability offence like the one at issue here, the common law continues to require proof of mens rea even where the principal offence is one of strict liability. This is the standard of secondary penal liability, which requires, more specifically, proof of a mens rea of knowledge: the accomplice must have had knowledge of the essential elements of the principal offence and must have acted as he or she did with the specific intent of helping or inducing the principal offender to break the law.
[35] In this regard, the appellant relies in particular on the judgment of the Ontario Court of Appeal in R. v. F. W. Woolworth Co. Ltd. (1974), 3 O.R. (2d) 629, which concerned being a party to an offence within the meaning of s. 21(1) (b) of the Criminal Code (now R.S.C. 1985, c. C‑46 ). In that case, two salespersons had been convicted of making false representations to the public about the prices of products they were offering for sale in a space made available to them by a Woolworth store in exchange for a commission on sales. The issue was whether, under s. 21 of the Criminal Code , Woolworth should be convicted of being a party to the same offence on the basis that it had aided the two salespersons to commit it.
[36] The Ontario Court of Appeal held that, to be convicted of being a party to an offence under s. 21 of the Criminal Code , a defendant had to have known that the principal offender’s acts constituted an offence and to have done something for the purpose of aiding the latter to commit that offence. The court explained this as follows:
. . . even in offences of strict liability, to hold one guilty as an aider and abettor, the Crown had the onus of proving knowledge on the part of the alleged aider of the circumstances necessary to constitute the offence which he is alleged to have aided, although it is not required that it be proven the alleged aider knew that those circumstances constituted an offence.
. . .
. . . Section 21 requires that an alleged party must do or omit to do something for the purpose of aiding the principal to commit the offence. That purpose must be the purpose of the one sought to be made a party to the offence (Sweet v. Parsley, supra) but if what is done incidentally and innocently assists in the commission of an offence that is not enough to involve the alleged party whose purpose was not that of furthering the perpetration of the offence.
. . . one does not render himself liable by renting or loaning a car for some legitimate business or recreational activity merely because the person to whom it is loaned or rented chooses in the course of his use to transport