Recent case law and commentary suggest that the Supreme Court of Canada’s decision in World Bank Group v. Wallace has provided Canadian courts with the necessary framework to better protect third-party informants, paving the way for Canadian law enforcement to engage more aggressively in the fight against global corruption.
The case arose in relation to an agreement under which the World Bank Group would provide more than $1 billion in financing to construct a bridge over the Padma River in Bangladesh. The INT subsequently learned that representatives of SNC-Lavalin planned to bribe government officials in Bangladesh to obtain a contract related to the construction of the bridge. As the INT investigated, it voluntarily shared information with the Royal Canadian Mounted Police. This information enabled the RCMP to obtain wiretap authorizations, ultimately leading to the indictment of several individuals under the Corruption of Foreign Public Officials Act.
The accused brought a Garofoli application in the Ontario Superior Court of Justice challenging the wiretap authorizations and seeking an order requiring the INT to produce applicable records. Under this framework, the court assesses the reasonableness of a search when wiretaps are used to intercept private communications. A search will be reasonable if the statutory preconditions for a wiretap authorization have been met. The trial judge granted the application. The World Bank Group appealed.
In setting aside the lower court’s decision, the Supreme Court found that the INT possessed privileges and immunities that protected it from the requested disclosure. The Supreme Court nevertheless went on to consider whether the disclosure order would have been proper in the hypothetical situation where the World Bank Group was not subject to any privileges or immunities. This was a clear indication of the Supreme Court’s desire to clarify the state of Canadian domestic law with regards to third-party disclosure.
Co-operation in the fight against global corruption
The Supreme Court took Wallace as an opportunity to issue a broad statement regarding the importance of co-operation between state and non-state actors in the fight against corruption. In its opening passage, the Supreme Court declared:
Corruption is a significant obstacle in international development. In order to tackle this global problem, worldwide cooperation is needed. […] When international financial organizations, such as the World Bank Group, share information gathered from informants across the world with the law enforcement agencies of member states, they help achieve what neither could do on their own.
The Supreme Court’s strong stance on global corruption and the need for co-operation has not gone unnoticed. In its 2016 annual report, the INT characterized the Supreme Court’s statements in Wallace as an invitation to further cultivate its close partnership with Canadian authorities. The decision was also seen as providing momentum for strengthening its partnerships with other national authorities.
O’Connor framework functions to protect third parties
A person charged with a crime is entitled to disclosure of non-privileged documents that are relevant to making a full answer and defence to the charge. However, the process for obtaining disclosure varies depending on whether the disclosure is “first party” or “third party.” Since the production request in Wallace was in relation to a third party (the INT), the O’Connor framework applied. Under this framework, the accused bears the burden of demonstrating that documents sought are logically probative to an issue at trial or the competence of a witness to testify. This is in contrast to production orders sought against the Crown or the police, where the Stinchcombe framework applies.
Under this framework, the Crown must disclose all documents in its possession or control that are relevant to the accused’s case. An important difference between these two frameworks is where the burden of proof falls. Under the O’Connor framework, the accused bears the burden, whereas under the Stinchcombe framework, the burden is on the Crown.
The Supreme Court took Wallace as an opportunity to revisit these frameworks and emphasized the limiting effect of the burden being placed on the accused in the context of third-party disclosure. More recently, the Alberta Court of Appeal in R. v. Vallentgoed cited Wallace for the proposition that, although proper disclosure is key to the fairness of a trial, there is a need to place limits on disclosure when required. The placement of the burden on the accused in the case of third-party disclosure serves to limit unnecessary disclosure and fishing expeditions while at the same time allowing for third-party disclosure in appropriate circumstances.
Clarification of Garofoli scope further limits likelihood of production
The Supreme Court in Wallace also explained that a Garofoli application is more limited in scope than a typical O’Connor application. A Garofoli application relates to the admissibility of intercepted communications. Therefore, to obtain third-party production in the Garofoli context, an accused must demonstrate a reasonable likelihood that the records sought will be of probative value in determining what the affiant knew or ought to have known at the time the affidavit in support of the wiretap authorization was sworn. In practice, this clarification will serve to better protect third-party informants and prevent fishing expeditions by the accused.
Indeed, subsequent case law has specifically cited the risk of exposure of confidential informants as a relevant consideration when assessing a Garofoli application. In R. v. McKay, the British Columbia Court of Appeal stated that “[Wallace] is a reminder that relevance should be carefully weighed when disclosure poses significant risks to informers and to the integrity of the justice system.”
The Supreme Court’s explicit endorsement of the need for law enforcement to work in tandem with third-party organizations in the fight against corruption served as a powerful backdrop for the court’s ensuing articulation of the limitations to be placed on third-party disclosure. In practice, its ruling in Wallace will hopefully lead to greater co-operation with third-party informants in the international investigative context.
Litigator Lincoln Caylor of Bennett Jones LLP in Toronto focuses on economic crime matters. Caylor is a member of ICC FraudNet, an international network of independent lawyers who are leading civil asset-recovery specialists in each country.
The author acknowledges Jessica Starck’s contribution to this piece.