Recent Legal News
On September 12, 2019, the Supreme Court of Canada denied Sobeys Incorporated’s (“Sobeys”) and Metro Incorporated’s (“Metro”) leave to appeal from a judgement of the Ontario Superior Court of Justice (“ONSC”) – (“Sobeys v. Commissioner”) – dismissing their applications for disclosure of the identities of witnesses in the Competition Bureau’s Immunity Program. Their request arose in the context of an ongoing inquiry by the Competition Bureau (the “Bureau”) into an alleged conspiracy to fix the prices of fresh commercial bread in Canada contrary to section 45 of the Competition Act (the “Bread Conspiracy”), in which both Sobeys and Metro have been implicated, among other grocers and bread producers.
In Re Application by Immunity Applicant Witnesses at First Stage Hearing, 2018 ONSC 6301 (the “First Stage Hearing Decision”), a related decision, the ONSC declared the witnesses in the Bread Conspiracy to be confidential informants entitled to the protection of informer privilege. This decision did not dismiss Sobeys’ and Metro’s application for the disclosure of the identities of these witnesses. However, in Sobeys v. Commissioner, Sobeys and Metro accepted that the First Stage Hearing Decision had, for all practical purposes, determined their own application for the identities of the witnesses in the Bread Conspiracy. The only issue in dispute was the form of order in which to effect the dismissal of Sobeys’ and Metro’s application for the identities of witnesses in the Bread Conspiracy, which was expedited and did not include submissions as to the impact of the First Stage Hearing Decision. The ONSC agreed with Sobeys and Metro and expedited the dismissal of their applications in the interests of efficiency.
The Full Story
The Bureau has an Immunity Program which exists to help detect unlawful conduct contrary to the Competition Act. The Immunity Program involves a grant of immunity from prosecution to the first party to disclose to the Bureau an offence previously undetected. To qualify, the immunity applicant must cooperate with the Bureau’s investigation and any subsequent prosecution by the Public Prosecution Service of Canada (“PPSC”). The Bureau, in response to the First Stage Hearing, now clearly stipulates in its technical guidance documents that applicants for immunity are not confidential informers and that the identity of an immunity applicant and any information that might tend to identify them are not subject to informer privilege.
Informer privilege serves protects the identity of informants by overriding the Crown’s obligation of disclosure to an accused. Once informer privilege is found to exist, no exception or balancing of interests is made except when a trial judge finds disclosure necessary to demonstrate an accused’s innocence. It is a near absolute bar on disclosure of identity.
It has been the Bureau’s practice to treat the identity of an immunity applicant as confidential until charges are laid against the other participants to the offence, at which point the Crown will be required to disclose the applicant’s identity. But sometimes, the Bureau will disclose an immunity applicant’s identity sooner, if the Bureau relies on their evidence to obtain judicial authorization for an investigative measure, such as a search warrant or a wiretap. To obtain judicial authorization, the Commissioner of Competition (the “Commissioner”) must provide the court with information that satisfies the test for the particular judicial authorization sought, such as reasonable grounds to believe that an offence has been, or will be, committed. In doing so, the Commissioner will rely on the information provided by the immunity applicant to establish these grounds, including the immunity applicant’s identity, where necessary.
Unsurprisingly, the Commissioner opposed an application by the immunity applicant witnesses in the Bread Conspiracy for a declaration that they are confidential informers entitled to informer privilege in the First Stage Hearing Decision. The Commissioner submitted that the application of informer privilege would compromise the operation of the Immunity Program and anti-cartel enforcement in Canada. Nevertheless, the ONSC found that informer privilege applies to immunity applicants in the Bureau’s Immunity Program at the outset of their participation in the program, but that if the case goes to trial, they have waived the privilege by agreeing to testify, at a later date, by virtue of their participation in the program. Note that the ONSC found that there is a temporal element to this waiver.
There are differing views on the impact of the First Stage Hearing Decision. The ONSC took the view that the conferral of informer privilege to immunity applicants will strengthen the program by encouraging parties involved in criminal offences contrary to the Competition Act to come forward knowing that their identities will be held strictly confidential and not revealed until a trial date in the distant future, if ever, because many of these cases settle. Others are concerned that the effectiveness of the Immunity Program will be negatively impacted in cases where informer privilege compromises the Bureau’s ability to condition immunity on cooperation in judicial proceedings other than a trial, to the extent that such cooperation involves revealing the identity of the immunity applicant. Even where it is possible for the Commissioner to seek a sealing order to protect the identity of an immunity applicant, the obligation to do so would be burdensome for the Bureau.
However, in obiter, the ONSC commented that
“the nature of ‘judicial proceedings’ in paragraph 5 of the Bureau’s Form of Immunity Agreement is not defined or limited, and a waiver by the agreement to testify can, in other cases, potentially apply to a variety of judicial proceedings.”
The comment in obiter suggests that in some cases signing an Immunity Agreement could constitute a waiver of informer privilege applicable to testifying in judicial proceedings other than a trial. However, even in a case where the Form of Immunity Agreement could be interpreted as an effective waiver of informer privilege, prior to signing the agreement, informer privilege will protect the identity of witnesses.
As previously mentioned, the Bureau has added new language to its technical guidance documents which now stipulate that “[c]ooperating parties are not confidential informers…the identity of a cooperating party and any information that might tend to identify them are not subject to informer privilege.” It is an open question what effect this language will have. It is possible this new language could serve to create a waiver of informer privilege at the outset of an immunity applicant’s participation in the program. But that possibility has not yet been judicially tested. The counter view is that informer privilege was created and is enforced as a matter of public interest rather than contract. It is owned by both the Crown and the informer. Neither can waive it unilaterally. The First Stage Hearing Decision makes clear that for a waiver to be effective, it needs to be clear, express and informed. Until there is case law on this question, it would be prudent for parties considering participation in the Immunity Program to expect the Bureau will maintain the confidentiality of their identity generally, but that the protection of their identity may not rise to the level of informer privilege.
As the Supreme Court of Canada has decided not to hear an appeal of the decision not to disclose the identities of the witnesses in the Bread Conspiracy, it is unclear whether witnesses in the Bureau’s Immunity Program will be protected by informer privilege. We will look forward to future decisions adding clarity to the cases in which signing an Immunity Agreement may serve to waive informer privilege and to test the new language in the Bureau’s technical guidance documents.