RIGHTING AN OLD WRONG

By Cheryl A. Edwards and George Parris

Many will say that the recent Ontario Court of Appeal decision in R. v. Inco (released June 6, 2001) has been too long in coming. On the surface, the question at issue was a simple one: When does a inspector, entering the premises of a corporation to ensure compliance with regulations, become instead an investigator gathering evidence for a prosecution? The question is of great significance because a corporation is required by law to provide an inspector with extraordinary access and information in order that he or she may fully "inspect" the workplace for regulatory compliance; but the corporation may not be under the same obligation under the law to provide that same inspector with prejudicial or incriminating information when he or she has assumed the role of investigator gathering evidence for a prosecution.

Consider the case of a corporation ordered by investigators to produce an expert report respecting accident causation, which then finds itself prosecuted under oh&s legislation based upon material revealed in its own expert’s report. Or the case of a corporation providing detailed and specific information in its statutorily-required accident report in good faith (all provinces require mandatory reporting of certain accidents), only to find the statements and other materials used as the basis for oh&s charges. Or consider the more extreme case, which arises from time to time, in which regulatory inspectors bully corporate representatives into submitting incriminating information that could be used in a prosecution, even to the point of telling the corporate representatives what to put into the accident investigation report, whom to interview, and how to interview witnesses and injured workers.

Corporations have been regarded as having relatively limited rights to challenge the broad regulatory powers of inspectors who knock on the door after an accident, enter the workplace, question employees, take measurements, seize items and later utilize evidence gathered during the inspection in a prosecution before the court. Courts have generally deferred to the view that inspectors involved in enforcing regulatory requirements, such as those found in environmental and health and safety legislation, are permitted greater powers (although some would say abuses) to ensure that the government achieves the critically important objectives of the regulatory regime. (See, for example, the Supreme Court of Canada decisions in Regina v. Wholesale Travel Group (1991), 84 D.L.R. (4^th) 161, and in Ontario v. Canadian Pacific, [1995] 2 S.C.R. 1031).

However, the Ontario Court of Appeal decision in Inco signals a new direction. It would appear that a regulatory inspectors’ ability to investigate contraventions of environmental and health and safety legislation through statutory powers that were intended for routine regulatory inspections may now be severely circumscribed. The ruling is binding on all lower courts in Ontario, and will serve as a powerful precedent in the other provinces and territories.

The Inco case

The Inco case dealt with an alleged contravention of environmental legislation in Ontario, the Ontario Water Resources Act (OWRA). The focus of the case was the powers of inspection found in the OWRA, which are quite similar in both scope and wording to the powers of inspection found across Canada in oh&s legislation.

In Inco a number of discharges of waste materials occurred. The Ontario Ministry of Environment (MOE) was contacted, and an abatement officer and an enforcement officer were dispatched to the scene. The enforcement officer, using his powers of inspection under s.15 of the OWRA, arranged with Inco’s in-house counsel to conduct interviews with the relevant personnel who had knowledge of the incident. The interviews were conducted in the presence of in-house counsel who, prior to the commencement of each interview, stated his objection to the interview and indicated that Inco was cooperating to avoid charges for obstruction. Furthermore, the interviews were taped by the inspector, again in the face of objections by in-house counsel. Following the interview sessions, the enforcement officer requested that various documents be produced relating to the discharge, including Inco’s own sampling analysis of the discharges and Inco’s operational procedures on shutdowns. Inco was subsequently charged with breaching the OWRA.

Inco’s counsel argued at trial that the enforcement officer violated Inco’s rights under s.8 (to remain secure against unreasonable search and seizure) and s.11(d) (fair trial) of the Charter of Rights and Freedoms (see sidebar). Inco argued that the inspection powers of the OWRA were improperly used by the enforcement officer to build a case for the prosecution. Inco argued that once the inspector had reasonable and probable grounds to believe an offence had been committed, the inspector could no longer rely on the inspection powers of the OWRA. Instead, it argued, the inspector should have obtained a search warrant to conduct the investigation. As a result, Inco argued that the charges ought to be stayed as they amounted to an "abuse of process" by virtue of the alleged Charter violations.

This argument was rejected by the trial court and Inco was convicted.

Inco promptly went to the Court of Appeal and won. The Ontario Court of Appeal held that there was merit to the "abuse of process" argument, and that the issue should have been dealt with differently at trial.

The Ontario Court of Appeal made a number of very strong comments that strike directly at the heart of regulatory inspection powers. The court’s comments go a long way to curtailing the ability of inspectors, under any regulatory statute, to use their sweeping regulatory powers to gather evidence during an inspection and then use this evidence against a corporation or another party. The court in Inco stated that an agent of the state cannot utilize the inspection (as opposed to investigation) powers of regulatory legislation for the purposes of investigating the commission of an offence. Where an officer has a reasonable belief that a regulatory statute has been contravened, and is in reality gathering evidence to bolster a prosecution, then the officer can no longer utilize the full range of statutory inspection powers available to him or her. To do otherwise would be to violate a corporation’s right to be free from unreasonable search and seizure under s.8 of the Charter.

Section 8 of the Charter provides a right to all persons, whether real or corporate, to be free from unreasonable searches and seizures, subject to "reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society" (as set out in s.1 of the Charter). The right itself can be characterized as a right to a reasonable expectation of privacy. Where the circumstances in question point to a high expectation of privacy, then it is likely that s.8 will be breached where no judicially authorized search warrant has been obtained. However, where the circumstances in question point only to a very low expectation of privacy, then it will be unlikely that a s.8 breach will be found.

Parties who are regulated under oh&s or environmental legislation are regarded as enjoying a relatively low expectation of privacy. Therefore, their rights under s.8 of the Charter are not normally engaged by an inspection or request for information (i.e. an administrative inspection to enforce legislation). Given the routine nature of a regulatory inspection and the public interest in this regard, a court will not usually find that there was a reasonable expectation of privacy. On the other hand, as stated by the court in Inco, an investigation into the commission of an offence requires a judicially authorized search warrant, while a regulatory inspection does not. Where a warrantless search is conducted in the face of a reasonable belief that an offence has been committed, the search becomes an investigation rather than a regulatory inspection, and will most likely be regarded as violating s.8 of the Charter.

It was found by the court that the actions of the enforcement officer in Inco could have been an unlawful search and seizure. The court regarded the corporation as having a reasonable expectation of privacy, and therefore that a warrant ought to have been obtained by the officer if he had a reasonable belief that an offence had been committed. Once the court determined that circumstances could exist where a search warrant is necessary, the issue turned to whether the officer in fact had reasonable grounds to believe that an offence has been committed. The court stated that where a regulator has reasonable and probable grounds to believe that an offence has been committed, a reasonable expectation of privacy will be present and a judicially authorized search warrant would be required. The court stated at paragraph 36:

"If there was enough evidence to support the existence of reasonable and probable grounds before the IEB Officer entered Inco’s premises, then the inspection provision in s.15 of the OWRA could not be relied on and the IEB Officer ought to have obtained judicial authorization to enter Inco’s premises. Urgent circumstances such as would make obtaining a warrant impractical did not exist."

In disposing of the appeal on this issue, the Court of Appeal found that the question of whether the officer had a reasonable belief would have to be dealt with at a new trial.

What’s next

The Inco decision represents a dramatic and important development in the field of regulatory enforcement, and will undoubtedly have an effect on oh&s officers’ powers to investigate the commission of an offence. The Court of Appeal, however, did not deal with a number of important issues.

For example, at what point in time during an inspection does it become necessary for an inspector to obtain a search warrant? If an oh&s inspector uncovers a contravention of the legislation during a routine inspection, does the inspector then lose the ability to exercise the powers of inspection under the oh&s statute and have to leave to obtain a search warrant before continuing the inspection? Can a corporation or other party insist that the inspection cease at the point where the inspector has -- or ought to have -- grounds to believe an offence has been committed? Can entry to the workplace be refused when an officer attends after a serious accident has occurred, pending the officer’s obtaining of a search warrant to conduct an investigation?

It should be noted that the Supreme Court of Canada (see R. v. Potash (1994), 115 D.L.R. (4^th) 702) has made it quite clear that at the point in time at which a complaint of a possible regulatory breach has been made, it cannot be said that an inspector has reasonable and probable grounds to believe that an offence has been committed or that a search warrant is required at that point. The Supreme Court of Canada in Potash stated that information, especially if given anonymously, cannot found reasonable and probable grounds for belief. This does leave open the question, however, of whether it can be argued that an investigator advised of a serious accident already has reasonable and probable grounds to believe that an offence has been committed, and should come to the door armed with a warrant. Any issue of whether the investigator has reasonable and probable grounds upon arrival, or upon commencing an investigation, however, will have to be dealt with by the trier of fact (i.e. the judge at trial, perhaps responding to a motion from the defence calling for the exclusion of evidence) after a charge has been commenced and based upon the evidence presented.

Another question left unanswered by Inco is the use that can be made of information gathered prior to an inspector’s concluding that he or she has reasonable and probable grounds to believe an offence has occurred. Can the investigator still use this information? It is arguable that any information gathered by an inspector during the course of his or her routine regulatory inspection should not be admissible for the purpose of a prosecution. Several cases have suggested that there should be "use immunity" attaching to such information. This argument is based upon s.7 of the Charter which enshrines, among other things, a right to silence on the part of accused parties. The information-gathering and mandatory-reporting requirements of oh&s legislation would effectively subvert this right if information so gathered could be used against a corporation or other party in court -- although this is currently the status quo.

How does a corporation or workplace party now respond to an inspector who attends at the work site to investigate? This question will be of immediate concern when an inspector attends following an accident.

We suggest the following:

* There remains a legal obligation to cooperate with, and not interfere with, a regulatory inspector. Any corporation or individual workplace party must continue to take a position that is consistent with statutory obligations that require cooperation during a regulatory inspection. Cooperation, of course, has never included any obligation to provide incriminating information beyond the minimum statutory accident reporting requirement and obligations to cooperate.

* Most statutory oh&s provisions across Canada still permit warrantless searches and the seizure of items that are in the plain view of an inspector attending at the workplace. A corporation making its own determination that an inspector has "reasonable and probable grounds to believe that an offence has been committed" and therefore should have a warrant, is likely acting at its own peril. Rather than refusing entry without warrant, a corporation being inspected following an event which could give rise to a reasonable expectation of prosecution, should make a series of inquiries and take a number of careful steps to protect its rights. Those could include the matters described below.

* As was undertaken by legal counsel in Inco, putting on the record an objection to the investigator’s actions and demands can be one effective way of protecting the rights of the corporation and other workplace parties. For example, a corporation, through its representative, could state a concern that it believes that it is being investigated for the potential commission of an offence, and that it is concerned that this is a warrantless search; but that cooperation is being provided in order to avoid a prosecution for lack of cooperation or for obstruction. A corporate representative could indicate that he or she has been asked to advise the inspector of this by legal counsel.

* Another potential mechanism would be to have a corporate representative state that information is being provided solely in accordance with the obligations set out in oh&s legislation; and on the understanding that it is being provided pursuant to the investigator’s regulatory inspection powers; and on the understanding that such information provided to the investigator will not be used for the purposes of a prosecution. Such a statement accompanying information, documents or reports, compelled or requested by the inspector, may be effectively utilized to later argue that no rights were waived by the corporation or its representative.

* In all cases, it will be more important than ever before that corporate representatives take detailed notes of any regulatory inspection or investigation where there is a reasonable basis to believe that a prosecution may occur. All notes pointing to a conclusion that an investigation, rather than a routine regulatory inspection, was proceeding, could potentially be utilized to found Charter of Rights or "abuse of process" arguments should a prosecution be commenced.

SIDEBAR

RIGHTS OF CORPORATIONS TO COMPLAIN OF ABUSE

Although corporations are subject to the same laws as natural persons, the courts have held that they do not enjoy the same rights and privileges as natural persons. State authorities take advantage of this reality whenever they can.

Abuse of process: An abuse of process is often pleaded where there is evidence pointing to the violation of rights or the use of high-handed techniques during the investigatory or prosecutorial stages of state action. Depending upon the circumstances, where an "abuse of process" is found, the charges may be a stayed (dismissed) by the court. This remedy, however, is discretionary and will only be granted in the "clearest of cases", and only where no other remedy is sufficient to cure the abuse. Where the abuse can be cured by means of a less drastic remedy, such as the exclusion of the evidence tainted by the state’s actions, then the court will opt for the lesser remedy.

There must be a wanton or egregious violation of rights or a pattern of conduct that is found to have resulted in extreme unfairness. The leading Supreme Court of Canada case on "abuse of process" is Canada v. Tobias (1997), 151 D.L.R. (4^th) 119, which states that there are essentially only two circumstances in which a court may grant a stay of proceedings for abuse of process:

* where the abuse will be manifested, perpetuated or aggravated through the trial or its outcome, and no other remedy is reasonably capable of removing that prejudice and affording the accused with a fair trial ("fairness of the proceedings"); or

* where, even though a fair trial is possible, the impugned conduct was so egregious that to continue the proceedings in the face of it would shock the community ("the integrity of the judicial system").

A court must find that at least one of the above has resulted from the actions of the state before a stay can be granted. Although a corporation can take advantage of this argument, it will normally have a more difficult time demonstrating prejudice than a natural person would.

Unreasonable search: As was seen in Inco, Corporations clearly enjoy s.8 Charter rights to be free from unreasonable search and seizure. Section 8 essentially deals with a person’s reasonable expectation of privacy. Where it is found that there is a reasonable expectation of privacy, state authorities may not conduct a search and seizure without a search warrant (except in exigent circumstances).

Fair trial: Corporations also enjoy the right to a fair trial under section 11(d) of the Charter. Essentially, this section secures for the accused a right not to be unfairly prejudiced at trial by the state. In Inco, the actions of the officer investigating without a search warrant could result in a deprivation of a fair trial by the accused, and lead to a stay of proceedings or the exclusion of evidence.

SECTION 11(c) – RIGHT NOT TO BE COMPELLED IN PROCEEDING

Not to be compelled: Section 11(c) essentially deals with an accused’s right not to be compelled to give testimony at his or her own prosecution; the accused is not a compellable witness for the Crown. Corporations, however, have no such right as it has been said to be a "flesh and blood" right that applies only to natural persons. Therefore, any corporate representative is a compellable witness to give evidence at the trial of a corporate accused.

Life, liberty and security of person: The rights enumerated under s.7 entail, among other things, the right to silence and the right to be free from self-incrimination -- both very important rights when being investigated by state authorities. Corporations, however, do not enjoy s.7 rights, as an artificial person is incapable of possessing life, liberty and security of the person -- these attributes can only belong to natural persons. Therefore, this right cannot be used to challenge the actions of state agencies. However, it has been clearly established that legislation that contravenes the s.7 rights of an individual can be properly challenged by a corporation that is also affected by that legislation. Corporations can benefit from s.7 rights only in this manner.

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