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Evidence compellable even when no assurances as to use are obtained

3 minute read

Canadian courts have consistently held that individuals should expect to be governed by the laws of the state(s) in which they live or conduct business - it is the individual's decision to operate in another country that subjects him or her to the application of foreign law.

In Beaudette v Alberta (Securities Commission), 2015 ABQB, Beaudette challenged the constitutionality of sections of the Alberta Securities Act which allowed him to be compelled to give evidence in relation to an investigation into the trading of shares of a United States ("U.S.") corporation in which he had a controlling interest and permitted the Alberta Securities Commission ("ASC") to share that evidence with other law enforcement authorities. Beaudette refused to be examined on the basis that it would violate his Charter rights unless the ASC provided written assurances that any evidence compelled from him would not be shared with U.S. law enforcement agencies without notice to him to allow him to seek to resist the use of that evidence against him in a criminal proceeding in the U.S. He noted that the securities legislation in other provinces (including Ontario) contains such protections. The ASC was aware of a parallel investigation by the U.S. Securities and Exchange Commission and conceded that there was a possibility that information it compelled would be shared. Beaudette's concern (which the Court found was speculative) was that this could lead to criminal prosecution against him in the U.S.

Following previous authority, the Court found that Beaudette's Charter rights would not be infringed by the examination because:

  • The evidence from the experts on U.S. law expressed different views on whether Beaudette's compelled evidence could be used against him in a U.S. prosecution;
  • The ASC summons was not issued for the predominant purpose of obtaining incriminating evidence against Beaudette, but was for the purpose of the ASC investigation;
  • Even though there was a possibility that the evidence could be used against Beaudette in a U.S. criminal prosecution, the question of what evidence could be used against him in that proceeding was a matter within the exclusive authority of the U.S. court;
  • The ASC was not required to seek assurances that the evidence would not be so used since this was not a case in which the foreign consequences of the obtaining of the evidence in Canada would shock the Canadian conscience – the American Constitutional approach to the protection against self-incrimination does not shock the Canadian conscience; and
  • Leaving the determination of what evidence would be admissible against Beaudette to a U.S. court would not lead to a violation of Canada's obligations in respect of international law or fundamental human rights.

The Court distinguished this case from situations in which Canadian action was held to be unconstitutional when the extra-territorial consequences of that action would shock the Canadian conscience, such as extraditing an accused to a country in which that accused might be tortured or face the death penalty (U.S. v Burns, 2001 SCC 7, Suresh v Canada, 2002 SCC 1, and Canada v Khadr, 2008 SCC 28, for example.) Ultimately, the Court found that in the highly regulated securities industry, state intrusion into individual participants' privacy is justifiable and expected.

Therefore, anyone facing this risk would be wise to obtain legal advice in both Canada and the United States. This case suggests that while counsel may try to negotiate certain protections, such as separate interviews with Canadian and U.S. agencies so that the Fifth Amendment may be invoked, or assurances that any evidence will be held confidential and not shared with any other law enforcement authorities, a Canadian court is likely to compel the taking of the evidence, even if these protections cannot be obtained.

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Lisa C. Munro, Q.Arb

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