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No Jury Trial for Securities Offences: Economic Penalties Are Not A “More Severe Punishment” Under Section 11(f) of the Charter

Posted in Case Comments, Charter of Rights, Constitutional, Criminal, Procedural Rights, Securities, Supreme Court of Canada
Timothy Froese

Is a $5 million fine a less severe punishment than a night in jail?  Are hefty financial penalties for quasi-criminal or regulatory offences able to trigger the procedural protections of the Canadian Charter of Rights and Freedoms when combined with the threat of imprisonment? The Supreme Court of Canada had the opportunity to address these questions when it recently released the twin decisions of R v Peers, 2017 SCC 13 and R v Aitkens, 2017 SCC 14.

The appeals were from the decision of R v Peers, 2015 ABCA 407, in which a majority of the Alberta Court of Appeal held that a person charged with an offence under s.194 of the Alberta Securities Act, RSA 2000, c S-4, was not entitled to a jury trial pursuant to section 11(f) of the Charter, because the substantial fines that could be imposed under that Act were not equivalent to the deprivation of liberty.

The Supreme Court did not disturb the ruling or reasoning of the Court of Appeal, simply stating, unanimously, that each appellant “was not entitled to a trial by jury, substantially for the reasons of the majority of the Court of Appeal.”

Background and Lower Court Decisions

The appellants were charged with multiple offences under s.194 of the Alberta Securities Act, which could result in liability for “a fine of not more than $5 000 000 or to imprisonment for a term of not more than 5 years less a day, or to both.”

The appellants argued that they were entitled to jury trials pursuant to s.11(f) of the Charter, which guaranteed that right “where the maximum punishment for the offence is imprisonment for five years or a more severe punishment.”

The appellants were to be tried in Provincial Court, which cannot accommodate jury trials.  Their requests to transfer to the Alberta Court of Queen’s Bench were denied in separate Queen’s Bench and Provincial Court decisions.  The appellants appealed to the Alberta Court of Appeal.

The Alberta Court of Appeal Decision

The Court of Appeal focused on the question of whether a maximum penalty of five years less a day plus a $5 million fine is “a more severe punishment” than five years of imprisonment so as to confer a right to a jury trial under s.11(f) of the Charter.  The Court noted that the penalty of five years less a day in the Securities Act was deliberately chosen by the Alberta legislature to avoid jury trials in complex securities prosecutions.

The appellants argued that a $5 million fine is worth at least one day of liberty, and therefore a maximum sentence of five years less a day plus $5 million is “a more severe punishment” than a sentence of five years:

“…how much is a night in jail worth to a reasonable Canadian?  If a night in jail is worth $5 million or less then the appeal must succeed.”

The Court of Appeal acknowledged this argument and Justice O’Ferrall, who concurred in the result, stated in obiter that he was “not entirely satisfied” that it was without merit.  However, Justices Berger and Slatter found the appellant’s suggestion to be “entirely unworkable” and cited R v Silveira, [1995] 2 SCR 297 for the principal that the interpretation of the Charter must be “practical”.  The majority held that the appellants’ interpretation was not capable of reasonable definition and application because it is “impossible to measure how much a ‘night in jail is worth’ when compared in a qualitative sense to imprisonment.”

More importantly, the majority of the Court of Appeal held that the Canadian legal system “does not recognize any equivalency between money and deprivation of liberty.”  The magnitude of potential fines under the Securities Act is intended to prevent economic misconduct, and does not make a term of imprisonment “more severe”.  The majority concluded:

“On a proper purposive interpretation of s.11(f), in its context, the expression ‘imprisonment for five years or a more severe punishment’ should be interpreted as primarily engaging the deprivation of liberty inherent in the maximum sentence of imprisonment imposed by the statute.”

The Court left open the possibility that other non-economic penalties, such as corporal punishment, banishment, forced labour or revocation of citizenship, could render a term of imprisonment “more severe” – but did not explain how to reconcile this with the need for a practical interpretation of Charter rights.   

The Supreme Court of Canada Decision

In dismissing the appeals “substantially for the reasons of the majority of the Court of Appeal”, the Supreme Court held that financial penalties were not to be considered when applying s.11(f) of the Charter, and there is no right to a jury trial for offences under Alberta’s Securities Act.

Implications

The Supreme Court of Canada’s decision confirms that fines and other economic penalties are not considered when determining the severity of a punishment for the purposes of the s.11(f) right to a jury trial, regardless of their magnitude.  A $5 million dollar fine added to a prison sentence does not result in “a more severe punishment”, even by a single day, so as to engage the Charter right to a jury trial.

This closes the door on jury trials for securities offences in Alberta, allowing those offences to be tried in Provincial Court.  The Supreme Court’s ruling applies equally to other criminal, quasi-criminal and regulatory offences, including securities offences in many Canadian jurisdictions, in which the maximum penalty includes prison time of less than five years plus a fine.

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Case Information

R v Peers, 2017 SCC 13.

Case Number: 36865

Date of Decision: February 24, 2017

R v Aitkens, 2017 SCC 14.

Case Number 36866

Date of Decision: February 24, 2017