March 9, 2013

In a very interesting case released on March 1st (R. v. J.F., 2013 SCC 12), the Supreme Court of Canada settled a debate between previously rival authorities for establishing party liability in criminal conspiracy cases.

While this case involved rather grisly criminal conspiracy-related facts, involving allegations of a conspiracy to commit murder (an agreement between youths to ply their mother with alcohol and drugs, drown her in the bathtub and make it appear an accident), it has potential implications for other types of conspiracy agreements including conspiracy and bid-rigging agreements under the federal Competition Act (sections 45 and 47).

The issues in this case were: (i) whether a person can be found liable as a party to an offence of conspiracy under section 21 of the Criminal Code (which includes liability to an offence for aiding or abetting the offence, in addition to actually committing it); and (ii) if so, under what circumstances, with the Court referring to the latter, quite rightly given the uncertainty of the law to date, as “the more perplexing issue” and “centerpiece of the appeal”.

The aiding and abetting provisions of the Criminal Code also apply to competition law offences in Canada – for example, in a 1966 Supreme Court case – R. v. Campbell – it was held that while the former Combines Investigation Act did not refer to aiding or abetting, it did not exclude the application of section 21 of the Criminal Code.

A number of recent Canadian cartel cases have also involved allegations or admissions of liability based on aiding and abetting conduct.  These include a case involving Mitsubishi Corporation in 2005 (in which Mitsubishi was fined for aiding and abetting the implementation of a foreign-directed conspiracy in Canada); a case in 2005 involving Nippon Carbon Ltd. (which pleaded guilty and was fined $100,000 for aiding and abetting an international conspiracy to fix the price of graphite electrodes used in steel production); and a case involving Ibiden Co. Ltd. (which was fined for aiding and abetting a conspiracy to fix the price of isostatic graphite’s, a fine grain carbon product).

In answering the questions set out above, and in a concurring decision, the Court reviewed two conflicting lines of authorities that had been adopted by courts in different provinces with divergent approaches to party liability for conspiracy cases.

One broad approach, referred to the “McNamara model”, after the decision in R. v. McNamara (No. 1) (1981), 56 C.C.C. (2d) 193 (Ont. C.A.), extended party liability in conspiracy cases where an accused aided or abetted the furtherance of a criminal conspiracy’s unlawful object (a broad basis, which would potentially lead to liability in more instances).

Another and narrower approach referred to as the “Trieu model”, after the decision in R. v. Trieu, 2008 ABCA 143, limited party liability in conspiracy cases to situations where an accused aided or abetted the formation of a conspiracy agreement (thus a narrower basis of liability, and one more clearly linked to the elements of the offence of conspiracy – i.e., an agreement).

On the more orthodox point (being a party to an offence of conspiracy), the Court held that being a party to a conspiracy is an offence known to law.

On the less clear and more challenging and interesting question, namely the required linkage of an accused to a conspiracy agreement (framed by the Court as: “how and under what circumstances a person [can] be found liable as a party to the offence of conspiracy”), the Court held that the correct approach was based on the narrower Trieu model.  In other words, party liability in conspiracy cases is to be limited to cases where an accused aids or abets the initial formation of an agreement or, alternatively, aids or abets a new member to join a pre-existing agreement.

The Court’s primary rationale for adopting this narrower approach related to the nature of conspiracy offences – i.e., the central actus reus (i.e., act element) of a conspiracy is the conspirators’ act of agreeing.  In this regard, the Court held:

“The Trieu model is a legitimate basis for party liability to a conspiracy.  A person becomes party to an offence if he aids or abets a principal in the commission of the offence.  It follows that party liability to a conspiracy is made out where the accused aids or abets the actus reus of conspiracy, namely the conspirators’ act of agreeing.”

The Court also confirmed more than a century of Canadian jurisprudence that the “essence of the crime of conspiracy” (whether under the Criminal Code or Competition Act offences) is an agreement and, therefore, that liability should be founded on either committing the offence or aiding or abetting the offence (i.e., an illegal agreement).

The Court reasoned that, since acts that further the unlawful object of a conspiracy are not elements of the offence of conspiracy, aiding or abetting such acts should not expose a criminal accused to liability.

Having said that, the Court did also hold that where a person, with knowledge of a conspiracy, does or omits to do something for the purpose of furthering the mere (or perhaps more accurately, more mere) unlawful object, with the knowledge and consent of one or more of the existing conspirators, this may “provide powerful circumstantial evidence from which membership in the conspiracy can be inferred.”

In other words, where there is evidence of an accused supporting a conspiracy’s object, but not the agreement itself, this may be, depending on the facts, a sufficient ground on which to base criminal liability.  This is a logical conclusion and extension of the Court’s holding and consistent as well with Canadian conspiracy authorities generally that an agreement may be established based on mere circumstantial evidence (although still with the necessity to be proven on the criminal burden of proof – i.e., beyond a reasonable doubt).

On the particular facts of this case, while the Court found that party liability should not have been put to the jury (given that there was no evidence that the accused aided or abetted the initial formation of the agreement or aided or encouraged a new member to join the conspiracy), the Court nevertheless found that the trial judge’s error could not have affected the verdict given that the evidence implicating the accused as a member of the conspiracy was “overwhelming”.

This interesting decision is important for several reasons, including for clarifying (and potentially narrowing) the circumstances in which criminal accused under the Competition Act may face liability for agreement related offences (including conspiracy, foreign directed conspiracies and bid-rigging).

The decision also gives persons that are being challenged by the Competition Bureau a clearer indication of when, and under what circumstances, allegations of aiding or abetting a criminal offence may be established, given that it is not uncommon for the Bureau to rely on aiding or abetting theories of liability in criminal cartel cases in Canada in addition to theories that an accused actually committed the offence.

For example, in the Bureau’s Competitor Collaboration Guidelines, the Bureau states that it may seek criminal conspiracy (cartel) liability under section 45 of the Competition Act based on aiding or abetting theories, including for trade association conduct:

“Where an agreement involves competing and non-competing parties, the fact that some parties are not competitors does not insulate the non-competing parties from prosecution under section 45.  [criminal conspiracy agreements]  Parties that are not competitors may also be prosecuted under section 45 through the aiding and abetting provisions in section 21 or the counseling provisions in section 22 of the Criminal Code … Agreements between members of a trade or other industry association may also constitute agreements between competitors for the purpose of section 45. … In the event that such an agreement contravenes section 45, the trade association may be considered as a principal party to the offence or may be subject to prosecution through the aiding and abetting provisions in section 21 of the Code.”

For a copy of the decision see: R. v. J.F., 2013 SCC 12.


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