Deal or no Deal The Antitrust Plea Agreement that Came and Went in R. v. Couche-Tard Inc. Huy Do Partner Fasken Martineau DuMoulin LLP & Antonio Di Domenico Partner Fasken Martineau DuMoulin LLP 1
OVERVIEW Plea and immunity agreements (and their potential repudiation) have become emerging issues in antitrust matters in Canada. In the recent case R. v. Nixon, a general criminal law matter, the Supreme Court of Canada concluded that Crown prosecutors can exercise their prosecutorial discretion to renege on plea agreements, and that such decisions are only reviewable by courts for abuse of process. 1 The Supreme Court also found that the burden of proof for demonstrating an abuse of process is high and lies with the accused. Fourteen months later, the repudiation of a plea agreement was at issue in an antitrust matter, R. v. Couche- Tard Inc. 2 In Couche-Tard, a Québec-based gas retailer and convenience store operator overcame charges of price-fixing under Canada s Competition Act when a Québec Superior Court judge concluded that the Crown s repudiation of a plea agreement irreparably prejudiced the fairness of the proceeding. 3 To our knowledge, this is the first case in Canada where the repudiation of an antitrust plea agreement was at issue. Nixon has significant implications for antitrust matters in Canada. It confirmed that the Crown s decision to resile from a plea or immunity agreement will go unchecked failing a successful abuse of process challenge. 4 However, the Court in Couche-Tard did not apply the stringent Nixon test. Based on the unique circumstances of Couche-Tard (as detailed below), the Court concluded that the Crown s repudiation of the plea agreement was not an abuse of process. Nevertheless, the Court overturned the Crown s repudiation of the plea agreement due to procedural fairness concerns. 5 Couche-Tard is currently under appeal. This article will outline the circumstances and analyses in the Nixon and Couche- Tard decisions. In addition, it will discuss the implications that these decisions, when read together, pose for antitrust matters in Canada, specifically those involving plea and immunity agreements. 1 2011 SCC 34, [2011] S.C.J. No. 34, [2011] A.C.S. no 34 [Nixon]. 2 2012 QCCS 4721, [2012] J.Q. No. 9567 [Couche-Tard]. 3 R.S.C., 1985, c. C-34. 4 In this article, unless otherwise stated, Crown, Crown counsel or Crown prosecutor will be used interchangeably to refer to any of the following entities: Public Prosecution Service of Canada, the Director of Public Prosecutions, and Her Majesty the Queen. 5 Couche-Tard, supra note 2 at para. 13ff. 2
THE CIRCUMSTANCES IN COUCHE-TARD In June 2008, Alimentation Couche-Tard Inc. ("Alimentation") was charged with two counts of fixing retail gasoline prices in Québec contrary to section 45(1)(c) of the Competition Act. Crown counsel and Alimentation s counsel engaged in negotiations between November 16, 2009 and January 14, 2010. The parties reached an agreement on January 14, 2010, the salient terms of which were as follows: Alimentation was to pay $3,250,000 to the Receiver General of Canada; Alimentation was to provide Crown counsel with its arguments regarding why Alimentation had no corporate responsibility for the charges laid against it; Alimentation would consent to a prohibition order (without any admission of committing the offence); The Crown would recommend a stay of criminal proceedings against Alimentation; and The Competition Bureau would recommend to the Crown that none of the companies belonging to the Couche-Tard group (which included Alimentation), nor their officers, directors or employees should be prosecuted. 6 The next day, Alimentation s lawyers met with Crown counsel and outlined the factual and legal bases upon which they had planned to argue that Alimentation was not criminally responsible, one of which was that Alimentation did not sell gasoline. In other words, the Crown had charged the wrong company amongst the Couche-Tard group of companies. During this meeting, Crown counsel told Alimentation that the Competition Bureau no longer liked their agreement. A few days later, on January 21, Crown counsel advised Alimentation that the Director of Public Prosecutions, Brian Saunders, had decided to repudiate the deal. On March 24, 2010, Mr. Saunders wrote to Alimentation explaining why the Crown was repudiating the agreement. 6 Ibid. at para. 4. 3
He explained that it was not in the public interest to let a group of closely related corporations off the hook because the wrong company had been charged. He also noted the Bureau s recommendation against charging any company belonging to the Couche-Tard group or their officers, directors or employees was too broad. 7 Within the next two days, Crown counsel withdrew the charges against Alimentation and, instead, laid charges against Couche-Tard Inc., another member of the Couche-Tard group of companies. 8 Couche-Tard Inc. applied to the Québec Superior Court for a stay of the criminal charges. THE DECISION AND ANALYSIS IN COUCHE-TARD Justice Tardif of the Superior Court of Québec concluded that the Crown s repudiation of the plea agreement had irreparably prejudiced the fairness of the proceeding. As a result, he stayed the proceeding. Justice Tardif concluded that the Crown s repudiation of the plea agreement deal was neither arbitrary nor abusive because the agreement was contrary to public interest. 9 In other words, it did not constitute an abuse of process. In fact, Justice Tardif considered the Crown s decision to repudiate appropriate, commenting that the lawyers for both sides got carried away when trying to enter into a deal. 10 Notwithstanding this finding, Justice Tardif concluded that the Crown had caused irreparable prejudice to the fairness of the trial because it repudiated the plea agreement after Alimentation outlined its defense theory. Justice Tardif emphasized the accused s right not to testify before the Crown has presented all of its evidence. In fulfilling part of its obligations under the plea agreement, Alimentation provided 12 arguments in support of its lack of corporate liability. Although certain grounds of Alimentation s defense could have been anticipated, the Crown would not have known Alimentation s defense strategy but for the plea 7 Ibid. at para. 6-9. 8 Ibid. at para. 10. 9 Ibid. at para. 15. 10 Ibid. at para. 17. 4
agreement. In other words, fairness of the trial had been compromised because the Crown could not unlearn what had been disclosed to it. 11 Justice Tardif noted that it was beyond the Court s power to assess each of the 12 arguments and to decide whether their disclosure precluded the just and fair trial to which the accused was entitled. He said that a finding that the fairness of the trial had not been irremediably affected would require strong evidence, and that he favored the defence s argument on this point. 12 This suggests that if the Crown could have produced enough evidence to support that it in fact had unlearned what was disclosed to it, or if it could demonstrate that it had not learned of any material defence strategy, then the Court may not have found irreparable prejudice. THE CIRCUMSTANCES IN NIXON Olga Nixon drove her motor home through an intersection and struck another vehicle, killing a husband and wife and injuring their young son. She was charged with offences under the Criminal Code and Alberta s Traffic Safety Act. 13 Crown counsel with carriage of the matter had concerns about some of the evidence, including the admissibility of breathalyzer results and the probative value of certain eye witness testimony. Having regard to these evidentiary concerns, Crown counsel entered into a written plea agreement with Ms. Nixon, which provided that the latter would plead guilty to a charge under the Traffic Safety Act and pay a $1,800 fine. In return, the Crown agreed to withdraw the Criminal Code charges. 14 Thereafter, the Acting Assistant Deputy Minister of the Criminal Justice Division of the Office of the Attorney General (the "ADM") reviewed the plea agreement and initiated an inquiry, the results of which led him to instruct Crown counsel to withdraw the agreement and proceed to trial. In response, Ms. Nixon brought a section 7 application under the Canadian Charter of Rights and Freedoms alleging an abuse of process and seeking a court direction requiring the Crown to complete the plea agreement. 15 Ms. Nixon was successful at trial but unsuccessful at the 11 Ibid. at para. 23-32. 12 Ibid. at para. 32. 13 R.S.C., 1985, c. c-46; R.S.A., 2000, C. T-6. 14 Nixon, supra note 1 at para. 6-8. 15 Ibid. at para. 10-11; 1982, c. 11 (U.K.), Schedule B [Charter]. 5
Alberta Court of Appeal. 16 The Supreme Court of Canada agreed with the Court of Appeal, and ordered a new trial to proceed. THE SUPREME COURT S ANALYSIS IN NIXON Prosecutorial Discretion The Supreme Court found that the Crown s ultimate decision to resile from a plea agreement and to continue the prosecution is an exercise of prosecutorial discretion. An exercise of prosecutorial discretion is subject only to judicial review under the abuse of process doctrine. 17 Preliminary Evidentiary Threshold The Supreme Court confirmed that there is an evidentiary threshold that must be met by an applicant who alleges that an exercise of prosecutorial discretion constitutes an abuse of process. 18 This is not dissimilar to preliminary threshold requirements in other areas of criminal law, where trial judges may refuse to embark upon a Charter inquiry on the basis of bare allegations. 19 Of significance, the Supreme Court clarified that the repudiation of a plea agreement is not a bare allegation. Evidence that a plea agreement was entered into and subsequently reneged by the Crown provides the requisite evidentiary threshold to embark on an abuse of process review. When there is sufficient evidence of such an event, the Crown bears an evidentiary burden to enlighten the Court as to the circumstances and reasons behind its decision to resile from the agreement. Relying on this information, the accused may then make its case for a stay of the proceeding for abuse of process. 20 Evolution of the Abuse of Process Doctrine and the Charter Starting with R. v. Jewitt, the Supreme Court has recognized that a trial judge has the residual discretion to stay proceedings to remedy an abuse of process. 21 In Jewitt, the Court held that the abuse of process doctrine could be applied in narrow 16 Nixon, ibid. at para. 8-16. 17 Ibid. at para. 20. See also Kreiger v. Law Society of Alberta, 2002 SCC 65, [2002] S.C.R. 372 at 30-32. 18 Nixon, ibid. at para. 61-62. 19 Ibid. at para. 61. See also R. v. Pires, 2005 SCC 66, [2005] 3 S.C.R. 343. 20 Nixon, ibid. at para. 63. 21 [1985] 2 S.C.R. 128 [Jewitt]. 6
circumstances where compelling an accused to stand trial would violate those fundamental principles of justice which underlie the community s sense of fair play and decency and to prevent the abuse of a Court s process through oppressive or vexatious proceedings. For an applicant to successfully invoke the Court s common law power to stay proceedings for abuse of process, the burden of proof is the onerous clearest of cases standard. 22 A decade later, in R. v. O Connor, the Court merged the self-contained common law abuse of process doctrine with the Charter. 23 The merger saw the protection against abuse of process encapsulated within the residual category of conduct caught by section 7 of the Charter. 24 O Connor identified two categories of abuse of process that would be caught by section 7: prosecutorial conduct affecting the fairness of the trial, and prosecutorial conduct that contravenes fundamental notions of justice and therefore undermines the integrity of the judicial process. The Court further elaborated that while the burden of proof for violations of section 7 is on a balance of probabilities, the court must still determine an appropriate remedy under section 24(1) of the Charter when a violation is made out. In that regard, the Court held that the "clearest of cases" burden still applies to justify the remedy of a judicial stay of proceedings under section 24(1) of the Charter. 25 In Canada (Minister of Citizenship and Immigration) v. Tobiass, and thereafter in R. v. Regan, the Supreme Court set out the test for granting a stay of proceedings for an abuse of process. 26 A stay of proceedings will only be appropriate in the clearest of cases where: (1) the prejudice caused by the abuse in question will be manifested, perpetuated or aggravated through the conduct of the trial, or by its outcome; and (2) no other remedy is reasonably capable of removing that prejudice. 27 Findings in Nixon 22 Nixon, supra note 1 at para. 33-34, citing Jewitt, ibid. at para. 21. 23 [1995] 4 S.C.R. 411 [O Connor]. 24 Ibid. at para. 73. 25 Ibid. at para. 69. 26 [1997] 3 S.C.R. 391; 2002 SCC 12, [2002] 1 S.C.R. 297 [Regan]. 27 Regan, ibid. at para. 54, citing O Connor, supra note 23 at para. 75. 7
Nixon and preceding Supreme Court jurisprudence demonstrate that an accused has an enormous legal burden to overcome to make its case to stay a proceeding for an abuse of process. Indeed, the core question in Nixon was as follows: was the Crown s repudiation of the plea agreement so unfair or oppressive to the accused, or so tainted by bad faith or improper motives, that to allow the Crown to proceed with the prosecution would tarnish the integrity of the judicial system? 28 In Nixon, the Supreme Court found no evidence to support a finding of an abuse of process. It found no improper conduct or bad faith in the approach, circumstances or ultimate decision of the ADM to proceed with the prosecution. The ADM had determined that Crown counsel s assessment of the strength of the evidence was erroneous. The ADM also had regard to the seriousness of the offence, which had resulted in the death of two people and left another orphaned. The ADM had concluded that it would not be in the public interest to terminate the prosecution of the criminal charges. The Supreme Court plainly had regard to these circumstances when upholding the Alberta Court of Appeal s decision. THE IMPLICATIONS OF NIXON/COUCHE-TARD ON ANTITRUST MATTERS IN CANADA The main lesson that defense counsel in antitrust matters should draw from Nixon and Couche-Tard is that execution of a plea or immunity agreement may not bring a matter to an end. The Crown may repudiate a plea or immunity agreement as an exercise of prosecutorial discretion, and the burden is then on the accused to demonstrate that the repudiation was inappropriate under the circumstances. Defense counsel should therefore be especially cautious when negotiating plea or immunity agreements with the Crown. Ironically, in Couche-Tard, full and frank disclosure of the defense strategy before the repudiation caused the court to overturn the repudiation. What is unclear at this time is the legal test defense counsel must satisfy to have the Crown s repudiation of a plea or immunity agreement overruled. The Supreme Court of Canada in Nixon narrowed the Court s power to overrule the Crown s decision to resile from a plea or immunity agreement. Failing a successful abuse of process challenge, which is an extremely high threshold for an accused to overcome, the Crown s decision to resile from a plea or immunity agreement 28 Nixon, supra note 1 at para. 59. 8
would go unchecked. However, in Couche-Tard, Justice Tardif made no mention of Nixon. 29 He concluded that the Crown s decision to repudiate was not an abuse of process, but nevertheless overturned the Crown s repudiation for procedural fairness concerns. The disposition of the appeal in Couche-Tard may (and hopefully will) clarify whether lower Courts can depart from the Nixon analysis in antitrust matters. An antitrust plea agreement is arguably not distinguishable (or not distinguishable enough) from a plea agreement in traditional criminal matters to justify a departure from the Nixon analysis set out by the Supreme Court of Canada. However, Canada s first antitrust case to consider the issue did depart from the Nixon analysis (at least for now). 29 It is unclear whether the parties to the Couche-Tard proceeding brought Nixon to the Court s attention. 9