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Criminal - Civil Declarations

. Bunker v. Veall

In Bunker v. Veall (Ont CA, 2023) the Court of Appeal considered an important issue of 'declarations of illegality':
[1] The order appealed from is a declaration that a proposed payment, if made by the respondent executors of the estate of Donald Harry Bunker (“the Executors”) to Donald Harry Bunker Legal Consultants (“the Firm”) in connection with a Dubai judgment obtained by Sorinet Aviation Ltd. and Sorinet General Trading LLC (“the Sorinet Entities”) against the Firm, would violate s. 83.03(b) of the Criminal Code, R.S.C. 1985, c. C-46 because the Sorinet Entities have an alleged connection to a terrorist group. The proposed payment by the Executors would be in satisfaction of an agreement with the Firm to pay 50% of the Dubai judgment.

[2] The Executors sought the declaration of illegality by way of application under r. 14.05(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for the opinion, advice, direction or order of the court. ...



[11] While procedurally an estate may seek the advice of the court including declarations of right under r. 14.05(3) of the Rules of Civil Procedure, that rule does not give the court jurisdiction. It is a procedural rule only. This court recently discussed these principles at para. 61 of Bryton Capital Corp. GP Ltd. v. CIM Bayview Creek Inc., 2023 ONCA 363:
Rule 14.05 is procedural in nature. It does not create jurisdiction, but assumes it, and provides a means by which to engage that jurisdiction: Grain Farmers of Ontario v. Ontario (Ministry of the Environment and Climate Change), 2016 ONCA 283, 130 O.R. (3d) 675, at paras. 17-18. A court must have jurisdiction independent of r. 14.05 before it can consider the appropriate vehicle for bringing the matter forward, whether by application or action: J.N. v. Durham Regional Police Service, 2012 ONCA 428, 294 O.A.C. 56, at para. 16.
[12] In addition, s. 60(1) of the Trustee Act, R.S.O. 1990, c. T.23 allows a trustee, guardian or personal representative to apply to the Superior Court of Justice “for the opinion, advice or direction of the court on any question respecting the management or administration of the trust property or the assets of a ward or a testator or intestate.”

[13] These types of applications are intended to assist, and in some cases provide legal protection to the trustee against the beneficiaries for actions to be taken by the trustee in the administration of the trust or estate. However, to the extent that such declarations or opinions relate to what steps a prosecutor may take or what findings a court may make in a criminal prosecution against the trustee, they do not provide protection to the trustee from the court or a prosecutor because they do not bind those decision makers.

[14] Because in this context the court on the application cannot make a binding declaration of legality, courts have held that they will not give a declaration that is intended by the parties to interfere with prosecutorial discretion or to provide immunity from prosecution: see e.g., London Health Science Centre v. R.K. (1997), 1997 CanLII 14487 (ON SC), 152 D.L.R. (4th) 724 (Ont. S.C), at paras. 14-16; Bentley v. Maplewood Seniors Care Society, 2014 BCSC 165, at paras. 151-152, aff’’d on other grounds, 2015 BCCA 91. For example, the Superior Court at para. 16 of London Health stated:
[T]he declaration sought either confers immunity upon the applicants, in which case it improperly interferes with the exercise of prosecutorial discretion, or, if the Attorney General is free to disregard it, then it is merely an unenforceable judicial opinion, in which case it ought not to be given.
[15] That is what is being requested in this application.[2] The relevant Criminal Code section is s. 83.03(b), which makes it an offence for any person to “directly or indirectly…provide[s]…or make[s] available property or financial or other related services…(b) knowing that, in whole or part, they will be used by or will benefit a terrorist group.”

[16] The Dubai judgment that is owed by the Firm is to entities that are alleged to have connections to a purported terrorist group. When the respondents began to prepare to pay what they acknowledged was their 50% share of the judgment, they became concerned that by doing so, they may run afoul of s. 83.03(b). The respondents then sought a declaration from the Superior Court that the payment would be illegal and in breach of the section.

[17] The appellants took the position that the payment would not contravene the section and would be legal. The application judge agreed with the respondents. She found, based on the evidence in the record before her, that the payment would contravene the relevant section of the Criminal Code and would therefore be illegal.

[18] One of the main arguments the appellants raise on the appeal is that the evidence on the application was not sufficient to make a finding of illegality, as it consists in large part of newspaper articles and other hearsay regarding the alleged terrorist connections of the judgment creditors. This argument demonstrates another reason why the court will not make the requested declaration: it would be based only on the record before the court. However, a prosecutor would base any prosecution decision on the evidence available to the prosecution which could be entirely different.

[19] Therefore, a declaration, if made, could offer no true protection to the respondents, and would not serve the purpose contemplated by s. 60(1) of the Trustee Act or r. 14.05(3) of the Rules of Civil Procedure.

[20] Although part of the issue sought to be resolved through the application is the interpretation of s. 83.03(b) of the Criminal Code, the other part is findings of fact based on the record and, in particular, whether the money will in fact be used by, or give benefit to, a terrorist group. This is not a situation where an offence can be easily discerned because significant facts are not in dispute, such as where an agreement contains a criminal rate of interest: see Transport North American Express Inc. v. New Solutions Financial Corp., 2004 SCC 7, [2004] 1 S.C.R. 249, at p. 290, per Fish J. (dissenting, but not on this point).

[21] Where the court is asked to assess facts on a contested record and determine whether the facts as found would constitute an offence, what is requested is not an opinion but rather findings of fact based on evidence that may or may not form part of the record at a trial. In this case, where fear of a criminal prosecution under the Criminal Code is at issue, that trial would be a criminal trial based on charges laid.

[22] This court recently discussed and described the discretionary nature of declaratory relief in Bryton Capital Corp. GP Ltd. At para. 64, van Rensburg J.A. quoted with approval a non-exhaustive list of reasons why a court may deny declaratory relief, from Gook Country Estates Ltd. v. Quesnel (City of), 2008 BCCA 407, 73 R.P.R. (4th) 241, at para 10:
[S]tanding, delay, mootness, the availability of more appropriate procedures, the absence of affected parties, the theoretical or hypothetical nature of the issue, the inadequacy of the arguments presented, or the fact that the declaration sought is of merely academic importance and has no utility.
[23] In this case, a declaration would have no utility: it would not be binding on a prosecutor; and, being based on a specific evidentiary record, it could not even have persuasive effect where a prosecutor had different evidence as the basis to indict.

[24] Finally, the parties argue that the legality issue will have to be determined by an Ontario court in a civil proceeding such as an action to enforce the agreement by the estate to pay 50% of the Dubai judgment. Therefore this court should proceed to decide the issue on this appeal. We do not accept that submission, either factually or legally. The issue for the parties is whether there is a procedure, which there may well be, that will allow them to effect payment on the contract without risking the engagement of s. 83.03(b) of the Criminal Code.


[25] In the result, the declaration of illegality is set aside. In the circumstances of this case, the court below erred in law by exercising its discretion to decide whether a payment would constitute an offence under the Criminal Code, requiring a determination both of disputed facts, including facts going to mens rea, the interpretation of s. 83.03(b) of the Criminal Code, and the application of the facts in the context of proof beyond a reasonable doubt.


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Last modified: 24-07-23
By: admin