By Canadian Press

Failed fraud prosecution raises alarm bells, calls for clearer rules

Jan 19, 2018 | 9:42 AM

HALIFAX — A legal regulator says clear rules are needed for police who speak to lawyers involved with alleged frauds, after a decade-long case was recently thrown out because Mounties spoke to an accused’s solicitor.

The Crown is seeking leave to appeal the Dec. 20 ruling by Justice Denise Boudreau, in a Nova Scotia Supreme Court case that has set off alarm bells among criminal-law experts who fear the decision may lead to more quashed prosecutions.

Boudreau stayed multiple fraud allegations against businessmen Douglas Rudolph and Peter Mill on the basis that two RCMP officers took a five-hour statement from disbarred lawyer Mark David.

The judge criticized the officers as “grossly careless” for interviewing David. The corporate lawyer was dropped from the profession and fined in 2009 after the Nova Scotia Barristers’ Society found he was involved with the CanGlobe Group of Companies and Mill in an alleged Ponzi scheme.

Darrel Pink, the director of the barristers’ society, says Boudreau’s decision is a reminder Parliament hasn’t laid out clear rules on how police should talk to lawyers in such cases.

Meaningful Mementos

Remembering Someone You've Lost at Christmas

Dec 03, 2024

Seasonal Sorrow

How Do You Get Through The Holidays When You're Grieving?

Nov 01, 2024

Upcoming Events at Oliver's

Grief & Loss and Estate Planning Seminars

Oct 02, 2024

Pink, who retires from his post on Friday after 27 years, said the right of clients to expect confidentiality is important, but there are exemptions if the communication is for the purpose of furthering criminal activity.

“I perceive that it (the court decision) creates a mechanism for lawyers to be used as dupes for criminal activity and those criminal elements can then hide behind … the assertion of lawyer-client privilege even though there isn’t any,” he said.

The regulator acknowledged that Boudreau had suggested that two RCMP officers could have brought in a third party to do the interview with the lawyer about the alleged frauds between 2004 and 2008, and then have had the transcript vetted by a judge.

But Pink said this solution “is pretty imprecise and brings a stranger into the investigation.”

In 2002 the Supreme Court of Canada set out 10 principles for law-office searches in its Lavallee decision.

Pink says the Mill and Rudolph case illustrates the lack of similar methods for cases where police need to interview lawyers.

“We don’t have a mechanism in Canada for judicial oversight in police interviews,” he said.

The Federation of Law Societies of Canada, the national co-ordinating body for Canada’s 14 law societies, has called on Parliament to legislate guidelines for solicitor-client privilege, in a letter to Justice Minister Jody Wilson-Raybould last June.

It says guidelines created by the Supreme Court of Canada for searches and seizures of lawyers’ material were always intended as a stop gap measure until Parliament provided fresh law.

“In the view of the federation, a legislative change would bring important clarity to this issue,” says the document, adding the change could be made as part of the federal Justice Department’s ongoing review of the criminal code.

Jula Hughes, a professor of criminal law at the University of New Brunswick, also says Parliament should create a procedure for police to follow in cases like the Mill and Rudolph case.

She said in an interview that clear standards that can be consistently applied may avoid more white-collar crime cases being thrown out of court.

“Does this decision invite a possibility where clients’ can use their lawyer as a front, dump information and immunize themselves from criminal prosecution? It’s a pretty significant concern,” she said.

Hughes said police need a clear set of legal guidelines, and a process where they can have interviews conducted by third parties, possibly drawing from a list created by barristers’ societies.

“Whatever scheme is ultimately developed needs to take into account the constitutional concern and to take into account the practicality of law enforcement, and frankly courts aren’t in a good position to do that balancing,” she said.

The professor said the federal Justice Department should consult with legal regulators and other interested groups “rather than wait for failed prosecutions to pile up.”

“It’s overdue.”

Ian Gray, one of the defence lawyers for Mill, said that while consultation on legal reform for client-solicitor privilege may be needed, he believes that Boudreau’s decision was solidly based on existing case law.

He said the judge took note that David repeatedly told police he was worried about the issue of client-solicitor privilege, and yet the officers still proceeded with the interview despite obvious concerns over a basic legal principle.

“If somebody’s talking to you, you can’t unhear things they are saying to you. It’s crucially important to solicitor-client privilege that police take proper steps,” he said in an interview.

Gray said in interviewing a disbarred lawyer about the activities of his client, “the facts on their face call out for some caution and the police didn’t show that.”

The RCMP declined to provide a comment, saying the matter is still before the courts.

In its application to appeal the case, the Crown said Boudreau erred in how she interpreted the Lavallee case, and added that there were solutions other than a complete stay of the case.

The prosecution service says if they’re successful in appeal court, they’ll seek a new trial in the case.

Follow (at)mtuttoncporg on Twitter.

Michael Tutton, The Canadian Press