31 C.P.C. 162, (sub nom. Spencer v. R.) 2 C.C.C. (3d) 526, 145 D.L.R. (3d) 344

1983 CarswellOnt 359

R. v. Spencer

Regina v. Spencer

Ontario Supreme Court [Court of Appeal]

MacKinnon A.C.J.O., Brooke and Morden JJ.A.

Heard: November 15, 1982Judgment: January 18, 1983

Counsel: M.R. Dambrot, R. Hubbard and J.B. Dans, for appellant.

John Sopinka, Q.C., R. Pound and D.B. Houston, for respondent.

Subject: Civil Practice and Procedure; Criminal; Evidence

Evidence --- Witnesses -- Competency and compellability -- General.

Conflict of laws -- Procedure -- Foreign laws not recognized and enforced if they conflict with fundamental policy of Canadian law.

Evidence -- Witnesses -- Competency and compellability -- Compellability of witnesses -- Crown witness subpoenaed to give evidence as to customers and transactions of foreign bank -- Witness declining to answer on ground that giving such evidence would constitute criminal offence under foreign law -- Foreign law not to be asserted to exempt otherwise competent and compellable witnesses from giving evidence -- Foreign laws presumptively not intended to apply to extra-territorial conduct or to acts of foreigners abroad.

The respondent, a citizen and resident of Canada, had formerly been an employee of a bank in the Bahamas. He was subpoenaed as a witness by the Crown at the trial of an accused on charges under the Income Tax Act (Canada). The Crown sought to elicit evidence from the respondent as to the dealings of the accused and other persons with the bank while he was employed with it. The respondent declined to answer such questions on the grounds that to do so would constitute a violation of Bahamian law and expose him to criminal prosecution in the Bahamas. The trial Judge held that the respondent was a compellable witness, and adjourned a hearing on a show cause summons for contempt, pending resolution of the issue by a higher Court. On application by the respondent in Motions Court, Montgomery J. quashed the order of the trial Judge and directed that he be prohibited from requiring the respondent to give further evidence.

The Crown appealed to the Ontario Court of Appeal on the grounds that (a) the public and the Courts have the right to every person's evidence, whether or not foreign law makes it a crime for the witness to give that evidence, and (b) that properly interpreted, the Bahamian statute ought not to be construed as governing conduct outside of Bahamian territory.

Held, per MacKinnon A.C.J.O. (Brooke and Morden JJ.A. concurring):

The appeal should be allowed.

It is a fundamental policy of Canadian law that citizens and Courts are entitled to have relevant evidence from every person competent to give it. Whether a witness is a compellable witness is a question for the lex fori, and the respondent did not fall within any of the recognized exceptions to the general obligation to give relevant evidence if called upon. The Crown was not seeking information and documentation from anyone in the Bahamas, and there was no requirement that the Crown exhaust all available procedures and remedies in a Bahamian Court before seeking the evidence of the respondent here.

In view of the foregoing disposition of the matter, it was unnecessary to consider the second ground of appeal, but the Court did so out of deference to the lengthy submissions on the matter. Where a penal statute is alleged to have extra-territorial effect, it is to be interpreted on the basis of the presumptions that (a) an offence-creating section is not intended by Parliament to cover conduct outside the territorial jurisdiction of the Crown and (b) a statute will not be construed as applying to foreigners in respect of acts done by them abroad. The presumptions had not been rebutted in the present case, and it was therefore concluded that the statute was not intended to have extra-territorial effect.

Cases considered:

Air-India v. Wiggins, [1980] 2 All E.R. 593, [1980] 1 W.L.R. 815 (H.L) -- referred to

Atherton, Re, [1912] 2 K.B. 251 -- referred to

Chase Manhattan Bank, Re (1962), 207 F. 2d 611 (2nd Cir.) -- referred to

Fernandez, Ex parte (1861), 142 E.R. 349, 10 C.B. N.S. 3 -- referred to

Frischke v. Royal Bank (1977), 17 O.R. (2d) 388, 4 C.P.C. 279, 80 D.L.R. (3d) 393 (C.A.) -- distinguished

Gulf Oil Corp. v. Gulf Can. Ltd., [1980] 2 S.C.R. 39, 51 C.P.R. (2d) 1, 15 C.P.C. 267, 111 D.L.R. (3d) 74, 31 N.R. 451 -- referred to

Ings v. Ferguson (Trustee of Equitable Plan Co.) (1960), 282 F. 2d 149 (2nd Cir.) -- referred to

Int. Bank of Washington and Price Waterhouse & Co., Re, Bahamian Supreme Court, da Costa Ag. C.J., October 16, 1980 (unreported) -- referred to

R. v. Snider, [1954] S.C.R. 479, [1954] C.T.C. 255, 54 D.T.C. 1129, 109 C.C.C. 193, [1954] 4 D.L.R. 483 -- referred to

Treacy v. Dir. of Pub. Prosecutions, [1971] A.C. 537, 55 Cr. App. R. 113, [1971] 1 All E.R. 110 -- referred to

Two Sicilies (King of) v. Willcox (1851), 61 E.R. 116, 1 Sim. N.S. 301 -- referred to

United States of America v. Field (1976), 532 F. 2d 404 -- referred to

United States of America v. First Nat. City Bank (1968), 396 F. 2d 897 -- referred to

United States of America v. Frank (1974), 494 F. 2d 145 (2nd Cir.) -- referred to

Westinghouse Elec. Corp. and Duquesne Light Co., Re (1977), 16 O.R. (2d) 273, 78 D.L.R. (3d) 3, (sub nom. Re Westinghouse Elec. Corp. Uranium Contract Litigation) 31 C.P.R. (2d) 164 (H.C.) -- referred to

Statutes considered:

Bank and Trust Companies Regulation Act, 1965 (Bahamas)

s. 10(1) [am. by Bank and Trust Companies Regulation (Amendment) Act, 1980 (Bahamas), s. 2]

Theft Act, 1968 (U.K.), c. 60.

Authorities considered:

Bentham (Works of Jeremy) "Draught for the Organization of Judicial Establishments" (Bowring's ed.), vol. IV, p. 320.

Castel, Conflict of Laws (3rd ed., 1974), p. 115.

Dicey and Morris, Conflict of Laws (10th ed.), p. 83.

Morris, Conflict of Laws (2nd ed.), p. 41.

Wigmore on Evidence (McNaughton Rev., 1961), vol. 8, pp. 70, 73.

Annotation

The Frischke case 4 C.P.C. 279 distinguished herein, was followed in MacDonald v. Briant, (1982) 24 C.O.C. 257, which may, however, not be capable of standing in the light of the Spencer case, although the factual content is not sufficiently clear.

Appeal from an order of prohibition with respect to the giving of evidence in a criminal proceeding.

The judgment of the Court was delivered by MacKinnon A.C.J.O.:

1 The basic issue, simply put, is: will the Courts of this province compel a witness to give evidence here when the giving of such evidence might constitute a criminal offence under the laws of a foreign state?

2 The respondent Spencer applied to the Honourable Mr. Justice Montgomery in Motions Court for an order quashing the order of a Judge of the Provincial Court (Criminal Division) compelling the respondent to give certain evidence at the trial of one Robert McGregor. The learned Motions Court Judge quashed the order and directed that the Provincial Court Judge or any other Judge be prohibited from requiring the respondent to give further evidence at the trial of Robert McGregor.

Background facts giving rise to the issue

3 The respondent is a resident and citizen of Canada and is an employee of the Royal Bank of Canada (the bank) in Toronto. From November 1965 until February 1973, the respondent was employed by the bank as the manager of its main Freeport branch in the Bahamas. He has not been back to the Bahamas since 1974.

4 Robert McGregor was charged with committing certain offences in contravention of the Income Tax Act, R.S.C. 1952, c. 148, as amended. The respondent was subpoenaed by the Crown to give evidence at McGregor's trial. Pursuant to the subpoena, it was sought to require the respondent to testify about information and knowledge relating to specific customers and transactions of the Royal Bank in the Bahamas, which knowledge he had acquired in the Bahamas as manager of the main Freeport branch.

5 There is no suggestion that the respondent has any documents, banking records or other writings in his possession relating to the charges against McGregor, nor is he being asked to secure such documents.

6 The charge against McGregor is that he failed to report and declare income of $107,918.93 for the 1971 taxation year. It is alleged that these funds were deposited by way of two cheques payable to Ben Daidone (in trust) in the sum of $20,000 and $87,918.93 respectively into a bank account in the Bahamian branch of the bank and that these funds represent income received by McGregor for the 1971 taxation year.

7 McGregor is also charged with failing to report and declare income of $192,787.69 for the 1973 taxation year. It is alleged that a cheque payable to Ben Daidone (in trust) in the sum of $169,700 was deposited in the Bahamian branch of the bank and that this cheque affords evidence in relation to McGregor's alleged failure to report and declare income for the 1973 taxation year. It is further alleged that the sum in question of $192,787.69 was deposited into a Canadian dollars account in the name of Glenorchy Limited in the Bahamian branch of the bank, of which branch, of course, the respondent was the manager at the time.

8 The Crown alleged in the McGregor trial that he used the name Ben Daidone as an alias and that the bank account was opened without the knowledge and consent of a person named Ben Daidone, and was, in reality, McGregor's account. The Crown further alleges that Louis Charles, a Crown witness, assisted McGregor in the execution of the tax evasion scheme but that Charles was not the recipient of the funds referred to and that during the period in issue he did not have any bank accounts in the Bahamas in any name whatsoever. It is further alleged that Louis Charles was the drawer of the $20,000 cheque referred to earlier.

9 Ben Diadone [sic] and Louis Charles both consented to the release by the respondent and his bank of any information relating to their bank accounts or to whether they had any bank accounts at the relevant times in the bank's Bahamian branch. McGregor has not consented to the release of such information.

The information which the appellant hopes to obtain from the respondent in the McGregor proceedings

10 Some of the questions to which the Crown sought answers were answered by the respondent before he raised the issue of "privilege" by the points which the appellant hopes to make through the testimony of the respondent are:

11 (i) that he was employed as manager of the Royal Bank of Canada, Freeport, Grand Bahamas Branch, from November 1965 to February 1973;

12 (ii) the banking practice and procedures in the Bahamian branch of the bank while he was manager, I believe that points (i) and (ii) have been, at least in a general fashion, already answered.

13 (iii) that Robert H. McGregor was a customer of the Bahamian branch of the bank while the respondent was the manager and that the respondent met with McGregor in social situations during the periods in question;

14 (iv) that he identify his initials which signify his approval for deposit on the two cheques for $20,000 and $87,918.93 payable to Ben Daidone, in trust, mentioned above;

15 (v) that he can associate the name of Glenorchy Limited with Robert H. McGregor although he may not know whether or not McGregor was the beneficial owner of the company;

16 (vi) that he can testify that Louis Charles and Ben Daidone were not customers of and did not have any bank accounts whatsoever at the main branch of the bank in the Bahamas during his period as manager.

Proceedings before the Provincial Court (Criminal Division)

17 Pursuant to the subpoena served upon him, the respondent attended before the Provincial Court on February 3, 1982, to give evidence. He was represented by counsel and while, as already noted, he answered general questions in relation to the banking procedures and practices in the bank's branch in the Bahamas while he was manager, he declined to answer questions as to particular individuals or companies or as to any dealings they may have had with the branch.

18 In addition to declining to answer questions dealing directly with McGregor, the respondent declined to answer questions concerning Louis Charles and Ben Daidone who both testified on behalf of the Crown and who had consented to the release of information concerning their dealings (if any) with the branch. Counsel for the respondent argued before the Provincial Judge that the respondent's disclosure of the information requested could expose him to a criminal prosecution in the Bahamas. The respondent relied on the affidavit cf Philip C. Dunkley which was filed with the Court. Dunkley, a Bahamian solicitor, gave the opinion that if the respondent testified as to the identity, assets, liability, transactions or accounts of customers of the Freeport branch of the bank, he might be in contravention of s. 10(1) of the Bank and Trust Companies Regulation Act, 1965, of the Bahamas and subject to criminal prosecution there. The Crown relied on the opinion of Ralph David Seligman, a barrister and solicitor practising in the Bahamas. His opinion, contained in an affidavit which was also filed with the Court, was that the Bahamian legislation did not have and was not intended to have extra-territorial effect and that the respondent would not be subject to prosecution if he gave evidence and returned, as an alien, to the Bahamas.

19 On February 4, the learned Provincial Judge, after carefully reviewing the matter, came to the conclusion that, as the respondent was a resident of Canada, he was subject to the usual obligations of such a resident and one of those obligations was to give to the Court what relevant evidence he had, notwithstanding any Bahamian legislation. The Judge indicated that he would make a finding of contempt if the respondent continued to refuse to answer the questions but, on consent of all parties, he adjourned any hearing on a show cause summons for contempt to allow counsel for the respondent to raise the issue in a higher Court by whatever proceedings he determined were appropriate.

20 As indicated at the opening of these reasons, the respondent then proceeded by way of an application to quash and for an order of prohibition before Mr. Justice Montgomery, who granted the applications. Mr. Justice Montgomery concluded that the Ontario Courts would not compel violation of the laws of a foreign state and "[w]here the giving of evidence could constitute a criminal offence by the laws of a foreign state, the witness should not be compellable to give such evidence". He relied for this conclusion on the statements of principle in Frischke v. Royal Bank (1977), 17 O.R. (2d) 388 at 403, 4 C.P.C. 279, 80 D.L.R. (3d) 393 (C.A.).

The Bahamian Statute:

21 Section 10 of the Bank and Trust Companies Regulations Act, 1965, as amended by the Bank and Trust Companies Regulation (Amendment) Act, 1980, s. 2, relied on by the respondent and dealt with by the Courts below, reads:

10. -- (1) No person who has acquired information in his capacity as --

(a) director, officer, employee or agent of any licensee or former licensee;

(b) counsel and attorney, consultant or auditor of the Central Bank of The Bahamas, established under section 3 of the Central Bank of The Bahamas Act, 1974, or as an employee or agent of such counsel and attorney, consultant or auditor;

(c) counsel and attorney, consultant, auditor, accountant, receiver or liquidator of any licensee or former licensee or as an employee or agent of such counsel and attorney, consultant, auditor, accountant, receiver or liquidator;

(d) auditor of any customer of any licensee or former licensee or as an employee or agent of such auditor;

(e) the Inspector under the provisions of this act, shall, without the express or implied consent of the customer concerned, disclose to any person any such information relating to the identity, assets, liabilities, transactions, accounts of a customer of a licensee or relating to any application by any person under the provisions of this Act, as the case may be, except --

(i) for the purpose of the performance of his duties or the exercise of his functions under this Act, if any; or

(ii) for the purpose of the performance of his duties within the scope of his employment; or

(iii) when a licensee is lawfully required to make disclosure by any court of competent jurisdiction within The Bahamas, or under the provisions of any law of The Bahamas.

(2) Nothing contained in this section shall --

(a) prejudice or derogate from the rights and duties subsisting at common law between a licensee and its customer; or

(b) prevent a licensee from providing upon a legitimate business request in the normal course of business a general credit rating with respect to a customer.

(3) Every person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence against this Act and shall be liable on summary conviction to a fine not exceeding fifteen thousand dollars or to a term of imprisonment not exceeding two years or to both such fine and imprisonment.

22 The portions of the Act around which the arguments revolved, can be summarized as follows: "No person who has acquired information in his capacity as ... employee or agent of any licensee ... shall, without the express or implied consent of the customer concerned, disclose to any person any such information relating to the identity, assets, liabilities, transactions, accounts of a customer of a licensee...." Anyone who contravenes the section is liable on summary conviction to a fine not exceeding $15,000 and/or a term of imprisonment not exceeding two years.

23 The Royal Bank of Canada is a licensee under the Act.

The submissions and conclusions:

24 The basic position of the Crown was that the public and the Courts of this province have the right to every person's evidence whether or not foreign law makes it a crime for the witness to give that evidence.

25 As a secondary ground, the Crown argued that the Motions Court Judge erred in law in concluding that the respondent would be violating Bahamian law by giving the evidence sought. Counsel submitted that there is a well-established presumption that, in the absence of clear and explicit words to the contrary, an offence section of a statute is not intended to cover conduct taking place outside the territorial jurisdiction of the enacting body. The presumption is a fortiori applicable when it is sought to extend the effect of the enactment to foreigners committing the offending acts outside the jurisdiction. In view of the conclusion I have arrived at on the first submission made by the Crown, it is not necessary for me to deal at length with the second ground of appeal, although I shall come back to it later.

26 I assume, for the purpose of examining the Crown's first submission, that the Bahamas intended s. 10 to have extra-territorial effect and the information sought, if given, would breach s. 10.

27 As Wigmore points out (Wigmore on Evidence (McNaughton Rev., 1961), vol. 8, p. 70) it is recognised as a fundamental maxim that the public has the right to every man's evidence. It is a positive rule that there is a general duty to give what testimony one is capable of giving and any exemptions are exceptional. In charac teristically colourful language, the great reformer, Jeremy Bentham, described the legal position in 1827, (The Works of Jeremy Bentham, Draught for the Organisation of Judicial Establishments (Bowring's ed.), vol. IV, p. 320):

Are men of the first rank and consideration, are men high in office, men whose time is not less valuable to the public than to themselves, -- are such men to be forced to quit their business, their functions, and what is more than all, their pleasure, at the beck of every idle or malicious adversary, to dance attendance upon every petty cause? Yes, as far as it is necessary, -- they and everybody! What if, instead of parties, they were witnesses? Upon business of other people's, everybody is obliged to attend, and nobody complains of it. Were the Prince of Wales, the Archbishop of Canterbury, and the Lord High Chancellor, to be passing by in the same coach while a chimney-sweeper and a barrow-woman were in dispute about a halfpennyworth of apples, and the chimney-sweeper or the barrow-woman were to think proper to call upon them for their evidence, could they refuse it? No, most certainly.

28 It is clearly part of the law of this country that the state and the litigant were entitled to the relevant evidence of witnesses and the witness cannot escape that obligation except in clearly defined cases. As Wigmore notes, from the point of view of society's right to everyone's testimony, it is to be remembered that the demand comes not from any person or set of persons, but from the community as a whole -- "from justice as an institution and from law and order as indispensable elements of civilized life". (Wigmore, vol. 8, p. 73) The enforcement of the laws of this country are an essential part of the necessary civilized conduct of public affairs and the duty to give testimony, not only in such cases but in all cases, is to the community at large.

29 Willes J., in Ex Parte Fernandez (1861), 142 E.R. 349, 10 C.B. N.S. 3 at 39, a contempt case, had this to say about the principle [p. 364 E.R.]:

As to the objection that the witness's refusal to answer was no offence, because it was for the witness, not the judge, to determine whether the question was one which he was bound to answer, -- that is a startling proposition. Every person in the kingdom except the sovereign may be called upon and is bound to give evidence to the best of his knowledge upon any question of fact material and relevant to an issue tried in any of the Queen's Courts, unless he can shew some exception in his favour, such, for instance, as that suggested to exist in this case, namely, that to answer might put him in peril of criminal proceedings.

30 Counsel for the appellant submits that Canadian Courts do not and should not recognize or enforce foreign law where such recognition or enforcement would be inconsistent with the fundamental policy of Canadian law, the policy being in this case the right of the citizen and the Court to have relevant evidence from every person competent to give it.

31 The English and Canadian text writers on private international law do, indeed, emphasize the paramountcy of fundamental public policy of the domestic law. Dicey's Rule 2 (Dicey and Morris -- On the Conflict of Laws (10th ed.), p. 83) states:

English Courts will not enforce or recognise a right, power, capacity, disability or legal relationship arising under the law of a foreign country, if the enforcement or recognition of such right, power, capacity, disability or legal relationship would be inconsistent with the fundamental public policy of English law.

Morris, at p. 41 of his The Conflict of Laws (2nd ed.), writes:

The English courts will not enforce or recognise any right arising under foreign law if its enforcement or recognition would be inconsistent with the fundamental policy of English law.

To the same effect, a recognized Canadian authority in this field writes:

Public policy covers a variety of cases in which Canadian courts will refuse to recognize and enforce foreign laws ... when they conflict with our fundamental ideas or institutions. (Castel, Conflict of Laws (3rd ed., 1974), p. 115.)

32 This doctrine must, of course, be kept within proper limits. One of those limits, counsel for the respondent submitted, is that the doctrine of comity requires our Courts not to compel or permit circumvention of the laws of a foreign state. He relies heavily on Frischke v. Royal Bank, supra.

33 In that case, the plaintiff sued his daughter, her husband and companies they controlled for a declaration that the plaintiff was the beneficial owner of funds which he had transferred to the defendants for investment on his behalf. The defendants obtained a cheque which had been issued in favour of the Royal Bank of Canada. These moneys were later declared to be the property of the plaintiff. The defendant deposited the cheque at a branch of the Royal Bank in Toronto and immediately transferred the funds to a Royal Bank branch in Panama. The Royal Bank was made a party to the action for the purpose of an injunction and an order was made enjoining the bank from releasing or dealing with the money. What was not known at the time of the order was that the moneys had by then been transferred out of the Royal Bank branch in Panama to another bank in another place. The Court directed the Royal Bank to secure from its employees in Panama all information and documents they had relating to the moneys in issue.

34 The bank appealed the order. Its position was that it could not secure the information or documents ordered as it was against the bank secrecy laws of Panama that this information be divulged. The bank's Panamanian counsel advised that the employees of the bank in Panama would be subject to civil and criminal penalties if they gave the information sought. In allowing the appeal and setting aside the order, Brooke J.A. for the Court, made the point that, in my view, clearly distinguishes that case from the present one (p. 399, O.R.):

An Ontario Court would not order a person here to break our laws; we should not make an order that would require someone to compel another person in that person's jurisdiction to break the laws of that State. (The italics are mine.)

35 The Crown in the instant appeal is not seeking information or documents from anyone within the Bahamas. The appellant is a compellable witness in this jurisdiction and is not being forced to give evidence in breach of any penal laws here: Re Atherton, [1912] 2 K.B. 251, at 255-56; The King of the Two Sicilies v. Willcox (1851), 61 E.R. 116, 1 Sim. N.S. 301 at pp. 329-31. Canadian law does not recognize any privilege in bank officials which prevents them from giving evidence nor is there an overriding public interest that requires that there be one. To permit a foreign jurisdiction to shape the laws of Canada on a matter of fundamental principle has no support historically or legally. It must be for the Canadian Courts or the Legislatures to determine on clearly defined grounds whether a privilege exists exempting a witness from the basic obligation to give evidence. As noted by the text writers, the obligation or duty to assist in the search for truth is a reciprocating one in our society; a duty necessary to the proper and fair administration of justice. Whether a witness is a compellable witness is a question for the lex fori and the respondent does not fall within any of the recognized exceptions to the general obligation to give relevant evidence if called upon.

36 Counsel for the respondent also urges a secondary position with regard to comity. His proposition is that a Canadian Court, before placing a witness in jeopardy of criminal prosecution in a foreign state, should ensure as a matter of international comity that all steps are first taken to secure the required evidence in conformity with the foreign law, if that is possible. In support of this position he cites two judgments of the United States Court of Appeals, Second Circuit. In Ings v. Ferguson (Trustee of Equitable Plan Company) (1960), 282 F. 2d 149, the lower Court had refused to quash or limit a subpoena duces tecum calling on New York agencies of Canadian banks for records located outside the United States. The banks were not parties to the action and the Court concluded that under the laws of both the United States and Canada procedures were available for securing evidence by letters rogatory and the subpoena would be modified to require production only of documents which might be in possession of agencies in New York. In the course of his reasons, Moore, Circuit Judge, speaking for the Court, said (pp. 152-53):

Upon fundamental principles of international comity, our Courts dedicated to the enforcement of our laws should not take such action as may cause a violation of the laws of a friendly neighbor or, at the least, an unnecessary circumvention of its procedures. Whether removal of records from Canada is prohibited is a question of Canadian law and is best resolved by Canadian courts .... Full opportunity to obtain such a decision is afforded to the Trustee by the procedural laws of this country and Canada. If upon such proceedings, i.e., letters rogatory, the records are produced the Trustee has by authorized means achieved this desire.

37 The other Second Circuit case to which we were referred was Re Chase Manhattan Bank (1962), 207 F. 2d 611. A subpoena duces tecum directed the Chase Manhattan Bank to produce, inter alia, records in the possession of its branch located in the Republic of Panama. Chase's Panamanian counsel testified that, in his opinion, the bank could not respond to the subpoena without subjecting itself to penalties under Panamanian law and that American au thorities could gain access to Panamanian records of the bank only by making application through the Panamanian Courts. The American Court modified the subpoena, although left it outstanding to leave the "'next move' up to the government". (p. 613) Leaving the subpoena outstanding was for the purpose of ensuring "Chase's cooperation with the Government when and if the Government seeks to obtain the records by application to the Panamanian authorities". (p. 613)

38 Counsel also referred us to an unreported decision of the Bahamian Supreme Court which was an example, he submitted, of how that Court could and had been used to secure required information for proceedings in an American Court in conformity with Bahamian law. In Re Int. Bank of Washington and Price Waterhouse & Co., October 16, 1980 (unreported), daCosta Ag. C.J. summarized the facts giving rise to the hearing before him as follows (pp. 3-4):

International Bank of Washington ('International') is the majority shareholder in Mercantile Bank and Trust Company Limited ('Mercantile'), now being wound up by this Court. International has commenced proceedings in the United States District Court, Southern District of New York against Price Waterhouse & Co., Chartered Accountants, for damages suffered by International as a result of the conduct of Price Waterhouse in the performance of their duties as Auditors of Mercantile. Details of International's claim are to be found in Ex. J.E.T. 1 to Mr. Tolan's affidavit filed herein on 17th January, 1980. Price Waterhouse -- Bahamas ('P.W. Bahamas') is an intervener defendant in this lawsuit and have filed a defence and counterclaim in the action.

In the course of litigation P.W. Bahamas was requested to produce to International documents in its possession, custody or control relating to their services as Auditors to Mercantile. P.W. Bahamas was, however, advised that the production of the documents requested relating to the accounts of Mercantile would be in contravention of s. 19 of the Banks Act, c. 196 and s. 10 of the Banks & Trust Companies Regulation Act, 1965 and could only be disclosed upon an order of the Court.

The U.S. District Court was apprised of the position under Bahamian law and, accordingly, on 25th January, 1979, entered an order in effect directing P.W. Bahamas to prepare applications to be jointly submitted by Price Waterhouse and International to the appropriate Bahamian authorities requesting the consent of the Bahamian Court to the disclosure of all relevant information concerning the business, transactions and affairs of Mercantile. Accordingly on 17th January, 1980, application was made to this Court for the authorization of the production of documents by P.W. Bahamas and International in accordance with the order of the U.S. District Court.

39 He came to the conclusion that he should exercise his discretion in favour of the applicant (although there does not appear to have been any opposition) and authorize the disclosure of all relevant information and documentation to the parties to the action. Once again, it must be said that securing information and documentation from the Bahamas is not the issue here. The cases relied on do not support the proposition argued that procedures and remedies in the foreign Court must first be exhausted before the witness is directed to give his evidence, a principle somewhat analogous to the proposition that all rights of appeal should be exhausted before resort is had to a writ of certiorari.

40 An American authority more akin to the present case is United States of America v. Frank (1974), 494 F. 2d 145. In a criminal prosecution, the government's case rested heavily on the testimony of the former manager of the Bahamian branch of an American bank and his secretary who were both back in the United States. It was argued for the appellant that the Court should not have permitted them to testify because they would be subject to penal sanctions under Bahamian law for so testifying. Judge Friendly, for the Second Circuit, in considering this argument said (pp. 156-57):

... no principle of accommodation requires the United States to seal the lips of American citizens testifying to facts within their knowledge concerning activities of other Americans in a foreign country as part of a scheme to violate American criminal law, simply because that country chooses to throw a veil of secrecy around bank accounts except insofar as their courts may see fit to lift it.

41 To somewhat the same effect is United States of America v. Field (1976), 532 F. 2d 404 at 407-8 and United States of America v. First Nat. City Bank (1968), 396 F. 2d 897.

42 I come back to the basic principle that the parties and the public have the right to every person's evidence. Although dealing with public interest immunity and the confidentiality of income tax returns the statement made by Rand J. in R. v. Snider, [1954] S.C.R. 479 at 482, [1954] C.T.C. 255, 54 D.T.C. 1129, 109 C.C.C. 193, [1954] 4 D.L.R. 483, has relevance:

It requires as its essential condition that there be a public interest recognized as overriding the general principle that in a court of justice every person and every fact must be available to the execution of its supreme functions. As Lord Chancellor Hardwicke, in speaking against the Bill For Indemnifying Evidence, Cobbett's Parliamentary History 12, 675, 693, 1742, declared: --

It has, my lords, I own, been asserted by the noble duke that the public has a right to every man's evidence -- a maxim which in its proper sense cannot be denied. For it is undoubtedly true that the public has a right to all the assistance of every individual.

And this applies as fully to the private suitor or an accused as to the public.

43 Chief Justice Laskin, dealing with whether to enforce letters rogatory in Gulf Oil Corp. v. Gulf Can. Ltd., [1980] 2 S.C.R. 39, 51 C.P.R. (2d) 1, 15 C.P.C. 267, 111 D.L.R. (3d) 74 at 88, 31 N.R. 451, quoted the following from Robins J. in Re Westinghouse Elec. Corp. and Duquesne Light Co. (1977), 16 O.R. (2d) 273 at 291, 78 D.L.R. (3d) 3, (sub nom. Re Westinghouse Elec. Co. Uranium Contract Litigation) 31 C.P.R. (2d) 164:

It is also fundamental that comity will not be exercised in violation of the public policy of the state to which the appeal is made or at the expense of injustice to its citizens; and comity leaves to the Court whose power is invoked the determination of the legality, propriety or rightfulness of its exercise: ...

Chief Justice Laskin went on to say (p. 92):

I do not see that the Crown, the Government, would be entitled to assert public policy against the enforcement of Canadian law in a Canadian Court, but would be so entitled against an attempt to enforce foreign law in a Canadian Court.

44 In my view, the aspect of public policy, as already defined, involved in the instant case applies to all cases whether they be civil or criminal and foreign laws cannot exempt witnesses, otherwise competent, compellable and present, from giving evidence within their knowledge in our Courts.

45 Accordingly, I would allow the appeal without it being necessary to consider the second ground of appeal argued by the Crown. However, this ground was argued at length and, out of deference to those submissions, I shall briefly review the points made.

46 Counsel for the appellant argued that on giving the evidence sought by the Crown the respondent would not violate Bahamian law. There were two branches to this submission; first, that the Bahamian law had not been properly proven and, second, that even if proven, that law did not purport to have extra-territorial effect. With regard to the first branch, although there was a conflict in the affidavits filed on behalf of the parties, from an examination of s. 10, the affidavit material and the cross-examination on the affidavit filed by the Crown, I am not persuaded that the learned Motions Court Judge erred in holding that, if the legislation has extra-territorial effect, the respondent could be liable to criminal prosecution in the Bahamas if he gave the information requested. The fact that there is a probability of such prosecution, whether successful in the end result or not, is sufficient for the argument.

47 The more difficult question to determine is whether s. 10 was intended to have extra-territorial effect. It is an accepted common law principle that criminal law is territorial in nature and is not intended, in the absence of explicit words to the contrary, to cover conduct that takes place outside the territorial jurisdiction of the enacting body. There appears to be no dispute that the principles of common law are still very much a part of Bahamian law. Appeals are still taken from the Court of final resort in the Bahamas to the Judicial Committee of the Privy Council and judgments of the English Courts have great persuasive, if not binding, effect.

48 In approaching the issue of whether s. 10 was intended to have extra-territorial effect, counsel for both parties appeared to rely on statements found in Treacy v. Dir. of Pub. Prosecutions, [1971] A.C. 537, 55 Cr. App. R. 113, [1971] 1 All E.R. 110 and Air-India v. Wiggins, [1980] 2 All E.R. 593, [1980] 1 W.L.R. 815 (H.L.). Counsel for the respondent argued that these cases established that if there are harmful consequences in the enacting state flowing from the breach, then international comity requires that foreign Courts prevent breach of those statutes in the foreign state. I do not read those particular cases in the manner argued, and I do not believe that the Bahamian Courts would so interpret them.

49 In Treacy v. Dir. of Pub. Prosecutions, supra, the appellant was charged with and convicted of blackmail contrary to s. 21 of the Theft Act, 1968 (U.K.), c. 60, which read "(1) A person is guilty of blackmail if, with a view to gain for himself or another or with intent to cause loss to another, he makes any unwarranted demand with menaces. ..." The appellant, resident in the Isle of Wight, posted a letter written by him and addressed to a "Mrs. X" in Frankfurt, Germany. In the letter he threatened to show some photographs to Mrs. X's husband unless she sent him £175 to an accommodation address in England. The appellant was charged with blackmail and the defence was the Court had no jurisdiction to try the case as the offence had been committed outside England. This argument was rejected at trial, the Judge holding that the offence was committed when the last irrevocable step was taken in making the demand, namely, when the letter was posted in England. The majority (3:2) held that the trial Judge was right in his interpretation of s. 21.

50 In the course of his dissenting reasons, Lord Reid made the following statement, with which the majority does not appear to take issue (p. 551):

It has been recognised from time immemorial that there is a strong presumption that when Parliament, in an Act applying to England, creates an offence by making certain acts punishable it does not intend this to apply to any act done by anyone in any country other than England. Parliament, being sovereign, is fully entitled to make an enactment on a wider basis. But the presumption is well known to draftsmen, and where there is an intention to make an English Act of part of such an Act apply to acts done outside England that intention is and must be made clear in the Act. I can find no indication of any such intention in the Theft Act 1968 with regard to any part of it with which we are concerned. I think that it would be both retrograde and likely to cause confusion in the law if any such intention were inferred without there being clear words to indicate it.

51 Lord Morris of Borth-y-Gest made a similar observation in the course of his dissent (p. 552). Lord Diplock pointed out at the opening of his reasons that the question in the appeal was not whether the central criminal Court had jurisdiction to try the defendant but whether the facts alleged and proven amounted to a criminal offence under the English Act. He went on to say this (pp. 560-61):

Where the definition of the crime incorporates a requirement of consequences subsequent to the completion of the physical acts by the accused, Professor Gordon in his book on Scots criminal law [The Criminal Law of Scotland (1967)] classifies the resultant crime as a 'result-crime' as distinct from a 'conduct-crime,' but this nomenclature, though convenient in drawing attention to the distinction, tends to blur the fact that the conduct of the accused is as essential an ingredient of a 'result-crime' as it is of a 'conduct-crime.'

In his article in (1965) 81 Law Quarterly Review, pp. 276, 518, on 'Venue and the Ambit of Criminal Law' which was referred to the Court of Appeal in the instant case, Professor Glanville Williams uses the contrasting phrases 'initiatory' to describe that element or ingredient of a crime which consists of the physical acts of the accused, and 'terminatory' to describe its subsequent consequences. He argues the case in favour of what he calls the 'initiatory theory of jurisdiction,' viz., that the accused can be tried for the crime only by the courts of the state in which the accused did the physical acts but concludes that the English Courts have adopted the 'terminatory theory of jurisdiction,' viz., that the accused can be tried for the crime only by the courts of the state in which the consequences of the accused's physical acts took effect.

And, at pp. 561-62:

The Parliament of the United Kingdom has plenary power, if it chooses to exercise it, to empower any court in the United Kingdom to punish persons present in its territories for having done physical acts wherever the acts were done and wherever their consequences took effect. When Parliament, as in the Theft Act 1968, defines new crimes in words which, as a matter of language, do not contain any geographical limitation either as to where a person's punishable conduct took place or, when the definition requires that the conduct shall be followed by specified consequences as to where those consequences took effect, what reason have we to suppose that Parliament intended any geographical limitation to be understood?

The only relevant reason, now that the technicalities of venue have long since been abolished, is to be found in the international rules of comity which, in the absence of express provision to the contrary, it is presumed that Parliament did not intend to break. It would be an unjustifiable interference with the sovereignty of other nations over the conduct of persons in their own territories if we were to punish persons for conduct which did not take place in the United Kingdom and had no harmful consequences there. But I see no reason in comity for requiring any wider limitation than that upon the exercise by Parliament of its legislative power in the field of criminal law.

There is no rule of comity to prevent Parliament from prohibiting under pain of punishment persons who are present in the United Kingdom, and so owe local obedience to our law, from doing physical acts in England, notwithstanding that the consequences of those acts take effect outside the United Kingdom. Indeed, where the prohibited acts are of a kind calculated to cause harm to private individuals it would savour of chauvinism rather than comity to treat them as excusable merely on the ground that the victim was not in the United Kingdom itself but in some other state.

Nor, as the converse of this, can I see any reason in comity to prevent Parliament from rendering liable to punishment, if they subsequently come to England, persons who have done outside the United Kingdom physical acts which have had harmful consequences upon victims in England. The state is under a correlative duty to those who owe obedience to its laws to protect their interests and one of the purposes of criminal law is to afford such protection by deterring by threat of punishment conduct by other persons which is calculated to harm those interests. Comity gives no right to a state to insist that any person may with impunity do physical acts in its own territory which have harmful consequences to persons within the territory of another state. It may be under no obligation in comity to punish those acts itself, but it has no ground for complaint in international law if the state in which the harmful consequences had their effect punishes, when they do enter its territories, persons who did such acts.

And, finally, at p. 564:

For reasons which I stated earlier, the rules of international comity, in my view, do not call for more than that each sovereign state should refrain from punishing persons for their conduct within the territory of another sovereign state where that conduct has had no harmful consequences within the territory of the state which imposes the punishment. I see no reason for presuming that Parliament in enacting the Theft Act 1968 intended to make the offences which it thereby created subject to any wider exclusion than this. In my view, where the definition of any such offence contains a requirement that the described conduct of the accused should be followed by described consequences the implied exclusion is limited to cases where neither the conduct nor its harmful consequences took place in England or Wales.

. . . . .

The physical acts of the appellant in the instant case were that he wrote and posted to an addressee in Germany a letter which contained an unwarranted demand with menaces. Those acts all took place in England. Their consequences were that the letter was received and read by the addressee. Those consequences took place in Western Germany. It follows from what I have already said that, in my opinion, this latter fact would not bring the case within the implied exception.

52 Counsel for the appellant argued that the consequences are implicit in the Bahamian legislation although not spelled out. His argument was that these secrecy laws are of the greatest importance to the Bahamas. Most persons, he submitted, who have their moneys in Bahamian banks reside outside the Bahamas and it is of importance to them that their affairs not be disclosed outside of the Bahamas. Be that as it may, the section with which we are concerned does not recite the consequences that may flow from its breach apart from the penalty nor does it state in any terms that the Act or the section is to have extra-territorial effect.

53 The second case to which we were referred, Air-India v. Wiggins, supra, equally, in my view, does not advance the position of the respondent. Lord Diplock gave the lead judgment in the appeal but does not refer to his earlier judgment in Treacy. The headnote in Air-India v. Wiggins correctly sets out the facts and the issues (p. 593):

A foreign airline loaded a cargo of 2,120 live birds for carriage to London via Kuwait. While the aircraft was at Kuwait it developed engine trouble and consequently was delayed on the tarmac for 31 hours. During the delay the birds remained unattended in crates in the aircraft without adequate ventilation. As a result only 89 were found to be alive when the aircraft arrived at London airport. The airline was convicted by justices of an offence under the Diseases of Animals Act 1950 in that they had carried the birds by air in a way which was likely to cause them injury or unnecessary suffering, contrary to art 5(2) of the Transit of Animals (General) Order 1973, made under s 23 of the 1950 Act as applied by s 11(1) of the Agriculture (Miscellaneous Provisions) Act 1954. On appeal, the Crown Court found, inter alia, (i) that the birds which had died had almost certainly done so as a result of the heat and lack of ventilation to which they were subjected in Kuwait, and (ii) that they were already dead before the aircraft entered British airspace. The Crown Court held that art 5(2) of the 1973 order had extra-territorial effect by virtue of art 3(3) of the order which provided that, in relation to carriage by air the provisions of the order were to 'apply to animals carried on any ... aircraft to ... an ... airport in Great Britain, whether or not such animals are ... unloaded at such ... airport' and dismissed the appeal. The airline appealed to the Divisional Court of the Queen's Bench Division ([1980] 1 All ER 192) which dismissed the appeal. On appeal to the House of Lords the airline conceded that offences had been committed in respect of the 89 birds that survived but contended that no offence had been committed under the 1950 Act and 1973 order in respect of the dead birds.

54 Lord Diplock, after reviewing the facts and the terms of the relevant statutes and orders, made the following statement at p. 569:

My Lords, in construing Acts of Parliament there is a well-established presumption that, in the absence of clear and specific words to the contrary, an 'offence-creating section' of an Act of Parliament (to borrow an expression used by this House in Cox v Army Council [1962] 1 All ER 880, [1963] AC 48) was not intended to make conduct taking place outside the territorial jurisdiction of the Crown an offence triable in an English criminal court. As Viscount Simonds put it ([1962] 1 All ER 880 at 882, [1963] AC 48 at 67):

... apart from those exceptional cases in which specific provision is made in regard to acts committed abroad, the whole body of the criminal law of England deals only with acts committed in England.

Cox v Army Council was concerned with a statute which in the plainest possible words made acts committed abroad by serving members of the British army offences triable by court-martial. The presumption against a parliamentary intention to make acts done by foreigners abroad offences triable by English criminal courts is even stronger. As Lord Russell CJ said in R v Jameson [1896] 2 QB 425 at 430:

One other general canon of construction in this -- that if any construction otherwise be possible, an Act will not be construed as applying to foreigners in respect to acts done by them outside the dominions of the sovereign power enacting.

Two consequences follow from these principles of statutory construction: the first is that if the minister had power to make an order under the statute, making acts done by foreigners abroad offences triable in English criminal courts, such power must have been conferred on him by words in the statute so clear and specific as to be incapable of any other meaning; the second is that the words of the order must themselves be explicable only as a clear and unambiguous exercise of that power. If either the empowering words of s 23(1)(b) of the Act or the enacting words of art 3(3) of the order would have a sensible content if restricted to acts done within the territorial jurisdiction of the Crown, they must be so construed. (The italics are mine.)

Lord Scarman, dealing with the same question, said this at p. 597:

There are, as my noble and learned friend Lord Diplock has said, two canons of construction to be observed when interpreting a statute alleged to have extra-territorial effect. The first is a presumption that an offence-creating section was not intended by Parliament to cover conduct outside the territorial jurisdiction of the Crown: Cox v Army Council. The second is a presumption that a statute will not be construed as applying to foreigners in respect of acts done by them abroad: R v Jameson [1896] 2 QB 425.

55 These presumptions, although rebuttable, have not been rebutted by any relevant material in the instant case, and, in my opinion, the only conclusion is that the section was not intended to have extra-territorial effect so as to apply to foreign nationals testifying in foreign Courts and, in my view, the Bahamian Courts would so interpret the legislation. I have come to this conclusion although, as I have stated, it is not necessary to my decision.

56 In the result, accordingly, I would allow the appeal, set aside the order of Mr. Justice Montgomery and restore the order of the provincial Judge.

Appeal allowed.

<end>