The most intrusive searches imaginable
Can border officers randomly go through your phone? Plus the SCC's latest bankruptcy ruling, jurisdiction over online speech, and getting kicked out of articling.
Dylan Gibbs & Alexandra Son
August 14, 2024
 |
Have you been trading seasonal depression for seasonal rebellion? A recent UBC study found that people are more likely to support values like respect for authority in spring and fall. That support wanes in the summer and around the holidays—maybe because we’re less anxious.
The findings are great for the two Freedom Convoy leaders who are on pace to wrap up their trial before the anti-authority season ends.
— Dylan Gibbs
with Alexandra Son
TODAY'S DOCKET |
Searching devices at the border
In search of a new human rights commissioner
Bankruptcy’s effect on fraud punishments
Jurisdiction over online speech
And getting kicked out of articling
DIGITAL PRIVACY
Reining in border searches
R. v. Pike, 2024 ONCA 608
Good news—border guards are less likely to find the 64GB stash of nearly identical pet photos you keep on your phone. In a big win for privacy, the Ontario Court of Appeal narrowed the power to search digital devices at the border.
Why it matters: According to the Customs Act (with some gloss from the courts), border officers don’t need grounds to search electronics like phones and computers. As long as they’re on a genuine hunt for evidence—not just poking around for fun—digital searches are fair game. And that’s a pretty low bar.
At the Court of Appeal: Chief Justice Tulloch wrote for a unanimous Court, saying that the groundless search is unconstitutional. Crossing the border lowers the amount of privacy travellers can reasonably expect—but it doesn’t erode privacy completely.
[Border officers can search digital devices if, in their] own minds, they [are] sincerely trying to find evidence of border law violations. While sincerity is a good start, it is just not enough.
[The search power] does not strike a fair balance between the privacy interests of travellers and the state’s interests because it attaches the lowest possible threshold to one of the most intrusive searches imaginable.
The Court narrowed the search power so that it doesn’t apply to digital devices but suspended the ruling for six months to let the government come up with a replacement.
What would a constitutional replacement look like? According to the Court, border officers can’t search digital devices unless they at least have reasonable suspicion. That’s still a low bar, but it takes the officers away from hunches and intuition.
Yes, but: The ruling didn’t assist the two appellants who challenged the law. Both imported child exploitation materials. Officers couldn’t have laid the charges without the unconstitutional search power, but Chief Justice Tulloch wasn’t willing to exclude the resulting evidence.
The Court did agree with one of the appellants, striking down the one-year mandatory minimum sentence for importing child exploitation materials. But that was pretty much a foregone conclusion—the Court struck down a similar mandatory minimum in a prior decision.
Overall, the Court’s sentencing reasons favoured the Crown. Chief Justice Tulloch said courts should impose higher sentences (bumping the upper end of the sentencing range from 3.5–4 years up to 5 years).
This raise empowers sentencing judges to respond to the “staggering and systematic nature” of the wrongs and harms that people who possess [child exploitation materials] can cause in cases involving numerous victims.
Big picture: This is the second appellate decision to strike down groundless digital searches at the border. The Alberta Court of Appeal reached a similar conclusion in 2020, but it didn’t explain whether a higher standard (like reasonable suspicion) would pass constitutional muster.
The Alberta decision left Parliament to figure out the appropriate standard on its own—which hasn’t gone so well.
The Senate first tabled legislation saying officers can search whenever they have a “reasonable general concern” (a standard no one had ever heard of).
The legislation now uses reasonable suspicion as the standard, but it’s been sitting dormant in the House of Commons since 2022. The Ontario Court of Appeal’s clear guidance might be enough to push it forward.
PS: You might be wondering why I used the term child exploitation materials. It turns out, if you send an email to 3,000 people, there are certain words it probably shouldn’t contain.
HEARSAY ROUNDUP
Canadiana
🧠 Thinking about what's next? Whether you're looking for a pivot or to hone your craft, Osgoode’s part-time professional LLM programs can take your career to the next level. Like, right away—they’re still accepting applications for programs that start in January, but only until September 15. Don’t miss your chance to make a change.*
⛺️ One of the last pro-Palestinian protests on a Canadian campus is facing an injunction hearing that started today. Vancouver Island University wants to evict the protestors who set up shop more than three months ago. It’ll be the first chance for a BC court to rule on the encampments—a balance of public education, ownership, and expression.
😶🌫️ Birju Dattani is out. The incoming head of the Canadian Human Rights Commission resigned this week before taking his post. The resignation follows an independent report on Dattani’s fitness for the job, given his past comments about Israel and the Middle East. Dattani announced his resignation in a LinkedIn post, attaching a rebuttal to some of the report’s findings.
The report’s main finding was that Dattani wasn’t candid enough during the application process. Even though the substance of his past statements didn’t suggest he was unfit for the job, his approach to disclosure did. Most of it boiled down to a pseudonym, which Dattani used in some contexts but not others.
Dattani listed the names “Birju Dattani” and “Birju Mujahid” in his application, but he didn’t mention that he sometimes went by Mujahid Dattani (without any mention of Birju). That might not have been the end of the word—but his use of the pseudonym also appeared to be associated with some of the most controversial statements attributed to Dattani in the report.
🛤️ The Canada Industrial Relations Board held that rail work was non-essential, paving the way for a rail strike with big repercussions.
💬 BC’s Human Rights Tribunal reversed its approach to online hate speech. Past decisions said the federal government has exclusive jurisdiction over the internet—meaning that provincial regulators can’t do anything about comments made online. But the Tribunal recently decided those earlier rulings lacked any meaningful analysis.
After fully considering the division of powers, the Tribunal said that regulating online discrimination falls under provincial jurisdiction over property and civil rights.
Fun fact: this is another chapter in the saga of Barry Neufeld—the former school trustee whose comments about gender identity and sexual orientation gave us an anti-SLAPP decision from the SCC last year.
To the extent that applying s. 7 to online speech has any impact on federal jurisdiction (and it is not clear that it does), the impact is merely incidental, in the same way as provincial law regarding defamation, privacy, consumer protection, elections law, employment, housing, commerce, or family law.
👩💻 Speaking of anti-SLAPP—if your version of expression is shutting down other forms of expression, anti-SLAPP legislation won’t help you. Brooke Dietrich allegedly called on her TikTok followers to flood an anti-abortion organization with fake signups and reviews. When the organization responded with a lawsuit, Dietrich tried to squash it with an anti-SLAPP motion. But according to the Ontario Court of Appeal, Dietrich crossed a line.
[T]he purpose of [anti-SLAPP legislation] is to weed out strategic and abusive proceedings that have been initiated to silence defendants, preventing them from speaking out on matters of public interest. It aims to encourage and maintain a strong public culture of free expression.
Ms. Dietrich is alleged to have led a campaign to prevent 40 Days from organizing and expressing its views. This is not the type of expression [the legislation protects.]
* Indicates sponsored content
ICYMI
Bankruptcy can discharge administrative fines
Poonian v. BC (Securities Commission), 2024 SCC 28
The Supreme Court released a final decision before taking its August break. Poonian looks at whether people who rip off the public — or tick off a regulator — can come out of bankruptcy with a clean slate.
Why it matters: The decision covers everything you need to know about whether two types of debts survive bankruptcy — regulatory sanctions and debts linked to fraud.
What happened? Thal and Sharon Poonian orchestrated a pump-and-dump, stripping millions away from unwitting investors. BC’s Securities Commission learned about the scheme and sanctioned the Poonians for market manipulation.
The regulator issued two types of penalties:
Disgorgement orders, which forced the Poonians to pay back the money they took from investors
And administrative fines, which went above and beyond the defrauded investors’ lost funds
The hefty penalties made the Poonians insolvent. So they filed for bankruptcy, hoping for a fresh start.
The Commission pushed back, arguing that bankruptcy can’t erase the punishments it handed the Poonians. It relied on two carveouts in the Bankruptcy and Insolvency Act — one for penalties “imposed by a court”, and the other for debts “resulting from” fraud.
At the SCC: The majority said the court-ordered penalties exception doesn’t apply to either of the Commission’s punishments, and the fraud exception only applies to the disgorgement orders. The administrative fines don’t fall under either exception—so a bankruptcy discharge can wipe them out.
Court-ordered fines: All nine judges agreed on this one—administrative tribunals and regulatory bodies don’t count as courts. The Commission argued that fines “imposed by” a court include fines imposed by a regulator that later end up in a court order. But the SCC didn’t see it that way.
When a decision is registered with a court, the court’s involvement is passive, whereas the act of “imposing” a fine, penalty, restitution order or other order similar in nature requires that the court be actively involved in making the decision.
The fraud exception was more contentious. Everyone agreed that the fraud exception applies to debts “linked” to fraud. But Justices Karakatsanis and Martin split from the majority over how strong that link needs to be.
The majority required a strong link. Justice Côté wrote that the fraud exception only captures debts strictly caused by the debtor’s fraud—like debts owed to the fraud victims.
That covers the disgorgement orders (which are at least tied to the value of the fraud)—even though they involve a debt to the Commission instead of directly to the victims.
But it doesn’t cover the administrative fines, which are punitive sanctions disconnected from the value of the fraud.
It is only the value of the property or services obtained as a result of [the fraudulent] conduct that is not released by [a bankruptcy discharge].
The debt represented by the Commission’s administrative penalties did not result directly from the Poonians’ fraudulent misrepresentation. Rather, it arose indirectly as a result of the Commission’s decision to sanction the Poonians for having obtained property through deceitful statements to investors.
Okay with a weaker link, the dissenting judges would have applied the fraud exception to both types of penalties.
[T]he purpose of the Commission’s hearing was to create [a liability] resulting directly from the [fraud]. The amounts the Commission submits should survive discharge (which do not include costs) thus have as their only source or origin the Poonians’ deceitful conduct. Both the disgorgement orders and the administrative penalties under the Securities Act are monetary sanctions for the unlawful conduct. This is not a step removed.
Big picture: Just because bankruptcy can discharge a claim doesn’t mean the debtor will get a discharge. Take the Poonians, for example—the BC Supreme Court denied their request for a discharge and (as of the SCC hearing) they still aren’t free from their debts.
But watch out punitive damage awards: One consequence of the decision is that bankruptcy proceedings can wipe out punitive damages awarded for fraud. Punitive damages aren’t tied to the value of the fraud, so they’re just as vulnerable as the Commission’s administrative fines. To Victims looking to preserve their punitives will need to step into the ring and oppose bankruptcy discharges themselves—without any help from the legislated exceptions.
THINGS NOT TO DO 😤
Don’t assume a narrow guilty plea will appease the Law Society. John Faul was charged with sexual assault for inappropriately touching an intoxicated (former) friend without her consent. He ended up pleading guilty to the lesser offence of simple assault. But that wasn’t enough to preserve his standing in the eyes of Alberta’s Law Society.
A hearing panel stripped Faul of his articling status last year, and the benchers recently upheld that sanction on appeal.
[I]t was appropriate to consider the sexual nature of the assault notwithstanding that Mr. Faul was only convicted of assault simpliciter. [It was necessary to consider the victim’s vulnerability and the sexual nature of the assault to determine] whether Mr. Faul’s conduct affected the standing of the legal profession. The simple fact is that Mr. Faul’s conduct, particularly in light of his prior knowledge of [the victim’s] history, displayed a significant lack of integrity, honesty and governability.
 | That’s all for today. Govern yourself accordingly. If someone sent you this email, subscribe here. Want to advertise in Hearsay? Get in touch here. |
SHARE HEARSAY
Don’t keep us a secret. Get your friends to sign up and you’ll be rewarded. You can find your custom referral link in the email version of Hearsay.
Reply