Regulatory Offences: The Supreme Court Riterates That A Mistake Of Law Affords No Defence, But Opens A Discussion On A New Exception

In La Souveraine, Compagnie d'assurance générale v Autorité des marchés financiers,1 the Supreme Court of Canada has recalled that ignorance of the law affords no excuse and that a mistake in the application of a regulation, as complex as it may be, does not generally constitute a valid defense. However, the Court has shown some receptiveness with respect to a new defense based on regulatory complexity, but has decided to postpone the debate to a later time.

Strict Liability Offences

Most offences enacted under provincial statutes and regulations are of "strict liability", that is to say that the Crown is not required to prove the intent of the accused beyond a reasonable doubt. Regulatory offenses created under provincial legislation are presumed to be of strict liability in the absence of expressions such as "intentionally" or "knowingly" indicating the presence of an offense requiring proof of intent.

In the presence of a strict liability offense, the fault of the accused is presumed: the latter has the burden of rebutting, by a balance of probabilities, the presumption of intent with a defense of due diligence or a reasonable mistake of fact. A defense based on due diligence encompasses that the court must compare the actions of the accused in the commission of the offense to the conduct that a reasonable person would have taken in the same situation.

In La Souveraine, the Supreme Court held that section 482 of the Act respecting the distribution of financial products and services2 (the Act), a Quebec provincial statute, is a strict liability offense. The provision is to the effect that an insurer which induces an independent representative or independent partnership to violate the Act commits an offense.

It should be noted that a mistake of law is generally not a valid defense unless it is officially induced or is expressly provided by statute. Even where legal advice is sought, a mistake provoked by erroneous legal advice remains an inexcusable mistake in criminal law.

Facts

In 2004, La Souveraine, an Albertan insurance company duly registered with the Autorité des marchés financiers (AMF), issued a master policy on recreational vehicles at dealerships located across Canada, including 56 establishments in Quebec. La Souveraine then employed the services of a broker based in Winnipeg, which was not registered with the AMF.

Following the filing of a complaint, the AMF asked questions to La Souveraine regarding its broker's permits. La...