Canada: Letters Of Request: Court Upholds Public Policy Limits On Enforcement

In recent years the Canadian courts have been increasingly willing to enforce the judgments of foreign courts and assist in the administration of foreign justice, particularly in permitting the taking of evidence in Canada for use in a foreign proceeding. One commonly used method when evidence is to be obtained from an individual in Canada for a proceeding in a foreign jurisdiction is a letter of request or letters rogatory. The recent decision in Morgan, Lewis & Bockius LLP v Gauthier ((2006) 82 OR (3d) 189 (SCJ)) demonstrates that there are limits, typically informed by public policy considerations, on the extent to which a Canadian court will assist a foreign court.

Morgan, Lewis & Bockius LLP is a large US law firm carrying on business principally in Philadelphia, Pennsylvania. It obtained a letter of request from a Pennsylvania court seeking the production of documents and oral evidence from Claude Gauthier, a Canadian citizen and resident, for use in a Pennsylvania court action. The plaintiffs in the US action, Purolite and its principals, had sued Morgan for allegedly having provided negligent legal advice. Morgan had allegedly advised the plaintiffs that it would be lawful for some of Purolite's foreign subsidiaries to do business in Cuba. Purolite had consequently been prosecuted by the US government for violation of the trade embargo with Cuba.

Gauthier was not a party to the Pennsylvania action; rather, he was an independent sales representative for Purolite's Canadian subsidiary. Morgan sought evidence from him regarding transactions between Cuban and Canadian companies, which were related to transactions for which Purolite and its principals had been convicted for violations of the US law prohibiting trade with Cuba. Gauthier opposed the enforcement of the letter of request in Ontario on the grounds that his evidence might be used against him in a prosecution by the US authorities.

The principle of international comity provides that Canadian courts should give serious consideration to foreign requests for judicial assistance, not as an obligation but as a matter of mutual deference and respect. Although a Canadian court may scrutinize the request through the lens of Canadian law and public policy, it may not act as an appellate court in respect of a foreign court's jurisdiction. A letter of request will be enforced in Ontario where it is directed towards a purpose for which such a letter could be issued by the Ontario court to a foreign court (eg, pre-trial discovery). In order to obtain enforcement, the requesting party must demonstrate that the evidence being sought is relevant and necessary for trial and is intended to be adduced at trial. The evidence must not be obtainable by other means and the order must not be contrary to public policy in Canada. In addition, the requester must not be embarking on a 'fishing expedition' - that is, the order sought must be reasonably specific and not unduly burdensome on the witness.

In the present case the court denied Morgan's request, holding that:

• it was not directly relevant to the question of whether Morgan gave appropriate legal advice to Purolite;

• the necessary evidence was available from the US criminal proceedings and other US sources; and

• the enforcement of the request would be contrary to Canadian public policy because it would place sworn evidence within the territorial jurisdiction of the US government, thereby posing the risk that Gauthier would be prosecuted.

In the court's view the prosecution of Gauthier would be an unacceptable result as it would directly contradict the Canadian Foreign Extraterritorial Measures (United States) Order, which explicitly prohibits compliance in Canada with the US anti-Cuba embargo. Given the US government's aggressive stance in prosecuting the prior defendants, the court was not convinced that Gauthier and other Canadians who might be implicated by his evidence would be able to escape the long arm of US law enforcement. In its decision the court crafted a practical solution in which the parties agreed to an order that would require Morgan to exhaust US sources before seeking testimony from Canadians and which would preserve the anonymity of any Canadian sources.

Although the principle of international comity receives ever-increasing attention from Canadian courts, resulting in many decisions enforcing extraterritorial court orders, this case demonstrates that there are limits to the cooperativeness of the Canadian courts. The public policy defence to enforcement exists in all circumstances and, although it has often received a narrow interpretation, this case demonstrates that the courts will not hesitate to apply this defence where a direct assault on Canadian law is at issue.

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