La Souveraine, Compagnie d’assurance générale Appellant v. Autorité des marchés financiers, 2013 SCC 63

SUPREME COURT OF CANADA Citation: La Souveraine, Compagnie d’assurance générale v. Autorité des marchés financiers, 2013 SCC 63, [2013] 3 S.C.R. 756 Date: 20131121 Docket: 34699 Between: La Souveraine, Compagnie d’assurance générale Appellant and Autorité des marchés financiers Respondent Official English Translation: Reasons of Wagner J. Coram: McLachlin C.J. and LeBel, Fish, Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.

Reasons for Judgment: (paras. 1 to 95) Dissenting Reasons: (paras. 96 to 118) Dissenting Reasons: (paras. 119 to 141) Wagner J. (McLachlin C.J. and Rothstein, Cromwell, Moldaver and Karakatsanis JJ. concurring) Fish J. (LeBel J. concurring) Abella J. La Souveraine, Compagnie d’assurance générale v. Autorité des marchés financiers, 2013 SCC 63, [2013] 3 S.C.R. 756 La Souveraine, Compagnie d’assurance générale Appellant v. Autorité des marchés financiers Respondent Indexed as: La Souveraine, Compagnie d’assurance générale v. Autorité des marchés financiers 2013 SCC 63 File No.: 34699.

2013: March 20; 2013: November 21.

Present: McLachlin C.J. and LeBel, Fish, Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ. on appeal from the court of appeal for quebec Provincial offences — Financial products and services — Nature of offence — Strict liability — Insurance company charged with committing offence on number of occasions by helping or inducing, through its consent and/or authorization, third party to violate regulatory provision — Regulator not responding to written explanations from insurance company before issuing statements of offence — Whether offence at issue one of strict liability — If so, whether proof of mens rea required — Whether actus reus of offence proved beyond reasonable doubt — Whether offence is discrete offence or party liability offence — Whether single conviction should be substituted for multiple convictions entered at trial — Act respecting the distribution of financial products and services, R.S.Q., c.

D-9.2, ss. 482 , 491 . Provincial offences — Defences — Due diligence — Officially induced error — Conditions for availability of defence based on reasonable mistake of law — Whether official’s passive conduct may be reasonably relied on as approval or inducement. S is an Alberta insurance company that is registered with the Autorité des marchés financiers (“AMF” or “Authority”) and is authorized to sell insurance products in Quebec; it offers such products through brokers.

The AMF issued 56 statements of offence against S for helping or inducing, through its consent and/or authorization, a broker that was not registered with the AMF to violate a provision of the Act respecting the distribution of financial products and services , R.S.Q., c. D-9.2 (“ ADFPS ”). Before the statements of offence were issued, S had replied in writing to a request from the AMF for information, explaining why in S’s view, its conduct was not problematic. The AMF issued the statements of offence more than six months later without responding to S’s written explanations.

The trial judge convicted S on the basis that it had authorized, permitted or consented to the distribution by its broker of insurance products for property located in Quebec although it knew that the broker did not hold the licences required by the ADFPS . According to the trial judge, the offence at issue is one of strict liability, and the defence raised by S on the basis of a mistake of law was not valid. The Superior Court allowed S’s appeal and acquitted S on the basis that neither the actus reus nor the mens rea of the offence had been proved beyond a reasonable doubt.

According to the Superior Court, the offence at issue requires proof of a wilful act and of a specific intent, which had not been shown, since S had not known that its broker was breaking the law. The Court of Appeal allowed the AMF’s appeal and restored the 56 convictions of S for the offence in question, which it characterized as one of strict liability. Concerning the actus reus , the majority of the Court of Appeal found that the authorization S had given its broker was sufficient to establish this element of the offence.

They added that the due diligence defence is not available where the mistake being relied on is one of law and that the AMF’s failure to respond to S’s written explanations did not transform that mistake into one of mixed fact and law. Held (LeBel and Fish JJ. dissenting in part and Abella J. dissenting): The appeal should be dismissed with costs. Per McLachlin C.J. and Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.: The Court of Appeal was right to review the Superior Court’s conclusions with regard to both mens rea and the actus reus .

Had it not been for the Superior Court’s conclusion that proof of mens rea was required for the offence at issue, that court would not have arrived at the same

interpretation of the content of the actus reus , and the ratio decidendi of its judgment would have been different. Those issues are inextricably linked, and the Court of Appeal therefore had jurisdiction to decide the actus reus issue and set aside the acquittal entered by the Superior Court. Otherwise, the appeal to the Court of Appeal on the issue of mens rea would have become moot and irrelevant. The offence provided for in s. 482 of the ADFPS is a regulatory offence. Such offences are generally strict liability offences, and strict liability offences do not require proof of mens rea .

In enacting the ADFPS , the Quebec legislature chose to establish an independent offence in s. 482 rather than establishing a mode of participation in the commission of an offence as has been done in s. 21(1) (

b) of the Criminal Code , R.S.C. 1985, c. C-46. The difference between the wording of s. 21(1) (

b) of the Criminal Code and that of s. 482 of the ADFPS , and in particular the omission of the words “for the purpose of” from s. 482 of the ADFPS , confirms the general rule that, unless otherwise indicated, regulatory offences adopted to protect the public fall into the category of strict liability offences. In this case, proof of mens rea was not required: it was not necessary to prove that S knew its broker intended to break the law or that the former had the specific intent of helping or inducing the latter to do so.

On the actus reus of the offence, the evidence shows that S’s conduct was not, strictly speaking, passive, since its failure to object in a timely manner to its broker’s actions constituted consent and/or authorization within the meaning of s. 482 of the ADFPS . S’s conduct had the effect of provoking a violation of the law by its broker, which means that the actus reus of the offence has been established beyond a reasonable doubt. S can avoid liability only by showing that it acted with due diligence.

The due diligence defence is available if the defendant reasonably believed in a mistaken set of facts that, if true, would have rendered his or her act or omission innocent. A defendant can also avoid liability by showing that he or she took all reasonable steps to avoid the particular event. However, this defence will not be available if the defendant relies solely on a mistake of law to explain the commission of the offence. A mistake of law can ground a valid defence only if the mistake was an officially induced error and if the conditions with respect to the application of such a defence are met.

No matter how reasonable a mistake of law may be, it cannot — unlike a mistake of fact or an officially induced error — serve as a valid defence in the case of a strict liability offence. The objective of public protection that underlies the creation of regulatory offences militates strongly against accepting a general defence of reasonable mistake of law in this context.

Finally, although it is true that the offence provided for in s. 482 of the ADFPS is a discrete and independent offence andthat S is not liable for the offences committed by its broker, this does not mean that S cannot have committed several discrete offences. That is in fact what occurred here. It would nevertheless be preferable for a prosecutor, when exercising its discretion to issue multiplestatements of offence, to assess the context in which the offences were committed on a case-by-case basis. Per LeBel and Fish JJ. (dissenting in part): The appeal should be allowed in

part in order to substitute a single convictionfor the 56 convictions entered at trial and restored by the Court of Appeal. S stands convicted 56 times for what, as a matter of law, was a single offence.

Section 482 of the ADFPS creates a discretesubstantive offence, rather than a party liability offence. Manifestly, an insurer found to have violated s. 482 of the ADFPS is neitherguilty of the same offence nor liable to the same penalty as the firm it helped or induced to contravene another provision of the Act orregulations. Party liability is expressly provided for in s. 491 of the ADFPS.

Section 491 was adopted in its present form in 2009. Had it been in force in 2006, when the proceedings in this case wereinstituted, it would have been open to the Authority to charge S with having participated as a party in the 56 offences under anotherprovision of the Act committed by its broker. Here, without the benefit of s. 491, the Authority charged S with 56 counts under s. 482 ―a substantive offence with a different penalty ― and claimed 56 times the mandatory minimum penalty under s. 482 as if S, under thatsection, was a party to the offences allegedly committed by its broker.

Nowhere does s. 482 of the ADFPS provide that an insurer or its mandatary is liable for offences committed by the person orfirm induced — by either the insurer or its mandatary — to commit them. Insurer and mandatary alike, when they aid or induce anotherto commit a substantive offence under the ADFPS, such as s. 482, may now be prosecuted under s. 491 of the ADFPS as parties to thatoffence. But they are not liable as parties when charged under s. 482, as S was in this case.

The decision to create a discrete substantiveoffence by enacting s. 482 represents a deliberate legislative choice to which courts must give effect. Per Abella J. (dissenting): The appeal should be allowed and the proceedings stayed. To date, officially induced error has only been used as a defence in circumstances where an official actually gave erroneousinformation to an accused. It has been seen, in other words, as requiring official conduct of an active kind.

But there is no principledbasis for excluding conduct of a more passive nature, including silence from an official, which could, in some circumstances, reasonablybe relied on as approval, or an “inducement”. This is particularly the case if the silence occurs in a regulatory framework thatdemonstrably requires a degree of expedition, such as the one S, an insurance company, was subject to.

Underlying the defence ofofficially induced error is the broad principle that an individual not be held culpable when he or she is induced by an official’s conductinto relying on a reasonable but incorrect understanding of the law. Punishing a regulated entity who is dependent on the regulator’stimely response, and reasonably relies on its silence, perpetuates the very injustice that led to the development of the strict liabilitydefences in the first place: finding the morally innocent culpable.

The question in dealing with an official’s passive conduct is whether a reasonable person in the position of the accusedwould have expected the official to inform him or her in a timely way that their understanding of the law was incorrect. Theresponsibilities of the official and the field and complexity of the regulation at issue will be relevant, as will the extent to which theaccused could reasonably have expected a timely response in order to carry on its undertakings.

If a body charged with supervising aregulatory domain fails inexplicably to respond relatively promptly to an accused’s erroneous assertion, it shares the blame for theaccused’s ignorance of the law. In such circumstances, it is inappropriate for that very regulatory body to bring charges against anaccused who has reasonably relied on its silence. S took reasonable steps to satisfy itself that it was not violating the law. It set out its understanding of the relevant legalrequirements and the basis for its understanding in an unambiguous letter to the investigator responsible for the file.

Yet rather thanrespond to S’s letter, 7 months later the regulatory body brought 56 charges. It was reasonable for S to rely on the regulatory body’sconduct — in this case silence — as confirmation that its understanding of the law was correct and as an inducement to conduct itselfaccordingly. The regulatory body had a duty to be diligent in performing its statutory role. Had that body responded in any way, letalone in a timely one, S could have brought itself in conformity with the law. Cases Cited By Wagner J. Applied: R. v. City of Sault Ste. Marie, (SCC), [1978] 2 S.C.R. 1299; referred to: R. v.

Keegstra, (SCC), [1995] 2 S.C.R. 381; Vézeau v. The Queen, (SCC), [1977] 2 S.C.R. 277; Lévis (City) v. Tétreault, 2006SCC 12, [2006] 1 S.C.R. 420; Marston v. Autorité des marchés financiers, 2009 QCCA 2178 ; R. v. F. W. Woolworth Co. Ltd.(1974), (ON CA), 3 O.R. (2d) 629; R. v. Briscoe, 2010 SCC 13, [2010] 1 S.C.R. 411; R. v. Hibbert, (SCC), [1995] 2 S.C.R. 973; Demers v. Autorité des marchés financiers, 2013 QCCA 323 ; R. v. Jorgensen, (SCC), [1995] 4 S.C.R. 55; Molis v. The Queen, (SCC), [1980] 2 S.C.R. 356; R. v. Wholesale Travel Group Inc., (SCC), [1991] 3 S.C.R. 154; R. v.

Power, (SCC), [1994] 1 S.C.R. 601; R. v. O’Connor, (SCC), [1995] 4 S.C.R. 411. By Fish J. (dissenting in part) Demers v. Autorité des marchés financiers, 2013 QCCA 323 . By Abella J. (dissenting) R. v. City of Sault Ste. Marie, (SCC), [1978] 2 S.C.R. 1299; Lévis (City) v. Tétreault, 2006 SCC 12, [2006]1 S.C.R. 420; R. v. Jorgensen, (SCC), [1995] 4 S.C.R. 55.

Statutes and Regulations Cited Act respecting insurance , R.S.Q., c. A-32. Act respecting the Autorité des marchés financiers , R.S.Q., c. A-33.2, ss. 4(2), (3) , 7 . Act respecting the distribution of financial products and services , R.S.Q., c. D-9.2, ss. 71, 462 , 482 , 487 , 491 [am. 2009, c. 58, s. 85]. Code of Penal Procedure , R.S.Q., c. C-25.1, art. 291. Criminal Code , R.S.C. 1985, c. C-46, s. 21. Securities Act , R.S.Q., c. V-1.1, s. 208. Authors Cited Côté-Harper, Gisèle, Pierre Rainville et Jean Turgeon. Traité de droit pénal canadien , 4 e éd. Cowansville, Qué.: Yvon Blais, 1998. Létourneau, Gilles.

Code de procédure pénale du Québec : annoté , 9 e éd. Montréal: Wilson & Lafleur, 2011. Parent, Hugues. Traité de droit criminel , t. 1, 3 e éd. Montréal: Thémis, 2008. Parent, Hugues. Traité de droit criminel , t. 2, 2 e éd. Montréal: Thémis, 2007. Quebec. Assemblée nationale. Journal des débats de la Commission permanente des finances publiques , vol. 41, n o 47, 1 re sess., 39 e lég., 26 novembre 2009, p. 20-21.

APPEAL from a judgment of the Quebec Court of Appeal (Dalphond and Kasirer JJ.A. and Cournoyer J. ( ad hoc )), 2012 QCCA 13 , [2012] R.J.Q. 111, [2012] J.Q. n o 33 (QL), 2012 CarswellQue 36, SOQUIJ AZ-50819137, setting aside a decision of Martin J., 2009 QCCS 4494 , [2009] Q.J. No. 10913 (QL), 2009 CarswellQue 10003, SOQUIJ AZ-50578234, setting aside a decision of Boisvert J.C.Q., 2008 QCCQ 10557 , [2008] J.Q. n o 12056 (QL), 2008 CarswellQue 11563, SOQUIJ AZ-50522982. Appeal dismissed, LeBel and Fish JJ. dissenting in part and Abella J. dissenting. Jean-Claude Hébert and Patrick Henry , for the appellant.

Éric Blais and Tristan Desjardins , for the respondent. E nglish version of the judgment of McLachlin C.J. and Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ. delivered by [ 1 ] Wagner J. — The appellant, La Souveraine, Compagnie d’assurance générale (“La Souveraine”), is appealing a judgment of the Quebec Court of Appeal dated January 10, 2012.

The Court of Appeal allowed an appeal of the respondent, the Autorité des marchés financiers (“AMF”), from a judgment rendered by the Quebec Superior Court on October 6, 2009 in which that court had set aside a decision of the Court of Québec dated November 10, 2008. The Court of Québec had convicted La Souveraine of committing, 56 times, the offence provided for in s. 482 of the Act respecting the distribution of financial products and services , R.S.Q., c.

D-9.2 (“ ADFPS ”). [ 2 ] The appellant argues that the offence of which it was convicted requires proof of mens rea and that the subjective element of the offence was not proved beyond a reasonable doubt. In the alternative, it submits that, even if the offence is a strict liability offence, the actus reus was not proved. Finally, it argues that, in any event, it exercised due diligence and that, for all these reasons, this Court should acquit it. [ 3 ] For the reasons that follow, I find that the appeal must fail. The offence in question is one of strict liability.

The actus reus was established, and the due diligence defence was not available in this case, because the appellant was relying on a pure mistake of law. I. Background [ 4 ] The appellant is an Alberta insurance company that is duly registered with the AMF under the Act respecting insurance , R.S.Q., c. A-32, and is authorized to sell insurance products in Quebec. It generally offers its products through a number of brokers that operate in various regions of Canada.

Flanders Insurance Management and Administrative Services Ltd. (“Flanders”), a Winnipeg-based company, was one of those brokers, but since it was not registered with the AMF, it was not authorized to offer insurance products in Quebec. [ 5 ] In 2004, Flanders, acting on the appellant’s behalf, negotiated and issued to the insured, GE Commercial Distribution Finance Canada (“GE”), a master policy on inventories of goods financed by GE, namely recreational vehicles at various dealerships across Canada.

Of those dealerships, 56 with establishments in Quebec agreed to participate under the master policy strictly to insure the portion of their inventories to which GE’s coverage applied. The broker then issued to each Quebec participant an individual insurance certificate in which GE was named as the [ translation ] “insured” and the dealership as the “certificate holder”. I should add that the insurance premiums were paid directly to the broker by GE, which billed the dealerships for them on a monthly basis.

Any indemnity payable by the appellant following the occurrence of an event covered by the policy was paid directly to GE in Ontario.

[6] A competitor of Flanders that had previously done what Flanders was now doing filed a complaint with the AMFalleging, inter alia, that Flanders was pursuing these activities in Quebec without holding the required licences.

The AMF began itsinvestigation on January 13, 2005. [7] In April of that year, the AMF asked the appellant for information about its business relationship with Flanders andGE, and about the insurance products covering the inventories financed by GE for the dealerships located in Quebec. [8] On June 10, 2005, the appellant replied in writing that, in its view, the licensing issue was not problematic, sinceGE, Flanders’ client, had its head office in Ontario. The appellant added that the master policy had been negotiated and issued in Ontarioand that the premiums were paid directly to Flanders by GE.

It also mentioned that, in the event of a loss, the indemnity was payabledirectly to GE and not to the dealership. At the same time, the appellant sent the AMF a list of the Quebec dealerships that wereparticipants under the master policy issued to GE. [9] On August 25, 2005, Flanders invited the Quebec dealerships to renew their individual insurance certificates. [10] In January 2006, the AMF issued 56 statements of offence against the appellant.

This was the first“communication” between the parties since the last letter the appellant had sent on June 10, 2005. [11] The statements of offence, which the appellant contested, were worded as follows: [translation] At [place], on or about August 25, 2005, did consent to and/or authorize the issuance by Flanders . . ., a firmnot registered with the Autorité des marchés financiers, of a floor plan insurance policy, number . . . to [name of dealership], contrary tosection 71 of the [ADFPS] (the “Act”), thereby committing the offence provided for in

section 482 of the Act and rendering itself liableto the penalty provided for in

section 490 of the Act. II. Judicial History [12] Judge Boisvert of the Court of Québec convicted the appellant of the 56 offences (2008 QCCQ 10557 ). Hefound that the offence provided for in s. 482 of the ADFPS is one of strict liability. He added that regardless of whether the offence isone of strict or specific liability, the evidence showed that the appellant had known that it was insuring property located in Quebec andthat its broker, Flanders, was not duly registered in Quebec.

According to Judge Boisvert, the appellant had therefore authorized,permitted or consented to the distribution by its broker of insurance products for property located in Quebec although it knew that thebroker did not hold the required licences. [13] Judge Boisvert accepted that the appellant had not known that Quebec legislation applied to the master policy forinventories of goods located in Quebec and that its mandatary had to be registered in that province. In his opinion, a mistake of law suchas this cannot be raised as a defence.

He also explained that the appellant had not done enough to ensure that its commercial transactionswere consistent with provincial legislation, but had instead relied on its broker’s opinion without obtaining independent legal advice. [14] In the Superior Court, Martin J. allowed La Souveraine’s appeal and acquitted it on all the counts (2009 QCCS 4494). He found that the actus reus of the offence — the material fact — had not been proved beyond a reasonable doubt.

In hisview, the words “helps” and “induces” in s. 482 of the ADFPS require proof that the defendant performed a wilful act, and theappellant’s passive conduct in relation to the transactions in question could not be considered a wilful act. Martin J. added that theoffence in this case requires proof of mens rea, or a guilty mind.

In his opinion, a party liability offence that sanctions not the conduct ofthe principal offender but that of a secondary offender, that is, an individual who helped or induced the principal offender to commit theprincipal offence, continues to require proof of mens rea even if the principal offence is one of strict liability. Since the appellant hadnot known that Flanders was breaking the law, the mens rea had not been proved. [15] In any event, Martin J. found that the appellant’s defence was valid, since the mistake the appellant was allegingwas not a pure mistake of law, but one of mixed fact and law.

That mistake had arisen not only from a misinterpretation of the applicablelaw, but also from the fact that the AMF’s silence following the letter of June 10, 2005 had been interpreted as a confirmation that thecontemplated transactions were lawful. [16] The Court of Appeal granted the AMF leave to appeal under art. 291 of the Code of Penal Procedure, R.S.Q.,c.

C-25.1, on the following question of law (2012 QCCA 13 ): Did the Superior Court judge err in law by imposing on theAMF a burden of proving a specific mens rea for the offence provided for in s. 482 of the ADFPS? [17] The Court of Appeal, in reasons written by Kasirer and Cournoyer JJ.A., allowed the AMF’s appeal and restored theconvictions.

The majority found that the offence in this case is one of strict liability and that the actus reus of the offence had beenproved beyond a reasonable doubt: the appellant had never maintained that Flanders had distributed the insurance products in questionwithout its authorization, and this was sufficient to establish the actus reus. Moreover, the due diligence defence was not available inthis case, because the mistake being relied on was one of law and because having exercised due diligence in inquiring into the applicablelaw is not a valid defence in either a criminal or a regulatory context.

Finally, the AMF’s failure to reply to the appellant’s letter ofJune 10, 2005 did not transform that mistake of law into one of mixed fact and law. [18] Dalphond J.A., dissenting, would have dismissed the AMF’s appeal and acquitted the appellant. He agreed with themajority that the offence provided for in s. 482 of the ADFPS is one of strict liability. However, he also agreed with the Superior Courtthat the actus reus had not been proved, because the wording of the

section required active participation in the violation of the law. Theappellant’s [translation] “passive acquiescence” (para. 56) to Flanders’ transactions could not have the effect of “helping” or “inducing”Flanders to commit such a violation.

According to Dalphond J.A., even if the actus reus had been established, the appellant had to beacquitted, because it had exercised due diligence by [translation] “actively [seeking] to comply with the law” (para. 68). [19] More specifically, Dalphond J.A. noted that the appellant had reviewed how its product was distributed and how theproduct was treated in the other provinces of Canada. It had sought information from Flanders and obtained legal advice to the effect

that the transactions in question were lawful. Dalphond J.A. expressed the opinion that the defence of due diligence was available in thiscase because the appellant’s mistake was the result not only of an erroneous

interpretation of the law, but [translation] “also of a set ofconcurrent facts leading La Souveraine to believe that this

interpretation was well founded” (para. 76). These facts, in his view, includedin particular the complexity of the transactions at issue, the fact that the insurance premiums and indemnities were payable outsideQuebec, the fact that the coverage concerned only assets belonging to GE, the reassurance given by Flanders and its lawyers that thetransactions were lawful and, finally, the AMF’s silence following the appellant’s explanatory letter of June 10, 2005. III.

Issues [20] The appellant submits, first, that the Court of Appeal lacked jurisdiction to set aside the Superior Court’s judgmentof acquittal, because leave had not been granted to appeal the conclusion in that judgment that the actus reus had not been proved in thiscase. It argues that the appeal was limited to the question whether the offence provided for in s. 482 of the ADFPS requires proof ofmens rea. [21] The appellant further submits that the offence in question is one that requires proof of a guilty mind.

It argues that,at common law, mens rea is always required where the offence involves secondary penal liability. In the alternative, if this Courtcharacterizes the offence as one of strict liability, the appellant submits that the actus reus of the offence has not been proved. Finally, itargues that the due diligence defence was available given that it had, at the very most, made only a reasonable mistake of law. [22] The AMF takes the position that the offence provided for in s. 482 of the ADFPS is one of strict liability for whichthe actus reus has been proved beyond a reasonable doubt.

It adds that the appellant’s mistake in this case was purely one of law and thata defence cannot be based on such a mistake. [23] I will begin by discussing the preliminary issue of the Court of Appeal’s jurisdiction before turning to the four mainissues raised by this appeal. The first of those issues concerns the nature of the offence provided for in s. 482 of the ADFPS in light ofthe three categories recognized since R. v. City of Sault Ste. Marie, (SCC), [1978] 2 S.C.R. 1299: offences requiringproof of mens rea, strict liability offences and absolute liability offences.

The second issue relates to the content of the actus reus of theoffence at issue and whether that element was proved beyond a reasonable doubt. The third issue concerns the content of the duediligence defence and whether that defence was available in this case. The final issue is whether a defence based on a reasonablemistake of law should be accepted. IV. Analysis A. Jurisdiction of the Court of Appeal [24] I find that the Court of Appeal was right to review the Superior Court’s conclusions with regard to both mens rea andthe actus reus. In R. v.

Keegstra, (SCC), [1995] 2 S.C.R. 381, this Court considered the arguments that may be raisedon appeal in criminal cases. On the subject of appeals for which leave to appeal has been granted, Lamer C.J. began by laying down ageneral rule (para. 28), but after doing so, he added some significant qualifications (paras. 29 and 31): . . . the Court may choose to grant leave on restricted grounds or at large. Restricting the leave granted to specific issuesconstrains the arguments which may be raised by appellants.

The arguments which may be raised by respondents are not affected by anorder granting leave on narrow grounds. . . . Leave granted under the Criminal Code provisions differs from leave granted under s. 40 of the Supreme Court Act incivil matters. While appeal routes in civil cases are not at issue in this motion, it is useful to clarify that the decision in Idziak v. Canada(Minister of Justice), (SCC), [1992] 3 S.C.R. 631, is not relevant to criminal appeals. In Idziak, leave was granted onone ground only and both parties were restricted in their argument to addressing that ground.

In civil matters, leave to appeal may besought with respect to any finding adverse to the party in question. The number of such findings in a civil case is nearly always muchgreater than in a criminal case. Accordingly, as a matter of policy, when restricted leave is granted in civil cases, the respondent willnormally be limited to arguing those issues set out by the Court in its order granting leave. . . . . . . . . . in some cases, two issues which may have been discussed separately at the court of appeal will be so inextricablylinked as to form two aspects of the same question of law.

In this case, an appellant who has a narrow right of appeal based on a dissent,or who has been granted leave to appeal on restricted grounds, will be able to address all aspects of the question, even if the court ofappeal treated the different aspects separately. One example of this intertwining is the question of whether a particular error of law is soserious that it justifies setting aside the trial verdict. The provisions for taking account of the severity of errors (s. 686(1)(b)(iii) in thecase of convictions, and the threshold set out in Vézeau v.

The Queen, (SCC), [1977] 2 S.C.R. 277, in the case ofacquittals) will always be intertwined with any error of law considered by this Court. [Emphasis added; paras. 28-31.] [25] Although these principles were formulated in relation to a criminal offence, they are also relevant in the context ofregulatory offences. [26] In the instant case, Martin J. of the Superior Court found on the basis of his

interpretation of the words “helps” and“induces” used in s. 482 of the ADFPS that there was no proof with respect to the actus reus or to mens rea (para. 140): The operative words of “aiding” and “inducing” are however of prime importance in the resolution of this matter. Therole that they play in relation to the culpability of the appellant is pivotal. In my view, these words indicate the requirement for somesort of voluntary action on the part of the accused as an essential element of the offence and secondly they also invest the offence with amens rea component. [27] It can be seen from Martin J.’s reasons that his

interpretation of the content of the actus reus and his finding that

there was no proof in this regard flowed directly from his reasoning with respect to mens rea, as all these elements are inextricablylinked. In his opinion, the authorization the appellant had given its broker to distribute insurance products on its behalf was not sufficientto constitute the wilful act required to prove the offence. However, that authorization had clearly had the effect of inducing the broker tocommit the offence.

This means that the judge had to assume that the offence has a mens rea component, namely acting with a certaingoal, or “for the purpose” of helping or inducing a third party, the appellant’s broker in this case, to perform a certain action. In otherwords, had it not been for his conclusion that proof of mens rea was required, Martin J. would not have arrived at the same

interpretationof the content of the actus reus, and the ratio decidendi of his judgment would have been different (Vézeau v. The Queen, (SCC), [1977] 2 S.C.R. 277). The Court of Appeal therefore had jurisdiction to decide the actus reus issue and set aside the acquittal hehad entered. [28] Indeed, as a matter of pure logic, no other conclusion is possible on the issue of the Court of Appeal’s jurisdiction.

If the Court of Appeal had no legal authority to consider the actus reus issue and this issue was res judicata, decided in favour of theappellant, then the appeal to that court on the issue of mens rea, for which leave was granted, would have become moot and irrelevant. Icannot imagine that the Court of Appeal would have granted leave for an appeal that lacks relevance. [29] Thus, the appellant’s arguments in this regard are without merit and must be rejected. B. Nature of the Offence Provided for in

Section 482 of the ADFPS [30]

Section 482 of the ADFPS reads as follows: 482. Every insurer that helps or, by encouragement, advice or consent or by an authorization or order, induces a firm or anindependent representative or independent partnership through which it offers insurance products or an executive officer, director,partner, employee or representative of such a firm or independent partnership to contravene any provision of this Act or the regulations isguilty of an offence.

The same applies to any director, executive officer, employee or mandatary of an insurer. [31] A court inquiring into the nature of an offence must interpret the relevant statutory provision. In doing so, it musttake account of the presumption established by this Court that regulatory offences are generally strict liability offences. In Lévis (City) v.Tétreault, 2006 SCC 12, [2006] 1 S.C.R. 420, at para. 16, LeBel J. explained this as follows, citing the presumption of statutoryinterpretation articulated by this Court in Sault Ste.

Marie: Classifying the offence in one of the three categories now recognized in the case law thus becomes a question ofstatutory

interpretation. Dickson J. noted that regulatory or public welfare offences usually fall into the category of strict liabilityoffences rather than that of mens rea offences. As a general rule, in accordance with the common law rule that criminal liabilityordinarily presupposes the existence of fault, they are presumed to belong to the intermediate category: Public welfare offences would prima facie be in the second category. They are not subject to the presumption of fullmens rea.

An offence of this type would fall in the first category only if such words as “wilfully,” “with intent,” “knowingly,” or“intentionally” are contained in the statutory provision creating the offence. [p. 1326] [32] I note, first, that the offence provided for in s. 482 of the ADFPS is a regulatory offence. Protection of the public isthe underlying rationale for such offences, which are enacted as “incidental sanctions whose purpose is to enforce the performance ofvarious duties, thereby safeguarding the general welfare of society” (City of Lévis, at para. 13, per LeBel J.).

The objective of thescheme established by the ADFPS, which includes the offence provided for in s. 482, is essentially to regulate the insurance productsdistribution industry in order to protect the public (Marston v. Autorité des marchés financiers, 2009 QCCA 2178 , at para. 46). [33] Accordingly, in keeping with the presumption of statutory

interpretation established in Sault Ste. Marie, and in theabsence of specific language indicating a contrary intention on the legislature’s part, the regulatory offence provided for in s. 482 of theADFPS will be presumed to be one of strict liability, hence one that does not require proof of mens rea. [34] In the case at bar, the appellant refers to other considerations in support of its argument that the offence provided forin s. 482 of the ADFPS falls into the category of mens rea offences.

According to the appellant, in the case of a party liability offencelike the one at issue here, the common law continues to require proof of mens rea even where the principal offence is one of strictliability.

This is the standard of secondary penal liability, which requires, more specifically, proof of a mens rea of knowledge: theaccomplice must have had knowledge of the essential elements of the principal offence and must have acted as he or she did with thespecific intent of helping or inducing the principal offender to break the law. [35] In this regard, the appellant relies in particular on the judgment of the Ontario Court of Appeal in R. v.F. W. Woolworth Co. Ltd. (1974), (ON CA), 3 O.R. (2d) 629, which concerned being a party to an offence within themeaning of s. 21(1)(

b) of the Criminal Code (now R.S.C. 1985, c. C-46). In that case, two salespersons had been convicted of makingfalse representations to the public about the prices of products they were offering for sale in a space made available to them by aWoolworth store in exchange for a commission on sales.

The issue was whether, under s. 21 of the Criminal Code, Woolworth shouldbe convicted of being a party to the same offence on the basis that it had aided the two salespersons to commit it. [36] The Ontario Court of Appeal held that, to be convicted of being a party to an offence under s. 21 of the CriminalCode, a defendant had to have known that the principal offender’s acts constituted an offence and to have done something for thepurpose of aiding the latter to commit that offence.

The court explained this as follows: . . . even in offences of strict liability, to hold one guilty as an aider and abettor, the Crown had the onus of provingknowledge on the part of the alleged aider of the circumstances necessary to constitute the offence which he is alleged to have aided,although it is not required that it be proven the alleged aider knew that those circumstances constituted an offence.

. . . . . .

Section 21 requires that an alleged party must do or omit to do something for the purpose of aiding the principal tocommit the offence. That purpose must be the purpose of the one sought to be made a party to the offence (Sweet v.

Parsley, supra) but ifwhat is done incidentally and innocently assists in the commission of an offence that is not enough to involve the alleged party whosepurpose was not that of furthering the perpetration of the offence. . . . one does not render himself liable by renting or loaning a car for some legitimate business or recreational activitymerely because the person to whom it is loaned or rented chooses in the course of his use to transport some stolen goods, or by renting ahouse for residential purposes to a tenant who surreptitiously uses it to store drugs. [pp. 639-40] [37] The reasoning adopted by this Court in R. v.

Briscoe, 2010 SCC 13, [2010] 1 S.C.R. 411, per Charron J., is alsorelevant: Of course, doing or omitting to do something that resulted in assisting another in committing a crime is not sufficient toattract criminal liability. . . . The aider or abettor must also have the requisite mental state or mens rea. Specifically, in the words ofs. 21(1)(b), the person must have rendered the assistance for the purpose of aiding the principal offender to commit the crime. The mens rea requirement reflected in the word “purpose” under s. 21(1)(

b) has two components: intent and knowledge. For the intent component, it was settled in R. v. Hibbert, (SCC), [1995] 2 S.C.R. 973, that “purpose” in s. 21(1)(b)should be understood as essentially synonymous with “intention”. The Crown must prove that the accused intended to assist theprincipal in the commission of the offence. . . . As for knowledge, in order to have the intention to assist in the commission of an offence, the aider must know that theperpetrator intends to commit the crime, although he or she need not know precisely how it will be committed.

That sufficientknowledge is a prerequisite for intention is simply a matter of common sense. [Emphasis in original; paras. 15-17.] [38] With respect, I find that Woolworth and Briscoe do not support the proposition that proof of mens rea is required inevery case of secondary penal liability. It is true that the reasoning set out in Woolworth and Briscoe applies where the secondary penalliability provided for in s. 21 of the Criminal Code is at issue.

However, for the following reasons, I find that that reasoning does notapply in the instant case. [39] First of all, there is a significant difference between the wording used for the independent offence provided for ins. 482 of the ADFPS and the wording of s. 21(1)(

b) of the Criminal Code, which defines the concept of being a “party to an offence”. Whereas the former provides that “[e]very insurer that helps or . . . induces a firm . . . to contravene any provision of this Act . . . is guiltyof an offence”, the latter provides that “[e]very one is a party to an offence who . . . does or omits to do anything for the purpose ofaiding any person to commit it”. [40] This difference in wording is determinative. As this Court has pointed out, the expression “for the purpose of” issynonymous with intention, which is why intention and knowledge on the accomplice’s part must be established in order to convict himor her under s. 21(1)(

b) of the Criminal Code (R. v. Hibbert, (SCC), [1995] 2 S.C.R. 973). [41] Furthermore, in enacting the ADFPS, the Quebec legislature, rather than establishing a secondary penal liabilityoffence by, for example, reproducing the words of s. 21(1)(

b) of the Criminal Code, chose to establish an independent offence in s. 482of the ADFPS. In Woolworth, it was clear from the provision in question that Parliament had taken the opposite approach: In enacting s. 33 [of the Combines Investigation Act, R.S.C. 1970, c. C-23], Parliament had the option of including in the Actprovisions extending culpability for the infraction of the

section to those other than the actual perpetrators in which even the Courtswould have been called upon to interpret the scope of the words used by Parliament to convey its intention. However, instead of so doingParliament has chosen to rely upon the extension by s. 21 imported into any offence created by statute. [p. 637] [42] In my opinion, the Quebec legislature’s choice is not inconsequential. The difference between the wording ofs. 21(1)(

b) of the Criminal Code and that of s. 482 of the ADFPS leads to different conclusions as regards the characterization of theoffences in question. The omission of the words “for the purpose of” from s. 482 of the ADFPS confirms the general rule that, unlessotherwise indicated, regulatory offences adopted to protect the public fall into the category of strict liability offences. [43] In addition to the distinction based on the mens rea requirement that flows from the use of the expression “for thepurpose of” in s. 21(1)(

b) of the Criminal Code and the absence of that expression from s. 482 of the ADFPS, another more generaldistinction persuades me that s. 482 of the ADFPS is not subject to the common law rule that proof of mens rea continues to be requiredfor a party liability offence even when the principal offence is one of strict liability. This distinction is based on the difference between aprovision that establishes an independent offence and one that establishes a mode of participation in the commission of an offence. [44] In the recent case of Demers v.

Autorité des marchés financiers, 2013 QCCA 323 , the Quebec Court ofAppeal considered a provision that establishes a mode of participation in the commission of an offence rather than an independentoffence, namely s. 208 of the Securities Act, R.S.Q., c. V-1.1 (“SA”), which reads as follows: 208. Every person who, by act or omission, aids a person in the commission of an offence is guilty of the offence as if hehad committed it himself. He is liable to the penalties provided in

section 202, 204 or 204.1 according to the nature of the offence. The same rule applies to a person who, by incitation, counsel or order induces a person to commit an offence. [45] In light of its decision in the case at bar, the Court of Appeal could have held in Demers that s. 208 of the SAestablishes a strict liability offence. That conclusion would have been based on the fact that, like s. 482 of the ADFPS and unlikes. 21(1)(

b) of the Criminal Code, s. 208 of the SA does not require proof of a specific mens rea.

[ 46 ] But the Court of Appeal rejected that argument and held that it did not have to rule on the nature of the offence provided for in s. 208 of the SA . Because the evidence in the record was sufficient to establish beyond a reasonable doubt that the person in question had the specific intent “[to aid] a person in the commission of an offence” within the meaning of that provision, a conviction was warranted. The Court of Appeal nonetheless took the time to note that an important distinction had to be drawn between the offence provided for in s. 208 of the SA and the one at issue in the instant case ( Demers , at paras. 54-56 ): [ translation ] Unlike

section 482 [ ADFPS ],

section 208 SA provides for a mode of participation rather than an independent offence. In this sense,

section 208 SA is more similar to section 21(1) (

b) Cr.C . than to the provision at issue in La Souveraine . It should be noted that according to

section 208 SA , an accomplice is guilty of the offence committed by the principal offender “as if he had committed it himself/comme s’il l’avait commise lui-même”.

Section 482 [ ADFPS ], on the other hand, provides that an insurer that acts in the contemplated manner is guilty of “an offence/une infraction” that is distinct from the one committed by the principal offender. Thus,

section 208 is merely a mode of participation . . . and not a separate “offence”. It should also be noted that the [ ADFPS ] includes a provision —

section 491 [ ADFPS ] — that is practically identical to

section 208 SA . Like

section 208 SA , it defines a mode of participation which renders an accomplice guilty of the same offence as the principal offender “as if the person had committed it himself/comme s’il l’avait commise lui-même”. This section, which parallels

section 208 SA , was not raised in La Souveraine as a basis for the insurer’s liability. The differences between

section 208 SA and

section 482 [ ADFPS ] suffice for me to conclude that this Court’s decision in La Souveraine cannot serve as a precedent in the case at bar. [ 47 ] In sum, s. 482 of the ADFPS , which creates a separate offence, differs from ss. 208 of the SA and 491 of the ADFPS , which create modes of participation more similar to those established in s. 21(1) (

b) of the Criminal Code (see also the reasons of the Court of Appeal, at paras. 41-44, per Dalphond J.A., dissenting but not on this issue).

It follows that the offence provided for in s. 482 of the ADFPS need not be subject to the common law rule that proof of mens rea continues to be required for party liability offences. [ 48 ] Before concluding on this issue, I will add a few observations about the comment made by the Ontario Court of Appeal in Woolworth that a person does not incur liability by loaning or renting a car for some legitimate activity merely because the person to whom it is loaned or rented chooses to use it to transport stolen goods, or by renting a house for residential purposes to a tenant who surreptitiously uses it to store drugs. [ 49 ] I agree with that comment in the criminal context and am of the opinion that s. 21(1) (

b) of the Criminal Code addresses these concerns by requiring proof of mens rea . However, I consider the situation to be quite different in the context of regulatory offences. Those who engage in regulated activities agree in advance to adhere to strict standards, and they accept that they will be rigorously held to those standards, which are typical of such spheres of activity.

It is therefore not surprising in the regulatory context to find strict liability offences that encompass forms of secondary penal liability for the ultimate purpose of vigilantly ensuring compliance with a regulatory framework established to protect the general public. [ 50 ] For these reasons, I conclude that the offence provided for in s. 482 of the ADFPS is one of strict liability and that it was not necessary to prove that the appellant knew its broker intended to break the law or that the former had the specific intent of helping or inducing the latter to do so.

Proof that the appellant’s actions in fact helped or induced its broker to contravene s. 71 of the ADFPS by distributing insurance products without holding the required licences is sufficient to convict the appellant. C.

Content and Proof of the Actus Reus [ 51 ] The appellant argues that the actus reus of the offence provided for in s. 482 of the ADFPS , which it describes as an offence [ translation ] “in the form of incitement to break the law” in light of the use of the words “help” and “induce” in that section, requires proof that the defendant “recommended or suggested the commission of an offence to someone”. In the appellant’s view, this implies “a real action on the defendant’s part and not simply passive acquiescence or a laissez-faire attitude” (A.F., at paras. 37-39).

In this case, the appellant submits, the “real action” required to convict has not been established, since all it did was passively acquiesce to the offence, committed by its broker, of issuing the individual insurance certificates to the Quebec dealerships without the required licences. [ 52 ] This argument must fail. I agree with the majority of the Court of Appeal on this point: the appellant helped Flanders commit the offence provided for in s. 71 of the ADFPS by authorizing or consenting to the issuance of the individual insurance certificates to the Quebec dealerships.

The evidence shows that the appellant was aware that the insured property was located in Quebec. It was also aware no later than June 10, 2005 of the list of Quebec dealerships that were participants under the master policy issued to GE, since that was when it gave the list to the AMF. Thus, Flanders did not issue the individual insurance certificates to the Quebec dealerships without the appellant’s knowledge, and the appellant did not object to its insurance products being so distributed. The appellant’s conduct was therefore not, strictly speaking, passive.

On the contrary, it had the effect of provoking a violation of the law, which means that the actus reus of the offence has been established beyond a reasonable doubt. [ 53 ] I should reiterate that the legislature has, in setting out that actus reus , provided that it can consist “[of] encouragement, advice or consent or [of] an authorization or order”. In my view, the appellant’s failure to object in a timely manner to the proposed issuance of the individual insurance certificates by Flanders constituted consent and/or authorization within the meaning of the statute.

Its conduct helped and/or induced Flanders to contravene s. 71 of the ADFPS . This is sufficient to establish the actus reus of the offence provided for in s. 482 of the ADFPS . [ 54 ] The appellant raised an additional argument at the hearing: the actus reus was not established in this case, because the appellant had been unaware that Flanders did not hold the licenses the broker was required to hold in order to distribute the insurance products in question. It submitted that its unawareness of that fact implied that it had not acted wilfully.

In my opinion, the appellant’s claim that it was unaware of the situation is not supported by the evidence. Its argument based on this claim is therefore of no assistance to it, and I accordingly do not need to consider this argument that the wilfulness required for the actus reus of the offence was absent.

[55] As I mentioned above, the offence provided for in s. 482 of the ADFPS is one of strict liability. Once the actus reushas been proved beyond a reasonable doubt, the defendant can avoid liability only by showing that it acted with due diligence. It musttherefore be asked whether the due diligence defence was available and, if so, whether the appellant discharged its burden of proof inthis regard. D. Due Diligence Defence [56] The due diligence defence is available if the defendant reasonably believed in a mistaken set of facts that, if true,would have rendered his or her act or omission innocent.

A defendant can also avoid liability by showing that he or she took allreasonable steps to avoid the particular event (Sault Ste. Marie, at p. 1326). The defence of due diligence is based on an objectivestandard: it requires consideration of what a reasonable person would have done in similar circumstances. [57] However, this defence will not be available if the defendant relies solely on a mistake of law to explain thecommission of the offence. Under Canadian law, a mistake of law can ground a valid defence only if the mistake was an officiallyinduced error and if the conditions laid down in R. v.

Jorgensen, (SCC), [1995] 4 S.C.R. 55, with respect to theapplication of such a defence are met. A defendant can therefore gain nothing by showing that it made a reasonable effort to know thelaw or that it acted in good faith in ignorance of the law, since such evidence cannot exempt it from liability. [58] In this Court, the appellant argues that the due diligence defence was available in this case because it was unawarethat its broker did not hold a license in Quebec. Thus, the question is purely one of fact. [59] I cannot accept this argument.

The testimonial evidence shows that the appellant consented to and/or authorized theissuance by its broker, Flanders, of the individual insurance certificates to the Quebec dealerships because it believed that the broker didnot need to hold a license given that the certificates were merely accessory to the master policy issued to GE in Ontario. The evidencedoes not support the conclusion suggested by the appellant, namely that it consented to and/or authorized the issuance of the certificatesbecause it mistakenly believed that Flanders was duly registered with the AMF in Quebec.

On the contrary, the appellant explained thatit would have been alarmed if it had learned that Flanders was distributing insurance products in Quebec other than those accessory tothe master policy issued to GE. The appellant said that Flanders had assured it that it was using the services of a broker licensed inQuebec in such cases. [60] The following are excerpts from the testimony of the appellant’s representative, Robert Phillips, on this point: Q. So, now, you were aware that it was a problem of unlicensed broker in Quebec? A.

Yes, which we subsequently phoned . . . as I said earlier, we subsequently phoned Flanders . . . Q. And asked? A. . . . and asked and we were told that they were . . . we’re using the services of a broker in Quebec to act as signingauthority on their behalf. Q. Even for the floor plan? A. Not necessarily for floor plan, but for any other coverages that they would be issuing because we keep coming back tothis, the floor plan. As far as we were concerned, it was GE Ontario account that didn’t require . . . Q. So, there was no problem with Flanders? A. Well, as far as the floor plan was concerned.

If they were doing other coverages and we were doing other coverages,we would have immediately suspended them and taken another action. Q. So . . . A. So, we weren’t issuing other coverages in Quebec for GE or the dealers or were we aware what Flanders was doing.[Emphasis added; A.R., vol. III, at pp. 106-7.] [61] Thus, the evidence shows that the appellant was unaware not that its broker was not registered in Quebec, but that alicence was required for the broker to issue the individual insurance certificates to the Quebec dealerships.

This is not a mistake of fact,but a pure mistake of law that cannot serve to ground the due diligence defence. [62] In the alternative, the appellant argues that its participation in the commercial transactions at issue was based on amistake of mixed fact and law and that, since such a mistake has the same effect as a mistake of fact, it is still entitled to rely on the duediligence defence.

In other words, the appellant argues that it reasonably believed in a mistaken set of facts or legal situation which, iftrue, would have rendered its conduct innocent. [63] On its argument with respect to a mistaken legal situation, the appellant refers once again to its belief that Flandersdid not have to be registered with the AMF in the circumstances and says that its mistake of fact was based on several other factors. Itexplains, in particular, that the AMF’s failure to reply to its explanatory letter of June 10, 2005 wrongly reassured it that its transactionswere lawful.

Its assessment of the situation in this regard was also reinforced by the legal advice of Flanders’ lawyers and the fact thatits transactions were recognized to be lawful in all the other Canadian provinces.

Finally, the minimal secondary role played by theQuebec dealerships in the complex commercial transactions that essentially took place in Ontario supported the view that the appellant’sbelief was reasonable: the master policy was negotiated and signed in Ontario, the “principal” client, GE, had its head office in thatprovince, GE paid the insurance premiums directly to Flanders in Winnipeg, and any indemnities would be payable directly to GE inOntario. In short, it was reasonable for the appellant to believe that it was proceeding lawfully in selling the insurance products in

question. [64] In my opinion, the appellant’s arguments can lead to only one conclusion: its mistake was one of law. Moreover, Inote that the appellant is not claiming that it believed in a mistaken legal situation and, at the same time, a mistaken set of facts. Rather,it is arguing that it mistakenly believed in the existence of a legal situation because of a set of facts that were actually true.

At the veryleast, it claims that its belief in that mistaken legal situation was justified and should be excused in light of that factual reality. [65] In this regard, I agree with Cournoyer J.A. that [translation] “[t]he AMF’s silence cannot on its own transform anerror of law into an error of mixed fact and law” (para. 232). And as I mentioned above, under the law as it now stands in Canada, nomatter how reasonable a mistake of law may be, it cannot — unlike a mistake of fact or an officially induced error — serve as a validdefence in the case of a strict liability offence. In Molis v.

The Queen, (SCC), [1980] 2 S.C.R. 356, Lamer J. noted: . . . the defence of due diligence that was referred to in Sault Ste. Marie is that of due diligence in relation to the fulfilment ofa duty imposed by law and not in relation to the ascertainment of the existence of a prohibition or its

interpretation. [p. 364] [66] Since the mistake relied on by the appellant was purely one of law, I find that the appellant’s argument based on themistake having been one of mixed fact and law must be rejected and that the due diligence defence was not available in the instant case. [67] However, the appellant also argues, in the alternative, that this Court should qualify the rule with respect toignorance of the law and recognize reasonable mistake of law in the vast mosaic of regulatory offences.

More specifically, it asks thatthis defence be made available in cases in which reasonable ignorance of or honest confusion about the applicable law is closely tied toimproper conduct on the part of a regulatory body. It thus argues that the competent authority set a “trap” by acting unfairly toward it. Iwill now consider this final argument. E. Reasonable Mistake of Law [68] This Court has held many a time that the fact that a defendant has exercised due diligence to find out and verify thenature of the applicable law is not a defence (City of Lévis, at para. 22).

It has characterized the rule with respect to ignorance of the lawas “an orienting principle of our criminal law which should not be lightly disturbed” (Jorgensen, at para. 5, per Lamer C.J.). In City ofLévis, at paras. 22-27, LeBel J. noted that this rule has the same weight in regulatory law. [69] The rule with respect to ignorance of the law exists to ensure that the criminal justice system functions properly andthat social order is preserved. G. Côté-Harper, P. Rainville and J.

Turgeon explain this rule, conveyed by the maxim “ignorance of thelaw is no excuse”, as follows (Traité de droit pénal canadien (4th ed. 1998), at p. 1098): [translation] The presumption of knowledge of the law becomes the quid pro quo for the principle of legality. Thelegislature assures citizens that it will not punish them without first telling them what is prohibited or required. But in exchange, itimposes on them an obligation to ask for information before acting. . . . Fear of social disorder and anarchy is the main argument of those who want to uphold the maxim.

To accept anunrestricted possibility of hiding behind a subjective excuse of ignorance would be dangerous and improper. [70] In Jorgensen, Lamer C.J. also endorsed this view, quoting the following passage on the rationale for the rule againsta defence based on mistake of law: Don Stuart identifies four aspects of the rationale for the rule against accepting ignorance of the law as an excuse: 1. Allowing a defence of ignorance of the law would involve the courts in insuperable evidential problems. 2. It would encourage ignorance where knowledge is socially desirable. 3.

Otherwise every person would be a law unto himself, infringing the principle of legality and contradicting the moralprinciples underlying the law. 4. Ignorance of the law is blameworthy in itself. (Canadian Criminal Law: A Treatise (3rd ed. 1995), at pp. 295-98) [para. 5] [71] It should nonetheless be noted that if the rule that ignorantia juris non excusat — ignorance of the law excuses noone — were absolute, this could seriously hinder the application of another cardinal rule of our criminal justice system: there can be nopunishment without fault.

The overlap between these rules is all the more significant given the current simultaneous proliferation ofregulatory measures and penal statutes. Indeed, several authors have pointed out that it is now impossible for citizens to havecomprehensive knowledge of every law: [translation] The presumption of knowledge of laws was acceptable and defensible in the past because those laws concernedonly serious offences and crimes against morality. The situation is very different today, and the criminal or penal law must be interpretedby consulting an abundant case law.

The much-discussed multiplication of penal statutes must also be considered, and no one, not evencriminal lawyers and other specialists in such matters, can profess to know all of them. The situation created by this proliferation ofstatutes is aggravated by the problem of their publication, which, although formal, is often not really effective. (Côté-Harper, Rainville and Turgeon, at p. 1099) [72] Dickson J. also commented on this in Sault Ste. Marie, at p. 1310: Public welfare offences obviously lie in a field of conflicting values. It is essential for society to maintain, through

effective enforcement, high standards of public health and safety. Potential victims of those who carry on latently pernicious activitieshave a strong claim to consideration. On the other hand, there is a generally held revulsion against punishment of the morally innocent. [73] Despite the problems that flow from regulatory measures, the rise in the number of such measures and thecommensurate multiplication of penal provisions designed to enforce them go hand in hand with the evolution of modern societies. These trends are well established.

Regulatory measures are adopted to protect the public from dangers that can result from activities thatare otherwise legitimate. The reason why penal sanctions are used in this context rather than civil law or administrative law sanctionslies in the deterrent power of penal law (H. Parent, Traité de droit criminel, vol. 2 (2nd ed. 2007), at paras. 496-500). Cory J. eloquentlyexplained the importance of regulatory offences in R. v.

Wholesale Travel Group Inc., (SCC), [1991] 3 S.C.R. 154, atpp. 221-22: It is difficult to think of an aspect of our lives that is not regulated for our benefit and for the protection of society as awhole. From cradle to grave, we are protected by regulations; they apply to the doctors attending our entry into this world and to themorticians present at our departure. Every day, from waking to sleeping, we profit from regulatory measures which we often take forgranted. . . . In short, regulation is absolutely essential for our protection and well being as individuals, and for the effectivefunctioning of society.

It is properly present throughout our lives. [74] The foregoing discussion underscores the conflicts that inevitably result from the constantly expanding presence ofregulatory measures. Such measures play an essential role in the implementation of public policy. The rule that ignorance of the law isnot a valid defence supports the state’s duty in this regard.

For this reason alone, it needs to be enforced. [75] At the same time, the rise in the number of statutes coupled with their growing complexity increases the risk that acitizen will be punished in circumstances in which ignorance of the law might nevertheless be understandable. [76] In light of all these considerations, I find that the objective of public protection that underlies the creation ofregulatory offences militates strongly against accepting a general defence of reasonable mistake of law in this context.

As Cory J. notedin Wholesale Travel, at p. 219, [r]egulatory legislation involves a shift of emphasis from the protection of individual interests and the deterrence andpunishment of acts involving moral fault to the protection of public and societal interests. [77] Moreover, it is incumbent on a regulated entity that engages in an activity requiring specific knowledge, includingknowledge of the applicable law, to obtain that knowledge. The following observations of Hugues Parent are of particular relevance in aregulatory context such as the one in the instant case.

Although he objects to the rule conveyed by the maxim “ignorance of the law is noexcuse” being absolute, Parent mentions a very important limit — unforeseeability of the mistake — that would have to apply should therule be relaxed: [translation] An individual who acts in ignorance of a provision he or she is not in a position to know about, despite being ingood faith and exercising due diligence, does wrong unknowingly, and therefore unintentionally. Such an individual cannot therefore beheld liable.

To be successfully argued, insurmountable ignorance of the law must be unforeseeable, which means that it must not berelated to an activity requiring special knowledge: thus, a professional fisher charged with possession of immature lobsters cannot useignorance of the law as a defence. As O’Hearn Co. Ct. J. stated in [R. v. Maclean (1974), (NS SC), 17 C.C.C. (2d) 84(N.S. Co. Ct.)], “if an accused wishes to indulge in an activity that requires special knowledge including knowledge of the applicablelaw, he can fairly be held to be under an obligation to acquire that knowledge”.

Because the information needed to attain that knowledgeis essential, it must be accessible and comprehensible. [Emphasis in original.] (Traité de droit criminel, vol. 1 (3rd ed. 2008), at paras. 580-81) [78] The regulator at issue in the instant case, the AMF, is not required by law to reply to those to whom the law appliesor to inform them about their rights and obligations. As a result, it was not reasonable in this case for the appellant to view the AMF’ssilence as a confirmation of its

interpretation of that law. This being said, the AMF’s attitude is of some concern.

Nevertheless,although its attitude does not reflect the greater transparency a regulator is normally expected to show, and as unfortunate as that mightbe, that attitude cannot be equated with improper conduct or bad faith on its part. [79] Furthermore, even if the AMF’s conduct were so vexatious as to justify accepting a new exception to the rule withrespect to ignorance of the law, which I cannot find to be the case here, I am of the opinion that the steps taken by the appellant to avoidbreaking the law do not meet the requirements for the due diligence defence.

The appellant relied solely on the legal advice ofprofessionals acting for a third party, Flanders, in Manitoba. A reasonable person would at least have sought an independent opinionfrom a member of the Barreau du Québec, preferably one who specializes in insurance law. Thus, the appellant in this case has notshown that it took all reasonable steps to avoid breaking the law. [80] I am well aware of the difficulties of statutory

interpretation that might result from the complexity of certainregulated activities. Here, it is troubling that the AMF itself had serious difficulty interpreting the applicable law in deciding whetherthe transactions in question were lawful. Is it reasonable to require those to whom regulatory measures apply to have a more extensiveknowledge of the law than the body responsible for enforcing it? [81] As I mentioned above, the complexity of regulations results from the need to ensure the proper functioning of civilsociety (Wholesale Travel, Sault Ste. Marie, City of Lévis). In this regard, I agree with the following comment made by Lamer C.J. inJorgensen:

. . . the complexity of contemporary regulation makes the assumption that a responsible citizen will have a comprehensiveknowledge of the law unreasonable. This complexity, however, does not justify rejecting a rule which encourages a responsiblecitizenry, encourages government to publicize enactments, and is an essential foundation to the rule of law. [para. 25] [82] I would therefore suggest postponing the debate about the appropriateness of accepting a new exception to the rulethat mistake of law can be a valid defence only in very specific circumstances. F.

Number of Statements of Offence [83] My colleague Fish J. raises, in support of his conclusion, the distinction drawn by the Court of Appeal in Demersbetween s. 482 of the ADFPS, which creates an independent offence, and ss. 208 of the SA and 491 of the ADFPS, which establish amode of participation in an offence.

In his view, s. 482 creates a single offence and the AMF was wrong to issue 56 separate statementsof offence against the appellant. [84] In other words, whereas a person who commits the offences provided for in ss. 208 of the SA and 491 of the ADFPSis a secondary offender, the same person, in the context of s. 482, is guilty of a single discrete and independent offence.

A person whoconsents to or authorizes a broker’s acting on his or her behalf commits just one fault and should therefore receive just one statement ofoffence. [85] I agree with my colleague that the offence provided for in s. 482 of the ADFPS is a discrete and independent offenceand that the appellant is not liable for the offences committed by its broker. Nonetheless, this does not, in my opinion, mean that theappellant cannot have committed several discrete offences.

That is in fact what occurred here. [86] The evidence in the record shows that the consent or authorization the appellant gave its broker was not onlygeneral, but was also specific. As of June 2005, the appellant was in possession of the list of Quebec dealerships whose inventories wereto be insured starting in August 2005. Furthermore, the following words appeared above its broker’s signature on each of the individualinsurance certificates the broker issued to the Quebec dealerships: [translation] “Signed on behalf of the insurer(

s) by Flanders InsuranceManagement and Administrative Services Ltd.” Thus, the appellant participated, through its representative, Flanders, in the issuance ofeach of the individual insurance certificates in Quebec. This means that the appellant specifically consented to and/or authorized each ofthe 56 transactions that took place in Quebec, thereby committing the offence provided for in s. 482 of the ADFPS 56 times.

In short, itperformed 56 separate acts of authorization and/or consent. [87] Although I cannot find as a matter of law that there was a single transaction in this case and that the appellant isguilty of just one offence, I do consider it necessary to add a few comments about the AMF’s decision to issue 56 separate statements ofoffence against the appellant. [88] I recognize that a prosecutor, the AMF in this case, has a broad quasi-judicial decision-making power that flowsfrom its ability, and above all discretion, to issue statements of offence in the cases that come before it (G.

Létourneau, Code deprocédure pénale du Québec: annoté (9th ed. 2011), at p. 324). Moreover, a very high standard of intervention must be met by a courtreviewing the exercise of this broad power. Courts can order stays of penal proceedings only in the “clearest of cases”, where “there isconspicuous evidence of improper motives or of bad faith or of

an act so wrong that it violates the conscience of the community, suchthat it would genuinely be unfair and indecent to proceed” (R. v. Power, (SCC), [1994] 1 S.C.R. 601, at p. 616, perL’Heureux-Dubé J.; see also R. v. O’Connor, (SCC), [1995] 4 S.C.R. 411). This is clearly not such a case. [89] However, I believe it is important to remember the fundamental distinction between the regulatory penal law systemand the criminal law system in Canada. In the leading case of Sault Ste.

Marie, at pp. 1302-3, this Court laid down the followingprinciples: [Regulatory offences] are not criminal in any real sense, but are prohibited in the public interest. . . . Although enforced aspenal laws through the utilization of the machinery of the criminal law, the offences are in substance of a civil nature and might well beregarded as a branch of administrative law to which traditional principles of criminal law have but limited application. [90] These two systems, the regulatory penal law and criminal law systems, serve societal purposes that are importantand complementary, but also different.

In the words of Cory J., whereas “criminal offences are usually designed to condemn and punishpast, inherently wrongful conduct, regulatory measures are generally directed to the prevention of future harm through the enforcementof minimum standards of conduct and care” (Wholesale Travel, at p. 219).

It is therefore essential not to lose sight of the basicdifferences between the two systems and, as a result, to weaken the application of one by distorting the application of the other. [91] In the instant case, at the risk of crossing the line between regulatory penal liability and criminal liability, the factthat there is a substantial minimum fine to sanction the commission of the offence provided for in s. 482 of the ADFPS raises thequestion whether it was fair for the AMF to decide to lay 56 separate charges against the appellant. [92] It might have been preferable for the AMF to file a single statement of offence rather than the 56 statements it didfile.

Nevertheless, it will not be necessary to determine whether the AMF’s conduct in proceeding as it did constitutes an improper useof procedure, since this question was not before the other courts and was touched on only indirectly in argument in this Court. [93] Dura lex, sed lex: The law is harsh, but it is the law, and the AMF has obviously given full meaning to thisexpression where the appellant is concerned.

Yet the AMF chose to prosecute Flanders, the principal wrongdoer, under s. 462 of theADFPS, which meant that Flanders was liable to a lesser sanction that is in no way comparable to the fine that could be imposed on theappellant under s. 487 of that same Act.

Although technically speaking the appellant did consent to and/or authorize the issuance ofindividual insurance certificates on 56 occasions, the fact remains that these offences arose out of a single decision to retain Flanders as abroker. [94] In my opinion, it would be preferable for a prosecutor, when exercising its discretion to issue multiple statements of

offence, to assess the context in which the offences were committed on a case-by-case basis. This would ensure that its procedures arenot transformed into the equivalent of criminal proceedings and do not fuel confusion between regulatory penal liability and criminalliability. V. Conclusion [95] For these reasons, I would dismiss the appeal with costs. The reasons of LeBel and Fish JJ. were delivered by Fish J. (dissenting in part) — I [96] The appellant stands convicted 56 times for what, as a matter of law, was in my view a single offence.

For thereasons that follow, I would therefore substitute a single conviction. II [97] According to the respondent (the “Authority”), the appellant (“La Souveraine”) contravened s. 482 of An Actrespecting the distribution of financial products and services, R.S.Q., c. D-9.2 (“ADFPS”), 56 times on the same day ― in 56 differentlocalities across Québec. [98] The 56 counts are virtually identical, except for the place where each offence is said to have been committed.

Theyall allege that La Souveraine [translation] “did consent to and/or authorize” Flanders Insurance Management and Administrative ServicesLtd. (“Flanders”) ― an unregistered firm ― to contravene s. 71 of the ADFPS, thereby itself committing an offence under s. 482 of theADFPS. [99] Upon conviction on all 56 counts, La Souveraine would be liable to a mandatory minimum punishment ― a fine of$560,000. [100]

Section 482 of the ADFPS reads: 482. Every insurer that helps or, by encouragement, advice or consent or by an authorization or order, induces a firm or an independentrepresentative or independent partnership through which it offers insurance products or an executive officer, director, partner, employeeor representative of such a firm or independent partnership to contravene any provision of this Act or the regulations is guilty of anoffence.

The same applies to any director, executive officer, employee or mandatary of an insurer. [101] I am satisfied that this provision creates a discrete substantive offence, rather than a party liability offence. Manifestly,an insurer found to have violated s. 482 of the ADFPS is neither guilty of the same offence nor liable to the same penalty as

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