Rudolph v. Canada (Attorney General), 2022 NSSC 127

SUPREME COURT OF Nova Scotia Citation: Rudolph v. Canada (Attorney General) , 2022 NSSC 127 Date: 20220506 Docket: Hfx No. 494992 Registry: Halifax Between: Douglas G. Rudolph Applicant v. The Attorney General of Canada, Brian Cameron and Merrill Buglar Respondents Judge: The Honourable Justice D. Timothy Gabriel Heard: Final written submissions from Counsel: December 20, 2021, in Halifax, Nova Scotia April 29, 2022 Counsel: Christopher I. Robinson, for the Applicant Mark Freeman, for the Respondents By the Court: [ 1 ] In R. v.

Rudolph , 2017 NSSC 333 , this Court determined that the Applicant, Douglas Rudolph's, rights under the Canadian Charter of Rights and Freedoms ("the Charter ") had been breached by RCMP Officers Buglar and Cameron and, by extension, the Attorney General of Canada. In a subsequent decision, R. v. Rudolph , 2017 NSSC 334 , it was determined that, given the nature of the breach, the only appropriate remedy was for the Court to grant a stay with respect to the very serious criminal charges that he was facing.

The parties have referred to these decisions as the " Charter Decision" and the "Remedy Decision", respectively. I will do so as well. [ 2 ] The Applicant now seeks monetary damages as a result of the breach of his Charter protected rights. His application is dismissed. My reasons follow. Background (

i) The Investigation [ 3 ] Mr. Rudolph was charged with fraud pursuant to s. 380 of the Criminal Code of Canada , in a multi-count Indictment. Details of the criminal investigation were provided by the Respondents in the form of an affidavit of RCMP Cpl. Brian Cameron (“Cpl. Cameron”). I will hereinafter refer to it as the "Cameron affidavit" ( Exhibit “2” ). A brief overview of the investigation follows. [ 4 ] It began in March 2009. Two investors reported that they had been the victims of fraud involving the Applicant, another individual named Peter Mill, and two of the Canglobe Group of companies ("Canglobe" or “the company”). A criminal fraud

investigation ensued. Cpl. Cameron was the lead investigator. [ 5 ] The investigation revealed evidence which resulted in the Applicant, as well as Mr. Mill, being charged. It was alleged that, between September 2004 and October 2007, investors were solicited to invest in Canglobe. The Applicant and Peter Mill spearheaded investor recruitment. Prospects reported to the investigators that they were told that their investments were needed to provide bridge financing while the company secured a large amount of cash, from an overseas source, for investment in Canada.

The investors were provided with promissory notes signed by either Mr. Mill, the Applicant, or both of them. They were also assured that their investments were fully secured by the equity in the Applicant’s multimillion dollar real estate in Bedford. [ 6 ] Investors also reported being told that they could expect to begin receiving monthly interest payments on their investment right away. None did.

In fact, over a period of approximately 21 months after the first investor should have started receiving the promised interest payments, promissory notes calling for such a monthly return continued to be issued to new investors. [ 7 ] After an interval, some Canglobe investors began to ask for their investment money to be returned to them. The Applicant's "multimillion dollar property" thereupon underwent an ostensible title change. It was discovered to be no longer in his name. Investors reported being told that the home ownership change was necessary because of debt Mr.

Rudolph had incurred with the other owners of the property, one of whom was his brother. They also said that Mr. Rudolph denied that he had received any money as a result of this transaction. [ 8 ] Many investors said that they were provided with information by the Applicant and Mr. Mills purporting to explain why they had been delayed in receiving their returns. These delays (and explanations) were multifaceted and continual. [ 9 ] All in all, only three investors reported having been repaid any of their investment.

The monies with which they were repaid appeared to have come from funds provided by later investors in Canglobe. The vast majority lost their entire investment. [ 10 ] The investigation also uncovered evidence that the victims' funds, instead of being invested, were actually being paid to friends and family members of Mr. Mill, or provided to the Applicant to pay his own debt and living expenses. A.

Mark David, then a member of the Nova Scotia Barristers’ Society, and, at the time, Canglobe's lawyer, received more than 10% of the funds that went through his trust account, ostensibly for expenses, and to cover a $20,000.00 per month retainer. [ 11 ] The Respondents, in their brief, cite the decision of the Nova Scotia Securities Commission ("NSSEC") in Douglas G. Rudolph, Peter A.D. Mill, Cfg*Cn Ltd. (also known as Canglobe Financial Group), and Canglobe International Capital Inc. (Re) , 2021 NSSEC 3, to the following effect: 335.

The CanGlobe scheme was an elaborate deception designed to defraud unwitting investors. Each witness' evidence told a familiar story of abused trust, deception and loss. Some expressed disbelief that they had fallen for the scam, but the truth is that the Respondents were masters of deception and obfuscation. Their clearly established relationships with AA at TD Bank and A. Mark David lent an air of legitimacy to the entire CanGlobe scheme with devastating consequences. Each witness testified to the lasting negative impact and far- reaching consequences of having fallen for this scam.

These witnesses, in many instances, lost not only their life savings but were left encumbered with the maximum amount of debt possible. Although years have passed since the failed investment, many of these witnesses are still working to pay for the debts incurred from being defrauded by the Respondents. Others have indicated that they believe they will never recover financially or emotionally from the loss.

The sheer volume and consistency of the evidence presented at the hearing has convinced us that the Director has successfully made the case for the Allegations against the Respondents. [ 12 ] This NSSEC decision is currently under appeal. (ii) Why a stay of the criminal charges against the Applicant was granted. [ 13 ] During the course of their investigation, the RCMP obtained, and made use of, evidence implicating the Applicant provided by Mr. David. He had been asked a number of times to provide this evidence, despite the fact of the solicitor/client relationship between himself and Mr. Rudolph.

At length, he acquiesced and received, in return, immunity from prosecution with respect to the role that he had played in what had happened. Whether this quid pro quo was enforceable or not, it was obviously intended as an inducement. [ 14 ] In the Charter decision, Justice Boudreau determined that this amounted to a breach of the Applicant's protected rights. In the course of her analysis, she stated the following: 85. In my view, the Crown’s “vetting” proposal in relation to the statement of Mark David (and the ITOs) is not an appropriate remedy. I am not satisfied that it is a constitutionally valid option.

It does not fix the real and fundamental problem: that everyone involved, including the police, the prosecution, their witnesses (experts), defence counsel, and applicants, have seen and used the statement of Mark David. That statement has always been, and remains, presumptively privileged. [ 15 ] The Respondents appropriately acknowledge in this proceeding that a breach of Mr. Rudolph’s Charter protected rights has thereby occurred. Issues [ 16 ] The remaining issues to be discussed are as follows: A. Use of the RCMP investigative report attached to Cpl Cameron’s affidavit and the NSSEC decision. B.

Was the admitted Charter breach accompanied by mala fides on the part of the RCMP? If so; C. Are damages a just and appropriate remedy?

D. Are there other considerations which might render a damages award unjust or inappropriate in the circumstances? E. What (if any) is the appropriate quantum of damages in these circumstances? Discussion and Analysis A. Use of the RCMP investigative report attached to Cpl Cameron’s affidavit and the NSSEC decision. [ 17 ] The parties, at the Court's request, provided the background to the Respondent's submission of the RCMP investigative report as an exhibit to the Cameron affidavit.

The Respondent’s supplemental brief of April 29, 2022 noted (at page 2): ... the Respondent was concerned about this affidavit issue before the hearing. The Respondents' Affidavit is critical to the Respondents' case and its treatment is paramount to having this matter fairly decided by the unique Application in Court process. Given the Respondents' appreciation of vital importance of its Affidavit being received and relied on by the Court, Respondents' counsel emailed Applicant's counsel before the hearing …The Applicant confirmed they were not seeking to strike the Respondents' Affidavit.

This correspondence, from December 17, 2021, can be provided if the Court requires it. The decision from the NSSC [sic] and the police investigation report found in the Respondents' Affidavit are corroborative regarding the actions of the Applicant and the consequences for the public. [ 18 ] Counsel for the Applicant stated, in his supplemental submission dated April 29, 2022 (page 1): The report (the RCMP investigative report) was exhibited in the affidavit of Cpl.

Cameron, and, in accordance paragraph 8 of that affidavit, the sole purpose of the report was to provide support for the Applicant's evidence that the police acted in good faith in the manner in which they pursued the investigation of Mr. Rudolph.

And that (good faith) assessment, we submit, is the appropriate extent to which the Court may consider the report. [ 19 ] At page 2, counsel for the Applicant continues: There are two issues regarding which the Applicants have relied on the decision [NSSEC decision]: (1) the supporting evidence of their countervailing factors argument; and (2) as supporting evidence of their "but for" analysis regarding damages to Mr. Rudolph's business. We submit the Court appropriately may consider the decision these two purposes. [ 20 ] In addition, I note the provisions of Civil Procedure Rule 5.16:

(1) A party who wishes to object to the admission of an averment, an exhibit, or a part of either in an affidavit must file a notice of objection to admissibility before the finish date.

(2) The notice of objection to admissibility must contain the standard heading written in accordance with Rule 82 - Administration of Civil Proceedings, be entitled “Notice of Objection to Admissibility (Application in Court)”, be dated and signed, and include all of the following: (

a) a statement identifying the affidavit containing an averment, exhibit, or part said to be inadmissible under the rules of evidence; (

b) particulars of the averment or exhibit and a

summary of the objected averment or exhibit; (

c) the ground of the objection including the rule of evidence relied upon.

(3) The notice of objection to admissibility may be in Form 5.16.

(4) A party who does not file a notice of objection may not rely on the rules of evidence to exclude an averment or an exhibit in an affidavit filed in an application in court.

(5) A judge may not exclude an averment, an exhibit, or a part of either that is not the subject of a notice of objection to admissibility, unless the judge is satisfied both that the averment, exhibit, or

part is inadmissible and that its remaining part of the record compromises the integrity of the fact-finding process. [ 21 ] No notice of objection pursuant to Civil Procedure Rule 5.16 was filed. [ 22 ] Analogous issues have been dealt with in previous cases. The approach is epitomized by National Bank Financial Ltd v. Potter , 2015 NSCA 47 .

Therein, Saunders, JA (as he was then) was dealing with a factual situation in which the bank sued various KHI investors for unpaid margin debt, despite its own confidential admission in a settlement agreement in a Securities Commission proceeding that it had failed to properly supervise its employee Clarke. In holding that the bank's conduct was an abuse of process, the Court noted: 134.

From all of this it is clear that the following decisions were before Justice Warner: *Justice Scanlan's 'inconsistent pleadings' decision ( 2005 NSSC 8 ); *Justice Scanlan's 'privilege' decision ( 2005 NSSC 113 ); *Two decisions of this Court regarding the settlement agreement (reported as 2012 NSCA 12 and 2012 NSCA 99 );

*The decision of Commissioner Gruchy of the NSSC, dated April 17, 2012 and amended September 30, 2012; *The decision of the NSSC dated December 4, 2012. 135. In addition, during argument at the appeals to this Court, the parties referred us to Justice Warner's 2008 decision ( 2008 NSSC 135 ) wherein he refused to permit the Bank to amend its pleadings, and to Justice Hood's 2010 decision ( 2010 NSSC 214 ) where she dismissed the motions by seven parties to have the Bank's pleadings struck as an abuse of process. 136.

As well, there can be no doubt that the 2005 settlement agreement and the Escrow Agreement between the Securities Commission and the Bank form part of the record before Warner, J. and this Court. [ 23 ] Earlier, Saunders, JA. had pointed out: 125. The principal basis for my conclusion in this regard is that in these three cases there is no material dispute about the facts. Rather, the contest between the parties on appeal is how one ought to characterize the conduct based on those facts, and how does one then fashion a proper remedy which will do justice between the parties .

When these three appeals were considered as a "trilogy" by the panel, all parties concerned clearly understood that the allegation of abuse of process was an issue that was front and centre, and would be decided by the Court. No challenge was ever brought seeking to contest our ability to fully examine the record (including the decisions to which I will refer) or suggesting that we were not entitled to consider and dispose of the complaint of abuse of process.

On the contrary, counsel for the claimants, the self-represented claimants, and counsel for the Bank all presented us with copies of such previous decisions (or referred to them in the record) and made very comprehensive submissions, both in writing and at the hearing, with respect to them. These issues were the subject of repeated questioning by the panel during the hearings. Consequently, no one could be heard to say that they were prejudiced or taken by surprise in our having addressed the subject. 126.

Accordingly, I do not see this as a case where this Court needs to invoke the doctrine of judicial notice, and account for all of the steps that might entail.

Rather, the prior decisions to which I will now refer and the factual findings upon which those prior decisions were based, were all either made part of the record before Justice Warner, or incorporated by reference in the appeals to this Court through the submissions of counsel and their handouts during argument. [Emphasis added] [ 24 ] On the basis of the above, I have concluded that it is appropriate to refer not only to the Charter and Remedy decisions discussed above, but also the NSSEC decision as well as the contents of the RCMP investigative report, during the course of my consideration of the remaining issues.

B. Was the Charter breach accompanied by mala fides on the part of the RCMP? [ 25 ] In Taylor v. London (City) Police Services , 2016 ONSC 5839 , (which followed Hawley v. Bapoo , 2007 ONCA 503 ) the Court noted: 56. To successfully prove a claim and recover damages for a s. 8 Charter breach the plaintiff must demonstrate a breach of a protected right coupled with bad faith actions on the part of the investigating officer.

The plaintiff must prove that the officers required a warrant to enter the plaintiff's residence prior to effecting his arrest, coupled with bad faith on the part of the police. [ 26 ] During the course of the Charter decision, Justice Boudreau elaborated upon her conclusion in relation to Mr. David’s statement: 93. I note the following quote from Grant (supra): “... ignorance of Charter standards must not be rewarded or encouraged and negligence or willful blindness cannot be equated with good faith.” (para. 75) 94. In the case before me, the Mark David statement is clearly the more serious of the breaches.

The Crown has argued that the police were sincerely unaware that they had to concern themselves with solicitor-client privilege in this interview, given that a witness statement does not normally require any special considerations. I have already rejected that submission. While I agree that this was not a typical situation for the police, I have no difficulty in finding that their actions were grossly careless . 95. The police were very much alive to the issue of solicitor-client privilege in this case.

Because of their dealings with the NSBS, they were aware that the Lavallee process was required for lawyers’ material. For example, they first sought the NSBS’s files in their entirety, but had to adjust their expectations when the process was explained. Furthermore, on the many occasions when they approached Mr. David himself, he repeatedly expressed concerns about solicitor-client privilege. [Emphasis added] [ 27 ] Moreover, as noted earlier, the Crown acknowledges the fact of the Charter breach. Both parties acknowledge that, because of the breach, the very serious criminal charges which Mr.

Rudolph was facing, were stayed. [ 28 ] The Cameron affidavit says, at para. 8: At all material times, the Respondents acted in good faith in pursuing the investigation described in Exhibit “1” and Exhibit “2”. The Respondents consulted with and took advice from Craig Botterill, Q.C. of the NS Public Prosecution Service in relation to the Respondents’ approach to Mark David solicitor/client privilege issues.

[29] Cpl. Cameron was not cross-examined on his affidavit. Mr. Rudolph was not questioned on his, either. As previouslydiscussed, attached to the Cameron affidavit (Exhibit “3”) at tabs 1 and 2 is found the RCMP Commercial Crime Section: “Report toCrown Counsel, Disclosure, Vetted Copy”, and Agreed Statement of Facts with respect to the R. v. Mill and Rudolph Joint CharterDefence Application, respectively. Most of the essential facts therein have earlier been discussed, in very

summary form. [30] This is what Boudreau, J. said in the Charter decision: 56. In other words, from the very beginning, Mr. David was repeatedly expressing concerns about speaking to police about CanGlobe,Mr. Mill, and Mr. Rudolph, due to solicitor client privilege. But it is also clear that from the beginning, Mr. David was very worried forhimself, and worried about a prosecution against him. He said this to police. Mr. David was obviously in a very difficult and precarioussituation. This would not have been lost on the investigators. 57. We know that on November 2, 2011, Mr.

David changed his mind, and decided to speak to police. We do not know why Mr. David changed his mind, or what intervening events might have caused him to reconsider. However, we do know that on November 2nd, Mr.David’s concern was protection for himself. Mr. David’s lawyer and the police agreed upon a document, meant to shield Mr. Davidfrom prosecution if he spoke about Mr. Mill and Mr. Rudolph. It is not a great stretch of imagination to infer that this “immunity”agreement was the reason Mr. David changed his mind and spoke to police. 58.

The Crown notes that this document was unenforceable, in point of fact, and therefore meaningless. In my view, that misses thepoint. This document, and its creation, clearly shows two very important things: first, that Mr. David’s primary concern on that day, wasprotecting himself and not his clients; and second, that the police’s interest was not truly in Mr. David, but rather, in Mr. Rudolph andMr. Mill. In fact, the police were so interested in Mr. Rudolph and Mr. Mill that they were prepared to possibly forgo prosecutionagainst Mr. David, without even knowing what he would say.

This document provides us with a clear indication of everyone’s trueinterests at the time of this statement. 59. It appears that the police engaged in all of this because they honestly believed the activities between Mr. Mill, Mr. Rudolph, and Mr.David were criminal in nature. As a result, they believed that there was no need for them to worry about solicitor-client privilege. Although this may explain what occurred, it frankly remains an inappropriate way of thinking for law enforcement.

Certainly in othercontexts, it would be unacceptable for police to disregard the rights of a suspect merely because they are convinced of his ultimate guilt. For example, it would be unconstitutional for police to engage in a law office search without any Lavallee safeguards, merely becausethey believed the lawyer to be engaged in criminal behaviour; no matter how strong their belief. That is not how the Charter is meant towork. [Emphasis added] [31] She continued: 68. Furthermore, Mr.

David had himself raised solicitor-client privilege a number of times in their earlier discussions, and refused tospeak to police on that basis. The police continued to actively seek a statement from Mr. David through a total period of nearly 2 years,and they eventually succeeded. But in doing so they did not set up any process at all, to protect potentially privileged information. Thepolice knew, or should have known, that solicitor-client privilege is the privilege of the client, not the lawyer. The information does notbelong to the lawyer, and it is not his to give. … 71.

I find that the fact scenario before me is very disturbing. Not only did the police establish no safeguards, they actually went a stepfurther: they created a situation that actually invited a breach of solicitor-client privilege. 72. We might recall that, in some of the cases I have reviewed, the police ignored solicitor-client privilege by inadvertence: they wereeither unaware, or lacked caution, as to the existence of privileged material in a given situation. 73. That is not the case here. In this case, the police did more than simply ignore potential and presumptive solicitor-client privilege.

They, in fact, sought it out. They sought to interview a lawyer. In seeking and setting up that interview, they behaved as if solicitor-client privilege was a non-issue, despite the issue being put squarely before them, at every turn, on this file. And most disturbing in thecontext of these facts, was the offer and use of an immunity agreement, with a lawyer. 74. Lawyer Mark David was offered/given immunity from prosecution if he gave information about persons who, according to theinformation the police had, were (or were possibly) his clients. In other words, an incentive was given by police to entice Mr.

David tospeak. Mr. David clearly felt vulnerable to prosecution, and faced no repercussions from the bar society (as he was disbarred). Asolicitor-client privilege breach was entirely foreseeable by the police, was ignored, and then was aggravated by their actions. [Emphasis in original] [32] Then after quoting from R. v. Grant, 2009 SCC 32 , [2009] 2 SCR 353, to the effect that neither ignorance of theCharter, nor willful blindness may be equated with good faith, Justice Boudreau continued (in the Remedy decision): 96.

In those circumstances, I find it completely disingenuous for the police to suggest that in taking a statement from Mr. David, theywere unaware that they might be breaching privilege. The situation before the police was fraught with risk. Mr. David was a disbarredlawyer and therefore not likely subject to sanction. The police were actively seeking information about his work for persons who werebelieved to be his clients. They enacted no safeguards in doing so. Furthermore, in

an act which I can only describe as indefensible, thepolice offered Mr. David immunity from prosecution for giving information against the applicants. That offer was put forward, andaccepted, as an inducement. Whether it was enforceable is hardly the point. 97. In my view the facts before me point to only two possibilities: either the police knowingly proceeded in a way to purposefully avoid

the Lavallee process; or in the alternative, they wilfully blinded themselves to the reality of the situation. Neither scenario amounts togood faith on their part. [Emphasis added] [33] And finally, she concluded: 104. In my view, this case meets the first category of the Babos test. Presumptive solicitor-client privilege has been breached, and in myview, it cannot be remedied in any way which allows this prosecution to continue. The state’s conduct in the taking of a statement fromMark David, and disseminating it as they did, in my view has seriously compromised the fairness of the applicants’ trial.

The breachcannot be remedied and will be manifested, perpetuated or aggravated through the conduct of the trial. [34] The Crown argues that Justice Boudreau’s findings do not equate to a finding of “bad faith” on a balance of probabilities. What it amounts to (the argument continues) is that the Public Prosecution Service had failed to prove good faith by the RCMP so as toallow the prosecution to continue (brief, para. 33). [35] I have extensively reviewed the materials supplied with the Cameron affidavit.

I certainly agree that the standard which mustbe applied in this proceeding is different to that which was applicable in the Charter and Remedy cases. [36] However, the investigating officers could not have been unaware of the significant risk that they ran here. They solicited (notonce but repeatedly) a statement from Rudolph’s, Mills’ and CanGlobe’s lawyer, and eventually offered him an inducement to breachsolicitor/client privilege.

The fact that they received legal advice during the process, and, at times, worked in concert with Nova ScotiaBarristers’ Society, does not alter that reality. [37] In the circumstances, the actions of the RCMP were tantamount to a repeated solicitation of the breach of the Applicant’s s. 7Charter rights by Mr. David. He was, at this time, a disbarred lawyer and extremely vulnerable.

I am satisfied that, in this very specificset of circumstances, the cumulative (unchallenged) facts contained in the materials annexed to the Cameron affidavit, in that of theApplicant, and in the Charter and Remedy decisions, amount to mala fides for the purposes of this application. C.

Are damages a just and appropriate remedy? [38] Claims for damages emanating from a breach of a claimant’s rights under the Canadian Charter of Rights and Freedoms derivefrom s. 24(1) thereof, which reads: Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competentjurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances. [39] Consideration then proceeds to Ward v. Vancouver (City), 2010 SCC 27, and the cases decided in its wake.

In Ward, theSupreme Court of Canada outlined the purpose and rationale of such damage awards, and discussed when they may be appropriate: 24. A functional approach to damages finds damages to be appropriate and just to the extent that they serve a useful function or purpose. This approach has been adopted in awarding non-pecuniary damages in personal injury cases (Andrews v. Grand & Toy Alberta Ltd., (SCC), [1978] 2 S.C.R. 229), and, in my view, a similar approach is appropriate in determining when damages are"appropriate and just" under s. 24(1) of the Charter. 25.

I therefore turn to the purposes that an order for damages under s. 24(1) may serve. For damages to be awarded, they must furtherthe general objects of the Charter. This reflects itself in three interrelated functions that damages may serve. The function ofcompensation, usually the most prominent function, recognizes that breach of an individual's Charter rights may cause personal losswhich should be remedied. The function of vindication recognizes that Charter rights must be maintained, and cannot be allowed to bewhittled away by attrition.

Finally, the function of deterrence recognizes that damages may serve to deter future breaches by state actors. [Emphasis added] [40] Ward recognized that both compensatory and non-compensatory purposes may be served by such awards. In addition toproviding deterrence, damages may also serve to vindicate, or affirm constitutional values: 27. Compensation has been cited by Lord Woolf C.J. (speaking of the European Convention of Human Rights) as "fundamental". Inmost cases, it is the most prominent of the three functions that Charter damages may serve.

The goal is to compensate the claimant forthe loss caused by the Charter breach; "[t]he applicant should, in so far as this is possible, be placed in the same position as if hisConvention rights had not been infringed": [page42] Anufrijeva v. Southwark London Borough Council, [2003] EWCA Civ 1406, [2004]Q.B. 1124, at para. 59, per Lord Woolf C.J. Compensation focuses on the claimant's personal loss: physical, psychological andpecuniary. To these types of loss must be added harm to the claimant's intangible interests.

In the public law damages context, courtshave variously recognized this harm as distress, humiliation, embarrassment, and anxiety: Dunlea; Bivens v. Six Unknown Named Agentsof Federal Bureau of Narcotics, 403 U.S. 388 (1971); Taunoa v. Attorney-General, [2007] NZSC 70, [2008] 1 N.Z.L.R. 429. Often theharm to intangible interests effected by a breach of rights will merge with psychological harm. But a resilient claimant whose intangibleinterests are harmed should not be precluded from recovering damages simply because she cannot prove a substantial psychologicalinjury. 28.

Vindication, in the sense of affirming constitutional values, has also been recognized as a valid object of damages in manyjurisdictions: see Fose v. Minister of Safety and Security, 1997

(3) SA 786 (C.C.), at para. 55, for a

summary of the internationaljurisprudence. Vindication focuses on the harm the infringement causes society. As Didcott J. observed in Fose, violations ofconstitutionally protected rights harm not only their particular victims, but society as a whole. This is because they "impair public

confidence and diminish public faith in the efficacy of the [constitutional] protection": Fose , at para. 82. While one may speak of vindication as underlining the seriousness of the harm done to the claimant, vindication as an object of constitutional damages focuses on the harm the Charter breach causes to the state and to society . [Emphasis added] [ 41 ] As the Court, in Taylor (supra) summarized: 115. Determining whether s. 24(1) Charter damages are appropriate in a civil action requires a court to consider the following four factors: (

i) Has a Charter right been breached? (ii) If so, are damages a just and appropriate remedy? More specifically, will an award of damages address one of the following areas: (

a) compensation; (

b) vindication of the right; and (

c) deterrence of future breaches. (iii) Are there countervailing factors that render a damages award inappropriate or unjust? [ 42 ] I will proceed to consider these sub-issues sequentially. (

i) Compensation [ 43 ] Mr. Rudolph's compensatory claim must be grounded upon either physical, psychological, or pecuniary loss. The tenor of the Applicant's argument, as presented by counsel, assumes that these losses or deficits speak for themselves. They do not. [ 44 ] For example, the Applicant says: ...the compensatory goal of Charter damages is to place the Applicant in the same position as if his rights had not been breached. Mr.

Rudolph's evidence regarding the devastating impact the charges have had – for seven years now and counting – on his ability to earn an income, it is clear, specific and uncontroverted. The majority of Mr. Rudolph's working life – since his graduation from MSBU in 1988 – has been spent as a self-employed professional in the bookkeeping and accounting services industry. His livelihood – as is that of most self-employed professionals – depends almost entirely on building practice over time through referrals from existing clients. Referrals are the lifeblood of professional small business people.

Nova Scotia is a small province, and HRM is a small town... as the well-worn saying goes, "Halifax is the smallest city of 400,000 people on the planet" – everyone knows everyone, and there are no six degrees of separation here, it is more like two, or maybe three. Mr. Rudolph's evidence is simple and understandable: once the charges were laid accusing him of financial fraud, existing clients left, new clients quickly became non-existent, and referrals were a thing of the past, with the expected result that his business revenue plummeted . Mr. Rudolph's lost revenue since the charges were a total of $505,074.00.

From now to retirement at age 65, Mr. Rudolph's lost income totals another $581,688.00...assuming he would ever be able to retire at age 65, which, given the fact that his savings have been completed to try to cover day-to-day expenses, would be well-nigh impossible. [Emphasis added] ( Applicant's Brief, paras. 31 – 33 ) [ 45 ] I will not offer any comment upon Mr. Rudolph's expressed concerns about his "well-nigh impossible" prospects of retirement.

I will, however, observe that the evidence of his alleged pecuniary loss is not "simple and understandable" in the least. [ 46 ] For example, attached to his affidavit of August 24, 2021 (Exhibit “1”) at tabs E and F, the following is found: Table Description automatically generated

A picture containing schematic Description automatically generated [ 47 ] These are said to be charts prepared by the Applicant. They purport to show "Revenue Lost from 2014 fiscal (%) for Contra Tax Inc." However, I noticed only two portions of his affidavit which mention this latter entity.

The first is para. 31: "In 2013, I incorporated a company, Contra Tax Inc., which was the entity under which my accounting work was invoiced to clients". [ 48 ] The second is para. 56 : "Attached as Exhibit G are true copies of my annual corporate tax returns for 2013 – 2014 Contra Tax Incorporated". [ 49 ] The Applicant appears to be a shareholder of Contra, but he does not say so in the body of his affidavit. Nor does he mention whether the company has any other shareholders. The corporate income tax forms at tab G show Robert J.

Rudolph as the owner of 100% of the common shares, and the Applicant as the owner of 100% of the preferred shares. Robert J. Rudolph may be his brother. Again, he does not say. [ 50 ] Explanations of some other (very basic and fundamental) things are also missing. For example, how does the money flowing into the company reach the Applicant personally? Does he or anyone else receive income from the company in the form of salary, corporate dividends, or by some other method? Does the company have (or did it have) retained earnings?

How is it taxed? [ 51 ] The closest thing to an explanation of the relationship between how the Applicant worked, and how he was remunerated, is provided in following portions of his affidavit : 50. The adjusted gross revenue for the fiscal period ended January 31, 2014 (almost two (2) months before the Charges were filed against me) was $111,897. Over the next seven (7) fiscal periods, the adjusted gross revenue declined to $21,250 – an average annual loss of $64,632. 51. Attached as Exhibit “E” is a true copy of a

schedule that I authored which normalizes my annual revenue from 2013 forward. There are only two adjustments. First, because of the emotional and structural fallout from the Charges, a project was not completed, and the adjustment to reflect same was removed from 2018 fiscal when the decision was made and was allocated 2016 fiscal when the invoice was originally issued. The second adjustment was to remove revenue from 2016 as it was billed to family and only existed because of the severe negative impact of the Charges on my business … in normal times family members would not have been billed for such work. 52.

I have analyzed the charges in my gross revenue over 7 years. Attached as Exhibit “F” is a true copy of a

schedule I authored which demonstrates the year-over-year changes from the base year (2014 fiscal), with explanations. 53. There are 4 years with changes that required an explanation, and the reasons for those changes were: businesses that ceased operations; one-time jobs that do not get repeated; and work for multiple years for a client that gets billed in a single year. The balance of the years however experienced normal revenue fluctuations. 54. After the Charges the publicity, and the damage to my reputation that followed, there were no way to replace any of those reductions as there had been in the past.

I was not doing hundreds of personal returns as a courtesy because they were not there to be done, and there was no substantial referral work from existing clients. The normal flow of the business had been destroyed by the Charges and there was way for me to repair it. 55. I would estimate that of my regular work week, to generate the revenue for the fiscal period ended January 31, 2014, it took approximately 33% to 40% of my time . … 57. The actual lost revenue from February 1, 2014, through January 21, 2021, was $452,424.

The 2021 fiscal prorated lost revenue for February 1, 2021, through August 31, 2021 is $52,650 ($90,647 x 212 days / 365 days). Therefore, the total lost revenue is $505,074 ($452,424 + $52,650). 58. Since it took an estimated 33% to 40% of my work hours to generate the 2014 fiscal period revenue, my losses may be twice the amount calculated. After the charges against me, there was no possible way to achieve the numbers that would have been associated with booking 65% to 80% of my work week. For example: $250.00 per hour for 30 hours per week for 48 weeks per year is $360,000.00. [Emphasis added]

[ 52 ] In addition to alleged pecuniary losses, the Applicant has provided some evidence which purports to describe the physical and psychological sequelae that he has experienced. For example, para. 59 he says: 59. The time and effort I was forced to spend verbally defending myself against the Charges with my family, friends, acquaintances and clients, became debilitating and humiliating for me. It seemed that every conversation I had revolved around the Charges against me … I could not escape them, nor the anxiety caused by constantly defending myself. [ 53 ] At para. 65 he continues: 65.

From an emotional standpoint, there were lengthy periods of time where the criminal process and the effort involved from me became so overwhelming that it consumed my days, and I was unable to do or think about anything else. [ 54 ] The Applicant also contends that he deals with anxiety, depression, humiliation, insomnia, shame, stress and other mental health concerns since March 27, 2014. He says that he does not go out very often, screens his telephone calls, keeps his blinds closed at home, and that he feels the stigma of the criminal process in his romantic relationship.

He adds that his friendships have become strained, he has experienced harassment and humiliation by border agents when attempting to travel out of the country, and that, outside of visiting family, he only goes to two places: the gym and the grocery store, because no one knows him at either of those venues. ( para. 79, ss. a – j ) [ 55 ] He summarizes the burden that he bears this way: 79(k).

After enduring many years of what, for me, emotionally and physically, has felt like systemic abuse by the state, and then living with the associated humiliation and embarrassment, I spend most of my time alone. [ 56 ] No medical or psychological evidence whatsoever (beyond the Applicant’s subjective assertions) has been presented. [ 57 ] The Applicant faces an additional problem.

Even if sufficient evidence had been presented upon which to establish actual pecuniary, physical, or psychological losses or deficits post March 27, 2014, the nexus of such losses to the breach of the Applicant’s Charter protected rights would have to be established. It has not. [ 58 ] The Applicant’s submissions simply amount to repeated assertions that the breach of his Charter rights, which occurred when Mr. David’s statement was obtained, led to the losses. But for that breach (he continues) he would not have sustained the financial or psychological and emotional harm to which he has referred.

Alternatively, he claims he need only establish that the breach was simply “a cause”. [ 59 ] Consider what the Court said in the Charter decision: 82. One might ask what the police should have done under these circumstances. Without attempting to provide a comprehensive outline as to a more appropriate procedure, I can easily think of safeguards that would have greatly minimized the breach here, and perhaps addressed it altogether. These safeguards would be in the nature and spirit of Lavallee . 83. For example, the police could have engaged the services of a third party to interview Mr.

David; possibility a person with, or engaged by, the Barristers’ Society. That interview could have been recorded, and the recording sealed. The interviewer would disclose nothing to the investigating police, and the interviewer would have no further involvement. 84. The investigating police/Crown would then bring the recording to a court, in a process similar to Lavallee , to determine what, if anything was privileged in the interview. This would take into account, one assumes, the criminality issue/evidence. 85.

Should such a process ever be undertaken, I leave it to another court to undertake a full analysis given its particular facts; but at the very least such a process would demonstrate a level of care and caution on the part of authorities relating to solicitor-client privilege that is completely absent in the case before me. [ 60 ] No evidence has been called by virtue of which the Court could get a sense of how pivotal Mr.

David's evidence was to the strength of the Prosecution's case, and/or whether some or all of that information would have been available to the Crown in any event. [ 61 ] Moreover, the Applicant's position ignores the fact that the police investigation originated because of specific investor complaints. These complaints are what started the process, and, as a result, the police uncovered a significant volume of evidence from people who said that they had lost everything by investing with the Applicant, Mr. Mill, and/or CanGlobe. [ 62 ] Although the NSSEC decision did allow the evidence obtained from Mr.

David to be admitted (and this is one of the reasons that it is being appealed), it also adverted to the significant volume of evidence before it. Once again, I return to para. 335 thereof: The sheer volume and consistency of the evidence presented at the hearing has convinced us that the Director has successfully made case for the allegations against the Respondents. [ 63 ] There is simply no evidence at all as to how and by what processes the pall over the Applicant and his reputation spread.

In the event that he could establish that some or all of the complainants provided the police with false information, or provided information to others which was untrue, and that he sustained damages as a result, then the Applicant would have a civil remedy against these complainants.

His onus in this Application, however, was to show that his loss came about as a result of the breach (by the Respondents) of his Charter protected rights during the course of their investigation. [ 64 ] Put differently, the evidence before me is that the RCMP launched an investigation when they received complaints from some of the investors who claimed that they had lost the very significant sums of money which they had invested with the Applicant and his associates. Their investigation led them to interview many others, almost all of whom also claimed to have lost everything. During the

course of the investigation, the police breached his Charter protected rights when they obtained a statement from his lawyer, Mr. David. The serious criminal charges that Mr. Rudolph was facing were stayed as a result. [ 65 ] Causation in this case is certainly not evident. The Applicant carries the burden of proving that but for the breach by the RCMP of his Charter protected rights, he would not have sustained the losses which he alleges. He must do so on a balance of probabilities.

He has essentially done nothing more than reference the Charter and Remedy decisions, and tell the Court how bad it has gotten for him since. [ 66 ] For example, do I assume that the investors ( en masse ) would have remained silent after sustaining such overwhelming losses? We know that at least some of them went to the police, which got the investigation going.

The trickle became a flood as investigators spoke to more and more investors who (both individually and cumulatively) claimed to have experienced devastating losses as a result of what the Securities Commission has called a "scheme" and a "scam". [ 67 ] Mr. Rudolph’s position also assumes that these victims, in addition to speaking to the police, would not have spoken to others, including some who, in the ordinary course of things, might otherwise have become clients of the Applicant. [ 68 ] Reference has earlier been made to something that the Applicant's lawyer acknowledged ( brief, para 36 ): "...

HRM is a small town... everyone knows everyone, and there are no six degrees of separation here, it is more like two, or maybe three." [ 69 ] If this is accepted, it follows that the community of investors, at least the group of constituents possessing the wherewithal to raise the sums with which they claim to have provided the Applicant, his associate, Mill, and/or CanGlobe, comprises a much smaller subset of the population as a whole. [ 70 ] I cannot simply infer causation based upon the evidence that the Applicant has led.

His obligation was to prove it, on a balance of probabilities. [ 71 ] In sum, the Applicant has not established “physical, psychological, or pecuniary loss” (as a result of the breach) on a balance of probabilities. His claim for compensatory damages must fail as a result . (ii) Deterrence of future breaches [ 72 ] The Applicant’s serious, multi-count criminal fraud prosecution was stayed as a result of the manner in which the police obtained solicitor/client privileged information from Mr. David.

Had he been convicted, the Applicant would undoubtedly have faced a significant period of incarceration. [ 73 ] As it stands, the police, the Crown, and society in general, have lost the fruits of an investigation spanning many years. Clear guidance has been provided by the Court as to the type of process that ought to have been followed when approaching Mr. David during the course of the police investigation.

Additional deterrence, in the form of a damage award to the Applicant, would not, in my view, serve any purpose. [ 74 ] This is particularly so because "deterrence", in the present context, is aimed at the government itself rather than the specific wrongdoer.

As we see in Ward at para. 29 : …Deterrence seeks to regulate government behaviour, generally, in order to achieve compliance with the Constitution...deterrence as an object of Charter damages is not aimed at deterring the specific wrongdoer, but rather an influencing government behaviour in order to secure state compliance with the Charter in the future. [ 75 ] I cannot conclude that the culture, or milieu in which this breach occurred is one which is tolerant of, encouraging of, or conducive to such breaches.

The constellation of circumstances in this case has been aptly described as “extremely rare” (see Remedy decision, para. 22 et seq , for example). I cannot see how the imposition of a monetary award to the Applicant is necessary to deter future such occurrences. (iii) Vindication of the right [ 76 ] As we consider the “vindicative” role which these types of damage awards may sometimes serve, we again have recourse to Ward , at para. 28 : …Vindication focuses on the harm the infringement causes society...violations constitutionally protected rights are not only their particular victims, but society as a whole...

While one may speak of vindications as underlining the seriousness of the harm done to the complainant, vindication as an object of constitutional damages focuses on the harm the Charter breach causes to the state and to society. [ 77 ] Further elaboration is found in Elmardy v. Toronto Police Services Board , 2017 ONSC 2074 : 34. …The driving force behind the Charter breaches -- racial profiling -- is a phenomenon that has been recognized as a problem in our police services for some time.

The Court of Appeal's decision in Brown was released in 2003 and the conduct giving rise to this proceeding occurred in 2011, eight years later. Racial profiling has a serious impact on the credibility and effectiveness of our police services. It has led to distrust and injustice. It must stop. 35. Unlike in Ward , the conduct of Constable Pak was both high-handed and oppressive. The appellant was not only touched; he was punched in the face twice. The interaction lasted half an hour, much of which time the appellant spent on the ground, handcuffed, with his bare hands exposed to ice.

The appellant was an innocent man who had fled his country looking for a society in which his rights would be respected. Instead of finding the respect to which he is entitled, he was subjected to humiliating, violent and oppressive

behaviour from one of this city's police officers, all because of the colour of his skin. Further, when questioned about their behaviour the police officers were found to have lied to the court, conduct that can seriously undermine the administration of justice. 36. For these reasons, there is a need for an award of damages that is significant enough to vindicate society's interest in having a police service comprised of officers who do not brutalize its citizens because of the colour of their skin and that sends the message to that service that this conduct must stop.

The courts and others have already made statements about the serious, wrongful nature of this type of conduct. Yet, it continues to occur. Declaratory relief is just another such statement. More is required. [ 78 ] I have already noted that the breach of the Applicant's Charter protected rights in this case, although extremely serious, was unusual and comparatively rare. This is very different than the descriptors applied in Elmardy to the breach with which that Court contended. [ 79 ] In Ward , the Plaintiff, although lawfully arrested, was subjected to an illegal strip search.

The search was relatively brief, he was not injured, and the Court concluded that the objectives of deterrence and vindication did not require a substantial award of damages under those circumstances. He was awarded $5,000.00. [ 80 ] In Taylor , a case where the Plaintiff sustained bodily injury directly as a result of the violation of his s. 8 rights, the Court noted: 116. Having found a clear breach of the plaintiff's s. 8 Charter rights, I have little difficulty concluding in these circumstances that damages are a just and appropriate remedy for the plaintiff.

A man's home is his castle and the unlawful entry by the police into the plaintiff's home constitutes a clear and substantial violation of his Charter rights . 117. The main focus of the plaintiff's claim for damages speaks to compensation. Vindication and deterrence address the seriousness of the officer's conduct. Although I find the conduct of Officer Hartery to be serious and to have been carried out in bad faith, I also recognize that it was not egregious or malicious and that he likely would have been granted a Feeney warrant in these circumstances.

Accordingly, these facts do not lend themselves to a substantial award for damages for vindication and deterrence. [Emphasis added] [ 81 ] The Court went on to award the Plaintiff in Taylor $7,500.00 to address the objects of vindication and deterrence. [ 82 ] In this case, the Remedy and Charter decisions were both published. They have rebuked the actions of the RCMP. The Remedy decision stayed the charges against the Applicant.

This has attenuated but, in my view, not completely obviated, the need for public vindication with respect to the very serious infringement of the Applicant’s s. 7 Charter right which occurred. [ 83 ] The conduct of the RCMP officers was tantamount to a solicitation of a breach of solicitor/client privilege after it was asserted by Mr. David, on the Applicant’s behalf. This occurred not once, but repeatedly, over a period of years. As has been earlier noted, Mr.

David was in an extremely vulnerable position, and, in the end, he succumbed to the inducement that he was offered. [ 84 ] But for countervailing factors which render a damage award inappropriate or unjust in this case, I would have concluded that a damage award of $7,500.00 should be provided to the Applicant to address the object of vindication. D. Are there countervailing factors that render a damages award inappropriate or unjust? [ 85 ] Yes, there are. [ 86 ] There has been no evidence led as to how much of the evidence obtained by the RCMP with respect to Mr.

Rudolph were the fruits of an ordinary police investigation, and/or whether they were led to any of the Complainants by information obtained from Mr. David. It is certainly evident that the officers spoke with or had access to information provided by investors, in some cases, literally years before obtaining Mr. David’s statement ( Cameron affidavit, Exhibit “1”, pp. 10-11, 16-19 ).

This included allegations in some civil actions which had been launched against the Applicant and/or his associates. [ 87 ] If any of these investors ever received an explanation of what actually happened to their money after they provided it to the Applicant, Mr. Mills, and/or Canglobe, that fact is not evident upon the basis of any of the materials with which the Court has been provided. Yet the impact of losses of this magnitude has been not only multi-faceted, but profound. [ 88 ] Reference to some of these losses may be found in the NSSEC’s decision.

For example, that decision referenced an individual (AB), who described himself as devastated with respect to the monies which he says that he provided to the Applicant. There was a huge effect on his wife (they are since divorced) and his children. The indebtedness he incurred to raise the money that was provided to the Applicant endangered his ability to provide for his children, and to assist his grandchildren.

Originally hoping to retire at age 60, he said that he is now 70 years old with no prospects of retirement in sight. ( NSSEC decision, para. 29 ) [ 89 ] Another individual (CD), even though he was the only person to recover the investment with which he provided the Applicant and/or his associates, described (to the Commission) the high level of embarrassment and difficulty posed by being bereft of the funds.

It also caused a great deal of stress and impacted upon his ability to fund his child's education. ( NSSEC decision, para. 42 ) [ 90 ] EF described how she lost her investment money, and ended up stuck with the $100,000.00 mortgage to the TD Bank with which she had raised it. She was emotional when describing what these losses meant to her, and how much she has had to pay in order to service the amount borrowed.

She told the Commission that she has lost her home, now lives with her sister, and that her self-confidence is destroyed. ( NSSEC decision, para. 59 ) [ 91 ] GH told the Commission that he had planned to buy a summer home. Instead, he and his wife took out a mortgage in 2006 in order to raise the funds which he said that he had entrusted to the Applicant. The couple has had to live a much reduced lifestyle

compared to the one which they had planned, and can expect more of the same on a go forward basis. He too has seen his self- confidence destroyed, and has had to witness the impact that this has had upon his wife's health. [ 92 ] IJ is GH's wife. She told the Commission that they had been married for 50 years. She had been a registered nurse for over 27 years and had looked forward to retirement, so she could spend time with her grandchildren. She notified her employer that she would be retiring. Then she discovered that the couple would not be getting their money back from the Applicant.

As a result she needed to keep working. She was no longer able to get her job back. She said that she now works part-time in the same hospital department that she had (prior to retirement) notwithstanding the fact that she has health issues affecting her heart. She feels that these health issues were caused by the stress of what she and GH have endured. ( NSSEC decision, para. 77 ) [ 93 ] KL testified (also emotionally) as to what he and his wife had to endure when their monies were taken. He said he felt extreme guilt and remorse because he had "pushed his wife into it".

He had to accept a nine-month posting overseas in order to recover from the loss. ( NSSEC decision, para. 102 ) [ 94 ] WX said that she had sustained losses which caused her to go from what she considered to be a good lifestyle to a terrible one. She had been a 43-year-old single parent with a very young child and was left with no income or financial support. She had to sell jewelry and personal effects in order to get by.

She said that although she had "moved on" and was resilient, she was left with feelings of anger with respect to what was done to her and others. ( NSSEC decision, para. 154 ) [ 95 ] The above are just some of the examples mentioned in the NSSEC decision. The depredations ascribed to the Applicant, in concert with Mr. Mills and CanGlobe, are literally horrific. The loss of the funds provided to Mr. Rudolph and his associates appear to have wreaked havoc upon the lives of many investors, all but destroying some.

The stay of the criminal charges, although necessary as a result of the egregious breach of the Applicant's s. 7 Charter rights during the course of the police investigation, also means that these individuals will not receive any explanation whatsoever for their losses. They certainly do not appear to have received one from the Applicant or Mr. Mills. [ 96 ] It also appears likely that these investors will never see anybody brought to justice with respect to what has happened to them. Most will have to work well into the future to repay or replace the money that they had borrowed.

Some will have to work for the rest of their lives.

Almost none of them will ever attain the lifestyle to which they had aspired, and for which they had previously worked so hard. [ 97 ] The Applicant, pursuant to s. 24(1) of the Charter : "...may apply to a Court ...to obtain such remedy as a Court considers appropriate and just in the circumstances." [ 98 ] The Respondents argue: Without hyperbole, we submit it would shock the conscience of the community for the Court to order monetary damages to the Applicant stemming from the Charter breach in question and the subsequent stayed prosecution. ( Respondent's brief para. 29 ) [ 99 ] At the very least, such losses, never explained to the investors by the Applicant, with the former left without the prospect of anyone being held accountable for what happened to them, are significant countervailing factors.

I conclude that it would be extremely inappropriate to award any form of monetary compensation to the Applicant in these circumstances. [ 100 ] In some cases, a stay of criminal charges affords a complete and appropriate remedy. This is one such case. E. What (if any) is the appropriate quantum of damages in the circumstances? [ 101 ] The question has been answered. It would be inappropriate to award any quantum of damages to the Applicant in the case at bar. Conclusion [ 102 ] The Application is dismissed. Costs [ 103 ] The Respondents shall receive their costs in one bill.

If the parties are unable to agree as to quantum, I will accept written submissions within 30 days. Gabriel, J.