The BC Court of Appeal has ruled against an application by the Special Prosecutor to overturn a BC Supreme Court decision regarding the appearance of a secret witness in the case of three government aides facing corruption charges connected to the $1 billion sale of BC Rail.
The ruling leaves the entire case in limbo, as Special Prosecutor Bill Berardino hinted before the Appeal Court decision that the Crown may not be able to proceed with the prosecution if the special witness could not give evidence.
In a split decision, two of three BC Court of Appeal justices have upheld a ruling by BC Supreme Court Justice Elizabeth Bennett that defence lawyers have the right to be present in court to hear information on why the Special Prosecutor wants a secret witness to testify against David Basi, Bob Virk and Aneal Basi.
Berardino has previously said the Crown would not breach informant privilege, opening the possibility of dropping the case if the Appeal Court ruled in favour of the defence, as has now happened.
In an interview, Virk's lawyer Kevin McCullough said that if Berardino appeals the BC Court of Appeal decision significant delay is inevitable.
"If the Special Prosecutor appeals this matter to the Supreme Court of Canada it's going to impact and delay this case," McCullough said. "We are hoping that doesn't happen."
"Our clients are anxious to get on - they've had their lives on hold for four and a half years and any further delay is something that neither counsel nor their clients are looking forward to. I hope it doesn't happen," he said.
Berardino has 10 days to file an appeal of the new ruling to the Supreme Court of Canada. He has not yet responded to requests for an interview.
In the Court of Appeal ruling, the justices outline the circumstances:: "The issue on this appeal is whether Madam Justice Bennett erred in ordering that defence counsel may be present at an in camera hearing to determine whether informer privilege exists. The issue arose in pre-trial proceedings on an application for disclosure by the defence...."
"The Crown applied to call evidence to establish informer privilege in camera, excluding not only the public but the accused and their counsel as well...."
"On 7 December 2007 the presiding judge made this ruling:
 Therefore, again for the reasons given yesterday and today, the application pursuant to s. 37 of the Evidence Act is dismissed. The in camera hearing will occur with defence counsel present.
The defence counsel and court staff present are bound by the following Court order:
That he or she will not disclose anything heard in the in camera hearing to anyone, including his or her client, other members of his or her law firm, their family or any members of the public without further order of this Court. Failure to comply with this order will result in a contempt of court hearing.
Written undertakings in similar language are also required to be filed by counsel. "
Chief Justice Lance Finch and Justice Ian Donald upheld Bennett's ruling, while Justice Catherine Ryan.
Finch wrote in support of the original ruling that:
" On balance, I respectfully agree with the interpretation of defence counsel as to the nature and effect of the order pronounced on 7 December 2007. This order was made before the in camera hearing commenced. The judge made clear that she did not have information that would permit her to anticipate what might occur, nor to make an order authorizing, or prohibiting, disclosure.
 The judge cannot be taken to have precluded herself from conducting some part of the in camera hearing ex parte, if she considers that to be necessary. It is abundantly clear from everything the judge said in her reasons of 7 December 2007, and on her earlier rulings of 3 and 6 December 2007, that she fully understands the Court’s obligation to protect informer privilege. She has made a preliminary ruling that was within her discretion and that does not mandate disclosure of information that may tend to identify the informer. The terms of the order prohibiting disclosure of anything heard in camera, and the requirement for undertakings, appear to me to have been imposed from an abundance of caution.
 If I am wrong in my interpretation of the judge’s order, and it is properly to be considered an order for disclosure of confidential information, it was, on its terms, well within the discretion granted by s. 37. The Special Prosecutor said that an appeal lay against the judge’s order because it was made under s. 37(5). As mentioned earlier, that subsection gives the judge a discretion to balance the public interest in disclosure against the importance of the specified public interest. The judge was fully aware of the importance of informer privilege. She was also alive to the accused’s right to a fair trial.
 It appears to me to be inconsistent for the Special Prosecutor to assert on the one hand that the order was made under s. 37(5), for the purposes of supporting a right to appeal, and at the same time to deny the existence of any discretion in the judge to balance the competing interests.
 Finally, there are the provisions of s. 37.3 authorizing the judge to make any order necessary to protect the accused’s right to a fair trial.
 In my view, if the order of 7 December 2007 is an order for disclosure, it was within the judge’s discretion.
 In my respectful opinion, the trial judge has not made any order under s. 37(4.1), (5) or (6) from which an appeal may be taken. I consider that this appeal is premature, and that there is no right of appeal in respect of the order made on 7 December 2007.
 I would dismiss the appeal on the ground that this Court has no jurisdiction to entertain it."
More on this important new development as it becomes available.
NOTE: A shorter version of this story is in Friday's 24 hours newspaper.