A-286-74
In re Combines Investigation Act and in re an
inquiry relating to the production, manufacture,
purchase, barter, sale, storage, rental, transporta
tion and supply of crude oil, petroleum, refined
petroleum products and related products
Court of Appeal, Jackett C.J., Thurlow, Pratte,
Urie and Ryan JJ.—Ottawa, February 13 and 14,
1975.
Judicial review—Combines—Investigation of corporation—
Seeking order for access to all corporate documents—Order
refused—Combines Investigation Act, R.S.C. 1970, c. C-23, ss.
5, 10, 12, 16 and 17—Federal Court Act, s. 28.
The Director of Investigation and Research under the Com
bines Investigation Act launched an inquiry into the produc
tion, manufacture, purchase, barter, sale, storage, rental, trans
portation and supply of crude oil, petroleum, refined petroleum
products and related products. He sought an order directing
police to give him access to all documents in the premises of
Shell Canada Limited. The latter contested the Director's
authority under the Act to examine, copy or take away from its
premises certain documents that would be subject to solicitor-
client privilege, if tendered as evidence in Court. The applica
tion was dismissed by Hughes J. of the High Court (Ontario)
(sitting under section 10(5) of the Act) who followed Re
Director of Investigation and Research and Canada Safeway
Ltd. (1972) 26 D.L.R. (3d) 745 and distinguished R. v. Colvin
[1970] 3 O.R. 612. The Director brought a section 28 applica
tion to set aside the decision of Hughes J.
Held, the application should be dismissed. The Court had the
jurisdiction to hear the application, and the Court, which was
not bound by the decision followed by Hughes J. supra, had to
decide whether his decision was wrong on one of the grounds
set out in section 28(1) of the Federal Court Act. Fact-finding
powers in the widest terms were conferred on the Director
under section 5 et seq. of the Combines Investigation Act, but
section 10 of the Act revealed no intention of undermining the
solicitor-client relationship of confidentiality as to bona fide
communications that made necessary the solicitor-client privi
lege in connection with the giving of evidence in the Courts.
The privilege would be breached just as clearly by the compul
sory form of pre-prosecution discovery envisaged by the Com
bines Investigation Act as it would by evidence in Court or by
judicial discovery. The privilege applied to the communications
between the respondent corporation and its salaried lawyers, as
it would in the case of communications between the respondent
and general practitioners of law.
Commonwealth of Puerto Rico v. Hernandez [1975] 1
S.C.R. 228 affirming [1973] F.C. 1206, applied. Cromp-
ton (Alfred) Amusement Machines Limited v. Customs
and Excise Commissioners [1974] A.C. 405; Bell v. Smith
[1968] S.C.R. 664; George Wimpey & Co. Ld. v.
B.O.A.C. [1955] A.C. 169; and The King v. Jeu Jang How
(1919) 59 S.C.R. 175, discussed.
JUDICIAL review.
COUNSEL:
E. Sexton for applicant.
J. J. Robinette, Q.C., and T. G. Heintzman
for respondent.
SOLICITORS:
MacKinnon, McTaggart, Toronto, for appli
cant.
McCarthy & McCarthy, Toronto, for
respondent.
The following are the reasons for judgment
delivered orally in English by
JACKETT C.J.: This is a section 28' application
to set aside a decision of Mr. Justice Hughes, a
judge of the High Court of Ontario, made on
September 18, 1974, dismissing an application by
the Director of Investigation and Research under
the Combines Investigation Act for an order under
section 10(5) of that Act directing a police officer
or constable to take steps to give the Director or
his representative access to all documents on the
premises of Shell Canada Limited (hereinafter
referred to as "Shell").
' Section 28(1) of the Federal Court Act reads as follows:
28. (1) Notwithstanding section 18 or the provisions of
any other Act, the Court of Appeal has jurisdiction to hear
and determine an application to review and set aside a
decision or order, other than a decision or order of an
administrative nature not required by law to be made on a
judicial or quasi-judicial basis, made by or in the course of
proceedings before a federal board, commission or other
tribunal, upon the ground that the board, commission or
tribunal
(a) failed to observe a principle of natural justice or
otherwise acted beyond or refused to exercise its
jurisdiction;
(b) erred in law in making its decision or order, whether
or not the error appears on the face of the record; or
(c) based its decision or order on an erroneous finding of
fact that it made in a perverse or capricious manner or
without regard for the material before it.
To appreciate the issue raised by the section 28
application it is necessary to review briefly some of
the features of the Combines Investigation Act.
Part V of the Act creates certain "Offences in
Relation to Trade". Parts I and II provide "machi-
nery" and procedure for inquiring into and report
ing on the possible commission of such offences.
Other parts of the Act provide for prosecutions
and other remedies. The inquiry and reporting
provisions provide inter alia for
(a) the Director and his staff, who in certain
circumstances are empowered or required to
make "inquiry" into alleged offences (section 5
et seq.);
(b) the Restrictive Trade Practices Commis
sion, to whom the Director, in certain circum
stances, may submit "a statement of the evi
dence obtained in the inquiry", whereupon the
Commission, after hearing argument, considers
the Director's statement "together with such
further or other evidence or material as the
Commission considers advisable" and makes a
report to the Minister of Consumer and Corpo
rate Affairs in which it reviews the evidence and
material, appraises the effect on the public in
terest of arrangements and practices disclosed in
the evidence and makes recommendations as to
the application of remedies (section 16 et seq.);
and
(c) publication of the report by the Minister,
except in certain defined circumstances, within
thirty days after receipt of it by him.
The problem in this matter arose in the course
of an inquiry by the Director when he was in the
course of gathering evidence in the manner pro
vided by section 10 of the Act, which reads as
follows:
10. (1) Subject to subsection (3), in any inquiry under this
Act the Director or any representative authorized by him may
enter any premises on which the Director believes there may be
evidence relevant to the matters being inquired into and may
examine any thing on the premises and may copy or take away
for further examination or copying any book, paper, record or
other document that in the opinion of the Director or his
authorized representative, as the case may be, may afford such
evidence.
(2) Every person who is in possession or control of any
premises or things mentioned in subsection (1) shall permit the
Director or his authorized representative to enter the premises,
to examine any thing on the premises and to copy or take away
any document on the premises.
(3) Before exercising the power conferred by subsection (1),
the Director or his representative shall produce a certificate
from a member of the Commission, which may be granted on
the ex parte application of the Director, authorizing the exer
cise of such power.
(4) Where any document is taken away under this section
for examination or copying, the original or a copy thereof shall
be delivered to the custody from which the original came within
forty days after it is taken away or within such later time as
may be directed by the Commission for cause or agreed to by
the person from whom it was obtained.
(5) When the Director or his authorized representative
acting under this section is refused admission or access to
premises or any thing thereon or when the Director has reason
able grounds for believing that such admission or access will be
refused, a judge of a superior or county court on the ex parte
application of the Director may by order direct a police officer
or constable to take such steps as to the judge seem necessary
to give the Director or his authorized representative such
admission or access.
During conferences between officers represent
ing the Director and officers representing Shell, it
became apparent that Shell would not accept it
that section 10 authorized the Director to examine,
copy or take away from its premises certain docu
ments that would be subject to solicitor-client
privilege if tendered as evidence in Court. The
Director thereupon made the application under
section 10(5) to Mr. Justice Hughes already
referred to. Among other cases to which Mr. Jus
tice Hughes was referred was Regina v. Colvin'
where Osler J. of the High Court of Ontario said,
at page 617, on an application to quash a search
warrant issued under the Criminal Code concern
ing a solicitor's office:
Finally, the question of solicitor-client privilege is, in this
connection, a troublesome one. On the one hand, no authority
should be given carte blanche to search through the files in a
solicitor's office in hopes of discovering material prepared for
the purpose of advising the client in the normal and legitimate
course of professional practice. The privilege, however, is exclu
sively that of the client and does not extend to correspondence,
memoranda or documents prepared for the purpose of assisting
a client to commit a crime nor to material in no way related to
the giving of proper advice but stored with the solicitor purely
for the purpose of avoiding seizure in the hands of the client.
z [1970] 3 O.R. 612.
There can be no sure way of classifying the various types of
material in advance and, in any event, it must be remembered
that the rule is a rule of evidence, not a rule of property. I
would not be prepared, therefore, to quash a warrant respecting
material which there were reasonable grounds to believe might
afford evidence with respect to the commission of an offence
simply because the possibility existed that such material might
be covered by the solicitor-client privilege. The only way, as I
see it, in which the privilege can be asserted is by way of
objection to the introduction of any allegedly privileged ma
terial in evidence at the appropriate time.
While the general statement that there is no privilege with
respect to criminal proceedings cannot, in my view, be support
ed, the privilege itself must, as I have stated, be confined to the
evidentiary use of the material claimed to be protected.
Mr. Justice Hughes was also referred to Re Direc
tor of Investigation and Research and Canada
Safeway Limited' where Munroe J. of the British
Columbia Supreme Court disposed of an applica
tion under section 10(5) of the Combines Investi
gation Act, in part, as follows:
This application raises a question of importance, namely,
does s. 10 of the Combines Investigation Act abrogate the
common law solicitor-and-client privilege, a privilege estab
lished three centuries ago upon grounds of public policy
designed to ensure that members of the public may receive the
benefit of legal assistance uninhibited by fear of any breach of
their confidence. That rule as to the non-production of com
munications between solicitor and client says that where (as
here) there has been no waiver by the client and no suggestion
is made of fraud, crime, evasion or civil wrong on his part, the
client cannot be compelled and the lawyer will not be allowed
without the consent of the client to disclose oral or documen
tary communications passing between them in professional
confidence, whether or not litigation is pending: Susan Hosiery
Ltd. v. M.N.R., [1969] 2 Ex.C.R. 27, [1969] C.T.C. 353. Here
the authorized representatives of the Director, after obtaining a
certificate from a member of the Restrictive Trade Practices
Commission, have entered the premises of the respondent and
claim to be entitled to examine and to copy or take away for
further examination or copying all books, papers, records and
other documents of the respondent including communications
between the respondent and its solicitors within the ordinary
scope of and for the purposes of professional employment of the
latter, if in their opinion they are relevant to their inquiry. The
respondent submits that neither the Director nor any repre
sentative of his is entitled to access to documents which are
privileged as aforesaid, but otherwise raises no objection to the
Director and his representatives being on its said premises and
conducting their inquiry as they see fit.
3 (1972) 26 D.L.R. (3d) 745 at page 746.
The right to enter upon private premises and to examine
private and privileged documents is, of course, a derogation
from common law rights and therefore requires legislation
expressed with irresistible clarity. Does s. 10 do that? Counsel
for the applicant says that it does. He submits that the plain
and literal meaning of s. 10 permits of no exception such as
that contended for by the respondent. He points out, rightly,
that this is an administrative inquiry conducted under the
provisions of the Act having only three possible results, namely,
discontinuance of the investigation (s. 14) or a reference to the
Attorney-General of Canada (s. 15) or a submission to the
Commission (s. 18), none of which could amount to a decision
affecting any rights of the respondent: Guay v. Lafleur (1964),
47 D.L.R. (2d) 226, [1965] S.C.R. 12. The appropriate time to
raise the question of privilege will occur, he submits, when and
if the Director seeks to tender the questioned documents as
evidence at a trial or other judicial proceeding.
On the other hand, counsel for the respondent draws atten
tion to the use of the word "evidence" which appears twice in s.
10(1) and says that indicates that the right to examine and
copy is limited to documents that may afford evidence (admis-
sible in a judicial proceeding) relevant to the matters under
inquiry. To hold otherwise, he submits, is to interpret s. 10 as
authorizing a fishing expedition "in the hope of finding some
thing therein that might in the sole judgment of those searching
have evidentiary value relevant to the inquiry or possible future
charges", to paraphrase the words of Hall, C.J.Q.B. (as he then
was), in Shumiatcher v. A.-G. Sask. (1960), 129 C.C.C. 270 at
p. 272, 33 W.W.R. 134, 34 C.R. 154. The words of Ford, J.A.,
in Imperial Tobacco Sales Co. v. A.-G. Alta., [1941] 2 D.L.R.
673 at pp. 678-9, 76 C.C.C. 84, [1941] 1 W.W.R. 401, are also
apposite. He said:
It is, in my opinion, not intended by the search warrant
provisions of the Criminal Code that it should be left to
police officers to select, from the "minutes of meeting,
correspondence, documents and other records" or "the books
and records pertaining to the affairs" of an individual or
corporation, those or parts thereof which may afford evi
dence of the commission of such an offence as that created
by the Combines Investigation Act and which alone can be
the subject of the search and seizure. Indeed it seems to me
to take anything which may not tend to afford evidence of
the commission of the offence would amount to a trespass.
In Attorney-General v. Beech (1898), 67 L.J.Q.B. 585 at p.
590, it was said by Chitty, L.J. that
It is unquestionably within the competence of Parliament ...
to modify or abrogate for the purpose of the Act any rule of
law or equity which otherwise would be applicable to the
subject-matter. Whether it has done so or not must always be
a question of the true construction of the particular statute
under consideration. The right, and indeed the only, method
of interpretation is to ascertain the intention of the Legisla
ture from the language and provisions of the Act itself. In
construing a statute regard must be had to the ordinary rules
of law applicable to the subject-matter, and these rules must
prevail except in so far as the statute shews that they are to
be disregarded; and the burden of showing that they are to be
disregarded rests upon those who seek to maintain that
proposition.
There is, in addition, ample authority for the proposition that
the benefit of doubt should always go to sustain solicitor-and-
client privilege: Re a Solicitor (1962), 36 D.L.R. (2d) 594, 40
W.W.R. 270, [ 1963] C.T.C. 1.
Applying such principles, I have reached the conclusions that
since illegally obtained evidence is not for that reason inadmiss
ible, the respondent is right in claiming the privilege at this
time, and further that s. 10 of the Combines Investigation Act
does not either in express terms or by reasonable implication
exclude the doctrine of solicitor-client privilege. That doctrine
is not to be infringed, much less destroyed, unless the clear
wording and intent of s. 10 requires such construction. In the
result, while the Director and his authorized representatives
may enter the premises of the respondent to perform their
duties under s. 10 of the Act, they may not have access to
documents upon which a solicitor-client privilege exists. In the
event of disagreement between the parties as to which docu
ments, if any, are so privileged and the procedure to be
followed in determining such issue, counsel may speak to the
matter at any convenient time.
Mr. Justice Hughes disposed of the application to
him in this matter as follows:
The application is dismissed with costs.
In the absence of grounds for distinguishing the judgment of
Munroe J. in Director of Investigation v. Canada Safeway
[1972] 3 W.W.R. 547 from the application before me, which is
conceded, I consider myself bound to follow it more especially
as the interpretation of the same section of the same federal
statute is in issue.
What fell from Osler J. in Regina v. Colvin [1970] 3 O.R.
612 as to solicitor and client privilege in an unrelated matter
was obiter and the fact that I agree with the substance of what
was there said and might have taken a different view from
Munroe J. if it had fallen to me to decide the application before
him is nihil ad rem.
The section 28 application is to have that decision
set aside.
The Director, by his memorandum in this Court,
states the issues on this application as follows:
6. Was Mr. Justice Hughes correct in holding that he was
bound by the decision of Munroe, J. in the Safeway case?
7. Is Section 10 of the Combines Investigation Act sufficiently
broad so as to allow the Director access to all documents and
therefore make solicitor-client privilege inapplicable?
8. In the event that it is decided that the wording of Section 10
is not sufficiently broad so as to exclude solicitor-client privi
lege, then it must be decided whether the respondent is prema-
ture in asserting its claim for solicitor-client privilege at the
stage of the Director's Inquiry under the Combines Investiga
tion Act.
Shell, in effect, by its memorandum, states the
same issues with the addition of the following:
8. Does an application under section 28 of the Federal Court
Act lie from an order made by a Judge of a Superior Court of a
Province under section 10 of the Combines Investigation Act?
With reference to the question as to the jurisdic
tion of this Court in this matter, I am of opinion
that the point taken by Shell is, having regard to
the decision of the Supreme Court of Canada in
Commonwealth of Puerto Rico v. Hernandez, 4 not
open in this Court. 5
Assuming jurisdiction in this Court, the question
as to whether Mr. Justice Hughes should have
regarded himself as bound by Mr. Justice
Munroe's decision does not, at this stage, seem to
be a question that has to be decided. What this
Court has to decide is whether Mr. Justice
Hughes' decision was wrong on one of the grounds
set out in section 28 (1) and should, therefore, be
set aside and this Court is not bound by Mr.
Justice Munroe's decision in deciding that
question.
In so far as the question as to whether Shell is
premature in raising the question of solicitor-client
privilege at this stage is concerned, as it seems to
me, the question does not arise. What has to be
decided by this Court is whether section 10
authorizes examination, and making copies, of
documents that are subject to solicitor-client privi
lege when tendered as evidence in Court. If it does,
4 [1975] 1 S.C.R. 228, per Pigeon J. at pages 236-239.
The question whether the decision attacked is an adminis
trative decision not required by law to be made on a judicial or
quasi-judicial basis (section 28(1)) was not raised and, having
regard to my conclusion with regard to this application, need
not be discussed. A further question did arise during the course
of argument as to whether the decision attacked was a decision
of the Supreme Court of Ontario or a decision of Mr. Justice
Hughes acting as persona designata under section 10(5) of the
Combines Investigation Act. While the application was wrongly
entitled "In the Supreme Court of Ontario" and was wrongly
entered as an order of that Court, I think it is clear that he
made the order as persona designata under section 10(5).
the decision attacked must be set aside and the
matter referred back to Mr. Justice Hughes for
appropriate action under section 10(5). If it does
not, this section 28 application must be dismissed.
In the former event, it may be that the solicitor-
client privilege may still be raised in some Court at
a later stage but that is not a matter for this Court
to decide on this application.
What should be noted in deciding this section 28
application is that it raises quite simply the ques
tion as to whether section 10 overrides any duty of
confidentiality owed by a solicitor to his client in
so far as examination and making copies of docu
ments under that section is concerned. Either the
solicitor's duty of confidentiality to his client can
never be raised against action under section 10 or
this section 28 application must be dismissed.
(There is no contention that there is a claim of
confidentiality in respect of documents to which
the solicitor-client privilege would not apply if it
were raised in a court of law and there is no
question raised as to the procedure that should be
followed if there were any such contention.)
It should also be noted that it is common ground
that the principles applicable are the same in this
case, where the communications were between
Shell and its salaried lawyers, as they would have
been had the communications been between Shell
and a firm of general legal practitioners. Compare
Crompton Limited v. Customs and Excise
Commissioners. 6
It is not necessary in these Reasons to empha
size the importance placed by Parliament on the
functions imposed by Parliament on the Director.
It is obvious that the detection and the discourage
ment of the offences created by Part V of the
Combines Investigation Act are of the greatest
public importance and that it was intended to
confer on the Director almost unlimited powers for
seeking out the relevant facts subject only to essen
tial safeguards for other public interests.' This
appears not only from section 10, which I have
quoted, but from such other provisions as section
s [1974] A.C. 405, at pages 430-1.
'Not only can the section 10 powers not be exercised without
a certificate from a member of the Commission (section 10(3))
12 and section 17 of the Combines Investigation
Act.
Neither is it necessary to repeat here the princi
ples of public policy upon which the privilege of
solicitor-client privilege is based.' It is sufficient to
say, in so far as this matter is concerned, that it
has been recognized from very early times that the
protection, civil and criminal, afforded to the
individual' by our law is dependent upon his
having the aid and guidance of those skilled in the
law untrammelled by any apprehension that the
full and frank disclosure by him of all his facts and
thoughts to his legal adviser might somehow
become available to third persons so as to be used
against him.
What has to be decided in this case is whether
Parliament, by conferring on the Director fact
finding powers in the widest possible terms, intend
ed to undermine the solicitor-client relationship of
confidentiality that made necessary the solicitor-
client privilege in connection with the giving of
evidence in the Courts. In my view, that question
must be answered in the negative.
There must always be cases where the Courts,
faced with unqualified language used by Parlia
ment to accomplish some important public objec
tive must decide whether it was intended by Par
liament, by such language, to make a fundamental
change in some law or institution to which no
reference is explicitly made. (Compare George
Wimpey & Co. Ld. v. B.O.A.C. 10 and The King v.
Jeu Jang How. 11) In my view, this is such a case.
but no force may be used except pursuant to a judicial direction
(section 10(5)). I regard both of these safeguards as having
been provided against any illegal, unnecessary or improper
invasion of the property or constitutional rights of third parties.
$ For a recent reference to this privilege in the Supreme
Court of Canada, see Bell v. Smith, [1968] S.C.R. 664, per
Spence J., giving the judgment of the Court at page 671.
In this context, I do not think artificial lines should be
drawn between individuals as such and individuals exercising
rights through corporations.
[1955] A.C. 169, per Lord Reid, at page 191.
" (1919) 59 S.C.R. 175, per Duff J. at page 179.
I fully realize that the protection of the confi
dentiality of the solicitor-client relationship has,
heretofore, manifested itself mainly, if not entirely,
in the privilege afforded to the client against the
compulsory revelation of communications between
solicitor and client 12 in the giving of evidence in
Court or in the judicial process of discovery. In my
view, however, this privilege is a mere manifesta
tion of a fundamental principle upon which our
judicial system is based, which principle would be
breached just as clearly, and with equal injury to
our judicial system, by the compulsory form of
pre-prosecution discovery envisaged by the Com
bines Investigation Act as it would be by evidence
in Court or by judicial discovery. 13
Indeed, it should not be overlooked that one of
the fundamental aspects of the scheme of the
Combines Investigation Act is the publication of
the Restrictive Trade Practice Commission's
reports containing, as they are required by law to
do, summaries of the evidence put before the
Commission by the Director. I have no doubt that
such publication, or the threat of it, is just as
potent a weapon against the trade offences in Part
V of the Combines Investigation Act as is their
prosecution or the threat of it. The result of con
struing section 10 of the Combines Investigation
Act as putting aside any protection of the solicitor-
client relationship of confidentiality would, there
fore, undermine that relationship even more effec
tively than abolishing the privilege against giving
evidence in open court.
12 There is, of course, another branch of the privilege (the
lawyer's brief) which does not require special mention here.
19 Compare Slavutych v. Board of Governors of the Universi
ty of Alberta (1975) 3 N.R. 587, reversing (1974) 41 D.L.R.
(3d) 71 for an application of a confidential relationship to
support something other than a privilege of an evidentiary
character.
It must not be forgotten that all that is being
discussed in this case are bona fide communica
tions between solicitor and client. Any conspiracy
between a solicitor and some other person to
commit a crime and any use of a solicitor-client
relationship to cloak relevant evidence or facts
from discovery falls completely outside the princi
ple of confidentiality protected by the law.
In my view, the section 28 application should be
dismissed.
* * *
The following are the reasons for judgment
delivered orally in English by
THURLOW J.: I agree that the application fails
and should be dismissed for the reasons given by
the Chief Justice. I wish to add two comments of
my own.
First, it seems to me that the presence of subsec
tion (5) in section 10 of the Combines Investiga
tion Act shows that it was not intended that sub
section 10(1) should be so broadly interpreted as
to override and nullify so fundamental a right as
that to the confidentiality of communications be
tween a client and his solicitor of the kind which
are recognized as being privileged.
Second, it appears to me that the confidential
character of such communications, whether oral or
in writing, comes into existence at the time when
the communications are made. As the right to
protection for the confidence, commonly referred
to as legal professional privilege, is not dependent
on there being litigation in progress or even in
contemplation at the time the communications
take place, it seems to me that the right to have
the communications protected must also arise at
that time and be capable of being asserted on any
later occasion when the confidence may be in
jeopardy at the hands of anyone purporting to
exercise the authority of the law.
* * *
The following are the reasons for judgment
delivered orally in English by
RYAN J.: I agree that the application should be
dismissed for the reasons stated by Chief Justice
Jackett. I would also associate myself with the
comments of my brother Thurlow J.
* * *
PRATTE and URIE JJ. concurred.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.