A-1153-83
Minister of National Revenue, Canada, Girard
LeBlond, Director, Special Investigations Division
of the Department of National Revenue, Taxation
and Raymond Galimi, Special Investigator under
the Income Tax Act (Appellants)
v.
Kruger Inc., Gene H. Kruger and Joseph Kruger
II (Respondents)
and
Attorney General for Canada, Kol Inc., Ledair
Inc., Coopers & Lybrand, Chartered Accountants,
Villor Consultants Inc., Victor Gold and Co.,
Clarkson, Tetrault, Lawyers, Lavery, O'Brien,
Lawyers and Phillips, Vineberg, Lawyers (Mis -
en-cause)
Court of Appeal, Pratte, Ryan and Marceau JJ.—
Montreal, May 30 and 31; Ottawa, August 30,
1984.
Constitutional law — Charter of Rights — Search or sei
zure — Trial Judge quashing authorization to search and
seize under s. 231(4) of Income Tax Act on ground authoriza
tion violated s. 8 of Charter — Authorization permitting
search for and seizure of evidence as to violation of any
provision of Act — S. 8 guarantee of right to be secure against
unreasonable search and seizure more than prohibition against
unreasonable searches and seizures — S. 8 offended by power
of search and seizure so wide — Individual without protection
against unreasonable searches and seizures — Statute autho
rizing searches without warrants offending s. 8 — S. 231(4)
violating s. 8 of Charter in giving general power of search and
seizure simply because offence committed under Act —
American precedents on Fourth Amendment to United States
Constitution not reliable, since second clause in Fourth
Amendment having no counterpart in s. 8 — S. 1 of Charter
not limiting s. 8 guarantee so as to validate s. 231(4) because
Minister's power not "demonstrably justified in a free and
democratic society" — Canadian Charter of Rights and Free
doms, being Part I of the Constitution Act, 1982, Schedule B,
Canada Act 1982, 1982, c. 11 (U.K.), ss. 1, 8 — Income Tax
Act, S.C. 1970-71-72, c. 63, s. 231(4),(5).
Income tax — Seizures — Minister's authorization permit
ting search for and seizure of evidence as to violation of any
provision of the Act not exceeding power under s. 231(4) of Act
— In re Collavino Brothers Construction Company Limited
wherein s. 231(4) held to authorize search for evidence of
violation of provisions reasonably believed to have been con
travened, not followed — Proper interpretation of s. 231(4)
being that Minister may authorize search for and seizure of
evidence relating to any violation of Act once having reason
able grounds to believe violation of Act committed — Income
Tax Act, S.C. 1970-71-72, c. 63, ss. 231(4),(5), 239 — Income
Tax Regulations, C.R.C., c. 945, s. 900(5) (as am. by SOR/80-
837, s. 1).
Judicial review — Prerogative writs — Certiorari — Minis
ter's authorization under s. 231(4) of Income Tax Act subject
to challenge by certiorari — Exercise of Minister's power
under s. 231(4) purely administrative act — Authorization
cannot be challenged for violation of principles of natural
justice or for lack of procedural fairness — Certiorari may
issue on other grounds such as lack of jurisdiction and error of
law on face of record irrespective of judicial or administrative
character of decision — Authorization subject to certiorari
notwithstanding not effective until approved by judge —
Attack on Minister's authorization not constituting collateral
or indirect attack on Judge's approval — Challenge to Minis
ter's authorization in spite of Judge's approval — Income Tax
Act, S.C. 1970-71-72, c. 63, s. 231(4),(5) — Federal Court
Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 18, 28.
This is an appeal from a Trial judgment quashing an
"authorization" to search and seize given pursuant to subsec
tion 231(4) of the Income Tax Act on the ground that the
authorization violated section 8 of the Charter. The search and
seizure were found to be unreasonable because they were not
limited to evidence relating to the particular offences allegedly
committed by the respondents. Subsection 231(4) provides that
where the Minister has reasonable and probable grounds to
believe that a violation of the Act has been committed, he may
with the approval of a judge of a superior court, authorize a
search for and seizure of evidence as to the violation of any
provision of the Act. The authorization was couched in the very
terms of subsection 231(4). The appellants say that the authori
zation could not be challenged by certiorari and that the
authorization was validly made pursuant to a valid statutory
provision. The appellants argue that the issuance of certiorari
was precluded because the exercise of the Minister's power
under subsection 231(4) is a purely administrative act which is
not subject to the rules of natural justice nor to those of
procedural fairness. Secondly, a minister's authorization under
subsection 231(4) cannot be attacked by certiorari because it is
devoid of any legal effect as long as it had not been approved by
a judge and does not "determine questions affecting the rights
of subjects". Finally, the appellants submit that an attack on
the authorization was an indirect attack on the Judge's approv
al which could not be challenged directly by certiorari. On the
second ground of appeal, the appellants argue that the authori
zation did not exceed the Minister's powers and that subsection
231(4) does not contravene section 8 of the Charter.
Held (Marceau J. dissenting): the appeal should be
dismissed.
Per Pratte J. (Ryan J. concurring): There is no merit in the
appellants' first contention that the authorization could not be
challenged by certiorari. The power of the Minister under
subsection 231(4) is purely administrative and the exercise of
that power is not subject to rules of procedural fairness. The
authorization cannot be challenged for violation of the princi
ples of natural justice or for lack of procedural fairness. It does
not follow that certiorari may never issue in respect of the
exercise of that power. It may issue on other grounds irrespec
tive of the judicial or administrative character of the decision,
namely lack of jurisdiction and error of law on the face of the
record.
Many precedents support the proposition that an order made
by an authority may be subject to certiorari in spite of the fact
that such an order does not take effect until confirmed or
approved by another authority.
The answer to the argument that a decision which cannot be
challenged directly by certiorari cannot be challenged indirect
ly is that the attack on the Minister's authorization does not
constitute a collateral or indirect attack on the Superior Court
Judge's approval. The respondents challenge the validity of the
authorization to search and seize. The authorization was
approved by a Superior Court Judge, not given by him. In
challenging the authorization given by the Minister on jurisdic
tional grounds, the respondents merely assert that in spite of
the approval and independent of it, the authorization is a
nullity because the Minister did not have the power to give it.
The authorization did not exceed the powers conferred on the
Minister by subsection 231(4). The respondents rely on In re
Collavino Brothers Construction Company Limited to support
the contention that subsection 231(4) does not empower the
Minister to authorize such a wide search, but merely to autho
rize a search for and seizure of evidence as to the violation of
those provisions which, according to the reasonable opinion of
the Minister, were contravened by the taxpayer. Both the
Ontario and Alberta Courts of Appeal have refused to follow
the Federal Court of Appeal decision in Collavino for good
reasons. The natural and only possible meaning of subsection
231(4) is that once the Minister has reasonable grounds to
believe that a violation of the Act has been committed, he may
authorize a search for and seizure of evidence relating not only
to that violation but also to the violation of Ray provision of the
Act. The decision in Collavino should not be followed.
Subsection 231(4) contravenes section 8 of the Charter in so
far as it confers on the Minister the power to authorize a
general search and seizure relating to violation of any of the
provisions of the Act where he has reasonable grounds to
believe that one offence has been committed. Although there is
a similarity between the language of section 8 and the first
clause of the Fourth Amendment to the United States Consti
tution, it would be dangerous to rely on American precedents
since the second clause of the Fourth Amendment, which has
no counterpart in the Charter, has greatly influenced American
decisions. Section 8 goes further than merely prohibiting unrea
sonable searches and seizures and guarantees the right to be
secure against unreasonable search and seizure. Section 8 will
be offended by a statute conferring on an authority so wide a
power of search and seizure that it leaves the individual without
any protection against unreasonable searches and seizures. A
statute authorizing searches without warrants offends section 8
because it deprives the individual of the protection that normal
ly results from the warrant requirement. Subsection 231(4)
does not contravene the Charter in so far as it gives the
Minister when he has valid grounds for believing that an
offence has been committed, the power to authorize a search
and seizure in respect of that offence. However, the fact that a
taxpayer has committed an offence under the Act does not
afford sufficient justification for the general power of search
and seizure conferred by subsection 231(4).
Section 1 of the Charter does not limit the right guaranteed
by section 8 so as to validate subsection 231(4) because the
power conferred on the Minister is not "demonstrably justified
in a free and democratic society".
Per Marceau J. (dissenting): The authorization did not vio
late section 8 of the Charter. Section 8 dictates a standard of
reasonableness which requires a balancing of the right of the
individual to privacy as opposed to the need that the laws of the
land be properly enforced.
"The right to be secure against" unreasonable searches and
seizures gives an individual the possibility of complaining not
only of the actual carrying out of an unreasonable search or
seizure but also of the mere fact that he is in danger of being
the subject of such an illegal invasion of his privacy. To
conform with the constitutional requirement, any statute
authorizing searches and seizures in certain circumstances must
provide for adequate protection against unreasonable ones; it
must subject the exercise of the power conferred to limitations
and conditions sufficient to constitute adequate safeguards. It
means that the possibilities of failures must not be so great and
fraught with consequences so deplorable as to outweigh the
social advantages that may be derived from the existence of the
power. A balancing involving many factors particular to each
statute will have to be made.
Section 1 does not affect the interpretation of section 8. An
"unreasonable" search or seizure cannot become `reasonable"
under section 1. It cannot be "justified in a free and democratic
society" to let the individual be subject to an unreasonable
search or seizure without giving him redress.
Although the authorization may give rise to one, it is not a
search and seizure. The assertion is that an authorization to
search and seize, issued in conformity with and in the terms of
subsection 231(4) of the Income Tax Act, contravenes the right
of the taxpayer to be secure against unreasonable search and
seizure, because the search and seizure so authorized may
extend to incriminating documents not related to the violations
known to have been committed by the taxpayer. The validity of
this general proposition must be verified by balancing the two
competing interests involved. All factors being considered, the
interest that may be served by the existence of the power,
ultimately the very integrity of the tax system, outweighs the
value the community as a whole may attach to the safeguard of
the privacy that an individual suspected of dishonesty may
expect in respect of his books, records and documents. The very
partial invasion of privacy is justified in the context in which it
is imposed. The remote possibilities of abuse, given the require
ment that a judge give his approval, are not so consequential
and socially unacceptable, so susceptible of causing irreparable
injury, that to avoid them the Minister should be deprived of a
tool that may be the only one available to enforce the law.
CASES JUDICIALLY CONSIDERED
APPLIED:
Nicholson v. Haldimand-Norfolk Regional Board of
Commissioners of Police, [1979] 1 S.C.R. 311; Mar-
tineau v. Matsqui Institution Disciplinary Board, [1980]
1 S.C.R. 602; In Re M.N.R. v. Paroian, Courey, Cohen
& Houston (1980), 80 DTC 6077 (Ont. C.A.); Royal
Craft Products Ltd. et al. v. The Queen (1979), 80 DTC
6143; [1980] CTC 97 (Alta. C.A.).
NOT FOLLOWED:
In re Collavino Brothers Construction Company Limited,
[1978] 2 F.C. 642; 78 DTC 6050 (C.A.).
REFERRED TO:
Goodman v. Rompkey et al., [1982] 1 S.C.R. 589; The
Minister of National Revenue v. Coopers and Lybrand,
[1979] 1 S.C.R. 495; 92 D.L.R. (3d) 1; Rex v. Electricity
Commissioners, [1924] 1 K.B. 171 (C.A.); Wilson v. The
Queen, [1983] 2 S.C.R. 594; [1984] 1 W.W.R. 481; R. v.
Rao (1984), 46 O.R. (2d) 80; 40 C.R. (3d) 1 (C.A.);
Equipements Rocbec Inc. et al. v. Minister of National
Revenue, [1982] 1 S.C.R. 605; 82 DTC 6174; Kelly
Douglas and Company Limited v. The Queen et al.
(1981), DTC 6036 (B.C.S.C.); Burnac Corporation Lim
ited, et al. v. Minister of National Revenue, [1978] 2
F.C. 269; [1977] CTC 593 (T.D.); Bathville Corp. Ltd.
et al. v. Atkinson et al. (1964), 64 DTC 5330 (Ont.
C.A.).
COUNSEL:
Wilfred Lefebvre, Q.C., Jacques Côté and
Carole Bonhomme for appellants.
Bruno J. Paieras, Q.C. and Yves Bériault for
respondent Kruger Inc.
Philip F. Vineberg, Q.C. for respondents Gene
H. Kruger and Joseph Kruger II.
SOLICITORS:
Deputy Attorney General of Canada for
appellants.
Paieras & Iezzoni, Montreal, for respondent
Kruger Inc.
Phillips & Vineberg, Montreal, for respond
ents Gene H. Kruger and Joseph Kruger II.
The following are the reasons for judgment
rendered in English by
PRATTE J.: This is an appeal from a judgment
of Mr. Justice Dubé of the Trial Division [[1984]
1 F.C. 120] quashing an "authorization" to search
and seize given pursuant to subsection 231(4) of
the Income Tax Act [R.S.C. 1952, c. 148 (as am.
by S.C. 1970-71-72, c. 63, s. 1)].'
The respondent Kruger Inc. is a Canadian cor
poration carrying on business as a paper manufac
turer; the respondent Gene H. Kruger is a director
and the Chairman of the Board of that corporation
' The text of subsections 231(4) and (5) reads as follows:
231... .
(4) Where the Minister has reasonable and probable
grounds to believe that a violation of this Act or a regulation
has been committed or is likely to be committed, he may,
with the approval of a judge of a superior or county court,
which approval the judge is hereby empowered to give on ex
parte application, authorize in writing any officer of the
Department of National Revenue, together with such mem
bers of the Royal Canadian Mounted Police or other peace
officers as he calls on to assist him and such other persons as
may be named therein, to enter and search, if necessary by
force, any building, receptacle or place for documents, books,
records, papers or things that may afford evidence as to the
violation of any provision of this Act or a regulation and to
seize and take away any such documents, books, records,
papers or things and retain them until they are produced in
any court proceedings.
(5) An application to a judge under subsection (4) shall be
supported by evidence on oath establishing the facts upon
which the application is based.
while the respondent Joseph Kruger II is one of its
directors.
On June 22, 1983, following a long audit of the
books of Kruger Inc., the appellant Raymond
Galimi, an officer of the Department of National
Revenue, swore an affidavit alleging facts on
which he based his belief that
(a) Gene H. Kruger and Joseph Kruger II had
evaded the payment of income tax by falsely
declaring themselves to be residents of Panama
between January 1, 1980, and December 31,
1981, contrary to section 239 of the Income Tax
Act; and
(b) Kruger Inc. had contravened section 239 of
the Income Tax Act by making false and decep
tive statements in its income tax return for the
year 1981, thereby permitting Gene H. Kruger
and Joseph Kruger II to evade income tax.
On July 8, 1983, on the basis of the facts alleged
in that affidavit, the appellant Gérard LeBlond,
Director of the Special Investigations Division of
the Department of National Revenue, Taxation,
acting pursuant to subsection 231(4) of the Act
and subsection 900(5) of the Income Tax Regula
tions [C.R.C., c. 945 (as am. by SOR/80-837)], 2
signed the "authorization" which was quashed by
the order of the Trial Division. That document
authorized named officers of the Department of
National Revenue, Taxation, to enter and search
(a) the business premises of Kruger Inc. and the
private residences of Gene H. Kruger and
Joseph Kruger II "for documents, books,
records, papers or things that may afford evi
dence as to the violation of any provision of the
Income Tax Act or a regulation and to seize and
2 Under that provision of the Regulations:
900... .
(5) The Director General, Compliance, the Director, Spe
cial Investigations Division, or the Chief of either the Judi
cial Processes Section or the Investigations Section of the
Special Investigations Division, of the Department of Na
tional Revenue, Taxation, may exercise the powers and
perform the duties of the Minister under subsections 150(2),
231(2), (3) and (4) and 244(4) of the Act.
take away any such documents, books, records,
papers or things and retain them until they are
produced in any court proceedings"; and
(b) the business premises of other named per
sons "for documents, books, records, papers or
things pertaining or relating to Kruger Inc.,
Gene H. Kruger and Joseph Kruger II, that may
afford evidence as to the violation of any provi
sion of the Income Tax Act or a regulation and
to seize and take away any such documents,
books, records, papers or things and retain them
until they are produced in any court proceed
ings."
On July 11, 1983, pursuant to an application
made by Mr. LeBlond and supported by Mr.
Galimi's affidavit, the Honourable Mr. Justice
Ducros of the Superior Court of the Province of
Quebec approved the authorization in the follow
ing terms:
After having considered the application made by the Direc
tor, Special Investigations Division, based on the affidavit of
Raymond Galimi, I hereby approve of the above authorization,
pursuant to subsection 231(4) of the Income Tax Act, which
approval is also indicated on the preceding page by my initials.
On July 14, 1983, officers of the Department of
National Revenue, acting pursuant to the authori
zation, seized and took away a great number of
documents. Following that seizure, the respondents
Kruger Inc., Gene H. Kruger and Joseph Kruger
II applied to the Trial Division for an order in the
nature of certiorari quashing the authorization
that the appellant LeBlond had signed pursuant to
subsection 231(4) of the Income Tax Act. That
application was granted by the Trial Judge on the
ground that the authorization in question violated
section 8 of the [Canadian Charter of Rights and
Freedoms, being Part I of the] Constitution Act,
1982 [Schedule B, Canada Act 1982, 1982, c. 11
(U.K.)] and authorized a search and a seizure
which were unreasonable in that they were not
limited to documents and things relating to the
particular offences allegedly committed by the
respondents.
The appellants attack that decision on two main
grounds: they say, first, that the authorization
signed by Mr. LeBlond could not be challenged by
certiorari and, second, that the authorization was
validly made pursuant to a valid section of the
Income Tax Act.
I. Certiorari.
After having pointed out, quite correctly, that
the respondents' application was not directed
against the approval given by Mr. Justice Ducros 3
but, rather, against the authorization signed by
Mr. LeBlond, counsel for the appellants advanced
three arguments in support of his contention that
the authorization was not subject to certiorari.
Counsel's first argument was that the exercise of
the Minister's power to give an authorization
under subsection 231(4) of the Income Tax Act is
a purely administrative act which is subject neither
to the rules of natural justice nor to those of
procedural fairness. For that reason, said counsel,
certiorari could not issue in respect of the exercise
of that power.
Counsel for the respondents, in answer to that
argument, asserted that the Minister was obliged
to act fairly in exercising his power under subsec
tion 231(4). On the basis of that assertion, he
invoked the authority of the decisions of the
Supreme Court of Canada in Nicholson 4 and
Martineau 5 to support his conclusion that certio-
rari could issue in respect of an authorization
granted under subsection 231(4).
This first argument of the appellants must, in
my view, be rejected for reasons other than those
advanced on behalf of the respondents. The power
of the Minister, under subsection 231(4), as both
parties agree, is clearly purely administrative;
3 That approval could neither be appealed (Goodman v.
Rompkey et al., [1982] 1 S.C.R. 589) nor attacked under
section 28 of the Federal Court Act [R.S.C. 1970 (2nd Supp.),
c. 10], The Minister of National Revenue v. Coopers and
Lybrand, [1979] 1 S.C.R. 495) or by certiorari.
4 Nicholson v. Haldimand-Norfolk Regional Board of Com
missioners of Police, [1979] 1 S.C.R. 311.
5 Martineau v. Matsqui Institution Disciplinary Board,
[1980] 1 S.C.R. 602.
moreover, the exercise of that power, in my opin
ion, is not subject to the rules of procedural fair
ness. It follows that an authorization given by the
Minister pursuant to subsection 231(4) cannot be
challenged either for violation of the principles of
natural justice or for lack of procedural fairness. It
does not follow, however, that certiorari may never
issue in respect of the exercise of that power.
Violation of natural justice (in the case of judicial
or quasi-judicial decisions) and lack of procedural
fairness (in the case of administrative decisions)
are merely grounds on which certiorari may issue;
but it may also issue on other grounds, irrespective
of the judicial or administrative character of the
decision under attack, namely, lack of jurisdiction
and error of law on the face of the record. Once it
is accepted, as it must be since the decisions of the
Supreme Court of Canada in Nicholson (supra)
and Martineau (supra), that purely administrative
decisions are no longer immune from certiorari, it
follows, in my view, that those decisions may be
quashed by certiorari not only, in appropriate
cases, for lack of procedural fairness but also for
lack of jurisdiction and error of law on the face of
the record. 6
I therefore conclude that, contrary to what was
argued on behalf of the appellants, the fact that
the authorization of the Minister was a purely
administrative act which was not subject to the
rules of procedural fairness did not preclude the
issuance of certiorari.
Counsel for the appellants' second argument in
support of his contention that an authorization
given pursuant to subsection 231(4) could not be
challenged by certiorari was that a minister's
authorization under that subsection is devoid of
any legal effect as long as it has not been approved
by a judge. Counsel says that the authorization of
the Minister does not "determine questions affect
6 See on the subject: de Smith's Judicial Review of Adminis
trative Action, Fourth Edition, (1980), p. 392.
ing the rights of subjects"' and cannot, for that
reason, be attacked by certiorari. This argument,
however, is not conclusive. Many precedents' sup
port the proposition that an order made by an
authority may be subject to certiorari in spite of
the fact that such an order does not take effect
until confirmed or approved by another authority.'
Counsel for the appellants also contended that
the Minister's authorization could not be chal
lenged by certiorari because such a challenge was,
in effect, a collateral attack on the decision of Mr.
Justice Ducros approving the authorization. As
Mr. Justice Ducros' decision could not be chal
lenged directly by certiorari, it could not, said
counsel, be challenged indirectly. Moreover, coun
sel referred to the rule that a decision of a Supe
rior Court which has not been set aside or varied
on appeal may not be collaterally attacked. '° The
answer to that argument is that the respondents'
attack on the Minister's authorization does not
constitute a collateral or indirect attack on Mr.
Justice Ducros' approval. The respondents chal
lenge the validity of the authorization to search
and seize. That authorization, while it was
approved by Mr. Justice Ducros, was not given by
him. Indeed, subsection 231(4) confers on the
Minister, not on the judge, the power to authorize
a search and a seizure. In challenging the authori
zation given by the Minister on jurisdictional
grounds, the respondents do not ask the Court to
ignore the approval given by Mr. Justice Ducros;
they merely assert that, in spite of that approval,
and for reasons that are entirely foreign to that
approval, the authorization is a nullity because the
Minister did not have the power to give it.
' Per Lord Atkin in Rex v. Electricity Commissioners,
[1924] 1 K.B. 171 (C.A.), at p. 205.
8 And, amongst them, Rex v. Electricity Commissioners
(supra).
9 See: de Smith's Judicial Review of Administrative Action,
Fourth Edition, (1980), pp. 387-388.
' 0 See: Wilson v. The Queen, [1983] 2 S.C.R. 594; [1984] 1
W.W.R. 481.
For those reasons, I see no merit in the appel
lants' first contention that the authorization signed
by Mr. LeBlond could not be challenged by
certiorari.
I must now turn to the appellants' second main
ground of appeal, namely, that the authorization
against which these proceedings are directed was
validly given pursuant to a valid statutory
provision.
II. The validity of the authorization and of subsec
tion 231(4) of the Income Tax Act.
There are two questions to be resolved on this
branch of the case:
(a) Assuming the constitutional validity of sub
section 231(4), did the authorization signed by
Mr. LeBlond exceed the powers of the Minister
under that subsection?
(b) Does subsection 231(4) contravene section 8
of the Constitution Act, 1982?
A. Do the terms of subsection 231(4) authorize
the Minister to give an authorization such as
the one signed by Mr. LeBlond?
Counsel for the respondents argued that the
authorization signed by Mr. LeBlond exceeded the
power conferred on the Minister by subsection
231(4). Mr. LeBlond authorized officers of the
Department to search "for documents, books,
records, papers or things that may afford evidence
as to the violation of any provision of the Income
Tax Act or a regulation and to seize and take away
any such documents, books, records, papers or
things". Subsection 231(4), said counsel, does not
empower the Minister to authorize such a wide
search but merely to authorize a search for and
seizure of "documents, books, records, papers or
things" that may afford evidence as to the viola
tion of those provisions of the Act and Regulations
which, according to the reasonable opinion of the
Minister, were contravened by the taxpayer. In
support of that interpretation of subsection 231(4),
counsel invoked the decision of this Court in In re
Collavino Brothers Construction Company
Limited" a decision which was reversed on other
11 [1978] 2 F.C. 642; 78 DTC 6050 (C.A.).
grounds by the Supreme Court of Canada. 12
Both the Ontario Court of Appeal' 3 and , the
Alberta Court of Appeal" have refused to follow
the decision of this Court in Collavino (supra),
and, in my view, for good reasons. A careful
reading of subsection 231(4) shows, in my respect
ful opinion, that the natural and only possible
meaning of that provision is that, once the Minis
ter has reasonable grounds to believe that a viola
tion of the Act or Regulations has been commit
ted, he may authorize a search for and a seizure of
documents or things relating not only to that
violation but also to the violation of any provision
of the Act or Regulations. I am, therefore, of the
view that the decision in the Collavino case should
not be followed and that the words used in subsec
tion 231(4) should be given their natural meaning.
Counsel for the appellants suggested that both
this interpretation and the one adopted by the
Court in Collavino should be rejected. He said
that subsection 231(4), in his opinion, empowered
the Minister to authorize a limited search for
things related to the offence suspected by the
Minister and the unlimited seizure of anything
that may afford evidence of a violation of any-
provision of the Act. While his interpretation cer
tainly finds support in the dissenting opinion of
Mr. Justice MacKay in the Collavino case, I am
unable to reconcile it with the words of the section.
It is therefore my opinion that the authorization
signed by Mr. LeBlond in this case did not exceed
the powers conferred on the Minister by subsection
231(4). The remaining question is whether that
subsection contravenes section 8 of the Constitu
tion Act, 1982.
B. Subsection 231(4) of the Income Tax Act and
section 8 of the Constitution Act, 1982.
12 The Minister of National Revenue v. Coopers and
Lybrand, [1979] 1 S.C.R. 495; 92 D.L.R. (3d) 1.
13 In Re M.N.R. v. Paroian, Courey, Cohen & Houston
(1980), 80 DTC 6077 (Ont. C.A.).
'" Royal Craft Products Ltd. et al. v. The Queen (1979), 80
DTC 6143; [1980] CTC 97 (Alta. C.A.).
Section 8 of the Constitution Act, 1982 guaran
tees that:
8. Everyone has the right to be secure against unreasonable
search and seizure.
There is a striking similarity between the lan
guage of that provision and the first clause of the
Fourth Amendment to the United States Constitu
tion. However, it would be dangerous, in my view,
to rely on American precedents in interpreting
section 8 since the second clause of the Fourth
Amendment, which has no counterpart in the
Charter, has greatly influenced the American deci
sions on this subject (see the remarks by Martin
J.A. on this subject in R. v. Rao (1984), 46 O.R.
(2d) 80; 40 C.R. (3d) 1 (C.A.)). The drafters of
our Constitution wanted, like their American
counterparts, the individual to be protected against
unreasonable searches and seizures; unlike the
Americans, they did not wish to subject the inter
pretation of the word "unreasonable" to any of the
constraints flowing from the second clause of the
Fourth Amendment.
Searches and seizures are intrusions into the
private domain of the individual. They cannot be
tolerated unless circumstances justify them. A
search or seizure is unreasonable if it is unjustified
in the circumstances. Section 8 does not merely
prohibit unreasonable searches and seizures. It
goes further and guarantees the right to be secure
against unreasonable search and seizure. That is to
say that section 8 of the Charter will be offended,
not only by an unreasonable search or seizure or
by a statute authorizing expressly a search or
seizure without justification, but also by a statute
conferring on an authority so wide a power of
search and seizure that it leaves the individual
without any protection against unreasonable
searches and seizures. It is for that reason, in my
view, that a statute authorizing searches without
warrants may, as was decided in R. v. Rao
(supra), contravene section 8. A search without
warrant may or may not be justified irrespective of
the fact that it was made without warrant; how
ever, save in exceptional cases, a statute authoriz
ing searches without warrants may be considered
as offending section 8 because it deprives the
individual of the protection that normally results
from the warrant requirement.
It is not necessary, in this case, to lay down the
various conditions that must be met in order for a
search or seizure to be reasonable. It is common
ground that subsection 231(4) does not contravene
the Charter in so far as it gives the Minister, when
he has valid grounds for believing that an offence
has been committed by a taxpayer, the power to
authorize a search and seizure in respect of that
offence. What is challenged is the constitutionality
of that subsection in so far as it confers on the
Minister, when he has grounds to believe that one
particular offence has been committed, the power
to authorize a general search and seizure relating
to the violation of any of the provisions of the
Income Tax Act or the Regulations.
I would be ready to concede that, in certain
circumstances, the fact that a taxpayer has com
mitted a serious offence under the Income Tax Act
may justify the inference that he probably also
committed other offences under the Act. However,
I cannot accept the general proposition that the
mere fact that a taxpayer has, at a particular time,
committed an offence under the Income Tax Act
or the Regulations, however trifling that offence,
affords sufficient justification for the general
power of search and seizure conferred by subsec
tion 231(4). In my view, that subsection violates
section 8 of the Constitution Act, 1982 in that it
contravenes the right of the taxpayer "to be secure
against unreasonable search or seizure."
Counsel for the appellants finally invoked sec
tion 1 of the Charter and argued that, in any
event, the right guaranteed by section 8 of the
Charter must be limited so as to validate subsec
tion 231(4) of the Income Tax Act because the
power conferred on the Minister by that subsection
is "demonstrably justified in a free and democratic
society." However, he failed to convince me. True,
once a person is, for serious reasons, suspected of
resorting to fraudulent means in order to evade the
payment of income tax, that power may be neces
sary; but the mere fact that a person has commit-
ted an offence under the Income Tax Act or the
Regulations does not always warrant such a
suspicion.
I would dismiss the appeal with costs.
RYAN J.: I agree.
* * *
The following are the reasons for judgment
rendered in English by
MARCEAU J. (dissenting): Unfortunately, I do
not share the views of my brothers Pratte and
Ryan JJ. as to the disposition of this appeal and,
with respect, I will endeavour to explain my own
thinking and expose the reasons for my disagree
ment.
The facts that gave rise to these proceedings are
set out in detail in the reasons for judgment pre
pared by Mr. Justice Pratte. They need not be
recited again. A quick reminder of the general
factual background and a fresh look at what took
place in the Court below could nevertheless be
useful as an introduction.
On July 8, 1983, an authorization to enter cer
tain specified premises and to search for and seize
documents belonging to the respondents was issued
on behalf of the Minister of National Revenue on
the authority of subsection 231(4) of the Income
Tax Act, S.C. 1970-71-72, c. 63, as amended, the
text of which I reproduce here again for
convenience:
231... .
(4) Where the Minister has reasonable and probable grounds
to believe that a violation of this Act or a regulation has been
committed or is likely to be committed, he may, with the
approval of a judge of a superior or county court, which
approval the judge is hereby empowered to give on ex parte
application, authorize in writing any officer of the Department
of National Revenue, together with such members of the Royal
Canadian Mounted Police or other peace officers as he calls on
to assist him and such other persons as may be named therein,
to enter and search, if necessary by force, any building, recep
tacle or place for documents, books, records, papers or things
that may afford evidence as to the violation of any provision of
this Act or a regulation and to seize and take away any such
documents, books, records, papers or things and retain them
until they are produced in any court proceedings.
The authorization was, as required, submitted for
approval to a Judge of the Superior Court of the
Province of Quebec and was approved. A few days
thereafter, a contingent of officers of the Depart
ment of National Revenue simultaneously entered
the different premises described in the authoriza
tion where they seized and then took away a great
number of records and documents.
The respondents decided to take their case to
court. They brought an application before the
Trial Division for an order in the nature of certio-
rari quashing the authorization pursuant to which
the search and seizure had taken place and, as a
consequence, enjoining the return of all the docu
ments seized. The allegations made in support of
the application did not pertain to the conditions in
which the authorization had been signed and
approved: it was indeed unquestionable that the
Minister had substantial grounds to believe that
serious violations of the Income Tax Act had been
committed by the respondents; nor did those alle
gations have anything special to do with the
manner in which the operation had been executed.
The authorization was to be quashed, according to
the applicants, because it contemplated a search
and seizure of "... documents, books, records,
papers or things that may afford evidence as to the
violation of any provision of the Income Tax Act
or a regulation . .." and was, for that reason,
illegal, null and void on the grounds (as stated in
the notice of motion) that:
i) Section 231(4) of the Income Tax Act is inconsistent with
Section 8 of the Constitution Act, 1982 and of no force or
effect;
ii) The said authorization is inconsistent with Section 8 of
the Constitution Act, 1982 and of no force or effect;
iii) The said authorization is illegal, irregular, null and void;
and
iv) The search, seizure, removal and possession of the seized
effects as executed by the Respondents and/or their repre
sentatives is unreasonable, illegal, irregular, null and void.
The Motion Judge agreed: he quashed the
authorization and ordered the release of all docu
ments seized. His position is explained in one basic
paragraph of his reasons [at pages 123-124]:
In my view, the authorization under attack violates section 8 of
the Constitution Act, in that it constitutes unreasonable search
and seizure. I find it unreasonable because it is not limited to
the particular violations allegedly committed. It is a blanket
order covering the violation of any provision of the Act. In my
view, such a fishing expedition is not necessary and ought not to
be allowed. It constitutes unreasonable search and seizure ....
The appeal we are now dealing with is an attack
against the decision of the Trial Division made on
the basis of three alternative legal propositions,
one raising a preliminary question of jurisdiction,
the others directly challenging the validity of the
Judge's reasoning. While my colleagues disagree
with all three propositions, I, with respect, accept
the third one. It is therefore this third proposition
which I really need to deal with, and I intend to
come to it very quickly, but I think I should first
say a few words about the first two.
The appellants contend in an opening argument
that the Trial Division did not have jurisdiction to
entertain a challenge to the Minister's authoriza
tion, since it was an authorization that had been
approved by a Superior Court Judge and the Fed
eral Court has no authority to dispute the validity
of a Superior Court Judge's decision and no right
whatever to disregard it, not even indirectly. In
any event, they say, if this Court had jurisdiction,
its Trial Division could certainly not derive it from
section 18 of the Federal Court Act, because the
authorization, being a purely administrative act
not subject to the rules of procedural fairness, was
not amenable to certiorari. And in support of their
jurisdictional argument, the appellants refer to the
two well-known decisions of the Supreme Court in
The Minister of National Revenue v. Coopers and
Lybrand, [1979] 1 S.C.R. 495, and Wilson v. The
Queen, [1983] 2 S.C.R. 594; [1984] 1 W.W.R.
481.
My reaction to this preliminary contention is
similar to that of Mr. Justice Pratte. I do not see
the challenge to the Minister's authorization as
amounting to an attack, even merely collateral,
against the Judge's approval, the reasons alleged in
support thereof being entirely foreign to that
approval. The Court is not being asked to review
and find fault with the opinion and conclusion of
the Judge; it is being asked to determine that the
giving of the authorization was beyond the powers
of the Minister, a point the approving Judge was in
no way called upon to consider and decide. On the
other hand, it seems to me quite appropriate that
certiorari, a prerogative writ created to counter
jurisdictional error, be used to attack, for want or
excess of jurisdiction, what is unquestionably a
decision of a public authority affecting private
rights, (although I doubt that on a mere motion, as
is the case here, any relief other than the quashing
of the authorization can be sought).
The second submission advanced in support of
the appeal, one addressed to the substance of the
decision, is that the learned Trial Judge erred in
interpreting the authorization as permitting a
search and seizure of any documents that could
afford evidence as to the violation of all and any
provisions of the Income Tax Act. The authoriza
tion was meant to give rise, it is said, essentially to
a search and seizure of documents relating solely
to the provisions of the Act that, in the belief of
the Minister, had been breached, and only inciden-
tally—by some application of our Canadian ver
sion of the "plain view doctrine",—to a seizure of
pieces of evidence of incriminating character
which the officers may inadvertently come across.
The authorization was not meant to allow an
unlimited search and in fact, the evidence is clear
ly to the effect that the operation that actually
took place was conducted in such a way that only
those documents which could afford evidence as to
the alleged violations were looked for and seized.
The complaint of the respondents and, in turn, the
critique of the Trial Judge were thus simply due to
a misinterpretation of the document, a misinter
pretation that becomes apparent when it is real
ized that the authorization is couched in the very
terms of subsection 231(4) of the Income Tax Act,
and this Court, in the case of In re Collavino
Brothers Construction Company Limited, [1978]
2 F.C. 642 (C.A.), has held (per Heald J. at page
645) that:
... "the violation" referred to in the latter portion of subsection
(4) has reference to "a violation" specified in the opening words
of the subsection ...
This attempt by counsel for the appellants to
limit the controversy to a question of construction
of the document signed on behalf of the Minister
(and thereby avoid the Charter issue raised by the
third proposition) must fail, in my opinion. First, I
am not convinced that the authorization must
necessarily be given the same interpretation as
subsection 231(4) simply because it adopted words
identical to those found in the enactment, since the
context in which these words were to be read was
different. But, in any event, as pointed out by Mr.
Justice Pratte, both the Ontario Court of Appeal
in In Re M.N.R. v. Paroian, Courey, Cohen &
Houston (1980), 80 DTC 6077 and the Alberta
Court of Appeal in Royal Craft Products Ltd. et
al. v. The Queen (1979), 80 DTC 6143; [1980]
CTC 97 have refused, in unanimous decisions, to
follow the finding of this Court in Collavino and I
too, with respect, think that their refusal was
justified. The words used in the provision are so
simple and clear that they leave no room for
interpretation; they contain no ambiguity through
which a "reading down" of their scope could be
made acceptable and they can only be given their
plain meaning which is that once the Minister has
reasonable grounds to believe that a violation of
the Income Tax Act has been committed, he may
authorize a search and seizure of documents relat
ing to the violation of any provision of the Act.
And that brings up the third and main proposi
tion on the basis of which the appeal is founded, a
proposition that directly contradicts the position
taken by the respondents and accepted by the Trial
Judge, namely that the authorization, however
broadly it is interpreted, did not violate section 8
of the Constitution Act, 1982. It is about this
proposition that I respectfully dissent from my
colleagues since I subscribe to it, and I will try to
explain why I do so.
The mere reading of section 8 of the Canadian
Charter of Rights. and Freedoms now enshrined in
the Constitution of Canada suggests some general
comments with which I would like to start. It says:
8. Everyone has the right to be secure against unreasonable
search or seizure.
Such a declaration is obviously a solemn confir
mation that the privacy each of us in this country
feels he needs for his security, the development of
his personality and the fulfilment of his potentiali
ties is totally legitimate. The citizen is entitled to
expect that invasion of his privacy and of his
possessions will not, as a rule, be tolerated from
anyone. But the declaration is also a confirmation
that the interest of society at large in exposing
wrongdoers and repressing crime may bring excep
tions to the rule. Searches and seizures by repre
sentatives of the State responsible for the imple
mentation of the laws of the land will be
authorized in certain circumstances. What is guar
anteed constitutionally is that those searches and
seizures will not be "unreasonable".
So a standard is set, the standard of reasonable
ness. Any limitation placed on or interference with
the individual's right to privacy and property must
henceforth be reasonably justifiable. A balancing
of the right of the individual to privacy as opposed
to the need that the laws of the land be properly
enforced is obviously implied by such a standard
which requires that a proper choice be made, in
any specific context, between the interest the com
munity as a whole may attach to the safeguard of
privacy and the interest it may have in uncovering
a possible breach of the law. To determine, in a
particular instance, whether a search or seizure
remains within the constitutional barriers, one will
have to take into account all its practical aspects,
for instance: the circumstances in which the search
or seizure is resorted to, the manner in which it is
carried out, the nature of the things searched and
seized, the extent to which the privacy of the
individual is affected, the importance that the
enforcement of the law involved may have in gen
eral and in the particular situation involved. There
is not much room there for broad and easily
applicable propositions.
However, section 8 of the Charter does not
merely condemn unreasonable searches or sei
zures, it gives the individual "the right to be secure
against" them (in French "le droit d'être protégé
contre"). So formulated, the right gives an
individual the possibility of complaining not only
of the actual carrying out of an unreasonable
search or seizure but also of the mere fact that he
is in danger of being the subject of such an illegal
invasion of his privacy. It follows that section 8
may be offended by a legislative enactment which
would leaye the individual unshielded against
unreasonable searches or seizures. So, to conform
with the constitutional requirement, any statute
authorizing searches and seizures in certain cir
cumstances must provide for adequate protection
against unreasonable ones; it must subject the
exercise of the power conferred to limitations and
conditions sufficient to constitute adequate safe
guards. Does it mean that the safeguards must be
such that no failures could be possible? In human
behaviour, safeguards of such absolute effective
ness do not exist. It means, in my view, that the
possibilities of failures must not be so great and so
fraught with consequences, so deplorable, as to
outweigh the social advantages that may be
derived from the existence of the power. And here
again, it seems to me, a balancing involving many
factors particular to each statute will have to be
made.
A last general remark. Whatever purpose and
meaning are finally attributed to section 1 of the
Constitution Act, 1982, that of a principle of
general application referring to the characteristics
of a free and democratic society or of a basic
provision requiring justification in the particular
context involved of any limitation to the rights and
freedoms guaranteed by the Charter, I do not see
how it can have any particular role to play in the
interpretation or application of section 8. An
"unreasonable" search or seizure within the mean
ing of section 8 cannot become "reasonable" under
section 1 and it is hard to imagine that it could be
"justified in a free and democratic society" to let
the individual be subject to an unreasonable search
or seizure without giving him redress. If the phrase
"to be secure" were to be taken in the sense of a
total protection and absolute immunity in practice,
then section 1 could perhaps be invoked to bring in
some limitations, but as I have just said, I do not
think it can be so.
I now come back to the particulars of the case at
bar.
I think it ought to be noted first that, although
the sole purpose of the respondents' proceedings
was the setting aside of the seizure of their docu
ments and things, the essential relief sought by
their motion is the quashing of the authorization
on the authority of which the operation had been
carried out. It is incorrect to say, as it is said in the
reasons of the Trial Judge [at page 124], that the
"[authorization] constitutes unreasonable search
and seizure"; it is even crucial in my view to avoid
the confusion of language and to keep always
present in mind that the authorization may give
rise to but is not the search and seizure. The
respondents did not contend seriously that the
search and seizure to which they had actually been
subjected had been unreasonable and apparently
they were wise in refraining from doing so since, as
mentioned previously, there is uncontradicted evi
dence that the search was conducted in such a way
that only those documents which could afford
evidence as to the violations which had been
alleged were looked for and seized. What was
behind the respondents' contention was, of course,
that if the authorization was declared "illegal,
irregular, null and void", it would follow that the
search and the seizure had themselves been illegal
for having been conducted without authority and
their effects had to be eliminated. (I said previous
ly that I entertain serious doubts as to whether, in
a motion for an order in the nature of certiorari
directed against the Minister's authorization, an
order providing for the return of all seized effects
could be sought, but I see no necessity to deal with
this procedural problem here.) So, the attack is
against the authorization and the allegation prop
erly put is that the authorization was illegal
because it was given on the authority of a provision
of law inconsistent with section 8 of the Constitu-
tion Act, 1982, and was itself inconsistent with
section 8 of the Constitution Act, 1982.
It should also be noted that although the attack
is against a particular authorization, the circum
stances in which this authorization was given are
not in issue. The assertion made in support of the
attack is one of principle and its validity is present
ed as absolute: it is, in effect, that an authorization
to search and seize, issued in conformity with and
in the terms of subsection 231(4) of the Income
Tax Act, contravenes the right of the taxpayer
concerned to be secure against unreasonable
search and seizure, because the search and seizure
so authorized may extend to incriminating docu
ments not related to the violations known to have
been committed by the taxpayer.
It is the validity of this general proposition
which must be verified and to do so, as said above,
a balancing of the two competing interests
involved must be made, i.e. on one side, the inter
est that may be served by the power given to the
Minister and on the other, the value to be attribut
ed to the expectation of privacy capable of being
affected by the exercise of that power.
The scheme of the Income Tax Act is founded
upon a self-assessment system, each taxpayer
being asked to disclose his income and estimate the
amount of tax payable by him. Under the scheme,
the Minister is given the duty to assure a certain
control of the honesty of the taxpayers and to help
him fulfill his duty, some powers to secure infor
mation are granted to him. Section 231 of the Act
provides for some of these powers. They include:
the right of entry into a place where a business is
carried on or books or records relating to that
business are or should be kept; the right to audit or
examine those books and records; the right to
require from the owner or manager of the business
all reasonable assistance; the right to request from
any person information or the production of docu
ments; the right to seize if during the course of an
audit there appears to have been a violation of the
Act. And the last and most important of these
investigative powers is the one provided by subsec
tion 4, the right to enter, search and seize. It is no
doubt, in a sense, a frightening power, but it is far
from being an unlimited one: it can only be exer
cised by the Minister or his senior authorized
departmental officials; it is confined to documents,
papers, books, records and things of that sort, and,
in so far as the seizure is concerned, to documents,
books, papers and records that could afford evi
dence of the violation of a provision of the Act; it
arises in very narrowly defined circumstances and
it requires a reasonable conviction that the taxpay
er involved is dishonest and trying to cheat the
system. This is the power we are concerned with
and the aspect thereof which is put in question is
that it may give rise to a search and seizure of any
documents, papers, etc. that may afford evidence
of any violation of the Act. The Minister's authori
zation may be broader than the search warrant
issued under the Criminal Code, it is true, but it
will obviously remain quite different from the
general warrant so despised by the American revo
lutionaries and, in spite of what may sometimes be
said, it can hardly lead to a wholesale seizure or a
general exploratory rummaging in a person's
belongings.
Now, going to the other side of the equation, to
properly assess the value to be attributed to the
other interest involved, one must examine how
seriously and to what extent the expectation of
privacy of the individual may be affected by a
subsection 231(4) operation. The examination
need not be elaborated upon. Is involved whether a
taxpayer, seriously suspected of dishonesty, may
still expect to preserve the privacy of his books,
records and documents, even after the time when
those same books, records and documents can
validly be searched and possibly seized, since no
one objects to a search and seizure limited to the
violations already identified?
It is clear to me that, all factors being con
sidered, the interest that may be served by the
existence of the power, ultimately the very integri
ty of the tax system, outweighs the value our
community as a whole may attach to the safeguard
of the privacy that an individual suspected of
dishonesty may expect in respect of his books,
records and documents. The very partial invasion
of his privacy to which the taxpayer is then being
subjected is, it seems to me, perfectly justifiable in
the particular context in which it is imposed.
It is said that the power may be wrongly used
since any offence, however trifling, could theoreti
cally justify its exercise. Possibilities of abuse
exist, I agree, but I would believe that they are
made quite remote by the requirement that a judge
give his approval, a judge whose duty is to ".. .
scrutinize [with utmost care] the intended exercise
of ministerial discretion...." (Per Dickson J. (as
he then was) in The Minister of National Revenue
v. Coopers and Lybrand (supra), at page 506.)
And, in any case, these remote possibilites of
abuse—which will always be subject to judicial
recourse precisely on the basis of section 8 of the
Charter—are not so consequential and socially
unacceptable, so susceptible of causing irreparable
injury, that, to avoid them, the Minister should be
deprived altogether of a tool that, in some
instances, may be the only one available to enforce
the law.
As a closing remark, I will say that I find
support for my view of the matter in the fact that
the power to search and seize of subsection 231(4)
of the Income Tax Act is a long-standing power
created by Parliament a long time ago and held in
a number of judicial decisions as being both neces
sary and appropriate. (See among others: In Re
M.N.R. v. Paroian, Courey, Cohen & Houston
(1980), 80 DTC 6077 (Ont. C.A.); Royal Craft
Products Ltd. et al. v. The Queen (1979), 80 DTC
6143; [1980] CTC 97 (Alta. C.A.); Goodman v.
Rompkey et al., [1982] 1 S.C.R. 589; Equipe-
ments Rocbec Inc. et al. v. Minister of National
Revenue, [1982] 1 S.C.R. 605; 82 DTC 6174;
Kelly Douglas and Company Limited v. The
Queen et al. (1981), 82 DTC 6036 (B.C.S.C.);
Burnac Corporation Limited, et al. v. Minister of
National Revenue, [1978] 2 F.C. 269 [1977] CTC
593 (T.D.); Bathville Corp. Ltd. et al. v. Atkinson
et al. (1964), 64 DTC 5330 (Ont. C.A.).) Of
course, the coming into force of the Charter may
have rendered inoperative provisions of law with
long standing in our law books, but the notion here
in question is that of "reasonableness" and I do
not consider that the Charter could have abruptly
changed our notion of what is or is not reasonable.
So, those are the reasons why I object, with
respect, to the view that the Minister's authoriza
tion in question in these proceedings, an authoriza
tion regularly issued pursuant to subsection 231(4)
of the Income Tax Act, could be seen as offending
the Constitution.
I would grant the appeal, set aside the judgment
of the Trial Division and dismiss the respondents'
motion with costs throughout.
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.