T-1798-86
Berl Baron (Applicant)
v.
Her Majesty the Queen and the Attorney General
of Canada and the Honourable Otto Jelinek, in his
capacity as Minister of National Revenue
(Respondents)
T-1804-86
Berl Baron (Applicant)
v.
Her Majesty the Queen and the Attorney General
of Canada and the Honourable Otto Jelinek, in his
capacity as Minister of National Revenue
(Respondents)
T-1805-86
Berl Baron and Howard Baron, C.A. (Applicants)
v.
Her Majesty the Queen and the Attorney General
of Canada and the Honourable Otto Jelinek, in his
capacity as Minister of National Revenue
(Respondents)
T-1284-89
Berl Baron and Howard Baron, C.A. (Plaintiffs)
v.
Her Majesty the Queen and the Attorney General
of Canada and the Honourable Otto Jelinek, in his
capacity as Minister of National Revenue
(Defendants)
T-1920-89
Steven Grossman and Interact Laser Industries
Inc. (Plaintiffs)
v.
Her Majesty the Queen and the Attorney General
of Canada and the Honourable Otto Jelinek, in his
capacity as Minister of National Revenue
(Defendants)
INDEXED AS: BARON V. CANADA (T.D.)
Trial Division, Reed J.—Montréal, September 21;
Ottawa, December 5, 1989.
Income tax — Seizures — S. 231.3 Income Tax Act search
and seizure provisions valid — Warrants properly issued
thereunder valid.
Constitutional law — Charter of Rights — Criminal process
— S. 231.3 Income Tax Act not offending s. 8 of Charter in
this case — Search and seizure provisions not precluding
addition of terms and conditions to warrant.
Constitutional law — Charter of Rights — Equality rights
— Income Tax Act s. 231.3 not offending s. 15 of Charter even
if different avenues of appeal existing.
Practice — Privilege — Accountant-client privilege not
protected in federal income tax litigation — Solicitor-client
privilege on different footing as necessary for proper adminis
tration of justice — Procedure followed protecting solicitor-
client privilege during execution of warrants — Warrants
valid.
These motions and actions for declaratory relief raise the
identical issue of the validity of section 231.3 of the Income
Tax Act.
Held, the motions and actions should be dismissed.
Of the five arguments raised, all but the last have been
recently dealt with by the courts. The current state of the law
on this subject is canvassed in the reasons.
(1) The argument that subsection 231.3(3) of the Income Tax
Act offends section 8 of the Charter because it leaves no
discretion to the judge to prevent abusive searches is here
without factual underpinnings. The searches and seizures in
this case were not abusive and therefore it was not necessary to
decide the issue of interpretation as to whether subsection
231.3(3) allows such discretion. There is no uniformity of
jurisprudential opinion. However the Federal Court of Appeal
decision in Solvent Petroleum v. M.N.R. is binding. It may be
that sections 1 and 2 of the Canadian Bill of Rights could come
into play to preserve judicial discretion so as to prevent abusive
searches and seizures. Although it is clear that subsection
231.3(3) removes some discretion from a judge, it does not
preclude a judge from adding terms and conditions to a
warrant.
(2) The search and seizure provisions under subsections
231.3(3), (4), (5) of the Act were found to have been properly
authorized as meeting the applicable test.
(3) The question whether "reasonable grounds" is a lesser test
than "reasonable and probable grounds" thus invalidating sub
section 231.3(3) of the Act as not meeting the requirements of
section 8 of the Charter has been persuasively dealt with in the
case law where it was found that "reasonable" meaning "more
probable than not" met the applicable test. In any event
subsection 231.3(3) was found to meet the minimum applicable
standards in Solvent Petroleum in this respect.
(4) Subsection 231.3(3) does not offend section 15 of the
Charter. If discrimination exists because of the availability of
different avenues of appeal, it is not the result of section 231.3
of the Act. Furthermore, if discrimination arising as a result of
different procedures in different jurisdictions exists, it is not the
type which falls under section 15 of the Charter.
(5) The warrants are not invalid because they were not made
subject to terms of execution to protect confidentiality rights.
Even if it were accepted that Quebec law allows for accountant-
client privilege in litigation, such rule does not apply to federal
income tax litigation. The secrecy between accountant and
client does not serve the same purpose as that between solicitor
and client, the latter privilege existing to preserve the basic
rights of individuals to prosecute actions and to prepare
defences. The proper administration of justice does not require
accountant-client privilege. Even if there is nothing on the face
of the warrants to indicate that proper procedure for execution
of the warrants was provided for, in this case the proper
procedure such as would protect solicitor-client privilege was in
fact followed and that is what is required.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
An Act respecting the Barreau du Québec, R.S.Q. 1977,
c. B-1.
Canada Evidence Act, R.S.C., 1985, c. C-5.
Canadian Bill of Rights, R.S.C., 1985, Appendix III, ss.
1, 2.
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act. 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II,
No. 44], ss. 8, 15.
Charter of Human Rights and Freedoms, R.S.Q. 1977, c.
C-12, ss. 9, 56.
Code of Ethics of Chartered Accountants, R.R.Q. 1981,
c. C-48, r. 2, s. 3.02.25.
Combines Investigation Act, R.S.C. 1970, c. C-23, s.
10(1).
Criminal Code, R.S.C. 1970, c. C-34, ss. 443, 446(1).
Federal Court Act, R.S.C., 1985, c. F-7, ss. 27(1),(4), 50.
Income Tax Act, S.C. 1970-71-72, c. 63, ss. 231(1),(2),
231.3 (as am. by S.C. 1986, c. 6, s. 121), 232(3),
(4),(5) (as am. idem, s. 122).
Interpretation Act, R.S.C., 1985, c. I-2, ss. 3(1), 11.
Judicature Act, S.N.S. 1972, c. 2, s. 35.
Professional Code, R.S.Q. 1977, c. C-26, s. 87(3).
The Court of Appeal Act, R.S.S. 1965, c. 72, s. 6.
CASES JUDICIALLY CONSIDERED
FOLLOWED:
Solvent Petroleum Extraction Inc. v. M.N.R., [1990] 1
F.C. 20; (1989), 50 C.C.C. (3d) 182; 28 F.T.R. 79; 99
N.R. 22 (C.A.); Solvent Petroleum Extraction Inc. v.
Canada (M.N.R.), [1988] 3 F.C. 465; (1988), 18 F.T.R.
286 (T.D.).
APPLIED:
Hunter v. Southam Inc., [1984] 2 S.C.R. 145; (1984), 55
A.R. 291; 11 D.L.R. (4th) 641; [1984] 6 W.W.R. 577; 33
Alta L.R. (2d) 193; 27 B.L.R. 297; 14 C.C.C. (3d) 97; 2
C.P.R. (3d) 1; 41 C.R. (3d) 97; 9 C.R.R. 355; 84 DTC
6467; R. v. Turpin, [1989] 1 S.C.R. 1296; (1989), 48
C.C.C. (3d) 108; 69 C.R. (3d) 97; 96 N.R. 115;
DescĂ´teaux et al. v. Mierzwinski, [1982] 1 S.C.R. 860;
(1982), 141 D.L.R. (3d) 590; 70 C.C.C. (2d) 385; 28
C.R. (3d) 289; 1 C.R.R. 318; 44 N.R. 462.
CONSIDERED:
Kourtessis v. M.N.R. (1989), 39 B.C.L.R. (2d) 1 (C.A.);
Kourtessis v. M.N.R. (1988), 30 B.C.L.R. (2d) 342; 44
C.C.C. 79 (S.C.); F.K. Clayton Group Ltd. v. M.N.R.,
[1988] 2 F.C. 467; [1988] 1 C.T.C. 353; 88 DTC 6202;
82 N.R. 313 (C.A.); M.N.R. v. Kruger Inc., [1984] 2
F.C. 535; (1984), 13 D.L.R. (4th) 706; 12 C.R.R. 45;
[1984] CTC 506; 84 DTC 6478; 55 N.R. 255 (C.A.); R.
v. Simmons, [1988] 2 S.C.R. 495; (1988), 55 D.L.R.
(4th) 673; 45 C.C.C. (3d) 296; 66 C.R. (3d) 297; 89
N.R. 1; Missiaen v. Minister of National Revenue
(1967), 61 W.W.R. 375; [1967] C.T.C. 579; 68 DTC
5039 (Alta. S.C.).
REFERRED TO:
Société Radio-Canada c. Lessard, [1989] R.J.Q. 2043
(C.A.); revg [1987] R.J.Q. 2543 (S.C.); Pacific Press
Ltd. v. Queen in right of B.C. et al., [1977] 5 W.W.R.
507; (1977), 37 C.C.C. (2d) 487; 38 C.R.N.S. 296
(S.C.); F Ltée c. Québec (Directeur, Division des
enquêtes spéciales, ministre du Revenu national Impôt),
(Qué. S.C.), Boilard J., not reported; McLeod and Red
Lake Supermarkets v. The Queen, Ont. S.C., 1987, not
reported; Re Church of Scientology et al. and The Queen
(No. 6) (1987), 31 C.C.C. (3d) 449 (Ont. C.A.); Re
Hertel et al. and The Queen (1986), 37 D.L.R. (4th) 706;
8 B.C.L.R. (2d) 104; 32 C.C.C. (3d) 335; [1987] 1
C.T.C. 15 (S.C.); R. v. Young (1984), 46 O.R. (2d) 520;
13 C.C.C. (3d) 1; 3 O.A.C. 254 (C.A.); R. v. Miles of
Music Ltd. (1989), 48 C.C.C. (3d) 96 (Ont. C.A.);
Bernstein c. R., (C.A.) Montréal, 500-10-000210-888,
January 30, 1989, Beauregard, Nichols, Rothman J.A.,
not yet reported; S.C. Montréal 500-36-000170-889, May
5, 1988, Mayrand J., not reported; Knox Contracting
Ltd. and Knox v. Canada and Minister of National
Revenue et al. (1988), 94 N.B.R. (2d) 8; 89 DTC 5075
(C.A.); Deputy Attorney General of Canada v. Brown,
[1965] S.C.R. 84; (1964), 47 D.L.R. (2d) 402; [1964]
C.T.C. 483; 64 DTC 5296; Edmonds c. Sous -procureur
général du Canada, [1979] C.S. 759; [1980] CTC 192;
80 DTC 6201 (Qué. S.C.); Normandin c. Canada
(Procureur général), Qué. S.C., 460-05-000044-888, June
15, 1989, Mercure J., not reported; St. Georges c. Québec
(Procureur général), [1988] R.D.F.Q. 86 (S.C.).
AUTHORS CITED
Brun, Henri. "Le recouvrement de l'impĂ´t et les droits de
la personne" (1983), 24 C. de D. 457.
Côté, Jacques. "Le secret professionnel et l'expert-
comptable", [1988] 10 R.P.F.S. 449.
Marquis, Paul-Yvan. "Le secret notarial et le fisc"
(1976), 79 R. du N. 4.
COUNSEL:
Guy Du Pont for applicants Berl Baron and
Howard Baron.
Guy Gagnon for plaintiffs Steven Grossman
and Interact Laser Industries Inc.
Pierre Loiselle for respondents (defendants).
SOLICITORS:
Phillips & Vineberg, Montréal, for applicants
Berl Baron and Howard Baron.
Spiegel Sohmer, Montréal, for plaintiffs
Steven Grossman and Interact Laser Indus
tries Inc.
Deputy Attorney General of Canada for
respondents (defendants).
The following are the reasons for the orders
and judgments rendered in English by
REED J.: This is yet another challenge to the
search and seizure provisions set out in section
231.3 of the Income Tax Act, S.C. 1970-71-72, c.
63, as am. by S.C. 1986, c. 6, s. 121. It is argued
that those provisions are invalid because: (1) sub
section 231.3(3) allows no discretion to a judge to
guard against abusive searches and seizures—it
requires a judge to issue a warrant if satisfied that
there are reasonable grounds to believe that an
offence has been committed and that evidence of
that offence is likely to be found in certain prem
ises; (2) subsection 231.3(5) allows wholesale
searches and seizures, without adequate authoriza
tion, and therefore does not meet the requirements
of a constitutionally valid search and seizure
power, as set out in Hunter v. Southam Inc.,
[1984] 2 S.C.R. 145; (1984), 55 A.R. 291; 11
D.L.R. (4th) 641; [1984] 6 W.W.R. 577; 33 Alta.
L.R. (2d) 193; 27 B.L.R. 297; 14 C.C.C. (3d) 97;
2 C.P.R. (3d) 1; 41 C.R. (3d) 97; 9 C.R.R. 355;
84 DTC 6467; (3) the requirements under subsec
tion 231.3(3) do not meet the requirements of
Hunter v. Southam (supra) because they only
require that there be reasonable grounds to believe
that an offence has been committed—this is a
lesser test than one requiring that there be "rea-
sonable and probable" grounds; (4) the provisions
of section 231.3 offend section 15 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.) [R.S.C., 1985,
Appendix II, No. 44]] because there are two ave
nues by which warrants can be obtained (one
through the superior court of a province, the other
through the Federal Court) and the appeal provi
sions differ depending upon which route is chosen;
(5) some of the particular warrants in question are
invalid because they do not contain a clause pro
tecting documents which are subject to solicitor-
client privilege or which arise in the course of an
accountant-client confidential relationship.
On agreement by all counsel, the motions and
actions for declaratory relief set out in the files
listed in the style of cause were dealt with together
on September 21, 1989. The identical issue is
raised in each.
Section 231.3 of the Income Tax Act provides as
follows:
231.3 (1) A judge may, on ex parte application by the
Minister, issue a warrant in writing authorizing any person
named therein to enter and search any building, receptacle or
place for any document or thing that may afford evidence as to
the commission of an offence under this Act and to seize and,
as soon as practicable, bring the document or thing before, or
make a report in respect thereof to, the judge or, where the
judge is unable to act, another judge of the same court to be
dealt with by the judge in accordance with this section.
(2) An application under subsection (1) shall be supported
by information on oath establishing the facts on which the
application is based.
(3) A judge shall issue the warrant referred to in subsection
(1) where he is satisfied that there are reasonable grounds to
believe that
(a) an offence under this Act has been committed;
(b) a document or thing that may afford evidence of the
commission of the offence is likely to be found; and
(c) the building, receptacle or place specified in the applica
tion is likely to contain such a document or thing.
(4) A warrant issued under subsection (1) shall refer to the
offence for which it is issued, identify the building, receptacle
or place to be searched and the person alleged to have commit-
ted the offence and it shall be reasonably specific as to any
document or thing to be searched for and seized.
(5) Any person who executes a warrant under subsection (1)
may seize, in addition to the document or thing referred to in
subsection (1), any other document or thing that he believes on
reasonable grounds affords evidence of the commission of an
offence under this Act and shall as soon as practicable bring
the document or thing before, or make a report in respect
thereof to, the judge who issued the warrant or, where the
judge is unable to act, another judge of the same court to be
dealt with by the judge in accordance with this section.
(6) Subject to subsection (7), where any document or thing
seized under subsection (1) or (5) is brought before a judge or a
report in respect thereof is made to a judge, the judge shall,
unless the Minister waives retention, order that it be retained
by the Minister, who shall take reasonable care to ensure that it
is preserved until the conclusion of any investigation into the
offence in relation to which the document or thing was seized
or until it is required to be produced for the purposes of a
criminal proceeding.
(7) Where any document or thing seized under subsection
(1) or (5) is brought before a judge or a report in respect
thereof is made to a judge, the judge may, of his own motion or
on summary application by a person with an interest in the
document or thing on three clear days notice of application to
the Deputy Attorney General of Canada, order that the docu
ment or thing be returned to the person from whom it was
seized or the person who is otherwise legally entitled thereto if
the judge is satisfied that the document or thing
(a) will not be required for an investigation or a criminal
proceeding; or
(b) was not seized in accordance with the warrant or this
section.
(8) The person from whom any document or thing is seized
pursuant to this section is entitled, at all reasonable times and
subject to such reasonable conditions as may be imposed by the
Minister, to inspect the document or thing and to obtain one
copy of the document at the expense of the Minister.
All but one of the plaintiffs' (applicants') argu
ments in this case have been dealt with, recently,
by the courts—either by the Federal Court of
Appeal, the British Columbia Court of Appeal or
the British Columbia Supreme Court. Applications
for leave to appeal some of those decisions to the
Supreme Court have been filed. Thus, the decision
being asked of me is, in one sense, merely designed
to hold the present cases in abeyance pending the
outcome of the various appeals which are already
under way.
No discretion to guard against abusive search and
seizures
Counsel's first argument is that subsection
231.3(3) offends section 8 of the Charter because
it requires a judge to issue a warrant if there are
reasonable grounds to believe that an offence has
been committed and if there are reasonable
grounds to believe that evidence of that offence is
likely to be found in the place which it is sought to
search. Thus, counsel argues, the statute takes
away from a judge the discretion, which he or she
would otherwise have, to refuse warrants, which
although they fall within the requirements of sub
section 231.3(3), are abusive. Such situations, it is
argued, might exist, for example, if numerous
previous warrants had been obtained to search the
same premises or when special conditions exist
which make it advisable to add conditions to the
warrant. See, for example, Société Radio-Canada
c. Lessard, [ 1989] R.J.Q. 2043 (C.A.); revg
[1987] R.J.Q. 2543 (S.C.); Pacific Press Ltd. v.
Queen in right of B.C. et al., [1977] 5 W.W.R.
507; (1977), 37 C.C.C. (2d) 487; 38 C.R.N.S. 296
(S.C.); F Ltée c. Québec (Directeur, Division des
enquêtes spéciales, ministre du Revenu national
Impôt) (Qué. S.C.) per Boilard J. not reported.
This interpretation of subsection 231.3(3), as
leaving no discretion with a judge to guard against
abusive searches and seizures, relies on Madame
Justice Desjardins' description of subsection
231.3(3) in Solvent Petroleum Extraction Inc. v.
M.N.R., [1990] 1 F.C. 20; (1989), 50 C.C.C. (3d)
182; 28 F.T.R. 79; 99 N.R. 22 (C.A.), at page 24
F.C.; affg [1988] 3 F.C. 465; (1988), 18 F.T.R.
286 (T.D.):
Subsection 231.3(1) states that "A judge may". Subsection
231.3(3) states that "A judge shall". It would therefore appear
from the language of subsection 231.3(3) that if the issuing
judge comes to the conclusion that the conditions of paragraphs
231.3(3)(a),(b) and (c) are met, he need not nor is he permit
ted to consider whether there has been a previous substantive
voluntary compliance by the taxpayer, whether further docu
ments might be remitted voluntarily, or whether the applicant
for the warrants has taken all reasonable steps to obtain the
information from an alternative source before applying for the
warrants. In brief, if the conditions are met, he must issue the
warrant.
The decision by the Federal Court of Appeal in the
Solvent Petroleum case is directly applicable and
binding for the purposes of this case. Leave to
appeal that decision was refused by the Supreme
Court on November 23, 1989 (S.C.C. file 21556).
The view, set out above, in the Solvent
Petroleum case is similar to that expressed in
McLeod and Red Lake Supermarkets v. The
Queen (Ont. S.C., October 1987, not reported). In
Re Church of Scientology et al. and The Queen
(No. 6) (1987), 31 C.C.C. (3d) 449 (Ont. C.A.) at
page 545, it was held, with respect to subsection
446(1) of the Criminal Code' [R.S.C. 1970, c.
C-34], that "shall" was mandatory. It was held, at
page 545, that "shall" in subsection 446(1) could
not be interpreted as being equivalent to "may":
The learned motions court judge in R. v. Zaharia and Church
of Scientology of Toronto (1985), 21 C.C.C. (3d) 118 at pp.
446. (1) Where anything that has been seized under section
445 or under a warrant issued pursuant to section 443 is
brought before a justice, he shall, unless the prosecutor other
wise agrees, detain it or order that it be detained, taking
reasonable care to ensure that it is preserved until the conclu
sion of any investigation or until it is required to be produced
for the purposes of a preliminary inquiry or trial, but nothing
shall be detained under the authority of this section for a period
of more than three months after the time of seizure unless,
before the expiration of that period,
(a) a justice is satisfied on application that, having regard
to the nature of the investigation, its further detention for a
specified period is warranted and he so orders; or
(b) proceedings are instituted in which the thing detained
may be required.
(2) When an accused has been committed for trial the justice
shall forward anything to which subsection (1) applies to the
clerk of the court to which the accused has been committed
for trial to be detained by him and disposed of as the court
directs.
(3) Where a justice is satisfied that anything that has been
seized under section 445 or under a warrant issued pursuant
to section 443 will not be required for any purpose mentioned
in subsection (1) or (2), he may,
(a) if possession of it by the person from whom it was
seized is lawful, order it to be returned to that person, or
(b) if possession of it by the person from whom it was
seized is unlawful,
(i) order it to be returned to the lawful owner or to the
person who is entitled to possession of it, or
(ii) order it to be forfeited or otherwise dealt with in
accordance with law, where the lawful owner or the person
who is entitled to possession of it is not known.
124-5, 5 C.P.C. (2d) 92, made the following statement with
respect to this section:
To the extent that s. 446(1) is to be read as authorizing ex
parte proceedings, it would have to be declared of no force and
effect because of its violation of s. 8. In my view, however, it is
not necessary to read the section in that way. Subsection 446(3)
does not in terms require a hearing or notice when a justice is
requested to act, but it is common that it is the actual practice
to proceed by way of notice and hearing.
Similarly, it was submitted that the use of the word "shall"
in s. 446(1) was an unwarranted fettering of the discretion of
the officer who is to act judicially. In my view, the word should
be construed as permissive rather than mandatory, and the
section can stand.
So far as this ruling of the learned motions court judge is
concerned, the appellant Church of Scientology and the Crown
agreed that he was in error in stating that the word "may" [sic]
should be interpreted as "shall" [sic]. We agree that this was
an error and, in our opinion, it led to a fundamental misconcep
tion on the part of the learned motions court judge as to the
purpose and effect of s. 446(1).
In Re Hertel et al. and The Queen (1986), 37
D.L.R. (4th) 706; 8 B.C.L.R. (2d) 104; 32 C.C.C.
(3d) 335; [1987] 1 C.T.C. 15 (S.C.), however, it
was held that Parliament really meant to say
"may" instead of "shall" in subsection 231.3(6) of
the Income Tax Act. And in Kourtessis v. M.N.R.
(1989), 39 B.C.L.R. (2d) 1 (C.A.), Mr. Justice
Locke dealt with the argument as follows [at pages
28 to 32]:
The next ground of constitutionality is that the words of s.
231.3(1) and (3) are inconsistent with ss. 7 and 8 of the
Charter as no judicial discretion is reserved to the judge, which
is said to be fundamental.
In Re Hertel, 8 B.C.L.R. (2d) 104, 32 C.C.C. (3d) 335,
[1987] 1 C.T.C. 15, 37 D.L.R. (4th) 706 (sub nom. Hertel v.
R.), Bouck J. had an application under s. 231.3(6) that the
documents or things seized be retained by the Minister of
National Revenue until the conclusion of the investigation.
That section reads:
(6) ... where any document or thing seized ... is brought
before a judge or a report in respect thereof is made to a
judge, the judge shall, unless the Minister waives retention,
order that it be retained by the Minister ...
He commented at some length on the thesis that the indepen
dence of the judiciary was at stake as no discretion was left in
the trial judge. He solved it as did Osler J. in R. v. Church of
Scientology (1985) 14 C.R.R. 303, 21 C.C.C. (3d) 118 (sub
nom. R. v. Zaharia) (Ont. H.C.), by saying [p. 116]:
In a like way, I propose to hold that Parliament really
meant to say "may" instead of "shall" in s. 231.3(6) of the
Income Tax Act. Such an interpretation leaves a discretion in
the court as to whether items seized can be retained by the
Income Tax Department when it applies for an order...
In his view, the doctrine of separation of powers of executive
and judiciary was directly challenged, and he canvassed the
existing decisions at some length, they going both ways in
Canada, but the three American authorities he cited all held
that the legislation was unconstitutional as an intrusion upon
the judicial function since it completely removed from the
judiciary the power to refuse the issue of a warrant in certain
cases.
The ground of the interference with the independence of the
judiciary was not argued before us, but I take due note thereof.
The principal argument was based on Hunter v. Southam and
its insistence upon the pivotal importance of the assessment by
the judge. Section 231.3(1) and (3) was contrasted with s. 443
[now s. 487] of the Criminal Code which says:
443. (1) A justice who is satisfied by information upon oath
in Form 1 that there is reasonable ground to believe ... may
at any time issue a warrant under his hand authorizing a
person named therein
(d) to search ... and to seize...
This was interpreted by the courts in DescĂ´teaux v. Mierz-
winski, [1982] 1 S.C.R. 860, 28 C.R. (3d) 289, 70 C.C.C. (2d)
385, 141 D.L.R. (3d) 590, 1 C.R.R. 318, 44 N.R. 462 [Que.],
where Lamer J. set out the arguments and gave his view on the
jurisdiction of the court to attach conditions [pp. 888-889]:
Some would say that the justice of the peace has no
discretion to refuse to issue a search warrant or to impose
terms of execution once the requirements of form and sub
stance in s. 443 have been met. They would argue that in s.
443 the work "may" means "must" and does not confer any
discretion. According to this interpretation, the justice of the
peace may issue a warrant only if he is satisfied that there is
reasonabl : ground to believe that one of the things provided
for in s. 143(1) is to be found in the place sought to be
searched, l ut must do so as soon as he is so satisfied, and the
only condi,ion of execution on the premises that he may
impose is set out in s. 444 of the Code:
"444. A warrant issued under section 443 shall be executed by
day, unless the justice, by the warrant, authorizes execution of
it by night."
Others, on the contrary, would say that generally the justice of
the peace has the discretion to refuse the warrant, so long as
this discretion is exercised judicially and so long as the decision
to refuse the warrant is not capricious or arbitrary ...
The justice of the peace, in my view, has the authority, where
circumstances warrant, to set out execution procedures in the
search warrant; I would even go so far as to say that he has the
right to refuse to issue the warrant in special cirumstance, such
as those found in Re Pacific Press Ltd. and The Queen et al.,
supra.
Hunter v. Southam emphasized the crucial role of the
independent arbiter—the judge—and set up an objective stand
ard. The judge is the balance wheel between conflicting inter
ests of the state on the one hand and the individual on the
other. With this in mind I turn to an analysis of s. 231.3. In
abbreviated form it says:
231.3 (1) A judge may on ex parte application, issue a warrant
(2) An application under subsection (1) shall be supported
by information on oath establishing the facts on which the
application is based
(3) A judge shall issue the warrant referred to in subsection
(1) where he is satisfied that there are reasonable grounds to
believe that ...
(b) a document or thing that may afford evidence of the
commission of the offence is likely to be found; and
(c) the building ... specified ... is likely to contain such a
document...
I am of the opinion these three subsections must be read
together. The crucial function of the judge is to decide whether
the facts before him are sufficient to warrant an intrusion of
privacy. This is discretionary in the judge. In order to exercise
his discretion, the guidelines are set out in subs. (3). If the
evidence fails the standards of subs. (3), he will not be satisfied
and will decline to issue the warrant. If the evidence is suffi
cient, the statute says he "shall" issue the warrant.
It is said that this deprives the judge of a discretion. It does
not deprive him of the discretion as to whether the warrant
should issue at all, and as to which he fulfils his balance wheel
function. It does deprive him of a discretion as to whether the
warrant in fact issues after he makes the primary essential
decision.
One might ask rhetorically, and why not? Having made the
primary decision, surely the figurative stamping of the piece of
paper is unimportant. What the mandatory word does is to
deprive the judge of the discretions argued for in Paroian—that
it was unnecessary to issue the process because the minister
already had enough material. This is not for the court to say,
but I do not feel that the standards of Hunter v. Southam have
been defeated. The judge's crucial role has been fulfilled and
nothing remains except to stamp the piece of paper. It is thus
true that discretion has been impaired in an administrative
aspect, but not at all to impair the judge's primary function. It
is also plain he can always attach conditions to the manner of
execution of the warrant, and this of his own motion under the
doctrine of inherent jurisdiction.
I do not believe the independence of the judge is threatened;
it is only he who has the power to decide whether the process
will issue, and he has the opportunity of doing that. What
follows is surplusage.
It is therefore my opinion that s. 231.3 does not impair the
court's discretion to fulfil its duties in its crucial role of acting
as the independent arbiter between state and individual.
Counsel informed me that it was his information
that leave to appeal the Kourtessis decision to the
Supreme Court would be sought. It is clear, in any
event, that there is not uniformity of opinion on
whether or not subsection 231.3(3) allows discre
tion in a judge to refuse warrants which might be
abusive.
Section 11 of the Interpretation Act, R.S.C.,
1985, c. I-21 was also cited to me:
11. The expression "shall" is to be construed as imperative
and the expression "may" as permissive.
This section, however, adds little to the argument
since it must be read in the light of subsection 3(1)
of the Interpretation Act:
3. (1) Every provision of this Act applies, unless a contrary
intention appears, to every enactment, whether enacted before
or after the commencement of this Act.
If it is clear that the intention of Parliament was to
leave discretion in a judge to refuse to issue a
warrant when the search would offend section 8 of
the Charter, then that interpretation would pre
vail, over the general rule of interpretation set out
in section 11 of the Interpretation Act.
There is considerable jurisprudence which holds
that "shall" can be either directory or mandatory.
This jurisprudence might be relevant to the inter
pretation of subsection 231.3(3). More important
ly, however, the Canadian Bill of Rights [R.S.C.,
1985, Appendix III] might play a role so as to
require subsection 231.3(3) to be interpreted so as
to preserve for a judge discretion, to refuse war
rants, in the case of abusive searches and seizures.
Section 2 of that Act when read together with
section 1 requires:
Every law of Canada shall ... be so construed and applied as
not to abrogate, abridge or infringe ... the right of the
individual to life, liberty, security of the person ...
Alternatively the Court's inherent power to control
the abuse of its own process might operate to
enable a judge to refuse to issue an abusive war
rant. See generally: R. v. Young (1984), 46 O.R.
(2d) 520; 13 C.C.C. (3d) 1; 3 O.A.C. 254 (C.A.);
R. v. Miles of Music Ltd. (1989), 48 C.C.C. (3d)
96 (Ont. C.A.) and section 50 of the Federal
Court Act [R.S.C., 1985, c. F-7]. These are all
speculative arguments, however, and have not been
addressed by counsel. Certainly, it seems to me a
judge would strive against issuing an abusive war
rant which offended section 8 of the Charter, if he
or she knew, at the time the request was made,
that the warrant was abusive. At the very least, I
do not think subsection 231.3(3) precludes a judge
from adding terms and conditions to a warrant
sought. There is nothing in subsection 231.3(3)
which says that a judge must issue a warrant in
the exact terms in which it is sought.
The difficulty in this case is that there are no
factual underpinnings to support the argument
being made. There was no abusive search or sei
zure, contrary to section 8 of the Charter, in this
case. Thus, the challenge to subsection 231.3(3),
on the ground that there is no discretion left in the
hands of a trial judge to guard against unconstitu
tional search and seizures, is academic. It is clear
that some discretion is removed from a judge by
subsection 231.3(3). For example, those aspects
referred to by Madame Justice Desjardins (refus-
ing a warrant because of prior voluntary compli
ance by the taxpayer or because no attempts had
been made to obtain the information elsewhere).
But there still may be authority to refuse warrants
which would offend section 8 of the Charter. It is
difficult to contemplate what form such warrants
might take, however, in the absence of a concrete
factual situation. It is simply unnecessary, for the
purposes of this application, to decide the issue of
interpretation which is raised. The searches and
seizures in this case were not abusive. Accordingly,
there is no need to address counsel's substantive
argument on this point.
Wholesale search and seizures which are not prop
erly authorized
The argument that subsection 231.3(3) indirect
ly allows for wholesale searches and seizures, with-
out adequate authorization, was dealt with recent
ly by the Federal Court of Appeal in the Solvent
Petroleum Extraction case (supra). That decision
was made in the context of the following jurispru
dence. The Supreme Court, in Hunter v. Southam
(supra) declared subsection 10(1) of the Combines
Investigation Act [R.S.C. 1970, c. C-23] invalid as
being overbroad and as allowing searches and
seizures without adequate independent prior
authorization. Subsection 10(1) read:
10. (1) Subject to subsection (3), in any inquiry under this
Act the Director [of Investigation and Research of the Com
bines Investigation Branch] 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.
The Chief Justice said, of this subsection, at page
160 of the Hunter decision:
If the issue to be resolved in assessing the constitutionality of
searches under s. 10 were in fact the governmental interest in
carrying out a given search outweighed that of the individual in
resisting the governmental intrusion upon his privacy, then it
would be appropriate to determine the balance of the compet
ing interests after the search had been conducted. Such a post
facto analysis would, however, be seriously at odds with the
purpose of s. 8. That purpose is, as I have said, to protect
individuals from unjustified state intrusions upon their privacy.
That purpose requires a means of preventing unjustified
searches before they happen, not simply of determining, after
the fact, whether they ought to have occurred in the first place.
This, in my view, can only be accomplished by a system of prior
authorization, not one of subsequent validation.
A requirement of prior authorization, usually in the form of
a valid warrant, has been a consistent prerequisite for a valid
search and seizure both at common law and under most
statutes. Such a requirement puts the onus on the state to
demonstrate the superiority of its interest to that of the
individual.
And at page 167:
The purpose of an objective criterion for granting prior
authorization to conduct a search or seizure is to provide a
consistent standard for identifying the point at which the
interests of the state in such intrusions come to prevail over the
interests of the individual in resisting them. To associate it with
an applicant's reasonable belief that relevant evidence may be
uncovered by the search, would be to define the proper stand
ard as the possibility of finding evidence. This is a very low
standard which would validate intrusion on the basis of suspi
cion, and authorize fishing expeditions of considerable latitude.
It would tip the balance strongly in favour of the state and limit
the right of the individual to resist, to only the most egregious
intrusions. I do not believe that this is a proper standard for
securing the right to be free from unreasonable search and
seizure.
At that time subsections 231(1) and (2) of the
Income Tax Act governed searches made for the
purposes of the Act:
231. (1) Any person thereunto authorized by the Minister,
for any purpose related to the administration or enforcement of
this Act, may, at all reasonable times, enter into any premises
or place where any business is carried on or any property is
kept or anything is done in connection with any business or any
books or records are or should be kept, and
(a) audit or examine the books and records and any account,
voucher, letter, telegram or other document which relates or
may relate to the information that is or should be in the
books or records or the amount of tax payable under this
Act,
(b) examine property described by an inventory or any
property, process or matter an examination of which may, in
his opinion, assist him in determining the accuracy of an
inventory or in ascertaining the information that is or should
be in the books or records or the amount of any tax payable
under this Act,
(c) require the owner or manager of the property or business
and any other person on the premises or place to give him all
reasonable assistance with his audit or examination and to
answer all proper questions relating to the audit or examina
tion either orally or, if he so requires, in writing, on oath or
by statutory declaration and, for that purpose, require the
owner or manager to attend at the premises or place with
him, and
(d) if, during the course of an audit or examination, it
appears to him that there has been a violation of this Act or a
regulation, seize and take away any of the documents, books,
records, papers or things that may be required as evidence as
to the violation of any provision of this Act or a regulation.
(2) The Minister shall,
(a) within 120 days from the date of seizure of any docu
ments, books, records, papers or things pursuant to para
graph (1)(d), or
(b) if within that time an application is made under this
subsection that is, after the expiration of that time, rejected,
then forthwith upon the disposition of the application,
return the documents, books, records, papers or things to the
person from whom they were seized unless a judge of a superior
court or county court, on application made by or on behalf of
the Minister, supported by evidence on oath establishing that
the Minister has reasonable and probable grounds to believe
that there has been a violation of this Act or a regulation and
that the seized documents, books, records, papers or things are
or may be required as evidence in relation thereto, orders that
they be retained by the Minister until they are produced in any
court proceedings, which order the judge is hereby empowered
to give on ex parte application.
The Federal Court of Appeal in F.K. Clayton
Group Ltd. v. M.N.R., [1988] 2 F.C. 467; [1988]
1 C.T.C. 353; 88 DTC 6202; 82 N.R. 313, at
pages 475-476 F.C., paragraph 231(1)(d) and sub
section 231(2) to be invalid as not meeting the
Hunter and Southam test:
Privacy, however, is not the only interest protected by section
8. As the reasons for judgment in Southam demonstrate, the
rule requiring that searches be previously authorized by war
rant had its origins in the need to protect property rights. In the
present case, the appellants have an important property interest
in the things seized which are, by definition, the books and
records of the business carried on by them. I believe we should
take judicial notice of the fact that the seizure of such books
and records and their physical removal from the company's
business premises is bound to have the most serious repercus
sions on its ability to carry on its business.
All these things being considered, it is my opinion that the
Trial Judge properly found paragraph 231(1)(d) and subsec
tion 231(2) to be contrary to the guarantee against unreason
able search and seizure contained in section 8.
In the first place, the seizure, being warrantless, is prima
facie unreasonable. It does not have the prior sanction of an
impartial arbiter "capable of acting judicially".
Secondly, the legislation sets no objective standard against
which to test the validity of the seizure. The words of para
graph 231 (I)(d) authorize the official to make a wholly subjec
tive assessment of the need to seize:
231. (1) ...
d) if ... it appears to him ...
Thirdly, the standard which is set by the legislation is far too
low, requiring only the appearance of a violation to justify the
seizure ...
Fourthly, it is my view that the scope of the seizure author
ized by paragraph 231(1)(d) is too broad. As interpreted by the
Minister, once a violation of the Act or Regulations has taken
place, the paragraph authorizes the seizure of records that
"may be required as evidence as to the violation of Ey
provision of [the] Act."
This is precisely the type of provision which has already been
found by this Court to fall foul of section 8. [Footnotes
omitted.]
And in M.N.R. v. Kruger Inc., [1984] 2 F.C.
535; (1984), 13 D.L.R. (4th) 706; 12 C.R.R. 45;
[1984] CTC 506; 84 DTC 6478; 55 N.R. 255, the
Federal Court of Appeal held subsection 231(4) to
be invalid. Subsection 231(4) read:
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.
Mr. Justice Pratte, speaking for the majority of
the Court, stated at page 549:
I would be ready to concede that, in certain circumstances,
the fact that a taxpayer has committed 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 subsection 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."
The relevant provisions of the Income Tax Act
were amended by S.C. 1986, c. 6 [s. 121]. I will set
out subsections 231.3(3), (4) and (5) of the
present Act, again, for ease of reference:
231.3.. .
(3) A judge shall issue the warrant referred to in subsection
(1) where he is satisfied that there are reasonable grounds to
believe that
(a) an offence under this Act has been committed;
(b) a document or thing that may afford evidence of the
commission of the offence is likely to be found; and
(c) the building, receptacle or place specified in the applica
tion is likely to contain such a document or thing.
(4) A warrant issued under subsection (1) shall refer to the
offence for which it is issued, identify the building, receptacle
or place to be searched and the person alleged to have commit
ted the offence and it shall be reasonably specific as to any
document or thing to be searched for and seized.
(5) Any person who executes a warrant under subsection (1)
may seize, in addition to the document or thing referred to in
subsection (1), any other document or thing that he believes on
reasonable grounds affords evidence of the commission of an
offence under this Act and shall as soon as practicable bring
the document or thing before, or make a report in respect
thereof to, the judge who issued the warrant or, where the
judge is unable to act, another judge of the same court to be
dealt with by the judge in accordance with this section. [Under-
lining added.]
As noted, the question of whether or not these
provisions meet the Hunter v. Southam (supra)
test was dealt with by the Federal Court of Appeal
in the Solvent Petroleum case (supra). They were
held to have done so.
Finally, they say that the authorizing legislation being section
231.3 of the Income Tax Act is ultra vires on the basis that it
contravenes the Charter and cannot support the warrants
herein. Their attack is directed both towards a seizure of things
referred to in the warrant (subsection 231.3(3)) and a seizure
of things not identified in the warrant which the person execut
ing the warrant "believes on reasonable grounds affords evi
dence of the commission of an offence under this Act" (subsec-
tion 231.3(5)).
In M.N.R. v. Kruger, [1984], 2 F.C. 535 (C.A.), at page 549
decided before the Supreme Court of Canada rendered its
decision in Hunter v. Southam, [1984] 2 S.C.R. 145, this Court
held that subsection 231(4) contravened section 8 of the Chart
er in that it gave the minister, when he believed 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 Act or regulations made under it. (See also
Vespoli, D. et al. v. The Queen et al. (1984), 84 DTC 6489
(F.C.A.) rendered the same day.)
In Print Three Inc. et al. and The Queen, Re (1985), 20
C.C.C. (3d) 392 (Ont. C.A.), decided after Hunter v. South-
am, additional reasons were given by the Ontario Court of
Appeal in support of the conclusion that subsection 231(4) was
in contravention of section 8 of the Charter. It was said at page
396:
In our view, there are additional reasons to those relied upon
by the Federal Court of Appeal for holding the subsection to be
in breach of s. 8. It is clear that to meet the standards of
reasonableness there must first be an independent arbiter
(judge) who is satisfied that there are reasonable grounds for
believing that an offence has been committed (see Hunter et al
v. Southam Inc., supra). In s. 231(4) and (5), it is the Minister
who has to have the reasonable and probable grounds and there
is no standard or conditions precedent set out for the judge on
which to base his assessment of whether the Minister's belief is
properly founded. Mr. Kelly argued that the only reasonable
construction of s.-s.5 is that facts must be laid before the judge
so he can be satisfied that the Minister has reasonable and
probable grounds. Even if the subsection could be so construed,
there are, as we have noted, additional flaws in s. 231(4) and
(5). There is no requirement that the Minister have grounds to
believe that evidence is likely to be found at the place of the
search and there is no requirement that he present such
grounds to the judge. There is, equally, no direction as to what
is to be issued by the judge in granting his "approval". It is the
Minister who issues what is, in essence, the warrant. Finally the
Minister is not required in the authorization to specify the
things to be searched for. [Underlining added.]
The present subsection 231.3(3) requires that the judge, who
issues the warrant, be satisfied that the Minister has reasonable
ground to believe that an offence has been committed, that
specified things are to be searched for and that the evidence is
likely to be found at the place of the search indicated in the
application. These conditions meet the deficiencies noted in the
above decision with regard to the former subsections 231(4)
and 231(5) .. .
With respect to subsection 231.3(5), the appellants submit
that a parallel cannot be drawn between section 489 of the
Criminal Code, R.S.C. 1985, c. C-46 and subsection 231.3(5)
of the Income Tax Act in that the doctrine of "plain view" is
inapplicable to a situation such as the present one where
complex business documents are involved. Unlike a case where,
upon entry, a police officer may see narcotics in open view,
documents such as those contemplated by subsection 231.3(5)
would require detailed examination by the authorities to deter
mine whether they support a violation of the Act. Therefore the
subsection provides for a "wholesale search" of a citizen's home
which is a principle repugnant to the provisions of sections 7
and 8 of the Charter.
The common law rule with regard to the "plain view"
doctrine is that where, during the course of executing a legal
warrant, an officer locates anything which he reasonably
believes is evidence of the commission of a crime, he has the
power to seize it (Chani v. Jones, [1970] 1 Q.B. 693 (C.A.)
Lord Denning M.R. at page 706; Chic Fashions (West Wales)
Ltd. v. Jones, [1968] 2 Q.B. 299 (C.A.), Diplock L.J., at page
313; Reynolds v. Comr. of Police of the Metropolis, [1984] 3
All E.R. 649 (C.A.) at pages 653, 659, 662; Re Regina and
Shea (1982), 1 C.C.C. (3d) at page 316 Ont. H.C. The
principle is known here and in the United States (Texas v.
Brown, 75 L.Ed. (2d) 502 (1983 U.S.S.C.)). 4 Seizure done in
such a fashion has been held valid by the following Courts: R.
v. Longtin (1983), 5 C.C.C. (3d) 12 (Ont. C.A.) at page 16; Re
Regina and Shea (1982), 1 C.C.C. (3d) 316 (Ont. H.C.) at
pages 321-22.
4 In Texas v. Brown supra, four justices of the United States
Supreme Court adopted as a point of reference for further
discussion (at p. 511) the plurality's view of Coolidge v. New
Hampshire, 403 U.S. 443 (1971). At p. 510, Rehnquist J. for
himself and for the Chief Justice Burger, Justice White and
Justice O'Connor said that the "plain view" doctrine permits
the warrantless seizure by the police of private possessions
where three requirements are satisfied:
(Continued on next page)
In any event, the context in which the search for and seizure
of "plain view" documents appears in the Act i.e. in the course
of searching for and seizing business documents under a war
rant which would obviously involve examination of documents
by the searcher in order to determine whether their seizure is
authorized by that warrant, suggests that the authority to seize
other business documents not covered by the warrant meets the
test of reasonableness and therefore of validity.
That decision is binding for the purposes of this
case.
Reasonable grounds is a lesser test than reasonable
and probable grounds?
The plaintiffs' (applicants') third argument is
that subsection 231.3(3) is invalid because it
requires that there be only reasonable grounds to
believe that an offence has been committed before
a warrant is issued. It is argued that since this is a
lesser test than one requiring reasonable and prob
able grounds it does not meet the requirements of
section 8 of the Charter.
This argument was dealt with, by the British
Columbia Court of Appeal, in Kourtessis v. Min
ister of National Revenue (supra) [at pages 24 to
28]:
It is argued that the newly enacted s. 231.3(3) is wounded
fatally because of the omission of the words "and probable":
(3) A judge shall issue the warrant referred to ... where he
is satisfied that there are reasonable grounds to believe that
Subject to what follows, there is no Canadian authority
directly in point dealing with the question as to whether the
words "reasonable" and "reasonable and probable" can neces
sarily be equated and one looks for general clues. Indefatigable
appellant's counsel supplied the court with a list of 54 Canadi-
an statutes ranging from the Agricultural Products Standards
Act to the Yukon Act, each of which contain distinct search
and seizure clauses and all of which contain provisions relating
(Continued from previous page)
First, the police officer must lawfully make an "initial
intrusion" or otherwise properly be in a position from which
he can view a particular area. Id., at 465-468, 29 L. Ed. 2d
564, 91 S. Ct 2022. Second, the officer must discover
incriminating evidence "inadvertently", which is to say, he
may not "know in advance the location of [certain] evidence
and intend to seize it,"relying on the plain-view doctrine only
as a pretext. Id., at 470, 29 L Ed 2d 564, 91 S Ct 2022.
Finally, it must be "immediately apparent" to the police that
the items they observe may be evidence of a crime, contra
band, or otherwise subject to seizure. Id., at p. 466, 29 L
Ed 2d 564, 91 S Ct 2022.
to the exercise of judicial discretion by the judge or other
authority. The statutes were produced in support of another
argument in this case, but for what it is worth, only two of
those statutes used the standard "reasonable and probable
grounds"—the Transportation of Dangerous Goods Act, R.S.C.
1985, c. T-19, and the Yukon Act, R.S.C. 1985, c. Y-2. On
12th December 1988, amendments were proclaimed of these
last statutes presumably pursuant to the provisions of the
Statute Revision Act R.S.C. 1985, c. S-20, which permits the
Statutes Revision Commission to make such alterations in
language as may be required to preserve a uniform mode of
expression. In any event, the words "and probable" were delet
ed from those statutes.
Section 443 [now 487] of the Criminal Code (information
for a search warrant) has always read, and now uses, the word
"reasonable" only.
The 1988 edition of Martin's Criminal Code sets out s. 455,
which reads:
455. Anyone who, on reasonable and probable grounds,
believes that a person has committed an indictable offence
may lay an information ...
The corresponding section in the 1989 edition of Martin, s.
504, omits the words "and probable". In like manner, Form 2,
the general form of information, was amended by deletion.
Section 10 [now ss. 11 and 12] of the Narcotic Control Act
provides that a peace officer may:
10.(1)...
(c) seize and take away any narcotic ... in such place in
which he reasonably suspects a narcotic is contained ...
(2) the justice who is satisfied by information upon oath that
there are reasonable grounds for believing that there is a
narcotic ... in any dwelling-house may issue a warrant ...
However, the word "probable" still appears' in Form 7, the
Warrant for Arrest, and in a number of other sections of the
Criminal Code dealing in particular with the defence of
self-defence. *
In Hunter v. Southam at pp. 158-159 the Chief Justice also
said:
The Fourth Amendment of the United States Constitution,
also guarantees a broad right. It provides:
"The right of the people to be secure in their persons, houses,
papers, and effects, against unreasonable searches and sei
zures, shall not be violated, and no Warrants shall issue, but
upon probable cause, supported by Oath or affirmation, and
particularly describing the place to be searched,' and the
persons or things to be seized."
* Editor's Note: This paragraph is not found in the reasons
for judgment as reported in Kourtessis v. M.N.R. (1989), 39
B.C.L.R. (2d) 1 (C.A.) but it does appear in the reasons for
judgment as issued by the Court and on the Quicklaw data base
(B.C.J.).
Construing this provision in Katz v. United States, 389 U.S.
347 (1967), Stewart J. delivering the majority opinion of the
United States Supreme Court declared at p. 351 that "the
fourth amendment protects people, not places". Justice Stew-
art rejected any necessary connection between that Amend
ment and the notion of trespass. With respect, I believe this
approach is equally appropriate in construing the protections
in s. 8 of the Charter of Rights and Freedoms.
In R. v. DeBot (1986), 54 C.R. (3d) 120, 30 C.C.C. (3d)
207, 26 C.R.R. 275, 17 O.A.C. 141, Martin J.A. said, referring
to Hunter v. Southam:
The standard of "reasonable grounds to believe" and that of
"probable cause", which is contained in the Fourth Amend
ment to the American Constitution are identical ... The
standard ... is not to be equated with proof beyond a
reasonable doubt or a prima facie case. The standard to be
met is one of reaosnable [sic] probability.
The Supreme Court has, on a number of occasions, referred
to decisions of the United States and picks and chooses as to
whether it will apply the reasoning, always taking care to say
these cases are of limited use though their underlining philoso
phy is often illuminating. In an article to which we were
referred, "The Incredible Shrinking Fourth Amendment" by
Cyrus J. Wasserstrom (1984), 21 Amer. Crim. L. Rev. 271, the
author learnedly dissects varying changes of interpretation
adopted by the Supreme Court of the United States over the
many years since the declaration of the Fourth Amendment. At
p. 306 the author says:
Certainly, the phrase "probable cause" suggests a quantum
of evidence at least sufficient to establish more than a fifty
percent probability—at least some sort of more-likely-than-
not or preponderance of the evidence standard. Although the
Court has not expressed the probable cause requirement in
these probabilistic terms, it has for years consistently stated
the requirement in a way that suggests an even higher degree
of probability. For what the Court has said is that probable
cause for an arrest exists where the evidence is "sufficient to
warrant a prudent man in believing that the [suspect] had
committed or was committing an offense." And it has used
the equivalent language to describe the quantum of evidence
required to justify a search, i.e. that the police officer must
reasonably believe that the evidence sought will be found in
the place to be searched. Such a belief would clearly not be
warranted if the facts available to the officer made it as
likely as not that he was wrong. Probable cause interpreted in
this way also has a very important virtue; it sets a fixed and
intelligible standard for the officer who is contemplating an
evidentiary search or an arrest. It tells him that unless he
thinks that the search will be, not might be, successful, or
unnless [sic] he thinks that the suspect has, not might have,
committed an offense, he must investigate further before he
can search or seize evidence ... [Emphasis is mine and the
author's.]
When I look at the comparative uniformity of Canadian
statute law in relation to search and seizure provisions I find
that now in almost every case the word "reasonable" is used
and not the words "reasonable and probable". The appellant's
argument on this point rests upon one paragraph in Hunter v.
Southam as establishing a standard of conduct for the issuance
of search warrants. I acknowledge that the word is used again,
four years later, in Simmons, which purports to summarize
Hunter, but five years earlier in Coopers & Lybrand, the word
"probable" was not mentioned.
On a further consideration of Hunter v. Southam three other
points arise. In the first place, s. 10(1) of the Combines
Investigation Act then under consideration does not contain the
word either "reasonable" or "probable". Second, s. 443 of the
Criminal Code—"reasonable cause"—is referred to both by
Prowse J.A. of the Alberta Court of Appeal and in the body of
the Chief Justice's judgment, without any apparent disapprov
al, and last, when the Chief Justice comments on s. 443 of the
Criminal Code and contrasts it with the American Bill of
Rights at p. 167, he says:
The phrasing is slightly different, but the standard in each of
these formulations is identical.
In perspective I now find that the word "probable" has
substantially vanished from the statutory jurisprudence of fed-
eral.statutes. Why is this so? Is it for the sake of uniformity?
Or have "reasonable and probable" been deemed to be the
same? I do not agree that they are the same, and I refer to
Wasserstrom's commentary previously cited.
I find the grounds of "reasonable" above entirely satisfactory
in dealing with all matters other than search warrants. The
invasion of a dwelling-house has been commented on recently in
this court in R. v. Parent, [1989] B.C.W.L.D. 979 (not yet
reported), and by the Supreme Court of Canada in Simmons. I
find it disturbing to consider that if the word "reasonable"
means that the applicant hopes to find something, but the
words "reasonable and probable" means he expects to find it,
that the lesser standard will do to invade a dwelling-house.
If one takes the two phrases and reads them literally, side by
side, I do not think the use of the word "reasonable" is enough.
However, if the words of Chief Justice Dickson "the phrasing
is slightly different but the standard in each of these formula
tions is identical", referring to the American Constitution,
means anything, it must mean that the word can be subject to a
gloss of interpretation. If, for instance, the word "reasonable" is
to be interpreted to mean that the police officers must reason
ably believe that the evidence sought will be found in the place
to be searched, then I am content: this suggests a "more likely
than not" standard. Less than this seems to me to be only an
exploration, which should not be allowed.
Adhering to the literal view only would mean that all the
search and seizure provisions in Canada should be set aside.
Allowing a gloss would save them. However, I examine only
one statute—the Income Tax Act. It is the judge who under s.
231.3(3) must be satisfied that there are reasonable grounds to
believe that (a) an offence under this Act has been committed;
(b) a document or thing that may afford evidence of the
commission of the offence is likely to be found; and (c) the
building receptacle or place specified in the application is likely
to contain such a document or thing.
It is important that (b) and (c) contain the word "likely".
This must come from the evidence before the judge. If he is
then satisfied that the deponent believes that the document may
"likely" be found on the premises, I think the more-probable-
than-not test has been satisfied. So, in the last resort, I think
the Hunter v. Southam test is satisfied.
Counsel argues that the Supreme Court, in R. v.
Simmons, [1988] 2 S.C.R. 495; (1988), 55 D.L.R.
(4th) 673; 45 C.C.C. (3d) 296; 66 C.R. (3d) 297;
89 N.R. 1 at page 523 made it clear that the
constitutional test was one of reasonable and prob
able grounds. This is so, he argues, despite the fact
that in Hunter v. Southam (supra), at pages 158-
159 S.C.R., the test was framed by reference to
reasonable grounds only (at page 168 S.C.R. of
Hunter v. Southam the test referred to was "rea-
sonable and probable").
The Federal Court of Appeal in Solvent
Petroleum (supra) also dealt with this argument:
There is no doubt that subsection 231.3(3) meets these
minimum standards (See Kohli v. Moase et al. (1987), 86
N.B.R. (2d); 219 A.P.R. 15, (N.B.Q.B.)). I add that the
possible difference between the words "reasonable and probable
grounds" in the former subsection 231(4) and the words "rea-
sonable grounds" in subsection 231.3(3) was not argued as such
before us as it was before Lysyk J. in Kourtessis and Hellenic
Import Export Co. Ltd. v. M.N.R. (1988), 89 DTC 5214
(B.C.S.C.). I have no difficulty with the conclusion at which
Lysyk J. has arrived. Having noted that the then section 443 of
the Criminal Code [R.S.C. 1970, c. 34] (now section 489 of the
Criminal Code, R.S.C. 1985, c. 46.) spoke about "reasonable
grounds" and that the Fourth Amendment to the United States
Constitution (The Fourth Amendment to the United States
Constitution reads thus: The right of the people to be secure in
their persons, houses, papers and effects, against unreasonable
searches and seizures, shall not be violated, and no Warrants
shall issue, but upon probable cause, supported by Oath or
affirmation, particularly describing the place to be searched,
and the persons or things to be seized.) is different from section
8 of the Charter, the learned judge concluded at page 5218 of
the decision:
The sole standard explicitly supplied by s. 8 of the Charter is
that of reasonableness. Authority does not establish and, in my
view, principle does not commend the proposition contended for
by the petitioners to the effect that absence of a statutory
requirement for probable as well as reasonable grounds for
belief is constitutionally fatal.
Counsel for the plaintiffs (applicants) argues
that Madame Justice Desjardins, when writing the
decision in Solvent Petroleum (supra), did not
have the benefit of the Supreme Court's decision
in Simmons (supra), nor did Mr. Justice Lysyk in
Kourtessis (supra). It is argued that the Simmons
decision requires that a contrary conclusion be
reached to that which was reached in the Solvent
Petroleum and in the Kourtessis cases.
I do not read the Simmons case in this manner.
I do not understand the Supreme Court to have
focussed on the argument which counsel wishes to
draw from that decision. The reasoning of Mr.
Justice Lysyk is very compelling. It is hard to
comprehend how one could have reasonable
grounds for issuing a search warrant if reasonable
ness did not comprehend a requirement of proba
bility. Counsel argues that the comments on this
issue which are set out by the Federal Court of
Appeal in Solvent Petroleum were dicta since that
issue was not argued in that case. This may very
well be true but, as I have already noted, the
reasoning in Kourtessis is very persuasive and the
Supreme Court decision in Simmons does not
detract from it.
Charter of Rights—s. 15—Federal Court or Pro
vincial Superior Courts—and Different Avenues
Counsel's fourth argument is that section 231.3
offends section 15 of the Charter because two
methods for obtaining a warrant thereunder exist
(from a judge of the Federal Court or from a
judge of the superior court of the province):
231. In sections 231.1 to 231.5.
"judge" means a judge of a superior court having jurisdiction in
the province where the matter arises or a judge of the
Federal Court.
If a warrant is issued by a Federal Court judge
that decision is appealable to the Federal Court of
Appeal, (as is a decision under subsection 231.3(7)
refusing to return documents seized under a war
rant). Subsections 27(1) and 27(4) of the Federal
Court Act provide:
27. (1) An appeal lies to the Federal Court of Appeal from
any
(a) final judgment,
(b) judgment on a question of law determined before trial, or
(c) interlocutory judgment, of the Trial Division.
(4) For the purposes of this section, a final judgment includes
a judgment that determines a substantive right except as to any
question to be determined by a referee pursuant to the
judgment.
If a warrant is issued by a judge of the superior
court of a province, the decision, in at least some
provinces, will be considered to be non final in
nature and therefore not appealable to the Court
of Appeal of the province: Kourtessis (supra);
Bernstein c. R., (C.A.) Montréal, 500-10-000210-
888, Beauregard, Nichols, Rothman, JJ.A, Janu-
ary 30, 1989; S.C. Montréal 500-36-000170-889,
May 5, 1988, Mayrand J. And, in Knox Contract
ing Ltd. and Knox v. Canada and Minister of
National Revenue et al. (1988), 94 N.B.R. (2d) 8;
89 DTC 5075 (C.A.), it was held that the issuing
of a search warrant was an administrative act and
part of the investigatory process and therefore not
a decision subject to appeal. The New Brunswick
Court of Appeal's decision focussed on the word
ing of subsection 231.3(3) which provides that a
judge shall "issue a warrant" rather than "order a
warrant to be issued". Both the Knox and Bern-
stein decisions are under appeal to the Supreme
Court of Canada (S.C.C. files 21271 and 21411
respectively).
In assessing this argument, it must be noted,
firstly, that the differences in procedure do not
arise solely as between the Federal Court and the
superior courts of the provinces. Differences may
also exist among the provincial superior courts
themselves. For example, in Saskatchewan, The
Court of Appeal Act, R.S.S. 1965, c. 72, s. 6 gives
the Court of Appeal jurisdiction in appeals
"respecting any judgment, order or decision of any
judge of the Court of Queen's Bench." In Nova
Scotia, the Judicature Act, S.N.S. 1972, c. 2, s. 35
gives the Court of Appeal jurisdiction over appeals
from "any decision, verdict, judgment or order".
The differences, which counsel allege constitute
discrimination contrary to section 15 of the Chart
er, would seem to result, then, from the various
provincial statutes, the rules of court issued there-
under, a difference in the jurisprudence as to
whether a judge acting under section 231.3 of the
Income Tax Act, is acting judicially or administra
tively, and a difference in the jurisprudence as to
whether decisions under section 231.3 are final or
interlocutory.
Mr. Justice Lysyk dealt with this same argu
ment in Kourtessis v. M.N.R. (1988), 30 B.C.L.R.
(2d) 342; 44 C.C.C. 79 (S.C.), at pĂ ge 355
B.C.L.R.:
I will assume, without stopping to review the cases relied upon
by Mr. Du Pont, that the rights of appeal with respect to s.
231.3 are not entirely uniform across Canada. If that is so, and
even if one makes the further (large) assumption that the
differences in question are capable of constituting "discrimina-
tion" within the meaning of s. 15(1) of the Charter, any such
inequality in rights of appeal does not flow from the provisions
of the impugned legislation itself. Accordingly, striking down
the challenged enactment would not be an appropriate response
to the problem. Other forms of relief to eliminate the alleged
disparity in treatment were not proposed and consideration of
them at this stage would be premature.
Lastly, counsel for the plaintiffs (applicants)
called my attention to the Supreme Court's deci
sion in R. v. Turpin, [1989] 1 S.C.R. 1296;
(1989), 48 C.C.C. (3d) 108; 69 C.R. (3d) 97; 96
N.R. 115. That decision dealt with the fact that in
Ontario a person accused of murder could not
elect to be tried by judge alone. If the individual
had been tried in Alberta, such an election would
have been possible. The Supreme Court stated at
page 1329 S.C.R. of the Turpin decision:
Taking the above definition as the minimal content of the right
to equality before the law found in s. 15 of the Charter, I would
conclude that the impugned provisions deny the appellants
equality before the law. The appellants wish to be tried by a
judge alone but they are precluded from receiving such a trial
by the combined force of ss. 427 and 429 of the Criminal Code.
Section 430 of the Criminal Code, on the other hand, permits
those charged with the same offence in Alberta to be tried by a
judge alone. The appellants are accordingly denied an opportu
nity which is available to others, a denial which, as the Court of
Appeal noted at pp. 299-300 could work to the disadvantage of
the appellants:
And at pages 1330-1331 S.C.R.:
(b) Discrimination
Having concluded that the appellants have been denied at
least one of the equality rights listed in s. 15 of the Charter, I
must move to the next step and determine whether the denial
can be said to result in discrimination. Differential treatment is
permitted under s. 15 provided it is "without discrimination".
As McIntyre, J., stated in Andrews (at p. 182 S.C.R.):
A complainant under s. 15(1) must show not only that he or she
is not receiving equal treatment before and under the law or
that the law has a differential impact on him or her in the
protection or benefit of the law but, in addition, must show that
the legislative impact of the law is discriminatory.
In determining whether there is discrimination on grounds
relating to the personal characteristics of the individual or
group, it is important to look not only at the impugned legisla
tion which has created a distinction that violates the right to
equality but also to the larger social, political and legal context.
McIntyre, J., emphasized in Andrews (at p. 167 S.C.R.):
For as has been said, a bad law will not be saved merely
because it operates equally upon those to whom it has applica
tion. Nor will a law necessarily be bad because it makes
distinctions.
And at page 1333 S.C.R.:
Differentiating for mode of trial purposes between those
accused of s. 427 offences in Alberta and those accused of the
same offences elsewhere in Canada would not, in my view,
advance the purposes of s. 15 in remedying or preventing
discrimination against groups suffering social, political and
legal disadvantage in our society. A search for indicia of
discrimination such as stereotyping, historical disadvantage or
vulnerability to political and social prejudice would be fruitless
in this case because what we are comparing is the position of
those accused of the offences listed in s. 427 in the rest of
Canada to the position of those accused of the offences listed in
s. 427 in Alberta. To recognize the claims of the appellants
under s. 15 of the Charter would, in my respectful view,
"overshoot the actual purpose of the right or freedom in
question": see R. v. Big M Drug Mart Ltd., at p. 344 [S.C.C.].
I would not wish to suggest that a person's province of
residence or place of trial could not in some circumstances be a
personal characteristic of the individual or group capable of
constituting a ground of discrimination. I simply say that it is
not so here.
In my view, then, the plaintiffs' (applicants')
argument must fail. I agree with Mr. Justice
Lysyk that, if discrimination exists, it is not the
result of section 231 of the Income Tax Act and if
there are to be remedies, they lie elsewhere than in
declaring section 231.3 unconstitutional. Secondly,
the Supreme Court decision in Turpin clearly indi
cates that the type of discrimination, if discrimina
tion there be, which arises as a result of different
procedures in different jurisdictions is not the type
of discrimination which falls under section 15 of
the Charter.
Solicitor-client privilege—accountant-client privi
lege
Counsel's last argument is that the warrants,
issued pursuant to the order of Mr. Justice Strayer
on August 7, 1986, are invalid because they were
not made subject to terms of execution designed to
protect the right to confidentiality of their respec
tive clients. This argument relates to the warrants
which were issued allowing searches to be made of
the offices of Baron & Abrams (Barristers and
Solicitors) and Baron & Merton (chartered
accountants).
I will deal first with the accountant-client privi
lege. Counsel notes that an accountant's obligation
to maintain professional secrecy is statutorily rec
ognized and is found in the Québec Charter of
Human Rights and Freedoms, R.S.Q., 1977, c.
C-12:
9. Every person has a right to non-disclosure of confidential
information.
No person bound to professional secrecy by law and no priest
or other minister of religion may, even in judicial proceedings,
disclose confidential information revealed to him by reason of
his position or profession, unless he is authorized to do so by the
person who confided such information to him or by an express
provision of law.
The tribunal must, ex officio, ensure that professional secre
cy is respected.
56. (1) In sections 9, 23, 30, 31 and 38, the word "tribunal"
includes a coroner, a fire investigation commissioner, an inquiry
commission, and any person or agency exercising quasi-judicial
functions.
(2) In section 19, the word "salary" and "wages" include the
compensations or benefits of pecuniary value connected with
the employment.
(3) In the Charter, the word "law" or "act" includes a
regulation, a decree, an ordinance or an order in council made
under the authority of any act.
The relevant provisions of the Professional Code,
R.S.Q. 1977, c. C-26, subsection 87(3) and the
Code of Ethics of Chartered Accountants, R.R.Q.
1981, c. C-48, r. 2 (section 3.02.25) were also
cited:
87. The Bureau must make, by regulation, a code of ethics
governing the general and special duties of the professional
towards the public, his clients and his profession, particularly
the duty to discharge his professional obligations with integrity.
Such code must contain, inter alla:
(3) provisions to preserve the secrecy of confidential informa
tion that becomes known to the members of the corporation in
the practice of their profession;
3.02.25. A member is bound to professional secrecy and he may
not disclose confidential information revealed to him by reason
of his position or profession, unless he is authorized to do so by
the person who confided such information to him or by an
express provision of law.
Counsel argues that it is the law of the province
which governs what privileges apply in the context
of litigation: see Deputy Attorney General of
Canada v. Brown, [1965] S.C.R. 84; (1964), 47
D.L.R. (2d) 402; [1964] C.T.C. 483; 64 DTC
5296. In the case of Edmonds c. Sous -procureur
général du Canada, [1979] C.S. 759; [1980] CTC
192; 80 DTC 6201 (Qué. S.C.) and Normandin c.
Canada (Procureur général) S.C. Granby (Que.),
(460-05-000044-888, June 15, 1989, Mercure J.,
not reported) the Court referred to the relevant
provisions of An Act respecting the Barreau du
Québec, [R.S.Q. 1977, c. B-1] and the Québec
Charter of Human Rights and Freedoms, in a case
involving a solicitor-client privilege. Reference was
also made to "Le recouvrement de l'impĂ´t et les
droits de la personne" (1983), 24 C. de D. 457, at
pages 473-474 and Me Marquis' article, "Le secret
notarial et le fisc", 79 R. du N. 4. In St-Georges c.
Québec (Procureur général), [1988] R.D.F.Q. 86
(S.C.), at page 91 per Gonthier J. (as he then
was), it was held that accountant-client communi
cations were protected in so far as Quebec law was
concerned.
Even if I accept that the law of Quebec provides
for an accountant-client privilege in the context of
litigation, I am not persuaded that such a rule has
been adopted with respect to federal income tax
litigation. If such a rule were intended to apply one
would expect to find it expressly so provided in
either the Canada Evidence Act [R.S.C., 1985, c.
C-5] or the Income Tax Act.
In Missiaen v. Minister of National Revenue
(1967), 61 W.W.R. 375; [1967] C.T.C. 579; 68
DTC 5039 (Alta. S.C.), Mr. Justice Primrose
stated [at page 378 W.W.R.]:
While no claim was made to privilege of the correspondence
between the client and the chartered accountant acting for the
applicants, and there is no provision in the Income Tax Act to
provide such privilege, it would appear there is some merit in
such a claim. In re William W. Kask (1966), 20 DTC 5374,
Wilson, C.J. succinctly sets out the principles upon which the
solicitor-client privilege exists. Certainly, the chartered
accountant with the client is in an analogous position to a
solicitor and his client and it is rather strange that no privilege
is accorded or claimed in such circumstances. [Underlining
added.]
And, Mr. Côté, in "Le secret professionnel et
l'expert-comptable", [1988] 10 R.P.F.S. 449 one
finds at pages 454-455:
In conclusion, all who work in the field of taxation, except
perhaps for those in the two levels of government, can only
rejoice at the introduction of s. 9 of the Chapter and the way it
has been construed in St. Georges on the question of account
ants, professional privilege. The need to recognize this right to
professional privilege had become increasingly clear to tax
experts involved in tax planning on account of the close rela
tionship existing between accountants, tax lawyers and clients
and the very privileged information to which the accountant
has access. It is now to be hoped that the Department of
National Revenue will also recognize this right to professional
privilege in its legislation or that, if there is no such recognition
by the federal government, the courts will recognize the
application of s. 9 of the Quebec Charter even to federal
legislation. It would be unfortunate if the taxpayers of Quebec
were deprived at the federal level of the fundamental right to
professional privilege. [Underlining added.]
It is not at all strange that solicitor-client com
munications are privileged in so far as compellable
evidence before the courts is concerned, while
those between an accountant and client are not.
The purpose of the solicitor-client privilege is to
ensure free and uninhibited communications be
tween a solicitor and his client so that the render-
ing of effective legal assistance can be given. This
privilege preserves the basic right of individuals to
prosecute actions and to prepare defences. As Mr.
Justice Lamer indicated, in DescĂ´teaux et al. v.
Mierzwinski, [1982] 1 S.C.R. 860; (1982), 141
D.L.R. (3d) 590; 70 C.C.C. (2d) 385; 28 C.R.
(3d) 289; 1 C.R.R. 318; 44 N.R. 462 at page 883
S.C.R., the privilege is recognized because it is
necessary for the proper administration of justice.
I do not think there is an overriding policy con
sideration, of this nature, in the case of account-
ant-client communication. An accountant may, as
a matter of professional ethics, be required to keep
communications and other information concerning
his or her client confidential. But this is not found
ed upon a need to ensure an effective system of the
administration of justice.
I turn then to the solicitor-client privilege. In
DescĂ´teaux (supra) Mr. Justice Lamer held at
page 870 S.C.R.:
It is not necessary to demonstrate the existence of a person's
right to have communications with his lawyer kept confidential.
Its existence has been affirmed numerous times and was recent
ly reconfirmed by this Court in Solosky v. The Queen, [1980] 1
S.C.R. 821, where Dickson J. stated (at p. 839):
One may depart from the current concept of privilege and
approach the case on the broader basis that (i) the right to
communicate in confidence with one's legal adviser is a funda
mental civil and legal right, founded upon the unique relation
ship of solicitor and client, and
Mr. Justice Lamer went on to say at page 875:
It would, I think, be useful for us to formulate this substan
tive rule, as the judges formerly did with the rule of evidence; it
could, in my view, be stated as follows:
1. The confidentiality of communications between solicitor and
client may be raised in any circumstances where such com
munications are likely to be disclosed without the client's
consent.
2. Unless the law provides otherwise, when and to the extent
that the legitimate exercise of a right would interfere with
another person's right to have his communications with his
lawyer kept confidential, the resulting conflict should be
resolved in favour of protecting the confidentiality.
3. When the law gives someone the authority to do something
which, in the circumstances of the case, might interfere with
that confidentiality, the decision to do so and the choice of
means of exercising that authority should be determined with
a view to not interfering with it except to the extent absolute
ly necessary in order to achieve the ends sought by the
enabling legislation.
4. Acts providing otherwise in situations under paragraph 2
and enabling legislation referred to in paragraph 3 must be
interpreted restrictively.
The DescĂ´teaux case dealt with a warrant
issued, by a justice of the peace, pursuant to
section 443 of the Criminal Code. It was held that
a warrant to search a lawyer's office should not be
issued, under that section, unless the justice of the
peace had considered: (1) whether a reasonable
alternative source of obtaining the information
existed; and (2) if such did exist whether reason
able steps had first been taken to obtain the infor
mation from that source. These prerequisites, in
my view, do not pertain to warrants issued under
subsection 231.3(3) of the Income Tax Act. The
statutory language precludes those qualifications
being applied.
In the DescĂ´teaux case, Mr. Justice Lamer also
stated, however, that in cases where a lawyer's
office is to be searched certain procedural safe
guards must be provided for in the warrant. At
pages 891-892 S.C.R. he stated:
Moreover, even if the conditions are met [i.e., no alternative
source available] the justice of the peace must set out proce
dures for the execution of the warrant that reconcile protection
of the interests this right is seeking to promote with protection
of those the search power is seeking to promote, and limit the
breach of this fundamental right to what is strictly inevitable.
Generally speaking, where the search is to be made of a
lawyer's office, in order to search for things provided for under
para. (a), (b) or (c) of s. 443(1), the justice of the peace should
be particularly demanding .... It will sometimes be desirable,
as soon as the informant initiates proceedings, for the justice of
the peace to see that the district Crown attorney is notified, if
he is not aware of such proceedings, as well as the Bar
authoritites. With their assistance he should normally be more
easily able to decide with the police on search procedures
acceptable to everyone that respect the law firm's clients' right
to confidentiality without depriving the police of their right to
search for evidence of the alleged crime.
In this repsect he could take guidance from the provisions of
the Income Tax Act, 1970-71-72 (Can.) c. 63, s. 232, adapting
them to fit the particular case, of course.
Moreover, the search should be made in the presence of a
representative of the Bar, where possible.
And at page 893 S.C.R.:
Before authorizing a search of a lawyer's office for evidence
of a crime, the justice of the peace should refuse to issue the
warrant unless he is satisfied that there is no reasonable
alternative to the search, or he will be exceeding his jurisdiction
(the substantive rule). When issuing the warrant, to search for
evidence or other things, he must in any event attach terms of
execution to the warrant assigned to protect the right to
confidentiality of the lawyer's clients as much as possible.
[Underlining added.]
The plaintiffs (applicants) submit that the failure
to incorporate such terms in the warrants in this
case is fatal.
Counsel for the defendants (respondents) argues
that it is not necessary to set out the conditions as
prescribed in DescĂ´teaux, when the warrants issue
under subsection 231.3(3) of the Income Tax Act.
This follows, it is said, because there is a code built
into that Act designed to protect solicitor-client
privilege. Subsections 232(3), (4) and (5) [as am.
by S.C. 1986, c. 6, s. 122] provide:
232... .
(3) Where, pursuant to section 231.3, an officer is about to
seize a document in the possession of a lawyer and the lawyer
claims that a named client of his has a solicitor-client privilege
in respect of that document, the officer shall, without inspect
ing, examining or making copies of the document,
(a) seize the document and place it, together with any other
document in respect of which the lawyer at the same time
makes the same claim on behalf of the same client, in a
package and suitably seal and identify the package; and
(b) place the package in the custody of the sheriff of the
district or county in which the seizure was made or, if the
officer and the lawyer agree in writing on a person to act as
custodian, in the custody of that person.
(4) Where a document has been seized and placed in custody
under subsection (3) or is being retained under subsection
(3.1), the client, or the lawyer on behalf of the client, may
(a) within 14 days after the day the document was so placed
in custody or commenced to be so retained apply, on three
clear days notice of motion to the Deputy Attorney General
of Canada, to a judge for an order
(i) fixing a day, not later than 21 days after the date of the
order, and place for the determination of the question
whether the client has a solicitor-client privilege in respect
of the document, and
(ii) requiring the production of the document to the judge
at that time and place;
(b) serve a copy of the order on the Deputy Attorney General
of Canada and, where applicable, on the custodian within 6
days of the day on which it was made and, within the same
time, pay to the custodian the estimated expenses of trans
porting the document to and from the place of hearing and of
safeguarding it; and
(c) if he has proceeded as authorized by paragraph (b), apply
at the appointed time and place for an order determining the
question.
(5) An application under paragraph (4)(c) shall be heard in
camera, and on the application
(a) the judge may, if he considers it necessary to determine
the question, inspect the document and, if he does so, he shall
ensure that it is repackaged and resealed; and
(b) the judge shall decide the matter summarily and,
(i) if he is of the opinion that the client has a solicitor-cli
ent privilege in respect of the document, shall order the
release of the document to the lawyer, and
(ii) if he is of the opinion that the client does not have a
solicitor-client privilege in respect of the document, shall
order
(A) that the custodian deliver the document to the
officer or some other person designated by the Deputy
Minister of National Revenue for Taxation, in the case
of a document that was seized and placed in custody
under subsection (3), or
(B) that the lawyer make the document available for
inspection or examination by the officer or other person
designated by the Deputy Minister of National Revenue
for Taxation, in the case of a document that was
retained under subsection (3.1),
and he shall, at the same time, deliver concise reasons in which
he shall identify the document without divulging the details
thereof.
The issue as I understood it to be argued in front
of me, then, is whether the provisions in section
232 are sufficient or whether execution procedures
should also be set out in the warrant itself.
In my view, the statements of Mr. Justice
Lamer indicate that the provisions in the Income
Tax Act are not, in themselves, sufficient. Those
provisions would be no protection in a case where a
lawyer's office was searched in the presence of
support staff only and no notice of the right to
claim privilege given. The warrants in this case,
contain nothing on their face which indicate that
proper procedures for execution were provided for.
At the same time, however, there seems little
doubt that approriate execution procedures were,
in fact, followed. The reports made to Mr. Justice
Strayer pursuant to section 231.3 of the Income
Tax Act, indicate that a lawyer was present when
the search was made and that claims for privilege
were made pursuant to section 232 of the Income
Tax Act. The documents for which privilege was
claimed, by the lawyer, were placed in an envelope
and turned over to Regent Doré as custodian. An
application for determination as to whether the
documents were properly subject to solicitor-client
privilege was filed in the Superior Court of
Quebec. That application was subsequently with
drawn. In this regard see the Affidavit and Report
to a Judge of Yvon Demers, dated October 30,
1986 (paragraphs 3(d) and 4) and the Affidavit
and Report to a Judge of Gilles Thériault, dated
June 2, 1987, both on file T-1798-86. In such
circumstances it cannot seriously be thought that
the warrants in question should be declared inval
id. My understanding of Mr. Justice Lamer's
statements in DescĂ´teaux is that what is required
is that the proper procedure is in fact followed.
That the procedure was not set out on the face of
the warrant is not itself determinative.
For the reasons given the motions and applica
tions in question will be dismissed. The defendants
(respondents) shall recover their costs of these
actions but one set of costs only.
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.