A-618-89
Berl Baron (Appellant)
v.
Her Majesty the Queen and the Attorney General
for Canada and the Honourable Otto Jelinek in
his capacity as Minister of National Revenue
(Respondents)
A-619-89
Berl Baron and Howard Baron, C.A. (Appellants)
v.
Her Majesty the Queen and the Attorney General
for Canada and the Honourable Otto Jelinek in
his capacity as Minister of National Revenue
(Respondents)
A-620-89
Berl Baron (Appellant)
v.
Her Majesty the Queen and the Attorney General
for Canada and the Honourable Otto Jelinek in
his capacity as Minister of National Revenue
(Respondents)
A-621-89
Berl Baron and Howard Baron, C.A. (Appellants)
v.
Her Majesty the Queen and the Attorney General
for Canada and the Honourable Otto Jelinek in
his capacity as Minister of National Revenue
(Respondents)
INDEXED AS: BARON V. CANADA (CA.)
Court of Appeal, Pratte, Marceau and Hugessen
JJ.A.—Montréal, November 6; Ottawa, Novem-
ber 28, 1990.
Income tax — Seizures — Income Tax Act, s. 231.3 search
and seizure provisions criminal in nature — Unconstitutional
as violating Charter, ss. 7 and 8 — Warrants issued there-
under invalid.
Constitutional law — Charter of Rights — Criminal process
— Income Tax Act, s. 231.3 search and seizure provisions in
violation of Charter, s. 8 — Not meeting express or implied
criteria set by S.C.C. in Southam for reasonable search and
seizure by: (1) denying judicial discretion to refuse to issue
search warrant or to attach conditions thereto; (2) using words
diluting standard with respect to probability of finding
evidence.
Constitutional law — Charter of Rights — Life, liberty and
security — Income Tax Act, s. 231.3 search and seizure
provisions in violation of Charter, s. 7 as denial of judicial
discretion therein contrary to principles of fundamental
justice.
Practice — Privilege — Accountant-client privilege not
protected in federal income tax litigation.
Searches and seizures were effected on the authority of
warrants issued under section 231.3 of the Income Tax Act.
The Trial Division dismissed the appellant's attacks on the
warrants themselves and on the validity of the section under
which they were issued.
This was an appeal from that decision.
Held, the appeal should be allowed, the warrants quashed
and section 231.3 declared of no force or effect because it was
inconsistent with sections 7 and 8 of the Charter.
The search and seizure procedures authorized by section
231.3 were criminal in their nature. The section was concerned
with the detection and prosecution of crime. Nothing less than
the full panoply of Charter protection was therefore
appropriate.
The words "A judge shall issue the warrant" in subsection
231.3(3) specifically excluded judicial discretion in the issuance
of search warrants. For that reason, that provision ran afoul of
sections 7 and 8 of the Charter as authorizing an unreasonable
search and seizure and violating the principles of fundamental
justice.
The word "shall" is normally imperative, and should be
interpreted in that manner unless such an interpretation would
be utterly inconsistent with the context in which it has been
used and would render the sections irrational or meaningless.
There was nothing in the section to suggest that "shall" should
not be given its normal imperative meaning. Nor could the Bill
of Rights be used to validate, by interpretation, legislation
which was otherwise inadequate on Charter grounds.
The Court's power to control abuse of process or to add
conditions to a warrant could not be invoked. If the conditions
precedent to a reasonable search and seizure were exhaustively
set out in subsection 231.3(3), an application meeting those
conditions could not be an abuse of process. And if the word
"shall" was given its normal imperative meaning, there could
be no power in the judge to attach conditions to the warrant
beyond those specifically set out in the statute.
The requirement of judicial discretion to refuse to issue a
search warrant, or to attach conditions to a warrant when
issued, was implicit in the standards of reasonability set out by
the Supreme Court of Canada in Hunter et al. v. Southam Inc.
as a prerequisite to a reasonable search and seizure in accord
ance with section 8 of the Charter.
The Supreme Court of Canada decision in Descôteaux et al.
v. Mierzwinski was authority for the proposition that the
attaching of conditions to a search warrant was a necessary and
essential part of the exercise of judicial discretion but, even
more importantly, that the very existence of such discretion was
a prerequisite to the reasonableness of the search and to our
notions of fundamental justice.
The use of the phrase "reasonable grounds to believe"
instead of "reasonable and probable" was of no consequence. In
that phrase, "probable" added nothing. Like the second
member of such other hallowed English legal phrases as "null
and void", "good and valid", "last will and testament", it did
nothing. Furthermore, a grammatical analysis of subsection
231.3(3) showed that in fact, the evidentiary burden of "more
likely than not" has been met or exceeded.
Also, on the basis of Southam, the text of paragraph
231.3(3)(b) (a document or thing that may afford evidence)
was inadequate on Charter grounds and was therefore inopera
tive: the use of the word "may" allowed the issuance of a search
warrant on showing of reasonable grounds to believe in a mere
possibility that the thing to be found would afford evidence of a
crime.
As to subsection 231.3(5), this Court had already decided in
Solvent Petroleum that it met the test of reasonableness and
therefore of validity. There was no good reason to revisit that
finding.
Accountant-client privilege was not protected in the context
of federal income tax litigation. Solicitor-client privilege was on
a different footing as necessary for the proper administration of
justice, but in this case there had been no breach of that
privilege since the proper procedure to protect it was followed
during the execution of the warrants.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canadian Bill of Rights, R.S.C., 1985, Appendix III.
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. 7, 8.
Combines Investigation Act, R.S.C. 1970, c. C-23, s.
10(3).
Criminal Code, R.S.C. 1970, c. C-34, ss. 487, 487.1 (as
enacted by R.S.C., 1985 (1st Supp.), c. 27, s. 69), 488
(as am. idem, s. 70).
Criminal Code, R.S.C., 1985, c. C-46, s. 487(1) (as am.
by R.S.C., 1985 (1st Supp.), c. 27, s. 68).
Customs Act, S.C. 1986, c. 1, s. 111(1).
Income Tax Act, S.C. 1970-71-72, c. 63, ss. 231.3 (as
am. by S.C. 1986, c. 6, s. 121).
Interpretation Act, R.S.C., 1985, c. I-21, s. 11.
CASES JUDICIALLY CONSIDERED
APPLIED:
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.); Reference re Manitoba Language
Rights, [1985] 1 S.C.R. 721; (1985), 19 D.L.R. (4th) 1;
[1985] 4 W.W.R. 385; 35 Man.R. (2d) 83; 59 N.R. 321;
Hunter et al. 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; 55 N.R. 241; Descôteaux 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.
NOT FOLLOWED:
Kourtessis v. M.N.R., [1990] 1 W.W.R. 97; (1989), 39
B.C.L.R. (2d) 1; 50 C.C.C. (3d) 201; 72 C.R. (3d) 196;
89 DTC 5464 (B.C.C.A.).
DISTINGUISHED:
R. v. McKinlay Transport Ltd., [1990] 1 S.C.R. 627;
(1990), 76 C.R. (3d) 283.
REFERRED TO:
Knox Contracting Ltd. v. Canada, [1990] 2 S.C.R. 338;
(1990), 110 N.R. 171; Julius v. Bishop of Oxford
(1880), 5 App. Cas. 214 (I-I.L.); Minister of National
Revenue 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.); Singh et al. v. Minister
of Employment and Immigration, [1985] 1 S.C.R. 177;
(1985), 17 D.L.R. (4th) 422; 12 Admin. L.R. 137; 14
C.R.R. 13; 58 N.R. 1; Goguen v. Shannon (1989), 50
C.C.C. (3d) 45 (N.B.C.A.); Nima v. McInnes, [1989] 2
W.W.R. 634; (1988), 32 B.C.L.R. (2d) 197; 45 C.C.C.
(3d) 419 (B.C.S.C.); Canada v. Aquarius Computer
(1989), 2 T.C.T. 4531 (Ont. H.C.).
AUTHORS CITED
Robert, Paul Dictionnaire alphabétique et analogique de
la langue française Paris: Le Robert, 1982, "prob-
able".
Shorter Oxford English Dictionary, vol. II, 3rd rev. ed.
Oxford: Clarendon Press, 1968, "probable".
COUNSEL:
Guy Du Pont and André Serero for
appellants.
Pierre Loiselle, Q.C. for respondents.
SOLICITORS:
Phillips & Vineberg, Montréal, for appel
lants.
Deputy Attorney General of Canada, for
respondents.
The following are the reasons for judgment
rendered in English by
HUGESSEN J.A.:
Introduction
These four appeals are from judgments of the
Trial Division [[1990] 2 F.C. 262] dismissing a
series of attacks upon searches and seizures effect
ed on the authority of warrants issued under sec
tion 231.3 of the Income Tax Act [S.C. 1970-71-
72, c. 63 (as am. by S.C. 1986, c. 6, s. 121)].
Three of the proceedings in the Trial Division
attacked the warrants themselves while the fourth
sought a declaration of invalidity of the statutory
provisions under which they were issued. All raised
the same questions and were dealt with by a single
set of reasons in the Trial Division. It is convenient
to do likewise here.
For ready reference I reproduce here in its
entirety the statutory text under which the search
warrants were issued and which lies at the centre
of this litigation:
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
(I) 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.
The Nature of the Search and Seizure Authorized
by Section 231.3
As a preliminary matter, it is as well to make
clear at the outset that in my opinion we are
dealing with procedures that are criminal in their
nature. It is not necessary at this stage to charac
terize in constitutional terms the source of Parlia
ment's legislative power, a question on which the
Supreme Court has recently divided and which
awaits a definitive resolution by a majority of the
members of that Court (see Knox Contracting Ltd.
v. Canada, [1990] 2 S.C.R. 338).
It is enough simply to read the section under
attack and its repeated reference to "offence" to
realize that the section is concerned with the
detection and prosecution of crime, albeit a limited
category of crime, namely offences under the
Income Tax Act. This makes the legislation differ
ent in kind from the type of administrative
enforcement mechanisms found in adjacent sec
tions of the Income Tax Act such as were upheld
by the Supreme Court in R. v. McKinlay Trans
port Ltd., [1990] 1 S.C.R. 627.
The requirements of a self-reporting and self-
assessing income tax system may justify an easing
of Charter [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]]
standards where the primary purpose of a search is
simply to ensure that taxes are paid as and when
due. Where as here, however, we are dealing with
provisions whose stated aim is the discovery and
preservation of evidence "for the purpose of a
criminal proceeding" nothing less than the full
panoply of Charter protection is appropriate.
With that background in mind, I now turn to
those grounds of attack argued by the appellants
with regard to which we called on the respondents
to reply.
The Denial of Judicial Discretion in the Issuance
of the Search Warrant
The appellants' first and most serious attack
concentrates on the use of the word "shall" in the
first line of subsection 231.3(3). The appellants
say, and the respondents admit, that this is unique
in the Canadian statute book; all other texts pur
porting to authorize a judicial officer to issue a
search warrant are couched in permissive lan
guage, leaving to that officer the ultimate discre
tion as to whether or not the circumstances justify
an invasion of privacy. Any text which specifically
excludes such residual judicial discretion in the
issuance of a search warrant will, for that reason
alone, run afoul of sections 7 and 8 of the Charter
as authorizing an unreasonable search and seizure
and one that is in breach of the principles of
fundamental justice. I agree.
There can be no doubt that the use of the word
"shall" is normally imperative.
Furthermore, this Court, in dealing with pre
cisely the same statutory provision, has already
held that the words of subsection 231.3(3) leave no
discretion in the judge. In Solvent Petroleum
Extraction Inc. v. M.N.R., 2 Desjardins J.A.,
speaking for the Court, said [at page 24]:
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
permitted to consider whether there has been a previous sub
stantive voluntary compliance by the taxpayer, whether further
documents might be remitted voluntarily, or whether the appli
cant 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 respondents, for their part, argue that the
following passage from the Trial Judge's reasons is
a better reading of the law and should now be
followed [at pages 274-275]:
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 inter
pretation would prevail, 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 interpretation of subsection 231.3(3). More
importantly, however, the Canadian Bill of Rights [R.S.C.,
1985, Appendix III] might play a role so as to require subsec
tion 231.3(3) to be interpreted so as to preserve for a judge
discretion, to refuse warrants, in the case of abusive searches
and seizures. Section 2 of that Act when read together with
section 1 requires:
See section 11 of the Interpretation Act, R.S.C., 1985, c.
I-21.
2 [1990] 1 F.C. 20 (C.A.).
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 warrant. See generally: R. v. Young (1984), 46
O.R. (2d) 520; 13 C.C.C. (3d) 13 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 warrant 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.
With respect, it seems to me that there are
several things wrong with the interpretation pro
posed by the Trial Judge.
In the first place, and if I understand her cor
rectly, what she is suggesting in the first part of
the quoted passage is precisely the kind of "read-
ing down" against which the Supreme Court has
warned. 3
Secondly, while there is indeed "considerable
jurisprudence" going back to the old case of Julius
v. Bishop of Oxford (1880), 5 App. Cas. 214
(H.L.), to the effect that words of empowerment
("may") can in certain circumstances import obli
gation ("shall"), there is very little the other way
round: "shall" is rarely interpreted to mean
"may".
We are here dealing not with a piece of subordi
nate legislation or a statutory instrument but with
the constitutional scrutiny of a text adopted by
Parliament itself. As was said by the Supreme
Court of Canada in the Reference re Manitoba
Language Rights, [1985] 1 S.C.R. 721 [at page
737]:
As used in its normal grammatical sense, the word "shall" is
presumptively imperative. See Odgers' Construction of Deeds
and Statutes (5th ed. 1967) at p. 377; The Interpretation Act,
1867 (Can.), 31 Vict., c. 1, s. 6(3); Interpretation Act, R.S.C.
1970, c. I-23, s. 28 ("shall is to be construed as imperative"). It
See for example Hunter et al. v. Southam Inc., [ 1984] 2
S.C.R. 145, at p. 168.
is therefore incumbent upon this Court to conclude that Parlia
ment, when it used the word "shall" in s. 23 of the Manitoba
Act, 1870 and s. 133 of the Constitution Act, 1867, intended
that those sections be construed as mandatory or imperative, in
the sense that they must be obeyed, unless such an interpreta
tion of the word "shall" would be utterly inconsistent with the
context in which it has been used and would render the sections
irrational or meaningless. See, e.g. Re Public Finance Corp.
and Edwards Garage Ltd. (1957), 22 W.W.R. 312, p. 317
(Alta. S.C.) [Emphasis added.]
There is, as it seems to me, absolutely nothing in
the context of section 231.3 of the Income Tax Act
which would render an imperative interpretation of
the word "shall" in subsection 231.3(3) inconsist
ent with the balance of the section or make it
irrational or meaningless. Indeed, I can see noth
ing in the section which would point to a permis
sive or discretionary meaning for "shall". On the
contrary, the draughtsman has clearly used the
permissive "may" where this is appropriate (as for
example in subsections 231.3(1) and (5)) and the
use of "shall" in subsection 231.3(3) (as well, it
may be noted, as in subsection 231.3(6)) has every
appearance of being a deliberate choice.
Furthermore, the whole of section 231.3 repre
sents a change from the previous law 4 which was
couched in terms that were clearly permissive and
left a discretion in the hands of the judge authoriz
ing the seizure. Also, as noted above, the text of
subsection 231.3(3) is unique and differs remark
ably from all other Canadian search warrant
provisions.' I cannot view such a change from both
previous and current practice as being anything
but intentional.
4 The former subsection 231(4) which was struck down by
this Court as not meeting Charter standards on other grounds:
see Minister of National Revenue v. Kruger Inc., [ 1984] 2 F.C.
535 (C.A.).
5 The most notable is of course subsection 4870) of the
Criminal Code [R.S.C., 1985, c. C-46 (as am. by R.S.C., 1985
(1st Supp.), c. 27, s. 68)]: "A justice ... may at any time issue
a warrant" (emphasis added).
With respect, I must also take exception to the
Trial Judge's use, in the passage quoted above, of
the Canadian Bill of Rights [R.S.C., 1985,
Appendix III]. While there is clearly room for
debate as to the extent to which the Bill may still
have a role to play in post—Charter Canada, 6 that
role surely cannot be one of validating, by inter
pretation, legislation which is otherwise inadequate
on Charter grounds.
For constitutional and historical reasons, the
Bill of Rights employs an interpretative technique
for the purpose of preserving and protecting the
rights which it enshrines; it would be a sorry irony
indeed if it were now to be used to rescue infring
ing legislation from the effect of the entrenchment
of those same and other rights in the Charter.
My final comment on the quoted passage of the
Trial Judge's reasons has to do with her invocation
of the Court's power to control abuse of the pro
cess, or to add conditions to a warrant. With
respect, it seems to me that this begs the question.
If, as the respondents contend, paragraphs (a), (b)
and (c) of subsection 231.3(3) are exhaustive of all
the conditions precedent to a reasonable search, an
application which meets all those conditions
cannot be an abuse of the process. By the same
token, if the word "shall" in the opening part of
subsection 231.3(3) is to be given its normal
imperative construction, there can be no power in
the judge to attach conditions to the warrant
beyond those specifically set out in the statute
itself. Subsections 231.3(1) and 231.3(4) set out
the contents of the warrant with considerable
detail but do not, in any way, suggest any residual
discretion in the issuing judge to attach other
terms or conditions.
In their defence against the attack on the man
datory nature of section 231.3, the respondents
also rely, as did the Trial Judge, on the obiter
dictum of the British Columbia Court of Appeal in
the case of Kourtessis v. M.N.R., [1990] 1
W.W.R. 97.
6 See Singh et al. v. Minister of Employment and Immigra
tion, [1985] 1 S.C.R. 177.
In that case, the Court unanimously dismissed
on jurisdictional grounds an appeal against a deci
sion at first instance which had upheld the validity
of section 231.3.
A majority of the Court went on, however, to
deal with the substantive grounds of attack. On the
question which concerns us at the present, Locke
J.A., after quoting the text of subsections (1),(2),
and (3) of section 231.3 had this to say [at page
127]:
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 minis
ter already had enough material. This is not for the court to
say, by 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.
With respect to the last sentence of the quoted
passage, I can only repeat what I have already
said: I do not see how a judge acting under an
imperative statutory provision can invoke an inher
ent jurisdiction to refuse to do precisely that which
the legislation has declared to be reasonable and
has commanded him to do. The attachment of
conditions as to either the issuance or the execu
tion of the warrant is not authorized by the text.
The earlier part of the quoted passage, if I
understand it correctly, seems to argue that judi
cial discretion is retained in so far as the determi-
nation of the conditions set out in paragraphs
231.3(3)(a), (b) and (c) is concerned, but that
once the judge is satisfied as to their existence he
has no further discretion. One might quibble with
the first of those propositions on linguistic
grounds; I do not think it proper to characterize
the formation of an opinion as to the existence of
reasonable grounds for belief in certain facts as
being in any way the exercise of a discretion. It is
of course part of a judicial decision-making func
tion as to which, in any given case, there may be
differences of view, but that surely does not make
it a matter of discretion any more than, say, a
finding of negligence is a matter of discretion.
The real nub of the matter, however, lies in the
second proposition. To sustain it, one must argue,
as counsel for respondents did, not merely that
Parliament is entitled to set the standards as to
what is reasonable and in accordance with the
principles of fundamental justice, but also that, in
doing so, it may exclude any other consideration as
being irrelevant to those standards. In my view,
this cannot be the law.
Counsel for respondents lays great stress on the
fact that in the landmark decision of Hunter et al.
v. Southam Inc. (above), the Court carefully and
in detail laid down the conditions of a reasonable
search and seizure pursuant to section 8; nowhere
amongst them did the Court specifically include a
condition that the judicial officer issuing the war
rant should retain a discretion to refuse to do so.'
The question now is to know whether a require
ment of judicial discretion is nonetheless implicit
in the standards of reasonability set out in South-
am or, even if it is not, whether it forms part of the
' This fact itself serves to limit the scope to be put on this
Court's decision in Solvent Petroleum Extraction Inc. v.
M.N.R. (above). The point now being discussed was not argued
in that case. Thus, when Desjardins J.A. said (at p. 26) "There
is no doubt that subsection 231.3(3) meets these minimum
standards", she was referring to the standards specifically
enumerated by the Court in Southam from which she had just
quoted.
principles of fundamental justice protected by sec
tion 7. In my view, it is both.
In the first place, it will be recalled that in
Southam the Court was dealing with a legislative
provision which, however inadequate on other
grounds, left a discretion with the officer authoriz
ing the seizure.'
Secondly, and as previously noted, at the time of
the Southam decision, all other provisions author
izing searches and seizures in Canada were
couched in permissive language. Furthermore, as
the Court was unquestionably aware, historically
this had always been the case both by statute and
at common law.
Finally and most importantly, the Court in
Southam laid great emphasis on the requirement
that the officer authorizing the seizure be
independent and capable of acting judicially in
balancing the competing interests of the state and
the citizen. That requirement, as it seems to me,
given the context in which Southam was decided,
necessarily implies an ability and a need to exer
cise a judicial discretion in the authorization
process.
Accordingly, I conclude that a requirement for a
residual judicial discretion to refuse to issue a
search warrant, or to attach conditions to a war
rant when issued, is implicit in the decision in
Southam as a prerequisite to a reasonable search
and seizure in accordance with section 8 of the
Charter.
Even more important than Southam for the
purposes of the present discussion, however, is the
decision of the Supreme Court in Descôteaux et
al. v. Mierzwinski, [1982] 1 S.C.R. 860. That was
a pre-Charter case and concerned the issuance of a
search warrant under the Criminal Code to search
a lawyer's office. Lamer J., (as he then was),
8 Subsection 10(3) of the Combines Investigation Act
[R.S.C. 1970, c. C-23] which provided that an authorization to
search "may be granted" by a member of the Restrictive Trade
Practices Commission.
speaking for a unanimous Court, discussed at
length the role of judicial discretion in the issuance
of search warrants. The following passage from his
reasons is critical [at pages 888-891]:
Some would say that the justice of the peace has no discre
tion to refuse to issue a search warrant or to impose terms of
execution once the requirements of form and substance in s.
443 have been met. They would argue that in s. 443 the word
"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 reasonable
ground to believe that one of the things provided for in s.
443(1) is to be found in the place sought to be searched, but
must do so as soon as he is so satisfied, and the only condition
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 (Carter,
R.F., The Law Relating to Search Warrants, 1939, at p. 52;
Fontana, J.A., The Law of Search Warrants in Canada, 1974,
at pp. 7 and 51 et seq.; Re Pacific Press Ltd. and The Queen et
al. (1977), 37 C.C.C. (2d) 487).
I come down on the side of the discretion, as it allows more
effective judicial control of the police. Searches are an excep
tion to the oldest and most fundamental principles of the
common law, and as such the power to search should be strictly
controlled. It goes without saying that the justice may some
times be in a poor position to assess the need for the search in
advance. After all, searches, while constituting a means of
gathering evidence, are also an investigative tool. It will often
be difficult to determine definitively the probative value of a
particular thing before the police investigation has been com
pleted. Be that as it may, there are places for which authoriza
tion to search should generally be granted only with reticence
and, where necessary, with more conditions attached than for
other places. One does not enter a church in the same way as a
lion's den, or a warehouse in the same way as a lawyer's office.
One does not search the premises of a third party who is not
alleged to have participated in the commission of a crime in the
same way as those of someone who is the subject of such an
allegation. (See on this subject Fontana, J.A., The Law of
Search Warrants in Canada, at p. 174.)
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 circumstances,
such as those found in Re Pacific Press Ltd. and The Queen et
al., supra.
That case involved a search of a newspaper office for infor
mation gathered by the newspaper staff. Neither the newspaper
staff nor the newspaper itself were accused of having been
involved in the commission of an offence. In view of the special
situation of a newspaper in light of ss. 1(f) and 2 of the
Canadian Bill of Rights, R.S.C. 1970, Appendix III, Nemet2
C.J. of the British Columbia Supreme Court quashed the
search warrant issued by the justice of the peace, concluding a
follows (at p. 495):
The issuing of any search warrant is a serious matter,
especially when its issuance against a newspaper may have,
as it did, the effect of impeding its publication. To use the
words of my distinguished predecessor in United Distillers
Ltd. (1948), 88 C.C.C. 338, [1947] 3 D.L.R. 900, the Justice
of the Peace `should have reasonable information before him
to entitle him to judicially decide whether such warrant
should issue or not'. In my opinion, no such reasonable
information was before him since there was no material to
show:
1. whether a reasonable alternative source of obtaining the
information was or was not available, and
2. if available, that reasonable steps had been taken to
obtain it from that alternative source.
In my opinion, the bringing of an application for a search
warrant in these circumstances was an abuse of the process
of the Court. I, therefore, quash the warrants.
Re Pacific Press Ltd. involved a search for things provided
for in para. (b) of s. 443(1), that is, evidence; it goes without
saying that the same requirements do not apply in the case of
things provided for in paras. (a) and (c) of s. 443(1).
It could be advanced that the two conditions set out by
Nemetz C.J. should be met before a warrant is issued whenever
a search is sought to be conducted, under 443(1)(b), of prem
ises occupied by an innocent third party which are not alleged
by the information to be connected in any way with the crime.
It is not necessary for purposes of this appeal to decide that
point. It is sufficient to say that in situations such as the one in
Re Pacific Press Ltd., where the search would interfere with
rights as fundamental as freedom of the press, and, as in the
case at bar, a lawyer's client's right to confidentiality, the
justice of the peace may and should refuse to issue the warrant
if these two conditions have not been met, lest he exceeds the
jurisdiction he had ab initio. I would add one qualification to
these two conditions. The reasonable alternative referred to is
not an alternative to the method of proof but to the benefits of
search and seizure of the evidence. As I have already stated, a
search warrant is not only a means of gathering evidence but
also an investigative tool. Therefore a determination of what is
reasonable in each case will take into account the fact that a
search makes it possible not only to seize evidence but also to
ascertain that it exits, and even sometimes that the crime was
in fact committed and by whom. Seizure makes it possible to
preserve the evidence.
Moreover, even if the conditions are met, the justice of the
peace must set out procedures 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. This is also true of searches under
443(1)(a) or (c), as soon as they threaten a fundamental right.
[Emphasis added.]
I derive from this passage the proposition not
only that the attaching of conditions to a search
warrant is a necessary and essential part of the
exercise of judicial discretion but, even more
importantly, that the very existence of such discre
tion is a prerequisite to the reasonableness of the
search and to our notions of fundamental justice.
Descôteaux et al. also establishes, in my view,
that any legislative attempt to exhaustively define
and circumscribe the limits of what may be a
reasonable search is doomed to failure. In the
passage quoted, Lamer J. dealt specifically with
searches of lawyers' offices and newspaper offices
and held that in those circumstances the justice
"may and should refuse to issue the warrant" if
certain conditions were not met.
Clearly, however, Lamer J. did not suggest that
this list of circumstances was limitative. On the
contrary, he expressly left it open ("in situations
such as"). In my view, the categories of unreason
able searches are not closed and can never be so.
Legislating closed categories of unreasonable
ness is not only impossible; it is also likely, through
the operation of simple human fallibility, to give
rise to absurdities. The search and seizure provi
sions of the Income Tax Act provide an excellent
example. In section 488 [as am. by R.S.C., 1985
(1st Supp.), c. 27, s. 70] of the Criminal Code,
Parliament has enshrined the old common law rule
that, without special authorization, no search war
rant shall be executed at night. The reason for this
must surely be that the law views, and has always
viewed, night searches as an unreasonable invasion
of the citizen's privacy unless there are special
circumstances making such searches permissible.
Section 488, however, by its very terms, only
applies to search warrants issued under sections
487 and 487.1 [as added by R.S.C., 1985 (1st
Supp.), c. 27, s. 69] of the Criminal Code. There is
no equivalent limitation on the execution of search
warrants issued under section 231.3 of the Income
Tax Act. The absurdity to which the respondents'
position leads us, therefore, is that, in Parliament's
view, a night search for terrorist bombs is prima
fade unreasonable while one for books of account
is not. Indeed, although the point was not raised
before us, it is at the least arguable that section
231.3 is invalid on the sole ground that it allows
night searches without specific judicial authoriza
tion.
Parliament, in my opinion, is both legally and
factually incapable of exhaustively defining unrea
sonable searches. The ultimate protection for the
citizen against such searches lies in the vigilance of
the issuing judge and in his power to refuse to
issue the warrant even where all the conditions
established by Parliament have been met. For
Parliament to say and to mean that the judge
"shall" issue the warrant no matter what the
circumstances is to sanction unreasonable searches
and seizures and is contrary to our long-estab
lished principles of fundamental justice. Section
231.3 is accordingly of no force or effect.
The foregoing is enough to dispose of the
present appeal. However, since in my view the
legislation must be re-written, it would be useful to
discuss briefly the other grounds argued by the
appellants.
The Elimination of the Standard of Probability
It will be recalled that the standard set by
subsection 231.3(3) is that of "reasonable grounds
to believe". The appellants argue that this is not
good enough. The minimum standard must be
"reasonable and probable grounds". The appel
lants' focus on the following passage from the
decision in Southam (above), at page 168:
In cases like the present, reasonable and probable grounds,
established upon oath, to believe that an offence has been
committed and that there is evidence to be found at the place of
the search, constitutes the minimum standard, consistent with
s. 8 of the Charter, for authorizing search and seizure.
By eliminating the word "probable" from the
legislative standard, it is argued, Parliament has
suppressed the "more likely than not" standard of
proof to be applied by the issuing judge. I do not
agree.
In the first place, it seems to me that, as a
matter of simple linguistic construction, the word
"probable" in the phrase "reasonable and probable
grounds to believe" adds nothing. In this connec
tion, it is convenient to refer to the standard
dictionary definition in both official languages.
The Shorter Oxford English Dictionary gives
the following modern meaning:
Probable ... 2. Such as to approve itself to the mind; worthy of
acceptance or belief; rarely in bad sense, specious, colourable.
(Now merged in 3.) — 1872. 3. Having an appearance of truth;
that may reasonably be expected to happen, or to prove true;
likely 1606. [Emphasis added.]
Even more interesting is Robert's [Dictionnaire
alphabétique et analogique de la langue fran-
çaise] indication of an archaic definition for the
French "probable":
[TRANSLATION] "Probable" ... 1. Arch. Probable opinion: one
in which, without excluding the possibility of some other opin
ion there is nothing contrary to reason. — Rel. Probable
opinion: opinion based on presuasive though not conclusive
grounds. [Emphasis added.]
This may very well explain how the word has
come to be associated historically by lawyers with
the word "reasonable". Like the second member of
such other hallowed English legal phrases as "null
and void", "good and valid", "last will and testa
ment" etc, it does nothing.
Second, and more significant, this view of the
matter is confirmed by the judgment in Southam
itself. In a passage preceding by a few lines the one
quoted above, Dickson J., (as he then was) speak
ing for the Court said this [at page 167]:
The common law required evidence on oath which gave "strong
reason to believe" that stolen goods were concealed in the place
to be searched before a warrant would issue. Section 443 of the
Criminal Code authorizes a warrant only where there has been
information upon oath that there is "reasonable ground to
believe" that there is evidence of an offence in the place to be
searched. The American Bill of Rights provides that "no
Warrants shall issue, but upon probable cause, supported by
Oath or affirmation .... " The phrasing is slightly different
but the standard in each of these formulations is identical.
[Emphasis added.]
Finally and even if I am wrong in my view as to
the force to be given to the word "probable" in the
phrase "reasonable and probable", it is my further
opinion that a grammatical analysis of subsection
231.3(3) shows that in fact the evidentiary burden
of "more likely than not" has been met or
exceeded.
Eliminating the unnecessary words for the pur
pose of this analysis, the subsection provides for
the issuance of a warrant when a judge:
231.3 (3)
is satisfied that there are reasonable grounds to believe that:
(a) an offence ... has been committed;
(b) a document . is likely to found; and
(c) the building ... is likely to contain such a document ...
There can surely be no objection to the standard
set in paragraphs 231.3(3)(b) and (c) for the word
"likely" must have the effect of importing the
standard of probability or "more likely than not."
With respect to paragraph 231.3(3)(a), the
standard is set even higher; the requirement is for
reasonable grounds to believe that an offence has
been committed. Here, the reasonable belief is tied
to the actual commission of the offence and not to
a lower standard of mere probability.
In the upshot, therefore, I find this ground of
attack to be without merit.
The Dilution of the Standard with Respect to the
Probability of finding Evidence
The appellants' attack here concentrates very
narrowly on the wording of paragraph
231.3(3) (b), which it is convenient to reproduce:
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
(b) a document or thing that may afford evidence of the
commission of the offence is likely to be found; and [Empha-
sis added.]
The argument is that the use of the word "may"
allows the issuance of a search warrant on showing
of reasonable grounds to believe in a mere possibil
ity that the thing to be found will afford evidence
of a crime. The following passage from the judg
ment in Southam is relied on [at page 167]:
The problem is with the stipulation of a reasonable belief that
evidence may be uncovered in the search. Here again it is
useful, in my view, to adopt a purposive approach. 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 standard as the
possibility of finding evidence. This is a very low standard
which would validate intrusion on the basis of suspicion, 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.
The argument seems to me to be quite simply
unanswerable. The point is an extremely narrow
one but the Court could not have used clearer
words to indicate that a belief that evidence may
be found is not good enough.
The courts of three provinces have struck down
subsection 111(1) of the Customs Act [S.C. 1986,
c. 1] whose English (but not the French) version
contained a somewhat similar wording. See
Goguen v. Shannon (1989), 50 C.C.C. (3d) 45
(N.B.C.A.); Nima v. McInnes, [1989] 2 W.W.R.
634 (B.C.S.C.); Canada v. Aquarius Computer
(1989), 2 T.C.T. 4531 (Ont. H.C.).
While in practice, the line must be very thin
between a reasonable belief that evidence may be
found and a reasonable belief that evidence is to be
found, the Supreme Court has made it very plain
that only the second meets the requirements of the
Charter. The text of paragraph 231.3(3)(b) is
inadequate and therefore inoperative.
Other Grounds
In conclusion and for completeness' sake, it is as
well to mention three grounds argued by appel
lants' counsel upon which we did not call, on the
respondents.
The first of such grounds was based on subsec
tion 231.3(5):
231.3 ...
(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.
Counsel contended that the broad wording of
this text gave a virtually unfettered discretion to
the seizing officer and thereby vitiated any war
rant issued under section 231.3.
We did not agree.
In the first place, it seemed to us that subsection
231.3(5) was clearly severable from the rest of the
section and could not have the effect contended for
by counsel: at the very most, it could give rise to a
declaration of invalidity of the subsection and of
any seizure effected in purported compliance
therewith.
Second and even more critical, this Court's
judgment in Solvent Petroleum, supra, deals
expressly with the same ground of attack and finds
that subsection 231.3(5) "meets the test of reason
ableness and therefore of validity". We were not
persuaded that there was any good reason for us to
revisit this finding.
Counsel's final two points dealt with the ques
tion of privilege: solicitor/client and accountant/
client.
With regard to the solicitor/client privilege, the
Trial Judge said [at pages 297-298]:
... there seems little doubt that appropriate execution proce
dures 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 determi
nation as to whether the documents were properly subject to
solicitor-client privilege was filed in the Superior Court of
Quebec. That application was subsequently withdrawn. 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 invalid. My understanding of Mr. Justice
Lamer's statements in Descôteaux is that what is required is
that the proper procedure is in fact followed. That the proce
dure was not set out on the face of the warrant is not itself
determinative.
As far as the claim for accountant/client privi
lege is concerned, a claim based on a number of
provisions of Quebec law, the Trial Judge said [at
pages 292-293]:
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-51 or the Income
Tax Act.
and again [at pages 293-294]:
It is not at all strange that solicitor-client communications
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 between a solicitor
and his client so that the rendering 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 Descôteaux et al. v. Mierzwin-
ski, [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 consideration, of this nature,
in the case of accountant-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 founded upon a need to
ensure an effective system of the administration of justice.
We could see nothing to criticize in her treat
ment of either matter and accordingly did not
require to hear from the respondents.
Conclusion
For all the foregoing reasons, I would allow the
appeals, set aside the judgments of the Trial Divi
sion and substitute for them judgments quashing
the search warrants and ordering the return of
everything seized in virtue thereof; I would also
give a declaration that section 231.3 of the Income
Tax Act is of no force or effect because it is
inconsistent with sections 7 and 8 of the Charter. I
would give the appellants their costs both here and
in the Trial Division, but one set of costs only.
PRATTE J.A.: I agree.
MARCEAU J.A.: I agree.
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.