A-207-90
C. D. (Applicant)
v.
Minister of National Revenue (Respondent)
INDEXED As: C.D. v. M.N.R. (C.A.)
Court of Appeal, Mahoney, MacGuigan and
Décary JJ.A.—Ottawa, March 15, 1991.
Income tax — Practice — Tax Court of Canada Act, s. 16
permitting in camera hearing where justified by circumstances
— Applicant fearing disciplinary proceedings by professional
body if conduct disclosed through tax proceedings — Unlikely
to proceed with appeal from reassessment if not held in
camera — Not ground for in camera hearing — Statement in
Scott v. Scott (H.L.) exclusion of public permitted where
parties otherwise deterred from seeking justice limited to cases
where secrecy of essence i.e. secret processes — Attorney
General of Nova Scotia et al. v. Maclntyre, incorporating
Scott into Canadian law, only re: secret processes — Tax
proceedings not frustrated if held in open court — Confiden
tiality for purposes of Income Tax Act, recognized by s. 241,
not circumstance justifying in camera hearing under Tax
Court of Canada Act.
Constitutional law — Charter of Rights Fundamental
freedoms — Charter, s. 2(b) recognition of freedom of press
reinstating principle of openness of courts in original dimen
sion, if principle diluted by statutory exceptions Statutory
provision permitting in camera proceedings constitutionally
valid only in clearest of circumstances, i.e. where need to
protect social values of superordinate importance — Need not
to deter taxpayers from making honest self-assessment of
income tax by subjecting them to adverse consequences not
value of superordinate importance — Fear of disciplinary
proceedings for breach of rules of professional body not
ground for ordering in camera hearing under Tax Court of
Canada Act, s. 16.
Practice Evidence — Application for order Tax Court
hearing held in camera — If applicant testifies, may invoke
Canada Evidence Act s. 5, Charter s. 13 before disciplinary
tribunal — Person facing possible disciplinary proceedings
should not have more protection than Charter affording wit
nesses fearing criminal proceedings — Fear of disciplinary
proceedings for breach of rules of professional body not
ground for ordering in camera hearing under Tax Court of
Canada Act, s. 16.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canada Evidence Act, R.S.C., 1985, c. C-5, ss. 3, 5.
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, /982, Schedule B, Canada Act
/982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix I1,
No. 44], ss. 2(b), 13.
Federal Court Act, R.S.C., 1985, c. F-7, s. 28.
Income Tax Act, S.C. 1970-71-72, c. 63, ss. 16, 241 (as
am. by S.C. 1980-8l-82-83, c. 48, s. 107; c. 68, s. 117;
c. 140, s. 126; 1984, c. 19, s. 30; 1986, c. 55, s. 77;
1987, c. 46, s. 68; 1988, c. 51, s. 14; c. 55, s. 183; 1990,
c. 1, s. 30; c. 35, s. 26).
Tax Court of Canada Act, R.S.C., 1985, c. T-2, s. 16 (as
am. by R.S.C., 1985 (1st Supp.), c. 48, s. I).
CASES JUDICIALLY CONSIDERED
APPLIED:
Edmonton Journal v. Alberta (Attorney General), [ 1989]
2 S.C.R. 1326; (1989), 103 A.R. 321; 64 D.L.R. (4th)
577; [1990] 1 W.W.R. 577; 71 Alta. L.R. (2d) 273; 45
C.R.R. l; 102 N.R. 321.
DISTINGUISHED:
Scott v. Scott, [1913] A.C. 417 (H.L.); Attorney General
of Nova Scotia et al. v. Maclntyre, [1982] 1 S.C.R. 175;
(1985), 49 N.S.R. (2d) 609; 132 D.L.R. (3d) 385; 96
A.P.R. 609; 65 C.C.C. (2d) 129; 26 C.R. (3d) 193; 40
N.R. 181; "A (Dr.)" and Council of College of Physi
cians and Surgeons, Re (1965), 53 D.L.R. (2d) 667; 53
W.W.R. 313 (B.C.S.C.).
CONSIDERED:
Attorney-General v. Butterworth, [1962] 3 All E.R. 326
(C.A.); B. (otherwise P.) v. Attorney-General, [1965] 3
All E.R. 253 (P.D.A.); R. v. A., [1990] I S.C.R. 992;
(1990), 55 C.C.C. (3d) 570; 77 C.R. (3d) 232; 108 N.R.
214.
REFERRED TO:
McCleery v. The Queen, [1974] 2 F.C. 352; (1974), 50
D.L.R. (3d) 387; 5 N.R. 229 (C.A.); R v Chief Registrar
of Friendly Societies ex p New Cross Building Society,
[1984] 2 All ER 27 (C.A.).
COUNSEL:
Joel A. Nitikman for applicant.
Wilfrid Lefebvre, Q.C., and Sandra Phillips
for respondent.
SOLICITORS:
Fraser & Beatty, Vancouver, for applicant.
Ogilvy Renault, Montréal, for respondent.
The following are the reasons for judgment
rendered in English by
DÉCARY J.A.: The applicant appealed to the
Tax Court of Canada from a reassessment of his
liability to tax made by the respondent. Prior to
the hearing of the appeal, counsel for the applicant
made an application under section 16 of the Tax
Court of Canada Act' for an order that the hear
ing be held in camera.
The application for an in camera hearing was
based on the fact that the applicant, a member of
a professional body, was fearful that his conduct,
which would be revealed through the tax proceed
ings, might subject him to disciplinary measures.
In a "without prejudice" conversation he had with
a representative of that professional body whom he
had contacted to enquire whether his fears were
well founded, he was told that if the tax case were
to be publicized, a complaint was likely to be filed
against him by a fellow member, he would likely
be brought before a disciplinary board and he
might be subject to disciplinary proceedings. 2 The
applicant testified that until that conversation, his
intention was to proceed with his appeal from the
reassessment, but that as a result of the conversa
tion, he "probably won't proceed" with the appeal
if it is not heard in camera.
' Section 16 of the Tax Court of Canada Act, R.S.C., 1985,
c. T-2, as amended by R.S.C., 1985 (1st Supp.), c. 48, s. 1, read
at the time as follows:
16. A hearing before the Court may, on the application of
the appellant, be held in camera if the appellant establishes to
the satisfaction of the Court that the circumstances of the case
justify in camera proceedings.
2 While counsel for the applicant insisted at the hearing that
the applicant was courting "professional suicide" if the tax case
went public, there is nothing in the evidence that suggests what
the disciplinary action might be.
The Associate Chief Justice of the Tax Court
dismissed the application for an in camera hearing
and the applicant thereafter filed this section 28
[Federal Court Act, R.S.C., 1985, c. F-7] applica
tion, which was ordered by this Court to be held in
camera.
Counsel for the applicant relied heavily on the
following statement by Earl Loreburn in Scott v.
Scott: 3
It would be impossible to enumerate or anticipate all possible
contingencies, but in all cases where the public has been
excluded with admitted propriety the underlying principle, as it
seems to me, is that the administration of justice would be
rendered impracticable by their presence, whether because the
case could not be effectively tried, or the parties entitled to
justice would be reasonably deterred from seeking it at the
hands of the Court. [My emphasis.]
In counsel's view, that statement was adopted by a
majority of the Law Lords in that case and intro
duced into Canadian jurisprudence by the decision
of Mr. Justice Dickson, later Chief Justice, in
Attorney General of Nova Scotia et al. v.
MacIntyre. 4
Counsel argued, basically, that the applicant
had a fear of adverse consequences from testifying
in open court, that he was deterred from seeking
justice in the Tax Court if the proceedings were in
public and that the test set out by Earl Loreburn
applied to his case.
With respect, I am unable to agree with the
interpretation given by counsel to that test nor
with his submission that Earl Loreburn's state
ment was approved by his colleagues and became
part of our jurisprudence through the Maclntyre
decision.
That test was formulated by Earl Loreburn in a
very specific context, i.e., "when the subject-
matter of the action would be destroyed by a
hearing in open Court, as in a case of some secret
process of manufacture," and when "There would
be in effect a denial of justice" (at page 445) in
the particular action. Where secrecy or confiden
tiality of information is precisely what is at issue in
a proceeding, the party seeking to protect that
information would most certainly be deterred from
3 [1913] A.C. 417 (H.L.), at p. 446.
4 [ 1982] 1 S.C.R. 175.
seeking justice in the hands of the Court if "the
secret was to be communicated to all the world"
(at page 445). In the case at bar, the applicant is
deterred from seeking justice not because the
actual proceedings in the Tax Court which he
wants to have heard in camera would be frustrated
if they were held in open court, but because some
other hypothetical proceedings in another tribunal
might take place. This is not, I suggest, what Earl
Loreburn had in mind.'
Even if this was what Earl Loreburn had in
mind, a close reading of the opinions of the five
Law Lords who sat in Scott reveals that the extent
of the consensus was much narrower 6 and can be
reduced to two propositions. The first one is that
the broad principle that the courts must administer
justice in public is "one of the surest guarantees of
our liberties" and "the very foundations of public
and private security."' The second one is that this
broad principle is "subject to apparent exceptions"
which are themselves "the outcome of a yet more
fundamental principle that the chief object of
Courts of justice must be to secure that justice is
done." 8 These "narrowly defined exceptions" 9 .. .
"which are acknowledged to the application of the
rule prescribing the publicity of Courts of justice
are, first, in suits affecting wards; secondly, in
Counsel submitted, on the basis of the decision of Lord
Denning, M.R. in Attorney-General v. Butterworth, [1962] 3
All E.R. 326 (C.A.), that courts can sit in camera when public
hearings could deter witnesses from coming forward in aid of
legal proceedings. This is a most erroneous reading of that
decision, which simply declared "that the victimisation of a
witness is a contempt of court, whether done whilst the pro
ceedings are still pending or after they have finished" (at p.
329). This decision in effect weakens, rather than supports, the
"deterrence" test as interpreted by the applicant.
6 In B. (otherwise P.) v. Attorney-General, [1965] 3 All E.R.
253 (P.D.A.), Wrangham J. commenting on the "deterrence"
test formulated by Earl Loreburn, stated that "That, however,
was not, as I understand it, the view clearly expressed by any of
the other learned law lords in that case" (at p. 255).
' Lord Shaw of Dunfermline, at p. 476.
8 Viscount Haldane, L.C., at p. 437.
9 Ibid., at p. 434.
lunacy proceedings; and, thirdly, in those cases
where secrecy, as, for instance, the secrecy of a
process of manufacture or discovery or invention—
trade secrets—is of the essence of the cause . .
The third case—that of secret processes, inven
tions, documents, or the like—depends upon this:
that the rights of the subject are bound up with the
preservation of the secret. To divulge that to the
world, under the excuse of a report of proceedings
in a Court of law, would be to destroy that very
protection which the subject seeks at the Court's
hands." 10
It is true, as Earl Loreburn points out, that "[i]t
would be impossible to enumerate or anticipate all
possible contingencies", but any extension of the
recognized exceptions beyond the narrow scope
given to them by Viscount Haldane, by the Lord of
Halsbury and by Lord Shaw of Dunfermline
would need to be done with extreme care and in
most unique circumstances.
In any event, it is somewhat futile to speculate
as to the proper reading of the view of the Law
Lords in Scott because, in my opinion, they were
incorporated into Canadian law only to the extent
that they were adopted by Dickson J., later Chief
Justice, in Maclntyre," which is as follows:
It is now well established ... that covertness is the exception
and openness the rule. Public confidence in the integrity of the
court system and understanding of the administration of justice
are thereby fostered. As a general rule the sensibilities of the
individuals involved are no basis for exclusion of the public
from judicial proceedings.
The authorities have held that subject to a few well-recognized
exceptions, as in the case of infants, mentally disordered per
sons or secret processes, all judicial proceedings must be held in
public.
In my view, curtailment of public accessibility can only be
justified where there is present the need to protect social values
of superordinate importance.
10 Lord Shaw of Dunfermline, at pp. 482-483.
Supra, note 4, at pp. 185-187. See also, McCleery v. The
Queen, [1974] 2 F.C. 352 (C.A.), at p. 357.
A recent illustration of a unique circumstance
that justified a widening of the "classes" indicated
in Scott is found in R. v. A., 12 where the Supreme
Court of Canada ordered that proceedings before
it be held in camera on the basis that disclosure
posed a serious risk to the safety of a person and to
members of his family, when that person was
under the protection of the RCMP and subpoena
ed to testify in a criminal trial.
In reading Scott and Maclntyre, we should keep
in mind (a) that in neither case was there a
statutory authority given to the courts to order
hearings in camera and (b) most importantly, that
Charter [Canadian Charter of Rights and Free
doms, being part I of the Constitution Act, 1982,
Schedule B, Canada Act 1982, 1982, c. 11 (U.K.)
[R.S.C., 1985, Appendix II, No. 44]] consider
ations did not come into play.
One could argue that common law exceptions
have lost some of their rigidity with the advent of
numerous statutory exceptions through which Par
liament has expressly indicated to the courts that,
with respect to a given situation, the principle of
openness could be dispensed with. One could
argue, to the contrary, that statutory provisions
have generally been made to confirm cases which
would otherwise benefit from the common law
exceptions.
There is no need, however, to choose between
these two approaches for, with the advent of the
Charter and more specifically with the recognition
in its paragraph 2(b) of the freedom of the press,
openness of the courts became an even better
recognized and protected principle than it was at
common law. As Cory J. stated in Edmonton
Journal v. Alberta (Attorney General): 13
It seems that the rights enshrined in s. 2(b) should therefore
only be restricted in the clearest of circumstances.
Therefore, a statutory provision permitting in
camera proceedings will only be constitutionally
12 [1990] 1 S.C.R. 992.
13 [1989] 2 S.C.R. 1326, at p. 1336.
valid "in the clearest of circumstances", which
may well be, to use the words of Dickson J. in
Maclntyre, "where there is present the need to
protect social values of superordinate importance."
In that sense I would say that the Charter has
reinstated the principle of openness in its original
dimension, if that principle had at all been diluted
through statutory exceptions.
In the case at bar, the applicant's fear of adverse
consequences on his career should the Tax Court
proceedings be conducted in public cannot, by any
stretch of the imagination, be one of these "clear-
est of circumstances" which would justify a depar
ture from the broad principle of openness of our
court system. The public interest right which the
applicant is seeking to put in the balance against
the public interest right of openness, is that of the
need not to deter taxpayers from making honest
self-assessment of their income tax by subjecting
them to adverse consequences. Had that public
interest right been a "value of superordinate
importance" that called for hearings in camera,
Parliament would have made such hearings the
rule rather than the exception in section 16 of the
Act. It is true that section 241 of the Income Tax
Act [S.C. 1970-71-72, c. 63 (as am. by S.C.
1980-81-82-83, c. 48, s. 107; c. 68, s. 117; c. 140, s.
126; 1984, c. 19, s. 30; 1986, c. 55, s. 77; 1987, c.
46, s. 68; 1988, c. 51, s. 14; c. 55, s. 183; 1990, c.
1, s. 30; c. 35, s. 26)] recognizes that confidential
ity is necessary for the proper and effective
administration of the Income Tax Act, but I am
not prepared to consider confidentiality for the
purposes of the Income Tax Act as one of the
circumstances that would, under section 16 of the
Tax Court of Canada Act, "justify in camera
proceedings".
To allow someone to seek justice in camera for
the sole purpose of hiding from a professional body
a conduct which might lead to disciplinary pro
ceedings, would be doing precisely what Lord
Shaw of Dunfermline, in Scott, at pages 484-485,
warned the courts against:
There remains this point. Granted that the principle of open
ness of justice may yield to compulsory secrecy in cases involv
ing patrimonial interest and property, such as those affecting
trade secrets, or confidential documents, may not the fear of
giving evidence in public, on questions of status like the present,
deter witnesses of delicate feeling from giving testimony, and
rather induce the abandonment of their just right by sensitive
suitors? And may not that be a sound reason for administering
justice in such cases with closed doors? For otherwise justice, it
is argued, would thus be in some cases defeated. My Lords, this
ground is very dangerous ground. One's experience shews that
the reluctance to intrude one's private affairs upon public
notice induces many citizens to forgo their just claims. It is no
doubt true that many of such cases might have been brought
before tribunals if only the tribunals were secret. But the
concession to these feelings would, in my opinion, tend to bring
about those very dangers to liberty in general, and to society at
large, against which publicity tends to keep us secure ... 14
Moreover, to interpret section 16 in such a way
as that suggested by the applicant might well allow
for an unwarranted departure from the rules set up
by sections 3 and 5 of the Canada Evidence Act's
and by section 13 of the Charter. Perhaps, and I
do not want to be seen as expressing any view on
this issue, the applicant, if he were to testify before
the Tax Court, might later avail himself before the
disciplinary tribunal of the protection against
incriminating evidence afforded by section 5 of the
Canada Evidence Act and by section 13 of the
Charter; but even if that were so, neither the
Charter nor the Canada Evidence Act would
afford him any protection against the publicity of
the hearing before the Tax Court. With respect to
evidence that might lead to criminal proceedings,
the protection given would be that against its use,
14 Counsel relied on "A (Dr.)" and Council of College of
Physicians and Surgeons, Re (1965), 53 D.L.R. (2d) 667
(B.C.S.C.), where the Supreme Court of British Columbia
accepted to hear in camera an appeal from a decision of the
College of Physicians and Surgeons depriving him of the right
to practice his profession. The hearing before the council was in
camera. That decision is not relevant, being at the most an
indication that appeal or review courts might well decide to
have in camera hearings when the proceedings appealed from
or reviewed were themselves in camera. This, indeed, was the
practice followed by this Court in the present case. See, on this
practice, R y Chief Registrar of Friendly Societies ex p New
Cross Building Society, [1984] 2 All ER 27 (C.A.), at p. 31,
Sir John Donaldson M.R.
15 R.S.C., 1985, c. C-5.
and not that against its publicity, but with respect
to eventual disciplinary proceedings the protection
would be against the use of the evidence as well as
against its publicity: this is an untenable position.
To permit an in camera hearing in the Tax Court
for fear of possible disciplinary measures would be
tantamount to affording the applicant a protection
not even afforded by the Charter to witnesses
fearing criminal proceedings.
To use the words of the Associate Chief Justice
of the Tax Court, "I know of no case, and (counsel
for the applicant) could find none, that on its facts
suggests that apprehension on the part of an appel
lant that he might be the subject of disciplinary
proceedings for a breach of the rules of the profes
sional body to which he belongs is a proper ground
for ordering an in camera hearing in a court of
law."
There being no error of law and the Associate
Chief Justice having judicially exercised his discre
tion on the facts of the case, I would dismiss the
application, with the proviso that the in camera
order granted with respect to the proceedings in
this Court be continued and that these reasons be
made public with the letters "C.D." being used to
identify the applicant.
MAHONEY J.A.: I agree.
MACGuIGAN 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.