Galligan,
J:—By
this
application
the
applicants
seek
to
challenge
the
constitutional
validity
of
a
demand
served
personally
upon
their
lawyer
pursuant
to
paragraph
231
(3)(b)
of
the
Income
Tax
Act
and
of
that
statutory
provision
itself.
The
constitutional
challenge
is
based
upon
section
8
of
the
Charter
which
protects
against
unreasonable
search
and
seizure.
The
fundamental
argument
is
that
the
effect
of
that
provision
when
coupled
with
the
provisions
of
subsection
232(3)
of
the
Act
is
the
authorization
of
a
search
and
seizure
which,
for
the
reasons
given
by
the
Supreme
Court
of
Canada
in
Hunter
v
Southam
Inc
(1984),
14
CCC
(3d)
97,
violates
section
8
of
the
Charter.
It
is
not
necessary
to
review
the
facts
in
detail.
The
scenario
is
familiar
to
most
lawyers.
On
March
19,
1985,
two
investigators
from
the
Department
of
National
Revenue
appeared,
without
prior
notification
or
an
appointment,
at
the
office
of
the
applicant’s
solicitor
and
served
him
with
a
demand
notice
which
read
as
follows:
Dear
Sir:
Re:
Robert
D
Joseph
Charmaine
E
Joseph
501
Video
Limited
For
purposes
related
to
the
administration
or
enforcement
of
the
Income
Tax
Act
pursuant
to
the
provisions
of
paragraph
231(3)(b)
of
the
said
Act,
I
require
from
you,
without
delay,
production
of
books
and
records
as
follows:
All
books,
letters,
accounts,
invoices,
statements
(financial
or
otherwise)
or
other
documents
pertaining
or
relating
to
the
above-noted
parties.
To
comply
with
this
requirement
you
should
produce
the
books
and
records
hereby
required
to
the
officer
of
this
Department
presenting
this
requirement
to
you.
Your
attention
is
directed
to
the
penalties
provided
in
subsection
238(2)
of
the
Income
Tax
Act
for
failure
to
comply
with
this
requirement.
Yours
truly,
Mr
Reilly
was
in
possession
of
some
files
relating
to
work
he
had
done
for
the
applicants
over
the
years.
He
claimed
that
the
applicants
had
solicitor/
client
privilege
respecting
the
documents
contained
in
them.
In
compliance
with
subsection
232(3)
of
the
Act,
the
investigators
without
examining
or
copying
any
documents,
seized
the
files
and
their
contents,
sealed
them
and
delivered
them
to
the
custody
of
the
sheriff.
The
relevant
provisions
of
the
Act
are
the
following:
S.
231(3)
The
Minister
may,
for
any
purposes
related
to
the
administration
or
enforcement
of
this
Act,
by
registered
letter
or
by
a
demand
served
personally,
require
from
any
person
(b)
production,
or
production
on
oath,
of
any
books,
letters,
accounts,
invoices,
statements
(financial
or
otherwise)
or
other
documents,
within
such
reasonable
time
as
may
be
stipulated
therein.
And:
S.
232(3)
Where
an
officer
is
about
to
examine
or
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
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
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
upon
a
person
to
act
as
custodian,
in
the
custody
of
such
person.
When
a
claim
is
made
for
solicitor/client
privilege
the
Act,
by
subsections
232(4)
and
(5),
provides
for
a
judicial
determination
of
which
of
the
seized
documents
are
privileged
and
which
are
not.
It
is
not
necessary
to
review
those
legal
provisions
in
any
detail.
I
note
in
passing
that
by
virtue
of
subsection
232(9)
no
costs
may
be
awarded
in
connection
with
the
hearing
of
an
application
to
determine
the
privilege
issue.
I
emphasize
that
subsection
231(3)
provides
that
the
demand
served
pursuant
to
it
requires
production
of
the
documents
“within
such
reasonable
time
as
may
be
stipulated
therein".
The
demand
in
this
case
required
their
production
"without
delay".
The
words
"without
delay"
are
in
their
ordinary
sense
the
meaning
of
the
word
"immediate".
See
Shorter
Oxford
Dictionary
(1973),
vol
1,
p
1025,
col
1:
Immediate
.
.
.
4.
Of
time:
.
.
.
b.
Taking
effect
without
delay;
.
.
.
[Emphasis
added.]
During
the
course
of
argument
I
asked
counsel
whether
a
demand
which
required
production
without
delay
ie
immediately,
was
sanctioned
by
a
statute
which
authorized
the
requirement
of
production
within
such
reasonable
time
as
may
be
stipulated
in
the
demand.
It
had
occurred
to
me
that
if
Parliament
had
intended
to
authorize
the
requiring
of
immediate
production
it
might
reasonably
have
been
expected
to
say
so.
Mr
Reilly
answered
that
he
felt
that
the
decision
of
the
Federal
Court
of
Appeal
in
James
Richardson
&
Sons
Ltd
v
MNR,
[1982]
CTC
239;
82
DTC
6204,
precluded
him
from
attacking
the
validity
of
the
demand
on
other
than
constitutional
grounds.
However
he
pointed
to
the
words
“without
delay”
as
evidence
of
the
unreasonableness
of
what
he
called
the
search
and
seizure.
(In
the
course
of
these
reasons
I
specifically
refrain
from
expressing
my
opinion
as
to
whether
or
not
what
transpired
on
March
19,
1985
constituted
a
search.)
Mr
Pinos
replied
that
the
Richardson
case
decided
the
matter
and
that
it
was
determinative
of
the
question.
Both
counsel
indicated
clear
preference
to
have
this
case
decided
on
the
Charter
constitutional
issues
rather
than
on
the
narrow
issue
of
the
legal
validity
of
the
demand.
Argument
proceeded
on
that
basis.
During
my
reflection
on
this
case
since
reserving
judgment
upon
it
I
have
been
reminded
of
the
comments
of
the
Supreme
Court
of
Canada
delivered
by
Estey,
J
in
Re
Skapinker
v
The
Law
Society
of
Upper
Canada
(1984),
9
DLR
(4th)
161
at
181:
The
development
of
the
Charter
as
it
takes
its
place
in
our
constitutional
law,
must
necessarily
be
a
careful
process.
Where
issues
do
not
compel
commentary
on
these
new
Charter
provisions,
none
should
be
undertaken.
Service
Employees
v
Broadway
Manor
(1984),
48
O.R.
(2d)
225
and
Information
Retailers
v
Metropolitan
Toronto
(1984),
48
O.R.
(2d)
290,
are
decisions
of
the
Court
of
Appeal
and
the
Divisional
Court
respectively,
to
like
effect.
It
seems
therefore
that
the
courts
should
only
decide
cases
based
upon
Charter
considerations
where
they
are
compelled
to
do
so.
Therefore,
notwithstanding
counsel's
preference
to
have
this
case
decided
upon
Charter
considerations,
it
is
my
opinion
that
if
the
demand
served
on
March
19,
1985
was
an
invalid
one
there
would
be
no
compelling
reason
to
decide
the
Charter
arguments.
It
would
indeed
be
inappropriate
for
me
to
do
so.
I
therefore
intend
to
decide
whether
or
not,
in
my
opinion,
the
demand
is
legally
valid.
My
reading
of
subsection
231(3)
of
the
Act
leads
me
to
the
conclusion
that
in
effect
it
entitles
the
Minister
to
production
of
documents
upon
reasonable
notice.
What
the
demand
in
this
case
does
on
its
face
is
demand
production
without
any
notice.
Subsection
231(3)
forms
part
of
a
scheme
whereby,
if
production
is
demanded
of
a
taxpayer's
lawyer,
solicitor/client
privilege
is
protected
if
the
lawyer
claims
it
for
his
client.
Often,
as
apparently
was
the
case
here,
some
or
all
of
the
files
in
a
lawyer’s
possession
are
inactive
ones
or
ones
that
the
lawyer
has
not
had
occasion
to
look
at
for
weeks,
months
or
even
years.
No
lawyer
can
fairly
be
expected
to
remember
immediately
every
document
which
is
in
the
files
and
immediately
make
a
considered
decision
about
which
documents
are
privileged
and
which
are
not.
Thus,
in
order
properly
to
protect
the
client,
the
lawyer
must
claim
privilege
for
all
of
the
documents
in
the
file.
This
invariably
leads
to
a
subsection
232(4)
application.
Those
can
be
lengthy
(one
at
which
I
recently
presided
lasted
two
or
three
full
days),
and
are
invariably
expensive
to
the
client
because
the
Act
prevents
costs
being
awarded
to
him
if
his
lawyer's
claim
of
privilege
turns
out
to
be
well-founded
for
some
or
all
of
the
documents
for
which
privilege
has
been
claimed.
If
the
lawyer
is
given
reasonable
time
between
receipt
of
the
demand
and
the
time
when
production
is
required
to
be
made,
it
would
allow
time
for
a
considered
decision
about
which
documents
ought
to
call
for
a
claim
of
privilege
and
which
would
not.
Reasonable
time
for
a
considered
decision
would
permit
a
lawyer
to
decide
to
produce
documents
that
were
not
privileged
thereby
reducing
the
length
of
the
subsection
232(4)
application,
and
the
expense
to
the
client.
Perhaps,
indeed,
it
could
eliminate
the
need
for
such
an
application.
The
scheme
for
protection
of
solicitor/client
privilege,
as
is
apparent
from
subsection
232(3),
requires
that
immediately
upon
the
claim
of
privilege
being
raised
the
documents
must
be
seized,
sealed
and
removed
from
the
lawyer
pending
the
subsection
232(4)
application.
The
lawyer
can
only
have
access
to
the
documents
pending
that
application
with
leave
of
a
judge
pursuant
to
subsection
232(13)
(and
a
judge
with
juridsiction
to
permit
such
access
is
not
always
conveniently
available
in
all
parts
of
Canada).
In
the
case
of
active
files
the
consequences
of
such
a
seizure
could
have
seriously
prejudicial
consequences
upon
the
legitimate
advancement
of
the
client's
affairs.
For
example
the
seizure
of
a
litigation
file
from
a
lawyer
on
the
eve
of
trial
might
cause
grave
prejudice
to
the
client.
In
the
event
reasonable
time
were
given
between
the
service
of
the
demand
and
the
time
when
production
was
required
a
lawyer
could
make
copies
of
the
documents
for
which
he
intended
to
claim
privilege,
so
that
after
the
seizure
was
made
he
could
continue
in
the
legitimate
prosecution
of
his
client’s
affairs
without
being
deprived
of
the
contents
of
the
files,
or
being
subjected
to
the
inconvenience
of
having
to
apply
to
a
judge
to
get
access
to
them.
If
reasonable
notice
were
given
it
would
enable
the
lawyer
to
consult
with
his
client
and
perhaps
obtain
instructions
to
waive
a
claim
for
privilege
to
some
or
all
of
the
documents
in
the
files,
thus
either
eliminating
the
need
for
a
subsection
232(4)
application
or
at
least
reducing
the
length
of
it.
Any
suggestion
that
if
notice
was
given
certain
documents
or
files
might
disappear
before
production
was
made,
would
amount
to
an
unwarranted
slur
upon
the
legal
profession
as
a
whole
whose
members
are
officers
of
the
courts
of
this
land
and
who
are
generally
honest,
conscientious
and
responsible
and
do
not
obstruct
the
course
of
justice.
Indeed,
when
it
enacted
subsection
231(3)
with
the
knowledge
that
demands
would
be
served
on
lawyers,
Parliament
in
providing
for
reasonable
time
before
production
was
required
obviously
assumed
that
members
of
the
legal
profession
could
be
relied
upon
not
to
destroy
or
hide
documents
that
they
were
being
called
upon
to
produce.
If
the
Minister
has
reasonable
grounds
to
believe
that
a
particular
lawyer
would
act
improperly
if
given
reasonable
notice
he
has
the
option
to
try
to
convince
a
judge
of
that
fact
and
obtain
prior
judicial
approval
and
then
search
the
lawyer's
office
pursuant
to
subsection
231(4).
The
last
paragraph
of
the
demand
draws
the
recipient's
attention
to
certain
penal
provisions
of
the
Act.
In
effect
it
says
comply
with
the
demand
or
face
prosecution.
It
is
not
difficult
to
imagine
the
extent
of
the
disruption
of
the
lawyer's
day
when
he
was
told
that
he
must
search
his
files
and
produce
those
of
the
applicants
immediately
or
face
prosecution.
What
if
he
was
about
to
leave
the
office
to
represent
a
client
who
was
due
to
appear
in
court?
What
if
he
was
scheduled
to
be
in
the
registry
office
to
close
a
real
estate
transaction
on
behalf
of
a
client?
What
if
he
was
leaving
for
the
hospital
to
have
a
will
signed
by
a
dying
client?
What
of
the
inconvenience
of
clients
who
are
waiting
to
see
him?
I
cannot
conceive
that
Parliament
in
enacting
subsection
231(3)
intended
that
everything
must
stop
when
the
taxman
arrives
unannounced,
that
everyone's
convenience
is
subordinate
to
that
of
the
Minister
and
his
agents.
Reasonable
time
to
comply
with
the
requirement
to
produce
would
eliminate
the
disruption
of
the
lawyer’s
day
and
the
inconvenience
and
potential
prejudice
to
others.
It
seems
to
me
therefore
that
there
are
sound
practical
considerations
that
weigh
against
interpreting
“within
such
reasonable
time"
as
meaning
“without
delay”
or
“immediately"
in
the
case
of
a
demand
served
upon
a
taxpayer's
lawyer.
The
location
of
these
provisions
suggests
to
me
that
Parliament
intended
that
the
provisions
of
subsection
231(3)
were
to
be
used
for
routine
nonurgent
investigations.
They
are
found
immediately
before
provisions
providing
for
the
obtaining
of
prior
judicial
approval
to
search
when
the
Minister
has
reasonable
and
probable
grounds
to
believe
that
an
offence
has
been
or
is
likely
to
be
committed
and
to
seize
documents
which
might
provide
evidence
of
that
offence.
I
cannot
imagine
that
Parliament
intended
that
a
subsection
231(3)
demand
could
be
used
as
an
easy
alternative
to
the
necessity
of
obtaining
prior
judicial
approval
under
subsection
231(4),
or
perhaps
a
search
warrant
under
the
Criminal
Code
if
that
latter
remedy
is
legally
available.
It
is
interesting
to
observe
from
the
material
filed
by
the
respondent
that
the
Minister
in
fact,
well
before
March
19,
1985,
had
formed
the
opinion
upon
what
he
swore
were
reasonable
and
probable
grounds
that
the
applicant
Robert
D.
Joseph
had
committed
an
offence
under
the
Act.
Upon
information
under
oath
the
Minister
applied
for
and
obtained
a
warrant,
apparently
under
the
provisions
of
the
Criminal
Code,
to
search
his
premises
(I
specifically
make
no
comment
upon
the
legal
validity
of
such
a
warrant
in
the
light
of
such
cases
as
Goodbaum
v
Q
(1977),
38
CCC
(2d)
473;
Attorney
General
v
Doe
(1979),
49
CCC
(2d)
533;
IMP
Group
Limited
v
Q
(1981),
58
CCC
(2d)
510;
and
Coulson
v
Q
(1979),
51
CCC
(2d)
471).
That
warrant
was
executed
on
March
19,
1985,
the
day
the
demand
under
subsection
231(3)
was
served
upon
Mr
Joseph's
lawyer.
The
only
conclusion
that
I
can
draw
from
the
background
and
the
coincidence
of
events
is
that
the
demand
pursuant
to
subsection
231(3)
was
used
in
lieu
of
getting
a
judicial
authorization
to
search
under
subsection
231(4)
of
the
Act,
or
a
warrant
under
the
provisions
of
the
Criminal
Code
to
search
for
documents
which
might
afford
evidence
of
the
offence
which
the
Minister
believed
had
been
committed
by
Mr
Joseph.
I
cannot
accept
that
the
justifiable
wish
of
the
Minister
to
find
evidence
of
a
suspected
offence
should
lead
a
court
to
interpret
the
words
“reasonable
time”
as
meaning
“without
delay”
or
“immediately".
From
the
scheme
of
the
Act
I
think
I
must
infer
that
by
enacting
the
provisions
contained
in
subsections
231(3)
and
(4),
and
locating
them
one
after
the
other,
Parliament
intended
to
give
the
Minister
the
option
of
obtaining
prior
judicial
authorization
and
conducting
a
search
or
of
requiring
production
of
documents
upon
reasonable
notice.
If
he
thinks
an
offence
has
been
committed
and
that
there
is
a
real
danger
that
documents
may
disappear
if
he
gives
notice,
then
he
has
the
option
of
trying
to
convince
a
judicial
officer
of
that
fact.
If
successful
he
can
then
conduct
his
search
and
if
anything
is
found
his
seizure.
I
do
not
think
that
Parliament
intended
the
Minister
to
be
able
to
use
subsection
231(3)
as
a
half-way
house
of
immediate
production
without
prior
judicial
authorization
by
the
transparent
device
of
changing
a
statutory
requirement
of
reasonable
notice
into
one
of
no
notice.
In
my
view
a
“reasonable
time”
is
not
“without
delay”
or
“immediately”.
The
concepts
are
mutually
exclusive.
A
reasonable
time
contemplates
some
delay.
It
is
my
opinion
that
a
statute
which
authorizes
a
demand
requiring
the
recipient
thereof
to
be
given
a
reasonable
time
to
act,
does
not
authorize
a
demand
that
requires
the
recipient
to
act
without
delay
or
immediately.
Before
holding
this
demand
to
be
void
I
must
examine
Richardson's
case
to
see
if
it
prevents
me
from
so
doing.
In
that
case
there
are
statements
which
at
first
glance
appear
to
be
authority
for
the
legal
proposition
that
a
demand
to
produce
without
delay
is
validly
authorized
by
a
statute
requiring
production
within
a
reasonable
time.
However
after
examining
the
reasons
for
judgment
in
that
case
I
am
convinced
that
the
Court
made
no
such
general
pronouncement
and
that
the
case
is
one
that
turned
on
its
own
peculiar
facts
and
lays
down
no
general
proposition
of
law
respecting
the
validity
of
demands
made
pursuant
to
subsection
231(3).
Richardson
is
a
Winnipeg
broker.
There
had
been
correspondence
and
discussions
during
the
years
1976
through
1980
between
the
Minister
and
Richardson
concerning
a
certain
income
tax
compliance
project.
The
project
involved
computer
access
by
the
Minister
to
certain
commodity
trading
records
of
Richardson's
clients.
The
negotiations
between
the
parties
and
indeed
the
various
activities
respecting
the
project
were
extensive
but
they
need
not
be
reviewed
in
any
detail.
On
December
21,
1979
the
Minister
wrote
to
Richardson
confirming
an
earlier
telephone
explanation
of
certain
requests
by
the
Minister
and
requesting
the
production
of
certain
documentation.
On
February
25,
1980,
Richardson's
solicitors
wrote
to
the
Minister
and
expressed
their
legal
opinion
that
Richardson
was
not
obliged
to
produce
the
documents
which
had
been
requested.
On
May
8,
1980
the
Minister
served
a
demand
to
produce
the
documents
“without
delay”.
In
the
context
of
that
factual
background
it
is
not
surprising
that
the
Court
gave
short
shrift
to
an
argument
that
the
demand
was
defective
because
it
did
not
specify
a
reasonable
time
in
which
to
comply
with
it.
Richardson
in
fact
had
had
almost
five
months'
notice
of
the
precise
documents
of
which
production
was
required.
Indeed
the
Court
held
that
the
stipulation
of
compliance
“without
delay”
must
be
seen
in
the
light
of
the
fact
that
Richrdson
had
been
on
notice
of
the
Minister's
requirement
from
Decmber
1979
until
the
time
of
the
demand
in
May
of
1980.
The
facts
bear
not
the
slightest
resemblance
to
those
of
this
case.
Nowhere
in
that
case
do
I
find
support
for
a
general
proposition
that
“without
delay”
is
a
“reasonable
time”.
Thus
I
do
not
think
that
the
decision
in
Richardson's
case
is
any
bar
to
my
holding
that
the
demand
in
this
case
is
void.
It
is
my
opinion
that
the
demand
served
upon
the
applicant's
lawyer
requiring
production
without
delay
was
not
lawfully
authorized
by
the
statutory
provision
which
authorized
a
demand
for
production
within
a
reasona-
ble
time.
What
is
a
reasonable
time
will
vary
depending
upon
the
circumstances.
In
the
case
of
lawyers,
having
regard
to
their
need
to
review
files
in
order
to
make
considered
decisions
about
whether
or
not
to
claim
privilege
for
documents
in
their
files,
their
right
to
consult
their
clients
to
see
whether
privilege
might
be
waived,
their
right
to
make
copies
of
privileged
documents
so
that
their
files
are
not
stripped,
and
their
right
to
arrange
their
schedules
so
that
the
legitimate
conduct
of
the
affairs
of
their
clients
is
not
disrupted
by
the
making
of
production,
I
cannot
imagine
holding
a
period
of
less
than
seven
to
ten
days
to
be
reasonable
notice.
Whatever
the
period
may
be,
it
is
certainly
greater
than
no
time
at
all.
An
order
will
therefore
issue
declaring
that
the
demand
dated
March
19,
1985
directed
to
Murray
W
Reilly
was
made
without
statutory
authority
and
is
null,
void
and
of
no
legal
effect,
as
is
the
seizure
under
subsection
232(3)
which
was
made
pursuant
to
it.
The
order
will
direct
the
custodian
to
return
all
of
the
files
in
his
possession
pursuant
to
that
seizure
to
Murray
W
Reilly
forthwith.
Having
regard
to
my
finding
respecting
the
validity
of
the
demand
served
upon
Mr
Reilly
no
Charter
issue
arises
and
therefore
it
would
be
inappropriate
for
me
to
make
any
comment
about
the
Charter
arguments
that
were
addressed
to
me.
The
applicants
shall
have
their
costs
of
the
application
forthwith
after
taxation.
Application
granted.
Email this Content