R. v. Marcoux, 85 DTC 5453, [1985] 2 CTC 254 (Alta. Prov. Ct.)

Ludwig, Prov Ct J:— The accused Robert Marcoux and Cecile Marcoux were charged as follows:

Count #1

on or about the 30th day of April, AD 1979, did unlawfully make, participate in, assent to or acquiesce in the making of a false statement in the return of income of Robert Marcoux for the taxation year 1978, filed by Robert Marcoux as required by the Income Tax Act, RSC 1952, Chapter 148 and amendments thereto, by stating that his net income was a net loss of $5,757.38 which statement was false by reason of his failure to report additional income in the amount of $21, 306.09 for the said taxation year and did thereby commit an offence contrary to Subsectin 239(1)(a) of the Income Tax Act.

Count #2

on or about the 30th day of April, AD 1980, did unlawfully make, participate in, assent to or acquiesce in the making of a false statement in the return of income of Robert Marcoux for the taxation year 1979, filed by Robert Marcoux as required by the income Tax Act, RSC 1952, Chapter 148 and amendments thereto, by stating that his net income was $4,162.38 which statement was false by reason of his failure to report additional income in the amount of $55,284.56 for the said taxation year and did thereby commit an offence contrary to Subsection 239(1)(a) of the Income Tax Act.

Count #3

on or about the 30th day of April, AD 1981, did unlawfully make, participate in, assent to or acquiesce in the making of a false statement in the return of income of Robert Marcoux for the taxation year 1980, filed by Robert Marcoux as required by the Income Tax Act, RSC 1952, Chapter 148 and amendments thereto, by stating that his net income was $6,662.94 which statement was false by reason of his failure to report additional income in the amount of $17,458.57 for the said taxation year and did thereby commit an offence contrary to Subsection 239(1)(a) of the Income Tax Act.

Count #4

on or about the 30th day of April, AD 1982, did unlawfully make, participate in, assent to or acquiesce in the making of a false statement in the return of income of Robert Marcoux for the taxation year 1981, filed by Robert Marcoux as required by the Income Tax Act, RSC 1952, Chapter 148 and amendments thereto, by stating that his net income was $7,809.77 which statement was false by reason of his failure to report additional income in the amount of $9,666.09 for the said taxation year and did thereby commit an offence contrary to Subsection 239(1)(a) of the Income Tax Act.

Count #5

between the 31st day of December, AD 1977 and the 1st day of May, AD 1982, unlawfully did wilfully evade the payment of taxes in the amount of $23,379.84 imposed by the Income Tax Act, RSC 1952, Chapter 148 and amendments thereto, in relation to income received by Robert Marcoux in respect of his 1978, 1979, 1980 and 1981 taxation years in the amount of $103,715.31 and did thereby commit an offence contrary to Subsection 239(1)(d) of the Income Tax Act.

During the early stages of the trial, evidence revealed that Janice Richards, an employee of Revenue Canada, as PN, Appeals Officer, a field officer, became involved with the Marcoux file in May 1982.

An initial interview took place between Richards and Mrs Cecile Marcoux at the farm home of Robert Marcoux and Cecile Marcoux, near McLennan, Alberta. Robert Marcoux was not present by choice.

Richards identified herself as Janice Richards from Revenue Canada. She indicated to Mrs Marcoux what was the purpose of her visit, asked a few questions about the type of records the Marcouxs kept and how they go about doing their tax returns. Richards then asked for the books and records so that she might start doing an audit and verify the amounts reported and claimed.

She obtained the following books and records:

1. Income Scribblers (lined notebooks) — 5 in number

2. Cancelled cheques

3. Expense vouchers

4. Purchase contracts

5. Savings account book.

Richards removed (seized) the above documents from the Marcoux residence and took them initially to the motel at Peace River, Alberta, where she was staying. The seized documents were used to conduct an audit. From information gained in the “audit", she prepared a net worth statement for the years 1978, ’79, and ’80. Upon completion of her net worth audit, some two or three months later, she turned over the file, including all the documents seized by her, to the “Special Investigation” section of the Department of National Revenue.

During the course of the audit (approximately two weeks), Miss Richards had further conversation with the Marcouxs. No other member of the Department of National Revenue was present during any interviews conducted by Richards. She had prepared a series of questions in advance, which she posed to the Marcouxs and took notes of answers given. She rewrote the notes later.

At this stage of the trial a voir dire was entered into, to determine whether answers given by the Marcouxs to questions put to them by Richards were given voluntarily.

Miss Richards knew that she was operating under authority of subsection 231(1) of the Income Tax Act, and that she had the authority to require Mr and Mrs Marcoux to give answers to questions put to them by her. She did not advise the Marcouxs of this aspect of her authority. She did not show her ID card to them. Normally, she would be required to do so. I find that the Marcouxs knew she was a person in authority and that she was an agent from the Department of National Revenue.

The Crown called no further witnesses in the voir dire. The defence called no witnesses.

Following a brief submission by Crown counsel, I found that answers given to questions put to the Marcouxs by Richards were given voluntarily and will be admitted in evidence at the trial.

The Crown tendered Exhibits 1 to 17 inclusive, plus Exhibits A, B, C and D for identification purposes, as set out on page ii of Index, Volume I of transcript of these proceedings.

For the purpose of expediting the trial, counsel for Crown and defence agreed that a voir dire be entered into to determine:

1. The admissibility as evidence of certain statements given by Robert and Cecile Marcoux to Revenue Canada officials November 30, 1982.

2. Whether certain documents respecting the financial affairs of Robert and Cecile Marcoux seized by Revenue Canada officials under sections 231 (1 )(d) and 231(3) of the Income Tax Act shall be excluded from evidence.

Evidence further showed that on November 30, 1982, at about one o’clock p m, Mr Bruce Lane accompanied by Mr Paul Morgenroth, Special Investigators with the Department of National Revenue, met with Mr and Mrs Marcoux at their farm residence. They brought with them the books and materials seized previously by Miss Richards, a prepared net worth statement comprised of two large sheets of paper full of facts and figures, with a number of back-up working papers.

Mr Lane testified that he was aware of the limited education and limited knowledge of bookkeeping by the Marcouxs. The Special Investigators gave Mr and Mrs Marcoux no prior indication of the purpose of their visit, nor were they shown the prepared net-worth statements, nor were they given an opportunity to look at the books and material which were seized from them about six months earlier by Janice Richards. Mr Lane also had prepared a list of 40 to 50 questions to be put to the Marcouxs.

Upon arrival at the Marcoux residence, Lane and Morgenroth briefly flashed their Revenue Canada identification cards at the Marcouxs. Evidence indicates that Mr and Mrs Marcoux did not read the ID cards shown to them, nor ere they told what was on the card and what authority the bearer had. It appears that the Marcouxs knew that the Si's were from the Department of National Revenue, and were persons in authority.

Mr Lane discussed the net worth statements with Mr and Mrs Marcoux and then proceeded to interrogate them for approximately three hours, from a prepared list of questions, in the presence of Mr Morgenroth

No caution as to their right to remain silent was given to the Marcouxs prior to the commencement of the interrogation. Both Lane and Morgenroth took notes during the interrogation by Lane. At the end of questioning by Lane, Mr Morgenroth took over the questioning and continued for a further half hour. About halfway through his interrogation of Mr and Mrs Marcoux, Morgenroth read them the caution “that they have the right to remain silent". Shortly thereafter, Morgenroth made a symbolic return of the documents, previously seized by Richards, then seized all those documents again, plus some additional documents, pursuant to paragraph 231 (1)(d) of the Income Tax Act.

I propose to deal first with the issue of admissibility as evidence of certain statements given by Robert and Cecile Marcoux to Mr Lane and Mr Morgenroth on November 30, 1982.

The Crown counsel took the position that there was no inducement or threat made by the Revenue Canada Special Investigators and therefore, the statements were freely and voluntarily made and should be admitted in evidence at the trial. The Crown Counsel argued that nothing the Sis said or did throughout the interrogations should be interpreted that if they answered the questions, it would be to their advantage or that they may be prejudiced if they did not answer.

The defence counsel submitted that the burden of proving beyond a reasonable doubt that the statements were voluntarily made vests with the Crown. The defence counsel pointed out that notwithstanding that there was no apparent threat or inducement made by the Sis to the Marcouxs, the whole of the evidence should be looked at to determine whether the statements were voluntarily given.

In reviewing the evidence relating to the interrogation of Robert and Cecile Marcoux by Lane and Morgenroth, I make the following findings of fact:

1. The interrogation of Mr and Mrs Marcoux by the Sis of Department of National Revenue continued for three and one-half hours; three hours by Lane, half an hour by Morgenroth.

2. No break was taken during the questioning.

3. Both Lane and Morgenroth took notes during the interrogation.

4. There is no evidence to show whether all that was said by the defendants was taken down or whether the notes were selectively taken.

5. The defendants knew that the Sis were persons in authority.

6. During the interrogation, November 30, 1980, the books and records of the defendants, which were seized on May 10, 1985, were kept from them during the entire interrogation.

7. The interrogation was conducted by the Sis from a previously prepared set of questions (40 to 50 questions).

8. Mr Lane showed the defendants a net worth statement which he admitted was sometimes difficult to understand and often difficult to explain. The net worth statement he showed to them was not the final net worth statement prepared. The net worth statement shown to the defendants was misleading. Some of the answers could well have been induced by the misleading information.

9. Mr Lane admitted that no prior notice of the intended interrogation was given to the defendants so that they could have been prepared, or engaged an accountant or lawyer to assist them.

10. No caution was given to the defendants until the final few minutes of the three and one-half hour interrogation. No acceptable explanation was given by the Sis why the caution was not administered to the defendants until after the prepared questions were put to them. I find that the giving of the caution was deliberately delayed to the end of the main portion of the interrogation.

11. The Sis knew that the defendants had a very limited knowledge of bookkeeping, yet they made matters more difficult by withholding from them the bookkeeping records and other relevant material during the interview. If the Sis were seeking clarification of facts, what could the Marcouxs provide by way of explanation of events which may have happened as long as five years ago, bearing in mind that their own records were being concealed from them?

12. The impression was given to the defendants by the Sis that there was an evasion of a substantial amount of tax which was not a true representation of the facts. It was in this atmosphere that the interrogation was conducted. Mr Lane admitted that he deliberately kept the Marcouxs believing that there appeared to be a lot more tax payable than there in fact was. A major portion of the interrogation was conducted on the basis of an inaccurate net worth statement which was shown to the defendants. Statements were being elicited from the defendants on the basis of a hypothesis placed before them, a knowingly inaccurate and misleading hypothesis. Was there an improper influence exercised upon the minds of the defendants? I find that there was.

In order to render the statements made by the defendants to the Sis admissible, the Crown must prove beyond a reasonable doubt that the statements were freely and voluntarily made: Park v. The Queen (1981), 25 CR 64 at 66.

In this case, the statements were apparently obtained pursuant to paragraph 231 (1 )(c) of the Income Tax Act:

231. (1) Investigations.—Any person thereunto authorized by the Minister, for any purpose related to the administration or enforcement of this Act, may, at all reasonable times, enter into any premises or place where any business is carried on or any property is kept or anything is done in connection with any business or any books or records are or should be kept, and

(c) require the owner or manager of the property or business and any other person on the premises or place to give him all reasonable assistance with his audit or examination and to answer all proper questions relating to the audit or examination either orally or, if he so requires, in writing, on oath or by statutory declaration and, for that purpose, require the owner or manager to attend at the premises or place with him, . . .

Although the defendants were bound by statute to respond to questions put to them by the Sis, this fact was not communicated to them.

The fact that the statements were obtained from the defendants pursuant to statutory power of compulsion, does not ipso facto relieve the Crown of the burden of proving in a voir dire that they are admissible under the common law test of voluntariness.

In R v Tex (1974), 1 OR (2d) 280 CA (leave to appeal to SCC denied December 21, 1973), Jessup, JA stated:

I am of the opinion that the existence of the statutory duty under s 233 of the Criminal Code does not dispense with the onus upon the Crown to establish that a statement made pursuant to that section was not otherwise voluntary.

In view of the circumstances surrounding the whole of the interrogation, as enumerated above, I do not accept the proposition of the Crown that since there is no inducement or threat made to the accuseds during the interrogation, that the Crown has therefore discharged its burden of proof of voluntariness and the statements should be admitted in evidence.

The rule governing the admissibility of statements given by accused persons is directed against the danger of improperly investigated or induced or coerced admissions. Boudreau v The King, [1949] 3 DLR 81 (SCC).

In the case before me, there is ample evidence to alert the Court to be specially cautious in scrutinizing and assessing all the evidence, accordingly, the scope of the inquiry must be broadened beyond threats or promises of favour to the influences operating upon the accuseds' minds and the atmosphere prevailing when the questioning took place. As Mr Justice Rand stated in The Queen v Fitton, [1956] SCR 958 at 962:

The rule on the admission of confessions, which, following the English authorities, was restated in Boudreau v The King, at times presents difficulty of application because its terms tend to conceal underlying considerations material to a determination. The cases of torture, actual or threatened, or of unabashed promises are clear; perplexity arises when much more subtle elements must be evaluated. The strength of mind and will of the accused, the influence of custody or its surroundings, the effect of questions or of conversation, all call for delicacy in appreciation of the part they have played behind the admission, and to enable a Court to decide whether what was said was freely and voluntarily said, that is, was free from the influence of hope or fear aroused by them.

Further, consideration of the issue of admissibility of statements must not be circumscribed by judicial precedent. Mr Justice Spence in one of the majority judgments in Horvath v The Queen (1979), 44 CCC (2d) 385 (Estey, J concurring) stated (at 404, 410):

It is my strong opinion that Ibrahim and the many cases which followed have not and need not be considered to have reduced the words “free and voluntary” in the test as to the admissibility of a statement made by the accused to only meaning that the statement has not been induced by any hope of advantage or fear or prejudice, and it is my view that a statement may well be held not to be voluntary, at any rate, if it has been induced by some other motive or for some other reason than hope or fear . . . In my respectful opinion, the judgment of this Court in Fitton must be limited so as not to rule admissible statements made by the accused when not induced by hope of advantage or fear of prejudice but which are certainly not voluntary in the ordinary English sense of the word because they were induced by other circumstances such as existed in the present case.

Mr Justice Beetz in a separate majority judgment in Horvath (Pratte, I concurring) also decried the tendency to give the voluntariness test a narrow and confined meaning:

In typical legal fashion, the test of voluntariness is expressed negatively in the Ibrahim rule by reference to instances of involuntariness: a statement obtained by hope of advantage (a promise), or fear of prejudice (a threat), exercised, held out or inspired by a person in authority, is involuntary in the eyes of the law.

The question arises as to whether the enumeration in the rule of instances of involuntariness is a limitative one.

It cannot be limitative since the rule is a Judge-made rule and anything said by a Judge beyond what is necessary to decide the issue is obiter. Furthermore, the principle which inspires the rule remains a positive one; it is the principle of voluntariness. The principle always governs and may justify an extension of the rule to situations where involuntariness has been caused otherwise than by promises, threats, hope or fear, if it is felt that other causes are as Coercive as promises or threats, hope or fear and serious enough to bring the principle into play.

The Sis did not give a warning to Mr and Mrs Marcoux at the commencement of the interrogation.

While the presence or absence of a warning is not necessarily decisive on the question of admissibility, it is a factor and in many cases, an important one. (Boudreau v The King, supra, at 83, per Taschereau, J) which requires close scrutiny of the evidence tendered to establish the voluntary character of the statements. (Prosko v The King (1922), 63 SCR 226 at 237, per Anglin, J). The absence of a warning more often than not is fatal to the admission of any statement obtained:

Unless it is proved that prior to such questioning the prisoner was warned that he was under no obligation to answer questions put to him and would suffer no prejudice by not answering, and that anything he said could be given in evidence by the prosecution at his trial, it would rarely happen that the trial Judge could be satisfied that the statements thus made by the prisoner were free and voluntary. Therefore, we think it is in all cases expedient, and in most cases essential, that before the prisoner is asked any question he be given such warning. (R v Price (1931), 3 DLR 155 at 166 (NBSCAD).)

In the case at bar, the SIs deliberately withheld giving the warning to the defendants until near the end of the interrogation. Bearing in mind all the circumstances surrounding the whole of the prolonged interrogation, I find it difficult to accept the view that the defendants were fully aware of what was at stake in making statements to persons of authority. Under the circumstances, the caution should have been given at the commencement rather than near the end of the interview.

The tactics of the Sis throughout the whole interrogation are somewhat questionable and in my view, went beyond what the Department of National Revenue expected its agents to do.

Circular No 73-10R2 issued on April 24, 1978 as follows:

23. The taxpayer may be interviewed and questioned by the investigator during the course of the investigation. The taxpayer is not obliged to incriminate himself and will be given ample opportunity to make explanations or representations. A taxpayer is permitted to have his legal and accounting advisors present during interviews.

Taking all the factors surrounding the interrogations into account, I find that the defendants were exposed to a limited amount of oppression and coercion by the Sis.

Oppression has been recognized in Canada as a ground for ruling statements to be inadmissible (Hobbins v The Queen, [1982] 1 SCR 553 at 556). In Horvath, supra, at 410, Mr Justice Spence cited with approval the following extract from R v Priestly (1966), 51 Cr App R 1, per Sachs, J:

There I mentioned that I had not been referred to any authority on the meaning of the word "oppression” as used in the preamble to the Judges’ Rules, nor would I venture on such a definition, and far less try to compile a list of categories of oppression, but, to my mind, this word in the context of the principles under consideration imports something which tends to sap, and has sapped, that free will which must exist before a confession is voluntary . . . Whether or not there is oppression in an individual case depends upon many elements. I am not going into all of them. They include such things as the length of time of any individual period of questioning, the length of time intervening between periods of questioning, whether the accused person has been given proper refreshment or not, and the characteristics of the person who makes the statement. What may be oppressive as regards a child, an invalid or an old man or somebody inexperienced in the ways of this world may turn out not to be oppressive when one finds that the accused person is of a tough character and an experienced man of the world.

In displaying a complex and inaccurate net worth statement to the defendants, the SIs exercised an improper influence upon their minds. In R v Dreher (1952), 14 CR 339 at 344, Egbert, J held that:

The onus is on the Crown to prove that the statement sought to be admitted was a free and voluntary statement, not only in the sense that it was made without fear of prejudice or hope of advantage, but under circumstances which made it clear that he deemed no improper influence was exercised upon the mind of the accused. The moment the Crown's own witness — the police officer to whom the statement was made — acknowledges that by reason of something he said or did, the accused may have been "misled” — at that moment the Crown fails to satisfy the burden upon it.

One further question should be dealt with and that is upon whom does the burden of proof lie to show whether the defendants were misled by the Sis? The Dreher case, supra, supports the proposition that the burden is on the Crown to show that the defendants were not misled. Egbert, J at 345 held that:

If the accused was misled in making the statement to Woodworth, and the onus is not on her to show that she was misled, but on the Crown to show that she was not, then the factors and influences which misled her in the first instance continued throughout the evening, and probably, in fact, until she was given another warning and the improper impression induced by Woodworth removed.

In the exercise of my discretion, taking into account all the evidence and all facts and circumstances of the case, I rule that all oral statements made by the defendants, Robert and Cecile Marcoux, to the Revenue Canada Sis on November 30, 1982 will not be admitted in evidence, the Crown not having proved beyond a reasonable doubt that the statements were freely and voluntarily given.

The statements made by the defendants to Morgenroth, after the “caution” was given to them, are inadmissible in evidence as being tainted by the same influences which rendered the statements made prior to the caution inadmissible.

The second issue to be dealt with is whether documents respecting the financial affairs of Robert and Cecile Marcoux, seized by Revenue Canada officials under paragraph 231(1)(d) and subsection 231(3) of the Income Tax Act, RSC 1952, c 148 as amended, shall be excluded from evidence?

The details of the manner in which Ms Janice Richards obtained possession of the books and records of Robert and Cecile Marcoux, the defendants, and the subsequent delivery by her of the said material to the “Special Investigation” section of the Department of National Revenue, and further how the said material and other records were seized and removed by the Special Investigator, Mr Morgenroth, on November 30, 1982, are set out above.

The Crown alleges that Janice Richards had borrowed the documents in question from the Marcouxs, however, I find that the documents were removed from the Marcoux residence in McLennan on or about May 10, 1982, and have not to this date been returned to them.

Although on November 30 1982, Morgenroth did hand the documents, momentarily, to the Marcouxs, and then, under power vested in him by Ministerial authority, pursuant to paragraph 231(1)(d) of the Income Tax Act, seized those books and records and additional material.

Objection has been taken by defence counsel to the introduction of the documents seized by Morgenroth, on the basis that the search and seizure pursuant to paragraph 231 (1)(d) of the Income Tax Act was in violation of section 8 of the Charter of Rights and Freedoms, Constitution Act, 1982.

231. (1) Investigations.—Any person thereunto authorized by the Minister, for any purpose related to the administration or enforcement of this Act, may, at all reasonable times, enter into any premises or place where any business is carried on or any property is kept or anything is done in connection with any business or any books or records are or should be kept, and

(d) if, during the course of an audit or examination, it appears to him that there has been a violation of this Act or a regulation, seize and take away any of the documents, books, records, papers or things that may be required as evidence as to the violation of any provision of this Act or a regulation.

Section 8 Charter of Rights and Freedoms: “Everyone has the right to be secure against the unreasonable search and seizure”.

At the outset of the Crown argument, Crown counsel admitted that paragraph 231(1 )(d) of the Income Tax Act is inconsistent with section 8 of the Charter of Rights and Freedoms, and that therefore, it is inoperative and has no force or effect.

The defence counsel raised the point that subsection 231(3) of the Income Tax Act, pursuant to which records were seized from third parties, also contravenes section 8 of the Charter, and in accordance with subsection 52(1) of the Constitution Act, 1982, is of no force and effect.

52. (1) The Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect.

Defence counsel contended that subsection 231(3) does not meet the criteria for a valid statutory authorization for search and seizure dictated by the Supreme Court of Canada in Southam v Hunter (1984), 55 NR 241 wherein Dickson, J of the Supreme Court of Canada concurs in the procedural safeguards set out by Prowse, JA:

(a) Prior authorization of search and seizure to an independent person who is bound to act judicially (at common law a justice);

(b) Reasonable and probable grounds to suspect that an offence has been committed.

(c) That something that will afford evidence of an offence may be recovered at the place to be searched.

(d) Evidence before him must be under oath.

The issuance of judicial warrants authorizing general searches and seizures under subsection 231(4) has been found to be constitutionally invalid by the Federal Court of Appeal (MNR et al v Kruger Inc et al, [1984] CTC 506; 84 DTC 6478; Vespoli et al v The Queen et al, [1984] CTC 519; 84 DTC 6489, it follows that the completely arbitrary and discretionary power of seizure from third parties “for any purpose related to the administration or enforcement” of the Income Tax Act, conferred by subsection 231(3) must contravene section 8 of the Charter.

I find that in view of the Crown concession that paragraph 231(1)(d) is inconsistent with section 8 of the Charter, and the decisions in Kruger and Vespoli, supra, by implication subsection 231(3) of the Income Tax Act is inconsistent with section 8 of the Charter and therefore inoperative.

Crown and defence counsel are in agreement that the issue to be determined is whether all the documents seized by the Sis from the defendants, and third parties under sections 231 (1)(d) and 231(3) of the Income Tax Act should be excluded from evidence.

It has been conceded and established that seizures made on November 30, 1982 and previously from third parties were illegal.

Crown counsel submits that in order for the evidence to be excluded pursuant to subsection 24(2) of the Charter, the defence must show that the admission of the evidence seized was such a violation of section 8 of the Charter that it would bring the administration of justice into disrepute.

Section 8 of the Charter guarantees a broad and general right to be secure from unreasonable search and seizure. Southam Inc v Hunter, supra.

The Crown submission is that the Department of National Revenue officers, Lane and Morgenroth acted in good faith under statutory authority and perceived legal authority which has not been declared to be either inopera- tive or constitutionally invalid and therefore, to admit the documentary evidence seized would not bring the administration of justice into disrepute.

The Crown relies on the decision of McNaughton, Prov J Alberta in The Queen v Stickney, Jan 22, 1985 (unreported) wherein he held that notwithstanding that paragraph 231 (1 )(d) of the Income Tax Act is inoperative, documents seized pursuant to that section should be admitted in evidence since the defence did not establish that the action of the officers of the Department of National Revenue was unreasonable and to admit the documents would not bring the administration of justice into disrepute.

In arriving at his conclusion, McNaughton, Prov J found that:

(a) The officers of Revenue Canada acted in good faith.

(b) They had relied upon a statutory authority which had not previously been determined to be either unconstitutional or inoperative in whole or in part.

The Crown argument that, since paragraph 231 (1)(d) of the Income Tax Act had not been at the time of the seizure of the documents, declared by a court to be inoperative, then the Sis acted in good faith under that section. I have considerable difficulty in accepting that line of reasoning. The Charter of Rights and Freedoms, the Constitution Act, 1982 was in full force and effect upon proclamation, April 17, 1982. It is tantamount to saying that a statute is not law until a court declares it to be so. Paragraph 231 (1 )(d) became inoperative upon proclamation of the Charter. The Sis of the Department of National Revenue continued to do their work as they did prior to the proclamation of the Charter, and for a long time thereafter, without regard to the Charter. They chose to take the expedient course of action, abeit illegal.

In determining whether the search was unreasonable in the Stickney case, supra, and in The Queen v Heisler (unreported version) (1984), judgment of the Alberta Court of Appeal, the question of illegality of the seizure appears not to have been a significant factor in the issue of “unreasonableness”.

In the case at Bar, the Sis knew or had come to the conclusion that there were discrepancies in the records and tax returns of the defendants prior to arriving at the residence of the defendants on November 30, 1982. The Sls had the defendants' books and records in their possession for several months prior, and in fact, had the books in their possession when they arrived at the home of the Marcouxs on November 30, 1982. The Sis arrived at the residence of the defendants under the pretext that they wanted to receive explanation and clarification of their books and tax returns.

If the Sis were sincere in their quest for clarification of inaccuracies they were suggesting were inherent in those records, they would have made those documents and records available to the Marcouxs in advance of the interrogation, to enable them to inform themselves in order that they might be able to respond to the barrage of questions put to them. The Sis have, by their act of delivering an inaccurate net worth statement to the defendants that day, deliberately deprived them of the right and ability to make a reasonable explanation of the net worth statement.

By withholding the account books and records from the defendants, the action of the SIs was grossly unfair and most unreasonable and unnecessary.

Crown witnesses admitted that there was no sense of urgency to seize the documents. The Sis already had the bulk of the records in their possession. Lowe stated that he was not concerned about the likelihood that records might be destroyed. There was no threatened destruction of evidence.

In the case at bar, the Sis entered a private residence.

There was no prior authorization for the search and seizure. In this case, this fact is specially important, since the seizure was conducted in a private residence.

In The Queen v Krezonoski (1985) QB Alberta, Stratton, J considered an appeal from a Provincial Court decision, excluding evidence seized and therefore inadmissible. The seizure was made prior to the proclamation of the Charter of Rights. Stratton, J held at 3 . . . that apart from the Charter, the evidence would be admissible. At 8 he made the following comment:

Given the present facts, I do not consider it appropriate to exclude the evidence. The circumstances here are significantly different from those in Wright. One important difference is that here the search took place in a business office to which the public had free access, whereas in Wright the improper intrusion was to a private dwelling which I consider more serious.

In R v Wright (1983), 29 Alta LR (2d) 260 Stratton, J excluded the evidence under subsection 24(1) of the Charter. In Wright, seizure was effected at a private dwelling house, pursuant to what he found to be a defective search warrant.

In Southam v Hunter, 55 NR 241, Dickson, J quotes with approval at 248 Lord Camden’s statement in Entick v Carrington (1765), 19 State Tr 1029 at 1067:

Our law holds the property of every man so sacred that no man can set his foot upon his neighbour’s without his leave; if he does, he is a trespasser, though he does no damage at all; if he will tread upon his neighbour’s ground, he must justify it by law.

Dickson, J goes on to say:

In my view, the interests protected by s. 8 are a wider ambit than those enunciated in Entick v Carrington. Section 8 is an entrenched constitutional provision. It is not therefore vulnerable to encroachment by legislative enactments in the same way as common law protections. There is, further, nothing in the language of the section to restrict it to the protection of property or to associate it with the law of trespass. It guarantees a broad and general right to be secure from unreasonable search and seizure.

In R v Lajoie (1983), 8 CCC (3d) 353 (NWTSC) in dealing with entry into a private dwelling house for purpose of search and seizure pursuant to a defective search warrant, excluded the evidence, DeWeerdt, I found that the officers acted in good faith, even though mistakenly. He further found at 363 that items seized as evidence of the accused were obtained in a manner that infringed or denied his right to be secure against unreasonable search. In considering the question of whether it has been established that having regard to all the circumstances, the admission of that evidence . . . would bring the administration of justice into disrepute, Mr Justice de Weerdt stated at 367, 368: [sic]

The seizure here was conducted not according to law, but in spite of it. This in itself makes the seizure unreasonable.

In Southam v Director of Investigations, [1983] 3 WWR 385, Alberta CA, Prowse, JA held at 404 that:

In the result, I would allow the appeal and declare that s. 10(3) and by implication s 10(1) of the Combines Act are inconsistent with the provisions of s 8 of the Charter and are therefore of no force and effect. I would therefore direct the Clerk of the Court to return the documents in his possession to the appellant in ten days in the event a stay is not sought and granted.

Having found that:

(a) The Special Investigators of the Department of National Revenue acted illegally.

(b) They did not act in good faith.

(c) The withholding of documents from the defendants upon which they were extensively interrogated prejudiced the defendants in making meaningful explanations which may have been a contributing factor in the decision to seize the records and documents, and therefore unreasonable and unfair to the defendants.

(d) The seizure was made in a private residence without prior authorization.

I hold that the documents seized from the Marcoux home and from third parties will be excluded from evidence pursuant to subsection 24(2) of the Charter as their admission would bring the administration of justice into disrepute.

Order accordingly.