Thurlow,
J
(concurred
in
by
Sweet,
DJ):—The
issue
in
these
appeals
is
whether
the
income
tax
returns
of
a
defunct
company,
which
I
shall
refer
to
as
Pelon,
for
the
years
1964,
1965
and
1966,
upon
which
the
income
tax
assessments
of
the
respondents
in
question
in
these
proceedings
are
admittedly
based,
are
immune
from
production
on
discovery
on
the
ground
that
the
public
interest
in
keeping
them
confidential
outweighs
the
public
interest
in
making
them
available
to
the
respondents
for
use
in
establishing
their
rights.
The
claim
for
immunity
was
put
forward
in
an
affidavit
of
the
Deputy
Minister
of
National
Revenue
for
Taxation,
paragraphs
4
to
7
of
which
read
as
follows:
4.
I
have
carefully
examined
the
returns
of
income
filed
by
Pelon
Holdings
Limited
for
its
1964,
1965
and
1966
taxation
years,
and
each
return
of
income
comprises
the
corporate
income
tax
return
prescribed
by
the
Defendant
together
with
a
balance
sheet
and
operating
statement
for
Pelon
Holdings
Limited.
5.
I
am
of
opinion
that
the
completeness
and
the
accuracy
of
the
information
which
a
taxpayer
is
required
by
law
to
disclose
in
his
return
of
income
would
be
prejudiced
if
the
Defendant
was
required
on
an
examination
for
discovery
or
by
way
of
production
or
inspection
of
documents
to
produce
or
disclose
returns
of
income
and
attached
financial
statements
of
persons
who
were
not
parties
to
the
litigation.
6.
I
am
of
opinion
that
the
practice
of
the
Defendant
in
refusing
to
make
production
on
an
examination
for
discovery
of
the
returns
of
income
filed
by
persons
who
are
not
parties
to
the
litigation
is
essential
to
the
proper
administration
of
the
Income
Tax
Act
and
for
the
protection
of
the
revenue.
7.
On
the
grounds
of
the
public
interest
set
forth
in
the
previous
two
paragraphs,
I
am
of
opinion
that
the
returns
and
attached
financial
statements
of
Pelon
Holdings
Limited
filed
with
the
Defendant
for
its
1964,
1965
and
1966
taxation
years
are
documents
which
belong
to
a
class
and
which
contain
information
which
should
be
withheld
from
production
and
discovery.
The
learned
trial
judge
after
considering
this
affidavit
and
after
examining
the
returns
in
question
concluded
that
in
the
present
case
the
public
interest
in
the
proper
administration
of
justice
far
outweighed
in
importance
any
public
interest
that
might
be
protected
by
upholding
the
claim
for
privilege
for
the
whole
class
specified
in
the
affidavit
and
he
accordingly
ordered
production
of
the
returns.
On
considering
the
affidavit
in
the
light
of
the
arguments
put
forward
at
the
hearing
of
the
appeal
and
after
examining
the
returns,
I
too
am
of
the
opinion
that
production
of
the
returns
should
be
ordered.
It
will
be
observed
that
the
only
public
interest
specified
in
the
affidavit
as
likely
to
be
prejudiced
by
production
of
returns
of
persons
who
are
not
parties
to
the
litigation
is
that
referred
to
in
paragraph
5,
that
is
to
say,
the
public
interest
in
the
completeness
and
accuracy
of
the
information
which
a
taxpayer
is
required
by
law
to
disclose
in
his
return.
This,
to
my
mind,
amounts
to
nothing
more
than
the
putting
forward
by
a
somewhat
different
wording
of
an
alleged
public
interest
in
keeping
a
whole
class
of
documents
from
disclosure
on
grounds
of
the
necessity
to
ensure
candour
and
truthfulness
by
persons
who
file
income
tax
returns.
Such
a
reason
at
best
has,
in
my
opinion,
very
little
weight
or
validity
by
itself
and
I
think
has
even
less
‘when
considered
in
the
light
of
the
legal
obligation
upon
the
person
making
the
return
to
be
accurate
and
truthful
on
pain
of
severe
penalties
both
for
untruthfulness
and
for
omissions.
Compare
Conway
v
Rimmer,
[1968]
AC
910,
and
Regina
v
Lewes
Justices,
[1971]
2
All
ER
1126.
On
the
basis
of
the
alleged
public
interest,
and,
in
my
view,
it
is
the
only
one
put
forward
by
the
affidavit,
there
is
no
case
for
immunity
of
the
returns
in
question
from
production
in
these
proceedings
based
on
what
has
in
times
past
usually
been
referred
to
as
Crown
privilege.
Such
an
immunity
prevents
the
use
of
a
document
for
any
purpose
in
the
proceedings,
even
by
consent
of
the
parties,
and
counsel
for
the
appellant,
who
referred
to
it
as
Crown
privilege
in
the
classic
sense,
did
not
rely
on
it.
Nor
did
he
contend
that
subsection
241(2)
of
the
Income
Tax
Act
applied
to
the
present
proceedings.
His
position
as
I
understand
it,
was
based
on
section
41
of
the
Federal
Court
Act,
RSC
1970,
c
10
(2nd
Supp),*
and
was
that
section
241
of
the
Income
Tax
Act,
SC
1970-71-72,
c
63,t
shows
that
the
disclosures
made
by
taxpayers
in
their
income
tax
returns
are
confidential
communications
and
that
there
is
a
public
interest
in
maintaining
their
confidential
character
which,
save
in
exceptional
circumstances,
is
not
outweighed
by
the
public
interest
in
the
administration
of
justice,
that
the
present
cases
are
not
exceptional
and
that
the
learned
trial
judge
erred
in
concluding
that
the
public
interest
in
the
administration
of
justice
outweighed
the
public
interest
established
by
the
affidavit
in
keeping
the
returns
in
question
confidential.
In
particular
he
urged
that
the
learned
trial
judge
had
not
disclosed
why
in
his
view
the
public
interest
in
disclosure
outweighed
the
public
interest
specified
in
the
affidavit
and
that
he
had
failed
to
take
into
account
(1)
that
full
disclosure
of
the
assumptions
made
by
the
Minister
and
of
the
material
relied
on
by
the
Minister
in
making
them
had
been
given
at
the
oral
examination
for
discovery;
(2)
that
the
documents
even
if
disclosed
would
not
be
admissible
in
evidence
and
so
would
be
of
no
assistance
as
proof
at
the
trial,
and
(3)
that
because
the
Minister
has
declined
to
produce
the
returns
on
discovery
it
will
not
be
open
to
him
under
the
rules
to
use
them
at
the
trial.
In
my
view
the
alleged
public
interest
in
maintaining
the
confidential
character
of
income
tax
returns
is
not
the
interest
put
forward
in
the
affidavit
and
is
not
specified
therein
as
the
public
interest
to
be
weighed
against
the
public
interest
in
the
proper
administration
of
justice.
I
do
not
think,
therefore,
that
it
could
be
said
that
the
learned
trial
judge
erred
in
reaching
his
conclusion
even
if
he
in
fact
attributed
no
weight
whatever
to
it.
Nor
am
I
persuaded
that
he
failed
to
take
into
account
any
of
the
three
considerations
which
I
have
outlined.
Having
examined
the
returns
I
do
not
think
it
can
be
said
that
the
disclosure
by
the
Minister
of
the
material
relied
on
in
making
the
(3)
Subsections
(1)
and
(2)
do
not
apply
in
respect
of
criminal
proceedings,
either
by
indictment
or
on
summary
conviction,
under
an
Act
of
the
Parliament
of
Canada,
or
in
respect
of
proceedings
relating
to
the
administration
or
enforcement
of
this
Act.
(4)
An
official
or
authorized
person
may,
(a)
in
the
course
of
his
duties
in
connection
with
the
administration
or
enforcement
of
this
Act,
(i)
communicate
or
allow
to
be
communicated
to
an
official
or
authorized
person
information
obtained
by
or
on
behalf
of
the
Minister
for
the
purposes
of
this
Act,
and
(ii)
allow
an
official
or
authorized
person
to
inspect
or
to
have
access
to
any
book,
record,
writing,
return
or
other
document
obtained
by
or
on
behalf
of
the
Minister
for
the
purposes
of
this
Act;
(b)
under
prescribed
conditions,
communicate
or
allow
to
be
communicated
information
obtained
under
this
Act,
or
allow
inspection
of
or
access
to
any
written
statement
furnished
under
this
Act
to
the
government
of
any
province
in
respect
of
which
information
and
written
statements
obtained
by
the
government
of
the
province,
for
the
purpose
of
a
law
of
the
province
that
imposes
a
tax
similar
to
the
tax
imposed
under
this
Act,
is
communicated
or
furnished
on
a
reciprocal
basis
to
the
Minister;
or
(c)
communicate
or
allow
to
be
communicated
information
obtained
under
this
Act,
or
allow
inspection
of
or
access
to
any
book,
record,
writing,
return
or
other
document
obtained
by
or
on
behalf
of
the
Minister
for
the
purposes
of
this
Act,
to
or
by
any
person
otherwise
legally
entitled
thereto.
(5)
Notwithstanding
anything
in
this
section,
the
Minister
may
permit
a
copy
of
any
book,
record,
writing,
return
or
other
document
obtained
by
him
or
on
his
behalf
for
the
purposes
of
this
Act
to
be
given
to
the
person
from
whom
such
book,
record,
writing,
return
or
other
document
was
obtained
or
the
legal
representative
of
such
person,
or
to
the
agent
of
such
person
or
of
such
legal
representative
authorized
in
writing
in
that
behalf.
(6)
An
order
or
direction
made
in
the
course
of
or
in
connection
with
any
legal
proceedings
requiring
an
official
or
authorized
person
to
give
evidence
assessment
was
full
save
in
the
sense
that
the
returns
were
identified
as
the
source
of
his
information
on
several
points
and
I
have
no
difficulty
in
conceiving
of
a
number
of
ways
in
which
the
returns,
whether
admitted
in
evidence
or
not,
may
be
of
very
considerable
usefulness
to
the
respondents
at
the
trial
in
endeavouring
to
rebut
any
case
put
forward
by
the
Minister,
if
for
no
other
purpose.
Moreover,
in
such
a
situation
it
is
of
no
importance
whatever
that
the
Minister
by
declining
to
produce
them
would
have
disabled
himself
from
using
them
at
the
trial.
Counsel
for
the
respondents
put
forward
three
specific
facts
assumed
by
the
Minister
on
the
basis
of
the
return
in
question
which,
in
order
to
succeed
at
the
trial,
the
respondents
will
have
the
onus
of
disproving,
viz,
(1)
that
at
the
material
times
the
shares
of
Pelon
were
beneficially
owned
by
one
Peckham;
(2)
that
at
material
times
Pelon
provided
no
services
to
the
respondent
Huron;
and
(3)
that
in
1966,
1967
and
1968
Pelon
was
an
inactive
company.
The
onus
which
the
income
tax
law
places
on
a
taxpayer
to
demolish
the
assumed
facts
upon
which
the
taxation
rests
is
not
so
easily
discharged
in
most
cases
as
to
permit
counsel
or
anyone
else
lightly
to
assume
or
to
accept
that
nothing
is
to
be
found
in
the
documents
upon
which
an
assessment
is
relating
to
any
information
or
produce
any
book,
record,
writing,
return
or
other
document
obtained
by
or
on
behalf
of
the
Minister
for
the
purposes
of
this
Act,
may,
by
notice
served
upon
all
interested
parties,
be
appealed
forthwith
by
the
Minister
or
by
the
person
against
whom
the
order
or
direction
is
made
to
(a)
the
court
of
appeal
of
the
province
in
which
the
order
or
direction
is
made,
in
the
case
of
an
order
or
direction
made
by
a
court
or
other
tribunal
established
by
or
pursuant
to
the
laws
of
the
province,
whether
or
not
such
court
or
tribunal
is
exercising
a
jurisdiction
conferred
by
the
laws
of
Canada;
or
(b)
the
Federal
Court
of
Appeal,
in
the
case
of
an
order
or
direction
made
by
a
court
or
other
tribunal
established
by
or
pursuant
to
the
laws
of
Canada.
(7)
The
court
to
which
an
appeal
is
taken
pursuant
to
subsection
(6)
may
allow
the
appeal
and
quash
the
order
or
direction
appealed
from
or
dismiss
the
appeal,
and
the
rules
of
practice
and
procedure
from
time
to
time
governing
appeals
to
the
courts
shall
apply,
mutatis
mutandis,
to
an
appeal
instituted
pursuant
to
subsection
(6).
(8)
An
appeal
instituted
pursuant
to
subsection
(6)
shall
stay
the
operation
of
the
order
or
direction
appealed
from
until
judgment
is
pronounced.
(9)
Every
one
who,
being
an.
official
or
authorized
person,
contravenes
subsection
(1)
is
guilty
of
an
offence
and
liable
on
summary
conviction
to
a
fine
not
exceeding
$1,000
or
to
imprisonment
for
a
term
not
exceeding
2
months,
or
to
both
such
fine
and
imprisonment.
(10)
In
this
section,
(a)
“official”
means
any
person
employed
in
or
occupying
a
position
of
responsibility
in
the
service
of
Her
Majesty,
or
any
person
formerly
so
employed
or
formerly
occupying
a
position
therein;
(b)
“authorized
person”
means
any
person
engaged
or
employed,
or
formerly
engaged
or
employed,
by
or
on
behalf
of
Her
Majesty
to
assist
in
carrying
out
the
purposes
and
provisions
of
this
Act;
and
(c)
“court
of
appeal”
has
the
meaning
assigned
by
paragraphs
(a)
to
(j)
of
the
definition
“court
of
appeal’’
in
section
2
of
the
Criminal
Code,
based
that
will
either
aid
the
establishment
of
the
taxpayer’s
case
or
help
to
destroy
the
Minister’s
assumptions
and
when,
as
here,
the
Minister’s
assumptions
have
admittedly
been
based
on
the
returns
in
question
it
seems
to
me
to
be
manifest
both
that
the
need
of
the
respondents
for
production
of
these
returns
is
made
out,
an
impression
which
to
my
mind
is
reinforced
by
my
examination
of
the
returns,
and
that
a
very
strong
public
interest
in
keeping
them
from
production
would
be
required
to
outweigh
the
public
interest
in
the
proper
administration
of
justice
which
would
be
served
by
their
production.
The
Minister’s
submission
that
there
is
a
strong
public
interest
in
withholding
the
returns
appears
to
be
based
on
the
remark
of
Lord
Reid
at
page
946
in
Conway
v
Rimmer
(supra)
when
reviewing
/n
re
Joseph
Hargreaves
Ltd,
[1900]
1
Ch
347,
that
“if
the
state
insists
on
a
man
disclosing
his
private
affairs
for
a
particular
purpose
it
requires
a
very
strong
case
to
justify
that
disclosure
being
used
for
other
purposes”,
on
that
portion
of
the
judgment
of
Lord
Denning,
MR
in
Alfred
Crompton
Amusement
Machines
Ltd
v
Commissioners
of
Customs
and
Excise,
[1972]
2
WLR
835
at
859,
in
which
confidence
as
a
ground
of
privilege
from
production
is
discussed
and
on
the
reasons
of
all
three
judges
of
the
Court
of
Appeal
in
England
in
Norwich
Pharmacal
Co
v
Commissioners
of
Customs
and
Excise,
[1972]
3
All
ER
818.
With
respect
to
the
comment
of
Lord
Reid
I
should
have
thought
that
where,
as
here,
the
return
has
already
been
used
by
the
Minister
for
a
purpose
other
than
that
for
which
it
was
filed
it
does
not
seem
to
lie
well
with
him
to
put
forward
the
confidential
nature
of
the
same
return
as
a
bar
to
its
disclosure
to
the
party
affected
by
the
use
he
has
made
of
it.
But
be
that
as
it
may,
the
confidential
nature
of
income
tax
returns
in
this
country
has
been
considered
by
the
Supreme
Court
in
R
v
Snider,
[1954]
CTC
255;
54
DTC
1129,
and
though
that
case
is
distinguishable
from
the
present,
first,
on
the
ground
that
the
questions
before
the
Court
related
to
the
production
of
income
tax
returns
in
criminal
as
opposed
to
civil
proceedings
and,
second,
on
the
ground
that
there
the
questions
also
related
solely
to
the
income
tax
returns
of
the
accused
person,
it
appears
to
me
that
the
comments
of
several
members
of
the
Court
offer
a
guide
to
the
importance
to
be
attached
to
the
alleged
confidential
character
of
such
returns.
Rand,
J
speaking
for
himself
and
Rinfret,
CJ
said
at
pages
259-60
[1131]:
lt
is
claimed
that
the
circumstances
give
rise
to
such
a
privilege
in
the
Crown
and
that
the
public
interest
emanates
from
an
undertaking
on
its
part,
implied
by
the
Income
Tax
Act,
toward
all
income
taxpayers
that
the
contents
of
the
returns
of
none
of
them
will
be
revealed
beyond
the
circle
of
officials
concerned
in
administering
the
statute.
Section
121
of
that
Act
forbids
the
disclosure
of
and
information
obtained
under
it
to
any
person
“not
legally
entitled
thereto”.
For
the
purposes
of
his
argument,
however,
Mr.
Varcoe
puts
that
aside
as
being
irrelevant
to
the
proposition
urged.
I
am
unable
to
agree
with
either
of
these
contentions.
I
can
find
nothing
in
the
statute
indicating
such
an
undertaking.
The
disclosure
of
a
person’s
return
of
income
for
taxation
purposes
is
no
more
a
matter
of
confidence
or
secrecy
than
that,
say,
of
his
real
property
which
for
generations
has
been
publicly
disclosed
in
assessment
rolls.
It
is
in
the
same
category
as
any
other
fact
in
his
life
and
the
production
in
court
of
its
details
obtained
from
his
books
or
any
other
source
is
an
everyday
occurrence.
The
ban
against
departmental
disclosure
is
merely
a
concession
to
the
inbred
tendency
to
keep
one’s
private
affairs
to
one’s
self.
Now
that,
in
this
competitive
society,
is
a
natural
and
unobjectionable
tendency
but
it
has
never
before
been
elevated
to
such
a
plane
of
paramount
concern.
The
most
confidential
and
sensitive
private
matters
are
daily
made
the
subject
of
revelation
before
judicial
tribunals
and
it
scarcely
seems
necessary
to
remark
on
the
relative
insignificance
to
any
legal
or
social
policy
of
such
a
fact
as
the
income
a
man
has
been
able
to
produce.
I
should
say,
therefore,
that
the
only
privilege
furnished
is
that
given
by
the
statute
and
that
it
is
a
privilege
for
the
benefit
of
the
individual
and
not
the
Crown.
Kellock,
J
speaking
for
himself
and
Kerwin,
Taschereau
and
Fauteux,
JJ
(as
they
then
were)
said
at
page
266
[1135]:
Mr.
Varcoe
refused
to
take
any
such
position
in
the
case
at
bar
but
based
the
appeal
upon
the
ground
of
an
undertaking
on
the
part
of
the
Crown
that
tax
returns
will
be
kept
confidential
by
the
department.
Neither
in
criminal
nor
in
civil
proceedings
are
documents
which
are
merely
“official”
or
“confidential”
within
the
rule
as
to
non-disclosure
on
the
ground
of
public
interest.
In
Asiatic
Petroleum
Company
v
Anglo-Persian
Oil
Company
Limited,
[1916]
1
KB
822,
Swinfen
Eady,
LJ
(with
the
subsequent
approval
of
the
Privy
Council
in
Robinson
v
South
Australia,
[1931]
AC
704
at
714),
said
at
p
830
that
the
foundation
of
the
rule
“is
that
the
information
cannot
be
disclosed
without
injury
to
the
public
interests,
and
not
that
the
documents
are
confidential
or
official,
which
alone
is
no
reason
for
their
non-production:
Smith
v
East
India
Co,
1
Ph
60;
Hennessy
v
Wright,
21
QBD
509.”
In
my
view
of
the
statute,
there
is
no
provision
as
to
the
confidential
character
of
returns
filed
except
that
provided
for
by
Sections
82(2),
93
and
121,
with
which
I
have
already
dealt.
It
is
also
worthy
of
note
that
the
answer
given
by
the
Court
to
the
third
question,
which
asked
whether
sections
81
and
121
of
the
Income
War
Tax
Act
and
the
Income
Tax
Act
(which
were
the
forerunners
of
section
241
of
the
present
Act)
affected
the
right
of
the
Minister
to
object
on
the
ground
of
prejudice
to
the
public
interest
to
the
production
of
the
documents
mentioned
in
Question
1,
was
not
a
simple
negative
but
was:
The
Minister
has
no
right
to
object
to
the
production
of
the
documents.
The
statutory
provisions
with
respect
to
disclosure
have
undergone
notable
changes
since
the
Snider
case
was
decided
but
it
appears
to
me
to
follow
from
the
reasoning
in
that
case
that
in
this
country
there
is
no
basis
for
a
conclusion
that
the
disclosures
which
the
Income
Tax
Act
requires
the
taxpayer
to
make
are
confidential
and
there
is
no
immunity
for
them
from
production
in
legal
proceedings
except
to
the
extent
that
Parliament
has
expressly
spelled
out
such
immunity
in
the
statute.
Here,
as
previously
mentioned,
it
is
conceded
that
the
statute
by
its
terms
does
not
apply
to
prevent
production
and
in
my
view
there
is
no
basis
for
a
further
immunity
based
on
some
supposed
public
interest
in
protecting
from
disclosure
either
the
whole
class
claimed
in
the
affidavit
or
particular
returns,
short
of
there
being
some
feature
applicable
to
a
particular
return,
if
such
is
conceivable,
which
might
serve
to
render
it
immune
from
production
on
grounds
which
would
support
a
claim
for
what
was
referred
to
as
Crown
riv-
ilege
in
the
classic
sense
that
is
to
say,
the
exceptional
case
reserved
by
the
answer
of
the
Supreme
Court
to
Question
1
in
the
Snider
case.
There
must,
moreover,
be
reason
at
least
to
doubt
that
section
41
of
the
Federal
Court
Act
can
be
relied
on
as
establishing
any
new
right
or
basis
for
a
claim
to
immunity.
The
section,
as
I
read
it,
gives
statutory
sanction
to
the
authority
of
the
Court
to
examine
a
document
for
which
immunity
is
claimed
on
grounds
heretofore
known
to
the
law
as
grounds
for
claiming
Crown
privilege
and
to
weigh
the
public
interest
asserted
in
favour
of
immunity
against
that
in
the
proper
administration
of
justice.
It
is
thus
a
procedural
provision
and
I
do
not
read
it
as
conferring
any
new
right
based
on
grounds
of
public
interest
not
heretofore
recognized
as
being
sufficient
to
justify
privilege
from
production.
I
would
dismiss
the
appeals
with
costs.
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