Addy, J:—The applicants brought a motion before The Honourable Mr Justice Dube, the purpose of which was expressed to be:
to fix a date and a place for the determination of the question whether the Petitioners (Applicants) have a solicitor-client privilege in respect of documents, books, records nd other written things seized on 8 July 1982, at the premises of Verchere, Noel & Eddy, lawyers, and kept under seal since that time by Jacques Morel, assistant sheriff for the district of Montreal:
The appointment was granted but, although it was the intention of the applicants to file a formal motion for the requested relief with the usual affidavits in support for presentation at the time and place appointed, this additional step was overlooked as counsel for the parties had been attempting to settle the various questions raised.
Upon appearing before me, as most matters had by that time been settled and several of the seized documents had, on consent, been returned to the applicants’ solicitors and as the sole issue to be determined was a question of law, there being no dispute as to facts, it was urged upon me by all parties that I proceed to determine it as if a formal notice of motion had been made in writing. In these exceptional circumstances and in order to save time and avoid further costs, I agreed to dispense with the formal notice of motion and affidavit and to hear argument on the matter.
The only documents still subject to dispute were several bundles of cancelled cheques attached to monthly bank statements pertaining to the cheques. They were all drawn on the same account in the name of a third party in trust. None of the applicants were in any way mentioned in any of these documents and there was no evidence in any way connecting them with the documents. It was common ground, however, that the cheques and the accompanying bank statements were located in the office of the above- mentioned solicitors among the documents pertaining to the affairs of the applicants and that they were, for that reason, surrendered by the solicitors to Mr Morel as custodian, pending the final determination of the question of solicitor-client privilege by the Court.
It was also common ground that the entry and search was made pursuant to an authorization to that effect granted by The Honourable Mr Justice Gratton of the Supperior Court of the Province of Quebec, under the provisions of subsection 231(4) of the Income Tax Act, SC 1970-71-72, c 63 as amended. A copy of the said authorization to enter and search was, upon consent, filed as an exhibit to these proceedings. The present application was made for the determination of the question mentioned in subsection 232(4) of that Act.
The relevant portions of the Income Tax Act read as follows:
231. Investigations.
(1) 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.
231.
(4) Search. Where the Minister has reasonable and probable grounds to believe that a violation of this Act or a regulation has been committed or is likely to be committed, he may, with the approval of a judge of a supeior or county court, which approval the judge is hereby empowered to give on ex parte application, authorize in writing any officer of the Department of National Revenue, together with such members of the Royal Canadian Mounted Police or other peace officers as he call on to assist him and such other persons as may be named therein, to enter and search, if necessary by force, any building, receptacle or place for documents, books, records, papers or things that may afford evidence as to the violation of any provision of this Act or a regulation and to seize and take away any such documents, books, records, papers or things and retain them until they are produced in any court proceedings.
232.
(4) Application to judge. Where a document has been seized and placed in custody under subsection (3), the client or the lawyer on behalf of the client, may
(a) within 14 days from the day the document was so placed in custody, apply, upon 3 days’ notice of motion to the Deputy Attorney General of Canada, to a judge for an order
(i) fixing a day (not later than 21 days after the date of the order) and place for the determination of the question whether the client has a solicitor-client privilege in respect of the document, and
(ii) requiring the custodian to produce the document to the judge at that time and place;
(b) serve a copy of the order on the Deputy Attorney General of Canada and the custodian within 6 days of the day on which it was made, and, within the same time, pay to the custodian the estimated expenses of transporting the document to and from the place of hearing and of safeguarding it; and
(c) if he has proceeded as authorized by paragraph (b), apply, at the appointed time and place, for an order determining the question.
It is of some importance to note also that section 231, which, as above- mentioned, includes the power to enter upon and search any property or premises for evidence “for any purpose related to the administration or enforcement of this Act”, also contains provisions relating to special inquiries pursuant to which a special enquirer of the Department has the power to enquire “as he may deem necessary with reference to anything relating to the administration or enforcement of this Act”. It is difficult to conceive broader powers to enter upon what may quite fairly be labelled an evidentiary fishing expediation. The evidence so seized or gathered may be used at such enquiry. (Refer subsections (7), (8), (11), (12), (13), (14) and (15) of section 231.)
Counsel for the applicants readily admitted that there could be no question of solicitor-client privilege involved in the documents under considéra- tion, since they consisted solely of cheques and bank statements, He, however, argued that the Court should order that they be returned to the applicants by the custodian on two grounds:
1. That the evidence so seized was irrelevant.
2. That since the documents were not mentioned in the authorization to seize and search and since they do not in any way purport to relate to any of the applicants, who were the only persons mentioned in the authorization as persons whose affairs are subject to investigation, the seizure was on its face excessive and, therefore, unreasonable and unlawful. He thus seeks to have the seizure nullified as contrary to the provisions of section 8 of the Canadian Bill of Rights which guarantees protection against unreasonable search and seizure. He also, for that same reason, invoques the provisions of subsection 24(2) of the Constitution Act, 1981 which requires that the evidence be excluded and rejected where its admission is liable to bring the administration of justice into disrepute.
Dealing with the first point raised, that is, the question of relevancy, the applicants rely on two fairly recent decisions of this Court, namely, In the Matter of Hoyle Industries Ltd and Hoyle Twines Ltd, [1980] CTC 501; 80 DTC 6363 and /n re Romeo’s Place Victoria Ltd et al, [1981] CTC 380; 81 DTC 5295.
As in the case at Bar, both these decisions resulted from applications made pursuant to subsection 232(4) of the Income Tax Act and concerned Claims for solicitor-client privilege over documents of the applicants seized from the possession of their solicitors. In both cases, certain documents, which admittedly would not be subject to solicitor-client privilege, were ordered to be returned to the lawyers solely on the grounds that they were completely irrelevant as evidence concerning the financial affairs of the applicants.
Reluctantly, I find myself unable to follow those decisions for the following reasons: the purpose of section 232, in my view, has been enacted exclusively and solely to allow the question of solicitor-client privilege to be determined by a special summary procedure which icludes the creation of a custodian without court order. In the first place, it deals only with documents that are in the possession of or under the control of a lawyer as therein defined. Thus, a document that might be found in the possession of an accountant or other party or in the possession of the taxpayer is not covered by the section. The wording of subsection (3) which details the procedure to be followed at the time of attempted seizure, deals only with the case where the document is in the possession of a lawyer, where the latter claims that it relates to a named Client and also claims that that particular person enjoys a solicitor-client privilege with regard to the document. Subsection (4) lays down the procedure for fixing a time and place “for the determination of the question whether the client has a solicitor-client privilege in respect of the document”. Subsection (5) provides that the hearing will be in camera and that the judge shall “determine the question” and “decide the matter summarily”. This must obviously refer to the matter or question covered by subsection (4). Subsection (10), which gives the judge powers to make other directions concerning the matter, specifically restricts the power to give further direction to one which “is most likely to carry out the object of this section of allowing solicitor-client privilege for proper purposes”.
In the several other subsections, the issue of solicitor-client is mentioned but at no place whatsoever in those provisions is any other issue either mentioned directly or alluded to in any way.
I must conclude that the special procedures provided for in section 232, including the obligation of the the officer seizing the document to refrain from looking at it, to seal it in a package and to place it in the hands of a sheriff of the county or the district concerned as a custodian, as well as the powers granted to the judge are all enacted solely and exclusively for the purpose of dealing with the issue of possible solicitor-client privilege and for no other purpose. The judge has not on an application of this kind, the jurisdiction to deal with an issue of relevancy of the evidence or any other substantive issue whatsoever, for that matter.
secondly, even if jurisdiction did exist to determine a question of relevancy, it could never be determined at this stage as there is no issue in dispute before the judge in the light of which any such question must necessarily be decided. Section 231 which authorizes the entry and seizure provides that the entry and seizure may be made “for any purposes related to the administration or enforcement of this Act”. (Refer subsection (1) quoted above.) Subsection 1(d) (also quoted above) provides that the document may be used as evidence as to the violation of any provison of the Act or a regulation and subsection (4) gives the right to enter and seize the evidence in the event of a belief in the possible future violation of the act or regulations. When one considers the innumerable possible violations and resulting issues and side issues, both present and future which might arise, and when one considers that they are in no manner fixed or determined at present, it is, in my view, absolutely impossible to make any proper judicial ruling at this stage on whether a particular document is or will eventually prove to be relevant.
For the above reasons, I decline to consider the question of whether or not the cheques or bank statements in issue are relevant.
I will now consider the second argument of the applicants to the effect that the seizure of the documents constituted an unreasonable and unauthorized seizure and thus constituted a fundamental violation of their rights.
In the first place, for the reasons previously mentioned regarding the question of whether the documents would be relevant, I find that I have not the jurisdiction in an application under section 232 to even consider the question of excessive seizure as section 232 authorizes me to deal only with the question of solicitor-client privilege. Remedies exist for those seeking a redress from searches and seizures that are excessive and unreasonable for many reasons other than the fact that they might constitute an evasion of a solicitor-client privilege, but such redress can neither be sought nor enforced under the authority of section 232 of the Income Tax Act.
Finally, since the basis of the claim regarding excessive seizure or unauthorized seizure is that the documents do not pertain to the affairs of the applicants and are not their documents, then none of the applicants has any standing before this Court to request any relief regarding those documents. It is only those persons who have an interest in them who may be heard on any issue affecting the documents. No such person is before the Court. Thus, even if I did have jurisdiction to decide that issue and I have already held that I do not, it could not be decided at the request of the present applicants.
For the above reasons, the cheques and bank statements, which I personally resealed following the hearing and turned over for safekeeping to the District Administrator of this Court in Montreal, will be turned over to the solicitor for the Attorney General for Canada or his duly authorized representative to be dealt with in accordance with the provisions of the Income Tax Act.
Subsection 232(9) provides that no costs may be awarded upon the disposition of any application under section 232.