The Queen v. Betterest Vinyl Manufacturing Ltd., [1990] 2 CTC 292 (BCCA)

Per Curiam: —Both respondents were charged with tax evasion contrary to paragraph 239(1)(d) of the Income Tax Act. The respondent Holmes was also charged with making a false or deceptive statement in his income tax return contrary to paragraph 239(1)(a) of the Act.

The respondents were tried by a Provincial Court judge who acquitted them. The Crown appealed to a Summary Conviction Appeal Court judge who dismissed the appeal. The Crown now appeals to this Court on a question of law alone which is described in this way in its factum:

That the learned summary conviction appeal court Judge erred in holding that photocopies of documents are not admissible where the originals have been seized from, and later returned to, an accused.

Counsel for the respondent describes the issue in this way:

The issue in this appeal is whether the rule which precludes the admission of secondary evidence to prove the truth of the contents of a document or documents, without first laying a proper foundation, has been abrogated in favour of a rule which admits everything and makes the issue a question of weight.

The circumstances giving rise to the appeal are that on July 25, 1984 employees of the Department of National Revenue searched premises occupied by the respondents. The search was authorized by a warrant issued under the provisions of what was formerly subsection 231(4) of the Income Tax Act. Documents were seized and taken away. Mr. Kirk was the employee of the Department ofNational Revenue responsible for investigating the affairs of the respondents to determine whether there had been infractions of the Income Tax Act. Mr. Kirk took the seized documents into his possession and began analyzing them.

Very shortly after the documents were seized the solicitors for the respondents applied to the Federal Court of Canada for an injunction ordering the documents to be sealed pending a challenge in the Federal Court to the validity of the warrant. The injunction was granted and the documents were sealed.

On August 30, 1984 in other proceedings in the Federal Court, it was held that what was formerly subsection 231(4) of the Income Tax Act contravened provisions of the Charter of Rights and Freedoms and was of no force or effect. See: M.N.R. v. Kruger, [1984] 2 F.C. 535; [1984] C.T.C. 506; 84 D.T.C. 6478 and Re Print Three Inc. and The Queen, [1985] 2 C.T.C. 48; 85 D.T.C. 5303; 20 C.C.C. (3d) 392 (Ont. C.A.).

On September 12, 1985 Mr. Kirk arranged for the documents which had been seized from the respondents to be returned to them. Warrants had been obtained under what was then Criminal Code section 443, now section 487. The warrants authorized the seizure of the documents. The documents were returned to the respondents but immediately seized pursuant to the Criminal Code warrants.

On September 18, 1985 an order was made under what was formerly Criminal Code subsection 446(1), now subsection 490(1), authorizing the detention of the documents for three months.

On December 4, 1985 the Criminal Code was amended to provide that the Crown was required to give three clear days' notice to the respondents of the intention to apply for an order to extend the period of detention of the documents. The effect of the amendment to the Criminal Code did not come to the attention of the local office of the Department of National Revenue with the result that the requisite three days' notice could not be given before the expiry of the three-month period of detention.

It was decided to make xerox copies of the documents deemed essential to proof of the case for the Crown. After the copies were made the original documents were returned to the respondents on December 23, 1985.

The trial before the Provincial Court judge was held on February 22, 1988. At the commencement formal documents were entered without objection from the respondents. The Crown then called its first witness, Mr. Gould, an accountant, who said he had been involved in preparing financial statements and income tax returns for the respondents. During his examination in chief he identified documents as copies of documents he was familiar within his capacity as the accountant for the corporate respondent. The documents included journal entries in Mr. Gould's handwriting, an “audit point sheet" which he had prepared and an inventory ledger card. Counsel for the respondents objected to the admission of copies rather than the originals so the copies were marked for identification.

Mr. Kirk was then called and at the request of counsel a voir dire was conducted to determine the admissibility of the copies of the documents seized from the respondents. Mr. Kirk explained what had happened to the documents from the time they were originally seized until they were finally returned to the respondents on December 23, 1985 after copies had been made.

He also explained what procedure he followed when copying the documents. He said the original document was photocopied by a secretary. He then compared the copy with the original; if he was satisfied the copy was an exact copy of the original, he placed on the copy a stamp which read:

I hereby certify that this is a true copy of a book or record or document made pursuant to Section 231(9) of the Income Tax Act from the records of Betterest Vinyl Manufacturing Ltd.

I am an Officer of the Department of National Revenue authorized under Section 231(1) of the Income Tax Act.

Mr. Kirk said he did not follow that procedure with respect to all of the documents the Crown wished to tender as exhibits. He said other investigators under his supervision dealt with the other documents and followed the same procedure he had followed.

In cross-examination Mr. Kirk said the original documents were not available as they had been returned to the respondents. He said he did not know if they had disappeared and he had not made efforts after their return to the respondents to determine if they were still available.

In addition to the documents which had been marked for identification during the testimony of Mr. Gould the Crown wished to tender copies of:

(a) the sales journal of the corporate respondent;

(b) the general ledger of the corporate respondent;

(c) bank statements of the respondent Holmes; and

(d) duplicate deposit slips for the bank account of Mr. Holmes.

At the conclusion of the voir dire the Provincial Court judge held the Crown had not met the requirements of subsections 446(13) and (14), now subsection 490(13) and (14), of the Criminal Code. Those subsections provide for the use of copies certified by the Attorney General. The judge said that neither Mr. Kirk nor others under his supervision were authorized by the Attorney General to certify the copies of the documents seized from the respondent. The judge also held the Crown could not rely on what was then subsection 231(9) of the Income Tax Act which authorized the use of certified copies of documents in certain circumstances. Subsection 231(9) is now subsection 231.5(1).

After the reasons for judgment were given by the trial judge the proceedings were adjourned for lunch. Over the luncheon adjournment counsel for the Crown considered his position. When the proceedings resumed he sought an adjournment until the following day in order that he might discuss the matter further with his colleagues. The adjournment was refused and counsel for the Crown then advised the trial judge the Crown would call no further evidence. The judge then acquitted the accused on all counts.

The appeal to the Summary Conviction Appeal Court judge was heard on the basis of the record in the Provincial Court. In his reasons for judgment the Appeal Court judge referred to an excerpt from McWilliams Canadian Criminal Evidence (2d) (1984) at page 93 which the Crown said supported the admissibility of copies of documents. The judge rejected that contention.

The judge then dealt with the Crown's submission that, while the documents had been seized under the provisions of the Criminal Code, it was open to the Crown to rely on the provisions of the Income Tax Act and utilize copies of the original documents. The judge rejected that submission and dismissed the appeal.

On this appeal the Crown relied only on the common law rules relating to the admissibility of copies of original documents.

Counsel for the Crown, who was not counsel in the Provincial Court or in the Appeal Court, took the position that the best evidence rule had been much modified in recent times. He submitted that, provided there is evidence before the trier of fact to support the accuracy of the copies sought to be introduced, it was unnecessary to adduce evidence explaining why the originals of the documents were unavailable. Counsel for the respondents, on the other hand, sought to uphold the best evidence rule in all its aspects. It was his position that the common law provides for the admission of copies of documents but that is an exception to the general rule. Before the exception can be relied on a proper foundation must be laid to establish that the party seeking to prove the copy cannot obtain the original of the document. He said in the case at bar the Crown had failed to lay such a foundation. He also said the Crown had available to it a number of methods by which the original documents could be produced. He suggested the Crown could have served Mr. Gould and the respondents' bankers with subpoenae duces tecum but did not do so. It could have served the respondents with notices to produce original documents but did not do so. It could have relied upon the business records exception in the Canada Evidence Act to prove the business records of the corporate respondent and the banking records of both respondents but did not do so.

As I read the text writers and the authorities we are no longer bound to apply strictly the best evidence rule as it relates to copies of documents and especially to photocopies of them.

Halsbury's Laws of England, 4th ed., Vol. 17 page 8 states:

The logic of requiring the production of an original document where it is available rather than relying on possibly unsatisfactory copies, or the recollections of witnesses, is clear, although modern techniques make objections to the first alternative less strong.

That passage was referred to in Papalia v. The Queen, [1979] 2 S.C.R. 256 at 263-64. I will deal with that decision later.

P.K. McWilliams in Canadian Criminal Evidence, 2d ed. (1984), in his discussion on “original” documents, quotes at page 92 from the decision of Limerick, J.A. in R. v. Alward (1976), 32 C.C.C. (2d) 416; 73 D.L.R. (3d) 290 (N.B.S.C. App. Div.); affd [1978] 1 S.C.R. 559; 35 C.C.C. (2d) 392; 76 D.L.R. (3d) 577 at 429 (D.L.R. 303): "I can see no reason why a carbon copy of a memorandum made simultaneously with the original would not be as accurate as the original. . .”

and goes on to say (at page 93): "[w]ith the recent development of photocopying devices it is arguable that they should be admitted as originals as well even though they are subsequently made."

In Phipson on Evidence, 13th ed. (1982) the effect of the best evidence rule is said to go more to weight than to admissibility (at page 70):

In the present day, then, it is not true that the best evidence must, or even may, always be given, though its non-production may be a matter for comment or affect the weight of that which is produced.

The following passage at page 71 also illustrates how the rule is applied:

In Kajala v. Noble, The Times, March 13, 1982 the Divisional Court said that the only remaining instance of the rule was that if an original document was available in one's hand it must be produced. In that case the court held that justices had been entitled to rely on a copy of a video cassette recording made from an original shown on the BBC television news bulletins. The original was in the possession of the BBC and the copy was produced and identified by an employee of that organisation. The justices had been satisfied that it was an authentic copy. They accepted that the BBC policy of refusing to allow the original to leave their premises was reasonable and that the film crew who took the original was overseas.

The strongest argument by text writers against the strict application of the rule is found in Wigmore on Evidence Vol. IV Chadbourn Revision (1972). At paragraph 1191 on page 434 it is contended that where the accuracy of a copy is not disputed there is no justification for refusing its admission:

What is most needed today, for this rule in general, is flexibility. This could be given by the following provision. . .: Production of the original may be dispensed with, in the trial court's discretion, whenever in the case in hand the opponent does not bona fide dispute the contents of the document and no other useful purpose will be served by requiring production.

In support of this position United States v. Manton, 107 F.2d 834 (C.A. 2nd Cir. 1938) is cited as a “striking instance of liberal, non-technical administration of the best evidence rule.” In that case the Court admitted "recordak" facsimiles of cheques. The Court said:

. . .the best evidence rule should not be pushed beyond the reason upon which it rests. It should be "so applied. . .as to promote the ends of justice, and guard against fraud or imposition. . .”

Any over-technical and strained application of the best evidence rule serves only to hamper the inquiry without at all advancing the cause of truth.

United States v. Manton was referred to by the Supreme Court of Canada in Papalia v. The Queen, supra.

Under the heading "Any document provable by copy in trial court's discretion" Wigmore says in paragraph 1231 at page 546:

Much of the petty disputatiousness and futile quibbling, observable in the application of the present rule (sound as the rule is in general policy), could be eliminated by leaving to the trial court a discretion to sanction, on any ground, the use of a copy without producing the original, where the nature of the controversy does not require an inspection of the original by the tribunal. Good headway has been made to this end in England and Canadian practice.

The "headway" referred to in Canadian practice relates to statutory provisions such as the sections of the Income Tax Act and Criminal Code pertaining to copies of documents certified in accordance with the provisions of those statutes.

In Papalia v. The Queen, supra, the Supreme Court of Canada considered the admissibility of excerpts from original tape recordings. The original tape recordings were taken over a long period of time and storage of the tapes presented a problem. The portions of the original tapes deemed to be relevant were identified and copies were made of them. The original tapes were then destroyed. At trial the Crown sought the admission of the re-recorded excerpts from the original tapes. Counsel for the accused said no question was raised as to the authenticity of the re-recordings. The tapes were admitted in evidence and formed an important part of the evidence for the Crown upon which convictions were entered against some of the accused. On an appeal to the Court of Appeal of Ontario Mr. Justice Jessup gave reasons for rejecting the contention of the appellants that the re-recorded tapes were inadmissible.

An appeal was taken to the Supreme Court of Canada. One of the grounds of appeal was that re-recorded tapes were inadmissible. Mr Justice Pigeon after setting out the reasons for judgment of Mr. Justice Jessup on the issue of admissibility said there was no reason to doubt the correctness of his opinion.

The excerpt from the reasons for judgment of Mr. Justice Jessup is to be found at pages 263-65 of the Supreme Court Reports. In the course of his reasons Mr. Justice Jessup referred to the decision of the Federal Court of the United States in United States v. Knohl, 379 F.2d 427 (1967). In that case the decision of Mr. Justice Sutherland sitting as a circuit justice in the Second Circuit of the United States Federal Court in United States v. Manton gave reasons for admitting secondary evidence. As noted above, the Manton case is cited by Wigmore and is referred to in this excerpt from the decision of the Federal Court of the United States in Knohl cited by Mr. Justice Jessup.

Where a re-recording of a tape recorded conversation is offered in evidence and the trier finds that a proper foundation has been laid for it, and that the rerecording is authentic and accurate, a technical and rigorous application of the best evidence rule makes no sense and is not required. Johns v. United States, 323 F.2d. 421 (5 Cir. 1963). The discussion of the rule by Mr. Justice Sutherland, sitting as Circuit Justice in the Second Circuit, in United States v. Manton, 107 F.2d. 834, 845 (2 Cir. 1939) is pertinent:

The rule is not based upon the view that the so-called secondary evidence is not competent, since, if the best evidence is shown to be unobtainable, secondary evidence at once becomes admissible. And if it appears, as it does here, that what is called the secondary evidence is clearly equal in probative value to what is called the primary proof, and that fraud or imposition, reasonably, is not to be feared, the reason upon which the best evidence rule rests ceases, with the consequence that in that situation the rule itself must cease to be applicable, in consonance with the well-established maxim—cessante ra- tione legis, cessât ipsa lex.

An over-technical and strained application of the best evidence rule serves only to hamper the inquiry without at all advancing the cause of truth.

We are not unmindful, however, that tape recordings are susceptible to alteration and that they often have a persuasive, sometimes a dramatic, impact on a jury. It is therefore incumbent on the government to produce clear and convincing evidence of authenticity and accuracy as a foundation for the admission of such recordings; and where the Court accepts them as authentic and accurate but the evidence is conflicting on these points, it must caution the jury to scrutinize the evidence with care.

In R. v. Waite (1982), 76 Cr. App. Rep. 110 the Court of Appeal had to deal with the admissibility of photocopies of certain documents. In giving judgment for the Court Mr. Justice Beldam said at pages 116-17:

First, there are no degrees of secondary evidence. The mere fact that it is easy to construct a false document by photocopying techniques does not render the photocopy inadmissible. Moreover, it is now well established that any application of the best evidence rule is confined to cases in which it can be shown that the party has the original and could produce it but does not. Lord Denning M.R. made observations on this topic in the case of Garton v. Hunter, [1969] 2 Q.B. 37. At p. 44, he said: "That old rule has gone by the board long ago. . .Nowadays we do not confine ourselves to the best evidence."

More recently, in a criminal case, the Divisional Court adopted the same approach to the copy of a video tape of street disturbances which was admitted in evidence by the Brentford Justices. In Kajala v. Noble (1982), 75 Cr. App. R. 149 Ackner L.J. in giving the judgment of the court, said at p. 152:

The old rule, that a party must produce the best evidence that the nature of the case will allow, and that any less good evidence is to be excluded, has gone by the board long ago. The only remaining instance of it is that, if an original document is available in one's hands, one must produce it; nowadays we do not confine ourselves to the best evidence. We admit all relevant evidence. The goodness or badness of it goes only to weight, and not admissibility.

In R. v. Mills (unreported), B.C.C.A., Doc. No. CA770102, September 8, 1978, this Court dealt with the admissibility of the testimony of a police officer who described the contents of passports found in the possession of the accused. The police officer found the passports in the possession of the accused and read them. He made notes of their contents and returned the passports to the accused. It was held that the viva voce testimony of the officer as to the contents of the passports was admissible.

In R. v. West (unreported), B.C.C.A., Doc. No. V00766, February 8, 1989, it was held that evidence of a store manager who examined the computer inventory records and made a note of information which appeared on the computer screen was admissible.

In view of the foregoing it is my opinion that the photocopies of original documents then in the possession of Mr. Kirk and the documents marked for identification during the taking of the evidence of Mr. Gould should have been admitted in evidence as part of the case for the Crown. Mr. Kirk explained why the photocopies were made and said that he compared the photocopies with the originals to ensure that the photocopies were accurate. In my opinion that evidence, if accepted by the trier of fact, provides a sufficient basis for the admissibility of the photocopies. Mr. Gould identified the documents presented to him as being familiar to him in his capacity as accountant for the corporate respondent.

Counsel for the respondent strenuously argued that the Crown intended to proceed as it usually did in income tax cases on the basis of certification of documents in accordance with the former provisions of the Income Tax Act. That may well have been the intention of Crown counsel. Certainly the arguments addressed to the Provincial Court judge and later to the Appeal Court judge indicate the Crown was relying upon the certification of the documents by Mr. Kirk. But because that argument of the Crown fails it does not follow that resort may not be had to the general principles relating to the admissibility of copies of documents. That is what the Crown argued before us and in my view successfully.

Some point was made by counsel for the respondent of the fact that the Crown closed its case without calling additional witnesses to establish the basis upon which photocopies of documents other than those referred to by Mr. Kirk and Mr. Gould might be admitted. I think that submission is ineffective because, having ruled inadmissible the documents referred to by Mr. Kirk, the Provincial Court judge was bound to rule inadmissible any other photocopies of original documents which were made prior to the return of the original documents to the respondents. In effect, because of the ruling by the judge it would have been a waste of time for the Crown to call witness after witness to speak to the method employed in making and authenticating photocopies of original documents.

In my opinion this appeal must be allowed and the matter returned to the Provincial Court for a new trial. I cannot part with this case without expressing the regret that it was only after the decision of the Provincial Court judge and its failure before the Appeal Court judge that the Crown discovered the appropriate basis upon which it might seek the admission of the photocopies of original documents. It seems to me much time and effort has been wasted because the Crown did not in the first instance appreciate the correct basis upon which the admission of the photocopies might be sought. I hasten to add that I cast no responsibility on counsel for the Crown who appeared before us since he did not have the conduct of the matter either at trial, or in the Appeal Court.

Appeal allowed.