Mommersteeg and Giffen v. The Queen, 96 DTC 1011, [1995] 2 CTC 2767 (TCC)

Bonner J.T.C.C.:—This case concerns the taxability of employees in respect of rewards under frequent flyer plans in cases where the rewards result from the redemption of frequent flyer points earned om business travel at the employer’s expense. As well there is an issue relating to the conduct of an official of the Department of National Revenue during the information gathering process prior to the issuance of the assessments.

The substantive provisions of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act") dealing with inclusions in income from office or employment are noteworthy both for their simplicity and for their scope. Section 5 requires the inclusion in a taxpayer’s income of "...salary, wages and other remuneration, including gratuities, received by (the taxpayer) in the year”. Section 6, which is of direct concern here, sweeps into income the value of non-monetary benefits. It provides im part:

6.(1) There shall be included in computing the income of a taxpayer for a taxation year as income from an office or employment such of the following amounts as are applicable:

(a) the value of board, lodging and other benefits of any kind whatever received or enjoyed by him in the year in respect of, in the course of, or by virtue of an office or employment, except any benefit....

Both appellants were employees of Hiram Walker-Gooderham and Worts Limited ("HW"). [1] Both were required to travel frequently by air in the course of employment. The airfares were paid by HW. Both appellants were members of frequent flyer plans. Mr. Giffen was a member of Aeroplan, the frequent flyer plan operated by Air Canada and of Canadian Plus, the plan operated by Canadian Airlines International. Mr. Mommersteeg was a member of World Perks, the plan operated by Northwest Airlines. As a consequence of travel on business at HW’s expense the appellants were able to earn frequent flyer points (sometimes called "air miles" or "points"). Under the plans they were entitled to redeem their points and to receive reward certificates. Those certificates could then be exchanged for free airline tickets ("reward tickets"). By means of points and certificates so earned the appellants obtained reward tickets which they turned over to members of their respective families who used them during the years under appeal for personal travel.

In assessing tax for Mr. Mommersteeg’s 1990 taxation year the Minister of National Revenue ("Minister") included in income as a benefit under paragraph 6(1 )(a) of the Act the sum of $1,126 in respect of the value of reward tickets used in the year by the appellant’s wife and child. In assessing tax for Mr. Giffen’s 1989 and 1990 taxation years the Minister included in income $15,369 and $36,606 respectively in respect of the value of reward tickets used in those years by the appellant’s wife, son and daughter-in-law.

The main assumption upon which the assessments rested was that:

the value of the said free airline tickets was a benefit received by the appellant in respect of, in the course of, or by virtue of his office or employment with HW, within the meaning of paragraph 6(1 )(a) of the Income Tax Act and therefore fell to be included in computing the appellant’s income. [2]

As well, of course, the Minister assumed that the value of the various benefits was as previously set out. He arrived at that value, in the case of Mr. Giffen whose reward tickets were for first class and business class, by using the price charged by the airline for a first class or business class ticket for the flights in question. In the case of Mr. Mommersteeg, whose reward tickets were for economy class, he used the full economy fare.

On behalf of both appellants it was contended that:

A. paragraph 6(1 )(a) applies when a benefit is conferred on a taxpayer as an employee, not when it is conferred on him in some other capacity; employer paid travel did not give rise to any benefit, membership in the frequent flyer plan did; the link between employment and reward ticket was insufficient to satisfy paragraph 6(1 )(a); if benefits were conferred on the appellants they were conferred on them as members of frequent flyer plans not as employees;

B. flying in the course of employment on tickets purchased at HW’s expense generates frequent flyer points not reward tickets; if paragraph 6(1 )(a) requires any inclusion in income at all it is the value of points credited in the year to the employee’s frequent flyer account not the value of reward tickets used in the year; the assessments are therefore off target both as to the identity of the benefit received and as to the timing of receipt; [3] C. if the free flights were paragraph 6(1 )(a) benefits the quantum of the additions to income was excessive because:

I. in the case of Mr. Mommersteeg the Minister not only mistakenly assumed that two one-way tickets were round trip tickets but also assigned an excessive value to round trip tickets of the type used;

II. reward tickets are by reason of restrictions which attach to them, worth much less than the unrestricted but otherwise comparable revenue tickets the price of which the Minister used in arriving at the value of the benefits assessed;

III. in assessing the value of a benefit for purposes of paragraph 6(1 )(a) the cost to the provider of the benefit is relevant and in this case cost to HW was nil and the marginal cost to the airline did not exceed $40 to $50 per ticket.

On behalf of Mr. Mommersteeg it was also contended that officials of the Department of National Revenue secured the information on which the assessment was based in a manner which infringed the appellant’s rights under section 8 of the Canadian Charter of Rights and Freedoms ("Charter") and violated section 231.2 of the Act.

At the hearing of the appeals, evidence was given by John Giffen. At all relevant times Mr. Giffen was managing director of HW. He stated that the management committee of HW had considered the question whether it should try to assert a claim to benefits resulting from air travel at HW’s expense by employees who were members of frequent flyer plans. The committee decided that the cost of involvement in the matter would exceed any possible benefit to HW. The corporate policy, which I gather was in effect at all relevant times and applied to employees at all levels, was to refrain from becoming involved with benefits to employees who are members of the plans.

It was common ground that on three occasions in 1989 and six in 1990 frequent flyer points earned from Mr. Giffen’s business travel at the expense of HW were used to acquire reward tickets. Those tickets were issued to members of Mr. Giffen’s family at his request. A number of them were used by his spouse who accompanied him on trips which he made from Windsor to London, England in order to attend meetings of the board of HW’s parent company. [4] The reward tickets issued to Mrs. Giffen were for first class and were "companion tickets". Such tickets permit the holder to accompany a person travelling on a revenue [5] ticket. They can be issued only when the revenue ticket is issued. They are valid for travel only with the holder of the revenue ticket, that is to say to the same destination on the same flight and at the same time. Two business class round trip reward tickets between Windsor, Ontario and London, England were issued to Mr. Giffen’s son and daughter-in- law.

Evidence was given by Mr. Mommersteeg. In 1990 he was the manager of computer services for HW. He normally travelled for purposes of HW’s business about six times a year. In 1990 he was required by HW to take a training course in Orlando, Florida. He arranged for his wife and son to accompany him. All three travelled on Northwest Airlines from Detroit to Orlando and back. Mr. Mommersteeg’s ticket was bought by HW. He obtained reward round trip tickets for his wife and son. The reward tickets are the subject of the assessment. One of them was a companion ticket subject to restrictions similar to those described above. The cost to HW of Mr. Mommersteeg’s ticket was $264.80. On assessing the Minister erred as to the number of reward tickets issued. At the hearing counsel for the respondent conceded that only two round trip reward tickets were issued. He maintained however that the value of them was $375 each, the price of a full fare economy ticket.

The witness Gordon Young gave evidence as to the nature of the operation of frequent flyer plans. From 1986 to 1990 Mr. Young was manager of Air Canada’s Aeroplan. He was familiar not only with Aeroplan but also with competing plans. He indicated that all such plans operate in essentially the same way. He identified copies of the Aeroplan Members Guide and the Canadian Plus Program Information Guide in effect at the relevant time. A frequent flyer plan is a form of contract between airline and member. Membership is open only to individuals and is for the benefit only of the member. Points are not readily transferable. They are earned when a member travels on a revenue ticket, stays in an affiliated hotel or uses the services of another affiliate such as a car rental agency. The number of points earned by air travel varies with the distance travelled and the class of service used. For purposes of frequent flyer plans the identity of the person who pays for the member’s revenue ticket is irrelevant. Thus for example, a member who pays for a ticket used by a spouse is not entitled to points in respect of travel by the spouse.

A process is laid down for the redemption of points. The number of points required to obtain a reward ticket varies with distance, class of service [6] and time of travel. Before claiming such a ticket the member must first secure a reward certificate. Those certificates must be redeemed within one year by exchange for a ticket. Changes in reward ticket itineraries both before and after departure are restricted. The class of persons to whom reward tickets may be issued is limited. Where a single reward ticket is claimed it can be issued only to the member or to a member of his family. Where a reward consisting of two free tickets is claimed one must be issued in the name of the member or a relative.

Reward tickets are subject to capacity controls, that is to say, a limited number of seats on each flight is allocated to reward passengers. Some flights at peak periods are not available to reward passengers at all.

The redemption process is designed to impede the use of reward tickets for last-minute travel. The purpose which underlies all restrictions is to limit so far as possible the use of reward of tickets to the filling of seats which would otherwise be unsold. Mr. Young said that the incremental cost to the airline of a reward trip, being the cost of putting a passenger in a seat that would otherwise be empty, is in the neighbourhood of $50 per pas- senger round trip. The figure covers meals, baggage service, commissions and insurance.

Mr. Young testified that the price charged for revenue tickets varies with class of service and restrictions attached to the tickets. First and business class tickets are unrestricted and prices are not discounted. Economy tickets are sold for various prices. The most expensive economy ticket is called ’’full fare economy". Such tickets are unrestricted. Prices within economy class, generally speaking, vary inversely with the number of restrictions attached. On any one flight there may be ten to 20 different prices charged for a seat in the economy cabin. Restrictions may relate to the time when the ticket must be issued, flexibility of travel, for example, advance booking requirements and the ability to change the itinerary, the availability of refund if a ticket is not used, length of stay at destination and season in which travel is to take place. A major restriction relates to the number of tickets made available at each price level.

The restrictions to which reward tickets are subject are somewhat similar to those attached to economy tickets sold at less than full fare. Restrictions on the allocation of reward tickets are much more severe than similar restrictions attached to revenue tickets in economy class. It is clear from Mr. Young’s evidence that the value of reward tickets is, by reason of restrictions, substantially less than the value of a full fare revenue ticket for the same class of service between the same points.

It is essential at the outset to identify the benefit in order to determine whether it is linked in any way with employment and as well to address questions of timing and value which arise if there is a link. The Minister found the benefit to be free travel and also found that a benefit was received for purposes of section 6 at the time a free flight was taken. [7] In support of that position counsel for the respondent argued that, as a matter of law, a benefit within the purview of paragraph 6(1 )(a) must be quantifiable and that where a taxpayer might be said to receive a benefit at several stages of a transaction only the benefit which is capable of quantification will qualify as paragraph 6(1 )(a) benefit. In this regard counsel for the respondent relied on Robertson v. The Queen, [1990] 1 C.T.C. 114, 90 D.T.C. 6070 (Fed. C.A.). He argued that points or air miles are not quantifiable and that until utilized they constitute nothing more than a "mere possibility to realize real economic advantages".

For the appellant it was argued that if there existed any link whatever between employment and frequent flyer plan benefits, the link was between flying in the course of employment and air miles earned by doing so. Thus he identified the benefit as points earned by flying at the employer’s expense. The operation of redeeming air miles was portrayed as separate from the earning of them and as wholly unconnected with employment. Thus, if paragraph 6(1 )(a) applied at all, it required the inclusion in income for a year of the value of points received in that year.

In my view it is undesirable to back into the identification of the benefit by looking for something which is easy to value. If, on the facts, the benefit conferred takes the form of points then the case must be approached on that basis. However, it is clear on the evidence, in particular the documents published by the airline relating to their frequent flyer plans, that the benefit offered by the plans is free travel. Thus, for example, the Aeroplan form of application for membership urges one to "sign up here for free travel". It asserts that "...it’s easy to quickly build your Aeroplan account and cash in your miles for FREE flights, FREE hotel accommodation and FREE car rentals". One of the headings in the application form states "the sooner you join the faster you fly free". Similarly the members guide urges "just fly and you’ll earn Aeroplan miles that can be redeemed for impressive travel rewards. Rewards like free flights in Canada...along with free or discounted hotel and car rental rewards" [Emphais in original]. Points are not in themselves offered or portrayed as rewards. They serve only to measure the amount of qualifying activity necessary to earn a reward.

The next question is whether the free tickets in issue are benefits caught by section 6 of the Act. Section 6 requires that a benefit be included in income only if it is "received or enjoyed" by the employee "...in respect of, in the course of, or by virtue of...employ ment...". The Supreme Court of Canada commented extensively in the scope of section 6 in The Queen v. Savage, [1983] C.T.C. 393, 83 D.T.C. 5409. [8] }} In that case an employee of an insurance company took courses relating to the operation of such companies. Her employer paid to her the sum of $300 upon successful completion of the courses. The payment was made pursuant to a general corporate policy of the employer. The Court found that the payment fell within section 6 and made the following observations at page D.T.C. 5414:

The meaning of "benefit of whatever kind" is clearly quite broad; in the present case the cash payment of $300 easily falls within the category of "benefit". Further, our Act speaks of a benefit “in respect of" an office or employment. In Nowegijick v. The Queen, [1983] 1 S.C.R. 29, C.T.C. 2083 D.T.C. 5041 this Court said, at page 5045, that:

The words "in respect of" are, in my opinion, words of the widest possible scope. They import such meanings as “in relation to", "with reference to" or "in connection with". The phrase "in respect of" is probably the widest of any expression intended to convey some connection between two related subject matters.

See also Paterson v. Chadwick, [1974] 2 All E.R. 772 (U.K.Q.B.) at 775.

I agree with what was said by Evans J.A. in R. v. Poynton, [1972] 3 O.R. 727 at 738, 72 D.T.C. 6329 at 6335-36], speaking of benefits received or enjoyed in respect of, in the course of, or by virtue of an office or employment:

I do not believe the language to be restricted to benefits that are related to the office or employment in the sense that they represent a form or remuneration for services rendered. If it is a material acquisition which confers an economic benefit on the taxpayer and does not constitute an exemption, e.g., loan or gift, then it is within the all- embracing definition of section 3.

Counsel for the appellant argued that the free flights were received by the appellants not as employees but simply as persons and that section 6 therefore does not apply. He stressed the contractual nature of frequent flyer plans, the fact that the only parties to such contracts are airlines and members, and features of such plans which restrict the earning of points to members who themselves travel on a revenue ticket. He noted that the plans are indifferent to the identity of the person who pays for the ticket.

Counsel for the respondent argued that the requisite linkage between benefit and employment is supplied by the fact that HW had paid for the tickets used by the appellants for the flights which generated the points. He argued that in order to fall within the purview of paragraph 6(1 )(a) it is not necessary that the benefit be conferred by the employer; all that is required is a connection between the receipt of the benefit and the employment.

No doubt frequent flyer plans are structured so that the person who pays for a revenue ticket has no claim against the airline for any benefit under the plan arising from use of the ticket. The payer is a stranger to the contract between the member of the plan and the airline. Nevertheless the benefits received by the appellants are caught by section 6. The benefits in issue became available to the appellants because two conditions were met, namely, travel on a revenue ticket and membership in a frequent flyer plan. The first condition was met by the appellants’ travel on business at HW’s expense. It was not met in any other way. Free travel was, for the appellants, nonetheless a benefit from employment because it was available only to employees who travelled and who were members of a frequent flyer plan. Where a benefit is received by reason of employment it is of no consequence that some other condition unconnected with employment must also be met. Free travel was not a benefit received in a personal capacity and wholly divorced from employment.

It is significant that the management committee of HW adopted a hands-off policy with respect to benefits under frequent flyer plans. The decision of the Manitoba Court of Appeal in Adams, M. v. Comark Inc., [1992] 5 W.W.R. 306, 42 C.C.E.L. 15 (Man. C.A.) suggests that by adopting that policy HW made a concession to its employees which became incorporated in their employment contracts. In Comark the issue was whether an employer had cause to dismiss an employee who refused to subscribe to a code of ethics which would have deprived him of the per- sonal use of frequent flyer points earned by him as a consequence of business travel. For some years prior to the formulation of the code the employer’s policy had made such points available to the persons who earned them. The Court held that the policy had become part of the employment contract. At page 311, Philp J.A., speaking for the Court, said:

the policy or decision which gave to Adams the personal use of travel points became a term of his contract of employment. It was a considered policy or decision and it was responsive to a legitimate employer/employee concern. The conduct of the parties over a period of four years is consistent with their acceptance of the policy or decision as an integral part of the benefits included in the contract of employment. Its several descriptions in the evidence as "a perk", "’compensation", "an offset to the non- compensated extra demands", and as a "recognition"; and by the trial judge as "a generous and understandable favour" or a "unilaterally-conferred fringe benefit", do not detract from its essential character, that of a benefit, and a significant one, that was enjoyed by Adams over a considerable period of time. Nor does the fact that it had been conferred unconditionally by the company without negotiation; a benefit is a benefit, even when unilaterally-conferred.

Here, as in Comark, the characterization of the policy as "a benefit and a significant one" is entirely appropriate. The free travel rewards were in my view benefits received or enjoyed in respect of employment within the ordinary meaning of the language of section 6.

The foregoing disposes as well of the question of the timing of the benefits. The benefits in the form of free travel were received or enjoyed when the members of the appellants’ respective families travelled free.

I turn next to the value of the benefits. In the case of Mr. Giffen all reward tickets used were for passage in either business class or first class. Counsel for the respondent argued that the value of a free ticket to Mr. Giffen was the amount that Mr. Giffen would have been required to pay for a revenue ticket in first or business class. Counsel noted that such tickets are not discounted. In the case of Mr. Mommersteeg the value, according to counsel for the respondent, was the discounted economy class fare if available on that flight or, if not, the full economy fare for the flight taken.

Counsel for the respondent submitted further that the reward tickets had a measurable value to HW equal to the cost to HW of tickets which it might have gotten free had the appellants not used points for personal purposes. That argument is devoid of merit. It ignores the fact that in order to reap the benefits HW would first have had to extract from its employees a contractual obligation to join frequent flyer plans, to keep records of points earned qua employee and points earned personally and to redeem points in accordance with HW’s direction. The administrative cost to HW of all of this would have been considerable and that, without doubt, is the reason why the management committee adopted the policy it did. Furthermore there is no evidence to identify the reward tickets which HW might have caused its employees to claim with points recovered by HW or the cost in points of such tickets.

Counsel for the appellant submitted that the value of the benefit is equal to the incremental cost to the airline of filling the reward seat. He referred to the decision of the House of Lords in Pepper (Inspector of Taxes v. Hart, [1992] S.T.C. 591, 1993] 1 All E.R. 42 (U.K. H.L.). It is of no assistance because it turned on the statutory provision which has no equivalent in the Act. The argument that cost to the employer is the proper test must be rejected as well. The decisions of the Exchequer Court in Philp v. M.N.R., [1970] C.T.C. 330, 70 D.T.C. 6237 and Waffle v. M.N.R., [1968] C.T.C. 572, 69 D.T.C. 5007 are not authority for the proposition that cost to the employer is a universally applicable measure of the value of a benefit from employment. Here the benefits were not acquired by ordinary purchase in the open market.

In my view the proper measure of the value of a benefit in the form of a reward ticket is the price which the employee would have been obliged to pay for a revenue ticket entitling him to travel on the same flight in the same class of service and subject to the same restrictions as are applicable to reward tickets. The sale price of a revenue ticket for travel in the same class on the same flight is only the starting point in the calculation. Care must be taken to adjust for the differences in value between revenue tickets and reward tickets attributable to restrictions on the latter. The testimony of William Young, a truthful and knowledgeable witness, makes it clear that:

A. within economy class a wide variety of prices is charged and price varies inversely with the number of restrictions attached to the ticket;

B. the restrictions imposed on reward tickets, though not the same as those imposed on discounted economy tickets are, nevertheless, onerous; and

C. reward tickets are intended to fill and generally do fill seats which cannot be sold.

On that evidence I conclude that an economy class reward ticket is unlikely to be worth more than the most heavily discounted economy ticket sold for the flight in question. Business class and first class revenue tickets are not discounted but, just as in the case of economy tickets, reward tickets for travel in those two classes cannot, because of restrictions, be regarded as equal in value to unrestricted revenue tickets. It seems likely that restrictions to which first class and business class reward tickets are subject reduce the value of them to the same extent that restrictions on economy class reward tickets reduce their value. Thus the value of a reward ticket in either business or first class is equal to that proportion of an unrestricted business or first class fare which the price of the most heavily discounted economy class fare on that flight is of the price of a full fare economy class ticket. [9] It follows that the value attributed by the Minister to the reward tickets issued at Mr. Giffen’s request is excessive. In the case of Mr. Mommersteeg it is clear that the two round trip reward tickets issued cannot be worth more than the $268 price of the discounted economy class round trip revenue ticket used by Mr. Mommersteeg. They may be worth less if less expensive economy class tickets were available for that flight.

The appellants submit that the manner in which Jerry Lauwers, an official employed by the Department of National Revenue, "conducted a seizure of information" from House of Travel with respect to records relating to travel by employees of HW violated sections 231.1 and 231.2 of the Act and section 8 of the Charter. House of Travel was a travel agency used frequently if not exclusively by HW. In October 1991, Mr. Lauwers, a source deduction officer, was conducting a "taxable benefits audit" of seven HW employees, one of whom was Mr. Giffen. The audit was directed to travel expense claims. Mr. Lauwers had seen references to the House of Travel in Mr. Giffen’s travel expense claims. He called House of Travel, asked for the manager and spoke to Virginia McNaughton. He asked to see the travel records of employees of HW "if they were available". Mrs. McNaughton after consulting with Rick Babister, the owner of House of Travel, told Mr. Lauwers that there would be no problem. He then attended at the House of Travel offices where Mrs. McNaughton led him to the area where the records were stored, showed him the boxes of records marked Hiram-Walker and offered him a desk for use in reviewing the records. In this way Mr. Lauwers obtained information relating to the use of frequent flyer points not only in relation to the seven employees with whom he was immediately concerned but also in relation to others including Mr. Mommersteeg.

Counsel for the appellants in argument characterized the actions of Mr. Lauwers as "a demand" by Revenue Canada to review the HW travel records in the possession of House of Travel. That demand, it was said, was governed by section 231.2 of the Act and constituted a fishing expedition unauthorized under subsection 231.2(3). Subsections (1) and (2) of section 231.2 read as follows:

231.2(1) Notwithstanding any other provision of this Act, the Minister may, subject to subsection (2), for any purpose related to the administration or enforcement of this Act, by notice served personally or by registered or certified mail, require that any person provide, within such reasonable time as is stipulated in the notice,

(a) any information or additional information, including a return of income or a supplementary return; or

(b) any document.

231.2(2) The Minister shall not impose on any person (in this section referred to as a "third party") a requirement under subsection (1) to provide information of any document relating to one or more unnamed persons unless he first obtains the authorization of a judge under subsection (3).

Section 231.2 applies only when the Minister makes use of a requirement, that is to say, only where an element of compulsion, communicated by notice in writing, is present. Here there was nothing of the sort. There was a polite oral request followed by voluntary compliance.

It was argued in the alternative that what took place was a "fishing expedition" in violation of section 231.1 of the Act. That provision reads in part:

231.1(1) An authorized person may, at all reasonable times, for any purpose related to the administration or enforcement of this Act,

(a) inspect, audit or examine the books and records of a taxpayer and any document of the taxpayer or of any other person that relates or may relate to the information that is or should be in the books or records of the taxpayer or to any amount payable by him under this Act, and

(b) examine property in an inventory of a taxpayer and any property or process of, or matter relating to, the taxpayer or any other person, an examination of which may assist the authorized person in determining the accuracy of the inventory of the taxpayer or in ascertaining the information that is or should be in the books or records of the taxpayer or any amount payable by him under this Act,

and for those purposes the authorized person may

(c) subject to subsection (2), enter into any premises or place where any business is carried on, any property is kept, anything is done in connection with any business or any books or records are or should be kept; and

(d) 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 and to answer all proper questions relating to the administration or enforcement of this Act and, for that purpose, require the owner or manager to attend at the premises or place with him.

231.1(2) Where any premises or place referred to in paragraph (l)(c) is a dwelling-house, an authorized person may not enter that dwelling-house without the consent of the occupant except under the authority of a warrant under subsection (3).

Counsel for the respondent appeared to concede that Mr. Lauwers acted pursuant to paragraph 231.1(1)(a) in attending at the offices of House of Travel and viewing the records. Assuming that he did, Mr. Mommersteeg’s case is not advanced. Section 231.1 contains no prohibition with respect to unnamed persons similar to that found in subsection 231.2(2). I can think of no reason why restrictions expressly applicable to section 231.2 requirements should be expanded to apply to an examination of books and records under section 231.1. Furthermore I find it difficult to characterize Mr. Lauwers’ visit to the House of Travel as the exercise of a right or power conferred by section 231.1 of the Act on an authorized person. In reality this is simply a case in which a revenue official carried out his duties without resort to any of the extraordinary powers conferred by the Act on such officials. There is a difference between the possession of power and the exercise of it.

Nothing in the circumstances engages section 8 of the Charter. It reads:

8. Everyone has the right to be secure against unreasonable search or seizure.

Section 8 does not apply to a wholly voluntary release of documents by a person who has lawful custody of them.

The appeals will therefore be allowed and the assessments referred back to the Minister for reassessment on the basis that the value of the benefits in issue is to be determined by the formula set out in these reasons. Success was divided. In the circumstances each side will bear its own costs.

Appeals allowed.