Southey
J,
[Orally]:—This
is
an
application
by
Mutual
Life
under
section
232
of
the
Income
Tax
Act
for
orders
respecting
a
number
of
documents
seized
and
placed
in
the
custody
of
the
Deputy
Sheriff
of
the
judicial
district
of
Waterloo
in
accordance
with
that
section
of
the
Income
Tax
Act.
In
addition,
the
application
relates
to
one
further
document
which
was
described
as
a
letter
from
Lang,
Michener,
Cranston,
Farquharson
&
Wright
to
Mr
R
Thorlacious
of
the
Mutual
Life
Assurance
Company
as
to
which
Mutual
Life
also
claims
privilege
and
which
the
parties
have
requested
me
to
consider
and
rule
on.
The
applicant
and
the
Attorney
General
of
Canada
submitted
an
agreed
statement
of
facts,
and
the
schedule
to
that
agreement
lists
39
documents.
Numbers
I
to
38
are
documents
originally
contained
in
a
file
entitled
“Shipp
Centre
at
Bloor
and
Islington
(mortgage
between
Shipp
Corporation
and
Mutual
Life)”
and
the
final
document
is
one
from
another
file.
The
main
argument
on
the
motion
related
to
documents
24
and
32
in
the
schedule
to
the
agreed
statement
of
facts.
Document
24
is
a
photocopy
of
a
letter
from
Lang,
Michener
to
Mutual
Life
marked
to
the
attention
of
J
Stanley
Steele,
who
was
Assistant
General
Counsel
of
Mutual
Life,
enclosing
a
statement
of
account
of
Lang,
Michener
consisting
of
3
and
l/3
foolscap
length
pages.
The
first
page
bears
the
account
letterhead
of
Lang,
Michener.
The
document
ends
with
the
phrase
so
familiar
to
lawyers
—
“This
is
our
account.
Toronto
August
7,
1979.”,
followed
by
the
firm
name
and
the
signature
of
a
partner
at
Lang,
Michener.
The
statement
of
account
contains
no
legal
advice
itself,
but
refers
to
professional
services
rendered
by
a
number
of
lawyers
associated
with
Lang,
Michener
in
advising
Mutual
Life
about
the
project
in
question,
namely,
the
Shipp
Centre
at
Bloor
and
Islington
in
Toronto.
The
services
referred
to
include
those
of
articling
students
and
title
searchers
in
connection
with
searching
the
title
to
the
property,
consideration
given
by
lawyers
to
the
zoning
by-laws,
a
site
control
agreement,
a
site
plan
agreement
and
a
lease,
consideration
given
to
income
tax
aspects,
and
work
done
in
negotiating
the
transaction
and
settling
the
documents
with
the
solicitors
for
other
interested
parties.
The
account
includes
a
statement
of
the
number
of
hours
worked
on
this
matter
by
a
number
of
different
lawyers
at
Lang,
Michener
and
the
hours
charged
to
the
matter
by
articling
students,
title
searchers
and
corporate
clerks.
Finally,
the
statement
contains
an
itemized
list
of
the
disbursements
made
by
the
law
firm.
The
question
before
me
is
whether
this
document
is
one
to
which
the
solicitorclient
privilege
attaches
under
paragraph
232(1
)(e)
of
the
Income
Tax
Act.
That
subsection
defines
solicitor-client
privilege
as
follows:
(e)
“solicitor-client
privilege’’
means
the
right,
if
any,
that
a
person
has
in
a
superior
court
in
the
province
where
the
matter
arises
to
refuse
to
disclose
an
oral
or
documentary
communication
on
the
ground
that
the
communication
is
one
passing
between
him
and
his
lawyer
in
professional
confidence,
except
that
for
the
purposes
of
this
section
an
accounting
record
of
a
lawyer,
including
any
supporting
voucher
or
cheque,
shall
be
deemed
not
to
be
such
a
communication.
Were
it
not
for
the
concluding
exception
in
the
definition,
I
would
have
no
difficulty
in
deciding
that
a
statement
of
account
like
document
24
is
ordinarily
a
document
to
which
the
solicitor-client
privilege
attaches.
In
a
recently
decided
case
Re
Ontario
Securities
Commission
and
Greymac
Credit
Corporation,
[1983]
41
OR
(2d)
328,
I
had
occasion
to
state
the
general
scope
of
the
solicitor-client
privilege
and
used
that
adopted
from
Wigmore
on
Evidence
by
the
Supreme
Court
of
Canada
in
a
recent
case:
Where
legal
advice
of
any
kind
is
sought
from
a
professional
legal
advisor
in
his
capacity
as
such
the
communications
relating
to
that
purpose
made
in
confidence
by
the
client
are
at
his
instance
permanently
protected
from
disclosure
by
himself
or
by
the
legal
advisor
except
the
protection
be
waived.
The
privilege
attaches
not
only
to
communications
made
by
the
client
but
obviously
to
communications
made
by
the
solicitor
to
the
client
as
well
and
generally
speaking
covers
all
communications
relating
to
the
obtaining
of
legal
advice.
That
general
rule
in
my
view
would
cover
a
statement
of
account.
The
interesting
question
raised
by
Mr
Templeton
on
behalf
of
the
Attorney
General
of
Canada
is
whether
a
statement
of
account
constitutes
“an
accounting
record
of
a
lawyer,
including
any
supporting
voucher
or
cheque”.
In
my
view,
this
statement
of
account
which
was
seized
in
the
files
of
the
client
cannot
be
described
as
an
accounting
record
of
a
lawyer
(the
lawyer
in
this
case
being
Lang,
Michener)
nor
is
it
a
supporting
voucher
or
cheque.
This
document
could
be
regarded
as
a
supporting
voucher
for
the
accounting
records
of
Mutual
Life,
but
I
do
not
think
that
documents
sent
out
by
the
lawyers
which
would
not
ordinarily
be
returned
to
them
can
be
regarded
as
part
of
the
accounting
records
of
the
lawyer.
Those
records,
in
my
view,
would
ordinarily
be
the
ledgers
of
the
law
firm
and
its
other
books
of
accounts
together
with
the
documents
preserved
in
the
files
of
the
lawyer
which
support
those
entries.
In
my
judgment,
document
24
does
not
fall
within
the
exception
contained
in
the
definition
and
I
rule
that
it
is
subject
to
the
solicitor-client
privilege
and
should
be
returned
to
Mutual
Life.
The
next
document
is
document
number
32.
It
is
a
copy
of
a
memorandum
prepared
by
a
solicitor
at
McMillan,
Binch,
the
solicitors
for
another
party
interested
in
the
Shipp
Centre
project,
and
addressed
to
an
officer
or
representative
of
that
other
client,
a
Mr
Stuart
Smith.
It
will
be
seen
that
McMillan,
Binch
and
the
lawyer
with
that
firm
who
prepared
the
document
were
not
solicitors
for
Mutual
Life
and
the
memorandum
in
question
was
prepared
for
and
initially
sent
to
McMillan,
Binch’s
client
which
was
not
Mutual
Life.
The
memorandum,
it
appears
from
the
evidence,
was
copied
by
the
person
receiving
it
from
the
author
and
the
copy
was
sent
to
Mutual
Life
(it
is
believed
to
Mr
Derksen).
The
document
was
then
seized
from
a
file
in
the
legal
department
and
has
written
on
it
several
notes
believed
to
be
in
the
handwriting
of
Mr
Derksen
commenting
in
the
margin
on
the
advice
given
by
the
author
of
the
memorandum.
Mr
Steele,
the
solicitor
at
Mutual
Life,
who
was
primarily
concerned
with
this
matter
could
not
specifically
remember
whether
this
memorandum
had
been
sent
to
him
for
his
legal
advice,
but
he
assumed
from
the
fact
that
it
was
in
his
file
that
it
had
in
fact
been
sent
to
him
by
someone
at
Mutual
Life
for
that
purpose.
The
document
is
said
to
outline
the
tax
considerations
discussed
by
the
author
with
the
person
to
whom
it
is
addressed
regarding
the
development
of
the
project
and
contains
a
great
deal
of
advice
respecting
the
tax
aspects
of
the
project.
The
nature
of
the
document
is
such
that
I
have
no
hesitation
in
concluding
that
Mr
Steele’s
assumption
as
to
the
reason
why
the
document
was
sent
to
him
must,
almost
certainly,
be
correct.
It
seems
highly
likely
that
the
reason
why
a
senior
employee
of
Mutual
Life
would
send
this
memorandum
to
Mr
Steele
in
the
legal
department
would
be
to
obtain
his
advice
on
it.
The
handwritten
comments,
if
written
by
Mr
Derksen
as
is
believed
to
be
the
case,
are
part
of
what
the
legal
department
was
asked
to
give
its
advice
about
and
the
privilege
extends
to
them
as
well
as
to
the
memorandum
itself.
I
therefore
order
that
it
too
be
returned
to
Mutual
Life.
There
were
two
other
documents
that
were
dealt
with
separately,
items
34
and
37,
and
Mr
Templeton
on
behalf
of
the
Attorney
General,
requested
me
to
examine
the
documents
and
see
whether
the
description
contained
in
the
schedule
to
the
agreed
statement
of
fact
was
an
accurate
one.
Item
34
is
described
as
“Photocopy
of
memorandum
from
Claude
Gingras,
General
Counsel
to
M
R
Reynolds,
Investment
Executive,
both
of
the
Mutual
Life
Assurance
Company
of
Canada,
dated
May
15,
1978”.
It
is
a
short
one-page
document
entitled
“Re
Bloor-Islington
Project”
and
contains
recommendations
by
Mr
Gingras
as
to
leasing
arrangements
and
ownership
of
the
project
that
would
be
most
favourable
to
Mutual
Life
from
a
tax
standpoint.
It
clearly
is
a
memorandum
containing
legal
advice
and
is
one
that
the
solicitor-client
privilege
clearly
attaches
to
and
I
order
that
it
be
returned
to
Mutual
Life.
Document
number
37
is
described
as
“Handwritten
file
memorandum
by
Paula
Fecteau,
Assistant
General
Counsel
of
The
Mutual
Life
Assurance
Company
of
Canada,
dated
July
29,
1980”.
The
document
is
very
short
and
relates
to
the
whereabouts
of
documents
involved
in
the
project
and
the
responsibility
of
participants
to
provide
a
copy
of
one
of
those
to
Mr
Farquharson
of
Lang,
Michener
for
his
comments.
The
document
does
not
contain
any
legal
advice
itself,
but
clearly
relates
to
the
giving
of
legal
advice
by
the
firm
of
outside
solicitors,
Lang,
Michener
retained
by
Mutual
Life
in
this
matter.
In
my
view,
it
too
is
subject
to
the
solicitor-client
privilege
and
ought
to
be
returned
to
Mutual
Life.
The
additional
document
not
included
in
the
schedule
to
the
agreed
statement
of
facts
is
a
letter
from
Lang,
Michener
to
Mr
Thorlacious
of
Mutual
Life
dated
February
12,
1980
enclosing
a
document
headed
“Professional
Communication
.
.
.”
and
which
is
described
in
the
letter
as
being
the
professional
communication
of
Lang,
Michener
and
a
firm
of
chartered
accountants.
The
memorandum
relates
to
the
venture
with
Shipp
Corporation
Limited
and
contains
advice
as
to
the
effect
of
various
arrangements
with
respect
to
the
project
on
the
tax
liability
of
the
participants.
The
memorandum
appears
to
me
to
be
full
of
legal
advice
respecting
the
tax
liability
of
participants
in
the
project.
It
is
common
knowledge
that
chartered
accountants
and
lawyers
frequently
must
work
together
in
advising
clients
as
to
the
effect
on
particular
projects
of
the
extremely
complex
provisions
of
our
Income
Tax
Act.
It
is
impossible
for
me
to
tell
in
reading
the
memorandum
what
portion
of
it
is
attributable
to
the
chartered
accountants
and
what
portion
is
attributable
to
the
solicitors.
I
am
satisfied,
however,
that
the
solicitors
by
sending
the
memorandum
with
the
covering
letter
have
accepted
responsibility
for
the
very
considerable
amount
of
legal
advice
contained
in
it.
For
that
reason,
and
because
it
appears
from
a
quick
reading
that
all
the
advice
could
be
described
as
legal
in
that
it
involves
advice
as
to
the
impact
of
the
income
tax
laws,
I
think
that
Lang,
Michener
is
responsible
for
the
entire
document
even
though
it
acknowledges
the
input
of
a
firm
of
chartered
accountants.
It
appears
to
me
to
be
clearly
a
communication
that
is
protected
by
the
solicitor-client
privilege
referred
to
in
section
232.
As
to
the
remaining
documents
referred
to
in
the
schedule,
a
number
of
them
had
been
the
subject
of
agreement
between
counsel
before
the
matter
came
on
this
morning
and
the
agreement
was
that
those
documents
were
privileged.
As
to
the
ones
not
covered
by
the
agreement
of
counsel,
counsel
for
the
Deputy
Attorney
General
asked
me
to
verify
by
my
inspection
of
the
documents
the
accuracy
of
the
descriptions
of
them
contained
in
the
schedule
to
the
agreed
statement
of
fact.
Apart
from
certain
minor
errors
in
the
description
of
number
18
and
number
36
which
were
the
subject
of
discussion
in
court
and
were
found
to
be
not
of
any
material
significance,
the
documents
are
accurately
described
in
the
schedule
to
the
agreed
statement
of
fact
and
I
go
on
to
say
that
they
clearly
contain
legal
advice
or
refer
to
the
giving
of
legal
advice
in
connection
with
this
project.
Mr
Templeton
stated
that
if
the
descriptions
were
accurate
then
the
Deputy
Attorney
General
did
not
dispute
that
the
documents
should
be
returned
to
Mutual
Life.
In
the
result,
therefore,
all
the
documents
that
were
handed
to
me
by
the
Deputy
Sheriff
of
the
Judicial
District
of
Waterloo
should
be
returned
to
Mutual
Life.
Mr
Waterman
has
pointed
out
that
under
the
provisions
of
section
232
of
the
Income
Tax
Act,
the
procedure
to
be
followed
is
for
the
custodian,
that
is
the
Deputy
Sheriff
to
deliver
the
documents
to
the
lawyer,
who,
in
this
case,
is
Paula
Fecteau,
and
accordingly
I
shall
return
the
envelope
with
the
documents
to
the
Deputy
Sheriff
so
that
she
may
seal
them
and
to
return
them
to
Paula
Fecteau.
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