Gutsche v. MNR, 91 DTC 5647, [1992] 1 CTC 123 (Alta. Q.B.)

Waite, J.C.Q.B.A.:—This is an application by a taxpayer to quash three search warrants issued on January 22, 1990, pursuant to the provisions of section 231.3 of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72,

c. 63) (the "Act").

The notice of motion asserts these two grounds:

1. Section 231.3 of the Income Tax Act is in violation of Sections 7 and 8 of the Charter of Rights and Freedoms, Constitution Act, 1982, and should bet declared to be of no force and effect.

2. If the section is constitutionally valid, the warrants should be quashed on the ground that the information contained material non-disclosures and material misrepresentations.

Each warrant alleged the same offences, which were described in these terms:

1) That Siegfried A. Gutsche has committed an offence as defined by paragraph 239(1)(d) of the Income Tax Act by wilfully failing to file his T1 returns of income, as and when required by Section 150 of the Income Tax Act for the taxation years 1982, 1983, and 1984, thereby evading compliance with the Income Tax Act or payment of taxes imposed by the Income Tax Act;

2) That Siegfried A. Gutsche has committed an offence as defined by paragraph 239(1)(a) of the Income Tax Act by making false or deceptive statements in his T1 returns of income filed for the 1982, 1983, 1984, 1985, and 1986 taxation years;

3) That Siegfried A. Gutsche has committed an offence as defined by paragraph 239(1)(d) of the Income Tax Act, by wilfully evading or attempting to evade the payment of taxes imposed by the Income Tax Act upon Siegfried A. Gutsche for the taxation years 1982, 1983, 1984, and 1986 by understating his taxable income upon filing his T1 returns of income for the taxation years 1982, 1983, 1984, 1985, and 1986

One warrant described six different categories of documents involving the taxpayer and his wife and authorized a search for those documents at the personal residence of the taxpayer and his wife. In general terms, those categories described various types of personal financial records and accounting material.

A second warrant described three categories of documents comprising every kind and variety of accounting record, financial statement and financial and corporate documents relating to 45 named companies as well as the taxpayer and his wife. The search for and seizure of those documents was authorized at the accounting offices of a firm of chartered accountants in the City of Edmonton.

The third warrant authorized the search for and seizure of 16 categories of documents at the business premises in Calgary of a company described as Sand Exploration Ltd. Again, in general terms, those categories of documents comprised every kind of financial and corporate record of the 45 corporations and the taxpayer and his wife.

Those warrants were issued on the basis of an Information sworn by an officer of the Department of National Revenue, Kevin Douglas Grant Smith, on January 8, 1990. That Information comprises 60 pages, together with 15 pages of exhibits. It is in 122 numbered paragraphs, many of which consist of numerous subparagraphs and sections. Those paragraphs set forth the facts upon which the affiant founded his reasonable and probable grounds to believe that the offences mentioned above had been committed by the taxpayer.

The application for the three warrants in January 1990 was the result of an investigation by the Department of National Revenue that had been conducted over a period of approximately three years. During the course of that investigation departmental officials had inspected something in the range of 3,500 documents, copying many of them. Numerous interviews had been conducted with a variety of individuals employed in one capacity or another by either the taxpayer or one or more of the business enterprises with which he was connected. It is apparent from the scope of the investigation and the information accumulated that there was a substantial degree of co-operation by the applicant through the various personnel employed directly and indirectly by him.

The documents which had been voluntarily made available to the departmental officials from various sources under the control of the taxpayer were voluntarily returned by the Department to the control of the taxpayer in December 1989, less than two months before the three warrants were issued.

On the hearing of the application, the evidence before the Court was contained in the information of Smith, the affidavit of Fry, and six affidavits sworn by various personnel of the respondent which were filed in response to Fry's affidavit.

On the hearing of the application, the argument proceeded on this basis:

A. Section 231.3 violated section 8 of the Charter which provides:

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

No submissions were made on behalf of the applicant with respect to Section 7 of the Charter.

B. The non-disclosure and misrepresentations contained in the Information required the warrants to be set aside. That submission involved, amongst other things, the question of whether the principle of "investigative necessity" applied to warrants issued under the Income Tax Act.

Jurisdiction of the Court

The respondent, the Minister of National Revenue, recognized the jurisdiction of this Court to entertain this application by this language in paragraphs 10-14 of its written brief:

10. The position of the Respondent is that this Court has the jurisdiction to consider both the application for a declaration brought pursuant to section 24(1) of the Charter and also to review its own ex parte order.

11. The question as to the jurisdiction of a superior court to review its own order was recently discussed by the Supreme Court of Canada in the case of Knox Contracting Limited et al v. The Queen, [1990] 2 C.T.C. 262; 90 D.T.C. 6447, Mr. Justice Cory observed at 265, 6448:

There can be no question that the issuing of a search warrant pursuant to s. 231.3 of the Income Tax Act must be considered to be an order of a judge. Since it is an ex parte order, it was properly reviewable pursuant to the inherent jurisdiction of trial judges to review such an ex parte order. See, for example, Wilson v. The Queen, [1983] 2 S.C.R. 594, 4 D.L.R. (4th) 577.

12. This decision affirms a number of earlier decisions which describe the power in a court to review its own order in restricted and defined circumstances. Such circumstances have been defined to include fraud or material non-disclosure or material misrepresentation of facts. Wilson v. The Queen, [1983] 2 S.C.R. 594, 4 D.L.R. (4th) 577, R. v. Garofoli, (1988) 41 C.C.C. (3d) 97 (Ont. C.A.)

13. The present application raises issues including material non-disclosure or misrepresentation of fact. The Respondent accordingly takes no issue with the jurisdiction of the Court to review its order issuing the warrants in this case.

14. The Respondent further accepts the application of subsection 231.3(7) of the Act to this application, which provides further basis for the proposed review. In re The Income Tax Act, [1986] 2 C.T.C. 38 (F.C.T.D.)

Constitutionality of section 231.3 of the Income Tax Act

The constitutional validity of section 231.3 has been upheld in several cases, including:

Solvent Petroleum v. The Queen, [1989] 89 2 C.T.C. 177, 89 D.T.C. 5381 (F.C.A.);

Hellenic Import Export Co. v. M.N.R., [1990] 1 C.T.C. 241, 72 C.R. (3d) 196

(B.C.C.A.);

Baron v. The Queen, [1990] 1 C.T.C. 84, 90 D.T.C. 6040 (F.C.T.D.).

The Baron case was appealed. The Federal Court of Appeal reversed the judgment of the trial division and declared the section to be of no force or effect: Baron v. Canada, [1991] 1 C.T.C. 125, 91 D.T.C. 5056.

The opposing views as to the constitutionality of section 231.3 are accurately reflected in the decision of the British Columbia Court of Appeal in the Hellenic case, favouring the constitutionality, and the Federal Court of Appeal in the Baron case, denying the constitutional validity of the section. The principal divergence between those two courts centred on whether or not a judge had a discretion under the section as to whether a warrant issued if the requirements of 231.3(3)(a), (b) and (c) were met. That subsection reads as follows:

231.3. . . .

(3) A judge shall issue the warrant referred to in subsection (1) where he is satisfied that there are reasonable grounds to believe that

(a) an offence under this Act has been committed;

(b) a document or thing that may afford evidence of the commission of the offence is likely to be found; and

(c) the building, receptacle or place specified in the application is likely to contain such a document or thing.

The key word is“ shall”. The Court in the Hellenic case, in what is really obiter dicta, construed subsection 231.3(3) as leaving to the issuing judge a discretion as to whether a warrant issues. That discretion involved a consideration of whether the evidence before him met the standards contained in paragraphs (a), (b) and (c) of subsection 231.3(3). But once he was satisfied that those conditions were met by the evidence, it was mandatory that a warrant issue. Locke, J.A. stated the matter in these terms, at page 261 (C.R. 226-27):

I am of the opinion these three subsections must be read together. The crucial function of the judge is to decide whether the facts before him are sufficient to warrant an intrusion of privacy. This is discretionary in the judge. In order to exercise his discretion, the guidelines are set out in subs. (3). If the evidence fails the standards of subs. (3), he will not be satisfied and will decline to issue the warrant. If the evidence is sufficient, the statute says he "shall" issue the warrant.

It is said that this deprives the judge of a discretion. It does not deprive him of the discretion as to whether the warrant should issue at all, and as to which he fulfils his balance wheel function. It does deprive him of a discretion as to whether the warrant in fact issues after he makes the primary essential decision.

One might ask rhetorically, and why not? Having made the primary decision, surely the figurative stamping of the piece of paper is unimportant. What the mandatory word does is to deprive the judge of the discretion argued for in Paroian—that it was unnecessary to issue the process because the minister already had enough material. This is not for the court to say, but I do not feel that the standards of Hunter v. Southam have been defeated. The judge’s crucial role has been fulfilled and nothing remains except to stamp the piece of paper. It is thus true that discretion has been impaired in an administrative aspect, but not at all to impair the judge's primary function. It is also plain he can always attach conditions to the manner of execution of the warrant, and this of his own motion under the doctrine of inherent jurisdiction.

I do not believe the independence of the judge is threatened; it is only he who has the power to decide whether the process will issue, and he has the opportunity of doing that. What follows is surplusage.

It is therefore my opinion that s. 231.3 does not impair the court's discretion to fulfil its duties in its crucial role of acting as the independent arbiter between State and individual.

That analytical approach was rejected by Hugessen, J.A. for the Federal Court of Appeal in Baron. As to the assertion that an issuing judge could attach conditions "to the manner of execution of the warrant” on his own motion, Hugessen, J.A. stated, at page 132 (D.T.C. 5061):

. . . I can only repeat what I have already said: I do not see how a judge acting under an imperative statutory provision can invoke an inherent jurisdiction to refuse to do precisely that which the legislation has declared to be reasonable and has commanded him to do. The attachment of conditions as to either the issuance or the execution of the warrant is not authorized by the text.

As to the assertion in Hellenic that an issuing judge had discretion as to the determination of the three conditions in 231.3(3)(a),(b) and (c), Hugessen, J.A. stated at page 132 (D.T.C. 5061):

. .. I do not think it proper to characterize the formation of an opinion as to the existence of reasonable grounds for belief in certain facts as being in any way the exercise of a discretion. It is of course part of a judicial decision-making function as to which, in any given case, there may be differences of view, but that surely does not make it a matter of discretion any more than, say, a finding of negligence is a matter of discretion.

The difference in the approach between the British Columbia Court of Appeal and the Federal Court of Appeal was not on the question as to whether the existence of a judicial discretion was a fundamental condition to the existence of a valid power to issue a search warrant but, rather, what the fundamental characterization of a discretion was.

The Court in Baron stated the ultimate issue before it in these terms (page 133; D.T.C. 5061):

The question now is to know whether a requirement of judicial discretion is nonetheless implicit in the standards of reasonability set out in Southam or, even if it is not, whether it forms part of the principles of fundamental justice protected by section 7. In my view, it is both.

The judgment continued on page 133 (D.T.C. 5061) in these terms:

Finally and most importantly, the Court in Southam laid great emphasis on the requirement that the officer authorizing the seizure be independent and capable of acting judicially in balancing the competing interests of the state and the citizen. That requirement, as it seems to me, given the context in which Southam was decided, necessarily implies an ability and a need to exercise a judicial discretion in the authorization process.

Accordingly, I conclude that a requirement for a residual judicial discretion to refuse to issue a search warrant, or to attach conditions to a warrant when issued, is implicit in the decision in Southam as a prerequisite to a reasonable search and seizure in accordance with section 8 of the Charter.

Then, referring extensively to the judgment of Lamer, J. in Descoteaux v. Mierzwinski, [1982] 1 S.C.R. 860, Hugessen, J.A. stated at page 135 (5063 D.T.C.):

I derive from this passage the proposition not only that the attaching of conditions to a search warrant is a necessary and essential part of the exercise of judicial discretion but, even more importantly, that the very existence of such discretion is a prerequisite to the reasonableness of the search and to our notions of fundamental justice.

After noting the impossibility of exhaustively defining the limits of a reasonable search and the impossibility of “legislating closed categories of unreasonableness" the Court concluded, at page 135 (D.T.C. 5063):

Parliament, in my opinion, is both legally and factually incapable of exhaustively defining unreasonable searches. The ultimate protection for the citizen against such searches lies in the vigilance of the issuing judge and in his power to refuse to issue the warrant even where all the conditions established by Parliament have been met. For Parliament to say and to mean that the judge “shall” issue the warrant no matter what the circumstances is to sanction unreasonable searches and seizures and is contrary to our long-established principles of fundamental justice. Section 231.3 is accordingly of no force or effect.

At page 139 (D.T.C. 5066) the Court declared:

For all the foregoing reasons, I would allow the appeals, set aside the judgments of the Trial Division and substitute for them judgments quashing the search warrants and ordering the return of everything seized in virtue thereof; I would also give a declaration that section 231.3 of the Income Tax Act is of no force or effect because it is inconsistent with sections 7 and 8 of the Charter.

With the greatest deference to the British Columbia Court of Appeal in Hellenic, I prefer the reasoning and conclusions of the Federal Court of Appeal in Baron. Moreover, the application of section 8 alone of the Charter is sufficient in itself to deny constitutional validity to section 231.3; reliance on section 7 of the Charter is not required.

Assumption of Constitutional Validity

However, assuming that section 231.3 of the Income Tax Act is constitutionally valid, it becomes necessary to consider the grounds upon which the applicant attacks the warrants. The applicant seeks to quash the three warrants on the ground that the Information of Smith in support of the issue of the warrants was defective because it suffered from material non-disclosure and material misrepresentation. As part of that attack on the warrants, the applicant seeks to rely on the notion or principle of "investigative necessity".

The three warrants are facially valid.

Both sides are agreed that a facially valid warrant can be set aside if the warrant fails to meet the standards enunciated in Land v. Gates. As the respondent acknowledged in paragraphs 39-42 on pages 19-20 of its written brief:

39. The Respondent agrees with the position of the Applicant that the situation here is somewhat analogous to the challenge to facially valid wiretap authorizations. However, as there are some significant statutory differences between warrants and wiretaps, these cases must be used carefully.

40. The leading case in the area is the decision of Justice Watt in R. v. Land and Gates, in which he held that matters which, if adequately established, may serve to vitiate an authorization regular on its face include:

a) fraud or reckless disregard for the truth,

b) material non-disclosure,

c) misleading disclosure, and

d) new or further evidence which shows that the actual facts are different from the facts put before the authorizing Judge.

R. v. Land and Gates, unreported, April, 1990.

41. Mr. Justice Watt also suggested that the analysis of a Motion to set aside an Order would be:

a) has the Applicant adduced any evidence of any of the four factors listed above,

b) if so, was the fraud, non-disclosure, misleading disclosure or the new evidence in relation to a matter or matters material to the granting of the Order,

and

c) if they were material, has the Applicant established that it is more probable that the Order was obtained by any of those four factors?

R. v. Land and Gates, supra, at pp. 54-57

42. If the Applicant can on the balance of probabilities demonstrate the above, then the Order should be set aside. If the Applicant does not meet this onus, the Order remains valid.

R. v. Land and Gates, supra at p. 57

I agree that these tests apply to this case.

The evidence relating to the allegations of material non-disclosure and material misrepresentation are contained in the original Information of Mr. Smith, in an affidavit of 27 pages by Gary Fry, a chartered accountant retained by the applicant in 1986 to handle the personal tax matters of the applicant, and affidavits from six members of the Department of National Revenue that were filed in reply to various portions of the affidavit of Mr. Fry.

As to the evidence presented by the applicant, these comments are appropriate:

1. There was no evidence from the applicant himself. The only affidavit is that of Mr. Fry.

2. The weight of Mr. Fry's evidence is materially reduced by the extent to which it rests on hearsay foundations. Hearsay is the basis, in whole or in part, of the facts set forth in paragraphs 4.2 (a), (e), (g), (h), (i), (k), (I), (m), (n); 5 (b), (c), (d). There is no indication that the sources of the hearsay assertions were not available to provide their own affidavits.

3. Substantial portions of Fry's affidavit are in the form of an argumentative response to the contents of Smith's Information. That is evident from the introductory sentence to many of the paragraphs and to the concluding sentence in most of them. Again, the weight of the factual assertions is diminished accordingly.

4. Many of the factual assertions in Fry's affidavit are simply contradictions to the factual assertions in Smith’s Information. In other areas, the factual assertions in Fry's affidavit are contradicted by the counter-affidavits filed on behalf of the respondent. As to contradictions, paragraph 4.2 in the affidavit of Fry commences as follows:

4.2 Explanations were provided or information was available to the Tax Department which explain or contradict statements made by Mr. Smith in his Information. In particular, I note the following.

Particulars of such explanations and contradictions are then set forth in 17 separate sections, lettered "a" to "q" and comprising ten pages. Further contradictions occur between Fry’s affidavit and the six affidavits filed by the Minister in response to Fry's affidavit. Moreover, most of the paragraphs in paragraph 4.2 of Fry's affidavit end with a highlighted sentence such as "Mr. Smith fails to note any of these facts in his Information" or "Mr. Smith fails to note this explanation in his Information” or other sentences of similar import.

The matters cited either reduce the weight that might otherwise be given to Fry's affidavit or provide the context in which it is neither feasible nor safe to draw positive inferences referable to those facts in issue. That is not the fault of either Fry or his draftsman. The difficulty arises from the vast and complex information gathered by the respondent during its preliminary investigation and the problem faced by Smith in selecting from that volume of information those facts which led to his affirmation that there were reasonable and probable grounds to believe that the named offences had been committed and that the documents sought were likely to be found at the premises named and afford evidence of the commission of those offences. Some selectivity was required on the part of Smith and his draftsman. To report exhaustively all of the information marshalled by the investigation would have resulted in an Information that would have exhausted the ability of anyone to read and understand. No analysis related to the validity of a facially valid warrant can be immune from a consideration of the practicalities of drawing an information on the basis of which the issue of a warrant is sought. The investigation of the matters before the Court had been ongoing for a period of three years more or less. Numerous investigatory staff of the Respondent had been involved during that time period. Several members of the staff of the applicant or his related companies had also been involved, some substantially so. Numerous meetings had been held between the representatives of the parties. Over 3,500 copies of documents had been examined by the agents of the respondent. Many of those documents were complex and detailed financial statements. In marshalling the facts for an Information, these words of McKenzie, J. in Re Kourtessis and M.N.R. (1988) 36 C.C.C. (3d) 304 (the trial level) are germane (at 320):

The problem here, as I see it, is a compositional one. The composer of an information must possess a grasp of the facts to be related and the narrative ability to set them out in an orderly and comprehensive way. No two people would perform the task in the same way. It is unlikely that any rendering would escape all criticism. However it was told, the story would be long and complex.

It should not be surprising that some sand may fall between the cracks.

I have carefully studied all of the affidavits and the arguments advanced with respect to them by counsel on the issues of non-disclosure and misrepresentation. I am not persuaded that there has been non-disclosure or misrepresentation that is material in the sense that disclosure or accurate statement at the time the warrants were sought would have precluded their issue.

Investigative necessity

Investigative necessity" is defined in the judgment of Nemetz, C.J., at 495, of the judgment in Pacific Press Ltd. v. The Queen, (1977) C.C.C. (2d) 487; 5 W.W.R. 807, in these words:

The issuing of any search warrant is a serious matter, especially when its issuance against a newspaper may have, as it did, the effect of impeding its publication. To use the words of my distinguished predecessor in United Distillers Ltd. (1948), 88 C.C.C. 338, [1947] 3 D.L.R. 900, the Justice of the Peace "should have reasonable information before him to entitle him to judicially decide whether such warrant should issue or not". In my opinion, no such reasonable information was before him since there was no material to show:

1. whether a reasonable alternative source of obtaining the information was or was not available, and

2. if available, that reasonable steps had been taken to obtain it from that alternative source.

The Pacific Press case was decided before the advent of the Charter. The warrants were quashed on the ground that failure by the Crown to disclose those facts relevant to the question of investigative necessity constituted an abuse of the process of the Court.

The Pacific Press case was considered by the Supreme Court of Canada in Descôteaux. v. Mierzwinski and Attorney General, Quebec, [1982] 1 S.C.R. 860; (1982) 70 C.C.C. (2d) 385. This was another pre-Charter case. After quoting the above passage from Pacific Press, Lamer, J., speaking for the Court, proceeded as follows:

Re Pacific Press Ltd. involved a search for things provided for in para. (b) of s. 443(1), that is, evidence; it goes without saying that the same requirements do not apply in the case of things provided for in paras, (a) and (c) of s. 443(1).

It could be advanced that the two conditions set out by Nemetz C.J. should be met before a warrant is issued whenever a search is sought to be conducted, under s. 443(1)(b), of premises occupied by an innocent third party which are not alleged by the information to be connected in any way with the crime. It is not necessary for purposes of this appeal to decide that point. It is sufficient to say that in situations such as the one in Re Pacific Press Ltd., where the search would interfere with rights as fundamental as freedom of the press, and, as in the case at bar, a lawyer's client's right to confidentiality, the justice of the peace may and should refuse to issue the warrant if these two conditions have not been met, lest he exceed the jurisdiction he had ab initio. I would add one qualification to these two conditions. The reasonable alternative referred to is not an alternative to the method of proof but to the benefits of search and seizure of the evidence. As I have already stated, a search warrant is not only a means of gathering evidence but also an investigative tool. Therefore, a determination of what is reasonable in each case will take into account the fact that a search makes it possible not only to seize evidence but also to ascertain that it exists, and even sometimes that the crime was in fact committed and by whom. Seizure makes it possible to preserve the evidence.

I take that case as leaving as an open issue the nature of the principle of investigative necessity and the extent of its application.

The position of the applicant is that the question of investigative necessity goes to the issue of materiality in this sense: if the facts on the question of investigative necessity indicated that there was a reasonable means by which the evidence sought to be obtained could have been gathered without a warrant, a warrant would not have issued. More specifically, in this case, the applicants position is that if there had been disclosure of the documents that had been in the respondents possession and which had been returned to the applicant within two months of the warrant being sought, and if there had been a frank and direct statement that the applicant had co-operated with the respondent during the preceding three-year investigation, the warrants in this case would not have issued. Therefore, it is said that the non-disclosure was a material one and the warrants should be quashed accordingly.

Assuming that there is a principle of investigative necessity that could be invoked in this case, a consideration of the effect of that principle cannot be divorced from such special statutory provisions as may be applicable. For instance, in the law of privacy, the principle of investigative necessity has a statutory definition in Part VI of the Criminal Code. Paragraph 186(1 )(b) reads as follows:

186.(1) An authorization may be given if the judge to whom the application is made is satisfied

(b) that other investigative procedures have been tried and have failed, other investigative procedures are unlikely to succeed or the urgency of the matter is such that it would be impractical to carry out the investigation of the offence using only other investigative procedures.

There is no comparable provision in the Income Tax Act. Subsection 231.3(3) of the Income Tax Act reads as follows:

231.3. . . .

(3) A judge shall issue the warrant referred to in subsection (1) where he is satisfied that there are reasonable grounds to believe that

(a) an offence under this Act has been committed;

(b) a document or thing that may afford evidence of the commission of the offence is likely to be found; and

(c) the building, receptacle or place specified in the application is likely to contain such a document or thing.

That section does not allow any latitude to an issuing judge to consider the investigative necessity of a search warrant. As the Federal Court of Appeal stated in Solvent Petroleum Extraction Inc, v. The Queen, supra, at page 179 (D.T.C. 5381-82):

Subsection 231.3(1) states that "A judge may . . .” Subsection 231.3(3) states that "A judge shall. . .” It would therefore appear from the language of subsection 231.3(3) that if the issuing judge comes to the conclusion that the conditions of paragraphs 231.3(3)(a),(b) and (c) are met, he need not nor is he permitted to consider whether there has been a previous substantive voluntary compliance by the taxpayer, whether further documents might be remitted voluntarily, or whether the applicant for the warrants has taken all reasonable steps to obtain the information from an alternative source before applying for the warrants. In brief, if the conditions are met, he must issue the warrant.

While Solvent Petroleum was effectively reversed by Baron as to the infringement of section 8 of the Charter by section 231.3, the analytical validity of the passage quoted is not affected by that reversal.

The Supreme Court decision in Multiform Manufacturing Co. Ltd. v. The Queen, [1990] 2 S.C.R. 624, does not assist the appellant. In that case, a warrant was obtained under the provisions of section 443 (now 487) of the Criminal Code in connection with an investigation under the Bankruptcy Act. The appellants took the position that since the Bankruptcy Act contained search and seizure provisions in section 6, the provisions of section 443 of the Criminal Code were inapplicable and the warrant that was issued under that section ought to be quashed.

The Supreme Court recognized that section 443 applied to all cases involving breaches of federal statutes. However, the effect is not to make the provisions of section 443 and the case law under it applicable in every case to violations of federal statutes automatically and with priority over any provisions of other federal statutes. What it does do is to provide the appropriate federal authority with the option to proceed either under the special provisions of the statute in question as they relate to search and seizure or, alternatively, to invoke the search and seizure provisions of section 487 of the Criminal Code. If the federal authority elects to invoke the special seizure provisions of the statute in question, as opposed to what is now section 487 of the Criminal Code, the issuing authority is governed by the provisions of that federal statute, and the case law relating thereto, and not by either the provisions of section 487 of the Code or the case law under that section.

History of this Application

Judgment was reserved on the applicants motion on November 14, 1990. The appellate reasons for judgment in the Baron case were published on November 28, 1990. On December 11, 1990, following a discussion between counsel and a consideration of the fact that leave to appeal that decision would be sought from the Supreme Court of Canada, the parties agreed that reasons for judgment on this motion could be held in abeyance. This past summer counsel reported that, as the prosecution of the applicant in this case had commenced, reasons for judgment were required notwithstanding the fact that the appeal in Baron was pending before the Supreme Court of Canada.

Judgment

The application is granted. The three warrants are quashed. The materials that were seized pursuant to those warrants shall be returned forthwith to the person from whom they were seized together with all copies made of those materials.

Counsel may speak to the question of costs.

Application granted.