Trainor,
J.:—This
stated
case
is
a
test
of
the
constitutional
validity
of
subsection
231(3)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
1970-71-72,
c.
63),
as
amended,
when
read
in
the
light
of
section
8
of
the
Canadian
Charter
of
Rights
and
Freedoms.
S.
231(3)
The
Minister
may,
for
any
purposes
related
to
the
administration
or
enforcement
of
this
Act,
by
registered
letter
or
by
a
demand
served
personally,
require
from
any
person,
(a)
any
information
or
additional
information,
including
a
return
of
income
or
supplementary
return,
or
(b)
production,
or
production
on
oath,
of
any
books,
letters,
accounts,
invoices,
statements
(financial
or
otherwise)
or
other
documents,
within
such
reasonable
time
as
may
be
stipulated
therein.
S.
8
Everyone
has
the
right
to
be
secure
against
unreasonable
search
or
seizure.
On
August
9,
1984
informations
were
laid
by
the
Royal
Canadian
Mounted
Police
alleging
that
the
respondents
did
:
at
the
City
of
Windsor
in
the
County
of
Essex,
or
elsewhere
in
the
Province
of
Ontario,
between
the
19th
day
of
October,
1983,
and
the
19th
day
of
January,
1984,
fail
to
provide
to
the
Minister
of
National
Revenue,
pursuant
to
a
"requirement
for
information
and
production
of
documents"
dated
the
6th
day
of
October,
1983
and
served
on
the
19th
day
of
October,
1983,
the
following
.
.
.
The
informations
then
listed
the
productions
set
out
in
two
demands.
The
prior
demands
made
by
the
Minister
required
production
of
a
multitude
of
documents
alleged
to
be
in
the
possession
of
the
respondents
and
as
well
the
preparation
and
production
of
specified
reports
not
yet
in
existence.
It
is
not
in
issue
that
the
time
for
production,
set
out
in
the
demand,
was
a
reasonable
time.
Subsection
238(2)
of
the
Act
calls
for
a
fine
on
summary
conviction
for
breach
of
subsection
231(3)
ranging
from
$200
to
$10,000
and
in
the
discretion
of
the
trier,
in
addition,
imprisonment
not
to
exceed
six
months.
The
charges
came
on
for
hearing
before
Provincial
Court
Judge
K.A.
Langdon
on
March
21,
1985.
At
the
outset
and
before
plea,
on
a
motion
to
quash
that
learned
judge
granted
the
motion
finding
that:
(a)
service
of
a
requirement
under
section
231(3)
of
the
Income
Tax
Act
was
tantamount
to
a
seizure,
(b)
the
seizure
power
was
unreasonable,
(c)
the
powers
conferred
upon
the
Minister
of
National
Revenue
by
section
231(3)
of
the
Income
Tax
Act
offended
section
8
of
the
Canadian
Charter
of
Rights
and
Freedoms,
and
(d)
section
231(3)
of
the
Income
Tax
Act
was
of
no
force
or
effect.
His
reasons
are
summarized
in
the
stated
case
as
follows:
(a)
section
231(3)
of
the
Income
Tax
Act
contains
no
provision
for
prior
authorization
by
a
person
other
than
the
Minister,
(b)
section
231(3)
of
the
Income
Tax
Act
contains
no
provision
for
review
of
the
Minister's
discretion,
(c)
physical
intrusion
is
not
an
essential
ingredient
of
a
search
or
seizure,
(d)
the
Crown
led
no
evidence
as
to
foreign
laws
or
as
to
the
reasonableness
of
section
231(3)
of
the
Income
Tax
Act
and
failed
to
discharge
the
onus
upon
it
under
section
1
of
the
Canadian
Charter
of
Rights
and
Freedoms,
and
(e)
a
person
prosecuted
under
section
238(2)
of
the
Income
Tax
Act
does
not
have
the
right
to
have
the
validity
of
his
refusal
to
comply
with
a
demand
under
section
231(3)
of
the
Income
Tax
Act
determined
in
any
judicial
proceedings.
The
threshold
issue
before
me,
is
whether
the
demand
for
information
is
a
seizure
and
therefore
within
the
ambit
of
section
8
of
the
Charter.
If
it
is
a
seizure,
then
I
have
no
difficulty
in
agreeing
with
the
learned
judge
that
subsection
231(3)
must
be
declared
to
be
invalid
as
unreasonable
for
the
reasons
given
by
Dickson,
J.,
now
Dickson,
C.J.,
in
Hunter
et
al.
v.
Southam
Inc.,
[1984]
2
S.C.R.
145;
84
D.T.C.
6467.
Those
reasons
were
quoted
at
length
by
the
judge
below.
In
summary
form
the
minimum
requirements
of
section
8
call
for
the
following:
(1)
Prior
authorization,
where
feasible,
to
seize.
(2)
Provision
for
review
by
an
impartial
arbiter
such
as
provided
in
section
231(4)
of
the
Act.
(3)
A
statement
under
oath
of
reasonable
and
probable
grounds
for
the
seizure
and
the
relevance
of
the
productions
sought.
I
agree
with
Judge
Langdon
that
not
one
of
these
minimum
safeguards
is
present
in
this
case.
The
more
difficult
but
essential
element
of
this
case
is
whether
the
demand
is
in
fact
a
seizure.
If
it
is
not
then
the
constitutional
argument
fails.
The
leading
case
on
the
question
of
whether
a
demand
for
production,
which
carries
with
it
penal
sanctions
for
non-compliance,
constitutes
a
seizure
under
section
8
of
the
Charter
is
Thomson
Newspapers
Limited
et
al.
v.
Director
of
Investigation
and
Research,
Combines
Investigation
Act
et
al.
(1986),
57
O.R.
(2d)
257;
30
C.C.C.
(3d)
145.
The
validity
of
section
17
of
the
Combines
Investigation
Act,
R.S.C.
1970,
c.
C-23,
was
at
issue
in
that
decision.
The
production
of
documents
provisions
of
section
17
cannot
be
distinguished
in
any
substantial
way
from
those
contained
in
subsection
231(3)
except
for
subsection
17(3).
S.
17(3)
A
member
of
the
Commission
shall
not
exercise
power
to
penalize
any
person
pursuant
to
this
Act,
whether
for
contempt
or
otherwise,
unless,
on
the
application
of
the
member,
a
judge
of
the
Federal
Court
of
Canada
or
of
a
superior
or
county
court
has
certified,
as
such
judge
may,
that
the
power
may
be
exercised
in
the
matter
disclosed
in
the
application,
and
the
member
has
given
to
such
person
twenty-four
hours
notice
of
the
hearing
of
the
application
or
such
shorter
notice
as
the
judge
deems
reasonable.
The
very
real
difference
between
the
two
acts
is
the
safeguard
requirement
of
an
independent
arbiter
prior
to
prosecution
for
non-compliance
with
a
demand.
The
significance
of
an
arbiter
is
explained
by
Dickson,
C.J.
in
Hunter
et
al.,
supra,
in
these
words
[page
160
S.C.R.]
:
If
the
issue
to
be
resolved
in
assessing
the
constitutionality
of
searches
under
s.
10
were
in
fact
the
governmental
interest
in
carrying
out
a
given
search
outweighed
that
of
the
individual
in
resisting
the
governmental
intrusion
upon
his
privacy,
then
it
would
be
appropriate
to
determine
the
balance
of
the
competing
interests
after
the
search
had
been
conducted.
Such
a
post
facto
analysis
would,
however,
be
seriously
at
odds
with
the
purpose
of
s.
8.
That
purpose
is,
as
I
have
said,
to
protect
individuals
from
unjustified
state
intrusions
upon
their
privacy.
That
purpose
requires
a
means
of
preventing
unjustified
searches
before
they
happen,
not
simply
of
determining,
after
the
fact,
whether
they
ought
to
have
occurred
in
the
first
place.
This,
in
my
view,
can
only
be
accomplished
by
a
system
of
prior
authorization,
not
one
of
subsequent
validation.
The
respondent
makes
its
submission
in
these
words:
.
.
.
an
unrestricted
right
to
demand
coupled
with
prosecution
and
penalty
for
failure
to
comply
is
akin
to
a
seizure
unless
the
statutory
scheme
gives
the
person
required
to
produce
a
reasonable
opportunity
to
dispute
the
Order
and
prevent
the
surrender
of
the
documents.
Otherwise,
to
use
an
analogy,
if
the
State
were
unable
to
obtain
a
search
warrant
under
Section
443
of
the
Criminal
Code,
it
might
very
well
be
lawful
for
Parliament,
in
the
exercise
of
its
criminal
law
jurisdiction,
to
authorize
the
Attorney
General
of
Canada
for
any
purposes
related
to
the
administration
or
enforcement
of
the
Criminal
Code,
by
registered
letter
or
by
demand
served
personally,
to
require
from
any
person
that
he
produce
any
document
or
thing.
As
the
Charter
must
be
approached
on
a
purposive
basis,
it
would
be
untenable
to
find
that
the
state
could
obtain
by
forced
production
what
it
could
not
obtain
through
the
exercise
of
a
valid
search
warrant.
Grange,
J.A.,
writing
for
the
Ontario
Court
of
Appeal,
made
reference
to
the
search
and
seizure
provisions
of
section
10
of
the
Combines
Investigation
Act
that
had
been
declared
invalid
by
the
Supreme
Court
of
Canada
in
Hunter
et
al.
v.
Southam
Inc.,
supra.
He
said
[page
268
O.R.]:
“Seizure”
is
traditionally
and
etymologically
the
forcible
taking
of
possession
of
property.
Clearly
the
taking
under
s.
10
amounts
to
a
seizure.
As
I
have
said,
if
an
order
under
s.
17
to
produce
documents
is
simply
an
indirect
way
of
accomplishing
a
seizure
under
s.
10,
then
the
former
section
subject
to
the
test
of
reasonableness
must
be
struck
down
as
well.
I
think
the
addition
of
s-s.
(3)
to
s.
17
referred
to
above
is
relevant
not
only
to
the
question
of
whether
the
section
effects
a
seizure
but
also
if
it
does
whether
the
seizure
is
reasonable.
At
page
18
of
the
reasons
[page
268
O.R.]
Grange,
J.A.
continues:
What
happens
under
s.
17
is
that
an
order
is
issued.
An
order
is
of
course
to
be
obeyed
and
if
it
is
obeyed
then
the
consequence
is
much
the
same
as
a
seizure
under
s.
10.
But
if
it
is
not
obeyed
no
penalty
can
be
imposed
without
the
matter
being
considered
by
an
impartial
judicial
arbiter.
Moreover,
as
appears
from
Director
of
Investigation
&
Research
v.
Restrictive
Trade
Practices
Com'n.
et
al.,
.
.
.
the
order
can
be
attacked
on
motion
to
review
before
it
takes
effect.
The
result
of
the
order
is
really
no
different
from
that
consequent
upon
the
issuance
of
a
subpoena
duces
tecum
which
can
be
issued
in
either
civil
or
criminal
proceedings
without
any
requirement
of
assessing
its
reasonableness
and
the
conflicting
interests
of
the
parties.
He
then
concludes
[page
269
O.R.]:
.
.
.
It
is
not
necessary
to
formulate
a
general
rule
as
to
what
constitutes
a
seizure;
it
is
sufficient
to
say
that
the
s.
8
prohibition
does
not
encompass
an
order
requiring
the
production
of
documents
so
long
as
the
section
authorizing
the
order
(or
the
law
apart
from
that
section)
gives
the
person
required
to
produce
a
reasonable
opportunity
to
dispute
the
order
and
prevent
the
surrender
of
the
documents.
That
in
my
view
is
precisely
the
position
under
s.
17.
[Emphasis
is
mine.]
Counsel
for
the
respondent
argues
that
the
words
of
Grange,
J.A.,
"a
reasonable
opportunity
to
dispute
the
order",
must
be
read
to
include
not
only
a
reasonble
time
to
dispute
the
demand
before
prosecution,
which
subsection
231(3)
does
stipulate,
but
a
forum
that
has
jurisdiction,
discretion
and
independence
to
determine
the
issues
between
the
parties.
Counsel
argues
that
it
is
illusory
to
say
the
taxpayer
can
seek
a
declaration
or
certiorari
as
the
courts
do
not
have
the
discretion
that
is
given
to
a
judge
under
provisions
such
as
subsection
17(3)
of
the
Combines
Investigation
Act.
Mr.
Shanoff
says
the
illusion
is
highlighted
by
the
following
passage
from
the
decision
in
James
Richardson
&
Sons,
Limited
v.
The
Minister
of
National
Revenue,
[1984]
C.T.C.
345;
84
D.T.C.
6325.
Wilson,
J.,
writing
for
a
unanimous
court,
said
[pages
349-50
C.T.C.]:
The
language
of
subsection
231(3)
of
the
Income
Tax
Act
is
unquestionably
very
broad
and
on
its
face
would
cover
any
demand
for
information
made
to
anyone
having
knowledge
of
someone
else's
affairs
relevant
to
that
other
person's
tax
liability.
It
would,
in
other
words,
if
construed
broadly,
authorize
an
exploratory
sortie
into
any
taxpayer's
affairs
and
require
anyone
having
anything
to
contribute
to
the
exploration
to
participate.
It
would
not
be
necessary
for
the
Minister
to
suspect
noncompliance
with
the
Act,
let
alone
to
have
reasonable
and
probable
grounds
to
believe
that
the
Act
was
being
violated
as
required
in
subsection
231(4).
Provided
the
information
sought
had
a
bearing
(or
perhaps
even
could
conceivably
have
a
bearing)
on
a
taxpayer's
tax
liability
it
could
be
called
for
under
the
subsection.
Mr.
Shanoff
argues
that
because
the
section
is
so
broad
the
taxpayer
would
have
little
chance
of
success
in
opposing
a
demand
by
seeking
a
declaration
or
an
order
in
the
nature
of
certiorari.
I
have
now
had
an
opportunity
of
reading
this
decision
in
its
entirety.
As
often
happens,
the
passage
quoted
must
not
be
read
out
of
context.
Firstly,
the
demand
in
the
case
was
successfully
attacked
by
an
action
in
the
Federal
Court
for
certiorari
and
for
a
declaration
of
invalidity.
The
attack
made
by
the
Richardson
company
was
on
four
grounds:
1)
the
Requirements
are
not
authorized
by
s.
231(3)
of
the
Act;
2)
section
231(3)
of
the
Act
is
ultra
vires
the
Parliament
of
Canada;
3)
the
Requirements
are
void
under
the
provisions
of
the
Charter
of
Rights
and
Freedoms;
and
4)
the
Requirements
are
void
under
the
provisions
of
the
Canadian
Bill
of
Rights.
The
case
was
decided
on
the
first
ground
and
as
a
consequence
the
Charter
argument
under
section
8
was
not
dealt
with.
Secondly,
and
more
importantly,
Wilson,
J.,
immediately
following
the
passage
dealing
with
the
scope
of
subsection
231(3),
said
this
[page
350
C.T.C.]:
The
Canadian
Bank
of
Commerce
case,
however,
makes
it
clear
that
the
subsection
is
not
to
be
construed
that
broadly.
It
establishes
through
the
majority
judgment
written
by
Mr.
Justice
Cartwright
that:
(a)
the
test
of
whether
the
Minister
is
acting
for
a
purpose
specified
in
the
Act
is
an
objective
one
and
has
to
be
decided
on
the
proper
interpretation
of
the
subsection
and
its
application
to
the
circumstances
disclosed;
(b)
the
obtaining
of
information
relevant
to
the
tax
liability
of
some
specific
person
or
persons
whose
liability
to
tax
is
under
investigation
is
a
purpose
related
to
the
administration
or
enforcement
of
the
Act;
(c)
it
is
not
necessary
that
the
person
from
whom
the
information
is
sought
be
one
whose
liability
to
tax
is
under
investigation;
(d)
the
fact
that
the
giving
of
the
information
may
disclose
private
transactions
involving
persons
who
are
not
under
investigation
and
may
not
be
liable
to
tax
does
not
invalidate
the
Requirement.
The
learned
judge
concluded
that
subsection
231(3)
could
not
be
used
by
the
Minister
to
conduct
a
fishing
expedition
and
she
declared
the
demand
to
be
invalid.
Grange,
J.A.,
in
Thomson
Newspapers,
supra,
states
that
section
8
does
not
invalidate
an
order
for
production
as
long
as
the
authorizing
legislation
or
the
law
otherwise
affords
the
recipient
a
reasonable
opportunity
to
dispute
the
demand
or
order
before
production
or
prosecution.
He
referred
to
the
case
of
Director
of
Investigation
and
Research
v.
Restrictive
Trade
Practices
Commission
et
al.
(1985),
4
C.P.R.
(3d)
59;
18
D.L.R.
(4th)
750
(F.C.A.),
as
an
example
of
a
remedy
available
in
the
law
generally.
One
of
my
concerns
during
argument
was
that
the
section
was
so
broad
that
the
relevance,
or
reasonableness,
of
the
Minister's
demand
could
not
reasonably
be
argued
by
the
taxpayer
on
a
motion
for
certiorari
or
for
a
declaration
of
invalidity.
However,
it
appears
from
the
decision
in
James
Richardson
&
Sons,
Limited,
as
well
as
other
decisions
including
Director
of
Investigation
and
Research,
and
from
evidence
called
by
both
sides
on
the
original
motion
in
this
case,
that
this
was
not
simply
a
fishing
expedition.
The
issue
between
the
parties
was
delineated.
It
is
whether
the
Revenue
Canada
auditors
were
obstructed
or
prevented
from
carrying
on
their
audit
and
as
a
consequence
require
the
productions
demanded
to
complete
the
audit.
The
recipient
of
a
demand
under
subsection
231(3)
can
successfully
attack
such
demand
before
prosecution
for
failure
to
comply
on
a
number
of
grounds
including
the
following:
(1)
That
a
reasonable
time
for
production
has
not
been
afforded.
Re
Joseph
et
al.
and
Minister
of
National
Revenue,
[1985]
2
C.T.C.
164;
85
D.T.C.
5391;
51
O.R.
(2d)
658.
(2)
That
the
Minister
is
engaged
in
a
fishing
expedition
and
not
a
genuine
and
serious
enquiry
as
to
some
taxpayer's
liability.
(3)
That
the
documents
demanded
are
not
germane
or
relevant
to
the
issues
between
the
parties.
(4)
That
the
documents
are
privileged.
There
are
no
doubt
many
other
grounds
of
attack
available,
dependent
on
the
circumstances.
For
example,
I
would
think
that
where
a
demand
is
made
and
where
the
issues
between
the
parties
are
not
clearly
identified,
unlike
a
case
where
charges
have
been
laid,
that
it
would
be
incumbent
on
the
Minister
to
set
out
the
grounds
for
the
demand
in
order
that
relevance
could
readily
be
ascertained,
in
the
first
instance
by
the
recipient
of
the
demand
and
later,
if
necessary,
by
the
court.
These
avenues
of
attack
cannot
be
said
to
be
illusory.
They
create
substantial
defences
and
are
an
answer
to
many
of
the
concerns
raised
during
argument
about
ministerial
excesses
and
oppressive
conduct.
I
therefore
answer
both
questions
stated
in
the
negative.
A
subsection
231(3)
demand
is
not
a
seizure
within
section
8
of
the
Charter.
Appeal
allowed.
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