Citation: 2005TCC129
Date: 20050217
Dockets : 2002-922(EI), 2002-719(EI),
2002-917(EI),
2002-918(EI), 2002-919(EI), 2002-920(EI),
2002-921(EI), 2002-923(EI), 2002-924(EI) and
2002-928(EI)
BETWEEN:
OVIDE FRASER, VICTOR GAGNON, GEORGETTE LÉVESQUE,
JEAN-MARIE CIMON, CLAUDE CORRIVEAU, DAVE LANGELIER,
DENIS MORISSETTE, MARCEL BOUCHER, GILLES LAFLAMME
and SERGE BOUCHARD,
Applicants,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR ORDER
Angers J.
[1] This is a motion by the
Appellants for a determination on the admissibility of certain evidence of the Respondent.
The same issue will be raised in other appeals filed in this Court by the same
Appellants. For that reason, I have agreed to decide the question before
hearing the evidence on the substantive issue.
[2] The Applicants are
employees of E. Normand Inc. ("the company"). The company operates in
the field of excavation, transportation, snow removal and construction of
logging roads. In 1999, there were between 20 and 25 employees working for the company.
Its founder and principal shareholder is Ernest Normand.
[3] On May 25, 1999, two search
warrants were granted by a justice of the peace to the Royal Canadian Mounted
Police (RCMP). These warrants authorized searches at the home of Mr. Normand
and at the company's business office. The searches enabled the RCMP to seize
what have been characterized as "black books", thus enabling
representatives of Human Resources Development Canada to gather information
that could help them reconstitute the actual hours worked by the employees.
This work revealed a system of banking of hours that the company had
established for its employees, a system that had an impact on the Applicants' periods
in issue. As a result of the information thus gathered, statements were
obtained from the Applicants confirming the existence of this system. Counsel
for the Applicants argues that the searches in this case breached section 8 of
the Canadian Charter of Rights and Freedoms ("the Charter") on
the grounds that they were unreasonable searches and for that reason he is
asking that the black books and the statements that followed the searches be
excluded from this proceeding since their use is likely to bring the
administration of justice into disrepute.
[4] The parties proposed that
the appeal of Ovide Fraser be considered as a test case. The impugned decision
was made by the Minister of National Revenue ("the Minister")
pursuant to the Employment Insurance Act ("the Act") and,
according to this decision, the employment of the Appellant Ovide Fraser was
not insurable within the meaning of the Act during certain weeks, since the
employment failed to meet the requirements of a contract of service.
[5] The search warrants were
not challenged by the company or its principal shareholder, Mr. Normand. The company
ultimately pleaded guilty to 67 offences under the Act and there was a stay of
proceedings in the case of the charges laid against Mr. Normand. No explanation
of the stay of proceedings has been advanced.
[6] This case began in February
1999 when an employee of the company resigned from her position. When applying
for employment insurance benefits, this person told the authorities in the
Department of Human Resources Development that clandestine work was being done
and that false separation certificates were being issued by the company. In an
interview on March 25, 1999, this employee provided the investigator, Éric
Richard, with a statement that the company had two payroll journals — a computer
record and a black book in which all of the hours banked and hours paid in kind
or in cash were entered. The employee also gave Mr. Richard photocopies of some
black book pages for three or four employees, which allowed the investigators
to conduct an audit. The investigating officer compared the photocopies of
black book pages with the records of employment of these employees and it was
obvious, according to Mr. Richard, that the company was banking hours since the
black book pages and records of employment did not match.
[7] According to the
investigator, Mr. Richard, the employee who resigned was responsible for
bookkeeping and payroll. She received her instructions from Ernest Normand or
his daughter Claudette. His investigation led Mr. Richard to conclude that the company
and its majority shareholder had been embezzling, given the irregularities
disclosed by its employee and confirmed by comparing the records of employment
and the photocopies of the black book pages for the three or four
aforementioned employees.
[8] In view of its scope, this
information was forwarded to the RCMP for investigation purposes. That is how
the search warrants were obtained and executed. As a result of the searches,
six black books were seized at the residence of Ernest Normand and at the company's
place of business, enabling the Respondent's investigators to conduct an
analysis of the periods worked as entered in the black books compared with
those reported in the records of employment. Subsequently, the investigators
met with the Applicants and obtained out-of-court statements from them in which
they confess that their employer had a system for banking hours of work.
[9] RCMP officer Paul Albert
met with Éric Richard on April 20, 1999. The officer is the one who applied for
the search warrants. In his testimony he described the checks he performed before
applying for the warrants. He examined the documentation given to him by Éric
Richard, that is, the records of employment and the copies of pages from the black
book. He went on site to verify certain things, which enabled him to confirm
the address indicated on the registration certificates of the automobiles and
trucks belonging to Mr. Normand and the company. The municipal number indicated
is the same for Mr. Normand and the company: 113 on highway 132. The central
companies registry, the registry office and the information appearing on the
tax accounts provided further confirmation.
[10] Officer Albert reported
that he had reasonable grounds in support of his warrant applications. He testified
that he had no reason not to believe the employee who had resigned and that in
fact, he said, she was credible. He did not ask himself whether the information
received might have been stolen by the employee who had resigned, and he said
that no complaint of theft of documents had been made to the police by Mr.
Normand or by the company. One of the warrants covered the residence of Mr.
Normand, because he was the president of the company and the black books prior
to 1998 were kept there. Appendix C of Exhibits A-1 and A-2 specifies the other
reasonable grounds in support of the applications for search warrants made by Officer
Albert.
[11] Once the warrants had been
obtained, and prior to the searches, Officer Albert prepared a plan of action.
A list of the items seized and their location was filed. The black books for
1998 and 1999 were seized at the company offices and those for 1994 to 1997 at
Mr. Normand's residence.
[12] In his testimony, Mr.
Normand confirmed that he had not challenged the two searches on his own or his
company's behalf. He added that there was no agreement with his employees
concerning the confidentiality of the information contained in the payroll records,
the black books or elsewhere. These documents contained personal information on
the employees and, according to Claudette Normand, the company's director of
operations, this information was used for the company's internal accounting in
that it was used to determine the insurable hours. She acknowledges that the Respondent's
representatives are entitled to see and audit this information. The Appellants
are asking not only that evidence covered by this motion be excluded, but that
the following paragraphs be struck from the Replies to the Notices of Appeal:
- 5 (j), (l) and m) in the
case of Victor Gagnon;
- 5 (l) and (m) in the
case of Georgette Levesque;
- 5 (i), (l), (m) and (j)
in the case of Jean-Marie Cimon;
- 5 (h), (j), (k) and (i)
in the case of Claude Corriveau;
- 5 (j), (m), (n) and (k)
in the case of Dave Langelier;
- 5 (m), (q), (r), (n)
and (o) in the case of Denis Morissette;
- 5 (k), (n) and (e) in
the case of Ovide Fraser;
- 5 (k), (n), (o) and (l)
in the case of Marcel Boucher;
- 5 (j), (m), (n) and (k)
in the case of Gilles Laflamme;
- 5 (h), (k) and (i) in
the case of Serge Bouchard.
[13] The issue, then, is whether
the information obtained by means of the searches breaches the Appellants'
Charter rights. Can they argue that in this case their fundamental Charter
rights have been violated? Counsel for the Appellants argues that the
informations used to obtain the search warrants under section 487 of the Criminal
Code do not contain the necessary evidence concerning the offence alleged
against Mr. Normand, so no reasonable ground has been established that might
justify the issuance of the search warrants.
[14] The relevant provisions of
the Charter read as follows:
Life, liberty and security of person
7. Everyone has
the right to life, liberty and security of the person and the right not to be
deprived thereof except in accordance with the principles of fundamental
justice.
Search or seizure
8. Everyone has
the right to be secure against unreasonable search or seizure.
Enforcement
Enforcement of guaranteed rights and
freedoms
24(1) Anyone whose
rights or freedoms, as guaranteed by this Charter, have been infringed or
denied may apply to a court of competent jurisdiction to obtain such remedy as
the court considers appropriate and just in the circumstances.
Exclusion of evidence bringing
administration of justice into disrepute
24(2) Where, in
proceedings under subsection (1), a court concludes that evidence was obtained
in a manner that infringed or denied any rights or freedoms guaranteed by this
Charter, the evidence shall be excluded if it is established that, having
regard to all the circumstances, the admission of it in the proceedings would
bring the administration of justice into disrepute.
[15] The question that must be
considered first and foremost is whether the Appellants can benefit from the
protection of section 8 of the Charter. Hunter v. Southam Inc., [1984] 2
S.C.R. 145, holds that all rights and freedoms – including, therefore, those in
section 8 – are personal rights that protect people and not places. A person may
therefore challenge the legality of a search if he or she is able to establish
that his or her personal right to privacy has been violated.
[16] The applicable principles
concerning section 8 of the Charter were summarized by Cory J. in R. v.
Edwards, [1996] 1 S.C.R. 128, at paragraph 45, which I reproduce here:
A review of the recent decisions of this
Court and those of the U.S. Supreme Court, which I find convincing and properly
applicable to the situation presented in the case at bar, indicates that
certain principles pertaining to the nature of the s. 8 right to be secure
against unreasonable search or seizure can be derived. In my view, they may be
summarized in the following manner:
1. A claim for
relief under s. 24(2) can only be made by the person whose Charter rights have
been infringed. See R. v. Rahey, [1987] 1 S.C.R. 588, at p. 619.
2. Like all
Charter rights, s. 8 is a personal right. It protects people and not places.
See Hunter, supra.
3. The right to
challenge the legality of a search depends upon the accused establishing that
his personal rights to privacy have been violated. See Pugliese, supra.
4. As a general
rule, two distinct inquiries must be made in relation to s. 8. First, has the
accused a reasonable expectation of privacy. Second, if he has such an
expectation, was the search by the police conducted reasonably. See Rawlings,
supra.
5. A reasonable
expectation of privacy is to be determined on the basis of the totality of the
circumstances. See Colarusso, supra, at p. 54, and Wong, supra,
at p. 62.
6. The factors to
be considered in assessing the totality of the circumstances may include, but
are not restricted to, the following:
(i) presence at
the time of the search;
(ii) possession or
control of the property or place searched;
(iii) ownership of
the property or place;
(iv) historical use
of the property or item;
(v) the ability to
regulate access, including the right to admit or exclude others from the place;
(vi) the existence
of a subjective expectation of privacy; and
(vii) the objective
reasonableness of the expectation.
See United States v. Gomez, 16 F.3d 254 (8th Cir. 1994), at p. 256.
7. If an accused
person establishes a reasonable expectation of privacy, the inquiry must proceed
to the second stage to determine whether the search was conducted in a
reasonable manner.
[17] In the case at bar I am
unable to determine, on the basis of the evidence adduced, how the Appellants
could have had a reasonable expectation of privacy in regard to the documents
seized at Ernest Normand's home or the company offices. Mr. Normand himself
testified that there was no agreement with his employees concerning the
confidentiality of the information on them. In fact, this is information about
the Appellants that can be audited by the appropriate government departments,
including the Department of Human Resources Development and the Department of
Revenue. In R. v. Jarvis, [2002] 3 S.C.R. 757, Iacobucci and Major JJ. stated
that a taxpayer's privacy interest in records that may be relevant to the
filing of his or her tax return is relatively low. I quote paragraphs 71 and 72
of that judgment:
71 The context-specific approach
to s. 8 inevitably means, as Wilson J. noted in Thomson Newspapers, supra,
at p. 495, that "[a]t some point the individual's interest in privacy must
give way to the broader state interest in having the information or document
disclosed". Naturally, if a person has but a minimal expectation with
respect to informational privacy, this may tip the balance in the favour of the
state interest: Plant, supra; Smith v. Canada (Attorney General), [2001] 3 S.C.R. 902, 2001 SCC 88.
72 Generally, an individual has a
diminished expectation of privacy in respect of records and documents that he
or she produces during the ordinary course of regulated activities: see, e.g.,
Thomson Newspapers, supra, at p. 507, per La Forest J.; 143471
Canada, supra, at p. 378, per Cory J.; Comité paritaire,
supra, at pp. 420-21; Fitzpatrick, supra, at para. 49. In
the particular context of the self-assessment and self-reporting income tax
regime, a taxpayer's privacy interest in records that may be relevant to the
filing of his or her tax return is relatively low: McKinlay
Transport, supra, at pp. 649-50.
[Emphasis
added]
[18] As to employment insurance,
the Supreme Court of Canada held in Smith v. Canada (Attorney General), [2001] 3 S.C.R. 902,
that the Canada Unemployment Insurance Commission's interest should have
priority over the taxpayer's privacy interest. At paragraph 2 of the decision,
we can read the following:
2 As in R. v. Plant,
[1993] 3 S.C.R. 281, there was no violation of s. 8 of the Canadian Charter
of Rights and Freedoms on the facts of this case. We conclude that
the appellant cannot be said to have held a reasonable expectation of privacy
in relation to the disclosed portion of the E-311 Customs Information which
outweighed the Canada Unemployment Insurance Commission's interest in ensuring
compliance with self-reporting obligations of the Unemployment Insurance
benefit program.
[Emphasis added]
[19] This Court ruled on the
question of reasonable expectation of privacy in the recent decision handed
down by Dussault J. in Kiwan v. Canada, [2004] T.C.J. No. 420 (Q.L.). I
reproduce some excerpts from that decision.
[175] As for section 8 of the Charter
in which provision is made that everyone has the right to be secure against
unreasonable search or seizure, counsel for the Respondent pointed out that
this is a personal right and that the Appellants did not demonstrate in any way
that they had any reasonable expectation of confidentiality where the documents
seized from the A.O.L.M. or from the home of the Order's accountant, Ralph
Nahas, were concerned. They point out that there is little reasonable
expectation of confidentiality involved in documents subject to audits to
ensure compliance with the Act. ...
...
[177] I agree with the position of
counsel for the Respondent. Counsel for the Appellants cites first subsection
24(2) of the Charter on the grounds that evidence was obtained in violation of
the A.O.L.M.'s rights and freedoms and that hence the Appellants may rely on
this violation in order to have the evidence thereby obtained excluded.
[178] In this regard and assuming that
there was a violation, which I definitely do not recognize, it is
important to point out that specific mention is made in the introduction to
subsection 24(2) of the Charter of proceedings in subsection (1) of the same
section, proceedings brought by a person whose rights or freedoms guaranteed
under the Charter have been infringed or denied. This position was in
fact adopted by the majority of the Supreme Court of Canada in Edwards, supra.
The Appellants never demonstrated that any of their rights or freedoms
guaranteed by the Charter had been infringed. ...
[179] As for the protection provided
under section 8 of the Charter against unreasonable search or seizure, it
was never established that the Appellants could have a reasonable expectation
of privacy in relation to the documents seized from the A.O.L.M. or from the
home of the accountant, Ralph Nahas.
[Emphasis
added]
[20] In my opinion, the
Appellants in this case have failed to establish that they had ownership of the
seized property or a reasonable expectation of privacy in regard to the
documents seized at the home of Ernest Normand and at his company. That being
the case, the Appellants have no basis for challenging the legality of the
searches. The Appellants' section 8 Charter rights have not been violated,
therefore.
[21] As to section 7 of the
Charter, suffice it to say that no charge has been laid against the Appellants
and, judging by the evidence, no criminal investigation has been conducted.
There is no deprivation of the Appellants' life, liberty or security in either
the employment insurance decisions of the Minister, the subject matter of these
appeals, or the assessments made under the Income Tax Act, the subject
matter of appeals now awaiting trial.
[22] In my opinion, there has
been no violation or denial of the Appellants' fundamental Charter rights and
freedoms, and the Appellants cannot therefore avail themselves of the remedy in
subsection 24(2), namely, the exclusion of the evidence in question obtained by
the Respondent and the removal of the paragraphs in question from the Replies
to the Notices of Appeal. As to whether, assuming there was such a violation or
denial, the use of the evidence would be likely to bring the administration of
justice into disrepute, it is necessary to recall the remarks of Nadon J.A. of
the Federal Court of Appeal in Dwyer v. Canada, [2003] F.C.J. No. 1265
(QL), at paragraphs 89 and 90:
[89] In Jurchison v. Canada,
2001 FCA 126, this Court, in an appeal arising out of preliminary motions brought
in a taxpayer's appeal of his reassessments, had to consider whether evidence
obtained in breach of the Charter was admissible in civil proceedings. At
paragraph 1 of his Reasons for the Court, Sexton J.A. stated that in
determining that issue, it was necessary to consider whether the evidence was
to be used in a criminal or civil proceeding.
[90] Thus, in determining whether
tainted evidence should be excluded, this Court, in Donovan, supra
and Jurchison, supra, has made a clear distinction between civil
and criminal proceedings. More particularly, for Linden J.A. in Donovan,
supra, where a person's liberty was "not threatened" and
where the issue was the "duty to pay taxes", courts should exercise
their discretion to exclude evidence with even greater restraint.
[Emphasis
added]
[23] For these reasons, the
motion is dismissed. The evidence that it sought to exclude is therefore
admissible.
Signed at Ottawa, Canada, this 17th day of February 2005.
"François Angers"
Translation certified
true
on this 16th day
of March 2009.
Brian McCordick,
Translator
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