Supreme Court of Canada
The Queen v. Snider, [1954] S.C.R.
479
Date: 1954-06-21
In The
Matter of A Reference Under The Constitutional Questions Determination Act,
R.S.B.C. 1948, c. 66.
and
In The
Matter of Regina v. Snider.
1953: December 3, 4, 7; 1954:
June 21.
Present: Rinfret C.J. and
Kerwin, Taschereau, Rand, Kellock, Estey, Locke, Cartwright and Fauteux JJ.
ON APPEAL FROM THE COURT OF
APPEAL FOR BRITISH COLUMBIA
Privileged documents—Evidence—Production
of income tax returns sought in a criminal prosecution—Objection by Minister—Whether
contrary to public policy—Income War Tax Act, R.S.C. 1927, c. 97, s. 81.—Income
Tax Act, 1948, S. of C. 1948, c. 52, s. 121.—Excess Profits Tax Act, 1940, S.
of C. 1940.
At a trial under the Criminal
Code, the Crown in the right of the Province subpoenaed the Director of
Taxation of the District of Vancouver requiring him to give evidence and to
produce the income tax returns of the accused. The Minister of National
Revenue, in an affidavit, objected to the production of the documents and to
the giving of oral evidence, basing his claim that it would be prejudicial
[Page 480]
to the public interest on s.
81 of the Income War Tax Act and on s. 121 of the Income Tax Act,
which prohibit such communications to any person other than a person
"legally entitled thereto".
Consequent to the ruling of
the trial judge that the returns must be produced and, if relevant, given in
evidence, the following questions were submitted for the opinion of the Court
of Appeal for British Columbia pursuant to the Constitutional Questions
Determination Act, R.S.B.C. 1948, c. 66:
1. On the trial of a person
charged with an indictable offence, where a subpoena duces tecum has
been served on the appropriate Income Tax official to produce before the Court
on such trial returns, reports, papers and documents filed pursuant to the
provisions of the Income Tax Act, and the Income War Tax Act or
the Excess Profits Tax Act, 1940, and to give evidence relating thereto,
and where the Minister of National Revenue has stated on oath that in his
opinion such evidence and the production of such returns, reports, papers and
documents would be prejudicial to the public interest; ought such Court to
order the production of such returns, reports, papers and documents and the
giving or oral evidence relating thereto: (a) when such subpoena is
served at the instance or on behalf of the Attorney General of the Province; (b)
when such subpoena is served at the instance or on behalf of the accused?
2. Are the documents hereinbefore
mentioned in Question 1, for the purposes of a subpoena duces tecum
directed to an Income Tax Official of the Income Tax Department, in the
possession of the said official to the extent that the Court may order them
produced in Court pursuant to the said subpoena, or are the said documents in
the possession of the Crown?
3. Do Sections 81 and 121 of
the Income War Tax Act and the Income Tax Act, 1948, respectively
affect the right of the Minister of National Revenue to object on the ground of
prejudice to the public interest to the production of the documents
hereinbefore mentioned in Question 1 and to the giving of oral evidence by an
Income Tax official relating to returns made under the said Acts?
On appeal to this Court, it
was held:
1. (Per Rinfret C.J., Kerwin,
Taschereau, Rand, Kellock, Estey and Fauteux JJ.) That the Court may order the
production of the documents in question and the giving of oral evidence
relating thereto, unless special facts or circumstances appearing in the
Minister's affidavit make it clear to the Court that there might be prejudice
to the public interest in the disclosure, but only to the extent of the
document or documents within the special facts or circumstances.
2. (Per Locke J.) That the
Court may order the production of the documents in question and the giving of
oral evidence relating thereto to enable the Court to determine whether the
facts discoverable by the production of the documents would be admissible,
relevant or prejudicial or detrimental to the public welfare in any justifiable
sense.
3. (Per Cartwright J.) That
the Court may order the production of the documents in question and the giving
of oral evidence relating thereto, limited however to a case in which the
objection of the Minister is to the production of any documents belonging to
the class consisting of returns, reports, papers and documents filed
[Page 481]
pursuant to the provisions of
the Income Tax Act, the Income War Tax Act or the Excess
Profits Tax Act, 1940, on the ground that they belong to that class.
4. (Per Curiam) That for the
purposes of a subpoena duces tecum directed to an Income Tax Official of
the Income Tax Department, the documents in question are in the possession of
such official to the extent that the Court may order them produced in Court
pursuant to a subpoena.
5. (Per Rinfret C.J., Kerwin,
Taschereau, Rand, Kellock, Estey, Cartwright and Fauteux JJ.) That the Minister
has no right to object to the production of the documents in question.
6. (Per Locke J.) That neither
s. 81 of the Income War Tax Act or s. 121 of the Income Tax Act,
1948, affect the right of the Minister to object on the ground of public
interest to the production of such documents in criminal proceedings and the
giving of evidence relating thereto, but the effect of the sections is to
render the objections subject to the discretionary jurisdiction and consequent
order of the trial judge as set forth in the answer to Question 1.
APPEAL from the judgment of
the Court of Appeal for British Columbia in the matter of a reference under the Constitutional
Questions Determination Act, R.S.B.C. 1948, c. 66, in respect of the
production in Court of Dominion Income Tax returns in a criminal prosecution.
F. P. Varcoe, Q.C. and D. H. W. Henry for the Attorney General
of Canada.
L. Kelley, Q.C. and J.J. Urie for the Attorney General of British Columbia.
The judgment of Rinfret C.J. and
of Rand J. was delivered by:—
RAND J.:—This reference raises an
important question of the right of the Minister of National Revenue to object
to the production before a court of the income returns of a person charged in
criminal proceedings; and since there are many aspects to the general question
of privilege claimed by the Crown in relation to which different considerations
must be taken into account, I think it desirable to keep within the boundaries
which the facts in this case have set for us. As the matter relates to evidence
sought by either the Crown or the accused in a criminal prosecution, it is to
be distinguished formally from a similar step in civil proceedings.
As Mr. Varcoe seemed to put it,
any document coming into the hands of persons engaged in the work of any branch
of the Executive, is ipso facto, on the ground of public
[Page 482]
policy, exempt from production on
the objection of the departmental minister and for that proposition he cited
many authorities concluding with that of Duncan v. Cammell Laird
& Company.
When these authorities are closely examined, however, it will be found that
they cannot be taken to proceed on any principle so broadly stated, and it
becomes necessary, then, to enquire into the nature of testimonial privilege
against disclosure and the grounds on which it is made effective in legal
proceedings.
What is in debate are
confidential communications and, for a better understanding of the question,
the distinction is to be kept in mind between them and the matter which they
deal with or express, that is, there may be confidential or secret matter apart
from that of the communications themselves but to which they relate, or the
secrecy may exist as to the matters which the communications themselves create
or indeed to the fact of the communication alone. It requires as its essential
condition that there be a public interest recognized as overriding the general
principle that in a court of justice every person and every fact must be
available to the execution of its supreme functions. As Lord Chancellor
Hardwicke, in speaking against the Bill For Indemnifying Evidence, Cobbett's
Parliamentary History 12, 675, 693, 1742, declared:—
It has, my lords, I own,
been asserted by the noble duke that the public has a right to every man's
evidence—a maxim which in its proper sense cannot be denied. For it is
undoubtedly true that the public has a right to all the assistance of every
individual.
And this applies as fully to the
private suitor or an accused as to the public. The privilege is one to be
asserted by or on behalf of a person or persons including the Crown to whose
benefit it enures, and it may be waived only by the beneficiary; if the
disclosure is proposed in a proceeding between third parties, the court itself
must interpose to safeguard the privilege.
It springs, then, from a
confidential communication coupled with a paramount public interest in
permitting the secrecy surrounding the communication or its contents to be
maintained. This is perhaps best illustrated by the privilege relating to
communications between husband and wife or between solicitor and client. The
public interest in
[Page 483]
the latter relationship lies in
securing to every citizen the skill and ability of a professional class to
enable him to protect his own interest in life, liberty and property within the
law and before its tribunals. If that means were not, in the widest sense, made
available to him he would be denied that justice which it is a fundamental
object of our political organization to secure to him. The client may,
therefore, in absolute freedom, disclose to his solicitor the details of his
business or personal matters on which he seeks legal advice or action, and upon
that communication the law places the seal of confidence which only the client
himself can remove. Of a similar nature are communications by an informer to
public enforcement officers and those between officers of state on national or
international matters expressing views or making proposals on governmental
policy which may affect the peace or safety of the country and which the
ministers of the Crown may even be sworn not to disclose. There may also be
external matters such as of defence which equally, for the same reasons, must
be held to be within that safeguard, the facts of which may, in the discretion
of ministers or government, be disclosed as considered desirable. Is there,
then, a privilege of that nature here? If so, to whom does it run and what is
the public policy supporting it?
It is claimed that the
circumstances give rise to such a privilege in the Crown and that the public
interest emanates from an undertaking on its part, implied by the Income Tax
Act, toward all income taxpayers that the contents of the returns of none
of them will be revealed beyond the circle of officials concerned in
administering the statute. Sec. 121 of that Act forbids the disclosure
of and information obtained under it to any person "not legally entitled
thereto". For the purposes of his argument, however, Mr. Varcoe puts that
aside as being irrelevant to the proposition urged.
I am unable to agree with either
of these contentions. I can find nothing in the statute indicating such an
undertaking. The disclosure of a person's return of income for taxation
purposes is no more a matter of confidence or secrecy than that, say, of his
real property which for generations has been publicly disclosed in assessment
rolls. It is in the same category as any other fact in his life and the
production in court of its details obtained from his books or any
[Page 484]
other source is an everyday
occurrence. The ban against departmental disclosure is merely a concession to
the inbred tendency to keep one's private affairs to one's self. Now that, in
this competitive society, is a natural and unobjectionable tendency but it has
never before been elevated to such a plane of paramount concern. The most
confidential and sensitive private matters are daily made the subject of
revelation before judicial tribunals and it scarcely seems necessary to remark
on the relative insignificance to any legal or social policy of such a fact as
the income a man has been able to produce. I should say, therefore, that the
only privilege furnished is that given by the statute and that it is a
privilege for the benefit of the individual and not the Crown.
The prohibition of the statute is
against disclosure to others than the departmental staff charged with the assessment
but since the public interest in the administration of justice transcends that
of any individual in the details of his ledger account, the ban is to be taken
to be directed against a voluntary disclosure only and has no application to
judicial proceedings. The intervention of the minister, as would be that of the
person himself, is therefore ineffectual.
The second question of the
reference suggests a distinction between possession of the Crown and by
departmental officials administering the Act. The "Crown" as used in
this sense is assumed to carry with it some mystical character which removes
the case from the level on which taxation takes place. Where in constitutional
or high governmental functions the prerogative or even statutory power is
exercised in relation to the possession of a document whether personally by the
Sovereign or by means of secretaries, ministers, or other high officers of
state acting themselves or through subordinate officers, there are or may be
undoubtedly elements that give the possession a special character. But here is
a statute providing for the assessment and collection of taxes by an
administrative department which the statute itself sets up. The subject is
placed in communication with the officials of that department in immediate
relation to a function that directly and individually affects his private
financial affairs. Neither the prerogative nor any constitutional or political
function is involved. To suggest that either in the case of protecting
[Page 485]
or attacking the private interest
of the taxpayer the custody of tax returns rendered to the department can be
refused production on the ground of the nature of the possession is to attract
some vague magic sensed or associated with the prerogative to the routine of
administrative government. All governmental and administrative activity may be
said to be carried out by the Executive but it is not in these levels of
administration, which might extend to every clerk, say, of a government
railway, that any degree or shade of possession in the course of executive
action is, by a reference to the Crown, to be placed beyond the reach of the
courts.
Once the nature, general or
specific as the case may be, of documents or the reasons against its
disclosure, are shown, the question for the court is whether they might, on any
rational view, either as to their contents or the fact of their existence, be
such that the public interest requires that they should not be revealed; if
they are capable of sustaining such an interest, and a minister of the Crown
avers its existence, then the courts must accept his decision. On the other
hand, if the facts, as in the example before us, show that, in the ordinary
case, no such interest can exist, then such a declaration of the minister must
be taken to have been made under a misapprehension and be disregarded. To
eliminate the courts in a function with which the tradition of the common law
has invested them and to hold them subject to any opinion formed, rational or
irrational, by a member of the executive to the prejudice, it might be, of the
lives of private individuals, is not in harmony with the basic conceptions of
our polity. But I should add that the consequences of the exclusion of a
document for reasons of public interest as it may affect the interest of an
accused person are not in question here and no implication is intended as to
what they may be.
What is secured by attributing to
the courts this preliminary determination of possible prejudice is protection
against executive encroachments upon the administration of justice; and in the
present trend of government little can be more essential to the maintenance of
individual security. In this important matter, to relegate the courts to such a
subserviency as is suggested would be to withdraw from them the confidence of
independence and judicial appraisal that so far appear to have served well the
organization of
[Page 486]
which we are the heirs. These are
considerations which appear to me to follow from the reasoning of the Judicial Committee
in Robinson v. South Australia.
I would therefore answer the
questions as follows:—
|
Question I:
|
(a) and
|
(b)
|
Yes,
unless special facts or circumstances appearing on the minister's affidavit
make it clear to the court that there might be prejudice to the public
interest in the disclosure, but only to the extent of the document or
documents within the special facts or circumstances.
|
|
Question II:
|
The
documents are in the custody of officials to the extent that the court may
order them produced in court pursuant to subpoena.
|
|
Question III:
|
The
minister has no right to object to the production of the documents.
|
|
|
|
|
|
Subject to the variation
indicated, the appeal must be dismissed.
The judgment of
Kerwin,Taschereau, Kellock and Fauteux JJ. delivered by:—
KELLOCK J.:—In support of the
appeal Mr. Varcoe relied heavily upon the decision of the House of Lords in Duncan
v. Cammell Laird:
The present questions, however, relate exclusively to criminal proceedings, and
it is stated by Viscount Simon L.C., in the above case at p. 591 that
The judgment of the House in
the present case is limited to civil actions and the practice, as applied in
criminal trials where an individual's life or liberty may be at stake, is not
necessarily the same.
Even in criminal proceedings it
has been held, for example, that the usual rule that the channel of information
giving rise to a prosecution is not to be disclosed upon the ground of public
interest, is not an absolute rule. In Hardy's case,
Eyre C.J. said:
…there is a rule which has
universally obtained on account of its importance to the public for the
detection of crimes, that those persons who are the channel by means of which
that detection is made, should not be unnecessarily disclosed: if it can be
made to appear that really and truly it is necessary to the investigation of
the truth of the case that the name of the person should be disclosed, I should
be very unwilling to stop it.
[Page 487]
In referring to the above
statement and to others of the same character, Viscount Simon said at the above
page:
Indeed, Eyre, C. J., in the
passage referred to appears only to be restricting needless cross-examination.
There is, accordingly, not only a
public interest in maintaining the secrecy of documents where the public
interest would otherwise be damnified, as, for example, where disclosure would
be injurious to national defence or to good diplomatic relations, or where the
practice of keeping a class of document is necessary for the proper functioning
of the public service, but there is also a public interest which says that
"an innocent man is not to be condemned when his innocence can be
proved"; per Lord Esher M.R., in Marks v. Beyfus.
It cannot be said, however, that either the one or the other must invariably be
dominant.
In considering the applicability
of the rule as to secrecy of documents in the public interest, it is to be
remembered that where it does apply, not even a copy of a document, no matter
from what source it may be forthcoming, nor any oral evidence as to its contents
are admissible.
In Chatterton v. Secretary of
State for India,
A. L. Smith, L.J., laid down the rule at p. 195 as follows:
The cases have gone the
length of holding that, even if no objection were taken to the production of
such a document by the person in whose custody it was, it would be the duty of
the judge at the trial to intervene, and to refuse to allow it to be produced:
and it has further been held that, if an attempt were made to get round that
difficulty by giving secondary evidence of its contents, the judge ought also
to prevent that from being done.
Viscount Simon, L.C., referred to
the above with approval in the Cammell Laird case at p. 595, where he
said:
The present opinion is
concerned only with the production of documents, but it seems to me that the
same principle must also apply to the exclusion of verbal evidence which, if
given, would jeopardize the interests of the community.
In 1888, in Hennessy v. Wright,
Wills J. had said:
I think the above cases
abundantly show that no sound distinction can be drawn between the duty of the
judge when objection is taken by the responsible officer of the Crown, or by
the party, or when, no objection being taken by anyone, it becomes apparent to
him that a rule of public policy prevents the disclosure of the documents or
information sought.
[Page 488]
It follows that if, in any case,
the nature of the information sought to be placed before the court is not of
such a nature that by no person or by no means may evidence be given of it,
there is no public interest attaching to its nondisclosure. Moreover, as
observed by Lord Blanesburgh in Robinson's case
…the privilege, the reason
for it being what it is, can hardly be asserted in relation to documents the
contents of which have already been published.
The documents which are involved
in the questions presently before the court are all documents which have been
"filed" pursuant to the provisions of one or other of the designated
statutes, that is, they are all documents emanating from a taxpayer or a person
required by the lgislation to furnish information. As pointed out by Viscount
Simon in the Cammell Laird case at p. 592, the question as to what documents
are non-producible on the ground of public interest, may arise with respect to
the contents of a particular document or with respect to a class of
document. The questions presently before the court relate exclusively to a
class of document and not to the contents of any particular document within
that class.
In considering the proper answers
to be given to the questions asked, it is pertinent to consider whether in the
legislation itself, Parliament has indicated whether or not any secrecy, from
the standpoint of the state, is to attach to documents of this class. The
situation will sufficiently appear if I refer only to the provisions of the Income
Tax Act (1948) 11-12 Geo. VI, c. 52.
By s. 82(2), which deals with
appeals by a taxpayer to the Income Tax Appeal Board from the decision of the
Minister, it is not the Crown but the appellant who is given the right to
require a hearing in camera. The present form of the section emphasizes the
intention of Parliament in that the right formerly given by the previous s. 68
to the Crown to require the hearing to be in camera, no longer exists. It would
seem difficult to contend in the light of this legislation that any state
secrecy was intended by Parliament to surround the class of document here in
question. S. 93, which deals with appeals to the Exchequer Court, is
[Page 489]
similar to s. 82(2). These provisions,
in my view, indicate that any secrecy which is in contemplation of the statute
is for the benefit of the taxpayer only.
Nor do the sections just referred
to stand alone. By s. 120(1) it is made an offence to make, participate in or
assent to the making of a false or deceptive statement in a return. Proceedings
to enforce the penalty provided for such an offence necessarily involve the
production of the offending return in evidence. In fact, by s. 124(8) provision
is made for the admission of a sworn copy of any document made by or on behalf
of a taxpayer as prima facie evidence of the nature and contents of the
document. In Snell v. Haywood (No. 2), it
was held by the Appellate Division of the Supreme Court of Alberta that
proceedings of this character by way of summary conviction must be in public.
I respectfully agree with the
decision in Ship v. The King,
where it was held by the Court of King's Bench, Appeal Side, that s. 121, which
deals with the subject-matter of secrecy as to "any information obtained
under this Act", or "any written statement furnished under this
Act", and which prohibits communication by employees of Her Majesty to
anyone except a person "legally entitled thereto", applies in the
administrative field only. The statute itself has nothing to say as to the
identity of the persons so entitled but leaves that to be determined by the
general law. In my opinion, a court of competent jurisdiction issuing its
subpoena would, in any event, be within the language of the exception and entitled
to enforce the production of any returns or statements filed. It may be
observed that in Ship's case the Crown did not, on that occasion, even
object to the production of such documents.
The decision reached by a divided
court in British Columbia in the case of Weber v. Pawlik,
is one with which, with respect, I cannot agree. That was a partnership action
in which the plaintiff alleged that the defendant, by concealing and mis-stating
to him the firm's earnings, had deprived him of his proper share of the profits
and
[Page 490]
eventually induced him to sell
his interest at an undervalue. The plaintiff had left the management of the
partnership business to the defendant, the latter making the income tax returns
on its behalf, while furnishing the plaintiff with statements as to profits.
After the plaintiff had sold out
his interest to the defendant, he was assessed for taxes in respect of periods
during which the partnership was in existence, on profits substantially in
excess of those which had been reported to him by the defendant. On application
to the Income Tax authorities, the plantiff was given full particulars of the
returns the defendant had filed, which were, of course, fully as much those of
the plaintiff as of the defendant, but at the trial, on objection of the
Minister, the returns were excluded. The objection appears to have involved the
contention that the returns were not producible in the public interest because
"confidential".
This decision, with respect,
involves a misconception not only of the effect of the statute itself but also
of the scope of the rule purported to be invoked, as, if applicable, no
evidence of the contents of the returns could have been given either by
production of a copy or by oral evidence. This could scarcely have been
contended in such a case as the defendant would be obligated to make full
disclosure of the income of the partnership.
Mr. Varcoe refused to take any
such position in the case at bar but based the appeal upon the ground of an
undertaking on the part of the Crown that tax returns will be kept confidential
by the department. Neither in criminal nor in civil proceedings are documents
which are merely "official" or "confidential" within the
rule as to nondisclosure on the ground of public interest. In Asiatic
Petroleum Company v. Anglo-Persian Oil Company Limited,
Swinfen Eady, L.J., (with the subsequent approval of the Privy Council in Robinson
v. South Australia, said p. 830 that the foundation of the rule
is that the information
cannot be disclosed without injury to the public interests, and not that the
documents are confidential or official, which alone is no reason for their non-production:
Smith v. East India Co., 1 Ph. 60; Hennessy v. Wright, 21 Q.B.D.,
509.
[Page 491]
In my view of the statute, there
is no provision as to the confidential character of returns filed except that
provided for by ss, 82(2), 93 and 121, with which I have already dealt.
It only remains, in this aspect
of the matter, to refer to the decision in re Hargreaves.
That case arose under s. 115 of the Imperial Companies Act, 1862, which
gives the court a discretion as to making an order for production of documents.
The liquidator of the company there in question, in order to obtain evidence in
support of a misfeasance summons against the directors, applied for an order
that the surveyor of taxes should attend for examination and produce certain
balance-sheets of the company which had been delivered to him for the purpose
of assessment for income tax. The surveyor, who objected to produce on the
ground that it would be contrary to the oath he had taken, was supported in his
objection to production of the documents by the Board of Inland Revenue on the
ground that to do so would be "prejudicial and injurious to the public interests
and service".
Wright J., the judge of first
instance, referred to the discretionary nature of the jurisdiction conferred by
s. 115 and said that if he had sufficient evidence that in the opinion of the
Board of Inland Revenue the Public service would suffer by the production of
the documents, very strong ground ought to be shown before he would be
justified in going behind the certificate of the Board and he refused to do so.
His order was upheld on appeal, the court refusing to reverse the exercise of
discretion below.
There is no such discretionary
statutory provision applicable to the case at bar, but apart from that
consideration, there are two matters to be noted. The first is the observation
of Romer L.J., at p. 353:
The question now before us is
not necessarily the same as that which may possibly arise upon the hearing of
the misfeasance summons if the judge has then to consider the question of a
subpoena for the production of these documents.
The other is that the provisions
of the statute there in question, namely, the Income Tax Act of 1842, 5-6
Victoria, c. 35, are not the same as those of the Canadian statute. Sections 38
and 189, unlike s. 121 of the Canadian statute, contain no exception with
respect to communication.
[Page 492]
Apart from the statutory
provisions to which I have referred, our attention was not called to any
others, federal or provincial, having any relevancy.
For these reasons therefore, I
would answer question 1(a) and (b) in the affirmative, unless special facts or
circumstances appearing on the minister's affidavit make it clear that there
might be prejudice to the public interest in the disclosure, but only to the
extent of the document or documents within the special facts or circumstances.
As to question 2, it was held by
Wills J. in Hennessy v. Wright, ubi cit, at p. 523, that whether
documents with respect to which the privilege on the ground of public policy
exists are the property of the Crown rather than the property of the witness is
immaterial. The question remains the same. This is indicated also by Viscount
Simon in the Cammell Laird case at p. 591, where he said:
The question which we have
to decide can only arise as a matter of law in England in cases where a
subpoena is issued to a minister or department to produce a document (usually,
but not necessarily, in a suit where the Crown is not a party), or where it
intervenes in a suit between private individuals (as is the present case) to
secure, on the ground of public interest, that documents in the hands of one of
the litigants should not be produced. A similar situation might conceivably
arise in litigation between the Crown and a subject where it was considered
necessary to prevent the subject from producing a document in his possession on
the ground that this would be injurious to public interests.
I would therefore answer that the
documents are in the possession of the official to the extent that the court
may order them produced in court pursuant to subpoena.
As to question 3, the minister
has no right to object to the production of the documents.
Subject to the variations
involved in these answers, the appeal should be dismissed.
ESTEY, J.:—The questions are
restricted to a trial of an indictable offence, where a subpoena duces tecum
has been served on the appropriate income tax official to produce before the
court returns, reports, papers and documents filed pursuant to the provisions
of the Income Tax Act, the Income War Tax Act or the Excess
Profits Tax Act, 1940, and to give evidence relating thereto as to which
the Minister of National Revenue has stated on oath that in his opinion such
evidence and the production of such returns, reports, papers and documents
would be prejudicial to the
[Page 493]
public interest (a) when such
subpoena is served at the instance or on behalf of the Attorney-General of a
province and (b) when such subpoena is served at the instance or on behalf of
the accused.
That considerations of public
safety and security require that the utmost secrecy be maintained with respect
to certain documents and information in relation thereto in the possession of
the Crown has long been recognized. The courts, in the administration of
justice, have accepted, as part of their duty, the maintenance of that secrecy
and have not required either be adduced in evidence. The basis of the rule is
stated by Lord Blanesburgh in Robinson v. State of South Australia:
As the protection is claimed
on the broad principle of State policy and public convenience, the papers
protected, as might have been expected, have usually been public official
documents of a political or administrative character. Yet the rule is not
limited to these documents. Its foundation is that the information cannot be
disclosed without injury to the public interests and not that the documents are
confidential or official, which alone is no reason for their non-production.
and by Viscount Simon in Duncan
v. Cammell, Laird & Co.:
The principle to be applied
in every case is that documents otherwise relevant and liable to production must
not be produced if the public interest requires that they should be withheld.
We are here concerned only with
documents and information associated therewith filed pursuant to the
requirements of the above-named statutes. Issues are constantly being tried
before our courts relative to the liability of the taxpayer as well as
prosecutions for the failure to perform duties imposed by these statutes.
Accordingly, such documents and information in relation thereto have been
repeatedly before the courts without any suggestion that the public safety or
security has been at all imperilled; nor does there appear to be any reason in
principle why these documents and information in relation thereto should, under
ordinary circumstances, not be disclosed. It must follow that as a class these
documents, in the ordinary course, do not involve questions of safety or
security and as such their production would not be prevented upon the basis of
public interest.
[Page 494]
There may, however, with respect
to one or more of these documents and information in relation thereto, be
special circumstances which the minister may consider such as to require his
taking the objection in respect of these particular documents. It is,
therefore, pertinent to consider, in that event, the procedure to be followed.
We were referred to a great many
authorities under which the rule has long been recognized but in which there
has been much difference of judicial opinion as to the manner in which the
objection to produce such documents ought to be made and the respective
functions of the minister and the judge. More recent authorities appear to have
established that the objection must be made by the minister presiding over the
department, commission, board or other body in whose custody the documents, the
production of which is requested, are held. Before making the objection the
minister should acquaint himself with the facts and, as a responsible minister
of the Crown, decide whether the production of these documents, or evidence in
relation thereto, would or would not be detrimental to the public interest. If
he comes to the conclusion that their disclosure would be detrimental, it would
appear that the more convenient procedure would be that he embody in an
affidavit sufficient of the facts to indicate the nature of his objection and
that he, as a responsible minister of the Crown, has concluded that their
production, or information in relation thereto, in a court of law would be
detrimental to the public interest.
The presiding judge, who, upon the
affidavit, is satisfied that the production of these documents and information
in relation thereto might be detrimental to the public interest, would give
effect to the minister's objection.
The different opinions expressed
by the authorities as to the right of a presiding judge to examine the
documents appear to have been resolved by the observations of Viscount Simon in
the Cammell, Laird case, supra. There the House of Lords expressly
disapproved of the practice followed in Robinson v. State of South
Australia, supra, where the Judicial Committee "remitted the case to
the Supreme Court with the direction that it was one proper for the exercise of
the court's power of inspecting documents to determine whether their production
would be prejudicial to the
[Page 495]
public welfare". This view
but emphasizes the fact that the documents and information in relation thereto
to which the rule applies are such that neither should, by order of a court, be
required to pass out of the possession of those officials of Her Majesty who
are charged with their custody.
The Cammel, Laird was a
civil case, but it would appear that the foregoing quotations and observations
taken from or founded upon this case are relevant to the trial of an indictable
offence.
Sections 81 of the Income War
Tax Act and 121 of the Income Tax Act, 1948 would appear to have
been placed in the statutes to assure that those charged with the
administration of the foregoing statutes would treat as confidential the
information contained in or filed in relation to these documents. The reason
and basis therefor is quite different and has no bearing on or relation to the
above-discussed rule founded upon the necessity of public safety and security.
In my opinion the questions
submitted should be answered as phrased by the majority of the Court and set
forth in the reasons of my brothers Rand and Kellock.
LOCKE J.:—I respectfully agree
with the opinion of the learned Chief Justice of British Columbia and with the
answers made by him to the questions referred to the Court of Appeal and would
accordingly dismiss this appeal.
CARTWRIGHT J.:Question No. 1 may,
at a first reading, appear to be ambiguous; but when it is considered in the
light of the arguments addressed to us by both counsel it becomes clear that it
is directed to a case in which the objection to the production of the documents
called for in the subpoena duces tecum is based not upon any apprehended
danger to the public interest from disclosure of the matter contained in the
particular returns and other documents of which production is sought but upon
the view entertained by the Minister that as a matter of public or departmental
policy he ought to object to the production from the custody of the department
of any income tax returns or correspondence relating thereto. The reason
assigned in support of this view is that, while the returns are made under
statutory compulsion, the taxpayers rely in making them upon an implied
undertaking
[Page 496]
that the department will treat
them as confidential communications and that it would be prejudicial to the
public interest that this implied undertaking should be dishonoured.
In my view there is nothing in
the acts referred to in the question which affirms the existence of any
representation or undertaking on the part of the department that its officials
will not produce the returns if called upon to do so by regular process issued
from a court in which the trial of an indictable offence is pending. Sections
81 and 121 of the Income War Tax Act do not assist the appellant on this
point. I agree with the view expressed by Barclay J. in Ship v.The
King
that the judicial officer presiding at the trial of a person charged with an
indictable offence is a person legally entitled to the information referred to
in those sections if the production of such information is duly called for by
subpoena and is relevant to the pending charge. For the purposes of the
question before us, such relevance is assumed.
It is said for the appellant,
however, that once the Minister has stated on oath that in his opinion the
production of such returns would be prejudicial to the public interest while it
is still the function of the court out of which the subpoena issued to decide
whether or not production shall be ordered that court must decide the question
by accepting the objection of the Minister as conclusive and giving effect to
it. It is argued that this conclusion flows irresistibly from the judgment of
the House of Lords in Duncan v.
Cammell Laird and Company.
In approaching this argument it is necessary to bear in mind the often quoted
words of Lord Halsbury in Quinn v.Leathem:
…Now, before discussing the
case of Allen v. Flood and what was decided therein, there are two
observations of a general character which I wish to make, and one is to repeat
what I have very often said before, that every judgment must be read as
applicable to the particular facts proved, or assumed to be proved, since the
generality of the expressions which may be found there are not intended to be
expositions of the whole law, but governed and qualified by the particular
facts of the case in which such expressions are to be found. The other is that
a case is only an authority for what it actually decides. I entirely deny that
it can be quoted for a proposition that may seem to follow logically from
[Page 497]
it Such a mode of reasoning
assumes that the law is necessarily a logical code, whereas every lawyer must
acknowledge that the law is not always logical at all.
It is at once apparent that the
facts with which the Law Lords were dealing in Duncan
v. Cammell Laird and Company
were altogether different from the assumed facts upon which the questions
before us are based. Moreover, as is pointed out by my brother Kellock,
Viscount Simon L.C. was careful to state (at page 633) that the judgment of the
House was limited to civil actions.
In the case at bar, in the
supposed state of facts, the Minister has not only asserted his objection but
has fully informed the Court as to the grounds upon which it is founded and
these appear to me to be grounds of the sort which Viscount Simon indicated (at
page 642) "would not afford to the Minister adequate justification for
objecting to production".
Perhaps unnecessarily, I wish to
emphasize that any opinion which I have expressed in the course of these
reasons is strictly limited to the supposed state of facts upon which the first
question, as I have interpreted it above, is based. Particularly, I do not
think we are called upon to express any opinion as to what would have been the
result if the objection of the Minister had been based on any other grounds
than those indicated above or as to whether, as the answer to Question 1 given
by the majority of the Court of Appeal in British Columbia might be thought to
suggest, there may be circumstances in which the judge presiding at the trial
of a person charged with an indictable offence may privately examine a document
sought to be introduced in evidence.
I would answer Question 1 (a) and
(b) as follows: Yes. This answer is however limited, as I have interpreted the
question to be limited, to a case in which the objection of the Minister is to
the production of any documents belonging to the class consisting of returns,
reports, papers and documents filed pursuant to the provisions of the Income
Tax Act, the Income War Tax Act or the Excess Profits Tax Act, 1940
on the ground that they belong to that class.
[Page 498]
I would answer Questions 2 and 3
as proposed by my brother Kellock.
Appeal dismissed.
Solicitor for the Attorney
General of Canada: F. P. Varcoe.
Solicitor for the Attorney
General of British Columbia: E. Pepler.
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