Donald,
J.:—The
issue
remaining
for
decision
in
this
petition,
brought
under
paragraph
232(4)(c)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act"),
as
amended,
relates
to
the
claim
of
litigation
or
"lawyer's
brief"
privilege
over
documents
described
in
paragraph
31
of
the
affidavit
supporting
the
petition
sworn
by
Howard
J.
Kellough,
barrister
and
solicitor,
which
states:
Since
March
1992
Fraser
&
Beatty
has
acted
for
Mr.
A.B.
in
connection
with
a
personal
tax
matter
that
relates
to
Mr.
A.B.’s
shareholdings
in
the
capital
of
client
Y.
Fraser
&
Beatty
has
in
its
possession
three
file
folders
belonging
to
client
Y
which
were
requested
by
Fraser
&
Beatty
in
order
to
assist
Fraser
&
Beatty
in
the
preparation
of
the
representation
of
Mr.
A.B.
in
his
personal
tax
appeal
and
not
in
any
way
in
connection
with
its
services
on
behalf
of
client
X
or
client
Y.
It
is
in
that
context
that
Mr.
A.B.
provided
these
materials
to
Fraser
&
Beatty.
Solicitor-client
privilege
is
claimed
with
respect
to
these
files
and
all
other
materials
contained
in
Fraser
&
Beatty
files
relating
to
the
representation
of
Mr.
A.B.
on
the
basis
that
it
is
part
of
Counsel's
brief
or
legal
advice
and
related
materials
in
providing
legal
advice
and
representation
to
Mr.
A.B.
personally.
To
the
extent
that
these
client
Y
file
folders
contain
materials
to
which
a
solicitor-client
privilege
would
not
attach
in
the
hands
of
client
Y,
copies
of
such
materials
have
been
made
available.
The
client,
Mr.
A.B.,
retained
the
firm
to
appeal
a
tax
assessment
that
disallowed
certain
deductions
claimed
by
him
in
connection
with
the
reorganization
and
recapitalization
of
Realwest
Energy
Corporation.
By
letter
dated
July
20,
1993,
the
Minister
of
National
Revenue
issued
a
"requirement"
pursuant
to
paragraphs
231.2(1
)(a)
and
(b)
of
the
Act
requesting
that
the
petitioner
provide
documents
concerning
this
transaction.
The
client
was
an
officer
of
Realwest
at
the
time
of
the
transaction,
as
well
as
a
partner
in
one
of
the
law
firms
that
worked
on
the
transaction.
Mr.
Kellough
of
Mawhinney
and
Kellough
(now
the
petitioner,
Fraser
&
Beatty)
had
the
overall
supervision
of
the
deal.
The
respondent
contests
the
claim
for
privilege
on
the
ground
that
it
is
unsupported
by
evidence
and
because
it
rests
upon
the
bare
assertion
of
Mr.
Kellough,
in
paragraph
31
of
his
affidavit,
that
the
client
gave
the
files
to
his
firm
for
a
litigation
purpose.
Counsel
for
the
respondent
argued
that
this
leaves
unanswered
the
question
whether
any
of
the
documents
in
the
files
were
irrelevant
to
the
tax
appeal.
If
those
documents
related
to
reorganization
of
Realwest,
then
they
should
be
disclosed
to
the
Minister.
On
the
day
of
the
hearing
of
the
petition,
I
adjourned
following
argument
for
several
hours
and
inspected
in
my
chambers
six
binders
of
documents
over
which
the
petitioner
claimed
"ordinary"
solicitor-client
privilege.
Later
that
day,
I
ruled
that
each
of
the
documents
was
privileged,
and
should
be
returned
to
the
petitioner.
With
respect
to
the
documents
for
which
litigation
privilege
is
claimed,
the
petitioner
took
a
different
approach:
instead
of
presenting
the
documents
for
inspection,
it
simply
asserted
that
all
of
them
must
be
privileged
having
been
gathered
in
by
the
law
firm
for
the
purpose
of
acting
for
the
client
on
the
tax
appeal.
Therefore,
no
inspection
was
necessary.
Subsection
232(3.1)
of
the
Act
provides
a
protection
for
lawyers
and
their
clients
when
the
Minister
issues
a
requirement,
the
fulfilment
of
which
would
involve
disclosure
of
documents
a
client
claims
to
be
privileged.
It
allows
the
lawyer
to
organize,
package
and
seal
the
documents
for
presentation
to
a
judge
under
procedures
set
out
in
subsections
(4)
and
(5)
of
section
232:
232(4)
Application
to
judge.
Where
a
document
has
been
seized
and
placed
in
custody
under
subsection
(3)
or
is
being
retained
under
subsection
(3.1),
the
client,
or
the
lawyer
on
behalf
of
the
client,
may
(a)
within
14
days
after
the
day
the
document
was
so
placed
in
custody
or
commenced
to
be
so
retained
apply,
on
three
clear
days’
notice
of
motion
to
the
Deputy
Attorney
General
of
Canada,
to
a
judge
for
an
order
(i)
fixing
a
day,
not
later
than
21
days
after
the
date
of
the
order,
and
place
for
the
determination
of
the
question
whether
the
client
has
a
solicitor-client
privilege
in
respect
of
the
document,
and
(ii)
requiring
the
production
of
the
document
to
the
judge
at
that
time
and
place;
(b)
serve
a
copy
of
the
order
on
the
Deputy
Attorney
General
of
Canada
and,
where
applicable,
on
the
custodian
within
6
days
of
the
day
on
which
it
was
made
and,
within
the
same
time,
pay
to
the
custodian
the
estimated
expenses
of
transporting
the
document
to
and
from
the
place
of
hearing
and
of
safeguarding
it;
and
(c)
if
he
has
proceeded
as
authorized
by
paragraph
(b),
apply
at
the
appointed
time
and
place
for
an
order
determining
the
question.
(5)
Disposition
of
application.
An
application
under
paragraph
(4)(c)
shall
be
heard
in
camera,
and
on
the
application
(a)
the
judge
may,
if
he
considers
it
necessary
to
determine
the
question,
inspect
the
document
and,
if
he
does
so,
he
shall
ensure
that
it
is
repackaged
and
resealed;
and
(b)
the
judge
shall
decide
the
matter
summarily
and,
(i)
if
he
is
of
the
opinion
that
the
client
has
a
solicitor-client
privilege
in
respect
of
the
document,
shall
order
the
release
of
the
document
to
the
lawyer,
and
(ii)
if
he
is
of
the
opinion
that
the
client
does
not
have
a
solicitor-client
privilege
in
respect
of
the
document,
shall
order
(A)
that
the
custodian
deliver
the
document
to
the
officer
or
some
other
person
designated
by
the
Deputy
Minister
of
National
Revenue
for
Taxation,
in
the
case
of
a
document
that
was
seized
and
placed
in
custody
under
subsection
(3),
or
(B)
that
the
lawyer
make
the
document
available
for
inspection
or
examination
by
the
officer
or
other
person
designated
by
the
Deputy
Minister
of
National
Revenue
for
Taxation,
in
the
case
of
a
document
that
was
retained
under
subsection
(3.1),
and
he
shall,
at
the
same
time,
deliver
concise
reasons
in
which
he
shall
identify
the
document
without
divulging
the
details
thereof.
The
petitioner
contends
that
no
useful
purpose
would
be
served
by
an
inspection
of
the
files
given
by
the
client
in
this
case
because
the
inspecting
judge
could
reach
no
other
conclusion
than
that
the
files
are
privileged.
It
says
that
such
a
conclusion
is
compelled
by
Hodgkinson
v.
Simms
(1988),
55
D.L.R.
(4th)
577,
33
B.C.L.R.
(2d)
129
(C.A.)
and
Hunt
v.
T
&
N
pic.
(1993),
77
B.C.L.R.
(2d)
391,
[1993]
4
W.W.R.
709
(C.A.).
At
page
589
(B.C.L.R.
142)
of
Hodgkinson,
supra,
McEachern,
C.J.B.C.
said:
It
is
my
conclusion
that
the
law
has
always
been,
and
in
my
view
should
continue
to
be,
that
in
circumstances
such
as
these,
where
a
lawyer
exercising
legal
knowledge,
skill,
judgment
and
industry
has
assembled
a
collection
of
relevant
copy
documents
for
his
brief
for
the
purpose
of
advising
on
or
conducting
anticipated
or
pending
litigation
he
is
entitled,
indeed
required,
unless
the
client
consents,
to
claim
privilege
for
such
collection
and
to
refuse
production.
The
appellants
in
Hunt,
supra,
attempted
unsuccessfully
to
distinguish
Hodgkinson;
the
judges
hearing
that
appeal
applied
the
principles
in
Hodgkinson.
As
I
understand
the
respondent's
position,
there
is
no
quarrel
over
the
legal
principles
governing
litigation
privilege;
the
point
is
simply
that
the
questioned
documents
should
be
inspected
to
ensure
that
they
fall
within
the
protected
category.
I
cannot
see
why
the
two
groups
of
documents,
those
relating
to
solicitor-client
privilege
and
litigation
privilege,
should
be
treated
differently.
The
Minister
never
gets
to
see
the
questioned
documents
before
the
Court
makes
a
determination
as
to
privilege.
The
scheme
of
the
Act
necessitates
an
examination
of
the
documents
by
a
judge
unless
the
privileged
nature
of
them
is
patently
obvious.
Unless
they
are
inspected,
there
will
be
no
independent
assessment
of
the
privilege
claim
and
overbroad
assertions,
although
made
in
perfectly
good
faith,
will
never
be
caught.
The
mere
statement
that
the
litigation
documents
came
to
the
firm
as
part
of
a
brief
for
a
tax
appeal
does
not
automatically
cloak
them
with
privilege.
I
find
that
they
have
to
be
examined
for
relevancy:
if
they
do
not
bear
upon
the
appeal
and
yet
fall
within
the
class
of
material
described
in
the
Minister’s
requirement
letter,
they
must
be
disclosed.
Paragraph
31
of
Mr.
Kellough’s
affidavit,
quoted
at
the
beginning
of
these
reasons,
concludes
with
the
statement
that
some
of
the
documents
from
the
client’s
files
have
already
been
disclosed
to
the
Minister.
This
shows
that
the
petitioner
had
engaged
in
a
sifting
process
and
found
documents
in
the
files
that
did
not
attract
litigation
privilege.
In
my
view,
the
Minister
is
entitled
to
a
judicial
inspection
of
the
documents
to
ensure
that
the
judgments
made
by
the
petitioner
on
privilege
are
correct.
The
fact
that
the
petitioner
winnowed
some
unprivileged
documents
from
the
client's
files
tells
strongly
against
its
contention
that
the
provenance
of
the
documents
determines
litigation
privilege,
not
the
nature
of
the
documents
themselves.
Simply
because
the
documents
came
to
the
firm
as
part
of
a
retainer
to
conduct
litigation
on
behalf
of
a
client
cannot
cloak
all
of
the
documents
with
privilege,
irrespective
of
their
individual
character.
This
is
not
a
case
like
Hodgkinson,
supra,
or
Hunt,
supra,
where
the
documents
in
question
were
obtained
and
assembled
by
the
lawyer
with
regard
to
a
specific
direction
or
purpose
in
fulfilling
the
mandate
from
the
client.
Here,
the
client
brought
in
everything
in
bulk
form
that
may
be
helpful
in
prosecuting
the
tax
appeal.
Accordingly,
I
find
it
necessary
within
the
meaning
of
paragraph
232(5)(a)
of
the
Act
to
inspect
the
documents
in
order
to
determine
the
question
of
litigation
privilege.
I
direct
the
petitioner
to
package
the
documents
and
present
them
to
me
along
with
any
explanatory
material
or
argumentation
it
thinks
necessary,
after
appropriate
notice
has
been
given
to
the
respondent.
The
petitioner
has
reserved
the
right
to
argue
that
any
document
found
not
to
be
protected
by
litigation
privilege
is,
nevertheless,
covered
by
ordinary
solicitor-client
privilege.
Order
accordingly.
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