Her Majesty the Queen v. Peel Air Services Limited and John Pearson, [1993] 1 CTC 71, 92 DTC 6553

Belleghem, J.:—From 1987 to 1989, Revenue Canada investigated the defendants for possible breaches of the Income Tax Act, R.S.C. 1952, c. 148 (am.

S. C. 1970-71-72, c. 63) (the "Act"). On July 5, 1989, a search warrant under subsection 231(3) of the Income Tax Act was obtained to seize the defendants' records. On August 3, 1989, the records were seized pursuant to the subsection 231(3) warrant. R. v. Baron, (unreported), S.C.C., November 28, 1990, held that the 231(3) seizure powers violated section 8 of the Charter. As a result, the seizure in this case became “ unreasonable”, presumably retroactively, but, at the very least, as of November 28,1990.

The information in this case charging the defendants with income tax evasion and making false statements was laid on January 21, 1991. No steps were taken from November 28, 1990, the date of the Baron judgment, to January 21, 1991, the date of instituting legal proceedings against the defendants in this case, either to return the documents or legitimize their seizure. Consequently, for this period of time, they were being retained "unreasonably" within the meaning of the Baron case.

On April 9, 1991, as evidence by the “notice of waiver”, tab 5, record, Revenue Canada, adverting to the above effect of Baron, decided to" waive . . . retention” of the documents pursuant to subsection 231.3(6) of the Income Tax Act, and decided that “the most prudent course of action would be to reseize the documents" pursuant to section 487 of the Criminal Code of Canada. No steps were taken from January 21, 1991 (the date of instituting proceedings) to April 9, 1991 (the date when Revenue Canada decided what course of action it would take) either to return the documents or to legitimize their retention.

The trial was scheduled to proceed November 25, 1991, before Judge Tak- ach. On October 10, 1991, more than six months after the notice of waiver was prepared, it was given to the accused. On October 16, 1991, Revenue Canada moved before a Justice of the Peace for a section 487 Criminal Code of Canada warrant for liberty to reseize the documents. No steps were taken from April 9, 1991 (when Revenue Canada had decided how to deal with the matter) until October 16, 1991 (when it brought its first application for a section 487 C.C.C. warrant) either to return the documents or to legitimize their retention other than as set out above.

The documents had by now been under" unreasonable search and seizure” retention for just short of a year and over two years if Baron is seen as applying retroactively to subsection 231(3) seizures.

The Justice of the Peace refused the s. 487 warrant. Revenue Canada then moved on October 22, 1991, before a Provincial Court Judge for a section 487 C.C.C. warrant but was again refused because the original 231(3) Income Tax Act warrant had never been quashed on an application by the accused nor rescinded at the instance of Revenue Canada. Presumably, the Provincial Court Judge must have determined that it would be an abuse of process to issue a warrant to replace an already outstanding warrant, the validity of which had not specifically been determined in these proceedings. Revenue Canada would certainly have been aware that the warrant, apparently being identical to the one in the Baron case, would be held to violate section 8. Then Revenue Canada would have to persuade the trial judge that to admit the documents would not bring the administration of justice into disrepute. In other words, Revenue Canada, from the date of the Baron case up to the present, had several options open, the last of which was to" take its chances" at trial to see if it could persuade a trial judge to admit the documents, notwithstanding the result in the Baron case, on the basis that to admit them would not bring the administration of justice into disrepute.

Faced with the refusal of the Justice of the Peace to issue a section 487 warrant and the refusal of the Provincial Court Judge to do likewise, Revenue Canada had the several options outlined by Judge Takach in his ruling and chose to follow the latter^ i.e., take its chances at trial. It could have re-moved for a section 487 warrant at various levels; it could have returned the documents or it could have gone to trial.

At trial, it argued that "in all the circumstances", even though the documents were now the continuing fruit of an unreasonable search and seizure, which had occurred 27 months earlier, the admission of the documents would not bring the administration of justice into disrepute.

Not surprisingly, Judge Takach held, at page 182 of his ruling, that "some action must be taken to legitimize conduct that is subsequently held to be inappropriate", and excluded the documents under section 24 of the Charter. Refusing to save their admission under section 1, he stated at page 181 of his ruling as follows:

In my view, the administration of justice will be brought into disrepute by judicial condonation of unacceptable action or inaction by prosecutorial agencies. Permitting evidence that had been unlawfully obtained and held where immediate specific action was possible to legitimize the seizure and retention, in my view, would bring the administration of justice into disrepute. This Court cannot condone the unlawful retention of documents of any person facing a charge even though the unlawful retention and possession was undertaken without evil intent or without malice. In this case, the retention of the documents, on the evidence before me, is attributable to nothing more than inaction, which I suspect in itself is or was caused by a number of factors. There is nothing in the evidence to indicate that there was any mala tides or blatant conduct or unfair tactics by Revenue Canada or the prosecution in the general sense. The short point, however, is that documents were in the possession of the investigatorial and prosecutorial authorities for a long period of time without judicial sanction or authorization. The law

It is common ground that the issue on this appeal is the soundness of the trial judge’s ruling, as set out above, on the admissibility of the documents pursuant to a consideration of the facts in light of the criteria set out in the decision of R. v. Collins, [1987] 1 S.C.R. 265, [1987] 3 W.W.R. 699, 33 C.C.C. (3d) 1. Was the ruling by Judge Takach unreasonable, did it demonstrate an error in principle or was it wrong in law?

Neither the principles as enunciated in the Collins case nor their applicability to the facts of this case are in dispute. The issue of whether the admission of the evidence would bring the administration of justice into disrepute is dealt with in the Collins case at pages 280-86, S.C.R. (C.C.C. 16- 21). Mr. Justice Le Dain makes the following observations.

At the outset, it should be noted that the use of the phrase “if it is established that" places the burden of persuasion on the applicant, for it is the position which he maintains which must be established. Again, the standard of persuasion required can only be the civil standard of the balance of probabilities. Thus, the applicant must make it more probable than not that the admission of the evidence would bring the administration of justice into disrepute.

It is whether the admission of the evidence would bring the administration of justice into disrepute that is the applicable test. Misconduct by the police in the investigatory process often has some effect on the repute of the administration of justice, but subsection 24(2) is not a remedy for police misconduct, requiring the exclusion of the evidence if, because of this misconduct, the administration of justice was brought into disrepute. Subsection 24(2) could well have been drafted in that way, but it was not. Rather, the drafts of the Charter decided to focus on the admission of the evidence in the proceedings, and the purpose of subsection 24(2) is to prevent having the administration of justice brought into further disrepute by the admission of the evidence in the proceedings. This further disrepute will result from the admission of evidence that would deprive the accused for a fair hearing, or from judicial condonation of unacceptable conduct by the investigatory and prosecutorial agencies. It will also be necessary to consider any disrepute that may result from the exclusion of the evidence.

The concept of disrepute necessarily involves some element of community views, and the determination of disrepute thus requires the judge to refer to what he conceives to be the views of the community at large.

In applying subsection 24(2), he suggested that the relevant question is: “Would the admission of the evidence bring the administration of justice into disrepute in the eyes of the reasonable man, dispassionate and fully apprised of the circumstances of the case?” The reasonable person is usually the average person in the community, but only when that community's current mood is reasonable.

The decision is thus not left to the untramelled discretion of the judge.

In determining whether the admission of evidence would bring the administration of justice into disrepute, the judge is directed by subsection 24(2) to consider “all the circumstances”. The factors which are to be considered and balanced have been listed by many courts in the country.

The factors that the courts have most frequently considered include:

— what kind of evidence was obtained?

— what Charter right was infringed?

— was the Charter violation serious or was it of a merely technical nature?

— was it deliberate, wilful or flagrant, or was it inadvertent or committed in good faith?

— did it occur in circumstances of urgency or necessity?

— were there other investigatory techniques available?

— would the evidence have been obtained in any event?

— is the offence serious?

— is the evidence essential to substantiate the charge?

— are other remedies available?

The trial is a key part of the administration of justice, and the fairness of Canadian trials is a major source of the repute of the system and is now a right guaranteed by subsection 11(d) of the Charter. If the admission of the evidence in some way affects the fairness of the trial, then the admission of the evidence would tend to bring the administration of justice into disrepute and, subject to a consideration of the other factors, the evidence gradually should be excluded.

It is clear to me that the factors relevant to this determination will include the nature of the evidence obtained as a result of the violation and the nature of the right violated and not so much the manner in which the right was violated. Real evidence that was obtained in a manner that violated the Charter will rarely operate unfairly for that reason alone. The real evidence existed irrespective of the violation of the Charter and its use does not render the trial unfair.

There are other factors which are relevant to the seriousness of the Charter violation and thus to the disrepute that will result from judicial acceptance of evidence obtained through that violation. As Le Dain, J. wrote in R. v. Therens, [1985] 1 S.C.R. 613, 18 D.L.R. (4th) 655, 18 C.C.C. (3d) 481, at page 652 (D.L.R. 686, C.C.C. 512):

The relative seriousness of the constitutional violation has been assessed in the light of whether it was committed in good faith, or was inadvertent or of a merely technical nature, or whether it was deliberate, wilful or flagrant. Another relevant consideration is whether the action which constituted the constitutional violation was motivated by urgency or necessity to prevent the loss or destruction of the evidence.

The final relevant group of factors consists of those that relate to the effect of excluding the evidence. The question under subsection 24(2) is whether the system's repute will be better served by the admission or the exclusion of the evidence, and it is thus necessary to consider any disrepute that may result from the exclusion of the evidence. In my view, the administration of justice would be brought into disrepute by the exclusion of evidence essential to substantiate the charge, and thus the acquittal of the accused, because of a trivial breach of the Charter. Such disrepute would be greater if the offence was more serious.

Applying the above principles in the Collins case to the case at bar, I am satisfied that the trial judge properly appreciated the facts and issues before him, that he properly understood the law, and that he properly applied the above directions from the Supreme Court of Canada to the facts of this case. The appellant has failed in its burden of persuasion to demonstrate that his ruling was either unreasonable, or fraught in any manner with an error in principle in law. The appeal from his ruling is accordingly dismissed.

Appeal dismissed.