Young,
P.C.J.
[Orally]:—At
the
close
of
the
Crown's
case,
the
defence
brought
a
motion
for
a
directed
verdict,
indicating
that
the
two
counts
before
the
court
do
not
apply
to
the
Crown's
case
and
the
evidence
therein.
The
test
for
a
directed
verdict
is
set
out
in
the
Mezzo
case
in
the
Supreme
Court
of
Canada
and
that
test
is
"whether
there
is
any
evidence
upon
which
a
reasonable
jury,
properly
instructed,
could
return
a
verdict
of
guilty.
That
is,
a
case
containing
evidence
on
all
essential
points
of
a
charge
which,
if
believed
by
the
trier
of
fact
and
unanswered,
would
warrant
a
conviction."
The
point
raised
appears
to
be
novel
in
the
sense
that
I
was
not
referred
to
any
reported
cases
dealing
with
charges
against
a
lawyer
under
subsection
232(3.1).
The
commentators
in
textbooks
and
otherwise
do
not
have
occasion
to
comment
extensively
on
this,
and
when
they
do,
appear
to
have
differences
of
opinion
about
the
meaning
of
subsection
232(3J).
There
is
much
to
be
said
for
the
position
of
both
the
Crown
and
the
defence
in
this
particular
case
and
that
is
what
makes
it
both
novel
and
interesting.
In
many
ways,
the
facts
are
not
complicated.
It’s
the
interpretation
of
the
facts
as
it
relates
to
the
charges
before
the
court
that
is
not
without
difficulty.
The
Department
of
National
Revenue
Taxation,
on
September
25,
1989,
by
letter,
sent
what
is
called
a
"requirement",
pursuant
to
the
Income
Tax
Act,
to
the
law
firm
of
Kingsmill,
Jennings,
who,
at
the
relevant
time,
were
solicitors
for
some
named
and
numbered
companies
with
which
a
Mr.
Schwartz
had
an
association.
The
"requirement"
is
set
out
in
Exhibit
One
in
these
proceedings.
The
important
point
of
Exhibit
One
is
the
request
that
pursuant
to
the
provisions
of
subsection
231.2(1)
of
the
Income
Tax
Act,
the
law
firm,
and
as
it
turned
out,
the
accused,
who
is
a
barrister
and
solicitor
with
the
law
firm,
were
required
within
30
days
of
the
date
of
the
letter
to
produce
documents
relating
to
the
named
and
numbered
companies
I've
referred
to.
And
to
quote
from
the
letter,
Exhibit
One,
page
1:
To
comply
with
this
requirement,
you
should
provide
the
information
and
produce
the
documents,
hereby
required,
to
an
officer
of
this
Department
who
will
attend
at
your
office
for
that
purpose.
Continuing
on
page
2:
Alternatively,
compliance
with
this
requirement
may
be
affected
by
mailing
the
documents
and
statement,
hereby
required,
by
registered
mail
to
the
undersigned
at
the
above-noted
address
within
the
time
specified
in
the
first
paragraph
of
this
requirement.
Now,
the
Crown's
position
is
that
Exhibit
One
satisfies
the
threshold
test
for
getting
subsection
232(3.1)
underway
and
that
Exhibit
One
is
clear,
especially
in
the
provision
that
I
have
referred
to:
"An
officer
of
this
department
.
.
.
will
attend
at
your
office
for
that
purpose",
to
trigger
the
application
of
subsection
232(3.1).
Mr.
Wilson,
on
behalf
of
the
Crown,
refers
to
the
language
of
that
Section
and,
in
particular,
"An
officer
is
about
to
inspect
or
examine
a
document
in
the
possession
of
a
lawyer.”
Mr.
Wilson
argues
that
common
sense
must
be
applied
to
that
Section,
and
indeed
any
section
of
the
Act,
and
that
the
Department
evinced
a
clear
intention
to
attend
and
to
inspect
and
examine
the
documents
that
turned
out
to
be
in
the
accused's
possession,
or
as
I
will
later
refer
to,
were
transferred
back
to
Mr.
Schwartz,
as
either
the
client
or
owner
responsible
for
the
document.
In
response
to
Exhibit
One,
the
"requirement",
the
accused,
on
behalf
of
his
law
firm
and
the
named
companies
and
the
numbered
companies
who
were
the
clients,
responded
with
a
letter
dated
October
25,
1989,
which
has
been
filed
as
Exhibit
Two
in
these
proceedings.
The
important
part
of
the
response
indicates
that
the
requirement
has
been
received,
Exhibit
One,
and
that
the
accused's
law
firm
were
solicitors
acting
for
the
named
and
numbered
companies,
as
clients.
There
was
an
indication
that
the
client
and
Mr.
Cappell
were
prepared
to
waive
solicitor
and
client
privilege
in
relation
to
some
documents,
but
not
others,
and
the
ones
that
privilege
was
claimed
for
are
noted
in
Exhibit
Two
and,
more
particularly,
are
set
out
in
numbered
paragraphs
one,
two
and
three
of
Exhibit
Two.
Mr.
Cappell
further
indicates
that
pursuant
to
subsection
232(2)
of
the
Income
Tax
Act,
the
clients
are
claiming
solicitor-client
privilege
and
pursuant
to
the
instructions
of
Mr.
Schwartz,
the
documents
were
referred
to
or
given
to
Mr.
Schwartz
and
that
even
if
the
accused
still
had
the
documents,
he
would
refuse
to
deliver
the
documents,
claiming
solicitorclient
privilege.
The
last
paragraph
of
Exhibit
Two
indicates:
We
have
considered
our
position
and
concluded
that
we
are
obliged
to
follow
the
instructions
given
and
we
have
therefore
handed
over
those
documents
to
Mr.
Schwartz.
For
greater
certainty,
we
advise
you
that
we
received
those
instructions
and
acted
upon
them
after
receiving
your
requirement
of
September
26,
1989.
So,
it
would
be
my
view
that
the
position
of
the
accused
was
carefully
considered
because
he
had
been
advised
in
Exhibit
One
of
the
potential
liability
under
various
provisions
of
the
Income
Tax
Act
for
noncompliance
with
the
"requirement".
Now,
it
was
this
response
of
Mr.
Cappell
that
triggered
the
prosecution
in
this
case,
the
prosecution
taking
the
view
that
once
the
notice
of
the
"requirement"
had
been
given
to
the
accused,
he
ought
to
have,
if
he
was
going
to
raise
solicitor-client
privilege,
kept
any
of
the
relevant
documents
for
which
privilege
was
claimed
and
sealed
and
preserved
them
for
a
court
to
make
a
proper
disposition,
according
to
the
statute.
Now,
the
essence
of
the
argument
presented
by
Mr.
Cooper
on
behalf
of
the
accused
is
that
subsection
232(3.1)
only
applies
where
the
Revenue
officer
is
present
and
about
to
inspect
or
examine
the
documents
and
that
the
provision
should
be
read
in
that
way
and
that
the
language
of
the
provision
supports
his
view.
The
Crown,
on
the
other
hand
as
I
mentioned
earlier,
indicates
that
there
was
a
continuing
intention
of
the
Revenue
to
inspect
and
examine
the
documents
referred
to
in
Exhibit
One
and
that
nothing
should
have
been
done
by
the
accused
to
frustrate
that
objective.
Mr.
Cooper
referred
to
the
commentary
of
Mr.
William
Innes
in
his
text
Tax
Evasion
in
Canada,
1987
Carswell,
at
page
49,
where
in
a
discussion
of
solicitorclient
privilege
in
relation
to
section
232
the
following
is
stated:
Where
an
officer
is
about
to
inspect
or
examine
a
document
under
Section
231.1
or
231.2,
the
procedure
is
varied
in
that
the
lawyer
must
seal
the
documents
in
the
presence
of
the
officer.
And
I
would
emphasize
the
words
“in
the
presence
of
the
officer.”
In
this
case
the
lawyer
is
required
to
retain
the
sealed
package
until
it
is
delivered
to
a
judge
or
otherwise
dealt
with
in
accordance
with
the
provisions
of
Section
232.
Mr.
Cooper
also
referred
to
a
number
of
Canadian
and
U.S.
authorities
about
the
meaning
of
"about
to".
And
without
referring
to
them
all,
I
would
simply
offer
the
opinion
that
"about
to"
is
related
to
the
factual
situation
that
is
being
discussed
in
the
individual
case.
On
behalf
of
the
Crown,
Mr.
Wilson
referred
to
Stikeman's
Canada
Tax
Service
and
at
page
232
of
the
material
presented
to
me,
Mr.
Wilson
referred
to
the
following
paragraph:
Subsections
232,
subsection
3
to
subsection
13,
provide
a
procedure
designed
to
ensure
the
secrecy
of
documents
in
respect
of
which
a
solicitor-client
privilege
would
be
upheld
by
a
superior
court
in
the
province
where
the
matter
arises.
When
an
officer
acting
under
authority
conferred
upon
him
by
or
under
Sections
231.1
to
231.3
seeks
to
inspect,
examine
or
seize
a
document
in
possession
of
a
lawyer,
the
lawyer
must,
if
the
document
is
to
be
protected,
claim
that
a
named
client
of
his
has
a
solicitor-client
privilege
in
respect
to
that
document.
The
procedure
differs
depending
upon
whether
the
offence
is
seeking
to
examine
or
inspect
the
document,
pursuant
to
either
Section
231.1
or
231.2
or
to
seize
the
document
pursuant
to
Section
231.3.
In
either
case,
the
lawyer
must
be
given
a
reasonable
opportunity
of
making
a
claim
of
solicitor-client
privilege
before
a
document
is
inspected,
examined
or
seized
(s.s.
232(12)).
[Emphasis
added.]
So,
as
stated
by
the
Crown,
the
legal
issue
here,
and
really
it's
a
case
of
statutory
interpretation,
is
whether
“about
to"
in
subsection
232(3.1)
means
that
the
Revenue
officer
must
be
immediately
present,
which
is
the
defence
point
of
view,
or
as
the
Crown
suggests,
once
a
lawyer,
such
as
the
accused
in
this
case,
was
served
with
the
"requirement",
the
"about
to
inspect"
feature
of
subsection
232(3.1)
has
been
satisfied
and
the
lawyer
must
conduct
himself
accordingly.
Mr.
Wilson,
on
behalf
of
the
Crown,
laid
great
emphasis
on
the
construction
of
the
various
sections
that
I
have
referred
to,
to
make
sense
and
to
be
read
reasonably.
In
examining
the
provisions
of
the
Income
Tax
Act
from
section
231.1
onwards
through
to
the
offence
section,
section
238,
it
is
clear
that
the
Department
of
National
Revenue
Taxation
has
many
options
open
to
it
in
order
to
inspect
and
obtain
documents.
They
can
be
proceed
by
"requirement",
under
section
231.2.
They
can
proceed
by
search
warrant
under
section
231.3.
And
there
are
penalties
for
failing
to
comply
with
these
different
requests
made
by
Revenue
Canada.
As
Mr.
Cooper
pointed
out,
there
are
also
defences
available
to
a
lawyer
who
claims
solicitor-client
privilege.
For
example,
subsection
232(2)
provides
that
"Where
a
lawyer
is
prosecuted
for
failure
to
comply
with
a
requirement
under
section
231.2
.
.
.",
which
is
the
"requirement"
section,
.
.
.
with
respect
to
information
or
a
document,
he
shall
be
acquitted
if
he
establishes
to
the
satisfaction
of
the
court
(a)
that
he,
on
reasonable
grounds,
believed
that
a
client
of
his
had
a
solicitorclient
privilege
in
respect
of
the
information
or
document;
and
(b)
that
the
lawyer
communicated
to
the
Minister,
or
some
person
duly
authorized
to
act
for
the
Minister,
his
refusal
to
comply
with
the
requirement
together
with
a
claim
that
a
named
client
of
the
lawyer
had
a
solicitor-client
privilege
in
respect
of
the
information
or
document.
That
is
the
provision
that
Mr.
Cappell
purported
to
act
under
in
this
particular
case.
In
trying
to
ascertain
the
meaning
of
subsection
232(3.1),
and
the
scheme
of
the
Act,
in
my
view,
it
is
helpful
to
look
at
subsection
232(3).
That
subsection
provides
that:
Where,
pursuant
to
section
231.3,
an
officer
is
about
to
seize
a
document
in
the
possession
of
a
lawyer
and
the
lawyer
claims
that
a
named
client
of
his
has
a
solicitor-client
privilege
in
respect
of
that
document,
the
officer
shall,
without
inspecting,
examining
or
making
copies
of
the
document,
(a)
seize
the
document
and
place
it,
together
with
any
other
document
in
respect
of
which
the
lawyer
at
the
same
time
makes
the
same
claim
on
behalf
of
the
same
client,
in
a
package
and
suitably
seal
and
identify
the
package;
and
(b)
place
the
package
in
the
custody
of
the
sheriff
of
the
district
or
county
in
which
the
seizure
was
made
or,
if
the
officer
and
the
lawyer
agree
in
writing
on
a
person
to
act
as
custodian,
in
the
custody
of
that
person.
Now,
much
of
the
language
in
the
subsection
I
have
just
referred
to
repeats
itself
in
subsection
232(3.1),
although
the
Department
is
acting
pursuant
to
different
provisions,
and
in
particular,
sections
231.1
and
231.2.
But
a
reading
of
subsection
232(3.1)
convinces
this
court
that
the
language
therein
refers
to
the
Revenue
Officer
being
present
at
the
time
the
inspection
or
examination
is
made,
much
as
it
is
in
the
subsection
232(3)
that
I’ve
just
referred
to.
And,
in
particular,
subsection
232(3.1)
says:
di
.
.
an
officer
is
about
to
inspect
or
examine
a
document
in
the
possession
of
a
lawyer
and
the
lawyer
claims
that
a
named
client
of
his
has
a
solicitor-client
privilege
in
respect
of
that
document,
the
officer
shall
not
inspect
or
examine
the
document
and
the
lawyer
shall
.
.
."
and
I
won't
go
on
to
quote
subsection
(a)
and
(b)
at
the
moment.
But,
that
language
clearly
suggests
to
this
Court
that
both
the
lawyer
and
the
Revenue
officer
are
present
because
it
says
”.
.
.
the
officer
shall
not
inspect
or
examine
the
document
and
the
lawyer
shall
.
.
."
And
now
I
would
refer
to
subsection
(a)
and
(b):
(a)
Place
the
document,
together
with
any
other
document
in
respect
of
which
the
lawyer
at
the
same
time
makes
the
same
claim
on
behalf
of
the
same
client,
in
a
package
and
suitably
seal
and
identify
the
package
or,
if
the
officer
and
the
lawyer
agree,
allow
the
pages
of
the
document
to
be
initialed
and
numbered
or
otherwise
suitably
identified;
and
(b)
retain
it
and
ensure
that
it
is
preserved
until
it
is
produced
to
a
judge
as
required
under
this
section
and
an
order
is
issued
under
this
section
in
respect
of
the
document.
In
my
opinion,
the
description
of
the
procedures
to
be
taken,
as
outlined
in
the
section,
refer
to
actions
to
be
taken
while
the
officer
and
the
lawyer
are
present
so
that
it
is
clear
what
documents
are
going
into
the
package,
how
they
are
to
be
initialed
and
numbered,
or
otherwise
identified.
And
the
Revenue
officer
is
there
to
see
that
the
document
is
suitably
sealed
and
identified.
So,
while
at
first
blush,
it
may
seem
that
a
lawyer
might
be
able
to
frustrate
the
clear
intentions
of
the
Department
of
National
Revenue
to
come
to
a
lawyer's
office
on
notice
and
to
have
these
documents
there
sealed
and
ready
to
be
picked
up,
in
my
opinion,
the
clear
language
of
the
section
does
not
relate
to
such
a
procedure.
So,
in
the
result,
I
would
hold
that
subsection
232(3.1)
does
not
apply
to
the
facts
established
by
the
Crown's
case.
Subsection
232(3.1)
applies
to
a
situation
where
the
Revenue
Officer
is
physically
present
with
the
lawyer.
Since
that
is
not
the
evidence
in
this
case,
an
essential
ingredient
relating
to
the
charge
is
missing.
The
motion
for
directed
verdict
is
granted
and
the
charge
is
dismissed.
Case
dismissed.
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