Berl Baron, Howard Baron, C.A., Steven Grossman and Interact Laser Industries Inc. v. Her Majesty the Queen, Attorney General of Canada and the Honourable Otto Jelinek in His Capacity as Minister of National Revenue, [1990] 1 CTC 84, 90 DTC 6040

Reed, J.:—This is yet another challenge to the search and seizure provisions set out in section 231.3 of the Income Tax Act, S.C. 1970-71-72, c. 63, as amended S.C. 1986, c. 6, section 121. It is argued that those provisions are invalid because: (1) subsection 231.3(3) allows no discretion to a judge to guard against abusive searches and seizures —it requires a judge to issue a warrant if satisfied that there are reasonable grounds to believe that an offence has been committed and that evidence of that offence is likely to be found in certain premises; (2) subsection 231.3(5) allows wholesale searches and seizures, without adequate authorization, and therefore does not meet the requirements of a constitutionally valid search and seizure power, as set out in Hunter v. Southam Inc., [1984] 2 S.C.R. 145; (3) the requirements under subsection 231.3(3) do not meet the requirements of Hunter v. Southam, supra because they only require that there be reasonable grounds to believe that an offence has been committed—this is a lesser test than one requiring that there be "reasonable and probable" grounds; (4) the provisions of section 231.3 offend section 15 of the Canadian Charter of Rights and Freedoms because there are two avenues by which warrants can be obtained (one through the superior court of a province, the other through the Federal Court) and the appeal provisions differ depending upon which route is chosen; (5) some of the particular warrants in question are invalid because they do not contain a clause protecting documents which are subject to solicitor-client privilege or which arise in the course of an accountant-client confidential relationship.

On agreement by all counsel, the motions and actions for declaratory relief set out in the files listed in the style of cause were dealt with together on September 21, 1989. The identical issue is raised in each.

Subsection 231.3 of the Income Tax Act provides as follows:

All but one of the plaintiffs' (applicants') arguments in this case have been dealt with, recently, by the Courts —either by the Federal Court of Appeal, the British Columbia Court of Appeal or the British Columbia Supreme Court. Applications for leave to appeal some of those decisions to the Supreme Court have been filed. Thus, the decision being asked of me is, in one sense, merely designed to hold the present cases in abeyance pending the outcome of the various appeals which are already under way.

No Discretion to Guard Against Abusive Search and Seizures

Counsel's first argument is that subsection 231.3(3) offends section 8 of the Charter because it requires a judge to issue a warrant if there are reasonable grounds to believe that an offence has been committed and if there are reasonable grounds to believe that evidence of that offence is likely to be found in the place which it is sought to search. Thus, counsel argues, the statute takes away from a judge the discretion, which he or she would otherwise have, to refuse warrants, which although they fall within the requirements of subsection 231.3(3), are abusive. Such situations, it is argued, might exist, for example, if numerous previous warrants had been obtained to search the same premises or when special conditions exist which make it advisable to add conditions to the warrant. See, for example, La Société Radio Canada v. Monsieur le juge Jacques Lessard (unreported) March 2, 1989, Montreal 500-10-00271-872; 500-36-000386-873 (C.A); Re Pacific Press Ltd. and the Queen (1977), 37 C.C.C. (2d) 487; 38 C.R.N.S. 295 (B.C.S.C.); F Ltée. c. Le Directeur de la Division des Enquêtes Spéciales du M.N.R. (unreported), (Que. C.S.) per Boilard, J.

This interpretation of subsection 231.3(3), as leaving no discretion with a judge to guard against abusive searches and seizures, relies on Madame Justice Desjardins' description of subsection 231.3(3) in Solvent Petroleum Extraction Inc. v. M.N.R., [1989] 2 C.T.C. 177; 89 D.T.C. 5381, aff'g [1988] 3 F.C. 465 (T.D.):

Subsection 231.3(1) states that "A judge may. . ." Subsection 231.3(3) states that "A judge shall. . ." It would therefore appear from the language of subsection 231.3(3) that if the issuing judge comes to the conclusion that the conditions of paragraphs 231.3(3)(a), (b) and (c) are met, he need not nor is he permitted to consider whether there has been a previous substantive voluntary compliance by the taxpayer, whether further documents might be remitted voluntarily, or whether the applicant for the warrants has taken all reasonable steps to obtain the information from an alternative source before applying for the warrants. In brief, if the conditions are met, he must issue the warrant.

The decision by the Federal Court of Appeal in the Solvent Petroleum case is directly applicable and binding for the purposes of this case. Leave to appeal that decision was refused by the Supreme Court on November 23, 1989 (S.C.C. file 21556).

The view, set out above, in the Solvent Petroleum case is similar to that expressed in McLeod and Red Lake Supermarkets v. The Queen (October 1987), (Ont. S.C.) (unreported). In Re Church of Scientology v. The Queen (No. 6) (1987), 31 C.C.C. (3d) 449 at 545 (Ont. C.A), it was held, with respect to subsection 446(1) of the Criminal Code [1] , that “shall” was mandatory. It was held, at page 545, that “shall” in subsection 446(1) could not be interpreted as being equivalent to "may":

. . . The learned motions court judge in R. v. Zaharia and Church of Scientology of Toronto (1985), 21 C.C.C. (3d) 118 at pp. 124-5, 5 C.P.C. (2d) 92 made the following statement with respect to this section:

To the extent that s. 446(1) is to be read as authorizing ex parte proceedings, it would have to be declared of no force and effect because of its violation of s.

8. In my view, however, it is not necessary to read the section in that way. Subsection 446(3) does not in terms require a hearing or notice when a justice is requested to act, but it is common that it is the actual practice to proceed by way of notice and hearing.

Similarly, it was submitted that the use of the word “shall” in s. 446(1) was an unwarranted fettering of the discretion of the officer who is to act judicially. In my view, the word should be construed as permissive rather than mandatory, and the section can stand.

So far as this ruling of the learned motions court judge is concerned, the appellant Scientology and the Crown agreed that he was in error in stating that the word “may” [sic] should be interpreted as “shall” [sic]. We agree that this was an error and, in our opinion, it led to a fundamental misconception on the part of the learned motions court judge as to the purpose and effect of s. 446(1).

In Re Hertel, [1987] 1 C.T.C. 15 (B.C.S.C.), however, it was held that Parliament really meant to say "may" instead of "shall" in subsection 231.3(6) of the Income Tax Act. And in Kourtessis v. M.N.R., 89 D.T.C. 5464; Mr. Justice Locke dealt with the argument as follows:

The next ground of constitutionality is that the words of s.231.3(1) and (3) are inconsistent with articles 7 and 8 of the Charter as no judicial discretion is reserved to the judge, which is said to be fundamental.

In Re Hertel (1986) 8 B.C.L.R. (2) 104, Bouck, J. had an application under s.231.3(6) that the documents or things seized be retained by the Minister of National Revenue until the conclusion of the investigation. That section reads:

(6) . . where any document or thing seized . . . is brought before a judge or a report in respect thereof is made to a judge, the judge shall, unless the minister waives retention, order that it be retained by the minister. . . .

He commented at some length on the thesis that the independence of the judiciary was at stake as no discretion was left in the trial judge. He solved it as did Osler, J. in Re Church of Scientology and R. (1985), 14 C.R.R. 303 by saying:

. . . in a like way, I propose to hold that Parliament really meant to say 'may' instead of ‘shall’ in s.231.3.(6) of the Income Tax Act. Such an interpretation leaves a discretion in the court as to whether items seized can be retained by the Income Tax Department when it applies for an order. . . .

In his view the doctrine of separation of powers of executive and judiciary was directly challenged, and he canvassed the existing decisions at some length, they going both ways in Canada, but the three American authorities he cited all held that the legislation was unconstitutional as an intrusion upon the judicial function since it completely removed from the judiciary the power to refuse the issue of a warrant in certain cases.

The ground of the interference with the independence of the judiciary was not argued before us, but I take due note thereof. The principal argument was based on Hunter v. Southam and its insistence upon the pivotal importance of the assessment by the judge. Section 231.3(1) and (3) was contrasted with s.443 of the Criminal Code which says:

. . . a justice who is satisfied by Information upon oath in Form 1 that there is reasonable ground to believe . .. may at any time issue a warrant under his hand authorizing a person named therein

(v) to search . . . and to seize. . . .

This was interpreted by the courts in Descoteaux v. Mierzwinski and A-G Quebec (1982) 1 S.C.R. 860 where Lamer, J. set out the arguments and gave his view on the jurisdiction of the court to attach conditions:

. . . Some would say that the justice of the peace has no discretion to refuse to issue a search warrant or to impose terms of execution once the requirements of form and substance in 5.443 have been met. They would argue that in s.443 the work [word] "may" means "must" and does not confer any discretion. According to this interpretation, the justice of the peace may issue a warrant only if he is satisfied that there is reasonable ground to believe that one of the things provided for in s.443(1) is to be found in the place sought to be searched, but must do so as soon as he is so satisfied, and the only condition of execution on the premises that he may impose is set out in s.444 of the Code:

444, A warrant issued under section 443 shall be executed by day, unless the justice, by the warrant, authorizes execution of it by night.

Others, on the contrary, would say that generally the justice of the peace has the discretion to refuse the warrant, so long as this discretion is exercised judicially and so long as the decision to refuse the warrant is not capricious or arbitrary.

The justice of the peace, in my view, has the authority, where circumstances warrant, to set out execution procedures in the search warrant. I would even go so far as to say that he has the right to refuse to issue the warrant in special cirumstances [sic], such as those found in Re Pacific Press Ltd. and The Queen et al., supra. . . .

Hunter v. Southam emphasized the crucial role of the independent arbiter— the judge—and set up an objective standard. The judge is the balance wheel between conflicting interests of the State on the one hand and the individual on the other. With this in mind I turn to an analysis of s.231.3. In abbreviated form it says:

. (1) a judge may on ex parte application, issue a warrant

(2) an application under s-s.(1) shall be supported by information on oath establishing the facts on which the application is based

(3) a judge shall issue the warrant referred to in s-s.(1) where he is satisfied that there are reasonable grounds to believe that

(a) . . .

(b) a document or thing that may afford of the commission of the offence is likely to be found, and

(c) the building . . . specified . . . is likely to contain such a document . . .

I am of the opinion these three subsections must be read together. The crucial function of the judge is to decide whether the facts before him are sufficient to warrant an intrusion of privacy. This is discretionary in the judge. In order to exercise his discretion, the guidelines are set out in s-s. (3). If the evidence fails the standards of s-s.(3), he will not be satisfied and will decline to issue the warrant. If the evidence is sufficient, the statute says he "shall" issue the warrant.

It is said that this deprives the judge of a discretion. It does not deprive him of the discretion as to whether the warrant should issue at all, and as to which he fulfils his balance wheel function. It does deprive him of a discretion as to whether the warrant in fact issues after he makes the primary essential decision.

One might ask rhetorically, and why not? Having made the primary decision, surely the figurative stamping of the piece of paper is unimportant. What the mandatory word does is to deprive the judge of the discretions argued for in Paroian—that it was unnecessary to issue the process because the Minister already had enough material. This is not for the court to say, but I do not feel that the standards of Hunter v. Southam have been defeated. The judge's crucial role has been fulfilled and nothing remains except to stamp the piece of paper. It is thus true that discretion has been impaired in an administrative aspect, but not at all to impair the judge's primary function. It is also plain he can always attach conditions to the manner of execution of the warrant, and this of his own motion under the doctrine of inherent jurisdiction.

I do not believe the independence of the judge is threatened : it is only he who has the power to decide whether the process will issue, and he has the opportunity of doing that. What follows is surplusage.

It is therefore my opinion that s.231.3 does not impair the court's discretion to fulfill its duties in its crucial role of acting as the independent arbiter between State and individual.

Counsel informed me that it was his information that leave to appeal the Kourtessis decision to the Supreme Court would be sought. It is clear, in any event, that there is not uniformity of opinion on whether or not subsection 231.3(3) allows discretion in a judge to refuse warrants which might be abusive.

Section 11 of the Intepretation Act, R.S.C. 1985, c. 1-21 was also cited to me:

11. The expression “shall” is to be construed as imperative and the expression "may" as permissive.

This section, however, adds little to the argument since it must be read in the light of subsection 3(1) of the Interpretation Act:

3. (1) Every provision of this Act applies, unless a contrary intention appears, to every enactment, whether enacted before or after the commencement of this Act.

If it is clear that the intention of Parliament was to leave discretion in a judge to refuse to issue a warrant when the search would offend section 8 of the Charter, then that interpretation would prevail, over the general rule of interpretation set out in section 11 of the Interpretation Act.

There is considerable jurisprudence which holds that "shall" can be either directory or mandatory. This jurispurdence might be relevant to the interpretation of subsection 231.3(3). More importantly, however, the Bill of Rights might play a role so as to require subsection 231.3(3) to be interpreted so as to preserve for a judge discretion, to refuse warrants, in the case of abusive searches and seizures. Section 2 of that Act when read together with section 1 requires:

Every law of Canada shall . . . be so construed and applied as not to abrogate, abridge or infringe . . . the right of the individual to life, liberty, security of the person . . .

Alternatively the Court's inherent power to control the abuse of its own process might operate to enable a judge to refuse to issue an abusive warrant. See generally: R. v. Young (1984), 13 C.C.C. (3d) 1 (Ont. C.A.); R. v. Miles of Music Ltd. (1989), 48 C.C.C. (34) 96 (Ont. C.A.) and section 50 of the Federal Court Act. These are all speculative arguments, however, and have not been addressed by counsel. Certainly, it seems to me a judge would strive against issuing an abusive warrant which offended section 8 of the Charter, if he or she knew, at the time the request was made, that the warrant was abusive. At the very least, I do not think subsection 231.3(3) precludes a judge from adding terms and conditions to a warrant sought. There is nothing in subsection 231.3(3) which says that a judge must issue a warrant in the exact terms in which it is sought.

The difficulty in this case is that there are no factual underpinnings to support the argument being made. There was no abusive search or seizure, contrary to section 8 of the Charter, in this case. Thus, the challenge to subsection 231.3(3), on the ground that there is no discretion left in the hands of a trial judge to guard against unconstitutional search and seizures, is academic. It is clear that some discretion is removed from a judge by subsection 231.3(3). For example, those aspects referred to by Madame Justice Desjardins (refusing a warrant because of prior voluntary compliance by the taxpayer or because no attempts had been made to obtain the information elsewhere). But there still may be authority to refuse warrants which would offend section 8 of the Charter. It is difficult to contemplate what form such warrants might take, however, in the absence of a concrete factual situation. It is simply unnecessary, for the purposes of this application, to decide the issue of interpretation which is raised. The searches and seizures in this case were not abusive. Accordingly, there is no need to address counsel's substantive argument on this point.

Wholesale search and seizures which are not properly authorized

The argument that subsection 231.3(3) indirectly allows for wholesale searches and seizures, without adequate authorization, was dealt with recently by the Federal Court of Appeal in the Solvent Petroleum Extraction case, supra. That decision was made in the context of the following jurisprudence. The Supreme Court, in Hunter v. Southam, supra, declared subsection 10(1) of the Combines Investigation Act invalid as being overbroad and as allowing searches and seizures without adequate independent prior authorization. Subsection 10(1) read:

10. (1) Subject to subsection (3), in any inquiry under this Act the Director [of Investigation and Research of the Combines Investigation Branch] or any representative authorized by him may enter any premises on which the Director believes there may be evidence relevant to the matters being inquired into and may examine any thing on the premises and may copy or take away for further examination or copying any book, paper, record or other document that in the opinion of the Director or his authorized representative, as the case may be, may afford such evidence.

The Chief Justice said, of this subsection, at page 160 of the Hunter decision :

If the issue to be resolved in assessing the constitutionality of searches under s. 10 were in fact the governmental interest in carrying out a given search outweighed that of the individual in resisting the governmental intrusion upon his privacy, then it would be appropriate to determine the balance of the competing interests after the search had been conducted. Such a post facto analysis would, however, be seriously at odds with the purpose of s. 8. That purpose is, as I have said, to protect individuals from unjustified state intrusions upon their privacy. That purpose requires a means of preventing unjustified searches before they happen, not simply of determining, after the fact, whether they ought to have occurred in the first place. This, in my view, can only be accomplished by a system of prior authorization, not one of subsequent validation.

A requirement of prior authorization, usually in the form of a valid warrant, has been a consistent prerequisite for a valid search and seizure both at common law and under most statutes. Such a requirement puts the onus on the state to demonstrate the superiority of its interest to that of the individual. . . .

And at page 167:

. . . The purpose of an objective criterion for granting prior authorization to conduct a search or seizure is to provide a consistent standard for identifying the point at which the interests of the state in such intrusions come to prevail over the interests of the-individual in resisting them. To associate it with an applicant's reasonable belief that relevant evidence may be uncovered by the search, would be to define the proper standard as the possibility of finding evidence. This is a very low standard which would validate intrusion on the basis of suspicion, and authorize fishing expeditions of considerable latitude. It would tip the balance strongly in favour of the state and limit the right of the individual to resist, to only the most egregious intrusions. I do not believe that this is a proper standard for securing the right to be free from unreasonable search and seizure.

At that time subsections 231(1) and (2) of the Income Tax Act governed searches made for the purposes of the Act:

(1) Any person thereunto authorized by the Minister, for any purpose related to the administration or enforcement of this Act, may, at all reasonable times, enter into any premises or place where any business is carried on or any property is kept or anything is done in connection with any business or any books or records are or should be kept, and

(a) audit or examine the books and records and any account, voucher, letter, telegram or other document which relates or may relate to the information that is or should be in the books or records or the amount of tax payable under this Act,

(b) examine property described by an inventory or any property, process or matter an examination of which may, in his opinion, assist him in determining the accuracy of an inventory or in ascertaining the information that is or should be in the books or records or the amount of any tax payable under this Act,

(c) require the owner or manager of the property or business and any other person on the premises or place to give him all reasonable assistance with his audit or examination and to answer all proper questions relating to the audit or examination either orally or, if he so requires, in writing, on oath or by statutory declaration and, for that purpose, require the owner or manager to attend at the premises or place with him, and

(d) if, during the course of an audit or examination, it appears to him that there has been a violation of this Act or a regulation, seize and take away any of the documents, books, records, papers or things that may be required as evidence as to the violation of any provision of this Act or a regulation.

(2) The Minister shall,

(a) within 120 days from the date of seizure of any documents, books, records, papers or things pursuant to paragraph (1)(d), or

(b) if within that time an application is made under this subsection that is, after the expiration of that time, rejected, then forthwith upon the disposition of the application,

return the documents, books, records, papers or things to the person from whom they were seized unless a judge of a superior court or county court, on application made by or on behalf of the Minister, supported by evidence on oath establishing that the Minister has reasonable and probable grounds to believe that there has been a violation of this Act or a regulation and that the seized documents, books, records, papers or things are or may be required as evidence in relation thereto, orders that they be retained by the Minister until they are produced in any court proceedings, which order the judge is hereby empowered to give on ex parte application.

The Federal Court of Appeal in F.K. Clayton Group Ltd. v. M.N.R., [1988] 1 C.T.C. 353; 88 D.T.C. 6202, at 357-58 (D.T.C. 6205-6) declared paragraph 231(1)(d) and subsection 231(2) to be invalid as not meeting the Hunter and Southam test:

Privacy, however, is not the only interest protected by section 8. As the reasons for judgment in Southam demonstrate, the rule requiring that searches be previously authorized by warrant had its origins in the need to protect property rights. In the present case, the appellants have an important property interest in the things seized which are, by definition, the books and records of the business carried on by them. I believe we should take judicial notice of the fact that the seizure of such books and records and their physical removal from the company’s business premises is bound to have the most serious repercussions on its ability to carry on its business.

All these things being considered, it is my opinion that the trial judge properly found paragraph 231(1)(d) and subsection 231(2) to be contrary to the guarantee against unreasonable search and seizure contained in section 8.

In the first place, the seizure, being warrantless, is prima facie unreasonable; it does not have the prior sanction of an impartial arbiter “capable of acting judicially"

Secondly, the legislation sets no objective standard against which to test the validity of the seizure. The words of paragraph 231(1)(d) authorize the official to make a wholly subjective assessment of the need to seize:

. if . . . it appears to him. . .

Thirdly, the standard which is set by the legislation is far too low, requiring only the appearance of a violation to justify the seizure.

Fourthly, it is my view that the scope of the seizure authorized by paragraph 231(1)(d) is too broad. As interpreted by the Minister, once a violation of the Act or Regulations has taken place, the paragraph authorizes the seizure of records that may be required as evidence as to the violation of any provision of the Act.

This is precisely the type of provision which has already been found by this Court to fall foul of section 8.

(footnotes omitted)

And in M.N.R. v. Kruger Inc., [1984] 2 F.C. 535; [1984] C.T.C. 506, the Federal Court of Appeal held subsection 231(4) to be invalid. Subsection 231(4) read:

(4) Where the Minister has reasonable and probable grounds to believe that a violation of this Act or a regulation has been committed or is likely to be committed, he may, with the approval of a judge of a superior or county court, which approval the judge is hereby empowered to give on ex parte application, authorize in writing any officer of the Department of National Revenue, together with such members of the Royal Canadian Mounted Police or other peace officers as he calls on to assist him and such other persons as may be named therein, to enter and search, if necessary by force, any building, receptacle or place for documents, books, records, papers or things that may afford evidence as to the violation of any provision of this Act or a regulation and to seize and take away any such documents, books, records, papers or things and retain them until they are produced in any court proceedings.

Mr. Justice Pratte, speaking for the majority of the Court, stated at page 512 (F.C. 549):

I would be ready to concede that, in certain circumstances, the fact that a taxpayer has committed a serious offence under the Income Tax Act may justify the inference that he probably also committed other offences under the Act. However, I cannot accept the general proposition that the mere fact that a taxpayer has, at a particular time, committed an offence under the Income Tax Act or the Regulations, however trifling that offence, affords sufficient justification for the general power of search and seizure conferred by subsection 231(4). In my view, that subsection violates section 8 of the Constitution Act, 1982 in that it contravenes the right of the taxpayer "to be secure against unreasonable search or seizure.”

The relevant provisions of the Income Tax Act were amended by S.C. 1986, c. 6. I will set out subsections 231.3(3), (4) and (5) of the present Act, again, for ease of reference:

(3) A judge shall issue the warrant referred to in subsection (1) where he is satisfied that there are reasonable grounds to believe that

(a) an offence under this Act has been committed;

(b) a document or thing that may afford evidence of the commission of the offence is likely to be found; and

(c) the building, receptacle or place specified in the application is likely to contain such a document or thing.

(4) A warrant issued under subsection (1) shall refer to the offence for which it is issued, identify the building, receptacle or place to be searched and the person alleged to have committed the offence and it shall be reasonably specific as to any document or thing to be searched for and seized.

(5) Any person who executes a warrant under subsection (1) may seize, in addition to the document or thing referred to in subsection (1), any other document or thing that he believes on reasonable grounds affords evidence of the commission of an offence under this Act and shall as soon as practicable bring the document or thing before, or make a report in respect thereof to, the judge who issued the warrant or, where the judge is unable to act, another judge of the same court to be dealt with by the judge in accordance with this section.

[Emphasis added]

As noted, the question of whether or not these provisions meet the Hunter v. Southam, supra, test was dealt with by the Federal Court of Appeal in the Solvent Petroleum case, supra. They were held to have done so.

. . . Finally, they say that the authorizing legislation being section 231.3 of the Income Tax Act is ultra vires on the basis that it contravenes the Charter and cannot support the warrants herein. Their attack is directed both towards a seizure of things referred to in the warrant (subsection 231.3(3)) and a seizure of things not identified in the warrant which the person executing the warrant “believes on reasonable grounds affords evidence of the commission of an offence under this Act” (subsection 231.3(5)).

In M.N.R. v. Kruger (1984), 2 F.C. 535 at 549 (F.C.A.) decided before the Supreme Court of Canada rendered its decision in Hunter v. Southam, [1984] 2 S.C.R. 145, this Court held that subsection 231(4) contravened section 8 of the Charter in that it gave the minister, when he believed one particular offence has been committed, the power to authorize a general search and seizure relating to the violation of any of the provisions of the Act or regulations made under it. (See also Vespoli v. The Queen (1984), 84 D.T.C. 6489 (F.C.A.) rendered the same day).

In The Queen v. Print Three Inc. (1985), 20 C.C.C. (3d) 392 (Ont. C.A.), decided after Hunter v. Southam, additional reasons were given by the Ontario Court of Appeal in support of the conclusion that subsection 231(4) was in contravention of section 8 of the Charter. It was said at 396:

In our view, there are additional reasons to those relied upon by the Federal Court of Appeal for holding the subsection to be in breach of s. 8. It is clear that to meet the standards of reasonableness there must first be an independent arbiter (judge) who is satisfied that there are reasonable grounds for believing that an offence has been committed (see Hunter et al v. Southam Inc., supra). In s. 231(4) and (5), it is the Minister who has to have the reasonable and probable grounds and there is no standard or conditions precedent set out for the judge on which to base his assessment of either the Minister's belief is properly founded. Mr. Kelly argued that the only reasonable construction of ss. 5 is that facts must be laid before the judge so he can be satisfied that the Minister has reasonable and probable grounds. Even if the selection could be so construed, there are, as we have noted, additional flaws in s. 231(4) and (5). There is no requirement that the Minister have grounds to believe that evidence is likely to be found at the place of the search and there is no requirement that he present [sic] such grounds to the judge. There is, equally, no direction as to what is to be issued by the judge in granting his “approval”. It is the Minister who issues what is, in essence, the warrant. Finally the Minister is not required in the authorization to specify the things to be searched for. (underlining added)

The present subsection 231.3(3) requires that the judge, who issues the warrant, be satisfied that the minister has reasonable ground to believe that an offence has been committed, that specified things are to be searched for and that the evidence is likely to be found at the place of the search indicated in the application. These conditions meet the deficiencies noted in the above decision with regard to the former subsections 231(4) and 231(5) . . .

With respect to subsection 231.3(5), the appellants submit that a parallel cannot be drawn between section 489 of the Criminal Code, R.S.C. 1985, c. C-46 and subsection 231.3(5) of the Income Tax Act in that the doctrine of “plain view" is inapplicable to a situation such as the present one where complex business documents are involved. Unlike a case where, upon entry, a police officer may see narcotics in open view, documents such as those contemplated by subsection 231.3(5) would require detailed examination by the authorities to determine whether they support a violation of the Act. Therefore the subsection provides for a "wholesale search" of a citizen's-home which is a principle repugnant to the provisions of sections 7 and 8 of the Charter.

The common law rule with regard to the “plain view” doctrine is that where, during the course of executing a legal warrant, an officer locates anything which he reasonably believes is evidence of the commission of a crime, he has the power to seize it (Ghani and others v. Jones (1970), 1 Q.B. 693 (C.A.) Lord Denning M.R. at 706; Chic Fashions (West Wales) Ltd v. Jones, [1968] 2 Q.B. 299 (C.A.) Diplock L.J. at 313; Reynolds and Another v. Commissioner of Police of the Metropolis, [1984] 3 All E.R. 649 (CA., C.D.) at 653, 659, 662; Re Regina and Shea (1983), 1 C.C.C. (3d) at 316. The principle is known here and in the United States (Texas v. Brown (1983), 75 L.Ed. (2d) 502) [4] . Seizure done in such a fashion has been held valid by the following courts: R. v. Longtin (1983), 5 C.C.C. (3d) 12 at 16 (Ont. CA.); R. v. Shea (1982), 1 C.C.C. (3d) 316 at 321-22 (Ont. H.C.J.).

In any event, the context in which the search for and seizure of “plain view" documents appears in the Act i.e. in the course of searching for and seizing business documents under a warrant which would obviously involve examination of documents by the searcher in order to determine whether their seizure is authorized by that warrant, suggests that the authority to seize other business documents not covered by the warrant meets the test of reasonableness and therefore of validity. . . .

That decision is binding for the purposes of this case.

Reasonable Grounds Is a Lesser Test Than Reasonable and Probable Grounds?

The plaintiffs’ (applicants') second argument is that subsection 231.3(3) is invalid because it requires that there be only reasonable grounds to believe that an offence has been committed before a warrant is issued. It is argued that since this is a lesser test than one requiring reasonable and probable grounds it does not meet the requirements of section 8 of the Charter.

This argument was dealt with, by the British Columbia Court of Appeal, in Kourtessis v. M.N.R., supra:

It is argued that the newly enacted s. 231.3 (3) is wounded fatally because of the omission of the words "and probable”:

. . . .A judge shall issue the warrant referred to . . . where he is satisfied that there are reasonable grounds to believe that. . .

Subject to what follows, there is no Canadian authority directly in point dealing with the question as to whether the words “reasonable” and “reasonable and probable” can necessarily be equated and one looks for general clues. Indefatigable appellant’s counsel supplied the court with a list of 54 Canadian statutes ranging from the Agricultural Products Standards Act to the Yukon Act each of which contain distinct search and seizure clauses and all of which contain provisions relating to the exercise of judicial discretion by the judge or other authority. The statutes were produced in support of another argument in this case, but for what it is worth, only two of those statutes used the standard “reasonable and probable grounds"—the Transportation of Dangerous Goods Act c. 36 and the Yukon Act c. Y2. On December 12, 1988, amendments were proclaimed of these last statutes presumably pursuant to the provisions of the Statute Revision Act" R.S.C. 1985, c. S-20, which permits the Statutes Revision Commission to make such alterations in language as may be required to preserve a uniform mode of expression. In any event, the words "and probable” were deleted from those statutes.

Section 443 of the Criminal Code (Information for a search warrant has always read, and now uses, the word “reasonable” only.)

The 1988 edition of Martin's Criminal Code sets out s. 455, which reads:

455. Anyone who, on reasonable and probable grounds believes that a person has committed an indictable offence may lay an Information. . .

The corresponding section in the 1989 edition of Martin, s. 504, omits the words "and probable”. In like manner, Form 2, the general form of Information, was amended by deletion. Section 10 of the Narcotic Control Act provides that a peace officer may:

. . . seize and take away any narcotic . . . in such place in which he reasonably suspects a narcotic is contained and the Justice (who is satisfied by information upon oath that there are reasonable grounds for believing that there is a narcotic . . . in any dwelling-house may issue a warrant. . . .

However, the word "probable" still appears in Form 7, the Warrant for Arrest, and in a number of other sections of the Criminal Code dealing in particular with the defence of self-defence.

In Hunter v. Southam at p. 158 the Chief Justice also said:

. . . The Fourth Amendment of the United States Constitution, also guarantees a broad right. It provides:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Construing this provision in Katz v. United States, 389 U.S. 347 (1967), Stewart J. delivering the majority opinion of the United States Supreme Court declared at p. 351 that 'the fourth amendment protects people, not places. Justice Stewart rejected any necessary connection between that amendment and the notion of trespass. With respect, I believe this approach is equally appropriate in construing the protections in s. 8 of the Charter of Rights and Freedoms .. . .

In R. v. De Bat (1986) 54 C.R. (3rd) 120 Martin, J.A. said, referring to Hunter v. Southam :

. . . The standard of "reasonable grounds to believe” and that of “probable cause", which is contained in the Fourth Amendment to the American Constitution are identical. The standard . . . is not to be equated with proof beyond a reasonable doubt or a prima facie case. The standard to be met is one of reasonable probability . . .

The Supreme Court has, on a number of occasions, referred to decisions of the United States and picks and chooses as to whether it will apply the reasoning, always taking care to say these cases are of limited use though their underlining philosophy is often illuminating. In an article to which we were referred, The Incredible Shrinking Fourth Amendment by Cyrus J. Wasserstrom [1984] 21 American Criminal Law Review 271 the author learnedly dissects varying changes of interpretation adopted by the Supreme Court of the United States over the many years since the declaration of the Fourth Amendment. At p. 306 the author says:

. . . Certainly, the phrase “probable cause" suggests a quantum of evidence at least sufficient to establish more than a fifty percent probability—at least some sort of more-likely-than-not or preponderance of the evidence standard. Although the Court has not expressed the probable cause requirement in these probabilistic terms, it has for years consistently stated the requirement in a way that suggests an even higher degree of probability.

For what the Court has said is that probable cause for an arrest exists where the evidence is “sufficient to warrant a prudent man in believing that the [suspect] had committed or was committing an offense.” And it has used the equivalent language to describe the quantum of evidence required to justify a search, i.e. that the police officer must reasonably believe that the evidence sought will be found in the place to be searched. Such a belief would clearly not be warranted if the facts available to the officer made it as likely as not that he was wrong. Probable cause interpreted in this way also has a very important virtue^-itsets a fixed and intelligible standard for the officer who is contemplating an evidentiary search or an arrest. It tells him that unless he thinks that the search will be not might be, successful, or unless he thinks that the suspect has, not might have, committed an offense, he must investigate further before he can search or seize evidence. . . . —

[Emphasis mine and the author's]

When I look at the comparative uniformity of Canadian Statute law in relation to search and seizure provisions I find that now in almost every case the word “reasonable” is used and not the words “reasonable and probable”. The appellant's argument on this point rests upon one paragraph in Hunter v. Southam as establishing a standard of conduct for the issuance of search warrants. I acknowledge that the word is used again, four years later, in Simmons, which purports to summarize Hunter, but five years earlier in Coopers & Lybrand, the word "probable" was not mentioned.

On a further consideration of Hunter v. Southam three other points arise. In the first place, s. 10(1) of the Combines Investigation Act then under consideration does not contain the word either "reasonable" or “probable”. Second, s. 443 of the Criminal Code —"reasonable cause" —is referred to both by Prownse, J.A. of the Alberta Court of Appeal and in the body of the Chief Justice’s judgment, without any apparent disapproval, and last, when the Chief Justice comments on s.443 of the Criminal Code and contrasts it with the American Bill of Rights at p. 167, he says:

. . . The phrasing is slightly different, but the standard in each of these formulations is identical . . .

In perspective I now find that the word "probable" has substantially vanished from the statutory jurisprudence of federal statutes. Why is this so? Is it for the sake of uniformity? Or have “reasonable and probable” been deemed to be the same? I do not agree that they are the same, and I refer to Wasserstrom's commentary previously cited.

I find the grounds of "reasonable" above entirely satisfactory in dealing with all matters other than search warrants. The invasion of a dwelling house has been commented on recently in this court in R. v. Parent (1989 unreported) and by the Supreme Court of Canada in Simmons. I find it disturbing to consider that if the word "reasonable" means that the applicant hopes to find something, but the words “reasonable and probable” means he expects to find it, that the lesser standard will do to invade a dwelling house.

If one takes the two phrases and reads them literally, side by side, I do not think the use of the word “reasonable” is enough.

However, if the words of Chief Justice Dickson "the phrasing is slightly different but the standard in each of these formulations is identical” referring to the American Constitution means anything, it must mean that the word can be subject to a gloss of interpretation. If, for instance, the word “reasonable” is to be interpreted to mean that the police officers must reasonably believe that the evidence sought will be found in the place to be searched, then I am content: this suggests a "more likely than not" standard. Less than this seems to me to be only an exploration, which should not be allowed.

Adhering to the literal view only would mean that all the search and seizure provisions in Canada should be set aside. Allowing a gloss would save them. However, I examine only one statute—the Income Tax Act. It is the judge who under s. 231.3(3) must be satisfied that there are reasonable grounds to believe that

(a) an offence under this Act has been committed; (b) a document or thing that may afford evidence of the commission of the offence is likely to be found; and (c) the building receptacle or place specified in the application is likely to contain such a document or thing.

It is important that (b) and (c) contain the word “likely”. This must come from the evidence before the judge. If he is then satisfied that the deponent believes that the document may "likely" be found on the premises, I think the more- probable-than-not test has been satisfied. So, in the last resort, I think the Hunter v. Southam test is satisfied.

Counsel argues that the Supreme Court, in R. v. Simmons, [1988] 2 S.C.R. 495 at 523 made it clear that the constitutional test was one of reasonable and probable grounds. This is so, he argues, despite the fact that in Hunter v. Southam, supra, at pages 158-59, the text was framed by reference to reasonable grounds only (at page 168 of Hunter v. Southam the test referred to was "reasonable and probable".)

The Federal Court of Appeal in Solvent Petroleum, supra, also dealt with this argument:

There is no doubt that subsection 231.3(3) meets these minimum standards. [1] I add that the possible difference between the words "reasonable and probable grounds" in the former subsection 231(4) and the words “reasonable grounds" subsection 231.3(3) was not argued as such before us as it was before Lysyk J. in Kourtessis and Hellenic Import-Export Company Limited v. Minister of National Revenue and Her Majesty the Queen in Right of Canada, B.C.S.C. No. CC 861644, August 16, 1988. I have no difficulty with the conclusion at which Lysyk J. has arrived. Having noted that the then section 443 of the Criminal Code? [2] spoke about “reasonable grounds" and that the Fourth Amendment to the United States Constitution [3] is different from section 8 of the Charter, the learned judge concluded at p. 14 of the unreported decision:

The sole standard explicitly supplied by s. 8 of the Charter is that of reasonableness. Authority does not establish and, in my view, principle does not commend the proposition contended for by the petitioners to the effect that absence of a statutory requirement for probable as well as reasonable grounds for belief is constitutionally fatal.

Counsel for the plaintiffs (applicants) argues that Madame Justice Desjardins, when writing the decision in Solvent Petroleum, supra, did not have the benefit of the Supreme Court's decision in Simmons, supra, nor did Mr. Justice Lysyk in Kourtessis, supra. It is argued that the Simmons decision requires that a contrary conclusion be reached to that which was reached in the Solvent Petroleum and in the Kourtessis cases.

I do not read the Simmons case in this manner. I do not understand the Supreme Court to have focused on the argument which counsel wishes to draw from that decision. The reasoning of Mr. Justice Lysyk is very compelling. It is hard to comprehend how one could have reasonable grounds for issuing a search warrant if reasonableness did not comprehend a requirement of probability. Counsel argues that the comments on this issue which are set out by the Federal Court of Appeal in Solvent Petroleum were dicta since that issue was not argued in that case. This may very well be true but, as I have already noted, the reasoning in Kourtessis is very persuasive and the Supreme Court decision in Simmons does not detract from it.

Charter of Rights—s. 15-Federal Court or Provincial Superior Courts—and Different Avenues

Counsel's fourth argument is that section 231.3 offends section 15 of the Charter because two methods for obtaining a warrant thereunder exist (from a judge of the Federal Court or from a judge of the superior court of the province).

S.231 In sections 231.1 to 231.6,

"judge" means a judge of a superior court having jurisdiction in the province where the matter arises or a judge of the Federal Court.

If a warrant is issued by a Federal Court judge that decision is appealable to the Federal Court of Appeal, (as is a decision under subsection 231.3(7) refusing to return documents seized under a warrant). Subsections 27(1) and 27(4) of the Federal Court Act provide:

27. (1) An appeal lies to the Federal Court of Appeal from any

(a) final judgment,

(b) judgment on a question of law determined before trial, or

(c) interlocutory judgment, of the Trial Division.

(4) For the purposes of this section, a final judgment includes a judgment that determines a substantive right except as to any question to be determined by a referee pursuant to the judgment. R.S., c. 10 (2nd Supp.), s. 27.

If a warrant is issued by a judge of the superior court of a province, the decision, in at least some provinces, will be considered to be non-final in nature and therefore not appealable to the Court of Appeal of the province: Kourtessis, supra; Bernstein c. Sa Majesté La Reine du Chef du Canada et le Procureur Général du Canada (November 8, 1988), Montreal 500-10-000210-888; 500-36-000170-889 (C.A). And, in Knox Contracting Ltd. v. The Queen, [1989] 1 C.T.C. 174; 89 D.T.C. 5075 (N.B.C.A), it was held that the issuing of a search warrant was an administrative act and part of the investigatory process and therefore not a decision subject to appeal. The New Brunswick Court of Appeal's decision focussed on the wording of subsection 231.3(3) which provides that a judge shall "issue a warrant” rather than "order a warrant to be issued”. Both the Knox and Bernstein decisions are under appeal to the Supreme Court of Canada (S.C.C. files 21271 and 21411 respectively).

In assessing this argument, it must be noted, firstly, that the differences in procedure do not arise solely as between the Federal Court and the superior courts of the provinces. Differences may also exist among the provincial superior courts themselves. For example, in Saskatchewan, The Court of Appeal Act, R.S.S. 1965, c. 72, section 6 gives the Court of Appeal jurisdiction in appeals "from any judgment, order or decision of a Court of Queen's Bench judge." In Nova Scotia, the Judicature Act, S.N.S. 1972, c. 2, section 35 gives the Court of Appeal jurisdiction over appeals from "any decision, verdict, judgment or order". The differences, which counsel allege constitute discrimination contrary to section 15 of the Charter, would seem to result, then, from the various provincial statutes, the rules of court issued thereunder, a difference in the jurisprudence as to whether a judge acting under section 231.3 of the Income Tax Act, is acting judicially or administratively, and a difference in the jurisprudence as to whether decisions under 231.3 are final or interlocutory.

Mr. Justice Lysyk dealt with this same argument in Kourtessis v. M.N.R., [1989] 1 C.T.C. 56; 89 D.T.C. 5214 (B.C.S.C.) at page 65 (D.T.C. 5219-20):

. . . I Will assume, without stopping to review the cases relied upon by Mr. Du Pont, that the rights of appeal with respect to s. 231.3 are not entirely uniform across Canada. If that is so, and even if one makes the further (large) assumption that the differences in question are capable of constituting “discrimination” within the meaning of s. 15(1) of the Charter, any such inequality in rights of appeal does not flow from the provisions of the impugned legislation itself. Accordingly, striking down the challenged enactment would not be an appropriate response to the problem. Other forms of relief to eliminate the alleged disparity in treatment were not proposed and consideration of them at this stage would be premature.

Lastly, counsel for the plaintiffs (applicants) called my attention to the Supreme Court's decision in R. v. Turpin (1989), 96 N.R. 115 (S.C.C.). That decision dealt with the fact that in Ontario a person accused of murder could not elect to be tried by judge alone. If the individual had been tried in Alberta, such an election would have been possible. The Supreme Court stated at page 156 of the Turpin decision:

Taking the above definition as the minimal content of the right to equality before the law found in s. 15 of the Charter, I would conclude that the impugned provisions deny the appellants equality before the law. The appellants wish to be tried by a judge alone but they are precluded from receiving such a trial by the combined force of ss. 427 and 429 of the Criminal Code. Section 430 of the Criminal Code, on the other hand, permits those charged with the same offence in Alberta to be tried by a judge alone. The appellants are accordingly denied an opportunity which is available to others, a denial which, as the Court of Appeal noted at pp. 299-300 C.C.C. could work to the disadvantage of the appellants:

And at page 158:

(b) Discrimination

Having concluded that the appellants have been denied at least one of the equality rights listed in s. 15 of the Charter, I must move to the next step and determine whether the denial can be said to result in discrimination. Differential treatment is permitted under s. 15 provided it is "without discrimination”. As McIntyre, J., stated in Andrews [at p.182 S.C.R.]:

A complainant under s. 15(1) must show not only that he or she is not receiving equal treatment before and under the law or that the law has a differential impact on him or her in the protection or benefit of the law but, in addition, must show that the legislative impact of the law is discriminatory.

And at page 159:

In determining whether there is discrimination on grounds relating to the personal characteristics of the individual or group, it is important to look not only at the impugned legislation which has created a distinction that violates the right to equality but also to the larger social, political and legal context. McIntyre, J., emphasized in Andrews [at p. 167 S.C.R.]:

For as has been said, a bad law will not be saved merely because it operates equally upon those to whom it has application. Nor will a law necessarily be bad because it makes distinctions.”

And at page 161:

. . . Differentiating for mode of trial purposes between those accused of s. 427 offences in Alberta and those accused of the same offences elsewhere in Canada would not, in my view, advance the purposes of s. 15 in remedying or preventing discrimination against groups suffering social political and legal disadvantage in our society. A search for indicia of discrimination such as stereotyping, historical disadvantage or vulnerability to political and social prejudice would be fruitless in this case because what we are comparing is the position of those accused of the offences listed in s. 427 in the rest of Canada to the position of those accused of the offences listed in s. 427 in Alberta. To recognize the claims of the appellants under s. 15 of the Charter would, in my respectful view, "overshoot the actual purpose of the right or freedom in question": see R. v. Big M Drug Mart Ltd., at p. 344 S.C.C..

I would not wish to suggest that a person's province of residence or place of trial could not in some circumstances be a personal characteristic of the individual or group capable of constituting a ground of discrimination. I simply say that it is not so here. . . .

In my view, then, the plaintiffs’ (applicants’) argument must fail. I agree with Mr. Justice Lysyk that, if discrimination exists, it is not the result of section 231 of the Income Tax Act and if there are to be remedies, they lie elsewhere than in declaring section 231.3 unconstitutional. Secondly, the Supreme Court decision in Turpin clearly indicates that the type of discrimination, if discrimination there be, which arises as a result of different procedures in different jurisdictions is not the type of discrimination which falls under section 15 of the Charter.

Solicitor/Client Privilege-Accountant/Client Privilege

Counsel's last argument is that the warrants, issued pursuant to the order of Mr. Justice Strayer on August 7, 1986, are invalid because they were not made subject to terms of execution designed to protect the right to confidentiality of their respective clients. This argument relates to the warrants which were issued allowing searches to be made of the offices of Baron & Abrams (barristers and solicitors) and Baron & Merton (chartered accountants).

I will deal first with the accountant-client privilege. Counsel notes that an accountant's obligation to maintain professional secrecy is statutorily recognized and is found in the Québec Charter of Human Rights and Freedoms, R.S.Q. 1977, c. C-12:

9. Every person has a right to non-disclosure of confidential information.

No person is bound to professional secrecy by law and no priest or other minister of religion may, even in judicial proceedings, disclose confidential information revealed to him by reason of his position or profession, unless he is authorized to do so by the person who confided such information to him or by an express provision of law.

The tribunal must, ex officio, ensure that professional secrecy is respected.

56. (1) In sections 9, 23, 30, 31 and 38, the word "tribunal" includes a coroner, a fire investigation commissioner, an inquiry commission, and any person or agency exercising quasi-judicial functions.

(2) In section 19, the word “salary” and "wages" include the compensations or benefits of pecuniary value connected with the employment.

(3) In the Charter, the word "law" or "act" includes a regulation, a decree, an ordinance or an order in council made under the authority of any act. 1975, c. 6, Ss. 56.

The relevant provisions of the Professional Code, R.S.Q. 1977, c. C-26, s. 87(3) and the Chartered Accountants Code of Ethics, R.S.Q. 1977, c. C-48 (section 3.02.25) were also cited:

87. The Bureau must make, by regulation, a code of ethics governing the general and special duties of the professional towards the public, his clients and his profession, particularly the duty to discharge his professional obligations with integrity. Such code must contain, inter alia:

(3) provisions to preserve the secrecy of confidential information that becomes known to the members of the corporation in the practice of their profession;

3.02.25. A member is bound to professional secrecy and he may not disclose confidential information revealed to him by reason of his position or profession, unless he is authorized to do so by the person who confided such information to him or by an express provision of law.

Counsel argues that it is the law of the province which governs what privileges apply in the context of litigation: see Deputy A.-G. of Canada v. Brown, [1964] C.T.C. 483; 64 D.T.C. 5296. In the case of Edmonds v. The Deputy A.-G. of Canada, [1980] C.T.C. 192; 80 D.T.C. 6201 (Qué. S.C.) and Normandin v. The Queen et al., (Court file #460-05-000044-888) an unreported judgment of the Québec Superior Court dated June 15, 1989, the Court referred to the relevant provisions of the Bar Act and the Québec Charter, in a case involving a solicitor-client privilege. Reference was also made to Le Recouvrement de l'impôt et des Droits de la Personne, [1983] 24 C.D. 457 at pages 473-74 and Me Marquis' article, Le Secret Notarial et le Fisc, 79R. du N.S. In St-Georges c. Procureur Général du Québec, [1988] R.D.F.Q. 86 at 91 ff per Gonthier, J. as he then was, it was held that accountant-client communications were protected insofar as Quebec law was concerned.

Even if I accept that the law of Quebec provides for an accountant-client privilege in the context of litigation. I am not persuaded that such a rule has been adopted with respect to federal income tax litigation. If such a rule was intended to apply one would expect to find it expressly so provided in either the Canada Evidence Act or the Income Tax Act.

In Missiaen v. M.N.R., [1967] C.T.C. 579; 68 D.T.C. 5039, Mr. Justice Primrose (S.C.) stated:

While no claim was made to privilege of the correspondence between the client and the chartered accountant acting for the Applicants, and there is no provision in the Income Tax Act to provide such privilege, it would appear there is some merit in such a claim. In re William W. Kask, 20 Dominion Taxes Cases 5374 (66 D.T.C. 5374), Wilson, C.J. succinctly sets out the principles upon which the solicitor-client privilege exists. Certainly, the chartered accountant with the client is in an analogous position to a solicitor and his client and it is rather strange that no privilege is accorded or claimed in such circumstances.

[Emphasis added]

And, Mr. Côté, in Le secret professionnel et l'expert-comptable, (1988) R.P.F.S., Vol. 10, No. 3, 449 one finds at pages 454-55:

En conclusion, tous les intervenants travaillant dans le domaine de la fiscalité, sauf peut-être ceux travaillant pour les deux paliers gouvernmentaux, ne pourront que se réjouir de l'avèvement de l'article 9 de la Charte et de son interprétation telle qu’énoncée dans l'arrêt St-Georges en ce qui a trait au secret professionnel de l'expert comptable. Il était de plus en plus évident pour les fiscalistes faisant de la planification fiscale, de la nécessité de reconnaître ce droit au secret professionel compte tenu de la relation étroite qui unit les expert comptables, les avocats fiscalistes et les clients ainsi que de l'information très privilégiée à laquelle l'expert-comptable a accès. Il ne reste qu'à espérer que le ministère du Revenu national reconnaîtra, lui aussi, ce droit au secret professionel dans sa législation ou

que les tribunaux, à défaut d'une telle reconnaissance par le fédéral, reconnaîtront l'application de l'article 9 de la Charte québécoise même au niveau de la législation fédérale. ll serait en effet malheureux que les contribuables du Québec ne puissent bénéficier au niveau fédéral du droit fondamental qu'est le secret professionnel.

[Emphasis added]

It is not at all strange that solicitor-client communications are privileged in so far as compellable evidence before the courts is concerned, while those between an accountant and client are not. The purpose of the solicitor-client privilege is to ensure free and uninhibited communications between a solicitor and his client so that the rendering of effective legal assistance can be given. This privilege preserves the basic right of individuals to prosecute actions and to prepare defences. As Mr. Justice Lamer indicated, in Descôteaux v. Mierzwinski, [1982] 1 S.C.R. 860; 141 D.L.R. (3d) 590, at 883, the privilege is recognized because it is necessary for the proper administration of justice. I do not think there is an overriding policy consideration, of this nature, in the case of accountant-client communication. An accountant may, as a matter of professional ethics, be required to keep communications and other information concerning his or her client confidential. But this is not founded upon a need to ensure an effective system of the administration of justice.

I turn then to the solicitor-client privilege. In Descôteaux, supra, Mr. Justice Lamer held at page 870:

It is not necessary to demonstrate the existence of a person's right to have communications with his lawyer kept confidential. Its existence has been affirmed numerous times and was recently reconfirmed by this court in Solosky v. The Queen, [1980] 1 S.C.R. 821, where Dickson J. stated (at p. 839):

One may depart from the current concept of privilege and approach the case on the broader basis that (i) the right to communicate in confidence with one's legal adviser is a fundamental civil and legal right, founded upon the unique relationship of solicitor and client, and . . .

Mr. Justice Lamer went on to say at page 875:

It would, I think, be useful for us to formulate this substantive rule, as the judges formerly did with the rule of evidence; it could, in my view, be stated as follows:

1. The confidentiality of communications between solicitor and client may be raised in any circumstances where such communications are likely to be disclosed without the client's consent.

2. Unless the law provides otherwise, when and to the extent that the legitimate exercise of a right would interfere with another person's right to have his communications with his lawyer kept confidential, the resulting conflict should be resolved in favour of protecting the confidentiality.

3. When the law gives someone the authority to do something which, in the circumstances of the case, might interfere with that confidentiality, the decision to do so and the choice of means of exercising that authority should be determined with a view to not interfering with it except to the extent absolutely necessary in order to achieve the ends sought by the enabling legislation.

4. Acts providing otherwise in situations under paragraph 2 and enabling legislation referred to in paragraph 3 must be interpreted restrictively.

The Descôteaux case dealt with a warrant issued, by a justice of the peace, pursuant to section 443 of the Criminal Code. It was held that a warrant to search a lawyer's office should not be issued, under that section, unless the justice of the peace had considered: (1) whether a reasonable alternative source of obtaining the information existed; and (2) if such did exist whether reasonable steps had first been taken to obtain the information from that source. These prerequisites, in my view, do not pertain to warrants issued under subsection 321.3(3) of the Income Tax Act. The statutory language precludes those qualifications being applied.

In the Descôteaux case, Mr. Justice Lamer also stated, however, that in cases where a lawyer's office is to be searched certain procedural safeguards must be provided for in the warrant. At page 891 he stated:

Moreover, even if the conditions are met [i.e., no alternative source available] the justice of the peace must set out procedures for the execution of the warrant that reconcile protection of the interests this right is seeking to promote with protection of those the search power is seeking to promote, and limit the breach of this fundamental right to what is strictly inevitable. .. . .

Generally speaking, where the search is to be made of a lawyer's office, in order to search for things provided for under para. (a), (b) or (c) of s. 443(1), the justice of the peace should be particularly demanding. . . . It will sometimes be desirable, as soon as the informant initiates proceedings, for the justice of the peace to see that the district Crown attorney is notified, if he is not aware of such proceedings, as well as the Bar authorities. With their assistance he should normally be more easily able to decide with the police on search procedures acceptable to everyone that respect the law firm’s clients’ right to confidentiality without depriving the police of their right to search for evidence of the alleged crime.

In this respect he could take guidance from the provisions of the Income Tax Act, 1970-71-72 (Can.) c. 63, s. 232, adapting them to fit the particular case, of course.

Moreover, the search should be made in the presence of a representative of the Bar, where possible.

And at page 893:

Before authorizing a search of a lawyer's office for evidence of a crime, the justice of the peace should refuse to issue the warrant unless he is satisfied that there is no reasonable alternative to the search, or he will be exceeding his jurisdiction (the substantive rule). When issuing the warrant, to search for evidence or other things, he must in any event attach terms of execution to the warrant assigned to protect the right to confidentiality of the lawyer's clients as much as possible.

[Emphasis added]

The plaintiffs (applicants) submit that the failure to incorporate such terms in the warrants in this case is fatal.

Counsel for the defendants (respondents) argues that it is not necessary to set out the conditions as prescribed in Descôteaux, when the warrants issue under section 231.3(3) of the Income Tax Act. This follows, it is said, because there is a code built into that Act designed to protect solicitor-client privilege. Subsections 232(3), (4) and (5) provide:

(3) 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.

(4) 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 solicitorclient 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) 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 issue as I understood it to be argued in front of me, then, is whether the provisions in section 232 are sufficient or whether execution procedures should also be set out in the warrant itself.

In my view, the statements of Mr. Justice Lamer indicate that the provisions in the Income Tax Act are not, in themselves, sufficient. Those provisions would be no protection in a case where a lawyer's office was searched in the presence of support staff only and no notice of the right to claim privilege given. The warrants in this case, contain nothing on their face which indicate that proper procedures for execution were provided for. At the same time, however, there seems little doubt that appropriate execution procedures were, in fact, followed. The reports made to Mr. Justice Strayer pursuant to section 231.3 of the Income Tax Act, indicate that a lawyer was present when the search was made and that claims for privilege were made pursuant to section 232 of the Income Tax Act. The documents for which privilege was claimed, by the lawyer, were placed in an envelope and turned over to Regent Doré as custodian. An application for determination as to whether the documents were properly subject to solicitor-client privilege was filed in the Superior Court of Quebec. That application was subsequently withdrawn. In this regard see the affidavit and report to a judge of Yvon Demers, dated October 30, 1986 (paragraphs 3(d) and 4) and the affidavit and report to a judge of Gilles Thériault, dated June 2, 1987, both on file T-1798-86. In such circumstances it cannot seriously be thought that the warrants in question should be declared invalid. My understanding of Mr. Justice Lamer's statements in Descôteaux is that what is required is that the proper procedure is in fact followed. That the procedure was not set out on the face of the warrant is not itself determinative.

For the reasons given the motions and applications in question will be dismissed. The defendants (respondents) shall recover their costs of these actions but one set of costs only.

Applications dismissed.