Mahoney,
J:—The
applicants
move
by
Originating
Notice
of
Motion
for
an
order
removing
into
this
Court
the
seizure
and
continued
detention
of
certain
books
and
records
under
paragraph
231(1)(d)
of
the
Income
Tax
Act
and
for
an
order
that
the
said
seizure
and
continued
detention
be
quashed.
The
respondent
objects
to
the
procedure;
however,
his
objections
all
appear
to
have
been
considered
and
rejected
by
my
brother
Gibson
in
Royal
American
Shows,
Inc
v
MNR,
[1976]
1
FC
269;
[1975]
CTC
557,
and
I
cannot
now
consider
them
to
be
well
founded.
The
application
by
the
individual
applicant,
Joseph
Burnett,
was
withdrawn
because
none
of
the
books
and
records
subject
of
the
application
are
his.
It
is
pressed
by
the
remaining,
corporate,
applicants.
The
books
and
records
in
issue
were
seized
by
Gary
Edmond
Charles
Baker,
an
authorized
officer
of
Revenue
Canada
for
purposes
of
subjection
231(1)
of
the
Income
Tax
Act,
on
December
23,
1976
at
the
premises
of
‘O’
Division,
Royal
Canadian
Mounted
Police,
225
Jarvis
Street,
Toronto,
Ontario.
The
provisions
of
the
Income
Tax
Act
in
play
are
subsections
(1),
(2),
(4)
and
(5)
of
section
231:
231.
(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.
(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.
(5)
An
application
to
a
judge
under
subsection
(4)
shall
be
supported
by
evidence
on
oath
establishing
the
facts
upon
which
the
application
is
based.
The
material
facts
follow.
On
May
12,
1975
the
respondent’s
officers
obtained
and
executed
an
authorization
under
subsection
231(4)
to
enter
and
search
certain
premises
and
to
seize
and
take
away
the
books
of
certain
companies,
none
of
which
are
parties
to
these
proceedings
but
which,
it
appears,
shared
business
premises
with
the
applicants.
The
books
and
records
of
the
corporate
applicants
were
expressly
excluded
from
the
authorization.
On
or
about
July
24,
1975,
August
27,
1975
and
September
12,
1975
Constable
P
B
Cameron
of
the
Royal
Canadian
Mounted
Police
attended
at
the
same
premises
and
executed
successive
search
warrants
issued
to
him
on
those
dates
and
seized
the
books
and
records
of
the
corporate
applicants
that
are
the
subject
of
this
application.
The
offence
in
respect
of
which
the
search
warrants
were
all
issued
was
“theft
section
294(a)
Criminal
Code’’.
On
Tuesday,
December
21,
1976,
more
than
15
months
after
the
execution
of
the
last
search
warrant,
an
application
returnable
December
29
was
filed
in
Provincial
Court
in
Toronto
under
section
446
of
the
Criminal
Code
for
an
order
requiring
Her
Majesty
in
right
of
both
Canada
and
Ontario
to
show
cause
why
the
further
detention
of
those
documents
was
warranted.
At
about
6:20
pm
that
day,
shortly
after
being
notified
of
the
application,
a
solicitor
for
the
Attorney
General
of
Ontario
’phoned
the
applicants’
solicitor
and
informed
him
that
it
had
been
decided
not
to
institute
criminal
proceedings
against
the
applicant
Burnett
and
that
all
the
documents
would
be
returned
on
the
morning
of
Thursday,
December
23.
At
about
3:30
pm,
December
22,
the
applicants’
solicitor
’phoned
the
RCMP
and
was
advised
by
a
Sgt
Ross
that
all
the
books
and
records
in
their
possession
were
being
sorted
and
packaged
and
would
be
delivered
the
next
day.
It
was
agreed
that
Sgt
Ross
would
’phone
the
next
morning
to
make
final
arrangements
for
delivery.
At
about
9:20
am,
December
23,
Sgt
Ross
’phoned
and
advised
the
applicants’
solicitor
that
all
documents
in
the
possession
of
the
RCMP
had
been
seized
and
removed
as
aforesaid.
The
facts
of
this
case
are
not
materially
different
from
those
considered
by
the
Federal
Court
of
Appeal
in
a
judgment
rendered
earlier
this
week.*
There
the
documents
seized
under
paragraph
231(1)(d)
were
taken
from
the
possession
of
the
Edmonton
City
Police,
having
been
seized
by
them
in
the
execution
of
search
warrants
obtained
in
respect
of
an
alleged
conspiracy
to
defraud.
The
Court
held,
Pratte,
J
dissenting,
that
an
order
made
under
subsection
231(2)
authorizing
the
retention
of
documents
so
seized
under
paragraph
231(1)(d)
was
made
without
jurisdiction
and
should
be
set
aside.
Le
Dain,
J,
with
Urie,
J
concurring,
said
[p
58]:
I
turn
then
to
the
question
of
whether
a
seizure
at
the
Edmonton
City
Police
Station
is
one
that
could
be
authorized
by
paragraph
231(1)(d).
In
my
opinion
paragraph
231(1)(d)
cannot
be
construed
to
mean
that
an
authorized
person
may
seize
and
take
away
any
documents,
books,
records,
papers
or
things
wherever
and
under
whatever
circumstances
he
may
find
them.
It
is
not
an
independent
and
unqualified
power
of
seizure.
The
object
of
subsection
231(1)
is
to
permit
a
person
authorized
by
the
Minister
to
enter
certain
places
for
the
purpose
of
making
an
audit
or
examination.
If
in
the
course
of
such
audit
or
examination
it
appears
to
him
that
there
has
been
a
violation
of
the
Act
or
regulations
he
may
seize
and
take
away
any
documents,
books,
records,
papers
or
things
that
may
be
required
as
evidence
of
such
violation.
It
is
a
power
of
seizure
that
arises
in
certain
defined
circumstances.
It
is
related
to
the
power
to
enter
for
the
purpose
of
audit
or
examination
and
is
necessarily
limited
in
its
potential
scope
by
that
power.
The
power
to
seize
can
only
be
validly
exercised
if
it
is
exercised
pursuant
to
an
entry
and
audit
or
examination
authorized
by
paragraph
231(1)(a).
The
Edmonton
City
Police
Station
is
obviously
not
a
place
where
any
business
is
carried
on
or
anything
is
done
in
connection
with
any
business
within
the
meaning
of
subsection
231(1).
Nor
do
I
think
that
it
can
be
said,
in
respect
of
the
things
seized
in
this
case,
to
be
a
place
where
books
or
records
are
or
should
be
kept
within
the
meaning
of
the
section.
The
sense
in
which
the
word
“kept”
is
used
must
be
that
which
is
indicated
in
section
230
of
the
Act,
which
imposes
the
obligation
to
“keep”
records
and
books
of
account.
It
must
refer
to
the
place
where
such
books
or
records
are
kept
or
should
be
kept
by
the
person
required
to
keep
them
according
to
section
230.
It
is
necessary
then
to
consider
whether
the
Edmonton
City
Police
Station
can
be
said
to
be
a
‘place
where
.
.
.
any
property
is
kept”
within
the
meaning
of
subsection
231(1).
On
the
English
version
of
the
section
I
might
be
disposed
to
read
these
words
as
qualified
by
the
words
“in
connection
with
any
business”,
but
the
French
version
of
the
section
excludes
that
construction.
Nevertheless,
in
the
context
of
subsection
231(1)
read
as
whole,
I
do
not
think
that
the
word
“property”
can
be
taken
in
its
broadest
sense.
It
would
not
appear
to
be
intended
to
cover
books
or
records,
which
are
separately
provided
for.
A
comparison
of
the
terms
of
paragraphs
(a)
and
(b)
of
subsection
231(1),
moreover,
suggests
that
“property”
is
used
in
the
section
in
a
sense
other
than
that
of
“books
and
records
and
any
account,
voucher,
letter,
telegram
or
other
document”.
It
is
my
conclusion
from
the
terms
of
paragraph
(b)
that
“property”
is
used
in
the
sense
of
physical
assets,
by
an
examination
of
which
the
accuracy
of
an
inventory
or
other
information
in
books
or
records
may
be
ascertained,
or
tax
liability
may
be
otherwise
determined,
but
not
the
material
which
forms
part
of
a
company’s
or
individual’s
records—in
other
words,
not
documentary
material.
The
places
specified
for
entry
in
subsection
231(1)
are
specified
with
audit
or
examination
in
view.
In
this
respect
subsection
231(1)
is
to
be
contrasted
with
subsection
231(4),
which
confers
a
power
of
entry
for
purposes
of
search.
There
is
no
material
before
me
upon
which
I
can
reasonably
conclude
that
the
premises
of
‘O’
Division,
Royal
Canadian
Mounted
Police,
were
premises
or
a
place
where
a
person,
thereunto
authorized
for
the
purposes
of
subsection
231(1),
is
authorized
to
enter
and
to
audit,
examine
and
seize
the
books
or
records
of
the
corporate
applicants.
It
follows
that
the
seizure
effected
was
not
one
which
the
Income
Tax
Act
authorizes
be
made
by
the
respondent’s
officials
on
his
authority
under
subsection
231(1).
Rather
it
was
a
seizure
which
may
be
made
only
with
the
prior
approval
of
a
judge
under
subsection
231(4).
That
approval
must
be
based
on
the
evidence
prescribed
by
subsection
231(5).
The
seizure
ought
to
be
quashed
and
the
documents
returned
forthwith
to
the
corporate
applicants.
They
may,
if
they
find
it
necessary,
submit
a
draft
order
and
move
for
judgment
on
the
basis
of
these
reasons.
Email this Content