V., [1960] CTC 37

SMILY, J. (Oral Ruling) :—W. F. Williams, Esquire, the Director of Income Tax, was served with a subpoena to produce on this trial the income tax returns made by the late Arthur William Miles, Senior, and the income tax returns made by the late Arthur William Miles, Junior, covering certain periods therein mentioned.

Mr. Williams has attended in Court pursuant to the subpoena, and I believe has brought with him income tax returns for the number of years for which they are available, but objects to producing them in evidence on this trial.

There is filed in support of that objection an affidavit by the Minister of National Revenue in the Government of Canada, one George C. Nowlan, Esquire, in which he says in part as follows, paragraph 10, of his affidavit:

“I have examined the said income tax returns of each of the said Arthur William Miles, Sr. and Arthur William Miles, Jr. and I have formed the opinion that they form part of a class of documents, the production of which would be contrary to public interest and I object to their production accordingly.”

And then paragraph 11:

“I have formed the opinion after examining the said income tax returns that the completeness and the accuracy of the information furnished in income tax returns would be prejudiced if the production of them was permissible pursuant to a subpoena and for these reasons the practice of keeping this class of document secret is, In my opinion, essential to. the proper functioning of the Income Tax Division of the Department of National Revenue and administration of the Income Tax Act.”

And paragraph 12 :

“For the same reasons I am of the opinion that it would be prejudicial to have the said W. F. Williams or any officer of the Department of National Revenue, Taxation Division, give oral evidence relating to information contained in the said income tax returns or received by him as a result of the operation of the Income Tax Act.’’

And in paragraph 13, is set out the objection I referred to in the following words:

“As such Minister of National Revenue I object to the production of the documents mentioned in the said subpoena or of the said W. F. Williams or of any officer of the said Department giving oral evidence relating to any information derived from the said returns or received pursuant to the said Act.”

Counsel has appeared on behalf of the Minister of National Revenue and presented argument in support of the objection which has been made.

The same or a similar question came before the Court in the case of Clemens v. Crown Trust Company, et al., [1952] O.W.N. 434. This was a motion by the Minister of National Revenue to set aside a subpoena served on the head of the Income Tax Division at Sudbury, or in the alternative to excuse the head of the Income Tax Division from compliance with the subpoena. There was filed there in support of the motion an affidavit of the Minister of National Revenue stating that in his opinion all reports, papers and documents filed with his Department in connection with the administration of the Income War Tax Act, the Excess Profits Tax Act and the Income Tax Act were of such a confidential nature that their production would be prejudicial to the public interest, and that accordingly he objected to their production.

The affidavit did not go quite so far as the affidavit in the ease at bar.

Judson, J., as he then was, as a member of the Supreme Court of Ontario, said this:

“Duncan, et al. v. Cammel, Laird and Company Limited, [1942] 1 All E.R. 587, decides this point. The objection of the Minister on the grounds of public policy to the produc- tion of the documents is conclusive, and I must give effect to it. I rule the same way as to any oral evidence about the contents of the documents. The plaintiff cannot compel production of his own income tax returns or those of the members of his family, namely, his father, mother, brother or sister.”

It will be observed that Judson, J., states that Duncan et al. v. Cammell, Laird and Company Limited decides this point.

Counsel for the plaintiffs in this proceeding on whose behalf the subpoena was issued contends that the case of R. v. Snider, [1954] S.C.R. 479; [1954] C.T.C. 255, in effect overrules, or would overrule the judgment of Judson, J., and that this case decides that such documents may be ordered produced by the Court, and that the Court may order the giving of oral evidence relating thereto to enable the Court to determine whether the facts discoverable by the production of the documents would be admissible, or unless special facts and circumstances appearing from the affidavit make it clear to the Court there might be prejudice to the public interest in their disclosure. And that income tax returns do not fall within the class of documents which the Minister may withhold from production on the ground of public interest.

I find difficulty in applying this case to the question before me for the reason in particular that the various judges in their reasons for judgment appear to confine their judgment to the fact that it is a criminal case, and the question is one arising in criminal proceedings.

Rand, J., as he then was, at page 481 [[1954] C.T.C. 258] states at the commencement of his judgment that:

“This reference raises an important question of the right of the Minister of National Revenue to object to the production before a Court of the income tax returns of a person charged in criminal proceedings, and since there are many aspects to the general question of privilege claimed by the Crown in relation to which different considerations must be taken into account, I think it desirable to keep within the boundaries which the facts of this case have set for us. As the matter relates to evidence sought by either the Crown or the accused in a criminal prosecution, it is to be distinguished formally from a similar state in civil proceedings.’’

Kellock, J., as he then was, at page 486 [[1954] C.T.C. 262] says:

“In support of the appeal Mr. Varcoe relied heavily upon the decision of the House of Lords in Duncan v. Cammell,

Laird and Company: The present circumstances, however, relate exclusively to criminal proceedings, and it is stated by Viscount Simon, L.C., in the above case, at page 591, that: ‘The judgment of the House in the present case is limited to civil actions and the practice, as applied in criminal trials where an individual’s life or liberty may be at stake is not necessarily the same.’ ”’

And at page 492 [[1954] C.T.C. 268], the late Estey, J., says at the beginning of his judgment :

"The questions are restricted to a trial of an indictable offence, where a subpoena duces tecum has been served on the appropriate income tax officer to produce before the court returns, reports, papers and documents filed pursuant to the provisions of the Income Tax Act . . .”

The point I am making is, it is made plain that the question there related to the trial of an indictable offence.

I might, however, make this further reference. At page 497 [[1954] C.T.C. 272], in the judgment of Cartwright, J., it is said:

"It is at once apparent that the facts that the Law Lords were dealing with in Duncan v. Cammell, Laird and Company were altogether different from the assumed facts upon which the questions before us are based. Moreover, as is pointed out by my brother Kellock, Viscount Simon, L.C., was careful to state (at page 633) that the judgment of the House was limited to civil actions.”

While it is true that the learned judges of the Supreme Court of Canada, in some of their remarks at least, might make it appear that their ruling would apply also to civil proceedings, think I cannot overlook their statements with regard to the matter under consideration being in a criminal proceeding, and if that is so I do not think I can say that the judgment overrules the judgment of Judson, J., in Clemens v. Crown Trust Company, et al., to which I referred.

In a judgment of Spence, J., in Croft and Croft v. Munnings, [1957] O.R. 211, which had to do with documents in the possession of the Director Veterans’ Land Act, and in which the Minister swore:

"That the candour and completeness of the information which would be furnished in such documents would be prejudiced by production, and the practice of keeping such documents secret was essential for the proper administration of the Veterans Land Act,’’

reference is made to Duncan v. Cammell, Laird and Company Limited, but I do not see any reference in it to the case of R. v. Snider. Whether or not that case was referred to Spence, J., or whether he did not mention it because he considered it to apply only to a criminal proceeding, I do not know, but Spence, J., at page 215, quoting from Duncan et al. v. Cammell, Laird and Company Limited, at page 635, says, and this is a quotation therein:

“It will be observed that the objection is sometimes based. upon the view that the public interest requires a particular class of communications with, or within, a public department to be protected from production on the ground that the candour and completeness of such communications might be prejudiced if they were ever allowed to be disclosed in subsequent litigation rather than on the contents of a particular document itself.’’

That is the end of the quotation from the Duncan ease.

And Spence, J., goes on to say:

“It is this basis that the Minister, the Honourable Hugues Lapointe, has advanced in his affidavit where he says: ‘In my opinion the candour and completeness of the information which would be furnished in such documents would be prejudiced if the production of these documents was permissible and for those reasons the practice of keeping this class of documents secret is in my opinion essential for the proper administration of the Veterans Land Act. ”’

And then Spence, J., goes on to say:

‘ ‘ As was said in the Duncan et al. case, if there is a rational ground for believing that it would not be in the public interest to produce documents, then the Court should not put its judgment in the place of that of the Minister and determine that such documents should be produced and it is only when, on further investigation and perhaps a more complete scrutiny of the matter that the Court is of the opinion that there is no rational ground upon which it could be feared that the public interest would be ill served by production and that the Court should order a production over the objection of the Minister.”

It is suggested that this case referred to inter-departmental communications, and it is mentioned in the judgment of Spence, J., at page 213 in these words:

“Counsel for the Crown continues, however, that he refused to produce three sets of documents which were not documents between the plaintiff and defendant or their predecessors in title, but were government documents between various members of the same department . . .”’

The quotation to which Spence, J., has referred from the Duncan et al. v. Cammell, Laird and Company case refers to a class of communications that were with, or within, a public department, and I do not think that Spence, J., would exclude from his reasoning documents which were not between members of the department but were with the department, which would include, I think, income tax returns.

However that may be, I am not relying on the judgment of Spence, J. I feel, however, that in the circumstances I should not depart from the judgment of Judson, J., as he then was.

It might not be out of the way to refer to the fact that a similar question came before MacFarlane, J., of the Supreme Court of British Columbia in the case of Zorzi v. Barker, which is not reported but a copy of the reasons has been furnished to me, and in which he states, referring to the judgment in the R. v. Snider case :

“I looked at these reports during the luncheon interval and without discussing them in detail—which I doubt the wisdom of my doing—I think that the judges of the Supreme Court of Canada did restrict their consideration of the matter

—so far as their findings were concerned at any rate—to the fact that the questions were submitted with respect to a criminal proceeding and not to a civil proceeding . . .””

And he goes on to say :

“. . . and while some expressions—taken by themselves and looked at — may be applicable to the general question — that is the question in civil proceedings where there is not a conflict between two public interests, one dealing with the protection of the department in its work of the collection of revenue and the other dealing with the liberty of the subject, I think that it would not be fitting for me, in a civil case before me, to interpret those reasons—in a sense—as over-ruling the decision, or departing from the decision, of the Court of Appeal; when the Supreme Court of Canada did not see fit to overrule it.”

MacFarlane, J., is referring there to the case of Weber v. Pawlik (1952), 5 W.W.R. 49.

Apart from the question of whether the Supreme Court of Canada did overrule that case (Weber v. Pawlik) it does not appear they did so in so many words, although Kellock, J., as he then was, expressed disagreement with it.

However, in any event, MacFarlane, J., goes on to say he considers it would be improper for him, in the light of those remarks to which he refers, the remarks of Kellock, J., wherein he says:

‘“The present questions, however, relate exclusively to criminal proceedings.”

And, also, where Rand, J., says:

“As the matter relates to evidence sought by either the Crown or the accused in a criminal prosecution, it is to be distinguished formally from a similar step in civil proceedings,”

to apply the decision in the R. v. Snider case to an application in a civil proceeding.

He then proceeds :

“I therefore hold that I am so far at least bound by Weber v. Pawlik.”

I feel, as I have indicated, that I am in the same position with respect to the judgment of Judson, J., although it is only a judgment of a single judge in a Weekly Court.

Other cases were referred to me by counsel for both the Minister and for the plaintiffs, but I do not think I am in a position to discuss them, not having had an opportunity fully to consider them. Of course, I do not mean by this that I have not considered their effect in the decision which I have come to.

I do not know whether it makes any difference, but I might say that counsel for the defendants has intimated that he supports the argument put forward by counsel for the Minister.

Possibly limiting these comments which I am about to make to the fact that I have not had the opportunity of giving full consideration to the matter, and, in any event, it is, of course, not an issue here, I feel there is a distinction between requiring the Crown or the Minister to produce documents in its possession than having documents in the possession of others produced.

The question here is based entirely on the evidence of the Minister that these documents are, in a sense, part of the class of documents the production of which would be contrary to the public interest, and he objects to their production accordingly. I think in that respect he is referring to the documents he has in his possession.

Where that evidence is not before the Court and it is merely a question of producing documents, such as income tax return or copies of income tax returns, in the possession of the parties, it is quite possible that a different consideration would arise. And as I say, I am not dealing with that point and do not contemplate that my ruling would affect it.

My decision, therefore, is that the objection of the Minister must be given effect to, and he is not required to produce these income tax returns, nor give evidence with respect to them.