D.(c.) v. M.N.R., [1991] 1 CTC 379

Décary, J.A. (Mahoney and MacGuigan, JJ.A. concurring):—The applicant appealed to the Tax Court of Canada from a reassessment of his liability to tax made by the respondent. Prior to the hearing of the appeal, counsel for the applicant made an application under section 16 of the Tax Court of Canada Act! [1] for an order that the hearing be held in camera.

The application for an in camera hearing was based on the fact that the applicant, a member of a professional body, was fearful that his conduct, which would be revealed through the tax proceedings, might subject him to disciplin- fears were well-founded, he was told that if the tax case were to be publicized, a complaint was likely to be filed against him by a fellow member, he would likely be brought before a disciplinary board and he might be subject to disciplinary proceedings. [2] The applicant testified that until that conversation, his intention was to proceed with his appeal from the reassessment, but that as a result of the conversation, he ” probably won't proceed" with the appeal if it is not heard in camera.

The Associate Chief Justice of the Tax Court dismissed the application for an in camera hearing and the applicant thereafter filed this section 28 application, which was ordered by this Court to be held in camera.

Counsel for the applicant relied heavily on the following statement by Earl Loreburn in Scott v. Scott, [1913] A.C. 417 at 446 (H.L.):

It would be impossible to enumerate or anticipate all possible contingencies, but in all cases where the public has been excluded with admitted propriety the underlying principle, as it seems to me, is that the administration of justice would be rendered impracticable by their presence, whether because the case could not be effectively tried, or the parties entitled to justice would be reasonably deterred from seeking it at the hands of the Court.

[Emphasis added.]

In counsel's view, that statement was adopted by a majority of the law lords in that case and introduced into Canadian jurisprudence by the decision of Mr. Justice Dickson, later Chief Justice, in A.-G. (Nova Scotia) v. MacIntyre, [1982] 1 S.C.R. 175; 132 D.L.R. (3d) 385.

Counsel argued, basically, that the applicant had a fear of adverse consequences from testifying in open court, that he was deterred from seeking justice in the Tax Court if the proceedings were in public and that the test set out by Earl Loreburn applied to his case.

With respect, I am unable to agree with the interpretation given by counsel to that test nor with his submission that Earl Loreburn's statement was approved by his colleagues and became part of our jurisprudence through the MacIntyre decision, supra.

That test was formulated by Earl Loreburn in a very specific context, i.e., “when the subject-matter of the action would be destroyed by a hearing in open Court, as in a case of some secret process of manufacture," and when "There would be in effect a denial of justice” (at 445) in the particular action. Where secrecy or confidentiality of information is precisely what is at issue in a proceeding, the party seeking to protect that information would most certainly be deterred from seeking justice in the hands of the Court if "the secret was to be communicated to all the world” (at 445). In the case at bar, the applicant is deterred from seeking justice not because the actual proceedings in the Tax Court which he wants to have heard in camera would be frustrated if they were held in open court, but because some other hypothetical proceedings in another tribunal might take place. This is not, I suggest, what Earl Loreburn had in mind. [3]

Even if this was what Earl Loreburn had in mind, a close reading of the opinions of the five law lords who sat in Scott, supra, reveals that the extent of the consensus was much narrower [4] and can be reduced to two propositions. The first one is that the broad principle that the courts must administer justice in public is “one of the surest guarantees of our liberties" and “the very foundations of public and private security." [5] The second one is that this broad principle is "subject to apparent exceptions" which are themselves "the outcome of a yet more fundamental principle that the chief object of Courts of justice must be to secure that justice is done." [6] These “narrowly defined exceptions” [7] . . . "which are acknowledged to the application of the rule prescribing the publicity of Courts of justice are, first, in suits affecting wards; secondly, in lunacy proceedings; and, thirdly, in those cases where secrecy, as, for instance, the secrecy of a process of manufacture or discovery or invention—trade secrets—is of the essence of the cause. . . The third case— that of secret processes, inventions, documents, or the like—depends upon this: that the rights of the subject are bound up with the preservation of the secret. To divulge that to the world, under the excuse of a report of proceedings in a Court of law, would be to destroy that very protection which the subject seeks at the Court's hands." [8]

It is true, as Earl Loreburn points out, that "it would be impossible to enumerate or anticipate all possible contingencies", but any extension of the recognized exceptions beyond the narrow scope given to them by Viscount Haldane, by the Lord of Halsbury and by Lord Shaw of Dunfermline would need to be done with extreme care and in most unique circumstances.

In any event, it is somewhat futile to speculate as to the proper reading of the view of the law lords in Scott, supra, because, in my opinion, they were incorporated into Canadian law only to the extent that they were adopted by Dickson, J., later Chief Justice, in Maclntyre, supra, [9] which is as follows (at pages 185-87 (D.L.R. 401-403)):

It is now well established. . . that covertness is the exception and openness the rule. Public confidence in the integrity of the court system and understanding of the administration of justice are thereby fostered. As a general rule the sensibilities of the individuals involved are no basis for exclusion of the public from judicial proceedings. . .

The authorities have held that subject to a few well-recognized exceptions, as in the case of infants, mentally disordered persons or secret processes, all judicial proceedings must be held in public. . .

In my view, curtailment of public accessibility can only be justified where there is present the need to protect social values of superordinate importance. . ..

A recent illustration of a unique circumstance that justified a widening of the "classes" indicated in Scott, supra, is found in R. v. A., [1990] 1 S.C.R. 992, where the Supreme Court of Canada ordered that proceedings before it be held in camera on the basis that disclosure posed a serious risk to the safety of a person and to members of his family, when that person was under the protection of the R.C.M.P. and subpoenaed to testify in a criminal trial.

In reading Scott, supra, and Maclntyre, supra, we should keep in mind (a) that in neither case was there a statutory authority given to the courts to order hearings in camera and (b) most importantly, that Charter considerations did not come into play.

One could argue that common law exceptions have lost some of their rigidity with the advent of numerous statutory exceptions through which Parliament has expressly indicated to the courts that, with respect to a given situation, the principle of openness could be dispensed with. One could argue, to the contrary, that statutory provisions have generally been made to confirm cases which would otherwise benefit from the common law exceptions.

There is no need, however, to choose between these two approaches for, with the advent of the Charter and more specifically with the recognition in its paragraph 2(b) of the freedom of the press, openness of the courts became an even better recognized and protected principle than it was at common law. As Cory, J. stated in Edmonton Journal v. Alberta (A.-G.), [1989] 2 S.C.R. 1326 at 1336; 64 D.L.R. (4th) 577 at 607: “It seems that the rights enshrined in s. 2(b) should therefore only be restricted in the clearest of circumstances." Therefore, a statutory provision permitting in camera proceedings will only be constitutionally valid in the clearest of circumstances", which may well be, to use the words of Dickson, J. in MacIntyre, supra, "where there is present the need to protect social values of supero rd inate importance." In that sense I would say that the Charter has reinstated the principle of openness in its original dimension, if that principle had at all been diluted through statutory exceptions.

In the case at bar, the applicant's fear of adverse consequences on his career should the Tax Court proceedings be conducted in public cannot, by any stretch of the imagination, be one of these “ clearest of circumstances” which would justify a departure from the broad principle of openness of our court system. The public interest right which the applicant is seeking to put in the balance against the public interest right of openness, is that of the need not to deter taxpayers from making honest self-assessment of their income tax by subjecting them to adverse consequences. Had that public interest right been a "value of superordinate importance" that called for hearings in camera, Parliament would have made such hearings the rule rather than the exception in section 16 of the Act. It is true that section 241 of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the"Act") recognizes that confidentiality is necessary for the proper and effective administration of the Income Tax Act, but I am not prepared to consider confidentiality for the purposes of the Income Tax Act as one of the circumstances that would, under section 16 of the Tax Court of Canada Act,“ "justify in camera proceedings".

To allow someone to seek justice in camera for the sole purpose of hiding from a professional body a conduct which might lead to disciplinary proceedings, would be doing precisely what Lord Shaw of Dunfermline, in Scott, supra, at pages 484-85, warned the courts against:

There remains this point. Granted that the principle of openness of justice may yield to compulsory secrecy in cases involving patrimonial interest and property, such as those affecting trade secrets, or confidential documents, may not the fear of giving evidence in public, on questions of status like the present, deter witnesses of delicate feeling from giving testimony, and rather induce the abandonment of their just right by sensitive suitors? And may not that be a sound reason for administering justice in such cases with closed doors? For otherwise justice, it is argued, would thus be in some cases defeated. My Lords, this ground is very dangerous ground. One's experience shews that the reluctance to intrude one’s private affairs upon public notice induces many citizens to forgo their just claims. It is no doubt true that many of such cases might have been brought before tribunals if only the tribunals were secret. But the concession to these feelings would, in my opinion, tend to bring about those very dangers to liberty in general, and to society at large, against which publicity tends to keep us secure. . .10 [10]

Moreover, to interpret section 16 in such a way as that suggested by the applicant might well allow for an unwarranted departure from the rules set up by sections 3 and 5 of the Canada Evidence Act, 1985, R.S.C. c. C-5 and by section 13 of the Charter. Perhaps, and I do not want to be seen as expressing any view on this issue, the applicant, if he were to testify before the Tax Court, might later avail himself before the disciplinary tribunal of the protection against incriminating evidence afforded by section 5 of the Canada Evidence Act and by section 13 of the Charter; but even if that were so, neither the Charter nor the Canada Evidence Act would afford him any protection against the publicity of the hearing before the Tax Court. With respect to evidence that might lead to criminal proceedings, the protection given would be that against its use, and not that against its publicity, but with respect to eventual disciplinary proceedings the protection would be against the use of the evidence as well as against its publicity: this is an untenable position. To permit an in camera hearing in the Tax Court for fear of possible disciplinary measures would be tantamount to affording the applicant a protection not even afforded by the Charter to witnesses fearing criminal proceedings.

To use the words of the Associate Chief Justice of the Tax Court, “1 know of no case, and (counsel for the applicant) could find none, that on its facts suggests that apprehension on the part of an appellant that he might be the subject of disciplinary proceedings for a breach or the rules of the professional body to which he belongs is a proper ground for ordering an in camera hearing in a court of law."

There being no error of law and the Associate Chief Justice having judicially exercised his discretion on the facts of the case, I would dismiss the application, with the proviso that the in camera order granted with respect to the proceedings in this Court be continued and that these reasons be made public with the letters "C.D" being used to identify the applicant.

Application dismissed.