In re Glover, 80 DTC 6262, [1980] CTC 531, aff'd 82 DTC 6035, [1982] CTC 29, [1981] 2 SCR 561

MacKinnon, ACJ:—The issue in this appeal is: does the Supreme Court of Ontario have the power, in order to assist in the implementation of one of its orders, to require the Minister of National Revenue to reveal confidential information secured under the provisions of the Income Tax Act, against which requirement and revelation there appears to be a direct prohibition in the Income Tax Act?

Mrs Glover instituted a petition for divorce in 1977 and also sought, by way of corollary relief, custody of her two young children. Her husband cross-petitioned for divorce and custody. Judge Blair at Milton made an interim custody order on March 10, 1977 in favour of Mrs Glover and granted limited access to Mr Glover. On August 16,1977, Mr Glover absconded with the children and, despite all her efforts, Mrs Glover had not seen or heard of them since.

Mr Justice Garrett made an order on October 11, 1977 directing that Mr Glover return the children to Mrs Glover. He also ordered that she was to have interim custody until a final order for custody was made. He authorized the law enforcement agencies to take all necessary steps to carry out the provisions of his order.

The petition for divorce was heard on March 2, 1979 and Mr Justice Lerner granted a decree nisi and custody of the children to Mrs Glover. Mr Glover did not, of course, appear at the trial. At the time of the trial Mr Justice Lerner made an order directing, inter alia, Revenue Canada, Taxation, to provide “this Court with particulars of the addresses of the respondents Paule Wenenn and James Glover pursuant to The Family Law Reform Act.”

The Attorney-General of Canada, on behalf of the Minister of National Revenue, moved before Mr Justice Lerner on March 10, 1980 for an order that the reference to Revenue Canada, Taxation be deleted from the order of March 2, 1979, while purporting to be made pursuant to subsection 26(2) of The Family Law Reform Act, SO 1978, c 2, was so titled in error, and he held that the order had been made under a federal statute, the Divorce Act (Canada). He amended the wording of his order to this limited extent and dismissed the application.

The Minister of National Revenue now appeals the order. Counsel submits that the prohibition in section 241 of the Income Tax Act against requiring the communication of any information obtained by the Minister for the purposes of the Income Tax Act is an absolute one and that the Court, in the circumstances of this case, does not come within any of the listed exceptions to that prohibition.

Section 241 reads as follows:

(1) Except as authorized by this section, no official or authorized person shall

(a) knowingly communicate or knowingly allow to be communicated to any person any information obtained by or on behalf of the Minister for the purposes of this Act, or

(b) Knowingly allow any person to inspect or to have access to any book, record, writing, return or other document obtained by or on behalf of the Minister for the purposes of this Act.

(2) Notwithstanding any other Act or law, no official or authorized person shall be required, in connection with any legal proceedings,

(a) to give evidence relating to any information obtained by or on behalf of the Minister for the purposes of this Act, or

(b) to produce any book, record, writing, return or other document obtained by or on behalf of the Minister for the purposes of this Act.

(3) Subsections (1) and (2) do not apply in respect of criminal proceedings, either by indictment or on summary conviction, under an Act of the Parliament of Canada, or in respect of proceedings relating to the administration or enforcement of this Act.

(4) An official or authorized person may,

(a) in the course of his duties in connection with the administration or enforcement of this Act,

(i) communicate or allow to be communicated to an official or authorized person information obtained by or on behalf of the Minister for the purposes of this Act, and

(ii) allow an official or authorized person to inspect or to have access to any book, record, writing, return or other document obtained by or on behalf of the Minister for the purposes of this Act;

(b) under prescribed conditions, communicate or allow to be communicated information obtained under this Act, or allow inspection of or access to any written statement furnished under this Act to the government of any province in respect of which information and written statements obtained by the government of the province, for the purpose of a law of the province that imposes a tax similar to the tax imposed under this Act, is communicated or furnished on a reciprocal basis to the Minister;

(c) communicate or allow to be communicated information obtained under this Act, or allow inspection of or access to any book, record, writing, return or other document obtained by or on behalf of the Minister for the purposes of this Act, to or by any person otherwise legally entitled thereto; or

(d) communicate or allow to be communicated to a taxpayer, such information obtained under this Act regarding the amount of income of his spouse or of any other person as is necessary for the purposes of an assessment or reassessment of tax, interest, penalty or other amount payable by the taxpayer or of the determination of any refund to which he is entitled for the year.

(5) Notwithstanding anything in this section, the Minister may permit a copy of any book, record, writing, return or other document obtained by him or on his behalf for the purposes of this Act to be given to the person from whom such book, record, writing, return or other document was obtained or the legal representative of such person, or to the agent of such person or of such legal representative authorized in writing in that behalf.

(6) An order or direction made in the course of or in connection with any legal proceedings requiring an official or authorized person to give evidence relating to any information or produce any book, record, writing, return or other document obtained by or on behalf of the Minister for the purposes of this Act, may by notice served upon all interested parties, be appealed forthwith by the Minister or by the person against whom the order or direction is made to

(a) the court of appeal of the province in which the order or direction is made, in the case of an order or direction made by a court or other tribunal established by or pursuant to the laws of the province, whether or not such court or tribunal is exercising a jurisdiction conferred by the laws of Canada; or

(b) the Federal Court of Appeal, in the case of an order or direction made by a court or other tribunal established by or pursuant to the laws of Canada.

(7) The court to which an appeal is taken pursuant to subsection (6) may allow the appeal and quash the order or direction appealed from or dismiss the appeal, and the rules of practice and procedure from time to time governing appeals to the courts shall apply, mutatis mutandis, to an appeal instituted pursuant to subsection (6).

(8) An appeal instituted pursuant to subsection (6) shall stay the operation of the order or direction appealed from until judgment is pronounced.

(9) Every one who, being an official or authorized person, contravenes subsection (1) is guilty of an offence and liable on summary conviction to a fine not exceeding $1,000 or to imprisonment for a term not exceeding 2 months, or to both such fine and imprisonment.

(10) In this section,

(a) “official” means any person employed in or occupying a position of responsibility in the service of Her Majesty, or any person formerly so employed or formerly occupying a position therein;

(b) “authorized person” means any person engaged or employed, or formerly engaged or employed, by or on behalf of Her Majesty to assist in carrying out the purposes and provisions of this Act; and

(c) ‘‘court of appeal” has the meaning assigned by paragraphs (a) to (j) of the definition “court of appeal” in section 2 of the Criminal Code.

Paragraph (4)(d) was added in 1979 after the original order was made. It does not assist in the resolution of the problem which faced the trial judge.

It appears to be common ground that, as a result of the judgment in Regina v Snider, [1954] SCR 479, the extended section 241 was first enacted in its present form by the Statutes of Canada 1966-67, c 47, section 17 and c 91, section 22. Section 241, in my view, is a comprehensive code designed to protect the confidentiality of all information given to the Minister for the purposes of the Income Tax Act. The only exception to section 241 found elsewhere in the Income Tax Act is contained in subsection 149.1(15) which explicitly states that, “notwithstanding section 241”, the Minister shall communicate to the public the information contained in the annual public information return required to be made by every registered charity by virtue of subsection 149.1(14). Accordingly, unless the “Court" or Mrs Glover can come within one of the exceptions found in s 241 itself, the order herein was made without jurisdiction.

Subsection 241(1) makes it clear that “except as authorized by this section”, no official shall communicate to “any person any information” obtained by or on behalf of the Minister “for the purposes of this Act” (emphasis added). To make the matter clear, so far as legal proceedings are concerned, subsection 2 is added which states that “notwithstanding any other Act or law’’, no official or authorized person as defined “shall be required, in connection with any legal proceedings” to give evidence or produce any writing relating to any information obtained for the purposes of the Act. (emphasis added) This is an all-embracing section which, apart from the exceptions listed in subsection (3), applies to “any legal proceedings” and to the Court.

Subsection 241(3) limits the effect of subsections 241(1) and 241(2) by Stating that those subsections do not apply in respect of criminal proceedings or in respect of proceedings relating to the administration or enforcement of the Income Tax Act. If one views subsection 241(3) conversely along with the two previous subsections, it is a clear statement of parliamentary policy that no information obtained for the purpose of the Act shall be communicated and no official or authorized person shall be required to give evidence relating to such information in any non-Income Tax Act civil legal proceedings.

The absolute prohibition as defined and limited in the first three subsections of section 241, leads directly into subsection (4). This permissive subsection and its components allow, for the purposes of the effective working of the entire statute, the communication of confidential information obtained for the purpose of the legislation to other persons as therein defined and limited. These persons are, equally, on receipt of the confidential information, under the ukase of subsection 241(1). Subsection 241(4), as has been recently pointed out by this Court, sets out certain exceptions, largely of an administrative nature, to the restrictions imposed by the section. Re Herman et al v Deputy Attorney General of Canada (1980), 26 OR (2d) 520 at 529.

Paragraph 241(4)(c) states that an official or authorized person may communicate information obtained under the Act for the purposes of the Act to “any person otherwise legally entitled thereto.” Counsel for Mrs Glover argues that a judge of the Supreme Court would be “a person otherwise legally entitled.” His submission is that a judge could “designate” himself to be a person to receive the confidential information or he could direct that it be given to Mrs Glover. In either case, the judge or Mrs Glover would thereby become ‘‘a person otherwise legally entitled.” This argument overlooks the effect and purpose of subsections 241(2) and (3). If the Court, at any time, has the power to make such orders, it would emasculate the effect of subsection 241(2) and render subsection 241(3) unnecessary.

The accepted rule of statutory interpretation which has application here was stated by Lord Davey in Canada Sugar Refining Company, Limited v The Queen, [1898] AC 735 at 741:

Every clause of a statute should be construed with reference to the context and the other clauses of the Act, so as, so far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject matter.

Further, as the editor of Maxwell, The Interpretation of Statutes (1969, 12th ed.), p 36 points out, “a construction which would leave without effect any part of the language of a statute will normally be rejected.” The interpretation urged by counsel for Mrs Glover, if accepted, would be to ignore the other clauses of the same section and indeed, as I have stated, render them either meaningless or ineffectual.

It was suggested that, by virtue of the original order for custody, Mrs Glover became a “person otherwise legally entitled” to any information as to the address of her husband, within the meaning of the words quoted as found in paragraph 241(4)(c). In other words, the mere fact that she had been given an order for custody carried with it, by implication, the authority to secure information as to the location of her children from any individual or agency which might have such information. Such an approach, when applied to the Income Tax Act, would, in my view, give far too wide a meaning to the words “otherwise legally entitled” and once again the result would be to ignore or subvert the limitations imposed by the section in its attempt to ensure the confidentiality of the information secured and received by the Revenue Department under the Act.

In considering the interpretation to be given to paragraph 241(4)(c) and the words “any person otherwise legally entitled”, the whole of that subsection must be looked at. Paragraph 241(4)(a) allows an official or authorized person (as defined by subsection 9), in the course of his duties, to communicate to other officials or authorized persons (as defined) certain information. Paragraph 241 (4)(b) allows for the communication to provincial officials, on a reciprocal basis, information when a similar tax has been imposed by the Province. The latest amendment, paragraph 241 (4)(d), allows for the communication to a taxpayer of certain information relating to other taxpayers’ incomes for the purpose of determining the first taxpayer’s assessment or re-assessment of tax, interest, penalty or other amount payable. This is a carefully circumscribed permissive subsection to ensure that the taxpayer who is being assessed or re-assessed, has knowledge of the basis of such assessment, etc. Paragraph 241(4)(c), for its part, has an administrative purpose similar to the other subsections of the subsection 241(4). It permits the administration of various Departments of Government to proceed within the limits of the confidentiality imposed by subsection 241(1) and of the governing statutes of those Departments. Sections of various statutes indicate who could fall within the words “persons otherwise legally entitled”, for example: Canada Pension Plan, RSC 1970, c C-5, s 94(2)(b); Corporations and Labour Unions Returns Act, RSC 1970, c C-31, s 16; Old Age Security Act, RSC 1970, c 0-6, paragraph 19(3)(a); Statistics Act, SC 1970-71-72, c 15, subsection 23(1).

Subsection 241(5) contains an obvious and necessary exception to the blanket prohibition. It allows the Minister to communicate to the taxpayer or his legal representatives or agent information from the taxpayer’s own returns or material. This case does not fall within that exception.

The trial judge did not rely on any exception to be found within section 241 but rather appeared to base his order on the “inherent jurisdiction” of the Court to control its own process and see that its orders are obeyed. There is no evidence, of course, that Mr Glover was aware of the orders of Mr Justice Garrett and of Mr Justice Lerner but he certainly was aware of the interim order made by Judge Blair on March 10,1977. Although the record does not disclose it, I assume that Judge Blair’s order was made as a local judge of the Supreme Court in the course of the divorce proceedings brought in the Supreme Court of Ontario.

The question of the inherent jurisdiction of the Court was not directly canvassed by the trial judge. However, it was fully argued before us. In his helpful article entitled Inherent Jurisdiction of the Court (1970), 23 Curr L Prob 23, Master Jacob points out that inherent jurisdiction is the reserve or fund of powers which the court may draw upon as necessary whenever it is just or equitable to do so. He goes on to emphasize that this is not an unlimited jurisdiction and that it cannot be exercised in contravention of any statutory provision. In dealing with the general jurisdiction of the court, a term which includes inherent jurisdiction, Brooke, JA in 80 Wellesley St East Ltd v Fundy Builders Ltd, [1972] 2 OR 280 at p 282 said:

As a superior Court of general jurisdiction the Supreme Court of Ontario has all the powers that are necessary to do justice between the parties. Except where provided specifically to the contrary, the Court’s jurisdiction is unlimited and unrestricted in substantive law in civil matters.

The limiting words in that passage, and with respect in my view correctly so, are ‘except where provided specifically to the contrary.” In the instant case there is a specific statutory limitation on the jurisdiction of the Court, which prohibits the divulging by the Minister or his officials of the information sought in this type of proceeding. The address of the taxpayer is anecessary and integral part of the information sought and received for the purposes of the Income Tax Act. To deliberately mistate the address is an offence under the Act. The section does not allow the Court to weigh the quality or relative value of the information. It prohibits the communication of “any” information received for the purposes of the Income Tax Act. In my Opinion, the address received by the Minister of taxpayers on the Income Tax returns is information obtained by or on behalf of the Minister for the purposes of the Income Tax Act. Such information can only be communicated to persons authorized to receive it by virtue of the exceptions or qualifications contained in section 241. As I have already stated, I do not believe that the Court or Mrs Glover, either under s 241 or by virtue of the invocation of the inherent jurisdiction of the Court, is such a person.

An affidavit was filed in the Court below on behalf of the Minister by an employee of the Department of National Revenue stating that in his (the employee’s) opinion, the disclosure of any information received in connection with the administration or enforcement of the Income Tax Act would be prejudicial to the public interest. I do not think such an affidavit is required in connection with the interpretation and application of s 241 which is clear in its terms. Accordingly, I have not considered the affidavit.

While one may have considerable sympathy with Mrs Glover and her difficulties, if the court can make the order that was here made, I can see no limitation on the power of the Court to make an order requiring any information received as a result of the requirements of the Income Tax Act, to be divulged or communicated to the Court or any other person as the Court directs. This would confer on the Court an unlimited discretion which would ignor the combined effect of subsections 241(1), (2) and (3). I do not think this is a possible interpretation of section 241 or of the applicable legal principles.

The appeal is allowed and the order of the Court below is varied by striking out the words “Revenue Canada—Taxation” from paragraph 1 of the order of March 2, 1979. There will be, under the circumstances, no order as to costs on the appeal or of the order of Mr Justice Lerner of March 10,1980.