Teitelbaum,
J.:—This
is
a
motion
filed
on
behalf
of
the
applicant,
A.
Allen
Raquette,
for
the
determination
of
the
question
whether
certain
trust
account
records
requested
by
Revenue
Canada
in
a
letter
dated
April
10,
1992,
are
covered
by
solicitor-client
privilege.
The
applicant
states,
in
his
notice
of
motion,
as
his
grounds
for
the
present
application
“that
the
records
requested
by
Revenue
Canada
are
covered
by
solicitor-client
privilege
and
therefore
need
not
be
disclosed
to
Revenue
Canada
Taxation”.
The
facts
leading
to
the
present
notice
of
motion
are
the
following:
That
on
or
about
June
10,
1992,
a
client
of
the
applicant,
the
applicant
being
a
barrister
&
solicitor,
a
certain
Mr.
William
D.
Groves,
was
indebted
to
Her
Majesty
the
Queen
in
Right
of
Canada
(Crown)
in
the
amount
of
$74,014.76.
It
appears
that
the
said
Mr.
Groves
has
been
consistently
indebted
to
the
Crown
since
1983
in
relation
to
amounts
due
in
respect
of
the
1979
and
subsequent
taxation
years
and
has
made
no
voluntary
payments
on
the
amount
of
tax
owing.
The
Department
of
National
Revenue
has
made
numerous
unsuccessful
attempts
to
collect
the
outstanding
taxes
owing
since
1983,
both
verbally
and
through
written
correspondence
and
meetings.
On
or
about
January
29,
1992,
William
D.
Groves
pled
guilty
to
a
charge
of
failing
to
comply
with
a
notice
to
provide
documents
pursuant
to
section
238(1)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
section
C.
1970-71-72,
c.
63)
(the
"Act")
and
was
sentenced
to
a
fine
of
$1,000.
Section
238(1)
of
the
Act
states:
Every
person
who
has
failed
to
file
or
make
a
return
as
and
when
required
by
or
under
this
Act
or
a
regulation
or
who
has
failed
to
comply
with
subsection
116(3),
127(3.1)
or
(3.2),
147.1(7)
or
153(1),
any
of
sections
230
to
232
or
a
regulation
made
under
subsection
147.1(18)
or
with
an
order
made
under
subsection
(2)
is
guilty
of
an
offence
and,
in
addition
to
any
penalty
otherwise
provided,
is
liable
on
summary
conviction
to
(a)
a
fine
of
not
less
than
$1000
and
not
exceeding
$25,000;
or
(b)
such
a
fine
and
imprisonment
for
a
term
not
exceeding
12
months.
The
fine
of
$1000
was
paid
by
Mr.
Grove's
solicitor,
the
present
applicant.
On
April
10,
1992,
a
Mr.
Paul
E.
Seguin,
Director
Taxation,
Vancouver
District
Office
of
the
Department
of
National
Revenue,
Taxation
wrote
to
the
applicant
requesting,
pursuant
to
section
231.2
of
the
Act
that
the
applicant
"provide
all
trust
account
records
including
ledger
cards,
journal
entries
and
cancelled
cheques
that
were
known
to
have
been
related
to
entries
or
transactions
for,
or
on
behalf
of
William
D.
Groves
(paragraph
9,
O'Dea
affidavit
of
June
10,
1992).
The
letter
dated
April
10,
1992,
can
be
found
as
Exhibit
"A"
to
the
affidavit
of
the
applicant
dated
May
19,
1992.
The
letter
states:
For
purposes
related
to
the
administration
or
enforcement
of
the
Income
Tax
Act,
pursuant
to
the
provisions
of
Section
231.2
of
the
said
Act,
I
hereby
require
from
you
within
thirty
(30)
days
of
receipt
of
this
notice:
All
trust
account
records
including
ledger
cards,
journal
entries
and
cancelled
cheques
that
are
known
to
be
or
to
have
been
related
to
entries
or
transactions
with,
for,
or
on
behalf
of
the
individual
named
above,
or
persons
known
to
be
or
have
been
acting
on
behalf
of
the
above-named
individual,
during
the
period
January
29,
1992
to
March
18,
1992.
If
this
notice
is
not
complied
with
within
thirty
(30)
days
of
receipt,
you
will
be
liable
for
prosecution
without
further
notice.
Subsection
238(1)
of
the
said
Act
provides
that
a
person
who
fails
to
comply
with
this
notice
is
guilty
of
an
offence
and
is
liable
on
summary
conviction
to
a
fine
of
not
less
than
$1000,
and
not
more
than
$25,000
or
both
the
fine
and
imprisonment
not
exceeding
twelve
months.
Subsection
238(2)
of
the
said
Act
provides
that
where
a
person
is
found
guilty
of
an
offence
under
subsection
238(1),
the
court
may
make
an
order
as
it
deems
proper
in
order
to
enforce
compliance
with
the
notice.
I
am
satisfied
that
the
letter
requests
more
information
than
what
Mr.
O’Dea
states
was
requested
in
his
statement
found
in
paragraph
9
of
his
June
10,
1992
affidavit
as
there
is,
as
well,
a
request
“or
persons
known
to
be
or
have
been
acting
on
behalf
of
the
above-named
individual
during
the
period
January
29,
1992
to
March
18,
1992”.
Mr.
O'Dea
states
in
paragraph
9
of
his
June
10,
1992
affidavit
that
it
was
he
who
wrote
to
the
applicant
with
the
above
request.
This
is
incorrect.
As
I
have
stated,
the
letter
is
signed
by
a
Paul
E.
Seguin.
Mr.
O'Dea's
name
appears
on
the
top
left
of
the
letter.
I
am
indeed
surprised
that
Mr.
O'Dea
believes
himself
to
be
the
writer
of
the
letter
and
yet
allows
Mr.
Seguin
to
sign
same.
The
Department
of
National
Revenue
is
continuing,
as
of
June
10,
1992,
to
make
attempts
to
collect
the
outstanding
taxes
owing
by
Mr.
Groves.
In
fact,
Mr.
Groves
has
paid
a
sum
of
$40,000
on
account
of
his
outstanding
taxes
and
that
this
payment
was
made
on
June
9,1992.
The
payment
was
made
in
cash.
The
above
facts
are
obtained
from
the
affidavits
of
Mr.
O'Dea
signed
on
June
10,
1992
and
June
11,
1992.
There
is
no
contradictory
evidence
before
me
to
indicate
that
what
is
said
by
Mr.
O'Dea
is
not
exact
except
as
above
stated.
In
the
affidavit
of
William
D.
Groves,
dated
June
10,
1992,
he
admits
to
receiving
a“
"demand
letter"
dated
September
25,
1990,
from
Revenue
Canada
pursuant
to
section
231.2
of
the
Act
and
“for
personal
reasons"
he
did
not
comply
with
the
demand
resulting
in
a
fine
of
$1000
and
which
fine
was
paid
by
the
applicant
on
behalf
of
Mr.
Groves.
The
fine
of
$1000
was
paid
by
the
applicant
with
his
trust
cheque
(Exhibit
"C"
Groves
affidavit).
After
the
applicant
received
the
April
10,
1992,
letter
of
demand
from
Mr.
Seguin
(Exhibit
"A"
to
Raquette
affidavit),
the
demand
being
made
pursuant
to
section
231.2
of
the
Act
which
states:
(1)
Notwithstanding
any
other
provision
of
this
Act,
the
Minister
may,
subject
to
subsection
(2),
for
any
purpose
related
to
the
administration
or
enforcement
of
this
Act,
by
notice
served
personally
or
by
registered
or
certified
mail,
require
that
any
person
provide,
within
such
reasonable
time
as
is
stipulated
in
the
notice,
(a)
any
information
or
additional
information,
including
a
return
of
income
or
a
supplementary
return;
or
(b)
any
document.
Mr.
Groves,
the
applicant's
client
instructed
the
applicant
to
refuse
the
release
of
the
requested
records
on
the
basis
of
solicitor-client
privilege.
According
to
counsel
for
the
applicant,
he
states
that
there
are
two
issues
to
be
decided:
1.
That
the
demand
made
by
Revenue
Canada
in
April
of
1992
for
the
production
of
certain
documents
did
not
comply
with
subsections
231.2(2),
(3)
and
(4)
of
the
Act
and
therefore
the
demand
was
invalid
and
paragraph
232(e)
of
the
Act
cannot
apply
in
determining
solicitor/client
privilege.
2.
The
true
purpose
of
the
demand
in
April
of
1992
was
not
in
pursuit
of
an
on-going
and
continuing
inquiry
and
therefore
should
not
have
been
made
pursuant
to
section
231.2
of
the
Act
thus
rendering
the
demand
invalid.
I
will
deal
with
the
second
issue
as
stated
by
applicant's
counsel
and
then
deal
with
the
first
issue.
The
evidence
of
Mr.
O’Dea,
which
has
not
been
contradicted
in
any
substantial
manner,
clearly
indicates
that
the
purpose
of
the
demand
made
upon
the
applicant
was
in
pursuit
of
an
ongoing
and
continuing
inquiry.
Mr.
O'Dea
states
in
his
affidavit
that
Mr.
Groves
was
indebted
to
the
Crown
since
1983
(paragraph
4),
that
numerous
unsuccessful
attempts
to
collect
were
made
(paragraph
5)
and
that
the
Department
of
National
Revenue
is
continuing
to
make
attempts
to
collect
the
outstanding
taxes
owing
by
Mr.
Groves
(paragraph
10).
The
above
clearly
indicates
to
me
that
there
has
been,
since
1983,
an
ongoing
and
continuing
inquiry
by
the
Ministry
of
National
Revenue
as
to
how
to
collect
the
income
taxes
owing
by
Mr.
Groves.
Counsel
for
the
applicant
submits
that
because
the
demand
made
on
the
applicant
was
for
documents
from
January
29,
1992
to
March
18,
1992
only,
this
is
a
clear
indication
that
up
to
January
29,
1992
there
was
no
ongoing
and
continuing
inquiry.
As
I
have
stated,
I
do
not
accept
this
submission
as
Mr.
O'Dea's
evidence
clearly
indicates
an
ongoing
inquiry
on
how
to
collect
the
taxes
owing
by
Mr.
Groves.
The
fact
that
documents
are
requested
for
a
specific
period
does
not
indicate
anything
other
than
a
request
for
documents
for
a
specified
time
frame.
Counsel
submits
that
as
a
result
of
the
manner
in
which
the
demand
is
made
in
the
letter
of
April
10,
1992
to
the
applicant,
the
demand
is
invalid.
I
am
satisfied
that
the
demand
asks
for
two
things:
(1)
all
trust
account
records
including
ledger
cards,
journal
entries
and
cancelled
cheques
that
are
known
to
be
or
to
have
been
related
to
entries
or
transactions
with,
for,
or
on
behalf
of
Mr.
Groves
or
(2)
all
trust
account
records
including
ledger
cards,
journal
entries
and
cancelled
cheques
that
are
known
to
be
or
to
have
been
related
to
entries
or
transactions
with,
for,
or
on
behalf
of
persons
known
to
be
or
have
been
acting
on
behalf
of
Mr.
Groves
during
the
period
January
29,
1992
to
March
18,
1992.
Subsection
231.2(2)
states
that
when
dealing
with
documents
involving
unnamed
persons,
judicial
authorization
must
first
be
obtained
if
a
demand
for
these
documents
is
to
be
made.
231.2
(2)
“Unnamed
persons.”
The
Minister
shall
not
impose
on
any
person
(in
this
section
referred
to
as
a
"third
party")
a
requirement
under
subsection
(1)
to
provide
information
or
any
document
relating
to
one
or
more
unnamed
persons
unless
he
first
obtains
the
authorization
of
a
judge
under
subsection
(3).
It
is
apparent
that
the
respondent
never
obtained
any
judicial
authorization
to
make
a
demand
pursuant
to
subsection
231.2(2).
Counsel
for
respondent
submits
that
the
demand
is
not
being
made
pursuant
to
subsection
231.2(2)
as,
he
submits,
no
documentation
is
being
requested
involving
unnamed
persons.
He
submits
that
what
Mr.
Paul
E.
Seguin
meant
when
he
wrote
the
"demand"
letter
of
April
10,
1992,
were
other
persons
(unnamed)
in
the
law
firm
of
the
applicant.
I
cannot
and
do
not
accept
this
submission.
The
letter
speaks
of
"persons
known
to
be
.
.
.".
I
take
this
to
mean
other
unnamed
persons
not
in
the
applicant's
firm.
I
do
not
have
any
evidence
that
there
are
"others"
in
the
applicant's
firm.
Furthermore,
the
letter
is
written
to
the
applicant
personally
and
not
to
a
firm
of
attorneys.
The
fact
that
the
second
part
of
the
demand
is
invalid,
as
a
result
of
not
first
obtaining
authorization
from
a
judge,
does
this
make
the
entire
demand
invalid?
Counsel
for
the
applicant
states
that
it
does.
He
states,
if
one
is
served
with
a
demand
pursuant
to
section
321.2
and
does
not
comply
with
the
demand,
he
or
she
is
subject
pursuant
to
subsection
238(2)
of
the
Act
to
a
fine
of
not
less
than
$1,000
and
not
more
than
$25,000
or
both
the
fine
and
imprisonment
not
exceeding
12
months.
This
indicates,
according
to
counsel,
that
the
Minister
must
act
strictly
in
accordance
with
the
provisions
of
the
Act
and
failing
to
do
so
renders
the
whole
demand
invalid.
With
the
greatest
respect,
I
cannot
accept
this
submission
by
counsel.
Firstly,
I
am
satisfied
I
do
not
have
to
determine
if
the
applicants
trust
account
records
including
ledger
cards,
journal
entries
and
cancelled
cheques
as
they
relate
to
Mr.
Groves
are
subject
to
solicitor-client
privilege.
Subsection
232.1(e)
of
the
Act
states:
"Solicitor-client
privilege"—"solicitor-client
privilege"
means
the
right,
if
any,
that
a
person
has
in
a
superior
court
in
the
province
where
the
matter
arises
to
refuse
to
disclose
an
oral
or
documentary
communication
on
the
ground
that
the
communication
is
one
passing
between
him
and
his
lawyer
in
professional
confidence,
except
that
for
the
purposes
of
this
section
an
accounting
record
of
a
lawyer,
including
any
supporting
voucher
or
cheque,
shall
be
deemed
not
to
be
such
a
communication.
[emphasis
mine]
Clearly,
the
accounting
record
of
the
applicant
as
it
relates
to
Mr.
Groves,
including
any
supporting
voucher
or
cheque
cannot
now
be
considered
as
being
subject
to
a
solicitor-client
privilege.
Furthermore,
Mr.
Justice
Collier
in
Re
Romeo's
Place
Victoria
Ltd.
v.
The
Queen,
[1981]
C.T.C.
380,
81
D.T.C.
5295
(F.C.T.D.),
in
speaking
of
trust
account
records
of
a
lawyer,
states
at
page
388
(D.T.C.
5300)
[that]
“[t]rust
account
records
are,
undoubtedly,
accounting
records
of
a
lawyer”,
and
at
page
388
and
389
(D.T.C.
5301):
I
note
that
the
present
version
of
subsection
126(1)
(now
subsection
231(1))
simply
reads:
where
”.
.
.
any
books
or
records
are
or
should
be
kept
.
.
.”.
The
words
"pursuant
to
this
Act"
have
been
removed.
I
do
not,
in
any
way,
question
the
correctness
of
the
He/man
decision
and
the
earlier
case.
Those
cases
dealt
with
the
investigation
of
a
lawyer's
affairs.
The
demand
for
trust
records
involved
the
disclosure
of
the
confidential
affairs
and
communications
between
solicitor
and
client.
But
the
clients'
tax
affairs
were
not
under
investigation.
That
is
not
the
situation
here.
The
tax
affairs
of
the
clients,
not
their
solicitor,
are
being
investigated.
The
clients
are,
in
reality,
claiming
the
privilege.
But
the
statute
specifically
provides
the
solicitor's
trust
account
records
of
those
clients
are
not
privileged.
In
that
aspect,
as
distinguished
from
the
Helman
case,
the
legislators
have,
in
my
view,
clearly
done
away
with
the
normal
solicitor-client
privilege.
I
am
satisfied
that,
in
the
present
circumstances,
there
does
not
exist
the
normal
solicitor-client
privilege
for
lawyers
trust
account
records
including
the
ledgers
and
cheques.
I
am
also
satisfied
that
the
fact
that
Mr.
Seguin,
acting
for
the
respondent,
combined
a
demand
for
documents
pursuant
to
subsection
231.2(1)
and
subsection
231.2(2)
and
failed
to
obtain
the
authorization
of
a
judge
as
per
subsection
231.2(2),
does
not
render
the
entire
demand
invalid
but
only
that
part
for
which
the
provision
was
not
adhered
to.
Madame
Justice
Wilson,
in
the
case
of
Stubart
Investments
Ltd.
v.
The
Queen,
[1984]
1
S.C.R.
536,
[1984]
C.T.C.
294,
84
D.T.C.
6305,
at
page
578
(C.T.C.
316;
D.T.C.
6323),
in
speaking
of
taxing
statutes
states:
Professor
Willis,
in
his
article,
supra,
accurately
forecast
the
demise
of
the
strict
interpretation
rule
for
the
construction
of
taxing
statutes.
Gradually,
the
role
of
the
tax
statute
in
the
community
changes,
as
we
have
seen,
and
the
application
of
strict
construction
to
it
receded.
Courts
today
apply
to
this
statute
the
plain
meaning
rule,
but
in
a
substantive
sense
so
that
if
a
taxpayer
is
within
the
spirit
of
the
charge,
he
may
be
held
liable.
See
Whiteman
and
Wneatcroft,
supra,
at
page
37.
This
statement
indicates
that
the
spirit
of
sections
231
and
232
of
the
Act
is
to
allow
the
respondent
to
review
and
access
a
taxpayer
which
indicates
that
the
respondent
must
be
able
to
get
the
information
he
requires
pursuant
to
section
231.2.
Therefore,
the
respondent
is
permitted
to
examine
all
trust
account
records,
including
ledger
cards,
journal
entries
and
cancelled
cheques
that
are
known
to
be
or
to
have
been
related
to
entries
or
transactions
with,
for,
or
on
behalf
of
Mr.
Groves
during
the
period
January
29,1992
to
March
18,
1992.
Costs
in
favour
of
respondent.
Order
accordingly.
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