Snell v. Haywood Et Al., [1947] CTC 406, [1946-1948] DTC 1025

FRANK Ford, J.A.:—In proceedings under part XV (summary convictions) of the Criminal Code, R.S.C. 1927, ch. 36, fourteen charges of offences for violations of sec. 80, subsec. (1) and (2), of the Income War Tax Act, R.S.C. 1927, ch. 97 [as amended by 1944-45, ch. 43, sec. 18] were laid against the plaintiff, appellant, her partner Cecil I. Neff, and one Lula Anne Neff, the sister of the appellant and the wife of Cecil I. Neff.

Shortly stated, these charges relate to false statements in income tax returns, to falsification of certain records and to destruction of records.

The informations and complaints came on for hearing on February 14, 1947, before Mr. I. F. Fitch, K.C., a police magistrate, when an application was made on behalf of the persons accused that the cases be heard in camera. Mr. Fitch took time to consider and on February 21 gave reasons which are set out in the appeal book for his view that he had no power to hear the case otherwise than in open court.

Following this ruling of the magistrate, application was made by one of the accused for (1) an order prohibiting the magistrate from taking any further proceedings in open court; (2) a mandamus requiring the magistrate to hold all proceedings, if any, on the charges in camera and to prohibit any publication or communication thereof; and (3) alternatively, a mandamus requiring the magistrate before hearing any evidence to exercise his discretion as to whether the proceedings should be held in camera or not.

This application came on for hearing before Mr. Justice Clinton J. Ford and was dismissed, the learned judge giving written reasons which are reported as Rex v. Neff, ante, p. 392.

Immediately following this judgment the present action was commenced. The plaintiff is one of the persons charged with the offences in question; the defendants are all persons employed in the service of His Majesty to whom sec. 81 of the Income War Tax Act applies.

For the purposes of the action the defendants by their statement of defence admit that counsel for the crown had stated to the magistrate that in making a case for the prosecution he intended to call as witnesses persons employed in the service of His Majesty and that there would be tendered in evidence written statements furnished under the provisions of the Income War Tax Act.

The prayer in the statement of claim asks for:

‘‘(a) A declaration that the public are not persons legally entitled to the information obtained under the provisions of the said Income War Tax Act and that the public have no right of access to any written statement furnished under the provisions of the said Act, nor to hear in open court or elsewhere any such information and/or statements.

"‘(b) An interlocutory and a permanent injunction restraining the Defendants and each of them from communicating or allowing to be communicated any information obtained under the provisions of the said Act to anyone other than the magistrate, court officers, not including barristers, but including counsel and solicitor for the Crown and for the defence, and the accused, or allowing any such person or persons to inspect or have access to any written statement furnished under the provisions of the said Act whether in open court or other wise? ‘

On March 24, 1947, before Mr. Justice Boyd McBride, the plaintiff moved for and obtained an interim injunction, the operative part of which is as follows :

"‘It Is Ordered and Directed that the Defendants and each of them be and the same are hereby restrained and an injunction is hereby granted restraining them and each of them until trial or further order from communicating or allowing to be communicated, in open Court, any information obtained under the provisions of the Income War Tax Act being Chapter 97 of the Revised Statutes of Canada 1927 and amendments thereto, in respect of Income Tax Returns of Plaintiff and/or other written statements or other information pertaining thereto, to any person or persons whosoever, or allowing any person or persons to inspect or have access to any written statement furnished under the provisions of the said Act, during the hearing of charges for violation of the said Act.

" " It Is Further Ordered and Adjudged that the Defendants and each of them be at liberty to communicate or allow to be communicated any such information and statements obtained under the provisions of the said Act and to allow inspection and access to written statements on a hearing in camera of their the Defendants’ evidence on the said charges to the presiding Police Magistrate and Court Officers (but not Counsel and Barristers not engaged or retained in the proceedings) and Counsel and Solicitors for the Crown and for the Plaintiff and the Accused. ‘ ‘

Mr. Justice Boyd McBride gave written reasons (ante, p. 401) for the order made by him.

The action came on for trial on April 3, 1947, before the chief justice of the trial division, who dissolved the injunction and dismissed the action. The present appeal is from this judgment.

Subsee. (1) and (2) of see. 81 of the Income War Tax Act are as follows:

" 1 81. No person employed in the service of His Majesty shall communicate or allow to be communicated to any person not legally entitled thereto, any information obtained under the provisions of this Act, or allow any such person to inspect or have access to any written statement furnished under the provisions of this Act.

"‘2. Any person violating any of the provisions of this section shall be liable on summary conviction to a penalty not exceeding two hundred dollars. ‘ ‘

Shortly stated, the ground taken is that sec. 81 creates a substantive right and is a privilege conferred by parliament upon the plaintiff, and that the defendants should be prohibited by injunction from giving evidence before the magistrate, or, alternatively, from giving evidence in open court.

Counsel for the appellant draws an analogy between what he calls the privilege created by sec. 81 and the privilege which exists between solicitor and client in respect of communications between them.

Even if this analogy were to be accepted, relief by way of injunction restraining the giving of evidence in court will not be granted. In Kerr on Injunctions, 6th ed., p. 490, it is said :

"‘In the exercise of its jurisdiction by injunction the Court draws a distinction between cases where a solicitor voluntarily makes a communication of what has come to his knowledge in the course of his professional employment and cases where he is required to disclose what he knows by giving evidence before a Court of justice. In the one case the Court will interfere by injunction. In the other case it will not interfere.’’

Without the production or proof of the returns alleged to be false and the records alleged to have been falsified the charges of the offences, which are created by the statute, cannot be effectively proceeded with. But it is contended that the defendants should be restrained from giving evidence in open court as by doing so they would be making to the public, who might be present, communications forbidden by the relevant section.

In my opinion sec. 81 has no such effect. The sections creating the offences with which the plaintiff has been charged may be prosecuted either on indictment or under summary convictions procedure. This implies that the ordinary procedure is to be followed. In the present instance, the crown has chosen to proceed under part XV of the Code.

By sec. 714 of the Criminal Code it is provided that:

"The room or place in which the justice sits to hear and try any complaint or information shall be deemed an open and public court, to which the public generally may have access os far as the same can conveniently contain them.”

By sec. 645 provision is made for the exclusion, by the court or Judge or justice, of the public from the room or place in which the court is being held for the trial of certain specific offences and in any case in which the court or judge or justice may be of the opinion that the same will be in the interests of public morals.

The provisions of subsecs. (1) and (2) of sec. 645 are, as stated in Reid v. Aull (1914) 26 O.W.R. 44, 5 O.W.N. 964, 16 D.L.R. 766, restricted to cases in which the court considers the exclusions to be in the interests of public morals.

Subese. (3) of sec. 645 reads as follows:

" Nothing in this section shall be construed by implication or otherwise as limiting any power heretofore possessed at common law by the presiding judge or other presiding officer of any court of excluding the general public from the courtroom in any case when such judge or officer deems such exclusion necessary or expedient.”

This subsection, in my opinion, does not give any power of exclusion of the general public from a court room other than that possessed at common law.

There is nothing in the Income War Tax Act which gives the right to a court to exclude the public on the trial of a charge for a violation of the Act; and there is, indeed, a provision which seems to make it clear that it was not intended to give any such power. Sec. 68 provides that :

"68. Proceedings before the Exchequer Court hereunder shall be held in camera upon request made to the Court by any party to the proceedings. ‘ ‘

This section is the last of a group of sections under the heading ‘‘Proceedings in Exchequer Court’ ‘ which deals with appeals from the Minister.

The limitation at common law on the power of excluding the public from a hearing has been dealt with in a number of cases including Scott v. Scott (No. 1) [1913] A.C. 417, 82 L.J.P. 74; Rex v. Lewes Prison (Governor) ; Ex parte Doyle [1917] 2 K.B. 254, 86 L.J.K.B. 1514, and McPherson v. McPherson [1936] 1 W.W.R. 33, [1986] A.C. 177, 105 L.J.P.C. 41.

The principle to be gathered from all these cases is that unless it is strictly necessary for the attainment of justice there can be no power in a court to hear in camera. In other words, before the public can be excluded the presiding officer must be satisfied that by nothing short of the exclusion ‘of the public can justice be done.

In McPherson v. McPherson the following appears in the judgment of Lord Blanesburgh at pp. 39-40:

66 the learned Judge on this occasion, albeit unconsciously, was, their Lordships think, denying his Court to the public in breach of their right to be present, a right thus expressed by Lord Halsbury in Scott v. Scott [supra] : ‘Every Court of justice is open to every subject of the King.’

“To this rule, there are, it need hardly be stated, certain strictly defined exceptions. Applications properly made in Chambers and infant cases may be particularized. But publicity is the authentic hall-mark of judicial as distinct from administrative procedure, and it can be safely hazarded that the trial of a divorce suit, a suit not entertained by the old Ecclesiastical Courts at all, is not within any exception.

" " The actual presence of the public in never of course necessary. Where Courts are held in remote parts of the Province, as they frequently must be, there may be no members of the publie available to attend. But even so, the Court must be open to any who may present themselves for admission. ‘The remoteness of the possibility of any public attendance must never by judicial action be reduced to the certainty that there will be none.’’

In Scott v. Scott, supra, Lord Shaw said, at p. 477 :

" It is needless to quote authority on this topic from legal, philosophical, or historical writers. It moves Bentham over and over again. ‘In the darkness of secrecy, sinister interest and evil in every shape have full swing. Only in proportion as publicity has place can any of the checks applicable to judicial injustice operate. Where there is no publicity there is no justice.’ ‘Publicity is the very soul of justice. It is the keenest spur to exertion and the surest of all guards against improbity. It keeps the judge himself while trying under trial. ’ ‘The security of securities is publicity. ’ But amongst historians the grave and enlightened verdict of Hallam, in which he ranks the publicity of judicial proceedings even higher than the rights of Parliament as a guarantee of public security, is not likely to be forgotten: ‘Civil liberty in this kingdom has two direct guarantees; the open administration of justice according to known laws truly interpreted, and fair constructions of evidence; and the right of Parliament, without let or interruption, to inquire into, and obtain redress of, public grievances. Of these, the first is by far the most indispensable : nor can the subjects of any State be reckoned to enjoy a real freedom, where this condition is not found both in its judicial institutions and in their constant exercise. ’ ’ ’

In Scott v. Scott, supra, Lord Halsbury said that ‘‘every Court of justice is open to every subject of the King’’ and Lord Loreburn said that: ‘‘The inveterate rule is that justice shall be administered in open Court. ’ ’

In Halsbury’s Laws of England, 2nd ed., vol. 13, p. 751, the rule and its exceptions are stated as follows:

"All cases, both civil and criminal, must be heard in open Court, but in certain exceptional cases, where the administration of justice would be rendered impracticable by the presence of the public, the Court may sit in camera. Thus the Court may so sit, either throughout the whole or part of the hearing, where it is necessary for the public safety, or where the subject-matter of the suit would otherwise be destroyed, for example, by the disclosure of a secret process or of a secret’ document, or where the Court is of opinion that witnesses are hindered in, or prevented from, giving evidence by the presence of the public. In addition the Court has been given power by statute to exclude the public either in particular proceedings or in any proceedings for an offence against morality or decency when evidence is given by children or young persons.

"The general rule, however, has no application when the Court is sitting in an administrative capacity, or in guardian- ship and lunacy cases, or where a judge, by consent, sits as an arbitrator. ‘ ‘

The hearings or trials now in question do not come within any exception to the "‘inveterate rule’’ requiring a public hearing. In his argument that sec. 81 of the Income War Tax Act created an exception Mr. German relied upon what was said by Rose, C.J.H.C. in Kaufman v. McMillan [1939] O.W.N. 415, [1939] 3 D.L.R. 446, in referring to the section.

I agree with Mr. Riley that the question for determination here, namely, that of a closed or open hearing of the charges laid, was not even remotely considered in the Kaufman case, supra.

I am clearly of the opinion also that no assistance can be gained from the consideration of the cases cited with respect to the construction of taxing statutes.

After the close of the arguments of this appeal, the court delivered judgment dismissing the appeal with costs and fixing the scale of costs of the trial and of the appeal as that under column 5.

Judgment accordingly.