MILVAIN,
C.J.T.D.:—This
application
comes
before
me
under
the
apparent
provisions
contained
in
Section
126A
of
the
Income
Tax
Act.
I
say
‘‘apparent
provisions’’
of
the
above
Act
for
reasons
that
will
appear
later.
The
Income
Tax
Department,
in
the
process
of
a
routine
check
upon
the
income
tax
situation
of
the
members
of
a
practising
firm
of
lawyers,
demanded
production
of
trust
account
ledgers,
trust
cancelled
cheques,
trust
deposit
books
and
trust
bank
statements,
all
for
the
year
ending
December
31,
1968.
A
letter
was
written
to
each:
member
of
the
firm
in
the
following
terms
:
Dear
Sir:
Requirement
for
Information
and
Production
of
Documents
1.
For
purposes
related
to
the
administration
or
enforcement
of
the
Income
Tax
Act,
I
require
from
you
forthwith,
information
and
production
of
documents
as
follows:
Trust
Account
Ledgers—Year
ending
December
31,
1968
Trust
Cancelled
Cheques—Year
ending
December
31,
1968
Trust
Deposit
Books—Year
ending
December
31,
1968
Trust
Bank
Statements—Year
ending
December
31,
1968
2.
To
comply
with
this
requirement
you
should
produce
the
information
and
documents
hereby
required
to
the
officer
of
this
Department
presenting
this
requirement
to
you.
8.
Your
attention
is
directed
to
the
penalty
provided
in
subsection
(2)
of
section
131
of
the
Income
Tax
Act
for
default
in
complying
with
this
requirement.
Yours
truly,
“T.
H.
J.
Illsey”
Director—Taxation
The
law
firm
replied
by
letter
under
date
of
March
24,
1970,
as
follows:
Dear
Sirs:
Re:
;
Helman,
Fleming,
Neve,
Kambeitz
&
Pottinger,
Barristers
and
Solicitors
We
have
your
letters
of
24th
March
addressed
separately
to
Messrs.
Fleming,
Neve,
Kambeitz
&
Pottinger
demanding
production
of
trust
account
ledgers,
trust
cancelled
cheques,
trust
deposit
books
and
trust
bank
statements
maintained
by
the
former
firm
of
Helman,
Fleming,
Neve,
Kambeitz
&
Pottinger
for
the
year
ended
31st
December,
1968.
Since
service
of
such
demands
you
have
advised
us
that
you
do
not
presently
require
to
see
the
trust
account
ledgers.
We
have
refused
to
produce
the
trust
cancelled
cheques,
trust
deposit
books
and
trust
bank
statements
on
the
ground
that
they
contain
privileged
communications
between
solicitors
and
clients.
The
solicitor-client
privilege
we
are
claiming
is
that
privilege
which
attaches
to
such
communications
at
common
law.
In
our
view
Section
126A(l)(e)
of
the
Income
Tax
Act
does
not
take
away
such
common
law
privilege
and
we
are
duty
bound
to
claim
it
on
behalf
of
our
clients.
Following
our
refusal
to
produce
such
documents
as
aforesaid,
you
placed
a
seizure
against
them
pursuant
to
Sections
126(1)
(d)
and
126A(3)
of
the
Income
Tax
Act.
The
documents
have
been
bundled
up
and
are
at
present
in
the
custody
of
the
Sheriff
of
the
Judicial
District
of
Calgary.
We
are
also
not
willing
to
divulge
the
names
of
the
clients
affected
by
our
claim
to
privilege
as
aforesaid
until
such
time
as
it
has
been
determined
whether
such
privilege
does
or
does
not
exist.
If
there
is
no
privilege
you
will,
of
course,
be
given
access
to
all
of
our
trust
accounting
records
and
will
then
have
access
to
our
clients’
names
and
addresses
as
well.
We
want
to
assure
you
that
it
is
not
our
desire
to
be
difficult
about
giving
you
access
to
the
trust
accounting
records
in
question.
If
it
were
solely
our
decision
to
make,
we
would
let
you
see
all
accounting
records
which
the
firm
has,
however,
as
we
have
pointed
out
to
you,
if
a
solicitor-client
privilege
exists
with
respect
to
trust
accounting
records,
we
have
no
alternative
but
to
claim
such
privilege
on
behalf
of
our
clients.
We
would
like
to
assure
you
of
our
co-operation
in
having
this
matter
settled
by
a
Supreme
Court
Judge
at
the
earliest
possible
date.
Yours
very
truly,
R.
Kambeitz
The
parties
appeared
before
me
and
on
the
14th
of
April,
1970,
I
granted
an
Order
in
the
following
terms
:
UPON
THE
APPLICATION
of
Helman,
Fleming,
Neve,
Kambeitz
&
Pottinger,
AND
UPON
HEARING
read
the
Notice
of
Motion
commencing
these
proceedings,
the
Affidavit
of
Linda
D.
Mack
proving
service
of
the
Notice
of
Motion;
AND
UPON
HEARING
counsel
for
the
Applicants
and
counsel
for
the
Respondent:
1.
I
hereby
fix
Thursday
the
30th
day
of
April,
A.D.
1970
at
the
hour
of
10:00
o’clock
in
the
forenoon
at
the
Court
House,
in
the
City
of
Calgary,
as
the
day
and
place
for
the
determination
of
the
question
whether
clients
of
the
Applicants
have
a
solicitorclient
privilege
in
respect
of
the
documents
seized
and
placed
in
the
custody
of
The
Sheriff
of
the
Judicial
District
of
Calgary
in
these
proceedings.
2.
I
direct
The
Sheriff
of
the
Judicial
District
of
Calgary
to
produce
to
me
the
said
documents
in
his
custody
at
the
time
and
place
of
the
aforesaid
hearing.
Basically
the
problem
involved
is
as
to
whether
amendments
made
to
the
Income
Tax
Act
have
met
the
problem
created
by
the
Judgment
of
Mr.
Justice
Sullivan
of
the
Supreme
Court
of
British
Columbia,
cited
as
Re
Income
Tax
Act;
Re
Solicitor,
40
W.W.R.
(N.S.)
270;
[19638]
C.T.C.
I.
It
was
agreed
before
me
on
the
hearing
of
argument,
in
the
following
terms:
Counsel
for
the
Applicants
and
the
Respondent
have
agreed
on
the
following:
(a)
there
are
no
procedural
irregularities;
(b)
the
officers
of
the
Department
of
National
Revenue
were
acting
for
purposes
related
to
the
administration
or
enforcement
of
the
Income
Tax
Act;
(c)
there
is
no
suggestion
of
any
wrong
doing
on
the
part
of
the
Applicants;
(d)
there
are
no
waivers
of
claims
of
privilege
by
any
clients
of
the
Applicants;
(e)
in
the
event
that
the
Court
should
hold
that
the
books
and
records
are
not
privileged,
they
shall
be
delivered
to
G.
V.
Dahlberg,
of
the
Department
of
National
Revenue,
Calgary,
Alberta,
as
being
the
officer
designated
by
the
Deputy
Minister
of
National
Revenue
for
Taxation
to
take
such
delivery;
(f)
the
books
and
records
in
question
are
accounting
records
of
the
Applicants.
It
seems
to
me
at
the
outset
that
one
must
give
consideration
to
the
relevant
sections
of
the
Act.
Naturally,
the
first
of
such
sections
are
Sections
126
and
126A.
They
are
in
the
following
terms:
INVESTIGATIONS
126.
(1)
Any
person
thereunto
authorized
by
the
Minister
for
any
purpose
related
to
the
administration
or
enforcement
of
this
Act
may,
at
all
reasonable
times,
enter
into
any
premises
or
place
where
any
business
is
carried
on
or
any
property
is
kept
or
anything
is
done
in
connection
with
any
business
or
any
books
or
records
are,
or
should
be
kept
pursuant
to
this
Act,
and
(a)
audit
or
examine
the
books
and
records
and
any
account,
voucher,
letter,
telegram
or
other
document
which
relates
or
may
relate
to
the
information
that
is
or
should
be
in
the
books
or
records
or
the
amount
of
tax
payable
under
this
Act,
(b)
examine
property
described
by
an
inventory
or
any
property,
process
or
matter
an
examination
of
which
may,
in
his
opinion,
assist
him
in
determining
the
accuracy
of
an
inventory
or
in
ascertaining
the
information
that
is
or
should
be
in
the
books
or
records
or
the
amount
of
any
tax
payable
under
this
Act,
(c)
require
the
owner
or
manager
of
the
property
or
business
and
any
other
person
on
the
premises
or
place
to
give
him
all
reasonable
assistance
with
his
audit
or
examination
and
to
answer
all
proper
questions
relating
to
the
audit
or
examination
either
orally
or,
if
he
so
requires,
in
writing,
on
oath
or
by
statutory
declaration
and,
for
that
purpose,
require
the
owner
or
manager
to
attend
at
the
premises
or
place
with
him,
and
(d)
if,
during
the
course
of
an
audit
or
examination,
it
appears
to
him
that
there
has
been
a
violation
of
this
Act
or
a
regulation,
seize
and
take
away
any
of
the
records,
books,
accounts,
vouchers,
letters,
telegrams
and
other
documents
and
retain
them
until
they
are
produced
in
any
court
proceedings.
(2)
The
Minister
may,
for
any
purpose
related
to
the
administration
or
enforcement
of
this
Act,
by
registered
letter
or
by
a
demand
served
personally,
require
from
any
person
(a)
any
information
or
additional
information,
including
a
return
of
income
or
a
supplementary
return,
or
(b)
production,
or
production
on
oath,
of
any
books,
letters,
accounts,
invoices,
statements
(financial
or
otherwise)
or
other
documents,
within
such
reasonable
time
as
may
be
stipulated
therein.
SEARCH
(3)
The
Minister
may,
for
any
purpose
related
to
the
administration
or
enforcement
of
this
Act,
with
the
approval
of
a
judge
of
the
Exchequer
Court
of
Canada
or
of
a
superior
or
county
court,
which
approval
the
judge
is
hereby
empowered
to
give
upon
ex
parte
application,
authorize
in
writing
any
officer
of
the
Department
of
National
Revenue,
together
with
such
members
of
the
Royal
Canadian
Mounted
Police
or
other
peace
officers
as
he
calls
on
to
assist
him
and
such
other
persons
as
may
be
named
therein,
to
enter
and
search,
if
necessary
by
force,
any
building,
receptacle
or
place
for
documents,
books,
records,
papers
or
things
which
may
afford
evidence
as
to
the
violation
of
any
provision
of
this
Act
or
a
regulation
and
to
seize
and
take
away
any
such
documents,
books,
records,
papers
or
things
and
retain
them
until
they
are
produced
in
any
court
proceedings.
INQUIRY
(4)
The
Minister
may,
for
any
purpose
related
to
the
administration
or
enforcement
of
this
Act,
authorize
any
person,
whether
or
not
he
is
an
officer
of
the
Department
of
National
Revenue,
to
make
such
inquiry
as
he
may
deem
necessary
with
reference
to
anything
relating
to
the
administration
or
enforcement
of
this
Act.
COPIES
(5)
Where
any
book,
record
or
other
document
has
been
seized,
examined
or
produced
under
this
section,
the
person
by
whom
it
is
seized
or
examined
or
to
whom
it
is
produced
or
any
officer
of
the
Department
of
National
Revenue
may
make,
or
cause
to
be
made,
one
or
more
copies
thereof
and
a
document
purporting
to
be
certified
by
the
Minister
or
a
person
thereunto
authorized
by
the
Minister
to
be
a
copy
made
pursuant
to
this
section
is
admissible
in
evidence
and
has
the
same
probative
force
as
the
original
document
would
have
if
it
had
been
proven
in
the
ordinary
way.
COMPLIANCE
(6)
No
person
shall
hinder
or
molest
or
interfere
with
any
person
doing
anything
that
he
is
authorized
by
or
pursuant
to
this
section
to
do
or
prevent
or
attempt
to
prevent
any
person
doing
any
such
thing
and,
notwithstanding
any
other
law
to
the
contrary,
every
person
shall,
unless
he
is
unable
to
do
so,
do
everything
he
is
required
by
or
pursuant
to
this
section
to
do.
ADMINISTRATION
OF
OATHS
(7)
Every
person
thereunto
authorized
by
the
Minister
may
administer
or
receive
an
oath,
affirmation
or
statutory
declaration
required
to
be
given
by
or
pursuant
to
this
section.
POWERS
(8)
For
the
purpose
of
an
inquiry
authorized
under
subsection
(4),
the
person
authorized
to
make
the
inquiry
has
all
the
powers
and
authorities
conferred
on
a
commissioner
by
sections
4
and
5
of
the
Inquiries
Act
or
which
may
be
conferred
on
a
commissioner
under
section
11
thereof.
126A.
(1)
In
this
section
“JUDGE”
(a)
“judge”
means
a
judge
of
a
superior
court
having
jurisdiction
in
the
province
where
the
matter
arises
or
a
judge
of
the
Exchequer
Court
of
Canada;
“CUSTODIAN”
(b)
“custodian”
means
a
person
in
whose
custody
a
package
is
placed
pursuant
to
subsection
(3)
;
“LAWYER”
(c)
“lawyer”
means,
in
the
province
of
Quebec,
an
advocate,
lawyer
or
notary
and,
in
any
other
province
of
Canada,
a
barrister
or
solicitor;
“OFFICER”
(d)
“officer”
means
a
person
acting
under
authority
conferred
by
or
under
section
126;
and
“SOLICITOR-CLIENT
PRIVILEGE”
(e)
“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.
SOLICITOR-CLIENT
PRIVILEGE
AS
DEFENCE
(2)
Where
a
lawyer
is
prosecuted
for
failure
to
comply
with
a
requirement
under
section
126
to
give
information
or
to
produce
a
document,
he
shall
be
acquitted
if
he
establishes
to
the
satisfaction
of
the
court
(a)
that
he,
on
reasonable
grounds,
believed
that
a
client
of
his
has
a
solicitor-client
privilege
in
respect
of
the
information
or
document;
and
(b)
that
the
lawyer
communicated
to
the
Minister,
or
some
person
duly
authorized
to
act
for
the
Minister,
his
refusal
to
comply
with
the
requirement
together
with
a
claim
that
a
named
client
of
the
lawyer
has
a
solicitor-client
privilege
in
respect
of
the
information
or
document.
EXAMINATION
OR
SEIZURE
OF
CERTAIN
DOCUMENTS
WHERE
PRIVILEGE
CLAIMED
(3)
Where
an
officer
is
about
to
examine
or
seize
a
document
in
the
possession
of
a
lawyer
and
the
lawyer
claims
that
a
named
client
of
his
has
a
solicitor-client
privilege
in
respect
of
that
document,
the
officer
shall,
without
examining
or
making
copies
of
the
document,
(a)
seize
the
document
and
place
it,
together
with
any
other
document
in
respect
of
which
the
lawyer
at
the
same
time
makes
the
same
claim
on
behalf
of
the
same
client,
in
a
package
and
suitably
seal
and
identify
the
package;
and
(b)
place
the
package
in
the
custody
of
the
sheriff
of
the
district
or
county
in
which
the
seizure
was
made
or,
if
the
officer
and
the
lawyer
agree
in
writing
upon
a
person
to
act
as
custodian,
in
the
custody
of
such
person.
APPLICATION
TO
JUDGE
(4)
Where
a
document
has
been
seized
and
placed
in
custody
under
subsection
(3),
the
client,
or
the
lawyer
on
behalf
of
the
client,
may
(a)
within
14
days
from
the
day
the
document
was
so
placed
in
custody,
apply,
upon
3
days’
notice
of
motion
to
the
Deputy
Attorney
General
of
Canada,
to
a
judge
for
an
order
(i)
fixing
the
day
(not
later
than
21
days
after
the
date
of
the
order)
and
place
for
the
determination
of
the
question
whether
the
client
has
a
solicitor-client
privilege
in
respect
of
the
document,
and
(ii)
requiring
the
custodian
to
produce
the
document
to
the
judge
at
that
time
and
place;
(b)
serve
a
copy
of
the
order
on
the
Deputy
Attorney
General
of
Canada
and
the
custodian
within
6
days
of
the
day
on
which
it
was
made,
and,
within
the
same
time,
pay
to
the
custodian
the
estimated
expenses
of
transporting
the
document
to
and
from
the
place
of
hearing
and
of
safeguarding
it;
and
(c)
if
he
has
proceeded
as
authorized
by
paragraph
(b),
apply,
at
the
appointed
time
and
place,
for
an
order
determining
the
question.
DISPOSITION
OF
APPLICATION
(5)
An
application
under
paragraph
(c)
of
subsection
(4)
shall
be
heard
in
camera,
and
on
the
application
(a)
the
judge
may,
if
he
considers
it
necessary
to
determine
the
question,
inspect
the
document
and,
if
he
does
so,
he
shall
ensure
that
it
is
repackaged
and
resealed;
and
(b)
the
judge
shall
decide
the
matter
summarily
and,
(i)
if
he
is
of
the
opinion
that
the
client
has
a
solicitorclient
privilege
in
respect
of
the
document,
and
shall
order
the
custodian
to
deliver
the
document
to
the
lawyer,
and
(ii)
if
he
is
of
the
opinion
that
the
client
does
not
have
a
solicitor-client
privilege
in
respect
of
the
document,
shall
order
the
custodian
to
deliver
the
document
to
the
officer
or
some
other
person
designated
by
the
Deputy
Minister
of
National
Revenue
for
Taxation,
and
he
shall,
at
the
same
time,
deliver.
concise
reasons
in
which
he
shall
describe
the
nature
of
the
document
without
divulging
the
details
thereof.
ORDER
TO
CUSTODIAN
TO
DELIVER
(6)
Where
a
document
has
been
seized
and
placed
in
custody
under
subsection
(3)
and
a
judge,
on
the
application
of
the
Attorney
General
of
Canada,
is
satisfied
that
neither
the
client
nor
the
lawyer
has
made
an
application
under
paragraph.
(a)
of
subsection
(4),
or,
having
made
that
application,
neither
the
client
nor
the
lawyer
has
made
an
application
under
paragraph
(c)
thereof,
he
shall
order
the
custodian
to
deliver
the
document
to
the
officer
or
some
other
person
designated
by
the
Deputy
Minister
of
National
Revenue
for
Taxation.
DELIVERY
BY
CUSTODIAN
(7)
The
custodian
shall
(a)
deliver
the
document
to
the
lawyer
(i)
in
accordance
with
a
consent
executed
by
the
officer
or
by
or
on
behalf
of
the
Deputy
Attorney
General
of
Canada
or
the
Deputy
Minister
of
National
Revenue
for
Taxation,
or
(ii)
in
accordance
with
an
order
of
a
judge
under
this
section;
or
(b)
deliver
the
document
to
the
officer
or
some
other
person
designated
by
the
Deputy
Minister
of
National
Revenue
for
Taxation
(i)
in
accordance
with
a
consent
executed
by
the
lawyer
or
the
client,
or
(ii)
in
accordance
with
an
order
of
a
judge
under
this
section.
APPLICATIONS
TO
ANOTHER
JUDGE
(8)
Where
the
judge
to
whom
an
application
has
been
made
under
this
section
for
any
reason
cannot
act
or
continue
to
act
under
this
section,
subsequent
applications
under
this
section
may
be
made
to
another
judge.
COSTS
(9)
No
costs
may
be
awarded
upon
the
disposition
of
any
application
under
this
section.
DIRECTIONS
(10)
Where
any
question
arises
as
to
the
course
to
be
followed
in
connection
with
anything
done
or
being
done
under
this
section
(other
than
subsection
(2)
or
(3))
and
there
is
no
direction
in
this
section
with
respect
thereto,
a
judge
may
give
such
direction
with
regard
thereto
as,
in
his
opinion,
is
most
likely
to
carry
out
the
object
of
this
section
of
allowing
solicitor-client
privilege
for
proper
purposes.
PROHIBITION
(11)
The
custodian
shall
not
deliver
a
document
to
any
person
except
in
accordance
with
an
order
of
a
judge
or
a
consent
under
this
section
or
except
to
any
officer
or
servant
of
the
custodian
for
the
purposes
of
safeguarding
the
document.
(12)
No
officer
shall
examine
or
seize
a
document
in
the
possession
of
a
lawyer
without
giving
him
a
reasonable
opportunity
of
making
a
claim
under
subsection
(3).
AUTHORITY
TO
MAKE
COPIES
(13)
At
any
time
while
a
document
is
in
the
custody
of
a
custodian
under
this
section,
a
judge
may,
upon
an
ex
parte
application
of
the
lawyer,
authorize
the
lawyer
to
examine
or
make
a
copy
of
the
document
in
the
presence
of
the
custodian
or
the
judge
by
an
order
that
shall
contain
such
provisions
as
may
be
necessary
to
ensure
that
the
document
is
repackaged
and
that
the
package
is
resealed
without
alteration
or
damage.
WAIVER
OF
CLAIM
OF
PRIVILEGE
(14)
Where
a
lawyer
has,
for
the
purposes
of
subsection
(2)
or
(3),
made
a
claim
that
a
named
client
of
his
has
a
solicitorclient
privilege
in
respect
of
information
or
a
document,
he
shall
at
the
same
time
communicate
to
the
Minister
or
some
person
duly
authorized
to
act
for
the
Minister
the
address
of
the
client
last
known
to
him
so
that
the
Minister
may
endeavour
to
advise
the
client
of
the
claim
of
privilege
that
has
been
made
on
his
behalf
and
may
thereby
afford
him
an
opportunity,
if
it
is
practicable
within
the
time
limited
by
this
section,
of
waiving
the
claim
of
privilege
before
the
matter
comes
on
to
be
decided
by
a
judge
or
other
tribunal.
In
the
first
place
it
will
be
noted
that
Section
126
provides
in
subsection
(1)
that
the
books
and
records
that
are
envisaged
are
those
‘‘kept
pursuant
to
this
Act’’.
The
section
then
generally
proceeds
to
outline
and
define
the
powers
of
those
authorized
under
the
Act
to
scrutinize,
and
if
necessary
seize
and
take
the
documents
and
material
referred
to.
It
is
further
to
be
noticed
that
under
the
provisions
of
Section
126A
there
is
a
definition
in
subsection
(1)(e)
of
solicitor-client
privilege.
It
is
also
particularly
to
be
noted
that
that
definition
carries
with
it
the
following
words:
‘‘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”.
The
quoted
words
were
added,
I
am
sure,
in
an
endeavour
to
overcome
the
judgment
of
Sullivan,
J.
above
referred
to.
In
view
of
the
fact
that
the
exception
is
confined
to
‘‘this
section’’,
namely
Seetion
126A,
it
could
not
affect
any
basic
common
law
right
to
a
claim
of
privilege,
whether
in
Court
or
otherwise.
Such
being
the
case,
in
my
view
the
exception
placed
in
the
definition
does
not
meet
in
any
way
the
effect
of
Mr.
Justice
Sullivan’s
decision.
This
appears
to
be
particularly
clear
when
one
notes
that
Section
126A
is
procedural
in
its
effect,
rather
than
substantive.
It
is
to
be
noted
that
under
subsection
(2),
where
a
lawyer
is
prosecuted
for
failure
to
comply
with
the
provisions
of
Section
126,
he
shall
be
acquitted
if
he
establishes
(a)
that
he,
on
reasonable
grounds,
believed
that
a
client
of
his
has
a
solicitor
and
client
privilege
in
respect
of
the
information
or
documents,
and
(b)
that
the
lawyer
communicated
to
the
Minister
or
some
person
duly
authorized
to
act
for
the
Minister,
his
refusal
to
comply
with
the
requirement
together
with
a
claim
that
a
named
client
of
the
lawyer
has
a
solicitor-client
privilege
in
respect
of
the
information
or
document.
The
section
then
proceeds,
under
subsection
(3)
to
provide
that
where
an
officer
is
about
to
examine
or
seize
such
a
document
in
the
possession
of
a
lawyer
and
the
lawyer
claims
that
a
named
client
has
a
privilege,
the
officer,
without
examining,
may
(a)
seize
the
document,
(b)
place
the
document
in
custody
of
a
Sheriff
or
other
custodian.
The
section
then
proceeds
to
provide
in
subsection
(4)
that
where
a
document
has
been
seized
and
placed
in
custody
under
subsection
(3),
the
client,
or
the
lawyer
on
behalf
of
the
client,
may
proceed
with
an
application
to
a
Court
to
determine
whether
or
not
the
claim
of
privilege
shall
or
shall
not
be
sustained.
At
this
stage
I
call
attention
to
the
fact
that
the
statute
appears
to
provide
in
express
terms
that
it
is
only
where
privilege
has
been
claimed
on
behalf
of
a
named
client
that
the
whole
mechanism
envisaged
for
determination
of
the
question
can
be
put
in
motion.
In
the
present
instance
the
claim
of
privilege,
as
appears
from
the
quoted
letter,
is
not
on
behalf
of
any
particular
named
client.
It
is
for
that
reason
that
I
intimated
at
the
outset
that
this
application
is
apparently
under
the
provisions
of
Section
126A.
Under
the
circumstances
I
have
very
grave
doubt
as
to
whether
or
not
I
have
any
jurisdiction
at
all.
However,
in
view
of
the
fact
that
all
of
the
parties
before
me
agreed
that
there
were
no
procedural
irregularities
and
appeared
to
be
desirous
of
getting
an
expression
of
judicial
opinion,
I
propose
giving
a
judicial
opinion.
In
my
opinion
all
of
the
documents
are
not
subject
to
production
and
search
by
the
Income
Tax
Department
under
the
circumstances
extant
in
this
instance.
I
will
give
my
reasons
for
that
opinion
immediately.
In
the
first
place
I
think
it
neces-
sary
to
look
at
the
provisions
of
Section
125
of
the
Income
Tax
Act.
It
is
in
these
terms
:
125.
(1)
Every
person
carrying
on
business
and
every
person
who
is
required,
by
or
pursuant
to
this
Act,
to
pay
or
collect
taxes
or
other
amounts
shall
keep
records
and
books
of
account
(including
an
annual
inventory
kept
in
prescribed
manner)
at
his
place
of
business
or
residence
in
Canada
or
at
such
other
place
as
may
be
designated
by
the
Minister,
in
such
form
and
containing
such
information
as
will
enable
the
taxes
payable
under
this
Act
or
the
taxes
or
other
amounts
that
should
have
been
deducted,
withheld
or
collected
to
be
determined.
(2)
Where
a
person
has
failed
to
keep
adequate
records
and
books.
of
account
for
the
purposes
of
this
Act,
the
Minister
may
require
him
to
keep
such
records
and
books
of
account
as
he
may
specify
and
that
person
shall
thereafter
keep
records
and
books
of
account
as
so
required.
(3)
Every
person
required
by
this
section
to
keep
records
and
books
of
account
shall,
until
written
permission
for
their
disposal
is
obtained
from
the
Minister,
retain
every
such
record
or
book
of
account
and
every
account
or
voucher
necessary
to
verify
the
information
in
any
such
record
or
books
of
account.
From
the
above-quoted
section
it
appears
that
the
type
of
books
and
records
that
are
required
to
be
kept
under
the
terms
of
the
Act
are
those
that
deal
with
the
operation
of
a
business
or
profession
in
so
far
as
those
records
touch
upon
the
income
and
consequently
the
tax
payable
by
the
person
or
persons
operating
the
business
or
profession.
I
can
see
no
reason
why
lawyers
in
the
practice
of
their
profession
would
be
required
to
keep
a
trust
account
at
all
under
the
provisions
of
the
Income
Tax
Act.
In
this
province
it
is
by
virtue
of
the
impact
of
the
Legal
Professions
Act
that
a
trust
account
must
be
kept.
It
would
seem
to
me
therefore,
that
trust
records
not
being
records
kept
for
the
purposes
of
the
Income
Tax
Act,
are
not
affected
in
any
fashion
by
the
terms
of
the
Income
Tax
Act
as
a
general
proposition.
I
feel
sure
though,
that
if
the
Department
were
investigating
the
tax
situation
of
a
particular
individual
who
happened
to
be
a
client
of
a
firm
of
solicitors,
that
then,
under
the
general
laws
relating
to
such
matters,
the
information
in
the
hands
of
the
lawyer
might
become
produceable
in
a
Court,
and
perhaps
even
under
the
provisions
of
the
Act.
f
I
am
right
in
this
conclusion
the
matter
would
be
entirely
ended,
because
the
Income
Tax
Department
not
seeking
information
with
respect
to
a
particular
client,
has
no
right
to
look
into
the
trust
records,
which
are
not
records
kept
pursuant
to
the
Income
Tax
Act.
I
am
further
of
the
view
that
the
records
are
not.
reachable
for
the
following
reason.,
At
common
law,
and
entirely
apart
from
any
question
of
privilege
as
we
consider
that
term
in
connection
with
the
production
of
evidence
at
a
trial,
a
solicitor
shall
not
disclose
the
affairs
or
even
the
names
of
his
clients
to
any
one.
In
fact
the
prohibition
against
such
disclosure
is
so
firmly
embedded
that
lawyers
have
been
enjoined
by
way
of
injunction
from
making
such
disclosures.
See
such
cases
as
Snell
v.
Haywood,
[1947]
C.T.C.
401,
406;
[1947]
1
W.W.R.
790;
Beer
v.
Ward,
37
E.R.
779;
and
Lewis
v.
Smith,
41
E.R.
1526.
Kerr
on
Injunctions,
page
490,
carries
the
following
statement
:
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..
In
my
view
it
would
take
far
more
definite
wording
in
a
statute
to
permit
invasion
of
such
profound
common
law
principles
than
can
be
found
in
any
of
the
provisions
of
the
Income
Tax
Act
in
so
far
as
the
same
are
relevant
to
the
problem
before
me.
Clearly,
those
definite
words
of
invasion
do
not
appear
and
not
appearing
there
is
no
right
to
invade
the
common
law
principles.
For
the
reasons
expressed
I
am
of
the
view
that
the
documents
referred
to
cannot
be
looked
at
and
that
the
Sheriff
shall
return
them
to
the
law
firm.
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