Walsh,
J.:—Applicants
move
for
an
order
pursuant
to
section
18
of
the
Federal
Court
Act
and
section
24
of
the
Constitution
Act,
1982
—
(a)
quashing
the
seizure
and
taking
away
of
the
documents
by
respondent,
Mr.
R.
O.
Bailey,
on
December
22,
1983;
(b)
quashing
the
application
pursuant
to
subsection
231(2)
of
the
Income
Tax
Act,
dated
April
17,
1984,
signed
by
the
respondent
James
Bagnall
for
the
retention
of
the
documents
by
the
Minister
of
National
Revenue
until
they
are
produced
in
any
court
proceedings.
ON
THE
GROUNDS
THAT:
(i)
Sections
231
(1)(d)
and
231(2)
of
the
Income
Tax
Act
are
inconsistent
with
section
8
of
the
Constitution
Act,
1982
and
of
no
force
or
effect.
(ii)
The
said
application
is
inconsistent
with
section
8
of
the
Constitution
Act,
1982
and
of
no
force
or
effect.
(iii)
The
said
application
is
illegal,
irregular,
null
and
void.
(iv)
The
search,
seizure,
removal
and
possession
of
the
seized
effects
as
executed
by
the
respondents
and
their
representatives
is
unreasonable,
illegal,
irregular,
null
and
void.
Applicants
also
seek
an
order
for
the
return
of
the
documents,
as
well
as
any
copies
and
extracts
thereof
seized
and
taken
away
on
December
22,
1983,
by
the
respondent
R.O.
Bailey
and
retained
pursuant
to
the
application
of
respondent
James
Bagnall
dated
April
17,
1984.
Sections
of
the
Income
Tax
Act
in
effect
at
the
relevant
times
which
bear
on
the
matter
may
be
cited
as
follows:
231.
(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,
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
documents,
books,
records,
papers
or
things
that
may
be
required
as
evidence
as
to
the
violation
of
any
provision
of
this
Act
or
a
regulation.
231.
(2)
Return
of
documents,
books,
etc.
—
The
Minister
shall,
(a)
within
120
days
from
the
date
of
seizure
of
any
documents,
books,
records,
papers
or
things
pursuant
to
paragraph
(1)(d),
or
(b)
if
within
that
time
an
application
is
made
under
this
subsection
that
is,
after
the
expiration
of
that
time,
rejected,
then
forthwith
upon
the
disposition
of
the
application,
return
the
documents,
books,
records,
papers
or
things
to
the
person
from
whom
they
were
seized
unless
a
judge
of
a
superior
court
or
county
court,
on
application
made
by
or
on
behalf
of
the
Minister,
supported
by
evidence
on
oath
establishing
that
the
Minister
has
reasonable
and
probable
grounds
to
believe
that
there
has
been
a
violation
of
this
Act
or
a
regulation
and
that
the
seized
documents,
books,
records,
papers
or
things
are
or
may
be
required
as
evidence
in
relation
thereto,
orders
that
they
be
retained
by
the
Minister
until
they
are
produced
in
any
court
proceedings,
which
order
the
judge
is
hereby
empowered
to
give
on
ex
parte
application.
(4)
Search.
—
Where
the
Minister
has
reasonable
and
probable
grounds
to
believe
that
a
violation
of
this
Act
or
a
regulation
has
been
committed
or
is
likely
to
be
committed,
he
may,
with
the
approval
of
a
judge
of
a
superior
or
county
court,
which
approval
the
judge
is
hereby
empowered
to
give
on
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
that
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.
(9)
Copies.
—
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.
It
is
not
in
dispute
that
during
the
course
of
a
tax
audit
of
F.
K.
Clayton
Group
Limited
by
R.
O.
Bailey
an
officer
of
the
Department
of
National
Revenue
pursuant
to
section
231
of
the
Income
Tax
Act
ledgers
and
other
books
and
documents
of
the
company
for
the
years
1977
to
1982
were
examined
as
well
as
the
tax
returns
of
F.
K.
Clayton
Group
Limited
and
Frederick
Keith
Clayton
for
the
taxation
years
1978
to
1982.
As
a
result
of
the
investigation
it
was
ascertained
that
a
number
of
items
were
charged
to
the
company
allegedly
for
personal
purchases
or
work
done
for
or
on
behalf
of
F.
K.
Clayton
or
his
family,
and
when
questioned
about
them
on
December
21,1983
by
Mr.
Bailey
in
the
presence
of
another
officer
of
the
Department,
R.
J.
Churchill,
he
allegedly
made
a
number
of
admissions
relating
to
these
entries
and
payments.
Mr.
Bailey
states
in
an
affidavit
dated
April
17,
1984
that
as
a
result
of
this
he
had
reasonable
and
probable
grounds
to
believe
that
a
violation
of
section
239
of
the
Income
Tax
Act
had
been
committed
by
the
F.
K.
Clayton
Group
Limited
and
its
president,
Frederick
Keith
Clayton,
so
in
the
course
of
his
enquiry
he
seized
pursuant
to
paragraph
231
(1)(d)
of
the
Act
various
documents,
books,
registers,
records,
papers
and
other
things
related
to
their
affairs
relating
to
the
1978
to
1982
fiscal
periods,
the
seizure
being
made
on
December
22,
1983,
and
that
they
may
be
required
as
evidence
in
court
proceedings
relating
to
the
violations
of
the
Income
Tax
Act
cited
in
detail
in
his
affidavit.
This
affidavit
was
made
in
support
of
an
application
pursuant
to
subsection
231(2)
of
the
Act,
and
led
to
an
order
by
Judge
Street
of
the
County
Court
of
Middlesex
where
the
seizure
was
made,
dated
April
19,
1984,
authorizing
the
Minister
to
retain
the
said
documents
until
they
are
produced
in
court
proceedings.
In
a
second
affidavit
dated
June
12,
1985
Mr.
Bailey
states
that
his
investigation
had
commenced
in
June
1983
being
referred
to
him
by
another
auditor
in
relation
to
what
appeared
to
be
expenses
claimed
by
the
company
which
were
not
properly
deductible
and
which
Mr.
Clayton
had
not
included
in
his
personal
returns.
Inquiries
were
also
made
from
third
parties.
This
led
to
the
appointment
with
Mr.
Clayton
on
December
21.
In
this
affidavit
he
states
that
it
appeared
to
him
that
violations
of
section
239
of
the
Act
had
been
committed
indicating
a
pattern
of
wilful
conduct
aimed
at
misrepresenting
the
amount
of
taxes
payable
and
that
books,
records
and
other
documentation
were
required
as
evidence
of
the
said
violations,
and
in
the
circumstances
where
the
taxpayer
had
been
directly
confronted
with
the
evidence
of
improperly
deducted
and
misrepresented
expenses
these
records
should
be
secured
as
“they
may
not
have
been
safe
if
left
in
possession
of
the
taxpayers”.
He
then
proceeded
to
seize
them,
the
inventory
being
produced,
copy
being
delivered
to
Mr.
Clayton
on
January
16,
1984,
at
which
time
with
consent
of
Mr.
Clayton
he
obtained
other
banking
records
covering
December
1982,
adding
these
to
the
inventory
which
only
included
bank
records
up
to
December
9,
1982.
These
additional
bank
records
were
not
seized
and
have
since
been
returned
so
nothing
turns
on
this.
A
series
of
charges
were
laid
on
August
16,1985
not
only
against
respondents
herein
but
also
against
Gary
M.
Ballas
the
Clayton
external
accountant.
There
is
no
corresponding
application
by
him
before
the
court
with
respect
to
any
documents
seized
belonging
to
him.
A
summary
of
the
list
of
charges
laid
indicates
that
with
one
exception
relating
to
the
purchase
of
a
Betamex
for
$1,710.93
on
December
18,
1980,
no
charges
were
laid
for
any
of
the
alleged
improperly
entered
items
for
the
years
prior
to
1980,
all
of
the
charges
relating
to
the
1981
and
1982
taxation
years.
Although
it
does
not
appear
in
the
record
the
Court
was
advised
by
counsel
that
the
trials
have
been
set
down
for
April
21,
1986.
Relying
on
the
cross-examination
of
Mr.
Bailey
on
his
affidavits,
applicant's
counsel
submits
that
he
should
instead
of
taking
possession
of
the
documents
have
obtained
a
search
warrant
under
the
Criminal
Code.
He
had,
according
to
his
evidence,
come
to
a
reasonable
belief
that
there
had
been
violations
of
section
239
of
the
Income
Tax
Act.
Paragraph
231
(1)(d)
does
not
require
the
approval
or
authorization
for
a
warrant
from
a
judge
or
justice
of
the
peace,
unlike
subsections
231(4)
and
231(2)
both
of
which
require
judicial
intervention.
Subsection
231(4)
has
already
been
held
to
contravene
section
8
of
the
Constitution
Act,
1982
by
the
majority
judgment
of
the
Federal
Court
of
Appeal
in
M.N.R.
v.
Kruger
Inc.
et
al,
[1984]
C.T.C.
506;
84
D.T.C.
6478
and
the
companion
case
of
Domenico
Vespoli
et
al
v.
M.N.R.,
[1984]
C.T.C.
519;
84
D.T.C.
6489,
both
judgments
being
received
September
27,
1984,
as
well
as
in
subsequent
cases,
such
as
Gerald
B.
Lewis
v.
M.N.R.,
[1984]
C.T.C.
642;
84
D.T.C.
6550,
and,
while
these
judgments
were
not
appealed
to
the
Supreme
Court
the
case
of
Lawson
A.
Hunter
et
al
v.
Southam
Inc.,
84
D.T.C.
6467;
14
C.C.C.
(3d)
97,
although
dealing
with
subsections
10(1)
and
(3)
of
the
Combines
Investigation
Act
rather
than
with
section
231
of
the
Income
Tax
Act
applies
the
same
principles.
At
6470
(C.C.C.
102-3)
for
example
the
judgment
states:
absent
exceptional
circumstances,
the
provisions
of
s.
443
of
the
Criminal
Code,
which
extends
to
investigations
of
Criminal
Code
offences
the
procedural
safeguards
the
common
law
required
for
entries
and
searches
for
stolen
goods,
constitute
the
minimal
prerequisites
for
reasonable
searches
and
seizures
in
connection
with
the
investigation
of
any
criminal
offence,
including
possible
violations
of
the
Combines
Investigation
Act.
As
in
the
present
case
it
was
not
the
conduct
of
the
appellants,
but
rather
the
legislation
under
which
they
acted
which
was
in
issue.
No
complaint
has
been
made
with
respect
to
Mr.
Bailey’s
conduct.
At
6474
(C.C.C.
109)
Dickson,
J,
rendering
the
Southam
judgment
states:
A
requirement
of
prior
authorization,
usually
in
the
form
of
a
valid
warrant,
has
been
a
consistent
prerequisite
for
a
valid
search
and
seizure
both
at
common
law
and
under
most
statutes.
Such
a
requirement
puts
the
onus
on
the
state
to
demonstrate
the
superiority
of
its
interest
to
that
of
the
individual.
As
such
it
accords
with
the
apparent
intention
of
the
Charter
to
prefer,
where
feasible,
the
right
of
the
individual
to
be
free
from
state
interference
to
the
interests
of
the
state
in
advancing
its
purposes
through
such
interference.
I
recognize
that
it
may
not
be
reasonable
in
every
instance
to
insist
on
prior
authorization
in
order
to
validate
governmental
intrusions
upon
individuals’
expectations
of
privacy.
Nevertheless,
where
it
is
feasible
to
obtain
prior
authorization,
I
would
hold
that
such
authorization
is
a
precondition
for
a
valid
search
and
seizure.
and
again
on
the
same
page
in
reference
to
the
American
case
of
Katz
v.
United
States,
389
U.S.
347
(1967):
Nevertheless,
I
would
in
the
present
instance
respectfully
adopt
Stewart
J.’s
formulation
as
equally
applicable
to
the
concept
of
“‘unreasonableness”
under
s.
8,
and
would
require
the
party
seeking
to
justify
a
warrantless
search
to
rebut
this
presumption
of
unreasonableness.
The
cross-examination
of
Mr.
Bailey
dealt
with
the
unreasonableness
of
his
taking
possession
of
the
documents
pursuant
to
paragraph
231
(1)(d)
of
the
Act.
He
pointed
out
that
it
would
have
been
quite
difficult
to
have
obtained
a
warrant
on
December
22,
although
there
were
five
or
six
county
court
judges
in
the
building
next
to
the
tax
department
in
London
and
a
number
of
justices
of
the
peace
in
the
same
building
who
could
issue
a
search
warrant
under
the
Criminal
Code
as
he
felt
that
it
would
take
some
days
to
prepare
the
documents
for
it.
Having
confronted
the
taxpayer
he
felt
that
this
put
the
care
of
the
records
in
jeopardy.
At
page
57
of
his
examination
states:
The
difficulty,
what
I’m
trying
to
bring
out
here
is
that
when
your
faced
with
confronting
a
taxpayer,
then
the
situation
is
different
than
one
where
the
taxpayer
hasn't
been
confronted,
and
you
can
write
an
Affidavit
and
take
it
before
a
judge.
I
viewed
this
as
having
confronted
a
taxpayer,
making
him
aware
of
the
violations
under
the
Income
Tax
Act,
and
that
I
couldn't,
in
my
view,
afford
to
leave
the
records
out
of
my
control
at
that
point,
because
I
thought
that
the
violations
were
serious
enough
that
it
may
lead
to
a
full-scale
investigation
and
possible
charges
under
the
Income
Tax
Act.
He
therefore
did
not
think
it
feasible
to
leave
his
associate
Mr.
Churchill
there
while
he
went
before
a
judge
to
get
a
warrant.
The
documentation
prepared
and
submitted
to
Judge
Street
to
obtain
the
continued
retention
order
pursuant
to
subsection
231(2)
tends
to
bear
out
the
need
for
considerable
preparation.
It
must
be
borne
in
mind
that
the
occasion
was
not
a
search
of
the
records
of
applicant
for
evidence
of
the
commission
of
criminal
offences
for
which
a
search
warrant
was
necessary,
but
rather
the
continuation
of
an
audit
which
had
earlier
given
some
indication
that
offences
under
the
Income
Tax
Act
may
have
occurred,
which
as
the
audit
progressed
and
incidents
of
allegedly
improper
entries
and
invoices
multiplied,
tended
to
confirm
these
suspicions
until
Mr.
Bailey
had
a
reasonable
belief
that
this
was
the
case,
and
advised
Mr.
Clayton
that
it
was
a
serious
matter
which
might
result
in
prosecution
of
criminal
charges.
He
then
took
possession
of
the
records
in
question
pursuant
to
paragraph
231
(1)(d).
It
should
be
noted
that
at
this
date
neither
the
Kruger,
Vespoli,
or
Southam
judgments
had
been
rendered
and
Mr.
Bailey
had
no
reason
to
doubt
that
the
legality
of
his
taking
possession
of
the
documents
pursuant
to
this
section
could
be
questioned.
Applicants’
counsel
does
not
dispute
the
right
of
the
Minister
to
make
investigations
pursuant
to
section
231
of
the
Act,
but
merely
the
right
to
seize
and
retain
documents
pursuant
to
paragraph
231
(1)(d).
While
an
income
tax
investigation
may
in
some
respects
resemble
a
search
in
most
cases
no
search
warrant
is
required.
A
distinction
must
be
drawn
between
an
investigation
in
carrying
out
an
audit
and
the
actual
seizure
of
records
and
documents.
Although
Mr.
Bailey’s
notes
made
in
the
first
week
of
January
1984
respecting
what
transpired
on
December
22,
1983
are
slightly
different
from
what
he
states
in
his
affidavits
and
cross-examination
thereon
I
do
not
consider
any
differences
to
be
significant.
In
his
memorandum
he
states:
Bailey
then
advised
Clayton
that
because
of
the
number
of
similar
items
every
year
the
situation
called
for
a
more
thorough
examination.
At
this
time
he
produced
his
Ministerial
Authorization
and
showed
Clayton
subsection
231(1)(d)
allowing
for
the
seizure
of
books
and
records.
Bailey
told
Clayton
that
his
records
were
being
placed
under
seizure
and
they
would
be
held
for
120
days
while
we
investigated
further.
At
that
point
a
decision
would
be
made
on
their
need
for
prosecution
evidence
and
if
so
a
court
order
to
retain
them
would
be
obtained.
Neither
do
I
attribute
any
serious
significance
to
the
fact
that
Bailey
already
had
in
his
car
boxes
which
he
used
to
remove
the
records
seized
nor
the
fact
that
some
of
the
records
seized
from
F.
K.
Clayton
Group
Limited
were
the
property
of
Dianne
Clayton
(Mrs.
F.
K.
Clayton)
or
of
Mr.
Clayton,
nor
the
fact
that
no
charges
were
laid
for
the
1977,
1978
or
1979
taxation
years
and
only
one
for
1980.
While
it
is
possible
that
more
documents
were
seized
and
retained
than
are
now
necessary
for
the
prosecution
of
the
criminal
charges
laid,
the
issue
before
the
Court
on
this
motion
is
not
the
return
of
a
few
such
apparently
unnecessary
documents
and
records,
but
the
return
of
all
the
documents
seized.
I
conclude
that
on
the
facts
no
fault
can
be
found
of
Mr.
Bailey’s
conduct
nor
of
his
having
made
the
seizure
he
did
relying
on
paragraph
231
(1
)(d)
of
the
Act.
The
real
issue
before
the
Court
is
whether
paragraph
231
(1
)(d)
infringes
the
Constitution
Act,
1982
and
hence
renders
the
seizure
invalid.
Reference
was
made
to
the
case
of
Bertram
S.
Miller
Limited
v.
The
Queen,
[1985]
1
F.C.
1972,
in
which
Justice
Dubé
dealing
with
warrantless
search
by
virtue
of
the
provisions
of
the
Plant
Quarantine
Act
had
this
to
say
at
83:
I
cannot
conclude
from
the
jurisprudence
to
date,
as
applied
to
the
facts
of
the
case
at
bar,
that
the
warrantless
search
powers
conferred
by
paragraph
6(1)(a)
of
the
Plant
Quarantine
Act
are
necessarily
unreasonable
and
that
they
ineluctably
collide
with
section
8
of
the
Charter.
There
may
be
circumstances
of
emergency
where
the
obtention
of
a
warrant
would
be
unfeasible.
In
my
view,
however,
paragraph
6(1)(a)
is
inoperative
to
the
extent
of
its
inconsistency
with
section
8,
such
as
in
the
present
case
where
it
has
not
been
established
that
the
obtaining
of
such
a
warrant
was
unfeasible
or
even
impracticable.
Counsel
informed
the
Court
that
this
judgment
was
appealed,
the
appeal
having
been
heard
by
the
court
in
January,
but
that
no
judgment
has
as
yet
been
rendered.
This
again
raises
the
factual
issue
of
whether
it
was
unfeasible
or
even
impracticable
to
obtain
a
search
warrant
under
the
Criminal
Code
in
the
circumstances
of
the
present
case.
Again
it
must
be
emphasized
that
no
search
as
such
was
necessary
as
provided
for
in
subsection
(4)
of
section
231
which
has
been
found
to
be
inoperative
by
the
Kruger
and
other
cases
(supra).
In
the
Ontario
High
Court
of
Justice
the
case
of
The
Queen
v.
Dorothy
Dzagic,
[1985]
1
C.T.C.
346;
85
D.T.C.
5252
dealt
with
documents
received
during
the
course
of
an
audit
which
led
to
subsequent
charges
against
the
taxpayer
of
various
income
tax
evasion
offences.
It
was
found
that
paragraph
231
(1
)(d)
of
the
Income
Tax
Act
was
inconsistent
with
section
8
of
the
Canadian
Charter
of
Rights
and
Freedoms.
However
exclusion
of
the
use
of
the
documents
in
evidence
was
not
upheld,
it
being
found
that
the
declaration
of
unconstitutionality
is
not
in
itself
sufficient
to
justify
the
exclusion
of
relevant
evidence.
Other
compelling
reasons
would
be
required.
On
the
issue
of
the
constitutionality
of
paragraph
231(1)(d)
the
Court
refused
to
follow
the
cases
of
the
New
Garden
Restaurant
and
Tavern
Limited
et
al
v.
M.N.R.,
[1983]
C.T.C.
332;
83
D.T.C.
5338
and
Roth
v.
The
Queen,
[1984]
C.T.C.
185;
84
D.T.C.
6181.
Neither
judgment
had
had
the
benefit
of
the
Southam
decision.
It
should
be
pointed
out
however
that
the
unanimous
decision
of
the
Alberta
Court
of
Appeal
in
the
Southam
case
that
subsection
231(4)
was
unconstitutional,
which
was
upheld
in
the
Supreme
Court
had
already
been
rendered
before
these
judgments.
The
Southam
case
was
referred
to
in
the
New
Garden
Restaurant
case
but
was
not
followed.
At
335
(D.T.C.
5340)
of
the
judgment
reported
at
[1983]
C.T.C.
232;
83
D.T.C.
5338
Justice
White
states:
I
read
the
decision
of
the
Alberta
Court
of
Appeal
as
indicating
that,
in
their
opinion,
section
10
of
the
Combines
Investigation
Act
in
itself
necessarily
implied
that
before
a
search
was
conducted,
the
Restrictive
Trade
Practices
Commission,
which
authorized
the
search,
had
already
formed
the
belief
of
probable
guilt
of
the
party
searched.
In
my
view,
paragraph
231
(1
)(d)
of
the
Act
does
not
imply
in
itself
any
such
pre-conceived
belief
of
guilt
and
thus
in
my
opinion,
the
Southam
case
is
distinguishable
from
the
case
at
bar.
In
my
view,
paragraph
231(1)(d)
of
the
Act
does
not
necessarily
imply
in
itself
any
unreasonable
conduct
on
the
part
of
the
tax
investigator
and
thus
does
not,
by
its
very
wording,
violate
the
taxpayer's
reasonable
expectation
of
privacy,
which
is
the
interest
protected
by
section
8
of
the
Charter.
In
effect,
the
Income
Tax
Act
contemplates
a
system
of
tax
collection
based
upon
the
fair
and
honest
reporting
of
income
by
the
taxpayer.
Such
a
tax
system
requires
that
the
government
be
permitted
in
the
ordinary
course
of
events
to
check
the
business
records
of
the
taxpayer
in
order
to
ascertain
that
the
income
tax
returns
filed
are
reasonably
accurate.
The
checking
and
collating
of
such
records
by
the
government
does
not
violate
the
taxpayer's
reasonable
expectation
of
privacy
since
by
the
very
filing
of
his
return
the
taxpayer
is
aware
that
he
must
have
records
to
back
up
the
representations
made
in
his
income
tax
return
and
that
the
records
used
in
the
preparation
of
his
income
tax
return
must
be
as
available
for
audit
as
the
very
tax
return
filed
with
the
government.
It
is
only
when
a
tax
investigator
has
formulated
a
belief
of
the
taxpayer's
guilt
based
on
reasonable
and
probable
grounds
that
the
taxpayer's
expectation
of
privacy
would
reattach
to
his
records
and
documents.
In
such
circumstances,
the
obtention
of
an
order
pursuant
to
subsection
231(4)
of
the
Act,
which
order
is
in
effect
a
search
warrant,
is
a
condition
precedent
to
a
lawful
search
and
seizure
made
of
the
taxpayer's
records
by
the
investigator
and
a
seizure
without
warrant
made
pursuant
to
paragraph
231
(1)(d)
of
the
Act
would
violate
the
taxpayer's
rights.
Moreover,
the
public
interest
in
a
reasonably
efficient
system
of
collecting
tax
revenue
outweighs
the
taxpayer's
expectation
of
privacy
in
the
circumstances
contemplated
by
paragraph
231(1)(d)
of
the
Act
which
I
interpret
as
specifically
authorizing
a
seizure
without
warrant
in
cases
where
the
tax
investigator
comes
upon
incriminating
evidence
in
the
course
of
his
audit
without
having
formulated
prior
to
the
audit
any
belief
of
the
guilt
of
the
party
searched.
and
again
in
the
same
judgment
at
336
(D.T.C.
5341):
For
the
above
reasons,
I
find
that
paragraph
231
(1)(d)
of
the
Act
does
not
by
its
very
wording
necessarily
imply
any
unreasonable
conduct
on
the
part
of
the
tax
investigator
and
thus
does
not,
in
the
abstract,
violate
the
applicants’
right
to
be
secure
against
unreasonable
search
and
seizure.
Similarily,
I
find,
by
implication,
that
subsection
231(2)
of
the
Act
does
not
violate
section
8
of
the
Charter.
My
finding
that
paragraph
231(1)(d)
and,
by
implication,
subsection
231(2)
of
the
Act
do
not,
in
the
abstract,
violate
section
8
of
the
Charter
would
not
however
preclude
the
applicants
in
subsequent
court
proceedings
from
relying
on
subsection
24(2)
of
the
Charter
in
order
to
seek
an
order
excluding
the
records
and
documents
seized
pursuant
to
paragraph
231
(1)(d)
of
the
Act
on
the
ground
that,
on
the
facts,
the
seizures
made
by
Mr.
Piirik
under
paragraph
231
(1)(d)
were
made
after
he
had
formulated
a
belief
of
probable
guilt
and
thus,
at
a
time
when
the
order
or
warrant
contemplated
by
subsection
231(4)
of
the
Act
should
have
been
obtained
prior
to
his
seizing
the
documents.
Applicants’
counsel
also
referred
to
the
case
of
Regina
v.
Robert
Marcoux
and
Cecile
Marcoux,
Provincial
Court
of
Alberta,
[1985]
2
C.T.C.
254;
85
D.T.C.
5453
which
concerned
the
constitutionality
of
subsection
231(3)
of
the
Charter
which
is
not
in
issue
here.
In
that
case,
for
whatever
such
a
concession
is
worth,
it
was
stated
at
264
(D.T.C.
5459):
At
the
outset
of
the
Crown
argument,
Crown
counsel
admitted
that
paragraph
231
(1)(d)
of
the
Income
Tax
Act
is
inconsistent
with
section
8
of
the
Charter
of
Rights
and
Freedoms,
and
that
therefore,
it
is
inoperative
and
has
no
force
or
effect.
Crown
counsel
had
argued
however,
relying
on
the
decision
of
McNaughton,
J.
in
the
Province
of
Alberta
in
the
case
of
The
Queen
v.
Stickney,
an
unreported
judgment
dated
January
22,
1985
that
notwithstanding
that
paragraph
231(1)(d)
is
inoperative,
documents
seized
pursuant
to
it
should
be
admitted
in
evidence
since
the
defence
had
failed
to
establish
that
the
action
of
the
officers
of
the
Department
of
National
Revenue
was
unreasonable
and
to
admit
the
documents
would
not
bring
the
administration
of
justice
into
disrepute.
In
the
Marcoux
case
however
the
Court
found
that
the
auditors
had
already
come
to
the
conclusion
that
there
were
discrepancies
in
the
records
and
tax
returns
of
the
defendants
and
had
had
the
books
and
records
in
their
possession
for
several
months
when
they
arrived
at
the
Marcoux
home
on
the
pretext
that
they
wanted
to
receive
explanation
and
clarification
of
the
books
and
returns.
The
Court
found
that
the
books
should
have
been
made
available
to
the
Marcouxs
in
advance
of
their
interrogation;
furthermore
that
the
auditors
had
delivered
to
them
an
inaccurate
net
worth
statement,
therefore
acting
unfairly
and
unreasonably.
Applicants’
counsel
was
careful,
as
respondents'
counsel
points
out
not
to
seek
to
quash
the
order
of
Judge
Street
pursuant
to
subsection
231(2)
of
the
Act
as
this
Court
would
not
have
the
right
to
do
so,
but
merely
quash
the
application
made
pursuant
to
that
section
by
James
Bagnall
for
the
retention
of
the
documents
until
they
are
produced
in
court
proceedings.
Respondents'
counsel
argued
that
the
application
constitutes
a
collateral
attack
on
the
order
of
Judge
Street
as
it
is
he
who
would
have
to
decide
before
issuing
the
order
for
retention
of
the
documents
beyond
120
days
whether
they
had
been
validly
taken.
This
argument
is
to
the
effect
that
for
this
Court
to
order
the
return
of
the
documents
seized
on
the
ground
that
paragraph
231
(1)(d)
is
unconstitutional
would
be
in
conflict
with
his
order.
In
fairness
to
Judge
Street
it
should
be
pointed
out
that
his
order
is
more
in
the
nature
of
an
ex
parte
procedural
one
pursuant
to
the
scheme
of
section
231
of
the
Act
and
it
is
highly
unlikely
that
the
constitutional
question
was
raised
before
him.
Reference
was
made
in
this
connection
to
the
Supreme
Court
of
Canada
case
of
Wilson
v.
The
Queen
9
C.C.C.
(3d)
97;
37
C.R.
(3d)
97
in
which
McIntyre,
J.
stated
at
120
(C.R.
123):
The
cases
cited
above
and
the
authorities
referred
to
therein
confirm
the
well-
established
and
fundamentally
important
rule,
relied
on
in
the
case
at
bar
in
the
Manitoba
Court
of
Appeal,
that
an
order
of
a
court
which
as
[sic]
not
been
set
aside
or
varied
on
appeal
may
not
be
collaterally
attacked
and
must
receive
full
effect
according
to
its
terms.
At
117
(C.R.
119)
however
he
states:
It
has
long
been
a
fundamental
rule
that
a
court
order
made
by
a
court
having
jurisdiction
to
make
it
stands
and
is
binding
and
conclusive
unless
it
is
set
aside
on
appeal
or
lawfully
quashed.
It
is
also
well
settled
in
the
authorities
that
such
an
order
may
not
be
attacked
collaterally
—
and
a
collateral
attack
may
be
described
as
an
attack
made
in
proceedings
other
than
those
whose
specific
object
is
the
reversal,
variation,
or
nullification
of
the
order
or
judgment.
Applicants
contend
however
that
Judge
Street
did
not
have
jurisdiction
to
make
the
order
since
it
was
based
on
an
application
arising
from
paragraph
231
(1
)(d)
which
is
unconstitutional
so
that
the
order
under
subsection
231(2)
has
no
effect.
The
argument
that
a
collateral
attack
cannot
be
made
by
a
prerogative
writ
on
an
order
issued
by
a
judge
of
another
court
is
dealt
with
in
the
Federal
Court
of
Appeal
in
the
Kruger
case
(supra)
at
510
(D.T.C.
6481)
of
the
judgment
rendered
by
Justice
Pratte
who
stated:
Counsel
for
the
appellants
also
contended
that
the
Minister’s
authorization
could
not
be
challenged
by
certiorari
because
such
a
challenge
was,
in
effect,
a
collateral
attack
on
the
decision
of
Mr.
Justice
Ducros
approving
the
authorization.
As
Mr.
Justice
Ducros’
decision
could
not
be
challenged
directly
by
certiorari,
it
could
not,
said
counsel,
be
challenged
indirectly.
Moreover,
counsel
referred
to
the
rule
that
a
decision
of
a
Superior
Court
which
has
not
been
set
aside
or
varied
on
appeal
may
not
be
collaterally
attached.
The
answer
to
that
argument
is
that
the
respondents’
attack
on
the
Minister’s
authorization
does
not
constitute
a
collateral
or
indirect
attack
on
Mr.
Justice
Ducros’
approval.
The
respondents
challenge
the
validity
of
the
authorization
to
search
and
seize.
That
authorization,
while
it
was
approved
by
Mr.
Justice
Ducros,
was
not
given
by
him.
Indeed,
subsection
231(4)
confers
on
the
Minister,
not
on
the
Judge,
the
power
to
authorize
a
search
and
a
seizure.
In
challenging
the
authorization
given
by
the
Minister
on
jurisdictional
grounds,
the
respondents
do
not
ask
the
Court
to
ignore
the
approval
given
by
Mr.
Justice
Ducros;
they
merely
assert
that,
in
spite
of
that
approval,
and
for
reasons
that
are
entirely
foreign
to
that
approval,
the
authorization
is
a
nullity
because
the
Minister
did
not
have
the
power
to
give
it.
In
dealing
with
paragraph
231
(1)(d)
there
is
of
course
no
ministerial
authorization
required
but
it
can
be
argued
that
it
is
even
a
weaker
section
than
231(4)
in
that
it
leaves
the
discretion
to
the
auditor
who
is
examining
the
books
to
seize
such
records
as
he
deems
necessary
without
any
prior
authorization
from
his
superiors
or
from
any
Court.
Subsection
231(2)
is
merely
a
follow-up
to
enable
the
records
to
be
retained
for
more
than
120
days.
It
is
difficult
to
see
how
paragraph
231
(1)(d)
can
stand
unchallenged
when
subsection
231(4)
has
been
found
to
be
unconstitutional
and
if
paragraph
231
(1
)(d)
is
ineffective
to
permit
the
seizure
of
the
documents
taken
away
during
the
audit
then
surely
an
order
under
subsection
231(2)
to
retain
them
cannot
have
any
effect.
In
the
case
of
M.N.R.
v.
Coopers
and
Lybrand,
[1978]
C.T.C.
829;
78
D.T.C.
6528
a
pre-Charter
case
dealing
with
the
right
of
review
by
the
Court
of
Appeal
of
a
seizure
was
made
pursuant
to
subsection
231(4)
of
the
Act
a
distinction
is
made
at
836
(D.T.C.
6534)
between
the
Minister's
actions
which
were
of
an
administrative
nature
and
not
subject
to
a
section
28
review
and
the
jurisdiction
of
the
judge
who
was
acting
qua
judge
and
not
as
persona
designata
in
making
his
decision
to
issue
the
warrant
which
cannot
be
reviewed
by
the
Court
of
Appeal
under
a
section
28
application.
The
Court
declined
to
decide
whether
an
appeal
lay
to
the
Provincial
Courts
from
the
authorization
of
the
Minister
and
the
approval
of
the
Judge.
Respondents'
counsel
contended
however
that
since
there
is
no
ministerial
authorization
involved
in
subsection
231(2)
of
the
Act
the
present
proceedings
constitute
a
direct
attack
on
Judge
Street's
order
and
cannot
be
set
aside
by
certiorari
in
this
Court.
For
the
reasons
stated
above
however
although
the
jurisprudence
is
somewhat
controversial
I
do
not
conclude
that
the
issue
of
the
order
sought
should
be
refused
on
the
basis
that
it
would
constitute
a
collateral
attack
on
the
judgment
of
Judge
Street,
since
it
is
the
right
pursuant
to
subsection
231(2)
to
seek
such
an
order
which
right
is
itself
dependent
on
the
right
to
seize
the
documents
pursuant
to
paragraph
231(1)(d)
which
is
under
attack
and
not
the
order
of
Judge
Street
itself.
Respondents'
second
line
of
argument
relates
to
the
constitutional
validity
of
paragraph
231
(1)(d).
Some
of
the
cases
on
this
issue
have
already
been
referred
to
and
there
have
been
a
number
of
cases
dealing
with
warrantless
searches
and
seizures
both
before
and
after
the
Charter.
In
the
case
of
Regina
v.
Rao,
46
O.R.
(2d)
80;
9
D.L.R.
(4th)
542
dealing
with
paragraph
10(1)(a)
of
the
Narcotic
Control
Act
the
judgment
in
the
Court
of
Appeal
rendered
by
Justice
Martin
at
96
(D.L.R.
557-58)
states:
Mr.
Dambrot,
on
behalf
of
the
Crown,
in
support
of
his
submission
that
warrantless
searches
have
gained
common
acceptance
in
Canada,
referred
us
to
a
number
of
federal
statutes
which
confer
power
on
designated
officials
to
enter,
search,
inspect
or
audit
at
business
premises
without
a
warrant.
Those
statutes
are
listed
in
app.
“A”.
In
my
view,
however,
a
clear
distinction
must
be
drawn
between
a
general
power
to
enter
private
premises
without
a
warrant
to
search
for
contraband
or
evidence
of
crime
and
a
power
conferred
on
designated
officials
to
enter
premises
for
inspection
and
audit
purposes
and
to
seize
records,
samples
or
products
in
relation
to
businesses
and
activities
subject
to
government
regulation.
The
case
of
Re
Belgoma
Transportation
Ltd.
and
Director
of
Employment
Standards
51
O.R.
(2d)
509;
20
D.L.R.
(4th)
156;
also
a
post-Charter
case
which
discussed
the
Southam
and
others
stated
at
512
(D.L.R.
159):
The
standards
to
be
applied
to
the
reasonableness
of
a
search
or
seizure
and
the
necessity
for
a
warrant
with
respect
to
criminal
investigations
cannot
be
the
same
as
those
to
be
applied
to
search
or
seizure
within
an
administrative
and
regulatory
context.
Under
the
Unemployment
Standards
Act,
there
is
no
necessity
that
the
officer
have
evidence
that
the
Act
has
been
breached.
In
the
course
of
carrying
out
administrative
duties
under
the
Act,
what
is
commonly
called
a
“spot
audit”
may
be
carried
out,
which
helps
ensure
that
the
provisions
of
the
Act
are
being
complied
with.
The
limited
powers
given
for
this
purpose
as
set
out
in
the
section
are
not
unreasonable.
The
“search
or
seizure”
in
the
instant
case,
if
such
it
is,
is
not
aimed
at
detecting
criminal
activity,
but
rather,
as
indicated,
in
ensuring
and
securing
compliance
with
the
regulatory
provisions
of
the
Act
enacted
for
the
purpose
of
protecting
the
public
interest.
Counsel
argues
that
sections
231
(1)(d)
and
231(2)
are
part
of
a
statutory
scheme
under
the
Income
Tax
Act
arising
from
the
admitted
necessity
of
examining
and
verifying
a
taxpayer's
records.
While
these
arguments
are
persuasive
particularly
since
the
jurisprudence
appears
to
still
be
somewhat
unsettled
on
the
issue,
I
find
that
on
the
basis
of
the
majority
decision
of
the
Federal
Court
of
Appeal
in
the
Kruger
and
Vespoli
cases
(supra)
with
relation
to
subsection
231(4)
and
the
comprehensive
and
sweeping
statements
made
by
the
Supreme
Court
in
the
Southam
case
I
must
conclude
that
paragraph
231(1)(d)
and
subsection
231(2)
are
in
the
same
category
as
subsection
231(4)
and
are
contrary
to
section
8
of
the
Charter.
This
does
not
conclude
the
matter
however
as
the
main
issue
is
the
return
of
the
documents
seized.
As
counsel
for
respondents
points
out
it
may
be
doubtful
whether
they
could
be
subpoenaed
for
use
in
criminal
proceedings
even
if
they
were
available
after
return
to
the
applicants
and
the
same
applies
to
the
use
of
copies
of
them.
If
I
were
ordering
their
return
I
would
be
tempted
to
include
a
direction
that
they
be
retained
by
the
taxpayers
for
future
use
if
necessary.
This
might
however,
be
an
undue
interference
with
the
judge
conducting
the
criminal
trial
where
the
issue
of
their
admissibility
may
be
raised,
and
as
I
am
not
ordering
their
return
I
need
not
decide
whether
if
this
were
ordered
conditions
could
be
imposed.
On
the
issue
of
the
return
of
the
documents
seized
there
is
some
jurisprudence
to
the
effect
that
it
should
be
up
to
the
trial
judge
to
determine
whether
the
evidence
is
admissible.
In
the
recent
case
of
Gerlando
Lagior-
gia
v.
The
Queen,
[1985]
2
C.T.C.
25;
85
D.T.C.
5554
Justice
Joyal
of
this
Court
reviewed
the
jurisprudence
referring
inter
alia
to
a
judgment
I
rendered
in
the
case
of
Lewis
v.
M.N.R.,
[1984]
C.T.C.
642;
84
D.T.C.
6550,
a
judgment
of
Justice
Denault
in
the
case
of
Skis
Rossignol
Canada
Ltd.
et
al
v.
Lawson
A.
W.
Hunter
et
al,
15
C.P.R.
184
and
a
judgment
of
Justice
Ewa-
schuk
in
the
case
of
R.
v.
Rowbotham
et
al,
an
unreported
case
dated
November
2,
1984.
In
the
Skis
Rossignol
Canada
Ltd.
case
Justice
Denault
after
a
review
of
the
jurisprudence
including
the
Southam
decision
concluded
that
no
special
circumstances
had
been
established
that
would
justify
the
relief
sought
by
the
applicants.
He
stated:
The
respondents’
affidavit
to
the
effect
that
they
need
the
evidence
gathered
for
a
charge
already
laid
against
the
applicants
justifies
the
Court
in
dismissing
this
motion.
It
will
be
up
to
the
judge
of
the
Court
of
Sessions
of
the
Peace
to
determine
whether
the
evidence
thus
obtained
“would
bring
the
administration
of
justice
into
disrepute.”
The
documents
seized
were
ordered
to
be
returned
except
those
necessary
for
the
criminal
prosecution.
In
the
Lagiorgia
judgment
Justice
Joyal
states
at
33
(D.T.C.
5559):
The
above-mentioned
decisions
of
Walsh
J.
and
Denault
J.
in
effect
lead
to
the
same
result.
Each
allows
the
trial
judge
to
determine
whether
the
evidence
to
be
presented
before
him
should
or
should
not
be
admitted,
in
light
of
the
test
set
out
in
subsection
24(2).
I
recognize
the
merits
as
well
as
the
logic
of
that
reasoning.
The
determination
by
the
trial
judge
can
be
made
much
more
judiciously.
The
trial
judge
would
have
before
him
not
only
the
illegally
obtained
evidence
but
all
other
relevant
circumstances
material
to
the
case.
He
could
judge
the
importance
of
the
documents
seized
as
evidence
of
an
offence,
the
grounds
of
defence
other
than
the
exclusion
of
the
evidence
on
which
the
prosecution
is
relying
and
the
circumstances
surrounding
the
seizure.
Having
said
this
however
he
points
out
that
considering
the
constitutional
aspect
of
subsection
231(4)
of
the
Income
Tax
Act
which
has
been
declared
to
be
null
and
void
being
unconstitutional
the
Court
must
impose
the
sanction
that
the
documents
seized
be
returned
to
the
owner.
The
public
authority
can
use
other
legitimate
means
to
carry
out
their
statutory
responsibilities
and
enforce
the
law.
As
was
pointed
out
subsection
24(1)
of
the
Charter
is
before
the
Court
in
the
present
application
and
not
subsection
24(2)
which
will
be
a
matter
to
be
decided
by
the
trial
judge.
The
application
of
subsection
24(1)
seems
to
require
consideration
however
of
not
merely
whether
the
seizure
is
unconstitutional,
but
whether
it
was
reasonable.
The
case
of
Regina
v.
Jagodic
et
al.,
15
C.R.R.
146;
19
C.C.C.
(3d)
305
considered
the
Southam
case
and
referred
at
148-49
(C.C.C.
307)
to
extracts
from
the
judgment
of
Dickson,
J.
in
the
Southam
case
as
follows:
.
..
that
an
assessment
of
the
constitutionality
of
a
search
and
seizure,
or
of
a
statute
authorizing
a
search
or
seizure,
must
focus
on
its
“reasonable”
or
“unreasonable”
impact
on
the
subject
of
the
search
or
the
seizure
and
not
simply
on
its
rationality
in
furthering
some
valid
government
objective.
The
guarantee
of
security
from
unreasonable
search
and
seizure
only
protects
a
reasonable
expectation.
This
limitation
on
the
right
guaranteed
by
s.
8,
whether
it
is
expressed
negatively
as
freedom
from
“unreasonable”
expectation
of
privacy,
indicates
that
an
assessment
must
be
made
as
to
whether
in
a
particular
situation
the
public’s
interest
in
being
left
alone
by
government
must
give
way
to
the
government’s
interest
in
intruding
on
the
individual’s
privacy
in
order
to
advance
its
goals,
notably
those
of
law
enforcement.
and
again
at
149
(C.C.C.
307):
I
recognize
that
it
may
not
be
reasonable
in
every
instance
to
insist
on
prior
authorization
in
order
to
validate
governmental
intrusions
upon
individuals’
expectations
of
privacy.
Nevertheless
where
it
is
feasible
to
obtain
prior
authori-
zaton,
I
would
hold
that
such
authorization
is
a
pre-condition
for
a
valid
search
and
seizure.
I
have
already
found
as
a
question
of
fact
that
under
the
circumstances
of
the
present
case
it
would
not
have
been
feasible
or
reasonable
to
delay
taking
possession
of
the
documents
in
view
of
the
lengthy
affidavits
and
documents
required
to
obtain
the
authorization
of
a
judge
for
a
search
warrant
under
the
provisions
of
the
Criminal
Code,
especially
as
no
“search”
as
such
was
necessary,
but
merely
a
taking
of
possession.
In
the
case
of
Dobney
Foundry
Ltd.
et
al.
v.
Attorney
General
of
Canada
in
the
British
Columbia
Court
of
Appeal
[1985]
3
W.W.R.
626
Esson,
J.
discusses
a
recent
judgment
of
the
Ontario
Court
of
Appeal
in
Re
Chapman
and
the
Queen
(1984),
46
OR.
(2d)
65;
12
C.C.C.
(3d)
1,
in
which
MacKinnon,
A.C.J.O.
stated
at
72
(C.C.C.
8):
These
most
recent
cases
seem
to
agree
with
the
Crown's
position
that
there
is,
indeed,
no
discretion
in
the
court,
but
come
to
exactly
the
opposite
conclusion
as
to
the
result
—
namely,
that
articles
seized
under
an
illegal
search
warrant
must
be
returned.
I
do
not
agree
that
it
is
as
absolute
in
that
regard
as
the
Crown
argues
it
is
for
its
position,
i.e.,
that
the
articles
must
be
retained.
MacKinnon
A.C.J.O.
went
on
to
observe
that,
with
the
passage
of
the
Charter,
there
is
“a
new
player
in
this
particular
game’’.
As
I
understand
his
reasons,
he
regarded
s.
24(1)
of
the
Charter
as
providing
additional
support
for
the
existence
of
a
discretion
on
the
part
of
the
court,
having
quashed
a
search
warrant,
to
direct
a
return
of
the
items
seized
even
in
the
face
of
an
assertion
by
the
Crown
that
they
are
required
as
evidence
in
a
criminal
proceeding.
What
is
significant
for
present
purposes
is
that
the
decision
does
not
support
the
view
that
the
articles
must
be
returned.
What
Chapman
does
decide
is
that,
if
the
Crown
asserts
that
the
items
are
needed
for
the
purposes
of
a
criminal
prosecution,
the
court
has
a
discretion
as
to
whether
they
should
be
ordered
to
be
returned
or
allowed
to
be
retained
by
the
Crown.
At
636
the
Dobney
Foundry
judgment
sets
useful
criteria:
(1)
A
reviewing
court,
on
quashing
a
search
warrant,
has
power
to
order
return
of
any
goods
seized
under
the
warrant.
(2)
If
the
Crown
shows
that
the
things
seized
are
required
to
be
retained
for
the
purposes
of
a
prosecution,
either
under
a
charge
already
laid
or
one
intended
to
be
laid
in
respect
of
a
specified
chargeable
offence,
the
court
may
refuse
to
order
the
return.
(3)
No
particular
formality
is
required
in
order
for
the
Crown
to
show
the
requisite
element
of
necessity
to
retain
the
things.
(4)
The
power
to
order
return
of
goods
is
incidental
to
the
power
to
quash
but
may
also
arise
under
s.
24(1)
of
the
Charter
if
the
search
and
seizure
was
unreasonable
as
well
as
illegal.
(5)
The
conduct
of
the
prosecuting
authorities
in
relation
to
the
search
and
seizure
is
a
factor
to
be
considered
in
deciding
whether
to
exercise
the
discretion.
(6)
Other
factors
to
be
considered
in
exercising
the
discretion
may
be
the
seriousness
of
the
alleged
offence,
the
degree
of
potential
cogency
of
the
things
in
proving
the
charge,
the
nature
of
the
defect
in
the
warrant
and
the
potential
prejudice
to
the
owner
from
being
kept
out
of
possession.
Here
we
are
not
of
course
dealing
with
an
actual
search
warrant
but
criteria
(2)
to
(6)
are
applicable,
in
particular
in
connection
with
No.
(5)
there
has
been
no
complaint
whatsoever
as
to
the
conduct
of
the
auditor
who
seized
the
articles
in
question,
and
looking
at
No.
(6),
the
seizure
was
only
defective
since
it
has
now
been
found
to
be
so,
the
auditor
acting
in
good
faith
and
pursuant
to
a
section
not
yet
found
to
be
invalid
at
the
time
nor
do
the
applicants
appear
to
have
suffered
any
prejudice
by
being
kept
out
of
possession.
These
are
not
records
for
the
current
year
which
would
affect
the
operation
of
their
business
but
old
records
relating
to
the
tax
years
in
question.
Applicants
have
access
to
them.
In
the
case
of
The
Queen
v.
Robert
Wilson
Rowbotham
et
al.
an
unreported
judgment
of
Justice
Ewaschuk
in
the
Supreme
Court
of
Ontario
dated
November
2,
1984,
dealing
with
the
admission
at
trial
of
documents
seized
under
an
unlawful
search
warrant
the
judgment
states
at
12:
Assuming
the
search
warrant
is
unlawful
under
the
applicable
Act,
it
is
now
accepted
that
a
superior
court
judge
can
then
go
on
to
determine
the
separate
Charter
question
whether
the
search
or
seizure
is
unreasonable:
Re
Chapman
and
The
Queen
(1984),
12
C.C.C.
(3d)
1
(Ont.
C.A.).
Where
the
judge
then
determines
that
the
search
or
seizure
was
unreasonable,
he
or
she
is
empowered
pursuant
to
s.
24(1)
of
the
Charter
to
order
the
seized
items
returned:
Re
Chapman,
supra.
But
it
is
also
clear
that
a
s.
24(1)
return
does
not
resolve
the
question
of
the
admissibility
of
evidence
at
later
proceeding.
This
is
so
since
a
motions
court
“cannot
have
‘regard
to
all
the
circumstances’
because
all
the
circumstances
are
clearly
not
before
the
Court”:
Re
Chapman
at
p.
9.
It
seems
to
me
that,
especially
where
the
items
seized
are
testimonial
in
nature,
e.g.
documents,
a
motions
court
judge
should
exercise
his
discretion
not
to
reurn
the
items,
albeit
seized
unreasonably,
where
the
Crown
establishes
to
the
judge’s
satisfaction
that
the
items
have
probative
value
in
respect
of
pending
or
laid
charges.
At
8
the
judgment
states:
It
seems
to
me
illogical
to
characterize
a
search
and
seizure
as
unreasonable
when
made
in
good
faith
and
in
compliance
with
current
law.
Indeed
it
seems
to
me,
to
the
contrary,
most
reasonable
that
the
police,
as
is
their
duty,
be
required
to
comply
with
the
law
as
it
stands
on
the
day
that
they
apply
the
particular
law
in
question:
see
by
analogy
R.
v.
Ali
(1980),
51
C.C.C.
(2d)
282
(S.C.C.).
In
the
case
of
Regina
v.
Cameron,
13
C.R.R.
13
the
headnote
reads
in
part:
The
defect
in
the
warrant
did
not
necessarily
render
that
search
unreasonable,
not
every
illegal
search
is
unreasonable,
but
even
if
it
did
such
defect
provided
no
basis
for
holding
that
the
evidence
should
have
been
excluded
under
s.
24
of
the
Charter.
In
the
case
of
Regina
v.
Noble,
48
O.R.
(2d)
643
the
headnote
reads
in
part:
In
deciding
whether
or
not
to
admit
the
evidence,
it
is
proper
for
the
trial
judge
to
consider
such
matters
as
the
nature
and
extent
of
the
illegality,
the
unreasonableness
of
the
conduct
involved
and
whether
the
officers
were
acting
in
good
faith
as
distinct
from
knowingly
infringing
the
accused’s
rights.
The
fact
that
a
situation
of
urgency
existed
requiring
the
police
to
act
quickly
to
prevent
the
loss
or
destruction
of
evidence
could
also
be
a
factor
to
be
taken
into
account.
Thus,
evidence
as
to
the
finding
of
a
quantity
of
narcotics
in
a
dwelling-house
was
properly
admitted
at
the
accused’s
trial
notwithstanding
that
the
search,
having
been
conducted
under
the
authority
of
a
writ
of
assistance,
was
unreasonable
and
in
violation
of
s.
8
of
the
Charter
of
Rights,
in
view
of
the
evidence
that
the
officer
in
acting
under
his
writ
of
assistance
was
doing
so
in
good
faith
at
a
time
when
there
was
no
appellate
decision
holding
that
writs
of
assistance
were
unconstitutional,
that
the
search
was
carried
out
in
a
reasonable
manner
with
due
regard
to
the
accused’s
other
constitutional
rights
and
that
the
officer
reasonably
considered
that
he
was
confronted
by
a
situation
of
urgency
which
made
the
obtaining
of
a
warrant
impracticable.
Although
these
latter
two
cases
refer
to
the
admissibility
of
evidence
improperly
seized
which,
as
I
have
already
indicated
is
not
an
issue
to
be
decided
in
this
Court
on
the
present
motion
and
they
really
deal
with
sub-
section
24(2)
of
the
Charter
rather
than
subsection
24(1),
if
the
documents
were
ordered
returned
at
this
time
by
application
of
subsection
24(1)
of
the
Charter
this
would
tend
to
be
taking
the
issue
of
their
admissibility
out
of
the
hands
of
the
trial
judge
as
it
might
well
be
difficult
if
not
impossible
to
obtain
them
for
production
before
him
for
his
decision
as
to
their
admissibility.
I
conclude
therefore
that
although
sections
231
(1)(d)
and
231(2)
of
the
Act
are
unconstitutional,
the
seizure
which
was
carried
out
was
not
unreasonable,
and
it
should
not
be
automatically
found
that
evidence
obtained
by
an
illegal
seizure
must
be
returned
although
it
is
required
for
use
in
criminal
proceedings,
and
that
subsection
24(1)
of
the
Charter
does
not
necessarily
require
such
an
order.
The
law
in
Canada
unlike
that
in
the
United
States
does
not
necessarily
exclude
from
consideration
at
trial
evidence
which
has
been
illegally
obtained.
I
find
that
in
the
present
state
of
our
law
sufficient
jurisprudence
justifies
a
finding
that
the
documents
in
question
can
be
retained
until
the
termination
of
the
criminal
proceedings
for
which
respondents
intend
to
use
them,
but
any
documents
not
required
for
such
proceedings
should
be
returned
forthwith.
Order
accordingly.
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