T-1699-83
Kruger Inc., Gene H. Kruger and Joseph Kruger
II (Applicants)
v.
Minister of National Revenue, Canada, Gérard
LeBlond, Director, Special Investigations Division
of the Department of National Revenue, Taxation,
and Raymond Galimi, Special Investigator under
the Income Tax Act (Respondents)
and
Attorney General for Canada, Kol Inc,, Ledair
Inc., Coopers & Lybrand, Chartered Accountants,
Villor Consultants Inc., Victor Gold and Co.,
Clarkson, Tetrault, Lawyers, and Lavery, O'Bri-
en, Lawyers, Phillips, Vineberg, Lawyers (Mis -
en-cause)
Trial Division, Dubé J.—Ottawa, July 28 and 29,
1983.
Constitutional law — Charter of Rights — Legal rights —
Motion to quash search-and-seizure authorization issued by
Minister pursuant to s. 231(4) Income Tax Act — Minister
having reasonable and probable grounds to believe Act violat
ed re applicants' residency but Minister's authorization and
judge's approval being for "any violation" of Act and Regula
tions — Authorization an administrative, executive decision
not required to be made on judicial basis, but Minister obliged
to act fairly — Most leading search-and-seizure decisions
pre-dating Constitution Act, 1982 — Authorization violating
Charter s. 8 proscription of unreasonable search and seizure
because not limited to particular violations alleged — Fishing
expedition unnecessary and not allowed — Authorization
quashed and seized documents to be surrendered to Court
administration pending appeal — Income Tax Act, S.C. 1970-
71-72, c. 63, s. 231(4) — Canadian Charter of Rights and
Freedoms, being Part I of the Constitution Act, 1982, Schedule
B, Canada Act 1982, 1982, c. 11 (U.K.), ss. 8, 24 — Federal
Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 18.
Income tax — Powers of Minister — Charter of Rights —
Motion to quash search-and-seizure authorization issued by
Minister pursuant to s. 231(4) of Income Tax Act — Minister
having reasonable and probable grounds to believe Act violat
ed re applicants' residency but authorization for "any viola
tion" of Act and Regulations contravening Charter s. 8 pros
cription of unreasonable search and seizure because not
limited to particular violations alleged — Fishing expedition
unnecessary and not allowed — Authorization quashed and
seized documents to be surrendered to Court administration
pending appeal — Income Tax Act, S.C. 1970-71-72, c. 63, s.
231(4) — Canadian Charter of Rights and Freedoms, being
Part I of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.), s. 8.
CASES JUDICIALLY CONSIDERED
REFERRED TO:
The Minister of National Revenue v. Coopers and
Lybrand, [1979] 1 S.C.R. 495; 92 D.L.R. (3d) 1; Mar-
tineau v. Matsqui Institution Disciplinary Board, [1980]
1 S.C.R. 602; In re Collavino Brothers Construction
Company Limited, [1978] 2 F.C. 642; 78 DTC 6050
(C.A.); Thomson Newspapers Ltd. et al. v. Hunter,
Director of Investigation and Research, Combines Inves
tigation Act et al. (1983), 73 C.P.R. (2d) 67 (F.C.T.D.).
COUNSEL:
B. J. Pateras, Q.C. and J. Greenstein, Q.C.
for applicants.
W. Lefebvre, Q.C. and J. Coté for respond
ents.
No one appeared for any of the mis -en-cause.
SOLICITORS:
Pareras & Iezzoni, Montreal, for applicants.
Deputy Attorney General of Canada for
respondents.
The following are the reasons for order ren
dered in English by
DuBÉ J.: Upon a motion made by counsel on
behalf of the Applicants to the presiding Judge of
this Honourable Court for:
(1) An Order pursuant to Rules 320 and 321
abridging the time for filing and service of this
motion; and
(2) An Order pursuant to section 18 of the
Federal Court Act and section 24 of the Consti
tution Act, 1982:
(a) quashing the authorization pursuant to
section 231(4) of the Income Tax Act, (S.C.
1970-71-72, c. 63, as amended) dated July 8,
1983, signed by respondent Gérard LeBlond
authorizing search and seizure of the premises
described therein;
ON THE GROUNDS THAT
i) Section 231(4) of the Income Tax Act is incon
sistent with Section 8 of the Constitution Act,
1982 and of no force or effect;
ii) The said authorization is inconsistent with Sec
tion 8 of the Constitution Act, 1982 and of no
force or effect;
iii) The said authorization is illegal, irregular, null
and void; and
iv) The search, seizure, removal and possession of
the seized effects as executed by the Respondents
and/or their representatives is unreasonable, ille
gal, irregular, null and void.
(b) AND CONSEQUENTLY ordering the return
to Applicants and to all of the mis -en-cause
described in the said authorization all seized
effects, as well as any copies and extracts
thereof, removed pursuant to said authoriza
tion, and to place in sealed envelopes or con
tainers any notes, précis or other descriptions
of the effects taken or seized by the Respond
ents or their representatives, without copies
thereof being kept by Respondents, and deliv
er these into the custody of the District
Administrator of the Federal Court at the
Palais de Justice, 1 Notre-Dame Street, Mon-
treal, Quebec.
(3) Such other order as may seem just in the
circumstances including the order to restrain
Respondents from having access to or using the
seized effects pending an appeal by Respondents
from a decision of this Honourable Court main
taining Applicants' Motion.
REASONS FOR ORDER
The applicants seek an order from this Court
under section 18 of the Federal Court Act [R.S.C.
1970 (2nd Supp.), c. 10], quashing the authoriza
tion pursuant to subsection 231(4) of the Income
Tax Act [R.S.C. 1952, c. 148 (as am. by S.C.
1970-71-72, c. 63)] for search and seizure of the
applicants' documents on the grounds that the
subsection and the authorization are inconsistent
with section 8 of the [Canadian Charter of Rights
and Freedoms, being Part I of the] Constitution
Act, 1982, [Schedule B, Canada Act 1982, 1982,
c. 11 (U.K.)]. The two provisions read as follows:
231... .
(4) 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, recep
tacle 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.
8. Everyone has the right to be secure against unreasonable
search or seizure.
It is common ground that the Minister had
reasonable and probable grounds to believe that
violations of the Act, in relation with the residency
of the applicants, had been committed, but the
Minister's application, the authorization and the
approval of the judge of the Quebec Superior
Court were for "any violation" of the Act and the
Regulations.
Counsel for the applicants made it quite clear at
the outset that he is attacking the authorization
(signed by Gérard LeBlond, Director, Special
Investigations Division) and not the approval of
the judge.
Such an authorization is an administrative and
executive decision not required to be made on a
judicial or quasi-judicial basis (The Minister of
National Revenue v. Coopers and Lybrand,
[[1979] 1 S.C.R. 495]; 92 D.L.R. (3d) 1). There
is, however, a duty on the part of the Minister to
act fairly (Martineau v. Matsqui Institution Dis
ciplinary Board, [1980] 1 S.C.R. 602).
Counsel for both parties canvassed the leading
decisions on search and seizure, most of them
dating from before the proclamation of the Con
stitution Act, 1982. In my view, the authorization
under attack violates section 8 of the Constitution
Act, in that it constitutes unreasonable search and
seizure. I find it unreasonable because it is not
limited to the particular violations allegedly com
mitted. It is a blanket order covering the violation
of any provision of the Act. In my view, such a
fishing expedition is not necessary and ought not
to be allowed. It constitutes unreasonable search
and seizure. I find sustenance for my view in the
recent decision of my brother Collier J. in Thom-
son Newspapers Ltd. et al. v. Hunter, Director of
Investigation and Research, Combines Investiga
tion Act et al. [(1983), 73 C.P.R. (2d) 67
(F.C.T.D.)], dealing with a parallel authorization
under the Combines Investigation Act [R.S.C.
1970, c. C-23].
ORDER
1. The authorization of Gérard LeBlond dated
July 8, 1983 is quashed.
2. The costs of this motion go to the applicants.
3. Pending any appeal of this decision, all docu
ments seized shall be delivered into the custody of
the District Administrator of the Federal Court,
Palais de Justice, Montreal, Quebec, unless coun
sel for both parties agree to a more convenient
disposal of the documents pending the final judi
cial disposition of the matter.
' In In re Collavino Brothers Construction Company Lim
ited, [[1978] 2 F.C. 642]; 78 DTC 6050, the Federal Court of
Appeal held that the authorization pursuant to subsection
231(4) could only authorize the seizure of documents pertain
ing to the offence set out in the affidavit in support of the
application. (The decision was reversed on other grounds by the
Supreme Court of Canada: [The Minister of National Revenue
v. Coopers and Lybrand, [1979] 1 S.C.R. 495].)
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.