T-5986-82
Gerlando Lagiorgia (Plaintiff)
v.
The Queen in right of Canada, Attorney General
of Canada and Honourable Perrin Beatty in his
capacity as Minister of National Revenue
(Defendants)
Trial Division, Joyal J.—Montreal, March 14;
Ottawa, May 9, 1985.
Constitutional law — Charter of Rights — Search or sei
zure — Relief under Charter where searches and seizures of
documents under Income Tax Act s. 231(4) illegal — Claim
for damages under Charter s. 24(1) not substantiated —
Disposition of illegally seized documents — Public interest
versus constitutionally protected rights of individuals — Com
bined effect of Charter ss. 8 and 24(1) requiring return to
plaintiff even if documents needed for criminal prosecution —
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(1),(2) — Constitution Act, 1982, Schedule
B, Canada Act 1982, 1982, c. 11 (U.K.), s. 52(l) — Income
Tax Act, S.C. 1970-71-72, c. 63, s. 231(4).
Income tax — Seizures — Searches and seizures under s.
231(4) of Act violating Charter, s. 8 — Disposition of illegally
seized documents — Public interest versus constitutionally
protected rights of individuals — Combined effect of Charter
ss. 8 and 24(1) requiring return to plaintiff even if documents
needed for criminal prosecution — Amendment to statement of
claim concerning documents seized from plaintiffs accountant
denied as accountant stranger to proceedings and Court unable
to rule on his rights in his absence — 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(1),(2).
The facts of this case are set out in the Editor's note below.
The important issue is whether the plaintiff can obtain the
return of documents seized illegally on July 8, 1982, which the
defendants claim are needed for the criminal prosecution of the
plaintiff. On the one hand, there are the owner's rights to his
documents, the Charter right to be secure against unreasonable
search or seizure, the Charter provision concerning the exclu
sion of evidence which would bring the administration of justice
into disrepute and finally, the enforcement section of the
Charter providing for the appropriate and just remedy in cases
of infringement of Charter rights or freedoms. On the other
hand, there is the public interest rule of admissibility of illegal
ly obtained evidence.
The plaintiff also applied for an authorization to amend his
statement of claim in order to be able to claim the return of
documents allegedly belonging to him which were previously
seized in the hands of his accountant as well as an order
prohibiting the defendants from using any such document and
any information obtained therefrom.
Held, the searches and seizures effected on July 8, 1982,
were illegal and in violation of section 8 of the Charter and the
documents seized in the course of those searches are ordered
returned to the plaintiff. The plaintiffs other claims are
dismissed.
The right of the owner to the return of illegally seized
documents belonging to him is not absolute; the courts have
authorized their use in evidence. An order that the documents
be returned to the plaintiff would of course solve the problem of
their admissibility in evidence.
The arguments for and against the return and the admissibil
ity of illegally obtained evidence have not been substantially
altered by subsections 24(1) and (2) of the Charter. There is,
however, an added consideration: the protection against unrea
sonable search or seizure guaranteed in section 8 of the Chart
er. Traditionally, public interest considerations were reflected
in the prevailing attitude which favoured admission of evidence.
:Now, one must consider not only whether the admission of the
evidence will bring the administration of justice into disrepute
but also the fact that there has been a violation of a constitu
tionally guaranteed right.
The relevant cases sometimes allow the Crown to retain the
evidence and sometimes order its return to the victim of the
illegal seizure. And there is merit to the solution of letting the
Trial Judge decide whether the evidence is admissible or not in
the light of subsection 24(2) of the Charter.
This, however, does not settle the constitutional issue
involved. Subsection 231(4) of the Income Tax Act is invalid
and unconstitutional because it is per se unreasonable and
contrary to section 8 of the Charter. One cannot protect the
rights of citizens against unreasonable searches and at the same
time permit the authorities to benefit from them. The Crown
must respect the limits imposed by section 8. And since the
seizure was illegal, the Court must impose a sanction. What
would be more appropriate or in keeping with the thrust of
section 8 and subsection 24(1) than to order the documents
returned to their owner?
As for the motion to amend the statement of claim, it is
denied. First, there is no evidence allowing the Court to deter
mine which documents belong to the plaintiff and which to the
accountant. Second, the accountant is a stranger to these
proceedings and therefore not in a position to defend his own
interests. While the accountant's lawyer is present because he
also happens to represent the plaintiff, this is not sufficient
because there might be a serious conflict of interest between the
plaintiff and his accountant. In any event, applying the Ontario
Cour03f Appeal decision in Mode/ Power v. R. (1981), 21 C.R.
(3d) 195, the plaintiff would not have the necessary authority
to intervene.
The plaintiffs claim for damages is dealt with in the Editor's
note below.
CASES JUDICIALLY CONSIDERED
APPLIED:
Model Power v. R. (1981), 21 C.R. (3d) 195 (Ont. C.A.).
DISTINGUISHED:
Skis Rossignol Canada Ltée/Ltd. v. Hunter, [1985] I
F.C. 162 (T.D.); Lewis v. M.N.R. et al., [1984] CTC
642; 84 DTC 6550 (F.C.T.D.).
REFERRED TO:
R. v. Wray, [1971] S.C.R. 272; 11 D.L.R. (3d) 673;
Hogan v. The Queen, [1975] 2 S.C.R. 574; 48 D.L.R.
(3d) 427; Rothman v. The Queen, [1981] 1 S.C.R. 640;
Hunter et al. v. Southam Inc., [1984] 2 S.C.R. 145; 11
D.L.R. (4th) 641; 55 N.R. 241; 33 Alta. L.R. (2d) 193;
[1984] 6 W.W.R. 577; 84 DTC 6467; 14 C.C.C. (3d) 97;
41 C.R. (3d) 97; 9 C.R.R. 355; Re Chapman and The
Queen (1984), 12 C.C.C. (3d) 1 (Ont. C.A.); R. v. Noble
(1984), 6 O.A.C. 11; 42 C.R. (3d) 209; Blackwoods
Beverages Ltd. v. R., [1985] 2 W.W.R. 159; 47 C.P.C.
294 (Man. C.A.); The Queen v. Rowbotham, et al.,
judgment dated November 20, 1984, Ont. S.C., Ewas-
chuk J., not yet reported; Minister of National Revenue
v. Kruger Inc., [1984] 2 F.C. 535 (C.A.).
COUNSEL:
Guy Du Pont and Jacques Bernier for
plaintiff.
Yvan Roy and Richard Corbeil for defend
ants.
SOLICITORS:
Verchère, Noël & Eddy, Montreal, for
plaintiff.
Deputy Attorney General of Canada for
defendants.
The following is the English version of the
reasons for judgment rendered by
JOYAL J.:
EDITOR'S NOTE
The plaintiff's documents were seized by offi
cials of the Department of National Revenue
acting by authority of a search warrant obtained
from a Superior Court judge in accordance with
subsection 231(4) of the Income Tax Act. That
section was subsequently (by the Federal Court
of Appeal in Minister of National Revenue v.
Kruger Inc., [1984] 2 F.C. 535) held to be of no
effect as in conflict with section 8 of the Charter.
The plaintiff commenced an action claiming dam
ages as a remedy available under subsection
24(1) of the Charter, the return of the documents
and the exclusion from evidence of the docu
ments seized in the raid upon his trial with respect
to charges laid under the Income Tax Act.
The Editor has decided to publish this judgment
in an abridged version. An abridgment is provided
covering the facts of the case and the reasons for
judgment on the damages issue. The reasons for
judgment with respect to the disposition of the
seized documents are published in their entirety.
Readers may wish to compare the reasons for
judgment herein with those of Denault J. in Skis
Rossignol Canada Ltée/Ltd. v. Hunter, reported
at page 162 of this volume.
The plaintiff was of European descent and his
knowledge of our official languages and adminis
trative procedures was somewhat restricted. He
failed to file income tax returns over a four year
period. A lengthy investigation—which included a
seizure of documents from the plaintiff's auditor—
revealed that the plaintiff had income not only
from his pizza restaurant but also from mortgages
and the sale of real property.
The plaintiff alleged that he suffered from
stress and a damaged reputation due to the raid.
Joyal J. was unconvinced by the evidence called
to substantiate these allegations. His Lordship
pointed out that it was entirely understandable
that a person in the plaintiff's situation would be
depressed. Nor was the investigation of a busi
nessman by the taxing authorities a cause of
scandal. If the raid was conducted somewhat
firmly, it had to be kept in mind that the authorities
had every reason to think that this was not a trivial
case but one involving the concealment of a
substantial amount of revenue. Finally, the plain
tiff's allegation that his business had suffered due
to being deprived of his records was not made
out. The evidence was that these documents
were always available to him and he could have
secured any copies needed.
Under section 24 of the Charter, the Court had
a discretion to grant such remedy as was appro
priate and just in the circumstances. At the time of
the raid, subsection 231(4) was presumed to be
valid and the authorities acted in good faith and in
accordance with the law and well-established
procedures. There was accordingly no reason for
awarding damages.
It now remains to be determined whether the
plaintiff is entitled to have returned to him those
documents which the defendant [The Queen]
claims to need for purposes of the criminal pros
ecution. Here the Court faces a dilemma, or
rather, faces conflicting values. On the one hand,
it is well established that possession by another is
not valid against the owner, and as a general rule
it is entirely in order for the owner to be able to
claim back his property. Any refusal by a court to
recognize this right in a normal situation would be
likely to bring the administration of justice into
disrepute.
However, the public interest runs against this
rule. It is true that the evidence was illegally
obtained, but at common law this would not in
itself have meant that the evidence must be reject
ed. Under common law, the fundamental principle
is the admissibility of the evidence, regardless of
how it was obtained. This principle was reiterated
by the Supreme Court in Wray' and Hogan. 2 The
exception to the rule, according to scholarly opin
ion, was limited to cases where it would be mani
festly unfair for the evidence to be admitted or
where it was obtained in scandalous circum
stances, or, finally, as Lamer J. of the Supreme
Court of Canada said in Rothman, 3 where the
conduct of the authorities is conduct "that shocks
the community".
1 R. v. Wray, [1971] S.C.R. 272; 11 D.L.R. (3d) 673.
2 Hogan v. The Queen, [1975] 2 S.C.R. 574; 48 D.L.R. (3d)
427.
3 Rothman v. The Queen, [1981] 1 S.C.R. 640 at page 642.
All this leads me to believe that the right of any
owner to claim back illegally obtained property is
not an absolute right. The case law has allowed the
authorities to use such property as evidence.
The plaintiff argued that owing to the illegality
of the search, the documents seized should be
returned to him. An order to this effect would
resolve the problem of admissibility. Once the
evidence had been returned to its owner, the
matter would be settled.
I shall quote here the introduction to the learned
article by Claude -André Lachance which recently
appeared in the Canadian Bar Review: 4
[TRANSLATION] Being somewhere between the common law
model, which admits the evidence, and the American exclusion-
ary model, section 24(2) represents a compromise which
requires the judge, when faced with improperly obtained evi
dence, to decide whether to give priority to the proper applica
tion of the law or to the search for truth. For this purpose the
judge must evaluate the circumstances in which the evidence
was obtained on the basis of criteria to be found in Scottish and
Australian law, in scholarly opinion and, where necessary, in
the obiter dicta of Canadian judges who accept the principle
that improperly obtained evidence should be excluded only in
exceptional circumstances. In this sense, section 24(2) raises
considerations of judicial ethics: it imposes minimum standards
of conduct while permitting a certain flexibility in the evalua
tion of the circumstances in which the evidence was obtained in
light of the particular characteristics of the case.
I conclude from this synthesis that the discretion
which existed before the Canadian Charter of
Rights and Freedoms, [being Part I of the Consti
tution Act, 1982, Schedule B, Canada Act 1982,
1982, c. 11 (U.K.)] came into force remains sub
stantially the same. Taking all the circumstances
into account, a judge must consider the remedies
provided for in subsection 24(1), which might
include returning the evidence to its owner, or the
admissibility of such evidence under subsection
24(2). In either case the debate will be between
the doctrine of admission of evidence on one hand
and the exclusionary doctrine on the other.
Although the issue remains substantially the
same, however, it must henceforth be discussed in
the context of a right guaranteed in section 8 of
the Charter. Section 8 states that "Everyone has
4 "L'exclusion de la preuve illégalement obtenue et la
Charte" (1984), 62 Can. Bar Rev. 278.
the right to be secure against unreasonable search
or seizure." In French: "Chacun a droit à la
protection contre les fouilles, les perquisitions ou
les saisies abusives." [Emphasis added.] This is a
constitutional protection afforded to individuals,
any infringement of which gives rise to a remedy
under subsection 24(1). Returning the illegally
seized documents might well be one such remedy.
Traditional scholarly opinion, which tended to
favour admitting the evidence, reflected the public
interest alone. Before the Charter, there was no
constitutional law protecting a person against
unreasonable search or seizure. This leads me to
believe that a court must now consider the admiss
ibility of evidence not only in the context of wheth
er or not it is likely to bring the administration of
justice into disrepute but also in the context of an
infringement of the rights and freedoms constitu
tionally guaranteed by the Charter.
There are numerous decisions on how illegally
obtained evidence should be dealt with. There are
not many decisions, however, concerning the reme
dies provided for in subsection 24(1). My learned
colleague, Denault J., when dealing with circum
stances similar to those in the case at bar, made a
complete analysis of these decisions in his judg
ment rendered on February 22, 1985 in the Skis
Rossignol case.' The learned judge had to rule not
on the admissibility of the evidence which was to
be adduced before him but on whether documents
which the Crown needed for purposes of a prosecu
tion should be returned. It was not disputed that as
a result of the Southam 6 decision, the invalidity of
section 10 of the Combines Investigation Act
[R.S.C. 1970, c. C-23] made the search warrant
for the documents belonging to Skis Rossignol
null and void. Denault J. stated the following [at
pages 166-167]:
The only real issue is whether the applicants are entitled to
have all the photocopies or microfiches of the documents
illegally seized returned to them, in particular those which the
Crown maintains it needs for purposes of its charge.
5 Skis Rossignol Canada LtéelLtd. v. Hunter, [1985] 1 F.C.
162 (T.D.).
6 Hunter et al. v. Southam Inc., [1984] 2 S.C.R. 145; 11
D.L.R. (4th) 641; 55 N.R. 241; 33 Alta. L.R. (2d) 193; [1984]
6 W.W.R. 577; 84 DTC 6467; 14 C.C.C. (3d) 97; 41 C.R. (3d)
97; 9 C.R.R. 355.
According to counsel for the applicants, once the seizure has
been quashed, the victims of such an unreasonable seizure are
entitled to have the articles seized returned to them and to any
reproductions that have been made of them even if judicial
proceedings have since been instituted. In addition, the appli
cants would be entitled to request that use of the illegally
obtained documents be prohibited.
According to counsel for the respondents, return of the copies
of illegally seized articles should be permitted only with great
caution, especially where a charge has been laid; thus a return
of such goods may be ordered if the search authorization or the
seizure itself were technically or substantively defective, or
were not properly executed. This would not be so if nothing
vitiated the search or seizure as such other than the fact that
the Act authorizing them has been held to be inoperative by a
decision of the Supreme Court of Canada.
Denault J. concluded that no special circum
stances had been established that would justify
granting the relief sought by the applicants. "The
respondents' affidavit," the Court said, "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'."
Before drawing his conclusions, Denault J. cited
several recent decisions which had dealt with the
question of returning illegally seized articles.
Sometimes, he concluded, there was a finding in
favour of the victim,' and sometimes a finding in
favour of the Crown. 8 He also cited the Lewis
case, 9 where Walsh J. of this Court had adopted a
"middle" position by ordering the Crown to return
the illegally seized articles but only by a date that
would give the Crown time to carry out a new
seizure legally.
I may also cite the judgment of the Manitoba
Court of Appeal in Blackwoods Beverages Ltd.,'°
which was rendered on November 20, 1984, as
well as the reasons for judgment of Ewaschuk J. of
7 Re Chapman and The Queen (1984), 12 C.C.C. (3d) 1
(Ont. C.A.).
8 R. v. Noble (1984), 6 O.A.C. 11; 42 C.R. (3d) 209.
9 Lewis v. M.N.R. et al., [ 1984] CTC 672; 84 DTC 6550
(F.C.T.D.).
10 Blackwoods Beverages Ltd. v. R., [1985] 2 W.W.R. 159;
47 C.P.C. 294 (Man. C.A.).
the Ontario Supreme Court in Rowbotham." In
Blackwoods Beverages, Monnin C.J. endorsed the
principle that illegally seized articles or documents
should be returned. In Rowbotham, Ewaschuk J.,
the Trial Judge, considered the provisions of sub
section 24(2) and not subsection 24(1) of the
Charter. I do not think that decisions under sub
section 24(2) can assist a court which is being
asked to grant relief under subsection 24(1).
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 judi
ciously. 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 circum
stances surrounding the seizure. In the case before
me, more particularly, he could weigh the fact that
officers of Revenue Canada were apparently put
on the plaintiff's track as a result of an earlier
seizure at the office of the plaintiff's accountant.
All this reasoning, however, relates only in
directly to the constitutional aspect of the dispute.
Subsection 231(4) of the Income Tax Act [R.S.C.
1952, c. 148 (as am. by S.C. 1970-71-72, c. 63,
s. 1)] is declared null and void and unconstitution
al because it is in itself unreasonable and contrary
to the right granted everyone under section 8 of
the Charter. One cannot easily protect the rights
of citizens against unreasonable seizure if, at the
same time, the authorities are allowed to benefit
from such seizures. One cannot give something
and at the same time take it away.
11 The Queen v. Rowbotham, et al., Ontario Supreme Court,
November 20, 1984.
"The Constitution of Canada is the supreme law
of Canada," as subsection 52(1) of the Constitu
tion [Constitution Act, 1982, Schedule B, Canada
Act 1982, 1982, c. 11 (U.K.)] states, "and any law
that is inconsistent with the provisions of the Con
stitution is, to the extent of the inconsistency, of no
force or effect." Section 8 is a constitutional provi
sion guaranteeing "the right to be secure against
unreasonable search or seizure", in French "droit
à la protection contre les fouilles, les perquisitions
ou les saisies abusives." (Emphasis added.) This is
a protection against public authority. The section
states that every individual is entitled to this pro
tection. It therefore imposes on public authorities
and on Parliament an obligation to administer
justice in accordance with this rule. The intention
of the rule is precisely to have public authorities
respect the right to this protection.
This does not mean that the administration of
justice is prejudiced, however. The public authori
ties need merely act in accordance with the law. In
cases of searches or seizures, section 8 imposes a
check to protect the balance between collective
needs and the constitutional rights of the individu
al. The public authorities must act within the
limits imposed by this section.
While concurring in the reasons of my brothers
Walsh and Denault JJ., I would thus like to
emphasize the importance a court should attach to
the impact of our new Charter and the legality of
any acts by the public authorities. In the case at
bar, the seizure was illegal. It is declared unrea
sonable owing to the statutory provision on which
it was based. The proceedings instituted by the
public authorities are illegal. Faced with such
illegality, a court must impose a sanction. I cannot
conceive of a more reasonable or more equitable
sanction that is more in keeping with the thrust of
section 8 and the relief provided in subsection
24(1) than a requirement that the documents
seized be returned to their owner. The public
authorities can always use other legitimate means
to carry out their statutory responsibilities and
enforce the law.
There remains to be considered another incident
pertaining to the dispute. On January 2, 1985, the
plaintiff asked this Court for leave to amend again
his statement of claim, to add to the relief sought
the return of certain documents he maintained
belonged to him and which were allegedly seized
during a search at the office of his chartered
accountant on December 3, 1981. The Court was
also asked for an order preventing the defendants
from using any of the documents seized from his
accountant or any information these documents
may have contained.
It was later agreed that there would be a
resumption of the proceedings to rule on the
motion itself and on the merits of the relief sought.
This resumption of the proceedings took place in
Montreal on March 14, 1985 and at that time the
Court had the benefit of arguments ably presented
by both counsel.
I have concluded that I cannot grant such relief.
I am unaware of the contents of the documents in
question and which are involved in another pro
ceeding before this Court. These documents were
presumably in the accountant's possession, and I
have no evidence before me that would allow me to
decide which documents belong to the plaintiff and
which belong to the accountant. I could not decide
the question solely on the basis of an assertion by
the plaintiff or his counsel. I have no idea of the
accountant's interests in the matter. The account
ant is not before the Court. He is truly a stranger
to the litigation. How could I rule on his rights or
obligations or intervene in his dispute in his
absence?
Admittedly counsel for the plaintiff is also coun
sel for the accountant. It appears from the evi
dence filed during the proceedings, however, that
there might be a serious conflict of interest be
tween the plaintiff and his accountant. All the
more reason not to intervene. It is up to the
accountant, in his own case, to take any necessary
steps to obtain the appropriate relief. In any event,
as a result of the decision of the Ontario Court of
Appeal in the Model Power case, ' 2 the plaintiff
would not have the necessary authority to
intervene.
12 Model Power v. R. (1981), 21 C.R. (3d) 195 (Ont. C.A.).
By way of conclusion, the Court declares the
searches and seizures made on July 8, 1982 to be
illegal and contrary to section 8 of the Canadian
Charter of Rights and Freedoms. The Court
orders that the documents which are being kept in
the Court Registry and which were the subject of a
written admission between the parties on Decem-
ber 19, 1984, Exhibit D-2, be returned to the
plaintiff. The plaintiff may take possession of these
documents in the office of the Registry of the
Federal Court of Canada, at the Courthouse, 11th
floor, 1 Notre Dame Street, Montreal, Quebec,
between 10 a.m. and 3 p.m. on May 17, 1985. If
the plaintiff, or any other person acting under his
written authority, has not exercised this right by
the deadline on May 17, 1985, order that the
documents be released from the Court's care.
The other relief sought by the plaintiff is
refused. I award the plaintiff his costs.
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