A-2-89
Alan Tyler (Appellant)
v.
Minister of National Revenue (Respondent)
INDEXED AS: TYLER V. M.N.R. (CA.)
Court of Appeal, Pratte, Hugessen and Stone
JJ.A.—Toronto, October 3; Ottawa, November
19, 1990.
Income tax — Practice — Appeal from dismissal of
application to prohibit demand for information pursuant to
Income Tax Act, s. 231.2(1)(a) — Appellant charged with
importing and trafficking in narcotics — Revenue Canada
requiring signed statements of expenses, assets (including
property of kind charged with possessing) and liabilities —
Appellant objecting information could be used as evidence
against him in criminal proceedings — Appeal allowed —
Charter, s. 7 infringed by communication to police of signed
statements while charges outstanding.
Constitutional law — Charter of Rights — Life, liberty and
security — Appeal from dismissal of application to prohibit
Minister of National Revenue from demanding information as
to assets (including property of kind charged with possessing)
while charges of importing and trafficking in narcotics against
appellant outstanding — Appeal allowed — Charter, s. 7
providing residual protection over and above that contained in
Charter, ss. 8 to 14 — Communication of information to police
while charges pending would result in deprivation of liberty
and security of person — Contrary to principle of fundamental
justice (accused's right to silence).
Constitutional law — Charter of Rights — Criminal process
— Trial Judge dismissing application to prohibit Minister
from demanding financial information pursuant to Income
Tax Act, s. 231.2(1)(a) — Charter, s. 8 not infringed as
procedure reasonable — S. 11(c) not infringed — Protecting
against testimonial compulsion of accused "charged with an
offence" — Charges not related to income tax offence.
Constitutional law — Charter of Rights — Enforcement —
Charter, s. 7 infringed if information relating to property of
kind charged with possessing demanded by Revenue Canada
pursuant to Income Tax Act, s. 231.2(1)(a) communicated to
police while importing and trafficking in narcotics charges
outstanding — Anticipated Charter infringement may be sub
ject of Charter, s. 24 remedy to prevent fundamental unfair
ness occurring in criminal justice system.
Constitutional law — Charter of Rights — Limitation
clause — Constitutionality of Income Tax Act, s. 241(3) could
not be raised for first time on appeal — M.N.R. prejudiced by
having to show s. 29l (3) justified under Charter, s. I without
benefit of legislative facts supporting position.
This was an appeal from the trial judgment dismissing an
application to prohibit the respondent from demanding infor
mation, pursuant to Income Tax Act, paragraph 231.2(1)(a),
communicating it to any other person, and to require the return
of information and documents already so obtained. In 1987, the
appellant was charged with having imported and trafficked in
narcotics between 1982 and 1987 contrary to the Narcotic
Control Act and the Criminal Code. Further to its investigation
into whether the appellant had reported all of his income for
those years, Revenue Canada served him with a set of "require-
ments" pursuant to paragraph 231.2(1)(a) calling for signed
statements, under pain of prosecution, of personal and living
expenses, assets (including property of the kind the accused was
charged with possessing) and liabilities during those years. The
appellant argued that such information could be used as evi
dence against him in the criminal proceedings. The Trial Judge
held that subsection 231.2(1) had not been invoked for a
purpose unrelated to the administration or enforcement of the
Income Tax Act. He held that Charter, sections 7 (right not to
be deprived of life, liberty and security of the person except in
accordance with the principles of fundamental justice), 8 (pro-
tection against unreasonable search or seizure), 11(c) (right of
person charged with an offence not to be compelled to be a
witness in proceedings in respect of that offence), and 13 (right
of witness not to have incriminating evidence used to incrimi
nate him in other proceedings) had not been infringed. The
appellant argued that the Trial Judge had erred in failing to
infer that the Minister's actions had been calculated in part to
assist the RCMP in their investigation; in failing to find
Charter infringements; and in failing to find Income Tax Act,
subsection 241(3) of no force and effect. Subsection 241(3)
exempts criminal proceedings from the prohibitions in subsec
tions (1) and (2) against divulging information obtained for the
purposes of the Income Tax Act. The appellant sought to argue
that subsection 241(3) was inconsistent with the Charter,
although that issue had not been raised at trial.
Held, the appeal should be allowed.
The constitutionality of subsection 241(3) could not be raised
for the first time on appeal. The general rule is that an
appellate court should not deal with a point raised for the first
time on appeal, unless it is clear that had the question been
raised at the proper time, no further light could have been shed
upon it. If the Court accepted that subsection 241(3) was
unconstitutional, the respondent would be prejudiced by having
to show, if it could, pursuant to Charter section 1, that the
subsection was justified without benefit of an opportunity to
adduce evidence of legislative facts supporting that position.
It was open to the Trial Judge to refuse to infer from the
facts that the respondent was seeking the information to assist
the police in prosecuting the criminal charges. There was no
suggestion in the record that the respondent was not acting
solely for a purpose related to the administration or enforce
ment of the statute.
The appellant's rights under either Charter, section 8 or
paragraph 11(c) had not been infringed. The Supreme Court of
Canada has found the procedure in the predecessor to subsec
tion 231.2(1) to be reasonable and not a violation of Charter,
section 8. Therefore, subsection 231.2(1) does not violate
section 8. Paragraph 11(c) was not infringed because the
charges were not related to offences under the Income Tax Act.
The protection afforded by that paragraph is a protection
against testimonial compulsion of an accused "charged with an
offence". It would not protect against the communication to the
respondent or to the police of the signed statements here in
issue.
Section 7 may provide residual protection over and above
that contained in Charter, sections 8 to 14. The appellant's
rights under Charter, section 7 would be infringed by the
communication to the police of the signed statements at any
time while the charges were outstanding. The compulsion of the
statements would result in a deprivation of the appellant's
liberty and security of the person. That deprivation would not
be in accord with the principles of fundamental justice in that
the accused would be denied a right to silence. The right of an
accused to remain silent is a basic tenet of our legal system and
a principle of fundamental justice. It was important to this
conclusion that the charges had been laid prior to invoking the
paragraph 231.2(1)(a) procedure.
The grant of an appropriate and just remedy under Charter,
section 24 would not be a thinly disguised attack on the
constitutionality of subsection 241(3). The power to withhold
or to communicate the signed statements is not compelled by
the subsection but is a mere administrative power. The respond
ent stands in the position of a volunteer, deriving no authority
from subsection 241(3). That subsection simply removed the
prohibitions contained in subsections (1) and (2). An anticipat
ed infringement of a Charter right may be the subject of a
subsection 24(1) remedy in limited circumstances. Unless a
remedy is available herein, appellant's right to remain silent
will be infringed by communication of the signed statements or
any of their contents to the police while the criminal charges
are outstanding. Subsection 24(1) does provide the power to
prevent such fundamental unfairness occurring in our criminal
justice system.
The Trial Judge did not err in interpreting section 241 as not
prohibiting communication of the signed statements to the
police.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II,
No. 44], ss. 1, 7, 8, 1 1(c),(d), 13, 24.
Criminal Code, R.S.C., 1985, c. C-46, s. 312.
Federal Court Act, R.S.C., I 985, c. F-7, s. 18.
Federal Court Rules, C.R.C., c. 663, R. 1101(a).
Income Tax Act, R.S.C. 1952, c. 148 (as am. by S.C.
1970-71-72, c. 63, s. 1), ss. 231.2 (as enacted by S.C.
1986, c. 6, s. 121), 238(2) (as am. idem, s. 123),
239(1), 241(3) (as am. by S.C. 1980-81-82-83, c. 68, s.
117; 1987, c. 46, s. 68).
Narcotic Control Act, R.S.C., 1985, c. N-1, ss. 4(1),
5(1).
CASES JUDICIALLY CONSIDERED
APPLIED:
Lamb v. Kincaid (1907), 38 S.C.R. 516; 27 C.L.T. 489;
Thomson v. Lambert, [1938] S.C.R. 253; [1938] 2
D.L.R. 545; (1938), 70 C.C.C. 78; MacKay v. Manitoba,
[1989] 2 S.C.R. 357; [1989] 6 W.W.R. 351; (1989), 61
Man. R. (2d) 270; R. v. Amway Corp., [1989] 1 S.C.R.
21; (1989), 56 D.L.R. (4th) 309; 33 C.P.C. (2d) 163; 68
C.R. (3d) 97; 37 C.R.R. 235; [1989] 1 C.T.C. 255; 91
N.R. 18; Canadian Bank of Commerce v. Attorney Gen
eral of Canada, [1962] S.C.R. 729; (1962), 35 D.L.R.
(2d) 49; 62 DTC 1236; R. v. McKinlay Transport Ltd.,
[1990] 1 S.C.R. 627; (1990), 76 C.R. (3d) 283; 106 N.R.
385; Thomson Newspapers Ltd. v. Canada (Director of
Investigation and Research, Restrictive Trade Practices
Commission), [1990] 1 S.C.R. 425; (1990), 76 C.R. (3d)
129; R. v. Wooley (1988), 40 C.C.C. (3d) 531; 63 C.R.
(3d) 333; 25 O.A.C. 390 (Ont. C.A.); Operation Dis
mantle Inc. et al. v. The Queen et al., [1985] 1 S.C.R.
441; (1985), 18 D.L.R. (4th) 481; 12 Admin. L.R. 16; 13
C.R.R. 287; 59 N.R. 1; R. v. Vermette, [1988] 1 S.C.R.
985; (1985), 14 O.A.C. 161; 41 C.C.C. (3d) 523; 64 C.R.
(3d) 82; 84 N.R. 296.
REVERSED:
A. Tyler v. M.N.R., [1989] 1 C.T.C. 153; (1988), 88
DTC 5044; 24 F.T.R. 38 (F.C.T.D.).
REFERRED TO:
Re B.C. Motor Vehicle Act, [1985] 2 S.C.R. 486; (1985),
24 D.L.R. (4th) 536; [1986] 1 W.W.R. 481; 69 B.C.L.R.
145; 23 C.C.C. (3d) 289; 48 C.R. (3d) 289; 18 C.R.R.
30; 36 M.V.R. 240; 63 N.R. 266; R. v. Hebert, [1990] 2
S.C.R. 151; Bowen v. Minister of Employment, and
Immigration, [1984] 2 F.C. 507; (1984), 58 N.R. 223
(C.A.); Yri-York Ltd. v. Canada, [1988] 3 F.C. 186;
(1988), 30 Admin. L.R. 1; 16 F.T.R. 319; 83 N.R. 195
(C.A.); Kravets v. Minister of Employment and Immi
gration, [1985] 1 F.C. 434 (T.D.).
COUNSEL:
Peter I. Waldmann for appellant.
Roslyn J. Levine for respondent.
SOLICITORS:
Golden, Green & Chercover, Toronto, for
appellant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered in English by
STONE J.A.: This is an appeal from a judgment
of the Trial Division rendered on December 6,
1988,' wherein an application for relief under
section 18 of the Federal Court Act [R.S.C., 1985,
c. F-7] was dismissed. The appellant sought to
prohibit the respondent from demanding informa
tion, pursuant to paragraph 231.2(1)(a) of the
Income Tax Act, R.S.C. 1952, c. 148, as amended
[S.C. 1970-71-72, c. 63, s. 1; S.C. 1986, c. 6, s.
121], from or concerning him and from com
municating the same to any other person, and to
require the return of information and documents
already so obtained.
BACKGROUND
In July, 1987, the appellant and others were
charged with the offences that, between October 1,
1982, and June 6, 1987, they imported into
Canada and trafficked in a narcotic contrary to
subsections 5(1) and 4(1) of the Narcotic Control
Act, R.S.C., 1985, c. N-1 and section 312 of the
Criminal Code [R.S.C., 1985, c. C-46] and that,
in the same period, they conspired and agreed to
have in possession property or things, or the pro
ceeds of property or things of a value exceeding
$1,000 knowing the same to be derived directly or
indirectly from the commission in Canada of the
offence of trafficking in a narcotic contrary to
subsection 4(1) of the Act and section 312 of the
Criminal Code.
Shortly after the existence of these charges
came to the notice of Revenue Canada via a
newspaper article of September 4, 1987, the
Department began to investigate the possibility
that the appellant had not reported all of his
income in earlier years. Income tax returns on file
were reviewed, and documents seized by the Royal
' A. Tyler v. M.N.R., [1989] 1 C.T.C. 153.
Canadian Mounted Police in the criminal proceed
ings, and made available to Revenue Canada for
the purpose, were inspected. Upon request of the
RCMP, Revenue Canada furnished orally a rough
net worth of the appellant and, later, a draft net
worth calculation which was based, in part, upon
information gained from the appellant in an inter
view conducted by the Department. The Depart
ment acted in both instances on the prior legal
advice of the Department of Justice.
Desiring access to more information than was
thus available, Revenue Canada next decided to
serve the appellant with a set of "requirements"
pursuant to paragraph 231.2(1)(a) of the Income
Tax Act, which reads:
231.2 (I) Notwithstanding any other provision of this Act,
the Minister may, subject to subsection (2), for any purpose
related to the administration or enforcement of this Act, by
notice served personally or by registered or certified mail,
require that any person provide, within such reasonable time as
is stipulated in the notice,
(a) any information or additional information, including a
return of income or a supplementary return; or
Seven "requirements" dated October 15, 1987,
were served on November 2, 1987. The appellant
was required to respond within thirty days. Several
of these requirements call for a "signed statement
of your personal and living expenses" while others
require a "signed statement of your assets and
liabilities" as at December 31, 1983, 1984, 1985
and 1986. These latter statements are to show
certain assets separately, and must give "full
details of any other assets owned by you, whether
or not registered in your name" as at these Decem-
ber 31 year ends. Each of the demands conclude as
follows:
This information is to be certified by you as being correct in
every respect to the best of your knowledge and belief and is to
be forwarded to the District Taxation Office, 36 Adelaide St.
East, Toronto, Ontario, M5C 1J7.
If this requirement is not complied with, you will be liable to
prosecution without further notice. Subsection 238(2) of the
said Act provides that a person who fails to comply with this
requirement is guilty of an offence and liable on summary
conviction to a fine of not less than $200.00 and not more than
$10,000.00 or both the fine and imprisonment not exceeding six
months. Further, subsection 231.2(7) also provides that where a
person is found guilty of an offence under subsection 238(2) for
failing to comply with a requirement, the court may make such
order as it deems proper in order to enforce compliance with
the requirement. 2
It is apparent that the appellant will be required
by his signed statements, under pain of prosecu
tion, to give, inter alia, correct details of assets on
hand at different times during the period the
offences are alleged to have been committed (be-
tween October 1, 1982, and June 6, 1987), which
statements will include details of property of the
kind the appellant is charged with possessing, i.e.
"property or things or the proceeds of property or
things of a value exceeding one thousand dollars
($1,000.00) knowing the same to be derived direct
ly or indirectly from the commission in Canada of
the offence of trafficking in a narcotic" contrary to
subsection 4(1) of the Narcotic Control Act.
The appellant took the position that he is
"unwilling to furnish any financial information
[pursuant to the paragraph 231.2(1)(a) demands]
which may be used as evidence against me" 3 in the
criminal proceedings. Accordingly, on November
26, 1987, he commenced an application in the
Trial Division for the following relief:
2 Appeal Book, Vol. 1, at pp. 24-25. As of the date of the
paragraph 231.2(1)(a) "requirements", October 15, 1987,
subsection 238(2) [as am. by S.C. 1986, c. 6, s. 123] of the
Act read in part:
238... .
(2) Every person who has failed to comply with ... any
sections 230 to 232 is guilty of an offence and, in addition to
any penalty otherwise provided, is liable on summary convic
tion to
(a) a fine of not less than $200 and not exceeding $10,000
or
(b) both the fine described in paragraph (a) and imprison
ment for a term not exceeding 6 months.
Subsection 231.2(7) of the Income Tax Act provided:
231.2 .. .
(7) Where a person is found guilty of an offence under
subsection 238(2) for failing to comply with a requirement
under subsection (1), the court may take such order as it
deems proper in order to enforce compliance with the
requirement.
This subsection was repealed by S.C. 1988, c. 55, s. 174.
By subsection 239(1) it is an offence to make a false or
deceptive statement.
3 Appellant's Affidavit, Appeal Book, Vol. 1, at p. 2.
(a) a Writ of Prohibition, or relief in the nature of prohibi
tion, directed against the Respondent, the Minister of Na
tional Revenue, to prohibit the Minister from demanding
information from or concerning the Applicant under section
231.2(1)(a) of the Income Tax Act, on the grounds that the
Minister is acting for a purpose unrelated to the administra
tion or enforcement of the Income Tax Act,
(b) an order directing the Minister of National Revenue to
return any and all documents or information already
obtained under subsection 231.2(1)(a) of the Income Tax
Act concerning the Applicant and prohibiting the Minister
from communicating any knowledge thereof to any other
person, and
The application was dismissed by the Trial Divi
sion with costs on December 6, 1988, Mr. Justice
Strayer concluding that subsection 231.2(1) had
been properly invoked and that the voluntary com
munication of the information obtained pursuant
thereto to peace officers engaged in prosecuting
criminal offences for which charges have already
been laid should not be prohibited. Arguments
based upon alleged infringement of the appellant's
rights under sections 7, 8, 11(c), 11(d) and 13 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.)
[R.S.C., 1985, Appendix II, No. 44]] were also
rejected.
THE ISSUES
The issues raised on this appeal, basically as
formulated by the appellant, are that the Trial
Judge:
(a) failed to draw the inference from the facts that the
actions of the respondent were done, in part, to assist the
R.C.M.P., and hence the demands upon the respondent
under the Income Tax Act were invalid;
(b) failed to find that the Appellant's rights under sections 7,
8, 11(c) and 11(d) of the Charter of Rights and Freedoms
were being infringed by the actions of the respondent, and
failed to provide an appropriate remedy under section 24 of
the Charter; 4
(c) failed to hold subsection 241(3) of the Income Tax Act to
be of no force and effect pursuant to subsection 52(1) of the
Constitutional Act, 1982.
It will also be necessary to deal with a further
argument advanced by the appellant to the effect
that the Trial Judge's construction of subsection
241(3) of the Income Tax Act was erroneous.
4 I note that no specific argument based upon infringement of
a right protected by paragraph 11(d) of the Charter was
advanced by the appellant before us.
DISCUSSION
Subsection 241(3) issue (constitutionality)
I shall deal first with the last of the enumerated
issues. Subsections 241(1), (2) and (3) of the
Income Tax Act [as am. by S.C. 1980-81-82-83, c.
68, s. 117; 1987, c. 46, s. 68] read:
241. (1) Except as authorized by this section, no official or
authorized person shall
(a) knowingly communicate or knowingly allow to be com
municated to any person any information obtained by or on
behalf of the Minister for the purposes of this Act, or the
Petroleum and Gas Revenue Tax Act,
(b) knowingly allow any person to inspect or to have access
to any book, record, writing, return or other document
obtained by or on behalf of the Minister for the purposes of
this Act or the Petroleum and Gas Revenue Tax Act, or
(c) knowingly use, other than in the course of his duties in
connection with the administration or enforcement of this
Act or the Petroleum and Gas Revenue Tax Act, any
information obtained by or on behalf of the Minister for the
purposes of this Act or the Petroleum and Gas Revenue Tax
Act.
(2) Notwithstanding any other Act or law, no official or
authorized person shall be required, in connection with any
legal proceedings,
(a) to give evidence relating to any information obtained by
or on behalf of the Minister for the purposes of this Act or
the Petroleum and Gas Revenue Tax Act, or
(b) to produce any book, record, writing, return or other
document obtained by or on behalf of the Minister for the
purposes of this Act or the Petroleum and Gas Revenue Tax
Act.
(3) Subsections (1) and (2) do not apply in respect of
criminal proceedings, either by indictment or on summary
conviction, that have been commenced by the laying of an
information, under an Act of the Parliament of Canada, or in
respect of proceedings relating to the administration or enforce
ment of this Act or the Petroleum and Gas Revenue Tax Act.
Even though the issue respecting the constitu
tionality of subsection 241(3) was not raised in the
Trial Division, the appellant seeks to raise it before
this Court. After launching the appeal, the appel
lant filed a "Notice of Constitutional Question per
Rule 1 101 "5 dated April 3, 1990 which reads:
Rule 1101(a) of the Federal Court Rules [C.R.C., c. 663]
provides:
Rule 110/. Where any constitutional question or any
question of general importance is raised by any matter before
the Court,
(a) any party may serve a notice on the Attorney General
of Canada or the Attorney General of any province who
may be interested;
Take notice that the Appellant intends to raise the question
of the constitutionality of s. 241(3) of the Income Tax Act in
the above noted appeal, stating that said section is of no force
and effect due to s. 52(1) of The Constitution of Canada, and is
also unconstitutional due to its violation of the Appellant's
rights under ss. 7, 8, 11(c), I 1(d) and 13 of The Charter of
Rights and Freedoms.
Because only the construction of the subsection
241(3) was before the Trial Division and not its
constitutionality, the respondent objects to the
issue being dealt with in that it is raised for the
first time upon the appeal. As a general rule, an
appellate court ought not to deal with a point so
raised "unless it be clear that, had the question
been raised at the proper time, no further light
could have been thrown upon it": Lamb v. Kincaid
(1907), 38 S.C.R. 516, at page 539 as cited by
Duff C.J. in Thomson v. Lambert, [1938] S.C.R.
253, at page 269.
I am in agreement with the respondent's submis
sion that it might well suffer some prejudice if the
Court were to deal with the issue when it was not
raised below. That prejudice would lie in the fact
that if the Court were to give effect to the appel
lant's contention that the subsection was inconsist- .
ent with the Charter, the respondent would be
faced with having to show, if it could, pursuant to
section 1 of the Charter, that the subsection was
nevertheless justified in a free and democratic
society, even though it has had no opportunity to
present any evidence of legislative facts which
might enable it to discharge the section 1 onus.
The fact is that section 1 evidence was not present
ed in the Trial Division for the simple reason that
no issue as to the constitutionality of subsection
241(3) was there raised.
The importance of the existence of pertinent
facts to a Charter decision was recently under
scored by the Supreme Court of Canada in
MacKay v. Manitoba, [ 1989] 2 S.C.R. 357, per
Cory J. at pages 361-362:
Charter decisions should not and must not be made in a
factual vacuum. To attempt to do so would trivialize the
Charter and inevitably result in ill-considered opinions. The
presentation of facts is not, as stated by the respondent, a mere
technicality; rather, it is essential to a proper consideration of
Charter issues.... Charter decisions cannot be based upon the
unsupported hypotheses of enthusiastic counsel.
The Supreme Court of Canada has also refused to
permit a section 7 issue to be raised for the first
time before that Court. In R. v. Amway Corp.,
[1989] 1 S.C.R. 21, at page 42, Sopinka J. said.
In my opinion, given the importance of s. 7 of the Charter, a
decision should not be rendered with respect to its operation
without the opinion of the courts below and without affording
possible interveners the opportunity to participate in the
proceedings.
In the circumstances, I would decline to deal
with the issue respecting the constitutionality of
subsection 241(3) of the Income Tax Act.
Inferences issue
As I understand it, the appellant quarrels with
the Trial Judge's finding that the information
sought pursuant to the paragraph 231.2(1)(a)
"requirements" was not being sought at the
request of the RCMP for the purpose of prosecut
ing the criminal charges referred to above. The
Trial Judge rejected this submission, characteriz
ing the evidence relied upon as consisting of but "a
flimsy tissue of innuendos". 6 He specifically
declined to draw an inference that the tax audit
activities were solely related to the criminal
charges because they were undertaken after the
Department became aware that those charges had
been laid. I can see no proper ground for interfer
ing with the refusal of the Trial Judge to draw an
inference that the information being sought by the
respondent under the "requirements" was for the
purpose of prosecuting those charges. The learned
Trial Judge found that the "requirements" are for
a purpose related to the administration or enforce
6 [19891 1 C.T.C. 153, at p. 156.
ment of the Income Tax Act, 7 and it was quite
within his province to so view the matter. Nowhere
in the record is there the slightest suggestion that
the respondent was not acting solely for a purpose
related to the administration or enforcement of the
statute.
Charter violations issues
The appellant contends that communication of
the signed statements to the respondent or to the
police would infringe rights he possesses under
sections 7, 8 and 11(c) of the Charter and asks this
Court to grant an "appropriate and just" remedy
under subsection 24(1) of the Charter.' It thus
becomes necessary to deal with the appellant's
contention that his rights under sections 7, 8 and
11(c) would be so infringed and, if so, to determine
whether the sought after relief is available in the
circumstances.
I begin by addressing the submissions that rights
guaranteed by sections 8 or 11(c) are being
infringed. This approach would seem to be
required by the decided cases which are to the
effect that rights protected by sections 8 to 14 of
the Charter are illustrative of the greater right
guaranteed in section 7: Re B.C. Motor Vehicle
Act, [1985] 2 S.C.R. 486, per Lamer J., speaking
for the majority, at pages 502-503; Thomson
Newspapers Ltd. v. Canada (Director of Investi
gation and Research, Restrictive Trade Practices
Commission), [1990] 1 S.C.R. 425, per Lamer J.,
at page 442; per Wilson J., at page 470; per La
Forest J., at pages 536-537; per L'Heureux-Dubé
J., at pages 570-571; per Sopinka J., at page 601.
Thus, if we were to conclude that the action of the
' As the Trial Judge stated, the obtaining of information
pursuant to paragraph 231.2(1)(a) that, objectively speaking, is
relevant to the tax liability of a specific person such as the
appellant, whose liability to tax is under investigation, has been
held in Canadian Bank of Commerce v. Attorney General of
Canada, [1962] S.C.R. 729, to be a purpose related to the
administration or enforcement of the Income Tax Act and
therefore valid. See also R. v. McKinlay Transport Ltd., [1990]
1 S.C.R. 627, at pp. 639-640.
Subsection 24(1) reads:
24. (1) Anyone whose rights or freedoms, as guaranteed by
this Charter, have been infringed or denied may apply to a
court of competent jurisdiction to obtain such remedy as the
court considers appropriate and just in the circumstances.
respondent in requiring the signed statements to be
made or in communicating them to the police
would infringe a right protected by section 8 or
paragraph 11(c), it would not be necessary to
consider whether a right guaranteed under section
7 would also be infringed.
Section 8
The appellant submits that the Trial Judge
erred in deciding that the procedure authorized by
paragraph 231.2(1)(a) of the Income Tax Act
would not amount to a "seizure" within the mean
ing of section 8 of the Charter. Section 8 reads:
8. Everyone has the right to be secure against unreasonable
search or seizure.
It was the view of the Trial Judge that:
There is no physical intrusion involved. The taxpayer is
required by law to provide the information demanded of him,
but he is at liberty to challenge, as he is doing in these
proceedings, the validity of the requirements before providing
the information. 9
I agree that the appellant's contention must be
rejected. In R. v. McKinlay Transport Ltd.,
[1990] 1 S.C.R. 627, the Supreme Court of
Canada concluded that the subsection 231(3) (the
predecessor of subsection 231.2(1)) procedure was
"reasonable" and hence not a violation of section
8. That case would seem to be conclusive of the
matter.
Paragraph 11(c)
I cannot agree either that the situation before us
indicates an infringement of a paragraph 11(c)
right. That section reads:
11. Any person charged with an offence has the right
(c) not to be compelled to be a witness in proceedings against
that person in respect of the offence.
It was the view of the Trial Judge that the
appellant
..: is not being compelled to answer "in proceedings against
[him] in respect of [an] offence" as required by paragraph
1 I (c) of the Charter. There is no offence in issue in the tax
audit. The common law protection against self-incrimination
did not extend to such matters prior to the Charter, nor has the
9 [1987] 1 C.T.C. 153, at p. 160.
protection of paragraph 11(c) been so regarded since the
adoption of the Charter. 10
If I have properly understood this view, the para
graph 11(c) protection cannot avail the appellant
because, in any event, the charges are not related
to a failure of the appellant to duly report an
amount or amounts of taxable income and to pay
the tax exigible thereon under the Income Tax
Act. No "proceedings" of that nature were under
way at the relevant time. Rather, the charges were
laid independently of that statute, and allege the
commission of offences under the Narcotic Control
Act and the Criminal Code.
It seems to be generally accepted that the pro
tection afforded by paragraph 11(c) is a protection
against testimonial compulsion of an accused
"charged with an offence": see e.g. Thomson
Newspapers, supra, per Wilson J., at page 481;
and per Sopinka J., at page 601. Accordingly,
paragraph 11(c) itself would not protect against
the communication to the respondent or to the
police of the signed statements here in issue. The
Trial Judge, though expressing certain views on
the subject, found it unnecessary to decide whether
the appellant is to be considered "a witness"."
Section 7
It becomes necessary to examine the appellant's
ultimate Charter right contention, namely, that
section 7 protects him against making the signed
statements to the respondent or the communica
tion of the same to the police in the circumstances
of this case. That section reads:
7. Everyone has the right to life, liberty and security of the
person and the right not to be deprived thereof except in
accordance with the principles of fundamental justice.
The Trial Judge had no difficulty in deciding that
section 7 could not avail the appellant. He said:
With respect to section 7, I am doubtful that it provides
additional procedural protection in areas specifically covered by
the other legal rights in sections 8 to 14. Counsel has certainly
made no compelling argument that some constitutional protec
tion exists in these circumstances beyond those provided in the
specific sections of the Charter I have already discussed. 12
10 Ibid, at p. 158.
11 [1987] 1 C.T.C. 153, at p. 158.
12 [l 989] 1 C.T.C. 153, at p. 160.
It seems clear, however, that section 7 may
provide in certain contexts a residual protection
over and above that contained in sections 8 to 14
of the Charter. I would refer here to what was
said, for example, by La Forest J. in Thomson
Newspapers, at page 537:
Like my colleagues, I am prepared to agree that s. 7 of the
Charter may in certain contexts at least provide residual pro
tection to the interests the right is designed to protect that goes
beyond the specific protection provided by ss. 11(c) and 13.
In my opinion the compulsion of these state
ments by the respondent pursuant to paragraph
231.2(1)(a) would result in a deprivation of the
appellant's liberty and security of the person under
section 7. This approach would seem to accord
with the analysis contained in Thomson Newspa
pers, per Wilson J., at pages 459-461; per La
Forest J., at page 536; per L'Heureux-Dubé J., at
pages 572-573.
I agree, however, that in the context of the tax
audit the deprivation does not amount to a breach
of the principles of fundamental justice. In the tax
audit per se there is no suspect and no accused.
The procedure is entirely administrative in nature.
See e.g. R. v. McKinlay, supra, per La Forest J.,
at page 650.
It remains to be decided whether the deprivation
of liberty and security of the person would accord
with the principles of fundamental justice given
the fact that concurrent criminal charges laid
under other federal enactments are pending in the
courts. In my view, any communication of the
signed statements to the police in these circum
stances would amount to "conscripting" the appel
lant against himself in the existing criminal pro
ceedings in a way that would not accord with the
principles of fundamental justice in that it would
deprive him, as an accused person, of his right to
silence.
That an accused has the right to remain silent
has been accepted as a basic tenet of our legal
system and, as such, a principle of fundamental
justice. I take guidance from what has been said in
several of the decided cases, including R. v. Wool-
ley (1988), 40 C.C.C. (3d) 531 (Ont. C.A.), per
Cory J.A. (as he then was), at page 539:
Section 7 of the Charter provides that a person is not to be
deprived of his liberty except in accordance with the principles
of fundamental justice. Those fundamental principles are to be
found in the basic tenets of our legal system. It has always been
a tenet of our legal system that a suspect or accused has a right
to remain silent at the investigative stage of the criminal
process and at the trial stage. At the very least, it is clear that
an accused person is under no legal obligation to speak to police
authorities and there is no legal power in the police to compel
an accused to speak: see for example, R. v. Esposito (1985), 24
C.C.C. (3d) 88 at p. 94, 53 O.R. (2d) 356 at p. 362, 49 C.R.
(3d) 193 at pp. 200-1 (C.A.); leave to appeal to the Supreme
Court of Canada refused February 24, 1986, see C.C.C. &
O.R. /oc. cit., 65 N.R. 224n; R. v. Manninen ( 1983), 8 C.C.C.
(3d) 193 at p. 199, 3 D.L.R. (4th) 541, 48 O.R. (2d) 731 (Ont.
C.A.).
The right to remain silent is a well-settled principle that has
for generations been part of the basic tenets of our law.
In Thomson Newspapers Sopinka J. said, at page
599:
The right to remain silent is the basis for the non-compella-
bility of the accused as a witness at trial but it extends beyond
the witness box. In R. v. Esposito (1985), 24 C.C.C. (3d) 88
(Ont. C.A.), at p. 94, Martin J.A. outlined its scope:
The right of a suspect or an accused to remain silent is
deeply rooted in our legal tradition. The right operates both
at the investigative stage of the criminal process and at the
trial stage.
I would refer as well to what was said by La Forest
J., at page 537:
... the privilege or right against self-incrimination, sometimes
referred to as the right to silence, forms an integral part of the
principles of fundamental justice under our legal system.
and, at page 540:
I agree with Sopinka J. that an accused's right to silence must
extend beyond the actual trial itself, but I do not think it must
be extended to those who are ordered to testify in a proceeding
such as that provided by s. 17 of the Combines Investigation
Act.
As I see it, the communication of such com
pelled information to the police while the charges
are outstanding, would deny to the appellant his
right to silence contrary to the principles of funda
mental justice."
I wish to make two further observations at this
juncture. First, that we are not on this appeal
concerned with the admissibility in subsequent
proceedings of evidence compulsorily required to
be given pursuant to the Income Tax Act or
otherwise. That question is 'simply not reached.
Secondly, of importance to my conclusion that
communication of compelled information to the
police would deny the appellant his right to silence
contrary to the principles of fundamental justice is
that the charges under the other federal enact
ments were laid prior to the date the paragraph
231.2(1)(a) procedure was invoked. The question
whether the result might be different had, the
charges been laid subsequent to that date does not
arise on this appeal.
Charter remedy
It remains for me to determine whether, in the
particular circumstances of this case, it is open to
the, Court to grant an "appropriate and just"
remedy under section 24 of the Charter. I must
ask myself at the outset whether the granting of
such a remedy would, in effect, amount to a thinly
disguised attack upon the constitutionality of sub
section 241(3) itself when, as I have already said,
such an issue was not properly raised in the
present proceedings. In my view, this would not be
the case. The power to withhold or to communi
cate ,the signed statements is not one that is com
pelled by that subsection; it is, rather, a mere
administrative power. The respondent stands in the
position of a volunteer, deriving no authority per se
from subsection 241(3). That subsection simply
removed the prohibitions contained in subsections
(1) and (2) "in respect of criminal proceedings,
either by indictment or on summary conviction,
that have been commenced by the laying of an
information, under an Act of the Parliament of
Canada, or in respect of proceedings relating to
the administration or enforcement of this Act or
the Petroleum and Gas Revenue Tax Act".
" The right to silence under s. 7 of the Charter, including the
importance of an accused not being stripped by state authori
ties of his choice to insist upon it, was very recently discussed
by the Supreme Court of Canada in a case that was not
referred to in argument: R. v. Hebert, [1990] 2 S.C.R., 151.
I must also ask myself whether the anticipated
Charter infringement is such as to allow the Court
to grant a subsection 24(1) remedy. The courts,
including both divisions of the Federal Court of
Canada, have not been entirely in agreement on
the point. Some cases hold, indeed, that a court
can grant a remedy only if the infringement has
already occurred (see e.g. Bowen v. Minister of
Employment and Immigration, [ 1984] 2 F.C. 507
(C.A.); Yri-York Ltd. v. Canada (Attorney Gen
eral), [1988] 3 F.C. 186 (C.A.), while others have
come to the opposite conclusion (see e.g. Kravets v.
Minister of Employment and Immigration, [1985]
1 F.C. 434 (T.D.)).
While the Supreme Court of Canada has yet to
render a definitive judgment, it seems to me from
what has been said in that Court so far that an
anticipated infringement of a Charter right may
be made the subject of a subsection 24(1) remedy
in limited circumstances. Thus in Operation Dis
mantle Inc. et al. v. The Queen et al., [1985] 1
S.C.R. 441 (not cited in Yri-York), Dickson C.J.,
for the majority, stated at page 456: "A person,
whether the government or a private individual,
cannot be held liable under the law for an action
unless that action causes the deprivation, or threat
of deprivation, of legal rights"; and, at page 486,
Wilson J. spoke of the need to "establish at least a
threat of violation, if not an actual violation".
More recently, R. v. Vermette, [1988] 1 S.C.R.
985 (rendered subsequent to Yri- York), relying on
Operation Dismantle, further illustrates the will
ingness of the Supreme Court of Canada to take a
somewhat expansive view of the power contained
in subsection 24(1) to grant a remedy. La Forest
J., speaking for the Court, noted, at page 992, that
a remedy under that subsection is available:
... not only in the case of an actual interference with the
guaranteed rights, but also when an apprehension of such an
interference at a future trial can be established by an applicant.
In my view, unless a remedy is available in the
circumstances, the appellant's right to remain
silent will be infringed by the communication of
the signed statements or any of their contents to
the police while the criminal charges remain out-
standing in the courts. The power to prevent such
fundamental unfairness occurring in our criminal
justice system is, I think, provided for in subsec
tion 24(1).
Section 241 issue (interpretation)
I come to a final point of substance raised by the
appellant. He contends that the construction
placed upon subsections 241(1),(2) and (3) of the
Income Tax Act by the learned Trial Judge that,
fairly read, they do not prohibit communication of
the signed statements to the police, was in error.
With respect, the learned Trial Judge, in my view,
was quite right in rejecting this submission. I
would do so also, and for the reasons he has given.
SUMMARY
In summary, the learned Trial Judge (a) did not
err in refusing to draw an inference from the facts
that the actions of the respondent were done, in
part, to assist the RCMP; (b) did not err in finding
that the appellant's rights under either section 8 or
paragraph 11(c) of the Charter were not infringed;
(c) did err in failing to find that the appellant's
right to remain silent under section 7 of the Chart
er would be infringed by the communication to the
RCMP of the signed statements required under
paragraph 231.2(1)(a) of the Income Tax Act at
any time while the charges in question remain
outstanding in the courts, and should be prohib
ited; (d) did not err in his interpretation of subsec
tions 241(1),(2) and (3) of the Income Tax Act, or
in failing to hold subsection 241(3) to be of no
force and effect in that the constitutional validity
of that subsection was not raised in the Trial
Division.
DISPOSITION
I would, therefore, allow the appeal with costs
both here and in the Trial Division, set aside the
judgment of the Trial Division rendered December
6, 1988, and would make an order prohibiting the
respondent from communicating to the Royal
Canadian Mounted Police or to any other person
the signed statements of the appellant demanded
by the respondent pursuant to the October 15,
1987 "requirements" under paragraph 231.2(1)(a)
of the Income Tax Act, or of any of the contents
thereof, at any time while the charges against the
appellant under subsections 4(1) and 5(1) of the
Narcotic Control Act and under section 312 of the
Criminal Code remain outstanding in the courts.
PRATTE J.A.: I agree.
HUGESSEN J.A.: I agree.
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.