Rizwan Ahmad Khan Gondal
Articles du même auteur
28 Juin 2016

Section 8 of the Canadian Charter protects the notaries and lawyers “against unreasonable search or seizure”

Par Rizwan Ahmad Khan Gondal

By: Rizwan Ahmad Khan Gondal

Recently, in two cases Canada (Attorney General) v. Chambre des notaires du Québec, 2016 SCC 20 (« Chambre des notaires ») and Canada (National Revenue) v. Thompson, 2016 SCC 21 (« Thompson »), the Supreme Court grappled with the question whether notices sent to the notaries and lawyers by the Canada Revenue Agency (« CRA ») under certain provisions of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp) (« ITA ») requiring the notaries and the lawyers to disclose documents relating to their finances and accounts receivable violated solicitor-client privilege and, as such, whether the impugned provisions were contrary to section 8 of the Canadian Charter of Rights and Freedoms (« Charter ») which guarantees protection against unreasonable searches and seizures.

In both cases the Supreme Court issued an opinion in the affirmative.

In Chambre des notaires, several notaries in Québec received notices from the CRA pursuant to section 231.2 of the ITA requiring them to divulge information relating to their « clients » for « tax collection or audit purposes ». The CRA claimed that such information fell into the « accounting records exception » under section 232(1) of the said Act. The notices included the warning that failure to comply with the requirements could lead to fines or imprisonment. [Para 13]
After having failed to reach a compromise with the CRA, the Chambre des notaires instituted a declaratory proceeding at the Québec Superior Court to have « ss. 231.2 and 231.7 of the ITA and the accounting records exception declared […] unconstitutional and of no force or effect with respect to notaries ».
The Chambre des notaires « argued, inter alia, that those provisions authorized unreasonable seizures contrary to the Charter because they did not include adequate protection for professional secrecy ». [Para 14]
The Barreau du Québec « joined in the proceedings as an intervener for the purpose of having any declaration made by the courts concerning the legislative provisions in question apply equally to its members ». [Para 15]
In agreement with the Chambre des notaires, the Québec Superior Court issued a ruling declaring the unconstitutionality of « ss. 231.2 and 231.7 […] and the definition of “solicitor client privilege” in s. 232(1) of the ITA […] with respect to notaries and lawyers in Quebec for documents protected by professional secrecy ». [Para 16]
The court noted that the statutory scheme failed to « provide a way for clients who hold the right to professional secrecy to know that their right [was] in jeopardy or to ensure that it [was] protected by providing them [with] reasonable opportunity to raise an objection »’. [Para 18]
Consequently, the court « concluded that ss. 231.2 and 231.7 result in an unreasonable search and seizure contrary to s. 8 of the Charter ». [Para 18] The court also ruled that the accounting records exception was also « of no force or effect under the Constitution ». Accordingly, the court opined that « the CRA should always have to apply directly to a superior court judge when seeking to obtain privileged information ». [Para 19]
The court further noted that « exceptions to professional secrecy should be made very rarely and only as a last resort ». [Para 17]
The Québec Court of Appeal in essence agreed with the trial judge’s order but varied it only to the extent that it took out the paragraphs which « concerned the list of documents that Blanchard J. had recognized as being prima facie protected by professional secrecy » because doing so, the court thought, « [would be] risky to establish in advance a presumption as to what documents or classes of documents were privileged ». [Para 20]
Similarly, in Thompson, utilizing the accounting record exception under s 232(1) of the ITA, the Minister of National Revenue (« Minister« ) took action against Mr. Thompson « to obtain accounting records relating to his law practice ». Mr. Thompson however denied that request citing the reason that the « records in question [were] privileged ». [Para 1]

But the Federal Court, in its own right, agreed with the Minister and ordered Mr. Thompson to comply. The Federal Court of Appeal, in turn, however, determined that s232(1) did not make it necessary for Mr. Thompson to divulge his private client information. [Para 2]


In Chambre des notaires, the Court declared « s. 231.2(1) of the ITA, which authorizes the Minister to send requirements, and s. 231.7 of the ITA, which authorizes the Minister to apply to a court to follow up on a requirement, to be unconstitutional, and inapplicable to notaries and lawyers in their capacity as legal advisers ». [Para 93]
Additionally, the Court declared « the exception for a lawyer’s accounting records set out in the definition of “solicitor client privilege” in s. 232(1) of the ITA [to be] unconstitutional and invalid » because  » [t]he manner in which it limits the scope of professional secrecy [would not be] absolutely necessary to achieve the purposes of the ITA, which means that the exception is contrary to s. 8 of the Charter ». [Para 94]
Similarly, relying upon the reasoning in Chambre des notaires, the Court in Thompson concluded that the accounting record exception under s232(1) of the ITA « is constitutionally invalid because it violates s. 8 of the Canadian Charter of Rights and Freedoms » [Thompson, Paras 4, 41] as « it permits the state to obtain information that would otherwise be privileged to a far greater extent than is absolutely necessary for the administration of the ITA ». [Thompson, Para 35]
Additionally, in Chambre des notaires, the Court stated that « ss. 231.2(1) and 231.7 and the accounting records exception set out in s. 232(1) of the ITA — do not minimally impair the right to professional secrecy. As a result, they cannot be saved under s. 1 [of the said Charter] ». [Para 91]

The key argument against the impugned provisions of the ITA appears to be that when « a “requirement to provide documents or information” is sent to a notary or a lawyer, there is a risk that the information or documents being sought will, unbeknownst to the legal adviser’s client, reveal particulars that are protected by the professional secrecy of notaries and lawyers, otherwise known as solicitor-client privilege ». [Chambre des notaires, Para 2]
Since « the client is given no notice of the requirement, that an inappropriate burden is placed solely on the notary or lawyer concerned, that compelling disclosure of the information being sought is not absolutely necessary and that no measures have been taken to help mitigate the impairment of professional secrecy », [Chambre des notaires, Para 44] as such, « the relevant provisions of the ITA infringe the rights guaranteed by ss. 7 and 8 of the Canadian Charter of Rights and Freedoms (“Charter”), and the infringement cannot be justified under s. 1″. [Chambre des notaires, Para 2]
In agreement with the said argument, the Court reasoned that « solicitor-client privilege is a right that belongs to, and can only be waived by, a client of a legal professional (Lavallee, at para. 39; Chambre des notaires, at para. 45). In both Lavallee, at para. 40, and Federation of Law Societies of Canada, at paras. 48-49, this Court noted that a lawyer is not the alter ego of his or her client, so it is the client and not the lawyer who must be given an opportunity to assert the privilege over the information sought by the state. [And a] court must act to facilitate the client’s ability to do so ». [Thompson, Para 39]
The Court did not think that « the occasional service of requirements on clients in addition to notaries and lawyers » constitutes « a true notification system ». [Chambre des notaires, Para 51] Additionally, the Court opined that the « threat of prosecution » could create « a conflict of interests between legal advisers and their clients, pitting the duty of confidentiality owed by legal advisers to their clients against their statutory duty of disclosure to the tax authorities (Lavallee, at para. 40) ». [Chambres des notaires, Para 56]
Although in Thompson the Court, based upon the statutory interpretation principles enunciated in Blood Tribe, concluded that s232(1) is « intended to permit the Minister to have access to lawyers » accounting records even if they contain otherwise privileged information », [Thompson, Para 34] in Chambre des notaires the Court stated that « in the absence of absolute necessity » and the absence of the « possibility of judicial review », [Chambre des notaires, Para 78] a scheme which allows the accounting records of lawyers « to be seized gives the state access to a whole range of information that would otherwise be exempt from the duty to disclose and therefore exempt from seizure ». [Chambers des notaires, Para 71]
The Court opined that given a swath of such broad powers, the State would not always act « honourably ». [Chambre des notaires, Para 51] As such, the « accounting records exception » was held to infringe s. 8 of the Charter when it allowed « the unreasonable seizure of information found in the accounting records of notaries or lawyers ». [Chambers des notaires, Para 71]
In order to survive the reasonability test under section 1 of the Charter, the Court imposed a burden upon the CRA to show that « the impugned provisions of the ITA have a pressing and substantial objective and that the means chosen are proportional to that objective.
A law is proportionate if: (1) the means adopted are rationally connected to the objective; (2) it is minimally impairing of the rights in question; and (3) there is proportionality between the deleterious and salutary effects of the law ». [Chambres des notaires, Para 89]

The Court held that « the requirement scheme in relation to notaries and lawyers fails at the minimal impairment stage of the justification analysis ». [Chambre des notaires, Para 91.]

To read Canada (Attorney General) v. Chambre des notaires du Québec, 2016 SCC 20, click here.

To read Canada (National Revenue) v. Thompson, 2016 SCC 21, click here.

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