Kourtessis et al. v. Minister of National Revenue et al., (1993) 153 N.R. 1 (SCC)

• Judge: Cory, McLachlin, Stevenson and Iacobucci, JJ.
• Court: Supreme Court (Canada)
• Case Date: April 22, 1993
• Jurisdiction: Canada (Federal)
• Citations: (1993), 153 N.R. 1 (SCC);JE 93-836;78 BCLR (2d) 257;20 CR (4th) 104;[1993] 4 WWR 225;[1993] CarswellBC 1213;102 DLR (4th) 456;[1993] 2 SCR 53;[1993] 1 CTC 301;14 CRR (2d) 193;[1993] ACS no 45;81 CCC (3d) 286;27 BCAC 81;47 DTC 5137;[1993] SCJ No 45 (QL);1993 CanLII 137 (SCC);153 NR 1

Kourtessis v. MNR (1993), 153 N.R. 1 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Constantine Kourtessis and Hellenic Import-Export Co. Ltd. v. Minister of National Revenue, Attorney General for Ontario and Attorney General of Quebec

(21645)

Indexed As: Kourtessis et al. v. Minister of National Revenue et al.

Supreme Court of Canada

La Forest, L'Heureux-Dubé, Sopinka,

Cory, McLachlin, Stevenson and Iacobucci, JJ.

April 22, 1993.

Summary:

The Minister of National Revenue investi­gated a taxpayer and his company. The Minister applied for search warrants under s. 231.3 of the Income Tax Act. The British Columbia Supreme Court issued the war­rants. The warrants were later quashed by another justice of the same court due to nondisclosure of material information in the application. The seized material was not returned and the Minister applied for another warrant. The warrant was issued on the condition that everything seized would be sealed and the taxpayers would have 30 days to challenge the warrant. At that point in time, no charges had been laid. The taxpayers commenced proceedings under s. 231.3(7) of the Income Tax Act to challenge the warrant on constitutional and nonconsti­tutional grounds. The constitutional ground involved the submission that s. 231.3 of the Act contravened ss. 7, 8 and 15 of the Char­ter.

The British Columbia Supreme Court, in a decision reported at 15 B.C.L.R.(2d) 200; 36 C.C.C.(3d) 304, dismissed the nonconstitu­tional challenge. The British Columbia Supreme Court, in a decision reported at 30 B.C.L.R.(2d) 342; [1989] 1 W.W.R. 508; 44 C.C.C.(3d) 79; 89 D.T.C. 5214; [1989] 1 C.T.C. 56, dismissed the constitutional challenge. The taxpayers appealed. The Minister applied to have the appeal quashed on the ground there was no right of appeal from a determination under s. 231.3(7) of the Income Tax Act. Neither the Income Tax Act nor the Criminal Code, whose procedure was made applicable under the Interpretation Act, conferred a right of appeal. The taxpayers submitted that there was a right of appeal under the provincial rules of proce­dure.

The British Columbia Court of Appeal, in a decision reported at 39 B.C.L.R.(2d) 1; [1990] 1 W.W.R. 97; 50 C.C.C.(3d) 201; 72 C.R.(3d) 196; 89 D.T.C. 5464; 72 C.R.(3d) 196; 89 D.T.C. 5464; [1990] 1 C.T.C. 241, quashed the appeal. The taxpayers appealed. The appeal involved two issues: (1) did s. 231.3 of the Income Tax Act contravene the Charter and (2) was there a pre-charge right of appeal from a decision under s. 231.3(7) when the warrant had been obtained in a provincial superior court.

The Supreme Court of Canada, in an appeal argued at the same time and reported as Baron et al. v. Minister of National Rev­enue et al. (1993), 146 N.R. 270, held that s. 231.3 of the Income Tax Act contravened the Charter. The issue that fell to be decided in this case was whether there was a right of appeal and/or what was the proper remedy.

The Supreme Court of Canada held that the matter was amendable to judicial review and issued a declaration that the search warrant was of no force or effect.

*Stephenson, J., took no part in the deci­sion.

Administrative Law - Topic 4501

Judicial review - Declaratory action - When available - Revenue Canada obtained a search warrant under s. 231.3 of the Income Tax Act in the Superior Court of the province - The taxpayer applied to have the warrant quashed on the ground that s. 231.3 contravened the Charter - The issuing court declined to quash the warrant - The taxpayer appealed - Reve­nue Canada submitted there was no pre-trial right of appeal in either the Income Tax Act or the Criminal Code - Alterna­tively, the taxpayer requested a declaration that the provision contravened the Charter - The Supreme Court of Canada held that declaratory relief was available - See paragraphs 41 to 53 and 84 to 97 - How­ever, one justice observed that such relief should not be granted where criminal charges would be initiated within a rea­sonable time - See paragraph 51.

Administrative Law - Topic 5007

Judicial review - Certiorari - General principles - Criminal matters, when avail­able - Revenue Canada obtained a search warrant under s. 231.3 of the Income Tax Act in the provincial Superior Court - The taxpayer applied to have the warrant quashed on the ground that s. 231.3 con­travened the Charter - The issuing court declined to quash the warrant - The taxpayer appealed - Revenue Canada submitted there was no pretrial right of appeal in either the Income Tax Act or the Criminal Code - Alternatively, the taxpayer requested a declaration that the provision contravened the Charter - The Supreme Court of Canada granted declara­tory relief - See paragraphs 41 to 53 and 92 to 97 - However, one justice observed that "certiorari generally appears to be a more suitable instrument for reviewing the constitutionality of the action." - See paragraph 56.

Courts - Topic 2101

Jurisdiction - Appellate jurisdiction - General - A taxpayer's application to quash a search warrant issued under the Income Tax Act was dismissed - The existence of a right of appeal was ques­tioned - A justice of the Supreme Court of Canada stated that "[a]ppeals are solely creatures of statute ... There is no inherent jurisdiction in any appeal court. Nowadays, however, this basic proposition tends at times to be forgotten. Appeals to appellate courts and to the Supreme Court of Canada have become so established that there is a widespread expectation that there must be some way to appeal the decision of a court of first instance. But it remains true that there is no right of appeal on any matter unless provided for by the relevant legisla­ture." - See paragraph 15.

Courts - Topic 5688

Provincial courts - Jurisdiction or powers - Federal legislation - Declaratory relief - [See Administrative Law - Topic 4501 ].

Courts - Topic 5699

Provincial courts - Jurisdiction or powers - Constitutional rights - Certiorari - [See Administrative Law - Topic 5007 ].

Criminal Law - Topic 4821

Appeals - Indictable offences - Right of appeal - General - [See Courts - Topic 2101 ].

Criminal Law - Topic 7461

Summary conviction proceedings - Appeals - General - [See Courts - Topic 2101 ].

Income Tax - Topic 9309

Enforcement - Search and seizure - Issue of search warrants - Judicial review - As part of an investigation by Revenue Canada, a search warrant was obtained under s. 231.3 of the Income Tax Act in the Superior Court of the province - The taxpayer applied to have the warrant quashed - The court reviewed the matter under s. 231.3(7) and dismissed the appli­cation to quash - The taxpayer appealed - Revenue Canada submitted there was no pretrial right of appeal in either the Income Tax Act or the Criminal Code - Under the Interpretation Act, the Code's procedure was applicable where the Income Tax Act was silent - The taxpayer submitted there was a right of appeal under the provincial rules of procedure - Three justices of the Supreme Court of Canada held there was no right of appeal - See paragraphs 14 to 36.

Income Tax - Topic 9309

Enforcement - Search and seizure - Issue of search warrants - Judicial review - As part of an investigation by Revenue Canada, a search warrant was obtained under s. 231.3 of the Income Tax Act in the Superior Court of the province - The taxpayer applied to have the warrant quashed - The court reviewed the matter under s. 231.3(7) and dismissed the appli­cation to quash - The taxpayer appealed - Revenue Canada submitted there was no pretrial right of appeal in either the Income Tax Act or the Criminal Code - Under the Interpretation Act, the Code's procedure was applicable where the Income Tax Act was silent - The taxpayer submitted there was a right of appeal under the provincial rules of procedure - Three justices of the Supreme Court of Canada held there was a right of appeal where declaratory relief was requested on constitutional grounds - See paragraphs 72 to 83.

Income Tax - Topic 9309

Enforcement - Search and seizure - Issue of search warrants - Judicial review - A search warrant was obtained under s. 231.3 of the Income Tax Act in a provincial Superior Court - The taxpayer applied to have the warrant quashed - The issuing court dismissed the application - The taxpayer appealed - Revenue Canada submitted there was no pretrial right of appeal in either the Income Tax Act or the Criminal Code - The taxpayer submitted that the denial of an appeal created an anomaly in that there would have been a right of appeal under the Federal Court Act if Revenue Canada had applied to the Federal Court of Canada, Trial Division, for the warrant - The Supreme Court of Canada considered whether there was a right of appeal in the Federal Court - See paragraphs 36 to 40 and 82.

Income Tax - Topic 9309

Enforcement - Search and seizure - Issue of search warrants - Judicial review - [See Administrative Law - Topic 4501 ].

Income Tax - Topic 9309

Enforcement - Search and seizure - Issue of search warrants - Judicial review - [See Administrative Law - Topic 5007 ].

Income Tax - Topic 9312

Enforcement - Search and seizure - Appeals - [See first and second Income Tax - Topic 9309 ].

Practice - Topic 5806

Judgments and orders - Ex parte orders - Reconsideration of - Search warrants - [See first and second Income Tax - Topic 9309 ].

Practice - Topic 8980

Appeals - When appeal available - [See Courts - Topic 2101 ].

Practice - Topic 8985

Appeals - When appeal available - From interlocutory judgment - Search warrants - [See first and second Income Tax - Topic 9309 ].

Cases Noticed:

Baron et al. v. Minister of National Reve­nue et al. (1993), 146 N.R. 270 (S.C.C.), consd. [para. 1].

Knox Contracting Ltd. and Knox v. Canada and Minister of National Reve­nue et al., [1990] 2 S.C.R. 338; 110 N.R. 171; 106 N.B.R.(2d) 408; 265 A.P.R. 408, consd. [para. 4].

Kourtessis v. Minister of National Revenue (1987), 15 B.C.L.R.(2d) 200; 36 C.C.C.(3d) 304 (S.C.), refd to. [para. 7].

R. v. Meltzer and Laison, [1989] 1 S.C.R. 1764; 96 N.R. 391, refd to. [para. 15].

R. v. Mills, [1986] 1 S.C.R. 863; 67 N.R. 241; 16 O.A.C. 81; 52 C.R.(3d) 1; 26 C.C.C.(3d) 481; 29 D.L.R.(4th) 161; 21 C.R.R. 76, refd to. [para. 16].

R. v. Seaboyer and Gayme, [1991] 2 S.C.R. 577; 128 N.R. 81; 48 O.A.C. 81; 66 C.R.(3d) 321, refd to. [para. 16].

R. v. McKinlay Transport Ltd. and C.T. Transport Inc., [1990] 1 S.C.R. 627; 106 N.R. 385; 39 O.A.C. 385, refd to. [para. 18].

Canadian National Transportation Ltd. and Canadian National Railway Co. v. Canada (Attorney General); Canadian Pacific Transport Co. and Pauley v. Canada (Attorney General), [1983] 2 S.C.R. 206; 49 N.R. 241; 49 A.R. 39, refd to. [para. 20].

Canada (Attorney General) v. Canadian National Transportation Ltd. - see Canadian National Transportation Ltd. and Canadian National Railway Co. v. Canada (Attorney General); Canadian Pacific Transport Co. and Pauley v. Canada (Attorney General).

Storgoff, Re, [1945] S.C.R. 526, refd to. [para. 26].

Atlas Lumber Co. v. Winstanley, [1941] S.C.R. 87, consd. [para. 26].

Alberta (Attorney General) v. Atlas Lumber Co. - see Atlas Lumber Co. v. Winstanley.

Quebec (Attorney General) v. Canada (Attorney General), [1945] S.C.R. 600, consd. [para. 26].

Minister of National Revenue v. Lafleur, [1964] S.C.R. 412; 46 D.L.R.(2d) 439, refd to. [para. 27].

R. v. Wetmore, Kripps Pharmacy Ltd., Kripps and Attorneys General (Ont., Que., N.B., B.C., Sask., Alta.), [1983] 2 S.C.R. 284; 49 N.R. 286, refd to. [para. 27].

Director of Investigation and Research, Competition Act et al. v. Hoffmann-La Roche Ltd. (1987), 22 O.A.C. 85; 35 C.C.C.(3d) 488 (C.A.), refd to. [para. 30].

Goldman v. Hoffmann-La Roche Ltd. - see Director of Investigation and Research, Competition Act et al. v. Hoffmann-La Roche Ltd.

Adler v. Adler, [1966] 1 O.R. 732 (C.A.), refd to. [para. 31].

Siddall (William) & Sons Fisheries v. Pembina Exploration Canada Ltd., [1989] 1 S.C.R. 206; 92 N.R. 137; 33 O.A.C. 321, refd to. [para. 31].

R. v. Welch, [1950] S.C.R. 412, consd. [para. 32].

R. v. Cass (1985), 71 A.R. 248 (C.A.), refd to. [para. 32].

Taylor v. Attorney General (1837), 8 Sim. 413; 59 E.R. 164 (Ch. D.), refd to. [para. 42].

Guaranty Trust Co. of New York v. Hannay & Co., [1915] 2 K.B. 536 (C.A.), refd to. [para. 42].

Dyson v. Attorney General, [1911] 1 K.B. 410 (C.A.), refd to. [para. 42].

Jabour v. Law Society of British Columbia et al., [1982] 2 S.C.R. 307; 43 N.R. 451, refd to. [para. 42].

Terrasses Zarolega Inc., Zappia, Robinson, Lepine and Gaty v. Régie des Installa­tions Olympiques, [1981] 1 S.C.R. 94; 38 N.R. 411, refd to. [para. 45].

Canadian Council of Churches v. Canada et al., [1992] 1 S.C.R. 236; 132 N.R. 241, refd to. [para. 45].

Reference Re Section 12(1) of Juvenile Delinquents Act (Canada) (1983), 41 O.R.(2d) 113 (C.A.), refd to. [para. 46].

Southam Inc. and R. (No. 1), Re - see Reference Re Section 12(1) of Juvenile Delinquents Act (Canada).

Canadian Newspapers Co. v. Canada; R. v. D.D. (1985), 7 O.A.C. 161; 49 O.R.(2d) 557 (C.A.), revd. 87 N.R. 163; 32 O.A.C. 259 (S.C.C.), refd to. [para. 46].

R. v. Wilson, [1983] 2 S.C.R. 594; 51 N.R. 321; 26 Man.R.(2d) 194; 9 C.C.C.(3d) 97, refd to. [para. 49].

Argentina (Republic) v. Mellino, [1987] 1 S.C.R. 536; 76 N.R. 51; 80 A.R. 1; 52 Alta. L.R.(2d) 1; 28 C.R.R. 262; 33 C.C.C.(3d) 334; 40 D.L.R.(4th) 74, refd to. [para. 50].

Crevier v. Quebec (Attorney General) and Aubry, [1981] 2 S.C.R. 220; 38 N.R. 541; 127 D.L.R.(3d) 1, refd to. [para. 54].

Canada Labour Relations Board and Canada (Attorney General) v. L'Anglais (Paul) Inc., J.P.L. Productions Inc., Canada Union of Public Employees et al., [1983] 1 S.C.R. 147; 47 N.R. 351; 146 D.L.R.(3d) 202, refd to. [para. 54].

Thomson Newspapers Ltd. v. Director of Investigation and Research, Combines Investigation Act et al., [1990] 1 S.C.R. 425; 106 N.R. 161; 39 O.A.C. 161; 54 C.C.C.(3d) 417; 76 C.R.(3d) 129; 67 D.L.R.(4th) 161; 29 C.P.R.(3d) 97; 47 C.R.R. 1, refd to. [para. 75].

R. v. Trimarchi (1987), 24 O.A.C. 379; 63 O.R.(2d) 515 (C.A.), leave to appeal refused [1988] 1 S.C.R. xiv; 88 N.R. 320; 30 O.A.C. 358, refd to. [para. 77].

Alexander v. Vancouver Harbour Com­missioners, [1922] 1 W.W.R. 1254 (B.C.C.A.), refd to. [para. 77].

Morris v. Morris, [1950] O.R. 697 (H.C.), refd to. [para. 77].

R. v. Garofoli et al., [1990] 2 S.C.R. 1421; 116 N.R. 241; 43 O.A.C. 1; 60 C.C.C.(3d) 161; 80 C.R.(3d) 317; 50 C.R.R. 206, refd to. [para. 86].

R. v. Church of Scientology and Zaharia (1987), 18 O.A.C. 321; 31 C.C.C.(3d) 449 (C.A.), leave to appeal refused 82 N.R. 392; 23 O.A.C. 320 (S.C.C.), refd to. [para. 87].

R. v. Smith (M.H.), [1989] 2 S.C.R. 1120; 102 N.R. 205; 63 Man.R.(2d) 81; 52 C.C.C.(3d) 97, refd to. [para. 87].

Shumiatcher v. Saskatchewan (Attorney General)(No. 1) (1960), 34 C.R. 152 (Sask. Q.B.), refd to. [para. 90].

R. v. Sismey (1990), 55 C.C.C.(3d) 281 (B.C.C.A.), refd to. [para. 90].

Kohli v. Moase et al. (1988), 93 N.B.R.(2d) 426; 238 A.P.R. 426; 55 D.L.R.(4th) 737 (C.A.), refd to. [para. 91].

Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342; 92 N.R. 110; 75 Sask.R. 82; 38 C.R.R. 232; 57 D.L.R.(4th) 231; 47 C.C.C.(3d) 1; 33 C.P.C.(2d) 105; [1989] 3 W.W.R. 97, refd to. [para. 95].

R. v. Morgentaler, Smoling and Scott, [1988] 1 S.C.R. 30; 82 N.R. 1; 26 O.A.C. 1; 44 D.L.R.(4th) 385; 31 C.R.R. 1; 37 C.C.C.(3d) 449; 62 C.R.(3d) 1, refd to. [para. 95].

R. v. Morgentaler (1984), 6 O.A.C. 53; 16 C.C.C.(3d) 1 (C.A.), refd to. [para. 96].

Lethbridge (City) v. Canadian Western Natural Gas, Light, Heat & Power Co., [1923] S.C.R. 652, refd to. [para. 96].

Statutes Noticed:

Canada Act 1982 (U.K.), 1982, c. 11, Schedule B [para. 57].

Canadian Charter of Rights and Freedoms, sect. 7 [para. 9]; sect. 8 [paras. 1, 9]; sect. 15, sect. 24 [para. 9]; sect. 24(1) [para. 12].

Competition Act, R.S.C. 1970, c. C-23, generally [para. 30].

Constitution Act, 1867, sect. 91(3), sect. 91(27) [para. 12]; sect. 92(14) [para. 20]; sect. 96 [para. 4].

Constitution Act, 1982, Part I [para. 57]; sect. 52 [para. 57].

Court of Appeal Act, S.B.C. 1982, c. 7, sect. 6 [para. 12]; sect. 6(1)(a), sect. 6.1(2) [para. 69].

Criminal Code, R.S.C. 1985, c. C-46, sect. 487 [para. 31]; sect. 490 [para. 91]; sect. 674 [para. 19]; sect. 813 [para. 19].

Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, sect. 22 [para. 31].

Federal Court Act, R.S.C. 1985, c. F-7, sect. 28 [para. 37].

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 231 [para. 19]; sect. 231.3 [para. 1]; sect. 231.3(1) [para. 19]; sect. 231.3(7) [para. 9]; sect. 231.3(7)(a), sect. 231.3(7)(b) [para. 19]; sect. 239 [para. 8]; sect. 239(1), sect. 239(1)(a), sect. 239(1)(b), sect. 239(1)(c), sect. 239(1)(d), sect. 239(1)(e), sect. 239(1)(f), sect. 239(1)(g) [para. 18].

Interpretation Act, R.S.C. 1985, c. I-21, sect. 34(2) [para. 19].

Judicature Act (N.B.), R.S.N.B. 1973, c. J-2, generally [para. 76].

Matrimonial Causes Act, R.S.O. 1960, c. 232, sect. 7(1) [para. 78].

Rules of Court (B.C.), rule 5(22) [para. 42].

Rules of Court (U.K.), 1883, generally [para. 94].

Supreme Court Act, R.S.C. 1985, c. S-26, sect. 40 [para. 50].

Authors and Works Noticed:

Borchard, E., Declaratory Judgments (2nd Ed. 1941), p. 303 [para. 96].

Hogg, P.W., Constitutional Law of Canada (3rd Ed. 1992), p. 7-3 [para. 77].

Laskin's Canadian Constitutional Law (5th Ed. 1986), vol. 1, p. 185 [paras. 31, 77].

Strayer, B.L., The Canadian Constitution and the Courts (3rd Ed. 1988), generally [para. 43].

Wade, W., Administrative Law (6th Ed. 1988), p. 594 [para. 94].

Zamir, I., The Declaratory Judgment (1962), pp. 4-6, 7-9 [para. 42]; 226 [para. 96]; c. 6 [para. 45].

Counsel:

Guy Du Pont, Basile Angelopoulos and Ariane Bourque, for the appellants;

John R. Power, Q.C., Pierre Loiselle, Q.C., and Robert Frater, for the respondent;

Janet E. Minor and Tanya Lee, for the intervener, Attorney General for Ontario;

Yves Ouellette, Judith Kucharsky and Diane Bouchard, for the intervener, Attorney General of Quebec.

Solicitors of Record:

Phillips & Vineberg, Montreal, Quebec, for the appellants;

John C. Tait, Q.C., Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the respondent;

Ministry of the Attorney General, Toronto, Ontario, for the intervener, Attorney General for Ontario;

Ouellette, Desruisseaux, Veillette, Montreal, Quebec, for the intervener, Attorney General of Quebec.

This appeal was heard on February 6, 1992, before La Forest, L'Heureux-Dubé, Sopinka, Cory, McLachlin, Stevenson and Iacobucci, JJ., of the Supreme Court of Canada.

On April 22, 1993, the decision of the Supreme Court of Canada was delivered in both official languages and the following opinions were filed:

La Forest, J. (Cory, J., concurring) - see paragraphs 1 to 58;

L'Heureux-Dubé, J., concurring - see paragraph 59;

Sopinka, J. (McLachlin and Iacobucci, JJ., concurring) - see paragraphs 60 to 100.