Methanex Corp. et al. v. Minister of National Revenue, (1996) 191 A.R. 223 (QB)

• Judge: Wilkins, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: September 24, 1996
• Citations: (1996), 191 A.R. 223 (QB)

Methanex Corp. v. MNR (1996), 191 A.R. 223 (QB)

MLB headnote and full text

Methanex Corporation, Ocelot Chemicals Inc., A.O.N. Holdings Ltd., 18127 Alberta Ltd. and Royal Bank of Canada (applicants) v. Her Majesty The Queen as represented by the Department of National Revenue (respondent)

(Action No. 9601-07443)

Indexed As: Methanex Corp. et al. v. Minister of National Revenue

Alberta Court of Queen's Bench

Judicial District of Calgary

Wilkins, J.

October 30, 1996.

Summary:

The applicants were clients of a law firm served with a demand to produce documents under the Income Tax Act. The applicants sought a determination of their claim to solicitor-client privilege pursuant to s. 232.1(e) of the Act.

The Alberta Court of Queen's Bench held that the documents were privileged, with one possible exception, and should be returned to the applicants' solicitors. The court reserved its ruling with regard to the possible excep­tion pending further representations by the applicants.

Income Tax - Topic 9275

Enforcement - Production of documents - Demand to lawyer - [See Income Tax - Topic 9281 ].

Income Tax - Topic 9281

Enforcement - Lawyer-client privilege from disclosure - General - The appli­cants were clients of a law firm served with a demand to produce documents under the Income Tax Act - The docu­ments included memoranda and correspon­dence prepared by solicitors, correspon­dence from the clients' accountants and correspondence between law firms - The applicants claimed solicitor-client privilege - The Alberta Court of Queen's Bench held that, generally, the documents were privileged in light of the following four requi­site conditions: (1) the communica­tions orig­inated in confidence; (2) confi­dentiality was essential; (3) the solicitor-client rela­tionship was one which in the community's opinion should be sedulously fostered; (4) the injury would be greater than the bene­fit gained - See paragraphs 4 to 21.

Income Tax - Topic 9286

Enforcement - Lawyer-client privilege from disclosure - Disposition of applica­tion by judge - The applicants, clients of a law firm served with a demand to pro­duce documents under the Income Tax Act, claimed solici­tor-client privilege - Some of the documents were attachments - The Alberta Court of Queen's Bench held that the documents were privileged - The court found that the attachments were correspondence and memorandum prepared or exchanged between client and solicitors or between solicitors in the course of providing legal advice with one possible exception - The court reserved its ruling pending further representations in relation to the exception - See paragraphs 22 and 23.

Income Tax - Topic 9286

Enforcement - Lawyer-client privilege from disclosure - Disposition of applica­tion by judge - The applicants, clients of a law firm served with a demand to pro­duce documents under the Income Tax Act, claimed solicitor-client privilege - The documents pertained to, inter alia, correspondence to a client from his ac­countants - The Alberta Court of Queen's Bench held that the documents were privi­leged - The court underlined that privilege extended to communica­tions emanating from accountants as the docu­ments were collected by the solicitors for purposes of preparing legal advice - See paragraphs 7, 8, 23 and 24.

Income Tax - Topic 9286

Enforcement - Lawyer-client privilege from disclosure - Disposition of applica­tion by judge - The applicants, clients of a law firm served with a demand to pro­duce documents under the Income Tax Act, claimed solicitor-client privilege - The documents pertained to correspon­dence between law firms with respect to obtaining legal advice relevant to a client's dealings - The Alberta Court of Queen's Bench held that the documents were privi­leged as they met the conditions requi­site to a claim of solicitor-client privilege - The court underlined that solicitor-client privilege could extend to communications between an applicant's solicitors and out­side solicitors where the applicant's solici­tors were not qualified to advise - See paragraphs 6 and 24.

Cases Noticed:

Descôteaux et Centre Communautaire Juridique de Montréal v. Mierzwinski et al. (1982), 44 N.R. 462; 141 D.L.R.(3d) 590 (S.C.C.), refd to. [para. 4].

Mutual Life Assurance Co. of Canada v. Canada (Attorney General) (1988), 88 D.T.C. 6511 (Ont. H.C.), refd to. [para. 6].

Susan Hosiery Ltd. v. Minister of National Revenue (1969), 69 D.T.C. 5278 (Ex. Ct.), refd to. [para. 7].

Interprovincial Pipe Line Inc. et al. v. Minister of National Revenue (1995), 95 D.T.C. 5642, refd to. [para. 9].

Strass v. Goldsack, [1975] 6 W.W.R. 155 (Alta. C.A.), appld. [para. 10].

Guarantee Co. of North America v. Beasse et al. (1991), 150 A.R. 241 (Q.B.), refd to. [para. 11].

Statutes Noticed:

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 232.1(e) [para. 3].

Authors and Works Noticed:

Wigmore on Evidence, pp. 527, 528 [para. 10].

Counsel:

D.M. Todesco, for the applicants;

J.E. (Ted) Fulcher, for the respondent.

This application was heard in Chambers on September 24, 1996, before Wilkins, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who rendered the fol­lowing judgment on October 30, 1996.