Minister of National Revenue v. Newport Pacific Financial Group SA et al., (2007) 406 A.R. 150 (QB)

• Jurisdiction: Alberta
• Court: Court of Queen's Bench of Alberta (Canada)
• Judge: Graesser, J.
• Citation: (2007), 406 A.R. 150 (QB),2007 ABQB 115
• Date: 07 February 2007

MNR v. Newport Pacific Financial (2007), 406 A.R. 150 (QB)

MLB headnote and full text

Temp. Cite: [2007] A.R. TBEd. MR.020

Minister of National Revenue (applicant) v. Newport Pacific Financial Group SA and Michael P. Ritter (respondents)

(070142922X1; 2007 ABQB 115)

Indexed As: Minister of National Revenue v. Newport Pacific Financial Group SA et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Graesser, J.

February 22, 2007.

Summary:

The Minister of National Revenue was investigating Income Tax Act and Excise Tax Act compliance issues involving the respondents. The Minister applied under s. 490.15 of the Criminal Code for an order allowing him to examine and be provided copies of documents and computer records that the RCMP had seized from the respondents in the context of a criminal investigation.

The Alberta Court of Queen's Bench allowed the application and, exercising its discretion under s. 495.10, set limitations. The Minister's examination was to be limited to documents which were: (1) relevant to the Minister's investigation; and (2) not the subject of a valid claim to solicitor and client privilege by the respondents or clients of the respondents. The court also ordered the parties to appoint a person selected from the private sector to conduct the relevance and privilege review required by the above result and agree to a time frame for the review. If the parties failed to agree on the appointee or the time frame, the court would make the appointment and give directions about the time frame.

Criminal Law - Topic 3169

Special powers - Power of seizure - Inspection of things seized - The Minister of National Revenue was investigating Income Tax Act (ITA) and Excise Tax Act (ETA) compliance issues involving the respondents - The Minister obtained a Federal Court order (the Order) that required, pursuant to ss. 231.2(1)(a) and 231.2(1)(b) ITA and ss. 289(1)(a) and 289(1)(b) ETA, production of "information and documents" pertaining to Newport Financial's clients (Newport) for the period August 1, 2000 to July 31, 2004 - The respondents' documents and computer records (the Records) were seized by the RCMP in the context of a criminal investigation - The Minister applied under s. 490.15 of the Criminal Code for an order allowing him to examine and be provided copies of the Records - The respondents objected, saying that the Records sought to be reviewed could disclose irrelevant, privileged and confidential matters concerning unnamed Canadian residents - The Alberta Court of Queen's Bench allowed the applications but set limitations - The Order, whose validity was not challenged, essentially required Newport to turn over its client files - It was broad enough to cover the Canadian residents already identified as well as Canadian residents not presently known - The Order was also consistent with the Minister's investigation powers under ITA and ETA - Here, the Minister was entitled to apply for an order under s. 490.15 of the Criminal Code since he was a person with an interest in what was detained, as required by s. 490.15 - Exercising its discretion under s. 490.15, the court limited the Minister's review to Records relevant and not subject to valid solicitor client privilege claims by the respondents or their clients.

Income Tax - Topic 8966

Administration - Communication of information - Prohibition - Exemption - Enforcement - [See Criminal Law - Topic 3169 ].

Cases Noticed:

Canada (Attorney General) v. Ontario (Attorney General) (1997), 53 O.T.C. 217; 98 D.T.C. 6249 (Gen. Div.), refd to. [para. 5].

Anderson-Davis, Re, [1997] B.C.T.C. Uned. 645 (S.C.), refd to. [para. 5].

Bernick v. R., 2002 D.T.C. 7167 (Ont. Sup. Ct.), refd to. [para. 5].

Haynes v. R. (1998), 78 O.T.C. 129 (Gen. Div.), refd to. [para. 5].

Canada Customs and Revenue Agency v. Ontario (Attorney General), [2002] O.T.C. 75 (Sup. Ct.), refd to. [para. 5].

Redeemer Foundation v. Minister of National Revenue (2006), 354 N.R. 147; 2006 FCA 325 (F.C.A.), consd. [para. 5].

R. v. Newport Financial Pacific Group S.A. et al. (2003), 335 A.R. 283; 2003 ABPC 80, refd to. [para. 6].

R. v. Ritter (M.) et al. (2004), 359 A.R. 89; 2004 ABQB 332, refd to. [para. 6].

Ritter et al. v. Hoag et al. (2003), 327 A.R. 17; 296 W.A.C. 17; 2003 ABCA 82, refd to. [para. 6].

Ritter et al. v. Hoag et al. (2004), 363 A.R. 372; 343 W.A.C. 372; 2004 ABCA 421, leave to appeal dismissed (2005), 344 N.R. 195; 380 A.R. 245; 363 W.A.C. 245 (S.C.C.), refd to. [para. 6].

Ritter et al. v. Hoag et al. (2004), 364 A.R. 204; 2004 ABQB 269, refd to. [para. 6].

R. v. Dellapenna (R.N.) (1995), 62 B.C.A.C. 32; 103 W.A.C. 32 (C.A.), refd to. [para. 6].

R. v. Araujo (A.) et al., [2000] 2 S.C.R. 992; 262 N.R. 346; 143 B.C.A.C. 257; 235 W.A.C. 257; 2000 SCC 65, refd to. [para. 6].

Richardson (James) & Sons Ltd. v. Minister of National Revenue, [1984] 1 S.C.R. 614; 54 N.R. 241, consd. [para. 6].

Caisse populaire de Morinville Savings and Credit Union v. Pasay and Pasay (1982), 47 A.R. 311 (Q.B. Master), refd to. [para. 6].

R. v. Stinchcombe, [1991] 3 S.C.R. 326; 130 N.R. 277; 120 A.R. 161; 8 W.A.C. 161, refd to. [para. 6].

R. v. Chaplin (D.A.) et al., [1995] 1 S.C.R. 727; 178 N.R. 118; 162 A.R. 272; 83 W.A.C. 272, refd to. [para. 6].

R. v. O'Connor (H.P.), [1995] 4 S.C.R. 411; 191 N.R. 1; 68 B.C.A.C. 1; 112 W.A.C. 1, refd to. [para. 6].

R. v. Fosty and Gruenke, [1991] 3 S.C.R. 263; 130 N.R. 161; 75 Man.R.(2d) 112; 6 W.A.C. 112, refd to. [para. 6].

R. v. Gruenke - see R. v. Fosty and Gruenke.

R. v. McClure (D.E.), [2001] 1 S.C.R. 445; 266 N.R. 275; 142 O.A.C. 201, refd to. [para. 6].

Fortin v. Barreau du Québec, [2001] 2 S.C.R. 500; 272 N.R. 359, refd to. [para. 6].

Fortin v. Chrétien - see Fortin v. Barreau du Québec.

R. v. Schacher (D.G.) (2003), 339 A.R. 119; 312 W.A.C. 119; 2003 ABCA 313, refd to. [para. 6].

R. v. Law Office of Simon Rosenfeld et al., [2003] O.T.C. 782 (Sup. Ct.), refd to. [para. 6].

United States of America v. Ritter (2006), 406 A.R. 341; 2006 ABQB 576, refd to. [para. 6].

Canadian Bank of Commerce v. Canada (Attorney General), [1962] S.C.R. 729, refd to. [para. 6].

Statutes Noticed:

Criminal Code, R.S.C. 1985, c. C-46, sect. 490.15 [para. 2].

Excise Tax Act, R.S.C. 1985, c. E-15, sect. 289(1)(a), sect. 289(1)(b) [para. 13]; sect. 289(3) [para. 19].

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 231.2(1)(a), sect. 231.2(1)(b) [para. 13]; sect. 231.2(2), sect. 231.2(3); sect. 231.2(4), sect. 231.2(5), sect. 231.2(6) [para. 18].

Authors and Works Noticed:

Wigmore, John Henry, Evidence in Trials at Common Law (1961), vol. 8, generally [para. 6].

Counsel:

Bonnie F. Moon and Margaret McCabe, agents for John H. Sims, Q.C. (Deputy Attorney General of Canada, Department of Justice Canada), for the applicant;

R.H. Davidson, Q.C. (Davidson Gregory Danyluik), for the respondents.

Graesser, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, heard this application on February 7, 2007, and delivered the following reasons for judgment on February 22, 2007.