R. v. McKinlay Transport Ltd. and C.T. Transport Inc., (1990) 106 N.R. 385 (SCC)

• Judge: Lamer, Wilson, La Forest, L'Heureux-Dubé and Sopinka, JJ.
• Court: Supreme Court of Canada
• Case Date: Wednesday November 02, 1988
• Jurisdiction: Canada (Federal)
• Citations: (1990), 106 N.R. 385 (SCC);90 DTC 6243;10 WCB (2d) 16;[1990] 1 SCR 627;1990 CanLII 137 (SCC);72 OR (2d) 798;68 DLR (4th) 568;55 CCC (3d) 530;76 CR (3d) 283;106 NR 385;[1990] 2 CTC 103;JE 90-576;[1990] SCJ No 25 (QL);[1990] ACS no 25;39 OAC 385;44 DTC 6243;47 CRR 151

R. v. McKinlay Transport Ltd. (1990), 106 N.R. 385 (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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McKinlay Transport Limited and C.T. Transport Inc. (appellants) v. Her Majesty The Queen (respondent) and Attorney General for Ontario, Attorney General of Quebec and Attorney General for Alberta (intervenors)

(No. 20761)

Indexed As: R. v. McKinlay Transport Ltd. and C.T. Transport Inc.

Supreme Court of Canada

Lamer, Wilson, La Forest, L'Heureux-Dubé and Sopinka, JJ.

March 29, 1990.

Summary:

Two corporate taxpayers were being audited by Revenue Canada. Revenue Canada served the corporations with letters demanding the production of certain information and documents, pursuant to s. 231(3) of the Income Tax Act. The corporations refused to comply and were charged with breach of s. 238(2) of the Act because of their failure to comply with the demands. The corporations applied to quash the information on the ground that s. 231(3), coupled with s. 238(2), violated s. 8 of the Charter.

The Ontario Provincial Court, in a decision reported [1986] 1 C.T.C. 29; 85 D.T.C. 5537; 22 C.R.R. 219, held that the unrestricted right to demand, coupled with a penalty for failure to comply, constituted a seizure within the meaning of s. 8 of the Charter, the form of which was unreasonable. The court allowed the application. The Crown appealed.

The Ontario High Court, in a decision reported [1988] 1 C.T.C. 421; 58 O.R.(2d) 310; 37 D.L.R.(4th) 454; 32 C.C.C.(2d) 1; 87 D.T.C. 5051; 27 C.R.R. 109, allowed the appeal and held that s. 231(3) did not authorize a seizure. However, if there had been a seizure, it would not have been reasonable. The corporations appealed.

The Ontario Court of Appeal, in a decision reported [1988] 1 C.T.C. 426; 26 O.A.C. 352; 62 O.R.(2d) 757; 48 D.L.R.(4th) 765; 40 C.C.C.(3d) 94; 87 D.T.C. 6314, dismissed the appeal. Like the High Court, the Court of Appeal held that the fact that an individual could attack or challenge the demand to produce meant that there was no seizure. The requirement to produce did not constitute a search or a seizure. The corporations appealed.

The Supreme Court of Canada dismissed the appeal. Wilson, J. (Lamer, J., concurring), held that the application of s. 231(3) of the Income Tax Act constituted a seizure which was reasonable and did not violate s. 8 of the Charter. La Forest and L'Heureux-Dubé, JJ., agreed with the disposition of the appeal as per the reasons of Wilson, J., subject to their reasons as given in the case of Thomson Newspapers Ltd. v. Director of Investigation and Research, Combines Investigation Act et al. (1990), 106 N.R. 161. Sopinka, J., held that neither the letters of demand nor s. 231(3) of the Act violated s. 8 of the Charter. He held that the letters of demand did not constitute a seizure nor did s. 231(3) authorize a seizure within the meaning of s. 8. Sopinka, J., however, also agreed with Wilson, J.'s, disposition of the appeal.

See also the previous case in this volume and 108 N.R. 161.

Civil Rights - Topic 1508

Property - Expectation of privacy - [See Civil Rights - Topic 1644].

Civil Rights - Topic 1508

Property - Expectation of privacy - [See third Civil Rights - Topic 1646].

Civil Rights - Topic 1644

Property - Search and seizure - Seizure defined - Section 231(3) of the Income Tax Act authorized a demand for production of information and documents from a taxpayer - Wilson, J. (Lamer, J., concurring), of the Supreme Court of Canada held that the application of s. 231(3) constituted a "seizure", because it infringed on the subject individual's reasonable expectation of privacy - Sopinka, J., held that neither letters of demand nor s. 231(3) authorized or constituted a seizure within the meaning of s. 8 - The entire court, however, agreed with Wilson, J.'s, disposition of the appeal - See paragraphs 20 to 22, 39 to 41.

Civil Rights - Topic 1646

Property - Search and seizure - Unreasonable search and seizure defined - Section 231(3) of the Income Tax Act authorized a demand for production of certain information and documents from a taxpayer - Wilson, J. (Lamer, J., concurring), of the Supreme Court of Canada held that the seizure contemplated by s. 231(3) was reasonable and did not violate s. 8 of the Charter, since it provided the least intrusive means of enforcing the Act - Sopinka, J., agreed that neither the letters of demand nor s. 231(3) violated s. 8 - Sopinka, La Forest and L'Heureux-Dubé, JJ., all agreed with Wilson, J.'s, disposition of this case - See paragraphs 23 to 35, 37 to 41.

Civil Rights - Topic 1646

Property - Search and seizure - Unreasonable search and seizure defined - Wilson, J. (Lamer, J., concurring), of the Supreme Court of Canada drew a distinction between seizures in the criminal or quasi-criminal context (to which the criteria in Southam Inc. v. Hunter respecting whether a search was reasonable applied) and seizures in the administrative or regulatory context, to which a lesser standard may apply depending upon the legislative scheme under review - Wilson, J., further stated that the Southam Inc. v. Hunter criteria were ill-suited to determine whether a seizure under s. 231(3) of the Income Tax Act was reasonable - See paragraphs 31, 33.

Civil Rights - Topic 1646

Property - Search and seizure - Unreasonable search and seizure defined - Wilson, J. (Lamer, J., concurring), of the Supreme Court of Canada stated that since individuals have different expectations of privacy in different contexts and with regard to different kinds of information and documents, the standard of review of what is "reasonable" in a given context must be flexible if it is to be realistic and meaningful - See paragraph 27.

Civil Rights - Topic 8301.2

Charter - Categorization of legislation for Charter analysis - [See second Civil Rights - Topic 1646].

Civil Rights - Topic 8461

Charter - Interpretation - General - Wilson, J. (Lamer, J., concurring), of the Supreme Court of Canada stated that flexibility is the key to interpreting any constitutional document, including the Charter - It would be wrong for the courts to apply a rigid approach to a particular section of the Charter since that provision must be capable of application in a vast variety of legislative schemes - See paragraph 26.

Civil Rights - Topic 8462

Charter - Interpretation - Purposive test - Wilson, J. (Lamer, J., concurring), of the Supreme Court of Canada referred to the need to take a flexible and purposive approach to s. 8 of the Charter - See paragraph 31.

Income Tax - Topic 9255

Enforcement - Production of information - Demand of information - General - [See Civil Rights - Topic 1644].

Income Tax - Topic 9255

Enforcement - Production of information - Demand of information - General - [See first Civil Rights - Topic 1646].

Income Tax - Topic 9305

Enforcement - Search and seizure - Seizure of documents - General - [See Civil Rights - Topic 1644].

Income Tax - Topic 9307

Enforcement - Search and seizure - Seizure of documents - Whether reasonable - [See first Civil Rights - Topic 1646].

Cases Noticed:

Southam Inc. v. Hunter, [1984] 2 S.C.R. 145; 55 N.R. 241; 55 A.R. 291; 9 C.R.R. 255; 14 C.C.C.(3d) 97; 41 C.R.(3d) 97; [1984] 6 W.W.R. 577; 33 Alta. L.R.(2d) 193; 27 B.L.R. 297; 84 D.T.C. 6467; 2 C.P.R.(3d) 1; 11 D.L.R.(4th) 641, refd to. [para. 7].

R. v. Therens, [1985] 1 S.C.R. 613; 59 N.R. 122; 40 Sask. R. 122; 18 C.C.C.(3d) 481; 45 C.R.(3d) 97; 18 D.L.R.(4th) 655; [1984] 4 W.W.R. 286; 32 M.V.R. 153, refd to. [para. 7].

Thomson Newspapers Ltd. v. Director of Investigation and Research, Combines Investigation Act et al. (1986), 17 O.A.C. 330; 57 O.R.(2d) 257, refd to. [para. 9].

James Richardson & Sons Ltd. v. Minister of National Revenue, [1984] 1 S.C.R. 614; 54 N.R. 241, refd to. [para. 10].

Canadian Bank of Commerce v. Attorney General of Canada, [1962] S.C.R. 729, refd to. [para. 16].

Thomson Newspapers Ltd. v. Director of Investigation and Research, Combines Investigation Act et al. (1990), 106 N.R. 161, appld. [para. 20].

Minister of National Revenue v. Grimwood, [1987] 2 S.C.R. 755; 81 N.R. 153, refd to. [para. 20].

R. v. Simmons, [1988] 2 S.C.R. 495; 89 N.R. 1, refd to. [para. 22].

R. v. Hufsky, [1988] 1 S.C.R. 621; 84 N.R. 365; 27 O.A.C. 103, refd to. [para. 22].

Alberta Human Rights Commission and Alberta Blue Cross Plan, Re (1983), 48 A.R. 192; 1 D.L.R.(4th) 301 (C.A.), consd. [para. 28].

Reich v. College of Physicians and Surgeons of Alberta (No. 2) (1984), 53 A.R. 325; 8 D.L.R.(4th) 696 (Q.B.), consd. [para. 28].

Belgoma Transportation Ltd. v. Director of Employment Standards (Ont.) (1985), 10 O.A.C. 11; 51 O.R.(2d) 509 (C.A.), consd. [para. 29].

R. v. Bichel, [1986] 5 W.W.R. 261 (B.C.C.A.), consd. [para. 30].

Stelco Inc. et al. v. Canada (Attorney General) (1990), 108 N.R. 161, refd to. [para. 39].

Statutes Noticed:

Canadian Charter of Rights and Freedoms, 1982, sect. 1 [paras. 17-18, 36]; sect. 8 [paras. 1, 5-8, 14, 17-22, 31, 36, 40].

Income Tax Act, R.S.C. 1952, c. 148, sect. 231(3) [paras. 1, 4-5, 7-8, 10-11, 14-15, 17, 20-22, 31, 33, 35-37, 40]; sect. 238(2) [paras. 4-5, 17, 20]; sect. 241 [para. 35].

Income Tax Act Regulations, C.R.C. 1978, c. 945, Part II, sect. 221(1)(d) [para. 15].

Authors and Works Noticed:

Brooks, Neil and Judy Fudge, Search and Seizure under the Income Tax Act, Law Reform Commission of Canada (1985) [para. 15].

Reid, Alan D., and Alison Harvison Young, Administrative Search and Seizure under the Charter (1985), 10 Queen's L.J. 392, pp. 398-400 [para. 27].

Counsel:

Alan Shanoff and Ted Saskin, for the appellants;

S.R. Fainstein, Q.C., and James W. Leising, for the respondent;

Leah Price and Timothy MacKlem, for the intervenor, Attorney General for Ontario;

Jean Bouchard and Gilles Laporte, for the intervenor, Attorney General of Quebec;

Robert C. Maybank, for the intervenor, Attorney General for Alberta.

Solicitors of Record:

Goodman & Goodman, Toronto, Ontario, for the appellants;

John C. Tait, Ottawa, Ontario, for the respondent;

Richard F. Chaloner, Toronto, Ontario, for the intervenor, Attorney General for Ontario;

Jean Bouchard and Gilles Laporte, Sainte-Foy, Quebec, for the intervenor, Attorney General of Quebec;

Department of the Attorney General, Edmonton, Alberta, for the intervenor, Attorney General for Alberta.

This appeal was heard before Lamer, Wilson, La Forest, L'Heureux-Dubé and Sopinka, JJ., of the Supreme Court of Canada, on November 2, 1988. The decision of the Supreme Court was delivered on March 29, 1990, in both official languages, when the following opinions were filed:

Wilson, J. (Lamer, J., concurring) -  see paragraphs 1 to 36;

La Forest, J. - see paragraph 37;

L'Heureux-Dubé, J. - see paragraph 38;

Sopinka, J. - see paragraphs 39 to 41.