Thompson v. MNR, (2013) 448 N.R. 339 (FCA)

• Judge: Pelletier, Trudel and Mainville, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: June 12, 2013
• Jurisdiction: Canada (Federal)
• Citations: (2013), 448 N.R. 339 (FCA);2013 FCA 197

Thompson v. MNR (2013), 448 N.R. 339 (FCA)

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[French language version follows English language version]

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Temp. Cite: [2013] N.R. TBEd. SE.003

Duncan Thompson (appellant) v. The Minister of National Revenue (respondent)

(A-515-12; 2013 FCA 197; 2013 CAF 197)

Indexed As: Thompson v. Minister of National Revenue

Federal Court of Appeal

Pelletier, Trudel and Mainville, JJ.A.

August 29, 2013.

Summary:

A lawyer (Thompson) subject to enforcement proceedings under the Income Tax Act asserted solicitor-client privilege to protect basic information regarding his accounts receivable, arguing that his clients' names and amounts owing were protected and out of the Minister of National Revenue's reach. The Minister applied for a compliance order under s. 231.7(1) of the Act.

The Federal Court, per Russell, J., found that Thompson had not complied with the Requirement for Information provided to him by the Minister under s. 231.2(1) of the Act. The court allowed the application. Thompson appealed.

The Federal Court of Appeal allowed the appeal in part. Although the court generally agreed with the legal statements made by Russell, J., in his speaking order, Thompson's objections called for an intervention by the Federal Court to ensure that the question of privilege over individual client names was addressed before the release of the clients' accounts receivable information was ordered. The court ordered no costs.

Barristers and Solicitors - Topic 1626

Relationship with client - Duty of confidentiality (or professional secrecy) - Disclosure to governments - At issue on this appeal was the solicitor-client privilege asserted by a lawyer (Thompson) who was subject to enforcement proceedings under the Income Tax Act - Thompson had raised the shield of solicitor-client privilege to protect basic information regarding his accounts receivable, arguing that his clients' names and amounts owing were protected and out of the Minister of National Revenue's reach - The Federal Court of Appeal discussed the difference between the lawyer's duty of confidentiality and "solicitor-client privilege" - The court held that the definition of solicitor-client privilege in s. 232(1) of the Act was in line with the Supreme Court of Canada's teachings on the law of solicitor-client privilege - See paragraphs 34 to 48.

Civil Rights - Topic 1646

Property - Search and seizure - Unreasonable search and seizure defined - [See Income Tax - Topic 9275 ].

Constitutional Law - Topic 9954

Practice - Notice to Crown and interested parties of attack on validity of statute - At issue on this appeal was the solicitor-client privilege asserted by a lawyer (Thompson) who was subject to enforcement proceedings under the Income Tax Act - Thompson had raised the shield of solicitor-client privilege to protect basic information regarding his accounts receivable, arguing that his clients' names and amounts owing were protected and out of the Minister of National Revenue's reach - On appeal, Thompson also filed the following Notice of Constitutional Question pursuant to s. 57 of the Federal Courts Act: "Can Section 231.2(1) of the Income Tax Act be interpreted, applied or enforced so as to require a Barrister and Solicitor who, himself, is the subject of the proceedings or inquiry by the Applicant (and not his clients), to divulge information about unnamed clients, which information is protected by the principles of solicitor-client privilege, found in the Legal Professions Act, R.S.A. 2000 c. L-8, the Rules of the Law Society of Alberta and the Law Society of Alberta Code of Conduct, and in the common law applicable to the Province of Alberta thereby causing that Barrister and Solicitor to violate his Code of Conduct, breach those Rules and contravene the Act, rendering him liable for serious penal and civil consequences?" - The Federal Court of Appeal stated that "The need for a notice of constitutional question is linked to the remedy sought by a party ... Section 57 of the Federal Courts Act states that the constitutional validity, applicability, or operability of an Act of Parliament shall not be judged unless notice has been served. Neither in his Notice of Appeal nor in the Order Sought section of his memorandum of fact and law does the appellant seek a finding that the provisions of the Act under which the Minister acted in this case are invalid, inapplicable or inoperable as required by section 57. As a result, it is not necessary to address the question raised in the notice of constitutional question." - See paragraphs 10 and 67.

Income Tax - Topic 9275

Enforcement - Production of documents - Demand to lawyer - At issue on this appeal was the solicitor-client privilege asserted by a lawyer (Thompson) who was subject to enforcement proceedings under the Income Tax Act - Thompson had raised the shield of solicitor-client privilege to protect basic information regarding his accounts receivable, arguing that his clients' names and amounts owing were protected and out of the Minister of National Revenue's reach - Thompson asserted that the Minister's attempted interference with clients' guaranteed rights in relation to solicitor-client privilege violated s. 8 of the Charter and was not saved by s. 1 - The Federal Court of Appeal held that as Thompson had failed to establish that the application judge erred in finding that a class privilege did not attach to the accounting records and client names requested by the Minister, there was no interference with any rights in relation to privilege, and this argument could not succeed - See paragraphs 62 to 66.

Income Tax - Topic 9281

Enforcement - Lawyer-client privilege from disclosure - General - At issue on this appeal was the solicitor-client privilege asserted by a lawyer (Thompson) who was subject to enforcement proceedings under the Income Tax Act - Thompson had raised the shield of solicitor-client privilege to protect basic information regarding his accounts receivable, arguing that his clients' names and amounts owing were protected and out of the Minister of National Revenue's reach - The Federal Court of Appeal held that the application judge did not err in finding that the information requested by the Minister, information relating to Thompson's business accounts receivable, including the names and amounts owed by Thompson's clients, consisted of accounting records and was not subject to solicitor-client privilege - What Thompson was asked to provide was no more than the information he would need to include in a statement of claim to disclose a cause of action to recover his fees from an uncooperative client - The Law Society of Alberta's Code of Conduct provided for circumstances where this type of information might be disclosed (rule 2.03(5)) - See paragraphs 54 to 61.

Income Tax - Topic 9281

Enforcement - Lawyer-client privilege from disclosure - General - At issue on this appeal was the solicitor-client privilege asserted by a lawyer (Thompson) who was subject to enforcement proceedings under the Income Tax Act - Thompson had raised the shield of solicitor-client privilege to protect basic information regarding his accounts receivable, arguing that his clients' names and amounts owing were protected and out of the Minister of National Revenue's reach - The Federal Court of Appeal allowed the appeal in part - Although the court generally agreed with the legal statements made by the application judge in his speaking order, Thompson's objections called for an intervention by the Federal Court to ensure that the question of privilege over individual client names was addressed before the release of the clients' accounts receivable information was ordered - See paragraphs and 68 to 72.

Income Tax - Topic 9363

Enforcement - Evidence and proof - Burden of proof - At issue on this appeal was the solicitor-client privilege asserted by a lawyer (Thompson) who was subject to enforcement proceedings under the Income Tax Act - Thompson had raised the shield of solicitor-client privilege to protect basic information regarding his accounts receivable, arguing that his clients' names and amounts owing were protected and out of the Minister of National Revenue's reach - The Federal Court of Appeal held that the party asserting privilege bore the evidentiary burden to establish the claim on a balance of probabilities - See paragraphs 49 to 53.

Cases Noticed:

Minister of National Revenue v. RBC Life Insurance Co. (2013), 443 N.R. 378; 2013 FCA 50, refd to. [para. 12].

Lavallee, Rackel & Heintz et al. v. Canada (Attorney General), [2002] 3 S.C.R. 209; 292 N.R. 296; 312 A.R. 201; 281 W.A.C. 201; 164 O.A.C. 280; 217 Nfld. & P.E.I.R. 183; 651 A.P.R. 183; 2002 SCC 61, refd to. [para. 23].

White, Ottenheimer & Baker v. Canada (Attorney General) - see Lavallee, Rackel & Heintz et al. v. Canada (Attorney General).

R. v. Fink - see Lavallee, Rackel & Heintz et al. v. Canada (Attorney General).

Canadian Western Bank et al. v. Alberta, [2007] 2 S.C.R. 3; 362 N.R. 111; 409 A.R. 207; 402 W.A.C. 207; 2007 SCC 22, refd to. [para. 25].

Law Society of British Columbia v. Mangat, [2001] 3 S.C.R. 113; 276 N.R. 339; 157 B.C.A.C. 161; 256 W.A.C. 161; 2001 SCC 67, refd to. [para. 25].

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. 26].

Blood Tribe Department of Health v. Privacy Commissioner (Can.) et al., [2008] 2 S.C.R. 574; 376 N.R. 327; 2008 SCC 44, refd to. [para. 29].

Baron et al. v. Minister of National Revenue et al., [1993] 1 S.C.R. 416; 146 N.R. 270, refd to. [para. 32].

R. v. National Post et al., [2010] 1 S.C.R. 477; 401 N.R. 104; 262 O.A.C. 1; 2010 SCC 16, refd to. [para. 34].

R. v. Cunningham - see Cunningham v. Lilles et al.

Cunningham v. Lilles et al., [2010] 1 S.C.R. 331; 399 N.R. 326; 283 B.C.A.C. 280; 480 W.A.C. 280; 2010 SCC 10, refd to. [para. 37].

Jones v. Smith, [1999] 1 S.C.R. 455; 236 N.R. 201; 120 B.C.A.C. 161; 196 W.A.C. 161, refd to. [para. 39].

Société d'énergie Foster Wheeler ltée v. Sociéte intermunicipale de gestion et d'élimination des déchets (SIGED) Inc., [2004] 1 S.C.R. 456; 318 N.R. 111; 2004 SCC 18, refd to. [para. 39].

Canada (Combines Investigation Act), Re - see Shell Canada Ltd., Re.

Shell Canada Ltd., Re, [1975] F.C. 184; 7 N.R. 157 (F.C.A.), refd to. [para. 40].

R. v. Budd W. et al., [2002] O.T.C. 893 (Sup. Ct.), refd to. [para. 42].

Thorson v. John Jones (1973), 38 D.L.R.(3d) 312 (B.C.S.C.), refd to. [para. 42].

Minister of National Revenue v. Jakabfy (2013), 435 F.T.R. 158; 2013 FC 706, refd to. [para. 46].

Minister of National Revenue v. Singh Lyn Ragonetti Bindal LLP, [2005] F.T.R. Uned. B10; 2005 FC 1538, refd to. [para. 46].

Minister of National Revenue v. Reddy, [2006] F.T.R. Uned. 165; 2006 FC 277, refd to. [para. 46].

Minister of National Revenue v. Currie, [2008] F.T.R. Uned. 178; 2008 FC 237, refd to. [para. 46].

Chambre des notaires du Québec c. Canada (Procureur general), 2010 J.Q. No. 8868; [2010] QCCS 4215, dist. [para. 64].

Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage) et al., [2004] 3 F.C.R. 436; 317 N.R. 258; 2004 FCA 66, refd to. [para. 67].

Statutes Noticed:

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 230(2.1) [para. 56]; sect. 231.2(1) [para. 4]; sect. 232(1) [para. 20].

Authors and Works Noticed:

Dodek, Adam, Solicitor-Client Privilege in Canada, Challenges for the 21st Century, Discussion Paper for the Canadian Bar Association (February 2011), generally [para. 34].

Law Society of Alberta, Code of Conduct, rule 2.03(1)(b) [para. 25]; rule 2.03, commentary [para. 43].

Manes, Ronald D., and Silver, Michael P., Solicitor-Client Privilege in Canadian Law (1993), p. 141 [para. 42].

Counsel:

Duncan Thompson appeared on his own behalf;

Margaret McCabe, for the respondent.

Solicitors of Record:

William F. Pentney, Deputy Attorney General of Canada, Ottawa, Ontario, for the respondent.

This appeal was heard at Calgary, Alberta, on June 12, 2013, by Pelletier, Trudel and Mainville, JJ.A., of the Federal Court of Appeal. Trudel, J.A., delivered the following reasons for judgment at Ottawa, Ontario, on August 29, 2013.