Bouck, J.:—When the principle of an independent judiciary clashes with the principle of the supremacy of parliament, which branch of government must stand aside in favour of the other?
Here, the Department of National Revenue relies upon subsections 231.3(6) and (7) of the Income Tax Act, R.S.C. 1952, c. 148 (am 1970-71-72, c. 63). Upon the application of the Department, those sections compel a judge to make an order in favour of the Department whether the application has merit or not.
At issue, is whether or not the legislation infringes on the independence of the judiciary by denying a judge the right to decide the motion on its merits?
Facts
The facts are not complicated. Frank Hertel and Specific Flow Research Ltd. allegedly committed offences against the Income Tax Act. On September 2, 1986, my colleague Paris, J. signed a warrant to search pursuant to section 231.3 of the statute. Acting on the authority of that warrant, officials of the Department of National Revenue executed the Warrant at the premises of Frank Hertel, 3195 Humber Road, Oak Bay, B.C. They seized various documents which they retained in their possession.
In accordance with subsection 23.1.3(5) of the legislation, they prepared a report with respect to the items seized. An application was then made to me on September 12, 1986 for an order under subsection 231.3(6) that the documents or things seized be retained by the Minister of National Revenue until the conclusion of the investigation.
At that time, I adjourned the matter and directed that the Department serve the corporate accused with notice of the hearing. I was told that Mr. Hertel had left Canada and was now somewhere in South America so no order was made directing service upon him. At the same time, I asked the Department to appoint a lawyer to act on behalf of the accused should they fail to appear. Because the point involved a constitutional issue, a direction was made that notice be given pursuant to the Constitutional Question Act, R.S.B.C. 1979, c. 63.
Upon the matter returning for disposition on October 28, 1986, no one appeared for the accused and the Department declined to appoint counsel for the purpose of arguing any objection they might have had. Nonetheless, I am grateful to Ms. Chaperon for her diligent research and her well reasoned written brief.
law
(a) Introduction
To get a more complete understanding of the principles involved, I propose to review the law in the following way:
(i) An analysis of the legislation.
(ii) A review of the doctrine of the separation of powers.
(iii) A summary of Canadian and American case law on the subject.
(iv) Findings.
(i) Analysis of the Legislation
It is helpful to recite the complete section of the Act:
231.3(1) Search warrant. — A judge may, on ex parte application by the Minister, issue a warrant in writing authorizing any person named therein to enter and search any building, receptacle or place for any document or thing that may afford evidence as to the commission of an offence under this Act and to seize and, as soon as practicable, bring the document or thing before, or make a report in respect thereof to, the judge or, where the judge is unable to act, another judge of the same court to be dealt with by the judge in accordance with this section.
(2) Evidence in support of application. — An application under subsection (1) shall be supported by information on oath establishing the facts on which the application is based.
(3) Evidence. — A judge shall issue the warrant referred to in subsection (1) where he is satisfied that there are reasonable grounds to believe that
(a) an offence under this Act has been committed;
(b) a document or thing that may afford evidence of the commission of the offence is likely to be found; and
(c) the building, receptacle or place specified in the application is likely to contain such a document or thing.
(4) Contents of warrant. — A warrant issued under subsection (1) shall refer to the offence for which it is issued, identify the building, receptacle or place to be searched and the person alleged to have committed the offence and it shall be reasonably specific as to any document or thing to be searched for and seized.
(5) Seizure of document. — Any person who executes a warrant under subsection 1 may seize, in addition to the document or thing referred to in subsection (1), any other document or thing that he believes on reasonable grounds affords evidence of the commission of an offence under this Act and shall as soon as practicable bring the document or thing before, or make a report in respect thereof to, the judge who issued the warrant or, where the judge is unable to act, another judge of the same court to be dealt with by the judge in accordance with this section.
(6) Retention of things seized. — Subject to subsection (7), where any document or thing seized under subsection (1) or (5) is brought before a judge or a report in respect thereof is made to a judge, the judge shall, unless the Minister waives retention, order that it be retained by the Minister, who shall take reasonable care to ensure that it is preserved until the conclusion of any investigation into the offence in relation to which the document or thing was seized or until it is required to be produced for the purposes of a criminal proceeding.
(7) Return of things seized. — Where any document or thing seized under subsection (1) or (5) is brought before a judge or a report in respect thereof is made to a judge, the judge may, of his own motion or on summary application by a person with an interest in the document or thing on three clear days notice of application to the Deputy Attorney General of Canada, order the document or thing be returned to the person from whom it was seized or the person who is otherwise legally entitled thereto if the judge is satisfied that the document or thing
(a) will not be required for an investigation or a criminal proceeding; or
(b) was not seized in accordance with the warrant or this section.
(8) Access and copies. — The person from whom any document or thing is seized pursuant to this section is entitled, at all reasonable times and subject to such reasonable conditions as may be imposed by the Minister, to inspect the document or thing and to obtain one copy of the document at the expense of the Minister.
The subsections in question are 231.3(5), (6) and (7). They seem to contemplate the following procedure:
(a) a document or thing seized pursuant to a warrant, or a report in respect to the seizure, must be brought before a judge as soon as practicable after the seizure; such an application can be made ex parte;
(b) when that happens then, unless the Minister waives the right to retention, the judge shall order that the documents or things brought before the court or mentioned in the report be retained by the Minister;
(c) thereafter, on notice to the Deputy Attorney General of Canada, a judge on his own motion may order the documents or things seized be returned to the person entitled;
(d) alternatively, on notice to the Deputy Attorney General of Canada, a person with an interest in the document or things seized may ask a judge to order the documents or things seized be returned.
Step (a) in the process is complete. the Minister has not waived the right to retention. I am now asked to make an order that the documents or things seized be retained by the Minister. On its plain reading the statute gives me no discretion. In effect, parliament says I must give a judicial stamp of approval to the actions of the Minister whether they are appropriate or not. While there is no evidence before me that anything is amiss in any way, even if there was, the Act appears to say it must be ignored. Parliament compels a judge to grant the order on the application of the Minister regardless of the circumstances. Is this in keeping with constitutional principle?
(ii) Doctrine of the Separation of Powers
Holdsworth on A History of English Law, Vol. 10 page 715 recognized the existence of three branches of government within the unwritten principles of English Constitutional Law. They are, an elected Parliament, an executive and an independent judiciary. He puts it in these words:
All through the eighteenth century, the fact that the powers of the state were divided between separate organs of government, which checked and balanced one another, was regarded by men of all parties, by peers as well as by commoners, and by statesmen as well as by publicists, as its most salient characteristic.
That this characteristic was the main guarantee for the preservation of a balanced constitution was the view of Paley. He said that the constitution was preserved, first by a balance of power—that is “that there is no power possessed by one part of the Legislature, the abuse or excess of which is not checked by some antagonistic power, residing in another part”; and secondly by a balance of interest— that is “that the respective interests of the three estates of the empire are so disposed and adjusted, that whichever of the three shall attempt any encroachment, the other two will unite in resisting it.”
As to the authority of the courts, Holdsworth agrees with Blackstone:
Blackstone, summing up the results of the authorities, with that mixture of literary deftness and accuracy which he shows in his treatment of very many branches of law, described in classical form this characteristic of the constitution. He regarded the independent position of the courts as the most essential safeguard of constitutional liberty:
In this distinct and separate existence of the judicial power in a peculiar body of men, nominated indeed, but not removable at pleasure, by the crown, consists our main preservation of the public liberty; which cannot subsist long in any state, unless the administration of common justice be in some degree separated from both the legislative and also from the executive power.
But as the learned author later states, England is not the best example of the separation of powers. There was and still is a mixing of many functions. For example, the House of Lords possesses both legislative and judicial authority. The Lord Chancellor is a judge, a member of the House of Lords and a cabinet minister. Of course, none of these conventions exist in Canada. Neither the House of Commons nor the Senate have a judicial function in the same way as the House of Lords. No judge in Canada occupies a seat in either House of Parliament, nor is one a cabinet minister.
In a unified country such as the United Kingdom, Parliament has the power “to make or unmake any law whatever": Dicey, The Law of the Constitution (10th) Ed. 1965, p. 39. But in a federal state such as Canada, legislative powers are divided between the Federal Government and the Provinces according to a written constitution. Where there is doubt as to whether Ottawa or the provinces can legislate on any particular matter, the courts must decide the issue. In that sense no Canadian legislature is supreme in the same way as is the case in the United Kingdom. Similarly, Canadian judges are accustomed to being the ultimate interpreters of many aspects of the Canadian Constitution, whereas in England, judges do not play the same role. There, it is performed by the United Kingdom Parliament.
United Kingdom constitutional principles are relevant in Canada because of the preamble to the Constitution Act 1867. It purports to establish a system of government using the United Kingdom as a model for Canada. The preamble reads in part:
Whereas the Provinces of Canada, Nova Scotia and New Brunswick have expressed their desire to be a federally united into one Dominion under the Crown of the United Kingdom of Great Britain and Ireland, with a constitution similar in principle to that of the United Kingdom. . . .
I attempted to find English cases dealing with similar issues to those raised in these proceedings. None came to light. This may be the result of an unconscious recognition in Parliament not to restrict the right of the judiciary in its role as an adjudicator. It may also be reinforced by the presence of judges in cabinet and in the House of Lords. They may head off any legislation framed in words similar to those found in section 231.3 of the Income Tax Act.
(iii) Canadian and American Case Law
Several Canadian courts have struck down legislation that interferes with the independence of the judiciary and several have declined. Here is a brief summary of the leading authorities I could locate.
Canada—Legislation struck down
(a) Rex v. Hess, [1949] 1 W.W.R. 586 (B.C.C.A.).
Section 1025A of the Criminal Code denied bail to a person who was acquitted. The section was held to be outside the competence of parliament to enact since it interfered with the independence of the judiciary.
(b) Greater Victoria School District #61 v. Goudie (1984), 59 B.C.L.R. 176 (Tyrwhitt-Drake, C.C.J.).
Section 95 of the School Act, R.S.B.C. 1979, c. 35 ordered a court to “dismiss an action” if it appeared in an action against a school board that the Board acted under the authority of the School Act. The section was struck down because it infringed upon purely judicial authority.
Canada—Legislation upheld
(a) Re: Joseph Jacob Holdings Ltd. v. City of Prince George (1980), 118 D.L.R. (3d) 243 (Hinds J., B.S.S.C.).
On a appeal from the decision of the commissioner, subsection 908(5) of the Municipal Act, R.S.B.C. 1979, c. 290 ordered a judge of the Supreme Court to give judgment within six weeks from the time of giving a notice of appeal, otherwise the decision of the commissioner stood. The section was held not to interfere with the independence of the judiciary.
(b) R. v. Shand (1976), 35 C.R.N.S. 202; 30 C.C.C. (2d) 23 (Ont. C.A.).
Under the Narcotic Control Act, R.S.C. 1970, c. N-1, Parliament established a minimum sentence of seven years for importing restricted drugs. This was upheld as not being contrary to the Canadian Bill of Rights, R.S.C. 1970 Appendix III s. 2(b) as cruel and unusual punishment.
(c) Gagnon and Vallieres v. The Queen (1971), 14 C.R.N.S. 321 (Que. C.A.).
This dispute arose out of the F.L.Q. crisis in October 1970. The Parliament of Canada enacted the Public Order (Temporary Measures) Act which revoked the proclamation of certain sections of the War Measures Act, R.S.C. 1952, c. 288. A habeas corpus application was brought by the appellants. One of the grounds of their petition was that the statute usurped the powers of the judiciary. The court found that in its essence the legislation did not interfere with the independence of the judiciary.
(d) Re Attorney General of Canada and International Association of
Longshoremen Local 375 et al. (1975), 84 D.L.R. (3d) 150 (Que. S.C.).
Section 16 of the St. Lawrence Ports Operations Act, 1975, 1974-75-76 (Can.) c. 39 compelled a court to make an order upon the application of the Crown. It was held that this section did not infringe upon the independence of the judiciary since the Crown had to prove a number of conditions before the order could be made. Thus, a residual discretion vested in the court as to whether the requirements for obtaining the order were proved.
American Case Law
Three courts which discussed this subject in the United States declared similar legislation unconstitutional since it infringed upon the independence of the judiciary. They are:
(a) Broadway v. State, 60 S. 2d 701 (Supreme Crt. Alabama 1952).
An Alabama statute provided that a new trial must be granted if the solicitor or other prosecuting attorney made any comment concerning the defendant's failure to testify. This was held to be unconstitutional since It was an infringement by the legislature upon judicial power which restricted the court's right to exercise its discretion as to whether a new trial should in fact be ordered in these circumstances.
(b) Colorado v. Leahy, 484 P. 2d 778 (Supreme Crt. Colorado 1970).
Colorado legislation stated that after filing a certain type of affidavit a judge “shall issue a warrant" for seizure of property. The section was declared unconstitutional since it deprived the court of a discretion as to whether the warrant should be issued or not.
(c) City of Birmingham v. 48th District Court Judge, 255 N.W. 2d 760 (Mich Ct. App. 1977).
A Michigan statute or ordinance stated that certain facts described in a complaint “shall be accepted by the court as establishing probable cause for the issuance of a warrant" of arrest. In holding the legislation unconstitutional the Court said that it was an impermissible intrusion upon the judicial function since it completely removed from the judiciary the power to refuse the issuance of a warrant in certain cases.
(iv) Findings
In this province, I am naturally bound by the decisions of our Court of Appeal except where they are reversed or modified by the Supreme Court of Canada. Therefore, R. v. Hess, supra, establishes the guiding principles I must follow. While the decision of my colleague Hinds, J. in Re Joseph Jacobs Holdings v. City of Prince George, supra, is persuasive on the other side of the coin, it seems that R. v. Hess was not referred to him for his consideration at the time of his ruling.
A good deal of mischief can occur, which brings the administration of justice into disrepute, where Parliament passes laws of this nature. Here are some other examples:
(a) Criminal Code, s. 98—Order Prohibiting Possession of Firearms, etc.
Under section 98 of the Criminal Code, where a person is convicted of an indictable offence involving violence against another, and for which he may be sentenced to imprisonment for ten years or more, the statute says a judge shall in addition to any other punishment order the restricted person from possessing firearms or explosives for a number of years.
This section covered the old crime of rape which attracted a maximum sentence of life imprisonment. Judges were supposed to restrict an accused from possessing explosives or firearms for persons convicted of rape. Because it seemed illogical the section was frequently ignored. Today a person convicted of criminal negligence causing death in the operation of a motor vehicle is exposed to the provisions of section 98. Again, section 98 appears unconnected to such a charge. Why should a person who has committed a crime not related in any way to the use of firearms or explosives be denied the right to possess them?
Besides that criticism, nothing happens if the penalty under section 98 is not imposed at the time of the conviction. Frequently Crown Counsel forget to ask for an order of this nature and it often slips the mind of the trial judge. The section would be more effective if it came into operation automatically in certain circumstances or if it were made permissive on the application of the Crown.
(b) Criminal Code, section 670 — Recommendation by a Jury
According to section 670 of the Criminal Code, a judge “shall" put to the jury a request for its recommendations as to sentence following a verdict of guilty of second degree murder. In that statutory recommendation the judge must tell the jury that the law requires the accused to serve ten years in prison before he is eligible to be considered for release on parole. The judge then asks the jury if it wishes to recommend a period of more than ten years but not more than 25 which the accused should serve before he is eligible to be considered for release on parole. The recommendation is not binding on the sentencing judge.
The main trouble with this direction is that under subsection 674(2) of the Criminal Code, a person convicted of second degree murder, who is sentenced to life imprisonment without eligibility for parole for ten years, can in fact be eligible for day parole after serving seven years. Contrary to popular belief day parole does not necessarily mean a prisoner leaves the prison every morning and returns every night. Day parole is defined under the Parole Act, R.S.C. 1970, c. P-2, s. 2 as follows:
“day parole” means parole the terms and conditions of which require the inmate to whom it is granted to return to prison from time to time during the duration of such parole or to return to prison after a specified period;
What this means in practice is uncertain but it can literally mean release after seven years and return at the end of ten years at which time full parole automatically commences.
Consequently, the section demands a judge give the jury an instruction that is not altogether true. Jurors may in fact see the prisoner on the streets of the city where they live some seven years after his conviction. Remembering what they were told by the court at the time of sentencing it might cause them to wonder about the credibility of the courts and the enforcement of the criminal law.
These are a few instances where the mandatory direction of Parliament is unsatisfactory. Not only does it lower the esteem which the public should have for the judicial process but it also interferes with the independence of the judiciary.
What then should be said about subsections 231.3(6) and (7) of the Income Tax Act? There is an argument that the section is not objectionable because it allows the judge on his own motion to set aside any order once made. That again just seems to make the point. Common law judges are not investigating magistrates. They are appointed to hear applications brought by litigants and to resolve their disputes. It is a complete misconception of the common law judicial process to think that a judge comes to work each day looking for income tax files to examine so that he may set aside orders he previously made. Hence, these provisions of the Income Tax Act are tainted with Parliament’s misunderstanding of how a judge functions in a common law environment. This reinforces the idea that section 231.3 was not properly considered at the time of its enactment.
Despite the inadequacies of the section, it seems to me there is still a middle road that can be followed. That path was found by Osler, J. in R. v. Zaharia and Church of Scientology of Toronto (1985), 21 C.C.C. (3d) 118. He was examining subsection 446(1) of the Criminal Code. It contains similar provision to those found in the Income Tax Act, where it states a justice "shall" order that things seized under a search warrant be detained. The section reads:
446. (1) Subject to this or any other Act of Parliament, where, pursuant to paragraph 445.1(1)(b) or subsection 445.2(2), anything that has been seized is brought before a justice or a report in respect of anything seized is made to a justice, he shall,
(a) where the lawful owner or person who is lawfully entitled to possession of the thing seized is known, order it to be returned to him, unless the prosecutor satisfies the justice that the detention of the thing seized is required for the purposes of any investigation or a preliminary inquiry, trial or other proceeding; or
(b) where the prosecutor satisfies the justice that the thing seized should be detained for a reason set out in paragraph (a), detain the thing seized or order that it be detained, taking reasonable care to ensure that it is preserved until the conclusion of any investigation or until it is required to be produced for the purposes of a preliminary inquiry, trial or other proceeding.
[Emphasis mine.]
It is clear the Criminal Code leaves a discretion with the justice which is not given to a judge under section 236 of the Income Tax Act. For example, under paragraph 446(1)(a) of the Criminal Code, the justice may order the things returned to the person from whom they were seized unless the prosecution satisfies the justice that the detention of the things seized is required for the purpose of any investigation or a preliminary enquiry, trial or other proceeding. No such discretion is given a judge under the Income Tax Act.
When analyzing subsection 446(1) of the Criminal Code, Osler, J. said at 125:
Similarly, it was submitted that the use of the word “shall” in s. 446(1) was an unwarranted fettering of the discretion of the officer who is to act judicially. In my view, the word should be construed as permissive rather than mandatory, and the section can stand.
In a like way, I propose to hold that Parliament really meant to say “may” instead of “shall” in subsection 231.3(6) of the Income Tax Act. Such an interpretation leaves a discretion in the court as to whether items seized can be retained by the Income Tax Department when it applies for an order under subsection 231.3(6).
Judgment
Given the circumstances before me, I can see no reason to refuse the application and the order is accordingly made.
Application granted.