The Chief Justice (concurred in by MacKay and Kelly, DJJ) (judgment delivered from the Bench):—This is an interlocutory application made in the course of a section 28 application. It is expedient to outline the proceedings preceding the interlocutory application before attempting to indicate the substance of It.
section 232 of the Income Tax Act, chapter 63 of the Statutes of 1970-71-72* [1] provides, inter alia, a procedure for resolving a claim of solicitor-client privilege in respect of documents seized under that Act, which procedure is designed to protect the privilege in cases where the dispute is resolved in favour of it. That procedure may be summarized as follows:
(1) where a solicitor-client privilege is claimed in respect of a document about to be examined or seized while in possession of a lawyer, the document is to be sealed up and put in the custody of the appropriate sheriff or other custodian (subsection 232(3));
(2) the client or the lawyer may apply to a judge of a superior court in a manner prescribed by the statute for an order determining the validity of the claim (subsection 232(4));
(3) after a hearing in camera, during which “if he considers it necessary to determine the question’’ he may inspect the document (and, if he does so, must ensure that it is “resealed’’), the judge is to decide the matter “summarily”, and
(a) within 14 days from the day the document was so placed in custody, apply, upon 3 days’ notice of motion to the Deputy Attorney General of Canada, to a Judge for an order
(i) fixing a day (not later than 21 days after the date of the order) and place for the determination of the question whether the client has a solicitor-client privilege in respect of the document, and
(ii) requiring the custodian to produce the document to the judge at that time and place:
(b) serve a copy of the order on the Deputy Attorney General of Canada and the custodian within 6 days of the day on which it was made, and, within the same time, pay to the custodian the estimated expenses of transporting the document to and from the place of hearing and of Safeguarding it: and
(c) if he has proceeded as authorized by paragraph (b), apply, at the
appointed time and place, for an order determining the question.
(5) An application under paragraph (4)(c) shall be heard in camera, and on the application
(a) the judge may, if he considers it necessary to determine the question, inspect the document and, if he does so. he shall ensure that it is repackaged and resealed: and
(b) the judge shall decide the matter summarily and,
(i) if he is of opinion that the client has a solicitor-client privilege in respect of the document, shall order the custodian to deliver the document to the lawyer, and
(ii) if he is of opinion that the client does not have a solicitor-client privilege in respect of the document, shall order the custodian to deliver the document to the officer or some other person designated by the Deputy Minister of National Revenue for Taxation,
and he shall, at the same time, deliver concise reasons in which he shall describe the nature of the document without divulging the details thereof.
(6) Where a document has been seized and placed in custody under subsection (3) and a judge, on the application of the Attorney General of Canada, is Satisfied that neither the client nor the lawyer has made an application under paragraph (4)(a), or, having made that application, neither the client nor the lawyer has made an application under paragraph. (c) thereof, he shall order the custodian to deliver the document to the officer
(a) if he decides in favour of the privilege, “order the custodian to deliver the document to the lawyer’’, and
(b) otherwise, “order the custodian to deliver the document” to the Department (subsection 232(5)).
There is a statutory duty on the custodian either
(a) to deliver the document to the lawyer
(i) in accordance with a consent by or on behalf of the Department, or
(ii) in accordance with an order of the judge made under section 232, Or
(b) to deliver it to the Department
(i) in accordance with a consent from the lawyer or client, or
(ii) in accordance with an order of the judge made under section 232 (subsection 232(7)),
and to no one else (subsection 232(11)).
In accordance with this procedure, on April 21, 1977 Madame Justice Boland of the Supreme Court of Ontario, on application of the applicants, made an order inter alia that the Sheriff of the County of York deliver certain specified documents to Goodman and Carr, Barristers and Solicitors, of Toronto, and that he deliver certain other specified documents to an officer of the Department of National Revenue, Taxation.
(The order further provided that such documents “not be delivered by the Sheriff until an Appeal or Application for Leave to Appeal from, or for judicial review of, this Order, if any, be disposed of” provided such appeal or application be filed with the appropriate court within 10 days.
Having regard to the scheme of section 232, I do not think that this order that the documents “not be delivered” until some time in the future is authorized by section 232, paragraph (5)(b) which, in my view, contemplates not only that the matter be decided “summarily” but that there be an unconditional order “to deliver”. Subsection 232(10) does not, in my view, authorize what is, in effect, a suspension of the subsection 232(5) order. It follows that the continued custody of the sheriff in this case is of the same character as was the custody of the sheriff in Deputy Attorney General of Canada v Brown, [1965] SCR 84; [1964] CTC 483; 64 DTC 5296, to which reference will be made later in these reasons.)
On April 28, 1977 the applicants filed a section 28 application for an order setting aside that part of the aforesaid order in which Madame Justice Boland “decided that certain documents seized by the Department of National Revenue from the applicants’ solicitors were not privileged”.
A copy of documents filed in connection with the matter before Madame Justice Boland, under cover of a certificate dated May 3, 1977, and accompanied by a statement to the effect, inter alia, that the documents referred to in her order “were never in the possession of” the office of the Supreme Court of Ontario, was received in the Registry of this Court pursuant to Rule 1402.* [1]
While not originally so framed, counsel have agreed that this interlocutory application should be treated as a general application for directions that would achieve the objectives sought by the applicants. To be more specific, it is to be treated as an application for an order
(a) adding the documents in question to the case as constituted by Rule 1402(1), and
(b) requiring that such documents be placed before the Court in some manner whereby they would not be available for examination except by the Court.
(Whether, without consent of all parties, an order can be made for placing the documents before the Court in such manner that they would not be available for examination except by the Court, is, in my view, open to argument. In certain section 28 applications, such an order is made by consent.)
However, regarding the interlocutory application as being, in effect, an application for such an order, and assuming that the Court would
(a) the order or decision that is the subject of the application and any reasons given therefor,
(b) all papers relevant to the matter that are in the possession or control of the tribunal,
(c) a transcript of any verbal testimony given during the hearing, if any, giving rise to the order or decision that is the subject of the application,
(d) any affidavits, documentary exhibits or other documents filed during any such hearing, and
(e) any physical exhibits filed during any such hearing.
(2) Within 10 days of filing the section 28 originating notice, in the case of the applicant, and within 10 days of being served with that originating notice, in the case of any other person, an application in writing, made in accordance with Rule 324, may be made to vary the contents of the case as fixed by paragraph (1).
(3) Unless the Court otherwise directs, of its own motion or upon the application of an interested person, the Deputy Attorney General of Canada or counsel specially appointed to apply on behalf of the tribunal, the tribunal shall, forthwith after receipt of the section 28 originating notice, either
(a) send to the Registry of the Court all the material in the case as defined by paragraph (1), or, if some part thereof is not in its possession or control, the part thereof that is in its possession or control together with a statement of the part of the case not in its possession or control, or
(b) prepare copies of the material referred to in subparagraph (a) that is in its possession or control, except the physical exhibits, duly arranged in sets and duly certified by an appropriate officer to be correct, and send 4 copies of each set to the Registry of the Court together with the physical exhibits if any and a statement of the part of the case not in its possession or control, and send one copy of the copies and such statement to each of the interested persons.
(6) Any order made under paragraph (2) shall contain incidental directions varying the procedure as contained in this Rule, if necessary in the circumstances.”
have power to make such an order, I am of opinion that it should, nevertheless, be rejected because
(a) having regard to the reasoning of the Supreme Court of Canada in Deputy Attorney General of Canada v Brown (supra)* [1] dealing with section 232 when it was section 126A of the Income Tax Act, it would be entirely academic for the Court to set aside the decision or order that is under attack, and
(b) assuming that the Court’s jurisdiction under section 28 extends to reviewing the decision or order of a judge under section 232 of the Income Tax Act as to whether a particular document is subject to solicitor-client privilege, a matter concerning which I have doubt, such jurisdiction should not, in my view, be exercised in respect of an entirely academic matter any more than an appeal court’s jurisdiction to hear an appeal should be exercised once the order or decision attacked ceases to have any practical effect. (Compare Oatway v Canadian Wheat Board, [1945] SCR 204.)
If the Court cannot, on the section 28 application, review the order under attack from the point of view of the availability of solicitor-client privilege with reference to particular documents, in my view, it is clear that there is, except possibly in exceptional circumstances that I do not perceive here, no point in adding such documents to the case as constituted by Rule 1402(1). I am, therefore, of the view that the interlocutory application should be dismissed.
Per Martland, J (delivering the judgment of the Court at pages 90 et seq [489, 5300]):
“I agree with the view expressed by Lord, JA, in the Court of Appeal, that, in cases to which the section is applicable,
‘Section 126A is a complete code in itself for deciding the question of solicitor-client privilege relative to documents of a client in the posses sion of a solicitor.’
It is, of course, clear that the privilege involved is that of the client and not the solicitor and the application to a judge for which the section provides may be made by the client, or by the lawyer on his behalf.
The section contemplates a speedy determination of the issue of the claim of privilege and thereafter a prompt delivery of possession of the document involved, either to the solicitor or to the officer of the Department. It seems to me that once that has been done the whole matter has been not only determined, but completed, and that any order which could be made on an appeal (assuming that an appeal lies) could not have a ‘direct and im mediate practical effect’, to use the words of Duff, CUC in The King on the Relation of Tolfree v Clark, [1944] SCR 69 at 72; 1 DLR 495. The document in question would no longer be in the hands of the custodian. If the order appealed from directed delivery to the departmental officer, he would, by the time the appeal was heard, have had his opportunity to inspect the document. If the order appealed from directed delivery to the solicitor, the Act contains no provision which would require him, after the document has been restored to him, to surrender it again to the departmental officer or to the custodian.
We were advised that in the present case, following the delivery of the documents to the solicitor, pursuant to the order of Sullivan, J, they were voluntarily returned to the custody of the sheriff, pending an appeal, but I do not see how such a voluntary delivery can clothe the Appellate Court with power to make a new direction regarding their disposition. They are no longer in the hands of the custodian, pursuant to subsection (3). Fur thermore, the custodian, under subsection (7), is obligated to deliver the document only upon a consent, or in accordance with the order of a judge under the section.”