SEATON, J.:—The applicant seeks to invoke the summary procedure in Section 126A of the Income Tax Act, R.S.C. 1952,
c. 148, as amended. On this initial application the question is not whether or not the documents are privileged but whether or not they are within the ambit of the summary procedure provisions. Section 126A(3) and (4) provide as follows:
(3) Where an officer is about to examine or seize a document in the possession of a lawyer and the lawyer claims that a named client of his has a solicitor-client privilege in respect of that document, the officer shall, without examining or making copies of the document,
(a) seize the document and place it, together with any other document in respect of which the lawyer at the same time makes the same claim on behalf of the same client, in a package and suitably seal and identify the package; and
(b) place the package in the custody of the sheriff of the district or county in which the seizure was made or, if the officer and the lawyer agree in writing upon a person to act as custodian, in the custody of such person.
(4) Where a document has been seized and placed in custody under subsection (3), the client, or the lawyer on behalf of the client, may
(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.
It is common ground that the documents were not ‘in the possession of a lawyer’’ but were in the possession of a chartered accountant when seized. The only case on point cited by counsel is he Evans (1968), 68 D.T.C. 5277, where the file in the hands of the client was held to be privileged. It does not appear that the issue we are concerned with was raised or considered.
I see no ground on which the clear language of subsection (3) could be broadened to bring within its provisions all documents with respect to which a claim of solicitor-client privilege is made. The subsequent provisions of the section bear out the conclusion that it is restricted to ‘‘documents in the possession of a lawyer’’. Subsection (5) directs that the documents may be ordered to be delivered ‘‘to the lawyer’’ or to the Department. A further indication of the purpose is found in subsection (12) which provides :
(12) No officer shall examine or seize a document in the possession of a lawyer without giving him a reasonable opportunity of making a claim under subsection (8).
The section does not allow of any interpretation other than that this remedy is only available in respect of documents seized while in the possession of a lawyer. In the result, I do not fix a" day and place for the determination of the question whether the client has a solicitor-and-client privilege.
If no other remedy is available the applicant’s claim to privilege may well be defeated. Mr. Jackson says the applicant is not prejudiced as it can still object to the documents being put in evidence at a trial. If there were only evidentiary privilege that might be the case and the provision of a summary procedure would not be necessary. The definition of ‘‘solicitor-client privi- lege’’ in the Act would seem to encompass the common law privilege against production which is left unprotected.
I have not decided that the Department is entitled to examine the documents in question, that there is not privilege or that the seizure is valid. The applicant may find that there are other methods of examining those questions and should have the opportunity. Subsection (10) provides:
(10) Where any question arises as to the course to be followed in connection with anything done or being done under this section (other than subsection (2) or (3)) and there is no direction in this section with respect thereto, a judge may give such direction with regard thereto as, in his opinion, is most likely to carry out the object of this section of allowing solicitor-client privilege for proper purposes.
Pursuant thereto I direct that the documents be held in their present sealed condition by Mr. McNeill for a further 30-day period.
Since writing the above I have received further argument from Mr. Legg and the current edition of the Canadian Bar Journal, vol. 12, No. 2 containing an interesting article on this section. In this case no purpose is served by challenging the constitutionality of the section as it is the taxpayer who seeks to invoke the procedure. Nor do I think it useful to consider whether or not the documents are privileged; an inquiry to be made on the second application.