Zeifmans, 2021 FC 363, aff’d 2022 FCA 160 concerned the application of the Zeifmans accounting firm for judicial review of a CRA issuance of a requirement letter pursuant to s. 231.2(1) respecting three named individual clients of the firm and all “entities owned, operated, controlled or otherwise connected to [such] individuals” (the “Unnamed Persons.”) The submission of Zeifmans - that judicial authorization should have been obtained pursuant to s. 231.2(3) given that the RFI extended to the Unnamed Persons – was rejected essentially because there was “no evidence in the record that the Unnamed Persons [we]re a current investigation target.”
In this subsequent proceeding, an application of the Minister for a compliance order pursuant to s. 231.7 was dismissed. Of crucial significance was the finding of Pallota J that Unnamed Persons were (and had been at the time of issuing the Requirement) an investigation target, i.e., the lead auditor had effectively admitted in cross examination in these proceedings that the requirement had been issued as part of the CRA audits of all the companies in the group (paras. 105, 144).
Pallota J also rejected the Crown’s position that Zeifmans’ position in this application represented an impermissible collateral attack on the prior administrative order (the requirement) given that inter alia the imposition of separate conditions under s. 231.7(1)(a) notwithstanding that a recipient of a requirement could apply for judicial review of the requirement “indicate[d] Parliament did not intend for judicial review to be the sole forum for considering whether the Minister properly exercised her authority in issuing the Requirement” (para. 66), the two proceedings had a different character (of a reasonableness review, contrasted to a substantive review of whether the s. 231.7 considerations were satisfied – see paras. 74, 81-82), and in the earlier proceeding, the Minister had failed to disclose that the Unnamed Persons in fact were being targeted.