Décary, J.A.:—This is an appeal from an order by Collier, J. by which he allowed a motion by the respondent/plaintiff to compel the appellant/ defendant to produce certain documents, which she refused to disclose pursuant to subsection 241(1) of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act") .
The facts, briefly stated, are as follows. The respondent became the mortgagee of certain property in the Victoria, B.C. area. The mortgagor was a company known as International Electronics Corporation (I.E.C.). Pursuant to a certificate issued against I.E.C. by Revenue Canada, the Victoria Sheriff's Department entered the building occupied by I.E.C. and seized and removed various items from the building pursuant to said certificate. The respondent alleges that Revenue Canada caused sheriff's officers to wrongfully seize and remove some of the items, including fixtures, and alleges also that extensive damage was done to the building in the course of the seizure; the seizure of a generator, it is said, resulted in flooding of the building.
In a statement of claim filed against the appellant in the Trial Division of the Federal Court the respondent claimed damages on the basis, inter alia, that the sheriff's officers were acting "at the direction of, and as agent of, Revenue Canada”. Pursuant to Rule 448 and to an order of Collier, J., the appellant filed a “Supplementary List of Documents” which, however, she considered to be protected under subsection 241(1) of the Act. The documents in question are a number of docket notations made by four collection investigation officers of the Department of National Revenue. As found by Collier, J., who was supplied with copies of the documents in issue, “it is obvious a good deal of the materials in the dockets have to do with Revenue Canada's claim against I.E.C. and the seizure by sheriffs on the instructions of Revenue Canada".
The respondent then moved under Rules 456 and 457 for an order compelling the appellant to produce those documents listed as privileged documents. That application was resisted by the appellant on the grounds that these documents were records, writings, or other documents "obtained by or on behalf of the Minister for the purposes of this Act", within the meaning of subsection 241(1) and that they were not, therefore, subject to disclosure to others, including the respondent.
Collier, J. granted the application, basically, for the following reasons:
In this present litigation, the plaintiff is not seeking to get confidential information and material gathered by the Minister in the course of general income tax informa-
Subsections 241(1), (2) and (3) read as follows:
241. (1) Except as authorized by this section, no official or authorized person shall
(a) knowingly communicate or knowingly allow to be communicated to any person any information obtained by or on behalf of the Minister for the purposes of this Act, or
(b) knowingly allow any person to inspect or to have access to any book, record, writing, return or other document obtained by or on behalf of the Minister for the purposes of this Act.
(2) Notwithstanding any other Act or law, no official or authorized person shall be required, in connection with any legal proceedings,
(a) to give evidence relating to any information obtained by or on behalf of the Minister for the purposes of this Act, or
(b) to produce any book, record, writing, return or other document obtained by or on behalf of the Minister for the purposes of this Act.
(3) Subsections (1) and (2) do not apply in respect of criminal proceedings, either by indictment or on summary conviction, under an Act of the Parliament of Canada, or in respect of proceedings relating to the administration or enforcement of this Act.
tion, procedures, investigations and matters of that kind. The documents, for which the so-called privilege is claimed, relate to the actions taken by and on behalf of Revenue Canada which give rise to the present litigation against, for practical purposes, Revenue Canada itself.
These dockets were not, and are not, as I see it, " given to the Minister for the purposes of the Income Tax Act”. They came into existence as a result of collection proceedings started against I.E.C. (the mortgagor) which allegedly caused the damage asserted by the plaintiff mortgagee. In that sense, there is no breach of confidentiality, or of the statute.
In order to succeed, the appellant had to demonstrate that the documents in question were of a confidential nature within the meaning of subsection 241(1), i.e., that they were: (i) " obtained by or on behalf of the Minister”, (ii) “for the purposes of the Income Tax Act”.
Section 241 cannot be interpreted in a vacuum. The legislative intent, admittedly, is the protection of the confidentiality of information given to the Minister for the purposes of the Income Tax Act. The privilege is not established in favour of Revenue Canada but in favour of those, particularly the taxpayer, who give information to the Minister on the understanding that such information will remain confidential.
The most usual and natural meaning of the word " obtained" and of its French equivalent "obtenir", whether read in the context of "any information" as in paragraph 241(1)(a) or in the context of "other document” as in paragraph 241(1)(b), is that of information or document not in the possession of the person seeking either and being "given" to that person. In my view, in order to be obtained” within the meaning of subsection 241(1), a document must be either a document in the possession of someone else than the Minister or his officers, or a document prepared by the Minister or his officers but on the basis of information given to them that has remained confidential. For example, internal self-generated documents, as they were described by the appellant, could well be subject to the statutory prohibition against disclosure if they are based on information given to the authors of the documents under the Income Tax Act and not released to the public through court proceedings.
In the instant case, the documents are part of a process, the collection proceedings, which is in itself in the public domain and which involves by its very nature the publication of information that would otherwise have remained confidential. One cannot seize a property pursuant to a certificate which has the force and effect of a judgment (see subsection 223(2) of the Act) without revealing to some extent information given to the Minister. Furthermore, the documents only relate, to use the words of Collier, J., "to the actions taken by and on behalf of Revenue Canada which give rise to the present litigation against, for practical purposes, Revenue Canada itself".
Section 241 was not enacted for the purpose of helping the Minister out of a negligence claim that has been brought against him. Should there be anything remaining confidential in the documents in question, the taxpayer himself or any concerned person could object to their production. In the present case, not only was there no prejudice to the taxpayer or anyone other than the Minister alleged, but Collier, J., who examined the documents, found as a fact that there was "no breach of confidentiality”. This is not a ruling with which I would, even if I could, interfere.
In Glover v. M.N.R., [1981] 2 S.C.R. 561; [1982] C.T.C. 29; 82 D.T.C. 6035; affg (sub nom. Re Glover and Glover) (1980) 29 O.R. (2d) 392 (Ont. C.A.), the information sought to be disclosed in a custody case was the address of a taxpayer who had abducted his two children and whose whereabouts were unknown. That information was most certainly an information obtained by the Minister for the purposes of the Income Tax Act and there would have been an obvious prejudice, however unsympathetic, to the taxpayer had the information been disclosed. The Glover case is, therefore, of no help to the appellant.
In view of the conclusion I have reached that the documents in question were not “obtained by or on behalf of the Minister", I need not decide whether they were obtained "for the purposes of the Income Tax Act”. Suffice it to say that the appellant, in order to qualify under subsection 1, must contend that the documents were indeed obtained for the purposes of the Act, and yet, in order to avoid the exception of disclosure established under subsection 3 the appellant must submit, as she did before us, that the proceedings in question were collection proceedings that were independent from and not related to the administration and enforcement of the Act. The appellant would, therefore, need to demonstrate that documents obtained with respect to the collection proceedings were obtained "for the purposes of the Act" but that the collection proceedings themselves were not” relating to the administration or enforcement of the Act". In view of the very wide words used in subsection 241(3), it is far from being evident that the appellant can have it both ways.
I would dismiss the appeal with costs.
Mahoney, J.A.:—I agree.
Stone, J.A.:—I agree.
Appeal dismissed.