The Proceeds of Crime (Money Laundering) and Terrorist Financing Act required law firms to verify the identity and record the identity of clients for whom they acted as "financial intermediaries," collect and retain financial records when receiving or paying funds for purposes other than professional fees, disbursements, expenses or bail, and allowed the anti-money laundering a federal agency (FINTRAC) to make warrantless reviews of such records subject to the firm following a specified procedure for claiming solicitor-client privilege. Non-compliance was punishable by imprisonment.
The Court largely confirmed the findings below that the provisions should be variously struck (in the case of the search and seizure provisions), or read down to exclude lawyers (for record keeping etc.). The impugned provisions breached the clients' rights against unreasonable search and seizure (see summary under Charter, s. 8).
The majority also found that the provisions contravened Section 7. One of the elements of a lawyer's duties is commitment to the client's cause - i.e. "ensuring that a divided loyalty does not cause the lawyer to 'soft peddle' his or her defence of a client" (para. 103, quoting Neil, 2002 SCC 70, at para. 70). Cromwell J stated (at para. 84):
We should, in my view, recognize as a principle of fundamental justice that the state cannot impose duties on lawyers that undermine their duty of commitment to their clients' causes. Subject to justification being established, it follows that the state cannot deprive someone of life, liberty or security of the person otherwise than in accordance with this principle.