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Criminal - Search of Solicitor Files [CCC 488.1]. Chad v. Canada (National Revenue) [criminal search and seizure on lawyer's records: CCC 488.1]
In Chad v. Canada (National Revenue) (Fed CA, 2025) the Federal Court of Appeal dismissed an appeal, here from an order which "struck Mr. Chad’s Notice of Application for judicial review, without leave to amend".
Here the court considers the solicitor-client privilege documentary seizure provisions of CCC 488.1 ['Examination or seizure of certain documents where privilege claimed']:[15] .... He further says that the duty is a statutory duty that stems from the Supreme Court of Canada’s decision in Lavallee, Rackel & Heintz v. Canada (Attorney General), 2002 SCC 61 and its progeny, most notably the Federal Court’s decision in Canada (National Revenue) v. Thornton, 2012 FC 1313.
[16] Lavallee addressed the constitutionality of section 488.1 of the Criminal Code, R.S.C. 1985, c. C-46. Section 488.1 sets out a procedure to be followed when an officer acting under the authority of any Act of Parliament is "“about to examine, copy or seize a document in the possession of a lawyer who claims that a named client of his has a solicitor-client privilege in respect of that document”". The Supreme Court found that procedure, and therefore section 488.1, to be unconstitutional because it more than minimally impaired solicitor-client privilege. Justice Arbour, writing for the majority, emphasized that solicitor-client privilege is a principle of fundamental justice with the consequences that (a) any information protected by the privilege is out of reach of the state, unless the holder of the privilege consents to the disclosure of the information; and (b) the privilege is protected under sections 7 and 8 of the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c. 11: Lavallee at paras. 24, 34–46; Mahmoud Jamal & Brian Morgan, "“The Constitutionalization of Solicitor-Client Privilege”" (2003) 20 Supreme Court Law Review (2d) 213 at 226. Section 7 provides that everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice. As for section 8, it provides that everyone has the right to be secure against unreasonable search or seizure.
[17] The Minister does not deny that solicitor-client privilege is a principle of fundamental justice with the consequence, highlighted in Lavallee, that any information protected by the privilege is out of the state’s reach if privilege has not been waived: Lavallee at para. 24. Hence, the Minister has no issue with the third step of the "“positive legal obligations”" argued by Mr. Chad, that is, to refrain from using or inspecting documents over which privilege is claimed or that appear on their face to be privileged until any claims of privilege have been determined by a court of competent jurisdiction.
[18] However, the Minister takes issue with the first two steps which would require the Canada Revenue Agency, in the face of vague assertions of possibly privileged documents, to search its records for documents that "“contain or make reference, directly or indirectly, to communications with a solicitor or any agent, employee or associate of a solicitor”" and report back to Mr. Chad and the other individuals on the results of that search. The Minister says that nothing in the case law supports the existence of these obligations.
[19] I agree.
[20] For one, Lavallee does not support the existence of these obligations.
[21] Lavallee concerned documents seized from a law firm, thus, in a context where it was reasonable to assume that the documents were privileged. Here, the Agency obtained documents from third parties without any indication that some could be privileged. As well, Mr. Chad has provided no fact, other than the existence of one privileged document, to lend credence to his belief that the Agency may have other privileged documents.
[22] Moreover, Lavallee provides ten guidelines consistent with the constitutional protection of solicitor-client privilege to govern both the search authorization process and the way a search must be carried out in law offices: Lavallee at para. 49. In essence, guidelines number 1 to 3 describe the conditions that must be met for the issuance of a search warrant with regard to law firms; guideline number 4 says that all documents in the possession of a lawyer must be sealed before being examined or removed from the lawyer’s possession; guidelines number 5 to 7 detail the efforts that must be made to contact the lawyers, clients and privilege holders and give them a reasonable opportunity to assert a claim of privilege and, if that claim is contested, to have the issue judicially decided; guideline number 8 provides that the Attorney General may make submissions on the issue of privilege, but should not be permitted to inspect the documents beforehand; guideline number 9 says that where sealed documents are found not to be privileged, they may be used in the normal course of the investigation; and guideline number 10 says that where documents are found to be privileged, they are to be returned immediately to the holder of the privilege, or to a person designated by the court. Guidelines number 1 to 9 cannot apply here because the Agency already has access to the documents. As for guideline number 10—to return privileged documents to the privilege holder—it is part of the third step of the "“positive legal obligations”" argued by Mr. Chad, with which the Minister agrees. As the review of the guidelines confirms, Lavallee does not support the existence of the public legal duty that Mr. Chad articulates.
[23] Equally, Thornton is of no assistance to Mr. Chad. In that case, the Federal Court stated that when an investigating authority comes into possession or becomes aware of documents that may be protected by solicitor-client privilege, every effort should be made to contact the privilege holder, provide them with the opportunity to assert privilege and, if necessary, have the issue of privilege judicially decided: Thornton at para. 24. However, this statement was made in a context that greatly differs from the context here. In Thornton, the Agency asked an accounting firm to provide documents related to a reorganisation undertaken by the firm’s client. The accounting firm provided the documents but told the Agency that its client was asserting privilege in respect of three documents marked "“privileged”".
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