Canada (Attorney General) v. Chambre des notaires du Québec

(Constitutional law — Charter of rights — Search and seizure)

On appeal from a judgment of the Quebec Court of Appeal (2014 QCCA 552), setting aside in part a decision of Blanchard J. (2010 QCCS 4215)

Some notaries practising law in Quebec received requirements to provide documents or information from the Minister of National Revenue under s. 231.2 of the ITA. The purpose of these requirements was to obtain information or documents relating to clients of the notaries for tax collection or audit purposes. Some of the notaries who received such requirements contacted the Chambre des notaires du Québec to raise concerns about their clients’ right to professional secrecy. The Chambre instituted a declaratory action against the Attorney General of Canada and the Canada Revenue Agency (“CRA”) for the purpose of having ss. 231.2 and 231.7 of the ITA and the exception for the accounting records of notaries and lawyers set out in the definition of “solicitor-client privilege” in s. 232(1) declared to be unconstitutional and of no force or effect with respect to notaries. The Barreau du Québec joined in the proceedings as an intervener for the purpose of having any declaration made by the courts concerning the legislative provisions in question apply equally to its members.

The Superior Court and the Court of Appeal ruled in favour of the Chambre and the Barreau. The Court of Appeal found that, pursuant to s. 52 of the Constitution Act, 1982, ss. 231.2(1) and 231.7 and the accounting records exception set out in s. 232(1) are unconstitutional and of no force or effect with respect to Quebec notaries and lawyers for all information and documents protected by professional secrecy.

Held (7-0): The appeal should be dismissed.

Section 8 of the Charter protects against unreasonable searches and seizures. There are two questions that must be answered to determine whether a government action was contrary to s. 8: whether the government action intruded upon an individual’s reasonable expectation of privacy, in which case it constituted a seizure within the meaning of s. 8, and whether the seizure was an unreasonable intrusion on that right to privacy.

The first of these questions is not problematic, as the Court has already established that a requirement constitutes a seizure within the meaning of s. 8. The seizure in this case involves information or documents that may be protected by the professional secrecy of notaries or lawyers. Professional secrecy must remain as close to absolute as possible, and it is generally seen as a fundamental and substantive rule of law. In this respect, professional secrecy has a deep significance regardless of the nature of the legal advice being sought or the context in which it is sought. For the purposes of the analysis under s. 8 of theCharter, the civil and administrative context of the requirement scheme does not diminish the taxpayer’s expectation of privacy for information that is protected by professional secrecy. A client of a notary or a lawyer has a reasonable expectation of privacy for information and documents that are in the possession of the notary or lawyer and in respect of which a requirement is issued.

In answering the second question, the courts must balance the interests at stake, namely an individual’s privacy interest on the one hand and the state’s interest in carrying out a search or seizure on the other. Where the interest at stake is the professional secrecy of legal advisers, which is a principle of fundamental justice and a legal principle of supreme importance, the usual balancing exercise under s. 8 will not be particularly helpful. Stringent standards must be adopted to protect professional secrecy. This means that any legislative provision that interferes with professional secrecy more than is absolutely necessary will be labelled unreasonable.

In this case there are several defects that cause a requirement sent to a notary or lawyer concerning information that is protected by professional secrecy to be unreasonable and contrary to s. 8, namely that the client is given no notice of the requirement, that an inappropriate burden is placed solely on the notary or lawyer concerned, that compelling disclosure of the information being sought is not absolutely necessary and that no measures have been taken to help mitigate the impairment of professional secrecy. The requirement scheme serves legitimate purposes, namely the collection of amounts owed to the CRA and tax audits, but the existence of an important purpose cannot justify sidestepping the protection afforded by s. 8 of the Charter. The constitutional defects in the requirement scheme are all the more unacceptable given that they could easily be mitigated and remedied by way of measures that are compatible with the state’s obligations relating to the protection of professional secrecy. Currently, therefore, the impairment permitted by the requirement scheme set out in ss. 231.2(1) and 231.7 of the ITA is not consistent with the principle of minimization.

The exception whose effect is to exclude the accounting records of notaries and lawyers from the protection of professional secrecy and which is set out in s. 232(1) of the ITA also infringes the rights guaranteed by s. 8 of the Charter. To determine whether an abrogation of professional secrecy in the context of a seizure is constitutional, a court must consider what characterizes professional secrecy as a substantive right. Thus, a legislative provision cannot, by abrogating professional secrecy, authorize the state to gain access to information that is normally protected, where the abrogation is not absolutely necessary to achieve the purposes of the legislation. Limits on professional secrecy must take into account the duty recognized by the Court to minimize impairments, and the exceptions must be precisely defined. In this case, the exception is broad and undefined, as it permits the seizure of any accounting record of a notary or a lawyer, and is therefore problematic from the standpoint of the absolute necessity test. Moreover, for all practical purposes, the exception removes from the court’s jurisdiction the determination of whether accounting records in respect of which a requirement has been issued are privileged. In sum, in the absence of absolute necessity and given that there is no possibility of judicial review to ensure that professional secrecy is protected, the accounting records exception allows the unreasonable seizure of information found in the accounting records of notaries or lawyers.

Because the statutory provisions in question — ss. 231.2(1) and 231.7 and the accounting records exception set out in s. 232(1) of the ITA — do not minimally impair the right to professional secrecy, they cannot be saved under s. 1 of theCharter. As for the appropriate remedy in this case, since the Court has already found that the requirement scheme is generally constitutional insofar as requirements are sent to taxpayers, it is neither necessary nor appropriate to find that the entire scheme is invalid. The requirement scheme in the ITA infringes s. 8 of the Charter and must be declared to be unconstitutional insofar as it applies to notaries and lawyers in Quebec. Section 231.2(1) of the ITA, which authorizes the Minister to send requirements, and s. 231.7 of the ITA, which authorizes the Minister to apply to a court to follow up on a requirement, are unconstitutional, and inapplicable to notaries and lawyers in their capacity as legal advisers. The exception for a lawyer’s accounting records set out in the definition of “solicitor client privilege” in s. 232(1) of the ITA is unconstitutional and invalid.

Reasons for judgment: Wagner and Gascon JJ. (McLachlin C.J. and Abella, Cromwell, Moldaver and Karakatsanis JJ. concurring)

Neutral CitationCanada (Attorney General) v. Chambre des notaires du Québec,2016 SCC 20

Docket Number: 35892