Law Times

Law Times • JuLy 11, 2016 Page 13 www.lawtimesnews.com CASELAW Supreme Court of Canada Constitutional Law CHARTER OF RIGHTS Exception for lawyer's account- ing records in s. 232(1) of Income Tax Act (Can.) unconstitutional Canada Revenue Agency (CRA) sent notaries practising law in Quebec requirements under s. 231.2 of Income Tax Act (Can.) to obtain information or docu- ments relating to notaries' clients for tax collection or audit purpos- es. Notaries' association brought action against Attorney General of Canada and CRA (Crown) to have ss. 231.2 and 231.7 of Act and accounting records excep- tion in s. 232(1) of Act declared to be unconstitutional with respect to notaries. Trial judge allowed action. Court of Appeal allowed Crown's appeal but solely to make clarifications. Crown appealed. Appeal dismissed. Requirement scheme in ss. 231.2(1) and 231.7 of Act violated s. 8 of Canadian Charter of Rights and Freedoms and was of no force and effect for notaries and lawyers. Exception for lawyer's accounting records set out in definition of "solicitor- client privilege" in s. 232(1) of Act was unconstitutional and invalid. There were defects in require- ment scheme relating to informa- tion protected by professional se- crecy that violated s. 8 of Charter. Exclusion of accounting records of notaries and lawyers from pro- tection of professional secrecy as set out in definition of "solicitor- client privilege" in s. 232(1) of Act infringed s. 8 of Charter. Infringe- ment of s. 8 of Charter was not justified by s. 1 of Charter. Act had pressing and substantial objective of collection of taxes. There was logical and direct connection between collection of taxes and requirement scheme. Sections 231.2(1), 231.7 and 232(1) of Act, in relation to notaries and lawyers, did not minimally impair right to professional secrecy. Canada (Procureur général) c. Chambre des notaires du Québec (Jun. 3, 2016, S.C.C., McLachlin C.J.C., Abella J., Cromwell J., Mol- daver J., Karakatsanis J., Wagner J., and Gascon J., 35892) Decision at 242 A.C.W.S. (3d) 225 was af- firmed. 265 A.C.W.S. (3d) 1082. Taxation INCOME TAX Clients must be noti- fied when court considering order requiring disclosure Canada Revenue Agency sent re- quirement pursuant to s. 231.2(1) of Income Tax Act (Can.) to tax- payer lawyer, requesting docu- ments regarding income and expenses. Taxpayer claimed that details such as clients' names in accounts receivable listing were protected by solicitor-client privilege. Federal Court granted Minister of National Revenue's application for compliance or- der. Federal Court of Appeal allowed taxpayer's appeal in part, dismissed taxpayer's argu- ments based on s. 8 of Canadian Charter of Rights and Freedoms and sent matter back to Federal Court. Minister appealed. Ap- peal allowed. Federal Court of Appeal's order was set aside and Minister's application for com- pliance order was dismissed, given holding in companion case that accounting records excep- tion in s. 232(1) of Act was con- stitutionally invalid. Definition of "solicitor-client privilege" in s. 232(1) of Act was clearly intend- ed to permit Minister to have access to lawyers' accounting re- cords even if they contained oth- erwise privileged information. While taxpayer's challenge was based on argument that defini- tion of "solicitor-client privilege" in s. 232(1) of Act did not satisfy jurisprudential criteria, in com- panion case, s. 232(1) of Act was found to be constitutionally in- valid. In companion case, Act's requirement scheme as it applied to lawyers and notaries unjusti- fiably infringed s. 8 of Charter, which meant that request made to taxpayer under scheme was now foreclosed. To properly safe- guard clients' right to solicitor- client privilege, clients must be notified when court considered making order requiring disclo- sure of possibly privileged in- formation, and be given oppor- tunity to contest disclosure of information. Minister of National Rev- enue v. Thompson (Jun. 3, 2016, S.C.C., McLachlin C.J.C., Abella J., Rothstein J., Cromwell J., Karakatsanis J., Wagner J., and Gascon J., 35590) Decision at 230 A.C.W.S. (3d) 736 was re- versed. 265 A.C.W.S. (3d) 1083. Federal Court of Appeal Appeal INTERVENTION Motions for leave to inter- vene in appeal dismissed AMI and TTA brought motions for leave to intervene in appeal. Motions dismissed. Proposed interveners were not directly af- fected by outcome. Absence of interveners would not stop court from deciding appeal. AI's sub- missions on international law issues were not sufficiently rele- vant and material to issue in ap- peal. Proposed intervener would not assist court on central issue in appeal. If intervention were permitted there would be fur- ther delay exposing applicants to more of sort of harm they allege in their motion. TTA would not offer different perspective on issues in appeal and proposed submissions would substantially duplicate those of appellants. Prophet River First Nation v. Canada (Attorney General) (Apr. 20, 2016, F.C.A., Da- vid Stratas J.A., A-435-15) 265 A.C.W.S. (3d) 833. Customs and Excise APPEAL Canadian International Trade Tribunal's reasons were transpar- ent, intelligible, and justified Canadian International Trade Tribunal (CITT) found that seven models of B's washers and dry- ers, were not entitled to duty-free treatment under tariff item No. 9979.00.00 because they were not goods specifically designed to as- sist persons with disabilities. B ap- pealed. Appeal dismissed. CITT did not adopt test not authorized by law in referring to U.S. legisla- tion as B submitted that U.S. stan- dards were relevant to CITT's as- sessment of design characteristics of goods. CITT did not substitute U.S. standards for "specifically designed" test mandated by Tar- iff. Assuming Tribunal erred in its interpretation of the high for- ward reach and high side reach standards, this did not render decision unreasonable. Without pedestal lower door height stan- dard was not met. Any incorrect inference drawn by CITT did not undermine analysis that goods were not U.S. standard compli- ant. Section 68(1) of Customs Act (Can.) restricts appeals from CITT to Federal Court to appeals on question of law and drawing of unsound inference not an error of law. CITT did not base its deci- sion on standard practice without considering facts of case so no fet- tering of discretion. Once B failed to demonstrate full compliance, CITT not required to consider partial compliance. Jurispru- dence well-settled that an admin- istrative decision-maker need not address every argument raised by parties. CITT's reasons were transparent and intelligible and justified on record before it. Deci- sion fell within range of possible acceptable outcomes defensible in light of evidence and law. BSH Home Appliances Ltd. v. Canada (Border Services Agen- cy) (Apr. 29, 2016, F.C.A., Elea- nor R. Dawson J.A., D.G. Near J.A., and Yves de Montigny J.A., A-32-15) 265 A.C.W.S. (3d) 921. Employment WRONGFUL DISMISSAL Monies earned were not refer- able to damages award Employee's employment with fed- eral government was terminated. After spending two years in un- successful job search, employee did contract work. Employee's grievance was upheld, with ad- judicator ordering payment of damages in lieu of reinstatement due to poisoned nature of work- place relationships. Adjudicator applied economic loss approach to damages and decided in light of employee's lengthy disciplin- ary record to apply 90 per cent reduction for contingency that he would have been terminated for cause if reinstated. Adjudicator determined that monies earned by employee from self-employ- ment were to be deducted from damages award. Employee's ap- plication for judicial review with respect to set-off of self-employ- ment earnings was dismissed. Employee appealed. Appeal al- lowed. Impugned portion of adju- dicator's award was unreasonable because it f lew in face of authori- ties on mitigation by contradict- ing well-established principle that amounts set-off from damages on account of mitigation must be referable to loss for which dam- ages were awarded. Principles applied equally in unionized context, such that monies earned by dismissed employee were de- ductible on account of mitiga- tion only if they were referable to loss for which award of damages CASELAW CaseLaw is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada, and all Ontario courts. These cases may be found online in BestCase and other electronic resources from carswell.com. To subscribe, please call 1-800-387-5164. REACH ONE OF THE LARGEST LEGAL AND BUSINESS MARKETS IN CANADA! AVAILABLE ONLINE AND IN PRINT With more than 300,500 page views and 100,000 unique visitors monthly canadianlawlist.com captures your market. 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