SCC grants CRA leave to appeal QCA decision voiding requirements served on advocates and notaries of Quebec.

Bill Innes on Current Tax Cases

The Supreme Court of Canada granted leave today, December 18, 2014, to CRA to appeal the decision of the Quebec Court of Appeal limiting sections 232.2(1), 231.7 and the exception set out the definition of solicitor-client privilege” in subsection 232(1) of the Income Tax Act in their application to advocates and notaries of the province of Quebec.  The Court of Appeal decision was blogged earlier on this site.

Professions in Quebec: Notarial Privilege

Attorney General of Canada, Canada Revenue Agency v. Chambre des notaires du Québec, 2014 QCCA 552 (35892) 
Section 231.2(1) of the Income Tax Act (“ITA”) authorizes the Minister of National Revenue to require, by means of a simple letter, that any person provide information or documents that might be of assistance in the administration or enforcement of the ITA.  It applies, inter alia, to advocates and notaries.  Section 241 of the ITA requires any information so obtained be kept confidential.  Should anyone refuse to comply with such a “requirement to provide documents or information”, the Minister can apply to the Federal Court under s. 231.7 for an order the person in question do so.  In such a case, the court may grant the application if the information, or documents, being sought is not protected from disclosure by “solicitor-client privilege”, which is defined in s. 232(1) of the ITA as “the right, if any, that a person has in a superior court in the province where the matter arises to refuse to disclose an oral or documentary communication on the ground the communication is one passing between the person and the person’s lawyer in professional confidence”.  However, the definition of the privilege excludes “an accounting record of a lawyer, including any supporting voucher or cheque”.  The privilege applies to notaries (s. 232(1), definition of “lawyer”). The Chambre des notaires brought an action — successfully — under art. 453 C.C.P. for a declaration that ss. 231.2(1)  and 231.7, together with the exception set out in the definition of “solicitor-client privilege” in s. 232(1), are unconstitutional in relation to advocates and notaries of the province of Quebec on the basis they are contrary to the Charter.  Quebec Superior Court: motion for declaratory judgment granted; provisions declared unconstitutional. C.A.: appeal allowed in part; declarations of unconstitutionality upheld in part. “The application for leave to appeal…is granted with costs in the cause.”

Source:  Supreme Advocacy Letter #79