http://decisions.fct-cf.gc.ca/site/fc-cf/decisions/en/item/62781/index.do 
Palmerino et al. v. Canada (National Revenue)[1] (August 20, 2013) involved three applications for judicial review of a decision under the Privacy Act[2] under the terms of which decision CRA refused to produce material collected from three taxpayers during the course of an extensive audit of their affairs from 2004 to 2008. CRA’s refusal was ultimately said to be based on paragraphs 22(1)(a) and 22(1)(b) of the PA:
22. (1) The head of a government institution may refuse to disclose any personal information requested under subsection 12(1)
(a) that was obtained or prepared by any government institution, or part of any government institution, that is an investigative body specified in the regulations in the course of lawful investigations pertaining to
(i) the detection, prevention or suppression of crime,
(ii) the enforcement of any law of Canada or a province, or
(iii) activities suspected of constituting threats to the security of Canada within the meaning of the Canadian Security Intelligence Service Act,
if the information came into existence less than twenty years prior to the request;
(b) the disclosure of which could reasonably be expected to be injurious to the enforcement of any law of Canada or a province or the conduct of lawful investigations, including, without restricting the generality of the foregoing, any such information
(i) relating to the existence or nature of a particular investigation,
(ii) that would reveal the identity of a confidential source of information, or
(iii) that was obtained or prepared in the course of an investigation;
In a nutshell the taxpayers’ position was that most of the information had been collected before the commencement of any criminal investigation (paragraph 22(1)(a)) and that the investigation had been completed with the conclusion of the underlying prosecutions (paragraph 22(1)(b)).[3]
The Federal Court in large part rejected the restrictive interpretation put forward by CRA:
[55] The Court must reject the interpretation proposed by the respondent, whereby the documents obtained in connection with a simple audit are automatically subject to the exemption in paragraph 22(1)(a) once they are placed in a fraud investigation file. Allowing this interpretation would harm the fundamental rights recognized by the Charter. The Supreme Court reminds us, and rightly so, of the quasi-constitutional nature of the PA in its decision in Lavigne above. Moreover, the respondent cites no authority to support this interpretation. What is more, Schedule III of the Regulations concerns criminal investigations and not routine audits under the Income Tax Act, RSC 1985, c. 1 (5th Supp).
[56] Nor can the Court subscribe to the respondent’s argument that for judicial reviews of a decision made under paragraphs 22(1)(a) and 22(1)(b) of the PA, it cannot consider the applicant’s aims. Just as it is incumbent upon the respondent to justify its refusal, so too can the context and events surrounding the gathering of the requested information become pivotal, in certain circumstances. In the case at bar, the applicant seeks to challenge the lawfulness of part of the investigation into her activities in order to protect her rights guaranteed under the Charter and as defined in Jarvis (cited earlier). This fact cannot be ignored by the Court, especially since the respondent is offering no clarification as to the nature of the harm it may incur.
[57] The evidence presented by the respondent to justify his refusal to provide access to the requested documents demonstrates that some of the documents may have been obtained outside the confines of the fraud investigation. Moreover, the tests and methodology employed to determine whether the requested documents were actually obtained and compiled as part of the fraud investigation and not during the audit are not clear. In the circumstances, the respondent’s refusal is unreasonable, and the Court must allow the application for judicial review. The present decision is applicable mutatis mutandis to dockets T-2116-11, T-2117-11 and T-2118-11, and shall be placed in each of these dockets.
JUDGMENT
THE COURT ALLOWS this application for judicial review and ORDERS the respondent, pursuant to section 48 of the PA, to remit, within 120 days after this judgment, copies of all the documents in his possession, as requested by the applicant on April 22 and 26 and on May 3 and 7, 2010, that were compiled or produced prior to April 7, 2008, by officers of the CRA and that were placed in the respondent’s investigation file, except for the documents seized at the applicant’s and third parties’ residence\s under a search warrant, and documents that would make it possible to identify police informants, which must be redacted.
Without costs.
Comment: This decision appears to be a helpful addition to the arsenal of taxpayers attempting to attack what they believe to be Jarvis violations.
[1]2013 FC 919.
[2] S.C. 1985, c. P-21 (the “PA”)
[3] On the second point CRA contended that the taxpayers’ applications had been commenced prior to the conclusion of the prosecutions.