Kourtessis v. M.N.R., 1993 CanLII 137 (SCC), [1993] 2 SCR 53

Constantine Kourtessis and Hellenic Import‑Export Co. Ltd. Appellants

v.

Minister of National Revenue Respondent

and

The Attorney General for Ontario and the Attorney General of Quebec Interveners

Indexed as: Kourtessis v. M.N.R.

File No.: 21645.

1992: February 6; 1993: April 22.

Present: La Forest, L'Heureux‑Dubé, Sopinka, Cory, McLachlin, Stevenson* and Iacobucci JJ.

on appeal from the court of appeal for british columbia

Income tax ‑‑ Enforcement ‑‑ Search and seizure ‑‑ Warrant authorizing search and seizure quashed but material seized not returned ‑‑ Second warrant issued with respect to retained material but subject to right to challenge ‑‑ Appellants challenging warrant by bringing application for declaration that search warrant and enabling legislation unconstitutional and for order quashing warrant -- Application dismissed ‑‑ Court of Appeal finding no right to appeal because search and seizure effected under federal criminal law power and no right to appeal existing in Criminal Code or Income Tax Act ‑‑ Whether or not appeal could be effected under provincial procedures ‑‑ Whether or not search and seizure unreasonable contrary to s. 8 of Charter ‑‑ Income Tax Act, S.C. 1970‑71‑72, c. 63, as amended by S.C. 1986, c. 6, ss. 231.3, 231.3(7), 239 ‑‑ Canadian Charter of Rights and Freedoms, s. 8.

Courts ‑‑ Jurisdiction ‑‑ Right of appeal ‑‑ Income tax ‑‑ Enforcement ‑‑ Search and seizure ‑‑ Warrant authorizing search and seizure quashed but material seized not returned ‑‑ Second warrant issued with respect to retained material but subject to right to challenge ‑‑ Appellants challenging warrant by bringing application for declaration that search warrant and enabling legislation unconstitutional and for order quashing warrant -- Application dismissed ‑‑ Court of Appeal finding no right to appeal because search and seizure effected under federal criminal law power and no right to appeal existing in Criminal Code or Income Tax Act ‑‑ Whether or not appeal could be effected under provincial procedures.

Courts ‑‑ Procedure ‑‑ Income tax ‑‑ Enforcement ‑‑ Search and seizure ‑‑ Warrant authorizing search and seizure quashed but material seized not returned ‑‑ Second warrant issued with respect to retained material but subject to right to challenge ‑‑ Appellants challenging warrant by bringing application for declaration that search warrant and enabling legislation unconstitutional and for order quashing warrant -- Application dismissed ‑‑ Court of Appeal finding no right to appeal because search and seizure effected under federal criminal law power and no right to appeal existing in Criminal Code or Income Tax Act ‑‑ Whether or not appeal could be effected under provincial procedures.

Officers of Revenue Canada believed that appellants were evading or attempting to evade tax by making false and deceptive statements in income tax returns contrary to s. 239 of the Income Tax Act (ITA). The British Columbia Supreme Court issued warrants to search for and seize documents which could afford evidence of the alleged violations. These warrants were subsequently quashed by another judge of that court. The items that had been seized, however, were not returned and McEachern C.J.S.C. issued a search warrant for the seizure of relevant documents located at the Department's premises, provided that everything seized be sealed and that appellants have thirty days to challenge the warrant.

Appellants instituted proceedings in the B.C. Supreme Court by way of originating petition challenging the warrant under s. 231.3(7) of the ITA, s. 24(1) of the Canadian Charter of Rights and Freedoms, and the inherent jurisdiction of the court. The relief sought was an order quashing the warrant and the search and seizure executed under it, ordering the return of the material seized, prohibiting its use and ordering its destruction and declaring s. 231.3 of the ITA to be contrary to ss. 7, 8 and 15 of the Charter.

The entire application was dismissed by the B.C. Supreme Court in two judgments ‑‑ one dealing with non‑constitutional issues and one with constitutional issues. On appeal to the Court of Appeal, appellants, unsure whether leave was required, gave both notice of appeal and notice of application for leave to appeal. The Minister brought a motion to quash on the ground that no appeal lay from the B.C. Supreme Court's judgment. The Court of Appeal allowed the motion to quash, holding that it had no jurisdiction to hear the appeal. It reasoned that the litigation in question was a criminal proceeding subject to Parliament's exclusive jurisdiction to prescribe criminal procedure and no right of appeal could be found in the ITA or the Criminal Code. The Court of Appeal would in any event have dismissed the appeal on the merits.

The preliminary issue to be decided here was whether the British Columbia Court of Appeal had jurisdiction to entertain the appellants' appeal. The constitutional question before the Court queried whether s. 231.3 of the ITA infringed ss. 7 and 8 of the Charter.

Held: The appeal should be allowed. Section 231.3 of the Income Tax Act infringes s. 8 of the Charter.

Per La Forest, L'Heureux-Dubé and Cory JJ.: Section 231.3 was held to violate s. 8 of the Charter in Baron v. Canada, [1993] 1 S.C.R. 416. The procedural issues, nevertheless, have very important implications for the working of the enforcement provisions of the ITA and other federal statutes to which federal criminal procedures apply.

An appeal is not available because no appeal has been provided by the relevant legislative body and courts of appeal have no inherent rights to create appeals. Only superior court judges appointed under s. 96 of the Constitution Act, 1867 have inherent jurisdiction. The appellants, however, may pursue an action for a declaration, to which the ordinary rules of procedure in civil actions apply, including provisions for appeal.

Various policy reasons underlie enacting a procedure that limits rights of appeal. Sometimes the opportunity for more opinions does not serve the ends of justice. There should not be unnecessary delay in the final disposition of proceedings, particularly proceedings of a criminal character. This is especially applicable to interlocutory matters which can ultimately be decided at trial. As well, there is the simple value of a final decision to resolve a dispute without the costs, in time, effort and money, of further hearings.

The offence created by s. 239 of the ITA is constitutionally supportable under both Parliament's criminal law power and its taxing power. The procedure to secure its enforcement is that set forth in the Criminal Code which notably provides only limited rights of appeal. Section 34(2) of the Interpretation Act provides that the provisions of the Criminal Code are to apply to offences created by Parliament unless the statute creating the offence provides otherwise. No right of appeal from an order issuing a search warrant is provided in the Criminal Code. Section 231.3 of the ITA was enacted for search warrants as contemplated by s. 34(2) of the Interpretation Act. It also makes no provision for appeal other than the review process set forth in s. 231.3(7).

Parliament, in the exercise of a federal head of power, may provide procedures for the enforcement of the measures it has enacted. That is a matter within its exclusive competence. Parliament can adopt provincial procedures for that purpose, and such an adoption will be assumed where it is necessary to give effect to a right. When Parliament selects a specific and integrated procedure, however, there is no room for the operation of provincial law. The enforcement provisions of the ITA form part of the uniform and integrated procedure for the investigation and prosecution of offences under the Act. No federal adoption was made or can be assumed here. Barring such adoption it is constitutionally unacceptable to read in appeals for other interlocutory proceedings or to adopt other provincial rules of procedure.

The admixture of provincial civil procedure with criminal procedure could result in an unpredictable mish-mash. In dealing with procedure, and particularly criminal procedure, it is important to know the precise steps to be pursued. Parliament accordingly adopted a comprehensive procedure under the Criminal Code and adopted that procedure for the enforcement of penal provisions in other statutes, including the ITA.

A number of pre-trial remedies are available to a person who has been the subject of a search. Section 231.3(7) provides for review and the Criminal Code makes provision for a speedy application for the return of seized goods. If the matter should proceed to trial, the accused may attack the search warrant in any way he considers appropriate, including the allegation that it infringes the provisions of s. 8 of the Charter. If the matter should not go to trial, a party may still seek civil damages for compensation.

The general right of appeal set forth in the Federal Court Act should not be assumed to apply to a proceeding provided in a separate statute that is a mere adjunct to a general system of criminal procedure where appeals of this nature are not provided. Parliament arguably did not intend by this minor grant of jurisdiction to the Federal Court (in what is for it an untypical jurisdiction) to have had in contemplation the general right of appeal devised for quite different types of proceedings. There may, in other words, be no anomaly at all.

The declaration does not constitute a review of a decision taken in a criminal proceeding because it merely states the law without changing anything. It should not be widely used as a separate collateral procedure to, in effect, create an automatic right of appeal where Parliament has, for sound policy reasons, refused to do so. Another procedure need not be provided as long as a reasonably effective procedure exists. A reasonably effective procedure has not been provided here, however. Section 231.3(7) and other procedures afford a measure of protection to the appellants but do not provide an adequate statutory provision for constitutional review of a search warrant.

Where a search is being conducted at the pre-trial stage, there is no trial judge and unlike the situation after the charge, no express Charter guarantee that proceedings must take place within a reasonable time. An investigation can go on indefinitely in continuing breach (if the search provisions are unconstitutional) of the appellants' Charter rights for an extensive period. The property of the individual subject to the search may remain in the custody of the state for a protracted period in violation of Charter norms.

The power to issue a search warrant under the ITA is vested in a superior court judge and at common law a decision of a superior court judge cannot be the subject of collateral attack. The judge issuing the warrant is not in a position to review for constitutionality at an ex parte hearing, and may not have the jurisdiction to do so on a later review of the ex parte order. An action for a declaration would not be barred, even if on later review the judge is competent to review the warrant and the empowering legislation on the basis of constitutionality, because that remedy would not provide sufficient constitutional protection.

The appellants should be permitted to pursue an action for a declaration. Since the action for a declaration is a discretionary remedy, however, the judge, in the exercise of his or her discretion, should consider the specific circumstances presented and refuse to entertain the action if satisfied that criminal proceedings against the accused would be initiated within a reasonable time. This would avoid the overlap and delay that have been among the major informing considerations in devising the rules for the governance of the discretion to allow or not to allow an action for a declaration to proceed.

A declaration should issue declaring s. 231.3 of the ITA and the search warrant issued thereunder to be of no force or effect. The appellants, in light of that declaration, are also entitled to the return of their documents and other property and all copies and notes thereof.

While an action for a declaration is an appropriate remedy at this stage of the proceedings, certiorari generally appears to be a more suitable instrument for reviewing the constitutionality of the action, and the possibility that it might have issued in this case should be left open. At common law certiorari does not lie against a decision of a superior court judge, but what is alleged here is a breach of a constitutional right which may call for an adaptation of the inherent powers of a superior court to make the procedure conform to constitutional norms. If certiorari might have issued, there would appear to be little use for the declaratory action in this context.

Per L'Heureux-Dubé J.: The reasons of La Forest J. were joined given that the majority decision in Knox Contracting Ltd. v. Canada, [1990] 2 S.C.R. 338, applied.

Per Sopinka, McLachlin and Iacobucci JJ.: Section 231.3 of the ITA violates the reasonable search guarantee found in s. 8 of the Charter for the reasons given in Baron v. Canada, [1993] 1 S.C.R. 416.

The offence and search warrant provisions of the ITA are referrable to both the federal criminal law and taxation power, and jurisdiction to legislate procedure in matters relating to these provisions is shared between the provinces and the federal government, subject to federal paramountcy in the event of conflict between federal legislation. Parliament is free to assign jurisdiction to any tribunal it chooses, whatever the source of its legislative power. If federal legislation is silent, the ordinary rule is that a litigant suing on a federal matter in a provincial court takes the procedure of that court as he or she finds it. This does not mean that provincial legislation does not apply unless "adopted" by federal legislation. The authorities make it clear that a province has legislative authority to adjudicate federal matters and that such legislation is only ousted if it conflicts with federal legislation. The fact that there is alleged to be a comprehensive procedure contained in federal legislation is only relevant to determine whether provincial legislation is ousted because it conflicts with federal legislation. It is not ousted in relation to declaratory relief, which includes the right of appeal conferred by provincial legislation, and should also extend to ancillary relief which enables the Court to give effect to the declaration.

Knox Contracting Ltd. v. Canada, [1990] 2 S.C.R. 338, should be distinguished so as not to foreclose an appeal in proceedings relating to a declaration that the statute authorizing a search warrant violates the Constitution, coupled with an application to set aside the search warrant. These two remedies can be exercised, in combination, prior to the laying of charges, and the result of such exercise may be appealed.

An application under s. 231.3(7) would be a wholly inappropriate proceeding to test the constitutional validity of the provision under which the seizure is made. It applies only if the judge is satisfied that the documents seized are not needed for an investigation or prosecution or were not seized in accordance with the warrant. Section 231.3(7) can only be resorted to if both the warrant and the statutory provision under which the warrant was issued are valid. Not only is subs. (7) not an appropriate forum with respect to a constitutional challenge of the search and seizure provision, but a judge would also not have jurisdiction to deal with such a challenge upon a plain reading of the words of the subsection.

In the alternative, Knox Contracting can be distinguished on the basis that the procedure relating to proceedings for declaratory relief on constitutional grounds cannot be characterized as criminal law so as to exclude a right of appeal. In Knox Contracting the proceeding taken was a motion to quash. There was no constitutional challenge to legislation in that case. Here, the proceeding taken was not simply to quash the warrant but an action for a declaration that s. 231.3 was invalid on constitutional grounds. A motion to quash, when not combined with an action for declaratory relief, may take its character for the purpose of division of powers from the underlying proceeding which it attacked. On the other hand, an action for a declaration as to the constitutional validity of a statute does not necessarily partake of the character of the statute which is attacked. It has a life of its own.

An action to declare a statutory provision unconstitutional is not transformed from a civil remedy to a criminal remedy merely because the declaration relates to a criminal statutory provision. It cannot be used as a substitute for an application to the trial judge in a criminal case in order to acquire a right of appeal. By virtue of s. 24(1) of the Charter, there are some proceedings available to an accused in the context of a criminal case in respect to issues that could be the subject of an action for a declaration. The superior courts have jurisdiction to entertain such applications even if the superior court to which the application is made is not the trial court. However, a superior court has a discretion to refuse to do so unless, in the opinion of the superior court, given the nature of the violation and the need for a timely review, it is better suited than the trial court to deal with the matter. The superior court would therefore have jurisdiction to entertain an action for a declaration seeking this kind of relief but subject to the same discretion to refuse to exercise it. The court is justified in refusing to entertain the action if there is another procedure available in which more effective relief can be obtained or the court decides that the legislature intended that the other procedure should be followed.

As a general rule, the court should exercise its discretion to refuse to entertain declaratory relief when such relief is sought as a substitute for obtaining a ruling in a criminal case. This will be the apt characterization of any declaration which is sought with respect to relief that could be obtained from a trial court which has been ascertained. The same considerations apply before a trial court has been ascertained if the relief sought will determine some issue in pending criminal proceedings and does not have as a substantial purpose vindication of an independent civil right. In such circumstances, the mere fact that relief was sought in the guise of an action for a declaration would not confer a right of appeal from the refusal to entertain the action.

No issue was raised here in respect of the British Columbia Supreme Court's jurisdiction or in respect of the exercise of its discretion to entertain the appellants' application by way of originating petition. There was no trial court because no charge was laid. The attack on the validity of the statutory provision authorizing the search, while it would affect the admissibility at trial of the things seized, was also vital to the taxpayers' civil interests. The search warrant would not only authorize a trespass but also seizure of personal property. The petition for a declaration was therefore properly entertained under the British Columbia rules of procedure. Those rules which clearly applied at first instance should also apply to permit an appeal here. If Parliament did not intend to exclude a petition for a declaration under provincial rules, it cannot have intended to exclude an appeal pursuant to the same rules.

Cases Cited

By La Forest J.

Applied: Baron v. Canada, [1993] 1 S.C.R. 416; followed: Knox Contracting Ltd. v. Canada, [1990] 2 S.C.R. 338; referred to: R. v. Meltzer, [1989] 1 S.C.R. 1764; Mills v. The Queen, [1986] 1 S.C.R. 863; R. v. Seaboyer, [1991] 2 S.C.R. 577; R. v. McKinlay Transport Ltd., [1990] 1 S.C.R. 627; Attorney General of Canada v. Canadian National Transportation, Ltd., [1983] 2 S.C.R. 206; In re Storgoff, [1945] S.C.R. 526; Attorney-General for Alberta v. Atlas Lumber Co., [1941] S.C.R. 87; Attorney General of Quebec v. Attorney General of Canada, [1945] S.C.R. 600; Ministre du Revenu National v. Lafleur, [1964] S.C.R. 412, 46 D.L.R. (2d) 439; R. v. Wetmore, [1983] 2 S.C.R. 284; Goldman v. Hoffmann-La Roche Ltd. (1987), 35 C.C.C. (3d) 488; Adler v. Adler, [1966] 1 O.R. 732; Ontario (Attorney General) v. Pembina Exploration Canada Ltd., [1989] 1 S.C.R. 206; Welch v. The King, [1950] S.C.R. 412; Taylor v. Attorney-General (1837), 8 Sim. 413, 59 E.R. 164; Guaranty Trust Co. of New York v. Hannay & Co., [1915] 2 K.B. 536; Dyson v. Attorney-General, [1911] 1 K.B. 410; Attorney General of Canada v. Law Society of British Columbia, [1982] 2 S.C.R. 307; Terrasses Zarolega Inc. v. Régie des installations olympiques, [1981] 1 S.C.R. 94; Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 1 S.C.R. 236; Re Southam Inc. and The Queen (No. 1) (1983), 41 O.R. (2d) 113; Canadian Newspapers Co. v. Attorney-General for Canada (1985), 49 O.R. (2d) 557; Wilson v. The Queen, [1983] 2 S.C.R. 594; Argentina v. Mellino, [1987] 1 S.C.R. 536; Crevier v. Attorney General of Quebec, [1981] 2 S.C.R. 220; Canada Labour Relations Board v. Paul L'Anglais Inc., [1983] 1 S.C.R. 147.

By L'Heureux-Dubé J.

Followed: Knox Contracting Ltd. v. Canada, [1990] 2 S.C.R. 338.

By Sopinka J.

Applied: Baron v. Canada, [1993] 1 S.C.R. 416; distinguished: Knox Contracting Ltd. v. Canada, [1990] 2 S.C.R. 338; disapproved: Kohli v. Moase (1988), 55 D.L.R. (4th) 737; referred to: Goldman v. Hoffmann‑La Roche Ltd. (1987), 35 C.C.C. (3d) 488; Mills v. The Queen, [1986] 1 S.C.R. 863; R. v. Meltzer, [1989] 1 S.C.R. 1764; R. v. McKinlay Transport Ltd., [1990] 1 S.C.R. 627; Thomson Newspapers Ltd. v. Canada (Director of Investigation and Research, Restrictive Trade Practices Commission), [1990] 1 S.C.R. 425; R. v. Trimarchi (1987), 63 O.R. (2d) 515 (C.A.), leave to appeal refused, [1988] 1 S.C.R. xiv; Attorney-General for Alberta v. Atlas Lumber Co., [1941] S.C.R. 87; In re Storgoff, [1945] S.C.R. 526; Attorney General of Canada v. Law Society of British Columbia, [1982] 2 S.C.R. 307; Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342; R. v. Morgentaler, [1988] 1 S.C.R. 30; R. v. Morgentaler (1984), 16 C.C.C. (3d) 1; R. v. Smith, [1989] 2 S.C.R. 1120; City of Lethbridge v. Canadian Western Natural Gas, Light, Heat and Power Co., [1923] S.C.R. 652; Terrasses Zarolega Inc. v. Régie des installations olympiques, [1981] 1 S.C.R. 94; Adler v. Adler, [1966] 1 O.R. 732; Re Church of Scientology and The Queen (No. 6) (1987), 31 C.C.C. (3d) 449; Shumiatcher v. Attorney-General of Saskatchewan (No. 2) (1960), 34 C.R. 154; R. v. Sismey (1990), 55 C.C.C. (3d) 281; Wilson v. The Queen, [1983] 2 S.C.R. 594; R. v. Garofoli, [1990] 2 S.C.R. 1421; Ontario (Attorney General) v. Pembina Exploration Canada Ltd., [1989] 1 S.C.R. 206.

Statutes and Regulations Cited

British Columbia Rules of Court, Rule 5(22).

Canadian Charter of Rights and Freedoms, ss. 7, 8, 15, 24(1).

Constitution Act, 1867, ss. 91(3), (27), 96.

Constitution Act, 1982, s. 52.

Court of Appeal Act, S.B.C. 1982, c. 7, ss. 6(1)(a), 6.1(2) [ad. 1985, c. 51, s. 12].

Criminal Code, R.S.C., 1985, c. C‑46, ss. 487 [am. c. 27 (1st Supp.), s. 68], 490 [rep. & sub. idem, s. 73], 674, 813 [am. idem, s. 180; 1991, c. 43, s. 9 (item 12)].

Federal Court Act, R.S.C., 1985, c. F-7, s. 28 [am. c. 30 (2nd Supp.), s. 61; rep. & sub. 1990, c. 8, s. 8; am. 1992, c. 26, s. 17, c. 49, s. 128].

Income Tax Act, S.C. 1970‑71‑72, c. 63, ss. 231 "judge" [rep. & sub. 1986, c. 6, s. 121], 231.3 [idem], (1), (7), 239 [am. 1980-81-82-83, c. 158, s. 58, item 2(17)].

Interpretation Act, R.S.C., 1985, c. I‑21, s. 34(2).

Supreme Court Act, R.S.C., 1985, c. S-26, s. 40 [am. c. 34 (3rd Supp.), s. 3; 1990, c. 8, s. 37].

Authors Cited

Borchard, Edwin. Declaratory Judgments, 2nd ed. Cleveland: Banks‑Baldwin Law Publishing Co., 1941.

Hogg, Peter W. Constitutional Law of Canada, 3rd ed. (Supplemented), vol. 1. Scarborough, Ont.: Carswell, 1992 (loose-leaf).

Laskin, Bora. Laskin's Canadian Constitutional Law, 5th ed. By Neil Finkelstein. Toronto: Carswell, 1986.

Strayer, Barry L. The Canadian Constitution and the Courts, 3rd ed. Toronto: Butterworths, 1988.

Wade, Sir William. Administrative Law, 6th ed. Oxford: Clarendon Press, 1988.

Zamir, Itzhak. The Declaratory Judgment. London: Stevens & Sons Ltd., 1962.

APPEAL from a judgment of the British Columbia Court of Appeal (1989), 39 B.C.L.R. (2d) 1, [1990] 1 W.W.R. 97, 50 C.C.C. (3d) 201, 72 C.R. (3d) 196, 89 D.T.C. 5464, [1990] 1 C.T.C. 241, dismissing an appeal from a judgment of Lysyk J. (constitutional issues) (1988), 30 B.C.L.R. (2d) 342, [1989] 1 W.W.R. 508, 44 C.C.C. (3d) 79, 89 D.T.C. 5214, [1989] 1 C.T.C. 56, and from a judgment of McKenzie J. (non‑constitutional issues) (1987), 15 B.C.L.R. (2d) 200, 36 C.C.C. (3d) 304, following the issuance of a search warrant by McEachern C.J.S.C. Appeal allowed. Section 231.3 of the Income Tax Act infringes s. 8 of the Charter.

Guy Du Pont, Basile Angelopoulos and Ariane Bourque, for the appellants.

John R. Power, Q.C., Pierre Loiselle, Q.C., and Robert Frater, for the respondent.

Janet E. Minor and Tanya Lee, for the intervener the Attorney General for Ontario.

Yves Ouellette, Judith Kucharsky and Diane Bouchard, for the intervener the Attorney General of Quebec.

La Forest J.

The judgment of La Forest, L'Heureux-Dubé and Cory JJ. was delivered by

La Forest J. -- The substantive question to be resolved in this appeal, i.e., whether s. 231.3 of the Income Tax Act, as amended by S.C. 1986, c. 6, violates s. 8 of the Canadian Charter of Rights and Freedoms, has already been determined in favour of the appellants. In Baron v. Canada, [1993] 1 S.C.R. 416, it was held that the section does violate the Charter and so was of no force or effect. It is to be expected that the law enforcement and judicial authorities in the present case will act accordingly, whatever the result of this appeal may be. But, two broad procedural issues have very important implications for the workings of the enforcement provisions of the Income Tax Act and other federal statutes to which federal criminal procedures apply.

The first of these procedural issues concerns the extent to which procedures enacted by a province to govern civil procedure in the province can be engrafted on procedures of a criminal nature enacted by Parliament. Specifically, may provincial procedures be used to review the issuance of a search warrant under s. 231.3 of the Income Tax Act? Ultimately, the issue involves the constitutional power of the province to legislate respecting the matter.

The second of these issues is whether the inherent powers of a superior court can be used, by way of a declaratory judgment, to grant the appellants an appropriate remedy.

With respect to the first of the procedural issues just described, I do not think an appeal can be mounted against an order made in the course of proceedings under the Income Tax Act by resort to provincial procedures for appeals. Simply put, I do not believe that such an appeal is available because no appeal has been provided by the relevant legislative body, the federal Parliament, as was recently decided by this Court in Knox Contracting Ltd. v. Canada, [1990] 2 S.C.R. 338. And courts of appeal have no inherent rights to create appeals. Only superior court judges appointed under s. 96 of the Constitution Act, 1867 have inherent jurisdiction.

Turning to the second procedural issue, however, I am of the view that the appellants may pursue an action for a declaration in the provincial court. That being so, the ordinary rules of procedure in civil actions apply, including provisions for appeal.

Finally, I shall add some comments about the possibility of a better remedy in this type of case.

Facts

The facts and lower court judgments are summarized in the judgment of McKenzie J. in the non-constitutional review hearing (reported at McKenzie J. (non‑constitutional issues) (1987), 15 B.C.L.R. (2d) 200, 36 C.C.C. (3d) 304), and in the judgment of Justice Sopinka. For clarity, however, I shall repeat the facts most directly in issue.

Following an investigation, officers of Revenue Canada formed the belief that the appellants were evading or attempting to evade the payment of taxes by making false and deceptive statements in income tax returns for the years 1979 to 1984 contrary to s. 239 of the Income Tax Act. They, therefore, sought to obtain search warrants pursuant to s. 231.3 of the Act and such warrants were issued by Callaghan J. on October 22, 1986. These warrants were, however, subsequently quashed by Proudfoot J. of the same court. The items seized under these warrants had not been returned to the appellants, however, when McEachern C.J.S.C. (now C.J.B.C.) issued the search warrant challenged in this appeal for the seizure of the documents located in the Department's premises, subject to the conditions that every item seized would be sealed and the appellants would have thirty days to challenge the warrant.

Within that period, the appellants instituted proceedings by way of originating petition seeking an order quashing the warrant and the search and seizure, declaring s. 231.3 of no force or effect as violating ss. 7, 8 and 15 of the Charter, the return of the items seized along with the summaries, notes and outlines of these items, and prohibiting the Department from using any of this information and the destruction of any copies not returned. In seeking these remedies, the appellants resorted to a variegated mélange of procedures. They first invoked s. 231.3(7) of the Income Tax Act, which provides its own review of search warrants under which a judge may order the return of any item seized if the judge is satisfied that they are not needed for a criminal investigation or were not seized in accordance with the warrant or the section. They then invoked the provincial Rules of Court, s. 24 of the Charter as well as the inherent jurisdiction of the court. The constitutional and non-constitutional attacks were heard separately by Lysyk J. (reported at Lysyk J. (constitutional issues) (1988), 30 B.C.L.R. (2d) 342, [1989] 1 W.W.R. 508, 44 C.C.C. (3d) 79, [1989] 1 C.T.C. 56, 89 D.T.C. 5214) and McKenzie J., respectively. Both failed.

I note in passing that both in the procedures they invoked and the remedies they sought, the appellants make no distinction between those that may broadly be described as criminal, and those that may be described as civil in character. This admixture of federal and provincial procedure would seem to be at best irregular, and has been a source of considerable confusion. However, in their factum, the appellants advised us that no objection to the manner in which declaratory relief was sought was raised by the respondent or in the courts below. Under these circumstances, I think it best at this stage of the proceedings to deal with the whole matter without regard to these procedural irregularities.

The appeal to the British Columbia Court of Appeal was dismissed, the court holding that it had no jurisdiction to hear the appeal: British Columbia Court of Appeal (1989), 39 B.C.L.R. (2d) 1, [1990] 1 W.W.R. 97, 50 C.C.C. (3d) 201, 72 C.R. (3d) 196, [1990] 1 C.T.C. 241, 89 D.T.C. 5464. In doing so, the court categorized the whole of the proceedings as criminal in nature. It only briefly mentioned the request for a declaration, and appeared to treat it as an interlocutory matter in a criminal proceeding. I must say that, given the manner in which the procedures were engaged, that approach seems quite understandable. However, as mentioned earlier, it seems best at this stage of the proceedings to overlook the procedural irregularities and deal with the substantive issue of whether an action for a declaration may be pursued.

On the appeal to this Court, the issue was limited to the constitutional validity of the legislation. At this stage, there was again a generous intermixture of federal and provincial procedures. The appellants submitted that the Court of Appeal erred in holding that it had no jurisdiction to hear the appeal for the following reasons:

(a) the judgment of the Supreme Court of British Columbia was one made in the course of civil proceedings seeking a declaration and consequently was appealable as of right under s. 6 of the Court of Appeal Act, S.B.C. 1982, c. 7, as amended;

(b) the order was made in a taxation matter under s. 91(3) of the Constitution Act, 1867 and not in a criminal matter (s. 91(27)), and in the absence of specific legislation, was appealable under s. 6 of the Court of Appeal Act; and

(c) the judgment appealed from denied the appellants a remedy under s. 24(1) of the Charter and was also appealable under s. 6 of the Court of Appeal Act.

I should first note that if the appellants are successful in their claim that an action for a declaration can properly be entertained, then it becomes unnecessary to pursue their other arguments, for the action for a declaration was begun in the British Columbia Supreme Court and was thus subject to its ordinary rules of procedure, including any right to appeal from that action. The second issue, however, has serious implications for criminal procedure in provincial courts and involves a serious misunderstanding of this Court's recent decision in Knox Contracting, which it is important to correct. It also serves as a useful backdrop for a discussion of whether an action for a declaration properly lies, so I shall discuss it first. The third issue, regarding s. 24(1) of the Charter, seems to me to be covered by the considerations discussed under the second issue and has already been adequately dealt with by this Court. I shall, therefore, only refer to it tangentially.

Rights of Appeal Generally

Since the appellants' efforts were largely directed to finding a right of appeal in this case, I will first make some comments about the nature of rights of appeal generally.

Appeals are solely creatures of statute; see R. v. Meltzer, [1989] 1 S.C.R. 1764, at p. 1773. There is no inherent jurisdiction in any appeal court. Nowadays, however, this basic proposition tends at times to be forgotten. Appeals to appellate courts and to the Supreme Court of Canada have become so established and routine that there is a widespread expectation that there must be some way to appeal the decision of a court of first instance. But it remains true that there is no right of appeal on any matter unless provided for by the relevant legislature.

There are various policy reasons for enacting a procedure that limits rights of appeal. Sometimes the opportunity for more opinions does not serve the ends of justice. A trial court, for example, is in a better position to assess the factual record. Thus most criminal appeals are restricted to questions of law or mixed questions of law and fact. A further policy rationale, and one that is important to the case before this Court, is that there should not be unnecessary delay in the final disposition of proceedings, particularly proceedings of a criminal character. This is especially applicable to interlocutory matters which can ultimately be decided at trial; see Mills v. The Queen, [1986] 1 S.C.R. 863. On this point, McLachlin J., speaking for the majority in R. v. Seaboyer, [1991] 2 S.C.R. 577, noted that there was a valid policy concern to control the "plethora of interlocutory appeals and the delays which inevitably flow from them" (at p. 641). Such review should, in the Court's view, normally take place at trial. This McLachlin J. added, "will also permit a fuller view of the issue by the reviewing courts, which will have the benefit of a more complete picture of the evidence and the case" (at p. 641). Especially in the context of criminal procedure, there is value in not constantly interrupting the process, if the issues are all going to be heard eventually at trial in any event. As well, there is the simple value of a final decision to resolve a dispute without the costs, in time, effort and money, of further hearings.

For most civil matters, the provincial legislatures have created a right of appeal. In British Columbia, that right is found in the Court of Appeal Act. Section 6 sets forth the circumstances where appeals are available. The first issue in this case is whether that procedure applies to a penal proceeding falling within the exclusive jurisdiction of the federal Parliament, specifically a proceeding taken in respect of an alleged offence under the Income Tax Act.

The Procedure Under s. 231.3 of the Income Tax Act

The availability of appeal is one of the questions determined by the choice of procedure created in the particular statute involved. To understand the nature of the procedure with which we are here concerned, it is important, then, to look closely at the workings of the Income Tax Act. By and large as Wilson J. noted in R. v. McKinlay Transport Ltd., [1990] 1 S.C.R. 627, at p. 636, "the system is a self-reporting and self-assessing one which depends upon the honesty and integrity of the taxpayers for its success". But Wilson J. (at p. 637) was quick to add that it would be naive to suppose that this system could work fairly without the assistance of an effective enforcement mechanism. To that end, the Act creates a number of offences, some very serious, to ensure compliance with the Act. Among these is that set forth in s. 239(1) of the Act, in relation to which the search warrant was issued in this case. It reads:

239. (1) Every person who has

(a) made, or participated in, assented to or acquiesced in the making of, false or deceptive statements in a return, certificate, statement or answer filed or made as required by or under this Act or a regulation,

(b) to evade payment of a tax imposed by this Act, destroyed, altered, mutilated, secreted or otherwise disposed of the records or books of account of a taxpayer,

(c) made, or assented to or acquiesced in the making of, false or deceptive entries, or omitted, or assented to or acquiesced in the omission, to enter a material particular, in records or books of account of a taxpayer,

(d) wilfully, in any manner, evaded or attempted to evade, compliance with this Act or payment of taxes imposed by this Act, or

(e) conspired with any person to commit an offence described by paragraphs (a) to (d),

is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to

(f) a fine of not less than 25% and not more than double the amount of the tax that was sought to be evaded, or

(g) both the fine described in paragraph (f) and imprisonment for a term not exceeding 2 years.

This offence, I say in passing, seems to me to be constitutionally supportable both under Parliament's criminal law power and its taxing power; see Constitution Act, 1867, s. 91(27) and s. 91(3), respectively.

Such offences, of course, require a procedural scheme for their enforcement. As in the case of other federal statutes containing penal provisions, the procedure selected by Parliament is that set forth in the Criminal Code, R.S.C., 1985, c. C-46. Section 34(2) of the Interpretation Act, R.S.C., 1985, c. I-21, provides that the provisions of the Criminal Code are to apply to indictable and summary conviction offences created by Parliament unless the statute creating the offence provides otherwise. The Criminal Code, of course, provides a comprehensive scheme of criminal procedure. Notably, though, it provides only limited rights of appeal. Section 674 stipulates that for indictable offences, the right of appeal is limited to those authorized under Parts XXI and XXVI of the Code. For summary conviction offences, the appeals are those provided under Part XXVII, s. 813. No right of appeal from an order issuing a search warrant is provided in the Criminal Code. So far as search warrants under the Income Tax Act are concerned, however, Parliament has, as s. 34(2) of the Interpretation Act contemplates, enacted a special provision to meet the specific requirements of that Act. That provision, s. 231.3, is central to this case. Of special relevance are ss. 231.3(1) and (7) which read as follows:

231.3 (1) A judge may, on ex parte application by the Minister, issue a warrant in writing authorizing any person named therein to enter and search any building, receptacle or place for any document or thing that may afford evidence as to the commission of an offence under this Act and to seize and, as soon as practicable, bring the document or thing before, or make a report in respect thereof to, the judge or, where the judge is unable to act, another judge of the same court to be dealt with by the judge in accordance with this section.

(7) Where any document or thing seized under subsection (1) or (5) is brought before a judge or a report in respect thereof is made to a judge, the judge may, of his own motion or on summary application by a person with an interest in the document or thing on three clear days notice of application to the Deputy Attorney General of Canada, order that the document or thing be returned to the person from whom it was seized or the person who is otherwise legally entitled thereto if the judge is satisfied that the document or thing

(a) will not be required for an investigation or a criminal proceeding; or

(b) was not seized in accordance with the warrant or this section.

Section 231.3, not unnaturally, bears a considerable resemblance to its counterpart in the Criminal Code. Noteworthy is that, like it, it provides no appeal other than the review process set forth in s. 231.3(7). I note, however, that s. 231 defines "judge" to mean "a judge of a superior court having jurisdiction in the province where the matter arises or a judge of the Federal Court", a fact upon which considerable reliance was placed in seeking to find a right of appeal, an issue I shall discuss later.

As I see it, the characterization of the foregoing procedure has already been settled by this Court in Knox Contracting, supra. In that case, this Court examined and characterized the search provisions of the Income Tax Act for the purposes of determining whether the court of appeal there had jurisdiction to hear an appeal on a search warrant. Cory J., Wilson and Gonthier JJ. concurring, ruled that the s. 231.3 search procedures under the Income Tax Act were enacted pursuant to federal jurisdiction over criminal law and procedure under s. 91(27) of the Constitution Act, 1867. He considered the search provisions to be the investigative arm of s. 239 which, in his view, were clearly criminal law because they punished deliberate acts, protected the public interest, and contained severe penalties. Section 231.3 was held to be the investigative arm of the criminal law because it was unrealistic "to divorce s. 231.3 from the offences sought to be uncovered by the search" (p. 356). He concluded that the power of the provincial legislatures under s. 92(14) of the Constitution Act, 1867 does not extend to jurisdiction over the conduct of criminal prosecutions, citing Attorney General of Canada v. Canadian National Transportation, Ltd., [1983] 2 S.C.R. 206. Clearly on this view, the procedure for this case must be the procedure created by the federal Parliament.

Sopinka J., L'Heureux-Dubé and McLachlin JJ. concurring, disagreed with Cory J.'s position. He found that the search provisions could be justified under both the federal criminal law power (s. 91(27) of the Constitution Act, 1867) and the federal taxing power (s. 91(3) of the Constitution Act, 1867). He then held that the normal provincial procedure continues to operate, including a right of appeal, unless a contrary intention is evidenced.

It was left to me to break the deadlock in Knox Contracting. I agreed with the conclusion reached by Cory J., but gave separate reasons, though these do not take issue with what he had to say. In the result, then, a majority of this Court held that there was no appeal from a search warrant issued under the Income Tax Act, and that a right of appeal provided by provincial procedure has no application. These, of course, are the very questions now placed before this Court.

In my brief reasons, I first observed that I agreed with Sopinka J.'s approach to the juristic character of the relevant provisions. In other words, I agreed with him that the relevant provisions were justifiable under both the criminal law power and the taxing power. If, as the appellants suggest, there is any significance to the fact that a provision is criminal law, I fail to understand why it should make a difference for present purposes that it is also justifiable under the taxing power.

I did not really find it necessary to get into this in Knox Contracting, for, in my view, Parliament had in the exercise of its exclusive powers provided a comprehensive procedure for the enforcement of Income Tax offences. I thus put it at pp. 356-57:

In choosing a criminal sanction and applying all the provisions of the Criminal Code "except to the extent that the enactment otherwise provides" (see Interpretation Act, R.S.C., 1985, c. I-21, s. 34(2)), Parliament, it seems to me, has shown a disposition to adopt the ordinary procedures of the criminal law for their enforcement, subject to any variations spelled out in the Income Tax Act, S.C. 1970-71-72, c. 63. [Emphasis in original.]

I then concluded by saying that I found it unnecessary to consider whether a province could in other circumstances deal with procedure respecting a penal provision. What I had in mind, and all I had in mind, was the (I think unlikely) situation that could arise if Parliament provided an incomplete scheme in some statute, as sometimes happens in the civil field.

In Knox Contracting, then, I came to the same conclusion as Cory J., that there was no appeal. While I believed that the provisions could be justified under both s. 91(27) and s. 91(3), I concluded, at pp. 356-57, that Parliament by enacting s. 34(2) of the Interpretation Act has shown a disposition to adopt the ordinary procedures of the criminal law for their enforcement subject to any variations spelled out in the Income Tax Act. In the result, then, a majority of this Court held that there was no appeal from a search warrant under the Income Tax Act, and that the general right of appeal provided for under provincial law had no application.

In Knox Contracting, I did not elaborate further on the reasons for my conclusion. I simply found it self-evident that Parliament, in the exercise of a power, be it criminal or taxation or any other head of power, may if it wishes provide procedures for the enforcement of the measures it has enacted. That is a matter within its exclusive competence. This proposition is supported by long-standing authority in this Court. One need go no further than the well-known case of In re Storgoff, [1945] S.C.R. 526, at pp. 563 (Hudson J.), 579 and 583 (Rand J.), 588 (Kellock J.), 591 and 594 (Estey J.). Cory J. said the same thing in Knox Contracting, supra, at pp. 351-52. This approach is not limited to criminal law. It is a general principle applying to all areas of federal jurisdiction as can be seen from the following remarks of Rinfret J. in Attorney-General for Alberta v. Atlas Lumber Co., [1941] S.C.R. 87, at p. 100:

. . . it has long since been decided that, with respect to matters coming within the enumerated heads of sec. 91, the Parliament of Canada may give jurisdiction to provincial courts and regulate proceedings in such courts to the fullest extent. [Emphasis added.]

Similarly, Taschereau J. in Attorney General of Quebec v. Attorney General of Canada, [1945] S.C.R. 600, had this to say, at p. 602:

It is also well established that, although a court may be provincially organized and maintained, its jurisdiction and the procedure to be followed for the application of laws enacted by the Parliament of Canada, in relation to matters confided to that Parliament, are within its exclusive jurisdiction. That applies to criminal law and procedure in criminal matters which by subsection 27 of section 91 of the B.N.A. Act are subject to the legislative powers of the Dominion.

The same approach was later followed in the unanimous decision of this Court in respect of an offence, significantly for our purposes, under the Income Tax Act in Ministre du Revenu National v. Lafleur, [1964] S.C.R. 412, 46 D.L.R. (2d) 439. And in Attorney General of Canada v. Canadian National Transportation, Ltd., [1983] 2 S.C.R. 206, and R. v. Wetmore, [1983] 2 S.C.R. 284, this Court held that Parliament is competent to legislate respecting the enforcement of all federal offences, regardless of the federal head of power under which the substantive offences were enacted.

I do not doubt that Parliament can, if it wishes, adopt provincial procedures for that purpose, and, such an adoption will be assumed, where it is necessary to give effect to a right, for example, when it confers a civil right without providing a forum or procedure for its enforcement. But when it selects a specific and integrated procedure, as it has done here, then there is no room for the operation of provincial law in relation to that procedure. That again is demonstrated by Storgoff, where the Court refused to countenance the use of the writ of habeas corpus in the manner provided by provincial law, even though the right to habeas corpus may be looked upon as a civil right (see, for example, p. 571). This reasoning applies a fortiori to appeals. This appears perhaps most clearly in the reasons of Hudson J., at p. 563:

It would seem to be logical that the legislature which has exclusive power to enact criminal law and prescribe procedure in criminal matters should also have the sole right to prescribe the means and methods by which the validity of such procedure should be tested.

Parliament has accepted this view and ever since Confederation exercised the right to make provision for appeals in criminal matters and prescribed the conditions under which such appeals were permitted and the courts to which they might be taken.

A writ of habeas corpus differs in many respects from an appeal but, in cases like the present, it is just another means of bringing in question the validity of proceedings in criminal matters. It would appear strange indeed if Parliament could provide for and control appeals but not interference with criminal administration by way of habeas corpus.

See also at pp. 575 (Taschereau J.), 579 and 582 (Rand J.).

What, of course, motivated the judges in that case was the need for a uniform and integrated procedure; see pp. 566 (Hudson J.) and 584 (Rand J.). It was this uniform and integrated procedure that was selected by Parliament for the enforcement of the Income Tax Act. Indeed the need to look at the entire procedure as an integrated whole is most strongly stated in Lafleur, supra, which as I noted was a case involving the Income Tax Act. See esp. pp. 443, 444 and 446 D.L.R., where Fauteux J. (speaking for the Court) refers to these provisions, respectively, as [translation] "uniform", "systematically welded into a single body" and "an integrated whole".

The integrated procedure I have described is not confined to the period following the charge. Thus, Meltzer, supra, involved an authorization to intercept private communications--an electronic search--and it was held that no right of appeal existed because none had been provided as part of the procedure provided by the federal Parliament. The power to issue an authorization appears in the Criminal Code, but there is no magic in this. In Goldman v. Hoffmann-La Roche Ltd. (1987), 35 C.C.C. (3d) 488 (Ont. C.A.), it was held that there was no appeal in the parallel situation of a search warrant issued under the Competition Act, R.S.C. 1970, c. C-23, which is sustainable under both the trade and commerce power and the criminal law power.

I fail to see how it detracts from this integrated scheme that it is the Income Tax Act itself which provides a provision respecting searches that may afford evidence of an offence. That provision is rather similar to its counterpart in the Criminal Code (s. 487) and was obviously intended to meet the particular exigencies relating to income tax offences. It forms part of the uniform and integrated procedure for the investigation and prosecution of offences under the Act. I am quite unable to accept the appellants' thesis that the provinces share jurisdiction with the federal Parliament to regulate procedure over matters exclusively vested in Parliament by the Constitution. This is a far cry from the principle they cite that "where no other procedure is prescribed, a litigant suing on a federal matter in a provincial court takes the procedure of that court as he finds it" (emphasis added); see Laskin's Canadian Constitutional Law (5th ed. 1986), vol. 1, at p. 185. There may be other cases where Parliament, because it has created a substantive right that is clearly dependent for its functioning on the rules governing general civil procedure in the province, may be assumed to have adopted necessary parts of such procedure, or to adapt the words of Laskin J.A. in Adler v. Adler, [1966] 1 O.R. 732 (C.A.), at p. 735, where substantive law within federal jurisdiction feeds the jurisdiction of the provincial court by giving it material upon which to operate. Ontario (Attorney General) v. Pembina Exploration Canada Ltd., [1989] 1 S.C.R. 206, is another recent example; there s. 22 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, expressly provided for concurrent jurisdiction. But no such assumption can be made in the present case. Here a comprehensive procedure is prescribed by the legislative body having power over the matter.

The admixture of provincial civil procedure with criminal procedure could, I fear, result in an unpredictable mish-mash where, in applying federal procedural law, one would forever be looking over one's shoulder to see what procedure the provinces have adopted (and this may differ from province to province) to see if there was something there that one judge or another would like to add if he or she found the federal law inadequate. And I see no reason in principle why appeals could not be read in for other interlocutory proceedings, or indeed why other provincial rules of procedure might not be adopted, as was attempted in Lafleur. That, barring federal adoption, is in my view constitutionally unacceptable. It is certainly impractical. In dealing with procedure, and particularly criminal procedure, it is important to know what one should do next. That is why, no doubt, Parliament adopted a comprehensive procedure under the Criminal Code, and that is why it adopted that procedure for the enforcement of penal provisions in other statutes, including the Income Tax Act. The nature of this procedure is well stated by Fauteux J. in Lafleur, supra, at pp. 443-44 D.L.R.:

[translation] It is obvious, however, that, particularly in the area of procedure, the criminal law existing in 1867 in the various territorial jurisdictions later united into what is now the one Canadian territorial jurisdiction of Confederation has evolved considerably during this lengthy period of history. This evolution, moving towards the formation of a uniform criminal law for Canada, has been accomplished through changes resulting expressly or by implication from the various legislative enactments effected by Parliament over the years. This uniform criminal law, achieved not by mere consolidations, but by two codifications, appears today in that grouping of legislative provisions which Parliament has systematically welded into a single body -- the Criminal Code of 1953-54 -- which is the product of additions, deletions and amendments as well as changes in structure. The relative interdependence of the provisions in diversified parts of the Criminal Code has already been noted in Welch v. The King . . . Welch v. The King, [1950] S.C.R. 412 at p. 427, where, referring to the powers conferred by s. 873 on the Attorney-General, this Court said:

Like many others in the Code, they remain subject to qualifications and restrictions implicitly and necessarily flowing from other provisions in the same Act.

The same considerations, in my view, apply to qualifications and restrictions made, as contemplated in s. 34(2) of the Interpretation Act, by other Acts for which the procedure has been adopted. One would in any event be led to this conclusion by the inherent nature of appeals. In Welch v. The King, [1950] S.C.R. 412, Fauteux J., speaking for the majority, thus described the nature of appeals, at p. 428:

The right of appeal is an exceptional right. That all the substantive and procedural provisions relating to it must be regarded as exhaustive and exclusive, need not be expressly stated in the statute. That necessarily flows from the exceptional nature of the right.

More recently, McIntyre J. in Meltzer, supra, at pp. 1769-70, made it clear (citing with approval a passage from Laycraft C.J.A. in R. v. Cass (1985), 71 A.R. 248) that a provincial statute or rule of court relating to civil matters that purported to govern an appeal from a criminal law matter would be ultra vires.

Nor are Canadian courts alone in resisting an admixture of civil and criminal procedure. The British courts have done the same, a fact that is all the more significant because Great Britain is a unitary state and because criminal procedure in that country is in no way limited to situations that would in Canada be considered criminal for constitutional purposes (the British approach is amply discussed in Storgoff). The practical considerations to which I have referred earlier underlie this approach.

It is certainly a matter of concern that there appears to be no general procedure for quashing search warrants issued under the Income Tax Act, but assuming that is so, I do not think that makes resort to the provincial procedure constitutionally permissible. The courts have, it is true, at times turned to civil procedure to assist in formulating rules in criminal matters, but as McIntyre J. emphasized in Meltzer, supra, at p. 1770, "[t]he fact that a procedural step deriving from civil practice was employed to meet this problem cannot be said to have converted the matter into anything approaching a civil appeal." In short, the rule discussed in Meltzer was simply a rule of criminal procedure, though it was no doubt inspired by its counterpart in civil procedure. I must confess to finding it strange that this Court would find it necessary to incorporate provincial civil procedure on appeals into federal criminal procedure to remedy the alleged defect to protect a person who is the object of a search under an income tax statute when it has shown itself to be unwilling to make such an implication in relation to habeas corpus, which not only has a civil component but involves the liberty of the subject. It also overlooks the policy referred to in Seaboyer, supra, against importing appeals into interlocutory matters. As Cory J. put it in Knox Contracting, supra, at pp. 353-54:

In summary, the issuance of search warrants is an interlocutory procedure. Appeals from interlocutory orders by the parties in criminal proceedings must be based upon a statutory provision. No such statutory provision exists and thus no appeal lies to the Court of Appeal. It is appropriate that the Code provides no avenue for appeal from these procedures, as such appeals are neither desirable nor necessary and should not, as a general rule, be encouraged. See Mills v. The Queen, supra, and R. v. Meltzer, [1989] 1 S.C.R. 1764.

Matters of this kind are best dealt with at trial. Any other course invites delay.

I should observe that there are a number of pre-trial remedies available to a person who has been the subject of a search. I have earlier referred to s. 231.3(7) which provides for review. Under this provision, a judge may order the return of anything seized that is not required for an investigation or a criminal prosecution or was not seized in accordance with the warrant or s. 231.3. Cory J. refers to other possibilities in his reasons in Knox Contracting in the following passage, at p. 353:

This does not mean that an accused is left without remedies. Wide powers are provided in the Criminal Code for a person from whom articles are seized pursuant to a search warrant to make a speedy application for their return. See Criminal Code, R.S.C., 1985, c. C-46, s. 490(7), (8), (10) and (17). If the matter should proceed to trial then of course the accused may attack the search warrant in any way he considers appropriate, including the allegation that it infringes the provisions of s. 8 of the Canadian Charter of Rights and Freedoms. If, for any reason, the matter should not go to trial, a party may still seek civil damages for compensation. No injustice arises from the absence of a right to appeal the order issuing the search warrants.

The "Anomaly"

I will now comment on the "anomaly" that different rights of appeal may exist depending on whether a search warrant is sought before a judge of a provincial superior court or a judge of the Federal Court.

But, before arriving at any conclusion about what a court should do in the face of this alleged anomaly, one should examine the relevant policies behind the legislation. I should first of all say that the principal forum for the operation of criminal procedure is, of course, in the provincial court system, and there no appeal is provided. The likelihood is that Parliament did not really advert to the different procedures in the two courts. The right of appeal to the Federal Court of Appeal was not tailored to the needs of the criminal justice process, as it was in respect of criminal procedure in the provincial courts. Rather the provision for appeal in the Federal Court is a general one intended to meet the needs of the ordinary jurisdiction of that court, the major function of which is to deal with questions of a civil and administrative character and other matters peculiarly of federal concern, rather than the criminal justice process where different considerations may come into play. In short, the anomaly may lie in the assumption that a right of appeal to the Federal Court of Appeal exists. For there are strong reasons of policy for not providing appeals from interlocutory decisions in criminal proceedings generally. While I quite understand the temptation to read in a right of appeal in this case for the sake of consistency, I am deeply concerned about the general implications of courts of appeal reading in rights of appeals and other procedures into criminal proceedings. I might also note that there may still be an issue of the appropriate role for appellate review of the issue of search warrants by the Federal Court of Appeal pursuant to s. 28 of the Federal Court Act, R.S.C., 1985, c. F-7. It would amount to an unusual venture of the Federal Court of Appeal into the realm of what is largely criminal procedure.

There is another factor that must be kept in mind. I am not, as I shall indicate later, completely certain that the judge issuing the warrant was intended to entertain a constitutional question of the kind raised here. If so, there could be no appeal from that question and, in any event, since the issues with which the judge deals in performing his functions are of a factual nature, there is little, if any, room for an appeal at all.

In view of all these unanswered questions, it would be unsafe in the absence of argument to simply assume that the general right of appeal set forth in the Federal Court Act applies to a proceeding provided in a separate statute that is a mere adjunct to a general system of criminal procedure where appeals of this nature are not provided. If one reads all the relevant legislative provisions harmoniously in accordance with their underlying purpose, it is certainly arguable that Parliament did not intend by this minor grant of jurisdiction to the Federal Court (in what is for it an untypical jurisdiction) to have had in contemplation the general right of appeal devised for quite different types of proceedings. There may, in other words, be no anomaly at all.

I should add that there is nothing in Baron v. Canada, supra, that touches the matter. That case involved an action for a declaration which was clearly subject to appeal. At all events, no issue of jurisdiction was raised in that case.

The Declaration of Unconstitutionality

Since I agree with my colleague that the appellants should be permitted to pursue their action for a declaration, I can be brief.

The action for a declaration ultimately rests in the inherent powers of the Court of Chancery (see Taylor v. Attorney-General (1837), 8 Sim. 413, 59 E.R. 164; and Guaranty Trust Co. of New York v. Hannay & Co., [1915] 2 K.B. 536, at p. 538), but the courts were for many years very wary about exercising it; see I. Zamir, The Declaratory Judgment (1962), at pp. 7-9. Two judicial policies seemed to effectively prevent the use of the declaration: first, the discretion to refuse the declaration where other remedies were available, and second, the refusal to grant the declaration where no other relief was sought. Statutory reform provided the initial impetus to free the use of the declaration by removing the second barrier. In England, statutory changes culminated in Order 25, rule 5, adopted in 1883 which provided that a declaration could be given even when no other relief was sought. Statutory provisions to the same effect now exist in all Canadian jurisdictions; in British Columbia, it appears in the Rules of Court, r. 5(22). Partly in response to the statutory changes, the courts came to realize the value of the declaration as a remedy in the modern law; see Zamir, supra, at pp. 4-6. The landmark decision of Dyson v. Attorney-General, [1911] 1 K.B. 410, signalled the awareness in the courts of the utility of the declaration as a remedy for contesting Crown actions. This proved of great value in Canada as a means of determining whether laws fell within federal or provincial powers; see Attorney General of Canada v. Law Society of British Columbia, [1982] 2 S.C.R. 307, and it seems quite natural that it should also be used as a means of testing the conformity of legislation with the Charter in appropriate cases.

In my view, the action can appropriately be used here. Since the declaration by its nature merely states the law without changing anything (see B. L. Strayer, The Canadian Constitution and the Courts (3rd ed. 1988)), it does not, in essence, constitute a review of a decision taken in a criminal proceeding.

It by no means follows, however, that the declaratory judgment should be widely used as a separate collateral procedure to, in effect, create an automatic right of appeal where Parliament has, for sound policy reasons, refused to do so. It must be remembered that the inherent power of the courts to declare laws invalid is a discretionary one, and that discretion must be used on a proper basis. If the power is routinely used whenever any particular step in a criminal proceeding is thought to be unconstitutional, it would result in bringing through the back door all the problems Parliament sought to avoid by restricting appeals.

The policy concern against allowing declarations, even of unconstitutionality, as a separate and overriding procedure is that they will, in many cases, result in undesirable procedural overlap and delay. As long as a reasonably effective procedure exists for the consideration of constitutional challenges, I fail to see why another procedure must be provided. This is consistent with the discretion to grant the declaratory remedy in its traditional use (see Zamir, supra, c. 6; Terrasses Zarolega Inc. v. Régie des installations olympiques, [1981] 1 S.C.R. 94). It is also consistent with the practice in respect of public interest standing declarations, where the courts are concerned that there be no other reasonable and effective way to bring the issue before the courts; see Canadian Council of Churches v. Canada (Minister of Employment and Immigration), [1992] 1 S.C.R. 236.

The question then becomes whether there is a reasonably effective procedure. In the present state of the law, I do not think there is. While s. 231.3(7) and other procedures afford a measure of protection to the appellants, they do not fully respond to the concern that there is no adequate statutory provision for constitutional review of a search warrant. This may be contrasted with the situation after an accused has been charged. When the trial process begins, there will be a "competent court", the trial judge, to deal with Charter applications and, where necessary, special problems can be dealt with by interventions under s. 24(1) by another superior court judge; see Rahey, supra, Smith, supra. At that stage, there must be few circumstances indeed when an accused should be permitted to pursue an action for a declaration, though it has proved useful as a tool by persons other than the accused whose constitutional rights are directly affected by a decision taken in the course of criminal proceedings; see Re Southam Inc. and The Queen (No. 1) (1983), 41 O.R. (2d) 113 (C.A.), Canadian Newspapers Co. v. Attorney-General for Canada (1985), 49 O.R. (2d) 557 (C.A.).

It is different at the pre-trial stage. Where a search is being conducted, as in this case, there is no trial judge and unlike the situation after the charge, no express Charter guarantee that proceedings must take place within a reasonable time. An investigation can go on indefinitely in continuing breach (if the search provisions are unconstitutional) of the appellants' Charter rights for an extensive period. The property of the individual subject to the search may remain in the custody of the state for a protracted period in violation of Charter norms.

In ordinary criminal cases, the problem presented in this case does not arise. Power to issue search warrants under s. 487 of the Criminal Code is vested in a justice of the peace and, accordingly, certiorari may issue from a superior judge to test the legality of the procedure, and if found invalid, the warrant may be quashed and any items seized must be returned. The difficulty here is that the power to issue a search warrant under the Income Tax Act is vested in a superior court judge and at common law a decision of a superior court judge cannot be the subject of collateral attack.

The judge issuing the warrant is not in a position to review for constitutionality at an ex parte hearing, and I rather doubt that the judge, or another judge acting for him, could do so on a Wilson type review: Wilson v. The Queen, [1983] 2 S.C.R. 594. Neither Wilson nor Meltzer is clear on this point.

The limited function of the judge and the manner in which it must be performed, along possibly with the fact that it is the kind of function ordinarily assigned to a justice, may invite this construction. I note that this Court has held that, absent legislation, an extradition judge, who performs a function similar to a justice at a preliminary hearing, has no jurisdiction to entertain Charter challenges: Argentina v. Mellino, [1987] 1 S.C.R. 536. The fact that an extradition judge is usually a superior court judge does not alter the matter. But even assuming that the judge is competent to review the warrant and the empowering legislation on the basis of constitutionality, I do not think that would be a sufficiently effective remedy to bar resort to an action for a declaration. I say this because the judge's decision could not be collaterally attacked at trial since it would be res judicata for a trial judge and could not then be raised in appeals from the initial decision (see Meltzer). The end result, then, is that the appellants could well be convicted on the basis of an unconstitutional statute, without opportunity of review, and so be deprived of the full measure of constitutional protection that is afforded in a prosecution under the Criminal Code for even the vilest offence. The appellants would thus be caught between allowing the Crown to retain their property indefinitely or lose the opportunity of having the impugned provision tested on appeal in the ordinary way. The same scenario would follow by resorting to s. 24(1) of the Charter; see Mills, supra, Meltzer, supra. Since the decision of the judge would appear to be a final one, it would, I should think, be open to appeal to this Court under s. 40 of the Supreme Court Act, R.S.C., 1985, c. S-26 (see Argentina v. Mellino, supra, at pp. 545-57), but such an appeal, of course, can only be obtained with leave.

My colleague, Sopinka J., feels there must be a remedy. I share that sentiment. Like him, I think it appropriate to permit the appellants to pursue an action for a declaration. Since the action for a declaration is a discretionary remedy, however, I think it would be proper for a judge, in the exercise of his or her discretion, to consider the specific circumstances presented and to refuse to entertain the action if satisfied that criminal proceedings against the accused would be initiated within a reasonable time. This would avoid the overlap and delay that have been among the major informing considerations in devising the rules for the governance of the discretion to allow or not to allow an action for a declaration to proceed.

I conclude that a declaration should issue declaring s. 231.3 of the Income Tax Act and the search warrant issued thereunder to be of no force or effect. While the officials can be relied on to return the goods in light of this declaration, I would further order the return of the goods and copies as consequential relief, in order to make effective this declaration; see Attorney General of Canada v. Law Society of British Columbia, [1982] 2 S.C.R. 307, at pp. 329-31.

Another Remedy

I stated earlier that, at this stage of the proceedings, an action for a declaration was appropriate and just remedy. I leave open the possibility, however, that certiorari might have issued. That would leave little room for the exercise of the discretion to permit a declaratory action. I realize, of course, that at common law certiorari does not lie against a decision of a superior court judge, and that there are very sound reasons for this rule. But, it must not be forgotten that what is alleged here is a breach of a constitutional right which may call for an adaptation of the inherent powers of a superior court to make the procedure conform to constitutional norms. The courts are the guardians of the Constitution and they must have the powers to forge the instruments necessary to maintain the integrity of the Constitution and to protect the rights it guarantees. In Mills, supra, at pp. 971-72, I expressed my general approach to questions like these in words that are apt here:

It should be obvious from the foregoing remarks that I am sympathetic to the view that Charter remedies should, in general, be accorded within the normal procedural context in which an issue arises. I do not believe s. 24 of the Charter requires the wholesale invention of a parallel system for the administration of Charter rights over and above the machinery already available for the administration of justice.

Nonetheless, it is the Charter that governs, and if the ordinary procedures fail to meet the requirements of the Charter fully, then a means must be found to give it life. In Ashby v. White (1703), 2 Ld. Raym. 938, 92 E.R. 126, at p. 136, Holt C.J. instructs us that "it is a vain thing to imagine a right without a remedy". The problem does not directly arise here, of course, because the Charter by s. 24(1) provides that a court of competent jurisdiction may provide such remedy as it considers appropriate and just in the circumstances. But there must at all times be a court to enforce this remedy. The notion that the remedy must fail or be ineffective for lack of a competent court within the confines of the ordinary procedures for the administration of criminal justice can no more be imagined than can the notion of a right without a remedy.

Even before the advent of the Charter, this Court had asserted some constitutional limits to the power of legislative bodies to insulate from judicial review decision makers performing certain functions under statute; see Crevier v. Attorney General of Quebec, [1981] 2 S.C.R. 220, and Canada Labour Relations Board v. Paul L'Anglais Inc., [1983] 1 S.C.R. 147. In these Charter days, this may call for a consideration of the extent to which proceedings that involve the liberty and security of the individual can be insulated from prompt and effective review for constitutionality by the device of assigning to a superior court judge functions which for centuries have been performed by inferior court judges subject to judicial review and which, even today, are still performed by inferior court judges in the case of the most serious criminal offences. As I earlier mentioned, the judge issuing the warrant is not really in a position to review for constitutionality at an ex parte hearing, and assuming that judge is competent to review the warrant and the empowering legislation for constitutionality later, the effect, since the judge's decision is unreviewable, is to deprive the individual of that full measure of constitutional protection which is afforded in a prosecution under the Criminal Code to even the vilest criminal.

A court must look at least askance at such a statutory scheme. I note parenthetically that there is at least one other instance where the actions of a superior court judge are made subject to judicial review. In extradition, the decision of the extradition judge, who is usually a superior court judge, is subject to review by habeas corpus. Moreover, this Court has held that, absent legislation, the reviewing judge, and not the extradition judge, is the court of competent jurisdiction for the purposes of s. 24(1) of the Charter; see Argentina v. Mellino, supra.

I add one final word. I mentioned earlier that, at this stage of the proceedings, an action for a declaration was appropriate. It must be said, however, that certiorari generally appears to be a more suitable instrument for reviewing the constitutionality of the action. The procedure has been honed to that use for centuries. Those who operate in the criminal law area fully understand its workings. It is a more expeditious instrument, and its discretionary character is well known and adjustable to time and circumstance. It has the advantage, too, of being subject to a system of appeals carefully crafted and timed to meet the needs of the criminal justice system. I add that in view of Parliament's obvious intention to insulate review the discretion should be exercised in this kind of case subject to similar informing considerations as those discussed in relation to declaratory relief to avoid overlap and delay in proceedings. If this approach is adopted, there would appear to be little use for the declaratory action in this context.

Disposition

For the above reasons, I would, like my colleague, allow the appeal and set aside the judgments of the British Columbia Court of Appeal and the British Columbia Supreme Court, and would answer the constitutional question as follows:

Question:Whether s. 231.3 of the Income Tax Act, S.C. 1970-71-72, c. 63, as amended by S.C. 1986, c. 6, limits the rights and freedoms guaranteed by ss. 7 and 8 of the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B of the Canada Act 1982 (U.K.), 1982, c. 11, and is consequently of no force or effect pursuant to s. 52 of the Constitution Act, 1982, Schedule B, Canada Act 1982, c. 11 (U.K.).

Answer:Yes, in so far as s. 8 is concerned. It is not necessary to consider s. 7.

A declaration should issue declaring s. 231.3 of the Income Tax Act and the search warrant issued against the appellants on February 27, 1993 are of no force or effect. In addition, an order should issue for the return of all documents, books, records, papers and things seized together with any copies or notes that have been made thereof. The appellants are entitled to their costs throughout.

L'Heureux-Dubé J.

The following are the reasons delivered by

L'Heureux-Dubé J. -- Although I was part of the minority in Knox Contracting Ltd. v. Canada, [1990] 2 S.C.R. 338, I feel bound by the majority decision in that case and, accordingly, join Justice La Forest J.'s reasons in the present case.

Sopinka J.

The reasons of Sopinka, McLachlin and Iacobucci JJ. were delivered by

Sopinka J. --

I. Introduction

This is the second of two decisions which concern the validity of search warrants under the Income Tax Act, S.C. 1970-71-72, c. 63 (hereinafter "ITA"). The decisions arise in two appeals which were heard together. In the first decision, Baron v. Canada, [1993] 1 S.C.R. 416, I concluded that s. 231.3 ITA and the search warrants issued under the authority of that section violated s. 8 of the Canadian Charter of Rights and Freedoms and were of no force or effect. The present appeal raises the identical substantive issue. It arises out of an attack on a search warrant issued by McEachern C.J.S.C. under s. 231.3 ITA. But the respondent contends that notwithstanding that these appeals raise identical issues, we cannot come to the same conclusion nor provide the same relief in this appeal. This is because in Baron the Minister chose to apply to a Federal Court judge for the search warrant whereas in this case the Minister applied to the Chief Justice of the British Columbia Supreme Court in his capacity as a judge of a provincial supreme court. Relying on Knox Contracting Ltd. v. Canada, [1990] 2 S.C.R. 338, the respondent says there was no appeal to the Court of Appeal and hence no appeal to this Court.

I conclude that our decision in Knox Contracting is not determinative in this case and that the Court of Appeal had the jurisdiction to hear the appeal. In this regard, I limit my discussion to the form of proceedings for which an appeal was actually sought in this case. The basic relief requested was a declaration that the relevant provisions of the ITA authorizing search and seizure violated s. 8 of the Charter. This was coupled with a motion to set aside the warrants and seizure and for return of the documents. This ancillary relief was premised on the authorizing legislation is being declared invalid. For the reasons I gave in Baron, I conclude that the impugned provisions of the ITA, the warrants issued under them and the searches and seizures carried out on the strength of the warrants are inconsistent with s. 8 of the Charter and consequently of no force or effect, pursuant to s. 52 of the Constitution Act, 1982.

II. The Facts

The facts of the present case are fully set out in the reasons for decision of McKenzie J. in Kourtessis v. M.N.R. (McKenzie J. (non‑constitutional issues) (1987), 15 B.C.L.R. (2d) 200, 36 C.C.C. (3d) 304 (hereinafter Kourtessis (Part 1), cited to C.C.C.). Following an investigation, officers of Revenue Canada formed the opinion that the appellants Kourtessis and his company Hellenic Import-Export Co. had violated s. 239 ITA in that they were evading or attempting to evade the payment of taxes by making false and deceptive statements in income tax returns for the years 1979-1984. On October 22, 1986, Callaghan J. of the British Columbia Supreme Court issued warrants to search for and seize documents which could afford evidence of the alleged violations. These warrants were subsequently quashed by Proudfoot J. of the same court (as she then was) due largely to the Department's nondisclosure of material information in the affidavit material used before Callaghan J. In particular, the Department had failed to disclose that the investigators had been in contact with appellants' counsel who had offered to supply any further documentation that was required. The items that had been seized were not, however, returned to the appellants and on February 27, 1987 McEachern C.J.S.C. (as he then was) issued the search warrant challenged in this appeal for the seizure of relevant documents located at the Department's premises, subject to the conditions that everything seized would be sealed and the appellants would have 30 days to challenge the warrant.

Within the 30-day period the appellants instituted proceedings in the British Columbia Supreme Court by way of originating petition challenging the warrant on constitutional and other grounds. The relief sought was an order:

(a) quashing the warrant issued by McEachern C.J.S.C.;

(b) quashing the search and seizure executed thereunder;

(c) declaring s. 231.3 ITA to be inconsistent with ss. 7, 8 and 15 of the Charter and consequently pursuant to s. 52 of the Constitution Act, 1982 of no force or effect;

(d) to return the items seized;

(e) to return all summaries, notes and outlines taken of the items seized;

(f) prohibiting the Department from using the items or copies, summaries, notes or outlines thereof or any information obtained therefrom; and

(g) to destroy all copies, summaries, notes and outlines of the items that were not for any reason returned to the appellants.

The non-constitutional grounds for the petition were summarized by McKenzie J. as follows in Kourtessis (Part 1), supra, at pp. 310-11:

The [appellants] argue that the application for the second warrant [issued by McEachern C.J.S.C.] was an abuse of the court's process in that it was an attempt to relitigate issues which had been adversely and finally decided against the Crown by Proudfoot J., that it was in effect a disguised appeal from her order which cannot be entertained by another judge of the same court and that the application and information put before the Chief Justice alleges facts and raises issues which went to the root of the matter in the application before Proudfoot J. and which should have been brought forward or emphasized at that time, consequently the Crown is estopped from bringing forward those facts at this stage.

The appellants also argued that the Department's application to McEachern C.J.S.C. for a warrant was an interference with the court's administration of justice; that the Department failed to exhaust all means available to them before applying for a warrant, as required by Proudfoot J.'s order; that the information in support of the application for a warrant failed to disclose the real purpose of the search; and that the warrant was not reasonably specific. The non-constitutional attack was dismissed by McKenzie J. (Kourtessis (Part 1), supra) and again by the Court of Appeal (Kourtessis v. Minister of National Revenue (British Columbia Court of Appeal (1989), 39 B.C.L.R. (2d) 1, [1990] 1 W.W.R. 97, 50 C.C.C. (3d) 201, 72 C.R. (3d) 196, [1990] 1 C.T.C. 241, 89 D.T.C. 5464 (hereinafter Kourtessis (B.C.C.A.), cited to C.C.C.)).

The constitutional grounds for the petition were first, that for the reasons given as non-constitutional grounds (abuse of process, disguised appeal, material non-disclosure, etc.), the application for and issuance of the warrant violated ss. 7 and 8 of the Charter and second, that s. 231.3 ITA is inconsistent with ss. 7, 8 and 15 of the Charter and consequently pursuant to s. 52 of the Constitution Act, 1982 of no force or effect. Neither the non-constitutional grounds nor the first leg of the constitutional attack, challenging the application for and issuance of the warrant in this case as distinct from the legislation under which the warrant was issued, were pursued by the appellants before this Court. The appellants' constitutional attack is thus restricted to a direct attack on the legislation. If the direct attack succeeds, the warrant of February 27, 1987 and the search and seizure will be declared invalid and set aside as a consequence of striking down the legislation.

III. Points in Issue

A. Jurisdiction

The following preliminary issue arises which will occupy the bulk of my reasons: did the British Columbia Court of Appeal have jurisdiction to entertain the appellants' appeal from the judgment of McKenzie and Lysyk JJ. of the British Columbia Supreme Court dismissing the appellants' application for a declaration and other ancillary relief?

B. The Charter

On April 15, 1991, a constitutional question identical to that stated in Baron was stated by order of the Chief Justice:

Whether s. 231.3 of the Income Tax Act, S.C. 1970-71-72, c. 63, as amended by S.C. 1986, c. 6, limits the rights and freedoms guaranteed by ss. 7 and 8 of the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B of the Canada Act 1982 (U.K.), 1982, c. 11, and is consequently of no force or effect pursuant to s. 52 of the Constitution Act, 1982, Schedule B, Canada Act 1982, c. 11 (U.K.).

IV. Judgments Below

Since our decision in Baron is dispositive of the Charter questions in this appeal, and the judgments of the courts below in this appeal on the Charter issues were discussed in that case, it is unnecessary to reproduce here the reasoning of the courts below on the Charter challenge. The following summary thus concentrates on the jurisdiction issue.

The appellants' non-constitutional arguments were heard by McKenzie J. and dismissed on July 6, 1987: Kourtessis (Part 1), supra. Their constitutional attack was rejected on August 16, 1988 by Lysyk J., and as a result the entire application was dismissed: Kourtessis v. M.N.R. (Lysyk J. (constitutional issues) (1988), 30 B.C.L.R. (2d) 342, [1989] 1 W.W.R. 508, 44 C.C.C. (3d) 79, [1989] 1 C.T.C. 56, 89 D.T.C. 5214. The appellants appealed to the British Columbia Court of Appeal. Apparently unsure whether leave was required, they gave both notice of appeal and notice of application for leave to appeal pursuant to the British Columbia Court of Appeal Act, S.B.C. 1982, c. 7, ss. 6(1)(a) and 6.1(2). The Minister then brought a motion to quash the appeal on the ground that no appeal lay from the B.C. Supreme Court's judgment. After reserving judgment on the motion to quash and hearing the merits of the appeal, the Court of Appeal allowed the motion to quash, holding that it had no jurisdiction to hear the appeal and that in any event it would dismiss the appeal on the merits: Kourtessis (B.C.C.A.), supra. Leave to appeal to this Court was granted on December 20, 1990, [1990] 2 S.C.R. viii.

In the British Columbia Court of Appeal, Taggart J.A., writing for a unanimous court on the issue of appellate jurisdiction, held that the litigation in question was a criminal proceeding subject to Parliament's exclusive jurisdiction to prescribe criminal procedure, and that since no right of appeal could be found in the ITA or the Criminal Code, R.S.C., 1985, c. C-46, there was no appeal from the Supreme Court's judgment. The issue, according to Taggart J.A., was to characterize the nature of the proceedings taken under s. 231.3 ITA. If they were criminal law proceedings, any right of appeal would have to be found in the Criminal Code due to s. 34(2) of the Interpretation Act, R.S.C., 1985, c. I-21, by virtue of which all the provisions of the Criminal Code concerning indictable and summary conviction offences apply to ITA offences.

Relying on the reasoning in Goldman v. Hoffmann-La Roche Ltd. (1987), 35 C.C.C. (3d) 488, in which the Ontario Court of Appeal held that the offence provisions of the Competition Act, R.S.C. 1970, c. C-23, could be sustained exclusively by reference to the federal criminal law power in s. 91(27) of the Constitution Act, 1867 even though other parts of the Act might rely on the trade and commerce power, Taggart J.A. concluded that while other parts of the ITA may rely on other federal heads of power, the "offence and ancillary provisions of the Act are constitutionally supported by s. 91(27)": Kourtessis (B.C.C.A.), supra, at p. 210. Accordingly, jurisdiction to entertain an appeal from the British Columbia Supreme Court's judgment had to be found in the ITA or the Criminal Code and not the Court of Appeal Act. Taggart J.A. found no appeal right in the ITA or the Criminal Code. It made no difference in his view that the appellants were seeking a Charter remedy. He held, following Mills v. The Queen, [1986] 1 S.C.R. 863, and R. v. Meltzer, [1989] 1 S.C.R. 1764, that the Charter itself does not confer an appeal right and moreover that in criminal proceedings there are no appeals from interlocutory decisions which do not have the effect of terminating the extant proceedings. Since in his view the decisions of McKenzie and Lysyk JJ. did not finally dispose of the trial proceedings, he held that there was no appeal therefrom to the Court of Appeal. Finally, after dismissing the appellants' remaining arguments, Taggart J.A. concluded that the Court of Appeal was without jurisdiction to entertain the appeal and accordingly the appeal was quashed.

V. Analysis

A. Does an Appeal Lie?

I turn now to the issue of whether an appeal lies to a provincial court of appeal from a superior court judge's judgment dismissing an application which seeks, inter alia, (1) a declaration that s. 231.3 is unconstitutional, and (2) an order quashing and setting aside a s. 231.3 search warrant and the search and seizure carried out thereunder. This comes down to a question of the division of legislative powers between the federal government and the provinces. Whether the Province of British Columbia has the power to legislate appellate procedure in respect of the present proceeding turns on the nature of the proceeding. This brings us face to face with Knox Contracting, supra.

In Knox Contracting, officials of the Department of National Revenue brought an ex parte application before a judge of the New Brunswick Court of Queen's Bench for the issuance of search warrants under s. 231.3 ITA. The warrants were issued and executed, and the taxpayers applied to the issuing judge to quash the warrants on the grounds that they were too vague or broad in scope, they were based partly on information obtained in violation of a court order, and being based partly on information illegally obtained they contravened the unreasonable search provision in the Charter. Unlike in Baron or Kourtessis, no declaratory relief was sought. The issuing judge dismissed the application to quash the warrants. An appeal to the New Brunswick Court of Appeal was dismissed.

The taxpayers' appeal to this Court was also dismissed. The issue before this Court was, as I said in my reasons, "whether an appeal lies from the decision of a superior court judge not to quash a search warrant issued pursuant to s. 231.3 of the Income Tax Act": Knox Contracting, supra, at p. 357. It will immediately be seen that the only relevant differences between Knox Contracting and the present appeal are that the constitutionality of the governing legislation was not challenged, nor was declaratory relief sought, in Knox Contracting. This Court split three ways and in the result held that there was no appeal to the provincial court of appeal from the superior court judge's decision on the application to quash the warrants. Cory J. (Wilson and Gonthier JJ. concurring) held that the proceeding in question was truly criminal in that ss. 231.3 and 239 ITA were supportable by reference to the federal s. 91(27) criminal law power. That being so, Cory J. held, any appeal right must be found in federal legislation and since there was no such provision in the ITA or the Criminal Code, the New Brunswick Court of Appeal lacked jurisdiction to entertain the appeal. It was my opinion, on the contrary, in which L'Heureux-Dubé and McLachlin JJ. concurred, that identifying s. 91(27) as a source of constitutional support for the ITA did not end the inquiry, as the ITA was also supportable under the federal taxation power (s. 91(3)). That being so, the proceeding instituted by the taxpayers had two aspects, one criminal and one civil, and provincial rules of civil procedure would apply to give a right of appeal in the absence of conflict with federal legislation, of which I found none. Finally, La Forest J. preferred my approach to the juristic character of the relevant provisions of the ITA, but found that Parliament had shown an intention to subject the proceeding to the ordinary rules of criminal procedure. Hence he agreed with Cory J.'s disposition of the appeal.

With respect to the juristic character of the ITA, which was supported by the majority, I concluded that ss. 231.3 and 239 ITA were supportable under both the criminal law power and the power in relation to federal taxation. I said, at pp. 358-59:

While I accept that ss. 231.3 and 239 are supportable under the power over criminal law and procedure, that does not end the inquiry. If these provisions are also supportable under s. 91(3) of the Constitution Act, 1867, the federal taxation power, then the jurisdiction to provide for an appeal is not exclusively federal. Section 92(14) of the Constitution Act, 1867 confers jurisdiction on the province to legislate in respect of procedure in civil matters. Accordingly, if ss. 231.3 and 239 are supportable under two heads of power, one criminal and one civil in nature, a right of appeal can be conferred by either federal or provincial legislation. In the absence of conflict, both forms of legislation are valid on the basis of the double aspect doctrine: see Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161.

The notion that a statute is supportable under two heads of legislation is well established: see R. v. Hauser, [1979] 1 S.C.R. 984; R. v. Wetmore, [1983] 2 S.C.R. 284. The fact that provision is made for enforcement, including the creation of severe penalties, does not mean that the legislation is necessarily criminal.

The nature of the Income Tax Act is such that it was undoubtedly passed under the federal taxation power. Most of its provisions have nothing to do with the criminal law power.

In support of this last proposition, I referred to passages from R. v. McKinlay Transport Ltd., [1990] 1 S.C.R. 627, at p. 641, and Thomson Newspapers Ltd. v. Canada (Director of Investigation and Research, Restrictive Trade Practices Commission), [1990] 1 S.C.R. 425, at pp. 516-17, to the effect that the ITA is essentially a regulatory statute enacted under the federal taxation power, not a criminal statute. I went on to observe that, while the procedure to be followed in the application of federal laws is within the paramount jurisdiction of Parliament, provincial procedure was not ousted in the absence of conflict with federal legislation. Absent conflict, provincial laws of procedure, including rights of appeal, were applicable except in respect of proceedings that are exclusively criminal in nature. Accordingly, in a matter arising under a federal statute supportable under a head of power in addition to the criminal law power, a provincial court which is seized of the matter may validly apply its own rules of civil procedure unless precluded by federal legislation or the matter is clearly related to a criminal proceeding.

Applying this analytical framework to the proceedings in Knox Contracting, I concluded that there was no conflict with federal legislation and thus an appeal did lie pursuant to the New Brunswick Judicature Act, R.S.N.B. 1973, c. J-2. I was, however, in the minority in this conclusion. Cory J. (Gonthier and Wilson JJ. concurring), as noted, having held that the relevant provisions were enacted pursuant to the exclusive federal criminal law power, stated that a right of appeal would have to be found in federal legislation and that it was not necessary to inquire further into the relevant provisions' supportability as tax law. This was also a minority position. The opinion of La Forest J., speaking for himself, which was decisive of the result, approved of my reasoning on the juristic character of the ITA but agreed with Cory J.'s disposition of the appeal. He was of the view that in the circumstances Parliament had shown a disposition to adopt "the ordinary procedures of the criminal law for their enforcement" (at p. 356). He concluded, however, with the following caveat (at p. 357):

It is unnecessary to consider whether a province could, in other circumstances, constitutionally deal with procedure respecting a penal provision conjointly supportable under the criminal law power and some other head of federal legislative power.

I conclude from the foregoing that in Knox Contracting a majority supported the view that the offence and search warrant provisions of the ITA are referrable to both the federal criminal law and taxation power, and jurisdiction to legislate procedure in matters relating to these provisions is shared between the provinces and the federal government, subject to federal paramountcy in the event of conflict between federal and provincial legislation. I would add that, in this situation, Parliament is free to assign jurisdiction to any tribunal it chooses, whatever the source of its legislative power: see R. v. Trimarchi (1987), 63 O.R. (2d) 515 (C.A.), leave to appeal refused, [1988] 1 S.C.R. xiv; Attorney-General for Alberta v. Atlas Lumber Co., [1941] S.C.R. 87. If, however, federal legislation is silent, the ordinary rule is that "where no other procedure is prescribed, a litigant suing on a federal matter in a provincial court takes the procedure of that court as he finds it: see Alexander v. Vancouver Harbour Commrs., [1922] 1 W.W.R. 1254 (B.C.C.A.); Morris v. Morris, [1950] O.R. 697 (H.C.)": Laskin's Canadian Constitutional Law (5th ed. 1986), vol. 1, at p. 185. This is because the provincial superior courts are truly courts of general jurisdiction, as Professor Hogg points out:

The general jurisdiction of the provincial courts means that there is no need for a separate system of federal courts to decide "federal" questions. Nor does the power to decide federal questions have to be specifically granted to the provincial courts by the federal Parliament. On the contrary, if federal law calls for the exercise of adjudication, but is silent as to the forum, the appropriate forum will be the provincial courts.

(P. W. Hogg, Constitutional Law of Canada (3rd ed. 1992), vol. 1, at p. 7-3.)

This does not mean that provincial legislation does not apply unless "adopted" by federal legislation as my colleague suggests. The authorities make it clear that a province has legislative authority to adjudicate federal matters and that such legislation is only ousted if it conflicts with federal legislation. In Adler v. Adler, [1966] 1 O.R. 732, Laskin J.A. (as he then was), speaking for the Court of Appeal of Ontario, found s. 7(1) of the Matrimonial Causes Act, R.S.O. 1960, c. 232, an Ontario statute, intra vires. This section provided that no appeal lay from a judgment absolute in divorce cases. Divorce is a federal matter and it was argued that provincial legislation was incompetent. At page 736, Laskin J.A. stated:

Of course, it was open to the Ontario Legislature (save as competent Federal legislation on divorce procedure might inhibit it) to vary its laws of procedure in the disposition of divorce actions and appeals therein.

Moreover, in Ontario (Attorney General) v. Pembina Exploration Canada Ltd., [1989] 1 S.C.R. 206, La Forest J. went to considerable pains to stress the same point in relation to admiralty. In his judgment for the Court upholding provincial legislation which conferred admiralty jurisdiction on a small claims court, he relied on a number of authorities which upheld provincial jurisdiction in respect of the adjudication of divorce cases. At pages 219-20, he stated:

The foregoing position is supported by the following statement of Rand J. in Hellens v. Densmore, [1957] S.C.R. 768, at p. 783:

That after Confederation a right of appeal could be given by provincial law (in respect of divorce) appears to me to be unquestionable although the opposite opinion seems to have been held in the provincial Courts: the administration of justice by the Province surely extends to the final determination within the Province of the judgments of its own Courts.

Indeed, unlike the cases already discussed, Rand J.'s holding cannot be explained on the basis of the historical inherent jurisdiction of a superior court. Appellate jurisdiction must be conferred by statute.

This conclusion was no way dependent on adoption of provincial legislation by appropriate federal legislation. Rather, it was based on the provincial legislative power under s. 92(14) of the Constitution Act, 1867. La Forest J. made this plain in the following passage at p. 220:

It seems to me, however, that such jurisdiction is inherent in the essentially unitary character of the Canadian court system. If, as indicated by the divorce cases above cited, one accepts that jurisdiction in the provincial superior courts is not solely derived from the specific character of superior courts, but that s. 92(14) of the Constitution Act, 1867 empowers the provinces to grant them general jurisdiction, whether originally or on appeal as in Hellens v. Densmore, supra, there is no reason why this should not apply to provincial courts of inferior jurisdiction as well. There are considerations of a historical and practical nature that militate in favour of this solution as well to which I shall advert later. I turn first, however, to a discussion of the cases that have dealt directly with the issue.

The fact that there is alleged to be a comprehensive procedure contained in federal legislation is only relevant to determine whether provincial legislation is ousted because it conflicts with federal legislation. My colleague and I agree that it is not ousted in relation to declaratory relief. This includes, perforce, the right of appeal conferred by provincial legislation. In my view, it should also extend to ancillary relief which enables the Court to give effect to the declaration.

It would be anomalous if taxpayers who must challenge ITA search warrants in the provincial superior courts were to find themselves without a right of appeal in the event of an unsuccessful challenge, whereas no question arises with respect to the appellate jurisdiction of the Federal Court of Appeal in identical proceedings brought in the Federal Court. The juxtaposition of Kourtessis and Baron illustrates this practical difficulty. In the former, the Minister applied to the provincial superior court for a warrant, and in the latter the Minister applied to the Federal Court for a warrant. The ITA provides that the Minister may make this choice in his or her discretion. In most cases, the option is exercised on the basis of convenience. The exercise of this option will have grave implications for the rights of the taxpayer if we approve the blanket application of Knox Contracting to all proceedings challenging ITA warrants in provincial courts. If we uphold the judgment of the British Columbia Court of Appeal in Kourtessis, taxpayers who have the bad luck of being subject to a warrant issued by a provincial superior court will have no appeal from a provincial superior court judge's refusal to set aside the warrant, whereas if the warrant is issued by the Federal Court there will be no problem of appellate jurisdiction, as Baron demonstrates. It would be unfortunate to allow a taxpayer's appellate rights to be determined on the basis of the Minister's whim.

My colleague, La Forest J., suggests that there is no anomaly because, as I understand his reasons, there may be no appeal to the Federal Court of Appeal in the circumstances outlined in Baron. The relief claimed in Baron was identical to the relief claimed in this appeal and included a motion to set aside the search warrants as well as an action for a declaration. Relying on this right of appeal, the Court of Appeal quashed the search warrants and declared s. 231.3 ITA invalid. That appeal was heard together with this appeal in which jurisdiction was very much a live issue. The issue of jurisdiction in Baron, in contrast to this appeal, was not dealt with per incuriam but on the basis that no question with respect to jurisdiction existed. If indeed the Federal Court of Appeal lacked jurisdiction, then this Court's decision was a nullity. Our jurisdiction to hear an appeal and to affirm the judgment on appeal depends on the judgment on appeal being a valid exercise of that court's jurisdiction.

To avoid this anomaly, I would distinguish Knox Contracting so as not to foreclose an appeal in proceedings relating to:

(i)a declaration that the statute authorizing a search warrant violates the Constitution, coupled with

(ii)an application to set aside the search warrant.

In my view, having had the benefit of a more elaborate explanation of my colleague's (La Forest J.) reasons in Knox Contracting, these two remedies can be exercised, in combination, prior to the laying of charges, and the result of such exercise may be appealed consistently with the majority opinion in that case. I will deal with each of these two remedies separately.

(i)Motion to Set Aside in Aid of an Action for a Declaration

This form of remedy is frequently employed to review the issuance of process pursuant to legislation that is attacked on constitutional grounds. Although often combined with an action for a declaration, when employed alone, the distinction between this remedy and an action for a declaration with consequential relief is not of substance. In both cases there is a finding or declaration that the statute is invalid and anything obtained pursuant to the process issued thereunder must be returned. The principle of federal procedural exclusivity in respect of proceedings to review search warrants issued under s. 231.3 ITA would permit an action for a declaration that the statute is invalid and consequential relief, including return of the articles seized. This is discussed hereunder and is a matter in respect of which my colleague and I are in agreement. The declaration that the statutory provision is invalid leads to the inexorable conclusion that the warrant issued thereunder is also invalid. Indeed, the declaration could presumably expressly include the warrants. If this proceeding, conducted under provincial law, does not conflict with the comprehensive regime relating to the enforcement of the ITA, I find it difficult to accept that the additional mechanical step of setting aside the warrant oversteps the bounds of constitutional propriety. Indeed, it seems peculiar to order the return of articles seized under a warrant that is left standing, albeit mortally wounded by a declaration.

Furthermore, it must be stressed that a warrant under s. 231.3 ITA is granted ex parte. A motion to the superior court judge who issued the ex parte order or to another judge of the same court to set aside the ex parte order in accordance with civil procedure has been recognized by our Court as an appropriate procedure to review an ex parte authorization to wiretap issued under the Criminal Code. In Wilson v. The Queen, [1983] 2 S.C.R. 594, McIntyre J., after reviewing a body of jurisprudence describing the procedure for such review in civil cases, stated, at p. 608:

It is my opinion that, in view of the silence on this subject in the Criminal Code and the confusion thereby created, the practice above-described should be adopted.

I see no reason why a superior court judge reviewing an ex parte order would be precluded from entertaining a Charter argument. Even if we assume that the superior court judge issuing the ex parte order is not empowered to decide a Charter issue, this does not mean that the reviewing court will be similarly limited. For example, the reviewing judge with respect to a wiretap authorization issued ex parte by a superior court judge is entitled to entertain an attack at trial on the authorization under s. 8 of the Charter even if the reviewing judge is not a superior court judge. See R. v. Garofoli, [1990] 2 S.C.R. 1421. This conclusion applies a fortiori when the reviewing judge is also seized of an action for a declaration of invalidity based on the Charter. In that situation, the motion to set aside is simply called in aid to give effect to the right declared by the court. The court is clothed with jurisdiction to decide the Charter issue by virtue of the declaratory action.

General federal legislation should not be interpreted or applied to deny an effective remedy where there has been a Charter breach. In Re Church of Scientology and The Queen (No. 6) (1987), 31 C.C.C. (3d) 449, the Ontario Court of Appeal considered the reviewability of search warrants issued under the Criminal Code. The court concluded that if certiorari did not apply because the Charter violation did not constitute an error of jurisdiction, the reviewing judge was bound to consider a remedy under s. 24(1) of the Charter. This accords with the view expressed by a unanimous Court in R. v. Smith, [1989] 2 S.C.R. 1120, to which I refer hereunder.

Accordingly, in my view, in combination with an action for a declaration of constitutional invalidity, a motion to set aside partakes of the same character as the declaration for constitutional purposes. For the reasons outlined below, when employed in this manner it can be appealed as part of the disposition of a proceeding for a declaration.

I need not address two other issues which are alluded to in my colleague's reasons, that is: whether a motion to set aside can be brought (i) independently of an action for a declaration, or (ii) on grounds other than constitutional grounds. Any suggestion that s. 231.3(7) is the exclusive basis for questioning search warrants under the ITA on conventional grounds must be left to proceedings which raise that issue.

I would simply note that s. 231.3(7) does not appear to permit a challenge to the validity of the warrant on grounds that have been traditionally permitted. Indeed, in an earlier proceeding in this case, warrants were quashed by Proudfoot J. for lack of disclosure and specificity. Searches and seizures involve the most serious invasion of privacy. Search warrants issued under the Criminal Code can be attacked by motion to quash brought before the superior court of the province. The grounds include failure to disclose, lack of specificity, the existence of less intrusive investigatory procedures and the like. See Shumiatcher v. Attorney-General of Saskatchewan (No. 2) (1960), 34 C.R. 154 (Sask. Q.B.), Re Church of Scientology, supra, and R. v. Sismey (1990), 55 C.C.C. (3d) 281. I would be surprised if this procedure were not available to a citizen who is subject to a search under the ITA.

An application under s. 231.3(7) would be a wholly inappropriate proceeding to test the constitutional validity of the provision under which the seizure is made. Subsection (7) applies only if the judge is satisfied that the documents seized will not be needed for an investigation or prosecution or were not seized in accordance with the warrant. It can only be resorted to if both the warrant and the statutory provision under which the warrant was issued are valid. The subsection is similar to s. 490 of the Criminal Code which sets up a more elaborate and detailed procedure for the return of documents. If the respondent's argument were accepted, it would follow that a motion to quash a search warrant issued under the Code could not be taken unless it were somehow fitted into an application for relief under s. 490. In my view, not only is subs. (7) not an appropriate forum with respect to a constitutional challenge of the search and seizure provision, but a judge would not have jurisdiction to deal with such a challenge upon a plain reading of the words of the subsection. To the extent that Kohli v. Moase (1988), 55 D.L.R. (4th) 737 (N.B.C.A.), suggests the contrary, I must respectfully disagree with it.

(ii) Declaratory Relief

In the alternative, I would distinguish Knox Contracting on the basis that the procedure relating to proceedings for declaratory relief on constitutional grounds cannot be characterized as criminal law so as to exclude a right of appeal. In Knox Contracting the proceeding taken was a motion to quash. There was no constitutional challenge to legislation. In this case, the proceeding taken was not simply to quash the warrant but an action for a declaration that s. 231.3 was invalid on constitutional grounds. A motion to quash, when not combined with an action for declaratory relief, may take its character for the purpose of division of powers from the underlying proceeding which it attacked. See In re Storgoff, [1945] S.C.R. 526, at pp. 585-86. On the other hand, an action for a declaration as to the constitutional validity of a statute does not necessarily partake of the character of the statute which is attacked. It has a life of its own.

This type of proceeding owes its independent character in part to the fundamental role of the provincial superior courts in Canada's constitutional system, particularly their power to declare federal and provincial legislation unconstitutional. The jurisdiction of the provincial superior courts to issue declaratory judgments on the constitutional validity of provincial and federal legislation (whether as to vires or consistency with the Charter) is fundamental to Canada's federal system: see Attorney General of Canada v. Law Society of British Columbia, [1982] 2 S.C.R. 307, at p. 328. This jurisdiction is "constant, complete, and concurrent" with the jurisdiction of a criminal trial court: [Mills v. The Queen, [1