Ontario Superior Court of Justice

Court File No: CR-24-00000102-00MO
Date: 2025-01-17
Region: Toronto

Between

His Majesty the King (Applicant)
and
Romspen Investment Corporation (Respondent)

Appearances:
Esther Solomon and Jean-Pierre Sharpe, for the Applicant Crown
Graeme Hamilton and Erica McLachlan, for the Respondent

Heard: December 6 and 23, 2024

Justice: M. Forestell

Reasons for Ruling on Lavallee-Type Procedure

Background

[1] The Applicant, the Quebec Revenue Agency (the “Agency”), is authorized to conduct investigations on behalf of the Government of Canada with respect to offences under the Excise Tax Act, RSC 1985, c E-15.

[2] On October 2, 2024, a search warrant was issued by the Honourable Genevieve Claude Paraye, P.J.P. authorizing the investigator, Hugo Laroque, and other investigators of the Agency, to enter, search and seize items at the Toronto head office of the respondent, a commercial mortgage lender. The warrant and Information to Obtain the Warrant were ordered sealed by Judge Paraye. On October 8 and 9, 2024, the search warrant was executed.

[3] Before the search began, counsel for the respondent claimed solicitor-client privilege on all paper and electronic documents. On agreement, the search was executed in the presence of counsel for the respondents.

[4] On October 9, 2024, paper documents that were immediately identified as privileged were sealed and brought to the custody of the Superior Court of Justice in Toronto. Other paper and electronic documents were seized, inventoried, and brought to the secure vault of the Agency in Montreal. Those documents were subsequently brought to the Superior Court on October 21, 2024.

[5] A total of 13 sealed envelopes containing paper documents; five sealed bags containing one USB key each; and one sealed box of paper documents were deposited with the Court by October 21, 2024.

[6] On October 10, 2024, a further search warrant was issued for the Oakville, Ontario residence of an employee of the respondent. The warrant’s appendices were ordered sealed. This second warrant was executed on October 10, 2024. All items seized (two USB keys) were sealed and deposited with the Superior Court in Milton.

[7] On October 24, 2024, the sealing order for the warrants was partially lifted by the court in Quebec.

[8] On November 13, 2024, C. Conlan J. of the Ontario Superior Court in Milton ordered the transfer to Toronto of the seized items from the Oakville search. The items were transferred on November 14, 2024.

[9] A hearing was scheduled before this Court to establish the procedure to determine whether the seized documents are protected by privilege. That hearing took place on December 6, 2024.

[10] There were three issues to be determined:

(i) Should the Agency be required to provide particulars of the allegations against the respondent to facilitate the respondent’s review of the documents and appropriate claim of privilege?
(ii) Should an independent third-party forensic analyst be appointed to copy and handle the electronic documents?
(iii) Should an amicus curiae be appointed to assist the Court with the determination of privilege?

[11] At the conclusion of the hearing, I gave my decision: (i) that the Agency should not be ordered to provide particulars; (ii) that a third-party forensic computer analyst should be appointed to copy and otherwise handle the electronic documents; and (iii) that the appointment of an amicus curiae was not necessary at that stage of the proceedings.

[12] I indicated, when the order was made, that my reasons would follow. These are those reasons.

Evidence

[13] The background of this matter as set out above, is largely agreed and supported by the Notice of Application and its Appendices. In addition, the respondent filed the affidavit of Pascal Guerin, an IT specialist in the Computer Forensics department of the Quebec Revenue Agency. Mr. Guerin also gave viva voce evidence at the hearing.

[14] Mr. Guerin described the process of copying the electronic documents. He said that the process of copying might be completed without encountering any errors. If errors occurred, he would attempt to resolve the errors without viewing the material. For example, a physical barrier could be imposed on the monitor to block his view of the material as he resolved the issue. He acknowledged that some information about the nature of the documents could be disclosed in the copying process.

Legal Principles

[15] Solicitor-client privilege protects communications between a lawyer and their client which entails the seeking or giving of legal advice, and which is intended to be confidential. [1]

[16] There are limited exceptions to the privilege. Privilege does not shield communications that are criminal in nature or where the legal advice sought is for the purpose of facilitating the commission of a crime or a fraud, sometimes referred to as the ‘crime-fraud exception’. [2]

[17] The exception for legal advice sought for the purpose of facilitating the commission of a crime applies only where, at the time that the advice was sought, the client knew or ought to have known that the intended conduct was unlawful.

[18] If a client seeks advice about whether the conduct is lawful, privilege will still attach, even if the conduct later turns out to be unlawful. [3]

[19] The crime-fraud exception has been described by the Supreme Court of Canada as ‘rare’ and ‘extremely limited’. As the Court held in R. v. McClure, solicitor-client privilege should be maintained “as close to absolute as possible to ensure public confidence and retain relevance.” [4]

[20] The importance of the protection of solicitor-client privilege was articulated by the Supreme Court of Canada in Lavallee, Rackel & Heintz v. Canada (Attorney General); White, Ottenheimer & Baker v. Canada (Attorney General); R. v. Fink (“Lavallee”): [5]

Solicitor-client privilege is a rule of evidence, an important civil and legal right and a principle of fundamental justice in Canadian law. While the public has an interest in effective criminal investigation, it has no less an interest in maintaining the integrity of the solicitor-client relationship. Confidential communications to a lawyer represent an important exercise of the right to privacy, and they are central to the administration of justice in an adversarial system. Unjustified, or even accidental infringements of the privilege erode the public’s confidence in the fairness of the criminal justice system. This is why all efforts must be made to protect such confidences.

[21] The Court, in Lavallee and in R. v. Law Office of Simon Rosenfeld established guidelines to protect solicitor-client privilege during and after the execution of a search warrant. Those guidelines relevant to the procedure after the execution of the warrant, are the following:

• The investigative officer executing the warrant should report to the justice of the peace the efforts made to contact all potential privilege holders, who should then be given a reasonable opportunity to assert a claim of privilege and, if that claim is contested, to have the issue judicially decided.
• If notification of potential privilege holders is not possible, the lawyer who had custody of the documents seized, or another lawyer appointed either by the Law Society or by the court, should examine the documents to determine whether a claim of privilege should be asserted, and should be given a reasonable opportunity to do so.
• The Attorney General may make submissions on the issue of privilege, but should not be permitted to inspect the documents beforehand. The prosecuting authority can only inspect the documents if and when it is determined by a judge that the documents are not privileged.
• Where sealed documents are found not to be privileged, they may be used in the normal course of the investigation.
• Where documents are found to be privileged, they are to be returned immediately to the holder of the privilege, or to a person designated by the court. [6]
• Documents over which privilege is claimed are deposited with the court. The court has a responsibility to protect the privilege and must determine the procedure for the determination of the privilege. [7]

[22] There are various procedures that have been adopted by the courts in dealing with seized documents over which privilege may be claimed.

[23] In R. v. Law Office of Simon Rosenfeld, material was seized from the respondent’s law office and home. Nordheimer J. (as he then was) appointed a referee to examine the documents and to notify all clients who could be identified so that those clients could participate in the process of claiming and protecting their privilege. [8]

[24] In Attorney General v. Law Society, 2010 ONSC 2150, the court appointed both a referee and a forensic computer specialist to review materials seized from a law office where the lawyer was arrested for possession of child pornography.

[25] In both Law Office of Simon Rosenfeld and Attorney General v. Law Society, the Court emphasized that it is the court that controls the process at each stage. The process adopted by the court must be designed to minimally impair the privilege.

[26] Prior cases provide guidance as to the application of the general principles.

[27] In R. v. Shah, 2015 ONSC 4853, Molloy J. established a procedure to be followed to search a seized phone containing communications which may engage solicitor-client privilege. [11] Mr. Shah was not a lawyer and was himself the privilege holder. Molloy J. held that the contents of the cell phone were to be copied by an independent expert retained by the Crown. The Crown was ordered to turn over the phone to the expert, upon the expert signing an undertaking to make two copies of the entire contents of the phone (one for defence counsel and one for the court) without reading or reviewing that content, except as necessary to do the copying, and without disclosing to anyone the content he did see. The defence copy was to be provided to defence counsel by court staff. Defence counsel had 30 days from the date of receipt to advise the Crown and the Court in writing, whether or not solicitor-client privilege was being asserted over any portion of the material on the phone. Where no privilege was asserted, the court staff would turn over the remaining copy and the phone to the Crown. Where privilege was asserted, the court copy and phone would remain in the Court’s custody until a judge determined whether a valid privilege claim had been established. The Crown was entitled to receive notice of the application to determine the privilege issue. Molloy J. noted that, depending on the nature of the material and the claim asserted, it could be useful for the Court to retain amicus curiae to assist on this issue. This determination was left to the discretion of the judge hearing that issue.

[28] In Solicitor-Client Privilege of Things Seized (Re), 2019 BCSC 91, the Canada Revenue Agency seized electronic storage devices from the respondent’s residence and business premises, over which solicitor-client privilege was claimed. The respondent, who was not a lawyer, was alleged to have committed criminal offences under the Income Tax Act, RSC 1985, c 1 (5th Supp.). The Supreme Court of British Columbia was asked to provide guidance on the appropriate person or process for identifying, isolating, and storing the privileged electronic materials. The Court found that the respondents and their counsel were best suited to identify solicitor-client privileged materials. Brown J. observed an operationally independent forensics department with technical expertise may be the appropriate entity to isolate solicitor-client privileged material. However, the tools used in this process must allow the materials to be isolated without their content being read. To address the concerns about material being read in Solicitor-Client Privilege of Things Seized, Brown J. ordered the appointment of an independent technician with expertise in forensic computing to isolate the solicitor-client privileged materials.

[29] As illustrated by these cases, the appropriate procedure to be followed in handling seized documents over which privilege may be claimed is context specific. Referees have been appointed in some cases to initially identify the potentially privileged material. The need for an independent referee or amicus at the review stage depends on the circumstances and the issues. In cases where more than one client is potentially impacted, or where the lawyer is the target of the search, a referee may be used (see for example, Appointment of Analyst, 2023 ONSC 1487, Attorney General v. Law Society, R. v. Law Office of Simon Rosenfeld).

[30] In other circumstances, counsel for the privilege-holder conducts the initial review and makes the initial claim of privilege. (See R. v. Shah, R. v. Gourkow, Solicitor-Client Privilege of Things Seized (Re).) The court must determine who is best placed to identify privileged materials.

[31] Similarly, the need for an independent third-party computer analyst is fact and context specific. Where the material can be copied without impacting the integrity of the material, including the metadata, and where the material can be copied without being viewed, there may be no impediment to the material being copied by either law enforcement officers or a clerk. However, where there exist concerns about altering the material or inadvertent viewing of privileged material by the seizing authority, an independent third party computer analyst or technician may be required to safeguard the privilege. [19]

Application of the Principles

Particulars

[32] The respondent argued that it requires particulars of the allegations against it to defend its claims of privilege and to identify documents where the crime-fraud exception may be in issue.

[33] The identification of privileged material is not specific to a particular criminal or quasi-criminal charge or a particular civil claim. The privilege arises because of the relationship between the client and the solicitor and nature of the advice sought and given. The crime-fraud exception is similarly not dependent on an allegation of a particular crime. The communication would cease to be protected if the advice was sought for the purpose of facilitating any crime.

[34] There is nothing in the record before me to support the argument that in this case, particulars are needed to identify privileged communications or to identify documents that may raise the issue of the crime-fraud exception. I decline to make an order for particulars.

Appointment of an Independent Third-Party Analyst

[35] The applicant submits that an IT specialist from the Computer Forensics Division of the Quebec Revenue Agency would be able to copy the material on the USB keys deposited with the court. I accept the evidence of Mr. Guerin. He gave his evidence in a fair and impartial manner. He was knowledgeable about the available programs to view and copy the material. Mr. Guerin is a highly qualified expert in the area. I accept that Mr. Guerin would take every step possible to avoid viewing the contents of the material if he were tasked with copying the documents. I find, however, that the nature of the documents could be evident from the naming of the files and that there is a risk of inadvertent viewing of the documents during the copying process if errors are encountered.

[36] As the Court held in Lavallee, “even accidental infringements of the privilege erode the public’s confidence in the fairness of the criminal justice system”. In light of the presence of this risk in this case, I find that a third-party analyst should be appointed to copy the electronic documents.

Amicus Curiae

[37] The value of the assistance of amicus curiae in the ultimate adjudication of the privilege depends on the nature of the material and the nature of the claim asserted. By the next appearance these factors will have crystallized and a determination of the necessity for amicus curiae can be made.

Conclusion

[38] As set out above, I have concluded that no particulars are necessary, that a third-party analyst be appointed (at the expense of the applicant) and that the decision with respect to the appointment of amicus curiae be deferred. [20]

M. Forestell
Released: January 17, 2025

Endnotes

[1] Solosky v. The Queen, [1980] 1 S.C.R. 821, at p. 837
[2] Ibid., at pp. 835-36
[3] R. v. Campbell, [1999] 1 S.C.R. 565 at paras. 56-62
[4] R. v. McClure, 2001 SCC 14, [2001] 1 S.C.R. 445, at para. 35
[5] Lavallee, Rackel & Heintz v. Canada (Attorney General); White, Ottenheimer & Baker v. Canada (Attorney General); R. v. Fink, 2002 SCC 61, [2002] 3 SCR 209, at para. 49
[6] Lavallee, at para. 49, subparas. 6-10
[7] R. v. Law Office of Simon Rosenfeld, at paras. 2-12
[8] Ibid.
[9] Attorney General v. Law Society, 2010 ONSC 2150
[10] R. v. Shah, 2015 ONSC 4853
[11] Ibid.
[12] Solicitor-Client Privilege of Things Seized (Re), 2019 BCSC 91
[13] Appointment of Analyst, 2023 ONSC 1487
[14] Attorney General v. Law Society, 2010 ONSC 2150
[15] R. v. Law Office of Simon Rosenfeld
[16] R. v. Shah, 2015 ONSC 4853
[17] R. v. Gourkow, 2018 ONSC 829
[18] Solicitor-Client Privilege of Things Seized (Re), 2019 BCSC 91
[19] Solicitor-Client Privilege of Things Seized, at paras. 66 & 67; R. v. Shah, at para. 30
[20] The parties returned on December 23, 2025, after the documents had been copied. The purpose of this appearance was to determine the next steps in the process. On that date, the parties agreed, and I ordered that:
(i) the respondent, with the assistance of the third-party analyst, if necessary, should extract the documents over which they claimed privilege within 60 days;
(ii) any material over which privilege is not claimed should be provided to the Applicant with a copy to the Court;
(iii) documents over which privilege is claimed should be copied, placed in a sealed envelope, and deposited with the Court with a list and description of such documents; and
(iv) the choice of amicus curiae will be agreed upon by both parties.
A return date of January 20, 2025 was agreed upon to set a date for a further hearing and to identify the amicus curiae.