T-1180-83
Helix Investments Ltd. and Helix Shipping Lim
ited (Applicants)
v.
Lawson A. W. Hunter, Director of Investigation
and Research, Combines Investigation Act, John
Bean, Jean G. Brazeau and E. Besruky (Respond-
ents)
Trial Division, Walsh J.—Ottawa, May 20 and
June 2, 1983.
Combines — Application pursuant to s. 18, Federal Court
Act and s. 24, Charter to halt search on ground s. 10,
Combines Investigation Act violates Charter, s. 8 protection
against unreasonable search or seizure — Commissioner's s.
10(3) authorization judicial according to Petrofina case so
Trial Division without jurisdiction to grant prohibition or
injunction under s. 18 — Applicants should apply to Court of
Appeal under s. 28 even though may be rejected — Director's
request for authorization and directing and performance of
search not subject to prohibition since not judicial functions —
Search preliminary step not determining rights — Balance of
convenience and irreparable injury test against granting
injunction — Halt might permit disposal of necessary docu
mentary evidence rendering resumption of search and entire
inquiry useless — Applicants protected by requiring deposit of
seized documents with Registrar — Investigators' presence
only inconvenience for applicants if search does not lead to
further steps — Remedy via damages available if search
illegal or improperly executed — Search usually necessary to
achieve Combines Investigation Act aims so questionable
whether unreasonable as per s. 8 — Charter s. I may be
applied even if s. 8 reasonableness absent — That search
justifiable in free and democratic society inferred from s. 10's
long, unchallenged co-existence with common-law protections
— Applicants would have opportunity to argue s. 10 invalidity
by raising Charter, s. 24(2) objection to use of improperly
obtained evidence — Court not bound by decision of Alberta
Court of Appeal in Southam that s. 10(1) and (3) invalid —
Southam not dealing with s. 1 — Following Southam would
extend ban on searches to rest of Canada thereby impeding
investigations — Supreme Court will have to decide and
perhaps Combines Investigation Act should be amended to
incorporate greater controls on search authorizations — Fed
eral Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 18, 28(3) —
Canadian Charter of Rights and Freedoms, being Part I of the
Constitution Act, 1982, Schedule B, Canada Act 1982, 1982,
c. 11 (U.K.), ss. 1, 8, 24 — Constitution Act, 1982, s. 52 —
Combines Investigation Act, R.S.C. 1970, c. C-23, ss. 8 (as am.
by S.C. 1974-75-76, c. 76, s. 4), 10(1),(3), 14, 18, 19, 34(1)(c)
(rep. and sub. idem, s. 16(1)), 47(1) (rep. and sub. idem, s. 25),
(2) — Criminal Code, R.S.C. 1970, c. C-34.
Constitutional law — Charter of Rights — Application to
halt search on ground s. 10, Combines Investigation Act
violates Charter, s. 8 protection against unreasonable search or
seizure — Search usually necessary to achieve Act's aims so
questionable whether unreasonable as per s. 8 — Charter, s. I
may be applied even if s. 8 reasonableness absent — That
search justifiable in free and democratic society inferred from
s. 10's long, unchallenged co-existence with common-law pro
tections — Applicants would have opportunity to argue s. 10
invalidity by raising Charter s. 24(2) objection to use of
improperly obtained evidence — Following decision of Alberta
Court of Appeal in Southam would extend ban on searches to
rest of Canada thereby impeding investigations — Supreme
Court will have to decide and perhaps Act should be amended
to incorporate greater controls on search authorizations —
Canadian Charter of Rights and Freedoms, being Part I of the
Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c.
11 (U.K.), ss. 1, 8, 24 — Constitution Act, 1982, s. 52 —
Combines Investigation Act, R.S.C. 1970, c. C-23, s. 10(1),(3).
Judicial review — Prerogative writs — Prohibition —
Application pursuant to s. 18, Federal Court Act and s. 24,
Charter for order prohibiting continuation of search on ground
s. 10, Combines Investigation Act violates Charter, s. 8 protec
tion against unreasonable search or seizure — Commissioner's
s. 10(3) authorization judicial according to Petrofina case so
Trial Division without jurisdiction to grant prohibition or
injunction under s. 18 — Director's request for authorization
and directing and performance of search not subject to prohi
bition since not judicial functions — Search preliminary step
not determining rights — Following decision of Alberta Court
of Appeal in Southam that s. 10(1) and (3) invalid would
extend ban on searches to rest of Canada thereby impeding
investigations — Supreme Court will have to decide and
perhaps Combines Investigation Act should be amended to
incorporate greater controls on search authorizations — Fed
eral Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 18, 28(3) —
Canadian Charter of Rights and Freedoms, being Part I of the
Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c.
11 (U.K.), ss. 8, 24 — Combines Investigation Act, R.S.C.
1970, c. C-23, s. 10 (1),(3).
Jurisdiction — Federal Court, Trial Division — Charter
applications — Prerogative writs — Application pursuant to s.
18, Federal Court Act and s. 24, Charter for order prohibiting
continuation of search on ground s. 10, Combines Investigation
Act violates Charter, s. 8 protection against unreasonable
search or seizure — Commissioner's s. 10(3) authorization
judicial according to Petrofina case so Trial Division without
jurisdiction to grant prohibition or injunction under s. 18 —
Director's request for authorization and directing and
performance of search not subject to prohibition since not
judicial functions — Search preliminary step not determining
rights — Following decision of Alberta Court of Appeal in
Southam that s. 10(1) and (3) invalid would extend ban on
searches to balance of Canada thereby impeding investigations
— Supreme Court will have to decide and perhaps Combines
Investigation Act should be amended to incorporate greater
controls on search authorizations — Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, ss. 18, 28(3) — Canadian
Charter of Rights and Freedoms, being Part I of the Constitu
tion Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11
ss. 8, 24 — Combines Investigation Act, R.S.C. 1970, c.
C-23, s. 10(1),(3).
An inquiry was undertaken by the Director with regard to
the possible violation of paragraph 34(1)(c) of the Combines
Investigation Act. Armed with authorizations issued under
section 10, the other respondents attended at the applicants'
premises and commenced a search thereof. The applicants
forthwith brought this motion, pursuant to section 18 of the
Federal Court Act and section 24 of the Charter. In it, they
sought an order prohibiting the respondents from continuing
the search, and quashing the authorizations, on the ground that
section 10 was contrary to section 8 of the Charter (which
proscribes unreasonable search or seizure) and hence of no
force or effect. The applicants also requested "such other Order
as may seem just" and, on the basis of this request, suggested at
the hearing that an injunction should be granted. The bringing
of the motion did not itself result in a halting of the search, but
an arrangement was made whereby any documents seized were
to be sealed up and deposited with the Court Registrar pending
final determination of the applicants' rights.
Held, the application is dismissed.
According to the Petrofina case, the decision by the member
of the Restrictive Trade Practices Commission to authorize the
search is judicial or quasi-judicial in nature. This Division
therefore has no jurisdiction in respect of that decision. In light
of subsection 28(3) of the Federal Court Act, it cannot enter
tain a section 18 application, whether for prohibition or for an
injunction. The applicants' proper course would be to bring a
section 28 application in the Federal Court of Appeal. It is
quite possible that the Appeal Division would not accept such
an application, but this possibility is not a ground for the Trial
Division's considering a matter in respect of which it does not
otherwise have jurisdiction.
These conclusions are sufficient to dispose of the instant
application. However, the matters which it raises are of great
importance and urgency; and in order to allow the case to
proceed as expeditiously as possible, it is advisable to deal at
this stage with the merits of the application as well, so that the
Court of Appeal may have all the issues before it at the same
time.
Neither the Commission nor the particular commissioner
who authorized the Director to initiate the search has been
named as a respondent, and those persons who have been so
designated cannot be subjected to prohibition with regard to
the conduct at issue. According to the respondents, prohibition
is available only if the function performed is a judicial or
quasi-judicial one, and their actions pursuant to section 10 did
not satisfy this condition. Although Petrofina establishes that
the Commission is bound to act judicially in authorizing the
search under subsection 10(3), the Director's request for the
authorization is not a judicial act, and his subsequent directing
and performance of the search are simply the execution of a
statutory duty which arises by virtue of the authorization.
Furthermore, the carrying out of a search under subsection
10(1) is only a preliminary step, which does not determine any
right in any way.
As for an injunction, the case is not one in which such relief
should be granted. The balance of convenience militates against
it. Halting the search at this stage would render any subsequent
resumption, and indeed the entire inquiry, quite useless. In
combines cases, documentary evidence is almost always
required to substantiate any suspicions which the Director may
have, and once the person being searched is warned by the fact
of the search that an inquiry is underway, a pause might well
allow for the concealment or destruction of any pertinent
documents. On the other hand, until the issue as to the legality
of the search is finally resolved, the applicants' interests will be
protected by continuing to require that seized documents be
deposited with the Registrar. It is also possible that the search
will not lead to the taking of any further steps against the
applicants, in which event the only inconvenience that they will
suffer will be that attaching to the presence of the investigators
at their premises. These same considerations, together with the
fact that the applicants will have a remedy by way of damages
if the search is illegal or is improperly carried out, also decide
the question of irreparable injury against the applicants.
As to whether section 10 infringed the Charter, the Court
was inclined to the view that there was no contravention. For
one thing, section 8 of the Charter forbids a search or seizure
only if it is unreasonable, and since a search will in most cases
be necessary if the aim of the Combines Investigation Act is to
be achieved, it is somewhat difficult to conclude that a search
provided for in the statute is unreasonable. Secondly, even if
the section 10 search does violate the reasonableness require
ment of section 8, the Court may still apply section 1 of the
Charter, by which the section 8 right (inter alia) is subordinat
ed to demonstrably justifiable limits. Some indication that the
search is indeed justifiable in our free and democratic society
may be deduced from the long and unchallenged existence of
section 10. While the possibility of a challenge under the
Charter did not obtain heretofore, prohibitions against illegal
search were long recognized at common law. A third factor is
that if the investigation should result in the laying of charges
against the applicants, they would then have another opportu
nity to assert their Charter rights. Subsection 24(2) of the
Charter allows for the exclusion of evidence which has been
obtained in a manner that infringes Charter rights or freedoms
so that its admission would bring the administration of justice
into disrepute. Therefore, the applicants could oppose the use of
any evidence obtained as a result of the search with the
argument that section 10 infringes the Charter.
Against these considerations must be set the case of South-
am v. Director of Investigation and Research, in which the
Alberta Court of Appeal concluded that subsections 10(1) and
(3) contravened section 8 of the Charter and were thus invalid.
This Court, however, is not bound by the Southam case, and
while the reasoning in that judgment is persuasive, there are
other factors which weigh against a decision to follow it. For
one thing, the Alberta case did not deal with section 1 of the
Charter. Furthermore, until such time as it might be reversed
on appeal, the judgment of this Court would constitute the
leading authority everywhere in the Country but Alberta;
therefore, were this Court to follow Southam, it would be
extending the ban on section 10 searches to the other Canadian
jurisdictions, and would thereby greatly impede Combines
Investigation Act investigations. The matter will eventually
have to be determined by the Supreme Court, and it is not
desirable to follow the Alberta decision at this stage. Possibly
the Act should be amended so as to incorporate greater controls
upon the authorizing of searches.
CASES JUDICIALLY CONSIDERED
FOLLOWED:
Petrofina Canada Ltd. v. Chairman, Restrictive Trade
Practices Commission, et al., [ 1980] 2 F.C. 386 (C.A.).
APPLIED:
Regina v. Beaney (1969), 4 D.L.R. (3d) 369 (Ont. Co.
Ct.).
NOT FOLLOWED:
Southam Inc. v. Director of Investigation and Research
of the Combines Investigation Branch et al., [1983] 3
W.W.R. 385; 24 Alta. L.R. (2d) 307; 147 D.L.R. (3d)
420 (C.A.).
CONSIDERED:
Dantex Woollen Co. Inc. v. Minister of Industry, Trade
and Commerce, et al., [1979] 2 F.C. 585 (T.D.); Director
of Investigation and Research v. Canada Safeway Ltd.,
[1972] 3 W.W.R. 547 (B.C.S.C.); Attorney-General v.
Beech et al., [1898] 2 Q.B. 147; 67 L.J.Q.B. 585 (Eng.
C.A.); The Minister of National Revenue v. Coopers and
Lybrand, [1979] 1 S.C.R. 495.
REFERRED TO:
"B" v. The Commission of Inquiry pertaining to the
Department of Manpower and Immigration et al., [ 1975]
F.C. 602 (T.D.); Kirzner v. Her Majesty The Queen,
[1978] 2 S.C.R. 487.
COUNSEL:
R. P. Armstrong, Q.C. and J. B. Laskin for
applicants.
I. G. Whitehall, Q.C., M. Rosenberg and D.
A. Kubesh for respondents.
SOLICITORS:
Tory, Tory, DesLauriers & Binnington,
Toronto, for applicants.
Deputy Attorney General of Canada for
respondents.
The following are the reasons for judgment
rendered in English by
WALSH J.: Applicants apply on short notice
which was granted for an order pursuant to section
18 of the Federal Court Act [R.S.C. 1970 (2nd
Supp.), c. 10] and section 24 of [the Canadian
Charter of Rights and Freedoms, being Part I of]
the Constitution Act, 1982 [Schedule B, Canada
Act 1982, 1982, c. 11 (U.K.)]:
(a) prohibiting the respondents and anyone
under their direction and control from continu
ing with the search of the premises of the appli
cants at 401 Bay Street, in the City of Toronto,
pursuant to authorizations given by the respond
ent Lawson A. W. Hunter, Director of Investi
gation and Research, Combines Investigation
Act, on the 18th day of May, 1983, and
(b) quashing the said authorizations
on the ground that section 10 of the Combines
Investigation Act [R.S.C. 1970, c. C-23], pursuant
to which the said authorizations were given, is of
no force and effect as contrary to section 8 of the
Constitution Act, 1982.
The supporting affidavit sets forth that respond
ents Messrs. Bean, Brazeau and ,Besruky armed
with authorizations pursuant to section 10 of the
Combines Investigation Act attended at the prem
ises of applicants on May 19, 1983, and after
discussion with applicants and their attorneys who
were called, and despite being advised that the
authorizations were invalid by reason of a recent
decision of the Court of Appeal in Alberta, never
theless proceeded with the search after a telephone
call to respondent Lawson A. W. Hunter, Director
of Investigation and Research, Combines Investi
gation Act. Applicants then prepared the present
motion returnable the following day, May 20,
because of the urgency of the matter. Although
the search continued an arrangement was made
whereby the documents which the representatives
of the Department of Consumer and Corporate
Affairs wished to seize would be sealed and depos
ited with the Registrar of this Court until final
disposition of the applicants' rights herein.
At the hearing of the motion which lasted a full
day a number of serious questions were raised by
both parties which did not justify being disposed of
summarily by judgment from the bench, and
accordingly the Court by an interim order directed
that, while the search could continue, the provi
sions of the agreement whereby any documents
which the representatives of the Department of
Consumer and Corporate Affairs might wish to
seize were to be sealed and deposited with the
Registrar of this Court until the final disposition
of the matter herein, remained in effect.
The Minister of Justice was represented by
counsel at the hearing and commenced by raising
objections as to the jurisdiction of this Court over
an application of this nature.
It will be convenient at this stage to cite subsec
tions 10(1) and (3) of the Combines Investigation
Act' which read as follows:
1 R.S.C. 1970, c. C-23, as amended.
10. (1) Subject to subsection (3), in any inquiry under this
Act the Director or any representative authorized by him may
enter any premises on which the Director believes there may be
evidence relevant to the matters being inquired into and may
examine any thing on the premises and may copy or take away
for further examination or copying any book, paper, record or
other document that in the opinion of the Director or his
authorized representative, as the case may be, may afford such
evidence.
(3) Before exercising the power conferred by subsection (1),
the Director or his representative shall produce a certificate
from a member of the Commission, which may be granted on
the ex parte application of the Director, authorizing the exer
cise of such power.
As will be seen a search is initiated because the
"Director believes there may be evidence relevant
to the matters being inquired into" and the only
check on his unlimited discretion is provided by
subsection (3) requiring him to produce a certifi
cate from a member of the [Restrictive Trade
Practices] Commission authorizing the exercise of
such power. This was discussed by the Federal
Court of Appeal in the case of Petrofina Canada
Ltd. v. Chairman, Restrictive Trade Practices
Commission, et al. 2 This was of course before the
Constitution Act, 1982, which came into effect on
April 17, 1982. No issue was raised respecting the
validity of section 10. Dealing with the failure to
act judicially however, which is pertinent to the
jurisdiction of this Court, the judgment states at
pages 390-391:
According to the applicant, the Members who gave their
authorization under sections 9(2) and 10(3) failed to act judi
cially in that they exercised their discretion under the statute
without showing sufficient information enabling them to make
enlightened decisions. The applicant says that the Members
who made those decisions should have had before them suffi
cient information to enable them to determine the legality of
the inquiry then in progress and the reasonableness of the belief
of the Director that circumstances warranted the exercise of his
powers under sections 9 and 10.
This argument, in my view, must also be rejected. In making
the decisions that sections 9 and 10 require them to make, the
Members must act judicially. The Court so held on April 19,
1979, when it decided that the decisions here in question were
reviewable under section 28 of the Federal Court Act, R.S.C.
1970 (2nd Supp.), c. 10. However, that duty to act judicially
applies only to the decisions that the Members are required to
make under sections 9(2) and 10(3). Under those provisions,
the Members are neither required nor authorized to determine
the legality of the Director's decision to hold an inquiry; they
2 [ 1980] 2 F.C. 386.
are merely required to ascertain that there is, de facto, an
inquiry in progress under the Act. The Members are not
required or authorized, either, to pass judgment on the reason
ableness of the motives prompting the Director to exercise his
powers under sections 9 and 10. As the Members did not have
to make decisions on those two points, they cannot, in my
opinion, be blamed for not having required information on
those points.
The present application is not directed against
the Commission or against the member of the
Commission who signed the authorization for Mr.
Hunter as Director to initiate the search in an
inquiry pursuant to paragraph 34(1)(c) of the Act
[rep. and sub. S.C. 1974-75-76, c. 76, s. 16(1)]
which reads as follows:
34. (1) Every one engaged in a business who
(e) engages in a policy of selling products at prices unreason
ably low, having the effect or tendency of substantially
lessening competition or eliminating a competitor, or
designed to have such effect,
is guilty of an indictable offence and is liable to imprisonment
for two years.
Respondents' counsel contends that Mr. Hunter
was not exercising a judicial or quasi-judicial func
tion in initiating the search under subsection 10(1)
of the Act since that function had been exercised
by the Commission in authorizing it to proceed.
Since the Commission is not authorized to deter
mine the legality of his decision to hold an inquiry,
nor to pass judgment on the reasonableness of the
motives prompting him to do so but merely to
certify that an inquiry is in progress, members of
the Commission exercise very limited judicial
functions. However this does not mean that the
Director in seeking this authorization is himself
exercising a judicial or quasi-judicial function.
Respondents argue that in order to be subject to
control by means of prohibition a person or body
must be exercising a judicial or quasi-judicial
function and that therefore no prohibition can lie
against the respondents named herein. (See "B" v.
The Commission of Inquiry pertaining to the
Department of Manpower and Immigration et
al. 3 ) It is respondents' contention that in directing
and carrying out the search Mr. Hunter and the
other respondents are merely carrying out a statu
tory duty imposed on them once the authorization
3 [1975] F.C. 602 (T.D.) at page 608.
is approved pursuant to subsection 10(3) by a
member of the Commission.
Moreover carrying out of the search is merely a
preliminary step and does not constitute a final
decision. See the above-cited case at page 613
where Addy J. states:
... I find no difficulty in coming to the conclusion that in the
case at bar, since no right is being in any way determined and
since the duties and functions of the Commission are merely to
report, it is not exercising a judicial or quasi-judicial function
and, therefore, prohibition will not lie against the Commission,
notwithstanding the fact that the right of the applicant to his
reputation might well be seriously affected by the report ....
Section 14 of the Act provides that at any stage
of the inquiry if the Director is of the opinion that
the matter being inquired into does not justify
further inquiry he may discontinue the inquiry.
Section 18 provides that at any stage of an inquiry
if the Director is of the opinion that the evidence
obtained discloses a situation contrary to any
provision in Part V (subsection 34(1) is in Part V),
he shall prepare a statement of the evidence to
submit to the Commission and to each person
against whom an allegation is made, at which time
a time and place for hearing is arranged. At the
conclusion of section 18 proceedings a report is
then made to the Minister by the Commission.
Subsection 47 (1) of the Act [rep. and sub. S.C.
1974-75-76, c. 76, s. 25] reads as follows:
47. (1) The Director
(a) upon his own initiative may, and upon direction from the
Minister or at the instance of the Commission shall, carry
out an inquiry concerning the existence and effect of condi
tions or practices relating to any product that may be the
subject of trade or commerce and which conditions or prac
tices are related to monopolistic situations or restraint of
trade, and
(b) upon direction from the Minister shall carry out a
general inquiry into any matter that the Minister certifies in
the direction to be related to the policy and objectives of this
Act,
and for the purposes of this Act, any such inquiry shall be
deemed to be an inquiry under section 8.
Section 10 by which the search was authorized
follows section 8 [as am. by S.C. 1974-75-76, c.
76, s. 4] which authorizes the Director to cause an
inquiry to be made into all such matters as he
considers necessary to inquire into with the view of
determining the facts when he has reason to
believe that an offence under Part V has been or is
about to be committed. The search is clearly in aid
of this inquiry. Subsection (2) of section 47 pro
vides that the Commission must then consider any
evidence or material brought before it and report
to the Minister which report is deemed to be a
report under section 19. Section 19 provides for a
full report to be transmitted by the Commission to
the Minister, and that the Minister may publish
and supply copies of it. It is evident that the
making of a search is far from being a final step by
which any right is being in any way determined.
Prohibition therefore does not lie.
Applicants suggest that although the wording of
the motion seeks an order "prohibiting" respond
ents from continuing the search, paragraph 3 of
the motion seeks "such other Order as may seem
just", and that possibly an injunction would be
applicable. Respondents submit that an applica
tion for injunction should not in any event be made
by an originating notice of motion but merely as
an accessory to an action. (See in this connection
the case of Dantex Woollen Co. Inc. v. Minister of
Industry, Trade and Commerce, et al. 4 in which
Addy J. states at pages 586-587:
Injunctive relief must be sought by way of action commenced
in a normal manner by the issuing of a statement of claim. A
motion for an interim or interlocutory injunction may of course
be entertained before the action is heard. The notice of motion
may be served either at the same time as or following the
issuing of the statement of claim. In cases of special urgency, a
motion for interim relief may be launched previous to the
instituting of the action but would normally only be entertained
when there is an undertaking by the applicant to forthwith
issue a statement of claim to support the motion.)
Applicants expressed their willingness to start such
an action if necessary. Even if this obstacle were
overcome applicants would be in no better posi
tion. As already indicated the carrying out of a
search may not lead to any further steps being
taken against applicants, in which event the only
prejudice which they would have suffered would be
the inconvenience arising from the search. On the
balance of convenience a halt of the search at this
time would render the entire inquiry useless. With
4 [1979] 2 F.C. 585 (T.D.).
out making any implication of improper conduct in
any way against applicants, it is self-evident that
in combines cases documentary evidence is almost
always necessary to substantiate any suspicions
which the Director may have and that once the
party being searched is as a result of the search
warned that an inquiry is under way any pertinent
documents might well be concealed or destroyed so
that any resumption of a search at a later date
would be useless. On the other hand by continuing
the search as has been ordered in the present case,
but protecting applicants by requiring that any
documents seized be sealed and deposited with the
Registrar of this Court until the issue of the
validity of the search is finally disposed of, appli
cants only suffer the inconvenience of having rep
resentatives of the Combines Investigation Depart
ment in their premises conducting a search. The
balance of convenience is therefore strongly in
favour of respondents, as is the question of irrepa
rable injury. If the search is illegal or is improperly
carried out applicants have a remedy by way of
damages, while on the other hand respondents
might just as well abandon the inquiry altogether
if the search is interrupted. No injunction would
be granted therefore even if applicants had specifi
cally asked for it.
The alternative issue of jurisdiction raised by
respondents arises from the fact that if the deci
sion of the member of the Commission who
authorized the search is a judicial or quasi-judicial
decision, which appears to have been decided in
the Petrofina case (supra), applicants' remedy is
by way of a section 28 application to the Federal
Court of Appeal. The Trial Division would not
have jurisdiction over the Commission or said
member of the Commission even if he had been
made a party to the present application, nor would
the Trial Division have any jurisdiction to enter
tain a section 18 application, whether it be for
prohibition or for interim injunction, in view of
subsection 28(3) of the [Federal Court] Act.
It may well be, as applicants point out, that a
section 28 application might not be accepted by
the Court of Appeal since, as indicated, there is
nothing in the nature of a final judgment in the
carrying out of a search and moreover as the
Petrofina judgment (supra) points out, members
of the Commission are not required nor authorized
to determine the legality of the decision to hold an
inquiry. The fact that applicants might encounter
difficulty in connection with a section 28 applica
tion does not of course justify the Trial Division
entertaining an application over which it does not
have jurisdiction.
While this conclusion would by itself have been
sufficient to dispose of the present application
without inquiring into the merits of it, it is evident
that the matter is one of great importance and
urgency and most likely will only be finally deter
mined by judgment of the Supreme Court. If the
Trial Division merely rejected the application on
procedural grounds, this would inevitably be fol
lowed by an appeal, and possibly also by a section
28 application to the Court of Appeal, and if that
Court then decided that the Trial Division did in
fact have jurisdiction over the present application
and referred the matter back to it to be dealt with,
considerable time would be lost. I consider it advis
able therefore that this Court should subsidiarily
deal with the merits of the application, even if
somewhat summarily, so that all issues may even
tually be before the Court of Appeal simultaneous
ly.
In dealing now with the argument arising out of
the Canadian Charter of Rights and Freedoms of
the Constitution Act, it will be convenient to cite
sections 24, 8, and 1 which read respectively as
follows:
24. (1) Anyone whose rights or freedoms, as guaranteed by
this Charter, have been infringed or denied may apply to a
court of competent jurisdiction to obtain such remedy as the
court considers appropriate and just in the circumstances.
(2) Where, in proceedings under subsection (1), a court
concludes that evidence was obtained in a manner that
infringed or denied any rights or freedoms guaranteed by this
Charter, the evidence shall be excluded if it is established that,
having regard to all the circumstances, the admission of it in
the proceedings would bring the administration of justice into
disrepute.
8. Everyone has the right to be secure against unreasonable
search or seizure.
1. The Canadian Charter of Rights and Freedoms guaran
tees the rights and freedoms set out in it subject only to such
reasonable limits prescribed by law as can be demonstrably
justified in a free and democratic society.
If this were the first time that this issue had
come before the Court I would have been inclined
to deal with it by upholding the validity of section
10 of the Combines Investigation Act. Section 8 of
the Charter includes the word "unreasonable" as
qualifying the search or seizure and it is at first
sight somewhat difficult to conclude that sections
of the statute providing for a search, which evi
dently will be necessary in most cases if the object
of the statute is to be attained, can be considered
as unreasonable.'
Moreover by section 1 the rights and freedoms
set out in the Charter, including security against
unreasonable search, are subject to such reason
able limits prescribed by law as can be
demonstrably justified in a free and democratic
society. The section in question has been in the
Combines Investigation Act for over 30 years with
out complaint and while there was no Charter of
Rights and Freedoms in effect at the time,
common law rights against illegal search have long
been recognized and were in effect. The long
existence of this section, unchallenged, is some
indication that the search provided for in the
Combines Investigation Act is justified in our free
and democratic society.
In a pre-Charter case of Director of Investiga
tion and Research v. Canada Safeway Ltd. 6 it was
held in British Columbia that a search by virtue of
section 10 did not justify the seizure of privileged
documents protected by solicitor-client privilege.
At page 548 the judgment states:
The respondent submits that neither the Director nor any
representative of his is entitled to access to documents which
are privileged as aforesaid, but otherwise raises no objection to
the Director and his representatives being on its said premises
and conducting their inquiry as they see fit. [Emphasis mine.]
5 For an interesting discussion of what may be "reasonable"
in relation to the type of offence being investigated see the
judgment of Laskin C.J. in Kirzner v. Her Majesty The Queen,
[1978] 2 S.C.R. 487 at pages 492-493 dealing with entrapment.
6 [1972] 3 W.W.R. 547 (B.C.S.C.).
At page 550 an extract from the judgment of
Chitty L.J. in Attorney-General v. Beech et al.,
[1898] 2 Q.B. 147; 67 L.J.Q.B. 585 [Eng. C.A.] at
page 590 is quoted as follows:
It is unquestionably within the competence of Parliament ... to
modify or abrogate for the purpose of the Act any rule of law
or equity which otherwise would be applicable to the subject-
matter. Whether it has done so or not must always be a
question of the true construction of the particular statute under
consideration. The right, and indeed the only, method of inter
pretation is to ascertain the intention of the Legislature from
the language and provisions of the Act itself. In construing a
statute regard must be had to the ordinary rules of law
applicable to the subject-matter, and these rules must prevail
except in so far as the statute shews that they are to be
disregarded; and the burden of shewing that they are to be
disregarded rests upon those who seek to maintain that
proposition.
While section 52 of the Constitution Act, 1982
would permit a finding that section 10 of the
Combines Investigation Act is of no force or effect
as being inconsistent with section 8 of the [Consti-
tution] Act in that it is "unreasonable", the Court
may still apply section 1 of the [Constitution] Act
and find that in the context of the Combines
Investigation Act section 10 can be "demonstrably
justified in a free and democratic society".
Finally subsection 24(2) would protect appli
cants against the use of any evidence obtained
during the search if it is obtained in a manner that
infringed or denied any rights or freedoms guaran
teed by the Charter so that the use of it in the
proceedings would bring the administration of jus
tice into disrepute. Applicants would therefore, in
the event that any charges were laid as a result of
the investigation, have a further opportunity to
object to the use of any evidence obtained as a
result of the search by raising the argument at that
stage that the sections of the Combines Investiga
tion Act providing for the issue of the search
warrant are an infringement of the Canadian
Charter of Rights and Freedoms.
A different conclusion was reached however in
the unanimous judgment of a five-man bench of
the Alberta Court of Appeal in the case of South-
am Inc. v. Director of Investigation and Research
of the Combines Investigation Branch et al.
[[1983] 3 W.W.R. 385; 24 Alta. L.R. (2d) 307;
147 D.L.R. (3d) 420]. That judgment examines at
some length the nature of search warrants and the
common law and Criminal Code [R.S.C. 1970, c.
C-34] rights to them and the jurisprudence exist
ing prior to the Canadian Charter of Rights and
Freedoms, and concludes that minimal standards
must be met before a search warrant is issued.
After analyzing the background and purposes of
the Combines Investigation Act it concludes that
the functions of inquiry and research are not
always fully separated from the functions of
appraisal and reporting in the Act as had been
deemed advisable. [At page 318 Alta. L.R.] the
judgment states, after analyzing various sections of
the Act:
The result is that circumstances may arise where the director is
acting as investigator and prosecutor and the commission is
acting as investigator and judge with respect to breaches of the
Act. Even though neither the director nor the commission can
launch proceedings by way of indictment for offences under the
Act such proceedings may follow the cumulative results of the
discharge by each of them of their assigned functions.
It follows that, even though the Act generally separates the
functions of the director from the functions of the commission,
there still remains an overlap between the two functions.
After stating that the Director's decision to
apply to exercise the powers set out in subsection
10(1) is an administrative function involving policy
matters it is pointed out that there would be no
restraint upon the powers but for subsection 10(3).
The Supreme Court judgment of The Minister of
National Revenue v. Coopers and Lybrand' was
referred to in which Mr. Justice Dickson held [at
page 508] that "in giving an authorization under s.
231(4) of the Income Tax Act, the Minister's
actions are of an administrative nature, and that
no obligation rests at law upon the Minister to act
on a judicial or quasi-judicial basis." That judg
ment also referred however to the fact that Parlia
ment built into the legislation a review of the
ministerial decision by interposing a judge between
the Revenue and the taxpayer in recognition that
the right of search is in derogation of the principles
of the common law and open to abuse.
[1979] 1 S.C.R. 495.
The Alberta judgment concludes that subsection
10(3) does not support the conclusion that the
commissioner is an independent arbiter or a neu
tral and impartial person. Furthermore it does not
meet the requirement that the person seeking to
exercise the power had reasonable grounds to sus
pect that an offence had been committed. Refer
ence is made to the Petrofina Canada Ltd. judg
ment (supra). It only refers to the second part of
the quotation from the judgment cited above,
beginning with the words "Under those provi
sions", making no reference to the finding that
members of the Commission act judicially in
making their decisions. While the judgment does
hold [at page 323 Alta. L.R.] "it is a reasonable
implication of reading s. 10(1) and s. 10(3) to
gether that the commission, before authorizing a
warrant, must be satisfied that the conditions in s.
10(1) exist", it goes on to state [at the same page]
that:
If the powers accorded a member of the commission under s.
10(3) are as found by the Federal Court of Appeal in the
Petrofina case, it follows that there is no review of the right to
exercise the powers accorded persons under s. 10(1) in the
course of an inquiry.
Finally it is pointed out that there is no require
ment in subsection 10(3) that an application be
supported by evidence on oath and that it is an
obvious omission in the Act not to require evidence
on oath when the power sought to be exercised is
an invasion of an individual's right of privacy. It is
concluded therefore that subsection 10(3) and, by
implication, subsection 10(1) of the Act are incon
sistent with the provisions of section 8 of the
Charter and are therefore of no force or effect.
While great respect must be accorded to the
well-reasoned judgment of the Court of Appeal of
Alberta, this Court is not bound by it. A similar
question was discussed in the case of Regina v.
Beaney 8 . At page 375 the judgment states:
There is no legislative rule of law in Ontario to the effect that
any Court in this Province is bound by the decisions of extra-
provincial Courts, or, indeed, of any Courts. As Professor
Hubbard concludes [p. 9]: "Tout ce qui nous reste, c'est le
principe que j'appelle la futilité de déroger, the futility of
divergence, soit une solution pratique." Within the hierarchy of
appeals it would be futile for a lower Court Judge to render a
decision which is inconsistent with the prior decisions of the
8 (1969), 4 D.L.R. (3d) 369 [Ont. Co. Ct.].
Courts to which an immediate or an ultimate appeal from him
may be taken, for he will in all likelihood be reversed.
The Court of Appeal of Manitoba stands outside the
hierarchy of Courts of this Province and, while there are many
compelling reasons why a Judge of first instance in this Prov
ince ought to try to conform with the decisions of other
provincial appellate Courts, in my respectful submission he is
not bound by them. The point at issue here is underscored by
the undoubted consequence that if, in the opinion of the Court
of Appeal of Ontario, I should be correct in the substantive
point of law in question, that Court surely would not reverse my
judgment simply because I failed to follow an extra-provincial
appellate decision with which it, too (ex hypothesi), disagreed.
It is of interest to note that the Alberta judg
ment did not deal with section 1 of the Charter,
not being required to do so since respondents did
not seek to support section 10 of the Combines
Investigation Act on that basis. In the present case
this argument was raised before me and I have
dealt with it.
Moreover respondents point out that whereas
the Alberta judgment (which I am informed is
under appeal to the Supreme Court) is authority
for stating that subsections (3) and (1) of section
10 of the Combines Investigation Act are of no
force or effect, being inconsistent with the provi
sions of section 8 of the Charter, a judgment of
this Court would have effect throughout all the
other provinces of Canada until and unless
reversed on appeal. This would in effect stop the
issue and use of any such search warrants any
where in Canada other than in Alberta and greatly
impede any investigations under the Combines
Investigation Act, many of which are currently
under way involving the use of such search war
rants. While it is undoubtedly true that a court
should not in deciding an issue take possible conse
quences of the judgment into account, but must
interpret the law as it believes it should be inter
preted, and I find the reasoning of the Alberta
Court of Appeal in the Southam Inc. case persua
sive, nevertheless I do not believe it desirable to
follow it at this stage of proceedings, thereby
giving effect elsewhere in Canada to a matter
which will undoubtedly have to be eventually
determined by the Supreme Court.
The interpretation of the Canadian Charter of
Rights and Freedoms has already given rise to a
number of conflicting judgments in various courts
in various provinces which can only be finally
resolved by judgments of the Supreme Court of
Canada, and in some cases (the recent "gating"
decision respecting the immediate re-arrest of pris
oners entitled to be released on mandatory supervi
sion comes to mind) legislation has had to be
immediately introduced so as to overcome the
consequences of such a decision. It may well be
that the same situation applies here and that the
Combines Investigation Act should be amended so
as to require the intervention of a judge before the
issue of a search warrant which can only be
obtained under oath as to the reasonable grounds
on which the Director "believes there may be
evidence relevant to the matters being inquired
into". Certainly at present it lacks the controls
normally found in the common law or Criminal
Code before search warrants can be issued. How
ever for the present and so that the entire issue will
be before the Court of Appeal and eventually the
Supreme Court of Canada I find that, in addition
to lack of jurisdiction in this Court to grant the
relief sought by applicants herein, an order should
not be made on the merits of the application
quashing the authorization on the ground that
section 10 of the Combines Investigation Act is of
no force or effect being contrary to section 8 of the
Canadian Charter of Rights and Freedoms.
Applicants' application is therefore dismissed
with costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.