Supreme Court Of Canada To Decide If A Lawyer Subject To Enforcement Proceedings Can Claim Solicitor-Client Privilege

The Supreme Court of Canada recently granted leave to appeal in Minister of National Revenue v Duncan Thompson, 2013 FCA 197, which touches on the issue of whether a lawyer subject to enforcement proceedings can claim solicitor-client privilege over his accounts receivable.

Thompson was a lawyer, and the subject of enforcement proceedings pursuant to the Income Tax Act. The CRA issued a Requirement seeking information and documents pertaining Thompson's income and expenses, and assets and liabilities, including a current accounts receivable listing. Thompson provided some, but not all, of the information set out in the Requirement. In particular, he had provided no details regarding his accounts receivable other than a total balance owing.

Thompson challenged the Requirement, in part, based on solicitor-client privilege, and sought a determination of whether s. 231.2(1) of the Income Tax Act can be interpreted, applied or enforced so as to require a lawyer who is the subject of enforcement proceedings by the CRA to divulge information about his clients, including their names and amounts owing, information that he claims is protected by solicitor-client privilege. Thompson also argued that the Requirement was akin to an unreasonable search or seizure and thus was contrary to s. 8 of the Charter.

TheFederal Court ordered that Thompson must comply with the Requirement, and ordered that he provide unredacted financial records to the Minister. The Court of Appeal allowed Thompson's appeal, but only because the Federal Court did not review the accounts receivable listing to ensure solicitor-client privilege did not apply to protect each of Thompson's clients individually. The Court of Appeal upheld the Federal Court's order that Thompson...