And the McCarties win! Well not actually "won" in the sense that they have been found not guilty of tax evasion but they are 90% of the way there with a pair of recent decisions. I said in an earlier post in this discussion;
The end result of this decision is that the judge is digging deeper into the issue of the lost notes and he may well conclude that the defendant's Charter rights have been infringed and, as a result, ban the disputed evidence. If so the prosecution will probably collapse.
As I explained in detail in prior posts they had a
Jarvis hearing where the judge had to determined whether or not the CRA had been investigating the McCarties as possible tax evaders but not telling them. If this was the case then any evidence gathered in this period of ignorance by the McCarties would be barred from being used against them. If you want to know the details refer to the preceding posts. They won on the
Jarvis issue and the judge excluded all evidence gathered from the point that he detemined that the CRA had started a criminal investigation to the date of the issuance of the search warrant. Now the McCarties wanted the evidence gathered from the search also excluded.
We'll start the update with this decision;
R. v McCartie
2015 BCPC 233
http://canlii.ca/t/gkx70
This was released last month and it hit the CRA from an angle which I had not considered here. Section 8 of the Canadian Charer of Rights and Freedoms which states;
"8. Everyone has the right to be secure against unreasonable search or seizure."
The McCarties were claiming that the search of their house was unreasonable under Section 8 because of the CRA's refusal to produce the search warrant for Mrs. McCartie's review. The facts relating to the search that the McCarties claimed constituted an unreasonable search were;
[2] The pertinent evidence was given by Ms. Sundberg (the CRA investigator in charge of the search), Mr. Stetchman (another CRA investigator who was assisting her) and Constable Reynolds of the RCMP. There were several small differences in their recollections of the sequence of events. Where their memories differ, I accept the evidence of Mr. Stetchman in preference to the others. Constable Reynolds frankly admitted that he was unable to recall a number of points of detail. Ms. Sundberg appeared to me to be confused and uncertain on several points. By contrast, Mr. Stetchman’s recollection was clear, consistent and logical.
[3] On August 3, 2010, Ms. Sundberg applied for and was granted a warrant to search Mr. & Ms. McCartie’s home in Nanaimo, British Columbia.
[4] Just before 9:00 a.m. on August 11, 2010, Ms. Sundberg attended at the McCartie home. She was accompanied by Mr. Stetchman, Constable Reynolds, eight other CRA investigators and one other RCMP officer.
[5] Ms. Sundberg, Mr. Stetchman and Constable Reynolds went to the front door. Constable Reynolds was wearing his police uniform. Ms. Sundberg had a copy of the warrant in her hand and the original warrant in a binder under her arm.
[6] Ms. Sundberg knocked loudly and rang the doorbell, but there was no response. She knocked and rang several times over the next 5 minutes, again without eliciting a response. Ms. Sundberg, Mr. Stetchman and Constable Reynolds discussed whether to call for a locksmith to open the door. The other RCMP officer went around to the side of the house, and reported that he could hear sounds of movement, indicating that someone was in the house.
[7] At 9:05 a.m., a woman opened the door to the extent permitted by the security latch on the inside. The woman was Ms. McCartie, but none of Ms. Sundberg, Mr. Stetchman or Constable Reynolds knew that at the time. Mr. Stetchman estimated the aperture at one inch. Ms. Sundberg’s estimate was 3 inches. Ms. Sundberg identified herself as a CRA investigator, informed Ms. McCartie that Ms. Sundberg had a warrant to search the house, and demanded that Ms. McCartie open the door. Ms. McCartie “asked for” the warrant. Although no attempt was made to quote her verbatim, I take this to mean that Ms. McCartie asked to be handed the warrant, and Mr. Stetchman agreed in cross-examination that such was the purport of her request. Ms. Sundberg replied by asserting that Ms. McCartie was obliged to open the door, and that, if she did so, Ms. Sundberg would enter the house and “go over” the warrant with her. Ms. Sundberg asked Ms. McCartie to state her name. Ms. Sundberg asserts that Ms. McCartie replied “I don’t know”, but that assertion is not corroborated by Mr. Stetchman. I am satisfied that Ms. McCartie was asked to state her name, and declined to do so, but am not satisfied that she said that she did not know her own name. Ms. McCartie said that she was going to call a lawyer, and closed the door.
[8] Ms. McCartie opened the door, again to the extent permitted by the security latch, about a minute later. Constable Reynolds told her that Ms. Sundberg had a warrant, and that Ms. McCartie was obliged to open the door. Ms. McCartie asked to see his business card and Constable Reynolds showed her his police badge. Constable Reynolds told Ms. McCartie that he had authority to break down the door, and that he would do so unless she opened it immediately. Ms. McCartie closed the door.
[9] A few minutes later, Ms. McCartie unlatched and opened the door. Accompanied by her daughter, she stepped out and asked, for the second time, “for the warrant”. Ms. Sundberg replied that, if Ms. McCartie would go into the house with Ms. Sundberg, Ms. Sundberg would “go over” the warrant with her. Ms. McCartie declined that invitation.
[10] At 9:12 a.m., Ms. McCartie and her daughter walked to their vehicle and drove off, leaving the front door open. The RCMP officers entered the house to satisfy themselves that there were no threats to the investigators’ safety in the house. After that was done, the CRA investigators entered and searched the house. During the search, they seized a number of documents which the Crown proposes to tender in evidence at this trial.
So how is this a violation of their Constitutional rights? Let the judge tell it;
[12] I asked Ms. Sundberg why she did not hand Ms. McCartie a copy of the warrant when Ms. McCartie asked for it. Ms. Sundberg gave three reasons:
a. She wanted Ms. McCartie to open the door, and was offering her the chance to “go over” the warrant, after she was inside the house, as an inducement to that end.
b. She did not know that the woman at the door was Ms. McCartie, and she wanted the woman to identify herself so that Ms. Sundberg would know who she was serving with the warrant.
c. It was her opinion that she was not obliged to produce the warrant (or a copy) until she had executed the warrant, and that she would not execute the warrant until she crossed the threshold, which she had not done at the time of Ms. McCartie’s request.
None of those reasons rendered it impracticable for Ms. Sundberg to have given Ms. McCartie a copy of the warrant when Ms. McCartie first asked for it. It would have been perfectly simple and easy for Ms. Sundberg to slide a copy of the warrant through the 1 - 3 inch aperture and into Ms. McCartie’s hand.
[13] Mr. McFadgen, for the Crown, says that Ms. Sundberg was not obliged to comply with Ms. McCartie’s request because:
a. Ms. Sundberg and Constable Reynolds were reasonably concerned about the safety of the investigators and about the risk that evidence was being destroyed while the investigators were waiting on the doorstep. He relies upon Constable Reynolds’ description of the situation as escalating and potentially dangerous.
b. Ms. McCartie asked to be handed a copy of the warrant. The statute obliges the searcher to “produce” the document. “Produce” does not mean “hand over a copy”.
c. Ms. Sundberg was correct in her assertion that she had not “executed” the warrant at the time of Ms. McCartie`s requests.
[14] In support of his first point, Mr. McFadgen refers to R vs Bohn [2000] BCJ No. 867; 2000 BCCA 239 (CanLII); 145 CCC (3d) 320, in which Justice Ryan said @ paragraph 34 (underlining added):
Failure to produce the warrant on request, without good reason, is in my view, a significant breach of s. 8 [of the Canadian Charter of Rights & Freedoms]
I observe that Justice Ryan was there discussing whether, and in what circumstances, a breach of section 29(1) of the Criminal Code may be a breach of section 8 of the Charter. I address that subject, in the context of this case, below. Justice Ryan was not discussing what circumstances would constitute a breach of section 29(1). Section 29(1) subjects the duty to produce a copy of the warrant to only one limiting condition - a copy must be produced on request unless it would not be “feasible” to do so. As noted, in the circumstances of this case, it would have been perfectly feasible for Ms. Sundberg to hand Ms. McCartie a copy of the warrant (which Ms. Sundberg was holding in her hand) at the moment that Ms. McCartie asked for it. Section 29(1) does not authorize the searcher to refuse to produce the warrant for any other reason.
[15] There is also a pragmatic answer to Mr. McFadgen’s first point. Neither the risk to the safety of the investigators nor the risk of destruction of evidence would have been in any way increased by handing Ms. McCartie a copy of the warrant when she asked for it, nor was either risk reduced in any way by withholding the document. There was simply no relationship between those risks, real or perceived, and the request for a copy of the warrant.
A this point the judge considered what "produce" means. He decided on the definition “bring forward for consideration, inspection or use”. This led to the conclusion;
[17] . . . . . . . In the circumstances of this case, production could easily have been effected by handing Ms. McCartie a copy. Ms. Sundberg did not do that because she wanted to use the document as a lever to induce Ms. McCartie, first, to open the door and allow Ms. Sundberg to enter, second, to identify herself, and, third, to engage in a discussion of the warrant with Ms. Sundberg. Unless and until shown a copy of the warrant, Ms. McCartie was under no obligation to open the door. The circumstances in which a citizen has an obligation to identify herself when asked to do so by a police officer were discussed in R vs LSL 1991 CanLII 7820 (SK QB), [1991] SJ No. 30; 89 Sask R 267. No such circumstances pertained in this case. Canadians are, generally, courteous and respectful people. Most of us willingly identify ourselves when asked by a police officer, as we should. However, to elevate a generally-accepted standard of courtesy to a legal obligation would create a grave threat to the civil liberties of Canadians. Ms. McCartie’s refusal to identify herself did not justify Ms. Sundberg’s refusal to comply with the obligation imposed upon her by section 29(1). Ms. McCartie was under no obligation to speak with Ms. Sundberg. Indeed, as a person under investigation, she was wise to decline that invitation.
[18] There was a simple, easy and harmless mode of production available to Ms. Sundberg which would not require Ms. McCartie to open her house to strangers. I conclude that such was the mode of production required by the statute in the circumstances.
[19] Mr. McFadgen cited no authority in support of his third point, and I have found none which discusses when a warrant may be said to have been “executed”. None of the dictionaries which I have consulted offer enlightenment.
[20] In Bohn at paragraph 31, Justice Ryan quoted the following passage with approval:
The reason for the requirement that an officer executing the warrant have it available for production, is to allow the occupant of the searched premises to know: (1) why the search is being carried out, so as to enable the occupant to properly assess his or her legal position; and (2) that there is, at least, a colour of authority for the search and that forcible resistance is improper. This last rationale also plays a role in the second procedural requirement for a valid search, that the peace officers announce themselves before entering the premises to be searched.
Those objectives would be rendered entirely moot if the occupant is not entitled to see the warrant before the searchers cross the threshold. Once the searchers enter the home, the violation of privacy has already occurred and the opportunity to resist an unauthorized intrusion has passed. The purpose of section 29(1) is to entitle the occupant of a house to satisfy herself as to the searcher’s legal authority to enter the house before the occupant is obliged to allow the searcher to enter. The section is perfectly clear. The occupant is not required to accept the searcher’s assertion that she has a warrant and a right to enter. The occupant is entitled to demand production of the warrant, as Ms. McCartie did.
[21] Section 29(1) imposes a production obligation on a class of persons; i.e. those who execute warrants. That, in itself, does not tell us when such persons must produce the warrant. The time is determined by the final phrase of section 29(1); i.e. “… when requested to do so”. Ms. Sundberg was plainly a person who executed a warrant. While she was in the course of doing so, Ms. McCartie asked her to produce the warrant. Applying the plain words of the section, Ms. Sundberg was obliged to do so when the request was made. I do not say that a person executing a warrant must always respond instantly to a request for production. Circumstances may render it impracticable to do so. However, the person must comply with the request as soon as it is practicable to do so. In this case, as noted above, it would have been perfectly practicable for Ms. Sundberg to do so immediately upon Ms. McCartie’s first request.
[22] I conclude that, in this case, Ms. Sundberg failed to comply with section 29(1) of the Criminal Code.
And, drumroll;
[24] Accordingly, I am bound to conclude that Ms. Sundberg’s failure to comply with section 29(1) of the Criminal Code infringed Ms. McCartie’s rights under section 8 of the Charter, unless the evidence discloses a “good reason” for that failure. In paragraph 12, above, I identified the reasons given by Ms. Sundberg. In paragraphs 13 - 21, I explained why those were not good reasons. I do not think that they justify her failure to comply with section 29(1).
[25] As no good reason has been established for Ms. Sundberg’s failure to comply with section 29(1) of the Criminal Code, it follows that her conduct infringed Ms. McCartie’s rights under section 8 of the Charter.
So where does this leave us? To this decision released earlier this month.
R. v. McCartie, 2015 BCPC 254
http://canlii.ca/t/gl9gv
[8] Two breaches of section 8 of the Canadian Charter of Rights & Freedoms have been established:
a. The consequence of my decision to quash the search warrant is that the search of the McCartie home was not authorized by law. A search which is not authorized by law is an unreasonable search: R vs Klimchuk 1991 CanLII 3958 (BC CA), [1991] BCJ No. 2872; 67 CCC (3d) 385.
b. The refusal of Ms. McCartie’s request for production of the search warrant before the investigators entered the house was, itself, a breach of section 8: R vs Bohn [2000] BCJ No. 867; 2000 BCCA 239 (CanLII); 145 CCC (3d) 320.
The question on the present application is whether the appropriate remedy for those breaches is to exclude from evidence the documents seized by CRA during the search.
I've somehow missed the part in one of the innumerable preceding decisions where the judge quashed the warrant because it was not properly authorized. I'll take the judge's word for it, I'm not going back to check. I'm guessing that it resulted from the prior review where I discussed that the CRA had gathered evidence before the search on a civil basis when the judge determined it should have been on a criminal basis with the McCarties advised that they were being investigated. As a result the judge excluded all of the evidence gathered while the Crown was auditing criminally but acting civil. Since this evidence was later used to procure the search warrant it was approved on the basis of invalid evidence and was therefore not legally authorized.
So the Court decided that the remedy for these two breaches of Section 8 was;
Conclusion on the Three Lines of Enquiry
[27] After careful reflection, I think that receipt of the evidence seized under the search warrant would pose a greater risk of injury to public confidence in the administration of justice and the fairness of the tax system than its exclusion. Applying Grant, I must therefore exclude the evidence.
[28] Ms. Sundberg, CRA’s lead investigator in this case, acknowledged that, without the documents procured during the audit process, she would have had no reasonable grounds upon which to apply for a search warrant, and would not have done so. If it were proven that CRA procured the audit documents in breach of the constraint imposed by Jarvis, it would be necessary to consider whether the principle of derivative use immunity would support exclusion of the documents seized under the search warrant: R vs RJS 1995 CanLII 121 (SCC), [1995] 1 SCR 451 @ paragraphs 160 - 204. Unless Mr. & Ms. McCartie can prove that CRA misused its audit powers, the question of derivative use immunity does not arise. The loss of CRA’s internal documents, and the omission to create others, is a material impediment to the presentation of Mr. & Ms. McCartie’s case on the issue of derivative use immunity
[29] By its unexplained and unjustified conduct in relation to its internal documents, CRA has materially impaired Mr. & Ms. McCartie’s ability to defend the charges made against them. The right to a fair trial is both guaranteed by section 11(d) the Charter and fundamental to the preservation of public confidence in the fairness of the justice system: R vs Collins 1987 CanLII 84 (SCC), [1987] 1 SCR 265 @ paragraph 36. A fair trial of tax evasion cases is also fundamental to the preservation of public confidence in the fairness of the tax system and its administration.
[30] Neither a judicial stay of the prosecution nor an order to exclude evidence should be granted if a lesser remedy would suffice to ensure a fair trial: R vs O’Connor [1995] 4 SCR 651 @ pages 465-466; R vs Bjelland 2009 SCC 38 (CanLII), [2009] 2 SCR 651 @ paragraph 19. In this case, a judicial stay of the prosecution is not necessary for that purpose, but an order for exclusion of the evidence seized under the authority of the search warrant is.
Disposition
[31] The documents seized under the authority of the search warrant will be excluded from evidence at this trial.
It looks to me like this might well mean that the Crown will have to abandon the case because they no longer have enough allowable evidence to prove criminal tax evasion. If so the McCarties aren't off the hook because they can still be assesses civilly on unreported income but they would face no criminal consequences.
The McCarties have been unrepresented through all of this carrying their defense themselves. I have to say, given the results, that they've done an excellent job.