[2000] 4 F.C. 373
A-671-98
Brian A. Donovan (Appellant)
v.
Her Majesty the Queen and Attorney General of Canada (Respondents)
Indexed as: Donovan v. Canada (Attorney General) (C.A.)
Court of Appeal, Richard C.J., Linden and Robertson JJ.A.—Fredericton, May 10; Ottawa, June 6, 2000.
Income tax — Reassessment — Vacating reassessment — Appeal from T.C.C. decision dismissing appeal from reassessments involving income received, not reported — Appellant arguing wrongs committed against him should be considered cumulatively as sufficient grounds to vacate reassessments — For reassessment to be vacated, conduct must be flagrant, egregious violation of appellant’s rights; lesser remedy of exclusion of evidence must be inadequate to vindicate Charter violation; illegally obtained evidence must be so fundamental to reassessments they cannot be sustained without it — Cumulative effect of wrongs not so flagrant, egregious as to support extreme remedy of vacating reassessments in light of minimal importance of additional evidence obtained by violations — Not unfair to force appellant to go to trial as Crown having reasonable chance of proving case on basis of legally obtained evidence.
Constitutional Law — Charter of Rights — Enforcement — Charter, s. 24(2) permitting exclusion of evidence obtained in violation of Charter rights, freedoms where admission would bring administration of justice into disrepute — Appellant in income tax reassessment case submitting cumulative effect of wrongs committed against him sufficient basis to exclude evidence pursuant to s. 24(2) — (1) That auditor filing appellant’s return without authorization not serious violation of rights — (2) That auditors cooperating with criminal investigators without appellant’s knowledge not warranting exclusion of evidence herein — S.C.C. test for exclusion of evidence pursuant to s. 24(2), articulated in criminal context — Courts excluding such tainted evidence in criminal proceedings — But discretion to exclude evidence used with more restraint in civil matters — (3) Search warrants issued under Income Tax Act, s. 231.3 unconstitutional pursuant to subsequent S.C.C. decision — Although search pursuant thereto serious, unreasonable, not in bad faith — Admission of resulting evidence not bringing administration of justice into disrepute — (4) But subsequent search pursuant to new warrant obtained based on incomplete information unreasonable, would bring administration of justice into disrepute — T.C.C. decision varied to exclude new evidence related to income obtained pursuant to second warrant.
This was an appeal from a decision of the Tax Court of Canada dismissing appeals from assessments for 1986, 1987 and 1988. The appellant argued that the cumulative effect of four “wrongs” committed against him involving search and seizure was a sufficient basis upon which to vacate the reassessments with respect to income received but not reported, or that illegally obtained evidence should be excluded pursuant to Charter, subsection 24(2). Subsection 24(2) permits the exclusion of evidence obtained in violation of Charter-guaranteed rights or freedoms if the admission thereof would bring the administration of justice into disrepute.
The first “wrong” complained of was the filing of the appellant’s tax return by an auditor without the appellant’s authorization. The appellant had signed a return in blank and authorized his accountant to complete and file it. The accountant showed the auditor a draft of the return. After the audit, the auditor took the return back to his office and filed it. The second wrong involved the cooperation of the auditing staff and the criminal investigators in the early stages of the investigation. The third wrong was that search warrants were issued under Income Tax Act, section 231.3 which was subsequently found to be unconstitutional, so that the search warrants were invalid. The fourth wrong involved the immediate reseizure of illegally seized documents pursuant to new warrants instead of returning them to the appellant’s then lawyers as previously agreed. The new warrants had been sought without fully informing the Court that the appellant had earlier sued for the return of the documents, that Revenue Canada had tried to obtain a further warrant without success, and that the officials had agreed to return the documents.
The issues were: (1) whether the tax reassessments should be vacated based on the unconstitutional conduct of government officials in carrying out the searches and seizures of the appellant’s premises and records on the basis of O’Neill Motors Ltd. v. R., [1996] 1 C.T.C. 2714 (T.C.C.); affd [1998] 4 F.C. 180 (C.A.); and (2) if not, whether any evidence obtained in these illegal searches should be excluded pursuant to Charter, subsection 24(2).
Held, the appeal should be allowed in part.
The filing of the appellant’s return without his authorization was not a serious violation of his rights. It might be inferred from allowing the auditor to take the file that the accountant consented to filing it, and therefore the appellant indirectly consented to filing it.
Government officials must be careful not to abuse their power to investigate for civil purposes in order to acquire information for use in criminal prosecutions. The courts have been ready to exclude such tainted evidence in criminal proceedings based on such evidence. A distinction should be drawn between seizures in the criminal or quasi-criminal context and those in the administrative or regulatory context in determining whether the admission of evidence would bring the administration of justice into disrepute. The use of tainted evidence in a criminal proceeding is a much more serious matter than in a civil proceeding, so that the discretion of a court might well be exercised more liberally in a criminal case, where the liberty of the subject is in issue.
The unconstitutional search was serious and unreasonable, but was not done in bad faith, as the officials were not aware that the warrants were secured under an unconstitutional statutory provision. The admission of this evidence would not bring the administration of justice into disrepute, in a civil case such as this.
The violation of the agreement to return the documents and the withholding of key information from the Court was, however, indefensible. The search conducted pursuant to the warrant thus obtained was unreasonable and would bring the administration of justice into disrepute.
For a reassessment to be vacated, the conduct must be a flagrant and egregious violation of the appellant’s rights. It must also be shown that the lesser remedy of the exclusion of evidence is inadequate to vindicate the Charter violation, and it should be clear that the evidence illegally obtained was so fundamental to the reassessments that they could not be sustained without it. This type of extreme remedy is reserved only for serious violations where other remedies are insufficient. Therefore, while the four wrongs committed by the officials, viewed cumulatively, were serious, they were not so flagrant and egregious as to support the extreme remedy of vacating these reassessments in light of the minimal importance of the additional evidence obtained by those violations. The appellant acknowledged that certain income had not been reported. Much of the evidence necessary to make out the case had already been legally obtained. The legally obtained evidence may well be sufficient to support the reassessments. Hence, it would not be unfair to force the appellant to go to trial because the Crown has a reasonable chance of proving the case entirely on the basis of the legally obtained evidence.
As to the exclusion of evidence, viewed cumulatively the first three wrongs were insufficient to lead to an order excluding the evidence thereby obtained. To admit that evidence in all the circumstances would not bring the administration of justice into disrepute. The fourth wrong, the illegal search, did yield some new information concerning some $50,000 of additional unreported income. To allow this improperly obtained evidence to be admitted would bring the administration of justice into disrepute. The Tax Court Judge’s decision should be varied to exclude the new evidence related to the $50,000 payments which was obtained pursuant to the second warrant. The exclusion of this evidence would result in the Minister being unable to show that the taxpayer received the $50,000 and must result in an amended reassessment to reflect this.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44], ss. 8, 24(2).
Income Tax Act, S.C. 1970-71-72, c. 63, ss. 163(2) (as am. by S.C. 1988, c. 55, s. 142), 231.3 (as enacted by S.C. 1986, c. 6, s. 121).
CASES JUDICIALLY CONSIDERED
APPLIED:
R. v. Collins, [1987] 1 S.C.R. 265; (1987), 38 D.L.R. (4th) 508; [1987] 3 W.W.R. 699; 13 B.C.L.R. (2d) 1; 33 C.C.C. (3d) 1; 56 C.R. (3d) 193; 28 C.R.R. 122; 74 N.R. 276; R. v. McKinlay Transport Ltd., [1990] 1 S.C.R. 627; (1990), 68 D.L.R. (4th) 568; 55 C.C.C. (3d) 530; 76 C.R. (3d) 283; 47 C.R.R. 151; [1990] 2 C.T.C. 103; 90 DTC 6243; 106 N.R. 385; 39 O.A.C. 385; Baron v. Canada, [1993] 1 S.C.R. 416; (1993), 99 D.L.R. (4th) 350; 78 C.C.C. (3d) 510; 18 C.R. (4th) 374; 13 C.R.R. (2d) 65; 1 C.T.C. 111; 93 DTC 5018; 146 N.R. 270.
DISTINGUISHED:
Canada v. O’Neill Motors Ltd., [1998] 4 F.C. 180 (1998), 162 D.L.R. (4th) 248; 98 DTC 6424; 228 N.R. 349 (C.A.); O’Neill Motors Ltd. v. R., [1996] 1 C.T.C. 2714; (1995), 96 DTC 1486 (T.C.C.).
REFERRED TO:
R. v. Norway Insulation Inc. (1995), 28 O.R. (3d) 432; [1995] 2 C.T.C. 451; 29 C.R.R. (3d) 163; 95 DTC 5328 (Gen. Div.); R. v. Warawa (A.J.) (1997), 208 A.R. 81; [1998] 4 W.W.R. 597; 56 Alta. L.R. (3d) 67; 98 DTC 6471 (Q.B.); R. v. Saplys (1999), 132 C.C.C. (3d) 515 (Ont. Gen. Div.).
APPEAL from the Tax Court of Canada’s dismissal of appeals from assessments for 1986, 1987 and 1988, on the grounds that the cumulative effect of wrongs committed against the appellant was sufficient vacate the reassessments involving income received but not reported, or to exclude evidence pursuant to Charter, subsection 24(2) (Donovan v. R., [1999] 1 C.T.C. 2140; (1998), 98 DTC 2140 (T.C.C.)). Appeal allowed in part.
APPEARANCES:
David R. Oley for appellant.
John W. Smithers for respondents.
SOLICITORS OF RECORD:
Mockler, Peters, Oley, Rouse & Williams, Fredericton, for appellant.
Deputy Attorney General of Canada for respondents.
The following are the reasons for judgment rendered in English by
[1] Linden J.A.: The main issue in this appeal is whether the unconstitutional conduct of certain government officials in carrying out various searches and seizures of the appellant’s premises and records should lead this Court to vacate the tax reassessments at issue on the basis of O’Neill Motors Ltd. v. R., [1996] 1 C.T.C. 2714 (T.C.C.); affirmed sub nom. Canada v. O’Neill Motros Ltd., [1998] 4 F.C. 180 (C.A.). A secondary issue is whether, if there are insufficient reasons to vacate the reassessments, any evidence obtained in these illegal searches should be excluded pursuant to subsection 24(2) of the Charter [Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44]].
[2] This is an appeal from a decision of the Tax Court of Canada [Donovan v. R., [1999] 1 C.T.C. 2140] dismissing appeals from assessments made under the Income Tax Act[1] for the taxation years 1986, 1987 and 1988. The Tax Court Judge allowed an appeal from the assessment of penalties for the 1988 taxation years, which finding has not been appealed and thus is not at issue in the case before this Court.
[3] The Tax Court Judge in this case refused to employ either the O’Neill Motors remedy or the subsection 24(2) remedy. I agree with her that, on the facts of this case, the remedy of vacating the reassessments is not merited, and that much of the evidence should not be excluded, but disagree on the issue of the exclusion of certain evidence derived from the second search on July 17, 1990.
[4] There is no need to outline in detail all of the facts of this case; they are well described in the reasons of the Tax Court Judge. I shall focus on the relevant areas of dispute, as highlighted by counsel, that is the circumstances surrounding the alleged searches and seizures. Counsel for the appellant forcefully argued that there were four main “wrongs” committed against the appellant concerning the searches and seizures and that they should be considered cumulatively as sufficient grounds to vacate the reassessments for the years 1986, 1987 and 1988. These reassessments involved certain income which was admittedly received by the taxpayer but not reported. In the alternative, it is argued that the evidence illegally obtained should be excluded.
[5] The first “wrong” complained of was the filing of the appellant’s 1988 tax return by Mr. Gordon MacDonald of the Audit Branch without the appellant’s authorization. Mr. MacDonald had suspected that certain cheques received from Miramichi Pulp and Paper by the appellant were not reported. On September 25, 1989, during an audit conducted at both the appellant’s office and that of Mr. Allen, his accountant, Mr. MacDonald was shown a draft of the appellant’s 1988 tax return by Mr. Allen. The appellant had signed the return in blank earlier and authorized his accountant, Mr. Allen, to complete it and then file it. Mr. Allen had filled the return out in draft and gave it to Mr. MacDonald during the audit. After the audit, Mr. MacDonald took the return back to Revenue Canada’s office in Saint John and filed it, without getting specific authorization from the appellant to do so. Mr. MacDonald, as is required, had received the written authorization of the appellant only to discuss the return with Mr. Allen. Counsel contended that Mr. MacDonald’s act of filing the appellant’s draft return was a serious matter that should affect the decision to vacate the reassessments.
[6] In my view, however, this series of events cannot be considered to be a serious violation of the appellant’s rights. He, after all, is the one who signed the document in blank and entrusted his accountant, Mr. Allen, to fill it in and file it. This is rather a risky way of conducting one’s affairs. When Mr. Allen showed the return to Mr. MacDonald and allowed him to take it, one might infer that this was with the accountant’s consent to file it, and, therefore, indirectly with the appellant’s consent. It is not clear that there was any nefarious scheme at work here. It is only in retrospect that much has been made of this. There is no evidence of any effort undertaken to retrieve the 1988 return that was improperly filed. I do not consider this to be a serious matter; rather, it was simply unwise. In any case, the appellant has received some redress for whatever questionable conduct might have occurred in the filing of the 1988 return. In response to the unusual circumstances under which the return was filed the Tax Court Judge saw fit to vacate the penalties imposed pursuant to subsection 163(2) [as am. by S.C. 1988, c. 55, s. 142] of the Act with respect to this return. This portion of the Tax Court Judge’s decision has not been appealed and thus remains in place.
[7] A second wrong relied on by counsel for the appellant is what he called the “mingling” of the auditing staff and the Special Investigations Unit (SIU), particularly at an audit which took place on November 21 and 22, 1989. On those days, Mr. MacDonald, accompanied by one Terry LeBlanc, a member of the SIU, met with both the appellant and Mr. Allen. Mr. MacDonald did not inform the appellant nor Mr. Allen that Mr. LeBlanc was a member of the SIU, which was responsible for criminal investigations. It is said that, had they known the SIU was involved, the appellant and Mr. Allen would have consulted a lawyer about their rights at that time. Crown counsel says that no new information of any significance was obtained during these audits and that there really was no “criminal” investigation ongoing at the time. He suggested that the meeting was merely an opportunity to “eyeball” the appellant, to see his reaction to the allegation about the unreported income. It appears, however, that further work was done by SIU without anyone informing the appellant of that fact. The file was transferred to SIU in December 1989. Various communications took place between the appellant and the government without his knowledge that the SIU was conducting an investigation of this case.
[8] This “intermingling” or “overlapping”, as it was called by the Crown, is of concern. Government officials must be careful not to abuse their power to investigate for civil purposes in order to acquire information for use in criminal prosecutions. When that is done the courts have been ready to exclude such tainted evidence in any criminal proceedings based on that evidence. (See R. v. Norway Insulation Inc. (1995), 28 O.R. (3d) 432 (Gen. Div.); R. v. Warawa (A.J.) (1997), 208 A.R. 81 (Q.B.); R. v. Saplys (1999), 132 C.C.C. (3d) 515 (Ont. Gen. Div.).)
[9] The meaning of subsection 24(2) of the Canadian Charter of Rights and Freedoms has been examined extensively by the Supreme Court of Canada in the context of criminal proceedings. The Supreme Court of Canada articulated the now familiar test for the exclusion of evidence in R. v. Collins, [1987] 1 S.C.R. 265. There are two questions which must be asked when considering the exclusion of evidence pursuant to subsection 24(2) of the Charter: (1) was the search unreasonable; and (2) if so, having regard to all the circumstances, would the evidence bring the administration of justice into disrepute? (Collins, supra, at pages 276-277). The Supreme Court has determined that “[a] search will be reasonable if it is authorized by law, if the law itself is reasonable and if the manner in which the search was carried out is reasonable” (Collins, at page 278). With respect to the second stage of the test the Supreme Court explained that (at pages 283-284):
In determining whether the admission of evidence would bring the administration of justice into disrepute, the judge is directed by s. 24(2) to consider “all the circumstances”…. The factors that the courts have most frequently considered include:
— what kind of evidence was obtained?
— what Charter right was infringed?
— was the Charter violation serious or was it of a merely technical nature?
— was it deliberate, wilful or flagrant, or was it inadvertent or committed in good faith?
— did it occur in circumstances of urgency or necessity?
— were there other investigatory techniques available?
— would the evidence have been obtained in any event?
— is the offence serious?
— is the evidence essential to substantiate the charge?
— are other remedies available?
[10] In Collins, the Supreme Court dealt with the question of the exclusion of evidence in the criminal context. The case at bar raises the issue of whether the discretion of the Court to exclude evidence under subsection 24(2) ought to be exercised as liberally in civil cases as it is in criminal cases. The reasoning of Madam Justice Wilson in R. v. McKinlay Transport Ltd., [1990] 1 S.C.R. 627, offers some guidance on this issue. In considering the reasonableness of a seizure pursuant to a section of the Income Tax Act, Wilson J. concluded that it is consistent with a flexible and purposive approach to section 8 of the Charter to “draw a distinction between seizures in the criminal or quasi-criminal context to which the full rigours of the Hunter criteria will apply, and seizures in the administrative or regulatory context to which a lesser standard may apply depending upon the legislative scheme under review” (McKinlay, supra, at page 647). Such a distinction also seems appropriate in determining whether the admission of evidence would bring the administration of justice into disrepute.
[11] In this case, what is being urged is that the “co-operation” between the audit branch and SIU in the early stages of the investigation should lead to the vacating of the tax reassessments or to the exclusion of evidence in a civil proceeding, just as it would in a criminal one. I include in the category of a civil proceeding a matter involving a civil penalty to be exacted for a tax law infraction. In my view, the use of tainted evidence in a criminal proceeding is a much more serious matter than in a civil proceeding, so that the discretion of a court might well be exercised more liberally in a criminal case, where the liberty of the subject is in issue. However, such discretion might well be used with more restraint in civil matters, where such liberty is not threatened and what is at stake is simply the duty to pay taxes.
[12] A third wrong, clearly established, is that unconstitutional search warrants were issued on July 10, 1990 under section 231.3 [as enacted by S.C. 1986, c. 6, s. 121] of the Income Tax Act authorizing the search and seizure of certain material from the appellant’s home, business premises and accountant’s office, which warrants were executed on July 17, 1990. An action to challenge the constitutional validity of these warrants was launched by the appellant in 1991, and was held in abeyance until the decision of Baron v. Canada, [1993] 1 S.C.R. 416 was released by the Supreme Court of Canada on January 21, 1993. It was held in Baron that section 231.3 was unconstitutional, so that the search warrants used in this case were clearly invalid. Negotiations then ensued to obtain the return of the seized material.
[13] This third wrong was substantial. An unconstitutional search is something serious. In this case, given the Supreme Court’s decision in Baron, this search was not authorized by law owing to the unconstitutionality of the section and thus was unreasonable. The remaining question with respect to this search is whether the admission of evidence obtained as a result of the search would bring the administration of justice into disrepute. I agree with the Tax Court Judge in her analysis of the factors and that this was non-conscriptive evidence. The search was not done in bad faith, the officials not being aware that the warrants they obtained and executed were secured under a statutory provision that was unconstitutional. It is hard to imagine, if this were all that happened in this case, that the admission of this evidence would bring the administration of justice into disrepute, at least in a civil case such as this.
[14] The fourth alleged wrong is, in my view, the most significant, and requires some remedy. Following the Supreme Court’s decision in Baron, the Crown officials agreed to return the illegally seized documents to the law office of Mockler, Allen & Dixon, the appellant’s then lawyers. Instead of doing this, the officials concocted a scheme whereby they would not really return the documents but would hand them over temporarily and then reseize them immediately pursuant to a new legal warrant. On January 26, 1993, the documents were taken by the officials, not to the lawyer’s office, as agreed, but to the garage where the appellant had conducted its business, but no longer did, and to the accountant’s office. At the same time, on January 26, 1993, new warrants were sought without fully informing the Court that the appellant had earlier sued for the return of the documents, that Revenue Canada had tried to obtain a further warrant on May 18, 1991 without success, and that the officials had agreed to return the documents in question to the law firm. The new warrants were granted, based on this incomplete information and the material, which was supposed to be returned, was reseized.
[15] This latter conduct is reprehensible as well as illegal. The warrants were rightly quashed, upon motions, on November 29, 1993. The conduct of the officials on this occasion, particularly the violation of the agreement with the law firm and the withholding of key information from the Court issuing the warrants, was indefensible. Employing the Collins analysis, the search conducted pursuant to this warrant was, in my view, clearly unreasonable and would bring the administration of justice into disrepute. Some remedy should be awarded to signify that this type of conduct cannot be tolerated.
THE REMEDY
[16] While the facts in O’Neill Motors resemble those in the current case, they are different in important respects. In both cases an initial seizure was made pursuant to the unconstitutional section 231.3 of the Income Tax Act. In both cases, officials got a second warrant, without giving full information to the Court, and reseized the documents. There the similarity ends.
[17] The first significant difference between O’Neill Motors and the case at bar concerns the initial search conducted pursuant to the warrant obtained under section 231.3. The evidence obtained through this initial search was excluded in O’Neill Motors. But that decision to exclude was based on the Tax Court Judge’s finding that the conduct of officials of the Department of National Revenue had been “flagrant and egregious.” We have found no such conduct with respect to the first search in this case, so that the evidence so obtained should not be declared inadmissible.
[18] The second important distinguishing feature of O’Neill Motors is that in that case the exclusion of the tainted evidence would have been tantamount to vacating the assessments, because there was nothing left upon which to base the case. That was so because the reassessments in O’Neill Motors were issued beyond the normal reassessment period and, as a result, the onus shifted to the Crown to show fraud or negligence on the part of the taxpayer to permit the reassessments. In this case, the reassessments were done in a timely fashion and the tainted evidence is not required to overcome any procedural bar. Further, much of the material and information obtained through the various activities complained about in this case had already been secured legally. From the start, it was acknowledged by the appellant that certain income had not been reported. Hence, unlike the O’Neill Motors case, where it would have been “most unlikely” that the Minister would have been able to discharge the onus resting on him and where it would have been wrong to “put the taxpayer through the trouble of proceeding to the Tax Court to see whether the Minister would be able to discharge the onus” (O’Neill Motors, F.C.A., supra, at page 187), in this case much of the evidence necessary to make out the case had already been legally obtained. Contrary to the situation in O’Neill Motors, it is not clear in this case that, without the tainted evidence, the reassessments would not be upheld at trial.
[19] It was made clear in O’Neill Motors that vacating a reassessment, though a possible remedy in certain circumstances, was not an automatic one. The conduct must be “a flagrant and egregious violation of the appellant’s rights” (see Collins, supra). Moreover, at least in the civil context, O’Neill Motors suggests that a further remedy will be appropriate only when limiting the remedy to the mere exclusion of evidence would “render nugatory the very rights that the Charter guarantees” (O’Neill Motors,T.C.C., supra, at page 2728). In other words, before a reassessment can be vacated, it must be shown that the lesser remedy of the exclusion of evidence was inadequate to vindicate the Charter violation. In addition, for it to be “appropriate and just” to vacate a reassessment, it should be clear that the evidence illegally obtained was so “fundamental” to the reassessments that they could not be sustained without it (O’Neill Motors, T.C.C., supra, at pages 2728-2729). In short, this type of “extreme remedy”, as I wrote in O’Neill Motors, is reserved only for “serious violations where other remedies are insufficient” (O’Neill Motors, F.C.A., supra, at page 190).
[20] Therefore, while the four wrongs committed by the officials in this case, viewed cumulatively, were serious, I am of the view that they were not so “flagrant and egregious” as to support the extreme remedy of vacating these reassessments in light of the minimal importance of the additional evidence obtained by those violations. In this case, the legally obtained evidence may well be sufficient to support the reassessments. Hence, in this case it would not be unfair to the appellant to force him to go to trial because the Crown has a reasonable chance of proving the case entirely on the basis of the legally obtained evidence.
[21] As for the exclusion of evidence remedy, I am of the view that, viewed cumulatively, the first three “wrongs” are insufficient to lead to an order excluding the evidence thereby obtained. As decided by the Tax Court Judge, to admit that evidence in all the circumstances would not bring the administration of justice into disrepute. I cannot disagree with her finding that there were “no factors that would prevent the admission of the evidence for ensuring a fair civil trial. Therefore, the evidence gathered from the search and seizure pursuant to paragraph 231.3(1) of the Act that was found to be unconstitutional because it violated section 8 of the Charter is admissible” (Donovan, supra, at page 2159).
[22] As for the fourth wrong, the improper events which took place on January 26, 1993 should not go without a remedy. That illegal search did yield some new information concerning some $50,000 of additional unreported income, that is, cheques in the amounts of $28,000 and $22,000. To allow this improperly obtained evidence to be admitted would, in my view, bring the administration of justice into disrepute. Hence, the decision of the Tax Court Judge will be varied to exclude the new evidence related to the $50,000 payments which was obtained on January 26, 1993 pursuant to the second warrant. The exclusion of this evidence, it is agreed, would result in the Minister being unable to show that the taxpayer received the $50,000 and must result in an amended reassessment to reflect this.
[23] Both counsel have agreed in writing (see letter of May 10, 2000, filed with this Court), that certain adjustments dealing mainly with allowable deductions, must be made to the reassessments for the 1987 and 1988 taxation years. Apparently, these items were overlooked by the Tax Court Judge. Accordingly, the judgment of the Tax Court must be varied to reflect this agreement and oversight.
[24] The appeal should be allowed in part. The judgment of the Tax Court dated October 15, 1998 should be varied as follows: (l) the appeals from the reassessments should be allowed to the extent that the income of the appellant is to be reduced by the two payments totalling $50,000; and (2) the appeals from the reassessments should be allowed to the extent that they reflect the adjustments agreed to by the parties. Success being divided, there should be no order as to costs.
Richard C.J.: I agree.
Robertson J.A.: I agree.