(416) 864 - 6200

Tax & Trade Blog

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Archives
    Archives Contains a list of blog posts that were created previously.

Protecting your Electronic Devices from Seizure

Posted by on in Tax Law
  • Font size: Larger Smaller
  • Hits: 1773
  • Subscribe to this entry
  • Print

One of the emerging areas in criminal law in the 21st century are the rules that surround the search and seizure of electronic devices like computers, notebooks and smartphones – particularly where those devices contain information covered by Solicitor-Client Privilege.

When the CRA executes a Search Warrant in the tax consequence, and seizes electronic storage devices like a notebook or an iPhone, the party subject to the Warrant may still rely on a claim of Solicitor-Client Privilege. This results in a unique court process which deals with how to isolate privileged documents that are otherwise stored in the device alongside non-privileged ones.

A recent case before British Columbia Supreme Court dealt with this issue, and is a good read for persons finding themselves subject to such a seizure.

In Solicitor-Client Privilege of Things Seized (Re), 2019 BCSC 91, a CRA forensics team had seized electronic storage devices which the taxpayers (who were unnamed) claimed contained information that was subject to Solicitor-Client Privilege. The search of the devices was suspended pending the identification and isolation of Privileged materials—but the parties were unable to agree on the appropriate process to deal with the Privileged documents.

At the subsequent hearing in the BC provincial courts, the CRA argued that it would be sufficient for the CRA forensics team to resume their search of the electronic devices in an area physically separated from the CRA investigators who would only be given access to data that was not ‘quarantined’ by reason of Privilege. The taxpayer’s position was that this method would not protect Solicitor-Client Privilege and that the search could only resume in accordance with the procedure set out in Lavallee, Rackel & Heintz v Canada (Attorney Genera) (2002 SCC 61).

That process required the court to appoint an ‘independent referee’ to take possession of all seized materials who would then facilitate the identification of Privileged materials. Only when all Privileged materials were identified was the CRA able to obtain access to the remaining Non-Privileged documents. Here, the taxpayers pointed out that the CRA’s forensics unit would be searching the electronic devices rather than an independent forensics team.

In deciding the matter, the BC court found that appointing an independent referee to handle the allegedly privileged information was not required to protect Solicitor-Client Privilege, concluding that this particular safe-guard was “more appropriate” in circumstances where a law firm was the subject of the Search Warrants (seeking the client information in the hands of the law firm). Instead, the court found that taxpayer and CRA counsel were best suited to review a copy of the materials to identify which of them were privileged before the CRA continued its investigation.

To that end, the BC Court ordered that:

(1) Two perfect copies of the electronic devices should be made with a copy being provided to the court. The CRA should then delete any and all materials it had copied from the devices and swear and affidavit that this had been completed.

(2) The second copy was then to be provided to a court-appointed forensic computer technician. The taxpayers would then provide a list of privileged materials to the technician who would isolate the privileged documents.

(3) Only after the materials were isolated would the technician be permitted to provide their copy of the materials to the CRA’s forensics team.

By way of commentary, the takeaway here is that taxpayers have a right to assert Solicitor-Client Privilege over documents seized by the CRA and other provincial tax authorities, even if on electronic devices. Thereafter, taxpayers can expect an independent process to have the Privileged information isolated within electronic devices before the information is given to the CRA or provincial tax authority.

Taxpayers in the unenviable position of responding to a Search Warrant like this should immediately seek expert legal advice to defend their rights.

Need assistance in this area?  If so, please click here.

Want a PDF copy of this blog?


Last modified on


  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Tuesday, 30 May 2023

Toronto Office

24 Duncan Street, Third Floor, Toronto, Ontario, M5V 2B8 Canada
Phone: (416) 864-6200| Fax: (416) 864-6201

Client Login

To access the Millar Kreklewetz LLP secure client file transfer system, please log in.