2016 QCCA 1303, 2016 QCCA 1303

Uber Canada inc. c. Agence du revenu du Québec 2016 QCCA 1303 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-10-006170-169 (500-36-007668-158) DATE: AUGUST 12, 2016 PRESIDING : THE HONOURABLE NICHOLAS KASIRER, J.A. UBER CANADA INC. PETITIONER – applicant v.

AGENCE DU REVENU DU QUÉBEC RESPONDENT – respondent and CLAUDINE DUVAL MAXIME ÉTHIER SYLVIE ROBICHAUD SYLVAIN BRASSARD RENÉ LÉVESQUE ADIL CHENNAOUI CONRAD CANIZALEZ CLAUDE HÉBERT ALEXANDRA-MAUDE VALADE MARC ANDRÉ PELLETIER IMPLEADED PARTIES – impleaded parties and JEAN-PAUL BRAUN IMPLEADED PARTY – impleaded party JUDGMENT [ 1 ] Uber Canada Inc. asks for leave to appeal from a judgment of the Superior Court, District of Montreal (the Honourable Mr Justice Guy Cournoyer), rendered on May 11, 2016, which dismissed its motion to institute proceedings in certiorari and for the return of seized property. [1] [ 2 ] The petitioner had asked the Superior Court to quash warrants issued by Braun, J. on May 13, 2015 allowing Revenu Québec to enter and search premises and seize things found there.

The facts are set forth in detail in paragraphs [96] to [125] of the judgment of the Superior Court and are not in dispute. [ 3 ] In order to obtain leave pursuant to

section 291 C.C.P., the petitioner must show “a sufficient interest in deciding a question of law alone / intérêt suffisant pour faire décider une question de droit seulement”. The explanation offered by my colleague Chamberland, J.A., sitting in chambers in Morin v. R. , [2] is helpful : [4] Access to the second level of appeal in criminal and penal proceedings is narrowly restricted both under the Criminal Code for

summary conviction proceedings ( section 839(1) Cr.C.) and the Code of Penal Procedure (section 291 C.P.P.), being limited to questions of law alone. [5] A Court of Appeal will grant leave to appeal only where the proposed questions of law have a significant potential impact on the administration of Justice beyond the specifics of the case or where there appears to be a clear error, even if it cannot be said that the error has significance for the administration of Justice beyond the specific case. [ 4 ] Leave will not be granted in circumstances when, however important a question might appear in the abstract, the petitioner fails

to advance grounds that have a reasonable prospect of success on appeal. [3] [ 5 ] The nature and standard of the review conducted by the Motion Judge should also be kept in mind. As noted in R. v. Araujo , [4] a reviewing judge does not stand in the same place and function as the authorizing judge: “He or she does not conduct a rehearing of the application for the warrant and does not substitute his or her view for that of the authorizing judge”. Moreover as the Supreme Court explained in R. v.

Garofoli : “[i]f, based on the record which was before the authorizing judge as amplified on the review, the reviewing judge concludes that the authorizing judge could have granted the authorization, then he or she should not interfere”. [5] [ 6 ] The Motion Judge was mindful of his role as reviewing judge (see paras. [35] to [42]).

He rightly noted that the question before him was not whether he would have issued the warrant but whether there was sufficient evidence allowing the authorizing judge to do so. [ 7 ] For the reasons that follow, I am of the view that the motion does not meet the exacting standard set forth in s. 291 C.P.P., in particular because the arguments in support of the proposed appeal have no reasonable chance of success. *** [ 8 ] The petitioner alleges four errors of law made by the judge of the Superior Court (the “Motion Judge”) which in turn raise five questions, all of which, it says, are sufficiently important to the law of search and seizure to justify leave.

I propose to consider each of the four alleged errors and the connected arguments in turn.

I Reasonable Grounds [ 9 ] The petitioner argues that the Motion Judge erred in finding that the sworn information to obtain the search warrants disclosed the proper reasonable grounds, pointing to the following paragraph of his reasons for judgment: [14] […] l'information présentée au juge qui a autorisé les perquisitions était suffisante pour établir qu'Uber ne respecte pas les lois fiscales québécoise et canadienne, ce qui justifiait les perquisitions autorisées . [Emphasis added by the petitioner.] [ 10 ] For the petitioner, the judge applied the wrong legal test.

It is not enough to show reasonable grounds for a belief that a person has not adhered to tax laws generally for a search warrant to be validly issued. A warrant can only be issued if the information disclosed reasonable grounds to believe, specifically, that the alleged offence for which the warrant is sought has been committed. [ 11 ] The Motion Judge made no such error. [ 12 ] It goes without saying that a reviewing judge cannot content himself or herself with reasonable grounds for the non-respect of tax law, writ large, to justify the issuance of a warrant.

The task before the Motion Judge was to review whether there were reasonable grounds disclosed in the information for the belief that the particular tax offences alleged had been committed. [ 13 ] The Motion Judge identified and applied the proper legal test correctly. Paragraph [14] is merely a prefatory statement to the Motion Judge’s general analysis: the petitioner has cited it out of context and used it to give a truncated reading of the reasons for judgment.

When one considers the Motion Judge’s statement of the legal test applicable to the contestation of a search warrant in paragraph [25], his allusion to the offences alleged in paragraphs [51] and [52], and his analysis of this question on the facts in paragraphs [95] to [240], it is plain he made no such mistake. [ 14 ] The petitioner says that the Motion Judge made two further, specific errors in respect of the reasonable grounds requirement. [ 15 ] The petitioner contends first that the Motion Judge erred in law in finding that the information contained reasonable grounds to believe that Uber Canada Inc. had participated in, assented to or acquiesced in the making of false or deceptive statements in tax declarations filed under

section 422 of the Act respecting the Québec sales tax , CQLR, c T-0.1. [ 16 ] Secondly, it argues that the Motion Judge erred in holding that the information contained reasonable grounds to believe that Uber Canada Inc., by act or omission, aided drivers using UberX to wilfully evade or attempt to evade compliance with the Act respecting Québec sales tax . [ 17 ] In my view, neither of these questions raised by the petitioner present a reasonable chance of success on appeal. [ 18 ] A careful reading of the Motion Judge’s detailed reasons indicates the requirement for the validity of the warrants was satisfied in respect of Uber Canada Inc.’s participation in the alleged offences.

By way of conclusion, the Motion Judge wrote, in part: [230] La nature du service UberX offert de même que le contrôle exercé par Uber est tel qu'il n'était pas déraisonnable, pour le juge qui a accordé les mandats de perquisition, de penser qu'Uber est pleinement consciente qu'elle aide les chauffeurs UberX à éluder le paiement de la TPS et de la TVQ et qu'elle se soustrait à ses propres obligations fiscales à l'égard de la commission perçue des chauffeurs UberX. 2) Les déclarations fiscales d'Uber [231] Un dernier mot au sujet des multiples objections qu'Uber présente à l'égard de l'infraction alléguée au sujet de ses propres fournitures taxables (voir les paragraphes 56 à 61 du présent jugement). [232] De l'avis du Tribunal, les dénonciations contenaient des informations visant les déclarations fausses et trompeuses d'Uber et non celles de ses chauffeurs UberX.

[233] Ces déclarations concernent la commission perçue par Uber des chauffeurs UberX à l'égard du service de transport de personnes offert au Québec. La commission étant un accessoire à cette fourniture taxable des chauffeurs UberX, elle devait donner lieu à une perception fiscale ce qui, selon les dénonciations, n'a pas été le cas. [234] Toutes les questions concernant l'identité de différentes entités corporatives d'Uber et leur rôle à l'égard de la commission perçue et des services offerts aux chauffeurs UberX devront être résolues à la lumière de l'enquête.

Cependant, il suffit qu'il y ait un « lien réel et important » entre les infractions alléguées et le Québec pour que la compétence des tribunaux québécois soit établie. [235] Cela dit, pour les fins de l'octroi des mandats de perquisition, les motifs présentés à l'égard de l'infraction d'Uber aux dispositions de l'article 62 de la

Loi sur l'administration fiscale étaient suffisants pour justifier la conclusion qu'Uber a fait une déclaration fausse et trompeuse en ne révélant pas les fournitures taxables, soit la commission prélevée de 20%. 3) Conclusion [236] De l'ensemble des faits qui lui étaient présentés le juge ayant délivré les mandats de perquisition pouvait donc conclure qu'il existait des éléments de preuve pouvant justifier la conclusion qu’Uber avait commis les infractions fiscales alléguées. [ 19 ] The petitioner has failed to show the basis upon which the Court could disturb the judgment on this point.

The arguments in the motion fail to take into account the standard set out for the reviewing judge’s task in Araujo and Garofoli cited above. On consideration, the petitioner’s arguments seem more suited to contesting whether or not the offences were committed beyond a reasonable doubt, as opposed to whether or not reasonable grounds existed for the purpose of issuing the search warrant.

As the Motion Judge rightly observed at paragraphs [45]​ and [46] of his reasons, this question was not before him. [ 20 ] I would add that the petitioner is also wrong to say that, contrary to what the Motion Judge decided, the information contains no reasonable grounds to believe that Uber Canada Inc. had the requisite mental element for the offences alleged. In paragraph [151] of his reasons, the Motion Judge quoted at length from the information which in turn quoted a journalist’s interview of one of Uber Canada Inc.’s principals. The journalist’s

article was entitled “La désobéissance civile d’UberX”. Referring specifically to this portion of the information, the Motion Judge wrote: [223] La lecture des extraits contenus dans les dénonciations de Mme Duval pouvait certainement amener le juge qui a accordé les mandats de perquisition à la conclusion que M.

Guillemette, l'une des âmes dirigeantes d'Uber, est parfaitement conscient de l'illégalité du service UberX et qu'Uber fait preuve d'ignorance volontaire dans le seul but de susciter l'établissement d'un nouveau cadre règlementaire, car la réglementation suit rarement la technologie. [Footnotes omitted.] [ 21 ] The petitioner makes no mention of this. In sum, its various arguments relating to the reasonable grounds offer no reasonable prospect of success, and therefore do not justify granting leave for appeal.

II Whether disclosure in the information was full and frank [ 22 ] The petitioner argues that the Motion Judge erred in finding that Revenu Québec had no obligation to disclose the applicable tax regime in the information. [ 23 ] The Motion Judge rejected the petitioner’s argument, raised again in the application for leave, that the judgment of the Court of Appeal for Ontario in R . v. Branton , [6] applied here, required the information to include a description of the tax regime applicable to UberX drivers as against taxi drivers.

I agree with the Motion Judge that Branton is of no assistance to the petitioner here. That case turned on the choice of an affiant to omit mention of a controversy in the case law that was material to the issuance of the warrant. The Court of Appeal decided that the affiant had presented a one-sided view of the jurisprudence “designed to persuade the reviewing justice to see matters his way”.

Branton in no way supports the proposition that an affiant would always have an obligation to describe the legal regime relevant to the proposed search and that an omission to do so violates the duty of full and frank disclosure. This is especially true when one takes into account the rule that the authorizing judge is presumed to know the law. [ 24 ] I note that the Motion Judge set out in detail the obligation for the affiant to make “full and frank disclosure of material facts” and not to attempt to “trick” its reader. [7] The motion contains no plausible suggestion that this was not respected here.

In my view, the argument relating to a notional omission in respect of the applicable statutory has no reasonable chance of success on appeal. III The “Small Suppliers” Exemption [ 25 ] The petitioner submits that the Motion Judge erred in law in finding that the UberX drivers do not qualify as “small suppliers” who may benefit from an exemption from the applicable taxes. [ 26 ] The Motion Judge held that UberX drivers are required to obtain taxi permits pursuant to the Act respecting transportation services by taxi , CQRL, c S-6.01 because they provide, for remuneration, passenger transportation by automobile.

He interpreted

section 407.1 of the Act respecting the Québec sales tax [8] to apply to the UberX drivers, thereby requiring them to adhere to the relevant taxation rules. [ 27 ] The Motion Judge considered at length the petitioner’s argument that UberX are not suppliers who carry on a taxi business according to

section 1 of the Act respecting the Québec sales tax . [ 28 ] The Motion Judge rejected the petitioner’s

interpretation of the legal regime according to which the UberX drivers, contrary to taxi drivers, are “small suppliers” and thus exempted from the tax regimes where they earn less than $30,000. The judge reviewed the applicable rules and concluded that the “least one could say” is that this

interpretation was unconvincing by reason of the clear

definitions set forth in the applicable statutory texts. The judge wrote:

[186] À la lumière de ces définitions, il est, à tout le moins, raisonnable de penser que le juge qui a accordé les mandats de perquisitions pouvait tirer la conclusion que les chauffeurs UberX doivent être inscrits auprès des autorités fiscales, percevoir la TPS et la TVQ et les remettre à celles-ci. [187] Il pouvait aussi conclure de la conduite d’Uber, qui ne demandait pas à ses chauffeurs offrant son service UberX de lui fournir les numéros de TPS et de TVQ, qu’elle est pleinement consciente que cela aide ses chauffeurs UberX à éluder le paiement de ces taxes.

De la même manière, le fait que le tarif établi pour le service UberX ne prévoit pas les montants de la TPS et de la TVQ justifie la même conclusion. [ 29 ] For the purposes of judicial review of the decision to issue the warrants, the Motion Judge held that the authorizing judge could properly have concluded that Uber Canada Inc. sought to help UberX drivers avoid collecting and remitting taxes as required by law (para. [200]). [ 30 ] Citing the relevant legislative provisions, the Motion Judge wrote: [221] De plus, les faits présentés au juge ayant délivré les mandats pouvait lui permette de conclure que la nature même du service de transport de personnes UberX et son succès commercial repose notamment sur le fait que ce service ne respecte pas les exigences posées par la Loi et sur l'avantage potentiellement concurrentiel que procure la non perception de la TPS et de la TVQ.

Cela découle logiquement des faits contenus dans les dénonciations. [ 31 ] Once again, given the role of a reviewing judge as established by the Supreme Court, the argument that this decision of the Motion Judge would be reversed on appeal has no reasonable chance of success. IV The Scope of the Seizure of Electronic Documents [ 32 ] The petitioner submits that the Motion Judge erred in law in concluding that the description of the things seized was consistent with the requirements of

section 8 of the Canadian Charter of Rights and Freedoms . Moreover, the Motion Judge is said to have erred in deciding that the authorizing judge was not required to impose a computer search protocol in advance in order to meet privacy protection guaranteed by the Charter. [ 33 ] It should be recalled at the outset that the review conducted by the Motion Judge does not bear on the manner in which the search was executed but on the decision of the authorizing judge to issue the warrant. As is plain from the judgment of this Court in Cohen v.

Québec ( Procureure générale ) , [9] the Motion Judge’s power to intervene at this stage was limited to the issuance of the warrant. The manner in which the warrant is executed may prove to be relevant at a later stage in the proceedings, for example on a motion to exclude evidence based on the Charter , but that execution is not the proper subject-matter of argument here. [ 34 ] On the matter of the scope of the search authorized and the absence of a protocol, the Motion Judge reviewed the relevant case law in detail, including R. v.

Vu . [10] In that case, Cromwell J. explained that, as a general rule, search protocols are not mandated by the Constitution. In respect of the description of the things seized, the Motion Judge also rightly considered Cohen , cited above, in particular paragraphs [17] to [20] of that judgment which he reproduced in extenso . The Motion Judge concluded as follows (footnotes omitted): [274] Pour les mêmes motifs [as in Cohen ], le Tribunal estime que les mandats de perquisition en l'espèce ne doivent pas être annulés.

Dans la présente affaire, la description des choses visées est suffisante pour circonscrire adéquatement la portée de la perquisition.

De plus, il ne s’agit pas ici « de renseignements concernant des droits de propriété intellectuelle confidentiels ou encore des renseignements susceptibles d’être protégés par un privilège ». [275] Les faits colligés par l’enquêteuse ne permettaient pas de croire que les ordinateurs ou autres appareils numériques saisis contenaient des informations personnelles à moins d'en présumer leur présence en tout temps. […] [282] Cela dit, le Tribunal partage l'analyse du professeur Kerr qu'il n'existe aucune alternative réaliste à la saisie complète des supports numériques et à leur fouille subséquente ce qui entraînera inévitablement l'accès à des informations qui ne sont pas visées par un mandat de perquisition. [283] Dans l'arrêt Vu , la Cour suprême paraît avoir reconnu cette conséquence inévitable d'une fouille numérique lorsque le juge Cromwell réfère au droit américain: [58] Aux États-Unis, les tribunaux ont reconnu la difficulté de prédire où les dossiers pertinents peuvent se trouver dans un ordinateur.

Bien que la Tenth Circuit Court ait déjà suggéré que les policiers ne devraient être autorisés à fouiller les ordinateurs que par types de fichier, par titres ou par mots clés (voir United States c. Carey , 172 F.3d 1268 (10th Cir. 1999), p. 1276), des décisions postérieures se sont éloignées de cette approche : W. R. LaFave, Search and Seizure : A Treatise on the Fourth Amendment (5 e éd. 2012), vol. 2, p. 968- 969. À

titre d’exemple, dans United States c. Burgess , 576 F.3d 1078 (10th Cir. 2009), affaire décidée 10 ans après Carey , le même tribunal a tiré la conclusion qu’[ traduction ] « [i]l est irréaliste de s’attendre à ce qu’un mandat limite de façon prospective l’étendue d’une fouille par répertoires, noms de fichier ou extensions, ou tente de structurer des méthodes de fouille [. . .] [D]e telles limites restreindraient indûment les objectifs légitimes des fouilles » (p. 1093-1094). Plus récemment, dans United States c.

Christie , 717 F.3d 1156 (10th Cir. 2013), la Tenth Circuit Court a conclu qu’[ traduction ] « [i]l peut arriver que des fichiers informatiques soient accidentellement mal désignés, intentionnellement camouflés ou encore tout simplement cachés, autant de situations qui empêchent les enquêteurs de savoir d’avance quel genre de fouille leur permettra de dénicher les preuves qu’ils recherchent légitimement » : p. 1166; voir, en général, O. S. Kerr, « Ex Ante Regulation of Computer Search and Seizure » (2010), 96 Va. L.

Rev. 1241, p. 1277. [ 35 ] None of the arguments raised in the motion suggest to me that an appeal on the scope of the seizure would have a reasonable chance of success.

[ 36 ] It should be added that the Motion Judge took care to remind the parties that the execution of the warrant could not proceed in a manner that would be unreasonable or abusive under the Charter .

Recalling once again Vu and Cohen , he wrote: [288] Par ailleurs, le Tribunal rappelle en conclusion, l'observation suivante du juge Cromwell dans l'arrêt Vu : [61] Il est sans doute évident, à ce point-ci, que ma conclusion selon laquelle aucun protocole de perquisition n’était requis par la Constitution en l’espèce ne signifie pas que, une fois munis d’un mandat, les policiers étaient pour autant autorisés à passer sans discernement les appareils au peigne fin. En effet, ils demeuraient quand même tenus de se conformer à la règle requérant que la manière de procéder à la perquisition ne soit pas abusive.

Par conséquent, s’ils s’étaient rendu compte durant la perquisition qu’il n’existait en fait aucune raison de fouiller un logiciel ou un fichier spécifique dans l’appareil, le droit relatif aux fouilles, perquisitions et saisies exigeait qu’ils s’abstiennent de le faire. [289] L'ARQ devra avoir à l'esprit ces commentaires afin d’éviter que l’exécution des fouilles numériques ne soit abusive. [ 37 ] These comments are helpful in two respects: first, they correctly underscore the limited role of a reviewing judge seized of a motion for certiorari in like circumstances; and, second, they correctly recall that Charter scrutiny is relevant at the later step of the execution of the warrant. [ 38 ] In sum, considering the role of the Motion Judge and the reasons given for dismissing the certiorari, I reiterate my view that an appeal would have no reasonable prospect of success. [ 39 ] FOR THE FOREGOING REASONS , the undersigned: [ 40 ] DISMISSES the motion, with legal costs.

NICHOLAS KASIRER, J.A. Mtre Nicolas Cloutier Mtre Nicolas Chaput McCarthy Tétrault LLP For the petitioner Mtre Éric Bernatchez Mtre Valérie Ouellet Revenu Québec For the respondents Date of hearing: August 10, 2016