Director can obtain court order compelling disclosure of records from third parties
The British Columbia Court of Appeal allowed an appeal of a finding that a search under s. 11.01 of BC’s Civil Forfeiture Act, 2005, authorized an unreasonable search and seizure under s. 8 of the Canadian Charter of Rights and Freedoms.
In British Columbia (Attorney General) v. McDermid, 2025 BCCA 455, the director of civil forfeiture received information from 2020–21 regarding a police investigation into three properties owned by the two respondents, which revealed an unlicensed cannabis operation.
The director exercised his power under s. 22.02 of the Act to request two financial institutions to disclose limited information regarding the respondents’ accounts. Armed with that information, the director initiated proceedings under s. 3 of the Act for the forfeiture of the properties and the cannabis operation’s proceeds.
The director applied for a court order under s. 11.01 of the Act to compel the financial institutions to disclose information and records about the first respondent’s accounts with them. At the application hearing, the respondents questioned the constitutional validity of ss. 22.02 and 11.01.
Section 11.01 allowed the director to obtain a court order compelling the disclosure of records or information from third parties. The issue was whether s. 11.01 breached the respondents’ s. 8 rights to protection from unreasonable search and seizure.
On Jan. 21, 2025, a chambers judge of the Supreme Court of British Columbia denied the director’s application under s. 11.01. The judge determined that s. 11.01 infringed s. 8 of the Charter, while s. 22.02 did not.
On appeal, the BC attorney general and the director alleged that the judge had wrongly found a breach of s. 8 of the Charter. The director also sought the issuance of the s. 11.01 order he had requested from the court below.
No Charter breach
The Court of Appeal for British Columbia allowed the appeal and remitted the director’s s. 11.01 application to the British Columbia Supreme Court.
Regarding the scope of s. 11.01, the appeal court described the s. 11.01 search as firmly grounded in the Act’s text, context, and purposes.
The appeal court accepted that the potential scope of the information available via a s. 11.01 search was broad, possibly including highly personal financial information. However, the appeal court pointed out that this was subject to prior judicial authorization.
Under this authorization process, the director should prove to a judge that the state’s legitimate interest in obtaining information would outweigh a person’s reasonable privacy expectations under the objective standard of reasonableness.
The appeal court disagreed with the chambers judge’s interpretation of s. 11.01 as allowing the director to unreasonably access an excessive amount of information with no connection to the Act’s purposes.
Next, in its reasonableness analysis, the appeal court ruled that s. 11.01 did not infringe s. 8 of the Charter. The appeal court stressed that the requirement of prior judicial authorization ensured the s. 11.01 search’s objective reasonableness.
The appeal court addressed the four factors comprising the reasonableness analysis in Goodwin v. British Columbia (Superintendent of Motor Vehicles), 2015 SCC 46. Except for the fourth, the appeal court found that these factors favoured the s. 11.01 search’s reasonableness.
First, the appeal court acknowledged that the Act’s purposes were compelling. The appeal court added that the Act’s asset-tracing provisions, including s. 11.01, were necessary to attain those purposes. The parties did not dispute that the first factor weighed in favour of reasonableness.
Second, the appeal court held that the legislation’s civil nature supported that the search was reasonable. The appeal court did not consider the s. 11.01 search comparable to the comprehensive search of a home without judicial authorization and the provision of information to the police, as discussed in Arkinstall v. City of Surrey, 2010 BCCA 250.
Third, the appeal court found that the search mechanism and its intrusiveness into the person’s reasonable privacy expectations supported that the search was reasonable, not overbroad.
The appeal court explained that s. 11.01 required the requested information’s purpose to be carrying out the director’s role under the Act.
According to the appeal court, a s. 11.01 search was not as privacy-intrusive as the search discussed in T.L. v. British Columbia (Attorney General), 2023 BCCA 167, although there were reasonable privacy expectations in the information covered by s. 11.01, some of which might be as private as some personal health information.
Fourth, the appeal court determined that the lack of procedural safeguards to minimize the potential for abuse militated against reasonableness.
The appeal court accepted that the absence of any requirement for after-the-fact notice or an explanation for why it was unavailable constituted a serious concern. The appeal court added that the Act lacked procedural safeguards to tackle this concern.
Lastly, the director sought the issuance of his application seeking the disclosure of the first respondent’s bank records from the two financial institutions. The appeal court remitted this matter because it saw no information in the record about how the BC Supreme Court had addressed the merits of this request.
