The Ontario Court of Appeal has ruled that it is not "plain
and obvious" that regulatory investigators owe no duty of care
to suspects under investigation. The same logic should apply to
environmental investigators: shouldn't they be personally
liable to their suspects, if they misuse their powers?
In McCreight v. Canada (Attorney General), the
Canada Revenue Agency (CRA) suspected a chartered accountant and
other senior tax advisors of fraud and conspiracy to help their
clients obtain research and development tax credits. The CRA
investigators obtained three search warrants to search the homes
and offices of the accused, and seized numerous documents and
computers. When the court rejected a CRA request for an extension
of time to review the seized documents, the CRA laid charges
against all the accused. A judge later ruled that the charges had
been laid "primarily to retain possession of the seized
Seven years later, the charges against the individual tax advisors
were dismissed by the court, on the ground that they were not
supported by any evidence. The charges against the corporate
taxpayers were later dismissed on the basis of unreasonable delay
contrary to the Charter.
The individuals then began a lawsuit against, among others, the CRA
investigator who obtained the search warrants and swore the
Information against them.
The federal government moved to strike out the lawsuit, arguing
that the investigator owed no duty of care to suspects under
investigation. The Court of Appeal disagreed.
Negligence is not a recognized cause of action against
prosecutors. However, it is possible that it is a valid cause of
action against investigators. The Supreme Court has already
ruled that, in certain circumstances, police officers may owe a
duty of care to their suspects. It is not plain and obvious that
the same rule cannot apply to CRA investigators. Therefore, the
court allowed the lawsuit against the investigators to proceed to
By the same logic, environmental investigators may owe a duty of
care to suspects that they investigate. The penalties imposed under
the Environment Protection Act are often equally or more
severe than those imposed under the Income Tax Act, and the
consequences of unwarranted charges can be at least as severe.
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