Lambert,
J.A.:—Lester
Lavers,
Kalomira
Lavers,
and
U.S.
Dungaree
Seafarers
Ltd.
were
convicted
in
October,
1983
of
wilfully
evading
payment
of
income
taxes
for
the
1977,
1978
and
1979
taxation
years.
They
were
sentenced
to
pay
fines.
They
appealed
the
sentences
and
some
of
the
fines
were
reduced.
The
amounts
of
the
fines
were
determined
as
a
percentage
of
the
taxes
sought
to
be
evaded.
In
1983,
just
before
the
informations
were
laid
that
started
the
criminal
proceedings,
the
Minister
of
National
Revenue
issued
penalty
assessments
for
each
of
the
three
taxation
years
against
each
of
the
three
taxpayers
under
section
163
of
the
federal
Income
Tax
Act
and
under
section
23
of
the
B.C.
Income
Tax
Act.
The
assessments
imposed
on
the
three
taxpayers
tax
liabilities
for
penalty
taxes
in
addition
to
their
liability
for
the
taxes
that
they
had
sought
to
evade.
The
penalty
assessments
were
also
determined
as
a
proportion
of
the
taxes
sought
to
be
evaded.
Each
of
the
three
taxpayers
paid
the
amount
of
the
penalty
assessments
under
the
compulsion
of
section
158
of
the
Income
Tax
Act,
and
under
protest.
They
objected
to
the
penalty
assessments
and
filed
notices
of
objection
under
section
165
of
the
federal
Income
Tax
Act.
On
February
27,
1985,
the
three
taxpayers
launched
the
petition
which
started
these
proceedings
in
the
Supreme
Court
of
British
Columbia.
They
applied
for
an
order
in
these
terms:
[THAT]
the
levying
of
penalties
under
subsections
23(1)
and
23(3)
of
the
Income
Tax
Act,
R.S.B.C.,
1979
c.
190,
and
subsections
163(1)
and
(2)
of
the
Income
Tax
Act,
S.C.
1970-71-72,
c.
63,
as
amended,
be
declared
to
be
in
violation
of
paragraph
11(h)
of
the
Canadian
Charter
of
Rights
and
Freedoms
and
that
all
funds
so
collected
be
returned
with
interest
to
the
Petitioners;
For
the
purposes
of
the
Constitutional
Question
Act
the
petitioners
stated
the
constitutional
question
in
this
way:
Will
the
imposition
of
penalties
upon
the
Petitioners
under
subsections
23(1)
and
(3)
of
the
Income
Tax
Act
(B.C.)
and
subsections
163(1)
and
(2)
of
the
Income
Tax
Act
(Canada)
where
they
have
been
previously
found
guilty
and
punished
for
offences
under
subsection
239(1)
of
the
Income
Tax
Act
(Canada)
in
relation
to
the
same
subject
matter,
infringe
upon
their
rights
as
guaranteed
by
paragraph
11(h)
of
the
Canadian
Charter
of
Rights
and
Freedoms?
On
March
13,
1985,
the
Minister
of
National
Revenue
confirmed
the
penalty
assessments.
On
March
27,
1985,
the
petition
came
on
for
hearing
before
Chief
Justice
McEachern
on
a
preliminary
question
of
jurisdiction.
The
issues
were
whether
the
Supreme
Court
of
British
Columbia
had
jurisdiction
to
hear
the
petition
and,
if
so,
whether
it
should
nonetheless
decline
that
jurisdiction
in
favour
of
the
Tax
Court
of
Canada
or
the
Federal
Court
of
Canada.
Chief
Justice
McEachern
decided
that
the
Supreme
Court
of
British
Columbia
had
jurisdiction
and
should
not
decline
to
hear
the
petition.
His
reasons
are
reported
at
(1985),
62
B.C.L.R.
327
and
at
(1985),
18
D.L.R.
(4th)
477
and
it
is
not
necessary
to
summarize
them.
On
May
7,
1985,
the
petition
was
heard
by
Mr.
Justice
Taylor.
He
dismissed
it
on
May
16,
1985
on
the
ground
that
counsel
for
the
petitioners
had
argued
at
the
time
of
sentencing
and
on
the
sentence
appeal
that
the
fines
should
reflect
the
fact
that
penalty
assessments
had
already
been
levied.
Mr.
Justice
Taylor
considered
that
by
making
that
argument
the
petitioners
had
already
elected
their
relief
under
subsection
24(1)
of
the
Charter,
and
had
not
been
subjected
to
double
punishment.
On
June
4,
1985,
the
three
taxpayers
filed
appeals
to
the
British
Columbia
Supreme
Court
from
the
Minister
of
National
Revenue's
confirmation
of
the
penalty
assessments
under
the
B.C.
Income
Tax
Act.
On
June
7,
1985,
the
taxpayers
filed
appeals
to
the
Tax
Court
of
Canada
from
the
Minister
of
National
Revenue's
confirmation
of
the
penalty
assessments
under
the
federal
Income
Tax
Act.
It
is
not
suggested
by
either
the
Attorney
General
of
Canada
or
the
Attorney
General
of
British
Columbia
that
the
appeals
were
not
taken
to
the
appropriate
courts.
On
June
12,
1985
the
three
taxpayers
appealed
to
this
court
from
the
dismissal
of
their
petition.
The
Attorney
General
of
Canada
then
crossappealed
from
the
decision
of
Chief
Justice
McEachern
on
the
preliminary
point
of
jurisdiction.
After
an
unexplained
lapse
of
four
years
the
appeal
and
cross-appeal
came
on
for
hearing
before
a
five
judge
division
of
this
Court
on
June
8,
1989.
The
five
judge
division
was
constituted
because
of
the
importance
of
the
questions
raised
by
the
appeal,
and
even
more
particularly,
the
crossappeal.
The
Nature
of
the
Substantive
Issue
The
petitioners,
U.S.
Dungaree
Seafarers
Ltd.,
Lester
Lavers,
and
Kalomira
Lavers
do
not
rely
on
section
7
of
the
Charter.
Nor
do
they
say
that
the
effect
of
paragraph
11(h)
of
the
Charter
is
to
render
section
163
of
the
federal
Income
Tax
Act
and
section
23
of
the
B.C.
Income
Tax
Act
unconstitutional
and
void.
They
say
only
that
the
applications
of
section
163
and
section
23
to
them
in
this
case
are
applications
that
are
in
violation
of
paragraph
11(h)
of
the
Charter.
Paragraph
11(h)
of
the
Charter
reads
in
this
way:
PROCEEDINGS
IN
CRIMINAL
AND
PENAL
MATTERS
11.
Any
person
charged
with
an
offence
has
the
right
(h)
if
finally
acquitted
of
the
offence,
not
to
be
tried
for
it
again
and,
if
finally
found
guilty
and
punished
for
the
offence,
not
to
be
tried
or
punished
for
it
again;
[Emphasis
added.]
Mr.
Justice
Toy,
sitting
then
as
a
judge
of
the
Supreme
Court
of
British
Columbia,
decided
in
The
Queen
v.
Georges
Contracting
Ltd.
(1987),
15
B.C.L.R.
(2d)
240;
affirmed
(1988),
24
B.C.L.R.
(2d)
175,
that
the
fact
that
a
person
had
been
assessed
for
penalty
tax
of
25
per
cent
under
subsection
163(2)
of
the
federal
Income
Tax
Act
for
knowingly
making
a
false
statement
in
a
tax
return
did
not
bar
a
later
prosecution
under
paragraph
239(1)(a)
of
the
Income
Tax
Act
for
making
a
false
or
deceptive
statement
in
a
return.
Mr.
Justice
Toy’s
decision
was
upheld
by
this
Court.
See
(1988),
24
B.C.L.R.
(2d)
175.
The
same
result
was
reached
by
the
Alberta
Court
of
Appeal
in
Yes
Holdings
Ltd.
v.
The
Queen
(1988),
57
Alta.
L.R.
(2d)
227
and
by
the
Ontario
Court
of
Appeal
in
The
Queen
v.
Ferreira
(181/88,
October
17,
1988,
on
appeal
from
[1988]
1
C.T.C.
225).
The
issue
in
all
three
cases
was
whether
the
imposition
of
a
penalty
assessment
for
tax
evasion
precluded
a
later
criminal
prosecution
for
the
same
tax
evasion.
Counsel
for
the
appellant
taxpayers
say
that
this
case
is
distinguishable
from
those
three
cases.
Counsel
do
not
attack
the
criminal
convictions.
They
say
those
convictions
must
stand.
But
they
say
that
the
appellants
have
appealed
the
penalty
assessments
and
they
say
that
those
assessments
cannot
be
maintained
because,
following
the
criminal
convictions,
the
upholding
of
the
penalty
assessments
would
constitute
a
second
punishment
for
the
same
offence,
contrary
to
paragraph
11(h)
of
the
Charter.
So
they
say
that
the
issue
in
this
appeal
is
whether
a
conviction
under
paragraph
239(1)(d)
for
wilfully
evading
compliance
with
the
Income
Tax
Act
is
a
bar
to
upholding
assessments
for
penalty
tax
under
section
163
of
the
federal
Act
and
under
section
23
of
the
B.C.
Act.
It
is
important
to
realize
at
the
outset
that
the
taxpayers
do
not
attack
the
criminal
proceedings
against
them
or
seek
to
avoid
the
consequences
of
those
proceedings.
But
they
say
that
the
penalty
assessments
constitute
an
administrative
double
punishment
for
the
very
offences
that
resulted
in
the
criminal
convictions
and
that
the
penalty
assessments
cannot
be
upheld
after
the
taxpayers
have
been
punished
for
the
criminal
offences
by
the
imposition
of
fines.
They
say
that
the
double
punishment
is
not
the
initial
assessment
of
the
penalty
taxes
which
established
the
tax
liability
but
the
upholding
of
the
assessments
by
the
Minister
of
National
Revenue,
and
perhaps
beyond
that
by
the
Tax
Court
and
the
B.C.
Supreme
Court,
and
the
unlawful
retention
of
the
penalty
taxes,
paid
under
compulsion,
following
the
criminal
convictions
and
the
payment
of
fines.
The
Cross-Appeal
I
propose
to
deal
with
the
cross-appeal
before
I
deal
with
the
appeal.
The
cross-appeal
concerns
the
jurisdiction
of
the
Supreme
of
British
Columbia
and,
by
extension,
the
jurisdiction
of
this
Court.
The
question
of
jurisdiction
was
treated
as
a
preliminary
matter
in
the
Supreme
Court
and
I
think
it
should
continue
to
be
treated
in
that
way.
In
Part
I
of
these
reasons
I
have
set
out
the
relief
requested
in
the
petition.
It
is
that
the
levying
of
penalties
under
the
income
tax
legislation
of
Canada
and
B.C.,
following
the
conviction
of
the
petitioners,
be
declared
to
be
contrary
to
paragraph
11(h)
of
the
Charter
in
this
case.
The
petition
also
contains
an
application
for
an
order
that
all
funds
collected
as
penalties
be
returned
to
the
petitioners,
with
interest.
In
my
opinion
the
primary
remedy
should
be
regarded
as
a
declaration.
If
it
is
granted
then
it
would
establish
that
the
constitutional
rights
of
the
petitioners
have
been
violated.
The
remedy
for
that
violation
is
secondary
to
establishing
that
the
violation
has
occurred.
I
agree
with
Chief
Justice
McEachern
that
the
decisions
of
the
Supreme
Court
of
Canada
in
A-G
Canada
v.
Law
Society
of
B.C.
(the
Jabour
Case),
[1982]
2
S.C.R.
307;
137
D.L.R.
(3d)
1,
and
Canada
Labour
Relations
Board
v.
Paul
L'Anglais
Inc.,
[1983]
1
S.C.R.
147;
146
D.L.R.
(3d)
202
confirmed
that
the
Supreme
Court
of
British
Columbia
has
jurisdiction,
as
a
Provincial
court
of
general
original
jurisdiction,
to
declare
that
a
particular
application
of
federal
legislation
is
contrary
to
the
Constitution.
I
have
no
doubt
that
the
principle
confirmed
by
those
decisions
applies
to
declarations
respecting
applications
of
the
Charter
to
federal
legislation
in
the
same
way
as
to
declarations
respecting
applications
of
sections
91
and
92
of
the
Constitution
to
federal
legislation.
Nor
do
I
think
that
those
two
decisions
can
be
confined
to
cases
of
the
total
unconstitutionality
of
particular
federal
legislation
as
opposed
to
cases
of
the
unconstitutional
application
of
otherwise
constitutional
legislation.
In
both
the
Jabour
case
and
the
L'Anglais
case
the
legislation
in
question
was
constitutional.
It
was
the
particular
application
in
question
that
was
said
to
be
beyond
the
powers
of
Parliament.
In
that
respect
this
case
is
indistinguishable
from
those
two
cases.
I
move
on
now
from
the
jurisdiction
to
grant
declaratory
relief
to
the
jurisdiction
to
order
return
of
the
penalty
taxes
which
have
been
paid.
That
relief
is
dependent
on
the
conclusion
that
the
particular
application
of
the
legislation
with
respect
to
which
the
declaration
is
sought
is
unconstitutional.
But,
if
it
is,
then
the
Attorney
General
of
Canada
should
not
be
able
to
claim
that
the
return
of
money
that
has
been
levied
unconstitutionally
is
beyond
the
competence
of
the
Provincial
superior
courts.
The
applicable
principle
was
discussed
by
Mr.
Justice
Estey
in
the
Jabour
case,
at
page
330,
where
he
referred
to
this
passage
from
the
reasons
of
Chief
Justice
Kerwin
in
British
Columbia
Power
Corporaiton
Limited
v.
British
Columbia
Electric
Company,
[1962]
1
S.C.R.
642;
34
D.L.R.
(2d)
274
at
pages
644-645:
In
a
federal
system,
where
legislative
authority
is
divided,
as
are
also
the
prerogatives
of
the
Crown,
as
between
the
Dominion
and
the
Provinces,
it
is
my
view
that
it
is
not
open
to
the
Crown,
either
in
right
of
Canada
or
of
a
Province,
to
claim
a
Crown
immunity
based
upon
an
interest
in
certain
property,
where
its
very
interest
in
that
property
depends
completely
and
solely
on
the
validity
of
the
legislation
which
it
has
itself
passed,
if
there
is
a
reasonable
doubt
as
to
whether
such
legislation
is
constitutionally
valid.
To
permit
it
to
do
so
would
be
to
enable
it,
by
the
assertion
of
rights
claimed
under
legislation
which
is
beyond
its
powers,
to
achieve
the
same
results
as
if
the
legislation
were
valid.
In
a
federal
system
it
appears
to
me
that,
in
such
circumstances,
the
Court
has
the
same
jurisdiction
to
preserve
assets
whose
title
is
dependent
on
the
validity
of
the
legislation
as
it
has
to
determine
the
validity
of
the
legislation
itself.
In
any
case,
I
consider
that
the
declaratory
relief
requested
is
severable
from
the
relief
consisting
of
a
return
of
the
penalty
taxes
with
interest,
and
I
would
not
consider
that
the
jurisdiction
to
grant
declaratory
relief
should
be
regarded
as
taken
away
because
that
request
for
relief
is
associated
in
the
petition
with
a
request
for
the
return
of
the
taxes.
As
Chief
Justice
McEachern
said
in
his
reasons
on
the
preliminary
motion,
to
do
that
would
be
to
give
a
jurisdictional
advantage
to
those
who
have
refused
to
pay
their
taxes
as
against
those
who
have
paid
them.
The
Attorney
General
of
Canada
also
argued
that
even
if
the
Supreme
Court
of
British
Columbia
had
jurisdiction,
it
should
decline
to
exercise
it
and
defer
to
the
Tax
Court
of
Canada
or
the
Federal
Court.
Finally
he
argued
that
the
petition
was
premature
and
that
the
issues
under
the
Charter
should
be
dealt
with
at
the
same
time
as
any
other
issues
about
the
validity
and
effect
of
the
penalty
assessments.
In
my
opinion
the
constitutional
question
under
the
Charter
is
ripe
for
decision.
I
agree
with
Chief
Justice
McEachern's
opinion,
on
the
preliminary
motion,
that
a
court
whose
jurisdiction
is
invoked,
and
which
has
jurisdiction,
should
not
lightly
decline
to
exercise
it.
The
reasons
advanced
for
declining
jurisdiction
in
this
case
do
not
persuade
me
that
jurisdiction
should
have
been
declined.
I
would
dismiss
the
cross-appeal.
The
Appeal
In
order
to
understand
the
issues
with
respect
to
the
application
of
paragraph
11(h)
of
the
Charter
to
the
assessment
and
upholding
of
the
penalty
taxes
in
this
case,
it
is
necessary
to
understand
the
precise
legislation
underlying
the
criminal
offences
and
the
precise
legislation
underlying
the
penalty
assessments,
and
it
is
necessary
to
consider
exactly
how
they
were
applied
in
this
case.
I
propose
to
start
by
setting
out
that
background.
I
propose
then
to
discuss
the
particular
aspects
of
the
Charter
application
that
are
relevant
to
this
case.
I
will
then
set
out
my
conclusions
and
proposed
disposition.
The
Penalty
Assessment
Provisions
The
provisions
of
the
federal
Income
Tax
Act
under
which
the
penalty
assessments
were
made
are
subsections
(1)
and
(2)
of
section
163:
WILFUL
FAILURE
TO
FILE
RETURN
163.
(1)
Every
person
who
wilfully
attempts
to
evade
payment
of
the
tax
payable
by
him
under
this
Part
by
failing
to
file
a
return
of
income
as
and
when
required
by
subsection
150(1)
is
liable
to
a
penalty
of
50%
of
the
amount
of
the
tax
sought
to
be
evaded.
False
Statements
or
Omissions
(2)
Every
person
who,
knowingly,
or
under
circumstances
amounting
to
gross
negligence
in
the
carrying
out
of
any
duty
or
obligation
imposed
by
or
under
this
Act,
has
made
or
has
participated
in,
assented
to
or
acquiesced
in
the
making
of,
a
false
statement
or
omission
in
a
return,
form,
certificate,
statement
or
answer
(in
this
section
referred
to
as
a
''return")
filed
or
made
in
respect
of
a
taxation
year
as
required
by
or
under
this
Act
or
a
regulation,
is
liable
to
a
penalty
of
(a)
25%
of
the
amount,
if
any,
by
which
(i)
the
tax
for
the
year
that
would
be
payable
by
him
under
this
Act
if
his
taxable
income
for
the
year
were
computed
by
adding
to
the
taxable
income
reported
by
him
in
his
return
for
the
year
that
portion
of
his
understatement
of
income
for
the
year
that
is
reasonably
attributable
to
the
false
statement
or
omission
exceeds
(ii)
the
tax
for
the
year
that
would
have
been
payable
by
him
under
this
Act
had
his
tax
payable
for
the
year
been
assessed
on
the
basis
of
the
information
provided
in
his
return
for
the
year,
.
.
.
[Emphasis
added.]
I
have
underlined
the
word
"penalty"
because
it
categorizes
the
assessments
as
penal
assessments.
The
provisions
of
subsections
(1)
and
(3)
of
section
23
of
the
British
Columbia
Income
Tax
Act
are
so
similar
to
the
provisions
of
subsections
(2)
and
(1),
respectively
of
section
163
of
the
federal
Income
Tax
Act
that
it
is
unnecessary
to
set
them
out.
The
Penalty
Assessments
On
March
77,
1983,
U.S.
Dungaree
Seafarers
Ltd.,
was
reassessed
for
the
1977,
1978
and
1979
taxation
years.
The
reassessments
included
penalty
assessments
under
subsection
163(2)
of
the
federal
Income
Tax
Act
and
subsection
23(1)
of
the
British
Columbia
Income
Tax
Act.
On
April
29,
1983,
Lester
Lavers
was
reassessed
for
the
1977,
1978,
and
1979
taxation
years.
For
the
1977
and
1979
taxation
years
the
reassessments
included
penalty
assessments
under
subsection
163(2)
of
the
federal
Act
and
subsection
23(1)
of
the
B.C.
Act.
For
the
1978
taxation
year
the
reassessment
included
penalty
assessments
under
subsection
163(1)
of
the
federal
Act
and
subsection
23(3)
of
the
B.C.
Act.
Also
on
April
29,
1983,
Kalomira
Lavers
was
reassessed
for
the
1977,
1978,
and
1979
taxation
years.
The
reassessments
included
penalty
assessments
under
subsection
163(2)
of
the
federal
Act
and
subsection
23(1)
of
the
B.C.
Act.
All
three
appellants
in
this
case,
namely
U.S.
Dungaree
Seafarers
Ltd.,
Lester
Lavers,
and
Kalomira
Lavers,
objected
to
the
assessments,
including
the
penalty
assessments.
They
filed
notices
of
objection.
The
assessments
were
confirmed
in
1985.
After
that
the
available
appeal
processes,
if
pursued,
would
lead
to
judicial
determinations
by
the
Tax
Court
of
Canada,
the
Federal
Court
of
Canada
and
the
Supreme
Court
of
British
Columbia.
The
appeal
processes
would
not
be
concluded
until
the
appeal
periods
had
expired
and
the
taxpayers
had
failed
to
appeal
to
those
courts
and
perhaps
beyond.
In
the
present
case
the
three
taxpayers
launched
appeals
but
the
appeal
processes
are
in
abeyance
pending
the
outcome
of
these
proceedings.
In
compliance
with
subsection
158(1)
of
the
Income
Tax
Act,
the
amounts
of
the
assessments,
including
penalty
assessments,
were
paid
to
the
Receiver
General
of
Canada.
The
payments
were
made
under
protest.
The
amounts
of
the
penalty
assessments
were
as
follows:
|
U.S.
Dungaree
|
L.
Lavers
|
|
K.
Lavers
|
Year
|
S.
163
|
S.
23
|
5.
163
|
S.
23
|
S.
163
|
S.
23
|
1977
5,415.86
4,284.38
8,171.65
3,816.45
5,615.54
2,606.94
1978
6,238.51
4,436.69
8,633.90
4,086.60
3,659.58
1,694.11
1979
180.92
144.74
982.58
475.80
939.40
422.74
As
I
have
indicated,
the
penalty
assessments
on
Lester
Lavers
for
1978
were
under
subsection
163(1)
of
the
federal
Act
and
subsection
23(3)
of
the
B.C.
Act.
All
other
penalty
assessments
for
all
three
years
were
under
subsection
163(2)
of
the
federal
Act
and
subsection
23(1)
of
the
B.C.
Act.
The
Offence
Provisions
The
criminal
charges
were
all
laid
with
respect
to
the
offences
described
in
paragraphs
239(1)(a)
and
239(1)(d)
of
the
federal
Income
Tax
Act:
OFFENCES
239.
(1)
Every
person
who
has
(a)
made,
or
participated
in,
assented
to
or
acquiesced
in
the
making
of,
false
or
deceptive
statements
in
a
return,
certificate,
statement
or
answer
filed
or
made
as
required
by
or
under
this
Act
or
a
regulation,
(d)
wilfully,
in
any
manner,
evaded
or
attempted
to
evade,
compliance
with
this
Act
or
payment
of
taxes
imposed
by
this
Act,
or
(e)
conspired
with
any
person
to
commit
an
offence
described
by
paragraphs
(a)
to
(d),
is
guilty
of
an
offence
and,
in
addition
to
any
penalty
otherwise
provided,
is
liable
on
summary
conviction
to
(f)
a
fine
of
not
less
than
25%
and
not
more
than
double
the
amount
of
the
tax
that
was
sought
to
be
evaded,
or
(g)
both
the
fine
described
in
paragraph
(f)
and
imprisonment
for
a
term
not
exceeding
2
years.
[Emphasis
added.]
(There
were
insignificant
variations
in
this
section
over
the
course
of
the
three
relevant
taxation
years.)
No
criminal
charges
were
laid
under
sections
47
and
48,
the
offence
sections,
of
the
British
Columbia
Income
Tax
Act.
Those
sections
are
not
materially
different
from
the
federal
provisions
which
I
have
quoted
immediately
above.
The
Criminal
Charges
The
information
was
laid
on
May
13,
1983,
two
weeks
after
the
assessment
of
the
penalty
assessments
on
Lester
Lavers
and
Kalomira
Lavers.
It
contained
ten
counts,
as
follows:
US
Dungaree
Seafarers
Ltd.,
a
corporation
carrying
on
business
in
the
City
of
Vancouver,
in
the
Province
of
British
Columbia,
Count
1:
On
or
about
the
25th
day
of
July,
1978
made
a
false
or
deceptive
statement
in
its
return
of
income
for
the
fiscal
year
ending
September
30,
1977,
filed
as
required
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
148
(as
amended)
by
stating
that
the
gross
income
for
the
said
year
was
$688,809.60
which
statement
was
false
or
deceptive
by
reason
that
it
failed
to
report
additional
income
in
the
amount
of
$132,266.66
contrary
to
paragraph
239(1)(a)
of
the
said
Act.
Count
2:
|
On
or
about
the
27th
day
of
September,
1979
made
a
false
or
deceptive
|
|
statement
in
its
return
of
income
for
the
fiscal
year
ending
September
|
|
30,
1978,
filed
as
required
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
|
|
148
(as
amended)
by
stating
that
the
gross
income
for
the
said
year
was
|
|
$1,034,130.91
which
statement
was
false
or
deceptive
by
reason
that
it
|
|
failed
to
report
additional
income
in
the
amount
of
$133,368.30
con
|
|
trary
to
paragraph
239(1)(a)
of
the
said
Act.
|
Count
3:
|
US
Dungaree
Seafarers
Ltd.
carrying
on
business
in
the
City
of
Van
|
|
couver,
Lester
Harold
Lavers
and
Kalomira
Lavers
(Biniari)
both
residing
|
|
in
the
Municipality
of
Richmond,
Province
of
British
Columbia,
be
|
|
tween
September
30,
1976
and
September
28,
1979,
wilfully
evaded
.
.
.
|
|
payment
of
taxes
imposed
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
|
|
148
(as
amended)
in
relation
to
income
in
the
amount
of
$265,634.96
|
|
received
by
the
said
US
Dungaree
Seafarers
Ltd.
and
did
thereby
|
|
commit
an
offence
contrary
to
paragraph
239(1)(d)
of
the
said
Act.
|
LESTER
HAROLD
LAVERS,
residing
in
the
Municipality
of
Richmond,
in
the
Province
of
British
Columbia,
Count
4:
|
On
or
about
the
20th
day
of
November,
1979
made
a
false
or
deceptive
|
|
statement
in
his
return
of
income
for
the
1977
taxation
year,
filed
as
|
|
required
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
148
(as
amended)
|
|
by
stating
that
his
total
income
for
the
said
year
was
Nil
which
state
|
|
ment
was
false
or
deceptive
by
reason
that
he
failed
to
report
addi
|
|
tional
income
in
the
amount
of
$96,813.40
contrary
to
paragraph
|
|
239(1)(a)
of
the
said
Act.
|
Count
5:
|
On
or
about
the
14th
day
of
April,
1980
made
a
false
or
deceptive
|
|
statement
in
his
return
of
income
for
the
1979
taxation
year,
filed
as
|
|
required
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
148
(as
amended)
|
|
by
stating
that
his
total
income
for
the
said
year
was
$56,478.52
which
|
|
statement
was
false
or
deceptive
by
reason
that
he
failed
to
report
|
|
additional
income
in
the
amount
of
$11,748.76
contrary
to
paragraph
|
|
239(1)(a)
of
the
said
Act.
|
Count
6:
Between
December
31,
1976,
and
April
15,
1980,
wilfully
evaded
.
.
.
payment
of
taxes
imposed
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
148
(as
amended)
in
relation
to
income
in
the
amount
of
$174,895.27
received
by
him
and
did
thereby
commit
an
offence
contrary
to
paragraph
239(1)(d)
of
the
said
Act.
KALOMIRA
LAVERS
(BINIARI),
residing
in
the
Municipality
of
Richmond,
in
the
Province
of
British
Columbia,
Count
7:
On
or
about
the
30th
day
of
April,
1978
made
a
false
or
deceptive
statement
in
her
return
of
income
for
the
1977
taxation
year,
filed
as
required
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
148
(as
amended)
by
stating
that
her
total
income
of
the
said
year
was
$20,060.10
which
statement
was
false
or
deceptive
by
reason
that
[she]
failed
to
report
additional
income
in
the
amount
of
$76,312.60
contrary
to
paragraph
239(1)(a)
of
the
said
Act.
Count
8:
On
or
about
the
11th
day
of
May,
1979
made
a
false
or
deceptive
statement
in
her
return
of
income
for
the
1978
taxation
year,
filed
as
required
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
148
(as
amended)
by
stating
that
her
total
income
for
the
said
year
was
$26,710.45
which
statement
was
false
or
deceptive
by
reason
that
she
failed
to
report
additional
income
in
the
amount
of
$42,045.97
contrary
to
paragraph
239(1)(a)
of
the
said
Act.
Count
9:
On
or
about
the
16th
day
of
April,
1980
made
a
false
or
deceptive
statement
in
her
return
of
income
for
the
1979
taxation
year,
filed
as
required
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
148
(as
amended)
by
stating
that
her
total
income
of
the
said
year
was
$34,315.92
which
statement
was
false
or
deceptive
by
reason
that
she
failed
to
report
additional
income
in
the
amount
of
$11,277.50
contrary
to
paragraph
239(1)(a)
of
the
said
Act.
Count
10:
Between
December
31,
1976,
and
April
17,
1980,
wilfully
evaded
.
.
.
payment
of
taxes
imposed
by
the
Income
Tax
Act,
R.S.C.
1952,
Chapter
148
(as
amended)
in
relation
to
income
in
the
amount
of
$129,636.07
received
by
her
and
did
thereby
commit
an
offence
contrary
to
paragraph
239(1
)(d)
of
the
said
Act.
As
I
have
said,
there
were
no
charges
laid
under
the
offence
sections
of
the
B.C.
Income
Tax
Act.
The
Criminal
Convictions
and
Sentences
All
three
appellants
were
convicted
on
Count
3.
Lester
Lavers
was
also
convicted
on
Count
6.
Kalomira
Lavers
was
also
convicted
on
Count
10.
We
were
told
by
counsel
for
the
appellants
that
all
the
other
counts
were
Kienap-
pled,
though
I
am
not
sure
whether
that
procedure
resulted
in
a
dismissal
of
the
counts
or
a
staying
of
the
counts.
The
trial
judge,
Judge
Davies,
imposed
these
sentences:
U.S.
Dungaree
Seafarers
Ltd.
|
Count
3—fine
of
$41,181.28
|
|
(100%
of
the
Tax
Sought
to
be
Evaded)
|
Lester
Lavers
|
Count
3—Fine
of
$10,295.32
|
|
(25%
of
the
Tax
Sought
to
be
Evaded)
|
Lester
Lavers
|
Count
6—2
Months
Imprisonment
and
|
|
Fine
of
$50,000
|
|
(About
100%
of
the
Tax
Sought
to
be
|
|
Evaded)
|
Kalomira
Lavers
|
Count
3—Fine
of
$10,295.32
|
|
(25%
of
theTax
Sought
to
be
Evaded)
|
Kalomira
Lavers
|
Count
10—2
Months
Imprisonment
and
a
|
|
Fine
of
$50,000
|
|
(About
125%
of
the
Tax
Sought
to
be
|
|
Evaded)
|
All
of
those
sentences
were
appealed
to
the
County
Court.
Judge
Oppal
dismissed
the
appeals
with
respect
to
Count
3.
He
allowed
the
appeals,
in
part,
with
respect
to
Counts
6
and
10.
He
struck
out
the
imprisonment
and
reduced
the
fines.
In
the
result,
the
sentences
with
respect
to
Count
3
remained
unchanged
and
the
sentences
on
Count
6
and
10
became:
Lester
Lavers
|
Count
6—Fine
of
$35,000
|
|
(70%
of
Tax
Sought
to
be
Evaded)
|
Kalomira
Lavers
|
Count
10—Fine
of
$30,000
|
|
(70%
of
the
Tax
Sought
to
be
Evaded)
|
Neither
Judge
Davies
nor
Judge
Oppal
referred
in
their
reasons
to
the
fact
that
the
taxpayers
had
been
assessed
a
penalty
assessment
for
the
same
tax
evasion
as
was
the
subject
matter
of
the
criminal
charges,
though
that
fact
had
been
mentioned
to
each
of
them
in
the
course
of
argument.
The
Disposition
of
the
Petition
in
Chambers
Mr.
Justice
Taylor
relied
on
the
fact
that
both
before
Judge
Davies
and
before
Judge
Oppal
counsel
for
the
petitioners
had
asked
that
the
penalty
taxes
which
had
been
assessed
should
be
taken
into
account
in
setting
the
sentences
for
the
criminal
offences.
Mr.
Justice
Taylor
considered
that
the
petitioners
had
thus
elected
their
relief
under
subsection
24(1)
of
the
Charter
and
that
by
their
petition
they
were
seeking
a
further
remedy
which
was
inconsistent
with
their
previous
position
and
which,
if
granted,
would
permit
them
to
receive
less
than
proper
punishment.
The
Interpretation
of
Paragraph
11(h):
General
The
essential
words
of
the
Charter
are:
11.
Any
person
charged
with
an
offence
has
the
right
(h)
.
.
.
if
finally
found
guilty
and
punished
for
the
offence,
not
to
be
.
.
.
punished
for
it
again;
The
first
point
to
note
is
that
while
the
Charter
must
be
interpreted
in
its
linguistic,
legal
and
historical
context,
it
should
not
be
interpreted
in
such
a
way
as
to
freeze
the
criminal
and
administrative
law
concepts
that
were
embodied
in
the
public
law
of
Canada
in
1982
in
the
form
that
they
had
in
1982.
Those
concepts
in
that
form
constitute
an
aid
in
interpreting
the
Charter
but
they
are
not
a
substitute
for
the
plain
words
of
the
Charter
itself.
The
second
point
to
note
is
that
the
question
in
this
case
is
not
whether
a
quasi-judicial
proceeding
which
might
have
resulted
in
a
form
of
professional
discipline
or
other
administrative
or
quasi-judicial
punishment
can
cause
a
true
criminal
prosecution
to
be
barred.
See
The
Queen
v.
Wigglesworth,
[1987]
2
S.C.R.
541
and
Tri
mm
v.
Durham
Regional
Police,
[1987]
2
S.C.R.
577
and
the
professional
discipline
cases
referred
to
in
those
two
decisions.
There
is
a
natural
reluctance
to
give
the
Charter
an
interpretation
that
would
prevent
true
criminal
proceedings
from
taking
place.
In
this
case
the
true
criminal
proceedings
have
occurred
and
are
not
under
attack.
They
constitute
the
matter
of
a
public
nature,
intended
to
promote
public
order
and
welfare
within
a
public
sphere
of
activity,
that
is
necessary
to
constitute
the
"offence".
See
Wig-
glesworth,
per
Madam
Justice
Wilson
at
page
560.
Instead,
the
question
in
this
case
is
whether
the
Charter
gives
protection
against
the
administrative
punishment,
namely
the
penal
assessments.
The
third
point
to
note
is
that
the
words
of
the
Charter
themselves
are
fairly
straightforward.
A
person
must
have
been
charged
with
an
offence.
There
is
no
doubt
that
the
three
petitioners
in
this
case
were
charged
with
offences
under
section
239
of
the
federal
Income
Tax
Act.
The
person
must
have
been
finally
found
guilty
and
punished
for
the
offence.
There
is
no
doubt
that
the
three
petitioners
were
finally
found
guilty,
nor
is
there
any
doubt
that
they
were
finally
punished
for
their
offences.
So
the
question
comes
down
to
whether
the
three
petitioners,
with
respect
to
each
offence,
are
in
danger
of
being
"punished
for
it
again".
I
do
not
consider
that
“punished”
presents
any
difficulty
in
this
case.
Both
subsection
163(1)
and
subsection
163(2)
describe
the
assessment
under
the
subsection
as
making
the
taxpayer
“liable
to
a
penalty".
The
penalty
so
imposed
is
no
different
in
its
concept
or
in
its
general
manner
of
calculation,
as
a
percentage
of
tax
sought
to
be
evaded,
than
the
fine
imposed
by
section
239.
See
Wigglesworth,
per
Madam
Justice
Wilson
at
page
561.
The
penalty,
like
the
fine,
finds
its
way
into
the
federal
Consolidated
Revenue
Fund
by
payment
to
the
Receiver
General
of
Canada.
Moreover
the
penalty,
like
the
fine,
is
large
enough
to
constitute
a
“true
penal
consequence".
Again,
see
Wigglesworth,
per
Madam
Justice
Wilson
at
pages
561-2.
So
the
question
comes
down
to
the
meaning
and
application
of
"for
it”,
and
to
the
meaning
and
application
of
"again",
in
their
context
in
paragraph
11(h)
of
the
Charter.
I
will
turn
to
those
two
problems
in
the
next
two
divisions
of
these
reasons.
The
Interpretation
of
Paragraph
11(h):
"For
It”
There
are
four
separate
issues
involved
in
the
question
of
whether
whatever
is
encompassed
by
the
words
“for
it”
in
paragraph
11(h)
of
the
Charter
is
met
in
this
case.
The
first
issue
relates
to
the
fact
that
the
offence
is
set
out
in
one
section,
namely
section
239
of
the
federal
Income
Tax
Act,
and
the
penalty
assessment
is
set
out
in
another
section,
namely
section
163.
In
my
opinion,
the
separate
numbering
makes
no
difference.
The
section
number
is
not
a
necessary
part
of
the
description
of
the
offence.
The
offence
is
a
matter
of
substance.
The
punishment
for
the
offence
is
also
a
matter
of
substance.
The
punishments
are
described
in
the
sections.
The
question
is
whether
the
two
punishments
are
imposed
for
substantially
the
same
thing,
not
whether
they
are
described
in
the
same
sections.
The
different
section
numbers
do
not
mean
that
the
punishments
are
not
for
the
same
offence.
The
second
issue
relates
only
to
Lester
Lavers,
and
only
to
the
1978
year.
That
is
the
most
straightforward
case.
The
criminal
conviction
was
under
paragraph
239(1
)(d)
for
the
offence
that
he
“wilfully
.
.
.
attempted
to
evade
.
.
.
payment
of
taxes
.
.
."
The
penalty
assessment
was
under
subsection
163(1)
as
a
person
who
“wilfully
attempts
to
evade
payment
of
the
tax
.
.
.
by
failing
to
file
a
return
of
income.”
The
two
provisions
correspond.
The
manner
of
committing
the
offence
is
specified
in
one
provision
but
not
in
the
other.
But
the
manner
specified
was
the
manner
in
which
the
offence
was
committed
in
this
case.
In
my
opinion
the
punishment
imposed
by
the
penalty
assessment
for
1978
on
Lester
Lavers
was
punishment
for
the
same
act
and
same
offence
as
the
punishment
comprised
by
the
sentence
imposed
following
conviction
on
the
criminal
charge
on
Count
6.
The
third
issue
relates
to
U.S.
Dungaree
Seafarers
Ltd.
and
to
Kalomira
Lavers
for
the
1977,
1978
and
1979
years
and
to
Lester
Lavers
for
the
1977
and
1979
years.
For
those
taxpayers
in
those
years
the
convictions
were
under
paragraph
239(1
)(d)
for
the
offence
that
the
taxpayer
“wilfully
.
.
.
attempted
.
.
.
to
evade
.
.
.
payment
of
taxes.”
The
penalty
assessment
in
each
case
was
under
subsection
163(2)
and
was
imposed
on
each
of
them
as
a
person
who
”.
.
.
knowingly
.
.
.
has
made
.
.
.
a
false
statement.
.
.
in
a
return."
Those
two
provisions
do
not
precisely
correspond.
There
were
counts
against
all
three
taxpayers
under
paragraph
239(1)(a)
as
persons
who
had
"made
false
or
deceptive
statements
in
a
return."
Those
counts
correspond
to
the
penalty
assessment
provisions
in
subsection
163(2).
Under
the
Kienapple
principle
those
counts
were
not
proceeded
with,
and
there
were
no
convictions
and
no
punishments
with
respect
to
those
counts.
In
my
opinion
the
penalty
assessments
were
nonetheless
for
the
same
acts
as
the
acts
which
constituted
the
offences
giving
rise
to
the
convictions
and
fines.
If
the
counts
were
properly
subject
to
the
Kienapple
principle
because
in
substance
they
were
for
the
same
acts
constituting
in
substance
the
same
delicts,
as
I
think
they
were,
then
the
very
identity
in
substance
that
makes
them
subject
to
the
Kienapple
principle
also
makes
them
two
separate
punishments
for
the
same
substantive
offence.
What
the
taxpayers
actually
did
was
to
attempt
to
evade
payment
of
taxes
by
intentionally
making
a
false
statement
in
a
return.
It
is
for
that
single
intentional
act
with
that
intended
consequence
that
they
have
been
both
convicted
and
fined,
on
the
one
hand,
and
assessed
a
penalty,
on
the
other.
The
fourth
issue
relates
solely
to
the
British
Columbia
Income
Tax
Act.
Penalty
assessments
were
levied
under
that
Act
but
there
were
no
criminal
prosecutions
under
the
Act.
In
those
circumstances,
can
it
be
said
that
the
levying
of
penalty
assessments
under
subsection
23(1)
and
subsection
23(3)
of
the
B.C.
Act
constitutes
being
punished
for
the
same
acts
which
constituted
the
offences
under
the
federal
Act?
For
Lester
Lavers
for
the
1978
year,
the
penalty
assessment
was
imposed
under
subsection
23(3),
which
imposed
a
penalty
for
attempting
to
evade
payment
of
tax.
The
only
tax
to
which
that
can
refer
is
the
tax
imposed
under
the
B.C.
Income
Tax
Act.
There
has
been
no
conviction
for
attempting
to
evade
that
tax.
So
the
imposition
of
a
penalty
for
that
act
is
not
a
second
punishment,
since
there
has
been
no
previous
punishment.
The
same
result
is
arrived
at,
but
in
a
slightly
different
way,
for
all
the
other
penalty
assessments
under
subsection
23(1).
The
penalty
assessments
are
being
imposed
for
knowingly
making
a
false
statement
in
a
return.
The
false
statement
in
each
case
was
a
statement
in
relation
to
the
amount
of
income
and
was
made
for
each
taxpayer
for
each
year
in
the
single
return
for
that
taxpayer
in
that
year
which
the
federal
and
provincial
tax
authorities
agreed
would
be
used
as
a
return
for
both
federal
and
provincial
income
tax.
The
false
statement
in
the
single
return
of
income
was
the
same
false
statement
which
was
then
the
basis
for
the
federal
penalty
assessment
under
subsection
163(2)
and
the
B.C.
penalty
assessment
under
subsection
23(1).
But
that
same
false
statement
did
not
lead
to
a
conviction
for
making
a
false
statement
in
a
return.
The
counts
for
that
offence
were
stayed
under
the
Kienapple
ruling.
The
convictions
were
for
attempting
to
evade
federal
taxes.
Since
the
taxes
sought
to
be
evaded
were
not
B.C.
taxes
there
was
no
conviction
for
evading
B.C.
taxes.
Nor
can
the
Kienapple
ruling
have
the
effect
of
saying
that
substantially
the
same
delict
was
involved
in
both
knowingly
making
a
false
return
for
B.C.
purposes,
on
the
one
hand,
and
in
attempting
to
evade
federal
taxes,
on
the
other
hand.
In
conclusion
on
the
fourth
issue
arising
with
respect
to
the
meaning
and
application
of
"for
it”
in
paragraph
11(h)
of
the
Charter,
it
is
my
opinion
that
neither
for
Lester
Lavers
in
the
1978
year
nor
for
the
other
two
petitioners
for
all
three
years,
nor
for
Lester
Lavers
for
the
1977
and
1979
years,
is
the
penalty
assessment
under
the
B.C.
Act
a
punishment
for
the
same
offence
as
the
offences
for
which
sentences
were
imposed
following
convictions
under
the
federal
Act.
So
my
conclusion
with
respect
to
the
meaning
and
application
of
“for
it”
in
paragraph
11(h)
of
the
Charter,
as
those
words
affect
this
case,
is
that
for
all
three
taxpayers
in
all
three
years
the
federal
penalty
assessments
were
punishments
for
the
same
offences
as
those
for
which
convictions
were
entered
and
fines
were
imposed,
but
that
the
B.C.
penalty
assessments
were
not
punishments
for
the
same
offences
for
which
convictions
were
entered
and
fines
were
imposed
because
there
never
were
prosecutions
or
convictions
for
any
B.C.
offences,
or
for
any
acts
involving
B.C.
taxes.
The
Interpretation
of
Paragraph
11(h):
"Again"
Counsel
for
the
respondents
argued
that
the
penalty
assessments,
if
they
constituted
punishments
at
all,
were
punishments
only
at
the
time
when
the
assessments
were
imposed,
or,
alternatively,
at
the
time
when
they
were
paid,
and
that
those
two
times
both
occurred
before
the
convictions
for
the
income
tax
offences,
so
that
the
penalty
assessments
could
not
constitute
punishment
“again”
for
the
same
offences
as
the
income
tax
offences,
since
"again"
denotes
something
occurring
later
in
time.
In
short,
counsel
for
the
respondents
argued
that
the
penalty
assessments
occurred
first.
In
my
opinion
penalty
assessments
operate
as
punishment
when
the
liability
for
the
penalty
is
finally
established,
by
administrative
or
judicial
process,
to
the
extent
that
those
processes
are
pursued
by
the
taxpayer.
He
is
in
jeopardy
in
relation
to
the
punishment
for
so
long
as
he
has
a
right
to
try
to
establish
by
an
administrative
or
judicial
process
that
he
is
entitled
to
a
refund
of
the
penalty
assessments
which
were
paid
under
statutory
compulsion.
Until
that
time
the
taxpayer
still
has
an
opportunity
to
escape
from
the
punishment
by
establishing
that
he
is
not
liable
for
it.
At
the
worst
the
taxpayer
has
suffered
only
a
provisional
punishment
when
he
makes
the
payment
under
statutory
compulsion.
The
final
punishment
occurs
when
the
taxpayer
no
longer
has
a
right
to
recover
the
amount
which
he
has
paid
as
a
penalty
assessment.
So
it
is
my
opinion
that
the
Charter
protection
is
available
following
conviction
and
sentence
for
so
long
as
the
liability
for
the
penalty
assessment
is
not
finally
determined.
The
result
of
this
conclusion
may
be
that
Charter
protection
is
only
available
to
taxpayers
who
object
to
their
penalty
assessments.
But
that
is
consistent
with
other
aspects
of
Charter
protection
that
are
only
available
when
asserted.
I
think
it
would
be
preferable
if
the
Income
Tax
Act
were
changed
so
that
an
act
which
invited
penal
consequences
could
be
the
foundation
for
either
a
criminal
conviction
and
criminal
punishment,
on
the
one
hand,
or
a
penalty
assessment,
on
the
other
hand,
but
not
both.
Only
that
result
is
consistent
with
the
spirit
of
paragraph
11(h)
of
the
Charter.
But
that
is
not
the
position
at
the
present
time.
I
do
not
consider
that
my
conclusions
with
respect
to
the
application
of
the
word
“again”
in
paragraph
11(h)
of
the
Charter
are
affected
by
the
provisions
of
subsection
239(3)
of
the
federal
Income
Tax
Act
which
I
will
set
out
in
a
later
division
of
these
reasons
headed
"Will
the
Petitioners
Have
Undergone
Only
One
Punishment?”
and
in
which
I
consider
the
reasons
of
Mr.
Justice
Taylor,
from
whose
judgment
this
appeal
was
taken.
I
consider
that
the
upholding
of
the
federal
penalty
assessments
in
this
case
would
constitute
punishment
“again”
for
the
federal
income
tax
offences.
The
Interpretation
of
Paragraph
11(h):
"Is
a
'corporation'
a
'person'?"
Counsel
for
the
Attorney
General
of
Canada
argued
that
while
the
rights
guaranteed
by
paragraph
11(h)
of
the
Charter
are
available
to
Lester
Lavers
and
Kalomira
Lavers,
as
individuals,
to
the
extent
that
those
rights
are
applicable,
the
rights
under
paragraph
11(h)
are
not
available
to
the
third
petitioner,
U.S.
Dungaree
Seafarers
Ltd.,
because
it
is
a
corporation.
Counsel
for
the
Attorney
General
relied
on
the
Attorney
General
of
Quebec
v.
Irwin
Toy
Limited,
[1989]
1
S.C.R.
927;
94
N.R.
167,
particularly
at
page
[S.C.R.]
1004,
and
on
Reference
re:
s.
94(2)
of
the
Motor
Vehicle
Act,
[1985]
2
S.C.R.
486;
[1986]
1
W.W.R.
481;
particularly
at
pages
502-503.
The
former
case
decided
that
section
7
of
the
Charter
does
not
apply
to
corporations.
The
second
case
decided
that
sections
8-14
of
the
Charter
address
specific
deprivations
of
the
rights
to
life,
liberty
and
security
of
the
person,
in
breach
of
the
principles
of
fundamental
justice.
So,
counsel
for
the
Attorney
General
argued,
with
only
logic
to
support
the
argument,
paragraph
11(h)
does
not
apply
to
corporations.
The
fallacy
is
that
the
Motor
Vehicle
Reference
should
not
be
taken
to
have
decided
that
the
rights
guaranteed
by
sections
8-14
are
restricted
only
to
the
ambit
of
section
7.
Those
rights
cover
that
ambit
but
may
go
further.
The
Supreme
Court
of
Canada
has
not
decided
otherwise,
and
I
consider
that
the
arguments
in
favour
of
permitting
paragraph
11(h)
and
some
of
the
other
paragraphs
of
section
11
of
the
Charter
to
apply
to
corporations
are
so
compelling
that
I
would
not
deny
the
paragraph
11(h)
rights
to
corporations
without
binding
authority
to
the
contrary.
I
will
summarize
what
seem
to
me
to
be
the
most
persuasive
arguments
in
favour
of
permitting
the
paragraph
11(h)
rights
to
apply
to
corporations.
1.
The
English
version
of
section
11
of
the
Charter
starts
with
the
words
"Any
person".
The
French
version
starts
with
the
words
"Tout
inculpe”.
Section
57
of
the
Constitution
Act,
1982
provides
that
the
English
version
and
French
version
are
equally
authoritative.
To
the
extent
that
the
English
version
is
ambiguous,
the
French
version
resolves
the
ambiguity.
"Tout
inculpe”
must
extend
to
corporations
charged
with
a
criminal
offence.
See
Peter
Hogg:
Constitutional
Law
of
Canada,
2nd
ed.,
1985,
at
page
667
and
Hrabinsky,
J.
in
R.
v.
Unity
Auto
Body
(1988),
68
Sask.
R.3.
2.
Section
2
of
the
Charter
starts
with
the
word
"Everyone",
which
surely
must
be
equivalent
to
"Any
person".
It
affirms
the
existence
of
fundamental
freedoms,
including
freedom
of
the
press
and
other
media
of
communication.
Those
fundamental
freedoms
would
be
much
confined
if
they
were
not
available
to
corporations.
3.
Corporations
are
frequently
tried
in
the
same
proceedings
as
individuals.
It
would
be
strange
if
one
set
of
rights,
both
substantive
and
procedural,
were
to
be
available
to
the
individuals,
and
a
different
set
of
rights
were
to
be
available
to
the
corporations.
The
right
to
be
presumed
innocent
is
confirmed
in
paragraph
11(d)
of
the
Charter.
It
affects
the
burden
of
proof
and
it
affects
the
constitutional
validity
of
some
statutory
presumptions.
Are
those
statutory
presumptions
to
operate
with
respect
to
corporations
but
not
to
operate
with
respect
to
individuals,
in
the
very
same
trial?
See
Scollin,
J.
in
Balderstone
v.
R.,
[1983]
1
W.W.R.
72;
143
D.L.R.
(3d)
671
(Man.
Q.B.);
4.
The
Charter
provisions
in
section
11
and
in
other
sections
confirm,
or
extend,
or
modify
rights
which
existed
when
the
Charter
was
passed.
Those
rights
will
tend
to
merge
with
the
Charter
rights,
where
the
Charter
applies,
to
provide
a
coherent
body
of
law
that
is
dependent
on
the
Charter.
It
would
be
complicated,
unnecessary,
and
unwise
to
permit
the
development
of
a
parallel
body
of
law
based
solely
on
the
rights
which
existed
at
the
time
the
Charter
was
created,
but
owing
nothing
to
the
Charter,
for
the
determination
of
the
legal
position
of
corporate
entities.
5.
One
of
the
earlier
versions
of
the
Charter,
in
draft
form,
contained
terms
such
as
"his"
or
"her"
and
“individual”.
Those
terms
were
eliminated
before
the
final
version
was
settled.
See
Dale
Gibson:
"The
Law
of
the
Charter:
General
Principles’
(1986)
at
pages
194-195.
The
historical
evolution
of
the
Charter
document
is
a
permitted
tool
in
the
interpretation
of
the
concluded
version.
6.
The
federal
Interpretation
Act
and
the
British
Interpretation
Act,
1978
(Eng.)
c.
30
schedule
1
both
provide
that
"person"
includes
a
corporation.
(The
federal
Interpretation
Act,
of
course,
does
not
apply
directly
to
the
Charter,
but
it
sets
out
a
drafting
context.)
7.
The
decided
cases
all
support
the
view
that
paragraph
11(h)
applies
to
corporations.
See
P.P.G.
Industries
Canada
Ltd.
v.
A.G.
Canada
(1983),
146
D.L.R.
(3d)
261
(B.C.C.A.);
the
trial
decision
of
Mr.
Justice
Cavanagh
in
Southam
v.
Director
of
Investigation,
[1982]
4
W.W.R.
673
(Alta.Q.B.);
20
Alta.L.R.
(2d)
144;
Balderstone
v.
R.,
[1983]
1
W.W.R.
72
(Man.Q.B.);
143
D.L.R.
(3d)
671;
R.
v.
Unity
Auto
Body
Ltd.
(1988),
68
Sask.
R.
3
(Sask.Q.B.);
Gordon
Redi
Mix
v.
R.,
[1988]
6
W.W.R.
470
(Sask.Q.B.);
Re
Panarctic
Oils
Limited
and
the
Queen(1982),
69
C.C.C.
(2d)
393
(N.W.T.S.C.);
141
D.L.R.
(3d)
138;
and
Matheson
&
McMillan
v.
Minister
of
Finance
(1986),
59
Nfld.
&
P.E.I.
R.
189
(P.E.I.S.C.);
178
A.P.R.
189.
8.
The
fact
that
a
corporation
could
not,
because
of
its
very
nature,
avail
itself
of
some
of
the
rights
and
freedoms
confirmed
or-conferred
by
the
Charter,
such
as
a
right
not
to
be
a
witness,
or
a
right
to
liberty
or
to
freedom
of
conscience,
does
not
mean
that
other
rights
or
freedoms
which
could
be
exercised
by
corporations
should
not
be
considered
to
have
been
conferred
or
confirmed
for
them.
The
unavailability
of
some
rights
to
corporate
entities,
arising
from
the
very
nature
of
those
entities,
does
not
affect
the
general
meaning
which
should
be
regarded
as
being
carried
by
the
words
"Everyone"
and
“Any
person".
For
those
reasons
I
conclude
that
the
rights
conferred
and
confirmed
by
paragraph
11(h)
of
the
Charter
are
rights
available
to
the
corporate
petitioner
in
this
case,
U.S.
Dungaree
Seafarers
Ltd.
Will
the
Petitioners
Have
Undergone
Only
One
Punishment?
The
basis
of
of
Mr.
Justice
Taylor's
decision
was
that
the
petitioners
made
submissions
at
the
original
sentencing
before
Judge
Davies,
and
on
the
sentence
appeal
before
Judge
Oppal,
that
the
penalty
assessments
should
be
taken
into
account
in
setting
the
sentences
following
convictions
for
the
federal
income
tax
offences.
Mr.
Justice
Taylor
considered
that
those
submissions
constituted
an
election
of
a
remedy
under
section
24
of
the
Charter
and
precluded
the
petitioners
from
arguing
that
they
were
being
punished
twice
for
the
same
offence.
Subsection
239(3)
of
the
federal
Income
Tax
Act
contemplates
the
kind
of
submission
that
was
made
by
counsel
for
the
petitioners
on
the
sentencing
in
this
case.
It
reads:
PENALTY
UPON
CONVICTION
(3)
Where
a
person
has
been
convicted
under
this
section
of
wilfully,
in
any
manner,
evading
or
attempting
to
evade
payment
of
taxes
imposed
by
Part
I,
he
is
not
liable
to
pay
a
penalty
imposed
under
section
163
for
the
same
evasion
or
attempt
unless
he
was
assessed
for
that
penalty
before
the
information
or
complaint
giving
rise
to
the
conviction
was
laid
or
made.
That
subsection
was
enacted
before
the
Charter
came
into
operation.
In
my
opinion
the
subsection
recognizes
that
a
person
may
be
punished
twice
for
an
income
tax
offence
by
being
sentenced
for
the
offence
and
by
suffering
also
a
penalty
assessment.
It
tries
to
ameliorate
that
consequence
by
requiring
that
the
penalty
be
assessed
before
the
information
is
laid,
and
so
before
the
conviction
or
sentence.
Consequently,
the
sentencing
judge
is
aware
of
the
penalty
assessment
and
knows
it
is
likely
to
be
upheld,
on
appeal,
having
regard
to
his
own
conviction
decision,
and
he
can
thus
make
whatever
allowance
he
thinks
is
appropriate
for
that
factor
in
fixing
the
sentence
for
the
income
tax
offence.
But
that
is
not
to
say
that
in
this
case,
or
in
any
other
case,
the
sentence
will
be
only
a
fine
or
that
the
fine
will
be
reduced
from
what
it
would
otherwise
have
been
by
an
amount
equal
to
the
penalty
assessment.
Nor
is
there
any
indication
in
the
reasons
of
Judge
Davies,
or
the
reasons
of
Judge
Oppal,
that
either
of
them
made
an
allowance
of
any
kind
for
the
amount
of
the
penalty
assessment.
In
my
opinion
the
penalty
assessments
under
the
federal
Income
Tax
Act
constitute
punishment
again
for
the
income
tax
offences
under
the
federal
Income
Tax
Act.
As
such,
the
penalty
assessments
are
now
contrary
to
paragraph
11(h)
of
the
Charter.
My
opinion
is
not
affected
by
the
fact
that
the
criminal
sentences
may
have
been
reduced
to
make
an
allowance
of
some
kind
for
the
penalty
assessments,
the
Charter
prohibits
duplication
of
punishments,
not
excessive
totality
of
punishments.
The
Result
of
This
Decision
in
the
Context
of
Double
Punishment
I
do
not
consider
that
the
conclusion
I
have
reached
with
respect
to
the
application
of
the
Charter
to
the
penalty
assessments
for
federal
tax
is
impractical
or
that
it
permits
dishonest
taxpayers
to
escape
proper
punishment
for
their
acts
of
evasion.
It
is
important
in
this
area
of
the
law
that
the
true
criminal
conviction
and
punishment,
by
the
regular
criminal
process,
should
stand
unimpaired,
and
that
some
form
of
administrative
or
quasi-judicial
punishment
should
not
be
permitted
to
bar
the
true
criminal
process.
But
if
there
is
both
a
true
criminal
process
and
an
administrative
or
quasi-judicial
process,
then
it
is
proper
to
examine
the
administrative
or
quasi-judicial
process
closely
to
see
whether
it
contravenes
the
Charter
by
providing
punishment
again
for
what
is
truly
the
same
offence.
To
carry
out
the
objects
of
the
Charter,
one
would
hope
that
the
true
criminal
process
would
be
permitted
to
occur
first.
If
it
is
important
that
the
true
criminal
process
should
be
unimpaired
by
paragraph
11(h)
of
the
Charter,
as
I
think
it
is,
then
it
is
the
administrative
or
quasi-judicial
process
that
must
give
way
when
criminal
proceedings
are
appropriate
and
where
the
administrative
or
quasi-judicial
process
is
for
the
very
offence
that
is
the
subject
of
the
criminal
process.
Subsection
239(3)
of
the
federal
Income
Tax
Act
requires
that
if
a
penalty
tax
is
to
be
assessed,
it
must
be
assessed
before
the
criminal
information
is
laid.
That
provision
was
passed
before
the
Charter
came
into
being.
It
was
not
intended
to
prevent
the
application
of
the
Charter
and,
as
I
have
explained,
I
do
not
think
it
has
that
effect.
But
if
it
did
have
that
effect
then
it
would
operate
as
a
device
to
secure
double
punishment
for
the
same
offence.
In
my
opinion
it
would
be
a
most
lamentable
state
of
the
law
if
administrative
punishments
were
constitutional
if
they
were
imposed
before
criminal
punishment
but
unconstitutional
if
they
were
imposed
afterwards.
The
views
I
have
expressed
in
this
segment
of
my
reasons
are
shared
by
the
authors
of
two
scholarly
works
in
this
field.
See
William
I.
Innes:
Tax
Evasion
in
Canada,
Carswell
1987,
at
page
12,
and
Edwin
C.
Harris,
Q.C.:
“Civil
Penalties
Under
the
Income
Tax
Act”,
Canadian
Tax
Foundation:
Corporate
Management
Tax
Conference,
1988,
at
page
9:16.
Disposition
of
Appeal
I
would
allow
the
appeal
of
all
three
petitioners
with
respect
to
the
penalty
assessments
under
the
federal
Income
Tax
Act
and
I
would
make
the
declaration
requested
by
them
with
respect
to
those
penalty
assessments.
I
would
dismiss
the
appeal
of
all
three
petitioners
with
respect
to
the
penalty
assessments
under
the
British
Columbia
Income
Tax
Act
and
I
would
refuse
to
make
the
declaration
that
the
petitioners
have
requested
with
respect
to
those
penalty
assessments.
I
would
answer
the
constitutional
question
in
this
way:
(1)
Imposition
of
penalties
upon
the
petitioners
in
this
case
under
subsections
163(1)
and
(2)
of
the
Income
Tax
Act
(Canada),
where
they
have
been
previously
found
guilty
and
punished
for
offences
under
subsection
239(1)
of
the
Income
Tax
Act
(Canada)
in
relation
to
the
same
subject
matter,
infringe
upon
their
rights
as
guaranteed
by
paragraph
11(h)
of
the
Canadian
Charter
of
Rights
and
Freedoms.
(2)
The
imposition
of
penalties
upon
the
petitioners
in
this
case
under
subsections
23(1)
and
(3)
of
the
Income
Tax
Act
(B.C.),
where
they
have
been
previously
been
[sic]
found
guilty
and
punished
for
offences
under
subsection
239(1)
of
the
Income
Tax
Act
(Canada)
in
relation
to
an
equivalent
subject
matter,
do
not
infringe
upon
their
rights
as
guaranteed
by
paragraph
11(h)
of
the
Canadian
Charter
of
Rights
and
Freedoms.
That
disposition
deals
with
the
request
for
declaratory
relief.
I
would
hope
that
it
would
not
be
necessary
to
make
any
specific
order
for
the
return
of
the
penalty
taxes,
with
interest.
If
such
an
order
proves
to
be
necessary
I
would
permit
that
matter
to
be
brought
back
to
the
Court
for
an
approriate
order.
Addendum
When
I
wrote
these
reasons
I
did
not
know
that
I
would
be
dissenting
in
this
appeal.
But
I
have
now
read
Mr.
Justice
Wallace's
reasons
and
I
understand
that
the
other
members
of
the
division
agree
with
him.
Because
dissenting
reasons
should
be
responsive,
I
propose
to
state,
as
concisely
as
I
can,
the
two
points
on
which
I
disagree
with
the
majority.
I
do
so
with
respect
and
only
for
the
purpose
of
convenience
of
reference,
not
by
way
of
argument
or
criticism.
1.
In
my
opinion
the
question
of
whether
the
administrative
assessments
and
the
resulting
penalties
constitute
the
same
"offence"
as
that
for
which
the
appellants
were
found
guilty
and
sentenced
is
meaningless
and
irrelevant.
Assessments
and
penalties
are
not
capable
of
being
"offences".
And
the
application
of
paragraph
11(h)
of
the
Charter
to
this
case
does
not
depend
on
there
being
two
"offences"
or
two
offence
provisions.
Indeed
it
depends
on
there
being
only
one
"offence".
That
offence
is
the
offence
of
attempting
to
evade
taxes
by
making
a
false
statement
in
a
return.
That
is
the
offence
for
which
the
appellants
were
convicted
and
their
fines
were
imposed.
It
is
also
the
act
which
gave
rise
to
the
administrative
assessments.
The
question
under
paragraph
11(h)
of
the
Charter
is
not
whether
the
administrative
assessments
and
penalties
constitute,
in
themselves,
"an
offence”,
but
whether
they
constitute
punishment
for
the
offence
of
attempting
to
evade
taxes
by
making
a
false
statement
in
a
return,
the
very
offence
for
which
the
true
criminal
convictions
occurred
and
the
criminal
fines
were
imposed.
In
my
opinion
they
do.
2.
I
have
said
that
the
imposition
of
the
punishment
by
the
administrative
assessments
is
not
complete
until
the
appeal
process
in
relation
to
the
administrative
assessments
has
come
to
an
end.
Until
then,
the
punishment
can
be
avoided
entirely
by
a
successful
appeal.
And
so
it
can
be
said
not
to
have
been
finally
inflicted.
By
that
reasoning
I
conclude
that
the
administrative
assessments
constitute
punishment
"again"
for
the
same
offences
as
were
punished
by
the
fines
that
were
imposed
following
conviction
in
the
true
criminal
proceedings.
I
concede
that
this
interpretation
represents
a
choice
between
two
competing
interpretations,
neither
of
which
seems
to
me
to
be
manifestly
correct.
But
the
interpretation
which
I
prefer
gives
a
purposive
construction
to
the
Charter
in
its
application
to
this
case
by
preventing
double
punishment.
It
is
for
that
reason
that
I
prefer
it.
See
Hunter
v.
Southam,
[1984]
2
S.C.R.
145;
27
B.L.R.
297
at
page
156,
per
Dickson,
J.
for
the
Supreme
Court
of
Canada.
Wallace,
J.A.:—
I.
Introduction
I
have
had
the
advantage
of
reading
the
reasons
of
my
brother
Lambert
and
I
agree,
for
the
reasons
stated
by
him,
that
the
cross-appeal
must
be
dismissed.
I
differ,
however,
from
the
conclusions
reached
by
my
brother
Lambert
on
the
main
appeal
and,
accordingly,
consider
it
appropriate
that
I
set
out
my
reasons
for
doing
so.
The
relevant
facts
and
pertinent
legislation
are
succinctly
set
forth
in
Mr.
Justice
Lambert's
reasons
for
judgment
and
need
not
be
repeated
here.
The
major
question
for
resolution
on
this
appeal
may
be
framed
in
the
following
form:
If
the
appeal
courts
should
rule
that
the
assessments
and
penalties
imposed
under
subsections
23(1)
and
(3)
of
the
Income
Tax
Act,
R.S.B.C.
1979,
c.
190,
and
subsections
163(1)
and
(2)
of
the
Income
Tax
Act,
S.C.
1970-71-72,
c.
63,
be
upheld,
would
they
constitute
a
violation
of
paragraph
11(h)
of
the
Canadian
Charter
of
Rights
and
Freedoms?
Paragraph
11(h)
of
the
Charter
provides
in
part:
11.
Any
person
charged
with
an
offence
has
the
right
(h)
.
.
.
if
finally
found
guilty
and
punished
for
the
offence,
not
to
be
tried
or
punished
for
it
again;
[Emphasis
added.]
This
question
necessarily
involves
the
resolution
of
two
derivative
issues:
(a)
Do
the
administrative
assessments
and
the
resulting
penalties
constitute
the
same
"offence"
as
that
for
which
the
appellants
were
found
guilty
and
sentenced
under
subsection
239(1)
of
the
federal
Income
Tax
Act
and
thereby
come
within
paragraph
11(h)
of
the
Charter?
(b)
Assuming
the
answer
to
(a)
is
yes—do
the
penalties
imposed
as
a
consequence
of
the
Minister's
assessments
on
March
11,
1983
and
April
29,
1983
constitute
punishment
“again”
for
the
sentences
imposed
on
October
6,
1983
for
a
violation
of
section
239
of
the
federal
Income
Tax
Act?
II.
The
"Offence"
In
R.
v.
Wigglesworth,
[1987]
2
S.C.R.
541,
the
Supreme
Court
of
Canada
defined
“offence”
for
the
purpose
of
paragraph
11(h)
of
the
Charter.
An
enactment
would
create
an
“offence”
where
a
prohibition,
together
with
the
procedure
for
ensuring
compliance,
were
"by
their
nature"
criminal.
This
test
focusses
on
the
interdicted
conduct
and
the
procedural
elements
of
enforcement.
Alternatively,
an
enactment
would
create
an
"offence"
where
punitive
sanctions
were
so
severe
as
to
constitute
"a
true
penal
consequence".
The
focus
here
is
the
severity
of
the
punishment.
I
will
first
examine
whether
a
penalty
assessment
is
“by
its
very
nature"
criminal.
I
will
then
examine
whether
the
quantum
of
an
assessed
penalty
is
so
severe
as
to
constitute
a
"true
penal
consequence".
(a)
The
"Nature"
of
a
Penalty
Assessment
In
Wigglesworth,
supra,
the
Supreme
Court
of
Canada
considered
whether
a
disciplinary
hearing
for
a
"major
service
offence"
under
the
Royal
Canadian
Mounted
Police
Act,
R.S.C.
1970,
c.
R-9,
precluded
subsequent
proceedings
under
the
Criminal
Code
for
the
same
misconduct
(assault)
on
the
ground
that
such
proceedings
would
violate
paragraph
11(h)
of
the
Charter.
Both
proceedings
involved
a
possible
term
of
imprisonment
upon
a
finding
of
guilt.
Wilson,
J.
speaking
for
the
majority,
concluded
(at
page
560):
In
my
view,
if
a
particular
matter
is
of
a
public
nature,
intended
to
promote
public
order
and
welfare
within
a
public
sphere
of
activity,
then
that
matter
is
the
kind
of
matter
which
falls
within
s.
11.
It
falls
within
the
section
because
of
the
kind
of
matter
it
is.
This
is
to
be
distinguished
from
private,
domestic
or
disciplinary
matters
which
are
regulatory,
protective
or
corrective
and
which
are
primarily
intended
to
maintain
discipline,
professional
integrity
and
professional
standards
or
to
regulate
conduct
within
a
limited
private
sphere
of
activity
.
.
.
As
noted
by
Toy,
J.
in
R.
v.
Georges
Contracting
Ltd.
and
Cloarec
(1987),
15
B.C.L.R.
(2d)
240;
affirmed
(1988),
24
B.C.L.R.
(2d)
175
(B.C.C.A.),
the
assessment
and
consequent
imposition
of
penalties
pursuant
to
subsection
163(2)
of
the
Income
Tax
Act
are
proceedings
of
a
different
nature
and
character
than
a
prosecution
of
the
taxpayer
under
section
239.
Despite
the
fact
that
the
same
conduct
was
the
subject
of
both
the
administrative
assessments
and
of
the
prosecution
under
section
239,
the
court
found
that
the
nature
and
character
of
the
two
procedures
were
markedly
different.
The
former
was
purely
a
unilateral
administrative
act—without
a
hearing
and
with
an
appeal
to
the
Tax
Court
where
the
standard
of
proof
is
on
the
balance
of
probabilities,
all
of
which
may
result
in
a
civil
judgment
for
the
unpaid
tax,
penalties,
and
interest.
A
prosecution
under
section
239
proceeds
by
way
of
summary
conviction
or
indictment
with
the
taxpayer
being
tried
in
open
court—the
burden
of
proof
being
beyond
a
reasonable
doubt—and
if
convicted,
the
taxpayer
would
be
sentenced
in
public
to
pay
a
fine
or
imprisonment,
or
both,
with
the
added
consequence
of
having
a
"record"
of
his
conviction.
This
Court
affirmed
Mr.
Justice
Toy's
conclusion
that
"the
assessment
is
a
civil
proceeding
to
which
section
11
of
the
Charter
does
not
apply":
R.
v.
Georges
Contracting
Ltd.
and
Cloarec
(1988),
24
B.C.L.R.
(2d)
175
at
177.
In
affirming
Toy,
J.'s
decision
the
Court
considered
the
judgments
in
Wigglesworth
(which
was
handed
down
after
Toy,
J's
decision),
and
Trumbley
and
Pugh
v.
Fleming,
[1987]
2
S.C.R.
577;
81
N.R.
212
(sub
nom.
Trumbley
v.
Metropolitan
Toronto
Police).
Referring
to
those
cases
Mr.
Justice
Esson
(as
he
then
was)
said
that
"they
afford
no
comfort
whatever
to
the
appellant”
(page
177).
In
Yes
Holdings
Ltd.
and
Yesmaniski
v.
R.
(1987),
57
Alta.
L.R.
(2d)
227
(Alta.
C.A.),
Stevenson,
J.A.
reached
a
similar
conclusion.
He
put
the
issue
in
this
form
at
pages
233-4:
The
accused
thus
do
face
a
risk
of
being
twice
penalized
for
the
same
conduct.
However,
the
argument
founders
when
it
is
recognized
that
s.
11(h)
does
not
provide
a
free-standing
prohibition
against
double
punishment,
but
rather
a
constitutional
protection
against
trial,
conviction
and
punishment
in
the
context
of
s.
11.
To
succeed
it
is
necessary
to
characterize
proceedings
under
s.
163(2)
of
the
Income
Tax
Act
as
proceedings
in
respect
of
an
offence,
which
then
could
be
raised
as
a
bar.
The
protection
of
s.
11
is
accorded
in
criminal
or
quasi-criminal
proceedings.
He
concluded
that
“offence”
in
paragraph
11(h)
of
the
Charter
means
“an
offence
which
is
prosecuted
in
a
criminal
or
penal
proceeding”
(page
234).
A
similar
result,
in
like
circumstances,
was
reached
by
the
Ontario
Court
of
Appeal
in
The
Queen
v.
Ferreira,
(1988),
O.J.
No.
2258;
Ontario
Court
of
Appeal
Registry
Action
No.
181/88,
on
appeal
from
[1988]
1
C.T.C.
225
which
affirmed
the
correctness
of
the
decision
in
The
Queen
v.
Sharma,
[1987]
2
C.T.C.
253;
87
D.T.C.
5424,
(Ont.
S.C.)
wherein
Smith,
J.
held
at
page
254
(D.T.C.
5424):
.
.
.the
imposition
of
the
penalties
did
not
amount
to
either
a
trial
or
to
a
final
finding
of
guilt
in
the
sense
contemplated
by
paragraph
11(h)
of
the
Charter.
The
authorities
cited
do
not
turn
on
the
narrow
question
of
whether
or
not
prior
administrative
decisions
can
bar
subsequent
criminal
prosecutions.
Rather,
they
were
decided
on
the
much
broader
ground
that
the
definition
of
"offence"
in
paragraph
11(h)
of
the
Charter
is
restricted
to
criminal
or
quasi-
criminal
prohibitions
and
that
the
prohibition,
proceedings,
and
fine
associated
with
assessments
of
penalties
under
the
respective
Income
Tax
Acts
are
not
of
a
criminal
or
quasi-criminal
nature
or
character.
In
other
words,
it
is
not
a
question
of
whether
the
administrative
assessments
and
fines
constitute
a
bar
to
subsequent
criminal
prosecutions
but
rather
whether
they
constitute
an
offence
at
all
in
the
sense
in
which
that
term
is
used
in
paragraph
11(h)
of
the
Charter.
I
have
concluded
that
the
assessments
by
the
Minister
and
the
imposition
of
penalties
pursuant
to
subsections
163(1)
and
(2)
of
the
Income
Tax
Act
(Canada)
and
subsections
23(1)
and
(3)
of
the
Income
Tax
Act
(B.C.)
are
properly
characterized
as
private
matters
of
a
regulatory
nature—primarily
intended
to
regulate
the
conduct
of
taxpayers
with
reference
to
their
complying
with
the
requirements
of
the
respective
Income
Tax
Acts.
The
penalties
which
may
be
imposed
upon
such
assessment
are
designed
to
achieve
that
objective.
In
contra-distinction,
prosecutions
for
a
violation
of
section
239
are
properly
characterized
as
criminal
and
penal
matters
intended
to
"promote
public
order
and
welfare
within
a
public
sphere
of
activity"
by
deterring
the
public
from
the
commision
of
flagrant
breaches
of
the
Income
Tax
Act.
Accordingly,
I
find
that
the
assessments
by
the
Minister
and
the
imposition
of
penalties
for
a
violation
of
section
163
of
the
federal
Income
Tax
Act
and
section
23
of
the
British
Columbia
Income
Tax
Act
do
not
constitute
a
finding
of
guilty
or
a
punishment
for
an
offence
which
comes
within
paragraph
11(h)
of
the
Charter.
(b)
“True
Penal
Consequence"
In
concluding
that
the
assessments
of
the
Minister
and
the
imposition
of
penalties
pursuant
thereto
cannot
be
properly
characterized
as
an
"offence"
within
paragraph
11(h)
of
the
Charter,
I
have
only
dealt
with
the
"nature"
of
the
proceedings.
This
leaves
to
be
resolved
the
question
of
whether
the
punishment
imposed
pursuant
to
the
assessments
of
the
Minister
constitutes
"true
penal
consequences"
so
as
to
bring
the
penalties
consequent
upon
the
assessment
proceedings
within
the
prohibition
expressed
in
paragraph
11(h)
of
the
Charter.
Madam
Justice
Wilson
in
Wigglesworth,
supra,
enunciated
the
"true
penal
consequence"
test
in
these
words
(at
page
561):
In
my
opinion,
a
true
penal
consequence
which
would
attract
the
application
of
s.
11
is
imprisonment
or
a
fine
which
by
its
magnitude
would
appear
to
be
imposed
for
the
purpose
of
redressing
the
wrong
done
to
society
at
large
rather
than
to
the
maintenance
of
internal
discipline
within
the
limited
sphere
of
activity.
She
acknowledged
that
the
imposition
of
a
fine
"may
be
fully
consonant
with
the
maintenance
of
discipline
and
order
within
a
limited
private
sphere
of
activity
and
thus
not
attract
the
application
of
s.
11"
(page
561).
This
would
particularly
be
so
where
the
power
to
impose
fines
is
for
the
purpose
of
achieving
a
particular
private
objective.
Madam
Justice
Wilson
also
observed
that
if
a
person
is
subject
to
penal
consequences
such
as
imprisonment
that
person
should
be
entitled
to
the
protection
provided
by
section
11
of
the
Charter.
In
the
present
case
the
penalties
which
can
be
imposed
following
the
assessments
by
the
Minister
pursuant
to
subsection
23(1)
of
the
Income
Tax
Act
(B.C.)
and
subsection
163(2)
of
the
Income
Tax
Act
(Canada)
for
filing
a
false
statement
do
not
carry
with
them
any
threat
of
imprisonment,
nor
do
they
give
a
discretionary
range
of
punishment.
They
are
restricted
in
amount
to
25
per
cent
of
the
tax
sought
to
be
evaded
and,
in
the
case
of
a
wilful
attempt
to
evade
the
payment
of
taxes,
to
50
per
cent
of
such
tax.
By
contrast,
the
taxpayer
who
is
guilty
of
a
violation
of
section
239
is
liable
to
a
fine
ranging
from
25
per
cent
to
50
per
cent
of
the
amount
of
tax
sought
to
be
evaded
or
to
imprisonment
for
a
time
not
exceeding
two
years
or
to
both
imprisonment
and
a
fine.
In
my
view,
the
distinction
in
the
severity
of
the
respective
penalties
indicates
that
Parliament
intended
that
the
imposition
of
the
statutory
penalty
following
assessments
by
the
Minister
would
reflect
a
sufficiently
significant
monetary
punishment
to
deter
taxpayers
from
failing
to
comply
with
the
Income
Tax
Acts
and
would
thereby
achieve
the
objective
of
this
administrative
procedure.
It
is
also
an
incentive
to
diligence
for
those
who
might
be
grossly
negligent
but
not
truly
criminal.
On
the
other
hand,
the
severity
of
the
public
sentence
which
could
be
imposed
following
a
conviction
under
section
239
clearly
points
to
Parliament's
intention
to
provide
a
punishment
designed
to
redress
a
public
wrong.
I
do
not
consider
this
distinction
in
the
nature
and
purpose
of
the
two
punishments
to
be
diminished
by
the
fact-that
all
fines
end
up
in
the
consolidated
revenue
fund,
via
the
Receiver
General
of
Canada.
In
the
circumstances
this
is
the
only
appropriate
office
to
which
such
payments
could
be
made.
In
summary,
therefore,
the
penalty
assessment,
while
not
trivial,
is
not
so
severe
as
to
amount
to
a
"true
penal
consequence".
I
find
support
for
the
conclusion
I
have
reached
from
the
decision
of
Georges
Contracting,
supra,
where
this
Court,
after
considering
the
Wigglesworth
decision,
found
the
Minister’s
assessment
and
consequent
penalty
to
be
a
civil
proceeding
to
which
paragraph
11(h)
of
the
Charter
did
not
apply.
Accordingly,
I
find
that
the
assessments
of
the
Minister
and
the
penalties
imposed
as
a
consequence
of
such
assessments
do
not
come
within
paragraph
11(h);
they
are
not
criminal
or
quasi-criminal
“by
nature",
nor
are
the
penalties
a
"true
penal
consequence".
lll.
If
finally
"punished
for
the
offence,
not
to
be
.
.
.
punished
for
it
again"
Finding
that
the
penalty
assessment
is
not
an
“offence”
is
sufficient
for
the
disposing
of
this
appeal.
If,
however,
the
appellants
had
been
successful
in
demonstrating
that
the
Minister’s
assessments
came
within
paragraph
11(h)
of
the
Charter,
either
because
of
the
nature
of
the
offence
or
its
penal
consequences,
they
would
have
still
been
faced
with
a
further
hurdle
on
this
appeal;
namely,
that
of
demonstrating
that
the
Minister’s
assessments
and
the
consequent
penalties
of
March
and
April,
1983
(still
under
appeal)
constitute
punishment
“again”
for
the
violation
of
section
239
of
the
federal
Income
Tax
Act
and
the
consequent
sentence
imposed
on
October
6,
1983.
If
it
did
not,
the
appellants
are
not
entitled
to
the
protection
of
paragraph
11(h).
In
the
present
case,
unlike
the
previous
cases
cited,
no
question
is
raised
as
to
the
validity
of
the
criminal
prosection,
conviction
or
the
consequent
sentence
imposing
a
fine
on
the
ground
that
the
taxpayers
were
being
found
guilty
and
punished
again
for
an
offence
for
which
the
Minister
had
previously
assessed
a
penalty—nor
is
any
other
ground
for
attacking
the
validity
of
the
prosecution
or
sentence
under
section
239
raised—presumably
because
the
taxpayers
in
such
circumstances
would
have
been
met
with
the
Georges
Contracting
case
and
the
other
cases
cited.
Those
cases
state
unequivocally
that
a
penalty
assessment
will
not
bar
subsequent
criminal
proceedings.
Rather,
the
appellants
here
adopt
the
position
that
it
is
the
imposition
of
penalties
pursuant
to
the
Minister's
assessments
in
March
and
April,
1983,
in
addition
to
the
sentences
imposed
for
a
breach
of
section
239
on
October
6,
1983,
which
constitutes
a
violation
of
paragraph
11(h)
of
the
Charter.
In
other
words,
they
assert
that
a
prior
criminal
conviction
could
bar
a
subsequent
confirmation
of
a
penalty
assessment.
Because
of
the
circuitous
route
adopted
by
the
appellants
to
seek
the
protection
afforded
by
paragraph
11(h)
of
the
Charter,
it
is
important
to
keep
in
mind
that
paragraph
11(h)
still
requires,
as
a
prerequisite
to
its
implementation,
that
the
person
found
guilty
and
punished
for
the
“offence”
is
being
punished
“again”
for
an
offence
of
the
same
nature
and
character.
In
my
opinion,
the
penalty
assessments
do
not
operate
as
punishment
only
when
the
liability
for
the
penalty
is
finally
established
at
the
conclusion
of
the
appeal
procedures
pursued
by
the
taxpayers.
I
do
not
agree
that
the
punishment
occurs
when
the
taxpayer
no
longer
has
a
right
to
recover
the
amount
which
he
has
paid
as
a
penalty
assessment
or
an
opportunity
to
have
the
punishment
modified
or
varied.
Rather
I
am
of
the
opinion
the
taxpayers
were
"punished"
(in
the
sense
that
term
is
used
in
paragraph
11(h))
when
the
Minister’s
assessments
and
consequent
penalties
were
imposed
on
October
6,
1983.
In
considering
this
issue
it
is
to
be
noted
that,
at
the
time
of
the
criminal
trial
of
the
charge
under
section
239,
the
taxpayers
did
not
adopt
the
position
that
they
had
not
been
“punished”
by
reason
of
the
penalties
they
had
previously
paid
consequent
upon
the
Minister’s
assessments.
Rather,
the
taxpayers
sought
to
have
the
sentence
imposed
at
the
criminal
trial
by
the
trial
judge,
tempered
or
modified,
in
part,
by
reason
of
the
penalties
they
had
previously
paid.
Counsel,
having
made
that
submission
in
the
criminal
proceeding
to
the
trial
judge,
the
judge
may
well
have
taken
such
matters
into
consideration—
there
is
certainly
no
reason
why
he
should
expressly
state
he
did
so
in
his
reason
for
judgment
and
it
cannot
be
inferred
from
the
sentence
delivered
that
he
did
not
take
into
account
all
relevant
considerations
and
submissions
when
determining
the
appropriate
sentence.
Moreover,
the
procedure
adopted
by
the
appellants,
in
drawing
to
the
trial
judge's
notice
in
a
criminal
trial
the
penalties
which
they
had
previously
paid,
was
in
accord
with
the
principle
inherent
in
subsection
239(3)
of
the
federal
Income
Tax
Act
which
provides
that
the
assessment
of
such
penalties
must
precede
the
laying
of
the
information
in
the
criminal
proceeding
if
the
taxpayer
is
to
be
liable
for
the
same.
One
must
also
consider
the
effect
of
subsection
152(8)
of
the
federal
Income
Tax
Act
on
this
issue.
It
provides:
An
assessment
shall,
subject
to
being
varied
or
vacated
on
an
objection
or
appeal
under
this
Part
and
subject
to
a
reassessment,
be
deemed
to
be
valid
and
binding
notwithstanding
any
error,
defect
or
omission
therein
or
in
any
proceeding
under
this
Act
relating
thereto.
Even
if
this
provision
were
given
the
most
liberal
interpretation
it
would
still
declare
an
assesment
"valid
and
binding”
until
an
appeal
court
varied
or
vacated
the
assessment.
Other
provisions
in
the
federal
Income
Tax
Act
confirm
the
principle
that
assessments
are
valid
until
a
competent
body
determines
otherwise.
For
example,
section
165,
which
provides
for
appeals
within
the
department
empowers
the
Minister
of
National
Revenue
to
“vacate,
confirm,
or
vary
the
assessment
or
reassess
.
.
."
all
terms
that
imply
that
the
original
assessment
continues
operative
until
the
Minister
of
National
Revenue
decides
otherwise.
Similarly,
a
taxpayer
may
choose
to
by-pass
intra-departmental
appeal
and
proceed
directly
to
the
Tax
Review
Board
or
the
Federal
Court.
When
an
appeal
is
thus
instituted
the
Minister
is
deemed
to
have
confirmed
the
assessment
(subsection
165(4)).
I
would
be
hard
put
to
accept
the
proposition,
without
authority
to
support
it,
that
a
taxpayer,
against
whom
a
valid
and
binding
assessment
has
been
made
and
penalties
imposed,
which
he
has
paid,
has
not
been
"punished"
until
such
time
as
the
taxpayer
exhausts
all
available
appeal
processes.
I
am
supported
in
my
conclusion
by
decisions
of
the
Tax
Court
of
Canada
and
the
Federal
Court-Trial
Division.
In
Super
Jewellers
Inc
v.
M.N.R.,
[1986]
1
C.T.C.
2591;
86
D.T.C.
1404,
(T.C.C.)
a
taxpayer
was
assessed
a
penalty
under
subsection
163(2)
and
was
later
charged
with
an
offence
under
section
29.
After
the
taxpayer
was
convicted,
the
Minister
issued
a
reassessment.
(Apparently
the
taxpayer
had
not
paid
the
initial
penalty
and
the
reassessment
reduced
the
penalty
previously
assessed.)
The
taxpayer
asserted
that
the
reassessment
came
after
the
conviction
and
claimed
that
it
constituted
punishment
“again”
for
the
same
offence.
Rip,
T.C.J.
held
that
the
reassessment
was
a
mere
variation
of
the
original
assessment,
which
had
continued
in
force
throughout
the
criminal
proceedings.
He
wrote
at
page
2600
(D.T.C.
1401):
I
have
determined
that
the
penalty
imposed
pursuant
to
subsection
163(2)
of
the
Act
was
assessed
prior
to
the
laying
or
making
of
the
information
or
complaint
giving
rise
to
the
conviction.
Counsel
for
the
appellant
appears
to
have
continued
his
argument
on
the
Charter
issue
on
the
basis
that
the
penalty
assessed
under
subsection
163(2)
of
the
Act
was
made
after
the
conviction
under
subsection
239(1)
of
the
Act.
He
argues
that
since
the
appellant
has
already
been
punished
under
section
239
of
the
Act,
paragraph
11(h)
of
the
Charter
precludes
a
penalty
being
assessed
under
subsection
163(2)
of
the
Act;
to
assess
a
penalty
would
be
to
punish
the
appellant
a
second
time.
Because
of
my
earlier
finding
that
the
assessment
of
the
penalty
was
prior
to
the
initiation
of
proceedings
under
section
239
of
the
Act,
I
have
had
difficulty
in
following
counsel's
reasoning
on
this
point.
Since
at
time
of
the
trial
before
the
Provincial
Court
the
penalty
under
subsection
163(2)
had
been
assessed,
counsel,
for
the
purpose
of
consistency
ought
to
have
raised
at
that
trial
the
defence
that
the
prosecution
of
his
client
under
subsection
239(1)
of
the
Act
was
contrary
to
paragraph
11(h)
of
the
Charter,
if
indeed
it
is.
The
penalty
assessed
under
subsection
163(2)
of
the
Act
was
levied
prior
to
the
appellant
being
found
guilty
and
punished
for
an
offence
described
in
subsection
239(1)
of
the
Act.
See
also
The
Queen
v.
Taylor,
[1984]
C.T.C.
436
at
page
439;
84
D.T.C.
6459.
I
have
concluded
that
the
taxpayers
were
clearly
“punished”
when
they
were
required
to
pay
the
penalties
levied
as
a
consequence
of
the
Minister's
assessments
in
March
and
April,
1983.
Since
these
penalties
preceded
any
punishment
which
the
taxpayers
received
for
a
violation
of
section
239,
they
cannot
constitute
punishment
“again”
for
the
section
239
offence.
It
would
be
straining
the
language
of
paragraph
11(h)
to
consider
that
the
upholding
of
the
Minister’s
assessment
by
an
appellate
court
constituted
punishment
“again”
for
the
section
239
sentence.
In
the
circumstances,
I
find
it
unnecessary
to
deal
with
the
issue
of
whether
the
rights
provided
by
paragraph
11(h)
of
the
Charter
are
not
available
to
U.S.
Dungaree
Seafarers
Ltd.
because
it
is
a
corporation.
I
would
defer
expressing
an
opinion
on
that
issue
until
the
circumstances
raised
on
appeal
require
such
a
ruling.
I
would
dismiss
the
appeal.
Appeal
dismissed.