By The Court:—These are summary conviction appeals. The appeals to this court are, therefore, restricted to questions of law. As will be seen, they raise a number of questions of law, the principal one being the validity of the procedure for appeals from the trial court to the summary conviction appeal court provided by Part XXIV of the Criminal Code, R.S.C. 1970, c. C-34.
There were two separate informations. The first information related to the appellant Urbano L. Ramos (Ramos) only. It charged that:
URBANO L. RAMOS ... unlawfully did in the Township of Ekfrid, in the County of Middlesex or elsewhere in the Province of Ontario, between the 31 day of December, 1977 and the 22nd day of August, 1981, wilfully evade the payment of $29,515.70 in taxes imposed on him by the Income Tax Act, R.S.C. 1952, Chapter 148, as amended, by failing to report income in the sum of $25,000.00 for the taxation year 1978 and $75,000.00 for the taxation year 1980, and he has thereby committed an offence contrary to Section 239(1)(d) of the said Act.
The second information related to both the appellant Ramos and the appellant Century 21 Ramos Realty Inc. (Ramos Realty). It charged that:
CENTURY 21 RAMOS REALTY INC. (formerly known as L. Ramos Realty Limited) . . . and: URBANO L. RAMOS . . . being an officer, director or agent of the said Century 21 Ramos Realty Inc., (formerly known as L. Ramos Realty Limited) unlawfully did in the City of London, in the County of Middlesex or elsewhere in the Province of Ontario, between the 31st day of December, 1977 and the 4th day of July, 1979 wilfully evade the payment of $15,000.00 in taxes imposed by the Income Tax Act, R.S.C. 1952, Chapter 148, as amended, upon the said L. Ramos Realty Limited, by failing to report income in the sum of $100,000.00 for the taxation year 1978, and they have thereby committed an offence contrary to Section 239(1)(d) of the said Act.
Section 239 of the Income Tax Act, R.S.C. 1952, c. 148, as amended, creates a hybrid offence. The Crown elected to proceed summarily.
The trial on the first information commenced on July 27, 1983. Following the completion of the evidence on the first information, the appellant was arraigned on the second information, and counsel agreed that the evidence called on the first information would apply to the second information. It was not suggested that the procedure followed infringed the principle laid down in Phillips and Phillips v. The Queen (1983), 8 C.C.C. (3d) 118.
At the close of the Crown's case on the second information, defence counsel moved for an acquittal on both informations. The provincial judge granted the motions. With respect to both informations, he held that on a charge under paragraph 239(1)(d) of the Income Tax Act, it is essential for the Crown to prove that an assessment has been made pursuant to section 152 of the Act before the charge has been laid, and the Crown had failed to do so. With respect to the second information, he held that it was essential for the Crown to prove that the tax payable ($15,000) had not been paid, and the Crown had failed to do this, notwithstanding the filing by it of the income tax return of the company for the taxation year 1978 which showed income of $6,747 and tax due of $1,012.
An appeal was taken by way of stated case from the decision of the provincial judge to Ewaschuk, J. who allowed the appeal. In a short endorsement, he ruled that the provincial judge had erred on both grounds.
The defendants then appealed to this Court. The appeal was dismissed. On the ground common to both informations, the Court held that on a charge under paragraph 239(1)(d) of the Income Tax Act, it is not essential for the Crown to prove that prior to the charge being laid an assessment has been made pursuant to section 152 of the Act. On the ground which related to the second information only, it held that there was evidence that the tax had not been paid in that the tax return for the company for the taxation year 1978, filed as an exhibit by the Crown, did not disclose the $100,000 income which the Crown alleged had been wilfully omitted from the company's tax return with a view to avoiding tax.
The trial then continued before the provincial judge. At the conclusion of the case, the provincial judge in a short, oral judgment acquitted the appel- lants. The Crown appealed to the District Court. After hearing argument, the summary conviction appeal court judge reserved judgment. In a long, carefully reasoned judgment, he set aside the acquittals and found the appellants guilty as charged. The appellants have appealed to this court pursuant to section 771 of the Criminal Code.
The appellants served notice on the respondent and on the Attorney General of Ontario of their intention to argue a constitutional question, namely, the validity of sections 613(4), 748, 755 and 771 of the Criminal Code. The Attorney General of Ontario saw fit to intervene, filed an intervenantes factum, and was represented on the arguments of the appeal.
1. Facts
Prior to trial, the parties agreed in a letter upon certain facts. Unfortunately, the letter of agreed facts is not as clear as it might be, and what is worse, as will be seen, some of the statements contained in it are contradictory.
Ramos was the president and sole shareholder of Ramos Realty, a company engaged in the real estate brokerage business. In 1978, Ramos Realty acted for the vendor, Baycrest Consolidated Holdings Limited (Baycrest) in the sale of certain properties on the south side of Huron Street in the City of London, known as the Dorvan Apartments. The sale price was $5,350,000, and the vendor agreed to pay Ramos Realty a commission of $125,000 for its services in procuring the offer.
The purchaser of the property, a company known as 388144 Ontario Limited (388144), did not have sufficient funds to close the transaction. It, therefore, arranged with Baycrest and Ramos Realty that as part of the purchase price, it would assume the liability for payment of the $125,000 real estate commission due to Ramos Realty. It is the events surrounding the payment of the $125,000 by 388144 which give rise to the charges against the appellants.
388144 was incorporated under the Business Corporations Act, R.S.O. 1970, c. 53 on June 16, 1978. It was incorporated for the purpose of buying the Dorvan Apartments. The authorized capital of the corporation was $40,000 divided into 40,000 shares of no par value. The money to purchase the apartments was provided by a number of investors. A person who invested in the company received shares and a promissory note. The financial statement of the company for the period ending June 30, 1979, showed 815 common shares issued for a cash consideration of $815 and notes payable to shareholders of $814,185.
On July 13, 1978, 388144 issued 25 common shares to Ramos in his personal capacity. By letter dated September 18, 1978, Paul Downs, the solicitor for 388144 in the purchase of the Dorvan Apartments, forwarded the shares to Ramos. In his letter, he said:
I enclose herewith Share Certificates representing the shares you purchased in the above Company [388144], at a cost of $1,000.00 per share.
The letter of agreed facts states that “Paul Downs never received instructions from Ramos that the shares were not to be issued to him personally”.
On November 20, 1978, Ramos Realty wrote to Baycrest to confirm that the amount of outstanding commission on the sale of the Dorvan Apartments was $100,000. On November 23, 1978, Paul Downs executed an undertaking in writing addressed to Baycrest and their solicitors to obtain a full and final release from Ramos Realty with respect to the balance of the real estate commission of $100,000 on the sale of the Dorvan Apartments.
The letter of agreed facts states that these two documents indicate that by November 1978, the real estate commission owed to Ramos Realty “had been reduced by $25,000 which was the 25 shares and the promissory note paid to Ramos by 388144”. As the summary conviction appeal court judge pointed out, this cannot be so, since, as will be seen, the promissory note was not in existence at this time.
On December 6, 1978, 388144 paid $25,000 to Ramos Realty. The fiscal year end of Ramos Realty was December 31, and this amount was included by Ramos Realty in income in its tax return for the year 1978. Since this payment was reported by Ramos Realty as income, it forms no part of the charges against the appellants.
In December 1978, 388144 executed a mortgage for $75,000 on the Dor- van Apartments to Ramos Realty as mortgagee. The mortgage is dated December 11, 1978. It was payable in full on November 23, 1979, and repayment was personally guaranteed by two of the officers of 388144. The mortgage was not shown in the financial statement of Ramos Realty filed with its tax return for the year ending December 31, 1978, nor was it ever reported as income by Ramos Realty.
Although the date is unclear — presumably it was some time in 1979 — the principals of 388144 realized that an error had been made in issuing the 25 shares for $25,000 and that they should only have been issued for $25. It was agreed, therefore, with Ramos that his 25 shares had a value of $25, and the company executed a promissory note dated October 15, 1979, to Ramos for $24,975. The note was payable July 31, 1981, or on the sale of the property (the note does not identify the property but it was clearly the Dorvan Apartments), whichever first occurred. Again, the letter of agreed facts states that "Paul Downs never received instructions from Ramos that the note was not to be issued to Ramos personally”.
A list of the shareholders of 388144 from the working papers of its accountants showed Ramos as the holder of 25 of the 815 issued common shares shown on the company's balance sheet for the period ending June 30, 1979.
The letter of agreed facts is confusing and to some extent contradictory on the date on which the promissory note was issued to Ramos. In para. 7, the letter states that 388144 paid the $125,000 commission as follows:
— $25,000 in shares . . . of 388144 Ontario Limited and a promissory note . . . from 388144 to Urbano Ramos personally in 1978; [our italics].
However, para. 8 states:
Exhibit 2F, a promissory note dated October 15, 1979 was subsequently issued by 388144 Ontario Limited to Urbano Ramos personally and replaced $24,975.00 worth of consideration of the $25,000 worth of shares referred to above. This substitution was necessitated when the company realized it had exceeded its share capital authorization allowed by its Charter. [our italics].
Then, in para. 10, it contains the sentence which we have quoted earlier that the letter of November 20, 1978, and the undertaking of November 23, 1978, indicate that by November 1978, the real estate commission owed to Ramos Realty by 388144 of $125,000 had been reduced by $25,000 which was the 25 shares and the promissory note.
At the trial, the Crown called Mario Ferreira, the president of 388144, as a witness for the prosecution. His evidence is equally confusing as to the date when the note was issued. Crown counsel at the trial seems to have been unaware of the problem.
The letter of agreed facts states that the mortgage of December 11, 1978, was discharged December 12, 1979, and on the same day a new mortgage was placed on the Dorvan Apartments from 388144 to 409668 Ontario Limited (409668). If the discharge and mortgage are examined, they indicate that they were executed and registered not in 1979 but in 1980. The discharge was clearly executed and registered on March 4, 1980. The only thing that links the new mortgage to 1979 is the date on the first page of December 12, 1979. The affidavit of execution by the guarantor is sworn February 14, 1980, and the affidavit as to age and spousal status, which contains a declaration for the purpose of the Planning Act and the Income Tax Act is also sworn on February 14, 1980. The mortgage was registered March 4, 1980, the same day as the discharge. Again, Crown counsel at the trial does not appear to have directed her attention to the matter, and it is not mentioned in the judgments below. Accordingly, we must decide these appeals on the basis of the statements contained in the letter of agreed facts, 1. e., that the mortgage of December 11, 1978, was discharged and replaced by a new mortgage to 409668 on December 12, 1979.
409668 was a corporation of which Ramos was the sole shareholder and director. The new mortgage was payable in full on November 23, 1980. Interest ran from November 23, 1979. Payment was personally guaranteed by one of the officers of 388144. By an assignment of mortgage dated March 3, 1980 and registered March 6, 1980, 409668 assigned the new mortgage to the Bank of Montreal as collateral security for a loan of $35,000 to 409668.
2. Evasion of Tax as Charged in the Second Information
We believe it is more convenient to deal first with the alleged evasion of tax as charged in the second information. There is no doubt that Ramos Realty had earned the $125,000 commission in 1978, and should, therefore, have reported it as income in that year. This is clear from paragraph 12(1)(b) of the Income Tax Act which provides:
12.(1) There shall be included in computing the income of a taxpayer for a taxation year as income from a business or property such of the following amounts as are applicable:
(b) any amount receivable by the taxpayer in respect of property sold or services rendered in the course of a business in the year, notwithstanding that the amount or any part thereof is not due until a subsequent year, unless the method adopted by the taxpayer for computing income from the business and accepted for the purpose of this Part does not require him to include any amount receivable in computing his income for a taxation year unless it has been received in the year, and for the purposes of this paragraph, an amount shall be deemed to have become receivable in respect of services rendered in the course of a business on the day that is the earlier of
(i) the day upon which the account in respect of the services was rendered, and
(ii) the day upon which the account in respect of those services would have been rendered had there been no undue delay in rendering the account in respect of the services;
In acquitting the appellants on the second information, the provincial judge said that the mortgage and the promissory note were given for the $100,000 which it was alleged that Ramos Realty had failed to report and that the mortgage and the note were not due until 1979 and 1981 respec tively. While what the provincial judge stated was undoubtedly true, with respect, it in no way affects the liability of Ramos Realty for tax on the commission. The provincial judge concluded his reasons for acquitting the appellants by stating that “I find that there is no evidence of any appropriation during the 1978 and 1980 years”. With respect, this also was wrong. While “appropriation” is a relevant consideration for the first information, it has no relevance for the second: the issue on the second information was whether the commission was an “amount receivable” falling within paragraph 12(1)(b) of the Income Tax Act.
The provincial judge thus erred in law in his reasons for acquitting the appellants on the second information, and counsel for the appellants did not attempt to support them. Rather, he submitted that there was a legal impediment or condition precedent to the payment of the commission to Ramos Realty, and hence it did not have to be reported as income for the taxation year 1978: see M.N.R. v. John Colford Contracting Co. Ltd., [1960] C.T.C. 178; 60 D.T.C. 1131 (Ex.Ct.), and A.G. Rodgers Real Estate Ltd. v. M.N.R., [1984] C.T.C. 2051; 84 D.T.C. 1034 (T.C.C.).
The legal impediment or condition precedent to payment flowed, counsel contended, from a letter written by William Ash of the legal firm of Ash and Cale, the solicitors for Baycrest, to Paul Downs, the solicitor for 388144, on November 21, 1978. In the letter, Mr. Ash detailed the amounts required to discharge the third and fourth mortgages received by Baycrest from 388144 on closing and set out certain amounts that could be properly deducted from the amounts owing on the mortgages. One of the deductions was $75,000, being the real estate commission owing to Ramos Realty. Mr. Ash in his letter put the matter this way:
I also confirm that it is in order for you to deduct from the balance of $75,000.00 being the balance of real estate commission payable subject to your providing me with a release from the real estate agent before the discharges of the two mortgages will be released.
In the letter of agreed facts, it is acknowledged that Mr. Ash was in error as to the amount of commission owing to Ramos Realty and that the correct amount was $100,000 not $75,000. The release requested by Mr. Ash was executed by Ramos Realty on February 27, 1979, and was sent to Ash and Cale by Mr. Downs on February 28, 1979. The release did not refer to any specific sum; it merely acknowledged that Ramos Realty had received “its commission in full re the sale of the Dorvan Apartments”.
On this point, the learned summary appeal court judge said:
I cannot accept that argument. Firstly, the issue between Baycrest and 388144 was payment in full of the purchase price. Obviously, Baycrest was not willing to provide discharges of the mortgages from 388144 until it was satisfied that the purchase price had been paid in full and this entailed performance by 388144 of its agreement to pay the real estate commission to Ramos Realty. As soon as the sale had been completed, the commission was earned by Ramos Realty. The only issue then was how the commission was to be paid. Because of the circumstances outlined above, 388144 agreed to pay the commission. As between the person responsible to pay the commission (388144) and the person entitled to receive the commission (Ramos Realty), there was no condition precedent or legal impediment to the payment of the commission. The commission had been fully earned at that time. The only issue was, failing 388144’s ability to make immediate payment, what arrangements would be made to secure future payment of the commission? The cases relied upon by Mr. Giffen are distinguishable on their facts and do not assist him. I conclude that the transaction in question falls squarely within s. 12(1)(b) of the Income Tax Act and that the commission of $100,000.00 should have been included in computing the income of Ramos Realty in the 1978 taxation year.
We agree with this reasoning. The request by Mr. Ash was, in our opinion, only a request for a receipt and was not a legal impediment or condition precedent to the payment of the commission by 388144. The $100,000 should, therefore, have been included as income by Ramos Realty for the year 1978. We shall deal subsequently with the personal liability of Ramos on the second information.
3. Evasion of Tax by Ramos on Income of $25,000 for the Taxation Year 1978 as Charged in the First Information
On the failure to report income in the sum of $25,000 for the taxation year 1978, the provincial judge accepted the evidence of the Crown witness Mario Ferreira, the president of 388144, that the share certificates had only a value of $25, not $25,000, in the taxation year 1978. Accordingly, he acquitted Ramos of this charge.
The evidence on the value of the shares in the taxation year 1978 is confusing, and the letter of agreed facts, as we have pointed out, does not assist in clarifying the issue. In our opinion, there was evidence to support the finding of the provincial judge that the shares had a value of only $25 in 1978. This being so, the summary conviction appeal court judge should not have interfered with that finding.
In his reasons, the summary conviction appeal court judge directed his mind to the issue of what the result would have been if he was wrong, and the shares had a value of only $25 in 1978. He was of the opinion that Ramos should still have reported $25,000 in his 1978 tax return since all of the parties concerned, including Ramos, were of the belief that the shares had a value of $25,000. With respect, we do not agree. The belief of Ramos, in our judgment, was immaterial.
Paragraph 15(1)(b) of the Income Tax Act provides:
15.(1) Where in a taxation year
(b) funds or property of a corporation have been appropriated in any manner whatever to, or for the benefit of, a shareholder, ...
the amount or value thereof shall . . . be included in computing the income of the shareholder for the year.
It is thus only the "amount or value” of the property appropriated to or for the benefit of the shareholder that must be included in computing the income of the shareholder for the taxation year. Since there was, as we have noted, evidence to support the finding of the provincial judge that the value of the shares in 1978 was only $25, the summary conviction appeal court judge erred in law in finding that it was incumbent upon Ramos to report $25,000 of income for the 1978 taxation year. We shall deal later with the effect of this error.
4. Evasion of Tax by Ramos on Income of $75,000 for the Taxation Year 1980 as Charged in the First Information
This portion of the appeal was argued on the basis that the discharge of the mortgage of December 11, 1978, and the giving of the new mortgage both occurred on December 12, 1979. There is, as has been pointed out, considerable evidence that the documents were not, in fact, executed until February and March of 1980. However, assuming, as we must, that the doc- uments were given in 1979, was the information in error when it charged tax evasion for the year 1980?
The answer to this question turns on subsection 15(1) of the Income Tax Act which we have quoted above. The Crown called an expert witness, Gilbert J. Claerhout, an employee of Revenue Canada. On the assumption that the mortgage of December 11, 1978, was discharged and the new mortgage to 409668 was registered on December 12, 1979, he was of the opinion that Ramos had appropriated the mortgage in 1979. However, because 409668 had a fiscal year end of February 29, 1980, and because 409668 could up to that date have taken remedial steps to correct the situation, he was of the view that there was also an appropriation in 1980. Up until February 29, 1980, according to Mr. Claerhout, because of the year end of 409668 which straddled 1979 and 1980, Ramos had the option of reporting the $75,000 in either 1979 or 1980.
On the basis of Mr. Claerhout's evidence, the provincial judge held that the appropriation had occurred in 1979, not in 1980, and hence Ramos should be acquitted.
The summary conviction appeal court judge came to the opposite conclusion. He accepted Mr. Claerhout's evidence that Ramos had an option to report the $75,000 as income in 1979 or 1980. He concluded, therefore, that the Crown had proved beyond a reasonable doubt that having failed to declare the income in 1979, Ramos was obligated to report it in 1980 and having failed to do so, he was guilty of failing to report income of $75,000 for the taxation year 1980 as charged in the first information.
With respect, we do not believe that the witness Claerhout should have been permitted to give an opinion as to when the appropriation occurred. It was a question of law for the judge as to what constitutes an appropriation. It was for the judge to determine, in compliance with the legal definition, if and when an appropriation took place. This was not something on which an expert witness could give evidence.
The Income Tax Act does not define the word "appropriate". It is, however, a common English word. The Shorter Oxford English Dictionary gives the following definitions: "1. to make over to any one as his own; . . . 2. To take for one's own, or to oneself . . .”. In our opinion, the mortgage was taken by Ramos as his own in 1980, and the provincial judge erred in law in finding that the appropriation occurred in 1979.
The Crown called as a witness a chartered accountant, Gregory Francis Mosey, the accountant for Ramos, Ramos Realty and 409668 during the years 1979 and 1980. He testified that he received instructions from Ramos for the preparation of the financial statement of 409668 for the fiscal period ending February 29, 1980. On the financial statement of 409668 for that period, there is shown a mortgage receivable from 388144 of $75,000. Mr. Mosey gave evidence that on April 17, 1980, he discussed this mortgage with Ramos. He was informed by Ramos that Ramos had been holding the mortgage personally; he was never told that the mortgage was the property of Ramos Realty. In his adjusting entries for the year end, Mr. Mosey debited accounts receivable $75,000 and credited the amount due to shareholder (Ramos) $75,000. The amount due to shareholder of $75,000 appeared on the balance sheet of the company under the heading “Current Liabilities" and was included in the item "Due to shareholder" of $121,453. The financial statement was not finalized by Mr. Mosey until the end of April 1980. The witness testified that, as a result of the way in which the mortgage had been handled, Ramos could have drawn the amount due to him out of the company tax free.
In light of the evidence of the witness Mosey, we are of the opinion that Ramos did not appropriate the mortgage until 1980. It was only in April 1980, when Ramos informed Mr. Mosey that the mortgage was owned by him personally and the financial statement of 409668 was finalized, that Ramos had irrevocably made the mortgage his own. The appropriation of the mortgage occurred, therefore, in 1980.
The fact that the mortgage was given to 409668 and not directly to Ramos is covered by subsection 56(2) of the Income Tax Act which provides:
56.(2) A payment or transfer of property made pursuant to the direction of, or with the concurrence of, a taxpayer to some other person for the benefit of the taxpayer or as a benefit that the taxpayer desired to have conferred on the other person shall be included in computing the taxpayer's income to the extent that it would be if the payment or transfer had been made to him.
Although we do not agree with his reasons, the summary conviction appeal court judge was right in finding Ramos guilty of failing to report income in the sum of $75,000 for the taxation year 1980. It was agreed by the parties that if we came to this conclusion, the amount of the tax avoided was $22,338.74, not $29,515.70 as charged in the first information.
5. Failure of the Crown to Prove that Ramos Evaded the Payment of Tax for Both 1978 and 1980 as Charged in the First Information
Counsel for the appellants submitted that if we concluded that the Crown had proved that Ramos failed to report income for the taxation year 1980 but not for the taxation year 1978, then, since the charges are conjunctive, Ramos should be acquitted on the first information. The summary conviction appeal court judge rejected this submission on the basis of the decision of this court in R. v. Hoffman-La Roche Ltd. (Nos. 1 & 2) (1981), 62 C.C.C. (2d) 118.
In Hoffman-La Roche the accused had been charged with selling the drugs librium and valium at unreasonably low prices contrary to paragraph 34(1 )(c) of the Combines Investigation Act, R.S.C. 1970, c.C-23, as amended. The trial judge convicted the appellant of selling valium only, and he amended the indictment by deleting the words referring to librium. On appeal, it was argued that the trial judge had erred in amending the indictment. Martin, J.A., at 136, disposed of this argument as follows:
Mr. Sexton for the Crown contended before us and before the trial Judge that the indictment alleged a single illegal policy with respect to both Librium and Valium. His position was that no amendment was necessary to enable a conviction to be made for engaging in that illegal policy with respect to Valium only, but that if an amendment were required, it could be made pursuant to s. 529(2)(a) and (4) without injustice to the appellant.
I am of the view that it would have been open to the trial Judge, without amending the indictment, to convict the appellant of the offence charged under s. 34(1)(c) with respect to Valium only. Where an indictment charges an accused with stealing a number of articles, it is unnecessary to prove that the accused stole all the articles specified; the accused may be convicted of stealing only those articles which he is proved to have stolen. Similarly, where an accused is charged with stealing or obtaining by false pretenses a sum of money, the accused may be convicted of stealing or obtaining by false pretenses a lesser sum established by the evidence without amending the indictment: see Mâchent v. Quinn, [1970] 2 All E.R. 255; Lake v. The Queen, [1969] S.C.R. 49, [1969] 2 C.C.C. 224, 1 D.L.R. (3d) 322.
In my opinion, the same principle is applicable here, and a conviction could have been made on the original indictment of the offence charged under s. 34(1 )(c), restricted to Valium only. Although, as I have indicated, it was not necessary to amend the indictment to enable the Court to convict the appellant on that part of the indictment which related to Valium, I am satisfied that the amendment did not amount to a substantial wrong to the appellant or result in a miscarriage of justice. I would not therefore give effect to this ground of appeal.
This statement of the law was approved by Dickson, J. (as he then was) in R. v. Giguère et al., [1983] 2 S.C.R. 448 at 465-66.
We agree with the summary conviction appeal court judge that failure to prove the entire offence as charged in the first information is of no consequence. The information charged Ramos with wilfully evading the payment of $29,515.70 in taxes. Although the Crown has not proved that this full amount of tax was evaded, it has proved that Ramos evaded payment of $22,338.74 of tax. On the basis of Hoffman-La Roche, Ramos is properly convicted of wilfully evading payment of the lesser amount of tax. We would therefore amend the conviction of Ramos on the first information for evading payment of tax by failing to report income in the sum of $25,000 for the taxation year 1978 and substitute the figure of $22,338.74 as the amount of tax avoided.
6. Whether Subsection 239(1) of the Income Tax Act Conferring on the Attorney General of Canada the Right to Elect to Proceed by Indictment or by Summary Conviction Contravenes Section 15 of the Charter
The appellant challenges the constitutional validity of sections 613(4), 748, 755 and 771 of the Criminal Code on the ground that these provisions violate sections 7, 11(f), 11(h) and 15 of the Canadian Charter of Rights and Freedoms. In fact, his challenge must be taken to be to section 239 of the Income Tax Act, under which he was charged and convicted, because it is a hybrid offence provision.
His submissions that section 15 of the Charter is violated by the Criminal Code sections mentioned are not based, per se, on the procedures therein set out, but rather on those procedures as compared to procedures that would have applied if the election provided for in section 239 for prosecuting upon indictment had been taken. Subsection (1) of section 239 provides:
(1) Every person who has
(d) wilfully, in any manner, evaded or attempted to evade, compliance with this Act or payment of taxes imposed by this Act, ...
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.
However, subsection (2) permits the Attorney General of Canada to choose an alternate proceeding:
(2) Every person who is charged with an offence described by subsection (1) may, at the election of the Attorney General of Canada, be prosecuted upon indictment and, if convicted, is, in addition to any penalty otherwise provided, liable to imprisonment for a term not exceeding 5 years and not less than 2 months.
In the present case the Attorney General did not elect to prosecute upon indictment, thereby proceeding under subsection (1) and the relevant pro- visions in Part XXIV of the Criminal Code. Thus the appeal provisions in sections 613(4), 748, 755 and 771 of the Criminal Code came into operation and it is these provisions to which the appellant objects as compared to the procedures that would have been applicable if the prosecution had proceeded upon indictment. The question to be addressed, therefore, is whether the distinctions between the rights of appeal in summary conviction offences, which applied to the appellant, and those in indictable offences, which did not, violate sections 7, 11(h) and 15 of the Charter.
Section 15 of the Charter provides:
Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination, and in particular without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
Perhaps the best way to discuss the possible meaning of the equality rights in section 15 of the Charter is to start with the first opinion expressed on the issue by this Court in Re McDonald and The Queen (1985), 21 C.C.C.
(3d) 330. At 349 Morden, J.A. put forth the basic proposition that:
... [T]he purpose of s. 15 is to require “that those who are similarly situated be treated similarly”: Tussman and tenBroek, “The Equal Protection of the Laws”, 37 Cal. L. Rev. 341 (1948), at p. 344.
In the subsequent case of R. v. R.L. (1986), 26 C.C.C. (3d) 417, Morden, J.A. added a second observation as to the “essentially relational nature of equality”. His two propositions were stated thus at 424-25:
... The essentially relational nature of equality has been described as follows. “The concept of equality is, by definition, relational or comparative. A person can only be found to be equal in relation to or in comparison with some other person who serves as a standard or criterion.” Monroe H. Freedman, “Equality in the Administration of Criminal Justice”, Nomos IX (1967) 250 at pp. 253-4. The concern for equality is that those who are similarly situated with respect to the purpose of the law be treated similarly: see Tussman and tenBroek ... and Re McDonald and The Queen ... referring to the Tussman and tenBroek article.
The views of Morden, J.A. in Re McDonald were subsequently referred to with approval by Howland, C.J.O. and Robins, J.A. in their dissenting opinion in Reference re an Act to Amend the Education Act (1986), 53 O.R. (2d) 513 at 554-55, and by Dubin, J.A. in Re Blainey and Ontario Hockey Association (1986), 54 O.R. (2d) 513 at 524-25. It was applied by this court in Bregman and Bregman v. Attorney General for Canada (unreported, released 29, November 1986) to hold that someone who was a member of an allied force at a time when he had no connection with Canada, even though he subsequently became a citizen, is not "similarly situated” to someone who was domiciled in Canada when he joined an allied force for the purpose of the war.
Applying this approach, the determination of whether two or more particular classes of persons are in fact similarly situated becomes the analytical point of departure in any section 15 analysis. It would seem that if persons are held not to be similarly situated, then no further analysis is required. However, it is not always clear whether persons are or are not similarly situated, and whether, even if they are not, this is relevant to a section 15 inquiry.
It is necessary to be cautious in this classification. It is usually possible to find differences between classes of persons and, on the basis of these differences, conclude that the persons are not similarly situated. However, what are perceived to be significant "differences” between persons or classes of persons could be the result of stereotypes based on existing inequalities which the equality provisions of the Charter are designed to eliminate, not perpetuate. The effects of past discrimination between classes of persons can result in these classes in fact not being similarly situated. Certain differences, such as the biological ones between the sexes, result in there being no actual comparable class, as with respect to reproductive issues. While some of these situations may well require differential treatment in the interests of equality, it is important that some differences between the classes of persons not operate to prevent a valid section 15 equality analysis by concluding that classes are not similarly situated. Rather, the determination of whether persons are similarly situated must also consider the relevance of the differences and, thus, the question ought to be whether the differences among those being treated differently by the legislation in question are relevant for the purposes of that legislation.
In the present case, the two relevant classes of persons are those persons whose acquittals for indictable offences are being appealed and those persons whose acquittals for summary conviction offences are being appealed. It is not clear, however, that these are the types of classifications contemplated by section 15 of the Charter. In considering whether the Crown's discretion to proceed either by way of summary conviction or by way of indictment violated the equality provision of the Canadian Bill of Rights, Fauteux, C.J.C. in R. v. Smythe, [1971] S.C.R. 680; 3 C.C.C (2d) 366, stated at 685 (C.C.C. 370):
In my opinion, appellant’s views fail to recognize that the provisions of s. 132(2) [present s. 239] do not, by themselves place any particular person or class of persons in a condition of being distinguished from any other member of the community and that, applicable without distinction to everyone, as indeed they are, these provisions simply confer upon the Attorney-General of Canada the power of deciding, according to his own judgment and in all cases, the mode of prosecution for offences described in s. 132(1).
A similar issue was addressed by the Oregon Supreme Court in State v. Clark, 630 P. 2d 810 (1981), in considering whether the distinction between those persons accorded a preliminary hearing because charged by information, and those persons denied such a hearing because indicted, violated the equal protection guarantees of the Fourteenth Amendment. With regard to the term “class”, the court held, at p. 816:
The terms "class” and "classification” are invoked sometimes to mean whatever distinction is created by the challenged law itself and sometimes to refer to a law's disparate treatment of persons or groups by virtue of characteristics which they have apart from the law in question. Familiar examples of the latter kind of "class” are personal characteristics such as sex, ethnic background, legitimacy, past or present residency or military service. On the other hand, every law itself can be said to "classify” what it covers from what it excludes. For instance, the rule of this court that limits the time for filing a petition for review .. . “classifies” persons by offering the "privilege” of review to those who file within 30 days and denying it to those who file later. Similarly, a law that licenses opticians and optometrists to perform different functions. See Williamson v. Lee Optical, 348 U.S. 483 ... (1955), does not grant or deny privileges to classes of persons whose characteristics are those of “opticians” and "optometrists”; rather, the law creates these classes by the licensing scheme itself. Attacks on such laws as “class legislation” therefore tend to be circular and, as the above quotations from early decisions show, have generally been rejected whenever the law leaves it open to anyone to bring himself or herself within the favoured class on equal terms . . .
With respect to the classification suggested by the defendant, that is, those persons who are indicted, and those persons who are charged by information, the court held, at 817-18:
. . . [W]e think this is an example of the “circular” use of the concept of “class” mentioned above. The distinction to be tested is the use or nonuse of preliminary hearings. The “classes” said to fail the test of equal protection are the “class” of those defendants who receive preliminary hearings (because charged by information) and the “class” of those who do not (because indicted). But these defendants do not exist as categories or as classes with distinguishing characteristics before and apart from a prosecutor's decision who to charge — one, or some, or all defendants. Aside from the manner in which the decision is made, see City of Klamath Falls, ... 619 P. 2d 217..., defendants charged under either procedure are “classes” only as an effect of the dual procedural scheme itself . . .
Similarly, the intervenant submits, it is not so much the provisions of the Criminal Code that distinguish any particular person or class of persons from any other member of the community, as that all members of the community are equally subject to the dual procedure. He argues that there are no personal characteristics or attributes of an individual person or class of persons upon which the distinction is drawn. Rather, the distinction is based on the Attorney General’s judgment with regard to the act allegedly committed by the accused. As in Clark, the categories of accused persons do not exist as categories or classes with distinguishing characteristics before and apart from the Attorney General’s decision of how to charge them.
We would not be prepared to accept the proposition that it is necessary, if the persons alleging a section 15 infringement are to succeed, that these persons constitute categories or classes with distinguishing characteristics before and apart from the prosecutor's decision. It is true that there are no personal characteristics or attributes of an individual person or class of persons upon which the distinction in this case is drawn. However, in a section 15 case the question is not whether those alleging a violation of their equality rights have differences which exist independently of the law, but rather, whether the law treats those persons differently. Nonetheless we would be wise to heed the caution of the Court in Clark about avoiding the circular use of the term “class” in an analysis of equality.
However, assuming that persons charged with indictable offences and persons charged with summary conviction offences can be considered classes for the purpose of a section 15 analysis, it must then be determined whether these classes are similarly situated.
In the context of offences which are classified exclusively as indictable offences, such as murder, on the one hand, and those classified exclusively as summary conviction offences, such as fraudulently obtaining food or lodging, on the other hand, it is not difficult to conclude that persons charged with these indictable offences are not in the same class as persons charged with these summary conviction offences. The differences between these classes of persons, namely, the seriousness of the offence committed, can be seen to be relevant to the general purpose of the criminal procedure provisions of the Criminal Code, that is, providing the accused with a fair trial and appeal. Since the indictable offences carry with them harsher penalties, that is, greater threats to the liberty of the accused, the legislation demands that greater safeguards be provided.
However, this distinction becomes somewhat less clear in the context of hybrid offences. The choice of procedure in hybrid offences could also be seen to be based on the degree of seriousness of the offence. This choice is not made on an a priori basis, but rather, is left to the discretion of the Attorney General to determine according to the particular circumstances of the case. However, where a hybrid offence is involved two virtually identical cases may nevertheless be treated differently if the Attorney General elects to proceed by indictment in one, and by summary conviction in the other. While the differential treatment thereby accorded these persons may well be justifiable in some cases, it may be difficult to conclude that two persons who have committed the same offence are not in fact similarly situated for the purpose of a section 15 analysis.
It would appear that the appellant is attempting to compare either the general class of the persons charged with indictable offences with the general class of persons charged with summary conviction offences, or the somewhat narrower class of persons involved in an appeal concerning summary conviction offences with persons involved in an appeal concerning indictable offences. Nevertheless, it is necessary to proceed to the next step of a section 15 analysis, namely, whether differential treatment within the context of hybrid offences constitutes “discrimination” within the meaning of section 15.
There are at least two approaches to the meaning of the term “without discrimination” in section 15, whether it prohibits any distinction or only such distinctions as are invidious, unreasonable or unjustifiable. These two approaches were set out by Morden, J.A. in the McDonald case, supra, at 348-49:
. . . On the one hand, the section can be read as providing that there is no infringement unless there is unequal treatment resulting from discrimination, that is, discrimination in the sense of invidiousness — unjustifiability, unreasonableness or irrelevance. On this approach, putting it in its simplest terms, there would be no infringement unless the person alleging infringement could show an inequality that was unreasonably imposed: see Gold, “A Principled Approach to Equality Rights”, 4 Supreme Court L.R. 131 (1982), at pp. 151-3, where this approach discussed on the basis that “the equality rights ... in the Charter contain within them a non-absolutist conception” without reference in this part of the article to the words “without discrimination”. On the other hand, it has been argued that discrimination should be read in a neutral sense, as meaning merely distinction or classification, with the result that “s. 15 should be interpreted as providing for the universal application of every law. Where a law draws a distinction between individuals, on any ground, that distinction is sufficient to constitute a breach of s. 15, and to move the constitutional issue to s. 1 [to consider whether the law is justified]”: Hogg, Constitutional Law of Canada, 2nd ed. (1985), pp. 799-801.
Chief Justice Howland and Robins, J.A., in their dissenting opinion in the Education Act Reference, supra, at 554-55, although also not needing to choose between the two approaches, clearly recognized that more than just the making of distinctions is necessary before finding that section 15 is infringed;
... There is no infringement of the section unless the unequal treatment is discriminatory. Most laws provide for distinctions and prescribe different results based on those distinctions. Indeed, a State could not function without classifying its citizens for various purposes and treating some differently from others. As Mr. Justice Stewart pointed out in his discussion of the equal protection clause of the U.S. Fourteenth Amendment in San Antonio School District v. Rodriguez (1973), 411 U.S. 1 at p. 60: “There is hardly a law on the books that does not affect some people differently from others.” Similarly, although spoken in a different context, Chief Justice Dickson said at p. 347 S.C.R., p. 362 D.L.R. of Big M Drug Mart Ltd., supra, “... the interests of true equality may well require differentiation in treatment”. . .
We agree. The reasons for rejecting the neutral approach, which would hold any distinction to be in violation of section 15, were persuasively summarized by McLachlin, J.A. for the British Columbia Court of Appeal in Andrews v. Law Society of British Columbia, [1986] 4 W.W.R. 242 at 249-50:
It cannot have been the intention of Parliament to guarantee a general right against unequal treatment. Almost all statutes draw distinctions between individuals. It cannot be supposed that in all such cases the individual’s constitutional rights are infringed. To call every legislative distinction between people an infringement of s. 15 is to trivialize the fundamental rights guaranteed by the Charter.
Second, such an approach deprives the phrase “without discrimination” of content: provided the treatment is unequal, one passes immediately to s. 1 of the Charter. That would run counter to accepted canons of statutory interpretation. Hogg, p. 800 acknowledges this problem, but says, because “discrimination" is ambiguous and can be read in a “neutral sense", it should be taken to remit the entire question of justification to s. 1. I cannot accept that view. “Discrimination” must be taken to have meaning within s. 15 itself.
Third, it cannot have been the intention of Parliament that the government be put to the requirement of establishing under s. 1 that all laws which draw distinction between people are “demonstrably justified in a free and democratic society". If weighing of the justifiability of unequal treatment is neither required nor permitted under s. 15, the result will be that such universally accepted and manifestly desirable legal distinctions as those prohibiting children or drunk persons from driving motor vehicles will be viewed as violations of fundamental rights and be required to run the gauntlet of s. 1.
Although we find her fourth reason for rejecting a neutral interpretation of section 15 less persuasive than the three quoted above, it adds a caution worth contemplating (at 250-1):
Finally, it may further be contended that to define “discrimination” under s. 15 as synonymous with unequal treatment on the basis of personal classification will be to elevate s. 15 to the position of subsuming the other rights and freedoms defined by the Charter ... That, however, may be what will become of s. 15 if it is interpreted as being violated by any distinction or unequal treatment. Section 15, like the 14th Amendment in the United States Constitution will dwarf the other provisions of the Charter and be the central issue in virtually all Charter litigation. Laws which do not violate any other fundamental right or freedom will almost always (if the United States experience is any guide) be alleged to violate s. 15 because the legislature classified or failed to classify. Even though legislation does not violate any other sections, it will always be required to run the gauntlet of ss. 15 and 1. In my view, this cannot have been the intention of the enactors of the Charter. To interpret s. 15 as other than a section guaranteeing equal protection and benefit without discrimination in the sense of unequal treatment that is unfair or unjustified is to quote Dickson J. [now C.J.C.] “to overshoot [its] actual purpose": Big M Drug Mart, supra, at p. 344.
Without a detailed and definitive analysis of what would be a proper test for the pejorative view of the words “without discrimination” in section 15, we are content for the purposes of this case to adopt that of Madam Justice McLachlin in the Andrews case, supra, at 253:
... The ultimate question is whether a fair-minded person, weighing the purposes of legislation against its effects on the individuals adversely affected and giving due weight to the right of the legislature to pass laws for the good of all, would conclude that the legislative means adopted are unreasonable or unfair.
In the more recent case of R. v. LeGallant (1987), 54 C.R. (3d) 46 at 55, Hinkson, J.A., also for the British Columbia Court of Appeal, expressed it in these terms:
... [Discrimination involves the drawing of an unreasonable or unjustifiable distinction. The question to be answered in determining whether or not law is discriminatory is whether the law is reasonable or fair, having regard to its purpose and effect. Involved in this approach there is the consideration that a law may be discriminatory if it treats some persons unduly prejudicially.
On this point it is interesting to note that although the French version of the equality rights provision in the European Convention on Human Rights (art. 14) uses the words "sans distinction aucune” the European Court of Human Rights, in the Belgian Linguistic case (1968), 1 E.H.R.R. 252 at 284, decided that the pejorative implication of the English words "without discrimination” was more appropriate:
... [T]he principle of equality of treatment is violated if the distinction has no objective and reasonable justification. The existence of such a justification must be assessed in relation to the aim and effects of the measure under consideration, regard being had to the principles which normally prevail in democratic societies. A difference of treatment in the exercise of a right laid down in the convention must not only pursue a legitimate aim: Article 14 is likewise violated when it is clearly established that there is no reasonable relationship of proportionality between the means employed and the aim sought to be realised.
To apply the pejorative or adverse test to this case, we have to ask whether the different rights of appeal in a summary conviction offence, as against those in an indictable offence, do pose an inherent disadvantage. The appellant submits that he is disadvantaged because in summary conviction procedures the Crown has a right of appeal from an acquittal on questions of fact, which it does not have on appeals in proceedings by indictment.
In determining this issue it is useful to consider the decision of the Supreme Court of Oregon in City of Klamath Falls v. Winters, 619 P. 2d 217 (1980). The court, at 225, considered whether the differences in appeal rights available to defendants prosecuted in district court as compared with those available to defendants prosecuted in municipal court or the discretion to prosecute defendants in municipal court rather than district court, violated the constitutional guarantees to the equal protection of the law:
To convicted defendants seeking appeal, there are advantages inherent in each of these systems. Persons convicted in municipal court have the advantage of a complete new trial, including the right to a new jury. Thus, they have the opportunity to seek review not only of legal questions, but they may also seek new factual determinations as well. They also have an advantage resulting from possible use of the trial in municipal court for the purpose of “discovery” and prior to trial de novo in the circuit court. Further appeal to the Court of Appeals, however, is limited to questions of the constitutionality of Charter provisions or ordinances.
Persons convicted in district court have the advantage of appellate review before a multi-judge court. That review, however, is limited to errors of law appearing on the record ..., and such persons do not have the advantages resulting from a review by trial de novo in the circuit court. It would be difficult to state categorically which system offers greater advantages to defendants. Whether one or the other system is to the advantage of a particular defendant depends on whether his defence rests only on factual contentions or also on legal contentions.
As in Klamath Falls, in the present case there are advantages inherent in each of the two procedures, and whether one or the other is to the advantage of a particular individual may depend at least partly on whether his or her defence rests on factual contentions or legal ones.
In the present case, the appellant simply asserts that the distinctions between indictable and summary conviction procedures should end once a trial is concluded, and that there is no justification for the distinction in the rights of appeal. He submits, further, that there is no justification to permit an appellate court on an appeal by the Crown in summary conviction cases to review findings of fact. Since the burden of proof is on the appellant to demonstrate that the distinction is unreasonable and thus contrary to section 15 we consider that the appellant has failed to meet this burden.
The intervenant, the Attorney General of Ontario, directly addresses the question of the reasonableness of the distinction in the rights of appeal. He submits in his factum that:
... [T]he provisions of the Code relating to summary conviction procedure are aimed at providing what is generally a simpler, more expeditious mode of criminal procedure for those matters which do not call for the significant punishments available upon conviction by way of indictment. The provision of an intermediary appeal, in such cases, to a local court broad in scope, is a rational method of ensuring that the summary nature of the procedure set out in part XXIV does not give rise to miscarriages of justice, whether they arise out of questions of law or act.
In addressing this question, useful reference can be made to another decision of the Supreme Court of Oregon — State v. Jones, 569 P. 2d 19 (1977). The defendant challenged, inter alia, the constitutionality of the procedure requiring a preliminary hearing or a grand jury indictment when a felony charge was laid, but not when it was a misdemeanour, on the ground that it denied him equal protection of the law. However, the court held, at 24, that there is a rational basis for the difference in treatment because of the distinction between felonies and misdemeanours:
The greater penalties and more onerous consequences of a felony conviction form a rational basis for requiring a probable cause determination via preliminary hearing or grand jury indictment in order to try an accused for a felony. It is not a denial of equal protection to not accord a misdemeanant the same treatment. A misdemeanant charged in circuit court by information is subjected to the same statutory penalty provisions and is accorded the same procedural safeguards associated with arraignment and trial as any other misdemeanant charged in a court of limited jurisdiction. See State v. Belt, 16 O.R. App. 213, 517 P. 2d. 1219, Sup.Ct. review denied (1974). In other words a misdemeanant charged in circuit court is treated no differently than any other misdemeanant with the exception that the forum is different.
The court thus concluded that there was no violation of the equality guarantees of the Fourteenth Amendment.
One of the main purposes of the summary conviction procedure is to provide, as submitted by the intervenant, for a simpler, more expeditious mode of criminal procedure for those less serious offences which carry less significant punishments than for indictable offences. Indictable offences, on the other hand, in carrying greater penalties and more onerous consequences for the liberty of the accused, are thus provided with more complex procedural requirements to safeguard the liberty of the accused. The different purposes provide a rational basis for the difference in the right of appeal. As noted by the intervenant, the provision of an intermediate appeal in summary conviction offences by the Crown on questions of fact, as set out in the case law, provides what appears to be a rational method of ensuring that the summary nature of the procedure does not give rise to miscarriages of justice. The limitation of the Crown's right to appeal in indictable offences to grounds of law alone, on the other hand, appears to be a rational method of protecting the liberty of the accused.
The very purpose of a hybrid offence provision is to allow for a variation in the differing circumstances that are to be found from one case to another. An offence like tax evasion is such that in one case it will be appropriate, due to the greater seriousness of the act committed, to proceed by indictment, whereas in another less serious case, it will be appropriate to proceed by way of summary conviction. The hybrid offence provision in the Income Tax Act is thus a means by which the criminal law provides the Attorney General with sufficient flexibility to take the specific circumstances of each case into account and ensure that, in each case, the interests of justice are served. In fact, lack of such choice could lead to a contravention of section 15 in that persons who are not similarly situated would get the same treatment and, thereby be treated unfairly.
It should be emphasized that we do not come to our conclusion because of any doubts that may have arisen, concerning judicial review of the Attorney General’s discretion, in such older cases as Florence Mining Co. v. Cobalt Lake Mining Co. (1909), 18 O.L.R. 275, affd. 43 O.L.R. 474 and Cripen v. Attorney General for Ontario (1925), 56 O.L.R. 327, affd. 56 O.L.R. 530, or such Canadian Bill of Rights cases as R. v. Court of Sessions of the Peace et al., ex parte Lafleur, [1967] 3 C.C.C. 244, (Que.C.A.), R. v. Smythe, supra, (S.C.C.), Morgentaler v. The Queen, [1975] S.C.R. 616; 20 C.C.C. (2d) 449 and Re Saikaly and The Queen (1979), 48 C.C.C. (2d) 192 (O.C.A.). These are all pre-Charter cases and any doubts as to judicial review of ministerial discretion in such early Charter cases as Stolar v. The Queen (1983), 4 C.R.R. 252 (B.C.C.A.), and R. v. Taylor (1983), 8 C.R.R. 29 (B.C.S.C.) were laid to rest in the Supreme Court of Canada decision in Operation Dismantle v. The Queen, [1985] 1 S.C.R. 441. It is now clear that a decision of the Attorney General, like a decision of Cabinet, is reviewable, not on the ground of whether it was sound, but rather on the ground of whether or not it violates the accused's rights under the Charter. See Re Regina and Arviv (1985), 19 C.C.C. (3d) 395, a decision of this court which preceded Operation Dismantle, and R. v. Kworak, Balian and Ghara Khanian (1986), 20 C.R.R. 325, a decision of Smith, J. of the Ontario High Court which followed the Supreme Court decision. If the Attorney General’s election were otherwise discriminatory, it could be found violative of section 15, but not merely on the ground of exercise of ministerial discretion.
Thus, we conclude that section 239 of the Income Tax Act and the choice made in this case of proceeding by way of summary conviction do not contravene section 15 of the Charter. Because of that conclusion, we do not need to consider the application of section 1 of the Charter.
It follows from these reasons that the Attorney General’s right of election, pursuant to section 239 of the Income Tax Act, does not contravene paragraph 11(f) of the Charter providing for a right to a jury in the circumstances specified in that subsection.
7. Whether the Crown’s Right of Appeal to the Summary Conviction Appeal Court on Questions of Fact in Summary Conviction Cases Contravenes Sections 7 and 11(h) of the Charter
The appellant contended that the Crown's right of appeal to the summary conviction appeal court on questions of fact in summary conviction cases infringed section 7 and paragraph 11(h) of the Charter.
Section 7 of the Charter reads:
Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
Paragraph 11(h) reads:
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; and [Emphasis added.]
This court held in R. v. Morgentaler, Smoling and Scott (1985), 52 O.R. (2d) 353 at 405-10; 22 C.C.C. (3d) 353 at 404-10 that the Crown's right of appeal from an acquittal in proceedings by indictment on a question of law alone had been an established part of the criminal process in Canada for almost a century prior to the advent of the Charter, and did not offend against the double jeopardy principle guaranteed therein by paragraph 11(h), which was the relevant section in determining whether the right of appeal conferred by the Criminal Code on the Crown contravened the Charter. The court in that case accepted the view expressed by distinguished commentators on the Charter that the word “finally” was inserted in paragraph 11(h) to ensure that the provision did not prevent the Court of Appeal from ordering a new trial. The court found it unnecessary to decide whether the aspects of double jeopardy recognized by the defence of res judicata and issue estoppel might be protected by section 7 of the Charter if not encompassed by paragraph 11(h).
The prosecutor's right of appeal in summary conviction matters on questions of fact, as well as on questions of law, has also been an established part of the criminal process in Canada for almost a hundred years.
Under the 1892 Criminal Code (55-56 Vict., c. 29, s. 879, which was derived from An Act to Amend The Summary Convictions Act (1888), 51 Vict., c. 45, s. 7), a aright of appeal from the dismissal of a charge tried on summary conviction was conferred on the prosecutor. The defendant, of course, had a similar right of appeal from conviction. The appeal was by way of a trial de novo. When the appeal was properly lodged and called for hearing, although a fresh plea was not taken, the prosecutor was required to prove his case whether the appeal was by the prosecutor from a dismissal or was an appeal by the defendant from conviction. He might do this by calling the same evidence or by calling additional evidence: see R. v. Dennis (1960), 125 C.C.C. 321 (S.C.C.). The defendant, likewise, was entitled to adduce additional evidence. The appeal in summary conviction matters by way of a trial de novo was continued under the new Code which came into force on April 1, 1955. However, under the new Code, the appellant, for the first time, was required to set forth the grounds of appeal in the notice of appeal (subparagraph 722(1 )(a)(ii). See now section 750 and the Rules thereunder.). Manifestly, from the very nature of the appeal by way of trial de novo, the parties had a right of appeal on questions of fact.
In addition to the right of appeal by way of a trial de novo, the prosecutor and the accused, of course, had, and still have, the more limited right of appeal by way of stated case from the dismissal of a charge on questions of law or questions involving jurisdiction. A further appeal from the decision of the summary conviction appeal court on the decision of the appeal court in appeals by way of stated case lies to the Court of Appeal with leave of that court on a question of law.
As a result of the changes effected by the Criminal Law Amendment Act, S.C. 1974-75-76, c. 93, s. 94, an appeal on the record, as opposed to an appeal by way of trial de novo, is now the normal method of appeal in summary conviction matters. An appeal by way of trial de novo is exceptional and requires an order of the Summary Conviction Appeal Court which may be made only in the circumstances specified in subsection (4) of section 755.
Section 755 of the Code (as amended by S.C. 1983-84, c. 40, s. 20(3)), so far as it is material, reads:
755. (1) Where an appeal is taken under section 748 in respect of any conviction, acquittal, sentence or order, the provisions of sections 610 to 616, with the exception of subsections 610(3) and 613(5), apply mutatis mutandis.
(2) Where an appeal court orders a new trial, it shall be held before a summary conviction court other than the court that tried the defendant in the first instance, unless the appeal court directs that the new trial be held before the summary conviction court that tried the accused in the first instance.
(3) Where an appeal court orders a new trial, it may make such order for the release or detention of the appellant pending such trial as may be made by a justice pursuant to section 457 and the order may be enforced in the same manner as if it had been made by a justice under that section and the provisions of Part XIV apply mutatis mutandis to the order.
(4) Notwithstanding subsections (1) to (3), where an appeal is taken under section 748 and where, because of the condition of the record of the trial in the summary conviction court or for any other reason, the appeal court, upon application of the defendant, the informant, the Attorney General or his agent, is of the opinion that the interests of justice would be better served by hearing and determining the appeal by holding a trial de novo, the appeal court may order that the appeal shall be heard by way of trial de novo in accordance with such rules as may be made under section 438 and for this purpose the provisions of sections 729 to 744 apply with such modifications as the circumstances require.
(5) The appeal court may, for the purpose of hearing and determining an appeal under subsection (4), permit the evidence of any witness taken before the summary conviction court to be read if that evidence has been authenticated in accordance with section 468 and if
(a) the appellant and respondent consent,
(b) the appeal court is satisfied that the attendance of the witness cannot reasonably be obtained, or
(c) by reason of the formal nature of the evidence or otherwise the court is satisfied that the opposite party will not be prejudiced,
and any evidence that is read under the authority of this subsection has the same force and effect as if the witness had given the evidence before the appeal court.
We take the following propositions to be established by the authorities:
1. The Crown is entitled under section 755 to appeal on questions of fact: R. v. Antonelli (1977), 38 C.C.C. (2d) 206 (B.C.C.A.); R. v. Purves and Purves (1979), 50 C.C.C. (2d) 211 (Man. C.A.); R. v. Colbeck (1978), 42 C.C.C. (2d) 117 (Ont. C.A.); R. v. Gillis (1981), 60 C.C.C. (2d) 169 (N.S.C.A.).
2. The summary conviction appeal court is not empowered to retry the case and on a review of the record to substitute its findings on credibility for those of the trial judge; the summary conviction appeal court is entitled to set aside an acquittal on questions of fact only where the verdict is unreasonable or cannot be supported by the evidence: R. v. Colbeck (1978), 42 C.C.C. (2d) 117 (Ont. C.A.); R. v. Medicine Hat Greenhouses Ltd. and German (1981), 59 C.C.C. (2d) 257; R. v. Gillis (1981), 60 C.C.C. (2d) 169 (N.S.C.A.).
It is thus apparent that historically in Canada, the prosecutor, including the Crown, has always from early times had a right of appeal from an acquittal on questions of fact in summary conviction matters, unlike the Crown's right of appeal in respect of an acquittal for an offence tried on indictment, which has always been restricted to grounds of law alone.
In R. v. Jordan (1971), 1 C.C.C. (2d) 385, the Nova Scotia Court of Appeal held that an appeal by the Crown by way of trial de novo from the accused's acquittal did not constitute double jeopardy. This court in R. v. Morgentaler, Smoling and Scott, supra, found it unnecessary to decide for the purpose of that appeal whether an appeal by the Crown by way of a trial de novo might in some circumstances, at any rate, contravene the principle that no person shall be placed twice in jeopardy for the same offence (p. 408), and we, of course, are not called on to decide that issue in this case.
We are, however, satisfied that the Crown's more limited right of appeal under section 755 on questions of fact on the record, as that right has been delineated in the case law, does not contravene either section 7 or paragraph 11(h) of the Charter.
8. Whether the Summary Conviction Appeal Court Judge was Empowered to Enter a Conviction
Counsel for the appellant also contended that the summary conviction appeal court was not empowered to enter a conviction, but was limited to ordering a new trial.
It is convenient, for ease of reference, to again reproduce subsection 755(1) of the Code which reads:
755. (1) Where an appeal is taken under section 748 in respect of any conviction, acquittal, sentence or order, the provisions of sections 610 to 616, with the exception of subsections 610(3) and 613(5), apply mutatis mutandis.
Subsection 613(4) of the Code (as amended by S.C. 1985, c. 19, s. 143(3)) reads:
(4) Where an appeal is from an acquittal the court of appeal may (a) dismiss the appeal; or
(b) allow the appeal, set aside the verdict and
(i) order a new trial, or
(ii) except where the verdict is that of a court composed of a judge and jury, enter a verdict of guilty with respect to the offence of which, in its opinion, the accused should have been found guilty but for the error in law, and pass a sentence that is warranted in law, or remit the matter to the trial court and direct the trial court to impose a sentence that is warranted in law. [Emphasis added.]
In R. v. Antonelli, supra, the British Columbia Court of Appeal pointed out that the incorporation of subsection 613(4) by subsection 755(1) is qualified by the words mutatis mutandis, i.e. “with the necessary changes in points of detail”. Farris, C.J.B.C., delivering the judgment of the court, said at 211-12:
It seems to me that a necessary change which must be made in s-s.(4) when it is applied to summary conviction appeals is the striking out of the words “but for the error in law”. Those words are a necessary part of the section as it applies to appeals in proceedings by way of indictment because of the application of s. 605(1)(a) restricting the Crown to appeals on questions of law alone. However, as has already been pointed out, s. 605(1)(a) does not apply to appeals in summary conviction matters and the words “but for the error in law” are thus irrelevant in that context.
In R. v. Medicine Hat Greenhouses Ltd. and German, supra, at 269, Harradence, J.A. appears to have accepted the reasoning of Farris, C.J.B.C. that the words mutatis mutandis in subsection 755(1) make necessary a change in subparagraph 613(4)(b)(ii) by striking out the words “but for the error in law”. However, Stevenson, J.A. (with whom Lieberman, J.A. concurred) left open the question whether the Summary Conviction Appeal Court's power to enter a conviction, as distinct from ordering a new trial, was confined to cases where there was an error of law. He said at 272:
I assume, that under the provisions of s. 748 of the Code the Crown is not restricted to an appeal on law alone. I prefer, however, to do as did the majority in R. v. Purves and Purves (1979), 50 C.C.C. (2d) 211, [1980] 1 W.W.R. 148, 12 C.R. (3d) 362, and not express an opinion on the power of the Court of Queen's Bench acting under s. 613 on an appeal from acquittal. In R. v. Antonelli (1977), 38 C.C.C. (2d) 206, 5 B.C.L.R. 154, cited by Harradence J.A., the British Columbia Court of Appeal found it a “necessary change in detail” to delete the words “but for the error in law”, in s. 613(4) [am. 1974-75-76, c. 93, s. 75]. Harradence J.A. accepts that deletion. I prefer to leave a decision on that question for a case in which we have had the benefit of full argument. It seems to me at least arguable that on an appeal which does not involve an “error in law” the Court of Queen’s Bench may be restricted to ordering a new trial.
Section 748 gives the Crown a right of appeal on an acquittal. Section 755 [rep. & sub. 1974-75-76, c. 93 s. 94] applies s. 613. Section 613(4) prescribes the powers the appellate Court has. The imposition of a guilty verdict after acquittal at first instance is a power not lightly granted and it appears to me that Parliament might well have chosen to allow the substitution of a finding of guilt only where there was an error in law. I do not want to be taken, by this judgment, as foreclosing that argument.
Although we are inclined to agree with the reasoning of the British Columbia Court of Appeal in R. v. Antonelli, supra, it is unnecessary to express a final opinion on that point in this case. There were, as we have previously mentioned, errors of law made by the trial judge. Credibility was not in issue in this case, and, in our view, the summary conviction appeal court was entitled to enter convictions for the offences.
9. The Ki en apple Principle
The appellant contended that the conviction on the first information precluded a conviction on the second information on the basis of the Kienap- ple principle (Kienapple v. The Queen, [1975] 1 S.C.R. 729; 15 C.C.C. (2d) 524), since the same money was involved in both charges. In our view, the Kienapple principle is inapplicable in this case. The offences charged in the two informations constitute different delicts. The offences not only are not founded on the same acts, but the offence charged in the second information has additional and distinguishing elements from the offence charged in the first: see R. v. Prince (1987), 54 C.R. (3d) 97.
Accordingly, this ground of appeal must be rejected.
10. The Arraignment
Counsel for the appellants contended that the trial on the second information was a nullity since the appellants were not arraigned on the offence charged in the information. The appellants were arraigned as follows:
CLERK OF THE COURT: URBANO L. RAMOS and CENTURY 21 RAMOS REALTY INC. (formerly known as L. Ramos Realty Limited) are charged unlawfully did in the City of London, in the County of Middlesex or elsewhere in the Province of Ontario, between the 31st day of December, 1977 and the 4th day of July, 1979 wilfully evade the payment of $15,000.00 in taxes imposed by the Income Tax Act, R.S.C. 1952, Chapter 148, as amended, upon the said L. Ramos Realty Limited, by failing to report income in the sum of $100,000.00 for the taxation year 1978, and they have thereby committed an offence contrary to Section 239(1)(d) of the said Act.
Q. To that charge, how do you plead — guilty or not guilty URBANO RAMOS?
A. Not Guilty.
Q. And on behalf of the company?
A. Not Guilty.
It will be seen that the Clerk of the Court in reading to the appellants the charge contained in the second information omitted those words describing the appellant Urbano L. Ramos, namely, "R.R. #3 Glencoe, Ontario being an officer, director or agent of the said Century 21 Ramos Realty Inc., (formerly known as L. Ramos Realty Limited)”.
Counsel for the appellants relied upon the judgment of this court in R. v. Arnott and St. James, [1970] 5 C.C.C. 190. In that case the appellant was charged with theft, and there were substantial and numerous differences between the information and the arraignment. The information alleged theft under $50 and the Canadian National Railway was stated to be the owner of the goods alleged to have been stolen. The arraignment alleged theft over $50 and made no reference at all to ownership in the goods alleged to have been stolen. In addition, the arraignment mentioned a different alleged place of commission of the offence than that specified in the information. Although counsel in that case conceded that neither he nor his clients were deceived or misled in any way, the court held that there had been such a grave departure from proper procedure that the appellants' convictions must be set aside and a new trial directed. That case is readily distinguishable from the one at bar. It was unnecessary to describe the appellant Urbano L. Ramos in the information as “an officer, director or agent” of Century 21 Ramos Realty Inc.: see R. v. Paish (1979), 5 C.R. (3d) 281 (B.C.C.A.). The omission on arraignment of the description of the appellant contained in the information was innocuous. Furthermore, section 736 of the Code applicable to summary conviction matters provides, in part: "Where the defendant appears, the substance of the information shall be stated to him ... and he shall be asked whether he pleads guilty or not guilty . ..”. [Emphasis added.] There is no merit in this ground of appeal.
Section 242 of the Income Tax Act reads as follows:
Where a corporation is guilty of an offence under this Act, an officer, director or agent of the corporation who directed, authorized assented to, acquiesced in, or participated in, the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punishment provided for the offence whether or not the corporation has been prosecuted or convicted.
Ramos was the sole shareholder, director and officer of Ramos Realty. We have found that Ramos Realty was guilty of the offence charged in the second information. By virtue of section 242, Ramos is also guilty of the offence.
11. Conclusion
For the reasons previously set out, leave to appeal is granted and the conviction on the first information is amended by substituting the figure of $22,338.74 as the amount of the tax avoided for the figure of $29,515.70 alleged in the information. The sentence imposed on this conviction is set aside and the matter is remitted to the summary conviction appeal court judge to impose a fit sentence on the amended conviction. We should add that counsel for the Attorney General of Canada agreed that if the court amended the conviction as aforesaid, this was the appropriate course to follow with respect to sentence. The appeal is otherwise dismissed.
Order accordingly.