Quigley,
J.:—This
is
an
appeal
by
the
Crown
from
the
acquittal
of
the
respondent
on
two
counts
alleging
offences
committed
by
him
contrary
to
section
242
of
the
Income
Tax
Act
(Canada),
R.S.C.
1952,
as
amended.
The
wording
of
the
counts
is
as
follows:
Count
No.
1
On
or
about
the
16th
day
of
August,
1985,
at
the
City
of
Calgary,
in
the
Province
of
Alberta,
did
participate
in
and
was
a
party
to
the
commission
of
an
offence
wherein
STAY
SALES
LTD.
failed
to
remit
the
sum
of
$6,944.05
to
the
Receiver
General,
which
sum
was
deducted
and
withheld
from
salaries,
wages
or
other
remunerations
paid
to
employees
of
STAY
SALES
LTD.
during
the
month
of
July,
1985,
and
did
thereby
commit
an
offence
contrary
to
Section
242
of
the
Income
Tax
Act
(Canada),
R.S.C.
1952,
as
amended;
Count
No.
2
On
or
about
the
16th
day
of
September,
1985,
at
the
City
of
Calgary,
in
the
Province
of
Alberta,
did
participate
in
and
was
a
party
to
the
commission
of
an
offence
wherein
STAY
SALES
LTD.
failed
to
remit
the
sum
of
$5,431.62
to
the
Receiver
General,
which
sum
was
deducted
and
withheld
from
salaries,
wages
or
other
remunerations
paid
to
employees
of
STAY
SALES
LTD.
during
the
month
of
August,
1985,
and
did
thereby
commit
an
offence
contrary
to
Section
242
of
the
Income
Tax
Act
(Canada),
R.S.C.
1952,
as
amended.
Counsel
for
the
appellant
submits
that
section
242
imposed
a
positive
duty
on
the
respondent
which
was
in
the
public
interest
and
created
an
offence
either
of
absolute
or
strict
liability,
but
not
an
offence
requiring
the
Crown
to
prove
mens
rea.
As
the
trial
judge
opted
for
the
latter
approach,
the
appellant
contends
that
there
was
an
error
of
law
and
the
acquittal
should
be
vacated
and
either
a
conviction
entered
or
a
new
trial
ordered,
depending
on
whether
the
Court
characterizes
the
offences
as
being
absolute
or
strict
liability
offences.
An
extensive
and
in-depth
view
of
the
issue
before
me
was
undertaken
by
the
Supreme
Court
of
Canada
R
v.
Sault
Ste
Marie,
[1978]
2
S.C.R.
1299;
85
D.L.R.
(3d)
161.
The
judgment
of
the
court
was
delivered
by
Dickson,
J.
(as
he
then
was)
and
at
pages
1325-26
(D.L.R.
181-82)
he
stated:
I
conclude,
for
the
reasons
which
I
have
sought
to
express,
that
there
are
compelling
grounds
for
the
recognition
of
three
categories
of
offences
rather
than
the
traditional
two:
1.
Offences
in
which
mens
rea,
consisting
of
some
positive
state
of
mind
such
as
intent,
knowledge,
or
recklessness,
must
be
proved
by
the
prosecution
either
as
an
inference
from
the
nature
of
the
act
committed,
or
by
additional
evidence.
2.
Offences
in
which
there
is
no
necessity
for
the
prosecution
to
prove
the
existence
of
mens
rea;
the
doing
of
the
prohibited
act
prima
facie
imports
the
offence,
leaving
it
open
to
the
accused
to
avoid
liability
by
proving
that
he
took
all
reasonable
care.
This
involves
consideration
of
what
a
reasonable
man
would
have
done
in
the
circumstances.
The
defence
will
be
available
if
the
accused
reasonably
believed
in
a
mistaken
set
of
facts
which,
if
true,
would
render
the
act
or
omission
innocent,
or
if
he
took
all
reasonable
steps
to
avoid
the
particular
event.
These
offences
may
properly
be
called
offences
of
strict
liability.
Mr.
Justice
Estey
so
referred
to
them
in
Hickey's
case.
3.
Offences
of
absolute
liability
where
it
is
not
open
to
the
accused
to
exculpate
himself
by
showing
that
he
was
free
of
fault.
Section
242
of
the
Act
provides:
242.
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
guilt
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.
The
substantive
offences
which
the
respondent
is
alleged
to
have
been
guilty
of
by
virtue
of
section
242
were
committed
by
the
corporation
of
which
he
is
a
director,
when
it
failed
to
comply
with
paragraph
153(1)(a)
of
the
Act.
That
provision
provides
as
follows:
153.
(1)
Every
person
paying
at
any
time
in
a
taxation
year
(a)
Salary
or
wages
or
other
remunertion,
shall
deduct
or
withhold
therefrom
such
amount
as
may
be
determined
in
accordance
with
prescribed
rules
and
shall,
at
such
time
as
may
be
prescribed,
remit
that
amount
to
the
Receiver
General
on
account
of
the
payee's
tax
for
the
year
under
this
Part.
Subsection
238(2)
of
the
Act
provides
as
follows:
(2)
Every
person
who
has
filed
to
comply
with
or
contravened
subsection
.
.
.
153(1)
.
.
.
is
guilty
of
an
offence
and,
in
addition
to
any
penalty
otherwise
provided,
is
liable
on
summary
conviction
to
(a)
a
fine
of
not
less
than
$200
and
not
exceeding
$10,000,
or
(b)
both
the
fines
in
paragraph
(a)
and
imprisonment
for
a
term
not
exceeding
6
months.
In
my
view
section
242
is
not
a
charging
section.
The
offence
was
a
failure
to
comply
with
subsection
153(1)
and
the
offence
is
created
by
subsection
238(2)
of
the
Act.
Section
242
sets
out
the
various
ways
by
which
an
officer,
director
or
agent
of
a
corporation
may
become
a
party
to
an
offence
committed
by
a
corporation.
The
section
requires
that
such
person
direct,
authorize,
assent
to,
acquiesce
in
or
participate
in
the
commission
of
the
offence
before
guilt
may
attach
to
him.
These
requirements
prevent
the
fixing
of
automatic
penal
liability
upon
officers,
directors
or
agents
of
a
guilty
corporation.
The
substantive
offences
committed
by
the
corporation
are
in
my
view
properly
characterized
as
strict
liability
offences.
I
adopt
the
reasoning
in
R.
v.
Rohan's
Rockpile
Ltd.
(1981),
26
B.C.L.R.
125;
57
C.C.C.
(2d)
388.
It
follows
therefore
that
if
the
respondent
is
guilty
of
the
same
offences
their
characterization
does
not
change.
A
party
to
an
offence
faces
the
same
offence
as
that
committed
by
the
principal.
The
real
question
before
me
is
whether
or
not
the
Crown
discharged
the
onus
of
proving
that
the
respondent
was
a
party
within
the
meaning
of
section
242
of
the
Act.
The
unique
aspect
of
a
corporate
entity
is
that
it
can
only
carry
out
its
functions
and
discharge
its
duties
through
the
actions
of
its
officers,
directors
and
agents.
To
a
certain
extent
those
occupying
these
positions
enjoy
exemptions
from
civil
liability.
Indeed,
by
section
227.1
of
the
Income
Tax
Act
itself
provision
is
made
to
save
directors
from
the
higher
civil
liability
attaching
to
the
corporation
for
moneys
owed
for
failure
to
comply
with
section
153
of
the
Act.
That
they
should
also
receive
more
protection
than
the
corporation
in
the
prosecution
of
certain
offences
is
therefore
not
surprising
nor
illogical.
In
the
present
case
the
actus
reus
of
the
substantive
offence
was
the
failure
by
the
corporation
to
remit
sums
it
had
deducted
and
withheld
from
salaries
and
wages
of
its
employees
to
the
Receiver
General.
The
Crown
was
not
required
to
prove
mens
rea
in
order
to
saddle
the
corporation
with
guilt
under
subsection
238(2)
of
the
Act.
Where
it
sought
to
affix
guilt
to
the
respondent
by
virtue
of
section
242,
it
was
necessary
to
prove
not
only
the
guilt
of
the
corporation
but
in
addition
that
the
respondent
"directed,
authorized,
assented
to,
acquiesced
in,
or
participated
in,”
the
commission
of
the
offence.
The
Crown
chose
to
particularize
the
charge
by
alleging
that
the
respondent
“participated”
in
the
failure
to
remit
the
funds
to
the
Receiver
General.
In
R.
v.
Posner,
[1966]
1
O.R.
388;
46
C.R.
321,
Lieff,
J.
held
that
mens
rea
was
an
ingredient
of
the
offence
which
a
director
commits
under
a
section
of
the
Excise
Tax
Act,
similar
to
section
242
of
the
Income
Tax
Act.
The
controlling
words
were
“direct,
authorize,
participate
or
condone".
At
393
(C.R.
326)
of
his
judgment,
Lieff,
J.
said:
I
would
think
that
the
state
of
mind
of
Samuel
Posner
at
the
time
of
the
conduct
giving
rise
to
the
charge
is
vital.
Do
not
the
very
words
“direct,
authorize,
participate
or
condone"
imply
the
existence
of
a
state
of
mind
which
can
be
described
as
intending
to
do
some
act
which
the
accused
Posner
knew
to
be
illegal,
namely,
as
president
of
the
company
participated
in
its
failure
to
pay.
I
therefore
must
say
that
mens
rea
is
a
necessary
ingredient
of
the
offence
.
.
.
In
R.
v.
Tri-City
Truck
Sales
Ltd.
(1966),
59
W.W.R.
736;
63
D.L.R.
(2d)
507,
Gould,
J.
said
at
page
741
(D.L.R.
511-12):
I
agree
with
and
follow
Lieff,
J.,
of
the
Supreme
Court
of
Ontario
in
R.
v.
Posner.
.
.
wherein
he
holds
that
mens
rea
is
an
essential
ingredient
in
the
mind
of
a
director
of
a
company
before
he
can
be
convicted
of
participating
in
the
company's
offence.
In
Rohan's
Rockpile,
Ltd.,
supra,
the
British
Columbia
Court
of
Appeal
held
that
the
offence
of
failing
to
remit
moneys
contrary
to
subsections
153(1)
and
238(2)
is
one
of
strict
liability.
The
appeal
was
taken
by
the
corporate
defendant
but
in
setting
aside
its
conviction
and
ordering
a
new
trial
the
court
made
the
following
gratuitous
observation
at
392:
There
is
a
matter
which
should
be
mentioned.
During
argument
we
were
informed
that
at
the
trial
and
on
appeal
in
the
County
Court
separate
consideration
was
not
given
to
the
requirements
of
conviction
of
the
appellant
Lowther
under
s.
242.
Accordingly,
counsel
for
the
appellants
was
of
the
view
that
he
could
not
raise
the
matter
before
us.
However,
it
ought
to
be
considered
at
the
new
trial
which
I
would
order.
Without
commenting
on
the
correctness
of
the
decision,
I
refer
counsel
to
the
judgment
of
Gould
J.,
R.
v.
Tri-City
Truck
Sales
Ltd.
et
al.
(1966),
63
D.L.R.
(2d)
507,
57
W.W.R.
736.
It
was
an
appeal
by
way
of
stated
case
from
the
conviction
of
the
individual
appellant
of
failing
to
remit
sales
tax
collected
under
the
Social
Services
Tax
Act,
R.S.B.C.
1960,
c.
361.
Section
32
of
that
statute
is
quite
comparable
to
s.
242.
The
learned
Judge
held
that
mens
rea
was
an
essential
ingredient
in
an
offence
charged
against
a
person
in
his
capacity
as
a
director
of
a
company.
In
R.
v.
Rogo
Forming
Ltd.
(1980),
56
C.C.C.
(2d)
31,
Provincial
Court
Judge
Vanek
followed
Posner,
supra,
and
held
at
42:
.
.
.
l
hold
that
the
offence
charged
against
them
under
s.
242
of
the
Act
as
parties
to
the
offence
committed
by
the
company
is
an
offence
requirement
proof
of
mens
rea
as
expressed
in
the
governing
words
"who
directed,
authorized,
assented
to,
acquiesced
in,
or
participated
in”
the
commission
of
the
offence;
or
alternatively
that
those
words
form
part
of
the
actus
reus
of
the
offence;
and
at
all
events
the
onus
of
proof
is
upon
the
Crown
to
prove
all
the
ingredients
of
the
offence
beyond
reasonable
doubt
including
the
elements
of
active
or
passive
participation
in
the
substantive
offence
within
the
meaning
of
those
key
words.
In
my
opinion,
the
words
“directed,
authorized,
assented
to,
acquiesced
in,
or
participated
in"
are
essential
factual
conditions
requiring
the
Crown
to
prove
at
least
one
of
them
before
a
person
specified
in
section
242
can
be
held
to
be
a
party
to
and
guilty
of
an
offence
committed
by
a
corporation
contrary
to
subsections
153(1)
and
238(2)
of
the
Act.
In
the
present
case
there
was
not
sufficient
evidence
adduced
before
the
learned
trial
judge
to
permit
an
inference
to
be
drawn
necessary
to
establish
the
participation
of
the
respondent
in
the
commission
of
the
offences
committed
by
the
corporation.
I
therefore
dismiss
the
appeal.
Appeal
dismissed.
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