The Queen v. Subacious, 78 DTC 6441, [1978] CTC 610 (Ont CA)

Martin, JA:—The Attorney General of Canada applies for leave to appeal and, if leave be granted, appeals from the decision of Mr Justice Labrosse, dismissing an appeal by the Attorney General of Canada by way of stated case from an order of Provincial Court Judge Vanek dismissing four charges against the respondent, under the Income Tax Act, SC 1970-71-72, c 63, for failure to file a return after a demand was made upon him.

The respondent was charged in an information containing eight counts, each of which charged him with an offence of failing to file a return, following a demand made upon him on August 27, 1976, pursuant to subsection 150(2) of the Income Tax Act, contrary to Subsection 238(1) of the Act. Count one charged the respondent with the offence of failing on November 4, 1976 to make a return for the taxation year 1972. Count two charged the respondent with failing on November 5, 1976 to make a return for the taxation year 1972. Counts three and four charged offences of failing on the same dates (that is, November 4 & 5, 1976) to file a return for the taxation year. 1973. Counts five and six charged offences of failing on the same dates to file a return in relation to the taxation year 1974. Counts seven and eight charged offences of failing on the same dates to file a return in relation to the taxation year 1975. Thus, the respondent was charged with having committed on successive days two separate offences of failing to file a return in relation to each taxation year.

The respondent pleaded guilty to counts one, three, five and seven, that is, to the counts which alleged the commission of an offence for failing to file a return on November 4, 1976, following a demand made upon him, in relation to each of the taxation years 1972-5 inclusive. The trial judge then dismissed counts two, four, six and eight, that is, the counts charging the commission of an offence on November 5, 1976, by failing to file a return for each of the taxation years in question. The learned trial judge was of the opinion that the failure to file a return, following a demand, was a single offence, and that each day of default did not constitute a separate offence. He also held that the failure to file a return in relation to a taxation year following a demand made constituted a single matter, and that the decision of the Supreme Court of Canada in Kienapple v The Queen (1974), 15 CCC (2d) 524, precluded more than one conviction for the same matter.

With deference, we are unable to agree with the reasoning of the trial judge. We are all of the view that the failure on each successive day to file the return, after demand, constituted a separate offence under subsection 238(1) of the Income Tax Act. Subsection 238(1) of the Act reads:

(1) Every person who has failed to file a return as and when required by or under this Act or a regulation is guilty of an offence and, in addition to any penalty otherwise provided, liable on summary conviction to a fine of not less than $25 for each day of default.

In Regina v Smith, [1958] OWN 277, McRuer, CJHC held that the failure on each successive day to file a return constituted a separate offence under tne provisions of subsection 131(1) of the Income Tax Act, RSC 1952, c 148, the predecessor of subsection 238(1). In that case, the accused had been charged for failure to make a return on July 17, and further charged for failure to make a return on July 18. In respect of the second charge, the Magistrate held that he could not convict because the charge was for the same offence as the previous charge. The present subsection 238(1) of the Income Tax Act is in the Same words as subsection 131(1) which was considered by McRuer, CJHC in Regina v Smith, supra.

McRuer, CJHC said at 278:

On the main question authorities are quite clear. The offence created by section 131 is a continuing offence for which the offender is liable to prosecution from day to day until he files a return. To hold otherwise would put a construction on the section that would defeat its purpose. Its purpose is to compel persons coming within its scope to file income tax returns. That purpose could not be accomplished if, after conviction, the offender should be immune from prosecution although continuing to fail to file the income tax return required by the section.

He said at 280:

I have therefore come to the conclusion that the information charging an offence on July 18, 1957 did not charge the same offence for which the accused was convicted, ie a charge that the accused did on July 17 fail to file a return under the Income Tax Act.

Kienapple v The Queen, supra, precludes more than one conviction for the same matter or delict. We think it is quite clear that under the Income Tax Act, each day of default constitutes a separate matter or delict and hence the principle in Kienapple v The Queen, supra, does not apply. Dean Friedland, in his well known work Double Jeopardy (Oxford: Clarendon Press, 1969), says at 217:

As pointed out above, the rule preventing multiple convictions must give way to a Clear legislative intent; and there are numerous statutes which provide specifically for cumulative penalties, such as a certain penalty for each day that the offence continues.

Accordingly, leave to appeal is granted, the appeal is allowed, the acquittal is set aside, and the matter is remitted to the summary conviction court with our opinion.