R. v. McCall, 85 DTC 5448, [1986] 1 CTC 23 (B.C. Prov. Ct.)

Thomas, Prov. Ct. J. [ORALLY]:—Gentlemen, with respect to all the motions which were before me, I will deal with them not necessarily in the order in which they were argued, but perhaps in the order in which they were presented, with some exceptions

The first motion was a motion for particulars. A letter was filed with the request for particulars and the answer was given. I must hold that the particulars requested were really not proper particulars because it was more evidence rather than particulars and as a result I will dismiss the application for further particulars.

We come to the second point which was the Counts one and two, multiplicity and Counts three, four and five, duplicity. I've taken into account the following cases. The first one is R. v. Mah, Alberta Court of Appeal, 19 C.C.C. (2d) 210. The Queen v. Chalmers, 67 D.T.C. 5135. The third one is German v. The Queen, [1975] C.T.C. 46; [1975] 4 W.W.R. 227. The rule of thumb is whether or not the separate offences charged or whether it is simply different modes in which the offence could be created. I have come to the conclusion that the description is simply of different modes in which one offence can be created and accordingly I hold that Counts three, four and five are not void for duplicity, nor Counts one and two on the basis of the same cases, void for multiplicity. In fact the term used was multifarious. I'm not sure that there is any distinction between multifariousness and multiplicity.

On the face of it it is a single evasion that is alleged and accordingly I must deny these motions also.

With respect to the fourth objection, objection to the jurisdiction, the Defence has made the point that Counts one and two, on the face of it, arose beyond the limitation period and that in order for the Crown to be able to proceed, should it come to trial, it must rely on the Minister’s Certificate, pursuant to section 244 subsection (4) of the Income Tax Act. Defence says they wish to raise questions about the Minister's Certificate and they want to go behind it and ask for my ruling. Should I be in their favour they would ask, then, for an adjournment for a reasonable time so they could bring in evidence for the purpose of showing that the Minister's Certificate has not been issued bona fide.

The following cases were cited to me; The Queen v. Wall and Washuta, decision in the Court of Niagara North, decided in October 1983. The second case is Landry and Valleyview Estates Ltd. et al., (1984) Provincial Court, City of Fredericton. German v. The Queen, 77 D.T.C. 5421. Medicine Hat Greenhouses et al. v. The Queen 79 D.T.C. 5091 and the final case considered james v. The Queen, [1984] C.T.C. 672; 84 D.T.C. 6570.

I am satisfied that although the Minister's Certificate is stated to be conclusive, it is not. Even the cases cited by the Crown, although they purport to say in the clearest terms that the Minister’s Certificate is conclusive evidence, leave it open in case of fraud or impropriety. I think it must necessarily follow that if you leave it open to show impropriety or fraud that it isn't conclusive evidence in that at least the Defence would be able to attempt to go behind the Minister's Certificate by showing either fraud or impropriety. Accordingly should it be necessary I would allow the Defence time to bring evidence on the voir dire.

We now come to more meaty issues. The first one is whether or not evidence by way of documents is admissible. The defendant submits that the seizure was unlawful and that as the result of the unlawful seizure the documents themselves are not admissible, nor the evidence obtained as a result of this seizure.

It is conceded that the section of the Income Tax Act under which the seizure order was obtained was after the obtaining of the seizure order declared to be unconstitutional. The case referred to is M.N.R. et al. v. Kruger et al., [1984] C.T.C. 506; 84 D.T.C. 6478. It is therefore apparent that the seizure was illegal. The following cases were cited and considered by me; R. v. Nelson Provincial Court, Prince Albert, February 7, 1985. Domenico Vespoli, Precision Mechanics Ltd., v. M.N.R., [1984] C.T.C. 519; 84 D.T.C. 6489. Lewis v. M.N.R. 84 D.T.C. 6550. The Vespoli case, I should add, on the photocopy I have, it appears to be from the Dominion Tax Cases and the volume is not cited, although it was decided in the Federal Court of Appeal, August 1984. Finally, Re Collavino Brothers Construction Company Limited case which is cited [1978] C.T.C. 100; 78 D.T.C. 6050. Last but certainly not least, the decision of The Queen v. Therens. The reasons for judgment are available although it has not yet been officially reported.

Defence says that the case of R. V. Therens, [1985] 1 S.C.R. 613; without more, says, ‘if it is illegal it’s per se unreasonable" and the documents should not be admitted nor the evidence obtained from the documents. The Crown argues that on the basis of Le Dain, J.’s reasons for judgment in the Therens case, that nevertheless the defence of good faith is available because strictly speaking Therens dealt with a breach under paragraph 10(b) of the Charter and that is one thing because the liberty of a subject is at stake. Here we are dealing with section 11 [sic, section 8], the search and seizure provisions and that therefore it is still open to me to find that the good faith argument is available and that if I find that everything was done in good faith and appropriately that in spite of the illegality it would not bring the administration of justice in disrepute if I allow the evidence to be admitted.

They have cited a number of cases, perhaps I should go through them so there will be no question but that these cases have been considered in my deliberations. R. v. Noble 16 C.C.C. (3d) 146, M.N.R. v. Kruger, The Queen v. Stickney, Alberta Provincial Court, January 22, 1985. The Queen v. Kresa- noski, Queen's Bench of Alberta, June 11, 1985. M.N.R. v. Kent Tavern Ltd. Provincial Court of New Brunswick, February 11, 1985. The Queen v. Lucier, Ontario Provincial Court, September 14, 1984. The Queen v. Dzagic, Supreme Court of Ontario, May 8, 1985. The Queen v. Burnett et al, Supreme Court of Ontario. R. v. Rao (1984), 12 C.C.C. (3d) 97. R. v. Simmons (1984), 11 C.C.C. (3d) 193. R. v. Hamill, [1984] 6 W.W.R. 530.

The Crown's argument must fail on two grounds, (a) on the wording of Therens, no room left for the argument of good faith, (b) even if I am wrong on that I would think that under the circumstances the Crown could hardly rely on good faith and that the administration of justice would not be offended if I let the evidence in and I will refer to some of the evidence which came out.

I must say, after hearing the evidence over five days, specifically evidence in two voir dires, one of which was by consent, applicable to this particular motion, that there were the various instances which show absolute mala tides on behalf of the Department of National Revenue. The first one is there is a wholesale seizure of any and all documents without any pretence of checking. They seized everything which was loose, which might possibly come in handy. The evidence is clear. The first one is the evidence of Donna Jones. She was in the office when some men came in, not in uniform, without an explanation, without showing I.D., started taking files left, right and centre. Secondly, the evidence of Tom McCall, which was not denied, from his house the taking of files and documents which could have no conceivable connection with any evidence under the Income Tax Act, in fact did not belong to him but belonged to his son. Thirdly, the evidence of Mrs. Goodwin, the office manager, who said that certain files they had taken from the premises where they were not authorized to do so. Fourthly, the evidence of Donald Riley, who stated that he attended and he brought this impropriety to the attention of the members of the Department. Don Riley recalls clearly what he said, he brought it to their attention that on the strength of the Kelly Douglas case, [1981] C.T.C. 457; 82 D.T.C. 6036, that they were going at it the wrong way. They seized without any regard and without making any pretence of checking. It was a wholesale seizure. He also testified he also saw them just taking boxes away. It must be clear that the Department knew they were wrong, in fact Don Riley says so, he said he told them that it was wrong. Their evidence was that they didn't think much of the case, the Kelly Douglas case, they didn't think it was good law.

Accordingly I am driven inescapably to the conclusion that the Department didn't care whatever was said and went on its merry way and if there was any problem they were prepared to call in the assistance of the R.C.M.P. Mr. Riley did the wise thing and rather than getting into a confrontation he obtained an Order. The Order was ready. He phoned Tom McCall and the evidence is while he was on the phone, Tom McCall didn't hang up, but put it down and Mr. McCall says he told the two persons in charge from the Department of National Revenue that an Order had been obtained and that the lawyer would bring the Order. The Department decided not to wait longer than 10 minutes and they left. I find it extraordinary having been told that an officer of the court had obtained a restraining order that they should simply leave instead of waiting to see what would happen. Worse things followed. They were told in the afternoon or rather the Director of Taxation was told by telephone what the Order contained and when the Department, with 69 boxes, arrived in Penticton they were told what the Order was. One of the things that was important in the Order was that the documents were to be retained in Kamloops. The question was raised, even assuming these documents to be here, why were they not returned. A rather feeble explanation was given that it was deemed to be better for the continuity of the documentation that the documents remain in Penticton and secondly they were so advised by the Department of Justice. I have some difficulty in accepting this, that any lawyer in the Department of Justice would advise to ignore the clear Order of the court.

Three months later a consent Order was obtained. Again they fly directly in the face of the consent Order. The procedure followed was exactly the opposite, making it difficult for the taxpayer to conduct his business. Even if they had any justification for what they did or thought that they had any justification, the documents were still kept, at all times, with them. Surely between that date and the present date, that is March 30, 1983 through the present date, they should have been aware what documents they needed, what showed any evidence and returned the rest. No, they didn’t. Magnanimously, as they thought, they allowed the taxpayer to search on four days’ notice, having to travel to Penticton, on four-days' notice and they were allowed to make photocopies. Well that’s not what I would call in any way, shape or form, complying with the order.

Accordingly I hold Therens is applicable, and no good faith is shown. It is clear that to admit the evidence would bring the administration of justice into disrepute.

Accordingly I hold that should the trial start the documents obtained by the seizure are not admissible and the evidence obtained as a result of the search is not admissible.

Finally, strictly speaking we are a bit ahead of time because this should not arise until the trial comes, but I think it is clear that there would be no point in proceeding if the evidence is not admissible because as I gather the Crown has no case unless the documents are admissible.

Finally another crucial point is whether or not I should stay the proceedings, that is the first point and of great importance. The Defence says this; there are two sections of the Charter of Rights under which he proceeds. The first one is paragraph 11(b), that there was an unreasonable delay. I am satisfied that strictly speaking paragraph 11(b), and I am compelled to hold so in view of the case R. v. Carter, refers only to delay after an information has been laid, although there are other cases which hold that preinformation delay can be taken into account for the purpose of seeing whether or not post-information delay was reasonable or not. Here I find there was no post-information delay.

The second reason why they ask me to stay proceedings is that under section 7 of the Charter of Rights that to permit this prosecution to proceed would not be in accordance with fundamental principles of justice. The case referred to is R. v. Young, Ontario Court of Appeal June 27, 1984 referred to in 13 C.C.C. (3d) I.The principle is as follows:

I am satisfied on the basis of the authorities that I have set forth above that there is a residual discretion in a trial court judge to stay proceedings where compelling an accused to stand trial would violate those fundamental principles of justice which underlie the community's sense of fair play and decency and to prevent the abuse of a court’s process through oppressive or vexatious proceedings. It is a power, however, of special application which can only be exercised in the clearest of cases.

I adopt that decision.

It remains to be determined whether or not this is one of those clearest of cases. The difficulty under which the taxpayer finds himself is as follows; I may say both the corporate taxpayer and the personal taxpayer, they were disrupted in their business, the documents were all gone, they were not told what the charges were until the last moment, they could not prepare themselves by discussing it with their witnesses or potential witnesses, they were not able to look at any evidence or make any preparation for it. The documents were seized. They had difficulties with the public. For instance if there was a question as to warranty they would be unable to determine whether or not the warranty was valid and they had to go and obtain documents from the Department of National Revenue on four-days' notice, I might add, and sent somebody down.

The second point I bring out, the Department knew their procedure was improper or should have known that the procedure was improper and I go further and say they knew the procedure was improper, persisted in proceeding with their vacuum-cleaner approach. They acted like a vacuum cleaner, they simply went on. They ignored two court Orders. They had ulterior motives, for instance, the Department knew it owed Tom McCall Pontiac Buick Limited the sum of $35,000. They conceded and admitted that that was owing sometime in 1983. Several requests were made for the return of that money. These requests were met with no results whatsoever. The Department, in my view, must have known that this was a difficult time for any businessman, they must have known the state of the accounts of the corporate accused because they had his books and they had made audits. Finally the accountant was instructed to try to get it. They then suggested that there was a reassessment and that instead of the $35,000 they owed, they owed a lesser amount. The accountant made a very obvious sensible move and said, “all right, if that is so, deduct what you think you are further entitled to and let us have the balance” which was roughly $21,000. They ignored that. When questioned they raised the suggestion that that money might be owing by the personal defendant, which is an unheard of thing. It is wrong, the Department knows it is wrong and I think clearly didn't care one way or the other what the financial problems were, whether or not the business might go under. They had money whether or not it was due and owing, they didn't care. They were holding it and they had a total indifference as to the rights of the corporate taxpayer.

I am hard pressed to find anything they did right. Probably the only thing they did do right was that they were careful in documenting their charges, certain steps they took were right. Other than that I think they totally disregarded anything which was reasonable or fair play.

To illustrate from their procedure, when they seized documents at the house of the personal accused, they left the house in a mess. Boxes were strewn all over, it was as if a tornado had gone through the basement. Three of the four people who were there testified that when they first came down there, that’s the way they found it and it wasn't as a result of the search. I regret to say that I don't believe them. I regret to say I clearly believe that house was left in a mess as a result of the search.

The second point, when they attended at the offices of the accountant they were given co-operation. The office manager, Mrs. Goodwin, offered to assist and to get the files. She was instructed not move anywhere without the presence of somebody from the Department of National Revenue. I find it incredible that people who are willing to assist, to get files, are being treated as if they might somehow abscond with the evidence or not give the proper files. I think she was, in fact, treated as though she couldn't be trusted. I think that says something about the way the Department of National Revenue acted in this particular matter. I think they trampled upon any rights the accused might have. They disregarded any Court Order, in fact they acted the opposite. They withheld moneys, without any regards to the consequences and accordingly I think it is one of the very clear cases where it is proper for me to exercise my jurisdiction to stay the proceedings.

I am sorry, gentlemen, I should have said what cases I considered. I might add that most of the cases were cited to me before the long weekend. I went through them on the long weekend and all the cases which were referred to me I considered. Should you wish I can give you a list later. I think, at this point, it is unnecessary.

Accordingly I will stay the proceedings.

Order accordingly.