Arbour,
Abella
and
Austin,
JJ.A.
(orally):—
The
central
argument
advanced
on
behalf
of
the
appellants
before
this
Court
is
that
the
trial
iudge
misapprehended
the
evidence
with
respect
to
the
true
nature
of
the
arrangements
between
IBS
(US)
and
CCC,
and
IBS
(US)
and
CRI
respectively,
in
that
he
failed
to
recognize
that
the
contracts
created
legally
enforceable
obligations
between
the
parties.
Mr.
Greenspan
submits
that
there
were
valid,
enforceable
contracts
requiring
payment
for
research
done
by
IBS
(US)
at
the
full
face
value
of
the
invoices
which,
in
turn,
represented
fair
market
value
for
research
conducted
during
the
relevant
period
of
time.
The
extensive
reasons
of
the
trial
judge
disclose
no
such
misapprehension.
He
was
fully
aware
that,
pursuant
to
the
advice
of
their
respective
solicitors,
Mr.
Bird
and
Mr.
Corr
inserted
a
final
payment
date
in
the
contracts
for
the
very
purpose
of
ensuring
that
the
contracts
would
have
all
the
characteristics
of
enforceability
that
would
be
required
to
satisfy
Revenue
Canada.
The
trial
judge
found,
however,
that
at
the
time
the
invoices
were
submitted
by
Mr.
Corr
for
the
purpose
of
drawing
from
the
tax
credit
escrow
funds,
neither
Mr.
Bird
nor
Mr.
Corr
had
any
intention
of
implementing
the
deferred
payments
terms
of
those
contracts.
Having
made
that
finding
and
having
considered,
in
addition,
a
vast
amount
of
documentary
and
testimonial
evidence,
the
trial
judge
was
entitled
to
conclude,
as
he
did,
that
the
invoices
did
not
represent
the
real
intended
cost
to
CCC
or
to
CRI
of
the
work
performed
by
IBS
(US).
Rather,
those
invoices
were
inflated
so
as
to
reflect,
not
the
cost
of
the
work
done,
nor
the
amount
to
be
paid,
but
instead,
they
reflected
more
closely
the
amount
of
scientific
research
funds
available
and
intended
by
Corr
to
be
drawn
down.
In
our
view,
whether
or
not
the
amounts
of
the
invoices
could
be
justified
by
looking
at
the
hours
worked
by
IBS
(US)
employees
or
at
the
value
of
their
labour
in
an
open
market,
is
irrelevant.
The
trial
judge
found,
and
we
agree,
that
what
drove
these
transactions
was
the
availability,
or
expected
availability,
of
Scientific
Research
Tax
Credits.
The
means
used
to
access
the
tax
credit
funds
were
deceitful
and
dishonest
and
knowingly
calculated
to
defraud
Revenue
Canada.
The
appeal
against
conviction
is
dismissed.
There
are
both
an
appeal
and
a
cross-appeal
as
to
sentence.
The
appellant
was
found
guilty
of
several
charges
but,
by
the
application
of
the
Kienapple
rule,
he
was
convicted
only
on
two
counts
of
fraud.
The
total
amount
of
the
fraud
reflected
in
these
counts
represented
tax
evaded,
or
attempted
to
be
evaded,
in
a
total
amount
of
approximately
$2,000,000.
The
trial
judge
imposed
a
term
of
imprisonment
of
two
years
less
a
day
and
fines
totalling
$750,000,
or
two
years
consecutive
in
default
of
payment
of
the
fines.
Funds
are
available
for
the
payment
of
a
fine
of
this
magnitude
as
US
$700,000
are
on
deposit
with
respect
to
Mr.
Corr's
bail.
At
trial,
the
defence
took
the
position
that
there
should
be
a
fine
not
exceeding
$600,000
and
a
term
of
imprisonment
in
the
lower
end
of
the
reformatory
range.
The
Crown
suggested
that
imprisonment
should
be
for
three
to
five
years,
and
that
the
total
assets
on
deposit
(the
equivalent
of
$852,000)
should
be
considered
available
for
a
fine.
We
are
of
the
opinion
that
despite
the
fact
that
the
convictions
were
for
the
criminal
offence
of
fraud,
the
trial
judge
was
correct
in
turning,
for
general
guidance,
to
the
cases
involving
charges
under
the
Income
Tax
Act
for
SRTC
tax
evasion.
We
think
that
the
sentence
imposed
was
entirely
fit
and
although
leave
to
appeal
sentence
is
granted
to
both
parties,
the
sentence
appeal
and
the
crossappeal
are
dismissed.
We
are
prepared,
however,
to
recommend
that
Mr.
Corr
be
considered
as
a
candidate
for
the
Temporary
Absence
Program.
Appeals
dismissed.
Email this Content