Hubert Pierlot v. Her Majesty the Queen, [1993] 1 CTC 69

Macdonald, C.J.:—The appellant appeals his conviction and sentence on two charges under the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72,

c. 63) (the "Act"). The first charge is that the accused failed to comply with the requirements of a notice served on him pursuant to paragraph 231.2(1)(b) of the Income Tax Act to provide information or additional information, including a return of income or supplementary return within the time specified contrary to subsection 238(1) of the Income Tax Act. The second charge is that the accused failed to comply with the requirements of a notice served on him pursuant to paragraph 231.2(1)(a) of the Income Tax Act to provide documents within the time stipulated in the notice contrary to subsection 238(1) of the Income Tax Act.

The trial judge set forth the facts as follows:

Briefly William Vincent Grant testified as follows: He has been working doing audits for Revenue Canada for 15 years. In 1990 he was requested by the office situated in Newfoundland to conduct an audit to verify a large increase in the accused's loan account. After some confrontations as to how or where the audit should be conducted, it was agreed that copies would be made of the records at the accused's home. After three days and before all the photocopying was done, the accused ordered the employees of Revenue Canada to leave with their equipment.

Revenue Canada received from Mr. Pierlot a letter indicating that the funds were from inheritances from deceased relatives from outside the country. He did not indicate whether or not those were all the sources, did not provide names and address of any estates, family members, non-residents, or lending institutions which provided the funds as a loan or a gift or inheritance. Further, the Department received information pertaining to assets but there were no statements of assets and liabilities for each of the years ending December 31, 1986, 1987 and 1989. More specifically, Revenue Canada did not receive any documents relating to loans made to Pierlot Family Farms for the years 1987 and 1989 including the following amounts:

Month ending
June 30, 1987	$ 9,909.41
Sep. 30, 1987	73,560.51
Dec. 31, 1987	36,580.23
Apr. 30, 1988	54,997.72
Aug. 31, 1988	10,892.76
Oct. 31, 1988	44,109.32

He testified further that two letters, C-2 and C-3 sent by the accused do not answer any of the questions of the requirements mentioned in C-1.

In cross-examination the accused introduced an affidavit sworn by William Grant indicating that none of the information required under paragraph 231.2(1)(a) nor any documentation and records required under paragraph 231.2(1)(b) have been found after a careful examination and search of the appropriate records.

The accused testified that he refused to provide information on the loans to the company because the money came from inheritances from dead relatives and are not taxable income. He confirmed that his position was that the Department cannot have access to private records that a taxpayer is not required to keep unless it was proven to him that he had to provide such records.

Turning first to the appeal by the accused of his conviction, the first ground of appeal is that he did comply with the requirements of the Income Tax Act as far as he can legally be required. I cannot agree with this submission of the appellant. It can be said that all the appellant provided to Revenue Canada was that he received the moneys from his relatives through an estate outside Canada. He did not supply any information whereby the information he gave could be verified.

Secondly, the appellant states that Revenue Canada made an illegal request to provide foreign based information under section 231.2 of the Income Tax Act and that reference to section 231.6 of the Income Tax Act justifies his refusal and his right to privacy. The appellant's main defence rests on his interpretation of subsection 231.6(1) and therefore it must be considered. Subsection 231.6(1) reads:

"Foreign-based information or document" defined (1) For the purposes of this section, “foreign-based information or document” means any information or document which is available or located outside Canada and which may be relevant to the administration or enforcement of this Act.

The appellant states that improper demands were made upon him. He states that he does not have to disclose the source of the funds as such is private information about his personal affairs. The information that is sought, he states, is "foreign-based information, transactions with a foreign country, transfers from estates which does not come under Canadian jurisdiction and are not subject to Canadian income tax assessments".

Section 231.6 defines the meaning of "foreign-based information or documents". The respondent states it is not looking for foreign-based information and, therefore, there is no need to comply with section 231.6. The respondent states it is only looking for information within the knowledge and possession of the appellant. I agree with the respondent's argument. The respondent is not asking the appellant to provide anything that he is not now in possession of. If the appellant has, in fact, received money from an estate he should provide the respondent with the details of the source of the money. The appellant admits that he does have certain documentation which would show the source of the money and such should be given to the respondent.

A further ground of appeal is that the trial was not conducted in a "proper legal manner" and the Crown allowed the respondent to digress from the charge and bring in irrelevant evidence. The appellant represented himself both at trial and on this appeal. Any irrelevant evidence that was brought in was through the appellant. Undoubtedly, the trial judge had a difficult time in keeping the appellant on the correct road as is evident from his comment at page one of his decision in relation to the appellant:

Documents and letters were filed with the court before plea, after plea but before trial, and after trial when those could only be tendered during the trial.

I can sympathize with the trial judge as I have also been in receipt of similar items, since hearing the appeal, which should have gone in at trial. The manner in which the trial judge conducted the trial was quite proper.

The appellant states the judgment given by the trial judge contains personal discriminatory comments criticizing the appellant for representing himself. This case involved an interpretation of the Income Tax Act. The latter Act is not known for its simplicity. The trial judge stated, “This case illustrates the difficulties raised when an accused who has no legal training chooses to defend himself in a complex case". Such an observation is entirely proper. I do not see such a comment as a “discriminatory” comment about the appellant. The judge was merely pointing out the difficulty a non-legally trained person has in presenting a complex case.

The comments of the trial judge were, in fact, quite mild compared to those of the respondent, who, in his sixth ground of appeal stated that, "the Court, and the Revenue Canada officials who testified displayed a serious lack of knowledge of the Income Tax Act, particularly section 231.6 in toto, rendering them factually incompetent to deal with the case; that Crown counsel showed unacceptable ignorance of accounting practice "I find that the latter ground of appeal is frivolous.

Considering all of the appellant's grounds of appeal, I do not find that he has established any basis upon which the appeal can be allowed, and, I, therefore, dismiss the appeal.

The appellant has also appealed against the fine of $1,000 imposed by the trial judge on each of the two charges on which he was convicted. Subsection 238(1) of the Income Tax Act provides that a person may be subject to a fine of "not less than $1,000 and not more than $25,000” or to a fine and a term of imprisonment not exceeding 12 months. It can be seen that the trial judge imposed the minimum sentence. The appellant's appeal against sentence is dismissed.

Appeal dismissed.