Reinhardt
Prov.
J.:
Introduction:
In
this
proceeding,
there
are
four
separate
informations,
alleging
that
the
corporate
and
individual
defendant
each
committed
two
offences:
Counts
1
&
2
Against
the
Canvarnet
Computer
Corporation
It
is
alleged
by
the
Crown
that
the
Canvarnet
Computer
Corporation
unlawfully:
1)
On
or
about
the
16th
of
September,
1996,
at
the
City
of
Scarborough
and
elsewhere
in
the
Province
of
Ontario,
failed
to
comply
with
a
notice
in
a
personally
served
letter
dated
the
13th
day
of
August,
1996,
and
served
the
13th
day
of
August,
1996,
upon
it
pursuant
to
paragraph
289(1)
of
the
Excise
Tax
Act,
in
that
it
did
not
provide
to
the
Minister
of
National
Revenue,
Taxation,
at
the
City
of
Scarborough,
Province
of
Ontario,
certain
documents
for
the
period
January
1,
1991
to
June
30,
1996,
to
wit:
(1)
Copies
of
all
purchase
records
including
but
not
limited
to
correspondence,
contracts,
purchase
orders,
purchase
invoices,
receiving
documents
or
bills
of
lading;
(2)
Copies
of
all
sales
records
including
but
not
limited
to
sales
invoices,
sales
orders
and
accounts
receivable
ledgers;
(3)
Purchase
journal,
sales
journal,
accounts
payable
ledger
and
general
ledger;
(4)
Bank
Statements
and
returned
cheques
required
from
it,
contrary
to
subsection
326(1)
of;
the
Excise
Tax
Act,
and
2)
On
or
about
the
3rd
of
February,
1997,
at
the
City
of
Scarborough
and
elsewhere
in
the
Province
of
Ontario,
failed
to
comply
with
a
notice
in
a
personally
served
letter
dated
the
13th
day
of
August,
1996,
and
served
the
13th
day
of
August,
1996,
made
upon
it
pursuant
to
paragraph
231.2(
1
)(a)
of
the
Income
Tax
Act,
in
that
it
did
provide
to
the
Minister
or
National
Revenue,
Taxation,
at
the
City
of
Scarborough,
Province
of
Ontario,
certain
information,
to
wit:
A
completed
Corporate
Income
Tax
Return
on
Form
T2
for
each
of
the
taxation
years
ended
during
1988,
1989,
1990,
1991,
1992,
1993,
1994
and
1995,
including
statements
of
Assets
and
Liabilities
and
statements
of
Income
and
Expenses,
required
from
it,
contrary
to
subsection
238(1)
of
the
Income
Tax
Act,
R.S.C.,
c.
1
(5th
Supp.),
as
amended.
Counts
3
&
4
Against
Lloyd
Kenneth
Wakefield
Jr.
It
is
also
alleged
by
the
Crown
that
Lloyd
Kenneth
Wakefield
Jr.
unlawfully:
3)
On
or
about
the
3rd
day
of
February,
1997,
at
the
City
of
Scarborough
and
elsewhere
in
the
Province
of
Ontario,
failed
to
comply
with
a
notice
in
a
personally
served
letter
dated
the
13th
day
of
August,
1996,
made
upon
him
pursuant
to
paragraph
231.2(l)(a)
of
the
Income
Tax
Act,
in
that
he
did
not
provide
to
the
Minister
of
Ontario,
certain
information,
to
wit:
A
completed
individual
Income
Tax
Return
on
Form
TI
for
each
of
the
taxation
years
1987,
1988,
1989,
1990,
1991,
1992,
1993,
1994
and
1995,
including
statements
of
Income
and
Expenses,
required
from
him,
contrary
to
subsection
238(1)
of
the
Income
Tax
Act,
R.S.C.,
c.
1
(5th
Supp.),
as
amended,
and
4)
On
or
about
the
3rd
day
of
February,
1997
at
the
City
of
Scarborough
and
elsewhere
in
the
Province
of
Ontario,
being
the
Director
of
the
said
Canvarnet
Computer
Corporation,
did
direct,
authorize,
assent
to,
acquiesce
in,
or
participate
in
the
failure
of
the
said
Canvarnet
Computer
Corporation
in
that
it
did
not
provide
to
the
Minister
of
National
Revenue,
Taxation,
at
the
City
of
Scarborough,
Province
of
Ontario,
certain
information,
to
wit:
A
completed
Corporation
Income
Tax
Return
on
form
T2
for
each
of
the
taxation
years
ended
during
1988,
1989,
1990,
1991,
1992,
1993,
1994
and
1995,
including
statements
of
Assets
and
Liabilities
and
statements
of
Income
and
Expenses,
following
a
notice
dated
the
13th
of
August,
1996,
and
served
the
3th
day
of
August,
1996,
made
upon
the
said
Canvarnet
Computer
Corporation
pursuant
to
paragraph
231.2(1)(a)
of
the
Income
Tax
Act,
R.S.C.,
c.
1
(5th
Supp.)
As
amended,
and
did
thereby
commit
an
offence
contrary
to
subsection
238(
1
)
of
the
said
Act
and
is
thereby
a
party
to
and
guilty
of
the
said
offence
by
virtue
of
Section
242
of
the
said
Act.
The
Crown
called
two
witnesses:
Peter
Goetting,
an
Investigator
for
Revenue
Canada,
and
John
Phillips,
an
Excise
Tax
Auditor
for
Revenue
Canada.
The
defence
called
Kenneth
Wakefield,
Sr.,
the
father
of
the
accused,
Kenneth
Wakefield,
Jr.
Summary
of
the
Crown
Evidence:
According
to
the
Revenue
Canada
GST
Auditor,
John
Phillips,
in
1991,
Revenue
Canada
initiated
a
“community
initiative”
in
Port
Perry,
Ontario,
in
which
Revenue
Canada
staff
had
informal
visits
with
businesses
in
the
area,
and
permitted
local
businesses
to
consult
about
income
tax
matters
without
facing
harsh
penalties.
In
the
course
of
this
initiative,
one
business
reported
having
a
tax
return
prepared
by
a
company
named
“Accounting
Solutions
Canada”
which
Revenue
Canada
believed
to
be
the
operating
name
for
Canvarnet
Computer
Corporation,
which
was
headed
by
a
Mr.
Ken
Wakefield.
This
belief
was
based
on
a
perusal
of
the
Revenue
Canada
GST
Database
which
provides
Revenue
Canada
with
“linkages”
between
corporate
names,
styles,
and
individuals.
The
search
of
the
database
revealed
that
Canvarnet
Computers
had
not
filed
T2
Returns
since
its
inception,
and
Mr.
Wakefield
had
not
filed
Tl
returns
since
1987.
A
decision
was
taken
in
1996
to
take
a
closer
look
at
Canvarnet
and
Mr.
Wakefield.
In
1996,
Mr
Goetting
was
referred
the
Canvarnet/Wakefield
file
for
further
investigation.
Mr.
Goetting
communicated
with
GST
Auditor
John
Phillips
and
they
decided
to
try
to
serve
Mr.
Wakefield
with
compliance
letters
regarding
all
of
what
they
believed
to
be
his
outstanding
obligations
under
the
various
provisions
of
the
Income
Tax
Act
and
Excise
Tax
Act.
Each
of
the
four
counts
referred
to
above
are
framed
as
failures
to
comply
with
notices
personally
served
on
the
13th
of
August,
1996.
Exhibits
2,
3,
4,
and
5
are
the
notices
that
the
Crown
alleges
were
served
on
that
date.
Following
the
events
of
August,
1996,
communication
of
various
types
took
place,
and
eventually
four
Informations
were
sworn
by
Peter
Goetting
on
the
2nd
of
May,
1997,
which
form
the
basis
of
this
trial
proceeding.
Eventually,
during
the
course
of
these
legal
proceedings,
Mr.
Wakefield
provided
Revenue
Canada
with
personal
income
tax
returns
covering
the
years
1987
to
1995,
and
corporate
returns
covering
the
years
1988
to
1995.
Revenue
Canada
states
that
none
of
these
Returns
could
be
characterized
as
adequate,
due
to
missing
information.
Defences
Raised
by
Mr.
Wakefield:
Acting
on
his
own
behalf,
Mr.
Wakefield
raised
a
number
of
defences
which
I
will
attempt
to
summarize:
I)
Neither
he,
or
Canvarnet
Computer
Corporation
were
served
with
the
13
August
Notices.
2)
He
did
not
have
access
to
his
personal
documents,
records
and
so
forth,
because
of
a
Divorce
Proceeding,
and
a
therefore,
even
if
he
had
been
served
with
a
demand,
could
not
comply
with
the
various
requests
he
had
received
from
Revenue
Canada
to
provide
documentation
and
complete
returns.
3)
He
had
exercised
due
diligence
in
his
efforts
to
provide
information
and
file
returns.
4)
The
unsigned
income
tax
returns
that
were
filed
were
valid
returns,
notwithstanding
their
lack
of
complete
information.
Service
of
the
13
August,
1996
Notices:
Peter
Goetting
testified
that
on
the
13th
of
August,
1996,
he
attended
at
2857
Lawrence
Avenue
East,
in
Scarborough,
the
building
address
he
understood
from
Mr.
Phillips
to
be
the
building
in
which
Mr.
Wakefield’s
business,
Canvarnet
Computer
Corporation,
was
located.
Mr.
Goetting
knocked
on
the
door
of
a
Suite
and
a
person
behind
the
door
said
“Who
is
it?”
Mr.
Goetting
identified
himself
and
the
fact
he
was
a
Revenue
Canada
investigator,
but
the
person
behind
the
door
did
not
respond.
Mr.
Goetting
repeated
himself,
and
raised
his
voice,
but
could
get
no
response.
He
then
opened
the
mail
slot
and
threw
the
sealed
envelope
into
the
suite,
containing
the
letters
that
were
filed
as
Exhibits
2,
3,
4
&
5.
He
then
stated
“You
have
been
served
with
requirement
letters.
I’ll
see
you
in
court
if
you
don’t
comply.”
There
was
no
number
on
the
door,
but
he
believed
he
was
at
the
Canvarnet
office
because
of
an
unknown
person
he
encountered
in
the
hallway
who
stated
that
“Mr.
Wakefield”
was
inside.
He
also
stated
under
oath
that
he
can
say
that,
in
his
opinion,
the
person
behind
the
door
had
the
same
voice
as
the
accused.
The
Crown
Argument
with
Respect
to
Service:
The
Crown
argument
is
that
the
provisions
of
the
Income
Tax
Act,
specifically
sections
244(5)
and
244(6)
provide
for
both
service
by
mail
and
personal
service,
and
further
provide
for
simplified
procedures
of
proving
service
through
affidavit’s
by
an
officer
of
the
Department
of
National
Revenue.
These
provisions,
she
argues,
simplify
the
requirements
on
the
Crown
for
proving
service
of
requests,
notices
and
demands,
and
evidence
a
Parliamentary
intent
for
a
broad
and
liberal
interpretation
of
“service”
for
the
purposes
of
the
Income
Tax
Act.
Analysis
of
the
Issue
of
Service:
The
Sections
relied
upon
by
the
Crown
read
as
follows:
Sections
244(5)
&
244(6)
(5)
Proof
of
Service
By
Mail
Where,
by
this
act
or
regulation,
provision
is
made
for
sending
by
mail
a
request
for
information,
notice
or
demand,
an
affidavit
of
an
officer
of
the
Department
of
National
Revenue,
sworn
before
a
commissioner
or
other
person
authorized
to
take
affidavits,
setting
out
that
the
officer
has
knowledge
of
the
facts
in
the
particular
case,
that
such
a
request,
notice
or
demand
was
sent
by
registered
letter
on
a
named
day
to
the
person
to
whom
it
was
addressed
(indicating
the
address)
and
that
the
officer
identifies
as
exhibits
attached
to
the
affidavit
the
post
office
certificate
of
registration
of
the
letter
or
a
true
copy
of
the
relevant
portion
thereof
and
a
true
copy
of
the
request,
notice
or
demand,
shall,
in
the
absence
of
proof
to
the
contrary,
be
received
as
evidence
of
the
sending
and
of
the
request,
notice
or
demand.
(6)
Proof
of
Personal
Service
Where,
by
this
Act
or
regulation,
provision
is
made
for
personal
service
of
a
request
for
information,
notice
or
demand,
an
affidavit
of
an
officer
of
the
Department
of
National
Revenue
sworn
before
a
commissioner
or
other
person
authorized
to
take
affidavits
setting
out
that
the
officer
has
knowledge
of
the
facts
in
the
particular
case,
that
such
a
request,
notice
or
demand
was
served
personally
on
a
named
day
on
the
person
to
whom
it
was
directed
and
that
the
officer
identifies
as
an
exhibit
attached
to
the
affidavit
a
true
copy
of
the
request,
notice
or
demand,
shall,
in
the
absence
of
proof
to
the
contrary,
be
received
as
evidence
of
the
personal
service
and
of
the
request,
notice
or
demand.
Each
count
before
the
Court
requires
the
Crown
to
prove
that
the
13
August
1996
letters,
Exhibits
2-5,
where
personally
served
on
Lloyd
Kenneth
Wakefield
Jr.
Two
of
the
counts
before
the
court
alleges
that
the
Canvarnet
Computer
Corporation
failed
to
comply
with
the
demand
of
the
Minister
of
National
Revenue,
Taxation
and
two
of
the
counts
alleges
that
Lloyd
Kenneth
Wakefield
Jr.
failed
to
comply
with
the
demand
of
the
Minister.
To
succeed,
the
Crown
must
first
establish
that
the
demand
was
properly
served,
and
then,
that
it
was
not
complied
with
by
the
accused.
After
carefully
reviewing
the
Crown
evidence,
I
have
come
to
the
conclusion
that
the
Crown
has
not
proven
service
of
the
demand
letters,
Exhibits
2—5.
Firstly,
the
provisions
of
244(5)
and
244(6),
which
provide
the
Crown
with
a
convenient
short
cut
through
the
preparation
of
an
affidavit
by
an
officer,
were
not
complied
with
in
this
proceeding.
No
affidavits
were
filed
with
respect
to
Exhibits
2-5,
and
thus
I
must
look
at
the
testimony
of
the
two
Crown
witnesses,
Mr.
Goetting
and
Mr.
Phillips
to
decide
whether
service
was
proven.
The
informations
speak
of
“personally
served
letters”.
The
address
that
Mr.
Goetting
attended
was
not
shown
to
be
the
corporate
office
of
the
corporate
defendant.
None
of
the
corporate
filings
show
the
address
as
the
address
of
the
company.
Mr.
Goetting
never
saw
Mr.
Wakefield
at
the
address
in
question.
The
evidence
connecting
Mr.
Wakefield
with
the
address
where
service
was
attempted
is:
1)
An
unsubstantiated
opinion
by
Mr.
Phillips
that
“Accounting
Solutions”
-
a
name
Mr.
Phillips
found
on
a
sign
in
the
foyer
of
2857
Lawrence
Ave.
East,
on
28
March
and
9
April
of
1996
-
is
a
related
company
to
Canvarnet.
2)
A
hearsay
utterance
at
the
scene
on
the
13th
of
August,
1996,
by
an
unnamed
source
to
Mr.
Goetting
3)
Mr.
Goetting’s
opinion
that
the
“voice”
behind
the
door
was
Mr.
Wakefield’s.
4)
Mr.
Goetting’s
testimony
that
a
Van
parked
in
the
plaza
parking
lot
was
registered
to
Mr.
Wakefield.
Although
this
is
“some
evidence”
connecting
Mr.
Wakefield
with
the
address,
it
is
fatally
deficient:
I)
The
corporate
address,
according
to
the
Crown
Evidence,
is
6
Frey
Crescent,
Scarborough.
2)
Mr.
Phillips,
under
cross-examination,
admitted
that
he
could
have
been
mistaken
about
the
exact
name
he
saw
in
the
foyer
of
2857
Lawrence
Ave.
East.
3)
Mr.
Phillips
also
revealed
a
very
hazy
knowledge
of
the
relationship,
if
any,
between
“Accounting
Solutions”
and
Canvarnet.
4)
Mr.
Goetting
cannot
recall
who
told
him
that
a
“Mr.
Wakefield”
was
present
on
the
13th
of
August,
1996.
5)
No
proof
of
the
registration
of
the
“van”
was
provided
to
the
Court.
6)
Mr.
Goetting’s
opinion
regarding
the
“voice”
he
heard
on
the
13th
of
August,
1996
was
based
on
one
very
brief
utterance,
and
was
not
reliable,
having
regard
to
the
fact
he
did
not
know
Mr.
Wakefield
at
the
time,
and
is
attempting
to
extrapolate
backwards
from
what
he
now
thinks
he
knows.
7)
The
notices
were
thrown
through
a
mail
slot,
without
Mr.
Goetting
seeing
the
person
to
whom
he
was
speaking,
or
whether
the
envelope
was
actually
retrieved
or
handled
by
the
person
he
believed
to
be
on
the
other
side
of
the
door.
I
cannot
conclude
with
any
certainty
that
Mr.
Wakefield
or
the
Canvarnet
Computer
Corporation
were
actually
operating
out
of
the
2857
Lawrence
Avenue
East
address,
or
that
they
were
served.
Without
adequate
proof
of
the
service
of
the
demand
letters,
the
obligation
to
comply
with
the
requests
of
13
August
1996
does
not
arise.
Because
of
my
finding
with
respect
to
service
of
the
demand
notice,
I
need
not
address
the
other
arguments
advanced
by
Mr.
Wakefield.
In
the
result,
I
find
the
Crown
has
not
proven
the
case
in
any
of
the
four
allegations
before
the
court.
Disposition:
The
charges
against
Mr.
Kenneth
Wakefield
Jr.
and
the
Canvarnet
Computer
Corporation
are
dismissed.
Taxpayers
acquitted.
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