R. v. Dionne, [1999] 3 CTC 184

Klebuc J.:

The appellant appeals his conviction on eight counts of failing to comply with a notice served upon him pursuant to s. 231.2( I )(a) of the Income Tax Act contrary to ss. 238(1) of the Income Tax Act, R.S.C. 1952, c. 148, as amended. Count No. I reads as follows:

Gregory Dionne ... on or about the 14th day of November, A.D. 1995 at Prince Albert, in the Province of Saskatchewan, did

Count No. 1:

Unlawfully failed to comply with the notice in a personally served letter served on the 14th day of August 1995 made upon him pursuant to paragraph 231.2(1 )(a) of the Income Tax Act in that he did not provide to the Minister of National Revenue at Saskatoon in the Province of Saskatchewan, a completed Individual Income Tax Return on form T-1 for the taxation year ended 1987 including a Statement of Assets and Liabilities and a Statement of Income and Expenses, contrary to Subsection 238(1) of the Income Tax Act, R.S.C. 1952, c. 148 as amended.

The remaining seven counts are identical excepting that they cover the taxation years 1988 to 1994, inclusive.

During his submission, counsel for the appellant relied solely on the ground that the learned trial judge erred in law by allowing the Crown to call additional viva voce evidence after it closed its case and the appellant had elected not to call evidence and had outlined the theory of his defence.

Facts

All eight counts were tried in the Provincial Court of Saskatchewan. The Crown presented its case by tendering affidavit evidence under s. 244 of the Income Tax Act. On each count the Crown tendered the following: an affidavit by Neil McTavish described as the failure to comply affidavit; a second affidavit by him described as the affidavit of personal service to which a notice letter was attached as exhibit A; and an affidavit by Denise Caswell described as a failure to comply affidavit. In the failure to comply affidavit, McTavish deposed:

I. That I am an officer of the Department of National Revenue in charge of the appropriate records in the Saskatoon District Office for persons from whom a return or information by statement or answer is required under and in accordance with the provisions of the Income Tax Act.

2. That after careful examination and search of the appropriate records mentioned in paragraph I above, I have been unable to find in this particular case that a completed Individual Income Tax Return on form T-l for the taxation year 1987, including a Statement of Assets an (sic) Liabilities and a Statement of Income and Expenses by statement or answer required has been made and filed or provided up to and including the 28th day of November, 1996, by the said Gregory Dionne. (emphasis added)

In the personal service affidavit, McTavish deposed that he personally served Gregory Dionne with a notice pursuant to para. 231.2( 1 )(a) of the Income Tax Act by handing him a true copy of the notice letter marked as Exhibit A thereto. The letter in part reads:

... I hereby require from you within NINETY (90) days of the receipt of service of this letter:

¢ A completed Individual Income Tax Return on form T-l for the taxation year 1988, including a Statement of all Assets and Liabilities and a Statement of all Income and Expenses.

The return, as described above, is required to be forwarded to the Saskatoon Tax Services Office at the address shown below to the attention of Neil McTavish.

Yours truly,

“W.C. Reich”

W.C. REICH

B. Reich

Director

Saskatoon Tax Services Office

Served personally by:

“MCTavish”

(emphasis added)

Immediately below McTavish’s signature on p. 2 of the notice letter the date “September” 14, 1995 was written in and then altered to “August 14, 1995”, or vice versa. An address for the Saskatoon Tax Services Office is not set out in the letter.

In her affidavit, Caswell deposed that she is in charge of the appropriate records at the Winnipeg Taxation Centre and that upon conducting a search thereof on June 5, 1996, she was unable to find a tax return from Gregory Dionne for the year 1987. Her affidavit was sworn before a commissioner for oaths in and for the Province of Manitoba.

The affidavits tendered by the Crown on counts two to eight are identical to those tendered on count one, save for a change in the tax year to correspond with the taxation year referenced in each count. Upon the affidavits being marked as full exhibits, the Crown closed its case. Defence counsel then elected not to call evidence and outlined the defences relied on. The trial judge requested counsel to provide him with written submissions and adjourned the trial to April 23, 1997.

On the adjourned date, the learned trial judge allowed the Crown to recall McTavish over the objections of defence counsel. McTavish testified that his affidavits of personal service of a notice were in error because he had personally served the notice letters in 1995 and not in 1996 as stated in the affidavits. The appellant also testified and confirmed that he had not filed tax returns as required by the eight notice letters. After final submissions, the trial judge convicted the appellant on all eight counts.

Issues

The following issues arise:

(1) Did the learned trial judge err in allowing the Crown to call additional evidence after it closed its case?

(2) If the answer to question (1) is “Yes”, should a total acquittal be entered, or should this Court render a decision based on the evidence properly before it, or should it refer the matter back to the Provincial Court?

Analysis

The Supreme Court of Canada dealt with the principles governing when the Crown should be allowed to reopen its case in R. v. P. (M.B.) (1994), 29 C.R. (4th) 209 (S.C.C.) and R. v. G. (S.G.), [1997] 2 S.C.R. 716 (S.C.C.). Writing for the majority in R. v. P. (M.B.) Lamer C.J.C. at p. 220 stated:

The keystone principle in determining whether the Crown should be allowed to reopen its case has always been whether the accused will suffer prejudice in the legal sense - that is, will be prejudiced in his or her defence. A trial judge’s exercise of discretion to permit the Crown’s case to be reopened must be exercised judicially and should be based on ensuring that the interests of justice are served.

Traditionally, courts in Canada and in England have treated the stage reached in a proceeding as correlative to prejudice and injustice to the accused. That is, a court’s discretion with respect to reopening will be exercised less readily as the trial proceeds. ...

... after the Crown has closed its case and the defence has started to answer the case against it (or, as in much of the case law, the defence has actually closed its case), a court’s discretion is very restricted and is far less likely to be exercised in favour of the Crown. It will only be in the narrowest of circumstances that the Crown will be permitted to reopen its case. ...

At p. 223, Lamer C.J.C. stated that after the defence has started to answer the case judicial discretion should only be exercised to allow the Crown to reopen its case only in the following instances: (1) where the conduct of the defence has directly or indirectly contributed to the Crown’s failure to adduce certain evidence before closing its case; and (2) where Crown’s omission or mistake was over a non-controversial issue to do with purely formal procedural or technical matters having nothing to do with the substance or merits of the case. Regarding the Supreme Court’s decision in R. v. Robillard, [1978] 2 S.C.R. 728 (S.C.C.) the Chief Justice opined that it should be construed narrowly as dealing with a mistake as to form rather than substance.

In À. v. G. (S.G.), the Supreme Court approved its decision in À. v. P. (M.B.) with L’Heureux-Dubé J. and McLachlin J. dissenting. Writing for the majority, Cory J. confirmed that once the Crown has closed its case and the defence has started to answer the case against it, judicial discretion is limited to circumstances of a nature and kind illustrated by the two examples given by Lamer C.J.C. in P. (M.B.) . At pp. 735 and 736, he stated the narrow exception and the reason for it as follows:

Although Lamer C.J. in P.(M.B.) was careful to leave open the possibility that reopening during the third phase of the trial may be permissible in other circumstances, he was equally clear that these circumstances would be rare. In my view, reopening at this stage should only be permitted in those very exceptional cases that are closely analogous to the examples given in P.(M.B.) - in other words, where the absence of prejudice to the accused is manifestly obvious. Beyond these examples, it would be extremely difficult for the Crown to succeed in an application to reopen the case once the accused has begun to answer the Crown’s case.

This restrictive approach is justified because reopening at such a late stage in the proceedings seriously distorts the adversarial process and affects the fairness of the trial. Apart from the narrow exceptions discussed in P.(M.B.), supra, and other exceptional circumstances, prejudice to the accused is almost inevitable. Yet, this is not an unreasonable or unacceptable result, in light of the very grave risks of incurable prejudice to the accused which could arise from a broader rule. The necessity for the strict rule is understandable when some of the risks of prejudice to the accused from reopening the trial during the third phase are considered.

One of the primary concerns that arises from permitting the Crown to reopen during the third phase of the trial is that the right of accused persons not to be conscripted against themselves will be compromised. ... (emphasis added)

In the instant case it is not manifestly obvious that the error involved no more than a non-controversial issue dealing with purely formal procedural or technical matters within the exceptions contemplated in P. (M.B.) or G. (S.G.). Rather, it appears to go to the very substance of the case. The notice letters gave the appellant 90 days from the date of service thereof on him to file the required return and related documentation at the “Saskatoon Tax Services Office”. If the notice letters were served on August 14, 1996 as stated in the affidavits of personal service, then the 90-day period had not expired before the information founding the eight counts was sworn. In those circumstances the appellant was entitled to remain silent.

In my view, the observations of Lamer C.J.C. in P. (M.B.), at p. 228, are apposite to the facts before me:

There is a real risk that the Crown will, based on what it has heard from the defence once it is compelled to ‘meet the case’ against it, seek to fill in gaps or correct mistakes in the case which it had on closing and to which the defence has started to respond.

By allowing the Crown to reopen its case, the trial judge infringed on the appellant’s rights under s. 7 of the Canadian Charter of Rights and Freedoms. The appellant had to change his position. He had to break his silence. I therefore find that the learned trial judge erred in law by allowing the Crown to reopen its case.

I now turn to the second issue. Given that the only admissible evidence is in affidavit form, I am in the same position as the trial judge when weighing the evidence. I therefore will render a decision on the evidence. On the evidence, I conclude that the Crown failed to prove its case to the required standard of proof. First, on the evidence properly before the trial judge, the 90-day period provided for in the notice letters may not have expired. Secondly, excluding the evidence of the accused, there was no evidence before the trial judge establishing that the required individual income tax returns had not been filed with the “Saskatoon Tax Services Office” as required by the notice letters. The McTavish and Caswell affidavits only dealt with the records in the Saskatoon District Office and Winnipeg Office of the Department of National Revenue and in no way suggested, much less proved, that the Saskatoon Tax Services Office and the “Saskatoon District Office” are one and the same.

I further question the admissibility of the Caswell affidavit on the grounds that it was not sworn before a commissioner authorized to commission oaths for use outside the Province of Manitoba. However, since the defence did not challenge its admissibility, I have considered it as having been properly accepted in evidence.

The Crown having failed to prove its case on any of the eight counts in question, I quash the convictions at trial and replace them with verdicts of acquittal.

Appeal allowed.