Lane
J.A.:
This
is
a
summary
conviction
appeal
by
both
accused
from
a
decision
of
a
Summary
Conviction
Appeal
Court
Judge
ordering
a
new
trial
on
seven
counts
against
the
appellants
under
ss.
239(1)(a)
and
(d)
of
the
Income
Tax
Act.
The
charges
against
both
pertain
to
willfully
evading
the
payment
of
taxes
and
the
unlawfully
making
of
a
false
or
deceptive
statement
in
the
return
of
income.
The
respondent,
Crown,
had
appealed
to
the
Summary
Conviction
Appeal
Court
after
the
trial
judge
had
acquitted
the
appellants
herein.
The
appeal
judge
found
the
trial
judge
had
come
to
the
conclusion
he
had
a
reasonable
doubt
the
appellants
had
deceitfully
or
falsely
made
a
statement
in
completing
the
tax
returns
and
a
reasonable
doubt
they
had
willfully
evaded
the
payment
of
taxes,
and
that
such
doubt
was
rooted
at
least
in
part
in
a
belief
the
appellants
could
legally
have
avoided
the
payment
of
tax.
Essentially
the
appeal
judge
decided
the
trial
judge
erred
in
failing
to
determine
if
the
payments
involved
were
income
and
in
focussing
only
on
the
criminal
intent
of
the
accused.
The
appeal
judge
ruled
he
could
not
say
the
trial
judge’s
conclusion
would
have
been
the
same
if
he
had
first
determined,
as
he
ought
to
have,
the
payments
received
by
the
appellants
were
in
fact
income
and
then
ordered
a
new
trial.
In
our
view
the
appeal
judge
misinterpreted
the
decision
of
the
trial
judge.
The
trial
judge
proceeded
on
the
worst
case
scenario,
that
is
that
all
payments
received
by
the
appellants
constituted
income
and
then
he
considered
the
issue
of
criminal
intent.
Thus
in
our
opinion
the
trial
judge
properly
considered
the
issue
of
income
before
dealing
with
mens
rea.
The
Crown
argues
before
us
the
accounting
records
upon
which
the
claim
for
deductions
were
made
were,
in
fact,
false
thus
obviating
the
liability
for
tax.
The
Crown
contends
the
courts
below
erred
in
failing
to
recognize
the
falsity
of
the
claims.
The
Crown
did
not
raise
this
issue
in
its
grounds
of
appeal
to
either
the
Summary
Conviction
Appeal
Court
or
this
Court.
The
Crown,
however,
made
it
clear
the
issue
was
fully
before
the
courts
below.
The
Crown
is
asking
this
Court
to
overturn
findings
of
fact
made
by
the
trial
judge
by
arguing
the
returns
were
false
and
therefore
the
basis
for
such
findings
was
erroneous.
In
fact,
neither
the
trial
judge
nor
the
appeal
judge
were
prepared
to
make
such
a
finding.
The
trial
judge,
in
response
to
the
Crown’s
argument
the
retruns
were
false
and
the
records
and
record
keeping
were
part
of
an
elaborate
scheme
of
deception
to
avoid
taxes,
stated
“It
is
also
consistent
with
simple
sloppiness.”
The
appeal
judge
stated,
“In
my
opinion,
there
is
some
question
as
to
whether
either
accused
willfully
evaded
the
payment
of
income
tax,
or
whether
there
was
any
intent
to
make
a
statement
knowing
it
to
be
false
or
deceptive.
The
bookkeeping
was
haphazard
and
sloppy....”
Both
parties
agreed
the
test
is
set
out
in
R.
v.
Redpath
Industries
Ltd.
(1984),
84
D.T.C.
6349
(Que.
S.C.)
at
p.
6351:
A
criminal
court
is
not
the
forum
to
determine
income
taxability
and
to
make
determinations
as
to
rights
to
tax
assessment
or
absence
of
rights
of
assessment
involved.
In
a
tax
evasion
charge,
it
must
appear
prima
facie
from
the
evidence
that
the
taxability
is
clear-cut,
obvious,
indisputable,
unquestionable
from
lack
of
reporting,
before
entering
the
examination
of
the
other
facts
of
the
charge,
e.g.
whether
the
undisputable
taxability,
based
on
income
gained,
proven
and
undeclared,
leads
to
a
conclusion
beyond
a
reasonable
doubt
that
it
was
wilfully
omitted
by
a
taxpayer
in
his
tax
returns.
The
evidence
of
taxability
was
not
clear-cut,
obvious
or
indisputable.
On
the
material
before
us
there
is
no
basis
prepared
to
overturn
the
findings
of
fact
made
by
the
trial
judge.
See
R.
v.
Andres
(1979),
[1982]
2
W.W.R.
249
(Sask.
C.A.).
The
appeal
is
therefore
allowed
and
the
acquittals
ordered
by
the
trial
judge
are
restored.
Appeal
allowed.
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