His Majesty the King v. Harrison, [1917-27] CTC 215

TRUEMAN, J.A.:—The Magistrate of the Provincial Police Court, though finding the accused in each case guilty for failing on October 25 and 26, 1923, to give information demanded by the Minister under sec. 8 of the Income War Tax Act, 1917 (Can.), e. 28, as amended by sees. 11 and 12 of 1920 (Can.), e. 49. imposed no fine, and suspended sentence. At the request of counsel for the Crown the Police Magistrate reserved the following questions for this Court:

1. Whether he was required by sec. 9(1) of the Income War Tax Act, 1917, as amended by 1919 (Can.), e. 55, see. 7: 1920 (Can.), c. 49, sec. 18; 1921 (Can.), ce. 33, sec. 4, to impose a penalty of $25 for each day on which default continued. >, Whether under the said Acts, and law relating thereto, he had a discretion enabling him to impose a lesser penalty than $25 for. each day of default. 3. Whether he had power to suspend sentence.

Sec. 9(1) of the Income War Tax Act, as amended, provides that for every default in complying with sec. 8, "‘the persons in default shall each be liable on summary conviction to a penalty of twenty-five dollars for each day during which the default continues? ’ By subsec. 2: "‘Any person making a false statement in any return or in any information required by the Minister, shall be liable on summary conviction to a penalty not exceeding ten thousand dollars or to six months’ imprisonment, or to both fine and imprisonment.’’

In Rex v. Thompson Mfg. Co. (1920) 47 O.L.R. 103, Latehford, J., held that under sec. 9(1) the Magistrate has no discrettion to limit the number of the days for which the penalty was to be imposed, or to reduce the amount of the penalty fixed by the section for each day’s default. The Supreme Court of Nova Scotia came to the same conclusion in The King v. Smith [1923] 1 D.L.R. 820, 38 Can. C.C. 327, 56 N.S.R. 72, Harris, C.J., dissenting on the ground that sec. 9 (1) is subject to the discretion provided for in sec. 1029 of the Code.

The utmost, it seems to me, that can be said in support of the view that sec. 9(1) provides for a discretion is that if a discretion were not intended, language with a peremptory significance obvious to the lay mind would have been used; familiar examples of which would be known to the parliamentary draftsman. For the words ‘‘shall be liable” there might have been substituted. ‘‘shall forfeit’’ or ‘‘shall ineur’’ or ‘‘shall suffer’’ or ‘‘shall pay”. See Customs Law Act, 1976 (Imp.), c. 36, secs. 106 and 168 ; Act, 1 Wm. & M. c. 18 ; Customs Act, R.S.C. 1906, c. 48, secs. 186, 187, 189, 193; and Act, 1 Jac. 1, ce. 27.

Yet in what respect are these examples more absolute in fixing liability or wherein do they exclude discretion to a more positive degree than do the words in the section? Discretion can only exist if provision is made for it. To import a discretion here is to hold that the words 44 shall be liable”, etc., mean, in one view, ‘‘shall be liable to a penalty not exceeding twenty- five dollars ‘ and in another view, as no minimum sum is named, discretion to impose no penalty at all. The notion that the penalty is discretionary would appear to be the result of suggestion, derived from the habitual use in statutory provisions of the words "‘shall be liable” when conferring discretion to impose a fine within the limits of a maximum and a minimum sum. If the words are removed from the influence of this suggestion, and are read literally, their mandatory nature is seen to be beyond question. See Foss Lbr. Co. v. The King (1912) 8 D.L.R. 437, 47 S.C.R. 180; Re Burton and Blinkhorn [1903] 2 K.B. 300; Howard v. Bodington (1877) 2 P.D. 203, at p. 211.

The view adopted by Harris, C.J., in The King v. Smith, supra, that sec. 9(1) is to be read subject to sec. 1029 of the Code is pressed upon us by counsel for the defendant. Sec. 1029 provides as follows:

"Whenever a fine may be awarded or a penalty imposed for any offence, the amount of such fine or penalty shall, within such limits, if any, as are prescribed in that behalf, be in the discretion of the court or person passing sentence or convicting, as the case may be.’

Harris, C.J., considered that if the words "‘within such limits, if any, as are prescribed in that behalf’’, were read as if in brackets, it clearly appeared that the Court had an unlimited discretion as to the amount of a penalty or fine in all cases, provided that where there are any limits prescribed the discretion must be exercised within those limits. With great respect, while appreciating that the words "‘if any’’ lend colour to this contention, I am unable to adopt it. It involves a recasting of the section, which will then read as follows: " " Whenever a fine may be awarded or a penalty imposed for any offence, the amount of such fine or penalty shall be in the discretion of the Court or person passing sentence or convicting, as the case may be ; provided, however, that where limits are prescribed as to the amount of such fine or penalty, the discretion of the Court shall be subject to such limits. This construction is not required by any difficulty in reading the section in its ordinary and literal sense. Why should it be considered that where a penalty is fixed by Parliament the Court should under sec. 1029, have power to reduce it to any or no amount, though where a maximum and a minimum limit is set, the discretion is kept within it? If the discretion under the section is unfettered in the one case, there is no reason why Parliament should not have made it equally elastic in the other.

I would answer the first question in the affirmative, and the second and third questions in the negative. The third question is concluded by the judgment of this Court in Rex v. Hiebert (1923) 33 Man. L.R. 375.

Judgment accordingly.