BENDAS,
D.C.J.
(orally)
:—This
is
an
appeal
by
way
of
trial
de
novo
against
the
conviction
of
the
appellant
in
the
provincial
Magistrates’
Court
on
the
following
charge
:
That
Heinz
Hartmann,
being
an
officer
of
Hartmann
Construction
Ltd.,
a
body
corporate,
incorporated
under
the
laws
of
the
Province
of
Saskatchewan,
participated
in
the
Commission
of
an
offence
contrary
to
subsection
(2)
of
Section
131
of
the
Income
Tax
Act,
Revised
Statutes
of
Canada
1952,
chapter
148
as
amended,
by
said
corporation
namely,
on
or
before
the
15th
day
of
September
1968
at
the
City
of
Saskatoon
in
the
Province
of
Saskatchewan,
Hartmann
Construction
Ltd.,
failed
to
comply
with
subsection
(1)
of
Section
47
of
said
Act
by
not
remitting
$1,525.50
to
the
Receiver
General
of
Canada,
which
it
had
deducted
from
the
salary,
wages
or
other
remuneration
paid
to
its
employees
during
the
month
of
August
1968
as
required
by
subsection
(1)
of
Section
108
of
the
Income
Tax
Regulations;
and
Heinz
Hartmann
became
party
to
and
guilty
of
said
offence
by
operation
of
Section
134
of
said
Act.
On
February
3,
1969
Hartmann
Construction
Ltd.
appeared
in
the
Magistrates’
Court
and,
through
its
counsel,
entered
a
plea
of
guilty
to
a
charge
of
failing
to
comply
with
the
provision
of
Section
47(1)
(amended
1956,
c.
39;
1960-61,
c.
49)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148,
and
was
convicted
and
sentenced
for
the
said
offence.
At
the
time
of
such
conviction
of
the
company
there
was
an
outstanding
charge
under
Section
134
of
the
Act
against
the
appellant,
as
an
officer
of
Hartmann
Construction
Ltd.
Mr.
Hartmann
pleaded
not
guilty,
but
was
convicted
of
the
charge
by
the
learned
judge
of
the
magistrate’s
court.
Mr.
Hartmann
now
appeals
to
this
Court
against
such
conviction.
In
order
to
establish
that
the
appellant
is
guilty
of
an
offence
under
Section
134
of
the
Income
Tax
Act,
it
is
incumbent
upon
the
crown
to
prove
by
relevant
evidence:
(1)
that
the
corporation
was
guilty
of
an
offence
under
the
Act;
and
(2)
that
the
appellant,
being
an
officer
of
the
corporation,
participated
in
the
commission
of
that
offence.
Mere
proof
of
conviction
of
the
corporation
of
an
offence
under
the
Act
is
not
sufficient.
This
question
was
considered
in
Reg.
v.
Anisman,
[1969]
1
O.R.
397;
[1969]
2
C.C.C.
157.
It
was
an
application
before
Brooke,
J.
by
the
accused,
by
way
of
appeal
by
stated
case
against
his
conviction
as
an
officer
of
the
company
under
a
somewhat
similar
provision
of
the
Excise
Tax
Act,
R.S.C.
1952,
e.
100.
In
rendering
his
decision,
Brooke,
J.
stated
the
doctrine
to
be
folowed
in
such
cases
as
folows
at
page
165:
.
.
.
The
conviction
of
the
Company
is
judgment
in
personam
and
the
accused
who
was
not
a
party
to
those
proceedings
cannot
be
bound
by
it
to
the
extent
held
by
the
learned
Magistrate.
I
know
of
no
authority
which
holds
that
the
conviction
of
the
company
is
res
judicata
as
against
a
director,
officer
or
agent,
of
the
same
or
similar
facts
in
issue
in
a
separate
charge
against
such
persons
if
they
were
strangers
to
the
prosecution
of
the
company.
It
is
true
that
a
corporation
acts
through
its
officers,
directors
and
agents,
but
if
the
offence
alleged
against
them
is
a
distinct
offence
from
that
of
the
company,
as
is
the
case
here,
and
if
such
officer,
director
or
agent
was
not
a
party
to
the
proceedings
against
the
company,
I
think
it
would
be
a
novel
extension
of
the
doctrine
of
res
judicata
to
give
it
the
application
now
contended
for.
At
the
hearing
of
this
appeal
the
Crown
called
Mr.
Garry
Robert
Metcalfe,
an
employee
in
the
Department
of
National
Revenue,
who
investigated
this
matter.
In
his
evidence
Mr.
Metealfe
stated
that
on
October
3,
1968
he
called
at
the
office
of
Hartmann
Construction
Ltd.
and
asked
the
appellant
for
permission
to
take
the
records
of
the
company
to
be
checked.
Permission
was
granted.
It
should
be
noted
here
that
Hartmann
Construction
Ltd.
is
a
private
company.
The
only
persons
holding
shares
therein
are
the
appellant
and
his
wife.
The
apelant
is
the
main
shareholder
and
the
president
of
the
company
and
he
is
also
in
charge
of
the
business
of
the
company.
At
the
time
of
Mr.
Metcalfe’s
visit
to
the
company’s
premises,
the
appellant
admitted
to
Mr.
Metcalfe
that
the
company
was
behind
in
payments
to
the
Receiver
General
of
Canada
of
income
tax
and
Canada
Pension
Plan
contributions
deducted
from
the
wages
of
the
employees
of
the
company.
Mr.
Hartmann
gave
as
the
reason
for
such
default
the
financial
difficulties
experienced
by
the
company.
In
his
evidence
Mr.
Metcalfe
stated
that
for
the
month
of
August
1968
the
deductions
which
the
company
failed
to
remit
to
the
Receiver
General
of
Canada
amounted
to
$1,525.50.
He
arrived
at
that
sum
by
checking
the
company’s
records,
which
he
took
from
the
office
on
October
3,
1968,
and
also
on
the
basis
of
the
cheques
issued
by
the
company
to
its
employees
in
payment
of
wages
in
the
month
of
August
1968.
According
to
Mr.
Metcalfe,
in
computing
such
wages
and
the
amount
of
deductions,
he
considered
only
cheques
that
were
issued
in
the
month
of
August
1968
and
which
were
cashed
by
the
respective
employees
either
in
August
or
early
in
September
of
that
year.
There
were
56
cheques
filed
by
the
crown
at
the
hearing
of
this
appeal
as
Ex.
P-1.
Among
the
cheques
so
filed
there
were
four
cheques
issued
in
July
1968.
Mr.
Metealfe
stated
that
the
latter
four
cheques
were
not
considered
by
him
when
computing
the
wages
for
the
period
in
question.
Most
of
the
cheques
were
certified
by
the
bank
on
the
date
of
their
issue
or
a
few
days
thereafter.
Mr.
Metcalfe
further
stated
that
he
compared
each
cheque
issued
in
August
1968
against
the
entries
made
in
the
original
payroll
of
the
company
for
that
month,
and
found
that
each
cheque
was
duly
entered
in
the
wage
sheet
as
wages
paid
to
the
particular
employee
of
that
company
in
the
month
of
August
1968.
The
original
payroll
was
found
on
the
premises
of
the
company.
At
the
trial,
learned
counsel
for
the
crown
filed
a
photostatic
copy
of
the
payroll
for
August
1968.
Mr.
Hawrish
ob-
jected
to
the
admission
of
the
document
on
the
ground:
(1)
that
the
original
should
have
been
produced;
(2)
that
the
payroll
is
not
signed
by
the
company
and
therefore
could
not
be
used
in
evidence.
It
would
appear
that
Mr.
Hartmann
was
served
with
a
subpoena
to
produce
the
original
payroll
at
the
hearing
of
this
appeal.
The
appellant
had
the
document
in
court
and,
during
the
adjournment,
Mr.
Metcalfe
secured
the
original
payroll
from
Mr.
Hartmann
and
made
a
photostatic
copy
thereof
in
the
presence
of
the
appellant
and
his
counsel.
Under
these
circumstances
I
cannot
see
any
valid
reason
why
the
photostatic
copy
should
not
be
admitted
in
evidence;
neither
can
I
find
any
justification
for
the
submission
that
because
the
payroll
has
not
been
signed
by
the
company
it
is
not
admissible
in
evidence.
Under
the
provisions
of
Section
125
(amended
1966-67,
c.
47)
of
the
Income
Tax
Act,
every
person
who
is
required
to
collect
taxes
must
keep
at
his
place
of
business
records
of
wages
paid
to
his
employees.
The
payroll
in
question
was
found
by
Mr.
Metcalfe
at
the
place
of
business
of
Hartmann
Construction
Ltd.
and
must
therefore
be
accepted
as
such
without
requiring
the
same
to
be
signed
on
behalf
of
the
company.
But
even
if
my
findings
in
this
respect
are
not
correct,
there
is
other
evidence
implicating
Hartmann
Construction
Ltd.
in
the
commission
of
the
offence.
There
is
the
admission
of
the
appellant,
who
was
president
and
manager
of
the
company,
that
the
company
failed
to
remit
the
deductions
to
the
Receiver
General
of
Canada
because
it
had
no
funds.
There
is,
further,
the
evidence
of
Mr.
Metealfe,
who
has
checked
each
cheque
issued
to
the
employees
of
the
company
and,
on
the
basis
of
those
cheques,
found
that
the
company
deducted
the
sum
of
$1,525.50
from
the
wages
of
its
employees
as
income
tax
and
contributions
to
Canada
Pension
Plan
in
the
month
of
August
1968,
but
that
it
has
failed
to
remit
the
same
to
the
Receiver
General
of
Canada
on
or
before
September
15,
1968.
These
facts
have
not
been
controverted
by
any
evidence
for
the
apellant;
neither
was
Mr.
Metcalfe’s
veracity
challenged.
Indeed,
Mr.
Metcalfe
impressed
me
as
a
honest
and
impartial
witness.
On
the
basis
of
that
evidence
I
find
that
the
company
was
guilty
of
an
offence
under
the
Income
Tax
Act.
Now,
Section
134
of
the
Act
provides:
134.
Where
a
corporation
is
guilty
of
an
offence
under
this
Act,
an
officer,
director
or
agent
of
the
corporation
who
directed,
authorized,
assented
to,
acquiesced
in,
or
participated
in,
the
commission
of
the
offence
is
a
party
to
and
guilty
of
the
offence
and
is
liable
on
conviction
to
the
punishment
provided
for
the
offence
whether
or
not
the
corporation
has
been
prosecuted
or
convicted.
The
evidence
in
this
case
has
established
beyond
any
reasonable
doubt
that
at
the
time
material
to
these
proceedings
the
appellant,
Heinz
Hartmann,
was
the
principal
shareholder
and
sole
manager
of
the
business
affairs
of
Hartmann
Construction
Ltd.
He
admitted
to
Mr.
Metcalfe
that
he
signed
all
cheques
that
were
seized
from
the
company’s
premises.
A
company
can
only
act
through
its
officer,
director
or
agent.
The
appellant
was
such
officer
and
agent
and
it
was
through
his
instrumentality
that
Hartmann
Construction
Ltd.
committed
the
offence.
Section
134
of
the
Act
provides
that
where
a
corporation
is
guilty
of
an
offence,
an
officer,
director
or
agent
of
the
corporation
who
directed,
authorized,
assented
to,
acquiesced
in
or
participated
in
the
offience
is
a
party
to
and
guilty
of
the
offence.
The
evidence
in
this
ease
established
beyond
any
reasonable
doubt
that
the
appellant
did
participate
in
the
commission
of
the
offence
by
failing
to
remit
the
deductions
from
the
wages
of
the
company
’s
employees
to
the
Receiver
General
of
Canada
and
I
must,
therefore,
find
the
appellant
guilty
of
the
offence
as
charged.
I
have
reached
this
conclusion
with
great
reluctance.
Hartmann
Construction
Ltd.
is
a
private
company.
The
only
persons
holding
shares
in
the
company
are
the
appellant
and
his
wife.
To
all
intents
and
purposes
the
so-called
‘‘corporation’’
and
the
appellant
are
one
and
the
same
entity.
In
my
opinion,
by
enacting
Section
134
of
the
Act
the
legislator
meant
to
prevent
abuses
of
the
Act
by
officers,
directors
or
agents
of
corporations
having
a
large
number
of
shareholders,
and
where
fining
the
corporation
would
hardly
affect
personally
such
officers
or
agents.
In
the
present
case,
by
prosecuting
the
company,
the
appellant
is
equally
prosecuted.
The
fine
imposed
upon
the
company
is
also
a
fine
imposed
upon
the
appellant.
In
effect,
by
prosecuting
the
company
as
well
as
the
appellant,
Heinz
Hartmann
is
being
fined
twice
for
the
same
offence.
Unfortunately,
this
is
one
of
the
instances
where
the
courts
are
unable
to
grant
relief.
It
is
a
matter
for
the
legislature
to
remedy
the
situation.
The
appeal
will
be
dismissed
and
the
conviction
confirmed.
Normally
costs
follow
the
event.
The
matter
of
costs
is
in
the
discretion
of
the
Court.
Under
the
circumstances
of
the
case
at
bar,
there
will
be
no
costs
to
either
party.
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