Finlay Mackenzie Samis, v. Regina, Ex Rel. John Bagg, , [1963] CTC 340

FINGLAND, J.:—This matter came before me by way of an appeal by the defendant from his conviction on three charges which were heard and determined by the local magistrate.

He was charged that he did ‘‘on or about the 7th day of August, 1962, at Goderich, in the said County and Province, fail to file a return required by or under the Income Tax Act, to wit : his Information Return on Form T4 for the year 1961, following demand therefor dated 6th day of July, 1962, and made upon him pursuant to Section 127 of the Income Tax Act, contrary to Section 131(1) of the Income Tax Act.’’

The second and third charges were identical except that the dates of default were alleged to have been the 8th and 9th days of August, 1962, respectively.

The evidence called for the Crown consisted of an affidavit of an officer of the Department of National Revenue which I find complies with Section 136(5) and (6) of the Income Tax Act, and I adopt the findings of the local magistrate with reference thereto wherein he found

“(1) that a demand by registered letter from the Minister of National Revenue was mailed on July 6th, 1962, to the said Finlay Samis at his address, 87 Kingston Street, in the Town of Goderich, that he file within thirty days from such date— that is by August 6th, 1962, an Information Return on Form T4 for the year 1961, in accordance with Section 127 of the said Act.

(2) That the said Finlay Samis, on the 7th, 8th and 9th of August, 1961, failed to file such information return on Form T4 for the year 1961, in accordance with Section 127 of the said Act.”

Section 44(2) of the Income Tax Act provides

1 . . . whether or not a return has been filed under subsection

(1) or (8), every person shall, on demand by registered letter from the Minister, file, within such reasonable time as may be stipulated in the registered letter, with the Minister, in prescribed form and containing prescribed information, a return of the income for the taxation year designated in the letter. ’ ’

In the case of A.-G. Canada v. Storey, 127 C.C.C. 36, the head- note in part reads as follows:

“On a charge of failing to file income tax return following a ‘demand by registered letter from the Minister’, as required by Section 44(2) of the Income Tax Act, . . it is not necessary to prove that accused in fact received the letter once it is shown that such letter was mailed to the address of the accused and there is no evidence that it had not been received by him. In such a case there is a presumption that the accused received the letter and he is obliged to rebut the prima facie case by evidence showing in fact that he did not receive the letter.”

At the close of the Crown’s case, undoubtedly a prima facie case had been made against the accused and without any evidence that in circumstances herein indicated, the accused did not make the return. However, in this case, the defendant’s wife, Edith Claire Samis, received on July 7, 1962, at the Post Office of Goderich, a letter from Kitchener. This is confirmed by Exhibit 2 herein, which is a certificate from the Postmaster at Goderich of entries of a portion of the “record of registered articles received during July, 1962”. This certificate shows the Kitchener register number to have been 157. Exhibit 3 was produced and filed, which is the letter from the District Taxation office at Kitchener bearing register number 157, which letter was addressed to Finlay Samis at 87 Kingston Street, Goderich, Ontario, but which apparently was never opened and is undoubtedly the communication referred to in the affidavit of John Bagg as it bears the Kitchener register number. While at the material time in question the accused and his family ordinarily resided in Goderich, the evidence on behalf of the defence is that during July, 1962, they were occupying a summer home at Bayfield, Ontario. Mrs. Samis’ evidence was to the effect that on picking the mail up at the Goderich Post Office on July 7, 1962, she took it to Bayfield and the day’s mail was handed over to her teenage daughter. The teenage daugther, Linda Samis, also gave evidence that she received the day’s mail as alleged by her mother and placed it in a book she was reading at that time.

The accused himself gave evidence that he did not receive the communication referred to in Mr. Bagg’s affidavit and knew nothing about it until he received the summons to attend before the magistrate. On receipt of the summons he caused a search to be made and the letter was located in the book as the daughter had alleged.

Undoubtedly, the accused’s wife was his agent for the purpose of receiving mail from the Post Office as this apparently was their usual custom and indeed there was no denial of her authority as agent to receive mail addressed to the accused. It therefore remains to be determined if notice to the accused’s agent is in law notice to him as principal.

Halsbury’s Laws of England, 3rd ed., Volume 1, para. 312, sets out the following under the heading of ‘‘ Notice to Agent’’:

‘ ‘ Where an agent, in the course of any transaction in which he is employed on his principal’s behalf, receives notice or acquires knowledge of any fact material to such transaction, under such circumstances that it is his duty to communicate it to the principal, the principal is precluded, as regards the persons who are parties to such transaction, from relying upon his own ignorance of such fact, and is taken to have received notice of it from the agent at the time when he should have received it, if the agent had performed his duty with due diligence.”

This rule, however, would appear to apply to civil matters.

Under para. 508 of the said volume of Halsbury, dealing with “Liability for wrongful acts of agents’’, under a sub-heading of ‘‘Criminal Liability’’, the law is stated as follows:

“No act or default on the part of an agent imposes, as a general rule, any criminal liability on the principal in respect thereof, unless the principal himself takes part in, authorises, or connives at, the commission of such act or default.”

Para. 508, however, sets out that this rule is, however, subject to two exceptions :

“First, the principal may be criminally liable for a public nuisance committed by him through the instrumentality of his agent. Secondly, a particular statute may impose a criminal liability upon the principal in respect of the act or defaults of his agents by its express terms or by implication. These exceptions do not apply where negligence is an essential ingredient in the offence; then the principal is not criminally responsible for the negligence of his agent.”

I believe I have, therefore, to determine whether or not the Income Tax Act, as it applies to giving notice, or making a demand by registered mail, falls within the secondly mentioned exception to the general rule applying under ‘‘Criminal Liability”.

Section 127 of the Income Tax Act provides for the giving of notice by ‘‘registered letter” and Section 136(5) provides for the proof of service by mail of a ‘‘registered letter’’. I think, therefore, that we may look at the Post Office Act, R.S.C. 1952,

e. 212, Section 2(1) (b) (iii).

“In this Act ‘delivery’ as applied to mail, means delivered to the addresses thereof and, for the purpose of this Act, leaving mail with the addressee or his servant or agent or with any other person considered to be authorized to receive mail, according to the usual manner of delivering that addressee’s mail, is deemed to be delivered to the addressee.”

I believe that Parliament, in enacting the Income Tax Act would be deemed to have relied on the Post Office Act for the purpose of a definition of ‘‘delivery’’, and that therefore under the circumstances as herein indicated, it must be concluded that “delivery” was made to the accused, the addressee of the demand. To hold otherwise and to put the onus on the Department of National Revenue to prove actual delivery would amount to requiring the Department to make personal service.

For these reasons, I find the accused guilty of each offence as charged and I confirm the penalty as imposed by the magistrate of $25 fine on each charge.

On the charge for having failed on August 7, 1962, to have filed his return, the fine will be $25 and costs of $42.40, or 4 days in jail, monies paid into court to apply- to costs. For failing to file an income tax return on each of August 8th and 9th, 1962, the penalty will be a fine of $25 or 4 days in jail. This amounts, accordingly to $117.40 with a total possible alternative of 12 days in jail.