R. v. Medicine Hat Greenhouses Ltd. and German, (1981) 26 A.R. 617 (CA)

• Judge: Lieberman, Harradence and Stevenson, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: April 01, 1981
• Citations: (1981), 26 A.R. 617 (CA);1981 ABCA 114;[1981] 3 WWR 587;26 AR 617;59 CCC (2d) 257;[1981] CTC 141;[1981] AJ No 895 (QL);6 WCB 15;81 DTC 5100

R. v. Medicine Hat Greenhouses Ltd. (1981), 26 A.R. 617 (CA)

MLB headnote and full text

R. v. Medicine Hat Greenhouses Ltd. and German

(13223)

Indexed As: R. v. Medicine Hat Greenhouses Ltd. and German

Alberta Court of Appeal

Lieberman, Harradence and Stevenson, JJ.A.

April 1, 1981.

Summary:

This case arose out of charges against a company and officer for tax evasion contrary to s. 239(1)(d) of the Income Tax Act. The charges arose from expenses incurred by the officer and his family. The expenses were meticulously documented in the company books and deducted as business expenses. The expenses, which were incurred between December 1964 and March 1970, related to trips taken by the officer and his family and to two camper vehicles and a motorbike. The company books were audited each year and unqualified auditors' certificates issued. The Crown alleged that the company and officer were in a scheme to bury personal expenses among business expenses. The Alberta Provincial Court in a judgment reported 24 A.R. 39 dismissed the charges against both accused and held that the Crown failed to prove mens rea or an intention to evade taxes. The Alberta Court of Queen's Bench in a judgment unreported in this series of reports allowed the Crown's appeal and convicted both accused on the ground that the trial judge erred in failing to place an onus on the accused to show that the deductions were legitimate business expenses. The accused appealed.

The Alberta Court of Appeal allowed the appeal and restored the acquittals and held that the burden of proof remained on the Crown to prove all elements of the charge including the nature of the expenses deducted.

Criminal Law - Topic 7543

Summary conviction proceedings - Appeal on record to court of appeal - Scope of appeal - Criminal Code of Canada, R.S.C. 1970, c. C-34, s. 748 - Harradence, J.A., of the Alberta Court of Appeal in a minority opinion stated that an appeal on the record to a court of appeal from an acquittal lay on a question of fact and stated that the test to be applied by the Court of Appeal was whether the trial judge's decision was unreasonable - The majority, however, was unwilling to decide the question - See paragraphs 24 to 30 and 47 to 48.

Income Tax - Topic 9663

Tax evasion - Evidence - Burden of proof - The Alberta Court of Appeal held that on a charge of income tax evasion under s. 239(1)(d) of the Income Tax Act the burden of proof remained on the Crown to prove all elements of the charge, including the nature of the expenses deducted - The court held that once the deductions were proved the burden of proof did not shift to the accused to show that they were legitimate business expenses - See paragraphs 15 to 23 and 45 to 47.

Cases Noticed:

R. v. Edwards, [1975] 1 Q.B. 27, refd to. [para. 18].

R. v. Volk, [1973] 6 W.W.R. 29, refd to. [para. 18].

R. v. Antonelli (1977), 38 C.C.C.(2d) 206, consd. [paras. 28, 47].

R. v. Nelson, [1979] 3 W.W.R. 97, consd. [para. 29].

R. v. Purves and Purves, [1980] 1 W.W.R. 148; 3 Man.R.(2d) 88; 50 C.C.C.(2d) 211, appld. [paras. 29, 47].

R. v. Corbett, [1975] 2 S.C.R. 275; 42 D.L.R.(3d) 142; 14 C.C.C.(2d) 385, consd. [paras. 33, 42].

R. v. Ponsford, 41 C.C.C.(2d) 433, consd. [para. 34].

R. v. Colbeck, 42 C.C.C.(2d) 117, consd. [para. 35].

R. v. Zaritec Industries Ltd. et al. (1975), 24 C.C.C.(2d) 180, refd to. [para. 40].

Ciglen v. The Queen, [1970] 4 C.C.C. 83, consd. [para. 40].

Statutes Noticed:

Criminal Code of Canada, R.S.C. 1970, c. C-34, sect. 603(1) [para. 31]; sect. 613(1)(a)(i) [para. 32]; sect. 613(4) [para. 36]; sect. 730 [para. 17]; sect. 748 [para. 27]; sect. 755(1) [para. 37].

Income Tax Act, R.S.C. 1952, c. 148, sect. 12 [para. 11].

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 239(1) [para. 1]; sect. 242 [para. 3].

Counsel:

W.J. Major and J.P. Stopa, for the respondent;

W.E. Code, Q.C., for the appellants.

This case was heard before LIEBERMAN, HARRADENCE and STEVENSON, JJ.A., of the Alberta Court of Appeal.

On April 1, 1981, the judgment of the Court of Appeal was delivered and the following opinions were filed:

HARRADENCE, J.A. - see paragraphs 1 to 44;

STEVENSON, J.A. - see paragraphs 45 to 49.

LIEBERMAN, J.A., concurred with STEVENSON, J.A.