J. 2001 SKQB 332 Q.B.G. A.D. 2000 No. 3442 J.C. R. IN THE QUEEN'S BENCH JUDICIAL CENTRE OF REGINA BETWEEN: GUNNER INDUSTRIES LTD. and CLINT KIMERY and HER MAJESTY THE QUEEN RESPONDENT David G. MacKay for the appellants Wade E. McBride for the respondent JUDGMENT McLELLAN J. June 28, 2001 [1] The appellants appeal their convictions for the following two offences under the Excise Tax Act, R.S.C. 1985, c. E-15, as am. (the "Act"): Count #1 THAT GUNNER INDUSTRIES LTD. of 682 Adams Street, Regina, Saskatchewan and Clint Kimery of 682 Adams Street, Regina, Saskatchewan, on or about the 16th day of November, A.D. 1999, at Regina, in the Province of Saskatchewan, did, while operating as Goods and Services Tax Registrant, and while subject to the provisions of the Excise Tax Act, unlawfully fail to file Goods and Services Tax Returns as required by section 282 thereof, for the return for the period January 1, 1999 to March 31, 1999; thereby committing an offence contrary to section 326 of the Excise Tax Act. Count #2 THAT GUNNER INDUSTRIES LTD. of 682 Adams Street, Regina, Saskatchewan and Clint Kimery of 682 Adams Street, Regina, Saskatchewan, on or about the 16th day of November, A.D. 1999, at Regina, in the Province of Saskatchewan, did, while operating as Goods and Services Tax Registrant, and while subject to the provisions of the Excise Tax Act, unlawfully fail to file Goods and Services Tax Returns as required by section 282 thereof, for the return for the period April 1, 1999 to June 30, 1999; thereby committing an offence contrary to section 326 of the Excise Tax Act. [2] The appellants received the minimum fines relating to each count in the sum of $1,000.00. [3] The appellants raised a number of grounds for the appeal which may be summarized as follows: The Court lacked jurisdiction to proceed with the matter by reason of alleged defects in the summons or alternatively the appellants were not properly advised of the charges they were facing contrary to s. 11(a) of the Canadian Charter of Rights and Freedoms; The appellant Kimery should not have been convicted of an offence allegedly contrary to s. 330 of the Act when the information set out an offence contrary to s. 326 of the Act; There was no evidence to justify the learned Provincial Court judge\'s finding that returns were not filed; That there was unreasonable delay which compromised the appellants\' right to a fair trial; That the demand for a return which was filed was invalid as there was no proof that it was signed by some person authorized to sign on the Minister\'s behalf. II The Summons [4] Did the Provincial Court lack jurisdiction to try the appellants? [5] In R. v. Peters (1981), 1981 CanLII 2491 (SK QB), 12 Sask. R. 312 (Q.B.), Cameron J. (as he then was) was faced with similar argument. He relied on the decision of R. v. Hughes (1879) Q.B. 614, to hold that the defect in the summons before him did not destroy the jurisdiction of the trial judge. Cameron J. pointed out at p. 315: In R. v. Hughes (1879), Q.B. 614, (cited with approval in Lowe v. Azzopardi, 1976 CanLII 963 (SK CA), [1976] W.W.R. 377 (Sask. C.A.), and R. v. Gougeon (1981), 1980 CanLII 2842 (ON CA), 55 C.C.C. (2d) 218 (Ont. C.A.), it was said at p. 625 in respect of case in which the accused was brought before the court "upon as illegal warrant as ever was issued": Process is not essential to the jurisdiction of the justices to hear and adjudicate. It is but the proceeding adopted to compel the appearance of the accused to answer the information already duly laid, without which no hearing in the nature of trial could take place .... [6] Any irregularities or defect as to the form or service of the summons are of no moment. The record clearly indicates that the appellants appeared, pleaded and proceeded with the trial. It must also be noted that s. 822(7) of the Criminal Code (which applies to appeals from summary conviction court) provides that: 822(7) The following provisions apply in respect of appeals under subsection (4): (a) where an appeal is based on an objection to an information or any process, judgment shall not be given in favour of the appellant (i) for any alleged defect therein in substance or in form, or (ii) for any variance between the information or process and the evidence adduced at trial, unless it is shown (iii) that the objection was taken at trial, and (iv) that an adjournment of the trial was refused notwithstanding that the variance referred to in subparagraph (ii) had deceived or misled the appellant .... The record indicates that there was no objection taken by the appellants. [7] The appellant Kimery never requested an adjournment nor was there any suggestion that he desired to be represented by counsel. [8] There is nothing in the record to suggest that Kimery was confused or misled by the proceedings, nor can there be any suggestion that Kimery did not understand the nature of the charges the appellants were facing. Furthermore, there is no merit in the suggestion by the appellants that the trial judge somehow failed in his duty by reason of the fact that the accused was not represented by counsel. The trial judge did everything required of him in the circumstances. [9] Was the appellant Kimery wrongfully convicted under s. 330 of the Act? [10] The offence that was before the Court was that both the corporation and Kimery failed to file the appropriate returns required to be filed on behalf of the business carried on by Gunner Industries Ltd. [11] Sections 326 and 330 provide as follows: 326.(1) Every person who fails to file or make return as and when required by or under this Part or regulation made under this Part or who fails to comply with an obligation under subsection 286(2) or section 288, 289 or 292 or an order made under subsection (2) is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to (a) fine of not less than $1,000.00 and not more than $25,000; or (b) both fine referred to in paragraph (a) and imprisonment for term not exceeding twelve months. 330. Where person other than an individual is guilty of an offence under this Part, every officer, director or agent of the person who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is party to and guilty of the offence and liable on conviction to the punishment provided for the offence, whether the person has been prosecuted or convicted. [12] I agree with Mr. McBride that s. 330 does not set out a separate offence but merely clarifies the circumstances under which a director can be convicted of the same offence as a party. This is no different than the situation of an accused being charged with a substantive offence under the Criminal Code on the theory that he is a party by virtue of s. 21 of the Criminal Code. The person is charged as though he committed the offence and the Crown is not required to stipulate precisely whether he committed the offence as principal or party. The Court may convict if it finds that the accused participated either as principal or party. [13] Section 330 is an analogous provision which contemplates that, where corporation is guilty of an offence of failing to file the appropriate returns director may be convicted as party provided that the director either directed, assented to, acquiesced in, or participated in the commission of the offence. [14] There was evidence to support the trial judge's finding that Kimery was guilty under s. 330. During the period in question where the returns were required to be filed, Kimery was the sole director of the corporation. It was open to the trial judge to find that Kimery must have directly participated in or at the least acquiesced in the failure to file the appropriate GST return. [15] Was there evidence to support the trial judge's finding that no returns were filed? [16] The appellants filed blank returns. The trial judge found as a fact that there was no information relating to GST in any of the documents which were filed. I agree with the trial judge that the returns purportedly filed were not merely defective but did not qualify as returns at all. [17] The appellants did not attempt to comply with the requirements of the Act. The returns were neither informative nor responsive to those requirements. [18] In short, there was evidence to support the finding by the trial judge that the appellants\' failed to file returns as required by s. 326. Unreasonable Delay [19] The argument that the appellants were denied the right to a trial within a reasonable time as required by s. 11(b) of the Charter is without merit. [20] It is trite law that the right to be tried within reasonable time is right which arises only after an individual has been charged. Pre-charge delay is not a factor which can be taken into account at this stage. [21] agree with the Crown that before proceeding with criminal prosecution it was appropriate for the enforcement officials of the Regina Tax Services Office to attempt to ensure compliance with less strenuous and severe measures such as correspondence and demands. The appellants having failed to rectify the omission after such reasonable opportunities cannot now be heard to say that they were somehow prejudiced. [22] Once charges were laid the matter proceeded to trial within a reasonable period of time. VI No Valid Proof of Demand [23] Marianne Fitzgerald was director of the Regina Tax Services Office, Department of National Revenue, during the time period in question. The affidavit of service filed as exhibit P-4 has annexed to it as exhibit "A", true copy of the "Demand for GST/HST Return(s)" addressed to Gunner Industries Ltd. and Clint A. Kimery (being director of Gunner Industries Ltd.). facsimile of Ms. Fitzgerald's signature appears on the demand as does the title of her position as Director, Regina Tax Services Office. The demand was served on October 15, 1999. [24] The appellant argues that the Crown has tendered no evidence to prove that the field position of "Director Tax Services Office" is authorized to exercise the powers and perform the duties of the Minister. [25] The relevant sections of the Act state as follows: 282 The Minister may, on demand served personally or by registered or certified mail, require any person to file, within such reasonable time as may be stipulated in the demand, return under this Part for such period or transaction as may be designated in the demand. 275(1) The Minister shall administer and enforce this Part and the Commissioner may exercise all the powers and perform the duties of the Minister under this Part. (2) Such officers, agents and employees as are necessary to administer and enforce this Part shall be appointed or employed in the manner authorized by law. (3) The Minister may authorize designated officer or agent or class of officers or agents to exercise powers to perform duties of the Minister under this Part. [26] Noble J. was faced with similar argument in R. v. Swyryda (1981), 1981 CanLII 2095 (SK QB), 11 Sask. R. 188 (Q.B.). In that case, the accused appealed from income tax convictions on the basis that the requirement letter sent to him was signed, not by the individual named in the letter, R. J. MacIssac, Director-Taxation of the Saskatoon district office, but in his absence by the Chief of Verification and Collections, one Larry Potven. This signature was authorized by policy in the Saskatoon office. [27] The accused argued that the Chief of Verifications and Collections was not authorized by the Income Tax Act, R.S.C. 1952, c. 148 (now repealed), to sign the requirement letter. [28] Noble J. decided that s. 244(13) of the Income Tax Act provided definitive answer to the issue of authorization. He stated at p. 192: In my opinion, the fact that the letter of requirement was signed with the handwritten words of Mr. Potven using the name "R. J. MacIssac" over the typed or printed designation of "Director-Taxation" is sufficient to bring the document within the type described in sec. 244(13). Nothing in that section says that the document must be personally executed by someone specifically designated by the Minister pursuant to the regulations. On the facts of this case the requirement letter or demand was made during the ordinary course of the administration and enforcement of the Act by officials of the department. As has been pointed out number of times by our courts, administrative functions can be delegated, for if it were otherwise, in modern government it would be difficult to accomplish anything.... [29] Section 244(13) of the Income Tax Act, R.S.C. 1985, c. (5th Supp.), as am. provides: 244(13) Every document purporting to have been executed under, or in the course of the administration or enforcement of, this Act over the name in writing of the Minister, The Deputy Minister of National Revenue, the Commissioner of Customs and Revenue or an officer authorized to exercise power or perform duty of the Minister under this Act is deemed to have been signed, made and issued by the Minister, the Deputy Minister, the Commissioner or the officer unless it has been called in question by the Minister or by person acting for the Minister or Her Majesty. The corresponding subsection in the Act, is s. 335(8) and it reads in almost identical terms as follows: 335(8) Every document purporting to have been executed under or in the course of the administration or enforcement of this Part over the name in writing of the Minister, the Deputy Minister of National Revenue, the Commissioner or an officer authorized to exercise the powers or perform the duties of the Minister under this Part, shall be deemed to be document signed, made and issued by the Minister, the Deputy Minister, the Commissioner or the officer, unless it has been called in question by the Minister or person acting for the Minister or for Her Majesty in right of Canada. [30] The Alberta Court of Appeal recently approved of Noble J.'s decision in Swyryda, supra, in R. v. Ehli, 2000 ABCA 170 (CanLII); A.J. No. 706 (QL); 261 A.R. 178. In that case the taxpayer was convicted for having failed to comply with Ministerial demand under the Income Tax Act. One of the grounds of appeal was that the demands made of the taxpayer, pursuant to s. 231.1(1)(a) of the Income Tax Act constituted an unlawful subdelegation of authority by the Director-Taxation. The notice sent to the applicant was signed using facsimile stamp of the signature of the Director. The stamp had been affixed by an employee of the Canada Customs and Revenue Agency who had been authorized by the Director to prepare and issue documents such as the notice in question and had been permitted by the Director to use the facsimile signature stamp. [31] Berger J.A. quotes from Noble J.'s decision in Swyryda, supra, at paras. and and concludes at para. 8: have considered the very able submission of counsel for the Applicant to the effect that appellate pronouncement by full panel of this Court would settle the law. No Court, over the 19 year period since Swyryda, supra, was decided, has taken issue with the reasoning of Noble, J. The legislative enactment, in my opinion, leaves no doubt that Swyryda was, with respect, correctly decided. The question raised is not, in my opinion, of arguable merit nor matter of sufficient importance to warrant review by this Court. For these reasons, the application is refused. [32] Berger J.A. also pointed out that the Tax Court of Canada in Bancheri v. Canada (Minister of National Revenue-M.N.R.), [1999] T.C.J. No. 22 (QL) (T. Ct.) concluded that Swyryda was properly decided. [33] In my view the decision of Noble J. is complete answer to the argument advanced by the appellants. Furthermore, regard must be had to s. 24(2) of the Interpretation Act, R.S.C. 1985, c. I-21, as am. by S.S. 1992, c. 1, s. 89, which provides as follows: 24(2) Words directing or empowering minister of the Crown to do an act or thing, regardless of whether the act or thing is administrative, legislative or judicial, or otherwise applying to that minister as the holder of the office, include (a) minister acting for that minister, or, if the office is vacant, minister designated to act in the office by or under the authority of an order in council; (b) the successors of that minister in the office; (c) his or their deputy; and (d) notwithstanding paragraph (c), person appointed to serve, in the department or ministry of state over which the minister presides, in capacity appropriate to the doing of the act or thing, or to the words so applying. This statutory provision specifically gives implied powers to persons acting under the authority of minister of any Crown department over which that minister resides to undertake any act or thing on behalf of the minister if that person is acting in capacity appropriate to do the doing of that act or thing. [34] Section 24(2) appears to be codification of the common law frequently referred to as the Carltona principle based upon the English case Carltona, Ltd. v. Commissioners of Works and Others, [1943] All E.R. 560 (C.A.). In that case the court set forth the classic definition of the authority of those who perform the statutory responsibilities of Ministers of the Crown at p. 563: In the administration of government in this country the functions which are given to ministers (and constitutionally properly given to ministers because they are constitutionally responsible) are functions so multifarious that no minister could ever personally attend to them. To take the example of the present case no doubt there have been thousands of requisitions in this country by individual ministries. It cannot be supposed that this regulation meant that, in each case, the minister in person should direct his mind to the matter. The duties imposed upon ministers and the powers given to ministers are normally exercised under the authority of the ministers by responsible officials of the department. Public business could not be carried on if that were not the case. Constitutionally, the decision of such an official is, of course, the decision of the ministers. The minister is responsible. It is he who must answer before Parliament for anything that his officials have done under his authority, and, if for an important matter he selected an official of such junior standing that he could not be expected competently to perform the work, the minister would have to answer for that in Parliament. The whole system of departmental organisation and administration is based on the view that ministers, being responsible to Parliament, will see that important duties are committed to experienced officials. If they do not do that, Parliament is the place where complaint must be made against them. [Emphasis added] [35] The Carltona case was followed by the Supreme Court of Canada in R. v. Harrison, 1976 CanLII (SCC), [1977] S.C.R. 238, where the court held that responsible and experienced officials will have the ability to exercise the Minister's authority in accomplishing Ministerial duties. [36] Henry T. Molot published review of the principles of Carltona in the light of 1992 amendments to the Interpretation Act. (See The Carltona Doctrine and the Recent Amendments to the Interpretation Act, (1994), 26 Ottawa Law Rev. 257). As to which officials may exercise the Minister's authority, Molot makes the following observations at pp. 272-3: Who then within department may exercise the Minister's powers on the basis of Carltona? As noted above, the cases have placed general limits on which officials may act. So, according to Carltona, the officials have to be "responsible"; according to Golden Chemical, "appropriate officials"; and according to Harrison, "departmental officials of experience and competence". [37] The question then emerges: Does this Ministerial authority of an appropriate official have to be documented in order to be valid? Molot, at p. 273, thinks not: ... Therefore, unlike delegation of authority where evidence is necessary to show that the power in question had been delegated to the person purporting to exercise that power, the Carltona principle operates without the need for documentary or other evidentiary links in the chain of authority between the Minister and the departmental official acting for and on his or her behalf. agree. The authority in those cases is implicit, it would be different if the authority was explicit. [38] Molot concludes at p. 275: ... Therefore, the Carltona principle ordinarily will enable departmental official to exercise those powers, duties and functions of that department's Minister which are "incidental and appropriate to [the] functions" of that official.... [39] The broad principles set forth in Carltona, supra, have been restricted in subsequent decisions. In Bancheri, supra, Porter T.C.J. held that the Carlton principle would not allow for an implicit scheme of delegation of authority to override an explicit statutory or regulatory one. He correctly points out at para. [45] ... that in making provision for the Minister to make regulations providing for the delegation of his powers and duties, with the consent of the Governor General in Council, Parliament intended to put the brakes on the otherwise generally recognized powers of delegation, and those brakes were applied in this case by the promulgation of such regulations. It would be farce to require the Minister to have the consent of the Governor General in Council to make regulations delegating his powers and at the same [time] to allow the person, to whom he has so delegated, to re-delegate those same powers without more ado. In such situation the designate would have more authority to delegate than the Minister himself, and clearly that could not have been within the contemplation of Parliament. [40] He also points out that the Interpretation Act does not override an explicit statutory or regulatory delegation of authority. It operates in the general scheme of things and incorporates the common law doctrine as enunciated in R. v. Harrison, supra, (para. 46). [41] Porter T.C.J. makes reference to the decision of Gunn J. in Yorkton Restaurant Venture Capital Corp. v. Government of Saskatchewan (Minister of Economic Development) (1994), 1994 CanLII 5223 (SK QB), 118 D.L.R. (4th) 735 (Q.B.). [42] Counsel for the appellants argues that Gunn J. takes view, on the delegation of Ministerial authority, contrary to that expressed by Noble J. in R. v. Swyryda, supra. disagree. Gunn J. makes the following statement at p. 749: Delegation of authority or power may be explicit or implicit. The courts have been prepared to recognize the implicit power of delegation by Ministers who are unable personally to solve all problems that might arise in applying the Acts for which they are responsible. However, more caution must be exercised in the review of implicit delegation by Deputy Ministers and agencies, particularly when the power sought to be exercised involves an element of judgment, discretion and the rights of citizens. [43] The Act under consideration by Gunn J. did not explicitly provide any authority for express delegation. However, she pointed out that the Interpretation Act, 1993, S.S. 1993, c. I-11.1, which was in force at that time, provided for delegation to the Deputy Minister but did not provide any authority for further delegation by the Deputy Minister. In that case revocation of registration under The Venture Capital Tax Credit Act, S.S. 1983-84, c. 4.1 (now repealed), was not signed by either the Minister or his Deputy. [44] In setting aside the revocation, Gunn J. placed much emphasis on the discretionary powers of the Minister and the fact that the Act purports to severely limit any rights of appeal from the Minister. In other words, she was not dealing with an administrative act such as sending notice or request to file return in compliance with the relevant statutory requirements. [45] It must also be noted that The Interpretation Act, 1995, S.S. 1995, c. I-11.2 as am., now contains the following provision: 23(2) Where an enactment directs or empowers minister of the Crown to do an act or thing, that act or thing may be done on the minister's behalf by any person appointed to serve in the department over which the minister presides if: (a) the minister has, in writing, authorized that person, by name or by office, to do the act or thing; or (b) that person is appointed to serve in capacity appropriate to the doing of the act or thing whether or not he or she, or any other person, was authorized by the minister to do the act or thing. [46] The service of the demand in this case was not part of an explicit statutory or regulatory scheme of delegation. It falls under an implicit scheme of delegation and sub-delegation as allowed at common law and in accordance with the Federal Interpretation Act. [47] The service of demand to file GST return upon business operation in the City of Regina is clearly an appropriate act to be performed by the Director of the Regina Tax Services Office. The execution and serving of such a demand is purely an administrative act. It does not require the exercise of a Ministerial discretion nor does it deprive any citizen of his or her rights by restricting any right to appeal. The notice simply requires a taxpayer to comply with the statutory requirements of the Act. The fact that the true copy of the notice annexed to the affidavit of service contains a facsimile signature is of no moment. CONCLUSION [48] I can find no error by the trial judge and the appeal is therefore dismissed.
An appeal of convictions on two offences under the Excise Tax Act. Grounds for the appeal were summarized as lack of jurisdiction to proceed because of alleged defects in the summons; alternatively, the appellants were not properly advised of the charges they were facing contrary to s.11(a) of the Charter; Kimery should not have been convicted of an offence contrary to s.330 when the information set out an offence contrary to s.326 of the Excise Tax Act; there was no evidence to justify a finding that the Goods and Services Tax returns were not filed; unreasonable delay compromised their right to a fair trial; the demand for a return which was filed was invalid as there was no proof that it was signed by a person authorized to sign on the Minister's behalf. HELD: The appeal was dismissed. 1)Any defects as to the form or service of the summons were unimportant. The record clearly indicated the appellants appeared, pleaded and proceeded with the trial and made no objection. Kimery never requested an adjournment nor was there any suggestion that he desired to be represented by counsel. There was nothing to suggest he was confused or misled by the proceedings or that he did not understand the nature of the charges the appellants were facing. The trial judge did everything required of him in the circumstances. 2)Section 330 does not set out a separate offence but merely clarifies the circumstances under which a director can be convicted of the same offence as a party. This is no different than the situation of an accused being charged with a substantive offence under the Criminal Code on the theory that he is a party by virtue of s.21 of the Criminal Code. Kimery was sole director of the corporation during the period in question when the returns were required to be filed. It was open to the trial judge to find he must have directly participated in or at least acquiesced in the failure to file the appropriate GST returns. 3)There was evidence to support the finding that the appellants failed to file returns as required by s.326. The appellants filed blank returns. The trial judge found as a fact that there was no information relating to GST in any of the documents.  It was agreed the returns were not merely defective but did not qualify as returns at all. 4)The appellants were not denied the right to a trial within a reasonable time as required by Charter s.11(b). Pre-charge delay is not a factor which can be taken into account at this stage. The appellant, having failed to rectify the omission after reasonable opportunities, could not now say they were somehow prejudiced. Once charges were laid, the matter proceeded to trial within a reasonable time.  5)The decision in R. v. Swyryda is a complete answer to the argument that the field position of 'Director Tax Services Office' was not authorized to exercise the powers and perform the duties of the Minister. Also, s.24(2) of the Interpretation Act gives implied powers to persons acting under the authority of a minister of any Crown department over which that minister resides to undertake any act or do anything on behalf of the minister if that person is acting in a capacity appropriate to do the act or thing. Section 24(2) appears to be a codification of the common law, frequently referred to as the Carltona principle based upon the 1943 English case, and followed in R. v. Harrison where the SCC held that responsible and experienced officials will have the ability to exercise the Minister's authority in accomplishing Ministerial duties. The service of the demand in this case was not part of an explicit statutory or regulatory scheme of delegation. It falls under an implicit scheme of delegation and sub-delegation as allowed at common law and in accordance with the Federal Interpretation Act.  The execution and service of a demand to file a GST return is purely an administrative act.  It does not require the exercise of Ministerial discretion nor does it deprive any citizen of any right by restricting a right to appeal. The notice simply requires a taxpayer to comply with the statutory requirements of the Act. The fact that the true copy of the notice annexed to the affidavit of service contains a facsimile signature is not significant.