Hirex Holdings Ltd. v. Canada
T-2258-92
Muldoon J.
7/10/96
8 pp.
Application for determination of questions of law-Plaintiff charged before British Columbia Provincial Court, along with one or two other individuals, with 45 counts of making false or deceptive statements, in applying for refunds, including one count of federal sales tax evasion in aggregate amount of $84,206.85, contrary to Excise Tax Act, ss. 97(2) and 108-Charges dismissed-Provincial Court Judge having found Excise Tax Act, s. 68.2 ambiguous and Act penal in nature, ambiguity resolved in favour of accused-Judge also found not proven beyong reasonable doubt any of accused intentionally made false or deceptive statements or wilfully attempted to evade or defeat federal sales tax-Appeal to B.C. Supreme Court withdrawn-Questions of law: (1) whether issue of plaintiff's entitlement to receive federal sales tax refunds under Excise Tax Act, s. 68.2 res judicata; (2) whether defendant estopped from assessing taxes, overpayments, penalties and/or interest against plaintiff; (3) whether defendant bound by findings and decision of B.C.P.C. Judge on interpretation of Excise Tax Act, s. 68.2 as affects plaintiff; (4) whether defendant bound by findings and decision of B.C.P.C. Judge on interpretation of Excise Tax Act, s. 68.2 as affects plaintiff; (4) whether defendant bound by findings and decision of B.C.P.C. Judge on acquittal of plaintiff on issue of intention to make false or deceptive statements or wilfully attempt to evade or defeat federal sales tax as alleged by Crown; (5) whether defendant's decision to assess taxes, overpayments, penalties and/or interest against plaintiff ought to be set aside-While res judicita or issue estoppel may well apply in case of conviction, it will not apply with respect to acquittal and especially acquittal grounded on lack of mens rea, lack of intent-Application of issue estoppel must conform with requirements set out by S.C.C. in Angle v. M.N.R., [1975] 2 S.C.R. 248-One requirement being: same question decided-Proof or inference of intent or mens rea beyond reasonable doubt not common issue: unique to trial of charged offences in Provincial Court-Ambiguity of s. 68.2 could be looked at again differently from P.C. Judge-Furthermore, degree of ambiguity needed to erode proof beyond reasonable doubt surely different from that which would displace balance of probabilities-Minister's reassessment raising issues not before Provincial Court under Act, ss. 81.1(1), 81.39(1) and 72(6)-Not same fundamental issue: in reassessment, issue whether Hirex legally entitled to rebates; in prosecution, issue whether certain statements "made" or "assented to", and in tax evasion charge, whether individual accused "wilfully attempted to evade federal sales tax"-Answers: (1) issue not res judicata; (2) defendant not so estopped; (3) defendant not bound on interpretation of Act, s. 68.2 as it affects plaintiff, only decisions binding Trial Division those of Federal Court of Appeal and of Supreme Court of Canada; (4) negative, beyond sphere of prosecution, i.e. autrefois; (5) negative; (6) statement of defence not to be struck out-Excise Tax Act, R.S.C., 1985, c. E-15, ss. 68.2 (as enacted by R.S.C., 1985 (2nd Supp.), c. 7, s. 34; S.C. 1993, c. 27, s. 2), 72(6) (as am. by R.S.C., 1985 (2nd Supp.), c. 7, ss. 27, 34; S.C. 1994, c. 29, s. 8), 81.1 (as enacted by R.S.C., 1985 (2nd Supp.), c. 7, s. 38), 81.39 (as enacted idem), 97(2) (as am. by R.S.C., 1985 (1st Supp.), c. 15, s. 35; (2nd Supp.), c. 7, s. 44), 108.