Schulman, J. After entering a plea of not guilty, but before and evidence was adduced, counsel for the accused moved for two orders:
1. quashing all charges for delay; and
2. prohibiting Mr. Mackoff or the Attorney’ General of Canada from conducting the prosecution of count 3 of the indictment.
When the trial resumed on April 5, 1994, I advised the parties that I am dismissing the second branch of the motion and that I am deferring consideration of the first part of the motion until hearing at least part of the evidence.
By information sworn in November 1989, the accused was charged with 249 counts, 248 of which allege breaches of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 19707172, c. 63), and one fraud under s. 380 of the Criminal Code, R.S.C. 1985, c. C-42. The information was sworn by Phil Seagle, an employee of the Minister of National Revenue. There is on file in this court a document signed by the Attorney General of Manitoba which provides as follows:
The Attorney General of Manitoba hereby authorizes the Attorney General of Canada to prosecute the Criminal Code charge set out in count 3 in the attached copy of an information sworn by Phil Seagle, of the City of Vancouver, in the Province of British Columbia, an officer of the Department of National Revenue, as follows:
Count 3
Dated at Winnipeg, this 4th day of December, 1989.
J. C. McCrae, Attorney General of Manitoba
On January 12, 1990, a direct indictment was preferred against the accused on exactly the same charges. The indictment contains 249 counts. At the bottom of the indictment the following is set out:
Paul William Halprin, counsel for the Attorney General of Canada and, with respect to Count 3, Counsel for the Attorney General of Manitoba
I hereby consent to this preferral of Counts 1, 2 and 4 to 249, inclusive of this Indictment.
John Tait, Deputy Attorney General of Canada
I hereby consent to this preferral of Count 3 of this Indictment on my behalf. James C. McCrae, Attorney General of the Province of Manitoba
DEPARTMENT OF JUSTICE
On March 7, 1990, the Attorney General of Manitoba provided the following authorization (Exhibit 1):
The Attorney General of Manitoba hereby authorizes the Attorney General of Canada to prosecute the Criminal Code charge set out in count 3 in the attached copy of an Indictment signed on January 12, 1990, by Paul William Halprin, counsel for the Attorney General of Canada and, with respect to count 3, counsel for the Attorney General of Manitoba, as follows:
Count 3:
Did on or about March 7, 1986, defraud or attempt to defraud Her Majesty the Queen in right of Canada of the sum of $7,942,393.13 by deceit, falsehood, or other fraudulent means, by issuing false Scientific Research and Experimental Development Information Returns to the limited partners of Organic Research Limited Partnership, certifying that expenditures in the amount of $18,923,619.00 were incurred by Organic Research Limited Partnership for scientific research and experimental development within the meaning of subsection 37(1) of the Income Tax Act, R.S.C. 1952, Chapter 148, as amended, which Returns were deceitful, false or fraudulent in that Organic Research Limited Partnership did not incur expenditures for the purpose of scientific research and experimental development in the amount stated, and did thereby commit an offence contrary to paragraph 338(l)(a) of the Criminal Code, R.S.C. 1970, Chapter C-34 [now paragraph 38O(l)(a) of the Criminal Code, R.S.C. 1985, Chapter C-461 ].
DATED at Winnipeg, this 7th day of March, 1990.
J. C. McCrae, Attorney General of Manitoba
At a pre-trial conference held on February 7, 1994. counsel for the crown advised that the crown will be proceeding on four counts, namely, counts 1, 2 and 3 and one other, with the remaining counts being stayed. Counts 4 to 249 are identical to one another, except that they refer to investments by different investors. The trial, which has resumed, is dealing with the following counts:
Count 1: Did between December 31, 1984 and May 3, 1986, wilfully evade or attempt to evade compliance with the Income Tax Act, R.S.C. 1952, Chapter 148, as amended, or payment of taxes in the amount of $7,942,393.13 imposed by the said Act for the 1985 taxation year on the limited partners of Organic Research Limited Partnership, by providing to the said limited partners false or deceptive documentation including T661 Scientific Research and Experimental Development Information Returns for Organic Research Limited Partnership and did thereby commit an offence contrary to paragraph 239(1 )(d) of the said Act.
Count 2: Did on or about March 7, 1986, unlawfully make, or participate in, assent to or acquiesce in the making of a false or deceptive statement in T661 Scientific Research and Experimental Development Information Returns of Organic Research Limited Partnership for the 1985 taxation year, filed as required by the Income Tax Act, R.S.C. 1952, Chapter 148, as amended, by stating therein that ’Total Current Expenditures Paid In The Year’ for scientific research and experimental development was the amount of $18,923,619.00, and did thereby commit an offence contrary to paragraph 239(1 )(a) of the said Act.
Count 3: Did on or about March 7, 1986, defraud or attempt to defraud Her Majesty The Queen in right of Canada of the sum of $7,942,393.13 by deceit, falsehood, or other fraudulent means, by issuing false Scientific Research and Experimental Development Information Returns to the limited partners of Organic Research Limited Partnership, certifying that expenditures in the amount of $18,923,619.00 were incurred by Organic Research Limited Partnership for scientific research and experimental development within the meaning of Section 37(1) of the Income Tax Act, R.S.C. 1952, Chapter 148, as amended, which Returns were deceitful, false or fraudulent in that Organic Research Limited Partnership did not incur expenditures for the purpose of scientific research and experimental development in the amount stated, and did thereby commit an offence contrary to section 380(1 )(a) of the Criminal Code, R.S.C. 1985, Chapter C-42.
Count 191: Did on or about April 30, 1986, unlawfully participate in, assent to or acquiesce in the making of a false statement in the return of income of Edward H. Purvis for the 1985 taxation year, filed as required by the Income Tax Act, R.S.C. 1952, Chapter 148, as amended, by providing false documentation for the purpose of preparing and filing the said return of income, resulting in the Total Income reported being understated by $480,000.00 and the Investment Tax Credit reported being overstated by $120,000.00, contrary to paragraph 239(1 )(a) of the said Act.
Counsel for the accused made the following submission: The Attorney General of Canada has the exclusive authority to prosecute charges under the Income Tax Act. The Attorney General of Manitoba has the exclusive authority to prosecute charges under the Criminal Code. Either Attorney General may properly delegate a counsel or an agent for the prosecution of a charge within his or her exclusive sphere of authority, but in order to do so there must be a proper written delegation which states that this prosecution is being conducted by X "as my agent". Referring to Exhibit 1, defence counsel states that the document merely authorizes the Attorney General to prosecute count 3, but it does not state that the prosecution is to be done as agent for the Attorney General of Manitoba. Pointing to a number of circumstances which have taken place since the authorization was signed, he argued that there has been no valid authorization here, but rather the fact is that the Attorney General of Manitoba abdicated his responsibility, and the Attorney General of Canada is prosecuting a case which constitutionally it is not in his power to prosecute. The circumstances to which Mr. Wolch referred are as follows: 1. On March 21, 1990, the Honourable James C. McCrae, Attorney General of Manitoba, wrote a letter to Mrs. Seona Wilder, the accused’s wife, (Exhibit 190) in response to a letter she
had written to him, stating in part:
Ordinarily all prosecutions within the Province of Manitoba under the Criminal Code of Canada would be under my authority and responsibility. However, on this occasion because 248 counts are under the Federal Income Tax Act and only count 3 dealt with the Criminal Code of Canada, it was determined, in order that there be a uniformity of the handling of this prosecution, that counsel for the Attorney General of Canada would also prosecute count 3 and I accordingly authorized and consented to this procedure.
In view of the fact that your correspondence to me questions the prosecution of your husband on any charges, I have taken the liberty of turning your correspondence over to the appropriate representative of the Attorney General of Canada so that you may obtain a response from that office.
2. Between May 1990 and July 1993, William Morton, Q.C., a Senior Crown Attorney employed by the Manitoba Department of Justice, served as Commissioner in this matter, as the evidence of 11 witnesses was taken during 24 days in various parts of the United States pursuant to orders made by my colleague Krindle J. on April 10, 1990, September 4, 1990, and September 16, 1991. Mr. Morton was so appointed with the concurrence of defence counsel, but the point made is that the Attorney General of Manitoba must have dissociated himself from the prosecution if a senior official of his Department were to fill the objective position of Commissioner.
3. Since March 7, 1990, neither the Minister nor any member of his staff have been directly involved in the prosecution. No written reports have been made to the Minister or his Department concerning progress in the matter. The Minister bears no costs in relation to the prosecution (Exhibits 188 and 189).
Counsel for the crown submitted that Exhibit 1 is all that is required in the way of a written authorization. He advised the court that his instructions come from both the Attorney General of Canada and the Attorney General of Manitoba. He stated that if he were to consider entering a stay of proceedings to count 3 he would first have to consult with the Attorney General of Manitoba, and if, after trial of count 3 he wished to conduct an appeal, he would have to obtain authority from the Attorney General of Manitoba for doing so.
The word "authorization" has at least two meanings: one which involves handing over authority to another person who does not otherwise have the authority to do something; and the other which involves handing over the authority to act as agent of the giver of the authority. When a police officer applies to a judge of this court for permission to wiretap pursuant to s. 185 of the Criminal Code, he or she obtains an authorization, and in that context the police officer is not acting as an agent of this court. The police department is charged with the responsibility of investigating crimes. This court is, by statute, empowered to give to a police officer authority which he or she does not otherwise hold. In my opinion, that is not the sense in which the word "authorize” is used in Exhibit 1. By our Constitution, the Attorney General of Manitoba has the sole responsibility to conduct prosecutions for alleged breaches of the Criminal Code. The Attorney General of Manitoba cannot personally conduct the numerous prosecutions which take place in Manitoba from day to day. When the Attorney General authorizes someone to conduct a prosecution, it is implicit that the authority is given to prosecute as agent or counsel for the Attorney General of Manitoba. That is the situation which I find exists here.
Both counsel referred to the recently-reported decision of R. v. Luz (1988), 5 O.R. (3d) 52 (H.C.J.). In that case, Campbell J. held that a letter from a crown attorney stating at page O.R. 56, "I hereby delegate to you ... the authority to prosecute” was a sufficient delegation to a federal crown attorney to prosecute a Criminal Code offence in the same information, along with a related narcotics offence. There was, in the Luz case, no reference to "as agent of". In the Luz case, Campbell J. made reference to three factors as being indicative of a valid delegation: firstly, that the provincial Attorney General remain accountable to the legislature for the way the prosecution is conducted; secondly, that there be a line of communication between the Attorney General and the prosecutor; as required, throughout the case; and thirdly, that the Attorney General retains ultimate control over the prosecution.
In my view, the decisive feature of the third factor is: Does the provincial Attorney General retain the ultimate authority to decide whether the charges be stayed, and does he or she retain ultimate authority in order to decide whether or not an appeal will be conducted? I find that the Attorney General of Manitoba has, at all material times, been accountable to the Legislature, had a line of communication with Mr. Mackoff or Mr. Halprin, his predecessor, and had ultimate control over the prosecution of count 3. I find that Exhibit 1 clothes the Attorney General of Canada and Mr. Mackoff with appropriate authority to conduct the prosecution of count 3 on behalf of the Attorney General of Manitoba.
I have reviewed the circumstances referred to by defence counsel as indicative of the fact that the Attorney General of Manitoba abdicated his responsibility in this case. I find that there was no abdication and that there was a valid delegation. If the Attorney General of Manitoba and his advisors did not, in this instance, realize that he retained ultimate control over the prosecution, the fact remains that he did. The above-mentioned circumstances do not warrant a finding to the contrary.
For the above-mentioned reasons, this motion is dismissed.
Motion dismissed.