BENDAS, D.C.J. (orally) :—This is an appeal by way of trial de novo against the conviction of the appellant in the provincial Magistrates’ Court on the following charge :
That Heinz Hartmann, being an officer of Hartmann Construction Ltd., a body corporate, incorporated under the laws of the Province of Saskatchewan, participated in the Commission of an offence contrary to subsection (2) of Section 131 of the Income Tax Act, Revised Statutes of Canada 1952, chapter 148 as amended, by said corporation namely, on or before the 15th day of September 1968 at the City of Saskatoon in the Province of Saskatchewan, Hartmann Construction Ltd., failed to comply with subsection (1) of Section 47 of said Act by not remitting $1,525.50 to the Receiver General of Canada, which it had deducted from the salary, wages or other remuneration paid to its employees during the month of August 1968 as required by subsection (1) of Section 108 of the Income Tax Regulations; and Heinz Hartmann became party to and guilty of said offence by operation of Section 134 of said Act.
On February 3, 1969 Hartmann Construction Ltd. appeared in the Magistrates’ Court and, through its counsel, entered a plea of guilty to a charge of failing to comply with the provision of Section 47(1) (amended 1956, c. 39; 1960-61, c. 49) of the Income Tax Act, R.S.C. 1952, c. 148, and was convicted and sentenced for the said offence. At the time of such conviction of the company there was an outstanding charge under Section 134 of the Act against the appellant, as an officer of Hartmann Construction Ltd. Mr. Hartmann pleaded not guilty, but was convicted of the charge by the learned judge of the magistrate’s court. Mr. Hartmann now appeals to this Court against such conviction.
In order to establish that the appellant is guilty of an offence under Section 134 of the Income Tax Act, it is incumbent upon the crown to prove by relevant evidence: (1) that the corporation was guilty of an offence under the Act; and (2) that the appellant, being an officer of the corporation, participated in the commission of that offence. Mere proof of conviction of the corporation of an offence under the Act is not sufficient. This question was considered in Reg. v. Anisman, [1969] 1 O.R. 397; [1969] 2 C.C.C. 157. It was an application before Brooke, J. by the accused, by way of appeal by stated case against his conviction as an officer of the company under a somewhat similar provision of the Excise Tax Act, R.S.C. 1952, e. 100.
In rendering his decision, Brooke, J. stated the doctrine to be folowed in such cases as folows at page 165:
. . . The conviction of the Company is judgment in personam and the accused who was not a party to those proceedings cannot be bound by it to the extent held by the learned Magistrate. I know of no authority which holds that the conviction of the company is res judicata as against a director, officer or agent, of the same or similar facts in issue in a separate charge against such persons if they were strangers to the prosecution of the company. It is true that a corporation acts through its officers, directors and agents, but if the offence alleged against them is a distinct offence from that of the company, as is the case here, and if such officer, director or agent was not a party to the proceedings against the company, I think it would be a novel extension of the doctrine of res judicata to give it the application now contended for.
At the hearing of this appeal the Crown called Mr. Garry Robert Metcalfe, an employee in the Department of National Revenue, who investigated this matter. In his evidence Mr. Metealfe stated that on October 3, 1968 he called at the office of Hartmann Construction Ltd. and asked the appellant for permission to take the records of the company to be checked. Permission was granted.
It should be noted here that Hartmann Construction Ltd. is a private company. The only persons holding shares therein are the appellant and his wife. The apelant is the main shareholder and the president of the company and he is also in charge of the business of the company.
At the time of Mr. Metcalfe’s visit to the company’s premises, the appellant admitted to Mr. Metcalfe that the company was behind in payments to the Receiver General of Canada of income tax and Canada Pension Plan contributions deducted from the wages of the employees of the company. Mr. Hartmann gave as the reason for such default the financial difficulties experienced by the company.
In his evidence Mr. Metcalfe stated that for the month of August 1968 the deductions which the company failed to remit to the Receiver General of Canada amounted to $1,525.50. He arrived at that sum by checking the company’s records, which he took from the office on October 3, 1968, and also on the basis of the cheques issued by the company to its employees in payment of wages in the month of August 1968. According to Mr. Metcalfe, in computing such wages and the amount of deductions, he considered only cheques that were issued in the month of August 1968 and which were cashed by the respective employees either in August or early in September of that year. There were 56 cheques filed by the crown at the hearing of this appeal as Ex. P-1. Among the cheques so filed there were four cheques issued in July 1968. Mr. Metealfe stated that the latter four cheques were not considered by him when computing the wages for the period in question. Most of the cheques were certified by the bank on the date of their issue or a few days thereafter. Mr. Metcalfe further stated that he compared each cheque issued in August 1968 against the entries made in the original payroll of the company for that month, and found that each cheque was duly entered in the wage sheet as wages paid to the particular employee of that company in the month of August 1968.
The original payroll was found on the premises of the company. At the trial, learned counsel for the crown filed a photostatic copy of the payroll for August 1968. Mr. Hawrish ob-
jected to the admission of the document on the ground: (1) that the original should have been produced; (2) that the payroll is not signed by the company and therefore could not be used in evidence.
It would appear that Mr. Hartmann was served with a subpoena to produce the original payroll at the hearing of this appeal. The appellant had the document in court and, during the adjournment, Mr. Metcalfe secured the original payroll from Mr. Hartmann and made a photostatic copy thereof in the presence of the appellant and his counsel. Under these circumstances I cannot see any valid reason why the photostatic copy should not be admitted in evidence; neither can I find any justification for the submission that because the payroll has not been signed by the company it is not admissible in evidence. Under the provisions of Section 125 (amended 1966-67, c. 47) of the Income Tax Act, every person who is required to collect taxes must keep at his place of business records of wages paid to his employees. The payroll in question was found by Mr. Metcalfe at the place of business of Hartmann Construction Ltd. and must therefore be accepted as such without requiring the same to be signed on behalf of the company.
But even if my findings in this respect are not correct, there is other evidence implicating Hartmann Construction Ltd. in the commission of the offence. There is the admission of the appellant, who was president and manager of the company, that the company failed to remit the deductions to the Receiver General of Canada because it had no funds. There is, further, the evidence of Mr. Metealfe, who has checked each cheque issued to the employees of the company and, on the basis of those cheques, found that the company deducted the sum of $1,525.50 from the wages of its employees as income tax and contributions to Canada Pension Plan in the month of August 1968, but that it has failed to remit the same to the Receiver General of Canada on or before September 15, 1968. These facts have not been controverted by any evidence for the apellant; neither was Mr. Metcalfe’s veracity challenged. Indeed, Mr. Metcalfe impressed me as a honest and impartial witness. On the basis of that evidence I find that the company was guilty of an offence under the Income Tax Act.
Now, Section 134 of the Act provides:
134. Where a corporation is guilty of an offence under this Act, an officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in, or participated in, the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punishment provided for the offence whether or not the corporation has been prosecuted or convicted.
The evidence in this case has established beyond any reasonable doubt that at the time material to these proceedings the appellant, Heinz Hartmann, was the principal shareholder and sole manager of the business affairs of Hartmann Construction Ltd. He admitted to Mr. Metcalfe that he signed all cheques that were seized from the company’s premises. A company can only act through its officer, director or agent. The appellant was such officer and agent and it was through his instrumentality that Hartmann Construction Ltd. committed the offence.
Section 134 of the Act provides that where a corporation is guilty of an offence, an officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in or participated in the offience is a party to and guilty of the offence. The evidence in this ease established beyond any reasonable doubt that the appellant did participate in the commission of the offence by failing to remit the deductions from the wages of the company ’s employees to the Receiver General of Canada and I must, therefore, find the appellant guilty of the offence as charged.
I have reached this conclusion with great reluctance. Hartmann Construction Ltd. is a private company. The only persons holding shares in the company are the appellant and his wife. To all intents and purposes the so-called ‘‘corporation’’ and the appellant are one and the same entity. In my opinion, by enacting Section 134 of the Act the legislator meant to prevent abuses of the Act by officers, directors or agents of corporations having a large number of shareholders, and where fining the corporation would hardly affect personally such officers or agents.
In the present case, by prosecuting the company, the appellant is equally prosecuted. The fine imposed upon the company is also a fine imposed upon the appellant. In effect, by prosecuting the company as well as the appellant, Heinz Hartmann is being fined twice for the same offence.
Unfortunately, this is one of the instances where the courts are unable to grant relief. It is a matter for the legislature to remedy the situation.
The appeal will be dismissed and the conviction confirmed. Normally costs follow the event. The matter of costs is in the discretion of the Court. Under the circumstances of the case at bar, there will be no costs to either party.