Final arguments in a tax evasion trial were made Dec. 13, but a decision on whether an Alida, Sask. couple have evaded tax and falsified income tax returns won't be made until Feb. 27.
Judge Karl Bazin reserved his decision until that time, on the case that is being heard in Estevan provincial court. Norman Desautels and his wife Dorothy-Anne are accused of making false statements in their tax returns forms and claiming a tax credit to which they are not entitled by making false statements. Norman is also charged with making false statements in a claim in order to evade payment of tax, with the Crown alleging they evaded more than $90,000 in federal tax.
The Crown also alleges that by filing false income tax statements in 2003 and 2004, and then ceasing to file returns, they received a Canada Child Tax benefit of about $8,800 between 2003 and 2005. The Crown said the Desautels were not eligible to receive that benefit given the income they were receiving.
Each side took a little more than an hour to outline its final arguments to Bazin for consideration.
Chief federal prosecutor Christine Haynes said the Crown has proven, through the evidence given by the lead investigator, that Norman received income and did not file tax returns.
She said he filed false returns in 2003 and 2004 before ceasing to file returns, despite receiving income from a "myriad" of sources. Along with income from his farm and well-servicing job, she said the Desautels collected money through a family trust and investments. Haynes said it can be inferred that the Desautels knew about the income they were receiving and knew about how the tax system works because they had filed tax returns before.
"In 2001 and 2002 they filed returns through accounting services, then filed their own returns (the following years)," said Haynes. "There's nothing wrong with that, but then they stopped being accurate."
She told Bazin that if the Desautels are found guilty on all charges, the Crown would order a stay of proceedings on eight of the 16 charges the couple faces. The charges they are open to staying are for specific years, where the charges they would prosecute encompass all the years of the alleged offences.
Crown counsel Glennys McVeigh weighed in on the Desautels' ineligibility to receive the child tax credit. She noted that the couple had applied for the benefit in the 1990s, which was acceptable, but once they filed false returns and no returns, the credit she said they unlawfully received was automatically triggered.
She said the benefit is available to only the lowest of income earners, and the Desautels were in fact not entitled that money.
McVeigh noted that for the charges from the Excise Tax Act against Norman, the Crown presented invoices showing that he charged GST for the well-servicing duties he performed. She called those invoices the "most evident of intent" that he avoided taxation, because they display his GST registration number.
"He was well aware of GST processes," McVeigh told the judge.
He did eventually file GST, but the Crown said that was well after the point in 2007, and by not filing he was making a false statement that he did not collect GST in trust for the government.
The Crown also countered an argument already brought forward by the defendants that the Income Tax Act is unconstitutional. McVeigh said the matter has come up at the Supreme Court of Canada, and that court has ruled that it is a legitimate form of taxation.
Norman told Bazin that constitutional law is supreme and any law inconsistent with the Constitution is invalid.
"No one can be convicted of an offence for an unconstitutional law," he said.
Bazin asked if he was arguing that they couldn't be convicted because the act the Crown was using to base the charges didn't exist.
"There is reason to believe it doesn't exist," Norman replied.
Norman also said he asked the court on the first day of the trial if there was a certified copy of the Income Tax Act present in the courtroom. He said the certified act must be present in the room during the trial.
If the act did in fact exist, Norman said it would only apply to agents of the government, and the two witnesses he asked said they were not aware of him being an agent of the government.
"Are you saying the Charter doesn't apply to citizens?" asked Bazin.
"That's what I'm saying," he responded.
Dorothy said that the Crown has never brought forward any injured party that they have harmed. She noted that the Crown's lead investigator testified that the people of Canada would be hurt by their alleged crimes.
"Doesn't the Crown protect the people of Canada? We are part of Canada. How can we hurt ourselves?" she asked.
Norman then suggested that the investigator's numbers are wrong with regard to the accounting that was presented as evidence.
"That's a legitimate argument to make," said Bazin. "You can say I can't rely on his math, but you have to show where an error was made. He testified he was accurate."
The Desautels said all the numbers were wrong because if there is one number that was off, the rest would be as well.
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She continued saying the lead investigator's testimony should be considered inadmissible because he was counselled by the Crown and "bears false witness under penalty of perjury."
The Desautels both said the only proper ruling would be that of an absolute discharge.
The matter will return for Bazin's decision Feb. 27.
