Bowman
J.T.C.C.:
—
These
appeals
were
heard
together
on
common
evidence.
The
years
under
appeal
for
Mike
Adams
are
1984,
1985,
1986,
1987
and
1988.
For
Adams
Glass
Ltd.
the
years
are
1985,
1986,
1987
and
1988.
Both
appellants
have
been
convicted
of
tax
evasion
under
subsection
239(1)
of
the
Income
Tax
Act
in
respect
of
the
failure
to
declare
amounts
of
income
that
include
the
amounts
that
are
now
put
in
issue
in
this
court.
The
respondent
contends
that
the
appellants
are
estopped
from
raising
in
this
court
the
question
of
their
taxability.
Accordingly
one
question
that
must
be
determined
is
whether
the
principle
of
issue
estoppel
applies
in
this
case.
If
the
appellants
are
not
estopped
from
raising
in
this
court
the
taxability
of
the
amounts
that
are
now
put
in
issue
the
second
question
is
whether
such
amounts
are
indeed
taxable
in
their
hands.
It
can
no
longer
be
doubted
that,
as
a
matter
of
law,
the
principle
of
issue
estoppel
can
apply
in
a
civil
proceeding
where
the
same
issue
has
been
litigated
in
a
previous
criminal
proceeding
between
the
same
parties.
That
question
has
been
put
to
rest
by
the
Federal
Court
of
Appeal
in
Van
Rooy
v.
Minister
of
National
Revenue,
(sub
nom.
Minister
of
National
Revenue
v.
Van
Rooy)
[1988]
2
C.T.C.
78,
88
D.T.C.
6323
(F.C.A.).
For
issue
estoppel
to
apply
in
a
subsequent
case
based
upon
a
prior
judicial
proceeding
three
conditions
must
prevail:
1.
That
the
same
question
has
been
decided.
2.
That
the
judicial
decision
which
is
said
to
create
the
estoppel
was
final.
3.
The
parties
to
the
judicial
decision
or
their
privies
were
the
same
persons
as
the
parties
to
the
proceedings
in
which
the
estoppel
is
raised
or
their
privies.
(Stiftung
v.
Rayner
&
Keeler
Ltd.
(No.2),
[1967]
1
A.C.
853
at
page
935;
Angle
v.
Minister
of
National
Revenue,
[1975]
2
S.C.R.
248,
28
D.T.C.
6278,
47
D.L.R.
(3d)
544,
at
page
255
(D.T.C.
6280,
D.L.R.
555)).
The
Federal
Court
of
Appeal
in
Van
Rooy
agreed
with
the
trial
judge,
Associate
Chief
Judge
Christie,
that
conditions
2
and
3
had
been
met.
They
also
agreed
that
it
had
not
been
established
that
there
was
an
identity
of
issues
in
the
two
cases.
I
turn
then
to
the
question
whether
the
issues
raised
in
this
case
have
been
decided
in
the
British
Columbia
Provincial
Court.
Adams
Glass
Ltd.,
Mike
Adams,
his
brothers
Meshal,
and
Nick
Adams
and
a
related
company,
Northwest
Aluminum
Products
Ltd.,
were
prosecuted
in
the
British
Columbia
Provincial
Court
for
failure
to
declare
substantial
amounts
of
income.
For
Adams
Glass
Ltd.
the
amount
relating
to
the
1985,
1986,
1987
and
1988
taxation
years,
was
$90,265.66.
At
trial,
based
in
part
on
certain
findings
by
the
trial
judge,
the
Honourable
Judge
P.A.
Hyde,
and
in
part
on
revisions
made
to
the
amounts
by
the
Crown,
this
figure
was
reduced
to
$62,131.36.
Mike
Adams
was
prosecuted
for
failure
to
declare
$100,258.80
in
the
years
1984,
1985,
1986,
1987
and
1988.
At
trial
this
total
was
reduced
to
$70,319.50.
Both
appellants
were
convicted
in
respect
of
the
reduced
amounts,
fines
were
imposed
and
Mike
Adams
was
sentenced
to
two
months
in
prison.
Following
the
convictions
the
Minister
of
National
Revenue
reassessed
the
taxpayers
and
reduced
the
additional
amounts
included
in
income
in:
the
previous
assessments
to
the
amounts
found
by
Judge
Hyde
to
be
the
subject
of
the
successful
prosecution
under
section
239.
It
is
from
those
reassessments
that
the
appellants
now
appeal
to
this
Court.
At
trial
counsel
for
the
appellants
stated
that
he
was
confining
the
appeals
to
four
amounts:
[Chart
not
reproduced.
I
All
of
the
above
amounts
were
taxed
in
the
hands
and
both
Adams
Glass
Ltd.
and
Mike
Adams,
except
for
the
$10,000.00,
which
was
taxed
only
in
Mike
Adams’
hands.
Although
the
evidence
is
not
specific
on
this
point,
I
think
that
the
only
reasonable
inference
is
that
the
four
amounts
described
above
were
included
in
the
amounts
in
respect
of
which
Judge
Hyde
found
that
evasion
had
occurred.
They
are
included
in
the
amounts
assessed
following
the
convictions
and
since
they
are
the
same
amounts
as
those
upon
which
the
appellants
were
successfully
prosecuted
this
conclusion
must
follow
as
a
necessary
consequence.
There
is,
however,
nothing
in
the
evidence
before
me,
and
nothing
in
the
reasons
for
judgment
of
Judge
Hyde,
to
indicate
that
these
items
were
dealt
with
specifically
or
separately
by
the
provincial
court.
The
evidence
before
me
was
not
the
evidence
before
Judge
Hyde.
Neither
Mike
Adams,
nor
his
brother
Nick
Adams
testified
at
the
criminal
trial,
nor
did
Abraham
Morigeau
to
whom
the
loan
of
$3,500.00
was
allegedly
made.
Notwithstanding
this
fact,
does
the
finding
of
guilt
subsume
a
finding
of
taxability
on
the
four
items
which
the
appellants
seek
to
put
in
issue?
Issue
estoppel,
a
form
of
estoppel
per
rem
judicatam,
is
part
of
a
larger
doctrine
of
abuse
of
process
and
has
as
its
purpose
the
prohibition
of
relitigating
questions
between
the
same
parties
that
have
been
the
subject
of
a
prior
final
determination.
It
is
clear
from
Van
Rooy
that
it
can
apply
in
civil
tax
appeals
where
the
same
issue
has
been
decided
in
a
prior
criminal
proceed-
ing.
It
is
equally
clear
from
Van
Rooy
that
the
issue
that
it
is
sought
to
litigate
in
the
subsequent
case
must,
for
the
doctrine
to
apply,
have
been
the
specific
issue
that
was
previously
decided.
The
onus
of
course
is
upon
the
person
seeking
to
invoke
the
principle
to
establish
the
necessary
degree
of
specificity.
If
there
is
to
be
a
conviction
in
a
prosecution
for
income
tax
evasion
a
number
of
elements
must
necessarily
converge,
such
as
the
fact
of
evasion
(the
actus
reus),
the
guilty
intent
(mens
rea),
the
existence
of
income
and
the
taxability
thereof.
Each
of
these
elements
is
fundamental
to
a
determination
of
guilt,
and
it
is
not
necessary
in
my
view
that
each
element
be
specifically
adverted
to..
In
Angle
v.
Minister
of
National
Revenue,
[1975]
2
S.C.R.
248,
28
D.T.C.
6278,
47
D.L.R.
(3d)
544,
Dickson
J.
said
at
pages
254-55
(D.T.C.
6280,
D.L.R.
555-56):
Is
the
question
to
be
decided
in
these
proceedings,
namely
the
indebtedness
of
Mrs.
Angle
to
Transworld
Explorations
Limited,
the
same
as
was
contested
in
the
earlier
proceedings?
If
it
is
not,
there
is
no
estoppel.
It
will
not
suffice
if
the
question
arose
collaterally
or
incidentally
in
the
earlier
proceedings
or
is
one
which
must
be
inferred
by
argument
from
the
judgment.
That
is
plain
from
the
words
of
De
Grey
C.J.
in
the
Duchess
of
Kingston’s
case,
quoted
by
Lord
Selborne
L.J.
in
R.
v.
Hutchings,
at
page
304,
and
by
Lord
Radcliffe
in
Society
of
Medical
Officers
of
Health
v.
Hope.
The
question
out
of
which
the
estoppel
is
said
to
arise
must
have
been
“fundamental
to
the
decision
arrived
at”
in
the
earlier
proceedings:
per
Lord
Shaw
in
Hoystead
v.
Commissioner
of
Taxation.
The
authors
of
Spencer
Bower
and
Turner,
Doctrine
of
Res
Judicata,
2nd
ed.
pages
181-82,
quoted
by
Megarry
J.
in
Spens
v.
.R.C.,
at
page
301,
set
forth
in
these
words
the
nature
of
the
enquiry
which
must
be
made:
...whether
the
determination
on
which
it
is
sought
to
found
the
estoppel
is
“so
fundamental”
to
the
substantive
decision
that
the
latter
cannot
stand
without
the
former.
Nothing
less
than
this
will
do.
To
the
passage
quoted
from
Spencer-Bower
and
Turner
by
Dickson
J.
I
would
add
a
further
passage
from
the
same
author
at
pages
152-53:
On
the
whole,
it
is
conceived
that
the
rule
may
compendiously,
but
safely,
be
stated
in
the
following
form.
Where
the
decision
set
up
as
a
res
judicata
necessarily
involves
a
judicial
determination
of
some
question
of
law
or
issue
of
fact,
in
the
sense
that
the
decision
could
not
have
been
legitimately
or
rationally
pronounced
by
the
tribunal
without
at
the
same
time,
and
in
the
same
breath,
so
to
speak,
determining
that
question
or
issue
in
a
particular
way,
such
determination,
even
though
not
declared
on
the
face
of
the
recorded
decision,
is
deemed
to
constitute
an
integral
part
of
it
as
effectively
as
if
it
had
been
made
so
in
express
terms:
but,
beyond
these
limits,
there
can
be
no
such
thing
as
a
res
judicata
by
implication.
To
the
same
effect
Lord
Denning
said
in
Fide
litas
Shipping
v.
V/O
Exportchleb,
[1965]
2
All
E.R.
4
at
pages
8-9:
The
law,
as
I
understand
it,
is
this:
if
one
party
brings
an
action
against
another
for
a
particular
cause
and
judgment
is
given
on
it,
there
is
a
strict
rule
of
law
that
he
cannot
bring
another
action
against
the
same
party
for
the
same
cause.
Transit
in
rem
judicatam...
But
within
one
cause
of
action,
there
may
be
several
issues
raised
which
are
necessary
for
the
determination
of
the
whole
case.
The
rule
then
is
that,
once
an
issue
has
been
raised
and
_
distinctly
determined
between
the
parties,
then,
as
a
general
rule,
neither
party
can
be
allowed
to
fight
that
issue
all
over
again.
The
same
issue
cannot
be
raised
by
either
of
them
again
in
the
same
or
subsequent
proceedings
except
in
special
circumstances....
And
within
one
issue,
there
may
be
several
points
available
which
go
to
aid
one
party
or
the
other
in
his
efforts
to
secure
a
determination
of
the
issue
in
his
favour.
The
rule
then
is
that
each
party
must
use
reasonable
diligence
to
bring
forward
every
point
which
he
thinks
would
help
him.
If
he
omits
to
raise
any
particular
point,
from
negligence,
inadvertence,
or
even
accident
(which
would
or
might
have
decided
the
issue
in
his
favour),
he
may
find
himself
shut
out
from
raising
that
point
again,
at
any
rate
in
any
case
where
the
self-same
issue
arises
in
the
same
of
subsequent
proceedings.
But
this
again
is
not
an
inflexible
rule.
It
can
be
departed
from
in
special
circumstances....
In
Turigan
v.
Alberta,
[1989]
35
C.P.C.
(2d)
46,
53
D.L.R.
(4th)
321
(Alta.
C.A.)
at
page
65
(D.L.R.
335)
Harradence
J.A.
said:
It
is
settled
law
that
to
establish
an
issue
estoppel,
it
is
not
necessary
to
show
that
the
issue
was
one
that
was
expressly
determined
in
the
previous
judicial
proceedings,
so
long
as
the
issue
must
necessarily
have
been
determined
and
determined
in
a
particular
way
by
the
Court
to
have
reached
the
decision
it
pronounced.
On
the
basis
of
these
authorities,
even
though
on
the
face
of
the
judgment
of
the
earlier
decision
it
is
not
obvious
that
the
precise
points
now
put
in
issue
were
specifically
put
to
or
considered
by
the
judge
in
the
prior
proceeding,
if
they
were
essential
to
the
determination
reached
by
him
a
later
court
cannot
retry
the
issue.
I
am
compelled
to
conclude
that
the
taxability
of
the
four
amounts
had
to
have
formed
an
integral
and
essential
part
of
the
finding
of
guilt
and
I
am
therefore
precluded
from
deciding
afresh
the
issue.
That
having
been
said,
it
is
dangerous
to
apply
the
doctrine
of
issue
estoppel
indiscriminently
in
a
civil
tax
appeal
where
the
taxability
of
amounts
that
it
is
sought
to
contest
in
the
tax
court
was
not
specifically
put
before
the
provincial
court
in
the
previous
criminal
trial
and
those
amounts
merely
form
part
of
a
global
amount
upon
which
the
prior
conviction
is
founded.
I
say
this
for
several
reasons.
In
the
first
place
issue
estoppel
is
based
upon
the
view,
which
I
am
sure
no
one
would
dispute,
that
it
is
undesirable
that
if
a
particular
question
is
litigated
between
two
parties
before
one
court
and
is
the
subject
of
a
final
determination
by
that
court,
it
should
be
capable
of
being
litigated
again
between
the
same
parties
in
another
court.
Nonetheless,
the
effect
of
applying
the
doctrine
is
to
prevent
this
court,
which,
under
the
Tax
Court
of
Canada
Act,
has
exclusive
original
jurisdiction
to
hear
and
determine
appeals
from
assessments
made
under
the
Income
Tax
Act,
from
exercising
that
jurisdiction
and
determining
the
correctness
of
an
assessment.
The
achievement
of
the
desirable
objective
which
the
doctrine
embodies
necessarily
precludes
any
further
enquiry
into
the
truth.
For
that
reason,
it
must
be
applied
only
in
clear
cases.
In
the
second
place,
particular
caution
must
be
used
where
it
is
sought
to
base
its
application
in
a
civil
case
upon
a
prior
criminal
conviction.
A
subject
who
is
charged
with
a
criminal
offence
has
the
right
to
remain
silent
and
not
to
testify
in
his
or
her
own
defence
and
no
adverse
inference
may
be
drawn
from
the
failure
to
testify.
Had
the
evidence
that
was
adduced
before
me
been
before
the
provincial
court
I
should
have
been
surprised
if,
on
at
least
two
of
the
items
now
in
issue,
the
court
would
not
have
acquitted
the
accused.
To
hold
that
by
exercising
the
right
not
to
testify
in
the
criminal
proceeding
an
accused
runs
the
risk
of
being
estopped
from
challenging
portions
of
the
assessment
before
this
court
would,
in
my
view,
constitute
an
erosion
of
one
of
the
most
important
safeguards
that
an
accused
has
under
the
criminal
law
of
Canada.
The
defence
of
a
charge
of
income
tax
evasion
requires
a
number
of
difficult
decisions
by
an
accused
or
his
or
her
counsel:
whether
the
accused
should
testify;
whether
the
taxability
of
specific
amounts
should
be
contested
or
whether
only
the
taxpayer’s
alleged
guilty
intent
should
be
put
in
issue.
These
questions
and
many
others
arise
in
the
course
of
a
trial.
Decisions
in
the
provincial
courts
are
based
upon
quite
different
considerations
from
those
in
this
court,
such
as
whether
the
Crown
has
failed
to
establish
a
technical
fact,
or
whether
the
facts
reasonably
support
an
hypothesis
that
is
inconsistent
with
guilt,
giving
rise
to
a
reasonable
doubt.
In
this
court
usually
the
only
issue
is
taxability,
and
the
onus
is
upon
the
taxpayer.
It
would
be
an
unfortunate
consequence
of
the
application
of
the
doctrine
to
civil
tax
appeals,
based
on
a
prior
conviction
under
section
239
of
the
Income
Tax
Act,
if
a
decision
taken
by
an
accused
to
remain
silent
in
a
prosecution
were
to
be
influenced
by
such
extraneous
factors
as
the
effect
that
decision
might
have
in
a
subsequent
appeal
to
this
court.
In
the
event
that
my
appreciation
of
the
ambit
of
Van
Rooy
is
in
error,
I
shall
set
out
my
findings
of
fact,
which
are
based
in
some
degree
on
the
credibility
of
witnesses,
so
that
if
the
matter
is
appealed
a
new
trial
will
not
be
required:
(a)
The
sum
of
$3,500.
Mike
Adams
testified
that
he
had
loaned
$3,500
to
Abraham
Morigeau,
a
logging
contractor,
to
assist
him
in
the
acquisition
or
repair
of
some
machinery
in
connection
with
a
business
venture
in
which
he
was
involved.
Mr.
Morigeau
confirmed
that
a
loan
had
been
made
to
him
in
this
amount
and
that
some
months
later
he
repaid
it
by
means
of
a
bank
draft.
It
appears
that
the
bank
draft
was
made
payable
to
Adams
Glass
Ltd.
and
the
amount
was
subsequently
paid
out
to
Mike
Adams.
Mr.
Morigeau
corroborated
Mike
Adams’
testimony
and
testified
that
Mike
Adams,
a
friend
of
some
long
standing,
had
loaned
him
money
on
other
occasions.
I
have
no
reservations
about
accepting
the
testimony
of
Mr.
Morigeau.
He
had
no
reason
to
lie
and
he
gave
his
evidence
in
an
open
and
straightforward
way.
I
find
that
the
$3,500
was
a
repayment
to
Mike
Adams
of
a
loan
and
that
this
amount
should
not
have
been
included
in
his
income
or
that
of
Adams
Glass.
(b)
The
sum
of
$1,266.38.
Mike
Adams
testified
that
this
amount,
a
cheque
from
Guardian
Insurance
Company,
represented
a
reimbursement
of
a
bill
that
he
submitted
for
repairing
a
door
at
Adams
Glass
after
a
break
in.
It
is
certainly
taxable
in
his
hands
and
the
evidence
does
not
support
the
position
that
the
amount
was
not
previously
written
off
by
Adams
Glass.
Accordingly
it
is
also
taxable
in
the
company’s
hands
as
a
reimbursement
of
expense.
(c)
The
sum
of
$10,000.
Both
Mike
and
Nick
Adams
testified
that
this
represented
the
repayment
to
Mike
Adams
of
a
loan
that
he
made
to
his
two
brothers
to
enable
them
each
to
acquire
$5,000
worth
of
shares
in
Isis
Resources
Ltd.
Mike
Adams
had
been
approached
by
one
Robert
Cattermole
of
Isis
Resources
Ltd.
to
invest
money
in
the
company
for
a
mining
venture.
He
agreed
that
a
total
of
$15,000
would
be
invested,
$5,000
for
each
of
him,
Nick
and
another
brother,
Meshal
Adams.
A
cheque
for
$15,000
dated
April
22,
1987
to
Isis
Resources
Ltd.
and
drawn
on
Mike
Adams’
personal
account
was
submitted
in
evidence.
A
copy
of
a
further
cheque
for
$10,000
dated
July
14,
1987,
payable
to
Mike
Adams
and
drawn
on
the
account
of
Northwest
Aluminum
Products
Ltd.
was
also
produced.
Nick
Adams,
who
signed
it,
testified
that
this
represented
the
repayment
of
the
two
$5,000
amounts
advanced
by
Mike
Adams
to
his
two
brothers.
The
cheque
bears
the
notation
“stocks”.
In
fact,
shares
were
not
issued,
the
money
was
lost
and
the
promoter,
Mr.
Cattermole,
disappeared.
Mike
Adams
was
not
a
shareholder
of
Northwest
Aluminum
Product
Ltd.
but
his
brother
Nick
was.
I
think
the
evidence
is
clear
that
the
amount
of
$10,000
was
a
repayment
of
the
loan
of
the
two
brothers.
Northwest
Aluminum
Products
Ltd.
was
paying
Mike
Adams
on
behalf
of
the
two
brothers.
It
was,
in
Mike
Adams’
hands,
a
repayment
of
his
loan.
I
accept
the
testimony
of
Mike’s
brother
Nick
which
corroborates
Mike’s
evidence.
Having
observed
him
in
the
witness
stand,
I
found
him
to
be
a
credible
witness.
It
was,
moreover,
corroborated
by
the
two
cheques.
Also,
Nick
Adams,
in
testifying
that
the
payment
by
Northwest
Aluminum
Products
Ltd.
constituted
a
payment
on
his
behalf,
was
aware
that
this
might
have
tax
consequences
to
him
personally.
It
is
difficult
to
conceive
how
the
Crown,
having
established
before
Judge
Hyde
that
this
was
Mike
Adams’
income
and
having
successfully
contended
that
he
was
estopped
from
saying
that
it
was
not,
could
now
take
the
position
that
it
was
not
the
income
of
Mike
but
rather
of
Nick
and
Meshal.
(d)
The
sum
of
$2,500.
Mike
Adams
testified
that
this
was
a
cheque
from
his
brother-in-law
to
reimburse
him
for
a
cash
payment
that
he
allegedly
made
to
some
roofers
to
fix
his
brother-in-law’s
roof.
The
roofers
were
not
named
-
he
allegedly
forgot
their
names.
The
cheque
went
into
the
bank
account
of
Adams
Glass
and
appears
to
have
found
its
way
into
Mike
Adams’
hands.
The
evidence
simply
does
not
support
the
contention
that
this
amount
is
not
taxable
in
the
hands
of
both
Mike
Adams
and
Adams
Glass.
Notwithstanding
these
findings
of
fact
I
am
bound
by
the
doctrine
of
issue
estoppel
to
dismiss
the
appeals.
Appeals
dismissed.