Dr. Jack Klundert, an optometrist from Windsor, Ontario, was tried for income tax evasion and acquitted by a jury of his peers. The Crown appealed the acquittal, claiming that the judge had made errors of law in his address to the jury.
Dr. Klundert had not committed any fraud or deception, but had openly refused to complete an income tax return on the basis of his belief that the Income Tax Act itself was unconstitutional. The Crown did not dispute the honesty of Dr. Klundert’s belief, but argued that a mistake of law could not serve as an excuse for defying the law.
The Ontario Court of Appeal found that in many circumstances, a mistake of fact, or law, or a mixture of fact and law, could negate the requisite mens rea for income tax evasion:
“ Section 239(1)(d) is part of an Act which is necessarily and notoriously complex. It is subject to ongoing revision. No lay person is expected to know all the complexities of the tax laws. It is accepted that people will act on the advice of professionals and that the advice will often turn on the meanings to be given to provisions in the Act that are open to various interpretations. Furthermore, it is accepted that one may legitimately structure one’s affairs so as to minimize tax liability. Considered in this legislative context, I have no difficulty in holding that a mistake or ignorance as to one’s liability to pay tax under the Act may negate the fault requirement in the provision, regardless of whether it is a factual mistake, a legal mistake, or a combination of both.”
The court drew a distinction, however, between a mistaken view of the obligation to pay tax and a mistaken view of the constitutional validity of the Income Tax Act:
“ Can Dr. Klundert’s belief that the Act is beyond the powers of the federal government and, therefore invalid, constitute a mistake of law negating the fault component of the crime of tax evasion? The answer must be “no”. Section 239(1)(d) refers to the “payment of tax imposed by the Act”. Dr. Klundert knew full well that he owed tax imposed by the Act. His mistake did not go to knowledge of his obligation to pay taxes owing under the Act but rather to the government’s right to impose that obligation on him. He did not assert that he was doing his best to comply with the law but, through ignorance or mistake, failed to do so. To the contrary, he acknowledged the obligation to pay under the Act and made a considered decision to refuse to pay because of a belief that the law requiring him to pay was invalid.”
R. v. Klundert is an example of aggressive appellate intervention with the verdict of a jury who had heard Dr. Klundert’s evidence and sincerely believed that his state of mind rendered him innocent. The Court of Appeal’s decision in this case (and the subsequent appeal of his second acquittal) is a symptom of a legal system which considers the constitutionality of the Income Tax Act to be sacrosanct, over and above the testimony of an honest citizen or the common-sense conclusions of ordinary jurors.
Decided by the Ontario Court of Appeal on August 30, 2004.
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