Dr. Jack Klundert, an optometrist from Windsor, Ontario, was charged with income tax evasion and acquitted by the jury of his peers. The Crown appealed the verdict of the jury alleging that there were legal mistakes in the instructions given to the jury by the judge.
Dr. Klundert did not perform any fraud or deception but deliberately refused to file an income tax return based on his conviction that the Income Tax Act was unconstitutional. It is important to note that the Crown did not doubt the sincerity of Dr. Klundert’s convictions but maintained that an error in law would not be a valid defence against the law.
The appeal court of Ontario held that in many cases a mistake of law, or a mistake of fact, or a combination of both might be considered to defeat mens rea of income tax evasion:
“[55] 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.”
There was an important distinction made by the court, however, between the erroneous belief concerning the requirement for paying taxes and the erroneous belief concerning the constitutional validity of the Income Tax Act:
“[58] 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 a good example of judicial activism regarding the guilty verdict of the jury who has heard the testimony of Dr. Klundert and truly believed that the mental state of the individual was sufficient to prove his innocence. The ruling of the Court of Appeal in this case, as well as the appeal of his second acquittal, is a reflection of the legal system, in which the constitutionality of the Income Tax Act takes precedence over the evidence of an honorable citizen or common sense of regular jurors.
Decided by the Ontario Court of Appeal on August 30, 2004.
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