A Nanaimo couple has been awarded $1.6 million in damages against the Canada Revenue Agency for “high-handed, reprehensible and malicious” prosecution.
B.C. Supreme Court Justice Robert Punnett has found that senior CRA investigator Keith Kendal maliciously prosecuted Tony and Helen Samaroo, owners of a restaurant, nightclub and motel in Nanaimo.
The CRA investigated the Samaroos for tax evasion during the years 2004-2006. On June 12, 2008, the Samaroos were charged with 21 counts of tax evasion. They were alleged to have skimmed $1.7 million from their restaurant between 2004 and 2005. On April 6, 2011, after a 19-day trial in provincial court, the Samaroos were acquitted of all charges. The Samaroos later sued the Canada Revenue Agency.
Punnett found that Kendal acted deliberately to subvert and abuse his office.
“He did so by suppressing evidence and attributing evidence to witnesses that was not accurate. He had decided from the beginning of his involvement with the Samaroos that they were guilty and set out to prove that was the case even if to do so required a breach of his proper role and responsibility,” Punnett wrote in the reasons for judgment.
The Samaroos also sued Crown prosecutor Brian Jones for malicious prosecution. Punnett dismissed this claim, finding that Jones’s recollection was poor and inconsistent and that he was confused about the case.
“The evidence reveals a casual inattention to exercising his prosecutorial role and responsibilities,” Punnett wrote. “I found that he too readily left control of the prosecution, disclosure and decision making to his client, the CRA.”
Jones did not intentionally abuse the role of Crown prosecutor, said the judge.
“He struck me as a lawyer who, through negligence or otherwise, gave up control of the prosecution to Mr. Kendal and the CRA and in doing so risked a miscarriage of justice.”
The allegations against the Samaroos were that they evaded taxes in 2004 and 2005 by failing to provide one of three daily till tapes to their bookkeeper. But new evidence arose and the prosecution had no evidence to prove whether the Samaroos were providing only two of the three till tapes to their bookkeeper.
“The prosecution should never have proceeded,” Punnett said.
Kendal continued to pursue the prosecution on a theory he could not prove, Punnett said.
Kendal did not start from a neutral position, Punnett said. He had his mind made up from the beginning and set out to have the Samaroos charged and convicted. “His sole interest was to collect incriminating evidence and to discount or ignore evidence that did not support his prejudgment,” Punnett found.
The CRA prosecution has had a devastating impact on the Samaroos both personally and financially, Punnett wrote. It ended their desire and ability to develop and grow their business. It significantly strained their family life.
The Samaroo children testified that the charges changed the lively, joyous family home they grew up in. Helen and Tony became quiet and depressed. RCMP officers, who used to be good customers, stopped coming to their MGM restaurant.
Helen Samaroo said her life was turned upside down by the charges.
She felt that others now looked at her differently and she felt embarrassed to go to the restaurant and visit with her customers.
“She said she had worked hard to build up her reputation as a reputable nightclub operator and felt that the charges had ruined her reputation,” the judge wrote. “She testified that the charges had a significant impact on her husband who became stressed and got quieter and quieter, and over time worked less and less and stopped socializing.”
Helen testified that she had a breakdown and took to bed for six months. Even with the acquittal, she will never feel the same, she told the court.
“They are entitled to substantial compensation for their suffering with respect to their humiliation, loss of self-confidence, loss of self-esteem, stress, damage to their reputations and the like and the impact that has had on their business and personal lives,” Punnett concluded.
“This is truly egregious behaviour,” said Victoria lawyer Steve Kelliher, who represents the Samaroos.
“The judge makes reference to an unfortunate culture within the CRA. This is not a one-off. This is a systemic issue.”
Kelliher said the defence mounted by the CRA in this case was that it had done nothing wrong and would do exactly the same thing again, given the opportunity. “That’s why the aggravated and punitive damages are so high.”
The CRA continues to prosecute the Samaroos in tax court, using the same witness and on the same theory and evidence that was rejected at the criminal trial and found to be malicious prosecution in B.C. Supreme Court, he said.