The Supreme Court of British Columbia has awarded a pair of business owners $1.7 million in damages against the Canada Revenue Agency (CRA), including aggravated and punitive damages, after it found that the CRA pursued a malicious prosecution against the couple for tax evasion.
The court awarded $750,000 in punitive damages, $600,000 in aggravated damages and almost $350,000 in legal costs Tony and Helen Samaroo, who were charged and acquitted of tax evasion following a CRA investigation into the finances of the restaurant, club, and motel that they operated in Nanaimo, B.C.
The court dismissed the claims against a prosecutor who was brought in to try the case, but found that the case was brought by the CRA without reasonable grounds to believe that the couple could be convicted.
“The charges against the Samaroos were founded on an assumption, and grounded in mere suspicion and hypotheses, which did not and could not constitute reasonable and probable cause,” the court ruled.
“This prosecution should never have proceeded. It was undertaken without reasonable and probable cause,” the judgment states, concluding that the couple’s Charter rights were violated. “The CRA used the powers of the state in the form of a criminal prosecution to wrongfully and maliciously prosecute the Samaroos.”
In addition to the costs of their defence, the plaintiffs sought aggravated damages of $500,000 each and punitive damages of $6 million in the case.
The court awarded each of them $300,000 in aggravated damages, noting that “both of the plaintiffs have suffered emotionally from the tax prosecution and continue to suffer. While there may be some public vindication as a result of this decision that is unlikely to dispel the profound impact of the prosecution on them, an impact that they will likely never completely recover from.”
The court also ordered $750,000 in punitive damages against the CRA, saying that the charges never should have been brought, and that the agency’s employees “looked forward with unprofessional glee to the plaintiffs’ anticipated conviction, sentencing and their resulting ruination.
“In addition, the CRA’s advertising of its successes indicates a deeply troubling approach to its duties,” the court said, ruling that punitive damages are warranted in order “to bring home the seriousness” of the conduct in the case.