COURT OF APPEAL FOR ONTARIO
Doherty, Feldman and Cronk JJ.A.
BETWEEN:
Her Majesty the Queen
Respondent
and
Maria Mihalkov
Appellant
William E.M. Naylor, for the appellant
Craig Harper, for the respondent
Heard: December 8, 2008
On appeal from the decision of Justice Peter A. Grossi of the Superior Court of Justice dated December 21, 2006
Feldman J.A. (Dissent):
Background
1The appellant was convicted by Grossi J. of four counts of possession of counterfeit money and of instruments for making counterfeit money. She was acquitted of two counts of making counterfeit money.
2The appellant was charged with numerous counts, including conspiracy to make and possess counterfeit money, making counterfeit money, and possession of both counterfeit money and instruments to make counterfeit money as well as possession of credit cards obtained by crime. During the trial, the conspiracy charges and the possession of credit card charges were dismissed. In his reasons for judgment, the trial judge dealt only with the charges of possession of instruments for making counterfeit money, possession of counterfeit money and making counterfeit money. He found that there was no evidence linking the appellant to the making of the counterfeit money, and acquitted her of that charge. He convicted her on the two possession charges.
3The trial judge’s reasons are structured as a colloquy between the arguments of the Crown and of the defence. He makes few specific findings of fact. After reviewing the arguments of each side, he concludes that “there is sufficient evidence to establish the elements of the offence of possession beyond a reasonable doubt.” The sentencing hearing was held a few weeks later, at which the trial judge delivered reasons for sentence, expanding on his conclusions regarding the appellant’s level of involvement in the counterfeiting operation.
4In his reasons for judgment convicting the appellant of the possession charges, the trial judge made the following findings: He referred to the appellant as the wife of Miroslav Mihalkov, who was one of the parties to a large counterfeiting operation. She resided with him in an apartment at 25 Cosburn Ave. in Toronto and was aware that counterfeit money was being manufactured there. She did not report the operation to the police because she did not want to inform on her husband. She was not oppressed by her husband, and was free to work and to leave the apartment at will.
5At the end of the reasons, the trial judge explained the basis for acquitting the appellant of the charge of making counterfeit money. He found that the fact that she resided at 25 Cosburn Ave. where the counterfeiting equipment and operation were found and she knew about them, that several of the computers were registered to her, and that she had extensive training in the Adobe Photoshop software program that is commonly used to produce counterfeit money, were not sufficient to establish that she participated in making the counterfeit money.
6In his reasons for sentence on the possession charges, the trial judge summarized his conclusions regarding the appellant’s possession as follows:
During the relevant period, Maria was married to Miroslav Mihalkov. They shared an apartment at 25 Cosburn Avenue. Miroslav was the main party in this large sophisticated counterfeit operation, and, in the Reasons for Judgment, I reviewed the items found in the apartment relating to the counterfeit operation. There was no evidence linking Maria to the manufacturing of the counterfeit money. She became involved through her knowledge of the operation and control in allowing the situation to continue. She did make an effort to absent herself from the apartment, however, she never finalized it. She had no contact with the other two locations. She did not take part in the sale and there is a question as to the length of her awareness of the operation. … She was discontent with the living arrangements and tried to remedy this by requesting Mr. Mihalkov’s friends to move out with no result. In fairness, given her background and dependence on Miroslav, she was in a tight spot. [Emphasis added.]
The Test for ‘Possession’
7There was no dispute that the appellant’s husband was in possession of all the equipment and the counterfeit money. The issue before the court was whether the appellant was also in possession. The Crown relied on s. 4(3)(b) of the Criminal Code, which provides:
4(3) For the purposes of this Act,
(b) where one of two or more persons, with the knowledge and consent of the rest, has anything in his custody or possession, it shall be deemed to be in the custody and possession of each and all of them.
8The trial judge referred to the important decision of the Supreme Court of Canada in R. v. Terrence, 1983 CanLII 51 (SCC), [1983] 1 S.C.R. 357, where the court held that “a constituent and essential element of possession under s. 3(4)(b) [now s. 4(3)(b)] of the Criminal Code is a measure of control on the part of the person deemed to be in possession by that provision of the Criminal Code” (p. 364). The Supreme Court quoted with approval in the same decision, at p. 363, the following explanation of the section by O’Halloran J.A. of the British Columbia Court of Appeal in R. v. Colvin and Gladue (1942), 1942 CanLII 245 (BC CA), 78 C.C.C. 282, at p. 287:
The “knowledge and consent” which is an integral element of joint possession in s. 5(2) [now 4(3)(b)] must be related to and read with the definition of “possession” in the previous section 5(1)(b) [now 4(3)(a)]. It follows that “knowledge and consent” cannot exist without the co-existence of some measure of control over the subject-matter. If there is the power to consent there is equally the power to refuse and vice versa. They each signify the existence of some power or authority which is here called control, without which the need for their exercise could not arise or be invoked.
9Since Terrence, it has been understood that in order for a person to be in “constructive possession” under s. 4(3)(b), the person must have knowledge that the other person is in possession of the contraband, must consent to that possession, and in order to give effective consent that imports criminal liability, the person must have a measure of control over the contraband.
10For example, in R. v. Chalk (2007), 2007 ONCA 815, 88 O.R. (3d) 448 (C.A.), the accused was convicted of possession of child pornography that was stored on the hard drive of a computer kept in the living room of the home occupied by the accused, his girlfriend and her two children. Following his arrest regarding an allegation made against him by the girlfriend’s daughter, the accused had a phone conversation with his girlfriend from custody in which he asked his girlfriend to delete his files from the computer before the police could search it. She looked into his folder on the hard drive and discovered some pornographic images involving children, which she showed to the police. A further search of the hard drive disclosed pornographic movies involving children in another folder. It was unclear from the evidence who had downloaded or viewed the child pornography, although the accused acknowledged that he knew it was there but denied knowingly downloading it. It had been viewed while he was in custody by someone other than the police.
11The trial judge convicted the accused of possession of child pornography on the basis that the accused knew it was stored on the computer and attempted to exercise control over it by asking his girlfriend to delete it. In this court, Doherty J.A. stated at para. 19:
Knowledge alone will not establish possession. The Crown must also prove that an accused with the requisite knowledge had a measure of control over the item in issue. Control refers to power or authority over the item whether exercised or not: R v. Mohamad (2004), 2004 CanLII 9378 (ON CA), 69 O.R. (3d) 481… (C.A.), at paras. 60-61.
12The accused argued that his assertion of control by asking his girlfriend to delete his computer files amounted to “innocent possession” for the purpose only of divesting himself of the contraband. Doherty J.A. agreed that where a person “takes control of contraband exclusively for the purpose of immediately destroying the contraband or otherwise placing it permanently beyond that person’s ability to exercise any control over the contraband…the intention is solely to divest oneself of control rather than to possess” (para. 25). However, he concluded that this was not one of those cases, because the accused had had control over the material for several months and could have deleted it at any time before he was arrested. His control was therefore “not merely incidental to an innocent purpose” (para. 26).
13In the present case, much of the focus of the evidence, the submissions and the reasons of the trial judge was on whether the appellant resided at 25 Cosburn Ave. The trial judge concluded that she did. The Crown submitted that because the appellant was living at 25 Cosburn Ave. and knew her husband was using their apartment to make counterfeit money, she allowed this activity to continue and was therefore in possession. The Crown also submitted that because the appellant was living at 25 Cosburn Ave., she was in control of the premises.
14This latter submission was consistent with the trial judge’s reference to this court’s decision in Re Chambers and the Queen (1985), 1985 CanLII 169 (ON CA), 20 C.C.C. (3d) 440, which he said stands for the proposition that: “[t]he requisite control can be found in the fact that a prohibited item or contraband is in an accused’s home and that she had the right to grant or withhold her consent to the property being stored there.”
15However, there is a major difference between this case and Chambers. In Chambers, the apartment belonged to the accused, who allowed her boyfriend to stay with her and to keep his drugs there. Because it was her apartment, she controlled who was there and in that way, what they brought with them. In this case, the appellant lived in the apartment rented by her husband. Even if she had a joint legal right to stay in the premises, so did her husband. On the evidence accepted by the trial judge, she did not have sole legal control nor any factual control over who was in the apartment or what they brought in.
Application of the Test by the Trial Judge
16It appears from reading the reasons as a whole, that the trial judge accepted the Crown’s final argument that it was the combination of the fact that the appellant resided at the premises, knew what was going on and did not call the police that showed that she had control over the premises. He accepted that her control over the contraband could be inferred from her knowledge and because she chose not to call the police as opposed to being prevented from calling the police by her husband.
17This finding constitutes an error in law. There was no obligation in law for the appellant to call the police to report illegal activity. Nor can a failure to call police indicate any measure of control. Anyone may call police and report criminal activity.
18In my view, the trial judge erred in concluding that because the appellant remained in the apartment with knowledge of the counterfeiting activity and did not call the police, that she therefore had sufficient control to withhold her consent. These factual findings are insufficient to ground the legal conclusion that the appellant had “power or authority over” the counterfeit money and equipment (Chalk at para. 19).
19The most that can be said from this evidence and the reasons of the trial judge is that, by staying in the apartment in those circumstances, the appellant acquiesced in her husband’s illegal conduct. This is not a case like Chalk, where the accused had physical control over the material stored on the computer hard drive and the ability to delete it, and therefore to choose to retain it. The counterfeiting equipment did not belong to the appellant. Her husband and his two friends controlled the equipment. There was no evidence that her consent was either sought or required, nor did the trial judge so find. The fact that the indication of control relied on by the Crown and the trial judge was the appellant’s failure to call the police demonstrates an acknowledgement that she had no actual control either over the contraband or over the premises.
20What the trial judge found was that she had control over herself. She could come and go into and from the apartment “on her own accord”. She was allowed to go out to work. One could therefore conclude that she could have disassociated herself from the illegal activity by not returning to the apartment. However, the fact that she maintained residence in the apartment does not mean that she thereby gained control over the contraband. The only suggestion of what she could have done about the situation was to call the police. Indeed, in his reasons for sentence, the trial judge recognized that the appellant was “in a tight spot.”
21In his reasons, Doherty J.A. considers that it was reasonable for the trial judge to infer from the evidence that the appellant lived in the apartment for six weeks, knew about the counterfeiting operation, did not call the police, used some of the computers and fled the scene when the police arrested her husband, that she had constructive possession of the equipment and the counterfeit money (para. 5). However, from my reading of the reasons, the trial judge did not draw an inference from these circumstances that the appellant had control. Rather, based on his reasons for judgment and for sentence, it appears that the trial judge’s conclusion that she “allowed this activity to continue” was made, not by drawing an inference of control from the facts, but on his belief that despite the fact that the appellant was “in a tight spot”, the combination of her continued residence, her knowledge of the presence of the contraband, and her failure to call the police amounted to control in law, for the purpose of constructive possession.
Is there a separate test for constructive possession by a spouse?
22Following the close of the Crown’s case, the appellant’s counsel moved for a directed verdict of acquittal on the possession charges. In his reasons for rejecting the motion, the trial judge referred to the appellant’s argument that the trial judge should apply an old common law presumption that where a husband and wife live together, the husband is in control of the premises. In response, the Crown suggested, referring to the decision of the Ontario Court of Justice in R. v. Mehrabnia (1993), O.J. No. 2819, that there is now a rebuttable presumption that in those circumstances a husband and wife have joint control. In his reasons for dismissing the motion, the trial judge rejected the old presumption. He did not make any finding regarding a new, rebuttable presumption.
23However, in his reasons for judgment, the trial judge noted that the Crown again submitted that there may now be a rebuttable presumption of law that when a husband and wife live together, both have joint possession and control of the premises and the property. As the trial judge made no specific findings in his reasons for judgment as to which of the Crown’s submissions he accepted, it is unclear whether he gave any effect to this alleged presumption.
24In my view, it is important to state that the law regarding the elements of the offence of possession applies equally to all persons, regardless of their marital status. Where the Crown relies on “constructive possession” under s. 4(3)(b) of the Code, it must prove knowledge, consent and an element of control over the contraband.
25Where partners are living together, whether they are married, common law spouses or even roommates, they each have the right to live in the premises. Depending on the conduct of the partner who does not own the contraband, it may be open to a court to infer consent and a measure of control over the contraband by the other partner. However, particularly where partners are married or in a common law relationship where there may be a power imbalance (as there was in this case), that inference does not automatically arise only on the basis that the partner not responsible for the contraband continued to reside in the joint premises with knowledge of the presence of the contraband and did not call the police.
Conclusion
26In my view, the trial judge erred in law in finding that while continuing to live at 25 Cosburn Ave., the appellant’s failure to call the police meant that she had a measure of control over the counterfeiting equipment and the counterfeit money sufficient to constitute constructive possession within the meaning of s. 4(3)(b) of the Code. The trial judge made no other finding of control of the contraband. Based on the error of law, I would allow the appeal, set aside the conviction and order a new trial on the possession charges.
“K. Feldman J.A.”
Doherty J.A.:
27I would dismiss the appeal.
28By the end of the appellant’s evidence, this was a straightforward, one issue case. The appellant’s husband, with her full knowledge, was running a large scale counterfeit money making factory in their small one bedroom apartment. The police conducted a “sting” operation that eventually led to the arrest of the husband and the search of the apartment. The police found copious amounts of counterfeit money, material used in the manufacture of counterfeit money and computers and other equipment (scanners, printers, etc.) that were being used to manufacture counterfeit money in the appellant’s residence.
29The appellant testified that she became aware of her husband’s counterfeit money making operation about six weeks before the police raid when she returned from a visit to Europe. The appellant found the apartment full of computer and other equipment being used to manufacture counterfeit money. She testified that she had nothing to do with the operation, which was being run by her husband and a friend. According to the appellant’s testimony, she told her husband to remove the material from their residence but he refused. The appellant also testified that her marriage was an unhappy one and that she wanted to leave the residence but had nowhere to go.
30The trial judge concluded that the Crown had failed to prove that the appellant was a party to the counterfeit money manufacturing operation being run by her husband. With respect to the possession charges, the trial judge properly identified s. 4(3)(b) of the Criminal Code as the operative provision. He recognized that possession under that provision required an element of control over the property in issue.
31In concluding that the Crown had proved that the appellant was in possession of the counterfeit money and the various material and instruments used in the manufacture of counterfeit money found in her residence, the trial judge relied on the following circumstances:
the appellant resided in the apartment with her husband for at least six weeks knowing full well that there was counterfeit money there and that the equipment and material crammed into the apartment were being used to manufacture counterfeit money;
throughout the six week period, the appellant chose not to change her residence or to advise the authorities of the ongoing criminal operation in her home;
the appellant used some of the computer equipment and her personal information and email were stored in one of the computers; and
the appellant fled the scene when her husband was arrested just outside of the apartment.
32In convicting the appellant, the trial judge rejected her claim that she was a victim of her husband’s oppression who had no real choice but to remain in the apartment despite the ongoing criminal operation.
33This court does not retry criminal cases. The court can test findings of fact made at trial against only the reasonableness standard set out in found in s. 686(1)(a)(i). The trial judge’s findings of fact clear that hurdle. The circumstances identified by him were all relevant to whether the appellant had an element of control over the counterfeit money and the equipment and material being used to manufacture that money.
34I do not suggest that the inference drawn by the trial judge was the only available inference, or that the evidence was particularly strong. Certainly, another trial judge, acting reasonably, could have concluded that the appellant’s failure to speak to the authorities and her flight at the time of arrest was consistent with concerns about her own welfare and did not support the inference that she had any control over the contraband material and equipment. That is not, however, the inference that this trial judge chose to draw. Assuming the inference he drew is one that a reasonable trier of fact could draw, and I think it was, it is his job and not the function of this court to determine what inference should be drawn.
35At para. 17 of her reasons, my colleague states that because the appellant was not under a legal obligation to notify the authorities of the ongoing counterfeit operation being run out of her home, it was an error in law for the trial judge to draw an inference supporting possession against her based on her failure to notify the authorities.
36I see no connection between the absence of any legal obligation to notify the authorities and the inference that the trial judge could reasonably draw from the appellant’s conduct, including her failure to go to the authorities during the six week time period. Inferences from circumstances are drawn based on common sense and human experience. I think a trier of fact, acting reasonably, could take the appellant’s failure throughout the six week period to notify the authorities of the ongoing criminal activity in her residence as some evidence of her condonation and consent to the property being used in that criminal activity remaining in her residence. Certainly, the appellant’s failure to notify the authorities is conduct that is much more consistent with a person who is content to have the property in his or her residence, than with a person who (as the appellant testified) takes strong objection to the property remaining in her residence.
37The inference drawn by the trial judge has nothing to do with whether the appellant had any obligation to go to the authorities. The inference flows from a determination, based on common sense and human experience, of how one expects people to act and react in a given set of circumstances. The same reasoning applies to the inference to be drawn from the appellant’s flight from the apartment after she saw her husband arrested just outside. That reaction, considered in the context of the rest of the evidence, could support an inference that the appellant was criminally complicit in at least some of the criminal activity going on within her home.
38The inferences drawn by the trial judge cannot be confused with the impermissible inferences that are occasionally drawn against an arrested person who declines to offer any explanation for his conduct to the police. None of the inferences drawn by this trial judge intruded upon the appellant’s right to silence.
39My colleague also indicates (at para. 18) that the trial judge erred when he inferred that the appellant’s continued residence in the apartment could support the conclusion that the appellant had the necessary control over the counterfeit money and related material and equipment. My colleague maintains that the evidence could only support an inference of the appellant’s acquiescence in the husband’s possession.
40First, for reasons set out above, I do not think that the trial judge found that the appellant was in possession of the relevant material exclusively on the basis that she resided in the apartment where the property was found. Her ongoing residence in that property was one of several circumstances relied on by the trial judge. Second, I think the question of whether an inference of mere acquiescence or an inference of possession should be drawn, was a matter for the trial judge and not this court. The distinction between those two inferences turns essentially on the weight that the trial judge chose to give to the combined effect of the circumstances as he found them to be. That is what trial judges do. This court must defer to that weighing process unless it produces an unreasonable result.
41Although the trial judge did not ultimately rely on any presumption based on the spousal relationship between the appellant and her husband, he did make reference to certain cases which suggest there is some kind of rebuttable presumption. I see no value in maintaining or creating artificial rebuttable presumptions to decide questions of possession. Possession is a question of mixed fact and law. It must be determined by the application of settled legal principles, including the reasonable doubt principle, to the evidence in any given case. That evidence is infinitely variable. Where the property in issue is found on premises owned and/or controlled by more than one party, the relationship between or among those parties, marital or otherwise, will be relevant in deciding the question of possession as it applies to each of the individuals separately. That inquiry is not aided by judicially created presumptions, particularly ones that reflect long gone social stereotypes.
42I would dismiss the appeal.
RELEASED: “DD” “FEB 18 2009”
“Doherty J.A.”
“I agree E.A. Cronk J.A.”
