Court File and Parties

Court: COURT OF APPEAL FOR ONTARIO Date: 2020-01-16 Docket: C65212, C65224, C65322 & C65858

Judges: Doherty, van Rensburg and Hourigan JJ.A.

Between:

Her Majesty the Queen Respondent

And:

Marshall Kazman Appellant

And Between:

Her Majesty the Queen Respondent

And:

Gad Levy Appellant

And Between:

Her Majesty the Queen Respondent

And:

Madjid Vaez Tehrani Appellant

And Between:

Her Majesty the Queen Respondent

And:

Ali Vaez Tehrani Appellant

Counsel: Richard Litkowski, for the appellant Marshall Kazman Adam Little, for the appellant Gad Levy Michael Dineen, for the appellant Madjid Vaez Tehrani Mark Halfyard and Chris Rudnicki, for the appellant Ali Vaez Tehrani John Patton, for the respondent

Heard: December 16, 2019

On appeal from: Convictions entered by Justice Nancy J. Spies of the Superior Court of Justice on September 8, 2017, reported at 2017 ONSC 5300, and on appeal from sentences imposed by Justice Nancy J. Spies of the Superior Court of Justice on April 12, 2018, reported at 2018 ONSC 2332.

Doherty J.A.:

I. Overview

[1] The appellants and others were charged with multiple counts of fraud and related offences arising out of several bank loans fraudulently obtained by them under the auspices of the Government of Canada’s Small Business Financing Program. The program was intended to assist small businesses with loans, thereby improving the economy and creating jobs for Canadians. The loans were provided by banks but insured, to a large extent, by Industry Canada, [^1] a department of the federal government. The banks and the taxpayer were all victims of the frauds.

[2] The trial judge convicted the appellants, Kazman and Levy, on all charges. She convicted the appellant, M. Tehrani, of two counts of fraud and acquitted him on two counts. She convicted his brother, the appellant, A. Tehrani, on one count of fraud and acquitted him on two others. The trial judge acquitted three other accused on all counts.

[3] All of the appellants appeal their convictions. None take issue with any part of the trial judge’s exhaustive analysis of the evidence, her findings of fact, or the verdicts she returned. In short, the appellants do not challenge their convictions on the merits.

[4] The appellants do, however, argue that the trial judge erred in dismissing three motions brought at different stages of the trial for an order staying the proceedings on the basis of an alleged breach of s. 11(b) of the Charter. The appellants argue that the trial judge erred in dismissing s. 11(b) motions on each occasion without addressing the merits of the application.

[5] Kazman and A. Tehrani also appeal their sentences. Kazman submits that the seven-year prison sentence imposed by the trial judge was manifestly excessive. He also argues that, in the circumstances, the trial judge should not have made a restitution order against him. A. Tehrani submits that the trial judge erred in imposing a custodial sentence. He contends that a conditional sentence, even if somewhat longer than the 14 months’ jail sentence imposed by the trial judge, is the appropriate sentence.

[6] The court dismissed the conviction appeal with reasons to follow and reserved judgment on the sentence appeals. These reasons address both the conviction and sentence appeals.

II. The Nature of the Conviction Appeals

[7] This was a lengthy and factually-dense prosecution. The evidence took five months to complete. Given that the appellants challenge only the rulings on the s. 11(b) motions, it is unnecessary to review the evidence or the findings of fact made by the trial judge. It is sufficient to observe that her reasons are meticulous and detailed. They lay bare a multi-layered fraudulent scheme perpetrated by the appellants on the banks and Industry Canada over a lengthy time period. The trial judge’s findings put Kazman, a disbarred lawyer, and Levy at the centre of this fraudulent scheme. On the trial judge’s unchallenged analysis of the evidence, there can be no doubt about the appellants’ guilt on the counts on which they were convicted.

[8] The conviction appeals focus on three s. 11(b) rulings made by the trial judge in the course of the trial proceedings. The first s. 11(b) ruling was made in November 2016, just after the Crown closed its case at trial. All of the appellants joined in that motion. The trial judge summarily dismissed the motion without reaching the merits as it had not been perfected.

[9] The second s. 11(b) motion came about a month later in December 2016. One of the non-appellant accused brought a motion to re-open the s. 11(b) motion. Counsel sought reconsideration on the basis that she could now put a perfected s. 11(b) motion before the trial judge. Only M. Tehrani joined in this motion. By the time this motion was brought, it was clear that the defence evidence at trial would continue into January, about a month longer than had been anticipated. The trial judge again summarily dismissed this motion without addressing the merits of the s. 11(b) claim.

[10] The third s. 11(b) motion was brought some 15 months later in March 2018 by Levy, on the eve of his sentencing. None of the other appellants joined in this motion. Once again, the trial judge summarily dismissed the s. 11(b) motion.

[11] The trial judge gave brief oral reasons for dismissing the motions in November and December of 2016. She later provided detailed written reasons: see R. v. Kazman, 2018 ONSC 1913, 408 C.R.R. (2d) 151 (Kazman (2016 applications)). [^2] The trial judge also gave written reasons for dismissing Levy’s motion in March 2018: see R. v. Kazman, 2018 ONSC 2196 (Kazman (2018 application)).

[12] The appellants raise several arguments. Most come down to the submission that the circumstances did not warrant the extreme remedy imposed by the trial judge. The appellants contend that a trial judge should decline to hear a motion on the merits only as a last resort, especially one based on a constitutional claim. They argue that despite non-compliance with various deadlines imposed by the trial judge, the s. 11(b) motions could have been heard on their merits within the timeframe of the ongoing trial and without prejudice to the Crown or to the conduct of the trial. They submit that the trial judge acted unreasonably in not affording them a further opportunity to perfect and argue their s. 11(b) motion.

[13] In addition to the submissions which challenge the reasonableness of the trial judge’s exercise of her discretion, the appellants Kazman and Levy also allege that they were treated unfairly. They both argue that the trial judge did not afford them the assistance they were entitled to as unrepresented accused. Levy also argues that he was denied the opportunity to adequately address the Crown’s claim that his March 2018 motion should be summarily dismissed. The appellants submit that this unfairness rose to the level of a miscarriage of justice.

III. The Legal Principles

[14] This appeal does not raise any jurisprudential questions, but instead, turns on the application of well-settled law to the particular circumstances of this case. There can be no doubt that a trial judge has the authority to summarily dismiss motions brought at trial, including s. 11(b) motions. That power is recognized in Rule 34.03 of the Criminal Proceedings Rules for the Superior Court of Justice (Ontario) (SI/2012-7). The case law from this court also acknowledges a trial judge’s power to summarily dismiss motions. Without that power, trial judges could not properly control the proceedings before them: see R. v. Imola, 2019 ONCA 556, at para. 17; R. v. Blom (2002), 61 O.R. (3d) 51, at paras. 28-30 (C.A.).

[15] The power to dismiss motions summarily, especially motions involving constitutional claims, must be exercised cautiously. Motions that advance constitutional claims should be addressed on their merits unless the broader interests of justice clearly demand otherwise: R. v. Loveman (1992), 8 O.R. (3d) 51, at pp. 55-56 (C.A.). In deciding whether to dismiss a motion summarily, the trial judge must have regard to the interests of the accused. The trial judge’s focus cannot, however, be limited to the narrow specifics of the particular case. The trial judge must consider broader administration of justice concerns, including the need to conduct all litigation, including criminal litigation, in a fair, orderly, and efficient manner. It falls to trial judges to decide where the interests of justice lie in each specific case.

[16] The broader administration of justice concerns were placed front and centre in the powerful reasons of the majority in R. v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631, at paras. 137-141. Speaking specifically about the constitutional right to a trial within a reasonable time and the litigation that claims based on that right have spawned, Moldaver J. for the majority stressed that all participants in criminal litigation have a joint obligation to work co-operatively to effectively use limited available resources in order to bring cases to completion within a reasonable time: see also R. v. Cody, 2017 SCC 31, [2017] 1 S.C.R. 659, at para. 1. No one, including self-represented accused, can be allowed to ignore court orders and deadlines while the constitutional clock runs down and valuable court resources are consumed. After Jordan, trial judges must engage in proactive case management of criminal trials. Litigants must cooperate in those case management efforts. Appellate courts must support those proactive steps by showing strong deference to case management decisions: Jordan, at paras. 138-139.

[17] The trial judge considered many of the leading authorities: see Kazman (2016 applications), at paras. 122-127. She was also mindful of the admonition in Jordan and Cody that the court must expect and demand that all participants in the criminal justice system work cooperatively toward eliminating unnecessary delays and inefficiencies in the trial process.

IV. The History of the Proceeding

[18] Because the appellants’ submissions focus primarily on the reasonableness of the trial judge’s decisions, it is necessary to put those rulings in the context of the proceedings. Contrary to the approach taken by the appellants, that context includes all of the proceedings, especially the entirety of the proceedings in the Superior Court, and not just the few months leading up to the dismissal of the first s. 11(b) motion in November 2016.

(i) The Pre-Trial Period: Prior to September 2016

[19] This prosecution arrived in the Superior Court by way of a direct indictment in late May 2015. There had been a prolonged preliminary inquiry featuring a 22-day cross-examination of one witness by Kazman, who was self-represented. Levy, who was also self-represented, had indicated that he also intended to cross-examine this same witness at length. Kazman’s multi-week cross-examination, spread over more than a year, was still ongoing when the Attorney General preferred the indictment and moved the matter to the Superior Court.

[20] Very soon after the prosecution arrived in the Superior Court, a judge of that court began to case manage the trial. Kazman and Levy were unrepresented. Kazman indicated he proposed to bring several motions, including a s. 11(b) motion. Kazman and Levy both brought Rowbotham applications. The applications unrelated to s. 11(b) were eventually dismissed.

[21] In June 2015, the case management judge set a trial date for January 2016. The parties anticipated a six-month long jury trial. The allocated trial time included three or four days for an anticipated s. 11(b) motion. Consequently, as of June 2015, all accused were aware that any s. 11(b) motion would be argued some seven months later during the time allocated for the trial. The accused knew they had to perfect those motions before the trial date so the Crown could respond.

[22] The same judge continued to case manage the proceeding between July and November 2015. The progress of the proposed s. 11(b) motion came up at those case management hearings. None of the accused had ordered the necessary transcripts. It subsequently turned out that each was looking to the other to fund the acquisition of the transcripts. The case management judge reminded the accused of their obligations in respect of the s. 11(b) motion, which was still scheduled to be heard at trial in January 2016.

[23] In November 2015, Kazman told the case management judge that he did not have the funds necessary to order the transcripts. In December, he requested an extension of the deadline for filing his s. 11(b) material to the actual trial date in January. He told the case management judge that he had ordered the transcripts about two weeks earlier. This was the first indication of anything that had been done by way of obtaining the material necessary to bring the s. 11(b) motion. None of the other accused had done anything to perfect the s. 11(b) motion. The case management judge rejected Kazman’s request.

[24] Subsequently, Kazman, as well as both M. and A. Tehrani, applied for an adjournment of the trial date. In support of that request, Kazman advised the case management judge that he had not perfected the anticipated s. 11(b) motion, which was to have been brought at trial. It is unclear what, if anything, had been done to perfect that motion.

[25] At a case management conference in early January, the court granted the requested adjournment. The parties re-elected trial by judge alone. A second trial date was scheduled for September 2016. Four months were set aside for this trial.

[26] The parties discussed the proposed s. 11(b) motion at the January case management conference. Kazman told the case management judge that the necessary transcripts would be available in the next few weeks. He told the judge that he planned to bring other pre-trial motions. The trial judge advised Kazman that if he was bringing a s. 11(b) motion, he had to perfect that application by March 3, 2016. This was the second deadline imposed by the trial court in respect of s. 11(b) motions.

[27] Two days later, Kazman was back before the case management judge regarding a separate application and requested a further extension of the deadline for the preparation of his s. 11(b) motion. The trial judge extended the deadline for filing the material to April 6, and fixed May 13 as the date for the hearing of the s. 11(b) motion. The case management judge cautioned Kazman that if the necessary materials were not filed by him, the s. 11(b) motion could be summarily dismissed.

[28] By this time, the discussions concerning the preparation and argument of the s. 11(b) motions had been ongoing before the case management judge for about eight months. Deadlines for filing had been set and extended. The accused were well aware of their obligation to obtain all of the necessary transcripts.

[29] Some time in April 2016, Kazman advised the Crown that he was abandoning his s. 11(b) motion. On the scheduled date for the hearing of that motion in May 2016, Kazman told the court that he was abandoning the application “without prejudice” to bringing it back on at some future date. The case management judge told Kazman that he did not necessarily have the right to bring an abandoned application back before the court at some later stage.

[30] Although Kazman had assured the case management judge in November 2015 and January 2016 that all of the necessary transcripts would be available in the immediate future, it does not appear that any transcripts were ever provided to the Crown or filed with the court before Kazman abandoned his s. 11(b) motion in May 2016.

[31] In July 2016, Kazman advised the case management judge that he was now planning to bring a s. 11(b) motion in light of the recently released decision in Jordan. The case management judge reminded Kazman that his trial had been set seven months earlier for September and that any s. 11(b) motion that might be brought, had to be brought and perfected bearing in mind that the trial would proceed in September. This was the same approach the case management judge had taken a year earlier when Kazman advised that he intended to bring a s. 11(b) motion. At that time, the case management judge had fixed the trial date and indicated that the s. 11(b) motion would be heard during the time set aside for the trial.

[32] By the middle of August 2016, Kazman and Levy had filed notices of application and affidavits in support of their s. 11(b) motions. None of the other necessary supporting material had been filed. The other accused had not filed s. 11(b) motions or any supporting material.

[33] At a case management meeting on August 29, 2016, the case management judge told Kazman and Levy that their s. 11(b) motions could not be scheduled for argument as they had not been perfected as required by the Rules. Kazman, contrary to what he had been repeatedly told at case management meetings, argued that he should only have to produce the transcripts that he deemed relevant to his s. 11(b) motion. In any event, no transcripts had been provided to the Crown or filed with the court as of the August 2016 case management hearing. Kazman and the other accused had been on notice for well over a year about the requirements in respect of any s. 11(b) motion.

[34] At the August 29 case management meeting, the Crown asked the case management judge to dismiss the s. 11(b) motions for non-compliance with the Rules. The case management judge declined to do so but told Kazman and Levy that they must perfect their s. 11(b) motions, which included filing the necessary transcripts, 30 days before the motion could be heard. Kazman assured the case management judge that this was not a problem.

(ii) The Trial: September 2016 – December 2016

[35] On September 12, 2016, the first day of the scheduled trial, Kazman and Levy once again sought an adjournment of the trial to allow them to bring their s. 11(b) motions. They requested 30 days to perfect the s. 11(b) motion. Kazman stated that he had all the transcripts and could have everything filed “within a couple days”.

[36] The trial judge refused the adjournment request. After spending considerable time discussing what was and was not required on the s. 11(b) motions, the trial judge indicated that the trial would proceed, and that the s. 11(b) motion would be heard at or near the end of the trial in mid-December. She reminded the accused of their obligations in respect of perfecting the s. 11(b) motion.

[37] As the trial progressed, considerable time was spent discussing the ongoing preparation of the s. 11(b) material. The trial judge was told from time-to-time that most of the material had been delivered and the material that had not yet been delivered would be available in the very near future. The trial judge continued to emphasize the need for counsel to produce material in an orderly way that would allow her to fully understand the history of the proceedings, and efficiently adjudicate the s. 11(b) so as to minimize interference with the trial proceedings.

[38] In late-September 2016, the trial judge, at the Crown’s request, imposed a deadline for the perfection of the s. 11(b) motions. She ordered that anyone bringing a s. 11(b) motion must file the necessary material by October 28, 2016. That date was fixed in anticipation of the motion being heard in mid-December, at or near the end of the trial. The October 28 deadline gave the Crown an adequate opportunity to review the accused’s material and prepare and file responding material.

[39] In early October, the Crown advised the trial judge that they had not received many of the transcripts necessary for a proper hearing on the s. 11(b) motion. Both Kazman and Levy, who were unrepresented, began making references to lawyers who may or may not be acting for them on the s. 11(b) motion.

[40] On October 26, two days before the deadline set by the trial judge, a lawyer who had been retained by Kazman about 10 days earlier for the purposes of the s. 11(b) motion appeared before the trial judge. His submissions made two things clear. First, very little, if anything, had been done by any of the accused or their counsel to perfect the s. 11(b) motion. As he put it in an email to other counsel, no one was “serious” about the s. 11(b) motion before he was retained by Kazman in mid-October 2016. Second, he told the trial judge that in light of the recency of his retainer and the state of the preparation of the s. 11(b) motion, he could not possibly comply with the court’s deadline and could not give the court an informed assessment of when he might be able to perfect Kazman’s s. 11(b) motion.

[41] Newly-retained counsel for Kazman also outlined to the trial judge the steps he was taking to try and obtain the necessary transcripts. Finally, he told the trial judge that he had other commitments, which limited his availability to argue any s. 11(b) motion.

[42] Counsel for M. Tehrani and A. Tehrani advised the trial judge that many of the necessary transcripts had been ordered but were not yet available.

[43] The Crown argued that the abject failure of the accused to comply with the October deadline warranted a dismissal of the s. 11(b) motions. The trial judge rejected this submission, and instead gave the accused a further opportunity to perfect the motions. She extended the deadline to November 18. This was at least the fourth deadline that had been set in respect of the s. 11(b) motions since the case had arrived in the Superior Court.

[44] In granting this further extension, the trial judge made it clear that she expected counsel to cooperate in the perfection of the motions as Jordan had mandated. She reminded counsel that in addition to the necessary transcripts, she required proper factums and a compendium of transcripts to allow her to deal with the s. 11(b) motion expeditiously while minimizing interference with the ongoing trial. The accused were put on notice that the failure to comply with the November deadline would lead the Crown to request a summary dismissal of the s. 11(b) motion.

[45] On November 2, 2016, a lawyer appeared for Levy, indicating that he may shortly be retained by Levy on the s. 11(b) motion. This lawyer apparently had no familiarity with the history or status of the s. 11(b) motion. Specifically, he did not know about any deadlines that had been set. This lawyer had been retained by November 18, 2016.

[46] On the November 18 deadline, the s. 11(b) material remained deficient in many respects. Transcripts were still missing. Factums were either non-existent or inadequate. The trial judge had not received her requested transcript compendium, only having been provided with individual loose transcripts, none of which identified relevant passages. Nor had the transcripts of the appearances before the case management judge been properly redacted so that the trial judge could refer to that material insofar as it was relevant to the s. 11(b) motion.

[47] Once again, the Crown submitted that the court should summarily dismiss the s. 11(b) motions for non-compliance with the Rules and the trial judge’s orders. This time, the trial judge accepted the Crown’s submission, and dismissed the motions.

[48] In her oral reasons, the trial judge stressed the repeated non-compliance with deadlines and court orders in respect of the perfection of the motions. She observed that the repeated and ongoing discussions and negotiations over the s. 11(b) motion had been a significant distraction and time-waster during the trial. Finally, she found that the Crown’s ability to properly respond to the motions was compromised by the manner in which the material had been presented, and by the continued delay in the bringing of the motions.

[49] After the trial judge dismissed the s. 11(b) motion for non-compliance with the Rules and the deadlines she had set, Kazman asked whether he could re-open the s. 11(b) motion as time continued to accrue. Although Kazman raised this issue personally with the trial judge, his s. 11(b) lawyer was present at the time.

[50] The trial judge told Kazman that she did not see how any later s. 11(b) motion could be entertained, given that the prejudice suffered by the Crown through the delays in bringing the s. 11(b) motion would only be exacerbated if the motion was brought on at some later point in the trial.

[51] The trial continued into December with the defence calling evidence. On December 14, 2016, the trial judge received a motion brought by counsel for an accused who was ultimately acquitted, seeking leave to re-open the s. 11(b) motion. The request was based on additional material relevant to the s. 11(b) motion that was now available but had not been available in November. Counsel for M. Tehrani filed material in support of the motion. The other accused did not file any material or formally join in the motion.

[52] The trial judge initially indicated she was not inclined to review the material filed on the motion for reconsideration. Ultimately, however, she did accept and examine that material.

[53] In dismissing the motion for reconsideration, the trial judge referred to some of the material that had been placed before her by counsel on that motion. In the trial judge’s view, that material shed considerable light on the reason the motions had not been perfected by the October or November deadlines set by her. The trial judge said, in Kazman (2016 applications), at para. 128:

I was now aware of why the two deadlines had not been complied with and it was clear to me that it was not because of a failure of counsel to cooperate or the lack of cooperation from transcriptionists but rather a failure of counsel to take any steps to do the work needed to perfect their applications until after the First Deadline and to a large extent just before the Second Deadline. [Emphasis added.]

[54] The trial judge was also satisfied that although there was significant additional material filed on the motion for reconsideration, the s. 11(b) motion material remained deficient in many respects. The inadequate state of the material both prejudiced the Crown and compromised the trial judge’s ability to properly deal with the motions while continuing to efficiently conduct the trial to verdict. The trial judge declined to reconsider her earlier ruling. The trial continued.

(iii) The Trial: December 2016 – April 2018

[55] Although the Crown’s case had been completed slightly ahead of schedule in November 2016, the defence case lasted longer than had been anticipated. The defence evidence was completed on February 2, 2017, about a month behind schedule.

[56] The parties filed written submissions in March 2017. The trial judge reserved judgment. She eventually released reasons totalling almost 400 pages in September 2017: see R. v. Kazman, 2017 ONSC 5300.

[57] In early-October 2017, dates were set for sentencing submissions. By agreement, the accused would make sentencing submissions separately but the trial judge would impose all sentences at the same time. M. and A. Tehrani made sentencing submissions on November 25, 2017. On that date, Levy asked the trial judge to delay his sentencing submissions into January 2018 so that he could retain counsel for sentencing purposes. The trial judge reluctantly agreed, and adjourned Levy’s sentencing submissions to January 5, 2018. Counsel for Levy appeared on that day indicating he had just been retained. He requested a further adjournment so that he could prepare Levy’s sentencing submissions. The trial judge adjourned Levy’s sentencing submissions to March 9, 2018.

[58] On March 8, 2018, the day before Levy’s newly-retained lawyer was scheduled to make sentencing submissions, Levy appeared before the trial judge with two different lawyers. Levy had retained these lawyers to bring an application for a reconsideration of the s. 11(b) motion. Levy’s s. 11(b) lawyers came to court armed with the application, several volumes of transcripts, a factum, and a book of authorities. None of the material had been served on the Crown. Contrary to the very clear instructions in Jordan, there had been no communication with the Crown by Levy’s s. 11(b) lawyers, and no attempt to work cooperatively with the Crown in bringing the motion forward.

[59] Not surprisingly, Crown counsel was required to ask for an adjournment to examine the material filed by Levy’s two s. 11(b) lawyers on March 8. The trial judge adjourned the motion to re-open the s. 11(b) motion to March 27, 2018.

[60] On March 9, 2018, sentencing submissions were heard. The trial judge indicated she was prepared to sentence the accused on March 19. She also advised counsel for Levy that Levy could not be sentenced on that day in the face of the outstanding motion he had brought to re-open the s. 11(b) motion. Since all of the accused wanted to be sentenced at the same time, sentencing was adjourned.

[61] On March 27, 2018, the Crown and Levy’s lawyers appeared and made submissions on the s. 11(b) motion to re-open. The Crown argued, consistent with its position throughout, that the trial judge should not hear the motion on the merits but should dismiss the motion for non-compliance with various Rules and court orders.

[62] During the lengthy submissions by both counsel on the issue of whether the motion should be summarily dismissed, it became clear that counsel did not agree on whether the material filed by Levy’s s. 11(b) lawyers on March 8th contained all of the relevant transcripts. The trial judge asked counsel to resolve the matter between them and report back to her by email no later than April 3.

[63] Instead of the requested email, the trial judge received an “emergency motion” brought by Levy’s s. 11(b) lawyers. The material filed on the emergency motion sought to demonstrate that there were no missing transcripts in the material that had been filed on Levy’s behalf.

[64] The trial judge concluded that there was no need to hear the emergency motion. She decided that Levy’s motion to re-open the s. 11(b) claim should be dismissed for reasons that did not turn on the completeness of the record eventually filed on his behalf on March 8, 2018. The trial judge determined that it was, therefore, unnecessary to further delay matters by hearing submissions on the state of the s. 11(b) record.

[65] The trial judge released written reasons on April 5, 2018, dismissing Levy’s motion to re-open the s. 11(b) motion: see Kazman (2018 application). Reasons for sentence were delivered a week later on April 12, 2018: see R. v. Kazman, 2018 ONSC 2332 (Kazman (sentence)).

V. Did the Trial Judge Err in Summarily Dismissing the s. 11(b) Motion in November 2016?

[66] The appellants submit that the trial judge acted unreasonably in imposing the “drastic” remedy of summarily dismissing the s. 11(b) motion. They submit that the trial judge failed to consider several factors, including the steps actually taken to perfect the s. 11(b) motion, the complexity and amount of material needed to perfect the motion, the self-represented status of two of the accused (Kazman and Levy) through much of the proceeding, and the fact that, as it turned out, the trial went well beyond the anticipated completion date, thereby offering ample opportunity to argue the s. 11(b) motion without interfering with the trial or prejudicing the Crown.

[67] I see no reason to interfere with the trial judge’s conclusion that it was not in the interests of justice to permit a further extension of the deadline for the filing of the required s. 11(b) material. The trial judge clearly appreciated that a summary dismissal was a drastic remedy. Her conclusion that the circumstances of this case called for that drastic remedy was not unreasonable.

[68] The trial judge reviewed, as she was required to do, the entire history of the s. 11(b) motion in the proceeding. That history began almost immediately upon the case arriving in the Superior Court in mid-2015. The history showed repeated missed deadlines, repeated requests to adjourn the trial to properly perfect the s. 11(b) motion, little or no effort to perfect the motion until late October 2016, and serious misrepresentations as to the status of the s. 11(b) material by both Kazman and Levy. This prolonged pattern of conduct suggested that the accused had little, if any, real interest in actually bringing a s. 11(b) motion.

[69] The appellants’ submissions ignore the accused’s failure to pay any attention to the October 2016 deadline until a few days before it expired. On the trial judge’s findings, there was also little attention paid to the November 2016 deadline. The trial judge was entitled to put considerable weight on the attitude of the accused as reflected in their approach to the deadlines she had set. As Kazman’s own lawyer told other counsel when he arrived on the scene in mid-October, no one was “serious” about the s. 11(b) motion until very shortly before the deadline. Counsel’s reference also applies to his own client. Kazman did little, if anything, until he retained counsel very shortly before the October 2016 deadline.

[70] It is unreasonable to expect that deadlines set by a trial judge can simply be ignored by an accused confident that the trial judge will feel obliged to set new deadlines. To proceed on the premise that an accused is entitled to a new deadline whenever one is feasible in the circumstances is to accept and promote the “culture of complacency toward delay in the criminal justice system”, so clearly and emphatically rejected by the Supreme Court of Canada: Cody, at para. 1; Kazman (2016 applications), at paras. 93, 106-110.

[71] The appellants’ submission that the trial judge should have taken into account that the motion was nearly perfected by the November deadline conflicts directly with the trial judge’s findings. The material was far from complete. Further, given the history of this matter, the trial judge quite reasonably had no confidence that the accused would comply with any further deadline she might set: see Kazman (2016 applications), at paras. 113-114, 118.

[72] In refusing to grant a further extension beyond November 2016, the trial judge reasonably took into account the conduct of the accused, especially Kazman and Levy, in respect of the discussions concerning the s. 11(b) motion which had been ongoing since the trial started. Kazman appeared to be the prime mover on the s. 11(b) motion. Levy had filed an application in support of the motion.

[73] On the trial judge’s findings, both Kazman and Levy had misrepresented the status of the s. 11(b) material in an unsuccessful attempt in September 2016 to convince the trial judge to adjourn the trial. Common sense dictates that trial judges take into account the reliability of any representations being made about the status of material needed to perfect a motion. Given the misrepresentations made to her by Kazman and Levy, it was hardly surprising that the trial judge would be most reluctant to act on representations made by them or on their behalf.

[74] The appellants submit that the trial judge unreasonably mischaracterized the statements of Kazman and Levy as lies. They argue that the statements, while incorrect, were not deliberately false. In those statements, Levy and Kazman represented that things had been done or were about to occur which subsequent events demonstrated had not been done and were not about to occur. I do not see how it can be said that the trial judge acted unreasonably in characterizing the statements as deliberately false: see Kazman (2016 applications), at paras. 24-25, 104.

[75] The trial judge also properly considered the negative impact on the trial and the administration of justice were she to grant yet further delays in the perfection of the s. 11(b) motion. As the trial judge pointed out, the evidence was supposed to end by late December. She had judicial duties elsewhere in January. The trial judge was concerned that valuable court time had been lost and would continue to be lost over ongoing discussions about material filed or not filed in respect of the s. 11(b) motion. These ongoing discussions, combined with the accused’s failure to file appropriate factums and the trial judge’s requested compendium, would cause additional disruptions in the trial process and additional delays in the completion of the trial.

[76] The trial judge was also entitled to take into account the effect of the accused’s failure to meet the deadlines on the Crown. The trial judge was satisfied that if she extended the deadlines for filing the necessary material yet again, the s. 11(b) motion could be heard by the end of December (the anticipated end of the evidence at trial) only if the Crown was required to respond on short notice to the motion. The trial judge reasonably concluded that this would prejudice the Crown and impair the proper adjudication of the motion: Kazman (2016 applications), at paras. 118-119, 129.

[77] The trial judge’s reasons display a full command of the tortured history of the s. 11(b) proceedings in this matter. They offer a full and cogent explanation for the order she made in November 2016. If the new mindset proclaimed by Jordan and reaffirmed in Cody is to become the reality in criminal courts, this court must affirm decisions like the one made by the trial judge in November. That decision was entirely reasonable.

[78] Apart from the reasonableness of the trial judge’s decision, the appellants also argue that the trial judge made a processing error in those reasons. They contend that she failed to consider events which transpired between November 2016, when she summarily dismissed the s. 11(b) motion with oral reasons, and March 2018, when she released her written reasons for dismissing the motion in November 2016.

[79] I confess that I do not understand this submission. The trial judge’s reasons, although released in March 2018, were offered to explain why she made the order she did in November 2016 (and December 2016). I think it would have been wrong for her to attempt to justify that decision based on subsequent events. Similarly, subsequent events cannot render unreasonable what was a reasonable decision at the time it was made.

[80] If the appellants took the position that subsequent events warranted a further s. 11(b) motion, they could have brought the appropriate motion before the trial judge. No such motion based on unanticipated delay post-November 2016 was brought until March 2018. That motion was brought by Levy only.

[81] The arguments advanced on behalf of Kazman and Levy that they were treated unfairly by the trial judge between September and November 2016 can be disposed of in short order. The appellants contend that they were not given adequate assistance by the trial judge in preparing their s. 11(b) motion, and that she should have given them more leeway in terms of compliance with her orders and the Rules because they were unrepresented.

[82] This submission turns a blind eye to the realities as found by the trial judge. Kazman and Levy did not fail to perfect their s. 11(b) motion in a timely way because they did not know what was needed, or because the task was too complicated, or because they were missing some of the necessary minutiae. Kazman and Levy failed to perfect as required because, as Kazman’s own lawyer indicated, no one took the October deadline seriously until a few days before the deadline. Kazman did next to nothing to perfect the motion until he hired a lawyer a few days before the deadline. Levy did next to nothing before the October deadline, and continued to do next to nothing until about a year later in November 2017 when some transcripts were ordered on his behalf.

[83] On the trial judge’s findings, Kazman and Levy not only did not pursue the preparation of the s. 11(b) material, they misrepresented the status of that material to the trial judge. I see no merit to the claim that the trial judge had a duty to be more helpful to Kazman and Levy in the preparation of their s. 11(b) motion when on the findings of fact, they were both lying to her about the status of their preparation and doing little, if anything, to prepare the necessary material.

VI. Did the Trial Judge Err in Dismissing the Motion to Re-Open the s. 11(b) Application in December 2016?

[84] The onus was on the accused who sought leave to re-open the s. 11(b) motion to satisfy the trial judge that there were satisfactory grounds for doing so. As I understand the record, counsel argued that they should be allowed to re-open the s. 11(b) material as the additional material placed before the court since the motion was dismissed in November had overcome the many shortcomings in the s. 11(b) material. Counsel submitted that there was now a proper record before the trial judge for a determination of the s. 11(b) motion on the merits.

[85] Once again, I am satisfied that the trial judge acted reasonably in declining to exercise her discretion in favour of re-opening the s. 11(b) motion. She relied on the following:

• M. Tehrani and the other accused who sought to re-open the s. 11(b) motion had done virtually nothing to bring the motion forward according to the October and November deadlines previously set by the trial judge. M. Tehrani had not ordered any of the transcripts.
• Many of the deficiencies in the material that had caused the trial judge to dismiss the motion summarily in November 2016 had not been remedied. Some of the necessary transcripts had still not been filed.
• Allowing the accused to re-open the s. 11(b) motion in December would cause the same serious prejudice to the Crown, and the same interference with the orderly conduct of the trial, as would have occurred had the trial judge extended the deadline for perfection in November 2016.

[86] The appellants submit that the trial judge acted unreasonably in refusing to allow counsel to re-open the s. 11(b) motion in December. They submit that the trial judge acted on a technical and strict application of a practice direction relating to s. 11(b) motions that had only been recently put into force: Provincial Practice Direction Regarding Applications under s. 11(b) of the Canadian Charter of Rights and Freedoms (Effective September 1, 2016). [^3]

[87] I reject the appellants’ description of the basis upon which the trial judge refused to re-open the s. 11(b) motion. Certainly, the trial judge was concerned about the terms of the practice direction. She based her refusal, however, on other factors, including the failure to make even modest efforts to comply with earlier court-imposed deadlines, the continued inadequacy of the material, and the ongoing prejudice to the Crown and the trial process.

VII. Did the Trial Judge Err in Dismissing Levy’s Motion to Re-Open the s. 11(b) Motion in April 2018?

[88] The trial judge gave extensive reasons for summarily dismissing Levy’s motion to re-open the s. 11(b) motion in April 2018. Those reasons not only cross the reasonableness threshold, they establish an overwhelming case for the summary dismissal of the motion.

[89] The trial judge accepted the Crown’s submission that Levy had deliberately misled the court in the post-conviction phase of the trial proceedings. Levy, and later a lawyer retained by him, had secured adjournments of Levy’s sentencing proceedings, first, to allow Levy to hire a lawyer, and second, to allow the lawyer he hired at the last moment to prepare for sentencing.

[90] At the same time that Levy was obtaining adjournments in respect of the sentencing, two different lawyers were compiling material for yet another s. 11(b) motion by Levy. While it is unclear exactly when Levy formally retained the two s. 11(b) lawyers, transcripts necessary for the s. 11(b) motion were ordered in November 2017, some five months before the motion was brought. Neither the Crown nor the court received any advance notice of the proposed s. 11(b) motion.

[91] Levy could not bring a s. 11(b) motion after he was sentenced. The trial judge would have been functus officio. However, as long as the sentencing was adjourned and remained outstanding, Levy had the opportunity to bring a further s. 11(b) motion. The adjournments Levy obtained in the sentencing proceedings effectively ensured that those proceedings would remain alive until he decided to move on his s. 11(b) motion. Levy made no mention of any possible s. 11(b) motion when he sought the adjournments of his sentencing proceedings.

[92] I regard Levy’s actions as an abuse of the process of the trial court. To allow him to proceed with the s. 11(b) motion would not only reward that misconduct, it would fly directly in the face of Jordan’s command that all parties collaborate to use court resources efficiently. Not only was there no collaboration with the Crown or the court in respect of this proposed s. 11(b) motion, the trial judge aptly described the manner in which the motion was brought as a “blatant attempt to ambush the Crown and the court”: Kazman (2018 application), at paras. 72, 83.

[93] Although I have no hesitation in concluding that the motion could be properly dismissed based on the conduct described above, there were other good reasons to summarily dismiss the motion. By bringing the motion without any notice or consultation with the Crown, counsel virtually assured that if the trial judge had allowed the motion to proceed, there would have been further lengthy delays while counsel wrangled over the adequacy and completeness of the record put forward unilaterally by Levy. The assumption that the s. 11(b) motion would have gone forward smoothly and without delay ignores the history of this proceeding and the tactics used in bringing the motion in March 2018. It is safe to assume that many months would have gone by before this motion could have been determined on its merits.

[94] In refusing to consider the s. 11(b) motion on its merits in April 2018, the trial judge also took into account Levy’s conduct in respect of the s. 11(b) motion that had been dismissed in November 2016. Levy had done virtually nothing to pursue that motion. He had not ordered transcripts and had lied to the court as early as September 2016 about efforts to obtain the necessary transcripts: Kazman (2018 application), at para. 54.

[95] In the absence of any genuine effort by Levy to bring a s. 11(b) motion forward according to the schedule set by the court, the trial judge correctly put the onus on Levy to show cause as to why the motion should be entertained on the eve of sentencing, especially when it would inevitably result in a further significant delay. The trial judge said, in Kazman (2018 application), at para. 84:

The interests of justice would not be served by my giving Mr. Levy leave at this late date to finally get serious about bringing a s. 11(b) application.

[96] In refusing to allow Levy to advance the s. 11(b) motion, the trial judge also considered whether the post-conviction proceedings could give rise to a tenable s. 11(b) claim that had not existed when the earlier motions were dismissed. The trial judge pointed out that the delay from the end of the evidence at trial (February 2017) to the anticipated sentencing in March 2018 resulted from several factors, including the time needed to allow for the preparation of written submissions, and five months required by the trial judge to prepare her several hundred pages of reasons for judgment. After the reasons were delivered, time was needed for sentencing submissions. Various dates were set on consent and with a view to accommodate the accused request that all of the accused be sentenced at the same time. The sentencing submissions were delayed by Levy’s request for adjournments so that he could retain counsel.

[97] I see no error in the trial judge’s assessment that post-conviction events did not give cause to reconsider s. 11(b) based on the post-conviction events: Kazman (2018 application), at paras. 64-67.

[98] There is no merit to Levy’s argument that he did not have an opportunity to respond to the Crown’s argument that his s. 11(b) motion should be summarily dismissed. That had been the Crown’s position in respect of s. 11(b) motions since August 2016. Counsel made full submissions in response to the Crown’s position. The trial judge’s determination that she did not have to hear further submissions on an issue which she had concluded was irrelevant to her decision did not work any unfairness on Levy.

[99] The conviction appeals are dismissed.

VIII. The Sentence Appeals

A. Kazman

[100] Counsel for Kazman submits that the trial judge over-emphasized the principles of general deterrence and denunciation in imposing a seven-year jail sentence. He submits that the restitution order was inappropriate given Kazman’s dire financial circumstances and his inability to pay the order.

[101] The trial judge determined that Kazman and Levy were at the centre of a scheme used to obtain funds through the Small Business Financing Program. The scheme was fraudulent from the outset. The trial judge said, in Kazman (sentence), at para. 393:

…certainly with respect to Messrs. Kazman and Levy, this was a pre-meditated, sophisticated, “large scale,” multi-million dollar complex fraud of the Government of Canada’s [Small Business Financing Program] and five major banks. It involved a high level of planning and orchestration, skill, deception and covert behaviour that took place over a lengthy period of time; many months and in some cases years. There were multiple victims, the principal ones being the Canadian taxpayers.

[102] In addition to convictions on five fraud charges, Kazman was convicted of laundering the proceeds of that criminal activity and committing the frauds for the benefit of a criminal organization. The latter conviction required the imposition of a sentence consecutive to the sentence imposed on the fraud charges: Criminal Code, R.S.C. 1985, c. C-46, s. 467.14.

[103] Kazman was a disbarred lawyer. The disbarment arose out of fraudulent mortgage transactions. Kazman perpetrated the frauds that are the subject of this appeal, while his appeal from his disbarment proceedings was underway. Kazman’s personal history offers little hope of rehabilitation.

[104] The trial judge was alive to mitigating factors pertaining to Kazman, including his health and the negative impact of incarceration on his family: Kazman (sentence), at paras. 481-483. In my view, the total sentence imposed does take those factors into account. The period of incarceration was fit.

[105] There is really no argument against the restitution order made. As counsel acknowledges, a person’s inability to pay a restitution order is not determinative of whether the order should be granted. It may be that the order will have very little ultimate value to the victims of Kazman’s crimes. That is no reason to refuse to make the order.

B. A. Tehrani

[106] A. Tehrani argues that he should have received a conditional sentence of two years less a day, rather than the custodial sentence of 14 months imposed by the trial judge. In support of this submission, counsel relies on A. Tehrani’s limited involvement in the fraudulent scheme (he was involved in only a single loan in the amount of $188,190), his minimal, if any, profit from the scheme, his positive antecedents, and his ongoing medical and financial problems.

[107] Counsel for A. Tehrani also invokes the parity principle. He notes that a co-accused who received a conditional discharge was similarly, or even somewhat more extensively involved in the scheme than A. Tehrani. That accused, however, pleaded guilty and made some restitution.

[108] Finally, counsel submits that the trial judge mischaracterized A. Tehrani’s offence as involving a breach of trust and used that mischaracterization to require that A. Tehrani establish “exceptional circumstances” as a precondition to the imposition of a non-custodial sentence.

[109] With the exception of the last argument, all of the arguments made on appeal were made and considered by the trial judge in her reasons for sentence: Kazman (sentence), at paras. 462-467. The trial judge considered the parity argument, but ultimately concluded that for sentencing purposes, A. Tehrani was best compared to his brother. Like his brother, A. Tehrani had gone to trial, made no restitution, and showed no remorse for his conduct. M. Tehrani was, however, involved in two fraudulent loans, as opposed to A. Tehrani’s one fraudulent loan. The trial judge gave M. Tehrani a custodial sentence of two years less a day: Kazman (sentence), at paras. 464-67. The shorter sentence imposed on A. Tehrani adequately reflects his lesser involvement in the fraudulent scheme. The trial judge correctly applied the parity principle.

[110] I also cannot accept that the trial judge erred in referring to the offence as involving a kind of breach of trust. Further, she did not decline to impose a non-custodial sentence only because the offence involved a breach of trust.

[111] The trial judge, in reviewing the relevant authorities, referred to cases from this court which have indicated that frauds targeting public funds engage trust-like considerations that are properly viewed as aggravating on sentence: see R. v. Gray (1995), 76 O.A.C. 387, at para. 32 (C.A.). The trial judge did not err in characterizing this fraud as involving public funds and an element of trust. Targeting entities funded by taxpayers is an aggravating factor when sentencing for fraud-related offences.

[112] In concluding that a custodial sentence was necessary, the trial judge followed a long and unbroken line of authority from this court which accepts that deterrence and denunciation must be the dominant considerations in sentencing for large-scale sophisticated frauds. In most cases, those factors will require incarceration. The trial judge was satisfied that A. Tehrani’s circumstances did not justify a departure from that norm. I see no reason to interfere with the trial judge’s careful balancing of the various factors relevant on sentencing. The sentence imposed was fit.

[113] I would grant leave to appeal the sentences, but would dismiss the appeals.

Released: JAN 16 2020 Doherty J.A. I agree. K. van Rensburg J.A. I agree. C.W. Hourigan J.A.

Footnotes

[^1]: Now Innovation, Science and Economic Development Canada. [^2]: Although the trial judge’s written reasons were released in March 2018, long after the dismissal of the motions, the appellants do not argue that the written reasons cannot be relied on as accurately reflecting the trial judge’s reasons for dismissing the motions. [^3]: This practice direction was released shortly after Jordan as a standalone document but since the trial has been merged to become Part VI of the Provincial Practice Direction Regarding Criminal Proceedings.