DATE: 20040820

DOCKET: C37711

COURT OF APPEAL FOR ONTARIO

LASKIN, CHARRON and LANG JJ.A.

B E T W E E N:

HER MAJESTY THE QUEEN

Shawn Porter

for the respondent

Respondent

• and -

ALEXANDER GEORGE KIRK

Alan D. Gold

for the appellant

Appellant

Heard: May 31, 2004

On appeal from the conviction entered by Justice William R. Wolski of the Ontario Court of Justice on November 28, 2001 and from the sentence imposed by Justice Wolski on February 7, 2002.

CHARRON and LANG JJ.A.:

Overview

[1] The appellant, Alexander George Kirk, was a general contractor who did home renovations in Toronto. Following his trial before a judge sitting without a jury, he was convicted of six counts of fraud in relation to contracts entered into with homeowners between July and October 1999. The trial judge sentenced him to nine months imprisonment and ordered restitution in the total amount of $42,083. Mr. Kirk appeals against both conviction and sentence.

[2] The main issue on the conviction appeal is whether the trial judge erred in finding that the evidence on any one count was admissible as evidence on the other counts. If the appellant succeeds on this issue and the evidence is considered separately for each count, the appellant submits that the verdict is unreasonable on four of the six counts. Finally, although not argued orally, the appellant submits in his factum that the trial judge erred in his assessment of the Crown’s burden of proof. On the sentence appeal, the appellant submits that the trial judge erred in refusing to grant a conditional sentence and in his calculation of the quantum of the restitution order.

[3] We would dismiss the appeal against the convictions but allow the appeal against sentence, in part, and substitute a conditional sentence instead of the term of imprisonment.

The Evidence at Trial

[4] The essential facts are not in dispute. For the purposes of this appeal, they can be summarized as follows.

[5] The complainants were all homeowners who, between July 2 and October 5, 1999, contracted with Mr. Kirk, the sole proprietor of his company, to renovate their homes. For those contracts signed in the summer, the appellant obtained deposits, began and completed significant portions of the renovations, at times negotiated with the owners regarding extras and further payments, but then ultimately abandoned the sites. As the summer wore on, the appellant entered into more contracts and completed less work. At the beginning of September, the first homeowners brought a civil action against Mr. Kirk. At the beginning of October, Mr. Kirk took funds totalling $20,800 from two homeowners, but completed no work for them, other than the conceptual drawings prepared before the contracts were entered into. By the end of October, Mr. Kirk was not to be found. His address was a post office box, his cell phone number was cancelled, and he did not respond to faxes. In total, the owners suffered a loss of approximately $64,000 (the restitution order in the amount of $42,083 did not include the loss to one complainant whose civil claim was settled prior to the criminal trial). Some homeowners contacted the police and on December 31, 2001, Mr. Kirk was charged with fraud.

[6] Mr. Kirk did not testify and called no evidence.

The Argument and Ruling on the Similar Fact Issue

[7] Mr. Kirk’s intention was the primary issue at trial. At the close of evidence and, by agreement, as part of his closing submissions, Crown counsel brought an application to have the evidence on each count admitted to shed light on Mr. Kirk’s intention with respect to each of the other counts. Crown counsel acknowledged the well-established requirement that on a multi-count indictment, the trier of fact is to consider only the evidence relevant to a specific count in determining the accused’s guilt or innocence on that count. In this case, however, Crown counsel argued that given the temporal connection between the counts, all counts were part of a series of events and Mr. Kirk’s conduct with respect to all of the contracts provided circumstantial evidence of his intent with respect to each of the contracts. The Crown further argued that the totality of the evidence was material and relevant to each count to prove motive, to negative the defence of lack of criminal intent, and to prove the existence of a plan, system, pattern, or scheme of fraud.

[8] Crown counsel argued that the “similar fact test”, which requires the trial judge to balance the probative value of the evidence against its prejudicial effect, was met in this case. Crown counsel also addressed the danger of propensity reasoning – that the evidence of discreditable conduct on the other counts might lead to an inference of guilt on the particular count – and argued that the probative value of the evidence in this case far exceeded the risk of general propensity reasoning.

[9] Defence counsel opposed the Crown’s application and argued that the general rule should apply with the evidence considered separately in respect of each count. However, he conceded in argument that he felt as if “speaking out of two sides of [his] mouth” because he also was asking the court in some respects to consider the “overall picture of what was happening to [Mr. Kirk] that summer”. It was the defence position at trial that the Crown evidence showed that he had grossly under-quoted on the first contract; he ran into resulting financial difficulties; his unpaid workers refused to remain on their jobs; he was confronted with a civil lawsuit over the first contract; and he was a poor businessman unable to cope with the resulting consequences and financial collapse of his business. He denied any fraudulent intent.

[10] The trial judge identified the material issue on each of the six counts as being “whether one can infer from the accused’s actions, with respect to his dealings with the six complainants, that he operated with a criminal intent.” He then instructed himself on the relevant evidentiary test:

Evidence is relevant if there is a logical probative value to the evidence in relation to a material issue in the trial. The Crown must demonstrate that there is a rational connection between the evidence tendered and the proposition sought to be established. However, evidence which is relevant may still be excluded if its probative value is outweighed by its prejudicial effect. Generally speaking, acts and declarations of an accused towards another individual not named in the count being tried, is discreditable conduct evidence and inadmissible. However, evidence of discreditable conduct may still be admissible if the balance between prejudice and probative value is in favour of such evidence being received in the particular case being tried before the court.

In assessing the value of such proposed evidence, I must have regard to the following:

(1) the strength of the evidence

(2) the similarity of the evidence

(3) and the extent to which the evidence tends to prove the proposition being asserted.

[11] The trial judge then ruled that the totality of the evidence was admissible in respect of each count for the following reasons:

As I have already indicated, the credibility and reliability of the complainants individually, relating to the specific acts or declarations made by Mr. Kirk to them, was not made a material issue by the defence. Rather, it is the inferences that may or may not be drawn from the complainants’ evidence. Accordingly, the strength of the evidence is not being contested by Mr. Kirk generally.

With respect to the similarity of the conduct, in each dealing with each complainant, Mr. Kirk enters into written contracts during a discrete time frame between July and October, 1999, to perform work at a stated cost, on a completion schedule with each of the complainants, and with a schedule of payments to be paid by them. The evidence is clearly and cogently similar on each count.

The extent to which the evidence tends to prove the proposition asserted is also a consideration. Clearly, Mr. Kirk’s dealings with each of the complainants during this discrete time frame of July/October, 1999, is very probative evidence of whether he formulated a fraudulent criminal intent. On the prejudice side of the scale, I remind myself that it is the effect that the evidence may have, compelling a judge to find the accused guilty, not on the strength of the evidence admissible against him in relation to each offence in which he is charged, but rather because the evidence of discreditable conduct so tarnishes his character so as to evoke a prejudice in relation to the fact finding process.

Having analysed the evidence proper, I am satisfied that the evidence tendered has a high probative value on the sole essential element of the offence (fraudulent intent) which is the material issue before this court. I am satisfied that the prejudicial effect, if it exists, is so minimal as to not warrant exclusion. Accordingly, I find that the acts and declarations in relation to each of the counts individually, is admissible for the purposes of the Crown proving, beyond a reasonable doubt, that the accused had the necessary fraudulent intent [emphasis added].

Analysis

(a) The Appeal Against Conviction

[12] Counsel for the appellant submits that the trial judge erred in considering the totality of the evidence in arriving at his verdict on each count because the similarities among the various contracts were insufficient to warrant admission as similar fact evidence. He argues that the similarities noted by the trial judge, as emphasized in the excerpt above, were, at best, generic in nature and could be characteristic of any contract for renovations. He submits that the trial judge erred by failing to take into account the dissimilarities in the six contracts.

[13] We do not accept this argument. While there were a number of similarities and dissimilarities between the various contracts and Mr. Kirk’s dealings with the various complainants, it is our view that this comparative analysis does not advance the argument. The “principal driver of probative value” (to use the words of Binnie J. in R. v. Handy, 2002 SCC 56, [2002] 2 S.C.R. 908 at para. 76) in this case was not the degree of similarity between the various contracts. Rather, it was the temporal connection and consequent interconnectedness of the events from which an inference could be drawn about Mr. Kirk’s intention in relation to each contract. Evidence of discreditable conduct other than that which pertains to the particular offence in question may be compelling without being similar. It all depends on the issue to which it relates. In discussing the requirement that there be a sufficient degree of similarity, the Supreme Court of Canada in Handy made the point as follows at paras. 78-80:

The issue in the present case is not identification but the actus reus of the offence. The point is not that the degree of similarity in such a case must be higher or lower than in an identification case. The point is that the issue is different, and the drivers of cogency in relation to the desired inferences will therefore not be the same. As Grange J.A. correctly pointed out 20 years ago in R. v. Carpenter (1982), 1982 3308 (ON CA), 142 D.L.R. (3d) 237 (Ont. C.A.), at p. 244:

The degree of similarity required will depend upon the issues in the particular case, the purpose for which the evidence is sought to be introduced and the other evidence.

If, for example, the complainant in this case had not been able to identify the respondent as the perpetrator of the alleged offence, the conduct described by the ex-wife was not so “particular and distinctive” as to amount to a “signature” or “fingerprints at the scene of the crime” that would safely differentiate him from other possible assailants.

On the other hand, in a case where the issue is the animus of the accused towards the deceased, a prior incident of the accused stabbing the victim may be admissible even though the victim was ultimately shot – the accused says accidentally (Rosenberg, supra [“Evidence of Similar Acts and Other Extrinsic Misconduct”, in National Criminal Law Program, Criminal Evidence (1994), section 8.1], at p. 8). The acts could be said to be dissimilar but the inference on the “issue in question” would nonetheless be compelling.

[14] Indeed, it is often the case that evidence going to intent, although dissimilar, can nonetheless be compelling and, therefore, admissible. The latter example set out in Handy demonstrates how the label “similar fact evidence” can be misleading: see R. v. B.L. (1997), 1997 3187 (ON CA), 9 C.R. (5th) 38 (Ont. C.A.) at footnote 2.

[15] In the circumstances of this case, the cogency of the evidence can be best expressed in the words of Doherty J., as he then was, in R. v. Sahaidak, [1990] O.J. No. 3228 (H.C.) at para. 150:

In most cases where a multi-count indictment is before the Court, evidence adduced on one count is not admissible for or against an accused on the other counts. Where, however, the events underlying the various counts are part of an ongoing course of dealings, and where those events are interwoven and interrelated so that as a matter of logic and common sense, the events underlying one count also enlighten and assist the trier of fact in understanding and assessing the evidence on the other counts, then evidence directly relevant to one count is admissible on the other counts as well. R. v. McNamera et al. (No. 1) (1981), 1981 3120 (ON CA), 56 C.C.C. (2d) 193 at 284 (Ont. C.A.), aff’d. without reference to this point 1985 32 (SCC), [1985] 1 S.C.R. 662.

[16] It is particularly noteworthy that the defence was also relying on the “overall picture”, that is the interconnectness of the evidence on all of the counts, in support of its position that the accused lacked the requisite criminal intent on any one count.

[17] Hence, in our view, the trial judge made no error in considering the totality of the evidence in arriving at his verdict on each count. We would not give effect to this ground of appeal.

[18] In light of our conclusion on the main ground of appeal, it is not necessary to consider whether the evidence, considered separately in respect of each count, can reasonably support a finding of guilt on all of the counts. When considered in its totality, there is no question that the verdicts were reasonably supported by the evidence.

[19] We also reject the contention that the trial judge erred in his assessment of the Crown’s burden of proof. A fair reading of the reasons for judgment demonstrates that the trial judge appreciated the defence position that Mr. Kirk had no criminal intent, that he was struggling valiantly to keep his business afloat, and that, in the end, despite the best of intentions, he was unable to do so. The difficulty with that position, as noted by the trial judge, was the absence of any evidentiary foundation. After considering all the evidence, the trial judge concluded that the Crown had established Mr. Kirk’s criminal fraudulent intention. His reasons disclose no error.

[20] For these reasons, we would dismiss the appeal against conviction.

(b) Appeal against Sentence

[21] On the appeal against sentence, we would not interfere with the quantum of the order for restitution. For the most part, the amounts were not challenged by defence counsel at trial and, in respect of all counts, there was evidence to support the trial judge’s decision.

[22] The remaining issue is whether the trial judge erred in principle in refusing to impose a conditional sentence. The trial judge was satisfied that the appropriate length of sentence was less than two years. However, he rejected the conditional sentencing option for two reasons. First, he was of the view that “general deterrence and denunciation are paramount in this breach of trust circumstance.” Second, in his opinion there was “no realistic hope of restitution for any of these victims.”

[23] In our view, the trial judge erred in overemphasizing the need for general deterrence and denunciation on the basis that there had been a breach of trust. In common parlance, it is correct to say that the victims entrusted Mr. Kirk with their deposit monies based on the representation that he would do the promised work, and that, in failing to perform the contract, Mr. Kirk in effect breached the trust that the homeowners placed in him. However, this is but the gravamen of this particular series of offences of fraud. Indeed, if this were enough to establish breach of trust, then virtually every breach of contract would result in breach of trust. Here, Mr. Kirk was not in a position of trust. The relationship between the parties was strictly commercial. This does not detract from the criminality of Mr. Kirk’s behaviour but the facts do not support a finding of “breach of trust” as an aggravating circumstance.

[24] Further, it is our view that the perceived inability to make restitution should not have militated against the imposition of a conditional sentence in the circumstances of this case. Mr. Kirk is 56 years of age, a grandfather with two adult children. He has a second family and is the sole provider for his new spouse and their ten-month-old child. Apart from one minor and dated conviction, which was disregarded by the trial judge, he has no criminal convictions. He expressed remorse for his actions and discontinued his business. He is now a salaried employee and there is no evidence that serving his sentence in the community would pose a risk to the public.

[25] In all the circumstances, we are of the view that the trial judge erred in concluding that a conditional sentence with appropriate conditions would not accord with the general principles of sentencing, including general deterrence and denunciation.

[26] We would therefore allow the appeal against sentence, set aside the term of imprisonment and impose a conditional sentence of twelve months on the following conditions, agreed upon by counsel:

Compulsory terms throughout:

• keep the peace and be of good behaviour;
• appear before the court when required to do so by the court;
• report to a supervisor at the Danforth Probation Parole office at 3211 Danforth Avenue, Toronto, Ontario within two working days, and thereafter report to a supervisor when required by the supervisor and in the manner directed by the supervisor;
• remain within the province of Ontario unless written permission to go outside Ontario is obtained from the court or the conditional sentence supervisor;
• notify the court or the supervisor in advance of any change of name or address, and promptly notify the court or the supervisor of any change of employment or occupation;

Additional conditions:

• No contact with the complainants, Mildred Beverley, Beth Binnington, Ken Rowland, Iain Howieson, George Stevens, Karen Davies, Wendy Dobson, except through counsel for the purpose of providing restitution;
• House arrest: Reside at 26 Lucy Avenue, Toronto, Ontario (or such place as notification has been given to the supervisor in compliance with the notification condition above) and be in your residence at all times except as follows: a) with the written permission of the supervisor; b) to attend weekly services at St. Dunstan’s Church at 3152 Danforth Ave. on Sundays from 10:00 a.m. until noon; c) to attend to personal business such as shopping for essentials, banking, personal appointments, etc., on Mondays between the hours of noon and 6:00 p.m.; d) to drop off and pick up his son, Zachary, between the hours of 9:00 a.m. and 1:00 p.m. at the Daycare Connections Drop-in Centre, 140 Wineva Ave., Toronto, and once Zachary starts school at St. Dunstan’s school in September to drop off and pick him up from that school; e) for scheduled medical appointments with notice given in advance to the supervisor, or for medical emergencies;

Recommendations:

It is recommended that the conditional sentence supervisor will grant written permission for the purposes of employment or self-employment where the precise location and times of work are provided in advance to the supervisor.

[27] Counsel for the appellant advised the court that Mr. Kirk is now in a position to make restitution and invited the court to adjourn the sentence appeal to permit Mr. Kirk to make restitution. We would not accede to the request for an adjournment. However, in the circumstances, we would not only confirm the free-standing restitution order but also order that restitution be made in the amounts ordered within six months as a condition of the conditional sentence.

Released: JL AUG 20 2004 Signature: “Louise Charron J.A.”

“Susan E. Lang J.A.”

“I agree John Laskin J.A.”