DATE: 20040401

DOCKET: C35925-C35986

COURT OF APPEAL FOR ONTARIO

CATZMAN, DOHERTY and ARMSTRONG JJ.A.

B E T W E E N:

HER MAJESTY THE QUEEN

Respondent

• and -

ANDREW KEMBER and JOHN WHITTON

Appellants

Keith E. Wright for the appellant, Kember

Timothy Breen for the appellant, Whitton

David Lepofsky for the respondent

Heard: March 10, 2004

On appeals from the convictions entered by Justice Desotti of the Superior Court of Justice, sitting with a jury, dated March 19, 2001.

DOHERTY J.A.:

[1] Both appellants were charged in count one of an indictment:

That between the 1st day of January, 1994 and the 31st day of March 1994 inclusive at the City of Sarnia, in the Province of Ontario being together they did possess a 1994 Chevrolet black pickup truck (VIN #2GCDC14ZXJ1306863) of a value exceeding $1,000.00 knowing the said 1994 Chevrolet black pickup truck (VIN #2GCDC14ZXJ1306863) contained a frame upon which the vehicle identification number had been wholly or partially removed or obliterated and thereby having been obtained by an offence punishable by indictment, contrary to Section 355(a) of the Criminal Code of Canada.

[2] The appellant, Kember was also charged in count two:

That between the 15th day of July, 1992 and the 31st day of March, 1995 inclusive at the City of Sarnia, in the Province of Ontario he did by deceit, falsehood or other fraudulent means, defraud Anthony Desangher of a 1991 Chevrolet white pickup truck (VIN #1GCDK14HOMZ210357) of a value exceeding $5,000.00 by not declaring the said 1991 Chevrolet white pickup truck (VIN #1GCDK14HOMZ210357) was a rebuilt pickup truck, composed of parts from other vehicles, contrary to Section 380(1)(a) of the Criminal Code of Canada. [Emphasis added.]

[3] The jury convicted both appellants on count one and convicted Kember on count two. The appellants appeal from those convictions.

[4] I would allow the appeals. With respect to the conviction on count two, I am satisfied that the Crown led no evidence to support the fraud alleged in that count. The conviction must be quashed and an acquittal entered. With respect to the convictions on count one, I am satisfied that it was not made clear to the jury that the Crown had to prove that the appellants knew that the truck frame referred to in count one was obtained by the commission of an indictable offence. The convictions must be quashed and a new trial ordered.

The Appeal on Count Two

[5] Count two alleged that Kember defrauded Anthony Desangher of a pickup truck described in the indictment with a value exceeding $5,000.00. The Crown’s evidence revealed that Mr. Desangher purchased a truck with the VIN number identified in count two from Mr. Kember for about $16,500.00. Mr. Desangher was told that the cab had been refurbished after a fire and that the engine may have been replaced. The Crown led evidence that the vehicle was a “rebuild”, referred to as a “Heinz 57”, because it was put together with parts from numerous other vehicles some of which may have been stolen.

[6] Desangher had difficulties with the truck shortly after he purchased it. He learned that it was a “Heinz 57”. Desangher and Kember negotiated the return of the vehicle to Kember. Kember took the truck back and refunded part of the purchase price to Desangher.

[7] On the Crown’s evidence, the allegation of fraud was one of fraud by misrepresentation as to the true nature of the vehicle sold to Desangher. The Crown put its case this way in her closing:

…It’s also clear that Mr. Desangher purchased what he believed was a 1991 Chev pickup truck with a VIN number as described and that he paid well over $5,000.00 for it, closer to $18,000.00 I think including tax. And I’m going to suggest to you that it’s pretty clear that what Mr. Desangher believed he paid for was not what he got to take home. I’m going to suggest to you, that evidence isn’t too confusing. It’s very straightforward. [Emphasis added.]

[8] In his closing argument, counsel for the appellant, Kember, said this:

… Defraud is like cheating. I agree with that. I think you use the word cheating whether you did it or didn’t I will use the word cheat. Cheating out of what? Out of his truck. That’s what the charge is. When did he part with his truck? Well, after all the things are involved he got involved with a civil action and parted with his truck. Did defraud Desangher of his truck. Well I’m sorry ladies and gentlemen, he didn’t do that. He just didn’t do that. He did not on any basis defraud Desangher of his truck and that’s what he’s charged with. [Emphasis added.]

[9] The trial judge’s instructions on count two were brief. He told the jury that it was the position of the Crown that the appellant, Kember had committed fraud because he did not tell Mr. Desangher that he was purchasing a rebuilt truck. The trial judge also told the jury, incorrectly according to trial counsel, that it was the position of the defence that there was no fraud because Mr. Desangher got essentially what he had agreed to buy from Kember.

[10] I agree with the submissions made by trial counsel for the jury and repeated by counsel for the appellant in this court. Whatever the Crown may have intended to allege in count two, the wording of that count alleges that Mr. Desangher was defrauded of the truck and not of the money he paid to purchase the truck.

[11] The Crown may well have proved that the appellant, Kember was dishonest in his dealings with Desangher and that through his dishonesty, Desangher parted with $16,500.00. The Crown did not, however, prove that Desangher was ever deprived through dishonesty of the truck. Desangher received the truck at the time of the alleged misrepresentations and only parted with the truck as part of the later civil settlement. There was no suggestion that the settlement was tainted by misrepresentation or other dishonesty.

[12] It is unfortunate that the indictment as worded did not reflect the true nature of the allegation advanced by the Crown. Trial counsel cannot, however, be criticized for first raising the discrepancy between the allegation and the evidence in his closing argument. He obviously took a chance. Had the Crown requested an amendment to the charge, the trial court may well have ordered the amendment. Crown counsel made no such request, but was content to go to the jury on the charge as worded. Given the position taken by the defence and Crown at trial, I think it is now too late to amend count two to conform with the evidence led by the Crown.

[13] On the wording of count two as it went to the jury, the trial judge should have told the jury that there was no evidence that Mr. Desangher had been defrauded of the truck identified in count two. He should have told the jury to return a verdict of not guilty on that charge as framed in count two.

The Appeal on Count One

[14] For convenience, I repeat the wording of count one.

That between the 1st day of January, 1994 and the 31st day of March 1994 inclusive at the City of Sarnia, in the Province of Ontario being together they did possess a 1994 Chevrolet black pickup truck (VIN #2GCDC14ZXJ1306863) of a value exceeding $1,000.00 knowing the said 1994 Chevrolet black pickup truck (VIN #2GCDC14ZXJ1306863) contained a frame upon which the vehicle identification number had been wholly or partially removed or obliterated and thereby having been obtained by an offence punishable by indictment, contrary to Section 355(a) of the Criminal Code of Canada.

[15] The wording of count one is confusing. It refers to the offence of possession of stolen property valued at over $1,000.00 (s. 355(a)). It also alleges that the truck frame contained a wholly or partially obliterated VIN. This allegation is not an element of any offence created by the Criminal Code, but by virtue of the evidentiary presumption created in s. 354(2) can assist the Crown in establishing that certain property was stolen.[^1]

[16] The mixing of language creating the offence of possession of property obtained by crime with language referring to an evidentiary presumption that may assist in proving the commission of that crime obscures the nature of the allegation made in count one. Mr. Lepofsky, for the Crown, submits that count one alleges possession of a frame of a truck with an obliterated VIN knowing that the frame was obtained by crime. Counsel for the appellants contend that count one alleges possession of a pickup truck knowing that a part of that pickup truck, the frame, was obtained by crime. Counsel contend that if this interpretation is correct, count one does not allege an offence known to law. Count one can also be read as alleging possession of a truck frame with an obliterated VIN, knowing that the VIN was obliterated. If this interpretation is correct, count one clearly does not allege an offence known to law.

[17] There was no objection taken to count one at trial.

[18] Mr. Lepofsky has convinced me that count one alleges that the appellants were in possession of a truck with a frame knowing that the frame was obtained by the possession of crime. I am also satisfied, however, that it was not made clear to the jury that the Crown had to prove that the appellants knew that the truck frame was obtained by crime, and that it was not enough for the Crown to prove only that the appellants knew that the VIN on the frame had been obliterated.

[19] The confusion as to the requisite knowledge appears in Crown counsel’s closing address. She said:

…[T]hat’s a question of whether the Crown has satisfied you beyond a reasonable doubt on all of the evidence before you, that you accept, that the accused Andrew Kember and the accused John Whitton did possess that black low rider pick-up truck knowing that it contained a frame presumed to have been obtained by crime, presumed to be stolen for example. [Emphasis added.] …

[20] This description of count one suggests that knowledge that the frame contained an obliterated VIN was sufficient to “presume” knowledge that the frame was stolen.

[21] The trial judge began the relevant part of his instructions by reading count one. Given the difficult wording of the count, this would not have assisted the jury in understanding the nature of the allegation. The trial judge then read s. 354(1) which creates the offence of possession of property obtained by crime. The section is straightforward. He next referred to the evidentiary presumption in s. 354(2), including the second part of the presumption which has been held unconstitutional by this court: R. v. Boyle, supra. The trial judge then told the jury:

In this particular case, the fact of the possession of the vehicle as described in the indictment is not in issue. Furthermore, the presumption in law that the obliteration of the vehicle identification number constitutes cogent evidence that the motor vehicle was stolen or obtained by the commission of some other indictable offence is a valid presumption in law. However, the Crown still bears the burden of proof of establishing that the two accused had the required knowledge of this fact, and must establish this fact of this knowledge beyond a reasonable doubt. Therefore, the determining issue in this court that you must resolve is whether you are satisfied beyond a reasonable doubt that Mr. Kember and Mr. Whitton had this knowledge with respect to Count One. [Emphasis added.]

[22] The references to “knowledge of this fact” in the above passage are ambiguous. The reference may be to the fact that the VIN was obliterated, or it may be to the fact that the property was obtained by crime. If the reference is to the latter, the instruction is proper; if the reference is to the former, the instruction is wrong in law.

[23] The ambiguity continues throughout the charge. For example, in the paragraph immediately following the instruction quoted above, the trial judge said:

…[T]he Crown concedes that it would have made her life easier if a particular witness had come forward and testified that the two named individuals, the accused parties, had told this witness that they knew they were selling a vehicle that had an obliterated vehicle identification number. This would have been direct evidence of their knowledge. … [Emphasis added.]

[24] This instruction suggests that if the Crown had adduced evidence that the appellants knew the VIN was obliterated, they would have provided direct evidence of the requisite guilty knowledge. Knowledge that the VIN was obliterated could, in the specific circumstances of this case, assist in proving that the appellants knew that the truck frame was stolen. Knowledge that the VIN was obliterated did not, however, in and of itself, establish the required mens rea.

[25] The trial judge’s instructions on the theory of the Crown on count one further suggests that proof that the VIN was obliterated established the necessary mens rea:

…There is no direct evidence of knowledge and that onus rests with the Crown Attorney. She must establish beyond a reasonable doubt that they knew about the obliterated identification number on the frame that was ultimately sold to Mr. Fox. [Emphasis added.]

[26] In addition to the passages quoted above, there are references in the trial judge’s instructions that indicate that knowledge that the VIN was obliterated provided the requisite culpable state of mind. There are, however, other parts of the instruction in which the trial judge told the jury that they must be satisfied that the appellants knew that the truck frame was stolen. This is a correct description of the necessary mens rea.

[27] Considering the confusing language of count one, the comments of Crown counsel in her closing address, and the entirety of the trial judge’s instructions, I do not think that it was not made clear to the jury that they could only convict the appellants on count one if they were satisfied beyond a reasonable doubt that they knew that the frame identified in count one had been obtained by the commission of a crime. The jury may well have thought that proof that the appellants knew the VIN was obliterated would suffice. The convictions on count one must be quashed.

[28] Counsel for the appellants submitted that it was not be appropriate to order a new trial on count one. They informed the court that the appellants had been through two trials on count one, the first ending in a mistrial. In brief, they submitted that “enough was enough”.

[29] The error necessitating the quashing of the convictions on count one is an error in law. There was evidence upon which a properly instructed jury could convict the appellants on count one. In such circumstances, this court normally orders a new trial. The court does, however, have a discretion to decline to order a new trial in appropriate circumstances. This court does not know enough about the history of these proceedings to foreclose the Crown from proceeding with a new trial should it decide to pursue that course of action. Nor is it in a position to unequivocally reject the appellants’ claim that there should not be a third trial. If the Crown decides to proceed with a new trial and the appellants wish to argue that a new trial would constitute an abuse of process, they may do so before the trial court.

Post Script

[30] At trial, counsel for the appellants sought to elicit evidence from Crown witnesses identifying the location of the hidden VIN on the truck frame which was the subject of count one. It was this VIN which had allegedly been obliterated. This VIN is placed on the part by the manufacturer and its location is not a matter of common knowledge. Hidden VINs are used to locate and identify stolen car parts.

[31] Crown counsel resisted the disclosure of any information disclosing the location of the hidden VIN. Relying on the qualified public interest privilege described in R. v. Richards (1997), 115 C.C.C. (3d) 377 (Ont. C.A.), the trial judge held that the witnesses were not obliged to disclose the location of the hidden VIN. Counsel for the appellants challenged that ruling on appeal.

[32] As I have allowed the appeals on other grounds, it is not necessary to address this issue. I am persuaded by Mr. Lepofsky that it would be inappropriate to do so. If in fact the public interest privilege is applicable to information as to the location of the hidden VIN, the applicability of that privilege requires a careful balancing of competing interests in the context of the specific circumstances of each case. This record is not sufficiently complete or clear to allow this court to address the issue in a manner that would provide useful guidance if there is another trial.

Conclusion

[33] The appeals are allowed. The convictions on count one are quashed and a new trial is ordered. The conviction on count two is quashed and an acquittal is entered.

RELEASED: “MAC” “APR 01 2004”

“Doherty J.A.”

“I agree: M.A. Catzman J.A.”

“I agree Robert P. Armstrong J.A.”

[^1]: Section 354(2) also creates an evidentiary presumption to the effect that the person in possession of the property with the obliterated serial number knows that the property was obtained by crime. This evidentiary presumption is unconstitutional and is of no force and effect: R. v. Boyle (1983), 5 C.C.C. (3d) 193 (Ont. C.A.).