CITATION: R. v. Root, 2008 ONCA 869
DATE: 20081222
DOCKET: C46510
COURT OF APPEAL FOR ONTARIO
Feldman, Rouleau and Watt JJ.A.
BETWEEN:
Her Majesty the Queen
Appellant
And
Jeffrey Root
Respondent
Nicholas Devlin for the appellant
Mark Evans for the respondent
Heard: April 7, 2008
On appeal from the acquittals entered by Justice Lynda Templeton of the Superior Court of Justice, sitting without a jury, dated December 18, 2006.
Watt J.A.:
[1] The issue on this appeal is whether the trial judge correctly concluded that the conduct of the respondent, a lawyer, in his discussions with an undercover police officer about laundering the proceeds of trafficking in cocaine, did not amount to any of the several preliminary or inchoate crimes charged in a multi-count indictment.
[2] For the reasons that follow, I would allow the appeal in part, but dismiss it in another respect.
A. THE FACTS
The Principals
[3] Paul Cox and his partners operated a trust company in southern Florida. The company had some Canadian clients who wanted the proceeds of their business, trafficking in cocaine, transferred offshore to a safe haven. Cox came to Canada to ensure that the transfers were completed without a trace.
[4] Paul Cox was not really Paul Cox. Nor was he a money-laundering partner in a Florida trust company. In the real world, Paul Cox was Ron Nicholson, a member of the RCMP for over three decades.
[5] George Radojcic owned some commercial property in Niagara Falls. He was also a justice of the peace who presided at various hearings in St. Catharines. Radojcic knew several members of the Bar in the Niagara Peninsula.
[6] Jeffrey Root is a lawyer in Welland. He practises law throughout the Niagara Peninsula, mainly, but not exclusively, criminal law.
The Storefront Business
[7] During the spring of 2002, Paul Cox and an RCMP operative who assumed the name James Kelly were looking for a commercial property in Niagara Falls. They wanted to set up Shamrock EEzy Grow Hydroponics Ltd., a storefront enterprise to sell equipment for hydroponic marijuana grow operations.
[8] Cox and Kelly found a suitable premises on Queen Street in Niagara Falls. Their landlord was George Radojcic.
Cox meets Radojcic: October 30, 2002
[9] James Kelly introduced Paul Cox to George Radojcic at lunch in a St. Catharines restaurant on October 30, 2002. Cox explained to Radojcic that he (Cox) lived in south Florida where he operated a trust company with his partners. Cox’s role was to service the company’s Canadian clients, to ensure that their money migrated safely offshore.
[10] Cox and Kelly had left a money-counting machine out in the open at their business premises. Kelly told Cox that Radojcic, on seeing the machine, had commented that he (Radojcic) knew what Cox and Kelly were doing in their business. Radojcic denied making the comment to Kelly when his observation was reiterated by Cox at the lunch in St. Catharines.
[11] Radojcic told Cox that he (Radojcic) knew some people who “could probably use some help” from Cox.
The follow-up Meeting
[12] About a month after they had first met, Cox met Radojcic to make the monthly rent payment on the leased premises. Cox paid cash, $700.00 in bills of small denominations. Cox explained that the money was the proceeds from the sale of drugs. Radojcic indicated that he had no problem taking the money for the rent, despite its unlawful origins.
[13] Later during their conversation, Radojcic suggested that one way in which Cox could clean money obtained through the sale of drugs would be to purchase some vacant lots Radojcic’s mother owned in the area. Cox explained that he had used real estate purchases in the past to clean money from illicit sources.
[14] As they drove from one “gentleman’s entertainment” premises to another, Radojcic explained to Cox that he (Radojcic) knew a lawyer from a “solid” law firm who had done money movements in the past. The lawyer, whom Radojcic did not name, could be someone who could help Cox in his activities. Cox claimed that he had been in the money laundering business for 14 years, and that his “senior partner” had been involved for 25 years.
[15] During this meeting with Radojcic, Cox wore a body pack, but discontinued its operation because of background noise at the entertainment premises and the absence of anything of evidentiary value to the original investigation.
[16] After a second meeting with Radojcic, the focus of the RCMP investigation shifted from drugs and organized crime to money laundering.
The further meetings in early 2003
[17] On January 10, 2003, Paul Cox delivered two months rent to George Radojcic at Radojcic’s home. Cox told Radojcic that the money, fourteen $100 bills, was the proceeds from the sale of cocaine. Radojcic said he preferred not to know about the origins of the rent money.
[18] Radojcic mentioned to Cox that he (Radojcic) had someone willing to give legal advice to help Cox in his business. Radojcic mentioned no names. Cox assured Radojcic that if Cox did business with this other person, Radojcic would be “taken care of”. Radojcic again alluded to the purchase of land as a potential activity for Cox.
[19] About two months later, in early March, 2003, Cox reminded Radojcic about his earlier offer to introduce Cox to someone who could help Cox launder money.
[20] On March 5, 2003, Paul Cox again reminded George Radojcic about Radojcic’s promise to introduce Cox to someone who could help Cox in his money-cleaning business. Cox gave Radojcic another rental payment in cash and cautioned his landlord to sift the bills into his bank account carefully.
[21] Radojcic told Cox that the lawyer in the “blue chip” firm whom he had mentioned earlier, but not by name, was someone who knew some of the same people in Niagara Falls whom Cox knew. The lawyer, to whom Radojcic had spoken about one and one-half months earlier, had agreed to meet Cox but wanted to do his “due diligence” first.
[22] On March 12, 2003, Cox inquired again about the “blue chip” lawyer. Cox said that his business was getting bigger and he wanted to accelerate his money laundering plans. Radojcic promised to let Cox know about the lawyer’s availability. After another query by Cox on April 15, 2003, a meeting was arranged for the following week.
[23] Radojcic rejected Cox’s suggestion that Radojcic’s trust account be used in the scheme, or that Radojcic be involved personally in Cox’s activities. Radojcic neither sought nor received any money for putting Cox into contact with the local lawyer.
Cox Meets Root: April 23, 2003
[24] The first meeting of the principals was arranged for Carpaccio, a Niagara Falls restaurant, on the evening of April 23, 2003. Paul Cox arrived first. He wore a body pack and ordered some food. Jeffrey Root arrived next and took a seat at the bar. Radojcic was the last to arrive, about 5 minutes after Root had entered the restaurant. Radojcic went over to the respondent and introduced him to Cox. At Cox’s suggestion, the trio moved to a more private area of the restaurant.
[25] Paul Cox explained that he had two projects to discuss. His first involved moving money from Canada to California. The second required changing funds. Cox invited Radojcic to lead off the discussion about “asset protection money” about 40 minutes after the men had first met.
[26] According to Cox, the respondent took charge of their meeting after Radojcic’s departure. Root acknowledged that he had “a little bit of conversation” with Radojcic about Cox’s activities. Cox explained that he needed to get some money obtained in Canada from the sale of “a non-prescription medicinal product – cocaine” into a specific bank account in the United States.
[27] Root told Cox that, because of Canadian disclosure rules, cash had to be put into something else to carry out Cox’s scheme. Root offered several alternatives including creation of an investment company that could buy, then sell property, submission of invoices for consulting fees, or corporate loans. Root could get another lawyer, who would not know of the origin of the funds, to do the real estate transactions.
[28] The respondent explained to Cox that he (Root) did not need a reason for any influx of cash coming into his law firm. Root had a way, he said, of dealing with large amounts of cash, $100,000 or $200,000, for a fee. He could manage $200,000 weekly but needed to think about the mechanics of it. Radojcic left the meeting. Cox and Root continued to talk.
[29] During their first meeting, the respondent said that he did not know the going rate for money laundering transactions, but would factor in compensation to Radojcic as part of the fee. Cox indicated that 4% to 6% was a usual rate depending on the nature of the transaction. The respondent later suggested that a fee of $60,000 on a transaction involving $1,000,000 would be satisfactory.
[30] Root pointed out that the scheme required careful thought and would benefit from some further advice. He suggested a need for a company to be incorporated and proposed the purchase of six, five acre lots for later resale as a prospective course of action.
[31] When Paul Cox suggested that significant problems could arise in attempting to move $200,000 per week from Canada to California, Root responded “we’re going to make this happen, figure out a way”. Cox and Root agreed to communicate through Radojcic. Root said that he would be in touch with Cox in two days.
[32] Two days later, Root called Cox on his cell phone. The call was forwarded to Cox’s pager. Cox had not told Root his (Cox’s) cell phone number.
The Second Cox-Root Meeting: May 5, 2003
[33] When Paul Cox returned a call from Jeffrey Root on April 26, 2003, Root said “I think we should get together soon to go over some things”. Root also instructed Cox that he (Cox) should limit conversations when calling Root on Root’s cell phone to “hello” and “good bye”. The men met again at Carpaccio restaurant on May 5, 2003. Cox did not wear a body pack on this occasion, but made notes as the meeting progressed after Root opened the discussion with “we have a lot of things to cover so we’ll get right at it”.
[34] Jeffrey Root told Paul Cox that “they” would be ready to take Cox’s money in 60 to 90 days, but only wanted to do large sums, $5,000,000 U.S. dollars or $7,500,000 Canadian dollars, through the use of law firm cheques. “They” were also prepared to buy $25,000,000.00 in “Indian” funds for fifty cents on the dollar.
[35] The respondent diagrammed the proposed scheme. A company in Canada, “X”, would loan Cox’s company, “Y”, money at 20%. Root said that 20% was the going rate for such transactions according to his inquiries. Cox responded that the rate proposed was too high. Root said that he only wanted to do three moves. He pointed out that $1,000,000 in $100 bills could be carried in a briefcase, $10,000,000 in the same denomination in a hockey or duffel bag. Root added that his firm could “do” $1,000,000 for a fee of $250,000, a proposal Cox rejected out of hand.
[36] When the respondent told him that 20% was the going rate for the proposed money-changing transactions, Cox said he would need his partners’ approval for such a rate, which he considered too high.
[37] The men had no further contact until June 2, 2003, when they discussed having another meeting.
Cox and Root #3: June 5, 2003
[38] In their meeting on June 5, 2003, Paul Cox made it clear to Jeffrey Root that the funds to be involved were the proceeds of the sale of cocaine. Root told Cox that he (Root) did not have to know about the provenance of the funds. Despite Root’s assertion that “they” really wanted to buy the “Indian” funds, Cox explained that those funds were “off the table”.
[39] Cox proposed a “test drive”, which would involve the transfer of $100,000 from Canada to a bank account in Orlando, Florida. Root offered a business plan to Cox and said that he (Root) could write a cheque on his own corporation and send it to Florida.
[40] As a result of their meeting, Cox expected to hear back from Root about the “test drive” proposal, as well as Cox’s request for a reconsideration of the fee to be charged for completion of the transaction. Despite various assurances, nothing happened over the summer months and into the early fall.
The “Accidental” Encounter on October 16, 2003
[41] As the months slipped silently by, investigators decided to orchestrate a “chance” meeting between Cox and Root. Cox and another officer went to the St. Catharines courthouse on October 16, 2003. Cox spoke to Root as the lawyer was walking out the front door of the building. Cox reminded Root that he (Cox) hadn’t heard from Root for a while. Root said he was lying low, trying to stay incognito because he was facing other charges the following month. Cox asked Root whether there was a reason for them to get together. Root answered “no, not for a while”, then left the building.
The Office Meeting of December 22, 2003
[42] On December 9, 2003, Paul Cox left a message for Jeffrey Root to call Tony Anthony at a specified telephone number. A few minutes later, Root called and Cox identified himself. Cox proposed a celebratory drink to congratulate Root on the favourable resolution of his other outstanding charge. After several telephone calls and exchanged messages, Root and Cox agreed to meet at Root’s law office on December 22, 2003. Cox wore a body pack to the meeting.
[43] Jeffrey Root told Cox that “his (Root’s) people” were in a different position than they had been previously. Cox outlined his proposed course: a “test drive”, then $500,000 per week with the fee set at 10%. Cox repeated that the funds were “dirty money”. Root told Cox that he wanted to think about how he wanted to do it and whether his associates remained interested in the scheme. Root would let Cox know the result of the discussions. Cox followed up the next day. The fee, according to Root, was 25% and would not change.
The End of the Road: January 30, 2004
[44] On January 30, 2004, Jeffrey Root reiterated that the fee remained at 25%. His associates had other projects with which to deal and considered that the number of transactions involved would pose problems. Root again rejected the “test drive” proposal.
[45] All contact ceased after January 31, 2004.
B. THE REASONS OF THE TRIAL JUDGE
Introduction
[46] Sergeant Nicholson was the only witness who testified at trial. The exhibits filed as part of the prosecution’s case included several recorded conversations between Nicholson, as Paul Cox, George Radojcic and Jeffrey Root, with occasional participation by others not alleged to be complicit in any unlawful activities that may have occurred or been discussed.
[47] The indictment on which the respondent was tried contained five counts. Two counts alleged that Root and Radojcic conspired together and with others unknown to launder the proceeds of crime and to possess property or the proceeds of property obtained by crime. Another pair of counts alleged that Root and Radojcic attempted to launder the proceeds of crime and attempted to possess the property or the proceeds of property obtained by crime. The final count alleged that Root and Radojcic counselled Sergeant Nicholson, as Paul Cox, to launder the proceeds of crime, an offence the officer did not commit.
The Conspiracy Counts
[48] The trial judge considered first whether the prosecution had proven that Root and Radojcic conspired together to commit either offence alleged. She was satisfied that Radojcic knew what Cox wanted to do and that Cox was looking for help to launder proceeds of crime. Radojcic introduced Cox to Root to help out Cox in his scheme. Cox left Root in charge of any payment to Radojcic for his services. Radojcic’s introduction of Root to Cox was not evidence that Radojcic was a member of any conspiracy, despite Radojcic’s knowledge of Cox’s scheme and his introduction of Root to further it. There was no conspiracy between Radojcic and Root.
[49] The trial judge then turned her attention to a second question: Did Root conspire with unknown persons to commit the offences charged, even if Radojcic was not part of the conspiracy?
[50] The trial judge was satisfied that the respondent was willing, even eager to participate in the movement of illicit funds and suggested several methods by which this purpose could be achieved. Prior to May 25, 2003, however, the respondent was acting on his own and had not reached an agreement with anyone else to carry out the scheme.
[51] Two brief passages in the trial judge’s reasons reflect her findings about the adequacy of the prosecution’s proof that the respondent conspired with unknown others to launder the proceeds of crime or to possess property or its proceeds of criminal origins:
It is clear that Mr. Root indicated that he had spoken to others about moving funds to the United States in the millions of dollars. It is also clear that his contacts were concerned about an exposure to risk and about the amount of the fee.
The essential question is whether the existence of a conspiracy is the only reasonable inference to be drawn from all of the evidence concerning Mr. Root’s discussions with another or other persons as he relayed them to Sergeant Nicholson.
The Crown submits that Mr. Root consulted with unknown associates with whom he formed a common intention to launder funds. While I agree that Mr. Root had probably formed such an intention, I find that I am not satisfied beyond a reasonable doubt that he had actually entered into such an agreement with them to this effect.
In the context of all of the evidence before me, I find that I am unable to reach the conclusion beyond a reasonable doubt that the other person or persons entered into an agreement with Mr. Root to do an unlawful act. If I am not so satisfied, I cannot find that Mr. Root conspired with him or with them to launder the proceeds of crime.
I am entirely satisfied that Mr. Root attempted to commit a conspiracy with Sergeant Nicholson, but for the reasons given by the Supreme Court of Canada in R. v. Déry and the reasons just given, Mr. Root is therefore found not guilty of counts one and two on the indictment. (Emphasis in original)
The Counselling Count
[52] The trial judge held that the prosecution was required to prove that the respondent either intended that the offence he counselled be committed, or knowingly counselled the commission of the offence while aware of the unjustified risk that the offence counselled was in fact likely to be committed as a result of his conduct.
[53] The trial judge rejected the prosecution’s claim that the respondent actively induced or advocated the laundering of drug proceeds and intended that the offence be committed. The nucleus of her reasons is what follows:
It is clear that it is the undercover officer who approached Mr. Root and who solicited his advice and participation. It is also clear throughout the course of their considerations with respect to methodology and their negotiations with respect to price, both parties were allegedly in consultation with others who were also decision makers in the process. In the circumstances of the case, Mr. Root might have wished to, but knew he could not, procure, induce or incite Mr. Cox to commit the offence because Mr. Cox was allegedly accountable to others.
I find that Mr. Root talked a lot about how money could be moved depending upon a host of factors. I also find, however, that his words, ideas, plans and attitude were not intended to incite, procure or solicit Sergeant Nicholson. They were simply a detailed response to a request by the officer to find a method to move funds.
The Counts of Attempt
[54] The prosecution alleged that the respondent attempted to do two things:
i. to obtain property or its proceeds, knowing of its criminal origins;
ii. to launder the proceeds of crime.
[55] The trial judge made two findings that were fatal to the prosecution’s case:
I find that the evidence elicited at trial clearly amounts to preparation on behalf of Mr. Root, but I find that it goes no further.
I am not satisfied therefore that the mens rea necessary to prove an attempt on either count has been made out. On these counts, he too shall be found not guilty.
C. THE GROUNDS OF APPEAL
[56] This appeal by the Crown, which is limited to questions of law alone, features the common complaint that the trial judge misdirected herself on the essential elements of each offence with which the respondent was charged. But for one instance, the appellant says, the application of the correct legal principles to the facts found by the trial judge warrant entry of convictions here and either the imposition of sentence or remission of the case to the trial judge for the imposition of sentence. According to the appellant, the other instance warrants a new trial.
D. ANALYSIS
- Introduction
[57] The indictment preferred against the respondent contained two counts of conspiracy, a single count of counselling an offence that was not committed, and two counts of the preliminary crime of attempt. My consideration of the grounds of appeal will follow the same order.
2. The Conspiracy Counts
The Alleged Errors
[58] The appellant says that the conspiracy counts alleged an agreement among the respondent, Radojcic, and unknown persons to possess and launder the proceeds of trafficking in cocaine. The prosecutor need only to have proven and did prove an unlawful agreement between the respondent and Radojcic or an unknown person or persons, not an agreement with both Radojcic and unknown persons in order to establish the respondent’s guilt.
[59] The appellant contends that the evidence established the required agreement between the respondent and Radojcic. Cox told Radojcic that he (Cox) had funds, the proceeds of drug trafficking, that he wanted to launder. He even asked about using Radojcic’s trust account for his purposes. Radojcic suggested the purchase of several properties owned by his (Radojcic’s) mother as a means of cleaning funds. Aware of the scheme, Radojcic set up a meeting with the respondent, a person he represented as one who could accomplish what Cox required. It is irresistible that Radojcic agreed to obtain the proceeds from Cox and to launder them as Cox sought. Radojcic’s role in the conspiracy was to put the respondent in contact with Cox, thus to ensure, through the respondent’s expertise, the desired execution of the scheme. That Radojcic would not participate himself in the actual possession or laundering of the funds is of no moment since the essence of conspiracy is the agreements to possess and to launder.
[60] In connection with the alleged unlawful agreement between the respondent and unknown persons, the appellant submits that the trial judge erroneously concluded that the failure of the respondent and Cox to agree on a fee for completion of the transaction meant that there was no conspiracy of either type alleged between the respondent and his anonymous associates. Further, the trial judge was wrong in her conclusion that there was no evidence that the unknown persons were aware of the provenance of the funds that were the subject of the proposed transactions.
[61] The respondent points out that the trial judge made a finding of fact that there was no agreement of either kind alleged in the indictment. It was a finding, untainted by error, legally open to the trial judge on the evidence adduced at trial. Radojcic was never part of any negotiations. Providing an introduction, even if he were later to be compensated for it, did not make Radojcic a co-conspirator.
[62] In connection with the unknown persons, Mr. Evans reminds that the trial judge found as a fact that the respondent did not disclose the origin of the funds to be laundered, nor did the unknown persons otherwise learn of the provenance of the funds. The trial judge also found that what occurred amounted only to negotiations, an attempt to reach an unlawful agreement, but a failure to do so. Despite a legal error by the trial judge in requiring proof of an agreement among all of the respondent, Radojcic and the unknown persons, the findings of fact doom the appellant’s case on the conspiracy counts.
The Governing Principles
[63] It is helpful to recall some basic principles about the inchoate or preliminary crime of conspiracy in assessing the validity of the appellant’s claim of error.
[64] The indictment contained two allegations of conspiracy. The participants in each conspiracy were the same:
• The respondent
• George Radojcic
• Persons unknown
The time period during which each conspiracy continued, and the places at which it was alleged to have operated, were the same. The counts described two different objects. One object was to possess unlawfully obtained property or its proceeds. The other object was to launder the proceeds of crime. The property and proceeds were one and the same.
[65] It is elementary that the gist of the preliminary crime of conspiracy is the agreement. The actus reus of the offence is the fact of the agreement. Papalia v. R.; R. v. Cotroni, 1979 38 (SCC), [1979] 2 S.C.R. 256, at p. 276. In conspiracy cases, a distinction exists between an intention to agree, on the one hand, and an agreement, on the other. On its own, an intention to agree is not sufficient to establish the actus reus of conspiracy. R. v. O’Brien, 1954 42 (SCC), [1954] S.C.R. 666 at pp. 668-9.
[66] For there to be a conspiracy, the prosecutor must prove beyond a reasonable doubt:
i. an intention to agree;
ii. completion of the agreement; and
iii. a common (unlawful) design
United States of America v. Dynar, 1997 359 (SCC), [1997] 2 S.C.R. 462, at para. 86 at p. 511. Further, there must exist an intention to put the common (unlawful) design into effect. Dynar, at para. 86; O’Brien at p. 668.
[67] In conspiracy cases, the important inquiry is not about the acts done in pursuit of the agreement, but whether there was, in fact, a common agreement in the first place to which the acts are referable and to which the alleged conspirators were privy. Papalia, at pp. 276-277; O’Brien at p. 668; Dynar at para. 87; R. v. Douglas, 1991 81 (SCC), [1991] 1 S.C.R. 301 at p. 316. Said somewhat differently, the focus of the inquiry is on whether and, if so, on what was agreed, not on what was done, although what was done in furtherance may help to establish the core element of conspiracy – the agreement. Douglas at p. 40; David Omerod, ed., Smith and Hogan Criminal Law, 11th ed. (New York: Oxford University Press, 2005) at p. 374.
[68] It is trite that the roles of individual conspirators may differ widely. The participants need not know each other, nor need they communicate directly with one another. Each need not know the details of the common scheme, though each must be aware of the general nature of the common design and be an adherent to it. R. v. Longworth (1982), 1982 3764 (ON CA), 67 C.C.C. (2d) 554 (Ont. C.A.) at pp. 565-6. Each conspirator does not have to commit or intend to commit personally the offence the conspirators have agreed to commit. R. v. Genser (1986), 1986 4729 (MB CA), 27 C.C.C. (3d) 264 (Man. C.A.) at p. 268 affirmed 1987 5 (SCC), 1987 39 C.C.C. (3d) 576 (S.C.C.).
[69] Where, as here, an indictment alleges that named persons conspired together and with other unknown persons, proof of participation of all named conspirators is not essential. R. v. Paterson (1985), 1985 167 (ON CA), 44 C.R. (3d) 150 (Ont. C.A.) at pp. 156-7. Further, where the evidence establishes the conspiracy alleged between a named person and a person or persons unknown, the fact that the evidence fails to establish another named person’s complicity does not entitle the first named to an acquittal. Paterson at p. 156.
[70] The fact that an agreement to commit a crime is conditional on the occurrence or non-occurrence of some event does not necessarily mean that there is no unlawful agreement. However, negotiations alone will not suffice, and sometimes it may be very difficult to determine whether the parties are merely negotiating or have agreed to do so something if it is possible or propitious to do so. R. v. Mills (1962), 47 Cr. App. R. 49, at pp. 54-55 (C.C.A.); R. v. Saik, [2007] 1 A.C. 18, at para. 5 (H.L.); Smith and Hogan, at pp. 363 and 371; Glanville Williams, Textbook of Criminal Law, 2nd ed. (London: Steven & Sons, Ltd., 1983) at p. 351; and R. v. Walker, [1962] Crim. L. R. 458 (C.C.A.). Indeed every agreement about future conduct is hedged about with conditions, for example, to burgle premises if the owner is not home, or to steal something if anything of value can be found. But in each case, there is nonetheless an unlawful agreement despite conditions attached to its execution.
[71] Conspiracy, like attempt, is a crime of intention. Its factual element or actus reus is established upon proof of the agreement to commit the predicate offence, for example to possess or launder the proceeds of crime. The factual element in the conspiracy need not correspond with the factual elements of the substantive offence that is the object of the conspiracy. The goal of the agreement, the commission of the substantive offence, is part of the mental element or mens rea of the offence of conspiracy. Dynar at para. 103. Where the goal of a conspiracy involves the commission of a substantive offence of which knowledge of certain circumstances is an essential element, the mental element is belief. The subjective state of mind of anyone who conspires with others to launder money is the belief that the money has illegitimate origins. Dynar at para. 108.
[72] Among the preliminary or inchoate crimes, conspiracy, although requiring two or more genuine participants, is more “preliminary” than an attempt: Dynar at para. 87. Conspiracy is also a continuing offence.
The Principles Applied
[73] The conspiracy counts alleged that the same parties were privy to two unlawful agreements. One agreement was to possess property or its proceeds of unlawful origin, the other to launder proceeds of crime. To establish the respondent’s liability, it was necessary for the prosecution to establish beyond a reasonable doubt that the respondent conspired with at least one other person, either Radojcic or some unknown individual, to commit the substantive offence alleged in the count. It was not necessary for the prosecution to prove that the parties included all of the respondent, Radojcic, and one or more unknowns.
[74] The trial judge approached her task by parsing the language of the indictment to read it as if there were two conspiracies alleged with the same object: one involving the respondent and Radojcic, the other the respondent and persons unknown. The trial judge then made discrete findings of fact in connection with each branch of the conspiracy. In each instance she found that the prosecution’s case fell short of proving the agreement beyond a reasonable doubt. Her findings, based on inferences from things said and done or not said and omitted, are entitled to deference unless speculative or tainted by legal error.
[75] In my view, the findings of fact made by the trial judge are contaminated by legal error.
[76] To begin, in the circumstances of this case, it was wrong to approach the prosecution’s case on each conspiracy count as if two discrete conspiracies were alleged within the count. Only one conspiracy was alleged in each count. The prosecution’s burden did not require it to prove, as the trial judge seems to have concluded, that the respondent conspired with both Radojcic and persons unknown. An agreement with either would suffice.
[77] Second, the trial judge’s findings that the respondent attempted to commit a conspiracy with Paul Cox and that he agreed with others to enter into an agreement with Cox, should Cox “accept the condition with respect to fee”, reflect a fundamental misunderstanding of the crime of conspiracy and the specific conspiracies alleged here. The respondent was not charged with conspiring with Sergeant Nicholson (known as Paul Cox); rather, he is alleged to have conspired with Radojcic and others unknown to gain possession of what he believed to be proceeds of drug trafficking in Cox’s hands and to launder those proceeds as Cox sought. Further, Cox was a counterfeit conspirator, not someone with whom the respondent, for that matter anybody else, could conspire as a matter of law.
[78] Third, the trial judge appears to have considered the disagreement over fees, as between Cox and the respondent, as fatal to the agreement. While such a disagreement may have been fatal to a binding contract (leaving aside the small matter of illegality), Cox’s failure to agree to the fee represented by the respondent to be the fee exigible for a laundering services is irrelevant to the question whether the respondent and his associates agreed to possess or to launder proceeds of crime.
[79] I will leave until later in these reasons consideration of the consequences of the legal errors on the validity of the acquittals on the conspiracy counts.
3. The Counselling Count
The Alleged Errors
[80] The principal complaint Mr. Devlin advances on behalf of the appellant in connection with a count of counselling is twofold.
[81] First of all, the trial judge considered the fact that Cox approached the respondent first about money laundering as a relevant factor in her decision that the counselling charge was not made out. The fact that the person allegedly counselled was the first off the mark in the discussions is not relevant to a determination of whether the other party is guilty of counselling.
[82] The second flaw in the judge’s reasoning, according to the appellant, is her determination that the respondent’s belief that Cox had to obtain the approval of others to any scheme, in particular the fee to be paid for laundering the funds, sounded the death knell of the counselling charge.
The Governing Principles
[83] Counselling includes but is not limited to procuring, soliciting and inciting. What is essential is an active inducement or advocacy, not merely the description of the commission of an offence. R. v. Hamilton, 2005 SCC 47, [2005] 2 S.C.R. 432, at paras. 15, 22 and 23; R. v. Sharpe, 2001 SCC 2, [2001] 1 S.C.R. 45, at para. 56. In other words, the actus reus of counselling requires:
• deliberate encouragement
or
• active inducement
of the commission of a criminal offence. Hamilton at para. 29
[84] The mental element or mens rea in counselling “requires nothing less than an accompanying intent or conscious disregard of the substantial and unjustified risk inherent in the counseling” (emphasis removed): Hamilton at para. 29. Said somewhat differently, the prosecution must prove beyond a reasonable doubt that an “accused either intended that the offence counselled be committed, or knowingly counselled the commission of the offence while aware of the unjustified risk that the offence counselled was in fact likely to be committed as a result of the accused’s conduct”: Hamilton at para. 29.
[85] Counselling by procuring or inciting another does not require that the inciter originate or initiate the transaction. R. v. Gonzague (1983), 1983 3541 (ON CA), 4 C.C.C. (3d) 505, at p. 508 (Ont. C.A.). In other words, a person may be convicted of incitement, thus counselling, although the plan originated with the party alleged to have been incited. Gonzague at p. 508; Glanville Williams, Criminal Law (The General Part), 2d ed. (London: Steven & Sons, Ltd., 1961) at p. 612; R. v. Goldman, [2001] EWCA Crim. 1684 (C.C.A.).
[86] The preliminary crime of counselling is complete when the solicitation or incitement occurs, even if the incitee rejects the solicitation or merely feigns his or her assent. Gonzague at p. 508.
The Principles Applied
[87] The trial judge correctly stated the standard to be applied to determine whether the respondent had counselled Cox to launder the proceeds of crime. In her application of the test, however, the trial judge took into account two irrelevant considerations:
i. that Cox was the initiator of the money laundering discussion and sought assistance in the development and execution of a successful scheme; and
ii. that Cox made it clear that he had superiors to consult before he would commit to the terms offered by the respondent and his associates.
[88] The trial judge made two essential findings of fact:
i. that the respondent did not intend to incite Cox to launder money; and
ii. that the respondent only provided a detailed response to Cox’s entreaty.
The effect of these findings, which were open to the trial judge on the evidence adduced at trial, was that the prosecutor had failed to prove both the actus reus and the mens rea of the offence of counselling.
[89] It is difficult to accurately gauge the effect of the trial judge’s legal errors (of taking into account irrelevant considerations) on her critical findings of fact. It seems fair to accord them some measure of influence, but I am not prepared to say that the errors made were such that there is a reasonable degree of certainty that the outcome may well have been affected by them. R. v. Graveline, 2006 SCC 16, [2006] 1 S.C.R. 609 at para. 15. The onus on the Crown is a heavy one that requires the Crown to satisfy an appellate court with a reasonable degree of certainty. R v. Sutton, 2000 SCC 50, [2000] 2 S.C.R. 595 at para. 2. In the concrete reality of this case, I am not prepared to say that the Crown has met its demanding onus.
4. The Attempt Counts
The Alleged Errors
[90] Mr. Devlin submits that the trial judge erred in law in failing to find the respondent guilty of both attempts charged. The only step left to be accomplished was for Cox to turn over the funds to the respondent. The evidence demonstrated that the respondent had the men rea for each attempt charged. He knew the funds were the proceeds of crime (trafficking in cocaine), intended to take possession of them and intended to launder them. The inability of the respondent and Cox to agree on a fee for the respondent’s services did not, indeed could not, raise a reasonable doubt about the respondent’s state of mind.
[91] The appellant adds that the respondent’s conduct constituted an attempt, not mere preparation. The fact that further steps remained is of no moment, provided what was done extended beyond mere preparation. In the law of attempts, the first step beyond mere preparation is just as much an attempt as the last before the completion of the substantive offence.
The Governing Principles
[92] Section 24 of the Criminal Code instructs that an attempt to commit an offence consists of two elements:
i. the intent to commit the offence; and
ii. conduct, which is more than merely preparatory acts or omissions, for the purpose of carrying out the intention to commit the offence.
Attempts are preliminary or inchoate crimes. That it is not possible to commit the substantive offence attempted is of no legal moment. Dynar at para. 49; Criminal Code, s. 24(1).
[93] Under s. 24(2) of the Criminal Code, whether conduct by a person who intends to commit a crime is mere preparation or has progressed beyond it to constitute the actus reus of an attempt is a question of law. Designation of a judge’s decision to characterize an accused’s conduct as mere preparation or the actus reus of an attempt as a question of law is of particular importance in cases like this where the appellant’s right of appeal is restricted to questions of law alone.
[94] In every case of an attempt to commit an offence, the mens rea of the substantive offence will be present and complete. In every attempt, what is incomplete is the actus reus of the substantive offence. But incompleteness of the actus reus of the substantive offence will not bar a conviction of attempt, provided the actus reus is present in an incomplete, but more than preparatory way. Dynar at paras. 73 and 74.
[95] The actus reus may be but does not have to be a crime, tort or even a moral wrong. R. v. Cline, 1956 150 (ON CA), [1956] O.R. 539, at p. 550 (C.A.).
[96] The authorities have yet to develop a satisfactory general criterion to assist trial judges in making the crucial distinction between mere preparation, on the one hand, and an attempt on the other. We leave the determination of where on the continuum the conduct lies to the common sense judgment of trial judges. R. v. Deutsch, 1986 21 (SCC), [1986] 2 S.C.R. 2 at pp. 22-23.
[97] The distinction between preparation and attempt is a qualitative one involving the relationship between the nature and quality of the act said to constitute the attempt and the nature of the substantive offence attempted in its complete form. Deutsch at p. 23.
[98] To determine on which side of the preparation/attempt divide an accused’s conduct falls, a trial judge should consider the relative proximity of that conduct to the conduct required to amount to the completed substantive offence. Relevant factors would include time, location and acts under the control of the accused yet to be accomplished. Deutsch at p. 23.
[99] Relative proximity may give an act, which might otherwise seem to be mere preparation, the quality of an attempt. Deutsch at p. 26; R. v. Henderson, 1948 17 (SCC), [1948] S.C.R. 226 at p. 245. Further, an act on its face an act of commission does not lose its quality as the actus reus of an attempt simply because further acts are required, or because a significant period of time may elapse before the completion of the substantive offence. Henderson at p. 244; Deutsch at p. 26.
[100] To constitute the actus reus of an attempt, the act of an accused need not be the last act before the completion of the substantive offence. To constitute the actus reus of an attempt, an act must be sufficiently proximate to the intended crime to amount to more than mere preparation to commit it. This requirement of proximity, expressed in the divide between preparation and attempt, has to do with the sequence of events leading to the crime that an accused has in mind to commit. To be guilty of an attempt, an accused must have progressed a sufficient distance (beyond mere preparation) down the intended path. Williams, Criminal Law (The General Part), at p. 625. An act is proximate if it is the first of a series of similar or related acts intended to result cumulatively in a substantive crime.
[101] The legislative decision reflected in s. 24(2) of the Criminal Code, to make the determination whether an act done with intent to commit an offence is or extends beyond mere preparation a question of law, would seem to impose a standard of correctness for appellate review of decisions made at trial on this issue.
The Principles Applied
[102] The law of attempts becomes engaged only when the mens rea of the completed offence is present in its entirety and the actus reus of the completed offence is present in an incomplete but more-than-merely preparatory way. An attempt may be complete without the actual commission of any other offence and even without the performance of any act unlawful in itself.
[103] The completed offences here are possession of unlawfully obtained property or its proceeds and laundering the proceeds of crime. The subject-matter of each count is the same: funds obtained by trafficking in cocaine. In the former case, the actus reus is possession of the proceeds without more. Further conduct is required, however, to satisfy the actus reus requirement for the laundering offence, although none of the means of committing the offence can be accomplished without first obtaining possession of the illicit funds. Laundering bespeaks possession of the things to be laundered.
[104] To prove the attempts charged here, the prosecution did not have to establish that the respondent actually had possession of the proceeds of crime. It was incumbent upon the prosecution to prove, however, that, with the necessary state of mind, the respondent took more-than-preparatory steps to obtain possession of the proceeds.
[105] The trial judge concluded that the respondent’s conduct did not extend beyond mere preparation. She further found that the respondent did not have the intent required to establish either attempted crime.
[106] Preliminary to her consideration of the attempted offences, the trial judge made the following finding:
I am entirely satisfied that Mr. Root attempted to commit a conspiracy with Sergeant Nicholson, but for the reasons given by the Supreme Court of Canada in R. v. Dery and the reasons just given, Mr. Root is therefore found not guilty of counts one and two on the indictment. (Emphasis in original)
[107] Immediately after her finding that the respondent’s conduct did not extend beyond mere preparation, the trial judge noted:
Mr. Root and this other person or persons agreed to enter into an agreement with Mr. Cox should Mr. Cox accept the condition with respect to fee. If Mr. Cox did not accept their demand, the intention of the others was NOT to enter into an agreement with Mr. Cox who wished to launder proceeds of crime. Put another way, Mr. Root did not intend to enter into an agreement with Mr. Cox to launder proceeds of crime if the demand for the fee by his partner(s) was not met. (Emphasis in original)
[108] In my view, the trial judge erred in law in concluding that the respondent’s conduct did not reach beyond mere preparation in relation to each attempt charged.
[109] The respondent learned from Radojcic about the assistance Paul Cox sought and required to launder funds. It was clear that the funds were the proceeds of crime – trafficking in cocaine. The respondent met Cox on several occasions and offered several means for Cox to achieve his purpose. Property investments. Consulting fees. Corporate loans. The respondent consulted with others and set out the terms under which the laundering of funds would be done. Discussion of the fees and other terms took place on more than one occasion. The respondent made it clear that he and his associates stood ready, willing and able to complete the transactions in accordance with their terms.
[110] The steps that remained to complete the possession offence was for Cox to agree to the terms and to turn over the funds to the respondent. Both of these steps were beyond the control of the respondent, who needed to do nothing more to complete the offence than to take possession, when Cox delivered. The completed laundering offence required a further step beyond possession, a step that the respondent did have control over.
[111] In the circumstances of this case, it is difficult to reconcile the trial judge’s conclusion that the respondent attempted to conspire with Cox, thereby engaging in conduct that went beyond mere preparation, with her later finding that the conduct did not extend beyond mere preparation. To characterize the respondent’s conduct as not going beyond mere preparation in the circumstances of this case involving comparatively passive substantive crimes, constitutes an error of law.
[112] In a similar way, the finding of a lack of mens rea is also flawed. The trial judge found that the respondent and his associates intended to launder funds if Cox agreed with their fee. Absent Cox’s agreement, the trial judge reasoned, the mens rea for both attempts was lacking. An attempt is not a conspiracy. What is relevant and dispositive is the state of mind of the party who attempts to commit the offence. Their intent was to possess and launder proceeds of crime for a fee. Cox’s refusal to pay the fee stopped what occurred short of the substantive offence. However, Cox’s failure to agree did not extinguish the respondent’s culpable state of mind.
E. DISPOSITION
[113] It remains to assess the effect of the errors made in connection with the conspiracy and attempt counts on the validity of the acquittals recorded on those counts.
[114] In order to obtain a new trial on an appeal from acquittal, Crown counsel is required to satisfy this court that the trial judge’s errors might reasonably be thought, in the concrete reality of this case, to have had a material bearing on the acquittals. Crown counsel is under no obligation, however, to persuade an appellate court that the verdict would, of necessity, have been different. Graveline at para. 14.
[115] The errors made here related to the essential elements of each conspiracy and attempt offence of which the respondent was acquitted. Their cumulative effect, in the circumstances, might reasonably have had a material bearing on the acquittals recorded by the trial judge.
[116] The appellant sought the entry of convictions on at least the attempt counts in the event that the appeal was successful. For us to substitute convictions in place of the acquittals, we must be satisfied that all the findings of fact necessary to support a finding of guilt must have been made either explicitly by the trial judge or not be an issue. R. v. Cassidy, 1989 25 (SCC), [1989] 2 S.C.R. 345, at pp. 354-355.
[117] The reasons of the trial judge in this case simply do not contain in explicit terms all the findings necessary for convictions on the accounts affected by legal error. While it is accurate to say that which way this case falls depends largely on inferences drawn from words spoken and things done, and that an appellate court is as well – equipped as trial court to draw inferences from uncontroverted words and conduct, much often turns on the subtleties of speech revealed in tape recordings that we have not heard. In some instances, the meetings were not recorded and we lack the opportunity of a trial court of observing the witness give his evidence. I would not enter convictions in place of the acquittals recorded at trial.
[118] In the result, I would allow the appeal, set aside the acquittals on the counts of conspiracy and attempt and order a new trial on those counts (counts 1 to 4, inclusive) of the indictment, but dismiss the appeal from the acquittal on count 5, counselling.
RELEASED: December 22, 2008 “KNF”
“David Watt J.A.”
“I agree K. Feldman J.A.”
“I agree Paul Rouleau J.A.”