Court of Appeal for Ontario

Date: 2018-12-14 Docket: C59314

Judges: Hoy A.C.J.O., Feldman and Benotto JJ.A.

Between

Her Majesty the Queen Respondent

and

Daniel Barna Appellant

Counsel

Michael A. McKee, for the appellant

Tracy Kozlowski, for the respondent

Heard: December 4, 2018

Appeal Information

On appeal from the conviction entered on June 20, 2014 by Justice L.A. Pattillo of the Superior Court of Justice, with reasons reported at 2014 ONSC 1011, and from the sentence imposed on August 29, 2014.

Reasons for Decision

Introduction

[1] The appellant appeals his conviction for laundering proceeds of crime, contrary to section 462.31 of the Criminal Code, R.S.C. 1985, c. C-46. The appellant also seeks leave to appeal the sentence imposed in connection with his conviction.

[2] He makes four main arguments on his appeal from conviction.

First Ground: Section 11(b) Charter Application

[3] First, the appellant argues that the trial judge erred in dismissing his s. 11(b) Charter application: see R v. Barna, 2014 ONSC 7558. In particular, the appellant argues that in considering whether the overall lapse of time from his arrest to the commencement of trial was unreasonable, the trial judge erred in characterizing the case as one of "considerable complexity" and, as a result, allocated an unreasonable amount of time to the inherent time requirements of the offence. He further argues that the trial judge erred in attributing the delay resulting from the co-accused's medical issues to defence delay, contrary to this court's decision in R v. Gopie, 2017 ONCA 728, 356 C.C.C. (3d) 36.

[4] While the delay in this case (53 months from the appellant's arrest to the end of trial) exceeds the presumptive 30-month ceiling established by the Supreme Court in R v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631, we are not persuaded that there is any basis to interfere with the trial judge's dismissal of the appellant's s. 11(b) Charter application.

[5] Importantly, the trial judge's s. 11(b) Charter ruling was issued a full two years prior to the release of Jordan. At that time, the framework established by the Supreme Court in R v. Morin, [1992] 1 S.C.R. 771 governed an accused's s. 11(b) Charter right to be tried within a reasonable time. Applying the Morin framework, the trial judge found the delay was reasonable.

[6] The trial judge's characterization of the case as one of considerable complexity – and corresponding allocation of time to inherent time requirements – is amply supported by the record. Further, while the appellant now takes issue with characterizing the delay resulting from the co-accused's medical problems as defence delay, before the trial judge the appellant was content with the adjournments granted because of the co-accused's poor health and accepted that the resulting delay should be attributable to the defence. As a result, the trial judge properly considered the resulting delay as being attributable to the actions of the defence. We see no error in the trial judge's application of the Morin framework to the facts of this case.

[7] In these circumstances, the "transitional exceptional circumstance" recognized in Jordan applies and is dispositive. The parties reasonably relied on the Morin framework throughout the progression of the prosecution. The relative complexity of the case, the fact the period of institutional delay as assessed by the trial judge fell within (albeit at the upper limits) of the Morin guidelines, and the seriousness of the charges, weighed against the prejudice to the accused, support the application of the "transitional exceptional circumstance" in this case: see R v. J.C.P., 2018 ONCA 986 at paras. 20-21; Gopie, at para. 178. Moreover, the appellant has not identified any (let alone repeated) "mistakes or missteps by the Crown" that would render the delay unreasonable, such that the transitional exceptional circumstance should not apply to permit delay beyond the Jordan ceiling found to have been reasonable under Morin: Jordan, at paras. 96-102. The Supreme Court indicated that the release of Jordan should not automatically transform what would have been considered reasonable delay under Morin into unreasonable delay: Jordan, at para. 102. This direction is particularly apposite here, where the trial judge's s. 11(b) ruling (which we accept was correct under the Morin framework) was issued a full two years prior to the release of Jordan.

Second Ground: Actus Reus of Money Laundering

[8] Second, the appellant argues that the actus reus of the offence of laundering proceeds of crime was not made out because when the appellant attempted to cash the bank draft, he was told by Cash Money that the bank needed to speak with him before it would verify the bank draft. As a result, the appellant was unable to cash the bank draft and Cash Money eventually returned the bank draft to the bank, without cashing it. The appellant describes this as the bank "revoking" the bank draft. He submits that, upon revocation, the bank draft ceased to be a bank draft and, as a result, the actus reus of laundering proceeds of crime was not made out.

[9] From the appellant's submissions, we take him to argue that since the bank "revoked" the bank draft before he could cash it, there was no "risk of loss or deprivation" and the underlying fraud was not made out. As a result, the bank draft was not property "obtained… as the result of the commission in Canada of a designated offence" (i.e. by fraud).

[10] We reject this argument.

[11] Section 462.31(1) of the Criminal Code provides as follows:

462.31(1) Every one commits an offence who uses, transfers the possession of, sends or delivers to any person or place, transports, transmits, alters, disposes of or otherwise deals with, in any manner and by any means, any property or any proceeds of any property with intent to conceal or convert that property or those proceeds, knowing or believing that all or a part of that property or of those proceeds was obtained or derived directly or indirectly as a result of

(a) the commission in Canada of a designated offence; or

(b) an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence.

[12] The essential elements of laundering proceeds of crime are: (1) that the accused dealt with property (in this case, the bank draft) or proceeds of property; (2) that the property was obtained by crime (in this case, fraud); (3) that the accused knew or believed that the property had been obtained by crime; and (4) that the accused intended to conceal or convert the property: R v. Daoust, 2004 SCC 6, [2004] 1 S.C.R. 217; R v. Tejani (1999), 138 C.C.C. (3d) 366 (Ont. C.A.).

[13] The underlying fraud in this case was the depositing of counterfeit cheques, verification of those cheques, and immediate withdrawal of the funds in cash or cash equivalents (including the bank draft at issue in respect of the appellant's conviction). While the bank acted quickly to "revoke" the bank draft obtained by the appellant, it was unable to recover all the funds withdrawn on the specific counterfeit cheque in issue. As the trial judge found, the bank suffered an actual pecuniary loss as a result.

[14] The bank draft was "property" and it was obtained as the result of the commission of fraud. The actus reus was made out when the appellant picked up the bank draft, took it to Cash Money, and twice tried to convert it to cash. As the trial judge found, this conduct not only established the actus reus of the offence (i.e. the appellant had dealt with the bank draft obtained by fraud), but also a necessary element of the mens rea of the offence (i.e. that the appellant intended to convert bank draft).

Third Ground: Mens Rea and Willful Blindness

[15] Third, the appellant argues that while the trial judge correctly held that the mens rea of laundering proceeds of crime can be satisfied by a finding that the accused was willfully blind to the fact that the property had been obtained as a result of the commission of a designated offence, and correctly articulated the doctrine of willful blindness, he erred in finding that the appellant was willfully blind to the origins of the bank draft. As a result, the appellant argues the mens rea of the offence of laundering proceeds of crime was not satisfied.

[16] We reject this argument. The trial judge's finding that the appellant was willfully blind to the fact that the bank draft was obtained by fraud is amply supported by the record. The trial judge was entitled to reject the appellant's evidence in reaching this conclusion.

Fourth Ground: Reopening of Defence

[17] Fourth, the appellant argues that the trial judge erred by dismissing the appellant's motion to permit him to re-open his defence and call further medical evidence after he was found guilty of laundering proceeds of crime: see R v. Barna, 2014 ONSC 3788. The appellant argues that because he represented himself at trial and did not address the issue of willful blindness in his closing submissions, once the trial judge knew he was going to find him willfully blind to the fact the bank draft was obtained by fraud, the trial judge should have alerted him and invited further evidence and submissions. The appellant argues that because the trial judge did not do so, the trial judge was required to permit him to re-open his defence.

[18] We reject this argument. While the appellant represented himself, he had practiced criminal law for a number of years, although he was disbarred in 2004 for, among other things, trust fund violations. The trial judge outlined the elements of the offence of laundering proceeds of crime at the outset of trial, and, in the course of the appellant's closing submissions, alerted the appellant that willful blindness was an issue and asked for submissions. Moreover, the trial judge found – in our view correctly – that the proposed further evidence could have been available at trial, but was not adduced for strategic reasons, and in any event would not have altered his conclusion that the appellant was willfully blind to the fact that the bank draft was obtained by fraud.

[19] Accordingly, we dismiss the appellant's appeal against his conviction.

Sentence Appeal

[20] The appellant also seeks leave to appeal the sentence imposed by the trial judge, arguing that a conditional sentence of 15 months followed by a period of two years' probation was excessive in circumstances and this court should substitute a conditional discharge.

[21] As a preliminary matter, we reject the Crown's argument that the appellant's application for leave to appeal sentence is moot because the appellant has served his sentence and his period of probation has ended. While his application would likely be moot if he were seeking a reduction in the period, or a change to the terms, of his conditional sentence or probation order, the appellant seeks a conditional discharge because he believes it would improve his prospects of being re-admitted to practice law in Ontario. We are not convinced this would be the case, but the substitution of a conditional discharge might nonetheless be of some benefit to the appellant.

[22] However, we see no basis to interfere with the sentence imposed by the trial judge. In his reasons for sentence, the trial judge specifically considered whether it was appropriate to grant the appellant a conditional discharge pursuant to s. 730(1) of the Criminal Code. The trial judge adverted to the appellant's comparatively minor role in the fraud, and the fact that imposing a discharge would be in the appellant's best interests given his intention to apply to be re-admitted to practice law in Ontario. But the trial judge ultimately concluded that it would be contrary to the public interest to grant a discharge given the severity of the offence and need to further the sentencing objective of deterrence. We agree with the trial judge that a conditional discharge was not appropriate in this case.

[23] Accordingly, we would dismiss the appeal. Leave to appeal sentence is granted, but the sentence appeal is dismissed.

"Alexandra Hoy A.C.J.O."

"K. Feldman J.A."

"M.L. Benotto J.A."