Court of Appeal for Ontario
Date: May 30, 2018
Docket: C57589
Judges: Sharpe, Pardu and Fairburn JJ.A.
Parties
Between
Her Majesty the Queen Respondent
and
David Ajise Appellant
Counsel
R. Craig Bottomley, for the appellant
Xenia Proestos, for the respondent
Hearing
Heard: March 21, 2018
On appeal from: The conviction entered on June 14, 2013 and the sentence imposed on January 10, 2014 by Justice Thomas A. Bielby of the Superior Court of Justice, sitting with a jury.
Decision
Sharpe J.A.:
[1] Introduction
[1] The appellant, a tax return preparer, was charged on a one count indictment with fraud over $5,000 for filing false claims of charitable donations on behalf of his clients. The appellant did not dispute that he had filed hundreds of claims for charitable deductions for donations of used goods to a registered charity called Tractors for Daily Bread ("Tractors") and that he had been paid by his clients a percentage of the amounts claimed, usually between 10 and 15%. He testified, however, that he believed that the claims were valid and that they had been verified by Tractors.
[2] After a twelve day jury trial, the appellant was convicted and sentenced to 30 months in custody.
[3] The appellant submits that the trial judge erred in admitting the non-expert opinion evidence of a Canada Customs and Revenue Agency ("C.C.R.A.") investigator, and further erred in his instruction to the jury on the mens rea component of fraud and the use that could be made of prior inconsistent statements. The appellant also seeks leave to appeal his sentence.
Facts
[4] In 2002, the appellant, at the time a recent immigrant from Nigeria, took an eight week tax preparation course and started his own tax preparation business. He met Mr. Eto Eto, the executive director of Tractors. Tractors' stated purpose was to collect donations in cash and in used goods to alleviate poverty in Africa.
[5] Eto referred tax clients to the appellant and allowed the appellant to carry on his tax preparation business at Tractors' office. The appellant also met clients at coffee shops and in his car to prepare their tax returns.
[6] The appellant carried on his tax preparation business for the taxation years 2003, 2004 and 2005 in the name of Datronix Solutions, an unincorporated entity. In 2006, he involved Ayodeji Salami in his tax preparation business. Salami obtained his own Efiler number but acted under the appellant's instructions.
[7] The Crown called eleven of the appellant's clients, and one client of Salami's, as witnesses. They testified that the appellant suggested that they could reduce their income tax by making donations in cash and in kind to Tractors. The appellant asked them to pay him 10 to 15% of the amount of the donation to be claimed and also charged them a fee for preparing their return. Over the three year period between 2003 and 2005, the appellant submitted 27 tax returns on behalf of those clients claiming a total of $223,793 in charitable donations resulting in tax refunds of $58,138. The 10 to 15% fee charged by the appellant was typically paid from the proceeds of the clients' tax refund as the appellant would hold their cheques until they received their refunds. The clients testified that they did not think that they were doing anything illegal, but eleven of them admitted that they had made no donations in kind to Tractors. The evidence of the twelfth client was very vague about what he had donated. All of these witnesses testified that they had been reassessed and had to re-pay the C.C.R.A.
[8] The Crown also called Seeta Maraj, a C.C.R.A. investigator. Maraj prepared a number of detailed spread-sheets summarizing information obtained from documents filed with the C.C.R.A., bank documents obtained pursuant to a production order and documents seized pursuant to search warrants executed at the Tractors premises and the residences of the appellant, Eto and Salami. The appellant's clients' tax returns were found on his computer. The charitable receipts issued by Tractors were found on Eto's computer. The appellant made no objection when the spreadsheets and other documents were introduced in evidence.
[9] While Maraj's evidence was lengthy and the supporting documents were voluminous, the totality of that evidence may be summarized as follows. The spreadsheets itemized, name by name, the claims for charitable donations made in income tax returns filed by the appellant on behalf of clients for the taxation years 2003, 2004 and 2005, and by Salami for the taxation year 2005. A significant number of returns claim large amounts for charitable donations, averaging 20 to 30% of each client's reported income. C.C.R.A. records indicated that the total amount of charitable donations claimed by the appellant's clients was $842,593 in 2003, $1,801,123 in 2004, and $1,830,712 in 2005. Salami's clients claimed $549,028 in 2005. The refunds paid on account of those claims were for approximately $1,400,000.
[10] A spreadsheet found in Eto's residence listed $766,030 in charitable donations for the appellant's clients in 2003. Spreadsheets for the years 2004 and 2005 linked the claimed donations by each client with the cancelled cheques the appellant had received for making charitable claims. The total amount of charitable receipts claimed was $1,137,255 for 2004, and $1,226,766 for the appellant and $421,436 for Salami for 2005. The spreadsheets showed donation receipts for the appellant's clients found on the Tractors computer, indicating claims for donations of $951,050 in 2004 and $998,910 in 2005. One of the documents seized was an email from the appellant to Eto providing a four page list giving the names of clients and the amounts they had claimed for charitable donations to Tractors for the year 2005.
[11] By contrast, Tractors reported receiving gifts in the amounts of $700 for 2003, zero in 2004 and $200 in 2005.
[12] The Crown also called Salami who testified that he assisted the appellant in his tax preparation business for the 2005 taxation year.
[13] The appellant testified in his own defence. He swore that he did not know that the charitable claims he filed on behalf of his clients were false. He relied on Eto to verify the claims, to have the donated goods appraised and to ensure that proper charitable receipts were filed. He testified that he was shocked when the C.C.R.A. investigated his clients and only realized that the charitable donation claims were false when he saw that Tractors had reported little or no charitable donations.
[14] The appellant conceded that he had received payments for 10 to 15% of the charitable donations claimed and that he had not reported those payments on his tax returns. The appellant testified that he had often held his clients' cheques and only cashed them after the refund was paid. He denied that the payments he received from clients were for fraudulent charitable receipts and asserted that they were by way of commission for soliciting charitable donations.
Issues
[15] The appellant appeals his conviction on three grounds:
That the trial judge erred by admitting non-expert opinion evidence from a C.C.R.A. investigator and in his jury instruction relating to that evidence;
That the trial judge erred in his instruction on mens rea; and
That the trial judge erred in his instruction relating to prior inconsistent statements.
The appellant also seeks leave to appeal his sentence.
Analysis
1. Opinion Evidence
[16] The appellant argues that the trial judge erred by admitting what amounted to opinion evidence from Seeta Maraj, the C.C.R.A. investigator, who was not qualified as an expert. This argument focusses on the evidence relating to Exhibit 12, a spreadsheet headed "Tax Evaded Calculation – Ajise (Efiler D6458 & E0300 & Salami (Efiler D5913)" that gives totals for "false donation claims" in returns filed by the appellant for 2003, 2004 and 2005, and Salami for 2005. Exhibit 12 was filed towards the end of Maraj's evidence in chief. The appellant's trial counsel did not object to its admissibility. Exhibit 12 identified "false donation" claims totalling $842,593 in 2003, $1,801,123 in 2004 and $2,379,740 ($1,830,712 by the appellant and $549,028 by Salami) in 2005. Exhibit 12 also stated that $241,678 in tax was "evaded" in 2003, $493,445 in 2004 and $678,043 ($521,335 for the appellant and $156,708 for Salami) in 2005. These figures were derived from what the C.C.R.A. files showed had been claimed by way of charitable donations on the returns filed by the appellant and Salami.
[17] Maraj was asked to explain "how you know those donations were false". She explained she had compared the amounts shown by the C.C.R.A. records with the amounts shown on the spreadsheets she had prepared based on what was found on Eto's computer and based on the cancelled cheques the appellant had received. These spreadsheets set out, client by client, the charitable claims the clients had made for donations to Tractors. The total amounts from those lists were somewhat less than shown on Exhibit 12: for 2003, $766,030 rather than $842,593; for 2004, $1,137,255 rather than $1,801,123; and for 2005, $1,226,766 rather than $1,830,712. She explained that while she had tracked cancelled cheques, some of the payments to the appellant could have been in cash. She testified that the amounts were close enough to lead her "to believe that all of the donation claims were false". The appellant submits that this amounted to opinion evidence that should not have been admitted as Maraj was not qualified as an expert.
[18] The appellant also takes issue with Maraj's evidence that she believed that one of the lists found on Eto's computer had been prepared by the appellant. When asked why she thought that, Maraj explained that the list had personal information about the clients as well as filing information that would not have been available to Eto.
[19] No objection was made to any of this evidence and the appellant's trial counsel began her cross-examination of Maraj by asking: "You indicated to us today that your belief that the receipts were false were, in effect, based on a couple of different things. Is that right?" Maraj replied that her belief was based on two facts. First, that Tractors' charity returns reported little or no charitable donations. Second, that while there were discrepancies between the amounts shown on Exhibit 12 and the amounts derived from the spreadsheets she prepared, the differences were not sufficiently large to give rise to concern. The appellant's trial counsel probed Maraj on the significance of the discrepancies but Maraj maintained her position that all the claims for charitable donations filed by the appellant were false.
[20] The appellant also submits that Crown counsel repeatedly invited the jury in her closing address to rely on Maraj's "findings of false charitable donation claims" (emphasis added). The prejudice to the appellant was compounded when the trial judge in his instructions to the jury referenced Maraj's testimony that the returns filed by the appellant "contained false donation claims in her opinion" (emphasis added). Further exception is taken to the instruction reminding the jury of Maraj's "belief" that the appellant prepared one of the lists of the donations found on Eto's computer, and that "[the] minimal or nil donations reported by Tractors confirmed for Ms. Maraj her conclusions that claims were false."
[21] The Crown argues that Maraj's evidence was factual in nature and that there was no need to qualify her as an expert. The Crown also submits that as the appellant's trial counsel did not object to the evidence impugned on appeal, the argument that it should be ruled inadmissible on appeal should not be entertained.
[22] I am not persuaded that the admission or treatment of Maraj's evidence at trial amounts to a reversible error for the following reasons.
[23] First, Maraj is properly characterized by the Crown as a fact witness, called to explain how she had assembled and summarized a large volume of documentary evidence relating to the income tax returns filed by the appellant. It was only at the end of her evidence in chief, when Exhibit 12 was introduced, that she was asked to explain why she believed all the charitable claims filed by the appellant's clients were false. When asked that question, she simply explained what the records showed. Maraj was doing nothing more than explaining her sources and her methodology in a way that would allow the jury to understand and to assess the numbers on Exhibit 12. The lists from Eto's computer, the list on the appellant's computer, and the compilation derived from the cancelled cheques demonstrated that a very large number of the appellant's clients had submitted substantial claims for charitable donations to Tractors representing a disproportionate part of their income. The records showed that the appellant had been directly paid 10 to 15% of the amounts claimed by way of donation and that Tractors had reported receipt of virtually no charitable donations. While the total of the itemized, client by client lists of Tractors donations was less than the total showed by C.C.R.A. records for all returns filed by the appellant, Maraj testified that they were close enough to lead her to believe that all the charitable claims the appellant filed were false, which is why she included them in the "false donation" column on Exhibit 12. While it might have been preferable had Maraj not been asked to formulate her summary of the evidence she found in terms of her belief, and had the trial judge not referred to her opinion in his instructions, it remains that Maraj's evidence was essentially factual in nature. It was entirely proper for her to explain to the jury the nature of the calculations she had made and the source data she used to compile Exhibit 12, which was an admissible demonstrative aid designed to summarize the properly admitted evidence and "to assist the jury in understanding the entire picture presented by voluminous documentary evidence": R v. Scheel (1979), 42 C.C.C. (2d) 31, at p. 34 (Ont. C.A.); Kon Construction Ltd. v. Terranova Developments Ltd., 2015 ABCA 249, 20 Alta L.R. (6th) 85, at para. 46. As with the summaries in Scheel, the usefulness of Exhibit 12 "depended entirely…upon the acceptance by the jury of the proof of the facts upon which [it was] based": Scheel, at p. 34. The jury was in a position to assess for itself the worth of Maraj's explanation for her calculations as they did not rest on or draw its force from any specialized or technical skill or knowledge: see R. v. Hamilton, 2011 ONCA 399, 271 C.C.C. (3d) 208, at para. 277.
[24] Maraj explained how she had compiled the spreadsheets and what her background sources were. Maraj's calculations were explained and her reasons for labelling the donations "false" were fully explored by defence counsel and exposed in a way that could be assessed by the jury as a matter of logic and common sense. Even if not every dollar of the $5,023,456 shown on Exhibit 12 was nailed down as being a Tractors' donation, it was open to a trier of fact to infer that false claims comprised a significant portion of that total. The background sources were available for the jury's consideration. In her closing address, Crown counsel encouraged the jury to consider those sources. The trial judge also referred to the background sources in reviewing the evidence during his charge to the jury. The jury was also instructed that they could accept all, some or none of the evidence.
[25] Maraj's statement that she believed that the appellant was the source of one of the lists found on Eto's computer has to be read in context. The evidence showed that the appellant had sent lists to Eto and, as Maraj explained, the list at issue contained information to which the appellant was privy and Eto was not. The question was one of fact upon which a non-expert witness could properly express a view: see R. v. Graat, [1982] 2 S.C.R. 819, at pp. 835-839.
[26] Second, the appellant did not object to this evidence at trial. The Crown suggests that this could have been a tactical decision as the alternative might have been to face the direct evidence of more of the appellant's clients. Related to the failure to object is the manner in which the appellant's trial counsel cross-examined Maraj, effectively accepting and joining issue with the manner in which Maraj's evidence had been led. The appellant's trial counsel was content to allow Maraj to testify as to her belief and then to challenge that belief on cross-examination.
[27] The lack of objection, the way Maraj was cross-examined and the use of Maraj's evidence during closing submissions suggests that Maraj's evidence was not impermissible opinion evidence prejudicial to the position of the appellant: R. v. Daley, 2007 SCC 53, [2007] 3 S.C.R. 53, at para. 58; R. v. Potts, 2018 ONCA 294, at paras. 17, 55.
[28] The third and related reason that leads me to reject this argument is how Maraj's evidence relates to the substance of the defence advanced by the appellant. The appellant did not seriously challenge the contention that his clients had made false charitable donations. His defence was that he believed that the donations were valid and that he had relied on Eto to verify the donations before authorizing charitable receipts. Maraj's evidence went to the actus reus of the fraud – whether false claims were made and in what amount. The appellant's defence was that he did not know that the claims were false and that he lacked the mens rea to commit fraud.
[29] Indeed, defence counsel's closing address demonstrates that the appellant may well have wanted Maraj's evidence admitted. He relied upon this evidence to advance the proposition that he was an unwitting dupe in a fraudulent scheme. As defence counsel submitted in her closing submissions, if he had known about the fraud, he would have taken some steps to cover his tracks. According to counsel, the "obvious" nature of the fraud demonstrated that the appellant did not know he was unwittingly involved in a fraudulent scheme:
And David Ajise, this really smart guy, this mastermind behind this scheme risks all of the things I've just mentioned to you, to engage in a fraudulent scheme and then he makes sure to make it as obvious as possible. Let's just make it as obvious as possible and leave a clear paper trail leading to me.
You've heard the evidence … when he's submitting these – these tax returns on behalf of clients, he's using his own Efile in each of the years, to ensure that the Canada Revenue Agency can trace back each of these returns to him. Let – let's engage in a fraudulent scheme, let's plan it, let's intend it, but then make it as obvious as possible, so the CRA can trace it all back to me.
If this was not a legitimate scheme, I put to you again that Mr. Ajise would have warned people or signaled to people that this was not legitimate … there's other ways of filing. … Why make it so obvious? It just doesn't make any sense.
Why send these spreadsheets to Mr. Eto Eto …? Well the point of the spreadsheets is because Mr. David Ajise genuinely believed that Mr. Eto was following on the donations.
[30] The nature of the appellant's defence distinguishes this case from the cases relied upon by the appellant; R. v. Sekhon, 2014 SCC 15, [2014] 1 S.C.R. 272 and R. v. Lewis, 2012 ONCA 388, 284 C.C.C. (3d) 423. Sekhon was a drug importation case. The accused denied knowledge that the truck he was driving had a concealed compartment containing cocaine. The Supreme Court held that the trial judge erred by admitting the evidence of a police officer, who had been qualified as an expert, that he had never encountered a blind courier. The Court held that this was purely anecdotal evidence that lacked relevance and probative value and that did not qualify as expert evidence. Lewis was also a drug importation case where the accused denied knowledge of the drugs. A Border Services Inspector who had not been qualified as an expert testified that short notice ticketing and cash payment were strong indicators of a drug courier. This court held that there was danger that the jury would clothe the Inspector's evidence with an aura of authority that it did not deserve. In both cases, the impugned evidence went to the heart of the accused's defence.
[31] Sekhon and Lewis both involved challenges to the evidence of inspectors and police officers testifying, in effect, that the accused is guilty and clothing that opinion with an aura of expertise. In both cases, the key issue was whether the accused knew that he was carrying drugs and in both cases, the impugned evidence denied the validity of that defence. Maraj's evidence does not fall into that forbidden category. Her evidence was limited to the issue of whether false donation claims had been filed and, as I have found, she was entitled to give that evidence. She said nothing about the appellant's defence of lack of knowledge that the claims were false and the risk posed by the improper evidence in Sekhon and Lewis was not present in this case.
[32] Finally, I note that in her dissenting reasons, my colleague Pardu J.A. places considerable emphasis on the suggestion that to succeed on this ground, the respondent must rely on the curative proviso but is precluded from doing so as that argument was not explicitly made in either oral or written submissions. I agree that no explicit reference was made to s. 686(1)(b)(iii) of the Criminal Code. However, even assuming that resort to the proviso is required in this case, it is my view that the substance of the proviso point was raised. In her submissions before this court, Crown counsel placed considerable reliance upon the argument that the defence effectively conceded at trial that the donation claims were fraudulent and instead relied entirely on the appellant's claim that he lacked knowledge of the fraud. On this basis, the Crown argued that even if the impugned evidence amounted to opinion evidence, it did not go to the only live issue at trial. The Crown also noted that Maraj's impugned statements comprised a small portion of the evidence advanced during a multi-day trial, and were admitted without objection by defence counsel. In my view, these lines of argument amounted in substance to a submission that even if there was an error in admitting the evidence or in failing to conduct a voir dire, no substantial wrong or miscarriage of justice had occurred and the appeal should be dismissed on that account. As the substance of that point was addressed and fully argued before this court, the failure to specifically reference s. 686(1)(b)(iii) should not be fatal.
[33] Accordingly, I would not give effect to this ground of appeal.
2. Instruction on Mens Rea
[34] The appellant takes issue with the trial judge's jury instruction on the mens rea required for fraud. The trial judge instructed the jury that if they were satisfied beyond a reasonable doubt that the government had suffered a deprivation caused by deceit, falsehood or other fraudulent means, they were to go to the next question:
[D]id [the appellant] intend to defraud the Government of Canada. This element relates to [the appellant's] state of mind at the time he deprived the Government of Canada or allegedly deprived the Government of Canada of tax revenue by deceit, falsehood or other fraudulent means.
To prove this essential element Crown counsel must satisfy you beyond a reasonable doubt that [the appellant] meant to say and/or to do those things that amount to deceit, falsehood or other fraudulent means and that he knew that saying and/or doing them to put at risk the economic (financial) interests of the Government of Canada. It does not matter whether [the appellant] thought that what they were saying and or doing was not dishonest or thought that neither the government nor or anyone else would suffer harm in the end as a result. [Emphasis Added.]
[35] The appellant takes issue with the italicized passage and argues that it effectively took away his defence of lack of knowledge that the charitable claims were false.
[36] After the charge was delivered, the jury asked a question stating that as the appellant "put so much trust in Mr. Eto" they would like to have the last fifteen minutes of the appellant's cross-examination played back. That request was granted. The portion of the cross-examination focused on how the fees were collected, recorded and divided with Eto and another individual, the due diligence required of a tax filer, and how the appellant had relied upon Eto to have donated goods appraised and proper receipts issued. The jury's question, according to the appellant, proved that they had been misled by the jury instructions as to the mens rea required for fraud.
[37] The Crown points out that the judge's instruction on state of mind tracks Watt's Manual of Criminal Jury Instructions, 2d ed. (Toronto: Thomson Reuters Canada Limited, 2015), and that the impugned passage is derived from the Supreme Court of Canada's decision in R. v. Théroux, [1993] 2 S.C.R. 5. The Crown further submits that when the instruction is read as a whole, it would have been clear to the jury that in order to convict the appellant, they had to be satisfied that he knew that the tax returns were false.
[38] Théroux, the source for the impugned passage, involved a developer who assured purchasers that their deposits were insured. This claim was false, the developer's company went bankrupt, residences were not built, and there was no insurance to protect the purchasers who lost their deposits. The appellant was charged with fraud. McLachlin J. posed the issue to be resolved as follows, at p. 14:
There is no doubt that the appellant deliberately practised a deceitful act, constituting the actus reus of the offence of fraud. The issue is whether the fact that he honestly believed that the projects would be completed negates the guilty mind or mens rea of the offence. This requires this Court to examine the question of what constitutes the mens rea for the offence of fraud.
[39] At p. 19, McLachlin J. applied to fraud the "traditional criminal law principle that the mental state necessary to the offence must be determined by reference to the external acts which constitute the actus of the offence…" This means that "the fact that the accused may have hoped the deprivation would not take place, or may have felt that there was nothing wrong with what he or she was doing, provides no defence". Once the actus reus is made out, Théroux holds that "it need only be determined that an accused knowingly undertook the acts in question, aware that deprivation, or risk of deprivation, could follow as a likely consequence": see pp. 19-20.
[40] The fact that the developer honestly believed at the time he made the representation that the houses would be built provided no defence. He had knowingly made a false statement to induce the buyers to enter contracts and provide their deposits and he therefore had the mens rea for fraud.
[41] I agree with the appellant to this extent: on the facts of this case, it was not strictly necessary to include the impugned passage. Neither the Crown nor the defence suggested that the appellant hoped for an outcome that would not result in loss to the government. The instruction would have been adequate without the impugned passage.
[42] However, for the following reasons, I do not agree that including this sentence deprived the appellant of his defence of mistaken belief.
[43] I am satisfied that when the instruction is read as a whole, it was made apparent to the jury that they had to be satisfied beyond a reasonable doubt that the appellant knew that he was submitting false charitable donation claims. The jury were instructed that the Crown had to prove beyond a reasonable doubt "that [the appellant] intended to defraud the government of Canada" and to acquit if the Crown failed to prove beyond a reasonable doubt that he "intended to deprive the Government of Canada of tax revenue". The judge fairly outlined the appellant's evidence that he believed that the donations were valid and the jury would have understood that any doubt on the point of the appellant's knowledge of the falsity of the donations had to result in acquittal. A R. v. W.(D.) caution was given and the jury were instructed:
[I]f you believe [the appellant's] evidence and accept it as true, that he did not intentionally defraud the Government of Canada, you must find him not guilty of the offence. Even if you do not believe his evidence, if it leaves you with a reasonable doubt about the crime as I've defined it, you must find him not guilty of the offence.
[44] I am not persuaded that the arguably unnecessary inclusion of the one sentence mandated by Théroux distorted or detracted from the essential point made clear by the balance of the instruction, namely, that the Crown had to prove beyond a reasonable doubt that the appellant knew that the charitable donation claims were false.
[45] Second, the draft charge was vetted with counsel. Mid-way through the instruction and during a break, the appellant's trial counsel expressed concern about the mens rea instruction, but did not object to the passage challenged on appeal. The trial judge considered her objection and agreed to add the following:
[T]he real issue to be determined is whether [the appellant] knowingly participated in the scheme, claiming for his clients' donations he knew were not made and profiting from the scheme by taking a share of ten to 15 percent of the monies collected.
[46] Counsel indicated that the addition satisfied her concerns on mens rea and made no further objection.
[47] Accordingly, I would not give effect to this ground of appeal.
3. Instruction on Prior Inconsistent Statements
[48] The appellant submits that the trial judge erred by failing to instruct the jury that if a witness adopted a prior inconsistent statement as true, the jury could use those prior inconsistent statements for their truth.
[49] In my view, there is no merit to this ground of appeal for the simple reason that neither of the two Crown witnesses identified by the appellant adopted their prior inconsistent statements as true. Monique Robinson, one of the appellant's former clients, had told investigators that goods were donated to Tractors, but testified at trial that she was mistaken as her husband had explained that the goods were given to a friend. Clive Williams, another former client of the appellant's, told the investigator that he had donated old furniture to Tractors and while attempt was made to have him adopt that statement on cross examination, he did not do so.
4. Sentence Appeal
[50] The trial judge gave detailed reasons for sentencing the appellant to 30 months in custody. He noted that the appellant has a family of three children, many positive references from his friends, church and community and that the appellant would face deportation without a right of appeal if sentenced to six months imprisonment or more. The appellant had a prior and dated conviction for fraud but had received a pardon for that offence. The trial judge reviewed the case law and determined that a sentence of 30 months custody was appropriate.
[51] The sole ground for the sentence appeal is that even if the conviction is upheld on the basis of the evidence of the appellant's clients, it is still open to this Court to find that the trial judge erred in relying on Maraj's evidence to conclude that the amount involved in the fraud was in the $1 million range. The sentence should therefore be reduced to 6 months less a day.
[52] It was only at the sentencing stage that the appellant raised any issue as to the fact that Maraj had not been qualified as an expert. The trial judge dismissed that objection, holding that it was not necessary to qualify her as an expert as she had simply "[re]ported on her findings and her evidence as to the total amounts in issue was not seriously challenged." The trial judge added that there was no need to call all of the appellant's clients who had claimed false donations, since "[a] sampling was sufficient to prove the fraud" and he was satisfied that it had a value of over $1 million.
[53] It is not necessary to repeat here what has already been said in relation to the conviction appeal as to the magnitude of this fraud. Simply put, I am satisfied that the trial judge did not err in finding that when the viva voce evidence of the appellant's clients is considered together with the documentary evidence, the Crown did prove fraud in the range of $1 million. Even if one were to reject the Crown's contention that all of the charitable donations claimed in returns filed by the appellant were false donations, the Crown established that the appellant submitted a very large volume of claims for charitable donations to Tractors on behalf of his clients and that the appellant had been paid 10 to 15% for each of those claimed donations.
[54] Further, the trial judge took into account the immigration consequences of the sentence he imposed and a term of imprisonment of more than 6 months was very much in line with the principles enunciated by this Court in R. v. Leo-Mensah, 2010 ONCA 139, 101 O.R. (3d) 366.
[55] I would grant leave to appeal the sentence but dismiss the sentence appeal.
Disposition
[56] For these reasons, I would dismiss the appeal from conviction, grant leave to appeal sentence but dismiss the sentence appeal.
Robert J. Sharpe J.A.
I agree Fairburn J.A.
Dissenting Opinion
Pardu J.A. (Dissenting):
[57] The appellant or his agent prepared and filed hundreds of tax returns in 2003, 2004 and 2005. The taxpayers claimed they had made charitable donations of $5,023,456 to Tractors for Daily Bread ("Tractors"). A Canada Customs and Revenue Agency ("C.C.R.A.") investigator, Seeta Maraj, who was trained as a general accountant, testified that in her opinion all of the donation claims were false, resulting in tax evaded of $1,413,166. There was no ruling, however, allowing her to give opinion evidence. She based her opinion that the charitable donations were false on two essential bases:
The Tractors charitable returns reported only nominal amounts of tax receipted gifts.
The donations claimed by the taxpayers were disproportionately large compared to their incomes.
[58] The differences between the returns filed by the appellant and those filed by Tractors do not in and of themselves lead to the inference that the appellant filed false returns. Either the appellant or Tractors or both could have filed false returns.
[59] The appellant's defence was that to his knowledge, the donation claims were valid, and that he did not know that charitable donations were not in fact made to Tractors, and did not know that the donation receipts issued by Tractors were false. There were some appraisals establishing the value of goods donated to Tractors.
[60] Maraj had no personal knowledge as to whether the taxpayers had really donated money or goods to Tractors. She began her evidence by explaining charts that organized data she had retrieved from the tax returns prepared by the appellant, Tractors donation records, bank records of the appellant, and computer records. I agree that this was factual information not requiring a voir dire. Partway through her examination in chief, however, rather than eliciting the factual information collected, the Crown began to ask leading questions as to the nature of the donations:
First of all I just want to be clear, the – the amounts of – in total false donations claimed, as well as the total tax evaded due to false donations that you just mentioned….those amounts can be found at Tab 7 and 8 of the trial book.
[61] This theme was repeated in many questions and answers that followed. In her examination in chief, Maraj went on to testify how she came to her opinion that the donations were false. She had interviewed several taxpayers who told her that they had not dealt with Tractors themselves. In cross examination, she explained that although there were some discrepancies between the donation amounts claimed and the amounts indicated on the spreadsheets she prepared as part of her investigation, the differences were not sufficiently large to give rise to concern. Maraj's estimation of the total donation amounts claimed was off by roughly $600,000 but Maraj testified she could still conclude that the charitable donation claims were false, particularly given that the donations claimed were large in relation to the taxpayers reported net income for 2004, for example.
[62] Crown counsel repeatedly invited the jury in her closing address to rely on Maraj's "findings" of false charitable donation claims (emphasis added). In his instructions to the jury, the trial judge referenced Maraj's "opinion" and "belief" (emphasis added) and reminded the jury that the evidence confirmed Maraj's "conclusions" (emphasis added) that the claims were false.
[63] The opinion evidence of non-expert witnesses, or lay opinion evidence, is generally inadmissible. In R. v. D. (D.), 2000 SCC 43, [2000] 2 S.C.R. 275, at para. 49, the Supreme Court of Canada summarized this long-standing exclusionary rule:
A basic tenet of our law is that the usual witness may not give opinion evidence, but testify only to facts within his knowledge, observation and experience. This is a commendable principle since it is the task of the fact finder, whether a jury or judge alone, to decide what secondary inferences are to be drawn from the facts proved.
[64] While the history of the lay opinion evidence rule has been fraught with ambiguities, in Alan W. Bryant, Sidney N. Lederman & Michelle K. Fuerst's, The Law of Evidence in Canada, 5th ed. (Toronto: LexisNexis, 2018), at p. 820, its receivability is described in these terms:
Courts now have greater freedom to receive lay witnesses' opinions if: (1) the witness has personal knowledge of the observed facts; (2) the witness is in a better position than the trier of fact to draw the inference; (3) the witness has the necessary experiential capacity to draw the inference, that is, form the opinion; and (4) the opinion is a compendious mode of speaking and the witness could not as accurately, adequately and with reasonable facility describe the facts she or he is testifying about. But as such evidence approaches the central issues that the courts must decide, one can still expect an insistence that the witnesses stick to the primary facts and refrain from giving their inferences. It is always a matter of degree. As the testimony shades towards a legal conclusion, resistance to admissibility develops. [Emphasis added.]
[65] Although the distinction between fact and opinion evidence may be tenuous, in R. v. Graat, [1982] 2 S.C.R. 819, at paras. 51-52, the Supreme Court suggests that non-expert opinion evidence is inadmissible unless: (1) by permitting the lay witness to testify in the form of an opinion, the witness is able more accurately to express the facts he or she perceived or (2) the facts from which a witness received an impression were too evanescent in their nature to be recollected or too complicated to be separately and distinctly narrated.
[66] The court stated, at para. 47, that "[e]xcept for the sake of convenience there is little, if any, virtue in any distinction resting on the tenuous, and frequently false, antithesis between fact and opinion. The line between 'fact' and 'opinion' is not clear."
[67] Academics have made the same observation, for example, as described by S. Casey Hill, David M. Tanovich and Louis P. Strezos in McWilliams' Canadian Criminal Evidence, 5th ed. (Toronto: Thomson Reuters, 2017), at p. 12-9:
Whatever the distinctions in justification for the admission of a compendious statement of fact and opinion where the facts are too subtle or complicated to be narrated separately and distinctly, the lay witness exception to the opinion evidence exclusionary rule requires the witness's personal or direct acquaintance with the particular subject-matter and therefore some assurance of competence in source of knowledge. As well, the witness must have incidentally drawn inferences from observed data necessarily expressible in only abbreviated or conclusory form as opposed to a narration of individual factual observations or perceptions.
[68] In Ganges Kangro Properties Ltd. v. Shepard, 2015 BCCA 522, 51 C.L.R. (4th) 1, at para. 76 the court makes clear that "the compendious statement of facts exception is limited to inferences drawn by non-expert witnesses who have personally observed the facts from which their inferences are drawn."
[69] In this case, Maraj (1) did not have personal knowledge of the observed facts – rather, she was asked to formulate her summary of the evidence in terms of her belief; (2) was in no better position than the jury to draw inferences from the evidence of the 12 taxpayers who testified combined with the raw data she collected; (3) had the experiential capacity to draw the inference – however, this is precisely what made the statement increasingly prejudicial; and (4) could have described the facts without testifying to the central question at issue. I am not persuaded that the jurors would inevitably have come to a conclusion of guilt absent her evidence.
[70] As pointed out by Strathy C.J.O. in Meady v. Greyhound Canada Transportation Corp., 2015 ONCA 6, 329 O.A.C. 173, at para. 37:
There has been growing recognition of the responsibility of the trial judge to exercise a more robust gatekeeper role in the admission of expert evidence – see: Lisa Dufraimont, "New Challenges for the Gatekeeper: The Evolving Law on Expert Evidence in Criminal Cases" (2012) 58 C.L.Q. 531; and Report of the Inquiry into Pediatric Forensic Pathology in Ontario (Toronto: Queen's Printer for Ontario, 2008), vol. 3, c. 18: "Role of the Court". This observation holds true for both civil and criminal contexts. Although much of the discussion has focused on increasing scrutiny of threshold reliability at the gatekeeper stage, it is equally important to ensure the evidence is genuinely necessary.
[71] Here, it is difficult to see how the opinion evidence was necessary, but for the Crown's failure to call anyone from Tractors. The appellant testified he did not know that charitable donations were not made, and the Crown did not call the director of Tractors with whom the appellant dealt. Proof that the charitable donations were not made was essential to the Crown's case.
[72] Maraj's opinion that the charitable donations claimed were false was expert evidence that required a voir dire to determine its admissibility.
[73] The trial judge erred in failing to conduct a voir dire to make this determination or else, in failing to exclude the evidence absent a ruling.
[74] I acknowledge that defence counsel failed to object to the admission of the evidence. On this record, however, I cannot conclude that defence counsel's failure to object amounted to recognition that the evidence would likely be admitted following a voir dire, was inadvertent, or tactical. If there was agreement, that should have been noted for the record. I also agree that by the end of the trial, defence counsel focused on the mental element of the offence, knowledge.
[75] As indicated earlier, I agree that the jury could have drawn inferences about fraud, in respect of the returns filed by the appellant on behalf of the taxpayers who testified, from the summarized raw data submitted, together with the evidence of those taxpayers, without Maraj's opinion evidence. However, I am not certain that they would have done so without the weight of the opinion evidence and the resulting affirmation that all 442 tax returns contained false charitable donation receipts.
[76] Had the trial judge admitted Maraj's evidence as opinion evidence, he would have instructed the jury as to the significance of factual assumptions underlying her opinion, notably, the assumption that Tractors' returns were correct. The jury was concerned about this issue, and asked a question about the trust the appellant placed in Tractors.
[77] The majority relies upon the absence of any substantial wrong or miscarriage of justice to dismiss the appeal, in the event the judge erred in admitting this evidence.
[78] I would not apply the proviso for two reasons.
[79] The Crown did not invoke the proviso in either its factum or in oral argument. The proviso is embodied in s. 686 (1) (a) (ii) and s. 686 (1) (b) (iii) of the Criminal Code, R.S.C., 1985, c. C-46 for errors of law. Even if a trial judge has made a wrong decision on a question of law, the court may dismiss an appeal if "it is of the opinion that no substantial wrong or miscarriage of justice has occurred."
[80] This court has held that it should not invoke the proviso on its own motion: R. v. P.G., 2017 ONCA 351, 138 O.R. (3d) 343, at paras. 13-15. The Crown's oral and written argument on appeal was that Maraj's opinions amounted to factual evidence for which a voir dire was not required, and that no error was committed by the trial judge in admitting this evidence without a voir dire. I would not infer from this argument that the Crown's position was also that even if there was an error, no substantial wrong or miscarriage of justice resulted, particularly since the Crown did not address an essential element of the test for application of the proviso, whether the jury verdict would have necessarily been the same, absent the legal error: R. v. Mahoney, [1982] 1 S.C.R. 834, at para. 17.
[81] Secondly, I am not satisfied that the verdict would have necessarily been the same, but for the error in admitting the opinion evidence. This test is applied strictly, as noted in Mahoney, at para. 18: "[i]t is abundantly clear, in my view, that the discretion involved in its application is narrowly limited by statute to cases where the court of appeal has found an error or errors of law at trial, and its exercise depends upon the application of the strict legal test affirmed in the authorities and firmly imbedded in the law."
[82] The rigor of the test for application of the proviso was highlighted by Epstein J.A. in R. v. Brown, 2018 ONCA 481, at paras. 75-76 as follows:
First, use of the curative proviso is appropriate where the error at first instance is "harmless or trivial": Sekhon, at para. 53. The overriding question guiding this inquiry is whether the error "on its face or in its effect was so minor, so irrelevant to the ultimate issue in the trial, or so clearly non-prejudicial, that any reasonable judge or jury could not possibly have rendered a different verdict if the error had not been made": R. v. Van, 2009 SCC 22, [2009] S.C.R. 22, at para. 35. When a case involves multiple errors at first instance, the cumulative impact of those errors can be relevant to determining whether the "harmless or trivial" test is satisfied: R. v. Bomberry, 2010 ONCA 542, 258 C.C.C. (3d) 117, at para. 79; R. v. Hill, 2015 ONCA 616, 23 C.R. (7th) 224, at para. 102.
The curative proviso may also be applied in cases involving more serious errors, where the evidence is "so overwhelming" that a reasonable and properly instructed jury would inevitably convict: Sekhon, at para. 53; Van, at para. 36. This inquiry does not turn on the gravity of the trial judge's errors, but on the strength of the Crown's case. "Overwhelming evidence" has been described as a high standard, and "substantially higher than the requirement that the Crown prove its case 'beyond a reasonable doubt' at trial": R. v. Trochym, 2007 SCC 6, [2007] 1 S.C.R. 239, at para. 82. These onerous thresholds flow from the difficulties appellate courts inevitably face in "evaluating the strength of the Crown's case retroactively, without the benefit of hearing the witnesses' testimony and experiencing the trial as it unfolded": Van, at para. 36. Accordingly, any measure of doubt concerning the strength of the Crown's case should enure to the benefit of the appellant.
[83] The consequences of a criminal conviction may be catastrophic. Where there is legal error, unless the court is satisfied that the verdict would necessarily have been the same, the proviso cannot be applied to uphold the conviction.
[84] Here, I am not convinced that the jury would have rendered the same verdict, absent the opinion evidence of Maraj. The appellant's credibility in the eyes of the jury may have suffered when weighed against that of an apparent expert. It is arguable that the evidence was not necessary and would not have met the test for admissibility of expert opinion evidence.
[85] I would accordingly allow the appeal and direct a new trial. I need not address the other arguments advanced on appeal.
Released: May 30, 2018
G. Pardu J.A.
