Court of Appeal for Ontario

Date: 2020-05-19 Docket: C66523

Before: Hoy A.C.J.O., Nordheimer and Harvison Young JJ.A.

Between: Her Majesty the Queen, Appellant and Jean-Paul Leclair, Respondent

Counsel: David Friesen, for the appellant Howard L. Krongold, for the respondent

Heard: March 12, 2020

On appeal from the acquittal entered by Justice Hugh R. McLean of the Superior Court of Justice, dated January 17, 2019.

Reasons for Decision

[1] The respondent was acquitted of three counts of fraud over $5000. The Crown appeals his acquittal in relation to the first count, which involved the construction of an arena in Edmonton. It argues that the trial judge erred in law in his approach to the mens rea for fraud.

[2] The respondent was hired by Hendrix Hotel and Restaurant Equipment Supplies Ltd. (“Hendrix”) to build and install refrigeration units for the arena. He submitted an initial invoice for what the trial judge characterized as a deposit. He admitted he subsequently lied to Hendrix about his progress and then submitted further invoices, although his evidence was that the last two invoices were submitted in error. His business was facing cash flow problems and he used amounts paid by Hendrix to fund other projects. He was hoping that one of these projects would generate the funds necessary for him to stay on schedule for the arena job, but it did not. The trial judge found that the Crown had not satisfied the mens rea requirement because the respondent “felt that he could get himself out of this situation”.

[3] R. v. Théroux, [1993] 2 S.C.R. 5, makes clear, at p. 20, that the mens rea of fraud is established by proof of:

1. subjective knowledge of the prohibited act, be it an act of deceit, a falsehood or some other fraudulent means; and
2. subjective knowledge that the prohibited act could have, as a consequence, the deprivation of another (which deprivation may consist in knowledge that the victim’s pecuniary interests are put at risk).

[4] As McLachlin J. wrote, at pp. 23-24, a person cannot escape criminal responsibility “because of a sanguine belief that all will come out right in the end. Many frauds are perpetrated by people…who sincerely believe that their act of placing other people’s property at risk will not ultimately result in actual loss to those persons.”

[5] The respondent properly concedes that the trial judge erred in law in his approach to the mens rea for fraud. However, the respondent argues that the Crown seeks to overturn the acquittal based on a different theory of guilt than what he says is the narrow basis it chose to advance at trial.

[6] As the respondent argues, the Crown is barred from securing a new trial based on a new theory of liability out of concerns over fairness to the accused and the principle against double jeopardy enshrined in s. 11(h) of the Canadian Charter of Rights and Freedoms: R. v. Barton, 2019 SCC 33, 435 D.L.R. (4th) 191, at para. 47. But we are not persuaded that the Crown seeks to advance a different theory of guilt.

[7] A review of the submissions as a whole indicates that both counsel tried to convey the correct approach to the mens rea for fraud, but had great difficulty in doing so because of the manner in which the trial judge was directing the discussion. The exchange between the trial judge and the Crown at the end of the submissions suggests that the Crown invited the trial judge to acquit if he had a reasonable doubt that the respondent knew that he could not complete the Hendrix contract on schedule. We do not think that this is a fair reading of the Crown’s submissions as a whole given her attempts throughout her submissions to articulate the correct approach. We are satisfied that the Crown endeavoured to convey the correct approach to the mens rea for fraud to the trial judge, including that being “hopeful” that he could follow through on the project would not permit the respondent to evade criminal liability, and that subjective knowledge of a risk of deprivation is sufficient.

[8] To set aside an acquittal, the burden is on the Crown to satisfy the court to a reasonable degree of certainty that, but for the trial judge’s error, the verdict would not necessarily have been the same: R. v. Graveline, 2006 SCC 16, [2016] 1 S.C.R. 609, at paras. 14-16; R. v. Button, 2019 ONCA 1024, at paras. 15-16. On these facts, we are satisfied to a reasonable degree of certainty that, had the trial judge not erred in his approach to the mens rea, he would not necessarily have acquitted.

[9] While the Crown submits that this court should enter a conviction, we decline to do so because we are not persuaded that the factual findings of the trial judge support a conviction beyond a reasonable doubt: R. v. Katigbak, 2011 SCC 48, [2011] 3 S.C.R. 326, at paras. 50-52; R. v. McRae, 2013 SCC 68, [2013] 3 S.C.R. 931, at para. 39. The power to substitute an acquittal for a conviction should only be used in the clearest of cases, and here, the trial judge made no clear factual findings about the respondent’s subjective knowledge of the risk of deprivation.

[10] Accordingly, the appeal is allowed, and a new trial on the first count is ordered.

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

"I.V.B. Nordheimer J.A."

"Harvison Young J.A."