COURT OF APPEAL FOR ONTARIO

DATE: 20210722 DOCKET: C68420

Strathy C.J.O., Feldman and Sossin JJ.A.

BETWEEN

Her Majesty the Queen Respondent

and

Carlos Pavao Appellant

Counsel: Jeff Carolin and Nicolas M. Rouleau, for the appellant Matthew Asma, for the respondent

Heard: May 18, 2021 by video conference

On appeal from the convictions entered by Justice Anne M. Molloy of the Superior Court of Justice on April 30, 2018, with reasons reported at 2018 ONSC 2506, and the sentence imposed on August 22, 2018, with reasons reported at 2018 ONSC 4889, [2018] O.J. No. 4361.

Sossin J.A.:

Overview

[1] On April 24, 2012, the appellant was arrested and charged in relation to alleged frauds involving the sale of shares in two gold mining companies. The companies were real, but the shares were not. The appellant was accused of defrauding ten unsophisticated investors and the public out of a combined $1.1 million, contrary to s. 380(1)(a) of the Criminal Code, R.S.C. 1985, c. C-46. He was also accused of knowingly using a forged document, contrary to s. 368 of the Criminal Code.

[2] On April 30, 2018, the trial judge convicted the appellant of ten counts of fraud over $5,000, one for each of the ten complainant investors, and one count of defrauding the public over $5,000. The appellant was acquitted of the forgery charge.

[3] On August 22, 2018, the appellant was sentenced to five years’ imprisonment and ordered to pay restitution in the amount of $1,100,799, with a fine in lieu of forfeiture in the same amount.

[4] The appellant now appeals his convictions and sentence. He argues that his fraud convictions were based on misapprehensions of the evidence by the trial judge, leading to unreasonable verdicts and a miscarriage of justice. The appellant also contends that the delay in bringing him to trial violated his rights under s. 11(b) of the Canadian Charter of Rights and Freedoms.

[5] On sentence, the appellant submits that the trial judge erred in ordering restitution and a fine in lieu of forfeiture in respect of investor Jeff Fallon and his daughter, Nicole, who were not complainants in the case against him. The Crown concedes this alleged sentencing error.

[6] For reasons that follow, I would dismiss the conviction appeal, accept the Crown's concession on sentence, and allow the sentence appeal.

Material Facts & Procedural History

(1) Background

[7] The appellant emigrated to Canada from Portugal in the late 1960s. By 2005, he was a successful businessman in control of several companies.

[8] The appellant first met Sam Lawrence in 2001, and soon hired him to work for one of his businesses. Mr. Lawrence shared his interest in stock trading with the appellant, who at the time had little experience in the stock market. Mr. Lawrence was an avid investor and purported to have experience with mining stocks.

[9] 6048382 Canada Inc. (“604”) was incorporated in December 2002. The appellant was the president of 604 and had sole signing authority.

[10] Through 604, the appellant, along with a small group of like-minded investors, began to rely on Mr. Lawrence’s investment research and knowledge to make stock trades unrelated to this case, particularly in shares of mining companies.

(2) The alleged frauds and the indictment

[11] The events giving rise to the appellant’s charges began in 2005, after the appellant purported to sell shares in two mining companies, Africo Resources Ltd. (“Africo”) and Rubicon Minerals Corporation (“Rubicon”), to ten complainant investors. Africo was initially a private company owned and operated by Rubicon. However, as of 2006, Africo went public and was no longer affiliated with Rubicon.

[12] The appellant used 604 to contract with the complainants for the purchase of the impugned Africo and Rubicon shares. The complainants all believed they were purchasing shares offered through “private placements”, meaning sales of stocks to pre-selected investors rather than on the open market. However, neither the appellant, Mr. Lawrence, nor 604 owned the shares that were purportedly sold to the complainants. All the money invested by the complainants, around $1.1 million, was lost.

[13] The appellant was charged on April 24, 2012 in a twelve-count indictment. I will briefly summarize the allegations made against the appellant under each count.

The Africo counts

[14] Count 1 (relating to Africo) and count 2 alleged that the appellant defrauded Anthony Vella and Brian Kirkwood, respectively, in relation to purchases of Africo shares between 2005 and 2006.

[15] Mr. Vella contracted with the appellant, acting on behalf of 604, to buy nearly 154,000 Africo shares for a total of $275,000 through three separate “subscription agreements”, executed on September 30, 2005 for $100,000; June 28, 2006 for $75,000; and October 20, 2006 for $100,000.

[16] Mr. Vella claimed that the appellant told him he was buying shares of Africo that the appellant already owned, having purchased them through a private placement at a preferred rate. According to Mr. Vella, he believed the appellant would hold the shares in trust for him.

[17] Similarly, Mr. Kirkwood contracted with the appellant, through 604, to buy around 80,000 Africo shares for a total of $140,000 through three “subscription agreements”, executed on January 31, 2006 for $40,000; February 7, 2006 for $30,000; and August 15, 2006 for $70,000.

[18] Mr. Kirkwood stated that he believed the appellant would buy Africo shares on his behalf. The appellant allegedly confirmed that Mr. Kirkwood’s shares were to be held by 604 for safekeeping.

[19] Like Mr. Vella, Mr. Kirkwood claimed the appellant told him that the shares he purportedly bought were acquired through a private placement. Both Mr. Vella and Mr. Kirkwood gave the appellant cheques for these transactions, payable to 604, which were deposited into 604’s bank account, on which the appellant was the sole signatory.

[20] The shares Mr. Vella and Mr. Kirkwood believed they were buying did not exist. They each lost their entire investment.

The Rubicon counts

[21] Count 1 (relating to Rubicon) and counts 3 through 10 alleged that the appellant defrauded nine complainants, including Mr. Vella (for a second time) and eight others, in relation to sales of Rubicon shares supposedly acquired by 604 through a purported $1.5 million private placement in 2007.

[22] Through 604, the appellant contracted with the complainants to sell Rubicon shares for a combined purchase price of around $685,000. In fact, the appellant was alleged to have acquired just $100,000 worth of Rubicon shares and warrants to acquire further shares worth about the same amount, all of which were in his own name and ultimately transferred into his personal account. 604 thus held no Rubicon shares whatsoever when the purported sales to the complainants were executed. Once again, the complainants lost all their money.

The public fraud count

[23] Under count 11, the appellant was further alleged to have defrauded the public by encouraging some of the complainants to spread the word and bring in friends and relatives as additional investors in the non-existent Rubicon shares.

The forgery count

[24] Finally, under count 12, the appellant was charged with knowingly using a forged email, allegedly in order to convince the complainants that he had in fact acquired the Rubicon shares which he purported to be re-selling to them.

(3) The pre-trial applications

[25] On February 25, 2016, the appellant filed an application under s. 11(b) of the Charter to stay the prosecution against him due to unreasonable delay (the “s. 11(b) application”). However, due to extenuating circumstances, the s. 11(b) application was not heard until October 27, 2017.

[26] In the meantime, the appellant also brought an application to adduce evidence of a third-party suspect, Mr. Lawrence (the “third-party suspect application”). On November 21, 2017, the third-party suspect application was dismissed.

[27] On November 27, 2017, the application judge released his decision on the s. 11(b) application: 2017 ONSC 6873. He declined to grant a stay under s. 11(b) based on two exceptional circumstances: the complex case exception and, in the alternative, the transitional exception contemplated in R. v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631.

Proceedings at Trial and Sentencing

(1) The Trial

[28] The appellant’s trial by judge alone commenced on January 29, 2018. Evidence and submissions were completed on February 13, 2018.

[29] The trial judge found that the ten complainant investors were “clearly defrauded”. Indeed, they believed they were buying shares that did not exist.

[30] Therefore, according to the trial judge, the only “real issue” was whether the appellant knew that the shares purportedly sold to the complainants did not exist. The appellant testified that he did not. The trial judge stated that if she believed that testimony, or if it caused her to have a reasonable doubt, she “would have found [the appellant] to be not guilty of all counts against him.”

[31] A primary defence theory at trial was that the appellant honestly believed his representations to the complainants, namely, that he was selling them real Africo and Rubicon shares held by 604.

[32] In support of this theory, the appellant testified that Mr. Lawrence, 604’s sole trader, had fed him misinformation and lies. His evidence was that Mr. Lawrence had duped him, along with everyone else. The appellant’s core narrative was that Mr. Lawrence surreptitiously misappropriated the complainants’ money before losing it all through bad trades.

The trial judge’s key findings regarding the appellant’s evidence

[33] The trial judge rejected this theory, based in part on her disbelief of the appellant’s evidence. She outlined three overarching concerns with his testimony.

[34] First, the trial judge rejected certain aspects of the appellant’s evidence as “completely untrue”. For example, with respect to the appellant’s claim that Mr. Lawrence had forged his name on some documents used in the impugned transactions, the trial judge stated as follows, at para. 34 of her reasons:

[The appellant] was the sole signatory on the 604 bank account …. The bank records for that account included a number of deposit slips which were executed at the branch, many of which included substantial sums of cash being paid to the customer. [The appellant] testified that his signature had been forged on many of these documents. He claimed never to have noticed this, or any other unusual transactions in his account during that period of time. He acknowledged that the bank personnel were very familiar with him, and also very familiar with Sam Lawrence, and that the two of them did not look remotely alike. There was no possibility that the bank staff would have mistaken Sam Lawrence for [the appellant]. Nevertheless, [the appellant] maintained that the bank staff had permitted Mr. Lawrence to forge his signature and, based on that forged signature, transferred funds between accounts and handed over to Sam Lawrence substantial amounts of cash, sometimes in the several thousands of dollars, all without even checking with [the appellant]. I do not believe that. It defies common sense. It is not plausible.

[35] Second, with respect to other key evidence, the trial judge concluded that the appellant had contradicted himself in several respects, which she found undermined his credibility.

[36] Third, the trial judge found some of the appellant’s other evidence unreliable in light of conflicting evidence elsewhere in the record. On this point, she concluded as follows, at para. 49:

In many instances, [the appellant’s] testimony is directly contradicted by other witnesses. I am not required to assess the credibility of the defence evidence in a vacuum. In some instances, there was overwhelmingly strong evidence on a point that contradicted [the appellant’s] evidence. In those circumstances, I am entitled to make adverse findings of credibility against [the appellant].

[37] The trial judge gave detailed reasons for her view that the appellant’s evidence was neither credible nor reliable, concluding as follows, at paras. 64-66:

I do not find the evidence of [the appellant] to be either credible or reliable. Since I do not believe his version of what happened, I must proceed to the next step of the W.D. analysis and determine whether the defence evidence causes me to have a reasonable doubt.

There can be situations in which the trier of fact might not actually believe the accused’s version of the facts, but still consider that evidence to have raised a reasonable doubt as to his guilt.

This is not such a case. [The appellant] is simply not believable. He told many untruths and his entire story, as well as many of the details within the story, are simply implausible. There is nothing about the defence evidence that raises a reasonable doubt.

[38] Having explained her assessment of the appellant’s credibility and reliability, the trial judge then examined the evidence “as a whole” with respect to the frauds alleged in counts 1 to 11.

Findings on the Africo counts

[39] William Cavalluzzo, corporate director of both Africo and Rubicon, gave evidence at trial. Mr. Cavalluzzo testified that he approached the appellant and Mr. Lawrence in 2004 to invite them to participate in a private placement of Africo shares. The trial judge found that the appellant and Mr. Lawrence invested $500,000 through 604, “in exchange for 614,401 common shares” of Africo.

[40] At paras. 17-18, the trial judge summarized Mr. Cavalluzzo’s evidence regarding the relevant events that followed:

In 2005, Africo sought to raise an additional $5.3 million through a private placement. Again Mr. Cavalluzzo offered participation to 604, but this time the offer was declined by 604. Mr. Cavalluzzo also testified that 604 did not participate in a third private placement by Africo in 2006.

Africo went public in 2006. In December 2006, 604 transferred its Africo shares into its trading account at Blackmont Capital. From there, the shares were divided between Mr. Lawrence and [the appellant], with [the appellant] receiving 250,000 shares, and Mr. Lawrence the remaining 364,401 shares. [The appellant] signed the Direction to Blackmont as to the allocation of those shares, as did Mr. Lawrence. [Emphasis added.]

[41] This sequence of events led the trial judge to reject the appellant’s claim that he honestly believed the funds advanced by Mr. Vella and Mr. Kirkwood were transferred to the 604 account to buy actual Africo shares. Specifically, she concluded as follows, at paras. 92-94:

It was [the appellant] who approached both [Mr. Vella and Mr. Kirkwood] and persuaded them to invest. When they wanted to see their shares certificate, or to sell their shares, it was [the appellant] who persuaded them to be patient and to wait … Neither of them ever met Sam Lawrence.

Notwithstanding the request of both of these complainants for their shares, [the appellant] and Mr. Lawrence took all of the 604 shares in Africo and divided them up between themselves. It is clear that [the appellant] did so knowingly and that he did so at a time when other investors who were depending on him did not get the shares for which they had paid.

I am satisfied beyond a reasonable doubt that [the appellant] was dishonest in his dealings with Mr. Kirkwood and Mr. Vella. As a result of false representations by [the appellant], both Mr. Kirkwood and Mr. Vella were deprived of their entire investment. Based on the whole of the evidence, I am satisfied beyond a reasonable doubt that [the appellant] knew this to be the case. [Emphasis added.]

[42] Accordingly, the trial judge convicted the appellant on count 1 (relating to Africo) and count 2.

Findings on the Rubicon counts

[43] The key issue with respect to the Rubicon counts was the state of the appellant’s knowledge regarding a purported $1.5 million private placement of Rubicon shares. The appellant testified that Mr. Lawrence told him he had personally secured the $1.5 million in Rubicon shares and that these were the shares the appellant believed were being sold to the various complainant investors through 604.

[44] Other witnesses and documentary evidence indicated that the appellant had been offered only $100,000 in Rubicon shares through a 2007 private placement, as well as warrants to buy more shares in the future, which he ultimately exercised in 2009 for around $107,000. The trial judge found that the appellant had taken advantage of the Rubicon private placement and transferred all the Rubicon shares he acquired into his personal trading account. The appellant denied knowing how the Rubicon shares ended up in his personal account, rather than going to 604.

[45] After reviewing the evidence of each complainant involved in the alleged Rubicon frauds, the trial judge rejected the appellant’s evidence on this issue, stating as follows, at paras. 194 and 200:

It is clear on the evidence that there was no opportunity for [the appellant], Mr. Lawrence, or 604 to obtain $1.5 million in shares of Rubicon ... I find on the whole of the evidence that the opportunity to invest in the Rubicon private placement in March 2007 belonged to the collective investments of 604 rather than to [the appellant] personally. However, [the appellant] seized this opportunity to keep all the shares for himself … I find that it was [the appellant] who engineered this feat.

I am satisfied beyond a reasonable doubt that [the appellant] knew the $1.5 million in shares did not exist. If he had not acquired that actual knowledge, it can only be because he deliberately chose not to confirm this with Mr. Lawrence. He was certainly fixed with sufficient knowledge to alert him that these shares could not exist, as there was no possible way to acquire them. Knowing that there were no real shares, he deliberately encouraged potential investors to turn over thousands of dollars for investment.

[46] Based on the “whole of the evidence”, the trial judge thus concluded that the Crown had established the appellant’s guilt on the Rubicon counts beyond a reasonable doubt.

Findings on the public fraud count

[47] Finally, on count 11, the trial judge found that the appellant had defrauded the public, namely, by putting out “the word to people to bring in any investors who might be interested in participating in the Rubicon private placement”.

[48] This conclusion was based on the trial judge’s findings regarding the appellant’s dealings with Jeff Fallon. Mr. Fallon was one of the small group of investors who purchased stocks in mining companies through 604 and Mr. Lawrence. However, the trial judge confirmed that Mr. Fallon was “not a named complainant in any of the counts before this Court”.

[49] To support convicting the appellant for defrauding the public, the trial judge summarized her relevant findings relating to Mr. Fallon as follows, at para. 206 and 211:

Jeff Fallon testified that [the appellant] told him that if he knew of anyone else who might be interested in investing [in Rubicon], to let him know. As a direct result of that invitation, Mr. Fallon referred three other people to [the appellant] … all of whom purchased [Rubicon] shares. Mr. Fallon also brought his daughter Nicole into the deal, although he executed all of the documents on her behalf.

I am satisfied beyond a reasonable doubt that this conversation occurred. When issuing that invitation [the appellant] knew there were no shares available and any money invested would be seriously at risk of being lost. For the same reasons as I have indicated with respect to the charges involving specific complainants, this constitutes fraud. Accordingly, I find [the appellant] guilty on Count 11.

(2) Sentencing

[50] On August 22, 2018, the trial judge imposed on the appellant a five-year custodial sentence and an order to pay restitution of $1,100,799, with a concurrent fine in lieu of forfeiture in the same amount.

[51] Notably, in Schedule “A” to the trial judge’s reasons for sentence, which contained a chart breaking down the amounts owing to each individual complainant pursuant to the restitution and fine orders, the trial judge included $45,000 in respect of “Jeff Fallon & Nicole Fallon”.

Issues on Appeal

[52] On conviction, the appellant advances two overarching grounds of appeal:

1. The trial judge materially misapprehended the evidence, resulting in unreasonable verdicts on all counts. Specifically, the trial judge misapprehended the evidence regarding (a) the amount of Africo shares held by 604 at the relevant times, and (b) the appellant’s involvement with the Rubicon shares. Cumulatively, these misapprehensions of evidence resulted in a miscarriage of justice.

2. The application judge erred by refusing to stay the appellant’s charges pursuant to s. 11(b) of the Charter. The delay in this case exceeded the presumptive Jordan ceiling, and neither exceptional circumstance applied by the application judge was available because (a) this case was not complex, and (b) properly attributed, the total Crown and institutional delay exceeded the transitional exception threshold.

[53] On sentence, the appellant contends that the trial judge erred in law by ordering restitution and a fine in lieu of forfeiture in respect of “Jeff Fallon & Nicole Fallon”, who were not named as complainants in the indictment. As indicated, the Crown agrees with the appellant’s submission on sentence.

[54] I address each ground of appeal, in turn, below.

Analysis

A. The Conviction Appeal

(1) Did the Trial Judge Misapprehend the Evidence?

[55] This prosecution turned on what the appellant knew regarding the Africo and Rubicon shares. The trial judge accepted that the appellant knew his dealings with the shares in question would deprive the complainant investors of their money.

[56] The appellant contends that in drawing this conclusion, the trial judge erred by (a) failing to adequately resolve material contradictions in the Crown’s evidence on the purchase of the Africo shares, and (b) relying on various unsupported inferences in relation to the Rubicon shares.

[57] As I will explain below, I would not give effect to either submission.

[58] To begin, however, it is helpful to briefly review the governing principles in cases where a trial judge is alleged to have misapprehended evidence.

The governing principles

[59] In R. v. Vant, 2015 ONCA 481, 324 C.C.C. (3d) 109, Watt J.A. summarized, at paras. 108-109, the well-established principles applicable when assessing an alleged misapprehension of evidence:

A misapprehension of evidence includes a failure to consider relevant evidence, a mistake about the substance of evidence and a failure to give proper effect to evidence … Not every misapprehension of evidence will vitiate a finding of guilt. The nature and extent of the alleged misapprehension and its significance to the verdict rendered requires consideration in light of the fundamental principle that a verdict be based exclusively on the evidence adduced at trial.

When an appellant alleges a misapprehension of evidence, our first task is to consider the reasonableness of the verdict. An appellant who establishes an unreasonable verdict is entitled to an acquittal. Absent an unreasonable verdict, our task is to decide whether the misapprehension of evidence occasioned a miscarriage of justice. An appellant who shows that a misapprehension of evidence resulted in a miscarriage of justice is usually entitled to have his or her conviction quashed and a new trial ordered. If an appellant fails to demonstrate that any misapprehension resulted in an unreasonable verdict or produced a miscarriage of justice, he or she is then left to persuade the appellate court that the misapprehension amounted to an error of law. If the court is convinced of such an error, the Crown then bears the burden of showing that there was no miscarriage of justice under s. 686(1)(b)(iii). [Citations omitted.]

[60] In cases where credibility is a key issue, the impact of a misapprehension of evidence will be particularly acute. In such cases, “it is essential that the findings be based on a correct version of the actual evidence”, as “[w]rong findings on what the evidence is destroy the basis of findings of credibility”: R. v. Morrissey (1995), 22 O.R. (3d) 514, at p. 541, citing Whitehouse v. Reimer (1980), 1980 ABCA 214, 116 D.L.R. (3d) 594 (Alta. C.A.), at p. 595.

[61] Absent a misapprehension of evidence, it is ultimately for the trier of fact to determine what inferences are to be drawn from the evidence as a whole and whether the cumulative effect of those inferences satisfies the standard of proof required in a criminal case: R. v. Tsekouras, 2017 ONCA 290, 353 C.C.C. (3d) 349, at para. 229. As such, appellate courts may not interfere with findings of fact made and the factual inferences drawn by a trial judge unless those findings and inferences are (i) clearly wrong, (ii) unsupported by the evidence, or (iii) otherwise unreasonable: Tsekouras, at para. 230.

(a) The alleged misapprehensions on the Africo counts

[62] With respect to the Africo frauds, the appellant argues that the trial judge misapprehended the evidence relating to the purchase of Africo shares by 604, rendering the verdicts related to those shares unreasonable.

[63] Specifically, the trial judge found that 604 purchased “614,401” Africo shares for $500,000, at “$1.75 per share”, through a private placement in 2004, at the invitation of Mr. Cavalluzzo (emphasis added).

[64] The appellant says the trial judge was mistaken. According to the appellant, 604 did invest $500,000 in Africo in 2004, but at $0.75 per share for a total of 666,667 shares. The appellant says the trial judge thus misapprehended how many shares 604 purchased in 2004 and the unit price of those shares.

[65] Further, whatever the unit price and lot size was, the appellant points out that there was uncontested evidence before the trial judge that 604 owned 400,000 shares of Africo as of March 2005. The trial judge’s key misapprehension on the Africo counts, according to the appellant, was in failing to consider documentation before her from December 2006 which he argues shows that 604 had invested another $503,808.82 to acquire an additional 614,401 Africo shares, at $0.82 per share.

[66] The appellant accepts that the entire group of Africo shares documented in December 2006 was transferred into 604’s trading account and then divided between Mr. Lawrence and the appellant’s personal trading accounts.

[67] However, since the appellant urges that 604 made two large purchases of Africo shares, he contends it was “likely” that 604 still held the initial 400,000 Africo shares it held as of March 2005 when the impugned transactions between 604 and the complainants occurred. Since the remaining shares would have been more than enough to cover what 604 owed to Mr. Vella and Mr. Kirkwood, the appellant says there was a “reasonable possibility” that he either engaged in bona fide transactions with respect to those shares, or believed that his representations to the complainants about the shares were bona fide. As such, he argues that the trial judge’s misapprehensions of the evidence on this issue rendered her verdicts on the Africo counts unreasonable.

[68] The Crown acknowledges that the evidence was ambiguous regarding the details of the Africo shares. The ambiguity arose from Mr. Cavalluzzo’s testimony about 604’s $500,000 purchase of Africo shares in 2004. Mr. Cavalluzzo recalled that the price was $0.75 per share, and that 604 had purchased 400,000 shares for $500,000. Mathematically, however, for 604 to have purchased 400,000 shares for $500,000 would mean that the price had been $1.25 per share, not $0.75 (nor $1.75, as the trial judge stated in her reasons). This transaction was not otherwise documented.

[69] While accepting it is “possible” the trial judge misapprehended the number of Africo shares originally acquired by 604 in 2004, the Crown says this misapprehension, if it occurred, is not material. The Crown asserts that the evidence supported the trial judge’s conclusion that 604 made only one purchase of Africo shares and that, by dividing those shares up between himself and Mr. Lawrence, the appellant must have known he was defrauding Mr. Vella and Mr. Kirkwood.

[70] The Crown rejects the appellant’s theory regarding the alleged December 2006 transaction. In the Crown’s submission, the documentary evidence did not, in fact, disclose a purchase of new shares, but rather a re-issuing of the same shares purchased in 2004, now converted into shares of the new corporate entity established when Africo went public and split with Rubicon in 2006.

[71] Ultimately, the Crown says that the “only reasonable interpretation” available to the trial judge was that the Africo shares purchased for $500,000 in 2004 were the same shares referenced in the documents from December 2006.

Discussion

[72] I accept that there are different plausible ways to interpret the evidence in this record. Yet even assuming, without deciding, that the trial judge did misapprehend the number and/or unit price of Africo shares acquired by 604 in 2004, there was evidence to support her key conclusion that this 2004 purchase was the only time 604 had acquired Africo shares.

[73] For example, Mr. Cavalluzzo testified that 604 had participated in Africo’s 2004 private placement, investing $500,000. Contrary to the appellant’s submission before us on appeal, Mr. Cavalluzzo stated that 604 had declined to invest in subsequent placements in 2005 and, most notably, in 2006. The appellant’s trial counsel did not challenge Mr. Cavalluzzo on this latter point, nor did the appellant assert at trial that 604 had made two separate purchases of Africo shares, one in 2004 and another in 2006.

[74] Ultimately, on the whole of the evidence before her, the trial judge inferred that the shares purchased by 604 through the 2004 private placement were the shares distributed to the appellant and Mr. Lawrence in December 2006 at the appellant’s direction. As I have explained, this was not a misapprehension; there was evidence in the record to support this inference.

[75] Accordingly, I would not interfere with the trial judge’s findings on this question. In my view, any misapprehension about the Africo shares, if it occurred, went to detail rather than substance, and was not material to the verdicts on counts 1 and 2.

[76] Having found that the appellant has failed to establish a material misapprehension of evidence relating to the Africo verdicts, I would reject his submission that those verdicts were unreasonable.

(b) The alleged misapprehension on the Rubicon counts

[77] With respect to the Rubicon frauds, the appellant identifies five separate inferences drawn by the trial judge which he argues were unsupported by the evidence and thus constitute misapprehensions. Collectively, he contends the following inferences were erroneous and resulted in unreasonable verdicts on the Rubicon counts:

i) The appellant knew the $1.5 million Rubicon private placement did not exist because, had Mr. Lawrence told him that he bought the shares himself, the appellant would have been sufficiently suspicious to have inquired;

ii) The appellant knew the placement did not exist because if he believed it did he would have bought additional shares for himself and others;

iii) The appellant knew the placement did not exist because he kept his own $100,000 investment in Rubicon in a separate personal trading account;

iv) The appellant knew the placement did not exist because he told some investors he had bought the shares himself for $1.5 million; and

v) The appellant’s after-the-fact conduct showed he knew the placement did not exist.

[78] The Crown submits that the appellant is attempting to revisit factual findings with which he disagrees, and argues that each of these findings by the trial judge was available on the record and entitled to deference on appeal.

Discussion

[79] Before addressing each impugned inference, it is important to note that many of the misapprehensions alleged by the appellant are intertwined with the trial judge’s findings on credibility.

[80] It is trite law that a trial judge’s credibility findings are entitled to a high degree of deference. The rationale for this principle was summarized by Watt J.A. in R. v. Wadforth, 2009 ONCA 716, 247 C.C.C. (3d) 466, at para. 66:

Resolution of credibility controversies is the daily fare of trial judges. Assessment of credibility is a difficult and delicate subject, often defying precise and complete verbalization. At bottom, belief of one witness and disbelief of another, in general or on a specific issue, is an alloy of factors, not a purely intellectual exercise … The unique position of trial judges to see and hear witnesses, and the inestimable advantage they enjoy in the result in assessing witnesses’ credibility and the reliability of their evidence, cannot be squandered by unrealistic expectations of scientific precision in language used to describe the complex coalescence of impressions that effuse after watching and listening to witnesses and attempting to reconcile their renditions of critical events. [Citations omitted.]

[81] To overcome this high degree of deference on the basis of an alleged misapprehension of evidence, an appellant must meet the “stringent standard” of showing that the impugned finding or inference played an “essential part” in the reasoning process leading to conviction: R. v. Lohrer, 2004 SCC 80, [2004] 3 S.C.R. 732, at para. 2. I would reiterate that appellate interference in the inference-drawing process is not permissible unless the appellant establishes the inference drawn was clearly wrong, unsupported by evidence, or otherwise unreasonable.

[82] With these principles in mind, I will now examine each complaint raised by the appellant in respect of the inferences regarding the Rubicon counts.

(i) The appellant knew the $1.5 million private placement did not exist because, had Mr. Lawrence told him he had purchased the shares himself, the appellant would have been suspicious and made inquiries

[83] The appellant’s evidence is that he told multiple investors he had access to $1.5 million worth of Rubicon shares through a private placement, based on his honest belief that Mr. Lawrence had acquired those shares using his own funds. Documentary evidence, however, disclosed that the appellant had personally acquired just $100,000 worth of shares, while 604 had acquired none.

[84] The trial judge disbelieved the appellant’s evidence on this issue. She concluded as follows, at paras. 47-48:

[The appellant] testified that he was required to be the “front person” for 604 and to have sole control over 604’s bank account because Mr. Lawrence told him he was having problems with the Canada Revenue Agency and could not have a bank account in his name. [The appellant] also testified many times that he believed Mr. Lawrence had already acquired the shares in Rubicon that they were selling to these various investors. [The appellant] said Mr. Lawrence told him he had used $1.5 million of his own funds … to acquire these shares. These two strands of evidence are inconsistent. If Mr. Lawrence was unable to have any power over a bank account because of his problems with the Canada Revenue Agency, how could he have written a cheque for $1.5 million to purchase these shares?

Further, [the appellant] maintained that the money paid by the investors for their Rubicon shares were [sic] transferred to the 604 trading account. That is inconsistent with his evidence that Sam Lawrence had fronted the cash for these shares. If [the appellant] had truly believed Mr. Lawrence was owed $1.5 million for these shares, he would have expected the funds advanced by the investors to repay Mr. Lawrence. [The appellant’s] insistence that the funds were transferred from the 604 bank account to the 604 trading account underscores the fact that he must have known Mr. Lawrence was not owed $1.5 [million] from these funds and, that being the case, must have known that the shares did not actually exist.

[85] Subsequently, the trial judge summarized her finding on this point in the following terms, at para. 195:

I do not believe [the appellant’s] evidence that Mr. Lawrence subsequently told him that he had personally acquired another $1.5 million in shares. Even if Mr. Lawrence had told him such a thing, [the appellant] would have been sufficiently suspicious to have made some inquiries. According to [the appellant’s] own evidence, he believed Mr. Lawrence had no access to cash or bank accounts and he also knew that when he had previously requested as big a piece of this offering previously, they had been told they could have $100,000.

[86] The appellant contends there was no evidence that the appellant believed Mr. Lawrence had no access to assets. The appellant further argues that there was no reason for the appellant, who allowed Mr. Lawrence to make trades on his own personal trading accounts, to become suspicious and make independent investigations about these Rubicon shares.

[87] I would not give effect to these submissions. I am not persuaded that this inference was clearly wrong, unsupported by evidence, or otherwise unreasonable. Rather, this inference flowed from the trial judge’s well-supported assessment of the appellant’s credibility and the manifest implausibility of his evidence regarding Mr. Lawrence’s finances.

[88] As such, I conclude there is no basis on which to interfere with the trial judge’s conclusion on this point.

(ii) If the appellant believed the placement existed, he would have purchased additional shares “for himself or family members or close friends”

[89] The trial judge found that it was “incomprehensible” that if the appellant believed Mr. Lawrence had acquired additional Rubicon shares, he would not have purchased some for himself or others. She stated as follows, at para. 196:

[The appellant] clearly believed that this private placement was an excellent opportunity to make a lot of money. If he actually believed that Mr. Lawrence had now managed to acquire another $1.5 million worth of shares, I find it incomprehensible that he would not have purchased any of them for himself or family members or close friends. Instead, the only person he personally brought into the Rubicon share purchase was Anthony Vella. This was at a time when [the appellant] claimed to have $3 million in cash and liquid assets and when he felt sufficiently confident in the stock’s value that he, in effect, grabbed 604’s investment opportunity and kept it for himself, hived off into his personal account. It is a reasonable inference from all of the circumstances that [the appellant] did not put his money into this project because he knew the $1.5 million in shares did not exist.

[90] The appellant argues that his evidence as to having $3 million in liquid assets covered an earlier time period (2005) and not the period of the purported Rubicon private placement (2007). The appellant further submits that the sale of Rubicon shares to Mr. Vella did represent taking advantage of this opportunity for a friend. As such, once again the appellant argues that this inference amounts to speculation on the part of the trial judge.

[91] Again, I would reject these submissions. In my view, the trial judge was entitled to draw an adverse inference from the fact the appellant did not purchase Rubicon shares for himself or others. It was open to the trial judge to disbelieve the appellant’s evidence about his assets, which was inconsistent. Further, the only “friend” he brought in on the Rubicon shares was Mr. Vella, whom by then he had already defrauded through the Africo scheme.

[92] I see no basis on which to interfere with this inference by the trial judge.

(iii) The appellant knew the placement did not exist because he kept his own $100,000 investment in his personal trading account

[93] The trial judge found it “revealing” that the appellant kept his personal shares of Rubicon segregated from 604’s accounts. Her impugned inference on this point was as follows, at para. 197:

I do believe [the appellant’s] evidence that he did this for his own personal security. That is because he knew the other trading accounts were being used to do speculative trading on margin with the hope of being able to turn a sufficient profit to pay out the investors and still have a profit for [the appellant] and possibly Mr. Lawrence. [The appellant] was not prepared to intermingle his “safe” shares with this project.

[94] In other words, the trial judge believed the appellant’s evidence that the reason for segregating his shares was personal security. However, she inferred that the appellant was concerned about securing his funds from the fraud he knew was being perpetrated using the other trading accounts.

[95] The appellant now says this inference was not available on the evidence. I do not agree.

[96] In my view, there is no basis to interfere with the credibility and factual findings of the trial judge on this point.

(iv) The appellant knew the placement did not exist because he told some investors he purchased the shares himself for $1.5 million

[97] The trial judge found as a fact that the appellant had told certain people that he himself, and not Mr. Lawrence, had purchased the Rubicon shares he was purporting to sell. She relied on this finding in support of her conclusion that the appellant knew there were no real shares available for the complainants to purchase, noting as follows, at para. 200:

I am satisfied beyond a reasonable doubt that [the appellant] knew the $1.5 million in shares did not exist … [The appellant] told some of [the] investors that he had himself purchased the shares, including in some instances that he had purchased them for $1.5 million. On this issue, I accept the evidence of the various complainants who testified to that effect. The fact that he would tell others he had purchased the shares is another indication that [the appellant] knew that Mr. Lawrence had not done so.

[98] The appellant argues that, given the close partnership between himself and Mr. Lawrence, it was not “strange or indicative of guilt” for the appellant to have used “imprecise language” or to have associated himself with the purchase of Rubicon shares. On this point, the appellant highlighted the evidence in the record of the close relationship between himself and Mr. Lawrence.

[99] In my view, there is no basis to interfere with this finding. In this case, the requisite evidence was in the record, from several witnesses, to support the trial judge’s finding that she disbelieved the appellant.

(v) The appellant’s after-the-fact conduct shows he knew the placement did not exist

[100] The trial judge drew the final impugned inference from the conduct of the appellant after the fraud came to light, stating as follows, at paras. 201-202:

When things started to come apart, [the appellant] adopted a posture of delay and persuasion. He invented various reasons for why shares could not be delivered when people requested them and for why investors should not cash out when they asked to do so … None of these excuses were true … Ultimately, … he blamed everything on bad trades by Mr. Lawrence.

When some investors insisted on getting their shares or cashing out, [the appellant] persuaded other key investors … to take over their positions. It appears that one of the investors (Mr. Laffee…) was most insistent on getting his money out at an early stage. On December 7, 2007, [the appellant] withdrew 283,214 of his own shares in Rubicon and on January 8, 2008 transferred those shares to Mr. Laffee’s company … Obviously, there would be no reason for him to do that if he thought that person’s shares actually existed somewhere, or if he was entirely innocent of any wrongdoing in this matter. [The appellant’s] explanation is that he did not know what he was signing. I do not believe that story, nor does it cause a reasonable doubt in my mind. I consider this transaction to be further evidence of [the appellant’s] knowledge of the nature of the fraud he was perpetrating.

[101] The appellant contends that, while he did arrange for a block of shares to be cashed out, there is no evidence to show those shares were the appellant’s “own shares”, as opposed to shares that had been “earmarked” for Mr. Laffee within the 604 account.

[102] I do not accept this argument as a basis for a finding of misapprehension of evidence. Rather, as in the case of the other impugned inferences, the trial judge considered the evidence before her, made credibility findings, and reached factual determinations. I would not interfere.

[103] In a related submission, the appellant argues that the trial judge erred in law by “failing to recognize that after-the-fact conduct has essentially no probative value if it is ‘equally explained by’ or ‘equally consistent with’ two or more offences”. For example, the appellant suggests his after-the-fact conduct was equally consistent with a belated attempt to cover up the fraud out of a concern about civil liability, or by the fact that Mr. Lawrence had continued to lie to him.

[104] I would reject this submission, too. In his testimony, the appellant never raised any concern over civil liability to account for his actions, so this arguably exculpatory inference was not available to the trial judge. Rather, the appellant said he transferred his shares out because Mr. Lawrence told him to do so. I have already summarized the cogent reasons given by the trial judge for disbelieving the appellant’s evidence with respect to Mr. Lawrence.

[105] Accordingly, I conclude there are no misapprehensions of evidence relating to the Rubicon counts. As such, I need not consider the appellant’s contention that the verdicts on those counts were unreasonable.

(c) The alleged miscarriage of justice

[106] Finally, the appellant contends that the trial judge’s numerous misapprehensions of evidence “infected and destroyed” the basis of her credibility assessment of the appellant, resulting in a miscarriage of justice.

[107] I do not agree. The only potential misapprehension identified by the appellant related to the number and unit price of Africo shares purchased by 604 in 2004. I have already explained my view that, assuming this was indeed a misapprehension, it was not material and did not play an essential role in the verdicts. In my view, there is also no error in the trial judge’s credibility assessment of the appellant.

(d) Conclusion on the misapprehension of evidence ground

[108] I am not persuaded that the trial judge misapprehended the evidence, or if she did, that it was in a material way. As such, I see no basis on which to find any of her verdicts unreasonable. Nor, in my view, did any miscarriage of justice occur.

[109] I turn now to the issue of whether the application judge erred in dismissing the appellant’s Charter s. 11(b) application.

(2) Did the Application Judge Err in Denying the s. 11(b) Application?

[110] On November 27, 2017, the application judge dismissed the appellant’s s. 11(b) application, declining to issue a stay of proceedings due to the delay in bringing the appellant to trial.

[111] Before the application judge, the parties agreed that the delay in this case exceeded the 30-month presumptive ceiling as set out in Jordan. As such, to resist a stay, the Crown had the onus to establish one of two relevant exceptional circumstances: complexity or the transitional exception.

[112] With respect to complexity, the application judge found that the amount of disclosure and the length of the preliminary inquiry in this case, among other factors, made it “particularly complex”, concluding that the additional time above the Jordan ceiling was justified on this basis.

[113] In the alternative, the application judge also found that the transitional exception applied. After considering the diligence of each party in moving the case forward, as well as the alleged prejudice to the appellant, the application judge concluded that the delay was justifiable as a transitional case under the framework set out in R. v. Morin, 1992 SCC 89, [1992] 1 S.C.R. 771.

[114] On appeal, the appellant says the application judge erred by finding that the case was “particularly complex”, when in fact it was straight-forward, and by concluding that the transitional exception applied without properly attributing the delay in this case, which far exceeded the Morin ceiling.

[115] The Crown’s submissions on the s. 11(b) issue focus primarily on the transitional exception. The Crown’s position on complexity is advanced as an alternative argument. As such, I propose to deal with the transitional exception first, followed by complexity.

(a) Does the transitional exception apply in this case?

[116] The net Jordan delay in this case was 38.9 months. The parties agree that the s. 11(b) clock began to run on April 25, 2012, when the information against the appellant was laid. The clock stopped on February 13, 2018, when the appellant’s trial counsel completed his closing submissions. The defence waived around 2 years and 7 months of this total time, largely due to medical issues affecting the appellant’s trial counsel.

Procedural history

[117] Before assessing the application judge’s decision on the transitional exception, I will briefly summarize the procedural history that is relevant for the purposes of this appeal.

(i) June to October 2012: First OCJ appearance and intake scheduling

[118] On June 14, 2012, the appellant made his first appearance in the Ontario Court of Justice (“OCJ”). The Crown completed its disclosure on August 28, 2012. After confirming receipt of disclosure, the appellant’s trial counsel advised that he would be out of the country for much of September 2012. He thus requested an adjournment until October 2012 to return to schedule the judicial pre-trial. Accordingly, the intervening period of about 1.5 months was waived by the defence for the purposes of the s. 11(b) analysis.

[119] On October 10, 2012, the first judicial pre-trial was scheduled for November 16, 2012.

(ii) November 2012 to April 2015: The OCJ preliminary inquiry

[120] On November 16, 2012, the parties met to discuss scheduling for the preliminary inquiry. The Crown declined the earliest available start date of October 16, 2013. As such, the 8-day preliminary inquiry was scheduled to begin on October 24, 2013. The Crown concedes this 8-day gap as Crown delay. The parties agreed to return on January 23, 2013 to confirm the dates and the accused’s election.

[121] On January 23, 2013, the confirmation date, the appellant’s trial counsel was reported to be ill and unable to work until March 2013.

[122] On March 20, 2013, the parties returned and confirmed the October 24 to November 4, 2013 preliminary inquiry dates. The court ordered the defence to deliver its statement of issues for the preliminary inquiry by April 30, 2013.

[123] The defence’s statement of issues was ultimately delivered on October 16, 2013.

[124] On October 24, 2013, the court informed the parties that it would be unable to accommodate the preliminary inquiry as scheduled. The matter was put over to April 28, 2014. It is not disputed that this 6.1-month period constitutes institutional delay.

[125] On April 28, 2014, the court was once again unable to begin the preliminary inquiry. At the Crown’s suggestion, the parties reconvened the following day and agreed to bifurcate the preliminary inquiry by using the four available days during the first week of May 2014 and returning to complete the inquiry the week of September 26, 2014, which was the next earliest available date. The parties agree that this 4.7-month period constitutes institutional delay for the purposes of the s. 11(b) analysis.

[126] The preliminary inquiry commenced on May 1, 2014, continuing through May 2 and from May 5 to 6. However, the inquiry could not continue in September as planned, as the appellant’s trial counsel fell ill. This time was also waived as defence delay.

[127] On April 27, 28, and 30, 2015, the preliminary inquiry was completed. The appellant was committed for trial in the Superior Court of Justice (“SCJ”).

(iii) June 2015 to March 2016: SCJ pre-trial proceedings

[128] At the initial SCJ judicial pre-trial, on June 2, 2015, trial dates could not be set because the parties disagreed on the estimated length of trial. The Crown urged that the trial could be completed in 4 weeks, but the defence argued it would require up to 6 weeks.

[129] The following day, the parties returned and agreed to start the trial on April 4, 2016, which was the earliest available date on the long trial list.

[130] On March 9, 2016, the defence brought its s. 11(b) application. The Crown advised that the defence was also required to bring an application to adduce third-party suspect evidence. The defence agreed to file the third-party suspect application, and ultimately did so on March 30, 2016.

[131] On March 24, 2016, the date set for the s. 11(b) application hearing, the defence requested an adjournment for additional preparation time.

(iv) April 2016 to January 2018: Waived delay

[132] The trial did not proceed as scheduled on April 4, 2016. The appellant’s trial counsel was unable to proceed at that time due to serious health issues. As such, the defence agreed to waive all delay from this point until the end of trial.

[133] The trial ultimately began on January 29, 2018. It lasted just under 2 weeks; closing submissions were completed on February 13, 2018.

Principles governing the transitional exception

[134] Jordan was released in July 2016.

[135] The appellant’s s. 11(b) application was filed in March 2016, before Jordan was released, but not argued until October 27, 2017.

[136] In cases such as this, where charges are laid pre-Jordan, but the trial concludes post-Jordan, “a transitional exceptional circumstance will apply when the Crown satisfies the court that the time the case has taken is justified based on the parties’ reasonable reliance on the law as it previously existed”: Jordan, at para. 96.

[137] Deciding whether the transitional exception is warranted is a highly contextual determination: Jordan, at para. 96. See also, R. v. Williamson, 2016 SCC 28, [2016] 1 S.C.R. 741, at para. 24; R. v. Cody, 2017 SCC 31, [2017] 1 S.C.R. 659, at para. 74; R. v. Picard, 2017 ONCA 692, 137 O.R. (3d) 401, at para. 71, leave to appeal refused, [2018] S.C.C.A. No. 135; R. v. Powell, 2020 ONCA 743, 153 O.R. (3d) 455, at paras. 9-10; R. v. Wookey, 2021 ONCA 68, 154 O.R. (3d) 145, at para. 79.

[138] As affirmed in Picard, at para. 71, to determine whether the transitional exception justifies a delay above the presumptive Jordan ceiling, a court’s contextual assessment typically includes the following considerations:

I. the complexity of the case; II. the period of delay in excess of the Morin guidelines; III. the Crown’s response, if any, to institutional delay; IV. the defence efforts, if any, to move the case along; and V. prejudice to the accused.

[139] In the transitional exception analysis, the judge hearing an s. 11(b) application is tasked with attributing the delay as it would have been attributed under the Morin framework. Under Morin, delay could be attributed either to the Crown, to the defence, as institutional delay, or as neutral time required for case intake or preparation purposes.

[140] For two-stage trials, like the one at issue on this appeal, the relevant guideline under Morin is combined Crown and institutional delay of 14-18 months. The purpose of the Morin guideline, in part, was to recognize that there is a limit to the delay that will be acceptable based on limited institutional resources. That said, the guideline was intended to be flexible, depending on the court’s contextual assessment of the other considerations outlined above.

[141] While the application judge made overall findings, he did not make attributions of delay according to Morin. Both parties agree it was an error for him not to do so.

[142] The standard of review for characterizing delay under s. 11(b) is correctness: R. v. Pauls, 2020 ONCA 220, 149 O.R. (3d) 609, at para. 40, aff’d 2021 SCC 2, 396 C.C.C. (3d) 145. As a result, the Crown argues there is little significance to this error.

[143] In my view, it would have been preferable for the application judge to have attributed the periods of delay. In any event, it now falls to this court to do so.

Positions of the parties on institutional delay

[144] On this appeal, the main dispute between the parties is whether the combined Crown and institutional delay in the appellant’s case exceeded the Morin guidelines.

[145] The appellant argues that the vast majority of the net Jordan delay, 32.1 out of the 38.9 months, was directly caused by chronic institutional backlogs in both the OCJ and SCJ and by the Crown’s failure to prioritize this case. For example, the appellant points out that the case was delayed for a combined period of around 11 months because the OCJ could not provide the dates needed to complete the preliminary inquiry (6.1 months from October 2013 to April 2014, and a further 4.7 months from May to September 2014). The appellant urges this court to view the overall delay in the context of the well-known institutional backlog at the College Park Courthouse, where this matter initially proceeded: see, R. v. Lore, 2013 ONCJ 429, 290 C.R.R. (2d) 29, at para. 4, citing R. v. Donaldson, 2010 ONCJ 3, 204 C.R.R. (2d) 131, at para. 22.

[146] Applying the Morin framework, the appellant contends that the period of institutional and Crown delay in this case was 26.6 months, or nearly 9 months more than the upper limit of the range identified in Morin.

[147] The Crown takes no issue with the appellant’s characterization of the combined 11-month wait for preliminary inquiry dates at the OCJ as institutional delay. Nevertheless, according to the Crown, the total combined institutional and Crown delay yields an operative delay of less than 12 months, well below the Morin guideline.

[148] Specifically, the Crown contends that the following chart represents the correct attribution of delay:

Total time: 5 years, 9 months, 19 days Waived delay: 2 years, 6 months, 27 days Neutral delay: 2 years, 3 months, 20 days Institutional delay: 11 months, 13 days Crown delay: 8 days Operative delay (Institutional plus Crown delay) 11 months, 21 days

[149] At the heart of the dispute between the parties regarding s. 11(b) is whether the defence was “ready to proceed” at several key junctures. I return to this question below.

The proper attribution of delay under Morin

[150] For purposes of attribution in this case, the delay analysis may be divided into the three discrete periods of delay in dispute: (i) April 25, 2012 to August 28, 2012 (the “OCJ intake period”); (ii) November 16, 2012 to October 24, 2013 (the “OCJ preliminary inquiry period”); and (iii) July 23, 2015 to April 4, 2016 (the “SCJ pre-trial period”).

[151] I will deal with each disputed delay period in turn.

(i) The OCJ intake period: April 25, 2012 to August 28, 2012

[152] The OCJ intake period, the first period under dispute, ran from April 25, 2012, when the appellant was charged, until August 28, 2012, when Crown disclosure was completed and the initial OCJ judicial pre-trial was scheduled.

[153] The appellant argues that 2.1 months of this 4-month period should be allocated to Crown delay in light of the delayed Crown disclosure, which consisted of audio recordings of police interviews with certain witnesses.

[154] The Crown submits that the entire 4-month period should be allocated as neutral intake time. In the Crown’s view, any modest delays in disclosure did not actually delay the intake process. Further, the Crown contends that there is no reason to believe the defence did not already have the substance of the interviews, as reflected in written summaries or notes given in the documentary disclosure.

[155] The Crown relies on R. v. Mahmood, 2012 ONSC 6290, 271 C.R.R. (2d) 94, at paras. 37-38, for the proposition that 2 to 11 months was the general range for intake time in Ontario when the appellant’s case entered the system.

[156] I agree with the Crown on this point. In my view, the 4-month OCJ intake period was neutral intake time. There is no indication in the record that the timing of Crown disclosure led to additional delay. Moreover, 4 months was well within the accepted range at the time.

(ii) The OCJ preliminary inquiry period: November 16, 2012 to October 24, 2013

[157] The second disputed period spans 8.3 months, from November 16, 2012, when the first preliminary inquiry dates were set, to October 24, 2013, the day the preliminary inquiry was initially scheduled to commence.

[158] The appellant argues that 3 months of this period should be allocated as neutral preparation time, with the balance, 8.3 months, allocated to institutional delay.

[159] The Crown concedes that 8 days of the OCJ preliminary inquiry period were attributable to the Crown (for declining the earlier October 16 start date) and 8 days were institutional delay.

[160] However, according to the Crown, the remaining time, nearly 11 months, was neutral preparation time. The Crown urges that the defence was still preparing for the preliminary inquiry and therefore not ready to proceed until October 16, 2013.

####### The statement of issues

[161] The Crown takes this position on the basis that the defence only provided its statement of issues on October 16, 2013, over 5 months after the court-ordered deadline, and notwithstanding repeated commitments to provide that document earlier, which I will detail below.

[162] Under the Morin analysis, institutional delay time only begins to run once the parties are ready to proceed but the court cannot accommodate them: Morin, at pp. 794-5. Simmons J.A. explained this principle in R. v. Tran, 2012 ONCA 18, 287 O.A.C. 94, at para. 32:

Parties should not be deemed automatically to be ready to conduct a hearing as of the date a hearing date is set. Counsel require time to clear their schedule so they can be available for the hearing as well as time to prepare for the hearing. These time frames are part of the inherent time requirements of the case.

[163] As long as the statement of issues was outstanding, the Crown argues, the defence was not in fact ready to proceed.

[164] Section 536.3 of the Criminal Code provides that, where the accused requests a preliminary inquiry, counsel for the accused shall give the court and the Crown a statement setting out the issues upon which the accused wants evidence to be given at the inquiry, and a list of the witnesses to be heard. The statement is to be provided within the time set out in the applicable rules of court, or as directed by a justice.

[165] In this case, an 8-day preliminary inquiry was slated to begin October 24, 2013. As noted, however, in January 2013, the appellant’s trial counsel was reported to be ill and unable to work until the end of March.

[166] The next court appearance was March 20, 2013. The appellant’s trial counsel said, “we’re set and ready to go”, but then acknowledged he had not yet provided the statement of issues. The trial Crown asked that he deliver and file it with the court. The appellant’s trial counsel agreed. The court directed the appellant’s trial counsel to file the statement of issues by April 30, 2013.

[167] On April 30, 2013, counsel still had not provided the statement of issues as ordered. Further commitments to provide the statement followed. The statement of issues ultimately was delivered on October 16, 2013.

[168] Based on the foregoing, I do not accept either party’s account of the proper attribution of delay arising from the OCJ preliminary inquiry period.

[169] I acknowledge that the defence failed to undertake a mandatory preparatory step for the preliminary inquiry in the face of a court-ordered deadline and repeated commitments to do so. However, particularly in light of the inability of appellant’s trial counsel to work during some of this time due to illness, part of this delay can reasonably be characterized as inherent preparation time.

[170] On the other hand, allocating this entire period to neutral preparation time on the basis of a one-page document, which, in this case, was unlikely to alter the course of the Crown’s preparation in any event, would be unwarranted. Put simply, there is no basis in the evidence to suggest that the late delivery of the defence statement of issues caused any additional delay.

[171] As a result, I conclude that the most appropriate allocation of the OCJ preliminary inquiry period is to split the 8.3 months between institutional delay and neutral preparation time, but with the majority allocated as neutral time.

[172] Therefore, for this 8.3-month period, 3 months is allocated to institutional delay, while the balance of 5.3 months is allocated as neutral preparation time.

(iii) The SCJ pre-trial period: July 23, 2015 to April 4, 2016

[173] The final disputed period covers the 8.4 months between July 23, 2015 and April 4, 2016, the date the trial was initially scheduled to begin.

[174] The parties agree that the first 3 months of the SCJ pre-trial period should be allocated as neutral preparation time.

[175] However, the appellant says the remaining 5.4 months was institutional delay. According to the appellant, the trial was virtually identical to the preliminary inquiry and there was little left to prepare. Notably, the appellant says the third-party suspect application he brought in March 2016, just days before trial was set to begin, had no material impact on the delay.

[176] The Crown argues this 5.4-month period was all neutral time, not institutional delay, as the parties were not ready to proceed to trial. In making this argument, the Crown relies on the appellant’s third-party suspect application. The Crown takes the position that the defence should have brought the third-party suspect application much earlier. Since they did not, the outstanding 5.4 months in this period was “preparation time that was needed by defence counsel.”

[177] Once again, apart from the agreed upon 3 months of inherent preparation time, I am not persuaded by the logic of either party’s position on the proper Morin attribution of the SCJ pre-trial period.

[178] I accept the Crown’s submission that the majority of the remaining 5.4 months was attributable to the need for defence preparations for trial, including the third-party suspect application hearing. As canvassed above, a key defence theory at trial was that Mr. Lawrence, not the appellant, was the real perpetrator of the frauds. It is therefore reasonable to assume that, as the appellant’s trial counsel acknowledged, the third-party suspect application was “integral” to the defence case and would have required significant preparation time.

[179] However, I would also find that a portion of this period was attributable to institutional delay, as the appellant urges. In my view, it is unlikely that a full 5.4 months would have been necessary to prepare for a single evidentiary application, no matter how crucial it may have been. Further, the third-party suspect application was brought only days before the scheduled trial date. One would expect that, by this late stage, both sides would have been substantially ready to proceed on the merits.

[180] I would therefore divide this disputed 5.4-month period between institutional delay and neutral preparation time, resulting in 2 months of institutional delay and 3.4 months of neutral time.

Other Morin considerations

[181] In addition to the allocation of delay, the Morin framework instructs judges to consider the seriousness of the offence, the complexity of the case, any prejudice to the accused arising from the delay, and the diligence of the parties in responding to the delay and moving the case forward.

[182] The appellant argues that the charges, while serious, were not of sufficient gravity to justify going beyond the guideline contemplated in Morin. The appellant further contends that the application judge erred in finding that this case was complex. In the appellant’s view, this was a “basic” fraud case.

[183] I would not give effect to this submission. In my view, the seriousness of the charges and the complexity of the case are not determinative of whether the transitional exception was properly applied. Indeed, the application judge focused on other considerations, as he was entitled to do.

[184] I would add that even if, as the appellant argues, this case was not sufficiently complex to meet the test set out in Jordan, for transitional cases “moderate complexity bears on the reasonableness of the delay”: R. v. Pyrek, 2017 ONCA 476, 349 C.C.C. (3d) 554, at para. 30.

[185] With respect to prejudice, the application judge found that the delay had not caused the appellant sufficient prejudice to alter his conclusion that the delay was reasonable based on the transitional exceptional circumstance. In support of this finding, he noted that the appellant’s claims of prejudice had been undermined in cross-examination.

[186] The appellant submits that the application judge failed to consider the fact he suffered from severe depression and was involuntarily committed on the eve of trial, which he says demonstrate the grave prejudice arising from these lengthy proceedings.

[187] Further, even if there had been no prejudice, the appellant says that, properly attributed, the sheer length of the delay puts it outside the bounds of reasonableness.

[188] The Crown responds that, under Morin, an accused may rely on prejudice caused by the delay in being brought to trial, but not on prejudice from the fact of being charged and tried, nor on prejudice arising from delay caused by inherent time requirements: R. v. Kovacs-Tatar (2004), 73 O.R. (3d) 161 (C.A.), at paras. 32-33; R. v. Boateng, 2015 ONCA 857, 182 O.R. (3d) 372, at para. 41.

[189] In light of the lack of evidence in the record specifically linking the delay to the alleged prejudice to the appellant, I see no basis on which to interfere with the application judge’s conclusion on this matter.

[190] Finally, I would treat the diligence of the parties as a neutral factor. Each side blames the other for the delay in this case. As I have indicated, however, in my view the record tells a more balanced story.

The final balancing regarding the transitional exception

[191] Of the nearly 39 months of net Jordan delay, the appellant argues that the total operative institutional and Crown delay according to the Morin framework was 26.6 months as of April 4, 2016, significantly beyond the 18-month upper guideline under the transitional exception.

[192] Based on the Crown’s proposed attribution, the operative delay was just shy of 12 months, well under the Morin guideline.

[193] As noted in my analysis above, I have rejected this ‘all or nothing’ approach with respect to attributing delay in the disputed periods. Based on a more balanced approach, I conclude that the combined Crown and institutional delay in this case, at 17 months, fell within the Morin guideline.

[194] At this juncture, it is important to recall the overriding question underlying the application of the transitional exception: Did the parties reasonably rely on the state of the law as it existed at the time?

[195] The periods in dispute on this appeal all occurred before Jordan was released. At that time, there was no reason for the parties to believe they would be judged by any standard other than the Morin framework, nor any realistic prospect that the case could have moved more quickly to trial based on Jordan.

[196] Therefore, in light of my view that the 18-month Morin guideline for institutional and Crown delay was not exceeded, and that no other Morin considerations affected the reasonableness of the delay in this case, I conclude there is no error in the application judge’s dismissal of the appellant’s s. 11(b) application based on the transitional exception.

(b) Does this case meet the complex case exception threshold?

[197] Given my conclusion on the transitional exception, it is unnecessary to assess the application judge’s analysis regarding the complex case exceptional circumstance.

(c) Conclusion on s. 11(b)

[198] Despite the application judge’s failure to attribute delay, based on my contextual assessment pursuant to Morin, I would reject the appellant’s submission that the application judge erred in law in applying the transitional exception. In my view, there is no reversible error in his conclusion that the delay in this case did not violate the appellant’s s. 11(b) rights.

[199] Accordingly, I would not give effect to this ground of appeal.

B. The Sentence Appeal

[200] The appellant takes issue with only one aspect of his sentence: the amount of the restitution order and corresponding fine in lieu of forfeiture.

[201] This ground of appeal relates to the restitution funds applicable to Jeff Fallon, namely the $40,000 Mr. Fallon invested in the non-existent Rubicon shares and the additional $5,000 he invested on behalf of his daughter, Nicole. Although Mr. Fallon gave this money to 604, he was not a named complainant in the indictment against the appellant.

[202] The Crown properly concedes that this aspect of the sentencing order was in error. While Mr. Fallon and his daughter both lost money investing with 604, the Crown did not seek to prove fraud in relation to those losses. Therefore, their losses were not “as a result of” a proven offence for purposes of the restitution order, pursuant to s. 738(1)(a) of the Criminal Code, nor were the funds proven to be proceeds of crime in the hands of the appellant for purposes of the fine order, pursuant to s. 462.37(3) of the Criminal Code.

[203] The Crown also correctly clarifies that the amount of money at issue applicable to Mr. Fallon was $45,000, not $42,500 as stated in the appellant’s factum.

[204] Therefore, the total amount of both the restitution and the fine order should be reduced from $1,100,799 to the revised total of $1,055,799.

[205] Accordingly, the sentence appeal is allowed. The restitution and fine orders must each be revised to remove the monies applicable to Mr. Fallon and his daughter.

Conclusion

[206] For reasons above, I would dismiss the appeal from conviction.

[207] The sentence appeal is allowed. Accordingly, both the restitution and fine orders shall be reduced by $45,000 each, to a revised total for each order of $1,055,799. The amount of $45,000 payable to “Jeff Fallon & Nicole Fallon” shall be deleted from the schedules attached to the restitution order and the fine order.

Released: July 22, 2021 “G.R.S.” “L. Sossin J.A.” “I agree. G.R. Strathy C.J.O.” “I agree. K. Feldman J.A.”