COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Khan, 2022 ONCA 698

DATE: 20221014

DOCKET: C62065

Trotter, Zarnett and Favreau JJ.A.

BETWEEN

His Majesty the King

Respondent

and

Mohammad Khan

Appellant

Paul Slansky, for the appellant

David Friesen, for the respondent

Heard: April 7, 2022

On appeal from the conviction entered on November 25, 2015 by Justice Michael G. Quigley of the Superior Court of Justice, sitting without a jury with reasons reported at 2015 ONSC 7283.

Favreau J.A.:

Overview

[1] Mohammad Khan appeals three convictions for forgery related offences and one conviction for fraud over $5,000.

[2] The trial judge found Mr. Khan guilty of these charges after a 29-day trial. The trial judge’s reasons are over 150 pages in length. In the same decision, the trial judge acquitted Mr. Khan’s son, Yannick Muellenbach, of similar charges.

[3] The forgery convictions arise from the operation of a fake identification card business. The business operated under the name “Flash Jack’s” and was located in the basement of a building at 361 Yonge Street, Toronto. At trial, there was no issue that there was a fake identification business operating out of Flash Jack’s. The only issue was whether Mr. Khan and his son operated the business. Their defence was that the business was operated by other people who worked at Flash Jack’s during the relevant period. The trial judge rejected these arguments. He found that, while the business was initially set up by other people, when Mr. Khan discovered how lucrative it was, he took over the operation of the business, including taking possession of the equipment used to make the fake identification cards, and that he derived income from the business.

[4] The fraud conviction arises from income tax evasion in the years 2005 to 2009. Mr. Khan did not report or pay any income tax between 2000 and 2009. In 2009, Mr. Khan made a voluntary disclosure to the Canadian Revenue Agency, in which he reported income of approximately $30,000 per year. The trial judge found that Mr. Khan’s income from 2005 to 2009 was much higher than his reported income. He found that Mr. Khan operated five different bank accounts held by various business associates and by his son, and that the expenses and income from the various businesses at 361 Yonge Street, including Flash Jack’s, were run through these accounts. While the trial judge held that it was not possible to quantify the precise amount of the tax fraud due to Mr. Khan’s deceitful actions, he found that the amount of unpaid income tax was at least $100,000.

[5] On appeal, Mr. Khan argues that the trial judge made the following seven errors:

a. The trial judge erred in preventing Mr. Khan from reopening his case to show that he did not own the building at 361 Yonge Street;

b. The trial judge made a legal error in finding that Mr. Khan was the “directing mind” of the fake identification business and in thereby finding him guilty based on vicarious liability;

c. The trial judge erred in his application of the co-conspirator’s exception to the hearsay rule;

d. The trial judge improperly relied on affidavit evidence sworn by people who were not available for cross-examination at trial;

e. The trial judge treated the Crown’s evidence more favourably than the defence evidence;

f. The trial judge improperly reversed the burden of proof on the issue of whether Mr. Khan owed any income tax; and

g. The trial judge erred in finding that there was no trial unfairness in the delay in laying charges.

[6] For the reasons below, I would reject all grounds of appeal. The trial judge made no errors of law. He carefully reviewed and weighed the extensive evidence, and he made findings of credibility and fact that were available to him on the record.

[7] Below, I address each ground of appeal raised by Mr. Khan. I provide a review of the facts as necessary in the discussions of each ground of appeal.

A. The trial judge did not prevent Mr. Khan from reopening his case

[8] There were several businesses operating out of 361 Yonge Street during the relevant time period. One of the key issues at trial was Mr. Khan’s control over those businesses, especially Flash Jack’s, which operated in the basement of the building. In this context, one of the issues at trial was the ownership of the property at 361 Yonge Street. Mr. Khan’s name was not on title to the property, but the trial judge found that he was the beneficial owner of the property.

[9] From 1989 to 2002, title to the property was in the name of Heike Muellenbach, who was Mr. Khan’s spouse and Mr. Muellenbach’s mother. From 2002 until February 2010, title to the property was in the name of Mumtaz Khan, Mr. Khan’s mother. Following Ms. Khan’s death in February 2010, title to the property was transferred to Mr. Muellenbach. At trial, Mr. Khan argued that he was not the beneficial owner of the property and that his involvement in any of the business activities at the building was limited to a janitorial role. In support of this position, he claimed that Ms. Muellenbach and then Ms. Khan had held the property in trust for Mr. Muellenbach.

[10] In his reasons for conviction, the trial judge rejected this position and found that Mr. Khan was the beneficial owner of 361 Yonge Street during the relevant period even though the property was never formally in his name. In part, he based this finding on evidence that Mr. Khan purchased the property and that there was no evidence that Ms. Muellenbach or Ms. Khan ever provided consideration for the properties or that they held the properties in trust for Mr. Muellenbach:

[The] property was plainly purchased by [Mr.] Khan, legally and beneficially, and there is no documentary evidence whatsoever, and little more than anecdotal or hearsay evidence that he held that property … in trust for his son Yannick Muellenbach or for anyone else. Neither was any evidence proffered that the alleged transfers of the title of 361 Yonge Street to Heike Muellenbach in 1989 or to Mumtaz Khan in 2002, were supported by any documentation other than title transfer documents or any formal consideration.[^1]

[11] At sentencing, in the context of the Crown’s forfeiture application, the Crown obtained documents from Mr. Muellenbach’s solicitor by way of a subpoena duces tecum. These documents showed that Mr. Khan’s mother held the property in trust for Mr. Muellenbach until 2008, that she transferred it to Mr. Muellenbach in 2008 and that the transfer was formally registered on title in 2010.

[12] Mr. Khan says that this evidence provided a basis to reopen the trial because it demonstrates that Mr. Muellenbach was the beneficial owner of 361 Yonge Street, which undermines the trial judge’s conclusion that Mr. Khan owned the property. Mr. Khan argues that the trial judge erred by precluding him from reopening the trial when he attempted to do so during the sentencing proceedings.

[13] There is no merit to this argument for two reasons:

a. It is evident from the transcript of the sentencing submissions that the trial judge did not preclude Mr. Khan from reopening his case; and

b. The ownership of the building at 361 Yonge Street was not important to the trial judge’s finding that Mr. Khan was the “controlling mind” of the forgery business or that he committed tax evasion. Rather, the key findings for both sets of convictions are that Mr. Khan ran the forgery business and that he controlled the bank accounts through which the income flowed.

[14] I address both reasons for rejecting this ground of appeal below.

(1) The trial judge did not prevent Mr. Khan from reopening the case

[15] In a judge-alone criminal trial, trial judges are not functus officio until after they have imposed a sentence or otherwise made a final disposition in the matter: see R. v. Sualim, 2017 ONCA 178, 135 O.R. (3d) 81, at para. 29, referring to R. v. Lessard (1976), 1976 CanLII 1417 (ON CA), 30 C.C.C. (2d) 70 (Ont. C.A.), at p. 73, and R. v. Griffith, 2013 ONCA 510, 116 O.R. (3d) 561, at para. 12.

[16] Accordingly, as stated in R. v. Kraftchick (1991), 44 O.A.C. 313 (C.A.), at p. 315, the appropriate time to seek to reopen a trial is during the sentencing hearing:

The trier of fact in this case was the trial judge and he was still seized of the case at the sentencing hearing. The sentencing hearing was the appropriate time to ask the trial judge to re-open the conviction issue and, if it was thought necessary, to direct a mistrial. No such application was made by the defence.

[17] Furthermore, where an application to reopen rests on the admission of additional evidence, the applicant must meet the criteria for fresh evidence in R. v. Palmer, 1979 CanLII 8 (SCC), [1980] 1 S.C.R. 759: see R. v. N.G., 2020 ONCA 494, 152 O.R. (3d) 24, at para. 43.

[18] In this case, while Mr. Khan was aware of the evidence obtained from Mr. Muellenbach’s lawyer at the time of the sentencing hearing, his trial counsel did not apply to reopen the trial. However, it is evident from the transcript that trial counsel was aware of the opportunity to reopen and that the trial judge never precluded him from doing so.

[19] On February 8, 2016, during submissions on sentencing, trial counsel said:

I can apply to re-open. Your Honour is not functus until you have imposed sentence. And this material is potentially relevant to me to at least looking at it to determine whether or not it goes that far. I mean, I don’t know that I would at the end of the day, but certainly my antennae went up when I saw these notes. [Emphasis added.]

[20] After trial counsel made this comment, the trial judge and trial counsel discussed whether Mr. Khan was seeking to reopen the trial or whether he was simply addressing the evidence as it related to the Crown’s forfeiture application. Trial counsel stated that he was primarily concerned with the forfeiture application, but went on to say:

Whether or not there’s some other issue whether it goes to an issue of re-opening or what have you, I don’t know. I just go to Your Honour to the fact of interest of being frank and open that it might and that I would really want to take a look at that before I proceeded to a point where Your Honour was functus.

[21] In response, the trial judge made the following comment:

I’m not being critical … of what you’re asking or raising the issue. I’m trying to understand what its implications are and how it fits into where we are and what we’re doing. That’s what I’m trying to understand because if it’s an issue, I would like to make use of the time that we have scheduled, let’s be quite clear. I’m not interested in shutting down after the difficulty we’ve had in even getting here, okay.

[22] The trial judge ended the discussion by saying to defence counsel:

[Y]ou may well have to give consideration to whether or not something has happened that you want to raise at this point, which you contend goes to culpability of your client. I say nothing further than that.

[23] The sentencing submissions continued on February 9 and March 29, 2016. Mr. Khan was sentenced on May 3, 2016. At no time over the course of those three months did Mr. Khan bring an application to reopen the trial. Importantly, the trial judge never suggested, even implicitly, that Mr. Khan could not bring such an application.

[24] From the transcript, it is evident that Mr. Khan made a decision not to bring an application to reopen the trial, knowing that he had to do so before the trial judge became functus. Moreover, the trial judge never prevented him from doing so.

(2) The evidence would not have affected the result at trial

[25] Second, even if Mr. Khan had brought an application to reopen the trial, I am not persuaded that the new evidence would have affected the result.

[26] The paper ownership of the property at 361 Yonge Street was not important to the trial judge’s finding that Mr. Khan was the “controlling mind” of the fake identification card business, nor was it important to his conclusions on the tax evasion charges. Rather, the trial judge’s key findings for those convictions were that Mr. Khan ran the business, directed its employees, and controlled the bank accounts and the flow of income.

[27] In that context, to the extent that the ownership of the property was relevant to the issues at trial, the trial judge was concerned with control of the activities in the building, including who paid for the property’s expenses, rather than paper ownership of the property. Throughout his reasons, the trial judge made clear that he was aware that Mr. Khan was not shown on title as the owner of 361 Yonge Street. However, regardless of the identity of the property’s registered owner, the trial judge concluded that Mr. Khan was its “beneficial” owner. This is clear in the trial judge’s reasons, where he says: “In my view, regardless of the title register, 361 Yonge Street did not cease to belong beneficially to [Mr.] Khan until the death of his mother in 2010.” He later made this point again a number of times, for example when he stated that Mr. Khan “was the true beneficial owner of the 361 Yonge Street building, regardless of in whose name title may have been registered”, and that 361 Yonge Street was a property “whose fruits are owned and beneficially enjoyed by [Mr.] Khan, even if not registered in his name.” Moreover, this finding is consistent with the trial judge’s finding that Mr. Khan had a pattern of putting his properties and bank accounts in other people’s names, even though he ultimately controlled them.

[28] If the building was held in trust for Mr. Muellenbach by his grandmother, as the evidence obtained post-trial suggests, this would mean that Mr. Muellenbach, and not Mr. Khan, was legally the beneficial owner of the property. However, this does not affect the trial judge’s conclusion that the property was under Mr. Khan’s control. In the context of the issues at trial, whether Mr. Muellenbach was the beneficial owner of the property on paper does not affect the trial judge’s conclusions that Mr. Khan purchased the property, that he controlled the business activities at the property, including at Flash Jack’s, and that he paid for the property’s expenses.

[29] Accordingly, I reject this ground of appeal. The trial judge did not prevent Mr. Khan from reopening his case. Even if Mr. Khan had sought to reopen his case, the evidence that the property was being held in trust for Mr. Muellenbach would not have affected the result at trial.

B. The trial judge did not err in referring to Mr. Khan as the “directing mind” of the fake identification card business

[30] Mr. Khan argues that the trial judge made a legal error by finding him guilty on the basis that he was the “directing mind” of the fake identification card business. Mr. Khan argues that the trial judge thereby improperly found him guilty based on vicarious liability.

[31] I reject this ground of appeal. The trial judge did not rely on vicarious liability to find Mr. Khan guilty of the charges or forgery.

[32] In R. v. Canada Dredge and Dock, 1985 CanLII 32 (SCC), [1985] 1 S.C.R. 662, at para. 31, the Supreme Court made clear that an individual person cannot be found guilty of a crime on the basis of vicarious liability:

In the criminal law, a natural person is responsible only for those crimes in which he is the primary actor either actually or by express or implied authorization. There is no vicarious liability in the pure sense in the case of the natural person.

[33] Here, the trial judge clearly stated that he was using the term “directing mind” colloquially and that he understood that he was precluded from finding Mr. Khan guilty based on vicarious liability:

[429] “Directing mind” has a technical connotation and application in Canadian law, but is often used in a more colloquial manner. In its more technical sense, criminal liability is imputed to a corporation on the basis of the criminal conduct of one of that corporation’s “directing minds.” That doctrine has now been partially codified through the addition of ss. 22.1 and 22.2 to the Criminal Code, provisions that create corporate criminal liability for negligence and fault-based offences.

[430] More colloquially, however, and as more directly relevant here, a “directing mind” is said to be someone who formally or informally directs the activities of an organization or corporation. The person may occupy a position of authority or wield authority and influence more informally. [Emphasis added, citations omitted.]

[34] Most significantly, after reviewing these general principles, the trial judge explained that he could find Mr. Khan guilty only if he found that Mr. Khan knowingly directed others to commit the criminal conduct for his benefit:

[435] The controlling case law shows that it is open to me to find [Mr.] Khan guilty of an offence, not simply where he directly and personally acts in a manner that makes out the elements of the offence, but also where other individuals are proven to have been engaged in criminal conduct for and on his behalf and for his benefit, operating as actors under his direction and control. In such circumstances, the persons who perform the elements of the offences do not act for their own use and benefit. They act for the benefit of those who are behind the scenes, persons who manipulate their conduct as employees or agents through various means to act in the manner they direct for their own personal benefit and reward, like the puppet-master controlling the actions of the marionette. The puppet can be seen dancing, but it is sometimes harder to see who it is that is controlling and pulling the strings. [Emphasis added.]

[35] Therefore, it is evident that the trial judge instructed himself not to find Mr. Khan guilty on the basis of vicarious liability, and that he understood that he could only find Mr. Khan guilty if Mr. Khan knew about and directed the fake identification card business.

[36] Mr. Khan argues that, despite this explicit caution by the trial judge, he did in fact base his finding of guilt on indicia that Mr. Khan was the owner of Flash Jack’s rather than indicia that Mr. Khan directed and benefitted from the illegal activities of the business. I do not accept this argument. While the trial judge referred to Mr. Khan’s control of the business through such things as his hiring and firing of employees, he also referred to specific activities that implicate Mr. Khan in knowingly directing the operation of the forgery business. For example, the trial judge accepted evidence that Mr. Khan took control of the machines that made the fake identification cards soon after the business was started and that Mr. Khan ordered and took delivery of supplies required to run the business. In addition, through a careful analysis of banking evidence, the trial judge found that Mr. Khan benefitted from the business and other businesses at 361 Yonge Street, through five bank accounts held in the name of his employees and his son.

[37] In my view, Mr. Khan mischaracterizes the trial judge’s findings as relying on a theory of vicarious liability. Mr. Khan was not found guilty because the actions of his employees reflected that he was the “directing mind” of the organization in the sense of being vicariously liable for their actions. Rather, Mr. Khan was found guilty because he was directing his employees to carry out criminal activities on his behalf – criminal activities about which he had knowledge and over which he had control.

[38] Ultimately, it may have been preferable for the trial judge to refer to Mr. Khan’s role in the forgery business as a “principal” rather than as a “directing mind”. However, I see no legal error in his use of the term “directing mind”, given his factual findings that Mr. Khan knew about the forgery business, directly controlled its operation and benefitted from the business.

C. The trial judge made no error in his application of the co-conspirators’ exception to the hearsay rule

[39] Mr. Khan submits that the trial judge erred in his application of the co-conspirators’ exception to the hearsay rule.

[40] The co-conspirators’ exception to the hearsay rule permits the trier of fact to rely on the acts and statements made by an accused’s co-conspirators in determining the guilt of the accused: see R. v. Mapara, 2005 SCC 23, [2005] 1 S.C.R. 358, at para. 8. In R. v. Carter, 1982 CanLII 35 (SCC), [1982] 1 S.C.R. 938, at p. 947, the Supreme Court of Canada outlined a three-part test for determining whether statements made by co-conspirators are admissible against an accused. This court, in R. v. McGean, 2019 ONCA 604, at para. 6, summarized that test as follows:

First, the trier of fact must find beyond a reasonable doubt on all the evidence that the conspiracy exists. Second, the trier of fact must find that the evidence that is directly admissible against the accused, which excludes hearsay statements by co-conspirators, proves, on a balance of probabilities, that the accused was a member of that conspiracy. Only if these first two stages are met can the trier of fact, at the third stage, consider the acts and declarations of a co-conspirator in furtherance of the conspiracy as evidence against the accused on the issue of the accused’s guilt. [Emphasis added.]

[41] Mr. Khan submits that the trial judge misapplied the second branch of the test. He argues that the trial judge impermissibly relied on hearsay statements by alleged co-conspirators in determining that Mr. Khan was a member of the conspiracy. I would not give effect to this argument. While the trial judge could have been more careful in wording and compartmentalizing his reasoning and findings on each stage of the test, it is evident that he found that Mr. Khan was a member of the conspiracy without relying on impermissible hearsay or indirect evidence.

[42] In his reasons, the trial judge found the existence of a conspiracy based on the evidence of witnesses who purchased fake identification cards at Flash Jack’s and evidence from witnesses who worked at the business and provided equipment and supplies to the business. On this basis, the trial judge found that the first part of the test for the application of the co-conspirators’ exception to the hearsay rule was met.

[43] Having found the existence of a conspiracy, the trial judge did not explicitly go on to discuss and apply the second stage of the test for the purpose of assessing whether there is direct evidence admissible against Mr. Khan to support a finding that he was a member of the conspiracy. However, it is evident from the whole section of the reasons dealing with the co-conspirators’ exception to the hearsay rule that the trial judge was aware of the test to be applied and that he found that Mr. Khan was a member of the conspiracy on the basis of admissible evidence.

[44] In determining whether Mr. Khan was a member of the conspiracy, the trial judge was only entitled to rely on independent evidence which was directly admissible against Mr. Khan: Mapara, at para. 8. It is evident from the trial judge’s reasons that he was aware that he could only rely on direct evidence that did not include the hearsay evidence of co-conspirators. He reiterated this principle at least three times in the relevant section of his reasons:

[I]f I conclude that [Mr. Khan] was not part of that common unlawful design based on his own acts or utterances, then that would preclude me from considering that hearsay evidence relative to him.

More importantly, even if I am satisfied of the existence of that common unlawful purpose to the criminal standard, the acts and declarations and utterances of the Flash Jack sales staff would become admissible for their truth as against [Mr.] Khan, only if I am satisfied that [Mr.] Khan was probably a member of or a participant in that common unlawful design on the basis of his own acts and declarations.

That common unlawful design included [Mr.] Khan based on his own actions[.] [Italics in original; underlining added, citations omitted.]

[45] In addition, the trial judge identified which of Mr. Khan’s own words and actions suggested that he was a member of the conspiracy, stating: “Each of these persons played a role in the Flash Jack business, whether it was Khan paying the employees and observing the business operations and providing a place where the business could be carried on and dealing with the suppliers” (emphasis added). This evidence was directly admissible against Mr. Khan and supported a finding that he played a role in the conspiracy.

[46] In making his argument that the trial judge misapplied the second stage of the test, Mr. Khan points to the following paragraph towards the end of the section dealing with the co-conspirators’ exception to the hearsay rule:

I have found that all of those persons were involved participants in the common unlawful purpose of producing false ID cards. They are all part of the common unlawful purpose, but equally, as I have noted, I am satisfied beyond a reasonable doubt of [Mr.] Khan’s membership in that common unlawful purpose based on the whole of the evidence, and in particular his own words and actions as proven by:

(i) the testimony of Hamade, Pardal, and Oktem that everything done at 361 Yonge Street and at Flash Jack’s was done under the direction and control of Mohammad Khan, as explained below;

(ii) Yannick’s evidence that acknowledged that the ID card business was being carried on at Flash Jack’s;

(iii) the evidence that regardless of alleged legal title holders, the 361 Yonge St. building where the false ID card business was conducted belonged to Khan at all material times;

(iv) the evidence of Cal Krause, and to a lesser extent Howard Shuster, independent third parties, whose evidence shows that the ID card was being operated by Flash Jack’s under Mohammad Khan’s direction;

(v) Krause’s evidence that he actually attended Flash Jack’s and spoke with Khan about “his” machines. [Emphasis added.]

[47] Mr. Khan argues that this paragraph makes clear that the trial judge misapplied the second part of the test because it appears that he relied on the “whole of the evidence” to determine that Mr. Khan was a member of the conspiracy and because the items in the list cannot all be characterized as direct evidence against Mr. Khan.

[48] However, as reviewed above, this paragraph comes after the trial judge has already explained that he can only rely on evidence directly attributable to Mr. Khan to find that he was a member of the conspiracy. In addition, the trial judge had already referred to the direct words and actions that satisfied him that Mr. Khan was a member of the conspiracy. Accordingly, I agree with the Crown that, while not clearly articulated, the paragraph Mr. Khan takes issue with is the trial judge’s application of the third stage of the co-conspirators’ exception to the hearsay rule test. In other words, in this paragraph, the trial judge is setting out the direct and indirect evidence that prove Mr. Khan’s participation in the fake identification business.

[49] I am satisfied that the trial judge did not err in his application of the co-conspirators’ exception to the hearsay rule. While his reasons could have been clearer in the application of the rule, reading his reasons as a whole, it is evident that he understood the requirements of the rule and that he identified the direct evidence that Mr. Khan participated in the conspiracy. This was sufficient for the trial judge to proceed to the third stage and consider the acts and statements of the other members of the conspiracy as evidence against Mr. Khan. The application of the co-conspirators’ exception was particularly pertinent here because Mr. Khan did not directly fabricate the false identification cards and actively avoided being linked to the business by placing the title to 361 Yonge Street and the bank accounts used to run the business in other people’s names. The trial judge committed no legal errors in his application of the rule.

D. The trial judge made no error in his use of the affidavit evidence

[50] Mr. Khan argues that the trial judge improperly relied on evidence contained in affidavits of witnesses who did not testify at trial. However, while the trial judge described the affidavits and referred to them in his reasons, it is evident that they did not form the basis for his findings of guilt against Mr. Khan.

[51] In addressing this issue, it is necessary to review the context in which the affidavits became part of the trial record. As part of his defence, Mr. Khan relied on the evidence of a forensic accountant, Ken Froese, who provided an expert report opining that Mr. Khan did not derive any profit from the businesses at 361 Yonge Street. In his report, Mr. Froese referred to the affidavit evidence of Jacob Feig, Zamfir Qureshi, Mohammad Ansar and Archie Tantalo, who the trial judge described as “associates” of Mr. Khan. None of these affiants testified at trial. In Mr. Feig’s case, the Crown had expected to call him as a witness at trial. He had originally been charged in the indictment, but the Crown agreed to drop the charges against him in exchange for his evidence at trial. However, Mr. Feig left the country and did not appear as a witness at trial.

[52] When Mr. Froese started testifying, an issue arose as to whether the affidavits at issue formed the evidentiary foundation for his opinion and, if so, whether his opinion was reliable. It was in this context that the affidavits were made part of the trial record at the trial judge’s request.

[53] The trial judge’s reasons contain a section titled “Affidavit evidence of the absent witnesses”, in which he describes the contents of the affidavits. This section addresses consistencies and inconsistencies between the affidavits and other evidence at trial. The trial judge also referred to the affidavits on a few occasions in other portions of his reasons.

[54] In the section of the reasons directly addressing the affidavits, the trial judge stated several times that he did not and could not admit any evidence in the affidavits for the truth of their contents. He was simply attempting to understand whether Mr. Froese’s opinion was based on reliable evidence. Having considered the affidavits that formed the basis of Mr. Froese’s opinion, the trial judge ultimately concluded that he “had difficulty with the reliability of [Mr. Froese’s] position in this case.”

[55] In support of his argument that the trial judge improperly relied on the affidavits, Mr. Khan points to a few instances where the trial judge referred to the affidavits in contexts other than his discussion of the reliability of Mr. Froese’s evidence. In my view, it was not necessary or even desirable for the trial judge to discuss the affidavits other than for the purpose of addressing the reliability of Mr. Froese’s opinion. However, it is evident from a review of the instances where this occurred that the trial judge was not relying on the evidence in the affidavits for the truth of their contents. Rather, he was speculating about the additional evidence that may have been available if the affidavits had been admissible.

[56] For example, in discussing the evidence from Ratnam Somasunderam, a defence witness, the trial judge noted that the witness’s evidence was unreliable and that the defence appeared to call him as a substitute for evidence that Mr. Feig would have provided about paying rent to Mr. Khan’s mother. Presumably, this would have been evidence that Ms. Khan was the true owner of 361 Yonge Street. In that context, the trial judge noted Mr. Feig’s absence as a witness and referred to his affidavit, stating that “[w]hile that evidence is not acceptable for the truth of its contents, it does serve the purpose of showing the factual and evidential contradictions with which Feig would have been confronted had he returned to testify as he promised”. This speculation, while unfortunate given that it referred to inadmissible evidence, nevertheless obviously played no role in the ultimate conclusions reached by the trial judge.

[57] There are a handful of other circumstances where the trial judge refers to the affidavits to speculate about additional evidence that may have been available if the affiants had testified at trial. However, the trial judge always acknowledges that the evidence at issue is inadmissible and, more significantly, does not rely on the affidavits for the purpose of making any findings of fact against Mr. Khan.

[58] The trial judge’s primary purpose in discussing the affidavit evidence was to assess the reliability of Mr. Froese’s opinion. This was necessary and appropriate. The trial judge also occasionally referred to the affidavits to speculate about evidence that was not available at trial. This may have been an unnecessary distraction from the evidence admissible against Mr. Khan, but it was not an error in principle. The trial judge consistently and cautiously instructed himself about the limitations of the affidavits filed with the court. I am satisfied that, consistent with his self-instruction, the trial judge did not actually rely on the affidavits in making any finding of fact. As a result, I would not give effect to this ground of appeal.

E. The trial judge did not scrutinize the evidence unevenly

[59] Mr. Khan submits that the trial judge erred in law by applying a differential standard in his assessment of the witnesses for the Crown and for the defence. He says that the trial judge was unjustifiably far more critical of the defence witnesses than the Crown witnesses. I reject this ground of appeal.

[60] As this court has held, it is difficult to succeed on appeal based on an argument that a trial judge conducted an uneven scrutiny of the evidence: see R. v. Radcliffe, 2017 ONCA 176, 347 C.C.C. (3d) 3, at paras. 23-26, leave to appeal refused, [2017] S.C.C.A. No. 274. In fact, in R. v. G.F., 2021 SCC 20, 459 D.L.R. (4th) 375, at para. 99, the Supreme Court expressed skepticism over whether “uneven scrutiny” on its own is a valid ground of appeal. In any event, in Radcliffe, at para. 23, this court explained that uneven scrutiny is hard to make out because a trial judge’s assessment of credibility is entitled to significant deference and it is not the role of this court to re-assess the witnesses’ credibility. In order to succeed on this argument, “the appellant must point to something, whether in the reasons of the trial judge or elsewhere in the trial record, that makes it clear that the trial judge actually applied different standards of scrutiny in assessing the evidence”: Radcliffe, at para. 25, referring to R. v. Howe (2005), 2005 CanLII 253 (ON CA), 192 C.C.C. (3d) 480 (Ont. C.A.), at para. 59, and R. v. George, 2016 ONCA 464, 349 O.A.C. 347, at para. 36, leave to appeal refused, [2016] S.C.C.A. No. 377.

[61] In this case, the trial judge conducted a detailed review of each witness’s evidence and, in that context, assessed their credibility and explained his rationale for the assessment. I do not accept that his assessment of the witnesses’ credibility was uneven depending on whether they testified for the Crown or the defence. With respect to all witnesses, he considered inconsistencies and improbabilities in the witnesses’ evidence. He considered the witnesses’ potential motivations for lying, such as animus toward Mr. Khan. He also paid attention to their demeanour, and, in particular, whether they seemed to be influenced by Mr. Khan’s presence when providing their evidence.

[62] For the purposes of these reasons, it is not necessary to address all the examples Mr. Khan provides in support of his argument of uneven scrutiny. The examples must be looked at from a broader perspective and, specifically, with a view to considering how the trial judge approached the evidence as a whole. From that perspective, it is evident that the trial judge approached the evidence fairly and with an even hand. The three examples below make this point.

[63] As a first example, Mr. Khan argues that the trial judge was overly critical of Mr. Muellenbach’s evidence. Mr. Muellenbach testified in his own defence and gave evidence that was meant to support his father’s defence. However, the suggestion that the trial judge unduly scrutinized Mr. Muellenbach’s evidence is contradicted by the fact that Mr. Muellenbach was acquitted of all charges. Although the trial judge did not believe much of Mr. Muellenbach’s evidence, and would therefore not have acquitted him under the first stage of the analysis pursuant to R. v. W.(D.), 1991 CanLII 93 (SCC), [1991] 1 S.C.R. 742, he acquitted Mr. Muellenbach under the second and third stages of W.(D.). On this basis, it is clear that the trial judge closely scrutinized the Crown’s evidence against Mr. Muellenbach, including his own testimony, and found that it did not meet the requisite standard of proof.

[64] As a second example, Mr. Khan also argues that the trial judge subjected his expert witness to stricter scrutiny than the Crown’s expert. I do not agree. As reviewed above, the trial judge found that Mr. Froese’s evidence was not reliable because it depended on the affidavits of witnesses who did not testify at trial. However, the trial judge also had concerns with the Crown’s forensic accounting expert, Scott McBride. The trial judge explicitly stated that he had difficulties with both experts. He did not accept the methodology Mr. McBride used to show the amount of tax Mr. Khan had not paid and he ended up using his own methodology to reach an amount that was far lower than the amount postulated by Mr. McBride. Again, this does not support a finding of uneven scrutiny.

[65] As a third example, Mr. Khan argues that the trial judge did not sufficiently scrutinize the evidence of three of the Crown’s key witnesses, namely Hade Hamade, Deepak Pardal and Abdul Hilmy. All three witnesses gave evidence that they had worked in various capacities for Mr. Khan at 361 Yonge Street, including at Flash Jack’s in the case of Mr. Hamade and Mr. Pardal. Amongst other matters, they testified about how Mr. Khan ran Flash Jack’s and his other businesses. Mr. Khan asserts that the trial judge downplayed the concerns he had regarding the evidence of each of these witnesses, especially as compared to his treatment of the defence witnesses. On the contrary, in my view, the trial judge went to great lengths to avoid doing just that. In considering the evidence of Mr. Hamade, Mr. Pardal and Mr. Hilmy, the trial judge acknowledged concerns with the credibility of their evidence and cautioned himself pursuant to Vetrovec v. The Queen, 1982 CanLII 20 (SCC), [1982] 1 S.C.R. 811, despite not being required to do so given that he was hearing the trial without a jury: see R. v. Fuller, 2021 ONCA 888, at para. 19. The trial judge emphasized the importance of finding independent confirmatory evidence in order to corroborate their evidence. Most significantly, he found that their evidence was corroborated through independent confirmatory evidence, such as the evidence of witnesses who had no motive to lie and the accounting evidence.

[66] As these three examples demonstrate, the trial judge approached his task in an even-handed manner and required the Crown to meet its burden of proof. The balanced nature of the trial judge’s approach is plainly seen in the fact that he acquitted Mr. Muellenbach of all charges – after considering his potential role as both a principal and an aider of each offence – and acquitted Mr. Khan of the charge for money laundering and one of the forgery charges. While not dispositive, it is difficult to see how the trial judge could have unevenly scrutinized the evidence while also acquitting the two accused before him of many charges on the indictment.

F. The trial judge did not reverse the burden of proof on the tax fraud charges

[67] Mr. Khan submits that the trial judge reversed the burden of proof on the tax fraud charges. He argues that the trial judge should have focused on whether the Crown met its burden of proving that the Government of Canada suffered a deprivation, which should have included determining whether the Crown had proven that Mr. Khan’s business revenues exceeded his expenses and whether there were any tax deductions that would have lowered the taxes owing. He claims that, instead, the trial judge improperly focused on Mr. Khan’s failure to keep proper records. Mr. Khan argues that this had the effect of requiring Mr. Khan to produce records showing that his expenses exceeded his revenues, thereby reversing the burden of proof.

[68] In my view, the trial judge made no such error.

[69] In the section of his decision dealing with the tax fraud, the trial judge explained that the two essential elements of fraud are dishonesty and deprivation. With respect to deprivation, relying on R. v. Olan, 1978 CanLII 9 (SCC), [1978] 2 S.C.R. 1175, at p. 1182, the trial judge correctly stated: “It is enough to show that the victim sustained detriment, prejudice or risk of prejudice or deprivation to their economic interests.” He also correctly observed that, where quantifying the alleged tax loss is difficult, “the mere creation of a financial risk to another by dishonesty constitutes the offence of fraud.”

[70] As found by the trial judge, up to 2009, Mr. Khan had never filed any income tax returns. In 2009, he filed income tax returns for the years 2000 to 2009. He only did so after the execution of the first of several search warrants that led to the charges against him. In those returns, Mr. Khan declared business income of no more than $30,000 for each year, with $433.55 as the highest amount of taxes owed for any of the years in that time period. The trial judge found that Mr. Khan’s voluntary tax returns were inaccurate and dishonest, in part because they showed no amounts attributable to the Flash Jack business.

[71] At trial, in defence of the tax fraud charges, Mr. Khan argued that the Crown failed to prove a deprivation because he may have been entitled to various deductions that would have resulted in no taxes being owed. The trial judge described this argument as follows:

In this case, however, not only did [Mr.] Khan not file tax returns until he did so under the alleged voluntary disclosure, but then when he did finally do so, he plainly filed false returns that failed to include the income amounts that I have found were properly attributable to him during the taxation years in question that coincide with the period set out in the indictment. Nevertheless[, as] a “taxpayer”, he now claims that he actually did have some deductions at the time which he says he could have claimed, but for whatever reason, for reasons unknown, he chose not to claim at the time, and that he cannot be convicted because of that lacuna.

[72] The trial judge rejected this argument on the basis that, in the circumstances of this case, the Crown should not be required to take account of possible deductions that cannot be proven because of an absence of records within Mr. Khan’s control:

Here, the inability to know what legitimate business expenses may have been incurred by [Mr.] Khan in earning the significant amounts of unreported income that are attributed to him in the forensic evidence advanced by the Crown is entirely the product of his own failure to keep books and records, and to file returns as discussed further below. In these circumstances, the defence position is unsupportable. It cannot be a correct proposition of law that where dishonest conduct is present, and there is plain risk of deprivation, that a tax fraud cannot be proven because of the absence of the Crown to take account of financial information and evidence that was entirely within the control of and producible by the accused. [Emphasis added.]

[73] The trial judge further found that it “defies common sense” that the court should consider potential deductions for income that Mr. Khan purposefully failed to declare in his 2009 filings:

[I]t cannot be legally or factually correct in 2015 to acknowledge that the taxpayer should have declared amounts of income in each of the indictment period taxation years, but now claim no dishonest conduct or risk of deprivation was present because he claims he could have claimed certain deductions that might, if allowed, have reduced his taxable income, and therefore claim he did not commit a fraud during the material time.

[74] The trial judge correctly rejected Mr. Khan’s arguments that it was up to the Crown to show that he did not have legitimate business expenses or deductions that would have the effect of eliminating any taxes owing on the undeclared business income. The trial judge’s approach to this argument was consistent with the decision in R. v. Hunter, 2008 ONCA 103, [2008] 3 C.T.C. 248, at para. 4, where this court stated that “the burden of proof remains on the Crown,” but that “the taxpayer is required to keep proper books and records.” In the absence of such records, there was no evidence contradicting the evidence on which the trial judge did rely.

[75] In my view, the trial judge did not reverse the burden of proof. Mr. Khan was under no duty to disclose any documents to support his defence. I do not read the trial judge’s comments on the incomplete nature of Mr. Khan’s tax file as imposing such a duty on him. Reviewing the available documents, including the evidence on which both experts relied, the trial judge concluded that Mr. Khan owed at least $100,000 in unpaid taxes. Notably, in finding that Mr. Khan’s dishonesty deprived the Canadian Government of this amount, the trial judge significantly discounted the revenues and expenses estimated by the Crown’s expert witness, which had the effect of markedly reducing the amount of taxes the Crown’s expert claimed Mr. Khan owed.

[76] The trial judge made no errors in his legal analysis of the fraud charge, and his findings on the issue were supported by the evidence at trial.

G. The trial judge adequately addressed the issue of trial fairness

[77] Mr. Khan’s final argument is that the trial was unfair due to delay in laying the charges. He says that the effect of the delay was to prevent the preservation of evidence from Ms. Khan, who died in February 2010. This was eight months after the execution of the first search warrant, and over one year before the forgery charges were laid in 2011 and over two years before the tax fraud charges were laid in 2012.

[78] This argument was rejected by Code J., who heard several pre-trial applications, including an application to stay the charges based on delay: see R. v. Khan, 2014 ONSC 5664. Prior to trial, the parties had “agreed to be bound by [the application judge’s] rulings, … absent some material change in circumstances that would be sufficient to justify a re-opening or re-argument of any one of the motions.” The argument of delay was nevertheless reargued before the trial judge as a post-trial motion. The trial judge dismissed the motion, finding that Mr. Khan had not demonstrated prejudice arising from the alleged delay or that there was any trial unfairness.

[79] I agree with the conclusion of the application judge and the trial judge.

[80] Pre-charge delay engages ss. 7 and 11(d) of the Canadian Charter of Rights and Freedoms: see Mills v. The Queen, 1986 CanLII 17 (SCC), [1986] 1 S.C.R. 863, at p. 944. However, a lengthy pre-charge delay does not necessarily affect the fairness of a trial. To establish a Charter breach attributable to pre-charge delay, Mr. Khan was required to show that the state’s conduct, namely the delay in laying charges, caused him actual prejudice: see R. v. Bradford (2001), 2001 CanLII 24101 (ON CA), 52 O.R. (3d) 257 (C.A.) at para. 7, leave to appeal refused, [2001] S.C.C.A. No. 131, referring to R. v. Mills, 1999 CanLII 637 (SCC), [1999] 3 S.C.R. 668, at para. 75; R. v. La, 1997 CanLII 309 (SCC), [1997] 2 S.C.R. 680 at paras. 24‑25. In addition, a fair trial is not the same as the most advantageous trial: see R. v. J.J., 2022 SCC 28, at para. 125, citing R. v. Goldfinch, 2019 SCC 38, [2019] 3 S.C.R. 3, at para. 30, and R. v. Quesnelle, 2014 SCC 46, [2014] 2 S.C.R. 390, at para. 64. In considering whether lost evidence has affected trial fairness, the court can look at the availability of evidence from other sources: see R. v. Maslanka, 2011 ONSC 1668, 237 C.R.R. (2d) 237, at para. 75, aff’d 2012 CarswellOnt 15920 (C.A.), referring to: R. v. Sheng, 2010 ONCA 296, 254 C.C.C. (3d) 153, at para. 47; R. v. Bero (2000), 2000 CanLII 16956 (ON CA), 151 C.C.C. (3d) 545 (Ont. C.A.), at paras. 64-65; R. v. Lupien (1995), 68 Q.A.C. 253, at paras. 55-56, 61; R. v. Knox (2006), 2006 CanLII 16479 (ON CA), 80 O.R. (3d) 515 (C.A.), at para. 34; and R. v. Haug, 2008 SKCA 23, 307 Sask. R. 1, at para. 9.

[81] As stated above, Mr. Khan’s submissions on this issue focus on the unavailability of Ms. Khan’s evidence as a result of her having passed away in February 2010, eight months after the execution of the first search warrant at Flash Jack’s in June 2009.

[82] I see no error in the trial judge’s finding that the delay in laying the charges in this case did not lead to an unfair trial. As found by the trial judge, there was no evidence of negligence, bad faith or ulterior motive in carrying out the investigation – an investigation which was made more complicated given Mr. Khan’s attempts to conceal his criminal activities. Indeed, the police and the Crown obtained and executed more than 20 production orders in order to uncover the nature of the activities at 361 Yonge Street, including its associated businesses and employees. The pre-trial delay was justified in the circumstances.

[83] As to the content of Ms. Khan’s proposed evidence, the trial judge was entitled to consider “[t]he impact of lost evidence … in the context of the other evidence in the case and available to the defence”, which “includes defence counsel’s cross-examination regarding the lost evidence … and the potential for evidence from an accused himself”: Maslanka, at para. 75.

[84] As held by the trial judge, any prejudice flowing from the unavailability of Ms. Khan’s evidence was or could have been mitigated by the evidence of other witnesses. As the trial judge noted, the proposed evidence of Ms. Khan was presented in part through other witnesses as hearsay. As well, parts of her evidence could have been presented through other witnesses, such as Ms. Muellenbach, who the defence chose not to call after indicating an intention to call her as a witness.

[85] As also held by the trial judge, it is not clear what Ms. Khan’s evidence would have been and how it would have assisted Mr. Khan. Had Ms. Khan been available to testify, the defence asserted that she would have effectively exculpated the two accused and entirely inculpated herself. As stated by the trial judge, this “is little more than the product of speculative inferences and revisionist history.” Further, the trial judge considered whether these speculations about Ms. Khan’s proposed evidence would have even assisted the defence. As the trial judge noted, affidavit evidence filed during the post-trial motions tended to suggest that Ms. Khan’s rental income derived from 117 Clarke Avenue and not from 361 Yonge Street, thereby bolstering the trial judge’s conclusion that Ms. Khan was not the beneficial owner of 361 Yonge Street.

[86] I see no error in the trial judge’s finding that the absence of Ms. Khan’s evidence did not prejudice Mr. Khan’s defence and that the delay in laying charges thereby did not cause trial unfairness. The application judge and trial judge made no errors in dismissing the motion to stay the charges based on pre-charge delay.

Disposition

[87] I would dismiss the appeal.

Released: October 14, 2022 “G.T.T.”

“L. Favreau J.A.”

“I agree Gary Trotter J.A.”

“I agree B. Zarnett J.A.”

[^1]: While the trial judge makes reference to “legal” ownership here and elsewhere in the judgment, it is evident that he never meant that Mr. Khan had legal title to the property. Rather, based on the evidence, he concluded that Mr. Khan was the beneficial owner of the property.