Court File and Parties

Court of Appeal for Ontario Date: 2023-07-17 Docket: C69077

Before: Huscroft, Paciocco and Coroza JJ.A.

Between: His Majesty the King, Respondent and Gary Austin, Appellant

Counsel: Bryan Badali, for the appellant Dana Achtemichuk, for the respondent

Heard: July 12, 2023

On appeal from the convictions entered on October 13, 2020, by Justice B. Zabel of the Ontario Court of Justice.

Reasons for Decision

[1] Over a six-month period, the general manager of a manufacturing company, Efcom Ltd., drafted several fraudulent cheques together totalling more than $165,000, payable personally to the appellant, as “Gary Austin” or “G.R. Austin”. The general manager falsified the corporate accounts to disguise these payments, creating a fictitious creditor he called “G.R. Steel”.

[2] On each occasion, these fraudulent cheques were deposited into the appellant’s bank account. These deposits accounted for the bulk of the funds in that account. They also constituted all but an insignificant amount of the stolen funds, as the general manager had diverted only slightly more than $1,000 directly to himself.

[3] It was also confirmed through an agreed statement of facts that no business transactions were actually occurring between the appellant and Efcom Ltd., and no services were being provided by the appellant to the company. The records of the appellant’s bank account confirm that he benefited from the funds, but no evidence was led showing that the appellant shared any funds with the general manager, nor was evidence presented as to the appellant’s business or occupation, or of his relationship, if any, with the general manager.

[4] The appellant was convicted of fraud and theft on this evidentiary record. He argues on appeal that the trial judge erred by: (1) misapplying the principles in R. v. Villaroman, 2016 SCC 33, [2016] 1 S.C.R. 1000, in this circumstantial evidence case, and (2) by providing insufficient reasons by not explaining how he convicted the appellant in the face of the gaps in the evidence. The appellant emphasized the latter ground of appeal in oral submissions but did not abandon the former ground of appeal. We find neither ground of appeal to be persuasive, for intersecting reasons.

[5] Although the trial judge did not cite the principles in Villaroman, and although he spoke in terms of reasonable inculpatory inferences that “can be” drawn, when his reasons are read as a whole it is clear that he was satisfied, as Villaroman, at para. 30 requires, that guilt was the only reasonable inference on this record. The trial judge described the inferences of guilt not only as reasonable but also as “compelling”, saying that he accepted them, and he concluded that the inferences of innocence advanced by the appellant amounted to “impermissible speculation”. After reciting the circumstantial case, he said: “The reasonable and permissible inference to be made from this is that – and considering everything else in the evidence – is that they had an agreement to jointly benefit from this fraud” (emphasis added). The trial judge therefore applied the Villaroman standard by finding that guilt was the only reasonable inference.

[6] Although the appellant disclaimed advancing an unreasonable verdict appeal – conceding in submissions that the circumstantial case provided a path to conviction – he argued that there was no evidence supporting the trial judge’s finding that the appellant and the general manager “had an agreement to jointly benefit from this fraud.” We disagree. On this record, that inference was a reasonable one, as was the finding that the Crown proved the appellant’s guilt beyond a reasonable doubt. Circumstantial inferences are based on common sense and experience, and common sense and experience support the conclusion the trial judge arrived at. The prospect that the general manager would, without the appellant’s knowledge and participation, pilfer more than $150,000 from his employer using a false corporate name that reflects the appellant’s initials, and then put that money under the exclusive control of the appellant by making successive payments to the appellant by cheques payable in the name of a company that the appellant had no business relationship with, thereby providing most of the funds that went through the appellant’s bank account during the relevant period, would give rise to a “frivolous” and not a “reasonable” doubt. And as R. v. Lifchus, [1997] 3 S.C.R. 320, instructs at para. 39, “a reasonable doubt is not an imaginary or frivolous doubt.” Moreover, parties to a fraud tend not to participate gratuitously. The inference that there was an agreement for a joint benefit of some kind was a reasonable one on the evidence before the trial judge.

[7] To be sure, a reasonable doubt can arise from the absence of evidence or the insufficiency of proof, even where the evidence itself does not point affirmatively to a scenario that is inconsistent with guilt: Villaroman, at paras. 35,36. And there was an absence of evidence establishing a connection between the appellant and the general manager, or a particular agreement to share the proceeds of the fraud, or that the proceeds were actually shared. However, these gaps in the evidence were shortcomings in the narrative of events and not gaps in proof of the essential elements of the offence. As explained, the evidentiary record did yield a powerful inference that proved what the Crown required, namely, that the appellant was a joint participant in the fraud and theft.

[8] Relatedly, the trial judge’s conclusion that the innocent inferences that the appellant advanced were speculative was an appropriate characterization, not an unexplained or improper finding, as the appellant contends. As we have emphasized, an inference that the appellant innocently received the funds is not a reasonable one given that any such prospect would be contrary to human experience, given the evidence before the trial judge. We recognize that the prospect that the appellant was himself being defrauded is not entirely impossible but again, as Lifchus confirms at para. 39, “it is virtually impossible to prove anything to an absolute certainty” and proof beyond a reasonable doubt does not require it. We are persuaded that it would be speculative for a trier of fact, in the absence of supporting evidence, to base a reasonable doubt on a remotely possible scenario that contravenes all reasonable expectations, and that is what the appellant’s inferences of innocence amount to. The trial judge was entitled to view the appellant’s submissions through this lens, and to conclude that the unsupported exculpatory inferences offered were speculative.

[9] Finally, the trial judge’s reasons were sufficient to provide a functional understanding of the basis for conviction and to enable appellate review. Those reasons show that the trial judge based his decision on the circumstantial evidence we have described, and not on comments made by the Crown that appear to have exaggerated the actual state of the evidence. It is plain, for example, that the trial judge did not act on the Crown’s submission that there was evidence of a joint agreement between the appellant and manager, since the trial judge was clear in his decision that this finding was an “inference” that he drew based on the entire body of evidence.

[10] Ultimately, this was a short simple trial with a brief evidentiary record. The case was powerful and did not call for any more elaboration than the trial judge provided. In context, we are satisfied that the trial judge was well aware of the gaps in the evidence, that his pathway to conviction is sufficiently indicated to permit appellate review, and that the findings he made were available to him.

[11] The appeal is dismissed.

“Grant Huscroft J.A.” “David M. Paciocco J.A.” “S. Coroza J.A.”