Court File and Parties

Court File No.: Toronto Region 16-15005917 Date: 2020-10-02 Ontario Court of Justice

Between: Her Majesty the Queen

— And —

Michelle Hyde

Before: Justice Michael Block

Heard on: January 27, 28, 29, 30, 31, August 11, 2020 Reasons for Judgment released on: October 2, 2020

Counsel:

• Christopher Ponesse, for the Crown
• Gerald Logan, for the Defendant Michelle Hyde

Judgment

Block J.

Overview

[1] Michelle Hyde (Hyde) supplied bookkeeping services as a sole proprietor under the name Simply Bookkeeping (Simply). One of her clients was a small lighting design and manufacturing shop, Castor Canadensis (Castor). The Crown alleges that Hyde defrauded Castor of approximately $300,000 between August 7, 2013 and June 20, 2016.

[2] Hyde is alleged to have stolen these funds by the following two methods:

1. She wrote numerous cheques to "cash", far beyond the firm's petty cash needs and contrary to the firm's practice. Many of these cheques were mis-posted, that is recorded to Castor's general ledger as payments to the firm's suppliers, other than Simply. Many were posted to "cash". A substantial number were not posted at all. All of the funds generated by these cheques were deposited into the Simply bank account.

2. She also wrote numerous cheques to Simply. Many of these cheques were posted in the general ledger as payment to the firm's other suppliers, but, in reality, named Hyde as the payee and were deposited to her bank account. Some of these cheques were not posted at all.

[3] The Crown called three witnesses, Kei Ng (Ng), one of the firm's principles, Taisha Allen (Allen), Hyde's assistant during the latter part of her association with Castor and Steven Ackroyd (Ackroyd), the firm's accountant. Hyde took the stand in her own defense.

[4] It is uncontroversial that Hyde was the sole bookkeeper for Castor during the period referenced in the information. She alone was responsible for keeping accurate records in respect of the cheques. All of the cheques were drawn on the Castor bank account. Ng endorsed these cheques in advance and then gave them to the defendant in groups of 6-10. All of the amounts and payee information on the cheques were written by the defendant. Hyde had no signing authority.

Financial Records

[5] The alleged dishonest deprivation is captured in a compilation of financial records entered into evidence as Exhibit 11. These records are based on Castor's general ledger, Simply's bank records and records of the cancelled checks. No dispute was taken with the information recorded in Exhibit 11 and summarized below in paragraphs 6–9.

[6] The evidence establishes that between August 7, 2013 – January 27, 2014 Hyde wrote the following cheques on Castor's cheques:

• 1 cheque payable to Simply and posted to Simply totaling: $990.00
• 4 cheques payable to Simply and posted to other suppliers totaling: $2,549.50
• 3 cheques payable to Simply and not posted totaling: $1,965.40
• 4 cheques payable to cash and posted cash totaling: $5,912.04
• 21 cheques payable to cash and posted to other suppliers totaling: $27,299.60
• 3 cheques payable to cash and not posted totaling: $4,273.00

Note: There was no evidence that established where these cheques were deposited.

[7] Between January 31, 2014 – December 24, 2014:

• 3 cheques payable to Simply and posted to Simply totaling: $2,059.40
• 7 cheques payable to Simply and posted to other suppliers totaling: $6,589.50
• 1 cheque payable to cash and posted to cash totaling: $1,876.50
• 37 cheques payable to cash and posted to other suppliers totaling: $60,771.13
• 3 cheques payable to cash and not posted totaling: $4,546.30

Note: All of the above noted cheques were deposited to the Simply bank account.

[8] Between January 5, 2015 – December 24, 2015:

• 6 cheques payable to Simply and posted to Simply totaling: $5,071.75
• 11 cheques payable to Simply and posted to other suppliers totaling: $11,365.89
• 12 cheques payable to cash and posted to cash totaling: $24,400.45
• 24 cheques payable to cash and posted to other suppliers totaling: $50,713.35
• 6 cheques payable to cash and not posted totaling: $13,230.75
• 1 cheque payable to Simply and posted to Brian Richer: $2,125.00

Note: All of the above noted cheques were deposited to the Simply bank account.

[9] Between January 12, 2016 – June 20, 2016:

• 15 cheques payable to Simply totaling: $17,844.55
• 16 cheques payable to cash totaling: $39,266.75

Note: All of the above noted cheques were deposited to the Simply bank account. No cheques were posted to the general ledger for this period.

Testimony of Ng

[10] There were two partners at Castor: Mr Kei Ng (Ng) and Mr Brian Richer (Richer). Ng was the person to whom Hyde reported. There were one to two persons employed by Ng and Richer on a regular basis. Occasionally there would be a need for a third employee.

[11] Ng testified that he had met and developed a good working relationship with the defendant through prior business ventures. The evidence of the commencement of the defendant's working relationship was somewhat unclear, but it appears that Ng hired Hyde after viewing her advertisement in Kijiji in 2010.

[12] By all accounts the firm struggled financially throughout most of the period referenced in the information. In 2012 revenue was minimal. Throughout 2013 into the autumn of 2015, Ng and Richer took little or no compensation from Castor in order to keep the operation afloat. In 2013 the firm increased its revenue to $300,000. Revenue increased to $400,000 in 2014. In 2015 gross revenue rose to $600,000.

[13] The firm's finances were particularly stressed in 2014. In that year, according to Ng, the defendant volunteered to defer payment of her compensation until the firm was "in the black". That period extended from the autumn of 2014 into early 2015. There was some talk of a barter arrangement with Hyde, though it came to nothing. Ng had to borrow funds from his family because there had been an error in paying the employee deductions, a responsibility of the defendant. In the winter of 2014-2015 Hydro was cut off for lack of payment. There were difficulties with Workplace Safety and Insurance Board (WSIB) and, it would appear, the Canada Revenue Agency (CRA). In consequence, it appears that there may have been at least one CRA audit.

[14] Ng denied the suggestion made in cross-examination that there were multiple CRA and WSIB audits of the firm. He said that there was perhaps one audit caused by late filing of the firm's return. His account of the number of audits was tentative. He did not claim to have a complete recall of these events.

[15] There was no written agreement on the rate at which Hyde was to be compensated by Castor. It ultimately emerged in the evidence that the agreement with Hyde as of 2010–2011 was that she would be paid compensation of $350-500 biweekly based on a rate of $25-30/hr. Ng trusted Hyde to pay herself and other suppliers appropriate amounts with the 6-10 pre-signed cheques he provided on a regular basis. His evidence is that that amount didn't change during the course of the business connection with Hyde. He would engage a chartered accountant to prepare the firm's year-end.

[16] In cross-examination Ng was taken to Exhibit B, eventually identified by the defendant and filed as Exhibit 14, a series of 32 monthly invoices said to have been submitted by Hyde to Castor from August 10, 2013 to May 31, 2016. Ng seemed genuinely shocked and appalled by the contents of this exhibit. He stated that he did not receive any invoices from Hyde for work performed during the period referenced in the information until June 24, 2016. By this time the matters before the court were coming to light.

[17] Ng adamantly denied that there had ever been an agreement to pay Hyde the $80/hour rate she claimed in these invoices. Ng testified that a rate of $80/hour was never even discussed, let alone agreed upon. It would have been well beyond what the firm could afford. He also testified that the billable claimed in these invoices, a range of 82 to 102 hours per month, were well in excess of the necessary bookkeeping requirements for this small firm. If hours of that magnitude had been required for bookkeeping at the firm, he testified, a full-time bookkeeper would have been hired.

[18] Ng also testified that, in addition to paying herself for hours vastly in excess of what was actually worked and authorized, Hyde paid herself for services that had not been contemplated by the firm, such as travel between her home in Mississauga and the firm's location in west-end Toronto to collect materials and chat briefly on bookkeeping related issues.

[19] Ng testified that their informal agreement was that when Hyde worked extra hours she would ask and receive additional compensation. He disagreed with the suggestion that Hyde was a very busy bookkeeper. He testified that he currently pays a bookkeeper $300-400 biweekly and the firm was busier at the time of trial than at the time of Hyde's association with it.

[20] It was suggested to Ng in cross-examination that he authorized the payment of Hyde's compensation by way of payments to cash in order to conceal the firm's disorganization and the inordinate use of bookkeeping resources from the investors. Ng emphatically denied this suggestion. He told the court that cheques to "cash" were intended to be infrequent and never authorized above $500. Ng told the court that the firm's financial difficulties were the reason why Hyde was asked to accept deferred compensation in 2014 and why a barter agreement was suggested, if not acted on.

[21] A discussion in the spring of 2016 regarding repayment of some of the initial investment loan initiated a review of the Castor's finances by Ackroyd. He found a number of irregularities. The bank records, cancelled cheques written on the firm's account and the general ledger were subjected to thorough analysis. The alleged thefts came to light.

[22] Ng testified that Hyde became uncooperative when asked in June 2016 to supply documents to assist in determining the source of the financial irregularities.

[23] It is a sad fact that Mr Ng, whatever his virtues as a creative entrepreneur, was inattentive when it came to the specifics of the firm's financial arrangements. It is clear that, over the years, he made few inquiries into Hyde's performance. The lack of a written agreement concerning Hyde's compensation is but one aspect of the casual and amateur quality of the proprietors' attention to the financial administration of Castor. Ng's occasionally spotty memory of specific details of the firm's financial arrangements was symptomatic of this disinterest.

[24] I found Ng to be a credible witness, whatever his deficiencies as a proprietor. He appeared to respond to cross-examination in a candid manner. He made no effort to obscure the small firm's frequent financial distress, particularly in 2014-2015, when the lack of funds obliged him to burn wooden pallets in the woodstove to provide heat in the winter and borrow funds from his family. In his testimony in respect of Exhibit 11, he was careful to indicate where specific cheques deposited to Hyde's account were within the range of her contemplated renumeration, even when they were written to cash. He indicated 19 instances in which cheques were within the contemplated range. As a result, those cheques were not included in the allegedly fraudulent transactions enumerated in paragraphs 6-9 of this judgment.

[25] It was clear that Ng liked and trusted Hyde. He was slow to suspect her of wrongdoing and displayed great anxiety and panic when he couldn't reconcile his trust in Hyde with the situation he came to know in June 2016. He also made no effort to hide the financial chaos from his investors. It was his effort to repay the investors in the spring of 2016 that initiated Mr Ackroyd's investigation into the firm's financial discrepancies and eventually led to this prosecution. As we shall see, Ackroyd corroborated his account in multiple important respects.

Testimony of Ackroyd

[26] Steven Ackroyd qualified as a chartered accountant in 2006. He met the defendant in 2014 at a business function. At that time, he had just left a larger accounting firm and set up his own accounting practice. Hyde connected him with 50 to 60 of her own clients, referrals which enabled him to rapidly succeed in building his own firm. He and Hyde enjoyed a good friendship. She referred him Castor in 2015.

[27] The amicable relationship between Ackroyd and Hyde had one notable controversy. Ackroyd testified that in 2015 Hyde reproached him for not reciprocating her generosity by referring her any clients. Ackroyd responded by telling Hyde that his clients required a bookkeeper with more sophisticated skills. According to Ackroyd, Hyde didn't hold herself out as a high-end bookkeeper. Her skill set was very basic and that there were aspects of her work she couldn't independently execute. He described her work as sloppy. Ackroyd's assessment was that these shortcomings were the result of gaps in her training and the absence of mentorship. She asked what she could do to make up for these deficiencies. Ackroyd offered to train Hyde in the skills necessary to acquire more lucrative work.

[28] Ackroyd said that in his experience a high-end bookkeeper could bill $80-85/hr. From his discussions with Hyde and his knowledge of her billing practices with mutual clients other than Castor, Ackroyd knew that she billed herself out at $25-30/hr. He felt that was an appropriate rate for her clientele, including Castor.

[29] In examination in chief, Ackroyd reviewed Castor's general ledger, the cheques cashed into Simply Bookkeeping (Exhibit 5), the Simply bank records (Exhibit 13) and the Castor bank records (Exhibit 4) and the compilation of records relevant to this case eventually admitted on consent as Exhibit 11. The conclusions Ackroyd derived from this evidence are contained in the foregoing paragraphs. No issue was taken with the accuracy of this evidence, either in the cross-examination of Ackroyd or in the evidence given by Hyde. In his written submission at the close of the evidence, counsel for the defendant took no issue with Ackroyd's findings.

[30] Ackroyd stated that, in his review of the general ledger from 2014 and 2015 there were no open invoices payable to Simply. He would have expected to find open invoices if invoices had been submitted but unpaid. He was not cross-examined on this issue. Based on numerous discussions with Hyde, Ackroyd believed that Castor had not paid her in 2014-2015. Ackroyd recalled an occasion when he was puzzled by a remark by Hyde in a conversation during this period. Hyde expressed satisfaction that she could ensure herself payment by a client simply by writing herself a cheque before she left. He did not experience significant issues in having Castor pay his invoices.

[31] In the course of his testimony regarding his review of Castor's financial records Ackroyd stated that had he seen any invoices from Simply in the $8,000 to $10,000 range he would have called Hyde to ask to how many years the invoices related. Barring an extraordinary event, an invoice of $9000 would have referred to something other than bookkeeping.

[32] When referred to the many instances where Hyde had written Simply or "cash" as the payee on a cheque but posted the cheque to another supplier of Castor in the general ledger, Ackroyd testified that he had never seen Hyde make those errors in respect of any of their other mutual clients. Nor had he seen any similar mis-posting errors in Castor records with respect to any payee other than Simply or "cash".

[33] As we know, Ng asked for Ackroyd's assistance in June 2016 with a view to repaying part of his investor's loan. In his examination of Castor's books, Ackroyd had a number of conversations with Hyde regarding the anomalies discovered. There was a line of credit discrepancy that Hyde could not explain. She repeated suggestions she had made to Ackroyd in previous years, that she thought the two principals, Ng and Brian Richer, had been siphoning funds from the line of credit into their personal accounts.

[34] In the course of his investigations Ackroyd asked the defendant for relevant records not in his possession. Hyde was not forthcoming. These documents were ultimately obtained by other means. After sending Ackroyd and Ng a series of disagreeable messages, the defendant cut off contact with them in an email dated June 23, 2016 and filed as Exhibit 3.

Ackroyd's Opinion Evidence

[35] Much of Ackroyd's testimony explained the financial documents submitted in evidence. He also commented on the expectations he had as he reviewed Castor's records, based on his working knowledge of bookkeeping practices. By way of example, Ackroyd testified that he would expect to find open invoices in the records if invoices that had been submitted had been unpaid. In my view, this evidence is similar in nature to the evidence challenged in R. v. Ajise, 2018 ONCA 494. In respect of this portion of his evidence, Ackroyd was a factual witness who explained and summarized the large amount of documentation before the court and gave unchallenged observations about aspects of his work. His testimony greatly assisted the court by focusing on the 163 transactions of importance compiled in Exhibit 11. The defendant took no issue with the accuracy of the documents or Ackroyd's explanation of them.

[36] Much of Ackroyd's testimony on the compensation Hyde could command as a bookkeeper and her skill set was contained in his account of the discussion with the defendant regarding the lack of reciprocal referrals. Implicit in this narrative is an admission by Hyde that her skills were basic. Ackroyd's account of this discussion was also unchallenged. This evidence and Ackroyd's knowledge of the amount she billed other mutual clients are factual accounts, not expert opinion analysis.

[37] In response to questions by both Crown and defence counsel, Ackroyd also gave his personal estimation of Hyde's modest qualifications as a bookkeeper and his view of the compensation she could reasonably demand for her services. His evidence corroborated Ng's account on the hourly rate issue. As well, he offered his own observation that the magnitude of the fees claimed by Hyde on a monthly basis in Exhibit 14, would be more appropriate on a yearly basis. Ackroyd was clearly relating his experience of 14 years as a chartered accountant in relation to bookkeeper's compensation issues.

[38] Experienced defence counsel objected to none of this evidence. In fact, Ackroyd's opinion of Hyde's competence and basic skill level was sought by defence counsel, clearly to further the contention that much of Hyde's conduct was the product of incompetence, not larcenous intent.

[39] In my view Ackroyd's assessment regarding Hyde's skill level, competence and reasonably expected compensation may be the kind of knowledge gained by a senior clerical worker in the course of years of bookkeeping or managerial employment. It may also be knowledge acquired by an accountant through their professional training and in the course of supervising bookkeepers and insuring that their practices conform to an acceptable standard. This opinion evidence may well have warranted a voir dire to determine its admissibility. As one was not conducted in the course of the trial it falls to this court to conduct an analysis of Ackroyd's qualification at this stage to determine the admissibility of this evidence.

[40] The issue of expert opinion evidence arose in this matter at an early stage when Crown counsel tendered Exhibit 11. I engaged both counsel in a discussion concerning the admissibility of this most useful compilation, one clearly made in contemplation of litigation. In the course of this discussion Crown counsel indicated he did not propose to have the Court qualify Mr Ackroyd as an expert witness. This was consistent with the responsible approach of both counsel, who sought to focus the trial on the central issues in dispute. The opinion evidence I now address arose in a natural and uncontroversial manner as the testimony of Ackroyd on his discussions with Hyde and his observations of Castor's records progressed.

[41] Unexpected developments are an inescapable phenomenon of the trial experience. My concern regarding the expert opinion nature of some of this evidence was the product of my own review of the transcript of the evidence and counsel's written submissions, not a conclusion to which I leapt as I heard the testimony. Although it would have made for a more efficient trial process had a voir dire been conducted before the opinion evidence emerged, I cannot fault counsel for the manner in which this evidence emerged.

[42] At the Court's request, oral submissions were made in respect of Ackroyd's opinion evidence following the submission of written argument at the conclusion of the evidence at trial. Both counsel asked that certain portions of Mr Ackroyd's testimony be excised. Though made in a professional spirit, I cannot give effect to these submissions. The evidence in question was elicited by both sides, taken and recorded with its admissibility unchallenged. The Court cannot "unhear" evidence so received unless a belated analysis concludes that that the witness was not properly qualified to give the opinion. Both counsel declined to have Ackroyd recalled for examination on his capacity to give the evidence in question. In these circumstances, the required admissibility analysis must be based on the evidence already given at trial.

[43] I am required to consider the structure laid down in Abbey, 2009 ONCA 624 and White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23.

[44] The first issue is whether the determination of Hyde's skill level and appropriate compensation for her services requires expert opinion evidence. In my view, profound workplace familiarity with bookkeeping in a series of small business settings and with bookkeepers of varying ability and training is required to give this opinion. I do not accept that a trier of fact could assess these issues without expert opinion assistance.

[47] The second issue is whether Ackroyd had the qualifications to give the opinion sought. This witness qualified as a chartered accountant in 2006. The uncontradicted evidence that he shared 50-60 small business clients with Hyde and that he was familiar with the compensation those clients paid to their bookkeepers. It was clear from his evidence that he was used to evaluating the relative capacities of bookkeepers and the compensation the different levels of bookkeeper could command. An accountant is defined as: "someone who keeps or examines the records of money received, paid and owed by a company or person" in the current online edition of Cambridge English Dictionary. It is clear that Ackroyd exercised a supervisory function in respect of the defendant on the occasions that he was retained by Castor to do so. In my view Ackroyd had a very substantial ability to assist the court with opinion evidence both by way of professional training and workplace familiarity.

[45] Third, I can think of no exclusionary rule which might apply to this case.

[46] Fourthly, the opinion evidence under examination is logically probative to the issues at trial. As previously stated, the defendant sought the evidence in order to reinforce her claim that the discrepancies in Castor's records were due to her limited competence. The crown obviously sought the evidence to undermine Hyde's claim that payment at a rate of $80-85/hour and approximately $100,000 per year was contemplated by Ng.

[47] In White Burgess, the Supreme Court took the analysis in Abbey and embedded the court's gatekeeper function in the admissibility criteria for the admission of expert evidence. In the case before this court, the impartiality and independence of the witness must be subject to scrutiny.

[48] As we know, Ackroyd is certified chartered accountant. His evidence indicates that he had a fiduciary duty to his clients and a duty to report malfeasance to his professional body. He testified that he reported the alleged misconduct to both that professional body and the clients he shared with Hyde. After he did so, the defendant brought a complaint to the professional body and a civil suit for defamation against Ackroyd. As a result, he likely has a professional and financial stake in the outcome of this trial.

[49] Neither the existence of a potential interest in the outcome of the trial nor evidence that Ackroyd played a role in bringing the alleged frauds to Ng's attention demand that he be excluded as a potential source of expert opinion evidence. Those facts do demand that his impartiality and independence be subjected to heightened judicial scrutiny.

[50] An examination of the evidentiary record does not reveal a shred of any preexisting animus toward Hyde on the part of Ackroyd. Quite the contrary, it was clear Hyde and Ackroyd enjoyed a friendship. Ackroyd frankly disclosed Hyde's pivotal role in jumpstarting Ackroyd's practice after he left a larger firm and set up his own firm. He clearly felt he owed Hyde a debt of gratitude for her many referrals to him. His disclosure of the alleged thefts from Castor by Hyde obviously cut her off as a future source of referrals.

[51] Ackroyd was not cross-examined on the issue of bias or animus. It was not suggested to him that he had any reason to deflect misconduct toward Hyde. No mention of oblique motive or sinister involvement on his part was made in counsel's closing submissions. His credibility was unchallenged. He responded to cross-examination fully and frankly.

[52] There was very little examination of Ackroyd regarding the way his initial review of Castor's financial situation in June 2016 developed into a suspicion of Hyde's malfeasance. As the expert evidence issue developed unexpectedly it is not at all surprising that this area was not pursued. It was clear from his evidence that Ackroyd commenced his review not because of any suspicion directed at Hyde or anyone else but because the proprietors wanted to determine whether they could pay back some of the original loan to their investors. Anomalies were discovered in the process. I infer that as the review of these issues progressed the inordinate number of cheques made to cash were discovered and questions were asked of Hyde. From there a series of methodical steps were taken until suspicion focused on Hyde's activity. Hyde became uncooperative and the matter came to the attention of the police.

[53] There is no evidence that Ackroyd involved himself in the prosecution after June 2016 except in his role as a witness. There is no evidence he had any role in guiding the investigation once the police became involved. There is no evidence that he advised the Crown at any point in the prosecution. There is nothing to suggest that he stepped out of his role as a witness and became a partisan. Indeed, during his testimony he took pains not to step outside the bounds of the questions to give responses that gratuitously inculpated Hyde. Ackroyd demonstrated understanding that he owed a duty of fairness and impartiality to the court.

[54] As a result of the consideration of the above noted factors I conclude on a balance of probabilities that Ackroyd gave independent, impartial and unbiased expert opinion evidence. In this result I am guided by the decision of Justice T. Lipson in R. v. Livingston and Miller, 2017 ONCJ 645.

[55] I conclude that Ackroyd was a careful and credible witness. I find his opinion evidence to be reliable and impartial. I would have admitted it had the evidence relevant to admission of his expert opinion been presented to the court in the course of the usual voir dire. I accept Ackroyd's evidence in respect of his professional opinion on the compensation issue and bookkeeping practice, his evidence of the discussions with the defendant and his evidence of his observations of Castors' records.

Evidence of Allen

[56] Brief evidence was given by Hyde's assistant of events in the latter part of her association with Castor. Her evidence was of very limited value. It was clear that she made no serious decisions, took no independent action and that any knowledge she may have had regarding any of Hyde's business with Castor came directly from the defendant. She answered the phone and transmitted emails and documents as she received instructions to do so. She had no role in crafting the content of the communications.

Evidence of Hyde

[57] Hyde does not dispute the accuracy of the records in Exhibit 11. Nor does she dispute that she wrote the cheques in question, other than the signature line. Her evidence is that the cheques written to cash and deposited into her bank account were the result of a mutual agreement with Ng to take her compensation in this manner. She testified that the funds involved were appropriate, legitimate compensation for the hours she worked including travel. She told the court that Ng favoured this method because it would mislead the investors as to the inordinate amount of money spent on Hyde's services as a result of his inept management of the firm. Hyde was unable to say when this agreement was concocted.

[58] I cannot accept this evidence. There is no evidence that the investors ever bothered to examine Castor's financial records or bookkeeping practices. There is no evidence that the investors monitored the management of the firm in any respect. There is no evidence that Ng ever tried to mislead his investors about the financial state of Castor. In the unlikely event that the investors had developed the inclination to scrutinize Castor's books, the revelation that thousands of dollars were paid out every month to cash would have necessarily concerned anyone with a stake in Castor's viability. It would have aroused the immediate suspicion that funds were being deliberately drained in manner difficult to trace.

[59] The same funds openly paid for bookkeeping services would no doubt have generated concern about the management competence but not evoked the suspicion that the firm was being bled in an oblique manner. In addition, If Hyde's evidence regarding this scheme is to be believed, by attributing the payouts to cash as opposed to bookkeeping Ng deprived the firm of approximately $40,000 in HST refunds in order to disguise its disorganization.

[60] The disclosure of the alleged fraud at issue in this trail came about as a result of Ng and Richer's decision to direct some of the firm's profit to the investors. This suggests that Ng was committed to honour his obligations to his investors, not to deceive them. I completely reject the defendant's evidence of an agreement with Ng to pay her through the subterfuge of frequent, substantial cheques to cash.

[61] In her 2016 discussions with Ackroyd concerning irregularities with Castor's line of credit, Hyde sought to give him the impression that Ng and his co-principle Brian Richer were illicitly skimming funds from the firm. Cheque 1437, in the amount of $2125.00, dated September 21, 2015, may also be evidence of an attempt by the defendant to deflect any potential future suspicion of misconduct. This cheque was posted to Richer in the general ledger but made payable to "cash" and deposited in the Simply bank account.

[62] In her initial communications with Castor and Ackroyd, Hyde took the position that she was unpaid for considerable periods of her association with the firm. Exhibit 1 and Exhibit 2 are some evidence supporting that contention. Exhibit 1 consists of a cover email and 3 attached documents, each titled "invoice" and each referencing a year of Hyde's association with Castor. Each invoice provides a total of hours claimed for the year under the categories "Bookkeeping", "Meetings" and "Driving Time". The cover email sent by Hyde's then assistant, Taisha Allen, on June 24, 2016, describes these documents as outstanding invoices. At trial, Hyde stated that she didn't recall instructing Allen to write that the invoices were unpaid. I took her meaning to be that Allen composed that portion of the message independently of Hyde. In my view it is very unlikely that Allen, a very young, very new and very junior employee, untutored in bookkeeping and ignorant of Hyde's business with Castor, would have made this inscription without being so directed by Hyde.

[63] Exhibit 2 featured an email message from Hyde to Ng dated June 14, 2016. In the context of the rapidly disintegrating business relationship Hyde demanded: "I have spent my entire weekend chasing things that I have yet to be paid for, When am I going to get paid for 2014—2016?". In cross-examination, Hyde maintained that she sent the email when she was in a time of personal stress. She testified that the above statement should have had the word "properly" inserted before "paid".

[64] Hyde resisted the suggestion by crown counsel that she meant to create the impression, in Exhibits 1 and 2, that she had not been paid for her work. She categorized the documents in Exhibit 1 as statements that reflected compensation collected, not outstanding.

[65] In my view, it is clear that in June 2016 Hyde was doing precisely what crown counsel suggested, that is, create the impression that she had not been paid or substantially paid for work performed for Castor in the preceding years. Exhibits 14 and 15 suggest that Hyde changed her approach after June 2016.

[66] As we know, Ng denied receiving the invoices from Hyde submitted as Exhibit 14. The invoices were alleged to be copies Hyde retained of invoices submitted to Castor. These documents are bereft of detail including hours worked per day. There is no information specifying which days the alleged billable labour took place. The absence of detail and the nearly identical appearance of the invoices suggest that the invoices are after the fact concoctions created to justify the amount actually diverted Hyde during her association with Castor.

[67] The evidence of Ackroyd strongly corroborates Ng's account. In his review of the firm's record he saw no invoices and no references to outstanding invoices. The responsibility to keep these records of invoices submitted, outstanding and paid was that of the defendant. He also testified that if he seen invoices from Simply to Castor of that magnitude, he would have asked Hyde how many years they referenced. In my view, the defendant submitted no invoices because they would have alerted Ng to acts she wished to remain unknown.

[68] The suggestion that Hyde concocted evidence in her defence is strengthened by the evidence taken in her cross-examination in respect of Exhibit 15. That exhibit consists of most of the invoices contained in Exhibit 14 dating from January 31, 2014 to May 31, 2016 with the addition of annotations in black sharpie. Hyde testified that she wrote the annotations after submitting the invoices as a record of separate cheques paid to Simply as funds became available to satisfy the amounts owed.

[69] Hyde denied the crown's suggestion that the annotations were created after disclosure was provided in order to accord with the cashed Castor cheques contained therein. Hyde disagreed, stating that she was unaware of the meaning of disclosure. I cannot credit this assertion. In the course of her evidence, Hyde struck me as having a thorough familiarity with the documentary evidence in this case and having a subtle understanding of the issues involved. It is highly improbable that she would have reviewed this voluminous material without becoming familiar with the concept of disclosure.

[70] The contrast of the invoices contained in Exhibit 1 with the contents of Exhibit 14 produced yet more evidence of concoction. As previously indicated in paragraph 58, Exhibit 1 contained 3 invoices for the years 2014, 2015, 2016 (until May 31). Each invoice claimed a total of hours for the year under the categories "Bookkeeping", "Meetings" and "Driving Time". The same categories are used in the monthly invoices in Exhibit 14 and cover the same periods, but the total values provided in the same time period and category are remarkably inconsistent with the values contained in Exhibit 1.

[71] Hyde was completely unable to explain these discrepancies. I find that the likely explanation is that Exhibit 1 was prepared in haste as the defendant faced pointed queries about bookkeeping irregularities in June 2016. Exhibits 14 and 15 were prepared after the defendant became aware that her depredations had been discovered. I agree with the submission made by the crown: the invoices prepared in Exhibits 14 and 15 are ex post facto concoctions.

[72] Exhibit 14 reveals an astonishing story. Each monthly invoice prepared by the defendant claims between 82 and 102 hours per month on bookkeeping, trips to Castor from her home by the defendant, occasional discussions with the CRA and meetings at Castor. All of these hours reflected a rate of 80/hr. The amount of the monthly invoices was always between $8,000-10,000. As we know, Hyde was very successful attracting clients. She and Ackroyd shared a client base of 50 to 60 small firms. It is preposterous to claim that she could have worked hours of that magnitude and still serviced the rest of her clientele.

[73] Hyde offered the curious rationale for both her high hourly rate and her high number of working hours that she spent a lot of time bookkeeping for Castor because of the firm's disorganization. I venture the observation that a high hourly rate would be justified by a high level of skill, not a large volume of work. The reality is that Castor was a very small firm with commensurate bookkeeping needs. Hyde's ordinary tasks included preparing payroll and deductions for usually 1-2 employees, occasionally rising to 3. Her tasks also involved preparing payments for a small number of regular suppliers and deposits for funds received. In addition, she would assist the accountant by supplying information to the account for the preparation of year-end.

[74] Hyde testified that the firm was the target of multiple audits for the CRA and WSIB. Accordingly, the very heavy use of her time, referenced in Exhibit 14, was required because of the extensive contact with personnel at those institutions as a result of Castor's disorganization. In the "Description" portion of the invoices found in Exhibits 14, Hyde gave her account of the services provided. A review of these invoices indicates that reference to CRA-related hours were always blended with hours related to meetings and phone calls. This total category was never reached the level of 10% of the monthly invoice and was only referenced the monthly invoices of October, November and December 2013 and January, February, March and May, 2014. The 25 other monthly invoices contained in Exhibit 14 reflected in general the same range of hours allegedly worked on Castor's behalf, without any reference to CRA related tasks. No reference to WSIB related tasks was made in any of these invoices.

[75] I reject Hyde's evidence of an agreement with Ng regarding her rate of compensation, that there was an agreement to pay for her travel to and from work and that bills in the range of $8000-10,000 were contemplated by the parties. I disbelieve the defendant's testimony that she submitted the invoices in Exhibit 14 to Castor prior to the end of her association with them.

[76] Hyde testified that the cheques unposted or mis-posted to the general ledger to other suppliers of Castor but payable to her own account or cash were the result of multiple errors on her part without any larcenous intent. I completely reject the defendant's explanation of human error for the fictional or absent postings. It is beyond rational possibility that at least 105 cheques were posted to another supplier absent the intent to disguise the misdirection of the funds concerned. I do not believe that there is reasonable possibility that accounts for the failure to post 46 cheques absent the intention to hide the existence of the transactions. The evidence of Ackroyd was that, while the defendant was a bookkeeper with basic skills and sloppy work, he had never seen her make mistakes of this kind with other clients. His evidence was that he never known Hyde to incorrectly post one of Castor's payments to a different supplier than the payee on the cheque. Hyde appears to have been the only beneficiary of her "errors".

Conclusion

[77] Between August 7, 2013 and June 20, 2016, a total of 46 cheques to cash or Simply totaling $82,126.15 were not posted into the general ledger. A total of 105 cheques totaling $161,414.27 to cash or Simply were mis-posted to entities other than Simply. A total of 13 cheques totaling $26,276 were payable to cash and deposited into the Simply account. The sum realized by these acts totals $269,817.37.

[78] In coming to this total, I exclude any cheques payable to Simply and posted to Simply. The absence of any attempt to hide these transactions gives me a reasonable doubt that they were part of the larcenous scheme. I also disregard any cheques payable to cash and posted to cash before January 27, 2014. There is no evidence that these funds were misdirected into the Simply account. I also exclude the 19 cheques that Ng identified as potentially appropriate. In my view evidence of the intention to dishonestly deprive Castor was demonstrated in the following acts by Hyde: the mis-posting of cheques indicated her intention to hide the destination of the funds transacted; the failure to post cheques is evidence of an intention to hide the existence of a transaction; the deposit of funds into the Simply account that were posted to other entities, including cash, is evidence of the misappropriation of the funds.

[79] This is a case requires a credibility assessment, but it is not a credibility contest. The question is not which evidence I prefer but whether I am satisfied beyond reasonable doubt that the defendant has committed the crime alleged. Even If I believe the crown witnesses, the defendant need only raise a reasonable doubt to be acquitted.

[80] On the basis of the totality of the evidence before me, including their testimony and the documents presented in evidence, I accept the evidence of Ng, Ackroyd and Allen in all essential respects.

[81] I reject the defendant's evidence entirely. It is clear that she took advantage of Ng's disinterest in the minutiae of management to commit brazen acts of fraud at an approximately rate of one per week. I do not accept her evidence of her hourly rate, nor the total hours she claims to have worked. I reject her evidence of the purported scheme hatched by Ng to deceive his investors. I accept none of her evidence that contradicts that of Ng, Ackroyd and Allen. I find no possible reasonable doubt in respect of the defendant's guilt in either her evidence or in the totality of the evidence. She stands convicted.

Released: October 2, 2020

Signed: Justice M Block