ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CR 12-28 AP

DATE: 2013-06-14

BETWEEN:

HER MAJESTY THE QUEEN

– and –

Michael Askew

Respondent

Colleen Hepburn, for the Appellant Crown

Larry Douglas, for the Respondent

HEARD: June 10, 2013 in Parry Sound

DECISION ON APPEAL

dELfRATE j.:

[1] The Crown appeals the acquittals entered by the Honourable Mr. Justice L.J. Klein on September 24, 2012 on charges of theft over $5,000, possession of stolen property over $5000, making a false statement to obtain a loan, false pretence to obtain a contract over $5000 and fraud.

[2] The Crown contends that the learned trial judge made the following errors:

a) He failed to exercise his jurisdiction to decide the criminal charges before him;

b) He gave insufficient reasons, precluding meaningful appellate review;

c) His verdict was unreasonable as it was fully based on a misapprehension of the law regarding mens rea for fraudulent offences.

[3] For the following reasons, the appeal is allowed and a new trial is ordered on all of the charges.

Background

[4] The facts leading up to these charges arose as a result of a business transaction between the complainant, Scott Sahanatien, and the appellant, Michael Askew, in October 2011.

[5] The appellant was performing rock breaking work with his hydraulic rock breaker at the behest of the complainant when the rock breaker’s engine broke down and needed to be replaced. The cost for the replacement of the engine was approximately $15,000.

[6] The parties entered into a written contract on October 21, 2011 whereby the appellant acknowledged the following:

I, Mike Askew, acknowledge that I have borrowed $15,000 on the 21st day of October 2011, from Scott Sahanatien for a period of 31 calendar days. To guarantee this loan, I transfer the ownership of my hydraulic breaker (debt free) to Scott Sahanatien for the said period. If the repayment of the entire $15,000 is not made on the 21st day of November 2011 the breaker will become the permanent property of Scott Sahanatien for him to dispose of as he sees fit to pay the loan with no additional compensation.

[7] There is no issue as to the execution of the contract. However, at trial, the appellant admitted that the rock breaker was in fact being leased and that the purchase option would not be triggered until April 2012.

[8] Pursuant to the terms of the agreement, the complainant’s company advanced the appellant $15,000 and the repairs were completed.

[9] Work on that particular project continued and on November 17, 2011 additional work on a separate property owned by a Mr. Coady was initiated at the request of the complainant.

[10] The appellant had made no direct repayment by the November 21, 2011 deadline. The complainant made no request for repayment until February 2012, when the appellant received a letter indicating that if there were no payment made, the Ontario Provincial Police would become involved.

[11] At that time, the appellant had not yet received any payment for the work that he had done on either of the properties except for $4,000 towards some expenses. The appellant assumed that because he had not received any further payments, the complainant had applied what he was owed for the work performed towards the outstanding loan. From the appellant’s perspective, the value of the work performed on the two properties exceeded the $15,000 owing on the loan.

[12] The complainant admitted that he had been paid $100,000 for the various work including the breaking operation on the first property and that Mr. Coady had offered to pay $6,000 towards the rock breaking operations on the second property. However, the complainant refused the $6,000 since he had turned the matter of the loan over to police.

[13] At trial, both the complainant and the appellant had differing understandings of what the agreement was and who owed whom what.

[14] Faced with this evidence, the trial judge issued a six and a half page decision. After reviewing the caselaw on reasonable doubt, he concluded as follows:

I was presented with two fairly stark difference of opinion as to what occurred, not just on October 21st because that was kind of a magic date, but on November 17th, another magic date. Money was loaned for one purpose and one purpose alone, to get that excavator working, get an engine in it, get that blasted thing out of the way to get it out there making money and then paying money back. End of story. Two contracts were underway at that time. Both of them were known to both individuals that entered into that contract to be of sufficient value that the monies would be there to pay the contract. The rock breaker was taken as part of the security for the repayment of that loan. It was given back to provide the tools to repay the loan. In reviewing all that, I am not convinced there was an intent to breach the criminal law in any way by Mr. Askew. I think his intention throughout was to pay and I am left with a reasonable doubt as to a necessary intention on all other offences charged. Acquittal must enter on all counts.

Position of the Crown

[15] The trial judge erred in three ways:

a) failure to exercise his jurisdiction,

b) insufficiency of reasons, and

c) erroneous understanding of the law.

Position of the Appellant

[16] The appellant submits that although the reasons are not as clear and detailed as they could have been, a review of the entire transcript reveals that the trial judge was very much aware of what the issues were. When reviewed as a whole, the trial judge did have sufficient facts and performed an appropriate analysis of the law on which to base the acquittals. Accordingly, there was no miscarriage of justice.

Failure to Exercise Jurisdiction

[17] The Crown submits that the numerous references made by the trial judge to the case as being a civil case, gave the parties the perception that the matter should be heard in a civil court as opposed to the criminal court, where a different burden of proof would apply. Accordingly, the judge failed to address the elements of the criminal charges.

[18] Although the trial judge makes various references in his reasons to construction liens, contractors and sub-contractors, ownership of chattel, an accounting of amounts owed, and the burden of proof in civil cases, I do not conclude that he failed to exercise his jurisdiction.

[19] In my view, his references to the civil aspects of the case formed part of the narrative in outlining the complexity of the issues raised by what appeared to be a simple business loan transaction involving a piece of machinery. Nowhere in his reasons, does he state that he is applying the civil burden of proof or acquitting on the basis of the civil aspects of the case. In fact, after analysing the civil aspects of the case, he goes on to address the issue of R. v. W.D. and the requirement of proof beyond a reasonable doubt.

[20] Accordingly, this ground of appeal is dismissed.

Insufficiency of Reasons

[21] The Crown submits that the reasons are in contravention of what is required as enunciated in R. v. R.E.M., 2008 SCC 51, [2008] S.C.J. No. 52 (S.C.C.) and in R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869 (S.C.C.).

[22] These cases stand for the proposition that reasons must be sufficiently detailed to enable the parties to understand why a particular decision was made. Further, reasons must permit effective appellate review and provide public accountability.

[23] In this case, the Crown submits that the reasons are so lacking as to bar the parties from understanding how the trial judge arrived at the acquittals. He does not outline what evidence he accepted or rejected and the reasons for acceptance or rejection. He did not make any findings of credibility nor did he address the issue of credibility other than to say that he was “presented with two fairly stark differences of opinion as to what occurred.” See reasons at p. 131.

[24] In my view, the reasons are insufficient since they provide no insight into the logical process with respect to how the trial judge reached his conclusion to acquit. The decision effectively leaves the parties to speculate as to what evidence he accepted or rejected.

[25] Although he reviewed the W.D. analysis when faced with the contradictory evidence of the complainant and the appellant, the judge failed to then apply the principles to the evidence before him. At no time does he address the evidence other than to say that it is contradictory.

[26] Even when one reads the evidence of the parties and the submissions of counsel, it is difficult to understand how he arrived at his decision.

[27] Although the appellant was facing five charges with each charge having different elements that the Crown must prove beyond a reasonable doubt, there is no separate analysis of how the evidence led would apply to each of these charges. His reasons are all-encompassing and generic, stating “in reviewing all that, I am not convinced there was intent to breach the criminal law by any way by Mr. Askew”. The all-important question of “why” he reached that decision is not addressed in his reasons.

[28] In my view, this is an error in law.

Erroneous Misunderstanding and Unreasonable Verdict

[29] The Crown submits that the learned justice erred in law in that he acquitted since he concluded that the appellant’s “intention throughout was to pay and I am left with a reasonable doubt as to a necessary intention on all other offences charged.” See transcript at p. 132, at line 324.

[30] The Crown refers to R. v. Currie, (1984), 13 W.C.B. 35 (Ont. C.A.) where the court held that:

… an intention on the part of the accused to repay the victim is irrelevant and does not provide a defence if the conduct of the accused is otherwise shown to involve dishonest deprivation for personal ends. Similarly, if the victim is deliberately deprived by dishonest means, it matters not that the accused had an honest motive or genuine desire to avoid causing any loss or that he expected that that which he was doing might, at a later time, be validated or rectified or meet with the victim’s approval.

See also R. v. Théroux, [1993] 2 S.C.R. 6 (S.C.C.) and R. v. Zlatic, [1993] S.C.R. No 43 (S.C.C.).

[31] In this case, the appellant readily conceded at trial that he knew that the piece of equipment was not his and that it was actually leased and that an amount was owing on it, contrary to his promise that the equipment offered as collateral was to be “debt free”. He also claimed to have honestly believed that the debt had been repaid from the work he had performed on the two properties. No doubt he had the intention to repay his debt. However, his intentions are irrelevant. Acquitting on the basis of an intention to repay would be contrary to the law as stated in the above noted cases. Accordingly, he committed an error in law.

[32] In my view, because of the misapprehension of the law and the insufficiency of the reasons, the appeal is allowed and a new trial is ordered.

Mr. Justice Robert G.S. DelFrate

Released: June 14, 2013

COURT FILE NO.: CR 12-28 AP

DATE: 2013-06-14

ONTARIO

SUPERIOR COURT OF JUSTICE

HER MAJESTY THE QUEEN

– and –

Michael Askew

DECISION ON APPEAL

DelFrate J.

Released: June 14, 2013