COURT FILE NO.: CV-08-00368772 DATE: 2013-10-11
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N :
HEALTHY BODY SERVICES INC. Plaintiff
– and –
1261679 ONTARIO LTD., formerly carrying on business as "RAYTEK COMMUNICATIONS", UTPAL BHOGILAL PATEL, MILTON L. RAMSAWAK and JIGNAPSHABEN UTPAL PATEL Defendants
Counsel: Matthew B. Lerner and Brian Kolenda, for the Plaintiff Simon Schneiderman, for the Defendants
HEARD: September 10, 11, 12, 13, 16 and 17, 2013
CHAPNIK J.:
[1] This is essentially a case in which two victims of fraud are locked in battle for monies taken from them illegally by the same fraudster.
[2] When Utpal Bhogilal Patel (Patel) pled guilty to a fraud of about $670,000 on 1261679 Ontario Ltd., formerly carrying on business as "Raytek Communications" (Raytek), he entered into a plea bargain with the Crown Attorney – the more restitution he paid to the victim through the Crown's office, the less jail time he would serve; and his sentencing was deferred accordingly.
[3] So what did Patel do then? He obtained employment with the plaintiff, Healthy Body Services Inc. (HBS) and defrauded that company of about $490,000.
[4] By the time the fraud on HBS was discovered, Raytek had received $390,000 in restitution payments from Patel. The plaintiff claims that a portion of the restitutionary funds were impressed with a trust to its benefit and must be disgorged by the defendants. The defendants deny that the plaintiff is entitled, either in law or equity, to any amounts received by them through the Crown Attorney's office, as restitution. They seek a dismissal of the claim with substantial indemnity costs.
the facts
[5] Patel was employed by Raytek as its controller from about September 2002 to February, 2005. Milton L. Ramsawak (Ramsawak) is a shareholder and director of Raytek and was its directing mind at all material times.
[6] Patel misappropriated the sum of approximately $670,000 from Raytek during his employment with the company.
[7] When the scheme was discovered on February 8, 2005, Patel admitted the fraud and he was criminally charged with fraud over $5,000.
[8] Patel committed the fraud by changing the payroll cheques after they were signed by Ramsawak to fraudulently increase the amount of his pay cheques. He also failed to file Raytek's corporate tax returns or to remit source deductions or quarterly GST returns to the Canada Revenue Agency (CRA); rather, he pocketed these funds by submitting and cashing fraudulent cheques in his favour.
[9] In April 2005, Raytek initiated a civil action against Patel and his spouse for, among other things, damages for conversion and monies had and received, declarations of constructive trust and tracing orders. On April 11, 2008 Raytek obtained default judgment for $444,941.85 in the Raytek action plus interest of $101,117.61 and costs of $66,000.
[10] Despite receiving a comprehensive court order freezing Patel's assets, Raytek only managed to recover about $70,000 in proceeds from the seizure of cash and sale of Patel's home, jewelry and a vehicle worth about $5,000 upon a pro rata sharing with Patel's co-creditors.
[11] Raytek then instructed its counsel in the civil proceedings, Michael Title, to seek a restitution order in the criminal proceedings in which Patel was represented primarily by criminal defence counsel Mark Sandler of Cooper, Sandler, West.
[12] Patel was released on bail, with conditions including not to reoffend and to remain in the jurisdiction. Ultimately, his counsel entered into a plea arrangement with the Senior Crown Attorney in Toronto, David Fisher, which involved a series of payments to Raytek as restitution, in return for a reduced jail sentence. Patel pled guilty to the fraud charge on November 23, 2007.
[13] Pursuant to the plea agreement, Raytek received a total of $390,000 in payments from Patel from March to September 2008, $290,000 of which were received in the form of cheques or bank drafts given to his lawyer, Mr. Sandler, who passed them on to the office of the Crown. Mr. Fisher delivered each of the cheques or bank drafts to Raytek under a covering letter copied to Mr. Title and the investigating officer. The following chart documents the receipt and disbursement of the payments made:
Date
Restitution Amount
Disbursement of Restitution Payments by Raytek Communications
March 6, 2008
$100,000
Two payments made to line of credit: March 25 for $10,000 and April 7 for $90,000
April 10, 2008
$150,000
Deposited to Raytek bank account on April 24, 2008
Payment to line of credit on May 5 - $150,000
May 1, 2008
$50,000
Deposited May 5, 2008 to Raytek bank account
July 30, 2008
$50,000
Deposited to Raytek bank account on July 30, 2008
September 17, 2008
$40,000
Deposited to Raytek bank account
October 10, 2008
Paid $40,000 to CRA for arrears of source deductions dated October 20, 2008
October 29, 2008
Increase made to line of credit - $309,000
October 31, 2008
Paid $309,000 to CRA for arrears of source deductions dated November 18, 2008
TOTAL = $390,000 TOTAL PAID TO CRA = $349,000
[14] The line of credit referred to above refers to a line of credit advanced to Mr. and Mrs. Ramsawak jointly by the Bank of Montreal (BMO) and secured against their jointly owned family home.
[15] Due to the fraudulent actions of Patel between December 2002 and December 2007, Raytek's debt to CRA for deductions not remitted in 2003, 2004 and 2005 went from zero to $553,095.30 inclusive of principal, interest and penalties.
[16] Michael Kichuk is the sole owner, officer and director of HBS which operates as a distributor of nutritional products. In August 2007, Patel applied for the controller position at HBS. He submitted a résumé claiming to have worked as the Finance Controller at Raytek, but falsifying his employment reference by providing a telephone number assigned to himself.
[17] Beginning in November 2007, Patel began to perpetrate a fraud on HBS similar to the previous one at Raytek by making unauthorized payments from HBS's payroll and U.S. dollar accounts to accounts controlled by him. He caused seven fraudulent payments totaling about $312,000 to be made to him from HBS's payroll account from November 7, 2007 to September 11, 2008. He also fraudulently issued an unauthorized cheque to himself drawn against HBS's U.S. dollar account in the amount of approximately $175,000 USD on February 21, 2008. To hide his actions, he manipulated HBS's accounting records by matching withdrawals with actual payments that were to be made to HBS's business associates and suppliers.
[18] The total amount stolen from HBS by Patel was approximately $490,000 in Canadian funds.
[19] On September 26, 2008, the fraud on HBS was discovered and Patel, when confronted, confessed to the fraud. In October 2008, the police again arrested Patel. His bail was immediately revoked and he was charged with more offences.
[20] These proceedings against the named defendants were commenced by HBS on December 17, 2008. The plaintiff obtained judgment as against Patel for the sum of $587,999.01 and $2,500 for costs on April 28, 2009 but has been unable to realize on the judgment.
[21] Patel pleaded guilty on March 11, 2009 to a number of offences, including several counts of fraud, criminal breach of trust and obstruction of justice arising out of his frauds on Raytek and HBS. He was sentenced to 6 years of incarceration and later deported to India. A free-standing restitution order in the amount of $650,000 was made against Patel in favour of HBS.
[22] The defendants first learned of the fraud committed on the plaintiff on October 6, 2008, when Mr. Fisher advised Mr. Title that no further restitution cheques would be forthcoming as the cheques were fraudulently obtained.
[23] In October 2008, the defendants made two payments to CRA, the first on October 7, 2008 for $40,000 and the second on October 31, 2008 in the sum of $309,000 funded by a withdrawal from their line of credit at BMO.
[24] Raytek ceased operations in November, 2012.
THE parties' positions
[25] The plaintiff claims that a portion of the funds stolen by Patel not only benefited Raytek but also Ramsawak personally; and that he knew or ought to have known that the funds came from an illicit source. Moreover, Ramsawak is personally liable for some amounts that Raytek received by virtue of his personal guarantee with collateral on his home for the line of credit paid down with the impugned funds. Thus, they claim that HBS is entitled to a declaration of constructive trust over a portion of the Ramsawak home owned jointly by Mr. and Mrs. Ramsawak.
[26] Specifically, HBS seeks judgment against Raytek and Ramsawak on the basis of unjust enrichment and knowing receipt of funds obtained in breach of trust. HBS's position is that the defendants were, at the relevant time, constructive trustees of the HBS funds they received. The plaintiff seeks an order:
(a) that Raytek and Ramsawak are jointly and severally liable to HBS in the amount of $282,452.13 as a result of their constructive knowledge that the funds they obtained from Patel were funded by a breach of trust; or
(b) in the alternative, that Raytek and Ramsawak are jointly and severally liable to HBS in the amount of $190,000 as a result of their actual knowledge that the funds they obtained were funded by the fraud on HBS and in breach of trust;
(c) declaring that Ramsawak holds $150,000 of the equity in the Ramsawak home on constructive trust for HBS.
[27] The defendants deny that the plaintiff is entitled to any of the above relief. First, they had no fiduciary relationship with the plaintiff and there is no legal or factual basis for the imposition of a constructive trust. Second, they were not unjustly enriched as there was a valid juristic reason for the payments that were made. Third, the payments were properly made as repayment of funds stolen from Raytek and as Criminal Code restitution paid by Patel through the Crown Attorney; and there was no suspicion raised or reason to make inquiry as to the source of the funds. Finally, the funds were not directly traceable to the funds taken from HBS; and in any event the doctrine of equitable tracing does not apply where no fault is attributed to the defendants and the funds were applied for bona fide purposes.
[28] In summary, the defendants rely on the doctrines of "commercial good conscience", "valid juristic reason" and "change of position" in good faith in applying the funds paid by Patel as criminal law restitution to the financial shortfalls caused by Patel's fraud upon them.
admissibility of documents
[29] The parties dispute the admissibility of four documents:
The transcript of the guilty plea of Mr. Patel;
The synopsis of the guilty plea in the criminal proceeding against Patel;
The handwritten confession given to Michael Kichuk by Patel; and
The summary of evidence of Mr. Kichuk as submitted to the Toronto Police.
The evidence in all four documents relates to statements made by Patel to the effect that the monies he paid through the Crown's office to Raytek as restitution were monies he stole from the plaintiff.
[30] Although the disputed statements are clearly hearsay, the plaintiff seeks to have them admitted for the truth of their contents as an exception to the hearsay rule. Specifically, the plaintiff seeks to have Patel's statements admitted under the exception for declarations against one's pecuniary or penal interest.
[31] In Demeter v. The Queen, 1977 25 (SCC), [1978] 1 S.C.R. 538, at pp. 544-46, the Supreme Court of Canada established the following guidelines for determining when a statement is admissible under this exception:
The declaration must have been made "to such a person and in such circumstances that the declarant should have apprehended a vulnerability to penal consequences as a result".
The vulnerability to penal consequences must not have been remote. In other words, the facts stated must have been to the declarant's "immediate prejudice", not "only against his interest in certain future events".
The declaration is not admissible if it is part of a larger statement that, when considered "in its totality" tends to weigh in favour of the declarant.
Where the declarant was confessing to a crime, the court may consider "whether or not there are other circumstances connecting the declarant with the crime and whether or not there is any connection between the declarant and the accused".
The declarant must be unavailable "by reason of death, insanity, grave illness which prevents the giving of testimony even from a bed, or absence in a jurisdiction to which none of the processes of the Court extends".
The declarant's statement must have been with respect to facts of which he had peculiar knowledge.
The statement must have been unequivocally to the prejudice of and contrary to the interests of the declarant. If it may be construed as either for or against his interest, it is inadmissible.
The declarant must have known the statement to be against his interest when he made it, "because it is on the guarantee of truth based on a man's conscious statement of fact, 'even though it be to his own hindrance,' that the whole theory of admissibility depends".
[32] In addition, all of the traditional exceptions to the hearsay rule must be interpreted consistently with the necessity and reliability requirements of the principled approach to hearsay: R. v. Starr, 2000 SCC 40, [2000] 2 S.C.R. 144, at paras. 190-207.
[33] It is evident that the facts in this case do not fit into the above established criteria. What the plaintiff seeks to do in this case is not just have Patel's admissions of guilt entered into evidence but also his explanation as to what he did with the stolen funds. It is arguable, as alleged by defence counsel, that Patel was able to safeguard the true source of the restitution payments, namely the $670,000 stolen from Raytek, by stating that he had in effect "robbed Peter to pay Paul". This explanation may well have been perceived by him to work in his favour in the overall sentencing forum and as part of his early confession to the plaintiff in respect of the second fraud.
[34] In support of this argument, it is noted that the first payment of restitution given to Raytek through the Crown on March 6, 2008 has been admittedly proven not to have included any funds taken from the plaintiff, contrary to Patel's assertions. Moreover, Patel has been shown to be a "brazen thief", a liar and a smooth operator. A reasonable person may conclude that those statements as to where he obtained the funds would constitute just "one more lie" made by him in the context of the criminal proceedings.
[35] Indeed, it was Mr. Title's evidence that, in his view, based on his review of seized documents, Patel maintained control of funds stolen from Raytek overseas and could re-assemble them when needed.
[36] This is not a case where there is a dispute as to whether a criminal conviction per se can be used in a subsequent civil proceeding as proof of the facts supporting the conviction. Patel admitted his guilt immediately upon being confronted in respect of the frauds he committed on both the plaintiff and the defendants. He entered a guilty plea in the criminal proceedings and ultimately was sentenced to 6 years of incarceration and deported to India.
[37] The plaintiff cited Re Del Core and Ontario College of Pharmacists (1985), 1985 119 (ON CA), 51 O.R. (2d) 1 (C.A.). In that case, the Court of Appeal was unanimous in holding that a certificate of conviction in a criminal proceeding was admissible in a subsequent civil proceeding as evidence "of the fact of guilt", at p. 21 (per Blair J.A.). See also pp. 9 (Finlayson J.A.) and 17 (Houlden J.A.). However, Del Core does not assist the plaintiff in the case at bar because the issue in the present case not whether a certificate of conviction may be adduced to prove the fact of guilt, but whether various statements made in the context of criminal proceedings may be admitted for the truth of their contents. There is no dispute about the fact of guilt in this case.
[38] The plaintiff also relied on British Columbia (Attorney General) v. Malik, 2011 SCC 18, [2011] 1 S.C.R. 657. In Malik, the Supreme Court held that "[w]hether or not a prior civil or criminal decision is admissible in trials on the merits … will depend on the purpose for which the prior decision is put forward and the use sought to be made of its findings and conclusions", at para. 46. The court also opined, at para. 48, that the weight to be given to the earlier decision would rest on various factors including "the opportunity given to the prejudiced party to contest it" and on all "the varying circumstances of particular cases".
[39] These are indeed, unusual circumstances. At first glance, it would appear that the statements made by Patel, essentially that he had "robbed Peter to pay Paul", were contrary to his penal interests. In this particular case, however, the commission of the frauds themselves were not in issue – they were admitted. Moreover, at some point Patel told Kichuk that he had obtained the funds from a rich uncle.
[40] In these circumstances, I find that the criteria set out by the Supreme Court in Demeter to determine admissibility under this heading particularly points 3, 7 and 8 have not been met. Indeed, the statements of purpose made by Patel in perpetrating the fraud on the plaintiff may not have been made unequivocally to his own prejudice.
[41] Even when a declaration is against a declarant's penal interest, it will not be admissible where it is nonetheless unreliable because the declarant had other motivations to lie. See, for example, R. v. Kimberley (2001), 2001 24120 (ON CA), 56 O.R. (3d) 18 (C.A.), at para. 70, where the declarant, who was already serving a life sentence, was motivated by "self-aggrandizement, a desire to manipulate the criminal justice system and a desire to improve his living conditions ".
[42] Patel has been proven to be a consummate liar about this very issue. He lied to his defence counsel, to the Crown and to the police about the source of the funds he was to provide as restitution. He persuaded them that he had a rich uncle and family members who would provide him with the funds. He did that when the bulk of the $670,000 stolen from the defendant remained outstanding – and they believed him.
[43] He lied when he said all the restitution monies came from his fraud on the plaintiff though that was clearly untrue. He may well have been motivated to lie again to protect the funds stolen from the defendant that he had stored away. If this is a reasonable possibility, as suspected by Mr. Title, the evidence that the plaintiff seeks to have this court admit becomes suspect.
[44] I find the evidence of Patel in the criminal proceedings that the source of the restitution payments was his fraud on the plaintiffs to be unreliable.
[45] The plaintiff's argument based on necessity is also without merit. What we know is that in March 2009 Patel was given a six year sentence and then deported to India. No evidence was adduced as to when he was deported, and these proceedings against him were commenced in late 2008. No explanation was advanced by the plaintiff as to why examinations for discovery or judgment creditor examinations could not have taken place on the plaintiff's behalf, prior to Patel's deportation.
[46] Interestingly, the plaintiff made no attempt to rebut this argument put forth by the defence, either in its written or oral submissions.
[47] Finally, the use of criminal proceeding transcripts in subsequent civil proceedings for the truth of their contents was soundly dismissed in the case of Royal Bank of Canada v. McArthur (1984), 1984 2166 (ON SC), 46 O.R. (2d) 73 (H.C.J.), at p. 80, as follows:
Before leaving the matter, I should make one further reference to the use of the transcripts. It has not escaped my attention that a reading of some of the cases to which I have referred leads to at least a possible conclusion that reference was had to the transcripts of the criminal proceedings. If such reference was had, however, it was for the purpose of establishing what happened in the criminal proceedings. There is no suggestion of use of the transcript at a subsequent trial as proof of the facts. [Emphasis added.]
[48] The plaintiff contends that the impugned statements are both relevant and probative as they "go to the very heart of what is at issue in this trial". Moreover, "there is no evidentiary rule that would have excluded the declarations, had they been provided viva voce under oath at trial".
[49] That is certainly correct. However, in that situation, defence counsel would have been afforded the opportunity to test Patel's statements under cross-examination and his concerns about the reliability of the statements would have gone to weight, not admissibility.
[50] In conclusion, I agree with the plaintiff that the impugned statements of Patel are relevant and that they "go to the very heart of what is at issue in this trial". In these particular factual circumstances, however, the declarations have not been proven necessary or reliable on a balance of probabilities, nor do they fit into any established exception to the general exclusionary rule. They will not be admitted into evidence for the truth of their contents.
the evidence
[51] The plaintiff called two witnesses: Michael Kichuk, the president and owner of HBS, and James B. Hoare, an accountant, qualified as an expert to give evidence in forensic accounting. The defendant called Mr. and Mrs. Ramsawak, Mr. Title, Mr. Fisher and Mr. Sandler to give evidence. A summary of their evidence follows.
the plaintiff's evidence
(a) Michael Kichuk
[52] As noted, Mr. Kichuk is the sole owner of HBS. He hired Patel in August 2007 based on his résumé, his "reasonable" salary expectations and his ability to commence working immediately. The fraud on his company was perpetrated between November 7, 2007 and September 11, 2008. It was discovered on September 26, 2008 and Patel was arrested shortly thereafter.
[53] As noted, HBS obtained judgment in this action against Patel in April, 2009 but has been unable to realize on the judgment. Kichuk described Patel as a persuasive and effective schemer. According to Kichuk, Patel told him what he had told the police and the Crown, that he used HBS's stolen funds to pay the restitution to Raytek.
[54] However, in cross-examination, he stated that Patel also told him that the monies he gave for restitution came from a wealthy uncle, a story which Patel had previously told to his defence counsel and the Crown Attorney:
Q. Did you read page 245 re: a wealthy uncle? He told you that too?
A. Yes.
Kichuk confirmed that he had no direct knowledge of the source of the restitutionary funds.
(b) James B. Hoare
[55] As noted, James Hoare, a certified chartered accountant, was qualified as an expert in forensic accounting. He conducted a review of Patel's bank records and a tracing of funds. He opined that Raytek benefited from $282,452.13 of HBS's funds and of that amount, Ramsawak benefited personally through the $150,000 in funds he took from Raytek and paid into his line of credit.
[56] Mr. Hoare's analysis was based in part on the conclusion that the ICICI bank draft for $150,000 paid to Raytek through the Crown's office on April 10, 2008 and deposited into Raytek's bank account on April 24, 2008 was funded by the forged HBS cheque for $175,198.13 USD that had been deposited by Patel into the ICICI account on February 25, 2008. A withdrawal of $165,000 USD was then made by Patel from the account on April 10, 2008. On May 5, 2008, $150,000 in Canadian funds was transferred to the Ramsawaks' line of credit and therefore, it might be said that he benefited personally from the reduction of his liabilities under the line of credit.
[57] Mr. Hoare also gave the opinion that the restitution payments to Raytek made on May 5, 2008 and September 17, 2008 in the amounts of $50,000 and $40,000 respectively could also be traced to HBS monies through Patel's bank accounts at the ICICI or the TD banks. Moreover, the entirety of the $150,000 payment from Raytek to the Ramsawak line of credit on May 5, 2008 could be traced back to Patel's fraud on HBS. In summary, it was his opinion that $282,452.13 of HBS's funds was traceable through two of Patel's bank accounts and bank drafts to the monies received by Raytek in the form of restitution; and that $150,000 of those funds was traceable to the line of credit secured against Ramsawak's home.
[58] In cross-examination, defence counsel questioned the efficacy of the method of tracing used by Mr. Hoare and suggested that there could well have been mixing of funds in the said bank accounts, particularly considering that Patel had previously stolen $670,000 from the defendants, and there were deposits made and monies withdrawn intermingled with the amounts isolated in Mr. Hoare's analysis.
[59] For example, Mr. Hoare was asked:
Q. How do you know that the $150,000 didn't come from my client's $670,000 that was stolen from him?
A. I don't know that.
Q. You don't
A. That's correct.
[60] Regarding the $40,000 withdrawal by Patel on October 7, 2008, he said this:
Q. Now you had said in chief that you couldn't provide an opinion that connects that $40,000 payment if it went to CRA to the HBS deposit that happens back on September 17, 2008, correct?
A. that's the – yes.
Q. Yes, and the reason you can't do that is because there's even on your analysis there's an intervening deposit that happens on October 7, 2008 of $76,268.83 on page 150?
A. Yes.
Q. And you couldn't identify whether the $40,000 that went to CRA was necessarily HBS money or Raytek money?
A. That's correct.
[61] As regards the $309,000 paid to CRA from the Ramsawak line of credit in October 2008 that increased the line of credit:
Q. Increased the debt?
A. Increased the debt, yes.
Q. In Mr. and Mrs. Ramsawak's account?
A. Yes.
Q. And therefore when the loan was advanced it was advanced just as much from Mrs. Ramsawak as it was from Mr. Ramsawak?
A. It's a joint line of credit, correct.
Q. You're agreeing with me?
A. Yes.
The Defendants' Evidence
(a) Milton Ramsawak
[62] Mr. Ramsawak is 66 years of age, married and he and his wife have a 33-year-old son. He came to Canada from Trinidad in 1971 and after working as a TV technician and taking radio and TV courses, he founded Raytek Communications in 1998.
[63] As noted, Patel was employed by Raytek from September 2002 to February 2005 as the company's controller. Initially an accountant supervised him, but when the supervisor became ill, Patel handled Raytek's books and records on his own. In February 2005, Ramsawak realized something was wrong in respect of Raytek's bank statements. When confronted, Patel readily admitted the fraud. Basically, he had altered employment cheques after they were signed by Ramsawak. He also neglected to pay source deductions, GST payments or file tax returns for the company, incurring a tax liability from CRA in the amount of approximately $553,000.
[64] The last cheque forwarded to Raytek for restitution was received by Raytek in September 2008. Ramsawak confirmed receipt of restitutionary funds through the Crown Attorney in the amounts of $150,000, $50,000, $50,000 and $40,000 on April 24, 2008, May 5, 2008, July 30, 2008 and September 18, 2008. When asked about this, the following exchange took place:
Q. Did you know where the monies were coming from?
A. No.
Q. Did you know the state of Patel's employment?
A. No.
Q. Had you ever heard of the plaintiff until this lawsuit?
A. No
Q. Did you know where Patel was working in 2008?
A. No
Q. Was there any reason to question the source of the restitution?
A. No
[65] The total balance owed to CRA by Raytek as at April 24, 2008, including penalties, was $563,866.38 consisting of $349,293.17 in unpaid balance and $214,573.21 in interest and penalties. Though the company retained the services of a professional to apply for "fair dealing", the CRA's stance and tone remained aggressive.
[66] In cross-examination, Ramsawak confirmed that the $150,000 restitution cheque received by the Crown on April 10, 2008 was deposited into Raytek's account on April 24, 2008 and on April 28, 2008, he wrote a cheque to himself in the same amount which he paid into the joint line of credit at BMO.
[67] When he learned of the second fraud on October 6, 2008 from Mr. Title, he was also told there would be no more restitutionary funds coming to him as expected. Then on October 7, 2008 Raytek made a payment to CRA of $40,000.
[68] Subsequently, on October 28, 2008, he received a letter from CRA confirming an arrangement for the payment of arrears "by no later than October 31, 2008 in the amount of $309,000" plus monthly payments thereafter; and stating that "the failure to meet any of the above conditions will cause the arrangement to be in default and may result in immediate collection action without further notice".
[69] By that time, Ramsawak was in a desperate situation and believed that CRA was going to get its money "one way or another". The Ramsawaks then knew they had to take immediate action or CRA would come after their money and personal assets. They therefore decided to borrow $309,000 from their line of credit to reduce the CRA debt incurred by Patel's fraud against Raytek.
[70] As noted, Raytek went out of business at the end of November 2012 as they "couldn't afford to continue".
[71] Mrs. Ramsawak also testified that she and her husband decided after receiving the October 28 letter from CRA that they had to take action to pay off some of the tax debt, particularly since the personal line of credit taken at BMO in both names was secured against their jointly owned matrimonial home. The maximum allowed under the line of credit was $400,000 and the Ramsawaks borrowed $309,000 on October 29, 2008 to pay CRA, despite the fact that this increased their liability to BMO by that amount.
(b) Michael Title
[72] Mr. Title, who has practiced law in Ontario for 33 years, represented the defendants in respect of their civil action against Patel, which was commenced in August 2006.
[73] He explained that, despite a Mareva injunction and other relief obtained by court order on April 1, 2005, Raytek was only able to recover, upon a pro rata distribution with other creditors, approximately $77,000 from Patel's assets, which included a heavily-mortgaged home, some jewelry, a vehicle and other items. According to Mr. Title, their objective in getting involved in the criminal proceedings was to obtain a restitution order since "the civil proceedings produced very little in the way of recovery and Mr. Ramsawak's company had lost $670,000 and was reeling from that loss". As well, the failure of Patel to remit source deductions and other tax payments "put Raytek in serious difficulty" with CRA. Mr. Title also noted that Ramsawak had waited for three years to retrieve the stolen monies and was "in dire need of funds". His business was in jeopardy throughout this period.
[74] It was his view, upon reviewing a seized box of documents, that Patel had been travelling to and from Mumbai, India and that he had a savings account in the Fiji Islands with two family members in residence there. He suspected but was unable to prove that "the funds stolen from Raytek [went] to accounts in India or elsewhere overseas, and perhaps [Patel] put them under the control of family members".
[75] When asked about his belief as to the source of the $150,000 forwarded to Raytek on April 10, 2008, he stated that the bank draft from ICICI Canada reinforced his thinking that the funds stolen from Raytek were held overseas. When asked to explain this further he responded:
A. Well, it's a Canadian bank but it would have branches in India and Citibank which also had a judgment has branches all over the world so Mr. Patel apparently was, it seemed to me, clever enough to lodge those funds in banks outside of Canada. That's what I thought.
[76] Mr. Title believed that wherever Patel lodged Raytek's funds, "he was able to assemble them and repay them" as part of the stated restitution. Indeed, in July 2008 some of the funds were "brought" to the TD bank near Patel's home where he had a bank draft issued for $50,000.
[77] He recalled learning about the fraud on October 6, 2008 from Mr. Fisher, who advised him that there would be no more restitution "as the cheques that had been used to pay the restitution were fraudulent"; and he transmitted this information to his client, Ramsawak.
[78] In cross-examination, Mr. Title agreed he had no specific knowledge of the source of the restitution funds or whether the funds stolen from Raytek were still in Patel's possession. When asked about his belief that the funds went overseas, he responded:
A. I don't know where it was, but I didn't see where he disposed of it or spent it. There was no evidence that he had gambled it away, spent it in Ontario, he didn't – there was the one home with a $507,000 mortgage on it. We knew that he put no more than $116,000 into it.
Q. So you had no knowledge of where it was, sir?
A. I didn't know where it was.
[79] When asked about the restitution cheques drawn on banks in Canada, he answered that this was consistent with his belief that Patel had used international banks to disguise the funds and then could reassemble them at any time.
[80] Further, Mr. Sandler and Mr. Fisher were counsel in respect of the criminal matter. In Mr. Title's words, "I had no reason to call Mr. Fisher and ask him about the authenticity of the cheques or the funds. I mean Mr. Fisher had to be satisfied before I ever had to be satisfied. It was his case."
(c) Mark Sandler
[81] Mr. Sandler was the primary counsel for Patel in the criminal proceeding from 2005 until the time the second fraud was discovered at the end of September 2008.
[82] He and other members of his firm were told by Patel that the lion's share of the restitutionary funds would come from specific locations in the U.K. and the United States. In October 2005, his office sent a letter to the Crown summarizing specific individuals in the U.K. and U.S. purportedly providing the funds to Patel. Indeed, variations in Patel's bail conditions were granted to allow Patel to arrange to obtain the monies from his U.S. sources.
[83] Mr. Sandler was made aware in March 2008 that Patel was employed in an accounting capacity with the plaintiff; and he wrote to the investigating officer regarding this. When Mr. Sandler learned about the second fraud in October 2008, he immediately removed himself and his firm from the record. He stated emphatically that had he known about this "he would not have accepted any payments, legal or restitutionary."
(d) David Fisher
[84] Senior Crown Attorney, David Fisher, had carriage of the criminal fraud proceedings against Patel commenced in 2006. He confirmed the sentencing plea arrangement made with Patel's criminal counsel, Mr. Sandler, that the more restitutionary payments made, the greater the reduction in potential jail time that would be granted. Mr. Patel pled guilty to the charges involving Raytek on November 23, 2007, but sentencing was deferred pending the aforesaid payments being made.
[85] In setting out a chart for payments, he was advised by Mr. Sandler that Patel had a rich uncle in the United Sates who was selling his assets, and other family members to assist him in raising the necessary funds.
[86] He noted the reference in the presentence report prepared in March 2008 to the fact that Patel had obtained employment as a controller with another company unaware of his current charges, but this did not raise any suspicion on his part. According to Mr. Fisher, the Crown was simply a conduit to provide the restitution cheques to Raytek and was in no way obliged to vouch for their authenticity. It was his view at the time, given the information received from Mr. Sandler and/or Patel, that the $150,000 received in April 2008 constituted part of a cheque for $175,000 USD emanating from a "rich uncle" with $25,000 taken off by Patel to pay other debts.
[87] Mr. Fisher accepted Patel's explanations regarding the source of the funds, both prior to and after learning about the second fraud.
[88] After learning about the fraud on HBS, he accepted Patel's statement that the restitution monies came from the second fraud on HBS; and he reiterated this when he spoke to Mr. Title and in Court. No independent inquiry or corroboration of Patel's story was conducted and the Crown did not at any time vouch for the legitimacy of the funds accepted as restitution payments for Raytek. He described Patel's scheme as "chutzpah" on Patel's part.
the law
[89] The plaintiff's claim for an equitable tracing order and a declaration of constructive trust is grounded in the causes of action of "knowing receipt" and unjust enrichment.
[90] Liability for "knowing receipt" relates to strangers to a trust who receive trust property for their own benefit and with knowledge that the property was transferred to them in breach of trust. This category raises two main issues: first, the nature of the receipt of trust property; and second, the degree of knowledge required of the stranger to the trust.
[91] As regards the first issue, liability requires that strangers to the trust receive or apply trust property for their own use and benefit. In doing so, they are enriched at the plaintiff's expense. For the second requirement to be met, the defendant must be shown to have had knowledge of facts that would have put a reasonable person on notice or inquiry as to the source of the funds.
[92] The requisite level of knowledge need not arise prior to or at the time of the receipt of the monies. Even if received innocently, once the recipient learns of the fraud or breach of trust, whether actually or constructively, he is liable to return any of the property he then holds: Holmes v. Amlez International Inc., [2009] O.J. No. 4513 (S.C.J.), at para. 12.
[93] At the same time, the recipient is not expected to be unduly suspicious and is not to be held liable unless he went ahead without further inquiry in circumstances in which an honest and reasonable person would have realized that the money taken was probably trust money and was being misapplied: Citadel General Assurance Co. v. Lloyds Bank Canada, 1997 334 (SCC), [1997] 3 S.C.R. 805, at paras. 44-49.
[94] As noted in Citadel, at para. 51:
It is recalled that a plaintiff is entitled to a restitutionary remedy not because he or she has been unjustly deprived but, rather, because the defendant has been unjustly enriched, at the plaintiff's expense. To show that the defendant's enrichment is unjustified, one must necessarily focus on the defendant's state of mind not the plaintiff's knowledge, or lack thereof. Indeed, without constructive or actual knowledge of the breach of trust, the recipient may very well have a lawful claim to the trust property. It would be unfair to require a recipient to disgorge a benefit that has been lawfully received. In those circumstances, the recipient will not be unjustly enriched and the plaintiff will not be entitled to a restitutionary remedy. [Emphasis added.]
[95] The plaintiff also relies on the principle of restitution known as unjust enrichment. It is well-settled law that three elements are necessary for a plaintiff to establish a claim under this concept: an enrichment of or benefit to the defendant, a corresponding deprivation of the plaintiff, and the absence of a juristic reason for the enrichment. See Pettkus v. Becker, 1980 22 (SCC), [1980] 2 S.C.R. 834; Peter v. Beblow, 1993 126 (SCC), [1993] 1 S.C.R. 980; Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at paras. 31-32.
[96] In Kerr, at para. 34, Cromwell J. observed that "while the underlying legal principles of the law of unjust enrichment are the same for all cases, the courts must apply those common principles in ways that respond to the particular context in which they are to operate".
[97] The above claims are premised upon a finding that the funds given to Raytek as restitution are "trust funds" that can be traced to those taken from HBS.
[98] "Tracing is an identification process. The common law rule is that the claimant must demonstrate that the assets being sought in the hands of the recipient are either the very assets in which the claimant asserts a proprietary right or a substitute for them": B.M.P. Global Distribution Inc. v. Bank of Nova Scotia, 2009 SCC 15, [2009] 1 S.C.R. 504, at para. 75. In reviewing the relevant law, the court, in that case held, at para. 85, that it is possible at common law to trace funds into bank accounts if it is possible to identify the funds.
[99] At the same time, as noted in Citadel, at para. 58, a tracing order at common law, unlike a restitutionary remedy, is only available in respect of funds which have not lost their identity by becoming part of a mixed fund. "Further, the imposition of liability as a constructive trustee is wider than a tracing order in equity. The former is not limited to the defence of purchaser without notice and 'does not depend upon the recipient still having the property or its traceable proceeds'".
analysis
[100] There is no question that the matter before me involves a unique set of circumstances which does not fit squarely into the categories of the prevailing jurisprudence.
[101] For example, both of the causes of action advanced by the plaintiff are rooted in the presumption that the restitutionary cheques given to the defendant came from the monies stolen from HBS, and hence are "trust property". In the particular circumstances of the case, however, that is far from a "given".
[102] The only admissible evidence upon which the plaintiff relies is the evidence of Mr. Hoare as to tracing the funds.
[103] But Mr. Hoare's tracing evidence was seriously challenged and undermined in cross-examination, not only generally when he agreed that his approach to the evidence was one of several that might be used generating different results, but in respect of his conclusions pertaining to each of the amounts in Patel's accounts said to be traced to HBS funds.
[104] The plaintiff contends that $282,452.13 can be traced to trust funds of HBS which comprised most of the $290,000 in restitution cheques given to Raytek. For example, one of the impugned cheques or bank drafts provided to Raytek through the Crown was for $40,000; it given in September 2008. In cross-examination, the following exchange took place:
Q. I understand that your way isolates the $40,000 from the funds in the account, but I'm suggesting to you that once the 40,000 goes into the account it's mixed in with other monies, do we agree, to form that aggregate of $153,669?
A. Yes.
Q. And therefore once it's mixed in, unless we isolate it in the fashion that you describe, we don't know whether the disbursements that take us to the end of September come from the 40, the 113, or a mixture of the two, correct?
A. That, that is correct.
[105] Regarding the withdrawal of $40,000 by Mr. Ramsawak on October 7, 2008, and the payment to CRA, the following exchange occured:
Q. Now you had said in chief that you couldn't provide an opinion that connects that $40,000 payment if it went to CRA to the HBS deposit that happens back on September 17, 2008, correct?
A. That's the – yes.
Q. Yes, and the reason you can't do that is because there's, even on your analysis there's an intervening deposit that happens on October 7, 2008 of $76,268.83 …?
A. Yes.
Q. And you couldn't identify whether the 40,000 that went to CRA was necessarily HBS money or Raytek money?
A. That's correct.
[106] Regarding the $150,000 bank draft that went to Raytek, Mr. Hoare opined that it came out of the ICICI account in the sum of $165,000. He pointed out that the bank draft and the date of withdrawal were the same; and he concluded that the $150,000 bank draft delivered to the Crown on April 10, 2008 must have come from the $175,000 USD that went into the account on February 25, 2008. The following exchange in cross-examination is telling:
Q. But we do know, do we not, Mr. Hoare, that Mr. Patel had stolen other money, right?
A. From HBS?
Q. From my client, $670,000.
A. Yes.
Q. How do you know that the $150,000 didn't come from my client's 670,000 that was stolen from him?
A. I don't know that.
Q. You don't.
A. That's correct.
[107] Tracing at law depends upon receipt by the defendant of the plaintiff's money and the extent of liability depends on the amount received. The fact that Mr. Fisher understood that Patel had received a cheque for $175,000 purportedly from a "rich uncle", and taken $25,000 to pay other debts, does not support a conclusion that the plaintiff's monies funded the restitution. The taking of the $175,000 USD from HBS is not disputed. The ultimate source for the restitution paid is quite another matter.
[108] As previously noted, a tracing order at common law is only available in respect of funds that have not lost their identity by becoming part of a mixed fund. In this case, the plaintiff has been unable to identify the restitutionary funds paid to Raytek as trust funds taken from the plaintiff, on a balance of probabilities. Although there is symmetry of date and amounts in some cases, there is no clear evidence as to the actual funds used for the bank drafts as there were two pools of funds available to Patel at the relevant time.
[109] This finding may well mark the end of the plaintiff's case. I will, however, review the parties' arguments in equity, with the assumption that the funds in issue do constitute trust funds taken by a fiduciary from the plaintiff and passed to the defendant in the form of restitution.
knowing receipt
[110] The plaintiff contends that Ramsawak received and applied trust property for his own use and benefit.
[111] According to Mr. Hoare, of the $282,452 that was paid to Raytek, $150,000 went to Ramsawak; that is, once received, Raytek paid the $150,000 to Milton Ramsawak who paid it into his personal line of credit in the names of Mr. and Mrs. Ramsawak jointly.
[112] There is no question that a payment into the Ramsawaks' joint line of credit at BMO would be to their benefit. The consequences of this were perused with Mr. Hoare in cross-examination as follows:
Q. Yes. Now, you keep – you kept talking in chief about the fact that this was, the $150,000 went into Ramsawak, or Mr. Ramsawak's line of credit? You accept that it's the line of credit of Mr. and Mrs. Ramsawak?
A. Yes.
Q. And therefore the debt that is being paid down is as much Mrs. Ramsawak's debt as it is Mr. Ramsawak's debt?
A. It is a joint line of credit, that's correct.
Q. So each of their – their joint debt, their several debts, is being paid down by the $150,000?
A. Correct.
Q. And the loan advanced $309,000 from the line of credit that occurs in October 2008, you recall that?
A. I think that's a payment from the line of credit to Raytek.
Q. Right, but it's a loan, do we agree?
A. Well it increased the line of credit in Mr. Ramsawak's line of credit.
Q. Increased the debt?
A. Increased the debt, yes.
Q. In Mr. and Mrs. Ramsawak's account?
A. Yes.
Q. And therefore when the loan was advanced it was advanced just as much from Mrs. Ramsawak as it was Mr. Ramsawak?
A. It's a joint line of credit, correct.
Q. You're agreeing with me?
A. Yes.
[113] Ramsawak agreed that he utilized the funds he received from Patel to his benefit, particularly to repay debts incurred by Raytek, including the debt incurred to CRA due to Patel's fraudulent actions.
[114] The payments must be put into context, however, in that the line of credit was taken by the Ramsawaks jointly and Mrs. Ramsawak is not a party to this action. Thus, only a portion of the monies ($150,000) used to pay down their joint debt would enure to the benefit of Mr. Ramsawak.
[115] Moreover, the $309,000 taken from the line of credit to pay CRA would have the net result of increasing their joint debt to BMO in that amount.
[116] It is difficult, therefore, for this court to find that the trust property, even assuming that this aspect had been proven, was, in the rather peculiar situation here, received and applied by Ramsawak for his "own use and benefit" within the meaning of the case law, or that Ramsawak was "enriched" at the plaintiff's expense.
[117] The second criterion demands an assessment of knowledge – the defendant's constructive knowledge prior to October 6, 2008 when he learned of the second fraud, and his actual knowledge later, after he was told about it.
[118] The plaintiff contends that Ramsawak should have known about the illicit sources of the restitution payments, since he knew Patel was a thief, had no knowledge of any employment on his part and pursuant to an order freezing Patel's assets, had only identified assets entitling him to about $77,000 in total. The inference is that these facts would have put a reasonable person on inquiry as to the source of the payments made.
[119] In addition to this, Mr. Title did not believe what he was told by Mr. Sandler that Patel's family was the source of the payments. Instead, he believed that Patel had taken Raytek's money and perhaps put it under the control of family members.
[120] Nevertheless, Mr. Title placed some reliance on Mr. Sandler's and Mr. Fisher's experience and knowledge of the matter. It was they who inquired into the source of the payments as they were bound to do; it was they who accepted Patel's story as to the source of the funds; and it was they who acted as a "conduit" for the monies paid over to Raytek. Indeed, the vague suspicions of Mr. Title would serve only to enhance his belief regarding the legitimacy of the payments made to the defendant rather than suspect an ulterior source.
[121] The plaintiff relies on Treaty Group Inc. (c.o.b. Leather Treaty) v. Simpson, [2001] O.J. No. 725 (S.C.J.), an action by an employer for reimbursement of monies stolen by the employer's former bookkeeper. The employer also sought damages against the bookkeeper's husband. The court found liability on the part of the husband in that he was enriched at the expense of the plaintiff having had knowledge of facts which would have put a reasonable person on inquiry. The husband knew that the wife had been convicted of fraud twice before for similar frauds, that she had obtained employment as a bookkeeper for the plaintiff and that his wife's expenditures were beyond their means.
[122] That fact situation encompasses a very different "knowledge" component than that posed by the plaintiff here.
[123] This case is also distinguishable from Holmes v. Amlez International Inc., [2009] O.J. No. 4513 (S.C.J.), in which the defendant, who was closely associated with the fraudster if not a party to the actual fraud, negotiated cheques from the victim even though he had actual knowledge of the allegations against the fraudster. The court commented, at para. 17, that it was "hard to imagine stronger evidence of 'knowing receipt'". The defendant had "fail[ed] to identify any legitimate basis for his receipt of funds" and failed to provide any evidence to that effect, at para. 19. In the instant case, the defendant had a legitimate basis for his receipt of funds. There is no question that he received the funds legitimately as an innocent bystander who had himself been defrauded. The monies were received in good faith and in innocent ignorance of the fraud which may have given rise to the payments.
[124] The defendant has not been shown to have constructive knowledge of any facts that would have put a reasonable person on notice or inquiry prior to October 6, 2008.
[125] As of the date the defendants were told that the restitution had been obtained, at least in part, by fraud, they held $190,000 in "trust" funds, according to the plaintiff. The information they received from Mr. Fisher on October 6, 2008 was that there would be no more restitution and Patel's bail would be revoked since the restitution cheques were fraudulent.
[126] I accept Mr. Title's evidence that he was not told at the time who was defrauded or how.
[127] Was this sufficient information to have put a reasonable person on inquiry? Did the defendants dissipate property in the face of actual knowledge, as alleged?
[128] The answer lies in the questioning of Mr. Ramsawak by plaintiff's counsel. When asked in discovery why he made a payment to CRA on October 30, 2008 by borrowing from the line of credit he answered:
A. I truly was trying to offload all the worries and that kind of thing that surrounded the amount of money that we owed CRA and thought that was the way to do it.
[129] And later:
Q. And now knowing that those monies that had been paid into your home were the subject of a fraud alleged by the Crown, you then didn't have any concerns about taking those monies to pay CRA?
A. I had no idea at that time, in terms of where the monies were coming from, but really no intent to do anything wrong in terms of paying that 309,000 down on the CRA account.
Q. You just said you "had no idea where the monies had come from", but you will agree with me, sir, that you knew by October the 6th, though, that the Crown was alleging at that point, that the monies had come from a fraud on my client?
A. Yes.
Q. So, knowing … or at least suspecting that the monies that you had paid into ... to use to pay down your line of credit were possibly from my client, you didn't have any concerns of taking those monies and paying them to CRA?
A. Honestly, Mr. Lerner, like, I never had any thoughts like that at all. I was concentrating so much in terms of paying the debt, that's all. Like, never …
[130] Mr. Ramsawak gave similar evidence at trial; when examined in chief, he gave these answers:
Q. Mr. Ramsawak, when you paid the 309,000 to CRA whose money did you think that was?
A. My wife and I.
Q. And when you paid the 40,000 to CRA, whose money did you think it was?
A. Raytek's money.
[131] His belief was not challenged in cross-examination.
[132] Ramsawak gave his evidence in a straightforward and rather understated manner. I found him to be an exceedingly credible witness. His evidence as to the constant pressure placed upon him and his wife to pay the debt owed to CRA due to Patel's actions was amply confirmed in the documentation filed.
[133] As noted, a recipient of "trust funds" is not expected to be unduly suspicious. In my view, it has not been shown that Ramsawak went ahead without further inquiry in circumstances in which an honest and reasonable person would have realized the monies taken were probably trust money and were being misapplied. The major part of the $670,000 stolen from Raytek and discovered in 2005 had never been recovered. The restitutionary cheques were transferred from Patel's counsel, Mr. Sandler, to the Crown and provided to Raytek under cover copied both to the investigating officer and to Mr. Sandler. The last restitution cheque was provided to Raytek on September 17, 2008, prior to the detection by HBS of the fraud perpetrated against it. A reasonable person would, in these particular circumstances, have believed, as did Ramsawak, that he had a lawful claim to the "trust property". This is a very different factual and legal nexus than that found in Air Canada v. M & L Travel Ltd., 1993 33 (SCC), [1993] 3 S.C.R. 787, where the director of a company was held personally liable for knowing participation in a breach of trust.
[134] The plaintiff's claim based on "knowing receipt" must therefore be dismissed.
unjust enrichment
[135] The defendants do not dispute that they received a benefit by means of the restitutionary payments and, for our purposes, that the plaintiff may have sustained a corresponding deprivation.
[136] They submit, however, that there was, in these circumstances, a valid juristic reason for the enrichment, and that the defendant acted in "commercial good conscience", based on the following:
The defendants had a civil judgment against Patel and his spouse that remained outstanding and upon which they were unable to realize.
The whereabouts of the proceeds of the Raytek fraud were not and have never been determined.
Patel had pled guilty in 2007 to the fraud on Raytek.
Under the agreement with the Crown, Patel was under a duty to make restitution to the victims of the fraud and the defendant placed reliance upon this.
The impugned funds were applied for commercial purposes and payments to third parties for debts largely incurred by the illegal actions of Patel, including the debts to CRA.
The payment of $309,000 to CRA had the effect of increasing the personal liability of Ramsawak and his spouse.
At the same time, the payments would reduce the judgment debt owed by Patel which in turn reduced Raytek's share of any recovery that might be gotten from Patel's assets.
[137] In my view, a combination of these factors constitutes a juristic reason for conferring a benefit on the defendant in these circumstances.
[138] Ramsawak changed his position in good faith by applying the restitutionary funds to the financed shortfalls caused by Patel's fraud on Raytek. He has a lawful claim to the "trust property". Indeed, the doctrine of equitable tracing does not apply where no fault is attributed to the defendants and the funds are applied for bona fide purposes. See, for example Gareau Estate (RE), [1995] O.J. No. 2117 at para. 27.
[139] As noted by Cromwell J. in Kerr, at para. 34, each case must be determined and the principles applied with flexibility and common sense and in ways that respond to the particular context in which they operate. In this case, there was no evidence of intentional dissipation of trust assets, as alleged; and no unjust enrichment of the defendants has been proven.
[140] I find, in this situation, reasons in law and in justice for the defendants' retention of the benefit conferred on them by the receipt of the funds paid to Raytek as restitution in the criminal proceedings.
[141] There is no basis for an award to the plaintiff on unjust enrichment or restitutionary grounds.
conclusion
[142] I find no merit in the plaintiff's action on either a factual or legal basis. The plaintiff's action is dismissed with costs to the defendants. Though the parties have submitted a range of costs on a partial or substantial indemnity basis, there may well be matters of which I am not presently apprised.
[143] If the parties are unable to agree on costs, I will entertain brief written submissions not to exceed three pages in length, within 15 days of the release of this judgment.
CHAPNIK J.
RELEASED: October 11, 2013