COURT FILE NO.: 12-70000842-0000

DATE: 20140313

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

HER MAJESTY THE QUEEN

Eugene McDermott, for the Respondent

Respondent

• and -

ELLIOTT GERSTEIN

Devin Bains and Pamela Zbarsky, for the Defendant/Applicant

Defendant/Applicant

HEARD: December 9-13, 2013, January 13-15, 21-22, 2014 at Toronto, Ontario

Michael G. Quigley J.

Reasons for Ruling

Re: (i) Charter, ss. 11(b) and 24(2), and

(ii) Charter, ss. 7 and 24(2) Abuse of Process

I Overview and summary............................................................................................................. 2

II Facts.......................................................................................................................................... 4

(i) Discovery of fraud and recovery efforts: December 2005 to August 9, 2006.................. 4

(ii) Police Investigation: August 9, 2006 – December 5, 2007............................................... 5

(iii) Proceedings in the Ontario Court of Justice....................................................................... 6

(iv) Preliminary Inquiry before Justice Sutherland.................................................................... 8

(v) Superior Court of Justice (SCJ)......................................................................................... 12

(vi) The complainants’ efforts to obtain civil recovery........................................................... 12

III Application under Charter s. 11(b)....................................................................................... 14

Applicable legal principles......................................................................................................... 14

Disclosure.................................................................................................................................. 16

The length of delay................................................................................................................... 18

Waiver of time periods.............................................................................................................. 18

Reasons for the delay................................................................................................................ 18

(a) Inherent time requirements.......................................................................................... 19

(i) Intake Delay:................................................................................................................ 19

(ii) Neutral Delay:............................................................................................................... 20

(iii) Impact of disclosure on characterization of inherent delay:......................................... 20

(b) Actions of the accused.................................................................................................. 22

(c) Actions of the Crown.................................................................................................... 23

(d) Institutional Delay........................................................................................................ 24

Prejudice.................................................................................................................................... 25

Conclusion on the application for a stay pursuant to s. 11(b)................................................... 27

IV Application under Charter ss. 7 and 24(1)............................................................................ 28

Abuse of Process....................................................................................................................... 28

Conflict of Interest.................................................................................................................... 32

V Conclusion.............................................................................................................................. 35

SCHEDULE 1.......................................................................................................................... 36

(i) SUMMARY OF ALLOCATION OF DELAY:............................................................. 36

(ii) CONCLUSIONS RELEVANT TO 11(b) ANALYSIS:................................................. 36

(iii) DETAILED BREAKDOWN OF DELAY...................................................................... 37

I Overview and summary

1Elliott Gerstein is charged with seven counts of fraud over $5,000. He is claimed to have embezzled almost $8,000,000 between 1998 and 2005 from a number of private companies controlled principally by two groups: his own family, the Gersteins, and members of the Mintz family.

2The alleged fraud was discovered in November, 2005. Mr. Gerstein was charged on December 5, 2007. His trial was scheduled to run for five weeks commencing February 18, 2014. It was to be completed by the end of March 2014. That means that about 75 months, or six years and three months, will have passed from the date he was charged until the date when he will have had his trial.

3The applicant claims that a delay of 75 months from the time he was charged until he would be tried is excessive, unreasonable and violates his right to be tried within a reasonable time under s. 11(b) of the Canadian Charter of Rights and Freedoms (“Charter”)¹. He claims to have been seriously prejudiced by the delay. He asks the court to stay the charges against him to remedy that violation.

4Mr. Gerstein has also brought a second Charter application under ss. 7 and 24(1) in which he claims that the proceedings before this court ought to be stayed as an abuse of process. Alternatively, he asks the court to exclude the evidence at his trial of (i) the Grant Thornton (“GT”) forensic accountant who was retained by Toronto Police Services (“TPS”) in this matter and (ii) the LECG forensic accountant who did the initial forensic work on this matter for the civil complainants who sought to recover the embezzled monies from Mr. Gerstein. In both cases, apart from the abuse of process argument, the request to exclude evidence is based on Mr. Gerstein’s claim that both LECG and GT were in a conflict of interest position that irreparably taints their work product.

5These applications were heard at separate times but they are linked since the evidence regarding abuse of process and conflict relates to periods of time close to the beginning of the police investigation, a period of time that is significant for the purposes of the s. 11(b) application. Since the entire investigation was alleged to have been tainted, not only by the retention of the GT firm by TPS but also the reliance placed on the LECG work product, I heard the evidence relating to both applications in order to have a full understanding of the evidentiary context within which both requests for relief were made.

6In summary, looking first at the applicant’s claim of an abuse of process under ss. 7 and 24(1), I would dismiss that application. In my view the application was without merit. There was no reliable basis to conclude and I was not persuaded on this evidence that the TPS acted as a state agent for these civil complainants in proceeding with charges against Elliott Gerstein. On the contrary, I was satisfied that Detective Field conducted his own investigation and reached his own conclusions that were the foundation for his decision to lay charges against this applicant. He did not just rely on the information that was disclosed to TPS by the complainants and the independent forensic audit work of the GT firm supported the conclusions he had reached. The Gersteins may have hoped to avoid criminal prosecution of Elliott Gerstein by settling the claims of the complainants for monetary restitution, but I saw no reliable evidence that established or supported either threats of criminal prosecution or promises of immunity unless a substantial restitutionary amount was paid.

7Not only was that aspect of the application without merit, but neither in my view was there a conflict of interest here relative to Elliott Gerstein himself that could reasonably have required or called for the exclusion of either the LECG or the GT work product. LECG was not in a conflict relative to Elliott Gerstein, although they do appear to have been in a conflict relative to an unrelated third party as discussed further in these reasons. As for GT, it had no conflict in undertaking the TPS forensic retainer regardless of the fact that they acted as Mr. Gerstein’s trustee in bankruptcy. I reached that finding since Canadian bankruptcy law makes clear that the duty of the trustee is to the bankrupt estate, not the bankrupt. That point also is discussed further later in these reasons.

8However, regardless of what I would have decided relative to the abuse of process motion and apart from the conflict of interest issues which are important to address, that application is essentially moot. That conclusion must follow because of the findings I reach on the application for the charges to be stayed under s. 11(b) of the Charter.

9While it gives me no joy to reach this conclusion, I have no doubt that the length of time which was and would be permitted to pass here from the laying of charges against Elliott Gerstein to the end of his trial at the beginning of March, 2014 cannot be justified and cannot pass constitutional muster. It is not acceptable on any fair or reasonable interpretation of even the most expansive and forgiving of the cases dealing with a relatively simple fraud of this nature, or even those dealing with complicated frauds.

10I am required to balance the reasonableness of the delay against all factors in this case and the interests which s. 11(b) is designed to protect, recognizing not only society’s interest in seeing an accused tried, but also the public’s interest in the prompt and fair administration of justice. It is evident to me in carrying out that balancing of interests that the constitutional right of the accused to be tried within a reasonable time was violated in this case.

11I have concluded that the delay attributable in this case to the Crown and institutional factors totals over three years. That exceeds the amount of permitted Crown and institutional delay established in R. v. Morin² and other cases by at least 19 months. It is double the permitted delay contemplated in Morin. Further, in addition to the prejudice that I have inferred, I am satisfied that the length of the delay in these proceedings has also been the cause of specific prejudice to the applicant. As such, the application must succeed on the basis that Mr. Gerstein's right to trial within a reasonable time as guaranteed to him under the Charter has been breached. There is only one remedy – the charges must be stayed.

II Facts

12This case arises in the context of a real estate investment and management business that has been carried on in partnership by two families since the 1960s. The accused, Elliott Gerstein, is a son of one of the founders of that business. Elliott’s father, Sydney Gerstein, formed that partnership with Saul Mintz and later his brother Irwin Mintz, who is known as “Al.”

13Initially, their business involved constructing and buying apartment buildings, but in the 1970s, the owners decided that they needed a separate entity to manage the increasing number of properties they owned. They established Grover Realty to manage the properties. The family businesses were very successful, including Grover Realty. They grew from nothing to an enterprise that employed many if not all of the Gerstein and Mintz children and their extended family, both as owners and as employees. In addition to the accused, other family members employed included Howard Mintz, Harley Mintz, Donnie Mintz, Michael Farberman, Sharon Gerstein and members of the Wosniak family.

14Elliott Gerstein started at Grover Realty in 1991. He was given the title of office manager. He is accused here of having taken $7,734,022.54 in monies for his own personal use from the complainants, Grover Realty, the Mintz family, and seven corporate entities all managed by Grover. The Gerstein family also has a substantial interest in those entities, indeed possibly the most substantial interest, so it would also have lost significant monies as a result of the diversion of funds by Elliott Gerstein to his use. This alleged fraud occurred between 1998 and 2005.

(i) Discovery of fraud and recovery efforts: December 2005 to August 9, 2006

15Al Mintz claims to have discovered the fraud in November, 2005, but also said he had earlier suspected irregularities. On November 14, 2005, he asked the Grover Realty bookkeeper and the accounts clerk about a cheque made out by Elliott Gerstein to a company called “Accusash”, but neither of them knew of that company. Further investigation revealed further irregularities. Numerous cheques written to Accusash and in payment of Visa credit card accounts were missing supporting documentation. It was discovered that substantial cheques had been made payable to “cash.”

16Initially, the focus was on both Elliott Gerstein and Howard Mintz, a property manager for Grover Realty whose signature was on at least one irregular cheque. He denied signing any of the cheques. That left the focus on Elliott Gerstein. The Mintzs suspected and accused him of having diverted monies from the family company’s for his own benefit.

17On November 15, 2005, the Mintzs retained Brian Heller, a well-known criminal lawyer with whom they were acquainted. They wanted him to find out how much money had been taken and to pursue repayment and obtain recovery of the embezzled funds. Then Al Mintz retained Glen Harloff of the LECG forensic accounting firm in December of 2005 to conduct a forensic audit of the alleged loss. Mr. Harloff obtained approximately 37 bankers’ boxes of financial documentation and material from Grover Realty. Over time, he obtained many more. By the end of the matter, 93 boxes had been provided. In July, 2006, Glen Harloff prepared an affidavit of his conclusions based on his review of those materials.

18The efforts made by the Grover Realty investors to recover the funds allegedly taken by Elliott Gerstein commenced in earnest after the defalcation was discovered. Not only did the Mintzs retain Brian Heller, but also a very senior and well known civil litigator, Mr. Larry Banack, to act as their counsel in pursuing that civil recovery. He received reports from LECG relative to the sources and quantum of funds defrauded. Mr. Brian Gover of Stockwoods, who at that time was counsel to the accused with respect to criminal matters and the potential charges he could face, was also involved in that process.

19During the eight months that preceded the report of the crime to TPS, the LECG firm quantified and documented the extent of the fraud. It calculated that Elliott Gerstein had taken $7.6 million from Grover Realty and related companies.

20The evidence showed that there were several discussions between the Gersteins and the Mintzs during this period relative to restitution. The foundation for those discussions was allegedly that the Gerstein family, which had itself suffered very significant loss at the hands of their son Elliott Gerstein, would reimburse and make restitution to the Mintzs and the other investors for the sums he had taken illegally.

(ii) Police Investigation: August 9, 2006 – December 5, 2007

21On August 9, 2006, the matter was reported to the TPS. The complainants formally commenced civil claims seeking recovery of the stolen monies at the same time. Mr. Harloff and Mr. Heller met with Detective Sergeant Gary Logan, the head of the corporate section of the Fraud Squad at that time. Mr. Harloff provided D/Sgt. Logan with a letter and a binder of material that included his Affidavit. D/Sgt. Logan said he would have the file assigned to a senior officer and he advised them that TPS would move forward with an investigation.

22D/Sgt. Logan ultimately assigned Detective Allister Field as the original officer in charge of this case, but evidently not until late 2006 or early 2007. Det. Field was not present at the August 9, 2006, meeting, but ultimately he received the two boxes of materials that came from Grover Realty and that had been provided to TPS at the August 9 meeting along with Glen Harloff’s affidavit.

23Between his assignment and December 2007, Det. Field investigated the fraud, evaluated the material he had received, interviewed witnesses, obtained additional cheques and transaction records beyond those originally provided, prepared production orders, and on the basis of those orders, received bank statements and Visa statements from the financial institutions involved, all in furtherance of his investigation.

24TPS had an ongoing retainer to use the GT accounting firm as its expert forensic accountant in cases of suspected fraud. Their role was to review the books and records involved, to prepare a compilation and quantify the alleged loss, to assist the TPS with the case, and to give expert testimony when such matters came to trial.

25There were discussions in late April of 2007, between Mr. Heller, Mr. Harloff, and Det. Field where the issue arose of retaining GT at that time. It was raised because Elliott Gerstein had made a proposal in bankruptcy to his creditors by then. Some of his creditors were complainants in this matter. However, Mr. Gerstein’s proposal was rejected by his creditors, which led him to file for bankruptcy in late March or early April of 2007. Mr. Ray Godbold, a partner of GT and a licenced Trustee in Bankruptcy, was appointed by the court as the Trustee of Mr. Gerstein’s bankrupt estate.

26There was a record of a call on April 7, 2007, between Mr. Heller and D.C. Walter about whether Mr. Heller had raised the possibility with Det. Field that another forensic accounting firm should be retained to draft a report for the case. That issue appears to have been raised out of concern that GT might be in a conflict of interest since they had already accepted the appointment as Trustee in Bankruptcy of Mr. Gerstein’s bankrupt estate. However, no further inquiries were made nor were further steps taken at that time to determine whether there was an actual conflict of interest.

(iii) Proceedings in the Ontario Court of Justice:

27As noted, initially Elliott Gerstein had retained another lawyer as his counsel in this case, but on September 19, 2007, he changed counsel and retained Mr. Devin Bains to represent him.

28Elliott Gerstein was charged with seven counts of fraud over $5,000 on December 5, 2007. They related to (i) Brenthall Apartments Limited, Chelsandy Developments Limited, Luray Investments Limited, and 746190 Ontario Limited from January 1, 2000, to December 31, 2005; (ii) 375685 Ontario Limited and Pauldor Developments Limited from January 1, 1998, to December 31, 2005; and finally (iii) to Lilliana Buildings Limited from January 1, 2001, to December 31, 2005.

29Between December 5, 2007 and August 19, 2008 when the date for the Preliminary Inquiry was set, normal intake and pretrial procedures were conducted, and disclosure was provided to the defence. The initial disclosure consisted of two to three bankers’ boxes of material. It was provided to defence counsel on February 25, 2008. During this period, defence counsel reviewed the disclosure they had received, wrote for clarification, requested further disclosure, and obtained and reviewed that further disclosure.

30Specific information was solicited. In response, the defence was told (i) that the only forensic auditors/accountants involved were Glen Harloff and Kelly Malcolm of LECG; (ii) that the material initially provided to the police had come from LECG; (iii) that there were no written policies at Grover Realty pertaining to accounts payable and receivable; (iv) that all cheques had been provided (except for legible copies of the previously disclosed illegible copies of the backs of some cheques); and (v) that there was no material not being disclosed for any reason that the OIC was aware of. Defence counsel was told that no further forensic reports would play a part in the prosecution.

31On August 19, 2008, the parties set dates for the Preliminary Inquiry. It was scheduled for August 4-14, 2009. The first dates offered commenced on April 20, 2009, but defence counsel was not available until August.

32Det. Field left the TPS on August 17, 2008. D.C. Bjorn Walter was assigned to take over the case as interim OIC.

33Counsel for the Crown and counsel for the defence agree that this initial period of eight months and 14 days is intake time that constitutes inherent delay for the purposes of the analysis.

34In September, 2008, Det. Christopher Dionne began working on the case. He became the new officer-in-charge after D.C. Bjorn Walter left the TPS over the winter of 2008-2009.

35Before he left, however, D.C. Walter spoke to Mr. Bains on the telephone on October 8, 2008. He sent an e-mail the next day confirming the contents of the call. The e-mail indicated that LECG had advised the police in September, 2008 that they had possession of 60 boxes of documentary material belonging to Grover Realty and that “it was determined at this time that the police should seize these boxes to safeguard any evidence.” D.C. Walter understood that some of the evidence against Mr. Gerstein had been “culled” from these boxes by LECG. The e-mail further confirmed to defence counsel that GT was conducting a forensic audit which would include a review of those 60 boxes.

36D.C. Walter told Mr. Bains that he wished that the contents of the boxes could be provided to the defence, but that they would not be provided due to resource limitations. He told Mr. Bains that the defence would be permitted to have access to the contents of the boxes, but only (i) at GT’s offices and even then, (ii) only in the presence of a police officer or employee of GT, and (iii) only after GT completed its own preliminary examination of the boxes. Based on what he claimed to have been told by LECG, D.C. Walter tried to reassure defence counsel that the content of the additional boxes was not material to the case against Mr. Gerstein, but he admitted he would not be able to say for sure until he received GT’s report. He promised to provide a copy of GT’s report in a timely manner, after he received it.

37It is not surprising that defence counsel was stunned to receive this information. He responded by e-mail a week and a half later sending a copy to the Crown’s office. Given that the preliminary inquiry dates had been set on the basis of only 2 bankers’ boxes of disclosure that had been received, he was “taken aback” to learn of a further 62 boxes of disclosure (in fact, there were 90 boxes in the end). He rejected the proposed inspection procedure to review the documentation under restrictions and without privacy at GT’s offices as unsatisfactory from a practical perspective and legally unacceptable in any event. The Crown was not entitled to decline to deliver material that qualified as disclosure merely because of resource constraints. Defence counsel requested that the new disclosure be copied and provided in a timely way. He specifically noted that the preliminary inquiry might have to be delayed or not completed if the disclosure was not provided on a timely basis.

38The Crown assigned to the case at the time responded to Mr. Bains’ letter on October 21, 2008. He took the position that the boxes of materials “were not disclosure,” and that they did not relate to the case against Mr. Gerstein. He said they were merely “business records,” but he also acknowledged that they were being reviewed to ensure that they did not contain relevant material. If relevant material was found, it would be disclosed.

39Mr. Bains protested that he had the right to be provided with that disclosure as soon as possible, noted P.C. Walter’s concession that the material would have been disclosed but for resource constraints, and urged the Crown to provide the disclosure as soon as was practicable. In a curt response dated November 3, 2008, the Crown Attorney responded: “You have the Crown’s position with respect to these materials,” but no details or specifics were provided to support that position.

40More than six months later, approximately two months before the Preliminary Inquiry was to commence, Det. Chris Dionne sent a further e-mail to defence counsel on June 18, 2009. He advised that GT had completed their review and “has confirmed that there is nothing of evidentiary value in the 60 extra boxes which we brought to your attention last year.” Then, two weeks before the preliminary inquiry, Det. Dionne called to inquire whether Mr. Bains’ office knew that a new forensic report from GT was now available. Defence counsel was unaware of that report because D.C. Walter had neglected to notify him while Det. Dionne was absent on vacation.

41Later that day, the newly assigned Crown Attorney, Assistant Crown Attorney Eugene McDermott, called to advise that a GT report would be available soon. The very next day, a Canada Evidence Act notice was served. Even so, the report was still not forthcoming. A week before the Preliminary Inquiry, defence counsel (i) still did not have the expert forensic report upon which the Crown intended to rely at the preliminary inquiry (he received it later that day), (ii) had not been informed that the GT forensic accountant was going to testify, and (iii) had just learned that the new report was based in part on the 60 boxes that the Crown’s office had refused to disclose eight and a half months earlier.

42There were also events that transpired during this period relative to the civil efforts of the complainants to recover the allegedly defrauded monies from Elliott Gerstein, as described in greater detail below under heading (v).

(iii) Preliminary Inquiry before Justice Sutherland

43The Preliminary Inquiry commenced before Justice Sutherland on August 4, 2009, and continued for the following 10 days. A number of the members of the Mintz family testified, as did several of the Grover Realty staff. On the first day, Janet Londry, and retired Det. Allister Field testified. The next day, Glen Harloff testified.

44After being retained, he received an initial 37 boxes of material from the Mintz family on December 10, 2005. He and his team reviewed the material from the 37 boxes and put it into spreadsheets for analysis. That material formed the basis for his report. Mr. Harloff also prepared the letter that accompanied the documentation provided to the TPS on August 6, 2006 and that was meant to serve as the “complaint by the Mintz family.” The TPS told him there would be a criminal investigation, and requested more documentation which Mr. Harloff obtained, organized, and provided.

45Det. Dionne was asked about the 60 boxes that had not yet been provided to the defence. When he took over the case in September, 2008, he thought the Gerstein investigation was “more or less completed,” but he helped to transport the 60 boxes to GT for their forensic analysis. Det. Dionne knew of the disclosure issue, that copying the boxes would be time consuming and costly, and that the availability of personnel and equipment was very limited. Important to the chronology, Det. Dionne confirmed that it was after his discussions with the Crown’s office that the Crown Attorney assigned to the case at that time, Mr. Mitchell, took the position that the documents were not disclosure and would not be copied and provided to the defence.

46Det. Dionne had no direct knowledge of what documents were in the additional 60 boxes. He knew they were evidence which had not been disclosed, but plainly, had no knowledge that those boxes of documents were of evidentiary value for the purposes of the GT Report. He acknowledged that the defence should have received the boxes, but for a photocopying problem and a lack of government resources.

47On the following days, the court heard the evidence of Harley Mintz, Saul Mintz, Morris and Ettie Wosniak, and Sydney Gerstein. Irwin (Al) Mintz and Breida Fenlon, the accounts clerk, also testified. They all testified under the protection of section 9 of the Ontario Evidence Act and section 5 of the Canada Evidence Act.

48Finally, David Melamed commenced his testimony on August 11. He was the GT forensic accountant and was qualified as an expert in forensic accounting. He acknowledged that he had been provided with “some 63 boxes of financial documents” from the TPS, which he (and his team) reviewed for his report. He said the material was useful to his analysis. He denied having ever advised anyone at TPS that the contents of the 60 boxes were not material to the case.

49As his cross-examination continued, Mr. Melamed advised that he had also been provided with further boxes of material in addition to the 60 boxes he had previously described. This revelation came like a lightning bolt, and it was a key moment in the chronology. By this point it was plain that the undisclosed material formed part of the Crown’s case. Minutes later, as Crown counsel relented, he advised the defence that the Crown would now provide copies of the boxes of disclosure that had previously been withheld, and which included all of this material relied on by the expert.

50It was becoming apparent that the Preliminary Inquiry could not be completed that week. Defence counsel would now have to consult with experts and review the 60 or more boxes of materials that would be provided. Mr. McDermott confirmed his view that the materials were relevant and ought to have been disclosed. He had not personally made the earlier decision not to disclose. That decision was made by the Crown Attorney’s office, possibly or probably by Mr. Mitchell, before Mr. McDermott was assigned to the case. Nonetheless, consistent with the high standards Mr. McDermott exhibited throughout these hearings, he showed that discretion was the better part of valour when he declined to comment on whether that had been “an appropriate decision, or not.” That was a credit to Mr. McDermott. Plainly the decision was not appropriate.

51Regardless, the unavoidable result was that Mr. Melamed’s testimony could not continue until the defence had reviewed the boxes of documents. To add further insult to injury, Mr. McDermott had to inform the defence that he had been told that it was the formal position of the Crown’s office that the Crown would not pay for the copying of the disclosure. It would instead make the boxes available to the defence who could pay to have it copied at its own expense! Ultimately, five and a half months later, the Crown relented on that as well, and agreed to pay for the copying, as it ought to have done in the first place. This of course occasioned further delay.

52Before it concluded on August 14, 2009, Crown and defence counsel obtained dates for the continuation of the preliminary inquiry on October 1, 2, 5, 6, and 19 of 2009. The matter was adjourned to October 1, 2009 to continue before Justice Sutherland.

53By that date, however, the 60 boxes had still not been disclosed. P.C. Walters acknowledged in his evidence that he became aware of approximately 50 additional boxes of material that had not been disclosed on September 4, 2008. At that time, he acknowledged that he had spoken to Mr. Froese at LECG and Det. Field as well. Field advised that those boxes were evidence and would be required for GT’s forensic audit.

54At both the preliminary inquiry and before me, P.C. Walter explained the difficulty of copying the content of the boxes. In the face of a government the size of that in this province, it was nevertheless claimed that only one clerk was available to copy/scan the paper in the boxes, which was old, of different sizes and would not go through the scanning machine. It would take nine months to get the 60 boxes scanned. That was not going to work as far as D.C. Walter was concerned, given the dates that had been set for the Preliminary Inquiry. He acknowledged in his evidence that there was internal discussion between the Crown Attorney’s office and the police on how the dates set for the preliminary inquiry would be negatively affected if the disclosure was provided.

55Brian Heller testified on October 6, 2009. He produced a memorandum dated September 18, 2008, where he noted having been contacted by P.C. Walter about the 50 boxes of material in possession of LECG and told that TPS was interested in obtaining those boxes to have an external accounting company review them. Beyond this, the preliminary inquiry could not be completed at that time because the additional boxes of documents had not yet been disclosed to the defence.

56As time passed, debate continued about who would pick up the cost of copying. The Crown was trying to get defence counsel to pay for a significant portion of the copying cost. This led to a pretrial before Justice Sutherland on November 3, 2009 where, I was surprised to learn given the delay issues that had started to emerge, that the sole issue was the cost of providing the disclosure to the defence.

57Justice Sutherland expressed his strong opinion that if there was an obligation to produce disclosure by the Crown to the defence, then it was the Crown who had the obligation to absorb the cost of reproducing the material. He saw no basis to vary the rule any more than I do, simply because it might cost the Crown money to comply with their obligation. It was also incumbent on the Crown to pay for that cost since those documents might be made exhibits. Six or seven weeks later, the Crown finally advised the Court on December 21, 2009 that the government had relented and approved the cost. It was hoped the copying job would take four weeks – very optimistic indeed.

58The first installment of copied documents was delivered on February 2, 2010 (34 bankers’ boxes and 5 smaller boxes), and then provided to the defence forensic accounting firm, Matson Driscoll & Damico (MD&D) so that a review of the materials could commence. 30 further boxes were received six weeks later on March 17, 2010, and the final boxes on March 23, 2010. The total number had grown to 93 boxes (comprising of 88 bankers’ boxes and 5 smaller boxes).

59Plainly, the defence and its experts needed a reasonable amount of time to review that disclosure. By September 29, 2010, the defence had completed a full review of the materials. Counsel obtained dates for the continuation of the preliminary inquiry before Justice Sutherland, but they were a full year into the future: 4 days commencing on September 6, 2011 and another 5 days commencing on October 3, 2011 (to October 7, 2011). The first date the court and Crown were available was April 26, 2011 (the first Court date offered was March 14, 2011). Mr. Bains was not available until September 6, 2011. The continuation of the preliminary inquiry was set to continue on those days.

60Things went from bad to worse when counsel learned on June 30, 2011, that Justice Sutherland had suffered a very serious illness. On July 5, 2011, the matter was brought forward to address the continuation of the preliminary inquiry in light of Justice Sutherland’s illness. It soon became apparent that the September 2011 dates would need to be vacated, and soon after that it became plain that Justice Sutherland would never be able to continue to preside over the matter again. After two pre-trials before Justice Moore, the matter was then reassigned to Justice Horkins, and the preliminary inquiry was scheduled to continue, but not until November 19-30, 2012, yet another year down the road. The first dates available to the court were May 14-25, 2012, but defence counsel was not available at that time.

61From November 19-30, 2012, the preliminary inquiry continued before Justice Horkins. On November 30, 2012, he committed the applicant on all counts. The defence still wished to conduct some further discovery. Mr. Gerstein was then committed for trial on consent and the matter was remanded to December 19, 2012, in the Assignment Court of the Superior Court of Justice.

(iv) Superior Court of Justice (SCJ)

62Mr. Gerstein attended Assignment Court in Superior Court of Justice on December 19, 2012. A judicial pre-trial had been scheduled for February 5, 2013. On that day, Justice Croll pre-tried the matter. However, since the matter should not have been placed on the short trial list (it was a long trial list matter) it had to be remanded to February 20, 2013, for Special Assignment Court.

63On that day, the matter was scheduled to return for a further judicial pre-trial before Justice Nordheimer in order to schedule the trial.

64On March 6, 2013, at that further pre-trial, Justice Nordheimer was advised that there had been a judicial pre-trial and that the trial date had been scheduled commencing February 18, 2014 for five weeks before judge and jury. At subsequent appearances, dates were set for these pre-trial motions, and for further pre-trial discovery.

(v) The complainants’ efforts to obtain civil recovery

65As I previously noted, the Mintzs retained both Brian Heller and Larry Banack to seek recovery of the stolen monies. Mr. Banack was retained in November 2005, through Grover Realty and he understood that his job was to investigate the nature of the claim and to aggressively pursue civil recovery of the monies taken from Grover Realty. He pursued the file with vigour and determination. In the next six weeks he became satisfied that a significant amount of money had been misappropriated, in the range of $6,000,000 to $9,000,000. He called a meeting of the principals early in the New Year. He wanted everyone to know the information that had been discovered by that time, and to start to determine if restitution was possible.

66Mr. Banack testified that there were a number of discussions that took place between the parties concerning the magnitude of the defalcation and the range of companies within the corporate family that were affected, and how each of them had been victimized. At a meeting in January 2006, a meeting attended as well by Elliott Gerstein’s father, Sidney Gerstein, there was a discussion about resolution but no resolution was achieved. Shortly after, Mr. Sidney Gerstein's counsel, Rob Harrison resigned because of a conflict and he was replaced by Peter Roy.

67Mr. Banack testified that he was aggressively pursuing recovery. He became concerned, however, when Mr. Roy, as new counsel for Mr. Sidney Gerstein, allegedly stated that “nothing would keep Elliott out of jail.” That concerned Mr. Banack because he was adamant that the issue of criminal sanctions could not form any part of any discussions aimed at resolution. As he testified, “he would not be involved in any way” in pursuing settlement if Mr. Roy was suggesting by that reference that the settlement discussions were attached in any way to the prospect of charges being laid or not.

68By March, 2006, the dispute between the two families had intensified. Mr. Banack then received instructions to start an action on behalf of Brenthall Apartments, because the Gersteins had no interest in those properties. He was authorized by the Mintzs to sue on behalf of Brenthall. He commenced proceedings in July, 2006. He was trying to tie up accounts and obtain certificates of pending litigation to prevent the sale of any of Elliott Gerstein's real estate or properties in which he had an interest before the creditors’ interests were protected.

69By September 2006, the alleged fraud had been reported to TPS. Mr. Banack testified that his work and that of the forensic accountants had revealed what he described as “an enormous and persistent course of fraudulent conduct” by the applicant. However, Elliott Gerstein would provide no answers to undertakings in that civil litigation, so by November, 2006, with the consent of Grover Realty, steps were taken to obtain summary judgment against him.

70The day before that summary judgment motion was to be heard on February 21 or 22, 2007, the applicant filed a proposal in bankruptcy. That caused a statutory stay to arise in all civil litigation proceedings against Elliott Gerstein at that time. Mr. Banack was undaunted and continued to pursue the claims through the bankruptcy process. He specifically noted in his evidence that in Elliott Gerstein’s bankruptcy filing, the debt to Brenthall Apartments Ltd. was listed and acknowledged by Mr. Gerstein "to the penny." As well, those accounts contained a formal acknowledgment of indebtedness to the Canada Revenue Agency for tax on a very sizable amount of unreported income relating to the funds that had been misappropriated, consisting of many millions of dollars.

71Mr. Banack finally obtained summary judgment on an unopposed basis against Mr. Gerstein on October 11 and 12, 2007, albeit only in respect of the claim of Brenthall Apartments Limited. Justice Cumming presided that day. The summary judgment was unopposed, but Cumming J.’s strongly worded endorsement and consequential order confirms his finding of civil fraud against Elliott Gerstein. Not only did he grant civil judgment against Elliott Gerstein, but he also ordered that the applicants would have a full indemnity award of costs and that the claim arising out of Mr. Gerstein’s conduct would survive and continue to be collectible following his bankruptcy. Justice Cumming’s endorsement of October 11, 2007, stated in part as follows at paras. 4, 5, 11 and 12:

4At his examination it was determined that Mr. Gerstein, who earned $50,000 per year through his employment with Grover, declared to Canada Revenue Agency total income of less than $600,000 for the six year period from 2000 to 2005, without explanation spent over $6,000,000 through VISA expenditures over that period.

5Mr. Gerstein admits to spending over $2,000,000 on the 21 Thornbank property to purchase and commence construction of a 10,000 square foot house, but refuses to provide any explanation as to the source of the $2,000,000. He admits to spending over $1,000,000 on travel, clothes and jewelry but refuses to provide any explanation as to the source of the funds for such expenditures.

11Mr. Gerstein is required to provide a complete evidentiary record and put his "best foot forward" in responding to the motion at hand. Mr. Gerstein has failed to produce any sworn affidavit contesting the Plaintiff's evidence… Mr. Gerstein has not adduced any evidence at all to contradict the evidence put forward by the Plaintiff. Mr. Gerstein has not raised any triable issue. He has failed to demonstrate any defence in respect of his fraud established by the evidentiary record. This court draws an adverse inference from the failure of Mr. Gerstein to adduce evidence and his failure to provide any evidence in respect of contradicting the evidence established by the Plaintiff.

12For the reasons given, summary judgment is given in favour of the Plaintiff against the Defendant, Elliott Gerstein, for breach of trust and fraudulent misappropriation of funds in the amount of $1,283,028 plus pre-judgment interest in the amount of $213,102.05.³

72I wish to again emphasize that both Mr. Banack and Mr. Heller were insistent in their evidence that no suggestion was ever made in the course of the discussions with the Gerstein family about any resolution relative to the monies allegedly defrauded from the Grover Realty group of companies by Elliott Gerstein that the payment of monies would have or could have any impact relative to any criminal proceedings, whether they would be commenced or whether they would not be brought.

73Mr. Banack also testified that neither opposing counsel nor the Gersteins themselves ever complained, personally or through correspondence, that they were being extorted to settle by threats of criminal prosecution, at any time during this period from December 2005, until December 2007, when Elliott Gerstein was charged, or thereafter leading to the October 22, judgment entered against him in the civil collection litigation brought by Brenthall Apartments. Mr. Heller testified to the same effect but also, on the other side of that coin, that there was never any discussion whatsoever that the complainants would compound or conceal Elliott Gerstein’s fraud if monies were paid to them.⁴ That is evidence from two highly experienced senior solicitors who are attorneys of impeccable and unquestionable integrity and reputation. It is evidence that I accept without reservation.

III Application under Charter s. 11(b)

Applicable legal principles

74Section 11(b) of the Charter stipulates that any person charged with an offence has the right to be tried within a reasonable time. In this case, the anticipated total delay to the end of the trial is 75 months and three weeks, that is, six years and nearly four months. By any measure, that is a very significant passage of time. Plainly the elements of delay that have given rise to that passage of time in this case require careful inquiry. Both parties agree on that point.

75Sopinka J. established the analytical framework that is to be used to measure delay in R. v. Morin, above. The principles to be considered in analyzing delay are (i) the length of the delay, (ii) waiver of time periods, (iii) the reasons for the delay and (iv) prejudice to the applicant. The analysis of the reasons for the delay must include a consideration of the inherent time requirements of the case, and the extent to which delay is attributable to actions of the applicant, actions of the Crown, limits on institutional resources or for other reasons.

76A number of relevant controlling principles can be discerned from the jurisprudence relating to section 11(b):

(i) In a “two stage” process involving both the Ontario Court and the Superior Court and where a preliminary inquiry is held, an administrative guideline of permitting between 14 and 18 months “would not be unreasonable” delay;⁵

(ii) The general approach to a determination whether the accused’s right to be tried within a reasonable time has been denied should not be scientific, mathematical or formulaic. Rather it should strive to strike a balance between the interests that section 11(b) is designed to protect. Those are the protection of the individual rights of the accused and society’s interest in the expeditious trial of allegations of crime, balanced against factors which either inevitably lead to or cause delay;⁶

(iii) As long as the entire period in issue, that is, the total amount of time passed from the time the charges are laid until the trial is completed, cannot be said to be unreasonable when tested against the principles pronounced in Morin, then there is no violation of section 11(b);⁷

(iv) “It is easy to lose sight of the importance of the total period of delay, particularly when engaged in an examination of the causes for various components of the total delay. A case may take too long to reach the preliminary inquiry, but then may be tried very expeditiously after committal…. Ultimately, it is the reasonability of the total period of time that has to be assessed in light of the reasons that explain its constituent parts”;⁸

(v) Institutional delay “starts to run when the parties are ready for trial but the system cannot accommodate them”;⁹

(vi) In calculating the period of delay, a time factor for preparation for the preliminary inquiry and trial should be imputed. Such a period for preparation is part of the inherent time requirements of the criminal process;¹⁰

(vii) Where a delay is occasioned by the illness of the judge or counsel, the delay will generally be regarded as inherent in character, on the theory that life continues to happen as this process continues and progresses, unless the delay takes place after the period when it is reasonable for the Crown to apply to have the judge replaced;¹¹

(viii) Section 11(b) is designed to protect an applicant from the prejudice that flows from unreasonable delay in being tried on criminal charges. Events that occur before such charges are laid cannot result in prejudice within the meaning of section 11(b). Similarly, prejudice that flows from the laying of charges themselves, or from the terms on which the accused may be released, do not engage section 11(b) rights.

(ix) Nevertheless, delay may exacerbate the effect of such matters on the accused, giving rise to prejudice relevant for the purposes of a section 11(b) inquiry. Moreover, at some point, even in the absence of evidence of specific prejudice, prejudice can be inferred from the length of delay. In some situations, the accumulated delay in bringing proceedings to trial will be so lengthy as to raise a presumption of prejudice. The longer the delay, the more likely it is that an inference of prejudice will be drawn.¹²

77In R. v. Quereshi et al¹³ Laskin J.A. commented at some length on the purposes that lie behind section 11(b):

Section 11(b) aims to protect both the individual rights of the accused and the rights of society. It protects three individual rights. It protects the accused’s right to security of the person by minimizing the anxiety and stigma of criminal proceedings. It protects the accused’s right to liberty by minimizing the effect of pre-trial custody or restricted bail conditions. It protects the accused’s right to a fair trial by ensuring that the proceedings occur while evidence is fresh and available. See Morin, at p. 12.

78Section 11(b) also seeks to protect two societal interests running parallel to those of the accused. First, the public has an interest in ensuring a speedy trial, so that those who break the law are brought to trial and dealt with expeditiously and in compliance with the rule of law. Accordingly, promptly held trials increase public confidence in the justice system. Second, s. 11(b) seeks to protect the public’s interest in having those accused of crime dealt with fairly and justly.¹⁴

79To decide whether s. 11(b) has been infringed, the court must balance those individual and societal goals with the length and causes of the delay. Before granting a stay under s. 11(b), the trial judge must be satisfied that these interests outweigh the interests of society in bringing the accused to trial, recognizing that the community’s interest in ensuring that persons are properly tried on any criminal charge increases as the seriousness of the charge increases.

Disclosure

80It is central to this application that the decision of the Crown not to disclose what has now proven to be relevant documentation and information to the defence at the outset of the case is the overriding cause of the delay that occurred here. The decision to not disclose some 90 boxes of documents is, regrettably, the sword on which the Crown must fall. That is the single action which dominoes into the excessive delay that was present here and that supports the applicant’s request that the charges be stayed. As such, I have reminded myself of the disclosure obligations that rest on the Crown since the Supreme Court decided R. v. Stinchcombe.¹⁵

81Stated simply, the Crown has a duty to disclose to the accused all information that is reasonably capable of affecting the accused’s ability to make full answer and defence. The constitutional underpinnings of that obligation and its inclusion in s. 7 of the Charter as one of the principles of fundamental justice reflects the overriding concern that the ability of the accused to make full answer and defence not be impeded by a failure to disclose relevant evidence.¹⁶ However, it is an obligation that must be met on a timely basis – the Crown will not be permitted to dillydally or procrastinate in meeting that obligation.

82Disclosure must be made early enough to leave the accused enough time to take any steps that may affect his or her right to make full answer and defence. The obligation to disclose extends to information that is relevant and necessary for the accused to meet the case against him, to advancing a defence, or in making a decision that may affect the conduct of the defence. Consequently, disclosure must be made as early as possible and the Crown will bear the burden of justifying its discretion to withhold information.¹⁷

83Thus, unless justified by the law of privilege, the Crown’s disclosure obligation must be informed by the principle that information ought to be disclosed if there is any reasonable possibility that the withholding of the information may limit the accused’s ability to make full answer and defence: Stinchcombe, above, at p. 340. In Egger, at para. 20, Sopinka J. put the proposition as follows:

One measure of the relevance of information in the Crown's hands is its usefulness to the defence: if it is of some use, it is relevant and should be disclosed -- Stinchcombe, at p. 345. This requires a determination by the reviewing judge that production of the information can reasonably be used by the accused either in meeting the case for the Crown, advancing a defence or otherwise in making a decision which may affect the conduct of the defence such as, for example, whether to call evidence.

84Admittedly, the Supreme Court has fairly recognized that delays occasioned by a lack of institutional resources require some flexibility in assessing potential violations under s. 11(b), but the court has also signaled that Crown delay caused by a lack of proper disclosure, among other things, is far less tolerable. In R. v. Collins¹⁸, murder charges were stayed due to a violation of s. 11(b) that flowed from a global delay of 23 months and a delayed preliminary inquiry that resulted in part from the Crown’s indifferent efforts to make disclosure. Given that R. v. Askov¹⁹, and Morin, above, show that the seriousness of an offence such as murder will auger against the granting of a stay, the statement in Collins must be regarded as being reflective of the paramount importance of the Crown’s constitutional obligations to disclose.

The length of delay

85Since the applicant was charged on December 7, 2005, the total delay from charge to the commencement of the trial as scheduled is 74.5 months, that is, over six years. The total anticipated delay from charge date to the end of that trial is six years and four months.

Waiver of time periods

86There are no periods of time that should be deducted on account of waiver by the applicant.

Reasons for the delay

87There is no dispute between the parties regarding the characterization of any of the delay that took place in the Superior Court. In contrast, they advocate wholly differing approaches to the way in which various periods of delay occurring in the Ontario Court of Justice should properly be characterized. The fundamental distinction relates to the characterization of the delay resulting from delayed disclosure. In my view, the critical date is August 14, 2009, because it was on that date that the Crown acknowledged there were an additional 60 boxes of material, which later turned out to be 90, which ought properly to have been disclosed to the defence almost a year earlier.

88The defence takes the position that from that date forward, save for the period attributable to the illness of Justice Sutherland and minor periods after November 2012, when the matter was traversed into Superior Court, all of the remaining delays must lie at the feet of the Crown because of its decision not to disclose the 90 boxes in October of 2008. Resource constraints are not an acceptable reason to withhold disclosure. Thus, in the applicant’s submission, the Crown’s decision not to provide relevant disclosure in a timely way created a domino effect that delayed the trial for years and that caused the applicant’s preliminary inquiry to occur over the course of three years.

89The Crown takes a very different position. Given that the Crown is not obliged to disclose information that is clearly irrelevant, privileged, or otherwise legally prevented from disclosure, the crucial issue from its perspective is to ask when the 60 or 90 bankers’ boxes became “relevant” for the purposes of disclosure. The Crown submits that it had simply made an honest and good faith assessment of the relevance of the additional material early on in the case, but that once what it claimed was a principled decision was shown to be mistaken, that failure to disclose was remedied.

90The Crown claims on this basis, and in reliance principally on R. v. Anderson²⁰, that the disclosure-related delays in this case ought properly to be considered as intake delay or neutral time. Further and finally, the Crown argued that more complex cases require longer intake periods. It says this is one of those cases. Accordingly, while the disclosure of the bankers’ boxes occurred during ongoing proceedings, it claims that this period should nonetheless be properly considered to be neutral for the purposes of the s. 11(b) analysis.²¹

91On the basis of these principles, Crown counsel takes the position that the total inherent delay component in this case, other than intake, totaled 24.9 months according to my calculations. The Crown is willing to accept responsibility for only 4.5 months of delay, but it also admits to 25.3 months of institutional delay, for a combined total of Crown and institutional delay of 29.8 months. It attributes 9.5 months of the delay to the defence. In contrast, the defence attributes only 8.5 months to inherent delay other than intake. In contrast, defence counsel claims that 32.5 months of the delay in this case should be characterized as Crown delay, and 18.25 months as institutional delay, for a total of 50.75 months. The defence is willing to accept responsibility for only 5 months of delay.

92The gap between their two positions on the principal disagreement, is 21 months, that is, one and three-quarter years. Obviously that is a significant gap that must be reconciled, explained, and allocated one way or another. As mentioned earlier, the fundamental distinction relates to the manner in which both parties seek to characterize delays resulting from the delayed disclosure in this case.

93The following chart reflects the different positions taken by the parties relative to the characterization of delay in this case:

CHARACTER OF DELAY

CROWN ALLOCATION

DIFFERENCE

DEFENCE ALLOCATION

Intake Delay

10.75 months

10.75 months

Inherent Delay

24.9 months

16.4

8.5 months

Total Intake and Inherent Delay

35.65 months

16.4

19.25 months

Crown Delay

4.5 months

28

32.5 months

Institutional Delay

25.3 months

7.05

18.25 months

Total Crown and Institutional

29.8 months

21

50.75 months

Defence Delay

9.5 months

4.5

5 months

Total Delay

75 months

75 months

(a) Inherent time requirements

(i) Intake Delay:

94Both counsel agree that the total intake time in the Ontario Court should be assessed at 8.5 months between the charge date and August, 2008, when dates were set for the preliminary hearing. Both counsel also agree that the total intake time in the Superior Court should be assessed at 2.25 months. I agree with both of those estimates. Accordingly, total intake time is fixed at 10.75 months of neutral delay.

(ii) Neutral Delay:

95For the reasons noted above, I have concluded that the illness of Justice Sutherland is properly characterized as inherent delay for the purposes of s. 11(b). For this reason, I attribute a further 14 months to the inherent time requirements of the case.

(iii) Impact of disclosure on characterization of inherent delay:

96To repeat, the Crown takes the position that the delayed disclosure should be properly considered under the inherent requirements of what it characterizes as a complex fraud case. Looked at in that light, it says that the decision to withhold the bankers’ boxes was a “principled assessment of relevance” and that no consensus regarding potential relevance was reached until the Preliminary Inquiry. The Crown relies on a number of cases in support of its contention that the time required to correct that principle but mistaken position on the relevance of disclosure is properly considered inherent delay for the purposes of s. 11(b). However, I do not accept that position. I find those cases to be readily distinguishable from this case.

97The Crown argued that R. v. Anderson, above, supports its contention that the disclosure-related delay should properly be characterized as inherent for the purposes of the analysis under s. 11(b). Anderson was a case involving 24 drug-related charges resulting from two extensive investigations undertaken by the Prince Albert police force in concert with the RCMP. The delay was just over 42 months. The trial judge found that to be considerable, but also reasonable in light of all the factors. The application under s. 11(b) was dismissed. That decision was upheld by the Saskatchewan Court of Appeal.

98I readily accept the principle articulated in Anderson that initial resistance by the Crown to disclose, even if later shown to be erroneous or unwarranted, will not necessarily result in a finding in every case that the Crown was in breach of its disclosure obligations.²² I also accept that disclosure obligations are ongoing and that disclosure will be expected to be made as soon as is practicable, and Anderson shows that the trial judge must assess the obligation in light of all existing circumstances and all of the relevant factors, including (i) whether the action was in good faith, (ii) the essential elements of the offence, (iii) the complexity of the investigation, (iv) the volume and type of disclosure already provided, (v) what the Crown refused or claimed to be unable to provide, (vi) a preliminary assessment of the relevance of the further disclosure to assist the accused, (vii) whether it is part of the case to meet, (viii) the interaction between and behavior of the Crown and defence, (ix) the timing of the ultimate disclosure and (x) the nature of the defence requests for disclosure. As the trial judge observed there, the interplay of these factors will always be case specific.²³

99In my view, however, the decision in Anderson cannot provide a foundation to characterize the delay in this case as inherent, having regard to the very different facts and circumstances attendant to the disclosure issue. The trial judge in Anderson rightly characterized the multiple disclosure requests advanced by the defence in that case as a “fishing expedition” that was “frivolous and abusive.”²⁴ Moreover, the breadth of the investigation there was extensive. It involved 163 officers, several intelligence reports, two wiretap authorizations, 44 search warrants and 45,000 pages worth of documentation. Late disclosure in that case was found to be due at least in part to the need for vetting to take account of privilege. Further, the defence had already been provided with tens of thousands of pages of disclosure. None of those factors were present in this case. Finally, and also unlike in this case, the amount of late disclosure was minimal in the context of the entirety of the evidence.

100R v. Schertzer²⁵ was another case that the Crown argued supported its position. In that case, the Ontario Court of Appeal set aside a stay in which the trial judge erroneously attributed the delay to disclosure problems on the basis that there was no causal connection between the disclosure problems and the timing or the progress of the case. That was unlike this case where the delayed disclosure is claimed to be central to the overall delay in reaching trial:

87 Our conclusion that disclosure problems did not affect the scheduling of the preliminary inquiry is supported by subsequent appearances in the Ontario Court of Justice in 2005. Between February and September of that year the parties appeared for a variety of reasons, but there is no indication in the record that the target date was in jeopardy because of the pace of disclosure. Significantly, while disclosure was discussed at the three focus hearings before the preliminary inquiry judge in the fall of 2005, at no time did the defence suggest that disclosure was insufficient to permit them to proceed.

101In addition to these distinguishable scenarios that I have highlighted, neither Schertzer, nor Anderson, dealt with circumstances where the failure to disclose effectively derailed the date of a scheduled Preliminary Inquiry, or at a minimum resulted in that preliminary inquiry becoming wasted time, in significant measure, such as was the case here. To my mind, these differences materially limit the assistance these cases can provide to the Crown’s line of argument. Further, in Anderson the court makes plain at para. 16 that the preliminary inquiry was adjourned by the defence and granted reluctantly – and not at all uncritically I might add – by the preliminary inquiry judge. That was because both parties had previously conceded that the disclosure issues would not impact the preliminary inquiry from proceeding. In Schertzer, not only did disclosure problems not affect the scheduling of the preliminary inquiry, but in addition defence counsel did not take a position early on, like they did here, that disclosure was insufficient.²⁶

102Further, the fundamental cause of delay here was not complexity. Stated simply and plainly, this was not a complex fraud case. While a high volume of disclosure can add complexity to a case, the volume of disclosure should not be equated with complexity. The volume of disclosure is often a misleading measure of complexity.²⁷ Rather, the root cause of delay in this case was the failure of the Crown Attorney’s office to make any real attempt to properly determine in the autumn of 2008 whether it had a significant disclosure obligation at that time.

103The record indicates that the decision not to make diligent follow-up efforts was motivated by the fear that a lack of necessary resources would prevent timely disclosure, and that this would in turn delay the preliminary inquiry. However, those concerns can neither excuse the TPS’s inaction, nor justify the Crown’s unfounded and obstinate position throughout the period leading up to the preliminary inquiry that the boxes did not constitute disclosure as a matter of law.

104Further, apart from these distinguishing features, I would again emphasize that the inherent requirements of a case like this cannot compare to those in a case like Anderson. In light of the inherent complexity of that case, the delays there were exacerbated by the largely meritless disclosure requests persistently made by the defence. Those requests caused the lengthening of the delay even further. Indeed, the trial judge found there that “[a]t worst, the approach was a thinly veiled attempt to manipulate the process… and avoid a trial on the merits.”²⁸

105Nevertheless, even if this case does not involve that complexity, the fact that this case did involve a relatively large volume of disclosure is a factor to be weighed in assessing the inherent time requirements, notwithstanding the Crown’s decision not to fulfill its disclosure obligations at an earlier time. That being so, I find the total delay attributable to the inherent requirements of the case, including the time needed to complete the preliminary inquiry, including the time between setting dates and the time required by the defence to review the disclosure and consult with experts, to be 18 months.

(b) Actions of the accused

106The defence is responsible for 9.4 months of delay on account of scheduling unavailability. Mr. Bains argued that as a counsel with an extraordinarily busy practice, a considerably shorter period of time ought to fall at the feet of the defence. I do not agree. The transcripts reveal the problems that defence counsel claimed to be facing from a time scheduling perspective in the Ontario Court when he appeared before Moore J., and they reveal what he said was simultaneously going on in Brampton or elsewhere from a scheduling perspective. However, I note that some of the proceedings that were ongoing and claimed to be causing scheduling problems at the same time as these are referenced in R. v. Dieckman.²⁹ In that decision, Durno J. comments on experiencing some difficulty in scheduling matters involving Mr. Bains, and Sutherland J. appeared to have some of the same problem. Regardless, looked at in its entirety, I consider it fair to attribute a period of at least 9.4 months as being properly considered to be defence delay for the purposes of s. 11(b).

(c) Actions of the Crown

107As is evident from the preceding portions of this analysis, I have considered these factors to some extent under my analysis and consideration of the inherent time requirements of the case.

108Although the defence was told that the additional boxes of material would serve as the basis for a forensic audit conducted by GT and notwithstanding that at least one police officer recognized the potential relevance of the material, the boxes were not disclosed to the defence. In correspondence it was indicated to the defence that while it was “hoped” the boxes could be provided to the defence, staff limitations and “time constraints” – apparently that of the approaching preliminary inquiry – made this impossible.

109In response to steady pressure from the defence that the material should be disclosed, the Crown responded by taking a resolute stand that this was not disclosure. It did so before making any diligent effort to ascertain whether the contents of the multiplicity of boxes may have had contextual relevance or significance that created an entitlement in the defence to be provided with that material.³⁰ There was no evidence that the Crown made any independent inquiry or performed any due diligence of its own regarding the contents of those additional boxes either before providing them to GT.

110Nor was any due diligence done leading up to the preliminary inquiry. Defence was informed nearly 10 months later that none of the materials were being relied upon in the forensic report. Meanwhile, the GT accountant was actually preparing a report based in part upon the materials in question, materials that the accountant would later testify at the preliminary inquiry had been “very useful” to his analysis. Defence received the report in question on the eve of the preliminary inquiry.

111To his credit, Crown counsel subsequently assigned to the case, and counsel for this application, did the right thing and changed the Crown’s position to accept that all of the material ought to have been disclosed. But then, as noted, in an apparent pique of funding churlishness, the government would still not pay to copy the material, even though it had a clear obligation to do so. That added another four months of delay resulting from avoiding its obvious obligation to provide the material to the defence and at the public’s expense, and the time it took to do the copying. So, it was not until April, 2010, that all that material was actually disclosed. That in turn necessitated review by defence counsel and the experts and the scheduling of further time for the continuance of the Preliminary Inquiry.

112As I have indicated, the record indicates that the decision not to make diligent follow-up efforts was motivated by a fear that a lack of necessary resources would prevent timely disclosure should disclosure be necessary, and that this would in turn delay the preliminary inquiry. This is no excuse for the TPS’s inaction and it is not a justifiable reason for their unfounded and obstinate position throughout the period leading up to the preliminary inquiry that the boxes were not relevant disclosure. The Crown maintained this position until the preliminary inquiry revealed that the Crown’s own expert had prepared a report based in part on information taken from these boxes.

113I appreciate that it is not always possible to complete a preliminary hearing within the period estimated by counsel. Had the TPS made a real and diligent inquiry into the contents of the additional boxes any time after it became aware of their existence, namely after the autumn of 2008 and leading up to the initial preliminary inquiry, that hearing may well have been delayed. Indeed, had the initial preliminary inquiry been delayed on account of further investigation and the determination that the boxes were indeed relevant disclosure pursuant to an assessment to that effect or pursuant to the decision of GT to rely on the materials in the preparation of their report, the court would be entitled to take the cause of this delay under consideration.

114The court could have assessed the reasonableness of the resulting delay in the context of the inherent requirements of the investigative and discovery stage of a fraud involving a large amount of documents. However, and unfortunately, that was not the case here.

115The purpose of this exercise is not to impute improper motives or assign blame, but I am required to examine the actions of both parties in order to properly assess and assign the reason for the delay in question with a view to determining what amount of delay, if any, is relevant for the purposes of s. 11(b). The delays occasioned by these events were not solely a result of actions of the Crown per se. Indeed, the failings of the Crown in this case collided both with some investigative tardiness and a plain unwillingness on the part of government to pay for the discharge of an obligation that it was duty bound to fulfill. While it could be said the delay was exacerbated by these factors, at its core, this was delay resulting from Crown’s decision not to properly fulfill its disclosure obligation. In any event, I find that a total 36.75 months is attributable to Crown and institutional delay for the purposes of this s. 11(b) analysis.

(d) Institutional Delay

116There are three sources of institutional delay to which the parties agree in principle, save for the defence’s position that the entire period of time required to complete the preliminary inquiry was caused by Crown’s late disclosure and should therefore lie at its feet. With modest adjustments for preparation time, the total tally for institutional delay is just over 25 months.

117In sum, based on my characterizations of time that comprises the approximate 75 month delay from the date of the initial charge on December 5, 2007, to the anticipated conclusion of the trial on March 30, 2014, I attribute a total of 28.75 months to intake and inherent delay, 14.5 months of neutral delay to account for the illness of Justice Sutherland, a total of 9.5 months to defence delay, and a total of 36.75 months to combined Crown and institutional delay.

118For practical purposes, while the administrative guidelines in a case such as this are not to be inflexibly applied, those guidelines do remain current. Based on my assessment, the aggregate delay beyond the guidelines reaffirmed in R. v. Morin is somewhere close to 20 months. While this in itself it not sufficient to rely on, it bears noting that the guidelines for combined Crown and institutional delay were very substantially exceeded in this case.

Prejudice

[119] Before a stay can be granted based on the violation of an accused’s s. 11(b) Charter right to trial within a reasonable time, there is a second element that must be established. That element requires that Mr. Gerstein have suffered prejudice that is attributable to that delay.

120An assessment of prejudice is an important component of the Charter analysis. Prejudice caused from being the subject of criminal charges must be distinguished from prejudice caused by delay. While there is an undeniable nexus between the two, the latter is primarily relevant for the purposes of s. 11(b). In R. v. Brown³¹, MacDonnell J., then of the Ontario Court of Justice but now of this court, stated:

I recognize that there is a distinction between prejudice caused by the fact of being charged and prejudice caused by delay after being charged. The stigmatization of which the applicant complains is the product of being charged, and would have occurred even if the trial had been conducted expeditiously. Accordingly, it is not “prejudice” for the purposes of s. 11(b). However, the fact that a negative consequence arises from being charged rather than from delay does not necessarily make it irrelevant for s. 11(b) purposes. The stress and anxiety that flow from stigmatization, for example, can create an ongoing burden, and the longer that the burden must be borne, the greater the toll on an accused's security of the person: see R. v. Kporwodu and Veno (April 15, 2005) (Ont. C.A.), at paragraphs 162, and 177-178.

121In R. v. Kovacs-Tatar³², the Court of Appeal recognized at para. 33 that the focus of prejudice under s. 11(b) is the prejudice flowing from a situation ‘prolonged’ by delay rather than the mere fact of being charged with a criminal offence. R. v. Silveira³³ acknowledges that the shame of disclosure to family, the expense of defending criminal charges, and the like, arise from the laying of the criminal charge itself and not from delay to trial. Nonetheless it is equally true that a delay to trial that exceeds the guidelines necessarily prolongs a defendant’s shame and increases his or her anxiety. Thus, it may cause the preponderant nature of the delay prejudice to change from prejudice caused by being charged to institutional delay prejudice beyond the guidelines.

122Elliott Gerstein’s claims of specific prejudice due to the delays in these proceedings were laid out in an Affidavit filed in support of this Application. Mr. Gerstein also testified. He claims to have experienced significant prejudice as a result of the extensive delay in this case. Mr. Gerstein lost his job. He became largely unemployable as a result of the allegations made against him in 2005. His wife left him. He had to sell their house. He had to make a proposal in bankruptcy. He had to declare bankruptcy. He was pursued vigorously by counsel retained by the Mintzs to obtain recovery of the embezzled amounts. However, all of those events took place in the 16 months after the fraud was discovered but before he was charged.

123Further, claims were made that the stresses of this prosecution indirectly caused his mother’s premature demise from her condition as a diabetic, contributed to his ex-wife’s stress caused when she was diagnosed with cancer, and contributed to the more rapid advancement of his father's dementia. I accept that may be the way he and his family perceive it, but there was no cogent evidence of that presented to me, no medical evidence was tendered to support those contentions, and thus the allegations are without factual foundation and cannot give rise to the prejudice he claims is linked to having been charged in this matter.

124I do not dispute that Mr. Gerstein has, as he claims, experienced stress and related physical manifestations arising out of facing these serious fraud charges. However, I cannot realistically assess the extent of the afflictions he claims to have that are attributable to delay. Moreover, I cannot conclusively determine whether these difficulties came about as a result of the charges themselves or as a result of the delay. His testimony did not provide satisfactory evidence in this regard.

125Notwithstanding this, I acknowledge in considering this issue that the concept of “security of the person” to which Mr. Gerstein has a right under the Charter encompasses protection against overlong subjection to the vexations and vicissitudes of a pending criminal accusation, and that those consequences may include stigmatization, loss of privacy, stress and anxiety resulting from a multitude of factors including possible disruption of family, social life and work, legal costs, uncertainty as to the result and sanction. Lamer J. observed in R. v. Mills³⁴ that these kinds of prejudice cannot be disregarded nor minimized when assessing the reasonableness of delay.

126Further to this, Mr. Gerstein spent three months in custody, and while he was subjected to bail conditions that were not at all onerous such that they are sufficient to establish actual prejudice in themselves, Mr. Gerstein’s liberty interests were certainly restricted as a result of this and must be properly taken into account as one relevant aspect of whether the long delay was unreasonable.

127However, I may not have found that Mr. Gerstein suffered the prejudice required to receive the relief he seeks were it not for the fact that such an inordinate length of time has passed. It is proper to infer prejudice from the length of delay. Indeed, the longer the delay, the more likely it is that such an inference will be drawn.³⁵ The delay in this case from the date of charge to the date this trial is scheduled to end is well over six years. The jurisprudence makes clear to me that where the delay is as extreme as it was here, prejudice ought fairly to be inferred. As such, I have found that Mr. Gerstein has suffered inferred prejudice as a result of the delay which breached his Charter right to trial in a reasonable time.

128Further to this and also quite significant, Mr. Gerstein would not have the benefit of a favourable witness at trial. Mr. Gerstein’s father, who was a partner at Grover Realty and who testified at the preliminary inquiry, has since developed severe dementia that prevents him from testifying at trial. While it is not sufficient to establish prejudice to merely state that a potential witness has been lost, the evidence here establishes that the witness would have been beneficial to the defence. For this reason, the standard for when the loss of a witness will be indicative of prejudice has been fulfilled.³⁶ It follows that the loss of this witness has interfered with the accused’s right to make full answer and defence, and has therefore caused further prejudice attributable directly to the delay.

129Finally, I must balance the reasonableness of the delay against all factors in this case and the interests which s. 11(b) is designed to protect. That balancing exercise recognizes the societal interest in seeing an accused tried, but it also confirms the public interest in the prompt and fair administration of justice. In balancing those factors, I find that the extent of the delay in this case is sufficient to leave no question in my mind that the constitutional right of the accused to be tried within a reasonable time was violated.

Conclusion on the application for a stay pursuant to s. 11(b)

130While there is typically some complexity to any corporate fraud of this type that may contribute to delay, including one perpetrated against seven different companies, this was not a complex fraud. It may have required the examination and piecing together of numerous pieces of documentary evidence in order to establish the manner in which the fraud was perpetrated, but it is hardly complex. It did not involve sophisticated or complex financial instruments or convoluted or questionable tax plans to achieve the result. This was not a case where there are multiple accused.

131Even if it ended out involving over 90 boxes of document disclosure rather than merely 18, it is not much more complicated than the tax evasion that was present in R. v. Sylvester.³⁷ In that case, where there was no conspiracy alleged, an absence of multiple accused, no wiretaps, no searches and seizures and a limited number of charges. Langdon J. assessed total unacceptable delay at only 17 months, in a total delay scenario of four and a half to five years, but stayed the charges. I acknowledge this is a different case from that one, but at its core it remains a simple misappropriation and conversion of a lot of money by a person who was employed by Grover Realty and who had access to the bank accounts and chequebooks of the complainants. It was the straightforward alleged embezzlement of monies that belong to them, redirected to his own bank and credit card accounts, for his own use and benefit, without apparent authority or colour of right.

132The fundamental problem in this case that contributed to the excessive delay was not substantive complexity. It was the decision of the Crown Attorney’s office, upon learning of an additional 60 to 90 boxes of material in the possession of LECG relating to the civil complaint against the accused, not to make a proper inquiry into those materials. Beginning in the autumn of 2008, it did not properly assess whether a significant disclosure obligation existed either at that time, or at any time leading up to the preliminary inquiry. The explanations provided for this misguided decision appear to flow from the constraints caused by a limited availability of human and mechanical resources, as well as an apparent misunderstanding by the TPS regarding alleged representations, denied by the parties themselves, made by LECG and GT accounting firms that the materials were not relevant.

133As a result, it was not until April, 2010, nearly three and half years after the charges were laid, that all that material was actually disclosed. Further time for review was required and then unpredictable and unfortunate events caused further delay resulting in this matter only coming to trial now. Three years of Crown and institutional delay is double the amount of delay that was accepted or excused under the guidelines established in R. v. Morin, above, as confirmed in R. v. Godin.³⁸ I have found on that basis that Mr. Gerstein's right to trial within a reasonable time as guaranteed to him under the Charter has been breached.

IV Application under Charter ss. 7 and 24(1)

134In the Charter application brought by Mr. Gerstein under ss. 7 and 24(1), he argues a second alternative basis for a stay of proceedings based on abuse of process. However, even if the court finds no abuse of process, he seeks the court’s ruling excluding the evidence of the GT and LECG forensic accountants from the evidence at his trial. He claims that both firms had a conflict of interest that irrevocably taints the reliability of the forensic work they performed to quantify the extent of the fraud and the amount of money taken.

135The Crown acknowledges three important points relative to the claims of abuse of process and conflict of interest: (i) that as the summary of evidence above shows, the complainants did seek civil recovery at the same time that they complained of the alleged fraud to the police; (ii) that LECG was assisting counsel for the Blacksteins in their legal dispute with the Mintzs during the same general time frame as they were retained by the Mintzs and other investors to investigate the applicant, Elliott Gerstein; and (iii) that GT was the Trustee in Bankruptcy for Elliott Gerstein at the same time it was retained by the TPS to do an independent forensic audit of the cheque transactions that were the subject matter of the charges against Mr. Gerstein.

Abuse of Process

136Without plumbing the legal framework in depth, I note that the test to be applied in determining whether or not criminal proceedings should be stayed as constituting an abuse of process, as set out fairly and succinctly in the Respondent’s factum, is essentially whether some conduct on the part of the state has been oppressive or vexatious such that the prosecution is or becomes offensive to the principles of fundamental justice. The authorities demonstrate that the applicant has a “heavy onus” to justify the very extreme remedy of a stay of proceedings. Moreover, in considering an abuse of process claim the court is required to take account of the strong public interest that exists to see serious criminal charges determined on their merits after a fair trial.³⁹

137In considering whether an abuse of process is made out, particularly in circumstances like this where the defence claims that threats of prosecution underlay the efforts of the Mintz family to obtain restitution from Elliott Gerstein, it is particularly important to remember that there is no bar to pursuing both civil remedies and criminal charges in cases of allegations of fraud.⁴⁰ There was nothing improper about the victims of the misappropriation seeking to recover the monies that were taken from them. However, it is and would be an abuse of process to pursue criminal charges solely for the purpose of civil debt recovery, and individuals do wrong if they threaten to pursue criminal charges if civil remedies are not paid. The blameworthiness of such a threat derives from it being potentially extortionate in nature.⁴¹

138Where individuals may have pursued both civil proceedings and reported the matter to police authorities, like in this case, what is important is that the police and Crown prosecutors pursue their public duty to investigate, to assess the facts after an investigation, to lay charges where there are reasonable and probable grounds to do so, and to pursue prosecution when there is a reasonable prospect of conviction and there is a public interest in doing so.⁴² Thus, in circumstances where the authorities have independently assessed the viability of a charge and its prosecution and have decided to push forward in the public interest, the remedy of a stay for abuse of process will not be made out. The point is made clearly in the Supreme Court's decision in Finn at paragraphs 15-37 and the conclusion Sopinka J. reached in that case when he observed that:

…[t]he charges were laid after an independent investigation and decision by the authorities. It cannot therefore be said that the purpose of the prosecution was to advance the civil interest of the complainant to recover a debt.

[139] In this case, however, the questions raised in the abuse of process application are essentially moot given my disposition on the s. 11(b) Charter application. As such, I see no need to provide exhaustive reasons for my conclusion that it would have been dismissed. Nevertheless, it is important that they be addressed briefly, given the vehemence with which the claims were made, and the significance particularly of the conflict claim. In my view, however, the abuse of process application was without merit. Had the applicant not succeeded on the s. 11(b) application, the matter would have gone to trial because I would have dismissed the application under ss. 7 and 24(1) based on an alleged abuse of process.

140In my view there was no cogent basis to conclude on this evidence on a balance of probabilities that the TPS acted as a state agent for these civil complainants in proceeding with charges against Elliott Gerstein. Neither was I persuaded that it would be appropriate to draw the inference, having regard to the whole of this evidence, that the Mintzs threatened the Gersteins with the prospect that they would go to the police and have Elliott Gerstein charged with fraud, unless a substantial amount was paid to them in restitution, or that they would not report it if restitution was made.

141The materials generated by LECG were delivered to TPS in August 2006, at the instance of the Mintzs and their counsel, Mr. Heller and the forensic accountant, Mr. Harloff, and those materials were the foundation for the further investigation that was undertaken by Det. Field. This documentation, as supplemented by the product of Det. Field’s independent investigation, was the core evidentiary foundation that led Det. Field to arrest and charge Elliott Gerstein with seven counts of fraud in December of 2007. Notwithstanding the product of Det. Field’s further investigation, I acknowledge that the case could not be prosecuted solely on the basis of the further results generated by Det. Field in the course of his investigation, obtaining further documentation and interviewing witnesses. So it follows that the exclusion of the evidence that was initially delivered to TPS by Messrs. Heller and Harloff in August of 2006 would have effectively gutted the prosecution’s case at trial.

142Mr. Gerstein argued that in proceeding with criminal charges against him, the police and the Crown essentially acted as agents for the civil complainants, the members of the Mintz family and the other investors in the companies from whom funds were embezzled, in furtherance of the civil remedies in recovery and restitution that they pursued before these charges were laid.

143The defence claims that the Mintz family used the prospect of criminal proceedings to force the Gersteins to accept financial responsibility for the fraud perpetrated by Elliott Gerstein. It is claimed they used the threat of prosecution to obtain settlement terms under which the Gerstein family would pay back the Mintzs for much of the money allegedly embezzled by their son and family member, Elliott Gerstein.

144There was a sharp conflict in the evidence I heard on what transpired between the two families. Moreover, counsel for the defence essentially sought to turn the tables from defence to offence, going on the attack and accusing Al Mintz of having been the actual perpetrator of a fraud. At one point during defence counsel’s submissions, I observed that it was Elliott Gerstein and not Al Mintz who was on trial in these proceedings, but defence counsel corrected me on that. I was mistaken, he said, even though his claim seemed to ignore that there was evidence before the court of Elliott Gerstein’s appropriation of corporate funds to his own use and benefit.

145That is not to say and plainly no one can ever know whether Mr. Gerstein would have been found beyond a reasonable doubt to have committed the offences with which he is charged if the trial had proceeded. It cannot be said whether the charges would have been proven to the criminal standard. Moreover, Mr. Gerstein is presumed to be innocent of these criminal charges until proven otherwise. I do not deny that it is open to any defendant to seek to diffuse charges by pointing the finger at others.

146Regardless of Mr. Bains’ perspective however, and his plain determination to call the character of the complainants into question, that charge is vigorously rejected, not only by the members of the Mintz family and Al Mintz in particular, but also their counsel, Brian Heller and Larry Banack, both of whom are exceptionally experienced and highly respected members of the bar. They were careful, detailed and adamant in their evidence that there was no threat or holding out, express or implied or even hinted at, that Elliott Gerstein would not be charged if the Gersteins paid enough money to the Mintzs, or the reverse.

147It may be claimed or appear or be inferred from the testimony at the preliminary inquiry of Sidney Gerstein and the affidavit of Ira Gerstein and its astonishing and to date unfounded allegations against the Mintzs, that the Gerstein family hoped to avoid criminal prosecution for Elliott Gerstein by settling the claims of the complainant corporations. However, I agree with counsel for the Crown that nothing in the correspondence between them or their counsel and Larry Banack or any of the other counsel establishes either threats of criminal prosecution or promises of immunity. Further, I accept without reservation the evidence of Brian Heller, the criminal lawyer who helped prepare the presentation of the case to the Fraud Squad and who could not have been clearer in his testimony that the criminal and civil proceedings were kept completely and entirely separate and that neither threats nor promises were held out to the applicant.

148While TPS may not have engaged in a comprehensive review of the content of most of the boxes received from LECG in October 2008, and which were then passed on to GT for their forensic examination, audit and compilation work thereafter, and thus have forestalled a determination whether that material needed to be disclosed to defence counsel, that was almost 11 months after Elliott Gerstein had been charged. Mr. Gerstein was charged in December 2007. The initial materials obtained from the complainants were received by TPS in August 2006.

149From the late autumn or early winter of 2007 when Det. Field was assigned as the officer in charge, until the charges were laid against Elliott Gerstein in December 2007, Det. Field conducted his own independent follow-up and investigation relative to the fraud perpetrated by Elliott Gerstein. He created an investigation plan and in his evidence, which I accept, pursued that plan in order to gather the evidence that he required to make the case against Mr. Gerstein. Det. Field was an experienced police officer and fraud squad detective and he was confident that the investigation that he had conducted was complete in that it provided him, without question he said, with reasonable grounds to lay the charges that he did against Mr. Gerstein.

150Det. Field conducted his own interviews at Grover Realty and he came to his own conclusions – he did not simply rely upon the information that the complainants had disclosed and provided to TPS in the summer of 2006. He adamantly denied having acted as an agent for the complainants in their efforts to recover on the civil debts they claimed were due to them in respect of the monies taken from them by Elliott Gerstein.

151If this were not enough to persuade me that this is not an appropriate case for the applicant's abuse of process motion to be granted, I would simply add that in furtherance of ensuring the independence of its investigation of the charges that it laid against Mr. Gerstein, D/Sgt. Logan of TPS and Det. Field took steps to ensure that the GT firm, on general retainer to the Fraud Squad, would conduct an independent audit with its own forensic accountants of the source material obtained in August 2006 from LECG in 2008 to confirm that there was an independent foundation for the prosecution to proceed.

152The threshold for stay of proceedings under section 24(1) of the Charter based on abuse of process is a very high one. As the Supreme Court of Canada made clear in R. v. Regan 2002 SCC 12, [2002] 1 S.C.R. 297 at para. 54, it is a remedy that is reserved for “only the clearest of cases.” I have no doubt in concluding this is not one of them.

153In my view, the facts here make it plain that the police authorities and the Crown were alive to the dangers of being co-opted as participants by parties who wished to pursue an improper agenda. It is true that the TPS may not have dedicated countless months of investigation to this relatively simple and uncomplicated fraud on the exclusive basis that counsel for the defence seemed to think that the matter warranted or required. But the charges were laid against Elliott Gerstein after an independent decision by the Crown and the police authorities to push ahead with the prosecution, having verified the substance of and foundation for those charges through independent investigation and through an independent forensic audit and compilation of the amounts that were allegedly defrauded by the accused in this case. In those kinds of circumstances, as Sopinka J. concluded in Finn, above, where the authorities independently assess the viability of the charge and its prosecution and decide to push forward in the public interest, the claim of abuse of process will not be made out and a request for a stay of the charges on that basis will be denied.

Conflict of Interest

154Finally, turning to the issue of conflict of interest, Mr. Gerstein claimed that the investigation of the allegations against him was irreparably compromised by conflicts of interest involving the GT firm and LECG, and thus the evidence they would have provided at his trial ought to be excluded.

155Relative to the complaints of alleged conflict of interest, while I accept that there may have been a conflict within the LECG firm when it accepted a retainer to perform a forensic examination on the books and records of Grover Realty and its related companies to identify the fraud allegedly perpetrated by Elliott Gerstein, in my view that potential conflict is irrelevant to this matter. It is irrelevant because the conflict did not relate to the Gersteins and the LECG firm owed no client duty of confidentiality or responsibility to Elliott Gerstein, or to anyone in his family.

156The Blackstein family, an unrelated party, certainly had a right to complain of a conflict: the LECG firm agreed to act for the Mintz family in that entirely unrelated and separate matter despite the Blacksteins having retained LECG to investigate on their behalf against the Mintzs. The Blacksteins’ consent was never sought when LECG accepted a retainer from the Mintzs. The only persons asked for a release from any conflict were the Mintzs. Hardly surprising, they readily agreed, but there was no equivalent duty owed to Elliott Gerstein. LECG’s potential conflict as between those other two parties cannot be said to have tainted any conclusions LECG might have reached relative to the accused’s conduct in allegedly defrauding Grover Realty and its related companies.

157In other words, it does not follow that the quality or impartiality of LECG’s work in their forensic investigation of Mr. Gerstein’s conduct is suspect merely because there may have been an apparent conflict relative to other clients in another matter, notwithstanding one of those other clients retained LECG to investigate the accused.

158The defence’s expert, Mr. Mark Gain, sought to persuade me that I should find this potential conflict was relevant for the purposes of the abuse of process application. While the possible existence or appearance of a conflict in that separate matter might have affected the weight that should properly be given to LECG’s evidence and work product on a stand-alone basis, in my view this was insufficient to create an all-embracing conflict that would have called for the rejection of the entirety of the LECG work product, notwithstanding Mr. Gain’s professional opinion, which I respect but do not accept.

159More importantly in the context of the case, I would dismiss the complaint of the applicant that there was a conflict of interest within the GT accounting firm when it took up the request of TPS to prepare a forensic compilation of the amounts embezzled from Grover Realty and each of the other seven corporate complainants. That claim is made as a result of the fact that Mr. Ray Godbold, a licensed Trustee in Bankruptcy, and a partner of the GT firm, had previously been appointed by the court as the Trustee in Bankruptcy for Elliott Gerstein’s bankrupt estate, before GT took on the TPS retainer.

160Mr. Gain’s evidence for the defence tried to establish the existence of a duty of client confidentiality between a Trustee in Bankruptcy and the bankrupt himself but I reject that claim, or at least the claim that there was a conflict created by that relationship. I was instead persuaded on the basis of the expert evidence adduced by the Crown’s expert, Mr. Jonathan Kreiger, and by the applicable provisions of the Bankruptcy and Insolvency Act, which regulates the conduct of trustees in bankruptcy, that there was no duty owed to Elliott Gerstein, either by Mr. Godbold or the GT firm which was violated as a consequence of Mr. Melamed's forensic investigation into the fraud.

161The provisions of the Bankruptcy and Insolvency Act cause trustees in bankruptcy to have responsibility not only to the estate of the bankrupt but also to the court. But they create no specific responsibility to the bankrupt person. Those provisions set out the duties and responsibilities of trustees in bankruptcy, and explain to whom their professional and fiduciary responsibilities are owed. The evidence outlining the scope and operation of those provisions showed that GT could not have had a conflict in this particular case. The trustee’s client is “the debtor's estate,” and the stakeholders to whom the trustee owes responsibility are the creditors and the estate itself, not the bankrupt debtor. Moreover, the duties as set out in that statute show that no consent of the debtor is required for any actions undertaken by the trustee in bankruptcy and it is plain on the basis of the statutory language that the “debtor's estate” does not mean the debtor as an individual person.

162Mr. Kreiger addressed the problematic aspects of the expert report prepared for the defence by Mr. Gain and refuted the suggestion that a trustee in bankruptcy owed a fiduciary duty to the bankrupt, rather than to the bankrupt estate to which that obligation is owed, or that there is a duty of care to the bankrupt that could have created a conflict. Defence counsel complains that he is not objective because he is a partner of GT, but that is not a complaint I accept here given that the predominance of his evidence simply outlined the applicable statutory framework and frankly contained little opinion of his own.

163Moreover, it was evident that David Melamed of GT was already well engaged in his role to review the books and records from Grover Realty and to compile a report on the amounts of money defrauded at the time the bankruptcy was declared. There could be no conflict in performing that responsibility since the provisions of the Bankruptcy and Insolvency Act, and in particular sections 206(2) and (3), show that the trustee in bankruptcy could have conducted, and might have been statutorily bound to perform exactly the same action on his own and to provide the results to the TPS or the court. He would have been in that position if he had any view whatsoever that fraudulent activity had been involved in the conduct of the bankrupt leading to the filing of the proposal in bankruptcy, and section 202 of the Bankruptcy and Insolvency Act may make it an offence if the Trustee fails in any such duty. Sections 205(1), 206(1) and (2) of the Bankruptcy and Insolvency Act subjects the trustee to stringent controls and regulations, including reporting obligations and cloak him/her with responsibilities like an officer of the court.

164In response to the argument raised by counsel for the defence relative to the existence of conflict, I do not dispute that Mr. Heller raised the possibility of conflict. Further, Det. Field seems to have been alive to the possibility of conflict, and so were D.C. Walter and Det. Dionne, but plainly the mere raising of the suggestion or possibility does not establish the existence of a conflict.

165Whether a conflict of interest exists in any particular case is always a function of the facts in the particular case, the relationship between the parties, the professional and legal obligations that govern, statutory or common law, and the specific relational issues involving the particular parties. Here, the claim by the defence that there was a conflict of interest that would have prevented the evidence prepared by GT from being adduced at the trial of Mr. Gerstein, had it proceeded, is without foundation because there was no conflict. I adopt the reasons out in paragraph 25 of the Crown’s responding factum as follows:

(i) There was no client relationship, in the usual sense, between Mr. Gerstein and GT as Mr. Godbold was fulfilling the role of trustee in a proposal under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3;

(ii) There could have been no expectation of confidentiality as between Elliott Gerstein as the person making the proposal in bankruptcy and Mr. Godbold as the trustee as it relates to the courts and any matters involving these offences, because the trustee is duty bound to report to the court and owes its obligations to the court, not the bankrupt;

(iii) There was no engagement letter with Mr. Gerstein and the fees for the service provided were paid out of the bankrupt estate;

(iv) The terms of the relationship between Elliott Gerstein and GT are governed by the BIA and are not in any way in conflict with or inconsistent with the work conducted by Mr. David Melamed for the TPS;

(v) Under the BIA, a trustee has the ability to investigate the affairs of the bankrupt and is actually required by law to report to the Attorney General’s office if it believes on reasonable grounds that an offence under the BIA or the Criminal Code was committed by the bankrupt or any other person, and finally,

(vi) If there was not already an ongoing investigation, at some point it seems likely that GT may and likely would have been required to make such a report in light of the allegations of fraudulent conduct that were being made in this case.

I reach the conclusion that there was no conflict within the GT firm in these circumstances for these reasons but separate and apart from the fact that GT also maintained a scrupulous separation of files and information relative to each of those two roles, even if no such “firewall” was technically required.⁴³

166The issue ends up being moot owing to the conclusion I have reached on the application to stay the proceedings under s. 11(b) of the Charter. However, I have addressed the alleged conflict issue, particularly relating to that alleged between the role of GT as trustee in bankruptcy of the bankrupt estate of Elliott Gerstein and its role undertaking forensic accounting work for the TPS, in the hope that it will discourage such arguments from being made in the future when the applicable statutory provisions show that the claim is without foundation in such a case.

V Conclusion

167I have concluded that the Crown and institutional delay in this case is over three years. That is more than twice the limit of permitted Crown and institutional delay established in Morin and other cases. Further, as these reasons show, in addition to the prejudice that I have inferred merely from the lengthy delay here itself, I am also satisfied that the delay in these proceedings has been the cause of at least some specific prejudice to the applicant.

[168] In balancing the significant societal and individual rights that s. 11(b) is designed to protect, against the societal interest of seeing these charges brought to trial, and in light of all the factors and considering all of the circumstances, I am persuaded that the applicant’s section 11(b) Charter right has been violated. There is only one remedy possible. The charges are stayed.

Michael G. Quigley J.

Released: March 13, 2014

SCHEDULE 1

R. v. Gerstein: Charter s. 11(b) Delay Attribution Chart

(i) SUMMARY OF ALLOCATION OF DELAY:

[Note: Minor rounding adjustments have been made in several entries. I have rounded the total accumulated delay to 75 months and made minor adjustments to reconcile the calculations on the conversion from numbers of days or weeks or partial weeks to percentages of a month. Those adjustments are immaterial to the overall conclusions]

CHARACTER OF DELAY

CROWN ALLOCATION

DIFFERENCE

DEFENCE ALLOCATION

COURT ALLOCATION

Intake Delay

10.75 months

10.75 months

10.75 months

Inherent Delay

24.9 months

16.4

8.5 months

18 months

Total Intake and Inherent Delay

35.65 months

16.4

19.25 months

28.75 months

Crown Delay

4.5 months

28

32.5 months

11.5 months

Institutional Delay

25.3 months

7.05

18.25 months

25.25 months

Total Crown and Institutional

29.8 months

21

50.75 months

36.75 months

Defence Delay

9.5 months

4.5

5 months

9.5 months

Total Delay

75 months

75 months

75 months

(ii) CONCLUSIONS RELEVANT TO 11(b) ANALYSIS:

(i)

(a) Total delay from charge date to commencement of the trial:

74.5 months, ie.

6 years 2.5 months

(b) Total anticipated delay from charge date to the end of the trial

75.75 months, ie.

6 years 3.75 months

(c) Total anticipated delay from the discovery of the fraud to the end of the trial

91 months, ie.

7 years 7 months

(ii)

Total delay minus Justice Sutherland’s illness time:

60.5 months, ie.

just over 5 years

(iii)

Total Intake/Inherent and Neutral Delay

28.75 months, ie.

approx. 2.5 years

(iv)

Crown Delay

11.1 months

11.1 months

(v)

Institutional Delay

25.25 months

25.25 months

(vi)

Total Crown and Institutional Delay:

36.75 months

Effectively 3 years and 1 month

(iii) DETAILED BREAKDOWN OF DELAY

Time Period

Summary of Events

Elapsed Time

Position of Counsel

Attribution

August 9, 2006 (first meeting with the police) to December 5, 2007, (the date charged)

Pre-charge delay: Not formally a delay factor.

16 months

Defence can be considered in a complex case, such as fraud cases, as part of overall consideration of delay

December 5, 2007

Date Charged

Time starts running

Intake begins

December 5, 2007 - August 19, 2008

Initial disclosure was provided, furthered by 2 banker’s boxes of material.

There was also intake time for the scheduling of a JPT, completion of the JPT and the appearance at which the Preliminary Inquiry was set.

258 Days

(8 months, 14 days)

Crown: Intake/Inherent

Defence: Intake/Inherent

Intake/Inherent (8.5 months)

August 19, 2008 -August 4, 2009

Time between the setting of the Preliminary Inquiry and the first day of same.

NOTE: The Crown and the Court were available on April 20, 2009. Defence was unavailable.

350 days

(11 months, 16 days)

Crown: (i) Aug 19/08 – Apr 20/09: Institutional (244 days);

(ii) Apr 20/09 – Aug 4/09 (106 days): Defence

Defence: Idem

Aug 19/08 – Apr 20/09: Institutional

(8 months)

Apr 20/09 – Aug 4/09: Defence

(3.5 Months)

October 2008

TPS informed Defence counsel of the existence of the banker’s boxes that they acknowledge contain “evidence”, and need to be seized and protected. Defence advised that police have no resources available to scan, copy and produce those documents. Crown Attorney’s office takes position that nothing in the boxes is relevant disclosure.

August 4, 2009

August 14, 2009

Preliminary Inquiry: Part 1

10 Days

Crown: Neutral/Inherent

Defence: Idem

Neutral/Inherent (.3 months)

August 12, 2009

Crown forensic accountant testifies that he does not know whether he relied on materials in the other boxes in preparing his forensic compilation conclusions. Crown concedes 60 boxes not clearly irrelevant. Crown agrees additional boxes, which turn out to be 90, must be disclosed.

August 14, 2009

October 1, 2009

Delay between the end of the originally scheduled Preliminary Inquiry and the dates to continue the Preliminary Inquiry

48 days

(1 month, 17 days)

Crown: Inherent

Defence: Crown, because of failure to disclose 60 boxes (actually 90) after Crown agreed on Aug. 14/09 that they are relevant disclosure

Crown

(1.5 months)

October 1, 2009

October 6, 2009

Preliminary Inquiry: Part 2 Continuation dates for the Preliminary Inquiry

5 Days

Crown: Inherent

Defence: Crown for same reason as above

Inherent

(.25 months)

October 6, 2009

March 23, 2010

Delay during which the Crown continued to make disclosure of the banker’s boxes to the applicant. All boxes delivered by March 23, 2010

168Days

(5 months, 17 days)

Crown: Oct. 6/09 to Jan 22/10 (108 days): Crown due to delay in cost approval and completing job;

Jan 22/10 – Mar 23/10 (60 days): Inherent

Defence: Crown. Disclosure should have been effected before the commencement of the preliminary inquiry.

Crown

(5.5 months)

March 23, 2010

September 29, 2010

Time required by the applicant to review the disclosure and consult with experts.

190 Days

(6 months, 6 days)

Crown: Inherent

Defence: Crown. Delay caused by late disclosure. Once received, Defence required time to review same and consult with experts.

Crown

(3.5 months) Inherent

(2.7 months)

September 29, 2010

September 6, 2011

Delay between setting the date for the continuation of the Preliminary Inquiry and the first date of same.

NOTE: The Crown and the Court were available on April 26, 2011. Defence was unavailable.

342 Days

(11 months, 8 days)

Crown: (i) Sept 29/10 – Apr 26/11 (209 days):

Institutional

(ii) Apr 26/11 – Sept 6/11 (133 days): Defence

Defence: Crown for entire period due to failure to disclose

Sept 29/10 – Apr 26/11: Institutional

(7 months)

Apr 26/11 – Sept 6/11:

Defence

(4.4 months)

September 6, 2011

November 19, 2012

Delay caused by (i) the illness of Justice Sutherland, (ii) vacating of the original dates and (iii) setting new dates before Justice Horkins: 8.25 months from Sept. 6/11 to May 14/12 (first date offered) and 6 months from May 14/12 to the Nov. 19/12 continuation date

NOTE: The Crown and the Court were available in March and May of 2012. Defence was unavailable.

440 Days

(14 months, 13 days)

Crown: Neutral: R. v. Meisner and R. v. Morin

Defence: Crown Defence claims part of the delay (6.25 months) should be allocated to Crown since preliminary inquiry was not completed due to late Crown disclosure of the 90 boxes.

Neutral

(14.5 months)

November 19, 2012

November 30, 2012

Completion of Preliminary Inquiry

11 Days

Crown: Inherent

Defence: Crown for same reason as above

Inherent

(.3 months)

November 30, 2012

February 5, 2013

Intake delay due to transfer from the Ontario Court of Justice to the Superior Court of Justice and to date that first JPT was scheduled.

67 Days

(2 months, 6 days)

Crown: Intake

Defence: Intake

Intake/Inherent (2.25 months)

February 5, 2013

March 6, 2013

Date from first JPT originally scheduled to day of second JPT.

29 Days

(1 Month)

Crown: Crown

Defence: Crown

Crown

(1 month)

March 6, 2013

February 18, 2014

Date from second JPT date to the first day of trial in the SCJ.

NOTE: The Crown and the Court were available on January 6, 2013. Defence was unavailable.

349 Days

(11 months, 12 days)

Crown: (i) Mar 6/13 – Jan 6/14 (306 days): Institutional

(ii) Jan 6/14 - Feb 18/14 (43 days): Defence

Defence: Idem

Mar 6/13 – Jan 6/14: Institutional (10.25 months)

Jan 6/14 - Feb 18/14: Defence (1.5 months)

Footnotes

1. 1Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11.
2. 2(1992), 1992 89 (SCC), 71 C.C.C. (3d) 1 (S.C.C.).
3. 3Cumming J.’s Endorsement and his Amended Judgment of October 22 were entered as Exhibits 3a and 3b on the abuse of process application.
4. 4See Criminal Code, s. 141(1).
5. 5Morin, above, p. 21.
6. 6Morin, above, p. 13.
7. 7R. v. Allen (1996), 1996 4011 (ON CA), 110 C.C.C. (3d) 331 at p. 345.
8. 8R. v. Bennett (1991), 1991 2701 (ON CA), 64 C.C.C. (3d) 449 at 467 (Ont. C.A.), aff’d (1992) 1992 61 (SCC), 74 C.C.C. (3d) 384 (S.C.C.).
9. 9Morin, p. 13.
10. 10R. v. Meisner (2003), O.J. No. 1948, para. 36, aff’d 2004 30221 (ON CA), [2004] O.J. No. 3812 (Ont. C.A.); R. v. Maodus, sub nom R. v. M., N.N., 2006 14957 (ON CA), 2006 O.J. No. 1802 (Ont. C.A.), para. 29.
11. 11R. v. MacDougall, 1998 763 (SCC), [1998] 3 S.C.R. 45, at para. 61; R. v. Lukomski, 2005 ONCJ 90, [2005] O.J. No. 1126 (Ont. Prov. Ct.); R. v. Meisner, 2004 30221 (ON CA), [2004] O.J. No. 3812 (C.A.), at para. 3.
12. 12Morin, above, at para. 61; R. v. Satkunananthan (2001), 2001 24061 (ON CA), 152 C.C.C. (3d) 321 (Ont. C.A.), at paras. 57-58; see also R. v. White 1998 773 (SCC), [1998] 3 S.C.R. 534 at paras. 18-20.
13. 13(2004) 2004 40657 (ON CA), 190 C.C.C. (3d) 453 (Ont. C.A.) at 458 and 459.
14. 14R. v. McDougal, 1998 763 (SCC), [1998] 3 S.C.R. 45, at para. 30.
15. 151991 45 (SCC), [1991] 3 S.C.R. 326.
16. 16Stinchcombe, above, at p. 336.
17. 17R. v. Egger, 1993 98 (SCC), [1993] 2 S.C.R. 451 at paras. 20-21.
18. 181995 114 (SCC), [1995] 2 S.C.R. 1104.
19. 191990 45 (SCC), [1990] 2 S.C.R. 1199.
20. 202013 SKCA 92, [2013] S.J. No. 528.
21. 21See Morin, above, at para. 42-43.
22. 22See Anderson, above, at para. 88.
23. 23Anderson, above at para. 64.
24. 24Ibid., at para. 72)
25. 252009 ONCA 742, [2009] O.J. No. 4425.
26. 26Anderson, above, at paras. 86-87.
27. 27Schertzer, above, at para. 125.
28. 28Anderson, above, at para. 3.
29. 292012 ONSC 6779 (S.C.J.O.).
30. 30See Egger, above.
31. 31[2005] O.J. No. 2395.
32. 32(2004) 2004 42923 (ON CA), 73 O.R. (3d) 161.
33. 33[1998] O.J. No. 1622 (Gen. Div.).
34. 34(1986), 26 C.C.C. (3d) 418 (S.C.C.) at p 539.
35. 35See R. v. Morin, above, at para. 61-63; R. v. Godin, at paras. 29-38, R. v. Quereshi (190) C.C.C. (3d) 453, at para. 14; R. v. Kvilividze, [2009] O.J. No. 2540 (O.C.J.), at para. 57.
36. 36R. v. White, 1998 800 (SCC), [1998] 2 S.C.R. 534, at para. 22.
37. 37[2001] O.J. No. 5609 (S.C.J.O.).
38. 382009 SCC 26, [2009] 2 S.C.R. 3.
39. 39R. v. Jewitt, 1985 47 (SCC), [1985] 2 S.C.R. 128; R. v. Young (1984), 1984 2145 (ON CA), 13 C.C.C. (3d) 1 (Ont.C.A.); R. v. D. (T.C.) (1987), 1987 6777 (ON CA), 38 C.C.C. (3d) 434 (Ont.C.A.); R. v. Bellaire (1988), 1988 7110 (ON CA), 41 C.C.C. (3d) 329 (Ont.C.A.); R. v. Miles of Music Limited and Roch (1989), 1989 255 (ON CA), 48 C.C.C. (3d) 96 (Ont.C.A.); R. v. Conway, 1989 66 (SCC), [1989] 1 S.C.R.1659; R. v. Scott, 1990 27 (SCC), [1990] 3 S.C.R. 979; and R. v. D. (E.) (1990), 1990 6911 (ON CA), 57 C.C.C. (3D) 151 (Ont.C.A.).
40. 40R. v. Waugh, [1985] N.S.J. No. 315, at para 42, and R. v. Sparks, [1981] O.J. No. 3308, at para. 2.
41. 41Waugh, above, and R. v. Finn, 1996 6632 (NL CA), [1996] N.J. No. 71, para. 35.
42. 42R. v. Wolf, 2008 ONCA 352, [2008] O.J. No. 1713, at paras. 3-11; R. v. McCague, [2006] O.J. No. 2276, at para 27; and R. v. Neil (2002), 2002 SCC 70, 168 C.C.C. (3d) 321 (S.C.C.), at para. 44.
43. 43See R. v. Mercer, 2005 NLCA 10, [2005] N.J. No. 58; R. v. Tiffin, 2008 ONCA 306, [2008] O.J. No. 1525.