ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CR-14-900000131-00BE
DATE: 20140912

BETWEEN:

HER MAJESTY THE QUEEN
Applicant

– and –

OMID BAYANI
Respondent

– and –

AZIM VIRANI and FARAH DHARAMSI
Third party sureties

Jeremy Streeter, for the Applicant
Will McNair, for the Third party surety Farah Dharamsi
Talman W. Rodocker for Azim Virani

HEARD at Toronto: April 25 and June 13, 2014

Low J. (Orally)

[1] On July 22, 2011, Omid Bayani and a co-accused, Vincenzo Sansalone, were convicted of conspiracy to traffic a large quantity of GHB after trial by judge without a jury. A number of other individuals involved in a criminal organization were earlier convicted and sentenced in relation to the same conspiracy.

[2] Prior to trial, Bayani lived in Vancouver. After conviction and pending sentence, both accused were remanded out of custody to September 7, 2011. They were warned that in the event of failure to appear, sentence would be passed in absentia. Bayani returned to Vancouver. On the date for sentence, Sansalone appeared. Bayani did not. After hearing submissions from Bayani’s counsel, Bayani’s sentencing was adjourned to September 28. A warrant was issued for Bayani’s arrest. Bayani did not appear for sentencing on September 28. On that date, Bayani was sentenced to 8 years – net 7 years after taking into account pre-trial custody – and his bail was noted for estreat.

[3] Bayani appears to have absconded in Vancouver on or about September 5, 2011 and has not resurfaced.

[4] At the estreat hearing, the named sureties, Farah Dharamsi and Azim Virani sought relief from forfeiture.

[5] Bail was granted on October 5, 2007 upon a total recognizance of $450,000 consisting of $150,000 cash deposit plus $300,000 without deposit.

[6] Named surety Azim Virani, described as business owner, acknowledged the amount of $300,000 with no deposit.

[7] Named surety Farah Dharamsi, described as a banker, acknowledged the amount of $300,000 without deposit.

[8] It is alleged that Dharamsi and Virani each “signed” for only $150,000. This is inconsistent with the recognizance of bail, a copy of which appears as Exhibit A to the affidavit of Farah Dharamsi filed on this hearing. The amount shown in respect of each surety is $300,000. Nevertheless, the Crown is seeking forfeiture from the sureties Dharamsi and Varani in the amount of $150,000 each.

[9] The Crown seeks forfeiture from Bayani in the full amount. Forfeiture is so ordered. There is a cash deposit of $150,000 together with $1,400 found upon the person of Bayani at time of apprehension and currently held pending court disposition. These are ordered released to the Crown.

[10] Recognizance of bail is a personal acknowledgement of a debt to the Crown. The onus is on the surety to show cause why forfeiture of the full amount acknowledged ought not to be ordered.

[11] To ensure that justice is done in accordance with the exigencies of each case, the court has a discretion to grant relief from forfeiture. The factors relevant to the exercise of the discretion is not a closed list, but some of them are set out in Canada (Attorney General) v. Horvath, 2009 ONCA 732, [2009] O.J. No. 4308; 248 C.C.C. (3d) 1 at para 51:

the amount of the recognizance, the circumstances under which the surety entered into the recognizance, especially whether there was any duress or coercion, the surety’s diligence, the surety’s means, any significant change in the surety’s financial position after the recognizance was entered into and especially after the breach, the surety’s post-breach conduct, especially attempts to assist authorities in locating the accused; and the relationship between the accused and surety.

[12] Bayani was a high risk accused as is reflected in the quantum of the recognizances and the requirement for a cash deposit of $150,000. He was not a Canadian national and was, in a separate proceeding, subject to deportation by Citizenship and Immigration Canada.

[13] Initially, the proposed sureties were apparently Bayani’s parents and his girlfriend/co-habitant Ms. Dharamsi. It was determined that such a plan was not adequate and it was thus necessary to enlist Azim Varani as a surety. It is apparent that in assessing the ability of Mr. Varani to supervise Bayani, the court was advised of a plan that surety and accused would be living in close proximity and that Bayani would be working for Mr. Varani in his business. These matters were not, however, incorporated as bail terms and over time, both of those aspects of the plan evaporated. After the onset of the recession in 2008, Mr. Varani determined that his business could no longer employ Bayani. Bayani and his girlfriend and co-habitant, the co-surety Farah Dharamsi, moved from one residence to another, and most significantly, from downtown Vancouver to Port Coquitlam and then to West Vancouver. Mr. Varani’s ability to supervise was significantly diminished by the termination of the employer-employee relationship and the cessation of proximity of residences; he left practical supervision to Ms Dharamsi and did not terminate his recognizance. As far as the exercise of diligence is concerned, I view Mr. Varani’s efforts as unobjectionable in that he did not violate any explicit condition of the bail terms. One could not say, however, that he used all due diligence to ensure that Bayani would appear in court to be sentenced. Similarly, it could not be said that he took all possible steps to protect his risk. The statement in his affidavit that he did not know until being advised of this application that his pledge of one hundred fifty thousand dollars was in jeopardy seems to me disingenuous.

[14] Mr. Varani testified at the hearing. He is a sophisticated young businessman. There is no suggestion that he was coerced or misled into signing the recognizance. There is no cogent evidence that he was led to believe that abscondment by Bayani would not result in forfeiture of some or all of his pledge so long as he did as he was obligated under the bail terms and diligently tried to supervise.

[15] In my view, the fact that Mr. Varani did not seek to exert tighter control and supervision over Bayani and the fact that he did not pull his bail when the original factors enabling him to have a reasonable degree of oversight disappeared are linked to the circumstances under which he originally agreed to become a surety.

[16] I do not accept Mr. Varani’s testimony that he agreed to sign bail on behalf of Bayani because he thought Bayani had had a rough time of it in his youth in a troubled homeland and deserved a break. Bayani had already been convicted of crime in the 1990s and was also subject to deportation. Although Mr. Varani and Bayani knew each other, they were not close friends. There would have been no moral pull in Mr. Varani risking money for Bayani.

[17] The connection and, in my view, the motivation, was Ms. Dharamsi, Bayani’s girlfriend-- a person who had access to venture capital through her family. Mr. Varani was hopeful that Ms. Dharamsi would do business with him. In my view, Mr. Varani’s agreement to sign bail for Bayani was rooted in a pecuniary benefit conferred on him by Ms. Dharamsi investing $100,000 of risk capital in a business venture with him in which he put up no money. If the venture (a concert) was successful, he was to collect a fee. Mr. Varani testified that Ms. Dharamsi was not interested in profit from the venture but more in building business with him in the future. I infer that in respect of the particular venture, if there was a profit, it was to constitute Mr. Varani’s fee. As it transpired, the venture was not profitable and Ms. Dharamsi’s investment was lost.

[18] Mr. Varani testified that it was because of the business relationship that Ms. Dharamsi felt she could “trust” Mr. Varani in relation to bail for Bayani. It was an odd choice of terminology, since the trust that was required was trust by Mr. Varani of Bayani. What Ms. Dharamsi could reasonably have expected from Mr. Varani was a recognition in material form, when asked, of her extraordinary financial contribution to his business affairs. Ms. Dharamsi’s injection of $100,000, all of the risk capital into the concert venture with Mr. Varani gave her a moral prerogative to ask of Mr. Varani and corresponding moral obligation on Mr. Varani’s part to undertake the risk at her request. Mr. Varani also wanted to continue to be able to have access to capital investment by Ms. Dharamsi because she, in turn, had access to capital from her family. In short, there was a commercial motive for Mr. Varani’s undertaking of the risk. It was, in my view, far from a situation where there was either an inherent moral pull or an inherent trust by the surety in the accused arising out of the relationship between the two.

[19] I turn to Mr. Varani’s means and assets. It is said that between the time of the giving of the recognizance and the estreat hearing, Mr. Varani has experienced a decline in means and assets.

[20] Mr. Varani states that he had, in 2007, annual revenue of $500,000 to $700,000. He does not, however, disclose income at that period. He deposes that the revenues dropped significantly as a result of the recession, and gives his income as $40,000 annually as of 2011, the year of Bayani’s failure to appear but he does not disclose revenues. For 2014, he discloses income of $48,000 and does not disclose revenues. Significantly, he does not disclose income at the time of signing the bail. Revenues do not reveal income. Mr. Varani’s income has gone up by 20% between the date of breach and the time of the estreat hearing.

[21] Mr. Varani’s total assets went from about $407, 122 in 2007 to about $240,991 by 2011. His investment assets appear to have gone from $100,000 in 2007 to about $25,000 well before the time of Bayani’s disappearance, and to $10,000 at the time of estreat hearing. His loss of $75,000 in a single investment that went into receivership occurred in 2010, long before Bayani’s disappearance.

[22] Mr. Varani owned a condominium that in 2007 with equity of $360,000 net of mortgage. His condominium made a special levy in 2008 in respect of leak repairs and the levy against his unit was $91,130.34, payable over 30 months commencing August 1, 2008. Mr. Varani shows this as a loss of equity, diminishing the equity from $360,000 to $268,869.66 by 2011. This is not a correct characterization of the levy. One thirtieth of the total levy was an addition to the monthly maintenance payable by every unit owner. It was not a diminution of the owner’s equity in the property, particularly since it does not take into account any augmentation of market value. I therefore do not accept the argument that Mr. Varani suffered a loss of equity of $91,130 in the property.

[23] Nevertheless, to the extent that Mr. Varani was of the belief that he had a capital loss of $91,000 plus $75,000 by the beginning of 2011, well before Bayani’s trial, he did not deem it necessary or advisable to terminate his surety in light of that loss. He may have had commercial or other reasons for that.

[24] By 2014, the assessed (not necessarily market) value of the condominium property had risen to $821,000. There was a mortgage debt of $452,528.45 and a line of credit balance of about $50,200. Mr. Varani’s total assets are shown as $275,627.

[25] On the basis of what is before the court, it appears that Mr. Varani’s actual income has been modest and perhaps was always modest. He did not reveal his income at the time of the giving of the recognizance, disclosing instead his gross revenues of $500,000 to $700,000 which, unless further probed, could be very misleading. Based on the increase in indebtedness to the bank, it appears that Mr. Varani has been supplementing income with borrowings against increased market value of his condominium property. Between the date of Bayani’s abscondment and the date of the estreat hearing, Mr. Varani’s total assets have increased from about $240,991 to about $275,627.

[26] There is adequate equity in Mr. Varani’s condominium to satisfy the full amount of the debt to the Crown. I find that he had the benefit of Ms. Dharsami’s capital injection of $100,000 into his business venture which, because of the failure of the venture, she did not recoup and there is no suggestion that Mr. Varani was ever expected to repay it or that she expected him to repay it.

[27] Mr. Varani deposed that he was surprised and shocked when Mr. Bayani disappeared. The subjective expectation on the part of a surety that the accused will be compliant is not, however, in itself a basis for relief from forfeiture. If it were, the bail regime would have no teeth and the “pull of bail” would be academic.

[28] On the other hand, the court has discretion as to fashion a result that will, in its opinion, do justice in the circumstances of the case. Mr. Varani was single and without dependents at the time of giving the recognizance. While his total assets have increased since the date of abscondment due to the increase in real estate values in Vancouver, they have fallen since the date of giving the recognizance and he has acquired dependents, a wife and child. Although he probably had a pecuniary interest in agreeing to sign the recognizance at the request of Ms. Dharamsi, he had and has no interest in Bayani remaining at large and no close connection to him. Mr. Varani’s supervision of Bayani while he was at large pending trial and sentence was unobjectionable but indicative of a high level of risk tolerance given his de facto delegation of supervision to Bayani’s girlfriend.

[29] Accordingly, with respect to Mr. Varani, I would grant relief to the extent of $30,000 from the $150,000 sought to be forfeited by the Crown.

[30] I turn to Ms. Dharamsi’s situation. The 5 page affidavit filed by Ms. Dharamsi is problematic in its opacity and in its elipses. The affidavit deals largely with enforcement of and compliance with bail terms up to the time of Bayani’s disappearance.

[31] Ms Dharamsi was Bayani’s co-habiting girlfriend. They were spouses. This is supported by Ms. Dharamsi’s statement that Bayani had obligations to her as well as to his parents. She deposes in her affidavit that at the time of Bayani’s judicial interim release, she was single and without dependents. It is unclear, however, whether she has dependents now. She implies but does not state that she has.

[32] Ms. Dharamsi was described in the recognizance of bail as a “banker”. There is no elucidation as to what is meant by that term. Thus it could mean anything from retail banking employee to a principal in an investment bank. Accordingly, the term is unrevealing as to the range of her means and the level of her sophistication. What does appear, not from her evidence, but from the evidence of Mr. Varani which she does not contradict, is that she was able and willing to inject $100,000 of risk capital into Mr. Varani’s business without contribution from him for a venture of a magnitude that he had not attempted before.

[33] There is no indication that there has been any change in Ms. Dharamsi’s financial situation and I therefore infer that there has been none. I infer also that she had the ability to satisfy her recognizance at the time that she signed it and equally has the ability to satisfy it at present.

[34] Ms. Dharamsi appears to have been the person with closest proximity to Bayani during the years that he was out on bail prior to trial and prior to the sentencing date. She lived with Bayani and she did what was required to keep Bayani compliant with the terms of the release. Until his disappearance he was compliant in his reporting and residential obligations under the terms of the recognizance. As observed in Horvath, diligence, while a relevant factor, is not a sufficient foundation alone to warrant relief from forfeiture. It is one of a constellation of factors to be weighed.

[35] Bayani and Ms. Dharamsi were in a spousal relationship. In addition to her recognizance in the conspiracy prosecution, Ms Dharamsi posted $20,000 with the Canada Border Services Agency as bail for Bayani pending deportation proceedings.

[36] According to Ms Dharamsi, “[o]n September 5, 2011, Mr. Bayani left our home to go to the gym, as was his regular practice. When he did not return at 9:00 p.m., I called police immediately. Two officers attended my home to take a statement from me.” There is no evidence as to what time Bayani left for the gym or as to what he took and did not take with him – in particular, personal effects. There is no evidence that she made any inquiries of the gym, or of any persons likely to have seen Bayani or observed his movements.

[37] Ms. Dharamsi posits that Bayani is likely deceased. There is no evidence of this however, and Ms Dharamsi has led no evidence of the existence of persons who would seek to do harm to him. Had Bayani met with a mishap, it is unlikely that the fact would not have come to surface through inquiries of local emergency and hospital services. In all the circumstances, the likelihood is that Bayani is at large. The fact that a person is prohibited to have or apply for a passport does not prevent the person going underground.

[38] Ms. Dharamsi entered the recognizance of bail in the amount of $300,000. Other than Bayani himself, the person most benefited by Bayani’s release was Ms. Dharamsi. In my view, there is nothing in the material that militates granting relief from the limited forfeiture sought by the Crown. Accordingly there will be forfeiture as against Ms Dharamsi in the amount of $150,000.

___________________________ Low J.

Date of the oral reasons: September 2 2014
Date of Release: September 2, 2014

COURT FILE NO.: CR-14-900000131-00BE
DATE: 20140902

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN
Applicant

– and –

OMID BAYANI
Respondent

– and –

AZIM VIRANI and FARAH DHARAMSI
Third party sureties

REASONS FOR ESTREAT

Low J.

Date of the oral reasons: September 2 2014
Date of Release: September 2, 2014