COURT FILE: CRIMJ(P) 2005/12
DATE: 2015 07 09
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
A. C. Waite, for the Crown
- and -
SUKHRAJ ATWAL
R. Boggs, for the Defence
HEARD: March 30 and April 1, 2, 7, 8 and May 13, June 22, 2015 at Brampton
REASONS FOR JUDGMENT
HILL J.
INTRODUCTION
[1] In an 8-week period in 2006, 97 cheques of Star Plastics Inc., totalling in excess of one million dollars, were issued with the forged signature of the company’s vice president.
[2] The charges of forgery and fraud allege that the accused, Star Plastics’ accountant, dishonestly misappropriated these monies to her personal benefit.
FACTUAL OVERVIEW
Star Plastics
[3] Jasvir Dhami incorporated Star Plastics Inc. (Ont. Corp. #865998) in November of 1989. It is a plastic injection moulding company which has operated continuously in Mississauga. Mr. Dhami has been the president and owner of the company. Star Plastics manufactures consumer products as well as parts for auto assembly. For example, the company contracts with Magna International to supply parts to General Motors. According to Jasvir Dhami, Star Plastics operates in a highly competitive industry.
[4] In 2006, Star Plastics had 150 to 200 employees. Although Mr. Dhami testified that that year the company had about $20,000,000 in sales revenues, the Agreed Statement of Facts (Exhibit #1) records sales of approximately $10,000,000. Some years the company made a profit and in others it did not.
[5] In cross-examination, while Mr. Dhami claimed not to know his way around money, he acknowledged that he was a sharp and sophisticated businessman who built Star Plastics from nothing to a successful company. He further testified that he understood interest rates and knew how to use money for capital investment. As a business owner, he sought to maximize the company’s profit and, in his words, every businessman wants to keep his taxes “as low as possible”.
[6] In 2006, Star Plastics was expanding and had a new building under construction. On Mr. Dhami’s evidence, there were cash flow difficulties and revenues were “tight” all year long.
[7] Manjit Dhami, the owner’s spouse, was employed at Star Plastics. She was largely responsible for aspects of the financial end of the business and did the company’s banking.
[8] David Bishop, the vice president of Star Plastics, had signing authority on company cheques up to a value of $15,000. On the evidence, Mr. Bishop signed few cheques in 2006 and none during the time period of August through October.
The Accused’s Accounting Services
[9] Mr. Dhami informed the court that he initially retained Sukhraj Atwal in 1994 as a bookkeeper/accountant. At first, the accused provided services personally and subsequently through her company, A3 Accounting Services Inc. By 2006, with a history of preparing the personal tax returns of Mr. and Mrs. Dhami and the corporate tax returns of Star Plastics, the accused was fully familiar with the company’s financial situation. There was no evidence at trial of the date of the company’s year-end for tax purposes.
[10] Commencing toward the end of June 2006, the accused also became responsible for preparation of the accounts payable at Star Plastics. The accused had been asked to set up an accounts payable “system”. The accused worked at home and on occasion at Star Plastics. Company cheques were kept in a safe at the corporate premises, to which only Mr. Dhami had access. As needed, Mr. Dhami provided blank cheques to the accused which she then prepared in hand-written form, sometimes at home, before submitting for his signature. The accused had no signing authority for Star Plastics’ cheques.
[11] According to Mr. Dhami, he “usually” looked at the company’s monthly bank statements and cancelled cheques when they came in to be sure that “they are properly gone to the place it was supposed to”.
The Accused’s Business Interests
[12] Mr. Dhami was aware that the accused had an ownership interest in what he described as two, three, five or six stores “on the side” beyond her accounting business.
[13] At trial, an Agreed Statement of Facts recorded four entities which were determined to have “a direct connection” to the accused:
1629262 Ontario Inc. doing business as Kitchen Cuisine was listed in the corporate records as owned by Ms. Atwal. Abdul Ahmed was listed as a director.
Leader Plating was a sole proprietorship in the name of Ms. Atwal with registration under the Ontario Business Names Act on August 29, 2006 reporting to the government its “Activity being carried out” as “MFG OF PLASTIC MOULDS”.
Amlez International Inc. was owned by Abdulkadir Ahmed and Sofia Ahmed. Although Ms. Atwal is not listed as being part of this business, a cheque introduced at trial (Exhibit #21) suggests that the accused had signing authority for this company’s bank account.
Canadian K & B Gas Bar is owned by Kuldip Lalhhar. Ms. Atwal was the bookkeeper for this company.
An address of 910 Rowntree Dairy Road, No. 18 & 19, in Woodbridge, Ont. appears in government business registration records as the mailing and business address of Leader Plating.
[14] Corporate records were also entered at trial establishing that the accused was the administrator and director of A3 Accounting Services Inc. (Ont. Corp. #1653071) with articles of incorporation of March 24, 2005. A residential address of 728 Woodland Acres Cres. in Maple, Ont. appears in government business registration records and banking documentation as the address associated with the accused as an administrator, director or operator of A3 Accounting Services Inc., 1629262 Ontario Inc. and Taste of Class Giftware Inc.
The Corporate “Loans” to the Accused
[15] Manjit Dhami testified that on one or two occasions in 2003 the accused borrowed money from Jasvir Dhami and repaid him.
[16] Jasvir Dhami testified that beginning in March of 2006 he incrementally loaned the accused sums of money ultimately totalling about $400,000. He did so by issuing Star Plastics’ cheques. These were “loans”. David Bishop was not informed of these loans. Mrs. Dhami’s recall was that the loans totalled $400,000 to $450,000. On the Mr. Dhami’s evidence, the agreement he made with the accused on each occasion had certain features which included:
(1) a cheque issued not to Sukhraj Atwal personally but to an entity as requested by the accused (“She asked me to make the cheques to those people, and that’s how it was made”)
(2) a promised return of principal and 20% interest within two weeks of a loan being made
(3) repayment by a cheque payable to Mr. Dhami or his wife for deposit to their personal joint bank account.
[17] Mr. Dhami variously testified that he made five or six or eight or ten loans to the accused. Asked why he made the loans, the witness replied, “Because 20 percent interest she was giving”. Cross-examined about this interest rate, Mr. Dhami agreed it was “really high”, “too much”, likely in excess of 60% on an annual basis, and not a normal rate for “a legitimate enterprise”. The witness testified both that he did not think it was “wrong” and that it was “essentially illegal”.
[18] As to the accused’s performance in repaying the loans, Mr. Dhami provided contradictory testimony as to whether the accused was repaying the loans as promised. At some points in his evidence, the witness stated that the accused was in good standing to July 2006. At another point, he testified that, “[i]n the beginning she returned some of it” but when she did not repay the “first” $70,000 or the interest on that loan he nevertheless loaned her more money. Mr. Dhami further maintained that he never saw “half” or “most” of the money repaid:
DEFENCE COUNSEL: Q. All right. So you didn’t get the money back that you expected in two weeks, you didn’t get the outrageous interest back…
A. Right.
Q. …and yet you’re loaning more money?
A. Yes.
Q. All right. And you don’t get that money back either?
A. Obviously didn’t get any back.
Q. All right. You don’t get any back?
A. Yeah.
Q. And you keep advancing more and more money?
A. Because she say give me that much and I can free up the other money.
Q. But you never…
THE COURT: Sorry, I didn’t….
DEFENCE COUNSEL: Q. …get it back?
THE COURT: Sorry, I didn’t hear your answer.
A. She said give me more money then she can give all at once, all the rest of it.
Q. Sir, you wouldn’t have kept advancing her more money if she didn’t pay you back, right?
A. She said pay me this time – if you pay me this one, then I’ll get the other money as soon as quickly as possible.
DEFENCE COUNSEL: Q. You agree, sir, that it makes sense – it makes sense that you don’t keep advancing her money when she hasn’t paid you what she owes you already, right?
A. It also makes sense to get the other money, the one she taken already – she ask for money, so I can get the other money back.
Q. You’re saying it also make sense?
A. Yes.
Q. The question I’m asking you is that you understand that it does not make sense to advance more money when she already owes money that she has not paid back, right?
A. Depend which one you look at it, sir.
Q. Are you saying that’s not right?
A. No, if she say, give me more money then I’ll give you other one back, the one prior to that, ‘cause your money’s tied up.
[19] Mr. Dhami was cross-examined as to his record-keeping respecting the loans to the accused. There was no loan ledger. He reportedly kept no records – “I don’t have any record, no”. He thinks his wife kept track of payments. He did not write down the dates he loaned money or the dates any monies were returned:
Q. So you have no idea on this loan for $400,000 what the total was, right, because you didn’t write it down, right?
A. Yes.
A. I don’t know what I got back.
[20] The witness further testified that some of the accused’s cheques bounced. He had no idea how many – “because I never kept them”.
[21] During her evidence, Manjit Dhami testified that she kept track of all the loans to the accused and the dates and particulars of monies coming back in. After a recess for disclosure of additional documents from the witness’ table at home, no ledger, summary or chart was produced which had been created and maintained over time by Mrs. Dhami.
[22] Filed in evidence were copies of only these cheques, totalling $335,000, signed by Jasvir Dhami as representative of the loan cheques provided to the accused:
Date Amount Payee
March 10, 2006 $50,000 796629 Ontario Ltd.
April 20, 2006 $30,000 1629262 Ontario Inc.
May 12, 2006 $30,000 A-3 Accounting Service
June 7, 2006 $75,000 1652137 Ontario Inc.
June 15, 2006 $100,000 1652137 Ontario Inc.
July 13, 2006 $50,000 1629262 Ont. Inc.
There was no further evidence led at trial as to the operational business name of either 766629 Ontario Ltd. or 1652137 Ontario Inc. or their relation to the accused beyond a reference in Exhibit #23 describing 1652137 Ontario Inc. as the registered owner of the assets of a retail store operating as “Atwals”.
[23] Also produced in evidence were copies of the following cheques payable to Manjit Dhami, totalling $405,000, which were identified during the testimony of Mr. and/or Mrs. Dhami:
Date Amount Payor
August 18, 2006 $25,000 A3 Accounting Services Inc.
August 25, 2006 $50,000 Sukhraj Atwal
August 31, 2006 $15,000 K & B Gas Bar
August 31, 2006 $15,000 K & B Gas Bar
August 31, 2006 $20,000 1629262 Ontario Inc. O/A Kitchen Cuisine
September 1, 2006 $20,000 1629262 Ontario Inc. O/A Kitchen Cuisine
September 8, 2006 $30,000 K & B Gas Bar
September 19, 2006 $50,000 1629262 Ontario Inc. O/A Kitchen Cuisine
September 20, 2006 $25,000 1629262 Ontario Inc. O/A Kitchen Cuisine
September 21, 2006 $50,000 Leader Plating
September 21, 2006 $25,000 1629262 Ontario Inc. O/A Kitchen Cuisine
September 22, 2006 $25,000 1629262 Ontario Inc. O/A Kitchen Cuisine
October 2, 2006 $45,000 Amlez International Inc.
October 3, 2006 $10,000 Leader Plating
[24] Mrs. Dhami testified that these cheques were deposited to the joint account of her and her husband at TD Canada Trust (Acc. #89-506362). Some cheques she received from the accused while others (Exhibit #20 – cheques 0313, 0373, and Exhibit #s 21, 31, 34, 35, 39) were directly deposited to the account by the accused. The witness expected that all cheques would be honoured. Evidence at trial establishes payment stopped on cheque #s 1, 2, 5, 6, 8, 9, 10, 11 and 12 in para. 23 above (total: $290,000). Although cheque #s 13 and 14 were certified cheques, on October 10, cheque #13 was recalled and the funds credited back to the Amlez bank account.
[25] Enclosed within the closing submissions’ document filed by the defence, Defence Submissions & Exhibits (Exhibit D), were 7 additional cheques totalling $76,500.00:
Date of Cheque
Amount
Payor
Payee
(1)
August 26, 2006
$2,000.00
1629262 Ontario Inc.
Cash
(2)
August 26, 2006
$1,500.00
1629262 Ontario Inc.
Cash
(3)
September 3, 2006
$1,000.00
1629262 Ontario Inc.
Cash
(4)
September 12, 2006
$2,000.00
1629262 Ontario Inc.
Cash
(5)
September 26, 2006
$50,000.00
Amlez International Inc.
Manjit Dhami
(6)
October 3, 2006
$10,000.00
Leader Plating (chq. #116)
Manjit Dhami
(7)
October 3, 2006
$10,000.00
Leader Plating (chq. #319)
Manjit Dhami
The parties agreed that the accused signed these cheques. It is not known whether some of the cheques were designed to replace earlier NSF cheques. Cheque #s 6 and 7 were certified cheques. On the “Re” line of each of cheques #s 1 to 4 is written “M. Dhami”. On the “Re” line of cheque #5 is written “BUSNESS LOAN”. Adding these cheques to the trial record after Mr. and Mrs. Dhami were no longer in the stand, and not through a defence witness, tends to be problematic. Nevertheless, counsel were prepared to have the court consider these cheques as supportive of their respective theories of the case.
[26] Mr. Dhami’s testimony provided various answers as to his understanding as to why the accused wanted to borrow money:
(1) the accused’s stores were not doing well and she needed money to support their operation
(2) “She asked for some loan funds to do her own business”
(3) he had no idea why the accused wanted the money or, if he knew, he may have forgotten.
[27] During cross-examination on April 1, 2015, the defence challenged Mr. Dhami suggesting that there was in fact never any loan agreement but rather an elaborate tax evasion scheme to divert or syphon money from Star Plastics through the creation of fictitious liabilities or expenses for the company in the form of cheques to entities associated with the accused, appearing to be legitimate suppliers invoicing Star Plastics, while recovering the paid-out monies in his personal bank account and lowering Star Plastics’ tax liability. The implicit theme put to the witness was that he and his wife had no intention of paying personal income tax on the monies repaid by the accused. In his initial responses, Mr. Dhami made various points:
(1) he had “a letter” dealing with the agreement but would have to find it – “I don’t know where the piece of paper is” … “I think it’s somewhere”
(2) in response to the suggestion of income tax evasion, the answer was “No”
(3) the witness had not been involved in committing “a fraud”
(4) the objective of the payments to the accused was not to lower Star Plastics’ tax rate
(5) as his accountant, the accused had told him that she would look after everything at year’s end and would “adjust” things – “[a]t the year end she will fix all the – her paperwork”.
[28] In additional cross-examination before and after Manjit Dhami testified and further documentary disclosure was made by the Dhamis to the police and the prosecution and in turn to the defence, some of these above-described positions were further unbundled. The loans to the accused were described as “[f]rom myself” and “from me” and:
Q. This is your loan though right?
A. That’s correct.
Q. And it’s coming from you and your company?
A. That’s correct.
[29] While saying that the loans involved promissory “notes”, only one promissory note was produced respecting a June 15, 2006 loan of $100,000 (Exhibit #23). Mr. Dhami has no idea who drafted this promissory note. The note reads:
For valuable consideration, the undersigned Mrs. Sukhraj Atwal of the Town of Maple and having a principal office and place of business in the City of Metropolitan Toronto, acknowledges itself indebted and hereby promises to pay to Mr. Jasvir Dhami. on August 31, 2006 (subject to the Creditors agreeing to extend the due date for a further unspecified period at their sole option), for valuable consideration the sum of $100,000 DOLLARS, consisting of principal in the amount of $120,000 and interest accrued in the amount of $20,000.
Said funds are to be used for the development and construction of a new retail store operating at “Atwals” a division of 1652137 Ontario Inc. located in Kingston, Ontario, and for no other improper purpose.
The Lender may ask for a General Security (GSA) from the corporate entity 1652137 Ontario Inc., that is the registered owner of the assets of the store, which shall be prioritized ahead of any shareholder loans or advances.
The obligations hereunder shall be binding upon the undersigned, its associated, affiliated or related corporations, and the undersigned’s legal representatives and assigns, and shall enure to the benefit of Mr. Abdu Ahmed, his heirs, legal personal representatives and assigns. The undersigned hereby waives demand, notice of dishonour and presentment.
(emphasis of original)
[30] At the preliminary inquiry, Mr. Dhami provided this evidence:
Q. Okay. But it’s your belief there are cheques from those companies to your personal TD bank account or your wife’s?
A. Yes, because they were taken. The money from Star that to accounting services all to these people you just mentioned the names.
Q. Yeah.
A. KG Bar and they returned the money with 15, 20 percent return interest rate on those.
Q. You mean you got 15, 20 percent more?
A. That’s what they promised.
Q. So by your logic, I guess, so money, you’re saying, that went to these companies that Star Plastics apparently lost?
A. Mm-hmm.
Q. Was then re-directed back to your personal account and you got more money?
A. That’s – that’s right.
Q. Sound like fraud to you?
A. Yes, it was a fraud.
[31] Under cross-examination in this trial, Mr. Dhami also provided this evidence:
Q. Now, you also directed her to make the payments to your wife instead of to you?
A. That’s correct.
Q. All right. And the purpose of that was to make it look like you had some sort of expense on Star Plastics, and you were being repaid not to Star Plastics with the interest, but to yourself personally, correct?
A. Correct.
Q. And the purpose of doing that was to lower the tax rate of Star Plastics, right?
A. If she knew that money we going to make on that year less than 200 or 300 or 100,000, she said take that money and I will adjust it at the end of the year. So obviously she knew we were making the money.
Q. …The purpose for these transactions, whether the money was coming in or going out, was to lower Star Plastics’ income tax rate, correct?
A. The accountant – who – who did the accounting, they knew what they were doing.
Q. Yes.
A. Because I depended on that.
Q. Okay. Maybe, but not only did the accounting person know, you knew, right?
A. Yes.
Q. Yes, you knew. All right. And the accounting person had your permission to do it, right?
A. My permission, like any other business man, is to lower the taxes, yes.
Q. She explicitly had your permission to engage in this tax evasion process?
A. No.
Q. Now, the next question is, “Do you think it’s a crime to lie to the government about your company losing money, but then you get it back personally in your savings account?” And you answer is, “well, I don’t think it’s a lie because you’re depending on your accountant and that she’s telling you to do that”. Now, do you remember being asked those questions and giving those answers?
A. Yes.
Q. Right. You were sworn to tell the truth when you were giving those answers?
A. Yes.
Q. And you were telling the truth when you were giving those answers?
A. Yes.
Q. At least part of the truth?
A. Yes.
Q. Right. And you adopt that testimony here today, correct?
A. Right.
Q. So right there, you have admitted that you gave permission to engage in the syphoning off of funds from Star Plastics to these other suppliers that you didn’t normally do business with, they weren’t buying Plastic products?
A. No.
Q. Right. That’s right? You gave that permission, right?
A. Yes.
[32] Mr. Dhami identified Exhibit #27 at trial as a copy of a handwritten note dated August 15, 2006 signed by the accused and provided to him. The note reads:
Hi Jas August 15/2006
I am sorry due to my accident and then surgery, I have let you down, in order to close these I wasn’t able to do the leg work. Anyway this what we going to do if this is okay with you,
$65,000.00 we are going to give $95,000.00
$50,000.00 ″ ″ ″ ″ ″ $95,000.00
190,000.00
We are going to give you a certify cheque of $25,000.00 to $30,000.00 every Friday and then as a bonus we will give you $15,000.00 on October 21st, 2006 in reality you will receive $205,000.00 in total. I know this puts you in a mess maybe you can pay from Star and reimburse back for your personal matter. I should be released tomorrow from hospital and I will come and try see you on Wednesday, my home # is 905-770-4364 Bhenji can call me tomorrow @ home if she wants to or my cell # 647-241-6640. I hope you are not upset with me. I am really really sorry. But this is something beyond my control.
Thanking you in advance.
[signed Sukhraj Atwal]
[33] By the time of receipt of the accused’s letter, some of her loan repayment cheques had bounced according to Mr. and Mrs. Dhami. Mr. Dhami agreed in his testimony that he was angered by this. According to the witness, “we needed the money for the business”.
[34] Mrs. Dhami testified that she phoned the accused about cheques coming back ‘not sufficient funds’ for the loan payments. Mrs. Dhami recalled the accused providing post-dated cheques in August 2006 – cheques which subsequently bounced. On Mrs. Dhami’s evidence, at a point the accused phoned to tell her not to go to the bank as there was no money.
The Police are Contacted
[35] Jasvir Dhami testified that prior to opening the mail with Star Plastics’ October 2006 bank statement, the accused had made efforts to intercept the mail:
… the mail from the RBC, and that the mail she told me, when the mail comes in, don’t open it, give it to me. Don’t – and she repeatedly come every day to check that mail and say, have you received the mail? Have you received that mail? Coincidentally with the God blessing, I grabbed the mail beforehand and opened it.
[36] Mr. Dhami testified that on October 2 or 3, 2006 when he opened the company’s mail he reviewed its Royal Bank of Canada bank statement and enclosed stamped cheques. The witness testified both that there were no “legitimate” cheques in the bundle and that there was a “blend” which included some cheques he had signed as well as 84 cheques he had not seen before written between August 10 and October 3, 2006 purportedly signed by David Bishop which he considered questionable.
[37] According to aspects of Mr. Dhami’s testimony, the Bishop cheques were written to “people that I didn’t even know” including a number of companies Star Plastics had never dealt with such as 1629262 Ontario Inc., Leader Plating, Rogers, Wells Fargo, York Disposal, Amlez International, and Canadian K & G Gas Bar. Although Star Plastics had a supplier named Leader Plating On Plastics Ltd., it had no dealing within an entity named Leader Plating.
[38] In his in-chief evidence, Mr. Dhami stated:
Q. …did you conclude that Ms. Atwal had something to do with this?
A. Yes.
Q. How?
A. ‘Cause some of her own – cheques were made to her own companies. ‘Cause we – this – some with Roger, Waste Services, Wells Fargo and all that, we never dealt with them, and I think I don’t have the cheque right now, I don’t know where it is, one of the cheques where her children used to study was made to that Upper Canada school.
[39] On the evidence of Jasvir Dhami and David Bishop, Mr. Dhami questioned Mr. Bishop about 84 cheques which purported to bear his signature. Bishop denied signing the cheques. The Agreed Statement of Facts and David Bishop’s testimony establish that he in fact signed none of those cheques and authorized no one to sign his name. The total value of the 84 cheques was $819,776.52. Jasvir and Manjit Dhami also testified that they did not sign these cheques with Bishop’s name.
[40] Mr. Dhami informed the court that he immediately contacted his bank, the police and the Canada Revenue Agency and retained civil counsel. The processing of some outstanding cheques was stopped resulting in an actual loss to Star Plastics of $645,301.16.
[41] Included in the population of 84 cheques were 42 cheques written to the following:
$ 16,063.92 – 1629262 Ontario Ltd. (2 cheques)
$334,302.63 – Leader Plating (17 cheques)
$186,000.21 – Amlez International Inc. (8 cheques)
$118,000.00 – Canadian K & B Gas Bar (7 cheques)
$ 52,939.55 – Joginder Nahal (8 cheques)
$707,306.31
The other 42 cheques with Bishop’s forged signature totalling $112,470.21 were written to 25 entities not directly linked to the accused.
[42] Subsequent review revealed an additional 13 cheques (total: $195,954.51) written to Amlez International Inc. and to Leader Plating between September 25 and October 3, 2006, purportedly signed by David Bishop which he did not in fact sign for a total of $903,260.82 on the 55 cheques written to entities to which it was agreed the accused had a direct connection. The total value of all 97 cheques was $1,015,731.03.
[43] In cross-examination, Mr. Dhami acknowledged, in apparent reference to his personal loans arrangement with the accused, that “she may have taken money on those names”. The witness conceded that some of the loan payments he made to the accused were made payable to Kitchen Cuisine. Also in cross-examination, Mr. Dhami stated, “[s]he bring the money to us from KG Bar and from Amlez”.
[44] Mr. Dhami testified that on about October 5, 2006, the accused came to him at Star Plastics saying that she needed more money for the “Leader Plating Company” and that if that company did not receive $100,000, it would stop a parts shipment to Star Plastics. He refused to advance those funds having concluded that the accused was responsible for stealing from the company. The witness further stated:
That – that time she knew all of our accounting, so she knew there’s only X number of dollars left in the company, if she take all that then there would be nothing left of the company. Then nobody can get after her after that. The company would have been closed.
The Financial Health of the Accused’s Businesses
[45] Banking documents entered at trial (Bank of Montreal Acc. #2411 1123-990) reveal the following profile for the accused’s company 1629262 Ontario Inc. The opening balance on August 1, 2006 was $1,469.23. By August 14, the account was -$2,280.77 climbing back to $23,887.14 at month’s end with 31 debit items processed in-month and 29 credit items processed. By September 19, the account level had fallen to $6,107.14 and a day later to -$63,953.80. In the period of September 11 to 22, the accused’s account was charged a $35.00 “Not Sufficient Funds Fee” by the bank on twenty occasions ($700.00 total) relating to NSF cheques written on the account totalling nearly $80,000.00. With 201 debit items processed and only 111 credit items processed in the account in September 2006, the account’s closing balance at month’s end was $13,980.35.
[46] It appears, given the correspondence in amounts, and reference to Exhibit #s 2A and 7, that a number of cheques written from Star Plastics to Leader Plating were deposited to the 1629262 Ontario Inc. bank account by Automated Bank Machine Deposits including:
August 31, 2006 $ 9,964.00
September 5, 2006 $ 9,932.85
September 14, 2006 $ 9,930.00
September 19, 2006 $ 9,630.25
September 20, 2006 $ 9,930.25
September 26, 2006 $ 9,975.00
September 27, 2006 $ 9,732.32
September 28, 2006 $ 9,975.36
Total $79,070.03
[47] The same day as the Business Name Registration of Leader Plating, August 29/06, the business opened Account #7212 at the Italian Canadian Savings & Credit Union Ltd. with the accused as the sole signing authority. On August 30, 2006, the first deposit was made to the zero-balance account with a $22,028.63 deposit composed of two Star Plastics’ cheques ($7,844.60 and $14,184.03). As noted in the Agreed Statement of Facts, in the bank account’s short history “[t]he only source of funds for Leader Plating was the cheques which were drawn on the account of Star Plastics”.
[48] By September 13, 2006, the account balance was $82,769.34 helped along by the deposit of further Star Plastics’ cheques on September 12 and 13 ($17,634.26 and $19,916.38). By September 26, the account balance had fallen to $710.76. With the deposit of more Star Plastics’ cheques on October 2 ($19,441.24 and $19,420.43 and $11,088.19) totalling $49,949.86 and on October 3 ($19,863.25), the account balance rose to $97,256.48 as of October 3. In the time period of October 4 to 6, there were five NSF charges to the account and reference to seven Returned Cheques totalling over $10,000. By October 6, after only a 37-day history for the account, the bank balance was zero with an overdraft “suspended to close account”.
Joginder Nahal’s Evidence
[49] Joginder Nahal testified that after the accused had been preparing her family’s tax returns, she went to work for the accused in 2005 as a labourer in a warehouse which sent “stuff” to the accused’s stores after price tickets were put on the merchandise. She was employed in this capacity until she left at the start of 2007. The witness identified her work location as Atwal’s Kitchen – Gifts – Home Decor at 910 Rowntree Dairy Road, Units 18/19 in Woodbridge, Ontario, the same business address for Leader Plating and 1629262 Ontario Inc.
[50] On Ms. Nahal’s evidence, sometime in 2006, the accused asked her to assist with her banking. She was instructed that cheques would come in Ms. Nahal’s name from Star Plastics which she was then to cash and give the proceeds to the accused or to deposit the cheques in her own account and then write cheques to third persons as directed by the accused. On Ms. Nahal’s evidence, the accused said that she was working for Star Plastics doing their payroll. The accused at no point explained why Star Plastics’ cheques were in Ms. Nahal’s name except to say that “my bank puts my cheque on hold and I need the money quickly”. Ms. Nahal did not recall the accused giving her cheques from any entity other than Star Plastics.
[51] Ms. Nahal informed the court that she recalled an early exchange with the accused regarding the first cheque in her name:
Q. Will I have any problem?
A. I have talked to them… the owner of Star Plastics. I have told them your name…there is no problem.
Q. Okay, I will cash it.
[52] At trial, Ms. Nahal identified eight cheques made payable to her from Star Plastics between August 17 and September 26, 2006. The accused wanted the cheques dealt with right away. The cheques totalled $52,939.55 received from the accused by Ms. Nahal. Ms. Nahal testified that she knew no one at Star Plastics and never did any work for that company. It never occurred to the witness that a fraud might be involved.
[53] Ms. Nahal was not paid to do the deposits or cheque-writing and she retained none of the funds from Star Plastics. The cheques received from the accused covered the $6.00 bank service charge for some of the certified cheques she was asked to prepare for the accused.
[54] The witness identified Exhibit #s 15, 16, 17 and 18 as lists totalling 37 individual persons/entities (two cheques to each of Lin, Nagra, Burgess, Fleifez, Sampson and Simmerson) written by the accused to whom payments were to be made from the proceeds of the Star Plastics’ cheques. Working from these lists, Ms. Napal prepared the cheques written on her account and delivered them to two other “girls” in the office as the accused was rarely there. While Ms. Napal did not recognize most of the names in the lists, some of the individuals worked “at the stores” including Anna Di Rosa and Fawzia Asim. One of the lists of names (Exhibit #16) was written by the accused on a small paper headed Imperial Printing of Canada Limited at 100 Westmore Drive, Etobicoke, which was also the business address of other entities associated to the accused such as A3 Accounting Services Inc., Kitchen Cuisine and A Taste of Class Giftware Inc.
[55] Ms. Nahal testified that she also received two cheques from the accused totalling $17,000 to be deposited to Ms. Nahal’s account. One of the cheques, for $15,000, was from the accused’s husband, Harinder Pal Atwal. On the witness’ evidence, when both cheques bounced, the bank took $3,000 of the witness’ own funds to deal with the problem. When she demanded repayment from the accused saying that she was quitting, she was reimbursed by the accused.
Civil Proceedings
[56] Mr. Dhami testified that the legal proceedings commenced against Star Plastics’ bank, the Royal Bank of Canada, for its failure to recognize that identified cheques did not bear the authorized signature of David Bishop or exceeded his signing authority limit, were ultimately settled for what the witness variously described as $125,000 or $200,000. The witness recalled his legal fees as being approximately $250,000.
[57] In closing submissions, counsel referred to monies recovered from two of the accused’s bank accounts:
There were two accounts that were operated by Ms. Atwal. Judgment was recovered against her in the amount, I believe, of approximately $700,000. Those two accounts were seized.
So you’ve got those two accounts with another 20 - $21,000 – or I’m sorry, not 21, $31,000.
Handwriting Comparison
[58] On consent, the prosecution filed Exhibit #3, an October 22, 2010 report of G. Boyd, a Forensic Document Examiner at the Centre of Forensic Sciences. The expert’s report focused upon whether the signature on each of the 84 Star Plastics’ cheques in Exhibit 2A was written by David Bishop. To this end, the cheques were compared to known signatures of Mr. Bishop. The expert concluded that with “[m]ost of the questioned signatures…simulations of the way in which David Bishop writes his signature”, and “fundamental differences in letter design/construction and other handwriting features…observed” between the known signatures and the questioned signatures, David Bishop did not write those signatures.
[59] In addition, Mr. Boyd undertook, from within the population of the 84 cheques with the disputed signature, an attempt to determine whether the accused wrote David Bishop’s signature. On the assumption that Star Plastics’ cheque #s 19227, 19228, 19280, 19281, 19282 had been written by the accused, the expert compared those documents against the larger sample ultimately concluding that he was “unable to identify or eliminate the writer” of those five cheques as having written any of the cheques with the questioned signatures.
[60] Within the 84-cheque group, there were eight handwritten, as opposed to machine-prepared, cheques (Exhibit #5: cheques #s 019073, 019227, 019228, 019233, 019236, 019280, 019281, 019282). Introduced at trial were six cheques handwritten by Jasvir Dhami (described in para. 22 above) which he described as loans to the accused. Also in evidence are documents attributable as containing the genuine handwriting of the accused (Exhibit #s 15 to 22, 27, 31 to 39). In comparing the handwritten Exhibit #5 cheques to the “known” handwriting of Mr. Dhami and the accused, certain features are uniquely apparent in the handwritten Exhibit #5 cheques and the accused’s handwriting and which, in the case of some features, are dissimilar in Mr. Dhami’s handwriting, including these characteristics:
(1) text written in capital letters except using lower case for the letter “i” (Exhibit #5, cheques 019073, 019233, 019236; and Exhibit #s 15 to 18, 20 to 22, 27, 32, 33, 35 to 38 (Atwal) compared to Exhibit #s 24, 25, 26, 28, 29, 30 (Dhami))
(2) the style of printing an upper case letter “G” (Exhibit #5, cheques 019073, 019227, 019228; and Exhibit #s 15, 17, 18 (Atwal) compared to Exhibit #30 (Dhami))
(3) the style of writing ampersand as a shortform of the word ‘and’ (Exhibit 5, cheques 019073, 019227, 019228, 019233, 019236, 019280, 019281, 019282; and Exhibit #s 16, 27 (Atwal))
(4) the manner of designating the number of cents in a dollar-and-cents figure using “00/xx” (Exhibit #5, cheques 019073, 019227, 019228, 019233, 019236, 019280, 019281, 019282; and Exhibit #s 24, 25, 26, 28, 29, 30 (Dhami using “xx/xxx”)).
POSITIONS OF THE PARTIES
The Prosecution
[61] On behalf of the prosecution, Mr. Waite submitted that the Star Plastic cheques were locked up at the company premises and only available to the Dhamis and to the accused when provided to her to prepare accounts payable for Mr. Dhami’s signature. It is an agreed fact that the 84 cheques in Exhibit #5 bearing David Bishop’s signature were not signed by him. The only sworn testimony before the court is that neither Bishop, nor Jasvir or Manjit Dhami forged David Bishop’s name on these cheques and none of these parties authorized the issuance of the cheques.
[62] Thirteen additional cheques, discovered after the police were alerted, involved similar forgeries. Of the total of 97 cheques, a majority (55/97) were written to five entities/persons agreed to have a direct connection to the accused (Amlez International Inc., Leader Plating, Canadian K & B Gas Bar, Joginder Nahal, and 1629262 Ontario Inc.). The accused had the opportunity to prepare the forged cheques for her personal benefit while making the payees appear to be legitimate suppliers of Star Plastics. For example, one of the accused’s businesses, Leader Plating, had a name which the accused would have known closely resembled one of the company’s actual parts suppliers.
[63] It was submitted that none of the forged cheques related to bona fide suppliers of Star Plastics and none benefitted the corporation. Indeed, the fraud occasioned a loss of $645,301.16 for Star Plastics endangering its business operations.
[64] There was, on the evidence, a loan arrangement or tax-saving scheme with the accused as described by Mr. and Mrs. Dhami and as also described in Exhibit #s 23 and 27. Mr. Dhami authorized these loan payments to the accused. He signed his own name on these Star Plastics cheques, all preceding August 10, 2006. The accused repaid only some of the loan monies before running into financial trouble and issuing cheques to Manjit Dhami which bounced.
[65] Crown counsel submitted that Mr. Dhami’s evidence taken as a whole makes it clear that he did not authorize or play any part in the issuance of the 97 forged cheques and that these cheques formed no part of the loan arrangement he had with the accused.
[66] It was submitted that being in arrears in her loan repayment, and with the accused’s businesses in difficulty, the accused forged cheques and perpetrated a deliberate fraud against Star Plastics in an effort to solve her own financial problems.
[67] Mr. Waite submitted that on the totality of the trial record, it has been established that the accused forged David Bishop’s signature and defrauded Star Plastics for her own benefit. The prosecution argued that handwriting comparisons of the eight handwritten cheques of Star Plastics in Exhibit #5 with identifiable writings of Mr. Dhami and the accused establishes that the accused prepared those cheques and by inference the additional 76 cheques in that exhibit, as well as the 13 cheques in Exhibit #12, before taking the final step of forging David Bishop’s signature on each of the cheques.
[68] While arguing that there is no logical explanation for Mr. Dhami to give the accused a “blank cheque” to write forged cheques outside of the existing loan scheme, counsel articulated an alternative position taking into account certain defence submissions suggesting that Mr. Dhami authorized the issuance of the 97 cheques:
Mr. Boggs made reference to count number one of the indictment indicating that in his submission there was no fraud with Star Plastics as the victim. Indicating that, in fact, if there was a victim it would have been Revenue Canada because Mr. Dhami was fully aware of the full extent of the $1,015,000 that was being diverted by way of the fraudulent cheques.
Mr. Boggs made no reference to count number two of the indictment, and I’ll start by indicating if Your Honour accepts that Ms. Atwal was in effect given a blank cheque by Mr. Dhami to take in effect an unlimited amount of money, in this case one – just in excess of $1,015,000 from his company as part of a taxation fraud, that she was ultimately going to pay back to him and didn’t, that count two indicates that she did knowingly use a forged document to-wit: a cheque as if genuine, that count would cover her knowledge that the cheques which were signed in the name of David Bishop were fraudulent and despite that she negotiated, in the submission of the Crown….she prepared 97 cheques and signed them with the signature of David Bishop. If she did that….
THE COURT: Right, but the defence position, which we have had, is that in fact she didn’t sign Bishop’s name on the cheques….
CROWN COUNSEL: He….
THE COURT: ….that that was part of Mr. Dhami’s end of things.
CROWN COUNSEL: He did indicate that. I’m asking Your Honour to accept that she did sign those cheques and if in fact she signed them in furtherance of a – in effect an agreement between herself and Mr. Dhami, that Mr. Dhami – or that she, in fact, received those cheques. Those cheques were paid to what Mr. Boggs refers to as the fake suppliers, which were the 40 some odd cheques payable to the companies that she had an interest in, that she received those cheques, that she negotiated those cheques, that she had to have known they were fraudulent at that time because they were in furtherance of a taxation fraud which would benefit Mr. Dhami and which would not benefit her or the companies who were the recipients of those cheques. She negotiated them, she deposited them, and therefore knowingly used a forged document.
…that Star Plastics was a victim, if you accept that it was a scheme between the two of them. Mr. Dhami’s testimony was that the scheme was something that he didn’t really fully understand and adjusted at the end of the year and it was a scheme that had been suggested to him by Ms. Atwal and that he was simply following along with.
The Defence
[69] On behalf of the accused, Mr. Boggs argued that the evidence is clear that, beginning in March of 2006, Jasvir Dhami engaged in a loan arrangement with the accused to funnel money from Star Plastics to “third party fake suppliers” “for the purpose of reducing his own income tax”. Counsel described the agreement as an “income tax evasion scheme”.
[70] Counsel submitted that the removal of monies from Star Plastics through the 97 cheques should be considered in this way:
…I would respectfully submit that what this really is a – a fraudulent fraud.
It’s something that’s designed by Mr. Dhami to get his loan money back that he hasn’t been repaid.
…the loss of $645,000 in my respectful submission is one that is really a paper loss and one of Mr. Dhami’s own creation.
[71] Mr. Boggs submitted that Jasvir Dhami was an evasive and incredible witness. Counsel relied upon passages of Mr. Dhami’s testimony at the preliminary inquiry and here at trial (reproduced in Exhibit ‘D’, Tab 1) to submit that the complainant admitted that he knew about, and authorized, the issuance of the 97 cheques. In effect, the complainant augmented the earlier loan scheme by graduating to a second and parallel scheme of putting transactions to fake suppliers on the books of Star Plastics:
Now, fraud is the conversion of – of money by deceit, and there’s no deceit here. Mr. Dhami is fully aware of all the shenanigans going on with regard to his company. He gives permission for it, he signs cheques. He’s fully complicit in trying to evade taxes.
Now, at the same time that this is going on he’s making loans to Ms. Atwal and those loans are being repaid to his wife for the same purposes. They’re not coming back to Star Plastics because he’s using these loans also as a mechanism to lower his taxes. There’s no – there’s no coming back to the company of the money that he loans out to her. In his mind he treats those loans to her and the transactions to the fake suppliers as the same sort of transactions, and he even refers to the transactions to the fake suppliers as loans. And he says that they are also returning 15 to 20 percent every couple of weeks, the same as her loan.
It is clear that he refers to the loans throughout his testimony, the – the money syphoned to the fake suppliers with 20 percent interest rate. The loan to Ms. Atwal has the same 20 percent interest rate and it’s obvious that it’s another method of syphoning money out of Star Plastics.
So this is a man who is bold, bold on the stand and bold in his dealings and not much of a victim in my respectful submissions.
DEFENCE COUNSEL: Your Honour, as far as exposure goes there’s no exposure in any of this. There’s a continuing, ongoing scheme to defraud and the Crown – Revenue Canada. The Crown has produced no evidence that would tend to show that that’s not the case, or that it stopped at some point. There is also, as part of that, ancillary loans that are made to my client but there’s no evidence that one scheme stopped and the other started. They’re happening at the same time….
THE COURT: You say they’re parallel schemes with the same objective?
DEFENCE COUNSEL: That’s right. That’s right.
[72] It was submitted that when Mr. Dhami realized in October 2006 that the accused was unable to return the monies directed to her from Star Plastics, he “manufactured the fraud” and reported it to the police in order to try to get his money back:
And when October comes he realizes I’m not going to get this paid back so what am I going to do here? I’m going to try to get it back from her using the government. So he knows he’s not – if he sues her he’s not going to get the money back. She doesn’t have it. So he alleges the fraud and at the same time what he does when he alleges the fraud is that he insulates himself because he knows that she’s going to say I didn’t commit a fraud. What this is, is it’s income tax evasion that he knowingly had me do. So the fraud has to be the income tax evasion on her and says I didn’t know anything about it, and that’s why he’s got to say that he didn’t know anything about the fake suppliers.
[73] Addressing the issue of the accused as a potential party to fraud, even on the defence characterization of the case, Mr. Boggs submitted the following:
THE COURT: What do we do with the fact that cheques are received by companies controlled by the defendant?
DEFENCE COUNSEL: Well, this is part of – of the – the scam. He acknowledges that he’s sending them out to – through her for the purpose of reducing his – his income tax.
THE COURT: Right.
DEFENCE COUNSEL: He….
THE COURT: Well the inference is it won’t be a surprise to her when she gets these cheques?
DEFENCE COUNSEL: That’s right, it won’t be. And it may very well be that there’s some other charge that she’s an accomplice to, but it’s not the one that’s alleged here.
THE COURT: All right. And I think that’s what I need to hear from you about.
DEFENCE COUNSEL: Well, what’s alleged here is a fraud against Star Plastics and Mr. Dhami who are, essentially, as far as we know, one and the same. He – she can’t defraud him if money’s taken with his permission, his consent, and his knowledge and that’s what’s happened here. That’s what he’s admitted to. She’s simply acting as his agent and doing his bidding.
THE COURT: By agreeing to have the entity she controls receive the cheques and then ultimately take them through her company and pay them back to Mrs. Dhami?
DEFENCE COUNSEL: Exactly. But that’s not what’s alleged in the indictment.
THE COURT: And why do you say it’s not encompassed in count one?
DEFENCE COUNSEL: May I see count one again?
THE COURT: Well, it’s just a – it’s a general fraud count but you’re right “defraud Star Plastics” is the wording.
DEFENCE COUNSEL: Right. Well, Star Plastic[sic] was fully aware of those transactions through Mr. Dhami. There’s no deceit there. There’s no falsehood there. At least to the persons, corporate or otherwise, that are alleging the fraud was – who are alleging to be victims. They weren’t victims. They were perpetrators. And it may be that somebody else aided and abetted them. It may be even that somebody conspired with them, but if – if those sorts of allegations were to be made they’d have to be made on a – in a different indictment.
THE COURT: So that any criminal liability, such as it may be on the part of the defendant, would have related to the Government of Canada as a victim and not Star Plastics?
DEFENCE COUNSEL: That’s correct. That’s correct.
…these transactions were part of this nonsense of being fake transactions to lower his tax that – where he expected the money to come back to him…
The Crown has not established beyond a reasonable doubt that a fraud was committed by Ms. Atwal against Star Plastics or Mr. Dhami. I think what the evidence shows is that likely, at the very least Mr. Dhami was involved in a scheme to divert funds from his company. He was sending those diverted funds through Ms. Atwal to companies that she had control of, or association with, as the Crown alleges; that the history had been that that money was being returned; that one of the methods of reducing his income tax was not a fake company but Ms. Atwal herself where he gives a real loan to her that she acknowledges, but again that was going to be paid back through Manjit Dhami. Not in a legitimate expense fashion as is required but in this circuitous route to avoid tax.
[74] In a written submission, the defence acknowledged that while the court could undertake its own handwriting comparison, this would not necessarily assist the Crown:
If the handwriting comparison tends to show that the signature(s) were written by Ms. Atwal then they are of no import because it is the theory of the defence that Ms. Atwal was engaged in a joint enterprise, with Jasvir Dhami, to lower Star Plastics’ taxes. He agreed that this was so. The evidence supports the defence submission that if the cheques were signed by Ms. Atwal they were signed with the full knowledge and consent of the complainant, Mr. Dhami, as sole shareholder of Star Plastics. In addition Mr. Dhami admits to signing some of the cheques to the “fake suppliers” during the months of the alleged fraud.
That is an admission that he would not have made if it were not true, and if he did not believe that it might be proven.
Therefore the handwriting analysis could be used as evidence raising a reasonable doubt in favour of the defence, but because one would expect Ms. Atwal to be involved in the creation of the cheques for the tax evasions scheme, with Mr. Dhami’s admitted knowledge, then the possible or probable presence of her hand writing any cheques does not assist the crown, in proving its case beyond a reasonable doubt.
[75] In response to questions from the court respecting a finding that Mr. Dhami and the accused acted in concert to forge and utter the 97 cheques with Bishop’s signature thereby reducing Star Plastics’ capital, Mr. Boggs made these further submissions:
(1) the accused was a full participant in the scheme, directed by Mr. Dhami, acting as his agent and the agent of Star Plastics, flowing the monies through her companies with a view to returning it to her principal – conduct potentially making her civilly liable only
(2) in any event there was no “straight deceit” as alleged by the Crown practiced against Star Plastics as this was a case of “knowledge and permission” on the part of Mr. Dhami – “there is nothing to Star Plastics other than him” (“he is Star Plastics”) as he was the sole shareholder and owner and accordingly “[t]here’s …no sense in attaching any other personhood to the corporation” and there is no “need to concern ourselves with the distinction between [Dhami] and…the legal fiction of Star Plastics”
(3) in addition, the scheme was such that Star Plastics was actually receiving a benefit “in the reduction of the expense of taxes”
(4) as to the potential impact of such a scheme destabilizing the economic interests of Star Plastics, for example in terms of being able to honour obligations to suppliers and other creditors, it was said that “[w]e don’t know who the creditors are or how much they are”.
ANALYSIS
Introduction
[76] The parties litigated this trial as primarily a fact-driven, credibility case. Although no legal authorities were filed on any issues, some attention is initially appropriate to particular issues as the context for the court’s analysis.
General Principles
Burden of Proof
[77] The prosecution must establish the accused’s guilt beyond a reasonable doubt having regard to the totality of the evidence. The Crown called three witnesses to testify. The defence called no evidence and the accused did not testify. The defence launched a serious attack on the credibility and reliability of Jasvir Dhami.
[78] While rigid adherence to the W.D. formula is unnecessary (R. v. S.W.D., [1994] 3 S.C.R. 521, at p. 533; R. v. C.L.Y., [2008] 1 S.C.R. 5, at para. 7), and particularly so in reasons for judgment in a judge-alone trial, it is nevertheless essential that “the substance of the W.(D.) instruction be respected” in a trial court’s reasons: R. v. Dinardo, [2008] 1 S.C.R. 788, at para. 23. In other words, it is generally considered critical that the record demonstrate an appreciation for and a proper application of the criminal standard of proof to the whole of the evidence: R. v. J.M.M., 2012 NSCA 70, at para. 72, leave to appeal refused [2012] S.C.C.A. No. 402. So, for example, in applying the principle of reasonable doubt to credibility assessment, a trial court must recognize that because “there is a distinction between a finding of credibility and proof beyond a reasonable doubt”, “a reasonable doubt can survive a finding that the complainant is credible” (R. v. J.W., 2014 ONCA 322, at para. 26) and a trial court must recognize that the W.(D.) analysis does apply in criminal trials where the accused does not testify.
[79] Without an accused testifying, evidence favourable to the defence may be grounded in evidence called by the defence or through the testimony of prosecution witnesses. Such evidence may engage the trier of fact in important credibility determinations respecting contradictory evidence. At paras. 37 and 39 of R. v. Smits, 2012 ONCA 524, the court stated:
There is now no doubt that in light of this court’s decision in R. v. D.(B.), 2011 ONCA 51, at para. 114, that, even if an accused does not testify or call any evidence, where there are credibility findings on a vital issue to be made between conflicting evidence arising out of evidence favourable to the defence in the Crown’s case, the trial judge must relate the concept of reasonable doubt to those credibility findings. The trial judge must do so in a way that makes it clear that it is not necessary for the trier of fact to believe the evidence favourable to the defence on that trial issue. Rather, it is sufficient if, viewed in the context of all the evidence, the conflicting evidence leaves the trier of fact in a state of reasonable doubt as to the accused’s guilt. In that event, the trier of fact must acquit.
Trial judges in a judge alone trial do not need to adhere slavishly to the W.(D.) formula. It should, however, be clear from an examination of the reasons that at the end of the day the trial judge has had regard for the basic principles underlying the W.(D.) instruction: see R. v. Minuskin (2000), 2003 11604 (ON CA), 68 O.R. (3d) 577 (C.A.), at para. 22.
[80] Accordingly, the W.(D.) instruction, or its functional equivalent has application “to other exculpatory evidence that emerges during trial proceedings: R. v. B.D., 2011 ONCA 51…at paras. 105, 113-114” and a trier of fact need not accept the evidence favourable to the defence in order to acquit if it is found capable of raising a reasonable doubt: R. v. Cyr, 2012 ONCA 919, at paras. 50, 58; R. v. Hockey, 2015 ONCA 421, at para. 3; R. v. Bengy, 2015 ONCA 397, at paras. 92-3; R. v. Burnie, 2013 ONCA 112, at paras. 47-48; R. v. King, 2013 ONCA 417, at paras. 13-14; R. v. Dayes, 2013 ONCA 614, at paras. 51, 55-59; J.M.M., at para. 74; R. v. Grant, 2013 MBCA 95, at paras. 31-32, affd 2015 SCC 9; R. v. B.D. 2011 ONCA 51, at paras. 105, 113-114.
[81] “Credibility is a central issue in many criminal cases”: R. v. Osolin, 1993 54 (SCC), [1993] 4 S.C.R. 595, at para. 55 per Lamer C.J. The court may believe all, none or some of a witness' evidence: R. v. Francois, [1994] 2 S.C.R. 27, at para. 14; D.R. et al. v. The Queen (1996), 1996 207 (SCC), 107 C.C.C. (3d) 289 (S.C.C.) per L'Heureux-Dubé J. (in dissent in the result), at p. 318; R. v. M.R., 2010 ONCA 285, at para. 6; R. v. Hunter, [2000] O.J. No. 4089 (C.A.), at para. 5; R. v. Abdallah, 1997 1814 (ON CA), [1997] O.J. No. 2055 (C.A.), at paras. 4, 5. Accordingly, a trier of fact is entitled to accept parts of a witness’ evidence and reject other parts, and similarly, the trier can accord different weight to different parts of the evidence that the trier of fact has accepted: R. v. Howe, 2005 253 (ON CA), [2005] O.J. No. 39 (C.A.), at para. 44.
[82] Assessment of a witness’ credibility includes evaluation of his or her demeanour as testimony is provided to the trier(s) of fact in the courtroom – this includes “non-verbal cues” as well as “body language, eyes, tone of voice, and the manner” of speaking: R. v. N.S. (2010), 2010 ONCA 670, 102 O.R. (3d) 161 (C.A.), at paras. 55, 57 (aff’d 2012 SCC 72, [2012] 3 S.C.R. 726). However, a trier’s subjective perception of demeanour can be a notoriously unreliable predictor of the accuracy of the evidence given by a witness: R. v. Rhayel, 2015 ONCA 377, at paras. 85, 88-9, 92-3; Law Society of Upper Canada v. Neinstein (2010), 2010 ONCA 193, 99 O.R. (3d) 1 (C.A.), at para. 66; R. v. Smith, 2010 ONCA 229, at para. 11; R. v. G.G. (1997), 1997 1976 (ON CA), 115 C.C.C. (3d) 1 (Ont. C.A.), at pp. 6-8; R. v. P.-P.(S.H.) (2003), 2003 NSCA 53, 176 C.C.C. (3d) 281 (N.S.C.A.), at paras. 28-30; R. v. Levert (2001), 2001 8606 (ON CA), 159 C.C.C. (3d) 71 (Ont. C.A.), at pp. 80-2. Demeanour evidence alone cannot suffice to found a finding of guilt: R. v. K.(A.) (1999), 1999 3756 (ON CA), 123 O.A.C. 161 (C.A.), at p. 172.
[83] The fact that a complainant pursues a complaint cannot of course be a piece of evidence bolstering his or her credibility -- otherwise it could have the effect of reversing the onus of proof: R. v. A.(G.R.) (1994), 1994 8756 (ON CA), 35 C.R. (4th) 340 (Ont. C.A.), at para. 3; R. v. Islam, [1999] 1 Cr. App. R. 22 (C.A.), at p. 27.
[84] The existence or absence of a motive by the complainant to fabricate is a relevant factor to be considered: The Queen v. K.G.B. (1993), 1993 116 (SCC), 79 C.C.C. (3d) 257 (S.C.C.), at p. 300 per Lamer C.J.C.; R. v. Greer, 2009 ONCA 505, at para. 5; R. v. Prasad, [2007] A.J. No. 139 (C.A.), at paras. 2-8; K.(A.), at p. 173; R. v. Jackson, [1995] O.J. No. 2471 (C.A.), at paras. 4, 5. I make this observation, sensitive to the fact that the burden of production and persuasion is upon the prosecution and that an accused need not prove a motive to fabricate on the part of a principal Crown witness.
Circumstantial Evidence
[85] In the present case, apart from direct evidence led by the Crown, the trier of fact is asked to consider various aspect of the evidence amounting to circumstantial evidence including motive, opportunity, and handwriting as evidence of identity of the maker of certain cheques from Star Plastics.
[86] In order to find guilt in a circumstantial evidence case, the trier of fact must be satisfied beyond a reasonable doubt that the only rational inference that can be drawn from the circumstantial evidence is that the accused is guilty: R. v. Griffin and Harris (2009), 2009 SCC 28, 244 C.C.C. (3d) 289 (S.C.C.), at paras. 33-4. Inference must be carefully distinguished from conjecture or speculation. At all times, in assessing circumstantial evidence, a trier must be alert to explanation or contradiction or inference pointing toward innocence. The trier of fact must assess the reliability and credibility of any underlying direct evidence as well as whether that evidence reasonably supports the circumstantial inference to be drawn while always having regard to the scope of inferential bridges or gaps the trier is invited to make.
[87] Circumstantial evidence is not to be evaluated piece by piece but rather cumulatively. With circumstantial evidence based on reasoning or inference-drawing through probability (R. v. Arp (1998), 1998 769 (SCC), 129 C.C.C. (3d) 321 (S.C.C.), at para. 64), a trier of fact’s application of logic, common sense and experience to the evidence engages consideration of both inherent probabilities and inherent improbabilities and, not infrequently, eliminating the unlikelihood of coincidence: C.(R.) v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41, at paras. 33-40, 47-8; R. v. Yousif, 2011 ABCA 12, at para. 5; In re B (Children), [2009] 1 A.C. 11 (H.L.), at paras. 5, 15, 70. Financial pressures, not economic status, may amount to a motive to become involved in a profit-motivated crime: R v. Mensah (2003), 2003 57419 (ON CA), 9 C.R. (6th) 339 (Ont. C.A.), at paras. 7-13 (leave to appeal refused [2003] S.C.C.A. No. 207); R. v. Phillips, 2008 ONCA 726, at paras. 50-51.
[88] In considering the whole of the evidence in a circumstantial case, and in particular the search for alternative “innocent” explanations other than the prosecution’s theory of guilt, the court is not limited to inferential explanations based on “proven facts” but rather may take into account, as to whether reasonable doubt exists, alternate rational possibilities grounded in the evidence: R. v. Khela, 2009 SCC 4, [2009] 1 S.C.R. 104, at paras. 57-8; Fontaine v. Loewen Estate, 1998 814 (SCC), [1998] 1 S.C.R. 424, at para. 33; R. v. Bui, 2014 ONCA 614, at paras 22-9; R. v. Campbell, 2015 ABCA 70, at paras. 51-3; R. v. Dipnarine, 2014 ABCA 328, at paras. 22-28; R. v . Pryce, 2014 BCCA 370, at paras. 6-12; R. v. Maxie, 2014, SKCA 103, at para. 35; R. v. Robert (2000), 2000 5129 (ON CA), 143 C.C.C. (3d) 330 (Ont.C.A.), at paras. 14-25.
[89] Further, while there is no obligation upon an accused to demonstrate the existence of an exculpatory hypothesis or other rational explanation other than guilt, it does not reverse the burden of proof upon the Crown to ask whether such explanations, as may be pointed to, amount to nothing more than speculation, conjecture or irrational inferences : R. v. Mufuta, 2015 ONCA 50, at paras. 22, 26, 47-9; Griffin, at para 35; R. v. C.(D.) (2012), 2012 SCC 48, 290 C.C.C. (3d) 64 (S.C.C.), at paras. 25, 28; R. v. Figueroa (2008), 2008 ONCA 106, 232 C.C.C. (3d) 51 (Ont.C.A.), at paras. 35, 42; R. v. Vu, 2002 BCCA 659, at para. 25.
[90] Turning to the issue of a trier of fact, unassisted by expert evidence, engaging in a handwriting comparison of a disputed writing with writings the court is satisfied were made by specific individuals, as contemplated by s. 8 of the Canada Evidence Act, such examination may circumstantially be probative of the identity of the writer of the disputed writings. In this regard, the court must proceed with caution as discussed in the relevant authorities including R. v. Cunsolo, 2014 ONCA 364 affing 2011 ONSC 1349; R. v. Meer, 2015 ABCA 141 (appeal as of right pending [2015] S.C.C.A. No. 179).
Fraud
[91] In R. v. Théroux, 1993 134 (SCC), [1993] 2 S.C.R. 5, at pp. 15-17, the court stated:
Since the mens rea of an offence is related to its actus reus, it is helpful to begin the analysis by considering the actus reus of the offence of fraud. Speaking of the actus reus of this offence, Dickson J. (as he then was) set out the following principles in Olan [1978 9 (SCC), [1978] 2 S.C.R. 1175]:
(i) the offence has two elements: dishonest act and deprivation;
(ii) the dishonest act is established by proof of deceit, falsehood or "other fraudulent means";
(iii) the element of deprivation is established by proof of detriment, prejudice, or risk of prejudice to the economic interests of the victim, caused by the dishonest act.
Olan marked a broadening of the law of fraud in two respects. First, it overruled previous authority which suggested that deceit was an essential element of the offence. Instead, it posited the general concept of dishonesty, which might manifest itself in deceit, falsehood or some other form of dishonesty. Just as what constitutes a lie or a deceitful act for the purpose of the actus reus is judged on the objective facts, so the "other fraudulent means" in the third category is determined objectively, by reference to what a reasonable person would consider to be a dishonest act. Second, Olan made it clear that economic loss was not essential to the offence; the imperilling of an economic interest is sufficient even though no actual loss has been suffered. By adopting an expansive interpretation of the offence, the Court established fraud as an offence of general scope capable of encompassing a wide range of dishonest commercial dealings.
Subsequent cases followed Olan's lead, fleshing out the elements of the offence set out in Olan in a broad and purposive manner. One of the first questions which arose was whether the third type of dishonest conduct, "other fraudulent means", was a super-added element which the Crown must prove in addition to proving either deceit or falsehood. This was rejected in R. v. Doren (1982), 1982 2197 (ON CA), 36 O.R. (2d) 114 (C.A.); see also R. v. Kirkwood (1983), 1983 1953 (ON CA), 42 O.R. (2d) 65 (C.A.). In a number of subsequent cases, courts have defined the sort of conduct which may fall under this third category of other fraudulent means to include the use of corporate funds for personal purposes, non-disclosure of important facts, exploiting the weakness of another, unauthorized diversion of funds, and unauthorized arrogation of funds or property... As noted above, where it is alleged that the actus reus of a particular fraud is "other fraudulent means", the existence of such means will be determined by what reasonable people consider to be dishonest dealing.
See also R. v. Zlatic, 1993 135 (SCC), [1993] 2 S.C.R. 29, at pp. 43-46; R. v. Drabinsky, 2011 ONCA 582, at paras. 81-82 (leave to appeal refused [2011] S.C.C.A. No. 491).
[92] “Dishonesty is not a technical term, it is what a reasonable person would consider to be a dishonest act”: R. v. Ruhland (1998), 1998 6138 (ON CA), 123 C.C.C. (3d) 262 (Ont. C.A.), at para. 11. In Zlatic, at pp. 45-6, the court observed that “[t]he dishonesty of “other fraudulent means” has, at its heart, the wrongful use of something in which another person has an interest, in such a manner that this other’s interest is…put at risk” which may include “unauthorized diversion of funds”. “Where it is alleged that a corporation has been defrauded by its directors, deception of the corporation is not an essential element of the offence”: R. v. Olan, 1978 9 (SCC), [1978] 2 S.C.R. 1175, at p. 1180.
[93] A limited company is a separate legal entity from its owner: Shoppers Drug Mart Inc. v. 6470360 Canada Inc. [647], 2014 ONCA 85, at para. 23, leave to appeal refused [2014] S.C.C.A. No. 119 (“Although the sole shareholder, officer and director of 647, Beamish did not share a legal personality with the corporation”). As noted in Zlatic, at p. 48, “the diversion of corporate funds to private purposes having nothing to do with the business” can amount to fraud. In R. v. Pierce (1997), 1997 3020 (ON CA), 32 O.R. (3d) 321 (C.A.), at pp. 327-8, the court held:
On the evidence, the funds embezzled belonged to Garfield’s, whatever their source. Accordingly, the funds could not be segregated from Garfield’s earnings and designated as foreign moneys infused into the company in the form of capital for a fresh venture.
On this analysis, we do not reach the point of considering whether the appellant received instructions to divert the funds from the company treasury. Even if she was acting on the instructions of one of the principals of Garfield’s parent company, this would mean only that she had an accomplice in her fraudulent scheme. As Locke J. noted, Garfield’s was a separate legal entity from its shareholder, Premier International.
[94] In R. v. Must, 2011 ONCA 390, at para. 3, the court stated:
The mens rea for fraud has been authoritatively determined in R. v. Théroux, 1993 134 (SCC), [1993] 2 S.C.R. 5 at para. 24:
Having ventured these general comments on mens rea, I return to the offence of fraud. The prohibited act is deceit, falsehood, or some other dishonest act. The prohibited consequence is depriving another of what is or should be his, which may, as we have seen, consist in merely placing another's property at risk. The mens rea would then consist in the subjective awareness that one was undertaking a prohibited act (the deceit, falsehood or other dishonest act) which could cause deprivation in the sense of depriving another of property or putting that property at risk. If this is shown, the crime is complete. The fact that the accused may have hoped the deprivation would not take place, or may have felt there was nothing wrong with what he or she was doing, provides no defence. To put it another way, following the traditional criminal law principle that the mental state necessary to the offence must be determined by reference to the external acts which constitute the actus of the offence (see Williams, supra, c. 3), the proper focus in determining the mens rea of fraud is to ask whether the accused intentionally committed the prohibited acts (deceit, falsehood, or other dishonest act) knowing or desiring the consequences proscribed by the offence (deprivation, including the risk of deprivation). The personal feeling of the accused about the morality or honesty of the act or its consequences is no more relevant to the analysis than is the accused's awareness that the particular acts undertaken constitute a criminal offence. [Emphasis added by Ont. C.A.]
See also Zlatic, at pp. 49-50; R. v. Eizenga, 2011 ONCA 113, at para. 64.
Forgery
[95] A person commits forgery who makes a false document, knowing it to be false, with intent that it should in any way be used or acted upon as genuine, to the prejudice of another: s. 366 Criminal Code; R. v. Hawrish (1986), 1986 3208 (SK CA), 32 C.C.C. (3d) 446 (Sask. C.A.), at pp. 450-454. A document is “false” where a “material part…purports to be made by or on behalf of a person…who did not make it or authorize it to be made”: s. 321 of the Code; R. v. Nousci (1991), 1991 7238 (ON CA), 69 C.C.C. (3d) 64 (Ont. C.A.), at paras. 16-49 (leave to appeal refused [1992] S.C.C.A. 69). A person who uses or utters a forged document, knowing or believing that the document is forged, commits an offence contrary to s. 368 of the Code. While the crime requires an intent to deceive, it does not require an intent to defraud or to cause prejudice: R. v. Valois, 1986 55 (SCC), [1986] 1 S.C.R. 278, at pp. 282-3; R. v. Sebo (1988), 1988 ABCA 200, 42 C.C.C. (3d) 536 (Alta. C.A.), at p. 540 (leave to appeal refused [1988] S.C.C.A. No. 309).
Fact-Finding in the Present Case
[96] A useful starting point is to frame the evidence about which there can be really no dispute:
(1) during the relevant time period, Star Plastics’ business cheques were locked in a safe at the company premises with access to Jasvir Dhami as the company owner with blank cheques also made available to the accused to prepare the company’s accounts payable disbursements
(2) 97 Star Plastics’ cheques issued between August 10 and October 3, 2006 purporting to have been signed by the company’s vice president, David Bishop, were not in fact signed by Bishop
(3) 55 of the 97 cheques, upon which Star Plastics paid out $903,260.82, issued to five entities agreed to have a direct connection to the accused without any benefit, merchandise or service received by Star Plastics.
[97] The prosecution maintains that the alleged misappropriation of funds from Star Plastics was the result of a breach of trust by the accused through an unauthorized phoney invoicing scheme perpetrated in her role as the company’s accountant all with a view to personal enrichment. The defence, on the other hand, submitted that the evidence supports, or at least raises a reasonable doubt, that what actually occurred was a tax evasion scheme orchestrated by Jasvir Dhami with the assistance of the accused which involved no deception of Star Plastics of which Dhami was the owner and sole shareholder.
[98] In assessing the credibility/reliability of trial witnesses, language issues arise in some trials. Such was the case here. Joginder Nahal testified entirely through the assistance of a Punjabi/English-speaking court interpreter. On review of her evidence, and having regard to the lack of any cross-examination of the witness by the defence, I accept the accuracy of the witness’ evidence. Manjit Dhami testified with the assistance of an interpreter available on a standby basis. It was very evident that English was the witness’ second language. Finding the witness difficult at times to understand, especially having regard to her heavy accent, the court raised the option of the witness switching to fulltime use of the court interpreter. The defence objected and the status quo was maintained with the witness making use of interpretive assistance on at least five occasions during her testimony. At times, the witness failed to heed the court’s direction not to speak over the questioner. At times, the witness was adversarial in her answers. On balance, having regard to the totality of the evidence, Mrs. Dhami’s evidence is accepted. The court has had the benefit, during deliberations, of auditing the court taperecordings of Ms. Nahal’s and Mrs. Dhami’s testimony.
[99] Critical to the prosecution case is the credibility and reliability of Jasvir Dhami’s evidence. The court has also had the benefit of a full transcript of this witness’ evidence. While Mr. Dhami’s facility with the English language was superior to that of his spouse, as he testified it was manifestly apparent that he was working with the disadvantage of English being his second language. The limitations of the witness’ facility impacted to some extent on his ability to understand and respond to some questioning as will be discussed further below.
[100] During his testimony, Jasvir Dhami was cautioned or admonished by the court on four separate occasions to curtail editorial and adversarial narrative answers and to be directly responsive to the questions he was being asked. The witness, not infrequently, adopted an adversarial posture and an argumentative and frustrated approach to answering examiners.
[101] Related to Mr. Dhami’s evidence, there arose issues of inconsistency which included the following:
(1) whether the 2006 annual sales of Star Plastics were $20,000,000 as the witness related or the $10,000,000 specified in the Agreed Statement of Facts
(2) Mr. Dhami’s recall of the number of stores he believed the accused to own – 2, 3, 5 or 6
(3) the number of personal loans the witness maintained he had advanced to the accused – 5, 6, 8 or 10
(4) whether or not advancing loan monies at a rate of 20% interest within 2 weeks was a criminal interest rate
(5) the degree to which the accused had repaid these personal loans – some money was repaid at the beginning, the accused was in good standing through July 2006, or he did not receive “any” money back
(6) Mr. Dhami’s accounts as to why he believed the accused had taken personal loans – she needed money to support her stores which were not doing well or he had no idea why she required the funds
(7) whether the loans were from Star Plastics or, in the words of Mr. Dhami, “[f]rom myself” or “from me”
(8) whether the loans to the accused were secured by promissory notes or whether such a note only existed respecting one loan advanced
(9) whether the loans from Star Plastics with repayment, such as it was, to the personal bank account he had with his wife amounted to a fraud – it did/it did not
(10) whether the loan and repayment scheme with the accused was for the purpose of artificially lowering the tax liability of Star Plastics – it was/it was not
(11) in the bundle of cheques enclosed with the October 2006 Star Plastics’ bank statement, there were/ were not legitimate cheques he had signed
(12) whether the witness recovered $125,000 or $200,000 in civil proceedings against the accused.
[102] In my view, Jasvir Dhami minimized to some degree his knowledge of the financial issues explored at trial. He was not an unsophisticated businessman. He owned and ran a large company. Answers purporting to lay off the source of information as being his spouse, or the accused promising to undertake year-end reconciliations, were not at all times entirely convincing. It is curious that the witness would not know who drafted the June 2006 promissory note or know more particulars of the loans to the accused given that he had been involved in the civil process, had testified in a preliminary inquiry in this case, had prepared to give evidence in this trial, and had relevant documents at the courthouse on March 30, 2015 and on his diningroom table at home.
[103] Other questions arise respecting aspects of Mr. Dhami’s testimony including the following. Why was he causing Star Plastics to loan money to the accused at a criminal interest rate? Why, if the accused was defaulting on loan repayments would he continue to advance loan monies? Why would he authorize the company to advance monies to the accused without security to protect the corporation’s position? Why was no ledger or summary maintained detailing the dates and amounts of personal loans to the accused as well as the dates and amounts of any repayments? Why, if Mr. Dhami usually reviewed Star Plastics’ monthly bank statements, would he not have seen the August 2006 cheques from the relevant 97-cheque group in the company’s September 2006 bank statement?
[104] I accept Mr. Boggs’ characterization of the evidence supporting an inference that Jasvir Dhami was very likely engaged in a tax avoidance if not a evasion scheme, with the cooperation of the accused, insofar as the cheques he signed in the March to July 2006 time period having regard to this evidence:
(1) the Star Plastics’ cheques were signed by Mr. Dhami to entities whose names were provided by the accused and which did not have business dealings with Star Plastics
(2) the pay-outs were almost uniformly unsecured and undescribed in written documentation reducing any paper trail
(3) Mr. Dhami agreed in his evidence that the pay-outs would lower Star Plastics’ taxes and would appear like “some sort of expense on Star Plastics”
(4) the principal and interest on this series of loans to the accused were to be repaid to Manjit Dhami for deposit in the personal bank account of Manjit and Jasvir Dhami – accordingly, these payments do not appear to be bona fide “expense” liabilities of Star Plastics or monies subject to an intended year-end recharacterization of a draw, assigned dividend or loan to the shareholder.
[105] Both in examination in-chief and in re-examination, Mr. Dhami clearly denied any knowing involvement or participation in the alleged misappropriation of over a million dollars from Star Plastics in slightly less than a two-month period in 2006. The defence points to responses during Mr. Boggs’ cross-examination, including references to Mr. Dhami’s preliminary inquiry testimony, to submit that he authorized the pay-out of these monies through the vehicle of the 97 cheques with David Bishop’s forged signature. While that is an available interpretation, closer review forecloses it being the reasonable and correct interpretation of the witness’ evidence considered in its totality as well as the context of some of the witness’ replies. In this regard, within the context of the totality of the evidence discussed more expansively below, and having seen the witness testify including his struggle at times with language issues, I am satisfied that he did not intend to agree to the defence theory of the case:
(1) the witness exhibited a tendency to agree with the cross-examiner’s leading questions often responding, “Right” or “Okay”
(2) areas of cross-examination intermingled discussion of the March-to- July 2006 cheques signed by Jasvir Dhami and the 97 cheques bearing David Bishop’s signature with the payees in both instances referred to by the questioner as “fake suppliers” or “non-suppliers”
(3) the witness attempted to answer Mr. Boggs’ questions with a lack of detailed recall of the names on the cheques and without the relevant cheques in the witness box – in addition, he did not do the banking and had not seen the loan repayment cheques payable to his wife – in the witness’ words, over 8 years later, “I don’t remember that far” – he was uncertain as to the names in which the accused took money – the witness stated, “I’m not sure” and that he would need “to double check” with his wife and “I have to see the cheque”…”I have to look at those cheques”; “show me…those signatures”
(4) at times, even in cross-examination, Mr. Dhami did state that he did not know that payees on the 97 cheques were suppliers and that, separate from the loans he extended to the accused, those cheques were “another issue” and “It’s not the same thing”.
[106] Apart from exercising a degree of caution respecting Mr. Dhami’s evidence for many of the reasons already discussed, attention is required regarding the impact of limitations of the investigation upon the evidentiary record:
(1) an investigative failure to secure proper disclosure of material documents from the complainant resulting in mid-trial disclosure
(2) a failure to trace the identity of all the recipients of the 97 cheques, for example, the Rogers, Bell Canada, Wells Fargo, 407 ETR and Amex Bank of Canada payments
(3) failure to submit to the Centre of Forensic Sciences for handwriting comparison, relevant to the identity of the person who prepared cheques and who may have signed Bishop’s name, not only the handwritten cheques within the group of 97 cheques but also known handwriting samples of Jasvir Dhami and the accused
(4) no evidence of the date of the year-end of Star Plastics for corporate tax payment
(5) no net worth audit of the accused’s overall financial circumstances.
[107] While no party in a criminal trial is under any obligation to establish motive, whether on the part of a complainant or an accused, circumstantial evidence of motive such as it may appear in the record may be relevant to facts in issue. On the evidence, it is difficult to see a motive for Jasvir Dhami to have participated in a scheme to forge David Bishop’s signature on Star Plastics’ cheques payable to entities with which the company had no business dealings:
(1) when the cheque forgeries began on August 10, 2006, the accused was in arrears in repaying the personal loan monies from June and July – it would make little sense for Dhami in the following 8 weeks to provide the accused an additional million dollars of unsecured payments
(2) Jasvir Dhami testified that the quantity of misappropriated funds endangered the financial stability of Star Plastics which had been operated as a successful corporation and was engaged in an expansion phase – “Why would I bankrupt a company I have 25 years?”
[108] Evidence at trial supported the existence of financial motive for the accused to have acted alone in misappropriating monies from Star Plastics including the following:
(1) Jasvir Dhami testified, it can be inferred from information from the accused, that her stores were not doing well and that she owed money
(2) Joginder Nahal testified that the accused spoke of her bank putting cheques on hold and the accused paying store employees from the proceeds of Star Plastics’ cheques made payable to the witness
(3) the accused was in arrears in repaying personal loans from Star Plastics cheques Jasvir Dhami had signed in June and July 2006 – with a number of dishonoured cheques provided in August 2006, the accused was not in fact in good standing in meeting repayment commitments
(4) the bank account of the accused’s company, 1629262 Ontario Inc. also operating as Kitchen Cuisine, had an opening balance on August 1, 2006 of only $1,469.23 and by mid-September 2006, there were a number of Returned Items with the accused also writing 20 NSF cheques on the account relating to nearly $80,000 in total
(5) from review of banking documents of 1629262 for August and September 2006, it is not readily apparent that there was any significant income stream from a legitimately conducted business operation as opposed to an infusion of cash from David Bishop-signed cheques directly to the company or Leader Plating cheques deposited to the company’s account.
[109] Joginder Nahal described to the court the urgency the accused attached to converting the proceeds of Star Plastics’ cheques to payment of her personal expenses. Indeed, the September 26, 2006 Star Plastics’ cheque of $6,887.19 was deposited in Nahal’s account on September 27 and immediately withdrawn and disbursed in its entirety with certified cheques to four individuals (Exhibit #s 14C, 16).
[110] Quite apart from Mr. Dhami’s evidence, the evidence does not support the 97 cheques being part of what appears to have been an ongoing scheme respecting taxes in June and July 2006 as opposed to distinctly different conduct designed to defraud Star Plastics:
(1) unlike the “loan” cheques, the 97 cheques were not signed by Jasvir Dhami with his name but with a forgery of David Bishop’s signature
(2) the frequency of issuance of the cheques from August 10 to October 4, 2006 from Star Plastics to entities/persons associated with the accused was at a significantly accelerated pace, for a vastly greater total than in the prior two months, at times for small sums only ($183.51, $202.16, $288.50), and in the majority of cases not for even sums of money as was the case with the loan cheques as described at para. 22 above.
[111] Jasvir Dhami’s evidence that he did not forge the 97 cheques is supported by the court’s conclusion, based upon comparison of the handwritten cheques within that grouping to identified known exemplars of the handwriting of Mr. Dhami and the accused, that it was the accused who prepared those cheques. While the handwriting comparison does not directly say that the preparer of the cheques also affixed Bishop’s forged signature, on the whole of the evidence, including the flow of monies to the accused and entities associated to her, it can reasonably be inferred that it was also the accused who prepared the remainder of the 97 cheques and who in turn signed Bishop’s name to both the handwritten cheques and the machine-prepared cheques. As such, the cheques became false documents and were in turn used with the intention that the bank would honour them as genuine.
[112] I accept Mr. Dhami’s evidence as to statements he attributed to the accused upon which he was not cross-examined:
(1) the accused made persistent inquiries about Star Plastics’ mail and sought to have the company’s October 2006 bank statement and enclosed cheques be referred directly to her – conduct consistent with concealment of the ongoing fraud by the accused acting alone
(2) on or about October 5, 2006, the accused attempted to secure a further $100,000 for Leader Plating on the threat of that company (masquerading as Star Plastics’ real supplier of a similar name) not shipping required parts.
[113] The circumstances involving Leader Plating support the prosecution theory of what transpired in this case having regard to the following:
(1) as a result of acting as Star Plastics’ accountant, the accused would be aware of the name of the company’s supplier, “Leader Plating On Plastics Ltd.”
(2) “Leader Plating”, the accused’s sole proprietorship, registered with the provincial government in August 2006 as being engaged in the manufacture of plastic moulds, was a deliberately selected identity and disguised conduit to make it appear that cheques to this entity actually related to Star Plastics’ real supplier
(3) Leader Plating’s bank account opened on August 29, 2006 at a point when the accused was in arrears in repaying her personal loan commitments to Jasvir Dhami and 1629262 Ontario Inc. was in apparent need of additional capital
(4) Leader Plating was essentially a shell entity, conducting no legitimate business such as manufacturing plastic moulds, with the entirety of its income ($334,302.63) derived from forged Star Plastics’ cheques with a significant amount of those funds propping up the bank account of 1629262 Ontario Inc., the private company of the accused.
[114] The defence submitted that Mr. Dhami was angered over the accused bouncing her loan repayment cheques and that fearing that that money and a further million dollars (the 97 cheques) would not be repaid by the accused, he contacted the police as a pre-emptive strike to offload an allegation of fraud solely onto the accused while concealing his own participation in a tax evasion scheme, divesting himself of Canada Revenue Agency problems, and targeting Star Plastics’ bank as a resource for civil recovery. I am entirely unpersuaded by the defence submission that Mr. Dhami called in the police in October 2006 and alerted the Canada Revenue Agency to escape his own participation involving the 97 cheques. Without ulterior motive, the complainant honestly reported a fraud immediately upon discovery. Accordingly, although I am not in agreement with the defence submission that Star Plastics could not be defrauded by its owner and accountant deliberately diverting company funds through forged cheques to fictional suppliers designed to cycle the proceeds back to the personal use of the shareholder, it is unnecessary to consider this as an alternate basis of liability.
[115] Having scrutinized Jasvir Dhami carefully as he testified, I conclude that the witness’ demeanour and problematic aspects of his evidence, as above described, were largely the product of anger and frustration at having been victimized by the accused, the passage of time, and certain language comprehension barriers. In the end, having considered the totality of the evidence including the challenges to Mr. Dhami’s credibility, I am satisfied that his evidence was credible that he did not forge or use the 97 cheques and that Star Plastics was the subject of a fraud without his knowledge or participation.
[116] On the totality of the evidence, including consideration of evidence arguably favourable to the defence, the prosecution has established beyond a reasonable doubt that, without the knowledge or participation of Jasvir Dhami, Sukhraj Atwal forged 97 Star Plastics’ cheques and negotiated or attempted to negotiate those instruments to her personal benefit, without any actual or promised benefit to the corporation or its shareholder, thereby defrauding Star Plastics as alleged. Under financial pressures, and abusing her position of trust, the accused in effect resorted to using Star Plastics as a personal bank to satisfy her own needs.
CONCLUSION
[117] The accused is found guilty of both counts in the indictment.
Hill J.
DATE: July 9, 2015
COURT FILE: CRIMJ(P) 2005/12
DATE: 2015 07 09
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: R. v. SUKHRAJ ATWAL
COUNSEL: C. Waite, for the Crown
R. Boggs, for the Defence
HEARD: March 30 and April 1, 2, 7, 8 and May 13, June 22, 2015 at Brampton
REASONS FOR JUDGMENT
Hill J.
DATE: July 9, 2015