CITATION: R. v. Kalair, 2017 ONSC 7003
COURT FILE NO.: CR-15-90000335-0000
DATE: 20171130
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
- and –
OMAR KALAIR and YUSUF PANCHBHAYA
Damien Frost and Daniel Libman, for the Crown
Gregory Lafontaine and Ricardo Golic, for Omar Kalair
Malcolm McRae, for Yusuf Panchbhaya
HEARD: November 2, 2017
PUBLICATION RESTRICTION NOTICE
Pursuant to subsection 648(1) of the Criminal Code, this ruling shall not be published in any document or broadcast or transmitted in any way before the jury retires to consider its verdict.
REASONS FOR RULING
M. DAMBROT J.:
BACKGROUND
[1] Yusuf Panchbhaya and Omar Kalair are charged with fraud and a number of other offences relating to the affairs of UM Finance Inc. (“UMF”) and UM Capital Inc. (“UMC”), companies that obtained financing from the Credit Union Central of Canada (“CUCC”), now Central 1 Credit Union (“Central 1”) in order to provide Sharia compliant mortgages to Muslim homeowners who could not avail themselves of conventional mortgages for religious reasons. Kalair was the President and Chief Executive Officer of UMF and UMC. Panchbhaya represented the Sharia Ethics Board of UMF, which ultimately incorporated as the Multicultural Consultancy of Canada (“MCC”).
[2] The Crown called Shahzad Siddiqui, who formerly acted as counsel for Panchbhaya, as a witness at the preliminary hearing into this matter. Counsel for Panchbhaya cross-examined Siddiqui about some of his communications with Panchbhaya, and subsequently filed a written waiver of solicitor-client privilege that purported to be subject to certain limitations.
[3] The trial of Panchbhaya and Kalair came on before me on October 30, 2017. Before the accused were arraigned and a jury was selected, I heard a series of pre-trial motions pursuant to s. 645(5) of the Criminal Code. One of these was an application brought by the Crown for a ruling that, based on the written waiver filed by Panchbhaya at the preliminary hearing and on the conduct of the cross-examination of Siddiqui by counsel acting for Panchbhaya at that hearing, the solicitor-client privilege attaching to communications between Panchbhaya and Siddiqui in relation to the subject matter of this trial has been waived for all purposes. The effect of the waiver on certain written communications between Panchbhaya and Siddiqui has already been determined by Clark J. in an earlier pre-trial ruling. The real issue in this application is the permissible scope of examination of the witness Siddiqui by Crown counsel at this trial.
[4] At the conclusion of argument, I reserved my decision. The accused were arraigned on November 3, 2017 and the selection of a jury commenced. The selection process concluded on November 7, 2017, at which time the accused were given in charge of the jury, I made some opening remarks to the jury and Crown counsel delivered his opening address. The case was then adjourned to November 14, 2017 for the calling of the Crown’s case.
[5] On November 14, 2017, Kalair discharged his counsel for what I consider to be good reason. As a result, I declared a mistrial and discharged the jury, and the matter was adjourned the following day to a new trial date. I had not yet released my reasons on this application when I declared a mistrial. At the request of counsel, I seized myself of this case, and agreed, despite the mistrial, to deliver my reasons on this motion, which will be binding at the new trial. I retain jurisdiction to decide this motion in any event pursuant to s. 645(5) of the Criminal Code as the judge before whom the accused are to be tried. Even if for some reason it turns out that I am unable to be the trial judge, this ruling will survive by virtue of s. 653.1 of the Code since it could have been made before the stage at which evidence on the merits was to be presented.
THE HISTORY OF THESE PROCEEDINGS
[6] In August 2007, CUCC curtailed its lending to UMF and UMC, following which UMF and UMC stopped repaying CUCC. On November 23, 2010, Central 1 gave UMF and UMC a Notice of Termination, and demanded payment of in excess of $32,000,000. On March 16, 2011, Central 1 filed an application seeking the appointment of a receiver over the affairs of UMF and UMC, claiming that they owed Central 1 $31,000,000. On October 6, 2011, after opposing the receivership application for several months, UMF and UMC withdrew their opposition, and on October 7, 2011, an order appointing a receiver was made. On November 23, 2011, UMF and UMC were assigned into bankruptcy.
[7] The Crown alleges that $3,400,000 was paid by homeowners to UMF and UMC, but fraudulently not remitted to Central 1. Instead, between August 30, 2011 and September 8, 2011, in excess of $2,000,000 was withdrawn from UMF’s bank account and used to purchase precious metals, including 32 kilos of gold bars that cannot be traced.
[8] MCC was incorporated on September 19, 2011. An invoice dated September 26, 2011, one week after MCC came into existence, was purportedly issued by MCC to UMF, charging UMF $2,790,000 for Sharia consulting services between 2004 and 2011.
[9] The Crown called Siddiqui as a witness at the preliminary hearing into these charges. He testified that Panchbhaya retained him in mid-2011 to act as counsel for the Sharia Ethics Board, and then MCC, for the purpose of seeking to intervene in the receivership application in relation to UMF and UMC.
[10] While Crown counsel scrupulously avoided asking questions of Siddiqui at the preliminary hearing that might breach solicitor-client privilege, counsel for Panchbhaya did not. He asked a number of questions in cross-examination relating to verbal communications between Siddiqui and Panchbhaya relating to the subject matter of this case between June 1, 2011 and November 10, 2011. Following this cross-examination, counsel filed a written waiver of privilege, in the following terms:
I, Yusuf Panchbhaya, DOB: June 1, 1958, of 7229 Darcel Ave, Mississauga, do hereby waive my right to solicitor/client privilege relating to my verbal communications with my counsel, Shazhad Siddiqui, relating to my retainer of his services on or between June 1, 2011 - November 10, 2011.
I do this for the purpose of Mr. Siddiqui being cross-examined in relation to those communications at my Preliminary Hearing commencing May 4, 2015 and scheduled to be completed, May 29, 2015.
[11] Following cross-examination of Siddiqui by counsel for Panchbhaya, counsel for Kalair asked question in relation to these waived communications in the course of his cross-examination of Siddiqui, and Crown counsel also asked questions in relation to them in re-examination. In the course of the re-examination, Siddiqui also reluctantly disclosed the whereabouts of his file in relation to his retainer with Panchbhaya.
[12] After the accused were ordered to stand trial, Crown counsel brought an application seeking production of the file held by Siddiqui, contending that Panchbhaya had waived solicitor-client privilege respecting “all communications between him and Siddiqui during the life of the retainer”. The file, in the form of a banker’s box, was brought to court pursuant to a subpoena.
[13] The application was heard in this court by Clark J. On the application, Panchbhaya argued that he did not waive privilege to the extent contended by the Crown. After hearing argument, Clark J. examined the file and heard further argument. He then released a decision in writing: 2017 ONSC 1714. In his decision, Clark J. described the state of the file in unflattering terms. He said that it consisted of several thousand loose pages, with no list of contents, and with no apparent organization.
[14] Upon examining the file, Clark J. found only four[^1] documents that fell within the ambit of the application. I take this to mean that there were only four documents in the banker’s box that disclosed communications between Panchbhaya and Siddiqui during the life of the retainer. Specifically, Clark J. said that three of these documents were relevant to the charges that are now before me and not already in the public domain: first, a document containing an e-mail from Panchbhaya to Siddiqui sent November 4, 2011, which related to a meeting at which matters pertinent to the subject matter of these charges were discussed; second, Siddiqui’s response on November 23, 2011, which related to the same meeting; and third, Siddiqui’s handwritten memorandum dated December 12, 2011, referring to the same matter.
[15] Clark J. went on to say that both the memorandum to file and Siddiqui’s November 23, 2011 e-mail fell outside the period covered by the waiver, and for that reason alone there was no waiver of their contents. However he noted that Panchbhaya’s November 4, 2011 e-mail to Siddiqui falls within the period to which the waiver applies.
[16] Clark J. also observed that the meeting referred to in the four documents in issue was discussed by Siddiqui in his evidence at the preliminary hearing, a consideration obviously pertinent to waiver, but, he said, there is nothing in the documents that would cast any different light on what Siddiqui said about the meeting in his evidence, making the content of the documents at issue innocuous. As a result, he was of the view that it would not offend “the rule”, by which I assume he meant the waiver rule, not to disclose them. There is no risk, he said, that by upholding the claim of privilege, opposing counsel or the court will in any way be misled.
[17] In the end, Clark J. held that Panchbhaya’s claim of privilege should prevail against the Crown, and he dismissed the Crown’s application for production. However I note that Clark J. also said that Kalair, as opposed to the Crown, has a right to access to the content of the file that pertains to him as of right.
THE POSITION OF THE PARTIES
[18] On the application before me, as I have already noted, Crown counsel sought a ruling, based on the written waiver filed at the preliminary hearing and on the conduct of the cross-examination of Siddiqui by counsel for Panchbhaya at the preliminary hearing, that the solicitor-client privilege attaching to communications between Panchbhaya and Siddiqui in relation to the subject matter of this trial has been waived for all purposes.
[19] Counsel for Panchbhaya takes the position, as he did at the preliminary hearing, that the written waiver is a limited waiver that relates only to oral communications made during the specified time period and applies only for the purpose of the preliminary hearing. He acknowledges, however, that Panchbhaya has waived privilege regarding any areas examined on at the preliminary hearing, and, as a result, communications concerning any issues examined on at the preliminary hearing are no longer privileged.
ANALYSIS
[20] I find the argument of Crown counsel attractive, but I consider myself to be constrained to some degree by the ruling made by Clark J., as will be seen.
[21] There can be no doubt that a party to a legal proceeding can voluntarily waive solicitor-client privilege on a limited basis, restricting the waiver to a particular and defined subject matter (see, for example, Bone v. Person (2000), 2000 CanLII 26955 (MB CA), 145 Man. R. (2d) 85 (Man. C.A.)). However such a limited waiver is effective only to the extent that the court and other parties are not misled. The party making disclosure cannot pick and choose between the favourable and the unfavourable. Here, Panchbhaya argues for much more. He asserts that his waiver is limited as to subject matter, time, and purpose, and says that such a waiver is valid. But he offers scant jurisprudential support for waiver limited in this way. In my view, on its face, his waiver is not as limited as he now says it is, and in any event, he asserts more than the law allows.
[22] I begin by examining whether his written waiver purports, by its terms, to be limited in the manner he now advances. I repeat the terms of the waiver:
I, Yusuf Panchbhaya, DOB: June 1, 1958, of 7229 Darcel Ave, Mississauga, do hereby waive my right to solicitor/ client privilege relating to my verbal communications with my counsel, Shazhad Siddiqui, relating to my retainer of his services on or between June 1, 2011--November 10, 2011.
I do this for the purpose of Mr. Siddiqui being cross-examined in relation to those communications at my Preliminary Hearing commencing May 4, 2015 and scheduled to be completed, May 29, 2015.
[23] This waiver is not a model of clarity. It mentions no subject matter, but instead relates to a retainer of Siddiqui’s services between June 1 and November 10, 2011, without reference to the nature of that retainer. To some extent, the nature of that retainer was revealed at the preliminary hearing. Siddiqui testified that Panchbhaya retained him in mid-2011 to act as counsel for the Sharia Ethics Board of UMF, and later MCC, to seek to intervene in a receivership application in relation to UMF and UMC. However, the evidence suggests that the retainer was broader than this, and related in addition at least to advice about the receivership. In the end, however, the scope of the retainer does not matter. On its face the waiver applies to all verbal solicitor-client communications between Panchbhaya and Siddiqui between June 1, 2011 and November 10, 2011. The right of the Crown and of Kalair to question Siddiqui about those communications is limited only by relevance in these proceedings, and, possibly, by the remaining terms of the waiver, particularly the purpose clause, and to some extent the time limitation.
[24] Before I turn to the “purpose” clause of the waiver, I will say a word about the time limitation: June 1, 2011 to November 10, 2011. If those dates are co-extensive with the retainer itself, the time limitation presents no difficulty. Communications outside the period are simply not privileged at all. But if the retainer extended beyond those dates, then the limitation on the waiver becomes problematic. In that case, I would see the limitation as being equivalent to a subject matter limitation. Like a subject matter limitation, it is governed by the law as found in cases such as Bone v. Person. It is ineffective to the extent that it misleads the other parties or the court. It does not empower Panchbhaya to pick and choose between the favourable and the unfavourable by the simple expedient of an artificial start or end date.
[25] I do not consider this approach to be inconsistent with the ruling of Clark J. He found that both the memorandum to file and Siddiqui’s November 23, 2011 e-mail fell outside the period covered by the waiver, that their content was innocuous and that upholding the privilege would not mislead opposing counsel or the court. In those circumstances, I would reach the same conclusion. Crown counsel may not ask about those documents, although he is free to ask about the meeting discussed in them since, as Clark J. observed, that meeting was discussed by Siddiqui in his evidence at the preliminary hearing.
[26] I turn then to the “purpose” clause: waiver for the purpose of Siddiqui being cross-examined in relation to those communications at Panchbhaya’s preliminary hearing. On its face, this clause does not appear to limit the waiver at all. It merely sets out the reason for the waiver: to permit Panchbhaya to cross-examine Siddiqui in relation to privileged communications at Panchbhaya’s preliminary hearing. If the clause were actually intended to be a limitation, it would be an impossible one, since it would only permit “cross-examination” of Siddiqui in relation to the communications, and would not permit re-examination. Remember, Siddiqui was the Crown’s witness, and the Crown had no right to cross-examine him at all, only to examine him in chief, and to re-examine him. Only Panchbhaya and Kalair had the right to cross-examine. Needless to say, such a limitation could not be countenanced. Once Siddiqui was cross-examined about the communications, Crown counsel was necessarily free to re-examine on them.
[27] In the end, however, despite its wording, I am prepared to assume that the intention of the drafter of the second sentence of the waiver was to somehow limit disclosure to the preliminary hearing. But again, if that was the intention, it was ineffective, for several reasons.
[28] First, the waiver applied to evidence given in a courtroom in which the public was present. Evidence given in a public courtroom cannot somehow retain its former privileged character. Members of the public who heard it cannot be precluded from repeating it. Moreover, s. 540(1)(b) requires the justice holding the preliminary hearing to cause a record of the evidence of each witness to be taken, and, if the accused is ordered to stand trial, s. 551 requires the justice to send the evidence to the court where the accused is to be tried. The evidence is then available to the Crown and the accused, and, by virtue of s. 603, the accused has a right to inspect and receive a copy of the evidence. It is hard to imagine how a waived privilege could reattach to the evidence.
[29] Second, even if waiver could in some circumstances be limited to a particular judicial proceeding, such a waiver could not be given in relation to a preliminary hearing only, but not in relation to the subsequent trial. The primary purpose of a preliminary hearing is to determine if there is sufficient evidence to order the accused to stand trial. Evidence that is not potentially admissible at trial would be irrelevant and inadmissible at a preliminary hearing. As a result, in the face of a waiver limited to the preliminary hearing, Siddiqui’s evidence about privileged communications should not have been led at all.
[30] Faced with the reality that any effort to limit the waiver to the preliminary hearing was impossible, counsel took a slightly different position before Clark J. and before me. He conceded that any privileged communications that were disclosed at the preliminary hearing, whether in cross-examination or re-examination, were admissible at trial at the instance of the Crown. But, he submitted, any privileged communications that were not specifically disclosed at the preliminary hearing remained privileged, and inadmissible at the instance of the Crown, although Panchbhaya was free to waive privilege and disclose them at any time as he saw fit.
[31] This position is untenable. Leaving aside the problematic language of the waiver, this position flies in the face of the rule that a waiver is ineffective to the extent that it misleads the other parties or the court, and does not empower the party waiving the privilege to pick and choose between the favourable and the unfavourable. In light of this rule, in my view the cross-examination of Siddiqui by Panchbhaya at the preliminary hearing amounts to a complete waiver of the entirety of the confidential communications between Panchbhaya and Siddiqui that are relevant in this proceeding, subject to what I have said about the limitation with respect to time. To more fully explain why I say this, it is necessary for me to review the pertinent portions of that cross-examination briefly.
[32] With respect to the privileged communications, counsel for Panchbhaya first explored with Siddiqui what he knew about the decision to incorporate the Sharia Ethics Board as the MCC at the time that the intervention application was filed. Siddiqui had testified in chief that he had recommended incorporation, but did not handle the incorporation work. Counsel for Panchbhaya suggested to Siddiqui that Panchbhaya only became involved in the incorporation when he met Siddiqui to sign the already prepared documents. Siddiqui thought otherwise. He thought that Panchbhaya had been involved in earlier discussions. Counsel then suggested that the idea was to incorporate because of concerns about the possibility of litigation by the mortgagees, and Siddiqui agreed. Counsel pointed out that there was correspondence sent to CUCC, Central 1 and UMC regarding a possible action by mortgagees, and suggested that there was never any suggestion that the Sharia Ethics Board or the Sharia scholars would be included. Siddiqui did not think that there was any such suggestion. Counsel then explored with Siddiqui his recollection of who made the decision to incorporate the scholars, and who directed the creation of the necessary documents. Siddiqui recalled that he, Panchbhaya and Kalair were all involved in the discussion, and specifically recalled a discussion about where the incorporation should be done.
[33] Counsel then explored with Siddiqui his belief, shared by Panchbhaya, that if the company went into receivership, the mortgages would no longer be Sharia compliant. Siddiqui said that the understanding given to him by Panchbhaya was that Panchbhaya was worried about the homeowners and the Sharia structure, not about losing money or any payments that were supposed to be made to him personally.
[34] Siddiqui was also questioned by counsel for Panchbhaya about the judgment denying MCC’s application to intervene in the receivership proceedings. He testified that the application was denied by Brown J. on September 26, 2011 on the basis that MCC was not a creditor. He was then asked about an invoice issued on September 26, 2011, the same day that the intervention application was denied, by MCC to UMF for 2.79 million dollars for work done by Sharia scholars. Siddiqui did not create the invoice, but he testified that he believed that it was a coincidence that it was issued the same day as the judgment. In fact, he said that he did not tell Panchbhaya on September 26, 2011 that the intervention had been denied because MCC was not a creditor. But Siddiqui also said that he first saw the invoice shortly before October 21, 2011.
[35] Siddiqui was aware that on October 7, 2011, the date the receivership was ordered, 2.1 million dollars had been paid by UMF and UMC to MCC. Siddiqui testified that he urged his client to pay the money back.
[36] Siddiqui was asked by counsel for Panchbhaya if he told Panchbhaya that he thought that the invoice was a problem. Siddiqui said that when he got it he did have concerns, and he told Panchbhaya that people would have a problem with it. His concern was not with the amount of money, but with all of it being in one invoice, and with the invoice being issued in the particular circumstances. He also said that he probably talked with Panchbhaya about the time spent on the file. Under cross-examination by counsel for Kalair, Siddiqui said that he thought the amount seemed excessive, asked Panchbhaya how the amount got so high, and suggested that he pay back some of the compensation he had received.
[37] While it is very early for me to fully understand the position of the Crown in this case, far less the position of Panchbhaya, it is plain that the waiver of privilege was for the purpose of adducing evidence that may support the innocence of Panchbhaya of the offences alleged against him. The Crown alleges that Panchbhaya’s participation in these offences related to the application by MCC to intervene in the receivership litigation, MCC’s issuance of the invoice for Sharia advice, the withdrawal of funds purportedly to pay that invoice and the disposition of the withdrawn funds. All of this is precisely the subject matter of Siddiqui’s narrow retainer. The privileged communications adduced by Panchbhaya cover the entire subject matter of the retainer, and were clearly adduced with the intention of putting an innocent face on the incorporation of the committee of ethics scholars, the effort to intervene in the receivership application and the tendering of the invoice for the work of the scholars immediately before the receivership was consented to. It is hard to imagine that any undisclosed communications did not cover the same subject matter.
[38] As I have already noted, Panchbhaya’s waiver can only be effective to the extent that the court and other parties are not misled. The party making disclosure cannot pick and choose between the favourable and the unfavourable. In this branch of the argument, the communications that the Crown seeks to cross-examine on are oral. I have no idea whether anything that passed between Panchbhaya and Siddiqui would be unfavourable to the accused if disclosed. But to preclude the Crown from exploring the remainder of the communications risks misleading the court, the Crown and Kalair. Counsel is entitled to use privilege as a shield, not as a sword, but here he is trying to do precisely that – use privilege as a sword. I will not permit him to do so.
DISPOSITION
[39] In the result, the Crown is free to question Siddiqui on any matter that is relevant to these proceedings, including questioning that calls for disclosure of what would otherwise be a privileged communication between Siddiqui and Panchbhaya made between June 1, 2011 and November 10, 2011, and of course, such questions must be answered. Questions that call for disclosure of any otherwise privileged communication between Siddiqui and Panchbhaya that falls outside of the time frame indicated may be asked and must be answered only if there is a basis to conclude that the other parties or the court would otherwise be misled.
[40] In addition, the order of Clark J. will stand, subject to this proviso. If Siddiqui’s evidence differs from the evidence he gave at the preliminary hearing, and the trial judge (whether it is me or not) concludes that any of the documents would cast a different light on what Siddiqui says in his evidence at trial, then the trial judge will be free to order the documents disclosed.
M. DAMBROT J.
RELEASED: November 30, 2017
CITATION: R. v. Kalair, 2017 ONSC 7003
COURT FILE NO.: CR-15-90000335-0000
DATE: 20171130
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
- and –
OMAR KALAIR and YUSUF PANCHBHAYA
REASONS FOR RULING
M. DAMBROT J.
RELEASED: November 30, 2017
[^1]: Clarke J. actually said that there were three such documents, but one of these contained two separate e-mails, and I find it simpler to refer to that document as two documents, making a total of four.