COURT FILE NO.: CRIM 1348/15

DATE: 2018 05 29

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN

– and –

APRIL VUONG and HAO QUACH

Defendants

Mike Morris, for the Crown

Self-Represented, for the Defendants

HEARD: May 22-23, 2018

reasons for Decision

Shaw J.

Introduction

[1] The accused, April Vuong and Hao Quach (the “Applicants”) are charged with fraud over $5,000 contrary to s. 380(1)(a) of the Criminal Code of Canada. The Crown alleges that the accused, through a company of which they were the sole directors, Systematech Solutions Inc. (“Systematech”) secured money from

various individuals in exchange for an unrealistically high rate of return and an assurance that their money would be returnable with 30 days’ notice. Some money was paid. Eventually, cheques were returned for insufficient funds and demands for the return of money went unheeded. The Crown’s position is that this was a Ponzi scheme with a total loss of $5,373,000 by fourteen individuals.

[2] This is an application to stay the proceedings. The matter proceeded by way of a voir dire in relation to the allegations of various violations of s. 7 of the Charter. The Applicants are self-represented. They agreed, with the Crown, that the evidence for this voir dire was the affidavits filed and cross-examination on those affidavits. Only Constable Jackson, an investigating officer with the Fraud Bureau of the Peel Regional Police (PRP) was cross-examined on her affidavit.

[3] The issue before the court is whether the charges should be stayed on the basis of an abuse of process. The position of the Applicants is that the abuse of process affects their right to a fair trial and the only remedy is a stay of proceeding. The Applicants allege the following four general categories of abuse of process:

1. Issue estoppel;

2. Crown misconduct;

3. Police misconduct;

4. Conflict of interest/selective use of expert witness.

[4] The last category, while is included by the Applicants as a basis for a stay as a result of an abuse of process, also involves issues dealing with whether or not a forensic account retained by PRP should be permitted to give evidence at trial and, if so, whether as a fact or expert witness.

Background Facts

[5] Given the nature of the claims by the Applicants, it is useful to set out a timeline of various events. A more detailed description will follow.

timeline

EVENT

DATE

Victim Occurrence Reports received by PRP

June 2011 - May 2012

Investigation launched by OSC

December 2011

OSC Statement of Allegations

October 31, 2012

Peel Regional Police Investigation commences

April 2013

Production Orders Served (x 8)

June – July 2013

Results from Production Orders received

July – October 2013

Attempts to Locate Applicants

Late August 2013

Search Warrant Executed

October 15, 2013

Arrest

October 16, 2013

Bail Hearing

October 22 – 24, 2013

OSC Settlement Hearing

November 14, 2013

Peel Regional Police Interviews

June – May 2014

Solicitor/ Client Issue raised by Crown to PRP

February 2015

PRP contract Fogler Rubinoff

February 23, 2015

Sealing Order of potential solicitor/client privilege documents

March 31, 2015

Preliminary Inquiry

December 14 – 15, 2015

Peel Regional Police Request Forensic Accounting Report

June 2016

Documents from Production Orders continues to be received

Up to November 2016

Rowbotham application heard

November 15 -16, 2016

Accountant’s Report received and served

January 2017

First trial scheduled to proceed

February 13, 2017 - adjourned

11B Motion

June 5, 2017

Second trial scheduled to proceed

September 25, 2017- adjourned- Illness

Third Trial scheduled to proceed

May 2018

[6] PRP commenced an investigation in April 2013 as a result of victim occurrence reports received between June 2011 and May 2012 from a number of individuals who invested money with the Applicants. Prior to the police launching its investigation, the Ontario Securities Commission (“OSC”) commenced its own investigation in December 2011. In its Statement of Allegations dated October 31, 2012, the OSC alleged the following:

1. That the Applicants solicited individuals between March 2007 and October 2011 to invest at least $12.4 million with Systematech;

2. Promissory notes were issued and investors were promised an annual return of between 12% and 30% and advised that their investments were guaranteed and not at risk;

3. Of the $12.4 million raised from investors, $7.7 million was repaid to investors, $3.5 million was lost in trading accounts and $900,000 was paid for personal type payments;

4. Contrary to representations made by the Applicants, the majority of investor funds received were not used for the purposes of trading. Rather, a large portion of investor funds were used to pay returns and redemption payments to investors;

5. As at October 2012, $4.7 million of investor’s monies had not been repaid to investors;

6. There were breaches of Ontario Securities law;

7. The Applicants engaged in a course of conduct that they knew or reasonably ought to have known would result in a fraud on persons or companies purchasing securities of Systematech.

[7] On November 11, 2003, the Applicants entered into a Settlement Agreement with the OSC. Pursuant to the terms of the settlement, they agreed to a disgorgement order of $5,623,945.96. They also agreed to a number of terms limiting their acquisition and trading in securities and that they resign from any position as investment fund managers except for permission to continue to act as a director and officer of another company known as Vectorspace Game Studios Inc.

[8] The Settlement Agreement stated that on October 16, 2013 the Applicants were each charged with fraud over $5,000 and that the subject matter of the criminal chargers was substantially similar if not identical to the fraud allegations made by the OSC in its proceeding. Paragraph 9 of the Settlement Agreement states as follows:

As a result, the parties have agreed to proceed with a settlement agreement which does not include any alleged misrepresentations or fraud on the basis that, depending on the outcome of the criminal charges, Staff will be entitled to commence a new proceedings against the respondents under subsection 127(10) of the Act. Subsection 127(10) authorizes Staff to seek an order from the Commission where a person or company has been convicted of an offence arising from a transaction, business or course of conduct related to securities or derivatives.

[9] Prior to the settlement agreement, PRP, as part of its investigation, served eight production orders on a number of financial institutions and began to receive disclosure regarding 32 different bank accounts between July and October 2013. PRP also received the file from the OSC as a result of a production order served on it in June 2013. PRP continued to receive disclosure in response to the production orders until mid-November, 2016. In total, disclosure was received regarding 54 different bank accounts.

[10] As a result of its investigation, including a search warrant executed on October 15, 2013, PRP arrested the Applicants on October 16, 2013. They were released following a multi-day bail hearing on October 24, 2013.

[11] A preliminary inquiry was conducted on December 14 and 15, 2015. The Applicants’ Rowbotham application was denied on November 22, 2016. The first trial was schedule to proceed on February 13, 2017 but was adjourned so that the Applicants could bring an 11B motion for delay. That motion was denied. The second trial was scheduled to commence on September 25, 2017 but was adjourned as a result of the critical illness of Ms. Vuong’s mother.

[12] On this voir dire, after a cross-examination of Constable Jackson and after final submissions, the Applicants sought leave of the court to file additional material in support of their application. Leave was granted and a number of additional documents were filed with the court. The Crown indicated that it did not require an adjournment to respond to this new material. The Crown did not oppose the filing of the new material but suggested that the court should consider what weight to place on the material given its late service.

[13] One of the new documents filed was an affidavit from Mr. Collin McCann, a senior investigator with the OSC dated February 24, 2012. That affidavit was filed in connection with search warrants and it states that the OSC was investigating the following:

• Unregistered trading;

• Advising with respect to investing in, buying or selling securities without being registered with the Commission;

• Trading in securities that have not been qualified by the Commission;

• Fraudulent conduct contrary to section 126.1 of the Securities Act RSO 1990, C.S. 5 as amended.

[14] The Applicants also filed an email from their lawyer at the time, Kevin Richard dated February 27, 2012 informing them that it appeared that the OSC was gearing up to proceed to Provincial Court with quasi-criminal proceedings. The Applicants specifically waived solicitor-client privilege over that email.

[15] A second email dated February 20, 2013 from the Applicants’ lawyer at the time, Jay Naster, was also filed. It stated that he would continue to review the OSC disclosure to determine, amongst other things, whether there was a basis to defend the allegation of fraud. Again the Applicants specifically waived solicitor-client privilege over this email.

[16] During the course of the bail hearing commencing on October 22, 2013, the Crown filed with the court an email from Mr. Jim Penning, a lawyer from Luxembourg. That email was printed from the account of Mr. Jay Vieira who was identified as a civil lawyer representing Ms. Vuong. According to the transcript from the bail hearing, counsel for the Applicants objected to the email being filed as evidence on the basis that it was privileged communication as between counsel and client.

[17] The Crown’s position at the bail hearing was that the emails disclosed money laundering and that it was admissible based on the fraud exception to solicitor-client privilege. Mr. Naster, who was representing the Applicants, pointed out that the documents had been seized from a search warrant executed on October 15, 2013 and that it only had been disclosed on October 21, 2013, the day before the bail hearing commenced. Despite his objections, the email was filed as an exhibit at the bail hearing but there was no determination made as to whether or not it was governed by solicitor-client privilege.

[18] Constable Jackson’s evidence was that on February 11, 2015 she received an email from the Crown, Helena Gluzman, who expressed concern that the police and Crown may have come into possession of correspondence that was presumptively covered by solicitor-client privilege when the search warrant was executed at the Applicants’ home on October 15, 2013. Constable Jackson was directed to review the disclosure to identify every letter and email that was on a lawyer’s letterhead and to remove those potentially privileged documents and place them in a sealed envelope. The Crown also directed Constable Jackson to ensure that no police officer involved in the case retain any of the letters or emails whether in electronic format or hardcopy.

[19] Constable Jackson’s evidence is that on February 12, 2015, she began to review 19,000 images as all documentary evidence had been scanned to electronic format. In addition to instructions from the Crown, she also referred to an article from Legaltree.ca titled “The Supreme Court of Canada on Solicitor-Client Privilege: What Every Practitioner Needs to Know”. Her review resulted in the identification of nine hardcopy documents containing potentially privileged information. She instructed the electronic evidence clerk to redact these electronic documents. She also obtained all of the evidence bags and removed the identified hardcopy documents. She also removed the documents from the bail brief. The documents were sealed in an envelope and provided to the court.

[20] New disclosure vetted of any potentially privilege material was provided to the Applicants on March 31, 2015.

[21] According to Constable Jackson, the following summarized the steps she took in the vetting of the potentially privileged information.

March 19, 2015

TCU officers requested to prepare disks containing electronic copies of potentially privileged information to be sealed for court

March 20, 2015

Compile summary charts of potentially privileged information for sealing

March 25, 2015

Receive disks from TCU containing potentially privileged electronic documents for sealing

March 26, 2015

Disclosure sets for Crown and Defence vetted of potentially privileged material provided to Case Management and sealed envelopes

containing privileged information for the court provided to Cst. Morash to bring to court

March 31, 2015

Sealed envelopes provided to Gluzman by Morash at scheduled court appearance for defendants

Defendants provided vetted disclosure

[22] It was Constable Jackson’s evidence that while reviewing the documentary and electronic evidence obtained through the search warrant, she identified documents involving an individual by the name of Richard James. Her investigation revealed that Mr. James had been a lawyer but was suspended by the Law Society as of July 4, 2012 and that there were charges for fraud, possession of the proceeds of crime and money laundering.

[23] She also identified documents that connected Ms. Vuong, Mr. James and Mr. Jacinto (Jay) Vieira, a lawyer with Fogler Rubinoff, L.L.P. that caused her to believe that Mr. Vieira was involved with criminal activity. She therefore contacted the Law Society. On January 24, 2015, the Law Society wrote to Constable Jackson requesting documentation to aid in its investigation which she supplied.

[24] It was Constable Jackson’s evidence that in February 2015, while reviewing the 19,000 images of documents for potential solicitor-client privilege disclosure, she identified letters which appeared on the Fogler Rubinoff L.L.P letterhead authored by Mr. Vieira. She was very suspicious about the authenticity of the documents leading her to believe that there was a strong potential that the documents were fraudulent or fabricated. As the Crown, Ms. Gluzman, did not wish to speak to the officers dealing with the vetting in order to stay at an arms-length distance, Constable Jackson had to make a decision with respect to how to deal with these documents based upon the fraudulent exception to solicitor-client privilege. The decision was made to contact Fogler Rubinoff to obtain additional information about the use of its letterhead.

[25] It was Constable Jackson’s evidence that Constable Morash, who was also part of the investigation, contacted the law firm on February 23, 2015 after Constable Jackson pointed out her concern about the documents. On March 2, 2015, by way of an email to Constable Morash, Fogler Rubinoff informed him that two of the letters he had sent for review, obtained from the documents seized from the search warrant, were not their letters.

[26] According to Constable Jackson, despite her belief that the letters may have been fraudulent and therefore an exception to solicitor-client privilege, she nonetheless removed the letters from the disclosure as part of the vetting process. These letters, together with the email from the bail hearing and the other letters/emails identified by Constable Jackson as possibly being covered by solicitor-client privilege, were all removed from the disclosure and were ordered sealed by the court on March 31, 2015. These documents remain sealed at this time.

[27] According to Constable Jackson, the Crown at the time, Ms. Gluzman, was not involved with the vetting process to determine which documents may be governed by solicitor-client privilege.

[28] Pursuant to correspondence from the Law Society of Upper Canada dated February 28, 2018, Constable Jackson was informed that as a result of its investigation, Mr. Vieira had signed an Undertaking not to practice law as a sole-practitioner or in private practice. He agreed to practice law only as an employee. In addition, he agreed by way of his Undertaking not to hold or operate any signing authority on any trust account. In its correspondence, the Law Society stated:

This does not mean that the Law Society has found that Mr. Vieira is innocent of professional misconduct. It is fair to say that my investigation of the instructed allegations of professional misconduct revealed and supported serious regulatory concerns such that but for the agreement by Mr. Vieira to the terms to the enclosed Undertaking, the Law Society would have considered commencing a formal discipline prosecution. Consequently, at this point, no decision has been made by the Law Society Discipline Panel with respect to the alleged professional misconduct.

[29] On cross-examination it was Constable Jackson’s evidence that the initial investigation by the Law Society of Mr. Vieira, commenced with her information but that other issues also came to light. Constable Jackson did not know what issues the Law Society was investigating or whether the Undertaking imposed related to issues involving the Applicants. Constable Jackson also did not know why Mr. Viera left Fogler Rubinoff.

[30] As the evidence seized from the search warrants revealed that the Applicants and Systematech held 32 accounts with four financial institutions and 22 other banking and investment accounts, with several overseas, Constable Jackson inquired about a forensic audit being conducted. As funding was not available, Constable Jackson wrote to Mr. Don Panchuk, the Manager of the Joint Securities Intelligence Unit (JSIU) at the OSC on July 7, 2016 requesting assistance with the forensic analysis of the financial records PRP had received. As a result of that inquiry, Constable Jackson met with Anthony Long, an OSC forensic accountant with the Joint Serious Offences Team (“JSOT”). Neither Mr. Panchuk nor Mr. Long had been involved with the OSC’s investigation of the Applicants. The JSOT was established in 2013 to work with police to investigate more serious matters involving criminal activity. It was Constable Jackson’s evidence that the Applicants had been investigated by the JSIU which was commenced as a regulatory investigation. According to Constable Jackson, JSOT members do not have access to the general databases and investigation files of JSIU and occupy separate spaces at the OSC. Mr. Long had no access to the files or the enforcement area of the OSC when it was investigating the Applicants.

[31] It was Constable Jackson’s evidence that she provided Mr. Long with the documentation to review. It was only material received by the PRP through judicial authorizations and the complainants. Mr. Long did not review any documentation obtained by the PRP from the OSC. Mr. Long prepared a report dated January 5, 2017. A copy of the report was provided to the Applicants in January 2017.

Position of the Parties

[32] The Applicants’ position is that the current criminal proceedings are an abuse of process based on the principle of issue estoppel. They allege that the current criminal fraud charge is the same issue before the OSC that the OSC commenced investigating in December 2011. They claim that in addition to the same issue, the judicial decision of the OSC was final and the parties or their privies were the same between the two proceedings.

[33] They also allege that the police and Crown conduct resulted in an abuse of process that will prevent them from receiving a fair trial. They point to a number of factors of such conduct including pre-charge delay and an allegation that the police conduct was vexatious and that they adopted a “wait and see” stance in delaying the charge until the resolution of the OSC matter.

[34] They also allege police misconduct in contacting the Law Society and Fogler Rubinoff L.L.P to make inquiries of their lawyer, Mr. Vieira, in contravention of solicitor-client privilege.

[35] They allege Crown misconduct for using an email protected by solicitor-client privilege at the bail hearing and making an allegation of money laundering involving their lawyer. They point out that no such charge was ever laid against them or their lawyer. They also allege Crown misconduct for refusing to consent to the request to adjourn the second trial when Ms. Vuong’s mother was terminally ill and for changing its positions on sentencing during the pre-trial process.

[36] The Applicants’ position is that Mr. Long, the forensic accountant retained by PRP to review the disclosure and prepare a report tracing funds through the Applicants’ various accounts, should not be permitted to give evidence as he is employed by the OSC and therefore has a conflict of interest that constitutes an abuse of process and prejudice to the Applicants. The Applicants assert that the OSC has an interest in the outcome of the criminal proceedings as it may commence a new proceeding depending on the outcome of this matter. The Applicants also assert that if Mr. Long is called as an expert witness, his opinions will be biased given his employment with the OSC. If Mr. Long is to give evidence, the Applicants’ position is that he can only be called as an expert witness and not as a fact witness.

[37] The Crown’s position is that there have been no breaches of the Applicants’ s. 7 Charter rights. Even in there were such breaches, a stay of the charges is not warranted.

[38] The Crown’s position is that Mr. Long will not be called as an expert witness but only as a fact witness who will not provide any opinion evidence. His evidence will be limited to following the flow of money deposited by the various complainants through the Applicants’ bank accounts.

Legal principles

[39] Section 7 of the Charter provides:

7. Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.

[40] Section 24 of the Charter provides:

Enforcement of guaranteed rights and freedoms

24. (1) Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.

[41] In order to determine if section 7 rights have been breached, it must be determined if a persons’ section 7 rights have been engaged and deprived by the state and if so whether the deprivation was in accordance with the principles of fundamental justice. If the deprivation was not in accordance with the principles of fundamental justice, a breach of s. 7 is established and a remedy under section 24(2) may follow (R. v. Hunt 2016 NLCA 61, [2016] N.J. No. 372 (N.L.C.A), at para 61).

(a) Issue Estoppel

[42] The legal framework for issue estoppel was established in R. v. Mahalingan 2008 SCC 63, [2008] 3 S.C.R. 316 at para. 49 and Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, para 25.

[43] For the doctrine of issue estoppel to apply, the moving party must establish three requirements:

1. The same question was decided in the prior proceedings;

2. The judicial decision said to create the estoppel is final; and

3. The parties to the prior decision are the same persons as the parties to the proceedings in which the estoppel is raised.

[44] If the moving party can establish these three preconditions, a court must, using its own discretion, still determine if issue estoppel ought to apply.

[45] At para. 39 in R. v. Mahalingan, the court found that the most compelling rationale for retaining issue estoppel in criminal law is that fairness to the accused requires that an accused should not be called upon to answer allegations of law or fact already resolved in his or her favour by a judicial determination on the merits.

[46] For the reasons that follow, I do not find that issue estoppel applies and therefore a stay of proceedings is not warranted based on this principle.

[47] Based on the material filed by the Applicants, the OSC was investigating fraud from the time it commenced the investigation. The OSC proceedings involved the same individuals who are complainants in the criminal proceedings. I accept that the OSC investigated the same financial assets, transactions and records and conducted its own forensic financial analysis.

[48] While fraud may have been investigated by the OSC, it was not part of any determination or finding. In R. v. Dieckmann 2017 ONCA 575, [2017] ONCA 575, 141 W.C.B. (2d) 85, 355 C.C.C. (3d) 216, at para 35, the court found that a consent judgment may be the basis for issue estoppel. Accordingly, in these proceedings, issue estoppel may still apply even though the parties entered into a settlement. The issue of fraud, however, was specifically excluded in the Settlement Agreement signed by the Applicants. Paragraph 9, cited above, clearly states that the settlement agreement did not include any alleged misrepresentation or fraud.

[49] The OSC acknowledged that it was aware of the outstanding criminal proceedings as noted in paragraphs 20 and 21 of the Statement of Allegations. In addition, when the OSC concluded the matter as per the Settlement Agreement, the parties were aware of the ongoing criminal proceedings as noted in paragraph 9 of the agreement.

[50] In the transcript from the Settlement Hearing held by the OSC on November 14, 2013, the outstanding criminal charges were addressed and it was acknowledged that the subject matter of the charges were substantially similar, if not identical, to the fraud allegations in the OSC Statement of Allegations and that there was overlap in the investors involved. At page 10 of the transcript, it is clear that the settlement agreement was entered into knowing of the outstanding criminal investigation and that new proceedings could be commenced pursuant to s. 127(10) of the Securities Act which authorizes OSC staff to seek an Order from the Commission “where a person or company has been convicted of an offence arising from a transaction, business or course of conduct related to securities or derivatives.”

[51] Based upon these documents, it is evident that rather than making any determination of fraud, the OSC specifically and clearly recognized that once the criminal proceedings concluded, it could take further steps at that time, if warranted. This was not a situation of an acquittal by the OSC or any agreement of any kind regarding fraud. Its decision with respect to how to proceed regarding any finding of fraud in the criminal matter was deferred pending the outcome of the criminal proceedings. As such, the first test from Mahalingan has not been met and there is no issue estoppel.

[52] That finding ends the analysis as the Applicants have the onus to satisfy all three requirements. If, however, I am not correct, and the issue is the same, the decision of the OSC is clearly not final as further proceedings are specifically contemplated by the OSC depending upon the outcome of the criminal proceedings.

[53] Lastly, the parties to the proceeding are not the same. The matter before the OSC was an administrative proceeding whereas this action is a criminal proceeding. According to Toronto (City) v. C.U.P.E., Local 79, [2003] 3 S.C.R. 77, 2003 SCC 62, under those circumstances, mutuality will not be met and the Applicants cannot raise a prior finding in their favour by way of issue estoppel.

[54] I see no basis to exercise the Court’s discretion and find that issue estoppel ought to apply. These criminal proceedings do not involve the re-litigation of issues that were already determined in the Applicants’ favour in an earlier proceeding. The OSC made no finding either explicitly or implicitly with respect to the allegation of fraud against the Applicants. Furthermore, the parties did not enter into a consent or agreement that addressed the issue of fraud. The OSC was very clear in the Settlement Agreement that fraud was excluded. There are no issues of finality or fairness that are violated in finding that issue estoppel does not apply.

(b) Crown and Police Conduct

[55] The Applicants seek an order staying the proceedings on the basis that the conduct of the Crown and PRP amounted to an abuse of process that prevents them from receiving a fair trial in this matter. A stay of proceeding is the most drastic remedy a criminal court can order. As Justice Moldaver stated at para. 30 of R. v. Babos, 2014 SCC 16, [2014] 1 S.C.R. 309 (S.C.C.), a stay of proceedings firmly halts the prosecution of an accused and in doing so the truth-seeking function of the trial is frustrated and the public is deprived of the opportunity to see justice done on the merits. Furthermore, in many cases alleged victims of crime are deprived of their day of court.

[56] The court has found that there are rare occasions which are the “clearest of cases” where a stay of proceedings for an abuse of process will be warranted (R. v. O’Connor, 1995 CanLII 51 (SCC), [1995] 4 S.C.R. 411, at para 68). The cases where a stay of proceeding is warranted fall into two categories. The first is where the state conduct compromises the fairness of an accused trial (the “main category”); and secondly, where the state conduct creates no threat to trial fairness but risks undermining the integrity of the judicial process (the “residual” category) (O’Connor, at para 73).

[57] In Babos, Moldaver, J. set out the test to be used to determine whether a stay of proceedings is warranted. The test is the same for both categories. It consists of the following three requirements:

(1) There must be prejudice to the accused’s right to a fair trial or the integrity of the justice system that “will be manifested, perpetuated or aggravated through the conduct of the trial, or by its outcome” (Regan, at para. 54)

(2) There must be no alternative remedy capable of redressing the prejudice; and

(3) Where there is still uncertainty over whether a stay is warranted after steps (1) and (2), the court is required to balance the interests in favour of granting a stay, such as denouncing misconduct and preserving the integrity of the justice system, against “the interest that society has in having a final decision on the merits” (ibid., at para. 57).

[58] In the main category the question at the first stage is whether the accused’s right to a fair trial has been prejudiced and whether that prejudice will be carried forward through the conduct of the trial. In other words, the concern is whether there is ongoing unfairness to the accused.

[59] With respect to the residual category, the question is whether the state has engaged in conduct that is offensive to societal notions of fair play and decency and whether proceeding with the trial in the face of the conduct would be harmful to the integrity of the justice system (Babos para 35). Moldaver, J. noted that at times, state conduct will be more troublesome that having a trial, even a fair one, will leave the impression that the justice system condones conduct that offends society’s sense of fair play and decency. In those cases, the first stage of the test is met.

[60] At the second stage of the test, the question is whether any other remedy short of a stay is capable of redressing the prejudice (Babos para 39). Different considerations apply in whether the prejudice relates the accused’s right to a fair trial or the integrity of the justice system. Where the concern is trial fairness, procedural remedies such as ordering a new trial are more likely to address the prejudice of ongoing unfairness. In situations involving the residual category and the issues raised are prejudice to the integrity of the justice system, remedies must be directed towards that harm. The focus in those situations shall be on whether an alternate remedy short of a stay of proceedings will adequately dissociate the justice system for the impugned state conduct going forward (Babos para 39).

[61] The third part of the test involving the balancing of interests takes on heightened importance when dealing with the residual category as the court must determine whether the integrity of the administration of justice is better protected by a stay or by a trial, despite the impugned conduct. The court must consider such things as the nature and seriousness of the impugned conduct, whether the conduct is isolated or reflects a system of ongoing problems, the circumstances of the accused, the charges he or she faces and the interest of society in having the charges disposed of on the merits. The more egregious the state conduct, the greater the need for the court to disassociate itself from it. When the conduct in question shocks the community’s conscious and/or offends its sense of fair play and decency, it becomes less likely that society’s interest in a full trial on the merits will prevail in the balancing of process (Babos para 41).

[62] The balancing of societal interest that must take place in the “clearest of cases” threshold presents an accused who seeks a stay under the residual category with an onerous burden. In this category, cases warranting a stay of proceedings will be “exceptional” and “very rare”.

(i) Pre-Charge Delay

[63] The Applicants’ position is that the pre-charge delay constitutes an abuse of process and is prejudicial to them as it affects their right to receive a fair trial. The date of the first reports from complainants to the PRP was in June 2011 and continued until May 2012. The investigation was commenced in April 2013 and the Applicants were arrested on October 16, 2013.

[64] There is no time limit for the laying of indictable criminal charges. Invoking section 7 of the Charter where there has been significant pre-charge delay is limited to few and unusual circumstances where demonstrated prejudice to a fair trial or abuse of process is found (Hunt, para. 81)

[65] Pre-charge delay, on its own, does not justify staying the proceedings as an abuse of process. Staying proceedings based on the mere passage of time would be the equivalent of imposing a judicially created limitation period. (R. v. L.(W.K.) 1991 CanLII 54 (SCC), [1991] 1 S.C.R. 1091 at paras. 22-24). The prejudice a litigant suffers is relevant to a section 7 analysis only where it is directly attributable to delay caused by the state. (Hunt, para. 68.)

[66] The PRP received complaints for over one year. The investigation included receiving disclosure from a total of 54 accounts from various financial institutions from within and outside of Canada. According to Constable Jackson, there were 19,000 images from the disclosure that were scanned into electronic format.

[67] Given the significant number of complainants, the volume of disclosure received though various production orders, the complexity of the Applicants’ investment and trading activity and the amount of money invested, I do not find that there was any investigatory delay. This was a large and complex fraud investigation that would have required time to investigate.

[68] There is no basis to the Applicants’ assertion that the PRP should have pursued the investigation through the JSOT. The Applicants allege that the PRP chose to conduct its own investigation as a “collateral attack” on the same issue. There is no requirement that the PRP must conduct its investigation jointly with the OSC through the JSOT. Its decision to investigate and lay criminal charges does not constitute an abuse of process.

[69] There is no evidence that there was any ulterior or bad faith motivation by PRP to lay the charge when they did. There is no evidence to support the Applicants’ position that the PRP delayed laying the charges as part of a strategy to ensure the Applicants drained their funds in defending the OSC matter thereby leaving them unable to retain funds to retain counsel to represent them in the criminal proceedings or to retain an expert witness. These are assertions made by the Applicants without any supporting evidence. There is no evidence, for example, that PRP had any information regarding the Applicants’ financial position and whether they could or could not afford counsel.

[70] It is not the length of the delay that is relevant under s. 7 but rather the effect of that delay on trial fairness. There is no evidence that the effect of the delay will have any impact on trial fairness. The Applicants did not present any evidence that, for example, witnesses are not available that otherwise would have been had there been a more expeditious laying of charges. For these reasons, the s. 7 motion to stay proceedings due to pre-charge delay is dismissed.

(ii) Solicitor-client Privilege

[71] The Applicants allege that the disclosure obtained as part of the search warranted that was executed contained documentation protected by solicitor-client privilege. Although the search warrant was executed on October 15, 2013, it was not until February 2015 that the Crown identified concern that documentation protected by solicitor-client privileged could have been seized.

[72] It is not disputed that an email was referred to at the bail hearing on October 22-24, 2013 which was exchanged between Ms. Vuong and her lawyer at the time. That email is now part of the material that was sealed by court order on March 31, 2015. There was no determination made at the bail hearing if that document was governed by solicitor-client privilege.

[73] On February 11, 2015, Crown counsel directed Constable Jackson to review the disclosure and remove any documentation that could be protected by solicitor-client privilege. On her own initiative, Constable Jackson identified some letters that she thought might be caught by the crime exception to solicitor-client privilege. According to that exception, privilege will not protect communications that are criminal in themselves or that are intended to obtain legal advice to facilitate the commission of a crime. Constable Jackson did not seek guidance from the Crown. Her source of information was an on-line article published by Legaltree.ca.

[74] The Crown is unaware of the contents of the documents that have been sealed by court order, other than the email referenced in the transcript at the bail hearing. Furthermore, regardless of the contents of the sealed envelope, whether protected by solicitor-client privilege or not, the Crown will not be relying on any of that disclosure.

[75] According to the Applicants, the conduct of PRP in contacting Fogler Rubinoff and the filing of a complaint with the Law Society was reckless and resulted in the loss of the Applicants’ corporate counsel and further impeded their ability to conduct business and their ability to retain corporate legal representation. The Applicants did not present any evidence that the documentation that was possibly protected by solicitor-client privilege, had been in any way used by the Crown in the course of these proceedings, other than the one email identified at the bail hearing. No evidence was led that the documentation was used in the investigation, other than contacting Fogler Rubinoff and the Law Society over concerns of a lawyer’s conduct.

[76] On an application for abuse of process, the court is concerned with trial fairness and the integrity of the justice system. The issue is not what impact the alleged conduct had on the Applicants’ business affairs but on their ability to receive a fair trial.

[77] If the contents of the sealed envelope does not contain privileged documentation, there would be no basis to assert an abuse of process due to the Crown’s and PRP’s conduct in dealing with solicitor-client privileged documentation. If the documentation is in fact privileged then prejudice to the Applicants will be presumed. The presumption is, however, rebuttable. (R. v. Bruce Power Inc. [2009] O.J. No. 3016, 2009 ONCA 573, 254 O.A.C. 335, 245 C.C.C. (3d) 315, 98 O.R. (3d) 272 at para. 55.

[78] The Applicants and Crown agree that this court should unseal the documents and review them to determine if they are documents protected by solicitor-client privilege. I am not inclined to do so.

[79] A determination as to whether or not a communication is governed by solicitor-client privilege may require submissions if, in fact, there is a dispute as to whether or not the privilege attaches. Furthermore, Bruce Power is distinguishable as in that case, the Crown had in its possession a copy of an investigation report that was governed by solicitor-client privileged and the Crown intended to tender the report in evidence at trial. In these proceedings, regardless of the contents of the sealed envelope, the Crown does not intend to rely on any of the documents and, in addition, has no knowledge of the contents subject to the exception listed above.

[80] For the purpose of this analysis, therefore, I will proceed on the assumption that the documents that were seized and are sealed are governed by solicitor-client privilege and hence prejudice to the Applicants is presumed.

[81] I am satisfied, however, that the presumption has been rebutted. Other than the email from the bail hearing, which the Crown will not be tendering as evidence at the trial, the Crown is unaware of the contents of the file and has not learned anything from the documents.

[82] Solicitor-client privilege is of fundamental importance in criminal proceedings. In this case, the breach of the Applicants’ solicitor-client privilege was inadvertent when it seized the documents upon execution of the search warrant. Extensive steps were taken by Constable Jackson to vet the file and remove any potential documents protected by privilege immediately once the issue was identified by the Crown. The Crown does not seek to use the evidence in any way. Even if the presumption was not rebutted, a stay of the charges is not warranted. As the documents will not be used at trial, there is no evidence of any trial unfairness to the Applicants.

[83] In considering the second or residual category, I do not find that the Crown’s conduct of using an email at the bail hearing or of PRP contacting the Law Society and Fogler Rubinoff regarding concerns of possible fraudulent behaviour of a lawyer is conduct that is so offensive to societal notions of fair play and decency that a stay should be granted. This is not conduct that shocks the conscience and is disproportionate to the societal interest in the effective prosecution of this criminal case.

[84] If the conduct does offend society’s sense of fair play and decency, there is a remedy short of a stay to redress the prejudice which is that the documentation not be relied upon at trial, which the Crown has already agreed to do.

[85] In order for Crown conduct to constitute an abuse of process, it must be egregious Crown conduct, not just misconduct, which tarnishes the integrity of the judicial system. (R. v. Hunt 2016 NLCA 61, [2016] N.J. No. 372 at para 80, aff’d in 2017 SCC 25, [2017] S.C.J. 25) The Crown’s change in his position on sentencing at the pre-trial stage and not consenting to the request for a second adjournment of the trial when Ms. Vuong’s mother was terminally ill is not egregious Crown conduct. It is not conduct that tarnishes the integrity of the judicial system. While it would have been upsetting and difficult for Ms. Vuong to be facing a trial at the time her mother was terminally ill, the Crown’s conduct in not consenting to the adjournment does not reach the level of egregious conduct which constitutes an abuse of process.

[86] For these reasons, I find that the motion to stay the proceedings due to police and crown conduct is dismissed.

Evidence of Anthony Long

[87] Mr. Long was retained by the PRP in July 2016 to do the following:

1. Review the relevant evidence gathered to date by Peel Regional Police

2. Prepare a “Source and Application of Funds” Analysis

3. Calculate total investments losses, if possible

4. Prepare a report on Factual Findings

5. Provide support in preparation for trial

6. Testify at trial

[88] According to Mr. Long’s resume, he is a Senior Forensic Accountant with the OSC Joint Serious Offences Team. He has 20 years of experience as a forensic accountant. He has worked at the OSC since 2010. He prepared a report dated January 5, 2017. The Crown intends to call Mr. Long as a fact witness on the basis that he will not be giving any opinion evidence as an expert.

[89] The Applicants oppose the Crown calling Mr. Long as a witness at trial on the basis that he is in a conflict of interest and his evidence is biased given his employment with the OSC, who may still commence proceedings against the Applicants, depending upon the outcome of the criminal proceedings.

[90] Allegations of bias or conflict of interest of a witness is not a basis to disallow a witness from giving evidence at trial. Those issues, can, however, be explored by the Applicants during cross-examination. Mr. Long can, therefore, be called as a witness at trial.

[91] The issue before the court is whether Mr. Long can be called as fact or expert witness. In R. v. A.K, 1999 CanLII 3793 (ON CA), [1999] 125 O.A.C.1, the court stated at para. 71 that witnesses testify as to facts and, as a general rule, they are not allowed to give any opinion about those facts. It is only when the trier of fact is unable to form his or her own conclusions, without help, that expert opinion may be admitted as an exception to the opinion rule. The expert’s function is to provide the tier of facts with a ready-made inference from the facts which the judge and jury are unable to do due to the nature of the facts. At para. 72 the court noted that the line between fact and opinion must be kept in mind as a witness, who is an expert in a field, may be called to give evidence on the facts that he or she observed without offering an opinion based on those facts. If the witness was to give an opinion on certain facts then the opinion rules comes into play.

[92] In R. v. Hamilton 2011 ONCA 399, [2011] O.J. no 2306 (Ont. C.A.) aff’d [2011] S.C.C. 547, the court heard evidence from cellphone service provider employees who explained the principles that can be used to determine the proximity of cellphones to the cellphone towers that are relaying those calls. The court found that the evidence was factual evidence which the witnesses were qualified to give because of their knowledge, observations and experience. The court found that it was not opinion evidence. The court also found that their evidence was probative and understandable. At para. 279 the court noted that at one time this evidence could have been considered expert opinion evidence but that it was now factual that witnesses with their knowledge and experience can testify about. They were testifying about the uncontroversial facts related to the operation of cell phone networks. As the court noted, they were not proffering a novel scientific or behavioural theory that was open to debate.

[93] I have reviewed the report prepared by Mr. Long. It is a very detailed report reviewing numerous transactions that occurred in a number of accounts held by the Applicants and Systematech involving a number of different investment tools. I do not agree with the Crown that Mr. Long’s evidence will be limited to only tracing the flow of funds that went in and out of these accounts. His evidence is relevant, material and admissible but he must be qualified, at trial, as an expert to give that evidence.

[94] Mr. Long is not merely a fact witness. In his report, he makes findings, for example, that payments to investors could only have been funded by other investor deposits. That is an opinion. He also opines that the trading was speculative and not profitable. Those are also conclusions made based on his review of the underlying facts and not just a resuscitation of the facts based on his experience and knowledge as a forensic accountant.

[95] In R. v. Khan, 2014 ONSC 5664, Code, J. at para. 91 held:

Opinion evidence from a qualified forensic accountant is commonplace in large complex fraud prosecutions. The form that the opinion takes is often a series of charts or summaries or spread-sheets that sum up the effect of a mass of underlying business records. It is simply impractical to expect the trier of fact to engage in a time consuming analysis of each underlying document and so the assistance of an expert is necessary. As with any expert opinion, its weight depends on proof of the underlying facts/documents on which the expert relies. Accordingly, the better practice is for the Crown to tender the underlying documents in evidence, together with the expert’s opinion, so that they are available for cross-examination and so that the expert is not relying on hearsay.

[96] I was not provided with any authority for the proposition that in a matter involving fraud in which a forensic accountant is necessary to trace the flow of funds that such a witness can be called a fact witness only. As stated by Justice Code, opinion evidence from a qualified forensic accountant is common in these types of matters. The assistance of an expert is necessary to the trier of fact.

[97] This matter involves a complex web of investments and trading of various types of securities such as options, the buying and selling of currencies (FX trading) and the leveraging of funds. The allegation is that over $5 million has been lost by fourteen individuals. This matter involves facts far more complex than the operation of cell phone towers. Given the complexity of the issues, the jury will require the assistance of an expert who can provide opinion evidence regarding the nature of the investments and financial transactions involving the Applicants and the fourteen complainants.

[98] Mr. Long may be called as a witness at trial but he must be qualified as an expert to provide his opinion evidence.

[99] Given my finding regarding the documents that are currently sealed by way of a court order, I invite the Applicants and the Crown to make further submissions with respect to whether the documents should remain sealed or should be unsealed and returned to the Applicants.

L. Shaw J.

Released: May 29, 2018

COURT FILE NO.: CRIM 1348/15

DATE: 2018 05 29

ONTARIO

SUPERIOR COURT OF JUSTICE

HER MAJESTY THE QUEEN

– and –

APRIL VUONG and HAO QUACH

REASONS FOR JUDGMENT

L. Shaw J.

Released: May 29, 2018