COURT FILE NO.: CRIMJ(P) 271/13
DATE: 20181001
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN
M. Morris, Counsel for the Crown
- and -
STEPHAN HEADLEY
A. Baratz Counsel for Stephan Headley
REASONS FOR RULING
(RE: APPLICATION TO ADMIT EVIDENCE OF SIMILAR ACTS FROM DIFFERENT COUNTS)
BARNES J.
INTRODUCTION
[1] Stephan Headley is charged with six counts of fraud over $5000, contrary to s. 380(1)(a) of the Criminal Code; one count of personation, contrary to s. 403 of the Criminal Code; and one count of forgery, contrary to s. 368(1)(a) of the Criminal Code.
[2] This is a jury trial. On consent, the Crown has made an application at the conclusion of all the evidence in the trial. The Crown seeks to apply similar fact evidence specific to certain counts, involving different complainants, to other counts on the indictment, to prove that Stephan Headley committed the other offences.
[3] The Crown application is in relation to two groups of charges. Group 1 includes Count 1 - Fraud over $5000 (GIC), complainant Deborah Lo; and Count 4 - Fraud over $5000 (RRSP), complainant Glenford Jones. Group 2 includes Count 3 - Fraud over $5000 (Gametronics), complainant Deborah Lo; and Count 5 - Fraud over $5000 (Gametronics), complainant Glenford Jones.
[4] In the course of submissions, the defence conceded the Crown’s application with respect to Group 2, and I granted the Crown’s application. I dismissed the Crown’s application with respect to Group 1. These are my brief reasons.
BACKGROUND
[5] It is the Crown’s theory that in 2005, Stephan Headley: a) defrauded Deborah Lo of $350,000 dollars by persuading her to invest in three fraudulent schemes; b) defrauded Glenford Jones of an amount just under $50,000 by cashing in Glenford Jones’ RRSP and persuading Glenford Jones to invest in a fraudulent scheme; c) impersonated Glenford Jones to obtain a line of credit and credit cards from Scotiabank; and, d) uttered a forged document in support of an application to obtain credit from Scotiabank.
ANALYSIS
Relevant Legal Principles
[6] As a general rule, all relevant evidence is admissible unless there is a legal or policy-based reason to exclude it: Morris v. The Queen, 1983 CanLII 28 (SCC), [1983] 2 S.C.R. 190 at p. 201, per Lamer J. (as he then was). On a multi-count indictment, evidence on one count is not admissible as evidence on another count: R. v. Brown, 2007 ONCA 71, 216 C.C.C. (3d) 299 at para. 13; R. v. F., 2006 NSCA 42, 212 C.C.C. (3d) 134 at para. 26.
[7] Evidence of an accused’s similar acts is presumptively inadmissible because it can lead the trier of fact to reason that since the accused committed the prior discreditable act, she has a propensity to commit the alleged acts that constitute the offence under consideration. This propensity evidence relates only to the general disposition and character of the accused. In such circumstances the prejudicial effect of admission outweighs any probative value of admission: Regina v. McNamara (No. 1) (1981), 1981 CanLII 3120 (ON CA), 56 C.C.C. (2d) 193, [1981] O.J. No. 3254 (Ont. C.A.) at p. 285 (leave to appeal refused [1981] 1 S.C.R. xi, 1981 CanLII 3394 (SCC), 56 C.C.C. (2d) 576n).
[8] Thus, evidence of similar acts is presumptively inadmissible unless the evidence is relevant to prove a purpose other than general disposition or character, for example, to show a plan, scheme, system, design, intention, state of mind, knowledge, motive, to rebut innocent intent, mistake: R. v. Downey, [2002] O.J. No. 2228 at para. 315.
[9] The admissibility of evidence is always subject to an analysis of its probative value versus its prejudicial effect. Factors favoring admission include: the degree of similarity of the acts; the temporal connection of the acts to the offence; the number of similar acts; any distinguishing features, and the similarity of the circumstances. Factors favoring the exclusion include: the potential for distracting the trier of fact; the potential of consuming inordinate court time; the extent to which the evidence is prejudicial and whether there is other less prejudicial evidence to prove the same point: R. v. Handy, 2002 SCC 56, [2002] 2 S.C.R. 908 at paras. 82-83.
Discussion
a) Counts 3 and 5 (Gametronics)
[10] Stephan Headley is accused of defrauding Deborah Lo and Glenford Jones of thousands of dollars by persuading them to invest in a company called Gametronics and diverting the money for his own purposes.
[11] Mr. Jones and Ms. Lo testified that Mr. Headley, in his capacity as their financial advisor, told them that Gametronics was a good investment. Both Mr. Jones and Ms. Lo said Mr. Headley told them to expect significant monthly returns and told them to make the cheques out to one of his companies. Both testified that there was no contract or other documentation in regards to the investment.
[12] The evidence reveals a distinctive pattern and modus operandi. Both Ms. Lo and Mr. Jones testified that within a few days Mr. Headley told them that he was having legal trouble in regards to the investments and he would be taking legal action to recover the monies lost. Both victims were close to Mr. Headley and are alleged to have relied on him for financial advice.
[13] Prior to advancing funds, Ms. Lo and Mr. Headley met Mr. Minchella and subsequently the CEO of Gametronics to discuss the investments. Mr. Jones had no such meetings prior to advancing the funds.
[14] There is a high degree of similarity in the acts, a close temporal connection to the offence, and a distinctive modus operandi. The differences described are not significant. The factual matrix is straightforward and admission will not distract the trier of fact or extend court time. The evidence is relevant to issues of planning, the scheme, system, design, intention, state of mind, knowledge, and motive and to rebut innocent intent. On balance, the probative effect of admission of these similar acts between counts 3 and 5 outweighs any prejudicial effects.
b) Counts 1 and 4 – Deborah Lo’s GIC and Glenford Jones’ RRSP
[15] Ms. Lo testified that Mr. Headley was her financial advisor. She said she trusted Mr. Headley and she made monthly contributions to her RRSP in accordance with Mr. Headley’s suggestions. Ms. Lo said that in 2004 Mr. Headley was no longer licensed to sell mutual funds and he began to speak to her about other investment opportunities.
[16] Ms. Lo said that Mr. Headley told her about a GIC investment and said he could get her a higher rate of return. Ms. Lo said she gave Mr. Headley $150,000 to invest in a GIC. Ms. Lo said Mr. Headley told her to make the cheque out to Laers Inc. She said that Mr. Headley told her that Laers Inc. was his company. She wrote a cheque dated April 23, 2005, to Laers Group in Trust for $150,000. She said she gave this cheque to Mr. Headley and received a confirmation of investment in the mail.
[17] Glenford Jones testified that Stephan Headley is his younger brother. Mr. Jones said Mr. Headley volunteered to do his 2003 taxes for him. Mr. Jones said that in 2003, he lived at 7 Pritchard Avenue in Toronto. He said Mr. Headley was his financial advisor at that time. He said he trusted Mr. Headley with his life at that time.
[18] Mr. Jones said he was in the heating and air conditioning business. Mr. Jones said Mr. Headley introduced him to, and talked him into investing in an RRSP. Mr. Jones said that in 2004, Mr. Headley told him that he was working in a new company and he asked Mr. Jones to transfer Mr. Jones’ RRSP to the new company. Mr. Jones said he agreed.
[19] Mr. Jones said when he checked his 2003 income tax statement he noticed that his RRSP had been reported as part of his 2003 income. He said this meant that his RRSP had been cashed and not transferred. Mr. Jones said he spoke to Mr. Headley about it. Mr. Jones said the RRSP was for his first home; Mr. Headley said it was about $19,000 and he would look into it for him. Mr. Jones said Mr. Headley did not do this. Mr. Jones said he never got a house. Mr. Jones said he signed a document for Mr. Headley to transfer the RRSP not to cash it out, unless the document Mr. Headley asked him to sign was misleading. Mr. Jones said he never did his own income tax returns.
[20] This evidence is relevant to address issues of planning, the scheme, system, design, intention, state of mind, knowledge, motive and to rebutting innocent intent.
[21] The similarities between these counts include the alleged abuse of close personal and professional relationships to defraud. However, there are several differences. Crucially, this includes the method of the alleged defrauding. Thus, the acts do not have a sufficient degree of similarity to warrant admission as similar acts; admission will distract the trier of fact and lead them down the path of propensity reasoning. Applying the Handy criteria, the evidentiary cross-pollination of evidence between counts 1 and 4 will be highly prejudicial. The prejudicial effect of admission far outweighs any probative value. The Crown application in relation to counts 1 and 4 is dismissed.
_____________________
Barnes J
Released: October 1, 2018
COURT FILE NO.: CRIMJ(P) 271/13
DATE: 20181001
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN
- and -
STEPHAN HEADLEY
REASONS FOR RULING
BARNES J
Released: October 1, 2018