COURT FILE NO.: CR-17-344
DATE: 2018 12 13
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
Harutyn Apel, for the Crown
- and -
SHUAIB SHAFI
Michael McLachlan and Jack Gemmell, for Shuaib Shafi
HEARD: November 5, 2018
REASONS FOR RULING (DIRECTED VERDICT)
Coroza J.
[1] Shuaib Shafi is being tried by a jury on fraud-related charges. At the close of the Crown’s case, Mr. Shafi brought a directed verdict application with respect to some of the fraud-related counts, namely: Count 1 (re: Nishan Dulay); Count 5 (re: Sunny Mago); Count 6 (re: Faheem Naqvi); Count 7 (re: Gurmail Nirman); Count 8 (re: Kashif Rajput); and Count 12 (re: Sahar Ullah.
[2] The Crown concedes that I should grant the application with respect to Count 5 (re: Sonny Mago). I therefore grant the application with respect to that count.
[3] Despite Mr. Gemmell’s concise and able submissions, I dismiss the application with respect to Counts 1, 6, 7, 8, and 12.
Overview
[4] Central to this case is an allegation that Mr. Shafi defrauded a number of complainants of large sums of money by convincing them to provide him money with a promise of a large return. In some cases, the complainants were promised double or triple of what they had invested. Some of the complainants provided cash or bank drafts. Some of the complainants provided the money directly to Mr. Shafi, while others went through a third party. In some cases, a third party was asked to find other investors. These third parties are also complainants in this case (specifically Mabel Irani, Gurpreet Lail, and Nasser Khan).
[5] The offences are alleged to have occurred between 2010 and 2014. The Crown alleges that Mr. Shafi would often convince complainants to take out bank drafts to BBuckswood Productions, a company owned by Mr. Shafi and apparently involved in the film industry. Further, the Crown has alleged that Mr. Shafi portrayed himself to some of the complainants as an employee of the Canadian Security Intelligence Service (CSIS), a law enforcement agent, a government employee, and/or a financial investor.
[6] The Crown alleges that the money received by Mr. Shafi was used for his own personal use.
The Legal Test Applicable to a Directed Verdict
[7] The parties do not dispute the legal test that a judge must apply on a directed verdict application. That test is the same as the one applied when a judge decides whether to order committal following a preliminary inquiry. The ultimate question is whether there is any evidence upon which a properly instructed jury that is acting reasonably could return a verdict of guilty: see United States of America v. Shephard, 1976 CanLII 8 (SCC), [1977] 2 S.C.R. 1067, at p. 1080; and R. v. Monteleone, 1987 CanLII 16 (SCC), [1987] 2 S.C.R. 154, at p. 160. There must be evidence, direct or circumstantial, that is capable of proving each element of the offence.
[8] When assessing a directed verdict application, the trial judge does not normally engage in the weighing of evidence. However, where the Crown relies upon circumstantial evidence to prove an element of an offence, the judge’s task is more nuanced and a “limited weighing” of the evidence is required. As stated in R. v. Arcuri, 2001 SCC 54, [2001] 2 S.C.R. 828, at para. 23, in such cases “[t]he judge must therefore weigh the evidence, in the sense of assessing whether it is reasonably capable of supporting the inferences that the Crown asks the jury to draw.”
[9] Recently in R. v. Kelly, 2017 ONCA 920, 138 O.R. (3d) 241, at para. 19, the Court of Appeal reaffirmed that on a directed verdict application:
[T]he trial judge does not make findings of fact or credibility, but considers whether a reasonable jury, properly instructed, could, on the entirety of the evidence, favourable and unfavourable to the accused, conclude that the Crown has established guilt. The trial judge must view the evidence in the reasonable light that is the most favourable to the Crown…. [Emphasis added.]
Analysis
Count 1 (Nishan Dulay), Count 6 (Faheem Naqvi), and Count 7 (Gurmail Nirman)
[10] Mr. Gemmell advances the same arguments with respect to Counts 1, 6, and 7, as follows.
Nishan Dulay and Gurmail Nirman
[11] Nishan Dulay and Gurmail Nirman are friends. They gave evidence that they provided bank drafts to another complainant, Gurpreet Lail, in reliance on Mr. Lail’s representations that he would hold onto the drafts they provided, that they would not be cashed, and that he would be responsible for repayment if anything went wrong. All three men are involved in the trucking industry.
[12] Mr. Nirman initially provided Mr. Lail with a $100,000 bank draft but almost immediately had a change of heart and asked for it back. However, based on assurances by Mr. Lail, Mr. Nirman gave Mr. Lail a second draft. According to Mr. Nirman, half the funds within these bank drafts came from Mr. Nirman and half from Mr. Dulay. Mr. Dulay confirms this.
[13] Mr. Nirman gave Mr. Lail a third bank draft for $50,000. Both Mr. Nirman and Mr. Dulay provided Mr. Lail with additional bank drafts for $70,000 and $130,000, respectively.
[14] All drafts were made out to BBuckswood as per Mr. Lail’s instructions.
[15] It turns out that all of these bank drafts were deposited into the BBuckswood business account either on the same day or within a few days of their being provided to Mr. Lail. Mr. Nirman and Mr. Dulay later learned that contrary to Mr. Lail’s promise, the bank drafts had been negotiated.
[16] Mr. Gemmell argues that to constitute fraud, a complainant must rely on the defendant’s misrepresentation in advancing the funds. In other words, there must be some evidence that Mr. Shafi caused the deprivation based on something he did. He relies on the following cases: R. v. Kelly, 2014 BCSC 358; R. v. Park, 2010 ABCA 248, 482 A.R. 153, at paras. 14, 29; and R. v. Winning (1973), 1973 CanLII 1408 (ON CA), 12 C.C.C. (2d) 449 (Ont. C.A.).
[17] Counsel argues that the evidence is that Mr. Nirman and Mr. Dulay relied on Mr. Lail’s representations and assurances, not Mr. Shafi’s.
[18] I do not find this argument to be persuasive for the following two reasons.
[19] First, in my view, there is direct evidence from both men that Mr. Shafi made direct representations to each of them about investing. Mr. Nirman testified that before he provided any money to Mr. Lail, he first met Mr. Shafi and other individuals at a Tim Hortons restaurant. Mr. Shafi at that point stated that he was a CSIS agent and that if Mr. Nirman invested, he could get double and triple returns. According to Mr. Nirman, Mr. Shafi indicated that there was a surplus of money in the government and that the return on his investment would come from that surplus. According to Mr. Nirman, that is what caused him to invest the $100,000 draft made out to BBuckswood.
[20] It is true that Mr. Nirman acknowledged a change of heart and asked for it back. It is also true that he was persuaded by Mr. Lail to go through with the investment based on Mr. Lail’s assurances. However, in my view, this evidence should not be viewed in isolation. The jury will have to consider the entire body of evidence.
[21] It is my respectful view that Mr. Gemmell’s argument ignores the fact that the jury could accept Mr. Nirman’s evidence that Mr. Shafi attended his office after he had already provided the drafts to Mr. Lail to assure him that the investment was going well. In my view, the jury can examine this body of evidence, rely on it, and find that Mr. Shafi caused the deprivation. Indeed, his representation that everything was fine could be seen by the jury as a misrepresentation capable of causing a risk of deprivation.
[22] Equally, Mr. Dulay testified that he met Mr. Shafi at Mr. Nirman’s office, and Mr. Shafi told everyone at that meeting that if they invested through him, the investment would double. According to Mr. Dulay, this initial meeting was in September 2012 and the first return on the investment was due in December 2012. Following this meeting, Mr. Dulay invested money through drafts to BBuckswood on September 22, 2012, and October 22, 2012.
[23] Again, Mr. Dulay also testified that after he had provided his bank drafts in or around January 2013, Mr. Shafi met with Mr. Dulay and others. Mr. Dulay testified that they were becoming concerned about delay and they therefore asked Mr. Shafi about the delay in paying out the returns. Mr. Shafi promised the group that the money would come back. Again, the jury could accept this body of evidence as showing that Mr. Shafi caused the deprivation by a misrepresentation.
[24] Second, there is a connection between the bank drafts that were given to Mr. Lail and Mr. Shafi: the drafts were made out to BBuckswood. I think the jury would have to consider this important point. Although the jury could accept that Mr. Lail was holding the cheques, the fact remains that it is not disputed that these men made out the bank drafts to BBuckswood. There has been evidence called in this trial that BBuckswood is Mr. Shafi’s film company.
[25] While the inference to be drawn is indirect, it is nonetheless available. When I consider this fact alongside other evidence led by the Crown, that inference is that both men knew they were providing money to Mr. Shafi, but Mr. Lail was holding these cheques for him and Mr. Lail was guaranteeing the success of the investment with Mr. Shafi.
[26] In conclusion, both men have testified that the very nature of the investment was that they were asked to invest in Mr. Shafi’s company. Mr. Shafi asked them to do this. Even if the jury accepts the evidence that these complainants were told that their drafts would not be cashed by Mr. Lail, it is irrelevant. The evidence is that the men were told that the bank drafts were required. It appears that the bank drafts were designed to make the investment more attractive to these men and induce them to invest. The jury could find that they were asked to provide drafts, which caused a risk of deprivation.
[27] Finally, in my view, Mr. Shafi’s initial meetings with these men and his subsequent meetings with them demonstrate that he was involved in an act of deceit, falsehood, and dishonesty that deprived these men of money.
Faheem Naqvi
[28] Mr. Gemmell makes an identical argument in relation to Count 6. Mr. Gemmell argues that Faheem Naqvi’s evidence is that he relied upon and trusted his friend, Nasser Khan, when advancing money. Nasser Khan is also a complainant in this trial.
[29] According to Mr. Naqvi, he met Mr. Shafi through Mr. Khan. Both men met him at a Tim Hortons restaurant. I think it is fair to say that Mr. Naqvi’s evidence is that Mr. Khan did all the talking. However, Mr. Shafi was present. After this meeting, Mr. Naqvi obtained a bank draft for $30,000 on September 21, 2012, payable to BBuckswood. He was told that Mr. Shafi would pick it up.
[30] Mr. Shafi then came by the next day and picked up the draft. The draft was negotiated. Mr. Naqvi repeatedly contacted Mr. Khan about his investment, only for Mr. Khan to offer assurances about that investment.
[31] Mr. Gemmell argues that there is no evidence that Mr. Shafi caused any deprivation to Mr. Naqvi.
[32] Again, I am not persuaded by Mr. Gemmell’s argument.
[33] First, it is open to the jury to find that Mr. Shafi adopted any comments made by Mr. Khan in his presence at the Tim Hortons restaurant. Mr. Khan was not talking about investing with himself. According to Mr. Naqvi, the purpose of the meeting was to meet Mr. Shafi and invest with Mr. Shafi. It seems to me that the jury could look at Mr. Shafi’s conduct at the Tim Hortons and find that he was adopting Mr. Khan’s statements made in his presence even though he was silent during the exchange: see David Watt, Watt’s Manual of Criminal Evidence (Toronto: Thomson Carswell, 2013), at para. 36.04. The fact that Mr. Shafi picked up the cheque personally after the meeting cannot be isolated from his conduct at the Tim Hortons and speaks volumes about what his intentions were at that first meeting.
[34] Furthermore, the offence of fraud can be committed by “other fraudulent means”. That term can include an omission, including misleading silence about essential matters or non-disclosure of material facts: see R. v. E.(J.) (1997), 1997 CanLII 10605 (QC CA), 117 C.C.C. (3d) 275 (Que. C.A.); and R. v. Lauer, 2011 PECA 5, 269 C.C.C. (3d) 127.
[35] Second, the jury could accept Mr. Naqvi’s evidence that he was specifically told by Mr. Khan in Mr Shafi’s presence that he should invest in a federal government scheme with Mr. Shafi. I agree that he was told what would be done with the money. He was told it was going to Mr. Shafi while Mr. Shafi was present. Although, Mr. Khan was guaranteeing the return, that does not mean that Mr. Shafi did not commit an act of deceit, falsehood, or dishonesty.
[36] In my view, the argument in relation to Faheem Naqvi fails.
[37] I conclude my analysis with respect to Counts 1, 6, and 7 by making the following observations. It seems to me that Mr. Gemmell’s arguments in relation to Mr. Nirman, Mr. Dulay, and Mr. Naqvi focus on whether Mr. Shafi was the cause of the deprivation. Counsel emphasizes the involvement of Mr. Lail and Mr. Khan and the assurances they gave to these men to invest.
[38] However, the law of fraud holds that the proof of fraud does not always depend on showing that the alleged complainant relied on the fraudulent conduct or was induced by it to act to his or her detriment by a specific person. What is required in all cases is proof that there is a sufficient causal connection between the fraudulent act and the victim’s risk of deprivation: see R. v. Riesberry, 2015 SCC 65, [2015] 3 S.C.R. 1167, at para. 22.
[39] Fraudulent conduct for the purposes of this prosecution is not limited to deception, such as deception by misrepresentations of fact. Rather, fraud requires proof of “deceit, falsehood or other fraudulent means”: Criminal Code, R.S.C. 1985, c. C-46, s. 380(1). The indictment in this case has specified “other fraudulent means” as encompassing “all other means which can properly be stigmatized as dishonest”.
[40] It seems to me that the jury could accept Mr. Gemmell’s argument that Mr. Shafi did not directly make representations to the complainants. They can also accept that these complainants relied on other parties such as Mr. Khan or Mr. Lail. Does that mean that there is no evidence that Mr. Shafi did not cause the deprivation? In my view, it does not.
[41] The jury has evidence that Mr. Shafi told Mr. Khan and Mr. Lail that he was a CSIS agent and worked for the government. He directly made these representations to these men. The jury could find these statements are false. The jury could also find that Mr. Shafi encouraged them to find other investors. The jury could also find that Mr. Shafi carried out his intentions by meeting these men after Mr. Lail and Mr. Khan found them. In my view, the jury could find that all of this conduct was dishonest and intended to cause a risk of deprivation to these complainants.
[42] If the jury accepts this evidence, there is a direct causal relationship between Mr. Shafi’s dishonest acts and the risk of financial deprivation to Mr. Nirman, Mr. Dulay and Mr. Naqvi. Provided that a causal link exists, the absence of inducement or reliance directly from any specific statement by Mr. Shafi to these men is irrelevant.
Count 8 (Kashif Rajput)
[43] Mr. Gemmell argues that there is no evidence that Kashif Rajput suffered any deprivation. According to Mr. Rajput, he gave Mr. Shafi $20,000 in cash and then a further $1,700–$1,800 in cash in 2013 based on false misrepresentations.
[44] I reject this argument for the simple reason that proof of actual loss is irrelevant. Proof of risk to the economic interest of the victim is sufficient: R. v. Théroux, 1993 CanLII 134 (SCC), [1993] 2 S.C.R. 5; R. v. Gaetz, 1993 CanLII 82 (SCC), [1993] 3 S.C.R. 645; and R. v. Campbell, 1986 CanLII 35 (SCC), [1986] 2 S.C.R. 376.
Count 12 (Sahar Ullah)
[45] Mr. Gemmell argues that that there is no evidence of deprivation in the case of Mr. Ullah. Mr. Ullah initially advanced $100 to the defendant and after re-investment got back $2,000. He then gave the defendant $10,000 in cash, which Mr. Shafi later returned. However, Mr. Shafi asked for a $10,000 bank draft to be made out to a producer who filmed a music video for him.
[46] Mr. Gemmell argues that Mr. Ullah admitted that he has received numerous payments or benefits from Mr. Shafi, including the following:
• 6 months’ rent to lease a condo;
• Cash to play games at a casino;
• Suits from Harry Rosen; and
• Reduced rents on a basement apartment.
[47] As I understand the argument, if the jury were to take the money spent on Mr. Ullah by Mr. Shafi, they would find that Mr. Ullah actually owes Mr. Shafi and has not been deprived of anything.
[48] I disagree.
[49] I am persuaded by the Crown’s argument that even if we assume Mr. Ullah was eventually paid back the money he invested, it does not automatically negate the fact that a fraudulent act occurred.
[50] First, the jury could accept Mr. Ullah’s evidence that the money spent on him was for the purpose of ensuring that he looked successful. It was his evidence that Mr. Shafi used him as bait to lure other investors into investing with Mr. Shafi.
[51] Second, the jury could accept Mr. Ullah’s testimony that Mr. Shafi told him that an investment of $10,000 would yield a return of 2 million dollars, as long as a tax clearance letter was signed.
Conclusion
[52] Thus, the offence of fraud can capture a number of fact situations. This observation may become relevant if a similar fact evidence application is brought by the Crown at the end of the case. My point is that fraud can be committed by deceit, falsehood, or other dishonest acts. In the end, and considered as a whole, I find that the evidence led by the Crown could reasonably support an inference of guilt in respect to Counts 1, 6, 7, 8 and 12. The directed verdict applications are dismissed for those counts. As noted earlier, the directed verdict application for Count 5 is granted.
[53] I thank counsel for their helpful submissions.
Coroza J.
Released: December 13, 2018
COURT FILE NO.: CR-17-344
DATE: 2018 12 13
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HER MAJESTY THE QUEEN
- and -
SHUAIB SHAFI
REASONS FOR RULING
(DIRECTED VERDICT)
COROZA J.
Released: December 13, 2018