R. v. Hugill, 2019 ONSC 1448

Court File and Parties

COURT FILE NO.: 08/2018 DATE: 20190308 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: HER MAJESTY THE QUEEN – and – Jonathan Hugill, Defendant

COUNSEL: Richard Weatherston, for the Crown Frederick Leitch, for the Defendant

HEARD: January 21 and 22, 2019

Justice R. Raikes

Charges

1The defendant, Jonathan Hugill, stands charged with:

• Stealing cheques belonging to his brother, Jason Hugill, of a value less than $5,000 contrary to s. 334(b) of the Criminal Code.
• On June 19, 2013, defrauding his brother, Jason, of $25,000 by fraudulently signing Jason’s name to a cheque in that amount contrary to s. 380(1) of the Criminal Code.
• On that same date, knowingly using a forged document – the cheque – as if it were genuine contrary to s. 368(1)(a) of the Criminal Code.
• On May 27, 2014, defrauding Jason of $50,000 by fraudulently signing Jason’s name on a cheque contrary to s. 380(1) of the Criminal Code.
• On June 27, 2014, knowingly using a forged document – the cheque for $50,000 – as if it were genuine contrary to s. 368(1)(a) of the Criminal Code.
• On May 22, 2015, defrauding Jason of $20,000 by fraudulently signing Jason’s name on a cheque contrary to s. 380(1) of the Criminal Code.
• On that same date, knowingly using a forged document – the cheque for $20,000 – as if it were genuine contrary to s. 368(1)(a) of the Criminal Code.

General Legal Principles

2There are two fundamental principles that apply to every criminal trial:

a. The presumption of innocence; and b. The requirement that the Crown prove each constituent element of the offence beyond a reasonable doubt to displace the presumption of innocence.

These principles apply regardless of the offence, the accused or the alleged victim.

3A reasonable doubt is one that is based on reason and common sense. It is a doubt that logically arises from the evidence or the lack of evidence. It is not a doubt that is farfetched or frivolous, nor one based on sympathy or prejudice.

4It is not enough that I conclude that Mr. Hugill is probably or likely guilty. That is not proof beyond a reasonable doubt. I must be sure that he committed the offence for which he is charged.

5Because the defendant and complainant in this case have the same last name, I will refer to them in these reasons by their first names for ease of reference. I mean no disrespect in doing so.

Undisputed Facts

6The following facts are undisputed and proven beyond a reasonable doubt on the evidence at trial:

1. Jonathan took three cheques belonging to Jason on three different dates.
2. The cheques were on accounts held by Jason alone.
3. Jonathan had no signing authority on Jason’s accounts.
4. Jonathan filled in the cheques including the amounts.
5. The cheques were made payable to Jonathan.
6. Jonathan signed Jason’s name on each cheque.
7. Jonathan took each cheque to his bank and presented it for payment.
8. The banks honoured the cheques as written and the amounts - $25,000, $50,000 and $20,000 - were withdrawn from Jason’s account and deposited into Jonathan’s account.

There are other facts to which Jason testified with which Jonathan agreed in his evidence, and I will address same later in this decision.

Knowledge and Consent Disputed

7In this case, the critical issue is whether Jason knew and consented to Jonathan taking the cheques, filling them out, signing them and cashing them.

8At trial, Jonathan testified that Jason was aware of, consented to and instructed him to make out the cheques and sign them. The amounts were loans from Jason to Jonathan. The brothers were engaged in a joint farming venture at the time and there was a long history of Jason lending Jonathan money from time to time.

9Jason testified and denied that he was aware of the cheques until after Jonathan commenced a civil action against him in 2016. He denied that he consented to or authorised Jonathan to make out the cheques or sign his name to them. He agrees that he helped Jonathan with loans but, in each case, he made out the cheque to Jonathan.

W.D. Principles

10This is a case of conflicting accounts between the two principal parties – a “he said//he said” scenario.

11The seminal case of the Supreme Court of Canada in R. v. W.D., [1991] 1 S.C.R. 742 provides an analytical framework for the assessment of evidence in these circumstances. It is not a matter of merely picking one story or the other to believe. I must consider their respective versions in the context of the whole of the evidence including the evidence of the other. I am entitled to accept all, none or part of any witness’ evidence including that of Jonathan and Jason.

12If I believe Jonathan’s evidence that he acted with Jason’s knowledge and consent, I must acquit him. Similarly, if, on consideration of the whole of the evidence, I am unable to determine who to believe, I must find Jonathan not guilty because the Crown will have failed to prove his guilt beyond a reasonable doubt.

13Even if I do not believe Jonathan’s evidence, if it leaves me with a reasonable doubt about his guilt or about an essential element of the offence, I must find him not guilty.

14If Jonathan’s evidence does not leave me with a reasonable doubt and I do not believe it, I must then consider whether, on the basis of all of the evidence that I do accept, I am convinced beyond a reasonable doubt of the guilt of the defendant. Only then can I convict; otherwise, I must find him not guilty.

Brothers and Farming

15As I mentioned, Jonathan and Jason are brothers. They grew up in a farming family. Both started farming soon after finishing high school. At first they farmed with their older brother, Douglas, but, by the time period in question here (2013-2015), they were farming together without Douglas. Jason is the youngest of the three brothers.

16Each brother purchased land from their father. Jonathan and Jason’s home farms were located on Kimberley Line in Huron County directly across the road from one another. Both owned their own farm equipment. Jonathan’s property had a shop for equipment repairs. That shop had a table and chairs at one end that was used from time to time for meetings between them.

17The two brothers worked together to farm their properties and lands rented from others. They rented approximately 3,500-4,000 acres which they cash cropped. Leases were typically in both their names and each separately paid one-half of the rent.

18They also shared expenses 50-50, with suppliers giving each an invoice for one-half of the bill. They paid those bills by cheques drawn on their respective accounts. Both were in the habit of putting the amount of the GST/HST on the memo line of the cheque to make it easier to track for quarterly HST filing.

19Jason agreed in cross-examination that, on occasion, a bill would be paid entirely by one brother. In that case, the other would have to pay his share to the paying brother.

20They sat down and discussed what crops would be planted on which lands. They rotated crops from year to year as part of good agricultural practice. They planted soybeans, corn, winter wheat and white beans. Winter wheat was planted and harvested first. It was usually taken off from mid-July to the end of that month. Corn and beans matured later and were harvested in October, November and December. In some years, that harvest extended into January.

21They divided the work to be done between them. Jonathan would prepare the ground for planting and Jason would plant within a day or two after, weather permitting. Jonathan then did the spraying. At harvest time, they might be working the same or different fields to get the crop off. The operation required close coordination and communication.

22Like most farmers, they worked long hours especially at planting and harvest times. It was not uncommon for Jason to be working to midnight or later. The evidence indicates that frequently, they were working different farm properties miles apart. The farms leased were spread out, some as far away as 40 minutes travel by car from their home farms.

23At harvest time, the crop was sold to a grain elevator. The drivers and elevators knew to divide the monies payable in half and pay each their 50% share. Thus, they got separate cheques for their share of the crop proceeds which they deposited into their own bank account.

24Each brother had his own HST number, bank accounts, lines of credit and account with Agriculture Commodity Corporation (ACC). ACC was described by Jason as a kind of credit union for farmers in Ontario. It is operated by the Ontario government.

25Each brother financed his share of the farm operation through ACC and lines of credit with their respective financial institution. This is not a case where the parties pooled their monies in one joint account or shared joint lines of credit.

26ACC finances by way of two separate advances. The first advance is in late April, early May. An application is submitted in March before any planting is done. The farmer completes an application which includes a planting plan. The loan is based on the plan submitted and the formula at ACC.

27Each brother made a separate application to ACC. They decided together what would be planted and coordinated their respective plans to cover their planting for that year. This required cooperation and discussion.

28The second phase of ACC financing takes place after the crops are planted. Crop insurance was required by ACC as a precondition to the second advance. Thus, it was essential to track what was planted, where, when and how many acres. Jason did the planting. He maintained a planting ledger/journal which he kept in the tractor. He input the date, the farm, the crop planted and the number of acres planted that day. This information was critical to getting the necessary crop insurance.

29The second advance from ACC is received at the end of June, early July. The amounts borrowed from ACC were supposed to be repaid each year when the crop was taken off. If a farmer failed to repay that year’s advances from ACC, he or she would not be eligible to borrow for the next year’s crop.

30In 2013, the brothers had 4-5,000 acres under tillage. Each had loans from ACC of approximately $700,000/year. In addition, each brother had their own banking arrangements. In 2013, Jason banked with Libro Credit Union. Jonathan banked with the Royal Bank of Canada (RBC). Each had credit facilities available to them through those lenders; however, Jason had the larger line of credit.

31In 2015, Jason decided to get into chicken farming. He changed lenders to National Bank and secured a significantly larger line of credit in order to purchase quota and to construct the barns for the chicken operation.

32Jonathan did not go into the chicken farming business; in fact, he got out of the farming venture with Jason in 2016 after he spent roughly six weeks in hospital related to his bipolar disorder. He sold his home farm to Jason. Two other farms owned by him were sold by Toronto Dominion Bank under mortgages that were in default.

33Before his hospitalization, Jonathan and Jason made a list of Jonathan’s equipment with values or prices for same. There was no signed agreement to sell the equipment to Jason but Jason purchased same at the prices set through Jonathan’s wife who held his power of attorney. The payment for the equipment was spread out over time. That transaction is part of the civil litigation between them.

34In cross-examination, Jason agreed that the two brothers helped one another by loans back and forth when one of them was getting close to the limit of his line of credit. Most of the loans were from Jason to Jonathan who was in financial difficulty throughout most of 2013 through 2016. The records filed in evidence show some repayments by Jonathan; however, by June 2016, he was indebted to Jason for more than $328,000.

35According to Jonathan, he and Jason sat down at the shop at least twice a year to go over the finances for their operation including how much was owed by him. They brought their bank statements and copies of cheques.

36Jason agreed they had such meetings earlier in their venture; however, they stopped having such meetings by 2013 when Jonathan was battling his mental illness. He testified that his records were compiled and reconciled by his accountant. His financial statements show monies owed by a related party – Jonathan. He denied awareness of the three cheques that are the subject of the charges against Jonathan until November, 2016. He did not go to police until April 2017.

June 19, 2013 Cheque for $25,000

37Jonathan testified that on June 19, 2013, he was spraying a farm in the Belgrave area. He talked to Jason by telephone that day. Jason was planting on another property in the Kintail area. According to Jonathan, he told Jason the day before that he was getting close on his line of credit and needed money. Jason was supposed to write up a cheque and leave it in the shop but forgot.

38When he called, Jason told Jonathan to get one of his cheques, fill it out and put it in the bank. He asked Jason if he wanted him to bring the cheque to him to sign. Jason told him to go ahead and sign it, that it would take too much time to come to Jason.

39Jason typically kept cheques either in his truck or in his office at home. Jonathan looked in Jason’s truck which was parked at his shop and there were no cheques. He went to Jason’s property across the road because he needed more water for the water wagon. While there, he went in the house and grabbed a cheque from Jason’s office.

40As he was leaving the house, Jason’s spouse, Kaleigh Flynn, came in. She asked him what he was doing and he told her that Jason had told him to come and get a cheque. They had no further conversation. He finished getting the water and went back to his place where he made out the cheque which he deposited in the RBC branch in Clinton. He had no further discussions with either Jason or Kaleigh about the cheque.

41Jason denied any discussion with Jonathan at any time where he authorized Jonathan to get a cheque, fill it out and sign his name. Simply put, no such discussion ever occurred.

42The 2013 planting ledger/journal was entered as an exhibit. The journal shows entries for June 19 placing Jason at a farm some distance from his home. Jason denied that the entry was his handwriting although the rest of the entries in the journal were his. He indicated that he believed the handwriting to be Jonathan’s. The handwriting is visually dissimilar to the other entries. For his part, Jonathan denied that that was his handwriting and did not recognize it.

43Kayleigh Flynn testified as a Crown witness. She had a good memory. For example, she was asked whether the encounter with Jonathan in the house occurred within days of a $465,000 deposit of monies from ACC. She recalled that that deposit took place in 2014, not 2013.

44Ms. Flynn testified that they did not keep their house locked. She came home from work and saw a truck in the laneway. As she came in the front door, she met Jonathan in the mud room. He told her that Jason had told him to get some cheques. She did not think anything of it.

45She saw that Jonathan had their blue business cheques with the Libro logo on it. Jason was planting then and working long hours. She remembered calling him. She asked him about the cheques but at that point, a monitor went off at his end. He said they would talk about it later but they never did. She indicated that during planting season, Jason frequently worked very late, sometimes past midnight or even overnight if necessary to beat the weather.

46Banking records filed as exhibits show:

a. Jason wrote a cheque to Jonathan on June 12, 2013 for $30,000; b. Jonathan negotiated the deposit of those funds to his account on June 14 as part of a $32,000 deposit. His bookkeeper noted “From Jason $30,000” in handwriting on Jonathan’s bank statement; c. The balance on the account before that deposit was (-$14,585.71); d. On June 14, there were a number of cheque and debit transactions including a $15,000 loan payment that offset the deposit in part. At the end of the day on June 14, Jonathan’s account stood at $972.67; e. Between June 14-19, Jonathan wrote a number cheques that took his account balance back into the red; f. On June 18, he received a loan credit of $5,000 but his account had a balance outstanding of (-$15,005.50); g. On June 19, 2013, the cheque for $25,000 was deposited. His bookkeeper also handwrote “from Jason” beside that entry on his bank statement. Jonathan’s account moved back into positive territory at $9,994.50 following that deposit; and h. The account was back in the red two days later and had a negative balance of (-$3,812.43) as at June 28, 2013 – the end of the statement reporting period.

47The June 19, 2013 cheque contains no notation of its purpose on its face. For example, it does not say “loan”.

May 27, 2014 Cheque for $50,000

48On May 7, 2014, Jason wrote a cheque for $30,000 to Jonathan who was once again having financial difficulty. Jonathan deposited the cheque to his account on the same date. His account balance was (-$5,830.01) on the date he deposited the cheque.

49The cheque did not clear Jason’s account as he did not have sufficient funds. In cross-examination, Jason indicated that his line of credit had been reduced in 2014 by approximately $300,000.

50Jonathan testified that he spoke to Jason. He told Jason that he was close to the limits of his line of credit. Jason made out the cheque dated May 7 and gave it to him. Jonathan deposited it at the Royal Bank but got notice about four days later that the cheque went NSF. Therefore, on May 12, 2014, Jonathan’s bank debited the $30,000 back to his account leaving his balance at (-$25,222.60).

51According to Jonathan, he then spoke to Jason to ask what was going on. Jason told him he had no knowledge but would look into it. Jonathan sold a little bit of crop to get the line of credit where he needed and about three weeks later, Jason came up with the money. Jason provided no explanation for why he was able to do it three weeks later.

52According to Jonathan’s bank statement for that month, he received a loan credit of $15,000 and a GST payment of $20,000 on May 13 – after his account was debited for the NSF cheque. There is no indication of a deposit of monies from the sale of any crop. In any event, by the end of the business day on May 13, Jonathan’s account stood at $8,249.84 in the black even with the NSF cheque taken into account.

53On May 27, 2014, Jason was planting corn in the Dungannon area which was approximately 30 minutes by car from his home farm. May 27 is the day on which the cheque for $50,000 was written by Jonathan on Jason’s account. The cheque was negotiated for deposit to Jonathan’s account on May 28, 2014.

54On May 27 – the day Jonathan wrote the cheque for $50,000 and signed Jason’s name - Kaleigh deposited a cheque to Jason’s account from ACC in the amount of $465,853. Jason denied that the cheque for $50,000 to Jonathan was authorized by him; that it was to replace the $30,000 cheque that went NSF. Again, he denied that he authorized his brother to fill out and sign the cheque.

55Jonathan’s bank statement shows that his account was at (-$14,940.85) by the end of the day on May 27. He testified that he had received a call from his bank manager telling him that he needed to get money in the Bank soon. He testified in cross-examination that that call happened a couple of days to a week before May 27. When the cheque from Jason bounced, he was getting close to his credit limits with the bank.

56Jonathan testified that he had Jason’s permission to fill out and sign Jason’s name to the cheque for $50,000. He was looking at his bank account and was close to the limit of his line of credit. He recalled that Jason was planting in the Goderich area while he was spraying around the home farm. They were approximately 40 minutes by car apart.

57They spoke by telephone. Jason told him that money had been deposited from ACC and that he should get a cheque and sign it. He told Jonathan the cheques were in his truck. Jonathan took a cheque from the truck, filled it out and signed Jason’s name. He took it to the bank on May 28.

May 22, 2015 Cheque for $20,000

58Jonathan testified that in May 2015 his line of credit was again getting to where he needed money. He indicated that Jason was busy. He called him to ask for some money. Jason told him to get a cheque from the truck. He asked Jason if he wanted Jonathan to bring the cheque to him for Jason to sign it. Jason told him “no, just sign it”. He filled out the cheque, signed Jason’s name and took it to the Royal Bank where he deposited it.

59In cross-examination, he added that he spoke to Jason about borrowing some money the day before but Jason forgot to write the cheque.

60In cross-examination, Jonathan initially testified that he received a phone call from the manager at the Bank telling him that he needed to deposit money that day. However, on further cross-examination, he agreed that there was no urgency. He did get a call saying that he was getting close to his limit but the manager did not tell him to get the money in that day.

61Jason denied that he gave permission to anyone to sign his name to cheques on his account. He did not give Jonathan permission to take a cheque nor to sign his name.

Discovery of the Cheques

62Jason testified in-chief that:

a. He first saw the cheques signed by Jonathan at the end of November, early December 2016 when going through the books to defend himself from the civil lawsuit started by Jonathan; b. He did not notice them earlier because he was in the field working 18-20 hour days and was not home. There was a lot of money coming in and going out of his account daily; c. His relationship with Jonathan began to deteriorate in 2014 and worsened in 2015 because Jonathan owed him a lot of money and he was not getting paid back; d. Jonathan started having financial difficulties in 2012-13 which is when he started helping him out with loans; e. The loans were very informal. He lost track of the amounts owing but would figure it out when he did an accounting.

63In cross-examination, Jason testified that:

a. If he had the money to help Jonathan when he needed money, he would give him money with the expectation that it would be paid back; b. There were several advances to Jonathan in 2013, and the records show a partial repayment by Jonathan of $105,000 by cheque written October 21, 2013; c. There were times when each paid something that the other should have paid one-half of. It was necessary to reconcile who paid what and who owed who money from time to time; d. He denied that they sat down at Jonathan’s shop every August and December to go over the books; e. His yearly balance sheets show amounts of loans to related party (Jonathan); f. His 2016 balance sheet showed $329,234 owed by Jonathan as an asset; g. His accountant did the reconciliation of how much was owing; h. He took his papers to the accountant every three months; i. His accountant prepared the paperwork to get HST refunds. The last year he did it was 2013; j. The accountant prepared his financial statements and his income tax returns based on the statements; k. She provided the financial statements to him and he signed off; l. In 2013, he went through his cheques monthly or quarterly, including the cheque written by Jonathan without his authorization; m. He did not become aware of the taking of his cheques by Jonathan until the lawsuit was started in 2016. He would have done something about it if he had been aware at the time; n. If Jonathan wanted to borrow money, he would write the cheque to Jonathan; o. On March 30, 2016, Jonathan, Jason and their spouses met to discuss the monies owing by Jonathan. The acknowledgement at Ex. 7, Tab 22 was signed at that meeting. In it, Jonathan acknowledged owing $328,394.72; p. Jonathan had lied to him about getting money from landlords to pay him, then came to him crying saying that he was not able to pay Jason; q. Jonathan could not pay his loans and Jason could not pay his because Jonathan had not repaid him; r. By March 30, 2016, he knew how much Jonathan owed him; and s. Jonathan told him in June 2016 that he was getting out of farming. This was shortly before Jonathan went into hospital for treatment of his bipolar disorder.

64Jason’s spouse, Ms. Flynn, testified that she works for her father’s farming business doing border logistics and the books. The books for Jason’s farming business were done by the accountant. They gathered the documents and records and provided them to the accountant, Maria, who did all the reconciling.

65Ms. Flynn was asked in-chief when she thought something was amiss with the banking. She indicated “when we did year end. We noticed there was more money borrowed than what Jason had written cheques to Jonathan.” She testified that they found the cheques signed by Jonathan when preparing the defence to the lawsuit.

66In cross-examination, Ms. Flynn was asked when she first realized the 2013 cheque had been written. She initially indicated that the cheque went to the accountant and it was not uncommon for Jason to lend money to Jonathan. After they were served with the lawsuit, they went through the cheques and it became obvious that money had been stolen from Jason’s account.

67She indicated at the end of her evidence that when the bank statement with cheques came in the mail, she opened the envelope and saw the cheque. She saw it was not Jason’s signature before she sent it to the accountant but did not say much.

Law – Constituent Elements

68The first count of the indictment is theft under $5,000 contrary to s. 334(b) of the Criminal Code. To be found guilty of theft under $5,000, the Crown must prove beyond a reasonable doubt that:

1. Jonathan took or converted something (cheques) that belonged to Jason;
2. Jonathan took or converted Jason’s property fraudulently and without colour of right;
3. When Jonathan took Jason’s property, he meant to deprive Jason, at least temporarily, of the property; and
4. What Jonathan took was worth less than $5,000.

69A person takes property “fraudulently and without colour of right” if they take the property intentionally, knowing that it was the property of another person, and knowing that they were not legally entitled to take the property.

70Jonathan is charged with three counts of defrauding Jason by fraudulently signing Jason’s name on a cheque contrary to s. 380(1) of the Criminal Code. To convict, the Crown must prove the following essential elements beyond a reasonable doubt for each charge:

1. Jonathan deprived Jason of something of value;
2. Jonathan’s deceit, falsehood or other fraudulent means cause the deprivation;
3. Jonathan intended to defraud Jason; and
4. The value of the property exceeded $5000.

71Money is, of course, “something of value”.

72“Deceit” is an untrue statement made by a person who knows that it is untrue, or has reason to believe that it is untrue, but makes it despite that risk, to induce another person to act on it, as if it were true, to that other person’s detriment. “Falsehood” is a deliberate lie. “Other fraudulent means” is a broader term which includes any other means, which are not deceit or falsehood, properly regarded as dishonest according to the standards of reasonable people.

73Determining Jonathan’s intent to defraud Jason requires consideration of Jonathan’s state of mind at the time he deprived Jason of the money transferred from Jason’s account to Jonathan’s account by the cheque that Jonathan wrote and signed. I must be satisfied that Jonathan meant to do what he did and knew that doing so could put at risk Jason’s financial interests. It does not matter whether Jonathan thought that Jason would not suffer any harm in the end as a result. For example, it does not matter that Jonathan intended to pay back his brother at some future point.

74In R. v. Zlatic, [1993] 2 S.C.R. 29, the Supreme Court of Canada held that “other fraudulent means” encompasses all other means that can properly be stigmatized as dishonest. Dishonesty is determined objectively by reference to what a reasonable person would consider to be a dishonest act. The essence of dishonesty is the wrongful use of something in which another has an interest in such a manner that the others interest is extinguished or put at risk.

75In R. v. Long (1990), 61 C.C.C. (3d) 156, the British Columbia Court of Appeal held that dishonesty is conduct that ordinary, decent people would feel was discreditable, as being clearly at variance with straightforward or honourable dealings.

76The Crown must prove beyond a reasonable doubt that not only was Jonathan’s conduct dishonest, he knew of his dishonest act.

77An essential element of fraud is the actual risk of prejudice to the economic interests of the victim. There need not be actual economic loss: R. v. Campbell, [1986] 2 S.C.R. 376.

78The mental element of fraud is established by proof of subjective knowledge of the prohibited act and that performance of the prohibited act could have, as a consequence, the deprivation of another, including putting the pecuniary interests of another at risk: R. v. Theroux, [1993] 2 S.C.R. 5. It is no defence that the defendant believed that the conduct was not wrong or that no one would be hurt in the end.

79Finally, Jonathan also faces three counts of uttering a forged document contrary to section 368(1)(a) of the Criminal Code. The essential elements of that offence are:

1. The cheque(s) was forged;
2. The accused knew or believed that the cheque was forged;
3. The accused dealt with the cheque; and
4. The accused represented the cheque as genuine.

80A forged document is a false document made by a person who knows it is false and who intends that it be dealt with as if it were genuine to the prejudice of another person. It does not matter where or by whom the document was forged. A valid cheque becomes a forged document when an unauthorized endorsement is placed upon it: R. v. Jones (1970), 11 C.R.N.S. 219 (ON CA).

81The second element requires consideration of Jonathan’s state of mind, in particular his knowledge or belief that the cheque was forged when he dealt with it. This offence requires only an intent to deceive, not an intent to cause prejudice or to defraud: R. v. Sebo (1988), 1988 ABCA 200 , 64 C.R. (3d) 388 (Alta. C.A.).

82The third element is satisfied if Jonathan dealt with the cheque himself or got another person to deal with it. He can deal with the cheque by using or acting upon it himself. He may also deal with it by getting someone else to use or act upon the cheque.

83Finally, to represent something as genuine means to describe it or put it forward as authentic, the real thing, as what it appears to be, rather than what it really is and the accused knows or believes it to be. This element involves an intention on Jonathan’s part to deceive any person to whom he by words or conduct represented the cheque as authentic.

Analysis

84As I indicated at the outset, there is a critical factual issue, the determination of which informs the analysis of each of the charges against Jonathan. That issue is whether Jason told Jonathan on each occasion to get a cheque, to fill it out and to sign Jason’s name. In short, did Jason know and authorize the cheques?

85The determination of that factual issue rests largely on my assessment of the credibility and reliability of the evidence given by Jonathan, Jason and to a lesser extent, Kaleigh. I say to a lesser extent because she had no direct involvement in the alleged discussions between the two brothers at the time. That assessment of credibility and reliability must be made in the context of their familial and business relationship, their dealings with one another and their respective banks, the financial banking records and other documents admitted into evidence at trial.

86I was troubled by Jonathan as a witness. When pressed in cross-examination, he added material details to his version of events. He also contradicted himself when he initially testified in relation to the May 27, 2015 cheque that his bank manager told him that he had to get money into the bank that day. Later, he agreed that there was no urgency, the call had taken place anywhere from two days to a week before and was simply to advise that he was getting close to his limit.

87Jonathan also indicated that he sold some crop when Jason’s cheque of May 7, 2014 went NSF in order to keep onside with the bank; however, his bank statement shows no such deposit of money. Rather, the deposits appear to be funds advanced by the Bank by way of loan and an HST refund. In short, his evidence is contradicted by his bank statement.

88Jonathan agreed in cross-examination that he was in financial difficulty throughout 2013 – 2015. He repeatedly turned to his brother, Jason, whenever he perceived that he needed money. Jason became his safety valve; a trusted family member who loaned him significant sums of money during what was undoubtedly a very stressful period.

89The thrust of Jonathan’s evidence for each cheque in question was that he needed to borrow monies from Jason because his credit was at or near its limit. There was some urgency to the cheque being deposited and the funds transferred to his account. That urgency necessitated a deviation from their usual practice where Jason would write the cheque himself and give it to Jonathan. However, a close review of Jonathan’s bank statements shows that was not the case. To be sure, he was frequently in overdraft, but the evidence does not reveal the urgency he described.

90Suffice to say, I have grave reservations as to the credibility and reliability of Jonathan’s evidence.

91In general, I found that Jason gave his evidence in a straightforward, consistent manner. He was direct in his answers, conceding points in cross-examination with respect to the manner of the operation of their business, loans advanced and repaid.

92There is, however, an area where I had concern: his evidence as to when he first learned of the forged cheques. He said he only learned of and saw the cheques after Jonathan sued him and in the course of reviewing documents to prepare his defence.

93I note that his spouse, Kaleigh, testified in cross-examination that she first saw the 2013 cheque signed by Jonathan when the bank statement came in. She also indicated that in 2013, they were aware that there was more money owing than Jason had written cheques for. Jason received financial statements annually from his accountant telling him the amounts due by Jonathan.

94At times, each brother watched his debt rise perilously close to his credit limits. Jason had to be aware that Jonathan was increasingly indebted to him. It makes no sense to me that he would lose track of how much he had advanced his brother especially when, as Ms. Flynn testified, they knew the amount owing was more than Jason had written cheques for. Jason struck me as an intelligent, careful businessman – not someone who would lose track of $25,000, $50,000 or $20,000 – an aggregate of $95,000.

95It makes sense to me that with such interconnected business operations where one might pay the whole of a bill and be entitled to reimbursement for half from the other, that they would meet from time to time to go over who owed who for what. They would need their cheques and bank statements for that purpose. Jonathan says they had such meetings but Jason says they did not after 2013.

96The evidence suggests a very close bond between brothers. Jason wanted to help Jonathan and did. There was a pattern of Jonathan asking and Jason lending, and there is nothing in the evidence to explain why Jonathan would deviate from that pattern and defraud his brother on these three occasions. It does not strike me as far-fetched or impossible that Jason may have told Jonathan to fill out a cheque when he was working some distance away and Jonathan was telling him he needed the monies.

97I am not required to simply pick between the two accounts provided by the brothers; in fact, the Supreme Court of Canada in R. v. W.D. admonishes against such an approach. My concerns with Jason’s evidence inform my assessment of the balance of his evidence, especially that related to consent and authorization.

98In the result, I am left with a reasonable doubt as to whether Jason told Jonathan to get the cheques from his home office and truck, and told Jonathan to fill out the cheques and sign his name. As I indicated earlier, it is not enough that I find that it is likely the Jason gave no such consent/direction to Jonathan. I must be sure in my mind that he did not. I have a reasonable doubt on the whole of the evidence before me including the context of their familial and business relationship and dealings.

99Jonathan should not take from this finding that I believe and accept his evidence as to what happened and how. Beyond a reasonable doubt is a very high burden to meet.

100I turn now to the charges before me.

101With respect to the charge of theft under $5,000, the Crown has failed to satisfy me beyond a reasonable doubt that Jonathan took the cheques fraudulently and without colour of right. I find him not guilty of that charge.

102With respect to the charges of defrauding Jason contrary to s. 380(1) of the Code, the Crown has not satisfied me beyond a reasonable doubt that Jonathan intended to defraud Jason and that he deprived Jason of something of value by deceit, falsehood or other fraudulent means.

103The defendant is therefore acquitted of those charges.

104With respect to count 5 of the indictment, I note that the date of the alleged use of a forged document is June 27, 2014. The evidence shows the May 27 cheque was deposited and credited to Jonathan’s account on May 28. I have no idea where the June 27 date comes from. That date is not supported on the evidence.

105With respect to the elements of uttering a forged document, on Jonathan’s own evidence,

a. He signed Jason’s name to the cheques; b. He knew the cheques were not signed by Jason; c. He dealt with the cheques when he took them to the bank and deposited them; d. He represented the cheques as genuine - as valid cheques drawn on Jason’s account as if signed by Jason.

106Were the cheques “forged”? Each was a false document. Only Jason had signing authority on his account and Jonathan signed Jason’s name on the signature line.

107Jonathan knew each was a false document. He intended them to be dealt with as if they were genuine.

108However, I am not satisfied that he used them to the prejudice of Jason. They may have been loans by Jason to Jonathan and thus repayable by Jonathan. If so, the cheques, although containing Jason’s signature written by Jonathan, were not to Jason’s prejudice. As I have indicated above, I have a reasonable doubt whether the signature was “authorized” by Jason.

109Therefore, the charges under s. 368(1) are dismissed.