COURT FILE NO.: J-18-042

DATE: 2018/02/08

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

HER MAJESTY THE QUEEN

K. Malkovich, for the Crown Attorney and C. Zary, for the Public Prosecution Service of Canada

Respondent

• and -

JOERN (JOHN) SCHOLZ

J. Berkes for the Applicant

Applicant

HEARD: December 12 and 13, 2018

REASONS FOR JUDGMENT WITH RESPECT TO SS. 8 AND 24(2) OF THE CHARTER OF RIGHTS AND FREEDOMS

A.J. GOODMAN J.:

1The applicant, Joern (John) Scholz, (“Scholz”) is charged with defrauding the public and other related fraud offences, contrary to their respective provisions of the Criminal Code of Canada. All of these offences are alleged to have occurred in Hamilton or elsewhere in Canada between the dates of December 31, 2010 and July 1, 2016.

2The applicant seeks to exclude evidence seized by the investigators from various investment firms, banks and corporations, along with records from his residence under a judicially authorized search warrant, by virtue of breaches of ss. 8 and 24(2) of the Canadian Charter of Rights and Freedoms (“Charter”).

3On January 16, 2019, I dismissed the Application with reasons to follow. These are my Reasons.

Background:

4The applicant is a certified professional/chartered accountant. He received his designation in 2003. He also holds a Masters of Business Administration degree and considers himself a “tax expert”.

5The investigation in this matter began as a result of an inquiry into real estate promoter Sunil Tulsiani. In August 2015, in the course of their investigation, the Canada Revenue Agency (“CRA”) became aware of Scholz, various companies linked to him, along with questionable RRSP transfers and associated bank accounts of investment firms. This was prior to the CRA joining up with the OSC and before the issuance of the search warrants.

6The allegations concern over 300 investors who, through the applicant, transferred their Registered Retirement Savings Plan (RRSP) or Retirement Account (LIRA) funds, totaling over $22 million to Western Pacific Trust Company (“WPTC”). In a direction by investors, as arranged by the applicant, WPTC then purchased shares of companies controlled by the applicant on the investors’ behalf. Once this was done, the applicant directed WPTC to release funds to a company controlled by the applicant. The applicant subsequently returned approximately 85% of the RRSP funds to the investors, without any restrictions. The applicant kept the remaining 15% as his fee/commission.

7It is alleged that the applicant devised and directed this scheme. It was the applicant who confirmed to WPTC that the companies were qualified. The applicant provided assurances to investors that there would be no tax consequences and no need to declare any withdrawal from their RRSP or LIRA. This led WPTC and investors to believe the funds were being transferred from one qualified RRSP fund to another and hence there would be no tax consequences.

8It is alleged that the companies were not, in fact, qualified investments. As a result, this changed the nature of the funds and caused the funds to no longer be held within an RRSP. These transactions triggered significant tax consequences to the investors and a significant loss of taxes to the Government of Canada. Further, the applicant did not report the income he earned from commission fees he charged to investors, nor did he pay taxes or submit GST/HST payments for his fees.

9As a result of a complaint to the Ontario Securities Commission (OSC), an investigation was commenced by the Joint Serious Offences Team (JSOT) of the OSC. The original officer in charge was Sergeant Steve Han of the RCMP, but was subsequently changed to Mr. Wayne Vanderlaan (“Vanderlaan”). The applicant was interviewed, as well as some of the investors, and employees of WPTC.

10The OSC investigation joined up with the Canada Revenue Agency Criminal Investigations Division (“CRA”). The OSC has been running 2 parallel investigations into the applicant’s business affairs. The first, a regulatory investigation. The second, and the subject matter of this case, a parallel criminal investigation. Neither of these investigations was involved in the separate regulatory investigation being conducted by the OSC’s enforcement branch.

11Vanderlaan is the affiant for seven Informations to Obtain (“ITO”) in relation to the judicial authorizations, being search warrants or production orders. Vanderlaan swore a series of ITOs on the following dates: October 21, 2015; December 9, 2015; December 23, 2015; January 20, 2016; March 2, 2016; July 8, 2016; and June 22, 2017.

12Vanderlaan obtained judicial authorizations for business records of WPTC and bank account records of the applicant, his spouse, Anita Insanalli, and multiple corporations being operated or controlled by the applicant. Judicial authorizations were also issued to search the applicant’s residences for relevant documents.

13On July 8, 2016, the applicant was arrested and charged with a number of fraud offences.

14The evidence obtained as a result of the warrants consists of banking records. A large number of the documents in the case were obtained as a result of a production order served on the WPTC. These documents refer to Scholz and his various clients’ transactions with WPTC. These WPTC documents generated a list of civilian witnesses of whom Vanderlaan interviewed and deposed to in subsequent ITO’s.

15The search warrant from July 8, 2016 authorized Vanderlaan to search Scholz’ current and previous residences for evidence in the matter.

Position of the Parties:

16Mr. Berkes, on behalf of the applicant, submits that the affiant did not have reasonable and probable grounds to support the issuance of the search warrants or production orders. Counsel submits that the process employed by the police in this case constituted bad faith and an abuse of process as Vanderlaan intentionally mislead the issuing justice.

17Vanderlaan deposed that Scholz referred to unlocking people’s RRSP during his voluntary interview. The applicant submits that Vanderlaan’s use of the term “unlocking” in the various ITO’s was misrepresented. During his interview, he never refers to “unlock” or unlocking people’s RRSP’s and never uses the term unlock in any part of his statement. The term is entirely misleading.

18The activities Vanderlaan undertook to influence witness’ evidence to bolster the grounds of his ITO was improper and not explained to the issuing justice. Mr. Berkes submits that Vanderlaan deposes extensively from his interview with Scholz. However, the affiant misrepresents, manipulates and omits information from this interview. For example, Vanderlaan deposed that during his voluntary interview Scholz confirmed that Northland Capital (“Northland Capital”) was registered to Betty and Perry Palantzas. The actual text of the interview discloses that Scholz said he did not believe that the Palantzas were associated with Northland. Vanderlaan interviewed the Palantzas on October 2, 2015. However, Vanderlaan failed to include the information regarding the Palantzas’ recollection for incorporating Northland Capital, in that they did not remember why it was incorporated, but that there was an explanation at the time. While it may be that the witness forgot that the reason for incorporating the company, the statement should have been included in the ITO so the justice could consider it.

19Vanderlaan made explicit and implicit statements that he believed all the information in his ITO to be true. Yet, Vanderlaan did not detail his involvement with Jeffery Singh (“Singh”) and the timing of when he believed Singh went from being a witness to a co-conspirator. Vanderlaan deposed that he interviewed Singh on October 5, 2015. At the preliminary inquiry, Vanderlaan conceded that during the Singh interview, he found the witness to be uncooperative and evasive. The applicant says that this significantly impacts Singh’s credibility and the reliability of what Singh told Vanderlaan. However, Vanderlaan failed to mention any issue with Singh’s credibility in any ITO.

20Finally, the information contained in the ITO about whether or not Scholz was running an RRSP stripping scheme is false and misleading. The applicant submits that Vanderlaan interviewed Gilles Lalonde (“Lalonde”), a manager in the CRA audit department regarding his opinion of the applicant’s business activities. Vanderlaan deposed in his ITO that it was Lalonde’s opinion that the applicant’s activities amounted to an illegal “RRSP strip”. Lalonde was later interviewed by CRA investigators and he indicated that based on the documentation he was not able to say that Red Hill Capital (“Red Hill”) and Northland Capital were non-qualified investments and that the transactions they undertook were a RSP strip.

21In the ITO’s, Vanderlaan repeats as evidence of the alleged fraud that Scholz hid his interest in all the companies that were a part of these transactions. On January 21, 2016 Vanderlaan interviewed Kenneth Macaulay (“Macaulay”). Vanderlaan deposed that Macaulay understood that all the companies in question were controlled by Scholz. However, Macaulay went further in his statement regarding ownership of the companies. The applicant says that the ITO is not completely inaccurate and fails to reveal information which would undermine Vanderlaan’s central theme.

22The applicant submits that there was an insufficient basis for which the issuing justice could have granted a search warrant; as such, his right to be free from unreasonable search and seizure was breached. Based on a full consideration of the s. 24(2) factors, all of the evidence ought to be excluded.

23The Crown submits that the key banking and business records did not belong to the applicant. These were company accounts or files of client investors and the business records of WPTC. These facts, coupled with the applicant’s decision to comingle his personal affairs with these accounts concerning highly regulated areas of business cannot now create a reasonable expectation of privacy in these records.

24The Crown submits that ITO’s are not expected to be perfect. In this case, while there may or may not be minor discrepancies and errors identified, none rise to the level of deliberate non-disclosure or a motive to misrepresent. They do not affect reliability of the remaining evidence contained in the ITO’s as a whole.

25The test on a review is whether there was any basis upon which the authorizations (search warrants or production orders) could issue. In light of the test, and in the alternative, if this court were to excise those few pieces the applicant is suggesting are misleading or false, a significant amount of evidence remains upon which a justice could have issued the various warrants or production orders.

26The Crown says that the affiant made full, frank and fair disclosure to the issuing justices in all respects. The Crown asserts that the applicant has not established that any of the alleged misstatements or errors in the cumulative ITO’s undermined the issuance of the search warrants and production orders.

27Crown counsel submits that even if the ITO(s) were deficient and the searches of the agencies or residence was found to be a violation of s. 8, the evidence ought to be properly admitted under s. 24(2) of the Charter.

Legal principles:

28Section 8 of the Charter states:

Everyone has the right to be secure against unreasonable search or seizure.

29As there was a judicially authorized warrant issued in this case, the onus rests on the applicants to establish a breach of their Charter rights.

30The scope of review is that set out by Sopinka J. in R. v. Garofoli, 1990 52 (SCC), [1990] 2 S.C.R. 1421, [1990] S.C.J. No. 115, 260 C.C.C. (3d) 161 (S.C.C.) at 188:

The reviewing judge does not substitute his or her view for that of the authorizing judge. If, based on the record which was before the authorizing judge as amplified on the review, the reviewing judge concludes that the authorizing judge could have granted the authorization, then he or she should not interfere. In this process, the existence of fraud, nondisclosure, misleading evidence and new evidence are all relevant, but, rather than being a prerequisite to review, their sole impact is to determine whether there continues to be any basis for the decision of the authorizing judge.

31It is clear that on a s. 8 Charter application, the court reviewing a search warrant ITO does not stand in place of the justice who issued the warrant. The test is whether there is at least some evidence that might reasonably be believed on the basis of which the authorization could have been issued. The properly circumscribed limits of a review were summarized by the Court of Appeal in R. v. Mahmood, 2011 ONCA 693, at para. 99. See R. v. Morelli, 2010 SCC 8, at paras. 40-42; R. v. Pires; R. v. Lising, 2005 SCC 66, [2005] 3 S.C.R. 343, at paras. 8 and 30; R. v. Araujo, 2000 SCC 65, [2000] 2 S.C.R. 992, at paras. 54 and 59: R. v. Garofoli, and R. v. Wiley¸ 1993 69 (SCC), [1993] 3 S.C.R. 263, at pp. 273-274.

32In performing this review, instructive guidelines have been applied by various courts:¹

(1) The warrant is presumptively valid unless the challenging party establishes that there was no basis for its issuance: R. v. Campbell, 2010 ONCA 558, at para. 45. (aff’d, 2011 SCC 32).

(2) [T]he review is not an exercise in examining the conduct of the police with a fine-toothed comb, fastening on their minor errors or acts or omissions, and embellishing those flaws to the point where it is the police conduct that is on trial rather than the sufficiency of the evidence in support of the application”: R. v. Nguyen, 2011 ONCA 465, at para. 57.

(3) As noted in R. v. Cunsolo, [2008] O.J. No. 3754 (S.C.J.) (QL), at para. 135:

The appropriate approach for judicial review of the facial validity of a search warrant and related ITO is scrutiny of the whole of the document, not a limited focus upon an isolated passage or paragraph. Reference to all data within the four corners of the information, a common sense review not line-by-line word-by-word dissection, provides the fair and reasonable context for the assertions in question: R. v. Grant (1999), 1999 3694 (ON CA), 132 C.C.C. (3d) 531 (Ont. C.A.) at 543 (leave to appeal refused [1999] S.C.C.A. No. 168.²

(4) Police officers are not legal draftspersons and cannot, in an ITO, be expected to “spell out things with the same particularity of counsel”: Re Lubell and the Queen (1973), 1973 1488 (ON SC), 11 C.C.C. (2d) 188 (Ont. H.C.), at p. 190; R. v. Durling (2006), 2006 NSCA 124, 214 C.C.C. (3d) 49 (N.S.C.A.), at para. 19; R. v. Sanchez (1994), 1994 5271 (ON SC), 93 C.C.C. (3d) 357 (Ont. Ct. Gen. Div.), at p. 364;

(5) It will not be surprising that an ITO will have some flaws – “[f]ew applications are perfect”: Nguyen, at para. 58. The question remains whether the core substance of the ITO could support the justice of the peace’s exercise of discretion to issue the warrant.

(6) While it is expected that an ITO will present reliable, balanced and material facts supporting the asserted grounds of belief, an ITO affiant need not attempt to replicate a Crown disclosure brief – the document should be clear, concise, legally and factually sufficient, and “need not include every minute detail of the police investigation”: C.B.C. v. A.-G. for New Brunswick (1991), 1991 50 (SCC), 67 C.C.C. (3d) 544 (S.C.C.), at p. 562; R. v. Araujo (2000), 2000 SCC 65, 149 C.C.C. (3d) 449 (S.C.C.), at p. 470;

33In the context of a search warrant ITO, the overarching principles may be summarized as follows:

(1) The application must disclose reasonable grounds or credibly-based probability regarding the essential statutory prerequisites. This standard of reasonable probability does not equate to proof beyond a reasonable doubt or to a prima facie case: R. v. Debot (1989), 1989 13 (SCC), 52 C.C.C. (3d) 193 (S.C.C.), at p. 213, “or even on a balance of probabilities”: R. v. Jacobson (2006), 2006 12292 (ON CA), 207 C.C.C. (3d) 270 (Ont. C.A.), at para. 22. Accordingly, reasonable grounds “are not proof absolute” though they must be more than mere suspicion: R. v. Smith (1998), 1998 ABCA 418, 126 C.C.C. (3d) 62 (Alta. C.A.), at p. 77.

(2) Whether an ITO affiant subjectively had grounds of belief, and whether those grounds reasonably existed in an objective sense, is a fact-specific determination in each case. “There is no fixed formula for what constitutes reasonable grounds to believe. The concept of reasonable grounds involves the application of common sense as well as practical and non-technical principles”: R v. Philpott, [2002] O.J. No. 4872, (S.C.) at paras. 85-87.

(3) The ITO must raise credibly-based probability that the search will produce evidence of a crime. Grounds of belief are to be considered in their totality, not isolated out for independent evaluation: See R. v. Morris (1998), 1998 NSCA 229, 134 C.C.C. (3d) 539 (N.S.C.A.).

(4) It is trite law that an applicant for a search warrant has a duty to make full, frank and fair disclosure of all material facts in the ITO supporting the request” for a search warrant: Nguyen (2011), at para. 48. In R. v. N.N.M. (2007), 2007 31570 (ON SC), 223 C.C.C. (3d) 417 (Ont. S.C.J.), at para. 320.

(5) The affiant’s experience is relevant to the assembly of investigative facts and their promotion as affording reasonable grounds of belief. This principle was described at para. 68(6) of the Cunsolo case:

Because a trained officer is entitled to draw inferences and make deductions drawing on experience (R. v. Jacques and Mitchell (1996), 1996 174 (SCC), 110 C.C.C. (3d) 1 (SCC) at 12), a reviewing court must take these factors into account: R. v. Lawes, 2007 ONCA 10, [2007] O.J. No. 50 (C.A.) at para. 4; R. v. Simpson (1993), 1993 3379 (ON CA), 79 C.C.C. (3d) 482 (Ont. C.A.) at 501;

(6) A court considering the issuance of a search warrant is entitled to draw “reasonable inferences:” R. v. Schiers, 2003 NSCA 138, [2003] N.S.J. No. 453 (C.A.), at para. 15; R. v. Durling (2006), 2006 NSCA 124, 214 C.C.C. (3d) 49 (N.S.C.A.), at para. 20, 27; R. v. Sanchez (2004), 1994 5271 (ON SC), 93 C.C.C. (3d) 357 (Ont. Gen. Div.), at pp. 365, 370.

34In World Bank Group v. Wallace, 2016 SCC 15, the Supreme Court recently re-emphasized that the determination is what the affiant reasonably knew or ought to have known. Factual correctness is not a standard that has application in law in terms of section 8 and the investigative process:

… On a Garofoli application, the affidavit before the authorizing judge is assessed based on what the affiant “knew or ought to have known”, not whether the information is true (R. v. Pires, 2005 SCC 66, [2005] 3 S.C.R. 343, at para. 41). Thus, the documents sought will only be relevant if they can demonstrate that the affiant knew or ought to have known that the information he relied on was false. …

A Garofoli application does not determine whether the allegations underlying the wiretap application are ultimately true — a matter to be decided at trial — but rather whether the affiant had “a reasonable belief in the existence of the requisite statutory grounds” (Pires, at para. 41). What matters is what the affiant knew or ought to have known at the time the affidavit in support of the wiretap authorization was sworn. …

As a general rule, there are two ways to challenge a wiretap authorization: first, that the record before the authorizing judge was insufficient to make out the statutory preconditions; second, that the record did not accurately reflect what the affiant knew or ought to have known, and that if it had, the authorization could not have issued (R. v. Araujo, 2000 SCC 65, [2000] 2 S.C.R. 992, at paras. 50-54; Pires, at para. 41; see also R. v. Grant, 1993 68 (SCC), [1993] 3 S.C.R. 223, on the exclusion of unconstitutionally obtained information from warrant applications). The challenge here is brought on the second basis, sometimes referred to as a subfacial challenge.

In view of the fact that a subfacial challenge hinges on what the affiant knew or ought to have known at the time the affidavit was sworn, the accuracy of the affidavit is tested against the affiant’s reasonable belief at that time. In discussing a subfacial challenge to an information to obtain a search warrant, Smart J. of the British Columbia Supreme Court put the matter succinctly as follows:

During this review, if the applicant establishes that the affiant knew or should have known that evidence was false, inaccurate or misleading, that evidence should be excised from the [information to obtain] when determining whether the warrant was lawfully issued. Similarly, if the defence establishes that there was additional evidence the affiant knew or should have known and included in the [information to obtain] in order to make full, fair and frank disclosure, that evidence may be added when determining whether the warrant was lawfully issued.

(R. v. Sipes, 2009 BCSC 612, at para. 41)

Smart J.’s comments apply equally to a Garofoli application (see R. v. McKinnon, 2013 BCSC 2212, at para. 12; see also Grant, at p. 251; R. v. Morelli, 2010 SCC 8, [2010] 1 S.C.R. 253, at paras. 40-42). They accord with this Court’s observation in Pires that an error or omission is not relevant on a Garofoli application if the affiant could not reasonably have known of it (para. 41). Testing the affidavit against the ultimate truth rather than the affiant’s reasonable belief would turn a Garofoli hearing into a trial of every allegation in the affidavit, something this Court has long sought to prevent (Pires, at para. 30; see also R. v. Ebanks, 2009 ONCA 851, 97 O.R. (3d) 721, at para. 21).

The Garofoli Application:

35I briefly turn to the Garofoli application and the matter of amplification. A question arose in this case whether the applicant could cross-examine the affiant in support of the application for the warrant and to what extent could questioning ensue.

36The applicant submits that the reviewing judge may use amplification in limited circumstances to correct minor, inadvertent or technical errors in the ITO. However, in this case, if erroneous or false information in the affidavit results from intentional or fraudulent misrepresentations, or deliberate attempts to mislead the issuing justice, the amplification process cannot be used to correct these errors or otherwise sustain the authorization.

37In Garofoli, the court contemplated that the reviewing judge could have the affidavit evidence in support of the authorization, the evidence on behalf of the accused establishing a basis for cross-examination and any other evidence obtained on cross-examination. The court referred to the examination of the "...record which was before the authorizing judge as amplified on review..." In the same passage, Sopinka, J. refers to the reviewing judge taking into account "new evidence". These references must be understood as requiring the reviewing judge to consider all of the components of the evidentiary record.

38The applicant must show a basis for the assertion that the cross-examination will elicit testimony tending to discredit the existence of one of the pre-conditions to the authorization. The Supreme Court endorsed that the accused could conduct cross-examinations with leave of the trial judge, and that leave should be granted where necessary to permit the accused to make full answer and defence. It is settled law that this cross-examination should be limited to questions that are directed to establish that there was no basis upon which the authorization could have been granted.

39The issue of amplification concerns the extent to which the material contained in the ITO can be supplemented by evidence adduced on the review. Errors in an affidavit do not automatically result in the invalidation of an authorization. Inaccuracies, misstatements and unconstitutionally obtained information will be excised from an affidavit and the remaining grounds assessed for sufficiency. While deliberate or fraudulent misstatements must be excised from an affidavit, minor errors made in good faith in the drafting can be corrected by amplification evidence. I must be mindful that the amplification process is not without its limits.

40In this case, I granted the application for leave to cross-examine Vanderlaan in relation to four areas of questioning. These include: Vanderlaan’s use of the term “unlocking” in the various ITO’s vis-a-vis the applicant’s actions; the activities Vanderlaan undertook to influence witness’ evidence to bolster the grounds of his ITO; Singh and the timing of when Vanderlaan believed he went from being a witness to a co-conspirator; and the information contained in the ITO about the statements Lalonde made regarding whether Scholz was running an RRSP stripping scheme.

41The evidence on amplification, most of which was already gleaned from the preliminary inquiry or as a result of the leave application to cross-examine the affiant, did not change the thread of the overall representations made in each of the ITO’s.

Legal Principles Applied to this Case: The Information to Obtain:

42It is necessary to assess the substantive core of the ITO(s), including any misleading information, irrelevancies, omissions, lack of evidential foundation, matters arguably short on detail, potentially misleading language, as well as other factors, and ask whether the applicant has demonstrated the absence of any reasonable basis for the issuance of the warrant.

43The question becomes whether the justice, acting judicially and having been apprised of the omitted or misleading information could have issued the warrant. The seven authorizations for the places to be searched are listed as follows: ³

1. ITO dated October 21, 2015 for Initial Search Warrant for Bank Accounts- BANK OF MONTREAL (“BMO”): Based on bank documents provided by Cynthia Habib, the Warrant was to obtain the monthly statements for corporate accounts of Wellington Finance Inc. and Northland Executive Services Inc., (“NES”) as identified on the bank documents of Habib; To identify any accounts held in the name of Scholz or Anita lnsanalli who is the President/Officer of Northland Capital.

2. ITO Dated December 9, 2015 for Production Order for Business Records/ Client Files- WPTC: This Order was to obtain copies of WPTC’s business records or files for their investor clients. These are the files of the over 300 investor clients which opened up a self-directed RRSP plan. It is the individual plan of, and under the control or direction of, each client. Through these plans the investor clients directed WPTC to purchase securities/share certificates of Northland and Red Hill.

3. ITO dated December 23, 2015 for Search Warrant for Bank- BMO: As a result of the monthly statements obtained on the corporate bank accounts of Wellington and Northland Executive, this warrant sought to obtain the back up or supporting documents referred to in those monthly statements.

4. ITO dated January 20, 2016 for Two Search Warrants on Banks- ROYAL BANK OF CANADA (“Royal”) and TORONTO DOMINION BANK (“TD”): A review of the two corporate bank accounts received above, revealed deposits were made into those accounts from accounts at the Royal and TD Bank. To further the trace of all funds involved in this scheme, monthly statements and account profiles were requested for those other accounts through this warrant.

5. ITO dated March 2, 2016 for Two Search Warrants on Banks- BMO and the BANK OF NOVA SCOTIA (“BNS”): A review of the corporate bank account for NESI revealed transactions to other accounts; in order to determine if those funds were investor funds, further bank information was requested as to the profile of those transfers; Documentation was missing from what BMO was to provide in IT0#3. This warrant requested that missing documentation for specific transactions.

6. ITO dated July 8, 2016 for Two Search Warrants on the Applicant’s Residences - 30 Sir Williams Lane, Toronto, 32 Ringley Avenue, Toronto: In an interview Scholz indicated he worked out of his residence. The investigation revealed that the former business addresses were either closed down or post office boxes. Scholz was observed in the process of moving. Warrants were for two residences of the applicant, the one to which he was moving to (Ringley) and the one he was moving out of (Sir Williams Lane), to gather evidence of his business/involvement in the RRSP scheme.

7. ITO dated June 22, 2017 for 3 Production Orders on Banks- BMO, BNS and ROYAL: The analysis of the Wellington and NES corporate bank accounts revealed funds were transferred to personal bank accounts of Scholz and his spouse, Anita lnsanalli. The information from these accounts, held by one or both, were required to assess tax liability and/or evasion, unremitted GST/HST, income, etc, to determine who benefitted from the fees collected on the RRSP funds. This request also sought authorization for the corporate bank account of Northland Capital to determine if Northland Capital was an active business, a criteria in the assessment of whether Northland Capital was a qualified investment.

44The evidence seized in this matter can be broken down into three areas: Records from various banks including client and corporate financial records, documents held at WPTC, and records seized from the applicant’s private home.

45In Thompson Newspapers Ltd v. Canada (Director of Investigation and Research, Restrictive Trade Practices Commission), 1990 135 (SCC), [1990] 1 SCR 425, the Supreme Court of Canada analyzed the issue of compelled inspections seizure and any privacy interests in business records. While this was under the guise of a Combines Investigations Act, the court indicated that such records are not devoid of any privacy interest, however, the interest is weaker than in personal papers. At paras. 141 and 143, the court stated:

While such records are not devoid of any privacy interest, it is fair to say that they raise much weaker privacy concerns than personal papers. The ultimate justification for a constitutional guarantee of the right to privacy is our belief, consistent with so many of our legal and political traditions, that it is for the individual to determine the manner in which he or she will order his or her private life. It is for the individual to decide what persons or groups he or she will associate with, what books he or she will read, and so on. One does not have to look far in history to find examples of how the mere possibility of the intervention of the eyes and ears of the state can undermine the security and confidence that are essential to the meaningful exercise of the right to make such choices. But where the possibility of such intervention is confined to business records and documents, the situation is entirely different. These records and documents do not normally contain information about one's lifestyle, intimate relations or political or religious opinions. They do not, in short, deal with those aspects of individual identity which the right of privacy is intended to protect from the overbearing influence of the state. On the contrary, as already mentioned, it is imperative that the state have power to regulate business and the market both for economic reasons and for the protection of the individual against private power. Given this, state demands concerning the activities and internal operations of business have become a regular and predictable part of doing business. Under these circumstances, I cannot see how there could be a very high expectation of privacy in respect of the records and documents in which this information is contained.

In fact, however, I do not view the expectations of privacy relating to business documents of corporations as significantly different for present purposes from those of business enterprises functioning under other legal regimes. Officers of the company and other individuals may also be implicated by what is found in corporate documents. Besides, it would be strange if the ambit of the Act were required to be limited by a consideration of the legal mechanism employed to conduct business rather than the nature of the behaviour sought to be regulated. The notion that a distinction is called for because the corporation is a creature of the state, which appears in United States jurisprudence, will not, in my view, withstand scrutiny. It is the policy considerations underlying the legislation that are relevant, and, while these considerations apply with greater force to corporate bodies (hence the concentration on them in practice), they are also relevant to other business entities as well.

46That is not to say that there is still some privacy interests that arise in banking records. In Johnson v. Ontario (Minister of Revenue) (1990), 1990 6742 (ON CA), 75 O.R. 2d 558 at page 9, the Court of Appeal stated:

In identifying the privacy interests in such objects, under the guidance of the various opinions expressed in Thomson and McKinlay, I am of the view that the documents which may be seized under the authority of s. 15(3), carry a higher privacy interest than the cargo. Again, the privacy interest in business records may not be substantial but it is nonetheless existent and it attracts constitutional protection.

47I disagree with the applicant in that the records held by the banks and third party financial or trust entities invoke a high expectation of privacy, or that they contain what has been termed as “being close to the biographical core of information” related to the applicant.

48For example, the business records of WPTC contained the personal RRSP “self-directed plans” of the investor clients of WPTC. These client files detailed each client’s transactions of the transfer of their RRSP’s into a WPTC plan and the purchase of shares of Northland Capital or Red Hill with their RRSP.

49I agree with the Crown that the applicant has not demonstrated he has a subjective reasonable expectation of privacy in the aforementioned records belonging to WPTC or held by the relevant banks. It does not matter that he controlled certain corporations that had dealings with these banks or WPTC. These documents are not Scholz’ records, either personally or professionally.

50I find that the applicant does not have an objective expectation of privacy in the business records held or in possession of WPTC or within the banking institutions related to client investors. Of course, the applicant enjoys a high expectation of privacy in relation to the search of records in his own home and perhaps those records related to Northland Capital and Red Hill.⁴ Notwithstanding my initial determination, I examined all of the various ITO’s subject to challenge by virtue of the grounds raised in this Application.

51One of the fundamental areas of concern raised by the applicant is with respect to the affiant’s oft-quoted use of the term “unlock”.

52This area of examination was explored in the course of cross-examination of the affiant at the preliminary inquiry and during the Garofoli application. Vanderlaan testified that the use of the word “unlock” was how he described, in basic terms his understanding of the overall scheme or how witnesses might have understood it to be. Vanderlaan denied any intention to attribute the use of the word “unlock” to the applicant or to witnesses who did not employ that term. This is corroborated by the affiant’s use of quotation marks in his various ITO’s.

53The affiant provided a description of what he meant by his use of the term “unlock”. His explanation was simple and reasonable. The RRSP, LIRA or other tax deferral programs provide for money that is sheltered from tax. The vehicle for such a benefit is derived from strict rules and regulations. Money cannot flow out of these programs without tax consequences. In a sense they are “locked in” under rules or regulations governing these tax programs.

54I note that the applicant does not take issue with the description of “unlocking”, rather, that that the applicant actually used that term when it was not specifically referenced by any witness. I need not delve into the realm of conjecture to determine that the term “unlock” is a reasonable description of the mechanism of how monies can be withdrawn from the RRSP or other tax sheltered investments and how the scheme alleged in this prosecution ensued.

55I am satisfied that this term, so ubiquitous in its application, would have been readily known to the issuing justice to describe the nature of RRSP or other tax deferral investment programs and how funds are held within those vehicles. It is a matter of common sense. The issuing justices would not have been misled. I am satisfied that the term was employed to describe the nature of the scheme. Even if that phrase had not been used, the authorizations would still have issued.

56The applicant argues that the affiant tried to intimidate or put improper statements or suggestions to the witnesses. I am not satisfied that the applicant has established a foundation for these assertions. For example, Cynthia Habib (“Habib”) was a client investor of Scholz and WPTC in and around March of 2014. She provided a series of documents and information to the OSC concerning her financial relationship with Scholz. This included documents and email directives from Scholz, and an audio recording of a conversation she had with Scholz (wherein he insists 80% RRSP loans are legal in Canada), cheques to Scholz for the 4% loan; a Wellington loan agreement and bank account where cheques were deposited; and documents from WPTC.

57Habib was not interviewed by the affiant or his predecessor. All information contained in the ITO’s concerning her and relied upon by the affiant comes directly from the documents and information she provided to the OSC. In the course of his voluntary interview on August 13, 2015, Scholz was asked about the transactions concerning Habib. At the time, he was also shown the documents that Habib had provided to the OSC.

58It is relevant that these events concerned the future processing of the plan by Habib with WPTC. This occurred after Habib had participated in Scholz’ plan and had transferred her and her husband’s RRSP funds to WPTC and thereafter purchased shares of Red Hill. Thus, any suggestions by the affiant did not concern evidence of the offence alleged to have been committed. As it did not have to do with evidence of the offence or grounds to believe evidence of the offence would be located in a particular place, it would not have been appropriate to include it in any ITO. I accept that this issue is irrelevant to the issuance of the authorizations, or in any event, did not influence the evidence.

59With respect to para. 13 of the applicant’s factum, the affiant interviewed Singh and included his information in the initial ITO of October 21, 2015. Singh admitted, though reluctantly, his limited involvement with Scholz and Red Hill. I accept that, at the time, the affiant was not aware of any payments from these accounts being made to Singh to the tune of over $400,000.

60In the ITO of January 9, 2016 the affiant indicated that he had learned of the payments to Singh from an account controlled by the applicant. It was those payments to Singh which then made him a suspect. I accept that the affiant had no other information or proof that it was Singh’s signature on the Certificates or that he was involved with the investor clients or WPTC.

61The affiant indicated in the January 9, 2016 ITO that he continued to rely on the ITO of October 2015. I agree with the Crown that the fact that Singh became a suspect did neither alter nor require that prior information provided by Singh was no longer viable. It was still relevant as Singh had admitted his involvement with both Red Hill and Scholz. This was also borne out by WPTC records. Any assertion related to Singh’s diminishing credibility at that stage of the investigation did not affect the ITO’s validity. Even if it had been flagged, there remained sufficient information to sustain the granting of the authorization.

62In para. 33 of the ITO, the affiant wrote that Lalonde characterized the Scholz “unlocking” scheme as an “RRSP Strip” where funds are unlawfully removed from an RRSP account and the applicable taxes are not paid. This pronouncement by an expert was conclusive of the issue that this was an “RRSP Strip”. It is submitted that this may have influenced the issuance of the warrant.

63Here, I tend to agree with the applicant. The impugned paragraphs in the ITO are misrepresentations of the conversation the affiant had with Lalonde. The description of the information gleaned from Lalonde cannot be interpreted in the manner reproduced in the ITO.

64However, even if I redact all references to Lalonde and the “RRSP Strip”, in my view, the warrant could still issue. The impugned paragraphs did not outweigh or usurp the rest of the evidence from witnesses and documents referred to in this and the previous six ITO’s. In other words, I am satisfied that the issuing justice would have reached the same conclusion without having to rely upon the two paragraphs about Lalonde’s information. There remained sufficient basis for the justice to issue the search warrant.

65I now turn to the other specific concerns raised in the applicant’s factum. October 21, 2015 - BMO records. Reference: At para. 10 of the applicant’s factum. Issue: Paras. 13 and 20 of the ITO: Habib had not been interviewed thus it was incorrect to state in the ITO that “the accountant, Scholz, had assured Habib that he had a plan whereby he could “unlock” her RRSP.” As mentioned, Habib provided a recording of her call with Scholz. That recording supports the statement in the ITO. It is clear and the affiant was permitted to rely upon it.

66Reference: At para. 11 of applicant’s factum. Issue: At paras. 25 and 31.1: Scholz stated he did not believe the Palantzas were associated with Northland Capital, however, the affiant wrote that Scholz confirmed they were the directors. At p. 8 of the transcript of his voluntary interview, Scholz indicates that the principal of Northland Capital is Anita Insanalli. At p. 9 when asked if there are other principals, Scholz replies that he suspects the Palantazas are listed as well as they had been contacted by the OSC. However, Scholz adds that he did not think so as they had nothing to do with the company. The Palantzas opened Northland Property Management Company and would deal with property management, while Northland Capital would buy the property. At p. 70, Scholz is shown corporate profiles, which includes the Palantzas as directors. For the profile of Northland Capital, he acknowledged that he orchestrated the incorporation of the company, however his lawyer actually incorporated it. Whereas for Red Hill, it was Scholz who incorporated it. The statement in the ITO that Scholz confirmed the Palantzas as directors of Northland was a reasonable inference given that Scholz acknowledged that he orchestrated these incorporations or transactions. There were no misrepresentations.

67Reference: At para. 11 of applicant’s factum. Issue: The affiant wrote that Scholz did not advise Habib that he was the controlling mind behind the corporations because technically Scholz did not own any shares, and Scholz never hid the fact that he had created the whole thing. The affiant used the applicant’s words. In his statement at Question 52, Scholz responds that technically he does not own any shares so he cannot be controlling the corporations. However, throughout the interview, Scholz does not hide that the whole thing was his creation and he admits he controlled the transactions between the companies: Scholz interview at pp. 21, 47-48.

68Control in the context of the interview had two meanings. Scholz initially responded in terms of owning majority shares and controlling a company in that fashion. The affiant was referring to the decision maker of the corporations. In the end, Scholz agreed that he created the program or mechanism for the use of the RRSP funds. The statement summarizes the true nature of the relationship between Scholz and the companies. There is no misrepresentation.

69Reference: At para. 12 of applicant’s factum. Issue: Para. 25 of the ITO: Again, the affiant did not include in the ITO that the Palantzas could not recall the reason for incorporating Northland Capital. At para. 25 the affiant sets out in 5 subparagraphs the extent of his interview with the Palantzas. It coincides with the transcript of that interview. The affiant shows them the corporate profile in which they are included as directors. The affiant also asks them pointed questions about what they knew of the business of Northland Capital. They thought the company did not have business and they were not aware of any shares being issued. The Palantzas’ answers were very clear on these key points.

70I agree with the Crown that Scholz wishes the Court to speculate that perhaps the Palantzas were at one time aware that the company was going to issue shares. However, the Palantzas were asked specific questions about the issuance of shares. By the end of the interview, it did not matter the reason for incorporating the company and what the Palantzas might have been told or knew at the time. What mattered was that for a company that they thought was essentially defunct, they were not involved and were not aware of how the company was being actually used. That pertinent information was included in the ITO. It would have added nothing to the grounds to include that the Palantzas could no longer recall why it was incorporated. The ITO would still have issued.

71December 23, 2015: Search Warrant for the Back-Up Records for the Two Accounts at the BMO identified in the October 21, 2015 ITO. Reference: Para. 27 of the ITO. Issue: hiding ownership in the companies. From the interview Mr. Ley did give a definitive answer that he did not know who owned Northland Capital. Then he gave an answer in hindsight which essentially was that he did not know the details of how this worked but that he might still have participated. Mr. Ley’s response in hindsight was not evidence of the fraud. It was not relevant to or appropriate for such evidence to be relied upon in the ITO.

72January 20, 2016: Search Warrant for Bank Records of Accounts at the TD and Royal Bank, including account profile and statements. Reference: At para. 17 of Applicant’s factum. Issue: Para 29 of the ITO: Description of Ms. Sangster’s interaction or knowledge of Scholz. There is a difference between ‘she did not meet with Scholz’ which was written in the ITO versus ‘she never heard of a person named Scholz’ which is one of the questions asked in the interview. However, I agree with the Crown that the summary phrase used in the ITO must be looked at in totality of the ITO and the circumstances. From this ITO, it is evident that Scholz is behind Red Hill; and that Scholz operated using WPTC for share purchases in Red Hill. From the interview of Sangster and other parts of para. 20 of the ITO, it is clear that Sangster, through others, obtained and signed documents which lead her to WPTC and to owning shares in Red Hill. The affiant reasonably concluded that given this information, Sangster had not met Scholz. With the entirety of the information contained in the ITO, that statement is neither incorrect nor did it misrepresent Ms. Sangster’s evidence.

73March 2, 2016: Search Warrant for Back Up Records for Transactions of the accounts identified earlier at the BMO, and account profiles for other accounts; and at BNS, Bank Account profiles and statements and Back Up Records for certain accounts and transactions. Reference: At para. 11 of the applicant’s factum - Issue: The affiant omitted that from the referrals from Mr. Tulsiani there were only seven participants who took part. I observe that in the last bullet of para. 11 of the affiant’s factum, the applicant does not specify in which ITO this was an issue. Nonetheless, while this may have been a minor omission by the affiant, it did not mislead the issuing justice. I note that this information was included in the next ITO.

74At para. 34 of the ITO. Issue: Scholz hid his involvement in the companies. The applicant takes no issue with WPTC’s evidence throughout that he did not reveal or make it clear to WPTC that he created and controlled every part of this plan, including the companies, the bank accounts, and the funds. The affiant interviewed several witnesses many of whom were not clear how this plan operated or even which companies were involved. They relied upon Scholz, his knowledge, his representations and his assurances that this was legal.

75For the affiant this issue of knowledge of the structure and Scholz’ role was important and he recounted the evidence on this point. Again, with respect to Macaulay, the affiant writes that the witness understood that all of the companies involved… “were controlled by Scholz”. The fact that Macaulay understood these were Scholz’ companies did not take away or dismiss the other evidence in the entirety of the affiant’s investigation about Scholz’ role.

76Reference: At para. 38 of the ITO: It was not made clear that “Roland and Alysse” had been interviewed together. True, the wording could have been made clearer. In any event, whether or not the justice understood it was a joint interview would not have affected the outcome as this ITO contained an abundance of evidence for the warrant to issue, including the interviews of six other persons, plus financial information. In fact, there were other witnesses and financial records that justified the affiant’s grounds.

77July 8, 2016: Search Warrant to search the residences associated with the applicant at 30 Sir Williams Lane and 32 Ringley Avenue, both in Toronto. Reference: At paras. 26 - 30 of applicant’s factum. Issue: Para 34e of the ITO: The affiant only provided some of the statements contained in the Officer’s Certificate, (the Officer being the applicant’s spouse), and this affected the proper context. In para. 34, subpara. a-g, the affiant recounts the information provided in an affidavit from Steve Youngman, (“Youngman”). At para. 6 (1-10), Youngman refers to the statements in the Officer’s Certificate which Scholz provided to Youngman for both Northland Capital and Red Hill. In subparagraph 34e, the affiant indicates two of those statements from para. 6 of the Youngman’s affidavit; the person purchasing the shares is not to use or obtain property held in connection with a deferred or tax saving plan without including the value of the property in their income; and the purchaser of the shares did not receive a benefit. The affiant included a footnote to explain the relevance of these two particular statements in the context of his investigation, namely, that those statements hardly seemed correct when RRSP funds were being used and those funds are being returned to the purchaser.

78I observe that the applicant takes no issue with para. 34 being a fair representation of the contents of Youngman’s affidavit. The applicant does not indicate how including all the statements in the Certificate would have changed the context. The paragraphs refer to the fact that there were other statements. Had the issuing justice wanted, he or she could have inquired further. In any event, there was sufficient evidence even without this evidence for the warrant to issue. With respect to paras. 26, 28 - 30 and how the applicant attempts to tie this with para. 27; by June 28, 2017, all ITO’s had been filed and authorizations issued. The applicant has not indicated how Youngman’s information from June 28 should have been known to the affiant and included in any of the earlier ITO’s.

79The applicant concludes with the argument that Vanderlaan repeatedly manipulated and strategically omitted important evidence when swearing the ITO’s. He failed to maintain a proper investigative record in relation to critical pieces of evidence that he included in his ITO’s. The applicant submits that the cumulative effect of all of the misrepresentations ought to afford a remedy to set aside an otherwise valid warrant.

80Despite the presence of reasonable and probable grounds after excising false, misleading or material non-disclosure from the ITO, it is accepted that a court has a residual discretion to set aside a warrant. Such is the case when the police conduct in obtaining the authorization is so subversive of the prior judicial authorization process, that the authorization must be quashed in order to protect the process and the function it serves. Deliberate deception on core material issues, as opposed to inadvertent errors or minor misstatements, requires strong denunciation from the court: R. v. Ahmad, [2009] O.J. No. 6162. See also R. v. Paryniuk, 2017 ONCA 87, 2017 O.J. 474 (OCA) at para 69 - 70.

81I am satisfied that the ITO’s, on its or their face, presents adequate temporal and factual underpinning for the information in support of the authorizations. The issue is whether in this case, any misrepresentations or omissions were so subversive of the search warrant process as to, in effect, amount to an abuse of process and require that the warrant be quashed: Araujo, R. v. Vivar, 2009 ONCA 433.

82It is clear from the appellate jurisprudence that if non-disclosure of a material fact is strategic on the part of the police that omission is capable of invalidating the warrant, notwithstanding the existence of reasonable and probable grounds for the warrant to issue. That is far from what occurred here. There was no improper motive or intention to mislead or deceive on the facts of this case. There is no basis to exercise this Court’s residual discretion.

83All the ITO’s, and the history of the authorizations and the investigation in this matter were before the issuing justice every time a further authorization was sought. This indicated to the justice what it was that the affiant swore he believed to be true at the time of each of those earlier ITO’s. If there was some discrepancy, it was present for the justice to consider in whether to grant the further authorizations.

84In my review, I am satisfied that there is evidence upon which a judicial officer, when reading the ITO(s) as a whole could have issued the warrant. My conclusion is based upon a finding that the informational content does support the reasonable inferences advanced by the ITO affiant and, in turn, provide a foundation and factual underpinning upon which a judicial officer, acting reasonably and judicially could have issued a warrant or production order.

85I find that the applicant’s s. 8 Charter rights was not breached. In any event, as discussed below, I would admit the evidence pursuant to s. 24(2) of the Charter.

Section 24(2) of the Charter

86Section 24 of the Charter states:

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.

(2) Where, in proceedings under subsection (1), a court concludes that evidence was obtained in a manner that infringed or denied any rights or freedoms guaranteed by this Charter, the evidence shall be excluded if it is established that, having regard to all the circumstances, the admission of it in the proceedings would bring the administration of justice into disrepute.

87In the seminal case of R. v. Grant, 2009 SCC 32, [2009] S.C.J. No. 32 the Supreme Court of Canada held that the purpose of s. 24(2) is to maintain the good repute of the administration of justice. The provision focuses not on immediate reaction to the individual case. The disrepute is to be considered by the court in its role of maintaining the integrity of, and public confidence, in the justice system. It is an objective inquiry and it asks whether a reasonable person, informed of all relevant circumstances and the values underlying the Charter would conclude that the admission of the evidence would bring the administration of justice into disrepute.

88The approach to s. 24(2) requires consideration of the long-term, probable effect of admission of the evidence from the perspective of society at large. The focus is not on punishing the police or compensating the accused.

89In Grant, the court stated that ignorance of Charter standards must not be rewarded or encouraged and negligence or wilful blindness cannot be equated with good faith. In R. v. Harrison, 2009 SCC 34, [2009] S.C.J. No. 34, the court points out that a reviewing court should be concerned or disassociated itself where the police knew or ought to have known that their conduct was not Charter-compliant.

90The Supreme Court outlined the following three lines of inquiry to take into consideration when determining whether the admission of the evidence brings the administration of justice into disrepute. They are:

(1) the seriousness of the Charter-infringing state conduct;

(2) the impact of the breach on the Charter-protected interests of the accused; and

(3) society’s interest in the adjudication of the case on its merits.

91The main concern of the court is to preserve public confidence in the rule of law and its processes. Even a finding that a Charter breach falls at the most serious end of the spectrum is not dispositive of the s. 24(2) inquiry. An accurate assessment of the seriousness of a Charter breach requires an inquiry into where the police conduct falls on the continuum between good faith, lack of good faith, and bad faith.

92In considering the seriousness of the Charter-infringing state conduct, the court must ensure that they are not in effect condoning state deviation from the law. This is to be determined by looking at the breach on a spectrum where inadvertent or minor violations will be viewed differently from wilful or reckless disregard of Charter rights.

93The impact on any breach on the Charter-protected interests of the accused calls for an evaluation of the extent to which the breach actually undermined the interests protected by the right infringed. The court should assess whether any breach, if there was one, was “fleeting or technical” as opposed to “profoundly intrusive”. This factor does not assess the extent to which the state intruded on the individual generally, but only the extent to which the state intruded on the individual beyond any intrusion that was lawfully permitted. In Grant the Supreme Court described this line of inquiry as “the danger that admitting the evidence may suggest that Charter rights do not count”. The seriousness of the intrusion upon the rights of an accused may vary greatly.

Application of These Principles to the Present Case:

94As mentioned, there are three lines of inquiry at play under section 24(2) of the Charter. I must consider each of the three factors and then determine whether, on balance, the admission of the evidence obtained by the Charter breach would bring the administration of justice into disrepute. Each factor is of equal import.

The seriousness of the Charter-infringing state conduct:

95The question under this first inquiry is whether admission of the evidence would bring the administration of justice into disrepute. Police conduct that show a wilful or reckless disregard of Charter rights will inevitably have a negative effect on the public confidence in the rule of law.⁵

96The purpose behind the requirement of prior authorization is to ensure that, prior to the search; the conflicting interests of the state and the accused are weighed against each other so that the individual's right to privacy will be breached only where it is appropriate to do so.

97The role of a justice respecting the review and issuance of a judicially-authorized right of search is a fundamental component of our democratic society to be free from warrantless intrusions. When the police are conducting an investigation and relying on a prior judicial authorizations for a search of institutions or a private residence, they must provide a sufficient and factual basis to permit the issuing justice to exercise his or her duty and judicial authority.

98An officer’s subjective belief that the applicant’s rights were not affected does not make the violation less serious unless the belief was reasonable. In my view, the affiant was fully candid with the justice as to the circumstances surrounding the grounds contained in the ITO.

99I do not find bad faith and the affiant’s conduct in this case was neither deliberate nor appeared to have adopted a cavalier attitude towards the applicants’ constitutional rights. While the language could be clearer, the ITO did not contain erroneous and misleading information, with one exception. Even with that exception, the misleading statement was not a product of bad faith. I do not equate the lack of bad faith with a finding of good faith.

100In this case, I find that the admission of this evidence would not send a message that the justice system is somehow condoning serious state misconduct and its admission would greatly undermine public confidence in the justice system. In my view, this factor weighs in favour of inclusion.

The impact of the Charter violation on the Charter-protected interests of the accused:

101The second branch of the test is outlined in Grant at paras. 76 & 78:

...focuses on the seriousness of the impact of the Charter breach on the Charter-protected interests of the accused. It calls for an evaluation of the extent to which the breach actually undermined the interests protected by the right infringed. The impact of a Charter breach may range from fleeting and technical to profoundly intrusive. The more serious the impact on the accused’s protected interests, the greater the risk that admission of the evidence may signal to the public that Charter right however high-sounding, are of little actual avail to the citizen, breeding public cynicism and bringing the administration of justice into disrepute.

102The Crown submits that consideration of the impact on the Charter protected interests of the accused also favours admission of the documents and records. As discussed, the applicant’s reasonable expectation of privacy in the records or documents held by the banks or financial institutions is negligible.

103Crown counsel concedes that the residence in question affords a high degree of privacy, yet the search of the house for the documents in this case ought to afford a lesser degree of expectation of privacy. With respect to the residence, it is clear that dwelling houses enjoy the highest degree of privacy.

104That being said, discoverability retains a useful role in assessing the actual impact of the breach. It is well established that this factor may weigh against a finding that the breach has had a meaningful impact on the accused’s Charter-protected interests. The affiant had reasonable and probable grounds to obtain a warrant. In this case, the searches are not a serious Charter violation. My consideration of the second factor weighs in favour of inclusion.

Society’s interest in the adjudication of the case:

105In considering this factor, the question to be asked is "whether the truth-seeking function of the criminal trial process would be better served by admission of the evidence or by its exclusion." The reliability of the evidence is an important factor in this line of inquiry. If the breach in question undermines the reliability of the evidence, that militates in favour of exclusion.

106This aspect of the inquiry considers whether the truth-seeking function of the criminal trial process would be better served by admission or exclusion of the evidence. As the Supreme Court stated in Grant:

Society generally expects that a criminal allegation will be adjudicated on its merits. Accordingly, the third line of inquiry relevant to the s. 24(2) analysis asks whether the truth-seeking function of the criminal trial process would be better served by admission of the evidence, or by its exclusion. This inquiry reflects society’s ‘collective interest in ensuring that those who transgress the law are brought to trial and dealt with according to the law.’ … Thus the Court suggested in Collins that a judge on a s. 24(2) application should consider not only the negative impact of admission of the evidence on the repute of the administration of justice, but the impact of failing to admit the evidence.

The Court must ask itself “whether the vindication of the specific Charter violation through exclusion of the evidence exacts too great a toll on the truth-seeking goal of the criminal trial.

107The evidence of the financial documents and banking records are reliable and highly probative. The documents seized from various agencies and banks existed entirely independently of the Charter breach and are considered non-conscriptive evidence. There is no dispute that these documents and records are of high significance to the prosecution and are not of marginal value.

108The final step is a balancing of all of these factors. The impact on the Charter-protected interests of the applicant was not serious. The conduct in this case did not demonstrate a deliberate disregard of Charter rights. In my opinion, there is no negative impact on the public confidence in the administration of justice and the rule of law.

109The documents and records existed independently of any alleged Charter breach. The evidence is of great probative value to the Crown's case as a whole considering the truth-seeking goal of the trial and the public interest in the prosecution of serious crime. The balancing of the s. 24(2) factors militate in favour of admission of the evidence obtained from the judicial authorizations.

Conclusion:

110The application is dismissed. I find that the applicant has not established a breach of his rights pursuant to s. 8 of the Charter.

111In any event, in accordance with s. 24(2) of the Charter, the admission of the evidence arising from the various warrants issued in this case would not bring the administration of justice into disrepute.

A.J. Goodman J.

Footnotes

1. 1I refer in part to Hill J.’s comprehensive analysis of the applicable law in the case of R v. Ngo, [2011] ONSC 6676 (Sup. Ct.).
2. 2R. v. Chan, 1998 5765 (ON CA), [1998] O.J. No. 4536 (Q.L.) at para. 4, 40 W.C.B. (2d) 143 (C.A.); R. v. Melenchuk and Rahemtulla, [1993] B.C.J. No. 558 (Q.L.) at para. 15-18, 19 W.C.B. (2d) 194 (C.A.); Simonyi Gindele et al. v. British Columbia (Attorney General) (1991), 1991 984 (BC CA), 2 B.C.A.C. 73 (C.A.) at 79.
3. 3These are detailed in the Crown’s factum at pp. 7-17.
4. 4Although I note that at various times, the applicant attempts to distance himself from these two entities.
5. 5See R. v. Grant at para. 74. See also para. 75.