COURT FILE NO.: CR-20-0364-00
DATE: 2021 07 14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
V. Aujla, for the Crown
- and -
MAUREEN BARRETT
C. Douglas, for the Defendant
HEARD: June 7, 2021
REASONS FOR JUDGMENT
André J.
[1] The Peel Regional Police Force charged Ms. Barrett with defrauding the Royal Bank of Canada, her former employer, of over $5,000, pursuant to s. 380 of the Criminal Code. Ms. Barrett’s counsel has conceded that the Crown has proven the actus reus of the offence beyond a reasonable doubt but submits that the Crown has failed to prove the mens rea of the offence to the requisite legal standard.
SUMMARY OF THE CROWN EVIDENCE
[2] The Crown’s case is based on the viva voce evidence of bank officials, bank records and bank surveillance footage which shows Ms. Barrett depositing a cheque in the amount of $18,850 into her RBC account on July 28, 2017, which she wholly depleted within days of its deposit.
[3] Sean Scanlon, the Senior Director of Investigations at the CIBC for sixteen years, reviewed the bank’s records of a company called Genesis Product Management (“Genesis”) and its bank account number 1000-532. The bank’s records show that this account had been closed on December 9, 2009. Mr. Scanlon testified that the records relating to a closed account are normally purged and expunged seven years after the closure of the account. However, the records of the Genesis account were not destroyed in accordance with that policy.
[4] Dora Simoes-Pereira, the RBC’s Manager of Investments since 1998, testified that Ms. Barrett was both an employee and a client. Ms. Barrett had certain benefits as an RBC employee which included lower lending rates, no banking fees, special credit cards and the ability to deposit cheques into her account without the cheques having a “hold” placed on them for a period of time. This policy enabled an employee to access funds deposited into an account almost immediately after a deposit into the account.
[5] On July 28, 2017, Ms. Barrett deposited a cheque in the amount of $18,850 into her RBC account. This cheque was one from a company called Genesis Project Management and Consulting Inc. from a Bank of Montreal account, number 1000 532. The cheque was eventually returned because the BMO bank records indicated that the account had been closed in December 2009.
[6] Ms. Simoes-Pereira did a corporate profile search at the Ontario Ministry of Government Services for Genesis Project Management Consulting Inc. The search indicated that the company’s sole administrator and director was Ms. Barrett.
[7] Surveillance stills from an RBC surveillance camera showed Ms. Barrett at an RBC branch on July 28, 2017 and on July 31, 2017. The records show that Ms. Barrett used her bank card at 2:29 p.m. on July 28, 2017 to deposit the cheque of $18,850. Prior to the deposit the account had been overdrawn by $92.77.
[8] Within days of the deposit, Ms. Barrett made a number of withdrawals from her RBC account, including a “branch to branch” transfer of $10,086 and an electronic transfer of $2,500 for a Transat Holiday payment. The records also show that on July 29, 2017, there were a number of unsuccessful attempts to withdraw $2,847.66 with a visa debit card. On that date, Ms. Barrett made purchases from a number of businesses including Penningtons, Walmart, Marshalls and Splendid Style. She also made a payment of $2,500 to Capital One Mastercard, a $1,180 payment to a company called “Pay Today” and a payment of $1,073 to another company called “Cash for You”.
[9] The RBC sent Ms. Barrett a letter dated September 13, 2017, claiming a debt of $14,641. This amount represented the $18,850 which Ms. Barrett had deposited less the outstanding wages and benefits owed to her.
[10] Ms. Simoes-Pereira also testified that in 2016 and 2017, Ms. Barrett deposited two cheques in the name of Genesis Project Management and Consulting Inc. into another RBC account. On December 14, 2016, she deposited a cheque in the amount of $1,450 into her RBC account. Ms. Barrett made a series of transactions before the cheque was returned. On January 16, 2017, Ms. Barrett again deposited a similar cheque in the amount of $2,550 into her RBC account. This cheque reduced the overdraft in Ms. Barrett’s RBC account. Ms. Barret then did a number of transactions, commencing on January 16, 2016, thereby creating a new overdraft in her account. On July 20, 2017, Ms. Barrett paid $2,810.41 to clear the overdraft in her RBC account, leaving a zero balance in the account.
SUMMARY OF MS. BARRETT’S EVIDENCE
[11] The fifty-year old Ms. Barrett has four diplomas in the fields of Business Administration, Hotel and Restaurant Management, Project Management and Police Foundation studies. She also took courses at the RBC. She obtained a licence to sell home and auto insurance and obtained a licence to sell life insurance. Ms. Barrett worked for the RBC from 2008 to 2017 and had three accounts at the RBC; a staff account where the bank deposited her salary, another savings account and a TFSA account.
[12] Ms. Barrett incorporated Genesis in 2004 after consulting with Iris Douglas, a pastor in her church. Ms. Douglas served as the accountant. She unfortunately passed away in November 2017.
[13] Ms. Douglas and herself shared the profits of Genesis which were derived from their contracting services. Both Ms. Douglas and herself had signing authority with respect to the Genesis account. Ms. Barrett typically used her debit card to make purchases on behalf of the company but for larger purchases, Ms. Douglas would write her a cheque. The company earned $6,000 to $7,000 per month. Ms. Barrett wrote cheques to herself against the Genesis account. She continued to do business with Genesis until November 2017 and denied that the Genesis account was ever closed as Sean Scanlon testified.
[14] Ms. Barrett testified that she cashed the December 2016 cheque in the amount of $1,450 but testified that it had been signed by Ms. Douglas. She stated that the cheque was returned NSF but believed that there was enough money in the Genesis account to cover the cheque.
[15] Ms. Barrett testified that she wrote the January 2017 cheque for $2,550 payable to cash. She deposited it into her RBC savings account but it was also returned NSF. She spoke to Ms. Douglas who told her that there was no reason why this occurred. She believed there was enough money to cover the cheque. In July 2017, she transferred money out of one of her accounts to reduce the overdrawn balance in this account.
[16] On July 28, 2017, Ms. Douglas gave her the cheque for $18,850 which represented payment from a pizza factory for which Ms. Barrett performed services. Ms. Barrett admitted to writing the cheque but testified that she did not sign it. She deposited the cheque into her RBC account and used the cheque to pay bills and make purchases from various businesses. The sum of $10,000 or $11,000 was for equipment she purchased. Ms. Barrett testified that the Genesis account was still open when she cashed the $18,850 cheque and that there were enough funds in the account to cover the amount of the cheque. She found out four to five days after she had deposited the cheque that it had been returned NSF. She stopped working with RBC on September 1, 2017 after receiving an offer of employment from an insurance company. Ms. Barrett denied receiving a demand letter from the RBC for the $18,850 she had deposited into her account.
ANALYSIS
[17] The only issue in this case is whether or not the Crown has proven beyond a reasonable doubt that Ms. Barrett intentionally deprived RBC of the amount of $18,850 which she deposited into her RBC staffing account on July 28, 2017.
The Defence’s Position
[18] On behalf of Ms. Barrett, Ms. Douglas submits that the Crown has failed to prove the mens rea of the offence beyond a reasonable doubt. She bases this position on the following:
i) Ms. Barrett was a credible witness and honestly believed that there was enough money in the Genesis account in July 2017 when she deposited the $18,850 cheque into her RBC account.
ii) She did not believe that depositing the cheque into the account would result in the RBC suffering any deprivation. She thought the cheque was valid and believed that the Genesis account was in order.
iii) She had taken reasonable steps in the past to remedy the past transactions in 2016 and 2017 where the Genesis cheques had been returned NSF.
iv) There is no evidence that Ms. Barrett had either acted recklessly in depositing and/or withdrawing any money or that she was wilfully blind when she had done so.
The Crown’s Position
[19] The Crown submits that the documented evidence reveals that the Genesis account had been closed in 2009. Furthermore, that Ms. Barrett’s evidence is both unworthy of belief and unable to raise a reasonable doubt in the Crown’s case that she knew that the cheque in question was bogus and quickly depleted the account because she knew that the RBC would not hold the cheque for a few days before releasing the funds to the depositor.
THE LAW
[20] Section 380(1) of the Code provides that:
Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,
(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or
(b) is guilty
(i) of an indictable offence and is liable to imprisonment for a term not exceeding two years, or
(ii) of an offence punishable on summary conviction,
where the value of the subject-matter of the offence does not exceed five thousand dollars.
[21] In R. v. Théroux, 1993 CanLII 134 (SCC), [1993] 2 S.C.R. 5, the Supreme Court of Canada noted at para. 18 that the “test is not whether a reasonable person would have foreseen the consequences of the prohibited act but whether the accused subjectively appreciated those consequences at least as a possibility. In applying the subjective test, the court looks to the accused’s intention and the facts as the accused believed them to be”. The Court further noted at para. 24 that:
Correspondingly, the mens rea of fraud is established by proof of subjective knowledge of the prohibited act, and by proof of subjective knowledge that the performance of the prohibited act could have as a consequence the deprivation of another (which deprivation may consist in knowledge that the victim's pecuniary interests are put at risk).
[22] I am also mindful that two other legal principles are engaged in this trial.
[23] First, in R. v. W.(D.), 1991 CanLII 93 (SCC), [1991] 1 SCR 742, the Supreme Court of Canada set out the following principles when the issue of credibility arises:
a) If I believe the accused, I should acquit;
b) If I disbelieve the accused, but find that her evidence raises a reasonable doubt in the Crown’s case, I should acquit;
c) Even if I disbelieve the accused or find that the evidence is incapable of raising a reasonable doubt in the Crown’s case, I can only convict if I am satisfied of the accused’s guilt beyond a reasonable doubt, based on the totality of the evidence I accept.
[24] Second, the Crown’s case that Ms. Barrett intentionally defrauded the RBC is based on circumstantial evidence. As a result, I can only find Ms. Barrett guilty of the offence if her guilt is the only reasonable inference I can draw from the evidence.
ANALYSIS
[25] Ms. Barrett’s testimony clearly suggests, if believed, that she had no subjective knowledge that the prohibited act could have, as a consequence, the RBC being deprived of $18,850. However, I find, for the following reasons, that Mr. Barrett’s testimony is unworthy of belief and is incapable of raising a reasonable doubt in the Crown’s case.
[26] First, Ms. Barrett testified that the Genesis account remained open as recent as November 2017 and that she continued to conduct business on the company’s behalf and to deposit money into the account. However, the bank’s records indicate that the company’s account was closed in 2009. Ms. Barrett disputes this but has presented no documentary evidence that confirms her claim that the account remained open. Furthermore, it is passing strange that Ms. Barrett testified that the records confirming that the account remained open in 2017, were perhaps in storage. One would have expected that Ms. Barrett would have produced this evidence in light of the Crown’s contention that the account was closed in 2009.
[27] Second, Ms. Barrett testified that there was always money in the account. However, despite the availability of this money, the RBC’s bank records indicate that Ms. Barrett borrowed money, presumably at high interest rates, from companies such as Cash 4 You and Pay 2 Day. When asked why she would have done so, she lamely replied, “because I choose to do it this way”.
[28] Third, Ms. Barrett deposited two cheques which were subsequently returned NSF in December 2016 and January 2017. And yet upon depositing the cheque in July 2017, Ms. Barrett never sought to confirm that the Genesis account contained the necessary funds to ensure that this cheque would not be returned NSF.
[29] Fourth, I find it rather incredible that Ms. Barrett never checked the account between 2009 and 2017 to ensure that it had funds in it. Ms. Barrett is knowledgeable about business and worked for the RBC for many years. It is inconceivable that she would not have checked the Genesis account during this period if the company was still in business. I find as a fact that she failed to do so because she knew that the account was closed.
[30] For the above reasons, I find Ms. Barrett’s evidence to be unworthy of belief and incapable of raising a reasonable doubt in the Crown’s case.
Has the Crown proved beyond a reasonable doubt that Ms. Barrett had subjective knowledge that the prohibited act could have as a consequence the deprivation to the RBC alleged by the Crown?
[31] In my view, the Crown has proven this component of the mens rea of the offence beyond a reasonable doubt. I say so for the following reasons.
[32] I have already found as a fact that Ms. Barrett knew that the Genesis account was closed when she deposited the cheque in the amount of $18,850 into her RBC account on July 28, 2017. In my view, the following evidence is relevant to the question whether the deposit of the cheque and the subsequent depletion of the account would have deprived the RBC of the deposited funds.
[33] First, it is significant that Ms. Barrett made the deposit within a week of bringing the account balance to zero. Second, Ms. Barrett quickly proceeded to deplete the account before the RBC could find out that the cheque would be returned NSF. Third, the reason for the fast withdrawals from the account, which include debt repayment, shopping at stores such as Penningtons, Marshalls and Splendid Style, the transfer of over ten thousand dollars and the payment of the fare for an overseas trip, all appear to be personal rather than business expenditures.
CONCLUSION
[34] For these reasons, I find that Ms. Barrett’s guilt is the only reasonable inference to be drawn from the evidence that I accept. Accordingly, I find her guilty as charged.
André J.
Released: July 14, 2021
COURT FILE NO.: CR-20-0364-00
DATE: 2021 07 14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HER MAJESTY THE QUEEN
- and -
MAUREEN BARRETT
REASONS FOR JUDGMENT
André J.
Released: July 14, 2021