R. v. Faulkner, 2022 ONSC 3074

COURT FILE NO.: CR-19-15004

DATE: 20220629

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN

– and –

Ian Blake Faulkner

Defendants

Mitchell Flagg, for the Crown

Adib Nadi, for the Defendant

HEARD: January 24, 25, 26, 27, 28, February 1, 2, 4 22, 2022

SOSNA J

REASONS FOR JUDGEMENT

Ian Faulkner stands charged:

1. That he, between the 30^th^ day of January in the year 2017 and the 5^th^ day of June 2017, at the Townships of Brock and Uxbridge, in the Province of Ontario did, by deceit, falsehood or other fraudulent means, defraud North House of money exceeding five thousand dollars, contrary to s.380, subsection (1), clause (a), of the Criminal Code of Canada;

Further, that he:

2. Between the 4^th^ day of February in the year 2017 and the 5^th^ day of June in the year 2027 at the Townships of Brock and Uxbridge, in the Province of Ontario did, while bound by a probation order made by the Superior Court of Justice on the 3^rd^ day of February in the year 2017 fail, without reasonable excuse, to comply with such order, namely to keep the peace and be of good behaviour, contrary to s. 733.1 subsection (1) of the Criminal Code of Canada.

1Ian Faulkner (Faulkner) has pled not guilty before a Judge without a Jury to both counts.

2At the time of the alleged fraud, Faulkner was bound by a probation order with a term that he keep the peace and be of good behaviour. If Faulkner is found guilty of Fraud Over $5,000 (Count 1), the Crown and defence agree, that Faulkner also be found guilty of Breach of Probation (Count 2) without the necessity of calling evidence.

BACKGROUND HISTORY

3In 2017, North House operated as a small nonprofit registered charity that served the needs of the homeless population in three northern municipalities of Durham Region. North House maintained two residential rental properties and provided rent subsidies and other financial assistance to its clients.

4North House had a Board of Directors (the Board) and a small handful of employees. In the spring of 2017, North House moved its offices from Cannington to Uxbridge, Ontario.

5On January 30, 2017, North House hired Faulkner to serve as its Executive Director. Faulkner’s responsibilities included, amongst other things, supervising North House’s daily operations, ensuring clients were served, and confirming the rent supplements.

6In his capacity as Executive Director, Faulkner used his position as Executive Director to access two credit cards linked to North House’s account with TD Canada Trust. It is alleged that he charged a variety of expenses including restaurants, hotels, travel, cash advances, and tickets to sporting events for unauthorized use.

7Further, Faulkner negotiated a number of cheques drawn on North House’s TD Canada Trust chequing account, claiming the funds were used to pay expenses and construction costs associated with North House’s move from Cannington to Uxbridge, Ontario.

8Despite repeated requests that Faulkner provide documentation including receipts and invoices for the credit card and banking transactions, very few were provided.

9Faulkner was terminated four months later in June 2017, when the Board determined that Faulkner’s credit card and banking transactions using North House funds were unauthorized. The unauthorized transactions were estimated to be over $60,000.00.

10At the time of the alleged unauthorized transactions, Faulkner was bound by a previous probation order effective February 2017, with a term that he be of good behavior and keep the peace.

11The police were contacted, and Faulkner was subsequently charged with Fraud Over $5,000.00 and Breach of Probation.

APPLICABLE CRIMINAL CODE PROVISIONS

FRAUD [Section] 380. (1)

12Everyone who, by deceit, falsehood, or other fraudulent means, whether or not it is a false pretense within the meaning of the 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……

13In the present matter, the Crown relies on “other fraudulent means” to prove the fraud allegation in Count 1.

BREACH OF PROBATION [Section] 733.1 (1)

14An offender who is bound by a probation order and who, without reasonable excuse, fails or refuses to comply with that order, is guilty of

(a) an indictable offence…

PROCEEDINGS AT TRIAL - AGREED STATEMENT OF FACTS

15As set out in Exhibit 2, pursuant to section 655 the Crown and Defence have agreed on the following Statement of Facts.

1. In January 2017, North House hired the accused, Faulkner, to serve as its Executive Director. A copy of his cover letter and résumé submitted in application for the position appear at Tab 1. A copy of the job offer letter appears at Tab 2.

2. On February 13, 2017, Faulkner opened chequing account 6685899 at TD Canada Trust bank. The documents at Tabs 5, Tab 6 and Tab 7 are bank records from this account and are admissible for all purposes in this proceeding. Faulkner is the person who conducted all of the customer transactions in this account.

3. TD Bank maintains surveillance footage (aka CCTV footage) in the usual and ordinary course of its business. When (as in this case) the footage is requested via a production order, TD has an internal team that pulls the relevant footage, which is then provided to its team that responds to production orders, and then it is passed along to the police according to the court order. The surveillance still images from this CCTV footage found at Tab 8 are admissible for all purposes in this proceeding. The identity of the person conducting the transactions in Faulkner’s accounts is admitted to be Faulkner.

4. North House had a business chequing account (account number 5205558) at TD Canada Trust, including during the period of February to June 2017. The documents at Tab 9 are bank records produced to the police by TD Bank regarding this account and are admissible for all purposes in this proceeding. The spreadsheet at Tab 10 represents cheques from the North House account that were deposited into Mr. Faulkner’s account. Tabs 10 and 11 are the bank records for this same account as produced to the police by North House. They are also admissible for all purposes in this proceeding.

5. North House also had a VISA credit card account issued by TD Canada Trust. The physical credit cards for this account were issued in the name of North House employees.

6. Between January and June 2017, Linda Green (Green), the financial coordinator for North House, and Faulkner had credit cards in their name. The numbers on the credit card in Green’s name changed over time. However, at any one time there was only one credit card in Green’s name.

7. The credit card numbers for Ms. Green and Mr. Faulkner’s cards were as follows:

Tab

Employee

Card Number

Date Issued

Statement Dates

14

Linda Green

4520 7090 2051 7891

February to May 2017

4520 7060 2103 4843

April 10, 2017

May 2017

4520 7060 2104 7035

June to July 2017

16

Ian Faulkner

4520 7090 2092 2059

March 23, 2017

April 2017 to July 2017

8. The credit card statements and account documents found at Tabs 14, Tab 15 and Tab 16 are admissible for all purposes in this proceeding.

9. The Visa accounts 4520 7090 2051 7891, 4520 7060 2103 4843, & 4520 7060 2104 7035 all belong to the same cardholder, Green, and are the same profile, just transferred to each other. This is also why only one account ownership enquiry was printed. The transactions for 4520 7090 2051 7891 begin on January 20, 2017, as there are no transactions before this time. Visa 4520 7090 2092 2059 does not have January, February, or March statements, as it was opened on March 23, 2017.

10. The summary charts found at Tabs 17, 18, and 19 are admissible for all purposes in this proceeding.

11. As part of its operations in the winter and spring of 2017, North House held monthly Board meetings. The finance coordinator, Linda Green, prepared financial reports for the Board’s review. Minutes were prepared for each of the monthly Board meetings. The documents at Tabs 20 to 25 are the minutes for the months of January, February, March, April, May, and June 2017. The documents at Tabs 26 to 30 are the excerpted financial reports for January, February, March, May, and June 2017. North House has not located any financial report for April 2017. All the documents at Tabs 20 to 30 are admissible for all purposes in this proceeding as business records of North House.

12. The communications at Tab 32 are printouts of email messages among employees of North House during the time Mr. Faulkner worked there and are electronic documents within the meaning of ss. 31.1 to 31.8 of the Canada Evidence Act, R.S.C. 1985, c. C-5, and are admissible for all purposes in this proceeding.

13. The document at Tab 34 is an excerpted version of the North House Shelter Policy and Procedures Manual (Policy Manual) dated October 27, 2014, which was in effect while Faulkner was an employee at North House. The Policy Manual is admissible for all purposes in this proceeding as a business record of North House.

14. The communications at Tab 36 are printouts of email messages between Faulkner and Green on May 29, 2017. They are electronic documents within the meaning of ss. 31.1 to 31.8 of the Canada Evidence Act, R.S.C. 1985, c. C-5, and are admissible for all purposes in this proceeding.

16As set out in Exhibits 4, pursuant to section 655, the Crown and Defence have agreed on the following statement of facts.

1. On November 29, 2021, Faulkner brought a third party records application in relation to his work e-mails from the following two e-mail addresses: coordinator@northhouse.ca and ianfaulkner@northhouse.ca

2. The e-mails from the e-mail address coordinator@northhouse.ca were all provided to the court by North House. These e-mails only went as far as February 13, 2017.

3. As of November 24, 2021, North House did not have access to the e-mails from the e-mail address ianfaulkner@northhouse.ca. As a result, these e-mails could not be produced to the court in response to the subpoena for the application.

4. The Application was heard on December 14, 2021. During the hearing, the parties agreed at the “likely relevance” stage of the analysis under R. v. O’Connor, 1995 51 (SCC), [1995] 4 S.C.R. 411, that any emails in three categories could be reviewed by the application judge to determine whether any of those emails were material to the defence in the sense that, without the material, Faulkner’s ability to make full answer and defence would be adversely affected.

5. The three categories of emails upon which the Crown and defence agreed were as follows:

   1. emails which related to Faulkner’s job responsibilities;
   2. emails which related to financial transactions at North House which were authorized; and
   3. emails which related to financial transactions at North House which were NOT authorized.

6. On December 17, 2021, Honourable Justice Michael McKelvey ruled that all e-mails that were produced in response to the subpoena and fell into the three categories as above would be disclosed to Faulkner and to the Crown.

17As set out in Exhibit 5 pursuant to section 655 the Crown and Defence have agreed on the following statement of facts:

1. Marsha Watts (Watts) was the treasurer and a member of the Board of Directors for North House during the time of Faulkner’s employment with North House.

2. During Faulkner’s employment with North House, Watts would only see him at the monthly Board meetings.

3. During one of the monthly Board meetings, the following events took place, according to Watts:

a. Faulkner requested for a credit card to be issued under his own name.

b. Watts asked “Why?”

c. During the conversation, Green explained to Watts that the North House credit card was used to purchase gas cards and for moving expenses for clients.

POSITION OF THE CROWN

18Relying on circumstantial and direct evidence, the Crown submits, Faulkner is guilty of fraud as alleged. When hired as Executive Director, Faulkner promoted himself as having significant experience working in charitable and nonprofit organizations. Faulkner would have a clear understanding that as Executive Director he was expected to carry out his duties guided by the best interests of North House and its mandate. Yet immediately upon being hired, Faulkner embarked on an unauthorized four month spending spree, purchasing goods and services for his personal use, under the guise of being business expenses.

19The transactions billed to North House were not supported by receipts or invoices. The transactions included amongst other things, purchases for golf equipment and sports clothing, Stubhub tickets, restaurant meals, travel and hotel accommodations, and Blue Jays baseball tickets. By the time the transactions were brought to the attention of the Board of Directors, North House was bordering on insolvency having been defrauded for more than $60,000.

POSITION OF THE DEFENCE

20The defence submits it is the Crown’s burden to prove Faulkner guilty beyond a reasonable doubt. Given the level of discretion afforded to the role of Executive Director, the Crown must establish beyond a reasonable doubt that the specific expenses were expressly not authorized and were for his personal use rather than business expenses. The evidence does not establish such facts on a standard of proof required.

21Further, the evidence in this matter is largely circumstantial. As such, the Crown has a high burden to establish that the only reasonable inference that arises from the evidence is that Faulkner knowingly defrauded North House. To come to that determination, the Court must consider the totality of circumstances, reviewing both the evidence and the lack of evidence called at trial.

22Citing the unreliability of the direct evidence and frailties of the circumstantial evidence introduced by the Crown, the defence submits, the Crown has failed to meet the high burden of establishing, that the only reasonable inference is that Faulkner knowingly defrauded North House.

23At trial the Crown called four witnesses. The defence called no evidence.

APPLICABLE CASE LAW

24As previously stated, the Crown relies on “other fraudulent means” to prove the fraud allegation in Count. The applicable test for proof of “other fraudulent means” is set out by the Supreme Court of Canada (SCC) in R. v. Theroux, 1993 134 (SCC), [1993] 2 S.C.R. 5, 79 C.C.C. (3d) 449.

Actus Reus

Relying on the test established in R. v. Olan, 1978 9 (SCC), [1978] 2 S.C.R. 1175, the Supreme Court of Canada held in Theroux that the actus reus of the offence is established by proof of two elements: (1) a dishonest act; and (2) deprivation.

(1) Dishonest act

The dishonest act is established by proof of (1) deceit, (2) falsehood or (3) other fraudulent means. The third category of “other fraudulent means” will be determined objectively by “what reasonable people consider to be dishonest dealing”: Theoreux at pp. 16-17. “Other fraudulent means” is a term that covers more ground than either deceit or falsehood. It includes any other means, which are not deceit or falsehood, properly regarded as dishonest according to the standards of reasonable people. Dishonesty with respect to the actus reus is to be measured against the objective standard of what a reasonable person would consider to be dishonest without regard for what the accused actually knew: R. v. Wolsey, 2008 BCCA 159, 233 C.C.C. (3d) 205, at para. 15. In instances under the fraud by deceit or falsehood category, “…all that need be determined is whether the accused, as a matter of fact, represented that a situation was of a certain character, when, in reality, it was not”: Theoreux, at p.17.

(2) Deprivation

Deprivation is established by proof of detriment, prejudice, or risk of prejudice to the economic interests of the victim, caused by the dishonest act. The Court in Theoreux also found that “economic loss was not essential to the offence; the imperilling of an economic interest is sufficient even though no actual loss has been suffered”: Theoreux, at p. 16.

Mens Rea

The mens rea of the offence is based on a subjective standard. It is comprised of two elements: (1) subjective knowledge of the prohibited act; and (2) subjective knowledge that 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): Theoreux, at p. 20. When considering the element of intent in fraud, the principal concern is to determine what knowledge an accused had of the conduct which has been found to be dishonest, and what knowledge or foresight he had of the consequences which amount to the deprivation alleged: R. v. Long, 61 C.C.C. (3d) 156, 1990 5405 (BC CA), at para. 35.

This proposition has been upheld by the Court of Appeal for Ontario (ONCA) in R. v. Earle, 2021 ONCA 34 at paras. 50-51 when they recited the following as the mens rea of the offence:

…where the court stated “fraud by “other fraudulent means” [as alleged in the present matter] does not require that the accused subjectively appreciate the dishonesty of his or her acts. The accused must knowingly, i.e., subjectively, undertake the conduct which constitutes the dishonest act, and must subjectively appreciate that the consequences of such conduct could be deprivation, in the sense of causing another to lose his or her pecuniary interest in certain property or in placing that interest at risk.

This same point was also held in R. v. Eizenga, 2011 ONCA 113, at para. 81:

[A] subjective intent to mislead is not an essential element of the offence of fraud. Instead, all that is required is subjective knowledge of the prohibited act, and that the act could have as a consequence the deprivation of another

THE INTERPRETATION OF “REASONABLE PERSON”

25Although the standard of a reasonable person may vary depending on the charge one is facing, a common theme emerges where the analysis, of the “reasonable person”, reveals some basic characteristics that they possess. A reasonable person is one who is “reasonable, informed, practical and realistic”, someone who “considers the matter in some detail” and is “dispassionate and fully apprised of the circumstances of the case”: see R. v. S. (R.D.), 1997 324 (SCC), [1997] 3 SCR 484, per Cory J; R. v. Collins, 1987 84 (SCC), [1987] 1 SCR 265, per Lamer J.

26In the context of fraud charges, conduct that would lead a reasonable person to conclude the conduct is deceitful or dishonest includes:

• Silence or omission as such that would mislead a “reasonable person”: R. c. E. (J.) (1997), 1997 10605 (QC CA), 117 C.C.C. (3d) 275 (C.A. Que.), at paragraphs 29-3;
• Where a reasonable person would find the defendant’s conduct to be deceitful. Examples of other fraudulent means include exploiting weaknesses of victims, personal use of corporate money and unauthorized diversion of funds: R. v. Drakes, 2006 730 (ON SC), 2006 CarswellOnt 1585, [2006] O.J. No. 129, [2006] O.T.C. 24, [2006] C.C.S. No. 3920 (WL), and;
• Conduct which reasonable decent persons would consider dishonest and unscrupulous: R. v. Zlatic, 1993 135 (SCC), [1993] 2 S.C.R. 29, 79 C.C.C. (3d) 466

27With this information in mind, questions to consider are:

• Would the reasonable person stigmatize what was done as dishonest?: R v Iyer, 2020 ABCA 439;

• Would ordinary, decent people feel this conduct is discreditable as being clearly at odds with straightforward or honourable dealings?: R. v. Olan, 1978 9 (SCC), [1978] 2 S.C.R. 1175;

CIRCUMSTANTIAL EVIDENCE

R. v. Villaroman, 2016 SCC 33, [2016] 1 S.C.R. 1000, in part, holds:

When assessing circumstantial evidence, the trier of fact should consider “other plausible theor[ies], and “other reasonable possibilities” which are inconsistent with guilt……..the Crown thus may need to negative these reasonable possibilities, but certainly does not need to “negative every possible conjecture, no matter how irrational or fanciful which might be consistent with the innocence of the accused” … “Other plausible theories” or “other reasonable possibilities” must be based on logic and experience applied to the evidence or the absence of evidence, not on speculation”: at para 37.

…“[c]circumstantial evidence does not have to totally exclude other conceivable interferences”; that the trier of fact should not act on alternative interpretations of the circumstances that it considers to be unreasonable; and that alternative inferences must be reasonable, not just possible: at para 42.

ISSUE TO BE DETERMINED

28The Crown relies on the allegation of “other fraudulent means” pursuant to section 380. (1) to prove Faulkner guilty of fraud. As previously reviewed, Theoreux holds that “other fraudulent means” is to be determined objectively, by “what reasonable people consider to be dishonest dealing”. Given that test, the issue is as follows: has the Crown satisfied the Court beyond a reasonable doubt that Faulkner is guilty of fraud as charged in Count 1.

ASSESSMENT AND FINDINGS

29The defence submits the Crown has not met the burden of proof beyond a reasonable doubt that Faulkner committed a fraud as set out in Count 1 for the following reasons.

30First the defence argues that when Faulkner was hired, he was placed on a 6 month period of probation. North House was in a state of disarray, without an Executive Director, and a new Chair of the Board recently appointed. The defence submits during this uncertain period, neither the executive nor the Board provided Faulkner with any training, oversight, and/or feedback regarding his duties as Executive Director, leaving Faulkner to “figure out things on his own”.

31For the following reasons this submission is not supported by the evidence.

32North House’s former Executive Director left in 2016, seeking new job opportunities. A committee of three Board members was tasked with the responsibility of hiring a replacement. That process was non contentious and orderly. At the same time, Ann Kewley (Kewley) stepped down as Chair of the Board and was replaced by Valerie Cranmer (Cranmer). Because there were term limits, Kewley and Cranmer testified it was not uncommon for membership of the Board to change over time as occurred in the case at bar.

33There is no evidence of any disarray in North House’s operation when Faulkner was hired. Nor is there any evidence that Further Faulkner was not provided direction and input regarding his duties and role as Executive Director and left to “figure out things on his own”.

34Although Cranmer acknowledged she did not meet with Faulkner on the first day of his employment, she testified she met with him shortly thereafter to discuss compensation, mutual goals, and expectations. Cranmer’s evidence is consistent with the correspondence she sent to Faulkner confirming his employment:

Congratulations! We are pleased to confirm you have been selected to work for North House…The position we are offering is that of Executive Director…. We will be working with you to develop a comprehensive job description and employment goals in the first few weeks to ensure clear expectations and continued support are provided to you. (Tab 1, Exhibit 2).

35Cranmer testified at their first meeting, she reviewed Faulkner’s managerial duties, staff supervision responsibilities, reporting requirements, attendance at Board meetings, and working with Linda Green (Green) North House’s Financial Director, to ensure that financial subsidies went out correctly. Cranmer testified that thereafter she routinely spoke to Faulkner by phone and communicated with him through e-mail. Prior to each Board meeting she spoke to Faulkner regarding the agenda for upcoming monthly meetings.

36Cranmer’s evidence was not contradicted. There was no evidence that when hired Faulkner was not provided direction and “expected to figure out things on his own”.

37Second, the defence submits as Executive Director Faulkner was given complete discretion and authority with respect to business related expenses. There was no oversight, procedure, nor protocol provided to Faulkner explaining what expenditure was a business expense as opposed to a personal expense. The determination was left completely in Faulkner’s discretion.

38Given the level of discretion afforded to the role of Executive Director, the defence submits the Crown must establish beyond a reasonable doubt that Faulkner’s expenditures, as Executive Director, were not authorized, and that they were for his own personal use, not North House’s business expenses.

39I agree with the defence submission that the Crown must establish beyond a reasonable doubt that Faulkner’s expenditures as Executive Director were for his personal use and not North House business expense.

40However, contrary to the defence submission, it is my finding that Faulkner’s purported knowledge and experience did not require, the Executive or Board to inform and/or instruct him what expenditures would be authorized as business expenses or not in accordance with North House’s mandate.

41In seeking the position of Executive Director Faulkner’s resume in part read as follows:

I have extensive experience in managing multiple sights, and leading large Non-Profit Organizations including social and alternative housing portfolios with Wood Green Community Services, Durham Region Non-Profit Housing, and Toronto Community Housing Corporation, Canada’s largest landlord. the quality of life for all tenants in our communities across Durham Region….

I have spent the last fifteen plus years with businesses that are regulated, thus allowing me to be very familiar with regulation and regulatory processes…I have the relevant experience …and [am] familiar withal legal requirements within non-profit and charitable organizations…I have a deep understanding of effective governance, best practices… (Exhibit 1, Tab 1)

42Cranmer testified that she and the other members of the hiring committee were impressed with Faulkner’s employment history, particularly his knowledge and experience working non-profit organizations some of which provided affordable housing.

43With Faulkner’s purported knowledge and experience, there is no basis on which to find that Faulkner would not know or understand that an individual holding a senior leadership position at a non-profit organization is not permitted to use corporate resources for personal purposes.

44Nor do I find, as submitted by the defence, that in the absence of specific direction, the Board and/or Executive gave Faulkner unfettered discretion to determine what expenditures were business expenses as opposed to personal expenses.

45As Executive Director, Faulkner was in charge of the supervision of North House’s day-to-day operations. Green testified shortly after he was hired, she explained to Faulkner North House’s financial procedures, including the requirement that he provide her with invoices and/or receipts for any expenditures made as Executive Director.

46Within weeks, Faulkner took possession of a Visa credit card in Green’s name previously used by North House to pay for gift and gas cards, rent and hydro arrears, and other minor expenses that were strictly related to North House’s mandate (Described later in these reasons as the 7891 Visa card).

47The 7891 Visa card had always been kept in the Executive Director’s office. Green testified Faulkner advised her that the 7891card needed safekeeping and he put it in his wallet. If the card was needed to pay for gift cards or stamps, Green testified Faulkner allowed her to use it but then had her return the card to him.

48Green testified when she received the February 2017 statement for 7891 Visa card, it set out seven transactions at restaurants and fast food outlets, and two hotel stays at the Sheraton on the Falls Niagara (Exhibit 1, Tab 18, pg. 1). She testified she spoke to Faulkner advising him those expenditures were inappropriate, as they were personal expenses and not North House business expenses.

49Cranmer, the Chair of the Board, testified when she learned about the 7891 Visa card hotel expenses, she too confronted Faulkner. She testified she made it clear that the charges were not in accordance with North House procedures.

50The defence did not challenge or call evidence contradicting Green’s testimony that she explained to Faulkner North House’s financial procedures including the requirement that he provide her with invoices and/or receipts for any expenditures made as Executive Director. Nor did the defence challenge or contradict Green’s and Cranmer’s evidence that after being apprised of the hotel expenses set out in the February 2017 Visa statement, they both confronted Faulkner with those charges advising him they were inappropriate non business North House expenses.

51Green further testified that although she asked Faulkner to provide receipts and invoices for the charges set out in the 7891 Visa statement, none were ever provided. She testified in the coming months she continually pressed Faulkner to provide receipts and/or invoices continuing transactions using the 7891Visa Credit card, but again none were provided. Faulkner responded with a series of explanations that the receipts were at his home, that he forgot to bring them in, but would do so. Green testified because of her continuous requests that Faulkner provide receipts and/or invoices, Faulkner at one point to become very angry stating he was the Executive Director, and he would spend the money as he thought appropriate to do so.

52The defence submits Green’s testimony regarding this conversation is unreliable and should be rejected, or at a minimum, leave the court with a reasonable doubt that it took place. The defence relies on Green’s later evidence in which she admitted that in a May 29, 2017, e-mail she sent to Faulkner regarding what she knew to be a missing Staples invoice, she e-mailed Faulkner in part: “I could have sworn you gave it [the Staple receipt] to me too, but I can’t find it….Thanks no hurry” (Exhibit 1, Tab 36).

53Green testified that e-mail was not true, Faulkner never provided the requested Staples invoice and she had not lost it. She testified she was reluctant to confront who she described to be her boss about his improper spending, because Faulkner had become angry and confrontational when she had tried on numerous occasions to discuss his failure to provide receipts and invoices for purchases, he made using the North House credit cards. She testified in that e-mail she sought to give Faulkner a graceful out.

54I accept Green’s evidence. She was firm in her recollection concerning Faulkner’s statement that as Executive Director he had the authority to spend North House’s funds as he wished. Further, her explanation about the false May 29 e-mail she sent to Faulkner is not illogical nor unreliable. Faulkner was Green’s immediate superior. The authority and power imbalance between them is self-evident. If any fault could be directed at Green, it was her failure not to advise the Board of Faulkner’s spending earlier than she did.

55Later in these reasons, there will be further review of other evidence provided by Green.

56Third, the defence submits, the evidence does not establish beyond a reasonable doubt that the expenditures made by Faulkner were for his personal use and fraudulent, and as opposed to North House business expenses. Further when questioned about the various expenses and purchases made, Faulkner provided legitimate business reasons for those expenditures.

57For reasons to follow Faulkner’s credit card and banking transactions using North House funds does not support these submissions.

CHRONOLOGY OF TRANSACTIONS

Credit Card Transactions

58Despite being advised by both Cranmer and Green that the February 2017 hotel and restaurant transactions were inappropriate and not in accordance with North House’s mandate, Faulkner continued to use the 7891 Visa credit card for hotel and restaurant transactions and other purchases through April 2019 (Exhibit 1, Tab 18, pgs. 1 to 3).

59Faulkner also used a second credit card as Executive Director. While at the TD bank with Green to endorse signature cards, Green testified that Faulkner applied for a Visa card under his name. Green testified because Faulkner held a top management position his request for a credit card did not appear inappropriate. Faulkner was issued a North House credit card under his name in March 2017 (2059 Visa Credit card).

60By the time Green received the 2059 June Visa credit card statement, Faulkner had been dismissed as Executive Director. Faulkner’s transactions on the 2059 credit card included, amongst other things; purchases of golf equipment and clothing, purchases at retail outlets e.g. Winners and Marshals, purchases at Lenscrafters, cash advances, and purchase of Toronto Blue Jays season tickets (Exhibit 1, Tab 16).

61North House also had a Staples payment card occasionally used for office supplies. It was kept in a cash box in Green’s office. To be later reviewed, Faulkner had access to that card which he used as Executive Director.

Particulars re: Credit Card Spending.

(i) Cash Advances.

Commencing April 17, 2017, through June 5, 2017, in fourteen transactions using the 2059 Visa Credit card, Faulkner transferred $6,250.00 into his personal chequing account (Exhibit 1, Tab 17, pgs. 1-2; Tab 16, pgs. 2, 6, 8, 10).

62Cranmer testified that prior to Faulkner being hired, no staff member had ever taken out cash advances on a North House credit card. Cranmer testified she never authorized Faulkner to take out cash advances and Faulkner never advised he was withdrawing those advances.

63Cranmer’s evidence was uncontradicted and was not challenged in cross examination.

64I accept her evidence.

(ii) Car Rental & Repair.

Commencing April 18 through to May 23, 2017, the 2059 Visa Credit card was used by Faulkner on two occasions for payment of approximately $350.00 to Discount Car Rental (Exhibit I, Tab 17, pgs. 1,2; Tab 16, pgs. 6, 10). The same credit card was used for two payments in the amount of $1,200.68 and $1, 360.07 to Aamco Transmission Whitby (Exhibit 1, Tab 16, pg. 6). The total expenditures were $2,921.18 (Exhibit 1, Tab 17, pg. 2).

65Cranmer testified that North House did not have any vehicles and had no reason to pay for vehicles rental or otherwise. She testified Faulkner’s vehicle expenditures had nothing to do with the charity’s mandate and were never authorized by the Board. She testified that prior Faulkner’s arrival, North House had never had transactions for car rental or repair.

66Dawn Lewis (Lewis) testified that she knew Faulkner from high school. Faulkner contacted her on Facebook in December, 2016, where they chatted about people they knew in common. She advised that she was employed cleaning houses and Faulkner told her he could get her a better job offering her a position working as an outreach worker at North House. Despite having no experience, she accepted the offer and started working at North House on February 12, 2017. She learned on the job how to assist clients with their rent and hydro arrears and coordinating payments of their rents.

67While at North House, Faulkner often confided in Lewis, about his personal relationship with his girlfriend Melanie, their respective children, and other aspects of his life. Lewis testified she did not exactly know what Faulkner’s responsibilities as Executive Director were, what the sources of his income were, but Faulkner appeared to be financially successful.

68Lewis testified that in April 2017, when she and Faulkner were in the process of setting up the new Uxbridge office, a tow truck arrived, and the driver asked to speak to Faulkner. Faulkner entered the truck and about 15 minutes later exited, went into his office and then back outside. When coming back into the office a second time he had a credit card in his hand and was upset telling Lewis that he had to pay $2500.00 or his ex-wife’s car would have been be towed away because she failed to make payments on it.

69Lewis’s evidence regarding her observations and what Faulkner said to her were not contradicted or challenged in cross examination. Further, her evidence is consistent with the following transaction records:

• Exhibit 1, Tab 6, pg. 21: April 9, 2017- deposit of $ 2,500.00 onto Faulkner’s bank account);

• Tab 16 pg. 6: April 19, 2017-cash advance of $2,500.00 to Faulkner using the 2059 North House Visa credit card);

70Lewis also testified that Faulkner advised her he paid approximately $1,200.00 to get his girlfriend Melanie’s car repaired. This evidence in part accords with the Aamaco Transmission payments set out in Exhibit 1, Tab 17, pg. 2 reviewed above.

71The defence argues that although Cranmer testified she did not authorize any car repair transactions, Faulkner was required to use his car to attend meetings on behalf of North House. Further, regarding car repairs, Cranmer was the only Board member who testified. However, there was no evidence provided by the treasurer Martha Watts who was responsible for North House’s daily financial transactions and other Board members who could have authorized the car transactions.

72The defence submits a reasonable inference can be drawn that because Faulkner was required to use his car to carry out his duties as Executive Director, wear and tear on his motor vehicle would be covered by the organization.

73This submission fails on two grounds.

74Firstly, I have accepted Lewis’s uncontradicted evidence that the car repair expenses as reported by Faulkner only related to vehicles belonging to Faulkner’s wife and girlfriend Melanie, and not his vehicle used when carrying out his duties as Executive Director.

75Secondly, as held in Villaroman, 2016 SCC 33, [2016] 1 S.C.R. 1000, as stated above:

When assessing circumstantial evidence, the trier of fact should consider “other plausible theor[ies]” and “other reasonable possibilities” which are inconsistent with guilt… Other plausible theories” or “other reasonable possibilities” must be based on logic and experience applied to the evidence or the absence of evidence, not on speculation”: at para. 37.

76The defence submission that either Martha Watts or other Board members not called as witnesses “could have authorized the car transactions” is no more than unsupported speculation, not a reasonable possibility or plausible theory inconsistent with guilt.

(iii) Cell Phones.

77Commencing February through to May 2017, payments of $1,501.34 were made to Virgin Mobile and Majestic Communications using the 7891 and 2059 North House Visa credit cards (Exhibit 1, Tab 17, pg. 2).

78Green testified that Virgin Mobile was not a supplier to North House. Further, North House did not issue a company provided cell phone to its staff. She testified all the staff used their own cell phones. Green testified she had never heard of Majestic Communications, the company was not a supplier to North House, and she never received any invoices or receipts for transactions involving with Majestic

79However, Cranmer testified that Faulkner was authorized to have a cell phone to use as Executive Director, but she did not know the service provider. Green testified that North House had occasionally paid the cell phone bill of the previous Executive Director, Ann Watson.

80I agree with the defence submission that a reasonable doubt exists on the issue Faulkner’s alleged fraudulent expenditures for cell phone services.

(iv) Electronic Media.

81Commencing February 17, 2017, through to May 29, 2017, payments in the amount of $730.80 were made to iTunes, Google, and MLB Advance Media, using both the 7891 and 2059 North House Visa credit cards (Exhibit 1, Tab 17, pg. 4).

82Cranmer testified there was no reason for Faulkner to incur these media charges. None of these charges had been approved by the Board. Cranmer’s evidence was not challenged.

83Green testified that when questioned, Faulkner advised her that he was re-doing the North House website and he needed software to do the work. Green testified Faulkner never provided her with any invoices, receipts, or software confirming the purported web site updates.

84The defence submits that Faulkner’s exculpatory explanation has not been contradicted by any other evidence and raises a reasonable doubt regarding the electronic media transactions.

85I agree with the defence submission.

(v) Entertainment.

86Commencing April 3, 2017, through to June 4, 2017, payments in the amount of $7,463.71, were made to Bell Express VU, Toronto Blue Jays, Stub Hub FX, Shaw Direct, and Netflix, using the 2059 North House Visa credit card (Exhibit 1, Tab 17, pg. 5).

87Cranmer testified that North House did not conduct any business with StubHub and there would have been no reason for Faulkner to incur those expenses. Similarly, North House had no business, with either Netflix or Shaw Direct. None of the aforementioned services were authorized by the Board.

88Green testified North House had no business with Bell Express Vu. Prior to Faulkner joining North House, North House did not have satellite or cable services.

89Cranmer’s and Green’s evidence was not contradicted. I accept their evidence.

90Green testified she questioned Faulkner about the $5,439.68 expense involving the Toronto Blue Jays. Faulkner advised this was an investment portfolio in which the Toronto Blue Jays would return the funds three fold. Faulkner never provided the name, corporate or otherwise, of the alleged portfolio nor who administered the funds.

91Lewis testified that prior to his dismissal, she had seen pictures of Faulkner and his girlfriend Melanie attending Toronto Blue Jay games on Facebook.

92Cranmer testified when she contacted the Toronto Blue Jays after Faulkner’s dismissal, the Blue organization did not refund the full value of the alleged $5,439.68 investment claimed by Faulkner, but did refund the value the unused 2017 season game tickets purchased using North House’s credit card.

93The defence submits although the Stubhub and Blue Jays transactions are suggestive of tickets, there is no direct evidence what these purchases were for. Cranmer’s evidence is hearsay and inadmissible. Lastly, the absence of receipts for these transactions is only suggestive of negligence and disorganization and should not attract criminal liability.

94The defence argument invites the court to take a piecemeal approach to the evidence rather than to assess the evidence as a whole. The defence contention ignores Green’s evidence of her repeated unsuccessful attempts to have Faulkner provide receipts and invoices and Faulkner’s countless “dog ate my homework” excuses to explain his failure to provide invoices and receipts.

95I have already found there is no evidence suggestive of negligence and disorganization by Faulkner. Further, the defence contention ignores the voluminous trial evidence that the expenditures including those for entertainment were never authorized.

96The Toronto Blue Jays are in the business of selling baseball tickets. There is no evidence they are also in the business of promoting and/or selling investment portfolios. Faulkner’s explanation to Cranmer that the Blue Jays expenditure was made for legitimate business reasons, as submitted by the defence, is neither credible nor reliable.

97For the aforementioned reasons, I find the entertainment expenses claimed by Faulkner using North House funds were personal and not business expenses.

(vi) Eye Care.

98On April 26, 2017, a payment of $1,760. 80 using the 2050 North House Visa credit card was made to Lenscrafters (Exhibit 1, Tab 17, pg. 1).

99Green testified when she asked Faulkner about this transaction, he advised that he had purchased a corporate benefit plan that would allow North House employees to purchase glasses at a reduced price. Green testified Faulkner did not provide documentation, invoice, or receipt confirming the operation of this plan.

100Cranmer testified that that North House did not provide benefits, including the above alleged, to its employees. She testified this expenditure was not done on behalf of North House and not approved or authorized by her or the Board. Cranmer’s and Green’s evidence was not contradicted.

101As with the Blue Jays expenditure, Faulkner’s explanation to Green that the Lenscrafter’s transaction was made for legitimate business reasons is neither credible nor reliable.

(vii) Hotels (Exhibit 1, Tab 17, pgs. 9-10).

102Commencing February through to May 2017, payments in the amount of $6,641.48 using the 2059 and 7891 North House Visa cards were made for the following hotel/motel transactions:

• 22 transactions at Travel Lodge Motel (Oshawa), with individual expenditures between $100.00 to $556.88;

• As previously reviewed two transactions on the same day at the Sheraton on the Falls Niagara total expenditure approximately $900.00;

• Le Manoir du Casino Quebec expenditure $696.94;

• 2 separate transactions at the Blue Mountain Resort with expenditures of just over $750.00, and;

• Holiday Inn expenditure $169.49.

103Green testified that when she questioned Faulkner, he advised her that the expenditures in Niagara Falls and the Blue Mountain Resort were to attend conferences. However, this explanation is inconsistent with the following conversations Faulkner had with Lewis.

104As previously reviewed, Lewis testified that Faulkner was very open and engaging with her at work, often discussing personal and family matters, including personal trips taken. She testified near the end of February 2017, Faulkner advised her about a weekend trip he took to Niagara Falls with his children, Melanie, and her children. This was a family trip. No reference was made about attending a conference trip. Faulkner advised that the families stayed in two separate rooms. Faulkner’s description of the family trip is consistent with charges on the 7891Visa credit card involving two transactions at the Sheraton on the Falls Niagara from February 25 to the 27^th^ 2017 (Exhibit 1, Tab 6, pgs. 4, 5; Tab 14, pg. 5; Tab 17, pg. 7).

105Lewis further testified that Faulkner advised her of a $3,000.00 trip to a spa in Gatineau, Quebec, and a trip to Blue Mountain. The $3,000.00 Gatineau expense is consistent with the North House cheque transaction 002847 made by Faulkner for that amount (Exhibit 1, Tab. 6, pg. 54; Tab 17, pg. 3). Faulkner’s disclosure about a transaction at the Blue Mountain Resort is consistent with the use 2059 Visa credit card in the amount of $353.27 (Exhibit 1, Tab 16, pg. 6; Exhibit 1, Tab 17, pg. 7).

106Cranmer testified the numerous Oshawa Travel lodge transactions were never authorized or approved by the Board. She testified when she asked Faulkner, he advised her the transactions were to pay for emergency housing.

107Cranmer testified North House’s catchment area was limited to providing services in Uxbridge, Brock, and Scugog, there was no reason that North House would have paid for an expense at a hotel in Oshawa. Cranmer’s evidence was not contradicted.

108I accept her evidence.

109Green testified when she asked Faulkner about the Oshawa Travel Lodge expenditures, he advised the expenditures were for emergency housing for a family he was sponsoring in Oshawa. Faulkner did not provide Green the name of the Oshawa client he was purportedly supporting.

110The Travel Lodge expenditures then continued for the remainder of March through to May 2017. Despite repeated requests that Faulkner provide Green with invoices or receipts, Faulkner did not provide any. When further pressed Faulkner, claimed that the hotel still had a copy of his credit card and were charging it without his approval. He advised Green he would speak to the hotel and get the charges cancelled and reversed. No cancellation or reversal of the charges ever took place.

111Lewis testified clients periodically attended North House seeking emergency shelter. However, she testified that although North House recommended shelters in Whitby and Oshawa, contrary to Faulkner’s evidence, North House did not put emergency clients up in hotels.

112Regarding the expenditure at the Le Manoir du Casino Quebec, Cranmer testified that North House did not conduct any business in Quebec and in any event, they did not have the funds to send staff to distant conferences. Similarly, she testified North House had no need or funds to make expenditures at the Blue Mountain Resort or Holiday Inn.

113Cranmer, as the Chair of North House, testified that authorization or approval for paid attendances to attend conferences in Niagara Falls, Quebec, or the Blue Mountain Resort, required that a request be made to the Board through the Chair. No request was made to her as Chair, and there was no subsequent Board approval.

114The defence similarly contends the numerous transactions at hotels including those claimed for purported conferences, coupled with the lack of receipts, at best arouses suspicion and not criminal liability particularly in the absence of evidence from other Board members that authorization or approval may have been given to Faulkner.

115However, this submission makes no reference to the unchallenged evidence provided by Lewis, that Faulkner boasted to her about trips he took with his girlfriend staying at the very same hotels he claimed as conference expenses. Additionally, in accordance with Villaroman, the submission that Faulkner may have been granted Board approval, is speculative and carries no weight.

(viii) Recreation and Sports.

116Commencing February 6, through to April 19, 2017, as set out in the 2891 and 2059 Visa credit cards, seven expenditures in the amount of $6,340.85 were made at Golf Town, Sport Check, and Gemini Gymnastics (Exhibit I, Tab 17, pg. 8).

117When asked, Faulkner advised Green that the transactions at Golf Town and Sport Check were for golf clubs and clothing intended to be raffle prizes at a fund raising golf tournament for North House. He advised the purchases were being stored in a friend’s basement. Green asked for invoices and receipts. Faulkner advised he had forgotten them, but he would provide them. None were ever provided.

118Cranmer testified that fundraising was important to a small charitable organization such as North House and therefore, Faulkner’s fundraising background was an important factor in offering him the position of Executive Director. Faulkner’s application as Executive Director amongst other qualifications promoted his experience in fundraising; “I have a deep understanding of effective governance, best practices in professional regulation, fundraising…. [including] “Research …for grants, funding, and donor acquisitions” (Exhibit 1, Tab 1 pgs. 1 and 2).

119However, Cranmer also testified North House had no reason to spend money at sporting retail stores. Despite Faulkner’s purported experience in fundraising, Cranmer testified this type of sporting equipment fund raiser had not been planned or contemplated. Further no gymnastic purchases had been authorized by her as Chair, or the Board.

120Cranmer’s evidence was uncontradicted.

121Lewis testified that when discussing his relationship with Melanie, Faulkner advised he had purchased golf clubs and equipment, golf outfits, running shoes, and a Columbia jacket because he and Melanie were going to take up golfing. Lewis testified these conversations took place a couple of times in the spring of 2017.

122These conversations are consistent with purchases for golf and sport related equipment using the 7891 and 2059 visa credit cards set out in Exhibit 1, Tab 16, pg. 4; Exhibit 1, Tab 6, pg.14; and Exhibit1, Tab 6, pgs.11,21,23,26; Tab 16, pgs. 4 and 6.

123Lewis’s evidence was not contradicted.

(ix) Restaurants and Fast Food Outlets.

124Commencing February 6 through to April17, 2017, the 7891 and 2059 Visa Credit cards set out amounts totaling $1,264.04 in restaurant transactions (Exhibit 1, Tab 17, pg. 9).

125As already reviewed, when Green received the 7891 Visa credit card statement in March 2017 setting out restaurant expenses, she testified she confronted Faulkner and told him he could not use the credit card for personal purchases. Faulkner apologized and stated he would not do it again. Green was not challenged in cross examination on this point.

126Despite Faulkner’s apparent acknowledgement and apology, the restaurant transactions continued. They included meals in Whitby, Brooklin, Oshawa, and Bowmanville, communities in which North House did not provide services, and to which North House had no attachment.

127Cranmer, Green, and Lewis, testified that periodically, they attended meals with Faulkner which were work related and paid for by Faulkner. Cranmer testified that sometimes she paid for the meals because she knew if Faulkner paid, it would be coming out of North House Funds. However, all the witnesses were consistent, and not undermined in their evidence; any restaurant meals they attended with Faulkner were in local restaurants neighboring North House’s immediate facilities and not in Whitby, Brooklin, Oshawa, or Bowmanville.

128The defence submission that “there is certainly a reasonable inference that Ian Faulkner had various lunches and dinners with clients, Board members or other staff and volunteers in South Durham for business purposes” is again speculative and entirely inconsistent with Cranmer’s, Green’s and Lewis’s evidence concerning North House’s restaurant meal expenditures.

Summary of Defence Credit Card Submissions.

129Lastly, the defence submits that the lack of receipts for the credit card transactions cannot be used to imply guilt. The lack of receipts, at most, suggests disorganization and negligence by Faulkner and should not attract criminal liability.

130There is no direct or circumstantial evidence to support this submission. The evidence is uncontradicted that despite repeated requests by Green that Faulkner provide invoices and/or receipts for the credit card transactions, few if any were provided. At most, Faulkner’s explanations were a litany of justifications and excuses (I left the receipts at home, I left them in my gym bag, etc.) which Green testified she eventually did not believe it to be credible or reliable. Green never testified, nor was it suggested to her in cross examination that Faulkner’s explanations reflected inattention or negligence on his part.

131Although I agree with the defence submission, Faulkner’s failure to provide invoices and receipts does not connote criminal liability, it is nevertheless relevant evidence in addition to the rest of the evidence in the court’s assessment of Faulkner’s guilt with respect to the fraud allegations.

Bank/ Cheque Transactions.

132As Executive Director, Faulkner was given authority to sign cheques. Kewley, the former Chair, testified that occasionally she and Green signed up to four cheques at a time. The single signature cheques were kept in Green’s office. Cheques could only be used for North House business. Two signatures were required to negotiate the cheques.

133As Executive Director, Faulkner asked Green to provide him with him some blank cheques when North House was moving its office from Cannington to Uxbridge. Faulkner advised Green he needed the blank cheques to pay contractors renovating the Uxbridge office. He advised the contractors would be paid as soon as they completed their work. Green testified she could not recall how many blank cheques Faulkner requested but it was more than five.

134Cranmer and Green identified the following cheques that Faulkner had written to himself on the North House account without confirming invoices/receipts.

Cheque #2801- $1,000.00: March 1, 2017 (deposited March 1, 2017) no memo line (Exhibit 1, Tab 6, pgs. 7 and 44; Tab 8, pg. 3; Tab 1, pg. 3)

135Green testified Faulkner wrote this cheque in her presence claiming it was a loan from the Board representing an advance on his first pay cheque. She accepted this explanation and signed the cheque.

136Cranmer testified she was unaware that any cheques were issued to Faulkner other than his salary cheques. After Faulkner was dismissed in June 2017, Green advised Cranmer that Faulkner told her that she, Cranmer, had authorized the advance pay in Cheque #2801. Cranmer testified she had never given that authorization.

137The above evidence was not contracted at trial.

Cheque 2807-$2,000.00: March 10, 2017 (deposited March 13, 2017) no memo line (Exhibit 1, Tab 6, pgs. 8 and 47; Tab 8, pg. 4; Tab 17, pg. 3).

138Cranmer testified she did not recognize the signatures on the cheque. Green testified she believes this was one of the “blank” cheques that Faulkner had requested from her. There was no memo line, and Green had no recollection of receiving an invoice from Faulkner.

139There was no evidence to contradict this account.

Cheque # 2808- $2,500.00: March 20,2 017 (deposited March 20, 2017) Memo line re: 2 Computers (Exhibit 1, Tab 6, pgs. 12 and 50; Tab 8, pg. 5; Tab 1, pg. 3)

140Cranmer testified this cheque was transacted when North House was moving its office to Uxbridge. She testified it was illogical that the cheque was made out to Faulkner for the purchase of two computers and not by way of an invoice that would ordinarily be issued to Green who would then pay the vendor by cheque.

141Green testified she would not have written this cheque to Faulkner and believes this was one of the blank cheques he had requested. Green testified the cheque is not in her handwriting. Further, North House had not received any new computers at that time.

142There is no evidence to contradict this account.

Cheque #2834-$1,5000.00: March 23, 2017 (deposited March 24, 2017) Memo line Re: (To Purchase 2 desks (Exhibit 1, Tab 6, pgs. 15 and 52; Tab 8 pg. 6; Tab17, pg. 3)

143Green testified this cheque appears to be one of the “blank cheques” Faulkner had earlier requested. Green testified that North House had not purchased any desks using a “blank cheque”. While North House had purchased 7 desks when the office was moved to Uxbridge, those desks were paid by her using the Staples card. Faulkner did not provide an invoice or receipt for this cheque.

144Cranmer testified there was no reason why this cheque was made out to Faulkner. If an invoice accompanied the purchase, it should have been sent to Green for payment.

145The defence submits that Green’s evidence that the desks were purchased using the Staples card is unreliable. The defense argues the credit card statements confirming the desk purchases was not introduced into evidence. Therefore, it is not clear how many desks were purchased and at what cost. Further because North House kept an office in Cannington even after the Uxbridge office was opened, it is unclear whether a desk was sent to that office.

146Green’s evidence that she used the Staples card to purchase 7 the desks was uncontradicted and not challenged in cross examination. The defence submission that it is not clear how many desks were purchased, or at what cost, in the absence of credit card confirmation provided by Green, does not negate Green’s uncontradicted evidence that the desks were purchased using the Staples card, and not by cheque as represented by Faulkner.

Cheque # 2847- $3,000.00: April 4, 2017 (deposited April 4, 2017) Memo line Re: Doors, Chairs, + Lights (Exhibit 1, Tab 6, pgs. 16 and 54; Tab 8, pg. 8; Tab 17, pg. 3)

147Cranmer testified the procedure regarding the purchase of doors and other items should have been invoiced through Green. Cranmer testified that she was surprised the money went through Faulkner rather than the companies from which the items were purchased.

148The defence submits the lack of documentation by Faulkner regarding the transactions regarding the doors clearly suggests that Faulkner had made those payments. The defence argues it is common knowledge that prior to the pandemic, contractors were paid by cash. Faulkner, as Executive Director, was not only dealing with contractors for construction in the Uxbridge office, he was also dealing with contractors for repairs in the various residences owned by North House.

149I find this submission is meritless.

150This court is not prepared to take judicial notice, as submitted by the defense, that it is common knowledge that contractors are paid by cash, and invoices and receipts for their services are not issued by them.

Cheque # 2850-$1400.00: April 10, 2017 Memo line Re: Wall Repair (Exhibit 1, Tab 6, pgs. 19 and 56; Tab 8, pg. 9; Tab 17, pg. 3).

151Green characterized the above as another “blank cheque”. She testified while the new office in Uxbridge needed a wall to be installed, she believed it to be installed by a Board member who did not bill North House for the installation. She testified Faulkner did not provide her documentation in support of the cheque and that Faulkner himself was not responsible for the installation.

152Cranmer testified the cheque should have been made out to the person who did the installation and not Faulkner who she believes had no part in the installation.

Cheque #2858-$1,500.00: April 18, 2017 (deposited April 19, 2017) No memo line (Exhibit 1, Tab 6, pgs. 21 and 58; Tab 8, pg. 11; Tab 17, pg. 3)

153Both Cranmer and Green testified they had no idea what the subject matter of this cheque was. Green testified this was another “blank cheque”. Faulkner did not provide her supporting documentation regarding this cheque.

154In summary, regarding the Cheque/Banking transactions the defence submits that although a number of cheque and cash advances were negotiated by Faulkner at the time he was tasked with organizing and arranging the move of the North House office from Cannington to Uxbridge. The facts raise the reasonable inference that he arranged for payment of various items necessary for the move using cash or other means.

155This submission is groundless, absent any supporting evidence, direct or inferential.

156Further, the defence submits it is open for the court to find that Faulkner was negligent in using cash or other payment methods during the move, instead of obtaining invoices. The defence argues that at the time, Faulkner was still in his probationary period and did not have proper training nor guidance about the proper procedures for making purchases. He was simply given the keys and immediately advised to organize the move. In these circumstances, a reasonable inference arises that the cheques and cash advances were not used for personal items but rather for moving expenses associated with the move.

157I have already found that given Faulkner’s experience working with the nonprofit social agencies, he was well acquainted with his obligation to differentiate business from personal expenses. There was no requirement that he receive further training or guidance about North House procedures for making purchases.

158The cheque transactions consistent with the credit card transactions were not supported with invoices and/or receipts. Further, three of the cheques had no description of the transaction noted in the memo line.

159There is no evidence contrary to the defence submission that Faulkner was “given the keys” by that I interpret total financial discretion to organize the move. As such, no reasonable inference arises that the cheque and cash transactions were used for moving expenses as opposed to personal expenditures.

Proof Beyond a Reasonable Doubt Not Made out.

160The defence submits the following evidence introduced by the Crown proves a prima facie case of guilt, but not proof beyond a reasonable doubt of fraud.

(i) Green’s Evidence is not Reliable.

161The defence contends Green testified she prepared a list of transactions she believed to be fraudulent on the basis that the identified transactions were not supported by invoices or receipts. After confirming with the Chair Cranmer, she had not authorized those transactions, Green’s list was provided to the police.

162The defence argues this evidence is problematic because it appears that Green had not discussed or canvassed the list of transactions with any other Board member who potentially could have authorized the transactions.

163This submission is inconsistent with Green’s evidence that I accept.

164Green testified she worked with Susan Tremayne, a chartered accountant retained by the Board. Together she and Tremayane reviewed the transactions which were ultimately reported to the police. Tremayne, in concert with the police, then conducted a forensic analysis of the impugned transactions. Neither Green nor the Board were involved with this process. Criminal charges were subsequently laid.

165The forensic analysis was independently conducted. Prior to the forensic analysis the Board was advised of the impugned transactions. There is no evidence that any Board member or members advised they had authorized the transactions. To the contrary the Board knew nothing about them. The entire Board had been canvassed when Cranmer reported the expenditures to them.

166Contrary to the defence submission there was no need for Green to canvass the expenditure further.

(ii) Green had lost Invoices and Receipts.

167The defence submits Green’s evidence concerning a chain of emails between her and Faulkner in which she falsely stated to him that she may have lost a Staples receipt sent to her is some evidence that Green may have lost some receipts.

168The defence submission is speculative and inconsistent with Green’s evidence that I do accept. Green testified that she did not lose any receipts or invoices sent to her by Faulkner and on rare occasions when he did forward receipts, she immediately issued a cheque to the vendor of the good or service.

169I further accept Green’s evidence that despite realizing by May 29, 2017, North House was in a perilous financial situation because of Faulkner’s personal expenditures she was reluctant to confront Faulkner by email or in person because he became angry and confrontational with her when she tried to raise the topic of his failure to provide receipts or invoices for purchases on the North House credit cards.

170The defence further challenges Green’s reliability, contending that because Green used five personal and work email accounts, she either lost or failed to retrieve certain alleged receipts Faulkner sent to her as email attachments.

171Green was not undermined in cross examination when she testified she actively and regularly checked all five email addresses and did not believe Faulkner sent her any other receipts or invoices using those email addresses.

172The defence asserts that because Green stopped using one of her email accounts (finance@northhouse.ca) at some point during Faulkner’s employment, a reasonable inference can be drawn that Faulkner did send emails with further receipts and invoices to that closed email account.

173The defence contends that this inference arises from the fact that it is common knowledge that email programs such as Microsoft Outlook and other email software can attach someone’s name to their email address.

174This submission erroneously invites the court to take judicial notice of specific facts that are not common knowledge. Further, it invites the court to engage in groundless speculation about what Faulkner might have done and to presume the existence of emails which may or may not have existed.

175In the absence of an evidentiary foundation, it would be an error as contended by the defence to find the possibility that email evidence was lost by Green.

176As with every witness, the court can accept some, none, or all the evidence provided by a witness. Contrary to the defence submission, I do not find Green’s evidence to be unreliable. She testified for several days and was cross examined at length. She was not contradicted on major points including the email exchange she had with Faulkner on April 30, 2017 (Exhibit 1, Tab 32, pgs. 1 and 2).

177Green emailed in part:

Hi Ian

I need to discuss some things with you, in particular the spending…

I’ve become concerned that the spending you’ve been doing has been for personal items .If I’m wrong about this, I will apologize right now. I figure the amount you’ve used for personal reasons is about $15,000…

I think you need to tell Val [Cranmer] about the spending….

The amount you’ve spent is not insignificant and will be noticed on any reports that I give the Board. I won’t have answers to give the Board members when they question me…

178Faulkner responded in part the same day:

Hi Linda, thought about what you said. As said I’ve spoken with Val. The idea was to establish credit and everything purchased was for a purpose for future events and fundraising. We have a plan to ensure payroll and everything is fine…

179Green testified she interpreted Faulkner’s reply to suggest that he had spoken to Cranmer, the Chair. According to Faulkner’s explanation, Cranmer said that it was ok and she knew what was going on. As of that date the explanation satisfied her. She had not spoken to Cranmer about these expenses. She had also not spoken to Cranmer about establishing credit or there being future events and fundraising.

180However, by the beginning of June 2017, Green became increasingly alarmed noting that North House’s main bank account balance had fallen from a high of over $95,000 in February of 2017, to just over $10,000 by April 28^th^. Green testified she immediately contacted Cranmer about her concerns.

181In cross examination Cranmer testified that prior to June 1, she never gave Faulkner any warnings about his purchases or expenses because she was unaware of any purchases and expenses made on the North House credit card. However, she was aware of the hotel charges previously reviewed, and had advised him they were inappropriate.

182Cranmer testified she never discussed “establishing credit” for North House with Faulkner. North House already had good credit and an established reputation in the area. Additionally, North House was not far enough along to plan future events and fundraising although there were general discussions about doing a golf tournament, but nothing ever came of it. Similarly, she and Faulkner had never discussed ensuring payroll and capital. Cranmer was clear that she never discussed buying Blue Jays tickets with Faulkner.

183Cranmer’s evidence consistent with Green’s and was not contradicted.

(iii) The Seizure of Faulkner’s Computer and Lost Evidence.

184The defence argues that the North House Board seized Faulkner’s cell phone and computer and forwarded the items to Scugog Computers to have them forensically analyzed and then wiped. The defence questions why the computer and cell phone which may have held useful evidence were not provided to the police.

185The defence argues this court must assess both the evidence and lack of evidence introduced at trial when determining whether Faulkner is to be found guilty of fraud as alleged. In making that determination, this court must consider whether the lack of evidence raises any reasonable possibilities other than guilt.

186Contrary to the defence submission, Cranmer testified that neither she nor the other Board members accessed the computer but did send the computer and telephone to Scugog Computers for forensic analysis. Nothing useful was found on the computer. No one wiped the computer and the technician was not able to access the phone because it was locked. The computer was returned to North House in the same condition it was in when the Board sent it for analysis. No further attempts were made to get into the computer. Cranmer testified she did not know whether the police inquired about the contents of the computer.

187Cranmer’s uncontradicted evidence is inconsistent with the defence submission that because emails were lost, destroyed, or not preserved, generally and specifically regarding Faulkner’s computer and telephone the lack of such evidence should raise other reasonable possibilities other than guilt of the accused. This submission is wholly speculative, of no weight, and a nonfactor in whether the fraud as alleged has been proven beyond a reasonable doubt.

(iv) Authorization from Board of Directors-Incomplete Minutes of Board Meetings.

188The defence highlights the evidence of (Kewley), who testified that if any subject was discussed at a Board Meeting, it would have been included in the Board minutes. However, the defence contends none of the Board meetings were signed by any Board member to ensure completeness, despite several meetings having places for signatures.

189The defence argues neither Kewley nor Cranmer recalled Faulkner requesting a credit card to be issued under his name at a Board meeting. However, Martha Watts, the Treasurer of the Board, specifically recalled this occurring at a Board Meeting (Exhibit 5 Agreed Statement of Fact). However, a discussion about this issue is absent in any of the Board Minutes.

190As part of its case, the Crown chose to call only two Board members, Kewley and the Chair Cranmer. Kewley was leaving the North House and was not present for some of the Board meetings. Only Cranmer remained to provide evidence. However, a review of the Board Minutes confirms several other Board members were present for most meetings including; Watts, Karen Gillespie, Rin Castle, Kathy Holdsworth, Katherine Whiteside, and Ann Wells.

191Although any Board member could provide authorization for expenses and expenditures, none of the aforementioned Board members were called by the Crown to testify.

192The defence submits given that because the Board minutes did not capture all issues being discussed at these meetings, the possibility arises that Faulkner had discussions about various policies, procedures, purchases, payments, with other Board members. This is a reasonable inference to be drawn by the court, in light of the Agreed Statement of Fact that Faulkner spoke with Watts at a Board Meeting in Green’s presence about having a North House credit card issued to him (Exhibit5). Cranmer was never made aware of this conversation.

193As Executive Director, Faulkner attended every Board Meeting. There is no burden on Faulkner to prove anything in this trial. However, he had the option to call evidence, or testify that a discussion or discussions had taken place with him at a Board meeting or meetings where one or additional Board members provided him with authorization for the expenditures he made. Such evidence was not called.

194This submission, relying in part on the Agreed Statement of Facts in Exhibit 5, is insufficient to find that a reasonable inference arises that at some other Board Meeting, an unnamed Board member provided Faulkner authorization to conduct any particular transaction.

(v) Faulkner’s Termination.

195On the date of Faulkner’s termination, he was called into an office at North House. Although the police had been called, it is not clear from the evidence whether they were also in the office with the door closed.

196The defence submits that normally, when an allegation of misconduct is made in the context of employment, an employer conducts an investigation, and allows the employee an opportunity to respond to the allegation. Terminating an employee without following this procedure could be grounds for wrongful dismissal. Faulkner was not provided an opportunity to explain himself prior to leaving the North House facility.

197This is not an employment law case and the circumstances of an alleged employer investigation or the details of the termination as submitted by the defence have no bearing or relevance to the allegation of fraud. Further, contrary to the defence contention Faulkner was provided with the opportunity to explain his alleged misspending and he responded stating he disagreed that the spending was improper.

(vi) The Basement.

198The defence argues that Green testified that Faulkner advised her that some of the items he purchased were stored in “someone’s basement”. In cross examination, Cranmer, Lewis, and Green, testified they believed there was a basement at North House’s facility in Uxbridge that was perhaps used for storage. The witnesses could not recall whether they went to the basement before or after Faulkner’s termination.

199The defence submits this raises a reasonable inference that many of the items purchased by Faulkner, could have been stored in that basement and held for future fundraising events. However, there is no evidence the basement was ever checked.

200I find this submission, even if accurate, does not assist Faulkner because Cranmer, Green and Kewley all testified that none of Faulkner’s transactions were authorized. Their evidence was not contradicted.

201Further there was no evidence that any of Faulkner’s purchases were stored in the basement and counsel in cross examination never asked the Crown witnesses whether they saw purchased items in the basement. Lastly, storage in “someone’s basement” as reported by Faulkner to Green, cannot be interpreted to specifically mean North House’s basement as submitted by the defence.

APPLICABLE LAW TO FINDINGS MADE

202As provided in the Agreed Statement of Facts it is agreed that it was Faulkner who used the two North House Visa Credit cards to make purchases. It was also Faulkner who transacted the North House cheques.

203Both the Crown and defence also agree as set out in Theroux, at p. 460 that the actus reus of the offence of fraud is established by proof of:

1. The prohibited act, be it an act of deceit, a falsehood, or some other fraudulent means; and

2. Deprivation caused by the prohibited act, which may consist of actual loss or the placing of the victim’s pecuniary interest at risk.

204The Crown submits that Faulkner’s conduct amounts to fraud under the heading “Other fraudulent means”. The phrase “other fraudulent means” encompasses all other means which can be properly stigmatized as dishonest: R. v. Olan (1978), 1978 9 (SCC), 41 CCC 145 at 149 (SCC). The dishonesty is assessed from the standard of a reasonable person.

205However, with respect to the mens rea of the offence of fraud, the defence frames the issue in the present case thusly:

1. Does the evidence prove beyond a reasonable doubt the Faulkner subjectively intended to use North House funds for personal purposes?

206This submission which purports to raise mens rea for fraud to include an element of specific intent is in error. As held in Theroux, at para. 24:

…The mens rea would then consist in the subjective awareness that one was undertaking a prohibited act (the deceit, falsehood, or other dishonest act) which could cause deprivation in the sense of depriving another of property or putting the property at risk. If this is shown, the crime is complete. The fact that the accused…may have felt there was nothing wrong with what he or she was doing, provides no defence.

207Thus, this Court is not to assess whether Faulkner “subjectively intended to use North House funds for personal purposes”. Rather, as held in Theroux, the mens rea for fraud focuses on two elements: a) subjective knowledge of the prohibited act and b) subjective knowledge that the prohibited act could cause deprivation to another. It is not necessary that Faulkner personally considered these means to be dishonest to be convicted of fraud for having undertaken them.

208As previously reviewed, the Crown relies on both direct and circumstantial evidence to prove Faulkner guilty of fraud. The defence submits the case at bar is entirely circumstantial, and there is insufficient direct evidence to connect Faulkner to the offence as charged. Thus, a conviction based on circumstantial evidence should only occur where guilt is the only reasonable possibility.

209Contrary to the defence submission, the following direct evidence is credible, reliable, and not insufficient to find Faulkner guilty of fraud as alleged.

DIRECT EVIDENCE

210Direct evidence is evidence which, if believed, resolves the matter in issue. The only inference involved in direct evidence is that the testimony as true: The Honourable Mr. Justice David Watt, Watt’s Manual of Criminal Evidence (Toronto: Thomson Reuters, 2019) at p. 49.

211I accept as true the direct testimony of Green and Cramer as previously reviewed, regarding Cheque #2801 for $1,000, which Faulkner wrote to himself advising Green that the cheque was a loan from the Board as an advance on his first pay.

212As Chair, Cranmer testified she was unaware that any cheques were issued to Faulkner other than his salary cheques. After Faulkner was dismissed in June 2017, Green advised Cranmer that Faulkner told her that she, Cranmer, had authorized the advance pay in Cheque #2801. Cranmer testified she had never given that authorization.

213I accept as true the direct testimony of Green and Cranmer when they testified that they both confronted Faulkner advising him the North House Visa credit card transactions for two hotel stays at the Sheraton on the Falls Niagara (Exhibit 1, Tab 18, pg. 1) were inappropriate, as they were personal expenses and not North House business expenses.

214Faulkner had not provided any receipts or invoices for the hotel stay. I accept as true Green’s testimony that she again explained to Faulkner, North House’s financial procedures including the requirement that he provide her with invoices and/or receipts for any expenditures made as Executive Director.

215The direct evidence of the e-mail discussion (Exhibit 1, Tab 32, pgs. 1 and 2), involving Green and Faulkner when Green expressed her concerns that Faulkner’s spending was personal in nature exceeding $15,000 is credible, reliable, and unassailable.

216Faulkner responded that the purpose of the spending was for future fundraising and to establish North House’s credit. Further, he had spoken to the Chair Cranmer and “We have a plan to ensure payroll and everything is fine…”

217Faulkner’s explanation for the spending was contradicted by Cranmer who testified she never discussed “establishing credit” for North House with Faulkner and never discussed ensuring payroll and credit. There were no discussions for fundraising other than general discussions about a golf tournament, but nothing ever came of it. Further, she was unaware of Faulkner’s purchases and expenses made on the North House credit card other than the Niagara Falls hotel charges previously reviewed for which she testified she confronted Faulkner advising him they were inappropriate.

218I accept Cranmer’s evidence on these points.

219For reasons previously reviewed, I accept Green’s evidence that for months she continually pressed Faulkner to provide receipts and/or invoices for transactions using the 7891Visa Credit card, but none were provided. She testified because of her continuing requests, Faulkner at one point to became very angry stating he was the Executive Director and he would spend the money as he thought appropriate to do so.

220Green testified she was concerned the credit card transactions were personal in nature particularly in the absence of receipts and invoices provided by Faulkner.

221I accept Green’s evidence about Faulkner’s litany of unfounded explanations he provided her as to why he was not providing the receipts and invoices requested.

222I accept Green’s evidence about Faulkner’s contradictory explanations why charges appeared on the credit card bill for the Travel Lodge hotel in Oshawa (i.e. that he was supporting a family in South Durham) and also that the hotel had kept his credit card number and he was making efforts to have those charges cancelled or reversed. Those charges were never cancelled or reversed.

223There is also direct evidence from Dawn Lewis, whose evidence I accept, that Faulkner boasted to her about the family trip to Niagara Falls, the trip to Gatineau Hull, the trip Blue Mountain, and the multiple purchases at Golf Town and Sport Check, advising her that he and his girlfriend Melanie were taking up golf.

224I further accept Lewis’s evidence that Faulkner advised her he paid $2,500 to prevent his ex-wife’s car from being towed away and paid a further $1,200 to have his girlfriend Melanie’s car repaired. Faulkner’s statements to Lewis are direct evidence that the above transactions were personal and not business expenses although Faulkner used the North House Visa credit card to pay for those expenditures.

CIRCUMSTANTIAL EVIDENCE

225The defence submits a conviction based on circumstantial evidence should only occur when guilt is the only reasonable possibility. Further, a reasonable doubt, or a theory alternative to guilt is not rendered “speculative” by the mere fact that it arises from the lack of evidence.

226In determining whether the offence charged has been proven beyond a reasonable doubt, the trier of fact must consider the totality of circumstances, including all the evidence and the lack of evidence.

227The defence argues the circumstantial evidence introduced and circumstantial evidence not introduced does not prove Faulkner’s guilt beyond a reasonable doubt.

228I agree with the defence submission that there must be sufficient circumstantial evidence to establish the accused had the necessary mens rea to ground the accused’s culpability: R. v Clarke, 2016 ONSC 3654, 2016 ONCS 3654, at para. 118.

Lies in the inferences that can be drawn from it.

229I adopt the rationale in R. v RM, 2020 ONCA 231, at para. 16 which holds that to justify a conviction, the circumstantial evidence must exclude any other reasonable alternative. The trier of fact must consider all plausible theories that may be inconsistent with guilt.

230However, the Crown is not required to “negative every possible conjecture, no matter how irrational or fanciful” which may be consistent with the accused’s innocence. Other plausible theories or other reasonable possibilities must be based on logic and experience applied to the evidence or the absence of evidence, not on speculation: Villaroman, at paras. 37, 41.

231In the context of circumstantial evidence, it can be difficult to draw the line between a permissible inference and impermissible speculation: Villaroman, at para. 38. Villaroman, at para. 42 cites R. v. Dipnarine, 2014 ABCA 328, 584 A.R. 138 with approval, which instructs that “[c]circumstantial evidence does not to have to totally exclude other conceivable inferences “that the trier of fact should not act on alternative interpretations of the circumstances that it considers unreasonable, and that alternative inferences must be reasonable, not possible.”

232In reviewing the circumstantial evidence, I have already held that the inference sought by the defence that because not all members of the Board were called to testify, it is possible that a Board member or members did authorize Faulkner’s credit card and banking transactions, is no more than conjecture, speculation and thus unreasonable.

233No reasonable doubt, as submitted by the defence, concerning Faulkner’s guilt of fraud, arises from this submission.

234For the same reasons I find the defence submissions amongst other that;

1. it is possible that Green lost invoices sent by Faulkner to her;

2. it is possible that Faulkner’s failure to forward the sought invoices is evidence of his disorganization and negligence;

3. it is possible that Board members lived in South Durham and therefore possible the numerous credit card restaurant transactions in South Durham were business and not personal expenses, and;

4. it is possible that Faulkner’s the cheque/cash transactions were for costs incurred for ongoing repair and/or renovation at the Cannington and Uxbridge offices

are equally speculative and unreasonable, non-factors in the determination of whether Faulkner’s guilt has been proven beyond a reasonable doubt.

235The defence submission that Faulkner’s credit card and cash transactions were authorized because of the absence of evidence of some written or oral directive identifying categories of spending that were expressly forbidden, raises a reasonable doubt of his guilt is just as equally speculative and groundless.

236To the contrary, as the Executive Director, the most senior staff person at North House who apparently brought significant experience from the non-profit sector, I find Faulkner clearly understood his obligation to act only in the best interests of North House and its clients.

237However, Faulkner then proceeded to use North House credit cards and North House’s chequing/banking privileges to methodically and systematically make personal purchases and/or pay for personal services that had no relation to North House’s mandate to assist the homeless in its community.

238To the extent the court relies on circumstantial evidence, the value of that evidence lies in the inferences that can be drawn from it. There can be no inferences of guilt without established facts. The uncontradicted facts are significant in that witnesses with direct knowledge of the proper procedures at North House testified that none of Faulkner’s credit card chequing/bank transactions were authorized.

239Even when advised the transactions were personal and not valid business expenses, Faulkner continued with those transactions, until he was terminated from his position as Executive Director.

CONCLUSION

240Theroux instructs that proof of fraud by “other fraudulent means” as alleged in Count 1 is to be determined objectively by “what reasonable people consider to be dishonest dealing”. On all the evidence, direct and circumstantial, that test has been met. Accordingly, I find the accused, Ian Blake Faulkner, guilty of Fraud on Count 1.

241Having found Mr. Faulkner guilty on Count 1, pursuant to the joint submission by counsel I find Mr. Faulkner guilty on Count 2 Breach of Probation, in the absence of evidence introduced.