FACTUAL BACKGROUND AND OVERVIEW

Introduction

[1] The applicant, Stephane Gagnon, was detained on 6 July 2023 on the primary and tertiary grounds by Justice of the Peace Valentine.

[2] He applied for a bail review in front of my colleague, Garton J., who dismissed his application on 15 December 2023. However, Garton J. did not provide her reasons before retiring as a judge.

[3] The applicant applies to this court seeking bail for a second time. He argues that at his original bail hearing, the Justice of the Peace committed an error in principle when ordering his detention. He further submits that there has been a material change of circumstances since his initial detention.

The Allegations

[4] The applicant is facing charges of committing fraud over $5000 and using a forged document. He is alleged to have defrauded 335 victims of $20 million, only $9 million of which has been recovered.

[5] The Crown alleges that the applicant operated a company that advertised investments to Canadians using their retirement funds and promising significant returns. Unfortunately, the victims were paid a fraction of the money that they were promised and lost a substantial amount of their money in the process. As part of the scheme, the applicant is also alleged to have forged two tax related opinions as a means of convincing a third-party company to continue working with his businesses.

[6] When an influx of complaints regarding the investments began between September 2019 to June 2021, the applicant travelled to Asia and ended up relocating permanently to Indonesia. There he remarried and had a child.

[7] On 13 October 2021, charges relating to these allegations were laid and a Canada wide warrant was issued for the applicant’s arrest. The applicant was located in Indonesia and Canadian authorities began communications with Indonesian law enforcement. As a result, the Indonesian authorities agreed to deport the applicant to Canada.

[8] The applicant arrived in Canada on the 11 June 2023 where he was arrested on arrival at Vancouver Airport. Subsequently, he was brought to Toronto where he sought bail; he bore the onus because he was not ordinarily resident in the jurisdiction.

The Initial Detention Decision

[9] The Justice of the Peace held that the applicant’s detention was justified on the primary and tertiary grounds contained in s. 515(10) of the Criminal Code, R.S.C. 1985, c. C-46 [“Criminal Code”].

[10] On the primary ground she found the applicant to be a potential flight risk: there was a realistic possibility of a significant jail sentence and the applicant was living in Indonesia when he was brought back to Canada. The Justice of the Peace recognised that Indonesia had no extradition agreement with Canada. She further concluded that the applicant had weak ties to Canada: although he had some members of his family living in Canada, his connection to Indonesia was much stronger because his wife, adult daughter, and two younger children lived there. The Justice of the Peace also held that there was evidence that the applicant wished to start and establish new businesses in Indonesia.

[11] The Justice of the Peace also acknowledged the applicant’s offer to deposit a significant sum of money with the court in the form of a cash deposit amounting to $100,000. Nevertheless, she felt this amount of money was insufficient in comparison to the funds available to the applicant through his company and its associated businesses. The Justice of the Peace also found there to be a "lack of transparency” with respect to the source of the applicant’s funds.

[12] Further, surrendering his passport would not prevent the applicant from leaving the country as he had shown that he had the adaptability to “survive anywhere”.

[13] With respect to the applicant’s awareness of the charges, the Justice of the Peace found that the applicant was aware of the Canada-Wide Warrant that had been issued and concluded that the applicant had advised his brother not to comment if questioned by the authorities. She also held that the applicants’ failure to surrender himself to the authorities indicated that he would not return willingly to Canada.

[14] Turning to the tertiary ground, the Justice of the Peace held that the test set out in R. v. St. Cloud, 2015 SCC 27, [2015] 2 S.C.R. 328, had been met. The Crown had a strong case, the offence was very serious, and the applicant faced a significant period of incarceration if convicted. The circumstances surrounding the offence - the defrauding of over 300 people of several millions of dollars - also weighed in favour of detention.

[15] Balancing all of the factors, the Justice of the Peace found that the applicant had not met his onus regarding the tertiary ground.

LEGAL PRINCIPLES

The Test for Review

[16] Section 520 of the Criminal Code permits a review of a detention order when:

• New relevant evidence is tendered or there has been a material change in circumstances

• The justice who made the original order committed an error of law

• The justice has rendered a clearly inappropriate decision by giving excessive weight to one relevant factor and/or insufficient weigh to another

[17] The bail review judge owes deference to the original justice because “the reviewing judge is not in a better position than the justice to evaluate whether the detention of the accused is necessary”: St. Cloud, at para. 118.

[18] Here, the applicant argues that the justice rendered an inappropriate decision by relying on the applicant’s unwillingness to surrender to the Canadian authorities and requesting that they follow proper extradition procedures to return him to Canada. He further argues that there has been a material change of circumstances due to an enhanced plan and the filing of two “strong” applications relating to an abuse of process and s. 11(b) of the Canadian Charter of Rights and Freedoms, Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 [the “Charter”].

Was the Decision Inappropriate or An Error in Law?

[19] The applicant cites the Justice of the Peace’s reliance on the applicant’s unwillingness to voluntarily surrender himself as a basis for finding that he was a flight risk. The applicant argues that this was an error and led to an inappropriate decision as he was under no legal obligation to surrender himself in the absence of a legal requirement to do so.

[20] The Justice of the Peace outlined a number of factors that led her to conclude that the applicant had failed to establish that his detention was not required under the primary ground. These were:

• The applicant faced the possibility of a significant jail sentence if found guilty which created an incentive to flee the jurisdiction;

• The applicant resided in Indonesia and had strong links to that country which had no extradition agreement with Canada;

• The applicant had limited ties to Canada;

• The proposed security deposit was inadequate bearing in mind the funds the applicant had access to;

• The applicant’s demonstrated ability to travel without a Canadian passport;

• A GPS bracelet was deemed to be too limited to be of any assistance in the circumstances of this case;

• The applicant failed to co-operate with the authorities who were seeking to return him to Canada and declined to board a flight to Canada from Australia; and

• The sureties put forward were unsuitable.

[21] Even if the Justice of the Peace committed an error in relying on the applicant’s lack of co-operation in returning to Canada, this was only one of several factors cited by the Justice of the Peace. As described, the Justice of the Peace relied upon a host of factors that overwhelmingly demonstrated the strong likelihood that the applicant would not remain within the jurisdiction. There was no error in law or principle: the Justice of the Peace’s decision was not inappropriate.

Is There a Material Change in Circumstances?

[22] The applicant also relies upon a material change of circumstances.

[23] First, he argues that since the original bail hearing there is now new evidence that he was subject to a “disguised extradition” and tricked into returning to Canada. This, he says, forms the basis of a powerful abuse of process argument. Further, the applicant submits that there is an additional “strong” argument that his right to a trial within a reasonable time, protected by s. 11(b) of the Charter, has been violated. The applicant also says that his release plan is significantly stronger than that advanced at the original bail hearing with an increased pledge of money by the applicant’s father.

[24] I reject these submissions.

[25] In St. Cloud, the Supreme Court of Canada discussed the power of a court to review a prior order made during a bail hearing under ss. 520 and 521 of the Criminal Code.

[26] The Court found that the sections did “not confer on the reviewing judge an open-ended power to review the initial order respecting the detention or release of the accused. The reviewing judge must therefore determine whether it is appropriate to exercise this power of review”: St. Cloud, at para. 120.

[27] At para. 139, the Court indicated that a reviewing judge may intervene where:

(i) New evidence is tendered;

(ii) An error of law has been made; or

(iii) Where the original decision was clearly inappropriate.

[28] In this case, the applicant argues that the material change of circumstances is triggered by new evidence that was not available at the original bail hearing.

[29] When dealing with new evidence, the Court suggested a modified version of the criteria set out in Palmer v. R., 1979 CanLII 8 (SCC), [1980] 1 S.C.R. 759, at para. 22. Specifically, a reviewing court would focus on due diligence, the relevance of the new evidence tendered, the credibility of the evidence in that it is reasonably capable of belief, and whether the new evidence purportedly forming part of the material change of circumstances could have “affected the balancing exercise engaged in by the justice under s. 515(10)(c)” of the Criminal Code: St. Cloud, at para. 137. The Crown disputes the last criterion.

[30] The Court’s comments in St. Cloud echo those made in R. v. Whyte, 2014 ONCA 268, 119 O.R. (3d) 305. In Whyte, Tulloch J.A. (as he then was) stated, at para. 26, that “the assessment of whether a material change in circumstances exists in a particular case depends on the actual considerations that underpinned the first bail judge's refusal of bail. In other words, the issue is whether the change in circumstances is relevantly material”.

[31] Other cases have stated that the mere shuffling of sureties to obtain bail is not sufficient by itself to constitute a material change of circumstances. It is only where “the commitment and nature of the newly proffered suretyship materially call into question the continued validity of the reasons for detention can it be reasonably be said that the submitted material change of circumstances is relevant to the existing cause of detention”: R. v. Ferguson, [2002] O.J. No. 1969, at para. 17.

[32] As noted, when material change of circumstances is argued, the focus centres upon the factors underpinning the purported change to the original bail decision. In R. v. J.A., 2020 ONCA 660, 153 O.R. (3d) 593, at paras. 25-26, Thorburn J.A., writing for the majority of the Court of Appeal stated:

Where new evidence is submitted to demonstrate a material change in circumstances, that evidence should be considered together with the considerations that underpinned the first bail judge's refusal of bail to determine whether the alleged change in circumstance is both material and relevant to the case at hand such that a hearing de novo is warranted: Whyte, at para. 26; R. v. C. (A.A.), [2015] O.J. No. 3450, 2015 ONCA 483, at para. 56; and St-Cloud, at para. 121.

If the alleged change in circumstance is one that could reasonably be expected to have affected the result in this case, the reviewing judge is authorized to conduct a new hearing and conduct a fresh analysis on the bail application as if he or she were the initial decision-maker: St-Cloud, at para. 138.

[33] These principles underline the difficulty with the applicant’s argument.

[34] First, the mere filing of the two motions alleging an abuse of process and a violation of s. 11(b) does not, of itself constitute a material change of circumstances. Whilst the applicant argues that they are “strong” and likely to succeed on their hearing dates, the Crown disagrees and argues that they are meritless.

[35] The only way in which to determine if these applications are “strong” is to conduct an analysis which would effectively amount to a pre-screening hearing of the applications. That is not the function of the bail review judge. Doing so would result in duplicated hearings taking place and significant time inefficiencies. It would also raise the spectre of conflicting decisions on the same applications. For these reasons, I find the applicant’s motions have very little relevance to the material change of circumstances argument.

[36] Secondly, the new plan does not add any real value to the plan advanced before Justice of the Peace Valentine. A plan lacking in any such value means that there is no material change of circumstances: R. v. Phillips, 2020 ONSC 6189, at para. 16.

[37] The increased surety pledge adds very little to the bail equation. Also, the additional $50,000 adds little incentive for the applicant to remain in the country when the allegation is that he committed fraud to obtain millions of dollars. The presence of the applicant’s children in Canada cannot be described as a material change of circumstances as they do not live with him under the release plan and his wife and child remain in Indonesia.

[38] Even though new sureties have been proposed I find that they constitute what was described in Ferguson as a reshuffling of the deck. I also agree with the Crown that the applicant’s father was proposed as a surety at the original bail hearing and rejected as unsuitable and lacking in credibility when he testified.

[39] For these reasons, I find that there has been no material change of circumstances and the bail review is dismissed.

S.A.Q. Akhtar J.

Released: 1 October 2024

COURT FILE NO.: CR-24-00000369-00BR

DATE: 20241001

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HIS MAJESTY THE KING

– and –

STEPHANE GAGNON

RULING ON BAIL REVIEW

S.A.Q. Akhtar J.

R. v. Gagnon, 2024 ONSC 5390

Case Summary

FACTUAL BACKGROUND AND OVERVIEW

Introduction

The Allegations

The Initial Detention Decision

LEGAL PRINCIPLES

The Test for Review

Was the Decision Inappropriate or An Error in Law?

Is There a Material Change in Circumstances?

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues

Statutory Provisions 3

Legal Tests 2

Legislation 4