R. v. Park (S.J.), 2010 ABCA 248

• Judge: Berger, Costigan and Slatter, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: August 24, 2010
• Citations: 2010 ABCA 248;(2010), 482 A.R. 153 (CA)

R. v. Park (S.J.) (2010), 482 A.R. 153 (CA);

      490 W.A.C. 153

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. AU.065

Her Majesty The Queen (appellant) v. Scott Park (respondent)

(0903-0048-A; 0903-0255-A; 2010 ABCA 248)

Indexed As: R. v. Park (S.J.)

Alberta Court of Appeal

Berger, Costigan and Slatter, JJ.A.

August 24, 2010.

Summary:

The accused was charged with 41 counts of fraud, one count of conspiracy to commit fraud and one count of committing fraud for a criminal organization. The charges related to a fraudulent mortgage scheme masterminded by Pervez where mortgage funds were obtained from institutional lenders on properties purchased by Pervez and "flipped" to straw buyers. Mortgage funds were then obtained for an inflated property value using falsified and forged documents and material misrepresentations in the mortgage applications. But for the fraud, the lenders testified that they would never have granted mortgages. The accused, primarily a criminal law lawyer, was retained to do the legal work for a number of the mortgage transactions. After the Crown closed its case, the accused applied for a directed verdict on all counts on the ground that the Crown failed to present any evidence of an essential element of the offence of fraud (i.e., reliance on the deceit or false representations).

The Alberta Court of Queen's Bench, in a judgment reported (2009), 465 A.R. 1, granted a directed verdict of not guilty on the 41 fraud counts and the count of committing fraud for a criminal organization, but not the conspiracy count. The Crown failed to provide direct evidence of detrimental reliance and there was no evidence upon which reliance could be inferred.

The Alberta Court of Queen's Bench, in a judgment reported (2009), 465 A.R. 20, subsequently found the accused not guilty on the count of conspiracy to commit fraud. The Crown appealed.

The Alberta Court of Appeal dismissed the appeal. The trial judge committed no reviewable error in finding the accused not guilty on the conspiracy count. Although the trial judge erred in granting a directed verdict of acquittal on the other counts on the reliance issue, there was no basis for a new trial. Given the fact findings on the fully tried conspiracy count, that the accused had no knowledge of the misrepresentations and did not facilitate any fraudulent acts, had the fraud counts been fully tried an acquittal on those counts would have been inevitable. The new trial was precluded not on the basis of estoppel (fact findings in full conspiracy trial binding on any new trial for the fraud counts), but because the improper granting of the directed verdict of acquittal would not have affected the outcome.

Criminal Law - Topic 2005

Fraudulent transactions - Fraud - Elements of fraud - The accused was charged with 41 counts of fraud and committing fraud for a criminal organization - The charges related to a fraudulent mortgage scheme masterminded by Pervez, where mortgage funds were obtained from institutional lenders on properties purchased by Pervez and "flipped" to straw buyers - Mortgage funds were then obtained for an inflated property value using falsified and forged documents and material misrepresentations in the mortgage applications - The accused was a real estate lawyer whose services were used for a number of the mortgage transactions - After the Crown closed its case, the accused applied for a directed verdict on all counts on the ground that the Crown failed to present any evidence of an essential element of the offence of fraud (i.e., reliance on the deceit or false representations) - The trial judge granted a directed verdict of not guilty - The Crown did not call any of the persons who approved the mortgages - The Crown called only senior lending institution employees who had no involvement in or knowledge of the 41 mortgage approvals - The witnesses testified as to their policies for granting mortgages and each testified hypothetically that they would not approve any mortgage based on false information - No witness could state "what the employee who approved the mortgage knew or did not know, or what they did or did not do" - There was no evidence that any employee who approved any of the mortgages relied on the false information in approving the mortgages - Evidence that each institution had internal policies respecting mortgage approvals and that, hypothetically, each of the mortgages should not have been approved under the policies, was not evidence of the essential element of detrimental reliance - The Crown should have called as witnesses the 16 persons who approved the 41 mortgages to testify that they relied on the false information provided - The Alberta Court of Appeal held that the trial judge erred in granting a directed verdict - The trial judge erred in concluding that the documents, coupled with the testimony of the financial officers, were insufficient to infer reliance and erred in finding that the only evidence of reliance had to come from the actual lender employees who approved the mortgages and testified to relying on the false statements - The court stated that "an absence of evidence from the individual who personally approved a mortgage cannot be equated with positive evidence of non-reliance. Reliance can be demonstrated through indirect evidence, through direct evidence in the form of documents that establish the policies and practices of the lender." - However, the court declined to order a new trial - An acquittal would have been inevitable where the trial judge's findings on the fully tried conspiracy count led to the inescapable conclusion that there was no evidence upon which a properly instructed jury could conclude that the accused knew that the mortgage applications contained false representations - See paragraphs 1 to 30, 62 to 66.

Criminal Law - Topic 2650

Attempts, conspiracies, accessories and parties - Conspiracies - Agreement - What constitutes a conspiracy - Perez masterminded a fraudulent mortgage scheme where mortgage funds were obtained from institutional lenders on properties purchased by Pervez, superficially renovated, and "flipped" by selling to straw buyers who qualified for mortgages - Mortgage funds were then obtained for an inflated property value using falsified and forged documents and material misrepresentations in the mortgage applications - But for the fraud, the lenders testified that hypothetically they would not have granted mortgages - Perez and others pleaded guilty to fraud - The accused lawyer, who specialized in criminal law, was retained to do the legal work for some of the mortgage transactions, was charged with conspiracy to commit fraud - A conspiracy was conceded - The issue was whether the accused was a member of that conspiracy - The trial judge acquitted the accused - Although there was direct evidence of acts and utterances by the accused that supported a finding that the accused was "probably" a member of the conspiracy, entitling the court to consider the acts and declarations of the alleged co-conspirators, the Crown failed to prove beyond a reasonable doubt that the accused was a member of the conspiracy - Suspicion of involvement was not enough - The fact that the accused may have been guilty of professional negligence in how he handled his real estate practice was not synonymous with conspiracy to commit fraud - The evidence failed to prove beyond a reasonable doubt the requisite knowledge or wilful blindness respecting the conspiracy - The evidence raised a reasonable doubt that the accused was a member of the conspiracy or that he recruited persons to become members of the conspiracy, including evidence of steps taken to ensure the accused was kept in the dark and acts by the accused inconsistent with his being a member of the conspiracy (e.g., explaining the mortgage documents to the straw buyers) - The court stated that "the evidence leaves me with a reasonable doubt as to whether [the accused] was actually ascribing to commit fraud as opposed to attempting to profit from involvement in a legitimate business" - The Alberta Court of Appeal held that the trial judge committed no reviewable error in acquitting the accused - See paragraphs 31 to 36.

Criminal Law - Topic 2742

Attempts, conspiracies, accessories and parties - Parties to offences - Necessary intention or knowledge - [See Criminal Law - Topic 2650 ].

Criminal Law - Topic 4359

Procedure - Charge or directions - Jury or judge alone - Directed verdict of "not guilty" - [See Criminal Law - Topic 2005 ].

Criminal Law - Topic 4958

Appeals - Indictable offences - New trials - Grounds for refusing new trial - [See Criminal Law - Topic 2005 ].

Cases Noticed:

R. v. Théroux (R.), [1993] 2 S.C.R. 5; 151 N.R. 104; 54 Q.A.C. 184, refd to. [para. 9].

R. v. Drakes (A.) et al., [2006] O.T.C. 24 (Sup. Ct.), affd. (2009), 252 O.A.C. 200; 2009 ONCA 560, refd to. [paras. 10, 29].

R. v. Charemski (J.), [1998] 1 S.C.R. 679; 224 N.R. 120; 108 O.A.C. 126, refd to. [para. 15].

United States of America v. Shephard, [1977] 2 S.C.R. 1067; 9 N.R. 215, refd to. [para. 15].

R. v. Arcuri (G.), [2001] 2 S.C.R. 828; 274 N.R. 274; 150 O.A.C. 126; 2001 SCC 54, refd to. [para. 15].

Alberta (Treasury Branches) v. Hammond (1997), 192 A.R. 353 (Q.B. Master), refd to. [para. 18].

R. v. Winning (1973), 12 C.C.C.(2d) 449 (Ont. C.A.), refd to. [para. 18].

R. v. Rodney (C.), [2007] O.T.C. Uned. F61; 74 W.C.B.(2d) 625 (Sup. Ct.), refd to. [para. 18].

R. v. Guay (J.), [1999] O.T.C. Uned. 814; 43 W.C.B.(2d) 427 (Sup. Ct.), refd to. [para. 18].

R. v. Rehberg (J.) (1994), 127 N.S.R.(2d) 331; 355 A.P.R. 331; 111 D.L.R.(4th) 336 (S.C.), refd to. [para. 18].

R. v. Champagne (1987), 19 Q.A.C. 309 (C.A.), refd to. [para. 18].

R. v. Semeniuk (M.K.), 2001 CarswellBC 3440 (S.C.), affd. [2004] B.C.A.C. Uned. 42; 61 W.C.B.(2d) 153; 2004 BCCA 115, refd to. [para. 18].

R. v. Nette (D.M.), [2001] 3 S.C.R. 488; 277 N.R. 301; 158 B.C.A.C. 98; 258 W.A.C. 98; 2001 SCC 78, refd to. [para. 29].

R. v. Guthrie (R.) (1991), 114 A.R. 355 (C.A.), affd., [1992] 2 S.C.R. 222; 140 N.R. 155; 131 A.R. 48; 25 W.A.C. 48, refd to. [para. 29].

Goodman Estate v. Geffen, [1991] 2 S.C.R. 353; 127 N.R. 241; 125 A.R. 81; 14 W.A.C. 81, refd to. [para. 33].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 34].

R. v. Sparks (R.) (2000), 188 N.S.R.(2d) 170; 587 A.P.R. 170 (C.A.), refd to. [para. 35].

R. v. Trieu (B.) (2008), 429 A.R. 200; 421 W.A.C. 200; 2008 ABCA 143, refd to. [para. 38].

Ryder v. Wombwell (1868), L.R. 4 Ex. 32, refd to. [para. 41].

R. v. R.C.L., [2004] A.R. Uned. 537; 2004 ABQB 592, refd to. [para. 42].

R. v. Grdic, [1985] 1 S.C.R. 810; 59 N.R. 61, refd to. [para. 49].

R. v. Mahalingan (R.), [2008] 3 S.C.R. 316; 243 O.A.C. 252; 381 N.R. 199, refd to. [para. 49].

R. v. Graveline (R.), [2006] 1 S.C.R. 609; 347 N.R. 268; 2006 SCC 16, refd to. [para. 54].

R. v. Cullen, [1949] S.C.R. 658, refd to. [para. 64].

R. v. Vezeau, [1977] 2 S.C.R. 277; 8 N.R. 235, refd to. [para. 64].

R. v. Morin, [1988] 2 S.C.R. 345; 88 N.R. 161; 30 O.A.C. 81, refd to. [para. 64].

R. v. Sutton (K.M.), [2000] 2 S.C.R. 595; 262 N.R. 384; 230 N.B.R.(2d) 205; 593 A.P.R. 205; 2000 SCC 50, refd to. [para. 64].

Counsel:

S.L. Brown, Q.C., for the appellant;

G.J. Worobec and D.J. Anderson, for the respondent.

This appeal was heard on May 28, 2010, before Berger, Costigan and Slatter, JJ.A., of the Alberta Court of Appeal.

On August 24, 2010, the judgment of the Court was delivered and the following opinions were filed:

Berger, J.A. - see paragraphs 1 to 61;

Slatter, J.A. (Costigan, J.A., concurring) - see paragraphs 62 to 66.