La défense d'apparence de droit n'est pas recevable en matière de fraude

R v Suzi, 2018 ABPC 130

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[27]           The mens rea of the offence of fraud has been explained in the following terms.

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 that property at risk.  If this is shown, the crime is complete ... the proper focus in determining the mens rea of fraud is to ask whether the accused intentionally committed the prohibited acts (deceit, falsehood, or other dishonest act) knowing or desiring the consequences proscribed by the offence (deprivation, including the risk of deprivation): Theroux at 19. 

[28]           The issue of self-help, or colour of right, in relation to the offence of fraud was first addressed in brief by Justice McLachlin in Theroux where she stated: “The fact that the accused ... may have felt there was nothing wrong with what he or she was doing, provides no defence.” at page 19.

[29]           This topic was again commented upon briefly by the Ontario Court of Appeal in R v Must, 2011 ONCA 390.  In Must there was an appeal from a conviction on a charge of fraud.  In convicting, the trial judge had accepted as a fact that the accused honestly believed that the complainant company that he defrauded was liable to him in damages for breach of contract.  In this regard, the Court of Appeal concluded: “We agree with the trial judge that this belief did not give the appellant a defence” at para 2.

[30]           Finally, this issue was addressed in greater detail by Justice Harris for the British Columbia Court of Appeal in R v Kingsbury, 2012 BCCA 462 at para 40:

I do not agree that an honest mistake about whether in law an accused is entitled to take property or put another’s economic interests at risk is relevant to the mens rea of fraud, any more than an honest belief that the prohibited conduct is not dishonest or is not wrong is relevant to mens rea.  In my opinion, it is sufficient that an accused intend or foresee the facts or circumstances that constitute deprivation.

[31]           Christopher Suzi’s belief that he was entitled to the property in question was a mistake of law and does not negative the mens rea of fraud. “Lack of colour of right is not embraced within the definition of fraud and therefore its relevance is not contemplated by the definition of the offence of fraud”: Kingsbury at para 52.  Self-help is not available to the accused, and his belief in entitlement does not raise a reasonable doubt.  If Mr. Suzi believed that he was owed money his remedy was to sue, not to commit fraud. 

La croyance personnelle d'un accusé que l'on lui devait une somme d'argent ne peut pas l'exonérer de sa responsabilité pénale s'il fraude

R. v. Must, 2011 ONCA 390

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[3]               To succeed, the appellant must show that the facts as found by the trial judge negative the mens rea for fraud.  Those facts do not negative the mens rea; to the contrary they show that the appellant had the requisite mens rea.  The mens rea for fraud has been authoritatively determined in R. v. Théroux, 1993 CanLII 134 (SCC), [1993] 2 S.C.R. 5 at para. 24:

Having ventured these general comments on mens rea, I return to the offence of fraud. The prohibited act is deceit, falsehood, or some other dishonest act. The prohibited consequence is depriving another of what is or should be his, which may, as we have seen, consist in merely placing another's property at risk. 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 that property at risk. If this is shown, the crime is complete. The fact that the accused may have hoped the deprivation would not take place, or may have felt there was nothing wrong with what he or she was doing, provides no defence. To put it another way, following the traditional criminal law principle that the mental state necessary to the offence must be determined by reference to the external acts which constitute the actus of the offence (see Williams, supra, c. 3), the proper focus in determining the mens rea of fraud is to ask whether the accused intentionally committed the prohibited acts (deceit, falsehood, or other dishonest act) knowing or desiring the consequences proscribed by the offence (deprivation, including the risk of deprivation). The personal feeling of the accused about the morality or honesty of the act or its consequences is no more relevant to the analysis than is the accused's awareness that the particular acts undertaken constitute a criminal offence.  [Emphasis added.]

[4]               On the findings of fact, the appellant was aware that he was undertaking a prohibited act, namely the deceit in forging the time sheets, which could cause a risk of deprivation in the sense of depriving iGate of its property.  The accused’s personal belief of entitlement to damages for breach of contract did not negative the mens rea.  That belief falls within the statement in Théroux:  “The personal feeling of the accused about the morality or honesty of the act or its consequences is no more relevant to the analysis than is the accused's awareness that the particular acts undertaken constitute a criminal offence.”  The knowledge of risk of deprivation is found in the trial judge’s finding that the appellant, “unilaterally determined that his entitlement would be full payment for the time from January 6^th to March 23^rd, 2006, without affording [iGate] from whom he sought payment the opportunity either to scrutinize the amount he sought or the period of claimed entitlement, or to dispute his claims”. 

La vente d'un zapper ne constitue pas une fraude

R. v. InfoSpec Systems Inc., 2013 BCCA 333

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[16]        The Crown relies on the “other fraudulent means” aspect of s. 380(1)(a) of the Criminal Code.  Its position is that the sale of a zapper constitutes a dishonest act or dishonest dealing that creates a risk of loss or deprivation to the public.  InfoSpec’s position is that the essential elements of the substantive offence of fraud were not met in this case in the absence of evidence that one of the zappers it sold was used to evade taxes or to otherwise deprive the public of money or other property.  Put otherwise, InfoSpec says that the mere act of selling a computer program capable of being used to commit fraud is not itself fraud.  It says that to criminalize the sale of a zapper through the fraud provision of the Criminal Code is to create an offence that Parliament has not seen fit to create.

[17]        The parties made submissions with respect to whether the sale of a zapper is a dishonest act and, if it is, whether such a sale creates a risk of deprivation to the public.  As, in my view, the Crown’s case fails on the first question, there is no need to discuss the second.

[18]        In R. v. Olan, 1978 CanLII 9 (SCC), [1978] 2 S.C.R. 1175 at 1180, Mr. Justice Dickson (as he then was) said that “other fraudulent means” encompasses means other than deceit or falsehood “which can properly be stigmatized as dishonest.”  In R. v. Zlatic, 1993 CanLII 135 (SCC), [1993] 2 S.C.R. 29 at 45, Madam Justice McLachlin (as she then was) had the following to say about the actus reus of fraud by other fraudulent means:

The fundamental question in determining the actus reus of fraud within the third head of the offence of fraud is whether the means to the alleged fraud can properly be stigmatized as dishonest:  Olan, supra.  In determining this, one applies a standard of the reasonable person.  Would the reasonable person stigmatize what was done as dishonest?  Dishonesty is, of course, difficult to define with precision.  It does, however, connote an underhanded design which has the effect, or which engenders the risk, of depriving others of what is theirs. J. D. Ewart, in his Criminal Fraud (1986), defines dishonest conduct as that “which ordinary, decent people would feel was discreditable as being clearly at variance with straightforward or honourable dealings” (p. 99).  Negligence does not suffice. Nor does taking advantage of an opportunity to someone else’s detriment, where that taking has not been occasioned by unscrupulous conduct, regardless of whether such conduct was wilful or reckless.  The dishonesty of “other fraudulent means” has, at its heart, the wrongful use of something in which another person has an interest, in such a manner that this other’s interest is extinguished or put at risk.  A use is “wrongful” in this context if it constitutes conduct which reasonable decent persons would consider dishonest and unscrupulous.

[Emphasis added.]

See also:  R. v. Théroux, 1993 CanLII 134 (SCC), [1993] 2 S.C.R. 5 at 16:  “the existence of [other fraudulent means] will be determined by what reasonable people consider to be dishonest dealings.”

[19]        In its factum the Crown lays great stress on the fact that our system of taxation is based on self-reporting and self-assessing and depends on the honesty of taxpayers.  It submits that in the context of a taxation system that is vulnerable to being cheated, placing a zapper in the hands of a taxpayer creates a substantial risk of deprivation of the public purse.  While this may be so, the first question that must be asked is whether that act of placing is one that reasonable people would consider as dishonest.

[20]        While the Crown relies on the fact that a zapper is sophisticated software created solely for the purpose of facilitating tax evasion, in oral argument it acknowledged that at its core, its position is that “other fraudulent means” captures the sale of anything capable of being used to commit fraud when, at the time of the sale, the vendor knows the purchaser intends to use the thing in that way.  For example, the Crown agreed that under its theory the following would satisfy the actus reus element of fraud:

(a)      the sale of software to a partner that is capable of manipulating the partnership’s records to the financial benefit of that partner, regardless of whether that software is ever installed or used; and

(b)      the printing of a duplicate set of records (e.g., invoices) for a person who intends to use them to evade tax, even if that person later decides not to use them.

Indeed, the Crown’s theory logically would apply even if the thing capable of being used to commit fraud was handed over free of charge, e.g., InfoSpec gave a zapper to one of its Profitek customers and it was never used.

[21]        It is noteworthy that the law does not prohibit the making, possession, or sale of a zapper.  As InfoSpec points out, the Criminal Code contains a number of provisions that criminalize the possession, making, or selling of certain things capable of being used to commit crimes.  Those offences can be proven without any evidence that the thing was ever used.  For example:

(a)      s. 342.01:  possessing, making, or selling an instrument, device, apparatus, material or thing that a person knows is adapted or intended for use in forging or falsifying credit cards;

(b)      s. 342.2:  possessing, making, or selling an instrument, device, etc. intended to be used to obtain unauthorized access to a computer service;

(c)      s. 368.1:  making or selling an instrument that a person knows is adapted or intended for use to commit forgery;

(d)      s. 369:  making, using, or possessing any paper that is used to make bank-notes or that is intended to resemble such paper; and

(e)      s. 458:  possessing or selling any machine, tool, etc. that a person knows is adapted and intended for use in making counterfeit money.

[22]        I do not accept the Crown’s submission that InfoSpec “engaged in a course of dealings that was by its very nature dishonest.”  InfoSpec participated in commercial transactions involving the sale of a computer program that is not prohibited by law; the restaurants got what they paid for.  Whatever reasonable people might think about the propriety of such a sale, I am unable to say they would consider the vendor to have acted dishonestly.  If Parliament considers a prohibition on zappers necessary to thwart tax evasion, then it is open to it to enact a provision similar to those to which I have just referred.

[23]        It is worth noting that proof that a zapper was used by one of the Winnipeg restaurants would not have converted InfoSpec’s act of selling that zapper into a dishonest one.  Had one of those restaurant used a zapper to evade paying taxes, InfoSpec would be a party to fraud by reasons of s. 21(1)(b) of the Criminal Code, i.e., for having aided the restaurant in committing that offence.  In those circumstances, the dishonest act would be the restaurant’s use of the zapper for its intended purpose, not its sale by InfoSpec.

[24]        As for the Crown’s request to substitute a conviction for attempted fraud, its submission is predicated on InfoSpec having engaged in “fraudulent behaviour”.  However, since selling a zapper is not a dishonest act, this argument fails.  I note that in both cases the Crown cites for the proposition that a conviction for attempted fraud can be substituted on appeal, the respective appellants were shown to have acted fraudulently.  Convictions for attempted fraud were substituted because ultimately the fraudulent actions did not succeed:  Detering v. The Queen, [1982] 2 S.C.R. 586 at 596; R. v. Reis, 2003 MBCA 98 at paras. 16 – 19, [2004] 6 W.W.R. 640.  See also:  United States of America v. Schrang (1997), 1997 CanLII 3588 (BC CA), 114 C.C.C. (3d) 553 at paras. 38 – 44 (B.C.C.A.), leave ref’d [1997] 3 S.C.R. xiv.

[25]        One final comment.  The charge here was one of fraud in excess of $5000.00.  Given there was no evidence that either Winnipeg restaurant used a zapper, it is difficult to understand how the Crown could prove the amount of the alleged fraud, or even of an attempted fraud.  This point does not appear to have been raised at trial.  When it was raised by the Court on this appeal, the Crown responded that even though there was no evidence as to what the restaurants paid for a zapper, it could be inferred that they collectively intended to evade payment of more than $5000.00 in taxes from the general evidence that InfoSpec charged between $1000.00 and $2,500.00.  According to the Crown, the only logical inference is that no one would pay that price for a zapper unless they intended to evade substantially more in taxes.  I leave the cogency of that submission for another day.

Il est possible d'être reconnu coupable de l'infraction de tentative de fraude

R. v. Reis, 2003 MBCA 98

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16                 This is obviously a case of deceit or falsehood in that sense.  The accused lied to MPIC about his work status with respect to the promised job.  While the trial judge had a reasonable doubt as to whether MPIC’s pecuniary assets were at risk, it is also obvious that the steps taken by the accused were more than mere preparation, as required by s. 24 of the Code for an offence of attempt.

17                 But what of the accused’s intent?  Did he have the mens rea for the offence of fraud, which is the mens rea for the offence of attempt fraud? (Detering v. The Queen, 1982 CanLII 59 (SCC), [1982] 2 S.C.R. 583.)

18                 The accused argues that the trial judge’s reasonable doubt as to whether MPIC’s pecuniary interests were at risk equates to a reasonable doubt with respect to the deprivation component of the mens rea of fraud.  I disagree.  The pecuniary risk aspect related to the actus reus is a matter of fact to be determined by the trial judge.  While the trial judge had a reasonable doubt as to whether there was a risk in fact because of the safeguards MPIC put in place, he did not directly address the deprivation component of the mens rea of the offence.  For that, the Crown must prove that the accused had subjective knowledge that his deceit could cause deprivation to MPIC by way of actual loss or pecuniary risk.  It is the accused’s intention at the time of the deceit that is relevant.  From the findings of fact made by the trial judge and the inferences to be drawn from them, there can be only one conclusion.  The accused knew that his false application could cause MPIC to pay out income replacement benefits (that was the whole purpose of his deceit) or at least MPIC could be put at risk of doing so.  Even if the safeguards in place made such a payout or risk impossible, that is no defence to attempt fraud when the accused’s actions go beyond mere preparation (United States of America v. Dynar, 1997 CanLII 359 (SCC), [1997] 2 S.C.R. 462).

19                 I agree with the Crown that all of the elements of the offence of attempt fraud were established on the evidence at trial beyond a reasonable doubt.

20                 But did the trial judge err in law in not convicting the accused of attempt fraud when the Crown did not seek such a conviction in the event of an acquittal on the offence of fraud?

21                 Section 660 of the Code explicitly recognizes that an accused may be convicted of the attempt of the offence charged:

660.  Where the complete commission of an offence charged is not proved but the evidence establishes an attempt to commit the offence, the accused may be convicted of the attempt.

22                 The trial judge did not mention the offence of attempt in his reasons.  That may be somewhat understandable because the Crown did not seek an alternative conviction in the event of an acquittal.  Nonetheless, it was incumbent on the trial judge to direct himself in the same way a judge is required to instruct a jury on included offences when there is a viable issue raised by the evidence (R. v. Smith (1978), 1978 CanLII 2394 (SK KB), 39 C.C.C. (2d) 205 (Sask. QB); R. v. George, 1960 CanLII 45 (SCC), [1960] S.C.R. 871).  Thus it was incumbent on the trial judge to direct his mind to the included offence of attempt fraud.  His failure to do so was an error in law. 

23                 Section 686(4) of the Code outlines the options available to this court on Crown appeals:

686(4)  If an appeal is from an acquittal … the court of appeal may

(a) dismiss the appeal; or

(b) allow the appeal, set aside the verdict and

(i)  order a new trial, or

(ii) except where the verdict is that composed of a judge and jury, enter a verdict of guilty with respect to the offence of which, in its opinion, the accused should have been found guilty but for the error in law, and pass a sentence that is warranted in law, or remit the matter to the trial court and direct the trial court to impose a sentence that is warranted in law. 

24                 As already noted, the Crown asks this court to enter a verdict of guilty for the offence of attempt fraud.  The powers of an appellate court to allow an appeal from acquittal and enter a verdict of guilty are subject to limits.  In R. v. Cassidy, 1989 CanLII 25 (SCC), [1989] 2 S.C.R. 345, in regard to a trial by judge alone, Lamer J., as he then was, commented on the availability of a guilty verdict (at pp. 354-54):

The Crown replies that the Court of Appeal may allow a Crown appeal against an acquittal entered by a trial judge and substitute a verdict of guilty where the Crown establishes that an error of law was committed at trial, satisfies the Court of Appeal that, had there been a proper application of the law, the verdict would not have been the same, and further demonstrates that the accused should have been found guilty but for the error of law.  In this respect, the principle that has been established at common law is that all the findings necessary to support a verdict of guilty must have been made, either explicitly or implicitly, or not be in issue (Vézeau v. The Queen, 1976 CanLII 7 (SCC), [1977] 2 S.C.R. 277, at pp. 291-92, and R. v. Courville (1982), 1982 CanLII 3706 (ON CA), 2 C.C.C. (3d) 118 (Ont. C.A.), at p. 125; aff. sub nom., Courville v. The Queen, 1985 CanLII 37 (SCC), [1985] 1 S.C.R. 847.) …

L'utilisation à des fins personnelles par un accusé d'une somme d'argent destinée à la compagnie dont il est propriétaire constitue une infraction

R. c. Verville, 1999 CanLII 13272 (QC CA)

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Éléments constitutifs du crime de vol:

 

Selon l’appelant, l’un des éléments essentiels du crime de vol par conversion d’argent n’aurait pas été prouvé. En effet, s’il admet que l’argent de Constructions Verville lui a été remis, il nie l’avoir utilisé pour son usage personnel. Il affirme plutôt qu’il l’a dépensé au profit de la société commerciale. Donc, selon l’appelant, la Couronne n’a pas établi que l’argent a servi à son usage personnel.

 

J’estime que l’appelant a tort. Le juge de première instance a conclu que l’argent dérobé par l’appelant a servi à maintenir son niveau de vie. L’appelant n’a démontré aucune erreur dans cette conclusion de fait du juge de première instance qui permettrait l’intervention de notre Cour. D’ailleurs, le poursuivant n’avait pas le fardeau d’établir à quel usage précis l’appelant a consacré l’argent dérobé. En l’espèce, la preuve permettait de conclure, hors de tout doute raisonnable, que l’argent de Constructions Verville a été remis à l’appelant et que celui-ci ne l’a pas utilisé au bénéfice de Constructions Verville.

 

Dans un autre ordre d’idées, l’appelant invoque la défense d’apparence de droit pour justifier l’appropriation des biens de Constructions Verville. Cette défense repose sur «la croyance honnête dans un état de faits qui, s’il avait réellement existé, se justifierait en droit ou excuserait l’acte commis; il faut de plus que la croyance honnête soit erronée quant à un droit légal et non quant à un droit moral».^([5])

 

À mon avis, cet argument ne pouvait être retenu, en l’espèce, parce que l’appelant n’a jamais prétendu que l’argent lui appartenait ni qu’il l’a pris parce qu’il croyait honnêtement qu’il était à lui. Sa défense consistait à dire qu’il n’avait pas volé l’argent de Constructions Verville, mais que l’argent avait servi à payer comptant ses fournisseurs, ses employés...

Absence de preuve de fraude à l’égard des créanciers de Constructions Verville

 

Les reproches formulés par l’appelant à ce chapitre sont de deux ordres: 1°) le juge de première instance aurait tenu compte des faits entourant la faillite de Constructions Verville contrairement à ce qu’il aurait affirmé durant le procès et 2°) la preuve n’aurait pas établi une fraude envers les créanciers.

 

Le juge de première instance était tenu de considérer tous les faits pertinents aux actes d’accusation dont la preuve était admissible, suivant les règles de preuve applicables. En l’espèce, il a simplement affirmé, à juste titre, qu’il n’était pas lié par le jugement de la Cour supérieure en matière de faillite ou encore par l’avis du syndic sur le caractère frauduleux ou non des agissements de l’appelant.

 

Par ailleurs, à l’égard de la suffisance de la preuve de la commission du crime de fraude, il y a lieu de rappeler les éléments constitutifs de cette infraction: l’actus reus sera établi par la preuve du moyen dolosif et de la privation qu’il a causée, soit une perte ou la mise en péril des intérêts pécuniaires de la victime; la mens rea de l’infraction est établie par la connaissance subjective de l’acte prohibé et du fait qu’il pourrait causer une privation de la victime.^([6])

 

En l’espèce, le juge a tenu compte de deux éléments pour conclure à la culpabilité de l’appelant: la subtilisation de plus de 180 000 $ à Constructions Verville et la distraction de certains biens de l’actif de la faillite.

 

J’estime que c’est à juste titre que l’appelant a été reconnu coupable de fraude envers les créanciers de Constructions Verville. En effet, il a conçu un moyen dolosif qui a compromis les intérêts pécuniaires de l’entreprise dont il était propriétaire. En outre, même si l’appelant ne souhaitait pas la déconfiture de Constructions Verville, il savait qu’en ponctionnant les revenus de Constructions Verville, il mettait en péril ses intérêts pécuniaires et ceux de ses créanciers.

Ne pas divulguer un changement important dans sa situation à l'aide sociale peut être une fraude

R. v. D'Amour, 2002 CanLII 45015 (ON CA)

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[12]         [12]         The appellant did not make any false statements in her initial application and it was determined that she was entitled to receive assistance under the Act.  About two months later, she commenced employment and continued that employment for the next two years.  Although the appellant reported changes in her circumstances which enhanced her entitlement to benefits under the Act, she did not report her employment.  She continued to receive benefits under the Act based on her ongoing representation that she had no income or earnings.  Had she disclosed her employment income, the appellant would not have been totally ineligible for benefits under the Act, but her benefits would have been reduced by some $14,636.98 over the two year time period.

[13]         [13]         In March 1997, Mr. Woo, a caseworker with the Department, met with the appellant and asked her to provide him with her T4 slips for the years 1994, 1995 and 1996.  He made this request because the Department had received documents suggesting that the appellant, contrary to her representations, had been employed while receiving benefits.  Under s. 10 of the Act, the Department could withhold benefit cheques if the appellant did not produce the T4 slips.  Mr. Woo told the appellant that benefit cheques would be withheld until she provided the requested T4 slips.  She subsequently gave the T4 slips to Mr. Woo and received her benefit cheques.  The T4 slips confirmed that the appellant had received some $28,000 in undisclosed income.

[59]         [59]         The appellant applied for benefits under the Act.  In exchange for the receipt of those benefits, she undertook to make full, accurate and ongoing disclosure of her income.  She knew that this obligation included the production of documents relevant to her income if requested by the Department.  The application signed by the appellant contained a clear notice that obtaining benefits by dishonest means constituted the crime of fraud.

Un mensonge blanc est insuffisant pour justifier une condamnation pour fraude; pour cela, le mensonge doit être significatif

R v MacMullin, 2014 ABQB 476 

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[498]      In Schedule A, I document the actual acts of dishonesty, deceit, fraudulent behavior, and false information and whether they lead me to conclude that deceits [the actus reus] were perpetuated on the financial institutions. This is the essential element of “deceit, falsehood and other fraudulent act”, and is decided on an objective basis. There are two other aspects to the actus reus. Both additional aspects spring from common sense. The deceit has to be material. This is to not make criminals out of minor, white lies. Much like a person who lies about their height on a dating website by giving their height with lifting shoes or high heels, not every misstatement will lead to mortgage fraud in an application for financing. In this case, the deceits were major and fundamental to the deal so where I find one occurred, it is also found to be material.