R v Iyer, 2014 ABQB 684

Court of Queen ’ s Bench of Alberta Citation: R v Iyer, 2014 ABQB 684 Date: 20141110 Docket: 120555024Q1 Registry: Edmonton Between: Her Majesty the Queen Crown - and - Vimal Chandra Iyer Applicant/Accused Restriction on Publication Trial information in Absence of Jury – See the Criminal Code , Section 648(1) and Order granted August 22, 2014 by Moreau J. pursuant to Practice Note #4 with respect to publication. Information concerning this application must not be published, broadcast, or transmitted in any manner.

NOTE: Restriction on Publication shall remain in effect until the completion of the criminal proceedings in the Court of Queen’s Bench of Alberta. Corrected judgment: A corrigendum was issued on November 14, 2014; the corrections have been made to the text and the corrigendum is appended to this judgment. Editorial Notice: The restriction on publication ended December 2, 2016. _______________________________________________________ Reasons for Decision of the Honourable Madam Justice M.T. Moreau

_______________________________________________________ I. Introduction................................................................................................................................. 2 II. History of the Criminal Proceeding............................................................................................ 3 III. History of this Application....................................................................................................... 4 IV. General Principles..................................................................................................................... 5 V.

The Burden of Proof.................................................................................................................. 6 VI.

The Criteria for Granting a Conditional Stay of Proceedings.................................................. 8 The seriousness of the offence.................................................................................................... 8 The complexity of the charges..................................................................................................... 8 Complexity and volume of the evidence..................................................................................... 9 Applicable procedural, evidentiary and substantive law, number of accused and number of counts, whether conspiracy charged.................................................................................................................... 10 Likelihood of especially complex procedures such as voir dires............................................... 13 Seriousness of the charges, likelihood of imprisonment, and length of the trial....................... 13 Personal abilities of the Applicant to conduct his own defence, including education, employment and background, ability to read and communicate............................................................................................... 13 Ability of the Applicant to fund the services of counsel.......................................................... 14 VII.

The AG’s Application to Present New Evidence.................................................................. 21 VIII. Conclusions on the Rowbotham Application....................................................................... 24 IX. Appointment of an Amicus Curiae ......................................................................................... 26 I. Introduction [ 1 ] The Applicant, Vimal Iyer, applied for a stay of proceedings unless the Attorney General of Alberta (“AG”) provides funds for a lawyer to represent him at his criminal judge and jury trial.

The trial has already commenced and the learned trial judge has made some evidentiary rulings. However, the jury has not yet been empanelled. [ 2 ] I heard this application as the case management justice appointed under s 551.3 of the Criminal Code to protect the Applicant’s right to silence and right to a fair trial. Given that the Court is required to consider the financial resources of the Applicant, the Crown prosecutors assigned to the criminal trial are not participating in this application and have undertaken not to seek access to the Applicant’s evidence or my reasons.

Counsel from the Civil Division of Alberta Justice represents the AG. [ 3 ] I have concluded that the criminal proceeding is sufficiently complex, considered in the context of the Applicant’s skills, ability to understand the issues, and ability to defend himself, that he requires the assistance of counsel. However, the Applicant has not established that he lacks the means to hire counsel, having regard to available equity in his home and the comfortable lifestyle he has maintained since his arrest. He has not made reasonable efforts to seek less expensive legal assistance within his current means. II.

History of the Criminal Proceeding [ 4 ] In the spring of 2010, the Alberta Securities Commission (“the Commission”) filed a Notice of Hearing in relation to the Applicant, another named individual, and TP Ltd., in which the Applicant was a director. On October 12, 2010, the Commission entered into an Agreement and Undertaking requiring the Applicant and TP Ltd. to pay $150,000 in fines and costs.

The Applicant completed making those payments on November 15, 2010. [ 5 ] The Applicant was arrested on March 17, 2011 on a 40-count Information alleging fraud, deceit, and theft exceeding $5,000 between March 1 st , 2007 and December 31 st , 2009.

The Applicant was granted judicial interim release on March 17, 2011, on the basis of a $50,000 cash deposit, a $75,000 surety without cash deposit, and the surrender of his Fijian passport. [ 6 ] A preliminary inquiry was held over 22 days between March 2, 2012 and April 4, 2012, at which 24 witnesses testified and were cross-examined by the Applicant’s then counsel, Mr. Brian Beresh, QC. The preliminary inquiry was adjourned for continuation for a further 25 days. However, the proceedings in Provincial Court came to an end when the Crown filed a 40-count Direct Indictment against the Applicant on May 10, 2012.

[ 7 ] The assigned trial judge dismissed Mr. Beresh’s application to quash the Direct Indictment in a two-day hearing held in September 2012. The trial judge also dismissed Mr. Beresh’s application to sever Counts 1 and 2 from the Indictment. [ 8 ] The trial commenced on November 18, 2013 without the empanelment of the jury. The trial judge heard, over a period of nine sitting days between November 21, 2013 and April 17, 2014, the Crown’s application to set aside solicitor-client privilege over the files of TP Ltd.’s lawyer. Mr. Beresh represented the Applicant for the first five days of that hearing.

The trial judge granted Mr. Beresh leave to withdraw as the Applicant’s counsel on January 14, 2014. The Applicant represented himself for the last four days of the Crown’s application. [ 9 ] The Crown also applied for a ruling on the admissibility of third party and banking records; that application was heard over two sitting days. Mr.

Beresh represented the Applicant on the first day of the hearing and the Applicant represented himself on the second day. [ 10 ] The Crown also applied for a determination of whether it could introduce into evidence at the criminal trial the Settlement Agreement between the Commission and the Applicant and TP Ltd. That application was heard over a period of four days, with Mr.

Beresh representing the Applicant the first two days. [ 11 ] The Crown has one remaining application scheduled to be heard before the jury is empaneled regarding the admissibility of land titles documents and corporate records. [ 12 ] While the Crown’s most recent estimate of trial time is five months, based on four sitting days per week, the trial judge has reserved 42 weeks for trial because the Applicant is not represented by counsel. The Crown intends to call approximately 80 witnesses.

Having heard applications in relation to admissibility of evidence, the trial judge has no doubt developed some familiarity with the Crown’s case. She has also likely gained some familiarity with the Applicant’s strengths and weaknesses, as he has represented himself for a portion of each of these applications. Her estimate of the trial time required if the Applicant continues to be self-represented should, in my view, be given considerable deference. III.

History of this Application [ 13 ] On May 23, 2014, counsel for the AG gave the Applicant written notice that if he elected to proceed with his application for a conditional stay unless counsel was appointed for him, detailed financial disclosure would be required, the specifics of which were set out in the notice and included income tax returns going back to the year before charges were laid in Canada or any other country, bank records for bank accounts within and outside Canada, including all accounts for which he had signing authority, and his spouse’s and children’s bank accounts; investments of all types; real property in his or a family member’s name or held in trust for him, vehicles, income, his and his spouse’s income information, a list of all personal property owned by him or his spouse whose value exceeds $5,000; and his monthly expenses. [ 14 ] The Applicant’s written materials consisted only of the Notice of Application filed on June 20, 2014 and a very brief Affidavit in support, which provided the following information: ... 3.

That my financial circumstances are: (

a) My income is: $5000.00 (

b) My expenses are: $5000 (

c) My debts total: $410,000.00 (

d) All the things that I own have a value of: $360,000.00 4. That I have been refused legal aid. 5. That I have not been able to hire a lawyer because I cannot afford one. 6. That I believe my case is serious because I believe I may go to jail if Convicted. My case is also serious because, I have been charged with fourty [sic] counts of fraud and theft. 7. That I do not know how to represent myself in a criminal trial. My Education level is university diploma. 8. That I believe my case is complex.

My case is complex because it involves more than hundred thousand pages of disclosure, and a scheduled trial time of 20 weeks minimum. [ 15 ] Counsel for the AG submitted an extensive Book of Authorities in July 2014, a detailed memorandum along with further authorities in August 2014, and provided copies of these materials to the Applicant before the hearing. The Applicant submitted some financial documents on the second day of the hearing. Counsel for the AG conducted an extensive cross-examination of the Applicant on his Affidavit. IV. General Principles

[16] An accused person does not have an unqualified right to counsel at trial.

If an accused person satisfies the court that he or shelacks the means to hire counsel and the case is sufficiently complex in the context of that person’s skills, ability or capacity tocomprehend the issues and defend him or herself, the court will assess whether representation by legal counsel is essential to a fair trial.The Court may then grant a s 24(1) Charter remedy staying proceedings until funding for that purpose is provided: R v Rowbotham(1988), (ON CA), 25 OAC 321, 41 CCC (3d) 1, at p 39 (Ont CA) [17] Our Court of Appeal noted, in R v Rain (1998), 1998 ABCA 315 , 223 AR 359, 130 CCC (3d) 167 (ABCA) at para51 [leave denied, [1998] SCCA No 609] that the test which has evolved from the Rowbotham decision has two aspects.

One aspectconcerns the circumstances of the accused and whether he or she can afford to retain counsel and has the education, experience and otherabilities to conduct his or her own defence. The other aspect concerns the nature of the charges, their seriousness, the complexity of thecase, and the length of the trial. The central concern in relation to both aspects of the test is the fairness of the trial. [18] R v Baksh, 2013 ONCJ 57, 286 CRR (2d) 171 (Ont Ct

J) the Court, at para 4, noted that the Applicant has the onus toestablish three things in this type of application: 1. he or she is ineligible for, or has been refused, Legal Aid and has exhausted all available appeals; 2. he or she is indigent and has no other means to retain counsel; and 3. counsel is essential to the applicant’s right to a fair trial. [19] Our Court of Appeal stated in R v Cai, 2002 ABCA 299, at para 10, that the application for funding should be stayed until theapplicant has exhausted all possible avenues for government-funded assistance, citing New Brunswick (Minister of Health andCommunity Services) v G(J), (SCC), [1999] 3 SCR 46, at para 103. [20] Before filing his Rowbotham application, the Applicant’s application for Legal Aid was denied.

He filed an appeal from thatdecision. Legal Aid required additional financial information to complete his appeal, including tax returns, which, according to theApplicant, his accountant is still in the process of preparing. His tax returns still have not been filed. His Legal Aid appeal is, therefore,not completed.

I find that this is not an obstacle to the hearing of the application in this particular case. [21] As the Ontario Court of Appeal noted in R v Peterman, (ON CA), 70 OR (3d) 481, 186 OAC 83 (OntCA), at para 22, the Court’s function in a Rowbotham application is not to conduct a judicial review of Legal Aid’s decision to refusecoverage: Where the accused seeks a Rowbotham order, the court, while giving appropriate deference to the decision of Legal Aid, must reach itsown decision about whether the accused can afford counsel.

As was said in Rowbotham at p. 69, "there may be rare circumstances inwhich legal aid is denied but the trial judge, after an examination of the means of the accused, is satisfied that the accused, because ofthe length and complexity of the proceedings or for other reasons, cannot afford to retain counsel to the extent necessary to ensure a fairtrial". However, when a court makes a Rowbotham order, it is not conducting some kind of judicial review of decisions made by legalaid authorities.

Rather, it is fulfilling its independent obligation to ensure that the accused receives a fair trial. [22] I note that Anderson, ACJPC recently heard evidence as to the current financial guidelines of the Legal Aid Society in R vSmart., 2014 ABPC 175, a decision rendered on August 14, 2014. Having heard the testimony of Ms.

Suzanne Polkosnik, Q.C., thecurrent CEO of Legal Aid, he noted, at para 31, that under the Rules of Legal Aid: … the CEO has an overriding discretion and it was implied in cross-examination that the appeal process would not be complete until adenial of coverage was taken to the CEO and rejected. Ms. Polkosnik advised that her discretion would be exercised by applying thesame rules as the front line officers.. [Emphasis added] [23] Anderson ACJPC’s reasons reproduced Legal Aid’s eligibility guideline grid.

He observed, at paras 31- 33, that in order foran individual to qualify for full legal representation, he or she must meet both monthly and annual income criteria (going one year back)which, for a family of four (the Applicant having a spouse and two children residing with him), is a maximum of $2,567 net per monthand a maximum of $30,800 net per year. Legal Aid officers have discretion to exceed this guideline by up to 15%.

Even if theApplicant’s adult brother who is part of his household and not currently earning an income is counted as a member of the family, thiswould move the eligibility maximum up an amount less than $200 per month and less than $2,700 annually.

The Applicant testified thathis only current revenue consists of $5,000 per month, representing a pay-out on a sale of restaurant business. [24] Based on the Applicant’s monthly revenue alone, without considering his assets and income for the past year, and given thecurrent Legal Aid appeal structure in which discretion is exercised by applying the same rules as in the initial application, I find there isno useful purpose served in adjourning the Applicant’s Rowbotham application pending the determination of his Legal Aid appeal.

Ascounsel for the AG conceded, given the Applicant’s current revenue, his appeal of Legal Aid’s refusal to grant him coverage is bound tofail. V. The Burden of Proof [25] Counsel for the AG submitted that the Applicant bears a very heavy burden to establish that without legal representation, hisCharter right to a fair trial will be prejudiced. A “rare and exceptional case” is required: R v Crossman (1998), 40 WCB (2d) 147(BCSC), at para 10; see also Cai, at para 6: “high degree of probability”; a “very real likelihood that Charter right will be prejudiced”.

InCai, the Court justified the heavy burden on the basis that the Court is considering a prospective Charter breach, relying on Phillips vNS (Commission of Inquiry into the Westray Mine Tragedy), (SCC), [1995] 2 SCR 97, at para 108, (citing Operation

Dismantle Inc. v R., (SCC), [1985] 1 SCR 441, at p 458) and Canadian Broadcasting Corp v Keegstra (1986), 1986 ABCA 205 , 77 AR 249, 35 DLR (4th) 76, at 78 (C.A.). An applicant’s financial circumstances must be “extraordinary”.Difficult financial circumstances are not sufficient: R v Malik, 2003 BCSC 1439, at paras 22-23. [26] Courts across Canada have similarly characterized the Applicant’s burden.

In R v Bacon, 2011 BCSC 135, Stromberg-SteinJ. noted, at para 20, that a “high degree of probability that a Charter infringement will occur” is appropriate, given the remedy beingsought is to prevent an anticipated breach. In R v Everitt, 2008 YKSC 86, Gower J. described, at para 12, the circumstances in which thes. 24(1) Charter remedy can be granted as “rare”; see also A.G.

Québec v Verret et al. (2003), (QC CA), 13 CR(6th) 1 (Que C.A.), at para 157: “strong or high degree of probability”; R v Grant, 2010 MBQB 258, at para 50: “high degree ofprobability”; and R v Clarke, 2013 NSSC 177, 292 CRR (2d) 166, at para 18: “bluntest remedy and to be used only rarely”. [27] In R v Rushlow, 2009 ONCA 461, 245 CCC (3d) 505 the Crown had called 30 witnesses at trial, including three expertwitnesses, had sought the admission of several statements of the accused to persons in authority, and admission of similar fact evidence.The Appellant had no legal training.

It was unclear whether he had any prior experience with the justice system. In refusing theapplication for state funding, the trial judge characterized the threshold for appointing counsel as “very high”.

On appeal, RosenbergJ.A., for the Court, concluded that Rowbotham had not set down a principle that the case had to be exceptional for the Court to appointcounsel, referring first, at para 17, to the frequently-quoted passage in Rowbotham, at p 69 (CCC): [A] trial judge confronted with an exceptional case where legal aid has been refused, and who is of the opinion that representation of theaccused by counsel is essential to a fair trial, may, upon being satisfied that the accused lacks the means to employ counsel, stay theproceedings against the accused until the necessary funding of counsel is provided. [Emphasis added] [28] Rosenberg J.A. noted, at para 19: Because of the pervasiveness of legal aid, it will be the rare and exceptional case that the court will find it necessary to appoint counsel.This does not mean that counsel is only required in exceptional cases.

Rather, it is the fact that legal aid is available for accused whocannot afford a lawyer that Rowbotham orders are exceptional. [Emphasis added] [29] Rosenberg J.A. concluded, at paras 24-25, that the trial judge had applied too stringent a test and that the burden on theapplicant seeking an order for state-appointed counsel should be based on simple probabilities.

He added that how the decision toappoint counsel would impact on the operations of Ontario’s Legal Aid program was not the trial judge’s concern. [30] The conclusion in Rushlow that the burden of proof for Rowbotham applications is that of simple probabilities was followedin Baksh. In that case, McArthur J. referred, at para 11, to F.H. v McDougall, [2008] 3 SCR 4, where Rothstein J., for a unanimousCourt, held, at paras 40-49, that there is only one civil standard of proof in Canada, that of balance of probabilities, given the inherentdifficulties with applying higher degree of probability standards.

McArthur J. concluded that the approach in McDougall applied to theRowbotham context. [31] Rosenberg J.A.’s characterization of the burden of proof was also cited in R v Williams, Kivi and McKay, 2010 BCPC 16, atparas 176-179. Brecknell PCJ observed that there was a time when funding for legal aid was more widely available such that practicallyeveryone facing criminal charges in which a jail sentence was a possibility could obtain counsel. As such it was an “exceptional case”when funding was not provided. Brecknell PCJ commented that, regrettably, this situation no longer applied in B.C.

However, he wasbound to follow the line of B.C. authority that established the burden on Rowbotham applications to be a heavy one. [32] In Smart, Anderson ACJPC noted, at para 23, that the Alberta Law Foundation derives variable interest revenues fromlawyers’ trust accounts and, by agreement, commits 25% of its revenues to Legal Aid. However, its current commitment of $6 million isgreater than 25% of its projected revenues for both 2014 and 2015.

A contingency fund of $2.5 million is expected to be depleted shortly.The observation in Williams that it is no longer an “exceptional case” when legal aid funding cannot be provided appears also to be thecase in Alberta on the evidence before Anderson ACJPC in Smart.

While it may no longer be in rare and exceptional situations thatRowbotham applications come before the Court, the fact that these are situations of an anticipated breach of the Charter right to a fairtrial will nonetheless require that the Court be satisfied on cogent evidence of the need for a judicial stay, an exceptional remedy as it hasthe effect of bring the prosecution of criminal charges to a halt.

Despite the view of the Applicant’s burden expressed in Rushlow, I ambound by the pronouncements of our Court of Appeal in Cai and Rain and conclude that the burden on the Applicant to establish thecriteria for granting the relief he seeks is a heavy one. [33] The Court must approach each case individually to assess whether, in the particular factual circumstances, that heavy burdenhas been discharged.

I respectfully disagree with Anderson ACJPC’s comments in Smart, at paras 103-104, that the difference in burdenbetween simple probabilities and a heavy burden to be exercised in rare and exceptional circumstances is more of a theoretical than realissue. “Rare and exceptional circumstances” in my view are considerably more constraining than situations evaluated on the basis ofsimple probabilities. This is particularly so when the Court is required to consider the accused’s circumstances, especially his or herefforts to marshal financial resources to fund counsel. VI.

The Criteria for Granting a Conditional Stay of Proceedings The seriousness of the offence [34] Counsel for the AG advised that, depending on the number of counts that result in conviction, the Crown is seeking a periodof incarceration of up to 10 years. The Applicant has no criminal record. The AG concedes that the charges and possible sentence meetthe requirements for “seriousness” set out in Rowbotham and Rain to a high level of probability. The complexity of the charges

[ 35 ] It was noted in Williams , at paras 214-215 , that complexity in the Rowbotham context has two aspects, referring firstly, to what the Crown will be required to prove and those procedures which will be used to demonstrate that proof, and secondly, to the circumstances and capacities of the individual applicant. [ 36 ] In Rushlow , Rosenberg J.A. developed, at para 20, a useful list of factors to consider in evaluating the seriousness and complexity of the case: 1. the complexity and the volume of the evidence; 2. the procedural, evidentiary and substantive law which applies, as well as the number of accused and number of counts, especially if conspiracy is charged; 3. the likelihood of especially complex procedures such as voir dires ; 4. the seriousness of the charges; 5. the likelihood of imprisonment; 6. the length of the trial; 7. the personal abilities of the accused to conduct his or her own defence, including education, employment and background, and ability to read and communicate.

Complexity and volume of the evidence [ 37 ] In R v Bailey et al , 2012 ABPC 227 , Fradsham PCJ was satisfied that the trial would be very complex based on the amount of disclosure that required a sophisticated organizational and retrieval system, an understanding of forensic accounting evidence to cross- examine effectively, and an understanding of what evidence may or may not be admissible. While a trial judge could assist the applicant, there were tactical decisions involved that might frequently arise given the volume of evidence.

The applicant would need to know what expert to call, how to lead opinion evidence and in what areas. [ 38 ] In this case, Crown disclosure, comprising about 6,140 documents consisting of about 39,500 pages, has been provided to the Applicant in a combination of electronic and hardcopy formats. As earlier noted, the Crown plans to call 80 witnesses.

As the Crown proceeded by Direct Indictment, the election as to mode of trial is judge and jury, the Applicant not having waived his right to a jury trial. [ 39 ] Counsel for the AG noted that the preliminary inquiry was lengthy and, although interrupted by the filing of the Direct Indictment, the Applicant was represented at the time by very experienced counsel, was present throughout those proceedings and has a transcript of the preliminary inquiry to assist him at trial.

I note, however, that only 24 of the 80 witnesses scheduled to testify at trial were made available for cross-examination before the Crown decided to proceed by Direct Indictment. In particular, the trial judge commented, at para 3 of her January 4, 2013 Reasons in relation to the application to quash the Direct Indictment ( 2013 ABQB 6 ) that when the preliminary inquiry was adjourned, a key Crown witness, PR, the former sales manager and vice-president of TP Ltd., had been examined in chief. Defence counsel was granted permission to cross-examine her after all other Crown witnesses had testified.

The filing of the Direct Indictment prevented this from occurring. [ 40 ] The Crown’s argument as to the Applicant’s ability to prepare for trial would have been considerably stronger had the preliminary inquiry been completed.

Moreover, in relation to the witnesses who have already testified, effective trial advocacy does not involve simply repeating the questions posed at the preliminary inquiry, but culling from it effective lines of questioning, which involves the development of questioning strategies and a strong appreciation of the case to be met. [ 41 ] Organizing the disclosure into a useful and accessible format in relation to 40 separate counts and preparing for cross- examination in relation to each count is a very substantial burden on a lawyer, let alone an individual without legal training.

Two Crown counsel have appeared on all voir dires conducted to date. While I appreciate, as counsel for the AG noted, that the Crown has a very heavy burden to discharge at trial, the involvement of two Crown prosecutors suggests some complexity. The number of witnesses and documents in this case, together with the fact that the preliminary inquiry was not completed, are strong indicia of complexity.

Applicable procedural, evidentiary and substantive law, number of accused and number of counts, whether conspiracy charged [ 42 ] Counsel for the AG noted that the trial judge’s previous rulings (for example, her ruling regarding third party records ( 2014 ABQB 304 ) outlined, at paras 23-24, the Crown’s theory of the case and provided a detailed

summary of parts of the Crown’s case and the proposed evidence of key witnesses. The trial judge has also briefed the Applicant on what the Crown will be required to prove and the law relating to the charges. When represented by experienced counsel at the severance motion, the Applicant set out his intended defence to the charges. [ 43 ] The trial judge also reviewed at length in her reasons on the voir dire relating to solicitor-client privilege, the evidence from ITO affidavits and from seven witnesses at the Securities Commission proceeding involving PR, along with the preliminary inquiry evidence.

The trial judge also provided an explanation to the Applicant of the elements of fraud. [ 44 ] Crown counsel also provided a very detailed Pre-trial Conference Form CC7 outlining its case to the Applicant, in addition to notes and transcripts of witnesses’ statements to police and documents to be tendered in connection with their testimony, and summaries

and detailed analyses of banking transactions relevant to the charges. [45] In ruling on the Applicant’s quashing motion, the trial judge noted, at para 52, that during the preliminary inquiry, theApplicant complained about the prolonged proceeding and costs associated with it. She pointed out that by preferring the DirectIndictment, the Crown saved the Applicant the expense of an extended preliminary inquiry.

It is also noted that no application was madeby, or on behalf of, the Applicant to quash the indictment on the basis of sufficiency of evidence to test his assertion that there was arealistic prospect that his legal fees would have been contained to the preliminary inquiry stage. [46] While the trial judge commented on the complexity of the trial in her ruling on the severance motion (2013 ABQB 725), atpara 57, counsel for the AG submitted that her comments were made with reference to the applications she was called upon to decide andnot in the context of a funding application.

However, I note the trial judge’s comment, at para 48, that there will be a significant numberof paper and electronic documents and that the evidence will involve the analysis of land titles, cash flow, representations found inPower Point presentations, brochures and websites at various points in time, receipts and emails. [47] Counsel for the AG pointed out that the Applicant has already outlined the nature of his defence in the context of theseverance motion, indicating why he intended to testify in relation to Counts 1 and 2 and not in relation to the remaining 38 counts.However, as the learned trial judge noted at para 104: “... he remains free to control his defence, as the case unfolds, in a manner hedeems appropriate”, citing R v Last, 2009 SCC 45 , [2009] 3 SCR 146, at para 26. [48] While trial judge has provided explanations of the proceedings to the Applicant, he will still be required to apply thesubstantive law to the evidence and determine what evidence may be relevant to particular elements of fraud and other charges.

As HoodJ. observed in Clarke, at para 65, the law with respect to fraud is not simple. [49] Counsel for the AG further pointed out that a Commission investigation arising out of the same circumstances preceded thecriminal charges, providing the Applicant with a greater familiarity with the documents and evidence than would be the case in othercriminal trials. However, the Applicant elected to short-circuit that proceeding before any evidence was heard by signing a SettlementAgreement.

He did, however, confirm to me that he has read the Securities Commission’s 18-page reasons issued in relation to breachesby PR of the Securities Act, which summarized the evidence of PR, of eight investors, along with marketing materials. [50] Counsel for the AG further submits that given the trial commenced some three years after charges were laid, the Applicanthas had ample time to familiarize himself with the Crown disclosure. However, the Applicant pointed out, and I accept, that disclosurehas been ongoing (and was the subject of complaint by Mr.

Beresh in context of the quashing motion), there have been a number of pre-trial applications both before and after the start of trial requiring preparation, along with several case management meetings to preparefor this application and to address the terms of his judicial interim release, leaving the Applicant with more limited opportunities toprepare for the trial. [51] Finally, the prosecution involves one accused, 40 counts, and no allegations of conspiracy. [52] Counsel for the AG pointed out that the trial judge’s role is to ensure that the Applicant has a fair trial and to provideassistance from time to time throughout the trial in the proper conduct of his defence.

As noted in R v Keating (1997), 1997 NSCA 135, 159 NSR (2d) 357, 35 WCB (2d) 183 (NSCA), citing, at para 21, the comments of Griffiths J.A. in R v McGibbon (1988), (ON CA), 45 CCC (3d) 334 (Ont CA), at p. 347: Consistent with the duty to ensure that the accused has a fair trial, the trial judge is required within reason to provide assistance to theunrepresented accused, to aid him in the proper conduct of his defence, and to guide him throughout the trial in such a way that hisdefence is brought out with full force and effect.

How far the trial judge should go in assisting the accused in such matters as theexamination and cross-examination of witnesses must of necessity be a matter of discretion. [53] Our Court of Appeal adopted these comments in Rain, at paras 38-39, recognizing, however, that the duty of a trial judge topreserve the accused’s right to a fair trial does not go as far as providing the same assistance as would be given by counsel. [54] The burden on the trial judge without the presence of counsel will be particularly taxing in the context of a trial of 40 countsset to proceed before a jury.

The trial judge will be required to anticipate the Applicant asking a question or presenting a document that ispotentially inadmissible and/or damaging to his defence, all the while respecting his right not to disclose his defence.

While theseverance motion may have clarified some aspects of the Applicant’s defence, as noted in Last, he is not limited in any way by theposition then taken. [55] Counsel for the AG pointed out that there have been Rowbotham applications involving large-scale fraud schemes conductedby relatively sophisticated business persons where the Court has not found the matter to be so complex as to require that the accused berepresented by counsel in order to have a fair trial.

For example, in R v James (1990), (AB KB), 74 Alta LR (2d) 245,107 AR 241 (QB) the two co-accused businessmen, “with substantial experience”, were charged in a $20 million insurance fraud. Theyhad been represented by counsel during a 32-day preliminary inquiry and were facing a jury trial without counsel. While accepting thatboth accused were indigent, Cavanagh J. remarked that they had become so by transferring assets to their spouses and that the case wasnot particularly complex.

Both co-accused appealed, and the Court of Appeal dismissed James’ argument that the trial was unfairbecause he was not represented by counsel (R v Svidal (appeal by Svidal and James) (1991), 1991 ABCA 312 , 120 AR 333, 8WAC 333 (CA) at para 7). I note that the trial in Svidal lasted 2 ½ months, a considerably shorter period than the scheduled trial time inthis case. Also, both accused had the benefit of a completed preliminary inquiry. [56] Counsel for the AG referred to other examples of courts dismissing applications for the appointment of counsel in the contextof fraud charges.

In R v Schiel, 2004 BCPC 436 in the context of a $2 million dollar fraud allegation, the accused had business acumenand experience as land developers and the charges involved straightforward accounting documents understandable to them. The accusedin that case were also found not to have been forthright about their financial circumstances. In R v Branch, 2012 NBQB 175, charges ofextortion and fraud had proceeded to a three-week preliminary inquiry in which the accused MLA was represented by counsel. Hesubsequently claimed to have exhausted his funds on his legal representation.

It was anticipated that the six-week trial would involve 75

witnesses and extensive documents.

The trial judge determined that the nature of the schemes alleged were far from sophisticated, the documentary evidence did not encompass difficult subject matter, and the legal elements were not convoluted such that a person of the accused’s capabilities, assisted by the trial judge, would be able to receive a fair trial. [ 57 ] I note that in R v Clarke , 2013 NSSC 177 , the trial judge determined that a four-to-six-month fraud and conspiracy trial involving three co-accused and over 100,000 pages of disclosure, in circumstances requiring knowledge of securities and criminal law and where no preliminary inquiry had been held, was too complex for the applicant without the assistance of counsel.

In Bailey , Fradsham PCJ reached a similar conclusion in relation to an $80-$100 million Ponzi scheme, involving a four-month trial, 115 witnesses and over 30,000 pages of disclosure. [ 58 ] While the trial judge has already ruled on many evidentiary issues, this by no means prevents other issues from emerging as evidence is presented at trial and many witnesses testify for the first time. There is a real risk that lack of knowledge of evidentiary principles may stymie the Applicant’s trial strategy or planned defences.

The trial judge is not in a position to vet these matters without risking the infringement of the Applicant’s right to silence. The Supreme Court of Canada warned in Ontario v. Criminal Lawyers’ Association of Ontario , 2013 SCC 43 , at para 54 : “While trial judges are obligated to assist unrepresented litigants, they are not permitted to give them strategic advice”. [ 59 ] Anderson ACJPC elaborated on this point in Smart , at paras 112-113 : Judges cannot formulate a theory of the defence, determine what witnesses should or should not be called or formulate strategies for cross-examination.

Judges cannot brief witnesses nor tell the accused which documents to bring to court. The judge can try to explain in fifteen minutes the rules of evidence that law students toil over for months and years or give a crash course on trial procedure on the day of trial but to consider these efforts a fair substitute for capable counsel is fanciful. The damage will likely be done before the judge walks into the courtroom. Trials are won and lost in the preparation, not just in the delivery.

The second major limitation on the trial judge's ability to protect against an unfair imbalance in the courtroom is the judge's obligation to remain impartial and to be seen as neutral.

When the judge gets pushed out of that position, the appearance of fairness can take on new shades and even be compounded. [ 60 ] Having regard to the number of counts, the number of witnesses who have not yet testified (five further weeks for the preliminary inquiry having been scheduled before the Direct Indictment was filed), and the complex nature of the allegations as described in the trial judges evidentiary rulings, I conclude that these factors weigh strongly in favour of a finding of complexity.

Likelihood of especially complex procedures such as voir dires [ 61 ] Counsel for the AG pointed out that the trial judge decided many of the legal issues at a time when the Applicant was without counsel. There is nothing in the trial judge’s written decisions that speaks to any unfairness of the trial process to date. The remaining pre-jury empanelment application relates to the admissibility of land titles documents and corporate records which resemble an application already decided relating to the admissibility of third party banking and corporate records.

As I noted, however, the fact that counsel assisted the Applicant with some pre-trial motions and that he dealt with others without counsel, and that the pre-jury motions are all but completed, does not mean that admissibility issues will not continue to arise during the trial.

Seriousness of the charges, likelihood of imprisonment, and length of the trial [ 62 ] Counsel for the AG conceded that the charges are serious, involving fraud and related allegations in the $6.5 million range, the Crown will be seeking a substantial term of imprisonment in the event of conviction, and 42 weeks have been reserved for trial. All of these factors weigh in favour of the need for counsel assistance. Personal abilities of the Applicant to conduct his own defence, including education, employment and background, ability to read and communicate [ 63 ] The Applicant is 39 years of age.

He spent the first 22 years of his life in Fiji. He completed high school and took one accounting course in “Form Four,” the equivalent of Grade 10. He was a top student in standardized examinations he took in his first year of university. He received a scholarship to attend teachers’ college and, after two years of study, received a teacher’s certificate in 1994 and taught school in Fiji until 1997. He has no further formal education either in Fiji or Canada and has taken no business courses or accounting courses beyond the high school level.

His formal education does not equip him with particular skills to defend the charges, other than the ability to read and communicate in English. His business experience is entirely “on the job”, having first become involved in the buying and selling of land approximately nine years ago. Having observed him through approximately three days of cross- examination, I see no evidence, nor has the Applicant suggested, that he suffers from any physical, intellectual or psychological impairment. [ 64 ] The Applicant’s familiarity with the criminal justice system is limited to these proceedings.

Counsel for the AG noted that the Applicant represented himself in portions of pre-trial motions, filed, then withdrew a challenge for cause motion, filed the Rowbotham application, and filed and conducted a bail review application without counsel. However, I note the Applicant filed only a bare-bones Affidavit, after having been presented with detailed requests for financial disclosure and a book of authorities providing guidance from other cases on the financial disclosure required for this type of application along with my explanations.

He supplied some financial documentation on the morning of the second hearing day. He did not appear to understand that it was his job, not that of counsel for the AG, to produce the information. When told his information was insufficient, he made some efforts to obtain banking and income documentation relating to family members.

[ 65 ] Counsel for the AG argued that the Applicant appears to have some knowledge of land titles procedures and land transactions. He is educated and intelligent and has shown an ability to arrange his financial affairs with a fair degree of sophistication. [ 66 ] While the Applicant has had some formal post-secondary education, none of it is referable to the issues at trial.

He only had about six years of actual land development experience before the charges arose and his bail conditions in force since March 2011 prevent him from dealing with land. [ 67 ] The amount of time set for trial and the fact that it is before a jury, the fraud charges are numerous and complex, the evidence of 2/3 of the Crown witnesses scheduled to be heard at trial has not yet been tested by cross-examination, and the number of witnesses expected to testify at trial, all favour the granting of a conditional stay.

The fact that many legal issues have been cleared away by rulings and that part of the trial judge’s role is to offer assistance to the accused without counsel is not a sufficient response. The trial time reserved is an indication of the trial judge having assessed both the complexity and expected length of the evidence and the capacity of this self-represented individual to defend himself against the charges. The case is sufficiently serious and complex, in the context of the Applicant’s capacity to comprehend the issues and defend himself, that he requires the assistance of counsel for the trial.

Ability of the Applicant to fund the services of counsel [ 68 ] Turning next to whether the Applicant has established that he lacks the means to retain counsel for the trial, counsel for the AG submits that the Applicant’s Affidavit, lacking at the time of filing any corroborating documentation, does not meet the disclosure requirements that apply to this type of application. Counsel for the AG pointed out that he provided to the Applicant well in advance of the application a detailed list of the financial materials he believed are required to complete the Applicant’s application.

However, during the course of the hearing that extended over several days, the Applicant submitted some financial documentation, but no tax returns independently verifying his income as he has not filed returns since 2008. [ 69 ] Malik contains, at para 22 , a useful description of the efforts expected of a Rowbotham applicant, going back to the time charges were laid or to the time of arrest, to fund counsel on his or her own and through family resources before seeking the state’s financial assistance.

These efforts include: saving money, borrowing money, obtaining employment or additional employment, looking for counsel willing to work at legal aid rates, exhausting all efforts to use assets to raise funds, being prudent with expenses, and showing foresight and planning of one’s affairs to enable financing of counsel. An applicant should pay some of the costs of retaining counsel if able to do so and may be obliged to repay all or some of the cost of state-funded counsel. Applicants are not entitled to state-sponsored funding if they have made themselves indigent.

A spouse’s financial circumstances are relevant considerations along with whether other family members might be able to provide financial assistance. [ 70 ] In Bailey , the applicants were willing to mortgage the equity in their home to Legal Aid. The male applicant’s appeal of a $408,000 income tax reassessment was outstanding along with civil suits. He was earning $30,000 per year as a photographer and the female applicant was a travel agent with an income tax liability of over $1.2 million.

The applicants had continued to fund their son’s private schooling at $17,000 per year, had taken the family to France, assisted with some funds from the male applicant’s sister. They owned three free-and-clear vehicles. [ 71 ] Fradsham PCJ noted, at para 76, that with the benefit of hindsight, past financial decisions made by an applicant will seldom be of more than minimal assistance. The reasonableness of financial decisions must be determined on the basis of facts understood at the time the decisions were made. Knowledge of an ongoing investigation does not equate to knowledge that charges would be laid.

The parties kept their son in the private school he was familiar with. The financial situations of both accused did not enable them to retain counsel. Fradsham PCJ concluded that there was a “high degree of probability” that neither of the applicants could have a fair trial without state-funded counsel. [ 72 ] In Schiel , a case involving a $2 million GST fraud, the trial was set for 10 to 12 days with 45 witnesses.

The applicants had already spent a considerable sum in legal fees in relation to civil proceedings and there was no evidence of financial planning in the two years the applicants was aware that criminal charges were imminent. Finally, disclosure of family income and resources was insufficient and unsatisfactory. The case was described as straightforward and the applicants were well-experienced in financial matters. Conviction might not result in incarceration.

The trial judge concluded that the applicants had not established the criteria for the appointment of state-funded counsel. [ 73 ] In R v Whaling , 2010 BCSC 41 , counsel withdrew during a trial of firearms offences. The accused made a Rowbotham application but did not submit detailed corroborative evidence to buttress his assertion that he was unable to fund counsel, nor evidence of his attempts to secure funds or otherwise arrange his affairs in a prudent and responsible manner. He submitted very

summary evidence of his financial circumstances and had not demonstrated that there was any extraordinary complexity in the case. The Crown’s case was virtually complete and no particularly complex elements remained to be determined at trial. His application was dismissed. [ 74 ] Turning to the Applicant’s circumstances, he arrived in Edmonton from Fiji in 1997 and started work as a labourer in a mattress factory. His earnings increased from a basic wage to over $30 per hour, however, he was obliged to take an extended period off work in 2005 due to recurring pancreatitis.

He started a part-time home renovation business while continuing to work in the mattress factory. His role in the business was to obtain contracts and to deal with sub-trades. He ended his involvement in that business in 2003 and received no cash or assets from it. [ 75 ] The Applicant became involved in a business to buy and sell land around the end of 2005. He purchased some bare subdivided land and resold it shortly afterward, making a profit of about $110,000, some of which he spent and some of which went back into the business.

The sale of another lot earned him a profit of $120,000 to $150,000, which he invested in a corporation in which his wife had shareholdings. These funds were ultimately transferred to TP Ltd. Neither of these transactions appears to have involved complex financing arrangements. [ 76 ] In late 2009, the Applicant acquired a pizza and steak house, but as it had no liquor license, he returned the business to the seller. As the seller owed him funds from the return of the business, the Applicant purchased another restaurant from him in 2012 for a

reduced price of $80,000 through a solely-owned numbered company. He withdrew between $5,000 and $10,000 per month from this business for over 14 months, then sold the restaurant in 2013 for $140,000. He received $20,000 cash, which he placed into a bank account in his 16-year-old son’s name, motivated at least in part, he acknowledged, by the Canada Revenue Agency garnishee on his own bank account. These funds were depleted to service the mortgage on the home in which he and his family reside. The bank closed his son’s account a couple of months ago. There were no funds in the account at that time.

Starting in January 2014, he has been receiving $5,000 per month on the $120,000 balance owed to him from the sale of the restaurant, with the final payment expected in December 2015. The numbered company is not currently operating any businesses. [ 77 ] The Applicant testified that the 24-month pay-out of $5,000 is his sole source of revenue. Other than his brief involvement in the restaurant business, the Applicant has not been employed since late 2010.

He stated that attempting to prepare for and attending voir dires, case management meetings and the criminal trial have left him with no opportunity to seek regular employment. He added that even with income of up to the $80,000 per year he could expect to earn if he were to return to the mattress factory would not give him the means to retain counsel for the lengthy trial. His bail conditions prevent him conducting any business involving land.

When asked if he would be willing to enter into a payment arrangement with Legal Aid if counsel is appointed, he stated that he might be able to do so depending on the outcome of the trial, but that the pay-out on the sale of the restaurant will only be available to fund his family expenses for another 14 months. [ 78 ] The ownership history of the Applicant’s home is very convoluted. He and his family moved into the newly-constructed 3,600 square foot, five-bedroom home in the Riverbend area of Edmonton in early January 2007 and started paying the existing mortgage of $373,000.

The Applicant completed the purchase of the home in September 2008 for $980,000 and arranged for title to be placed in his wife’s name. The purchase terms included a mortgage of $300,000 to the seller (which replaced the mortgage previously on title), with the balance paid in cash.

The Applicant testified that in this and all other financial dealings, whether personal or business, he considered all assets, whether in his or his wife’s name, as their common property. [ 79 ] After purchasing the home, the Applicant invested approximately $200,000 more into finishing the home’s driveway, exterior, deck, backyard and basement. The purchase of the home and the renovations were completed before any criminal charges were laid. [ 80 ] In February, 2009, the Applicant arranged for title to the home to be transferred from his wife to a friend and business associate, RN, for $1.4 million.

The Applicant testified that this title transfer was provided as security for funds he owed to his business associate on TP Ltd.’s purchase of lands in Redwater. The Applicant testified that he received no cash in exchange for the transfer of title to RN, and continued to reside in the home with his family. He testified that the $1.4 million sale price was only “on paper” as it reflected the amount he owed to RN and not the value of the home.

However, he conceded that the home could have been worth up to $1.2 to $1.4 million at the time. [ 81 ] In 2009, the Applicant became aware of the Commission investigation into his business activities. He required funds to retain counsel. On March 17, 2010, he arranged for the home (still standing in the name of RN) to be sold to KM, a friend also originally from Fiji, for $980,000. By that time, he had paid back close to $800,000 on his debt to RN. RN collected the deposit funds of $200,000 from the sale to KM, who funded the balance of the purchase price by way of a new mortgage.

From the sale proceeds, the Applicant paid off the existing mortgage of $300,000. [ 82 ] The Applicant then entered into a lease agreement with KM. The lease provided for a security deposit of $40,000. The Applicant stated that he was unable to locate an originally-signed copy of the lease. He stated he made the payments on KM’s new mortgage as a form of rent-to-own arrangement.

Within the following year, he took steps to purchase back the home for $980,000 (the same price KM originally paid for the home), paying KM $343,000, being the difference between the $980,000 purchase price and the mortgage on title, by way of a transfer of a $100,000 parcel of land owned by TP Ltd. and cash from his wife’s numbered company. He testified that he was not aware at the time that he was under investigation by the RCMP.

He was arrested on the criminal charges on March 17, 2011, approximately two months after having completed the repurchase of the home from KM. [ 83 ] On repurchasing the home from KM, the Applicant arranged for title to be placed in the name of his brother, a foreign worker in his late thirties who became a student when his work visa expired and who lives with the Applicant’s family. The Applicant explained that he did so as his brother had “better credit”.

I do not accept his testimony in this regard, his brother being a foreign worker at the time and, according to the Applicant, unable to qualify for a new mortgage. The Applicant acknowledged under cross-examination that at the time of this repurchase he had an equitable interest in the home of $343,000. He stated that he was “possibly” also concerned that his creditors would have access to the home if title was placed in his name. I find this to be the true reason for the title being placed in his brother’s name. The mortgage, however, remained in KM’s name as mortgagor.

When the financial institution that held the mortgage discovered that the title-holder and mortgagor were two different persons, it threatened foreclosure proceedings. [ 84 ] As a result, the Applicant took steps to transfer title to the home to KM for the price of $800,000 in June 2014. He acknowledged under cross examination that instead of doing so, he could have sold the home on the open market. The Applicant testified that based on KM’s recent purchase of the home for $800,000 and the mortgage balance standing at approximately $563,000, KM owes him approximately $337,000.

The Applicant stated that KM does not currently have the funds to pay him and will pay him “in the future” or will give him credit for the outstanding purchase balance against rental payments accruing to KM from the Applicant. [ 85 ] The Applicant continues to reside in the home with his wife, two sons and his brother, and pays rent to KM of $3,000 per month. He also pays the municipal realty taxes and utilities.

There are buy-out provisions in the current lease. [ 86 ] Under cross-examination, the Applicant acknowledged that the home may have been undervalued at $800,000 on its most recent sale in 2014, given he arranged for its sale to KM in 2010 for $980,000, that he added $200,000 in improvements to the home, and that the Edmonton real estate market is currently buoyant. He testified that the home was appraised at $1.2 million in 2010, however, he challenged the suggestion that it is currently worth in excess of one million dollars having regard to its location in an older neighbourhood and its somewhat dated décor.

[ 87 ] The Applicant testified that he has already expended close to a million dollars in family assets on the Commission and criminal proceedings and there is nothing but the equity in the home to secure his children’s future. He stated that if he is convicted and imprisoned, his children will be on the street. [ 88 ] I find that the value of the home is at least $1.2 million based on the fact that it is less than 10 years old, it was purchased by the Applicant in 2008 for $950,000, he invested $200,000 in improvements on the home, and it was appraised at $1.2 million in 2010.

As the mortgage currently stands at approximately $563,000, there is available equity in the home in the event of a sale of in excess of $400,000 after paying out the mortgage and any realtors’ fees. [ 89 ] The Applicant testified that civil judgments are registered against him exceeding $600,000 and that there are judgments against his wife exceeding $300,000. Some of these judgments were entered by default and he plans to apply to open them up, however, he currently does not have the financial resources to do so.

He raised concerns that accessing the equity in the home to fund legal fees in light of the civil judgments against him and his wife would raise issues of preference over his judgment creditors. [ 90 ] Counsel for the AG argued that bona fide conveyances made for good consideration to persons not having notice of fraud are not subject to reversal by creditors, citing the Fraudulent Conveyances Statute, 13, Eliz1,

Chapter 5 (UK) (the “ Statute of Elizabeth” ) and the Fraudulent Preferences Act , RSA 2000, c F-24. As Romaine J. noted in Krumm et al. v. McKay et al. , 2003 ABQB 437 , at para 15 , with respect to a transfer for value, a creditor attempting to rely on the Statute of Elizabeth to void the transaction must establish that the transferor had the necessary fraudulent intention and that the transferee was privy to the fraud.

She noted, at para 23, that intent to defraud may be inferred from all of the circumstances surrounding a transaction. [ 91 ] Based on the reasoning in Krumm , it would appear that the Statute of Elizabeth could not be used to defeat a sale of the home to a bona fide purchaser for value. [ 92 ] Addressing next the Fraudulent Preferences Act , s. 3 renders void any conveyance of real or personal property made by a debtor to a creditor and having the effect of giving a preference to that creditor when the debtor is in insolvent circumstances or is unable to pay its debts in full if an action to impeach the transaction is brought within one year of the conveyance.

S.6 provides, however, that: 6 Nothing in sections 1 to 5 applies to ... (

b) a payment of money to a creditor, or a bona fide conveyance, assignment, transfer or delivery over of any goods, securities or property, of any kind as above mentioned, that is made in consideration of a present actual bona fide sale or delivery of goods or other property or of a present actual bona fide payment in money, or by way of a security for a present actual bona fide advance of money... [ 93 ] Counsel for the AG argued that a bona fide payment from the proceeds of sale of the home to criminal counsel should not be defeated by virtue of s. 6(b).

I find that there is a basis for maintaining that delivery of bona fide legal services by criminal counsel contemporaneous with the payment of retainer funds would not be rendered void by the Fraudulent Preferences Act . The Applicant sought no legal opinions on this issue. Given his heavy onus in this application, I conclude that the Applicant has not established that the proceeds of a bona fide sale of the Riverbend home for value would not be available to secure legal services for his criminal trial.

I also find that despite title currently being held by KM, based on the history of transfers of title to the home orchestrated by the Applicant, he has it within his power based on his retention of a sizeable beneficial interest in the home, to arrange for its sale. [ 94 ] The Applicant provided documentary proof of his outstanding CRA debt of $121,188 as of July 26, 2012. He stated that he has been unable to file his outstanding tax returns dating back to 2008 as his bookkeeper took all the records of TP Ltd. on leaving the company that same year.

Through disclosure in the criminal proceeding, he has recently been able to retrieve most of the corporate records. He also paid $5,000 on his accountant’s outstanding account at the beginning of September 2013 so that he can prepare his 2013 personal and corporate tax returns. Despite two adjournments of the hearing of this application since September 1 st , no tax returns have been produced by the Applicant. He has not paid any taxes in at least the last four years.

His wife has not filed tax returns since 2009 or 2010. [ 95 ] The Applicant produced documents establishing that he first provided retainer funds in the amount of $10,000 to Mr. Beresh, his former criminal counsel, in March 2011. He continued to deposit retainer funds with the firm over the next three years. Total fees billed amounted to $559,200, which, together with disbursements and GST, brought total billings to approximately $592,400, with a balance of $150,546 owing as of February 2014 after Mr. Beresh withdrew as his counsel.

This unpaid amount is partially secured by an assignment of the $50,000 cash bail. The Applicant stated that the proceeds of the sale of lands in Redwater were used to fund his counsel and to pay out the vendor take-back mortgage of $300,000 on his original purchase of the home. He also borrowed funds from RN. [ 96 ] The Applicant became a member of a local private golf and sports club around January 2013 at a one-time cost of $22,000, approximately two months prior to the commencement of the preliminary inquiry.

When questioned on what motivated him to do so, he stated that when he initially applied for membership in 2007, he put down a $5,000 deposit. When the waiting list cleared in 2013, he purchased the membership rather than lose his deposit. He stated that he has made inquiries about surrendering his membership and was advised he could only collect $500 to $1,000 in transfer fees. He purchased golf clubs last year for close to $3,000 and has maintained his golf membership at an annual fee of $3,000, along with athletic fees of $90 per month. He golfed three to four times per week during the summer of 2014.

He also belongs to another local golf club, having paid annual membership fees since 2008 of $3,500 per year up to the 2014 season when, according to his testimony, his fees were waived. [ 97 ] The Applicant purchased a “top end” 2008 BMW in 2007, well before the criminal charges arose, for $138,336 which has always been registered to his wife. He stated that he has not attempted to sell the BMW as he owes more on the vehicle than it is worth. RN, who loaned him the bail funds of $50,000 along with the Commission settlement funds and retainer funds for his criminal counsel, has taken the BMW as security.

He also purchased a 2013 Porsche Cayenne sport utility vehicle in 2012 for $105,000 in his wife’s

name, funded from the Redwater sales proceeds. This vehicle is also security for his indebtedness to RN. He sold a Toyota sports utility purchased in 2009 to partially fund his purchase of a 2012 BMW sport utility for $126,000, registered to his wife. However, he sold the BMW for $84,000 to pay the Commission settlement. [ 98 ] The Applicant purchased a 2013 Toyota Tundra pick-up truck in 2012 for $75,000. He stated that the purchase funds were supplied by T., a friend and business associate in Dubai, who uses the vehicle for hunting when he visits Canada.

While the Applicant is its registered owner, the Tundra is also security for his indebtedness to RN. [ 99 ] In early 2013, the Applicant flew to Vancouver to arrange for a visa for his wife and children to travel to India. He paid his wife’s airfare to India and his wife’s sister paid the children’s airfare. He has made some trips to the west coast of Canada since 2012 for family funerals and, in late September 2012, sent his wife to his aunt’s funeral in Australia. He sent one of his sons to Fiji for a vacation in 2012.

He travelled to Kelowna with friends for a golfing holiday in the spring of 2014. [ 100 ] The Applicant currently has one credit card, another having been recently cancelled. There is an outstanding balance of $5,000 on his active card and a credit limit of $15,000. His wife has a credit card with a $4,000 balance owing and a credit limit of $8,000.

His corporate credit cards are no longer active. [ 101 ] Addressing next the Applicant’s business dealings since becoming aware of the criminal charges, almost three years before his arrest, a numbered company incorporated by the Applicant sold a parcel of land in Redwater earning a profit of $1.8 million which was paid, a portion over time, to a corporation owned by the Applicant’s wife. The Applicant stated that larger deposits recorded in his wife’s bank account for the past two years derived for the most part from the sale of the Redwater lands.

He attempted to account for the funds from this $1.8 million sale: over $300,000 was paid to KM to retain the Riverbend home, $300,000 to $400,000 was paid to RN, $100,000 went to the purchase of the Porsche Cayenne, approximately $450,000 was paid to Mr. Beresh, and some of the funds were used to pay the Securities Commission settlement and related legal expenses. The Applicant’s testimony fell short of accounting for all of the Redwater sale proceeds. It is reasonable to assume that lifestyle choices have accounted for some of these proceeds.

Counsel for the AG pointed out, for example, that the Applicant’s wife spent approximately $18,000 while holidaying with their children in India in the spring of 2013 for three weeks, including purchasing a Louis Vuitton product for $1,715. The Applicant’s wife also travelled to Australia and his son to Fiji. Other expenditures, as noted, include an expensive golf club membership and golf equipment purchases. [ 102 ] The Applicant testified that his wife has not been involved in any business transactions to his knowledge since the Redwater sale.

She only recently obtained full-time employment earning $1,532 net biweekly. Her last employment outside the home was in 2007 as a legal assistant. She only occasionally assisted the Applicant with his business. During the time the Applicant owned the second restaurant business in 2012, he paid his wife $5,000 per month on an $80,000 loan arranged with her on the advice of their accountant for the purchase of the first restaurant. [ 103 ] The Applicant was questioned about his business interests in Dubai.

He testified that TP Ltd. had an office in Dubai from which it sold parcels of land in Alberta, and that PR, TP Ltd.’s former manager, opened a bank account in TP Ltd.’s name in Dubai without his knowledge. He stated that PR deposited investors’ cheques into this account and converted the funds, causing losses of upwards of $2 million for which she has failed to account.

He stated that neither his wife, TP Ltd., nor T (his friend and business associate who resides in Dubai) holds funds that could be made available to retain counsel. [ 104 ] The Applicant stated that after the preliminary hearing, he could have raised about $300,000 for legal fees. However, following the filing of the Direct Indictment, a number of applications consumed approximately $30,000 in legal fees. The anticipated trial time increased from nine weeks to twelve weeks with quoted legal fees being estimated at $450,000 to $600,000.

When trial time was later increased to 22 weeks, he could not arrange to fund his former counsel’s quoted retainer of $1 million for the trial (in addition to the legal fees paid to date).

If the Applicant had budgeted for trial costs of $300,000 after the preliminary inquiry and has only spent $30,000 on legal fees in pre-trial motions, it would seem that he should have access to funds to pay less expensive counsel. [ 105 ] Counsel for the AG submitted that since the Applicant’s arrest on the criminal charges in March 2011, he has dealt with his financial affairs in such a way that he should be deemed to have chosen to represent himself.

He has made lifestyle choices reflecting no effort to economize: • He has chosen to purchase expensive vehicles; • He has deliberately manipulated the title to the Riverbend home to make it inaccessible to judgment creditors; • His family has continued to reside in the Riverbend home at a high rental rate that does not include taxes and utilities which he is also required to pay; • He chose to secure an expensive golf club membership and continues to pay annual golf fees and take golfing trips to BC; • His wife and children spent $18,000 on a relatively short trip to India.

His wife also travelled to Australia while his son travelled to Fiji; • He chose not to economize in retaining legal counsel; • Currently, the family’s income amounts to approximately $95,000 per year without him being employed. [ 106 ] Counsel for the AG submits that the Applicant has made lifestyle decisions displaying a sense of entitlement, rather than organizing his financial affairs to cover the reasonable cost of legal representation.

He and his wife have also failed to file income tax returns which would have provided an independent audit of his complex financial dealings in recent years. [ 107 ] The Applicant argued in response that much of the funding of legal counsel and vehicles came from his wife’s corporate interests. Compared to the large sums he has spent on his legal counsel, the amounts he has spent on golf memberships and trips taken by

members of his family are relatively small. He stated that any entitlement he might have to the equity in the home has been exhausted onlegal fees paid to date. He added that his wife would be unlikely to use any equity she may have in the home to continue to fund his legalrepresentation. He stated that any sources of loans have now dried up. VII. The AG’s Application to Present New Evidence [108] Several days after I heard final arguments on the Rowbotham application, counsel for the AG applied to introduce “new”evidence.

Terry Willisko, a financial investigative analyst employed by the RCMP, has been involved in the criminal investigation of theApplicant. He was aware that a boat trailer was registered in the Applicant’s name, as confirmed by a personal property registry searchhe conducted on July 31, 2014. While updating a land titles search on the Applicant’s name on September 15, 2014, he noted that title tothe home had been transferred. He conducted surveillance of the Applicant’s home to determine if he was still residing there.

In thecourse of the surveillance, he noticed a large speed boat parked in the Applicant’s back yard and took photos of it. This was the first timehe became aware of the boat. He pursued inquiries as to the ownership of the boat. [109] Dean Goerzen is the General Manager of Go RV and Marine in Leduc, Alberta. He testified that a used Vector 28 highperformance speed boat, whose wholesale value was about $109,000, was for sale on his lot in the summer of 2013 for $80,000. He soldthe speed boat, motor and trailer to the Applicant in August 2013 for $72,847.

All his dealings were with the Applicant, however, a malehe identified as RN paid for the boat and trailer with a series of credit cards. Subsequent to the purchase, the Applicant was in touch withhim on a couple of occasions regarding problems with the boat. Mr. Goerzen testified that the Applicant took the boat to a Vector boatdealership in Kelowna for repairs which Go RV and Marine paid for. [110] Bailey Hallett is the business manager of Go RV and Marine.

She recalled assisting with the processing of the credit cards ofanother male who attended at the dealership with the Applicant on August 2, 2013 to complete the purchase, however, the Applicantsigned all of the purchase documents. [111] The Applicant testified that he did not disclose the existence of the speed boat when earlier cross-examined as to the extent ofhis assets because he never intended to use the boat. He stated that RN agreed to finance the purchase and that it was their intention tobuy the speedboat then resell it for at least twice the price RN paid for it.

He stated that the boat and trailer were placed in his name ashe had a truck to pull the boat and had acquired a boating license. He stated that he took a potential buyer with him to test the boat, but itoverheated and he had to take the boat to Kelowna for repairs. However, about a month after the boat was purchased, RN decided togive the boat to his daughter. The Applicant signed a bill of sale in her favour, however, the Canada Revenue Agency had already filed alien which prevented the completion of the transfer.

He stated that the sale price was $70,000 and he is storing the boat in his back yardfor RN’s daughter. She, however, has moved to Australia. He stated that she is trying to arrange to have the boat moved to Australia. [112] Under cross-examination, he indicated that T., his business associate and friend in Dubai, was interested in purchasing the boatand despite being aware that the Applicant had purchased the boat for $70,000 he was prepared to pay $150,000 for it. The Applicantstated that he had not kept a copy of the bill of sale evidencing the transfer of the speed boat to RN’s daughter.

However, RN filed anaffidavit outlining his involvement in the speed boat purchase. [113] RN deposed that he is a close friend and business associate of the Applicant. He confirmed that the Applicant approached himin July 2013 to buy the speed boat for the purpose of “flipping it” for profit; he would finance the purchase and the Applicant would finda buyer for the boat, with each earning 50% of the resale profits. He agreed to use his credit cards to fund the purchase.

The boat andtrailer were registered in the Applicant’s name as he was going to use his truck to tow the boat and his truck insurance would cover theboat. He confirmed that he later told the Applicant not to sell the boat as he was going to gift it to his 21-year old daughter and her fiancé,an Australian national, who were planning to move to Sydney Australia and have since relocated there.

A bill of sale dated September 7,2013 evidencing a sale of the speed boat for one dollar to RN’s daughter was attached to RN’s Affidavit. [114] RN deposed that his daughter attempted to register the transfer of the trailer, but was prevented from doing so by the CanadaRevenue Agency lien. RN stated that he has asked the Applicant to assist with the shipping of the boat to his daughter in SydneyAustralia. No arrangements have, however, been made to do so until the lien is cleared off. He has been in the boat three or four timeswith the Applicant since its purchase.

He has not fully paid off the credit card debt associated with the boat purchase. [115] The application to introduce the new evidence was made some time after final arguments, but before a decision was rendered onthe Rowbotham application. Counsel for the AG provided case authorities more directed to the calling of rebuttal evidence in a criminalproceeding. As noted in R v.

Proctor, (MB CA), [1992] 2 WWR 289, 75 Man R (2d) 217 (Man CA), at para 41, atrial judge has a very broad discretion, exercisable within established principles, to permit the calling of lately-discovered evidence inrebuttal, [116] First, the evidence is relevant to whether the Applicant is able to afford counsel. The evidence relates to an expensive asset thatwas at one point in the Applicant’s name and continues to be in his possession. [117] As to whether the evidence is “new”, Mr.

Willisko testified that he was aware in July 2014 of the boat trailer being registered inthe Applicant’s name, however, a search of Transport Canada’s registry for the boat would not have indicated the Applicant as registeredowner at the time. I find that Mr.

Willisko only became aware of the existence of the speed boat when he conducted surveillance on the Applicant’s home after the evidence and arguments had concluded on the Rowbotham application on September 12th, 2014. [118] Finally, as to whether the Applicant will suffer any prejudice if the Court receives the new evidence, I agree with counsel forthe AG that the Applicant should have disclosed the circumstances of his taking, then transferring, title to the boat and trailer whilecontinuing to maintain both in his possession as part of the full financial disclosure required for this type of application.

He has also beenprovided with a full opportunity to respond to it. Accordingly, I will consider the evidence in relation to the Applicant’s acquisition inAugust 2013 of the speedboat.

[ 119 ] Counsel for the AG urged me to find that the Applicant is the beneficial owner of the speedboat: he negotiated its purchase, signed the bill of sale, registered the boat trailer in his name, has a boat license whereas RN does not, has the truck to haul the boat, oversaw boat repairs after its purchase, stored the boat continuously on his property, operated the boat from time to time, and retained possession of the boat even after its purported sale to RN’s daughter. Counsel for the AG pointed out that despite investing $70,000 in the boat, RN has placed no liens on it.

Plans to ship the boat to Sydney Australia are nebulous. [ 120 ] The Applicant responded that counsel for the AG was aware for some time of the boat trailer registered in his name, but never questioned him about an associated boat. The Applicant stated that he did not feel obliged to disclose the existence of the boat because he never re

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