R. v. Andersen, 2017 BCSC 2516

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: R. v. Andersen, 2017 BCSC 2516 Date: 20171023 Docket: 78916-2 Registry: Kelowna Regina v. Dan Keith Andersen Before: The Honourable Mr. Justice G.P. Weatherill Oral Ruling on Voir Dire Counsel for Crown: J. Bird Appearing on his own behalf: D. Andersen Place and Date of Trial/Hearing: Kelowna, B.C. October 23, 2017 Place and Date of Judgment: Kelowna, B.C. October 23, 2017 [ 1 ] THE COURT: These are my reasons on the voir dire regarding the admissibility of the Crown's proposed similar fact evidence.

If a transcript is ordered, I reserve the right to edit them for clarity. [ 2 ] Mr. Andersen is charged with fraud and theft in relation to the transfer of $2 million in U.S. funds from a bank account at the HSBC in Kelowna owned by Danimal Productions Inc. (“Danimal”), a company owned by the accused and over which he had sole signing authority. The alleged offences occurred between August 6 and 16, 2010. The accused entered pleas of not guilty on both counts.

After a number of adjournments of the trial at the accused's request, the trial commenced on October 10, 2017. [ 3 ] The Crown's theory is that the accused allowed Danimal to accept the transfer of $2 million U.S. dollars deposited by a California businessman, Mr. Woytowicz, under the terms of an agreement whereby Danimal agreed that the money would not leave Danimal's account. Mr.

Woytowicz was anxious to sell a 3D motion picture business known as Parallax to either the accused or to Danimal for some $4.2 million U.S. and the accused was anxious to buy Parallax at that price. [ 4 ] The accused was in the process of gathering the necessary funds to complete the purchase. He and/or Danimal owned a number of patents that the accused understood a group of Europeans was interested in buying in the order of $200 million Euros. The accused planned on using a portion of proceeds from the sale of the patents to purchase Parallax from Mr. Woytowicz.

To accomplish the patents' sale, the accused needed to satisfy the Europeans that his company had financial substance. He proposed that Mr. Woytowicz place $2 million U.S. into Danimal's HSBC bank account in Kelowna for the Europeans to look at to confirm financial substance, but that the money would not be touched. Mr. Woytowicz agreed to the accused's proposal because he was anxious to dispose of his interest in Parallax and on the basis of the accused's assurance that if he transferred $2 million dollars into Danimal's bank account, those funds would be on loan only and would not move out of the account.

They agreed Mr. Woytowicz would be repaid his $2 million U.S. with interest on September 30, 2010. [ 5 ] To ensure there was no risk of the money moving from Danimal's account, Mr. Woytowicz required that his nominee, Mr. Joe Waskiewicz, be the sole signing authority on the Danimal account. The accused agreed. The accused, Mr. Woytowicz, and Mr. Waskiewicz met with the accused's then Kelowna lawyer Mr. Jim Mutter and his then accountant, Mr. Todd Sanderson, and the deal was papered. Mr.

Mutter prepared various agreements including a loan agreement, Clause 3.3 of which reads: The funds advanced to the borrower pursuant to s. 3.2.1 of this agreement shall be deposited in the borrower's HSBC account at the Orchard Park Kelowna branch for which account Joe Waskiewicz of Mill Valley, California, a nominee of the lender and an officer of the borrower, shall be the sole signatory. (“Agreement”). [ 6 ] On August 6, 2010, Mr. Woytowicz and the accused on behalf of Danimal signed the loan agreement and other documents reflecting the agreement. In accordance with the agreement on August 16, 2010, Mr.

Woytowicz transferred $2 million U.S. into Danimal's account at the HSBC in Kelowna. The same day as the funds arrived, the accused caused Danimal to transfer the $2 million U.S. to Rubix Project Management S.C., a Spanish corporation, with the expectation that he would receive over 100 times that money in return. Despite numerous subsequent promises, that money was never forthcoming. It is apparent that the accused was the victim of a scam by unscrupulous agents or owners of Rubix and/or others. [ 7 ] The Crown says that the accused caused Danimal to wire Mr.

Woytowicz's $2 million U.S. dollars to Rubix when he had no

authority to do so, knowing that Danimal was bound by the terms of the Agreement that the money would not move anywhere and that Mr. Waskiewicz was to be the only person with authority to deal with those funds. Accordingly, the Crown says, he is guilty of theft and fraud. [ 8 ] The Crown seeks to introduce evidence of what it says was a similar transaction, or at least a similar attempted transaction, between the accused and Mr. Byron Dafoe, a retired NHL hockey player, that occurred approximately eight months to one year prior to the transaction involving Mr. Woytowicz.

A voir dire was declared. [ 9 ] The Crown called two witnesses on the voir dire , Mr. Dafoe and Mr. Todd Sanderson. Mr. Dafoe testified that in either 2009 or early 2010 he was in the process of attempting to sell some lots in Kelowna that he had developed. The accused approached him saying he was interested in buying at least one lakeshore lot and perhaps some other property Mr. Dafoe owned in Peachland, B.C.

The accused told him that he would soon be realizing on some investments that were going to result in him receiving very large sums of money and he wanted to purchase property in Kelowna in anticipation of those funds arriving. Mr. Dafoe said that the accused told him that these funds had been delayed because of some complications, but that there was an investment opportunity available to Mr. Dafoe to put some money into an HSBC London bank account that would be blocked. Mr. Dafoe's money could be leveraged and would yield a handsome return in six to nine months without the money ever leaving the account.

The accused proposed that Mr. Dafoe invest some $1.5 million into this HSBC account. For that investment, the accused said, Mr. Dafoe's return would be in the order of 20 to 30 percent. [ 10 ] Mr. Dafoe was interested but leery. He could not understand the premise behind the proposal and how it might work. Mr. Dafoe introduced his accountant, Mr. Sanderson, to the accused with whom the accused soon developed an accounting relationship. The accused told Mr. Sanderson that prior to meeting Mr. Dafoe he had been approached by Rubix about raising money through something called “platform trading”.

The accused asked Mr. Sanderson to research how it worked. Mr. Sanderson spoke with a Lisa Peters of Asset Buyers Consortium who apparently was acting as some kind of broker between the accused and Rubix. Ms. Peter’s tried to explain the process to Mr. Sanderson. Platform trading was something new to Mr. Sanderson and he did not feel comfortable with it. He recommended against Mr. Dafoe proceeding. Ultimately, Mr. Dafoe accepted that advice, determined the accused's proposal was too risky for him, and told the accused he would not pursue it. In the end, the proposal never went past initial discussions.

The accused had no issue with Mr. Dafoe declining his proposal and did not pursue Mr. Dafoe further about it. [ 11 ] Mr. Sanderson's evidence was similar to Mr. Dafoe's except that 1) he thought the accused wanted Mr. Dafoe to invest $2 million, not $1.5 million, 2) the money would be placed in an HSBC account in Kelowna, not in London, and 3) even though the money was not to be touched in any way or used for any reason, the accused and not Mr. Dafoe would be a signing authority on the account. Mr.

Sanderson understood that foreign banks would be able to “ping” the account to confirm the money was on deposit but the money would not be touched or transferred. Mr. Sanderson stated that the accused told him that he owned a patent in a company called Echo Rubber Solutions that he was hoping to sell to interested buyers in Europe.

The accused told him that he was dealing with Rubix, a European brokerage group, who would market or sell the patent, but in order to negotiate the deal the accused had to show that Danimal had financial substance and could, if the patents were not sold, take the patents to the next step of their development. [ 12 ] Mr. Sanderson's understanding of the accused's proposal to Mr. Dafoe was that the accused would continue to be the sole signatory on the bank account and that Mr. Dafoe's money would be held subject to an agreement between the accused and Mr. Dafoe. Mr.

Sanderson felt the investment would require a leap of faith on Mr. Dafoe's part which was the main reason Mr. Dafoe declined the proposal. The Crown's Position [ 13 ] The Crown submits that Mr. Dafoe's evidence in its entirety and the portion of Mr. Sanderson's evidence that relates to the accused's dealings with Mr. Dafoe should be considered similar fact evidence and admitted at trial. Collectively, I will call Mr. Sanderson’s and Mr.

Dafoe's evidence on the voir dire the “Dafoe Proposal Evidence”. [ 14 ] The Crown says that the Dafoe Proposal Evidence is relevant to the charges before the court because it shows that the accused made an offer to Mr. Dafoe that he would hold Mr. Dafoe's money in his account and not deal with it. The Crown says the probative value of this evidence is that it shows that Mr. Waskiewicz and Mr. Woytowicz were not mistaken about what they say the accused told them about holding Mr. Woytowicz's money in Danimal's bank account and not moving it.

The Crown argues that this evidence rebuts the anticipated defence that Mr. Woytowicz and Mr. Waskiewicz misunderstood what the accused says he would do with Mr. Woytowicz's money and that the accused had authority to transfer the $2 million U.S. dollars to Rubix. [ 15 ] The Crown argues that the issue in this case is whether the accused told Mr. Woytowicz and/or Mr. Waskiewicz that Mr. Woytowicz's money would remain in Danimal's bank account and it would not be moved. That is the purpose for which the Crown seeks the admission of the Dafoe Proposal Evidence.

The value of this evidence, the Crown says, is driven by the similarity between the proposal made to Mr. Dafoe and the proposal made to Mr. Woytowicz. The Crown says that it corroborates Mr. Woytowicz's and Mr. Waskiewicz's evidence about the accused's proposal made to them and would be useful in evaluating credibility should the accused call evidence in his defence. In other words, the Crown submits that the proposal made to Mr. Dafoe is so similar to the proposal made to Mr. Woytowicz and Mr. Waskiewicz that it amounts to a system to defraud.

Crown submits that the probative value of this evidence outweighs any prejudicial effect it may have on the accused. The Accused's Position [ 16 ] The accused submits that the Dafoe Proposal Evidence should not be admitted because it is not similar fact evidence. The proposal he made to Mr. Dafoe was that the money would be in Mr. Dafoe's personal account, not a corporate account, and since the discussions took place in 2009, they were not temporal to his discussions with Mr. Woytowicz. Further, he argues that the trial evidence is that Mr.

Woytowicz approached the accused because he heard through a third party, Joe Siuicki, that the accused might be interested

in purchasing a 3D filmmaking business. The accused did not approach Mr. Woytowicz. He asserts that the deal with Mr. Woytowiczwas the subject of the loan agreement which was made to assist both the accused and Mr. Woytowicz. Mr. Woytowicz wanted to sellParallax to the accused and the accused wanted to buy Parallax. In order to generate sufficient funds so the sale of Parallax couldcomplete, Mr. Woytowicz agreed to deposit $2 million US dollars into Danimal's account. [17] In Mr. Dafoe's case, Mr. Dafoe was not in need of money.

He was simply seeking to sell lots, an opportunity with the accusedthat did not come to fruition. The accused further argues that there is no suggestion of any improper conduct on his

part in hisdiscussions with Mr. Dafoe. There is therefore no pattern and no transaction, he says, that would come close to the Dafoe ProposalEvidence being admissible as similar fact evidence. Discussion [18] The general rule is that similar fact evidence is presumptively inadmissible because of the potential for prejudice outweighingits probative value.

There may be exceptions, however, where the Crown proves on a balance of probabilities that the similar factevidence is focused on a specific element of the charge, defies coincidence or other innocent explanation and its probative valueoutweighs its potential for prejudice. [19] R. v. Handy, 2002 SCC 56 [Handy], is the leading case on similar fact evidence. In that case, the Supreme Court of Canadaconfirmed that the trial court must take a principled approach to the introduction of similar fact evidence.

The ultimate question iswhether the probative value of the proposed similar fact evidence outweighs its prejudicial effect on the accused. The Supreme Courtprovided a non-exhaustive list of factors to consider on the admissibility of similar fact evidence including proximity in time, similaritiesof circumstances, and similarity in detail. Exclusionary factors include whether the Crown can prove its point with less prejudicialevidence. Similar fact evidence is admissible to show a system or pattern used by the accused, R. v. Brooks, (BC CA),1989 71 CR (3d) 25 (BCCA).

Evidence of similar acts can be admissible to prove the existence of a systematic course of fraud. In R. v.Foley, [1996] B.C.J .No. 985 [Foley] at para. 17, the Court of Appeal quoted from R. v.

Fisher, [1910] 1 K.B. 149 (C.C.A.): … In other words, whenever it can be shewn that the case involves a question as to there having been some mistake or as to the existenceof a system of fraud, it is open to the prosecution to give evidence of other instances of the same kind of transaction, notwithstanding thatthe evidence goes to prove the commission of other offences, in order to negative the suggestion of mistake or in order to shew theexistence of a systemic course of fraud. [20] Similar fact evidence can also be admitted to negate the defence of innocent intent: R. v. Winter, [2008] N.J.

No. 158 (NLPC)[Winter] at p. 20. [21] The Crown seeks to introduce the Dafoe Proposal Evidence, specifically in relation to the accused’s statement that if Mr. Dafoeinvested money it would remain in the accused's HSBC account in London untouched. The Crown says this shows a pattern thatcorroborates what the Crown says the accused told both Mr. Woytowicz and Mr. Waskiewicz, namely, that Mr. Woytowicz's $2 milliondollars would remain in Danimal's HSBC Kelowna account untouched and it would not be moved without Mr.

Waskiewicz's approval. [22] The introduction of the Dafoe Proposal Evidence must be treated cautiously. By the Crown relying on it to prove an element ofthe offences in the indictment, it risks violating the presumption of innocence. There is a general presumption that the accused must onlyanswer to evidence which is the subject of the indictment (Handy, at para. 38). It should only be exceptionally admitted where the Crowndischarges its burden on a balance of probabilities (Handy, at para. 60).

Similar fact evidence may be admitted where its probative valueto an issue in question outweighs its prejudicial effect (R. v. C.R.B., (SCC), [1990] 1 S.C.R. 717). [23] The issue here is whether the accused caused Danimal to transfer Mr. Woytowicz's $2 million to Rubix deliberately in breach ofhis agreement that the money would not be moved and only moved with Mr. Waskiewicz's signature. The accused cross-examinedMr. Dafoe and Mr. Sanderson respecting the Dafoe Proposal Evidence. From that cross-examination the accused does not appear todispute either that he made the proposal to Mr.

Dafoe, as he described, or that that proposal was that the money would remain in theHSBC account untouched. He says, in effect, that his discussions with Mr. Dafoe were nothing more than a legitimate business proposalrespecting a possible legitimate business investment; there was nothing improper about it. [24] The discussions the accused had with Mr. Dafoe, although similar to his discussions with Mr. Woytowicz, relate to a transactionthat did not take place. Even if it did take place, there would be nothing illegal or improper about it on its face.

It was nothing more thanan investment business arrangement that was discussed but did not go forward. Unlike the facts in Foley and Winter, there was nosystematic course of fraud involved. [25] The accused also cross-examined both Mr. Woytowicz and Mr. Waskiewicz at some length. Most of that cross-examinationdealt with the background leading up to their meetings in Kelowna and to Mr. Woytowicz's decision to transfer $2 million US dollarsinto Danimal's HSBC bank account and the basis for that decision. The accused did not suggest to either Mr. Woytowicz orMr.

Waskiewicz that they misunderstood the proposal or that the agreement was that he was free to use Mr. Woytowicz's $2 milliondollars and transfer it to Rubix, nor did he suggest to them that he did not agree that the $2 million dollars would remain in Danimal'saccount untouched. [26] The loan agreement is an exhibit at trial. It sets out in some detail the agreement between Mr. Woytowicz and Danimalrespecting what use could be made of Mr. Woytowicz's money. Specifically, it states that the $2 million dollars was to be deposited inDanimal's HSBC account for which account Mr.

Waskiewicz was to be the sole signatory. [27] I have considered the parties' submissions and I have reviewed and considered the Handy factors and the other cases providedby Crown. The Crown concedes that in seeking the admission of the Dafoe Proposal Evidence it is anticipating what the defence may beand is covering its bases. One of the anticipated defences is that the accused will testify and will deny agreeing that Mr. Woytowicz'smoney would remain untouched in Danimal's HSBC bank account. Based on the accused's cross-examinations of the Crown witnesses

and the fact that he did not put that proposition to anyone, it may well be that the accused does not dispute he made the alleged statement. [ 28 ] At the moment, I am not persuaded that the Dafoe Proposal Evidence should be admitted as similar fact evidence at trial. I am not persuaded it has any probative value because firstly, it relates only to preliminary discussions with Mr. Dafoe that did not go anywhere, and secondly, the issue the Crown is concerned about may not be an issue at all. I have decided to follow what was done by the learned trial judge in R. v.

R.L., [2007] O.J .No. 5294 and not admit the Dafoe Proposal Evidence at this point. This ruling is subject to reconsideration if the accused calls evidence that Danimal's agreement with Mr. Woytowicz did not restrict it from transferring Mr. Woytowicz's funds to Rubix. To be clear, I do not know at the moment what defence evidence the accused will be calling, if any, nor what defences will be argued. If the accused decides to testify and gives evidence that he did not agree with Mr. Woytowicz or Mr.

Waskiewicz that as part of the proposal the money would remain in Danimal's bank account untouched, I will allow the Crown to apply to have this ruling reconsidered. Subject to that reconsideration, the Dafoe Proposal Evidence is not admissible as similar fact evidence at trial. “G.P. Weatherill, J.”