R. v. Rosen Date:, 2011 BCPC 209

Citation: R. v. Rosen Date: 20110823 2011 BCPC 0209 File No: 201658-1 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. GLENN ANTHONY ROSEN REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE J.F. PALMER Counsel for the Crown: G. Sair Appearing in person: G.A. Rosen Place of Hearing: Vancouver, B.C. Dates of Hearing: June 14, 17, 20, 2011 Date of Judgment: August 23, 2011 Introduction [ 1 ] The accused, a bankrupt, is charged with four counts of failing to comply with the provisions of Section 198(2) of the Bankruptcy and Insolvency Act . Mr.

Rosen was petitioned into bankruptcy by request of the British Columbia Securities Commission, (the “Commission”), on January 24, 2007. Campbell Saunders Ltd. was appointed the Trustee of Mr. Rosen’s estate and Ms. Patty Wood, formerly a vice-president of that firm, administered the file. The first meeting of the creditors was convened on February 21, 2007. The trustee Ms. Wood, Mr. Dennis Say, representing the creditor, and Mr. Rosen were in attendance. [ 2 ] Mr.

Rosen did not attend the meeting with the required documents, advising that he had not received any correspondence from the Trustee other than a Notice of the first meeting of creditors. Documents were provided to Mr. Rosen at the meeting including an Application for Insolvency Services. Ms. Wood and Mr. Say questioned Mr. Rosen with respect to his estate, assets and liabilities. They also went through Mr. Rosen’s duties and obligations under the BIA as a bankrupt and advised him of the potential consequences of non- compliance. After the meeting Mr. Rosen never communicated directly with Ms.

Wood and dropped off incomplete and unsworn documents at her office. The Legislation [ 3 ] Mr. Rosen is charged with four counts of breaching section 198(2) of the Bankruptcy and Insolvency Act , ( BIA ), which is headed Failure to comply with duties and states: A bankrupt who, without reasonable cause, fails to comply with an order of the court made under

section 68 or to do any of the things

required of the bankrupt under

section 158 is guilty of an offence (

a) on

summary conviction, to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year, or toboth; or (

b) on conviction on indictment, to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding three years, orto both. [4] The charges against Mr. Rosen are violations of subsections (a), (b), (

d) and (

g) of

Section 158 of the BIA, which is titled Dutiesof Bankrupt. They state: A bankrupt shall (

a) make discovery of and deliver all his property that is under his possession or control to the trustee or to any person authorized by thetrustee to take possession of it or any part thereof ; (

b) deliver to the trustee all books, records, documents, writings and papers including, without restricting the generality of theforegoing, title papers, insurance policies and tax records and returns and copies thereof in any way relating to his property or affairs; (

c) within five days following the bankruptcy, unless the time is extended by the official receiver, prepare and submit to the trustee inquadruplicate a statement of the bankrupt’s affairs in the prescribed form verified by affidavit and showing the particulars of thebankrupt’s assets and liabilities, the names and addresses of the bankrupt’s creditors, the securities held by them respectively, the dateswhen the securities were respectively given and such further or other information as may be required, but where the affairs of thebankrupt are so involved or complicated that the bankrupt alone cannot reasonably prepare a proper statement of affairs, the officialreceiver may, as an expense of the administration of the estate, authorize the employment of a qualified person to assist in the preparationof the statement; (

d) make disclosure to the trustee of all property disposed of by gift or settlement without adequate valuable consideration within theperiod beginning on the day that is five years before the date of the initial bankruptcy event and ending on the date of the bankruptcy,both dates included; The Law [5] The offences to which Mr. Rosen pled not guilty are strict liability offences. To rebut the evidence adduced against him Mr.Rosen had, on a balance of probabilities, to prove that he did whatever a reasonable man would be expected to do to comply with hisobligations, as a bankrupt, under the BIA.

Crown counsel provided the Court with seven cases dealing with the defence of due diligence: R. v. Merkle, [1979] CTC 519, (1980) 1979 ABCA 285 , 1 W.W.R. 361 (Alta C.A.) Rolbin v. R. [1982] 2 C.R.R. 166 (Que. S.C.) R. v. Highland Enterprises Ltd. (1981), (PE SCTD), 60 C.C.C. (2d) 78 (P.E.I.S.C.) R. v. R. R. Clark Associates Ltd. (1976) (NS SC), 32 C.C.C. (2d) 351 (N.S. Co.Ct) R. v. Adair, 2000 BCSC 861 R. v. Kwasny (22 June 1995) BCPC Maple Ridge Registry 21866 R. v.

McKinney et al., 2004 BCPC 9 , 2004 BCPC 0009 Although these cases deal with charges under the Income Tax Act the principles articulated are applicable to the case at bar. [6] The law in Canada, with respect to strict liability offences, was settled by the Supreme Court of Canada in R. v. Sault Ste Marie(1978), (SCC), 3 CR (3d) 30; and R. v. Chapin (1979), (SCC), 7 CR (3d) 225. In R. v. Merkle 1979ABCA 285 , [1979] CTC 519, at page 521, Tab 4 in the Crown’s Book of Authorities, Justice Morrow of the Alberta Court ofAppeal, quoted Mr. J.

Dickson in Chapin, pp 231-232: In Sault Ste Marie …this court recognized three categories of offences, according to the mental elements requisite for conviction, ratherthan the traditional two: 1) Mens rea offences, in which some positive state of mind such as intent, knowledge or recklessness must be proved by theprosecution either as an inference from the nature of the act committed or by additional evidence; 2) Strict liability offences, in which there is no necessity for the prosecution to prove the existence of mens rea; the doing of theprohibited act prima facie imports the offence, leaving it open to the accused to avoid liability by proving that he took all reasonablecare.

This involves consideration of what a reasonable man would have done in the circumstances.

The defence will be available if theaccused reasonably believed in a mistaken set of facts which, if true, would render the act or omission innocent, or if he took allreasonable steps to avoid the particular event; 3) Absolute liability offences, where it is not open to the accused to exculpate himself by showing that he was free from fault. [7] Justice Morrow went on at page 523 of Merkle, to find …that the insertion of the word “reasonable” by the Legislature, has by the use of such a term by itself, suggested that some elasticity in

application or

interpretation has been left open. In my opinion this brings the offences charged more readily within the second class, where in the words of the Sault Ste Marie case, would constitute a defence “if he took all reasonable steps to avoid the particular event”. Evidence for the Crown [ 8 ] The Crown witness Ms. Patty Wood, Trustee of the estate of Mr. Rosen, introduced Exhibits 1 and 2. Exhibit 1 is the Order of Master Bolton, Registrar in Bankruptcy, in the Supreme Court of British Columbia, made January 24, 2007 and approved as to form by counsel for the creditor and entered January 25, 2007.

The Order adjudged Mr. Rosen a bankrupt, appointed Campbell, Saunders Ltd., the Trustee of the estate of the bankrupt, and ordered the Trustee to post security in accordance with the provisions of the BIA and ordered that the costs of the Petitioner, the creditor “BCSC”, be paid out of the estate of the bankrupt on taxation of the estate. [ 9 ] Exhibit 2 is the Book of Documents, admissible pursuant to section 190 (2) of the BIA , evidencing the history of Mr. Rosen’s interactions with the Trustee between January 2007 and March 2008. [ 10 ] Ms.

Wood testified that she is a Chartered General Accountant, licensed as a Trustee in Bankruptcy for the past seven years. She was appointed by the Superintendent of Bankruptcy as the Trustee of Mr. Rosen’s estate at the request of the petitioning Creditor, the BCSC (Tab 4, Exhibit 2). Ms. Wood testified that, in accordance with her duties as Trustee, she sent Mr.

Rosen a letter notifying him that he had been adjudged a bankrupt on January 24, 2007, that her firm, Campbell Saunders had been appointed Trustee in Bankruptcy, information with respect to his duties and obligations as a bankrupt, and blank documents to assist Mr. Rosen in providing the required information (Tab 5, Exhibit 2). These documents were sent, by registered mail, to Mr. Rosen’s address as provided to the Trustee by the petitioning creditor’s counsel. Mr. Rosen’s former girlfriend, Angie Mazepa, signed for the delivery. [ 11 ] The third paragraph of the January 30, 2007 letter stated: Pursuant to

Section 158 (

d) of the BIA , you are required to submit to the Trustee, within five days, a statement of your affairs. We enclose a form of Statement of Affairs, Information Relating to the Bankrupt, and Monthly Income and Expense Statement of the Bankrupt and the Family Unit. Once completed, this document as a whole must be sworn under oath before a commissioner for taking affidavits, which we will then send to your creditors and the Superintendent of bankruptcy with notice of the first meeting of creditors.

Please note that the first meeting of creditors is set for Wednesday, February 21 st , 2007, and you are required to attend. [ 12 ] Ms. Wood also sent Mr. Rosen, by regular post to the same address, the Notice to Bankrupt of the First Meeting of Creditors (Tab 6, Exhibit 2). The meeting was scheduled for February 21, 2007 at 2:00 p.m. in the offices of Campbell Saunders at 1000-570 Granville Street, Vancouver, B.C. On that date Mr. Rosen attended the meeting, signed the attendance sheet (Tab 9, Exhibit 2) and had a conversation with Ms. Wood and Mr. Dennis Say, representative for the petitioning creditor BCSC.

Mr. Rosen knew Mr. Say from his prior dealings with the BCSC. [ 13 ] On February 15, 2007 Ms. Wood, having received no response from Mr. Rosen, sent him another letter, (Tab 8, Exhibit 2), urging Mr. Rosen to contact her office, …so that we may assist you in the preparation of your statement of affairs, and inform you of the bankruptcy process. As you were informed in our correspondence dated January 30 th , 2007, there are a number of duties imposed upon you by the Bankruptcy and Insolvency Act (“ BIA ”).

If you fail to comply with these duties, we will have no alternative but to report this fact to the Office of the Superintendent of Bankruptcy . Pursuant to Section 198(2) of the BIA , failure to comply, without reasonable cause, is an offence and is liable on conviction to a fine not exceeding ten thousand dollars, imprisonment for a term not exceeding three years, or both. [ 14 ] Ms.

Wood testified that the purposes of the first meeting of the creditors were to: provide attending creditors a report on the estate- assets, liabilities, potential issues; affirm the appointment of the Trustee or substitute another Trustee on a motion of the creditors; appoint an inspector who would act as a fiduciary for the body of creditors – advising the Trustee, asking questions of the bankrupt and the Trustee and providing directions to the Trustee. [ 15 ] Ms. Wood was affirmed as the Trustee at this meeting. Mr. Say was appointed as the inspector at this meeting.

The Minutes Of The First Meeting Of Creditors (Tab 10, Exhibit 2) were prepared by Ms. Wood, from notes made during the meeting, in accordance with the Trustee’s obligations to the Superintendent in Bankruptcy. The Minutes are filed both with the Superintendent and in the court file. [ 16 ] Ms. Wood also testified that during the course of the meeting she provided Mr. Rosen with a copy of her letter to him, dated January 30, 2007 including all enclosures and observed him go through all of the enclosures. To advise Mr. Rosen with respect to his duties under the BIA Ms. Wood read each

section of

Section 158 aloud, explained it to Mr. Rosen and asked him if he understood and if he had any questions. Mr. Rosen did not have any questions at that time. [ 17 ] A voir dire was declared for part of Ms. Wood’s evidence with respect to statements made by Mr. Rosen during the first meeting of creditors. The only persons present in the boardroom at Campbell Saunders were Ms. Wood, Mr. Say and Mr. Rosen. Mr. Say and Mr. Rosen also testified on the voir dire. Mr. Rosen’s statements to Ms. Wood and Mr. Say were ruled voluntary and admissible. [ 18 ] Ms.

Wood testified that as the Trustee she had convened the meeting, read the Trustee’s Report and solicited questions. Mr. Rosen stated that he was unclear about the

section of her report where she had stated that she had not received any books or records from the bankrupt. When he was provided an explanation Mr. Rosen stated that he had not received either the January 30 th , 2007 letter from Ms. Wood or the follow-up letter. Mr. Rosen stated that he had only received the Notice of First Meeting of Creditors. [ 19 ] When he was advised that all correspondence had been sent to the same address Mr. Rosen had no explanation for not having received the letters. When he was provided a copy of the delivery notice for the registered mail Mr. Rosen stated that his ex-girlfriend

had been staying with him at the time, that he recognized her signature on the delivery notice but she had not provided the letter to him. [ 20 ] When asked by Crown counsel if she had received anything from Mr. Rosen after the meeting Ms. Wood replied that on March 6, 2007 he had dropped off a partially complete Application for Insolvency Services and an incomplete and unsworn Statement of Affairs (Tab 11, Exhibit 2). Although Ms. Wood was present in her office Mr. Rosen did not ask to speak with her and left the documents at the reception desk. [ 21 ] Ms. Wood called Mr.

Rosen twice after he left the incomplete documents, leaving a message the first time and finding his voice mailbox full the second time. Ms. Wood then sent Mr. Rosen an e-mail. Ms. Wood received no response. [ 22 ] Ms. Wood called Mr. Rosen again on March 26, 2007 and left a message. On March 27 th , 2007 Ms. Wood sent Mr. Rosen a letter, (Tab 12, Exhibit 2) enclosing the documents Mr. Rosen had left at her office on March 6, 2007. Mr. Rosen was also provided blank documents to complete and monthly Income & Expense Statements for February and March 2007. The letter advised Mr.

Rosen, When you complete the enclosed documentation, we will prepare a statement of affairs on your behalf which you may swear under oath at our office or before a lawyer or notary. The letter invited Mr. Rosen to call Ms. Wood directly with any questions. [ 23 ] A meeting was subsequently arranged for April 3, 2007 but Mr. Rosen did not attend the meeting and did not provide Ms. Wood with the required documents. When Ms. Wood called Mr. Rosen’s number some else answered the phone. Ms. Wood left a message for Mr. Rosen but had no direct contact from Mr. Rosen, or anyone on his behalf, after that date. [ 24 ] Mr.

Rosen did not challenge Ms. Wood’s evidence on cross-examination. [ 25 ] Mr. Say, comptroller for the BCSC, testified that it is part of his duties in the Finance Sector to collect on any orders made by the BCSC against any individual or corporation. When a person, subject to an order appears unable to meet their obligations to the BCSC Mr. Say will refer the matter to legal counsel or may petition the person into bankruptcy in order to locate assets. Mr. Say hired Lawson Lundell to petition Mr. Rosen into bankruptcy. [ 26 ] Mr.

Say attended the first meeting of creditors on February 21, 2007 and signed the attendance sheet. Mr. Say recognized Mr. Rosen at the meeting and was present when Mr. Rosen signed the attendance sheet. Mr. Say corroborated the evidence of Ms. Wood with respect to the length of the meeting, the tenor of their discussions with Mr. Rosen, the information and instructions provided to Mr. Rosen regarding his duties and obligations under the BIA . [ 27 ] Mr. Say questioned Mr. Rosen about his assets and employment. He recalled that Mr.

Rosen had said he was ill and living with his parents, and that he had been unable to work due to illness. Mr. Rosen acknowledged having had the use of a leased vehicle which was also in his father’s name. [ 28 ] In his cross-examination of Mr. Say Mr. Rosen suggested that he had told the meeting that he was living in his parents’ basement suite and that he was no longer at 1429 Willingdon Avenue. Mr. Say responded that the correspondence had been sent to the only address that Mr. Rosen had provided to the BCSC. Evidence for the Defence [ 29 ] On the voir dire Mr.

Rosen testified that he did not think he should have been petitioned into bankruptcy and that he felt pressured and bullied by the BCSC. He also testified that at the first meeting of the creditors he felt he was interrogated by Ms. Wood and Mr. Say. Mr. Rosen was unable to specify any specific way in which he was pressured at the meeting other than Ms. Wood and Mr. Say advised that there were consequences for non-compliance which could include a jail sentence. [ 30 ] Mr.

Rosen testified that he received only the application for Insolvency Services at the meeting and received no information with respect to his duties as a bankrupt. This was not put to either Ms. Wood or Mr. Say on cross-examination. Mr. Rosen had been advised that anything he would testify to which differed from the evidence of the Crown’s witnesses should be suggested to the witnesses so they could have an opportunity to respond. [ 31 ] Mr. Rosen testified that after he received the documents at the meeting he tried to fulfill his duties but had difficulties because he was really ill at the time.

He testified that he had asked Ms, Wood for help but got no response to his request. This suggestion was not made to Ms. Wood during her cross-examination. Mr. Rosen acknowledged that he just dropped the documents off at Ms. Wood’s office when they were partially complete. Mr. Rosen also testified that if he had received the paperwork before the meeting he would have fulfilled his duties because he has always been diligent. [ 32 ] Mr. Rosen testified that he had returned to Ms. Wood’s office twice after dropping the application off but had not seen Ms. Wood.

It was his evidence on direct that he had also left a message on her voicemail saying that he was taking his son to the Okanagan for a visit with his son’s mother but he was not specific as to when that message was left. [ 33 ] Mr.

Rosen testified variously that he believed that at the first meeting of creditors he wrote down the address where he was staying and left a paper with the address he was moving to; that when he returned the papers he said he was moving two blocks down from where he had been living; that he had written his new address on a post-it note which he stuck on the documents he dropped of at Ms. Wood’s office. [ 34 ] On cross-examination Mr. Rosen’s previously selective memory failed him completely. He could not remember details of his communications with Ms. Wood after the meeting February 21, 2007.

He acknowledged speaking to Ms. Wood on April 2, 2007 but was uncertain as to who made the call. He stated that he would not have told Ms. Wood he was bringing her more information because he did not have any more information. When asked what the purpose of the meeting was Mr. Rosen stated that he thought he was probably

going to pick up his good copy of the documents he had dropped off or that maybe he was going to fill the documents out with Ms.Wood. [35] When asked if he had made provisions to have his mail forwarded to his parents’ house Mr. Rosen said he had not done so. Whenasked if he had gone back to his former residence to check for mail Mr. Rosen said he had not. When asked to explain why he had notdone so Mr. Rosen responded that he was way gone from there. [36] On cross-examination Mr. Rosen contradicted his earlier testimony that he had not been told by either Ms. Wood or Mr.

Sayabout his obligations under the BIA and possible consequences of non-compliance. When asked about Ms. Wood’s evidence on thatpoint Mr. Rosen denied having heard anything from Ms. Wood but said Mr. Say had made such statements a few times during themeeting. [37] Mr. Rosen consistently contradicted Ms. Wood’s evidence with respect to their communications. Mr. Rosen made assertionsabout Ms. Wood’s statements to him that varied significantly from her evidence but these variations were never put as suggestions to Ms.Wood during her cross-examination. [38] Mr.

Rosen did acknowledge his criminal record for misappropriation of funds, a conviction entered June 2, 2005. He alsoacknowledged an offence under the Securities Act, trading while prohibited, entered April 7, 2010. Findings [39] When an accused has testified the trial judge is required, in assessing that evidence, to follow a three part process set out by the Supreme Court of Canada in R. v. W.(D). (1991) (SCC), 3 C.R. (4th) 302. If the evidence of the accused is exculpatorywith respect to an element of the Crown’s case against the accused and that evidence is believed the accused is entitled to an acquittal.

Ifthe accused’s evidence is not believed the trial judge must determine whether it raises a reasonable doubt. If the evidence raises areasonable doubt the accused is entitled to an acquittal. If the evidence of the accused does not raise a reasonable doubt the trial judgethen must determine whether the evidence in the crown’s case is proof beyond a reasonable doubt of the guilt of the accused. [40] Mr. Rosen was neither a careful nor a credible witness. His evidence was internally inconsistent and inconsistent between directand cross examination.

He was evasive on cross-examination responding to Crown counsel’s questions with questions about theTrustee’s conduct. His evidence was not believed. [41] Although Mr. Rosen suggested that he had been diligent with respect to his duties and obligations his conduct never approachedthat which would be considered reasonable so as to constitute a defence of due diligence. Mr. Rosen was not reasonable in hisinteractions with the Trustee in terms of keeping people properly apprised of his mailing address.

He was not diligent in ensuring that hismail would be delivered to his current address or in retrieving his mail from his former address. [42] Mr. Rosen was not reasonable in his completion of the documents provided by Ms. Wood, or in his failure to return thedocuments sworn under oath. Mr. Rosen was not reasonable in failing to attend the meeting with Ms. Wood on April 3, 2007 or to followup with her in the ensuing months. Mr. Rosen was not reasonable in failing to provide the trustee with documentation of his assets andliabilities. Mr.

Rosen was most unreasonable in his failure to acknowledge his obligation to be proactive in the resolution of his financialaffairs. No credible or reliable evidence was adduced to support a finding that ill health was a reasonable cause for Mr. Rosen’s non-compliance. His evidence did not, as Mr. Rosen suggested in final submissions raise a reasonable doubt with respect to any element ofthe Crown’s case against him. [43] I found Ms. Wood to be a credible witness. I accept her evidence with respect to the history of her dealings with Mr. Rosen whileshe was the Trustee of his estate. I do so because Ms.

Wood, during all her dealings with Mr. Rosen, was acting in a professionalcapacity, made notes as things occurred and had a coherent recollection of events. Her evidence with respect to what occurred at the firstmeeting of creditors was corroborated by the evidence of Mr. Say. Her evidence is also corroborated by the documents filed as Exhibit 1and in Exhibit 2 in this proceeding. [44] Mr. Say was not as careful a witness as he should be in all aspects of his evidence but I accept his evidence with respect to whatoccurred at the first meeting of creditors and the information provided to Mr.

Rosen about his duties and obligations as a bankrupt andthe possible consequences of non-compliance. [45] On the whole of the evidence adduced in the Crown’s case I find the Crown has proven Counts 1, 2 and 3 against Mr. Rosenbeyond a reasonable doubt and I find him guilty as charged on each of those counts. [46] The allegation in Count 4 is not consistent with the wording of the statute. Mr. Rosen is unrepresented by counsel and cannot beexpected to argue technical niceties. I find the Crown has not proven an offence pursuant to

section 158(

g) of the BIA beyond areasonable doubt and acquit Mr. Rosen on Count 4. _______________________________ The Honourable Judge J.F. Palmer Provincial Court of British Columbia