R. v. Joyce, 2019 NLSC 5

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : R. v. Joyce , 2019 NLSC 5 Date : January 16, 2019 Docket : 201704G0187 Her Majesty The Queen v. Dean WILLIAM Joyce Before: Justice Vikas Khaladkar Place of Hearing: Corner Brook, Newfoundland and Labrador St. John’s, Newfoundland and Labrador Dates of Hearing: October 9-12, 15-16, 2018 November 5-6, 2018

Summary: The accused testified in his own defence. The rule in Browne v. Dunn was not invoked in relation to the explanation he tendered because a Crown witness was asked about the issue in cross examination. Furthermore, the Crown could have asked for certain witnesses to be recalled if it felt that a Browne v. Dunn issue existed. It did not do so. There is, therefore, no impediment to accepting the accused’s testimony as tendered. The accused’s evidence was believed. The accused did not engage in any deception with respect to the withholding of money or the ordering of structural steel.

As such, the mens rea element of the charges against him are not made out. The accused is acquitted of fraud and of obtaining property by false pretences. Appearances:

Ashley J.M. Targett Appearing on behalf of the Crown Mark J. Gruchy Appearing on behalf of the Accused Authorities Cited: CASES CONSIDERED: R. v. Théroux, (SCC), [1993] 2 S.C.R. 5; R. v. Suzi, 2018 ABPC 130; R. v. Lifchus, (SCC), [1997] 3 S.C.R. 320; R. v. Starr, 2000 SCC 40; R. v. W. (D.), (SCC), [1991] 1 S.C.R. 742; R. v. Best,2016 NLCA 10 RULES CONSIDERED: Browne v. Dunn (1893), 1893 CanLII 65 (FOREP), 6 R. 67, (U.K.

H.L.) REASONS FOR JUDGMENT Khaladkar, J.: INTRODUCTION [1] Dean Joyce, through his company SLJ Developments Ltd., was in the business of selling rebar (structural steel) andexcavator and loader attachments to the construction industry. [2] In 2010, on account of a significant snowfall that brought construction to a standstill, Mr. Joyce found himself in somefinancial difficulty. He had ordered a number of attachments from his supplier in the United States in anticipation of sales inNewfoundland and Labrador. However, those sales did not materialize. Mr.

Joyce was stuck with stock that he was unable to move andthe supplier was becoming pressing and persistent about payment for the attachments. [3] Mr. Joyce approached Darrell Bennett and Glen Pike – long-term family friends – to help him out. Messrs. Bennett and Pikewere involved in a variety of business enterprises through their company, Marine Contractors. That company was a competitor to manyof Mr. Joyce’s clients. It was agreed by all concerned that Marine Contractors would become involved as an investor, but should play avery low profile going forward. [4] Mr.

Bennett testified that a verbal arrangement was reached whereby:

a) The parties would set up a company, Rock Attachment Steel Incorporated, for the purpose of selling construction rebar andattachments.

b) Marine Contractors would advance the money required to pay SLJ Developments Ltd.’s debt for the attachments. The attachmentswould be sold through Rock Attachment Steel Incorporated.

c) Mr. Joyce was to be a 50% owner of the enterprise and would receive a commission of 20% of all money brought in by him onaccount of sales. In addition, Mr. Joyce was to be reimbursed his travel expenses on account of car rentals, hotels, meals and the like.

d) At the end of a year the profits would be divided 50/50. If Mr. Joyce wished, he could buy out Darrell Bennett and Glen Pike at thattime. [5] Mr. Joyce testified that he received some monies from Rock Attachment Steel Incorporated on account of expenses, butnothing close to what he submitted on his expense claim forms on a fairly regular basis. [6] Mr. Joyce testified that during his relationship with his partners in Rock Attachment Steel Incorporated, he continued to payout of pocket for drafting services that were needed in order to land contracts for the supply of reinforcing steel.

Furthermore, hetestified that on occasion he paid the supplier of the steel out of his own pocket. [7] Mr. Joyce testified that he retained some of the monies that he collected to offset his expenses, and that he told Mr. Bennett at

the time that he was doing so. [ 8 ] I have determined that Mr. Joyce should be acquitted of both charges against him. What follows are my reasons for so doing. BACKGROUND [ 9 ] Mr. Bennett testified that, on one occasion, Rock Attachment Steel Incorporated paid to send Mr. Joyce and his family to Florida because he was getting “stressed out”. He also testified that the company paid for Mr. Joyce’s expenses – including car rental, hotels, meals and the like. However, Mr. Rick Cull, the person assigned by Mr. Bennett to keep the books for Rock Attachment Steel Incorporated, stated that Mr.

Joyce was sporadically given a thousand dollars here, two thousand there at Mr. Bennett’s instructions. And Mr. Joyce stated that his expenses were not paid by the company – although he submitted his expense claims, but he did acknowledge receiving sporadic sums as indicated by Mr. Cull now and again. On at least one occasion, in June, 2011, Mr. Joyce made out a cheque for $10,000 to himself on account of “expenses”. [ 10 ] According to Mr. Joyce and Mr. Cull there were no payments made to Mr. Joyce on account of sales commissions.

There were no remittances to the Canada Revenue Agency on account of taxes, the Canada Pension Plan or Employment Insurance. [ 11 ] Mr. Joyce had the bad habit of using “invoice” forms to keep notes of his discussions with potential customers. He had the additional bad habit, on occasion, of handing these “invoice” forms to Mr. Cull – who dutifully entered them, improperly, as accounts receivable in the company’s financial records. Mr. Cull ought to have waited until there was a purchase order from the customer before entering these amounts as receivables.

The fact that he didn’t do so had the effect of spiking the sales and giving wrong information about the company’s financial position. [ 12 ] Cpl. Mark Elliott, the lead investigator on behalf of the Royal Canadian Mounted Police (“RCMP”), testified that he only obtained, through production orders, the banking records of Mr. Joyce and SLJ Developments Ltd. Purposely, Cpl. Elliott did not obtain the banking records of Rock Attachment Steel Incorporated because it was the complainant in the matter. He felt that only the records pertaining to the accused were necessary.

Court was not provided with any forensic accounting report related to the transactions between Mr. Joyce, SLJ Developments Ltd. and Rock Attachment Steel Incorporated. [ 13 ] Mr. Joyce continued to use his own company, SLJ Developments Ltd., for the purpose of providing quotes to customers, invoicing and receiving payments. Sometimes he would turn over the cheques received in the name of SLJ Developments Ltd. to Mr. Cull. On other occasions he deposited the payments into SLJ Developments Ltd.’s bank account and paid by SLJ Developments Ltd. cheques or bank drafts to Rock Attachment Steel Incorporated.

He continued to use SLJ Developments Ltd.’s office space and related equipment in an effort to make sales. Rock Attachment Steel Incorporated did not provide Mr. Joyce with any office space, secretarial assistance, telephone, fax or computing facilities. [ 14 ] Mr. Bennett was not happy that Mr. Joyce continued to use SLJ Developments Ltd. to conduct business. He testified that several meetings were conducted in which Mr. Joyce was asked to cease and desist this practice. However, that did not happen and as late as November, 2011 Mr.

Joyce was continuing to use SLJ Developments Ltd. for receiving funds from customers and remitting same to Rock Attachment Steel Incorporated. [ 15 ] To say that the relationship between the parties was, from the outset, tumultuous would be an understatement. Mr. Bennett was busy running his own enterprises. I did not get the sense that he had a lot of time to devote to the proper running of Rock Attachment Steel Incorporated. He deferred to Mr. Cull and to Mr. Joyce. The lack of management oversight was, ultimately, probably fatal to the enterprise. [ 16 ] Out of the original nine counts with which Mr.

Joyce was charged, the Crown withdrew all but two. The remaining counts are as follows: Count # 1 Between the 1st day of April, A.D. 2011, and the 31st day of December, A.D. 2011, at or near the town of Pasadena, in the Province of Newfoundland and Labrador, did by deceit, falsehood or other fraudulent means, defraud Rock Attachment Steel Incorporated of property, contrary to s. 380(1) (

a) of the Criminal Code . Count # 2 Between the 1st day of April, A.D., 2011, and the 31st day of December, A.D. 2011, at or near the town of Pasadena, in the Province of Newfoundland and Labrador, did by a false pretense with intent to defraud obtain from Rock Attachment Steel Incorporated construction rebar of a value exceeding five thousand dollars, contrary to s. 362(1) (

a) of the Criminal Code . THE EVIDENCE FOR THE CROWN [ 17 ] The trial lasted for eight days. Cpl. Mark Elliott, the lead investigator, entered a number of documents relating to Rock Attachment Steel Incorporated and SLJ Developments Ltd. This included invoices, bills of lading, cancelled cheques and banking records.

Some of the records were provided voluntarily by Rock Attachment Steel Incorporated, while other records were obtained by means of production orders. [ 18 ] The investigation did not include any records pertaining to Marine Contractors (the company owned by Darrell Bennett and Glen Pike that was a part owner of Rock Attachment Steel Incorporated). Likewise, the investigation did not look into whether or not any monies were owing to the accused because, according to Cpl. Elliott, the accused did not make any complaint. [ 19 ] The trial would have benefited from the analysis of a forensic accountant.

Regrettably, no such evidence was tendered.

RICK CULL [ 20 ] Rick Cull worked for Marine Contractors for 26 years. He was their bookkeeper and looked after accounts receivable and accounts payable. [ 21 ] Mr. Cull testified that he would enter any invoices provided to him by the accused into the accounting system that he maintained for Rock Attachment Steel Incorporated. It would then show up as an account receivable in the accounting system. Mr. Cull did not match these invoices with purchase orders from the customer of the goods. As a result, the accounting system showed far more in receivables than was actually the case. [ 22 ] Mr.

Cull testified that he, or someone in his office, would occasionally make out a cheque for $1,000 or $2,000 here or there payable to Mr. Joyce and characterized it in the accounting system as “miscellaneous” payments. Mr. Cull testified that Mr. Joyce was never paid any commission. There was no evidence led as to the total value of the miscellaneous payments so made. [ 23 ] Mr. Cull testified that most of the transactions, he estimated 75%, proceeded normally. It was not possible to discern from Mr.

Cull’s evidence whether the 25% that did not proceed normally were the invoices that were improperly entered without corresponding purchase orders or whether there was some other problem associated with them. [ 24 ] Mr. Cull produced a list of accounts receivable for the time period from May, 2011 to December, 2011. The receivables totaled $1,164,940.10. From this amount a number of entries were written off in 2011 and 2012. [ 25 ] Mr. Cull testified that he did not track inventory (of attachments and rebar) in Rock Attachment Steel Incorporated.

He testified, with respect to rebar, that in addition to the rebar ordered by Mr. Joyce, if there was room on the truck, Marine Contractors would order additional rebar to keep on hand. Marine Contractors was in the construction business and used both rebar and the types of attachments that were being brought in by Mr. Joyce. [ 26 ] When the enterprise was brought to an end in December, 2011 Mr. Cull testified that there was $175,000 worth of inventory on hand. There was no accounting tendered for how this valuation came about. [ 27 ] Mr. Cull testified he knew that there was an issue between Mr.

Joyce and Messrs. Bennett and Pike concerning expenses. He knew that Mr. Joyce was demanding compensation. He did not know the quantum of the claim for compensation. [ 28 ] A transaction report for the time period August 8, 2011 to December 31, 2011 was entered through Mr. Cull as Exhibit RC-25. Taking into account items written off in 2011 and 2012 (since a number of sales entries were not really sales) it would seem that Mr. Joyce sold $820,130.09 worth of attachments and rebar during his relationship with Rock Attachment Steel Incorporated. This is in keeping with Mr.

Cull’s testimony that there was no problem with about 75% of the sales that Mr. Joyce negotiated. Based on the numbers depicted in Exhibit RC-25, about 70% of the sales were “good” sales and the balance were wrongfully entered as receivables. PURCHASERS OF REBAR AND ATTACHMENTS [ 29 ] A number of witnesses were called to testify concerning their experiences with Mr. Joyce. [ 30 ] Mr. Eugene Manning, President of J & E Enterprises, testified that he never received an invoice for the purchase of a ditching bucket with a cutting edge for $9,492.00.

He said that he never received the attachment and did not pay for it. The invoice was entered into evidence through Rick Cull as Exhibit RC-19. Mr. Cull testified that he entered this invoice into the financial accounting system as a receivable. He stated that Mr. Joyce later told him that this item was not ordered. [ 31 ] Similarly, Jamie Bursey, a civil contractor operating out of St. John’s under the name of Bursey’s Excavating Development, testified that he requested and received a quote for bucket attachments from Mr. Joyce. With respect to an invoice for the purchase of a bucket, Mr.

Bursey testified that he never received it, that he never placed an order and never paid for it. The invoice was tendered into evidence by Rick Cull as Exhibit RC-20. Mr. Cull entered the invoice into the financial accounting system as a receivable. He stated that Mr. Joyce later told him that the equipment was not shipped. [ 32 ] Exhibits RC-20, RC-21 and RC-22 were entered into evidence through Rick Cull. They were invoices made out to Bursey’s Lawn Care for three different types of bucket attachments for $8,249.00, $8,814.00 and $10,622.00 respectively. The invoices are dated in September and October of 2011.

Rick Cull testified that all three invoices were entered into the financial accounting system as receivables. He testified that Mr. Joyce told him with respect to RC-20 that the product was not shipped. With respect to RC-21, he stated that Mr. Joyce told him the order was cancelled and, with respect to RC-22, Mr. Joyce advised him that the product was not shipped. [ 33 ] Jessica Mandville, a project manager for J.W. Lindsay Enterprises Limited of Mt. Pearl, Newfoundland and Labrador, testified that her firm purchased rebar from SLJ Developments Ltd. in September, 2011 and paid $62,308.20 in respect of same.

There was a Rock Attachments Worldwide invoice of the same date, but for a different amount ($71,596.80) that she had never seen before. Both invoices were tendered into evidence by Rick Cull as RC-3 and RC-2 respectively. Ms. Mandville stated, in cross-examination, that Mr. Joyce was using SLJ Developments Ltd. and Rock Attachment Steel Incorporated interchangeably for the same project. Rick Cull testified that Rock Attachment Steel Incorporated did not receive payment for the J.W. Lindsay Enterprises Limited purchase. He said that he spoke to Mr. Joyce about it, and Mr.

Joyce stated that “it would be okay”. [ 34 ] Ms. Mandville testified that there was another occasion on which J.W. Lindsay Enterprises Limited purchased rebar from Mr. Joyce relating to the Marystown sewage treatment plant. This was a smaller purchase of $6,441.00 that was adjusted to $4,960.00 because some of the rebar that was delivered was the wrong length. [ 35 ] Roxanne Weymouth worked for Bennett’s Construction in Grand Bank as an accounting clerk. They were involved in the reconstruction of a wharf in St. Alban’s, Newfoundland and Labrador. Mr. Joyce provided a bid to supply rebar for the job through SLJ

Developments Ltd. A cheque in the amount of $33,374.55 was paid to SLJ Developments Ltd. Ms. Weymouth stated that sometime after the job was finished Rock Attachment Steel Incorporated called looking for payment. She advised that the amount had been paid and sent a copy of the cancelled cheque in response to the inquiry. [ 36 ] Michael Patrick Anthony testified on behalf of RJD Construction Ltd. He was employed by that company as a senior project manager. They dealt with Mr. Joyce for the supply of rebar for projects in Francois and Arnold’s Cove, both in Newfoundland and Labrador.

The Francois project was worth $14,690.00 and the Arnold’s Cove project was worth $90,400.00. Like Ms. Weymouth, Mr. Anthony received a call sometime after the work was completed with respect to the Francois project. Mr. Anthony sent a copy of the cancelled cheque to verify that payment had been made. [ 37 ] Beulah Short testified. She had been the purchasing manager for Cabot Timber Mart in Shoal Harbour, Newfoundland and Labrador. In May, 2011 she purchased $6,874.75 worth of rebar. More rebar was delivered than she had ordered, but the payment was adjusted to reflect the extra product. Mr.

Joyce testified that the extra rebar had been ordered by Kevin King, the owner of the business, unbeknownst to Ms. Short. No one called Ms. Short at a later date demanding payment of the invoice. [ 38 ] Miguel Finn testified. He is the Chief Financial Officer of Capital Crane. He was shown an invoice, Exhibit RC-14, for $28,476. He testified that he had seen the document before, but that there was no purchase order associated with it, he had not ordered the equipment, did not receive it and did not pay for it. Similarly, he was shown Exhibit RC-15 for a V blade for snow clearing.

He testified that he never ordered the attachment, never received the product and never paid for it. Both invoices were entered as receivables by Rick Cull and written off in 2011. DARRELL BENNETT [ 39 ] Mr. Bennett is the CEO of Marine Contractors, a business that he owns with Glenn Pike. He testified that Rock Attachment Steel Incorporated was a business that he formed with Dean Joyce and Glenn Pike. The relationship had come about because Mr. Joyce had bought buckets from someone in the United States and couldn’t pay for them. He asked Messrs. Bennett and Pike to help him out. [ 40 ] Mr.

Bennett described the agreement that they entered into with Mr. Joyce – that they would go 50/50. Mr. Joyce would receive a commission of 20% for every dollar and all of his expenses. At the end of the year, if he did well, he could buy out Mr. Bennett and Mr. Pike. [ 41 ] The agreement came about because Mr. Joyce had bought attachments. That winter there wasn’t much snow, and he got caught. When the snow came his purchasers backed away from their orders and he found himself in financial trouble. [ 42 ] Mr. Bennett testified that receivables were getting lower than their payables.

He said that’s when they started having trouble with Mr. Joyce and they put the brakes on in September, 2011. [ 43 ] Mr. Bennett said that they were going to pay him a commission of 20% plus expenses. When money came in, he would receive his commission. Mr. Bennett said that Mr. Joyce brought in receipts for hotels, gas and car rentals and was paid in respect of them. This is contrary to the evidence of Rick Cull – who said that sporadic payments in the amount of $1,000 and $2,000 were made to Mr. Joyce – and listed as “miscellaneous” in the company’s books. It is also contrary to the evidence of Mr.

Joyce – who testified that he regularly submitted travel claims, but did not receive what he felt he was entitled to. [ 44 ] Mr. Bennett testified that they met with Mr. Joyce to advise that invoices should come from Rock Attachment Steel Incorporated, and that monies, when paid by customers, should be deposited into the Rock Attachment Steel Incorporated bank account. Mr. Bennett said that Mr. Joyce mostly brought up cheques in SLJ Developments Ltd.’s name. [ 45 ] When Rock Attachment Steel Incorporated was wound up, Mr.

Bennett testified that $300,000.00 worth of inventory was lost and $150,000.00 worth of inventory was left. Mr. Cull valued the remaining inventory at $175,000.00. No one appears to have had tabs on what inventory belonged to the company or where it was located. [ 46 ] In cross-examination Mr. Bennett recalled receiving an email from Mr. Joyce in which he said that the company owed him money. He remembers, before everything blew up and the legal process started, receiving an email from Mr. Joyce that said, “I knows how to do it now – I got the money”. [46] Mr. Gruchy specifically asked Mr.

Bennett the following question in cross-examination: Q. If I told you I was going to lead any evidence there was active disputes going on about who was entitled to what in terms of money what would you say? A. There’s really no dispute. [ 47 ] This exchange will become important because it bears on the Crown’s application to have Mr. Joyce’s evidence given little weight on account of a breach of the rule in Browne v. Dunn (1893), 1893 CanLII 65 (FOREP) , 6 R. 67, (U.K. H.L.) I will discuss this in my analysis later in the decision.

THE EVIDENCE FOR THE DEFENCE William Joyce [ 48 ] William Joyce, Dean Joyce’s father, helped out at the office. He worked there 4 days a week. Sometimes he worked on weekends as well. He prepared expense accounts for Dean Joyce. He put Dean Joyce’s receipts in order and put them in envelopes. He would bring the receipts down to Marine Contractors. He would also deliver items to Marine Contractors given to him by Dean Joyce. At times this included cheques. However, he did not look into the envelopes that Dean Joyce had prepared for delivery to Marine

Contractors. [ 49 ] William Joyce indicated that his son was all over the island, away more than he was at home. [ 50 ] William Joyce said that Dean Joyce complained about not being able to get money. He said that he was doing all the work and wasn’t getting his money. [ 51 ] Close to the end of the relationship, before Christmas of 2011, William Joyce noted that there was a conflict. Dean Joyce had some cheques. Dean Joyce said, “If they don’t pay me they aren’t getting these cheques”. William Joyce said that Dean Joyce was mad. [ 52 ] Mr. William Joyce gave his testimony in a frank, forthright manner.

I had no reason to disbelieve anything that he attested to. Cross-examination did not shake his testimony. I accept all of his evidence and, in particular, I note that he prepared expense claims on behalf of his son and delivered them to Rick Cull. I accept, as well, his testimony that some time before Christmas of 2011, Dean Joyce appeared fed up at not having received money from Rock Attachment Steel Incorporated and stated that he was going to hold onto the cheques in his possession if they did not pay him. Dean William Joyce [ 53 ] Dean Joyce took the stand.

He testified that he is 44 years old and is now working as a project manager. He said that he knew Darrell Bennett and Glenn Pike since he was a boy, practically his whole life. [ 54 ] SLJ Developments Ltd. was Dean Joyce’s company. He had incorporated it in early 2000. He had been in the rebar business since 2004. He sold rebar in Newfoundland and Labrador, Atlantic Canada and in Ontario. He had been involved in sales of rebar for the construction of a stadium, hospital and some other large projects worth over $200 million.

He was involved in all aspects of the rebar business – sales, delivery and actual construction. [ 55 ] As a result of his contacts in the industry, Dean Joyce was able to get a fantastic price for rebar. As a result, he could price it 30% cheaper than his competition and still make a healthy profit. [ 56 ] Mr. Joyce testified that he started Rock Attachments. He noticed a problem in the industry – machinery would be shipped to Newfoundland and Labrador without buckets. Mr. Joyce is a welder and pipe fitter by trade. He used to repair buckets.

He noted that existing buckets were made in such a flimsy way that they would only last 3-4 months because our rock is very abrasive. He had a hand in engineering attachments with the same metal that is used for building tanks. Mr. Joyce said that it became a big selling feature. [ 57 ] He made a deal with John Deere to supply them with buckets. He said that they were coming directly to him for their needs. He did the footwork getting the business up and running and paid for everything. He had contracts and sales when he got involved with Marine Contractors.

He testified that he could bring in a $12,000 bucket for $3,200. He was able to sell the buckets for $6,000.00 to $8,000.00. [ 58 ] Dean Joyce testified that in the first three months they made a lot of money. While the Transactions Report tendered by Rick Cull – Exhibit RC-25 – does not begin to show transactions until August 8, 2008, the opening entry in the Balance column for that date is $634,074.11. So, in the months of May, June, July and part of August Mr. Joyce would have booked that much in business (less whatever amount relates to invoices that were entered by Mr.

Cull but not supported by purchase orders). [ 59 ] Dean Joyce testified that money issues arose from day one. He said that it is expensive to drive all over the Province, and what he was being given for expenses wasn’t covering his costs. Despite that, he kept going with it. [ 60 ] Every week, Mr. Joyce testified, there would be a racket. It got to the point where the fighting was constant. He testified that he wore out at least 3 trucks and a boom truck that he used for transporting rebar. He paid for everything himself – the trucks, insurance and so on. [ 61 ] Mr.

Joyce continued to use SLJ Developments Ltd. because it was a known entity. It had pre-existing customers and a business presence. He testified that the rebar business is known for change orders. There are always variations in prices and pricing. He said that he would invoice when the job was complete. [ 62 ] Mr. Joyce testified that he would pick up the cheques from the customers and would send them up to Rick Cull. Sometimes he endorsed the cheques. Towards the end of the relationship he stopped endorsing the cheques. [ 63 ] Mr.

Joyce said that they were supposed to split 50/50 but he couldn’t even get his expense money. For certain jobs he was buying the rebar because he couldn’t get hold of Darrell Bennett to order the steel. Eventually, he had enough. [ 64 ] Before Christmas he had two or three cheques. He testified that he had a discussion with Darrell Bennett and Rick Cull. He says he told them to give him his expense money or that he would take the cheques. He testified that Darrell Bennett said no. To which he told them that they were done, and goodbye. [ 65 ] Mr.

Joyce testified he paid over $100,000 for steel that he wasn’t reimbursed for. He also paid, at times, for shop drawings. The problem, he said, was getting hold of Darrell Bennett and Rick Cull. [ 66 ] Mr. Joyce admitted that he held back a cheque, exhibited as ME-4, in the amount of $33,374.55. [ 67 ] Mr. Joyce admitted that, sometimes, if he paid for the rebar he would get his money back. [ 68 ] On November 29, 2011 Mr. Joyce caused to be given to Rock Attachment Steel Incorporated the sum of $11,424.30. [ 69 ] On December 16, 2011 Mr.

Joyce caused to be given to Rock Attachment Steel Incorporated the sum of $11,000.00.

[70] On December 20, 2011 Mr. Joyce caused to be given to Rock Attachment Steel Incorporated the sum of $11,000.00. [71] Mr. Joyce explained that it was necessary to keep SLJ Developments Ltd. in existence. Firstly, because Marine Contractorshad to stay out of the business. Most of the rebar customers were competitors of Marine Contractors. Many would not have purchasedsteel if they knew that Marine Contractors was involved. This was corroborated by Darrell Bennett – who gave the example ofcompetitors who would not buy vehicle parts from a business because it leased space from Marine Contractors. Mr.

Bennett verified thatcompetition in the industry is extreme, and I do not doubt that the parties did all in their power to ensure that no one knew of MarineContractors’ interest in Rock Attachment Steel Incorporated. [72] The other reason Mr. Joyce gave for continuing to operate as SLJ Developments Ltd. is that the steel mill would not give thesame deal on the price of rebar that he had negotiated to someone else. [73] Mr. Joyce testified he was owed about $160,000.00 in expenses. The cost of some steel he paid for is included in that figure. It includes hotel and travel costs. [74] Mr.

Joyce acknowledged that Exhibit ME-4, a cheque dated November 20, 2011 was one of the cheques he held back anddeposited to his own account. The cheque was in the amount of $33,374.55 and came from Bennett’s Construction & Supplies (2011)Limited. Rick Cull testified that payment was not received in relation to this transaction. [75] Likewise, Mr. Joyce acknowledged that he held back a cheque from J.W. Lindsay Enterprises Limited dated November 3, 2011in the amount of $62,308.20.

I assume this amount was, eventually, forwarded to Rock Attachment Steel Incorporated because, in RC-25 the amount was not shown as being written off. DEFENCE ARGUES [76] Defence counsel argued that the evidence in this case was complicated, convoluted and indicative of the nature of therelationship between the parties. It was a relationship characterized by confusion and chaos. [77] The defence argued that in order to convict, the Crown must prove beyond a reasonable doubt that Mr. Joyce was dishonest andthat the complainants were deprived. He argued that Mr.

Joyce’s behaviour was neither underhanded nor unscrupulous. He said that ifthe dispute is “out in the open”, it is not dishonest. There may be a valid civil dispute but it is not tantamount to fraud. [78] Mr. Gruchy argued that while cheques were being made out to SLJ Developments Ltd. by customers, the cheques or bankdrafts, were being sent over to Rock Attachment Steel Incorporated during the entire relationship. The nature of that relationship, in Mr.Gruchy’s estimation, must be factored in any credibility analysis conducted by the Court. [79] Mr. Gruchy pointed out that although Mr.

Joyce was characterized by Mr. Bennett as being a commission sales person, nocommission was ever paid to him. Neither was he paid any percentage of the money that he brought in through sales by RockAttachment Steel Incorporated. [80] Mr. Gruchy pointed out that Mr. Bennett testified that Mr. Cull should not have been recording sales without verification thatthere was a purchase order associated with the invoice. [81] Mr. Gruchy pointed out that a document tendered as DB-1, was in the possession of Mr. Bennett for some seven years.

It wasnever disclosed to the police or the Crown until trial – and yet it is a document from Mr. Joyce that purports to set out the basis of therelationship between the parties. The document speaks directly to the issue of whether or not Mr. Joyce was a co-owner of the business. [82] The defence pointed out that the accused told his business partners that he wasn’t being paid, and that he wasn’t going to givethem the money he was holding until they straightened it out.

The defence argued that if the accused openly declares what he is about todo, he is not being dishonest and criminal consequences ought not to flow. [83] The defence position was that Mr. Joyce stated to his partners that he was holding back funds. At the time his expensesremained unpaid. At the time he had not been paid any commission, nor had he been paid any share of profits. [84] The defence argued that there is a paucity of investigation as to actually what was going on. The RCMP did not analyze thecomplainant’s records. The defence says that, as a result, there is no definable loss.

CROWN ARGUES [85] The Crown’s position was that Mr. Joyce was not entitled to retain any of the monies that were generated from sales afterentering into the arrangement with Messrs. Bennett and Pike. Cheques should have been made payable to Rock Attachment SteelIncorporated, and should have been turned into the company for deposit. [86] The Crown invited the Court to discount Mr. Joyce’s testimony concerning holding back cheques in November, 2011 because,in the Crown’s view, Mr. Joyce’s version of what had transpired was not put to the Crown’s witnesses and, as a result the rule in Brownev.

Dunn was offended. [87] The Crown took the position that invoices should not have been created in the name of SLJ Developments Ltd. and, as well, inthe name of Rock Attachment Steel Incorporated. The Crown argued that as a result of Rick Cull assuming that proper sales were beingconsummated, reinforcing steel was ordered by Rock Attachment Steel Incorporated. This supported the Crown’s charge that Mr. Joycedid, by false pretence and with intent to defraud, obtain construction steel of a value in excess of $5,000.00. [88] The Crown directed the Court’s attention to the dicta of the Supreme Court of Canada in R. v.

Théroux, (SCC), [1993] 2 S.C.R. 5 at paragraph 21, which states as follows:

21. Having ventured these general comments on mens rea, I return to the offence of fraud. The prohibited act is deceit, falsehood, or some other dishonest act. The prohibited consequence is depriving another of what is or should be his, which may, as we have seen, consist in merely placing another’s property at risk. The mens rea would then consist in the subjective awareness that one was undertaking a prohibited act (the deceit, falsehood or other dishonest act) which could cause deprivation in the sense of depriving another of property or putting that property at risk. If this is shown, the crime is complete.

The fact that the accused may have hoped the deprivation would not take place, or may have felt there was nothing wrong with what he or she was doing, provides no defence.

To put it another way, following the traditional criminal law principle that the mental state necessary to the offence must be determined by reference to the external acts which constitute the actus of the offence (see Williams, supra, c. 3) the proper focus in determining the mens rea of fraud is to ask whether the accused intentionally committed prohibited acts (deceit, falsehood, or other dishonest act) knowing or desiring the consequences proscribed by the offence (deprivation, including the risk of deprivation).

The personal feeling of the accused about the morality or honesty of the act or its consequences is no more relevant to the analysis than is the accused’s awareness that the particular acts undertaken constitute a criminal offence. [ 89 ] Crown counsel also directed the Court’s attention to the case of R. v. Suzi , 2018 ABPC 130 . In that case the accused cashed a cheque written on the account of a former house mate. The accused took the position that the monies were owing to him on account of the house mate’s share of rent. However, the trial judge held that there was no money owing.

He convicted the accused and found that he engaged in deceit and falsehood by taking possession of a cheque that he knew was not his, and by cashing it without permission. He found that the accused’s actions were secretive and dishonest. DEFENCE REBUTTAL [ 90 ] Counsel for Mr. Joyce took immediate objection to the Crown’s position with respect to the Browne v. Dunn issue. He stated that he had asked Mr. Bennett concerning the monetary dispute in order to conform with the rule in Brown v. Dunn . In addition, he argued that if the Crown had concerns then the appropriate witnesses could have been recalled.

ANALYSIS Browne v. Dunn [ 91 ] In Browne v. Dunn , the Court held that it is not permissible, in cross-examining a party, to refrain from putting to that person a contradictory set of facts if it will be sought, at a later time, to rely upon those contradictory facts. The rule is meant to prevent the ambushing of a witness and, then, deploying that tactic as an aid in destroying the witness’ credibility.

In fairness to the witness, and the trial process, it is appropriate that the witness be given an opportunity to confirm or deny the matter that may be in issue. [ 92 ] Here the Crown argued that this was not done on the issue of whether or not Mr. Joyce had advised Mr. Bennett and Mr. Cull that he had certain cheques in his possession, and that he meant to retain them if he was not going to be paid. [ 93 ] I find, as a fact, that Mr. Gruchy did broach the topic with Mr. Bennett. The verbatim interaction is set out at paragraph 46 of this decision. Mr.

Bennett replied that there was “no dispute” in terms of entitlement to monies. I find that the question put to Mr. Bennett was detailed enough to have alerted Mr. Bennett to the potential that evidence would be led on the issue of entitlement to money. Mr. Bennett chose to give a cursory response, and I find that Mr. Gruchy was not obligated to delve into the issue any further with that witness. [ 94 ] As far as Mr. Bennett is concerned, therefore, I find that there has been no breach of the rule in Browne v. Dunn . [ 95 ] Mr.

Joyce testified that Rick Cull had been privy to the conversation concerning the retention of the cheques. I find that Mr. Cull was not asked, in cross-examination, about the conversation. Technically, therefore, there was a partial breach of the rule in Browne v. Dunn insofar as one of the participants in the conversation was not given an opportunity to provide his evidence concerning same. [ 96 ] However, this is a matter that could have been cured while the trial was still ongoing. Had Crown counsel sought leave to have Mr.

Cull re-attend so that he could be examined about that issue, trial fairness would have demanded it. I am not prepared to make an adverse inference in regards to Mr.

Joyce’s credibility given that one of the witnesses was examined concerning the issue and the other was not recalled by the Crown when he could have been. [ 97 ] I have some preliminary observations concerning the evidence in this case. [ 98 ] Firstly, the investigating officer ought to have obtained the accounting records of Marine Contractors so that the Court could have a full picture of the amounts expended by Marine Contractors in relation to this enterprise and, as well, a full picture of the benefits that Marine Contractors obtained as a result of its dealings with Mr.

Joyce – both as a purchaser of rebar and attachments and as the ultimate beneficiary of the inventory that remained when the business enterprise ceased to be. [ 99 ] Secondly, it is the Crown’s responsibility to lead evidence of deprivation in cases of fraud.

A forensic accounting expert ought to have been employed for the purpose of showing how the complainants were deprived. [ 100 ] According to the conflicting evidence that I heard – the relationship might have been a 50/50 partnership, a 51/49 partnership or a 20% sales commission agreement with an option to split the net proceeds equally. [ 101 ] I find that there was definitely an agreement that Mr. Joyce was to be paid costs incurred by him on account of obtaining sales. This would include meals, automobile expenses, hotel accommodations and related reimbursements.

I find that it would also include the payment for the preparation of shop drawings – which were required on many of the jobs that Mr. Joyce was bidding upon and which, typically, cost about $3,500 per job to prepare. I find that it would also include the reimbursement to Mr. Joyce of any monies paid by him for the rebar. In addition to the viva voce evidence of Mr. Joyce and Mr. Bennett, corroboration for these findings of fact is found in Exhibit DB-1.

[102] I find that Mr. Joyce did advise Mr. Bennett and Mr. Cull that he had cheques in his possession that he had obtained from one oftheir clients, and that he intended to retain them if he was not paid what was owed to him. [103] I find that Mr. Joyce, from time to time, through the agency of his father, submitted travel claims but that these were largelyignored by Mr. Bennett. I find that Mr. Bennett directed Mr. Cull to pay Mr. Joyce a thousand here, two thousand there, on account ofexpenses but that there was never a payment for the exact amounts that were claimed. No evidence was led as to what Mr.

Joyce’s totalclaims amounted to, and this could have easily been done because the claims were submitted to Mr. Cull directly. [104] I find it odd that the payments that were recorded by Mr. Cull on account of travel (the thousand here and there I earliermentioned) were characterized under “Miscellaneous” in the company’s records. Mr. Joyce was never paid a sales commission. Therewere never any deductions made on account of payroll taxes. From an accounting perspective it would appear that Mr. Joyce was notemployed by the company. Which begs the question, what was his relationship?

THE ONUS AND STANDARD OF PROOF [105] Every accused person is cloaked in a presumption of innocence that cannot be dispelled until the Crown has proved, beyond areasonable doubt, that the accused person committed the crimes with which s/he is charged. That onus never shifts from the Crown tothe accused person. [106] In R. v. Lifchus, (SCC), [1997] 3 S.C.R. 320, the Supreme Court of Canada held that proof beyond areasonable doubt “does not involve proof to an absolute certainty, it is not proof beyond any doubt nor is it an imaginary or frivolousdoubt”. [107] In R. v.

Starr, 2000 SCC 40 the Supreme Court of Canada pointed out that the Crown’s burden of proof lies “much closer toabsolute certainty than to a balance of probabilities”. [108] An accused person is never obligated to take the stand, and has the absolute right to remain silent and call no evidence. Noadverse inference can be drawn against the accused person if s/he chooses to exercise the right to silence. And the burden remains on theCrown to prove each element of the offence beyond a reasonable doubt.

However, when an accused person elects to waive his/her rightto remain silent and testifies, the Supreme Court of Canada, in R. v. W. (D.), (SCC), [1991] 1 S.C.R. 742 has providedguidance to trial judges. The Supreme Court of Canada has indicated that where the credibility of an accused person is in issue, the ruleof reasonable doubt applies to the issue of credibility. [109] The Supreme Court of Canada, in R. v. W. (D.), has mandated a three stage analysis: 1. If you believe the evidence of the accused, you must acquit. 2.

If you do not believe the evidence of the accused, but are left in reasonable doubt by it, you must acquit. 3. If you do not believe the accused, and are not left in reasonable doubt by his/her evidence, then you must still determine whetheryou are left in reasonable doubt by the evidence that you do accept. [110] In the third step of the R. v. W. (D.) analysis, the trial judge must consider all of the evidence presented to determine whether theaccused’s guilt has been proven beyond a reasonable doubt. [111] The Newfoundland and Labrador Court of Appeal re-stated the rule in R. v. W. (D.) in R. v.

Best, 2016 NLCA 10 at paragraph 7. The Court of Appeal indicated that it is necessary for the judge to consider whether or not s/he believes the accused and, if s/he does notbelieve the accused, then whether any of the accused’s evidence leaves her or him with any reasonable doubt about the accused’s guilt. If, after these considerations, there is no reasonable doubt then the judge must still ask whether s/he is convinced of the accused’s guilton the basis of the evidence that is accepted. [112] Mr. Joyce was fair and forthright in his testimony. I had no reason to disbelieve any of his evidence.

I believe that he felt that hewas owed a substantial sum of money, and that Mr. Bennett, in particular, was not treating his requests for payment fairly. I find somecorroboration for this in the evidence of both Mr. Cull and Mr. Bennett. Mr. Cull testified that he would pay a thousand here or there toMr. Joyce on Mr. Bennett’s instructions. Mr. Bennett, however, testified that the agreement between the parties was that Mr. Joycewould be paid his expenses and a 20% commission on sales. [113] According to my calculations (see paragraph 28 of my decision) Mr.

Joyce would have been owed $164,026.02 (commissioncalculated at 20% of gross) at the time that he advised Mr. Bennett and Mr. Cull that he was going to withhold those cheques until hereceived his expense monies. Mr. Joyce testified that he was owed about $160,000 in expenses at the time that he withheld the cheques. If he had any entitlement to commission at the rate specified by Mr. Bennett, the amount owed to him at the time would be about$324,000. [114] I do not doubt for a moment that the parties may have countervailing civil actions against one another. I cannot, however, cometo the conclusion that Mr.

Joyce was being underhanded or sneaky, or that he was engaging in some sort of subterfuge that wascalculated to deprive the complainant of property. [115] In R. v. Théroux the accused made false representations that had the effect of enticing the complainants to pay deposits forconstruction. Mr. Théroux represented that the situation was of a certain character, when, in reality, it was not.

[ 116 ] That is not the situation here. Mr. Joyce stated that he was holding on to certain cheques on account of what was owing to him. He did not deal with the cheques on the sly without notice to the complainants – he plainly told them. The value of the cheques was far less than what the complainants owed – even by their own calculations – and not taking into account Mr. Joyce’s assertion that a similar amount was owing to him on account of unpaid expenses. [ 117 ] According to R. v. Théroux at paragraph 18 , the test for mens rea in relation to a charge of fraud is subjective.

The Court must ask whether the accused person subjectively appreciated the consequences of the prohibited act – at least as a possibility. The Court must look to the accused’s intention and the facts as the accused believed them to be. [ 118 ] Did the accused, in this case, deprive the complainant of what rightfully belonged to it? I cannot see how this situation is any different than a solicitor enforcing a lien for unpaid accounts in respect of monies belonging to a client that come within the solicitor’s possession. [ 119 ] The prohibited act is deceit, falsehood, or some other dishonest act.

Is it appropriate for Mr. Joyce to keep $50,000 of the complainant’s money, after telling the complainant that he intends to do so, when he is owed, perhaps, $324,000 by the complainant? There would be no deprivation to the complainant in this scenario since, after retaining the funds, the complainant would still owe Mr. Joyce $274,000. Under this analysis, the mens rea of fraud is not established since there is no deprivation of the complainant. [ 120 ] There were a number of instances where accounts were rendered in the name of the accused’s company, SLJ Developments Ltd., monies collected by Mr.

Joyce from the customers, deposited to the account of SLJ Developments Ltd. or, in other instances, the cheques sent to Mr. Cull to deposit to the credit of Rock Attachment Steel Incorporated. Sometimes, Mr. Joyce would deposit into his company’s account and provide a bank draft in favour of Rock Attachment Steel Incorporated. All of these dealings could certainly be characterized as sloppy bookkeeping. However, I find that in none of them was there deceit, falsehood or some other dishonest act.

SLJ Developments Ltd. was kept going for the purpose of ensuring that customers did not associate Rock Attachment Steel Incorporated with Marine Contractors and for the purpose of retaining substantially better than competitive pricing from its supplier. Neither of these are reasons for imputing that the actions were taken for deceptive purposes or in furtherance of any dishonest act. [ 121 ] Count 2 of the Indictment charged that Mr.

Joyce did by false pretences, and with intent to defraud, obtain from Rock Attachment Steel Incorporated construction rebar of a value exceeding $5,000.00. [ 122 ] Although the Court heard evidence of numerous transactions, some consummated and others not consummated, there was no suggestion in any of the evidence that construction rebar was obtained for any reason other than the satisfaction of orders that were placed by Mr. Joyce and which Mr. Bennett was fully apprised of. I say this because Mr. Bennett did all of the ordering of the rebar.

He did not order rebar unless he was in receipt of a purchase order from the ultimate customer. Every order was, therefore, earmarked for a particular customer with the knowledge of Mr.

Bennett and, in fact, was delivered to each of the customers in question . [ 123 ] While the parties may have had their disagreements about how business should be conducted, how it should be accounted for and how sales needed to be controlled, I find that there was a plausible reason why SLJ Developments Ltd. needed to continue – and it was not for the purpose of taking unfair advantage of Marine Contractors or Rock Attachment Steel Incorporated. Accordingly, I find that Mr.

Joyce did not obtain construction rebar from Rock Attachment Steel Incorporated by false pretences. [ 124 ] Accordingly, both counts against Mr. Joyce are dismissed. _____________________________ Vikas Khaladkar Justice