Derek Riesberry Appellant v. Her Majesty The Queen, 2015 SCC 65

SUPREME COURT OF CANADA Citation: R. v. Riesberry, 2015 SCC 65, [2015] 3 S.C.R. 1167 Date: 20151218 Docket: 36179 Between: Derek Riesberry Appellant and Her Majesty The Queen Respondent Coram: Cromwell, Moldaver, Karakatsanis, Wagner, Gascon, Côté and Brown JJ. Reasons for Judgment: (paras. 1 to 34) Cromwell J. (Moldaver, Karakatsanis, Wagner, Gascon, Côté and Brown JJ. concurring) Appeal heard and Judgment rendered: October 13, 2015 Reasons delivered: December 18, 2015 R. v. Riesberry, 2015 SCC 65, [2015] 3 S.C.R. 1167 Derek Riesberry Appellant v. Her Majesty The Queen Respondent Indexed as: R. v. Riesberry 2015 SCC 65 File No.: 36179. Hearing and judgment: October 13, 2015.

Reasons delivered: December 18, 2015. Present: Cromwell, Moldaver, Karakatsanis, Wagner, Gascon, Côté and Brown JJ. on appeal from the court of appeal for ontario Criminal law — Offences — Elements of offence — Cheating at play — Fraud — Accused attempted to rig horse races bydrugging horses — Whether horse race constituted a game for purposes of offence of cheating at play — Whether accused’s conductconstituted cheating at play or fraud — Criminal Code, R.S.C. 1985, c. C-46, ss. 197(1) “game”, 209, 380(1). R tried to rig two horse races.

He was caught drugging one horse and trying to sneak syringes with drugs into the track forthe purpose of doing the same thing to another. Bets in excess of $5,000 had been placed on both races. R was charged with cheatingwhile playing a game, defrauding the public, and attempting to commit the same offences. At trial, he was acquitted. The Court ofAppeal allowed an appeal and set aside the acquittals. It ordered a new trial on the cheating counts and entered convictions on the fraudcounts. Held: The appeal should be dismissed.

The Court of Appeal was correct to order a new trial on the charges of cheating while playing a game. “Game” is defined as“a game of chance or mixed chance and skill” in s. 197(1) of the Criminal Code. The Crown had to establish that a horse race is a gamewith a systematic resort to chance to determine outcomes. There was evidence that post position is determined at random and that certainpost positions are more advantageous than others.

The trial judge failed to consider this evidence upon which a trier of fact could findthat there was systematic resort to chance which made the race a game of mixed chance and skill. Whether the evidence actuallyestablishes this will be for the trier of fact at the new trial to determine. Fraud consists of dishonest conduct that results in at least a risk of deprivation to the victim. Fraudulent conduct for thepurposes of a fraud prosecution is not limited to deception, such as misrepresentations of fact. Rather, fraud requires proof of deceit,falsehood or other fraudulent means.

The term “other fraudulent means” encompasses all other means which can properly be stigmatizedas dishonest. Where the alleged fraudulent act is not in the nature of deceit or falsehood, the causal link between the dishonest conductand the deprivation may not depend on showing that the victim relied on or was induced to act by the fraudulent act. R’s conductconstituted other fraudulent means because it can properly be stigmatized as dishonest conduct that caused a risk of deprivation to thebetting public.

There is a direct causal relationship between R’s conduct and a risk of financial deprivation to the betting public. The trialjudge erred in law by finding that the betting public was not put at risk of deprivation and that any risk of deprivation was too remote. The trial judge made the necessary findings of fact to support the fraud convictions entered by the Court of Appeal,including in relation to both required aspects of the required mens rea of fraud.

The trial judge found that R knew that his acts weredishonest and, in the context of the cheating while playing a game charges, that he knew that his dishonest conduct put bettors at risk ofdeprivation. That, after all, is what cheating is. Cases Cited Distinguished: Harless v. United States, 1 Morris 169 (1843); referred to: Ross, Banks and Dyson v. The Queen, (SCC), [1968] S.C.R. 786; R. v. Graveline, 2006 SCC 16, [2006] 1 S.C.R. 609; R. v. Théroux, (SCC), [1993]2 S.C.R. 5; R. v. Zlatic, (SCC), [1993] 2 S.C.R. 29; R. v.

Olan, (SCC), [1978] 2 S.C.R. 1175; Scott v.Metropolitan Police Commissioner, [1975] A.C. 819; Vézina and Côté v. The Queen, (SCC), [1986] 1 S.C.R. 2; R. v.Cassidy, (SCC), [1989] 2 S.C.R. 345. Statutes and Regulations Cited Criminal Code, R.S.C. 1985, c. C-46, ss. 197(1) “game”, 209, 380(1). Ontario. Racing Commission. Rules of Standardbred Racing, 2008, r. 10.01. APPEAL from a judgment of the Ontario Court of Appeal (Simmons, Rouleau and Tulloch JJ.A.), 2014 ONCA 744, 122O.R. (3d) 594, 316 C.C.C. (3d) 527, 325 O.A.C. 351, [2014] O.J.

No. 5094 (QL), 2014 CarswellOnt 14907 (WL Can.), setting aside theaccused’s acquittals and ordering a new trial. Appeal dismissed. Gregory Lafontaine, for the appellant. Michael Kelly and Matthew Asma, for the respondent. The judgment of the Court was delivered by Cromwell J. — I. Introduction [1] This appeal was heard and dismissed, with reasons to follow, on October 13, 2015. These are the reasons. [2] The appellant, Mr. Riesberry, tried to rig two horse races by drugging two horses. The question at the bottom ofthis appeal is whether the provisions of the Criminal Code, R.S.C. 1985, c.

C-46, under which he was charged can apply to this conduct. [3] Mr. Riesberry was a licensed trainer of Standardbred horses. He was caught on video drugging one horse, andcaught trying to sneak syringes with drugs into the track for the purpose of doing the same thing to another. For the drugging caught ontape, he was charged with cheating while playing a game (a horse race) with the intent to defraud the public wagering money on its

outcome (s. 209 of the Criminal Code) and with defrauding the public of money wagered on the outcome of a horse race (s. 380(1)). Fortrying to sneak the drugs into the track, he was charged with attempting to commit the same offences. At trial, he was acquitted.However, the Ontario Court of Appeal allowed the Crown’s appeal, set aside the acquittals on all four counts, ordered a new trial on thecheating and attempted cheating counts (“cheating counts”) and entered convictions on the fraud and attempted fraud counts (“fraudcounts”): 2014 ONCA 744, 122 O.R. (3d) 594. [4] Mr.

Riesberry appeals the fraud convictions as of right and the order for a new trial by leave of the Court. There arefour main issues before us, two concern the cheating counts and two the fraud counts. [5] With respect to the cheating counts, the main questions are (

i) whether the trial judge made a legal error in hisinterpretation of what constitutes a “game”; and (ii) whether there was any evidence that could establish that a horse race is a “game” asdefined in s. 197 of the Criminal Code for these offences. I agree with the Court of Appeal that the trial judge erred in this respect andthat there was evidence that could establish that a horse race is a game as defined for these offences. [6] The two issues in relation to the fraud convictions are (

i) whether the Court of Appeal was wrong to reverse thetrial judge’s finding that the betting public was not put at risk by his conduct; and (ii) whether, even if the trial judge made that error, theCourt of Appeal was wrong to have entered convictions rather than ordering a new trial. I also agree with the Court of Appeal’sdisposition of these issues. II. Analysis A. Brief Overview of the Facts [7] At trial, the judge found that, before a race, Mr. Riesberry injected a horse, “Everyone’s Fantasy”, with epinephrineand/or clenbuterol for the purpose of enhancing the horse’s performance in the race.

The horse participated in the race and finished sixth.The trial judge also found that, on a later occasion, Mr. Riesberry tried to bring a syringe loaded with prohibited drugs onto racewayproperty at which another horse, “Good Long Life”, was to race later that day. Mr. Riesberry was arrested and the horse was scratchedfrom the race. The trial judge found that Mr. Riesberry, as a licensed trainer, was bound by rules barring possession of syringes and useof the drugs in question in order to enhance performance: Ontario Racing Commission, Rules of Standardbred Racing, 2008, r. 10.01(a)and (b).

The trial judge also found that, in both instances, Mr. Riesberry had breached those rules and attempted to create an unfairadvantage for the horses in the race. Nonetheless, the trial judge acquitted on all charges. [8] It was undisputed on appeal that bets in excess of $5,000 had been placed on both races and that the trial judgeerred in saying otherwise: Court of Appeal reasons, at para. 18. B.

The Cheating at Play Convictions [9] With respect to the cheating while playing a game charges, the trial judge concluded that a horse race is not a gameas defined in the Criminal Code and therefore the charges were not made out. The first issue is whether the trial judge erred in law in hislegal

interpretation of what constitutes a “game” for the purposes of this offence. [10] The charges against Mr. Riesberry arise under s. 209 of the Criminal Code which provides that everyone is guilty ofan offence who, “with intent to defraud any person, cheats while playing a game”. “Game” is defined as “a game of chance or mixedchance and skill”: s. 197(1). It follows that the Crown had to establish that a horse race is a game with at least some element of chance.The trial judge relied on the U.S. case of Harless v.

United States, 1 Morris 169 (Iowa 1843), to conclude that a horse race is a game ofpure skill. [11] It is somewhat unclear to what extent the trial judge relied on this authority as stating the law in Canada. However,to the extent that he did so, he made a legal error. The statute considered by the U.S. court divided games into only two categories, gamesof chance and games of skill. That case, therefore, did not address a point that must be addressed under the Criminal Code. That point iswhether horse racing is a game of mixed chance and skill.

The applicable Canadian law on this point is found in Ross, Banks and Dysonv. The Queen, (SCC), [1968] S.C.R. 786. There must be a “systematic resort to chance” to determine outcomes, notmerely the “unpredictables that may occasionally defeat skill”: p. 791. [12] Even if we were to accept that the trial judge was alive to this difference between the law as set out in Harless andCanadian law, he nonetheless erred by failing to consider evidence in the record upon which a trier of fact could find that there wassystematic resort to chance which made the race a game of mixed chance and skill.

I therefore conclude that the trial judge erred in lawon this aspect of the case. [13] The Court of Appeal’s finding of a legal error at trial does not, on its own, justify setting aside the acquittals andordering a new trial. A new trial may be ordered only if the Crown satisfies the appellate court that the “error (or errors) of the trialjudge might reasonably be thought, in the concrete reality of the case at hand, to have had a material bearing on the acquittal”: R. v.Graveline, 2006 SCC 16, [2006] 1 S.C.R. 609, at para. 14, per Fish J. for the majority.

Whether the Crown has satisfied this burden isthe second issue. The answer depends in this case on whether there is in the trial record any evidence which could support a finding thathorse racing has a sufficient element of chance to be considered a game of mixed chance and skill. Mr. Riesberry claims that there is notwhile the Crown says that there is. [14] I agree with the Court of Appeal that the record at trial contains evidence upon which horse racing, in the presentcircumstances, could be found to involve a systematic resort to chance.

There was evidence that post position is determined by acomputerized random post position generator and that certain post positions are more advantageous than others: Court of Appealreasons, at para. 41. It follows that the Court of Appeal was correct to order a new trial on these charges. Of course, whether theevidence actually establishes this will be for the trier of fact at the new trial to determine. [15] Like the Court of Appeal, I would not address on appeal the Crown’s highly fact-driven alternative position that Mr.

Riesberry’s conduct converted what would otherwise be a game of pure skill into one of mixed chance and skill. [16] To conclude on the cheating counts, the Court of Appeal correctly ordered a new trial on these charges. C. The Fraud Charges [17] Fraud consists of dishonest conduct that results in at least a risk of deprivation to the victim. The trial judge foundthat the Crown had failed to prove that the betting public was at risk of deprivation due to Mr. Riesberry’s conduct. The trial judge alsofound that, even if the Crown had proved deprivation, there was no proof of any causal connection between Mr.

Riesberry’s actions andany risk of loss of the money wagered by the betting public. [18] The Court of Appeal allowed the Crown’s appeal from the acquittals. On the fraud charges, the court identified anumber of legal errors such that the acquittals had to be set aside. The court also concluded that if the trial judge had not made theselegal errors, he would have convicted Mr. Riesberry of both fraud counts. [19] Mr. Riesberry submits first that his conduct did not put the betting public at risk of deprivation and that any risk ofdeprivation was too remote.

His second submission is that, even if the trial judge was wrong about this, the Court of Appeal should nothave entered convictions on the fraud charges, but ought instead to have ordered a new trial. I will address these points in turn.

(1) Did Mr. Riesberry’s Fraudulent Acts Cause a Risk of Deprivation That Was Not Too Remote? [20] Like virtually all offences, fraud consists of two main components, the prohibited act (actus reus) and the requiredstate of mind (mens rea). Mr. Riesberry’s submission focuses on one of the two aspects of the actus reus. Those two aspects are: 1. . . .

an act of deceit, a falsehood or some other fraudulent means; and 2. deprivation caused by the prohibited act, which may consist in actual loss or the placing of the victim’s pecuniary interests at risk. (R. v. Théroux, (SCC), [1993] 2 S.C.R. 5, at p. 20; R. v. Zlatic, (SCC), [1993] 2 S.C.R. 29, at p. 43) [21] The issue here concerns the aspect of deprivation. Mr. Riesberry contends that there was no evidence that hisfraudulent conduct caused any risk of deprivation or that at least any such risk was too remote from his conduct.

He submits that theCrown did not establish that anyone betting on the race had been induced to bet by, or would not have bet but for, his fraudulent conduct. [22] I cannot accept this position. Contrary to Mr. Riesberry’s contention, proof of fraud does not always depend onshowing that the alleged victim relied on the fraudulent conduct or was induced by it to act to his or her detriment. What is required in allcases is proof that there is a sufficient causal connection between the fraudulent act and the victim’s risk of deprivation.

In some cases,this causal link may be established by showing that the victim of the fraud acted to his or her detriment as a result of relying on or beinginduced to act by the accused’s fraudulent conduct. But this is not the only way the causal link may be established. [23] We should first be clear about what Mr. Riesberry’s fraudulent conduct was before turning to the question ofwhether it caused a risk of deprivation. Fraudulent conduct for the purposes of a fraud prosecution is not limited to deception, such asdeception by misrepresentations of fact.

Rather, fraud requires proof of “deceit, falsehood or other fraudulent means”: s. 380(1). Theterm “other fraudulent means” encompasses “all other means which can properly be stigmatized as dishonest”: R. v. Olan, (SCC), [1978] 2 S.C.R. 1175, at p. 1180. The House of Lords made the same point in Scott v. Metropolitan Police Commissioner, [1975]A.C. 819, a case approved by the Court in Olan (p. 1181).

Fraud, according to Viscount Dilhorne in Scott, may consist of depriving “aperson dishonestly of something which is his or of something to which he is or would or might but for the perpetration of the fraud beentitled”: p. 839.

And as Lord Diplock said, the fraudulent means “need not involve fraudulent misrepresentation such as is needed toconstitute the civil tort of deceit”: ibid., at p. 841. [24] It follows that where the alleged fraudulent act is not in the nature of deceit or falsehood, such as a misrepresentationof fact, the causal link between the dishonest conduct and the deprivation may not depend on showing that the victim relied on or wasinduced to act by the fraudulent act. This is such a case. [25] Mr. Riesberry injected and attempted to inject the racehorses with performance-enhancing substances.

The use ofsuch drugs is prohibited and trainers such as Mr. Riesberry are prohibited even from possessing loaded syringes at a racetrack. Thisconduct constituted “other fraudulent means” because in the highly regulated setting in which he acted, that conduct can “properly bestigmatized as dishonest”: Olan, at p. 1180. He carried out these dishonest acts for the purpose of affecting the outcome of two horseraces on which members of the public placed bets. His dishonest acts, therefore, were intended to and in one case actually did result inthe possibility that a horse that might otherwise have won would not.

The conduct therefore caused a risk of deprivation to the bettingpublic: it created the risk of betting on a horse that, but for Mr. Riesberry’s dishonest acts, might have won and led to a payout to thepersons betting on that horse. To return to Viscount Dilhorne’s words in Scott, Mr. Riesberry’s dishonest conduct created a risk thatbettors would be deprived dishonestly of something which, but for the dishonest act, they might have obtained. [26] There is a direct causal relationship between Mr. Riesberry’s dishonest acts and the risk of financial deprivation tothe betting public.

Simply put, a rigged race creates a risk of prejudice to the economic interests of bettors. Provided that a causal linkexists, the absence of inducement or reliance is irrelevant. I agree with the Court of Appeal that Mr. Riesberry’s reliance on Vézina andCôté v. The Queen, (SCC), [1986] 1 S.C.R. 2, is misplaced. That case made it clear that [f]raud consists of being dishonest for the purpose of obtaining an advantage and which results in prejudice or a risk of prejudice to

someone’s “property, money or valuable security”. There is no need to target a victim . . . and the victim may not be ascertained. [p. 19] [27] This statement covers what Mr. Riesberry did. [28] I conclude that the trial judge erred in law by finding that the betting public was not put at risk of deprivation by Mr.Riesberry’s dishonest acts and that any risk of deprivation was too remote.

(2) Was the Court of Appeal Wrong to Enter Convictions Rather Than Order a New Trial? [29] Mr. Riesberry submits that the Court of Appeal erred by entering convictions because the trial judge had not madeall of the necessary findings of fact to support those convictions: see R. v. Cassidy, (SCC), [1989] 2 S.C.R. 345, at pp.354-55. These submissions focus on what Mr.

Riesberry contends is the absence of the necessary findings of fact in relation to themental element or mens rea of fraud. [30] The mental element of fraud consists of two states of mind: 1. subjective knowledge of the prohibited act; and 2. subjective knowledge that the prohibited act could have as a consequence the deprivation of another (which deprivation may consistin knowledge that the victim’s pecuniary interests are put at risk). (Théroux, at p. 20; Zlatic, at p. 43) [31] Mr.

Riesberry’s position is that the trial judge, having dismissed the fraud charges on the basis of no proof of theactus reus, did not go on to make findings in relation to these two aspects of the required mens rea. However, I agree with the Court ofAppeal that the trial judge in fact did make the necessary findings. [32] There can be no doubt that the trial judge found that Mr. Riesberry knew that his acts were dishonest, which is thefirst aspect of the mens rea. The trial judge found that his conduct was for the purpose of enhancing his horses’ performances, not forany legitimate medical purpose.

As for the second aspect, the trial judge held, in his analysis of the same record in the context of thecheating while playing a game charges, that Mr. Riesberry’s conduct amounted to cheating. In other words, he intended to create anunfair advantage for his horses in their races. This is a finding of fact that Mr. Riesberry knew that his dishonest conduct put bettors atrisk of deprivation. That, after all, is what cheating is.

(3) Conclusion [33] In my view, Mr. Riesberry’s submissions in relation to the fraud charges cannot be accepted. III. Disposition [34] As announced at the conclusion of the hearing of the appeal, the appeal is dismissed. Appeal dismissed. Solicitors for the appellant: Lafontaine & Associates, Toronto. Solicitor for the respondent: Attorney General of Ontario, Toronto.