R. v. Duffy, 2016 ONCJ 220

CITATION: R. v. Duffy, 2016 ONCJ 220 ONTARIO COURT OF JUSTICE BETWEEN: HER MAJESTY THE QUEEN — AND — MICHAEL DENNIS DUFFY Before Justice Charles H.

Vaillancourt Heard on April 7-10, 13- 17, 20-24, 27-29, May 4-8, June 1-5, 8-12, 15-17, August 12-14, 17-21, 24-25, November 19-20, 23, 25, 27, 30, December 7-11, 14-18, 2015 and February 22-23, 2016 Reasons for Judgment released on April 21, 2016 Mark Holmes and Jason Neubauer ................................................................. counsel for the Crown Donald Bayne and Jon Doody ..................................... counsel for the accused Michael Dennis Duffy VAILLANCOURT J.: [1] Michael Dennis Duffy entered pleas of not guilty to thirty-one criminal charges related to breach of trust allegations,fraudulent practices, and accepting a bribe.

For the sake of expediency, the counts have been grouped into the various headings and Ipropose to deal with each specific category separately. [2] Prior to embarking on a count by count analysis of this case, it is worthwhile to harken back to some basic principlesthat are at play in all criminal proceedings.

PRESUMPTION OF INNOCENCE [3] I would like to relate an interesting encounter that I experienced near the commencement of this trial that demonstratesthe difference between the legal presumption of innocence and the application of that presumption by many citizens. [4] I was returning to the courthouse after a lunch break when I heard a man who was soliciting funds from passersby say,“Sir, sir.” I stopped and began to check out my monetary situation. However, the stranger did not ask me for a financial contribution. Instead, he asked me if I was connected with the Duffy trial. I advised him that I was.

He then inquired whether I was counsel. Iadvised him that I was not but I did tell him that I was the judge hearing the case.

Without missing a beat, my new found friendenthusiastically stated, “Throw him in jail.” [5] The aforementioned exchange highlights two important aspects of Senator Duffy’s trial. [6] Firstly, the scenario illustrates the public awareness and interest in these proceedings. [7] Secondly and more importantly, the exchange draws attention to the overarching touchstone principle of criminal law inCanada, namely, that everyone is presumed innocent until the Crown proves them guilty beyond a reasonable doubt.

Although, thestranger drew my attention to the principle, his enthusiastic response highlighted a contrary position to the presumption of innocence. Ithink it is fair to say that many people may share the belief that once someone is charged with a criminal offence they are guilty. This isnot the law of the land. [8] Chief Justice Dickson of the Supreme Court of Canada in R. v. Oakes, (SCC), [1986] 1 S.C.R. 103,[1986] S.C. J. No. 7 wrote about the presumption of innocence and s. 11(

d) of the Charter commencing at paragraph 27: [27]

Section 11(

d) of the Charter constitutionally entrenches the presumption of innocence as part of the supreme law of Canada. Forease of reference, I set out the provision again: 11. Any person charged with an offence has the right … (

d) to be presumed innocent until proven guilty according to law in a fair and public hearing by an independent and impartial tribunal. [28] To interpret the meaning of s. 11(d), it is important to adopt a purposive approach. As this Court has stated in R. v. Big M Drug MartLtd., (SCC), [1985] 1 S.C.R. 295, at p. 344:

The meaning of a right or freedom guaranteed by the Charter was to be ascertained by an analysis of the purpose of such a guarantee; itwas to be understood, in other words, in the light of the interests it was meant to protect.

In my view this analysis is to be undertaken, and the purpose of the right or freedom in question is to be sought by reference to thecharacter and the larger objects of the Charter itself, to the language chosen to articulate the specific right or freedom, to the historicalorigins of the concepts enshrined, and where applicable, to the meaning and purpose of the other specific rights and freedoms ….

To identify the underlying purpose of the Charter right in question, therefore, it is important to begin by understanding the cardinalvalues it embodies. [29] The principle of innocence is a hallowed principle lying at the very heart of criminal law. Although protected expressly in s. 11(

d) ofthe Charter, the presumption of innocence is referable and integral to the general protection of life, liberty and security of the personcontained in s. 7 of the Charter (see Re B.C. Motor Vehicle Act, (SCC), [1985] 2 S.C.R. 486, per Lamer J.) Thepresumption of innocence protects the fundamental liberty and human dignity of any and every person accused by the State of criminalconduct.

An individual charged with a criminal offence faces grave social and personal consequences, including potential loss ofphysical liberty, subjection to social stigma and ostracism from the community, as well as other and social, psychological and economicharms. In light of the gravity of the consequences, the presumption of innocence is crucial. It ensures that until the State proves anaccused’s guilt beyond all reasonable doubt, he or she is innocent.

This is essential in a society committed to fairness and social justice.The presumption of innocence confirms our faith in humankind; it reflects our belief that individuals are decent and law-abidingmembers of the community until proven otherwise. [30] The presumption of innocence has enjoyed longstanding recognition at common law. In the leading case, Woolmington v.

Directorof Public Prosecutions, [1935] A.C. 462 (H.L.), Viscount Sankey wrote at pp. 481-482: Throughout the web of the English Criminal Law one golden thread is always to be seen, that it is the duty of the prosecution to provethe prisoner’s guilt subject to what I have already said as to the defence of insanity and subject also to any statutory exception.

If, at theend of and on the whole of the case, there is a reasonable doubt, created by the evidence given by either the prosecution or the prisoner,as to whether the prisoner killed the deceased with a malicious intention, the prosecution has not made out the case and the prisoner isentitled to an acquittal. No matter what the charge or where the trial, the principle that the prosecution must prove the guilt of theprisoner is part of the common law of England and no attempt to whittle it down can be entertained.

Subsequent Canadian cases have cited the Woolmington principle with approval (see, for example, Manchuk v. The King, (SCC), [1938] S.C.R. 341, at p. 349; R. v. City of Sault Ste Marie, (SCC), [1978] 2 S.C.R. 1299, at p. 1316). PRINCIPLES RELATING TO THE ISSUE OF REASONABLE DOUBT, BURDEN OF PROOF AND CREDIBILITY [9] In R. v.

Lifchus, (SCC), [1997] 3 S.C.R. 320, Cory J. at paragraph 27 observed that: First, it must be made clear to the jury that the standard of proof beyond a reasonable doubt is vitally important since it is inextricablylinked to that basic premise which is fundamental to all criminal trials: the presumption of innocence. The two concepts are forever asclosely linked as Romeo and Juliet or Oberon with Titania and they must be presented together as a unit.

If the presumption of innocenceis the golden thread of criminal justice then proof beyond a reasonable doubt is the silver and these two threads are forever intertwined inthe fabric of criminal law. Jurors must be reminded that the burden of proving beyond a reasonable doubt that the accused committed thecrime rests with the prosecution throughout the trial and never shifts to the accused. [10] In R. v.

W.(D.), (SCC), [1991] 1 S.C.R. 742, at paragraphs 27 and 28, the Court noted that: [27] In a case where credibility is important, the trial judge must instruct the jury that the rule of reasonable doubt applies to that issue. The trial judge should instruct the jury that they need not firmly believe or disbelieve any witness or set of witnesses. Specifically, thetrial judge is required to instruct the jury that they must acquit the accused in two situations. First, if they believe the accused.

Second,if they do not believe the accused’s evidence but still have a reasonable doubt as to his guilt after considering the accused’s evidence inthe context of the evidence as a whole. See R. v. Challice (1979), (ON CA), 45 C.C.C. (2d) 546 (Ont. C.A.), approvedin R. v. Morin, (SCC), [1988] 2 S.C.R. 345 at p. 357. [28] Ideally, the appropriate instructions on the issue of credibility should be given, not only during the main charge, but on therecharge.

A trial judge might well instruct the jury on the question of credibility along these lines: First, if you believe the evidence of the accused, obviously you must acquit. Second, if you do not believe the testimony of the accused but are left in reasonable doubt by it, you must acquit. Third, even if you are not left in doubt by the evidence of the accused, you must ask yourself whether, on the basis of the evidence by theevidence which you do accept, you are convinced beyond a reasonable doubt by that evidence of the guilt of the accused. [11] Justice Iacobucci, writing for the majority, in R. v.

Starr, 2000 SCC 40 , [2000] 2 S.C.R. 144 noted at para. 242that: In my view, an effective way to define the reasonable doubt standard for a jury is to explain that it falls much closer to absolute certaintythan to proof on a balance of probabilities. As stated in Lifchus, a trial judge is required to explain that something more than probableguilt is required, in order for the jury to convict. Both of these alternative standards are fairly and easily comprehensible. It will be ofgreat assistance for a jury if the trial judge situates the reasonable doubt standard approximately between these two standards.

APPROACHES TAKEN BY COUNSEL

[ 12 ] The Crown and the Defence have taken very different views in the presentation of their respective cases. The Crown’s mantra is common sense, common sense, common sense. Meanwhile, Mr. Bayne’s repeated battle cry is rules, rules, rules or alternatively, what rules? These competing views of the world will become apparent as each

section of cases is examined. CREDIBILITY ISSUES AS THEY RELATE TO SENATOR DUFFY [ 13 ] The credibility of a witness is often critical in the determination of criminal charges and the case at bar is no exception to this proposition. Both Mr. Holmes and Mr. Neubauer made extensive comments in their oral presentations as well as their written material as to Senator Duffy’s credibility. [ 14 ] Mr. Bayne observed that his client testified in a fulsome, open, and expansive manner addressing every count and seeking to hide nothing. Furthermore, Mr.

Bayne highlighted the fact that the Crown limited its questions to a few specific counts and did not challenge Senator Duffy’s evidence on the great majority of the counts before the court. [ 15 ] The cross-examination of Senator Duffy did cause me to pause. I agree with Mr. Bayne that the majority of the charges were not addressed in cross-examination. Of particular note, there was no cross-examination of Senator Duffy on the key charges involving Nigel Wright.

The end result of the lack of cross-examination is that much of Senator Duffy’s testimony is left unchallenged. [ 16 ] I am aware that there is no rule that requires cross-examination of any witness.

The decision to cross-examine a witness or conduct a limited and focused cross-examination or to not cross-examine a witness at all is within the complete discretion of counsel and there may be any number of strategic reasons why one option is chosen over another. [ 17 ] Defence Counsel conceded that Senator Duffy presented himself as an emotional and passionate witness at times but asked the court to understand that this was Senator Duffy’s first and only chance to put his position forward after years of wanting to do so. [ 18 ] Mr.

Bayne also reminded the court of the Crown’s burden of proof in any criminal trial. Furthermore, he directed the court to the fact that mens rea is an essential element of every one of the charges facing Senator Duffy and that Senator Duffy’s evidence alone provides the foundation to find him not guilty of all the charges. Hence, the issue of credibility takes on an enhanced importance in determining the eventual outcome of these proceedings. [ 19 ] As I have already mentioned both Mr. Holmes and Mr.

Neubauer took issue with Senator Duffy’s credibility and I intend to address some of their specific concerns at the outset. [ 20 ] Mr. Holmes posed a number of questions for the court to ponder when assessing Senator Duffy’s credibility. Was Senator Duffy a good listener? Did he supply answers to the questions that were asked [of him] to assist the process? Did he seem to have an agenda of his own? Was there any undue response to questions posed to him? Did he have a good memory of the events that he described? Did his evidence of events change over time?

Did he seem to make it [the evidence] up as he went along? [ 21 ] Mr. Holmes stated that Senator Duffy is a practiced public speaker and has for a long time relied on lines written for him. In fact, in his diary for January 6 th , 2009, Senator Duffy jotted, “Check media lines with Corey Tenycke re: Pam and Mike.” This was in reference to the brewing storm regarding the residency issue. [ 22 ] The use of scribed lines also was prevalent as the “Nigel Wright Solution” unfolded.

The PMO was producing the appropriate dialogue for not only Senator Duffy but for all of the major players in the scenario. [ 23 ] I do not find that the use of scripted lines to deal with political fallout issues diminishes the credibility of Senator Duffy’s evidence in this trial.

Likewise, I do not find that Senator Duffy was a witness who was merely parroting a prewritten script as he gave his evidence. [ 24 ] The Crown considered that the “prepackaged endorsement” of candidates during some of Senator Duffy’s speaking engagement reflected adversely on Senator Duffy’s overall credibility. [ 25 ] I do not find that the practice of politicians spouting “for he’s a jolly good fellow” endorsements for their fellow political colleagues triggers credibility concerns. [ 26 ] Mr.

Holmes pointed the court to a number of Senator Duffy’s speaking engagements which he characterized as telling stories and jokes. It is interesting to observe that although Mr. Holmes concedes that there is not a principle of law that anyone who works in the field of entertainment is unworthy of belief he suggested that it was a factor to be considered. [ 27 ] From the evidence, Senator Duffy seems to have been a very popular speaker and was much sought after to make speeches. It appears that Senator Duffy often used humour and stories to convey his message to his audience.

I do not conclude that being an entertaining speaker impacts on Senator Duffy’s credibility. [ 28 ] The Crown pointed to the Senator’s use of props as another factor that has an impact on his credibility. More specifically, it is alleged that a pamphlet on Cockrell House morphed into a scenario that showed that Senator Duffy was not particularly familiar with the circumstances surrounding Cockrell House. [ 29 ] As I assessed Senator Duffy’s evidence, I was not swayed by a prop or two. [ 30 ] Mr.

Holmes suggested that Senator Duffy has the ability “to sell” a story even if he, himself, does not believe in the truthfulness of that story. By way of example, Counsel referred the court to the incident regarding the television interview wherein Senator Duffy admitted that he was wrong about his housing claims and that he would be repaying them. Throughout the interview, Senator Duffy seemed happy and relaxed and in complete control of the situation.

[ 31 ] I agree that Senator Duffy delivered a polished television performance regarding the repayment scenario as scripted by the Prime Minister’s Office. Considering his vast past experience in the media, this “performance” does not come as any great surprise. When assessing ultimate credibility, I take into account Senator Duffy’s experience in the spotlight and his ability to deliver the message. [ 32 ] The next area that caused Mr. Holmes concern focussed on Senator Duffy’s tendency to exaggerate.

As an example of this tendency, I was pointed to Senator Duffy’s depiction of Prince Edward Island’s virtues and attributes in terms that “there’s nowhere else you want to be” but I was then reminded that in fact Senator Duffy’s career path took him away from P.E.I. [ 33 ] I attach no significance to this whatsoever. The fact that Senator Duffy pursued employment opportunities away from P.E.I. is a fact of life.

Although, he may have physically left P.E.I. to work, Senator Duffy continued to maintain many contacts with his place of birth and he had already secured his retirement home in P.E.I. well in advance of his appointment to the Senate. As to the effusive nature of his praise for P.E.I., I agree that it did seem like a promotional advertisement for the Province. However, I do not find this to impact negatively on the issue of credibility. [ 34 ] I do agree with Mr. Holmes’ observation that Senator Duffy has a tendency to speak in terms of absolutes.

I am not swayed by expressions of absolute certainty. [ 35 ] Accordingly, when Senator Duffy proclaims that a Vancouver trip connected with Senate business had absolutely nothing to do about the impending birth of his grandchild, I am not convinced as to the complete accuracy of that statement. [ 36 ] It must be kept in mind that the court does not have to accept all the evidence of any given witness. I can believe all of the evidence of a witness, some of the evidence of a witness, or none of the evidence of a witness. [ 37 ] Another area that concerned Mr.

Holmes regarding the issue of Senator Duffy’s credibility was his tendency to drop in extraneous facts when answering questions. An example of this conduct involved the PMO’s office spending a lot of money on photos. [ 38 ] The fact that extraneous nuggets of information are introduced by a witness does not mean that those facts are untrue or that the witnesses’ credibility is impacted in a negative way. Any extraneous evidence that has no bearing on the issues at trial is to be disregarded by the court.

I am alive to the fact that a witness that throws extraneous points into the mix might be attempting to confuse the trier of fact and thus be deemed less credible. [ 39 ] I do not find Senator Duffy’s desire to enliven his testimony with the occasional extraneous fact detrimental to his credibility. [ 40 ] I also was directed to the Senator’s comment about Prime Minister Harper mistreating many individuals but when pressed to give examples, Senator Duffy was unable or unwilling to do so. [ 41 ] I note this point but do not attach any significance to it.

The Crown could have pressed this matter if they had wished but instead it was left in awkward silence. [ 42 ] Mr. Holmes drew to my attention that Senator Duffy’s evidence with respect to opinions held by certain parties regarding Professor Bulger’s statements about Senator Duffy’s right to sit in the Senate were inconsistent with the timeframe given by Senator Duffy. [ 43 ] Mr. Holmes also provided an example where Senator Duffy was reckless when giving his evidence regarding Herbert Lacroix. This scenario resulted in a discourse on the technique used in broadcasting known as embroidery.

The Crown stressed that Senator Duffy was aware of this technique from the days when he was in broadcasting. Embroidery is used to address a mistake or misstated fact by ignoring it thereby removing it from the equation and moving forward. [ 44 ] Mr. Holmes quite rightly stated that embroidery may work in broadcasting but it is outrageous for a witness to do that [in] a criminal trial. I agree. [ 45 ] Mr. Holmes suggested that Senator Duffy was prone to jumping to conclusions and stating authoritatively events that were far less clear than the evidence suggested.

The example provided to support this point involved Senator Duffy being escorted into the Prime Minister’s office while the Chief-of-Staff of the Armed Forces was made to wait in the outer office. Senator Duffy expressed his opinion that he thought this was rude. In cross-examination, Senator Duffy admitted that it was possible that the group awaiting an audience with the Prime Minister was waiting on another party to arrive. [ 46 ] This situation has more to do with Senator Duffy’s willingness to admit to the possibility of another possible

interpretation of a particular situation than credibility. [ 47 ] The aforementioned incident highlights the dangers associated with unnecessarily detailed evidence that has no real bearing on the issues at hand. [ 48 ] The Crown highlighted what he perceived as a misstatement by Senator Duffy when Senator Duffy was holding up Exhibit 65 and stating that, “There’s lots in this report that the Harper Government would never touch, including death with dignity.” Mr.

Holmes noted that there was no mention to death with dignity in any of the recommendations of the report but conceded that there was a passing reference in the report that in terms of enhancing palliative care, some seniors find it more dignified to die in their homes. Mr. Holmes concluded that this evidence amounts to Senator Duffy conjuring up something that is unsupported and untrue and delivering it in a vigorous manner. I do not find that this perceived great divide impacts on Senator Duffy’s credibility.

We can leave the debate surrounding death with dignity and enhancing palliative care, some seniors find it more dignified to die in their homes, for another day.

[ 49 ] Mr. Holmes pointed out that Senator Duffy’s evidence was internally inconsistent. He stressed that the juxtaposition between Senator Duffy’s testimony that he merely skimmed the rules and his embracement of a very detailed and technical knowledge of the rules to afford him a defence to one of the charges should cause the court concern. [ 50 ] Mr. Neubauer provided another example of a juxtaposition of two at-odds-propositions.

He pointed out that Senator Duffy took the position that the rules surrounding the NCR expenses were vague but also maintained that he was eligible under the rules. [ 51 ] When considering both of the preceding examples of internal inconsistency, one must be mindful that when the events were unfolding, Senator Duffy might have skimmed over certain written materials and considered that the rules were vague. However, once he was charged with the offences he is currently facing, he, perhaps with the assistance of his legal counsel, viewed the situation in a more defensive light.

The credibility alarm is not triggered by the circumstances referred to by Crown Counsel. [ 52 ] Mr. Holmes suggested that another example of internal inconsistency involved Senator Duffy’s evidence in connection with a meeting with Gary Lunn in Ottawa. Mr. Lunn wanted Senator Duffy to visit an event in his riding with the purpose of enhancing Mr. Lunn’s re-election chances. Senator Duffy had also testified that Mr. Lunn’s earlier election had robo-calling aspects to it that had been orchestrated by a black operation unit within the Conservative Party.

Senator Duffy became tongue-tied when the Crown asked him, “Why would you possibly help someone in their bid for re-election, knowing that they previously won a seat through election fraud?” [ 53 ] I take it that the Crown is suggesting that if Senator Duffy was prepared to get involved in such political ugliness that it speaks to his credibility. I think that this is a valid point and a factor to keep in mind when assessing credibility. [ 54 ] Mr. Neubauer highlighted the discrepancies between an email Senator Duffy forwarded to Senator Tkachuk dated February 7, 2013 and other evidence in the trial.

The text of the email is as follows: David: After speaking to my lawyer, I now understand that the issue in question is not whether I own property in P.E.I.; but rather whether my principal residence is there, thus entitling me to expenses for my home in Kanata. If this is indeed the issue, then this is the first time a concern has been raised with me by anyone. I have been claiming these expenses routinely, as I was told I could do at the time of my swearing-in in 2009. However, if there is anything improper about these expense claims, I want to correct it.

I have no interest in claiming expenses to which I am not entitled. Can we discuss this matter before you issue any media release naming me, as I believe we can resolve this expense issue without the need of an audit. Sincerely, Mike [ 55 ] Mr. Neubauer pointed out that this email contradicts Senator Duffy’s other evidence at trial, namely, that this is the first time a concern has been raised with him by anyone with respect to the housing claims. Mr.

Neubauer then referenced discussions between Senator Duffy and Senator Tkachuk back in January of 2009 that dealt with housing claims. [ 56 ] In fairness to Senator Duffy, it was he who raised concerns about his housing entitlements back in 2009 and it was his understanding from the discussions with Senator Tkachuk that he could and should claim for living expenses. [ 57 ] I find that during the January 2009 discussions with Senator Tkachuk, Senator Duffy was not attempting to deceive him. [ 58 ] Mr.

Holmes suggests that Senator Duffy gave internally inconsistent evidence when he said that an income tax specialist in P.E.I. told him that he could not file his income taxes as a P.E.I. resident because it was illegal. When cross-examined, Senator Duffy denied that he used the word illegal. [ 59 ] He did. However, I do not find this point particularly significant in the overall assessment of credibility. [ 60 ] Mr. Holmes referred the court to a number of incidents where Senator Duffy’s evidence was in conflict with other witnesses.

I shall address these inconsistencies later in these reasons when I am dealing with the specific charges that relate to the various witnesses in question. (Dean Del Mastro; Andrew Saxton Jr.; Gerry Donohue; Mike Croskery; Troy DeSouza).

However, I find that the weight of these alleged inconsistencies do not, at the end of the day, significantly impact the credibility of Senator Duffy’s overall evidence. [ 61 ] The Crown stated that Senator Duffy made misrepresentations to Sonia Makhlouf and others with respect to the Donohue contracts; to Senator Tkachuk at the time of his appointment regarding residency issues; and to the Prime Minister regarding his preference as to his Province of Appointment. [ 62 ] A closer examination of these issues will be discussed as they relate to specific charges.

I can say at this time that the discussions surrounding which Province Senator Duffy would represent and what was the key determining factor in that decision does not impact adversely on the credibility of Senator Duffy. It would be expected that each party had reasons for their province of choice and in the end could rationalize the final decision. [ 63 ] Mr. Holmes suggested the Senator Duffy refused to admit even the most obvious things. To illustrate this contention, the Crown referred to Senator Duffy’s use of pre-signed travel forms as a deceptive practice. He highlighted the fact that Senator Duffy

acknowledged that although the practice was poor it was not intended to be deceptive or misleading since it was not an uncommon practice and was done out of practicality and necessity. I do not find that this factor impacts negatively on Senator Duffy’s credibility. I shall address the advisability of using pre-signed, blank travel forms later on in this judgment. [ 64 ] The Crown drew the court’s attention to the evidence of Senator Duffy as it pertained to whether Senator Duffy read all the background testimony with respect to the Special Senate Committee Report on aging.

After some toing and froing Senator Duffy finally answered a rather straight forward question. This example of quasi-evasiveness, in and of itself, is not determinative of the issue of credibility. However, I am aware of this situation when I determine the issue of credibility. [ 65 ] Mr. Holmes asked the court to consider whether or not the evidence given by Senator Duffy was reasonable. To illustrate this factor, I was referred to the cancellation of Senator Duffy’s appearance at the Saanich Fair. Was the Senator’s evidence surrounding his reaction to the cancellation reasonable?

Should Senator Duffy been more proactive in seeking out an explanation as to why he was cancelled at the last second? [ 66 ] I find that Senator Duffy’s response to the situation was just as reasonable as any other potential response. Senator Duffy stated that, “Well I didn’t think it was necessary [to telephone Mr. Lunn for an explanation of the last minute cancellation]. I could read between the lines.” [ 67 ] I acknowledge that Senator Duffy has some areas that require the court to be vigilant about when weighing his evidence.

In addition to the specific issues regarding Senator Duffy’s credibility, I must remind myself that he loved the run-on answer providing an inordinate amount of information, much of which was rather peripheral to the questions posed. He also admitted that his memory was not perfect. The truth of the matter is that this characteristic applies to everyone. He had several private agenda matters that he felt compelled to work into his testimony. [ 68 ] This case provided me with ample opportunity to assess the credibility of Senator Duffy.

He was on the stand for many hours. [ 69 ] At the end of the day, I find that Senator Duffy is an overall credible witness. As I address the various charges contained in the information, I shall keep in mind any concerns that I have noted herein regarding Senator Duffy’s credibility and apply them to the particular fact situations. GENERAL BACKGROUND OF SENATOR DUFFY [ 70 ] Few accused persons have likely had more background information with respect to their lives put before a court. There has been a thorough examination of Senator Duffy’s life.

Senator Duffy’s diaries and calendars outline many of his activities between 2009 and 2012. The Senator’s finances were reviewed extensively by Mr. Grenon, a forensic accountant. In addition, Mr.

Bayne explored many of Senator Duffy’s life experiences in his examination-in-chief. [ 71 ] Some of the salient points in Senator Duffy’s life include: • born May 27, 1946 on Prince Edward Island • raised in Charlottetown, P.E.I. • in 1962, while attending high school, became involved with a local television show featuring high school issues • in 1963, left school and became a junior reporter with the Charlottetown Guardian • in the summer of 1964, toured with a rock band, The Beavers • went to Halifax, N.S. in the fall and read the news at CJCH-920 • after a few months went to work for CKDH in Amherst, N.S. • in 1965 had a brief stint at CKOY in Ottawa, Ontario • returned to CKDH in Amherst, N.S. • in 1996, reporter and on-air person with CHNS-FM in Halifax, N.S. • fall of 1967 went to Toronto, Ontario and covered Progressive Conservative Convention and Robert Stanfield’s election as leader • between 1969 - 1971 with CFCF in Montreal, Quebec • married Nancy Mann 1970 • moved to Ottawa in 1971 as a City Hall reporter for CFRA and eventually assigned to cover Parliament Hill • joined CBC in 1974 • 1979 divorced • 1979 to 1988 experienced health and alcohol issues

• 1988 commenced employment with CTV • 1998 met Heather Collins, a nurse, and married her in 1992 • Senator Duffy has had a rather long history of medical issues over the years and continues to deal with various conditions including: heart attacks and bypass surgery; type 2 diabetes; sleep apnea; ulcers; non-cancerous erosion of digestive tract; liver concerns; osteoarthritis; and diabetic retinopathy. • The aforementioned medical conditions cause Senator Duffy to be involved with various medical specialists and he is required to take many medications in order to stabilize his health.

APPOINTMENT TO THE SENATE OF CANADA ON JANUARY 26, 2009 [ 72 ] Senator Duffy was appointed to the Senate of Canada having met the statutory provisions as set out in the Constitution Act, 1867, 30 & 31 Victoria, c. 3 (U.K.). [ 73 ] 23. The Qualifications of a Senator shall be as follows:

(1) He shall be of the full age of Thirty Years;

(2) He shall be either a natural-born Subject of the Queen, or a Subject of the Queen naturalized by

an Act of the Parliament of Great Britain, or of the Parliament of the United Kingdom of Great Britain and Ireland, or of the Legislature of One of the Provinces of Upper Canada, Lower Canada, Canada, Nova Scotia, or New Brunswick, before the Union, or of the Parliament of Canada after the Union;

(3) He shall be legally or equitably seised as of Freehold for his own Use and Benefit of Lands or Tenements held in Free and Common Socage, or seised or possessed for his own Use and Benefit of Lands or Tenements held in Franc-alleu or in Roture, within the Province for which he is appointed, of the Value of Four thousand Dollars, over and above all Rents, Dues, Debts, Charges, Mortgages, and Incumbrances due or payable out of or charged on or affecting the same;

(4) His Real and Personal Property shall be together worth Four thousand Dollars over and above his Debts and Liabilities;

(5) He shall be resident in the Province for which he is appointed;

(6) In the Case of Quebec he shall have his Real Property Qualification in the Electoral Division for which he is appointed, or shall be resident in that Division. [ 74 ] Mr. Holmes is of the view that even the most cursory examination of these constitutional prerequisites to being appointed and maintaining a position as a Senator reveals that property ownership and being a “resident” of the province of appointment are distinct.

He relies on the testimony of Mark Audcent to assist him in arriving at this conclusion and observes at footnote 18 at page 19 of his written submissions that: “The Prime Minister’s deeply flawed and incomplete understanding of the technical requirements to serve as a Senator also emerged during the testimony of Benjamin Perrin.” [ 75 ] It should be noted that this trial is not about whether Senator Duffy was/is legally qualified to be a Senator from P.E.I.

This trial is focussed on whether or not the Crown has proven the criminal allegations against Senator Duffy that are contained in the information beyond a reasonable doubt. THE SENATE AS AN INSTITUTION [ 76 ] The trial of Senator Duffy has generated much attention from politicians, the media and the public at large regarding issues surrounding the abolishment of the Senate, making major or minor changes to the Senate or maintaining the status quo of the Senate. As interesting as these issues may be, they are not the subject matter before this court.

Furthermore, the decisions surrounding these issues fall within the jurisdiction of the legislative branch of our democracy. PRIMARY RESIDENCY CLAIM [ 77 ] It is alleged that the accused (1) between the 22 nd day of December, 2008 and the 6 th day of March, 2013 at the City of Ottawa, in the East Region, being an official in the Senate of Canada , did commit a breach of trust in connection with the duties of his office by filing expense claims and/or residency declarations containing false or misleading information, contrary to

section 122 of the Criminal Code of Canada and further (2) that he between the 22 nd day of December, 2008, and the 6 th day of March, 2013, at the City of Ottawa, in the East Region, did by deceit, falsehood or fraudulent means defraud the Senate of Canada of money, exceeding $5000.00, by filing expense claims and/or residency declarations containing false or misleading information, contrary to section 380(1) (

a) of the Criminal Code of Canada . Crown’s Position [ 78 ] Mr.

Holmes noted in his written submissions that with respect to the first two counts on the information that Senator Duffy created a fiction that he lived in Prince Edward Island and incurred additional costs to perform his duties in the Senate. [ 79 ] He drew the court’s attention to the fact that considerable time was devoted to the examination of the meaning given to “primary residence” and “secondary residence” and “designated residence” and “residence in the province for which you are appointed” and “NCR (National Capital Region) residence” and “provincial residence”.

Likewise, he alluded to the amount of time devoted to the issue of what it means to be a “resident” for the purpose of satisfying an individual’s eligibility to serve in the Senate. [ 80 ] Mr. Holmes stated that the concentration on

definitions ignores the fact that the per diem expenses that were claimed by

Senator Duffy and paid to him were designed to compensate him for the financial hardship associated with his presence in the NCR to perform his duties on Parliament Hill. Mr.

Holmes maintains that if one were to leave aside all the background noise, the fact is that Senator Duffy did not incur any additional costs to work in the Senate and that he was not entitled to make his claims for per diem compensation. [ 81 ] Crown Counsel contended that the analysis pertaining to counts 1 and 2 boils down to the simple question: Where did Senator Duffy live? [ 82 ] The Crown theory in respect of these offences is based on the fact that Senator Duffy, a long-standing, habitual resident of Ottawa, was primarily resident in Ottawa in the period following his appointment to the Senate.

He had resided in Ottawa since the 1970s. His connection with the Province of Ontario was revealed, not only by his whereabouts, but also by his driver’s licence, passport, provincial health coverage and income tax filings that all portray him as a resident of Ontario. Mr. Holmes is of the opinion that Senator Duffy’s designation of “10 Friendly Lane” in Cavendish as his “primary residence” is inaccurate, but benign.

The completion of the annual Residency Declaration forms occasioned no payments and thus, standing alone, likely does not represent a criminal fraud. [ 83 ] However, the Crown states that the per diem claims are an entirely different matter. The claims are found in Exhibit 2 and represent Senator Duffy’s claims for compensatory payments in connection with the fiction that he had to venture from afar (in this case from P.E.I.) to come to Ottawa to discharge his Senate duties.

It is alleged that as a consequence of his claim for reimbursement of expenses that were never incurred, Senator Duffy was unjustly and fraudulently enriched by approximately $20,000 per year over a period of more than four years. This annual stipend is designed to compensate members of the Senate for additional expenses incurred in connection with their time spent in the National Capital Region to fulfill their Parliamentary functions.

With his primary residence in Ottawa – Kanata being a suburb of Ottawa, and most definitely not more than 100km from Parliament Hill – Senator Duffy was not eligible to receive these payments. [ 84 ] Mr. Holmes states that Senator Duffy’s motive in claiming the primary residence designation for his cottage in P.E.I. also fulfilled his desire to establish a link with that province to satisfy constitutional requirements to even serve in the Senate.

He points out that the court heard evidence that Senator Duffy’s appointment was decried as constitutionally invalid even before his swearing-in and even before he gave his oath that he was a resident of P.E.I. Mr. Holmes states that Senator Duffy was in reality the Senator from Kanata, Ontario and this was the quandary that he faced when he was appointed to represent P.E.I. What do we know about “residency”? [ 85 ] Mr. Holmes relies heavily on Mark Audcent’s testimony as it relates to the subject of residency. Mr. Audcent was the Clerk of The Senate and noted that: (

a) Residency is a question of fact; (

b) There are indicators that inform the determination of one’s place of residence, including: (

i) Physical presence; (ii) Domestic arrangement, meaning where your family lives; (iii) Where you vote; (iv) Where you declare yourself as “resident” for income tax purposes; (

v) Where you enjoy government services: drivers’ licence, receipt of health care; (vi) Where your business or work is located; (vii) Where you do your banking; (viii) Where you participate in recreational activities. (

c) He, and consequently other members of Senate administration, assumed that Senator Duffy satisfied the constitutional residency requirement; (

d) In relation to all Senators the issue of residence, for constitutional purposes, boiled down to whether the Senator’s main residence was located in the province for which he/she was appointed; (

e) Senators were on travel status and entitled to compensation “if you’re not from this region”. [ 86 ] Mr. Holmes reminded the court, that during his testimony, Mr. Audcent resisted a suggestion that the factors he cited in evaluating residence were his own “personal” indicators. He testified that the indicators that he cited were derived from the jurisprudence. [ 87 ] The Crown filed Income Tax Folio S5-F1-C1 titled “ Determining an Individual’s Residence Status ” (Exhibit 112).The salient portions of this document are: Provincial residence 1.2 Many of the comments in this

Chapter apply to determinations of residence status for provincial, as well as federal tax purposes. Generally, an individual is subject to provincial tax on his or her worldwide income from all sources if the individual is resident in a particular province on December 31 of the particular tax year. An individual is considered to be resident in the province where he or she

has significant residential ties. 1.3 In some cases, an individual will be considered to be resident in more than one province on December 31 of a particular tax year. This situation usually arises where an individual is physically residing in a province other than the province in which the individualordinarily resides, on December 31 of the particular tax year. For example, an individual might be away from his or her usual home for aconsiderable length of time on a temporary job posting or in the course of obtaining a post-secondary education.

An individual who isresident in more than one province on December 31 of a particular tax year will be considered to be resident only in the province inwhich the individual has the most significant residential ties, for purposes of computing his or her provincial tax payable. Meaning of resident 1.5 The term resident is not defined in the Act, however, its meaning has been considered by the Courts. The leading decision on themeaning of resident is Thomson v Minister of National Revenue, (SCC), [1946] SCR 209, 2 DTC 812.

In this decision,Rand J. of Supreme Court of Canada held residence to be "a matter of the degree to which a person in mind and fact settles into ormaintains or centralizes his ordinary mode of living with accessories in social relations, interests and conveniences at or in the place inquestion.” Meaning of ordinarily resident 1.6 In determining the residence status of an individual for purposes of the Act, it is also necessary to consider subsection 250(3), whichprovides that, in the Act, a reference to a person resident in Canada includes a person who is ordinarily resident in Canada.

In Thomson,Estey J. held that, "one is "ordinarily resident" in the place where in the settled routine of his life he regularly, normally or customarilylives". 1.7 In the same decision, Rand J. stated that the expression ordinarily resident means, "residence in the course of the customary mode oflife of the person concerned, and it is contrasted with special or occasional or casual residence.

The general mode of life is, therefore,relevant to a question of its application" Justice Rand also went on to say that, "ordinary residence can best be appreciated by consideringits antithesis, occasional or casual or deviatory residence.

The latter would seem clearly to be not only temporary in time and exceptionalin circumstances, but also accompanied by a sense of transitoriness and of return." The meaning given to the expressions resident andordinarily resident as stated by the Supreme Court of Canada in Thomson, have generally been accepted by the Courts. 1.8 To determine residence status, all of the relevant facts in each case must be considered, including residential ties with Canada andlength of time, object, intention and continuity with respect to stays in Canada and abroad. 1.9 An individual who is ordinarily resident in Canada as described in 1.6-1.7 is considered to be factually resident in Canada.

Where anindividual is determined not to be factually resident in Canada, the individual may still be deemed to be resident in Canada for taxpurposes by virtue of subsection 250(1) (see 1.30- 1 36). In certain situations, an individual who would otherwise be factually ordeemed resident in Canada may be deemed not to be resident in Canada, pursuant to subsection 250(5) (see 1.37- 1 39). [88] Mr.

Holmes honed in on the fact that the evidence revealed that Senator Duffy maintained Ontario health coverage duringthe period up to January 2013 and only applied for health coverage in P.E.I. after the Senate insisted on confirmation that Senators hadcoverage in the provinces for which they were appointed.

Indeed, the proof of residency that Internal Economy would ultimately requestof all Senators was confined to driver’s licence, provincial health coverage, residency asserted for purposes of income tax and adeclaration of voting. [89] The Crown takes no issue with Senator Duffy’s claim for health coverage in Ontario since it accords with their positionthat Senator Duffy is and was a resident of Ontario throughout the period of time under review. [90] The Health Insurance Act, R.S.O. 1990, c.

H.6 and amendments thereto include the following sections: Right to insurance 11(1) Every person who is a resident of Ontario is entitled to become an insured person upon application therefor to the GeneralManager in accordance with this Act and the regulations.

Establishing entitlement 11(2) It is the responsibility of every person to establish his or her entitlement to be, or to continue to be, an insured person. 1994, c. 17,s. 70 [91] Regulation 552 relating to the Health Insurance Act includes a definition for “primary place of residence” which isapplicable from April 2009 forward and it reads as follows: “Primary place of residence” means the place with which a person has the greatest connection in terms of present and anticipated futureliving arrangements, the activities of daily living, family connections, financial connections and social connections, and for greatercertainty a person only has one primary place of residence, no matter how many dwelling places he or she may have, inside or outsideOntario.” [92]

Section 2.3(1) of Regulation 552 reads: An insured person shall surrender his or her health card to the General Manager upon ceasing to be a resident. O. Reg. 218/95, s. 1. [93] Mr. Holmes noted that Senator Duffy testified that he became a resident of P.E.I. on the 22nd of December 2008 for allpurposes. However, in addition to health coverage, Senator Duffy portrayed himself as a resident of Ontario for the purpose of income

tax until the end of 2012 (See Exhibit 42, Tab 4A) although he testified that he sought to have his income tax paid in Prince Edward Island but his accountant “refused to do that as a professional, because he said that was illegal”. [ 94 ] The Crown also highlighted the fact that when Senator Duffy made application for a new passport in February 2012, he listed his “current home address” as the residence at 47 Morenz Terrace, Kanata, Ontario. What do we know about the property in Cavendish? [ 95 ] The Crown referred the court to Clifford Dollar’s evidence with respect to his connection with 10 Friendly Lane. Mr.

Dollar explained his role in the construction of the dwelling situate at 10 Friendly Lane. He testified about Senator Duffy’s acquisition of the property. He advised that the property lacked a proper foundation and so it could not be used on a year round basis. From Mr. Dollar, we learned that the property was closed up around the end of October each year and reopened in the spring. Mr. Dollar said he would always see Senator Duffy in late April. The water was shut off, otherwise the “cold would take the pump in winter”. Mr. Dollar stated that the closing routine involved shutting off the power.

He said a new foundation was installed in 2013 [he was wrong about that, reliable evidence to the contrary, including Senator Duffy’s diary shows that the cottage was levelled, insulated and was mounted on a foundation in 2012 – still three years after being described by Senator Duffy as his primary residence]. Mr. Dollar said that even after the foundation was added the water had to be turned off in the winter because the pipes ran through the ceiling and into the roof. In the off-season Mr. Dollar kept an eye on the property. He watched for any signs of break-ins and monitored the snow load on the roof.

Quite apart from the lack of water, Mr. Dollar advised the court that the residence at 10 Friendly Lane was inaccessible during parts of the winter due to snow. [ 96 ] Clifford Dollar’s suggestion that Senator Duffy used 10 Friendly Lane from April through late October is supported by the entries in Senator Duffy’s diary. The diary reveals other travel to Charlottetown during the off season. However, during those times, since the property was largely inaccessible, Senator Duffy stayed in various hotels.

Exhibit 7 reveals a pattern of actual use of 10 Friendly Lane, which showed Senator Duffy’s arrival in the spring and a final departure, usually in the late summer or fall. [ 97 ] Following the construction work in the summer of 2012, which added a foundation and new insulation, it appears as though 10 Friendly Lane was habitable during the colder weather, for at least short periods of time. Mr. Holmes noted that Senator Duffy’s diary referred to an inside temperature of 16 degrees Celsius on 15 December 2012.

I attach no particular significance to this fact since one would expect that the temperature had been set to a low level while no one was actually living in the dwelling. This issue was not developed in cross-examination. [ 98 ] Mr. Holmes pointed out that regardless of the temperature there remained the issues of the water being turned off, the road being impassable and the cessation of other services.

The police shut down their operation in September and garbage collection stopped at the end of October: see the entry of 31 October 2012 “last date for Island Waste Cottage pick up” [p.236]. [ 99 ] The Crown takes the position that prior to his appointment to the Senate, when Senator Duffy described himself as a resident of Ontario, Senator Duffy said he used the property at Cavendish on a seasonal basis and with the exception of three nights in December 2012 that’s precisely how he used the property following his appointment. [ 100 ] The Senate typically breaks in mid-December and suspends its sittings until February, about six weeks per year.

The sitting

schedule can be determined from Exhibit 66, entered in the course of Diane Pugliese’s testimony. Mr. Holmes highlighted Senator Duffy’s whereabouts during the winter breaks between 2009 and 2012. Overall he spent 14 days in P.E.I. during that period. The break period is more than 28 weeks. He did not make it back to P.E.I. at all during the 2010/2011 break. However, Mr. Holmes pointed out that Senator Duffy did spent 10 days in P.E.I. during the 2012 / 2013 break at a time when the Senate expense issue had attracted the attention of the media. [ 101 ] Mr.

Holmes combed the diaries of Senator Duffy and noted that the property at 10 Friendly Lane was consistently referred to as “the cottage” and that 47 Morenz was consistently referred to as “his home.” [ 102 ] Crown counsel rhetorically asks, “Why is this important?” Mr. Holmes points out that Senator Duffy relies on the directions he claims he received from Prime Minister Harper, from a memo prepared by Mr. McCreery, a staffer in Senator LeBreton’s office, and Senator David Tkachuk to legitimize his entitlement to expense claims respecting the NCR. Mr.

Holmes urges the court to carefully examine Senator Duffy’s reliance on these directions and advice that was provided by the aforementioned persons regarding the whole residency issue. [ 103 ] Mr. Holmes contends that at the very least these interactions certainly reveal that Senator Duffy was alive to a problem. The Crown raises the issue of potential wilful blindness on the part of Senator Duffy as it relates to his constitutional eligibility to sit as a Senator from P.E.I. based on concerns related to residency issues. Mr.

Holmes notes that Senator Duffy was alive to the issues from the outset. [ 104 ] It must be born in mind that Senator Duffy initially expressed a preference to be appointed as an Independent Senator from Ontario and that Senator Duffy himself testified that he believed he was qualified to be appointed from Ontario. [ 105 ] At the very least, Senator Duffy knew back in December of 2008 that he had to be a resident in the Province that he represented in the Senate. [ 106 ] Mr.

Holmes observed that during his preliminary discussions with Prime Minister Stephen Harper about his appointment to the Senate, the Prime Minister made it clear to Senator Duffy that he would be entering the Senate as a Conservative and that he would be representing the Province of Prince Edward Island. It would appear from the evidence that Prime Minister Harper seemed focused on the fact that Senator Duffy owned property in Prince Edward Island. [ 107 ] Mr.

Holmes takes the position that even if one were to accept Senator Duffy’s recall of the content of the discussions as perfectly accurate, nowhere was there any suggestion that the Prime Minister discussed expense claims, particularly the Senator’s

eligibility for financial compensation in connection with the performance of his duties in Ottawa. [ 108 ] Senator Duffy’s appointment to the Senate was announced on 22 December 2008. [ 109 ] Thereafter, Senator Duffy met with representatives of Senate Administration on 23 December 2008, including Mark Audcent, the Clerk of the Senate, who specifically instructed him about the need to maintain his residency status in the province for which he was appointed, namely, P.E.I. All of the representatives of the administration extended the invitation to approach them with any questions on a variety of topics.

The letters from the head of Senate Finance and the acting head of Human Resources show a willingness to answer any questions, in a non-partisan and professional way, concerning entitlement to expenses. [ 110 ] On 24 December 2008 an

article appeared in Charlottetown’s The Guardian written by Professor David Bulger. The

article stated that Senator Duffy’s appointment to the Senate was constitutionally invalid because Senator Duffy was not a resident of P.E.I. [ 111 ] Within a few days of the Bulger

article Senator Duffy travelled to P.E.I. He stayed at the Charlottetown Hotel. He obtained a P.E.I. drivers’ license. [ 112 ] Mr. Holmes seems intrigued as to how Senator Duffy obtained a P.E.I. driver’s licence in early January 2009. Perhaps this mystery could have been resolved by cross-examining Senator Duffy about it. [ 113 ] As a result of the Bulger article, a staffer in Senator LeBreton’s office was conscripted to prepare a memo on the subject. Mr.

Holmes takes the position that contrary to Senator Duffy’s testimony, the McCreery memo dated 6 January 2009 provides anything but verification that his claim to being a P.E.I. resident is valid. The memo states that any Senator asserting a particular residence claim would most likely avoid any challenge from the Senate itself: “if they say they are a resident of province X and have a deed to prove it the other Honourable Members do not question this”. Mr.

Holmes contends that the McCreery memo only heightens concerns about the validity of Senator Duffy’s claim of P.E.I. residency, it does not alleviate them. [ 114 ] I find that the McCreery memo is open to be interpreted in the way Senator Duffy understood the residency issue. [ 115 ] There is no evidence that Senator Duffy conferred with the Law Clerk of the Senate, Mr. Audcent, about the Bulger article. [ 116 ] Mr. Holmes stated that: “We also know what Mr. Audcent would have said, had such a meeting occurred: residence is a question of fact.

And based upon the indicators he identified during his testimony, it is inconceivable that, with awareness of all of the circumstances, Mr. Audcent would have identified Cavendish P.E.I. as Senator Duffy’s residence.” [ 117 ] I am not prepared to consider that the aforementioned hypothetical conversation between Mr. Audcent and Senator Duffy would result in a specific opinion one way or the other. The fact of the matter is that there was no such conversation. [ 118 ] On 7 January 2009 Senator Duffy, who at that point had not been sworn in, attended an orientation session. Mr.

Holmes maintains that Senator Duffy was still doubtful and concerned about his residency status. In his testimony Senator Duffy said he was seeking “reassurance” from Senator Tkachuk (Evidence of Senator Duffy 16 December 2015, p.74). Whatever advice or information Senator Duffy elicited from Senator Tkachuk, it is clear from the Crown’s perspective that it was prompted by false and misleading statements by Senator Duffy. There’s no indication in the trial record that Senator Tkachuk knew about Senator Duffy’s personal affairs.

Senator Duffy testified that he and Senator Tkachuk were acquaintances (on the basis that he may have interviewed Senator Tkachuk once) (Evidence of Senator Duffy 16 Dec 2015, p.75). [ 119 ] The entire exchange is captured in Senator Duffy’s testimony from 16 December 2015, at pp. 74 to 79. Senator Duffy answered in the affirmative when Senator Tkachuk asked if Senator Duffy owned a house in P.E.I., paid for hydro, paid for gas, insurance and (property) taxes there.

But the Crown urges that the information supplied by Senator Duffy was misleading, at the very least: • The property at 10 Friendly Lane was not a house, it was a cottage • The hydro was shut off • The last shipment of propane was delivered in the fall when the cottage was closed up • Senator Duffy paid property taxes in P.E.I. as a non-resident. [ 120 ] I do not take Senator Duffy’s responses as misleading.

It is impossible to assess accurately a conversation when one of the parties is not called to give evidence. [ 121 ] On 16 December 2015 Senator Duffy described his conversation with Senator Tkachuk about per diem claims as follows at p.77: And I said, well what about per diems . I said I don’t personally believe in per diems . He says you cannot, not claim what every other Senator claims because to do so would show some light between you and the other P.E.I.

Senators and it would give some kind of edge or an opening for this professor to come back with this, what they believed was a politically motivated attack. [ 122 ] Mr. Holmes states that to the extent Senator Duffy received any direction to claim per diem expenses, it is clear from his own account this is what occurred: (

a) Senator Duffy identified a problem regarding his residence;

(

b) He obtained favourable advice based on misrepresenting and omitting salient facts about the Cavendish property; and (

c) That the need to claim per diems had more to do with Senator Duffy’s portrayal of himself as a resident of P.E.I. – to maintain his constitutional eligibility - than the legitimacy of those claims. [ 123 ] I do not agree with Mr. Holmes’ characterization that Senator Duffy omitted or misrepresented the status of his Cavendish property. [ 124 ] The Crown stated that Senator Duffy was able to overcome his personal opposition to making per diem expense claims and directed his staff to prepare the necessary documentation and submit same in order for him to receive per diem compensation. [ 125 ] Mr.

Holmes expressed the opinion that Senator Duffy, fearing that his claims might be denied, pre-signed blank claims forms certifying that the information was accurate and correct and in accordance with Senate policy. [ 126 ] Undoubtedly, Senator Duffy did use pre-signed blank claim forms when claiming some of his per diem allotments. This issue will be dealt with in more detail later in this judgment.

Suffice it to say at this point that I do not attach any sinister motive or design in this practice on the part of Senator Duffy. [ 127 ] The Crown emphasized that Senator Duffy testified that he knew that Members of Parliament and Senators alike were entitled to compensatory payments to make up for the fact they have to travel to Parliament Hill to work. [ 128 ] It is the Crown’s position that Senator Duffy did not incur any additional expenses in connection with his work on Parliament Hill. He had worked on Parliament Hill for years before his appointment.

His daily routine was largely unaltered following his appointment. He left the same residence in Kanata, drove to the same general location in Ottawa to work, and ate his meals at the same places. The sitting

schedule of the Senate was typically three days per week. [ 129 ] Furthermore, Mr. Holmes concludes that all the per diem claims made by Senator Duffy amount to criminal fraud and breach of trust. Defence Position [ 130 ] Mr.

Bayne submits that counts 1 and 2 allege that Senator Michael Duffy committed breach of trust and fraud between December 22, 2008 and March 6, 2013 “by filing expense claims and/or residency declarations containing false or misleading information.” He contends that the counts factually engage Senator Duffy’s designation – under the existing provisions of the SARs (Senate Administrative Rules) and related policies, procedures and guidelines – “For the purposes of the Twenty-Second Report of the Standing Committee on Internal Economy, Budgets and Administration, adopted in the Senate June 18, 1998” of his “primary residence in the province or territory that I represent” (Prince Edward Island) and his related claims for “Living Expenses in the NCR.” Furthermore, he submits that Senator Duffy committed no crime whatsoever – no fraud, no breach of trust – in making a designation (pursuant to the rules as he understood them and had them explained to him by Senate leaders) regarding primary residence “in the province or territory that [he] represent[ed]” and in claiming the related NCR living expense claims.

Mr. Bayne asserts that the designation and living expense claims were validly made within the existing administrative Senate rules and practices. They were made in good faith and the belief that they were appropriate. They were in violation of no Senate rule or policy. They involved no deliberate deceit or “corrupt” purpose. They were made pursuant to and in reliance upon the express instructions of the Vice-Chair of the powerful and authoritative Internal Economy Committee.

They were made openly to the appropriate Senate authority (Senate Finance) and were for all of the time period under consideration reviewed and verified as appropriate by that Senate authority. Accordingly, counsel urged the court to find that there was no fraud or breach of trust and the essential elements of these criminal offences have not been proved beyond reasonable doubt and that the evidence and law support a finding of not guilty on both counts.

Senator Duffy’s Connection to P.E.I. [ 131 ] When considering the issues surrounding residency, it is useful to consider Senator Duffy’s connection with Prince Edward Island. His family has had roots in the Province for many years and he himself was born and raised in the Charlottetown area. After leaving high school, Senator Duffy pursued journalistic endeavours that eventually brought him to national prominence. This career path resulted in Senator Duffy having to leave his home province. However, he returned regularly to Prince Edward Island to visit friends and family.

Senator Duffy advised the court that it was always his intention to return permanently to Prince Edward Island once he retired from media journalism.

With this goal in mind, he and his wife, Heather purchased the property at 10 Friendly Lane, Cavendish Beach, P.E.I. in 1998. [ 132 ] Staff Sergeant Mark Todd Crowther of the RCMP described the Cavendish area as a resort municipality with a small permanent population (in 2011 the population was listed as 266) that swells to about 7500 during July and August necessitating a small seasonal satellite detachment at Cavendish Beach between June and September to handle the influx of people. [ 133 ] The Duffy’s current residence in the NCR is at 47 Morenz Terrace, Kanada, Ontario.

This property was purchased in 2003. [ 134 ] In anticipation of his appointment to the Senate representing P.E.I., Senator Duffy ended his career in journalism on December 22, 2008 and “became a resident of Prince Edward Island” at 10 Friendly Lane, Hunter River, RR2, P.E.I., C0A 1N0 and was issued a P.E.I. driving licence on January 2, 2009. (Exhibit 42, Tabs 1 and 2). As Senator Duffy put it in his testimony, I was a Prince Edward Islander and wanted to have a Prince Edward Island driver’s licence. (Evidence of Senator Duffy, December 8, 2015, page 66, lines 7-9) [ 135 ] Mr.

Bayne noted that Senator Duffy maintained his Ontario Health Insurance Plan card to facilitate his treatment and care for his various health issues. In 2013, the Senate rules changed so that a provincial health card from one’s home province was required.

Reliance by Senator Duffy on Representations and Opinions of Key Authoritative Officials [ 136 ] Senator Duffy advised the court that he spoke with a number of individuals including: Stephen Harper, the Prime Minister of Canada; Senator Tkachuk, the Vice-chair and then Chair of the Internal Economy Committee (see Exhibit A, Tab 2, page 2-3 Governance: “The Committee is responsible for the good internal administration of the Senate”); Senator LeBreton, the Conservative Senate caucus leader and her constitutional assistant Christopher McCreery (confirmed by Exhibit A, Tab 19, dated January 6, 2009) regarding issues surrounding residency and that he relied on their opinions and statements with respect to the residency issue.

Prime Minister Stephen Harper [ 137 ] Senator Duffy testified that he met Prime Minister Stephen Harper on December 8, 2008 (confirmed by Exhibit 76, the Duffy diary for December 2008) at which time the Prime Minister suggested to then Mr. Duffy that he (Duffy) should consider a P.E.I. Senate appointment. The Prime Minister and Mr. Duffy discussed Mr. Duffy’s and his wife’s intention to return permanently to P.E.I. once his journalism career ended and where he had owned his proposed permanent retirement home at 10 Friendly Lane for a full decade. The Prime Minister suggested that Mr.

Duffy “speed up” the permanent move to the P.E.I. residence through the acceptance of an appointment – i.e. an appointment as a P.E.I. Senator would both require and effect a change in the status of the P.E.I. residence. Mr. Duffy said he would have to discuss and consider this with his wife Heather (Evidence of Senator Duffy, December 8, 2015 at pages 56- 60). [ 138 ] Senator Duffy further gave evidence that he again met Prime Minister Harper, this time at the Centre Block, on December 16, 2008 (again confirmed by Exhibit 76), to discuss the proposed Senate appointment. Mr.

Duffy raised an issue of potential local political opposition to his appointment as he had been living in Ottawa as part of his journalism career, although he owned the residence at 10 Friendly Lane in P.E.I. and had intended to make it his permanent home when his journalism career ended. The Prime Minister replied, “They’ll get over it,” and went on to advise Mr. Duffy that accepting the appointment as a P.E.I.

Senator simply “accelerated” or “speeded up” making the P.E.I. residence the permanent residence, since being sworn in as a Senator from P.E.I. made P.E.I. (10 Friendly Lane) the permanent and primary residence. The Prime Minister advised Senator Duffy that, upon appointment as a Senator from P.E.I., the effect would be “this is now your primary residence. This is – this is where you live and this is what you represent, the area you represent in the Senate of Canada” (Evidence of Senator Duffy December 8, 2015, page 63). Mr.

Duffy would, on appointment, be representing the Province of P.E.I. (an important Constitutional and legal reality of “regional representation” by appointed Senators – see Exhibit A, Tab 15, at pages 20 & 25: “The system of regional representation in the Senate was one of the essential features of that body when it was created”), and his P.E.I. residence would thus, on appointment, become the permanent one just as Mr. Duffy and his wife had intended for a decade. (Evidence of Senator Duffy December 8, 2015, at pages 60-64) [ 139 ] The Prime Minister’s explicit advice was believed and relied upon reasonably by Mr.

Duffy. This was not some minor bureaucratic official speaking but the Prime Minister of Canada. This advice made sense. If you are the Senator from P.E.I., representing P.E.I., your address in P.E.I. would now be your prime and permanent address. The advice of the Prime Minister was reinforced by the written and oral advice of Mr. Audcent, the Senate Law Clerk, to Mr. Duffy on December 23 rd , 2008, that, owing to the requirements of the Constitution Act, 1867 (See Exhibit A, Tab 1), the soon-to-be appointed P.E.I. Senator had a “duty to reside at all times in Prince Edward Island” (Exhibit A, Tab 12).

The Prince Edward Island residence was of primary constitutional importance going forward (Evidence of Senator Duffy, December 8, 2015 at pages 64-66). [ 140 ] Senator Duffy testified that on December 20 th , 2008, he officially accepted the Prime Minister’s offer of appointment as Senator from P.E.I. (confirmed by Exhibit 76). Mr.

Duffy believed that based on the authoritative and inherently reasonable advice from the Prime Minister, that upon his appointment as a Senator from P.E.I., he represented P.E.I. and his P.E.I. residence at 10 Friendly Lane became his constitutionally required, and most important, now permanent residence and address. Appointment by the Prime Minister would transform his status from private citizen to Parliamentarian from P.E.I. and the status of his P.E.I. residence to that of constitutional and permanent residence. [ 141 ] Mr.

Bayne stressed that Senator Duffy’s evidence about the aforementioned meetings was not contradicted. The Crown called no evidence, either from former Prime Minister Harper or from Ray Novak who was present at the December 8 th meeting, to challenge or contradict Senator Duffy’s account of the meetings. Senate Officials [ 142 ] On December 22, 2008, the Prime Minister announced Mr.

Duffy’s Senate appointment and that of 17 others (confirmed by Exhibit 76) and on December 23 rd , Mike Duffy met Senate officials (Senate Clerk Belisle, Law Clerk Audcent, Senate Finance Director Proulx and Acting HR Director Poulin) for a welcome and information session. The meeting was less than an hour long.

Of relevance to Counts 1 & 2, Senator Duffy received a letter from the Senate Clerk advising him that the Clerk would be sending him “several documents.” Senator Duffy’s evidence confirmed that he later received a box of documents including the Senate Administrative Rules (SARs), the Attendance Policy and other documents. The Clerk’s letter advised that “a short briefing” would follow from the Law Clerk and Directors of Finance and HR (See Exhibit A, Tab 12).

The Law Clerk’s letter and oral advice received December 23 rd confirmed in writing the prime constitutional importance as of appointment – “as of the day of your summons” – of the P.E.I. residence at 10 Friendly Lane. Senator Duffy received a letter and 15 pages of documents from Ms. Poulin of HR (see Exhibit A, Tab 12 & 16). Then he received an eight-page-typed letter from Ms. Proulx along with typed documents (Guidelines and Policy and Entitlements). Ms. Proulx testified that she “went through” the eight page letter with Senator Duffy.

The letter explained “Parliamentary functions” for which Senate resources may properly be used, sessional and Retiring Allowances (i.e. salary) and Dental, Health Care, Insurance, Travel Insurance, and Post-Retirement Insurance Plans, Death Gratuity, Marital Status Data, Annual Statement of Benefits, Railway Transportation, Travel Card, Telephone Services, Research and Office Expense Budget amounts, and Moving Expenses (Exhibit A Tab 15 A-H) (Evidence of Senator Duffy December 8, 2015 at pages 76-91). [ 143 ] Mr.

Bayne stated that there was no evidence whatsoever that any of the Senate officials at this brief December 23 rd welcome meeting explained, defined, or qualified in any way the concept of “primary residence” for the purpose of claiming living

expenses in the NCR. Senator Duffy was encouraged to seek advice if he had questions after reading all the materials and the coming volumes of materials from the Senate Clerk. [ 144 ] Senator Duffy gave evidence that after this brief December 23 rd welcome session there were no subsequent education or training sessions conducted by Senate administration for new Senators (despite their responsibility under the SARs, along with the Internal Economy Committee – see Exhibit A Tab 2 Governance p. 2-10 – for “the good administration of the Senate”) on Senate rules, policies, guidelines, procedures or practices.

The evidence reasonably supports the conclusion that there was little or no meaningful education or training of Senators (and is strongly confirmed by Exhibit A, Tab 20, the “Report on Internal Audits”, that expressly identifies “poor communication” of policy to Senators and the need for “updates”). After the brief and

summary ‘welcome’ meeting of December 23 rd , there is no evidence from any source that Senators received any organized education or training from Senate administration, and only scant evidence about a non-mandatory, optional, half-day session for office staff of Senators (Evidence of Senator Duffy December 8, 2015 at pages 84-55; Evidence of Senator Furey December 7, 2015 at pages 26 & 60). Prime Minister’s Office (PMO) [ 145 ] Senator Duffy testified that on December 24 th , 2008, The Guardian newspaper (Exhibit 77) published an

article citing a University of Prince Edward Island professor’s challenge to the constitutionality of Prime Minister Harper’s appointment of Mr. Duffy as a P.E.I. Senator. Conceding that the constitutional standard for residence is not defined, the

article queried whether Mr. Duffy spent enough time on the Island and stated that he had a duty going forward to make P.E.I. his ‘main residence.’ This

article gravely concerned Senator Duffy and reinforced the notion that his P.E.I. residence was his residence of prime constitutional importance. Mr. Duffy immediately contacted Mr. Teneycke of the Prime Minister’s Office (PMO) regarding the newspaper

article and was advised that his P.E.I. residence at 10 Friendly Lane, the residence of prime constitutional importance, fully satisfied the constitutional residence requirement. 10 Friendly Lane was not only the primary residence of Mr. Duffy in the Province for which he was to be appointed, but was his only residence in P.E.I. The PMO assured him 10 Friendly Lane qualified and that he should ignore the

article (Evidence of Senator Duffy December 8, 2015 pages 92-95). Senator LeBreton, Senate Leader [ 146 ] Senator Duffy pursued the residency issue further. On January 6, 2009 (confirmed in Exhibit 7), Senator Duffy testified that he attended the office of his Senate Leader and member of the Harper Cabinet, Marjorie LeBreton, to resolve the matter.

When he explained his understanding that there was and could be no minimum time requirement to be spent at his residence at 10 Friendly Lane for it to be his primary residence in the Province for which he was to be appointed (because of the Senate attendance requirement in Ottawa and travel on Senate business), he was assured by Senator LeBreton that 10 Friendly Lane fully qualified and there was no such time requirement and The Guardian

article was nothing but “politics” that he should ignore. He took this as being consistent with what he’d been advised by the Prime Minister on December 8 th & 16 th , 2008, that upon appointment, 10 Friendly Lane would be his Constitutionally primary and permanent residence, making him a P.E.I. resident. On the same date, January 6 th , Mr.

Duffy received from the Senate Leader and her constitutional advisor a written memorandum (Exhibit A Tab 19) advising that the P.E.I. property that he owned (10 Friendly Lane) qualified him as a P.E.I. resident even if he had lived “in Ottawa 99% of the time.” The primary constitutional residence in the province of appointment was not dependent on the amount of time spent there (or the seasons or the relative value or a concept of “ordinarily inhabits”) (Evidence of Senator Duffy December 8, 2015 pages 95-101).

Primary Residence Declaration [ 147 ] The Primary Residence Declaration form that was signed by Senator Duffy is reproduced here. This document has been modified over the course of the last few years. SENATE PRIMARY RESIDENCE DECLARATION I, the Honourable ……………………………………, member of the Senate for the province or territory of….... ……………………………………, declare that my primary residence is more than 100 kilometres from Parliament Hill and that I therefore incur additional living expenses while I am in the National Capital Region to carry out my parliamentary functions.

For the purposes of the Twenty-Second Report of the Standing Senate Committee on Internal Economy , Budgets and Administration, adopted in the Senate June 18, 1998, the address of my primary residence in the province or territory that I represent is the following: …………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………….. The Honourable

……………………………………………………… (signature) ……………………………………………………… (date) Application of Advice [ 148 ] Mr. Bayne suggested that the Crown is seeking to assert a fine line distinction (splitting hairs?) that there was a conflation here of constitutional residence and primary residence for the purpose of living expense claims. However, it is argued that Senator Duffy is not a lawyer and that he sought and relied on the advice he received and was not provided any meaningful instruction from Senate administration. Mr.

Bayne states that Senator Duffy honestly and reasonably understood, combining the information and advice received from the most authoritative sources – the Prime Minister, the PMO, the Senate Leader, her constitutional advisor – that 10 Friendly Lane, upon an

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