Her Majesty the Queen - v. -, 2015 SKPC 61

IN THE PROVINCIAL COURT OF SASKATCHEWAN Citation: 2015 SKPC 061 Date: May 25, 2015 Information: 24388430, 24388431 Location: Saskatoon _____________________________________________________________________________ Between: Her Majesty the Queen - and - Joshua Douglas Johnston Appearing: R. Ritter For the Crown Telmo Dos Santos For the Accused DECISION RE: APPLICATION TO EXPUNGE GUILTY PLEAS R.D. JACKSON , J I BACKGROUND [ 1 ] The accused, Joshua Douglas Johnston, was charged in two separate Informations that he did between June 1, 2008 and October 31, 2010, at the City of Saskatoon and other locations in the Province of Saskatchewan: Information #24388430

Count #1 by deceit, falsehood or other fraudulent means, defraud Eldon Dahl, of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #2 by deceit, falsehood or other fraudulent means, defraud Marge Bailey of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #3 by deceit, falsehood or other fraudulent means, defraud Carmen Bailey of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #4 by deceit, falsehood or other fraudulent means, defraud Andy Kotelmach of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #5 by deceit, falsehood or other fraudulent means, defraud Josh Mattison of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #6 by deceit, falsehood or other fraudulent means, defraud Mark Jakubowski of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #7 by deceit, falsehood or other fraudulent means, defraud Heath Pearce of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #8 by deceit, falsehood or other fraudulent means, defraud Shalloon Dahl of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #9 by deceit, falsehood or other fraudulent means, defraud Leanne Campbell of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #10 by deceit, falsehood or other fraudulent means, defraud Stacy Bestvater of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #11 by deceit, falsehood or other fraudulent means, defraud Carl Rosenau of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #12 by deceit, falsehood or other fraudulent means, defraud Tim Rosenau of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . Count #13 by deceit, falsehood or other fraudulent means, defraud Michael Boehm of money in an amount under $5000, contrary to section 380(1) (

b) of the Criminal Code . Count #14 by deceit, falsehood or other fraudulent means, defraud Kristina Kuervers of money in an amount under $5000, contrary to section 380(1) (

b) of the Criminal Code . Count #15 otherwise deal with property to wit: money with intent to conceal or convert that property, knowing or believing that all of the property was obtained as a result of the commission in Canada of the designated offence of fraud contrary to

section 462.31(1) of the

Criminal Code . Count #16 possess property or proceeds of property having a value exceeding $5,000.00 knowing that all or part of the property or proceeds was obtained or derived directly or indirectly from the commission in Canada of an indictable offence, to wit: Fraud Over $5,000.00, contrary to section 380(1) (

a) of the Criminal Code and thereby committed an offence contrary to s. 354(1) (

a) and s. 355 (

a) of the Criminal Code . Information #24388431 did between June 1, 2008 and October 31, 2010 at the City of Saskatoon in the Province of Saskatchewan by deceit, falsehood or other fraudulent means, defraud David Johnston of money in an amount exceeding $5000, contrary to section 380(1) (

a) of the Criminal Code . [ 2 ] The gist of the allegations was that the accused, acting as a real estate investor, misappropriated $1,228,450.00 broken down as follows (Exhibit P-7): Andy Kotelmach $85,000.00 Marg and Dana Bailey $70,000.00 Carmen Bailey $10,000.00 Michael Boehm $3,000.00 Josh Mattison $20,000.00 Mark Jakubowski $50,000.00 Heath Pearce $15,000.00 Shalloon Dahl $7,500.00 Kristina Kuervers $2,500.00 Leanne Campbell $10,000.00 Stacy Bestvater $90,000.00 Carl Rosenau $100,000.00 Tim Rosenau $100,000.00 David Johnston $70,000.00 Eldon Dahl $595,450.00 _____________ Total $1,228,450.00 [ 3 ] The trial was scheduled for three weeks commencing Monday, October 6, 2014.

Representing the Crown was Mr. Robin Ritter and for the Defence, Mr. Ian Wagner, both of whom are well known respected counsel of many years standing. [ 4 ] On the first day the Court heard from the lead investigator, Corporal Grant Williamson of the RCMP Integrated Organized Crime Unit.

Corporal Williamson spent the morning outlining the scope and complexity of the alleged fraud scheme whereby the accused received the monies as set out in paragraph 2 above for the purpose of investing in real estate ventures primarily in the province of Alberta, but also included Saskatchewan and Florida. [ 5 ] In view of the magnitude and complexity of the alleged fraud, this overview was extremely beneficial to the Court

(similar to an opening statement given by counsel), and was presented in the form of a “narrative” or

summary of the Crown’s case, rather than for the proof of the truth of it . [ 6 ] Corporal Williamson outlined a complex and sophisticated scheme whereby investment funds were filtered through some 42 different bank accounts belonging to numbered companies and various individuals, including the accused, his wife, relatives and employees of his companies. Seven different land projects were referenced which formed the basis of the accused’s “pitch” to investors, according to Corporal Williamson.

Upon investigation, no evidence of any investing or acquisition appeared to have taken place and in one instance, no property at the designated address even existed.

There also appeared to be evidence of ongoing mortgage fraud associated with some of these purported investments. [ 7 ] The afternoon focused on a lengthy warned statement given by the accused May 17, 2012, entered as Exhibit P-12 [1] , as well as recordings of some subsequent telephone conversations between the accused and Corporal Williamson. [ 8 ] In the warned statement, the accused admitted that no properties were in fact purchased on behalf of the investors.

Rather, it appeared that the monies were squandered on personal living expenses, “extortion money” paid to nefarious individuals including the Hell’s Angels (with whom the accused acknowledged he had previously been involved) as well as attempted acquisitions of two expensive personal residences in Calgary and a vacation property on Shuswap Lake in British Columbia. [ 9 ] Just prior to the 9:30 a.m. commencement of the second day of trial, the Court was apprised that counsel were in discussions and that a delay would be required.

Court was ultimately convened at 10:50 a.m. at which time Crown and Defence counsel informed that there would be a change of plea. Before proceeding any further, the Court inquired of Mr. Wagner as to whether s. 606 of the Criminal Code had been complied with in light of the application to change the plea. Mr. Wagner confirmed that it had. [ 10 ] The accused, through counsel, then pled guilty to an amended count #1 of Information 24388430 which incorporated all of the counts on this Information dealing with fraud over $5,000.00 as well as the count on Information ending in 431.

Additionally, the accused then pled guilty to an amended count 13 of Information ending 430 incorporating the two named victims that were defrauded of sums less than $5,000.00. Further, the accused pled guilty to counts 15 and 16 of Information ending 430 involving money laundering and possession of proceeds of crime contrary to ss. 462.31(1) and 354(1) (

a) and 355 (

a) of the Criminal Code , respectively. [ 11 ] Court was then adjourned for counsel to confer regarding possible changes to the accused’s Recognizance pending sentencing. When court reconvened, Defence counsel requested that sentencing be set over to February 2, 2015 which was consented to by the Crown. Some amendments were made to the Recognizance of the accused including the ability to travel to the province of British Columbia for the purpose of earning income. Mr.

Wagner confirmed that as part of his 606 discussions with the accused, the issue of restitution was canvassed with a view to possibly ameliorating the impact of sentence. [ 12 ] On January 28, 2015 the Court received a faxed communication from local counsel, Mr. Ian Mokuruk, advising that the accused had contacted him for the sole purpose of informing the Court that he wished to make an application to expunge his guilty pleas and that new counsel was being retained from Calgary for this purpose. [ 13 ] The accused then appeared on the scheduled sentencing date of February 2, 2015 and confirmed the foregoing.

His former counsel, Mr. Ian Wagner, was also present and was granted leave to withdraw in the circumstances. Following some discussion, the matter was then set to 9:00 a.m. Monday, March 30, 2015, for an expungement hearing. II THE LAW CONCERNING EXPUNGEMENT [ 14 ] The accused entered guilty pleas to the charges before the court. The oft-stated passage of Doherty J.A. in R v T(R)I [2] describes a plea of guilty as follows:

13 A guilty plea is a formal admission of guilt. It also constitutes a waiver of both the accused's right to require the Crown to prove itscase beyond a reasonable doubt and the related procedural safeguards, some of which are constitutionally protected: Korponey v Canada(Attorney General), (SCC), [1982] 1 S.C.R. 41, 26 CR (3d) 343, 65 CCC (2d) 65, 132 DLR (3d) 354, (sub nom. R vKorponey) 44 N.R. 103, at p. 49 [SCR], p.74 [CCC, pp. 351-352 CR]; Brady v United States, 397 US 742 (1970), at p. 748; O.E.Fitzgerald, The Guilty Plea and

Summary Justice (Toronto: Carswell, 1990), at pp. 192-203. [15] Section 606(1.1) of the Criminal Code sets out the criteria for the Court to accept a guilty plea: s. 606.

(1) An accused who is called on to plead may plead guilty or not guilty, or the special pleas authorized by this Part and no others.

(1.1) A court may accept a plea of guilty only if it is satisfied that the accused (

a) is making the plea voluntarily; and (

b) understands (

i) that the plea is an admission of the essential elements of the offence, (ii) the nature and consequences of the plea, and (iii) that the court is not bound by an agreement made between the accused and the prosecutor.

(1.2) The failure of the court to fully inquire whether the conditions set out in subsection (1.1) are met does not affect the validity of theplea. [16] Our Court of Appeal in R v Leonard[3]stated at para. 17: 17 It is well settled that, in order to be valid, a guilty plea must be voluntary, unequivocal and informed. Voluntariness turns on the ideaof a conscious volitional decision to plead guilty for reasons the accused regards as appropriate. A guilty plea is unequivocal if it isunqualified and certain with respect to the acknowledgment of the essential facts of the crime charged.

It is informed if the accusedunderstands the nature of the charges, the legal effect of the plea and the consequences of the plea. See: R v T(R) (1992), (ON CA), 17 CR (4th) 247(Ont CA), Adgey v The Queen (1973), (SCC), 13 CCC (2d) 177 (SCC); R v Moser(2002), (ON SC), 163 CCC (3d) 286 (Ont SC). [17] More recently, in 2014, the case of R v Levin[4] reaffirmed this position stating at para. 7: [7] To begin, a guilty plea, made in open court must be presumed to be valid unless the accused can prove it was not voluntary, informed

or unequivocal . . . an Appellate court may only set aside a guilty plea where there are valid grounds for doing so . . . [ 18 ] The fact that an accused was represented by experienced counsel is also significant. In R v DS [5] , my sister Judge Cardinal stated: 26 The applicant bears the onus of proving, on a balance of probabilities, that his guilty plea ought to be expunged.

The fact that he had a highly experienced lawyer representing him is a significant factor the Court must consider in determining if expungement of a guilty plea ought to be made: See: R v Arcand , 2000 SKCA 60 ; R v Leonard , 2007 SKCA 128 . III DETERMINATION Entry of guilty pleas [ 19 ] The accused in his submissions at p. 68, para. 233, states: “ . . . there does not appear yet to be a recording of the plea on the record.” This issue was first raised at the expungement hearing when Defence counsel interjected during cross-examination of Mr.

Johnston: Page T53, Lines 21 - 36 : Q The message on the guilty plea was clear though. You were going to plead guilty because the trial stopped; right? A Correct. Q Okay. That way there was no more trial? A As I was walking into the courtroom that’s when I was starting to feel the nervousness about, yes, I guess that’s what was going to happen, so -- Q So when Mr. Wagner stood up in front of this Judge, told the court you were pleading guilty, you weren’t surprised by that, were you? Mr. Dos Santos: Actually, I have to object because that actually never happened. That actually never happened. Mr.

Wagner never said that this accused was entering any plea. He said, The pleas are going to be changed. That ’s what the record shows. If the court wishes to have a transcript, sir, I do have one here. Page 54, Lines 29 - 40: Mr. Dos Santos: – that he’s pleading – I read the transcript, so – but the words were never said that a guilty was being entered on

any charge , so that when my friend -- The Court: At any time? Mr. Dos Santos: At any time - - The Court: Okay. Mr. Dos Santos: – from my reading of the transcript anyway. I think it was said that the plea was being changed. [Emphasis added] [ 20 ] The transcript, from October 7, 2014, however clearly demonstrated the opposite: Page T2, Lines 28 - 40, Page T3, Lines 1 - 13 : Plea Mr. Wagner: No, I’ll take this one. Thank you.

So then, if the first count is amended to include the names of Eldon Dahl, which it does already, Marge Bailey, Carmen Bailey, Andy Kotelmach, Josh Mattison, Mark Jakubowski, Heath Pearce, Shalloon - - Shalloon Dahl, Leanne Campbell, Stacey Bestvater, Carl Rosenau, Tim Rosenau, Michael Boehm and Kristina Keurvers. So if it’s amended to include names, and plead guilty - - The Court: So, okay, for the record, then, that ’s the victims ’ names in the first 14 counts? Mr. Wagner: Right. Right. The Court: All right. Mr. Wagner: So that ’s - - they ’re put into count 1 and plead guilty to that count.

The Court: All right. Mr. Wagner: Then we have count 15, which is 462.311( sic ) of the Criminal Code , which is dealing with property, the attempt to conceal or convert that property, knowing or believing that all of the property was obtained as a result of the (INDISCERNIBLE) Canada designated offence of fraud. Plead guilty to that. And then count number 16, which is the proceeds of crime, the

section for fraud over 5,000, plead guilty to that count - - [Emphasis added]

Page T13, Lines 29 - 40: Mr. Wagner: But - - but first, we have to do something. The clerk caught something that - -- The Court: Right. There’s a couple of - - Mr. Wagner: - - that’s quite important. The Court: - - 381(

b) charges, I think. Mr. Wagner: Right. So what we’re looking at is - - is consolidating count 13 and 14, and pulling the names of Michael Boehm and Kristina Keurvers out of count 1, so - - The Court: Into count 2. Mr. Wagner: - - and then plead guilty to what would be a - - a new, I guess, count 13. [Emphasis added] Accordingly, there is no doubt that guilty pleas were in fact entered, as set out. [ 21 ] At the expungement hearing on March 30, 2015, the Court heard from both the accused and his former solicitor, Mr.

Wagner (solicitor - client privilege having been formally waived) concerning the discussions leading up to the guilty pleas on the morning of October 7, 2014. Also testifying on behalf of the accused was his wife, mother and father. [ 22 ] Mr. Wagner’s recollection of what transpired is reflected in the following: Page T113, Lines 34 - 41, T114, Lines 1 - 41, T115, Lines 1 - 36 A And Josh understood that, and I think he understood the guilty plea that day. We talked several times that morning.

The day before was - - was an impactful day because when you have a police officer sitting there, going through everything in a nice flow chart, it - - you know, even though we knew where everything was before, to go through it in that manner and to listen to the testimony is an impactful day, whether you’re a prepared lawyer nor not, and it’s an impactful day for the client. And so the next morning when we met, and the offer was put forward again, which I thought was a good offer, Josh said he had to discuss it with his wife. I said, Fine.

I can’t remember exactly what time we got back into court for the guilty plea, but there were several discussions with his wife. I remember being on the phone and being asked by her my opinion of it. And I thought it was the best decision for the family, but do I believe that Josh knew what he was pleading guilty to? Absolutely, because we had to discuss rolling all of those individual fraud charges into one, and then the remainder of - - and I believe the two remaining other charges were possession of proceeds and money laundering. So we had that discussion .

It was very serious at times, and anybody that knows me, knows I crack jokes. I did crack a few jokes to try to lighten the mood. It was very difficult for Josh to do, but we talked about - - we also talked about what the impact would be if parole is granted and my - - [Emphasis added] Q So you talked about parole as well?

A Yes. And my view was that given the type of guy he is, and the way he presents, and he’s a family guy, these are not violent offences, that the likelihood of him getting the parole at one-third was extremely high . And so we talked about how long that is from being away from your family. And we had talked about that in my office, too, but we talked about it that day with his wife present, and we talked about things about, you know, do I open up the Criminal Code and go through 606 line by line with my client? No, but I make sure that every one of those things are discussed. [Emphasis added] Q Mmhmm.

A And one of the things we actually discussed was whether a judge - - whether - - sorry, Your Honour - - this Judge in particular would reject sentencing suggestions by Crown and myself, if - - because I don’t want to get into what the deal was exactly; right? And my view was that in the history of - - of this court and this Judge that he looked to senior counsel and - - and wasn’t one to interfere with a plea bargain, recognizing the give-and-take. I mean, part of the plea bargain is that Mr.

Johnston is giving up the right to trial, but I thought he had a full understanding of what - - Q So - - A - - he was pleading guilty to. Q - - did Mr. Johnston understand that the ultimate decision as to the length of sentence though was up to the court? A Yes. Q Okay. And did he basically admit to the essential elements of the offence? A Yes, and he’d admitted it, the essential elements of the offence on the - - on the videotape as well. Q On the warned statement that was admitted as evidence? A Yes. Q Did you, at any time, ever force him or coerce, I think is the word, to enter a plea of guilty? A No.

I don’t know exactly what would be coercive. There was a huge amount of pressure. I mean, you have to understand that. The pressure on Josh was huge. Q Mmhmm A And it should be because we’re talking about a significant plea to a significant amount - - Q Mmhmm

A - - but we also had a sentencing hearing, where within that sentencing hearing I’d have the right to dispute some of the amounts. Q Mmhmm A Also part of that - - part of the plea and the long adjournment was to hopefully get the ability to make some payments towards restitution of the victims. Q Exactly - - A And - - Q - - which could mitigate the sentence? A Which could mitigate the sentence. Also - - Q Did he understand that? A Yes, that was one of the reasons we adjourned so far.

As well, there were two holiday considerations which we talked about in open court - - [ 23 ] The accused testified to the effect that the guilty pleas were not voluntary, unequivocal or informed. Further, to allow them to stand would amount to a miscarriage of justice due to the ineffectiveness of his legal representation. Voluntariness [ 24 ] The accused maintains he entered the guilty pleas because he was coerced to do so by his counsel, Mr. Wagner: Page T31, Lines 26 - 29 Q Do you know specifically, whether or not in your own mind, you entered a guilty plea on that day? A No.

Like I don’t believe, I never did anything. Mr. Wagner is the one that coerced me into everything. Page T42, Lines 27 - 38 Q Okay. So that takes me back to you pleading guilty. You apparently, through Mr. Wagner, pled guilty to these charges?

A Yeah, not voluntary. Q Not voluntary? A No. Q Okay. So he forced you? A That’s what I feel, that I was forced into it. Q How - - A He basically scared me into doing it. [ 25 ] Mr. Johnston made numerous references to being scared of the Hell’s Angels but there are several indications that he was not. Mr. Wagner’s file notes indicated that “he was not worried about H.A.” Also, the following viva voce evidence of Mr. Wagner contradicts Mr. Johnston in this respect: Page T116, Lines 17 - 25. Q Did you threaten him with the Hells Angels? A No.

I was very worried, right from the start, when the Hells Angels were - - were subpoenaed, that that could cause problems with him in his life. And we had conversations about it, and he said, No, that was all good. He didn’t have to worry about that - - Q Mmhmm A - - that he was not concerned about any retribution being taken against him by the Hells Angels. [ 26 ] Additionally, Mr. Johnston, according to both he and Mr. Wagner, had earlier offered to testify against the Hell’s Angels in exchange for all charges being dropped against him.

Offering to turn against the Hell’s Angels in return for having one’s own charges dropped does not seem to be the actions of someone manifestly afraid of them. Rather, it suggests the opposite - that the accused was quite prepared to weather any such potential risk if he could secure the ultimate benefit of having his own charges disappear. [ 27 ] Nonetheless, if indeed he was panicked or scared at the time he was considering Mr. Wagner’s advice to plead guilty, his evidence on the expungement hearing clearly demonstrated it was his own perceptions in this regard and not anything said by Mr.

Wagner: Page T25, Lines 36 - 41, T26, Lines 1 - 6

A . . . I never slept at all last night. And I said, Oh, like, what’s the problem? And he said, Have you read the newspaper article? I said, No, I haven’t. I said, I just came straight to court. And he said, Let me pull it up for you. And he pulled it upon his phone. And his phone was really small, so I said, let me try and pull it up on mine. And I pulled it up on mine, and I began to read the article.

And I read the article, and I said: Well, it looks like they just, you know, pick and choose a statement from my - - from my statement that was read in - - or read aloud in the court, and basically it ’s portrayed me as ratting out the HA. [Emphasis added] And further: Page T30, Lines 8 - 12 A In that interview room. Like, I was scared for my - - like my wife and kids at home. Like, they were home alone without me. I was scared that they would read the

article and go do something to my wife and kids while I was in Saskatoon . [Emphasis added] [ 28 ] Unquestionably, Mr. Wagner was of the view that the Crown had a strong case after what he described as an “impactful” opening day where the proposed evidence was succinctly laid out by Corporal Williamson in demonstrative fashion. Mr. Wagner then recommended to the accused to seriously reconsider the renewed offer to plead guilty whereby the Crown would cap its position at three years and the Defence could argue for less based upon disputing the quantum alleged owing to certain of the investors, particularly Mr.

Eldon Dahl, and upon the ability of the accused to make restitution. Further, Mr. Wagner acknowledged that the accused was under tremendous pressure; however, he still believed that, overall, the deal proposed was far more preferable than facing potential jeopardy of five to ten years incarceration given the overall magnitude of the fraud. [ 29 ] Mr. Johnston had the opportunity to speak to his wife by telephone in the presence of Mr. Wagner and then privately, to discuss the plea arrangement. He then decided to proceed notwithstanding he knew how upset his wife was concerning this prospect.

In other words, he made his decision to go ahead after canvassing matters with his wife (which she confirmed in her evidence) and discussing the pros and cons of such action. [ 30 ] Certainly Mr. Wagner’s comments about further articles and coverage getting worse, would have had an influence on Mr. Johnston. Clearly, though, as indicated, it appears to be his own opinion, not that of his counsel, concerning how the Hell’s Angels would view the newspaper

article and what they might do as a result. To say that somehow Mr. Wagner’s comments about further newspaper articles would confuse or panic him is, at best, disingenuous. He already appeared concerned enough about the Hell’s Angels and potential news coverage of the trial to ask his counsel to seek a publication ban, well before any consideration of guilty pleas. [6] [ 31 ] Being under pressure in itself is certainly understandable given the circumstances. However, it would have to be of such a nature as stated by Doherty JA in R v T(

R) I , supra : “18 . . . Absent, credible and competent testimony that those emotions reached a level where they impaired the Appellant’s ability to make a conscious volitional choice, the mere presence of these emotions does not render the pleas involuntary.” The evidence does not support that Mr. Johnston was not making a conscious volitional choice. In the words of Mr. Justice Richards in Leonard the decision to plead guilty “. . . for reasons the accused regards as appropriate” [7] is his prerogative.

He certainly was not coerced to do so. [ 32 ] Finally, the accused himself acknowledged in cross-examination that he could have rejected his counsel’s advice: Page T50, Lines 32 - 41, Page T51, Lines 1 - 7 Q And your words to this court were that you should plead guilty is what he said? A He said - - he advised me to plead guilty.

Q Was it, you should plead guilty, or he advised you? A Both. Q Okay. And you were aware that you can refuse his advice; correct? A Yeah, I wasn’t really thinking about that, at that time, no. Q That wasn’t my question. A Yeah. Q You were aware you can refuse his advice; correct? A Sure. Q I’m sorry? A Sure. Unequivocal [ 33 ] The process of entering the guilty pleas was more than merely informing the Court that the accused now wishes to plead guilty to all counts of both Informations.

All of the counts on the Information ending 430 had to be rolled into Count #1 and were done so by name and guilty pleas entered thereto. Guilty pleas were then made to counts 15 and 16 separately. According to Mr. Johnston’s evidence, he acknowledged that this very discussion took place with Mr. Wagner prior to formally entering the pleas. [8] [ 34 ] Following a break, counts 13 and 14 were excised from the initial guilty pleas because the amounts were under $5,000.00 and a further guilty plea entered on a combined count 13 relating to the two named individuals.

Counsel then spoke to changing conditions of the Recognizance to, inter alia , afford the accused the opportunity to earn income for the purpose of making restitution to the victims. It is difficult to see how all of this amounted to any equivocation by the accused as to the entry of the guilty pleas.

Rather, it would seem to underscore or endorse the notion that the accused accepted he had defrauded these victims and wanted to try and to do the right thing by attempting to repay them. [ 35 ] Subsequently, at the expungement hearing, the Court was apprised of the “deal” to plead guilty whereby the accused could dispute the quantum of what the Crown alleged in hopes of sentence mitigation. For example, Mr. Wagner testified there were aspects of Mr.

Eldon Dahl’s loss pegged at $595,450.00 that he could challenge although, in his view, it would not have had any significant impact overall. [ 36 ] In any event, the quantum of each amount of the alleged fraud would not have to be exactly agreed to in advance. As stated in R v Ross [9] “ . . . Significantly, the Code does not require that the Crown or the Court read in a Statement of Facts prior to taking a guilty plea.

It is enough that the accused understands the essential elements of the offence.” Seeking to whittle down some of these amounts would be useful for restitution and possibly length of sentence, but does not detract from the accused’s understanding and

acknowledgement of the essential elements of the fraud itself. [ 37 ] In

summary, the accused was well aware of the specifics and scope of the alleged fraud at the time the pleas were entered, charges having been laid nearly two years prior. He would have been possessed with Crown disclosure for this period and, as well, had advice from several experienced legal counsel that he engaged throughout. He was made fully aware of the nature of the police investigation and provided a lengthy warned statement to Corporal Williamson in May, 2012. [ 38 ] Mr. Johnston then had the benefit of hearing the Crown’s

summary on the opening day of trial outlining with clarity the nature and structure of the alleged fraud and the precise amounts that each of the investors claimed to have been defrauded out of. Although this in itself was not evidence, it was certainly capable of providing full knowledge of where and how the Crown’s case was heading. Given all of the circumstances he would not have been caught off guard or surprised in any possible way.

He chose to enter guilty pleas, without qualification, thereby dispensing with the proof of these detailed allegations that he defrauded these investors and that he utilised and possessed proceeds of crime. Informed [ 39 ] On this issue, the accused gave long, tortured and evasive answers on cross-examination at the expungement hearing. His evidence progressed through not knowing he even pled guilty to not understanding what a guilty plea meant to not understanding the consequences, all of which were eventually conceded: Page T32, Lines 36 - 41, Page T33, Lines 1 - 24 Q Mr. Ritter: So Mr.

Johnston, why did you plead guilty? A I don’t really understand that I did plead guilty because it wasn’t really explained to me properly in the room what was actually happening. Q So I guess we should get to the basics. Did you plead guilty to these charges? A Mr. Wagner did. Q So -- A I thought I was going to have to say something in court. Q Okay. So I don’t quite understand. You think you pled guilty when -- A Well, I know now that a guilty plea was entered -- Q Okay.

A – but at the time I was so overwhelmed I didn’t really know what was happening. We got back to court, and I didn’t know what was going to happen next. Q So you didn’t know that you pled guilty? A I understood that he was pleading guilty. That was it. I thought -- Q To who? A Like, when I was sitting in the courtroom, and I heard him talking to the Judge and to you, that ’s when I was understanding that he was pleading guilty for me , but I figured that the Judge was going to say, hey, are you actually pleading guilty here?

Like, your lawyer is just saying this. [Emphasis added] Q Oh, so you didn’t know that you pled guilty? A Not necessarily, no. I was so confused in there. Page T57, Lines 3 - 7 Q And what did you think pleading guilty meant? A I didn’t know what it meant. He told me that’s just what I should do. Q You – what – you had no idea what pleading guilty meant? A No. Page T58, Lines 20 - 41, Page T59, Lines 1 - 24 Q Well, you know not guilty means you didn’t do anything wrong, in general terms -- A Mmhmm. Q – correct? What do you think guilty means?

A I figured that guilty meant that you were guilty of maybe some of the stuff, but not all of it, and I didn’t fully understand what a guilty meant. Like, I didn’t understand until after, when I had hired separate counsel in Calgary that you plead guilty that you’re admitting to all of those facts. And I was never explained that because I would never have done it if I knew that I had to admit to everything.

Q So – but in general, guilty means you’ve done something wrong; correct? A Correct. Q Okay. And you’re admitting to the court that you’ve done something wrong; correct? A Well, I figured that that was just part of what – like, I didn’t even think about it; right? Q Okay. And when you plead guilty, sir, do you understand that there will be consequences. A When you plead guilty? Q Yes. A Yes. Q In other words, there will be a sentence imposed -- A Mmmhmm. Q – correct? A Mmhmm. Q Okay. And did you have any idea when you instructed Mr. Wagner to plead guilty what type of sentence you might expect? A No.

Well, he – he told me the three-year deal was on the table, and he told me if I didn’t take that, that I could – like I could get the max. and I said, Well, I – I don’t want to plead, or I don’t want to take a three-year deal. Q You – I don’t think you quite answered my question, sir. You understood that if you plead guilty there will be consequences; right? A Mmhmm. Q And those consequences, did you understand that those consequences could include jail. A Yeah, he said It could include jail.

Page T60, Lines 8 - 19 Q Well, you’re -- A I never – it was never discussed with me how long I would be facing. All that was told to me is that if you came up with money, it would help your case, and I said, Okay. Q Absolutely. In fact, that discussion – as a matter of fact, Mr. Johnston, one of the reasons why sentencing didn’t happen right then and there -- A Mmhmm. Q – was to give you a chance to come up with some money to pay restitution to the victims of your crimes?

A Correct. [ 40 ] All of the above was precipitated by the accused acknowledging in examination-in-chief that he in fact knew he pled guilty: Page T29, Lines 11 - 27 Q When you went back into the court after those 25 minutes [10] , what’s your understanding of what happened in the courtroom? A I didn’t – like, I thought I was going to have to, like, stand up and say to the Judge or to the clerk or to somebody that I was guilty of something. And Mr. Wagner stood up and just started talking and saying that there was a change of plea or whatever, and then Mr.

Ritter stood up, and I was like, I was so confused on what was going on and what was happening. I – like, I honestly didn’t know what was happening. Q Did you understand whether or not you’d entered pleas to any charges, guilty pleas to any charges on that day? A Well, the only reason I know that – that the guilty plea was being entered is because they said they were going to combine the charges into like a few charges , so it made it sound like I was – you know, I was going to be pleading guilty to just a few charges or something, but I didn’t understand, like, what I was actually pleading guilty to.

If I was pleading guilty, what was I pleading guilty to? And nothing was really said in court. [Emphasis added] Miscarriage of Justice [ 41 ] The accused asserts that permitting the guilty pleas to stand would amount to a miscarriage of justice because he was ineffectively represented by counsel i.e. for various reasons Mr. Wagner was incompetent in handling his case and counselling him to

plead guilty. [42] In R v B(GD)[11], the Supreme Court of Canada stated at para. 27: Incompetence is determined by a reasonableness standard. The analysis proceeds upon a strong presumption that counsel’s conduct fellwithin the wide range of reasonable professional assistance. The onus is on the appellant to establish the acts of omissions of counselthat are alleged not to have been the result of reasonable professional judgment.

The wisdom of hindsight has no place in thisassessment. [43] Our Court of Appeal in R v Kim[12], at para. 36, set out the process to implement when considering this argument: [36] An accused represented by counsel is entitled to receive effective legal assistance pursuant to ss. 7 and 11(

d) of the Charter. Anappellant may therefore challenge a conviction on the basis that ineffective assistance of counsel occasioned a miscarriage of justice. Theappellant must establish the facts on which the claim of incompetence is based, that the representation provided was incompetent, andthat the incompetent representation resulted in a miscarriage of justice. Incompetence is determined by a reasonablenessstandard. However, the wisdom of hindsight has no place in this assessment and counsel’s actions must be assessed against thecircumstances that existed at the time.

See R v Joanisse (1995), (ON CA), 102 CCC (3d) 35 (Ont CA). Moreover,allegations of incompetence or ineffectiveness of trial counsel must meet a strong presumption of competence. See R v B (GD), 2000SCC 2011 SKCA 74 22, 2000 SCC 22 , [2000] 1 SCR 520. In R v Qiu, 2010 ONCA 736, 268 OAC 352, Lang J.A.aptly commented: 15 I assess the appellant’s evidence cognizant of her motive to conceive or reconstruct a scenario in her mind that would enable her tosecure a retrial and mindful not to employ hindsight in assessing the discussion between counsel and client and any decision taken at thetime of trial.

I approach trial counsel’s evidence with the presumption that he appreciated the basic principle that an accused has the rightto testify and that the decision whether to do so must be made by the accused and not by counsel. Where unfairness is said to result fromthe incompetence of counsel, the appellant must show there was a reasonable probability that the result might have been otherwise hadhe received competent legal representation (Joanisse).

Finally, an appellate court is generally not required to embark upon an assessmentof counsel’s competence unless it is satisfied that the conduct in issue resulted in a miscarriage of justice. [Emphasis added] [44] The accused cited many examples of Mr.

Wagner’s alleged incompetence which included, principally, failing to adequatelyprepare for trial, failing to meet with him to review the trial process and prepare to testify, failing to provide all the disclosure to him,cracking jokes at inappropriate times, failing to explain the consequences of the guilty plea, failing to make arrangements for a handwriting expert[13], allowing large portions of the Crown’s case to be entered by way of hearsay inadmissible evidence, and failing toadequately consider and advise regarding possible defences, particularly duress.

Although most, if not all, of these criticisms would haveno connection to entry of the guilty pleas, each will nonetheless will be addressed by the Court. [45] The latter two points made by the accused regarding inadmissibility of evidence and failing to advise regarding defences, willbe dealt with separately. As far as the other arguments are concerned, the Court finds that they have absolutely no merit. Mr. Wagnercontradicted the accused on all of these allegations (except for cracking jokes which he said was his style to lighten the mood). Wherethe evidence differs in this regard between he and Mr.

Johnston, the Court prefers and accepts that of Mr. Wagner who testified in astraightforward and candid manner even when it related to his own shortcomings. By contrast, Mr. Johnston was self-serving, evasiveand contradictory in large portions of his evidence. Further, Mr. Wagner testified he had booked off the entire three weeks to devote tothis trial. Accordingly, there would be ample time throughout to attend to matters as they unfolded including preparing his client totestify, all at the appropriate stages. [46] In his written brief, Mr. Johnston stated at para. 240 “. . . most problematically, Mr.

Wagner failed to object to large amountsof inadmissible evidence being tendered during the trial proper through a police officer witness” and . . . “there is no determination ofwhether this subsequent evidence was going in as narrative or for the truth of its contents”. Subsequently, at para. 241 he states “. . .without a limitation, evidence tendered goes in for the truth.” [47] All of these submissions are completely in error as evidenced by the following exchange at trial: Page T12, Lines 38 - 41, Page T13, Lines 1 - 25

MR. WAGNER: Your Honour, that ’ s a hearsay question. I believe the witnesses will be coming later to talk about the pitch. Corporal Williamson telling what they told him is clearly -- THE COURT: Well -- 12 MR. WAGNER: -- hearsay. THE COURT: -- I think, just for the purpose of the narrative. I mean, it ’ s not evidence, per se, as to what the truth of it is. I guess -- 67 MR. RITTER: Exactly. This -- 89 THE COURT: -- he just -- just -- MR. RITTER: -- is all part of the narrative, Your Honour. THE COURT: I think it would give a better understanding to the Court. In any event, you ’ re quite right, Mr.

Wagner, it ’ s not evidence per se. The investors themselves will give that, as to what was said directly to them and what they, of course, did; but, I think, for purposes of just outlining the background and so forth, I can accept that evidence -- MR. WAGNER: Thank you, Your Honour. THE COURT: -- and not for the proof of the truth of it. MR. RITTER: Yes. [Emphasis added] [ 48 ] As noted, the purpose of this evidence was for a narrative for the benefit of the Court and not in any sense, as clearly stated, tendered for the proof of the truth of its contents. This would come later from the investors themselves.

In response to Mr. Wagner’s objection, the Court ruled unequivocally on the specific and limited purpose for which this evidence was being tendered and accepted by the Court. [ 49 ] The accused also raises that Mr. Wagner failed to recognize potential defences including identification, mens rea, and particularly, duress. Suffice to say with regard to the first two points, Mr. Wagner is a lawyer of some 19 years standing at the bar and has handled many significant criminal cases including complex fraud and murder.

The Court is well satisfied that he would have been acutely aware of the elements of the offences and would have advanced appropriate arguments where supported by the evidence, irrespective of whether he believed his client or not in this regard. [ 50 ] The accused however principally raises the failure of Mr. Wagner to apprise him of the defence of duress dealing with the alleged extortion by the Hell’s Angels of significant portions of monies that the accused received from the investors.

[ 51 ]

Section 17 of the Criminal Code defines duress as follows: A person who commits an offence under compulsion by threats of immediate death or bodily harm form a person who is present when the offence is committed is excused for committing the offence if the person believes that the threats will be carried out. . . [ 52 ] Nowhere in Mr. Johnston’s submissions or indeed in his testimony, is it posited that he was under duress to commit the crimes alleged. To the contrary, Mr. Johnston testified that he has always maintained his innocence from the outset and that in fact the monies were loans [14] .

If one were to accept this claim, how then would the defence of duress have any air of reality in relation to the commission of the crimes as charged? On the one hand, Mr. Johnston says he voluntarily obtained the monies as loans; on the other hand, he says he was under duress to obtain these funds. These are incompatible propositions and defences which cannot stand together. [ 53 ] If Mr. Johnston was extorted by the Hell’s Angels after the fact, this would explain where a portion of the investors money was utilised, along with various other personal acquisitions by the accused.

It would not address the actual commission of the offences. [ 54 ] In R v Yarlasky [15] , the accused entered a guilty plea to a charge of obstruction and then sought later to expunge it. The basis of the guilty plea related to asking the complainant to change her statement regarding an alleged threat made by the accused’s husband because he was on drugs at the time.

The Court of Appeal found there was credible evidence in the transcripts of the bail hearing and fresh evidence filed to show that the accused actually believed her husband was on drugs which potentially would have afforded her a defence to the charge of obstruction. The same cannot be said in the present case where no factual nexus would exist to the crimes being perpetrated. [ 55 ] Apart from the issue of duress as it relates to the commission of the offences, the accused does not allege that the entire amount of the fraud in excess of $1.2 million falls into this category.

Rather, in his statement, he refers to $200,000.00 and subsequently at the expungement hearing the sum of $500,000.00, leaving the balance unexplained. Accordingly, the defence of duress could not apply to the whole of the charges in any event. [ 56 ] Mr. Johnston also testified to having being associated with the Hell’s Angels for roughly five years between 2000 and 2005 having been a supplier of tattoos and clothing for three of these years. Such previous affiliation, in itself, would make the defence of duress questionable at best.

In R v Ryan [16] at para. 77 the Court stated: [77] The Court of Appeal’s conclusion stands for the proposition that courts must take into account the accused’s voluntary assumption of risk, a natural corollary of the unavailability of the defence of duress to those who wilfully engage in criminal conspiracies or organizations. This is consistent with the principle of moral involuntariness.

An accused that, because of his or her criminal involvement, knew coercion or threats were a possibility cannot claim that there was no safe avenue of escape, nor can he or she truly be found to have committed the resulting offence in a morally involuntary manner. [ 57 ] Also, in R v Moore [17] , even though the accused had a possible defence, the Court held that this does not mean that the guilty pleas entered were not valid: 41 Clearly, there is, based on the representations made to the Court, a connection between the Accused and the grow operation, that connection being a recent BC Hydro bill in the Accused's brother's name.

There is also a defence which could be pursued. However, the fact that there is a possible defence does not mean that the Accused is not guilty. It could well mean that the Accused is guilty but that there are some difficulties with the Crown's case. The Accused and presumably his counsel, Mr. Aartsen, assessed those matters both

initially and subsequently on July 19-21, 2004 when a decision was made to plead guilty to this offence and others. . . . 53 It is possible that the Accused may have had a defence to the production charge. But when subsequent events occurred and he was presented with a resolution to that matter and others he made the decision to accept responsibility and plead guilty to the offence.

I am not satisfied that he was motivated by his need to be released in order to further pursue his drug lifestyle but rather I am persuaded that he plead guilty as part of a larger “deal” to resolve that and other matters and in order to save Ms. Read from facing criminal charges. [Emphasis added] [ 58 ] Further, in R v Carty [18] , the accused applied to expunge a guilty plea on an aggravated assault charge where he had struck the complainant on the head with a baseball bat defending his friend who was being choked by the complainant. The accused criticized his counsel, Mr.

Linley, for failing to put forth a defence based on the accused’s contentions. The Court stated the following however: 40 [t]he shortcomings in Mr. Linley's performance do not, however, undermine the essential validity of the guilty pleas. At best they demonstrate, with the benefit of hindsight, that Mr. Linley could have done more to afford the appellant a better opportunity to consider his options. That conclusion does not, however, mean the pleas should be set aside.

The appellant must demonstrate the invalidity of the pleas, not merely that he could have been given a better opportunity to consider his position. 41 Mr. Linley frankly acknowledged that he told the appellant that in his view the appellant did not have a viable defence to the charge involving the assault with the baseball bat. Mr. Linley also testified that the appellant had difficulty accepting this because in his mind it was appropriate for him to have come to the aid of his friend. 42 Mr.

Linley cannot be criticized for advising the appellant, even in strong terms, of his opinion as to the merits of any proposed defence. Mr. Linley owed his best advice to the appellant even if that advice was difficult for the appellant to accept. The appellant's difficulty in accepting Mr. Linley's opinion no doubt explains his vacillation prior to the plea and his second thoughts after the plea. That vacillation is not, however, a basis upon which to allow an accused to retract his guilty pleas on appeal. I would add that on the facts of this case, I agree with Mr.

Linley's opinion that the appellant had no defence on the merits to the charge of assault causing bodily harm. [Emphasis added] [ 59 ] Finally, the accused complained that Mr. Wagner failed to follow his instructions in requesting a publication ban at the outset of the trial. However, absent any potential Charter relief, there is no statutory basis to request a publication ban under the Criminal Code (this Court having no inherent jurisdiction to do so).

Publication bans under the Criminal Code deal with bail hearings, preliminary hearings, sexual offences, youths and protection of identity of justice system participants (which does not include the accused). [19] [ 60 ] A related provision dealing with exclusion of the public can be found in s. 486 of the Criminal Code : s. 486 (1) Any proceedings against an accused shall be held in open court, but the presiding judge or justice may order the exclusion of all or any members of the public from the court room for all or part of the proceedings if the judge or justice is of the opinion that such an order is in the interest of public morals, the maintenance of order or the proper administration of justice or is necessary to prevent injury to international relations or national defence or national security.

(2) For the purposes of subsection (1), the “proper administration of justice” includes ensuring that (

a) the interests of witnesses under the age of eighteen years are safeguarded in all proceedings; and

(

b) justice system participants who are involved in the proceedings are protected. [61] However, banning the public, including the media, from ongoing court proceedings, does not mean access could not be had tothe court record. [62] Notwithstanding, whether the ability to apply for any such order involving publication bans or exclusion of the public existed,it must be borne in mind that such orders are rare and are granted primarily where the interests of the administration of justice are affected.[20] It is highly unlikely that Mr. Johnston’s fears or concerns regarding the Hell’s Angels would override the presumptions thattrials be held open to the public. [63] In

summary, the Court is unable to conclude, based upon all of the evidence, that Mr. Wagner’s conduct fell outside the rangeof reasonable professional assistance. To say that other counsel, in hindsight, would have prepared for trial or handled the clientdifferently is not relevant. Further, the allegations of incompetence do not address counsel’s actions in the circumstances as they existed when the pleas were being contemplated.[21] IV CONCLUSION [64] The accused bears the onus to establish on a balance of probabilities that the necessary criteria required for a valid guilty pleahave not been met.

The evidence overwhelmingly supports the contrary conclusion that the pleas entered were voluntary, unequivocaland informed and that no miscarriage of justice would occur by permitting the guilty pleas to stand. [65] The evidence supports the conclusion that Mr. Johnston made a calculated decision to take the deal being offered by theCrown which would have the added benefit of avoiding any potential repercussions from the Hell’s Angels.

The sentence of three yearswith the possibility of lowering this by way of sentence hearing and the chance of early parole would reasonably represent the bestpossible outcome in the circumstances, even though he may not have been happy about it. Subsequent regrets some weeks later, ofcourse, would have no bearing on the ability to set his guilty pleas aside. [66] The application to expunge is denied and sentencing shall proceed accordingly. __________________ R.D. Jackson, J [1] Mr.

Wagner acknowledged at the outset there was no issue as to voluntariness relating to admission of this statement (T3, Lines 14 -30). [2] (1992), (ON CA), 17 CR (4th) 247 (OntCA), at para 13; see also R v Fontaine, 2003 SKPC 143, 2003 CarswellSask 726. [3] 2007 SKCA 128 , [2007] SJ No 612; 2007 SKCA 128; See also R v Lyons, (SCC), [1987] 2 SCR 309 (SCC) [4] 2014 SKCA 66 [5] [2013] SJ No 729; 2013 SKPC 200, at para. 26 [6] Transcript p. 17, lines 22 - 31

[7] R v Leonard, at para. 17, quoted at para. 14 of this decision, supra. [8] Transcript page T-29, Lines 11 - 27 - March 30, 2015 [9] 2013 SKCA 45 at para. 29 (CA) [10] The court record reflects this was actually approximately one hour and twenty minutes. [11] 2000 SCC 22, [2000] 1 SCR 520 [B.(G.D.)] [12] 2011 SKCA 74 at para. 36 [13] Mr. Wagner had noted irregularities concerning signatures on certain promissory notes.

Prior to taking any steps regarding ahandwriting expert, he was going to wait until cross-examination of Andy Kotelmach to potentially clear this up thereby avoiding suchpossible expense and complication. [14] Transcript - expungement hearing, March 30, 2015: Page 36, Lines 4 - 23 Q So this was just personal loans? A Mmhmm Q Okay. Why did you need 1.2 million dollars by way of personal loans, sir? A Because I needed it for work. And the money that went to the Hell’s Angels, I never got to put that money into work, it wentstraight to the Hell’s Angels. Q Why? A Because they were threatening me.

Q Why were they - why would they pick on you, Josh Johnston, and say, you know, pay us money or else? A Because they heard that I could get money. Q How could you get money? A They just knew I was doing well in business, and they asked to meet me at an A and W, and that day they confronted me andshowed me pictures of my wife and kids, and told me that if I didn’t give them $100,000.00 that they were going to go after my kids andthey named the school where they went to.

They had pictures of them. [15] (ONCA) [16] 2013 SCC 3 [2013] 1 SCR 14 [17] 2004 BCPC 560 [18] 2010 ONCA 237 [19] See s. 2 of the Criminal Code under the heading “Justice System Participant”.

[20] See R v Mentuck , 2001 SCC 76 , [2001] 3 SCR 442 [21] R v Kim , supra