R v Schaff, 2017 SKCA 103

Court of Appeal for Saskatchewan Docket: CACR2841 Citation: R v Schaff , 2017 SKCA 103 Date: 2017-12-05 Between: Jennifer Schaff Appellant And Her Majesty the Queen Respondent Before: Jackson, Ottenbreit and Caldwell JJ.A. Disposition: Appeal dismissed Written reasons by: The Honourable Mr. Justice Ottenbreit In concurrence: The Honourable Madam Justice Jackson The Honourable Mr. Justice Caldwell On Appeal From: QBCR 934, Estevan Appeal Heard: June 6, 2017 Counsel: Darren K. Kraushaar for the Appellant Beverly L. Klatt for the Respondent Ottenbreit J.A. I. Introduction [ 1 ] Jennifer Schaff appeals against her conviction in the Court of Queen’s Bench for fraud over $5,000 under s. 380(1) (

a) of the Criminal Code . For the reasons hereinafter set forth, the appeal is dismissed. II. Facts and Background [ 2 ] Premium Well Services Limited (PWS) provided various services to oil field clients. Ms. Schaff worked for PWS, first as an independent contractor and then as a salaried employee as the bookkeeper and office manager. She had signing authority for PWS’s bank account as did the owner of PWS, Matthew Schell. She was also given a company debit card that she was authorized to use for company purposes. [ 3 ] By November 2012, the finances of PWS had become a mess.

PWS undertook a review of the finances and determined that between March 1, 2012, and December 20, 2012, Ms. Schaff had made numerous financial transactions that appeared questionable. This was reported to the police and Ms. Schaff was eventually charged regarding these transactions. [ 4 ] The nature of the transactions were described by the trial judge: Those transactions included cheques written on the PWS account to businesses and individuals with whom PWS had no business relationship; cheques written on the PWS account to businesses which appeared to be payments for Ms.

Schaff’s personal debts to those businesses; cheques written on the PWS account to Ms. Schaff without any apparent business-related explanation; cheques written on the PWS account to Ms. Schaff for fuel repayment when it was believed that Ms. Schaff was not entitled to any reimbursement for fuel; purchases and cash withdrawals made using Ms. Schaff’s PWS debit card that either appeared to be non-business related or did not have any proper documentary backing; and electronic transfers of funds to Ms.

Schaff from the PWS account. (Judgment transcript at T3) [ 5 ] Included in those transactions and germane to this appeal were two cheques Ms. Schaff had written on the PWS account. One was dated September 18, 2012, in the amount of $2,500 and the other October 14, 2012, for $3,000. Each was payable to Brent Nostadt. Both were cashed. On the re line of the first cheque, Ms. Schaff had written “Acct payment”; on the second, nothing referencing the purpose of the cheque. Ms. Schaff testified these cheques represented a sponsorship by PWS of Mr.

Nostadt to help him pay fees when he rode a horse in barrel races in Melville. [ 6 ] Mr. Schell testified he was responsible for sponsorships and that he had sponsored only Chris Scholpp Racing and the Estevan Bruins. In cross-examination he also admitted sponsoring the Carnduff Red Devils. Mr. Schell stated that neither he nor PWS had any dealings with Mr. Nostadt, that he had never met Mr. Nostadt and there was no client account in his name.

He testified that he would never have agreed to a horse-related sponsorship because it had nothing to do with his line of work and would have been advertising to the wrong people. Mr. Schell testified that he would have remembered a $3,000 sponsorship if he had authorized one and as well he would have been the one in contact with Mr. Nostadt if there had been discussions about sponsorship. [ 7 ] Two documents relevant to the Nostadt cheques were located in PWS’s office.

One was an undated American Quarter Horse Association Certificate of Registration for a horse named Super French Girl showing Brent Nostadt as the owner. The other was an entry

form and waiver for the Melville Agri-Park Barrel Racing Futurity & Derby held on September 8 and 9, 2012, for the same horse. BrentNostadt was listed as the rider on the entry form, and Jenn Wingert, as Ms. Schaff was known previously, was listed as the horse’sowner. It was admitted by Ms. Schaff that she owned at least one horse that barrel raced and that she had horses stabled at TICA Stables.She had written cheques on the PWS account to TICA Stables for expenses for horses. [8] Ms. Schaff could not say what services or advertising Mr. Nostadt was doing for PWS pursuant to the sponsorship.

Sheindicated she had asked Mr. Schell about the sponsorship and he was fine with it. Ms. Schaff denied owing anything to Mr. Nostadtpersonally. She acknowledged that she agreed to repay PWS for the cheques she had written to Mr. Nostadt but did not have anexplanation why she would have to pay PWS back for a sponsorship. She acknowledged that she had signed her name on the entry formfor the Melville Agri-Park Barrel Racing Futurity & Derby but denied paying Mr. Nostadt for riding her horse and denied being thehorse’s owner.

She testified that just because she signed her name as the owner did not mean she was the owner. III. Decision of the Trial Judge [9] The trial judge first reviewed the elements of fraud. He then instructed himself regarding the principles set forth in R v W.(D.), (SCC), [1991] 1 SCR 742 [W.(D.)], although he did not mention the case by name. He also noted that he couldaccept all, some or none of the evidence of any witness. [10] He then turned to the evidence.

He stated that, at first blush, many of the transactions identified looked very suspicious butthe crucial issue was whether the questionable expenditures were authorized by Mr. Schell. After indicating that the evidence of otherwitnesses was either not compelling or no weight could be placed on it, he determined that whether certain transactions were authorizedcame down to the evidence of Mr. Schell and Ms. Schaff. [11] The trial judge found Mr. Schell on the whole to be a credible witness and thought he did his best to tell the truth but foundthat he could not be described as meticulous. He noted that Mr.

Schell had no recollection of some legitimate business expenses orwhether he had authorized a particular expenditure until confronted with the receipt. He determined that this did not demonstratedishonesty on Mr. Schell’s part, but rather that he ran his business and financial affairs in a haphazard fashion. The trial judge noted thatthe cross-examination of Mr.

Schell revealed many of the questionable transactions were, in fact, loans or advances to employees.Although not all were paid back, they had certainly not been made without his knowledge or approval. [12] The trial judge determined that some of the transactions processed by Ms. Schaff that Mr. Schell had labelled as fraudulentwere completely legitimate. He accepted that Ms. Schaff had never made any electronic transfers and that Mr. Schell frequentlyinstructed her to use her credit card to pay for food and other incidentals or to make cash withdrawals. Many of the purchases made onMs.

Schaff’s card at various businesses were for legitimate business expenses. [13] The trial judge concluded that, although Ms. Schaff was the bookkeeper for PWS during the relevant time and was in chargeof keeping the books, he could not conclude that the sloppy state of the books established a fraudulent intent on her part or that themassive deficiencies in recordkeeping had anything to do with dishonesty. He accepted, for the most part, that Mr. Schell authorizedMs.

Schaff to write the cheques that she signed, including the ones to herself, and to pay out the PWS money that she did. [14] The trial judge determined there was an agreement, however loose it might have been, that Ms. Schaff was going to pay backthe money spent for the non-business expenses and that she intended to do that eventually. In short, the trial judge accepted Ms. Schaff’sexplanations on virtually all of the expenditures except for two. These were the two cheques written to Mr. Nostadt. [15] With respect to those expenditures, the trial judge accepted the evidence of Mr.

Schell that he had not agreed to sponsorMr. Nostadt and that he had never authorized Ms. Schaff to write the cheques to Mr. Nostadt for that purpose. He noted that althoughMr. Schell was generally willing to back off when cross-examined about his assertions that he had not authorized specific transactions,he had stood firm that he had not authorized the two cheques. [16] The trial judge rejected Ms. Schaff’s evidence that she asked for and had received authorization from Mr. Schell to write thesecheques. He gave a number of reasons for doing so as explained in his decision: Ms.

Schaff was unable to describe any benefit that would come to PWS from this alleged sponsorship, and it would appear that thecheques for sponsorship were written after the barrel racing season ended. Furthermore, neither of the cheques to Brent Nostadtcontained anything in the memo line regarding sponsorship. One said “account payment;” the other said nothing. If this were truly alegitimate business-related sponsorship done for tax purposes, one would expect that to be noted, especially since PWS did that to makenon-business-related expenses appear legitimate.

Why wouldn’t they be clear about recording it on something that was actually businessrelated? Furthermore, it was suggested to Ms. Schaff in cross-examination that she was really paying Mr. Nostadt to ride her horse. She deniedthat. But Exhibit P-5 is a nomination from the Melville Agri-Park Barrel Racing Futurity & Derby, September 8th and 9th, 2012. Itappears to be an entry form and a waiver form. In the form, Ms. Schaff, under her maiden of Jen Wingert, signed on July 9th, 2012, asthe owner of the horse. Mr. Nostadt appears to have signed as the rider of the horse. When asked about that, Ms.

Schaff simply said thefact she signed as the owner didn’t mean she was the owner. That was all she had to say. I find that explanation unconvincing andcompletely incredible, and I reject her testimony on that point. (Judgment transcript at T8) [17] He concluded: In short, I’m satisfied beyond a reasonable doubt that Ms. Schaff made two payments to Brett Nostadt, one of $3,000 and one of $2,500,by writing cheques on the PWS account, and that she did not have authorization to do so. I’m also satisfied that despite knowing these

payments were unauthorized, she made them anyway knowing they put PWS at risk of deprivation. … So in the end, I am satisfied beyond a reasonable doubt that the cheques written to Brent Nostadt totalling $5,500 were written without authorization, and that Ms. Schaff knew they were not authorized. (Judgment transcript at T8–T9) The trial judge convicted Ms. Schaff of fraud in respect of the cheques. IV. Issues [ 18 ] Ms. Schaff submits that the verdict is unreasonable. She structures this submission in the form of the two broad issues set forth in her factum: (

a) Did the trial judge commit errors in his approach to the evidence of Mr. Schell and Ms. Schaff? (

b) Did the trial judge err in failing to consider whether all of the evidence raised a reasonable doubt, effectively placing an onus on Ms. Schaff to prove her innocence? [ 19 ] In support of these two issues Ms. Schaff makes numerous arguments, some formulated as errors of law and others as errors of mixed fact and law or fact. The thrust of the majority of them is that the trial judge erred by accepting Mr. Schell’s recollection he had not authorized the Nostadt sponsorship and cheques in light of his finding that Mr.

Schell’s recollection of the authorization of the other transactions, which were determined to be not fraudulent, was unreliable. V. ANALYSIS [ 20 ] I turn first to the law governing unreasonable verdicts. The case of R v Shaoulle , 2015 SKCA 101 , [2016] 2 WWR 246, aff’d 2016 SCC 16 , [2016] 1 SCR 268, provides a good

summary germane to this case: [15] An allegation that a verdict is unreasonable or cannot be supported by the evidence invokes this Court’s authority under s. 686(1) ( a )(

i) of the Criminal Code : Powers 686

(1) On the hearing of an appeal against a conviction or against a verdict that the appellant is unfit to stand trial or not criminally responsible on account of mental disorder, the court of appeal (

a) may allow the appeal where it is of the opinion that (

i) the verdict should be set aside on the ground that it is unreasonable or cannot be supported by the evidence …. [16] Definitively expressed for the first time in Yebes , the standard of review by which to assess whether a conviction is unreasonable or unsupported is well-known: The function of the Court of Appeal, under s. 613(1) ( a )(

i) of the Criminal Code , goes beyond merely finding that there is evidence to support a conviction. The Court must determine on the whole of the evidence whether the verdict is one that a properly instructed jury, acting judicially, could reasonably have rendered. While the Court of Appeal must not merely substitute its view for that of the jury, in order to apply the test the Court must re-examine and to some extent reweigh and consider the effect of the evidence.

This process will be the same whether the case is based on circumstantial or direct evidence [emphasis added]. [17] This test was affirmed in R v Biniaris , 2000 SCC 15 , [2000] 1 SCR 381 [ Biniaris ] where it was also made clear that Yebes applies to the judgment of a judge sitting at trial without a jury.

Speaking directly to the assessment of the unreasonableness of a judge’s verdict, Arbour J., for the Court, stated the following: [37] … The review for unreasonableness on appeal is different, however, and somewhat easier when the judgment under attack is that of a single judge, at least when reasons for judgment of some substance are provided.

In those cases, the reviewing appellate court may be able to identify a flaw in the evaluation of the evidence, or in the analysis, that will serve to explain the unreasonable conclusion reached, and justify the reversal. … [19] Arbour J. concluded her summation of the law pertaining to the appellate assessment of a judge’s verdict on the basis of the unreasonableness of a judge’s verdict: [37] … These examples demonstrate that in trials by judge alone, the court of appeal often can and should identify the defects in the analysis that led the trier of fact to an unreasonable conclusion.

The court of appeal will therefore be justified to intervene and set aside a verdict as unreasonable when the reasons of the trial judge reveal that he or she was not alive to an applicable legal principle, or entered a verdict inconsistent with the factual conclusions reached . These discernable defects are themselves sometimes akin to a separate error of law, and therefore easily sustain the conclusion that the unreasonable verdict which rests upon them also raises a

question of law [emphasis added]. [20] In R v A.G., 2000 SCC 17, [2000] 1 SCR 439 [A.G.], the Supreme Court clarified that where a judge sitting without a jury givesdetailed reasons for judgment, and the judge is alive to the recurrent problems of adjudication, the court of appeal brings no specialinsight to the assessment of evidence.

One matter in particular is addressed: while reweighing the evidence is part of the task of anappellate court when addressing the issue of whether the verdict is unreasonable, the court should not intervene merely because it has adoubt where the trial judge did not (see A.G., para. 29). [21] In another judge-alone case, R v R.P., 2012 SCC 22, [2012] 1 SCR 746 [R.P.], Deschamps J. summarized the most recentlyarticulated examples justifying appellate intervention in judge-alone cases taken from R v Beaudry, 2007 SCC 5, [2007] 1 SCR 190[Beaudry] and R v Sinclair, 2011 SCC 40, [2011] 3 SCR 3 [Sinclair]: [9] … The appellate court may also find a verdict unreasonable if the trial judge has drawn an inference or made a finding of factessential to the verdict that (1) is plainly contradicted by the evidence relied on by the trial judge in support of that inference or finding,or (2) is shown to be incompatible with evidence that has not otherwise been contradicted or rejected by the trial judge (R. v.

Sinclair,2011 SCC 40 , [2011] 3 S.C.R. 3, at paras. 4, 16 and 19–21; R. v. Beaudry, 2007 SCC 5 , [2007] 1 S.C.R. 190) [R.P.]. [21] A substantial number of Ms. Schaff’s arguments that the verdict is unreasonable deal with matters of credibility andreliability. Credibility findings are factual findings entitled to deference and, as such, are to be reviewed on the standard of palpable andoverriding error.

The interplay between credibility findings and an argument of unreasonable verdict was explained by this Court in R vPiapot, 2017 SKCA 69, 15 MVR (7th) 1: [39] With respect to whether the verdict was unreasonable in light of the trial judge’s credibility findings, the governing law wassummarized by this Court in R v R.D.A., 2015 SKCA 100, 465 Sask R 313: [2] Where an accused has alleged an unreasonable verdict, an appellate court may only interfere to set aside the verdict if the appellatecourt is of the opinion the judge could not reasonably have concluded the accused was guilty beyond a reasonable doubt.

Put anotherway, when asked to set aside a verdict, the appellate court looks to see whether on the whole of the evidence the verdict is one that thejudge, acting judicially, could reasonably have rendered: R v Yebes, (SCC), [1987] 2 SCR 168 at para 25, and R vBiniaris, 2000 SCC 15 at para 36, [2000] 1 SCR 381.

To do this, the appellate court must re-examine and to some extent re-weigh andconsider the effect of the evidence, but it must not merely substitute its view for that of the trial judge. [40] In R v R.P., 2012 SCC 22 at para 10, [2012] 1 SCR 746, the Supreme Court noted that deference must be shown by the appellatecourt to a trial court’s assessment of credibility. Justice Deschamps, for the majority, reiterated the applicable principle, saying: [10] Whereas the question whether a verdict is reasonable is one of law, whether a witness is credible is a question of fact.

A court ofappeal that reviews a trial court’s assessments of credibility in order to determine, for example, whether the verdict is reasonable cannotinterfere with those assessments unless it is established that they “cannot be supported on any reasonable view of the evidence” (R. v.Burke, (SCC), [1996] 1 S.C.R. 474, at para. 7). [22] In short, when the focus of whether the verdict is unreasonable rests on a credibility assessment of the trial judge, thatassessment is entitled to deference unless it is established that it cannot be supported on any reasonable view of the evidence. [23] Ms.

Schaff acknowledged that germane to this appeal was the principle that, with respect to findings of credibility andreliability, the trial judge was entitled to accept some, none or all of the evidence of both Mr. Schell and Ms. Schaff on any issue (R vPittiman, 2006 SCC 9 at para 7, [2006] 1 SCR 381). [24] I turn now to Ms. Schaff’s issues and her arguments. A. Did the trial judge commit errors in his approach to the evidence ofMr. Schell and Ms. Schaff? (

i) Reliance on incomplete or inaccurate records [25] Ms. Schaff argues the trial judge was inconsistent in his reliance on the company records to ground his conclusions regardingthe reliability of her and Mr. Schell’s testimony. Ms. Schaff submits that the trial judge erred in law by relying on the absence of anynotation of a sponsorship on the cheques as evidence of her guilt contrary to his earlier findings that the sloppy state of the companybooks was not indicative of fraud.

She argues that in view of the state of the books, the trial judge could place no weight on the lack ofnotation on the cheques and that lack of notation should not have informed his finding on her credibility. [26] Ms. Schaff’s argument is based on an error of fact not an error of law. The weight to be given to certain evidence is a questionof fact (R v Alves, 2014 SKCA 82 at para 57, [2014] 12 WWR 63).

Moreover, no legal error can arise over the factual inference the trialjudge drew from the lack of proper notation on the cheques or the weight assigned to this evidence (R v George, 2017 SCC 38 at para24, 349 CCC (3d) 371, R v J.M.H., 2011 SCC 45 at para 28, [2011] 3 SCR 197 [J.M.H.]). [27] Ms. Schaff overstates the conclusion of the trial judge regarding the sloppy bookkeeping, part of which included the failure toproperly notate transactions. The trial judge found that sloppy bookkeeping did not, on the whole, demonstrate a fraudulent intent byMs. Schaff.

Such a conclusion does not preclude and is not inconsistent with a finding that a failure to properly notate a specifictransaction could not also be used as a factor informing whether the evidence regarding the purpose of such transaction was credible andwhether the transaction was fraudulent. [28] Although Mr. Schell did not tell his employees to fill in the re line on the cheques, not all cheques failed to have a notationregarding the purpose of the cheque. The trial judge identified some that did: fuel repayment, account repayments and TICA Stables. The

re line of other cheques was inaccurate. However, the trial judge observed that some cheques for non-business purposes were made to look as if they were business related so the payment could be used to obtain a tax credit. [ 29 ] The trial judge distinguished the absence of notation of a sponsorship on the Nostadt cheques from the absence of notation generally on other cheques precisely on the basis that PWS had gone to the trouble of noting non-business-related expenses as legitimate business expenses for tax purposes.

He concluded that it would have been unusual that the purpose of a legitimately tax-deductible sponsorship was not noted on the cheques by Ms. Schaff. This makes sense given that the $5,500 sponsorship alleged by Ms. Schaff was substantial. [ 30 ] The trial judge’s approach to the lack of notation of sponsorship was not inconsistent. He explained the distinction he made and that explanation is reasonable. It was open to him to use the lack of notation and inaccurate notation on the cheques as a factor in determining the credibility of Ms.

Schaff and determining whether the cheques were authorized. [ 31 ] I cannot say that the trial judge made a palpable and overriding error in relying on the lack of notation of the purpose on the cheques. (ii) Failure to consider all the evidence in assessing Mr. Schell’s credibility [ 32 ] Ms. Schaff next argues that, because it was not mentioned in his reasons, the trial judge committed an error of law by failing to consider the relevant testimony of a PWS employee, Ms.

Fedyk. [ 33 ] In R v Bramley , 2009 SKCA 49 at para 39 , [2009] 7 WWR 226, this Court reiterated that a failure to consider relevant evidence is an error of law. However, a trial judge is not required to refer to every item of evidence considered or to detail the way in which each item is assessed ( J.M.H. at para 32 ) provided the reasons show that he or she grappled with the substance of the live issues before him ( R v R.E.M. , 2008 SCC 51 at para 64 , [2008] 3 SCR 3). [ 34 ] Ms. Schaff submits Ms. Fedyk’s testimony was sometimes at odds with Mr.

Schell’s testimony and this tended to diminish his credibility giving, as an example, Ms. Fedyk’s testimony that Mr. Schell had approved Ms. Schaff’s use of company cheques for a holiday. Her testimony in that respect is of little consequence because, in the end, Mr. Schell admitted he had allowed company employees to use or borrow PWS funds. [ 35 ] Ms. Schaff also argues that the trial judge ignored Ms. Fedyk’s testimony that she had, at the behest of Mr. Schell, lied to the police to implicate Ms. Schaff. In cross-examination, Mr. Schell denied urging Ms. Fedyk to go to the police or to lie. Ms.

Schaff submits that the trial judge should have considered Ms. Fedyk’s evidence and concluded that Mr. Schell had no credibility generally and no credibility specifically with respect to the cheques. However, little can be made of Ms. Fedyk’s short testimony on this topic. None of her testimony related specifically to the Nostadt cheques. Taken with the other evidence relied on by the trial judge regarding the Nostadt cheques, Ms. Fedyk’s testimony sheds little light on Mr.

Schell’s credibility specifically regarding the cheques. [ 36 ] I am not satisfied that the trial judge ignored or failed to take into consideration Ms. Fedyk’s evidence despite the fact that it was not mentioned in his reasons. It is obvious, reading the decision as a whole, that he was alive to the issue of Mr. Schell’s credibility and reliability and carefully considered those matters. There is no reason to believe the trial judge did not consider all the evidence touching on those issues, including Ms. Fedyk’s evidence, as minimally probative of the issue as it was. (iii) Piecemeal approach [ 37 ] Ms.

Schaff submits that the trial judge did not consider the whole of the evidence in determining whether fraud regarding the Nostadt cheques had been proven beyond a reasonable doubt. She submits the trial judge ignored the cumulative effect of Mr. Schell’s unreliable memory on every other impugned transaction he did not find fraudulent. [ 38 ] It is an error of law for a trial judge to examine evidence in a piecemeal fashion ( J.M.H. at paras 31 and 40 , see also R v Morin , 2017 SKCA 38 at para 17 ).

Implicit in the piecemeal approach is that the trial judge has considered each piece of evidence or testimony on the criminal standard of proof instead of considering the whole of the evidence on that standard. However, Ms. Schaff really argues that the trial judge erred by failing to consider Mr. Schell’s impugned reliability of recollection on the other transactions when considering the Nostadt cheques and whether they were fraudulent. Put another way, she argues that the analysis on Mr. Schell’s credibility on those other transactions was siloed and played no

part in the determination of reasonable doubt regarding the Nostadt cheques. I disagree. [ 39 ] The Crown proffered numerous transactions, any one or more of which might have been found fraudulent. Ms. Schaff admits that it was open to the trial judge to examine the evidence on each transaction separately and determine if the Crown had proven its case beyond a reasonable doubt regarding each transaction. That depended on whether the transaction was authorized and came down to Mr.

Schell’s reliability of recollection about each transaction. [ 40 ] There is nothing in the trial judge’s decision that demonstrates he failed to take into consideration Mr. Schell’s faulty recollection on other transactions when he considered whether the two cheques had been authorized by him. He was alive to the totality and cumulative effect of the evidence of the other transactions. I say this because he specifically distinguished Mr. Schell’s reliability of recollection regarding the Nostadt cheques from his reliability of recollection with respect to all the other transactions. He considered Mr.

Schell’s evidence on the cheques and sponsorship in the context of and in contrast to all those other transactions with the recognition that his recollection on those other transactions was unreliable. [ 41 ] The manner in which the trial judge did his analysis and the content of his reasons do not indicate that he looked at the evidence of Mr.

Schell’s credibility and the evidence regarding the sponsorship, the cheques and the circumstances surrounding the cheques in a piecemeal fashion or in isolation when determining whether the Crown had proven its case beyond a reasonable doubt. (iv) Failure to consider reliability as a whole

[42] The substance of this argument challenges the trial judge’s finding of the reliability of Mr. Schell’s evidence regarding theauthorization of the Nostadt cheques directly. Ms. Schaff mischaracterizes her argument as an error of law. A finding of credibility is aquestion of fact (R v R.P., 2012 SCC 22 at para 10, [2012] 1 SCR 746). [43] There is a difference between credibility and reliability. This was described by Watt J.A. in R v H.C., 2009 ONCA 56 at para41, 241 CCC (3d) 45: [41] Credibility and reliability are different.

Credibility has to do with a witness’s veracity, reliability with the accuracy of thewitness’s testimony. Accuracy engages consideration of the witness’s ability to accurately i. observe; ii. recall; and iii. recount events in issue. Any witness whose evidence on an issue is not credible cannot give reliable evidence on the same point. Credibility, onthe other hand, is not a proxy for reliability: a credible witness may give unreliable evidence: R. v.

Morrissey (1995), (ON CA), 22 O.R. (3d) 514, at 526 (C.A.). [44] Findings of reliability are factual determinations subject to the same standard of review as findings of credibility. In R vSanichar, 2013 SCC 4, [2013] 1 SCR 54, the Court adopted the reasons of Laskin J.A., who had dissented in the court below. LaskinJ.A. noted at paragraph 72 of his decision: [72] … [A]lthough credibility and reliability are distinct concepts, they both involve factual determinations that, as my colleaguenotes, attract significant deference from a reviewing court: see R. v. R.W.B. (2003), (ON CA), 174 O.A.C. 198, atpara. 9.

An appellate court should not interfere with a trial judge’s assessment of the reliability of a complainant’s evidence simplybecause it would have arrived at a different result. (R v Sanichar, 2012 ONCA 117, 280 CCC (3d) 500) [45] Ms. Schaff submits the trial judge erred in finding Mr. Schell’s recollection about the Nostadt cheques and sponsorshipreliable because he had no basis to differentiate that reliability. She argues that, in examination-in-chief, Mr.

Schell had emphatically andconfidently denied authorizing virtually every transaction flagged by the Crown, examples of which were the cheque written to ChazWingert, her brother; cheques written to Lee Schaff, her husband; and cheques written to TICA Stables, all of which were found to be notfraudulent. She submits that when presented with contrary information on a transaction or pressed on the strength of his recollection,Mr. Schell backed away from his answers in examination-in-chief.

She argues that his testimony that he did not authorize the Nostadtcheques was no less confident and emphatic (and implicitly the reliability of his recollection must therefore be no greater than withrespect to the other transactions). She argues, given the trial judge’s findings about Mr. Schell’s vagueness and indecision on almost allother transactions, his finding that Mr. Schell’s recollection was reliable on the Nostadt cheques indicates that he failed to look atMr. Schell’s testimony as a whole when assessing his credibility. I disagree. [46] It was open to the trial judge to accept Mr.

Schell’s testimony that he did not recollect authorizing the Nostadt cheques andinfer the cheques were not authorized despite that he did not accept Mr. Schell’s recollection on all the other transactions. Hisexplanation for making this distinction is supported by the evidence. [47] Mr. Schell denied authorizing the cheques to Mr. Nostadt. The trial judge noted that, unlike many or most of the othertransactions that Mr.

Schell admitted on cross-examination were authorized or could not say for certain were unauthorized, he stood firmwith respect to the Nostadt cheques. [48] When shown the Nostadt cheques and asked about sponsorship, Mr. Schell indicated he was not contacted by Mr. Nostadt anddid not discuss a sponsorship with him. His answer to the suggestion that Ms. Schaff discussed with him the idea of displaying the PWSname on a horse trailer was “[t]his was not sponsored”.

When it was pointed out to him that he might have forgotten a jersey sponsorshipfor the Carnduff Red Devils, implying that he also forgot the Nostadt sponsorship, he responded that he would have remembered a$3,000 sponsorship and been in contact with the man (Nostadt) as owner of the company. He confirmed that public relations were hisarea in the company as opposed to Ms. Schaff’s, although Ms. Schaff testified that they were both responsible for that area. In his reviewof the corporate records and in subsequent discussions with Ms. Schaff, Mr.

Schell was never provided an explanation as to why thepayment was made. He noted that many oil companies sponsor hockey jerseys but that horses had nothing to do with his line of work orthe people that he knew. He denied horse racing went hand in hand with work in the oil patch and testified that advertising for horses andbarrel racing was advertising to the wrong people. All of this was a significant contrast to his vague and inaccurate recollection of othertransactions and their purpose. [49] The trial judge also relied on Ms. Schaff’s testimony about the cheques. Ms.

Schaff could describe no benefit PWS was toreceive from any sponsorship. The cheques were written after the barrel racing season was over. Although apparently a legitimate taxdeduction as a sponsorship, there was no notation respecting sponsorship on the cheques despite that PWS had noted other non-deductible expenses as deductible for tax purposes. All of this supported the reliability of Mr. Schell’s testimony that he had not madesuch a sponsorship. [50] The trial judge’s conclusion regarding Mr.

Schell’s reliability of recollection is also supportable on the basis that thecircumstances surrounding the alleged Nostadt sponsorship stood out from other sponsorships he had made. He was responsible forsponsorship at PWS. Given that PWS had only made three past sponsorships, each no greater than $3,000, and given the magnitude ofthe Nostadt payment, i.e., $5,500, Mr. Schell’s testimony that he would have remembered such a sponsorship is especially compelling.Unlike many of the other transactions processed by Ms.

Schaff, which were either business or employee related, the Nostadt cheques hadno discernable connection with the business of PWS.

[51] The appellate approach to findings of reliability is deferential. I am not satisfied that the trial judge’s determination thatMr. Schell’s recollection was reliable when he testified in effect that he had not authorized the Nostadt sponsorship could not besupported on any reasonable view of the evidence. (

v) Applying a stricter level of scrutiny to Ms. Schaff’s evidence [52] The law germane to the “different standards of scrutiny” argument was encapsulated in R v McGown, 2016 ONCA 575, 341CCC (3d) 53: [96] This court has previously recognized that it is difficult for an appellant to succeed on the “different standards of scrutiny”argument for two related reasons. First, credibility findings are the province of the trial judge and attract a very high degree of deferenceon appeal.

Second, appellate courts “invariably view this argument with skepticism, seeing it as a veiled invitation to reassess the trialjudge’s credibility determinations”: R. v. Aird, 2013 ONCA 447, 307 O.A.C. 183, at para. 39. To succeed in this argument, an appellantmust identify something in the trial judge’s reasons or the record that makes it clear that the trial judge applied different standards ofscrutiny in assessing the evidence in question: Aird, at para. 39; R. v. Gravesande, 2015 ONCA 774, 128 O.R. (3d) 111, at para. 19. [53] Ms.

Schaff submits that the trial judge erred in law by subjecting her testimony to a higher level of scrutiny than Mr. Schell’sthereby reversing the burden of proof and requiring her to prove her innocence. Although framed as an error of law, Ms. Schaff’sargument, in substance, is an attack on the trial judge’s finding regarding her credibility and as such is underlain by an error of fact. Sheargues that the trial judge took Mr. Schell at his word regarding the cheques despite his earlier finding that Mr. Schell’s recollection wasunreliable on the other transactions but rejected her evidence on the cheques.

In this regard she reiterates much of her previousarguments. She points to the trial judge’s reliance on the lack of notation of sponsorship on the cheques, on her inability to explain anybenefit PWS would get from a sponsorship, and his characterization of her testimony regarding the ownership of the horse asunconvincing and completely incredible in the face of the certificate of registration as indication of a higher level of scrutiny. She arguesthe trial judge accepted the theory of the Crown that the cheques were to pay Mr.

Nostadt to ride her horse and thereby shifted theburden to her to prove the Crown’s theory incorrect. [54] An adverse credibility finding regarding Ms. Schaff’s testimony on sponsorship, the Nostadt cheques and their authorizationis, in itself, not an indication that the trial judge applied a different standard of scrutiny to her evidence. If the trial judge applied adifferent level of scrutiny it would have been evident in his analysis of Ms. Schaff’s evidence generally. However, this was not the case. [55] Looking at the decision as a whole, the trial judge made numerous findings that Ms.

Schaff was a credible witness and did notreject her evidence. In the words of the trial judge, he was unable to reject her testimony that Mr. Schell authorized her use of PWSmoney for personal expenses and her testimony that she never made electronic money transfers. He stated he had no reason to reject hertestimony that Mr. Schell had instructed her to use her debit card to pay for food and other incidentals, and to make cash withdrawals. Hewas unable to reject her evidence that there was an agreement with Mr. Schell that she would pay him back for personal purchases.

Heaccepted that it was her intention to do so. The trial judge was unable to reject her evidence that any of the debit card transactions werefraudulent or made without Mr. Schell’s permission. He accepted Ms. Schaff’s evidence that her pay increase was authorized. He couldnot reject her evidence that she created credit memos to square the company books rather than to cover up fraud. He accepted, for themost part, that Mr. Schell authorized Ms. Schaff to write the cheques she did, including the ones to herself. The fact that the trial judgewas able to make numerous findings that Ms.

Schaff was credible severely undercuts her argument that he subjected her testimony to ahigher level of scrutiny, at least on those issues. [56] Likewise, I am not satisfied, looking at the record as a whole, that Ms. Schaff has discharged the burden of establishingdifferent levels of scrutiny regarding her testimony about the Nostadt cheques specifically. I have previously explained why the trialjudge’s reliance on lack of notation or inaccurate notation on the cheques was, in the circumstances, significant. Such reliance is entirelyreasonable.

The trial judge was also entitled to draw an adverse inference from Ms. Schaff’s lack of explanation of a benefit to PWS forthe alleged sponsorship in view of the fact that she wrote the cheques and was adamant it was a sponsorship. Ms. Schaff, in cross-examination, admitted that she did nothing to ensure that indicators of sponsorship were being displayed by Mr. Nostadt, yet disagreedthat such a display had not taken place. [57] The trial judge’s approach to Ms. Schaff’s testimony regarding who owned the horse was reasonable. The ownership of thehorse was relevant to the credibility of Ms.

Schaff’s testimony that there was a genuine sponsorship to have Mr. Nostadt race his horse.The certificate of registration indicating the owner of the horse was Brent Nostadt bears no date indicating when it was issued. It merelysets out the ownership at an unknown date of registration. The most cogent evidence of ownership of the horse was the entry form datedJuly 2012 signed by Ms. Schaff as owner for the very barrel racing which she testified was being sponsored. She was unable to explainwhy that signature did not indicate her ownership two to three months before the cheques were written by her.

It was open to the trialjudge, in light of Ms. Schaff’s lack of explanation, to place little weight on the certificate of registration and to disbelieve her evidence inregard to ownership. The trial judge’s treatment of and reliance on these aspects of Ms. Schaff’s testimony and the entry form wasreasonable. It does not indicate any greater level of scrutiny of her evidence. [58] Rather than reversing the burden of proof, the trial judge simply concluded in effect that Ms. Schaff’s evidence regarding thesponsorship defied belief, thereby significantly undermining her credibility.

There was no reversal of the burden of proof in the trialjudge’s acknowledgement that Ms. Schaff offered no explanation about an important issue (R v R.(B.S.) (2006), (ONCA), 212 CCC (3d) 65 (Ont CA) at para 53). [59] Looking at the trial judge’s analysis of the evidence, his reasons and the record as a whole, I cannot see anything that wouldindicate that the trial judge applied a higher level of scrutiny to the assessment of Ms. Schaff’s evidence than he did to the evidence ofMr. Schell. Conclusion [60] I am satisfied that the trial judge committed no errors in his approach to the evidence of Mr. Schell and Ms.

Schaff and in hisconclusions regarding their respective credibility and reliability. I am not satisfied that those conclusions could not be supported on any

reasonable view of the evidence. B. Did the trial judge err in failing to consider whether all of the evidenceraised a reasonable doubt, effectively placing an onus on Ms. Schaff to prove herinnocence? [61] Ms. Schaff argues that although the trial judge correctly instructed himself to consider the evidence as a whole in accordancewith W.(D.), he failed to apply the principles in that case. She submits the trial judge, in rejecting her testimony about the cheques, failedto consider whether the evidence as a whole nevertheless raised a reasonable doubt.

She reiterates her argument that the trial judgeignored the evidence of other witnesses. She submits he considered only her and Mr. Schell’s evidence and in doing so wronglycompared the evidence of each of them for the purpose of determining which he preferred. Last, Ms. Schaff reiterates her previousargument that the trial judge, having rejected Mr. Schell’s evidence on most of the transactions, failed to consider whether that evidenceraised reasonable doubt.

I turn first to the applicable law. [62] W.(D.) sets forth an approach to evaluating the evidence and determining reasonable doubt where credibility is a central issueand the accused testifies. The governing principles were recently reiterated in R v Spencer, 2017 SKCA 54: [58] In W.D., at 757-758, the following was noted by the Supreme Court: Ideally, appropriate instructions on the issue of credibility should be given, not only during the main charge, but on any recharge.

A trialjudge 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 you 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 whichyou do accept, you are convinced beyond a reasonable doubt by that evidence of the guilt of the accused. [59] In judgments released since W.D., the Supreme Court has confirmed that the above formulation is not a magic incantation thatmust be recited with precision, with failure to do so automatically resulting in a reviewable error of law: for example see R v J.H.S., 2008SCC 30 at paras 13 and 14, [2008] 2 SCR 152.

Like the failure to provide sufficient reasons, if a court of appeal is able to discern thebasis upon which the trial judge has arrived at his or her verdict, the failure to show the analysis of credibility along the lines of W.D. inthe reasons for judgment is not fatal. (Emphasis in original) The application of the substance of the test is paramount (R v Szczerbaniwicz, 2010 SCC 15 at para 14, [2010] 1 SCR 455.) [63] An accused is entitled to the benefit of reasonable doubt on questions of credibility (R v Haroun, (SCC),[1997] 1 SCR 593). [64] More recently in R v Vuradin, 2013 SCC 38, [2013] 2 SCR 639, the Court commented: [21] The paramount question in a criminal case is whether, on the whole of the evidence, the trier of fact is left with a reasonabledoubt about the guilt of the accused: W. (D.), at p. 758.

The order in which a trial judge makes credibility findings of witnesses isinconsequential as long as the principle of reasonable doubt remains the central consideration. A verdict of guilt must not be based on achoice between the accused’s evidence and the Crown’s evidence: R. v. C.L.Y., 2008 SCC 2, [2008] 1 S.C.R. 5, at paras. 6-8. However,trial judges are not required to explain in detail the process they followed to reach a verdict: see R. v. Boucher, 2005 SCC 72, [2005] 3S.C.R. 499 (S.C.C.), at para. 29. … [27] In the result, the trial judge rejected the appellant’s testimony.

In Boucher, Charron J. (dissenting in part) stated that when a trialjudge rejects an accused’s testimony, “it can generally be concluded that the testimony failed to raise a reasonable doubt in the judge’smind” (para. 59). Similarly, in R.E.M., McLachlin C.J. stated that “the convictions themselves raise a reasonable inference that theaccused’s denial of the charges failed to raise a reasonable doubt” (para. 66). [65] The crucial issue with respect to Ms.

Schaff’s arguments is whether the decision of the trial judge, read as a whole, shows thathe did not really understand that the verdict should not be based on a choice between Ms. Schaff’s and Mr. Schell’s evidence but ratheron the evidence as a whole and whether he failed to apply those principles. [66] The trial judge stated that the issue on the Nostadt cheques came down to whether they were authorized and that issue camedown to the testimony of Ms. Schaff and Mr. Schell. This statement is understandable because it was only Mr. Schell who could haveauthorized the payment of a $5,500 sponsorship as Ms.

Schaff testified had happened. I do not construe such a statement as an indicationthat it was a mere choice between the evidence of the two for the trial judge. Rather, I understand it was an expression of the reality thatthe evidence that was capable of having some weight in deciding the issue of authorization was that of Mr. Schell and Ms. Schaff, giventhe unhelpful testimony of other witnesses. [67] A focus by the trial judge on the testimony of Mr. Schell and Ms. Schaff does not compel a finding that the analysis of thattestimony came down to a mere choice between the evidence of the two.

His analysis must be looked at as a whole to discern whetherthe verdict was based on a mere choice between the evidence of the two. In my view, the trial judge did not fall into this error. I will

explain. [ 68 ] The trial judge correctly stated the test in W.(D.) : Now, I must also keep in mind that Ms. Schaff testified and denied committing the offence. If I believe her evidence, I must find her not guilty. Even if I do not believe her evidence, if her testimony raises a reasonable doubt about her guilt, I must find her not guilty. Of course, I do not consider Ms. Schaff’s evidence in isolation or in a vacuum. It must be examined and considered in light of and along with all the other evidence, and it is only if I am satisfied beyond a reasonable doubt of Ms.

Schaff’s guilt on the basis of evidence I do accept that I may convict her. (Judgment transcript at T3) [ 69 ] He again reminded himself that the evidence as whole must be considered: … Rather, it’s the whole of the evidence that must be considered, cumulatively and in context, in determining whether the case has been proven. (Judgment transcript at T6) [ 70 ] After rightly determining that the crucial issue was whether each expenditure was authorized, the trial judge proceeded to review all the testimony.

He made several findings regarding the weight to be given to various witnesses or their credibility. [ 71 ] The trial judge gave the evidence of Chantel Schell and Anthony Elliott little weight because neither had first-hand knowledge about what transpired between Ms. Schaff and Mr. Schell. On this basis, he appropriately observed that his analysis of whether any transaction was authorized came down to the evidence of Ms. Schaff and Mr.

Schell: … Determining whether certain transactions were or were not authorized largely comes down to the evidence of Matthew Schell and Jennifer Schaff. (Judgment transcript at T4) [ 72 ] The trial judge reviewed Ms. Schaff’s evidence on the other transactions and was not persuaded that she was not credible with regard to whether they were authorized, as I have detailed above. [ 73 ] The trial judge directed his mind to the credibility of Mr. Schell generally: Now, many things can be said about Matthew Schell. On the whole, I found him to be a credible witness. I thought he did his best to tell the truth.

He made fair concessions when cross-examined and fairly acknowledged that in many instances his memory of certain events was not accurate. I would describe Mr. Schell as good-natured, kind-hearted, loyal to his friends, and generous to a fault. However, one adjective that cannot be used to describe Mr. Schell is meticulous. To say he ran his business and financial affairs in a haphazard fashion is being kind. As long as the money was coming in, it would appear that he paid little or no attention as to how much and where it was going out. (Judgment transcript at T4) [ 74 ] The trial judge determined that Mr.

Schell’s lack of recollection about expenditures until he was confronted with receipts in cross-examination did not demonstrate dishonesty or deceit but merely the shoddy state of the company’s bookkeeping and faulty recollection or no recollection on Mr. Schell’s part. It is a fair statement that the trial judge’s finding that Mr.

Schell was generally honest and credible, but that his recollection was unreliable regarding whether certain transactions were authorized, was carried over to his analysis regarding the Nostadt cheques because the trial judge noted they were exceptions to the other transactions. [ 75 ] The trial judge’s determination that the Nostadt cheques were exceptions to all the other authorized transactions does not indicate, as argued by Ms.

Schaff, that he failed to consider the evidence as a whole but rather that he thoroughly reviewed the evidence about the Nostadt cheques in the context of all the evidence and recognized a difference. That difference arose from the testimony of Mr. Schell and Ms. Schaff with respect to the two Nostadt cheques and the circumstances surrounding them. [ 76 ] The trial judge accepted the evidence of Mr. Schell that he had not authorized the Nostadt cheques. He based this acceptance on the fact that, unlike all the other transactions, Mr. Schell had stood firm in his position that they were not authorized.

I have explained earlier that, given the testimony of Mr. Schell heard by the trial judge regarding the other transactions, such a conclusion is not unreasonable. [ 77 ] The trial judge rejected Ms. Schaff’s evidence that the Nostadt cheques were authorized. He went on to explain why that was so, essentially stating that her explanation of the cheques representing a sponsorship was unbelievable based on the circumstances surrounding the cheques, the documents regarding ownership of the horse, the barrel racing and her explanation thereof. I have previously detailed the trial judge’s reasons in that respect.

He indicated that, given the rejection of her evidence, he did not have a reasonable doubt. [ 78 ] The trial judge did not believe the evidence of Ms. Schaff on the Nostadt cheques but did not stop there. He considered whether despite this, he was still left with a reasonable doubt. He determined he was not. I see no error in this. [ 79 ] I am not satisfied that the trial judge in his consideration of reasonable doubt merely compared the testimonies of Ms. Schaff and Mr. Schell or failed to consider Mr. Schell’s faulty recollection with respect to the other transactions.

Read as a whole , the decision of the trial judge shows he understood that whether the charges were proven beyond a reasonable doubt was to be determined on the whole of the evidence before him and that he did so. I conclude the trial judge properly applied W.(D.) .

VI. conclusion [ 80 ] Looking at the reasons of the trial judge as a whole, I am satisfied the trial judge committed no error of law or principle and the verdict of fraud respecting the Nostadt cheques is one that he could, acting judicially, reasonably render based on the whole of the evidence before him. On the basis of all the foregoing, the appeal is dismissed. “Ottenbreit J.A.” Ottenbreit J.A. I concur. “Jackson J.A.” Jackson J.A. I concur. “Caldwell J.A.” Caldwell J.A.