R v Gmerek, 2020 SKCA 97

Court of Appeal for Saskatchewan Docket: CACR3163 Citation: R v Gmerek , 2020 SKCA 97 Date: 2020-08-12 Between: Gregor Heinrich Gmerek Appellant And Her Majesty the Queen Respondent Before: Caldwell, Schwann and Tholl JJ.A. Disposition: Conviction appeal dismissed Written reasons by: The Honourable Mr. Justice Caldwell In concurrence: The Honourable Madam Justice Schwann The Honourable Mr. Justice Tholl On appeal from: CRM 5/2015, Yorkton Appeal heard: June 1, 2020 Counsel: Thomas P. Hynes for the Appellant Andrew S. Davis for the Respondent Caldwell J.A. I.

Introduction [ 1 ] After a trial that was preceded by a voir dire , a judge convicted Gregor Heinrich Gmerek of defrauding his former employer of around a million dollars. Mr. Gmerek appeals against his convictions. He narrowed his appeal to argue only two grounds: (

a) the judge erred by admitting a statement he had made into evidence because it was not a voluntary statement; and (

b) the judge misapprehended or misapplied the criminal burden and standard of proof beyond a reasonable doubt. [ 2 ] I am not persuaded the judge erred in her handling or assessment of the evidence in this case. As I find no basis to interfere with the convictions, I would dismiss the appeal. II. Background [ 3 ] Prairie Livestock is a brokerage business operating from Moosomin, Saskatchewan. It buys and sells cattle in Canada and the United States. It is a joint venture owned by three corporations.

Kirk Sinclair is the majority shareholder of each corporate party to the joint venture ( R v Gmerek (8 June 2018) Yorkton, CRM 5/2015 (Sask QB) at paras 2–3 [ Trial Decision ]). [ 4 ] The overall circumstances of Mr. Gmerek’s offences may be set out briefly. In August 2008, Mr. Sinclair hired Mr. Gmerek to act as the general manager and comptroller of the business. He agreed the joint venture would pay Mr. Gmerek an annual salary of $80,000. Mr. Sinclair fired Mr. Gmerek in December 2012 after learning he had taken $763,000 from the business in addition to his salary.

An investigation subsequently established that Mr. Gmerek had converted over $1 million. [ 5 ] Mr. Gmerek acknowledged receiving this money. He acknowledged forging signatures on the cheques he had received. He acknowledged he had acted to hide the payments in the financial records of the business. He testified, however, that the business had agreed to supplement his salary through what he described as “off-record” payments. He said the amounts he received had been authorised by Mr. Sinclair. Mr. Sinclair testified this was not the case. The judge accepted Mr. Sinclair’s evidence over that of Mr. Gmerek.

In the result, she found Mr. Gmerek guilty on charges of fraud, theft, forgery and uttering forged documents. The Crown stayed the theft and uttering forged documents charges. The trial judge’s specific findings of fact as to the amounts Mr. Gmerek received illegally and the various ways that occurred are set out in the Trial Decision . III. Voluntariness [ 6 ] The first issue is whether the judge properly admitted a statement Mr. Gmerek had made to Mr. Sinclair when being confronted about the transactions. We do not have a transcript of the voir dire under which the judge considered its admissibility.

We only have a

summary of some of the evidence adduced in that voir dire and of the positions the parties took before the judge (see R v Gmerek , 2017 SKQB 58 [ Voir Dire Decision ]). The parties agreed to proceed with the appeal without a transcript. [ 7 ] As I understand it, Mr. Sinclair, accompanied by two members of his family and an RCMP officer, went to see Mr. Gmerek in his office. In this confrontation, Mr. Sinclair set before Mr. Gmerek a number of cheques and asked for his comments on them. Mr. Sinclair agreed he was yelling at Mr. Gmerek, who apparently said nothing at first. At some point Mr. Sinclair told Mr.

Gmerek he had “30 seconds to explain” the cheques. In response, Mr. Gmerek shrugged and said, “What can I say?” ( Voir Dire Decision at paras 5–7 ). The police officer stayed at a distance from Mr. Gmerek and did not speak to him at any time prior to this interaction.

[8] Mr. Gmerek says his utterance (“What can I say?”) should not have been admitted into evidence. He says the judge erred inadmitting it because it was not a voluntary statement. [9] The voluntariness of a statement made to a person in authority is a question of fact or mixed fact and law (R v Oickle, 2000SCC 38 at para 22, [2000] 2 SCR 3). Mr. Gmerek’s argument is predicated on his assertion on appeal that Mr. Sinclair is a person inauthority who had confronted him in the context of an oppressive atmosphere and had made implicit threats when doing so.

If that wereestablished by evidence, it could undermine the voluntariness of his statement under the confessions rule (see R v Oickle). [10] Under that rule, whether someone is a “person in authority” is a threshold question that depends on the perspective of thedeclarant (R v Oickle at para 25; R v Rothman, (SCC), [1981] 1 SCR 640 at 664 and 680; R v Hebert, (SCC), [1990] 2 SCR 151 at 201; R v Grandinetti, 2005 SCC 5 at paras 37–45, [2005] 1 SCR 27; R v S.G.T., 2010 SCC 20 at para 21,[2010] 1 SCR 688; R v Hodgson, (SCC), [1998] 2 SCR 449 at paras 33–34 and 45–47; R v Berger (1975), (BC CA), 27 CCC (2d) 357 (BCCA) at 385–386).

To paraphrase Abella J., who spoke for the Court in R v Grandinetti, where anaccused has failed to discharge the evidentiary burden of showing that a statement was made to a person in authority there is no valid issuefor consideration and a voir dire on voluntariness is unnecessary (at para 45; see also R v Hodgson). [11] Importantly, Mr. Gmerek took the position during the voir dire that Mr. Sinclair was not a person in authority. He did nottestify or call any other evidence at all in the voir dire, let alone any evidence as to his perception of Mr. Sinclair in this context.

Rather,he opposed admission of the statement into evidence because it constituted inadmissible hearsay. In the Voir Dire Decision, the judgefound the statement was a statement against interest and therefore admissible under the traditional exception to the hearsay rule.Mr. Gmerek does not appeal against this ruling. [12] Although contrary to the parties’ positions, the judge nonetheless addressed the issue of voluntariness, finding it was “likelyMr. Gmerek perceived Mr. Sinclair as a person in authority” (Voir Dire Decision at para 17). She did so because Mr.

Sinclair had beenaccompanied by a police officer and “it would have been apparent to Mr. Gmerek that, at that time, Mr. Sinclair and the officer wereinvolved in the investigation of a criminal offence” (at para 15). Building on this, the judge reviewed the Crown’s obligation to establishthat a statement made to a person in authority had been voluntary. However, the judge observed that Mr. Gmerek had not testified and thatshe was “not aware of any other evidence that calls into question the voluntariness of the statement” (at para 21). Therefore, in conclusoryterms, she found Mr.

Gmerek’s statement had been “voluntarily and freely made” (at para 21). She admitted it into evidence on this basisas well (Voir Dire Decision at para 21). [13] As the judge correctly observed, the absence of testimony from Mr. Gmerek leaves us without any evidence as to what he hadactually perceived in the circumstances of the confrontation by Mr. Sinclair. The fact the judge, in the face of Mr. Gmerek’s assertion tothe contrary, assessed the issue of voluntariness as though Mr. Gmerek had perceived Mr. Sinclair to be a person in authority does not fillthe gaps in the evidence. It merely displaces Mr.

Gmerek’s evidentiary burden (R v Grandinetti at para 37; R v Hodgson at paras 37–38)and thereby allowed the judge to conduct a theoretical analysis of voluntariness. The judge’s reasoning in this regard is akin to briefspeculation about what the legal outcome would have been if the facts had been different. In that regard, she concluded the statement wasadmissible under the confessions rule. However, since her analysis was largely based on assumed facts, if she had erred it could not haveaffected the admissibility of the statement at law.

As the judge remarked, the voluntariness of the statement was not called into questionby the evidence adduced in the voir dire. [14] Accordingly, this ground of appeal must be dismissed. Although she expressed it differently, the judge’s inquiry intovoluntariness ended with a finding that Mr. Gmerek had not discharged his evidentiary onus of establishing a valid issue for consideration. [15] As a final point, I observe that the judge did not refer to the statement in her reasons for conviction. Mr.

Gmerek’s assertion ofprejudice resulting from its admission rested on the possibility that the statement could have factored into the judge’s finding that he hadoffered no rational and exculpatory explanation for what had happened. It is, however, quite apparent that Mr. Gmerek’s statement playedno role in the judge’s analysis of his guilt. There was no question a fraud had occurred. Mr. Gmerek admitted to that in his testimony. Heagreed he had received the payments in question and had hidden them to deceive the auditors of the business and Canada RevenueAgency. The only issue at trial was whether Mr.

Sinclair had authorised the payments and the defrauding of the auditors and others. Thatissue came down to a question of credibility. In that context, the judge found Mr. Gmerek’s own explanations at trial for his conduct werenonsensical or inconsistent with the facts to which he had admitted or asserted. She found Mr. Gmerek was not credible on this pointlargely because his explanations did not match up with his admissions and his own testimony as to what had occurred. She explained whythat was the case, referring to the evidence and testimony she had accepted.

As her credibility assessment is amply supported by theinconsistencies in Mr. Gmerek’s own testimony and in relation to the other evidence, it is safe to say his utterance of “What can I say?”played no role in it. [16] As Mr. Gmerek has not established any basis to fault the ruling on the admissibility of his statement, I would dismiss thisground of appeal. IV. Burden and Standard of Proof [17] The issues at trial were not about whether Mr. Gmerek had done what the Crown alleged he had done. Mr. Gmerek agreed thathe had taken large sums of money from his employer.

He further agreed that many of his actions in covering that up were fraudulent. Heacknowledged this had allowed him to live an “extravagant lifestyle”. The issue at trial was whether his employer, through Mr. Sinclair,had authorised or directed him to undertake those transactions. [18] In brief terms, Mr. Gmerek’s defence was that Mr. Sinclair had wanted his co-operation to hide off-record payouts and hadbought his silence through similar off-record payments to him. He said Mr. Sinclair was gifting him a 20% stake in the business andoffered him $160,000 annually, made up of salary and off-record payments. Mr.

Gmerek also claimed it had been beneficial to Mr.Sinclair and the business to make these large payments to him (and to other employees) and to hide them. He said the benefit was thatthere were no payroll deductions. He further suggested that fixing the accounting records of the business made it look better to thebusiness’ banker even though its financial situation appeared to have been healthy when the fraudulent arrangements had been put in

place. [19] Mr. Sinclair testified as to the types of benefits employees routinely received in addition to their salaries. For example, the jointventure allowed employees to acquire personal property like vehicles or cattle in a way that afforded the employee an advantage but alsoprovided the joint venture with tax benefits due to the depreciation of capital. Mr. Sinclair kept careful track of these off-record benefitsand took them into account when deciding whether to give an employee a year-end bonus and how much to give. [20] At bottom, Mr. Sinclair denied permitting or directing Mr.

Gmerek to take money from the business in the way Mr. Gmerekhad admitted. He said he was unaware of what Mr. Gmerek was doing. He had not agreed to pay Mr. Gmerek more than his salary. Hehad discussed the possibility of Mr. Gmerek purchasing an equity stake in the business but had never discussed gifting him a 20% share. [21] The judge rejected Mr. Gmerek’s testimony to broad effect that everything he had done had been with the knowledge andapproval of Mr. Sinclair.

She did so, in large measure, because his evidence and his theory were nonsensical in the circumstances or hadno correlation to the evidence of how the payments had been made. She accepted Mr. Gmerek’s evidence that other employees hadreceived off-record benefits but found they were not at all similar to what he had received. She observed there was no evidence thebusiness had needed anyone to falsify its records to enhance its position with its bankers. Rather, she found that the financial health of thebusiness had not been of concern until Mr.

Sinclair had uncovered the fraudulent transactions. [22] In summarising her findings, the judge said there was “no air of reality” to the suggestion that Mr. Sinclair had been aware ofthe impugned transactions (Trial Decision at para 60). With a few exceptions, she made similar findings in respect of other of theallegations of fraud. The judge also found Mr. Gmerek had forged Mr. Sinclair’s signature and those of other signing authorities, allwithout authorisation. [23] A trial judge is entitled to convict on the basis of the case presented by the Crown.

Here, it is important to remember that Mr.Gmerek had admitted most of the facts that underpinned the Crown’s case against him. He testified he had acted with fraudulent intent todeceive auditors, the bankers and the CRA. As such, the issue at trial was the extent of the fraud he had committed. In that regard, thechief fact at issue was whether Mr. Sinclair had authorised him to undertake the fraudulent acts to which he had admitted. [24] The judge knew the Crown had the burden of proving its case beyond a reasonable doubt. She knew Mr. Gmerek did not haveto prove anything.

She properly instructed herself on the burden and standard of proof, quoting R v Schaff, 2017 SKCA 103 at para 62. Insimple terms, the judge understood that she must not convict unless the Crown had proven, on the whole of the evidence that sheaccepted, guilt beyond a reasonable doubt. She knew that standard would not have been met, even if she were inclined to believe all of theCrown’s evidence, where she held a reasonable doubt about an element of an offence. Nonetheless, the judge found the evidence sheaccepted had not left her with a reasonable doubt as to Mr.

Gmerek’s guilt on the charges of fraud, theft and forgery-related crimes. [25] In that context, the judge did not err, in terms of the burden and standard of proof, when she said the Crown’s case called for anexplanation from Mr. Gmerek. The strength of the Crown’s case may be such that, if the accused’s actions are not explained, the accusedis likely to face conviction.

Where this occurs, the accused may well be required, practically speaking, to provide an explanation or topoint to other evidence that raises a reasonable doubt, but this does not shift the burden or standard of proof (See R v Newton, (SCC), [1977] 1 SCR 399 at 411; R v Proudlock, (SCC), [1979] 1 SCR 525 at 551; R v Darrach, 2000 SCC 46 atpara 50, [2000] 2 SCR 443; R v Rojas, 2008 SCC 56 at paras 46–47, 298 DLR (4th) 444; R v Sue, 2011 BCCA 91 at para 38, 274 CCC(3d) 458; Pelletier c R, 2018 QCCA 438 at para 7). [26] Mr. Gmerek’s explanation or his defence was that Mr. Sinclair had authorised everything.

He testified to that general effectmany times. Where the judge was not persuaded beyond a reasonable doubt as to the facts of an impugned transaction, she expresseddoubt as to Mr. Gmerek’s guilt in relation to that transaction. In all other cases, she turned to his explanation and reviewed the admittedlengths to which Mr. Gmerek had gone to conceal the transactions. The judge found his explanations were nonsensical, ran counter tocommon sense and did not fit with what he had admitted.

She gave detailed reasons why this was the case, addressing the evidence of eachtype of fraudulent transaction individually and in the context of Mr. Gmerek’s explanation for it. She made findings of credibility based insome measure on this analysis. [27] At root, the admitted facts of the Crown’s case against Mr. Gmerek and his explanations for his actions did not leave the judgewith a reasonable doubt as to his guilt. I am not persuaded that she erred by approaching the evidence, the matter at issue or the burden andstandard of proof in the way that she did. V.

Conclusion [28] For the foregoing reasons, I would dismiss the appeal. [29] As Mr. Gmerek is on judicial interim release, he shall forthwith report to the nearest RCMP detachment or police station tobegin serving the remainder of his sentence. “Caldwell J.A.” Caldwell J.A.I concur. “Schwann J.A.” Schwann J.A. I concur. “Tholl J.A.” Tholl J.A.