



COURT OF APPEAL FOR ONTARIO

CITATION:  R. v. Saikaley, 2017 ONCA 374

DATE: 20170510

DOCKET: C58153

Doherty, Hourigan and Roberts JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Troy Saikaley

Appellant

Michael Lacy and Joseph Wilkinson, for the appellant

John North and Ian Bell, for the respondent Attorney
    General of Canada

R.W. Hubbard and Michael Fawcett, for the respondent
    Attorney General of Ontario

Nader Hasan, for the intervener Criminal Lawyers
    Association

Frank Addario and Andrew Burgess, for the intervener
    Canadian Civil Liberties Association

Heard: October 3-4, 2016

On appeal from the dismissal of the s. 8 application
    dated December 17, 2012 and the conviction entered on April 5, 2013 and the
    sentence imposed on May 21, 2013 and the forfeiture order imposed on November
    21, 2013 by Justice Paul F. Lalonde of the Superior Court of Justice and the
    dismissal of the s. 11(b) application dated October 4, 2012 by Justice Julianne
    A. Parfett of the Superior Court of Justice.

By the Court:

[1]

The appellant was convicted of 40 counts, including numerous drug
    related offences, association with a criminal organization, conspiracy, weapons
    offences, possession of proceeds of crime, extortion, and receiving payment at
    a criminal rate of interest. He was sentenced to 19 years imprisonment. The
    trial judge also made a forfeiture order and imposed a fine in lieu of
    forfeiture.

[2]

The appellant raises numerous grounds of appeal on his conviction
    appeal. He argues that the charges should have been stayed because his s. 11(b)
Charter
right was violated, that evidence that supported his
    convictions should have been excluded under s. 8 of the
Charter
, that
    the trial judge erred in law in his interpretation of the provision prohibiting
    criminal interest rate agreements, and that the balance of his convictions were
    based on misapprehensions of evidence and/or are unreasonable.

[3]

The appellant also seeks leave to appeal his sentence, arguing that the
    sentence was harsh and the product of legal errors. He further submits that the
    trial judge erred in making a forfeiture order and imposing a fine in lieu of
    forfeiture.

[4]

For the reasons that follow, we would allow the conviction appeal in
    relation to the convictions for entering into agreements to receive interest at
    a criminal rate, but otherwise dismiss the conviction appeal. We would grant
    leave to appeal sentence, and would allow the sentence appeal in part.

FACTUAL OVERVIEW

[5]

In 2008 through to 2009, the Royal Canadian Mounted Police (the RCMP)
    conducted an investigation, titled Project A-Wire, into a number of
    individuals in the Ottawa region suspected to be involved in drug trafficking.
    The RCMP and the Canadian Border Services Agency (CBSA) reached an agreement
    whereby the CBSA agreed to assist the RCMPs Ottawa drug section with their
    investigation. The appellant, though not initially the target of the
    investigation, had been identified by the RCMP through surveillance.

[6]

On November 14, 2008 a CBSA intelligence officer created a lookout, a
    document identifying the appellant as a person of interest, on the basis of
    information received from the RCMP that the appellant was involved in an
    import/export business with a link to narcotics.

[7]

The RCMP became aware that the appellant had left the country and would
    be returning via the Ottawa International Airport. On November 28, 2008, an
    RCMP officer wrote an email to a CBSA officer, requesting that the appellant be
    flagged and that his belongings be searched upon his re-entry to Canada.

[8]

On March 18, 2009, the appellant returned to Canada via the Ottawa
    International Airport, and was directed to attend the customs superintendents
    office for a secondary inspection (the CBSA search). The officers searched
    the appellants iPhone and found a file entitled O-Due, which was a debt list.
    A number of the names on the debt list were suspects of interest to the CBSA
    regarding narcotics. A second file entitled Shepherd Financial contained the
    names of Billy Joe Krieger and Sherri Lynn Newton, both already on the RCMP
    drug unit suspects list, together with dollar amounts. This information was
    forwarded to the RCMP.

[9]

On May 20, 2009, the RCMP obtained an authorization under s. 186 of the
Criminal
    Code
, R.S.C. 1985, c. C-46, for the interception of communications of
    several persons, including the appellant (the first wiretap authorization).
    Two more authorizations were obtained on July 13 and September 10, 2009. These
    additional authorizations allowed for the police to intercept communications in
    two of the appellants vehicles, as well as house probes (the second wiretap
    authorizations). The police also obtained judicial authorizations for general
    warrants authorizing sneak and peeks of certain locations, and search
    warrants authorizing seizures.

[10]


On November 5, 2009 RCMP officers executed a number of search
    warrants. The first was on a vehicle driven by Christopher Kaizer. In the
    course of earlier surveillance, the surveillance team had witnessed a black bag
    being placed in Mr. Kaizers vehicle while he was in the company of the appellant
    and another associate, Andrew Wall, in the vicinity of 1380 Prince of Wales
    Drive, Unit 210, an apartment rented by the appellant (the rental apartment).
    The search of Mr. Kaizers vehicle revealed a substantial quantity of hashish,
    and Mr. Kaizer was arrested.

[11]

Other members of the surveillance team followed the appellant and Mr.
    Wall to a bar previously owned by the appellants father, known as Ricks
    Place or the Ravens Nest. The appellant and Mr. Wall were arrested behind
    the building.

[12]

The appellant was searched and found to be in possession of cannabis
    resin and currency, which were seized. A search of the appellants vehicle
    resulted in officers discovering $5,620 CDN, one gram of cocaine, 20 grams of
    marijuana, seven grams of hashish, and keys to a storage locker at the rental
    apartment. The RCMP then searched the bar, which resulted in drugs, drug
    paraphernalia and Canadian currency being seized.

[13]

CDSA search warrants were executed on the appellants home, a residence
    located on Kerry Hill Crescent in Ottawa (the residence), and the rental
    apartment. The search of the residence resulted in officers locating a loaded
    Glock 23 mm handgun, two tasers/stun guns, knives, ammunition and $128,310 CDN.
    In the rental apartment, officers located large quantities of hashish, cocaine,
    Novocaine, marijuana, $4,720 CDN, $300 US, drug packaging, weigh scales, and
    drug paraphernalia, along with an Enfield .38 revolver.

[14]

The appellant was formally charged with 60 offences on March 18, 2010.
    He was charged with numerous offences arising out of the drug investigation,
    including several counts of trafficking in controlled substances, possession
    for the purpose of trafficking, and simple possession. He was further charged
    with several related counts alleging he committed the drug offences as part of
    a conspiracy to traffic controlled substances. He was also charged with
    numerous weapons offences related to the Glock handgun, the taser/stun guns,
    and the Enfield revolver. There were also a number of proceeds of crime
    offences charged arising out of the searches of the appellants residence,
    vehicle and rental apartment, and various unrelated extortion and criminal
    interest rate offences arising out of the appellants money lending business.
    Finally, the appellant was charged with committing offences as part of a
    criminal organization.

[15]

Prior to the commencement of his trial, the appellant sought a stay of
    the charges against him on the basis that he had not been tried within a
    reasonable period of time, contrary to s. 11(b) of the
Charter.
The
    application was dismissed.

[16]

The appellant also challenged the admissibility of evidence that was
    directly the product of the execution of judicial authorizations, or derivative
    of the same, pursuant to s. 8 of the
Charter
. The appellant argued
    that his right to be secure from unreasonable search and seizure was breached
    by the warrantless CBSA search and that, without the disclosure of the
    information in his iPhone, he would not have been included as a target in the
    judicial authorizations which were granted. This application was also
    dismissed.

[17]

The appellant was tried before a judge alone between January 7 and
    February 13, 2013 and was convicted of 40 counts on the indictment, six of
    which were stayed based on the rule from
Kienapple

v. R.
, [1975] 1 S.C.R. 729. He was
    acquitted of other related offences and certain other charges were withdrawn at
    the commencement of trial.

[18]

The appellant was sentenced to 19 years imprisonment, with a parole
    ineligibility order under s. 743.6(1.1) and s. 743.6(1.2) of the
Criminal
    Code
as a result of the appellants convictions on the criminal
    organization offences, thereby prohibiting him from applying for parole for 9 ½
    years. The trial judge also imposed a forfeiture order in the amount of $53,000
    in relation to cash seized from the residence, and a fine in lieu of forfeiture
    in the amount of $1,296,293.37 with five years to pay, or a further five years
    imprisonment to be served consecutively to the jail term imposed at trial, in
    the event of default.



ISSUES

[19]

The issues raised on appeal and a summary of our conclusions on each
    issue are as follows:

(i)

Did the application judge err in dismissing the appellants s. 11(b)
Charter
application to stay the charges for unreasonable delay?

No. The law on s. 11(b) applications has been
    fundamentally altered by the Supreme Court of Canadas decision in
R. v.
    Jordan
, 2016 SCC 27, [2016] 1 S.C.R. 631, released after the dismissal of
    the appellants application. Under this new legal test, the delay in this case
    was in excess of the presumptive ceiling. However, the case was particularly
    complex and the delay was justified on that basis. In addition, the parties
    reasonably relied upon the state of the law prior to the release of
Jordan
.
    Therefore, the transitional exceptional circumstance applies, and the appeal of
    the dismissal of the 11(b) application must also fail on that basis.

(ii)

Did the trial judge err in dismissing the appellants s. 8
Charter
challenge to the admissibility of the evidence?

No.  The admissibility or inadmissibility of the
    evidence obtained through the
Customs Act
, R.S.C. 1985, c. 1 (2nd
    Supp.), searches had no impact on the validity of the wiretaps and other search
    warrants, the admissibility of the evidence obtained from them, and the outcome
    of the trial.

(iii)

Did the trial judge err in convicting the appellant of entering into
    criminal interest rate agreements?

Yes.  The trial judge erred in applying the deeming
    provisions of s. 347(3) of the
Criminal Code
and in failing to
    consider whether the appellant had the requisite
mens rea
of knowingly
    entering into loan agreements to receive interest at a criminal rate.  A new
    trial on these counts is required.

(iv)

Did the trial judge err in unreasonably convicting and/or
    misapprehending the evidence in relation to the following convictions: the
    criminal organization offences, extortion, the firearms offences, the
    conspiracy and substantive drug offences, and the proceeds of crime offences?

No. The convictions were all amply supported by the
    evidence and were not unreasonable. Nor were they the product of any
    misapprehension of the evidence.

(v)

Did the trial judge err in sentencing the appellant?

Yes.  The Crown conceded that the appellant should have
    received credit for pre-sentence custody and restrictive bail conditions at the
    rate of 1.5 days, amounting to 30 days.  The trial judge also erred in imposing
    a global sentence of 19 years and in applying a parole ineligibility order to
    all of the offences for which the appellant was convicted.

(vi)

Did the trial judge err in imposing the forfeiture order and fine in
    lieu of forfeiture?

No. The trial judge made a factual finding that the
    appellant was the head of a criminal organization involved in the trafficking
    of drugs, and that his income from sources unrelated to the designated offences
    could not reasonably account for his property. There was no error in those
    findings and the onus was therefore on the appellant to establish that the
    property was not the proceeds of crime. The appellant did not meet this onus. Contrary
    to the submission of the appellant, it would have been an error in law for the
    trial judge to rely upon the sufficiency of the carceral component of the
    sentence to justify a refusal to order forfeiture.

ANALYSIS

(i)       Section 11 (b) Application

(a)

Decision of the Application Judge

[20]

The appellant was arrested and released on November 5, 2009. However,
    he was told he would be charged on a later date. The appellant was ultimately
    charged on March 18, 2010. His wife was also charged with weapons offences, arising
    from the discovery of the Glock in their residence.

[21]

The s. 11(b) application was heard by Parfett J., who on August 28, 2012
    dismissed the application. The application judge reviewed the applicable legal
    principles pursuant to
R. v. Morin
,

[1992] 1 S.C.R. 771, and
R.
    v. Askov
, [1990] 2 S.C.R. 1199.

She concluded that the
    anticipated delay of 34 months was of sufficient length to justify a more
    in-depth analysis of the causes of the delay.

[22]

As required by the law as it stood at that time, the application judge
    categorized the delay. She found that the total inherent delay was 19 ¼ months,
    and that this delay was not unreasonable given the complexity of the case and
    volume of the evidence. With respect to the institutional delay, she determined
    that it totalled 12 ¾ months, which she also found was not unreasonable.

[23]

The application judge attributed one month of delay to the defence.
    There was considerable argument on the issue of the delay attributable to the
    Crown. The defence argued that significant delay was caused by the Crowns
    insistence in proceeding against the appellants wife. The appellant contended
    the charges against the wife were weak and if the Crown had withdrawn the
    charges against the wife prior to the preliminary hearing dates being set, the
    appellant would have chosen a trial in the Ontario Court of Justice.

[24]

The application judge found that this argument had significant
    validity. She stated that the Crown ought to have known the strength of its
    case by the time of the pre-trial conferences in the Ontario Court of Justice
    in order to hold meaningful resolution discussions. She noted that it took
    until the second day of the preliminary inquiry before the Crown realized it
    was unlikely to get a committal on the charges with respect to the wife, and
    withdrew the same. The application judge was of the view that a decision at an
    earlier date by the appellant to waive the preliminary hearing or to proceed to
    trial in the Ontario Court of Justice would have resulted in a considerable
    saving of time.

[25]

Notwithstanding these findings, the application judge concluded, at
    para. 26:

Unfortunately, there is no evidence before me of the extent
    of time that could have been saved had the Crown decided earlier to withdraw
    charges against the Applicants wife. The court cannot speculate concerning
    what decision the Applicant would actually have made had the charges been
    withdrawn earlier, nor can it speculate concerning how much time would have
    been saved. The court can only make a decision based on the evidence before it
    and there is no such evidence.

[26]

As a result, the court did not attribute delay to the Crown for its
    failure to withdraw the charges against the appellants wife earlier in the
    process.

[27]

The application judge attributed a total of 1 ¼ months to Crown delay.
    This delay was primarily the result of the decision of the Crown not to accept
    a proposal by defence counsel to streamline the pre-trial process in the
    Ontario Court of Justice. However, the application judge concluded that defence
    counsels lack of availability was such that a shortened procedure would only
    have saved approximately one month.

[28]

The application judge concluded that the delay in this matter was
    sufficient to find there has been some prejudice to the applicant, particularly
    arising from being on bail for an extended period of time. However, she found,
    at para. 36, it is also apparent that the Applicant exaggerated much of the
    prejudice that he stated he had suffered.

[29]

Applying the guidelines set out in
Morin
and
Askov
, the
    application judge held that the institutional delay in this case was
    acceptable, and in her view, did not reach the level of breaching the accuseds
    s. 11(b) rights. Moreover, although the accused had suffered some prejudice, it
    was not sufficient to justify a stay of proceedings. As a result, the
    application was dismissed.

(b)

Jordan
Analysis

[30]

Since the commencement of this appeal, the law applicable to s. 11(b)
    applications has been fundamentally altered by the decision in
Jordan
.
    In that case, the Supreme Court of Canada created an entirely new framework for
    s. 11(b) applications, establishing a ceiling beyond which delay is
    presumptively unreasonable. In cases tried in a superior court, the ceiling is
    set at 30 months of net delay.

[31]

The period of total delay is calculated from the date of the charge to
    the actual or anticipated conclusion of trial. From this figure, defence delay
    (i.e. delay waived by the defence and delay caused solely by the conduct of the
    defence) is deducted to produce the net delay:
Jordan,
at paras.
    60-67. In the present case, the parties agree that the net delay is 35 ½ months.

[32]

Given that the net delay is greater than the presumptive ceiling, the
    onus rests with the Crown to establish that the delay is reasonable because of
    the presence of exceptional circumstances. Exceptional circumstances consist of
    discrete events and particularly complex cases:
Jordan
, at para. 71.
    The Crown does not rely on any discrete events, but argues that the complexity
    of this case gives rise to exceptional circumstances.

[33]

The Crown submits that, by any reasonable standard, this case was
    particularly complex and notes that the appellant conceded the complexity of
    the case in argument before the application judge. Cases may be considered
    particularly complex because the nature of the evidence or the nature of the
    issues require a large amount of trial and/or preparation time:
Jordan
,
    at para. 77. According to the Crown, both criteria are satisfied in this case.

[34]

The hallmarks of particularly complex cases are described in
Jordan
at para. 77 and include: voluminous disclosure, large numbers of witnesses,
    significant requirements for expert evidence, and charges covering a long
    period of time.

[35]

The Crown relies upon the length and complexity of the investigation, including:
    the surveillance, Digital Number Recorder (DNR) warrants, production orders,
    and wiretap authorizations. The Crown also points to the voluminous disclosure
    and argues that the size of the record on appeal speaks for itself (thousands
    of pages of transcripts, 21 Appeal Books and Supplementary Appeal Books), thus
    requiring a significant amount of trial and preparation time.

[36]

The appellant did not strenuously argue that this was not a complex
    case. Given the charges and nature of the investigation, this is a sensible
    position. We agree, based on the nature of the issues in this case, the
    complexity of the investigation, and the voluminous disclosure, that this case
    bears the hallmarks of a complex case as contemplated in
Jordan.
However,
    as counsel for the appellant correctly submits, that does not end the matter.
    The Crown, having initiated what could reasonably be expected to be a complex
    prosecution, has a positive duty to develop and follow a concrete plan to
    minimize the delay occasioned by such complexity. Where the Crown has failed to
    do so, it will not be able to show exceptional circumstances, because it will
    not be able to show that the circumstances were outside its control:
Jordan
,
    at para. 79.

[37]

Similarly, while courts play no supervisory role in decisions of the
    Crown related to whether to lay multiple charges for the same conduct or to try
    multiple co-accused together, any delay resulting from the exercise of
    prosecutorial discretion of this nature must conform to the accuseds s. 11(b)
    right:
Jordan
, at para. 79.

[38]

The appellant argues that not only did the Crown not have a plan to
    move this matter forward expeditiously, it exacerbated the delay by: (i)
    insisting on proceeding with the charges against the appellants wife until the
    second day of the preliminary hearing, and (ii) declining to accept the offer
    by the defence to streamline the pre-trial process in the Ontario Court of
    Justice.

[39]

With respect to the delay occasioned by reason of the charges against
    the appellants wife, the appellant notes that he filed a sworn affidavit on
    the application attesting to the fact that he would have waived his right to a
    preliminary hearing at any time if the charges against his wife had been
    withdrawn. Thus, he argues that the Crowns decision to proceed with the
    charges against this wife had the effect of delaying the proceeding, and that
    the application judge erred in finding that there was insufficient evidence to
    make a determination on this point.

[40]

We would reject this argument. On November 21, 2011, the first day of
    the preliminary hearing, the defence provided to the Crown an affidavit sworn
    by the appellants wife, wherein she denied having any possessory or ownership
    rights in the weapons seized from the residence. Prior to the delivery of that
    affidavit, there is no evidence that there had been serious discussions between
    counsel regarding the withdrawal of charges. The parties were able to reach an
    agreement the next day that provided that the appellants wife would waive
    spousal immunity and provide a statutory declaration denying any interest in
    the weapons and ammunition seized, in exchange for the withdrawal of the
    charges against her.

[41]

While the Crown must act reasonably and according to a concrete plan in
    prosecuting a complex case, the Crown should not be forced to abdicate its
    responsibility to prosecute meritorious cases as a matter of expediency. The
    charges against the appellants wife were serious. The Glock was found in the
    master bedroom she shared with the appellant and there were photographs
    tendered of her posing with the handgun. In these circumstances, the Crowns
    insistence on proceeding with a prosecution was not unreasonable, as there was
    a reasonable prospect of conviction. We also note that the appellants current
    position is inconsistent with his position at trial and on appeal that the
    Glock handgun was in the possession of his wife.

[42]

The appellant also submits that the Crown delayed the proceeding in the
    Ontario Court of Justice because it unreasonably refused to agree to the
    suggestion made by defence counsel to streamline the pre-trial process. In a
    letter dated December 6, 2010, counsel for the appellant advised the Crown that
    he and his wifes counsel were prepared to seek instructions from their
    respective clients to waive committal on all charges in exchange for the Crown
    making Officer Rock Brunet available to be cross-examined on several
    Information to Obtains and affidavits that he had sworn in support of various
    judicial orders. Some of the areas of potential cross-examination were listed
    in the letter.

[43]

In effect, defence counsel were proposing a waiver of the preliminary
    hearing, which was scheduled eleven months away, in exchange for the Crown
    consenting to a
Dawson
application: see
R. v. Dawson
(1998),
    39 O.R. (3d) 436 (C.A.). This proposal was rejected by the Crown in a letter
    dated February 15, 2011 on the basis that the proposed areas of
    cross-examination were too broad and general in nature.

[44]

The appellant acknowledges that the Crown was under no obligation to
    accept the proposal, but argues that the Crown must bear the consequences of
    its exercise of prosecutorial discretion in rejecting the proposal. We would
    not accede to this argument for the following reasons.

[45]

First, there is no evidence that this proposal, which had only been made
    conditionally, would have saved significant time. The defence was proposing
    broad categories of cross-examination, which were identified as just some of
    the potential topics. It is likely that this would have been a lengthy
    cross-examination. It is also likely that there would have been disagreement
    among counsel regarding the scope of cross-examination as it related to the
    confidential informant. There is no reason to believe that issues regarding the
    scope of the cross-examination on this issue could have been resolved quickly.

[46]

Second, the Crown had a legitimate concern and a legal obligation to
    protect the identity of the confidential informant. The risk of exposing the
    confidential informant during the course of the cross-examination of Officer
    Brunet was a very real one. That is one reason why cross-examination of such
    affiants is not the general rule.

[47]

Again, we do not read
Jordan
as requiring the Crown to take any
    and all steps proposed by the defence to expedite matters. The Crowns
    reasonable and principled position on the
Dawson
application provides
    no basis to conclude the Crown acted arbitrarily or in bad faith in refusing to
    consent to the cross-examination proposed by the defence. So long as the Crown
    acts reasonably and consistently with its duties, it would be unconscionable to
    deny it the benefit of the complex case exception to the 30-month presumptive
    ceiling.

[48]

In our view, the Crown did have a concrete plan to move this very
    complex case forward. Nothing in the Crowns conduct complained of exacerbated
    the delay. To the contrary, the Crown acted reasonably and took steps to reduce
    the delay, including severing charges, and withdrawing charges against the
    appellants wife. Accordingly, in our view, although the net delay in this case
    exceeds the presumptive ceiling, we are satisfied that the case was
    particularly complex and that the delay was justified.

[49]

In the alternative, if the delay is not justified, the Crown also relies
    upon the transitional exceptional circumstances described in
Jordan
.
    The Supreme Court made clear that the new framework applies to cases currently
    in the system:
Jordan
, at para. 95. However, where the net delay
    exceeds the presumptive ceiling, a transitional exceptional circumstance may
    arise where the charges were brought prior to July 8, 2016, being the date of
    the release of
Jordan
. To invoke this transitional exceptional
    circumstance, the onus lies with the Crown to establish that the time the case
    has taken is justified based on the parties reasonable reliance on the
    previous state of the law:
Jordan
, at para. 96.

[50]

Before
Jordan
, prejudice and the seriousness of the offence
    often played a decisive role. For cases currently in the system, these factors
    can inform whether the parties reliance on the previous state of the law was
    reasonable:
Jordan
, at para. 96.

[51]

The Crown submits that the trial judge properly considered and applied
    the
Morin
framework and concluded there was no violation to the
    appellants s. 11(b) right. Thus the Crowns position is that regardless of
    whether the
Morin
or
Jordan
framework is applied, the delay
    in this case is not unreasonable.

[52]

The appellant submits that applying the
Morin
framework, the
    application judge erred in her consideration of the alleged delay caused by the
    Crown referred to above, i.e., the refusal to withdraw the charges against the
    appellants wife and the failure to accept the offer by defence counsel to
    expedite matters at the Ontario Court of Justice. The appellant further submits
    that he suffered prejudice by reason of the delay.

[53]

In
R. v. Williamson
, 2016 SCC 28, [2016] 1 S.C.R. 741, the
    court outlined a contextual assessment of the circumstances that inform an
    analysis of the applicability of the transitional exceptional circumstance. The
    court stated that relevant circumstances include: (i) the complexity of the
    case; (ii) the period of delay in excess of the
Morin
guidelines;
    (iii) the Crowns response, if any, to any institutional delay; (iv) the
    defence efforts, if any, to move the case along; and (v) prejudice to the
    accused.

[54]

An analysis of these contextual factors in the present case favours the
    position of the Crown. There is no doubt that this was a complex case. The
    inherent time requirements and the institutional delay were not unreasonable,
    and the delay attributable to the Crown was minimal. We are also satisfied that
    the Crown made efforts to move the matter forward expeditiously, including by
    severing charges, and withdrawing charges against the appellants wife. For the
    reasons stated above, we are also not of the view that the Crown acted
    unreasonably with respect to withdrawal of the charges against his wife or on
    the issue of the
Dawson
application. We are satisfied that the defence
    tried to move the case along and should be given due credit for that effort.
    With respect to prejudice, we agree with the application judges finding that
    much of the prejudice has been exaggerated by the appellant.

[55]

In the circumstances, if we are wrong that the complexity of the case
    rendered the delay reasonable, we would conclude that applying the transitional
    exceptional circumstances framework, the Crown has satisfied the court that the
    time that the case took was justified based on the parties reasonable reliance
    on the law as it previously existed.

[56]

For these reasons, we would dismiss the appeal of the application
    judges dismissal of the s. 11(b) application.

(ii)      Section 8 Application

[57]

The appellant renewed his challenge to the admissibility of evidence
    that was directly the product of the execution of judicial authorizations, or
    derivative of the same, pursuant to s. 8 of the
Charter
. The appellant
    argued that his right to be secure from unreasonable search and seizure was
    breached by the warrantless CBSA search and that, without the disclosure of the
    information in his iPhone, he would not have been included as a target in the
    judicial authorizations which were granted and the evidence obtained as a
    result of those authorizations would not have been admitted at trial.

[58]

In support of the s. 8 ground of appeal, the appellant also challenged
    the constitutionality of ss. 2 and 99(1)(a) of the
Customs Act
.  The
    appellant raised this issue for the first time on appeal.

[59]

In order to determine whether it was necessary to hear the s. 8 ground
    of appeal, including the constitutional challenge raised for the first time on
    appeal, the panel heard from the parties on the following issue:  assuming that
    the evidence obtained through the
Customs Act
search was inadmissible,
    whether the inadmissibility of that evidence could have made any difference in
    the proceedings, either in terms of the admissibility of the judicially
    authorized wiretaps or searches, or in terms of the admissibility of the
    evidence actually obtained from the wiretap and subsequent searches, and its
    effect on the ultimate result at trial.

[60]

After hearing oral submissions on this question, the panel indicated
    that it was unnecessary to determine the issue of the constitutionality of s.
    99(1)(a) of the
Customs Act
and that the s. 8 ground of appeal was
    dismissed with reasons to follow.  These are those reasons.

[61]

Turning first to the question of the constitutionality
    of s. 99(1)(a) of the
Customs Act,
courts are understandably reluctant
    to consider constitutional arguments on appeal not raised at trial.  In our
    view, having read the
facta
filed, these are issues that need a record
    specifically directed at the factual issues relevant to the constitutional
    question.

[62]

Moreover, to hear the constitutional argument would
    have been an academic exercise. As discussed below, we are satisfied that the
    evidence from the appellants iPhone obtained during the CBSA search could have
    had no impact on any aspect of the evidence that was adduced at trial.

[63]

The appellant made two important concessions regarding the significance
    of the CBSA search result to the wiretap authorizations. First, the appellant
    took no issue with the admissibility of the evidence derived from the first
    wiretap authorization, conceding that even without the evidence obtained from his
    iPhone during the CBSA search, the appellants communications would have been
    intercepted through his communications with the principal known persons, Billy
    Joe Krieger and Sherri-Lynn Newton, who were listed in the first wiretap
    authorization.  Second, the appellant also conceded that he could not argue
    that the debt list and other information taken from his iPhone during the CBSA
    search were critical to the trial judges analysis, and that this information
    standing alone would have made no difference to the ultimate result at trial.

[64]

The appellant submitted, however, that the results from the CBSA search
    stood as the basis for the subsequent judicial authorizations and that the
    evidence gleaned from the customs search was one of the pillars relied upon to
    obtain the second wiretap authorizations.  Specifically, the appellant argues
    that the police used the information obtained by the customs officers to
    interpret his communications from the first wiretap authorization, making the
    information gathered in the CBSA search inextricably linked to the grounds for
    the second, much broader wiretap authorizations, allowing the police to
    intercept all of the appellants communications with anyone from any place. 
    The fact that the appellant was designated as a known person rather than a
    principal known person in the first authorization demonstrated that the
    information put before the authorizing judge would not have been sufficient,
    without the iPhone search results, to justify the broader order requested in the
    second wiretap authorizations. As such, the appellant argues that if the CBSA
    search is found to be unconstitutional, the second wiretap authorizations and
    search warrants would be invalid, and the evidence flowing from them
    inadmissible.

[65]

We would not accept these submissions.

[66]

Starting with the last point first, the distinction that the appellant
    attempts to draw between principal known and known persons is absent from
    ss. 185 and 186 of the
Criminal Code
, which set out the relevant
    criteria for the granting of a wiretap authorization.  Specifically, s.
    186(4)(c) does not contain any language that requires or suggests categories of
    known persons; its requirement involves the identification of any known
    persons whose private communications are to be intercepted under the
    authorization:
R. v. Mahal
,
    2012 ONCA 673, 113 O.R. (3d) 209,
at para. 79, leave to appeal refused,
    [2012] S.C.C.A. No. 496.

[67]

As this court noted in
Mahal
, at para. 71, s. 185(1)(e) of the
Criminal
    Code
enacts the standard for including persons as known in the
    supportive affidavit. The standard is a modest one:

The threshold for describing a person as a known in the
    supportive affidavit is a modest one.  Investigators need not have reasonable
    and probable grounds to believe that the person was involved in the commission
    of an offence being investigated.  Provided investigators know the identity of
    the person and have reasonable and probable grounds to believe that the
    interception of that persons private communications may assist the
    investigation of an offence, that person is a known for the purposes of s.
    185(1)(e). [Citations omitted.]

[68]

That standard was met in this case.

[69]

The fact that the appellant was listed as a known rather than a
    principal known person in Officer Brunets May 19, 2009 affidavit in support
    of the first wiretap authorization does not affect the validity of the
    subsequent judicial authorizations.

[70]

More importantly, Officer Brunets July 12, 2009 affidavit supporting
    the second wiretap authorization did not rest on the three paragraphs
    containing the evidence obtained from the customs search.  Rather, the core of
    the affidavit depended on the appellants communications with Billy Joe Krieger
    and especially Sherri-Lynn Newton that were obtained from the exercise of the
    first wiretap authorization, as well as from the police surveillance that
    showed the appellant in close company with both of them.

[71]

Specifically, in paragraphs 164 to 188 of Officer Brunets July 12, 2009
    affidavit, he sets out in great detail what the police learned about the
    business relationship and interactions between the appellant and Ms. Newton
    from the first interception and subsequent surveillance, which led Officer
    Brunet to conclude that the appellant was engaged in the business of trafficking
    controlled substances.

[72]

The appellants intercepted communications and surveillance, coupled
    with his ties to the Ravens Nest bar, which served as a distribution point for
    the trafficking of cocaine and other controlled substances, his communications
    with Mr. Krieger and Ms. Newton, and his lien on Mr. Kriegers vehicle,
    constituted ample evidence to support the second authorization.  The iPhone
    evidence could be excised from the application and would not have affected it.

[73]

The appellant also submitted that the alleged impropriety of police
    actions in relation to the customs search could justify the exclusion of all of
    the evidence produced from the exercise of the judicially authorized wiretaps
    and searches under s. 24(2) of the
Charter
.

[74]

As this court recently stated in
R. v. Paryniuk
, 2017 ONCA 87,
    at para. 66, leave to appeal to S.C.C. filed, 37471 (March 9, 2017), a trial
    judge has a residual discretion to set aside a properly issued search warrant
    or authorization where the judge is satisfied that the conduct of the police
    has subverted the pre-authorization process through deliberate non-disclosure,
    bad faith, deliberate deception, fraudulent misrepresentation or the like. 
    However, the standard to be met to invoke this discretion is high:
Paryniuk
,
    at para. 70.

[75]

To succeed on this argument, the appellant must demonstrate that the
    alleged police conduct subverted the pre-authorization process.  We
    would not give effect to this argument.  The evidence falls woefully short of
    what is required to engage the residual discretion to set aside a search
    authority.

[76]

In our view, the admissibility or inadmissibility of
    the product of the CBSA search would have had no effect on the result of this
    appeal.  Accordingly, the s. 8 ground of appeal was dismissed.

(iii)     Criminal Interest Rate Agreements

[77]

The appellant was charged with offences of having entered into
    agreements or arrangements with several individuals to receive interest from
    them at a criminal rate (the loan agreements), and also with offences of
    having received from several individuals a payment or partial payment of
    interest at a criminal rate.  The appellant was acquitted of the charges to
    receive a payment or partial payment of interest at a criminal rate.  There is
    no appeal from those acquittals.  The appellant submits that the trial judge
    erred in convicting him of having entered into the loan agreements contrary to
    s. 347(1).

[78]

It is common ground that the appellant was operating a private lending
    program whereby he loaned money to high risk borrowers at high interest rates. The
    loan agreements were documented in writing. The terms of the agreements
    provided that interest was due monthly, beginning one month from the day the
    loan was made. The agreements stated that interest would be calculated at rates
    ranging from 59 to 60 percent per year and required that a certain amount was
    to be paid each month.

[79]

The appellant does not challenge the evidence given by the Crowns
    actuarial expert that the effective rate of interest of each of his impugned
    loan agreements exceeded 60 percent on the credit advanced under each of these
    agreements. However, the appellant denies that he knowingly agreed to charge
    effective annual rates of interest at a criminal rate of more than 60 percent. 
    The appellant argues that the Crown was required to prove beyond a reasonable
    doubt that he knew that the effective annual interest rates under each of these
    agreements were above 60 percent. The appellant submits that the trial judge
    erred in applying the presumption of knowledge under s. 347(3) to reject his
    defence of mistake of fact with respect to the interest charged under each
    agreement.

[80]

The Crowns position is that it is only required to prove beyond a
    reasonable doubt that the appellant voluntarily entered into the impugned loan
    agreements and had knowledge of their terms, and that those terms produce an
    effective rate of interest at a criminal rate upon the application of the
    requisite actuarial calculation.  The Crown relies on the inference that a
    person intends the natural consequences of his or her actions.

[81]

It is helpful at this point to consider the framework of the relevant
    portions of s. 347 of the
Criminal Code
.

[82]

For the purposes of this appeal, the relevant portions of subsections
    347 (1) and (3) read as follows:

(1)  Despite any other Act of Parliament, every one who enters
    into an agreement or arrangement to receive interest at a criminal rate, or
    receives a payment or partial payment of interest at a criminal rate, is

(a)  guilty of an indictable offence and liable to imprisonment
    for a term not exceeding five years;

(3)  Where a person receives a payment or partial payment of
    interest at a criminal rate, he shall, in the absence of evidence to the
    contrary, be deemed to have knowledge of the nature of the payment and that it
    was received at a criminal rate.

[83]

Section 347(1) of the
Criminal Code
creates two offences: (i)

entering into an agreement or arrangement to receive interest at a criminal
    rate (the agreeing offence); and (ii) receiving a payment or partial payment
    of interest at a criminal rate (the receiving offence):
Degelder
    Construction Co. v. Dancorp Developments Ltd.
, [1998] 3 S.C.R. 90, at
    paras. 28-32.

[84]

Under s. 347(2), criminal rate is defined as an effective annual rate
    of interest calculated in accordance with generally accepted actuarial
    practices and principles that exceeds 60 percent on the credit advanced under
    an agreement or arrangement.  As a result, effective annual rates of interest
    that are 60 percent or less when calculated in accordance with actuarial
    principles are not criminal rates of interest.

[85]

Whether an agreement or arrangement for credit is an agreement or
    arrangement to receive interest at a criminal rate should be narrowly construed
    and is determined as of the time the transaction is entered into:
Degelder,
at para. 29.

[86]

With these principles in mind, we turn first to the appellants
    submission that the trial judge erred because he did not consider the question
    of the appellants knowledge and misapplied the presumption under s. 347(3).

[87]

We agree that the trial judges application of the presumption of
    knowledge under s. 347(3) is inconsistent with the Crowns actuarial evidence
    and the trial judges findings and acquittal of the appellant in relation to
    the counts alleging that the appellant received a payment or partial payment of
    interest at a criminal rate.

[88]

The Crowns actuarial expert testified that he was unable to calculate
    whether the amounts that the appellant received as interest under the various
    agreements exceeded the criminal rate because the borrowers were not required
    to repay the amounts owing under these agreements by a specific date.  As a
    result of this evidence, the trial judge found that the Crown had failed to
    prove beyond a reasonable doubt that the appellant had received payments or
    partial payments at a criminal rate of interest and acquitted the appellant of
    the charges related to
receiving
interest
    at a criminal rate.

[89]

Section 347(3) deems a person to have knowledge where the person
receives
a payment or partial payment of
    interest at a criminal rate.  Given the trial judges finding that the Crown
    had failed to prove that the appellant received payments or partial payments of
    interest at a criminal rate, the presumption could not apply.  In light of that
    finding, the trial judge erred in applying the presumption as he did.

[90]

In the particular circumstances of this case, it is unnecessary for us
    to determine the more general question of whether the presumption under s.
    347(3) can ever apply to agreeing offences.  For the reasons stated, the
    factual circumstances of this case do not support such an application.

[91]

We turn next to address the fault requirement for the agreeing
    offences on which the appellant was convicted.

[92]

As earlier noted, s. 347(1) creates an offence of agreeing to receive
    interest at a criminal rate and an offence of receiving interest at a criminal
    rate.  The appellant was convicted on the agreeing charges and acquitted on
    the receiving charges.  These reasons address the fault requirement for the
    agreeing offence.

[93]

The Crown and the defence agree as to the conduct component of the
    agreeing offence.  The Crown must prove beyond a reasonable doubt an agreement
    or arrangement that called for payment of interest at a criminal rate, that is,
    an effective annual rate of greater than 60 percent.  Both interest and
    criminal rate are defined terms in s. 347(2).

[94]

The parties disagree as to the required fault or
mens rea
component.  The Crown submits that it must prove beyond a reasonable doubt
    that:

·

the
    appellant voluntarily entered into the agreement; and

·

the
    appellant knew the terms of the agreement.

[95]

The Crown argues for liability without any fault requirement beyond
    knowledge of the terms of the agreement.  On the Crowns argument, an honest
    and entirely reasonable belief that the effective annual interest rate agreed
    upon was below 60 percent would be no bar to a conviction.

[96]

The defence submits that, in addition to voluntarily entering into the
    agreement and knowing the terms of the agreement, the appellant must know or be
    wilfully blind to the fact that the agreements terms required payment at an
    effective annual rate of interest greater than 60 percent.

[97]

We begin with the language of s. 347(1).  Like many offence-creating
    provisions in the
Criminal Code
, s. 347(1) provides virtually no
    insight into the fault or
mens rea
component in the offence.  The
    section describes the prohibited conduct, or
actus reus
, without any
    express reference to the required fault component.

[98]

Section 347(1), however, undoubtedly creates a true crime.  The offence
    is punishable by up to five years in prison if, as in this case, the Crown
    proceeds by indictment.  There is a presumption that true crimes have a
    subjective fault component:  see
R. v. D.L.W.
, 2016 SCC 22, [2016] 1
    S.C.R. 402, at paras. 15-16; and
R. v. Sault Ste. Marie
, [1978] 2
    S.C.R. 1299, at p. 1303.  In
Sault Ste. Ma
rie
, at p. 1309,
    Dickson J., as he then was, identified the crucial difference between criminal
    and regulatory offences:

Where the offence is criminal, the Crown must establish a
    mental element, namely, that the accused who committed the prohibited act did
    so intentionally or recklessly, with knowledge of the facts constituting the
    offence, or with wilful blindness toward them.

[99]

The fault component of true crimes is not necessarily subjective. 
    However, when the provision creating the crime is silent as to the requisite
mens
    rea
, judicial interpretation usually favours subjective fault.  The
    presumption in favour of subjective fault reflects the constitutional principle
    that the morally innocent should not be subjected to punishment.  Subjective
    fault in the form of intention, recklessness, knowledge, or some other mental
    state provides an effective dividing line between the morally culpable and the
    morally innocent.  For example, a persons possession of stolen property is
    morally innocent if that person does not know that the property is stolen.  The
    same possession is morally culpable if the person knows that the property is
    stolen.

[100]

The
gravamen
of the offence of agreeing to accept interest at a criminal rate lies in the
    effective annual interest rate charged by the terms of the agreement.  If the
    rate is 60 percent or lower, the agreement is not criminal.  It is the rate,
    and more precisely a rate of over 60 percent, that makes the agreement
    potentially criminal.  The prohibition against punishing the morally innocent
    dictates that the fault component should attach to the feature of the agreement
    that distinguishes those agreements that are criminal from those that are not. 
    The effective annual interest rate charged by the terms of the agreement is
    that feature.

[101]

Knowledge, or
    its legal equivalent, wilful blindness, that the terms of the agreement call
    for an effective annual interest rate of over 60 percent provides a fault
    element that ensures the morally innocent are not captured by the prohibition
    in s. 347(1).  In so describing the requisite fault element, we do not suggest
    that the accused must know how the
Criminal Code
defines or calculates
    the effective annual interest rate.  Those are matters of the law and ignorance
    of the law is no excuse:
Criminal Code
, s. 19.  For example, the
    accuseds belief that the criminal rate of interest is defined as over 70 percent
    would not assist the accused who entered into an agreement to receive interest
    at a rate of over 60 percent.  Nor would the accuseds mistaken belief that
    interest did not include certain charges defined as interest in s. 347(2)
    assist the defence.  However, a belief that the effective annual interest rate
    charged by an agreements terms was 60 percent or less  according to generally
    accepted actuarial principles and the definitions in s. 347(2)  would negate
    knowledge and provide a defence.

[102]

There can be no
    doubt that requiring the Crown to prove knowledge or wilful blindness makes the
    prosecutions task harder.  The imposition of a subjective fault requirement
    inevitably has that effect.  Requiring proof of knowledge does not, however,
    render the provision impotent or unworkable, particularly
when
    the prosecution takes aim at loan sharks, the evil targeted by the
    legislation.

[103]

In a case like this one, for instance, the agreements expressly set
    out annual simple interest rates at the very edge of the criminal rate and required
    significant monthly interest payments.  We think it would be open to a trier of
    fact to infer that a lender would know, or be wilfully blind, that generally
    accepted actuarial principles dictate an effective annual rate of interest well
    above the amount stated in the agreement.  Clearly, the same inference would
    not be as readily available in other commercial contexts, particularly if there
    was conflicting evidence as to how interest should be calculated on the
    application of generally accepted
actuarial practices
and principles to the terms of the agreement.  We do not think the criminal
    prohibition in s. 347(1) was ever intended to capture these kinds of
    agreements.

[104]

In our view, the interpretative principles
    developed since
Sault Ste. Marie
fully warrant a reading of s. 347(1) that requires the Crown to prove
    beyond a reasonable doubt that the accused knew (or was wilfully blind) that
    the terms of the agreement charged an effective annual rate of interest in
    excess of 60 percent.

[105]

The language of s. 347(3) provides a further indication that
    Parliament intended that the fault requirement in the offences created by s.
    347(1) have a knowledge component.  The section reads:

(3) Where a person receives a payment or partial payment of
    interest at a criminal rate, he shall, in the absence of evidence to the
    contrary, be deemed to have knowledge of the nature of the payment
and that it was received at a criminal rate.

[Emphasis added.]

[106]

The section
    deems (absent evidence to the contrary) an accused to have knowledge that an
    interest payment was received at a criminal rate if the Crown first proves
    that the accused received an interest payment at a criminal rate.  The deemed
    knowledge component of s. 347(3) would be
superfluous if
    knowledge that the payment was received at a criminal rate was not an essential
    element of the offence or offences to which s. 347(3) applies.

[107]

In
R. v. McRobb
(1986), 32 C.C.C.
    (3d) 479, in a brief endorsement, this court indicated that the predecessor to
    s. 347(3) applied only to the charge of receiving interest at a criminal rate
    and not to the charge of agreeing to receive interest at a criminal rate. 
    Assuming that distinction is sound, the language of s. 347(3) still informs the
mens rea
required on a charge of agreeing to
    receive interest at a criminal rate.

[108]

We see no basis,
    either in principle or in the language of s. 347, to distinguish between the
    fault components of the two offences created by s. 347(1).  It would be passing
    strange to require proof of knowledge that a payment received was in excess of
    60 percent interest, while at the same time imposing criminal liability for
    entering into an agreement to make the very same payment without requiring
    proof of that knowledge.

[109]

Agreeing to
    receive interest at a criminal rate is an inchoate crime that is
preparatory to the substantive offence of receiving payment at a
    criminal rate of interest.  As explained in
R. v. Legare
, 2009 SCC 56,
[2009] 3 S.C.R. 551,
at paras. 32-35, inchoate offences
    punish conduct that is preliminary to, and removed from, the actual conduct
    that causes the harm which the criminal prohibition seeks to prevent.  Because
    the offence is somewhat removed from the actual harm, the criminal law
    generally requires a higher degree of subjective fault for the inchoate crime
    than is required for the substantive offence.  This principle would be turned
    on its head if s. 347(1) were interpreted to require proof of subjective
    knowledge for the offence of receiving interest at a criminal rate, but to have
    no such requirement for the offence of agreeing to receive interest at a
    criminal rate.

[110]

Legare
provides a second lesson
    relevant to assessing the appropriate fault element in the offence of agreeing
    to receive interest at a criminal rate.  As Fish J. notes, at para. 35, if the
    conduct prohibited by a provision creating a criminal offence is very broad, a
    subjective standard of fault serves to circumscribe the reach of the
    prohibition and properly restrain the application of the criminal law.

[111]

As observed in
Garland v. Consumers Gas Co.
,
[1998] 3 S.C.R. 112
, at para. 24:  The
scope of the language in s. 347 is
    extremely broad.  A review of the extensive case law in which the section has
    been applied to challenge the legality of various commercial transactions
    demonstrates the broad scope of the provision.  Without a subjective fault
    component that identifies the morally culpable, the section would criminalize
    commercial transactions bearing no resemblance to the kind of loan sharking
    activity targeted by the provision:  see e.g.,
Garland
;
TerraCan
    Capital Corp. v. Pine Projects Ltd.
(1993), 75 B.C.L.R. (2d) 256 (C.A.);
Degelder
    Construction Co.
;
William E. Thomson Associates Inc. v. Carpenter
(1989), 69 O.R. (2d) 545 (C.A.), leave to appeal refused, [1989] S.C.C.A. No.
    398; and
Transport North American Express Inc. v. New Solutions Financial
    Corp.
, 2004 SCC 7, [2004] 1 S.C.R. 249.

[112]

The trial
    judgment in
R. v. McRobb
(1984), 20 C.C.C. (3d) 493 (Ont. Co. Ct.),
    vard (1986), 32 C.C.C. (3d) 479 (Ont. C.A.), is one of the few criminal cases
    in which the fault component has been considered in any detail.  The trial
    judge describes the requisite fault requirement in different ways in the course
    of his reasons.  The ambiguity is no doubt explained by the facts of the case. 
    On the evidence, the terms of the agreement clearly demanded payments well in
    excess of 60 percent effective annual interest.  Knowledge of the terms
    effectively proved knowledge that the agreement required payments at a rate
    beyond 60 percent.

[113]

The many civil cases that have considered the argument that
    the particular commercial agreement is illegal because it charged a criminal
    interest rate have uniformly treated s. 347(1) as breached if the terms of the
    agreement impose an effective annual interest rate of over 60 percent.  In the
    commercial context, the lenders intent or knowledge that the effective rate
    exceeded 60 percent becomes relevant only when the court is considering remedy,
    and specifically the extent to which the court should enforce or alter the
    terms of the agreement between the parties:  see
Transport North American
    Express Inc.
, at para. 44
;
    and
TerraCan Capital Corp.

[114]

In our view, the
    civil cases pose no impediment, in the context of a criminal prosecution, to
    the interpretation of s. 347(1) as requiring the Crown to prove that the
    accused knew that the agreement or arrangement charged an effective annual rate
    of interest above 60 percent.  The legality of an agreement for the purposes of
    enforceability may well be determined exclusively by reference to the terms of
    the agreement.  However, the imposition of criminal liability for entering into
    that same agreement, in our view, requires proof of moral culpability as
    evinced by a culpable state of mind:  see
TerraCan Capital Corp.
, at
    paras. 30-31.

[115]

We would order a
    new trial on the charges of entering into an agreement to receive interest at a
    criminal rate.

(iv)     Misapprehension of the Evidence and Unreasonable
    Verdicts

[116]

As noted above,
    the appellant asserts that virtually all of his convictions are based on
    misapprehensions of the evidence and/or are unreasonable. Before turning to the
    specific convictions in issue, we note that it is well established that the
    threshold to justify appellate intervention due to a misapprehension of the
    evidence or an unreasonable verdict is a high one.

(a) Criminal Organization Offences

[117]

The appellant
    was convicted of several criminal organization offences.  Section 467.1(1) of
    the
Criminal Code
defines a criminal organization, as follows:

criminal organization
means a group, however organized, that

(a)
is composed of three or more persons in or outside Canada; and

(b)
has as one of its main purposes or main activities the facilitation or
    commission of one or more serious offences that, if committed, would likely
    result in the direct or indirect receipt of a material benefit, including a
    financial benefit, by the group or by any of the persons who constitute the
    group.

It does not include a group of
    persons that forms randomly for the immediate commission of a single offence.

[118]

The appellant
    argues, and we agree, that every criminal organization will involve a
    conspiracy but not every conspiracy is a criminal organization. Assuming that
    the trial judge was correct in finding the existence of a conspiracy, the
    appellant submits that there was insufficient evidence of permanence or
    hierarchy to ground a finding of the existence of a criminal organization.

[119]

The definition
    of a criminal organization is broader than the groups one traditionally
    associates with organized crime. The guiding question in assessing whether a
    group of individuals forms a criminal organization is whether the group
    pose[s] an elevated threat to society due to the ongoing and organized
    association of their members:
R. v. Venneri
, 2012 SCC 33, [2012] 2
    S.C.R. 211, at para. 40.

[120]

Stereotypical
    hallmarks such as territoriality, hierarchy, exclusive membership and violence,
    are indicia of a criminal organization, but are not necessary conditions:
Venneri
,
    at paras. 37-38; and
R. v. Battista
, 2011 ONSC 4771, at para. 21.
    Rather, courts must take a flexible approach, appreciating that criminal
    organizations have no incentive to conform to any formal structure:
Venneri
,
    at para. 28, citing
R. v. Terezakis
, 2007 BCCA 384, 223 C.C.C. (3d)
    344, at para. 34, leave to appeal refused, [2007] S.C.C.A. No. 487.

[121]

Courts have
    found that criminal organizations exist even in small drug operations, where
    they involve a division of labour, temporal continuity, and an intention by the
    members to advance their illicit goals through the organization.

[122]

For example, in
R.
    v. Pasquin
, 2014 QCCA 786, leave to appeal refused, [2014] S.C.C.A. No.
    270, the Quebec Court of Appeal upheld the trial judges finding that three
    people involved in cocaine trafficking comprised a criminal organization. One
    member was responsible for transporting the cocaine. Another member was
    responsible for brokering meetings between members and providing a safe place
    to conspire to traffic the cocaine.

[123]

Similarly,
R.
    v. Beaven
, 2013 SKQB 7, 411 Sask. R. 129, also involved a small cocaine
    trafficking operation that was found to be a criminal organization. The group
    had a leader who ran an elaborate scheme to buy large quantities of cocaine,
    dilute it, repackage it and sell it for profit. He instructed other members to
    transport and sell the cocaine. He was responsible for negotiating pricing,
    securing deliveries, and supplying cutting agents.

[124]

It is useful to
    compare those cases to cases where a criminal organization was alleged by the
    Crown but not established. In
R. v. Kwok
, 2015 BCCA 34, 320 C.C.C.
    (3d) 212, five people came together to import ketamine into Canada. Their plan
    was elaborate and they divided labour. However, there was no evidence of any
    continuity beyond the one isolated scheme, so no criminal organization was
    found to exist. The court came to the same conclusion in
R. v. Savari
    Carbonnel
, 2014 QCCA 95, noting that there was no evidence the
    co-conspirators got together for anything more than one cocaine importation.

[125]

The determination
    of whether the existence of a criminal organization has been established is a
    highly factual one. In the present case, the trial judge found that the
    appellant was part of a criminal organization based on the following evidence:

·

The
    appellant, Mr. Wall, and Mr. Sarsfield formed a group of three persons whose
    main purpose was to traffic in cocaine and marijuana.

·

The
    group was organized into a hierarchy. The appellant was the leader. He bought
    cocaine at the kilogram level, cut it, and repackaged it into gram-sized
    decks. Mr. Wall was the middleman who shielded the appellant from the public
    and police. He helped repackage the cocaine and transported it from the stash
    to the bar. Mr. Sarsfield operated the bar where the cocaine was sold.

·

The
    groups structure gave them an advantage. The appellant controlled the supply,
    the method of packaging, and the formula he used to cut the cocaine.

·

The
    organization operated for a considerable period of time.

·

There
    was no evidence of monopolistic or territorial behaviour. However, the
    multitude of weapons found at the appellants various residences suggested the
    organization was willing to use violence to protect itself and its members.

[126]

This is
    obviously not a stereotypical organized crime case. This was a small operation
    with a loose structure. But as the Supreme Court cautioned in
Venneri
,
    in determining whether the existence of a criminal organization has been
    established, courts must look beyond the stereotypical view of organized crime
    described in earlier case law, e.g.
R. v. Lindsay
, [2005] O.T.C. 583
    (S.C.), affd 2009 ONCA 532, 97 O.R. (3d) 567, leave to appeal refused, [2009]
    S.C.C.A. No. 540.

[127]

In the
    circumstances, based on the record before him, it was open to the trial judge
    to find that the Crown had proven beyond a reasonable doubt the existence of a
    criminal organization. There is no basis for appellate interference with this
    finding.

(c) Extortion

[128]

The appellant
    was convicted of one count of extortion in relation to a loan he made of
    $15,000 to V.C. In support of this loan, V.C. signed a promissory note for
    $15,000, which provided for an interest only monthly payment of $750.

[129]

In examination
    in chief, V.C. was asked whether he was threatened for non-payment or late
    payment of the loan. He replied that he had not been threatened. The Crown then
    played various intercepts of conversations between V.C. and the appellant. The
    trial judge reviewed these calls and summarized V.C.s evidence related to
    them, at para. 283:

V.C. testified that he understood that Mr. Saikaley was
    intending to send someone to rough him up as a result of what he had heard
    Mr. Saikaley tell him on September 30, 2009. During cross-examination,
    V.C. said that during the telephone conversations, reviewed in the previous
    paragraph, he had felt threatened a little bit, not threatened but worried.
    During cross-examination, V.C. testified that he understood that his $750
    payment was made to satisfy interest only on his loan.

[130]

The trial judge
    went on to find the appellant guilty of extortion, at para. 287:

I also find Mr. Saikaley guilty of Count 38, namely,
    of extortion. The defences position is unacceptable as V.C. confirmed that the
    threat was made and it was made to collect a debt.  If a debtor does not
    pay, a lenders arsenal to collect on the debt consists of obtaining the
    services of a lawyer and commencing a lawsuit. It does not, however, consist of
    threatening physical harm, as Mr. Saikaley did when he threatened:
    Ill send a couple of my lads over to your place to collect the paperwork.
    These are Mr. Saikaleys exact words on the intercepted phone call to V.C.

[131]

The appellant
    submits that the verdict is unreasonable. He says the trial judge erred in
    relying on V.C.s testimony that the appellants suggestion that he was going
    to come by and say hello probably meant that the appellant was going to rough
    him up for non-payment. According to the appellant, this evidence was
    speculative and amounted to an
ex post facto
assessment of what the
    statement on the intercept meant.

[132]

We do not accept
    that this verdict was unreasonable. In our view, it is entirely supported by
    V.Cs testimony and by the contents of the intercepts, which included
    statements made by the appellant to V.C. stating that youre going to have a
    rough fucking week if you dont pay me bud, and call me or else Ill send a
    couple of my lads over to your place to collect the paperwork, and I was
    sending somebody to come and say hello to you.

[133]

These statements
    were made in the context of a predatory relationship and, with respect to at
    least one of the statements, V.C. testified that he interpreted it as a threat
    to rough him up to collect the money owing. In our view, the conclusion that
    the appellant was threatening violence was not only reasonable, it was
    inescapable. That conclusion is bolstered by the fact that the appellant did
    not testify and offer a plausible alternative explanation for his threatening
    words.

(c) Weapons Offences

[134]

The appellant
    was convicted of numerous firearm offences. For present purposes, it is helpful
    to distinguish the firearm offences resulting from the search of the residence
    from the firearm offences resulting from the search of the rental apartment.

[135]

The execution of
    a search warrant at the residence led to the discovery of, among other things,
    the loaded Glock handgun and a Sabre stun gun. The Glock was found under a
    night table to the left of the bed in the master bedroom. The stun gun was in a
    safe located on the floor of a closet in the master bedroom. The safe also
    contained two pill bottles labelled with the appellants name. The execution of
    a search warrant at the rental apartment located an Enfield .38 calibre
    revolver.

[136]

The primary
    issue at trial on these counts was whether the Crown had proven beyond a
    reasonable doubt that the appellant was in possession of the weapons. On
    appeal, the appellant argues that, while there may be some evidence suggesting
    that he had knowledge of the weapons, the Crown has adduced no evidence that
    could reasonably support the inference that he had the requisite degree of
    control over those items so as to be in joint possession of them. Accordingly,
    he argues that the firearms convictions are unreasonable.

[137]

In our view, the
    appellant has failed to establish that the verdicts on the firearm counts are
    unreasonable.

[138]

With respect to
    the weapons seized from the residence, there is ample evidence which support
    these convictions. The mere location of the seized weapons supports both
    knowledge and possession. Two pictures seized from the appellants computer
    show him posing with his wife, who is holding the Glock handgun. In addition,
    the weapons seized were part of a large cache of weapons located in the
    residence. These weapons include a throwing knife, arrow tips, and a laser-aim
    sighting mechanism for a handgun.

[139]

In the face of
    this evidence, the appellant argues that his wife may have had exclusive
    control over these weapons, because she was sleeping alone in the residence for
    the two weeks before the execution of the search warrant. The difficulty with
    this argument is that is wholly unsupported by the evidence. Neither the
    appellant nor his wife testified. In assessing the reasonableness of the
    verdict, this court is entitled to take into account their failure to testify
    on this point, and the absence of evidence to support the appellants
    submission.

[140]

With respect to
    the convictions related to the Enfield revolver, the appellant submits that
    because Mr. Wall and Mr. Walls girlfriend were the primary occupants of the
    rental apartment, the trial judge unreasonably convicted him on the basis that
    he was in joint possession of the revolver. Again, the appellant has not met
    his onus of establishing that these verdicts were unreasonable.

[141]

While the
    appellant was not the main occupant of the rental apartment, there was evidence
    that he had unlimited access to it, and was closely associated with it. He paid
    the rent and the associated bills for the rental apartment. He had a fob to
    enter the building, and keys to dead bolt locks that were installed on the
    apartment door and on a walk-in closet. The evidence established that when the
    appellant wanted sole possession of the rental apartment, the persons living
    there would vacate the premises.

[142]

In addition,
    three gym bags were found in the walk-in closet in the rental apartment that
    contained narcotics and drug related paraphernalia. One of the bags contained
    an invoice from a law firm addressed to the appellant and five bullets for a
    .38 calibre gun. The police also seized .38 calibre bullets at the residence.

[143]

Again, the appellant
    did not testify to offer an innocent explanation regarding the evidence that
    links him to the revolver.

(d) Conspiracy and Substantive Drug Offences

[144]

In his factum,
    the appellant advances three grounds of appeal related to the conspiracy and
    substantive drug offences.

[145]

First, the
    appellant argued that he only took possession of a quantity of hashish and
    marijuana from Mr. Kaizer as collateral for a loan. Thus, he submitted that he
    did not possess the drugs for the purpose of trafficking. This argument was
    abandoned during oral argument.

[146]

Second, the
    appellant submits that the trial judge erred in concluding that he was in
    possession of the contents of the rental apartment. This argument has already
    been rejected above in the section dealing with the weapons convictions, and
    need not be addressed here.

[147]

Third, the
    appellant submits that the trial judge erred in interpreting the
    co-conspirators exception to the hearsay rule too broadly, in that he failed
    to engage in an analysis of whether the utterances of the third parties were in
    furtherance of any alleged offence. Significantly, the appellant does not
    identify any statements or acts relied upon by the trial judge under the
    co-conspirators exception that were not capable of being in furtherance of an
    on-going conspiracy.

[148]

In any event, we
    would not give effect to this submission. The trial judge made repeated
    reference to the in-furtherance requirement. Indeed, at para. 62 of his
    reasons, the trial judge considered the relevant case law regarding the issue
    and concluded, I must rely only on those acts or declarations that further the
    common interest, which are the very acts and declarations that the parties
    themselves are likely to have relied upon in seeking to achieve the common
    goal. Clearly the trial judge was mindful of the need to only rely upon acts
    and declarations in furtherance of the conspiracy when utilizing the
    co-conspirators exception to the hearsay rule.

(e) Proceeds of Crime

[149]

The appellants
    argument on this ground of appeal is limited to the assertion that, to the
    extent the trial judge erred in convicting the appellant on any of the
    substantive drug offences, the convictions for the proceeds of crime offences
    should also fail to a corresponding degree. In light of our conclusion on the appeal
    of the conspiracy and substantive drug offences, it is unnecessary to consider
    this ground of appeal.

(v)

Sentence Appeal

[150]

The appellant
    was sentenced to 19 years imprisonment, with a parole ineligibility order
    under s. 743.6(1.1) and s. 743.6(1.2) of the
Criminal Code
, as a
    result of the appellants convictions on the criminal organization offences,
    thereby prohibiting him from applying for parole for 9 ½ years.  The trial
    judge gave the appellant credit of eight months for his pre-sentence custody
    and restrictive bail conditions, reducing the sentence to be served to 18 years
    and 4 months.

[151]

The appellant
    submits that the sentence imposed was the product of various errors in
    principle, failed to give effect to the principles of totality and proportionality,
    and was manifestly unfit.  Further, the trial judge erred in delaying his
    parole eligibility on all offences, which is conceded by the Crown.

(i)

Length of sentence

[152]

The appellant
    concedes that a significant custodial sentence was appropriate because he was
    sentenced on the bases that he was a dangerous drug trafficker and money lender
    who mixed violence and weapons to carry out his offences in the context of a
    criminal organization.  Moreover, in light of the conviction for the criminal
    organization offence, the appellant acknowledges that the trial judge was
    required to impose a sentence for those offences that was consecutive to any
    other sentence that was imposed.

[153]

However, the
    appellant submits that the sentence was crushing and manifestly unfit because
    it greatly exceeded the range of sentences for similar offences and offenders
    and even the 15 to 18 year range suggested by the Crown on sentencing. As a
    result, the trial judge failed to give effect to the principles of totality and
    proportionality.  The appellant also submits that the trial judge erred in
    refusing to grant the appellant credit for pre-sentence custody and restrictive
    bail conditions on a 1.5 times basis.

[154]

The Crown
    concedes that the trial judge should have granted credit for pre-sentence
    custody on a 1.5 times basis and that the appellants global sentence should
    accordingly be reduced by a further 30 days. Otherwise, the Crown submits that
    there is no basis to interfere with the sentence imposed.

[155]

It is
    well-established that a trial judges sentence is entitled to considerable deference
    on appeal. Absent error in principle, a failure to consider a relevant factor
    or the erroneous consideration of an aggravating or mitigating factor that has
    had an impact on the sentence imposed, appellate intervention is not
    justified:
R. v. Lacasse
, 2015 SCC 64, [2015] 3 S.C.R. 1089, at
    paras. 43-44.

[156]

In our view,
    appellate intervention is justified in the present case because the trial judge
    erred in his application of the principles of totality and proportionality.

[157]

Section 718.1 of
    the
Criminal Code
sets out the fundamental sentencing principle that a
    sentence must be proportionate to the gravity of the offence and the degree of
    responsibility of the offender.  The more serious the offence and its consequences,
    or the greater an offenders degree of responsibility, the heavier the sentence
    imposed will be:
Lacasse
, at para. 12.

[158]

Section 718.2(c)
    of the
Criminal Code
provides that where, as here, consecutive
    sentences are imposed, the combined sentence should not be unduly long or
    harsh. The principles of totality and proportionality require a sentencing
    judge to ensure that the cumulative sentence rendered does not exceed the
    overall culpability of the offender; the cumulative sentence may offend the totality
    principle if the aggregate sentence is substantially above the sentence for the
    most serious of the offences or if its effect is crushing:
R. v. M. (C.A.)
,

[1996] 1 S.C.R. 500, at para. 42.

[159]

In the present
    case, the trial judge properly considered and gave effect to the aggravating
    and mitigating factors in this case. He considered whether some sentences
    should be served consecutively or concurrently with other sentences and
    correctly stated the principle of totality. He then imposed a global sentence
    of 19 years and allocated it among the counts.

[160]

However, the
    trial judge erred by failing to consider and account for the overlap among the
    conspiracy, trafficking, proceeds of crime, firearm and criminal organization
    offences. The appellant was the leader of a criminal organization that
    conspired to traffic in controlled substances and used firearms to carry out
    this business in the context of a criminal organization. The main focus of the
    appellants criminal organization was the distribution of cocaine and other
    controlled substances through the operation of an Ottawa bar and the activities
    of his associates.

[161]

While the
    sentences when viewed in isolation are appropriate, collectively they amount to
    a longer term than is warranted. The trial judge acknowledged the sentencing
    principle that the least restrictive sanction should be imposed.  However, he
    did not consider whether the overall sentence materially exceeded the longest
    sentence for the most serious offence of drug trafficking, which, according to
    the case law reviewed by the trial judge, ranged from eight to fifteen years. 
    He failed to ensure that the cumulative sentence ordered did not exceed the
    overall culpability of the appellant, given the overlap in the offences carried
    out under the umbrella of a criminal organization.  If he had, he would not
    have imposed a 19-year effective sentence in the circumstances of this case. As
    a result, the trial judge erred in imposing a sentence that failed to
    adequately reflect the principles of totality and proportionality.

[162]

In determining
    what the appropriate global sentence should be, we adopt the trial judges
    analysis of the predominantly aggravating and few mitigating factors in this
    case. The appellant had high moral culpability; he was the ring leader and high
    level dealer in a sophisticated commercial drug operation that packaged and
    distributed kilogram bricks of cocaine into large quantities of one gram decks,
    as well as other controlled substances. He engaged in extortion and used
    weapons to carry on his drug-trafficking business with his associates.

[163]

In our view,
    sentences totalling 15 ½ years would have been appropriate.  The appellant is
    however entitled to 9 months credit for pre-sentence custody, yielding a total
    sentence of 14 years, 9 months. To achieve that total sentence, we would leave
    the concurrent sentences unchanged and impose the following consecutive
    sentences:

Trafficking and Proceeds of Crime Offences:

·

Count 16, conspiracy to traffic in cocaine:  5 years, 3 months;

·

Count 8, proceeds of crime:  6 months;

Weapons
    Offences:

·

Count 3, possession of a loaded Glock prohibited firearm:  5
    years;

Extortion Offence:

·

Count 38, extortion:  1 year;

Criminal Organization Offences
:

·

Count 14, directing the commission of an indictable offence:  3
    years.

[164]

We would not
    accept the appellants argument that the trial judge did not give effect to the
    parity principle of sentencing.  Excepting to the extent that we would
    vary it, the sentence imposed by the trial judge was otherwise a fit sentence
    for the appellant and the offences for which he was convicted.

(ii)

Parole ineligibility order

[165]

The appellant
    concedes that the trial judges order under s. 743.6(1.2) in relation to his
    criminal organization convictions under ss. 467.11, 467.12 and 467.13 was mandatory
    and that, as a result, he is not entitled to parole until he has served half of
    his sentence for those convictions. However, the appellant submits that the
    trial judge erred in treating all of the offences for which he was convicted as
    criminal organization offences and, as a result, in applying s. 743.6(1.1) to
    delay his parole eligibility for 50% of his global sentence of 19 years.

[166]

At para. 78, the
    trial judge gave the following reasons for his decision to impose a parole
    ineligibility order:

I increase your parole ineligibility at 50%, pursuant to
    section 743[.6] (1.1) and section 743[.6] (1.2) of the
Code
. You
    rendered detection difficult and a tremendous amount of police resources were
    required to investigate your case.  You conscientiously focused on maximizing
    your profit and in so doing you victimized a large number of persons.  You
    operated through the structure of a corporation and individuals to minimize the
    risk to yourself. The fact that the offences were committed inside a criminal
    organization makes it necessary to increase the parole ineligibility. 
    Denunciation and deterrence are paramount considerations applicable here.

[167]

The relevant
    provisions governing eligibility for parole under ss. 743.6(1.1) and (1.2) of
    the
Criminal Code
, as they existed at that time, were as follows:

(1.1) [W]here an offender receives a sentence of imprisonment
    of two years or more,  on conviction for a criminal organization offence other
    than an offence under section 467.11, 467.12 or 467.13, the court may order
    that the portion of the sentence that must be served before the offender may be
    released on full parole is one half of the sentence or ten years, whichever is
    less.

(1.2) [W]here an offender receives a sentence of imprisonment
    of two years or more,  on conviction for a terrorism offence or an offence
    under section 467.11, 467.12 or 467.13, the court shall order that the portion
    of the sentence that must be served before the offender may be released on full
    parole is one half of the sentence or ten years, whichever is less, unless the
    court is satisfied, having regard to the circumstances of the commission of the
    offence and the character and circumstances of the offender, that the
    expression of societys denunciation of the offence and the objectives of specific
    and general deterrence would be adequately served by a period of parole
    ineligibility determined in accordance with the
Corrections and Conditional
    Release Act
.

[168]

Under s. 2 of
    the
Criminal Code
, a criminal organization offence was defined, at
    that time, as follows:

(a)  an offence under section 467.11, 467.12 or 467.13, or a
    serious offence committed for the benefit of, at the direction of, or in
    association with, a criminal organization, or

(b)  a conspiracy or an attempt to commit, being an accessory
    after the fact in relation to, or any counselling in relation to, an offence
    referred to in paragraph (a).

[169]

Under s.
    467.1(1), a serious offence means an indictable offence under this or any
    other Act of Parliament for which the maximum punishment is imprisonment for
    five years or more, or another offence that is prescribed by regulation.

[170]

In making the
    parole eligibility order under ss. 743.6(1.1) and (1.2), the trial judge
    properly considered the applicable circumstances of the commission of the offences
    and the character and circumstances of the appellant, as well as the paramount
    principles of denunciation and deterrence, in accordance with s. 743.6(2):

For greater certainty, the paramount principles which are to
    guide the court under this section are denunciation and specific or general
    deterrence, with rehabilitation of the offender, in all cases, being
    subordinate to these paramount principles.

[171]

However, for the
    offences other than under s. 467.11, 467.12 or 467.13, the trial judge was also
    required to consider the other criteria under ss. 743.6(1.1), namely, whether
    the offences for which the appellant was convicted were criminal organization
    offences, in accordance with the above definitions, and, if so, whether the
    appellant received sentences of two years or more in relation to those
    offences.  The trial judge did not do so.  As a result, he erred in failing to
    explain why all of the offences were criminal organization offences, and in
    extending his order under s. 743.6(1.1) to offences which were not criminal
    organization offences and for which the appellant received a sentence of
    imprisonment of less than two years.

[172]

While conceding
    the trial judges errors, the Crown submits that this court may clarify the
    trial judges order and determine which offences should be subject to a parole
    ineligibility order under s. 743.6(1.1).

[173]

We decline to do
    so.

[174]

As a result, the
    trial judges order on parole eligibility, except under s. 743.6(1.2) in
    relation to the criminal organization convictions under s. 467.11, 467.12 and
    467.13, must be set aside.

(vi)     Forfeiture

[175]

The trial judge
    made a forfeiture order under s. 462.37(2.01) of the
Criminal

Code
.
    That subsection targets the property of offenders who are involved in criminal
    organizations or engaged in serious drug crime. It provides that property
    identified by the Attorney General in an application for forfeiture shall be
    forfeited where the court is satisfied on a balance of probabilities that:

(a)
within 10 years before the
    proceedings were commenced in respect of the offence for which the offender is
    being sentenced, the offender engaged in a pattern of criminal activity for the
    purpose of directly or indirectly receiving a material benefit, including a
    financial benefit; or

(b)
the income of the offender from
    sources unrelated to designated offences cannot reasonably account for the
    value of all the property of the offender.

[176]

Subsection
    462.37(2.03) provides that a court shall not make a forfeiture order in
    respect of any property that the offender establishes, on a balance of
    probabilities, is not proceeds of crime.

[177]

The trial judge
    ordered the forfeiture of all of the identified property, except where there
    was evidence of lawful ownership by third parties. In making his order, the
    trial judge relied upon the evidence of a forensic accountant called by the
    Crown, and concluded that between 2005 and 2009 the appellant had between
    $418,044.00 and $1,125,770.00 in unknown sources of income. The trial judge
    found on a balance of probabilities that $800,000 of this income was proceeds
    of crime. Ultimately, the trial judge ordered a forfeiture in the amount of
    $53,000, and a fine in lieu of forfeiture in the amount of $1,296,293.37.

[178]

The appellant
    submits that there was evidence that he had lawful sources of income related to
    his money lending activities. He further argues that there was no evidence to
    support a conclusion that in the past ten years he had engaged in illegal
    activity which generated proceeds of crime.

[179]

We would not
    give effect to these submissions. The trial judge carefully reviewed the
    evidence and made a factual finding that the appellant was the head of a
    criminal organization involved in the trafficking of drugs. He further found
    that the income of the appellant from sources unrelated to the designated
    offences could not reasonably account for his property. There was no error in
    those factual findings, or in the legal conclusion that the requirements of s.
    462.37(2.01) had been satisfied. The onus was, therefore, on the appellant to
    establish that the property was not the proceeds of crime. Even accepting the
    submission that there was some legitimate income from the loan business, the
    appellant never testified and provided very little by way of documentation
    related to this business activity. In our view, the appellant did not met his
    onus under s. 462.37(2.03).

[180]

The alternative
    argument advanced by the appellant is that the trial judge erred in failing to
    take into account that a full forfeiture order in all the circumstances,
    particularly in light of the period of imprisonment that was imposed was
    disproportionate such that a partial order should be made instead.

[181]

This argument
    impermissibly conflates a forfeiture order with punishment for the offences
    committed. In fact, they are two distinct concepts. The imposition of a fine in
    lieu of forfeiture is not punishment imposed upon an offender. It is also not
    part of the global sentence imposed upon an offender and accordingly it is not
    to be consolidated with sentencing on a totality approach:
R. v.
    Angelis,
2016 ONCA 675, 133 O.R. (3d) 575,

at paras. 50-53, leave
    to appeal refused, [2016] S.C.C.A. No. 484.

[182]

Contrary to the
    submission of the appellant, it would have been an error in law for the trial
    judge to rely upon the sufficiency of the carceral component of the sentence to
    justify a refusal to order forfeiture:
Angelis
, at para 53;
R. v.

Dwyer
, 2013 ONCA 34, 296 C.C.C. (3d) 193, at para. 18; and
R.
    v. Lavigne
, 2006 SCC 10, [2006] 1 S.C.R. 392, at paras. 25-26.

DISPOSITION

[183]

For the
    foregoing reasons, we would allow the conviction appeal in relation to the
    convictions for entering into agreements to receive interest at a criminal
    rate.  The conviction appeal is otherwise dismissed.

[184]

We would grant
    leave to appeal sentence, and would allow the sentence appeal as follows:

i.        the
    appellants sentence is reduced from 19 to 15 ½ years, less credit for
    pre-sentence custody and restrictive bail conditions in the amount of 9 months,
    resulting in a sentence to be served of 14 years and 9 months;

ii.       in
    accordance with s. 743.6(1.2) of the
Criminal Code
, the appellant must
    serve one and a half years of the three-year concurrent sentences for his
    convictions under ss. 467.11, 467.12 and 467.13, before he may be released on
    full parole.

[185]

The sentence
    appeal is otherwise dismissed.

Released: DD  MAY 10 2017

Doherty J.A.

C.W. Hourigan J.A.

L.B. Roberts J.A.


