



COURT OF APPEAL FOR ONTARIO

CITATION:
    R. v. Manickam, 2021 ONCA 668

DATE: 20210929

DOCKET:
    C66892

Tulloch, Nordheimer and Jamal JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Kumaraguruparan Manickam

Appellant

Richard Litkowski, for the appellant

Jeremy D. Tatum, for the respondent

Heard: April 7, 2021 by video conference

On appeal from the conviction entered on
    October 15, 2018, by Justice Susan C. MacLean of the Ontario
    Court of Justice, and from the sentence imposed on April 29, 2019.

Tulloch J.A.:

A.

Overview

[1]

The appellant was charged with and convicted of
    two counts of fraud over $5,000 and one count of uttering forged document. He
    was sentenced to 18 months in jail, 3 years probation, and a standalone
    restitution order.

[2]

The appellant appeals his conviction and, in the
    alternative, appeals his sentence.

B.

factual background

[3]

The appellant was a small business owner. He
    owned, at various times, a gift store, a restaurant, a convenience store, a
    video store, and a grocery store.

[4]

He financed his restaurant business with private
    loans at a very high interest rate. By May 2013, he was still indebted to his
    private lenders and had accumulated substantial credit card debt. He was hoping
    to obtain loans from banks with lower interest rates.

[5]

The appellant testified that he met a man named
    Arul in January 2013. Arul introduced the appellant to a man named Ramesh. The
    appellant and Ramesh agreed to an arrangement where Ramesh would assist the
    appellant in obtaining a loan from a bank. Ramesh would get a 15 percent commission
    on any loan he obtained.

[6]

The appellant did not know Aruls or Rameshs
    last name.

[7]

Ramesh told the appellant that, in order to
    obtain a loan, he had to build up a transaction history to show the banks that
    he had an active business. He instructed the appellant to deposit cheques from
    companies, withdraw cash after the cheques were deposited, and then redeposit
    some of the money back into the account to create a transaction history.

[8]

The fraudulent scheme began with mainly two business
    accounts at Toronto Dominion Bank (TD): the Gurushoth Inc. account, which
    was used for his legitimate business, and the Twin Bird account, which was
    opened by the appellant in May 2013 to trick the bank. The appellant admitted
    that he knew Twin Bird was not a real business when the account was opened.

[9]

Between June 12 and June 18, 2013, the appellant
    deposited cheques from Ambigai Janitorial Services (a fake business) to his TD
    bank accounts. All the cheques were fraudulent. Most were cheques deposited in
    the two TD business accounts, but some were deposited to his personal account
    and to pay the balance on his credit cards. His TD accounts were blocked on
    June 17, 2013 and frozen after June 20, 2013.

[10]

In April 2013, the appellant opened two Royal
    Bank of Canada (RBC) business accounts for Twin Bird and two personal accounts.
    The appellant repeated the TD scheme with his RBC business accounts. Between
    September 19, 2013 and September 23, 2013, the appellant deposited 18 cheques
    in his RBC business accounts, all of which were fraudulent.

[11]

The appellant also made tens of thousands of
    dollars worth of purchases at Costco using his TD and RBC accounts and made
    thousands of dollars of withdrawals at a racetrack and casino.

[12]

As a result of this scheme, there was a combined
    loss to both banks of over $250,000.

C.

Reasons for Conviction

[13]

The main issue at trial was whether the
    appellant had the
mens rea
for the offences. He did not dispute that
    he opened fake business accounts and deposited counterfeit cheques. The core of
    his defence was that he trusted Ramesh and had no questions about the scheme
    until he was contacted by the police. He was the dupe of an unscrupulous
    fraudster who took advantage of him. He did what he was told to do by Ramesh
    and did not suspect that anything was amiss.

[14]

The Crown argued that this defence was not
    credible. The appellants involvement went beyond simply depositing cheques and
    included activity that would seem suspicious to anyone. It defied belief that
    the appellant did not appreciate the suspicious nature of the scheme. Instead,
    he feigned ignorance in an attempt to evade criminal liability. At a minimum,
    even if the appellants evidence is accepted, he was wilfully blind.

[15]

The trial judge did not believe the appellant,
    nor was she left with a reasonable doubt by his evidence. She found that the
actus
    reus
for fraud was met: the opening of the Twin Bird accounts was a dishonest
    act and the depositing of cheques for an illegitimate business created a risk
    of deprivation for the banks which materialized.

[16]

The trial judge also found that the appellant
    was, at the very least, wilfully blind to the fraud. There were numerous instances
    during the months-long scheme that raised the appellants suspicion. These
    instances included:

1.)

He was given several large cheques. His evidence
    was that he never questioned where the money came from and assumed it was
    legitimate, even though they came from a man whose last name and address he did
    not know;

2.)

He drove to several branches around Oshawa and
    Scarborough to deposit cheques in the same day;

3.)

He was using some of the money from Ramesh to
    pay off his credit card debt;

4.)

He bought lottery tickets at the casino,
    purportedly to show the bank that his businesses were legitimate;

5.)

His TD Bank accounts were blocked and later
    frozen, including an account associated with his legitimate business. He
    immediately stopped using the accounts; and

6.)

He continued the same behaviour with his RBC accounts,
    even though his TD accounts were already frozen.

D.

Analysis

[17]

The appellant appeals his conviction on the
    following grounds:

1.)

The trial judge erred in her analysis of wilful blindness, and did
    not provide any legal analysis of the appellants liability as a party under s.
    21(1)(b) or (c) of the
Criminal Code
;

2.)

The trial judge erred in her approach to
    assessing the appellants credibility and reliability; and

3.)

The trial judge erred by failing to explain how
    she used the similar fact evidence in her analysis.

[18]

The appellant also seeks leave to appeal his
    sentence, on the basis that the sentencing judge erred by failing to apply the
    principle of restraint, thereby imposing a sentence that was harsh and
    excessive in the circumstances.

(1)

The Trial Judges Analysis of Wilful Blindness

[19]

The appellant submits that the trial judge erred
    in finding that the appellant was, at the very least, wilfully blind to the
    fraudulent scheme and argues that the evidence only supported a finding of recklessness.
    He states that his evidence was clear that he had no idea anything illegal was
    happening and that, when he first learned of it, he cut ties with Ramesh.

[20]

In addition, he submits that the trial judge
    found him to be a party to the offence under s. 21 of the
Criminal Code
,
    even though she never conducted an analysis under s. 21. Recklessness, he
    argues, cannot ground party liability.

[21]

Wilful blindness is a substitute for knowledge
    where knowledge is a component of the
mens rea
:
R. v. Briscoe
,
    2010 SCC 13, [2010] 1 S.C.R. 411, at para. 21. Wilful blindness imputes
    knowledge to an accused whose suspicion is aroused to the point where he or she
    sees the need for further inquiries, but
deliberately
    chooses

not to make those inquiries:
Briscoe
, at para.
    21 (emphasis in original). It is a state of deliberate ignorance.

[22]

In my view, there is no basis to interfere with
    the trial judges finding that the appellant was wilfully blind. His testimony
    that he had no suspicions about the legality of Rameshs scheme was wholly
    rejected by the trial judge. This finding was well supported by the record.

[23]

For example, the appellant was asked whether he
    thought it unusual that he deposited cheques at multiple banks on the same day:

Appellant: [Ramesh] told me thats the way to
    do it and it is good. That is why I followed him.

Q: Im sure he told you that, but didnt you
    think that was a little bit unusual?

A:
I thought its a bit
    unusual
, but when he told me this is the way you do it, then I followed
    him.

Q: So, you didnt ask any more questions?

A: No.

[Emphasis added.]

[24]

Additionally, in June 2013, the appellants TD
    bank accounts were blocked. When he asked Ramesh about it, he was told that it did
    not matter. The appellant stopped using his accounts but did not call the bank
    because he thought Ramesh was handling that. The trial judge concluded that
    he remained in a state of deliberate ignorance by not making inquiries after
    his TD bank accounts were blocked.

[25]

These are just a few examples of instances where
    the trial judge concluded that the appellants suspicions were raised. She
    found that the appellant had a handy excuse in the form of Rameshwhose
    whereabouts and identity is a complete mystery to all, that he insulated
    himself with a wall of deliberate ignorance, and that he had a readymade
    mantra for court.

[26]

The trial judge ultimately concluded that the
    appellant was wilfully blind:

I agree with the Crowns submissions that the
    very fact that Ramesh was giving Mr. Manickam reassurances, about the different
    aspects of the scheme, shows his suspicions were, in fact, raised and in
    between the TD scheme and the RBC scheme, Mr. Manickam had two months to
    make inquiries about the TD account and even though he was unable to pay his
    loans or pay his bills, and was not receiving any more statements from the
    bank, he did nothing to make any inquiries.

[27]

There is no palpable and overriding error in the
    trial judges factual findings that 1) the appellant had suspicions about the
    scheme, and 2) he did not make any inquiries beyond Ramesh. These findings,
    which were made after an extensive review of the evidence, support the
    conclusion that the appellant was wilfully blind.

[28]

Although the trial judge referred to the
    appellant as being a party to the fraud, she also concluded that all of the
    elements of fraud had been met respecting the appellant. While her language was
    confusing, I think it is clear from her reasons as a whole that she ultimately
    concluded that he actually committed the offences and not that he aided or
    abetted someone in committing the offences. I would also note that s. 21(1)(a)
    of the
Code
defines party as including a person who actually commits
    the offence.

(2)

The Trial Judges Assessment of Credibility and
    Reliability

[29]

The appellant argues that the trial judge
    rejected the appellants testimony because it did not match what she would have
    done in the circumstances. He argues that she did this because she commented,
    in multiple instances, that no reasonable person would have done what the
    appellant had done. For example, she stated that a reasonable person would
    contact their bank once they learned that their accounts had been blocked.

[30]

There is no basis to interfere with the trial
    judges assessment of the appellants credibility. Her ultimate conclusion was
    that the appellants testimony was not believable and that she was not left in
    reasonable doubt by it:
R. v. W.(D.)
, [1991] 1 S.C.R. 742. This
    finding was supported by numerous references to the appellants testimony and
    the record as a whole. Her conclusion that a reasonable person would have had
    suspicions was only one factor in concluding that he was not credible on this
    issue.

[31]

The trial judges use of the term reasonable
    person at multiple points in her reasons when evaluating the appellants
    credibility was unfortunate. The language of reasonable person should be
    avoided when determining whether someone was wilfully blind, as it suggests an
    objective fault standard. Wilful blindness and criminal negligence are distinct
    concepts:
Briscoe
, at para. 24.

[32]

Read fairly, however, the trial judges reasons
    show that she did not err. She simply did not find the appellants denials
    credible. The appellant had numerous good reasons to be suspicious, and it was
    simply not plausible that he did not have any suspicions at all. In referencing
    what a reasonable person would have thought, she was, in effect, concluding
    that his testimony was not in harmony with the way things can and do happen
    and was highly implausible: see e.g.,
R. v. Kiss
, 2018 ONCA 184,
    at paras. 28-34;
Faryna v. Chorny
, [1952] 2 D.L.R. 354 (B.C.C.A.).

(3)

The Trial Judges Use of Similar Fact Evidence

[33]

Mid-trial, the Crown made a similar fact
    application in relation to the TD and RBC allegations, to permit the facts to
    be used across counts. The Crown submitted that the similar fact evidence was
    probative in four ways:

1.)

The totality of the conduct demonstrates fraudulent intent;

2.)

The use of the business account in the name of
    Twin Bird Construction with TD bank and the subsequent use of an account with
    the same business name at RBC shows fraudulent intent;

3.)

The issue of the identity of the person making
    the transactions; and

4.)

The conduct after posting the cheques in the TD allegations
    demonstrate a clear wilful blindness as to the nature of the cheques.

[34]

The defence conceded that the application should
    be granted, and the trial judge accepted the concession and allowed the
    application. She did not include any analysis on what use, if any, she made of
    the similar fact evidence.

[35]

On appeal, the appellant argues that the trial
    judge erred because her reasons fail to explain how she used the similar fact
    evidence. He argues that the lack of discussion does not allow him to
    understand the ways in which his guilt was decided. He says that this error can
    only be remedied with a new trial. He does not argue that the evidence was not
    admissible as similar fact evidence.

[36]

I disagree. The trial judges reasons were
    extensive. They spanned almost 100 pages in the court transcript. The judgment
    canvassed the evidence in detail and clearly laid out the basis for conviction.
    Read as a whole, the reasons communicate that she disbelieved the appellants
    testimony, that she was not left in a reasonable doubt by it, and that the
    Crown had met its onus to prove that the appellant committed the
actus reus
and
mens rea
for the charged offences.

[37]

The primary issue at trial was whether the
mens
    rea
was proven. The trial judge gave detailed reasons for why she did not
    believe that the appellant was not suspicious of the fraudulent scheme he
    participated in.

[38]

A trial judge does not need to discuss every
    piece of evidence in their reasons. There was ample evidence in the record and
    in her reasons that supported the conviction, even without considering the
    similar fact evidence. It was not an error that the trial judge did not refer
    to other evidence that also could have supported a finding of guilt.

(4)

The Appropriateness of the Sentence Imposed

[39]

The appellant also seeks leave to appeal his
    sentence, and if leave is granted, he appeals the sentence on the basis that
    the trial judge erred in failing to apply the principle of restraint, and as a
    result, imposed an excessive and harsh sentence.

[40]

For this court to intervene with the sentence
    imposed, the appellant must establish that the sentence is demonstrably unfit,
    or that the sentencing judge made an error in principle that had an impact on
    the sentence. For the appellant to establish that the sentencing judge
    committed an error in principle, he must either show that the sentencing judge
    committed an error in law, failed to consider a relevant factor, or erroneously
    took into consideration an aggravating or mitigating factor:
R. v. Friesen
,
    2020 SCC 9, 444 D.L.R. (4th) 1;
R. v. Lacasse
, 2015 SCC 64, [2015] 3
    S.C.R. 1089.

[41]

At the sentencing hearing, the Crown sought a
    sentence of 30 months of incarceration to be served in the penitentiary, while
    the defence submitted that a sentence of 9 months of incarceration was
    appropriate. After considering the submissions of the parties, the sentencing
    judge imposed a sentence of 18 months of incarceration followed by 3 years of
    probation and a stand-alone restitution order.

[42]

The appellant argues that the sentencing judge
    failed to give effect to the principle of restraint, as the appellant was a
    first-time offender and had never been sentenced to any period of incarceration
    before. In my view, a fair reading of the sentencing judges reasons for
    sentence indicates otherwise.

[43]

The sentencing judge specifically referred to
    the fact the appellant was a first-time offender and that while the offence
    calls for a penitentiary sentence, she would not impose such a sentence. In the
    reasons, the sentencing judge stated:

This gentleman comes to me as a first
    offender. That is one of the most significant reasons why Im not putting you
    in the penitentiary today, sir, because we try to avoid putting first offenders
    in the penitentiary. We try to avoid jail, at all, but the extent of his fraud,
    and the aggravating factors, in my view, require there be a significant jail
    sentence.

[44]

I see no error in the sentencing judges
    reasoning and weighing of the factors under s. 718.2(e) of the
Criminal
    Code
. It is clear from the reasons for sentence that the trial judge
    considered all sanctions other than incarceration and found that due to the
    seriousness of the fraud and the significant loss that resulted, incarceration
    was necessary to adequately address the principles of deterrence and
    denunciation. She specifically turned her mind to the principle of restraint
    and reminded herself of her obligation on sentencing to impose the shortest
    available sentence that is proportionate to the gravity of the offence and
    degree of responsibility of the offender.

[45]

The sentencing judge also considered reference
    letters from the appellants family and friends, as well as the impact that
    incarceration would have on his family, his existing business, and more
    specifically, his wife and 20-year-old son.

[46]

The appellants offence was serious and
    premediated. His moral blameworthiness was high. He committed a premediated
    fraud purely for his personal gain, and this fraud resulted in a combined loss
    of over $250,000 to two banks. In the circumstances, the decision of the sentencing
    judge is owed a high degree of deference.

E.

Disposition

[47]

For the foregoing reasons, the appeal from
    conviction is dismissed. Leave to appeal the sentence is granted, but the
    sentence appeal is denied.

Released: September 29, 2021 M.T.

M.
    Tulloch J.A.

I
    agree. I.V.B. Nordheimer J.A.

I
    agree. M. Jamal J.A.


