



COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Dieckmann, 2017 ONCA 575

DATE: 20170705

DOCKET: C58048, C57986, C57992

Doherty, Rouleau and Pepall JJ.A.

BETWEEN

Her Majesty the Queen

Respondent (Applicant/Appellant on Crown Appeal from Sentence)

and

Deborah Dieckmann and George Salmon

Appellants (Respondents on Crown Appeal from Sentence)

Anil K. Kapoor and Sarah Harland Logan, for the
    appellant Dieckmann

R. Craig Bottomley and Mayleah Quenneville, for the
    appellant Salmon

Marie Comiskey and Xenia Proestos, for the respondent

Heard: June 15, 2017

On appeal from the order of Justice Robert D. Reilly of
    the Superior Court of Justice, dated March 26, 2012, with reasons reported at
    2012 ONSC 1813, dismissing the application for a stay of proceedings, and an
    appeal from the conviction entered on July 24, 2013 by Justice Deena F. Baltman
    of the Superior Court of Justice, sitting with a jury, and from the sentences
    imposed on December 3, 2013, with reasons reported at 2014 ONSC 717, and a
    further appeal by the Crown from the sentence imposed on the appellant,
    Dieckmann, with reasons reported at 2014 ONSC 717.

By the Court:


I



[1]

The appellants were tried together by a court composed of a judge and
    jury.  The appellant, Deborah Dieckmann, faced seven charges of fraud over
    $5,000.  The appellant, George Salmon, faced one charge of fraud over $5,000.  After
    a four-month trial, the jury convicted on all counts.

[2]

The trial judge sentenced Ms. Dieckmann to four years in the
    penitentiary, and imposed a fine of $1,285,930 in lieu of forfeiture.  In
    default of payment of the fine, Ms. Dieckmann received an additional five years
    in jail.  The trial judge sentenced Mr. Salmon to two years, less one day in
    jail, and imposed a fine of $397,758.65 in lieu of forfeiture.  In default of
    payment, Mr. Salmon received three years consecutive.

[3]

Both appellants appeal their convictions on several grounds.  They also seek
    leave to appeal their sentences.  Ms. Dieckmann seeks a reduction in her
    custodial term.  Ms. Dieckmann also argues that the trial judge should not have
    imposed a fine in lieu of forfeiture.  Mr. Salmon submits that the trial judge
    erred in not imposing a conditional sentence of two years, less one day.  He
    does not take issue with the fine in lieu of forfeiture order made against
    him.

[4]

The Crown resists the appellants appeals.  The Crown also seeks leave
    to appeal one aspect of Ms. Dieckmanns sentence.  The Crown contends that the
    trial judge properly determined that a fine in lieu of forfeiture should be
    imposed, but that the trial judge erred in determining the amount of that
    fine.  The Crown argues that the amount of the fine should have reflected the
    total amount that would have been forfeited had the property been available for
    forfeiture.  On the Crowns argument, the fine should have been $5,143,723.02.

[5]

At the end of oral argument, the court advised counsel of the following:

·

the
    conviction appeals would be dismissed;

·

the
    court would not interfere with the jail terms imposed by the trial judge;

·

the
    court would reserve judgment on the arguments concerning the appropriateness of
    the order against Ms. Dieckmann imposing a fine in lieu of forfeiture, and the
    amount of the fine.

[6]

These reasons address all aspects of the appeals.


II



[7]

The Crown alleged that between 2002 and 2006, the appellants and other
    named conspirators operated a scheme to divert millions of dollars from the
    Canadian Revenue Agency (the CRA) to their personal use.  The Crown alleged
    that companies controlled by the appellants and other co-conspirators
    contracted with various legitimate companies to provide payroll-related
    services, including the remitting of various source deductions, such as income
    tax and Canada Pension Plan contributions, to the CRA.  Instead of remitting
    the funds to the CRA, the conspirators directed the funds, through a series of
    corporate shells and bank accounts, to their own personal use.  The amount of
    the fraud totalled $5.7 million.

[8]

On the Crowns theory, a man named Tom Davis masterminded the fraud.  He
    died before trial as did Caroline Hartman, who was also integral to the fraud
    on the Crowns theory.  Ms. Hartman was Ms. Dieckmanns sister.

[9]

The Crown alleged that Ms. Dieckmann played a crucial role in the
    fraud.  She was active in arranging for and paying the nominee directors who
    purported to act on behalf of the various shell companies used in the scheme.  Ms.
    Dieckmann also created many of the false documents essential to the operation
    of the scheme.  Furthermore, as the bookkeeper, Ms. Dieckmann controlled the
    various bank accounts through which the proceeds of the fraud flowed.  On the
    Crowns theory, the fraud could not have operated without Ms. Dieckmann.

[10]

Ms. Dieckmann testified and denied any knowledge of the fraudulent
    nature of the scheme.  She insisted she had no knowledge that the source
    deductions were not being paid to the CRA.  On Ms. Dieckmanns evidence, she
    simply performed bookkeeping functions for various entities.  She followed Mr.
    Daviss instructions.

[11]

The Crown alleged that Mr. Salmon, who was Ms. Dieckmanns father,
    became involved in the fraudulent scheme as a result of the financial
    difficulties he had with his tool and die business.  The Crown contended that
    Mr. Salmon ultimately used his business as one of the vehicles through which
    Ms. Dieckmann and others diverted source deductions that should have been remitted
    to the CRA.  The Crown alleged that Mr. Salmon used various corporations and
    nominee directors to disguise this misappropriation.  The Crown relied, in
    part, on a lengthy statement Mr. Salmon made to the investigators.  The Crown
    argued that parts of that statement contained significant admissions by Mr.
    Salmon.

[12]

Mr. Salmon did not testify.  His defence as advanced through counsel
    amounted to the claim that Mr. Salmon, like many other business owners who
    hired Mr. Davis and his companies, relied on Mr. Davis.  According to the
    defence, Mr. Salmon had solicited Mr. Daviss assistance to try and salvage his
    business.  He had no idea that Mr. Davis was engaged in a fraud on the CRA.  In
    short, Mr. Davis duped Mr. Salmon along with many others.


III



the conviction appeals

[13]

Ms. Dieckmann challenges two pretrial rulings, one holding that the
    appellants right to trial within a reasonable time had not been violated, and
    the other holding that the defence could not rely on
issue estoppel
to
    preclude the Crown from leading certain evidence.  Ms. Dieckmann also alleges
    one evidentiary error and several errors in the trial judges instructions to
    the jury.

[14]

Mr. Salmon advances several arguments, all of which are directed at the
    instructions to the jury.  He also adopts the submissions of Ms. Dieckmann, to
    the extent that they are applicable to the case brought against Mr. Salmon.

A.

Ms. Dieckmanns Grounds of Appeal

(i)

The section 11(b) claim

[15]


We turn first to the 11(b) issue. The 11(b) application was heard by
    Reilly J. on January 5 and 6 and February 3, 2012, after the mistrial before
    Corbett J. and shortly after the dates for the new trial were fixed. The
    appellant submits that the application judge ought to have allowed her
    application and stayed the charges. Specifically, she advances two grounds.
    First, she argues that the length of the delay, 85 months, was simply too long.
    Second, she submits that the application judge erred in concluding that the
    Crown had met its disclosure obligations in a timely fashion despite its
    failure to provide the defence, at the time disclosure was made, with
    appropriate software to search the voluminous productions made in electronic
    format.

[16]

We disagree.

[17]

This case was completed well before
R.
    v. Jordan
, 2016 SCC 27, [2016] 1 S.C.R. 631,
was decided.
    The application judge did not, therefore, carry out the analysis that is now
    required pursuant to
Jordan
. The Crown
    maintains that, even under the
Jordan
analysis,
    the 85 months of delay, of which 23 are said to be defence delay, would be
    justified because of discrete events, including a mistrial, and the complexity
    of the case.

[18]

Under the
Jordan
framework, it is clear that the delay significantly exceeds the
Jordan
presumptive ceiling, even after accounting for defence delay and
    discrete events. The remaining delay is in the order of 50 months.  The issue
    under
Jordan
would be whether the complexity
    of the case justifies the excess over the presumptive ceiling.

[19]

As explained in
Jordan
, this determination falls well within the expertise of a trial
    judge. The difficulty in this case, however, is that because this is a pre-
Jordan
case, the application judge did not carry out the
    analysis contemplated in
Jordan
,
other than
    noting the complexity of the case. Given our conclusion that the delay can be
    justified under the transitional provisions in
Jordan
due to reliance on pre-
Jordan
law, we have assumed, without deciding, that the delay is not justified by the
    complexity of the case.

[20]

We therefore move directly to consider transitional
    exceptional circumstances under
Jordan
.

[21]

This court explained a transitional exceptional
    circumstance in
R. v. Manasseri
, 2016 ONCA 703,
344 C.C.C. (3d)
    281,
at paras. 319-320:

[319] To invoke this
    transitional exceptional circumstance, the Crown must establish that the time
    the case has taken is justified on the basis of the parties reasonable
    reliance on the previous state of the law.

[320] To determine
    whether a transitional exceptional circumstance will prevail, a court must
    undertake a contextual assessment of all the circumstances, sensitive to the
    manner in which the previous framework was applied and the fact that the
    parties behaviour cannot be judged strictly, against the standard of which
    they had no notice. Prejudice and seriousness of the offence, often decisive
    factors under the former calculus, can inform whether the parties reliance on
    the former law was reasonable. Delay above the presumptive ceiling in a
    jurisdiction with significant institutional delay problems may also be
    important. [Citations omitted.]

[22]

The application judges dismissal of the 11(b) application is explained
    in a 31 page decision. Applying
R. v. Morin
, [1992] 1 S.C.R. 771, he
    carefully reviewed each step in the proceeding, from the laying of the charges
    to the anticipated end of the trial. In the course of this analysis, he
    considered the reason for each of the delays incurred.

[23]

The application judge explained that this was a complex case involving,
    at the outset, six co-accuseds, problems involving unrepresented accuseds,
    extensive productions including 100 bankers boxes of documents, more than a
    dozen judicial pre-trials in the Ontario Court of Justice, a preliminary
    inquiry that spanned almost five months, a further 15 judicial pre-trials in
    Superior Court and culminating in an anticipated three months of pre-trial
    motions and three months of trial. To this is added extensive defence delay to
    accommodate defence counsels schedule and further delay arising as a result of
    an unfortunate mistrial.

[24]

The application judge went on to note that the delays had no impact on
    the appellants right to liberty. She has not been subject to pre-trial custody
    or any bail conditions. There is also little indication in the materials that
    the appellant was seeking to move expeditiously to trial. In fact, she sought
    and obtained an extensive delay after the mistrial in order to accommodate her
    counsels availability.

[25]

Other than the application judges approach to the Crowns delay in
    providing software to facilitate electronic search of the 21 CDs of disclosure,
    the appellant has not pointed to any alleged error in the application judges
    analysis. As a result, we agree with the application judges conclusion, set
    out in his reasons as follows:

These are serious charges. They involve seven counts of fraud
    on Her Majesty in Right of Canada (and therefore the people of Canada) of
    several million dollars. While this case has involved a considerable delay in
    bringing it to trial, the societal interest in determining this case on its
    merits outweighs any possible prejudice to Ms. Dieckmann. I conclude that there
    has been in effect no institutional delay, that the delay attributable to the
    Crown in initially getting its act in order is but a very few month[s]. The
    remaining delay is either neutral or may be attributable to the inherent time
    requirements of the case in preparing by the defence and the prosecution for
    the preliminary inquiry and the first trial. Therefore, I conclude there has
    been no unreasonable delay and the application must be dismissed.

[26]

We turn now to the appellants second ground. The appellant submits that
    the Crowns disclosure obligations involve more than simply providing the
    defence with 21 CDs of electronic discovery. The Crown must also provide the
    defence with the ability to search the voluminous electronic productions. The
    application judge agreed that in the circumstances of this case, there was an
    obligation on the Crown to assist.

[27]

The application judge acknowledged that the initial Supertext CD View
    software and training provided to the defence by the Crown was not effective to
    search the electronic productions. He noted that after the Crown was advised of
    the difficulty, the Supertext Research software and training was provided.
    That technology was satisfactory. The application judge went on to find that
    the Crown did not act in bad faith or wilfully in initially providing inferior
    software to the defence. This factual finding is entitled to deference on
    appeal.

[28]

Although it is safe to assume that some delay was incurred because the
    superior software was not initially provided to the appellant, nothing in the
    record points to any specific part of the delay having been the result. The
    appellant has not satisfied us that the application judges factual finding
    that no significant delay was caused by the software issue is wrong or
    unreasonable.

[29]

This dispute as to whether the Crown ought to have provided the defence
    with the Supertext Research software sooner, and who is responsible for any
    delay caused, is the very type of problem
Jordan
and
R. v. Cody
,
    2017 SCC 31, seek to remedy. Had the defence promptly notified the Crown of its
    problems accessing the electronic productions, and had the Crown given a timely
    response, this issue could have been resolved in short order: see
Cody
,
    at para. 60. Where the parties are unable to resolve the issue, the courts
    involvement is to be sought to avoid the proceeding being derailed.

[30]

For these reasons, we are not persuaded that the application judge erred
    in finding the delay justified under pre-
Jordan
law. In all the
    circumstances, we are satisfied that the delay in this case is justified based
    on the parties reasonable reliance on the law as it previously existed.

(ii)

Issue estoppel

[31]

Ms. Dieckmann sought a stay of the criminal proceedings on the basis
    that a civil consent judgment resolved in her favour the same issue raised in
    the criminal proceeding.  She asserted that
issue estoppel
applied and
    a stay of the criminal proceeding should be granted.

[32]

The trial judge described the applicable test for
issue estoppel
:

1) the same question
    was decided in the prior proceeding;

2) the judicial
    decision said to create the estoppel is final; and

3) the parties to the
    prior decision are the same persons as the parties to the proceedings in which
    the estoppel is raised.

She noted that if the preconditions were established,
    a court still had to determine whether, as a matter of discretion,
issue
    estoppel
ought to be applied.

[33]

The trial judge dismissed the application on the basis that the consent
    judgment was not a decision on the merits and it was unclear that the issues in
    the two proceedings were the same.

[34]

Ms. Dieckmann argues that the trial judge erred in finding that the test
    for
issue estoppel
was not met.

[35]

Contrary to the trial judges conclusion, a consent judgment may be the
    basis for
issue estoppel
:
Hardy Lumber Co. v. Pickerel River
    Improvement Co.
(1898), 29 S.C.R. 211; and
Re Ontario Sugar Co.
(1911), 24 O.L.R. 332 (C.A.), leave to appeal to S.C.C. refused (1911), 44
    S.C.R. 659.

[36]

Nonetheless, we agree with the result reached by the trial judge. The
    same question was not decided in the two proceedings.  In the civil proceeding,
    the matter in issue was the appellants obligation under the
Income Tax Act
to remit funds to the CRA.  In the criminal proceeding, the matter in issue was
    the appellants misappropriation of the remittances owing to the government.

[37]

Accordingly, we would not give effect to this ground of appeal advanced
    by Ms. Dieckmann.

(iii)

Did the manner in which the trial judge reviewed the evidence of
    the witnesses constitute misdirection, resulting in reversible error?

[38]

The trial judge chose to summarize the evidence by providing the jury
    with a detailed witness-by-witness written summary of the testimony.  The
    summaries were long but accurate.  The trial judge read the summaries to the
    jury.  She also made references to the evidence when explaining specific rules
    (e.g. the co-conspirators exception), and when outlining, in some detail, the
    parties positions.

[39]

The trial judge did not, in a separate part of her instruction, relate parts
    of the evidence to the elements of the offence of fraud.  Specifically, she did
    not connect the relevant parts of the evidence to the existence of the
    fraudulent scheme alleged, or the appellants knowledge of the fraudulent
    nature of the scheme.

[40]

In the pretrial discussions, the defence objected to the proposed
    summaries of the evidence.  The objection, however, focused on the extent to
    which the summaries seemed to refer to evidence that favoured the Crown.  The
    Crown responded that the summaries simply reflected the imbalance in the
    evidence heard by the jury.

[41]

Trial judges are obliged in almost every criminal case to review the
    significant parts of the evidence for the jury and to relate the evidence to
    the issues raised in the case.  Trial judges have a broad discretion as to how
    best to perform those functions.  However, lengthy witness-by-witness detailed summaries
    of the evidence are often not helpful for the jury.  Courts have also cautioned
    against giving juries a judges written summary of the evidence.  The concern
    is that by providing a written summary, the trial judge may subconsciously cause
    the jury to refrain from its own vigorous assessment of the evidence.

[42]

Ultimately, however, the appellate task is not to grade the performance
    of the trial judge.  The issue is whether the appellant can demonstrate
    reversible error on account of the manner in which the trial judge chose to review
    the evidence.

[43]

A review which is misleading or factually inaccurate may result in
    reversible error.  The procedure used by the trial judge did not mislead the
    jury about the evidence.  The summaries were accurate.  The jury was reminded
    that it was their recollection of the evidence that mattered.  Furthermore, most
    of the evidence reviewed by the trial judge was not controversial by the end of
    the trial.  While one could criticize the trial judges summaries as unnecessary,
    and even unhelpful, they cannot be characterized as misleading.

[44]

Reversible error may occur if the trial judges review of the evidence does
    not leave the jury with a proper understanding of how the evidence relates to
    various issues in the trial.  We are not satisfied that the appellant has
    demonstrated that the jury would not appreciate the relevant issues and how
    they related to the evidence.  When the case finally got to the jury, it was
    almost exclusively about what the appellants did or did not know about Mr.
    Daviss fraudulent operations.  The appellants actions and the fraudulent
    nature of the scheme were essentially admitted.

[45]

Given the narrow focus of the trial by the end of the evidence, the
    detailed closing submissions, and the trial judges charge as a whole, we are satisfied
    that  the jury would understand what parts of the evidence were central to the
    question of whether the appellants knew the fraudulent nature of the scheme.  The
    trial judge touched on parts of the evidence when referring to various legal
    and other evidentiary issues.  She also referred to some of the evidence when
    summarizing the positions of the parties.  It is also fair to observe, as urged
    by the Crown, that the nature of most of the evidence heard by the jury made
    any explicit and comprehensive connection of the evidence to the question of
    the appellants state of knowledge far from helpful from the defence perspective.

[46]

The manner in which the trial judge chose to review the evidence with
    this jury is not a model of effective communication.  However, for the reasons
    set out above, counsel for the appellants have not satisfied us that this jury
    would not have fully appreciated the relationship between the evidence led and the
    crucial question of whether the appellants were aware of the fraudulent nature
    of the scheme in which they were involved.

(iv)

Did the trial judge err in refusing to allow Ms. Dieckmann to
    lead evidence of the consent judgment entered in the Tax Court?

[47]

Throughout the trial, the Crown led evidence of the interactions between
    CRA investigators and auditors and Ms. Dieckmann prior to the criminal
    charges.  The jury heard evidence of ongoing correspondence between Ms.
    Dieckmann and CRA auditors concerning her responsibility to remit funds
    deducted from various payrolls.  The jury heard evidence that eventually the
    tax authorities issued assessments against Ms. Dieckmann and/or companies
    controlled by her.  The Crown contended that the evidence concerning the
    interactions between Ms. Dieckmann and the CRA demonstrated ongoing efforts by
    her and her cohorts to mislead the CRA as to their role in the administration
    of the payrolls and their diversion of the deductions to accounts controlled by
    them.

[48]

In cross-examination, counsel for Ms. Dieckmann sought to adduce
    evidence that the tax-related investigation and the assessments resulting from
    that investigation were ultimately resolved by a consent judgment in Tax Court,
    indicating that Ms. Dieckmann was not responsible for the remission of the
    payroll deductions to the CRA.  The trial judge had earlier ruled that the
    consent judgment did not give rise to
issue estoppel
against the
    Crown.  For the reasons set out above (see paras. 31-37), we agree with that
    holding.  She further held that the consent judgment did not constitute
    evidence of a fact.

[49]

In our view, given the scope of the evidence called by the Crown, Ms.
    Dieckmann should have been permitted to complete the narrative by eliciting
    evidence of the outcome of the tax assessment-related proceedings.  In so
    holding, we do not accept Ms. Dieckmanns argument that the judgment
    constituted an admission by the CRA that was inconsistent with the fraud claim
    advanced.  In our view, evidence of the outcome of the tax assessment
    proceedings had value only as narrative.

[50]

The trial judges failure to allow counsel for Ms. Dieckmann to lead
    evidence of the consent judgment occasioned no substantial wrong or miscarriage
    of justice.  The evidence was not probative of anything related to the alleged
    fraud.  The trial judge expressly and correctly instructed the jury that
    evidence concerning the civil proceedings in relation to the tax assessments
    between the government and Ms. Dieckmann have nothing to do with your decision
    in this trial.  That instruction would have applied with full force to any
    evidence concerning the consent judgment.

(v)

The party liability instruction

[51]

The trial judge instructed the jury that the appellants were potentially
    liable as perpetrators or as aiders.  In her instruction on aiding, she said:

An aider may help another person commit an offence by doing
    something or failing to do something.  It is not enough that what the aider
    does or fails to do has the effect of helping the other person commit the offence.
The aider must intend to help the other person commit the offence.
Actual
    assistance is necessary.  [Emphasis added.]

[52]

The appellants submit that the trial judge failed to tell the jury that
    to be an aider, an accused had to know that the perpetrator intended to commit
    the offence.

[53]

Knowledge, as described in the appellants submissions, is a component
    of the
mens rea
requirement for aiding and abetting.  Jury charges
    should refer to that knowledge requirement.

[54]

In our view, however, the trial judges instruction that one could only
    be an aider if one intended to help the other person commit the offence
    effectively captured the knowledge requirement in the circumstances of this
    case.  On the evidence, Ms. Dieckmann could not have intended to help Mr. Davis
    commit the offence of defrauding the government without knowledge of the
    fraudulent nature of the scheme.

[55]

There was no objection to this part of the jury instruction.  The
    direction was adequate.

(vi)

The co-conspirators exception to the hearsay rule

[56]

The Crowns allegations of a scheme to defraud the CRA engaged the
    potential application of the co-conspirators exception to the hearsay rule. 
    That rule admits evidence of acts and declarations done in furtherance of a common
    criminal design by a party to that criminal design against all other parties to
    the common design.

[57]

Counsel for Ms. Dieckmann submits that the trial judge failed to
    adequately instruct the jury on the application of the second stage of the
    co-conspirators exception.  That stage requires that the jury be told that
    before acts and declarations of others done in furtherance of the common
    unlawful design can be used against a specific accused, the jury must be
    satisfied, on the balance of probabilities, based on evidence directly
    admissible against a specific accused, that he or she is probably a member of
    the common unlawful design.

[58]

The trial judge framed this part of her instruction as follows:

If you find there was in fact an agreement to defraud the Government,
    you move on to the second question, which is whether each Defendant was
    probably a participant in that agreement, based on evidence admissible only
    against her or him.

[59]

Counsel submits that the trial judges use of the phrase participant in
    that agreement would not have conveyed to the jury the requirement that Ms.
    Dieckmann know the criminal nature of the enterprise she was alleged to have
    joined.

[60]

We do not agree with this submission.  Certainly, the phrase
    participant in that agreement can bear more than one meaning.  The question
    is whether the meaning was clear in the context in which it was used. 
    Participation connotes knowing involvement.  The wording used by the trial
    judge was arrived at after extensive pre-charge discussions among the trial
    judge and counsel.  All counsel were satisfied that the phrase participant in
    that agreement would be understood by the jury as meaning knowing
    participation in the agreement.  We take the same meaning from the phrase as
    used by the trial judge.

(vii)

The alleged violation by the Crown in its closing address of the rule
    in
Browne v. Dunn

[61]

The appellants submit that the Crowns failure to cross-examine Ms.
    Dieckmann on an email exchange between her and her husband, which the Crown later
    relied on in its closing as indicative of Ms. Dieckmanns knowledge of the
    fraudulent nature of the scheme, rendered the trial unfair and occasioned a
    miscarriage of justice.  There was no objection to Crown counsels closing at
    trial.  On appeal, counsel did not make any oral argument in support of this
    submission.

[62]

In our view, Crown counsels failure to cross-examine on this specific
    email exchange did not result in any unfairness.  The defence knew full well the
    nature of the Crowns allegation and the challenge the Crown made to Ms.
    Dieckmanns evidence.  Ms. Dieckmann had a full opportunity at trial to respond
    to the Crowns allegations.  We adopt Crown counsels submission as put in the
    following language in her factum:

The thrust of the cross-examination of [Ms.] Dieckmann was to
    clearly attack her credibility when she claimed that she lacked any knowledge
    of the scheme to defraud the government of the source deductions that she had
    been entrusted to pay to the government in her position as lead accountant.  There
    was no element of surprise or lack of forewarning when the Crowns closing
    comments suggested that Ms. Dieckmanns conduct was influenced by the knowledge
    of her guilt.

B.

Mr. Salmons Grounds of Appeal

[63]

As indicated above, Mr. Salmon raises grounds of appeal not raised by
    Ms. Dieckmann, and to the extent that her arguments are applicable to him, he
    adopts those arguments.  To the extent that Mr. Salmon relies on arguments put
    forward by Ms. Dieckmann, we reject those arguments for the reasons set out in
    our consideration of Ms. Dieckmanns appeal.  We turn to the grounds of appeal
    advanced only by Mr. Salmon.

(i)

Did the trial judge err in failing to instruct the jury that Mr.
    Salmon may have been a member of an unlawful agreement other than the unlawful
    agreement alleged by the Crown?

[64]

As we understand this submission, Mr. Salmon argues that the jury should
    have been instructed to consider whether Mr. Salmon agreed only to the fraud
    relating to his own companies and not the broader fraud involving companies not
    related or associated with him.  On this argument, if Mr. Salmon was a member
    only of the more limited unlawful agreement, the co-conspirators exception
    could not make acts and declarations of others, done in furtherance of the
    broader unlawful purpose, admissible against Mr. Salmon.

[65]

The Crown charged Mr. Salmon with only a single count of fraud.  That
    count related to Mr. Salmons companies.  The Crown, however, maintained that
    Mr. Salmon was a member of the broader unlawful design.  The potential admissibility
    of acts and declarations of others to prove the substantive charge against Mr.
    Salmon was put on the basis that he was a member of that broader unlawful
    design.  If the jury was not satisfied that he was probably a member of the broader
    unlawful design, none of the evidence of acts and declarations of others could
    have been used to convict Mr. Salmon on the single substantive count against
    him.  On the instructions given, there was no risk that the jury would use acts
    and declarations of others done in furtherance of a common design against Mr.
    Salmon unless the jury was first satisfied that the Crown had proved that Mr.
    Salmon was probably a member of that same common design.  The fact that the
    common design was broader than the single charge against Mr. Salmon did not
    affect the operation of the rule, or operate unfairly against Mr. Salmon.  There
    was no objection to the instruction.

(ii)

Did the trial judge err in failing to instruct the jury that a
    finding that Mr. Salmon was probably a member of the agreement to defraud did
    not establish Mr. Salmons guilt?

[66]

The trial judge did not tell the jury that a finding that Mr. Salmon was
    probably a member of the unlawful agreement did not establish beyond a
    reasonable doubt that he had committed fraud.  She could have given this
    instruction.  The failure to give this instruction amounts to reversible error
    only if the jury could reasonably have taken from what the trial judge did tell
    them, that they could convict Mr. Salmon based on a finding that he was
    probably a member of the common unlawful design.

[67]

The trial judge correctly instructed the jury on the burden of proof. 
    In respect of the use of acts and declarations of others against Mr. Salmon,
    she said:

My final instruction in this area is that what I have been
    describing to you is merely a rule of evidence.  Just because you may use acts
    or declarations of one probable participant in the agreement against another
    does not change the rule that the Crown must ultimately prove the guilt of each
    Defendant beyond a reasonable doubt, on each charge.

[68]

The jury was clearly instructed on the ultimate burden of proof.  The
    trial judge told the jury that a finding of probable participation in the
    unlawful agreement could not be equated with a finding of guilt beyond a
    reasonable doubt on the substantive charge of fraud.

(iii)

Did the trial judge fail to adequately describe the ambit of the
    charge against Mr. Salmon?

[69]

The charge against Mr. Salmon alleged that he failed to remit source
    deductions owing in respect of employees of companies associated with George
    Salmon.  The charge went on to name several companies while expressly
    indicating that the charge included, but was not limited to, those named
    companies.

[70]

The appellant contends that absent a definition of the phrase
    associated with, the jury might find Mr. Salmon guilty based on the
    activities of companies over which he had no control, even if he had some other
    connection with, or knowledge of, those companies.

[71]

We do not accept this argument.  It was clear from the outset of the
    trial that the case against Mr. Salmon focused on the company or companies
    through which he operated his business.  The Crown put the case that way in her
    opening and in her closing.  At no time did counsel for Mr. Salmon suggest that
    the charge as framed against Mr. Salmon was in any way ambiguous, or that the
    judge should provide the jury with a definition of the phrase associated with
    in the charge.  No such instruction was necessary.

(iv)

Did the trial judge err in failing to caution the jury against
    misuse of evidence suggesting that Mr. Salmon had committed criminal or
    dishonest acts other than the fraud alleged against him?

[72]

Mr. Salmon gave a lengthy statement to the police.  In the statement, he
    made reference to various business practices which could be considered
    dishonest or at least disreputable.  Mr. Salmon submits that as this conduct
    was not part of the fraud alleged against him, the jury should have been
    cautioned against using the evidence to infer that Mr. Salmon was the kind of
    person who would commit fraud.

[73]

Mr. Salmons statement to the investigators was admitted at trial without
    any request by the defence that the statement be edited in any way.  Counsel at
    trial did not request the limiting instruction now said to have been essential
    to a fair trial.

[74]

In her charge, the trial judge cautioned the jury that evidence
    concerning other court proceedings, Mr. Salmons bankruptcy proceedings, or
    issues that Mr. Salmon may have with the Ministry of Labour were irrelevant to
    the jurys consideration.  In light of the absence of any request for any
    further instruction, we are satisfied that the instruction given adequately
    protected Mr. Salmons right to a fair trial.


IV



the sentence appeals

(a)

The jail terms

[75]

We would not interfere with the four-year sentence imposed by the trial
    judge on Ms. Dieckmann.  She played a central role in a large-scale, long-term
    fraud on the public purse.  Greed was her motivator.  The case law is clear
    that individuals like Ms. Dieckmann who choose to do what she did can expect
    significant penitentiary sentences, even in the face of strong mitigating
    factors.  Four years was an appropriate sentence.

[76]

Mr. Salmon accepts that two years, less one day was an appropriate
    sentence.  He submits, however, that the trial judge erred in failing to make
    the sentence a conditional one.

[77]

The trial judge gave careful consideration to the submission that Mr.
    Salmon should receive a conditional sentence.  She was alive to the various
    factors favouring that outcome.  She also correctly identified the need to
    impose a sentence that would both denounce Mr. Salmons serious misconduct and
    deter like-minded persons from following that same path.  In the end, the trial
    judge exercised her discretion against granting a conditional sentence.

[78]

We must defer to the trial judges exercise of her discretion on sentence
    absent an error in principle or a material misapprehension of evidence which
    had an impact on the sentence, or the imposition of a sentence which is
    manifestly excessive.  We see nothing that would justify our intervention
    here.

(b)

The fine in lieu of forfeiture order imposed on Ms. Dieckmann

[79]

The trial judge ordered a fine in lieu of forfeiture of $1,285,930
    against Ms. Dieckmann and $397,758.65 against Mr. Salmon.

[80]

The trial judge applied the three step analysis contemplated by s.
    462.37 of the
Criminal Code
, R.S.C., 1985, c. C-46.  First, she noted
    that the offenders were both convicted of a designated offence, namely fraud,
    and the monies received by them were the proceeds of the fraud. As such, she
    concluded that a forfeiture order was mandatory.

[81]

Second, forfeiture was impractical because the property could not be
    recovered.  Indeed, the parties agreed that the stolen monies had been spent,
    used or lost.

[82]

Third, she observed that the court may impose a fine in an amount
    equal to the value of the property instead of making a forfeiture order.  She
    noted that imprisonment punishes the commission of the offence whereas
    forfeiture or a fine in lieu of forfeiture deprives the offender of the
    proceeds of crime and deters other potential offenders.

[83]

The trial judge found that both Ms. Dieckmann and Mr. Salmon had
    received and profited from the stolen funds.  She imposed a fine on Ms.
    Dieckmann in the amount of $1,285,930.  This sum represented 25% of the
    $5,143,732.02 recovered from her and two of the other offenders.  The trial
    judge notionally allocated 50% of the total amount recovered to Mr. Davis, the
    driving force behind the fraud and the main beneficiary of the spoils, and
    divided the remaining 50% between Ms. Dieckmann and her sister.  Ms. Dieckmann
    had not benefitted from the entire sum of $5,143,732.02 and the Crown agreed
    that she was not the ultimate recipient of all of those funds.

[84]

The trial judge imposed a fine on Salmon in the amount of $397,758.65
    representing the amount that he had siphoned off for his own use.

[85]

Ms. Dieckmann seeks leave to appeal her sentence. She argues that she
    did not have possession or control of the stolen property and that her
    transitory technical control of the funds was insufficient to impose a fine in lieu
    of forfeiture against her.

[86]

We see no error in the trial judges finding that Ms. Dieckmann had
    possession and control of the proceeds of the fraud.  She had authority over
    the accounts into which the proceeds were paid and disbursed and as such the stolen
    funds were within her possession and control.  We therefore grant her request
    for leave but dismiss her sentence appeal.

[87]

The Crown also seeks leave to appeal Ms. Dieckmanns sentence.  It
    challenges the quantum of the fine imposed on Ms. Dieckmann and argues that the
    trial judge erred in applying traditional sentencing principles to the
    imposition of the fine against her. The Crown argues that the fact that Ms.
    Dieckmann gave property that had been in her possession to her co-conspirators
    was irrelevant.  While the Crown acknowledges that had the other offenders been
    convicted, they would not each be liable for that amount, it asserts that the
    state is not required to prove how a criminal organization divided the proceeds
    of crime or to ensure that every member is convicted before all the money can
    be recovered. It submits that the fine in lieu of forfeiture must be equal to
    the amount that would have been forfeited.  As such, the fine imposed on Ms.
    Dieckmann ought to have been $5,143,732.02.

[88]

Forfeiture concerns recovery of proceeds of crime, not culpability.   As
    noted by Deschamps J. in
R. v. Lavigne
, [2006] 1 S.C.R. 392, 2006 SCC
    10, at para. 9, a case dealing with an offenders ability to pay a fine imposed
    in lieu of forfeiture, one of the objectives of the forfeiture provisions is to
    neutralize criminal organizations by depriving them of the profits of their
    activities.  Consistent with that objective, the provisions encompass a wide
    range of property including property that was originally in the possession or
    under the control of any person:
Lavigne
, at para. 13.

[89]

Deschamps J. observed, at para. 19, that while the words used by
    Parliament allow the court no flexibility where the property can be located, it
    uses more permissive language in respect of a fine imposed instead of
    forfeiture. She explained, at para. 34, that the discretion granted under s.
    462.37(3) is limited.  It applied both to the decision of whether to impose a
    fine and to the determination of the value of the property.  At para. 29, she
    stated that the factual circumstances that may give rise to an exercise of the
    discretion may vary, and it would be unrealistic to claim to foresee all of
    them.

[90]

Here, the trial judge decided to exercise her discretion to impose a
    fine.  The question then becomes: did she have a discretion, in light of the
    totality of the circumstances before her, to determine a value that was less
    than the full amount of the funds that had been under Ms. Dieckmanns
    possession and control?

[91]

In our view, she did.

[92]

Lavigne
concerned a narrow issue, namely, whether an offenders
    ability to pay is a factor that a court may consider in deciding to impose a
    fine instead of ordering a forfeiture of property that is proceeds of crime. 
    The court determined that the discretion granted was limited and that ability
    to pay may not be taken into consideration either in the decision to impose the
    fine or in the determination of the amount of the fine.  The provisions
    relating to the proceeds of crime were enacted in an international context. 
    The provisions focus upon the proceeds of crime as opposed to the offender. 
    One of the stated goals was to neutralize criminal organizations by depriving
    them of the profits of their activities and to take away any motivation to
    pursue those activities.  In sum, the purpose was to ensure that crime does not
    pay.  Forfeiture is mandatory and no discretion is available.  More permissive
    language is used in respect to a fine imposed instead of forfeiture.

[93]

In
Lavigne
, Deschamps J. rejected the interpretation that the
    word may used in s. 462.37(3) provided the court with a broad discretion to
    adjust the amount of the fine by applying the general principles of
    sentencing.  She noted that the courts discretion was necessarily limited by
    the purpose of the order to be made.  Parliament was seeking to deter not only
    offenders but also criminal organizations.  The purpose of the fine is to
    replace the proceeds of crime.  Moreover, the objective of Part XII.2 is to
    deal with the proceeds of crime separately from, and in addition to, the
    punishment for committing a crime.  In essence, a fine deprives the offender of
    the proceeds of the crime and deters potential offenders and accomplices.

[94]

She concluded, at para. 27:

The effect of the word may cannot therefore be to grant a
    broad discretion.  The exercise of the discretion is necessarily limited by the
    objective of the provision, the nature of the order and the circumstances in
    which the order is made.

[95]

She also rejected a second possible interpretation that equated the word
    may with shall.  She observed, at para. 28:

[A] court may face circumstances in which the objectives of the
    provisions do not call for a fine to be imposed.  An example of this would be
    if the offender did not profit from the crime and if it was an isolated crime
    committed by an offender acting alone.  In such a case, none of the objectives
    would be furthered or frustrated by a decision not to impose a fine instead of
    forfeiture.  The word may allows for an exercise of discretion that is
    consistent with the spirit of the whole of the provisions in question.

[96]

Lastly, she determined that the judge has a limited discretion.  She
    expressly noted, however, that the factual circumstances that may give rise to
    an exercise of the discretion may vary and it would be unrealistic to claim to
    foresee all of them.  She therefore expressly limited her discussion to the
    single factor that was argued, namely ability to pay.

[97]

The objective of the provision must be considered in context and in
    light of the circumstances on a case by case basis.

[98]

Here, Ms. Dieckmann and her co-conspirators qualified as being
    participants in a criminal organization and as such, were indirect targets of
    the legislation.  That said, they were far removed from the international
    purpose underlying the enactment, namely pursuit of organized crime.

[99]

The Crown conceded that the evidence against the two co-conspirators who
    had died was intricately wound up with the evidence against Ms. Dieckmann and
    that they would have been convicted too had they survived.  Moreover, had they
    been alive, the Crown conceded that it would be apportioning the $5.1 million
    among the two of them and Ms. Dieckmann.  Lastly, the Crown also conceded that
    it was ridiculous to imagine that Ms. Dieckmann kept the entire $5.1 million
    and, but for their demise, the other two would have absorbed part of the $5.1
    million fine.  Moreover, there was evidence before the trial judge to make a
    finding that the two deceased co-conspirators received a sizeable portion of
    the $5.1 million.

[100]

There is no onus
    on the Crown to establish that an offender has received a benefit:
R. v.
    Piccinini
, 2015 ONCA 446; and
R. v. Siddiqi
, 2015 ONCA 374.  That
    said, if there is evidence before the court that establishes or admits of an
    allocation of benefit, it is open to the court to exercise its discretion to
    adjust the quantum of the fine.

[101]

While the trial
    judge erred in applying traditional sentencing principles, it was open to her
    to exercise her discretion as she did.  The existence of such a discretion was
    not precluded by
Lavigne
.

[102]

For these
    reasons, we grant leave to appeal sentence but dismiss the Crowns sentence
    appeal.


V



[103]

The conviction
    appeals are dismissed.  Leave to appeal sentence is granted, but the sentence
    appeals are dismissed.

Released: DD  July 5, 2017

Doherty J.A.

Paul Rouleau J.A.

S.E. Pepall J.A.


