



COURT OF APPEAL FOR ONTARIO

CITATION: Plate v. Atlas Copco Canada Inc., 2019 ONCA 196

DATE: 20190313

DOCKET: C65243

Hoy A.C.J.O., Feldman and Huscroft JJ.A.

BETWEEN

Dirk Johannes Plate

Defendant (Appellant)

and

Atlas Copco Canada Inc.

Plaintiff (Respondent)

Douglas M. Cunningham, for the appellant

James D. Patterson and Amanda C. McLachlan, for the
    respondent

Heard: November 13, 2018

On appeal from the order of Justice Sean F. Dunphy of the
    Superior Court of Justice, dated March 7, 2018, with reasons reported at 2018
    ONSC 1588.

Hoy A.C.J.O.:

A.

OVERVIEW

[1]

The appellant, Dirk Plate, appeals from the
    motion judges order granting the respondent, Atlas Copco Canada Inc., summary
    judgment in the amount of $20 million on its civil claim against the appellant
    for breach of fiduciary duty.

[2]

The appellant was employed as the General
    Manager of the respondents Construction and Mining Technique (CMT) division
    and then promoted to the position of Vice President Global Strategic Customers.
    The respondent terminated his employment in 2007, and sued him in 2008,
    claiming he was involved in a scheme that defrauded the company.

[3]

The appellant was subsequently charged
    criminally. Following a trial by jury, he was convicted of defrauding the
    respondent of more than $5,000, contrary to s. 380(1) of the
Criminal Code
,
    R.S.C. 1985, c. C-46. In the course of imposing sentence, the sentencing judge
    found that the appellants participation in the fraudulent scheme amounted to a
    gross breach of his fiduciary duty to the respondent.

[4]

Relying solely on the criminal verdict and the
    findings of the sentencing judge in his Decision on Sentencing, the respondent
    moved for summary judgment in its civil action. The motion judge determined
    that the sentencing judges findings  including the finding that the appellant
    had breached a fiduciary duty owed to the respondent  were entitled to very
    considerable weight in the civil proceeding. He concluded that the appellant
    was a fiduciary of the respondent during the currency of the scheme because the
    sentencing judge had found the appellant to be a fiduciary, and because that
    finding was supported by the appellants title, his duties and the respondents
    vulnerability to the appellant, as described in the Decision on Sentencing. The
    motion judge held that the appellant had breached his fiduciary duty through
    his participation in the fraudulent scheme. Accordingly, he granted the respondent
    judgment for $20 million. The appellant appeals that order to this court.

[5]

The key issue on appeal is whether the motion
    judge erred in granting summary judgment in sole reliance on the findings of
    the sentencing judge relative to breach of fiduciary duty. This raises three questions:
    (1) were the sentencing judges findings relative to breach of fiduciary duty
    admissible? (2) if so, did the motion judge err in giving very considerable
    weight to those findings (in particular the finding that the appellant was a
    fiduciary)? and (3) did he err in granting summary judgment based on the
    sentencing judges findings?

[6]

I would allow the appeal and remit the matter
    back to the Superior Court of Justice for trial. As I will explain, the motion
    judge properly admitted the sentencing findings into evidence. However, he erred
    in principle by failing to consider relevant factors in determining what weight
    he could give to the sentencing judges finding that the appellant was a
    fiduciary. That error infected his analysis as to whether there was a genuine
    issue requiring a trial on the breach of fiduciary duty claim.

B.

Background

(1)

Legal Proceedings

[7]

In 2008, the respondent commenced a civil action
    against the appellant and other individuals alleged to have been involved in
    defrauding the respondent through a scheme involving the submission of fake
    or inflated invoices for employee benefit payments. The respondent asserted
    claims for fraud, conspiracy, unjust enrichment and, against the appellant and
    other former employees, breach of fiduciary duty.

[8]

In 2012, the appellant was arrested and charged
    with theft, fraud and two counts of conspiracy. The indictment covered the
    period of 2001- 2007. The Crown ultimately proceeded against the appellant only
    on the fraud charge; all other charges were withdrawn.

[9]

One participant in the scheme, Leo Caron (the
    Human Resources Manager for all of the respondents divisions), pled guilty.
    Another participant in the scheme, David Hillier (the financial comptroller for
    the CMT division), was granted immunity from criminal prosecution in return for
    his testimony in both the criminal and civil proceedings.

[10]

The appellant was tried, alongside his
    co-accused, Paul Caron
[1]
(the respondents third-party broker for its insurance needs), in April 2016.
    At trial, the Crowns position was that a criminal enterprise to defraud the
    respondent through the submission of entirely fake or deliberately inflated
    invoices for employee benefit payments had been in place for a number of years,
    with the total amount overbilled exceeding $20 million. The Crown alleged
    that the appellant had participated in the scheme while he was the General
    Manager of the CMT division in Sudbury, and that he had received at least
    $1,440,000 in annuities through his participation.

[11]

The appellants position at trial was that he
    was unaware of the fraud. Although he admitted receiving $1,440,000 in
    annuities between 2003 and 2006, he argued that the annuities had been
    authorized by the respondent and that the Crown had not proven beyond a
    reasonable doubt that the annuities were purchased with the proceeds of the
    fraud.

[12]

The trial lasted approximately 10 weeks. The
    jury found both the appellant and Paul Caron guilty. Neither appealed from his
    conviction.

(2)

The Decision on
    Sentencing

[13]

In this case, the motion judge granted summary
    judgment on the breach of fiduciary duty claim in sole reliance on the factual
    findings made by the sentencing judge. Before turning to the Decision on
    Sentencing, it is helpful to briefly set out the legal context in which the
    sentencing findings were made.

[14]

Section 724 of the
Criminal Code
governs fact-finding for the purpose of sentencing. It distinguishes between
    facts essential to the jurys verdict and other relevant facts:

724

(1)
In
    determining a sentence, a court may accept as proved any information disclosed
    at the trial or at the sentencing proceedings and any facts agreed on by the
    prosecutor and the offender.

(2)
Where the court is composed of a
    judge and jury, the court

(a)
shall accept as proven all facts,
    express or implied, that are essential to the jurys verdict of guilty; and

(b)
may find any other relevant fact
    that was disclosed by evidence at the trial to be proven, or hear evidence
    presented by either party with respect to that fact.

(3)
Where
    there is a dispute with respect to any fact that is relevant to the
    determination of a sentence,

(a)
the court shall request that evidence be adduced as to the
    existence of the fact unless the court is satisfied that sufficient evidence
    was adduced at the trial;

(b)
the party wishing to rely on a relevant fact, including a fact
    contained in a presentence report, has the burden of proving it;

(c)
either party may cross-examine any witness called by the other
    party;

(d)
subject to paragraph (e), the court must be satisfied on a
    balance of probabilities of the existence of the disputed fact before relying
    on it in determining the sentence; and

(e)
the prosecutor must establish, by proof beyond a reasonable
    doubt, the existence of any aggravating fact or any previous conviction by the
    offender.

[15]

In
R. v. Ferguson
, 2008 SCC 6, [2008] 1
    S.C.R. 96, at paras. 17-18, the Supreme Court summarized the applicable
    principles where a sentencing judge must make factual findings to facilitate
    sentencing following a jury trial:

Two principles govern the sentencing judge in this endeavour.
    First, the sentencing judge "is bound by the express and implied factual
    implications of the jury's verdict". The sentencing judge "shall
    accept as proven all facts, express or implied, that are essential to the
    jury's verdict of guilty" (
Criminal Code
, s. 724(2)(
a
)),
    and must not accept as fact any evidence consistent only with a verdict
    rejected by the jury.

Second, when the factual implications of the jury's verdict are
    ambiguous, the sentencing judge should not attempt to follow the logical process
    of the jury, but should come to his or her own independent determination of the
    relevant facts. In so doing, the sentencing judge "may find any other
    relevant fact that was disclosed by evidence at the trial to be proven"
    (s. 724(2)(
b
)). To rely upon an aggravating fact or previous conviction,
    the sentencing judge must be convinced of the existence of that fact or
    conviction beyond a reasonable doubt; to rely upon any other relevant fact, the
    sentencing judge must be persuaded on a balance of probabilities: ss. 724(3)(
d
)
    and 724(3)(
e
). It follows from the purpose of the exercise that the
    sentencing judge should find only those facts necessary to permit the proper
    sentence to be imposed in the case at hand. The judge should first ask what the
    issues on sentencing are, and then find such facts as are necessary to deal
    with those issues. [Citations omitted.]

[16]

As noted below, the motion judge referred to
Ferguson
in assessing the findings made by the sentencing judge.

[17]

Turning to the Decision on Sentencing, the
    sentencing judge was satisfied that the jury relied on a number of facts in
    finding the appellant and Paul Caron guilty of fraud. Those facts, outlined at
    para. 2 of the Decision on Sentencing, included the following:

·

The respondent is a large multinational
    corporation.
[2]


·

From 1997-2005,
[3]
the appellant was the General Manager of CMT, the respondents largest division
    in Canada.

·

Beginning in the 1990s, Leo Caron and Paul Caron
    started a scheme whereby Paul Caron would overbill the respondent by
    deliberately inflating bills to the respondent or by submitting entirely fake
    invoices.

·

The employee benefit invoices were administered
    through CMT.

·

The overbilling was facilitated by at least two
    company insiders, in addition to Leo Caron: David Hillier and the appellant. Hillier
    reported to the appellant.

·

The scheme was in place throughout the period of
    the indictment (2001-2007). A forensic investigation found that there was a net
    overbilling of $22,336,335.38 in the years 2004-2007.

·

The appellant was motivated by greed, but also
    by a sense of entitlement and grievance because his pension was less generous
    than what he expected would be provided to a Canadian executive.

·

Paul Carons companies
[4]
bought 15 annuities for the
    appellant in the years 2003-2006, in the total amount of $1,440,000. Paul
    Carons companys bookkeeping ledgers reveal five other payments to the
    appellant in the years 2001 and 2003 in the total amount of $175,930.10.

·

The jury rejected the appellants defence that
    these payments were legitimate and authorized by his superiors in the
    international company hierarchy.

[18]

The sentencing judge noted that the appellant
    had admitted receiving cheques from Paul Caron totaling $77,930 (but not the
    full amount of $175,930.10). He found that it was open to the jury to conclude
    this amount more likely than not came from Paul Carons fraudulently obtained
    funds: at para. 36.

[19]

The sentencing judge made a number of additional
    factual findings, pursuant to s. 724(2)(b) of the
Criminal Code
, in
    the course of imposing sentence. The sentencing judge found that the appellant
    was highly trusted by the respondent and had grossly betrayed that trust
    through his participation in the scheme. He made those findings in the context
    of para. 32:

[The appellant] was
highly trusted
by [the respondent]. He was in charge of its Canadian CMT operations, and,
    during the currency of the scheme, was promoted to a global vice-presidency. He
grossly betrayed that trust
by
    his involvement in the scheme. He was Leo Carons direct supervisor, and in the
    best position to stop the scheme had wished to do so. He took advantage of the
    fact that Leo Caron and the employee benefits program spanned six divisions,
    which made it easier to conceal the overbilling. He and Leo Caron enticed David
    Hillier, who reported to [the appellant] as his comptroller, to join the
    scheme, and he was aware from the beginning of David Hilliers method of
    concealing the fake invoices. As with Paul Caron, his role was motivated by
    greed but as well [the appellant] felt a sense of entitlement. [Emphasis
    added.]

Elsewhere in the Decision on
    Sentencing, the sentencing judge described the appellants conduct as a gross
    breach of trust: at para. 46.

[20]

Key to this appeal is the sentencing judges
    comment that the appellants participation and passive acquiescence in the
    scheme was a gross breach of his fiduciary duty to the respondent. He made
    that comment in the context of paras. 50-51:

I am satisfied on the evidence at trial that
    [the appellant] became involved in the scheme to defraud [the respondent] early
    on in the time period covered by the indictment and remained involved until he left
    Sudbury in late 2005. Even if he did not receive funds for the whole period of
    time,
his passive acquiescence allowed the fraud
    to continue.

I am also satisfied that [the appellant] was
    not a central or integral member of the scheme.
However,
    given the position he held with the company, his involvement was a gross breach
    of his fiduciary duty to [the respondent]. It does not get much worse in the
    Canadian corporate field.
[Emphasis added.]

[21]

Ultimately, the sentencing judge sentenced the
    appellant to five years in jail. He rejected the Crowns request for a $22
    million restitution order against the appellant on a joint and several basis
    with Paul Caron and Leo Caron. Instead, the sentencing judge made a restitution
    and forfeiture order against the appellant for the current value of the
    annuities, and for the sum of $77,930 (reflecting the amount the sentencing
    judge was satisfied the appellant had received from the fraudulent scheme in
    addition to the annuities).

[22]

The appellant did not seek leave to appeal
    sentence.

(3)

The Summary Judgment
    Decision

[23]

The respondent subsequently moved for summary
    judgment against the appellant in its civil action. Among other things, the
    respondent sought a declaration that the appellant was liable to the company in
    fraud, conspiracy and breach of fiduciary duty, and an order that the appellant
    and Leo Caron were jointly and severally liable to it for $22,336,335.38.

[24]

Applying
British Columbia (Attorney General)
    v. Malik
, 2011 SCC 18, [2011] 1 S.C.R. 657, discussed later in these
    reasons, the motion judge held that, given the similarity of the issues, the
    identity of the parties, and the criminal nature of the prior proceedings, the
    findings of the sentencing judge were admissible. He also made the blanket
    finding that all the findings were entitled to very considerable weight on the
    motion for summary judgment. He concluded that a trial was not required for him
    to undertake that weighing analysis: at paras. 29-33.

[25]

The motion judge cautioned himself that this
    conclusion did not relieve him of the responsibility of determining which
    findings of fact made by the sentencing judge were necessarily implied by the
    jurys verdict or otherwise required for the purpose of sentencing, and
    therefore properly made by the sentencing judge in accordance with
Ferguson
.
    He described this as applying the 
Ferguson

filter: at para.
    34.

[26]

The motion judge directed himself that his
    determination that the findings of the sentencing judge were entitled to very
    considerable weight did not amount to a determination that they were beyond
    question. He noted that abuse of process is a flexible doctrine, and
    re-litigation of prior findings may be allowed in a subsequent proceeding where
    to preclude re-litigation would result in unfairness. However, he concluded the
    appellant had failed to place before him evidence from which he might conclude
    that there would be any unfairness worked by the application of the doctrine of
    abuse of process on the summary judgment motion: at paras. 35-38.

[27]

Consequently, the motion judge held that the
    appellant was generally precluded by the doctrine of abuse of process from
    re-litigating the sentencing judges findings, and as a result the respondent
    was entitled to judgment on its claim to the extent it could be supported by findings
    properly made by the sentencing judge in the criminal proceeding: at para. 2.
[5]

[28]

Following the discussion of abuse of process, the
    motion judge then considered which of the claims advanced against the appellant
    were supported by the Decision on Sentencing, applying the 
Ferguson
filter.

[29]

The motion judge concluded that neither the
    civil fraud claim (to the extent that it sought damages in excess of the value
    of the annuities and the $77,930 the sentencing judge found was implicit in the
    jurys verdict in relation to the appellant), nor the claim in civil conspiracy
    was made out. He dismissed those claims: at paras. 47-58. The respondent does
    not cross-appeal the dismissal of those claims.

[30]

However, the motion judge found that
Ferguson
permitted the sentencing judge to make the findings that he did relative to
    fiduciary duty, as s. 718.1 of the
Criminal Code
required the
    sentencing judge to consider the gravity of the offence and the degree of
    responsibility of the offender, and s. 718.2(a)(iii) of the
Criminal Code
entitled him to consider whether the appellant abused a position of trust: at
    para. 61. Abuse of trust is an aggravating fact.

[31]

Relying on the sentencing judges findings, the
    motion judge concluded that the appellant was a fiduciary of the respondent
    from 2002 until 2007 (when his employment was terminated). He explained why the
    appellant was a fiduciary, at para. 62:

The Decision on Sentencing made specific findings that Mr.
    Plate was a fiduciary. The finding is one amply supported by Mr. Plates
    title during the relevant time frame (General Manager of CMT and then
    vice-president) and by such description as the Decision on Sentencing contains
    regarding his duties and the vulnerability of Atlas Copco to him. Mr.
    Plate has provided me with no evidence to negative that finding.

[32]

The motion judge went on, at paras. 64-65, to
    find that the appellant had breached his fiduciary duty through his
    participation in, and passive acquiescence to, the fraudulent scheme:


The
    Decision on Sentencing found that Mr. Plate had specific knowledge of the
    existence of the fraud scheme and of how it worked. It found that he was
    in the best position to put a stop to it. It found that his passive
    acquiescence allowed the fraud to continue. However attenuated Mr. Plates
    degree of involvement in the fraud scheme may have been, the Decision on
    Sentencing found that Mr. Plate
was
involved to some degree. I
    attach no weight to Mr. Plates denial of such knowledge and conclude that the
    interest of justice do not require him to be given an opportunity at trial to
    persuade a different judge to reach a conclusion inconsistent with the one
    already reached by the Sentencing Judge after an adversarial criminal hearing.

I therefore find that Mr. Plate breached his fiduciary duty to
    his employer Atlas Copco. A fiduciary does not have the option of
    remaining mute in the presence of an identified, known scheme that is actively
    harming his employer. Still less is he entitled to accept benefits and
    payments that I have inferred were in whole or in part made in return for his
    silence. [Emphasis in original.]

[33]

In determining what damages flowed from the
    appellants breach of fiduciary duty, the motion judge found, based on the
    Decision on Sentencing, that the appellant knew of the scheme and had received
    some payments arising from it by 2003 at the latest. The motion judge therefore
    inferred that the appellants breach of fiduciary duty occurred no later than
    December 31, 2003 and continued until the appellants employment was terminated
    in November 2007: at paras. 67-69.

[34]

The motion judge held that the damages
    attributable to the appellants breach of fiduciary duty were the entirety of
    the respondents losses arising from the fraudulent scheme, which the
    respondent had failed in his duty to stop. In the Decision on Sentencing, the
    sentencing judge found the net overbilling for the period of 2004-2007 was
    $22,336,335.38. The motion judge was satisfied that this amount reflected the
minimum

of the respondents damages arising from the appellants breach of fiduciary
    duty. Against this amount, he gave the appellant credit for the amount of all
    of the annuities seized from the appellant, Hillier and Leo Caron (which was
    just under $2 million), and the $77,930 ordered repaid by the appellant by the
    criminal court: at paras. 70-73.

[35]

The motion judge thus granted judgment in the
    amount of $20 million, while ordering the respondent to account for any future
    net recoveries from the other co-defendants named in the civil action.

C.

ANALYSIS

[36]

The appellant makes a number of arguments on
    appeal:

1.

The appellant
    was not given notice that the respondent was seeking summary judgment based on
    the alleged existence and breach of his fiduciary duty and, accordingly, the
    judgment against him cannot stand.

2.

The motion judge
    erred in relying on the findings in the Decision on Sentencing relative to
    fiduciary duty to grant judgment against him for breach of fiduciary duty
    because those findings were not express or implied in the jurys verdict.

3.

Even if the
    motion judge were entitled to rely on the findings in the Decision on
    Sentencing relative to fiduciary duty, the motion judge had insufficient evidence
    regarding his duties while he was the General Manager of CMT to make the
    factually-based determination that he owed the respondent a fiduciary duty.

4.

The motion judge
    erred in applying the doctrine of abuse of process to bar him from relying on
    discovery evidence to defend the summary judgment motion.

5.

The motion judge
    erred in law by finding that passive acquiescence to a fraudulent scheme
    constituted breach of fiduciary duty.

6.

It was not open
    to the motion judge to award damages greater than the amount of the restitution
    ordered by the sentencing judge.

7.

The motion judge
    improperly relied on broad policy reasons to justify granting judgment
    against him.

[37]

In essence, the appellants core submission 
    while not expressly stated in these terms  is that the motion judge could not
    grant summary judgment for breach of fiduciary duty on the strength of the
    findings made by the sentencing judge.

[38]

As I will explain, I agree and would allow the
    appeal on this basis. Although not necessary to resolve this appeal, I will
    then address the appellants argument that the motion judge: (a) erred in
    applying the doctrine of abuse of process to bar him from relying on discovery
    evidence to defend the summary judgment motion; (b) erred by finding that
    passive acquiescence to a fraudulent scheme constituted breach of fiduciary
    duty; and (c) erred by awarding damages for breach of fiduciary duty in excess
    of the amount of restitution ordered by the sentencing judge. My hope in
    addressing these issues is to contribute to the more efficient resolution of
    the action.

(1)

Summary Judgment and
    the Decision on Sentencing

[39]

In analyzing this core issue, I address three main points: (a)
    whether the sentencing judges findings relative to breach of fiduciary duty
    were admissible; (b) if so, whether the motion judge erred in according very
    considerable weight to the sentencing judges findings (in particular the
    finding that the appellant was a fiduciary); and (c) whether the motion judge
    erred in granting summary judgment.

(a)

Admissibility of Sentencing
    Findings

[40]

One of the appellants main arguments on appeal
    is that the motion judge was not entitled to rely on the sentencing judges
    findings concerning the appellants breach of fiduciary duty on the subsequent
    summary judgment motion. In the appellants submission, the motion judge could
    rely only on those findings accepted by the sentencing judge as express or
    implied in the jurys verdict pursuant to s. 724(2)(a) of the
Criminal Code
.

[41]

Relying on
R. v.
    Punko
, 2012 SCC 39, [2012] 2 S.C.R. 396, the
    appellant argues that any further finding made by the sentencing judge under s.
    724(2)(b) is not a judicial determination on the
merits

of the
    case, but only a judicial determination
for the purpose of sentencing
:
Punko
,
at para. 11. As a result, the motion judge could not
    rely on the sentencing judges findings concerning fiduciary duty because such
    findings were (correctly) not accepted by the sentencing judge as express or
    implied in the jurys verdict.

[42]

Relying on
Malik
, which was referenced
    by the motion judge, the respondent argues that the findings in the Decision on
    Sentencing were admissible on the summary judgment motion, whether or not
    express or implied in the jurys verdict, and that the motion judge was
    entitled to grant summary judgment in sole reliance on those findings.

[43]

As I will explain, I do not agree with the
    appellants broad reading of
Punko
. On my reading of the case,
Punko
does not preclude findings made under s. 724(2)(b) from being admitted in
    evidence in the context of this civil action. I agree with the respondent that
Malik
supports the motion judges decision to admit the sentencing findings, although
    I do not agree that the motion judge was entitled to grant summary judgment. I
    turn now to
Punko
and
Malik
.

(i)


Punko

[44]

As I have noted, the focus of the appellants
    argument is para. 11 of
Punko
:

Where a fact is necessary for the purpose of determining the
    appropriate sentence but is not express or implied in the jurys verdict, the
    sentencing judge must make his or her own finding (s. 724(2)(
b
)
Cr.
    C.
). However,
such a finding does not constitute a
    judicial determination on the merits of the case; rather, it
    constitutes a judicial determination only for the purpose of sentencing.
[Emphasis
    added.]

[45]

In order to understand what the court was saying
    in para. 11, it is important to understand the context of the case.

[46]

In
Punko
,
the Supreme Court
    considered the application of the doctrine of issue estoppel in the context of
    a multi-issue criminal jury trial. A prolonged investigation of the Hells
    Angels by the RCMP identified a number of possible criminal offences. Some of
    those offences were within the jurisdiction of the provincial Crown; others
    were within the jurisdiction of the federal Crown.

[47]

The provincial offences proceeded to trial
    first. Four accused were tried on a number of offences, including offences
    allegedly committed for the benefit of, at the direction of, or in association
    with a criminal organization (i.e. the Hells Angels). The four accused were
    found guilty of a number of offences, but acquitted on all the criminal
    organization counts.

[48]

Meanwhile, federal prosecutors charged two of
    the four accused with various drug-related offences and, on some of the counts,
    it was again alleged that they had done so for the benefit of, at the direction
    of, or in association with a criminal organization (i.e. the Hells Angels). The
    two accused argued that the Crown was estopped from leading evidence that the
    Hells Angels was a criminal organization, because the issue had been decided by
    the jury in the provincial prosecution. In making this argument, the accused
    referred to certain findings made by the sentencing judge in the provincial
    proceedings.

[49]

Criminal issue estoppel is a narrow doctrine. It
    precludes the Crown from re-litigating those facts that were decided in favor
    of the accused at the earlier trial:
Punko
, at para. 7; citing
R.
    v. Mahalingan
, 2008 SCC 63, [2008] 3 S.C.R. 316, at paras. 22, 31, 33. The
    resolution of an issue in favor of the accused must be a necessary inference
    from the trial judges findings or from the fact of the acquittal:
Punko
,
    at para. 7;
Mahalingan
, at para. 52. Where the prior proceeding was
    before a jury, the finding in favor of the accused must be logically necessary
    to the jurys verdict of acquittal:
Punko
, at para. 8;
Mahalingan
,
    at para. 53.

[50]

Against this backdrop, Deschamps J. held that although
    s. 724(2)(b) of the
Criminal Code
permits a judge imposing sentence
    after a jury trial to find any other relevant fact that was disclosed by
    evidence at the trial to be proven, or hear evidence presented by either party
    with respect to the fact, such findings cannot be relied on in support of issue
    estoppel:
Punko
, at para. 19. Since the merits of the case in a jury
    trial pertain to the issues the jurors can take into consideration in reaching
    a verdict and issue estoppel applies only where the unanimity of the jury on
    an issue can be discerned through reasoning based on logical necessity, a
    finding under s. 724(2)(b) cannot ground issue estoppel:
Punko
, at
    para. 11. Deschamps J.s statement, at para. 11, that a finding made under s.
    724(2)(b) does not constitute a judicial determination
on the merits

    (emphasis in original) but rather a judicial determination only for the
    purpose of sentencing must be understood in this context.

[51]

Understanding para. 11 in context,
Punko
does not preclude the respondent from seeking to rely on findings made under s.
    724(2)(b) in the context of this civil action: a finding under s. 724(2)(b) 
    while not a finding on the merits or relating to the accuseds criminal
    liability  is still a judicial finding.

[52]

Punko
also underlines
    the point that findings made in sentencing proceedings must be understood in
    context  and, in particular, in light of the statutory scheme that governs
    such findings. That point is consistent with
Malik,
to which I now turn.

(ii)

Malik

[53]

In
Malik
, the Supreme Court followed
    the lead of this court
[6]
and put to rest the so-called rule in
Hollington v. F. Hewthorn & Co.
,
    [1943] 1 K.B. 587 (C.A.), which held that prior judicial findings or judgments
    were hearsay or opinion evidence and thus inadmissible in a subsequent judicial
    proceeding. Writing for the court, Binnie J. described, at para. 7, the general
    circumstances in which a prior judicial finding will be admissible in
    subsequent civil proceedings:

[A] judgment in a prior civil or criminal case
    is admissible (if considered relevant by the chambers judge) as evidence in
    subsequent interlocutory proceedings as proof of its findings and conclusions,
    provided the parties are the same or were themselves participants in the prior
    proceedings on similar or related issues. It will be for that judge to assess
    its weight. The prejudiced party or parties will have an opportunity to lead
    evidence to contradict it or lessen its weight (unless precluded from doing so by
    the doctrines of
res judicata
, issue estoppel
    or abuse of process).

[54]

Although
Malik
considered the
    admissibility of a prior judgment in a subsequent interlocutory proceeding, its
    reasoning is not restricted to interlocutory proceedings:
R. v. Jesse
,
    2012 SCC 21, [2012] 1 S.C.R. 716, at paras. 43-44.
Malik
has been
    applied in the context of final determinations on the merits in subsequent
    civil proceedings: see e.g.
MacRury v. Keybase
, 2017 NSCA 8, 411
    D.L.R. (4th) 255;
National Bank Financial Ltd v. Barthe Estate
, 2015
    NSCA 47, 359 N.S.R. (2d) 258;
I.K.K. v. M.P.
, 2018 ONSC 2743, 8 R.F.L.
    (8th) 367;
Deposit Insurance Corp. of Ontario v. Malette
, 2014 ONSC
    2845; and
Kay v. Caverson
, 2011 ONSC 4528, 5 C.L.R. (4th)

17,
    affd 2013 ONCA 220, 19 C.L.R. (4th) 213.

[55]

In Binnie J.s view, a prior judicial decision
    between the same or related parties or participants on the same or related
    issues is not merely another controversy over hearsay or opinion evidence:
Malik
,
    at para. 52. Rather, the courts earlier decision [is] a judicial
    pronouncement after the contending parties [have] been heard having a
    substantial effect on their legal rights:
Malik
,

at para. 52.
    In this vein, the admissibility of prior civil or criminal judgments in
    subsequent civil proceedings, and the effect to be given to them, must be seen
    in the context of the need to promote efficiency in litigation and reduce its
    overall costs to the parties:
Malik
,
at para. 37. The rule in
Hollington
gave rise to unnecessary inefficiencies, and any resulting unfairness in
    admitting prior judicial findings into evidence could be addressed on a
    case-by-case basis:
Malik
, at para. 52.

[56]

In this case, the motion judge identified the
    issues in the prior criminal proceedings as including whether [the appellant]
    was guilty of the fraud charged and, once he was found guilty  what relevant
    aggravating and mitigating circumstances were present: at para. 24. In the
    motion judges view, the findings of the sentencing judge were admissible in
    the summary judgment proceedings. He explained his reasoning, at paras. 30-31:

The fraudulent scheme pleaded in the statement
    of claim is the same fraudulent scheme described by [the sentencing judge] in
    the Decision on Sentencing. The fiduciary duty of [the appellant] toward the
    [respondent] pleaded in the statement of claim arises out of the same
    relationship as the fiduciary duty about which [the sentencing judge] made
    findings of fact. There is very clearly a large overlap of issues between the
    civil and criminal proceedings even if all the issues in the one were not
    present in the other and vice versa.

[The appellant] was of course a party to both
    proceedings and was, as I have indicated, vitally concerned in the criminal
    proceedings. While [the respondent] was not a party to the criminal proceedings
per se
, [the respondent] was the victim of the crime being tried.

[57]

I agree that the sentencing judges findings,
    including those made under s. 724(2)(b) of the
Criminal Code
, were
    admissible on the summary judgment motion.

[58]

The sentencing judges findings were relevant to
    the issues raised on the summary judgment motion. The appellant (as the
    criminal accused) and the respondent (as the complainant) were parties or
    participants in the prior criminal proceedings, which raised similar or
    related issues.

Mali
k
directs that lack of identity of issue
    goes to weight, not admissibility: at para. 43. At the sentencing proceedings,
    the extent of the appellants breach of trust was a relevant consideration,
    pursuant to s. 718.2(a)(iii) of the
Criminal Code
. It is in relation
    to this factor that the sentencing judge found the appellant to have breached a
    fiduciary duty to the respondent. Thus, the fact that the issues in the
    criminal proceedings were not identical to those in the civil proceeding did
    not operate as a bar to admissibility of the sentencing judges findings
    relative to the respondents breach of fiduciary duty.

[59]

I turn now to the issue of weight, and, in
    particular, the sentencing judges finding that the appellant was a fiduciary.

(b)

Weight of the Finding
    that the Appellant was a Fiduciary

[60]

Having concluded that the sentencing findings
    were admissible, the motion judge then turned to the weight and significance to
    be given to those findings. He concluded, upon weighing the evidence before him
    pursuant to r. 20.04(2.1) of the
Rules of Civil Procedure
, R.R.O.
    1990, Reg 194, that
all
the findings of the
    sentencing judge were entitled to very considerable weight because of the
    similarity of the issues, the identity of the parties, and the criminal nature
    of the prior proceeding, and that a trial was not required in order for him to
    undertake that weighing exercise: at para. 33. He did not revisit that blanket
    finding when he turned to deal with the breach of fiduciary duty claim some
    pages later in his reasons.

[61]

A motion judges weighing of evidence to
    determine whether there is a genuine issue requiring a trial is ordinarily accorded
    deference on appeal. However, deference is not accorded where there is an error
    in principle. Here, the motion judge erred in principle by failing to consider
    factors that were relevant to the weight to be accorded to the sentencing
    judges findings relative to fiduciary duty:
Hryniak v. Mauldin
, 2014
    SCC 7, [2014] 1 S.C.R. 87, at paras. 81, 84;
Chernet v. RBC General
    Insurance Co.
, 2017 ONCA 337, at para. 4.

[62]

I have discussed
Malik
. It not only
    speaks to the issue of admissibility of prior judicial findings, but also to
    the question of the weight to be given to such findings. Where prior judicial
    findings are found to be admissible,
Malik

directs that the weight
    to be afforded to those findings will depend on all the circumstances of each
    case, including factors such as the similarity of the issues to be decided, the
    identity of the parties, the nature of the earlier proceedings, the opportunity
    given to the prejudiced party to contest the previous finding, and (because of
    the differing burdens of proof) whether the prior proceedings were criminal or
    civil:
Malik
, at paras. 42, 47-48.

[63]

In this case, the first reason the motion judge
    gave for concluding that the appellant was a fiduciary of the respondent from
    2002-2007 was the sentencing judges finding that the appellant was a
    fiduciary. I repeat the motion judges fiduciary duty analysis, which is found
    at para. 62 of his reasons, for ease of reference:

The Decision on Sentencing made specific
    findings that Mr. Plate was a fiduciary.
The
    finding is one amply supported by Mr. Plates title during the relevant time
    frame (General Manager of CMT and then vice-president) and by such description
    as the Decision on Sentencing contains regarding his duties and the vulnerability
    of Atlas Copco to him. Mr. Plate has provided me with no evidence to
    negative that finding. [Emphasis added.]

[64]

It is unlikely that the respondent would have
    sought summary judgment on its claim for breach of fiduciary duty in sole
    reliance on the Decision on Sentencing in the absence of the finding that the
    appellants participation in the scheme was a gross breach of his fiduciary
    duty. In my view, the outcome of the summary judgment motion turned on that
    finding.

[65]

At the outset, it is important to emphasize that
    the characterization of an individual as a fiduciary carries a particular
    meaning at common law, and reflects a conclusion of mixed fact and law:

Waxman
    v. Waxman
(2004), 186 O.A.C. 201, at para. 716 (C.A.), leave to appeal
    dismissed [2005] 1 S.C.R. xvii (note). A fiduciary relationship arises where:
    (1) there is an undertaking by the fiduciary to act in the best interests of
    the beneficiary; (2) the beneficiary is vulnerable to the fiduciarys exercise
    of discretion or control; and (3) an identifiable legal or practical interest
    of the beneficiary stands to be adversely affected by the fiduciarys exercise
    of discretion or control:

Elder Advocates of Alberta Society v. Alberta
,
    2011 SCC 24, [2011] 2 S.C.R. 261, at para. 36. With respect to certain
    traditional, or
per se
, fiduciary relationships, these elements are
    presumed to exist. In other circumstances, they will arise on case-by-case, or
ad
    hoc
, basis:
Hodgkinson v. Simms
, [1994] 3 S.C.R. 377, at pp.
    408-410;
Elder Advocates
,
at paras. 29-36
.

[66]

The motion judge did not consider whether the
    issue of the appellants fiduciary status had been argued before the sentencing
    judge.

[67]

Indeed, in its written sentencing submissions,
    the Crown did not argue that the appellant was a fiduciary.
[7]
Rather, the Crown focused on
    the extent of the appellants breach of trust, arguing that the appellant was
    highly trusted by the respondent and grossly betrayed that trust. As noted
    above, pursuant to s. 718.2(a)(iii) of the
Criminal Code
evidence
    that the offender, in committing the offence, abused a position of trust or
    authority in relation to the victim is an aggravating factor on sentencing. Although
    a fiduciary relationship involves an element of trust, it has a distinct
    meaning at law from the term position of trust in s. 718.2(a)(iii): see
R.
    v. G.(A)

(2004)
,
190 C.C.C. (3d) 508 (Ont. C.A.), at paras.
    16-18.

[68]

In his sentencing submissions, the appellant did
    not
take
    issue with the assertion that he was highly trusted by the respondent and had
    breached that trust
. Instead, he
argued that
    his position with the respondent had not facilitated the fraud because he was
    not responsible for
,
or involved with
,
the employee
    benefits plan. He argued
that
a breach of trust is not as egregious where
    the trusted employees position is not essential to the accomplishment of the
    defalcation
.

[69]

It is in this context that the sentencing judge
    made the finding  contained in a single sentence in his Decision on Sentencing
     that the appellant breached a fiduciary duty to the respondent. While the
    characterization of an individual as a fiduciary is a question of mixed fact
    and law, the sentencing judge did not have the benefit of legal submissions
    from the parties on that issue, and did not advert to any legal authority in
    his Decision on Sentencing on the test for imposing a fiduciary obligation, in
    finding the appellant to be fiduciary.

[70]

Moreover, because the finding that the appellant
    was a fiduciary was not express or implied in the jurys verdict, but was made
    by the sentencing judge in the exercise of his fact-finding power under s.
    724(2)(b) of the
Criminal Code
, the appellants ability to appeal that
    finding was constrained significantly. The appellant could not contest the
    finding that he was a fiduciary by appealing his conviction; rather, he would
    be required to seek leave to appeal sentence. Given that it was uncontroverted
    that the appellant occupied a position of trust (which is an aggravating factor
    on sentencing), and in light of the deferential standard of review applicable
    to sentencing decisions on appeal, it is unlikely that contesting the
    sentencing judges finding that the appellant was a fiduciary would have had
    any practical effect on the sentence imposed. As a result, the appellant did
    not realistically have the opportunity to contest the sentencing judges
    finding that he was a fiduciary by way of appeal. In this way, this finding
    under s. 724(2)(b) of the
Criminal Code

is different from a
    finding express or implied in a jurys verdict of guilt, which could be
    contested by appealing conviction as of right.

[71]

As I have noted, the opportunity to contest the
    prior judicial finding is identified in
Malik
as an important factor
    in determining the weight to be given to that prior finding:
Malik
, at
    para. 48. Here, the fiduciary question was not in play before the sentencing
    judge and the appellant did not have a realistic opportunity to challenge the
    fiduciary finding. The motion judge failed to consider these factors  factors
    that diminished the weight to be accorded to the finding that the appellant was
    a fiduciary  and, in doing so, he erred in principle.

[72]

I have focused my attention in this section on the
    sentencing judges finding that the appellant was a fiduciary. The motion judge
    also relied on other findings made by the sentencing judge relative to breach
    of fiduciary duty. I will now discuss those other findings in assessing whether
    the motion judge erred in granting summary judgment.

(c)

Summary Judgment 
    Genuine Issue for Trial

[73]

As
Hryniak
directs, there will be no
    genuine issue requiring a trial when the motion judge is able to reach a fair
    and just determination on the merits of the motion. This will be the case when
    the process (1) allows the judge to make the necessary findings of fact; (2)
    allows the judge to apply the law to the facts; and (3) is a proportionate,
    more expeditious and less expensive means to achieve a just result:
Hryniak
,
    at para. 49. What is fair and just turns on the nature of the issues, the
    nature and strength of the evidence and what is the proportionate procedure:
Hryniak
,
    at para. 59.

[74]

In this case, in addition to relying on the
    sentencing judges finding that the appellant was a fiduciary, the motion judge
    accepted that the appellant was a fiduciary for the period of 2002-2007 because:
    (1) the fiduciary finding was supported by the appellants title during the
    relevant time frame (General Manager of CMT and then Vice-President Global
    Strategic Customers); (2) the description of the appellants duties and the
    respondents vulnerability to the appellant in the Decision on Sentencing
    suggested he was a fiduciary; and (3) the appellant had provided the motion
    judge no evidence to negative that finding: at para. 62.

[75]

As I have explained, the motion judge erred in
    according the sentencing judges finding that the appellant was a fiduciary
    very considerable weight. The issue is whether, given the diminished weight
    to be afforded to that finding, there is a genuine issue requiring a trial when
    that finding is considered along with the other findings relied on by the
    motion judge.

[76]

Before addressing that issue, I pause here to
    note that, while the motion judges reasons are somewhat unclear in this
    regard, I do not understand him to have applied the doctrine of abuse of
    process to preclude the appellant from leading evidence to contest the
    sentencing judges finding that he was a fiduciary of the respondent. Despite
    some comments earlier in his reasons that seem to suggest he applied abuse of
    process to all of the findings contained in the Decision on Sentencing (see,
    for e.g., paras. 2 and 38), para. 62 suggests he did not do so with respect to
    the sentencing judges finding that the appellant was a fiduciary. At para. 62,
    the motion judge adverted to the fact that the appellant had provided him no
    evidence to negative the finding that he was a fiduciary. Thus, the motion
    judge does not appear to have treated the sentencing judges finding that the
    appellant breached a fiduciary duty as having acquired conclusive effect.

[77]

In my view, it would have been an error to
    preclude the appellant from re-litigating that finding in these circumstances,
    for largely the same reasons that inform my conclusion that the motion judge
    could not give very considerable weight to the sentencing judges finding
    that the appellant was a fiduciary. The abuse of process doctrine is sensitive
    to the circumstances in which prior judicial determinations are made and the
    opportunity afforded to the prejudiced party to contest the relevant finding in
    the earlier proceedings: see e.g.
Intact Insurance Co. v. Federated
    Insurance Co. of Canada
, 2017 ONCA 73, 134 O.R. (3d) 241 (C.A.).

[78]

Returning to the issue of whether there is a
    genuine issue requiring a trial, I am not satisfied that the subsidiary findings
    relied on by the motion judge were sufficient to eliminate the need for a trial
    on the fiduciary question.

[79]

The motion judge pointed to the appellants
    title in concluding he was a fiduciary. The respondents claim for breach of
    fiduciary duty  at least as it relates to the period from 2002-2005 when the
    appellant was the General Manager of CMT  depended on the appellant being
    characterized as a fiduciary-employee.
[8]
Although senior level employees that form part of top management and exercise
    discretion to affect their employers legal and economic interests may owe a
    fiduciary duty to their employer, this is inherently a contextual and
    fact-specific determination:

Can Aero v. OMalley
, [1974] S.C.R.
    592, at pp. 605-606;
Edgar T. Alberts Ltd. v. Mountjoy
(1977), 16 O.R.
    (2d) 682 (H.C.J), at p. 692;
Felker v. Cunningham
(2000)
,
191
    D.L.R. (4th) 734 (Ont. C.A.), at paras. 14-16, leave to appeal dismissed [2000]
    S.C.C.A. No. 538;
Dunsmuir v. Royal Group
, 2017 ONSC 4391, 41 C.C.E.L.
    (4th) 93 (S.C.), at para. 131, affd 2018 ONCA 773, 50 C.C.E.L. (4th) 310
    (C.A.). In this vein, it is unhelpful to focus on job titles; the role of a
    General Manager can embrace dramatically different responsibilities and
    duties across different organizations.

[80]

The motion judge said he also relied on the
    description in the Decision on Sentencing of the appellants duties but did
    not point to specific findings. I would note that the sentencing judges
    findings say very little about the nature of the appellants duties and
    responsibilities as the General Manager of CMT. The sentencing judge noted that
    the appellant was the General Manager of the CMT division, that he was in
    charge of its Canadian CMT operations and that he was promoted to a global
    vice-presidency. He also noted that the appellant was Leo Carons direct
    supervisor and that Hillier reported to him. There is no mention of the
    appellants reporting obligations or any details as to the nature and scope of
    his responsibilities in either of his roles.

[81]

The motion judge also said he relied on the
    sentencing judges description of the vulnerability of the respondent to the
    appellant. Again, he did not point to particular findings.

[82]

One relevant finding is the sentencing judges finding
    that the appellant was highly trusted by the respondent. But while this
    finding may be relevant to whether the appellant is a fiduciary, not all relationships
    involving trust are fiduciary in nature.

[83]

The sentencing judge also found that the
    appellant was best positioned to stop the fraud; in this sense, the respondent
    was vulnerable to the appellants decision not to stop the fraud. However,
    vulnerability alone is insufficient to ground a fiduciary duty:
Elder
    Advocates
, at paras. 28, 36. The focus of the fiduciary relationship is an
    undertaking by the fiduciary to exercise a discretionary power to affect the
    legal or practical interests of the purported beneficiary; it is from this
    exercise of discretion or control that the vulnerability must arise:

Galambos
    v. Perez
, 2009 SCC 48, [2009] 3 S.C.R. 247, at paras. 67-71;
Elder
    Advocates
, at para. 36.

[84]

The motion judge relied on the sentencing judges
    finding as to the total overbilling for the period of 2004-2007 in calculating
    the damages for breach of fiduciary duty. This assumed that the appellant was a
    fiduciary from 2002-2005, when he was the General Manager of CMT. Neither the
    sentencing judges findings, nor the motion judges reasons, provide any basis
    for calculating the damages if the appellant was not a fiduciary while he was
    the General Manager of CMT.

[85]

As I have said, the deference ordinarily
    accorded to a motion judges determination that there is no genuine issue
    requiring trial is displaced in this case. In the end, I am not persuaded that
    a fair and just determination on the merits could be made on this summary
    judgment motion. In this unusual case, the respondents summary judgment motion
    cannot be saved by the inadequacy of the appellants responding evidence. Given
    my concerns about the weight that could be afforded to the sentencing judges
    finding that the appellant breached a fiduciary duty, the limited nature of the
    other evidence relied upon by the motion judge and the overall approach that he
    adopted on the summary judgment motion, I am not satisfied that the record
    before the motion judge positioned him to make the necessary factual and legal
    findings to either grant judgment to the respondent for breach of fiduciary
    duty in the amount of $20 million or to dismiss its claim for breach of
    fiduciary duty.

[86]

Further, the respondent seeks damages in the
    amount of $20 million against the appellant. While the amount at issue is not
    of itself a basis for declining to grant summary judgment, in this case a trial
    is also a proportional procedure.

[87]

I should not be taken as suggesting that
    findings made under s. 724(2)(b) of the
Criminal Code
in sentencing
    proceedings cannot, in a proper case, ground summary judgment in subsequent
    civil proceedings. Both the
Malik
framework and the doctrine of abuse
    of process are flexible concepts, attentive to the circumstances in which prior
    judicial determinations are made and the proposed use of such findings in
    subsequent proceedings.

[88]

Indeed, it may be that the appellant will
    ultimately be found to be a fiduciary of the respondent. This is an issue for
    the ultimate trier of fact.

[89]

While I would allow the appeal on this basis and
    remit the matter back to the Superior Court of Justice for trial, I go on to
    address the appellants arguments that the motion judge (1) erred in applying
    the doctrine of abuse of process to bar him from relying on discovery evidence
    to defend the summary judgment motion; (2) erred by finding that passive
    acquiescence to a fraudulent scheme constituted breach of fiduciary duty; and
    (3) erred by awarding damages for breach of fiduciary duty in excess of the
    amount of restitution ordered by the sentencing judge.

(2)

The Appellants Other
    Arguments

(a)

Abuse of Process and
    Discovery Evidence

[90]

The appellant argues that the motion judge erred
    in applying the doctrine of abuse of process to bar the appellant from relying
    on evidence obtained during examinations for discovery in the civil proceeding
    to defend the summary judgment motion. As I will explain, I do not agree.

[91]

Relying on the discovery evidence, the
    appellants key position on the summary judgment motion was that he had not
    been involved in the fraudulent scheme. In essence, he sought to re-litigate
    his criminal conviction.

[92]

The doctrine of abuse of process provides the
    court the discretion to prevent re-litigation where necessary to preserve the
    integrity of the adjudicative process:
Toronto
    (City) v. C.U.P.E., Local 79
, 2003 SCC 63, [2003]
    3 S.C.R. 77, at paras. 42-43, 51;
Intact Insurance
,
at para.
    28. Re-litigation inevitably has a detrimental effect on the due administration
    of justice, as it can lead to inconsistent results, devalue finality, and
    contribute to the unnecessary expenditure of public and private resources, with
    no guarantee that the second result will be more accurate than the first:
C.U.P.E.
,
    at paras. 51-52;
Intact Insurance
, at para. 28.

[93]

Thus, re-litigation is to be avoided unless the
    circumstances dictate that re-litigation is necessary to enhance the
    credibility and effectiveness of the adjudicative process as a whole:
C.U.P.E.
,
    at para. 52;
Intact Insurance
, at para. 28. While there is no closed
    list of circumstances in which re-litigation is necessary, courts will permit
    re-litigation if in the specific circumstances fairness dictates that the
    original result should not be binding in the new context:
C.U.P.E.
,
    at para. 52-53;
Intact Insurance
, at para. 28.

[94]

The motion judge
    adverted to
C.U.P.E.

He
    concluded that the appellant was precluded from re-litigating the factual
    findings disclosed by the Decision on Sentencing on the subsequent summary
    judgment motion: see paras. 2, 35-40. H
e found
    that the appellant had failed to place any evidence before him from which he
    might conclude that there would be an unfairness worked by the application of
    the doctrine of abuse of process: paras. 35-38.

[95]

As I have already explained, I understand
    the motion judge to have applied the abuse to process doctrine to all of the
    relevant sentencing findings,
other
than the finding that the appellant
    was a fiduciary: at para. 62.

[96]

I do not see
    any basis to interfere with the motion judges application of the abuse of
    process doctrine on the motion for summary judgment. I agree with the motion
    judge that allowing the appellant to impugn the findings contained in the
    Decision on Sentencing (with the exception of the sentencing judges finding
    that the appellant was a fiduciary) would undermine the integrity of the
    adjudicative process.

[97]

The issues in the criminal proceeding were
    substantially similar to those in the underlying civil proceeding, as both
    proceedings arose out of the same fraudulent scheme. The appellant was
    represented by counsel throughout his criminal trial, and was found guilty beyond
    a reasonable doubt of fraud over $5,000. The appellant had the right to appeal
    his conviction, but did not do so.

[98]

There is no indication that the appellants criminal
    trial was tainted by fraud or dishonesty:
C.U.P.E.
, at para. 52. There
    is also no indication, at least on this record, that evidence not available in
    the criminal proceeding is now available that conclusively impeaches the
    original result:
C.U.P.E.
, at para. 52. Indeed, the discovery evidence
    the appellant now seeks to rely on existed before his criminal trial.

[99]

With the exception of the sentencing judges
    finding that the appellant was a fiduciary of the respondent, the appellant had
    the full opportunity to litigate the factual findings contained in the Decision
    on Sentencing:
Intact Insurance
,
at para. 34. The potential
    consequences of the criminal proceeding were sufficiently serious to
    incentivize a full defence:
Intact Insurance
, para. 41. The appellant
    has not pointed to any other reason that would justify re-litigation.

[100]

As a result, I reject the appellants argument that the motion judge
    erred in precluding the appellant from relying on discovery evidence to, in
    effect, contest the factual foundation of his criminal conviction in the
    context of this summary judgment motion.

(b)

Passive
    Acquiescence and Breach of Fiduciary Duty

[101]

The appellant argues that the concept of passive acquiescence as it
    relates to the conduct of fiduciaries is not known to law and liability cannot
    be imposed on this basis.

[102]

I disagree. A fiduciary who knows about wrongdoing committed against
    the beneficiary has a duty to tell the beneficiary:
Dunsmuir v. Royal Group
,
    2017 ONSC 4391, 41 C.C.E.L. (4th) 93, at para. 134, affd 2018 ONCA 773, 50
    C.C.E.L. (4th) 310, at para. 14.
As a matter of law, a fiduciary who
    knows of a fraudulent scheme perpetrated against the beneficiary and passively
    acquiesces to its continuation has breached his duty to the beneficiary.

(c)

Damages for Breach of
    Fiduciary Duty and the Restitution Order

[103]

The appellant also argues that by ordering damages in excess of the
    restitution ordered by the sentencing judge, the motion judge improperly acted
    as a
de facto
appeal judge to alter the outcome of a court of
    co-ordinate jurisdiction.

[104]

I disagree. The quantum of restitution ordered under s. 738(1)(a) of
    the
Criminal Code

and the assessment of damages for breach of
    fiduciary duty are guided by different principles. Since the sentencing judge
    and the motion judge were engaged in different exercises that were guided by
    different principles, the quantum of restitution ordered by the sentencing
    judge does not represent the upper limit of the damages that the motion judge
    could order for breach of fiduciary duty.

[105]

The sentencing judge rejected the Crowns request for a $22 million
    restitution order made jointly and severally against the appellant and Paul
    Caron, and instead made a restitution and forfeiture order against the
    appellant in favour of the respondent in respect of the annuities and the sum
    of $77,930. In doing so, the sentencing judge was guided by s. 738(1)(a) of the
Criminal Code
, which permits a sentencing judge to order restitution
    to a victim of a crime in an amount not exceeding the value of the loss less
    the value of any amount already returned, where the amount is readily
    ascertainable.

[106]

Restitution
    orders are discretionary in nature, and are intended to give effect to several
    sentencing principles, including the principle of rehabilitation. As a result,
    the impact of the proposed restitution order on the offenders prospects for
    rehabilitation is a relevant factor:
R. v. Castro
, 2010 ONCA 718, 102
    O.R. (3d) 609, at para. 26;
R. v. Yates
, 2002 BCCA 583, 169 C.C.C (3d)
    506, at paras. 7, 11.

The offenders
    ability to pay is also a relevant factor, though not the predominant factor in
    cases involving breach of trust:
Castro
, at para. 28;
Yates
,
    at paras. 12, 17. Where a restitution order is imposed in conjunction with a
    sentence of imprisonment, the entirety of the sentence must be consistent with
    the totality principle:
Castro
, at para. 23. The order need not be
    made for the full amount of a victims loss.

[107]

In crafting a restitution order, it is also relevant to consider
    whether civil proceedings have been initiated:
Castro
, at para. 24. As
    the appellant himself stated in his written submissions on sentencing, a
    restitution order should be made with restraint and caution. The existing civil
    proceeding involving [the respondent and the appellant] is best capable of
    determining the amount of loss suffered attributable to the actions of [the
    appellant].

[108]

These
    sentencing principles do not guide the court in providing a civil remedy for
    breach of fiduciary duty.
Equitable compensation  as a form
    of fiduciary relief  is discretionary in nature:
Mady Development Corp v.
    Rossetto
, 2012 ONCA 31, 287 O.A.C. 277, at para. 18. The
fundamental measure of equitable
    compensation for breach of fiduciary duty is restitutionary; the injured
    beneficiary is entitled to be reimbursed for the losses flowing from the
    fiduciarys breach, and to be put in the position it would have been in but for
    the breach:
Hodgkinson
,
    at p. 440. The court can consider the principles of remoteness, causation and
    intervening acts when necessary to achieve a fair and just result, but those
    principles should only be applied if doing so does not raise any policy
    concerns:
Waxman
,
at para. 662;
Hodgkinson
, at p. 443.

[109]

Further, s. 741.2 of the
Criminal Code

provides that
    a civil remedy for an act or omission is not affected by the fact that a
    restitution order has been made in respect of that act or omission.

[110]

As a result, while the damages that flow from the appellants
    alleged breach of fiduciary duty will fall to be determined at the eventual
    trial, the quantum of such damages for breach of fiduciary duty may exceed the
    amount of restitution ordered under s. 738(1)(a) of the
Criminal Code
.

DISPOSITION

[111]

For these reasons, I would allow the appeal, dismiss the
    respondents motion for summary judgment, and remit the matter back to the
    Superior Court of Justice for trial. I would order that the appellant is
    entitled to his costs of the appeal, fixed in the amount of $22,000, inclusive
    of HST and disbursements. Costs of the summary judgment motion should be
    determined by the motion judge in light of this disposition.

Released:  AH MAR 13 2019

Alexandra Hoy
    A.C.J.O.

I agree K. Feldman
    J.A.

I agree Grant Huscroft
    J.A.





[1]
Although they share the same last name, Leo Caron and Paul Caron are not
    related.



[2]
In fact, the respondent is the Canadian subsidiary of a large multinational
    corporation: Respondents Factum, at para. 8. However, nothing turns on this.



[3]

The motion judge found that the respondent was in fact the
    General Manager of CMT from 2002-2005. Again, nothing turns on this discrepancy
    because of the approach the motion judge adopted on the summary judgment motion
    below.



[4]
The respondents employee benefits program was administered by a company
    incorporated and controlled by Paul Caron. Another company, incorporated and
    controlled by Paul Caron, handled the respondents other insurance needs.



[5]

Below I address the question of whether the motion judge
    applied the abuse of process doctrine so as to preclude the appellant from
    contesting the finding that he was a fiduciary.



[6]

See
Demeter v. British Columbia
(1983), 43 O.R. (2d) 33 (H.C.J.), affd (1984), 48 O.R. (2d) 283
    (C.A.); and
Del Core v. College Pharmacists (Ontario)
(1985), 51 O.R. (2d) 1 (C.A.).



[7]

The parties written submissions on sentencing, but not the
    transcript of the sentencing proceedings, were before the motion judge.



[8]
Neither the sentencing judge, nor the motion judge, found that the appellant
    was an officer or director of the respondent, such that he would be a
    status-based, or
per se
, fiduciary and subject to a statutory duty of
    loyalty under s. 122(1)(a) of the
Canadian Business Corporations Act
, R.S.C.
    1985, c. C-44.


