COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Palmer, 2015 ONCA 329

DATE: 20150512

DOCKET: C53234

Feldman, Simmons and Pepall JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Dwayne Palmer

Appellant

Delmar Doucette, for the appellant

John Patton, for the respondent

Heard: November 10, 2014

On appeal from the convictions entered by Justice Silja S.
    Seppi of the Superior Court of Justice on November 3, 2010, sitting with a jury.

By the Court:

[1]

The appellant appeals from his November 3, 2010 convictions on two
    counts of second degree murder. At trial, although he testified that he had no
    memory of the events, the appellant did not contest that on April 30, 2008 he
    stabbed to death two strangers at the Red Maple Plaza in Brampton. He testified
    that he had no intention that day of killing anyone but himself.

[2]

At the time of the homicides, the appellant was 28 years old, lived with
    his mother and had been unemployed for three years. According to him, on the
    day in question, he left his house with two knives with the intention of
    committing suicide. He took a series of buses via downtown Brampton to the Bramalea
    City Centre, on to the Westwood Mall in Mississauga, then to Toronto and then back
    to the Westwood Mall. He returned to Brampton and got off the bus near the Red
    Maple Plaza. He claims that before leaving his home he filled a water bottle
    with a mixture of vodka and overproof rum and drank from it while on the bus.
    Just before arriving at the plaza he took some Tylenol 3 tablets containing
    codeine.

[3]

At the plaza, the appellant was observed approaching the 52-year old
    female deceased, who was unknown to him, as she returned to the parking lot
    from a dental clinic she had been visiting. He took possession of her keys; she
    resisted and he stabbed her four times in the back. He approached her, bent
    over her body and looked at her and then turned the knife on himself. The
    female deceaseds 53-year old husband, who was also unknown to the appellant,
    came to her aid and had an altercation with the appellant during which he was
    stabbed seven times. Witnesses then saw the appellant stab himself in the
    throat several times. After the police arrived, the appellant slit his own
    throat causing a deep cut. As he attempted to slit his throat a second time, a
    police officer tasered him thereby disabling him.

[4]

A police officer at the scene heard the appellant say, Im dying. Im
    dying. An attending paramedic testified that the appellant made the following
    statements more than once: Am I going to die today and I am not going to die
    today.

[5]

In March 2009, the defence retained Dr. Gojer, a forensic psychiatrist. After
    meeting with the appellant, Dr. Gojer recommended that a further assessment be
    done to determine whether the appellant was schizophrenic. The appellant was
    sent to Penetanguishene Mental Health Centre (PMHC), where Dr. Pallandi, the
    consulting forensic psychiatrist assigned to his care, assessed him three
    times. Dr. Pallandi reported that the appellant engaged in problematic
    behaviours at PMHC, including muteness, atrocious personal hygiene and the
    deliberate collecting and spreading of urine and faeces. A treatment order was
    sought and obtained. Although initially found to be unfit to stand trial and
    repeatedly described as an enigma, the appellant was eventually found to be
    fit. Dr. Pallandi, in his discharge summary dated July 28, 2010, stated his final
    diagnosis as: Antisocial Personality Disorder.

[6]

Just prior to trial, Dr. Gojer assessed the appellant for a second time to
    determine whether he qualified for a defence of not criminally responsible.
    While the appellant displayed negative symptoms (flat affect, monotony of
    speech, and apparent disconnection from what was happening), when interviewed
    he did not describe positive symptoms, such as hallucinations. In the absence
    of positive symptoms, Dr. Gojer determined that the appellant was suffering
    from a psychotic illness, most likely schizophrenia, but that there was nothing
    in his history that would lead him to conclude that the appellant had a s.
    16(1) defence available to him.

[7]

At trial, the Crown advanced a theory of robbery-homicide. Dr. Gojer
    gave evidence for the defence aimed at raising a doubt concerning whether the
    appellant had the intention to commit murder.

[8]

Dr. Gojer testified that he could only provide a differential diagnosis
    of an undefined psychotic illness. He testified that he spoke to the
    appellants mother prior to the trial. She told him that for about two months
    prior to the homicides the appellant had become more withdrawn, was isolating
    himself in his room, appeared to be talking to himself and laughing to himself,
    would stay up all night and would not make good eye contact. She described this
    as a change in his behaviour.

[9]

Although he considered catatonic schizophrenia, Dr. Gojer testified that
    his ultimate opinion remained uncertain and he could not opine on a balance of
    probabilities that the appellants major mental illness had been so severe and
    his thought processes so disorganized as to displace the presumption of sanity.

[10]

The
    appellant raises several issues on appeal. As his primary ground, he seeks to
    show that he was not criminally responsible at the time of the killings by
    introducing fresh evidence on appeal. For the reasons that follow, we consider
    this ground dispositive of the issues on appeal.

[11]

On
    September 12, 2012 appellate counsel visited the appellant at Kingston Penitentiary
    to prepare for the appeal and formed the lay opinion that the appellant was
    suffering from mental disorder. On November 28, 2012 Dr. Bradford, a forensic
    psychiatrist, saw the appellant at the Regional Treatment Centre. He reviewed
    the appellants penitentiary records and concluded that he was seriously mentally
    ill suffering from Schizophrenia, Catatonic type. Rosenberg J.A. granted a
    consent order that the appellant be transferred to the forensic treatment unit
    of the Brockville Mental Health Centre for a sixty day post-conviction assessment
    by Dr. Bradford.

[12]

Dr.
    Bradford provided an opinion letter dated June 14, 2013 in which he concluded
    that the appellant currently suffered from Schizophrenia, Catatonic Type, Continuous,
    with prominent negative symptoms and further that he was severely mentally ill
    prior to the index offences and at the time of the index offences. His opinion
    concluded that Mr. Palmer would have come within the terms of Section 16 of
    the Criminal Code of Canada at the material time of the index offences.

[13]

Drs.
    Gojer and Pallandi were then asked if Dr. Bradfords report affected their
    previous opinions. Dr. Gojer responded that he was now confident that the
    diagnosis of schizophrenia is not in dispute, and opined that the appellants
    illness is Schizophrenia with prominent features of Catatonia. He concluded
    that, on the balance of probabilities, the appellant did meet the test for s.
    16 at the time of the index offences. Dr. Pallandi was now similarly persuaded
    that a diagnosis of schizophrenia is appropriately applied to the appellant and
    that, on the balance of probabilities, the presumption of criminal
    responsibility in this case at the time of the offences could reasonably be
    displaced.

[14]

With
    respect to the second branch of the s. 16 test (whether the major mental
    illness rendered the appellant incapable of appreciating the nature and quality
    of his acts or of knowing that they were wrong at the time of the offences),
    the three doctors said the following in their post-conviction reports:

Dr. Bradford:

[I]n my opinion, an unprovoked attack against a complete
    stranger/strangers in a public place in broad daylight followed by a bizarre
    suicide attempt is strongly indicative of a severe mental illness at the time
    of the index offences. This is further indication that Mr. Palmer would not
    have been aware that what he was doing was wrong or even aware of the physical
    nature of his actions if he was in a significantly confused state. In my
    opinion Mr. Palmer would have come within the terms of Section 16 of the
    Criminal Code of Canada at the material time of the index offence.

Dr. Gojer:

Given the unpredictability of his actions secondary to his
    mental illness, the severe nature of his illness, his disorganized thinking, it
    would be more likely than not that he would not have been able to weigh the
    pros and cons of his actions, exercise rational choice or know that what he was
    doing was morally wrong.  It is therefore my opinion that Mr. Palmer does
    meet, on the balance of probabilities, the test for Section 16.1 of the
    Criminal Code of Canada.

Dr. Pallandi:

Concerning the second question, that being his criminal
    responsibility, notwithstanding the concerns I have identified above, with the
    additional information that has been made available to me, I am persuaded that
    on the balance of probabilities, that the presumption of criminal
    responsibility in this case can reasonably be displaced, from a clinical
    perspective, and that a defence of Not Criminally Responsible should reasonably
    be available to Mr. Palmer.

[15]

We
    reject the Crowns submission that the fresh evidence does not meet the
R.
    v. Palmer
,
[1980] 1 S.C.R. 759 criteria. The evidence was not
    available prior to trial; it bears on the appellants not criminally
    responsible defence; it is credible, cogent and reliable evidence and it could
    reasonably have affected the outcome of the trial. We therefore admit the fresh
    evidence.

[16]

Having
    admitted the fresh evidence, the only issue before us is the remedy. In our
    view, rather than order a new trial, this is a proper case for this court to
    enter a verdict of not criminally responsible.

[17]

In
R. v. I.E.M.
(2003),
173
    C.C.C. (3d) 515
(Ont. C.A.)
, at paras 46-47, this court explained, quoting
    from
R. v. Warsing
,
[1998] 3 S.C.R. 579, that when a not
    criminally responsible defence is raised for the first time on appeal the presumptive
    remedy is a finding of not criminally responsible unless the facts are complex
    and the court concludes that further evidence is required at a new trial:

Finally, there remains the matter of remedy. Section 686(1)(d)
    of the
Criminal Code
gives this court the jurisdiction to set aside a
    conviction and find the appellant not criminally responsible on account of
    mental disorder. Indeed when the NCRMD defence is raised for the first time on
    appeal this, rather than a new trial, would appear to be the presumptive
    course. Major J. said this at para. 65 of
Warsing
:

It is my opinion that it is in the interests of justice that
Mailloux
be read to recognize that where the defence of NCRMD is not
    raised at the trial and if the court of appeal concludes that it cannot make a
    determination with respect to NCRMD it is within the jurisdiction of the court
    of appeal in avoiding a miscarriage of justice, to order a new trial. In most
    cases it is likely that the court of appeal would have sufficient evidence to
    determine the NCRMD question.
It is only in cases where
    the facts are complex and the court concludes that further evidence is required
    that a new trial would be ordered.
[Emphasis added.]

The ultimate issue presented to this court is simple: has the
    appellant established the NCRMD defence on a balance of probabilities? In my
    view she has and a new trial is not required. The facts, including the fresh
    evidence, are not complex. The psychiatric evidence is strong and
    uncontradicted. The Crown has been unable to point to anything in the
    appellant's medical records since being in prison that is, in the least,
    inconsistent with Dr. Ben-Aron's opinion. Indeed those records appear entirely
    consistent with it. I do not think that any further evidence is required to
    dispose of this issue.

[18]

In
    this case, although the circumstances of the offence are horrific, the
    evidentiary record is complete.
On the oral
    hearing, the Crown did not give any indication that it would seek a further
    psychiatric opinion, despite the court asking on several occasions why the
    jury would not accept the opinions of the three psychiatrists.

[19]

Moreover,
    the evidence is strong, uncontradicted and consistent.  All three psychiatrists
    provided reports to confirm their opinions and all were extensively
    cross-examined by the Crown for the purpose of the fresh evidence application.
    The fresh evidence was detailed in terms of the investigations and analysis by the
    three doctors. The three
psychiatrists are
    unanimous in their opinions. Further, the appellants mother repeated her
    observations originally given to Dr. Gojer on the appellants pre-offence change
    in behaviour to: (1) a Brockville Mental Health Centre social worker while the
    appellant was there for his post-conviction assessment; and (2) in an
    affidavit, which was filed as part of the fresh evidence.

[20]

We
    have reviewed the record. We are satisfied on the basis of our review that the
    appellant has proved the defence of not criminally responsible on a balance of
    probabilities.

[21]

The
    appeal is allowed, the convictions are set aside and verdicts of not criminally
    responsible on account of mental disorder are substituted. In accordance with
    s. 672.46 of the
Criminal Code

the appellant will remain in
    custody pending a disposition hearing by the Review Board pursuant to s. 672.47.
In accordance with s. 672.45(1.1), the appellate record, including
    the fresh evidence application, will be sent to the Review Board without delay.

Released:

MAY 12 2015                                   K.
    Feldman J.A.

KF                                                   Janet
    Simmons J.A.

S.E.
    Pepall J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Sahota,
    2015 ONCA 336

DATE: 20150512

DOCKET: C58190

Watt, Pepall and Benotto JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Charnjit Sahota

Appellant

Anida Chiodo, for the appellant

Joanne Stuart, for the respondent

Heard and released orally: April 29, 2015

On appeal from the sentence imposed on April 5, 2013 by
    Justice Allan Gary Letourneau of the Ontario Court of Justice, sitting without
    a jury.

ENDORSEMENT

[1]

The appellant participated in a riot at Joyceville Institution about
    four years ago. He and several other inmates attacked a lesser number of
    inmates, who barricaded themselves in a room in the prison. They then focused
    their attack on a single inmate who suffered significant injuries that required
    surgery and resulted in permanent memory loss.

[2]

The appellant pleaded guilty to aggravated assault as an included
    offence on a count that charged him with attempted murder. He was sentenced to
    a term of imprisonment of seven and one-half years less 45 days credit for
    pre-sentence custody. Trial counsel for the Crown had sought a sentence of
    eight to ten years. Trial counsel for the appellant had argued in favour of a
    sentence of three and one-half to five years.

[3]

The appellants participation in the attack was considerable, substantially
    in excess of anything done or even attempted by other inmates. He participated
    in the initial attack along with several others. Several minutes later, he
    returned to the room, in which the victim lay, obviously unconscious and
    severely injured, in a pool of blood on the floor. The appellant was armed with
    a pool cue. He spat on the victim, then proceeded to strike and spear him in
    his genital area. He pulled down the victims pants, looked at his genital
    area, released the pants and speared the victim again in his genital area. He
    then stomped on the victim before leaving the room.

[4]

The appellants principal complaint here is that the sentencing judge
    failed to properly apply the principle of parity in determining a fit sentence
    for the appellant and for his offence. In order to advance this claim of error,
    the appellant and respondent have agreed that we should consider, as fresh
    evidence, transcripts of the proceedings involving other participants who
    pleaded guilty before the same judge, to the same or related offences. We have
    received, and considered, that evidence.

[5]

We are not prepared to interfere with the sentence imposed.

[6]

Section 718.2(b) of the
Criminal Code
requires a sentencing
    judge to take into account the principle that a sentence should be similar to
    sentences imposed on similar offenders for similar offences committed in
    similar circumstances. This principle is one of parity, not of equivalence. It
    does not require equivalent sentences. Nor does it forbid disparate sanctions
    for persons involved in the same offence. Were that so, it would run afoul with
    the fundamental principle of sentencing in s. 718.1, that of proportionality.

[7]

The principle of parity means that any disparity between sentences for
    different offenders in a common venture requires justification. The appellants
    participation in this offence was, as mentioned, of significantly greater
    gravity than that of the others. His participation did not end, as did the
    others, with the first attack. He returned minutes later, with a weapon, a pool
    cue, spat on the victim, who was clearly unconscious, and then proceeded to
    strike him repeatedly with the pool cue.

[8]

The sentencing judge imposed sentences on the other participants who
    pleaded guilty. Each of those sentencings proceeded on the basis of a joint
    submission. The sentencing judge was of the view that the joint submissions did
    not bring the administration of justice into disrepute. His concurrence with those
    submissions did not compel him to impose an equivalent or near equivalent
    sentence on the appellant for an offence that reflected a significantly greater
    degree of moral blameworthiness.

[9]

Nor are we persuaded that the trial judge gave inappropriate weight to
    the strength of the Crowns case against the appellant. Unlike other
    participants who may have challenged the Crowns case on identification, the
    appellant was unmasked and readily identifiable. It is not inappropriate for a
    trial judge to consider that a guilty plea in the face of an overwhelming case
    may not be accorded the same weight as one in which an accused pleads guilty
    and gives up significant litigable issues.

[10]

In
    the end, we are not persuaded that the sentence imposed reflects an error in
    principle, an overemphasis on or failure to consider a relevant factor, or the
    imposition of a sentence outside the range of sentence appropriate for this
    offence and this offender.

[11]

While
    leave to appeal sentence is granted, the appeal from sentence is dismissed.

David
    Watt J.A.

S.E.
    Pepall J.A.

M.L.
    Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Shearer, 2015 ONCA 355

DATE: 20150519

DOCKET: C59202

Macpherson, Blair and Huscroft JJ.A.

BETWEEN

Her Majesty the Queen

Appellant

and

Steven Craig Shearer

Respondent

Ghazala Zaman, for the appellant

Robin Parker, Duty Counsel

Mr. Shearer did not appear

Heard: May 12, 2015

On appeal from the sentence imposed by Justice M. ODea
    of the Ontario Court of Justice on April 1, 2014.

ENDORSEMENT

[1]

Mr. Shearer was convicted of trafficking in a controlled substance known
    as hydromorphone, a highly potent narcotic pain killer.  He was sentenced to 14
    months imprisonment (less credit of 7.5 months for pre-trial custody), but it
    is ancillary matters relating to the $200 victim surcharge fine that was
    imposed and the sum of $170 in cash seized on his arrest, that form the subject
    matter of the appeal.

[2]

The police were suspicious that the premises where Mr. Shearer was
    ultimately arrested were a site for dealing in hydromorphone.  An undercover
    officer attended at the premises and purchased a quantity of the drug with $20
    in marked bills.  The house was then raided and Mr. Shearer was arrested.  At
    the same time, the police found and seized a number of hydromorphone pills, a
    syringe filled with hydromorphone, other drug-related paraphernalia, and $170
    in cash (including the marked $20).

[3]

As a result of his conviction, Mr. Shearer was required to pay a victim
    surcharge under s. 737(1) of the
Criminal Code
.  The offenders
    obligation to pay the victim surcharge is mandatory and not subject to the
    courts discretion.  In the circumstances here  no fine imposed, and a
    conviction for an offence punishable by indictment  the victim surcharge is
    $200.

[4]

At the conclusion of his reasons for conviction and sentence, the trial
    judge dealt with the victim surcharge in this way:

Victim Fine Surcharge will levy and one month to pay is
    granted.

The Crown is ordered to pay the Victim Fine Surcharge out of
    the cash money seized within 30 days of this date upon which the balance is
    forfeit to the Crown.

The Victim Surcharge Issue

[5]

On behalf of the Crown, Ms. Zaman submits that the trial judge imposed
    an illegal sentence by ordering the Crown to pay the victim surcharge, and to
    do so out of the monies seized.  We agree.

[6]

A court cannot order a victim surcharge to be paid out of funds
    forfeited to the Crown as proceeds of crime.  It is clear from the language of
    s. 737(1) that it is
the offenders
obligation to pay the surcharge.  Funds
    forfeited to the Crown as proceeds of crime no longer belong to the offender.
    To hold otherwise would be to defeat both the intended effect of the victim
    surcharge provisions (I.e., to make the offender pay into a fund to assist
    victims of crime) and the purpose of the forfeiture provisions in the
Criminal
    Code
(i.e., to deprive criminals of their ill-gotten gains, not to enable
    them to leverage those gains to offset another obligation to the state).

[7]

A review of the transcript suggests that the trial judges goal may simply
    have been to ensure that in this case the victim surcharge made its way to the
    victims assistance pool, on the theory that a bird in the hand is worth two in
    the bush  i.e., that if ordered to pay directly, Mr. Shearer may fail to do so
    and the forfeited funds would go to other uses by the Crown.  However,
    commendable this goal may have been, the trial judge in our respectful view did
    not have the authority to make the order he did regarding the manner in which
    the victim surcharge was to be paid.

The Forfeiture Order

[8]

Ms. Zaman argues as well that the trial judge clearly intended to order
    the seized monies to be forfeited to the Crown, but that he failed to do so
    specifically and that this error should be corrected too.  This brings us to
    Ms. Parkers main concern on behalf of the defence.

[9]

Ms. Parkers submissions focussed on the forfeiture order relating to
    that portion of the seized monies exceeding the $20 buy money, if indeed such
    an order were made.  She concedes that the $20 is caught by subsection
    462.37(1) of the
Criminal Code
which provides for a forfeiture order
    where it has been established on a balance of probabilities that any property
    is the proceeds of crime
and that the designated offence was committed in
    relation to that property
(emphasis added).

[10]

Here,
    the designated offence for which Mr. Shearer was convicted did not relate to
    the $150 balance of the monies seized; it related only to the $20 buy money.
    Accordingly, Ms. Parker submits, if the balance of the funds are to be ordered
    forfeited to the Crown, the order must be made under the more general
    provisions of subsection 462.37(2) dealing with the proceeds of crime derived
    from other offences.  Under that provision, which is discretionary, the court
    must be satisfied, beyond a reasonable doubt, that the property is proceeds of
    crime.  She submits that the trial judge made no findings in this respect,
    that the record did not support such a finding here, and that the trial judge
    erred by reversing the onus and requiring the offender to show that the monies
    seized were not proceeds of crime.

[11]

We
    agree with these submissions as well.

[12]

There
    was little, if any, evidence concerning the source of the additional $150 in
    question other than the natural suspicions that arise from the presence of the
    other items and paraphernalia that were seized.  However, there were other
    submissions as well, namely that Mr. Shearers girlfriend had just received a
    baby bonus payment that day and the monies could have come from that source.  Section
    462.37(2) sets a high threshold  satisfaction beyond a reasonable doubt  where
    the property in question is said to constitute the proceeds of crime from
    offences other than the offence for which the offender is convicted and courts.
    Courts must be careful to ensure that threshold has been met before such an
    order is made.  Here, in the absence of any findings by the trial judge, we
    cannot say we are satisfied on this record that it was.

[13]

We
    note as well that the forfeiture order is made on the application of the
    Attorney General.  We see no basis for concluding that the onus is on the
    offender to establish that the property is not the proceeds of other crimes.  Yet
    it appears that is what the trial judge did.  In response to a submission by
    Mr. Shearers counsel that theres nothing to indicate that [the seized
    monies] flowed from trafficking in drugs, the trial judge said: Nor is there
    anything to indicate that it wasnt.  I cant accept that submission today.
    Respectfully, this reversed the onus.

Disposition

[14]

In
    the result, the order directing the Crown to pay the victim surcharge out of
    the monies seized upon Mr. Shearers arrest is set aside.  In its stead, there
    will be an order requiring Mr. Shearer to pay a victim surcharge of $200 in
    accordance with s. 737 of the
Criminal Code
.

[15]

The
    $20 in buy money seized is forfeited to the Crown pursuant to s. 462.37(1).
    The remaining $150 of the seized monies is to be returned to Mr. Shearer.

J.C. MacPherson J.A.

R. A. Blair J.A.

Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Siddiqi, 2015 ONCA 374

DATE: 20150526

DOCKET: C56804

Hoy A.C.J.O., Doherty and Benotto JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Sameen Siddiqi

Appellant

Marie Henein and Christine Mainville, for the appellant

Nick Devlin and Yael Pressman, for the respondent

Heard and released orally: May 20, 2015

On appeal from the conviction entered on January 14, 2013
    and the sentence imposed on October 11, 2013 by Justice Michelle Fuerst of the Superior
    Court of Justice.

ENDORSEMENT

[1]

Sameen Siddiqi was convicted of three counts of knowingly making a false
    statement in a loan application under s. 16(1)(a) of the
Canada Small
    Business Financing Act
, S.C. 1998, c. 36. The false statements were in the
    form of false invoices submitted in support of loan applications made to three
    separate banks. Mr. Siddiqi was sentenced to a conditional sentence of imprisonment
    of two years less one day and ordered to pay a fine in lieu of forfeiture in
    the amount of $495,049.02 under s. 462.37(3) of the
Criminal Code
,
    R.S.C. 1985, c. C-46.

[2]

He appeals his conviction and sentence on two grounds.

[3]

First, he argues the trial judges convictions are unreasonable. He
    submits that the circumstantial evidence admitted reasonable inferences other
    than guilt. The trial judge did not have sufficient evidence to conclude that:
    a) the invoices were false; b) Mr. Siddiqi wrote the false invoices; or c) Mr.
    Siddiqi wrote the false invoices in support of a loan application.

[4]

Second, Mr. Siddiqi argues the trial judge erred in imposing a fine in lieu
    of forfeiture for an amount which  he argues  is greater than the criminal
    proceeds the evidence demonstrated he personally benefitted from.

[5]

In our view, there is no merit to Mr. Siddiqis first ground of appeal. The
    circumstantial evidence taken as a whole eliminates all reasonable inferences
    but that the invoices were false and Mr. Siddiqi prepared them in support of the
    loan applications. That evidence included the three invoices themselves, which,
    as the trial judge explained, on examination are clearly false. The evidence
    also showed that the loan proceeds flowed into the bank accounts of two companies
    controlled by Mr. Siddiqi.

[6]

Nor is there any merit to his second ground of appeal. The loan proceeds
    were proceeds of crime. Mr. Siddiqi had possession and control of loan proceeds
    in excess of the amount which he was fined. He put most of those funds beyond
    reach by transferring them out of the country to a third party. That third
    party was not a co-conspirator before the court. The trial judge did not need
    to find that Mr. Siddiqi personally benefitted from the funds he transferred to
    the third party, on a dollar-for-dollar basis, to impose a fine in lieu of forfeiture
    that included the amount of the transferred funds. The concerns that Mr.
    Siddiqi raises about possible double recovery do not arise on the facts of this
    case.

[7]

The appeal is dismissed.

Alexandra
    Hoy A.C.J.O.

Doherty
    J.A.

M.L. Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Silva, 2015 ONCA 301

DATE: 20150504

DOCKET: C59179

Watt, Pepall and Benotto JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Graciela Silva

Appellant

Cameron R.B. Fiske, for the appellant

John McInnes, for the respondent

Heard and released orally: April 28, 2015

On appeal from the sentence imposed on July 28, 2014 by
    Justice Marvin A. Zuker of the Ontario Court of Justice, sitting without a jury.

ENDORSEMENT

[1]

Graciela Silva defrauded her employer of more than $300,000 over a
    period of almost 14 months. Her scheme involved the creation of 93 company
    cheques payable to herself. Each was deposited into her account at a bank. The
    proceeds of the fraud were transferred from her account or spent. There has
    been no recovery.

[2]

Prior to detection of the fraud, Ms. Silva consulted with a lawyer who
    advised her employer of the fraud. About two months later, she surrendered to
    police. About a year later, she pleaded guilty to a single count of fraud.

[3]

Ms. Silva appeals the carceral portion of the sentence imposed upon her,
    a term of ten months. She seeks a sentence of the equivalent or lesser length
    to be served in the community. She does not contest the propriety or quantum of
    two restitution orders made against her.

[4]

Ms. Silva recognizes that when legally available, conditional sentences
    are rarely imposed in cases involving a breach of trust. That said, she submits
    that this is a case in which a proper balancing of the relevant sentencing
    objectives, together with the mitigating and aggravating factors, warranted
    imposition of a conditional sentence.

[5]

We do not agree.

[6]

Taken as a whole, the reasons of the sentencing judge reflect a thorough
    understanding of the relevant sentencing objectives and a balanced
    consideration of the appropriate aggravating and mitigating factors. This
    offence involved a breach of trust. The conduct was not some momentary lapse of
    judgment, but rather a scheme  however unsophisticated  that remained
    undetected for about 14 months.

[7]

The sentencing judge was well aware of the fact that it was Ms. Silva
    who reported herself to her employer. He gave effect to her plea of guilty and
    imposed a sentence, which by any measure, was very lenient and would have been
    no different had the sentencing judge made an affirmative finding that the
    motivating factor was addiction, rather than greed, and had the judge provided
    the appellant with an opportunity to speak to sentence.

[8]

It is not suggested that had the right of allocution been afforded to
    the appellant, as it should have been, the substance of what she would have
    said would have differed from information already before and considered by the
    sentencing judge.

[9]

We see no error in principle in either the quantum of sentence imposed
    or the manner in which it should be served.

[10]

The
    appeal from sentence is dismissed.

David
    Watt J.A.

S.E.
    Pepall J.A.

M.L.
    Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
R. v. Vushaj, 2015 ONCA 388

DATE: 20150529

DOCKET: C53898

Laskin, MacFarland and Rouleau JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Leke Vushaj

Appellant

Frank Miller, for the appellant

Mabel Lai, for the respondent

Heard:  May 27, 2015

On appeal from the conviction entered on April 26, 2011
    by Justice Steven Rogin  of the Superior Court of Justice, sitting without a
    jury.

APPEAL BOOK ENDORSEMENT

[1]

The trial judge gave three reasons for rejecting the appellants
    evidence.  The appellant challenges the third of these reasons. In effect, the
    trial judge found that the appellant perjured himself before the
PSA
hearing. Yet that finding is not supported in the trial record.  The PS complaint
    was not filed as an exhibit and the transcript of the
PSA
hearing was
    not even before the court. The trial judge also appears to have found that the
    appellant blamed his sister-in-law for any inconsistencies, when there was no evidence
    that he did blame her, and the inconsistencies themselves were minor.

[2]

For these reasons the trial judge`s third reason for disbelieving the
    appellants evidence cannot stand. As the trial judge considered that his third
    reason greatly affected the appellants credibility, the Crown properly did
    not seek to apply the proviso.

[3]

The appeal is allowed, the convictions are set aside and a new trial is
    ordered.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Windibank, 2015 ONCA 387

DATE: 20150528

DOCKET: C58674

Laskin, MacFarland and Rouleau JJ.A.

BETWEEN

Her Majesty the Queen

Appellant

and

Todd Jason Windibank and Amy Lynn Windibank

Respondents

Lisa Csele, for the appellant

Frank Miller, for the respondents

Heard: May 27, 2015

On appeal from the acquittals entered on March 20, 2014
    by Justice Joseph Quinn of the Superior Court of Justice, sitting without a
    jury.

APPEAL BOOK ENDORSEMENT

[1]

The police executed a search warrant at the respondents home. They
    found 55.48 grams of cocaine, $11,460 of Canadian currency and $720 of U.S.
    currency, cell phones, a Smith and Wesson 9 mm handgun, two magazines,
    ammunitions and a debt list.

[2]

The trial judge ruled that the ITO did not provide objectively
    reasonable grounds justifying the warrant being issued. After a s. 24(2)
    analysis, the trial judge concluded that the seriousness of the breach together
    with the impact on the
Charter
protected interests of the accused were
    such that the evidence not be admitted.

[3]

We agree with the Crown that the trial judges phrasing of the objective
    component of the test in review of the sufficiency of an ITO and how that is to
    be weighed in the s. 24(2) analysis is problematic. This said, however, even
    accepting the trial judges finding that objective grounds were lacking, this
    alone, having regard to the trial judges finding of good faith does not tip
    the balance such that, on the
Grant
factors, the evidence should be
    excluded. The trial judge erred in his weighing of the first factor. The appeal
    is allowed, the acquittals set aside and a new trial is ordered.


WARNING

The President of the panel hearing this appeal directs
    that the following should be attached to the file:

An order restricting publication in this proceeding
    under ss. 486(1), (2), or (3) of the
Criminal Code
shall continue.
    These sections of the
Criminal Code
provide:

486.
(1)
Any proceedings against an accused shall be held
    in open court, but the presiding judge or justice may order the exclusion of
    all or any members of the public from the court room for all or part of the
    proceedings if the judge or justice is of the opinion that such an order is in
    the interest of public morals, the maintenance of order or the proper
    administration of justice or is necessary to prevent injury to international
    relations or national defence or national security.

(2)
For the purposes of subsection (1), the proper
    administration of justice includes ensuring that

(
a
)
the interests of witnesses under the age of
    eighteen years are safeguarded in all proceedings; and

(
b
)
justice system participants who are involved in
    the proceedings are protected.

(3)
If an accused
    is charged with an offence under section 151, 152, 153, 153.1, 155 or 159,
    subsection 160(2) or (3) or section 163.1, 170, 171, 171.1, 172, 172.1, 172.2,
    173, 212, 271, 272, 273, 279.01, 279.011, 279.02 or 279.03 and the prosecutor
    or the accused applies for an order under subsection (1), the judge or justice
    shall, if no such order is made, state, by reference to the circumstances of
    the case, the reason for not making an order. R.S., 1985, c. C-46, s. 486;
    R.S., 1985, c. 27 (1st Supp.), s. 203, c. 19 (3rd Supp.), s. 14, c. 23 (4th
    Supp.), s. 1; 1992, c. 1, s. 60(F), c. 21, s. 9;1993, c. 45, s. 7;1997, c. 16,
    s. 6;1999, c. 25, s. 2(Preamble); 2001, c. 32, s. 29, c. 41, ss. 16, 34,
    133;2002, c. 13, s. 20;2005, c. 32, s. 15, c. 43, ss. 4, 8;2010, c. 3, s.
    4;2012, c. 1, s. 28.

COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Wood, 2015 ONCA 337

DATE: 20150512

DOCKET: C55404

Simmons, Tulloch and Huscroft JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Royden Wood

Appellant

Bradley R. Burgess, for the appellant

J. Sandy Tse, for the respondent

Heard and released orally: April 7, 2015

On appeal from the conviction entered on November 1, 2011
    and the sentence imposed on April 27, 2012 by Justice D.R. McDermid of the
    Superior Court of Justice, sitting with a jury.

ENDORSEMENT

[1]

We reject the appellants submission that the application judge erred in
    failing to grant a change of venue.  The application judges reasons indicate
    he was fully aware of the publicity surrounding both the appellants previous
    trial and the current charges.  He concluded that the appellant had failed to
    meet the threshold of demonstrating a reasonable likelihood of partiality or
    prejudice that could not be overcome by the usual trial safeguards. We see no
    basis on which to interfere with this conclusion.

[2]

We see no merit in the appellants claim that the jury charge was
    unbalanced because of the number of times the trial judge referred to the
    requirements for vitiating consent.  The trial judge set out the defence
    position that the sexual assaults did not happen on numerous occasions.  He was
    required to explain the requirements for vitiating consent in setting out the
    essential elements of each offence as against each complainant. These
    explanations did not make the jury charge unbalanced.

[3]

Similarly, we reject the appellants assertion that the verdict was
    unreasonable because of the striking similarity of the evidence of some of the
    complainants and the fact that the jury made findings of guilt in relation to
    three of them but acquitted in relation to two others.  In our view, the
    verdicts are reconcilable.  There were distinct features of the evidence of
    each complainant that may have led the jury to accept or reject the evidence of
    each of them.

[4]

Finally, we are not persuaded that the trial judge erred in imposing a
    total sentence of six years imprisonment.  The offences of which the appellant
    was convicted involved acts of sexual intercourse on two of the victims and
    sexual abuse of a third over a significant period of time and in the context of
    a pastor-parishioner relationship.  In our view, the trial judge made no error
    in identifying denunciation and deterrence as the primary sentencing principles
    and in giving secondary importance to rehabilitation.  Further, in our view, the
    trial judge was alive to the mitigating factors that were present. We see no
    error in principle and no other basis on which to interfere with the sentence
    imposed.

[5]

Accordingly, the conviction appeal is dismissed.  Leave to appeal
    sentence is granted, but the sentence appeal is dismissed.

Janet Simmons
    J.A.

M. Tulloch
    J.A.

Grant Huscroft
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Rea v.
    Wildeboer, 2015 ONCA 373

DATE: 20150526

DOCKET: C59168

Weiler, Sharpe and Blair JJ.A.

BETWEEN

Natale Rea, Rea Holdings Inc. and Edward Sorbara

Plaintiffs (Appellants)

and

Robert Wildeboer, Nick Orlando, Fred Jaekel,
    Armando Pagliari, Suleiman Rashid, R.A.M. Contracting Limited, Robert Marzilli,
1530309 Ontario
    Limited, Martin Pathak
and Martinrea International Inc.

Defendants (
Respondents
)

AND BETWEEN

Robert Wildeboer, Armando Pagliari, Suleiman
    Rashid and Martinrea International Inc.

Plaintiffs by Counterclaim

and

Natale Rea and Rea Holdings Inc.

Defendants to the Counterclaim

Jeremy C. Millard and Holly V.A. Cunliffe, for the appellants

Don H. Jack and Courtney Raphael, for the respondents

Heard: January 9, 2015

On appeal from the judgment of Justice T. McEwen of the Superior
    Court of Justice, dated June 30, 2014.

R.A. Blair J.A.:

[1]

Oppression
    remedy or derivative action?  What is the nature of these proceedings?

[2]

The
    appellants have asserted an oppression claim under s. 248 of the
Business
    Corporations Act
alleging misappropriation of funds from Martinrea International
    Inc. and seeking to recover those funds for the corporation.  They submit that
    they are entitled to proceed on that basis, arguing that the somewhat murky
    line between oppression remedies and derivative actions has all but
    disappeared.  The respondents argue, on the other hand, that the claim is
    solely Martinreas claim and that it must be pursued as a derivative action on
    behalf of the corporation, with leave of the court.

[3]

The
    motion judge agreed with the respondents and struck the claim as against them.
    In the context of this claim as against these respondents, I too agree, and for
    the following reasons would dismiss the appeal.

Background and Facts

[4]

Martinea
    is a successful Canadian manufacturer of auto parts.  It is a widely-held
    public company, trading on the Toronto Stock Exchange, with approximately 84.5
    million outstanding shares.

[5]

The
    appellant Natale Rea and the defendant Fred Jaekel are the companys principal founders.
    They became directors, along with the defendants Wildeboer, Orland and Rashid.
    The defendant Pagliari was a Martinrea executive, but not a board member.  All
    of these defendants are referred to in the appellants submissions as the
    Insider Defendants.

[6]

Between
    2002 (when the company was founded) and 2012, Mr. Rea and his holding
    corporation, Rea Holdings Inc., were significant minority shareholders of the
    company  holding between 12% and 17% of its shares.  After the alleged
    improper transactions discussed below were discovered in 2011, and not dealt
    with to Mr. Reas satisfaction, he and Rea Holdings sold their 9,910,009 common
    shares in 2012.  Subsequently  two weeks before the motion to strike was
    heard, and after these proceedings had been commenced  they re-acquired
    approximately 0.1%, or 100,000, of Martinreas outstanding shares.

[7]

In
    substance, the statement of claim alleges that the Insider Defendants undertook
    a series of transactions and other activities that involved a breach of their
    fiduciary and other duties to Martinrea and resulted in the misappropriation of
    large amounts of Martinreas corporate funds  allegedly $50 to $100 million
    for their own personal benefit (the Improper Transactions).  The action seeks
    the recovery of these funds for Martinrea.

[8]

The
    defendants 1530309 Ontario Limited (sometimes known as IM) and Martin Pathak
    are the moving parties and the respondents on the appeal.  Mr. Pathak is the
    principal of IM.  Neither he nor IM is a shareholder of Martinrea and Mr.
    Pathak has never been a director or officer of Martinrae.  IM is a supplier of
    used auto parts.

[9]

The
    respondents are implicated in the action because they are said to have aided
    and abetted the Insider Defendants in two particular aspects of the Improper
    Transactions.  It is alleged: (i) that they sold used equipment to Martinrea
    over a 10-year period at prices well over market value and on terms unfair to
    Martinrea, and as a result of which some of the Insider Defendants received
    substantial kickbacks; and (ii) that a company controlled by them purchased a
    parcel of land from Martinrea in 2009 without an appropriate sale process and
    on terms unfair to Martinrea.

[10]

In 2011, Mr. Rea
    became aware of some of the alleged Improper Transactions and brought them to
    the attention of the defendant Wildeboer (the Executive Chairman of Martinrea)
    and the defendant Rashid (head of the audit committee).  Rashid was asked to,
    and did, prepare a report for the board of directors.  The appellants say that
    the report was a complete whitewash.  When Wildeboer protected Orlando (the
    President and CEO) by refusing to accept his resignation, the differences came
    to a head. In June 2012, Mr. Rea stepped down as Vice-Chairman and a director
    of Martinrea.  He and Rea Holdings sold their shares.

[11]

In September 2013,
    this action was commenced.

Analysis

[12]

The general issue raised
    on this appeal is whether a complainant may assert, by way of an oppression
    remedy proceeding, a claim that is by nature a derivative action for a wrong
    done solely to the corporation, thereby circumventing the requirement to obtain
    leave to commence a derivative action.

[13]

Some understanding of
    how and why these two forms of statutory redress evolved will help in
    addressing this issue.

History

[14]

At common law,
    minority shareholders in corporations had very little protection in the face of
    conduct by the majority (or by directors controlled by the majority) that
    negatively affected either the corporation itself or their interests as
    minority shareholders.  This handicap was due to two well-entrenched common law
    principles of corporate law: the notion of a corporate personality and the
    indoor management rule.  Both of these principles can be traced back to a
    decision of now almost mythical stature  that of Vice-Chancellor Wigram in
Foss
    v. Harbottle
(1843), 67 E.R.189, 2 Hare 461 (Eng. V.C.).

[15]

In law, a corporation
    is a legal entity distinct from its shareholders.  It followed from this that
    shareholders were precluded from bringing their own action in respect of a
    wrong done to the corporation.  Except as modified by the derivative action,
    the oppression remedy, and winding-up proceedings, this remains a governing
    principle in Canadian corporate law: see
Hercules Management Ltd. v. Ernst
    & Young
, [1997] 2 S.C.R. 165, at para. 59;
Meditrust Healthcare
    Inc. v. Shoppers Drug Mart
(2002), 61 O.R. (3d) 786 (C.A.).  As Laskin
    J.A. put it, in
Meditrust
, at paras. 12-14:

The rule in
Foss v. Harbottle
provides simply that a
    shareholder of a corporation  even a controlling shareholder or the sole
    shareholder  does not have a personal cause of action for a wrong done to the
    corporation. The rule respects a basic principle of corporate law: a
    corporation has a legal existence separate from that of its shareholders. See
Salomon
    v. Salomon & Co.
(1896), [1897] A.C. 22, 66 L.J. Ch. 35 (U.K. H.L.) A
    shareholder cannot be sued for the liabilities of the corporation and, equally,
    a shareholder cannot sue for the losses suffered by the corporation.

The rule in
Foss v. Harbottle
also avoids multiple
    lawsuits. Indeed, without the rule, a shareholder would always be able to sue
    for harm to the corporation because any harm to the corporation indirectly
    harms the shareholders.

Foss v. Harbottle
was decided nearly 160 years ago but
    its continuing validity in Canada has recently been affirmed by the Supreme
    Court of Canada in Hercules
Management Ltd. v. Ernst & Young
,
    [1997] 2 S.C.R. 165 (S.C.C.) and by this court in
Martin v. Goldfarb
(1998),
    163 D.L.R. (4th) 639 (Ont. C.A.).

[16]

The companion indoor
    management rule has also played a significant role in restricting minority
    shareholders rights to redress.  At common law, if an act that was claimed to
    be wrongful could be ratified by the majority at a general meeting of shareholders,
    neither the corporation nor an individual shareholder could sue to redress the
    wrong.  The rationale for this was that courts were reluctant to interfere in
    the internal management affairs of the corporation.

[17]

It took over a century
    for legislative reforms to be put in place to temper the restrictive effect of
    these principles on minority shareholder rights.  In the latter part of the 20
th
century, however, the two statutory forms of relief that are at the heart of
    this appeal  the derivative action and the oppression remedy  were created
    for this purpose.
[1]
It is noteworthy that they approached the problem in two different, although
    potentially overlapping, ways.

[18]

The derivative action
    was designed to counteract the impact of
Foss v. Harbottle
by providing
    a complainant  broadly defined to include more than minority shareholders
[2]
 with the right to apply to the court for leave to bring an action in the
    name of or on behalf of a corporation  for the purpose of prosecuting,
    defending or discontinuing the action on behalf of the body corporate:
Business
    Corporations Act
, R.S.O. 1990, c. B.16, s. 246 (OBCA).  It is an action
    for corporate relief, in the sense that the goal is to recover for wrongs
    done to the company itself.  As Professor Welling has colourfully put it in his
    text,
Corporate Law in Canada: The Governing Principles
, 3
rd
ed. (Mudgeeraba: Scribblers Publishing, 2006), at p. 509, [a] statutory
    representative action is the minority shareholders sword to the majoritys twin
    shields of corporate personality and majority rule.

[19]

The oppression remedy,
    on the other hand, is designed to counteract the impact of
Foss v.
    Harbottle
by providing a complainant  the same definition  with the
    right to apply to the court, without obtaining leave, in order to recover for
    wrongs done to the individual complainant by the company or as a result of the
    affairs of the company being conducted in a manner that is oppressive or
    unfairly prejudicial to or that unfairly disregards the interests of the complainant.
    The oppression remedy is a personal claim:
Ford Motor Co. of Canada v.
    Ontario (Municipal Employees Retirement Board)
(2006), 79 O.R. (3d) 81
    (C.A.), at para. 112, leave to appeal refused, [2006] S.C.C.A. No. 77;
Hoet
    v. Vogel
, [1995] B.C.J. No. 621 (S.C.), at paras. 18-19.

[20]

These two forms of
    redress frequently intersect, as might be expected.  A wrongful act may be
    harmful to both the corporation and the personal interests of a complainant
    and, as a result, there has been considerable debate in the authorities and
    amongst legal commentators about the nature and utility of the distinction
    between the two.  In the words of one commentator, the distinction between
    derivative actions and oppression remedy claims remains murky: Markus Koehnen,
Oppression and Related Remedies
(Toronto: Thomson Canada Limited, 2004),
    at p. 443.

[21]

Yet the statutory
    distinctions remain in effect.

The
    Parties Positions

[22]

The appellants submit
    that the distinction between the remedies has been significantly moderated and
    that a complainant is entitled to pursue an oppression remedy even where the
    wrong in question is a wrong in respect of the corporation, provided that the
    shareholders reasonable expectations have been violated by means of conduct
    caught by the terms oppression, unfair prejudice or unfair disregard.
    They rely on the decision of the Supreme Court of Canada in
Re BCE Inc.
,
    2008 SCC 69, [2008] 3 S.C.R. 560, at para. 68, for this proposition.  The
    rationale, they say, is that the oppression remedy provisions provide
    stakeholders with a personal, statutory right not to have their reasonable
    expectations violated in this manner.

[23]

The appellants stress that
    in
Malata Group (HK) Ltd. v. Jung
, 2008 ONCA 111, 89 O.R. (3d) 36, and
Jabalee v. Abalmark Inc.
, [1996] O.J. No. 2609 (C.A.), this Court
    acknowledged that there could be a degree of overlap between claims that could
    be made out as a derivative action and those that could fall under the
    oppression remedy, and that the two are not mutually exclusive:
Malata
,
    at para 30;
Jabalee
, at para. 5.

[24]

The respondents
    submit, on the other hand, that the distinction between the two remedies
    remains, and for good reason.  They accept  as did the motion judge  that
    there has been some relaxation in the approach to the commencement of
    oppression remedy actions in cases where the factual circumstances create an
    overlap between the two remedies, particularly in the case of small closely
    held corporations.  But they contend that the distinction remains important
    because of the leave requirement for derivative actions  in the case of
    publicly-held corporations such as Martinrea.

[25]

In such cases, they argue,
    the leave requirement fulfills its important threefold purpose of (i)
    preventing strike suits, (ii) preventing meritless suits, and (iii) avoiding a
    multiplicity of proceedings  all of which may lead to the corporation
    incurring significant and unwarranted costs, concerns that are less acute for closely-held
    corporations.  Relying on
Malata
themselves, the respondents point to
    the importance Armstrong J.A. placed in that case on the fact that Malata was a
    closely held corporation (para. 38) and to his observation, at para. 39, that:

[i]n disputes involving closely held corporations with
    relatively few shareholders  there is less reason to require the plaintiff to
    seek leave of the court.  The small number of shareholders minimizes the risk
    of frivolous lawsuits against the corporation, thus weakening the main
    rationale for requiring a claim to proceed as a derivative action.

Discussion

[26]

I accept that the
    derivative action and the oppression remedy are not mutually exclusive.  Cases
    like
Malata
and
Jabalee
make it clear that there are
    circumstances where the factual underpinning will give rise to both types of
    redress and in which a complainant will nonetheless be entitled to proceed by
    way of oppression remedy.  Other examples include:
Ontario (Securities Commission)
    v. McLaughlin
, [1987] O.J. No 1247 (H.C.J.);
Deluce Holdings Inc. v.
    Air Canada
(1992), 12 O.R. (3d) 131 (Gen. Div.);
C.I. Covington Fund
    Inc. v. White
, [2000] O.J. No. 4589 (S.C.), affd [2001] O.J. No. 3918
    (Div. Ct.);
Waxman v. Waxman
, [2004] O.J. No. 1765 (C.A.), at para.
    526, leave to appeal refused, [2004] S.C.C.A. No. 291.

[27]

However, I agree with
    the respondents that claims must be pursued by way of a derivative action after
    obtaining leave of the court where, as here, the claim asserted seeks to
    recover solely for wrongs done to a public corporation, the thrust of the
    relief sought is solely for the benefit of that corporation, and there is no
    allegation that the complainants individualized personal interests have been
    affected by the wrongful conduct.

[28]

It is true that the
    jurisprudence is inconsistent about how to treat cases where there is an
    overlap and that there has been considerable discussion amongst legal
    commentators about this and whether the distinction should be maintained.  See,
    for example, the following texts and articles and the jurisprudence referred to
    therein: Koehnen, at pp. 440-448
;
Jeffrey G. MacIntosh, The
    Oppression Remedy: Personal or Derivative? (1991) 70 Can. Bar. Rev. 29; Edward
    M. Iacobucci and Kevin E. Davis, Reconciling Derivative Claims and the
    Oppression Remedy (2000) 12 S.C.L.R. 87.

[29]

While this debate is
    interesting, it is not necessary to resolve it here.  On my reading of the
    authorities, in the cases where an oppression claim has been permitted to proceed
    even though the wrongs asserted were wrongs to the corporation, those same
    wrongful acts have, for the most part, also directly affected the complainant
    in a manner that was different from the indirect effect of the conduct on
    similarly placed complainants. And most, if not all, involve small closely-held
    corporations not public companies.

[30]

Waxman
is a
    good example. The company was a family scrap metal business.  Some of the acts
    complained of, including the wrongful distribution of bonuses, could have been
    the subject of a derivative action, but it was not disputed on appeal that the
    complainant was personally aggrieved by the distribution and that it was
    done at the expense of his interest in the company: para. 526.

[31]

Malata
 a
    case involving another closely-held company  is also a good example.  The
    misappropriation of funds in that case affected not only the company (and therefore
    the indirect interests of all shareholders), but the direct interests of the
    minority shareholder as a creditor of the company.

[32]

Here, however, on
    the facts pleaded, there is no overlap between the derivative action and the
    oppression remedy (once one goes beyond the boiler plate repetition of the
    statutory language from the OBCA describing the oppression remedy).  The
    appellants are not asserting that their personal interests as shareholders have
    been adversely affected in any way other than the type of harm that has been suffered
    by all shareholders as a collectivity.  Mr. Rea  the only director plaintiff
    does not plead that the Improper Transactions have impacted his interest
qua
director.

[33]

Since the creation of
    the oppression remedy, courts have taken a broad and flexible approach to its
    application, in keeping with the broad and flexible form of relief it is
    intended to provide.  However, the appellants open-ended approach to the
    oppression remedy in circumstances where the facts support a derivative action
    on behalf of the corporation misses a significant point: the impugned conduct
    must harm the complainant personally, not just the body corporate,
i.e.
,
    the collectivity of shareholders as a whole.

[34]

The oppression remedy
    is not available  as the appellants contend  simply because a complainant asserts
    a reasonable expectation (for example, that directors will conduct themselves
    with honesty and probity and in the best interests of the corporation) and the
    evidence supports that the reasonable expectation has been violated by conduct
    falling within the terms oppression, unfair prejudice or unfair
    disregard.  The impugned conduct must be oppressive of or unfairly
    prejudicial to, or unfairly disregard
the interests of the complainant
:
    OBCA, s. 248(2).  No such conduct is pled here.

[35]

That the harm must
    impact the interests of the complainant personally  giving rise to a personal
    action  and not simply the complainants interests as a part of the
    collectivity of stakeholders as a whole - is consistent with the reforms put in
    place to attenuate the rigours of the rule in
Foss v. Harbottle
.  The legislative
    response was to create
two
remedies, with two different rationales and
    two separate statutory foundations, not just one: a corporate remedy, and a
    personal or individual remedy.

[36]

The derivative action
    provides aggrieved minority stakeholders with the ability to pursue a cause of
    action on behalf of the corporation to redress wrongs done in respect of the
    corporation, provided leave is obtained from the court to do so.  As Professor
    MacIntosh has observed:

The corporation will be injured when all shareholders are
    affected equally, with none experiencing any special harm. By contrast, in a
    personal (or direct) action, the harm has a differential impact on
    shareholders, whether the difference arises amongst members of different
    classes of shareholders or as between members of a single class.  It has also
    been said that in a derivative action, the injury to shareholders is only
indirect
,
    that is, it arises only because the corporation is injured, and not otherwise.
    [See, for example,
Farnham v. Fingold
, [1973] 2 O.R. 132 (C.A.);
Goldex
    Mines Ltd. v. Revill
(1974), 7 O.R. (2d) 216 (C.A.)].

[37]

The requirements for
    leave are straightforward and are set out in s. 246(2) of the OBCA: the
    directors must be given 15 days notice of the intention to bring the
    application, and the court must be satisfied: (i) that the directors will not
    pursue the claim; (ii) that the complainant is acting in good faith; and (iii)
    that it appears to be in the best interests of the corporation that the action
    be brought. In this way the legislative goals of avoiding strike suits,
    meritless actions and a multiplicity of proceedings against the corporation
    and the potentially unwarranted costs that accompany them  are strengthened.  Although
    they have been the subject of some academic criticism,
[3]
these remain valid legislative objectives and concerns, in my view, particularly
    in the context of actions against publicly-traded corporations.

[38]

Indeed, in para. 28 of
    their statement of claim the appellants themselves flagged Martinreas
    potential exposure to legal proceedings by each person or company that
    acquired or disposed of shares of Martinrea during the period in which the
    Improper Transactions took place.  A judgment in a derivative action, however,
    if proceeded with and ultimately successful, will be binding on all
    shareholders.

[39]

Much of the debate
    here focussed on
Malata
 this Courts most recent consideration of
    the relationship between derivative actions and the oppression remedy.  Does it
    stand for the proposition, as the appellants assert, that oppression remedy
    claims and derivative action claims may be collapsed into an oppression remedy
    claim?  Or, as the respondents say, does it stand for the proposition that the
    remedies may not be conflated when it is a public corporation that is involved?
    In my view,
Malata
stands for neither of these broad propositions and,
    in any event, is distinguishable from the present appeal.

[40]

Like this case,
Malata
involved the alleged misappropriation of funds from the corporation
    there, by a director, officer and major shareholder. Unlike this case, however,
Malata
involved a small closely-held corporation.  The aggrieved
    minority shareholder was one of only three shareholders of the corporation and,
    significantly, was also a major creditor of the corporation.  On those facts,
    there was clearly an overlap and coexistence between the wrong caused by the
    alleged misappropriation to the corporate collectivity and the wrong caused by
    it to the minority shareholder in its capacity as creditor because the
    misappropriation threatened the corporations ability to pay its debt to the
    minority shareholder/creditor.  Martinrea, however, is a large, widely-held
    public corporation and no type of personal wrong is evident.

[41]

To be sure, there are bald
    allegations in the statement of claim that the Improper Transactions caused
    significant damage to [Martinrea]
and its shareholders
 (para. 28,
    emphasis added) and that the defendants have acted and continue to act in a
    manner that is oppressive, unfairly prejudicial to, and that unfairly
    disregards
the interests of the Plaintiffs and other Martinrea shareholders

    (para. 33, emphasis added).  However, there is no particularized allegation of
    any wrong done to the interests of the plaintiffs themselves,
qua
shareholders
    or otherwise, as opposed to a wrong affecting the corporate body,
i.e.
,
    the collectivity of shareholders as a whole.

[42]

In their written and
    oral arguments, although not in their pleadings, the appellants make three
    submissions in an attempt to particularize the alleged harm to them
    individually, and thus bring the claim within the rubric of an oppression
    remedy.  They assert first that the alleged misappropriations precluded [them]
    from managing [their] investment[s] or exercising [their] voting rights in an
    informed manner; secondly, that the failure to provide adequate disclosure of
    material information to shareholders has been recognized as oppressive conduct;
    and thirdly, that by reason of the director defendants lack of candour with
    their fellow directors, Mr. Rea lacked the full information needed to
    genuinely exercise his role in governing Martinrea.  None of these allegations
    is specifically pleaded and none suffices to permit the appellants to cross the
    line  however murky that line may be  between the derivative reality of
    this action and its proposed oppression remedy illusion, in my opinion.

[43]

[M]anaging [their]
    investments and exercising [their] voting rights in this context means
    exercising their role as shareholders in supervising management.  The Supreme
    Court of Canada has held that claims in respect of losses stemming from an
    alleged inability to oversee or supervise management are really derivative and
    not personal in nature:
Hercules Management
, at para. 62.

[44]

It may be that, in
    some circumstances, the failure to provide proper disclosure of material
    information to shareholders can constitute oppressive conduct and, similarly,
    that in some circumstances wrongfully withholding information from a director
    may be oppressive to the directors ability to carry out his or her role in
    that capacity.  However, no such pleading is asserted here.  To the extent that
    the preparation of inaccurate financial statements and the lack of candour
vis-à-vis
fellow directors are asserted as facts in the statement of claim, they are
    pleaded as examples of the Insider Defendants breach of fiduciary duty to the corporation,
    not as something that impacts the interests of the appellants in any individual
    manner other than what might affect the collectivity of the shareholders.  Mr.
    Rea is the only plaintiff who was a director and he asserts no claim that his
    interests have been affected in that capacity.   As pleaded, these wrongs are
    relevant as tools used to perpetrate the fraud against Martinrea, not as acts
    that have any particularized impact on any of the plaintiffs individually.

[45]

At its heart, the
    appellants allegation involves the misappropriation of corporate property by
    the Insider Defendants, assisted in some cases by the respondents here (IM and
    Pashak) and others.  The substantive remedy claimed is the disgorgement of the
    ill-gotten gains back to Martinrea.

[46]

The misappropriation
    of corporate property was effected through the alleged Improper Transactions
    which in essence consisted of: (i) payment to the Insider Defendants of secret
    kickbacks and improper commissions in relation to services provided and
    equipment sold to Martinrea, as a result, at inflated prices; (ii) payments by
    Martinrea to third parties for construction, renovation and other services
    (including in one case the settlement of potential legal exposure) for the personal
    benefit of the Insider Defendants; and (iii) in the case of the respondents IM
    and Pashak, the purchase of used equipment by Martinrea at inflated prices
    (feeding kickbacks to the Insider Defendants) and the purchase of real estate
    in Kitchener by Martinrea from a related Pashak company, on terms unfavourable
    to Martinrea.  All of these allegations, if proved, will establish losses
    sustained by the corporation to its financial bottom line
i.e.
, to
    the collectivity of shareholders as a whole  and not to any particular
    shareholder, including the appellants, individually.

[47]

For these reasons, I
    do not accept that the wrongs as pleaded in the statement of claim are wrongs
    other than wrongs done to the corporation that form the basis of a derivative
    action.  As noted earlier, I do not see this as a case involving overlap
    between the oppression remedy and the derivative action.

Conclusion and Disposition

[48]

I recognize that a
    party seeking to strike out a pleading under Rule 21.01(1)(b) must demonstrate
    that it is plain and obvious the claim discloses no reasonable cause of
    action.  For these purposes, the facts as pleaded must be accepted as true, the
    pleading should be given a large and liberal interpretation and courts should
    not, at this stage of the proceedings, strike out claims that are novel or
    dispose of matters of law that are not fully settled in the jurisprudence:  see
Hunt v. Carey Canada Inc.
, [1990] 2 S.C.R. 959, at pp. 971, 973 and
    990-991;
Falloncrest Financial Corp. v. Ontario
(1995), 27 O.R. (3d) 1
    (C.A.), at pp. 5-6.

[49]

For the reasons
    outlined above, I am satisfied that the appellants statement of claim does not
    disclose a reasonable cause of action based upon the oppression remedy.  Nor do
    I think it is a novel or unsettled principle of law that wrongs done solely to
    a corporation, for which remedies are sought on behalf of the corporation, give
    rise to a derivative action and require leave of the court before an action can
    be commenced to assert those claims.  Where the facts may give rise to both a
    corporate claim and a personal oppression remedy claim  as
Malata
and the other cases referred to above illustrate  the question of whether an
    oppression remedy proceeding is available will have to be sorted out on a case
    by case basis.  This task does not arise on the facts as pleaded here, however.

[50]

Accordingly, I would
    dismiss the appeal.

[51]

The respondents shall be
    entitled to their costs of the appeal, fixed in the amount of $20,000 inclusive
    of disbursements and all applicable taxes, as agreed.

Released: K.M.W.  May 26, 2015

R.A. Blair J.A.

I agree K.W. Weiler
    J.A.

I agree Robert J.
    Sharpe J.A.

[1]
In Canada, derivative action relief is embodied in s. 239 of the
Canada Business Corporations Act
, R.S.C.
    1985, c. C-44 (CBCA), and in various provincial business corporation
    statutes, such as the
Business
    Corporations Act
, R.S.O. 1990, c. B.16, s. 245.  The oppression remedy
    is provided for in s. 241 of the CBCA and s. 248 of the OBCA.

[2]
Section 245 of the OBCA, for example, defines a complainant to mean:

a)

a
    registered holder or beneficial owner, and a former registered holder or
    beneficial owner, of a security of a corporation or any of its affiliates,

b)

a director
    or an officer or a former director or officer of a corporation or any of its
    affiliates,

c)

any other
    person who, in the discretion of the court, is a proper person to make an
    application under this Part.

Security is earlier defined in s. 1 to mean a share
    or a debt obligation (e.g., a bond)

[3]
See, for example, Koehnen, at pp. 454; Iacobucci and Davis, at pp. 90-110
.