COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Thomas, 2018 ONCA 694

DATE: 20180823

DOCKET: C61172

Doherty, Pepall and Nordheimer JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

David Thomas

Appellant

Najma Jamaldin and Paul Genua, for the appellant

Alex Alvaro, for the respondent

Heard: June 7, 2018

On appeal from the
    conviction entered on March 13, 2015 and sentence imposed on July 15, 2015 by Justice
    David A. Broad of the Superior Court of Justice, sitting with a jury.

Nordheimer J.A.:

[1]

The appellant was convicted of second degree murder after a ten week
    trial.  He was sentenced to life imprisonment with no eligibility for parole
    for a period of 16 years.  He appeals both his conviction and his sentence.

[2]

Multiple grounds of appeal are advanced.  Unfortunately, they are not
    identified with the clarity one would expect.  As best as I can determine, the
    grounds are:

(i)

the admissibility of two statements made by the appellant;

(ii)

the admissibility of after the fact conduct evidence;

(iii)

the admissibility of prior discreditable conduct evidence;

(iv)

the admissibility of evidence improperly seized and held pursuant to a
    search warrant;

(v)

the asserted impropriety of Crown counsels closing address;

(vi)

errors in the jury charge; and

(vii)

unreasonable
    verdict.

Errors are also alleged with respect to the sentence
    imposed.

[3]

In my view, the most serious challenge relates to certain aspects of the
    jury charge.  I will therefore begin my consideration of the appeal with that
    challenge.  As will become apparent, once that challenge is addressed, the
    other grounds of appeal can be dealt with more succinctly.

I:

Background

The case for the prosecution

[4]

The appellant was charged with the second degree murder of his common
    law spouse, D.B.  The murder was alleged to have occurred in the early morning
    hours on January 1, 2007 in Waterloo, Ontario.

[5]

It was not until April 17, 2007, that a man, walking his dog, discovered
    D.B.s badly decomposed, unclothed body in an area that was part of the flood
    plain of the Grand River in southeast Kitchener, Ontario.  The Crowns theory
    was that the appellant had found D.B. at a bar with another man on New Years
    Eve.  Motivated by hostility, anger, jealousy, and feelings of betrayal, he
    killed her and then drove her body in his car and dumped it in the river.  D.B.
    had not been seen by any known person after the early morning hours of January
    1, 2007.

[6]

D.B. was an alcoholic who had a history of disappearing as a result of
    her drinking.  She would often go on benders for three to five days.  Consequently,
    D.B. was not reported as missing until January 15, 2007.  The police commenced
    an investigation.  It appears that the police quickly focussed on the appellant
    as a person of interest in their investigation.

[7]

On January 24, 2007, the police executed a search warrant at the appellants
    apartment.  He was not home.  While the search took place, the police conducted
    surveillance on the appellant.  They observed the appellant drive toward his
    apartment building, but when he saw the police presence, he drove instead to
    Sunnydale Place, a little more than a kilometre away.  He parked his vehicle in
    a parking spot behind some townhouses and walked away.  The appellant
    eventually returned to his vehicle more than three hours later.

[8]

On January 31, 2007, the police took possession of the appellants
    vehicle. They found transfer blood stains on the front passenger side of the
    vehicle.  Blood stains were also found on the floorboard and running board
    beneath the right passenger door.  Areas within the passenger compartment
    tested positive for human blood, even though it was not visible.  These blood
    stains had a wipe appearance to them, suggesting that there had been an
    attempt to clean up the blood.  It was agreed at trial that the blood found was
    that of D.B., as was a hair embedded in a blood stain on the inside plastic
    trim.

[9]

A forensic pathologist conducted an autopsy.  He was unable to determine
    a cause of death because of the advanced state of decomposition.  The forensic
    pathologist concluded that the body had been submerged in water for at least a
    month.  The pathologist could not say when D.B. had died, but the condition of
    the body was consistent with her disappearance on New Years Day.  There were
    no fractures of the bones in her neck, but the forensic pathologist gave
    evidence that, in his experience, about 70% of manual strangulations result in
    no bone fractures.  Thus, he could not rule out application of force to the
    neck.  There was no evidence of self-inflicted injuries.  Nevertheless, the
    pathologist was unable to rule out suicide as the manner of death.  The forensic
    pathologist also could not rule out drowning, because D.B. was found near the
    water.  The forensic pathologist acknowledged that D.B. could have entered the
    water by herself.

[10]

The
    forensic pathologist also observed many rib fractures.  Haemorrhaging was
    associated with the rib fractures on her left side.  Those fractures likely
    occurred peri-mortem  around the time of death  either before, at the time,
    or shortly after death.  The fractures could have been caused by the
    application of force from a person but they also could have been caused by
    contact with objects.  There were also rib fractures on the right side but no
    haemorrhaging was associated with those fractures.  They likely occurred
    post-mortem, that is, after death.

[11]

The
    appellant was not arrested until July 13, 2011.  At the time of his arrest, he
    told the police that the last time he saw D.B. was early on New Years Day 2007.
     He said that they left together after spending time at a bar.  On their way
    home, they had an argument.  D.B. walked back towards the bar.  The appellant
    went home.  He said he never saw D.B. again.  The appellant denied that D.B.
    went back to his apartment with him.

[12]

During
    the trial, the jury heard a great deal of evidence regarding the relationship
    between the appellant and D.B., including many instances of violence by the
    appellant towards her.  I summarize that evidence as follows:

1.

A diary along with letters written by D.B.  The diary entries described
    repeated physical and verbal abuse that D.B. had suffered at the hands of the appellant.
     In the letters, D.B. discussed the appellants drinking, the fact that he was
    often angry, and that he beat her.  D.B. referred to frequent death threats
    from the appellant, including his threat to kill her and dump her body out in
    the woods.

2.

An admission in 2005 to a hospital in Kitchener.  D.B.s blood ethanol
    level, approximately two hours after admission, was described as dangerously
    high.  D.B. told hospital staff that the appellant sat on her chest and
    strangled her, telling her he wanted her dead.  She said he repeatedly kicked
    her in her right side and punched her in the back.  He gave her a back hand
    across the face.  D.B. had suffered a fractured nasal bone and eye contusion.  She
    had bruises on her neck.  D.B. reported having previously been assaulted by the
    appellant.

3.

On November 9, 2005, the appellant entered a guilty plea to a count of
    assault causing bodily harm relating to D.B.  He accepted as substantially
    correct the facts read into the record.  Those facts included an allegation that
    he choked D.B. to unconsciousness, while yelling I want you dead, I want you
    dead, I want you dead.

4.

A male witness, D.H., who met D.B. in September or October 2005, gave
    evidence that D.B. had a black eye.  Her nose was swollen.  D.B. explained to D.H.
    that her boyfriend (the appellant) had hit her.

5.

Evidence from the appellants probation officer after the November 2005
    conviction.  The appellant told the probation officer that his relationship
    with D.B. started well but became rocky after she had an affair.  In describing
    his offence, the appellant acknowledged he had lost control.  The probation
    officer also noted that the appellant continued to blame D.B. and spoke of her infidelity,
    betrayals and lying.

6.

In the Spring of 2006, N.C. (who is female) met D.B. when they worked
    together.  N.C. testified that every time she saw D.B., she noticed some type
    of bruising on her. One day after they no longer worked together, D.B. unexpectedly
    came to N.C.s door, crying and shaking.  D.B. told N.C. that the appellant had
    been hitting her again.  D.B. was bleeding from her nose and from a small cut
    to her lip.  The lower part of her face and her shirt were covered in blood.  The
    left side of her face was red from what appeared to be a slap.  Her neck had
    red marks on both sides, shaped like fingers, as if someone had grabbed her. N.C.
    said that D.B. said that the appellant had tried to choke her.

7.

D.B. stayed with N.C. for a period of time.  During her stay, N.C. testified
    that she saw other bruises on D.B.s body, on her back, and on her ribs.  She
    had a scar on her upper thigh.  D.B. told N.C. that the appellant caused those
    injuries and had stabbed her thigh with a knife.

8.

One evening, the appellant, intoxicated, came to N.C.s apartment door.  N.C.s
    husband opened the door half-way and told the appellant that D.B. did not want
    to see him.  When the husband tried to close the door, the appellant placed his
    foot in the way.  He was getting angrier by the minute.  The appellant tried
    to force his way in but N.C. pushed the appellant into the hallway and locked
    the apartment door.

9.

The next time N.C. saw D.B. was sometime during the summer of 2006.  She
    testified that D.B. was sitting on the steps of her building crying.  D.B. told
    N.C. that the appellant was hitting her again.

10.

D.B.s mother described her daughter as an alcoholic, particularly in
    the last two years of her life.  D.B. came to live with her mother in July
    2006.  She testified that D.B. appeared without advance notice and looked
    terrified.  She had a bruise on her arm and on her neck.  D.B. told her
    mother that the appellant was continually beating her and that he had threatened
    her life.  D.B. went out on the weekend but, when she returned, she had
    bruises, a black eye, and a split lip. She was also intoxicated.

11.

On December 23, 2006, D.B. showed up at D.H.s apartment.  She had a
    black eye and she was very upset. She told D.H. that the appellant had hit her
    again.  She stayed until Christmas Day, when she left to return home.  D.B.
    told D.H. that she would be back that evening.  She did not return, however,
    until December 29.  When she did, her face was bruised.  She had a line on her
    left cheek approximately two inches long and three-quarters of an inch wide.  D.B.
    said that the appellant had hit her again.

[13]

In
    terms of the events immediately prior to her disappearance, the evidence was
    that on the evening of New Years Eve 2006, D.B. and D.H. went to a bar.  The
    appellant came to the bar and looked in the window.  He then entered the bar
    and was belligerent.  One witness in the bar testified that, while D.H. and D.B.
    were dancing, the appellant gestured aggressively toward D.B., calling her to
    leave with him.  Another witness testified that a man entered the bar and
    yelled at D.B.  He said, Youre supposed to be home with me, youre supposed
    to be my wife, and Im supposed to be your husband.  The appellant was rude,
    scary, and loud.  Yet another witness testified that the appellant was not
    happy when he entered the bar.  He grabbed D.B.s arm between the shoulder and
    the elbow forcefully, as if to say youre coming with me.

[14]

At
    the request of the bars owner, the appellant left.  He later returned and
    apologized, then sat beside D.B.  The two spoke calmly.  When they went outside
    for a smoke, D.H. saw them hugging.  At some point, D.H. confronted the appellant
    about beating D.B.  The appellant responded calmly that it was the whiskey.  D.B.
    had been drinking, but by midnight she was still able to walk without
    difficulty.  The appellant appeared sober.  D.B. and the appellant left the
    restaurant together.  D.H. never saw or heard from D.B. again.

[15]

After
    the disappearance of D.B., the appellant made a variety of comments, at
    different times, regarding her disappearance.  I summarize those instances as
    follows:

1.

The appellant called J.B. (D.B.s sister) around noon on New Years Day
    2007.  He told her he had seen D.B. at a bar.  The appellant said that he did
    not speak to D.B.

2.

The appellant called J.B. again on January 17, 2007, upset that she and
    D.B.s mother had called the police.  The appellant was angry, loud, and
    rambling.  He said, How dare they call the police on me.

3.

The appellant and J.B. spoke again on January 26, 2007.  He was still
    angry.  J.B. told the appellant that, if he had killed D.B., she would kill him
    herself.  The appellant said nothing in response.

4.

The appellant spoke to D.B.s mother in the New Year.  He told her that he
    had seen D.B. at the bar on New Years Eve but that he had left her alone.

5.

On or around January 17, 2007, the appellant called D.B.s mother,
    irate, and asked her why she had called the police.  The appellant told her
    to stay the fuck out of it, to mind her own business, and to let the police
    do their job.  The appellant called again a few days later, crying and telling
    her he loved D.B. and did not know where she was.

6.

The officer who was investigating the disappearance of D.B. left his
    contact information under the door of the appellants apartment.  On January
    17, 2007, the appellant called the officer, sounding excited and nervous.  He
    told the officer that he was D.B.s common law boyfriend and that he had been
    jailed for assaulting her.  He and D.B. had been seeing each other with the
    permission of the probation officer.  They were last together on New Years
    Eve, drinking heavily.  She was going to go home with him, but she changed her
    mind.  She was flirting with three other men.  They had an argument and the
    appellant went home.

7.

Between January 15 and 26, 2007, the appellant worked with L.B.  The
    appellant told L.B. that on New Years, he and his girlfriend (D.B.) had gotten
    into an argument over drinks and she had stormed out.  He had not seen her
    since.  The appellant later told L.B. that his girlfriend had contacted him by
    telephone on and off after New Years.

The jury charge

[16]

The
    trial judge began his jury charge with standard instructions on matters such as
    the importance of their duties as jurors; their obligation to find the facts in
    the case; their obligation to abide by the rules of law set forth by the trial
    judge; that their recollection of the evidence was what mattered; and that they
    were obliged to view the evidence objectively.  The standard instructions
    regarding the burden of proof and the presumption of innocence were given.  The
    standard instruction on circumstantial and direct evidence followed.

[17]

The
    trial judge then dealt with what he characterized as after-the-fact conduct,
    specifically, the various statements that the appellant made after D.B.s
    disappearance, which the Crown contended were false.  The trial judge reviewed
    seven such instances.

[18]

The
    trial judge moved from that after-the-fact evidence to the evidence regarding
    the relationship between the appellant and D.B.  The trial judge continued his
    charge over the next 12 pages or so by referring to the evidence of the
    instances of abusive and violent behaviour between the appellant and D.B., as I
    have largely set out above.  The trial judge then concluded this topic by
    saying:

This evidence of abusive behaviour goes to the nature of the
    relationship between [D.B.] and Mr. Thomas and to the issues of
animus
and ill will, and motive. If you conclude that these other acts of abuse and
    violence and controlling and threatening behaviour and the circumstances
    surrounding the death of [D.B.] are so connected that the same person did
    likely all of them, you may use the evidence of the other abusive and violent
    acts, along with the rest of the evidence, in deciding whether David Thomas committed
    the offence charged.

[19]

Next
    in his charge, the trial judge gave the standard instruction on the use that
    jurors could make of the notes that they had taken.  The trial judge then
    turned to the elements of the offence of second degree murder.  In dealing with
    the first element, that is, whether the appellant caused the death of D.B., the
    trial judge reviewed, in some detail, the evidence of the forensic pathologist
    regarding his findings from the autopsy.

[20]

The
    trial judge then returned to the evidence regarding the abuse, violence and
    controlling and threatening behaviour exhibited by the appellant that he
    repeated over the next six pages of his charge.  The trial judge moved on from
    that evidence to address the evidence relating to the events in the bar on New
    Years Eve 2006.  Thereafter, the trial judge returned to the various
    statements that the appellant made after the disappearance of D.B.  Lastly, on
    the first element of the offence, the trial judge addressed the blood evidence
    from the appellants vehicle.

[21]

The
    trial judge then proceeded to address the second and third elements of the
    offence relatively briefly.  This was understandable given that it was the
    first element of the offence that was critical to the determination of guilt.
    As the trial judge pointed out, the evidence on that first element overlapped
    with the second and third elements.  The jury charge then concluded with the
    trial judges review of the Crowns and defences positions and then with some
    further standard instructions.

II: Challenge to the jury charge

[22]

As
    may be apparent from the above recitation of the facts, this was going to be a
    difficult case for the jury.  The case against the appellant was entirely
    circumstantial.  There was no evidence as to the cause of death.  The manner in
    which the trial judge instructed the jury on the elements of the offence, and
    how the evidence related to each of those elements, was therefore of particular
    importance in light of the approach that the jury had to properly take when deciding
    a circumstantial evidence case.

(a) t
he jury
    instruction on cause of death

[23]

Given
    the facts of this case, as the first step to determining guilt, the jury had to
    be satisfied, beyond a reasonable doubt, that D.B. was killed, as opposed to
    her death being the result of suicide, or misadventure, or the cause simply
    being uncertain or undetermined.

[24]

The
    trial judge started his review of the elements of the offence with the correct
    statement that the jury had to be satisfied beyond a reasonable doubt that the appellant
    caused the death of D.B.  While, in my view, it might have been preferable
    for the trial judge to make the cause of death, as opposed to the identity of
    the killer, a separate and clearer question for the jury to determine, the fact
    is that the jury was instructed to consider the cause of death directly. By
    telling the jury that they had to be satisfied that the appellant caused the
    death of D.B., it would be clear to the jury that, if they concluded that D.B.
    met her death, either at her own hands or by some unfortunate event, they had
    to find the appellant not guilty.

[25]

This
    result was reinforced when the trial judge told the jury:

Because the evidence related to whether [D.B.s] death resulted
    from an assault is entirely circumstantial and because the identity of Mr.
    Thomas as the person who caused the death by the application of force is an
    essential element requiring proof beyond a reasonable doubt, I remind you that,
    to the extent that you rely on the circumstantial evidence
you would have to
    be satisfied that an assault occurred which led to or contributed to [D.B.s]
    death
and that the identification of Mr. Thomas as the killer is the only
    rational inference arising from all of the evidence. [Emphasis added.]

[26]

In
    this instruction, the jury was expressly told that, in order to find the
    appellant guilty, they had to be satisfied that an assault occurred which led
    to or contributed to [D.B.s] death and that that was the only rational
    inference arising from all of the evidence.  If the jury concluded that D.B.s
    death was the result of suicide or misadventure or, more importantly, if they
    could not decide on the cause of death, then the jury would have to find the
    appellant not guilty.

[27]

I
    appreciate the appellants point that the volume of bad character evidence, that
    the trial judge allowed into evidence, could be fairly characterized as a
    relentless depiction of [the appellant] as a bad person.  As a result, this
    evidence had the very real potential of so prejudicing the appellant in the
    eyes of the jury that they would immediately leap to a verdict of guilty,
    unless they were very carefully instructed on the use to which they could put
    this evidence.

[28]

I
    pause at this juncture to note that it was within the discretion of the trial judge
    to admit all of this evidence.  His decision in that regard is entitled to
    deference from this court:
R. v. Stubbs
, 2013 ONCA 514, 300 C.C.C.
    (3d) 181, at para. 58.  I do not intend to revisit it, despite the appellants
    invitation to do so.  That said, I note that it was also open to the trial
    judge to restrict the scope of this evidence on the basis that permitting all
    of it to be admitted might overwhelm the jury and cast the appellant in such a
    bad light as to make it impossible for them to evaluate the ultimate question
    objectively.  As Rothstein J. said in
R. v. White
, 2011 SCC 13, [2011]
    1 S.C.R. 433, at para. 52:

The trial judges discretion to exclude evidence that is more
    prejudicial than probative recognizes that jurors will sometimes misuse relevant
    evidence.

(b) the proper role for the evidence

[29]

Having
    chosen to permit the Crown to lead all of this evidence, it was incumbent on
    the trial judge to ensure that it did not overwhelm the jury or distract them
    from the real issues that they had to decide.  It was imperative that this
    evidence be confined to its proper role and kept in its proper perspective.  As
    Rothstein J. also said in
White
, at para. 55:

Accordingly, courts have recognized that when leaving certain
    types of evidence with the jury, the trial judge should provide a caution that
    alerts the jury to the risks involved.

[30]

The
    trial judge provided those instructions in this case.  For example, the trial
    judge provided a mid-trial instruction to the jury as follows:

You have heard evidence that David Thomas pleaded guilty to the
    offence of assault causing bodily harm to [D.B.] on or about September 18,
    2005.  You have heard and may hear further evidence that David Thomas assaulted
    [D.B.] at other times during their relationship.  At the end of this trial I
    will tell you how that evidence may help you decide whether David Thomas
    committed the offence with which he is charged.  What you need to know now is
    how you must not use this evidence.  You must not conclude that David Thomas is
    guilty of the offence charged just because evidence has been given that he had
    been violent towards [D.B.] in the past.  You must not punish David Thomas for
    anything he has admitted to have done, or what others have said he has done in
    the past, by finding him guilty of the offence charged.

[31]

Further,
    in his jury charge, the trial judge told the jury:

Now, you are trying David Thomas on the charge of second-degree
    murder in the death of [D.B.].  You are not trying him for any other conduct.
    You have heard evidence that David Thomas was abusive of, and committed acts of
    violence, against [D.B.], exhibited controlling behavior towards her and made
    threats against her, or is alleged to have done these things.  Be careful not
    to jump to the conclusion that just because David Thomas was violent or abusive
    towards [D.B.] in the past, he must have done an act that led to her death.

[32]

And
    later in his charge, the trial judge said:

If you conclude that David Thomas did the other abusive and
    violent things in the past, you must not use the evidence of that conduct to
    conclude or help you conclude that David Thomas is a person of general bad
    character or disposition or who likely committed the offence charged because of
    that general bad character.

Further, if you conclude that David Thomas did the other
    violent and abusive things in the past, you must not punish David Thomas for
    that conduct by finding him guilty of the offence charged simply because he did
    those things.

(c) the similar act instruction

[33]

All
    of that said, there is one area in the trial judges instructions that is
    problematic.  It is the instruction that he gave, more than once, and that reads
    like a similar act (or similar fact) instruction.  I have set out one instance
    of that instruction in para. 18 above.  Such an instruction had no place in a
    jury charge for this offence in these circumstances.  The potential probative
    value of the appellants abusive and violent conduct lay not in the
    connection between that conduct and the circumstances of D.B.s death, but in
    the jurys willingness to infer animus and motive from that conduct.  The trial
    judge properly instructed the jury on their use of motive and animus in other
    portions of his charge.

[34]

It
    is not clear to me why the trial judge made these references in his jury
    charge.  However, in the context of the charge as a whole, I do not believe
    that they would have misled the jury or would have caused them to jump to a
    conclusion of guilt.  The trial judge properly outlined the elements of the
    offence of second degree murder.  As I have already noted, he made it clear to
    the jury that, in order to find the appellant guilty, they had to be satisfied
    beyond a reasonable doubt that the appellant caused D.B.s death.  The jury was
    also instructed, both by way of a mid-trial instruction and in the final
    charge, that they should not use the bad character evidence to conclude that,
    because the appellant was abusive towards D.B. in the past, he must have caused
    her death.  The jury would have been clear with respect to the prohibition
    against engaging in such reasoning.

[35]

In
    addition, this evidence was relevant to the issue of animus or motive.  It was
    evidence that the jury could consider on that issue and thus was properly
    before them in determining whether D.B. had been killed and, if so, whether the
    appellant was the person who killed her.  I note, in passing on this point,
    that if this case was one where it was clear that D.B. had been killed, and the
    only issue was whether Mr. Thomas had killed her, no such limiting instruction
    on the use of the bad character evidence would have been necessary:
R. v.
    Krugel
(2000), 143 C.C.C. (3d) 367 (Ont. C.A.);
R. v. Merz
(1999),
    46 O.R. (3d) 161 (C.A.).  As Doherty J.A. said in
Merz
at para. 59:

The evidence of the threats made by the appellant was evidence
    of motive which, in turn, constituted circumstantial evidence of identity and
    intent. I see no reason to warn the jury against using the evidence to infer
    propensity and hence to infer that the accused committed the crime when the
    more direct and powerful inference to be drawn from that evidence is that the
    accused had a motive to kill Ms. Murray. The trial judge properly instructed
    the jury as to how they could use evidence of motive. The limiting instruction
    normally given when evidence of prior bad acts by the accused is placed before
    the jury would make no sense in the context of evidence of motive. An
    instruction like that called for by the appellant could only serve to confuse
    the jury.

[36]

Given
    the contents of the jury charge as a whole, and given that all of this evidence
    related solely to conduct between the appellant and D.B., I do not see that the
    similar act reference would have confused the jury or introduced an extraneous
    consideration to their deliberations.  The erroneous instruction was
    essentially superfluous to what the jury had already been properly instructed
    on and which they were entitled to take into account in reaching their
    conclusion.

(d) the appellants earlier guilty plea

[37]

Another
    aspect of the jury charge that raises a separate issue is the evidence of the appellants
    guilty plea on a charge of assault causing bodily harm relating to D.B., that
    included the fact that he had yelled I want you dead, I want you dead, I want
    you dead. This evidence was placed before the jury through the transcript of
    the guilty plea.  The entire transcript of the guilty plea was made an exhibit
    and Crown counsel read most, if not all, of the transcript to the jury.  The transcript
    showed that after the prosecutor read in a collection of facts, which included
    the above-noted threat, the appellants counsel said that those facts were
    accepted as being substantially correct.

[38]

Unfortunately,
    the trial judge did not give the jury any assistance in terms of what that
    qualification meant.  This was of some importance, in this case, given the fact
    that the threat was not a necessary element of the offence to which the
    appellant pleaded guilty, that is, assault causing bodily harm.  A plea of
    guilty to a criminal charge is an admission by the accused of all the legal
ingredients
necessary to constitute the crime charged and dispenses with the necessity of
    proof of the
ingredients
:
R. v. Lucas
(1983), 9 C.C.C. (3d) 71
    (Ont. C.A.), at p. 76., leave to appeal refused [1984] S.C.C.A. No. 389
    (emphasis added).  See also
R. v. Eizenga
, 2011 ONCA 113, 270 C.C.C.
    (3d) 168, at para. 43.

[39]

The
    threat was offered as evidence of a statement by the accused.  It was not an
    element of the offence underlying the guilty plea.  On the instant prosecution,
    the jury could only use the statement as evidence of motive to determine the
    guilt of the appellant if they first concluded that he made the threat.  In my
    view, the qualified admission by counsel that the facts were substantially
    correct did not provide a basis upon which a jury could infer that the
    appellant admitted that he made the threat.  Absent a clear admission that the
    threat was made, that part of the transcript of the guilty plea should not have
    been placed before the jury.  Alternatively, the trial judge ought to have
    instructed the jury that they could not infer that the appellant had accepted
    that he had made the threat, given the qualified nature of the admission.

[40]

All
    of that said, however, this was but one piece in a much larger picture of the
    nature of the relationship between the appellant and D.B.  Whether or not he made
    the threat did not undermine the thrust of all of the evidence that the jury
    heard in that regard, including evidence of similar threats at other times.  In
    addition, and as I shall discuss below, the jury was expressly warned against
    jumping to conclusions regarding the appellant based on this evidence.

(e) the blood in the appellants car

[41]

The
    appellant also complains about the trial judges reference to the evidence
    regarding D.B.s blood being found in the appellants car.  I am not persuaded
    that there was any error made by the manner in which the trial judge dealt with
    this evidence.  The trial judge carefully and thoroughly reviewed the evidence
    of the forensic pathologist.  He reviewed all of the evidence regarding the
    presence of blood and the evidence of cleanup.  The trial judge also told the
    jury that the blood could not be dated and reminded them of the possibility
    that the blood might have been deposited in the car on a previous occasion.  I
    do not see anything in the trial judges instructions to the jury on this
    evidence that would have misled them in any respect.

[42]

The
    appellant also complains about the manner in which the trial judge dealt with
    the evidence of the blood in the car when he came to review the Crowns position.
    Crown counsel, in her closing submissions, advanced the theory that the
    appellant had killed D.B. and then driven her to the river in his car.  The
    Crown used the trace presence of D.B.s blood in the appellants car as support
    for this theory.

[43]

The
    trial judge accurately referred to the Crowns contention in summarizing the Crowns
    position.  The jury was well aware that the trial judge was doing exactly that,
    summarizing the Crowns position.  He was not suggesting that was the
    conclusion that the jury ought to reach nor that the Crowns view of the
    evidence was the only view.  I do not see any error in the manner in which the
    trial judge dealt with this issue.

(f) the jury instruction on circumstantial evidence

[44]

As
    I said earlier, this was an entirely circumstantial case.  Much has been
    written on the subject of the proper approach to circumstantial evidence.  Some
    view this area as confused.  That view caused the Supreme Court of Canada to
    attempt to provide clarification on this issue in their decision in
R. v.
    Villaroman
, 2016 SCC 33, [2016] 1 S.C.R. 1000.  Unfortunately, the trial
    judge did not have the benefit of the decision in
Villaroman
when he
    instructed the jury.  The validity of the appellants concerns in this regard
    have to be viewed with that reality in mind.

[45]

In
    this case, the trial judge gave the jury a standard instruction on what
    constitutes circumstantial evidence, namely, the drawing of inferences from
    proven facts.  A bit later, the trial judge told the jury:

However, before you base a verdict of guilty on circumstantial
    evidence, you must be satisfied beyond a reasonable doubt that the guilt of Mr.
    Thomas is the only rational verdict to be drawn from the whole of the evidence.

[46]

That
    is the standard and correct instruction on circumstantial evidence.
    Importantly, it was not the only time that the trial judge gave the instruction
    to the jury.  In the course of dealing with the elements of the offence, and
    the evidence relating to those elements, the trial judge gave the instruction
    to which I referred in para. 25, above.

[47]

In
    addition, the trial judge concluded his instruction on the first element of the
    offence by saying the following:

As I explained earlier, the evidence led by the Crown to
    establish the guilt of Mr. Thomas is entirely circumstantial including the
    evidence respecting the manner of [D.B.s death. For you to draw the inference
    from the totality of the evidence that [D.B.s] death was a homicide and that
    her death was caused by an act of David Thomas, you must be satisfied that this
    inference is the only reasonable inference to be drawn from all of the
    evidence.

[48]

It
    is difficult to criticize the trial judges charge regarding circumstantial
    evidence when he repeatedly told the jury exactly how they should approach that
    evidence and, importantly, reminded them that guilt must be the only reasonable
    inference to be drawn from it.

[49]

I
    recognize the ever-present danger that a jury may have a tendency to jump to
    unwarranted conclusions when dealing with circumstantial evidence:
Villaroman
,
    at para. 29.  Jurors may also have a similar tendency to fill in evidentiary
    gaps, rather than treat those gaps as a reason to have a reasonable doubt as to
    guilt.  On that point, in
Villaroman
, Cromwell J., at para. 30,
    suggested that juries should be instructed in the following way:

It follows that in a case in which proof of one or more
    elements of the offence depends exclusively or largely on circumstantial
    evidence, it will generally be helpful to the jury to be cautioned about too
    readily drawing inferences of guilt.

[50]

Repeating
    that the trial judge did not have the benefit of the decision in
Villaroman
when he gave his instructions to the jury, nevertheless, in my view, the
    contents of his instructions achieved the desired purpose.

[51]

One
    other aspect of this issue deserves mention.  In her closing submissions, Crown
    counsel, on more than one occasion, told the jury that there was no evidence
    to support theories other than a homicide.  The trial judge repeated those
    assertions when he reviewed the Crowns closing submissions.  It is important, in
    a circumstantial evidence case, to instruct the jury that inferences consistent
    with innocence do not have to arise from proven facts.  If there are reasonable
    inferences available on the evidence that would allow for a conclusion other
    than guilt, then the jury is obliged to consider those possible inferences in
    determining whether the Crown has proved the offence beyond a reasonable
    doubt.  This is made clear in
Villaroman
, at para. 35.

[52]

While
    the trial judge did not instruct the jury specifically on this point, as I have
    already said, he instructed the jury on the proper use of circumstantial
    evidence on more than one occasion.  He also reminded the jury, on at least two
    occasions, that a reasonable doubt can arise from the evidence or the lack of
    evidence.  The latter reference invokes the same fundamental principle that
    underlies the point made in
Villaroman
to which I just referred.  I do
    not view the references made by Crown counsel, as summarized by the trial
    judge, as detracting from the force and effect of those instructions.

III: Other
    grounds of appeal

(a)

the appellants July 13,
    2011 statement to police

[53]

The
    appellant submits that the trial judge erred in permitting the Crown to adduce
    a portion of his July 13, 2011 statement to the police.  The appellant argues
    that the entire statement should have been excluded because it was tainted by
    an earlier statement of February 6, 2007 that the appellant gave to the police
    and which was ruled to be an involuntary statement.

[54]

The
    trial judge excluded the portion of the July 13, 2011 statement that occurred
    after the officer made reference to the February 6, 2007 statement but
    permitted the Crown to use the earlier portion of the statement that occurred
    prior to any reference to the February 6, 2007 statement.  I do not see any
    error in the manner in which the trial judge dealt with this issue.

(b)

the appellants statements
    to his probation officer

[55]

The
    appellant submits that the Crown should not have been permitted to call the
    appellants probation officer and elicit from her details that the appellant
    gave to her respecting the assault causing bodily harm conviction that involved
    D.B.  The appellant submits that the probation officer was a person in
    authority and thus the statements were not voluntary.  The appellant also
    submits, in essence, that a privilege attaches to the statements under the
Wigmore
principles.

[56]

I
    do not view it as necessary, in this case, to determine either of these
    contentions as they relate to the probation officer.  Even if the probation
    officers evidence had been excluded, there would have been no practical effect
    at trial.  The circumstances surrounding the assault causing bodily harm
    offence were already before the jury through the evidence of the guilty plea.
    There was also a considerable body of other evidence detailing the nature of
    the relationship between the appellant and D.B.

[57]

That
    said, I would voice a note of caution on this issue.  It seems to me that there
    is certainly an argument to be made that a case-by-case privilege might well
    attach to communications between a convicted person and his/her probation
    officer, based on the principles discussed by the Supreme Court of Canada in
    cases such as
R. v. National Post
, [2010] 1 S.C.R. 477, at paras.
    50-69.  Pending any definitive ruling on the issue, the Crown would be
    well-advised to consider the wisdom of seeking to adduce such evidence in
    future trials.

(c)

over‑seized and
    over-held evidence

[58]

The
    appellant complains that the Crown was permitted to adduce evidence that was
    seized by the police pursuant to a search warrant.  The appellant says that
    items were seized that were not covered by the search warrant and that the
    police held items seized past the permitted time.

[59]

The
    trial judge dealt with these issues in a detailed ruling.  He concluded that,
    while the police seized items not detailed in the appendix to the ITO, they
    were still covered by the terms of the search warrant.  I do not see any error
    in that conclusion.  In terms of the over-holding, the trial judge assumed a
    breach of s. 8 of the
Canadian Charter of Rights and Freedoms

but
    declined to exclude the evidence under s. 24(2).

[60]

Like
    the trial judge, I do not need to determine whether the over-holding
    constituted a s. 8 breach because, assuming that it did, I do not see any error
    in the trial judges s. 24(2) conclusion.  He properly considered the principles
    from
R. v. Grant
, 2009 SCC 32, [2009] 2 S.C.R. 353.  I fail to see any
    error in his application of those principles.

(d)

the Crowns closing
    statement

[61]

The
    appellant says that the Crown acted improperly in her closing statement,
    particularly in respect to her reference to the failure of the appellant to provide
    more details when he made a voluntary statement to the police on January 17,
    2007.

[62]

The
    trial judge dealt with this issue directly in his instructions to the jury.  He
    made it very clear to the jury that the appellant had a right to silence and
    was not under any obligation to provide any information to the police.
    Whatever problem might have been caused by the Crowns reference to this issue,
    it was fully covered by the instruction that the trial judge gave to the jury.

(e)

the jurys verdict was
    unreasonable

[63]

I
    need say very little on this ground of appeal.  The sole question is whether,
    on the whole of the evidence, the verdict is one that a properly instructed
    jury, acting judicially, could reasonably have rendered:
R. v. Sinclair
,
    2011 SCC 40, [2011] 3 S.C.R. 3, at para. 79. In my view, there is no question
    that a finding of guilt was a verdict that was open to the jury to reach on the
    evidence that was placed before them.

(f)  application of the curative proviso

[64]

In
    light of my conclusions on the various grounds of appeal, it is unnecessary to
    deal with the application of the curative proviso.

IV: The
    sentence appeal

[65]

The
    appellant appeals from the trial judges imposition of a 16 year parole
    ineligibility period.  I see no merit in this appeal.  The trial judge gave
    careful reasons for his conclusion regarding the period of parole ineligibility.
    It was within the range established by earlier authorities and, I note, was
    less than 10 of the 12 jurors recommended.  I am satisfied that the period of
    parole ineligibility fixed by the trial judge is proportionate to the gravity
    of the appellant's offence and his degree of responsibility for having
    committed it:
R. v. Lacasse
, 2015 SCC 64, [2015] 3 S.C.R. 1089, at
    para. 53.  I do not consider it to be harsh or excessive or beyond the range of
    periods of parole ineligibility appropriate for offences of this nature.

V: Conclusion

[66]

For
    these reasons, I would dismiss the appeal.

Released: August 23, 2018 I.N.

I.V.B.
    Nordheimer J.A.

I
    agree. Doherty J.A.

I
    agree. S.E. Pepall J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Reciprocal Opportunities Incorporated v. Sikh Lehar
    International Organization, 2018 ONCA 713

DATE: 20180831

DOCKET: C65109

Hoy A.C.J.O., van Rensburg and Pardu JJ.A.

BETWEEN

Reciprocal Opportunities Incorporated

Plaintiff (Respondent)

and

Sikh Lehar International Organization
,
    Narinderjit Singh Mattu, Rajwant Kaur Nijjar, Manjit Singh Mangat, Kamaljit
    Kaur Mangat, Suchet Singh Saini, Kamaljit Kaur Saini, Gurdev Singh Gill,
    Kanwaljit Kaur Gill, Inderjeet Singh Saini, Jatinder Kaur Saini, Harjeet Singh
    Thabal, Jaswinder Thabal, Hardeep Singh Dhoot, Raminder Dhoot, Daljit Singh
    Jammu, Parnpal Jammu, Harkanwal Singh, Kanwaljit Singh, Ramandeep Singh Athwal,
    Harnish Mangat, Sikanderjit Singh Dhaliwal, Sukhinder Dhaliwal, Gurdish Singh
    Mangat, Satinderjit Kaur Mangat and Guru Nanak Property Management Ltd.

Defendants (
Respondent
)

Paul J. Pape, for the appellant Sukhinder Sandhu

Dennis Touesnard, for the receiver JP Graci &
    Associates Ltd.

Ted R. Laan, for the respondent Sikh Lehar International
    Organization

Jonathan Piccin, for the respondent Community Trust
    Company and 2283435 Ontario Inc.

Heard: July 18, 2018

On appeal from the order of Justice R.J. Harper of the Superior
    Court of Justice, dated February 28, 2018.

Hoy A.C.J.O.:

[1]

The appellant, Sukhinder Sandhu, appeals the
    February 28, 2018 order of the motion judge, declining to approve the sale by a
    court-appointed receiver of the property known as 79 Bramsteele Road, Brampton,
    Ontario (the Property) to him.

[2]

For the following reasons, I would allow the appeal,
    set aside the order of the motion judge, and direct a new hearing.

Background

[3]

Sikh Lehar International Organization (SLIO) was established as a
    religious, private charitable organization to buy the Property and establish,
    manage and operate a Gurdwara (a Sikh temple). The Gurdwara is a tenant, but
    not the sole tenant, of the Property.

[4]

By 2014, SLIO was insolvent.

[5]

The Property has been the subject of litigation. The trustees of SLIO
    all wanted to sell the Property, and purported to sell it to different
    purchasers.  Disagreements about selling the Property led to the departure of
    some of the trustees and litigation about the amounts owing to the departing
    trustees: see
Sikh Lehar International Organization v. Saini
, 2018 ONSC
    2839. It also gave rise to litigation between SLIO, its two remaining trustees,
    Manjit Mangat and Harkanwal Singh, and the appellant, who had sought to
    purchase the Property: see
Sandhu v. Sikh Lehar International Organization
,
    2017 ONSC 5680.
[1]
Further, Canadian Convention Centre Inc. (CCC), a tenant of the Property, is
    seeking damages for alleged breaches of its lease in the amount of $2 million.
[2]

[6]

On September 1, 2017, at the instance of the first mortgagee of the
    Property,
[3]
Reciprocal Opportunities Incorporated (ROI), the motion judge granted an
    order appointing J.P. Graci and Associates Ltd. (the Receiver) as receiver of
    all the assets, undertakings and property of SLIO. The order authorized the
    Receiver to sell the Property, subject to the approval of the court.

[7]

The Receiver proceeded to have the Property appraised on September 15,
    2017 and contacted persons who had expressed an interest in purchasing the Property.

[8]

However, in an email on October 4, 2017, SLIO advised the Receiver that
    it had a firm commitment from a lender to take an assignment of your mortgage
    (presumably referring to the first mortgage), with the transaction to close in
    the next two weeks. The Receiver responded by email on October 5, 2017. It
    advised that the payout on the first mortgage was $4,092,745.31, the per diem
    rate was $1,114.51, and the Receivers fees and legal fees were $80,000. The
    Receiver further advised that if the mortgage amount and outstanding expenses
    were paid, it would apply to the court to approve the assignment of the
    mortgage and to be discharged. The Receiver also stated it anticipated having
    the information necessary to begin marketing the Property by November 1, 2017.
    The Receiver copied its counsel and SLIOs real estate counsel with its
    response, and separately forwarded its response (together with SLIOs October
    4, 2017 email) to, among others, counsel for the appellant.

[9]

There is no indication in the record that SLIO  or the proposed
    assignee  was in funds and prepared to close within two weeks of its October
    4, 2017 email to the Receiver.

[10]

The
    Receiver retained the services of a commercial real estate broker, who listed
    the Property for sale and put it on MLS as of October 31, 2017. The real estate
    broker also opined that the current value of the Property was significantly
    less than the appraised value, as the appraisal obtained by the Receiver
    assumed that the Propertys roof structures were in good working order, but in
    fact a significant portion of the roof required immediate replacement.

[11]

By
    letter dated October 31, 2017 to real estate counsel for SLIO, counsel for the
    Receiver confirmed that provided [SLIO] buys out the first mortgage on the
    property on or before November 14, 2017, then the Receiver will move for an
    Order having itself discharged. He advised that, as of that date, the payout
    of the first mortgage was in the amount of $4,121,722.50, with a per diem rate
    of $1,114.51. He further advised that provided payment was made before November
    14, 2017, the Receivers fees and legal fees would be capped at $80,000 plus
    HST.

[12]

The
    Receiver received three offers to purchase the Property. It entered into an
    agreement (the Agreement) to sell the Property to the appellant on November
    2, 2017.
[4]

[13]

Under
    the Agreement, the appellant agrees to purchase the Property on an as is where
    is basis, and to complete the transaction 15 business days after the Receiver
    obtains an approval and vesting order. With the exception of the requirement
    for an approval and vesting order, the appellants obligation to complete the
    purchase is essentially unconditional. The Agreement provides for a purchase
    price that exceeds the current value of the Property as assessed by the
    commercial real estate broker retained by the Receiver, and that approximates
    the appraised value of the Property.

[14]

In
    an affidavit sworn December 22, 2017, Mr. Mangat, one of the remaining trustees
    of SLIO, deposed that the appellant was aware of the Receivers intention to
    assign the first mortgage upon payment of the amounts owing. Mr. Mangat was
    not cross-examined on his affidavit.

[15]

The
    buy out of the first mortgage did not proceed by November 14, 2017.

[16]

In
    an email to the Receiver on November 23, 2017, real estate counsel for SLIO
    confirmed that SLIO had secured financing from a lender that was prepared to
    pay out all amounts owed to the Receiver in exchange for an assignment of the
    first mortgage. He advised that, among other items, the lender required a
    corporate resolution of ROI authorizing the assignment, the consent of the
    Receiver to the discharge of the certificate of pending litigation (CPL)
    registered on title to the Property by the appellant, and the Receivers
    undertaking to obtain a court order discharging the receivership upon payment
    of all amounts owing, in order to complete the assignment.

[17]

In
    an email later the same day, counsel for the Receiver clarified that while the
    Receiver could undertake to move for an order discharging the Receiver, the
    court would have discretion to grant the relief. He asked that counsel for the
    lender confirm that the lender was in funds. He indicated that the Receiver and
    its counsel could confirm their fees, and the Receiver could prepare a summary
    of its receipts and disbursements. He stated he trusted that the information he
    had previously provided regarding the amount owing on the first mortgage was
    satisfactory. He inquired as to the closing date.

[18]

In
    an email from counsel for the Receiver to real estate counsel for SLIO dated
    November 24, 2017, counsel for the Receiver seems to suggest the proposed
    lender would have to work out the discharge of the CPL and, if it could not,
    would have to decide whether or not to take the assignment without the CPL
    being discharged.
[5]
Counsel for the Receiver cautioned that, [i]f we cannot move forward with your
    proposal, I will be moving on January 5, 2018 for an order approving a sale
    agreement signed by the Receiver.

[19]

In
    an email later that day to SLIOs litigation counsel, counsel for the Receiver
    indicated that, [i]f your client can get financing and the CPL issue can be
    dealt with, we will deal with you as per [SLIOs real estate counsels]
    original email to the receiver. (This presumably refers to the November 23,
    2017 email, which is the earliest email in the record from SLIOs real estate
    counsel). He cautioned, [t]hat said, we will keep moving towards the sale of
    the property and I intend to bring the motion on January 5, 2018 for approval
    if the mortgage is not assigned beforehand.

[20]

In
    an email on November 29, 2017 to both SLIOs real estate and litigation
    counsel, counsel for the Receiver characterized their prior exchanges as
    without prejudice settlement discussions. He indicated that, as an officer of
    the court, the Receiver must have its actions approved by the court. He
    explained that the Receiver could not assign ROIs mortgage, but SLIO has a
    right to redeem the mortgage.

[21]

He
    further outlined the Receivers position on the proposed assignment of the
    first mortgage:

As you also know, prior to receipt of [the
    November 23 proposal] the receiver signed an agreement to sell the property to
    a third party. A motion will be served returnable January 5, 2017 [sic] for
    approval of that sale.

If your client wishes to redeem the mortgage
    and have the receiver discharged, it can bring a motion for [sic] in my action
    on notice to all affected parties for an order allowing it to redeem, and, on
    redemption, an order that the receiver be discharged. The Receiver will consent
    to leave to bring the motion and will not oppose that relief if sought.

[22]

In an email to counsel for the Receiver on
    November 30, 2017, litigation counsel for SLIO asked who ROIs representative
    was for the purpose of assigning the first mortgage.

[23]

Counsel for the Receiver provided the identity
    of ROIs counsel in a responding email on the same date. ROIs counsel is with
    the same law firm as Receivers counsel.

[24]

By email dated December 5, 2017, counsel for the
    Receiver provided his fees and those of the Receiver to date to real estate
    counsel for SLIO.

[25]

Real estate counsel for SLIO contacted counsel
    for ROI by email dated December 5, 2017. He advised of the documents the
    proposed assignee was requesting from ROI, including an accounting of all
    monies owed to ROI under the mortgage. He asked counsel for ROI to confirm that
    ROI was prepared to deliver the assignment and the other requested documents.
    He stated that [t]he solicitor for the proposed assignor [sic] confirms he is
    in funds.

[26]

The First Report of the Receiver is dated
    December 6, 2017. The Receiver prepared it in support of its motion for court
    approval of the Agreement and sale of the Property. The Report details the
    sales process the Receiver undertook with respect to the Property, leading it
    to seek court approval of the Agreement. The Report makes no reference to
    SLIOs attempts to arrange an assignment of the first mortgage held by ROI.

[27]

In his affidavit of December 6, 2017, real
    estate counsel for SLIO deposed that SLIO was concerned that if counsel for ROI
    did not respond quickly to the requisitions referred to in his email of
    December 5, 2017, the Property would be lost to a third-party purchaser in
    January 2018.

[28]

In his supplementary affidavit of December 21,
    2017, filed in response to the Receivers motion for approval of the Agreement,
    real estate counsel for SLIO further deposed that:

-    On December 8, 2017, counsel for ROI
    delivered a draft mortgage statement to counsel for SLIO.

-    He advised counsel for ROI that counsel
    for the proposed lender took the position that the default interest rate
    charged by ROI was contrary to s. 8 of the
Interest Act
, R.S.C 1985, c.
    I-15

and the proposed lender would not pay it. Counsel for ROI suggested
    that some amount in excess of the rate charged on the principal balance of the
    mortgage may have been the result of extension agreements entered into by SLIO
    and ROI.

-    On December 19, 2017, counsel for ROI
    delivered various documents setting out revised amounts required for the payout
    of the first mortgage. These amounts differed from those set out in the
    original Notice of Sale, dated May 17, 2017, and from other amounts provided by
    ROI in the interim.

-    The delay in effecting the assignment of
    the first mortgage was entirely the responsibility of ROI because of its
    failure to provide appropriate calculations of the amount owing.

-    The requisitions required by the proposed
    assignee from the Receiver or ROI had otherwise been substantially complied with.

[29]

In his affidavit sworn December 22, 2017, Mr.
    Mangat deposed that the emails of October 5, November 23 and 24, 2017 and the
    letter of October 31, 2017, referred to above, led SLIO to believe that upon
    payment of the proper amounts owing under the First Mortgage, the Receiver
    would arrange the assignment of the First Mortgage. As a result [SLIO] took
    steps to secure the proper financing of that assignment and incurred substantial
    costs in the process. Mr. Mangat then detailed borrowings from five individuals
    totaling approximately $396,268.87 incurred since the beginning of September
    2017, which he says are or will be debts of SLIO. He deposed that of those
    borrowings:

-        $207,000 was paid to the broker who
    had been trying to arrange financing for SLIO since September 2017, in part
    payment of his brokerage fee;

-        $24,518 was paid to the second
    mortgagee on October 14, 2017 to bring that mortgage into good standing, as
    required by the proposed assignee of the first mortgage;
[6]

-        $ 91,617.36 was paid to the City of
    Brampton on November 24, 2017 on account of tax arrears, again a condition of
    the proposed assignee of the first mortgage; and

-        $73,133.51 was paid on or after
    November 21, 2017 to obtain the discharge of a CRA lien for HST arrears, again
    a condition of the proposed assignee of the first mortgage.

[30]

Mr. Mangat further deposed that SLIO was unaware
    of the Agreement until the Receiver delivered its motion materials. The Receivers
    motion materials are dated December 6, 2017.

[31]

Neither Mr. Mangat nor SLIOs real estate
    counsel deposed that all the proposed assignees conditions of closing had been
    satisfied and that, but for the determination of the payout amount, the
    proposed assignee was prepared to close the assignment transaction.

The January 5, 2018 attendance before the
    motion judge

[32]

In its notice of motion dated December 6, 2017,
    filed in connection with the January 5, 2018 attendance before the motion judge,
    the Receiver sought an order approving the sale of the Property to the
    appellant.

[33]

SLIO opposed the Receivers motion. In response,
    SLIO brought its own motion seeking: (1) an order requiring ROI to assign the
    first mortgage, upon payment of all amounts owed to the Receiver or ROI; and (2)
    an order discharging the Receiver upon payment of such amounts.

[34]

In its factum filed on the motion, the Receiver indicated
    that it was prepared to be discharged  but only on the condition that the
    court be satisfied that it had discharged its duties, and on approval of the
    activities and accounts of the Receiver and its counsel. It stated that it
    entered into the Agreement prior to the conditional request to take an
    assignment of the first mortgage of ROI. It noted that the effect of the
    discharge sought by SLIO, as a condition of the assignment of the first mortgage,
    was that the sale transaction would not be approved and that the Receiver would
    seek, as part of the discharge order, a release from any potential liability to
    the appellant. The Receiver noted that the appellant and CCC opposed its
    discharge. In the event that the court was unwilling to exercise its discretion
    to discharge the Receiver, it sought an order approving the sale of the
    Property to the appellant.

[35]

The appellant appeared and filed a factum. Among
    other arguments, the appellant submitted that SLIO had not said how it would
    make future payments to its mortgagees or creditors if the assignment
    transaction proceeded, or even that it would. The appellant argued that the
    sale to him should be approved and a vesting order issued.

[36]

CCC filed a responding motion record opposing
    the form of vesting order sought because that order purported to vest the
    Property in the appellant free and clear of all encumbrances, including CCCs
    lease.

The motion judges reasons

[37]

The motion judge declined to approve the sale of
    the Property to the appellant and, instead, established a process that would permit
    the assignment of the first mortgage:
Reciprocal Opportunities
    Incorporated v. Sikh Lehar International Organization et al.
, 2018 ONSC 227.

[38]

In his reasons, the motion judge briefly
    reviewed SLIOs financial position. He noted that the first, second and third
    mortgages on the Property remained in default; a construction lien was registered
    in the amount of $406,500; the Ministry of Revenue had a tax lien in the amount
    of $108,156; the City of Brantford [sic] was in a position to put the Property
    up for sale for tax arrears in the amount of $433,818.59; CCC was seeking
    damages in the amount of $2 million for breach of its lease; there was a
    judgment in favour of the appellant in the amount of $2,206,729.01; and that
    there were numerous other debts.

[39]

At para. 18, the motion judge instructed
    himself on the four duties which
Royal Bank of Canada v. Soundair
    Corp.
(1991)
, 4 O.R. (3d) 1, 83 D.L.R. (4th)

76 (C.A.) directs a
    court must perform when deciding whether to approve a sale of a property by a
    receiver:

1.

The court should consider whether the receiver has made a sufficient
    effort to get the best price and has not acted improvidently.

2.

The court should consider the interests of all parties.

3.

The court should consider the efficacy and integrity of the process
    by which the offers are obtained.

4.

The court should consider whether there has been unfairness in the
    working out of the process.

[40]

The motion judge found that the Receiver took
    reasonable steps to obtain the best price for the Property. The motion judge
    noted, at para. 22, that interest was accruing rapidly on both the first
    mortgage and SLIOs other debts:

The [first] mortgage has been in arrears since
    September 2, 2016. There are substantial other debts that have also been in
    arrears for lengthy periods of time. Interest on the first mortgage and other
    debts has been accruing and escalating at a rate that the receiver must
    consider when acting in a manner that is efficient and fair to all interested
    parties.

[41]

Then, at para. 23, the motion judge stated he
    would not approve the sale, explaining: [e]xcept for the conduct of the
    Receiver/Plaintiff relative to the Defendant SLIO, I would have approved the
    sale.

[42]

At para. 26, the motion judge found that central
    to the communications from October 5, 2017 to the end of December 2017 between
    counsel for the Receiver, counsel for SLIO, and counsel for the intended
    assignee were inconsistent representations of what the pay-out amount would be
    in order to effect the proposed assignment of the first mortgage.

[43]

He found, at para. 30:

It is clear that as of the end of December, 2017,
    the Receiver/Plaintiff was prepared to accept payment of the outstanding
    balance of the first mortgage and assign the mortgage to a third party. The
    only thing that had not been established was the proper payout.

[44]

He concluded, at para. 32:

Having regard to the final consideration of
Royal Bank of Canada v. Soundair Corp
,
    I find the manner in which the process was conducted resulted in an unfairness
    to the Defendant SLIO and the prospective assignee of the first mortgage.

[45]

In his order dated February 28, 2018, the motion
    judge ordered that the proposed sale was not approved. He ordered ROI and the
    Receiver to provide a statement that they intend to rely on for purposes of the
    payout of the first mortgage and adjourned the matter to a further hearing
    before him, in order to fix the payout and set the terms of closing the payout
    and assignment of the first mortgage. He specifically ordered that the Receiver
    was
not
discharged.

The parties submissions on appeal

(a)

The appellants submissions

[46]

The appellant does not challenge the motion
    judges finding that the manner in which the process was conducted resulted in
    an unfairness to SLIO and the prospective assignee of the first mortgage.
    Rather, the appellant argues that the motion judge provided insufficient
    reasons because he did not explain why the unfairness to SLIO and the
    prospective assignee of the first mortgage should trump the unfairness to the
    appellant of not having the sale approved.

[47]

Further, the appellant argues that the motion
    judge erred in his application of the second
Soundair
duty by failing
    to consider the interests of creditors and the interests of the appellant,
qua
purchaser. He submits that this court should set aside the order of the motion
    judge and approve the sale of the Property to him. Alternatively, he asks that
    the order be set aside and new hearing ordered.

[48]

The appellant does not argue that that SLIOs
    right of redemption or assignment terminated when the Receiver entered into the
    Agreement.

(b)

The Receivers submissions

[49]

On appeal, the Receiver supports the position of
    the appellant. It argues that the motion judge erred in his application of the
    second
Soundair
duty by failing to consider the interests of all
    parties and by focusing solely on the interests of SLIO. It says that not
    approving the sale leaves SLIOs creditors in limbo as to when and by what
    means the Property will be sold to satisfy their debts.

[50]

It also argues that the motion judge failed to
    consider the third
Soundair
factor  namely, the efficacy and
    integrity of the process by which offers were obtained. It argues that this
    factor weighs in favour of approving the sale.

[51]

Finally, the Receiver argues that the fourth
Soundair
duty only requires an inquiry into the fairness of the sale process, and does
    not contemplate an inquiry into the fairness of other aspects of the
    receivership. In its submission, any unfairness resulting from the Receivers
    conduct in relation to SLIO and the proposed assignment is unrelated to the
    sale process undertaken with respect to the Property. Its position is that
    unfairness in the broader receivership is relevant only to an analysis of the
    interests of the parties under the second
Soundair
duty.

(c)

SLIOs submissions

[52]

SLIO argues that the motion judge correctly
    identified the test in
Soundair
, identified the appellant as a
    creditor, and considered the creditors interests. It states that there is
    sufficient equity in the Property such that the appellants position as a
    creditor is not at risk.

[53]

SLIO argues that it was treated unfairly because
    the Receiver breached its written consent to permit the redemption/assignment
    of the first mortgage and to obtain an order for discharge. In SLIOs
    submission, it is implicit in the motion judges reasons that he found that the
    unfairness to SLIO was the most important factor in the circumstances and the
    motion judges reasons were sufficient in this regard. SLIO notes that, in any
    event, insufficiency of reasons is not automatically fatal to a decision.

Analysis

(a)

The motion
    judge erred in his performance of the second
Soundair
duty

[54]

The motion judges order was discretionary in
    nature. An appeal court will interfere only where the judge considering the
    receivers motion for approval of a sale has erred in law, seriously misapprehended
    the evidence, exercised his or her discretion based upon irrelevant or
    erroneous considerations, or failed to give any or sufficient weight to
    relevant considerations: see
HSBC Bank of Canada v. Regal Constellation
    Hotel (Receiver of)
(2004), 71 O.R. (3d) 355, 242 D.L.R. (4th) 689 (C.A.),
    at para 22.

[55]

I agree with the appellant and the Receiver that
    the motion judge erred in performing the second
Soundair
duty: first,
    by failing to properly consider and give sufficient weight to the interests of
    the creditors; and second, by failing to consider the interests of the
    appellant,
qua
purchaser.

[56]

I begin by acknowledging that while the primary
    interest is that of the creditors of the debtor, the interests of the creditors
    is not the only or overriding consideration. The interests of a person who has
    negotiated an agreement with a court-appointed receiver ought also to be taken
    into account. And in appropriate cases, the interests of the debtor must also
    be taken into account: see
Soundair
, at paras. 39-40.

[57]

Although the motion judge noted that there were
    substantial debts in arrears and interest was accruing on those debts, he did
    not consider how declining to approve the sale, so that the assignment of the
    first mortgage might proceed, would affect the creditors interests.

[58]

If the sale proceeded, the creditors could be
    repaid. On the other hand, the assignment of the first mortgage would simply
    replace one creditor with another. It would not permit SLIO to repay the other
    substantial debts which the motion judge indicated were in arrears. It is also
    not clear that SLIO would be in a position to service the first mortgage, if
    assigned to a new mortgagee.

[59]

Further, according to Mr. Mangats evidence, if
    the assignment proceeds SLIO will assume additional debt in respect of the
    brokerage fees payable for arranging the assignment, thus worsening SLIOs
    financial position. While Mr. Mangat deposed that certain debts had been repaid
    (at least in part) to satisfy the prospective assignees conditions of closing,
    it is intended that SLIO will assume debts incurred to facilitate those
    repayments. It also appears that the Property is deteriorating and urgently
    requires repair. There is no indication as to how those repairs will be funded.
[7]

[60]

The receivership was triggered by SLIOs
    insolvency. The motion judge did not engage in any analysis of the continued
    viability of SLIO and SLIOs ability to pay the creditors if the sale did not
    proceed. He did not consider whether declining to approve the sale transaction would
    merely delay the inevitable. Given that
Soundair

directs the primary interest to be considered is that of the
    creditors of the debtor, this was an error.

[61]

Moreover, the motion judge did not give any
    consideration to the interests of the appellant,
qua
purchaser. He did
    not consider the potential prejudice that would result to the appellants
    interests if the sale was not approved. Significantly, while the motion judge
    declined to approve the sale based on the conduct of the Receiver and first
    mortgagee vis-à-vis SLIO, he did not find that the appellant was implicated in
    this conduct.

[62]

As a result, I conclude that the motion judge
    erred in his application of the second
Soundair

duty. In light of this conclusion, it is unnecessary to address the
    appellants argument that the motion judge provided insufficient reasons or the
    Receivers arguments regarding the application of the third and fourth
Soundair

factors.

(b)

The appropriate remedy is to set aside the order
    below and direct a new hearing

[63]

As I have concluded that the motion judge erred
    in principle, the next question is whether this court should consider whether
    to approve the sale transaction
de novo

or set aside the order below and order a new hearing. For several
    reasons, I would set aside the order below and order a new hearing, on notice
    to all persons with an interest in the Property, including the lessees, and any
    execution creditors.

[64]

First, the circumstances are unusual. Contrary
    to what is suggested by the Receivers notice of motion filed below, and to
    what I had understood at the hearing of the appeal, this is not a case where
    the Receiver unequivocally recommended that the sale be approved. Rather, its
    factum below indicates that it did not oppose the assignment, provided it was
    discharged and released from any potential liability to the appellant. It
    recommended the sale only in the event that the motion judge was unwilling to
    insulate it from liability to the appellant. A re-hearing would permit the
    motion judge to obtain clarity on the Receivers position.

[65]

Second, the First Report of the Receiver does
    not provide an update on SLIOs financial position, indicate how the assignment
    option would affect creditors other than ROI, explain what it told the
    appellant about the proposed assignment before entering into the Agreement and
    what it told SLIO about the proposed sale, or describe what role it took in
    determining the amount outstanding under the first mortgage. A re-hearing would
    permit the Receiver to provide a further report and assist the motion judge in
    balancing the interests of the creditors, the appellant, SLIO, and the proposed
    assignee. If the motion judge were inclined to discharge the Receiver, an updated
    report would also assist the motion judge in determining the terms of its
    discharge.

[66]

Third, it is not clear that the proposed
    assignee is ready, willing and able to close the assignment upon determination
    by the motion judge of the payout amount under the first mortgage. Among other
    things, the discharge of the Receiver, which the motion judge declined to
    grant, at least at this juncture, appears to be a condition of the proposed
    assignment.

[67]

Mr. Mangat deposed that SLIO has borrowed money
    to discharge certain debts, as required by the proposed assignee of the first
    mortgage. But, based on the amounts owing to those creditors as set out in the
    motion judges reasons, the amounts Mr. Mangat says have been repaid are less
    than the amounts owing to those creditors. Moreover, despite Mr. Mangats
    evidence that the arrears on the second mortgage had been repaid, the motion
    judges reasons indicate, and counsel for the second mortgagee advised this
    court in oral argument, that the second mortgage is in arrears. SLIOs overture
    to the Receiver also followed on the heels of unsuccessful attempts by SLIO to
    refinance the first mortgage before the Receiver was appointed. A re-hearing
    should permit the motion judge to determine whether the assignment transaction
    could proceed without delay.

[68]

Fourth, a number of factual determinations may
    need to be made in order to permit the balancing of the interests of the
    creditors, the appellant, SLIO and the proposed assignee, to determine whether
    or not the sale should be approved and, if the motion judge is inclined to
    order the discharge of the Receiver, the terms of its discharge.

[69]

For example, as indicated above, Mr. Mangat
    deposed that the appellant was aware of the Receivers intention to assign the
    first mortgage upon payment of the amounts owing. I understand that his
    allegation is based on the fact that counsel for the Receiver forwarded its
    October 5, 2017 email, and SLIOs email of October 4, 2017, to counsel for the
    appellant. However, as I have stated, the motion judge made no finding as to
    what the appellant knew, and when. The emails of October 4 and 5, 2017 seemed
    to contemplate that the assignment would close by October 18, 2017 (i.e. in
    the next two weeks). It is unclear what the appellant knew about the proposed
    assignment transaction thereafter. There may also be credibility issues at play,
    as Mr. Mangat has been previously censured for his serious failure to disclose
    material facts to the court on a motion for an injunction involving the
    Property:
Sikh Lehar International Organization v. Suchet Saini et
    al.
, (28 January 2016), Brampton, CV-15-1855-00 (Ont.
    S.C.).

[70]

Nor did the motion judge make any findings about
    what SLIO knew, and when. In his affidavit of December 22, 2017, Mr. Mangat
    deposes SLIO did not know of the Agreement until the delivery of the Receivers
    motion materials on the motion to approve the sale of the Property. The
    Receivers motion materials are dated December 6, 2017. However, counsel for
    the Receiver advised both SLIOs litigation counsel and real estate counsel by
    emails dated November 24, 2017 that he intended to bring a motion to approve
    the sale of the property returnable January 5, 2018 if the assignment did not
    proceed. Counsel for the Receiver repeated this caution in his email of
    November 29, 2017. Indeed, as early as October 5, 2017, the Receiver had told
    SLIO that it would likely be in a position to market the Property by November
    1, 2017. It may be that Mr. Mangat incurred at least some  and perhaps most
    of the costs he did, purportedly on behalf of SLIO, with fair warning that,
    in the appellants words, the Receiver was riding two horses.

[71]

Also, in terms of the unfairness to SLIO, the
    motion judge made no findings about what the Receiver knew about Mr. Mangat incurring
    indebtedness in connection with the assignment, purportedly on behalf of SLIO.
    The motion judge also did not make any finding as to whether Mr. Mangat incurred
    these debts contrary to the receivership order, which empowers and authorizes
    the Receiver, to the exclusion of SLIO and all other persons, to manage SLIOs
    business and incur obligations.

[72]

Similarly, while the motion judge referred to
    what he described as inconsistent representations about the payout amount
    between counsel for the Receiver, counsel for SLIO, and counsel for the
    intended assignee as creating the unfairness to SLIO and the prospective
    assignee of the first mortgage, the evidence of SLIOs real estate counsel was
    that the delay was
entirely
the responsibility of ROI because of its failure to provide
    appropriate payout calculations of the amount owing [emphasis added]. More
    detailed findings may be required about the cause of the delay in settling the
    payout amount.

[73]

To be clear, I do not purport to make any of
    these factual findings; that is a matter for the motion judge on the new
    hearing, to the extent necessary to resolve the motion.

[74]

Fifth and finally, the issue raised by CCC
    regarding the form of the vesting order contemplated by the Agreement remains
    to be resolved.

Disposition

[75]

For these reasons, I would allow the appeal, set
    aside the order below, and order a re-hearing, on notice to all persons with an
    interest in the Property, including the lessees, and any execution creditors.

[76]

Subject to any further directions that the
    motion judge may provide, I would also direct that, for the re-hearing: (1) the
    Receiver provide a further report, detailing SLIOs current financial position,
    indicating how the sale and assignment options would affect SLIOs creditors, explaining
    what it told the appellant about the proposed assignment before entering into
    the Agreement, explaining what it told SLIO about the proposed sale, explaining
    what role it took in determining the amount outstanding under the first
    mortgage, and clarifying its position; (2) ROI provide a statement of the
    amounts owing under the first mortgage, indicating the extent to which interest
    on arrears has been calculated at a rate greater than the pre-default interest
    rate; and (3) SLIO provide a copy of its agreement with the proposed assignee
    of the first mortgage and evidence from the prospective assignee of the first
    mortgage, confirming what (if any) conditions to closing remain outstanding and
    that it is in funds and willing and able to close upon satisfaction of those
    conditions.

[77]

I would order that the appellant be entitled to
    his costs of the appeal, fixed in the amount of $19,100, inclusive of HST and
    disbursements.

Released: AH AUG 31 2018

Alexandra Hoy A.C.J.O.

I agree K.M. van Rensburg J.A.

I agree G. Pardu J.A.

[1]

In that action, the trial judge found that neither party was
    ready, willing and able to close the transaction, as at the contemplated
    closing date, and ordered SLIO and its two remaining trustees to pay a total of
    $2,206,729.07 to the appellant. An appeal of the decision is pending to this
    court.

[2]

CCCs action has been stayed by the receivership order in
    these proceedings.

[3]

While at the instance of the first mortgagee, ROI, the
    appointment ultimately proceeded with the consent of SLIO and CCC.

[4]
The Receiver received offers from: (1) the appellant; (2) 2207190 Ontario Inc.;
    and (3) Sukhmeet S. Sandhu. 2207190 Ontario Inc. is controlled by the appellant
    and is a judgment creditor in the action relating to the appellants prior
    attempt to purchase the Property: see
Sandhu v. Sikh Lehar International
    Organization
, 2017 ONSC 5680. In his affidavit dated December 22, 2017,
    Mr. Mangat deposes that Sukhmeet S. Sandhu is the appellants son.

[5]
In his affidavit sworn December 21, 2017, real estate counsel to SLIO advised
    that
the CPL was discharged before the hearing date on the
    motion below.

[6]

Counsel for the second mortgagee (who is also counsel for the
    proposed assignee of the first mortgage) advised at the hearing of the appeal
    that, as of that date, the second mortgage was in arrears.

[7]
In a letter dated October 31, 2017, the commercial real estate broker retained
    by the Receiver notes that there are visible roof leaks and a portion of the
    tar-gravel roof needs to be replaced immediately. The broker estimated that
    half of the HVAC units and a portion of the parking lot will need to be
    replaced. The broker also indicated that the exterior of the building requires
    immediate attention.


COURT OF APPEAL
    FOR ONTARIO

CITATION: Riga v. Ontario Lottery and Gaming Corporation,
    2018 ONCA 714

DATE: 20180831

DOCKET: C65168

Lauwers, Miller and Nordheimer JJ.A.

BETWEEN

John Paul Riga

Plaintiff (Appellant)

and

Ontario Lottery and
    Gaming Corporation, Gateway Casino Sault Ste. Marie, Alcohol and Gaming
    Commission of Ontario (AGCO), The Corporation of the City of Sault Ste. Marie,
    Sault Ste. Marie Police Service, Ontario Provincial Police, Royal Canadian
    Mounted Police, Prime Minister of Canada, Premier of Ontario, Liberal Party of
    Canada, Ontario Liberal Party, McCarthy Tétrault LLP, Any and/or all of the
    above ownerships, holdings, subsidiaries, employees, customers  direct or
    indirect  aka unknown companies (numbered companies, etc.), Jane Doe(s) and
    John Doe(s) et al.

Defendants (Respondents)

John Paul Riga, in person

Paul Johnston, for Ontario Lottery and Gaming
    Corporation

Laura Bevan, for Gateway Casino Sault Ste. Marie

Walter Ojok, for Alcohol and Gaming Commission of
    Ontario, Ontario Provincial Police and Premier of Ontario

Orlando Rosa, for Corporation of the City of Sault Ste.
    Marie and Sault Ste. Marie Police Service

Adrian Johnston, for Royal Canadian Mounted Police and
    Prime Minister of Canada

Jack Siegel, for the Liberal Party of Canada and the
    Ontario Liberal Party

Malcom Mercer, for McCarthy Tétrault LLP

Heard: In writing

On appeal from the judgment of Justice Edward Gareau of
    the Superior Court of Justice, dated February 27, 2018, with reasons reported
    at 2018 ONSC 1339

REASONS FOR DECISION

[1]

The plaintiff has filed a Notice of Appeal from the judgment of the
    motion judge who dismissed the plaintiffs action under r. 2.1.01 of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194 on the ground that it was frivolous
    and vexatious.  The respondents now seek to have the appeal dismissed on the
    same basis pursuant to the same rule.

[2]

In reaching his conclusion to dismiss the plaintiffs action, the motion
    judge said, at para. 8:

The allegations set out in the
    statement of claim are nonsensical. The statement of claim sets out allegations
    of perceived personal wrongs against the plaintiff which the defendants would
    have no liability in law for. In my view, the plaintiff has failed in the
    statement of claim to plead any material facts to disclose a cause of action
    against any of the defendants. To use the language set out in the
    jurisprudence, this is a clear case where the abusive nature of the proceedings
    is apparent on the face of the claim.

[3]

We agree with the motion judges conclusion respecting the underlying
    action.  The same observation can be made with respect to the Notice of
    Appeal.  It does not set out any grounds of appeal that demonstrate any merit.
    They simply amount, in essence, to a recitation of the same problematic
    allegations that are contained in the statement of claim.

[4]

The proposed appeal is frivolous and vexatious as those terms are used
    in r. 2.1.01.  Consequently, the appeal is dismissed.

P.
    Lauwers J.A.

B.W.
    Miller J.A.

I.V.B.
    Nordheimer J.A.