A corporation becomes dormant when it is no longer active. It cannot be re-registered. If the only director is deceased, he is unable to maintain the corporate responsibility of yearly reports and returns. As such, it is dormant. It is much like a person who is deceased and cannot re register his driver's license or his passport. Regina v. Ben Smith Regina v. Harry Smith, 1962 CanLII 100 (ON CA) Document History (0) Cited Documents (18) Cited by (16) CanLII Connects (0) PDF Date: 1962-09-04 Other citations: [1963] 1 OR 249 — 36 DLR (2d) 613 —[1963] 1 CCC 68 — 38 CR 378 Citation: Regina v. Ben Smith Regina v. Harry Smith, 1962 CanLII 100 (ON CA), , retrieved on 2019-06-11 Regina v. Ben Smith Regina v. Harry Smith [1963] 1 O.R. 249-271 ONTARIO [COURT OF APPEAL] PORTER, C.J.O., ROACH AND MCLENNAN, JJ.A. 4th SEPTEMBER 1962. Criminal law -- Theft -- Directors of company purchasing stock with company funds and pledging with bank as security for personal overdraft -- Cr. Code, s. 269(1). Accused, who were directors of B comapny, were convicted of stealing certain shares belonging to B company by pledging them with a bank to secure a personal overdraft. On evidence that accused, without the knowledge of the other directors and without any authority from the company, used company funds to purchase the shares in question which they then used, in circumstances involving secrecy, deceit and risk of harm to the company, to pledge with the bank for their own personal use, held, on appeal, that accused were properly convicted of theft under s. 269(1)(a) of the Criminal Code, 1953-54 (Can.), c. 51, in that they did "fraudulently...convert [the shares]...with intent to deprive, temporarily or absolutely, the owner...or a person who has a special *Leave to appeal to the Supreme Court of Canada refused November 5, 1962. property or interest [therein]" and it was immaterial that the accused, who certainly were not bailees of the shares, might have honestly intended, with reasonable prospects, to redeem the shares and pay back the company. It was also a conspiracy to commit murder when some wanted to know what happens to the business name if the only owner ended up dead. It is not an offence to collect money as a group for a wedding gift or to buy the new church land or property but it is an offence to collect money while intending only to see the owner dead. If he is dead, how can he sign a document to register your group as the new owner. You can buy Angel Ronan(TM) for $1.00 by emailing w.a.Lyon.angelronan@mail.com or phoning 1-914-539-7655. Any sums above $1.00 is unrequested gift. So, there is no need to have your entire group investigated as people who give money to own a business or rent a condo for ten months or more but do not have any contract. You may be more handsome than the current owner but your handsomeness is not reason to do anything illegally and nor is it reason to hope it can be done improperly. If the owner is dead, re registration of the name to someone else is blocked. Regina v. Ben Smith Regina v. Harry Smith, 1962 CanLII 100 (ON CA)

on

Regina v. Ben Smith Regina v. Harry Smith, 1962 CanLII 100 (ON CA)

 PDF
Date:
1962-09-04
Other citations:
[1963] 1 OR 249 — 36 DLR (2d) 613 —[1963] 1 CCC 68 — 38 CR 378
Citation:
Regina v. Ben Smith Regina v. Harry Smith, 1962 CanLII 100 (ON CA), <http://canlii.ca/t/g1kdq>, retrieved on 2019-06-11







Regina v. Ben Smith
Regina v. Harry Smith 
[1963] 1 O.R. 249-271
ONTARIO
[COURT OF APPEAL]
PORTER, C.J.O., ROACH AND MCLENNAN, JJ.A.
4th SEPTEMBER 1962.
Criminal law -- Theft -- Directors of company purchasing stock with company funds and pledging with bank as security for personal overdraft -- Cr. Code, s. 269(1).
Accused, who were directors of B comapny, were convicted of stealing certain shares belonging to B company by pledging them with a bank to secure a personal overdraft. On evidence that accused, without the knowledge of the other directors and without any authority from the company, used company funds to purchase the shares in question which they then used, in circumstances involving secrecy, deceit and risk of harm to the company, to pledge with the bank for their own personal use, held, on appeal, that accused were properly convicted of theft under s. 269(1)(a) of the Criminal Code, 1953-54 (Can.), c. 51, in that they did "fraudulently...convert [the shares]...with intent to deprive, temporarily or absolutely, the owner...or a person who has a special
*Leave to appeal to the Supreme Court of Canada refused November 5, 1962. property or interest [therein]" and it was immaterial that the accused, who certainly were not bailees of the shares, might have honestly intended, with reasonable prospects, to redeem the shares and pay back the company, or that in fact they subsequently did so to the eventual profit of the company, or that the accused were trustees for the company. Whatever their intentions or relationship with regard to the company, the accused still fraudulently intended to deprive it temporarily of a special property or interest in the shares, which includes the equitable interest of a cestui que trust, and hence they were guilty of theft.
Evidence -- Crown witnesses at theft trial previously giving testimony in inquiry under Securities Act, R.S.O. 1950, c. 351, s. 21 [now R.S.O. 1960, c. 363, s. 21] -- Section 24 of Act prohibiting disclosure without consent of Commission -- Crown cannot be ordered to furnish accused with copies of statements for use at trial where Commission refused consent.
APPEALS from convictions for theft following a trial with a jury before Gale, J. Affirmed.
The judgment of the Court was delivered by
[R. v. Wynn (1877), 16 Cox C.C. 231; R. v. Williams, [1953] 1 All E.R. 1068, [1953] 1 Q.B. 660; R. v. Hayes & Pallante, 1942 CanLII 106 (ON CA), [1942] 2 D.L.R. 85, 77 C.C.C. 195, [1942] O.R. 52; R. v. Mondt, 1933 CanLII 351 (ON CA), [1934] 1 D.L.R. 382, 60 C.C.C. 273, [1933] O.W.N. 101, distd; R. v. Hemingway, 1955 CanLII 41 (SCC), 1 D.L.R. (2d) 34, 112 C.C.C. 321, [1955] S.C.R. 712, consd; Rogers v. Arnott, [1960] 2 All E.R. 417; Solloway et al. v. McLaughlin, 1937 CanLII 289 (UK JCPC), [1937] 4 D.L.R. 593, [1938] A.C. 247; R. v. Vincent & West, (1852), 5 Cox C.C. 537; R. v. Hassal (1916), 1916 CanLII 426 (MB QB), 34 D.L.R. 370, 27 C.C.C. 322, refd to] [Mahadeo v. R., 1936 CanLII 370 (UK JCPC), [1936] 2 All E.R. 813; R. v. Silvester & Trapp (1959), 1959 CanLII 476 (BC SC), 125 C.C.C. 190; R. v. Finland (1959), 1959 CanLII 445 (BC SC), 125 C.C.C. 186; R. v. Weigelt (1960), 1960 CanLII 452 (AB CA), 128 C.C.C. 217, distd]
G.A. Martin, Q.C., and E.P. Hartt, for appellants.

Peter White, Q.C., for respondent.
MCLENNAN, J.A.: -- The appellants were tried before Gale, J., and a jury on counts 4 to 7 inclusive in an indictment containing seven counts. The appellants had been tried on the first three counts and were acquitted on those counts on December 17, 1959.
Counts 4, 5, 6 and 7 are as follows:
4. The said jurors further present that the said Ben Smith and Harry Smith during the months of December, 1956, to April, 1957, inclusive, at the City of Toronto in the County of York and elsewhere in the Province of Ontario did steal 20,500 shares of New Chamberlain Petroleums Limited, the property of Brilund Mines Limited, value to exceed fifty dollars ($50.00), contrary to the Criminal Code.
5. The said jurors further present that the said Ben Smith and Harry Smith during the months of December, 1956 to April, 1957, inclusive, at the City of Toronto in the County of York and elsewhere in the Province of Ontario, by deceit, falsehood or other fraudulent means did defraud Brilund Mines Limited of $39,746.50 in money more or less, representing the proceeds of the sale of 20,500 shares of New Chamberlain Petroleum Limited more or less, the property of Brilund Mines Limited, contrary to the Criminal Code.
6. The said jurors further present that the said Ben Smith and Harry Smith during the months of December, 1956 and April, 1957, inclusive, in the City of Toronto in the County of York and elsewhere in the Province of Ontario did steal $39,746.50 in money, more or less, the property of Brilund Mines Limited, contrary to the Criminal Code.
7. The said jurors further present that the said Ben Smith and Harry Smith during the months May, June, July, August, September and up to the 2nd day of October, 1956 in the City of Toronto in the County of York did steal 240,000 shares of New Chamberlain Petroleum Limited to a value exceeding $50.00 the property of Brilund Mines by pledging the said shares with The Imperial Bank of Canada, King & York Streets Branch, to secure an overdraft of the joint account of the said Ben Smith and Harry Smith at the said Branch, contrary to the Criminal Code.
The trial commenced on April 12, 1960. At the conclusion of the case for the Crown an application was made to the presiding for a directed verdict of acquittal on the ground that a prima facie case had not been made out on any of the counts. After a prolonged argument the learned trial Judge directed the jury to return a verdict of not guilty on count 5 and directed that the trial proceed upon the remaining three counts.
The accused then gave evidence in their defence and on June 21, 1960, the jury returned a verdict of acquittal on counts 4 and 6 and of guilty on count 7. Each accused was sentenced to imprisonemnt for two years less a day.
Before discussing the grounds of appeal it is desirable to describe the persons and companies involved and their relationship to each other together with a chronological statement of the main facts appearing in evidence.
The appellants are brothers with experience over a number of years in financial and business affairs in which they were engaged from time to time together, and also at times with other members of their family. They also have an interest in the estate of Samuel Smith which has very substantial assets.
Brilund Mines Limited (herein called Brilund) is a public company incorporated in the Province of Ontario in 1952. The appellants were directors of Brilund and the appellant Ben Smith was vice-president. One G.M. Ferguson, a solicitor, was president and the other directors of the company were Robert Amell and A.B. Lockley. The appellants were in effective control and management of the company. Ferguson was described by the learned trial Judge in his charge to the jury as the appellants' "man". The other directors, Lockley and Amell, took little interest in the company or its financial affairs. The signing officers of the company were Ferguson and either of the appellants.
The Imperial Bank, King & York Streets branch (herein called the Bank) was banker for Brilund and for the appellants. The appellants had individual bank accounts and security safe- keeping accounts and also a joint bank account and a joint securities safe-keeping account at the Bank. The manager of the branch was one Findlay.
A.E. Osler and Company Limited (herein called Osler) are a firm of stockbrokers in Toronto with whom the appellants did business. Osler also held a securities account for the Bank.
Early in 1956 one Harbinson and Roy Smith -- the latter is not related to the appellants -- became interested in Chamberlain Gas and Oil Limited, the shares of which were reported to be greatly undervalued compared with its assets which consisted of oil and gas reserves in western Canada. Funds were required to develop those assets. Harbinson and Roy Smith, having had previous financial dealings with the appellants, approached them for assistance. As a result of negotiations the capital structure of Chamberlain Gas & Oil Ltd. was changed and its corporate name was changed to New Chamberlain Petroleums Limited (herein called New Chamberlain).
The financing was arranged for under the terms of an underwriting agreement dated April 3, 1956, between New Chamberlain and Osler. The latter acted as agents for the appellants and Harbinson and Roy Smith, who by arrangement with Osler were to provide the money with which to purchase the shares. Under the terms of the agreement Osler agreed to buy 600,000 shares of New Chamberlain at $1 per share on or before April 20, 1956, with an option to purchase 200,000 shares in 90 days at $1.25 per share and 200,000 shares within 180 days at $1.50 per share. At that time the shares of New Chamberlain were selling on the market at $1.70 per share. The price rose steadily thereafter to a range of from $2 to $2.25 per share.
The agreement between the appellants and the Harbinson group with reference to the firm commitment of 600,000 shares was that the appellants would buy 240,000 shares, the Harbinson group 160,000 shares and the remaining 200,000 shares were to be divided equally between Brilund, Spooner Mines and Oils Limited and Highwood Sarcee Oils Limited. The appellant Ben Smith and Harbinson had substantial interests in the two last- mentioned companies. Part of the agreement was that if the Harbinson group could nor raise funds to pay for their 160,000 shares the appellants finance them to the extent necessary.
On April 18, 1956, the appellants applied to the Bank for a credit of $240,000. The purpose of the credit, according to Findlay and the appellants, was to purchase the 240,000 shares of New Chamberlain. Findlay also said that the appellants told him they proposed to buy a controlling interest in New Chamberlain. The application for credit was an internal banking document prepared by the Bank for submission to its head office. The appellants did not see this document but it shows as supporting the application for credit at this time a pledge of 240,000 shares of New Chamberlain. Findlay's evidence is that the information on the application for credit was obtained from the appellants or one of them. His evidence on this point agrees with the appellants' evidence that it was what he called an anticipatory pledge effective only if the credit was used. The credit was in fact not used.
On April 20th Osler received a letter and cheque. The letter is in the following terms:
Dear Sirs,
Enclosed find cheque in the amount of $469,539.66 in payment for 220,333 shares New Chamberlain Oils underwritten for our account and 240,000 shares for an account to be designated "Ben Smith in trust".
Yours faithfully, Brilund Mines Limited. (per) Ben and Harry Smith.
The cheque was signed in like manner.
The 460,333 shares referred to in the letter and paid for by Brilund were made up as follows: the 240,000 shares which the appellants had agreed to take, 66,666 shares to which Brilund was entitled, 66,666 shares which Spooner Mines & Oils Ltd. were entitled to but could not buy, and 87,000 shares financed by Brilund for the Harbinson group.
Osler opened an account for "Ben Smith in trust" and 240,000 shares represented by Cert. No. N.C. 561, which was in street form, was allocated to that account. It is this block of shares which is the subject-matter of count 7.
The evidence is that the other directors of Brilund knew nothing about the letter or Brilund's payment for the shares at that time. Ferguson was told some considerable time later and Lockley and Amell never knew about it at any relevant time.
The appellants said that they caused Brilund to pay for the shares on the advise of a business associate, one Goldstein, as there was a possible income tax advantage to them and that they intended to pay Brilund for the shares plus a mark up of 15[ per share amounting to a total of $36,000 for the accomodation which was at the same rate that Harbinson had agreed to pay.
On April 23rd the appellants made an application to the Bank for three loans, one of which was for $240,000 for the purpose of purchasing the 240,000 shares. Findlay stated that at this time the appellants offered the shares to the Bank as security.
On April 24th the appellant Ben Smith by letter instructed Osler to transfer "free" the 240,000 shares to the Bank's securities account to be held subject to the Bank's instructions. Osler complied with these instructions and wrote to the Bank stating that the shares were held in the name of the Bank and would be delivered to it on demand. The other directors of Brilund said they knew nothing of this transaction. The appellant Harry Smith could not remember but said he would have approved of it had he known of it. The appellant Ben Smith said he caused the letter to be written so that the shares would be availible as security if, but only if, the Bank credit was used. This position the appellants maintained throughout with the respect to the various applications for credit and that the shares were never offered as security except if the Bank advanced the funds to pay for the shares.
This credit was not used. Findlay said that the explanation given to him by the appellants was that they had arranged to finance the shares through their own brokers. At the trial the appellants said that they did not use the credit and buy the shares because Goldstein told them that the possible tax advantage would be lost if they paid for the shares too soon after Brilund had bought them. Goldstein stated in his evidence that he remembered some discussion about tax advantage but could not recall any particulars.
On May 16th the Bank wrote to Osler stating it had no further interest in the shares and that they should be released to the appellants.
On May 23rd the appellants applied to the Bank for credit of $200,000 for the purpose of acquiring securities, other than New Chamberlain and also to cover an overdraft in their joint account amounting to $32,173. Findlay said that there was a revision at this time of the entire credit previously extended to the appellants. Included in the securities pledged were the 240,000 shares of New Chamberlain and Findlay said the credit was granted on the basis of a letter to be received from Osler addressed to the Bank stating that the 240,000 shares were held in the Bank's securities account at Osler's and subject to the Bank's instructions. Such a letter was received by the Bank from Osler dated May 30th and it was in identical terms to the letter of April 24th. The appellants in their evidence denied instructing Osler to write such a letter and said they knew nothing about it. Lauber of the Osler firm stated he did have instructions from the appellants to write the letter although he could find no written instructions. He said it was not his firm's practice to deal with matters of this importance without written instructions. Osler did in fact place the 240,000 shares in the Bank's safe-keeping account and they remained in that account until August 28, 1956. The credit applied for was used because by May 30th the appellants' overdraft had increased to $165,306.
As part of the credit revision the appellants signed a document called "General Pledge of Collaterals". This document applied to all shares and securities lodged with the Bank and any future substitutions therefor and included the list of securities in the schedule attached. In that schedule appeared 240,000 shares of New Chamberlain. The appellants signed the general pledge but did not sign the schedule. Their evidence is that they did not read the document or know what it was and as far as they knew there was no schedule annexed to the pledge.
On July 23rd the appellants applied to the Bank for credit of $345,000. Findlay said one or both appellants told him the credit was to meet the overdraft in their joint account which was then $194,000 and to provide funds for the purchase of Brilund shares. In addition to the securites previously pledged, a guarantee of the indebtedness by the estate of Samuel Smith was included in the documents and securities in support of the application. It is not in dispute that the assets of this estate amounted to between three and four million dollars.
On August 27th there was a meeting of the directors of Brilund. The formal minutes (ex. 137F) show that the appellants, Ferguson, Amell and Lockley were present and there is evidence that Goldstein and Harbinson were also there. The minutes state that the appellant Ben Smith reporting the underwriting and commitments of Brilund respecting the shares of New Chamberlain. A resolution was passed authorizing the appellant Ben Smith to buy and sell shares on behalf of Brilund provided he reported and made full disclosure to the other directors. Ferguson says this confirmed an oral authority given within the previous six weeks. No particulars of this report were stated in the minutes other than that the appellant Ben Smith advised the meeting that Brilund had purchased or was holding 200,000 shares of New Chamberlain. These shares were not part of the 240,000 shares in question. It is obvious from the notes made by Ferguson, the president, that the minutes did not disclose all that took place. Ferguson said that the appellant Ben Smith told him at the meeting that the 240,000 share block was in Brilund's name but that Brilund owned beneficially an additional 200,000 shares. The evidence of the other directors is inconclusive as to what, if any, disclosure was made. On the same day Ferguson, as president of Brilund, in a letter directed Osler to deliver free the 240,000 shares and another block of 64,000 shares to the Bank and to hold 200,000 shares in the Brilund account. This was done. Ferguson said he did not know why the shares went to the Bank and the other directors said they did not know anything about it.
On August 28th the appellant Ben Smith wrote to Osler (ex. 34) implementing the Ferguson letter and stating that Brilund owned the 240,000 shares and that the shares were subject to the instructions of Brilund. The shares were delivered to the Bank and the certificate for 240,000 shares was placed in the safe-keeping account in the joint names of the appellants. Findlay said he received instructions from the appellants only respecting the account. Although both lots of shares admittedly belonged to Brilund the appellants as individuals signed a receipt and order form for the 64,000 shares which were placed in the account of the appellant Harry Smith at the direction of both appellants. The appellants deny any knowledge that the two lots of shares were credited to their safe-keeping account. Findlay said that he did not know about the letter from the appellant Ben Smith to Osler which stated that the shares were owned by Brilund but that he believed on information given to him by the appellants that the shares were owned by the appellants.
On September 28th, the appellants applied for credit in the sum of $650,000 (ex. 82 A & B) involving an increase of $305,000 over the previous credit. In that application the 240,000 shares of New Chamberlain are shown as a pledge. Findlay stated that these shares were part of securities pledged by the appellants to secure the overdraft at that time amounting to $211,500, $40,000 required for purchase of New Chamberlain shares and $265,000 to pay for a hotel in Cuba.
At some time not earlier than September, 1956, (ex. 116) an option from Brilund to Chapcoe Investment Corporation Ltd. had come into existence. It was dated May 22, 1956, and purported to be a grant of an option by Brilund to Chapcoe to buy 304,000 shares of New Chamberlain at $1.15 per share.
The period covered by the charge ended October 2, 1956. Twelve thousand shares were disposed of in October. The balance of the shares were sold in January and February of 1957. The disposition of these shares was effected by a very complicated process with the shares and the proceeds passing from one company to another and the proceeds of the sale of the shares ultimately found their way back to the account of the appellants who retained the proceeds until April 18th when all the proceeds were paid to Brilund at $1 per share plus a mark up of 15[ per share.
From Ocotber 2nd until April 18th the balance of the shares from time to time remaining unsold were under pledge with the Bank.
During the entire period from April, 1956, to April, 1957, the joint bank account of the appellants was always overdrawn with the exception of two days in January, 1957.
The following are the relevant parts of the sections of the Criminal Code, 1953-54 (Can.), c. 51, discussed in the argument of the appeal:
269(1) Every one commits theft who fraudulently and without colour of right takes, or fraudulently and without colour of right converts to his use or to the use of another person, anything whether animate or inanimate, with intent,
(a) to deprive, temporarily or absolutely, the owner of it or a person who has a special property or interest in it, of the thing or of his property or interest in it,
(b) to pledge it or deposit it as security,
(c) to part with it under a condition with respect to its return that the person who parts with it may be unable to perform, or
(d) to deal with it in such a manner that it cannot be restored in the condition in which it was at the time it was taken or converted.
(2) A person commits theft when, with intent to steal anything, he moves it or causes it to move or to be moved, or begins to cause it to become movable.
(3) A taking or conversion of anything may be fraudulent notwithstanding that it is effected without secrecy or attempt at concealment.
(4) For the purpose of this Act the question whether anything that is converted is taken for the purpose of conversion, or whether it is, at the time it is converted, in the lawful possession of the person who converts it is not material.
274. A person may be convicted of theft notwithstanding that anything that is alleged to have been stolen was stolen
(a) by the owner of it from a person who has a special property or interest in it,
(b) by a person who has a special property or interest in it from the owner of it,
(c) by a lessee of it from his reversioner,
(d) by one of several joint owners, tenants in common or partners of or in it from the other persons who have an interest in it, or
(e) by the directors, officers or members of a company, body corporate, unincorporated body or of a society associated together for a lawful purpose from the company, body corporate, unincorporated body or society, as the case may be.
276(1) Every one commits theft who, having received anything from any other person on terms that require him to account for or pay it or the proceeds of it or part of the proceeds to that person or another person, fraudulently fails to account or pay it or the proceeds of it or part of the proceeds of it accordingly.
282. Every one who, being a trustee of anything for the use or benefit, whether in whole or in part, of another person, or for a public or charitable purpose, converts, with intent to defraud and in violation of his trust, that thing or any part of it to a use that is not authorized by the trust is guilty of an indictable offence and is liable to imprisonment for fourteen years.
The grounds of appeal put forward by counsel for the appellant are as follows:
1. There was no evidence of intent by the appellants to pledge the shares and no motive for doing so.
2. There was insufficient evidence to show that the appellant Harry Smith had any intent to pledge the shares.
3. The learned trial Judge erred in his direction to the jury as to the meaning of the word "fraudulently" in s. 269 of the Criminal Code.
4. There was no evidence of fraudulent intent as required by s. 269(1) of the Code.
5. Brilund had only one equitable interest in the shares. Such an interest is not a "special property or interest" within the meaning of s. 274 of the Criminal Code and if there was any crime committed it was a criminal breach of trust under s. 282.
6. The verdict of the jury convicting the accused on count 7 is inconsistent with the verdict of acquittal on counts 4 and 6 as the verdicts of acquittal negative the existence of facts essential to a conviction under count 7.
7. Section 269 only applies to things in specie. On the evidence the appellants had the right either to pay Brilund for the shares or deliver 240,000 shares to that company. As the appellants paid for the shares there was no theft by persons required to account under s. 276.
8. The learned trial Judge erred in failing to direct the prosecution to make availible to counsel for the appellants at the opening of the trial the sworn statements of witnesses to be called at the trial and which were made on a previous occasion. The argument on the first ground of appeal is that if there was any pledge it was the unilateral act of the Bank, because the appellants deny any intention to pledge the shares. It is said the appellants' denial is supported by the fact that the Bank did not, in accordance with its usual practice, indicate on the appellants' joint securities safe-keeping account that the securities listed were pledged; that the appellants had no motive to pledge the shares in view of the guarantee of their indebtedness by the Smith estate; that the shares were classified as "junior" securities on which the Bank did not loan money and lastly that the delivery of the certificate by the Bank to Osler on October 2nd for the purpose of abstracting 12,000 shares was inconsistent with the existence of any pledge at all.
With respect to the delivery by the Bank of the certificate for the 240,000 shares the delivery slip from the Bank to Osler accompanying the certificate is clearly marked as an overdelivery of 228,000 shares so the Bank never really lost control of them. The Crown does not have to prove motive because motives may be undiscernible and while absence of motive may be a weakness in the Crown's case it is far from fatal: Wigmore on Evidence, 3rd ed., vol. I, p. 559; Best on Evidence, 12th ed., p. 389.
On the other hand Findlay said that in the second application for credit in April the appellants offered the shares to him as security for the credit. While the appellants did not use this credit it is cogent evidence of an intent to pledge. Findlay's evidence is also quite clear that upon the occasion of the credit revision in May of 1956 it was granted on the basis of a letter from Osler stating that the shares were held in the Bank's name and that letter was forwarded to the Bank. The shares were in the Bank's name at Osler's from May 30th to August 27th and then were transferred to the Bank and placed in the appellants' securities account. I find it impossible to believe, having in mind the value of the shares and what was done in relation to them, that the appellants did not have the intention to pledge the shares and know they were pledged and there was ample evidence for the jury to so find.
Counsel for the appellants submitted that there was unsufficient evidence connecting the appellant Harry Smith with any pledge of the shares. It was put that the only evidence against Harry Smith was his signature on the general pledge of collaterals and the receipt and order form of August 28th and his direction to Osler to deliver some 12,000 shares from the 240,000 shares on October 2nd. In addition to that the 240,000 shares were in a safe-keeping account jointly held by the appellants. The evidence of Findlay and Lauber is that while the appellant Ben Smith was the more active, the appellants were working together in respect of this matter as they had in respect of other matters and Findlay said that in part he received information and instructions from Harry Smith with respect to the applications for credit. It is my view that if there was an offence committed there was ample evidence that Harry Smith was a party to it.
The third ground of appeal is that the learned trial Judge erred in his charge to the jury in defining the meaning of the word "fraudulently" in relation to the charge contained in count 7 in that he should have told the jury that the intention required to be shown was to deprive Brilund permanently of the shares or place them in jeopardy under circumstances which might preclude their redemption and further that if the appellants had an honest intention to redeem the shares pledged and the ability to do so then what was done was not done fraudulently and the appellants should be acquitted. No objection was taken and none could be taken to the instruction of the learned trial Judge to the jury as to the general meaning to be attached to the word "fraudulently" and the complaint is essentially one of non-direction.
The basis in the evidence for the direction sought was that since the appellants did redeem the shares there was evidence that there was intention permanently to deprive Brilund of the shares and there was evidence fo an honest intention to redeem them because they did not pay for them until April, 1957, and the appellants always had the ability to redeem the shares through the credit at their command by reason of the guarantee of their indebtedness by the Smith estate.
The basis in law for the direction sought according to counsel for the appellants was that the appellants were bailees of the shares and at common law the intent that must be proved is an intent to deprive the owner permanently of the shares and if the bailee pledged the thing bailed and was charged with theft, if he could show that he had an honest intention to redeem and the ability to do so it was not larceny because it was not done fraudulently. Counsel referred us to Glanville Williams, Criminal Law, 2nd ed., p. 322; Kenny's Outlines of Criminal Law, 17th ed., p. 255; R. V. Wynn (1877), 16 Cox C.C. 231, and R. v. Williams, [1953] 1 All E.R. 1068, [1953] 1 Q.B. 660. It was further submitted that the Criminal Code made no change in the common law in respect of theft by a bailee by pledging as defined in s. 269(1)(b) of the Code although such a change was made in cl. (a) by the use of the word "temporarily". At common law the intent required was to deprive the owner permanently of the thing taken or converted.
The first three authorities discussed theft by bailees by pledging, and the Williams case was one of embezzlement. They bear out in a general way the submission made by counsel for the appellants. Glanville Williams gives the instance of a bailee of coins spending them for his own purpose intending to replace them immediately with his own money which is availible. That conduct, the learned author says, would be irregular but not fraudulent. In Kenny, it is stated that the pledging may create a prima facie presumption of conversion which is not, however, conclusive because the bailee may be able to raise doubt of his guilt by evidence that he honestly intended to redeem and he had a reasonable prospect of doing so. To the same effect is that statement of Lord Coledridge, C.J., in the Wynn case and Lord Goddard in the Williams case as the judgment is reported in the All England Reports but the statement does not appear in the Queen's Bench Reports.
The learned trial Judge was right in refusing to charge the jury as requested by counsel for the appellants. A bailment can only arise by way of contract, express or implied: 2 Hals., 3rd ed., p. 94. The appellants acquired possession and control of the shares without the consent or knowledge of Brilund. A contract, express or implied, requires two parties and here there was only one, the appellants. Assuming that as a matter of law a bailee charged with theft by pledging may be entitled to an acquittal if he honestly intended to redeem and had the means of doing so that principle does not apply to these appellants because they were not bailees. The evidence of the appellants was that they did not intend to pledge the shares and that the shares were not pledged. If they did not intend to pledge they could have no intention to redeem later, because according to their evidence there would be nothing to redeem later. The appellants' applications for credit in April were stated to be for the purpose of paying for the shares. On May 23rd the application for credit was to secure the appellants' overdraft. There was evidence before the jury that there was an intentional pledge of the shares for that purpose on the condition imposed by the Bank that the appellants secure a letter from Osler that the shares were held in the Bank's name and such a letter was obtained. The contrasting purposes of the applications for credit in April and in May make it clear that the purpose of the pledge in May was to secure an overdraft and not pay for the shares. There was a conversion of the shares in May: Rogers v. Arnott, [1960] 2 All E.R. 417. It does not follow that because Brilund was paid for the shares in the next year, particularly after considering the evidence of some change in intent as to what was to be done with shares as shown by the meeting of the board in August and the Chapcoe option agreement of September, that there was an intent to redeem the shares in May. The only contemporaneous evidence of an intent to redeem in May is the date of the Chapcoe option agreement -- May 22nd, the day before the application for credit. That agreement spelled out the price of $1.15 per share for Brilund. That date was a false date for the document did not come into existence until September. There was no evidence of an honest intent to redeem at the time the pledge took place in May.
I am unable to agree that the liability to redeem was as clear as counsel suggested. In the instance given by Glanville Williams, the bailee had money of his own readily availible but it was his own money over which he had absolute control. In this case the appellants did not have absolute control over the funds necessary to buy these or other shares. Their ability to either buy other shares or buy shares which were under pledge with the Bank depended on the continued goodwill of the executors of the Smith estate and on the continued acquiescence of the Bank.
In any event I am not at all satisfied that cls. (a) and (b) pf s. 269(1) are mutually exclusive. Count 7 charges the appellants that they "did steal 240,000 shares" of New Chamberlain. In that count particulars of the way in which the conversion was effected are stated to be by the pledging of the shares. Theft by an actual pledge of the shares would come within the words in cl. (a) or (c) of s. 269(1). In my opinion if there was a fraudulent conversion by pledging with the intent described in cl. (a) there should be a conviction in this case.
The fourth ground of appeal is that there was no evidence of fraudulent intent. As directors of Brilund the appellants' relation to teh company was a fiduciary one. Without the knowledge of the other directors and without any authority from the company the appellants used company funds to purchase shares which they took possession of and pledged with the Bank for their own personal use, an action quite inconsistent with Brilund's ownership or interest in the shares. While there is some evidence that the appellants told the other directors some three months after the pledge took place that Brilund acquired the shares there is evidence that the directors were not told that the shares were pledged to secure the appellants' overdraft. There is evidence of actual deceit because the appellants told the Bank that the shares belonged to them/and they told Osler that the shares belonged to Brilund.. The Chapcoe option agreement, the vehicle through which the shares were disposed of was dated May 22, 1956. The document did not come into existence until late in September of that year. The jury could have concluded as a fair inference that the appellants caused the document to be prepared with a false date which would serve their interest if accepted as the true date in that it provided evidence of an intention to redeem in May at the time of the pledge.
In Stephen's History of the Criminal Law, 1883, vol. II, pp. 121-2 two essential elements of fraudulent intent are stated to be
deceit or an intention to deceive or in some cases mere secrecy; and, secondly, either actual injury or possible injury or an intent to expose some person either to actual injury or to a risk of possible injury by means of that deciet or secrecy.
In vol. III of the same work the learned author adds to these two essential elements a possible third element, really implicit on the first one, which is that the conduct must not only be wrongful but intentionally and knowingly wrongful. Lord Goddard in the Williams case referred to that aspect when he says that "fraudulently" means what was done was done intentionally and without mistake.
All these elements are present in this case. There is evidence of actual deceit and intention to deceive and secrecy. There is evidence at the very least of exposing Brilund to injury in that the shares were placed under the control of the Bank and if the affairs of the appellants did not prosper, an event not unknown in the business of finance, the shares would be lost to Brilund.
It was argued that the appellants were authorized to do what they did by reason of the resolution passed at the meeting of August 27, 1956. The resolution does not give the appellants such authority. Even if it did it was subject to a condition as to a full report to the directors which was not fulfilled. The authority in the resolution was not retroactive and while Ferguson said previous oral authority had been given to the appellant Ben Smith by the directors it was given not more than six weeks prior to the meeting of August 27th and was not effective at the time the shares were pledged.
Much was made of the fact that Brilund suffered no loss but made a profit of some $36,000 from what occurred. No doubt the jury were acquainted with this fact but in any event I think the answer to that proposition is to be found in the words of Lord Atkin in Solloway et al. v. McLaughlin, 1937 CanLII 289 (UK JCPC), [1937] 4 D.L.R. 593 at p. 597, [1938] A.C. 247 at p. 259:
...fortunately for the commercial community the law has many effective forms of relief against dishonest agents: and no injustice is done to the principle benefits as he occasionally may by the superior astuteness of an unjust steward in carrying out a fraud.
In Rogers v. Arnott, [1960] 2 All E.R. 417, it is stated that the fact that the person from whom the goods were stolen suffers no detriment is immaterial.
In my opinion there is ample evidence of fraudulent intent and this ground of appeal fails.
The fifth ground of appeal is that on the evidence there would be no theft as that offence is defined in s. 269(1) of the Code. It is based on the proposition that the appellant Ben Smith, by virtue of the letter dated April 20th purporting to be from Brilund and addressed to Osler, was a trustee with the legal title to the shares; that Brilund had only an equitable interest as cestui que trust and that such an interest is not "a special property or interest" as those words are used in s. 274 of the Code. The argument is that these words refer only to special property or interests recognized by the common law such as the property of a bailee, lienholder and the like and consequently if there was any offence committed it was under s. 282 of the Code which defines what is known as a criminal breach of trust.
The first question to consider is whether the relationship of trustee and cestui que trust is the true relationship which existed between the appellant Ben Smith and Brilund. The letter just referred to is already set out earlier in these reasons.
In his evidence at the trial the appellant Ben Smith gave the following evidence:
Q. What was the reason for segregating 240,000 shares in an account to be designated as Ben Smith in Trust? A. Well in my mind I was holding the shares for Brilund but they were more or less segregated for the reason I had some call, so they were designated for myself and my brother.
Q. At what price to Brilund? A. $1.15
And in cross-examination he said, when asked about the letter:
Q. That was your language, was it? A. I don't know whose language it was. I can't recall, really, whose language. I know the stock was separated to more or less designate 240,000 shares to be in more or less -- labelled for ourselves and was put in the Ben Smith Trust account, but it was held in trust for Brilund with this label for ourselves.
Q. It was held by you in trust for Brilund? A. That is right, I don't think I have ever denied that.
. . . . .
Q. Well, that language was there and you adopted it; is that the situation? A. In my mind, this stock was put in the trust account, in trust for Brilund only for the reason I have previously given you.
It is common ground that the shares were owned by Brilund. The appellant Ben Smith stated that to be the fact in his letter to Osler dated August 27th and that was the evidence of the appellants at the trial. According to the evidence just quoted the appellants' position is that they had a right to buy the shares from Brilund at $1.15 per share, a right which they felt acquired protection of some kind and as a result the shares were placed in the account designated "Ben Smith in Trust". A similar protection was not given to Harbinson whose shares Brilund was supposed to have financed on precisely the same basis as the appellants'. These shares were held by Brilund in its own name. The mere fact that the words "Ben Smith in Trust" were used in the letter does not mean that the real relationship between the appellant Ben Smith and Brilund was that of trustee and Cestui que trust. The supposed trust was purported to be created by Brilund, but Brilund never put its corporate mind to it. It is more than peculiar that the appellants deemed this protection was even remotely necessary. In the applications for credit to the Bank in April the appellants requested a credit of $240,000, the amount required to purchase the shares at $1 and not a credit for $276,000, the amount required to purchase the shares at $1.15. The Chapcoe option agreement which established the price of $1.15 per share was falsely dated May 22nd when in fact it was prepared until September. Under these circumstances it would be quite open to a tribunal to disregard the words "in trust", and reject the evidence of the appellants as to why that term was used, including their evidence of intention to treat the shares in the same way as the Harbinson shares and conclude that it was part of the scheme of the appellants to acquire and use for their own purpose, shares owned by Brilund.
Assuming there was a trust of some sort then a consideration of the evidence and the letter might lead to the conclusion that the appellant Ben Smith was trustee for Brilund as owner and for himself and the appellant Harry Smith to protect what was referred to as "some call on the shares" or that the only equitable interest was that of Brilund as owner. It makes no difference which view is accepted -- Brilund had an equitable interest as owner in either case. This type of trust would be what is described by Lewis on Trusts, 15th ed., p. 14, as a simple trust as distinguished from a special trust. A simple trust is stated to be as follows:
The simple trust is where property is vested in one person upon trust for another, and the nature of the trust, not being prescribed by the settlor, is left to the contruction of law. In this case the cestui que trust has ...the right to be put into actual possession of the property, and...the right to call upon the trustee to execute conveyances of the legal estate as the cestui que trust directs.
Brilund therefore had the right to possession of the certificates on demand or to payment of $115 per share.
Notwithstanding an able and persuasive argument by counsel for the appellants based on the history of the offence of theft I am not persuaded that the words "special property or interest" do not include such an equitable interest as Brilund had. The words are words of broad import and in their natural and ordinary meaning would include such an interest. It is true that the words "special property" are used in cases under the English Larceny Act as for example in R. v. Vincent & West (1852), 5 Cox C.C. 537. Support is also to be found for Mr. Martin's argument in R. v. Hassal (1916), 1916 CanLII 426 (MB QB), 27 C.C.C. 322, 34 D.L.R. 370, where Cumberland, Co.Ct.J., said that in his opinion the words covered nothing more that was covered by such expressions as "special property" and "special ownership" used in the English larceny cases.
In R. v. Hemingway, 1955 CanLII 41 (SCC), 1 D.L.R. (2d) 34, 112 C.C.C. 321, [1955] S.C.R. 712, the origins of the Criminal Code are discussed. In 1880 a Royal Commission in England appointed for that purpose, submitted a draft Criminal Code for the purpose of reducing the law to a more orderly system, free from technicalities. That report became the basis for the first Canadian Criminal Code of 1892. The English draft Code never became the law of England.
While the Hemingway case dealt with the offence of obtaining goods by false pretences under the then s. 405(1) of the Criminal Code, R.S.C. 1927, c. 36, the principles stated are applicable to the present case and the construction to be placed upon the words "special property or interest". Estey, J., in a judgment concurred in by Kerwin, C.J.C., and Abbott, J., had this to say at pp. 45-6 D.L.R., p. 334 C.C.C., pp. 718-9 S.C.R., with reference to the Criminal Code:
Its provisions effected many changes which principle and experience dictated and by restatement was intended to remove technicalities and clarify the criminal law. As such, s. 405, as well as the entire statute, is, in the language of their Lordships of the Privy Council, "an original enactment with no trace of its origin or history to be found either in its terms or in any other" legislation of the Parliament of Canada: A.-G. Ont. v. Perry, 1934 CanLII 275 (UK JCPC), [1934], 4 D.L.R. 65at p. 69, A.C. 477 at p. 483. It was there held that a section of the Ontario Succession Duty Act, "obviously borrowed", but not indentical, should be construed as an "original" section. It should, therefore, be construed in a manner that gives effect to the intention of Parliament as expressed in the language there adopted. Of course regard must be had to its language in relation to the statute as a whole but its history ought not to be examined except in the case of ambiguity, and then, as stated by their Lordships of the Privy Council, that "is always a process of construction which is accompanied with much danger": Ouellette v. C.P.R. Co., 1925 CanLII 482 (UK JCPC), [1925], 2 D.L.R. 677at p. 681, A.C. 569 at p. 575.
Assuming there is an ambiguity in meaning of the words "special property or interest" then the legislative history may be looked at with that caution referred to in the Ouellette case to resolve the ambiguity.
The Larceny Act, R.S.C. 1886, c. 164, s. 65 contained a provision making the fraudulent conversion or appropriation of trust property an offence. The offence was originally created in 1869, 32-33 Vict., c. 21, s. 81. The offence is now defined in s. 282.
The Larceny Act, 1886 contained two other sections which are material -- namely ss. 58 and 85 which are as follows:
58. Every one who, being a member of any co-partnership owning any money or other property, or being one of two or more beneficial owners of any money or other property, steals, embezzles or unlawfully converts the same or any part thereof to his own use...is liable to be dealt with, tried, convicted and punished as if he had not been and were not a member of such co-partnership, or one of such beneficial owners.
85. Every one who, unlawfully and with intent to defraud, by taking, or embezzling, by obtaining by false pretences, or in any other manner whatsoever, appropriates to his own use or to the use of any other person, any property whatsoever, so as to deprive any other person temporarily or absolutely of the advantage, use or enjoyment of any beneficial interest in such property in law or in equity, which such other person has therein, is guilty of a misdemeanor, and liable to be punished as in the case of simple larceny; and if the value of such property exceeds two hundred dollars, the offender shall be liable to fourteen years' imprisonment.
The origin of s. 58 was s. 38 of the Statutes of Canada, 1869, 32-33 Vict., c. 21, and I think there is not much doubt but that s. 58 is the origin of the present s. 274 of the Code. The origin of s. 85 was s. 112 of the Act of 1869.
The Criminal breach of trust section in the Larceny Act of 1886 and ss. 58 and 85 referring to "beneficial" and equitable interests remained on the statute books until the enactment of the Criminal Code, 1892 (Can.), c. 29 when the words "special property or interest" first appeared. In view of the undoubted extension of the definition of the offence of theft and of things capable of being stolen which occurred over the last half of the 19th century, it would seem to be illogical that the definition of what was capable of being stolen would be narrowed down from what it was before 1892 and logical and consistent that when Parliament enacted as something capable of being stolen a "special property or interest" that those words should include an equitable interest as that equitable interest was the subject-matter of theft in the earlier legislation.
I have therefore come to the conclusion that even if Brilund had only an equitable interest it was capable of being stolen and the theft of an equitable interest is the proper subject- matter of a charge under s. 269 by reason of cl. (a) of s-s. (1) and s. 274. This ground of appeal fails.
The sixth ground of appeal is that the verdict of guilty on count 7 is inconsistent with the verdict of acquittal on counts 4 and 6. The basis of this ground is that the 20,000 shares of New Chamberlain referred to in count 4 were part of the block of 240,000 shares referred to in count 7 and the money referred to in count 6 is the proceeds of the shares referred to in count 4. The submission is that the jury, having found the appellants not guilty on counts 4 and 6, must have come to the conclusion that the appellants held the shares on terms which permitted them to account for them by paying Brilund at $1.15 per share and therefore the appellants had the right to pledge as long as they paid Brilund and could not be guilty of theft.
In support of this argument reference was made to R. v. Hayes & Pallante, 1942 CanLII 106 (ON CA), [1942] 2 D.L.R. 85, 77 C.C.C. 195, [1942] O.R. 52, and R. v. Mondt, 1933 CanLII 351 (ON CA), [1934] 1 D.L.R. 382, 60 C.C.C. 273, [1933] O.W.N. 101. In the Hayes case two accused were charged with theft and a second count of conspiracy to commit theft. The charges arose out of precisely the same evidence. The trial Judge acquitted the accused on the count charging theft on the ground that there was insufficient evidence but convicted on the conspiracy count. On appeal the conviction was quashed on the ground that if the evidence did not establish a theft it would be the merest surmise that the accused had formed a common purpose to steal. The Mondt case involved a fatality in a motor vehicle accident. The indictment contained one count of manslaughter and another of criminal negligence. The jury acquitted the accused of manslaughter and convicted on the count charging criminal negligence. The Court of Appeal held that the acquittal on the manslaughter count negatived any facts which would justify a finding of criminal negligence and the conviction for criminal negligence being inconsistent with the acquittal on the manslaughter count the conviction should be quashed.
The principle of these decisions does not help the appellants in this case. It is true that the shares mentioned in count 4 are part of the block of 240,000 shares, but the time at which the offences were alleged to have taken place are quite distinct. Count 7 charges theft of the complete block in the period May to October 2, 1956. Counts 4 and 6 charge theft from December, 1956 to April, 1957. No doubt the evidence with respect to counts 7, 4 and 6 overlapped. Had there been separate trials on these counts, evidence of what occurred subsequent to the period charged in count 7, including the continued pledge and the final disposition of the shares, would have been admissible. Likewise, evidence of what occurred prior to the period charged in counts 4 and 6 would have been admissible and indeed necessary. The vital evidence, however, would be that evidence within the periods charged in the respective counts. The mere fact that there was overlapping does not mean that the jury convicted on count 7 and acquitted on the other two counts on the same evidence.
The offence charged in count 7 was complete the moment the shares were pledged by the appellants: Rogers v. Arnott, [1960] 2 All E.R. 417, and there is ample evidence that such a pledge occurred in May, 1956. There was evidence that some limited disclosures were made to the other directors at a meeting on August 27th of that year and Osler was at that time told for the first time that the shares were owned by Brilund; the Chapcoe option agreement came into existence in September and it was open to the jury to come to the conclusion that at some time subsequent to May, 1956 the appellants had a different intention with respect to the shares than they had when they originally pledged them. For these reasons there was no inconsistency between the verdicts of acquittal on counts 4 and 6 and the verdict of guilty on count 7, This ground of appeal fails. The seventh ground of appeal is that the nature of the transaction is not appropriate for a charge under s. 269 and that the appropriate charge is under s. 276, that is to say, theft by persons required to account. This submission is based on the proposition that s. 269 applies only to things or transactions in specie and that in this case the evidence establishes that the appellants had the right or were under a duty, once they had shares, to either deliver them to Brilund or pay for them at $1.15 per share. It is further submitted that even if the appellants were charged under s. 276 there was no offence because they ultimately caused payment to be made to Brilund and in view of the change in the wording as between s. 276 in the present statute and its predecessor, s. 335, there was no offence even if there was a conversion, unless there was a failure to pay or account and since the appellants did pay and account there was no offence under s. 276.
This submission depends on the evidence of the appellants which the jury obviously did not accept and which they were entitled to reject. There was, in a sense, evidence supporting the evidence of the appellants in that the Harbinson group paid $1.15 for the shares financed for them by Brilund but there was no evidence other than that of the appellants themselves and the conveniently falsely dated Chapcoe option agreement that the 240,000 shares were subject to the same agreement as the
shares of the Harbinson group. As has already been pointed out, the shares financed for Harbinson and Roy Smith were kept in Brilund's name, whereas the shares claimed by the appellants were placed under the name Ben Smith in trust, and payment by the Harbinson group was required before the shares were released from Brilund's name, which was not the case with respect to the 240,000 shares. This ground of appeal also fails.
The eighth ground of appeal is that the trial Judge refused to direct the Crown to furnish the defence with copies of statements made under oath by witnesses proposed to be called by the Crown. Such witnesses had given evidence in an inquiry authorized under the Securities Act, R.S.O. 1950, c. 351, s. 21 [now R.S.O. 1960, c. 363, s. 21].
Counsel for the appellants submitted that the refusal of the application entitles the appellants to a new trial in that it has become established by a long line of authority that such a refusal is ground for a new trial as the defence are entitled as of right to be furnished with copies of such statements. He referred to Mahadeo v. R., 1936 CanLII 370 (UK JCPC), [1936] 2 All E.R. 813; R. v. Calrke (1930), 22 Cr. App. R. 58; R. v. Silvester & Trapp (1959), 1959 CanLII 476 (BC SC), 125 C.C.C. 190; R. v. Finland (1959), 1959 CanLII 445 (BC SC), 125 C.C.C. 186; R. v. Xinaris (1955), 43 Cr. App. R. 30; R. v. Hall et al. (1958), 43 Cr. App. R. 29, and R. v. Weigelt (1960), 1960 CanLII 452 (AB CA), 128 C.C.C. 217.
The Securities Act, s. 24, provides as follows:
24. No person, without the consent of the Commission, shall disclose any information or evidence obtained or the name of any witness examined or sought to be examined under section 21 or 23.
In refusing the application the learned trial Judge referred to a ruling which he made in an earlier prosecution in which the appellants were involved. Since the argument of this appeal counsel have been good enough to supply the transcript of the argument and ruling made in that earlier case. It appears from the transcript that counsel for the Crown not only did not have the consent of of Commission to furnish the appellants or their counsel with the evidence requested, but consent had been expressly denied. The learned trial Judge decided he could not order counsel for the Crown to produce what had been in effect ordered by competent authority not to produce. The learned trial Judge properly exercised his discretion in refusing the application. The cases referred to by counsel for the appellants are not applicable in this case because all of them deal with situations where the statements were obtained by the police or the Crown. The Crown was a party to those proceedings and in this case the Securities Commission is not before the Court as party or otherwise.
Counsel for the appellants argue that s. 24 of the Securities Act, being Provincial legislation, cannot exclude from testimony in a criminal proceeding, matters otherwise admissible and reference was made to Marshall v. The Queen, 1960 CanLII 18 (SCC), 26 D.L.R. (2d) 459, 129 C.C.C. 232, [1961] S.C.R. 123 and Container Materials Ltd. et al. v. The King, 1942 CanLII 1 (SCC), [1942] 1 D.L.R. 529, 77 C.C.C. 129, [1942] S.C.R. 147. These authorities deal with the admissibility of evidence. The question here is not one of admissibility but one of the proper exercise of discretion by the learned trial Judge as to when the Crown will be ordered to produce statements in its possession made by the witnesses proposed to be called by the Crown. This ground of appeal also fails.
The appeals should therefore be dismissed.
Appeals dismissed.






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