Ontario Court of Appeal overturns fraud convictions, citing ineffective defense counsel

By Karunjit Singh ·

Last Updated: Thursday, August 15, 2024 @ 12:38 PM

Law360 Canada (August 14, 2024, 5:10 PM EDT) -- The Ontario Court of Appeal has set aside two fraud convictions, finding that the legal representation the defendant received at trial fell below the standards of reasonable professional judgment and undermined the fairness of his trial.

In R. v. Nnane, 2024 ONCA 609, released on Aug. 12, Justice David Paciocco noted that even though he could not find reasonable probability that an effective defence could have led to a different outcome, the fairness of the trial was undermined by the representation provided to the defendant.

“There can be no question, in my view, that trial counsel did not effectively support Mr. Nnane’s defence or provide him with partisan advocacy,” the judge wrote.

The court did not name the lawyer who represented the appellant at trial.

The appellant, George Nnane, faced two fraud charges arising from allegedly false income tax returns prepared by his corporation, Golden Capital Management Inc., on behalf of numerous clients.

Many of the income tax returns Golden filed in 2009, 2010 and 2011 included claims for nonexistent charitable donations and business and rental expenses.

Golden stood to gain from the significant unwarranted income tax refunds that resulted from the false donation and expense claims as it was entitled to a significant percentage of any income tax refunds paid on the returns it prepared as part of its fee.

Additionally, Golden claimed a loss on GST/HST returns filed in 2009 and 2013 and requested a refund, despite the revenue the company had received from income tax refunds.

Nnane sought to defend the charges at his jury trial by claiming that the false income tax returns were prepared without his knowledge by an employee, Christine Forbes, who took control of Golden during his absence from work.

He also claimed that others had filed the GST/HST returns in his absence. However, the jury rejected his evidence and convicted him of both offences.

The defendant alleged that the representation that his trial counsel provided was ineffective because he did not prepare properly to cross-examine Forbes and he cross-examined her ineffectively.

Nnane also argued that trial counsel failed to prepare him for his own testimony and conducted an ineffective examination-in-chief, including by projecting disbelief in what Nnane was saying.

Justice Paciocco noted that in order to overcome the strong presumption of competence on an ineffective-assistance-of-counsel appeal, an appellant must establish on the balance of probabilities the material facts that the claim is grounded on.

The judge added that the appellant needed to show that the representation provided by counsel fell below a standard of reasonable professional judgment and that the ineffective assistance caused a miscarriage of justice, either by resulting in an unreliable verdict or by undermining trial fairness.

The court observed that trial counsel had failed entirely to confront the damning evidence that Forbes had provided and did not confront her adequately with the defendant’s version of events.

The judge noted that Forbes testified that she did not begin working at Golden until 2011, an assertion that, if credited, completely undermined Nnane’s position and his only prospect of defence, given that the false tax returns began as early as 2009.  

Justice Paciocco further observed that Nnane’s trial counsel had Forbes repeat this evidence, but did nothing to challenge her claims about the timeline of her employment beyond asking her what she would say if he suggested that she worked there longer than she had claimed.

“He did not challenge her denial to that suggestion and did not even confront her with Mr. Nnane’s claim that she worked with him from 2009 to 2011. Nor did trial counsel seek to exploit Ms. Forbes’s evident uncertainty about the timelines of her employment,” the judge wrote.

The court further observed that when Forbes claimed that she was not involved in the preparation of any tax returns, the defendant’s trial counsel never put Nnane’s version to her that she had taken over the business, including the preparation of tax returns.

“Yet there were clear opportunities to pursue these themes, including admissions she made in her testimony in chief that she assumed responsibility for the rent and utility payments of the business for a period and brought in another person to help,” the judge wrote.

The judge also accepted Nnane’s submission that his trial counsel did not support his testimony and instead projected his disbelief of what Nnane was claiming.

The court observed that Nnane’s trial counsel had posed a number of questions to the defendant in a manner that made it appear as if trial counsel was attempting to distance himself from the answers provided by ascribing those answers to Nnane.

“Trial counsel premised many of his questions, for example, by asking, ‘What do you say?’ ‘What do you wish to say to the jury about that?’ or by asking him, ‘Is that everything that you wanted to say?’” the judge wrote.

The court also noted that Nnane’s counsel on occasion even posed questions to him, as if challenging Nnane’s testimony.

“I appreciate that a defence lawyer might make a tactical decision to steal the Crown’s thunder by posing challenging questions to their clients in the knowledge that their clients have a ready explanation, but on the record before us, there is no indication that this is what was happening,” Justice Paciocco wrote.

The judge added that the way certain questions were posed made it appear as if trial counsel was sharing his own concerns about Nnane’s evidence with the jury.

The court concluded that Nnane’s trial counsel failed to confront damning testimony given by Forbes. In addition, it found, trial counsel undermined Nnane’s testimony during cross-examination by not throwing his support behind it and by effectively signalling his disbelief of that testimony.

The judge noted that trial counsel also denigrated the importance of Nnane’s evidence by unnecessarily reminding the jury that the questions he himself asked the appellant were “softball” questions.

The court observed that even in his final comments to the jury, trial counsel left the appellant without support when he stated that “Mr. Nnane asks you to acquit him on both charges” and that it was Nnane’s position that the Crown had not proven their case beyond a reasonable doubt.

The judge noted that the case the Crown presented against the appellant was extremely strong and that his testimony was problematic and his defence was weak.

Justice Paciocco stated that he could not find that there was a reasonable probability the outcome would have been different had he been defended effectively.

“However, I am persuaded that the fairness of Mr. Nnane’s trial was undermined by the representation he received,” the judge added.

The judge also held that it was obvious that the representation provided by trial counsel fell below the standard of reasonable professional judgment.

“Whatever else it entails, reasonable professional judgment when acting in the defence of criminal charges requires a supportive if not zealous defence, not a half-hearted or dismissive one,” the judge wrote.

The court allowed the conviction appeal, set aside both fraud convictions and ordered a new trial. Justices Peter Lauwers and Gary Trotter concurred in the decision.

Counsel for Nnane on the appeal, Jeffery Couse of Lockyer Zaduk Zeeh said that it was rare for the Court of Appeal to allow an ineffective assistance of counsel appeal solely on the basis that trial counsel’s performance undermined the appearance of fairness, but noted that it was warranted in the case at bar.

“No matter how strong the Crown’s case, a defence lawyer must stand with their client. The failure to do so undermines the fairness of the trial, which in turn undermines the public’s faith in the adversarial system,” he told Law360 Canada in an email.

Counsel for the Crown were Xenia Proestos and Yael Pressman.

If you have any information, story ideas, or news tips for Law360 Canada on business-related law and litigation, including class actions, please contact Karunjit Singh at karunjit.singh@lexisnexis.ca or 905-415-5859.