Fraud has been around for centuries. So has the concept of cheating at play. In R v Riesberry, the Supreme Court of Canada attempts to put 2 and 2 together, so to speak (albeit randomly!), to clarify the meaning of “game” under s. 209, which criminalizes “every one who, with intent to defraud any person, cheats while playing a game or in holding stakes for a game or in betting.” Game is defined under s.197 as a “game of chance or mixed chance and skill.” What was at issue in Riesberry was the favourite Ontario pastime of horse racing and Mr. Riesberry’s penchant for winning. In this case, winning by drugging two horses. Although the Court defined “game” as including a horse race, in my view the more interesting aspect of the decision is the Court’s comments on the fraud charges and what I will suggest is a failure to fully integrate criminal law principles.
Justice Cromwell, speaking for the unanimous court (although the case was not heard by the full panel of judges but of a smaller panel of 7), essentially relied upon previous SCC decisions on the actus reus requirements of fraud, specifically Olan (1978) and Theroux (1993) and the companion case Zlatic. The actus reus for fraud is comprised of two parts as per section 380, an act of “deceit, falsehood, and other fraudulent means” coupled with, according to Theroux and Zlatic, a deprivation “caused by the prohibited act,” which may result in an actual loss or a risk to the “pecuniary interest” of the victim. In the earlier decision Olan, the court expanded on the phrase “other fraudulent means” by defining it as any act “which can properly be stigmatized as dishonest.”
Before we move onto Justice Cromwell’s position, let’s unpack the significance and the impact of the Olan and Theroux/Zlatic decisions.
First, Olan, an Ontario case about a substantial fraud involving a convoluted fact scenario of companies within companies. However, as Justice Dickson (pre-Chief Justice days), on behalf of the full Court, astutely reminds the reader “One of the dangers in this case is the risk of being overwhelmed by factual minutiae. Superficially, the facts are complicated. Stripped of unessentials, it is clear what took place.” Of note is the manner in which this decision is structured, with a full recitation of the relevant law before the facts of the case are outlined. Clearly, according to Justice Dickson, the facts are not the issue as the lower court should have realized, this is an “easy” case of fraud. Hence the broad definition of “other fraudulent means,” which nicely concurs with Lord Diplock’s assessment in the House of Lords Scott decision, three years earlier. In Scott, Lord Diplock gave a generous definition of the phrase by suggesting “other fraudulent means” can involve “dishonesty of any kind.” Justice Dickson, approved of this passage and Justice Cartwright’s earlier 1963 decision in Cox and Paton to arrive at the now oft quoted meaning of the phrase as found in s. 380 as “not in the nature of a falsehood or a deceit” but acts that can “encompass all other means which can properly be stigmatized as dishonest.”
Although Justice Dickson also discussed the further actus reus requirements of deprivation, this aspect was thoroughly canvassed in the Theroux/Zlatic cases. Theroux is one of those great cases indicative of the unsettled Court of the early 1990s. Rendered in the 1993 when the Court grappled with the meaning and content of mens rea in light of the subjectivity principle and the objectivity “creep” from the driving cases of Hundal and the manslaughter decision in Creighton. This was a time when the Court’s decisions were visceral and driven by ideology, when members of the Court aligned themselves both with other members of the Court and against other members of the Court. To prove my point just read the following SCC cases rendered that year: Cooper on the “slightly relaxed” intention found under s. 229(a)(ii) murder, as previously mentioned Hundal and Creighton, and three further cases on the presence of objective criminal liability in Naglik, Gosset, and Finlay. Not only was mens rea on the Court’s mind but also an expansion of evidential and procedural rules as in KGB, Plant, Wiley, Grant, Levogiannis and Osolin as well as the meaning of s. 7 of the Charter as in Rodriguez and Morgentaler.
It is in this context that Theroux was decided with 3 decisions which concurred in the result: from Justice Sopinka (with Lamer, CJ), Justice McLachlin’s majority decision (with LaForest, Gonthier, and Cory JJ.) and Justice L’Heureux-Dube’s own decision. The fragmented decision is connected to the companion Zlatic case where Justice Sopinka and the Chief Justice dissented as stated in the opening parargraphs of Theroux, because “there are several issues in my colleague's analysis of the law of fraud with which I have difficulty.” One of these “issues” involve the tension between objective and subjective mens rea and the Court’s inability to envision how the traditional criminal law world would look when that Pandora’s box containing an objective form of liability is opened. We are still feeling the effects of this conundrum today, which deserves another blog posting all together. In any event, Theroux is typically now quoted for Justice McLachlin’s (as she then was) clarification that mens rea signifies the guilty mind and does not encompass all of the mental element requirements of an offence as the actus reus too has a mental aspect requiring the prohibited act to be a voluntary act “of a willing mind at liberty to make a definite choice or decision” (See Taschereau J. in the 1962 King case). For our purposes, however, Justice McLachlin reiterated fraud’s actus reus as described in Olan with a reminder that Olan was a departure from precedent as it marked a broadening of fraud by removing the requirement for deceit and replacing it with a “general concept of dishonesty” to be objectively determined and by permitting deprivation to include a risk or “imperilling” of economic interest.
Viewing Riesberry in this context, we should not be surprised that the Court unanimously accepted this precedent and found the act of “cheating” to be an act worthy of criminal sanction. However, what should surprise us about the decision is how the Court treated the required causal connection between the dishonest act and the deprivation. Justice Cromwell easily made this crucial connection through the time-honoured “but for” test, wherein the trier asks “but for” the accused’s actions would this consequence have occurred or, as in this case, “it created the risk of betting on a horse that, but for Mr. Riesberry’s dishonest acts, might have won and led to a payout to the persons betting on that horse.” This “risk of prejudice to the economic interests of bettors” provided a direct causal link required to prove the actus reus of the fraud.
Although to Justice Cromwell this linkage was elementary, the decision on this issue is disquieting. Causality in criminal law has received much attention by the Supreme Court of Canada. It has been a particularly difficult issue in cases where there may be multiple causes or, as in Mr. Riesberry’s case, there is a temporal issue. Causation is also a civil law concept, arising in tort cases. Like the tension between subjective liability, a traditional criminal law precept, and objective liability coming to criminal law from the regulatory or civil arena, the concept of “criminal” causality has been a long-standing subject in criminal cases.
The question of factual causation or the “but for” test referred to and applied by Justice Cromwell has indeed been straight forward and easy to apply. But the issue of legal causation, the concept of culpability and where the criminal law should draw the line has been less easily determined. Legal causation sees the “but for” but wants to know to what degree is the accused the cause and is it sufficient to attract the full force of the criminal law. This was the issue in Harbottle, where the degree of causation required in a first-degree murder charge was considered, and interestingly enough was decided in 1993 when Theroux was considered. It was also the issue in Nette where second-degree murder was considered and the entire concept of criminal causation was considered. To attract criminal culpability not only must the “but for” test be fulfilled but the actions of the accused must also be a “significant contributing cause” of the consequence. Since Nette, this legal test has been applied such as in the recent case of Maybin involving a manslaughter. Not only did Justice Cromwell not enter into this legal analysis, he did not even mention its existence. Considering fraud is akin to theft in that it is a “true crime,” which attracts stigma upon conviction, the legal concept of causation should have been considered even on these facts.
Had it been considered, the final analysis may very well have been the same but the case, left as it is, seems unfinished. Without getting into it, another area of disconnect in this decision is with the concept of deprivation as a “risk” as opposed to an actuality. This position seems consistent with previous decisions of the court such as Mabior and Hutchinson as it related to fraud vitiating consent under s. 265(3). Again, no analytical connection is made here. This also seems decidedly “unmodern.”
As early as 1990 (see Starr v Houlden), the Supreme Court of Canada had begun to embrace the “holistic approach” to law, refusing to be pigeon-holed by the past (specifically see paragraph 16 of the 2011 Sarrazin case and approval of this concept as recommended by Moldaver, J.A., as a then dissenting voice in the Ontario Court of Appeal decision). This recognition and desire for integration has also seen traction in the broader societal context. Riesberry, by failing to integrate principles and make these holistic connections, leaves us to consider the pieces of the puzzle instead of the picture as a whole.