New Brunswick appeal addresses colour of right

Law360 Canada (August 29, 2024, 11:17 AM EDT) --

John L. Hill

Tanya Mary Parsons wanted to return to work. She was receiving CPP disability benefits but was delighted to learn she could continue to receive them and accept employment with Moving Forward for Better Inc. as a data entry clerk. Under the program, she could work initially for 10 hours each week (later increased to 15 hours a week) without losing her CPP benefits.

However, Parsons could not complete the workload assigned within the hours allotted. By working extra hours, she could risk losing her benefits. A way around this would be to do the additional work and e-transfer funds from the employer to her bank account without referencing the extra pay on her pay stubs. She was charged with theft over $5,000 under s. 334(a) of the Criminal Code.

At trial in 2022, Parsons defended herself, saying that the employer had agreed to the arrangement. Further, there was no intention to steal funds. Section 322(a) says that theft exists only if the money was taken fraudulently and without colour of right. Since, according to her, the employer was agreeable to the “under the table” payments, there was colour of right and no mens rea for theft.

One hurdle for Parsons to overcome was that the employer denied ever agreeing to the arrangement. A second problem was that the e-transfers occurred not in accordance with the amount of overtime worked but rather when Parsons’s bank account was critically low. The trial judge found Parsons guilty and imposed a custodial term. She appealed to the New Brunswick Court of Appeal, which upheld her conviction and sentence on July 18, 2024 (R. v. Parsons, 2024 NBCA 89).

Parsons’s main contention in her appeal was that the trial judge had not adequately considered her colour of right defence. He rejected her contention and thus reversed the onus on the Crown to establish that the funds had been taken under an agreement between the accused and her employer. She had an honest belief that she was entitled to the extra pay.

The New Brunswick Appeal Court looked to R. v. Simpson, 2015 SCC 40, which held that an air of reality must be established for a colour of right defence to apply. If that is done, the onus would shift to the Crown to disprove the defence beyond a reasonable doubt.

In this case, Parsons testified on her own behalf, allowing the trial judge to reject her contentions in performing a W. (D.) analysis of whether she was a credible witness (R. v. W. (D.), [1991] 1 S.C.R. 742). The third step in the W. (D.) analysis is to ascertain, by looking at the totality of evidence, if the Crown has proven guilt beyond a reasonable doubt.

A reasonable doubt will arise where an inadequate evidential foundation has been laid (R. v. Walker, 2008 SCC 245) or the evidence fails to persuade the trier of fact to the requisite level (R. v. J.M.H., 2011 SCC 45).

To create the air of reality, a trier of fact must believe that the accused person acted innocently, pursuant to a flawed perception of the facts, and nonetheless committed the actus reus of the offence (Pappajohn v. The Queen, [1980] 2 S.C.R. 120).

Using the W. (D.) analysis, the trial judge did not believe Parsons and found that she had taken advantage of her employer’s lack of financial understanding and oversight. The trial judge could not be criticized in finding that Parsons’ colour of right explanation was not worthy of belief.

The Court of Appeal concluded its judgment by citing examples of why Parsons’s testimony should have been rejected. It explained that the only premise for Ms. Parsons’s e-transfer scheme was her fear of losing her CPP disability benefits if extra hours were disclosed on her official pay stubs. Yet the evidence disclosed that she did work beyond her contractual hours, and some of her additional hours were reflected on her pay stubs. Nevertheless, her CPP benefits were not terminated.

Further, the Crown evidence disproved the colour of right; 40 of the 49 e-transfers were made when Parsons’s account balances were critically low. Parsons admitted the transfers were made when she “needed the money.” An honest belief in entitlement to additional remuneration for work beyond regular hours is not dependent on when “money is needed.” The judge was fully aware of this evidence. Moreover, Parsons was careful to delete all computer references to the e-transfers, which was utterly inconsistent with any honestly held belief in entitlement to extra money.

Fraud and theft occur when people naively trust an untrustworthy individual. Perhaps the employer should also be criticized for not having proper financial checks in place when administering a government program, and perhaps the government should be criticized for allowing its programs to be administered by agencies without proper scrutiny.

John L. Hill practised and taught prison law until his retirement. He holds a J.D. from Queen’s and an LL.M. in constitutional law from Osgoode Hall. He is also the author of Pine Box Parole: Terry Fitzsimmons and the Quest to End Solitary Confinement (Durvile & UpRoute Books) and The Rest of the (True Crime) Story (AOS Publishing). Contact him at johnlornehill@hotmail.com.

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