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Fraud by Omission

. R v Gour

The criminal case of R v Gour (Ont CA, 2014) is interesting for it's holding that in some cases, even outside of contract, the failure of a defendant to disclose facts material to the parties' relationship may constitute fraud:
[7] The appellant submits that the trial judge erred by concluding that the appellant’s failure to disclose a material fact – that his canvassers were not volunteers – was relevant in establishing the offence of fraud.

[8] We disagree. Based on R. v. Theroux, 1993 CanLII 134 (SCC), [1993] 2 S.C.R. 5 and R. v. Zlatic, 1993 CanLII 135 (SCC), [1993] 2 S.C.R. 29, which held that the words “other fraudulent means” in the offence of fraud proscribed in s. 380(1) of the Criminal Code allow convictions grounded in non-disclosure of important facts, we have no hesitation affirming the trial judge’s key conclusions:
1. the failure to disclose the handsome commissions being paid to these apparent “volunteers” constituted the hiding of a fundamental and essential element of this fundraiser-contributor relationship; and

2. this failure to disclose was such as to mislead the reasonable contributor.
[9] We hasten to add that non-disclosure of the status (volunteer v. employee) of a canvasser will not be relevant in every charitable fundraising context. That would be too sweeping a proposition. However, in this case there was extensive evidence that the appellant operated his team of canvassers in a manner calculated to mislead the public. His conduct went beyond mere use of the word “volunteer”. He also instructed them to state that all money would be disbursed to the families of the affected children and to deny that they were being paid, and he provided pamphlets that claimed that the charity had no paid staff. In these circumstances, the combination of material non-disclosure and outright lying supports the trial judge’s conclusion that a reasonable contributor would have been misled.



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