Livent Inc. co-founder Garth Drabinsky deserves a new trial in his fraud case because the judge should not have trusted unreliable witnesses while ignoring "pillars of reasonable doubt," his lawyer told the Ontario Court of Appeal.
Edward Greenspan, who is representing Mr. Drabinsky at his appeal hearing in Toronto, said Madam Justice Mary Lou Benotto of the Ontario Superior Court made critical errors in considering the evidence heard at Mr. Drabinsky's 2008 trial and failed to deal with contentious elements of evidence in her written decision in the case in 2009.
Notably, he said the judge should have been more critical of evidence by former Livent chief financial officer Maria Messina, especially after rejecting her testimony about a meeting in April, 1998, at which Mr. Drabinsky allegedly directed accounting manipulations to Livent's books.
Having found Ms. Messina's evidence about that meeting was unreliable, Judge Benotto should not have relied on other evidence Ms. Messina provided regarding other meetings allegedly attended by Mr. Drabinsky on other dates, Mr. Greenspan argued.
"Once it was found the meeting did not happen with [Mr. Drabinsky]present, it had to have an impact on the other evidence," Mr. Greenspan told the court on Monday.
The Ontario Court of Appeal is hearing an application from Mr. Drabinsky and former business partner Myron Gottlieb to overturn their 2009 convictions for fraud and forgery. They are also appealing the length of their sentences in the case.
Judge Benotto sentenced Mr. Drabinsky to seven years and Mr. Gottlieb to six years after concluding they systematically manipulated the live theatre company's financial statements between 1993 and 1998. The men have been out on bail since their convictions while awaiting the appeal hearing.
Mr. Greenspan, who presented his case first at the three-day hearing, said the judge did not adequately address "pillars of reasonable doubt" presented by the defence at the trial, and her written decision does not adequately explain why she did not accept the arguments.
For example, Mr. Greenspan argued the two former executives would not have hired Ms. Messina, a former auditor at Deloitte & Touche, if they were aware of an ongoing fraud, because she may have exposed it. He said the accused would not have fired former Livent executive Robert Topol knowing he could have retaliated by exposing the fraud, and they would not have negotiated a deal to sell their company to Hollywood heavyweight Michael Ovitz and risk having him detecting the fraud.
He also told the appeal judges they should focus on the evidence most heavily weighed by the trial judge about meetings the two men allegedly attended where they directed accounting manipulations.
Mr. Greenspan said the appeal judges should dismiss arguments in the Crown's filings that there was plenty of other evidence to convict Mr. Drabinsky and Mr. Gottlieb, irrespective of testimony about the meetings.
However, Mr. Justice David Doherty of the Ontario Court of Appeal questioned why the appeal judges must give the same weight to the same evidence as the trial judge did in her written ruling.
"That strikes me as an odd proposition in considering the reasonableness of the verdict," Judge Doherty noted.
Mr. Greenspan said the appeal court's job is to weigh whether Judge Benotto made errors in her reasoning, not to consider different evidence in the case.
"The fact there was other evidence capable of supporting a conviction is no answer to the legal error," he replied. "And in my evidence, the appropriate remedy would be a new trial."
Livent was a Toronto-based live theatre company that staged hits such as Phantom of the Opera and Show Boat in theatres across North America. It collapsed in 1998 when accounting irregularities came to light after new owners took control of the company.