An update on the Livent saga and the criminal trial of Livent’s former principals, Garth Drabinsky and Myron Gottlieb for fraud and forgery.
For a backgrounder on the civil proceedings, see my OBA article here, commenting on King v. Drabinsky, 2008 CarswellOnt 4489, 2008 ONCA 566, 58 C.P.C. (6th) 223, 295 D.L.R. (4th) 727, 91 O.R. (3d) 616, (Ont. C.A), Application for leave to appeal dismissed with costs (February 12, 2009.
The Court of Appeal for Ontario website has posted the following notice:
To be posted on Tuesday, September 13, 2011 at 11:00 am.
Notice: R. v. Garth Howard Drabinsky and Myron Irwin Gottlieb
Court of Appeal Docket: C50830 & C50831
On appeal from the convictions entered on March 25, 2009, and the sentences imposed on August 5, 2009, by Justice Mary Lou Benotto of the Superior Court of Justice, sitting without a jury, written reasons reported at (2009), 242 C.C.C. (3d) 449 and (2009), 246 C.C.C. (3d) 214.
The appellants were charged with two counts of fraud and one count of forgery. They were tried before Justice Benotto of the Superior Court of Justice at a trial lasting 65 days. On March 25, 2009, they were convicted on all counts. The forgery count was subsequently stayed pursuant R. v. Kienapple,  1 S.C.R. 729. On August 5, 2009, the trial judge sentenced Drabinsky to a term of imprisonment of seven years and Gottlieb to a term of six years.
The appellants appealed both their convictions and their sentences. The appeals were heard on May 2, 3 and 4, 2011 before a court composed of Justices Doherty, Goudge and Armstrong.
The decision of the Court will be released at 11 am on Tuesday, September 13, 2011. The judgment of the court will be posted on the court’s website at that time.
The Court of Appeal for Ontario has today upheld the fraud convictions against Garth Drabinsky and Myron Gottlieb. However, Drabinsky’s seven year sentence of imprisonment was reduced to five years and Gottlieb’s five year sentence was reduced to four years, each to be served concurrently.
Doherty, Goudge and Armstrong JJ.A. in a per curiam judgment conclude:
 On this record, while it can safely be said that the fraud was a factor in the bankruptcy, it cannot be said that the fraud caused the bankruptcy and the subsequent financial losses. Where the actual economic harm caused by a fraud is uncertain, the sentencing judge must give the benefit of that uncertainty to the accused. The trial judge should have approached this case as one in which the Crown had proved the ultimate inevitability of significant loss, but had not proved a fraud of a specific magnitude or that the insolvency was the product of the fraud.
 In describing the loss as we have, we do not mean to suggest that this was not a large scale and significant fraud. It clearly was. Nor do we take away from the non-economic harm caused by this kind of fraud. When prominent business leaders who are directors and officers of public companies engage in fraudulent activity, the public faith in, and the integrity of, the public marketplace no doubt suffers regardless of the actual financial loss suffered.
 In our view, when the nature of the economic loss proved by the Crown is considered with the other factors relevant to sentence, a sentence within the established range of sentencing for large scale frauds is still warranted. However, we would place the appropriate sentence somewhat lower in that range. In our view, sentences totalling five years would be appropriate.
 The trial judge drew a distinction between Drabinsky and Gottlieb for the purposes of sentencing. She imposed an additional year on Drabinsky to reflect her view that he played a more central role in the frauds. The trial judge lived with this case for a long time. As her reasons for conviction and sentence demonstrate, she had an impressive command of the evidentiary record and no doubt an appreciation for the dynamics of the operation of Livent that cannot be gained through a review of the transcript. We will defer to the distinction she drew between Drabinsky and Gottlieb for the purposes of sentence and will maintain that distinction in the sentences we impose.