R. v. Iqbal, 2021 ONCA 416, June 14, 2021, at paragraphs 52 and 54 to 56:
It is well-established that a trier of fact cannot use their rejection of an accused’s testimony as a piece of circumstantial evidence to convict in the absence of independent evidence that the testimony was deliberately fabricated or concocted to avoid culpability…
In criminal trials, the distinction identified in Coutts between an exculpatory statement that is disbelieved, and one that is determined to have been fabricated or concocted to avoid culpability, is of critical importance. This is because a statement that is merely disbelieved is not evidence that strengthens the Crown’s case, while a statement that has been deliberately concocted is “capable of supporting an inference of guilt”: O’Connor, at para. 17. Distinguishing between disbelief and fabrication is thus essential to ensure triers of fact properly apply the burden of proof in cases where an accused testifies: Coutts, at p. 203.
Requiring independent evidence of fabrication helps to maintain this key distinction. The kind of evidence that may be considered “independent” in a particular case will depend in part on where the exculpatory statement at issue originated: O’Connor, at paras. 22-23. Unlike with out-of-court exculpatory statements, the circumstances surrounding an accused’s in-court testimony, such as logical implausibility or internal inconsistencies arising from that testimony, cannot constitute independent evidence of fabrication: O’Connor, at paras. 23-25; R. v. Wright, 2017 ONCA 560, 354 C.C.C. (3d) 377, at para. 48.
In other words, it is impermissible for a trier of fact who disbelieves an accused’s in-court testimony to make a finding of fabrication absent evidence that is independent of both (1) the evidence contradicting the accused’s testimony, and (2) the fact that the accused is found to have testified falsely at trial: O’Connor, at para. 23; Wright, at paras. 46-48. For example, with respect to in-court exculpatory testimony, independent evidence of fabrication may arise from another witness’ testimony indicating that the accused attempted to persuade them to lie in court about the accused’s whereabouts at the time of the offence: R. v. Hall, 2010 ONCA 724, 263 C.C.C. (3d) 5, at para. 165, leave to appeal refused,  S.C.C.A. No. 499.