COURT OF APPEAL FOR ONTARIO
Gillese, Watt and Tulloch JJ.A.
BETWEEN
Her Majesty the Queen
Appellant
and
Nick Angelis
Respondent
James V. Palangio, for the appellant
Anthony Moustacalis and Daniel Goldbloom, for the respondent
Heard: February 2, 2016
On appeal from the sentence imposed on February 22, 2013 by Justice Michael Code of the Superior Court of Justice.
1Nick Angelis had a problem. He wanted the best. For himself and for his family. But he couldn’t afford the lifestyle he coveted. He hit upon a solution. Money was available. From different sources. At different times. So he took it. All it required was some deceit, a bit of fraud and a few other dishonest means.
2But Nick Angelis got caught. And despite that, he did it again. Repeatedly. Even while on bail. Mea culpa, Nick said. A judge agreed. He sent Nick Angelis to the penitentiary. Ordered that he pay restitution for some of his victims, but not others.
3At his sentencing hearing, Nick Angelis told the judge that the money was all gone. Nothing remained. No proceeds of crime to forfeit. So the Crown asked the judge to order Nick Angelis to pay a fine in lieu of forfeiture. The judge refused.
4The Crown appeals.
5The reasons that follow explain why I think the judge got it wrong. I would grant the Crown leave to appeal, allow the appeal and require Nick Angelis to pay a fine in lieu of forfeiture in the amount of $1,036,750. I would give him 10 years to pay that fine and, in default of payment, impose a sentence of 10 years to be served consecutively to any other sentence he is then serving.
The background facts
6The nature of the appeal, as an appeal from sentence, as well as the grounds of appeal advanced, eliminate the need for anything beyond a passing reference to the circumstances of the offences. A more detailed reference to the sentencing proceedings is necessary however.
The Dayco Fraud
7Nick Angelis was the accounting manager of Dayco Canada Corporation (“Dayco”), a subsidiary of a large American manufacturer of auto parts. Using a variety of methods, Angelis acquired cash, goods and services valued at over $900,000 during a five year period between 2000 and 2006. The full extent of the fraud was not determined until 2006. Angelis was arrested on October 30, 2006 and released from custody.
8On the sentencing hearing conducted after he pleaded guilty, Nick Angelis did not contest the Crown’s allegations except as to the quantum of the fraud. After a Gardiner hearing, the trial judge concluded that the amount of the fraud was $936,000: with reasons reported at 2012 ONSC 6086.
The Later Frauds
9Nick Angelis also pleaded guilty to three counts of fraud alleged to have been committed during the years 2011 and 2012 while he was on judicial interim release on the Dayco fraud. During this period, Angelis was doing contract book-keeping and accounting work for different principals. He forged authorized signatures on cheques made payable to himself and altered the amounts of his own paycheques. The total loss was $100,750.
The Sentences Imposed
10The trial judge imposed a sentence that included a term of imprisonment of four years, three months, which he reduced to three years after deducting credit for pre-disposition custody, and three free-standing restitution orders in favour of each of the victims of the lesser frauds, totalling $100,750. The trial judge declined to make a restitution order in favour of Dayco whose loss had been covered by insurance. He also declined to order restitution to the insurer.
The Forfeiture Proceedings
11The Crown sought a fine in lieu of forfeiture of $1,036,750.
12The Crown contended that it had satisfied the requirements for an order of forfeiture. Since it was clear that the proceeds could not be traced because Angelis had dissipated them, the discretion to order a fine in lieu of forfeiture in the equivalent amount was engaged. No basis existed to invoke the limited discretion to refuse the order. Thus, it should be made allowing Angelis five years to pay it, in default.
13Nick Angelis resisted the Crown’s application. He submitted that in light of the three free-standing restitution orders, the availability of civil remedies for the insurer and the crushing effect of a requirement to pay over one million dollars, after release from jail at the age of 50, the circumstances warranted the trial judge’s exercise of his discretion to refuse to make the order. In the alternative, Angelis sought an order permitting him to pay the fine in lieu of forfeiture over fifty years.
The Reasons of the Trial Judge
14The trial judge was satisfied that the Crown had established the requirements for an order of forfeiture and that the proceeds had been dissipated. He then described the critical consideration in determining whether to exercise his discretion to refuse to order payment of a fine in lieu of forfeiture in these terms:
Accordingly, the critical consideration when exercising the discretion found in Section 462.37(3) is whether a fine in lieu of forfeiture is needed to, “further” the objectives of the provision, or conversely, whether a failure to impose such a fine in lieu of forfeiture would, “frustrate” those statutory objectives.
15The trial judge characterized the statutory objectives underpinning the discretion of s. 462.37(3) as twofold:
i. to deprive the offender of the proceeds of his or her crime; and
ii. to deter the offender from future crime by showing that crime does not pay.
The trial judge then framed the central issue before him as “whether these purposes have already been substantially achieved by other means”.
16The trial judge pointed out that most of the leading cases decided under the forfeiture provisions of the Criminal Code did not examine the interplay between forfeiture and restitution orders. He described the statutory purpose of restitution orders as preventing an accused from profiting from crime and providing a concurrent, rapid and inexpensive means of recovery for the victims of those crimes. He then turned to the effect of the overlap in statutory terms and objectives on the exercise of his discretion not to impose a fine in lieu of forfeiture:
Given these substantially overlapping statutory terms and objectives, I am satisfied that there will be cases where the Lavigne discretion to not impose a fine in lieu of forfeiture, will be properly exercised where the objectives of such an order have already been attained by other parallel procedures such as a restitution order. It is also settled law, again pursuant to Devgan, supra, and Castro, supra, that restitution or compensation orders, “should not be used as a substitute for civil proceedings,” and that these criminal law restitution orders do not “displace the civil remedies necessary to ensure full compensation,” in circumstances where those civil remedies are more appropriate.
17In reaching his conclusion declining to impose a fine in lieu of forfeiture, the trial judge considered several factors:
i. full restitution orders in relation to three victims deprived Angelis of the profits of those crimes and provided the victims with a speedy and convenient means to recover their losses;
ii. no restitution was ordered for the fraud on Dayco because an inevitably successful civil claim for the amount was filed in the Superior Court of Justice;
iii. payment of a restitution order in connection with the Dayco fraud would have a detrimental impact on Angelis’ rehabilitation; and
iv. the forfeiture provisions are intended to work harmoniously with the other sentencing provisions of the Criminal Code.
18The Crown conceded that any payments made pursuant to a fine in lieu of forfeiture should be credited to the restitution orders made by the trial judge. The Crown also pointed out that any failure on Angelis’ part to pay off the fine in lieu within the time allowed – suggested as five years – would likely result in termination of the order because a judge would refuse to issue a warrant of committal. Of this, the trial judge observed:
The alternative would be to give Angelis 50 years, or the rest of his life, to pay the $1,000,000 fine in lieu of forfeiture. I would question the utility of an Order that simply channels money to an already existing restitution Order through administrative means, and that is either terminated after five years of doing this, or that is extended for the rest of the payor’s natural life. None of this would seem to engender respect for court orders, and some of it is simply redundant.
19The trial judge concluded that it was a proper case for the exercise of discretion, pursuant to s. 462.37(3), not to order a fine in lieu of forfeiture.
The Grounds of Appeal
20The Crown advances four grounds of appeal. The Crown says that the trial judge erred in considering:
i. the general principles of sentencing;
ii. the effect a fine in lieu of forfeiture would have on the rehabilitative prospects of Nick Angelis and his ability to pay the restitution orders;
iii. the availability of civil proceedings as a means of satisfying the objectives of the forfeiture provisions of the Criminal Code; and
iv. effectively, if not expressly, Angelis’ present ability to pay a fine in lieu of forfeiture,
in concluding not to impose a fine in lieu of forfeiture.
21I will consider each ground of appeal in its turn, adding any additional factual details before summarizing the positions of counsel on appeal and the governing principles, then applying those principles to reach my conclusion. But first, a brief pause to consider the standard of review.
The Standard of Review
22An order made under s. 462.37, including an order refusing to direct payment of a fine in lieu of forfeiture under s. 462.37(3), is a “sentence” within s. 673 of the Criminal Code. As an appeal from sentence, and as a discretionary order, the trial judge’s conclusion is subject to deference in the absence of an error in principle, a failure to consider a relevant factor, consideration of an irrelevant factor, overemphasis of appropriate factors or a decision that is plainly unreasonable: R. v. P.R.F. (2001), 2001 CanLII 21168 (ON CA), 57 O.R. (3d) 475, 161 C.C.C. (3d) 275 (C.A.), at para. 8; R. v. Briggs, (2001) 2001 CanLII 24113 (ON CA), 55 O.R. (3d) 417, 157 C.C.C. (3d) 38 at para. 60; R. v. Dritsas, 2015 MBCA 19, 19 C.R. (7th) 203, at para. 6. Appellate intervention is justified only where it appears from the trial judge’s decision that an error had an impact on the result: R. v. Lacasse, 2015 SCC 64, at para. 44.
23Where a judge’s decision under s. 462.37(3) requires or involves an interpretation of the subsection, however, appellate review of the decision applies a standard of correctness: Dritsas, at para. 6.
Ground #1: The Relevance of General Sentencing Principles
24In his reasons for sentence, the trial judge considered the dominant sentencing objective at work in this case was general deterrence. Mitigating objectives, such as rehabilitation, occupied a secondary place in the sentencing decision. The preferable sanction was incarceration. After taking into account several mitigating and aggravating factors, the trial judge settled on the quantum of the carceral component of the sentence before he turned to the requests for restitution orders and a fine in lieu of forfeiture.
The Arguments on Appeal
25In this court, the Crown begins with the uncontroversial. To obtain an order of forfeiture under Part XII.2, the proceeds of crime provisions of the Criminal Code, the Crown must satisfy several conditions precedent. Once it has done so, as required, on a balance of probabilities, a forfeiture order under s. 462.37(1) is mandatory. The objective of these provisions is to deprive convicted offenders of any proceeds derived from their crimes. Doing so deters them and others from similar conduct in the future.
26In cases such as this, the Crown continues, where forfeiture is not possible because the proceeds cannot be located with the exercise of due diligence because the money has all been spent, the sentencing court may order the offender to pay a fine in lieu of forfeiture. Where the conditions precedent for ordering payment of a fine in lieu of forfeiture have been met, the sentencing judge has a limited discretion to refuse to make the order.
27The Crown says a fine in lieu of forfeiture is not a constituent part of a global sentence imposed on a convicted offender. A fine in lieu of forfeiture is a discrete order based on a different rationale. It is not offender-centric and its issuance or refusal is not subject to the sentencing objectives, principles and factors put in place by Part XXIII. The sentencing judge applied these principles in deciding not to impose a fine in lieu of forfeiture. He was wrong to do so.
28Nick Angelis (“the respondent”) agrees with the Crown to a point. The evidence warranted an order of forfeiture and, because the proceeds had all been dissipated, satisfied the criteria for consideration of a fine in lieu of forfeiture. However, sentencing courts retain a limited, but meaningful discretion to decline to order a fine in lieu of forfeiture. This discretion is to be exercised by reference to the statutory objectives of the forfeiture provisions. An important objective of those provisions, not at work here, is to target criminal organizations and to deter them from continuing their criminal activities.
29The respondent asserts that it necessarily follows from the very nature of judicial discretion that no closed list of factors curtails its exercise. The authorities afford some examples. An isolated crime. A single offender. A failure to profit from the predicate offence.
30The application of these principles is only ousted to the extent that it frustrates the purpose of forfeiture orders and thus orders imposing a fine in lieu of forfeiture. The trial judge’s decision was faithful to this distinction, but even if it fell foul of the distinction, the error was non-determinative in connection with the result.
The Governing Principles
31A brief review of the statutory scheme provides several governing principles that inform our resolution of this ground of appeal.
The Statutory Scheme
32Section 462.37 is an essential component of Part XII.2 of the Criminal Code, Proceeds of Crime. The Part reflects a Parliamentary intention to give teeth to the general sentencing provisions in Part XXIII. But the purpose or objective underlying the two Parts is different. Part XXIII has as its purpose the punishment of an offender for the crime(s) she or he committed. The objective of Part XII.2, in particular the forfeiture provisions, is to deprive offenders and criminal organizations of proceeds of crime and thereby to deter future crimes: R. v. Lavigne, 2006 SCC 10, [2006] 1 S.C.R. 392, at para. 16. These provisions seek to avert crime by showing those who may be bent on committing it, not to mention those who have committed it, that any proceeds gained or their monetary equivalent may be forfeited.
33Parliament also recognized that the forfeiture of proceeds of crime is not always practicable. Sometimes, proceeds can’t be found. They may be outside Canada. Or in the hands of a third party. What was taken may have been substantially diminished in value, rendered worthless or commingled with other property that cannot be divided without difficulty: Lavigne, at para. 18. And so, Parliament enacted a provision, s. 462.37(3), to permit judges to impose a fine in lieu of forfeiture.
34Section 467.37(3) permits a sentencing judge to order an offender to pay a fine in lieu of forfeiting the proceeds of crime where:
i. an order of forfeiture should be made in respect of an offender’s property; but
ii. the property or any part or interest of the offender in it cannot be made subject to an order of forfeiture.
The subsection describes several circumstances in which a judge may impose a fine in lieu of forfeiture.
35Section 462.37(1) tells us when an order of forfeiture can be made. Provided the prerequisites in the section have been met, an order of forfeiture is mandatory: Lavigne, at para. 14. The underlying conviction or finding of guilt must be for a “designated offence” as defined in s. 462.3(1). The Attorney General must apply for forfeiture. The sentencing judge must be satisfied, on a balance of probabilities, that:
i. the subject-matter of which forfeiture is sought is “proceeds of crime” within s. 462.3(1); and
ii. the designated offence was committed in relation to the property that is proceeds of crime.
The property that is “proceeds of crime” must not only be that of the offender but the offender must have had possession or control of the property in question at some point: R. v. Dwyer, 2013 ONCA 34, 296 C.C.C. (3d) 193, at paras. 21 and 24.
36Where an order of forfeiture is not possible or practicable, as for example where the proceeds have been used, transferred, transformed or cannot be located despite diligent efforts to do so, a sentencing judge may impose a fine in an amount equivalent to the value of the property in lieu of ordering forfeiture: Criminal Code, s. 462.37(3). The language used in this enabling authority is the permissive “may” rather than the mandatory “shall”: Lavigne, at paras. 19 and 29. This provision ensures that the purpose of the legislation is not frustrated by destruction, dissipation or other removal out of reach of the property.
37The exercise of the discretion for which s. 462.37(3) provides is not without boundaries. It is limited by the objective of the provision, the nature of the order and the circumstances in which the order is made: Lavigne, at para. 27.
38Two further points should be made about the relationship between the proceeds of crime provisions in Part XII.2 and the sentencing scheme enacted in Part XXIII.
39First, the focus of the two Parts is different. The Part XXIII sentencing scheme is offender-centric. Its focus is punishment of the offender for the crime of which she or he has been convicted or found guilty. Part XII.2 is different. Not offender-centric. Part XII.2 looks beyond the offender. Targeting the proceeds the offender has acquired through commission of the offence. Seeking to avert crime by showing it doesn’t pay by taking away its proceeds or a monetary equivalent. Depriving the offender of his or her criminal labours: Lavigne, at paras. 8; 16 and 25. The purpose of a fine in lieu of forfeiture is to replace the proceeds of crime with their monetary equivalent, not as punishment specifically for the designated offence.
40Second, the provisions of Part XII.2 are in addition to other provisions in the Criminal Code. They comprise a series of specific rules that partially preclude the application of the general provisions relating to sentencing, Part XXIII. But their preclusive reach is not complete. To the extent that the principles of Part XXIII are compatible with the specific provisions of Part XII.2, they continue to apply. But not otherwise: Lavigne, at paras. 39 and 52. In other words, we must look to the relationship between specific objectives, principles and factors of sentencing and the objectives of Part XII.2 to determine whether any specific principle is sufficiently compatible to warrant its application.
The Principles Applied
41As I will explain, I would not give effect to the appellant’s general submission that the trial judge erred by applying the sentencing principles of Part XXIII in concluding that he would not impose a fine in lieu of forfeiture of the respondent’s frauds.
42First, as a proposition of law, it simply cannot be said that the principles of sentencing in Part XXIII have no place in applications for forfeiture or a fine in lieu of forfeiture. Indeed, as noted above, the controlling precedent, Lavigne, makes it clear that the general rules are applicable in forfeiture proceedings, provided they are compatible with the specific provisions of Part XII.2: Lavigne, at paras. 39 and 52.
43Second, the trial judge’s reasons, read as whole, simply do not reveal any general indiscriminate application of Part XXIII to the forfeiture proceedings. Indeed, the reasons disclose an express statement to the contrary. That is not to say, however, that the reasons do not disclose errors with respect to specific principles in Part XXIII.
44Third, the sentencing judge did not make the error identified in Dwyer by considering forfeiture, or a fine in lieu of forfeiture, part of the punishment for committing the predicate offences. The judge in Dwyer, at para. 18, concluded that the carceral portion of the sentence satisfied the applicable principles of sentencing, thus, at least by necessary implication, including a fine in lieu of forfeiture as part of the sentence. That is simply not this case.
Ground #2: The Effect of a Fine in Lieu of Forfeiture on Rehabilitation and the Ability to Pay Restitution
45This ground of appeal requires no further reference to the circumstances disclosed at the sentencing hearing.
The Arguments on Appeal
46The Crown says the sentencing judge considered the effect the imposition of a fine in lieu would have on the respondent’s prospects for rehabilitation. As a result, the judge refused to order restitution in connection with the Dayco fraud. The amount - $936,000 – would detrimentally affect the respondent’s rehabilitation. A fine in lieu of forfeiture would equally be at cross-purposes with the respondent’s rehabilitation.
47The Crown argues that the trial judge’s concern with the effect of a fine in lieu of forfeiture on the respondent’s rehabilitation is not a relevant factor to consider in deciding whether to order a fine in lieu of forfeiture. Rehabilitation is an objective of sentencing, punishment of an offender for having committed an offence. Rehabilitation is offender-centric. The forfeiture scheme is distinct from sentence and cannot inform the determination of whether to order payment of a fine in lieu of forfeiture.
48The respondent says that the sentencing judge considered the impact of a fine in lieu of forfeiture on the respondent’s rehabilitation only to the extent that it would not frustrate the purpose of forfeiture or a fine in lieu and even if not, played a subordinate role in the decision to refuse to impose the fine.
The Governing Principles
49In addition to the principles discussed in connection with the first ground of appeal, four brief points should be added here to assist the decision on this ground of appeal.
50First, the imposition of a fine in lieu of forfeiture is not punishment imposed upon an offender: R. v. Khatchatourov, 2014 ONCA 464, 313 C.C.C. (3d) 94, at paras. 55-56. Nor is it part of the global sentence imposed upon an offender despite its inclusion in the definition of “sentence” in s. 673 of the Criminal Code for appeal purposes: Dritsas, at para. 56. Subsequent imprisonment for failure to pay the fine in lieu of forfeiture is an enforcement mechanism to encourage payment by those with the resources to do so: R. v. Bourque (2005), 2005 CanLII 3580 (ON CA), 193 C.C.C. (3d) 485 (Ont. C.A.), at para. 20; Khatchatourov, at para. 56.
51Second, since imposition of a fine in lieu of forfeiture is not part of the global sentence imposed on an offender, it is not to be consolidated with sentencing on a totality approach: R. v. Craig, 2009 SCC 23, [2009] 1 S.C.R. 762, at para. 34. Totality is a principle of sentence the purpose of which is to ensure that the total sentence imposed does not extinguish the rehabilitative potential of the offender.
52Third, the sentencing provisions of the Criminal Code distinguish between sanctions that involve imprisonment and those that do not do so. Deprivation of an offender’s liberty is qualitatively different from other sanctions. And so it is that forfeiture orders, or fines in lieu, must not be considered interdependently with general sentencing principles: Craig, at para. 37.
53Fourth, the sufficiency of the carceral component of a sentence to satisfy the applicable sentencing objectives and principles cannot justify refusal to order payment of a fine in lieu of forfeiture where the conditions for its imposition have been established: Dwyer, at para. 18; Lavigne, at paras. 25-26.
The Principles Applied
54As I will explain, I would give effect to this ground of appeal.
55To begin, I am satisfied that reading his reasons as a whole, the trial judge declined to order payment of a fine in lieu of forfeiture, in part at least, because of the effect he considered its imposition would have on the respondent’s rehabilitative prospects and his ability to satisfy the restitution orders made against him. Four reasons persuade that reliance on these factors reflects error.
56First, assistance in rehabilitating an offender is an objective of sentencing under s. 718(d) of the Criminal Code. Sentencing is punishment. Imposition of a fine in lieu of forfeiture is not regarded as punishment, thus the general statutory provisions of Part XXIII including the objectives in s. 718, have no say in exercising the limited discretion to refuse to impose a fine in lieu of forfeiture.
57Second, at the risk of saying the same thing in a slightly different way, the general sentencing provisions have limited application to forfeiture proceedings under Part XII.2 . Their application is co-extensive with their compatibility with the specific provisions of Part XII.2. Assistance in rehabilitation is not compatible with provisions which have as their objective depriving an offender of the proceeds of crime by making him or her pay their monetary equivalent.
58Third, to consider assistance in rehabilitation as a factor in deciding whether to order a fine in lieu of forfeiture is to adopt the interdependent or totality approach to sentencing and forfeiture expressly rejected in Craig.
59Fourth, the totality principle in sentencing seeks to ensure, in the case of terms of imprisonment to be served consecutively, that the total sentence does not extinguish any realistic rehabilitative prospects of an offender. This link to rehabilitation extinguishes the influence of this principle on the fine in lieu of forfeiture decision.
Ground #3: Civil Remedies and the Objectives of Forfeiture
60To situate this claim of error in its appropriate setting, it is helpful to recall a bit of background.
61At the sentencing hearing, the judge was asked to make restitution orders in relation to all the victims of the respondent’s frauds. He made free-standing restitution orders for each of the victims in the post-Dayco offences, amounting to $100,750, but declined to do so in connection with Dayco, where the quantum would be $936,000.
62The trial judge pointed out that Dayco had been reimbursed for its loss by its insurer. The insurer had commenced a civil action to which the respondent had no defence. The objectives of the restitution order had already been achieved – Dayco recouped its loss. The overlap between restitution and forfeiture was considerable and warranted refusal of a fine in lieu of forfeiture.
The Arguments on Appeal
63The Crown says that taking into account potential civil actions by the victim and the likelihood of their success in exercising the limited discretion to refuse to order payment of a fine in lieu of forfeiture reflects error.
64The Crown points out that in cases such as this, civil remedies are perpetually available to the victims of crime. Parliament would have been keenly aware of their availability when it enacted Part XII.2. But to consider the availability of civil remedies as a reason to refuse to order payment of a fine in lieu of forfeiture is not only contrary to the authorities, but also fundamentally at odds with the limited scope of the discretion to refuse an order imposing a fine in lieu of forfeiture. Further, consideration of the availability of civil remedies is incompatible with the purpose of forfeiture and fines in lieu of forfeiture.
65The respondent takes a different approach. These considerations were reasonable and appropriate. No controlling precedent addresses this issue, much less rejects the proposition that restitution orders and civil remedies can fulfill the legislative objectives that underlie the enactment of Part XII.2. Each seeks to deprive the offender of the proceeds of crime.
66In this case, the respondent continues, no criminal organization is involved. A single individual is adequately deterred and disgorged of the profits of his crime by the restitution ordered and the inevitably successful civil proceedings. Nothing more is achieved by imposition of a fine in lieu of forfeiture.
The Governing Principles
67No specific authority appears to have considered the interplay of the factors at work here: restitution, civil remedies and a fine in lieu of forfeiture. That said, some assistance can be found in precedents that consider the nature of restitution and the recruitment of other remedies to do the work of forfeiture proceedings.
68First, unlike fines in lieu of forfeiture, restitution orders are part of the general sentencing provisions of Part XXIII. And subject to the objectives, principles and factors that Part puts in place: R. v. Castro, 2010 ONCA 718, 102 O.R. (3d) 609, at paras. 24 and 35. The general sentencing principles of Part XXIII apply to restitution orders: Castro, at para. 35; R. v. Yates, 2002 BCCA 583, (2002), 169 C.C.C. (3d) 506 (B.C.C.A), at para. 7.
69Second, even in decisions about restitution, where general sentencing objectives in principles hold sway, rehabilitation is a secondary consideration where the underlying crime involves a breach of trust. A primary consideration where there is a breach of trust is the effect of the crime on the victim: Castro, at para. 35.
70Third, recall the holding in Dwyer that the alleged sufficiency of other sentencing components to satisfy the principles of sentencing does not engage the limited discretion to refuse to make an order in lieu of forfeiture where the prerequisites for making that order have been established: Dwyer, at para. 18; Lavigne, at paras. 25-26. See also, Craig, at para. 34.
The Principles Applied
71For reasons similar to those advanced in finding favour with the second ground of appeal, I would give effect to this ground.
72First, as the authorities make clear, once the conditions for imposition for a fine in lieu of forfeiture have been met, as they have here, a sentencing judge has a limited discretion to refuse to make the order. This makes sense. A fine in lieu of forfeiture may only be ordered where the prerequisites for an order of forfeiture have been met, but other circumstances, such as dissipation of the proceeds, make forfeiture impracticable. As the phrase “fine in lieu of forfeiture” itself suggests, the fine operates as a surrogate for forfeiture, surrender of the proceeds.
73The exercise of the discretion to refuse to order payment of a fine in lieu of forfeiture is limited by the objective of the provision, the nature of the order and the circumstances in which the order is made: Lavigne, at para. 27. None of these factors would seem to embrace the effect or influence of restitution orders or civil proceedings.
74Second, the availability of civil remedies and restitution orders is a constant, especially where the underlying offence involves property or property rights. The ability of a victim to pursue civil remedies(successfully) as a factor militating in favour of refusing to impose a fine in lieu of forfeiture, despite satisfaction of the requirements for it, risks grounding the refusal on the invidious distinction between victims who are adequately resourced to pursue civil remedies and those who are not. Such a distinction was rejected in Craig and lacks purchase where the proceeds of the fine go to the state, not to the victim.
75Third, the availability of civil remedies as a basis to refuse ordering payment of a fine in lieu of forfeiture does not sit well with the jurisprudence that rejects the interdependent or totality approach to sentencing and forfeiture. The availability and likely success of civil proceedings for victims to recoup their losses has nothing to do with proceeds of crime legislation, the objective of which is to deal with proceeds separately from, and in addition to, the punishment for committing the crime, which includes restitution to its victims.
76Fourth, restitution and enforcement of restitution orders is part of the sentencing scheme put in place by Part XXIII. Its application to forfeiture proceedings is limited.
Ground #4: Ability to Pay as a Factor
77The final ground of appeal may be outlined and determined economically.
The Arguments on Appeal
78The Crown argues that the sentencing judge’s focus on what happened to the proceeds of the respondent’s frauds seeped into his analysis of the fine in lieu application. This seepage, the Crown says, led inevitably into consideration of the respondent’s ability to pay as a factor that told against a fine in lieu of forfeiture. But what had happened to the proceeds, which admittedly had been dissipated, was irrelevant to the fine in lieu application.
79The Crown contends that the sentencing judge failed to separate out the proceeds principles from those applicable to the sentencing proceedings, including whether the sentence should encompass a restitution order. The judge’s characterization of the fine in lieu application and any order giving effect to it as redundant discloses a failure to appreciate the objectives of proceeds proceedings and to distinguish them from sentencing proceedings.
80The respondent resists any suggestion that the sentencing judge erred as the Crown contends. Indeed, the judge expressly said that he was disentitled to consider the respondent’s ability to pay when deciding whether to impose a fine in lieu of forfeiture. That he did so implicitly despite his self-direction to the contrary is a conclusion not borne out by a careful analysis of the reasons as a whole. The trial judge’s exercise of discretion remained grounded in the objectives of the forfeiture provisions.
The Governing Principles
81It is well-settled that ability to pay may not be considered either in deciding to impose a fine in lieu of forfeiture or in determining the amount of the fine: Lavigne, at paras. 1; 48; and 52. However, ability to pay is a factor to be considered in determining the time within which the fine is to be paid: Lavigne, at para. 52.
The Principles Applied
82Although this complaint of error is not entirely free of doubt, I am inclined to conclude that the sentencing judge appears to have allowed ability to pay to enter his analysis on the fine in lieu application. If this were the only complaint, the result may be different.
83First, the sentencing judge considered ability to pay, as well as the deleterious effect of an order in relation to Dayco, in rejecting Dayco’s claim for an order of restitution. He then considered the restitution orders as factors in refusing a fine in lieu because the restitution orders had largely satisfied the objectives of the proceeds proceedings.
84Second, the sentencing judge’s characterization of the fine in lieu application as “redundant”, in light of the restitution orders, comes uncomfortably close to consideration of ability to pay as an influential factor in refusing a fine in lieu of forfeiture. Particularly when the principal basis for refusing the restitution orders was the inability to pay and the surrogacy of the civil proceedings.
85Third, the sentencing judge appears to have linked ability to pay with his rejection of fine in lieu on the ground of its deleterious impact on the respondent’s rehabilitation, itself irrelevant to the fine in lieu decision.
CONCLUSION
86I would grant leave to appeal, allow the appeal and impose a fine of $1,036,750.00 in lieu of forfeiture. The respondent shall have 10 years after the expiration of any term of imprisonment to pay the fine. In default of payment, the respondent shall serve a further term of imprisonment of 10 years, which he shall serve consecutively to any other term of imprisonment he is then serving.
Released: September 13, 2016 (EEG)
“David Watt J.A.”
“I agree, E.E. Gillese J.A.”
“I agree, M. Tulloch J.A.”
