Court File and Parties
Ontario Court of Justice Toronto Region
In the Matter of the Provincial Offences Act, R.S.O. 1990, c. P. 33
Her Majesty The Queen (Travel Industry Council of Ontario)
v.
Franca Perruzza
Reasons for Judgment on Sentencing
Before: Her Worship Mary A. Ross Hendriks, Justice of the Peace
Appearances:
- Ms. S. Karas, Prosecutor for the Travel Industry Council of Ontario
- Ms. Franca Perruzza, Defendant, In Person
Reasons on Sentence
[1] Introduction
The following are my reasons on sentence, after several days of submissions, both written and oral, and of testimony.
Background
[2] Personal Circumstances
The defendant is a 46-year old woman. She has older, ailing parents and has a four-year old child. Her spouse left her while she was pregnant, and she is the child's sole caregiver. The pre-sentence report indicates that she has previously given up two children for adoption because of her personal circumstances. If she does have some underlying issues, beyond the obvious stress she is under, no diagnosis has been presented to me.
[3] Financial and Employment Status
She testified that she resides with her parents in a home at […] W. Road, Vaughan, which she co-owns with them as tenants in common, and which has a mortgage of about $350,000 on it. She estimated that the house is worth between $440,000 and $500,000, based on assessments that she has received. She also testified that she owns a property in Jamaica that she states is worth about $25,000. She testified that she currently works as a supervisor for Compass Canada, a cleaning company. She produced her pay stub during her testimony, and she earns $853.57 every two weeks, plus extra cash for cleaning houses.
[4] Criminal Record
She has no prior record and no outstanding charges.
[5] Guilty Pleas
At the outset of the trial, on April 21, 2011, the defendant entered guilty pleas to all the charges made against her, set out in counts 1, 2, 4, 5, 6 and 7, and the remaining charge against the corporate defendant was withdrawn.
[6] Agreed Statement of Facts
An Agreed Statement of Facts was provided to the court and entered as Exhibit 1.
Summary of the Agreed Statement of Facts
[7] Overview
The Agreed Statement of Facts discloses that the defendant had previously had her own numbered company, which was registered as a Travel Retailer. She voluntarily terminated its registration in September 2009 and began working as an Outside Sales Representative for Hospitality Tours on October 1, 2009. While under contract with Hospitality Tours, she continued to funnel some of her bookings through her own business, instead of Hospitality Tours. Each count is summarized below:
Count No. 1
[8] Unauthorized Travel Bookings – KINSA
During the period between October 1, 2009 and November 7, 2009, in the City of Toronto, she and her numbered company committed an offence under paragraph 31(1)(c) of the Travel Industry Act, 2002, S.O. 2002, Ch. 30, Sch. D (the "Act"), by acting or holding out as being available to act as a travel agents by making bookings and accepting payment from Kids' Internet Safety Alliance ("KINSA") for 9 return airline tickets from Johannesburg, South Africa to Toronto without being registered as a travel agent by the Registrar of the Act, contrary to paragraph 4(1)(a) of the Act.
[9] Prior Relationship with KINSA
KINSA had previously dealt with her and her numbered company and who was unaware that the company had ceased operations, and was thus prohibited from selling travel services.
[10] KINSA Booking Details
KINSA booked 9 return airline tickets from Johannesburg/Toronto/Johannesburg at a cost of $17,347, paid by VISA and certified cheque. A few days later, KINSA's representative had to cancel 5 of the 9 flights, and was promised a full refund by the defendant.
[11] Misrepresentation and Deception
When she was confronted with discrepancies by KINSA, she lied and described it as an error, knowing that she had received full payment for these bookings.
[12] Outstanding Loss
Ms. Perruzza promised complete restitution but has only made $3000 payment. KINSA is owed $15,896.21, and was unable to obtain a chargeback from VISA because the grievance fell outside the allotted time period.
Count No. 2
[13] Unauthorized Travel Bookings – International FC
During the period between April 1, 2010 and May 19, 2010, in the City of Toronto and in the City of Vaughan, she and her numbered company committed an offence under paragraph 31(1)(c) of the Act, by acting or holding themselves out as being available to act as travel agents by making bookings and accepting payment from International F.C ("IFC") for 37 return airline tickets from Toronto to Bologna, Italy without being registered as a travel agent by the Registrar, contrary to paragraph 4(1)(a) of the Act.
[14] Initial Booking and Cancellation
After receiving a series of payments from IFC, she told them their flight would be on Jet Airways and that they should receive their e-tickets about one week prior to departure. One day prior to departure, on May 18, 2010, she told them that Jet Airways had canceled their flights and that they were now flying on Alitalia and KLM. The Jet Airways flights had been canceled for non-payment.
[15] Manipulation of Employer
On May 18, 2010, she began manipulating the owner of Hospitality Tours so that it covered the cost of the replacement tickets she had located, telling him that another travel agency had "screwed them over" and that they had called her at the last moment for help, even claiming to have reprimanded them for not contacting her with the initial booking. She provided a series of excuses to Hospitality Tours for the non-payment from IFC, for tickets which had cost Hospitality Tours $58,154.36.
[16] Additional Errors and Costs
On May 26, 2010, while telling the owner of Hospitality Tours that she had made a serious error in booking an incorrect return date, TICO was calling Hospitality Tours to ask about a complaint from a consumer regarding stranded passengers in Italy. Some of the return flights she booked were out of Amsterdam and not Bologna, and the e-tickets issued could not be exchanged. Hospitality Tours had to issue new return tickets at an additional cost of $49,683.60.
[17] Deliberate Mishandling
According to page 6 of the Agreed Statement of Facts:
This was not an error on the part of Ms. Perruzza. When she made the bookings with Alitalia and KLM one day before departure, the airlines were unable to accommodate all departures from Bologna on May 26. Therefore Ms. Perruzza booked any available departure city and dates without informing the passengers.
[18] Discovery of Fraud
When the IFC group returned, the owner of Hospitality Tours called them to ask about their outstanding payment, and learned that the trip had been booked through her numbered company in April and that it had received full payment.
[19] Total Loss to Hospitality Tours
The total cost to Hospitality Tours of the IFC bookings made by Ms. Perruzza was $107,837.96.
[20] Fraudulent Cheque
On June 4, 2010, she provided Hospitality Tours with a $100,000 cheque drawn on her mother's bank account, but there were insufficient funds in the account.
Count No. 4
[21] Unauthorized Credit Card Use – Sonia McNally
Between December 2, 2009 and March 31, 2010, in the City of Toronto, Ms. Perruzza committed an offence under paragraph 31(1)(c) of the Act, by acting or holding herself out as being able to act as a travel agent by making bookings and accepting payment from Sonia McNally for Air Canada and Continental flights to Tampa, Florida and Guadalajara, Mexico, without being registered as a travel agent by the Registrar of the Act, contrary to paragraph 4(1)(a) of the Act.
[22] Initial Authorized Booking
On December 2, 2009, Ms. McNally contacted Ms. Perruzza by email and booked flights for her father, Pietro Petrozzi, to Florida and Mexico, departing Toronto in January, 2010. Ms. McNally provided Ms. Perruzza with her father's VISA number and authorized her to charge $228.91 and $614.80 for the flights. Ms. Perruzza provided the airline tickets and Mr. Petrozzi successfully traveled.
[23] Unauthorized Charges
However, when Ms. McNally reviewed her father's VISA statements, she found 5 unauthorized charges, which totaled $10,285.20. Without authorization, Ms. Perruzza had used this VISA card to pay tour operators for third party bookings on five different travel packages.
[24] Chargebacks
Ms. McNally disputed the charges with VISA, and received four chargebacks totaling $8,066.20. One charge, for $2,219.00, was not reversed because Ms. McNally was late in filing a dispute.
Count No. 5
[25] Unauthorized Booking – Carlos Toala
Between April 26, 2010 and May 25, 2010, in the City of Toronto, Ms. Perruzza committed the offence under paragraph 31(1)(c) of the Act, by acting or holding herself out as being available to act as a travel agent by making bookings and accepting payment from Carlos Toala for one return airline ticket from Toronto to Bologna, Italy, without being registered as a travel agent, contrary to paragraph 4(1)(a) of the Act.
[26] Initial Booking
Ms. Perruzza spoke to Karen Toala, who wished to book a return flight for her husband, Carlos Toala Sr., so that he could accompany their son Carlos Jr. to Bologna, for a soccer tournament, departing Toronto on May 19, 2010. Ms. Toala provided Ms. Perruzza with her AMEX card, and authorized the cost of the flight, $899.00. The son's previous flight had also been booked by Ms. Perruzza, but was a different flight.
[27] No Booking Existed
On May 26, 2010, which was the date of departure from Bologna, Mr. Toala was advised by the airline that no booking or reservation existed for himself or his son. He purchased three Air France return tickets for himself, his son and Jonathan Franco, another boy attending the same soccer tournament whose return ticket was not valid.
[28] False Explanation
On May 27, 2010, Ms. Toala was contacted by Ms. Perruzza who told her that she had inadvertently processed a $1,173.56 charge to Delta Air Lines on May 25, 2010. She promised to reimburse Ms. Toala, for the cost of the Delta charge and the three Air France tickets.
[29] Additional Unauthorized Charges
Mr. and Ms. Toala reviewed their credit card statements and found five charges for flights which they had not taken. The details are provided in the Agreed Statement of Facts.
[30] NSF Cheque
On July 13, 2010, Ms. Perruzza issued a $5,779.00 NSF cheque payable to Carlos Toala which was to cover the $1,173.26 unauthorized charge to Delta Air Lines and the three Air France return tickets and accrued interest.
[31] Fraudulent Payment Documents
On July 16, 2010, Ms. Perruzza replaced the NSF cheque with two credit card deposit slips indicating $4,579.00 was transferred from the Beltour Travel trust account to the MasterCard account of Mr. Toala and $1,200 was transferred to the VISA account of Mr. Toala. Both of these documents were fraudulent and no payments were ever made.
[32] Outstanding Loss
Mr. and Mr. Toala have yet to be compensated for their loss, which is $5,435.18, for the cost of unauthorized Delta ticket and three Air France tickets.
Count No. 6
[33] Unauthorized Booking – Angelo Naccarato
Between April 23, 2010 and May 25, 2010, in the City of Toronto, Ms. Perruzza committed an offence under paragraph 31(1)(c) of the Act, by acting or holding herself out as being available to act as a travel agent by making bookings and accepting payment from Angelo Naccarato for one return airline ticket from Toronto to Bologna, Italy, without being registered as an agent by the Registrar, contrary to paragraph 4(1)(a) of the Act.
[34] Initial Booking
Angelo Naccarato contacted Ms. Perruzza at Beltour Travel and booked a KLM flight to accompany his son Luca to Bologna, Italy, for a soccer tournament, departing Toronto on May 19, 2010. He gave her his MasterCard number and authorized her to charge $899.00 on it for the cost of this flight.
[35] Different Flights
His son's flight had been previously booked by Ms. Perruzza by IFC. Mr. Naccarato and his son left for Bologna on May 19, 2010, on different flights.
[36] No Booking Existed
On May 26, 2010, the date of departure for Bologna, he was advised by the airline that no booking or reservation existed for himself and his son. He purchased two Air France return tickets for himself and his son.
[37] False Explanation
On May 27, 2010, Ms. Perruzza contacted him and said that she had inadvertently processed a $1,173.56 charge to Delta Air Lines on May 25, 2010. She promised to reimburse him for the cost of the Delta and the two Air France tickets.
[38] Additional Unauthorized Charges
When he reviewed his credit card statement, he found five travel charges, for which he received no benefit. Further investigation revealed that various bookings had been made, some of which were for the benefit of other travelers and in their names.
[39] NSF Cheque
On July 13, 2010, Ms. Perruzza issued a $5,200.00 NSF cheque payable to Angelo Naccarato which was to cover the $1,173.26 unauthorized charge to Delta Air Lines and the two Air France return tickets and accrued interest.
[40] Fraudulent Payment Documents
On July 16, 2010, Ms. Perruzza replaced the NSF cheque with two credit card deposit slips indicating $3,940.00 was transferred from the Beltour Travel trust account to the VISA account of Mr. Naccarato and $1,279.00 was transferred to his MasterCard account. Both of these documents were fraudulent and no payments were ever made.
[41] Outstanding Loss
Mr. Naccarato has not been compensated $3,727.42 for the cost of the unauthorized Delta ticket and the two Air France tickets.
Count No. 7
[42] Multiple Unauthorized Bookings
While under contract with Hospitality Tours as an Outside Sales Representative, Ms. Perruzza made bookings that resulted in a financial loss to the travel agency. Some of the bookings were made without reporting the sale to Hospitality Tours, using unauthorized credit card payments and failing to forward consumer payments to Hospitality Tours. The total loss to Hospitality Tours for these bookings is $35,716.46. In addition, Sandra Pecile is also owed $5,378.00, as described in detail in the Agreed Statement of Facts.
[43] Number of Breaches
The Agreed Statement of Facts provided the court with 28 separate breaches by Ms. Perruzza, that led to Hospitality Tour's loss, and the loss to Ms. Pecile.
Victim Impact Statements
[44] General Impact
The Prosecutor provided the court with seven victim impact statements. No objection was made to their entry as exhibits to this proceeding. Each of them described their profound disappointment with Ms. Perruzza, who lied to them and manipulated them. She misused her position of trust, as well as their funds. One victim is elderly and on a fixed income.
[45] Impact on KINSA
In particular, the President of KINSA, Paul Gillespie, wrote that they are a small Canadian registered charity, which trains law enforcement officials around the world in order to prevent child abuse over the internet. Because she over-billed their credit card about $16,000, some of the officers who were supposed to attend a training session were unable to do so.
[46] Impact on Hospitality Tours
Moreover, the President of Hospitality Tours, Rade Sekulic, also wrote of his loss of trust in humanity, and the jeopardy that this caused his business, as follows:
- Her actions made me lose all my working capital, all my personal savings and was forced into a 227 thousand line of credit/debt (2nd mortgage).
− I was pushed to the brink of bankruptcy and it almost destroyed my marriage
− It caused me, my wife and my sons undescribable grief and emotional pain. And still does to this day
− I was forced to cut salaries and put my staff on commission...
Prosecution's Submissions with Respect to Sentence
[47] Sentencing Recommendations
In light of the seriousness of the offences committed, and the fact that these offences were breaches of a consumer protection statute, the prosecution has asked the court to impose a custodial sentence of 235 days, in total, to be served consecutively, based in part on the following submissions:
- Count No. 1 – loss to KINSA $15,896.21 – Jail for 30 days
- Count No. 2 – International FC, accepted cash from IFC, lied to Hospitality Tours re: booking, loss to Hospitality Tours is $107,837.96 – Jail for 180 days
- Count No. 4 – Sonia McNally, misuse of credit card, loss to Pietro Petrozzi of $2,219.00 – Jail for 10 days
- Count No. 5 – Carlos Toala, misuse of credit card, loss of $5,435.18 – Jail for 15 days
- Count No. 6 – Angelo Naccarato, misuse of credit card, loss of $3,727.42 – Jail for 15 days
- Count No. 7 – various bookings, misuse of credit card, chargebacks to Hospitality Tours. Loss to Hospitality Tours is $35,716.46, and loss to Sandra Pecile is $5,378.00. Jail for 45 days.
[48] Probation Conditions
In addition, the prosecution has asked the court to impose a probation order for two years, with the following conditions, in addition to the statutory conditions outlined in section 72(2) of the POA:
Not less than 5 days prior to accepting employment in the travel industry (both full time and contract), inform the Registrar, Travel Industry Act, 2002, of the name of the employer and the conditions of the employment.
Prior to accepting employment in the travel industry, inform the employer of the conviction under the Travel Industry Act, 2002, and the sentence.
[49] Restitution Concerns
The prosecution notes that Ms. Perruzza offered to make restitution to a number of her victims, and failed to pay it. She argues that the pre-sentence report raises a concern that she could ever pay it. The prosecutor also submits that Ms. Perruzza has never clearly indicated how she plans to make restitution, despite numerous opportunities to do so throughout a lengthy sentencing hearing. She submits that it is an error in law to impose a fine or order restitution if it will not be paid even if it is so ordered.
[50] Message to Society
The prosecutor, in its final written Sentencing Submissions, at p.1, is urging the court to send "a clear message to society that offences such as these will be punished and justice will prevail."
Defendant's Submissions with Respect to Sentence
[51] Early Guilty Pleas and Acceptance of Responsibility
Mr. Lacaria submits that his client admitted to the circumstances of these offences at an early stage. She participated in the preparation of an Agreed Statement of Facts, which indicates that she has accepted responsibility for her actions, and saved the court time. She has no criminal record and no POA record. He reiterated her difficult personal circumstances, which include losing her career in the travel industry, her responsibilities as a single parent to a very young child, and her elder care responsibilities. He referred to her stated remorse.
[52] Specific Deterrent – Career Change
She is no longer working in the travel field, which he submits is a specific deterrent to her. Instead, she is now the supervisor for a cleaning company.
[53] Restitution as General Deterrence
He submits that restitution is a form of general deterrence, and should be ordered. He noted that she is working, and between her modest income and her small real estate interests, she could make restitution. If she is incarcerated, she will be unable to work and restitution is much more doubtful.
[54] Restitution Payments
In his final written Sentencing Submissions, Mr. Lacaria indicated that Ms. Perruzza has provided him with $800 in January 2012 towards restitution, which is in his trust account, as earlier directed by the court, and that she has indicated to him that she will continue to pay $800 per month into his trust account until the final judgment is rendered in this matter.
[55] Use of Property as Security
Mr. Lacaria submits that since she is on title for the home at […] W. Avenue, Vaughan, that the prosecutor could place a judgment on title, as a form of restitution.
[56] Proposed Sentence
He submits that the appropriate sentence should be as follows:
- restitution, through title to the home;
- bail conditions to include monthly restitution payments;
- house arrest, and she only be permitted to leave for work and health concerns of her parents and child;
- an exception to the house arrest so that she may take her child to and from school; and
- attend any and all counseling as the court deems fit.
Analysis
The Nature of Regulatory Offences Generally
[57] Definition and Characteristics
Justice Libman recently wrote a research paper for the Law Commission of Ontario, entitled, "Sentencing Purposes and Principles for Provincial Offences." He described the nature of regulatory offences, at p.16, as follows:
Unlike Criminal Code offences or "true crimes", which have a fault or moral blameworthiness element, regulatory or public welfare offences do not always involve fault. Negligence may suffice. Sometimes there will be a fault element; other times an absence of fault or absolute liability. In its seminal judgment in which the "half-way" house of strict liability was formally introduced into Canadian jurisprudence for regulatory offences, as a middle ground between fault (mens rea) and absence of fault (absolute liability), the Supreme Court of Canada observed in R. v. Sault Ste. Marie (City) that public welfare offences involve a "shift of emphasis", from protecting individual interests to protecting societal and public interests.
[58] Evolution of the POA
The POA was promulgated in 1979, to enact a procedure for the prosecution of offences under Ontario's statutes, regulations and municipal by-laws, replacing the Summary Convictions Act. Since it was enacted, some important changes have occurred, including the adoption of the Canadian Charter of Rights and Freedoms (the "Charter"), amendments to the Criminal Code, and significantly increased penalties for certain provincial offences, including the Travel Industry Act, 2002, among others.
[59] Law Commission Recommendations
In the Law Commission of Ontario's Final Report, August 2011, "Modernization of the Provincial Offences Act," at p.4, it called for the adoption of sentencing principles, particularly for Part III offences, noting that:
The proposed sentencing principles cannot be realized with the penalties currently available. We therefore recommend that the POA be amended to give the court the authority to (a) make probation orders for all provincial offences in order to achieve the remedial and rehabilitative sentencing principles, including broad authority to order terms of probation (although for less serious offences only under certain circumstances); (b) make express, freestanding restitution or compensatory orders outside of probationary terms that may be enforced in civil courts; (c) use victim impact statements; and (d) impose an embedded auditor to monitor compliance with regulatory standards. We defer to the Ministry of the Attorney General consideration of whether alternative measure programs should also be available for less serious offences, after further consultation with municipalities. (Recommendations 18 to 23). [emphasis theirs]
[60] Court's Agreement
I agree with the Law Commission's recommendations. In this instance, the POA combined with this particular statute permit me to consider a wider variety of sanctions than other statutes allow, which are analyzed below.
Statutory Provisions
[61] Sentencing Submissions
The POA provides that after a defendant has been convicted of an offence, both the prosecutor and the defendant's representative shall be given an opportunity to make submissions as to sentence, as per s. 57(1).
[62] Inquiries Regarding the Defendant
The POA also permits the court to make inquiries "of and concerning the defendant," including the defendant's "economic circumstances," as per s.57(3). Ms. Perruzza has testified extensively about her ability to make restitution, her income, and her assets. She has also testified that she is the sole caregiver for her four-year old daughter and that she assists her older, ailing parents, who in turn, assist her with the care of her young daughter.
[63] Pre-Sentence Report
The POA also empowers the court to obtain a pre-sentence report, as per s. 56(1), which I have obtained and reviewed.
[64] Fine Limits
Section 61 of the POA provides that fines under the POA should not exceed $5000, unless "otherwise expressly provided by law."
[65] Travel Industry Act Penalties
The penalties for an individual who contravenes this Act clearly exceed what is typically contemplated under section 61 of the POA. It provides as follows:
Offence
31(1) A person is guilty of an offence who,
(a) furnishes false information in any application under this Act or in any statement or return required under this Act;
(b) fails to comply with any order, other than an order made under section 18, direction or other requirement under this Act; or
(c) contravenes or fails to comply with any section of this Act or the regulations made under this Act, other than a code of ethics established by the Minister under section 42. 2002, c.30, Sched. D, s.31(1).
Corporations
(2) An officer or director of a corporation is guilty of an offence if he or she fails to take reasonable care to prevent the corporation from committing an offence mentioned in subsection (1). 2002, c.30, Sched. D, s.31(2).
Penalties
(3) An individual who is convicted of an offence under this Act is liable to a fine of not more than $50,000 or to imprisonment for a term of not more than two years less a day, or both, and a corporation that is convicted of an offence under this Act is liable to a fine of not more than $250,000. 2002, c.30, Sched. D, s.31(3).
Limitation
(4) No proceeding under this section shall be commenced more than two years after the facts upon which the proceeding is based first came to the knowledge of the director. 2002, c.30, Sched. D, s.31(4).
Orders for compensation, restitution
32.(1) If any person is convicted of an offence under this Act, the court making the conviction may, in addition to any other penalty, order the person convicted to pay compensation or make restitution. 2002, c.30, Sched. D, s.32(1).
[66] Available Sentencing Options
It is open to this court to consider a fine of up to $50,000, imprisonment for a term of not more than two years less a day, and an order for compensation or restitution.
General Sentencing Principles
[67] Probation Under the POA
In their looseleaf work, "Regulatory and Corporate Liability," Canada Law Book, Aurora: 2010, T. Archibald, K. Jull, and K. Roach note at page 12-9,
At present, under s.72 of the POA, probation is only available for those offences that carry a term of imprisonment. Under the classification advanced in this book, this will cover most if not all strict liability offences. The language employed in s.72, however, needs to be updated, as it refers to rehabilitation of the offender which, while relevant, is not the only principle on which a probation order ought to be made. Deterrence and reparation can also be relevant.
[68] Probation Available
Thus, it also remains open to put the defendant on probation, as per section 72 of the POA.
[69] Criminal Code Sentencing Principles
The prosecutor referred to the sentencing principles as articulated in sections 718, 718.1 and 718.2 of the Criminal Code, in light of the fact that there are no sentencing principles enshrined in the POA. I accept that these sentencing principles are frequently invoked in POA proceedings, as a form of guidance.
[70] Fundamental Purpose of Sentencing
As set out in section 718 of the Criminal Code:
The fundamental purpose of sentencing is to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the following objectives:
(a) to denounce unlawful conduct;
(b) to deter the offender and other persons from committing the offences;
(c) to separate offenders from society, where necessary;
(d) to assist in rehabilitating offenders;
(e) to provide reparations for harm done to victims or in the community; and
(f) to promote a sense of responsibility in offenders, and acknowledgment of the harm done to victims and to the community.
Denouncement
[71] Nature of Defendant's Conduct
Ms. Perruzza's conduct was deliberate and destructive. Her schemes have resulted in her unjust enrichment, and caused a corresponding deprivation to those who relied on her, while she occupied a position of trust as a travel agent, a role that goes beyond merely conducting commercial transactions. She has caused suffering to many travelers who were left stranded in Europe, without flights home. She has caused a children's charity to reduce its operations because of the loss it incurred. Her employer suffered catastrophic financial hardship because of her manipulation.
[72] Abuse of Trust and Deterrence
Her actions are akin to theft as articulated in the Criminal Code. It is an aggravating factor that she abused her position of trust. Given the number of and seriousness of the offences committed, and her abuse of her position of trust, a period of incarceration is warranted, even for a first offence, as a matter of general deterrence.
[73] Prosecution's Request
The prosecutor is seeking consecutive sentences, which equal 235 days of committal.
[74] Concurrent vs. Consecutive Sentences
Generally, sentences for multiple criminal convictions are served concurrently in Canada. A judge may impose a consecutive sentence if the offender is already serving a prison sentence for an earlier conviction, provided that the combined sentence is not unduly long or harsh, as per s.718.2(c) of the Criminal Code. Ms. Perruzza committed similar multiple offences over a short period of time, which I characterize as a "spree," particularly given her lack of antecedents. A concurrent sentence is appropriate in these circumstances because the offences share a sufficiently close nexus, see: Clayton C. Ruby et. al., Sentencing, 7th ed., Markham: Lexis Nexis Canada Inc., 2008, at paras. 14.9 – 14.10.
[75] Mitigating Factors
As much as Ms. Perruzza's actions have caused devastating financial hardship to her victims, it is a first offence without a criminal or POA record being alleged. She has cooperated with the prosecution from the outset and through her representative, entered guilty pleas on all counts. She has expressed remorse for her wrongdoing.
[76] Personal Circumstances
Ms. Perruzza has some very difficult personal circumstances, and I find that based on what has been described as the "sad life" principle by Justice Giles Renaud in his book, Speaking to Sentence: A Practical Guide, Thomson Carswell, Toronto: 2004, in chapter 3, I have determined that Ms. Perruzza should be shown some leniency in sentencing in this regard, as well.
Deterrence
[77] Regulatory Sentencing Principles
As Archibald, Jull and Roach, supra, note at page 12-12, the case that is the "bedrock of regulatory sentencing" is the decision of the Ontario Court of Appeal in R. v. Cotton Felts Ltd., 1982 CanLII 3695 (ON CA), 2 C.C.C. (3d) 287. The Court of Appeal referred to the importance of public welfare legislation, and found that deterrence through fines is the key focus of sentencing, at page 294:
To a very large extent the enforcement of such statutes is achieved by fines imposed on offending corporations. The amount of the fine will be determined by a complex of considerations, including the size of the company involved, the scope of the economic activity in issue, the extent of the actual and potential harm to the public, and the maximum penalty prescribed by the statute. Above all, the amount of the fine will be determined by the need to enforce regulatory standards by deterrence.
[78] Avoiding "Licence Fee" for Illegal Activity
In Cotton Felts, the Court of Appeal warned against a fine becoming a "mere licence fee for illegal activity," at page 295. As Archibald, Jull and Roach, supra, at page 12-13 opine:
Fines may be more likely to become licence fees in cases where the violation has not resulted in any harm. A court may be tempted to hand out a lower fine on the basis that no harm resulted. This would be a mistake. The regulatory process is designed to prevent harm, and circumvention of the process ought to be punished accordingly. This principle was recognized in R. v. Abbott, where the court rejected the suggestion that the fine should only be twice the licensing fee. The court recognized that sufficient deterrence is required to force persons to adhere to the permit system with all of its review, which the accused had circumvented.
[79] Imprisonment for Regulatory Offences
In R. v. Wholesale Travel Group Inc., 1991 CanLII 39 (SCC), [1991] 3 S.C.R. 154, Justice Cory confirmed that imprisonment was one of the sanctions available for regulatory offences. He cautioned, however, that, "There is quite properly a difference or variation between what the principles of fundamental justice require in regard to true crimes and what they require in the regulatory context." [emphasis added is mine]
[80] Jail as Last Resort
While a jail term is typically used as a last resort for regulatory sentences, as Archibald, Jull and Roach note, supra, at page 12-21, "recent cases continue the trend of imposing jail where there is clear culpability." Ms. Perruzza's culpability in this matter is overwhelming.
[81] Intent vs. Negligence
In particular, I refer and rely upon the work of my colleagues, His Worship Madigan, and His Worship Quon, who have relied upon R. v. Wholesale Travel Group Inc. 1991 CanLII 39 (S.C.C.), (1991), 67 C.C.C. (3d) 193 (S.C.C.) as the authority to make a distinction between regulatory offences where the fault is based on negligence, and thus incarceration is not usually appropriate, versus regulatory offences which are closer to a true crime, and have demonstrated proof of intent or knowledge. See: R. v. Pellegrini, 2006 ONCJ 297 (CanLII), at para.31, and R. v. Virk, [2002] O.J. No.4102 (QL) (O.C.J.).
[82] Balancing Factors
While I agree with the prosecutor that a period of imprisonment is appropriate, given the aggravating factors of unjust enrichment and abuse of trust; nevertheless, the consecutive sentence sought by the prosecution for a first offence, even one of this magnitude, would be disproportionate, and I decline to impose it. Similarly, I find that Mr. Lacaria's call for a conditional sentence combined with house arrest to be an inappropriate expression of general deterrence and denunciation, given the number of offences and the quantum of the victims' losses as a result.
[83] Intermittent Sentence
Thus, in terms of denunciation, retribution and deterrence, I find that a 90 day sentence, to be served intermittently, and on weekends, balances the need to punish her deliberate acts, with the mitigating factors in her favour, such as her lack of any record, her family responsibilities, her unfortunate personal circumstances, and the efforts that she has begun to make towards restitution.
Restitution
[84] Ability to Make Restitution
This case calls out for restitution, as a matter of justice. The prosecutor is correct that there is authority for the proposition that the court should not impose a fine or order restitution if it cannot be met. However, I find, as a matter of fact, that Ms. Perruzza is able to start making restitution, for the following reasons:
(a) she continues to work full time as a supervisor in a cleaning company, and the custodial portion of her sentence can be served intermittently on weekends, thus allowing her to continue to support herself and her daughter, while making monthly payments of restitution;
(b) she has begun to make monthly payments of $800, to her representative, in trust, to show her sincerity;
(c) she has testified that she owns a property in Jamaica worth $25,000, but that she is having some difficulty in selling it, thus, she is not as impecunious as the prosecutor believes;
(d) she is on title, albeit as a tenant in common with her parents, for a house in Vaughan that is worth a substantial sum; and
(e) She was cautioned by the court, during her testimony, that any order made for restitution in these proceedings would survive an application for personal bankruptcy. She nodded and said that she was aware of this situation.
[85] Failure to Comply with Court Direction
I agree with the prosecutor's written submission that Ms. Perruzza has repeatedly failed to comply with my direction that her parents attend this sentencing hearing to testify about re-mortgaging the house to make restitution, and provide the court with proof of their independent legal advice. In her testimony, she said that she could obtain a second mortgage of $50,000 to $65,000 for the purpose of making restitution.
[86] Balancing Considerations
Nevertheless, Mr. Lacaria has recently provided the court with proof that she does have an interest in a significant asset (the home at […] W., Vaughan). I find it would be unfair to those who have been unjustly deprived to fail to seek redress for them. I also find, balancing all considerations, including her lack of antecedents, that it is more important that she continue to work full-time and to care for her small child while making restitution, than to occupy a jail cell continuously.
[87] Free-Standing Restitution Order
I have the power under this statute to make a stand-alone restitution order, in addition to incarceration and an order of probation, and I am prepared to use those powers to achieve a result that is meaningful for Ms. Perruzza and her victims.
[88] R. v. Castro – Similar Circumstances
The Court of Appeal was faced with a similar set of circumstances in R. v. Castro, 2010 ONCA 718 (CanLII), in which a judge ordered a middle-aged man who had abused his position of trust as a paralegal and been convicted of theft, to a sentence of 23 months imprisonment, plus two years of probation, and to make restitution, in the amount of $141,752. Submissions were made to the judge with respect to the legality of free-standing restitution orders, and the fact that such an order survives bankruptcy. Case law was provided to the judge indicating that restitution can be ordered in addition to a period of incarceration. At the time of sentencing, Mr. Castro was unemployed, and collected monthly disability payments of $900. The judge rejected the defence's call for a conditional sentence combined with house arrest, finding that such a sentence would not be an effective expression of general deterrence and denunciation to the extent required by the case.
[89] Zelensky Factors for Restitution
On appeal in Castro, supra, in para. 24, the Court of Appeal analyzed how a restitution order forms part of a sentence, including the 10 factors set out by the Supreme Court of Canada in R. v. Zelensky, 1978 CanLII 8 (SCC), [1978] 2 S.C.R. 940, as summarized by Labrosse J.A in R.v. Devgan 1999 CanLII 2412 (ONCA), (1999), 136 C.C.C.(3d) 238 at para. 26, as follows:
(1) An order for compensation should be made with restraint and caution;
(2) The concept of compensation is essential to the sentencing process:
(i) it emphasizes the sanction imposed upon the offender;
(ii) it makes the accused responsible for making restitution to the victim;
(iii) it prevents the accused from profiting from crime; and
(iv) it provides a convenient, rapid and inexpensive means of recovery for the victim;
(3) A sentencing judge should consider:
(i) the purpose of the aggrieved person in invoking s.725(1);
(ii) whether civil proceedings have been initiated and are being pursued; and
(iii) the means of the offender.
(4) A compensation order should not be used as a substitute for civil proceedings. Parliament did not intend that compensation orders would displace the civil remedies necessary to ensure full compensation to victims.
(5) A compensation order is not the appropriate mechanism to unravel involved commercial transactions;
(6) A compensation order should not be granted when it would require the criminal court to interpret written documents to determine the amount of money sought through the order. The loss should be capable of ready calculation;
(7) A compensation order should not be granted if the effect of provincial legislation would have to be considered in order to determine what order should be made;
(8) Any serious contest on legal or factual issues should signal a denial of recourse to the offender;
(9) Double recovery can be prevented by the jurisdiction of the civil courts to require proper accounting of all sums recovered; and
(10) A compensation order may be appropriate where a related civil judgment has been rendered unenforceable as a result of bankruptcy.
[90] Appropriateness of Free-Standing Restitution
A free-standing restitution order is appropriate, because it would impose a meaningful sanction on Ms. Perruzza. It would prevent her from profiting from her wrongdoing, to which she has freely admitted, and which has already been quantified, on consent, in the Agreed Statement of Facts. No mention has been made of any civil proceedings, in this matter, and the victim impact statements are clear of the serious harm done. Moreover, Ms. Perruzza admitted to me during her testimony that she only became registered on title to the family home in May 2011, after guilty pleas were entered on all charges in April 2011. Despite her evidence that the money is gone, I have grave concerns that without a free-standing restitution order, she will have been unjustly enriched from her wrongdoing, at the direct expense of others, while holding a position of trust. A sentence that includes a free-standing restitution order will survive any bankruptcy proceedings, unlike a civil judgment. Since she is middle-aged, owns some property in Canada and Jamaica, and she is working full-time, albeit as a single mother and at a low income, after weighing all the factors in this matter carefully, and I find that restitution is highly appropriate under the circumstances.
[91] Castro – Breach of Trust Principle
Again, in Castro, supra, the Court of Appeal had to grapple with a middle-aged man who was living on disability payments, and faced with a stand-alone restitution order. Because it was a breach of trust situation, the Court of Appeal held, at para 28:
...the paramount consideration is the claim of the victims: Fitzgibbon at pp.1014-15. Ability to pay is not the predominant factor. Indeed, where the circumstances of the offence are particularly egregious, such as where a breach of trust is involved, a restitution order may be made even where there does not appear to be any likelihood of repayment: R.v. Yates 2002 BCCA 583(CanLII), (2002), 169 C.C.C. (3d) 506 (B.C.C.A.) at paras. 12 and 17.
[92] Sentencing in Breach of Trust Cases
The Court of Appeal in Castro, supra, at para. 30, sums up the sentencing of an offender in a breach of trust case this way:
In imposing a sentence where the offender has used his or her position to commit a breach of trust, the primary considerations are the protection of the public, general deterrence and the repudiation of the conduct of which the offender was found guilty. Relevant factors include the length of time over which the conduct took place, whether the offence was a sophisticated and well planned scheme, the amount involved, and most importantly, the impact of the offender's conduct on the victims. The secondary considerations are specific deterrence, rehabilitation and any mitigating circumstances such as a plea of guilty or co-operation with the authorities (in tracing the funds): Scherer, per Martin, J.A at para. 34. [emphasis theirs]
Sense of Responsibility
[93] Remorse and Emotional Issues
Ms. Perruzza has expressed remorse throughout this proceeding, although her testimony with respect to making restitution has been inconsistent. I infer from her pre-sentence report that there may be some emotional issues involved which have not been fully explained. Mr. Lacaria suggested in his final written submission that she would abide by an order for counseling.
[94] Counseling
I find that counseling would be beneficial for Ms. Perruzza, so that she can not only acknowledge the harm that she has done, but hopefully improve her well-being so that she does not engage in any future harmful behaviour.
Probation
[95] Probation Conditions
I am imposing a period of two years of probation on Ms. Perruzza, commencing today. In addition to the statutory conditions outlined in s.72(2) of the POA, she must:
(a) Not less than 5 days prior to accepting employment in the travel industry (both full time and contract), inform the Registrar, Travel Industry Act, 2002, of the name of the employer and the conditions of the employment;
(b) Prior to accepting employment in the travel industry, inform the employer of this conviction under the Travel Industry Act, 2002, and this sentence;
(c) Report to Room 371 at Old City Hall, 60 Queen St. W., Toronto, within two working days of today's date and thereafter as directed by the probation office; and
(d) Attend any counseling and sign any waivers related thereto, as directed by the probation office.
Free-Standing Restitution Order
[96] Restitution Order
In addition, I am requiring Ms. Perruzza to comply with a free-standing restitution order, attached herein as Appendix "A".
Order
[97] Sentencing Order
For the reasons set out above, I hereby order that Ms. Perruzza is sentenced as follows:
(1) 90 days in custody, to be served intermittently, commencing today for processing only and to be released later today; and to re-commence on Friday, March 9, 2012. She must attend at prison every Friday night at six p.m. until Monday morning at six a.m., until she has completed her time served;
(2) Probation for two years, on the conditions set out in detail above, reporting to room 371 at Old City Hall, 60 Queen St. W., Toronto, within two working days of today's date and thereafter as directed; and
(3) Comply with a free-standing Restitution Order, as attached herein as Appendix "A."
Dated at Toronto, this 1st day of March, 2012.
Mary A. Ross Hendriks, J.P.
Restitution Order
Pursuant to Subsection 32(1) of the Travel Industry Act, 2002, S.O. 2002, Ch.30. Sch. D., the Ontario Court of Justice, Toronto Region, hereby makes the following stand-alone Restitution Order:
On the 21st day of April, 2011, Franca Perruzza entered guilty pleas to six counts set out under Section 23 of the Provincial Offences Act, for contraventions of the Travel Industry Act, 2002. She was sentenced by this Court on March 1, 2012;
As part of her sentence, this Court hereby makes the following Restitution Order:
Franca Perruzza is hereby ordered to pay:
(1) the Kids' Internet Safety Alliance the amount of $15,896.21;
(2) Pietro Petrozzi the amount of $2,219.00;
(3) Carlos Toala the amount of $5,435.18;
(4) Angelo Naccarato the amount of $3,727.42; and
(5) Hospitality Tours the amount of $146,554.42.
Such restitution is to be paid to each of the above-named persons or organizations, delivered to the Travel Industry Council of Ontario, 2700 Matheson Blvd. E., Suite 402, Mississauga, Ontario L4W 4V9, for disbursement.
Dated at the City of Toronto, the 1st of March, 2012.
Mary Ross Hendriks, J.P.