Court File and Parties
Ontario Court of Justice
Between:
Her Majesty the Queen
— and —
Debbi Kelly
Before: Justice Fergus O'Donnell
Heard on: 7 December 2012 and 3 June 2013
Reasons for Sentence Delivered on: 17 July 2013
Counsel:
Mr. I. Sunderland / Mr. F. Schembri for the Crown
Ms. A. Yorgiadis for the Defendant, Debbi Kelly
Reasons for Sentence
O'Donnell, J.:
Background and Offences
1Debbi Kelly has pleaded guilty to three fraud-related charges arising out of her employment as a supervisor at the Highview Wilson Childcare Centre in Toronto, where she had worked for 23 years. Her duties included ordering supplies and reporting purchases to the board of directors. One of the counts was a general fraud against the daycare; the other two counts related to Ms. Kelly's fraudulent establishment of credit accounts with The Home Depot and Staples, purportedly on behalf of the daycare but for her actual benefit.
2The police were called to the centre and told that an internal audit had disclosed Ms. Kelly's defalcations. It was not agreed between the parties precisely how the fraud came to light, with the Crown saying that the auditor unearthed unexplained invoices and notified the president of the daycare, who avoided the issue for a while but eventually went to meet the auditor, ironically taking along Ms. Kelly, not realizing she was the problem. Ms. Kelly said that she had told the president of the daycare what she had done, knowing that the audit was forthcoming, something that happened every year.
3However the fraud came to light, the admitted facts included that Ms. Kelly had opened credit card accounts in the centre's name, but with her address, all without the board's knowledge. Items purchased on those accounts were not sent to the centre and centre employees reported seeing items consistent with the items charged to the centre at Ms. Kelly's home, although Ms. Kelly seemed to suggest that some of those items were bought with her own money or by her mother-in-law. It was also learnt that she had forged board members' signatures on cheques and that she had doctored other employees' petty cash claims, which she was in charge of, raising the value of the claim and pocketing the difference herself.
4Ultimately, it matters little if this appliance or that was the fruit of the fraud upon the centre. The bottom line is that the total value of Ms. Kelly's fraud against the centre was a very substantial amount in the area of $300,000. It bears noting that the economic value of the fraud to Ms. Kelly would be more than if she had earned $300,000 in salary since she had the full benefit of the $300,000 defrauded with no deductions for income tax and the like. This is a very large supplement to Ms. Kelly's income. The frauds took place over roughly a 3½ year period, from early 2008 to mid-2011.
Personal Circumstances
5Ms. Kelly has no previous criminal record. She is 56 years old. She has been married for 25 years. Her husband worked in retail until the 1990s, at which time he stopped working outside the home and focused on caring for Ms. Kelly's elderly mother until her death some years ago. Her mother's long illness and ultimate death in 2001 after being cared for in Ms. Kelly's home was a stressful period. Ms. Kelly's husband has carpal tunnel problems in both wrists; his age and health problems keep him from full-time employment.
6Ms. Kelly filed two letters of reference, one from a friend/neighbour of fifteen years who described Ms. Kelly as honest and trustworthy and committed to the wellbeing of the children at the daycare. In effect, this letter of reference refuses to accept that Ms. Kelly could be guilty of the charges to which she has pleaded guilty. Another referee wrote of having known Ms. Kelly for almost twenty years when her daughter was enrolled at the daycare; that daughter has pursued a career in early childhood education based on Ms. Kelly's example. Even allowing for the limitations of the first letter, I am prepared to accept that for two decades Ms. Kelly was dedicated to the care and wellbeing of the young children at the centre.
Health Condition
7Ms. Yorgiadis told me that the first manifestation of health trouble was difficulties with vision starting in 2006. I was also presented with a letter from Ms. Kelly's neurologist. Ms. Kelly suffers from multiple sclerosis and has been under the doctor's treatment for that since mid-2007. After some periods of remission in 2008-2009 and hip surgery in 2010, her condition, Ms. Yorgiadis tells me, has worsened since 2011-2012, including more recurrences of MS symptoms over the past three years. At the time the neurologist's letter was written, in January 2013, Ms. Kelly was walking with a cane and suffering from frequent falls; at the outset she did not even require a cane. She has understandably been under stress and has lost around one hundred pounds. On her most recent court appearances, Ms. Kelly has been using a walker. Her counsel said that if her current medication fails to deal with her numbness, Ms. Kelly will become wheelchair-dependent. Ms. Kelly also provided a list of medications she takes for the multiple sclerosis, diabetes, arthritis, blood pressure and stomach problems. She has a specially-trained dog that picks things up for her when she drops them and that is trained generally to help in her care, such as when she falls. She described him as a "godsend".
Financial Circumstances
8Ms. Kelly and her husband sold their home about a year ago. I was told that after paying off their mortgage and line of credit, about $40-$50,000 would have been left and I was given a list of expenses, including legal fees, that whittled that amount down. I was told that Ms. Kelly's current family income is about $1500/month and their rent is $1100. She says she can pay $100 per month in restitution in addition to $100 per month that she will pay to the person who lent her $10,000 for up-front restitution in a lump-sum.
Motivation for the Fraud
9Ms. Kelly told the author of the pre-sentence report that her husband was not working at the time of the offences and they were living beyond their means; she says she took the money with the intention of ultimately paying it back. I note that the alleged time frame also begins about six months after she began to be treated for MS, but there was no clear suggestion of any connection between the two events. I also note that there was no clear explanation of what the proceeds of the fraud were spent on, which struck me as a peculiar oversight since the amount would be so large, namely about $6,000 or $7,000 per month in additional tax-free income over 3½ years.
Sentencing Submissions
Crown's Position
10The Crown takes the position that Ms. Kelly's offences call for a sentence in the range of 3-4 years. That range, says the Crown, makes Ms. Kelly ineligible for a conditional sentence and even if she were in the conditional sentence range, the Crown submits that Court of Appeal authority suggests a conditional sentence would not be fit for offences of this nature. Ms. Kelly's significant health issues, the Crown says, may allow for some mitigation of sentence but do not earn her a conditional sentence.
11The Crown points out that the victim here was not some corporate behemoth that could easily weather the impacts of Ms. Kelly's frauds, whatever the amount. This was a non-profit daycare, dependent on government grants and subsidies. There were periods when the daycare could not afford to order supplies. The Home Depot and Staples helped out a bit by foregoing any claim they had against the day-care in relation to the roughly $15,000 of the fraud that affected them, but given the huge dollar value involved otherwise, the daycare only re-established a solid footing in 2013. There was a risk of it having to shut down. The daycare managed to keep their staff, but they had to forego raises or bonuses in order to keep the operation afloat. In addition, in the course of the fraud a lot of the daycare's required paperwork was not getting done so the daycare was placed on probation with the regulatory authorities for a while and great effort had to be expended on remedial measures.
12The Crown fairly observes that a fraud that ran for almost four years allowed plenty of time for Ms. Kelly to reflect on what she was doing. An offence of this nature, the Crown says, calls for a focus on the impact on the victim and on the need for general deterrence. While Ms. Kelly's lack of a criminal record is to her credit, the truth of the matter is that people who can commit these large internal frauds are typically people of previous apparent good character since known fraudsters are not likely to be given such positions of authority.
Defence Position
13Ms. Yorgiadis argues that there is no automatic disqualification for a conditional sentence even in relation to large-scale frauds. She fairly points out that Ms. Kelly has pleaded guilty, a factor that is not present in all of the authorities relied upon by the Crown. She notes that Ms. Kelly has borrowed $10,000 from a friend in order to be able to make some up-front restitution. She stresses Ms. Kelly's significant health challenges and has referred me to several cases that have dealt with similarly-situated defendants. She urges me to be creative in crafting a sentence, such as by imposing the maximum conditional sentence, but with house arrest for the entire two year period. Another alternative, she suggests might be a 60-90 day sentence of real jail, followed by a substantial conditional sentence.
Judicial Analysis
Case Law Review
14I have reviewed all of the authorities presented to me by the Crown and defence, but I do not believe that any purpose is served by canvasing all of them here. Some of them provided particular guidance even beyond their own facts, however, such as the Coulson 2008 ABPC 144 decision of the Alberta Provincial Court, which provides a substantial compilation of authorities from trial and appellate courts in several provinces with respect to the relevance of a defendant's major or terminal illness on the issue of sentence range and format. The Williams decision of Justice Hill in the Brampton Superior Court is both a characteristically thorough reference work on the guiding principles and, on its facts is perhaps closest to the present case with the exception of the issue of the defendant's illness.
General Principles on Sentencing for Breach of Trust Fraud
15However challenging their application on the facts of any given case, certain general propositions are easily stated. General deterrence and denunciation are pre-eminent sentencing considerations in the case of large, breach-of-trust frauds like this. Even in cases where there is no significant need for specific deterrence, as here where the defendant has effectively been broken and cast out as a result of her sins and is unlikely ever to be in a position to re-offend, the pre-eminence of general deterrence as a sentencing priority generally results in significant sentences of real jail for breach of trust fraud offences. The theory, at least, is that the type of person who is in a position to commit insider offences of this nature will generally be established and apparently upstanding and will have a great deal to lose, so public dissemination of the consequences of such offences will have a real deterrent impact. On the other hand, it has been held by courts well above me that a conditional sentence can have a deterrent effect, although its day-to-day impact on the offender will clearly not be as stark as a real custodial sentence. On the other hand, a conditional sentence is also not subject to any form of remission unlike a real jail sentence and the potential consequences of breach hang like a sword of Damocles over the defendant serving a conditional sentence.
Aggravating Factors
16There is a variety of what might be called aggravating factors in the present case, including:
a. The amount of the loss, here in the area of $300,000.
b. The degree of sophistication: this case did not involve filching from the till when nobody was watching. It involved a variety of mechanisms including the creation of false accounts.
c. The duration of the fraud: this was not one impulsive massive fraud, but rather a history of defalcations over several years involving numerous transactions.
d. Little or no likelihood of significant restitution here.
e. The impact of the fraud here was substantial: while there was no apparent health impact on anyone as in the Unrau, [2006] B.C.J. No. 1514 decision in British Columbia, this was a large fraud upon a non-profit organization that perhaps miraculously managed to stay afloat, albeit with financial and other consequences to its staff.
f. The position of trust occupied by the defendant: clearly here that degree of trust was substantial, as reflected in the duration of the frauds, their financial heft and the fact that the president of the board unwittingly took Ms. Kelly along to the auditor's meeting to learn about the fraud she herself had committed.
g. Was the defendant motivated purely by greed? This is a difficult question for me to answer on the material before me. I note the issue of the onset of the frauds in relation to the onset of Ms. Kelly's multiple sclerosis. The record before me, even after my urging, was not particularly helpful with respect to precisely (or even generally) what happened to a very substantial tax-free sum of money. Based on what I am told, however, there does not seem to be some pot of gold in light of Ms. Kelly's current financial situation.
h. Was the fraudster caught or did she end the fraud of her own impetus? Obviously, a person who is caught is more deserving of sanction than someone who has appreciated the error of her ways independently and either ceased the fraud or even reported herself. The positions taken by the Crown and defence here are opposed on this issue and on the record before me it is not possible for me to resolve that dispute one way or another.
Mitigating Factors
17There are also some mitigating factors present here:
a. First, there is the fact of the guilty plea. This has commonly been recognized as a significant element in mitigation, both where it is seen as a genuine sign of remorse and even to some extent where it reflects only a realistic recognition of the lay of the land which even in the absence of genuine remorse does save witnesses the stress of testifying and the state the expense of pursuing the case. In this case I am satisfied that Ms. Kelly is genuinely remorseful and that her plea has avoided the inconvenience and public expense of a significant preliminary inquiry and trial.
b. Ms. Kelly has taken upon herself the making of a $10,000 payment in up-front restitution. While this is a very small percentage of the total and while a cynic might wonder if, to some extent, she borrowed the money in order to be able to tick off one of the boxes on a sentencing judge's list, it is nonetheless an amount that will be available to the victim. One can only hope that the person who lent the money to Ms. Kelly continues to be repaid.
c. I am not sure if there was a mitigating motive here or not. Although the materials with respect to Ms. Kelly's medical condition were not the most comprehensive and this point was not pressed in argument, I note that she first saw the neurologist in mid-May and her alleged frauds begin about six months later. The first reported onset of symptoms was not much earlier than her 2007 visit to the neurologist.
d. In her fifties, Ms. Kelly is a first offender.
e. As a result of her offences, Ms. Kelly has been publicly shamed and has been dismissed from a job that is important to society, was apparently important to her and that for two decades she apparently performed with passion and commitment. I also note that her 23 years with Highview were only part of a 36 year career in early childhood education. While the nature and duration of her offences and their impact on an institution she seemingly cared for are odious, there is no other blemish on her character.
Determining the Appropriate Sentence Range
18The Crown asks for a sentence of three to four years. The defence asks for either a straight conditional sentence or a blended sentence of relatively short real jail and a fairly long conditional sentence. The blended sentence option is potentially available to Ms. Kelly as she has pleaded to multiple offences.
19The first question in determining a fit sentence is the proper length of the sentence. Obviously, if the proper sentence for Ms. Kelly's offences is two years or longer, she is not eligible for a conditional sentence. In this case, I think that the Crown's suggestion of a three to four year sentence for a first offender on a guilty plea, even for this amount and duration of fraud is on the high side. It often strikes me as helpful in assessing a sentencing position on a guilty plea to "do the math" and determine what that sentence would equate to if, hypothetically, there had been a finding of guilt after trial rather than a plea of guilty. Since a guilty plea is generally recognized as meriting a discount of about one-third (although the precise "discount" will vary depending on the precise circumstances), the Crown's submission is effectively that Ms. Kelly's offences, after trial, would have earned her a sentence in the 4½ to 6 year range. I do not believe that range of sentence is supported by the authorities relied upon or the authorities otherwise known to me, when one considers all of the circumstances, aggravating and mitigating and including Ms. Kelly's health condition, which the Crown fairly concedes is relevant (although I am not certain that that concession comes through in the Crown's arithmetic). Rather, it seems to me that on a guilty plea the appropriate range of sentence for an offender of Ms. Kelly's background and offences would properly be in the upper-reformatory to bottom to low end penitentiary range. A sentence in that range would have a significant general deterrent impact on the target group of potential offenders in cases of this type and would be appropriate for the dollar amounts involved.
20It is a recognized principle of sentencing that jail as a punishment should be used both only when necessary and to the extent necessary. In this case, I believe that a sentencing court dealing with a 56 year old first offender who has pleaded guilty ought to strive to maintain her in the reformatory range unless some compelling circumstance dictates otherwise. That being the case, Ms. Kelly strikes me as someone who is within the range of sentence that is eligible for a conditional sentence.
Eligibility for Conditional Sentence
21The other criteria for a defendant to be eligible for a conditional sentence are listed in s. 742(1) of the Criminal Code. First, the offence must not carry a minimum sentence, which is clearly not the case here. Second, the safety of the community must not be endangered by a conditional sentence. And, third, a conditional sentence must be consistent with the purposes of sentencing as set out in the Criminal Code.
22A determination of the safety of the community requires consideration of the likelihood of the specific defendant re-offending and the potential harm that would ensue if the defendant did re-offend. In this case, it seems to me that the likelihood of re-offending and the potential harm from re-offending are both very slight. A first offender in the latter half of her fifties, Ms. Kelly strikes me, in a variety of ways, as a broken woman. Her career, reputation and employability in tatters and she being in significant medical distress, I incline to think that she is unlikely to be either inclined or able to jeopardize other members of society or their financial interests in the future.
General Deterrence and Breach of Trust Fraud
23I think that it can fairly be said that in most circumstances the jurisprudence dictates that large breach of trust frauds will not be eligible for conditional sentences because a conditional sentence would fail to reflect sufficient general deterrence, which, as I have noted, is typically a premier objective of sentencing for such offences. This is an exacerbated breach of trust insofar as the victim was a non-profit organization funded by public funds from the city of Toronto and the province of Ontario.
Medical Condition as a Mitigating Factor
24Realistically, it is only Ms. Kelly's medical condition that could potentially make her eligible for a conditional sentence or a blended sentence under the fourth criterion for conditional sentences. The relevance of a defendant's medical condition in mitigation of sentence (either duration or format) is long-recognized, including by various courts of appeal in Canada. Much of the authority on this issue is synopsized by Justice Allen of the Provincial Court of Alberta in R. v. Coulson, 2008 ABPC 144, [2008] A.J. No 557. The words of the Manitoba Court of Appeal in R. v. R.(A.), (1994), 88 C.C.C. (3d) 184 are instructive. In that case the seventy-one year old defendant had been found guilty of having sexual intercourse with his thirteen year old daughter twenty years earlier. In light of the fact he was wheelchair bound and required constant attention by the time of sentencing, the Manitoba Court of Appeal imposed a suspended sentence with probation, commenting:
An accused's infirmity, always a factor to be considered, may warrant a reduction in a sentence that would otherwise have been imposed or a different type of sentence. It all depends on the nature and effect of the infirmity and the nature and seriousness of the crime. Compassion must neither be stifled nor allowed to take control. (Emphasis added).
25While those words might not have the resonance of Portia's "quality of mercy" speech in Shakespeare's The Merchant of Venice, Justice Twaddle comes close with the follow-up observation that"justice without clemency, in appropriate circumstances, is injustice."
26In the Christian faith, the prayer of St. Francis admonishes believers to have the courage to change what needs to be changed, the strength to accept that which cannot be changed and the wisdom to know the difference. It is often challenging when sentencing someone to accept that certain things are beyond one's control. As with Humpty-Dumpty, there is nothing I can do by way of sentencing Ms. Kelly that will make her victims whole, especially the daycare centre, which was a vulnerable and grievously injured victim of her behaviour. Given the nature and impact of Ms. Kelly's offences, one can readily understand the view that she should pay a penalty of real jail. It would be disingenuous to suggest that a conditional sentence is not, in many ways, far, far preferable to a defendant than real jail. On the other hand, Ms. Kelly's health imposes constraints on her that no gaoler or judge in a civilized society could ever lawfully impose and it would be equally disingenuous to suggest that sentencing Ms. Kelly to two years less a day in real jail would have the same impact as sentencing an able-bodied defendant to the same sentence. While the symptoms of MS will ebb and flow, it is nonetheless a progressive disease and one that does not react well to prolonged stress. Its impact on Ms. Kelly as of January of this year is significant. A full upper-end reformatory sentence, even with remission, would likely have a major impact on her health.
27The devil, of course, usually lies in the details. There are different types of offences and different degrees of infirmity. Repugnant as Ms. Kelly's long-term fraud against a small non-profit was, it does pale when contrasted with a father having sexual intercourse with his thirteen year old daughter. On the other hand, Ms. Kelly's multiple sclerosis does not appear to be of the same degree as the muscular dystrophy suffered by the defendant in R.(A.).
The Blended Sentence
28I have come to the conclusion that the most fitting balancing of competing principles, of a sentence that is deterrent and denunciatory without being cruel, is the option of a blended sentence that is open to me in these circumstances. Accordingly, the sentence I impose on Ms. Kelly is as follows:
a. Imprisonment
On the fraud charges in relation to The Home Depot and Staples, a sentence of ninety days imprisonment. In light of what I have been told about her medication schedule and about Ms. Kelly's current medical condition, she may serve that sentence intermittently.
b. Conditional Sentence
On the fraud against Highview Child Care Centre, a consecutive sentence of 639 days, to be served conditionally in the community, thus creating a total sentence of two years less a day. Ms. Kelly will also be placed on probation for three years after she completes the conditional sentence.
c. Conditions of Conditional Sentence
In addition to the statutory terms that must be in any conditional sentence, Ms. Kelly shall abide by the following terms:
i. House Arrest (First 18 Months)
For the first eighteen months of your conditional sentence, remain in your residence at all times other than:
For medical appointments or emergencies for you or your husband and for compassionate reasons such as hospital visits and funerals.
For employment or for the performance of community service.
Once per week, each Wednesday, between 10 a.m. and 2 p.m. for the purpose of taking care of errands and the necessities of life.
In order to comply with the terms of this or any other court order.
Any other reason authorized in writing by your conditional sentence supervisor, including any absences recommended by medical personnel for the purpose of maintaining or improving your health, such as exercise and any rehabilitative programmes.
All exceptions to the house arrest authorize travel directly to and from the location specified. Any absence from your home during house arrest for medical appointments, employment or community service work must be authorized by a written schedule from your supervisor. Any absences such as medical emergencies or compassionate absences must be reported to your supervisor within 48 hours of the absence.
ii. Electronic Supervision
You must comply with all of the terms of the Electronic Supervision Programme for the first eighteen months of the conditional sentence and must present yourself at your door within five minutes whenever the police or your supervisor attend to verify your compliance with the order.
iii. Identification and Verification
Whenever you are away from your home during the conditional sentence, you shall on demand present any police officer or supervisor with a copy of your conditional sentence order and shall demonstrate your entitlement to be away from your home at that time, including providing names, locations and contact details of your whereabouts while you were outside your home.
iv. Restitution Payment
You shall direct your counsel, within the next fourteen days, to pay directly to the Highview Wilson Childcare Centre the sum of $10,000 currently held by them in trust in partial payment of the amount defrauded by you. You shall provide proof of that payment to your supervisor not later than 30 August 2013.
v. Employment
Make reasonable efforts to seek and maintain employment.
vi. Community Service
Perform 240 hours of community service at a rate to be directed by your supervisor.
vii. Financial Reporting
Provide your supervisor with a monthly summary of all moneys received by you and your husband and of all of your expenditures. Sign releases authorizing your supervisor to release details of your financial situation to Highview Wilson Child Care Centre.
viii. Monthly Restitution
Pay $100 per month by way of restitution to the Highview Wilson Child Care Centre, unless your supervisor waives compliance with this condition due to your inability to pay in any given month(s).
ix. Medical Monitoring
Sign releases to allow your supervisor to monitor your compliance with any term of this order, including directions to any medical care providers to divulge your medical information.
d. Probation Order Terms
The terms of the probation order shall be as follows:
i. Residence
Live at an address approved of by your probation officer.
ii. Reporting
Report forthwith to your probation officer and thereafter as directed.
iii. Employment
Make reasonable efforts to seek and maintain employment.
iv. Community Service
Perform 240 hours of community service within the first eighteen months of your probation order at a rate to be directed by your probation officer.
v. Financial Reporting
Provide your probation officer with a monthly summary of all moneys received by you and your husband and of all of your expenditures. Sign releases authorizing your probation officer to release details of your financial situation to Highview Wilson Child Care Centre.
vi. Monthly Restitution
Pay a minimum of $100 per month by way of restitution to the Highview Wilson Child Care Centre, unless your probation officer waives compliance with this term due to your inability to pay in any given month(s).
vii. Medical Monitoring
Sign releases to allow your probation officer to monitor your compliance with any term of this order, including directions to any medical care providers to divulge your medical information.
Community Service and Flexibility
29In relation to the requirements of community service in the probation order and the conditional sentence order, I make the following observations. First, while I normally require that a minimum number of hours be performed each month, I am leaving that to the probation officer to reflect the fact that the ebb and flow of Ms. Kelly's condition will likely require such flexibility. I also recognize that Ms. Kelly's condition may make it impractical for her to perform some of the more common types of community service, but encourage her probation officer to strive to find appropriate means whereby Ms. Kelly can repay the substantial debt she owes society as a result of her fraud on a non-profit child care institution. The potential for Ms. Kelly to make that ongoing contribution is material in my determination that a blended sentence does not violate the principles of sentence in the Criminal Code, which is one of the requirements for a valid conditional sentence. It is also a reality that MS patients do sometimes enjoy periods of remission and I have crafted this sentence to ensure that, inasmuch as Ms. Kelly may in future be able to pay society back, justice requires that she be required to do so. While it is impossible to predict such things, there is the possibility that Ms. Kelly's position will improve somewhat once the stress and uncertainty of these sentencing proceedings are behind her; one does not have to be a neurologist to appreciate the link between stress and the aggravation of multiple sclerosis. Likewise, the employment requirement in the probation and conditional sentence orders reflects the possibility that she may in future be able to work at times and if she is able to do so, she should be required to do so in order to improve her ability to make restitution.
Restitution Order
30The issue of a stand-alone restitution order has been exhaustively canvassed by the Court of Appeal for Ontario recently in R. v. Castro, 2010 ONCA 718, [2010] O.J. No. 4573. It is clear that a restitution order ought not lightly to be made, but rather with restraint. At the same time, it is clear that a restitution order, especially in cases of breach of trust fraud, will be an important element of the total sanction insofar as it encourages responsibility on the part of the offender, responsibility being an important part of rehabilitation. A restitution order also ensures that a defendant does not profit from crime, which is a lingering concern in this case in which the proceeds of the fraud were vast but the explanation of the disposition of those proceeds is, to be kind, meagre. This is not even a case such as those referred to in Castro, at paragraph 34, of a defendant making a bald statement that the proceeds of the fraud are gone; to the contrary, this is a case where we lack even that bald assertion other than in relation to the net proceeds of the house sale, which were a tiny fraction of the fraud proceeds. The importance of allowing the victim, a non-profit organization, a reasonably convenient means of realizing on restitution is also great here. I am satisfied on the basis of the admissions before me that the making of a restitution order will not require complex calculation.
31With respect to the issue of the defendant's ability to pay, which is one of the many factors for consideration, it does not hold any superordinate status. Rather, in breach of trust cases like this, it is the interests of the victims that must take priority. The Castro court makes it clear that in egregious cases, and this is an egregious case, restitution can be ordered even where there is no likelihood of repayment. This is also a case involving what might be characterized as a vulnerable victim in the sense that the childcare centre clearly did not have deep pockets and was mightily affected by Ms. Kelly's breach of trust.
32Finally, the restitution must be considered as a component of an overall fit sentence. In this case, I have sought to fashion a sentence that is fit and fair in light of all the circumstances for and against Ms. Kelly, including her health. But it would be fraudulent on my part to deny that Ms. Kelly benefits, rightly enough, from a full measure of compassion for her current plight. Against that backdrop, it strikes me as entirely fair that she be faced with a stand-alone restitution order, one that will survive any bankruptcy but does not require ongoing payments other than the flexible monthly amounts during the conditional sentence and probation period. Those monthly payments take into account Ms. Kelly's ability to pay as specifically represented by her counsel and the probation officer's discretion (and the court's power to vary the terms) make allowance for counsel's predictions being overly optimistic in light of Ms. Kelly's limited present income. The stand-alone order carries no consequence to Ms. Kelly if she is unable to pay the full amount, but provides a vital protection for her victims in the event that her financial situation should change.
33Accordingly, in addition to the monthly payments required under the probation order and conditional sentence order, I impose a stand-alone restitution order in the following amounts:
a. $280,000 in favour of Highview Wilson Childcare Centre (less any monthly payments made under the terms of the conditional sentence or probation order). This $280,000 is in addition to the $10,000 up-front payment referred to earlier.
b. $5,304.59 in favour of The Home Depot Canada.
c. $9,797.78 in favour of Staples.
Victim Fine Surcharge
34The victim fine surcharge, which would amount to $300, will be waived in light of Ms. Kelly's straitened financial circumstances. It is appropriate that her limited resources be devoted to the payment of restitution.
Released: 31 July 2013
