His Majesty the King v. Etienne Gadbois

DATE: 2024 04 04 ONTARIO COURT OF JUSTICE

BETWEEN:

HIS MAJESTY THE KING

— AND —

ETIENNE GADBOIS

Before: Justice Michael Waby Reasons for Sentence 4th April, 2024

Counsel: M. Schwarz, for the Crown B. Irvine, Amicus Curiae

Introduction

1Etienne Gadbois plead guilty before me on 30th March, 2023 to the following four offences. Two counts of Fraud over $5000.00 contrary to s. 380 (1) (a) of the Criminal Code, one count of Criminal Breach of Trust, contrary to s. 336 of the Criminal Code and one count of Obstructing Justice, contrary to s. 139(2) of the Criminal Code. The offences occurred in respect of two different complainants and took place when the Accused was, or was representing himself to be, a properly licenced and practising lawyer.

Factual Background

First Set of Allegations (Fraud Over and Attempt Obstruct Justice)

2At the time of these allegations, Mr. GADBOIS was a lawyer specializing in tax litigation and resided in Brossard, Quebec. He advertised offices in Quebec and Ontario under the company name "Gadbois Commodity Tax Law".

3An agreed statement of facts was prepared and filed as an exhibit on consent of all parties with respect to the factual basis of the guilty pleas being entered. Between the dates of January 10, 2018 and April 26, 2019, Mr. GADBOIS was retained to represent the interests of Marc GAGNON and the business W.R. Mc RAE in relation to a $2,122,454.45 tobacco tax assessment made by the Ontario Ministry of Finance.

4Mr. GADBOIS was to provide legal advice and follow the instructions of his client regarding the preliminary assessment issued by the Ministry pursuant to the Tobacco Tax Act. Mr. GAGNON paid Mr. GADBOIS $30,869 based upon invoices from February 2018 to April 2018 (while Mr. GADBOIS was employed by Denton’s Law Firm) and $75,422 based upon invoices from April 2018 to September 2018 (while Mr. GADBOIS was self-employed) for his legal services. Mr. GAGNON believed that by paying this money, the services that he had been invoiced for were being performed and that Mr. GADBOIS was actively pursuing his interests through ongoing litigation.

5During the time that Mr. GADBOIS was retained by Mr. GAGNON, he failed to provide the services that he had billed for or that his client agreed to. There were multiple acts of alleged misconduct noted by Mr. GAGNON that collectively established “deceit”, “falsehood” and “other fraudulent means”. These include forging court decisions, not being properly licensed to practice in this field of law in Ontario, forwarding forged emails purportedly from the Ministry of Finance on October 31, 2018 and November 16, 2019, failing to share payment options with his client while accepting one option on their behalf, and intentionally going against clear instructions from his client not to pay towards the assessment by writing cheques from his own account in an effort to “buy time”.

6On February 14, 2019, Mr. GADBOIS emailed Mr. GAGNON to provide an update to him regarding the ongoing litigation with the Ministry of Finance. Attached to this email was a copy of a court decision purportedly rendered by Justice COATS of the Ontario Superior Court of Justice.

7It was established that this decision was false and while Justice COATS is a judge of the Superior Court, she did not sit on the specified date and could not have rendered the decision. The identity information, including name and occupation of Justice COATS was used fraudulently to add a perception of validity to the false document and perpetuate the ongoing fraud.

8Furthermore, on March 13, 2019, Mr. GADBOIS emailed Mr. GAGNON to provide him with an update regarding the ongoing litigation with the Ministry of Finance. Attached to this email was a copy of a court decision purportedly rendered by Justices BENOTTO, HUSCROFT and DOHERTY of the Ontario Court of Appeal.

9It was established that this decision was false and while all the named judges preside over the Ontario Court of Appeal, they did not sit together on the specified date and could not have rendered the decision. The identity information, including name and occupation of Justices BENOTTO, HUSCROFT, and DOHERTY were used fraudulently to add a perception of validity to the false document and perpetuate the ongoing fraud.

10Eventually, Mr. GAGNON began to question the information he was receiving from Mr. GADBOIS. He retained the services of another lawyer who determined that his legal situation had not progressed in any substantive way under Mr. GADBOIS’ direction.

11In total, Mr. GAGNON and the business W.R. Mc RAE paid $106,291 for Mr. GADBOIS' legal services. Mr. GADBOIS had the sole control and possession of these funds and acted alone in representing this client. This amount of money was not recovered and is not available for restitution.

12Following a police investigation into Mr. GADBOIS’ conduct, he was arrested on October 7, 2019. He was released on a Promise to Appear and Undertaking.

Second set of allegations (Fraud over and Breach of Trust)

13On June 13, 2019, Mr. GADBOIS faced disciplinary proceedings and resigned from the Quebec Bar. On July 22, 2019, just over one month from his resignation as a lawyer and while on bail for fraud charges, Mr. GADBOIS represented himself as a lawyer for the purpose of being retained as counsel for the Ontario company Loudon Bros. Ltd. This company was represented by Mr. Brian BIRNIE.

14Mr. GADBOIS was retained for the purpose of providing legal services to the company after it had been assessed to owe over $900,000 in Ontario taxes. Mr. GADBOIS was retained through a formal Engagement Letter that he prepared. This letter was written on the letterhead of “Gadbois Commodity Tax Law” and clearly stated that he was being engaged for the purpose of providing “legal services” at a cost of $700 per hour and that he was a “Lexpert Ranked Lawyer”. Due to the representations made to Mr. BIRNIE in writing and otherwise by the Accused, Mr. BIRNIE believed that Mr. GADBOIS was a licenced lawyer.

15Once Mr. GADBOIS was retained as counsel, on July 31, 2019, Mr. BIRNIE wired Mr. GADBOIS a retainer of $25,000 to be held in trust. It was clearly stated in the engagement letter that this amount of money would be returned to Mr. BIRNIE if not used towards payment of invoices at the conclusion of business. During the period of July 22, 2019 to December 18, 2019, Mr. GADBOIS continued to represent himself as a lawyer acting in the best interest of his client, Loudon Bros. Ltd. At no time did Mr. GADBOIS inform Mr. BIRNIE or any other employee of the company that he was not actually entitled to practise as a lawyer.

16On August 8, 2019, Mr. GADBOIS sent Mr. BIRNIE a services invoice for $35,361.35. Mr. BIRNIE paid this invoice via wire transfer on September 6, 2019 to an account provided by Mr. GADBOIS. On October 28, 2019, Mr. GADBOIS advised Mr. BIRNIE that he was close to negotiating a settlement of Loudon’s tax dispute with the Ontario Ministry of Finance in the amount of $100,000 to $200,000. Mr. GADBOIS asked Mr. BIRNIE if he would be willing to accept such an amount and if he was in a position to transfer the money to him in order to demonstrate possession of the required funds to pay such a settlement. Mr. BIRNIE replied in the affirmative.

17On October 29, 2019, Mr. GADBOIS instructed Mr. BIRNIE to transfer $200,000 to be held in trust in the account that he had earlier provided. The sole purpose of receiving this money was to demonstrate that the requisite funds existed to settle the dispute. Mr. BIRNIE paid Mr. GADBOIS $200,000 via wire transfer on November 8, 2019. Mr. GADBOIS clearly stated via email what this money was for, and that it was to be held in trust and only used as per Mr. BIRNIE’s direction.

18On December 18, 2019, Mr. GADBOIS cancelled a meeting with Mr. BIRNIE, who began to question Mr. GADBOIS’ unreliability. Mr. BIRNIE had also been provided a copy of an OPP media release from a third party that detailed Mr. GADBOIS’ arrest on his outstanding charges. As a result, Mr. BIRNIE went to the police.

19Through police investigation it was determined that Mr. GADBOIS never had contact with the Ministry of Finance in relation to Loudon Bros. Ltd or Mr. BIRNIE. As such, no settlement was ever negotiated and the money transferred to Mr. GADBOIS by Mr. BIRNIE was predicated entirely on fraud. At no time during their interaction was Mr. GADBOIS entitled to practise as a lawyer nor was he permitted to operate a lawyer's trust account. In his dealings with Mr. BIRNIE on behalf of Loudon Bros. Ltd., Mr. GADBOIS had sole possession and control of the funds he received. The total loss for this complainant was $260,631.35.

20On February 10, 2020, Mr. GADBOIS surrendered himself into police custody. He was arrested, given his rights to counsel, and held pending a show cause hearing. He was released that same day on a global bail that included a condition that, without prejudice, he repay Mr. BIRNIE $200,000 within 30 days of his release. This bail condition was fulfilled and the current amount owing to Mr. BIRNIE and LOUDON Bros Ltd. is $60,631.35. This amount of money was not recovered and is not available for restitution.

21The total amount of unrecovered loss in respect of all four counts as a result of Mr. Gadbois’ actions is $166,922.35. This total amount is not available for restitution.

Position of the Parties

22Ms Schwartz, for the Crown, seeks a jail sentence of 2 years less one day in addition to a period of 2 years probation. The Crown also seeks a prohibition order pursuant to s. 380.2 (1) of the Criminal Code and a fine in lieu of forfeiture pursuant to s. 462.37(3) of the Criminal Code. The Crown submits that such a serious breach of trust on the part of the Accused requires an upper-reformatory jail sentence and that the principles of sentencing applicable would not be satisfied by a conditional sentence. The Crown has provided a number of cases for my consideration, including R v Scholz, 2021 ONSC 3790, R v McLellan, 2012 ONCA 5028, R v Castro, 2010 ONCA 718 and R v Booker, 2021 ONSC 6853. I have reviewed and considered these authorities.

23Mr. Irvine as Amicus acknowledges the seriousness of the actions on the part of Mr. Gadbois and the accompanying breach of trust but submits that a Conditional Sentence Order of 2 years less a day is an appropriate sentence in this case and one consistent with the necessary sentencing principles. Amicus counsel does not take any issue with the period of probation nor the accompanying orders pursuant to the Criminal Code that the Crown seeks. Mr. Gadbois, on his own behalf also seeks to have the Court impose a Conditional Sentence Order and similarly takes no issue with the ancillary orders that the Crown seeks.

Victim Impact Statements

24Of the two victims, Mr. Birnie elected not to file a separate Victim Impact statement (VIS) and relied upon the contents of his police statement. His personal loss as a result of the actions of the Accused is $60,631.35.

25Mr. Gagnon provided a VIS and it was filed as an exhibit on these sentencing proceedings. In a short but compelling statement Mr. Gagnon described how the actions of Mr. Gadbois resulted in a profound emotional impact on him and his family and his business partners. Mr. Gagnon described his immeasurable stress and distress and references on a number of occasions the profound and irreparable damage that was done to his trust in the legal system as a result of Mr. Gadbois’s actions. Mr. Gagnon described the elaborate charade that the Accused engaged in to seek to perpetuate his fraud which included Mr. Gadbois lying about the death of his own children. It is clear that aside from the significant emotional impact that the Accused actions had they also resulted in considerable financial strain and loss too. Mr. Gagnon ends his VIS by submitting that in his view ‘justice in this case goes beyond mere restitution.”

Circumstances of the Accused, Etienne Gadbois

26Following guilty pleas being entered and findings of guilt being made in March of 2023 a pre-sentence report (PSR) was ordered by the Court. Mr. Gadbois has no prior criminal record. The PSR confirms that Mr. Gadbois has been married for 12 years and is a father of four children aged, 2,4,8 and 11.

27The report is comparatively brief and while it contains some helpful and relevant information it cannot in my view be described as fulsome. Indeed the impression it creates is that Mr. Gadbois chose to reveal only a partial and limited picture of himself, his circumstances and any reason for offending in the way he has.

28Mr. Gadbois is a well educated former lawyer who practiced with some distinction as a specialist in the field of tax law. He comes from a stable family background although his background appears to be strict and one in which his parents had high expectations of him and he of himself. He is not currently in touch with his family and there is some evidence to suggest that this is as a result of a dispute over finances in some form which is not relevant for the purposes of this sentencing.

29The report speaks to Mr. Gadbois being something of a workaholic, often at the expense of his family life and he appeared to maintain a hectic work schedule. This ultimately led to the Accused reporting a significant incident of psychological burnout through overwork in his mid-thirties (some 13 years ago) and the development of anxiety symptoms.

30The author of the PSR reports that his interview with Mr. Gadbois disclosed a juxtaposition of factors were relevant to note, these included “precarious mental health” although there is little additional information in respect of this particular issue provided beyond the 7 months of psychological therapy Mr. Gadois underwent in the summer of 2020 that he discontinued. The author also references gaps in the accused ability to regulate emotion, an inability to ask for help and limited problem-solving abilities. The author reports that Mr. Gadbois expressed remorse for his actions that appears to be sincere but largely focused on the consequences for himself rather than others and attributes his actions to a failure to set work-related boundaries because of his psychological burnout. Mr. Gadbois noted that ‘ in hindsight ” his action were inappropriate.

31The author reports that Mr. Gadbois places an inordinate amount of importance on the image that he projects to others and constantly seeks social recognition owing to low self esteem. The PSR correctly identified the aggravating feature of Mr. Gadbois continuing to hold himself out as a lawyer following his disbarment from the Quebec Bar and committing further offences while on bail. The author notes that any changes made in Mr. Gadbois’ behaviour since the offences appear superficial and require further ‘personal investment.’

32The author is also not able to provide any meaningful information on Mr. Gadbois financial circumstances based on the negligible information he was provided with by the Accused. At the time of the PSR in May 2023 Mr. Gadbois had not advised his wife of the criminal charges he was facing, although I note he has subsequently advised the Court that she is now aware of them. The PSR advises that Mr. Gadbois prefers to project a positive image of himself to others rather than facing the reality of his circumstances.

33The PSR assesses Mr. Gadbois as being at a risk of recidivism, albeit at the low end and recommend significant mental health support as part of any sentence and with a view to his own rehabilitation and to reduce the risk of reoffending.

Psychological Report

34In addition to the PSR that was made available to the court, Mr. Gadbois made a number of references on several appearances following his guilty pleas to psychological reports that the wished to put before the court as part of his sentencing process. Following a significant number of appearances and the disclosure that the reports were in French and required translation, Mr. Gadbois ultimately made available a single psychological report prepared by Isabelle Crouzet on 24th July, 2020. I am grateful to the Crown Ms Schwartz who made the necessary arrangements to translate this report for the Court and the Ministry of the Attorney General appropriately bore the costs of translation.

35This report was prepared after the commission of the offences that Mr. Gadbois has plead guilty to and pre-dates the guilty pleas and any meaningful contact with the Courts by him following his arrests and being charged. Mr. Gadbois has indicated to the court on a number of occasions that he has another psychological report that post-dates the commission of the offences that he would like to put before the court. Despite a number of opportunities being provided to Mr. Gadbois no other reports or materials have been forthcoming.

36The psychological report appears to have been generated with a view to shedding light on Mr. Gadbois’s psychological functioning at the time of the offences and was requested by one of his former lawyers. I confess that it is a rather curious document and even allowing for its translation from French to English, it appears to be peppered with numerous random and curious observations on the part of the author in addition to the more customary analysis and structure one would typically expect to see in such a report. At times the document almost appears to represent the working notes of a therapist rather than the report that would be prepared from such notes.

37The psychological report rehearses much of Mr. Gadbois’ early life and his family life although it predates the birth of his most recent child. It reinforces a sense of someone who seeks to maintain a veneer of success and of presenting himself as a ‘ strong’ person to everyone, including his own wife. As with the PSR there are no issues raised with respect to drug use by Mr. Gadbois nor prolonged or significant alcohol abuse on his part.

38This report references an apparent ‘ suicidal episode” on the part of Mr. Gadbois before his criminal actions became known. It appears that this amounted to Mr. Gadbois taking a photograph of 2 knives and sending this image to a friend who contacted the police. The report indicates that Mr. Gadois reports thinking about taking his life on a number of occasions since he faced criminal charges and the author indicates that “ the risk of suicide cannot be ruled out.” The psychological report speaks of Mr. Gadbois experiencing anxiety and depressed moods and an apparent inability to respond appropriately to situations such as the death his father or marital stress at the time of his offending.

39The author concludes that she is of the opinion that Mr. Gadbois was suffering from a major depressive disorder at the time of writing the report almost 4 years ago and that “ Mr. Gadbois would appear to he have several traits belonging to a number of personality disorders but not a personality disorder as such.” He is reported to lack close friends, be somewhat obsessive-compulsive and have an excessive devotion to work to the exclusion of all other things.

40The report notes that there is little palpable regret for the harm Mr. Gadbois has caused to his victims and his focus is principally on the consequences for himself and his family. The report also references Mr. Gadbois startling claim that he did not [adversely] effect the rights of his victims as they were able to carry on with their businesses.

41The report goes on to conclude that” the risk of recidivism in acquisitive offences remains low based upon the clinical impression and assessment that was conducted. Somewhat remarkably, the report concludes that “ after a thorough assessment, we can conclude that Mr. Gadbois does not fit the profile of a fraudster. This episode is to be understood as “a bump in the road” and the impact on his life has proved to be a sufficient deterrent for him not to offend. The report recommends counselling, at Mr. Gadbois’s own pace over “a fairly long period.”

42In addition to the submission of Amicus counsel Mr. Gadbois apologized to the Court for his actions and attributed them to a major mental breakdown. He made it clear that his offending was not attributable to any drug or alcohol issues and maintained that the was not motivated by any financial gain.

43Mr. Gadbois indicated he had recently told his wife about the extent of his offending behaviour and that the consequences for him had been ’terrible’. He advised that he has three business franchises offering tax advice and services that he isn’t personally responsible for delivering but that owing to the social media coverage of his charges he has no clients. Mr. Gadbois indicated that he is currently writing a dictionary on sales tax and speaking to a law faculty about potentially addressing students on how to manage mental health issues as a lawyer.

Additional Features

44These proceeding have not progressed expeditiously. Give the reality that Mr. Gadbois is essentially self-represented at these proceedings the Court has sought to extend him considerable latitude in terms of request he has made and to afford him every reasonable opportunity to obtain his own counsel and to provide to Amicus and the Court any materials he felt were relevant to his pleas and sentencing.

45I note that Mr. Gadbois has engaged with a number of counsel at various stages of these proceedings. Some he has retained and they have subsequently been removed from the record, some have not been retained at all. Some have apparently not ever been contacted by Mr. Gadbois despite his stated intention to do so.

46The significance of these proceedings and the jeopardy faced by Mr. Gadbois led to the Court making an order to appoint Amicus to assist both Mr. Gadbois and the Court while making it clear to Mr. Gadbois that it was still open to him to retain his own lawyer if he so wished. He has not done so. Contact and communication between Mr. Gadbois and Amicus has been very limited in nature and Mr. Gadbois does not appear to have meaningfully or substantially engaged with Amicus despite repeated exhortations by the court to do so.

47During the course of several recent appearances by Mr. Gadbois indicated to the Court that he was in the process of securing a loan for $150,000.00 to make substantial restitution towards the loss he has caused. This resulted in several further adjournments to provide Mr. Gadbois with the time he sought given the significance of the potential restitution he indicated he would be making.

48The information Mr. Gadbois provided to the court in respect of having identified and secured these funds and the source of them was inconsistent at best. After the Court had requested further verifiable information and degree of due diligence to be conducted with respect to the funds that Mr. Gadbois indicated he had secured, it became apparent that there were no monies available to provide restitution to the Victims in this matter. Mr. Gadbois was advised that if this situation changed the Court would consider any appropriate and verifiable information he wished to present. As of the date of sentencing this situation has not changed and no funds are available for restitution towards the remaining loss of $166,922.35.

Sentencing Principles to be Applied

49The determination of a proper sentence in this case calls for consideration and balancing of the principles of sentencing which are set out in s. 718 to 718.2 of the Criminal Code as well as the aggravating and mitigation factors which exist. Under s. 718 of the Criminal Code, the fundamental purpose of sentencing is to contribute to respect for the law and the maintenance of a just, peaceful and safe society by imposing a just sanction. Any sanction imposed must be the result of a fair and balanced consideration of the need to:

i. Denounce the unlawful conduct; ii. Deter the offender, and others, from committing such an offence; iii. Separate the offender from society, where necessary; iv. Assist in the rehabilitation of the offender; v. Provide reparation for harm done to "victims", or the community; and vi. Provide a sense of responsibility in the offender, while acknowledging the harm done to the victims and the community.

Section 718.1 of the Criminal Code requires the sentence to be proportionate to the offence and the degree of the offender's responsibility.

50A sentencing judge must also have regard for s. 718.2, which provides in s. 718.2(a)(i) that a sentence should be increased or decreased to account for any aggravating and mitigating circumstances. Section 718.2(a)(iii) provides where the accused abused a position of trust in relation to the victim, it is deemed to be an aggravating circumstance.

51Further, a sentence should be similar to other sentences imposed on similar offenders in similar circumstances (s. 718.2 (b)); the combined duration of consecutive sentences should not be unduly long (718.2(c)); an offender should not be deprived of liberty if less restrictive sanctions may be appropriate (s. 718(d)); and all available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders, with particular attention to the circumstances of Aboriginal offenders (s. 718.2 (e). Mr. Gadbois does not identify as Indigenous and the relevant principles of 718.2 (e) do not apply in this case.

52As articulated by West J in R v Booker, 2021 ONSC 6853 “It should be emphasized that these sentencing principles do not include a principle of revenge. Offenders are not incarcerated for the purpose of establishing an equivalence between the loss of the victims and the sanction imposed by the Court. Rather, the Court is required to recognize the inherent worth and dignity of the offender and, having balanced the principles provided by the Criminal Code, determine a fit sentence in the circumstances of the case”.

53The principle of parity under s. 718.2(b), which states a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances is an important and laudable objective but it is important to note that no two cases are exactly alike, and as emphasized by Chief Justice Lamer in R. v. M. (C.A.), [1996] 1 S.C.R. 500, at paragraph 92:

“Sentencing is an individualized process, and the search for a single appropriate sentence for a similar offender and a similar crime will frequently be a fruitless exercise or academic abstraction”

54Consequently, a proportionate sentence in each case, in large measure, is determined by the specific and unique facts and circumstances surrounding the offender and the commission of the offence. Although precedents involving similar cases can provide guidance in determining a proportionate sentence they should not dominate the sentencing process. In R. v. Rawn, 2012 ONCA 487, [2012] O.J. No. 3096 (C.A.), at paras. 29 and 30, the Ontario Court of Appeal cautioned that: It goes without saying that a fit sentence must be ascertained on an individual basis.” It is therefore inappropriate to allow the parity principle, a principle that, by definition considers another sentence imposed on another offender, to dominate the determination of a fit sentence.”

55This case involves a sustained and serious breach of trust in respect of two clients that amounts to a fraud in excess of $366,000. It is a significant fraud both in terms of its total amount and its surrounding circumstances. Mr. Gadbois’ actions were carried out over an extensive period of time, involved considerable planning, execution and sustained effort and it has had a very significant consequence and impact on the victims.

56The fraud against Mr. Gagnon was perpetrated by an individual who was licensed by the Law Society to perform services in respect of the administration of justice and the Courts. Upon being suspended by the Quebec Law Society, and while on bail for his earlier offences, Mr. Gadbois then perpetuated this further fraud in respect of Mr. Birnie and did so while falsely maintaining that he was entitled to offer legal advice and expertise as a practising lawyer. This significantly aggravates the already serious breach of trust on the part of Mr. Gadbois in respect of his earlier fraud and is compounded by being on bail for the earlier offence at the time of doing so.

57In R. v. McEachern (1978), 42 C.C.C. (2d) 189 (Ont. C.A.), Howland C.J.O. stated at p. 191, that "the most important principle in sentencing a person who holds a position of trust is that of general deterrence."

58The offences committed by Mr. Gadbois not only had a profound impact upon his clients who were his victims but inevitably also have a profound and significant impact upon the broader community and the reputation of the justice system. In R v Gross, [2000] O.J. 3479 (S.C.) paras 16-18 the court unsurprisingly noted that public confidence is eroded where, as here, a lawyer breaches the trust that he owes his [or her] clients and to his [ or her] community.

59In R v McLellan, 2012 ONCA 5028 the Court of appeal made it clear that the primary sentencing principle at play in cases where lawyers commit a fraudulent breach of trust within the context of their professional capacities are those of general deterrence and denunciation or the repudiation of the conduct for which the offender was found guilty. The secondary considerations are specific deterrence, rehabilitation and any mitigating circumstances such as a plea of guilty R v Scherer (1984), 16 C.C.C. (3d) 30 (Ont C.A.) at p. 34.

60As noted in the underlying facts in support of the guilty pleas, Mr. Gadbois generated fraudulent court decisions in the name of jurists of the Superior Court and Court of Appeal to further his fraudulent endeavours. These included Doherty J.A who articulated in R v Rosenfeld, 2009 ONCA 307, 94 O.R. (3d) 641 at para. 40 why an offender’s status as a lawyer is a significant aggravating factor:

“[A]part from the specifics of the offences committed by the appellant, those privileged to practise law take on a public trust in exchange for that privilege and the many advantages that come with it. Lawyers are duty bound to protect the administration of justice and enhance its reputation within their community. Criminal activity by lawyers in the course of performing functions associated with the practice of law in its broadest sense, has exactly the opposite effect. Lawyers like the appellant who choose to use their skills and abuse the privileges attached to service in the law not only discredit the vast majority of the profession, but also feed public cynicism of the profession. In the long run, that cynicism must undermine public confidence in the justice system” : see R. v. Oliver, [1977] 5 W.W.R. 344 (B.C.C.A.).

61In R. v. Bertram and Wood (1990), 40 O.A.C. 317, the Ontario Court of Appeal observed that most major frauds are committed - as this one was - by well-educated persons of previous good character. Thus the court held at p. 319, “The sentences in such cases are not really concerned with rehabilitation. Instead, they are concerned with general deterrence and with warning such persons that substantial penitentiary sentences will follow this type of crime, to say nothing of the serious disgrace to them and everyone connected with them and their probable financial ruin.

62Although deterrence and denunciation are the most significant sentencing principles in cases involving a breach of trust contrary I recognize that those sentencing principles must not exclude a consideration of rehabilitation, particularly in the case of an offender, who will receive a first custodial sentence.

63I am also mindful of the principle of restraint reflected in R. v. Batisse, 2009 ONCA 114, [2009] O.J. No. 452, at paras. 32 to 34, where the Ontario Court of Appeal held: ...the appellant was a first offender. As such, the restraint principle requires that a sentencing judge consider all sanctions apart from incarceration and where, as here, incarceration must be imposed, the term should be as short as possible and tailored to the individual circumstances of the accused : see R. v. Priest (1996), 30 O.R. (3d) 538 (C.A.), at p. 545 ....the principle of restraint requires the sentencing judge to consider rehabilitation in determining the appropriate length of the sentence.

64Sentencing is a delicate balancing act of competing considerations to achieve a just disposition. The Supreme Court of Canada in R. v. Lacasse, 2015 SCC 64, [2015] S.C.J. No. 64 at para 12 explained: ...The more serious the crime and its consequences, or the greater the offender's degree of responsibility, the heavier the sentence will be. In other words, the severity of a sentence depends not only on the seriousness of the crime's consequences, but also on the moral blameworthiness of the offender.

Availability and Appropriateness of a Conditional Sentence

65Amicus counsel, in conjunction with Mr. Gadbois submits that the appropriate, proportionate sentence in this case was a two year less a day conditional sentence pursuant to s. 742.1 of the Criminal Code. While not extensively addressed, it is anticipated that Mr. Gadbois if such a sentence was imposed Mr. Gadbois would likely be subject to house arrest conditions for much if not the entire conditional sentence. The conditional sentence provisions in the Criminal Code have been amended on a number of occasions since they were first introduced in 1996. The legislation sets out specific offences and categories of offences that are not eligible for the imposition of a conditional sentence. There are prerequisites for the imposition of a conditional sentence as it relates to the offences Mr. Gadbois has been convicted of although the legislation has undergone recent reform and interpretation.

1. The safety of the community would not be endangered by the offender serving the sentence in the community (s. 742.1(a));
2. The offence is not an offence punishable by a minimum term of imprisonment (s. 742.1(b));
3. The offence is not an offence, prosecuted by way of indictment, for which the maximum term of imprisonment is 14 years or life (S. 742.1(c));
4. The court must impose a sentence of imprisonment that is less than two years (s. 742.1) and;
5. The sentence is consistent with the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2 (s. 742.1(a)).

66An offence of fraud over offence pursuant to s. 380(1) (a), proceeded by indictment, is no longer statutorily precluded from being eligible for a conditional sentence, although the Court of Appeal has made it very clear in subsequent cases that just because a conditional sentence is available for offences where the maximum penalty is 14 years, it does not mean a conditional sentence must be imposed. There are no minimum terms of imprisonment for the offences Mr. Gadbois has committed.

67I also accept that to the extent that ’safety’ of the community contemplates physical safety and the risk of physical harm, I have no information before me to suggest that Mr. Gadbois represents a risk of physical harm to the community. I do however consider that Mr. Gadbois is at least at a moderate risk of reoffending and that any such offending of a similar or related fraudulent nature would by definition cause harm to the individuals impacted and by extension to the community. While it would not be correct to claim that fraudulent behaviour of the kind committed by Mr. Gadbois does not cause harm, I accept that on my reading of the statue and the case law 742.1(a) appears to focus on the concept of the risk of physical harm or injury.

68In R. v. Gray, [2021] O.J. No. 626 (C.A.), at para. 44, the Court of Appeal held: The fact that a conditional sentence is available does not mean that one will necessarily be imposed. The sentencing judge is still required to conduct an individualized analysis, considering all the relevant principles of sentencing and weighing the appropriate factors to determine a fit sentence.

69In R. v. Proulx, 2000 SCC 5, [2000] 1 S.C.R. 61, at paras. 47 and 127 - #7, the Supreme Court directed that where the first number of pre-conditions of s. 742.1 are met, sentencing judges must give consideration to community based sentences.

70The only pre-condition remaining in the sentencing of Mr. Gadbois is whether a conditional sentence is consistent with the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2. At para. 22 of Proulx, the Supreme Court held a conditional sentence can be a "punitive sanction capable of achieving the objectives of deterrence and denunciation" for many offences, although there may be circumstances where the need for denunciation and deterrence is so pressing that a custodial sentence in "real" jail must be imposed. In para. 127, #8, the Court held:

“A conditional sentence can provide significant denunciation and deterrence. As a general matter, the more serious the offence, the longer and more onerous the conditional sentence should be. There may be some circumstances, however, where the need for denunciation or deterrence is so pressing that incarceration will be the only suitable way in which to express society's condemnation of the offender's conduct or to deter similar conduct in the future.”

Summary

71Restitution Order (fine in lieu of Forfeiture)

The Crown seeks a fine in lieu of forfeiture under s 462.37(3) of the Criminal Code of Canada.

Law

72462.37 (1) Subject to this section and sections 462.39 to 462.41, if an offender is convicted, or discharged under section 730, of a designated offence and the court imposing sentence on or discharging the offender, on application of the Attorney General, is satisfied, on a balance of probabilities, that any property is proceeds of crime obtained through the commission of the designated offence, the court shall order that the property be forfeited to His Majesty to be disposed of as the Attorney General directs or otherwise dealt with in accordance with the law.

73If a court is satisfied that an order of forfeiture under subsection (1) or (2.01) should be made in respect of any property of an offender but that the property or any part of or interest in the property cannot be made subject to an order, the court may, instead of ordering the property or any part of or interest in the property to be forfeited, order the offender to pay a fine in an amount equal to the value of the property or the part of or interest in the property. In particular, a court may order the offender to pay a fine if the property or any part of or interest in the property:

(a) cannot, on the exercise of due diligence, be located; (b) has been transferred to a third party; (c) is located outside Canada; (d) has been substantially diminished in value or rendered worthless; or (e) has been commingled with other property that cannot be divided without difficulty.

74It is common ground in the agreed statement of facts before the court that the remaining loss of $166,922.35 is not available for forfeiture. This sum was obtained by Mr. Gadbois as a result of a designated offence pursuant to s. 462.37 (1) of the Criminal Code. It clearly amounts to property obtained as a result of the proceeds of crime on the part of Mr. Gadbois.

75Mr. Gadbois has not been forthcoming with information about his finances and in my view they remain deliberately opaque. I appreciate that he has advised that court that his 3 tax franchises are not making him any money, however, the lack of any meaningful information provided in the PSR, to his psychologist or to the court about his financial circumstances or the whereabouts of the remaining fraudulently obtained funds is conspicuously absent.

76Section 738(1)(a) of the Criminal Code governs the making of restitution orders when money has been taken. It gives the court discretion to order the offender to make restitution by paying the victim "an amount not exceeding the replacement value of the property as of the date the order is imposed, less the value of any part of the property that is returned... where the amount is readily ascertainable". A conventional restitution order is not available as a meaningful option in this case.

77A restitution order forms part of a sentence and should not be made as a mechanical afterthought to a sentence of imprisonment: R. v. Siemens (1999), 136 C.C.C. (3d) 353 (Man. C.A.), at para. 10. Care must be taken not to simply add a restitution order to a sentence of imprisonment which, in itself, is a fit punishment for the crime, as this can amount to excessive punishment and offend the totality principle. I understand that the Crown is not seeking a restitution order in this case given the lack of ability to locate the monies following the exercise of due diligence. Accordingly the Crown seeks a fine in lieu of forfeiture. This is significant order as it carries with it the risk of a jail on a sliding scale commensurate with the amount of the fine.

78As articulated in R v Castro, 2010 ONCA 718, [2010] O.J. No. 4573 the starting point for any discussion of the objectives and factors that inform a judge's exercise of discretion in making a restitution order is the Supreme Court of Canada's decision in R. v. Zelensky, [1978] 2 S.C.R. 940. While the decision deals with predecessor legislation, the decision of Laskin C.J. nevertheless serves as a blueprint for the considerations to be taken into account in making a restitution order under s. 738(1). I also take them to be guiding principles to consider for the exercise of discretion under s. 432.67 (3).

79The purpose of a fine in lieu of forfeiture is to replace the proceeds of crime rather than to punish the offender. The use of the word "may" in subsec. (3) indicates that Parliament intended courts to have some discretion, but this discretion does not allow them to limit the amount of a fine in lieu to the profit made from a criminal activity. The discretion applies only to the decision whether or not to impose a fine and to the determination of the value of the property: R. c. Vallières, 2022 SCC 10.

80An order for a fine in lieu of forfeiture can be made only where the offender has possession or control of the property in question or at least had possession of the property at some point. This conclusion flows from the use of the phrase "any property of an offender" in subsec. (3) and the definition of "property" in s. 2 of the Criminal Code: R. v. Dwyer (2013), 2013 ONCA 34, 2013 CarswellOnt 600, 296 C.C.C. (3d) 193 (Ont. C.A.), additional reasons 2013 CarswellOnt 5767, 2013 ONCA 306.

81It is an error to decline to order a fine in lieu of forfeiture out of concern for the accused's rehabilitative prospects and his ability to satisfy restitution orders made against him: R. v. Angelis (2016), 2016 ONCA 675, 2016 CarswellOnt 14110, 340 C.C.C. (3d) 477 (Ont. C.A.), leave to appeal to S.C.C. refused (2017), [2016] S.C.C.A. No. 484.

82A restitution order is not intended to undermine the prospects for the rehabilitation of the offender. See e.g. R. v. Ali (1997), 98 B.C.A.C. 239; R. v. Biegus (1999), 141 C.C.C. (3d) 245 (Ont. C.A.), at paras. 15 and 22; and R. c. Ford (2002), 2 C.R. (6th) 348 (C.Q. crim. & pén.).

83No single factor is itself determinative of whether a compensation order should be granted and the weight to be given to individual considerations will depend on the circumstances of each case. Those circumstances include two considerations that were emphasized by the Court in R v Castro: the nature of the offence and, when money has been taken, what has happened to the money.

84Weiler J.A stated in R v Castro, “insofar as the nature of the offence is concerned, in cases involving breach of trust, the paramount consideration is the claims 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), 2002 BCCA 583, 169 C.C.C. (3d) 506 (B.C.C.A.), at paras. 12 and 17.

85S. 462.37(4) (a)(v) of the Criminal Code provides that where a court orders an offender to pay a fine pursuant to 462.37(3) the court shall impose, in default of payment of that fine, a term of imprisonment of not less that 2 years and not exceeding three years where the amount of the fine exceeds one hundred thousand dollars but does not exceed two hundred and fifty thousand dollars. As indicated the total outstanding loss in this case stands at $166,922.35.

86While the judge has a discretion whether or not to impose a fine and as to the determination of the value of the property, the fine must equal the value of the property. As indicated previously, the offender's ability to pay is not a factor reducing the amount of the fine and is not a factor to be considered in whether to impose a fine. However, the ability to pay may be taken into consideration in determining the time limit for payment of the fine: R. v. Lavigne, 2006 SCC 10, 2006 CarswellQue 2524, [2006] 1 S.C.R. 392, 206 C.C.C. (3d) 449.

87The loss occasioned by Mr. Gadbois is quantifiable with precision. His offending involved a very significant breach of trust in respect of two different clients whom he was representing, or purporting to represent as their lawyer. The surrounding circumstances of these offences were accompanied by further aggravating factors that are addressed elsewhere in this sentencing decision.

88The lack of information available about Mr. Gadbois’s finances does not detract from the unarguable reality that the has profited from his fraudulent actions to the sum of $166,922.35. Mr. Gadois is not to be enriched as a result of his offending.

89I am satisfied that it is appropriate to make the order under 462.37 (3) that the Crown seeks. I shall impose a fine in lieu of forfeiture of $166,922.35. I take account of the fact that the whereabouts of the balance of the monies Mr. Gadbois fraudulently obtained currently remains unknown. I am also mindful that while ability to pay this fine is not determinative of making this order that Mr. Gadbois’ ability to obtain gainful, lawful employment as a result of his offending will be challenging. Accordingly I factor that in to the time that I shall give to pay this fine. Mr. Gadbois will have 5 years from the date of this order to pay the fine.

Prohibition Order under 380.2(1)

90The Crown seeks an order pursuant to s. 380.2(1) of the Criminal Code prohibiting Mr. Gadbois from seeking, obtaining or continuing any employment or becoming or being a volunteer in any capacity that involves having authority over the real property, money or valuable security of another person.

91Mr. Irvine as Amicus and Mr. Gadbois himself do not oppose this order. Mr. Gadbois submits that although there is little business coming in to his 3 tax franchises he is not personally involved in exercising any control or authority over the money or property of others.

92I consider the following factors relevant in deciding whether to make the order that the Crown seeks. Despite being a first offender, Mr. Gadbois’s offending involved very significant breaches of trust and arose from a sustained and planned course of action on his part with respect to both clients. It only came to an end as a result of the suspicions of his clients and the action they took and not through any act on the part of Mr. Gadbois. The amount of the fraud separately and collectively as against both victims was significant. The impact on the victims was significant and Mr. Gadbois clearly took advantage of the regard that he was held in in the community and conspicuously failed to comply with the necessary professional standards that govern those who are privileged to have a license to practice law.

93I am satisfied that an order under 380.2(1) is appropriate and will make such an order for a period of 5 years.

Conclusion

94Mr. Gadbois comes before the court with no prior criminal history. He is a well educated individual and a husband and father of four young children. He has plead guilty to the offences for which I am sentencing him, and although they cannot be described by any stretch of the imagination as early guilty pleas, he receives appropriate credit for them. There is some evidence of remorse on his part although much of his attention is clearly centred upon the consequences of his actions for himself rather than for those effected by his offending.

95Despite considerable opportunity being given to Mr. Gadbois to fulfil his stated intention of making meaningful restitution no restitution has been forthcoming beyond that which formed part of a condition of his release following initial offending and where $200,000 was returned to his client and victim shortly after his initial arrest and presumably before those funds could dissipate.

96At the time of the offences there is some evidence to support that Mr. Gadbois was or had been suffering from some mental health issues related to anxiety or depression or burnout and there is some reference made to suicidal ideation on his part following his arrest and being charged. There is no clear or definitive diagnosis before the court. Mr. Gadbois indicated to the court that he believes he was suffering from a breakdown at the time of the offences. His pre-sentence report describes Mr. Gadbois as being at the low end of a risk of recidivism and the psychological report claims that Mr. Gadbois does not fit the profile of a fraudster and that his actions were “a bump in the road.”

97There is no suggestion that his offending was motivated by addiction and to the extent that any motive can be discerned for his offending it appears to lie in low self-esteem and a desire to artificially create an impression of success both professionally and financially to his family and peers.

98The offending for which Mr. Gadbois is to be sentenced is undoubtedly significant. The sums of money involved are substantial. The frauds amounted to over $366,000.00 of which only $200,000.00 was recovered. As outlined above, the offences involve profound and significant breaches of trust of his part. They were not spur of the moment acts, each was the product of deliberate and sustained deceit on his part.

99As far as the offences against Mr. Gagnon, Mr. Gadbois was a practising lawyer and Mr. Gagnon was his client at the time of the offences. Mr. Gadbois fabricated judgements purporting to be on behalf of both the Court of Appeal and the Superior Court of Justice which he knew were false and which were solely manufactured with a view to furthering the deception of his clients and of extending the timeframe within which he was able to perpetuate his deceit upon them.

100This initial serious breach of trust is then substantially compounded by the subsequent offences committed with respect to Mr. Birnie. Just over one month after ‘resigning’ from the Bar after facing disciplinary action in respect of his initial offending Mr. Gadbois ceased to be entitled to practise as a lawyer. Mr. Gadbois then embarked upon further fraudulent activity while holding himself out as a lawyer to Mr. Birnie.

101To further compound the seriousness of his conduct, Mr. Gadbois continued his fraudulent endeavours after he was criminally charged and released on an undertaking in October, 2019 and his offending only came to an end as a result of the efforts of his victims who having become suspicious took steps to investigate Mr. Gadbois further. It is important to note that Mr. Gadbois’s offending came to an end because of the efforts of others and not as a result of any actions on his part.

102Mr. Gadbois appears to have little meaningful insight into his offending behaviour and devotes most of his remorse and sympathy for himself. Throughout this lengthy sentencing phase, the information provided by Mr. Gadbois to the Court has been inconsistent, unreliable and variable. The partial picture that the court has of Mr. Gadbois the person, his offending and his financial circumstances is one he has deliberately presented. I am of a view that his lack of insight places his risk of reoffending more than at the low end of the scale and raises genuine concerns for his rehabilitation prospects.

103While I accept that some degree of stress or mental burnout may have been occurring in Mr. Gadbois’ life at the time of the offending, I have no information before me to suggest that there is any basis to conclude that this would cause him to act in the way he did. While Mr. Gadbois’s mental health challenges, such as they were, may have been a natural source of distress or concern to him, they did not justify nor explain his offending.

104I reject the contention of the psychologist Ms Crouzet that Mr. Gadbois does not fit the profile of a fraudster. For Ms Crouzet to seek to describe Mr. Gadbois’s actions as ‘a bump in the road” is both incredible and inaccurate. All of the information before me in this case amply supports the conclusion that Mr. Gadbois was a determined and committed fraudster whose motivation appears to have been driven by a desire to present an enhanced view of his material and professional success. Whether he will meaningfully address the causes of his behaviour is a matter for him and, in part, the sentence I shall impose will seek to assist him in that rehabilitation if he seeks it.

105I am firmly of the view that the primary sentencing principles of general deterrence, denunciation, and the public perception of justice are most appropriately addressed in this case by a sentence of incarceration and that the principles of sentencing in this case are not met by the imposition of a conditional sentence.

106It would in my view be unremarkable on the facts before me if Mr. Gadbois was facing a penitentiary sentence. However, I am mindful of the principle of totality and of the fine in lieu of forfeiture order that I have made in this case and its significant potential consequences to Mr. Gadbois if he does not comply. That order forms part of the totality of this sentence along with the accompanying order under 380.2 (1).

107In addition to these orders Mr. Gadbois is sentenced to a term of Imprisonment of 2 years less one day on each of the Fraud Over counts, to be served concurrently. There will be a sentence of 9 months on both the Breach of Trust and Obstruct Justice Counts to be served concurrently with the Fraud over sentences. For clarity the total term of imprisonment will be 2 years less one day.

108In addition to the this term of imprisonment there will also be a period of 2 years probation. I will discuss with counsel the appropriate conditions to impose as part of the probation order and any other remaining issues.