Court of Appeal for Ontario

Date: 2017-05-18 Docket: C59678 Judges: Gillese, Huscroft and Trotter JJ.A.

Between

Her Majesty the Queen Respondent

and

Harinarain Mathur Appellant

Counsel

Eva Taché-Green, for the appellant Erin Carley, for the respondent

Heard: May 5, 2017

On appeal from the sentence imposed by Justice Donald McLeod of the Ontario Court of Justice, dated September 24, 2014.

Trotter J.A.:

A. Introduction

[1] Mr. Mathur appeals from a 12-month prison sentence imposed on one count of fraud over $5,000, contrary to s. 380(1)(a) of the Criminal Code. At the conclusion of the hearing of the appeal, the appeal was dismissed with reasons to follow. These reasons explain why the appeal was dismissed.

B. The Offence and the Offender

[2] At the time of the offences, the appellant was an accountant, as well as a real estate agent and broker. Between December 31, 2009, and March 30, 2012, using the social insurance numbers and dates of birth of his real estate clients, and without their knowledge or consent, the appellant prepared 292 false tax returns. He created T4 slips from two fictitious companies. He generated small refunds on these tax returns. He received a total of $35,321 under this fraudulent scheme, although he attempted to obtain $343,840.

[3] The appellant was 65 years old at the time of sentencing. He had no prior criminal record. The appellant had the full support of his family. Many character reference letters were filed on his behalf. Before sentencing, the appellant took psychological counseling and gained some insight into his behaviour. Also, through his counsel, he offered to make restitution at the time of sentencing, but this did not happen. I will return to this issue below. The appellant has since lost his accreditations to work as an accountant and as a real estate agent/broker.

C. The Sentencing Judge's Reasons

[4] At the sentencing hearing, the Crown requested a 16 to 18-month jail sentence. The appellant requested a 12-month conditional sentence.

[5] The sentencing judge concluded that a conditional sentence was not appropriate in the circumstances of this case. He held that general deterrence is the most important factor in fraud cases involving breaches of trust, with rehabilitation assuming a secondary role. After listing numerous aggravating factors, some of which are discussed below, the sentencing judge imposed a sentence of 12 months' imprisonment.

D. Analysis

[6] In her factum, counsel for the appellant advanced a number of arguments why this court should intervene and impose a conditional sentence. At the hearing of the appeal, Ms. Taché-Green focused on the trial judge's failure to consider the appellant's offer to make restitution before being sentenced, and on the overall fitness of the sentence.

[7] The issue of restitution was raised with the sentencing judge, but in an abstruse manner. The appellant's trial counsel (not Ms. Taché-Green) said:

He's prepared to make restitution although restitution itself, it doesn't really – I don't think my friend is asking for as such. A fine under – that Your Honour imposes because this a fine under the revenue law of Canada, under s. 734(2) of the Criminal Code will go to the Receiver General of Canada, so essentially back into the federal coffers. And he has well over, well over $35,000 in trust for the – to ensure that the money is, is returned to the Canadian taxpayer. So he's prepared to do that and essentially that would be restitution that would be offered.

The Crown did not request restitution under s. 738 of the Criminal Code. No restitution order was made.

[8] Ms. Taché-Green advised that the appellant made unsuccessful efforts to pay restitution. Shortly after sentencing, the appellant went bankrupt. At the hearing of the appeal, the court was advised that funds may be available to pay restitution, but no attempt was made to enlarge the record by way of fresh evidence. The bottom line is that restitution has still not been made.

[9] Restitution advances important goals of sentencing, such as "provid[ing] reparations for harm done to victims or to the community" (Criminal Code, s. 718(e)), and promoting "a sense of responsibility in offenders, and acknowledgement of the harm done to victims or to the community" (s. 718(f)): see Allan Manson, The Law of Sentencing (Toronto: Irwin Law, 2001), at p. 139. Like a guilty plea, making restitution prior to sentencing is a clear acknowledgment of responsibility and an important step towards rehabilitation.

[10] The sentencing judge failed to mention the restitution offer in his reasons. I agree with the appellant that the failure to take this into account was an error in principle. As Tulloch J.A. said in R. v. McLellan, 2012 ONCA 717, 293 C.C.C. (3d) 326, leave to appeal refused, [2013] S.C.C.A No. 100, at para. 44: "An offender's ability and willingness to pay restitution is an important consideration in the sentencing of fraud and related offences". In R. v. Bogart (2002), 61 O.R. (3d) 75 (C.A.), leave to appeal refused, [2002] S.C.C.A. No. 398, Laskin J.A. recognized that the payment of full restitution before sentencing "might" be a "special" circumstance justifying a conditional sentence where a prison sentence is otherwise appropriate (para. 38).

[11] However, merely identifying an error on sentencing will not displace the customary deference afforded to sentencing judges; nor does it automatically warrant appellate intervention. As Wagner J. wrote in R. v. Lacasse, 2015 SCC 64, [2015] 3 S.C.R. 1089, at para. 44:

In my view, an error in principle, the failure to consider a relevant factor or the erroneous consideration of an aggravating or mitigating factor will justify appellate intervention only where it appears from the trial judge's decision that such an error had an impact on the sentence. [Emphasis added.]

See also R. v. Fraser, 2016 ONCA 745, 33 C.R. (7th) 205, at paras. 17-20.

[12] I am not persuaded that the sentencing judge's failure to mention or consider the appellant's offer of restitution had any impact on the sentence he imposed. In large fraud cases involving a breach of trust, a genuine offer to make full restitution, while important, must take a secondary role to the sentencing objectives of general deterrence and denunciation: see R. v. Bertram (1990), 40 O.A.C. 317, at para. 7; and R. v. Castro, 2010 ONCA 718, 102 O.R. (3d) 609, at paras. 30, 35.

[13] As an accountant involved in the preparation of tax returns, the appellant's actions constituted a breach of trust against the Government of Canada: see R. v. Leo-Mensah, 2010 ONCA 139, 101 O.R. (3d) 366, leave to appeal refused, [2010] S.C.C.A. No. 170, at para. 11; R. v. Dwyer, 2013 ONCA 34, 296 C.C.C. (3d) 193, at paras. 9-10; and R. v. Tennina, 2013 ONSC 4694, 108 W.C.B. (2d) 267, at para. 3. Moreover, the identity thefts from his real estate clients involved multiple breaches of trust: see R. v. Oton, 2012 ONSC 861, 99 W.C.B. (2d) 877, at para. 13.

[14] The sentencing judge characterized the offence as a large-scale fraud. This was evident from the amount that the appellant attempted to defraud the Government ($343,800), despite the smaller amount that he actually recovered ($35,321). I agree that this amounted to a large-scale fraud. However, irrespective of the adjective used to describe the level of the appellant's offending, given the presence of the many aggravating factors in this case, the sentencing judge was correct to emphasize general deterrence and denunciation. These factors included: (1) the degree of sophistication and planning involved; (2) the significant number of transactions (i.e., 292 tax returns); (3) the duration of the fraud (over 27 months); (4) the fraud was perpetrated on the Government of Canada; and (5) the appellant was caught, as opposed to voluntarily terminating his activities.

[15] In the circumstance of this case, even with an offer of restitution (which was ultimately not made), a conditional sentence would not achieve the goals of general deterrence and denunciation. The sentence imposed was fit.

E. Disposition

[16] I would grant leave to appeal, but dismiss the appeal.

Released: May 18, 2017

"GTT" "G.T. Trotter J.A."

"I agree Eileen E. Gillese J.A."

"I agree Grant Huscroft J.A."