DATE: 20010122

DOCKET: C34407 (M26823)

COURT OF APPEAL FOR ONTARIO

LASKIN J.A. (in chambers)

BETWEEN:

HER MAJESTY THE QUEEN Applicant (Respondent on appeal)

–and–

RHEAL DALLAIRE Respondent (Appellant on appeal)

Erika Chozik, for the applicant/respondent Alan D. Gold and Maureen J. McGuire for the respondent/appellant

Heard: January 16, 2001

LASKIN J.A.:

[1] The respondent Rheal Dallaire was convicted of fraud and sentenced to three years in jail. He appealed his conviction to this court, and was granted bail pending his appeal. The Crown now applies to revoke Mr. Dallaire’s bail and for a hearing to determine whether his recognizance should be forfeited. The Crown contends that Mr. Dallaire breached an important condition of his bail: that he not engage in financial transactions other than personal financial transactions. Mr. Dallaire denies that he breached this condition. He also submits that the Crown’s application is procedurally flawed.

Background facts

[2] On March 30, 2000, Mr. Dallaire pleaded guilty to three counts of fraud in connection with several business transactions. He and the Crown agreed to make a joint submission for a three year sentence. However, he asked to adjourn his sentencing because his wife, Josée Quirion, was pregnant, her pregnancy was “high risk”, and he wanted to be with her when she gave birth. The trial judge refused the adjournment. On June 8, 2000, she accepted the joint submission and sentenced Mr. Dallaire to three years in a penitentiary.

[3] Mr. Dallaire appealed his conviction on the ground that no facts were read in or agreed to by him to support the guilty plea. I granted him bail pending his appeal. I concluded that, though difficult, the appeal was not frivolous. I also held that though he had a significant criminal record, the public interest did not require his detention. In so holding, I took into account his wife’s pregnancy.

[4] The bail order required Mr. Dallaire to enter into recognizance in the amount of $130,000, with a deposit of $20,000. Condition 12 of his bail ordered Mr. Dallaire: “not to engage in financial transactions other than personal financial transactions”.

[5] On September 27, 2000, with the consent of the Crown, Doherty J.A. extended Mr. Dallaire’s bail to January 31, 2001, and ordered his appeal perfected by October 20, 2000. Both sides seek to introduce fresh evidence on the appeal. Cross-examinations on the fresh evidence have nearly been completed and the appeal will likely be heard this spring.

[6] On January 4, 2001, Mr. Dallaire was charged with two counts of breach of recognizance. These charges have prompted the Crown’s application to revoke his bail. The Crown alleges that last August and September contrary to his bail order Mr. Dallaire engaged in two financial transactions that were not personal financial transactions. The Crown contends that Mr. Dallaire persuaded two acquaintances, Mr. Peter Kasouf and Ms. Heather Marshall, to invest in an online travel business, Gantic.com, owned by Mr. Dallaire’s wife, Ms. Quirion. Mr. Dallaire has denied that he contravened the conditions of his bail and the charges have not yet been heard. However, a justice of the peace in Ottawa refused Mr. Dallaire bail and he is presently in custody awaiting trial.

[7] The material before me shows that early last August, Mr. Dallaire and Mr. Kasouf discussed the possibility of Mr. Kasouf purchasing a Gantic.com franchise. On August 14th, Mr. Kasouf signed a letter of intent agreeing to pay $85,000 for the franchise. John Dempster, a lawyer and the president of Gantic.com, signed for the company although numerous changes in the letter itself were initialled by Mr. Dallaire. On August 25th, Mr. Kasouf gave Mr. Dallaire two cheques totalling $40,000. Mr. Dallaire endorsed one of the cheques for deposit. In the first week of September, Mr. Kasouf gave Mr. Dallaire a $15,000 cheque toward the purchase of the franchise. Later that month, Mr. Dallaire pressured Mr. Kasouf to come up with more money and gave him a piece of paper showing that he was $15,000 in arrears. However, by this time Mr. Kasouf had lost confidence in Mr. Dallaire and reported his dealings with him to the police.

[8] Mr. Dallaire also persuaded Ms. Marshall to invest in Gantic.com. She gave him $40,000 in exchange for 20,000 shares in the company. She claims never to have received the share certificates.

[9] Mr. Dallaire has submitted an affidavit in which he acknowledges that he dealt with Mr. Kasouf and Ms. Marshall and discussed their investments in Gantic.com. However, he claims that he did not believe that he had breached the conditions of his bail. In his words:

That at the time of my dealings with Peter Kasouf and Heather Marshall, I did not believe that I was engaging in financial transactions contrary to the conditions of my release. It was my belief that activities that would violate that condition would be in the nature of signing or negotiating cheques, doing company banking, or negotiating or entering into financing agreements.

He also claims that since his arrest, “I have come to recognize that the scope of the condition of my bail is much broader than I had previously believed.”

[10] I now turn to the issues on this application.

First issue: Should I revoke Mr. Dallaire’s bail?

[11] This court’s jurisdiction to revoke an appellant’s bail pending appeal is found in s.679(6) of the Criminal Code, which incorporates “with such modifications as the circumstances require”. Sections 525(5)(6) and (7) of the Code. Section 679(6) states:

The provisions of subsections 525(5), (6) and (7) apply with such modifications as the circumstances require in respect of a person who has been released from custody under subsection (5) of this section.

[12] The parties dispute the proper procedure under s.679(6). Mr. Gold submits that I have no jurisdiction to consider the Crown’s application to revoke his client’s bail. He contends that because s.679(6) incorporates s.525(5)-(7), I must first issue a warrant for Mr. Dallaire’s arrest and then set a date when he can show cause why he should not be detained in custody. Mr. Gold relies on this court’s decision in R. v. U. (F.J.) (1995), 1995 CanLII 510 (ON CA), 95 C.C.C. (3d) 408, where Goodman J.A. held that an appellant on bail pending appeal must be returned to custody before the court can consider an application to revoke his bail. He wrote at 411:

Section 525(5) does not, however, empower a judge to revoke a judicial interim release order pursuant to which an accused has been released from custody pending his trial. A fortiori, it does not empower a judge to revoke a judicial interim release order pursuant to which an appellant has been released from custody pending his appeal. At most, the judge, if satisfied, may issue a warrant for the arrest of an accused or appellant.

However, U. (F.J.) differs from this case. In U. (F.J.), the appellant was not in custody when the Crown sought to revoke his bail; Mr. Dallaire is in custody because a justice of the peace denied him bail on the breach of recognizance charges.

[13] The purpose of a warrant of arrest is to ensure that the appellant is before the court for a show cause hearing. Because Mr. Dallaire is in custody and is represented by counsel on the Crown’s revocation application, he is before the court for the purpose of this application. A further arrest warrant is unnecessary. Section 679(6) provides that s.525(5)-(7) applies: “with such modifications as the circumstances require.” In the circumstances of this case, I modify the applicable provisions of s.525 by dispensing with the need to issue an arrest warrant.

[14] My colleague, Feldman J.A., took the same view of s.679(6) of the Code in R. v. Currie (1999), 1999 CanLII 2810 (ON CA), 123 O.A.C. 201. She wrote:

Where there is judicial interim release pending appeal, the code sections are to apply “with such modifications as the circumstances require.” In my view where the appellant is already in custody, the procedure can be modified to obviate the need for a further warrant of arrest. The purpose of the warrant is to bring the appellant before the court for the show cause. That is accomplished if the appellant is already in custody and receives proper notice of the application as was the case here. On appeal, the appellant is not brought in person before the Court of Appeal. Rather the procedure is carried out in writing.

I agree with her reasons. See also R. v. Parsons (1997), 1997 CanLII 10870 (NL CA), 124 C.C.C. (3d) 92 (Nfld. C.A.). I therefore conclude that I have jurisdiction to hear the Crown’s application to revoke Mr. Dallaire’s bail. Moreover, in my view Mr. Dallaire’s bail should be revoked.

[15] Admittedly, Mr. Dallaire has not been tried on the breach of recognizance charges, and whether he is guilty of contravening the conditions of his bail is for the trial court to determine. On the material before me, however, there are reasonable grounds to believe that Mr. Dallaire did breach the condition of his bail that he not engage in financial transactions other than personal financial transactions.

[16] Mr. Dallaire’s explanation that he did not believe his dealings with Mr. Kasouf and Ms. Marshall violated that condition strains credulity. He persuaded them to invest; he solicited their funds; and he accepted their cheques. That he did not have signing authority on the company’s cheques or control the company’s bank account matters not. In substance, he appears to have been one of the principals of Gantic.com. He certainly represented as much to Mr. Kasouf and Ms. Marshall. Although he may not have done the paperwork, he orchestrated their investments in the company. In short, I have reason to believe that in his dealings with Mr. Kasouf and Ms. Marshall, Mr. Dallaire engaged in financial transactions that were not personal transactions, contrary to the conditions of his bail.

[17] I add to this conclusion the following considerations:

• One of the factors that led to his release – his wife was facing a high-risk pregnancy – is no longer applicable;
• His conviction appeal, though not frivolous, remains difficult; and
• He has a significant criminal record for fraud and theft, and he has two previous convictions for breach of recognizance.

These considerations, together with my conclusion that there are reasonable grounds to believe he breached condition 12, suggest that it is likely that Mr. Dallaire will commit further offences if he is not in custody. I conclude that the public interest requires his detention and I revoke his bail pending his appeal.

[18] Before leaving this issue, I return briefly to the procedure for revoking an appellant’s bail pending appeal under s.679(6) of the Code. In his excellent book, The Law of Bail in Canada, 2nd ed. (Toronto: Carswell, 1999), Professor Gary Trotter observes at p. 432 that: “the procedure proscribed by s. 679(6) is unsatisfactory.” In his view:

The procedure proscribed by this section is unsatisfactory in a number of ways. The practice respecting bail pending appeal in most courts of appeal is so vastly different from pre-trial bail practice that it is insufficient to legislate in this area by simply importing s. 525 into the appeal context with necessary modifications. It would be far better if the bail pending appeal provisions were amended to comprehensively codify a procedure to address this problem.

[19] Sensibly, Professor Trotter recommends that the procedure be revamped so that the Crown can apply on a written record before a single judge of the court of appeal to revoke an appellant’s bail. If the application is granted, then a warrant for the appellant’s arrest would be issued. He writes at p. 435:

Indeed, Parliament should make more sweeping changes to the revocation procedures in the appellate context in order to make it more feasible. Due to the fact that most applications respecting bail in appellate courts are conducted in the absence of the individual litigant, the necessity of requiring the person’s attendance in the court of appeal may not be essential. It would be more desirable in the appellate context if the procedure were structured in a different way. The Crown ought to be able to bring an application before a judge of a court of appeal, based on the type of written material that is customarily used in bail proceedings in the court of appeal, to have the individual’s bail revoked. If the judge is satisfied that this ought to be done, then a warrant should issue for the arrest of the accused person. This approach to the issue is consistent with the practice typical of the forum in which the procedure is invoked. Also, it is favourable to the individual’s liberty in that it is not necessary to have the individual arrested until after a determination is made that the prior release order should be revoked. This speaks to the need for legislative change. [Footnotes omitted.]

I agree with Professor Trotter’s comments.

Second issue: Should I issue a certificate of default and order a hearing to determine whether Mr. Dallaire’s recognizance should be forfeited?

[20] In addition to seeking the revocation of Mr. Dallaire’s bail, the Crown asks that I find Mr. Dallaire in default of his recognizance, that I issue a certificate of default and that I fix a time for a hearing to determine whether the recognizance should be forfeited.

[21] Under s.770 of the Code, once a judge determines that a person has failed to comply with a condition of the recognizance, the judge must issue a certificate of default. He or she has no discretion to do otherwise. In turn, the issuance of a certificate is a condition precedent to the holding of a hearing under s.771(1) of the Code.

[22] In my view, the Crown’s application for a certificate of default is premature. The breach of recognizance on which the Crown relies is the subject of separate charges under s.145 of the Code. As I have said, those charges have not yet come to trial. It is inappropriate to decide whether to issue a certificate until those charges have been dealt with by the trial court. If Mr. Dallaire is found guilty, a certificate can be issued; if he is acquitted, then presumably the Crown will abandon its application. Unlike the Crown’s application for revocation of Mr. Dallaire’s bail, no urgency surrounds the forfeiture proceedings. I think it far preferable that those proceedings await the outcome of the trial of Mr. Dallaire’s alleged breach of recognizance, a breach that he denies having committed. See The Law of Bail in Canada, supra, at p. 467.

Conclusion

[23] Mr. Dallaire’s bail pending his appeal is revoked. The Crown’s application for a certificate of default is dismissed without prejudice to the Crown’s right to renew the application once the breach of recognizance charges have been determined.

Released: JAN 22 2001 Signed: “John Laskin J.A.”

JIL