Her Majesty the Queen v. Castro [Indexed as: R. v. Castro]

102 O.R. (3d) 609

2010 ONCA 718

Court of Appeal for Ontario,

Weiler, MacPherson and R.P. Armstrong JJ.A.

October 28, 2010

Criminal law -- Sentencing -- Restitution order -- Accused paralegal stealing proceeds of personal injury settlements from vulnerable clients -- Accused committing significant breach of trust and not making restitution -- Accused unemployed at sentencing and counsel asserting that stolen funds "gone" -- Trial judge sentencing accused to 23 months' incarceration followed by two years' probation and making stand-alone restitution order in amount of $141,752 -- Accused's appeal from restitution order dismissed -- Claims of victims paramount and rehabilitation of accused secondary consideration in cases of breach of trust -- Appropriate for trial judge to give no weight to unsupported contention that money "gone" when considering accused's ability to pay -- Appropriate to consider that accused only 49 years old and had future job prospects -- Restitution order possibly constituting only means of preserving victims' claims against accused as it would survive bankruptcy.

The accused was found guilty after a trial of six counts of theft, two counts of forgery and one count of fraud. While operating a paralegal firm specializing in assisting victims of motor vehicle accidents in reaching personal injury settlements with insurance companies, he deposited the settlement cheques in his trust account and then converted the money for his own use. There was no restitution. The accused had no criminal record. At the time of sentencing, the accused was unemployed and living on disability benefits of $900 a month. Defence counsel asserted that the money was stolen to pay for the accused's brother's drug habit. However, there was no evidence where the stolen money went after the accused withdrew it from the firm's bank account. The trial judge sentenced the accused to 23 months' incarceration followed by two years' probation, and made a stand-alone restitution order under s. 738(1) of the Criminal Code, R.S.C. 1985, c. C-46 in the amount of $141,752. The accused appealed the restitution order.

Held, the appeal should be dismissed.

While consideration of the offender's ability to pay and the impact of a restitution order on an offender's rehabilitation are factors to be considered, the weight to be given to those factors will vary depending on the nature of the offence and the circumstances of the offender. When the offence involves a breach of trust, a primary consideration is the effect on the victim; rehabilitation of the accused is a secondary consideration. Where the circumstances of the offence are particularly egregious, a restitution order may be made even where there does not appear to be any likelihood of repayment. Where money was taken, consideration of the ability to pay includes the ability to make payment from the money taken. The court is not obliged to accept an offender's bald assertion that he or she has no ability to make restitution because the money is gone when no evidence is proffered in support of that assertion.

The accused abused his position as a paralegal to engage in a breach of trust vis-à-vis vulnerable disabled persons. The trial judge considered the entirety of the sentence when making the restitution order. When considering the accused's ability to pay, he noted that the accused was only 49 years old and that he had [page610] some future prospects for employment. The trial judge was entitled to take into account the lack of evidence as to what happened to the stolen money in determining the accused's ability to pay. As a restitution order survives bankruptcy, the order might be the only means of preserving the victims' claims against the accused. The imposition of the restitution order was a proper exercise of the trial judge's discretion.

APPEAL by the accused from the restitution order of Belobaba J. of the Superior Court of Justice on August 19, 2008.

Cases referred to R. v. Ali, 1997 2655 (BC CA), [1997] B.C.J. No. 2516, 98 B.C.A.C. 239, 36 W.C.B. (2d) 265 (C.A.); R. v. Biegus, 1999 3815 (ON CA), [1999] O.J. No. 4963, 127 O.A.C. 239, 141 C.C.C. (3d) 245, 44 W.C.B. (2d) 477 (C.A.); R. v. Fitzgibbon, 1990 102 (SCC), [1990] 1 S.C.R. 1005, [1990] S.C.J. No. 45, 107 N.R. 281, J.E. 90-803, 40 O.A.C. 81, 78 C.B.R. (N.S.) 193, 55 C.C.C. (3d) 449, 76 C.R. (3d) 378, 10 W.C.B. (2d) 111; R. c. Ford, 2002 34585 (QC CQ), [2002] J.Q. no 4751, J.E. 2002-749, 2 C.R. (6th) 348 (C.Q. crim. & pén.); R. v. Scherer, 1984 3594 (ON CA), [1984] O.J. No. 156, 5 O.A.C. 297, 16 C.C.C. (3d) 30, 42 C.R. (3d) 376, 13 W.C.B. 68 (C.A.); R. v. Zelensky, 1978 8 (SCC), [1978] 2 S.C.R. 940, [1978] S.C.J. No. 48, 86 D.L.R. (3d) 179, 21 N.R. 372, [1978] 3 W.W.R. 693, 41 C.C.C. (2d) 97, 2 C.R. (3d) 107, 2 W.C.B. 320, consd Other cases referred to London Life Insurance Co. v. Zavitz, 1992 1503 (BC CA), [1992] B.C.J. No. 400, 11 B.C.A.C. 164, 65 B.C.L.R. (2d) 140, 5 C.P.C. (3d) 14, 12 C.R. (4th) 267, 32 A.C.W.S. (3d) 135, 15 W.C.B. (2d) 401 (C.A.); R. v. Carter, [1990] O.J. No. 3140, 9 C.C.L.S. 69 (Gen. Div.); R. v. Castro, [2008] O.J. No. 2110, 77 W.C.B. (2d) 703 (S.C.J.); R. v. Collalti, [2003] O.J. No. 5353 (S.C.J.); R. v. Devgan (1999), 1999 2412 (ON CA), 44 O.R. (3d) 161, [1999] O.J. No. 1825, 121 O.A.C. 265, 136 C.C.C. (3d) 238, 26 C.R. (5th) 307, 42 W.C.B. (2d) 444 (C.A.); R. v. Horne (1996), 1996 11971 (ON SC), 34 O.R. (3d) 142, [1996] O.J. No. 5380 (Gen. Div.); R. v. Hoyt, 1992 6006 (BC CA), [1992] B.C.J. No. 2315, 19 B.C.A.C. 231, 77 C.C.C. (3d) 289, 17 C.R. (4th) 338, 17 W.C.B. (2d) 493 (C.A.); R. v. McEachern, 1978 2506 (ON CA), [1978] O.J. No. 987, 42 C.C.C. (2d) 189, 7 C.R. (3d) S. 8, 2 W.C.B. 441 (C.A.); R. v. Moscone, [1985] B.C.J. No. 1755 (C.A.); R. v. Rizzetto, [2002] N.S.J. No. 489, 2002 NSCA 142, 210 N.S.R. (2d) 67, 55 W.C.B. (2d) 648; R. v. Salituro, 1990 10984 (ON CA), [1990] O.J. No. 805, 38 O.A.C. 241, 56 C.C.C. (3d) 350, 78 C.R. (3d) 68, 10 W.C.B. (2d) 241 (C.A.); R. v. Siemens, 1999 18651 (MB CA), [1999] M.J. No. 285, 138 Man. R. (2d) 90, 136 C.C.C. (3d) 353, 26 C.R. (5th) 302, 43 W.C.B. (2d) 85 (C.A.); R. v. Smith, 2004 33793 (ON CA), [2004] O.J. No. 4179, 191 O.A.C. 1, 63 W.C.B. (2d) 541 (C.A.); R. v. Williams, [2007] O.J. No. 1604, 2007 13949 (S.C.J.); R. v. Yates, [2002] B.C.J. No. 2415, 2002 BCCA 583, 174 B.C.A.C. 119, 169 C.C.C. (3d) 506, 8 C.R. (6th) 98, 55 W.C.B. (2d) 478 Statutes referred to Criminal Code, R.S.C. 1970, c. C-34, ss. 653, 655 Criminal Code, R.S.C. 1985, c. C-46, ss. 491.1 [as am.], 725, (1), 738 [as am.], (1) [as am.], (a) Authorities referred to Law Reform Commission of Canada, Working Paper 5: Restitution (Ottawa: Information Canada, 1974)

Anthony Moustacalis, for appellant. Joanne K. Stuart, for respondent. [page611]

The judgment of the court was delivered by

[1] WEILER J.A.: -- Should the order obliging the appellant, Carlos Castro, to make restitution in the amount of $141,752 to the victims of his thefts be upheld? For the reasons that follow, I would answer "yes" and dismiss this appeal.

Facts

1. Background

[2] The appellant was born in Peru on February 28, 1959 and immigrated to Canada in 1991. In 2000, he opened a paralegal firm with his brother, Manuel. The firm specialized in assisting victims of motor vehicle accidents in reaching personal injury settlements with insurance companies. The appellant's clients were new immigrants to Canada whose first language, like his, was Spanish. Many were unemployed and on social assistance or disability pensions.

[3] In April of 2001, the appellant began to steal from some of his clients. The appellant deposited the settlement cheques from the accidents in his trust account and then converted that money to his own use. The banking records show that he used the funds to buy money orders for an unknown purpose. When questioned by the clients as to where the money was, the appellant lied about not having reached a settlement or not having received the settlement cheque. In addition, the appellant was found guilty of forging the signature of one client, Ms. Blanca Benitez, on a release document that finalized a settlement agreement. He then used the document to defraud State Farm Insurance.

[4] Acting on complaints, the Financial Services Commission suspended the appellant's insurance licence in December 2004. By April 2005, the firm had stopped operating and was evicted by the landlord.

[5] Following a trial, the appellant was found guilty on May 27, 2008 of six counts of theft relating to the settlement money of six clients, two counts of forgery and one count of fraud [[2008] O.J. No. 2110, 77 W.C.B. (2d) 703 (S.C.J.)].

[6] In convicting the appellant, the trial judge reviewed the specific facts with respect to each complainant. With regard to Mr. Samuel Cristales, the victim from whom the appellant had stolen the most money ($90,000), the trial judge stated [at para. 25]:

Samuel Cristales, the last of the six complainants, retained the Castro firm in January, 2002. The firm negotiated a personal injury insurance [page612] settlement on his behalf in the amount of $125,000. The fees agreement provided that Mr. Cristales would receive $90,000. Manuel initially denied receiving the settlement cheque. However, when confronted by Mr. Cristales who had learned otherwise from the insurer, Manuel admitted that the cheque had been received. Unfortunately, explained Manuel, the firm was in a "difficult" situation. He asked if Mr. Cristales would accept $30,000 a month over three months. Initially agreeable, Mr. Cristales rejected the partial payment scheme and insisted that the full $90,000 be paid to him as agreed. Manuel became angry and said, "We have the money . . . if we want to give you some we will and if we don't, then we won't." When threatened with a law suit, Manuel responded, "We have the money in a place where no one can get at it."

[7] Mr. Cristales received nothing.

[8] The appellant was sentenced to 23 months' imprisonment plus two years' probation, and ordered to make restitution pursuant to s. 738(1) of the Criminal Code, R.S.C. 1985, c. C- 46. He has served the custodial portion of his sentence. The appellant seeks to have the restitution portion of his sentence set aside or to have the amount reduced.

[9] Manuel Castro, who had also been charged, was acquitted. He had no signing authority on the firm's bank accounts and the trial judge found he was not directly involved in the transfer or conversion of funds.

2. The submissions on sentence and the sentencing decision

[10] The Crown sought a penitentiary term of three to five years. In addition, the Crown sought a free-standing restitution order for the victims who were still owed money. At the sentencing hearing, the trial judge and the Crown engaged in a brief discussion about restitution and whether it could be ordered when it was highly unlikely that it would be paid. The Crown informed the trial judge that a restitution order survives bankruptcy and can be a free-standing obligation. However, recognizing that the appellant had a limited ability to pay, the Crown suggested that it would be inappropriate to have the restitution order attached to the appellant's probation order as this would set Mr. Carlos up for breach of probation. The Crown provided the trial judge with case law where restitution was ordered in addition to a sentence of incarceration.

[11] Defence counsel's primary position on sentence was that a conditional sentence of two years less a day, to be served in the community, was appropriate. Defence counsel acknowledged, "There hasn't been much restitution, but my client really hasn't had the ability to repay it having been deprived of his livelihood." Defence counsel submitted that although the appellant prevaricated and deceived his clients, he never really denied that he owed them money. The appellant signed documents with [page613] respect to some of the victims acknowledging that he owed them money and made small payments to others. He did not intend to steal the money on a permanent basis. Defence counsel stated that the appellant "was just in financial trouble and he took the money where it was easiest to take". He concluded his submissions on restitution as follows:

I agree with the case law perhaps here denunciation and general deterrence are more important than other factors here. Specific deterrence, in my submission, isn't really that necessary here. Whether there should be an order for restitution, I will leave that in Your Honour's hands. My client still has very little money to pay back, but it may only be fair to the complainants to give them that much, but, in my respectful submission, a sentence of actual jail isn't really in this case going to further the ends of justice or the interests of my client.

[12] At the time of sentencing, the appellant was unemployed and collecting monthly disability benefits of $900 a month. According to his pre-sentence report, he hoped to open a business restoring antique furniture and to one day compensate his victims. Defence counsel also filed reference letters for the appellant, one of which was from a small business owner of an office cleaning business which stated that the appellant "has an open job offer anytime".

[13] In sentencing the appellant, the trial judge considered the following aggravating factors: -- Mr. Castro abused a position of trust as a paralegal to whom his clients granted a power of attorney. -- Mr. Castro knew the victims were vulnerable and dependent on him, and that they needed the settlement money urgently. -- The level of deceit was substantial. -- There had been no restitution.

[14] The trial judge also considered the following mitigating factors: -- Mr. Castro was a first-time offender. -- He did not intend to steal the money on a permanent basis. He openly acknowledged that he owed clients money and made partial payments in a number of cases. -- Neither Ms. Benitez nor State Farm Insurance was harmed financially by the appellant's fraud -- the amount paid by State Farm to the appellant was the amount that had previously [page614] been agreed to by the parties, and eventually the appellant paid Ms. Benitez. -- Mr. Castro expressed remorse to various individuals in his life, including his minister and physician, for his actions and the losses he caused the victims.

[15] Defence counsel had suggested that the appellant stole the money in order to support his brother's drug habit. However, that explanation was not offered by the appellant himself when he testified at trial. The trial judge decided, "Defence counsel's suggestion, although plausible, will therefore be given no weight as a mitigating factor." [^1]

[16] After reviewing the case law on sentencing that counsel had provided him, the trial judge concluded that in situations of theft "where the amount involved is in the lower end of the large-scale range, i.e. less than $200,000 and there are few if any mitigating factors", the most appropriate sentence is a reformatory sentence in the range of 18 to 23 months. The trial judge felt that in the present case, the sentence for the six theft counts, given the aggravating factors, should be about 21 months; however, inasmuch as Mr. Castro did not intend to permanently deprive the victims of their money, the trial judge decided instead to impose a sentence of 19 months on the theft charges. With respect to the forgery and fraud charges, he imposed a sentence of four and a half months (reduced to four months due to pre-trial custody) to be served consecutively, for a total sentence of 23 months.

[17] The trial judge then discussed why a conditional sentence was not appropriate. He wrote:

A conditional sentence for a large-scale theft or fraud by a person in a position of trust has only been imposed where the circumstances were exceptional--for example, where there was no intention to defraud or where the defendant was not motivated by personal gain or where there was only a risk of loss and no actual loss. . . . In this case, Mr. Castro fully intended to take and convert his clients' money, he was clearly motivated by personal gain and actual monetary losses were sustained by the victims.

[18] The trial judge was of the opinion that a conditional sentence would not be consistent with the principles of sentencing. Specifically, he found that "[a]n effective expression of general [page615] deterrence and denunciation to the extent required by this case would not be achieved by imposing a term of house arrest, particularly for an offender who is currently unemployed and living at home on disability payments".

[19] In addition to imposing a custodial sentence of 23 months, the trial judge ordered restitution in the amount of $141,752. In a footnote to his reasons, the trial judge stated, "This is a free-standing restitution order in favour of the five clients who lost money: Rodrigues $3,000; I. Moran $16,000; S. Moran $19,000; Romero $13,752 and Cristales $90,000." The trial judge calculated the amount owing to each victim in a manner that was most favourable to the appellant. The trial judge concluded his reasons on sentence:

Mr. Castro, you have committed some serious crimes and you will now be obliged to pay the price. However, you are still only 49 years old. You have many years of productive life ahead of you. Good luck to you.

The Issues on Appeal

[20] The appellant submits that in making the restitution order, the trial judge committed three errors: (1) he did not consider restitution alongside the sentence of incarceration and ordered it as a "mechanical afterthought"; (2) he did not consider the appellant's ability to pay; and (3) he did not exercise caution and restraint in making the restitution order.

Analysis

[21] Section 738(1)(a) 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".

[22] A restitution order forms part of a sentence. In accordance with general sentencing principles, a restitution order is entitled to deference and an appellate court will only interfere with the sentencing judge's exercise of discretion on the basis of error in principle or if the order is excessive or inadequate: see R. v. Devgan (1999), 1999 2412 (ON CA), 44 O.R. (3d) 161, [1999] O.J. No. 1825, 136 C.C.C. (3d) 238 (C.A.), at para. 28. [^2] [page616]

[23] A restitution order should not be made as a mechanical afterthought to a sentence of imprisonment: R. v. Siemens, 1999 18651 (MB CA), [1999] M.J. No. 285, 136 C.C.C. (3d) 353 (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.

[24] 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 8 (SCC), [1978] 2 S.C.R. 940, [1978] S.C.J. No. 48. While the decision deals with predecessor legislation, [^3] the decision of Laskin C.J.C. nevertheless serves as a blueprint for the considerations to be taken into account in making a restitution order under s. 738(1). These considerations were summarized by Labrosse J.A. in Devgan, at para. 26, as part of a non-exhaustive list:

In Zelensky, Laskin C.J. identified certain objectives and factors that relate to the application of s. 725(1). These considerations have been expanded upon in subsequent cases. Below, I have consolidated these objectives and factors, all of which are relevant to the issue of what constitutes a proper exercise of discretion for the purpose of s. 725(1).

1. An order for compensation should be made with restraint and caution;
2. The concept of compensation is essential to the sentencing process: (i) it emphasizes the sanction imposed upon the offender; (ii) it makes the accused responsible for making restitution to the victim; (iii) it prevents the accused from profiting from crime; and [page617] (iv) it provides a convenient, rapid and inexpensive means of recovery for the victim;
3. A sentencing judge should consider: (i) the purpose of the aggrieved person in invoking s. 725(1); (ii) whether civil proceedings have been initiated and are being pursued; and (iii) the means of the offender.
4. A compensation order should not be used as a substitute for civil proceedings. Parliament did not intend that compensation orders would displace the civil remedies necessary to ensure full compensation to victims.
5. A compensation order is not the appropriate mechanism to unravel involved commercial transactions;
6. A compensation order should not be granted when it would require the criminal court to interpret written documents to determine the amount of money sought through the order. The loss should be capable of ready calculation.
7. A compensation order should not be granted if the effect of provincial legislation would have to be considered in order to determine what order should be made;
8. Any serious contest on legal or factual issues should signal a denial of recourse to an order;
9. Double recovery can be prevented by the jurisdiction of the civil courts to require proper accounting of all sums recovered; and
10. A compensation order may be appropriate where a related civil judgment has been rendered unenforceable as a result of bankruptcy.

[25] As support for these factors, Labrosse J.A. cited Zelensky, at pp. 960-64 S.C.R.; R. v. Fitzgibbon, 1990 102 (SCC), [1990] 1 S.C.R. 1005, [1990] S.C.J. No. 45, at pp. 1012-14 S.C.R.; London Life Insurance Co. v. Zavitz, 1992 1503 (BC CA), [1992] B.C.J. No. 400, 12 C.R. (4th) 267 (C.A.), at p. 270 C.R.; R. v. Scherer, 1984 3594 (ON CA), [1984] O.J. No. 156, 16 C.C.C. (3d) 30 (C.A.), at pp. 37-38 C.C.C.; R. v. Salituro, 1990 10984 (ON CA), [1990] O.J. No. 805, 56 C.C.C. (3d) 350 (C.A.), at pp. 372-73 C.C.C.; R. v. Horne (1996), 1996 11971 (ON SC), 34 O.R. (3d) 142, [1996] O.J. No. 5380 (Gen. Div.), at pp. 148-49 O.R.; and R. v. Carter, [1990] O.J. No. 3140, 9 C.C.L.S. 69 (Gen. Div.), at pp. 75-76 C.C.L.S.

[26] In general, the omission of a judge to give consideration to a relevant factor gives rise to reviewable error. Thus, the omission of a sentencing judge to give any consideration to the relevant factor of the offender's ability to repay the amount of money taken is an error. A restitution order is not intended to undermine the prospects for rehabilitation of the offender: see, e.g., R. v. Ali, 1997 2655 (BC CA), [1997] B.C.J. No. 2516, 98 B.C.A.C. 239 (C.A.); [page618] R. v. Biegus, 1999 3815 (ON CA), [1999] O.J. No. 4963, 141 C.C.C. (3d) 245 (C.A.), at paras. 15 and 22; and R. c. Ford, 2002 34585 (QC CQ), [2002] J.Q. no 4751, 2 C.R. (6th) 348 (C.Q. crim. & pén.).

[27] Reviewing courts have, however, consistently held that no single factor is itself determinative of whether a compensation order should be granted and that the weight to be given to individual considerations will depend on the circumstances of each case. Those circumstances include two considerations I wish to emphasize: the nature of the offence and, when money has been taken, what has happened to the money.

[28] 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 S.C.R. Ability to pay is not the predominant factor. Indeed, where the circumstances of the offence are particularly egregious, such as where a breach of trust is involved, a restitution order may be made even where there does not appear to be any likelihood of repayment: R. v. Yates, 2002 BCCA 583, [2002] B.C.J. No. 2415, 169 C.C.C. (3d) 506 (C.A.), at paras. 12 and 17.

[29] The decisions in Ali, Biegus and Ford do not involve a breach of trust. [^4] By contrast, Fitzgibbon involved an undischarged bankrupt lawyer who acknowledged the amounts he owed. He was ordered to pay compensation to the Law Society of Upper Canada's Compensation Fund and to reimburse a client for the amount by which the client's losses exceeded the maximum allowable claim from the Compensation Fund. Cory J., writing on behalf of the court, stated, at pp. 1014-15 S.C.R.:

[The appellant] used his position to defraud the very persons who had every reason to trust and rely upon him. The fraudulent acts of a lawyer directed against his own clients warranted the imposition of a compensation order even though the lawyer's means at the time of sentencing were minimal. The claims of the victims of the fraudulent acts should be paramount. (Emphasis added)

[30] In imposing a sentence where the offender has used his or her position to commit a breach of trust, the primary considerations are the protection of the public, general deterrence and the repudiation of the conduct of which the offender was found guilty. Relevant factors include the length of time over which the conduct took place, whether the offence was a sophisticated and well-planned scheme, the amount involved [page619] and, most importantly, the impact of the offender's conduct on the victims. The secondary considerations are specific deterrence, rehabilitation and any mitigating circumstances such as a plea of guilty or co-operation with the authorities (in tracing the funds): Scherer, per Martin J.A., at para. 34.

[31] In Sherer, some of the victims had lost most or all of their life savings as a result of the offender's breach of trust. While Martin J.A. reduced the sentence of imprisonment from nine years to seven years, he upheld the compensation order in the amount of $2,173,164.21 to the persons aggrieved. [^5] Restitution in that case recognized the victims' needs and at the same time underlined the larger social interest in the imposition of a sanction related to the crime.

[32] Whether or not a breach of trust has occurred, the impact of the crime on the victim is an important factor. In Biegus, the appellant was one of several co-accused convicted of bank theft. The ringleader, Hornett, worked for Intercon Security and as a result had access to the combinations of ATM machines in various Royal Bank branches. Biegus was brought in by Hornett and participated with him in seven thefts. After Biegus pleaded guilty, he co-operated fully with the police and returned $14,000 of the cash. He received a sentence of two years less a day in jail and was ordered to make restitution of the remaining amount stolen in the seven thefts with Hornett, namely, $638,534. The sentencing judge recognized that Biegus did not have the ability to pay this amount but did not say why this fact was irrelevant in imposing the order for restitution. On appeal, the court held that the sentencing judge erred in not addressing this factor and also erred by failing to take into account the potentially unfair effect to Biegus of the restitution orders already made against [page620] two other co- accused. The court did not say that Biegus engaged in any breach of trust. The restitution order was excessive and prevented Biegus's rehabilitation. The court noted that the bank's insurer had already repaid the bank $453,387.70. Furthermore, the bank could be in a position to recover a portion of its losses from Hornett. Therefore, the court reduced the amount of restitution to $264,000, the amount Biegus acknowledged he received from the robbery. Where the victim is a large institution, or is likely to have insurance for the amount of the loss, the impact on the victim will obviously be much less than in situations where disabled or elderly persons have lost their ability to earn income and to replace the money taken.

[33] This brings me to a discussion of the second consideration I wish to emphasize, namely, evidence as to what has happened to the money that was taken illegally and how this evidence factors into a determination of the ability to pay. [^6]

[34] Ability to pay must take into consideration what disclosure has been made respecting where the money is or has gone. Depriving the offender of the fruits of his crime is one of the overarching goals of making a restitution order: see Working Paper 5: Restitution of the Law Reform Commission of Canada (Ottawa: Information Canada, 1974), cited with approval by Laskin C.J.C. in Zelensky, at pp. 952-53. In cases of theft, robbery, fraud, breach of trust or the like, I see no reason why the court should accept an offender's bald assertion that he or she has no ability to make restitution because the money "is gone" when no evidence is proffered in support of this assertion. When the victims can clearly establish that "the replacement value of the property" under s. 738(1)(a) is the amount of money taken, surely it is the offender asserting that he or she has no ability to make restitution who is in the best position to provide transparency concerning what has happened to that money. A bald assertion that the money is gone should be given no weight. Similarly, when the location of the money illegally obtained by the offender is unknown, the sentencing judge is entitled to take that fact [page621] into account with respect to ability to pay in making a restitution order: see, e.g., R. v. Williams, [2007] O.J. No. 1604, 2007 13949 (S.C.J.), per Hill J., at para. 41.

[35] To summarize, a restitution order is simply part of the determination of an overall fit sentence, and general sentencing principles apply. While consideration of the offender's ability to pay and the impact of a restitution order on an offender's rehabilitation are factors to be considered, the weight to be given to these factors will vary depending on the nature of the offence and the circumstances of the offender. When the offence involves a breach of trust, a primary consideration is the effect on the victim; rehabilitation is a secondary consideration. Furthermore, consideration of the ability to pay includes the ability to make payment from the money taken as a source of restitution.

[36] I now apply these principles to this appeal.

1. Restitution in addition to imprisonment

[37] The appellant submits that the trial judge did not consider restitution alongside other aspects of the appellant's punishment. I disagree. The judge's sentencing decision must be read in context and as a whole. The judge determined that the appellant's case was similar to, but more serious than, four cases involving breach of trust where full restitution was ordered in addition to imprisonment of between 14 and 18 months: R. v. McEachern, 1978 2506 (ON CA), [1978] O.J. No. 987, 42 C.C.C. (2d) 189 (C.A.); R. v. Smith, 2004 33793 (ON CA), [2004] O.J. No. 4179, 191 O.A.C. 1 (C.A.); R. v. Collalti, [2003] O.J. No. 5353 (S.C.J.); and Williams. [^7] In the present case, although the trial judge did not explicitly say so, it is clear from his sentencing reasons that he considered the entirety of the sentence when making the restitution order. [page622]

2. Ability to pay

[38] The appellant submits that the trial judge erred by not considering his ability to pay the full amount of the order. The appellant is currently unemployed and his only source of income is a monthly disability payment of $990. The restitution order in the full amount will negatively impact his post- incarceration rehabilitation. He submits that although this is a case where there has been an abuse of trust, in Scherer this court stated, "It may be that in some cases it would be inappropriate and undesirable to make a compensation order in an amount that is unrealistic to think the accused could ever discharge."

[39] The appellant's submission focuses on his present ability to pay. The trial judge's comment, at the conclusion of his reasons, that the appellant was only 49 years old and had many years of productive life ahead of him, is indicative that the trial judge was considering the appellant's future prospects in imposing the restitution order he did. The trial judge had before him evidence that the appellant hoped to open his own business restoring furniture and had a standing offer of employment with a cleaning company. The trial judge imposed a free-standing restitution order as opposed to making restitution a term of probation, which would have required payment within a relatively short time-frame.

[40] In addition, the trial judge was entitled to note, as he did, that little or no restitution had been made. It is not clear to me whether Carlos Castro was present when Manuel Castro made his comment to Mr. Cristales about the money being "in a place where no one can get at it", nor were Carlos and Manuel Castro co-venturers. Thus, for the purposes of this appeal, I will assume that the comment is not admissible against the appellant. However, there was no evidence proffered as to what the appellant did with the money once he withdrew it from his trust account. The trial judge rightly rejected counsel's bald submission that the money had been used to buy drugs for his brother's cocaine habit. The lack of evidence as to what happened to the money obtained by the appellant's conduct was a fact open to the trial judge to consider regarding ability to pay.

[41] I therefore find that the trial judge did not fail to take into consideration the appellant's ability to pay.

3. Restraint and caution in making a restitution order

[42] In oral submissions before this court, the appellant submitted that the restitution order is a prejudice to him because he cannot apply for a pardon for his crimes until he has made [page623] restitution to his victims. Without a pardon, it is unlikely that the appellant will be able to obtain certain types of employment. Where fraud is involved, a restitution order survives bankruptcy. The victims are also free to pursue civil remedies. The appellant submits that in making a restitution order for the full amount owed, [the] trial judge did not exercise restraint and caution. The restitution order should be reduced.

[43] The comment that a restitution order should be made with restraint and caution is sometimes taken out of context as a free-standing brake on the making of a compensation order. The comment by Laskin C.J.C. in Zelensky regarding restraint and caution was made in the context of a broader statement that the purpose of a compensation order should not be to enforce a civil obligation, particularly where the amount taken is unclear; rather, the purpose of a compensation order is as part of the sentence: see Zelensky, at pp. 961-62 S.C.R. The fact that a restitution order provides a convenient, rapid and inexpensive means of recovery for the victim, especially a vulnerable victim, is one of the considerations in favour of the making of such an order.

[44] In this case, the court was advised that some of the victims initiated civil proceedings against the appellant, and at least one victim, Mr. Fausto Romero, has obtained a civil judgment that remains unsatisfied. Thus, the trial judge's purpose in ordering restitution was not to circumvent the civil process respecting a disputed amount. There was no dispute at trial as to the amount the appellant had stolen. The victims tended to understate the amounts they were owed. The trial judge determined the amount of restitution based on the victims' estimates and thus the amount ordered already represents a reduction.

[45] The civil judgment obtained remains unsatisfied. It appears that the appellant's paralegal firm, Castro and Associates, has gone bankrupt. The record is silent as to whether the appellant has personally declared bankruptcy. While the appellant points out that an order for the repayment of money obtained by fraud survives bankruptcy, there was only one allegation of fraud respecting forgery of Ms. Benitez's signature and no damage flowed from that. The other amounts were stolen. Inasmuch as a restitution order survives bankruptcy, it is possibly the only means of preserving the victims' claims against the appellant.

Conclusion

[46] The imposition of the restitution order was a proper exercise of the trial judge's discretion and he gave effect to the requisite factors. The appellant used his position as a paralegal to engage in a breach of trust vis-à-vis vulnerable disabled persons. [page624] He has some future prospects, and the disposition of the money obtained by his conduct is unknown. The restitution order may be the only means of preserving the victims' claims against the appellant. Accordingly, I would dismiss the appeal and uphold the restitution order.

[47] The court is indebted to counsel for a very thorough and well-argued appeal.

Appeal dismissed.

Notes

[^1]: The trial judge's use of the term "mitigating factor" is curious. Perhaps the trial judge meant to say that he would give no weight to the appellant's bald submission that the stolen money had been spent when considering the appellant's ability to pay restitution to his victims.

[^2]: While Devgan concerned a "compensation order" made under the former s. 725(1) of the Criminal Code, the current s. 738(1) is a descendent of s. 725(1) and serves the same purpose of allowing the court to include compensation of victims of crime as part of an offender's sentence. Therefore, the same sentencing principles that informed a review of compensation orders, as discussed in Devgan, also inform a review of restitution orders under s. 738(1).

[^3]: Formerly, the Criminal Code, R.S.C. 1970, c. C-34 made provision for "restitution orders" under s. 655 and "compensation orders" under s. 653. Zelensky concerned compensation orders under s. 653, which was later re-enacted as s. 725 and then, in 1995, replaced with the current s. 738. Thus, a "restitution order" under the current s. 738 is essentially the former compensation order as discussed in Zelensky and is similarly aimed at restoring the victim to his or her position before the crime. What used to be s. 655 is now restitution or forfeiture under s. 491.1, which provides that property obtained by crime that has now been seized by law enforcement authorities or is in the possession of the court shall be returned to its lawful owner.

[^4]: The offence in Ali was the possession of stolen goods; in Biegus, the offence was bank theft from ATM machines; and in Ford, the offence was setting fire to a building.

[^5]: This brings me to another point I wish to make. In some instances, such as the present, counsel does not contest the custodial portion of imprisonment but seeks relief from the restitution order. Based on my reading of Scherer and R. v. Hoyt, 1992 6006 (BC CA), [1992] B.C.J. No. 2315, 77 C.C.C. (3d) 289 (C.A.), it seems to me that in looking at the question of whether the total sentence is fit, the court ought to be in a position to review the total sentence. It may be that a reviewing court will be more sympathetic to reducing the custodial portion of a sentence, because that will have no impact on the victims of the offender and may in fact help them because the offender will be able to start earning income earlier. Eliminating or reducing the amount of restitution an offender has been ordered to pay will obviously impact the victims. When leave to appeal only the restitution order is sought, the appellant is essentially asking the court to look at the totality of the sentence while at the same time refusing to allow the court to deal with the totality of the sentence.

[^6]: The sentencing judge should take into consideration more than present income. The offender's future ability to earn will be at least as important, if not more so, than his or her present means to pay: R. v. Hoyt, supra, at p. 299 C.C.C. The person who has striven to succeed in the past may well do so in the future and be able to make payment: R. v. Moscone, [1985] B.C.J. No. 1755 (C.A.). Consideration of the offender's ability to pay must also take into consideration any assets owned or controlled by the offender, such as equity in a home: R. v. Rizzetto, 2002 NSCA 142, [2002] N.S.J. No. 489, 210 N.S.R. (2d) 67 (C.A.), at para. 16; Yates, at paras. 28-33.

[^7]: In R. v. McEachern, there was a breach of trust by an assistant bank manager who stole $87,000; he was sentenced to 18 months' imprisonment and ordered to pay $12,000, being the balance of which restitution had not yet been made. Similarly, in R. v. Smith, a bank employee stole $40,734 with two co-conspirators; the employee was sentenced to 14 months' imprisonment and ordered to make restitution of the full amount, despite there being co-conspirators. In R. v. Collalti, there was a breach of trust by the accused, who stole about $120,000 from a business for whom she provided bookkeeping services; she was sentenced to 14 months' imprisonment and ordered to make restitution of the full amount. In R. v. Williams, the accused breached her employer's trust by defrauding her employer; she was sentenced to 18 months' imprisonment and ordered to make restitution of $159,000.