COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Tuduce, 2014 ONCA 547

DATE: 20140717

DOCKET: C55028

Gillese, Rouleau and Pepall JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Adrian Stefanita Tuduce

Appellant

N. Jamaldin, for the appellant

Deborah Krick and Avene Derwa, for the respondent

Heard: May 22, 2014

On appeal from the conviction entered on June 27, 2011, and the sentence imposed on February 6, 2012, by Justice Gerald E. Taylor of the Superior Court of Justice, sitting without a jury.

Gillese J.A.:

[1] Adrian Stefanita Tuduce (the "appellant") was found in possession of 48 LCBO gift cards and a Scotiabank debit card, each of which had been encoded with data from a valid debit card account. Some of the cards had been used to complete transactions. He was also found in possession of equipment used to skim data from credit and debit cards.

[2] The appellant was convicted of seven credit card fraud-related offences and sentenced to two years less a day's imprisonment followed by two years' probation.

[3] The appellant appeals against conviction. He seeks leave to appeal against sentence, and moves to admit fresh evidence in respect of his sentence appeal.

[4] For the reasons that follow, I would dismiss the conviction appeal and, while I would grant leave to appeal sentence, I would also dismiss that appeal, as well as the motion to admit fresh evidence in respect of the sentence appeal.

BACKGROUND

The Driving Arrest and the Pat-Down Search

[5] At about 10:22 a.m. on January 20, 2009, Cst. John Foster of the Waterloo Regional Police Service pulled over a Mercedes SUV travelling at 118km/h in a zone where the speed limit was 80 km/h. The appellant was the driver and sole occupant. After receiving the appellant's licence and registration, Cst. Foster went back to his cruiser to conduct routine checks. He found that the appellant's licence had been suspended for unpaid fines.

[6] At 10:28 a.m., Cst. Foster arrested the appellant for driving with a suspended licence. He conducted a pat-down search for safety reasons. The appellant was wearing a large, puffy winter coat. Cst. Foster placed his hands in the front pocket of the coat and pulled out a small leather wallet, a USB key, and a bundle of credit cards held together with an elastic band. Cst. Foster noticed that the cards were not in the appellant's name, and that one of the cards was in a small manila envelope. The appellant said that the cards belonged to his girlfriend.

[7] Cst. Foster placed the appellant in the back of his cruiser. He did not handcuff the appellant. He let the appellant keep his cell phone to call his mother to pick up the SUV.

The SUV Search Incident to the Driving Arrest and Subsequent Credit Card Arrest

[8] Cst. Foster returned to the SUV to turn off the ignition and roll up the window. He noticed a dismantled cell phone, a SIM card, and a large number of credit card-sized manila envelopes. He also noticed two Provincial Offences Act notices on the back seat. At that point, he formed the belief that the cards he had found in the appellant's pocket were stolen, and that he had sufficient grounds to arrest the appellant for possession of stolen credit cards, contrary to s. 342(1)(c) of the Criminal Code, R.S.C. 1985, c. C-46 (the "Code").

[9] Cst. Foster then returned to the cruiser, placed the appellant under arrest for credit card fraud, handcuffed him, and took his cell phone and bundle of cards.

[10] Cst. Foster returned to the SUV to seize the envelopes, SIM card, and dismantled cell phone. He opened the rear door to retrieve the Provincial Offences Act notices. At this point, he noticed a green fabric box on the floor behind the driver's seat. He could see a portion of an Ontario driver's licence sticking out of the box. Cst. Foster was aware that it is an offence under the Highway Traffic Act, R.S.O. 1990, c. H.8, to possess more than one driver's licence. He removed the licence and examined it. It was in the name of "Thomas Brook".

[11] Cst. Foster also noticed a small saran-wrapped package that he thought might contain narcotics. He unwrapped the package and found a number of small electronic parts that he thought could be used to take information from the magnetic strip of credit and debit cards. Cst. Foster also saw four or five shopping bags. He could see computer cables and the edge of a credit card imprinter protruding from one of the bags, a black "Guess Jeans" bag. He took this bag and placed it in the back of his cruiser.

[12] Cst. Foster halted the search of the SUV for safety reasons. Cars were passing at a high rate of speed near where he was standing. The appellant's mother had also arrived and was walking around. He took the appellant to a police station in Kitchener. He searched the appellant, finding six more SIM cards and a small electronics board. He placed the appellant's USB key with the appellant's personal property.

The SUV Search After Towing

[13] Cst. Foster met with two detectives from the fraud branch, Dets. Klingenberg and McLinden (the "Detectives"). They decided that the appellant should also be charged with possession of instruments for forgery contrary to s. 342.01 of the Code. Cst. Foster told the Detectives that there were still shopping bags in the back of the SUV that needed to be seized. At 3:40 p.m., the Detectives went to Active Frank's Towing (where the vehicle had been taken) and seized the bags. They believed a warrant was not necessary because they were only continuing Cst. Foster's search incident to arrest.

The Search of the USB key

[14] After returning to the police station, the Detectives met with Cst. Foster again. They decided to search the USB key the appellant had been carrying. Det. McLinden believed there could be additional information regarding the debit card data found in the appellant's SUV. Later that evening, Det. McLinden put the USB key into his computer and briefly searched its contents. He did not think that a warrant was required because the USB key had been seized incident to arrest.

[15] On January 22, 2009, Det. McLinden turned the USB key over to Det. Harth, an expert in the forensic examination of electromagnetic, optical, and digital storage devices. Det. Harth analyzed the USB key on January 27, a week after the appellant's arrest. He retrieved photographs of a card reader insert used in a skimming device and of a circuit board that resembled circuit boards known to have been used in skimming devices; text files containing a series of numbers that appeared to be credit or debit card numbers followed by four digit Personal Identification Numbers ("PINs"); and links to websites that appeared to offer pinhole cameras and material for use in skimming devices for purchase, as well as instructions on how to make a magnetic strip card reader.

Evidence of Unauthorized Use of Credit Card Data

[16] Among the charges against the appellant were three counts of unauthorized use of credit card data contrary to s. 342(3) of the Code. These were counts four through six of the appellant's indictment.

[17] Count four alleged unauthorized use of CIBC debit card data. (A debit card counts as a "credit card" for the purposes of s. 342(3) of the Code.) Noel Moyston, Director of Corporate Security – Debit Card Fraud for CIBC, testified at the appellant's trial that 29 of the LCBO gift cards found in the appellant's SUV were encoded with data belonging to valid CIBC debit accounts, and that these cards had not been issued by CIBC. He added that all of these accounts had unauthorized activity between November 29, 2008, and December 13, 2008, resulting in a total loss of $2,488.50 in respect of five of the cards. He testified that the debit cards were all likely blocked on December 13, 2008.

[18] Count five alleged unauthorized use of RBC debit card data. Stephen Bone, a corporate security investigator with RBC, testified that 19 of the LCBO gift cards found in the appellant's SUV had been encoded with data belonging to RBC accounts, and that these cards had not been issued by RBC. There was no evidence of unauthorized use of these cards.

[19] Count six alleged unauthorized use of BMO debit card data. Michael O'Malley, employed by BMO's corporate security department, testified that a Scotiabank debit card found in the appellant's SUV had been encoded with data belonging to a valid BMO debit card. He testified that the card had been blocked in October 2008 because of transactions that were deemed to be fraudulent. BMO had suffered a loss of $800 from the use of the card.

Requirements for a Successful Debit Transaction

[20] The Crown led evidence at trial that to successfully complete a transaction using a debit card, the account number and routing data (collectively referred to as "track data") encoded in the card must match the data attached to the particular account. The user must also enter a PIN.

[21] The account number is a unique identifier that belongs only to the legitimate card. The routing data is an algorithm used for processing. Mr. Bone explained that nobody employed at the bank actually knows the algorithm. Mr. McGowan explained that when credit or debit card data is skimmed, all of the track data is necessarily copied.

[22] The Crown's experts could not confirm that the routing data on the cards the appellant possessed matched valid bank accounts, but Mr. McGowan did indicate that all of the track data was in the format necessary to authorize a transaction.

[23] Just as is the case with a credit card, a debit card generally cannot be used when it is blocked or cancelled. Mr. Moyston testified that it might be possible to use a blocked card on a "remote" ATM (an ATM that carries out transactions offline, without connecting to the host server). In the case of a credit card, a blocked or cancelled card could be used over the phone where the merchant does not verify the card number. In either case, the merchant or ATM owner will not be reimbursed by the bank for the loss.

THE CHARTER RULINGS

[24] The appellant claimed that the various searches breached his rights under s. 8 of the Canadian Charter of Rights and Freedoms (the "Charter"). He brought a motion pursuant to s. 24(2) of the Charter to have excluded all evidence seized following his driving and credit card arrests.

[25] The trial judge considered the following four searches:

1. the pat-down search following the driving arrest;
2. the roadside search of the SUV following the driving arrest, during which the credit card arrest occurred;
3. the search of the SUV after it was towed; and
4. the search of the USB key.

[26] Initially, the trial judge found a s. 8 breach only in respect of the examination of the USB key. He did not exclude the evidence from that search pursuant to s. 24(2).

[27] After the release of R. v. Loewen, 2011 SCC 21, [2011] 2 S.C.R. 167, a Supreme Court of Canada decision that clarified the requisite legal standard for "reasonable and probable" grounds for arrest, the trial judge released an amended Charter ruling, in which he found that the roadside arrest for possession of stolen credit cards was unlawful and that, accordingly, the searches of the SUV incident to that arrest were also unlawful. Nonetheless, he concluded that the evidence discovered from these searches should not be excluded pursuant to s. 24(2).

[28] The trial judge's ruling, as amended, can be summarized as follows.

Validity of the Searches

[29] The trial judge found that the pat-down search was not carried out contrary to s. 8 of the Charter. He noted that no issue had been taken with the validity of the appellant's driving arrest and that, as such, there was no dispute that Cst. Foster was entitled under Cloutier v. Langlois, 1990 CanLII 122 (SCC), [1990] 1 S.C.R. 158, at p. 186, to conduct a warrantless search incident to arrest for "an object that may be a threat to the safety of the police, the accused or the public, or that may facilitate escape or act as evidence against the accused". The trial judge concluded that Cst. Foster conducted the pat-down search and his inspection of the appellant's wallet and bundle of cards for safety reasons and that it was reasonable for him to do so. The trial judge noted that a small item that could have been used as a weapon, such as a razor blade, could have been located in the wallet or the stack of credit cards. The trial judge added that it was also reasonable for Cst. Foster to examine the contents of the wallet and read the names on the credit cards while he conducted his search, as it is unrealistic to require a police officer to refrain from examining items that he locates during the course of a pat-down search for weapons.

[30] However, the trial judge concluded that the searches of the SUV violated s. 8 of the Charter. In his view, Cst. Foster's observation of the dismantled cell phone, SIM card, and manila envelopes did not establish reasonable and probable grounds that an offence under s. 342(1)(c) of the Code had been committed, and accordingly, his arrest of the appellant for credit card fraud was unlawful. Because this arrest was unlawful, both of the searches of the SUV carried out incident to that arrest were also unlawful. In the trial judge's view, reasonable and probable grounds would only have arisen after Cst. Foster saw the second driver's licence and credit card skimming equipment that were in the back of the appellant's SUV.

[31] The trial judge concluded that the search of the USB key also violated s. 8 of the Charter because, absent exigent circumstances, the police power to search incident to arrest does not authorize the search of an electronic device. In reaching this conclusion, he relied on this court's decision in R. v. Manley, 2011 ONCA 128, 269 C.C.C. (3d) 40, at para. 39, which adopted the reasoning in R. v. Polius (2009), 196 C.R.R. (2d) 288 (Ont. S.C.), at paras. 50-54.

Section 24(2)

[32] Although the trial judge concluded that the searches of the SUV and the USB key violated s. 8 of the Charter, he did not exclude the evidence obtained from those searches pursuant to s. 24(2).

[33] With respect to the searches of the SUV, he found that Cst. Foster did not act in bad faith, and that he would have formed reasonable and probable grounds to arrest the appellant for credit card fraud when he retrieved the Provincial Offences Act notices from the back seat of the appellant's car and noticed the second driver's licence and credit card skimming equipment that were near the notices. The trial judge also noted that all of the items seized were in plain view in a vehicle on a public highway, and hence the appellant's reasonable expectation of privacy was relatively low. Finally, the evidence was probative and reliable.

[34] With respect to the search of the USB key, the trial judge noted that this search had been carried out before Polius clarified the law with respect to searches of electronic devices, and that the Waterloo Regional Police Service had since changed its policy on searches to comply with Polius and Manley. Therefore, he found, the failure to obtain a search warrant before examining the content of the USB key was not a serious breach of the Charter.

[35] The trial judge found that the impact on the appellant's Charter-protected interests was not significant. In reaching this conclusion, the trial judge took into consideration that the appellant was carrying the USB key in his coat pocket, while he was driving a motor vehicle, and that the data on the USB key was not password protected. In his view, these considerations pointed to a lower expectation of privacy than a person would have had in respect of a password-protected memory stick kept in that person's private residence. The trial judge also noted that there was no suggestion that the police treated the appellant inappropriately in any of their interactions with him.

[36] Finally, the trial judge found that the evidence was reliable and that exclusion of the evidence would impair the truth seeking function of the trial on the charges in question.

[37] After considering and balancing the three factors, the trial judge found that society's interest in the adjudication of the charges tipped the scales against exclusion of the evidence located on the USB key.

THE TRIAL DECISION

[38] The trial judge convicted the appellant of one count of possession of materials intended for use in forging or falsifying credit cards contrary to s. 342.01 of the Code, two counts of possession of stolen credit cards contrary to s. 342(1)(c) of the Code, one count of possession of a counterfeit mark contrary to s. 372(2)(b) of the Code, and three counts of possession of credit card data contrary to s. 342(3) of the Code.

[39] With respect to the counts under s. 342(3) of the Code, the trial judge concluded that it was not necessary for the Crown to prove that a debit or credit card issuer could be successfully defrauded through use of the data in the appellant's possession, and that as such, it was irrelevant that some of the accounts at issue had been blocked or cancelled at the time of the appellant's arrest. In reaching this conclusion, he relied on this court's decision in R. v. Kokoouline, 2009 ONCA 253, which states, at para. 6, that s. 342(3) of the Code "does not require that the Crown prove that the issuer of the credit card could be successfully defrauded by its use before the Crown can obtain a conviction under that section."

[40] The trial judge also concluded that it was not necessary for the Crown to prove that all of the track data encoded on the cards in the appellant's possession matched valid account data.

THE ISSUES

[41] The appellant submits that the trial judge erred in:

(1) finding that the pat-down search and examination of his wallet and credit cards did not violate s. 8 of the Charter and failing to exclude this evidence pursuant to s. 24(2) of the Charter;

(2) failing to exclude the evidence obtained from the searches of the SUV and the USB key, pursuant to s. 24(2) of the Charter; and

(3) convicting him under s. 342(3) of the Code for unauthorized possession of credit card data, when the credit cards were blocked and the track data was not present.

[42] If leave is granted, the appellant will argue that the sentence was harsh and excessive.

THE CONVICTION APPEAL

Issue #1: Did the pat-down search of the appellant's wallet and credit cards violate [s. 8](https://www.canlii.org/en/ca/laws/stat/schedule-b-to-the-canada-act-1982-uk-1982-c-11/latest/schedule-b-to-the-canada-act-1982-uk-1982-c-11.html) of the [Charter](https://www.canlii.org/en/ca/laws/stat/schedule-b-to-the-canada-act-1982-uk-1982-c-11/latest/schedule-b-to-the-canada-act-1982-uk-1982-c-11.html)?

[43] Because a search incident to arrest is predicated on a lawful arrest, the first question is whether the appellant's Highway Traffic Act arrest was lawful.

[44] Section 217(2) of the Highway Traffic Act states that a police officer "may arrest" a person without warrant when the officer believes, on reasonable grounds, that the person has committed any of several enumerated offences contrary to the Highway Traffic Act, including the offence of driving while that person's licence is suspended contrary to s. 53:

Any police officer who, on reasonable and probable grounds, believes that a contravention of any of the provisions of subsection 9 (1), subsection 12 (1), subsection 13 (1), subsection 33 (3), subsection 47 (5), (6), (7) or (8), section 51, 53, subsection 106 (8.2), section 130, 172 or 184, subsection 185 (3), clause 200 (1) (a) or subsection 216 (1) has been committed, may arrest, without warrant, the person he or she believes committed the contravention.

[45] The appellant conceded at trial that the driving arrest was lawful. However, on appeal he submits that although he was speeding and driving with a suspended licence, it was not reasonable for Cst. Foster to have arrested him. He says that Cst. Foster should have instead given him a summons and arranged for the safe towing or removal of the car.

[46] An officer has a broad discretion to arrest under s. 217(2), provided the "reasonable and probable grounds" standard is met. Such an arrest will be invalid only if "there was a complete absence of justification to arrest" or "the arrest was made for an unlawful or improper purpose": R. v. Coleman (1999), 43 M.V.R. (3d) 196 (Ont. S.C.), at para. 25.

[47] This is not a case where there was a complete absence of justification to arrest or where the arrest was made for an unlawful or improper purpose. The appellant was the sole occupant of the SUV. He was speeding and driving with a suspended licence. Based on his record check, Cst. Foster knew that the appellant's licence had been suspended for a sufficient length of time that the appellant would have received notice of the suspension by mail. Had Cst. Foster issued a summons and left the appellant alone on the highway, it is entirely possible that the appellant would have gotten back into his SUV and continued driving on the highway. Constable Foster had the power to arrest, in the circumstances. He detained the appellant by placing him in the back of his cruiser but did not handcuff the appellant, allowing him to contact a licenced driver to pick up the vehicles. The power to arrest was not improperly exercised. The arrest was lawful.

[48] In summary, Cst. Foster had the power to arrest in the circumstances. That power was not improperly exercised. The arrest was therefore lawful.

[49] Further, I see no error in the trial judge's finding that the pat-down search incident to that arrest was lawful. A search incident to arrest may be carried out to ensure the safety of the police and the public, to protect evidence from destruction, or to discover evidence that can be used at trial: R. v. Caslake, 1998 CanLII 838 (SCC), [1998] 1 S.C.R. 51, at para. 19. Cst. Foster was clear in his evidence that he conducted the search for safety reasons relating both to himself and the appellant. Cst. Foster was working alone on a busy highway, and he knew that he would be placing the appellant in the back of his police cruiser without handcuffs. Cst. Foster believed, and in the circumstances had a reasonable basis for believing, that a protective pat-down search would serve the purpose of ensuring officer safety; he was therefore entitled to engage in such a search: Caslake, at paras. 19-20.

[50] The appellant submits that the pat-down search went too far – that Cst. Foster was not permitted to check the appellant's wallet and package of cards. The appellant also notes that Cst. Foster did not specifically address his reason for searching the wallet and package of cards in his testimony.

[51] The appellant made these same submissions before the trial judge, who rejected them and found the search to be reasonable. I see no basis on which to interfere with the trial judge's finding.

[52] Cst. Foster testified that he carried out the search incident to arrest for safety reasons. Although he did not testify directly that the same reasoning applied to his search of the wallet and cards, the trial judge appears to have accepted Cst. Foster's testimony as extending to the search of the wallet and stack of credit cards. The trial judge stated that it is possible for a small item, such as a razor blade, to be located in a wallet or among a stack of credit cards. Accordingly, the trial judge said, it was "unrealistic" to expect the officer to have refrained from examining those items located in the appellant's coat pockets in the course of a pat-down search for weapons.

[53] The trial judge made these findings in the context of a pat-down search that had been conducted in a reasonable manner. Cst. Foster patted down the appellant's waistband and the pockets of his jeans. The appellant was wearing a large, puffy winter coat. Cst. Foster reached into the front pockets of the coat and removed a wallet, USB key and package of cards bound together by an elastic band. He did not remove other items from the pockets and he did not ask the appellant to remove any clothing for closer inspection.

[54] As for Cst. Foster's observation of the names on the cards, I do not see how Cst. Foster could have checked the package of cards for possible weapons without looking at the cards and, in doing so, noticing the names recorded on them.

[55] As there is no error in the trial judge's finding that the pat-down search was valid, no issue as to the exclusion of the evidence resulting from this search arises. Accordingly, in my view, this ground of appeal fails.

Issue #2: Was it an error to fail to exclude the evidence obtained from the searches of the SUV and the USB key, pursuant to [s. 24(2)](https://www.canlii.org/en/ca/laws/stat/schedule-b-to-the-canada-act-1982-uk-1982-c-11/latest/schedule-b-to-the-canada-act-1982-uk-1982-c-11.html) of the [Charter](https://www.canlii.org/en/ca/laws/stat/schedule-b-to-the-canada-act-1982-uk-1982-c-11/latest/schedule-b-to-the-canada-act-1982-uk-1982-c-11.html)?

[56] Whether evidence obtained in violation of the Charter should nonetheless be admitted into evidence requires the court to assess and balance the effect of admitting the evidence on society's confidence in the justice system, having regard to: (i) the seriousness of the Charter-infringing conduct, (ii) the impact of the breach on the Charter-protected interests of the accused, and (iii) society's interest in adjudication of the case on its merits: R. v. Grant, 2009 SCC 32, [2009] 2 S.C.R. 353, at para. 71.

[57] In terms of non-bodily physical evidence obtained contrary to s. 8 of the Charter, Grant, at paras. 112-15, offers this guidance. The seriousness of the Charter-infringing conduct will depend on the extent to which the conduct can be characterized as deliberate or egregious. The impact of the violation will depend on the degree to which the accused's reasonable expectation of privacy was infringed. And, given the reliability of physical evidence, society's interest in having a case adjudicated on its merits will tend to weigh in favour of admission.

[58] In my view, the trial judge did not err when he decided not to exclude the SUV evidence or the USB key evidence pursuant to s. 24(2).

The SUV Evidence

[59] It will be recalled that the trial judge gave his s. 24(2) ruling and then amended that ruling because of the release of Loewen. In his amendment, the trial judge deals with the SUV evidence. At para. 2 of the amended ruling, he states that he would not repeat the facts on which the first ruling was made. Consequently, in my view, it is appropriate to read the first ruling, together with the amended reasons, in determining how the trial judge dealt with the evidence from the SUV searches.

[60] The trial judge found that Cst. Foster did not have reasonable and probable grounds to arrest the appellant for possession of stolen credit cards based on his observation of the disassembled cell phone, the SIM card and the manila envelopes of the approximate size of a credit card, which were located in the front seat of the SUV. However, he found that Cst. Foster was entitled to search the back seat of the SUV, incident to the appellant's arrest for driving with a suspended driver's licence. The court documents on the back seat of the SUV had been in plain view when Cst. Foster approached the vehicle and appeared to be Provincial Offences Act notices.

[61] The trial judge found that upon opening the rear door, Cst. Foster saw the green fabric box and its contents. At that point, Cst. Foster would have had reasonable and probable grounds to arrest the appellant for possession of stolen credit cards. The trial judge expressly found that Cst. Foster had not acted in bad faith and that he subjectively believed that he had grounds to arrest the appellant for possession of stolen credit cards after observing the items on the SUV's front passenger seat and centre console.

[62] As a result, he concluded that the breach was not serious. I agree.

[63] I also agree with the trial judge that the appellant's reasonable expectation of privacy in respect of objects in plain view in a vehicle being driven on the highway was relatively low.

[64] Further, the evidence found in the SUV was reliable physical evidence that was directly relevant to the credit card fraud charges against the appellant. I agree with the trial judge that this factor militates against exclusion of this evidence.

[65] The trial judge balanced these factors and concluded that exclusion was not warranted. I see no basis for interfering with his determination.

[66] Similar reasoning applies to the search that was carried out after the SUV was towed. A search incident to arrest may be carried out "a reasonable period of time after the arrest", and while a "substantial delay" in carrying out the search may cause the court to draw an inference that the search is not sufficiently connected to the arrest, this inference "can be defeated by a reasonable explanation for the delay": Caslake, at para. 24.

[67] Even if the police failed to complete the search of the SUV within a reasonable period of time after the appellant's arrest for credit card fraud, there was a reasonable explanation for the delay. Cars were passing at a high rate of speed near where Cst. Foster was standing. The appellant's mother had arrived and was walking around the highway. In the circumstances, there was good reason to halt the search of the SUV and arrange to have the vehicle towed so that the search could be continued in a safer location.

[68] Accordingly, the delay in completing the search of the SUV does not affect the seriousness of the Charter-infringing conduct.

The USB Key Evidence

[69] A USB key (also called a "flash drive") is a portable digital storage device. It can be used to transport files from one computer to another, for instance, from a home computer to a work computer. It can also be used to back up information from one's home or work computer.

[70] In R. v. Vu, 2013 SCC 60, [2013] 3 S.C.R. 657, at paras. 41-44, the Supreme Court of Canada reviewed the privacy considerations that apply to searches of personal computers. For the following reasons, in my view, many of the same privacy considerations are engaged in searches of USB keys.

[71] First, a USB key can store a significant amount of data. USB keys commonly hold anywhere from one to ten gigabytes of data, and USB keys with a storage capacity of over one terabyte exist. It seems likely that their storage capacities will only increase over time.

[72] Second, data can be left on a USB key without a user's knowledge. This data includes information about the date and time a file was created or modified and information about the user who created or modified that file.

[73] Third, a user does not have complete control over which files an investigator will be able to find on a USB key. Data can be salvaged from a USB key through forensic analysis even after a user has deleted or "saved over" it.

[74] It is true that a USB key is not a home computer or a cell phone. Thus, it may not always contain personal information, like a list of contacts, the contents of past communications, and information about an individual's web searching habits.

[75] On the other hand, however, a person's personal USB key arguably engages more serious privacy interests than a work computer. The two key reasons why individuals have a somewhat diminished reasonable expectation of privacy in a work computer are that a work computer is not actually owned by the employee who uses it, and the employee's use of the work computer is often subject to terms and conditions imposed by the employer: R. v. Cole, 2012 SCC 53, [2012] 3 S.C.R. 34, at paras. 49-52 and 92. Neither of these considerations apply to personal digital storage devices like USB keys.

[76] With this in mind, let us consider the trial judge's s. 24(2) ruling in respect of the USB key evidence.

[77] In respect of the first factor, namely, the seriousness of the Charter-infringing conduct, the trial judge noted that the Polius and Manley decisions were not rendered until after the USB key search had been conducted. Further, he noted the evidence showing that following the release of Polius, the Waterloo Regional Police Service adopted a policy of securing seized electronic devices and obtaining a search warrant prior to examining their contents. He concluded that rather than being insensitive to the requirements of the Charter, the Waterloo Regional Police Service was compliant with such requirements, once it was aware of them. He therefore found that the failure to obtain a search warrant before examining the contents of the USB key was not serious.

[78] I see no error in the trial judge's assessment of the first factor. I would simply add to the findings of the trial judge that in conducting the search, the police officers believed they were continuing a search incident to Cst. Foster's lawful arrest and that the then-existing case law permitted them to conduct the search.

[79] The appellant notes, however, that the search of the USB key continued for a week after the appellant's arrest, and submits that this delay shows that police were acting either negligently or in bad faith. He relies on Caslake for this submission, noting that Caslake directed that, absent a reasonable explanation, a search incident to arrest should be carried out in a reasonable time following arrest.

[80] The seven-day delay in the USB search was due to carrying out a forensic analysis of the USB key. The law with respect to how much of a delay is appropriate in carrying out a forensic analysis of items seized in a search incident to arrest remains unclear. In R. v. Backhouse (2005), 2005 CanLII 4937 (ON CA), 194 C.C.C. (3d) 1 (Ont. C.A.), this court declined to decide whether a delay of several months in carrying out forensic analysis of an accused's clothing (seized incident to arrest) violated s. 8 of the Charter, but concluded that the evidence obtained would be admissible under s. 24(2) in any event (para. 115). Trial and appellate courts in other provinces have divided on the appropriateness of various periods of delay in subjecting evidence obtained incident to arrest to forensic analysis: see, for example, R. v. Giles, 2007 BCSC 1147, at para. 57; and R. v. Hiscoe, 2013 NSCA 48, 297 C.C.C. (3d) 35, at para. 66.

[81] Given the still developing state of the law, I am not prepared to find that the police acted in bad faith or negligently based on the delay in completing the search of the USB key.

[82] I turn now to the second Grant factor, the impact on the appellant's Charter-protected interests. The trial judge found that the appellant had a low expectation of privacy because the USB key was carried in a coat pocket and the data on the key was not password protected. He concluded that the impact on his privacy interests was not significant.

[83] For the reasons already given, I have a different view of the appellant's privacy interests in the USB key. In my view, the impact of the search on those interests is significant.

[84] As the trial judge noted in relation to the third Grant factor, the evidence from the USB key is reliable. To this I would add that the evidence was very important to the Crown's case.

[85] After weighing each factor and balancing them, I arrive at the same conclusion as the trial judge: the societal interest in having these types of cases adjudicated on their merits outweighs the seriousness of the breaches. While there are two breaches in this case (searches of the SUV and the USB key) there is no cumulative impact as they are distinct in nature and, in both instances, the police acted in good faith.

Issue #3: Was it an error to convict the appellant under [s. 342(3)](https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-c-46/latest/rsc-1985-c-c-46.html) of the [Code](https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-c-46/latest/rsc-1985-c-c-46.html) for unauthorized possession of credit card data, when the credit cards were blocked and track data not present?

[86] Section 342(3) of the Code reads as follows:

Every person who, fraudulently and without colour of right, possesses, uses, traffics in or permits another person to use credit card data, including personal authentication information, whether or not the data is authentic, that would enable a person to use a credit card or to obtain the services that are provided by the issuer of a credit card to credit card holders is guilty of

(a) an indictable offence and is liable to imprisonment for a term not exceeding ten years; or

(b) an offence punishable on summary conviction. [Emphasis added.]

[87] The appellant does not dispute the findings that he was in possession of credit card data and that his possession was fraudulent and without colour of right. He submits, however, that credit card data can only "enable a person to use a credit card", within the meaning of s. 342(3), if the data is sufficient to ensure the successful use of a credit card. Accordingly, he says, he could not be convicted unless the Crown proved that all of the track data encoded on the cards found in his possession – including the routing data – matched data associated with valid accounts, and that the credit cards had not been blocked or cancelled. This the Crown failed to do and, he contends, the convictions must be set aside.

[88] I do not accept this submission. This court's decision in Kokoouline is a full answer to it.

[89] In Kokoouline, this court held that even where credit cards have been blocked, and could not be used successfully, a conviction under s. 342(3) could result. At para. 6 of Kokoouline, this court states, "the question of whether [credit] cards could be successfully used … is not relevant to the offence created by s. 342(3)". Thus, even if an account has been blocked or a card cancelled, a conviction under s. 342(3) can be made out. The same logic applies where the reason the data might not enable the successful use of a credit card is that the track data did not match that of a valid account.

[90] The wording of s. 342(3) makes this clear. It provides that the offence is made out "whether or not the data is authentic". Accordingly, an accused can be convicted whether or not the data in the accused's possession matches perfectly with genuine bank accounts.

[91] In any event, I would simply note that there was evidence of successful use for two of the three counts.

[92] Accordingly, the trial judge made no error in convicting the appellant under s. 342(3).

THE SENTENCE APPEAL

[93] The appellant was involved at a high level in a credit and debit card skimming operation, which involved obtaining credit card data fraudulently, manufacturing credit and debit cards, and distributing those credit and debit cards.

[94] The sentencing judge was fully alive to all of the relevant aspects of the appellant's situation, including that he had no previous criminal record. Contrary to the appellant's submission, the sentencing judge did not count the appellant's apparent lack of remorse as an aggravating factor; he was simply noting that the appellant could not rely on remorse as a mitigating factor.

[95] I see no error in the sentencing judge's finding that a conditional sentence would not adequately reflect the principles of denunciation and deterrence. Nor do I see any basis on which to interfere with the sentence that was imposed.

[96] This court has repeatedly stated that appellate deference is owed to a trial judge's sentencing decision. As explained in R. v. Ramage, 2010 ONCA 488, 257 C.C.C. (3d) 261, at para. 70:

Appellate deference to the trial judge's sentencing decision makes good sense. Sentencing is a fact-specific exercise of judicial discretion. It is anything but an exact science. In the vast majority of cases, there is no single sentence that is clearly preferable to all others. Instead, there is a range of reasonable options from which the trial judge must make his or her selection. … Absent the discipline of deference, sentence appeals would invite the appellate court to repeat the same exercise performed by the trial judge, with no realistic prospect that the appellate court would arrive at a more appropriate sentence. Appellate repetition of the exercise of judicial discretion by the trial judge, without any reason to think that the second effort will improve upon the results of the first, is a misuse of judicial resources. The exercise also delays the final resolution of the criminal process, without any countervailing benefit to the process.

[97] As the trial judge's sentencing reasons reflect no error in principle and the sentence he imposed was fit, there is no reason for this court to interfere with it.

[98] The appellant sought to introduce fresh evidence showing the steps that he has taken towards rehabilitation following sentencing. As already noted, the sentencing judge imposed a custodial sentence on the basis that a conditional sentence would not adequately reflect the principles of denunciation and deterrence. The proposed fresh evidence cannot reasonably be expected to have affected the sentence. Therefore, I would not admit it: see R. v. Levesque, 2000 SCC 47, [2000] 2 S.C.R. 487, at para. 35.

DISPOSITION

[99] Accordingly, I would dismiss the appeal against convictions, grant leave to appeal sentence, and dismiss the sentence appeal.

Released: July 17, 2014 ("E.E.G.")

"E.E. Gillese J.A."

"I agree. Paul Rouleau J.A."

"I agree. S.E. Pepall J.A."