Court of Appeal for Ontario

Citation: R. v. Cattral, 2015 ONCA 315 Date: 2015-05-07 Docket: C57957

Before: Strathy C.J.O., Doherty and Gillese JJ.A.

Between:

Her Majesty the Queen (Respondent)

and

Robert David Cattral (Appellant)

Counsel: Robert B. Carew, for the appellant Melissa Adams, for the respondent

Heard: April 13, 2015

On appeal from convictions entered on December 18, 2012, by Justice Diane M. Lahaie of the Ontario Court of Justice, with reasons reported at [2012] O.J. No. 6650.

Reasons for Decision

Doherty J.A.:

[1] This is a conviction appeal. The appellant also submits that if he is successful in quashing any of the convictions, his sentence should be reduced to reflect that success.

[2] The appellant faced 22 charges. The trial judge convicted on 11. Eight of the convictions involved allegations that the appellant had breached the terms of the bail on which he had been released pending his appeal from convictions registered in an earlier proceeding. I will refer to these as the breach charges. The other three convictions involved allegations that the appellant was in possession of materials or devices knowing that they had been used, were adapted to be used, or intended to be used in forging or falsifying credit cards: see Criminal Code, R.S.C. 1985, c. C-46, s. 342.01(1)(b). I will refer to these as the forgery-related charges.

[3] The appellant received a sentence of 18 months on each of the breach charges. The sentences were concurrent to each other and concurrent to the sentences imposed on the forgery-related charges. The trial judge imposed a sentence of 3½ years concurrent on each of those charges. The total sentence of 3½ years was made consecutive to the sentences being served by the appellant as a result of his convictions in the earlier proceeding.[^1]

[4] On this appeal, counsel submits that all but one of the convictions are unreasonable and unsupported by the evidence. Counsel also submits that the trial judge erred in holding that the appellant’s involvement in the criminal activity that had led to his earlier convictions was evidence of his knowledge or intent at the time he was found in possession of the devices and materials that are the subject of the three forgery-related charges. Counsel argues that the trial judge improperly used the evidence of the appellant’s prior discreditable conduct to conclude that he engaged in the conduct alleged in the forgery-related charges.

[5] For the following reasons, I would dismiss the appeal, except as it relates to count 4. I would allow the appeal on that charge, quash the conviction, and enter an acquittal. I would not vary the totality of the sentences imposed on the appellant.

The Breach Charges

[6] On six of the eight breach charges (counts 7, 10, 11, 13, 15 and 17), the appellant’s liability turned on whether he was in possession of the devices or materials referred to in each count. The appellant’s bail prohibited possession of those devices and materials. Counsel for the appellant submits that the convictions on these counts, with the exception of count 17, are unreasonable as on the evidence the trial judge could not properly conclude that the appellant was in possession of the devices and materials referred to in each count. The appellant does not challenge his conviction on count 17.

[7] Count 2 alleged that the appellant had breached his bail by continuing to operate, directly or indirectly, the business of Canadian Barcode. The appellant had used Canadian Barcode to operate the sophisticated, full-service credit card forgery business that had led to his convictions in the prior proceeding. His bail terms prohibited the appellant from operating that business directly or indirectly. The Crown alleged that the appellant had continued his operation of the Canadian Barcode business through a company called Buy-Clik Canada. The trial judge accepted this submission and convicted the appellant on count 2.

[8] The appellant argues that the trial judge’s finding that the business of Buy-Clik Canada was a continuation of the Canadian Barcode business was unreasonable, as was the finding that the appellant was in charge of the Buy-Clik Canada operation. Counsel for the appellant submits that on the evidence the appellant was only an employee at Buy-Clik Canada.

[9] Count 1, the other breach charge, alleged a failure to keep the peace. The appellant accepts that if he is convicted on any of the other charges, a conviction on count 1 must follow.

The Forgery-Related Charges

[10] Counts 3, 4 and 5 alleged possession of materials or devices that the appellant knew had been used, adapted for use, or were intended for use in forging or falsifying credit cards. The Crown had to prove, first, that the appellant was in possession of the devices or materials and, second, that the appellant had the state of mind required by the offence creating provision.

[11] The possession issue on the forgery-related counts was the same as the possession issue on the breach counts. The Crown alleged that the appellant was in possession of the devices and materials referred to in counts 3, 4 and 5 because they were found in various rooms at the Buy-Clik Canada business premises which, on the Crown’s theory, was controlled by the appellant.

[12] On the state of mind issue, the Crown relied on the evidence of the nature of the materials and devices, statements made by the appellant to the police, parts of the appellant’s testimony, an expert report prepared for the Crown and admitted on consent, and the appellant’s extensive involvement in the operation of Canadian Barcode. The Crown contended that the appellant had continued the Canadian Barcode business using Buy-Clik Canada and that the devices and materials found on the Buy-Clik Canada premises were intended to be used in forging or falsifying of credit cards just as similar devices and materials found on the Canadian Barcode premises had been used for those purposes.

[13] The trial judge found that evidence of the appellant’s conduct in the operation of the Canadian Barcode business was admissible to show that he knew that the materials and devices found on the Buy-Clik Canada business premises had been used, adapted for use, or were intended for use in forging or falsifying credit cards. The trial judge did indicate, however, that this evidence did not play a central role in her findings on counts 3, 4 and 5. The appellant submits that it should have played no role.

Was the Trial Judge’s Finding that the Appellant was in Possession of the Material Found on the Buy-Clik Canada Business Premises Unreasonable?

[14] The task of considering the reasonableness of the trial judge’s findings is made easier by her detailed review of the evidence. She examined the entirety of the evidence at some length, paying particular attention to the appellant’s evidence. The trial judge rejected the exculpatory parts of his evidence and gave cogent reasons for doing so.

[15] The trial judge found that the Buy-Clik Canada business, nominally operated by the appellant’s mother, was in reality a continuation of the business that the appellant had operated through Canadian Barcode. The evidence summarized by the trial judge offered firm support for that finding. The evidence included the following:

• Canadian Barcode’s inventory was taken over by Buy-Clik Canada; • the Canadian Barcode website automatically redirected clients to Buy-Clik Canada; and • Buy-Clik Canada sold some of the same material and equipment that Canadian Barcode had sold.

[16] Counsel for the appellant pointed to certain differences in the operations of the two corporate entities. Buy-Clik Canada does not appear to have had the same level of activity as Canadian Barcode, or to have offered all of the services offered by Canadian Barcode. Those differences do not, however, detract from the essential similarities between the two operations or render unreasonable the trial judge’s finding that the business of Buy-Clik Canada was a continuation of the Canadian Barcode business.

[17] The contention, based primarily on the appellant’s evidence, that his mother operated Buy-Clik Canada, is, to put it mildly, incredible and was rejected by the trial judge. The appellant was involved in the day-to-day operation of Buy-Clik Canada and had considerable expertise relevant to the operation of the business of Buy-Clik Canada. His mother’s expertise lay in entirely different business ventures. The appellant had an office on the Buy-Clik Canada premises and full access to all parts of the premises and anything stored there. The trial judge reasonably concluded that the appellant, by virtue of his operation of Buy-Clik Canada, was in possession of the relevant materials and devices found on the Buy-Clik Canada business premises.

[18] The trial judge’s findings that Buy-Clik Canada carried on the business of Canadian Barcode and that the appellant was in control of that business, were sufficient, taken together, to justify the further finding that the appellant was in possession of the devices and materials found on the Buy-Clik Canada business premises.

[19] The convictions on the breach charges were reasonable.

Were the Convictions on the Forgery-Related Charges Unreasonable?

[20] The trial judge’s finding that the appellant operated Buy-Clik Canada and was in possession of the devices and materials found at the Buy-Clik Canada business premises was sufficient to satisfy the possession element of the forgery charges in counts 3, 4 and 5. The appellant submits, however, that the evidence could not reasonably justify the finding that the appellant knew that the materials and devices referred to in counts 3, 4 and 5 had been used, were adapted for use, or intended for use in the forging or falsifying of credit cards.

[21] Count 3 alleged possession of “plastic cards with magnetic stripes”. Some 50,000 cards were found on the Buy-Clik Canada business premise. The cards could clearly be used in the forging or falsifying of credit cards. Counsel for the appellant submits, however, that the Crown failed to prove that the appellant knew they were intended for that use.

[22] The trial judge, in finding that the appellant had the necessary knowledge, relied not only on the nature of the material, but also on the central role played by the appellant in the Canadian Barcode criminal enterprise that had also involved the use of similar material to falsify and forge credit cards. The trial judge reasoned that the appellant’s activity in the Canadian Barcode operation was helpful in fixing him with knowledge as to the intended use of the plastic cards found on the Buy-Clik Canada business premises.

[23] I think the trial judge correctly held that she could infer from the appellant’s operation of Canadian Barcode that he knew of the intended use of the plastic cards found on the Buy-Clik Canada business premises. This inference does not engage in any form of improper propensity reasoning based on prior misconduct, but rather fixes the appellant with knowledge of the intended use of the cards found on the Buy-Clik Canada business premises by reference to the use to which the appellant put the same material when he was running the Canadian Barcode operation. Having regard to the trial judge’s finding that Buy-Clik Canada was simply a continuation of Canadian Barcode, the inference becomes compelling. I would not interfere with the conviction on count 3.

[24] The analysis on count 3 is equally applicable to count 5 which alleged possession of devices called card readers, knowing they had been used, adapted for use, or were intended for use in forging or falsifying credit cards. I would dismiss the appeal on this count.

[25] The appellant’s argument on count 4 is somewhat different. Counsel submits that there was no evidence that the card printers, that were the subject of count 4, had been used or could be adapted for use in the forging or falsifying of credit cards. Counsel contends that, absent evidence that the devices were used in the forging or falsifying of credit cards or could be adapted for that purpose, it was unreasonable to infer that the appellant knew that the card printers were intended to be used in the forgery or falsification of credit cards.

[26] As I understand the evidence, the card printers could be used in forging or falsifying credit cards if those card printers had some form of encoding capability. The report filed by the Crown expert indicated that when the expert examined the card printers seized from the Buy-Clik Canada premises, those printers did not have encoding capabilities. The report went on to state that there was a possibility that the printers could be adapted for encoding purposes, but the expert could not say whether the necessary adaptation would have to have been made at the time the printer was manufactured or could be made at some later time. Information provided by the manufacturer and seized with the card printers referred to “encoding options”, but provided no further explanation or details.

[27] The appellant was examined and cross-examined at some length. He was not asked about the potential use of the card printers, or whether encoding options could be installed on the devices found on the Buy-Clik Canada business premises.

[28] In her reasons, the trial judge did not distinguish among the devices or materials referred to in counts 3, 4 and 5. She did not give separate consideration to the ability to use or adapt the card printers for use in the forgery or falsifying of credit cards. From my reading of the trial record, it does not appear that the precise argument made on appeal was made before the trial judge.

[29] In her reasons, the trial judge twice referred to the appellant acknowledging that “the devices seized are suitable for use in credit card forgery” (paras. 12, 25). In oral argument, counsel for the appellant submitted that no such concession was made insofar as the card printers were concerned. I accept that representation.

[30] The Crown correctly observes that the crime created by s. 342.01(1) does not require that the Crown prove that the card printers could actually be used or adapted for use in the forgery or falsification of credit cards. Liability under the section is established if the Crown proves either that the appellant intended to use the devices to forge or falsify credit cards, or knew that the persons to whom he sold the devices intended to use them for that purpose, even if the devices did not have that capability.

[31] This argument is difficult to resolve in that the evidence at trial was not directed squarely at the issue now raised. The nature of the appellant’s prior business activities with Canadian Barcode, his extraordinary computer-related expertise, and the potential for installing card encoding capabilities into the card printers, lend credence to the claim that the appellant had those devices, knowing that they were intended for use in the forgery or falsification of credit cards.

[32] In the end, however, I do not think the conviction on count 4 can stand. There is no evidence that the card printers, as seized, could be changed to create encoding capability. The Crown expert could not say whether the devices could be altered in some way to give them encoding capability. His report did, however, clearly indicate that the printers, as found, did not have that capability. Nor did the expert’s report shed any light on the “encoding options” referred to in the manufacturer’s material.

[33] The Crown did not allege that the operation of Buy-Clik Canada was devoted exclusively to criminal activity or to the falsification and forgery of credit cards. Like Canadian Barcode, Buy-Clik Canada had some legitimate business. Presumably, some of the materials and devices found on the Buy-Clik Canada premises were relevant to the legitimate aspects of its business. Absent evidence that the card printers as found could be altered to give them encoding capabilities, I think it was unreasonable to infer that the appellant knew that the card printers were intended for use in the forgery or falsification of credit cards. I would quash the conviction on count 4 and enter an acquittal.

Should the Sentence be Varied?

[34] The trial judge imposed concurrent 3½ year sentences on each of the three forgery-related charges. The quashing of the conviction on count 4 has no impact on the total sentence imposed by the trial judge. Counsel for the appellant submits that the total sentence should be adjusted downward to reflect the conviction on count 4. He argues that if a total sentence of 3½ years was appropriate for three forgery-related convictions, a sentence of something less than 3½ years must be appropriate for two forgery-related convictions.

[35] The logic of the appellant’s submission is undeniable and, in many cases, would carry the day. However, I would not give effect to the argument here.

[36] The trial judge, in her sentencing reasons, described the appellant’s business operation as “a sophisticated, elaborate operation”, involving extensive planning and deliberation. That assessment is unaffected by the quashing of one of the convictions.

[37] The trial judge referred to the appellant’s extensive criminal record ranging over 20 years and including many crimes of dishonesty and disobedience of court orders. The trial judge also emphasized that the appellant committed these offences while on bail pending appeal from convictions for very similar crimes. The trial judge’s observations, which show the obvious need for specific deterrence, are in no way mitigated by the quashing of the conviction on count 4.

[38] The heart of the trial judge’s reasons for sentence is found in this passage:

On the issue of specific deterrence, Mr. Cattral, the court found that you are moved by an overwhelming drive to find a way to outsmart the credit card industry, as you testified, and the challenges to be overcome. You become animated and excited by your accomplishments, as you describe them at your trial. Clearly, the pleasure you derive from your involvement in this activity outweighs the pain you feel as everything around you is taken away, including your liberty. In my view, you will not be deterred by the sentence imposed by this court or any other court. Any changes in your behaviour will have to come from within. You will have to come to a realization on your own, perhaps with the assistance of counselling that you invite, borne of a willingness to change, that your life could be fulfilling when you contribute to your personal balance sheet, to the happiness of your family, and when you contribute to society at large in a pro-social fashion. That change can come only from you. [Emphasis added.]

[39] The appellant has apparently decided to dedicate himself to a life of dishonesty and crime. At present, the appellant’s removal from the community seems the only way to protect the community from the appellant. The need for that protection drove the sentencing process at trial and should continue to do so even though one of the convictions will be quashed. The global sentence of 3 ½ years remains fit.

[40] I would not interfere with the sentence on the counts on which the convictions have been upheld. The totality of the sentences remains the same.

Conclusion

[41] I would quash the conviction on count 4 and enter an acquittal. I would dismiss the appeals from the convictions on the other charges. I would not vary the sentences imposed on those charges.

Released: “GRS” “MAY 07 2015”

“Doherty J.A.”

“I agree G.R. Strathy C.J.O.”

“I agree Eileen E. Gillese J.A.”

[^1]: The appeals from those convictions and sentences were dismissed on April 17, 2015: see R. v. Beauchamp, 2015 ONCA 260.