Supreme Court of Canada
Lowden v. The Queen, [1982] 2 S.C.R. 60
Ronald Henry Lowden Appellant;
and
Her Majesty The Queen Respondent.
1982: February 9; 1982: August 9.
Present: Laskin C.J. and Martland, Ritchie, Dickson, Beetz, Estey, McIntyre, Chouinard and Lamer JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ALBERTA
Criminal law—Theft—Travel agency received funds for airline tickets—Airline not paid and customers without ticket or refund—Whether or not theft of monies paid under direction.
Courts—Supreme Court of Canada—Jurisdiction—Jurisdiction restricted to questions of law—Appeal as of right from court of appeal judgment with dissent—Whether or not dissenting opinion based on question of law or of fact—Criminal Code, R.S.C. 1970, c. C-34, ss. 283, 290, 292, 294, 618.
Appellant appeals as of right from a judgment of the Alberta Court of Appeal upholding convictions of theft, Moir J.A. dissenting. Clients of a travel agency—appellant was its president and principal shareholder—booked tours through and made payment to the agency. The clients did not receive their tickets. Only a portion of the amount paid the agency had in turn been paid to the tour operator. The trial judge predicated the finding of theft under s. 283 of the Code and the majority of the Court of Appeal under ss. 283, 290 and 292; the dissenting judge was of the opinion that the convictions could not be supported by these sections.
Held: The appeal should be dismissed.
As the appellant came to the Court as of right under s. 618(1)(a) and since a finding of theft under any one of ss. 283, 290 and 292 is sufficient for a conviction, the appeal must be dismissed in the absence of a dissent on a question of law with respect to any one of those sections. The dissent with the Court of Appeal’s finding of theft under s. 292 was not a disagreement on a question of law but on one of fact. The difference of opinions was as to whether there was evidence that the funds were advanced “with the express instruction to acquire on behalf of [the] customer[s] a specified com-
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modity or service” and whether there was evidence that appellant knew that he was applying money for purposes contrary to his clients’ directions. There was evidence on which a finding of direction could be reasonably made.
The convictions under s. 292 were not the result of an error of law. While expectations standing alone do not amount to a direction, expectations known to the recipient of money as a result of “express instructions” are directions.
R. v. Hall, [1972] 2 All E.R. 1009; R. v. Geddes (1979), 52 C.C.C. (2d) 231, referred to.
APPEAL from a judgment of the Alberta Court of Appeal (1981), 1981 ABCA 79, 15 C.C.C. (2d) 1, 15 Alta. L.R. (2d) 250, 27 A.R. 91, upholding convictions for theft pronounced by Feehan P.C.J. Appeal dismissed.
T.C. Semenuk, for the appellant.
D. McDonald, for the respondent.
The judgment of the Court was delivered by
LAMER J.—Appellant was convicted of eight counts of theft by a District Court Judge in Calgary. His convictions were upheld by the Alberta Court of Appeal, Moir J.A. dissenting.
THE FACTS
The eight convictions of the appellant, a travel agent, for theft, were each in respect of money valued at more than $200, the property of eight named persons who were all clients of a travel agency.
The appellant was the principal shareholder and president of that travel agency, R.B. & C. Agencies Limited. The following statement of the relevant facts by McGillivray C.J.A. is not in dispute.
The company was incorporated in May of 1970 and functioned as a travel agency until about the middle of June, 1978. The other shareholders were the Appellant’s wife and his daughter. The business was operated from rented premises by an office manager, a bookkeeper and Mrs. Lowden, who was an assistant to the bookkeeper. The Appellant did the banking on behalf of the company
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and had signing authority to issue cheques on the company’s accounts.
The company operated three bank accounts—a trust account, a general account and a U.S. account. The so-called trust account was reserved for the purpose of receiving and paying out money for airline tickets. The so-called general account was used for the purpose of paying out moneys for tours, rent-a-car arrangements and hotel reservations, and the U.S. account was reserved for the purpose of receiving and paying out moneys in U.S. funds.
It is clear that the accounts, and in particular the trust account, were not designed for the specific purpose of separating moneys belonging to the company from moneys belonging to customers. As was mentioned, the company operated for a period of approximately eight years. It is to the accused’s credit that while considerable volumes of business were done, increasing each year, at no time before June of 1978 did any of the agency’s customers fail to get tickets or reservations which they had paid for. In 1975, sales amounted to nearly $300,000.00; this increased the next year to $597,000.00 and in 1977 to $841,000.00. The company books were at all times currently kept up and were meticulously accurate.
Evidence relating to financial reports showed that in 1975 the company lost close to $12,000.00; in 1976 close to $22,000.00; and in 1977, something over $23,000.00. In 1976 the Appellant had an outstanding shareholder’s loan to the company of $47,000.00 odd. By 1978, that loan had increased to $77,000.00. Part of that shareholder’s loan was secured by a second mortgage against the Appellant’s house.
In 1978 the Appellant arranged for overdraft privileges at his bank of up to $10,000.00, but these privileges were cancelled when the company began being overdrawn and not having the money the next day to cover the overdrafts.
A bank account reconciliation by the company’s bookkeeper showed that as of January 20, 1978, cheques written on the general account exceeded deposits by $11,669.50. The trust account was similarly overdrawn by $2,233.26, and the U.S. account by $1,037.85. A later reconciliation indicated that as of February 22, 1978, the general account was overdrawn by $11,796.28, and the U.S. account by $1,405.88, while in the trust account there remained a positive balance of $2,432.83.
After the February reconciliation the appellant directed that these monthly reports cease; he was more
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interested in the amount of funds on deposit from day to day at the bank than in the total overdraft picture.
From May until approximately the middle of June, the company was in a very difficult financial position, with a great deal of pressure for payment from every side.
It further appears that from February 1978 on, by which time the accounts were generally in an overdraft position, (that is, there were more cheques outstanding than there was money in the accounts), that the Appellant determined which cheques of those outstanding, the bank should honour. Loretta Ann McMillan, an employee of the Bank of Nova Scotia gave this evidence:
Q. All right, and were there other cheques in the group that went in with the $2,000 cheque?
A. Yes, there was.
Q. What happened to those other cheques?
A. The $404 which made up the other cheques in the group were returned.
Q. For what reason?
A. Non-sufficient funds.
Q. Can you tell me why the $2,000 would go through and the other cheques totalling $404 would not go through?
A. Well, when R.B. & C. Travel Agencies account was overdrawn, the next morning when Mr. Lowden came in he would put in enough money to cover certain cheques and they were the ones that got paid and the rest were returned.
Q. Who would decide which cheques would be paid and which ones would be returned? A. Mr. Lowden did.
Q. Can you tell us when N.S.F. cheques were started in 1978 with respect to the statements of account?
A. In February.
Q. And did they continue from that time on?
A. Yes, they did.
The cheque, exhibit 38, referred to in McMillan’s evidence, was dated June 13, 1978. It was for $2,000.00 and the payee was the Appellant. It was cashed by the bank rather than other cheques, on the direction of the Appellant. The proceeds were handed to the Appellant in cash.
The eight counts before the Court arise out of similar circumstances: It will be sufficient for illustration pur-
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poses to review the facts which gave rise to Counts #1,2 and 3. These counts relate to the Perrys’.
On January 27th, 1978, Noreen Perry attended at the offices of R.B. & C. Agencies Limited and booked a European tour for herself and her husband, with a departure date of July 29th, 1978. She deposited $100.00. On February 2nd she returned and booked two tours for her son and daughter, paying a $200.00 deposit. Those deposits were duly paid by R.B. & C. Agencies Limited to hold the reservations. Later, the daughter sent to Mrs. Perry a cheque dated May 15, 1978 in the sum of $1,044.00. Mrs. Perry turned that over to the agency on May 24th, 1978. The cheque, payable to Mrs. Perry although, apparently not endorsed, was deposited to the company’s bank account on May 25th, 1978. Mrs. Perry’s son sent her a bank draft which was turned over to the company on May 25th, 1978. It appears that the proceeds of this draft also went into the company’s bank account. Finally, Mrs. Perry turned over to the company her own cheque for $266.00 and her husband’s cheque in the amount of $260.00. Her cheque was dated June 9th and her husband’s cheque was dated June 7th. They were both deposited to the company’s account on June 12th, 1978.
It appears that cheques were drawn on behalf of the company to cover the payments entitled to be made on behalf of the Perrys’, but the cheques were never signed.
At the end of June, 1978, Mrs. Perry returned to the offices of R.B. & C. Agencies Limited to pick up the tickets, only to find the premises closed. She and her husband never took their tour. The $100.00 deposit was transferred to the credit of the son’s and daughter’s tour. The balance owing on the latter tours—the sum of $1,980.00 was paid by the Perrys’ directly to the tour operator. The operator’s representative testified at trial that only the $300.00 in deposits was ever received from the appellant’s agency.
As I have mentioned above, the circumstances leading up to the other five counts were similar, each involving a payment to the company in May or June of 1978 for travel arrangements, be they transportation or accommodation or both, and a deposit by the Appellant to the company’s bank account. In all cases the arrangements were not made by R.B. & C., and the complainant either had to pay the operator directly, or to forego his travel plans. All complainants were reimbursed by the Appellant after the preliminary inquiry in this matter.
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Appellant comes to this Court as of right under s. 618(1)(a) of the Criminal Code.
- (1) A person who is convicted of an indictable offence and whose conviction is affirmed by the court of appeal may appeal to the Supreme Court of Canada;
(a) on any question of law on which a judge of the court of appeal dissents, or
Theft is an indictable offence by virtue of s. 294 of the Criminal Code.
- Except where otherwise provided by law, every one who commits theft
(a) is guilty of an indictable offence and is liable to imprisonment for ten years, where the property stolen is a testamentary instrument or where the value of what is stolen exceeds two hundred dollars; or
(b) is guilty
(i) of an indictable offence and is liable to imprisonment for two years, or
(ii) of an offence punishable on summary conviction,
where the value of what is stolen does not exceed two hundred dollars.
There are various ways of committing theft, three of which are found at ss. 283, 290 and 292 of the Code.
The indictment referred only to the unlawful stealing of money under s. 294(a) and did not specify upon which substantive definitional section or sections the Crown predicated its allegation of “unlawful stealing”.
The trial judge predicated his finding of theft under s. 283 of the Code.
McGillivray C.J.A. and Brennan J. (ad hoc) of the Court of Appeal upheld the convictions, but found theft by the appellant also under ss. 290 and 292 of the Code. Moir J.A., dissenting, was of the view that the convictions could not stand on any of these three sections, and one can reasonably assume, as implicit in his conclusion that an acquittal should be entered, that he was of the view that the requirements of no other theft section of the Code had been satisfied.
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Two observations must then be made before considering the facts giving rise to the prosecution and the judgments below.
First, in determining whether the accused was properly convicted, this Court can only consider and determine, for the purpose of giving corrective effect if error is found, questions of law on which Moir J.A. dissented. In the absence of any such dissent, the appeal will be quashed as the Court would be without jurisdiction, there being no question of law upon which to rest the right of appeal.
Secondly, as it is sufficient for a conviction to be entered that theft be found under any one of the definitional theft sections in the Code, the appeal will be dismissed if, as regards the application of any one of those sections, this Court finds no dissent on a question of law.
Though I find dissent on a question of law by Moir J.A. as regards ss. 283 and 290, I would nevertheless dismiss this appeal, as I am of the view that Moir J.A.’s disagreement with the Court of Appeal’s finding of theft under s. 292 of the Code was not a disagreement on a question of law, but one on a question of fact.
We, therefore, need not consider this appeal as regards ss. 283 and 290, and I shall limit reference to the pronouncements below and the findings of facts to those related to the alleged error of law the object of Moir J.A.’s alleged dissent as regards s. 292, which appellant reformulated at the hearing before this Court as follows:
With respect to s. 292 of the Criminal Code—Did the Court of Appeal of Alberta err in law in holding that there need not be any “specific direction”, either orally or in writing, by the person paying the money (i.e. customer) to the person receiving it (i.e. Appellant) as to the purpose for which the money is to be used?
Section 292 reads:
- (1) Every one commits theft who, having received, either solely or jointly with another person, money or valuable security or a power of attorney for
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the sale of real or personal property, with a direction that the money or a part of it, or the proceeds of a part of the proceeds of the security or the property shall be applied to a purpose or paid to a person specified in the direction, fraudulently and contrary to the direction applies to any other purpose or pays to any other person the money or proceeds or any part of it.
(2) This section does not apply where a person who receives anything mentioned in subsection (1) and the person from whom he receives it deal with each other on such terms that all money paid to the former would, in the absence of any such direction, be properly treated as an item in a debtor and creditor account between them, unless the direction is in writing.
We need not consider subs. 2 as it is common ground that Moir J.A. did not dissent in law but that he found that it had no application to the present case.
A reading of Moir J.A.’s opinion might, at first sight, suggest that he disagrees with the majority on a question of law. However, with respect, the disagreement in law that appellant alleges would, in any event be the result of a wrongful assessment by Moir J.A. of what the majority found as a matter of fact. Moir J.A. very clearly and accurately sets out the law under s. 292 as follows:
I think I should explain how I see s. 292 operating. If, in the circumstances of the case, there is a debtor-creditor relationship between the parties to a transaction, before there can be a conviction the direction must be in writing. If there is no debtor-creditor relationship, it is incumbent upon the Crown to prove a direction. That direction must be proven beyond a reasonable doubt.
In this case it is said that as between the travel agency and the customer there is not a debtor-creditor relationship. That does not do away with the need of a direction, it only does away with the direction being in writing. Section 292 requires a direction as the words state “a direction that the money or a part of it… be applied to a purpose or paid to a person specified in the direction”.
The conclusion that I have reached is fully supported by the judgment of the Court of Appeal of Ontario in R. v. Brown (1956) 1956 CanLII 516 (ON CA), 116 C.C.C. 112 and by numerous other Canadian cases.
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In my respectful opinion to rely upon s. 292 of the Criminal Code it must be shown in the evidence that there was a direction to the agency to keep the money and to pay it only for the purpose set out in the direction. There is no such evidence and the Crown’s case fails for lack of proof of the required direction.
Speaking of the customers of the agency, he had previously mentioned that:
In this case it is said that the customers of the travel agency expected that the money would be used to buy tickets and for no other purpose. There is nothing in the evidence to support any such agreement or direction between the appellant and the customers. It is a conclusion said to be implicit in the relationship.
It is apparent that it is necessary to find … a direction under s. 292 for the section to apply. The expectations of the customers are irrelevant. The money must have been paid on a direction and accepted on that direction for the accused to be criminally responsible. It is a question of contract or direction and not of expectation.
With Moir J.A.’s reading of the law, I agree.
With respect, I cannot, however, agree that there is no evidence upon which a finding of the existence of a direction could have been made, nor can I agree that the expectations of the customers are irrelevant, though I should add that expectations, standing alone, do not amount to a direction.
Moir J.A. was of the view that the majority had found that the customers’ expectations, when considering what was implicit in their relations with the agency, were sufficient to involve the existence of a “direction” such as that contemplated under s. 292. Had that been the Court’s finding I should agree with Moir J.A. that mere “expectations” on the part of persons, in the absence of proof of knowledge as to those expectations by the recipient of the things and of the recipient’s knowledge of the understanding that the remittance of the things was solely for the fulfilment of those expectations cannot, as a matter of law, constitute “a direction”; such a finding by the Court of Appeal would have been an error in law upon which he
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had dissented. But, as I said, such is not the case. McGillivray C.J.A. and Brennan J. (ad hoc) concurring had said:
To my mind, the paying of money to a travel agency for a particular trip on a particular date with a carrier flying regularly, or the payment of money for a particular reservation with a particular hotel for a particular period, creates more than a simple debtor and creditor relationship. To my mind, it is implicit that the agent is either expected to get the ticket or to return the money. In my view it is not a case that if an airline flight was cancelled, the agent would be liable in damages. It seems clear to me that the public would understand that the agent was going to use the money to make the booking. If the flight was cancelled, it would not be the responsibility of the agent. It would have done its full duty to the client, and it would be expected that the money would be returned by the airline. [My underlining]
The Chief Justice, when referring to what was “implicit”, was dealing with the fact that there was more than just a debtor-creditor relationship. He was in no way suggesting that what the client expected as implicit in the relationship constituted “a direction”. In support of his finding the existence of a direction one must not overlook, in addition to the finding of those expectations, findings that, as a matter of fact, appellant had been given and had “accepted” the money for the clear purpose of satisfying those expectations, his having full knowledge of those expectations, they having been conveyed to him “express[ly]”, and that through his conduct he dealt with the money in such a manner as to defeat the purpose.
Witness the following passages of the Chief Justice’s opinion. Commenting on the facts in R. v. Hall, [1972] 2 All E.R. 1009, he said:
This is not, in my view, the same as accepting money for the purpose of obtaining a ticket on a scheduled airline flight on a particular day and at a particular time, which is what occurred in the case at bar. [My underlining]
And comparing the facts in R. v. Geddes (1979), 52 C.C.C. (2d) 231, to those of the case at bar, he said:
… they are both cases of a customer advancing funds to a businessman with the express instruction to acquire,
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on behalf of that customer, a specified commodity or service. [My underlining]
It is upon those findings of fact, coupled to that of the “expectations” that McGillivray C.J.A. then concluded that:
With regard to Section 292, it is clear to me that when the customer paid his money for tickets, this was tantamount to a direction that the money be applied to a purpose or paid to a person specified in the direction. Again the appellant did not carry out that mandate. Subsection (2) of Section 292, a saving section, has in my opinion, no application. [My underlining]
And finally,
On this evidence, it is clear that the Appellant knew he was applying money for purposes contrary to his clients’ directions. [My underlining]
In my respectful view the differences of opinion between Moir J.A. and the majority were as to whether there was evidence that the funds were advanced “with the express instruction to acquire on behalf of [the] customer[s] a specified commodity or service” and whether there was evidence whether “appellant knew he was applying money for purposes contrary to his clients’ directions”; those are not, though they may appear to be so, disagreements on a question of law, except to the extent one could say that Moir J.A. was of the view that, as a matter of law, there was no evidence whatsoever upon which to predicate such a finding. I do not think that that was his position but, if such were the case, I could not agree. A reading of the record satisfies me that there was some evidence upon which the finding of the existence of a direction could reasonably be made.
As I would not, however, want it to be thought that the convictions under s. 292 were the result of an error of law and are left undisturbed in this Court solely because the absence of a dissent on that question of law (the prerequisite appellant chose to meet when coming to this Court through s. 618(1)(a)) left the matter beyond our reach, I should like to add the following: had leave been asked and granted, even at large, I would have been of the view that the majority of the Court of
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Appeal committed no error of law as regards what is a direction under s. 292.
Expectations, standing alone, are not directions, but when known by the recipient of the money (or thing), they may, given the proper setting, be “tantamount to a direction”. Expectations known to the recipient of the money as a result of “express instructions”, as was found in the Court of Appeal, are directions. It is not, in my view, necessary that the recipient be further told expressly what not to do with the money for the direction to exist, or again what to do with the money if the expectations cannot be met; this may, as found by the Court of Appeal, be implicit as a result of the nature of the relationship.
The appeal should be dismissed.
Appeal dismissed.
Solicitors for the appellant: MacPherson & Associates, Calgary.
Solicitor for the respondent: P.J. McIntyre, Calgary.
