Supreme Court of Canada

Hammerling v. The Queen, [1982] 2 S.C.R. 905

Date: 1982-12-21

Anthony Thomas Hammerling Appellant;

and

Her Majesty The Queen Respondent.

File No.: 16634.

1982: October 5; 1982: December 21.

Present: Laskin C.J. and Beetz, Estey, Mclntyre, Chouinard, Lamer and Wilson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR MANITOBA

Criminal law—Theft—Criminal breach of trust—Misuse of trust funds.

The appellant, a lawyer, was charged with nine counts of criminal breach of trust and nine counts of theft. He was convicted on seven counts of theft and acquitted on the remainder, including all the counts of criminal breach of trust. The appellant appealed his conviction and sentence on the theft charges and the Crown appealed his acquittal on the criminal breach of trust charges. The Manitoba Court of Appeal allowed the appellant’s appeal from his conviction on the charges of theft and ordered the entry of an acquittal on those counts and on the same day allowed the Crown’s appeal against the verdict of acquittal on the charges relating to the criminal breach of trust and ordered that the acquittal be set aside and that convictions be entered on the charges of criminal breach of trust.

Held (Mclntyre and Wilson JJ. dissenting): The appeal should de dismissed.

Per Laskin C.J. and Estey J.: The Manitoba Court of Appeal correctly concluded that the trial judge erred in law in acquitting the accused of criminal breach of trust. The Crown was entitled to appeal to the Court to have the judgment below reviewed.

Per Beetz and Chouinard JJ.: We agree with the conclusion reached by the Chief Justice that this appeal must be dismissed.

Per Lamer J.: For the future, whenever a court is of the view that the principle laid down in Kienapple v. The Queen, 1974 CanLII 14 (SCC), [1975] 1 S.C.R. 729, should be applied, the court should enter a stay of proceedings instead of entering the acquittal.

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Per Mclntyre and Wilson JJ., dissenting: The Court of Appeal had no jurisdiction to consider the Crown’s cross-appeal on the criminal breach of trust charges since any error the trial judge might have made was one of fact and not of law. The Court of Appeal’s decision in allowing the appellant’s appeal on the theft charges and the Crown’s cross-appeal on the criminal breach of trust charges was based in part on the Kienapple principle—one of no application if the appeal on the criminal breach of trust charges is allowed. The theft charges should therefore be remitted to the Court of Appeal for a hearing and determination on the merits.

[R. v. Olan et al., 1978 CanLII 9 (SCC), [1978] 2 S.C.R. 1175; Kienapple v. The Queen, 1974 CanLII 14 (SCC), [1975] 1 S.C.R. 729, referred to.]

APPEAL from the judgment of the Manitoba Court of Appeal, May 12, 1979, reversing a judgment of the County Court. Appeal dismissed, Mclntyre and Wilson JJ. dissenting.

John Sinclair, for the appellant.

John Montgomery, Q.C., and E.P. Schachter, for the respondent.

The judgment of Laskin C.J. and Estey J. was delivered by

THE CHIEF JUSTICE—I am of the opinion that the Manitoba Court of Appeal was correct in concluding that the trial judge had erred in law in acquitting the accused on his findings that there was no criminal breach of trust. Having regard to his findings, he should have found the accused guilty. The Crown was therefore entitled to take an appeal to the Manitoba Court of Appeal and to have the judgment below reviewed. The Court of Appeal found that there was a sufficient element of deprivation on proof of risk of prejudice to the economic interests of the clients of the accused, according to the principle expressed in R. v. Olan et al., 1978 CanLII 9 (SCC), [1978] 2 S.C.R. 1175. I would not interfere with that view. Accordingly the appeal fails and must be dismissed.

The following are the reasons delivered by

BEETZ J.—I agree with the conclusion of the Chief Justice that this appeal should be dismissed.

[Page 907]

The reasons of Mclntyre and Wilson JJ. were delivered by

MCINTYRE J. (dissenting)—The appellant, a Winnipeg lawyer, was charged in one information sworn on December 15, 1977 with nine counts of criminal breach of trust and nine counts of theft. He was committed for trial on preliminary hearing and went to trial on October 10, 1978 in the County Court judge’s criminal court for the Eastern Judicial District of Manitoba. He pleaded not guilty to all counts and after a twenty-three day trial he was convicted on seven of the theft counts and acquitted on the remainder, including all the counts of criminal breach of trust. He was sentenced to thirty months’ imprisonment.

The appellant appealed his conviction and sentence on the theft charges, and the Crown appealed his acquittal on the criminal breach of trust charges. The Manitoba Court of Appeal on May 12, 1981 heard both appeals, allowed the appellant’s appeal from his conviction on the charges of theft and ordered the entry of an acquittal on those counts and set aside the sentence. On the same day it allowed the Crown’s appeal against the verdicts of acquittal on the charges relating to criminal breach of trust and ordered that the acquittals be set aside, that convictions be entered on the charges of criminal breach of trust, and imposed a sentence of thirty months’ imprisonment.

In dismissing the breach of trust charges, the trial judge reviewed certain cases which had been cited in argument and recognized, as Dickson J. said in R. v. Olan et al., 1978 CanLII 9 (SCC), [1978] 2 S.C.R. 1175, that the element of deprivation involved in breach of trust is satisfied on proof of detriment, prejudice, or risk of prejudice to the economic interests of the victim. He then commented that:

It is not essential that there be actual economic loss as the outcome of fraud.

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He referred also to another decision: R. v. J.W.D. (1932), 38 R. de J. 481, for the proposition that “the mere fact that the cestuis que trust are not in fact deprived of any rights or property does not affect the position if in fact the accused has misappropriated trust property with intent to defraud them”. Section 296, he noted, required proof of an intent to defraud. After referring to the history of the appellant’s dealing with clients’ funds and having found that he “followed a pattern of using one client’s funds sometimes to pay another”, he said:

Having established this pattern, I find it difficult to make a decision that the intent to defraud on these facts is proved beyond a reasonable doubt. On all counts I am dismissing the charge under 296 of intent to defraud … of criminal breach of trust.

In my view, the trial judge dismissed the fraud charges because he was not satisfied on the element of ‘intent to defraud’ required for a conviction under s. 296 of the Criminal Code. The Crown’s appeal was taken pursuant to s. 605 of the Code and was limited, therefore, to a question of law alone. The Crown in its notice of appeal endeavoured to place the matter upon two questions of law in these terms:

1. That the learned trial Judge erred in law in holding that the intent to defraud in a criminal breach of trust is founded upon intent to repay, and not upon the intent to breach the terms of the trust;

2. That the learned trial Judge erred in law in that, having made the findings of fact that he did, he failed to infer from those findings the intent to defraud in the offence of a criminal breach of trust.

With the utmost deference to counsel for the Crown, who framed these grounds, and to the Court of Appeal, which gave them effect, I am unable to read the reasons of the trial judge so that effect could be given to those grounds as questions of law. The trial judge’s reasons indicate that he correctly appreciated the nature of the offence of criminal breach of trust and that he did not base his decision on any error in that respect. Any error

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he may have made in dismissing the charges because of the absence of an intent to defraud was one of fact, not law, and there was no jurisdiction in the Court of Appeal to hear the Crown’s appeal.

The theft charges were laid under s. 283 of the Criminal Code. In convicting on them the trial judge said:

It would seem to me that in the facts of this case Mr. Hammerling acted deliberately, he knew the owner of the property, he knew he had no right to use it and as I find, he didn’t have the funds, even on his own evidence, he didn’t have the funds to meet the obligations respectively at the time. I can only conclude therefore, the offence of theft has been committed by the accused on counts 4, 6, 8, 10, 12 and 18.

The appellant’s appeal to the Manitoba Court of Appeal on the theft charges was taken under the provisions of s. 603 of the Criminal Code and was, therefore, properly before the Court of Appeal which had jurisdiction to hear it. The Court of Appeal allowed the appeals against conviction and in doing so Freedman C.J.M. said:

Although we have found both criminal breach of trust and theft, we are all of the view that this is a case for the application of the Kienapple principle, namely that there should not be double convictions or double penalties for offences based on the same facts.

Accordingly, we would allow the Crown’s cross-appeal relating to the criminal breach of trust charges. The accused’s appeal against conviction on the theft charges, although not entitled to succeed on the merits, is allowed by the operation of the Kienapple principle. In the result convictions will be entered only on the criminal breach of trust counts involved in the cross-appeal.

The result must be then that the Court of Appeal’s allowance of the Crown’s appeal against the acquittals at trial on the criminal breach of trust charges must be set aside for lack of jurisdiction and the acquittals restored. The appellant’s appeal against the theft convictions was allowed by

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the Court of Appeal, but the allowance appears to have been based, at least in part, on the application of the Kienapple principle. Kienapple has no application if the appellant’s appeal on the criminal breach of trust charges is allowed. No appeal to this Court was taken in respect of them and this Court is therefore in no position to deal with them on the merits. I would accordingly remit the theft charges to the Court of Appeal for a hearing, if necessary, and a determination of the appellant’s appeal to that court on the merits.

The following are the reasons delivered by

CHOUINARD J.—I agree with the conclusion of the Chief Justice that this appeal must be dismissed.

The following are the reasons delivered by

LAMER J.—I agree with the Chief Justice, for the reasons given by him, that this appeal fails and must be dismissed.

I am also of the view that, for the purpose of disposing of this case, had we allowed this appeal, the interest of justice would then best be served by, proceeding as suggested by our brother Mclntyre, that is by remitting the theft charges to the Manitoba Court of Appeal for a hearing and determination of the appellant’s appeal to that Court on the merits.

But, as regards the future, this Court’s decision in Kienapple v. The Queen, 1974 CanLII 14 (SCC), [1975] 1 S.C.R. 729, should be reconsidered and modified to the following extent: whenever a court is of the view that the principles laid down in Kienapple should be applied, the court should enter a stay of the proceedings, in the stead of entering the acquittal.

This way of proceeding has two advantages. First, it avoids situations such as that which we are facing in the present case where a Court of Appeal is being ordered to reconsider an acquittal though no appeal was taken from that decision, and understandably so. But, secondly, the more fundamental reason is that, whilst a person should not be convicted more than once for essentially the

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same conduct, such a principle does not of necessity have as a corollary, when multiple charges are laid and a conviction entered on one of them, his right to an acquittal on all others. A stay fully accommodates the policy consideration underlining this Court’s decision in Kienapple whilst avoiding entering an acquittal notwithstanding proof beyond a reasonable doubt of conduct that constitutes guilt of a crime.

Appeal dismissed, MCINTYRE and WILSON JJ. dissenting.

Solicitors for the appellant: Sinclair & Edmond, Winnipeg.

Solicitor for the respondent: Deputy Attorney General for the Province of Manitoba, Winnipeg.