2012 NBCA 15, 2012 NBCA 15

COURT OF APPEAL OF NEW BRUNSWICK 65-11-CA JERRY NATHANIEL VENO APPELLANT JERRY NATHANIEL VENO APPELANT - and - - et - HER MAJESTY THE QUEEN RESPONDENT SA MAJESTÉ LA REINE INTIMÉE Veno v. R., 2012 NBCA 15 Veno c.

R., 2012 NBCA 15 CORAM: The Honourable Justice Larlee The Honourable Justice Richard The Honourable Justice Quigg CORAM : L’honorable juge Larlee L’honorable juge Richard L’honorable juge Quigg Appeal from a decision of the Provincial Court: April 4, 2011 Appel d’une décision de la Cour provinciale : Le 4 avril 2011 History of Case: Historique de la cause : Decision under appeal: Unreported Décision frappée d’appel : Inédite Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : S.O.

Appeal heard: September 20, 2011 Appel entendu : Le 20 septembre 2011 Judgment rendered: February 23, 2012 Jugement rendu : Le 23 février 2012

Counsel at hearing: For the appellant: Ben Reentovich For the respondent: Cameron H. Gunn Avocats à l’audience : Pour l’appelant : Ben Reentovich Pour l’intimée : Cameron H. Gunn THE COURT The appeal against sentence is dismissed. LA COUR Rejette l’appel de la peine. The judgment of the Court was delivered by RICHARD J.A. [1] This appeal, against a sentence of imprisonment of nine months followed by six months’ probation, plus a restitution order of $8,400, raises two distinct issues: 1.

Did the theft committed by Jerry Nathaniel Veno against his employer, though not committed in the course of his employment, constitute an abuse of a position of trust so as to be considered an aggravating factor under s. 718.2(a)(iii) of the Criminal Code ? 2. When Mr. Veno offered to pay restitution, did the judge have a duty to make detailed inquiries regarding his ability to pay? [2] I would answer no to both these questions. The effect of this is that I find there is merit to the first ground Mr. Veno raises in his Notice of Appeal. This is why he was granted leave to appeal.

Nevertheless, I would dismiss the appeal because, notwithstanding the sentencing judge’s error of law, the sentence imposed was fit. [3] Jerry Veno was a trusted employee of a chimney sweeping business. Although his duties did not make him responsible for the financial affairs of

his employer, he did on occasion collect payments from customers. However, this case has nothing to do with the handling of funds in the course of employment. [4] Mr. Veno’s employer was an elderly man who kept significant amounts of cash hidden in his home. At some point, Mr. Veno became aware of this, and also learned he could obtain access to the home by using a key hidden on the property. [5] Mr. Veno has a gambling addiction. By the beginning of 2010, he was heavily in debt. On January 6 of that year, using the hidden key, Mr.

Veno gained unlawful access to his employer’s home and stole money. [6] At the end of January, Mr. Veno’s employer became aware he had been the victim of a theft. According to him, $52,000 was missing. Since there were no signs of forced entry, and believing someone close to him might have taken the money, the victim decided to delay reporting the crime so as not to upset his family, as they were preparing for the imminent death of a close relative. It was only about a week later that he started asking questions. He told a number of people, including Mr.

Veno, that if the funds were not returned by a certain date, he would call the police. True to his word, when no one came forward, he reported the theft. Coincidentally, while the police were investigating, Mr. Veno called his employer and, after arranging to meet with him, confessed to having taken the money. He immediately returned the sum of $1,600. Mr. Veno then confessed to the police, although he maintained the amount taken was significantly less than the $52,000 reported stolen. [7] Mr. Veno was eventually charged with break, enter and theft, the crime set out in s. 348(1)(

b) of the Criminal Code . He eventually pled guilty in Provincial Court, but he challenged the amount involved. As a result, a sentencing hearing was held to resolve the factual dispute. In the end, the judge gave Mr. Veno the benefit of the doubt and found him to have stolen $10,000, of which $1,600 had been returned. [8] In imposing sentence, the Provincial Court judge considered the theft to have been committed in violation of a fiduciary relationship.

As a result, he found the offence to have been committed through the abuse of a position of trust and, applying s. 718.2( a )(iii) of the Criminal Code , the judge found this to be an aggravating factor. He also considered, as aggravating factors, the impact on the victim who felt a sense of betrayal and who had lost a significant amount of money, and the fact the break and enter was into a dwelling house. These factors were weighed together with mitigating factors, notably Mr. Veno’s guilty plea, his remorse and his desire to pay restitution.

[9] Turning to the law, the sentencing judge relied on authority that stands for the proposition that sentencing for thefts involving the abuse of a position of trust must emphasize general deterrence, and that this is generally achieved by a sentence that features incarceration. In particular, the judge quoted from R. v. Steeves and Connors , 2005 NBCA 85 , 288 N.B.R. (2d) 1 . The judge distinguished the case of R. v. Adler , [1999] N.B.J. No. 100 (C.A.) (QL) , which had been cited to him in support of the defence proposition that Mr. Veno had not abused a position of trust in committing the crime.

The judge considered the maximum penalty set out in the Criminal Code , the recommendations of the prosecutor, who called for a sentence of incarceration of 12 to 18 months and the recommendations of the defence lawyer, who argued for a conditional sentence of 9 to 12 months. On the basis of the statement made in Steeves and Connors that theft from an employer is the type of crime where “the effects of incarceration are likely to have a real deterrent effect” (para. 14), and also on the basis that Mr. Veno had a previous record showing a conviction for theft, the sentencing judge ruled out a conditional sentence.

In the end, the judge sentenced Mr. Veno to incarceration for 9 months, followed by probation for 6 months, and made a stand-alone restitution order in the amount of $8,400. [10] With leave, Mr. Veno appeals his sentence. He claims the sentencing judge erred by ruling that the offence constituted a breach of trust. He also says the judge committed an error in principle by ordering restitution without considering the means of the offender to pay, adding that, given the lack of means, the combination of incarceration and restitution results in an unreasonable sentence.

In addition, he maintains the judge erred by failing to properly consider the criteria for a conditional sentence. [11] As stated above, I find merit to Mr. Veno’s first ground of appeal. For the reasons set out below, I conclude the sentencing judge committed an error in law by applying s. 718.2( a )(iii) of the Criminal Code . [12]

Section 718.2( a )(iii) deems the abuse of a position of trust in the commission of an offence to be an aggravating factor. This provision is simply the codification of a long-standing principle pursuant to which courts already considered the abuse of such a position as an aggravating factor (see Steeves and Connors , at para. 12). [13] There is ample authority for the proposition that theft by one who is entrusted with money in the course of his or her employment constitutes an abuse of a position of trust. In fact, most of the theft cases where s. 718.2( a )(iii) has been applied feature such circumstances. This was the situation in Steeves and

Connors and its companion case, R. v. Chaulk, 2005 NBCA 86, 287 N.B.R. (2d) 375,and is the situation in most of the reported cases (see for example: R. v. McKinnon,2005 ABCA 8, [2005] A.J. No. 12 (QL) (embezzlement by a bookkeeper); R. v.Holmes, 1999 ABCA 228, [1999] A.J. No. 862 (QL) (bank manager stealing fromaccounts); R. c. Dubreuil, [1992] J.Q. No. 1081 (C.A.) (QL) (bank employeeembezzling funds); R. v. Reid, 2004 YKCA 4, [2004] Y.J. No. 3 (QL) (cashier stealingfrom employer); R. v. Pierce, (ON CA), [1997] O.J. No. 715 (C.A.)(comptroller sealing from employer); R. v. Dobis, (ON CA),[2002] O.J.

No. 646 (C.A.) (fraud by accounting manager); R. v. Clarke, (ON CA), [2004] O.J. No. 3438 (C.A.) (bank telephone agent stealing fromaccounts); and R. v. Bowes (J.M.) (1994), (NB CA), 155 N.B.R.(2d) 321, [1994] N.B.J. No. 472 (C.A.) (QL) (lawyer stealing trust funds)). However,the present case is different. Mr. Veno did not steal money that was entrusted to himin the course of his employment.

He used information he gained through hisemployment and, just as importantly, through his friendship with his employer inorder to identify the object of his crime and the means by which he could commit it. [14] I note that, as an aggravating factor pursuant to s. 718.2(a)(iii), “abuse of a position of trust” is not limited to theft-type cases. There are otheroffences, such as sexual assault, where s. 718.2(a)(iii) has been applied. A credibleargument can certainly be made that Mr.

Veno breached the trust his employer andfriend placed in him when he hired him, giving him an opportunity to learn where themoney was kept and how to get access to the house.

However, when it comes to theft-type cases, such an argument has been rejected by this Court in Adler. [15] In Adler, a homemaker hired by an elderly couple throughthe services of the Red Cross “inveigled herself into their confidences” and gainedaccess to the couple’s bank debit card and personal identification number, afterwhich she “proceeded to deplete the account of the couple’s life savings of $27,890.00”and then forged “three cheques for a total of $1,650” (para. 2). Upon pleading guiltyto her crimes, Ms. Adler was sentenced to serve a conditional sentence of eightmonths.

On appeal, this Court varied the sentence to eight months incarceration. Indoing so, the Court said as follows: In this case there was no aggravating factor of trust. The Crown argued that there was a breach of trust but argues it in a non legal senseof abuse of confidence rather than a recognized legal sense of vesting their finances in Ms. Adler's hands for their benefit. The accusedwas engaged to look after the physical comfort needs of this elderly couple as a homemaker and not in any fiduciary capacity. She issimply a thief.

If she had been in a position of trust or authority and breached such position, an aggravating factor, we would consider asentence of eight months in the circumstances of this case neither fit nor proportionate to the gravity of the offence and the degree of herresponsibility as set forth in s. 718.1. The appeal in relation to sentence is allowed. [para. 11] [16] I find Adler indistinguishable from the present case and, inmy view, the Provincial Court judge was bound to apply it. The judge simply said it

was distinguishable because Mr. Veno worked for the victim and learned of theexistence of the funds through his employment. However, Ms. Adler worked for theelderly couple she defrauded, and it was in the course of this employment that shelearned of the existence of their bank account and how to gain access to it. There aresimply no significant distinguishing features.

Adler set the law on the application of s.718.2(a)(iii) to theft-type cases in this Province, and the failure to apply it constitutesan error of law. [17] There is a long line of authority that stands for theproposition that a sentence that is the product of an error of either law or principle isnot entitled to deference. In those situations, it falls upon the appellate court toimpose the sentence considered fit in the circumstances. In support, I need only referto the oft-cited statement of Drapeau J.A. (as he then was) in R. v. R.K.J. (1998), (NB CA), 207 N.B.R. (2d) 24, [1998] N.B.J.

No. 483 (C.A.) (QL), wherehe states that “if the sentencing court commits an error of law or an error inprinciple, or if the sentence imposed is clearly unreasonable, there is no longer roomfor deference and this Court is required to impose the sentence which it considers fit”(para. 12). [18] The analytical framework to craft an appropriate sentencebegins with a review of the legislated purpose of sentencing, the fundamentalprinciple that governs sentencing, as well as other guiding principles. These are setout in ss. 718, 718.1 and 718.2 of the Criminal Code.

The objectives of sentencing are:to denounce unlawful conduct; to deter the offender and other persons fromcommitting offences; to separate offenders from society, where necessary; to assist inrehabilitating offenders; to provide reparations for harm done to victims or to thecommunity; and to promote a sense of responsibility in offenders, andacknowledgment of the harm done to victims and to the community (s. 718).

Asentencing court must aim to achieve one or more of these objectives when crafting asentence that is “proportionate to the gravity of the offence and the degree ofresponsibility of the offender” (s. 718.1).

Section 718.2 enumerates other sentencingprinciples: Other sentencing principles 718.2 A court that imposes a sentence shallalso take into consideration the followingprinciples: (

a) a sentence should be increased or reducedto account for any relevant aggravating ormitigating circumstances relating to theoffence or the offender, and, without limiting Principes de détermination de la peine 718.2 Le tribunal détermine la peine àinfliger compte tenu également des principessuivants :

a) la peine devrait être adaptée auxcirconstances aggravantes ou atténuantes liéesà la perpétration de l’infraction ou à lasituation du délinquant; sont notamment

the generality of the foregoing, (

i) evidence that the offence was motivated by bias, prejudice or hate based on race, national or ethnic origin, language, colour, religion, sex, age, mental or physical disability, sexual orientation, or any other similar factor, (ii) evidence that the offender, in committing the offence, abused the offender's spouse or common-law partner, (ii.1) evidence that the offender, in committing the offence, abused a person under the age of eighteen years, (iii) evidence that the offender, in committing the offence, abused a position of trust or authority in relation to the victim, (iv) evidence that the offence was committed for the benefit of, at the direction of or in association with a criminal organization, or (

v) evidence that the offence was a terrorism offence; shall be deemed to be aggravating circumstances . (

b) a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances; (

c) where consecutive sentences are imposed, the combined sentence should not be unduly long or harsh; (

d) an offender should not be deprived of liberty, if less restrictive sanctions may be appropriate in the circumstances; and (

e) all available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders, with particular attention to the considérées comme des circonstances aggravantes des éléments de preuve établissant : (

i) que l’infraction est motivée par des préjugés ou de la haine fondés sur des facteurs tels que la race, l’origine nationale ou ethnique, la langue, la couleur, la religion, le sexe, l’âge, la déficience mentale ou physique ou l’orientation sexuelle, (ii) que l’infraction perpétrée par le délinquant constitue un mauvais traitement de son époux ou conjoint de fait, (ii.1) que l’infraction perpétrée par le délinquant constitue un mauvais traitement à l’égard d’une personne âgée de moins de dix- huit ans, (iii) que l’infraction perpétrée par le délinquant constitue un abus de la confiance de la victime ou un abus d’autorité à son égard, (iv) que l’infraction a été commise au profit ou sous la direction d’une organisation criminelle, ou en association avec elle; (

v) que l’infraction perpétrée par le délinquant est une infraction de terrorisme;

b) l’harmonisation des peines, c’est-à-dire l’infliction de peines semblables à celles infligées à des délinquants pour des infractions semblables commises dans des circonstances semblables;

c) l’obligation d’éviter l’excès de nature ou de durée dans l’infliction de peines consécutives;

d) l’obligation, avant d’envisager la privation de liberté, d’examiner la possibilité de sanctions moins contraignantes lorsque les circonstances le justifient;

e) l’examen de toutes les sanctions substitutives applicables qui sont justifiées dans les circonstances, plus particulièrement en ce qui concerne les délinquants

circumstances of aboriginal offenders. [Emphasis added] autochtones. [C’est moi qui souligne.] [19]

Section 718.2(

a) does not set out an exhaustive list of factors that might be considered aggravating. Except for the enumerated situations, the determination of what might or might not be an aggravating factor must be made by the sentencing judge. For example, in the present case, the judge considered as aggravating factors the impact on the victim, who felt a sense of betrayal, the significant amount of money involved and the fact the break and enter was into a dwelling. Those are, in my view, proper considerations.

Just because this crime may not strictly fall into the category of abuse of a position of trust does not mean the relationship between the offender and the victim cannot be considered. The impact on the victim can, as occurred here, be more significant because of the relationship between the parties. This is an appropriate factor to consider. In Adler , the Court noted that “[t]he thefts originated in the intimate sanctity of the home [and] in a situation of reliance and confidence in the homemaker” (para. 4). The same can be said of the present case with respect to the relationship between Mr.

Veno and his victim. In my view, this is still a significant aggravating circumstance, even if it does not, strictly speaking, amount to the abuse of a position of trust. Had there also been such an abuse, the aggravating nature of the circumstances would have been even worse. [20] This case presents both aggravating and mitigating circumstances. The mitigating features relate more to the offender, not to his offence. As the sentencing judge pointed out, Mr. Veno pled guilty, is remorseful and has offered to pay restitution. However, there are also considerations that weigh against Mr. Veno’s character.

He has a record of previous convictions, although his record is somewhat dated. Nevertheless, it cannot be totally ignored. In 1994, Mr. Veno was convicted of possession of property obtained by crime (s. 354(1)( a )) and, in 2000, he was convicted of theft (s. 334( b )(ii)). Although the pre-sentence report reveals Mr.

Veno has, at times, been a somewhat productive member of society, it remains the case that he does not have an unblemished past. [21] The principle that a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances is often difficult to implement because cases are seldom alike. Support can be found in the jurisprudence for a wide range of sentences for break and enter into a dwelling house, which, it must be recalled, is an offence that carries a maximum punishment of imprisonment for life.

Certainly, there is authority supporting both the 12 to 18 months sentence the prosecution was seeking at trial and the 9 to 12 month conditional sentence suggested on behalf of Mr. Veno. It is the circumstances of the

offence and of the offender that will help determine where, along that range, the proper sentence might fall. [22] In my view, deterrence is an important sentencing objective in the present case. Considering Mr. Veno’s previous criminal convictions, one of the applicable objectives must be specific deterrence. General deterrence is also very important. In cases of breach of trust, general deterrence is important because these offences are of the kind “in which the effects of incarceration are likely to have a real deterrent effect": Steeves and Connors , at para. 14.

While this is not a case involving the abuse of a position of trust, it is nevertheless my view that general deterrence is a most relevant consideration.

In Adler , where the theft was not considered to be the result of an abuse of a position of trust, but where it rather originated “in the intimate sanctity of the home in a situation of reliance and confidence” (para. 4), this Court said as follows: If there is no emphasis on general deterrence in this type of case the message is that preying upon the elderly, the frail in body or mind, where their life savings have been stolen and squandered, will result in the offender serving his or her sentence in an extramural setting.

This would send the wrong message to the public and to those with like-minded criminal intent. [para. 7] [23] The same applies to the present case, where Mr. Veno took advantage of the reliance and confidence placed in him in order to gain access to his victim’s home and steal his money. I therefore conclude that this is a case where a non-custodial sentence would fail to respect the governing sentencing objective of deterrence, both general and specific.

In the particular circumstances of this case and of this offender, a community-based sentence would simply not be consistent with that objective. [24] The fundamental principle of sentencing is that the sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender. Breaking and entering into a dwelling house is a serious offence, as evidenced by the fact the maximum punishment provided for it is imprisonment for life. As for Mr. Veno’s responsibility, he, and he alone, is responsible.

As a 35-year- old married man and father, who has had previous involvement with crime, and who was working toward establishing himself as a productive member of society, he should have known better. [25] Considering all of the above, I am of the view that a significant term of imprisonment is the least restrictive sanction that can meet the applicable sentencing objectives and principles. In my view, but for the restitution order, a term of imprisonment of 15 to 18 months would have been appropriate in this case. [26] What then is the effect of the restitution order on the

sentencing? In R. v. Bowes, supra, this Court recognized that, under the predecessorto s. 738, pursuant to which a stand-alone restitution order can now be made,compensation orders “form part of a person's punishment and, accordingly, must betaken into account when considering the fitness of the sentence” (para. 6). The samerecognition is now given to s. 738 (see R. v. Siemens, (MB CA),[1999] M.J. No. 285 (C.A.) (QL)). [27] This brings me to the second question posed in myintroductory paragraph: where Mr.

Veno offered to pay restitution, did the judgehave a duty to make detailed inquiries regarding his ability to pay? There arecertainly cases that suggest that the ability to pay is one of the considerations thatmust be weighed before a judge makes a restitution order, but, frankly, I do not findit necessary to canvass those considerations, nor to pronounce on their applicability inthe present case. The fact is that Mr. Veno not only offered to make restitution, but,through his counsel, led the sentencing judge to believe he had the ability to pay. Thelawyer advised the judge that although Mr.

Veno had limited disposable income fromwhich he might pay restitution, he nevertheless had a home with a mortgage due forrenewal in a few months and that Mr. Veno’s intention was to refinance the home inorder to pay his victim. In the circumstances, the sentencing judge certainly cannotbe faulted for having made the restitution order. [28] Mr. Veno’s ground of appeal on the question of restitution issomewhat contradictory. In the first sentence, it says the judge erred in orderingrestitution without considering Mr.

Veno’s ability to pay, but then it claims the judgefailed to consider that the restitution order made up part of the total sentence. Mr.Veno cannot have it both ways. Either there is a restitution order that is consideredpart of the sentence, which might serve to reduce the period of incarceration, or thereis not, in which case the period of incarceration might be greater. At the hearing ofthe appeal, he opted for the former.

The inference I draw from that is that heacknowledges that at some point he will have the ability to make restitution. [29] As stated above, a sentence of imprisonment of 15 to 18months might have been appropriate in this case. This was a planned and calculatedbreak, enter and theft into the dwelling of a person who had relied on Mr. Veno andwho had confidence in him. The crime involved a significant amount of money takenfrom an elderly man and was committed by someone who, given his previousinvolvement with the law, should have known better.

Evidently, rehabilitation-basedsentences, i.e. the suspended sentence and fine imposed for Mr. Veno’s previousoffences, have been tried and failed. Thus, it is appropriate to turn to specificdeterrence as one of the objectives. As explained above, another important objective isgeneral deterrence. Others in positions not quite of fiduciary-level “trust”, but ofreliance and confidence, like Mr. Veno and Ms. Adler, with like-minded criminalintent, must be sent the right message. This said, when I take into account the

restitution order, I cannot say that the 9-month term of imprisonment imposed is unfit. While it is at the lower end of what I consider a fit sentence, I would not disturb the 9-month term of imprisonment imposed notwithstanding the error in law the judge committed. [30] For these reasons, I would dismiss Mr. Veno’s appeal. ______________________________ J.C. MARC RICHARD, J.A. WE CONCUR: ________________________________ M.E.L. LARLEE, J.A. ________________________________ KATHLEEN A. QUIGG, J.A.