2011 QCCA 1610, 2011 QCCA 1610

R. c. Dolbec 2011 QCCA 1610 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF QUEBEC NO: 200-10-002655-111 (400-01-051443-083) TRANSCRIPT OF THE HEARING DATE: September 7, 2011 CORAM: THE HONOURABLE ANDRÉ BROSSARD, J.A. (JB1632) FRANÇOIS DOYON, J.A. (JD1630) NICHOLAS KASIRER, J.A. (JK0204) APPLICANT LAWYER HER MAJESTY THE QUEEN Mtre MAXIME CHEVALIER (AM7025) (Criminal and Penal Prosecutor) RESPONDENT LAWYER JEAN-FRANÇOIS DOLBEC Mtre SERGE MILETTE (AW7072) On appeal from a judgment of the Court of Quebec, District of Trois-Rivières, rendered on April 27, 2011, by the Honourable Judge Jacques Trudel.

NATURE OF THE APPEAL: Amended motion for leave to appeal from the sentence and the refusal to issue an order of forfeiture or to impose a fine pursuant to

section 462.37 Cr C Fraud (49 counts) Clerk: Michèle Blanchette (TB3352) Room: 4.33 – VIDEOCONFERENCE

HEARING 15:00 Submissions of Mtre Chevalier; Submissions of the Court; 15:17 Submissions of Mtre Milette; 15:25 Reply of Mtre Chevalier; 15:28 Recess; 15:42 Judgment. (

s) Court Clerk PER CURIAM JUDGMENT FOR THE REASONS TO BE FILED IN THE RECORD, THE COURT: [ 1 ] ALLOWS the amended motion for leave to appeal from the sentence and the refusal to issue an order of forfeiture or to impose a fine under

section 462.37 Cr C ; [ 2 ] DISMISSES the appeal. ANDRÉ BROSSARD, J.A. FRANÇOIS DOYON, J.A. NICHOLAS KASIRER, J.A. R. c. Dolbec 2011 QCCA 1610 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF QUEBEC NO: 200-10-002655-111 (400-01-051443-083) DATE: SEPTEMBER 9, 2011

CORAM: THE HONOURABLE ANDRÉ BROSSARD, J.A. FRANÇOIS DOYON, J.A. NICHOLAS KASIRER, J.A. HER MAJESTY THE QUEEN APPELLANT – Prosecutrix v. JEAN-FRANÇOIS DOLBEC RESPONDENT– Accused REASONS FOR JUDGMENT RENDERED FROM THE BENCH SEPTEMBER 7, 2011 [1] The respondent pleaded guilty to 49 counts of fraud under $5,000 (s 380(1)( b )(

i) Cr

C) and was sentenced by the Court of Quebec (the Honourable Judge Jacques Trudel) on April 27, 2011, to eight-month prison sentences, concurrent for each count, a three- year probation order and a victim fine surcharge of $150 per count for a total of $7,350. The judge, however, refused to order the forfeiture of $24,000 seized at the respondent’s, or to impose a fine instead of forfeiture. [2] The appellant appeals and argues that the sentences and fine surcharges were too lenient.

The judge did not properly consider the objectives of denunciation and deterrence given the nature of the fraud and the respondent’s degree of responsibility. In addition, the judge erred in refusing to order the forfeiture and the compensatory fine. [ 3 ] The respondent, having drug and gambling debts, fraudulently resold cars with rolled back odometers. Assisted by his spouse and encouraged by his lenders, he bought used cars from individuals and rolled back their odometers to fraudulently increase their value.

He spruced up the vehicles so their appearance matched their new mileage, then resold them to individuals at a price higher than their purchase price. The defrauders also falsified the proxies to transfer the registration so that the altered mileage appeared in the Société d’assurance automobile du Québec databanks. In total, 49 vehicles were purchased, tampered with, and resold between April of 2006 and November of 2007. [ 4 ] On July 23, 2008, the police arrested the respondent and his spouse.

During a search of their home they found a safe containing $24,000 in cash, divided into several envelopes, two of which contained $10,000. The money was seized. *** [ 5 ] Did the trial judge err in law by imposing an eight month prison sentence on the respondent, accompanied by a three-year probation and victim fine surcharges totalling $7,350? [ 6 ] From the outset, it is noteworthy that case law has consistently held that the Court must show deference to sentences decided by trial judges.

The Court may only intervene where the sentence “is ’demonstrably unfit’ or if it reflected an error in principle, the failure to consider a relevant factor, or the over-emphasis of a relevant factor”. [1] [ 7 ] In this case, the sentence imposed by the judge on the respondent is certainly not harsh, but it cannot be characterized as unreasonable.

It falls within the range of sentences imposed in other cases of odometer rollback fraud. [2] The judge correctly weighed the different objectives to determine a sentence and arrived at a sentence that took the objectives of denunciation, deterrence and rehabilitation into account. He also adequately balanced the aggravating and mitigating circumstances. [ 8 ] The appellant alleges that the judge erred when he wrote that [ translation ] “section 380.1 Cr C only applies very minimally in this case, and does so due to the number of victims, no more” (para [39]).

According to the appellant, this passage attests to an erroneous

interpretation of

section 380.1 Cr C , which clearly specifies that the number of victims of the fraud is an independent aggravating factor. [ 9 ] Contrary to what the appellant maintains, a reading of all of the judge's reasons indicates that he correctly considered the number of victims as an independent aggravating factor. The judge wrote, in particular [ translation ]: “…, what constitutes an aggravating factor, or indicates the extent of the accused’s fraud, is the number of victims, forty-nine” (para [32]).

Further on in his reasons, he adds [ translation ] “… [t]he aggravating factors that we accept are the duration of the fraud, the number of transactions and victims, the premeditation, the criminal record including possession of stolen vehicles” (para [39]). The appellant is thus mistaken: the judge did not commit an error in interpreting

section 381.1 that would justify the Court's intervention. [ 10 ] The appellant also criticizes the judge for failing to respect the principle of gradation of sentences. It notes that the respondent was sentenced in 2003 to a twelve months’ imprisonment for fraud and possession of stolen property, which would have warranted a harsher sentence in this case due to the recividism.

The principle of gradation of sentences should not be applied in a mechanical and abstract manner. [3] The judge considered the respondent's criminal record and did not feel it necessary to impose the same or a longer sentence than that imposed in 2003 due to the mitigating circumstances in the present case. Here again, the appellant is unable to demonstrate that this choice was marked by an error justifying the Court's intervention. [ 11 ] It is noteworthy that, exercising the discretionary power conferred upon him under subsection 737(3) Cr C , the judge ordered a

fine surcharge of $150 for each of the 49 counts of fraud, an amount greater than the fine surcharge of $100 per count otherwise applicable.

This is an additional indication of how seriously the judge viewed the sentence. [ 12 ] To sum up, it is not necessary to modify the prison sentence or the fine surcharges imposed by the judge. *** [ 13 ] Did the trial judge err in stating that he was not convinced that the sum of $24,000 seized at the respondent's was proceeds of crime and therefore not subject to forfeiture under subsection 462.37(1) Cr C ? [ 14 ] Under subsection 462.37(1) Cr C, a judge who imposes the sentence and who “… is satisfied, on a balance of probabilities, that any property is proceeds of crime and that the designated offence was committed in relation to that property, ... shall order that the property be forfeited to Her Majesty.” The term “proceeds of crime” is defined in subsection 462.3(1): “any property, benefit or advantage, within or outside Canada, obtained or derived directly or indirectly as a result of:

a) the commission in Canada of a designated offence….” [ 15 ] The judge found, on a balance of probabilities, that the $24,000 was for the most part a gift from the respondent's grandfather, sent to him and his sister shortly before his death. It was, therefore, not proceeds of crime within the meaning of subsection 462.3(1) Cr C and could not then be subject to forfeiture. [ 16 ] The judge's conclusion is supported by the evidence.

We refer in particular to the strong bond between the respondent and his grandfather, the time between the commission of the frauds and the seizure of the $24,000, the respondent's debts that would have already swallowed up the fraudulently acquired income, and the allocation of sums into the envelopes found in the safe. [ 17 ] The appellant has not shown that the judge committed an error justifying the Court's intervention in this regard. *** [ 18 ] Did the trial judge err in not imposing on the respondent a fine instead of forfeiture under subsection 462.37(3) Cr C ? [ 19 ] To impose a fine under 462.37(3) Cr C , the judge must: 1) be convinced that an order of forfeiture should be rendered regarding property, and 2) be convinced that the property cannot be subject to such an order, in particular for one of the reasons listed in the section.

The amount of the fine must equal the value of the property for which the order of forfeiture should have been rendered. [4] [ 20 ] The appellant alleges that the amount of proceeds of crime on which the fine instead of forfeiture should be based is the total value of the sums paid by the respondent's fraud victims. According to the appellant, all the money the respondent obtained from his victims, not only the profit he derived, constitutes proceeds of crime subject to the fine under subsection 467.32(3). [ 21 ] This argument must fail.

As the judge explained, it cannot be said that all the money given by the victim – in exchange for which he or she nonetheless obtained a car with a resale value – is related to the fraud. Moreover, the respondent concluded sixty-eight other perfectly legitimate transactions, so the judge was unable to distinguish what became of the sums obtained fraudulently as opposed to those obtained legitimately. In addition, the respondent's sale of cars cannot be likened to the sale of drugs, for which the entire consideration constitutes proceeds of crime.

Given the nature of the transactions involved, the judge was correct to consider only the portion of the resale profits associated with the fraud. [ 22 ] In this case, the judge refused to impose a fine on the respondent because he could not establish the value of the property subject to forfeiture with certainty. On this point, he wrote: [ translation ] [91] This is clearly not an enterprise crime offence. While the profits from the sale of vehicles was established at $51,000, the victims' actual loss was not.

The accused committed these frauds with the objective of reimbursing drug debts to his menacing lender-usurers. As previously stated, nor is the Court convinced that an order of forfeiture of property valued at $51,000 should be imposed. The evidence established that the sale of the vehicles in question brought in $51,000, but this same evidence does not allow us to establish which portion of the profits is due to the fraud and which one is due to the simple act of buying and reselling used cars.

However, in order to impose a compensatory or substitute fine, this evidence must be made, as opposed to property, proceeds of crime, otherwise unavailable. [Emphasis added] [ 23 ] The appellant maintains that the judge erred in failing to consider that the respondent's involvement in the frauds enabled him to reimburse $30,000 in debt. Indeed, the judge noted that the respondent used the income from the resale of cars to pay his debt (paras [71] and [78]).

The respondent affirmed in his testimony that his lenders erased his debt due to his participation in the frauds. [ 24 ] Is this sum of $30,000 considered proceeds of crime within the meaning of subsection 462.37(1) Cr C ? [ 25 ] We know the judge considered that he could not identify the amount from the resale that constituted proceeds of crime because it was impossible to distinguish the legitimate profits from the illegitimate profits resulting from the sale of used vehicles.

This same factual impossibility remains an obstacle to imposing a compensatory fine regarding the $30,000, despite the fact he admitted to personally making this sum from the venture. We cannot state with the requisite certainty that this sum constitutes proceeds of crime because the evidence does not reveal which part of the profits used to reimburse these $30,000 were associated with the fraud.

Yet identifying the proceeds of crime is a sine qua non condition to applying subsection 462.37(3) Cr C. [ 26 ] Lastly, the appellant argues that the respondent, who was receiving social assistance at the time he committed the offences, defrauded the Ministère de l'Emploi et de la Solidarité sociale of $11,525.73 by failing to declare the income from his used car business.

The amount in question, therefore, also represents proceeds of crime according to subsection 462.37(2) Cr C that may be subject to a fine instead of forfeiture. [ 27 ] This allegation is destined to fail because proceeds of crime subject to forfeiture under 462.37 C r C must nonetheless be connected to the offences of which the accused is found guilty, [5] which is not the case here. [ 28 ] Overall, the appellant has failed to convince the Court that it should intervene in the sentence, the forfeiture of the $24,000 or the confiscatory fine. [ 29 ] FOR THESE REASONS , THE COURT, from the bench, allows the motion for leave to appeal and dismisses the appeal.

ANDRÉ BROSSARD, J.A. FRANÇOIS DOYON, J.A. NICHOLAS KASIRER, J.A. Mtre Maxime Chevalier CRIMINAL AND PENAL PROSECUTOR For the appellant Mtre Serge Milette For the respondent Date of hearing: September 7, 2011