R. v. Whittaker, 2021 BCPC 8

Citation: R. v. Whittaker 2021 BCPC 8 Date: 20210115 File No: 66752-1 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Criminal Court REGINA v. HEIDIMARIE WHITTAKER REASONS FOR SENTENCE OF THE HONOURABLE JUDGE B. DYER Counsel for the Crown: Shelley Hulko Counsel for the Defendant: Hollis Lucky Place of Hearing: North Vancouver , B.C. Dates of Hearing: November 25, 26, 2019; March 2, 3, April 29, September 24, 25, November 16, 2020 Date of Judgment: January 15, 2021 A Corrigendum was released by the Court on January 21, 2021.

The corrections have been made to the text and the Corrigendum is appended to this document. [ 1 ] The accused pled guilty on November 5, 2019 to count 1 on information 66752-1 (a single count) of defrauding a company for

which she worked namely Northwest Angling Adventures Ltd. carrying on business as King Pacific Lodge (“KPL”) of an amount of money in excess of $5,000.00 contrary to s. 380(1) (

a) of the Criminal Code of Canada . Crown proceeded by way of indictment. [ 2 ] Thereafter the accused sought an order that the charge be stayed due to an abuse of process related to the time that had elapsed from the date she had in essence turned herself in to the North Vancouver RCMP on March 1, 2013 to the date the information was sworn on March 8, 2019 – some 72 months. I dismissed her application with written reasons filed on April 29, 2020. Thereafter this matter proceeded before me as a sentencing hearing which concluded in December 2020.

I then reserved my decision as to what sentence I felt would be a fit and just sentence pending preparation of written reasons. These are my reasons. [ 3 ] I will first deal with the position of the parties as to what a fit and just sentence should be on the facts of this case. POSITION OF THE PARTIES ON SENTENCE: CROWN: [ 4 ] Ms. Hulko submits that a custodial sentence of incarceration of between 3 to 5 years would be an appropriate fit and just sentence in this case. I understood her to suggest that a 4 year sentence would be appropriate. If I felt Ms.

Whittaker did suffer from a mental illness (a gambling addiction) at the time the offence was committed and it caused or contributed to her offending behaviour and was therefore a mitigating circumstance, this should serve only to lower the sentence to 3 years’ incarceration. In addition she sought a stand alone restitution order in the amount of $746,046.62 (as per the ASF) and in addition a DNA order pursuant to s. 487.051 of the Criminal Code of Canada . Mr. Lucky for the defence did not object to my making these latter 2 orders. DEFENCE: [ 5 ] Mr.

Lucky disagreed that the range of sentence in a case like that at bar was from 3 to 5 years in jail and argued that there were many cases where serious frauds had been committed where courts awarded conditional sentence orders. He submitted that while the accused’s fraud was astonishing, that such an order for 2 years less 1 day would be a fit and just sentence in this case with a 1 year house arrest provision. However with exceptions permitting Mrs.

Whittaker to be outside her residence for work, scheduled counselling, to attend medical emergencies for herself or others and in the second year a curfew from 9:00 p.m. to 7:00 a.m. In addition he suggested a sentence requiring Mrs. Whittaker to complete some community services hours might also be included, I understood to be completed in the second year of the conditional sentence order. [ 6 ] Defence counsel also suggested that Mrs. Whittaker be placed on probation at the conclusion of her conditional sentence order for a period of 2 years.

CIRCUMSTANCES OF THE OFFENCE [ 7 ] In order to deal with this issue in a proper context, it is first necessary in my view to summarise some of the facts I have been given concerning the employer and its business and the accused’s role therein before dealing with her offending behaviour. In doing so I rely both on submissions of counsel the content of the Agreed Statement of Facts, and those facts which emerge from the transcripts of RCMP Constable Olson’s interview of Mr.

Uehara, the president of the company which operated King Pacific Lodge (“KPL”) and the transcript of the accused’s interview again with Constable Olson on March 1, 2013, the day she went to the police to confess her fraudulent activities. [ 8 ] KPL was established sometime in about 1988. This wilderness lodge is built on a large ocean going barge and operated from about the end of May to the end of September.

It was mothballed during the Fall and winter months in Prince Rupert and in the spring each year it was towed to Princess Royal Island located about 60 miles south of Kitimat and 20 miles south of the Gitga’at First Nations community at Hartley Bay. It catered to both fishers or anglers and adventure tourists – a high class clientele. It is located in the heart of the Great Bear Rain Forest on the coast of BC, the home of the Kermode Bear sometimes called the Spirit Bear. The lodge in a good year had revenues from 4 to 5 million dollars. However during what Mr.

Uehara described as recession years, the annual revenue dropped to as low as $2.4 million. The lodge had one year-round caretaker and employed persons from the Gitga’at Nation in Hartley Bay in the summer as guides. It was their largest employer. [ 9 ] The company maintained a business office in North Vancouver with a small staff including the accused in the years 2009 to 2013 referred to on the information. The accused initially worked at the company in or about 1997, then left and returned and was again employed continuously from 2001 to March 1, 2013.

In 1997 and before the company external accountant was Whittaker and Associates (which became Whittaker and Towler). The accused’s father-in-law Fred Whittaker was the senior partner and his 2 sons Sean and Roger were employed in the accounting business as well. Sean was said to be very active in the KPL account. When Mr. Uehara decided they needed an in-house accountant, Whittaker and Associates was consulted and Roger set it up with the accused as a bookkeeper who stayed until 1998 or 1999 and then left. When the replacement bookkeepers did not work out, the accused returned to the job in 2001. Mr.

Uehara described her as a woman who did everything for KPL and as an indispensable office manager/bookkeeper who ran their North Vancouver office and performed all tasks particularly anything to do with money. She was a “go to person” and handled a whole host of issues including government compliance issues, payment of taxes and payroll and supplied year-end figures to the accountants at Whittaker and Associates. By about 2006 he said his reliance on the accused was pretty total. Mr.

Uehara said on a number of occasions in his interview that the accused was wholly trusted by him in the things she did for the company. This trust was so strong that Whittaker and Associates apparently never did a current or any audit of the KPL or company business or systems. Rather in the financial statements each year there would be notices to readers which I understood were somehow representations made at least in

part in lieu of a written

summary of audit findings. When Mr. Uehara explained this point to Constable Olson, namely the concept of notices to readers he said: And they, the notion was that because, you know, it was kind of an all in the family thing because they, they could trust what Heidi was doing so they did this and, and I don’t really see a problem with it. [ 10 ] Thus because of the trust he as president put in the accused, the wife of one of his outside accountants, he did not apparently request any audits prior to March 3, 2013 and for a similar reason I suggest this firm did not propose that one be done.

[ 11 ] I note parenthetically that when a university student many years ago I assisted doing current audits on a number of midsized companies. They are designed to check systems being used in businesses to see if they can be improved upon and to look for potential irregularities or risks for same occurring. [ 12 ] Mr. Uehara described KPL’s North Vancouver office to be pretty tight and (when he was there) said by way of an example that they ate lunch together everyday.

He also explained there was a time when she seemed greatly despondent so as a remedy, he cashed in some of his aeroplan points and sent her and an office colleague one Debbie to Mexico for a holiday. During his employer enabled holiday the accused took a cash advance on a for company use only credit card that she was not authorized to do. Later, Mr. Uehara thought in 2009, the accused reported this travelling companion to Mr. Uehara for allegedly defrauding KPL by using her credit card (Debbie’

s) to purchase Costco gift certificates for personal use by trading them for cash. He believed this report was made when the accused was already stealing from KPL; however this time line is unclear to me. [ 13 ] KPL had certain Visa credit cards with CIBC and TD bank in Mr. Uehara’s personal name (not in the company name) however with the name KPL thereon as well as one in the name of the accused. They were to be used to pay for KPL bills relating, for example, to purchases for KPL supplies but unbeknownst to Mr.

Uehara could also be used at bank machines or debit machines for cash advances each not exceeding $1,000.00. The accused had on one occasion increased the credit limit on one CIBC Aerogold Visa card to $35,000.00. [ 14 ] There were 3 such CIBC Visa cards, one in the accused’s name, one in Mr. Uehara’s name and one in his nanny’s name. [ 15 ] All the monthly credit card statements came to the KPL North Vancouver office and were dealt with only by the accused. Mr. Uehara said he never saw these statements. [ 16 ] There were 4 or 5 TD Visa cards, again with one in the accused’s name. Mr.

Uehara never activated his. [ 17 ] KPL could do online banking with CIBC. Mr. Uehara had no access to this account because he didn’t know the required password. Only the accused did. [ 18 ] Mr. Uehara explained that Northwest Angling Adventures was wholly purchased by his friend and business associate Hideo Morita in 1996 after he had earlier been a guest there on several occasions. In 1996 Mr. Uehara emigrated from Japan to B.C. to run KPL for Mr. Morita who continued to reside in Japan. [ 19 ] By April 2013, the company was in bankruptcy. Mr.

Morita, the sole shareholder was then its largest creditor having 11 million dollars of unsecured credit. Mr. Uehara was then considering buying his shares to make a proposal to take it out of bankruptcy. He personally held 2.5 or 2.7 million dollars of unsecured credit and said the company owed other unsecured creditors – for example customers who had made deposits for summer 2013 visits which would not happen – some 1.5 million dollars.

He said there were 250 reservations made for the summer of 2013 by clients who had made deposits to hold reservations of $600,000.00 all of which had been spent on current operations. Mr.

Uehara expressed an opinion to Constable Olson that the accused’s defalcations had bankrupted the company and in essence if the amount taken by her was still in the company that “we would have been ok” albeit things would have been tight. [ 20 ] In her role as bookkeeper/office manager of the company operating KPL the accused stole money from it: (1) using 2 CIBC Visa credit cards for 968 unauthorized cash advances between November 27, 2009 and December 27, 2012 of some $637,898.75 with associated fees of $2,653.50; (2) using a TD Visa credit card for some 82 cash advances of some $86,170.67 which monies counsel are both agreed were used for personal expenses; and (3) by means of writing 18 cheques to her parents with whom she lived in the amount of $105,494.37.

These 3 amounts total some $748,127.09. [ 21 ] I was not given a great deal of helpful accounting information at the sentencing hearing as to exactly how the accused made record entries to cover up her thefts but Mr. Uehara gave one example in his interview with Constable Olson. A customer would make a booking and pay a $4,000.00 deposit and then later cancel his booking and request a return of his deposit and the books would show that the deposit had been returned when it had not. I was told as well money was drawn by the accused from the KPL business account to pay off or pay down the credit card balances.

At year end altered and dishonest records were provided by the accused to her husband at Whittaker and Associates and they then prepared unaudited financial statements. It is very clear to me that there would have been numerous false entries made in the KPL books by the accused to cover her tracks in the 38 months she on average each month took $19,687.56 from KPL unbeknownst to Mr. Uehara or her husband, brother-in-law and father-in-law. Her dishonest scheme in my view had to have had some considerable sophistication to continue as long as it did without her being detected. CIRCUMSTANCES OF ACCUSED: [ 22 ] Mrs.

Whittaker is now 53 years of age. She has no criminal record. She left home at age 17 and married her husband Roger at about her age 25 and they have been married for some 28 years. He has been fully supportive of her throughout including attending with her in March 1, 2013 when she went to see Mr. Sudeyko then a practising criminal lawyer. [ 23 ] She has three grown children, two of whom, namely an employed son age 20 and an employed daughter age 19 now reside with her and her husband Roger and as well as a brother of hers and her two parents.

The home is owned as to 99% by her parents and as to 1% by Roger and she and her husband rent it or part of it from them. I was given no details as to the contributions made to their living costs by the 2 children, brother or her parents or their current incomes.

[ 24 ] Mrs. Whittaker has a high school equivalency education and learned to do bookkeeping on the job at KPL in the 1990’s. [ 25 ] Mrs. Whittaker is currently employed at Total Therapy Rehabilitation and Wellness Centre and has worked here as bookkeeper part time from 2007 to date now putting in 20 to 30 hours a month. [ 26 ] Since early 2015 she has worked full time doing bookkeeping with Tel Data Solutions Inc. some 37.5 hours a week. Its director Mr. Mallar is a personal friend. [ 27 ] Both her current employers are aware of her charges. [ 28 ] Both have provided references which I have reviewed.

Paul Moretto, the president of Total Therapy describes her as a trusted and loyal employee and offers continued employment. Mr. Mallar describes her as a friend and an invaluable employee who takes her work seriously and he too offers continued employment. Based on the hourly rates of pay Mr. Lucky has provided, I calculate that Mrs. Whittaker earns about $50,000.00 a year from these 2 jobs. [ 29 ] Mrs. Whittaker since the onset of COVID 19 has worked at home and would be able to continue to do so if I granted a conditional sentence order with a house arrest provision. Mr.

Lucky proposes that this employment be permitted to continue. Mr. Lucky advised that Mrs. Whittaker had signing authority historically on her parents’ bank accounts and paid their bills as well as all her own family bills including 5 credit cards and 2 lines of credit. I was advised that her husband, an accountant, never opened any of these account statements. Her parents had an initial $350,000.00 mortgage which she and her husband paid since about 2001. Mrs.

Whittaker is said to have taken $100,000.00 from her parents which money, or a large part was used indirectly for gambling and this has apparently necessitated a remortgaging of the property with a principal increase to $450,000.00 and this requires a monthly payment of some $2,800.00 which they continue to make. Mr. Lucky says that if Mrs. Whittaker’s income is taken away for any reason, there is a risk they would be unable to pay the mortgage on their home. [ 30 ] Mr. Lucky also provided certain land registry documents relating to the above family home which disclose the following facts:

(1) On May 1, 2013 a $312,500.00 mortgage with a one year term was charged against the property requiring a $3,390.00 monthly payment. The home was then owned by her 2 parents as joint tenants and the accused and her husband signed a covenant as part of the mortgage.

(2) On November 1, 2013 a new $435,000.00 mortgage with a 5 year term was charged on the property resulting a $1,968.79 monthly payment. The home was then shown to be owned 99% by the parents and as to 1% by Roger.

(3) On July 27, 2018 the property was charged with a new $525,000.00 mortgage.

(4) On August 1, 2020 what appears to be a second 1 year term mortgage of $190,000.00 was registered requiring a monthly payment of $1,686.00. [ 31 ] She is currently not on any medication and I was not advised that she has any serious medical conditions. [ 32 ] On February 28, 2013 according to Mr.

Lucky, the accused suffered a breakdown I understand in part because an audit was to be conducted at her employer’s place of business and she was concerned that her unlawful activity would be found out. [ 33 ] She made a decision to disclose her illegal activities firstly to her father-in-law, then a senior partner in his accounting firm. She did so on March 1 and he then brought her husband into the meeting. A meeting was then arranged with a lawyer Mr.

Sudeyko and a counsellor and they decided she should meet with the RCMP which she did that day. [ 34 ] In an affidavit sworn on November 22, 2019 she says in part “at that time, I was prepared to go to jail and take responsibility”.

She has made similar statements in this affidavit as to her feelings in the spring of 2017 and in 2018 (paragraphs 30 and 31). [ 35 ] She met with Constable Olson and gave a lengthy statement and provided many details concerning her fraudulent activities. [ 36 ] Later she met with the manager of the King Pacific Lodge and tried to give her as much information as she could, for example where to find files, computer passwords et cetera . Eventually KPL as I have said did go bankrupt. In her November 22 affidavit she says in

part in paragraph 20: I answered questions and cooperated fully with the trustees in bankruptcy. I’m sure my part did not help the situation, but the company was already drowning in debt (several million, if I remember correctly), especially since the 2008 recession. [ 37 ] In September 2013 at the request of Price Waterhouse, the bankruptcy trustee appointed for the lodge, she met with them and cooperated fully in their investigation. [ 38 ] Mrs. Whittaker has outlined in some detail her efforts to deal with what she says motivated her to break the law, namely a gambling addiction, after going to the police.

These include obtaining counselling through Kuldip Counselling and Consulting in or about mid-March 2013 and attending weekly Tuesday group meetings attended by persons with gambling issues. Her attendance at these meetings eventually was reduced to once every 2 to 3 months currently. She has helped in these groups from time to time as a mentor. [ 39 ] She has approached BCLC and self excluded herself from casinos since March 2013 for about 3 years and has not gambled since then. [ 40 ] Between 2014 and 2019 she has volunteered with her daughter’s soccer team doing certain administrative work. [ 41 ] Mrs.

Whittaker c oncludes her affidavit as follows in paragraphs 48 and 49:

48. Today, I reflect back and maybe I should have just kept the lie going and maybe nothing would have been discovered. I cannotsay what my emotional status would have been but I’s sure it wouldn’t be good. 49. I feel like I am being punished from the legal for coming forward. I came forward because I thought it was the right thing to do. Ithought I would be treated fairly. I believed in the police and legal system. I no longer do and am saddened by that. I’m also disheartenedin saying that it will ultimately go against me by coming forward as I did.

For the first few years I wholeheartedly stated that comingforward was the right thing to do. Now, I am not nearly so sure. I am not sure I would advise others to come forward to the police.Perhaps you should keep your secret until you are caught, if that ever comes to pass. These statements are concerning to me as to the extent of the remorse Mrs. Whittaker has with respect to her unlawful activity. I willreturn to this point later below. REFERENCES FOR ACCUSED: [42] In addition to Mr. Mallar and Mr. Moretto, Mrs.

Whittaker has obtained letters of reference from the following persons, all ofwhich where permissible in light of s. 380.1(2) of the CCC I have considered: (

a) Donna Niven (

b) Darrell Schmidt (

c) Samantha Jervis [43] In addition I have received and considered a letter dated December 2, 2013 the accused directed to the BC Ferries Corporation aswell as her personal statement dated November 13, 2020 which I will refer to below in these reasons. [44] Ms. Niven met the accused in the Problem Gambling program and found her to be very supportive and was of the opinion that itwas evident Mrs. Whittaker was committed to stop gambling. Mr. Schmidt is a friend and has used the accused to do booking and GSTreturns for him in his welding business for some 12 years. Ms.

Jervis, a former KPL employee (2006-2008) is also a friend of theaccused and feels that Mrs. Whittaker in her dealings with her showed deep regret, remorse and sadness for her actions. She also says inpart that many years after she left KPL in 2008 Heidi confided in her “that through the continued mistreatment and suffering she hadendured at work, she began to struggle with a gambling habit.” [45] Mrs. Whittaker alludes to this unhappiness in her March 6, 2019 2 page statement where she says: I never in a million lifetimes set out to deceive any one and especially steal.

I was in a very unhappy place with work and gamblingreached its ugly hand out to me which I grabbed whole heartedly. I brought shame to husband and family and to all people affected bymy actions. She also raised this issue with Dr. Riar who said this at page of his September 13, 2020 report: Around the time of my interview, she described her anxiety as fairly high, as well as her low mood. She mentioned that over the years,when she was working, there was a lot of anxiety and depression, as the work environment was not good and also what she was doing;initially taking the money.

Outside of work, there were family issues, as she was not spending much time at home. After work, she didnot spend much time at home. Although she was aware of it and felt guilty, she was not doing much to ameliorate the situation, as shewas busy visiting the casinos. [46] I have been given no other independent evidence to support the proposition that the accused’s work environment was an unhappyone for her. She was unsupervised, the office was small and said to be tight knit. On one occasion her boss Mr. Uehara paid for her totravel with a co-worker to Mexico for a holiday.

Her hours or work were flexible and she was often away from work when Mr. Ueharawas as well. [47] I turn now to the sentencing principles that I consider to be relevant in the case at bar. RELEVANT SENTENCING PRINCIPLES: [48] I have considered all the factors and principles set out in s. 718, s. 718.1 and s. 718.2 of the CCC and in particular s. 718.2(a)(iii)– abuse of a position of trust, s. 718.2(a)(iii) – the offence had a significant impact on the victim (her employer) – among the aggravatingfactors and importantly as well s. 718.2(

b) to (

c) inclusive. [49] The principles according to the case law placed before me particularly by Crown that are to be given the most weight aredenunciation and general deterrence. [50] In R. v. M.(C.A.) (1996) (SCC), 105 CCC(3d) 327 (referred to in R. v. Proulx at paragraph 100) Chief JusticeLamer in the SCC commented on what was meant by “denunciation” at paragraph 81 as follows: The objective of denunciation mandates that a sentence should also communicate society’s condemnation of that particular offender’sconduct.

In short, a sentence with a denunciatory element represents a symbolic, collective statement that the offender’s conduct shouldbe punished for encroaching on our society’s basic code of values as enshrined within our substantive criminal law… Our criminal law isalso a system of values. A sentence which expresses denunciation is simply the means by which these values are communicated.

Inshort, in addition to attaching negative consequences to undesirable behaviour, judicial sentences should also be imposed in a mannerwhich positively instils the basic set of communal values shared by all Canadians as expressed by the Criminal Code. As to general deterrence Ryan J.A. in R. v. Johnson (1996) (BC CA), 112 CCC (3d) 225 (BCCA) said this at page236:

The principle of deterrence as a goal of sentencing is embedded in our law. The Supreme Court of Canada has said so in C.A.M., theamendments to the Criminal Code specifically refer to it as a sentencing objective (see s. 718(b)). We must assume that deterrentsentences have some effect. It is futile to ask whether a particular sentence will deter others. That question can never be answered.Deterrence operates in a general way. Those that would break the law must know, and law-abiding citizens must be assured, that law-breakers will receive sentences which reflect the seriousness of their crimes.

This will deter some potential offenders, it will not deterothers. [51] As noted above Robertson JA in Spiller warned that a sentence should not be in effect be an incentive to those who mightconsider fraudulent conduct in the sense I understand as almost a reasonable price to pay if caught. Mr. Justice MacKay shared this viewin R. v. Willaert (1953) (ON CA), 105 CCC 172 (OCA) where he said in

part in discussing both general and specificdeference: The governing principle of deterrence is, within common sense, that the emotion of fear should be brought into play so that the offendermay be made afraid to offend again and also so that others who may have contemplated offending will be restrained by the samecontrolling emotion.

Society must be reasonably assured that the punishment meted out to one will not actually encourage others, andwhen some form of crime has become widespread the element of deterrence must look more to the restraining of others than to the actualoffender before the court: [52] I agree with Mr. Lucky that specific deterrence is not a factor in this case particularly if the accused stays away (or is kept awayby court orders) from frequenting gambling establishments of any kind.

I doubt that she will easily obtain future employment where sheis unsupervised and in control of any employer’s banking or related activities. I am also mindful of the efforts she has made to deal withthe gambling addiction diagnosed by Dr.

Riar. [53] Rehabilitation is always in my view an important factor but here to her credit the accused has already taken active steps throughcounselling to deal with her propensity to gamble and thus it is of less significance in the case at bar. [54] The overarching or cardinal principle of sentencing must always be to attempt to craft a sentence that is proportionate to thegravity of the offence and the degree of responsibility or moral blameworthiness of the offender. This statement is said to embody the“proportionality principle” (see R. v. Kodimyala [2020] BCJ No. 1583 (BCCA). [55] I turn now to a

summary of most of the cases Crown and defence have provided to me. CROWN CASES: [56] Ms. Hulko submits that the range of sentence in a case like the case at bar is a jail sentence of between 3 to 5 years based on whatshe has called 2 foundational cases on point, namely decisions of our British Columbia Court of Appeal in R. v. Spiller (BC CA), [1969] BCJ No. 354 and R. v. Hoy (BC CA), [1998] BCJ No. 1649. She also relies on a later appellatedecision in R. v.

Dreger [2014] BCJ No. 333. [57] In Spiller a Royal Bank proof teller between April 1964 and September 1968 defrauded her employer of some $492,000.00 usingwhat Mr. Justice Robertson described as a very complicated and intricate process requiring an extremely high degree of skill andcompetency. She was charged with both fraud and an additional count of falsification of the books of the bank. The trial judge sentencedher to 3 years in jail and Crown appealed arguing that the sentence was inordinately light. The Court of Appeal doubled this sentence to 6years. [58] In doing so Mr.

Justice Robertson focussed on the following factors: (

a) a 3 year sentence was almost an incentive to steal whereas in Spiller there was “extreme premeditation and a careful schemecarried out diligently over a long time and it was in the public interest that a sentence would be a real deterrent to others – a proper areaof concentration in the sentence; (

b) rehabilitation was not a factor as the accused was religious, educated and a hard worker; (

c) punishment of the accused who was in a position of trust as a bank employee; (

d) in crimes of the sort in issue – general good character of the accused was not a mitigating factor especially where the accusedused her apparent good character to perpetuate her crime; (

e) her guilty plea was a mitigating factor but not one that any significant weight could be attributed to as the accused knew that shewas inescapably caught; (

f) the thefts were carefully thought out, executed over a period of more than four years and elaborate steps were taken to preventdetection of in aggregate an astronomical amount of money. [59] In giving a sentence of 6 years felt to be sufficient to deter others, Mr.

Justice Robertson said this at paragraph 22: 22 The particular class that must be deterred here includes employees of banks, trust companies, savings and loan associations and anumber of other types of financial institutions: in fact, the employees of all corporations where large sums of money and the indiciathereof come in and go out and opportunities for thefts of large sums exist or may appear to the employees to exist.

In my respectfulopinion, a sentence of three years’ imprisonment for the theft from a financial institution of almost half a million dollars over a period ofabout four and a half years is inadequate, and grossly inadequate, to deter others from trying the same thing. One can well imagine somepeople being tempted by such a thought as this: if I can get away with $200,000 before I am caught and cache it where it cannot befound, I shall be sentenced to only three years; with good behaviour I shall be out in little more than two years and I shall live for the restof my life on what I stole.

Something much more than three years is needed to deter people who would entertain such thoughts. With

respect, I think that the sentence of three years was inordinately light. [ 60 ] In Hoy , an insurance and mutual funds salesman of previous good character was found guilty of 6 counts of fraud after stealing some $370,000.00 from 6 clients in a series of manipulations and was sentenced to 3 years in jail. [ 61 ] The trial judge found that what the accused did was done deliberately, knowingly and with a full understanding that it was wrong. At trial, he attempted to justify his actions by shifting the blame to associates. He was not truthful in giving his evidence.

Neither on appeal nor at trial apparently, did defence counsel seek a conditional sentence order. [ 62 ] McEachern CJBC said this at paragraph 6 of the Court’s reasons: [6] Mr. La Liberte did not specifically seek a conditional sentence in this case and we do not find it necessary, therefore to pronounce on that interesting question in this context. While I have some personal sympathy with this submission that Mr.

La Liberte made regarding the usefulness or otherwise of a custodial sentence in the case of this kind, I cannot help but comment that this is an offence where there may be more value or more usefulness in the principle of general deterrence than in many other types of offences.

The people in the local financial community, at least, those who know about this matter, and no doubt there will be a considerable number, will recognize that it is simply not acceptable, although they probably already know that, to steal from clients, at least, they will now understand that there are serious legal consequences as the law now stands when that happens and when it is discovered. [ 63 ] The trial judge’s sentence was upheld. [ 64 ] In Dreger , a bookkeeper in a small family operated residential construction company defrauded her employer over a period of approximately 7 years of some $257,100.00 using the money for personal expenses including clothing, restaurant meals and travel. [ 65 ] Her personal visa statements (unlike in the case at bar) were before the Court no doubt allowing the trial judge an opportunity to assess using the best evidence just how she had in fact spent the ill-gotten gains. [ 66 ] As a result of the thefts, the company suffered annual losses which she blamed in communications with her brother, the company’s outside accountant responsible for auditing the company’s books, on the company having a bad spending habit and in communications with the owner on his wife’s extravagant spending habits which he wrongly believed to be true and led in part to his marriage later deteriorating.

His business had been significantly damaged by her actions. [ 67 ] The accused pled guilty was sentenced to 5 years in jail and consented to a civil judgment in the full amount however had paid nothing towards restitution prior to the appeal. [ 68 ] The trial judge sentenced her to 5 years in jail based on finding 5 separate aggravating factors to exist including the severe impact her crime had had on her employer’s business – an aggravating factor under s. 380.1 of the CCC. [ 69 ] Bennett JA in giving the decision of our Court of Appeal noted (in paragraph 41) that sentencing ranges served merely as guidelines and were not conclusive of the appropriate sentence in any given case quoting Finch CJBC in R. v.

Joseph 2004 BCCA 268 paragraph 35 . Suggested ranges were merely guidelines designed to assist trial judges in their difficult task of fashioning fit and just sentences in similar cases. She then in paragraph 42 of her reasons referred to the case of R. v. Nasogaluak 2010 SCC 6 (at paragraph 44 ) as follows: 42 Indeed, in R. v. Nasogaluak , 20210 SCC 6, the Court said, at para. 44: The wide discretion granted to sentencing judges has limits.

It is fettered in part by the case law that has set down, in some circumstances, general ranges of sentences for particular offences, to encourage greater consistency between sentencing decisions in accordance with the principle of parity enshrined in the Code . But it must be remembered that, while courts should pay heed to these ranges, they are guidelines rather than hard and fast rules. A judge can order a sentence outside that range as long as it is in accordance with the principles and objectives of sentencing.

Thus, a sentence falling outside the regular range of appropriate sentences is not necessarily unfit .

Regard must be had to all the circumstances of the offence and the offender, and to the needs of the community in which the offence occurred. [Emphasis added.] [ 70 ] In Dreger the Court found that the trial judge’s finding that her expression of remorse not being genuine was an aggravating factor was in error as a lack of remorse is not an aggravating factor that tended to increase the severity of a sentence. (See paragraphs 50 and 45). [ 71 ] Bennett JA noted that the Court had been provided with sentencing decisions with a range of 3 to 5 years and while agreeing Ms.

Dreger’s case fit within this range said that it would be incorrect to see this (range) as an inflexible set range of sentence. The Court reduced the trial judge’s sentence by 1 year to 4 years in jail but upheld the restitution order made by the trial judge finding inter alia that the accused had no criminal record, was motivated by greed, had plead guilty early on but had committed a significant fraud over 7 years, against an employer who trusted her involving a substantial sum of money and that her moral blameworthiness was high.

General deterrence was said to be a “significant sentencing factor.” [ 72 ] In R. v. Davidson [2012] BCJ No. 2791 the Court of Appeal upheld a trial decision of a 1 year conditional sentence order followed by 18 month probation rejecting a submission that it was excessive where the accused over 5 years while the treasurer of the Vancouver Firefighters Band – a self-governing non-profit society stole some $102,143.15. He used the Band debit card to withdraw funds at ATM’s and used the money to purchase goods or services for himself.

Neilson JA at paragraph 28 of the Court’s reasons noted that over the 6 years of periodic thefts, the accused had many opportunities to consider the propriety of what he was doing and the consequences if he was caught but nonetheless continued with his criminal activity.

[73] In R. v. Beggs 2003 BCSC 261 , [2003] BCJ No. 433 the accused, a CRA employee with no criminal record working inthe upper levels of security clearance accessed the system and fraudulently over a period of 4 years provided herself, friends,acquaintances and various family members with $221,434.96 worth of credits and refunds under various government programs.

She wascharged with 9 counts of fraud, 1 count of misuse of taxpayer information and 1 count of income tax evasion and sentenced afterpleading guilty to 4 years in prison concurrent on all counts and ordered to pay restitution eventually of some $103,235.00, the amountshe benefitted from in the various defalcations. [74] She appealed focussing in part on the facts that she had no previous criminal record and had pled guilty to the offence. Ryan JAalso noted that her offences were motivated by her addiction to both drugs and alcohol. The money as in the case at bar had not beenrecovered.

The Court held that the accused had badly abused her position of trust not only to her employer but to the citizens of Canada.The Court dismissed the appeal finding that the sentence reflected the goals of denunciation and deterrence. [75] In R. v. Maddalena [2015] BCJ No. 2886 Masonville J sentenced the accused employed in an accounting capacity by hisemployer who between December 2003 and May 2006 defrauded it by manipulating the payroll system in every pay period andoverpaying himself by some $205,286.44.

When found out, the employer sued the accused civilly obtaining a judgment for the entireamount, none of which had been recovered on the date of the sentencing hearing. [76] The accused was first charged in September 2012 some 6 years and 4 months after his last fraudulent act and following a trialwas convicted in September 2015 some 9 years later. [77] The accused had a criminal record – an 18 month conditional sentence order for defrauding the City of Vancouver in 2001 whilehe had plead guilty when charged and paid full restitution.

As well, he was on bail for part of the time he was defrauding his employer inthe case at hand. [78] The Crown sought a sentence of 5 to 6 years, whereas the defence proposed a sentence of 2 to 3 years. [79] The Court found the accused was in a position of trust and that in committing the frauds, the accused had both altered anddestroyed certain payroll records. [80] Various cases were considered by the Court including both Spiller and Dreger above. [81] The Court found that there was no known motivation for the offence but that the amounts taken would have enhanced hislifestyle.

He had been through bankruptcy and there was a question he could ever make restitution of the money taken. [82] Maisonville J considered in sentencing the fact that the offence occurred some 9½ years earlier and that the accused was recentlysuffering from mental instability due to stress. [83] She concluded that due to his previous criminal record and for reasons of deterrence and denunciation and his breach of trust,that a term of incarceration was required set at 4 years.

In addition a DNA order was made and via s. 738 CCC – a restitution order. [84] Crown has provided me with 2 decisions of this Court. [85] In R. v.

Bakker December 1, 2018 Kelowna Registry #85878 Cartwright PCJ sentenced an 86 year old accused to 2 years infederal prison following his guilty plea for a charge of defrauding a non-profit faith based charity of $389,334.00 over a period of 10years while acting as its bookkeeper, treasurer and chair of its board of directors and was at all material times a paid employee thereof.He was in a position of trust and his work involved in part picking up cash from a charity operated thrift store and doing banking. Heregularly skimmed money from the store’s daily revenues.

To cover his tracks, he caused bank statements to be sent to his home andshowed them to no one. When the charity became concerned about its bank balance and appointed a CGA to conduct a review, theaccused was reluctant for some 6 months after his engagement to provide requisite documents all of which he kept at his home but dideventually provide them all. [86] The review disclosed that the accused at times paid himself double what he ought to have done and in addition had caused thecharity to pay certain of his personal expenses, for example his car insurance.

He kept 2 sets of books and was found to be very skilled indoing so. [87] Cartwright PCJ found that his fraud was wide ranging requiring at least 2,000 dishonest acts over a period of 10 years. He paidnothing in restitution but did pay some $23,000.00 back to the charity during the years he was stealing from it. [88] He plead guilty at the earliest opportunity and no trial date was ever set. He had no previous criminal record. When hecommenced work at the charity, he was suffering anxiety, stress and financial issues.

In addition according to his doctor he hadnumerous health issues and the Court was provided with a medical opinion that the stress of jail for an elderly first time offender couldexacerbate these pre-existing health problems. Cartwright PCJ accepted that he was vulnerable physically and mentally due to his age. [89] The Court noted that the money the accused took went into his bank account and pockets as his personal bank records seized in aproduction order disclosed.

He had committed thousands of deliberate dishonest acts and had been inescapably caught. [90] Cartwright PCJ held that our Court of Appeal had imposed or affirmed custodial sentences of 3 to 6 years in cases similar to thecase at bar. The principle of general deterrence and denunciation were paramount. After considering the aggravating and mitigatingfactors Cartwright PCJ said this at paragraphs 55-57 of her reasons: [55] Mr. Bakker’s case falls within the Court of Appeal cases which set the range for similar offences of three to five years.

But for hisage and age-related health problems, I find that the appropriate sentence would have been four years and would not be prepared to ordera CSO in such a case. A CSO simply does not meet the sentencing principles of general deterrence and denunciation in this case and Isay this due to the length of time the fraud continued, the thousands of illegal actions, the lying and deception used to hide the fraud, and

the nature of the victims, the poorest people in the world. [56] However, Mr. Bakker has some exceptional circumstances. He is 86 years old, 87 next April. He has health issues, I do accept thatincarceration would be harder on him emotionally, psychologically, and perhaps physically than it would be for a younger offender. Thisis the question, does this mean that I should order, instead, a conditional sentence? [57] I find that the exceptional circumstances do not warrant a conditional sentence order particularly in light of the very strongaggravating features of this case.

I do find that I can order a shorter sentence in view of Mr. Bakker’s age and the anticipated hardship onhim of jail. Accordingly, I find that a sentence of two years in custody would be appropriate. He is, therefore, sentenced to two years, afederal sentence, on Count 1 of this information. [91] In R. v. Marr [2008] BCJ No. 995, Judge Challenger of this Court sentenced a company accountant, bookkeeper and managerwho had been given the sole access to and conduct of the company’s finances, and who stole some $913,527.00 over some 56 months bymeans of various electronic transfers to her bank account.

Her employer was a family owned business who treated the accused like amember of their own family. The accused argued she was driven to commit these acts due to an out of control addiction to cocaine, dueto her depression following her brother’s death and which use was undetected by both her husband and employer. Following herdetection the accused completed addiction treatment and Challenger PCJ was of the view that her relapse was highly unlikely. Indiscussing the impact her actions had had on the company’s business and its employers Challenger PCJ noted in paragraph 17 thefollowing: 17 Not only did Ms.

Marr cause loss to the owners of the business, she also caused significant losses to other employees. The companywas operating in a manner which did not allow for any kind of bonuses or raises and many were laid off. Some of these employees were20 to 30 year employees of the company. As to the accused’s addiction to cocaine being the cause of her criminal behaviour, she said this at paragraph 20: 20 It is argued by Ms. Marr that the cause of her criminal conduct was addiction rather than greed. However, the evidence in this matteris to the effect that Ms.

Marr was, throughout the period she was stealing, otherwise fully functioning as a rational and responsibleperson. She chose to turn to her employer's assets before exhausting her own. She continued to do so until her health intervened. [92] She held following R. v. Quinn SCBC N.W. Reg. No.X066517-2 April 15, 2005 a decision of Brine J who followed R. v. McIvor(1996) 1996 ABCA 154 , 106 CCC (3d) 285 (Alta. CA) that the accused’s addiction was a neutral factor for purposes ofsentencing and in essence neither a mitigating factor nor an exceptional circumstance. [93] I note parenthetically that Mr.

Lucky for the defence says that neither of these 2 cases are any longer representative of the law inB.C. in light of the more recent decision in R. v. Pentilla 2020 BCCA 63 in our Court of Appeal. I will deal with this below where Idiscuss the cases relied on by the defence. I note in R. v. Quinn Mr.

Justice Brine sentenced an ICBC employee who over some 4 yearscaused ICBC to pay to her some $424,687.11 by means of using a sophisticated scheme largely in reliance on her creation of falsepayables and authorizations and the use of a number of bank accounts for fictitious companies all under her control and her deliberatelymisfiling files on which fraudulent payments had been made.

She cooperated with the forensic audit after she had been found out andblamed her wrong doing in discussions with both ICBC and the RCMP on her use of the stolen money to feed her gambling addiction. [94] Unlike in the case at bar, the accused’s bank account information Mastercard credit cards and fictitious accounts were before theCourt which showed that a considerable portion of the money taken was used for personal purposes said to supplement a life stylebeyond that which the accused could afford on her salary.

These included purchases of jewellery, facials, spa charges, a cruise,accommodation in the Okanagan and in Arizona, clothing, shoes and cellphone charges. Crown counsel argued that as to the balance ofthe funds taken and not spent as above, there was no evidence – unlike in the case at bar, that the missing money was spent in casinos orin using slot machines. Crown did not accept in Quinn that the accused had a gambling addiction. [95] Crown sought a sentence of 4 to 5 years and defence a conditional sentence order. Brine J. agreed it was unlikely the accusedwould reoffend.

He felt the authorities suggested a range of sentence of a conditional sentence order to 4 to 5 years in jail. He agreed thatthe delay from the start of the investigation to the trial was a mitigating factor (paragraph 33). There was no expert evidence to supportthe allegation that Mrs. Quinn had a gambling addiction or its effects. He said that he was troubled that there was no independentcorroborative evidence supporting her gambling such as credit or Interact card use at any casino.

He did accept however that she spent asignificant amount of the money she took at casinos. [96] At the time of her sentencing hearing the accused was supporting and was the primary caregiver to her elderly mother age 95 andhad the support of her husband and grown children. [97] Mr. Justice Brine following R. v. McIvor (Alta CA) and the reasoning in R. v. P.T. [2005] BCJ No. 362 (BCPC) was not of theview that a conditional sentence order would satisfy the two paramount principles of sentencing, in particular denunciation and generaldeterrence, in s. 718 of the CCC.

He said this in paragraph 54 of his reasons about the aggravating – breach of trust: The actions of Ms. Quinn, a person who was accorded a considerable measure of trust, deference and respect by both her employerand her co-workers, and utilized that position during the course of the commission of this crime, merits significant condemnation. As amatter of necessity, trust is regularly reposed in people in all walks of life. Indeed, without being able to trust others, life as we know itwould become paralysed.

Trust is afforded to babysitters, teachers, doctors, lawyers, members of the clergy, and of course employees inall manner of occupations. Without an ability to trust one’s employees, businesses would have great difficulty functioning. Those whobreach that trust are generally dealt with severely. [98] He felt it would not be appropriate to sentence Ms. Quinn to a term of less than 2 years and his sentence was 3½ years with arestitution order [99] Returning to R. v. Marr, in considering whether or not to impose a conditional sentence order as sought by her defence counsel,

Challenger PCJ said this at paragraphs 32-34 and 37 of her reasons: 32 I derive from the authorities the following: that in cases of this kind incarceration is more likely to effect general deterrence becausethose who commit those who commit these kinds of offences are generally of good character and will be deterred by the prospect ofincarceration. Also, these authorities make very clear that general deterrence is to be given the most weight in sentencing. 33 In any event, specific deterrence and rehabilitation have already been effected on Ms.

Marr through the process of detection andprosecution. 34 Despite the very able and helpful submissions of counsel for Ms. Marr, I find that the appropriate range of sentence in this matterinvolves, at minimum, a three-year sentence. I therefore need not consider whether a conditional sentence ought to be imposed. However,I do agree with various comments in the authorities to the effect that, in any event, a conditional sentence order would not have met theprinciple of general deterrence. 37 Small family-owned businesses are the backbone of Canadian economy.

In order to operate, their employees must be trustworthy.Without such trust, most small businesses would fail because they would be unable to operate due to the cost of monitoring and security.A strong message must be sent that regardless of one’s good character or weaknesses due to illness or addiction this kind of conduct willbe met by significant penal consequences. [100] Judge Challenger sentenced Ms. Marr to 4 years in jail. DEFENSE CASES: [101] I turn now to a

summary of the various cases relied upon by the defence. Mr. Lucky says that these authorities clearly suggest thatthe range of sentence for cases similar to that at bar starts with a conditional sentence order of 2 years less 1 day. [102] Defence relies on some 32 cases in support of Mrs. Whittaker’s position that a fit and just sentence in this matter taking intoaccount all relevant principles in s. 718 of the CCC would be a conditional sentence order of 2 years less a day and probation of 2 yearsto follow.

The reasons for 13 of these cases are included in the Defence Sentencing Book of Authorities as follows: 1. HMTQ v. Proulx, 2000 SCC 5 2. HMTQ v. Bunn, 2000 SCC 9 3. HMTQ v. Kratky (October 8, 1997) Vancouver, S97-1973 4. R. v. Burkart, 2006 BCCA 446 5. R. v. Houde, 2005 BCPC 632 , 2005 BCPC 0632 6. R. v. Eby, 2005 YKSC 56 7. R. v. M.K.M., 2007 BCPC 58 , 2007 BCPC 0058 8. R. v. Keatley, 2009 BCPC 249 , 2009 BCPC 0249 9. R. v. Milligan, 2017 BCPC 66 10. R. v. Ross and Dawson, 2020 NSSC 70 , 2020 NSSC70 11. R. v. Anderson, 2018 BCSC 2062 12. R. v. Roberts, 2019 BCSC 338 13. R. v. Penttila, 2020 BCCA 63 [103] Mr.

Lucky has helpfully summarized the result in some 19 other fraud cases from various Canadian courts including the appealcourts in Alberta, Saskatchewan, Ontario and Quebec in a

Summary of Case Laws found at tab 14 of the above brief. [104] I have reviewed and considered this

summary. As with the Crown cases and above cases, the facts summarized with respect tothese 19 cases make them distinguishable from those in the case at bar. They are nonetheless examples of where a court in each and evenwhere the amount defrauded exceeded $1 million, saw fit to impose a conditional sentence order typically of 2 years less 1 day. [105] I turn now to a review of the 13 defence cases where reasons were provided. [106] In R. v.

Proulx, the accused was convicted of dangerous driving causing death and one count of dangerous driving causing bodilyharm and was sentenced to 18 months in jail as the trial judge felt a conditional sentence would not meet the relevant sentencingprinciples of denunciation and general deterrence. On appeal, the Manitoba Court of Appeal imposed a conditional sentence order of 18months which on a Crown appeal to the Supreme Court of Canada was reversed and the trial sentence reinstated. [107] Chief Justice Lamer gave the decision of the Court.

He pointed out that a conditional sentence order (“CSO”) was a meaningfulalternative to incarceration for less serious and non-dangerous offenders (paragraph 21). The CSO is also a punitive sanction capable ofachieving the objectives of denunciation and derrence. (Paragraph 22). Thus he reasoned, CSO’s should generally include punitiveconditions that are restrictive of the offender’s liberty such as house arrest or strict curfews which should be the norm and not theexception. (Paragraph 36).

[ 108 ] Lamer CJ pointed out the obvious that offenders serving conditional sentences in the community are only partially deprived of their freedom, nor are they deprived of their private life to the same extent as with incarceration in a jail. (Paragraph 40). He said that a CSO will usually be a more lenient sentence than a jail term of equivalent duration. (Paragraph 44). At paragraph 45 of the Court’s reasons, he set out the 4 part test which I must consider in addressing Mr.

Lucky’s submission in this case as follows: This provision lists four criteria that a court must consider before deciding to impose a conditional sentence: (1) the offender must be convicted of an offence that is not punishable by a minimum term of imprisonment; (2) the court must impose a term of imprisonment of less than two years; (3) the safety of the community would not be endangered by the offender serving the sentence in the community; and (4) a conditional sentence would be consistent with the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2.

In my view, the first three criteria are prerequisites to any conditional sentence. These prerequisites answer the question of whether or not a conditional is possible in the circumstances. Once they are met, the next question is whether a conditional sentence is appropriate. This decision turns upon a consideration of the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2.

I will discuss each of these elements in turn. [ 109 ] He rejected a rigid “two step” approach being used by trial judges whereby they first determined if a fixed term (of less than 2 years) was appropriate and then determined if it could be served in the community as against real jail (paragraph 58) and said this in part thereat and in paragraphs 59 and 60: 50 In making this preliminary determination, the judge need only consider the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2 to the extent necessary to narrow the range of sentence for the offender.

The submissions of the parties, although not binding, may prove helpful in this regard. For example, both parties may agree that the appropriate range of sentence is a term of imprisonment of less than two year. 60 Once that preliminary determination is made, and assuming the other statutory prerequisites are met, the judge should then proceed to the second stage of the analysis: determining whether a conditional sentence would be consistent with the fundamental purpose and principles of sentencing set out in ss. 718 to 718.2.

Unlike the first stage, the principles of sentencing are now considered comprehensively.

Further, it is at the second stage that the duration and venue of the sentence should be determined, and, if a conditional sentence, the conditions to be imposed. [ 110 ] Ultimately the “overarching duty of a sentencing judge” is to draw upon all the legitimate principles of sentencing to determine a “just and appropriate” sentence which reflects the gravity of the offence committed and the moral blameworthiness of the offender. (Paragraph 61) (See s. 718.2 of the CCC ). [ 111 ] Assuming the first 3 parts of the above test are met in the trial judge’s analysis, he or she must then consider as a fourth step the CCC sentencing principles.

Lamer CJ said this on point at paragraph 75: A consideration of the principles set out in ss. 718 to 718.2 will determine whether the offender should serve his or her sentence in the community or in jail.

The sentencing principles also inform the determination of the duration of these sentences and, if a conditional sentence, the nature of the conditions to be imposed. [ 112 ] At paragraph 81 Lamer CJ notes that sentencing is an individualized process stemming from the fundamental principle of sentencing – the principle of proportionality which provides that a sentence must be proportional to the gravity of the offence and the degree of responsibility or moral blameworthiness of the offender.

He said in part here: Proportionality requires an examination of the specific circumstances of both the offender and the offence so that the “punishment fits the crime” [ 113 ] He rejected setting “starting points” or presumptions for types of sentences in particular or specific types of crimes noting in paragraph 86: In the case on conditional sentences, however, the statutory prerequisites of s. 742.1 considerably narrow the range of cases in which a conditional sentence may be imposed.

A conditional sentence may only be imposed on non-dangerous offenders who would otherwise have received a jail sentence of less than two years. [ 114 ] Where a conditional sentence can achieve the objectives of denunciation and deterrence as effectively as incarceration s. 718.2(

d) and (

e) of the CCC (principle of restraint) suggest a CSO is preferable to incarceration. (See paragraph 100). [ 115 ] In his discussion of what would be an appropriate term for a CSO having a denunciatory effect Lamer CJ said: (

a) that this could be provided if for example the term of the CSO were extended beyond the term of the jail sentence that would ordinarily be imposed in the circumstances; and (

b) if serious conditions such as house arrest were to be imposed. (Paragraph 100). [ 116 ] He observed that as a general matter, the more serious the offence and the greater the need for denunciation, the longer and more onerous the CSO should be, (paragraph 105) but also observed that there may be certain circumstances in which the need for denunciation is so pressing that incarceration will be the only suitable way in which to express society’s condemnation of the offender’s conduct.

[ 117 ] As to deterrence, Lamer CJ said this at paragraph 105: (ii) Deterrence Incarceration, which is ordinarily a harsher sanction, may provide more deterrence than a conditional sentence. Judges should be wary, however, placing too much weight on deterrence when choosing between a conditional sentence and incarceration: see Wismayer , supra , at p. 36. The empirical evidence suggests that the deterrent effect of incarceration is uncertain: see generally Sentencing Reform: A Canadian Approach , supra , pp. 136-37.

Moreover, a conditional sentence can provide significant deterrence if sufficiently punitive conditions are imposed and the public is made aware of the severity of these sentences. There is also the possibility of deterrence through the use of community service orders, including those in which the offender may be obliged to speak to members of the community about the evils of the particular criminal conduct in which he or she engaged, assuming the offender were amenable to such a condition. Nevertheless, there may be circumstances in which the need for deterrence will warrant incarceration.

This will depend in part on whether the offence is one in which the effects of incarceration are likely to have a real deterrent effect, as well as on the circumstances of the community in which the offences were committed. [ 118 ] Paragraph 114 Lamer CJ commented on the objectives of denunciation and deterrence as follows: 114 Where punitive objectives such as denunciation and deterrence are particularly pressing, such as cases in which there are aggravating circumstances, incarceration will generally be the preferable sanction.

This may be so notwithstanding the fact that restorative goals might be achieved by a conditional sentence. Conversely, a conditional sentence may provide sufficient denunciation and deterrence, even in cases in which restorative objectives are of diminished importance, depending on the nature of the conditions imposed, the duration of the conditional sentence, and the circumstances of the offender and the community in which the conditional sentence is to be served.

Finally, it bears pointing out that a conditional sentence may be imposed even in circumstances where there are aggravating circumstances to the offence or the offender. Aggravating circumstances will obviously increase the need for denunciation and deterrence. However, it would be a mistake to rule out the possibility of a conditional sentence ab initio simply because aggravating factors are present.

I repeat that each case must be considered individually. [ 119 ] Lamer CJ noted that the trial judge in the case before the Court had imposed an 18 month jail sentence primarily finding that the principles of denunciation and general deterrence required it notwithstanding that she found that such a sentence was not required for self-deterrence of the accused or necessary for his rehabilitation. He upheld the trial sentence while admitting had he been the trial judge he might have imposed a CSO. [ 120 ] I have taken some time to attempt to summarize the sentencing principles n R. v.

Proulx because it is clearly a foundational case at the heart of Mr. Lucky’s submission. [ 121 ] In R. v. Bunn , a lawyer wrongly in 145 separate transactions over a period of 3 years and 7 months transferred $86,000.00 from his trust account to his general account. [ 122 ] On discovery he was suspended and later disbarred. He had a disabled wife and one teenage daughter and was their sole source of financial support. He was sentenced to 2 years in jail which on appeal was reduced to a CSO of 2 years less 1 day with a condition of 200 hours of community service.

The Manitoba Court of Appeal felt that the ruin and humiliation the accused had brought down on himself and family could be considered as part of the denunciation and deterrence his sentence provided. [ 123 ] In R. v. Kratky, a part time manager/bookkeeper of 3 dental clinics involving 9 dentists, who defrauded them of some $436,535.00 over a period of some 4 years by stealing cash, altering payees on cheques and in pretending to pay legitimate clinic accounts, transferred the money to herself was given an 18 month CSO by Curtis J with house arrest from 7:00 p.m. to 7:00 a.m. daily.

The accused had prior to sentence consented to a judgment (as had her husband) of approximately $1 million all in favour of the 9 dentists of which some $608,000.00 had been repaid prior to sentencing by means of the sale of joint assets.

The Crown agreed that the appropriate range of sentence was 18 months to 2 years less a day and took no position on the granting or refusal of a CSO. [ 124 ] In Burkart , the accused, a manager of the TD Bank stole $81,400.00 over a period of 1 year by means of writing cheques and moving trust money to cover shortfalls in her own account and was given an 18 month jail sentence at trial reversed on appeal by our B.C. Court of Appeal to a CSO of 18 months with apparently 24/7 house arrest subject to exceptions, for example employment.

The Court of Appeal also imposed a condition that the accused must reveal her criminal status to any prospective employer. The accused had a gambling problem. The Crown’s sentencing position at trial was from the high end of provincial time to the low end of the federal time but that a CSO could be considered.

Our Court of Appeal found that the trial judge had erred in stating there needed to be “unusual circumstances” before a CSO could be considered in cases like Burkart where there was no such requirement. [ 125 ] I note that in this case there was little evidence (at least in the Court of Appeal reasons) as to whether or not the accused’s gambling was an addiction (or merely a “problem”) and whether it led to her thefts or caused them in whole or in part. [ 126 ] In R. v.

Houde , the manager of the Chemainus Credit Union stole some $168,000.00 over a 9½ month period by means of certain transactions in a company that he claimed that was a competitor to the credit union unbeknownst to his employer and whereby he used his position of trust to put it at risk in order to develop and enhance his own business. The accused when found out was fired and barred for life from employment in a financial institution. At the time of sentencing hearing the accused was in the process finalizing an agreement to resolve all outstanding civil claims.

He then owned a new franchise business in Nanaimo and said if he were jailed he could not be on site as required by the franchisor or earn money to make restitution.

Quantz PCJ at paragraph 54 of his reasons after referring to a number of cases where CSO’s had been granted said this: [54] It is apparent from these and other authorities that the kinds of extreme mitigating circumstances that may give rise to a conditional sentence order include prohibitions from employment by professional associations, extreme public humiliation and embarrassment, extreme hardship to the defendants if jail is imposed, lack of financial benefit from the fraud, an early guilty plea,

personal sacrifices by the accused to make restitution and health problems suffered by the accused and their families. It is in the contextof this law and applying these authorities that I consider the aggravating and mitigating circumstances in this case. [127] He imposed a 2 year less 1 day CSO noting as one reason (paragraph 57) that he was satisfied that over a 5 year period or less, theaccused had an ability to make full restitution.

He also considered as a mitigating factor the shame and humiliation associated with thepublicity of his wrongdoing in his small community resulting the loss of his wife’s business and his move from Ladysmith to Nanaimo. [128] In R. v.

Eby, the accused, a program officer with the Yukon Housing Corporation and responsible for loaning people moneydefrauded it in a conspiracy with her husband in 2 transactions, one involving a fake loan application for a total of $318,575.00 and waswith her husband given a 15 month CSO with house arrest requiring her to remain inside her residence with 8 exceptions if granted by herCSO supervisor including working or seeking work or a business opportunity. In addition she was ordered to do 150 hours of communitywork service.

Noteworthy in this case was the fact that both accuseds (husband and wife) had 2 years prior to the sentencing hearingcompleted repayment secured by several mortgages and spousal guarantees and that one of the two fraudulent loans ($158,000.00) hadbeen then paid in full and the other was being repaid at $1,111.39 a month with the accuseds having doubled their required payment forthe 6 months April to September each year commencing in 2003, 2 years prior to the sentencing hearing. [129] In R. v.

M.K.M., Judge Dossa of this Court granted a CSO of 2 years less 1 day to an accounts receivable clerk employed byCalloway Golf who over 1½ years credited some 50 discounts for purchases of golf equipment to her own personal credit card in the totalamount of $262,912.00. Calloway was fully reimbursed for its loss by its insurance company save for a $2,934.00 deductible amount.The money was used for herself and to buy gifts for her daughter.

Dossa PCJ held that the accused was in a position of trust but notedthat she was not in a position to make restitution (in her brief comments on aggravating factors) notwithstanding her full timeemployment over 2 years prior to sentencing. One CSO term imposed required that the accused not to engage in any employment orvolunteer activity that involved handling money that was not her own.

Another imposed a curfew from 9:00 p.m. to 6:00 a.m. with theusual exception, for example attending work and yet another term was100 hours of community service work. [130] In Keatley, Hicks PCJ sentenced an assistant manager of a credit union who over approximately 15 months in some 60 fraudulenttransactions stole some $537,267.00 by means of paying on her Mastercard from funds in the company accounts. She made chequespayable to fictitious names, deposited cheques fraudulently to her own account via bank machines and then retrieved and destroyed thecheques manipulating company systems to achieve her purpose.

He imposed a CSO of 2 years less 1 day with a house arrest curfew from9:00 p.m. to 6:00 a.m. providing exceptions as her CSO supervisor might permit in writing and 75 hours of community service work andin addition with further terms that she was to abstain from any form of gambling, not to be in a gambling establishment and that she mustinform her current or a future employer of her conviction. [131] Her defalcations were discovered on March 3, 2008 and the next day by email she advised the credit union that she had agambling addiction and Hicks PCJ accepted that the money she stole was used to support this habit and that prior to her sentencing shehad taken a 7 month counselling program and had entered into a consent order in civil proceedings secured with a mortgage against herhome in favour of the credit union for the amount of the loss and that she was committed to the repayment of the money she took.

Hefound her husband was unaware of her problem. There was evidence before him of fraudulent credit card transactions originating fromcasinos and no evidence to suggest she lived an extravagant life style. Crown did not dispute that she gambled apparently all the moneytaken. At paragraph 33 of his reasons Hicks PCJ said this as to her gambling: [33] The issue then is whether the sentence should be served in a conventional jail setting or whether community supervision by wayof a conditional sentence order will be an appropriate means by which to address sentencing objectives.

In addressing this issue, I takeaccount of the circumstances of this offence, which I noted a moment ago. I also take account of Ms. Keatley's extreme remorse. This iswell documented in the letter filed by her daughter. Whether or not a gambling addiction or habit should be treated as mitigating, the factis that Ms. Keatley has readily sought counselling for it and has abstained from involvement and is determined to continue that way. Sheattends Gamblers Anonymous regularly. She is prepared to take further counselling.

I also take account of the fact that she has lost heremployment, has been embarrassed and humiliated, both among her friends and former colleagues, and publicly because it is evidentfrom the concerns of the credit union members that this fraud became a matter of public knowledge. [132] In R. v.

Milligan, Morgan PCJ sentenced an account manager of a resort holding some signing authority for cheques when theCEO was absent and who could print cheques on the company system to a CSO for 2 years less a day for defrauding her employer over24 months by some 67 fraudulent cheques totalling $76,479.20 wherein she forged the CEO signature and charged computer accountingentries to show fictitious payees whereas they were all paid to herself.

The loss was to some extent covered and the accused agreed torepay the insurance company $3,000.00 each quarter by way of postdated cheques – 2 of the 4 issued prior to the sentencing hearinghaving been returned NSF. Nonetheless she indicated she continued to desire to make full restitution. [133] Morgan PCJ reviewed many of the cases put before me and found in several it was a significant mitigating factor that restitutionhad been paid – in R. v. Hammond 2004 BCPC 320 , 2004 BCPC 0320 – almost the full amount.

He did not think the fraud theaccused perpetrated could be called sophisticated or that it took much planning. He did feel that her fraudulent activity had some impacton the employers of the company, described as a tight knit group. Ultimately the CSO imposed provided for house arrest in the first 18months with the usual exception including absences therefrom for employment.

In the final 6 months less one day he placed the accusedon a curfew from 7:00 p.m. to 6:00 a.m. with the same exception and made a restitution order within the CSO requiring her to repay theresort not less than $500.00 per month each month but only for the duration of the CSO. In addition he made a stand alone restitutionorder in favour of the resort for the full amount of the loss less $6,000.00 she had repaid and less any restitution paid pursuant to theCSO. He ordered her in addition to complete 80 hours community service work. [134] In R. v.

Ross and Dawson, Chipman J sentenced 2 accuseds whom the Crown alleged had defrauded the federal government ofsome $2 million in manipulating a procurement process whereby the government did not obtain best prices from the competitor bidders. [135] Mr. Ross, a government purchasing officer was in a position of trust which position he abused on a regular basis in just over 4years of fraudulent activity none of which he personally benefitted from. Mr.

Dawson was a substantial beneficiary of these frauds.Chipman J could not find the case before him to be a large scale fraud or very sophisticated or complicated and never determined the

actual amount of the loss save to state it was more than $5,000.00. He imposed a CSO on each accused of 2 years less 1 day with the only non-statutory mandated term being that they each perform 120 hours of community service work within the first 18 months of their sentence. [ 136 ] In R. v. Anderson , Whetherill J sentenced the accused on fraud charges where he allowed a company he owned to receive $2 million (US) essentially in trust but in breach permitted it to be transferred to a Spanish corporation expecting thereby to make a large profit which due to the scam being perpetrated on him never occurred.

He thus received no benefit for the fraud. The Crown sought 5 years and Mr. Anderson sought a CSO. The accused lost his home as a result of this fraud, was a judgment debtor as to about 1.6 million US to payor of the original sum but had made restitution of some $450,000.00 US. Weatherill J nonetheless found that it was unlikely the accused would be ever be able to make full restitution to the payor of the initial $2 million US. He sentenced Anderson to a CSO 2 years less 1 day and the only non-mandatory term he imposed was that he perform 50 hours community service work. [ 137 ] In R. v.

Roberts , Shergill J sentenced the accused, a manager of a road building company who between February 2 and 13, 2007 provided grossly false accounts receivable information on the president’s instructions in order to secure a $7 million dollar line of credit which was granted. The accused both knew the information was false – an overstatement of the company’s assets of $13.5 million and that the bank would rely on it. On the day the credit line was opened, the company drew the full amount and paid off an existing line of credit to the Royal Bank.

At some point when the company’s current account was in overdraft the bank pressed its client for information with respect to the current value of its accounts receivable and the president admitted he had inflated the earlier figures. The bank sought a bankruptcy order against the company and its president and when it concluded, the bank was out $6,030,688.00. [ 138 ] The Court found that the accused had no responsibility to keep company books or make entries therein but was aware each month the corporate accounts receivable were much less than the figures given to the bank.

The accused at no time tried to conceal what he had done during the bankruptcy process. [ 139 ] Following the bankruptcy the accused started his own successful paving company which at the sentencing hearing employed 18 people including his wife. His character references were all positive. [ 140 ] Shergill J commenting on aggravating factors said this in paragraphs 86 and 87 of her reasons: [86] The fraud was complex and prolonged, lasting approximately one-and-a-half years. Despite the fact that the bank was a sophisticated victim with a number of internal safeguards and protocols, Mr. Roberts and Mr.

Brooks managed to dupe it out of a substantial amount of money. Perpetrating and maintaining a fraud of this magnitude against the bank required thought and planning. [87] However, I note that many of the cases relied on by the Crown have substantially more aggravating factors than the case at bar. For example:

a) They often involve a breach of trust. Breach of trust is considered an aggravating circumstance in the Criminal Code . Breach of trust is not present in this case.

b) They frequently involve multiple victims who are particularly vulnerable, and who have lost their life savings. This is not to minimize the impact of this crime on the bank, but rather to recognize that the ability of a victim to recover from a loss that is committed by virtue of the fraud can be an aggravating factor. That factor does not exist in this case.

c) These cases generally involve a sham rather than a legitimate business. The business is set up as a vehicle to commit the fraud. In contrast, Mr. Brook

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