R. v. Strowbridge, 2014 NLCA 4

Date: 201402 04 Docket: 13/12 Citation: R. v. Strowbridge , 2014 NLCA 4 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN: DONALD JOHN STROWBRIDGE APPELLANT AND: HER MAJESTY THE QUEEN RESPONDENT Coram: Rowe, Harrington and Hoegg JJ.A. Court Appealed From: Provincial Court of Newfoundland and Labrador St. John’s Appeal Heard: November 13, 2013 Judgment Rendered: February 4, 2014 Reasons for Judgment by Hoegg J.A. Concurred in by Rowe and Harrington, J.A. Counsel for the Appellant: Derek Hogan Counsel for the Respondent: Carmel Penney for the Provincial Crown Neil Smith for the Federal Crown Hoegg, J.A.: BACKGROUND

[1] On February 21, 2013 Donald Strowbridge was sentenced for seven offences: 1) fraud under $5,000 (re Phyllis Keats), for which he received 90 days’ imprisonment and three years’ probation and was ordered topay restitution of $1,150 pursuant to the probation order; 2) a related breach of probation, for which he received 90 days’ imprisonment concurrent to the fraud sentence regarding Ms.

Keats; 3) fraud under $5,000 (re Diane Stone), for which he received 90 days’ imprisonment consecutive and was ordered to pay restitutionof $574.88 pursuant to the three-year probation order; 4) a related breach of probation, for which he received 90 days’ imprisonment concurrent to the fraud sentence regarding Ms. Stone; 5) a breach of probation for failing to pay restitution of $2,145, for which he received 90 days’ imprisonment consecutive; 6) selling copyrighted products in violation of section 42(1)(

b) of the Copyright Act, RSC 1985 c.C-42 for which he received 180 daysconsecutive and a fine of $5,000; and 7) selling trademark goods without authority in violation of

section 408(b) ‒ 412(1) of the Criminal Code, for which he received 180days’ imprisonment concurrent to his sentence for the Copyright Act violation. The copyright and trademark offences are supported by the same facts. [2] Mr. Strowbridge appeals the term of his probation ordering that he pay restitution, the six-month custodial sentences forthe trademark and copyright offences, and the $5,000 fine for the copyright offence. Standard of Review [3] The standard of review on sentence appeals was summarized by Lebel J. in R. v.

Nasogaluak, 2010 SCC 6, [2010] 1 S.C.R. 20at para. 46: [46] Appellate courts grant sentencing judges considerable deference when reviewing the fitness of a sentence. In M. (C.A.), Lamer C.J.cautioned that a sentence could only be interfered with if it was “demonstrably unfit” or if it reflected an error in principle, the failure toconsider a relevant factor, or the over-emphasis of a relevant factor (para. 90; see also R. v. L.M., 2008 SCC 31, [2008] 2 S.C.R. 163, atparas. 14-15; R. v. Proulx, 2000 SCC 5, [2000] 1 S.C.R. 61, at paras. 123-26; R. v. McDonnell, (SCC), [1997] 1 S.C.R.948, at paras. 14-17; R. v.

Shropshire, (SCC), [1995] 4 S.C.R. 227). As Laskin J.A. explained in R. v. McKnight (1999), (ON CA), 135 C.C.C. (3d) 41 (Ont. C.A.), at para. 35, however, this does not mean that appellate courts can interferewith a sentence simply because they would have weighed the relevant factors differently[.] This standard of review was held to apply to appeals respecting restitution ordered on sentencing in R. v. Castro, 2010 ONCA 718. Iagree. The Restitution Order Facts [4] The facts which gave rise to the restitution order involve two distinct frauds. The first one concerns Diane Stone, who lived inHarbour Breton.

She contracted with Mr. Strowbridge, who worked out of St. John’s, to buy used auto parts costing $1,150. Mr.Strowbridge promised to ship the car parts to Ms. Stone upon receipt of the funds. Ms. Stone sent Mr. Strowbridge $150 and arrangedfor her brother to personally deliver the balance of $1,000. She did not receive the car parts. She contacted Mr. Strowbridge, and afterseveral weeks of him promising that the car parts were about to be shipped or that they had been shipped and them not arriving, Ms.Stone complained to the police. Police investigation revealed that Mr.

Strowbridge had received payment for the car parts, but that hehad neither had the car parts nor shipped them to Ms. Stone. [5] The second fraud concerned Diane Keats, who lived in Corner Brook. In November 2010 Ms. Keats contracted with Mr.Strowbridge to buy a used car transmission for $574.88. Ms. Keats deposited the funds into Mr. Strowbridge’s bank account, but did notreceive the transmission as promised. She contacted Mr. Strowbridge, who at first said that he would ship it, and later that he hadshipped it. Ms.

Keats did not receive it, so she complained to the Better Business Bureau, which directed her to the police. Mr.Strowbridge admitted to police that he received Ms. Keats’ money and that he did not have the transmission nor had he shipped it to Ms.Keats. [6] In sentencing Mr. Strowbridge, the judge ordered him to pay restitution to Ms. Stone and Ms. Keats as a term of his probation. Mr. Strowbridge appeals the restitution order on the basis that the judge ought to have ordered restitution pursuant to a stand-alone orderunder paragraph 738(1)(

a) of the Criminal Code and not as a term of his probation. He argues that by ordering restitution as part of hisprobation, the sentencing judge has set him up for a charge of breach of probation with possible penal consequences, whereas he wouldnot be so liable had he been ordered to pay restitution pursuant to a subsection 738(1) order. Mr. Strowbridge maintains that hisprospects for gainful employment are dim and that, even if he finds work, he would not likely earn more than minimum wage, whichwould not give him the financial ability to pay the restitution ordered.

He says that he already owes $17,845 in fines and/or restitutionorders unrelated to the within matters as well as a civil debt of $49,000 and the $5,000 fine imposed for the within copyright offence. [7]

Section 732.1(3)(

h) provides a court with the authority to order restitution as a condition of a probation order. It reads:

(3) The court may prescribe, as additional conditions of a probation order, that the offender do one or more of the following: . . . (

h) comply with such other reasonable conditions as the court considers desirable, subject to any regulations made under subsection738(2), for protecting society and for facilitating the offender’s successful reintegration into the community. This subsection, though only referring to reasonable conditions, has been held to authorize a court to order restitution pursuant to aprobation order. (See Clayton C. Ruby, et al., Sentencing 7th Ed. (Markham, Ont.: Lexus Nexus Canada, 2008 at page 645, paragraph19.31).) (Prior to 1995, the authority to order restitution pursuant to probation was specifically authorized by then paragraph 737(2)(6). In September 1996,

section 732.1 was enacted. Some subsections providing for specific types of terms in probation orders in section737(2)(6) were not included in the new subsection 732.1(3), although subsection (

h) was added, which provides a court with the generalauthority to impose conditions pursuant to probation orders provided they are reasonable.) [8] Section 738(1)(

a) provides for a court to make a stand-alone restitution order in respect of the loss of property: (

a) in the case of damage to, or the loss or destruction of, the property of any person as a result of the commission of the offence or thearrest or attempted arrest of the offender, by paying to the person an amount not exceeding the replacement value of the property as ofthe date the order is imposed, less the value of any part of the property that is returned to that person as of the date it is returned, wherethe amount is readily ascertainable … [9] In R. v. Zelensky, (SCC), [1978] 2 S.C.R. 940, the constitutional validity of stand-alone restitution orders (thenordered under

section 653 and now ordered under

section 738) was challenged. [10] In deciding that then

section 653 was enacted ancillary to the exercise of the federal criminal law power and henceconstitutionally valid as part of the sentencing process, Chief Justice Laskin also discussed then section 663(2)(

e) which provided that aCourt could require an offender to make restitution to an aggrieved party by imposing a restitution term in that offender’s probationorder. In so doing, the Chief Justice implicitly approved of Regina v. Groves, [1977] C.R.N.S. 366, an Ontario Superior Court decisionupholding the constitutional validity of section 663(2)(e)under the federal criminal law power. The Chief Justice noted no differencebetween stand-alone restitution orders and those ordered pursuant to probation, save for the question of enforcement, and observed that awilful breach of a probation order was an offence punishable on

summary conviction. (Emphasis added.) [11] The objectives and factors to be taken into account when a court is considering ordering restitution were set out in Zelensky. This Court referenced those objectives and factors as summarized in R. v. Devgan (1999), (ON CA), 136 C.C.C. (3d)238 (Ont. C.A.) in R. v. Minot, 2011 NLCA 7, at paragraph 85: [85] 1. An order for compensation should be made with restraint and caution; 2. The concept of compensation is essential to the sentencing process: (

i) it emphasizes the sanction imposed upon the offender; (ii) it makes the accused responsible for making restitution to the victim; (iii) it prevents the accused from profiting from crime; and (iv) it provides a convenient, rapid and inexpensive means of recovery for the victim; 3. A sentencing judge should consider; (

i) the purpose of the aggrieved person in invoking s. 725(1) [now s. 738]; (ii) whether civil proceedings have been initiated and are being pursued; and (iii) the means of the offender. 4. A compensation order should not be used as a substitute for civil proceedings. Parliament did not intend that compensation orderswould displace the civil remedies necessary to ensure full compensation to victims. 5. A compensation order is not the appropriate mechanism to unravel involved commercial transactions; 6.

A compensation order should not be granted when it would require the criminal court to interpret written documents to determine theamount of money sought through the order. The loss should be capable of ready calculation. 7. A compensation order should not be granted if the effect of provincial legislation would have to be considered in order to determinewhat order should be made; 8. Any serious contest on legal or factual issues should signal a denial of recourse to an order; 9. Double recovery can be prevented by the jurisdiction of the civil courts to require proper accounting of all sums recovered; and

10. A compensation order may be appropriate where a related civil judgment has been rendered unenforceable as a result of bankruptcy. [12] In addition to Devgan and Minot, these factors were recently considered in Castro, where the offender appealed the impositionof a stand-alone restitution order requiring him to pay a total of $141,752 to accident victims whom he had defrauded. The sentencingjudge had found the offender to have future prospects for work although he was unemployed and receiving a disability pension of $900per month at the time of sentencing.

The offender appealed on the basis that the sentencing judge had failed to consider his ability to payrestitution.

The appellate Court upheld the judge’s order for restitution saying at paragraph 27: Reviewing courts have, however, consistently held that no single factor is itself determinative of whether a compensation order should begranted and that the weight to be given to individual considerations will depend on the circumstances of each case. … and at paragraph 35: To summarize, a restitution order is simply part of the determination of an overall fit sentence, and general sentencing principles apply.While consideration of the offender's ability to pay and the impact of a restitution order on an offender's rehabilitation are factors to beconsidered, the weight to be given to these factors will vary depending on the nature of the offence and the circumstances of theoffender. … Also, at paragraph 43 of Castro, the court observed: The comment that a restitution order should be made with restraint and caution is sometimes taken out of context as a free-standing brakeon the making of a compensation order.

The comment by Laskin C.J.C. in Zelensky regarding restraint and caution was made in thecontext of a broader statement that the purpose of a compensation order should not be to enforce a civil obligation, particularly where theamount taken is unclear; rather, the purpose of a compensation order is as part of the sentence: see Zelensky, at pp. 961-62 S.C.R.

Thefact that a restitution order provides a convenient, rapid and inexpensive means of recovery for the victim, especially a vulnerable victim,is one of the considerations in favour of the making of such an order. (Emphasis added.) [13] The same court applied similar reasoning in R. v. Trac, 2013 ONCA 246. I note that both Castro and Trac concerned restitutionordered pursuant to

section 738. [14] In R. v. Debaat, [1992] B.C.J. No. 1045, the British Columbia Court of Appeal considered factors necessary for a court toconsider in ordering restitution as a term of probation. In Debaat, the appellate court remitted the probation order containing therestitution term to the sentencing court to determine 1) the actual amount of loss or damage sustained by the victim(

s) in respect of whomrestitution could be ordered, and 2) whether the offender had the means to pay restitution. The Court stated that no separate or formalinquiry is necessary preliminary to the prescribing of a restitution term, but “there should … be facts before the sentencing judge to showthat the amount of restitution or separation ordered is for actual loss or damage sustained by the person aggrieved or injured and that theconvicted person has the means to pay it.” [15] Mr. Strowbridge relies on R. v. Scherer (1984), (ON CA), 16 C.C.C. (3d) 30 (Ont. C.A.) to support hisposition.

In Scherer, the offender was a lawyer who was convicted of theft for misappropriating trust funds to cover his personal stockmarket losses. Mr. Scherer was ordered by the trial judge to pay restitution of $2,000,000 pursuant to a stand-alone restitution order.

Inthe course of upholding the restitution order, Martin J.A. distinguished a stand-alone restitution order from a restitution order madepursuant to a probation order, observing that when a court is considering making a restitution order as a term of probation, it ought tohave regard to the offender’s means to pay and to satisfy itself that the restitution term can reasonably be complied with so as not toinvite a breach of probation. [16] The distinction between a subsection 738(1) order for restitution and a restitution order pursuant to probation did not arise at thesentencing hearing. Mr.

Strowbridge did not request that restitution be ordered pursuant to subsection 738(1) and his counsel advised theCourt that he took no issue with the conditions of probation when the judge asked. [17] Mr. Strowbridge’s argument begs the question of what a trial judge must consider when he or she is contemplating orderingrestitution pursuant to a term of probation.

Are the considerations in these cases different from those involving restitution pursuant to astand-alone order, due to the possibility of a criminal law sanction? [18] It is clear from the jurisprudence that an offender’s means to pay must be considered when a judge is considering orderingrestitution (Zelensky, Devgan, Castro, Trac and Debaat).

Section 732.1(3)(

h) stipulates that a term of probation imposed under thissubsection must be “reasonable”. That means when payment of restitution is ordered as a condition of probation, the condition to payrestitution must be reasonable. Accordingly, the questions for this Court are whether the judge considered Mr. Strowbridge’s means topay, and whether his ordering that Mr. Strowbridge pay restitution as a condition of his probation was reasonable. [19] Mr. Strowbridge testified at his sentencing hearing. During direct examination, he was asked by the judge if he felt he wouldbe able to pay court-ordered restitution.

He replied: My God, yes of course, Your Honour. First and foremost is to get all and any money back to those victims. They must’ve suffered great[delay] and of course if I’m incarcerated I have no way and then I don’t know they’ll ever get the money back, so I would be only more,more than happy to work extra hard probably with the help of Dr. Ladha and Dr. Dennis O’Keefe. [20] Mr. Strowbridge also testified that working had never been an issue for him and that he had been doing it since he was 13. [21] It is clear from the record of the sentencing hearing that the judge considered Mr.

Strowbridge’s means to pay restitution to Ms.Stone and Ms. Keats. The judge asked Mr. Strowbridge and received assurances from him that he would compensate his victims. Thejudge also took account of Mr. Strowbridge’s work history from Ms. Strowbridge and also from the pre-sentence report, which noted

that Mr. Strowbridge stated his desire to “get clear of the criminal justice system” and that he fully intended to return the money to the two women he defrauded. The judge also considered that the two fraud victims were ordinary people entitled to rely on Mr. Strowbridge’s assurances that he was operating a legitimate car parts business and that they would get the merchandise they purchased. (Ms. Stone and Ms.

Keats both filed victim impact statements detailing the effects of the frauds on them.) In considering the impact of the fraud on the victims, the judge observed that “a dollar … means very different things to different people”. He ordered Mr. Strowbridge to pay restitution pursuant to probation in the knowledge that it was leverage on Mr. Strowbridge to reimburse relatively modest amounts of money to the women whom he defrauded. The judge stated as much to Mr. Strowbridge, with a warning that if he did not do so, he would find himself back in court. [ 22 ] Mr.

Strowbridge’s position, that this Court should quash the term of probation requiring him to pay restitution to Ms. Stone and Ms. Keats and substitute a stand-alone restitution order on the basis of his anticipated difficulty in paying it, is effectively a plea for not having to pay restitution at all. A

section 738 restitution order would not motivate Mr. Strowbridge to pay his victims for there would be no effective consequences of his not doing so. [ 23 ] Restitution orders made pursuant to probation provide several advantages to the criminal justice system distinct from the advantages of

section 738 orders. Probation orders are time specific. Offenders therefore have a

schedule or timeline within which an offender can pay the restitution. Such a timeline provides incentive, encouragement and support to the offender in honouring the terms, thus serving as a reminder to him or her of the responsibility to acknowledge the harm he or she inflicted. This promotes a sense of responsibility in the offender and he or she learns that what he or she did was wrong (section 718(f)).

Timelines also assist in providing reparations for the harms done to victims (section 718(e)). [ 24 ] Ordering restitution pursuant to probation acknowledges the reality that offenders will be motivated to comply with the terms of their probation orders so as to avoid a breach charge. In this regard, I note that in order for an offender to be convicted of breaching a condition of his probation, the Crown must prove that the offender committed the breach “without reasonable excuse.” A conviction for breaching a probation order is not automatic.

It is not a simple matter of an offender not paying the restitution; mens rea is part of the offense. This is the safeguard against restitution orders pursuant to probation leading to a modern version of “debtors’ prison”.

Enforcement through the criminal law is the main difference between the two ways restitution can be ordered, and this leverage is usually why restitution pursuant to probation is chosen over stand-alone restitution orders by sentencing judges. [ 25 ] With respect to the sentencing objective of providing reparation to victims, I also observe that ordering restitution pursuant to probation is the only practical way, indeed the only effective way, victims such as Ms. Stone and Ms. Keats will be compensated. Ms. Stone and Ms.

Keats are not positioned, as some other fraud victims could be, to absorb losses or avail of remedies through the civil justice system. The judge’s order to pay restitution to Ms. Keats and Ms. Stone will provide some reparation for the harm done to them by Mr. Strowbridge as well as promote a sense of responsibility in Mr. Strowbridge for what he has done, thereby achieving in some measure the objectives of sentencing. A convenient, rapid and inexpensive means of recovery has long been held to be a legitimate objective of ordering restitution under the criminal law power ( Zelensky ).

Convenience, rapidity and inexpensiveness are enhanced when restitution is ordered as a condition of probation, thereby providing victims with better access to justice. As long as the order for restitution is reasonable, it is not at the expense of the offender. (See Devgan paragraph 85, Castro paragraph 43, and Trac paragraphs 35 and 36 ). [ 26 ] Given Mr. Strowbridge’s stated willingness to repay the money, his acknowledged ability to find work and the sentencing judge’s consideration of the appropriate factors including Mr. Strowbridge’s ability to pay restitution, ordering Mr.

Strowbridge to pay the relatively modest amount of $1,724.88 to his victims over time is not unreasonable. It therefore cannot be said that the judge erred in principle or exercised his discretion improperly. [ 27 ] Mr. Strowbridge’s probation is for a period of three years. He was released on bail pending the resolution of his appeal so he will have to serve more time before he will be in a position to earn money in order to pay the restitution. Payment of one hundred dollars per month for eighteen months would more than discharge the debt. This is not too much to ask of Mr.

Strowbridge, even if he is not earning a lot of money. He took this money from two trusting customers whose circumstances do not appear to be much better than his own. [ 28 ] Accordingly, the sentencing judge’s order for restitution pursuant to Mr. Strowbridge’s probation order stands, amended to provide that the $1,724.88 be paid within 24 months following Mr. Strowbridge’s release from custody. The six-month sentence for the copyright and trademark offences. [ 29 ] The facts supporting the copyright and trademark offences are that on October 29, 2010, Mr.

Strowbridge was observed selling items from a vehicle situated at an overpass in Paradise, NL. The items comprised ball caps, belt buckles and jerseys bearing counterfeit insignia of known sports teams, counterfeit brand name razor blades, and counterfeit hair styling flatirons. The items, valued at approximately $500, were seized. [ 30 ] The sentencing judge imposed a six-month custodial sentence on Mr. Strowbridge, as well as a $5,000 fine for the copyright offence. Mr.

Strowbridge argues that the six-month sentence is demonstrably unfit, and that the sentencing judge erred in principle by imposing the $5,000 fine. [ 31 ] There are no reported sentencing decisions in this province for violations of the trademark and copyright offences at issue. However, the following decisions from other jurisdictions provide useful guidance. [ 32 ] In R. v. Chen , 2004 BCPC 365 , an undercover police officer visited the offender’s store seven times and purchased products for a total cost of $2,108. Subsequent police investigation resulted in a seizure of counterfeit goods worth $50,000.

The offender, who had

no criminal record, pleaded guilty to one indictable charge under the Copyright Act. On a joint sentencing submission, she wassentenced to a 12-month conditional sentence and fined $2,500. [33] In R. v. Benchmuel, 2005 CarswellOnt 8928 (Ct.J.), the offender pleaded guilty to six (summary conviction) violations of theCopyright Act. He was a sportswear manufacturer, and affixed his products with counterfeit copyrighted labels. A seizure of almost1,000 items worth approximately $45,000 led to the charges. The offender had no criminal record, and stable roots and good standing inthe community.

On a joint sentencing submission, he received a six-month conditional sentence and fines totaling $6,000. [34] In R. v. Katebian, 2005 CarswellOnt 8931 (Ct.J.), two offenders were manufacturing yogurt products to which they affixedcounterfeit labels of a superior yogurt product. Police seized six to eight pallets of the offenders’ product as well as receipts showingsales of $70,000. Both offenders pleaded guilty to one breach of the Copyright Act by

summary conviction. Neither offender had acriminal record. On a joint sentencing submission, one offender was fined $10,000 and the other $8,000. [35] In R. v. Borge , (Ont. S.C.), two co-accused were convicted after trial of multiple Copyright Act

summaryconviction charges of selling counterfeit software. One hundred and fifty-five copies of the software as well as false certificates ofauthenticity were seized. One offender was sentenced to a fine of $75,000 and a 60-day intermittent prison term and the other offenderwas fined $30,000. On appeal, the first offender’s prison term was quashed and his fine was reduced to $50,000, and the secondoffender’s fine was reduced to $20,000. [36] In R. v.

Hirani, 2010 BCPC 209, the offender operated a retail store from which police seized “a wide and large inventory” ofcounterfeit products of “significant value”, along with related certificates of authenticity and business receipts showing an annualbusiness revenue of $581,261. The offender had no criminal record. He pleaded guilty to one breach of the Copyright Act by indictmentand received a conditional sentence of six months and a $4,000 fine. [37] In R. v. Campbell (1991), (NB PC), 121 N.B.R. (2d) 404 (P.C.), the offender attempted to sell T-shirts andsweatshirts emblazoned with the “Bart Simpson” crest.

The estimated profit to be gained from his anticipated sales was $2,300, althoughit was the offender’s employer, rather than the offender, who stood to profit from the venture. The offender pleaded guilty to oneCopyright Act charge by

summary conviction and was fined $500. [38] In R. v. Bing Min Peter Hu, (15 November 2008), Vancouver Docket 24383 (B.C.S.C.), the offender was convicted of 13breaches of the Copyright Act by indictment. Police had seized 300 counterfeit DVDs from the offender’s import/export business. Atthe time he committed the offence, the offender was on probation owing to previous similar convictions which had involved a greateramount of stock. The sentencing judge observed that Mr.

Hu’s financial circumstances were strained and that he had not finished payingthe $7,200 fine imposed the year before for his previous convictions. Crown counsel had requested a $10,000 fine and defence counselhad requested a $5,000 fine, but the judge, noting Mr. Hu’s financial circumstances and that it was Mr. Hu’s second offence, imposed asix-month conditional sentence. [39] In R. v. Garby, [2002] O.J. No. 3383 (Ont.

C.J.) the offender was convicted of charges of infringement of copyright for hispart, adjudged to be small, in a serious international problem related to the creation of modification chips intended for use in Sony PlayStation, Sega game and Microsoft Ex-box game units. He was fined $17,000.00, the payment of which was structured over time toaccount for his “modest personal circumstances”, and probation for 12 months.

He had no prior record. [40] It is worthy of note that when customers purchase goods from an ostensibly legitimate storefront operation, they would likelyhave a greater expectation of receiving genuine products than they would when purchasing goods from the back of a van parked at theside of a highway. This is not to minimize the wrong involved in knowingly selling counterfeit merchandise or the harm done tolegitimate holders of copyrights and trademarks.

Rather, it is simply to observe that while purchasers of counterfeit goods can bevictims, there is no indication that they were in this case. [41] In this case, Mr. Strowbridge was selling his wares from the back of a van parked next to the highway. The value of the goodsseized was approximately $500. Mr. Strowbridge’s operation, while economically motivated as all such operations are, was marginaland unsophisticated.

It was of a much lesser magnitude than the operations of the offenders in the above-referenced cases (exceptCampbell) where counterfeit goods were imported and/or manufactured in large quantities and sold in established commercialmarketplaces. [42] The judge observed the fact Mr. Strowbridge had been previously observed by police selling similar counterfeit items at theAvalon Mall in St.

John’s (at which time he was warned to discontinue) and at the intersection of Cowan Avenue and Topsail Road in St.John’s (at which time the officer took no action so as not to jeopardize a federal investigation he knew was ongoing). As well, arepresentative of the authorized distributor of the flatirons observed Mr. Strowbridge selling counterfeit flatirons in 2009 and warned himnot to do so. The judge also noted the aggravating facts of Mr. Strowbridge’s record and that he was serving a conditional sentence forfraud at the time he committed these offences. In mitigation, Mr.

Strowbridge pleaded guilty to the trademark and copyright offences,although he subsequently attempted, unsuccessfully to withdraw his guilty pleas. [43] Federal Crown counsel argued that the trial judge employed “the step-up principle” in sentencing Mr. Strowbridge, saying thatMr. Strowbridge was initially treated leniently by the Courts with fines and probation, then was graduated to a conditional sentencebefore being sentenced on these charges. Counsel argued that given Mr.

Strowbridge’s persistence in committing financially motivatedcrimes, the sentencing judge in this case logically raised his sentence for his continuing criminal activity to the next level ‒ that being acustodial sentence. [44] This argument was cogently presented and has certain merit. However, account must be taken of the marginal andunsophisticated nature of Mr. Strowbridge’s offences - it is those offences for which Mr. Strowbridge is being sentenced. While it is sothat the aggravating factors of Mr.

Strowbridge’s case weigh against a lenient sentence for him, sight must not be lost of the facts of theoffences before the Court. Mr. Strowbridge is not being sentenced for his record. [45] When compared to the cases referred to above, it is my view that the six month custodial sentence for Mr. Strowbridge’s

trademark and copyright offences is disproportionality long for the gravity of the offences he committed and his level of moral blameworthiness. Accordingly, it is demonstrably unfit. The $5,000 fine [ 46 ] In addition to a six-month custodial sentence, the sentencing judge imposed a $5,000 fine on Mr. Strowbridge for the copyright offence.

The judge rejected the federal Crown’s request for a $10,000 fine in addition to jail time but imposed the $5,000 fine reasoning that the offence was “financially motivated” and that he did not “want to impose a low fine that would be little more than a licence to commit the offence”. In his decision, the judge made no reference to or assessment of Mr. Strowbridge’s ability to pay such a fine. [ 47 ] Subsection 734(2) of the Criminal Code reads: Except when the punishment for an offence includes a minimum fine or a fine is imposed in lieu of a forfeiture order, a court may fine an offender under this

section only if the court is satisfied that the offender is able to pay the fine or discharge it under

section 736. (Subsection (8) makes this

section of the Criminal Code applicable to Copyright Act offences.) [ 48 ] Subsection 734(2) makes clear that in fining an offender, a judge is required to be satisfied that the offender has the ability to pay the fine before imposing it. In failing to apply the provisions of subsection 734(2) by assessing Mr. Strowbridge’s ability to pay the $5,000 fine, and to be satisfied that Mr. Strowbridge could do so, the judge committed an error in principle. Accordingly, the $5,000 fine he imposed on Mr. Strowbridge must be quashed. What is a fit sentence for the trademark and copyright offences? [ 49 ] Mr.

Strowbridge submits one month’s incarceration consecutive to his sentences for the two frauds and all breaches of probation is a suitable sentence for the copyright and trademark offences. [ 50 ] The fundamental sentencing principle is proportionality. While a custodial sentence for Mr. Strowbridge’s offences, given their nature and magnitude, could be disproportionate to their gravity and the level of his moral blameworthiness, the aggravating factors of Mr.

Strowbridge’s extensive record for “economic” type offences and the fact that he was serving a conditional sentence at the time he committed these offences, as well as the warnings he received about selling counterfeit products, make incarceration appropriate, as federal Crown counsel argued. In this regard, I note the comments by the British Columbia Court of Appeal in R. v. Bui , [2001] B.C.J. No. 1574 , to the effect that the imposition of a second conditional sentence on a person who offends while serving a conditional sentence should be reserved for “the rarest of cases”.

I would not state the point quite as strongly. Nevertheless, if an offender commits an offence while serving a conditional sentence, especially an offence of similar type to the one for which he is already serving a conditional sentence, he is demonstrating, at least to some degree, that he is not able to abide by the terms of a conditional sentence, thereby suggesting that an additional conditional sentence is not appropriate. I note this was the approach taken by the Nova Scotia Court of Appeal in R. v. Perrin , [2012] N.S.J.

No. 443, 2012 NSCA 85 , in which the court remarked that an offender who reoffends, while serving a conditional sentence would ordinarily attract a significant denunciating and deterrent sentence for the new offence. [ 51 ] In Mr.

Strowbridge’s case his financial situation, especially his financial obligations which now include a new restitution order, would make the imposition of a fine very burdensome to him. (In this regard, I am compelled to remark that I am of the view that it is more important for him to pay restitution to his fraud victims than to pay a fine to the federal Crown.) I therefore am not satisfied, as I must be according to section 734(2) of the Code , that he has the ability to pay a fine. I am of the same mind as the sentencing judge in Hu (noted above), who imposed a conditional sentence on Mr.

Hu due to his strained financial circumstances and the fact that he was a repeat offender. I hasten to add that I do not suggest that a custodial sentence should automatically be substituted for a fine in all cases where the offender does not have the ability to pay a fine. However, in cases where significant aggravating factors present, like in Mr. Strowbridge’s case, it can be appropriate. [ 52 ] Accordingly, I would sentence Mr. Strowbridge to two months’ incarceration for his trademark and copyright offences to be served consecutively to his sentences for fraud and breaches of probation. [ 53 ] In

summary, Mr. Strowbridge’s appeal of the term of his probation ordering restitution is dismissed, and the restitution term of his probation order is amended to provide that the $1,724.88 be paid within 24 months following Mr. Strowbridge’s release from custody. Mr. Strowbridge’s appeal of the $5,000 fine is allowed and the fine is quashed. His appeal of his six-month custodial sentence respecting the trademark and copyright offences is allowed and replaced by a custodial sentence of two months, to be served consecutively to his sentence on the fraud and breach of probation charges. L. R. Hoegg J.A. I Concur: M. H. Rowe J.A. I Concur: M. F. Harrington J.A.