R. v. Foianesi, 2011 MBCA 33

Citation: R. v. Foianesi, 2011 MBCA 33 Date: 20110411 Docket: AR 10-30-07439 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Barbara M. Hamilton Mr. Justice Martin H. Freedman Mr. Justice Richard J. Chartier BETWEEN: HER MAJESTY THE QUEEN ) R. T. Amy ) for the Appellant Respondent ) ) A. Y. Kotler ) for the Respondent- and - ) ) Appeal heard: ) March 8, 2011LIVIO FOIANESI ) ) Judgment delivered: (Accused) Appellant ) April 11, 2011 CHARTIER J.A. INTRODUCTION AND ISSUES 1 This is a sentence appeal.

The accused pled guilty to one count of keeping a common gaming house contrary to s. 201(1)of the Criminal Code (the Code). The Crown acknowledges that this is the first prosecution for this type of offence in a very long time. The accused points out that the last reported case in this province dates back over 50 years (R. v. Zedd (1959), (MBCA), 126 C.C.C. 238 (C.A.)). 2 At the sentencing hearing, the accused asked for a conditional discharge, while the Crown sought a significant fine andforfeiture of monies found on the accused’s person.

The sentencing judge determined that general deterrence was the primary principleof sentencing for these types of offences. He rejected the discharge sentencing option, finding that it would be contrary to the publicinterest because it did not address general deterrence concerns. He imposed a fine in the amount of $14,000, inclusive of surcharge andcosts, and ordered forfeiture of part of the cash found on the accused at the time of arrest.

The amount forfeited totalled $2,364.02. 3 The principal issue on this appeal is whether the sentencing judge erred in his finding that general deterrence was theprimary principle of sentencing for these types of offences. STANDARD OF REVIEW 4 As was stated in R. v. L.M., 2008 SCC 31, [2008] 2 S.C.R. 163 at para. 14, an appellate court must show “great deference”when reviewing a sentencing decision. Unless there is an error in principle or the sentence is demonstrably unfit, this court will notintervene.

An error in principle includes failing to consider a relevant factor, taking into account an irrelevant factor, failing to givesufficient weight to a relevant factor or overemphasizing an appropriate factor (see R. v. Shropshire, (SCC), [1995] 4S.C.R. 227; R. v. M. (C.A.), (SCC), [1996] 1 S.C.R. 500; R. v. Rezaie (1996), (ON CA), 112 C.C.C.(3d) 97 (Ont. C.A.); and R. v. Solowan, 2008 SCC 62, [2008] 3 S.C.R. 309 at para. 16). THE FACTS 5 In 2006, the Winnipeg Police Service started an investigation into illegal “Texas Hold ’Em Poker” games which weretaking place at various establishments in the city.

Such games become illegal if there is a “house gain.” A house gain arises when thekeeper of the common gaming house gains money from the bets on, or the proceeds of, the game of chance which is played on thepremises (see s. 197 of the Code).

6 Although the accused was not a target of the original investigation, the police were drawn to him as a result ofadvertisements he posted on the Internet that there were regular cash Texas Hold ’Em Poker games at a location called “The PlayersClub.” Over an 11-week period, undercover police officers attended and participated in a number of poker games. After search warrantswere obtained, the accused’s residence, as well as The Players Club, were searched and the accused was arrested. 7 At the time of his arrest, the accused had $14,940 on his person.

The profit he realized from the poker games over the 11-week period was estimated to be between $8,250 and $12,375. THE DECISION OF THE SENTENCING JUDGE 8 In his comprehensive and well-written reasons, the sentencing judge accepted the Crown’s position that the paramountprinciple of sentencing for this offence is general deterrence. The sentencing judge wrote that this was a serious matter and that, becauseof the difficulty in detecting this type of crime, “general deterrence [was] the primary principle of sentencing for the court to consider inthese types of cases” (at para. 130).

He found (at paras. 132-33): … [A] discharge will not sufficiently address the issue of general deterrence. Had this been solely an issue of specific deterrence or hadthis been a matter that occurred once or twice, I would have had no issue concluding the opposite. Having concluded that a discharge does not answer the concerns of general deterrence I am of the view that a fine is warranted. …. ANALYSIS 9 What is clear from the above is that the sentencing judge found it would be contrary to the public interest to impose aconditional discharge because general deterrence was the primary principle of sentencing.

The accused submits that this focus ongeneral deterrence was an error in principle. He submits that the sentencing judge’s overemphasis on the principle of general deterrencecaused him to improperly reject the discharge provisions. 10 I agree with the general proposition that discharges should not be available when general deterrence is the paramountsentencing principle. The reason is simple. General deterrence always causes a sentence to be harsher than what it would normally be ifit was not a factor. See R. v. B.W.P.; R. v.

B.V.N., 2006 SCC 27, [2006] 1 S.C.R. 941 (at para. 36): Unlike some other factors in sentencing, general deterrence has a unilateral effect on the sentence. When it is applied as a factor insentencing, it will always serve to increase the penalty or make it harsher; its effect is never mitigating. …. As a result, and as was stated by Clayton C.

Ruby et al., Sentencing, 7th ed. (Markham: LexisNexis Canada Inc., 2008) at para. 9.17,“[a] need for general deterrence is inconsistent with a discharge.” Since the discharge is the most lenient sentence in the Code, anyincrease in penalty brought about by general deterrence will necessarily take away the discharge provisions as a possible sentencingoption. When general deterrence is the paramount sentencing consideration, the discharge will not be a sentencing option.

When it isnot the primary concern, there may be circumstances where the mitigating factors negate any increase in sentence, thereby leaving thedischarge available. 11 The question remains: Did the sentencing judge err when he found that general deterrence was the primary principle ofsentencing in this case? If he did not err, then, in my view, his finding on appellate review would be unassailable.

If he did err on thisquestion, it would be an error in principle and this court would be able to substitute its own view of the appropriate sentence in thecircumstances. 12 The theory that underlies the sentencing principle of general deterrence is that the punishment given will serve as an exampleto discourage others from engaging in that particular criminal activity (see B.W.P., at para. 2). Typically, general deterrence will bebrought to the forefront of the sentencing principles in two situations.

The first arises when the sentencing judge is dealing with a crimewhich is particularly heinous (murder, home invasions, crimes involving children or the vulnerable, etc.). Such crimes must always bedeterred. 13 The second arises when general deterrence can become a paramount consideration when sentencing an accused for a crimewhich, although not as serious as the ones stated above, is so prevalent in the community that it must be deterred in order to bring it undercontrol.

It has long been recognized that the prevalence of a particular crime in the community, or its absence, can be a relevantsentencing factor (see R. v. Marsden (D.G.), 2004 MBCA 121, 187 Man.R. (2d) 298 at para. 44; R. v. Priest (1996), (ON CA), 110 C.C.C. (3d) 289 at 293 (Ont. C.A); and R. v. C.D. (1991), (MB CA), 75 Man.R. (2d) 14 (C.A.)). Moreover, the frequency or prevalence of a particular offence will bring general deterrence into play when it might not otherwise havebeen an important consideration. See R. v. Sanchez-Pino (1973), (ON CA), 11 C.C.C. (2d) 53 (Ont.

C.A.), and R. v.Sears (1978), (ON CA), 39 C.C.C. (2d) 199 (Ont. C.A.) (at p. 200): The trial Judge indicated that in his area, charges of theft under $200 were “not just increasing, but soaring”, and he observed that in the

protection of society it is the deterrence of others that comes into play. We agree with the statement that in considering the appropriatesentence to be imposed in cases of shop-lifting or related offences, it is appropriate to consider whether in that particular community, atthat particular time, there appears to be an unusual amount of that type of crime, which therefore calls for a sentence which will reflect adegree of deterrence to others.

At the same time, that situation can never be more than one of the factors which is to be taken intoaccount, the paramount question of course always being: what should this offender receive for this offence, committed in thecircumstances under which it was committed? [underlining added] 14 So, what is the basis for the sentencing judge’s finding that “general deterrence is the primary principle of sentencing for thecourt to consider in these types of cases” (at para. 130)?

Although the judge described the offence in this case as a “serious matter” (atpara. 126), it cannot be seriously contended that the accused’s conduct falls anywhere near the “heinous” type of criminal activity thatusually brings general deterrence to the forefront. I say this for two reasons. First, unlike those offences which carry maximumsentences ranging from ten years to life imprisonment, this one carries a two-year maximum.

Second, the accused’s illegal conductmorphs into a lawful activity when it is conducted under the auspices of government control. 15 Neither can it be said that the offence in question has become prevalent in this jurisdiction. It is hard to accept that generaldeterrence should be the primary principle of sentencing when the last reported case in this province dates back over 50 years. 16 Finally, the basis for the sentencing judge’s emphasis on general deterrence cannot have arisen from the jurisprudence.

Anumber of the cases submitted from other jurisdictions show that conditional discharges were granted for these types of offences (see R.v. Iaconetti (R.) et al., 2002 ABQB 776, 324 A.R. 87, and R. v. Bateman, 2007 BCPC 413). More importantly, none of them expressedthe view that general deterrence should be the paramount consideration in such cases other than R. v. ARC Amusements Ltd. (1989), (NS CA), 93 N.S.R. (2d) 86 (S.C. (A.D.)), where the court stated (at para. 9): The primary sentencing principle in this type of case obviously must be deterrence. As pointed out by this Court in R. v.

DalrympleAutomotive Services Ltd. (1982), (NS CA), 53 N.S.R. (2d) 254; 109 A.P.R. 254, at p. 255: ... To meet this end the fines must not be tantamount to a mere license fee to carry out such activity but, rather, must be sufficientlysevere so as to carry the message that such conduct will be dealt with severely. 17 ARC Amusements Limited was fined for keeping 154 electronic video poker machines in various business establishments. That case is quite distinguishable from the one at bar. First, the discharge provisions were not even a consideration because the accusedwas a corporation.

Discharge provisions do not apply to such entities. In addition, ARC Amusements Limited had one previousconviction for the same offence three years earlier. Was “deterrence” mentioned to address specific deterrence concerns (as opposed togeneral deterrence concerns) arising from this corporate accused’s recent related prior conviction? It is unclear. More importantly, thecase cited as the authority in ARC Amusements Ltd. with respect to general deterrence (the R. v. Dalrymple Automotive Services Ltd.(1982), (NS CA), 53 N.S.R. (2d) 254 (S.C. (A.D.)) case) did not even deal with common gaming offences.

Rather, itinvolved three fraud counts against the Nova Scotia Power Corporation, offences which bring about different sentencing considerations. 18 For these reasons, although general deterrence is a relevant consideration when deciding whether to grant a discharge for thisoffence, I am respectfully of the view that the sentencing judge erred when he found that general deterrence was the “primary principleof sentencing” (at para. 130) in this case. He overemphasized general deterrence, which, in turn, caused him to rule out the dischargeprovisions.

This was an error in principle and allows this court to substitute its own view of the appropriate sentence in thecircumstances. 19 As the sentencing judge stated in his reasons, the critical issue was whether a conditional discharge was an appropriatedisposition. A conditional discharge may only be granted if the sentencing judge considers it to be in the best interests of the accusedand not contrary to the public interest (s. 730(1) of the Code).

I adopt the sentencing judge’s reasons with respect to his finding that thegranting of a discharge would be in the accused’s best interests. 20 This leaves the remaining consideration: Would the granting of the discharge be contrary to the public interest for theoffence committed by this offender in the circumstances under which it was committed? For the reasons that follow, I am of the viewthat it would not. 21 When considering the “contrary to the public interest” factor, a few propositions are matters of common sense and of generalapplication.

The more serious the offence, the less likely a discharge should be granted (see Sanchez-Pino). The more serious theoffence, the greater the need for mitigating circumstances to be present before granting a discharge (see R. v. Tschirhart, unreported (14January 1975) (Ont. C.A.)). Other considerations, which are more specific to the case at hand, include whether the resulting convictionwill impact the accused’s occupation (see R. v. Etienne (1989), (BC CA), 49 C.C.C. (3d) 572 (B.C.C.A.)) andwhether the accused was under a “reasonable mistake in belief as to the law” (see R. v.

Campbell and Mlynarchuk (1972), (AB KB), 10 C.C.C. (2d) 26 at 35 (Alta. Dist. Ct.)). 22 Let me first examine the mitigating circumstances. The accused was 42 years of age at the time of sentencing and had no

prior criminal record. He has a university education. He owns and operates a successful retail chain known as Brewers Direct. He also has other commercial interests in income ventures and properties. Prior to his arrest, he was very much involved in the community. Over 20 letters of reference were filed at the sentencing hearing showing that he was dedicated to his family and the community and donated time and money to charitable causes and youth sports. 23 In addition, the accused took responsibility for his actions by pleading guilty to this offence. He cooperated with the police throughout.

His remorse is unmistakable. Because of the media attention given to the accused’s arrest, he has been publicly disgraced. There is no reason to think he will ever again become involved in such activities. His prospects for rehabilitation are excellent. Finally, although this offence was organized and calculated, there was nothing surreptitious or underhanded in its organization. He advertised openly, operated in a public location and the doors to the club were open to all who wanted to play.

There were no complaints of cheating, unfairness or rowdiness arising from the club’s operation. 24 There are aggravating circumstances. The accused played a leading role in the organization of the gaming house. This offence was profit-driven and occurred weekly over a period of two and one-half months. It was not a momentary lapse of judgment. 25 This conviction has greatly impacted the accused.

In addition to the public disgrace, the conviction limits the accused’s business opportunities in the United States as well as his out-of-country travel ability as it relates to his business ventures and coaching responsibilities. 26 The accused submitted he was under a misapprehension as to the state of the law and that he was not trying to flout the gambling laws. When the “Texas Hold ’Em Poker” games gained in popularity on television and over the Internet, he decided to start the club for people who shared his love of the game. His interest in the game is genuine.

Indeed, he is an accomplished poker player who has travelled to the United States and Europe to play the game. The accused’s misapprehension on the law rings true. As stated above, there was nothing clandestine about the operation.

Although ignorance of the law is no excuse and provides no defence as to guilt, it can be used to gauge his level of moral blameworthiness when considering the fundamental principle of proportionality in s. 718.1 of the Code . 27 G iven the significant mitigating circumstances, the resulting impact on the accused’s occupation and his lowered degree of blameworthiness, I am of the view that it would not be contrary to the public interest, in the particular circumstances of this case, to grant a conditional discharge. 28 I now turn to the term of that discharge sentence.

Had it been imposed at the time of the sentencing hearing, I would have made the discharge for a two-year term. However, the reasons for sentence were delivered more than one and one-half years later. During this time, this charge was hanging over the accused’s head and he was subject to bail restrictions. I n light of the inordinately lengthy period of time that has elapsed since his guilty plea, I would fix the term at one year.

For these reasons, I would grant leave to appeal, vary the sentence and direct that the accused be discharged on the following one-year probationary conditions: 1) that he keep the peace and be of good behaviour; 2) that he appear before the court when required to do so by the court; 3) that he notify the court or the probation officer in advance of any change of name or address, and promptly notify the court or the probation officer of any change of employment or occupation; 4) that he perform 150 hours of community-service work, the nature, location and timing of such work to be directed by the probation officer, and that such work be completed within one year; and 5) that for the purpose of supervising the community-service work order, he report to a probation officer within four days of this order and thereafter as directed by the probation officer. 29 In addition to the $2,364 order of forfeiture made by the sentencing judge, which was not appealed, I would order a victim surcharge in the amount of $2,000, to be paid within six months of this order (see s. 737(3) of the Code ).

I believe that, in the circumstances, this unusually high victim surcharge is appropriate given this offence, the personal situation of the accused and his stated willingness to pay it or make any charitable donation as ordered by this court. In light of this court’s comments in R. v. Wisniewski (R.) , 2002 MBCA 93 , 166 Man.R. (2d) 73 at paras. 29-32 , the issue of charitable donations is best left for another day. 30 The accused’s arrest and the subsequent publicity surrounding this matter appear to have conveyed the message to the community that this type of conduct will lead to criminal charges.

This court has been told that, since the accused’s arrest, there has not been a single prosecution for common gaming house related offences. However, two things must be said. First, it has long been a criminal offence to operate a gaming house and it is still against the law. Second, it must be understood that the precedential value of this decision is limited to these circumstances and this offender and must be viewed particularly in light of the fact that there had not been a single reported case of this offence in over 50 years.

Should this type of offence begin to re-emerge, sentences may have to be harsher in order to address its increasing prevalence. J.A. I agree: J.A.

I agree: J.A.