



COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Angelis, 2016 ONCA 675

DATE: 20160913

DOCKET: C56824

Gillese, Watt and Tulloch JJ.A.

BETWEEN

Her Majesty the Queen

Appellant

and

Nick Angelis

Respondent

James V. Palangio, for the appellant

Anthony Moustacalis and Daniel Goldbloom, for the
    respondent

Heard: February 2, 2016

On appeal from the sentence imposed on February 22, 2013
    by Justice Michael Code of the Superior Court of Justice.

Watt J.A.:

[1]

Nick Angelis had a problem. He wanted the best. For himself and for his
    family. But he couldnt afford the lifestyle he coveted. He hit upon a
    solution. Money was available. From different sources. At different times. So
    he took it. All it required was some deceit, a bit of fraud and a few other
    dishonest means.

[2]

But Nick Angelis got caught. And despite that, he did it again.
    Repeatedly. Even while on bail.
Mea culpa
, Nick said. A judge agreed.
    He sent Nick Angelis to the penitentiary. Ordered that he pay restitution for
    some of his victims, but not others.

[3]

At his sentencing hearing, Nick Angelis told the judge that the money
    was all gone. Nothing remained. No proceeds of crime to forfeit. So the Crown asked
    the judge to order Nick Angelis to pay a fine in lieu of forfeiture. The judge refused.

[4]

The Crown appeals.

[5]

The reasons that follow explain why I think the judge got it wrong. I
    would grant the Crown leave to appeal, allow the appeal and require Nick
    Angelis to pay a fine in lieu of forfeiture in the amount of $1,036,750. I
    would give him 10 years to pay that fine and, in default of payment, impose a
    sentence of 10 years to be served consecutively to any other sentence he is
    then serving.

The background facts

[6]

The nature of the appeal, as an appeal from sentence, as well as the
    grounds of appeal advanced, eliminate the need for anything beyond a passing
    reference to the circumstances of the offences. A more detailed reference to
    the sentencing proceedings is necessary however.

The Dayco Fraud

[7]

Nick Angelis was the accounting manager of Dayco Canada Corporation
    (Dayco), a subsidiary of a large American manufacturer of auto parts. Using a
    variety of methods, Angelis acquired cash, goods and services valued at over $900,000
    during a five year period between 2000 and 2006. The full extent of the fraud
    was not determined until 2006. Angelis was arrested on October 30, 2006 and
    released from custody.

[8]

On the sentencing hearing conducted after he pleaded guilty, Nick
    Angelis did not contest the Crowns allegations except as to the quantum of the
    fraud. After a
Gardiner
hearing, the trial judge concluded that the
    amount of the fraud was $936,000: with reasons reported at 2012 ONSC 6086.

The Later Frauds

[9]

Nick Angelis also pleaded guilty to three counts of fraud alleged to
    have been committed during the years 2011 and 2012 while he was on judicial
    interim release on the Dayco fraud. During this period, Angelis was doing
    contract book-keeping and accounting work for different principals. He forged
    authorized signatures on cheques made payable to himself and altered the
    amounts of his own paycheques. The total loss was $100,750.

The Sentences Imposed

[10]

The
    trial judge imposed a sentence that included a term of imprisonment of four
    years, three months, which he reduced to three years after deducting credit for
    pre-disposition custody, and three free-standing restitution orders in favour
    of each of the victims of the lesser frauds, totalling $100,750. The trial
    judge declined to make a restitution order in favour of Dayco whose loss had
    been covered by insurance. He also declined to order restitution to the
    insurer.

The Forfeiture Proceedings

[11]

The
    Crown sought a fine in lieu of forfeiture of $1,036,750.

[12]

The
    Crown contended that it had satisfied the requirements for an order of
    forfeiture. Since it was clear that the proceeds could not be traced because
    Angelis had dissipated them, the discretion to order a fine in lieu of
    forfeiture in the equivalent amount was engaged. No basis existed to invoke the
    limited discretion to refuse the order. Thus, it should be made allowing
    Angelis five years to pay it, in default.

[13]

Nick
    Angelis resisted the Crowns application. He submitted that in light of the
    three free-standing restitution orders, the availability of civil remedies for
    the insurer and the crushing effect of a requirement to pay over one million
    dollars, after release from jail at the age of 50, the circumstances warranted
    the trial judges exercise of his discretion to refuse to make the order. In
    the alternative, Angelis sought an order permitting him to pay the fine in lieu
    of forfeiture over fifty years.

The Reasons of the Trial Judge

[14]

The
    trial judge was satisfied that the Crown had established the requirements for
    an order of forfeiture and that the proceeds had been dissipated. He then
    described the critical consideration in determining whether to exercise his
    discretion to refuse to order payment of a fine in lieu of forfeiture in these
    terms:

Accordingly, the critical consideration when exercising the discretion
    found in Section 462.37(3) is whether a fine in lieu of forfeiture is needed
    to, further the objectives of the provision, or conversely, whether a failure
    to impose such a fine in lieu of forfeiture would, frustrate those statutory
    objectives.

[15]

The
    trial judge characterized the statutory objectives underpinning the discretion
    of s. 462.37(3) as twofold:

i.

to deprive the offender of the proceeds of his or her crime; and

ii.

to deter the offender from future crime by showing that crime does not
    pay.

The trial judge then framed the central issue before
    him as whether these purposes have already been substantially achieved by other
    means.

[16]

The
    trial judge pointed out that most of the leading cases decided under the
    forfeiture provisions of the
Criminal Code
did not examine the
    interplay between forfeiture and restitution orders. He described the statutory
    purpose of restitution orders as preventing an accused from profiting from
    crime and providing a concurrent, rapid and inexpensive means of recovery for
    the victims of those crimes. He then turned to the effect of the overlap in
    statutory terms and objectives on the exercise of his discretion not to impose
    a fine in lieu of forfeiture:

Given these substantially overlapping statutory terms and
    objectives, I am satisfied that there will be cases where the
Lavigne
discretion to not impose a fine in lieu of forfeiture, will be properly
    exercised where the objectives of such an order have already been attained by
    other parallel procedures such as a restitution order. It is also settled law,
    again pursuant to
Devgan
,
supra
, and
Castro
,
supra
,
    that restitution or compensation orders, should not be used as a substitute
    for civil proceedings, and that these criminal law restitution orders do not
    displace the civil remedies necessary to ensure full compensation, in
    circumstances where those civil remedies are more appropriate.

[17]

In
    reaching his conclusion declining to impose a fine in lieu of forfeiture, the
    trial judge considered several factors:

i.

full restitution orders in relation to three victims deprived Angelis of
    the profits of those crimes and provided the victims with a speedy and convenient
    means to recover their losses;

ii.

no restitution was ordered for the fraud on Dayco because an inevitably
    successful civil claim for the amount was filed in the Superior Court of
    Justice;

iii.

payment of a restitution order in connection with the Dayco fraud would
    have a detrimental impact on Angelis rehabilitation; and

iv.

the forfeiture provisions are intended to work harmoniously with the
    other sentencing provisions of the
Criminal Code
.

[18]

The
    Crown conceded that any payments made pursuant to a fine in lieu of forfeiture
    should be credited to the restitution orders made by the trial judge. The Crown
    also pointed out that any failure on Angelis part to pay off the fine in lieu
    within the time allowed  suggested as five years  would likely result in
    termination of the order because a judge would refuse to issue a warrant of
    committal. Of this, the trial judge observed:

The alternative would be to give Angelis 50 years, or the rest
    of his life, to pay the $1,000,000 fine in lieu of forfeiture. I would question
    the utility of an Order that simply channels money to an already existing
    restitution Order through administrative means, and that is either terminated
    after five years of doing this, or that is extended for the rest of the payors
    natural life. None of this would seem to engender respect for court orders, and
    some of it is simply redundant.

[19]

The
    trial judge concluded that it was a proper case for the exercise of discretion,
    pursuant to s. 462.37(3), not to order a fine in lieu of forfeiture.

The Grounds of Appeal

[20]

The
    Crown advances four grounds of appeal. The Crown says that the trial judge erred
    in considering:

i.

the general principles of sentencing;

ii.

the effect a fine in lieu of forfeiture would have on the rehabilitative
    prospects of Nick Angelis and his ability to pay the restitution orders;

iii.

the availability of civil proceedings as a means of satisfying the
    objectives of the forfeiture provisions of the
Criminal Code
; and

iv.

effectively, if not expressly, Angelis present ability to pay a fine in
    lieu of forfeiture,

in concluding not to impose a fine in lieu of
    forfeiture.

[21]

I
    will consider each ground of appeal in its turn, adding any additional factual
    details before summarizing the positions of counsel on appeal and the governing
    principles, then applying those principles to reach my conclusion. But first, a
    brief pause to consider the standard of review.

The Standard of Review

[22]

An
    order made under s. 462.37, including an order refusing to direct payment of a
    fine in lieu of forfeiture under s. 462.37(3), is a sentence within s. 673 of
    the
Criminal Code
. As an appeal from sentence, and as a discretionary
    order, the trial judges conclusion is subject to deference in the absence of
    an error in principle, a failure to consider a relevant factor, consideration
    of an irrelevant factor, overemphasis of appropriate factors or a decision that
    is plainly unreasonable:
R. v. P.R.F.
(2001), 57 O.R. (3d) 475, 161
    C.C.C. (3d) 275 (C.A.), at para. 8;
R. v. Briggs
, (2001) 55 O.R. (3d)
    417, 157 C.C.C. (3d) 38 at para. 60;
R. v. Dritsas
, 2015 MBCA 19, 19
    C.R. (7th) 203, at para. 6. Appellate intervention is justified only where it
    appears from the trial judges decision that an error had an impact on the
    result:
R. v. Lacasse
, 2015 SCC 64, at para. 44.

[23]

Where
    a judges decision under s. 462.37(3) requires or involves an interpretation of
    the subsection, however, appellate review of the decision applies a standard of
    correctness:
Dritsas
, at para. 6.

Ground #1: The Relevance of General Sentencing
    Principles

[24]

In
    his reasons for sentence, the trial judge considered the dominant sentencing
    objective at work in this case was general deterrence. Mitigating objectives,
    such as rehabilitation, occupied a secondary place in the sentencing decision.
    The preferable sanction was incarceration. After taking into account several
    mitigating and aggravating factors, the trial judge settled on the quantum of
    the carceral component of the sentence before he turned to the requests for
    restitution orders and a fine in lieu of forfeiture.

The Arguments on Appeal

[25]

In
    this court, the Crown begins with the uncontroversial. To obtain an order of
    forfeiture under Part XII.2, the proceeds of crime provisions of the
Criminal
    Code
, the Crown must satisfy several conditions precedent. Once it has
    done so, as required, on a balance of probabilities, a forfeiture order under
    s. 462.37(1) is mandatory. The objective of these provisions is to deprive
    convicted offenders of any proceeds derived from their crimes. Doing so deters
    them and others from similar conduct in the future.

[26]

In
    cases such as this, the Crown continues, where forfeiture is not possible
    because the proceeds cannot be located with the exercise of due diligence
    because the money has all been spent, the sentencing court
may
order
    the offender to pay a fine in lieu of forfeiture. Where the conditions precedent
    for ordering payment of a fine in lieu of forfeiture have been met, the
    sentencing judge has a limited discretion to refuse to make the order.

[27]

The
    Crown says a fine in lieu of forfeiture is not a constituent part of a global
    sentence imposed on a convicted offender. A fine in lieu of forfeiture is a
    discrete order based on a different rationale. It is not offender-centric and
    its issuance or refusal is not subject to the sentencing objectives, principles
    and factors put in place by Part XXIII. The sentencing judge applied these
    principles in deciding not to impose a fine in lieu of forfeiture. He was wrong
    to do so.

[28]

Nick
    Angelis (the respondent) agrees with the Crown to a point. The evidence
    warranted an order of forfeiture and, because the proceeds had all been
    dissipated, satisfied the criteria for consideration of a fine in lieu of
    forfeiture. However, sentencing courts retain a limited, but meaningful
    discretion to decline to order a fine in lieu of forfeiture. This discretion is
    to be exercised by reference to the statutory objectives of the forfeiture
    provisions. An important objective of those provisions, not at work here, is to
    target criminal organizations and to deter them from continuing their criminal
    activities.

[29]

The
    respondent asserts that it necessarily follows from the very nature of judicial
    discretion that no closed list of factors curtails its exercise. The
    authorities afford some examples. An isolated crime. A single offender. A
    failure to profit from the predicate offence.

[30]

The
    application of these principles is only ousted to the extent that it frustrates
    the purpose of forfeiture orders and thus orders imposing a fine in lieu of
    forfeiture. The trial judges decision was faithful to this distinction, but
    even if it fell foul of the distinction, the error was non-determinative in
    connection with the result.

The Governing Principles

[31]

A
    brief review of the statutory scheme provides several governing principles that
    inform our resolution of this ground of appeal.

The Statutory Scheme

[32]

Section
    462.37 is an essential component of Part XII.2 of the
Criminal Code
,
Proceeds
    of Crime
. The Part reflects a Parliamentary intention to give teeth to the
    general sentencing provisions in Part XXIII. But the purpose or objective
    underlying the two Parts is different. Part XXIII has as its purpose the
    punishment of an offender for the crime(s) she or he committed. The objective
    of Part XII.2, in particular the forfeiture provisions, is to deprive offenders
    and criminal organizations of proceeds of crime and thereby to deter future
    crimes:
R. v. Lavigne
, 2006 SCC 10, [2006] 1 S.C.R. 392, at para. 16.
    These provisions seek to avert crime by showing those who may be bent on committing
    it, not to mention those who have committed it, that any proceeds gained or
    their monetary equivalent may be forfeited.

[33]

Parliament
    also recognized that the forfeiture of proceeds of crime is not always
    practicable. Sometimes, proceeds cant be found. They may be outside Canada. Or
    in the hands of a third party. What was taken may have been substantially
    diminished in value, rendered worthless or commingled with other property that
    cannot be divided without difficulty:
Lavigne
, at para. 18. And so,
    Parliament enacted a provision, s. 462.37(3), to permit judges to impose a fine
    in lieu of forfeiture.

[34]

Section
    467.37(3) permits a sentencing judge to order an offender to pay a fine in lieu
    of forfeiting the proceeds of crime where:

i.

an order of forfeiture should be made in respect of an offenders
    property; but

ii.

the property or any part or interest of the offender in it cannot be
    made subject to an order of forfeiture.

The subsection describes several circumstances in which
    a judge may impose a fine in lieu of forfeiture.

[35]

Section
    462.37(1) tells us when an order of forfeiture can be made. Provided the
    prerequisites in the section have been met, an order of forfeiture is
    mandatory:
Lavigne
, at para. 14. The underlying conviction or finding
    of guilt must be for a designated offence as defined in s. 462.3(1). The
    Attorney General must apply for forfeiture. The sentencing judge must be
    satisfied, on a balance of probabilities, that:

i.

the subject-matter of which forfeiture is sought is proceeds of crime
    within s. 462.3(1); and

ii.

the designated offence was committed in relation to the property that is
    proceeds of crime.

The property that is proceeds of crime must not only be
    that of the offender but the offender must have had possession or control of
    the property in question at some point:
R. v. Dwyer
, 2013 ONCA 34, 296
    C.C.C. (3d) 193, at paras. 21 and 24.

[36]

Where
    an order of forfeiture is not possible or practicable, as for example where the
    proceeds have been used, transferred, transformed or cannot be located despite
    diligent efforts to do so, a sentencing judge may impose a fine in an amount
    equivalent to the value of the property in lieu of ordering forfeiture:
Criminal
    Code
, s. 462.37(3). The language used in this enabling authority is the
    permissive may rather than the mandatory shall:
Lavigne
, at paras.
    19 and 29. This provision ensures that the purpose of the legislation is not
    frustrated by destruction, dissipation or other removal out of reach of the
    property.

[37]

The
    exercise of the discretion for which s. 462.37(3) provides is not without
    boundaries. It is limited by the objective of the provision, the nature of the
    order and the circumstances in which the order is made:
Lavigne
, at
    para. 27.

[38]

Two
    further points should be made about the relationship between the proceeds of
    crime provisions in Part XII.2 and the sentencing scheme enacted in Part XXIII.

[39]

First,
    the focus of the two Parts is different. The Part XXIII sentencing scheme is
    offender-centric. Its focus is punishment of the offender for the crime of
    which she or he has been convicted or found guilty. Part XII.2 is different. Not
    offender-centric. Part XII.2 looks beyond the offender. Targeting the proceeds
    the offender has acquired through commission of the offence. Seeking to avert
    crime by showing it doesnt pay by taking away its proceeds or a monetary
    equivalent. Depriving the offender of his or her criminal labours:
Lavigne
,
    at paras. 8; 16 and 25. The purpose of a fine in lieu of forfeiture is to
    replace the proceeds of crime with their monetary equivalent, not as punishment
    specifically for the designated offence.

[40]

Second,
    the provisions of Part XII.2 are in addition to other provisions in the
Criminal
    Code
. They comprise a series of specific rules that partially preclude the
    application of the general provisions relating to sentencing, Part XXIII. But
    their preclusive reach is not complete. To the extent that the principles of
    Part XXIII are compatible with the specific provisions of Part XII.2, they
    continue to apply. But not otherwise:
Lavigne
, at paras. 39 and 52. In
    other words, we must look to the relationship between specific objectives,
    principles and factors of sentencing and the objectives of Part XII.2 to
    determine whether any specific principle is sufficiently compatible to warrant
    its application.

The Principles Applied

[41]

As
    I will explain, I would not give effect to the appellants general submission
    that the trial judge erred by applying the sentencing principles of Part XXIII
    in concluding that he would not impose a fine in lieu of forfeiture of the
    respondents frauds.

[42]

First,
    as a proposition of law, it simply cannot be said that the principles of
    sentencing in Part XXIII have
no
place in applications for forfeiture
    or a fine in lieu of forfeiture. Indeed, as noted above, the controlling
    precedent,
Lavigne
, makes it clear that the general rules are
    applicable in forfeiture proceedings, provided they are compatible with the
    specific provisions of Part XII.2:
Lavigne
, at paras. 39 and 52.

[43]

Second,
    the trial judges reasons, read as whole, simply do not reveal any general
    indiscriminate application of Part XXIII to the forfeiture proceedings. Indeed,
    the reasons disclose an express statement to the contrary. That is not to say,
    however, that the reasons do not disclose errors with respect to specific
    principles in Part XXIII.

[44]

Third,
    the sentencing judge did not make the error identified in
Dwyer
by
    considering forfeiture, or a fine in lieu of forfeiture, part of the
punishment
for committing the predicate offences. The judge in
Dwyer,
at para. 18,
    concluded that the carceral portion of the sentence satisfied the applicable
    principles of sentencing, thus, at least by necessary implication, including a
    fine in lieu of forfeiture as part of the sentence. That is simply not this
    case.

Ground #2: The Effect of a Fine in Lieu of
    Forfeiture on Rehabilitation and the Ability to Pay Restitution

[45]

This
    ground of appeal requires no further reference to the circumstances disclosed
    at the sentencing hearing.

The Arguments on Appeal

[46]

The
    Crown says the sentencing judge considered the effect the imposition of a fine
    in lieu would have on the respondents prospects for rehabilitation. As a
    result, the judge refused to order restitution in connection with the Dayco
    fraud. The amount - $936,000  would detrimentally affect the respondents
    rehabilitation. A fine in lieu of forfeiture would equally be at cross-purposes
    with the respondents rehabilitation.

[47]

The
    Crown argues that the trial judges concern with the effect of a fine in lieu
    of forfeiture on the respondents rehabilitation is not a relevant factor to
    consider in deciding whether to order a fine in lieu of forfeiture.
    Rehabilitation is an objective of sentencing, punishment of an offender for
    having committed an offence. Rehabilitation is offender-centric. The forfeiture
    scheme is distinct from sentence and cannot inform the determination of whether
    to order payment of a fine in lieu of forfeiture.

[48]

The
    respondent says that the sentencing judge considered the impact of a fine in
    lieu of forfeiture on the respondents rehabilitation only to the extent that
    it would not frustrate the purpose of forfeiture or a fine in lieu and even if
    not, played a subordinate role in the decision to refuse to impose the fine.

The Governing Principles

[49]

In
    addition to the principles discussed in connection with the first ground of
    appeal, four brief points should be added here to assist the decision on this
    ground of appeal.

[50]

First,
    the imposition of a fine in lieu of forfeiture is not punishment imposed upon
    an offender:
R. v. Khatchatourov
, 2014 ONCA 464, 313 C.C.C. (3d) 94,
    at paras. 55-56. Nor is it part of the global sentence imposed upon an offender
    despite its inclusion in the definition of sentence in s. 673 of the
Criminal
    Code
for appeal purposes:
Dritsas
, at para. 56. Subsequent
    imprisonment for failure to pay the fine in lieu of forfeiture is an
    enforcement mechanism to encourage payment by those with the resources to do
    so:
R. v. Bourque
(2005), 193 C.C.C. (3d) 485 (Ont. C.A.), at para.
    20;
Khatchatourov
, at para. 56.

[51]

Second,
    since imposition of a fine in lieu of forfeiture is not part of the global
    sentence imposed on an offender, it is not to be consolidated with sentencing
    on a totality approach:
R. v. Craig
, 2009 SCC 23, [2009] 1 S.C.R. 762,
    at para. 34. Totality is a principle of sentence the purpose of which is to
    ensure that the total sentence imposed does not extinguish the rehabilitative
    potential of the offender.

[52]

Third,
    the sentencing provisions of the
Criminal Code
distinguish between
    sanctions that involve imprisonment and those that do not do so. Deprivation of
    an offenders liberty is qualitatively different from other sanctions. And so
    it is that forfeiture orders, or fines in lieu, must not be considered
    interdependently with general sentencing principles:
Craig
, at para.
    37.

[53]

Fourth,
    the sufficiency of the carceral component of a sentence to satisfy the
    applicable sentencing objectives and principles cannot justify refusal to order
    payment of a fine in lieu of forfeiture where the conditions for its imposition
    have been established:
Dwyer
, at para. 18;
Lavigne
, at paras.
    25-26.

The Principles Applied

[54]

As
    I will explain, I would give effect to this ground of appeal.

[55]

To
    begin, I am satisfied that reading his reasons as a whole, the trial judge
    declined to order payment of a fine in lieu of forfeiture, in part at least,
    because of the effect he considered its imposition would have on the
    respondents rehabilitative prospects and his ability to satisfy the
    restitution orders made against him. Four reasons persuade that reliance on
    these factors reflects error.

[56]

First,
    assistance in rehabilitating an offender is an objective of sentencing under s.
    718(d) of the
Criminal Code
. Sentencing is punishment. Imposition of a
    fine in lieu of forfeiture is not regarded as punishment, thus the general statutory
    provisions of Part XXIII including the objectives in s. 718, have no say in
    exercising the limited discretion to refuse to impose a fine in lieu of
    forfeiture.

[57]

Second,
    at the risk of saying the same thing in a slightly different way, the general
    sentencing provisions have limited application to forfeiture proceedings under
    Part XII.2 . Their application is co-extensive with their compatibility with
    the specific provisions of Part XII.2. Assistance in rehabilitation is not
    compatible with provisions which have as their objective depriving an offender
    of the proceeds of crime by making him or her pay their monetary equivalent.

[58]

Third,
    to consider assistance in rehabilitation as a factor in deciding whether to
    order a fine in lieu of forfeiture is to adopt the interdependent or totality
    approach to sentencing and forfeiture expressly rejected in
Craig
.

[59]

Fourth,
    the totality principle in sentencing seeks to ensure, in the case of terms of
    imprisonment to be served consecutively, that the total sentence does not
    extinguish any realistic rehabilitative prospects of an offender. This link to
    rehabilitation extinguishes the influence of this principle on the fine in lieu
    of forfeiture decision.

Ground #3: Civil Remedies and the Objectives of
    Forfeiture

[60]

To
    situate this claim of error in its appropriate setting, it is helpful to recall
    a bit of background.

[61]

At
    the sentencing hearing, the judge was asked to make restitution orders in
    relation to all the victims of the respondents frauds. He made free-standing
    restitution orders for each of the victims in the post-Dayco offences, amounting
    to $100,750, but declined to do so in connection with Dayco, where the quantum
    would be $936,000.

[62]

The
    trial judge pointed out that Dayco had been reimbursed for its loss by its
    insurer. The insurer had commenced a civil action to which the respondent had
    no defence. The objectives of the restitution order had already been achieved 
    Dayco recouped its loss. The overlap between restitution and forfeiture was
    considerable and warranted refusal of a fine in lieu of forfeiture.

The Arguments on Appeal

[63]

The
    Crown says that taking into account potential civil actions by the victim and
    the likelihood of their success in exercising the limited discretion to refuse
    to order payment of a fine in lieu of forfeiture reflects error.

[64]

The
    Crown points out that in cases such as this, civil remedies are perpetually
    available to the victims of crime. Parliament would have been keenly aware of
    their availability when it enacted Part XII.2. But to consider the availability
    of civil remedies as a reason to refuse to order payment of a fine in lieu of
    forfeiture is not only contrary to the authorities, but also fundamentally at
    odds with the limited scope of the discretion to refuse an order imposing a
    fine in lieu of forfeiture. Further, consideration of the availability of civil
    remedies is incompatible with the purpose of forfeiture and fines in lieu of
    forfeiture.

[65]

The
    respondent takes a different approach. These considerations were reasonable and
    appropriate. No controlling precedent addresses this issue, much less rejects
    the proposition that restitution orders and civil remedies can fulfill the
    legislative objectives that underlie the enactment of Part XII.2. Each seeks to
    deprive the offender of the proceeds of crime.

[66]

In
    this case, the respondent continues, no criminal organization is involved. A
    single individual is adequately deterred and disgorged of the profits of his
    crime by the restitution ordered and the inevitably successful civil
    proceedings. Nothing more is achieved by imposition of a fine in lieu of
    forfeiture.

The Governing Principles

[67]

No
    specific authority appears to have considered the interplay of the factors at
    work here: restitution, civil remedies and a fine in lieu of forfeiture. That
    said, some assistance can be found in precedents that consider the nature of
    restitution and the recruitment of other remedies to do the work of forfeiture
    proceedings.

[68]

First,
    unlike fines in lieu of forfeiture, restitution orders are part of the general
    sentencing provisions of Part XXIII. And subject to the objectives, principles
    and factors that Part puts in place:
R. v. Castro
, 2010 ONCA 718, 102
    O.R. (3d) 609, at paras. 24 and 35. The general sentencing principles of Part
    XXIII apply to restitution orders:
Castro
, at para. 35;
R. v.
    Yates
, 2002 BCCA 583, (2002), 169 C.C.C. (3d) 506 (B.C.C.A), at para. 7.

[69]

Second,
    even in decisions about restitution, where general sentencing objectives in
    principles hold sway, rehabilitation is a secondary consideration where the
    underlying crime involves a breach of trust. A primary consideration where
    there is a breach of trust is the effect of the crime on the victim:
Castro
,
    at para. 35.

[70]

Third,
    recall the holding in
Dwyer
that the alleged sufficiency of other
    sentencing components to satisfy the principles of sentencing does not engage
    the limited discretion to refuse to make an order in lieu of forfeiture where
    the prerequisites for making that order have been established:
Dwyer
,
    at para. 18;
Lavigne
, at paras. 25-26. See also,
Craig
, at
    para. 34.

The Principles Applied

[71]

For
    reasons similar to those advanced in finding favour with the second ground of
    appeal, I would give effect to this ground.

[72]

First,
    as the authorities make clear, once the conditions for imposition for a fine in
    lieu of forfeiture have been met, as they have here, a sentencing judge has a
    limited discretion to refuse to make the order. This makes sense. A fine in
    lieu of forfeiture may only be ordered where the prerequisites for an order of
    forfeiture have been met, but other circumstances, such as dissipation of the
    proceeds, make forfeiture impracticable. As the phrase fine in lieu of
    forfeiture itself suggests, the fine operates as a surrogate for forfeiture,
    surrender of the proceeds.

[73]

The
    exercise of the discretion to refuse to order payment of a fine in lieu of
    forfeiture is limited by the objective of the provision, the nature of the
    order and the circumstances in which the order is made:
Lavigne
, at
    para. 27. None of these factors would seem to embrace the effect or influence
    of restitution orders or civil proceedings.

[74]

Second,
    the availability of civil remedies and restitution orders is a constant,
    especially where the underlying offence involves property or property rights.
    The ability of a victim to pursue civil remedies(successfully)  as a factor
    militating in favour of refusing to impose a fine in lieu of forfeiture,
    despite satisfaction of the requirements for it, risks grounding the refusal on
    the invidious distinction between victims who are adequately resourced to
    pursue civil remedies and those who are not. Such a distinction was rejected in
Craig
and lacks purchase where the proceeds of the fine go to the
    state, not to the victim.

[75]

Third,
    the availability of civil remedies as a basis to refuse ordering payment of a
    fine in lieu of forfeiture does not sit well with the jurisprudence that
    rejects the interdependent or totality approach to sentencing and forfeiture.
    The availability and likely success of civil proceedings for victims to recoup
    their losses has nothing to do with proceeds of crime legislation, the
    objective of which is to deal with proceeds separately from, and in addition to,
    the punishment for committing the crime, which includes restitution to its
    victims.

[76]

Fourth,
    restitution and enforcement of restitution orders is part of the sentencing
    scheme put in place by Part XXIII. Its application to forfeiture proceedings is
    limited.

Ground #4: Ability to Pay as a Factor

[77]

The
    final ground of appeal may be outlined and determined economically.

The Arguments on Appeal

[78]

The
    Crown argues that the sentencing judges focus on what happened to the proceeds
    of the respondents frauds seeped into his analysis of the fine in lieu
    application. This seepage, the Crown says, led inevitably into consideration of
    the respondents ability to pay as a factor that told against a fine in lieu of
    forfeiture. But what had happened to the proceeds, which admittedly had been
    dissipated, was irrelevant to the fine in lieu application.

[79]

The
    Crown contends that the sentencing judge failed to separate out the proceeds
    principles from those applicable to the sentencing proceedings, including
    whether the sentence should encompass a restitution order. The judges
    characterization of the fine in lieu application and any order giving effect to
    it as redundant discloses a failure to appreciate the objectives of proceeds
    proceedings and to distinguish them from sentencing proceedings.

[80]

The
    respondent resists any suggestion that the sentencing judge erred as the Crown
    contends. Indeed, the judge expressly said that he was disentitled to consider
    the respondents ability to pay when deciding whether to impose a fine in lieu
    of forfeiture. That he did so implicitly despite his self-direction to the
    contrary is a conclusion not borne out by a careful analysis of the reasons as
    a whole. The trial judges exercise of discretion remained grounded in the
    objectives of the forfeiture provisions.

The Governing Principles

[81]

It
    is well-settled that ability to pay may not be considered either in deciding to
    impose a fine in lieu of forfeiture or in determining the amount of the fine:
Lavigne
,
    at paras. 1; 48; and 52. However, ability to pay is a factor to be considered
    in determining the time within which the fine is to be paid:
Lavigne
,
    at para. 52.

The Principles Applied

[82]

Although
    this complaint of error is not entirely free of doubt, I am inclined to conclude
    that the sentencing judge appears to have allowed ability to pay to enter his
    analysis on the fine in lieu application. If this were the only complaint, the
    result may be different.

[83]

First,
    the sentencing judge considered ability to pay, as well as the deleterious effect
    of an order in relation to Dayco, in rejecting Daycos claim for an order of
    restitution. He then considered the restitution orders as factors in refusing a
    fine in lieu because the restitution orders had largely satisfied the
    objectives of the proceeds proceedings.

[84]

Second,
    the sentencing judges characterization of the fine in lieu application as
    redundant, in light of the restitution orders, comes uncomfortably close to
    consideration of ability to pay as an influential factor in refusing a fine in
    lieu of forfeiture. Particularly when the principal basis for refusing the
    restitution orders was the inability to pay and the surrogacy of the civil
    proceedings.

[85]

Third,
    the sentencing judge appears to have linked ability to pay with his rejection
    of fine in lieu on the ground of its deleterious impact on the respondents
    rehabilitation, itself irrelevant to the fine in lieu decision.


CONCLUSION

[86]

I
    would grant leave to appeal, allow the appeal and impose a fine of $1,036,750.00
    in lieu of forfeiture. The respondent shall have 10 years after the expiration
    of any term of imprisonment to pay the fine. In default of payment, the
    respondent shall serve a further term of imprisonment of 10 years, which he
    shall serve consecutively to any other term of imprisonment he is then serving.

Released:    September 13, 2016 (EEG)

David Watt J.A.

I agree, E.E.
    Gillese J.A.

I agree, M. Tulloch
    J.A.


