



COURT OF APPEAL FOR ONTARIO

CITATION:
R. v. Dwyer, 2013
    ONCA 34

DATE: 20130122

DOCKET: C54727 & C54734

Rosenberg, Blair and Rouleau JJ.A.

BETWEEN

Her Majesty the Queen

Respondent/Appellant

and

Beverley Dwyer

Appellant/Respondent

Ryan Clements, for Beverley Dwyer

Melissa Adams, for the Crown

Heard: September 7, 2012

On appeal from the conviction entered by Justice Faye E.
    McWatt of the Superior Court of Justice, sitting without a jury, on July 15,
    2011, and from the sentence imposed on November 15, 2011, with reasons reported
    at 2011 ONSC 6555.

Rosenberg J.A.:

[1]

The appellant Beverley Dwyer was convicted by McWatt J. of fraud over
    $5,000 and four counts of using a forged document. She appeals from the forgery
    convictions on the basis that they offend the rule against multiple
    convictions, articulated in
R. v. Kienapple
, [1975] 1 S.C.R. 729. She
    also appeals from the sentence of three and one-half years imprisonment. The
    Crown appeals from the refusal of the trial judge to order a fine in lieu of
    forfeiture pursuant to s. 462.37(3) of the
Criminal Code
. For the
    following reasons, I would dismiss the appeals. In these reasons, I refer to
    Ms. Dwyer as the appellant, even where she is the respondent on the Crown
    appeal.

FACTS

[2]

For the purposes of these reasons, the facts may be summarized as
    follows.

[3]

The appellant, who had experience as a tax preparer and mortgage broker,
    obtained control of various pieces of identification belonging to her
    half-sister, Pauline Barnes. During the relevant time, Ms. Barnes lived in the
    United States and would occasionally return to Ontario. The fraud relates to
    the family home where the appellant, her mother, Pauline Barness daughter and
    other family members lived. The home was in the name of the appellant, her
    mother and Pauline Barness daughter.

[4]

In August 2005, the appellant approached Ms. Barnes to help her
    refinance the family home. She convinced Ms. Barnes to let her use her name on
    the mortgage application. Over the next few weeks, the appellant presented
    various false documents, some of which were the subject of the using-forged-documents
    charges, to a representative of the Royal Bank of Canada to obtain the
    mortgage. The bank gave a mortgage for $663,750. These funds were paid into the
    trust account of a lawyer, Mr. Atuobi-Danso. When the bank learned of the fraud
    it was able to recover over $400,000 from various sources. Ms. Barnes was criminally
    charged in relation to the fraud.  Those charges were eventually withdrawn. The
    trial judge found that Ms. Barnes was an innocent dupe. Mr. Atuobi-Danso was disciplined
    by the Law Society of Upper Canada for his involvement in the transactions.

The Conviction Appeal

[5]

The appellant submits that the convictions for forgery should be stayed
    in accordance with the rule in
Kienapple.
The appellant submits that
    the use of the forged documents was the means by which the fraud was committed
    and accordingly, it was a single transaction.  The charges involved are: one
    count of fraud over $5,000 where the victim is the Royal Bank of Canada; and
    four counts of using a forged document (a 2003 Revenue Canada Notice of
    Assessment, a forged 2003 Revenue Canada Tax Return, a forged 2004 Revenue
    Canada Notice of Assessment, and a forged 2004 Revenue Canada Tax Return).
    These documents related to Pauline Barnes and had been forged to show that Ms.
    Barnes had employment income of over $200,000. In fact, Ms. Barnes never made
    more than $23,000 per year. These documents, along with various other false
    documents, were presented to a representative of the bank to support the
    application for a mortgage to refinance the house where the appellant, her
    mother and various other family members lived.

[6]

In my view, the
Kienapple
rule does not apply.  The rule
    precludes multiple convictions for different offences where there is both a
    factual and legal nexus connecting the offences. While there is a close factual
    nexus, the legal nexus is missing. The fraud charge and the charges of using
    forged documents have different elements and describe different criminal wrongs:
    see
R. v. R.K.
(2005), 198 C.C.C. (3d) 232 (Ont. C.A.), at paras.
    27-40; and
R. v. Prince
, [1986] 2 S.C.R. 480, at pp. 493-96. I would
    dismiss the appeal from conviction.

The Appellants Sentence Appeal

[7]

The trial judge sentenced the appellant to three and one-half years
    imprisonment.  The appellant submits that the trial judge erred in principle in
    several respects. The first alleged error concerns material the Crown filed at
    the sentence hearing. The Crown filed the reasons in three separate discipline
    cases before the Law Society of Upper Canada in which the appellant was
    referenced as having dealings with each of the lawyers involved. The
    appellants role in the transactions is unclear. In her reasons for sentence,
    the trial judge made reference to those proceedings in the following terms:

Although Ms. Dwyer is not the subject of any of these hearings
    nor took part as a party in them, her involvement in transactions which the
    Society found to be fraudulent and deserving of discipline against each of the
    three lawyers is of concern. That is especially so because the cases set out
    some starkly similar facts to the features of the case before me.

[8]

I agree with the appellant that this information should not have been
    presented in the form that it was and that the trial judge should have ignored
    it. These other alleged bad acts and uncharged transactions were never proved
    beyond a reasonable doubt as required by s. 724(3)(e): see
R. v. Angelillo
,
    2006 SCC 55, [2006] 2 S.C.R. 728, at para. 32. The trial judge should not have
    taken this material into consideration. However, as her reasons show, the trial
    judge did take this material into account.

[9]

The appellant also submits that the trial judge erred in finding that
    the appellant committed a breach of trust. The trial judge found that the
    appellant abused Ms. Barness trust while safe-keeping her identity cards and
    then in the fraudulent use of her social insurance number, which she had from
    preparing Ms. Barness tax returns in prior years. The trial judge also stated
    that the appellant had abused the public trust given to her as a tax preparer
    and mortgage broker.

[10]

In
    my view, the trial judge did not err in her characterization of the offences
    and the appellants history. As the trial judge noted earlier in her reasons,
    the appellant had been previously convicted of 17 counts of false reporting of
    inflated expenses and two counts of tax evasion in her tax preparing business.
    On appeal from conviction and sentence respecting those convictions, the
    summary appeal court judge described the offences as a breach of the public
    trust. It was also fair to characterize the appellants dealings with Ms.
    Barnes as a form of breach of trust. The evidence shows that Ms. Barnes and the
    other members of the appellants family relied upon the appellant in respect of
    financial dealings. It was because they trusted her that the appellant was able
    to place the mortgage on the family home and defraud the bank of over $600,000.

[11]

The
    appellant further submits that the trial judge erred in treating the
    appellants failure to make restitution as an aggravating factor. I agree with
    that submission. The appellant did not have the advantage of having made
    restitution as a mitigating factor, but that did not make the offence more
    serious. The objective gravity of the offence lay in the manner in which the
    appellant fraudulently obtained the mortgage.

[12]

Given
    the errors in principle in the use of the Law Society proceedings and the
    mischaracterization of the failure to make restitution, it falls to this court
    to determine a fit sentence without deference to the trial judges decision. In
    my view, the sentence of three and one-half years imprisonment was fit. As I
    have noted, the appellant did commit a breach of trust. She used her access to
    documents and information that had been entrusted to her to obtain the
    mortgage. She abused the trust that her mother and other members of her family
    placed in her with respect to financial dealings. Her actions led to Ms.
    Barnes, her half-sister, being criminally charged. As a result of the fraud,
    the family lost its home. Remarkably, this was not the first time the appellant
    had dishonestly dealt with the home. In 1995, when her mother was out of the
    country, the appellant put the family home up for sale without her mothers
    knowledge.

[13]

The
    appellant was a mature offender with a history of dishonesty. In addition to
    the prior income tax offences, she had been previously convicted of furnishing
    false information to the Superintendent under the
Mortgage Brokers Act
,
    R.S.O. 1990, c. M.39. Given the size of the fraud in this case and its impact
    on the victims, I am of the view that the sentence was fit.

[14]

Accordingly,
    while I would grant leave to appeal sentence, I would dismiss the appellants
    appeal from sentence.

The Crowns Sentence Appeal

[15]

Section
    462.37 of the
Criminal Code
provides for the forfeiture of the
    proceeds of crime where an offender is convicted of a designated offence. Fraud
    over $5,000 is a designated offence: s. 462.3(1). Section 462.37 also provides
    for a fine in lieu of forfeiture pursuant to subsection (3) if the court is
    satisfied that a forfeiture order should be made in respect of any property but
    that property or any part of it cannot be made subject to an order. Subsection
    (4) requires the court to impose a term of imprisonment in default of payment
    of the fine, the length of the term depending on the amount of the fine.

[16]

The
    evidence showed that the Royal Bank of Canada was defrauded of $633,750. Once
    it learned of the fraud, the bank was able to recover $426,049 by the freezing
    of bank accounts, the repayment of funds from payees and civil actions. The
    details as to how and from whom the bank recovered these funds were not
    disclosed during the sentence proceedings.  This left $207,700 outstanding. The
    Crown sought a fine in lieu of forfeiture in that amount.
[1]
There is no question that a forfeiture order could not be made in respect of
    this amount since neither the bank nor the police were able to trace those
    funds.

[17]

The
    trial judge gave the following reasons for refusing to make the order for a
    fine in lieu of forfeiture:

As much as it would be appropriate in the circumstances of this
    case, I cannot see that the provisions of sections 462.37(1), (3) and (4) of
    the
Criminal Code
relating to forfeiture of proceeds of crime are
    practical.  If I were to impose a fine in lieu of of forfeiture, that fine must
    be $207,700 [
R. v. Lavigne
, 2006 SCC 10, [2006] 1 S.C.R. 392], and as
    much as I believe that the defendant still has much of that money, section
    462.37(4)(v) of the
Criminal Code
would necessitate that a two to three
    year jail sentence be imposed in default of payment of the fine.

During the sentencing hearing, the defendant asserted, through
    counsel, that she is unable to pay a fine, but adduced no evidence to support
    that assertion.  She has blatantly avoided the issue of where the $207,700 is
    now and I conclude as a result of that that they are in her possession.

The three and a half year period of incarceration is sufficient
    in light of the outstanding funds received and kept by the defendant.

[18]

As
    the trial judge recognized, the leading decision on the interpretation and
    application of s. 462.37(3) and (4) is the Supreme Court of Canadas decision
    in
R. v. Lavigne
, 2006 SCC 10, [2006] 1 S.C.R. 392. However, in my
    view, the trial judge erred in her interpretation of s. 462.37(3). In
Lavigne,
the court held that a trial judge has only a limited discretion to refuse to
    make an order for a fine in lieu of forfeiture where the pre-requisites for
    making the order have been made out. In this case, the trial judge refused to
    order a fine in lieu of forfeiture because it was her view that the three-and-one-half-year
    sentence was sufficient. In other words, since the principles of sentencing would
    be satisfied by the three-and-one-half-year prison sentence, that sentence
    would be a sufficient punishment.  However, that basis for refusing to order a
    fine in lieu of forfeiture was rejected by the Supreme Court in
Lavigne
,
    at paras. 25-26:

The
amicus curiae
argues that the effect of imposing a
    fine without regard to the general principles of sentencing is to punish the
    offender twice. What that argument fails to consider is that those principles
    are not all disregarded and that a fine instead of forfeiture is seen as a
    separate component of the sentence.
While such an order is technically part
    of the sentence, it is nevertheless distinguished by the fact that its purpose
    is to replace the proceeds of crime. It is not regarded as punishment
    specifically for the designated offence.

The actual objective of Part XII.2 is to deal with the proceeds
    of crime separately from, and in addition to, the punishment for committing a
    crime. The fine imposed in this instance has some special features: there are
    specific rules for imprisonment in default of payment (s. 462.37(4) and (5)).
    The fine or imprisonment imposed as the primary sentence punishes the
    commission of the designated offence, while forfeiture or a fine instead of
    forfeiture deprives the offender of the proceeds of his or her crime and deters
    potential offenders and accomplices. [Emphasis added.]

[19]

Further,
    to the extent that the trial judge may have not imposed a fine in lieu of
    forfeiture because the appellant did not have an ability to pay the fine, that
    was not an appropriate consideration, as the court in
Lavigne
made clear,
    at para. 37:

Given the clear objective, the fact that the words are equally
    clear, and the counter‑productive effects of taking ability to pay into
    consideration, I conclude that the court may not take ability to pay into
    account in determining the amount of the fine to be imposed instead of
    forfeiture.

The ability to pay is only a factor in considering how
    much time the offender should be given to pay the fine:
Lavigne,
at
    paras. 47-48.

[20]

Given
    the trial judges errors, it falls to this court to determine whether a fine in
    lieu of forfeiture should be imposed and, if so, the terms for payment. This
    court has no power to remit the question of sentence to the trial judge:
R.
    v. Kakekagamick
(2006), 81 O.R. (3d) 664 (C.A.), at para. 60.

[21]

The
    appellant submits that the order should not be made because the Crown failed to
    establish that the missing funds were property of an offender. This
    submission turns on the interpretation of ss. 462.37, 462.3 and 2 of the
Criminal
    Code
. A pre-requisite to imposing a fine in lieu of forfeiture is that an
    order of forfeiture under s. 462.37(1) should be made. A pre-requisite to
    making a forfeiture order is that the court is satisfied on a balance of
    probabilities that any property is proceeds of crime and that the designated
    offence was committed in relation to that property. Proceeds of crime is
    broadly defined in s. 462.3(1) as any property, benefit or advantage, within
    or outside Canada, obtained or derived directly or indirectly as a result of (
a
)
    the commission in Canada of a designated offence.

[22]

As
    is made clear in para. 12 of
Lavigne
, the term property in these
    sections has the meaning set out in s. 2:

(a) real and personal property of every description and deeds
    and instruments relating to or evidencing the title or right to property, or
    giving a right to recover or receive money or goods,

(b) property originally in the possession or under the control
    of any person, and any property into or for which it has been converted or
    exchanged and anything acquired at any time by the conversion or exchange,



[23]

The
    part of the definition that applies in this case is para. (b), being property
    originally in the possession or under the control of any person. I accept that
    the Crown proved that the designated offence of fraud was committed in relation
    to the entire $633,750. The difficulty is that the Crown failed to prove that
    the entire amount was originally in the possession or under the control of the
    appellant.

[24]

In
    my view, an order for a fine in lieu of forfeiture can be made under s.
    462.37(3) only where the offender has possession or control of the property in
    question or at least had possession of the property at some point. This
    conclusion flows from the use of the phrase any property of an offender in s.
    462.37(3) and the definition of property in s. 2. Such an interpretation is
    consistent with the objectives of s. 462.37, which are to deprive offenders of
    the proceeds of crime and ensure that they do not benefit from those proceeds:
    see
R. v. Appleby
, 2009 NLCA 6, 242 C.C.C. (3d) 229, at paras. 26,
    32-33. Those objectives would not be furthered by making orders in relation to
    property that was never in the possession of the offender, over which the
    offender never had control and from which the offender did not benefit: see
    also
R. v. Mackenzie
, [2002] O.J. No. 2512 (C.J.).

[25]

The
    decision to order a fine in lieu of forfeiture must be based on the evidence.
    As the court in
Lavigne
said, at para. 35:

The fine, as that provision [s. 462.37(3)] says, is equal to
    the value of the property. Further, equivalency between the value of the
    property and the amount of the fine is inherent in the words instead of. The
    fine takes the place of forfeiture. For the substitution to be genuine, the
    value must be equal.
The courts discretion applies both to the decision
    whether or not to impose a fine and to the determination of the value of the
    property. It must be exercised in light of the evidence
, and once this
    process has been completed, the court may not take the offenders ability to
    pay into consideration as a basis for deciding either to impose no fine or to
    reduce the amount of the fine. [Emphasis added.]

[26]

In
    her reasons, the trial judge stated: I believe that the defendant still has
    much of that money; and She has blatantly avoided the issue of where the
    $207,700 is now and I conclude, as a result of that, that they are in her
    possession. The trial judge did not, however, identify any of the evidence
    upon which those findings were based and, in my view, that finding is not
    supported by the evidence. In argument before this court, Crown counsel could
    point to only one item in the record that showed the appellant had control of
    the missing funds.  This is a direction to the lawyer, Mr. Atuobi-Danso, to pay
    out certain of the proceeds. It is a reasonable inference that this document
    was authored by the appellant and is some evidence of her control of the funds
    referred to in the direction. However, this document and the other supporting
    documents, such as cheques, only account for $436,756.38. There is no
    explanation for the remaining funds and thus no evidence that the appellant ever
    had control of the missing funds. Crown counsel at trial conceded in her
    submissions that it was difficult to trace the funds. For example, in respect
    of where the funds went, she told the judge that all of that would be
    speculative. The Crown made no attempt to identify the missing funds, so as to
    show they were the funds referred to in the direction and had not been
    recovered by the Bank. At its highest the evidence shows that the appellant had
    control of $10,700 more than the Bank recovered. I would therefore allow the
    Crown appeal only to the extent of ordering that the appellant pay a fine of
    $10,700. In default of payment the appellant is sentenced to a term of 6 months
    imprisonment consecutive pursuant to s. 462.37(4)(a)(ii) and (b) of the
Criminal
    Code
.

[27]

In
    my view, given the Crowns failure to prove even on a balance of probabilities
    that the appellant had possession or control of the missing funds, I can see no
    basis for making the order for a fine in lieu of forfeiture except as stated
    above.

DISPOSITION

[28]

Accordingly,
    I would dismiss the appellants conviction appeal. I would grant leave to appeal
    sentence to both the appellant and the Crown. I would dismiss the appellants sentence
    appeal. I would allow the sentence appeal by the Crown and impose a fine of
    $10,700 in lieu of forfeiture. In default of payment I would impose a sentence
    of 6 months imprisonment consecutive to the sentence of three and one-half
    years imprisonment.

Released: MR January 22, 2013

M.
    Rosenberg J.A.

I
    agree R.A. Blair J.A.

I
    agree Paul Rouleau J.A.





[1]
The bank was able to recover a further $183,900 from Mr.
    Atuobi-Dansos insurer.


