



COURT OF
    APPEAL FOR ONTARIO

CITATION: R. v. Chung, 2021 ONCA 188

DATE: 20210331

DOCKET: C65325, C65815, C65821 & C65843

Rouleau, Benotto and Miller JJ.A.

DOCKET:
    C65325

BETWEEN

Her Majesty the Queen

Appellant

and

Kenneth Chung

Respondent

DOCKET: C65815

AND BETWEEN

Her Majesty the Queen

Respondent

and

Kathleen Chung

Appellant

DOCKET: C65821

AND BETWEEN

Her Majesty the Queen

Respondent

and

Jun-Chul Chung

Appellant

DOCKET: C65843

AND BETWEEN

Her Majesty the Queen

Respondent

and

Kenneth Chung

Appellant

Jill R. Presser and Cate Martell, for the appellant
    Kathleen Chung

Jacqueline An, for the appellant Jun-Chul Chung

Susan von Achten and Joshua Napal, for the respondent/appellant
    Kenneth Chung

Melissa Adams and David Friesen, for the appellant/respondent
    Crown

Heard: October 20-22, 2020

On appeal from the acquittals entered by Justice Douglas
    K. Gray of the Superior Court of Justice on April 9, 2018, with reasons
    reported at 2018 ONSC 2177 (C65325).

On appeal from the convictions entered by Justice Douglas
    K. Gray of the Superior Court of Justice on April 9, 2018, with reasons
    reported at 2018 ONSC 2177, and the sentences imposed on September 4, 2018 (C65815,
    C65821 & C65843).

On appeal from the judgment of Justice Douglas K. Gray of
    the Superior Court of Justice on November 5, 2018, with reasons reported at
    2018 ONSC 6633 (C65815 & C65821).

On appeal from the orders of Justice Douglas K. Gray of
    the Superior Court of Justice on February 21, 2019, with reasons reported at
    2019 ONSC 882 (C65815, C65821 & C65843).

On appeal from the ruling of Justice Gisele M. Miller of
    the Superior Court of Justice on January 3, 2017, with reasons reported at 2017
    ONSC 13 (C65815 & C65821).




TABLE OF CONTENTS

PAGES



OVERVIEW

1



BACKGROUND

2



The split ticket scheme for the Super 7 lottery

3



Kathleen claims the prize

4



The Hi Ok Chung trust

6



THE TRIAL

6



(1) Convictions

Count 1:
Theft under $5000 (the 30 tickets that won nominal
          or no prize)

7



Count 2: Possession of property obtained by crime (the 30
          tickets)

Count 3: Theft over $5000 (the winning ticket)

8



Count 4: Possession of property obtained by crime (the
          winning ticket)

10



Count 5: Defrauding the OLG of $12.5 million

11



Count 6: Possession of property obtained by crime (the
          $12.5 million paid)

11



(2) Sentence

12



(3) The constitutional challenge

13



(4) Restitution, forfeiture,
          and fines in lieu

15



(5)
The s. 11(b)
          application

16



ISSUES ON APPEAL

1.

Conviction Appeal

2.

Sentence Appeal

3.

Did the application
          judge err in dismissing the s. 11(b) stay application?

4.

Did the trial judge
          err in not granting interest to Kenneth Chung?

5.

Did the trial judge
          err in acquitting Kenneth of counts 3-6?

17



ANALYSIS

(1) Conviction Appeals

Issue 1(a): Did the trial judge impose unreasonable
          verdicts for Kathleen Chung?

17



Count 4: Possession of property obtained by crime (the
          winning ticket)

18



Count 6: possession of property obtained by crime (the
          $12.5 million paid)

Count 5: Defrauding the OLG of $12.5 million

21



Issue 1(b): Did the trial judge impose unreasonable verdicts
          for Jun-Chul Chung?

23



Issue 1(c): Did the trial judge impose unreasonable
          verdicts for Kenneth Chung?

26



(2) Sentence Appeals:

Issue 2(a): Restitution and Fine in Lieu

(i) Did the trial judge err in dismissing the
          constitutional challenges?

28



(ii) Did the trial judge err in establishing time to pay
          and a six-year sentence in default of payment?

53



Issue 2(b): The Custodial Sentence Appeals

56



(i) Kenneth Chungs custodial sentence of 10 months

57



(ii) Jun-Chul Chungs custodial sentence of seven years

58



(iii) Kathleen Chungs custodial sentence of four years

59



Issue 3: Did the application
          judge err in dismissing the s.11(b) stay application?

63



Issue 4: Did the trial judge
          err in not granting interest to Kenneth Chung?

Issue 5: Did the trial judge
          err in acquitting Kenneth of counts 3-6?

86



CONCLUSION

92







By the Court
:

OVERVIEW

[1]

These appeals concern a $12.5 million lottery win by the Chung family.

[2]

Jun-Chul Chung is the father of Kenneth and Kathleen Chung. All three
    appeal their convictions for their roles in relation to a scheme to steal
    lottery tickets from customers at their family convenience store. The Crown
    alleged Jun-Chul and Kenneth stole 31 lottery tickets by pocketing one of the
    two free tickets won by a customer. Thirty of those tickets won nothing or a
    nominal prize. One won the $12.5 million jackpot. Kathleen cashed in the
    ticket, received and deposited the $12.5 million prize.

[3]

Jun-Chul and Kenneth were convicted of counts related to the tickets
    that did not win the big prize. Jun-Chul and Kathleen were convicted of counts
    related to the winning ticket, but Kenneth was acquitted on those counts. A s.
    11(b)
Charter of Rights and Freedoms
application was dismissed.

[4]

At sentencing, Jun-Chul and Kathleen challenged the constitutionality of
    the fine in lieu of forfeiture regime set out in s. 462.37(4) of the
Criminal
    Code
. This section requires the judge who imposes the fine at sentencing
    to simultaneously set the term of imprisonment in default of payment and impose
    mandatory minimum sentences in default of payment. The parties argued that these
    aspects of s. 462.37(4) violated ss. 7 and 12 of the
Charter
. The
    constitutional challenge was dismissed.

[5]

Jun-Chul was sentenced to seven years imprisonment and Kathleen was
    sentenced to four years imprisonment. In addition to their custodial
    sentences, they were jointly and severally ordered to pay restitution of $12.5
    million, forfeit $7.5 million, and pay a fine in lieu of forfeiture of $2.3
    million each. Kenneth was sentenced to 10 months imprisonment.

[6]

Jun-Chul and Kathleen appeal their convictions, custodial sentence, the
    restitution and forfeiture orders, the fine in lieu of forfeiture, the default
    term of imprisonment, the dismissed constitutional challenge and the dismissed
    s. 11(b) application.

[7]

Kenneth appeals his convictions, his sentence, and the trial judges
    decision to not award him interest on monies returned to him at the forfeiture
    hearing.

[8]

The Crown appeals Kenneths acquittals.

BACKGROUND

[9]

Kenneth operated a convenience store in
    Burlington called Variety Plus. He is a registered agent for the Ontario
    Lottery and Gaming Corporation (OLG).

[10]

Kenneth worked every day from 12:00 p.m. until
    10:00 or 10:30 p.m. Jun-Chul worked in the store every day from 6:00 a.m. to at
    least 10:00 a.m. Kathleen did not work in the store.

The split ticket scheme for the Super 7 lottery

[11]

Variety Plus had a lottery terminal connected to
    the OLGs central computer system, through which it sold and validated lottery
    tickets. When a winning ticket was validated, the terminal played a jingle. The
    jingle was the same no matter the prize, and no matter the number of prizes a
    single ticket won. Players of Super 7 could win money  anywhere from $10 to
    the grand prize  and/or up to two free-play tickets per lottery ticket. The
    purchaser of a Super 7 ticket could pay an extra $1 to play in a further
    lottery game called Encore. A free-play ticket could automatically come with
    Encore included, but not always.

[12]

When a ticket was validated and it won a
    free-play ticket including Encore, the free ticket would print automatically.
    If the free-play ticket did not include Encore, the store clerk would have to ask
    the customer if they wanted to purchase Encore, and then enter the customers
    response into the terminal to close the transaction and print the free-play
    ticket. By way of example, if a validated ticket won two free-play tickets, one
    automatically with Encore and one without, a jingle would play but it would not
    indicate how many free-play tickets were won. The free-play ticket that
    included Encore would then print automatically. The second free-play ticket
    would not print until the clerk indicated whether the customer wanted to add
    Encore. The transaction would only close when the clerk inputted the customers
    answer and the ticket printed.

[13]

The scheme for which the appellants were
    convicted involved tickets that were validated at Variety Plus. The customer
    was given one free ticket and either Jun-Chul or Kenneth kept the other. One of
    the free tickets the Chungs kept won $12.5 million.

Kathleen claims the prize

[14]

In January 2004, Kathleen called the OLG and
    asked about the procedure for claiming the proceeds of a winning ticket. She
    said the ticket belonged to her brother and he was concerned about publicity if
    he claimed the prize. Following that initial phone call, Kathleen had three
    separate meetings with representatives of the OLG.

[15]

The first meeting was on February 5, 2004. Ahead of the meeting, OLG
    officials learned that
the winning ticket had been purchased at an
    outlet in St. Catharines. When
Kathleen arrived at the meeting
    to claim the $12.5 million prize, she said it was her ticket, that she had no
    brother, and that she wanted to keep her name confidential.
Kathleen
    could not give specific or general information as to the time, date, or
    location of the purchase of the original ticket. The representatives asked
    Kathleen whether she went to St. Catharines, and she said she did not. When the
    OLG asked her to sign a statutory declaration that, among other things, stated
    she was not related to a Kenneth Chung, Kathleen started crying and admitted
    Kenneth was her brother. On the same day, an OLG representative spoke with
    Kenneth. Kenneth admitted he was Kathleens brother and that Kathleen lied to
    protect him. He said the ticket belonged to Kathleen and that she purchased it
    on her own.

[16]

The
    second meeting was on February 10, 2004. Kathleen, Kenneth, and Jun-Chul
    attended. The OLG advised they were concerned about where and when the ticket
    was purchased. The Chungs advised that Jun-Chul validated the winning ticket on
    December 27, 2003, sometime between 9:00 and 11:00 a.m. They also stated that
    Jun-Chul ran a health food business, and that Kathleen made deliveries for the
    business, sometimes to St. Catharines.

[17]

The
    third meeting was on March 10, 2004. Again, Kathleen, Kenneth, and Jun-Chul
    attended. Kathleen was interviewed separately. She said on the morning she won,
    Jun-Chul was validating multiple tickets. At one point the jingle sounded, and
    her father said shed won. She explained it took her a while to calm down, so
    she waited in her car and used her cell phone to call her brother and mother.
    She hung around the store for a little while and then went home. She reiterated
    that she did not know where or when she bought the original ticket. She
    explained again that she does deliveries for her father throughout Ontario and
    that she buys tickets wherever she is. She provided a handwritten list of
    delivery locations, which included three locations in St. Catharines. None of
    the locations matched the location of retailer that sold the winning ticket. (Later,
    when the matter was at trial, the Crown produced Kathleens cell phone records
    which did not show she had been to St. Catharines.)

[18]

The
    OLG eventually paid Kathleens claim on December 28, 2004.

[19]

The
    true owner of the winning ticket was not determined for several years. In
    January 2011, Daniel Campbell, who lived in St. Catharines, was identified as
    the winner and paid $12.5 million plus interest.

The Hi Ok Chung trust

[20]

Kathleen
    deposited the $12.5 million cheque in an account with CIBC. The money was then
    dispersed in many ways, with most of the money vested in the Hi Ok Chung
    Family Trust.

[21]

Hi
    Ok Chung is Jun-Chuls sister. Hi Ok lived in Korea and was the settlor of the
    trust. Jun-Chul was one of three trustees, and Jun-Chul, Kathleen, and Kenneth
    were all beneficiaries of the trust. Most of the trusts assets came from the
    lottery winnings. Some of the assets were used to purchase real estate or to
    provide mortgages for properties Kathleen and Kenneth purchased.

THE TRIAL

[22]

The Chungs were charged as follows:
[1]

a)

Count 1: that Jun-Chul and Kenneth stole lottery tickets during an
    eight-month period ending on February 6, 2004, contrary to s. 334(b) of the
Criminal
    Code
;

b)

Count 2: that Jun-Chul and Kenneth were in possession of the lottery
    tickets referred to in count 1, contrary to s. 354(1)(a) of the
Criminal
    Code
;

c)

Count 3: that Jun-Chul and Kenneth stole the winning Super 7 lottery
    ticket, said to be the property of Daniel Campbell, contrary to s. 334(a) of
    the
Criminal Code
;

d)

Count 4: that Jun-Chul, Kenneth, and Kathleen possessed the winning
    Super 7 lottery ticket, knowing that it was obtained by the commission of an
    indictable offence, contrary to s. 354(1)(a) of the
Criminal Code
;

e)

Count 5: that Jun-Chul, Kenneth, and Kathleen did, by deceit,
    falsehood or other fraudulent means, defraud the OLG of $12.5 million, contrary
    to s. 380(1) of the
Criminal Code
; and

f)

Count 6: that Jun-Chul, Kenneth, and Kathleen possessed all or part
    of the $12.5 million, and property purchased with it, knowing the money and
    property were obtained by the commission of an indictable offence, contrary to
    s. 354(1)(a) of the
Criminal Code
.

(1)

Convictions

[23]

The trial judge came to the following
    conclusions.

Count 1:
Theft under $5000 (the 30
    tickets that won nominal or no prize)

[24]

The trial judge held there was no doubt the evidence disclosed a
    scheme to steal free-play lottery tickets.
Having regard to the hours of
    work of Kenneth and Jun-Chul, and the timing of the transactions, the only
    reasonable conclusion from the evidence was that both Jun-Chul and Kenneth were
    guilty of the thefts
.

[25]

Although
    neither Jun-Chul nor Kenneth physically stole every one of the tickets, there
    was joint participation because, on at least eight occasions, one validated the
    original ticket and the other validated the generated free-play ticket. Where
    the evidence discloses joint participation, both accused can be convicted as
    principals. Therefore, the trial judge found they were both guilty of all the
    split ticket thefts as parties under s. 21(1)(a) of the
Criminal Code.


[26]

The
    trial judge considered whether reasonable inferences inconsistent with guilt
    were available, but found they were not. Specifically, he considered whether
    the winners of both free-play tickets validated both, in which case each winner
    would have had to cash the two different tickets in two different places on
    different dates. While that was theoretically possible, it was unreasonable to
    infer that happened 30 times over an eight-month period.

Count 2: Possession of property obtained by crime (the 30
    tickets)

[27]

Based
    on the same evidence tendered on count 1, the trial judge found it was clear
    that Jun-Chul and Kenneth were guilty of count 2.

Count 3: Theft over $5000 (the winning ticket)

[28]

There
    was an issue at trial about whether there had to be proof that Campbell was the
    true winner. The trial judge was not satisfied of this beyond a reasonable
    doubt. However, relying on
Vézina and Côté v. The Queen
, [1986] 1
    S.C.R. 2, the trial judge concluded that the name of the rightful owner is mere
    surplusage and can be ignored as long as there is no prejudice to the accused.
    There was no prejudice, so there was no burden on the Crown to prove the
    identity of the true owner of the winning ticket.

[29]

The
    trial judge then considered the evidence tendered under count 3 which made it
    clear that on December 22, 2003, Jun-Chul validated the four tickets that were
    purchased on December 19, 2003 in St. Catharines. Those four tickets
    collectively generated five free-play tickets, one of which was the winning
    ticket. Four of the free-play tickets were validated in St. Catharines on
    December 27, 2003. Only the winning ticket was validated at Variety Plus on
    December 27, 2003. There was only one reasonable conclusion: Jun-Chul kept the
    $12.5 million winning ticket for himself and therefore stole it from the
    rightful owner.

[30]

The
    trial judge considered whether it was possible on the evidence that Kathleen
    purchased the original ticket. To accept that inference, he would have to
    conclude Kathleen purchased all four original tickets in St. Catharines on
    December 19, 2003. She would also have to have been the person who validated
    all four tickets at Variety Plus on December 22, 2003, validated four of the
    free-play tickets in St. Catharines on December 27, 2003 and then validated the
    winning ticket at Variety Plus on the same day. The evidence was not capable of
    supporting that inference.

[31]

The
    trial judge found the Crown did not establish that Kenneth was present at the
    store when Jun-Chul stole the ticket, and he was not persuaded beyond a
    reasonable doubt that Kenneth was involved in the theft of the winning ticket. In
    coming to this conclusion, he did not consider the evidence relating to the
    split ticket scheme which was the basis for Kenneths convictions on counts 1
    and 2. He reasoned that the Crown had not made a similar fact application and
    accordingly, he acquitted Kenneth of count 3.

Count 4:
Possession of property obtained
    by crime (the winning ticket)

[32]

Considering
    Jun-Chul was guilty of stealing the $12.5 million winning lottery ticket, he was
    also guilty of count 4.

[33]

The
    trial judge concluded that there was no doubt that Kathleen knew the ticket had
    been stolen. She consistently lied about her purchase of the original ticket
    and the validation of the winning ticket. Her cellphone, bank, and Visa records
    showed she could not have been where she said she was at the relevant times.
    She obviously lied to the OLG and knew the ticket was stolen. She was guilty on
    count 4.

[34]

With
    respect to Kenneth, the trial judge found that there was no evidence that
    Kenneth was in the store at the time the winning ticket was validated. He was
    not satisfied that Kenneth knew the ticket was stolen. It was a reasonable
    possibility that he was told Kathleen was the rightful winner and he believed
    her. Accordingly, the trial judge acquitted Kenneth of count 4.

Count 5: Defrauding the OLG of $12.5 million

[35]

The
    trial judge convicted Jun-Chul and Kathleen of count 5.

[36]

The
    trial judge concluded that it was clear Jun-Chul stole the winning ticket and
    that Kathleen knew it was stolen. She knew she did not purchase or validate any
    of the original tickets, and that she did not validate any of the generated
    free-play tickets. When Jun-Chul and Kathleen met with the OLG, they falsely
    represented that Kathleen purchased the original ticket and that she owned the
    winning ticket. They knew that was false but continued to lie until they
    received the money. Therefore, they obtained the $12.5 million through
    falsehoods and defrauded the OLG of that sum. That finding was not altered by
    the fact that the OLG paid the money despite their suspicions.

[37]

The
    trial judge acquitted Kenneth of count 5. Again, the trial judge held there was
    a reasonable possibility that Kenneth was told and believed that Kathleen was
    the legitimate purchaser of the original ticket.

Count 6: Possession of property obtained by crime (the $12.5
    million paid)

[38]

The
    trial judge convicted Jun-Chul and Kathleen on count 6. They both knew the
    $12.5 million was obtained fraudulently, and both possessed the $12.5 million
    or property derived from it. Jun-Chul was a trustee and beneficiary of the Hi
    Ok Chung Family Trust, which obtained most of the funds. Kathleen used a large
    portion of the proceeds to purchase an expensive home and some cars. She was
    also the beneficial owner of a number of investments.

[39]

The
    trial judge acquitted Kenneth. Kenneth obtained considerable benefit from some
    of the proceeds of the $12.5 million. However, for the same reasons as counts 3-5,
    the trial judge was not convinced beyond a reasonable doubt that Kenneth knew
    that the money and property were obtained by fraud.

(2)

Sentence

[40]

The trial judge held that, in the circumstances,
    neither suspended sentences nor conditional sentences were appropriate.
    Deterrence was paramount, so some period of custody was mandatory for each
    accused.

[41]

The trial judge accepted the Crowns sentencing
    ranges for each of the accused, but applied reductions for each to reflect the
    mitigating factors. He sentenced Jun-Chul to a term of imprisonment of seven
    years. He sentenced Kenneth to a term of imprisonment of 10 months. He
    sentenced Kathleen to a term of imprisonment of four years.

[42]

Pursuant to the rule in
Kienapple v.
    R.
,
[1975] 1 S.C.R. 729
, the
    trial judge imposed conditional stays for Kenneth (count 2) and Jun-Chul (counts
    2 & 4). Kathleens conviction under count 6 did not meet the criteria for a
    conditional stay.

(3)

The constitutional challenge

[43]

The Crown requested fines in lieu of forfeiture
    against Jun-Chul and Kathleen pursuant to s. 462.37 of the
Criminal
    Code
.

[44]

Where an offender is convicted of a designated
    offence, s. 462.37 permits the court to order that any property obtained from
    the proceeds of crime be forfeited to the Crown. Where that property cannot be
    made the subject of a forfeiture order, s. 462.37(3) allows the court to order
    the offender to pay a fine in lieu of forfeiture equal to the value of the
    property. Pursuant to s. 462.37(4), the imposition of a fine in lieu of
    forfeiture must include the imposition of specified terms of imprisonment in
    default of payment. Depending on the amount of the fine, s. 462.37(4)
    prescribes defined minimum and maximum terms. For fines above $1 million, the
    term of imprisonment must be not less than five years and not more than ten
    years.

[45]

Jun-Chul and Kathleen challenged the mandatory
    minimum sentences specified in s. 462.37(4) under ss. 7 and 12 of the
Charter
.

[46]

The trial judge found that Parliaments
    intention in enacting the provisions was to ensure that crime does not pay. The
    provisions set out in ss. 462.37(3) and 462.37(4) are not intended to punish
    the offender but are designed to encourage offenders to disgorge ill-gotten
    gains. He also found it instructive that many of the general
Criminal
    Code
provisions on fines apply to fines in lieu of
    forfeiture.

[47]

The trial judge noted the following factors in
    support of his decision to dismiss the application:

(a)

if a fine is paid in part, there will be a
    proportionate reduction in the amount of custodial time to be served (s. 734.8);

(b)

if an offender requires more time to pay a fine,
    they may apply to vary the order (s. 734.3);

(c)

before the Crown can apply for a warrant of
    committal for non-payment, the Crown must attempt to use other means of
    collecting the fine (ss. 734.5 and 734.6);

(d)

the court cannot issue a warrant of committal
    for non-payment until the time allowed for payment has expired, the mechanisms
    provided by ss. 734.5 and 734.6 are not considered appropriate, or the
    offender has, without reasonable excuse, refused to pay the fine (s. 734.7);

(e)

inability to pay a fine is a reasonable excuse
    for non-payment;

(f)

at the time of sentencing, the court has considerable
    discretion as to the length of time that may be given to pay the fine; and

(g)

mandatory minimum and maximum terms of
    imprisonment must also be imposed in other cases where a fine is levied. Sections
    734(4) and 734(5) require a term of imprisonment in default of payment of a
    fine.

[48]

Considering the purpose of the challenged
    provisions and their actual impact in light of other provisions of the
Criminal
    Code
, the trial judge held that the mandatory minimum
    terms of imprisonment required by s. 462.37(4) of the
Code
did not violate s. 12 of the
Charter
.

[49]

Regarding s. 7, the offender has the right to
    make submissions on relevant issues at each stage of the proceeding. The trial
    judge held that the mere fact that there is a mandatory term of imprisonment
    does not deprive the offender of any s. 7 rights. The defence argument was
    more properly left to a determination under s. 12.

(4)

Restitution,
    forfeiture, and fines in lieu

[50]

The Crown sought a $14.8 million restitution
    order, a $7.7 million forfeiture order, and a $4.6 million fine in lieu of
    forfeiture ($2.3 million each) against Jun-Chul and Kathleen. The Crown also
    sought a six-year custodial term in default of payment.

[51]

Kenneth applied for some of the seized funds to
    be returned to him on the basis they were not properly part of the forfeited
    sums.

[52]

The trial judge issued a $12.5 million
    restitution order against Jun-Chul and Kathleen, jointly and severally. The
    trial judge also ordered $7.5 million be forfeited to the Crown by Jun-Chul and
    Kathleen.

[53]

He ordered funds received from Kenneth to be
    returned to him, as he was not satisfied that amount was derived from the
    proceeds of the lottery funds.

[54]

Notwithstanding Jun-Chul and Kathleens
    submissions, the trial judge found there were no grounds for a fine in lieu of
    forfeiture of anything less than $4.6 million. The trial judge noted, as
    reflected in
R. v. Lavigne
, 2006 SCC 10,
    [2006] 1 S.C.R. 392, that the objective of the statutory provisions is to
    ensure crime does not pay and the ability to pay is not a relevant factor.

[55]

The trial judge did not agree that Jun-Chul
    should bear all the responsibility for the fine in lieu of forfeiture. The
    lottery funds were made out to Kathleen, and she was an active participant in
    securing the funds from the OLG. Accordingly, they should be equally
    responsible for the outstanding amount.

[56]

The trial judge gave both Jun-Chul and Kathleen
    seven years to pay. Considering the mandatory five-year minimum default
    sentence for fines above $1 million, he held a six-year term of imprisonment
    was appropriate upon default of payment.

(5)

The s. 11(b) application

[57]

Prior
    to trial, the appellants brought an application under s. 11(b) of the
Charter
.
    The application judge found the Crown genuinely responded to the circumstances
    of the case including the voluminous disclosure, multiple co-accused, and an
    ever-changing roster of defence counsel. Given the complexity of the case and
    reasonable reliance on the law as it existed pre-
Jordan
, 2016 SCC 27,
    [2016] 1 S.C.R. 631, she found the Crown had established that the time the case
    would have taken, at the anticipated end of trial on March 24, 2017, was
    justified. Therefore, there was no breach of s. 11(b) of the
Charter
.

ISSUES ON APPEAL

1.

Conviction Appeal:

(a)

Did the trial judge impose
    unreasonable verdicts for Kathleen Chung?

(b)

Did the trial judge impose
    unreasonable verdicts for Jun-Chul Chung?

(c)

Did the trial judge impose
    unreasonable verdicts for Kenneth Chung?

2.

Sentence Appeal:

(a)

Restitution and Fine in lieu:

(i)

Did the trial judge
    err in dismissing the constitutional challenges?

(ii)

Did the trial judge err in
    establishing time to pay and a six-year sentence in default of payment?

(b)

Custodial Sentence:

(i)

Did the trial judge
    err in principle in imposing the sentences for the appellants?

3.

Did the application judge err in dismissing the s. 11(b) stay
    application?

4.

Did the trial judge err in not granting interest to Kenneth Chung?

5.

Did the trial judge err in acquitting Kenneth of counts 3-6?

ANALYSIS

(1)

Conviction Appeals

Issue 1(a): Did the trial judge impose unreasonable verdicts
    for Kathleen Chung?

[58]

Kathleen
    was convicted of counts 4, 5, and 6. We discuss the related counts 4 and 6 and
    then count 5.

Count 4: Possession of property obtained by crime (the winning ticket)

[59]

Kathleen was convicted of possession of the winning ticket
knowing that it was obtained by the commission of an indictable
    offence. She appeals on two related grounds: (i) that the verdict was
    unreasonable; and (ii) that the trial judge gave inadequate consideration to
    Kathleens
mens rea
.

[60]

She submits that the verdict is unreasonable
because the
    evidence supported a reasonable inference that she did not know the ticket was
    stolen, but believed the ticket belonged to Kenneth or Jun-Chul. She submits
    that the evidence supports an inference that she only
said
she was the
    owner either because she thought her father and brother were precluded from
    claiming the prize because they would be insiders as a result of Kenneths
    role as agent retailer for the OLG, or because she wanted to protect her brother
    from unwanted publicity.

[61]

By
    failing to consider these inferences, Kathleen submits that the mental element
    for the offence was not established. She submits that the trial judge relied on
    her lies to the OLG about her purchase of the ticket to conclude that she knew
    the ticket was stolen. However, she submits that her lies were equally
    consistent with an honest belief that Jun-Chul or Kenneth was the tickets
    rightful owner.

[62]

We
    do not accept these submissions.

[63]

This
    court recently reviewed the principles applicable to an appeal based on the
    assertion of unreasonable verdict. In
R. v. Lights
,
2020 ONCA 128, 149 O.R. (3d) 273, Watt
    J.A., speaking for the court, set out the role of the appeal court at para. 30:

A verdict is unreasonable if it is
    one that no properly instructed jury, acting judicially, could reasonably have
    rendered. This test requires not only an objective assessment of the evidence adduced
    at trial, but also, to some extent at least, a subjective evaluation of that
    evidence. To discharge this responsibility, we are required to review, analyse,
    and, within the limits of appellate disadvantage, weigh the evidence. This
    weighing is only to determine whether that evidence, considered as a whole, is
    reasonably capable of supporting the verdict rendered. [Citations omitted.]

[64]

He
    also noted, at para. 33, that the court is entitled to consider that the
    appellant did not testify:

When the claim of an unreasonable
    verdict rests on the assertion that, based on the evidence, the trier of fact
    could not have reasonably rendered the guilty verdict, an appellate court is
    entitled to consider that the accused did not testify at trial or adduce other
    evidence to support any other reasonable inference consistent with innocence.
    [Citations omitted.]

[65]

And
    at para. 39:

When a verdict that rests wholly
    or substantially on circumstantial evidence is challenged as unreasonable, the
    question appellate courts must ask is whether the trier of fact, acting
    judicially, could reasonably be satisfied that the guilt of the accused was the
    only reasonable conclusion available on the evidence taken as a whole:
Villaroman
,
    at para. 55. Fundamentally, it is for the trier of fact to determine whether
    any proposed alternative way of looking at the case as a whole is reasonable
    enough to raise a doubt about the guilt of the accused:
Villaroman
, at
    para. 56.

[66]

We
    conclude that the evidence, considered as a whole, is reasonably capable of
    supporting the guilt of Kathleen on count 4.

[67]

The
    evidence does not support the inference that Kathleen believed her brother or
    father could not claim the prize because her brother was a retailer. Were this
    the case, she would not have initially said that the ticket belonged to her
    brother. The policy regarding agents, retailers and insiders was explained to
    her. It did not prevent them from winning and claiming prizes.

[68]

Kathleen
    did not testify so the only evidence regarding publicity concerns arose from
    the testimony of David Summers, who spoke to her during her initial call to the
    OLG in January 2004. He testified that it would be better if the OLG handled
    the media. He told her that generally certain information would be given to the
    media, including the details of the particular lottery, the amount won, the
    name of the winner, and the city in which they lived.

[69]

The
    trial judge understood that this was a circumstantial case and applied the
    principles from
R. v. Villaroman
,
    2016 SCC 33, [2016] 1 S.C.R. 1000, to his analysis
.
He
    understood Kathleens submission that her lack of knowledge of the theft was a
    reasonable inference from the evidence. He concluded that this inference was
    not reasonable:

Kathleen Chung has lied throughout
    about her purchase of the original ticket and the validation of the winning
    ticket. She could not, in fact, have purchased any of the original tickets nor
    validated any of the subsequent tickets. Apart from the OLG computer records,
    her cellphone, banking and VISA records show that she could not have been where
    she said she was at the relevant times. She obviously lied to the OLG personnel
    about being the legitimate owner of the ticket and how she came to possess it. She
    knew the ticket was stolen.

[70]

The
    verdict was not unreasonable and the trial judge properly considered Kathleens
    knowledge of the theft  the appeal with respect to count 4 is dismissed.

Count 6: possession of property obtained by crime (the $12.5
    million paid)

[71]

It
    follows logically from the above analysis on count 4, that the appeal on count
    6 must be dismissed. The trial judge found  and we have confirmed  that
    Kathleen knew the ticket was stolen and received the proceeds. The funds were
    deposited into her bank account and, as the trial judge concluded:

Kathleen Chung obtained the benefit
    of large amounts of the proceeds, including the purchase of an expensive home
    and some cars, and she was the beneficial owner of a number of investments.

[72]

The
    appeal with respect to count 6 is dismissed.

Count 5: Defrauding the OLG of $12.5 million

[73]

Kathleen
    Chung was convicted of defrauding the OLG of $12.5 million.

[74]

She
    claims that the trial judge did not meaningfully consider her arguments at
    trial and erred in his analysis of the offence of fraud. By focusing on her
    dishonesty, he failed to consider whether her dishonesty resulted in
    deprivation. She submits that dishonesty is insufficient to establish fraud;
    the dishonesty must cause the victim to act to its detriment. In other words,
    her lies did not cause the OLG to act to its detriment because the OLGs policy
    was to pay the bearer of the ticket unless someone else claimed it. Therefore,
    the OLG paid Kathleens claim because she was the bearer of the ticket, not
    because she falsely claimed to be the rightful owner.

[75]

Although
    the OLG also paid out the funds to the rightful owner, there was no evidence it
    was under any legal obligation to do so. Instead, the OLG paid out the second
    claim because it wanted to restore the public confidence it lost after the
    insider win scandal. Kathleens actions did not directly cause the detriment.
    Kathleen submits that the trial judge did not meaningfully consider these
    arguments at trial and erred by focusing on the element of dishonesty and
    failing to consider whether the dishonesty resulted in deprivation.

[76]

Kathleen
    submits that this situation is akin to that in
R. v. Benson (M.) et al.
,

2012 MBCA 94, 284 Man. R. (2d) 204
, a decision of the
    Manitoba Court of Appeal. In that case, Mr. Helgason was acquitted of fraud in
    respect of a falsified claim to the Manitoba government regarding a
    resettlement programme for persons whose property was expropriated. In
    dismissing the Crown appeal of acquittal on this count, the court relied on the
    trial judges acceptance of the government representatives evidence that the
    government was not concerned about falsification and would have acted as it did
    irrespective of Helgasons statements.

[77]

This
    is not an analogous situation.

[78]

There
    is no evidence here that the OLG would have paid the money to Kathleen had they
    known that the ticket was stolen. On the contrary, David Myers evidence was
    that the OLG was concerned that they were paying the rightful owner and that if
    it was a stolen ticket and we knew it was stolen, we would not have paid that
    ticket.

[79]

This
    court has confirmed that the deprivation element of fraud is satisfied even if
    the accuseds dishonest conduct is not the sole cause of the deprivation:
R.
    v. Drakes
, 2009 ONCA 560
. In
    fact, 
the causal link between the dishonest conduct and the
    deprivation may not depend on showing that the victim relied on or was induced
    to act by the fraudulent act:

R. v. Riesberry
,
    2015 SCC 65, [2015] 3 S.C.R. 1167, at para. 24.

[80]

The
    guilty verdict for Kathleen Chung on count 5 was reasonable. The appeal on this
    count is dismissed.

Issue 1(b): Did the trial judge impose unreasonable verdicts
    for Jun-Chul Chung?

[81]

Jun-Chul
    Chung appeals the findings of guilt on counts 1 to 6:

·

Count 1: theft under $5000 (the 30 tickets that won nominal or no
    prize);

·

Count 2: possession of property obtained by crime (the 30
    tickets);

·

Count 3: theft over $5000 (the winning ticket);

·

Count 4: possession of property obtained by crime (the winning
    ticket);

·

Count 5: defrauding the OLG of $12.5 million; and

·

Count 6: possession of property obtained by crime (the $12.5
    million paid).

[82]

Counts
    2 and 4 were conditionally stayed pursuant to
Kienapple
.

[83]

Jun-Chul
    relies on Kathleens submissions and further submits that the guilty verdicts
    were unreasonable because: (i) the evidence permitted an inference that he
    believed Kathleen was the rightful owner of the winning ticket; (ii) it was not
    established that Daniel Campbell was the real owner; (iii) the trial judge
    erred in relying on Exhibit 38; and (iv) the OLG had a policy to pay the bearer
    of the ticket.

[84]

Kathleen
    does not take the position that she was the rightful owner and the trial judge
    clearly rejected that inference. He accepted the evidence that Kathleen could
    not have purchased the ticket based on cell phone and banking records and that
    the ticket had been stolen as part of the scheme to steal lottery tickets. The
    evidence also disclosed that, contrary to what Kathleen and Jun-Chul told OLG
    personnel, Kathleen could not have been sitting in her car with Jun-Chul outside
    of Variety Plus shortly after Jun-Chul validated the winning ticket. The trial
    judge properly rejected the suggestion that Jun-Chul believed that Kathleen was
    the rightful owner of the winning ticket.

[85]

The
    Crown did not need to establish that Campbell was the real owner. The trial
    judge correctly relied on
Vézina
, and
Little and Wolski v. R.
,
    [1976] 1 S.C.R. 20, both of which confirm that it is not necessary to prove the
    name of the rightful owner absent prejudice to the accused. The trial judge
    determined that there was no prejudice.

[86]

The
    OLG system is capable of producing a transaction report of ticket purchases. The
    purchasing patterns for Variety Plus were set out in Exhibit 38. This report
    tracked the 30 split tickets in issue. Ten of the original tickets were
    validated during the hours that Kenneth was at work, and eight original tickets
    were validated during the hours that Jun-Chul was at work. 12 of the original
    tickets were validated during hours when it was not clear who was at work.

[87]

Each
    of the 30 original tickets were validated at Variety Plus and generated two
    free-play tickets. For every one of the 30 original tickets, one of the
    free-play tickets was validated at Variety Plus on one day, and the other
    free-play ticket was validated elsewhere on that or a different day.

[88]

The
    trial judge carefully reviewed this evidence and concluded with respect to count
    1:

There is no doubt, in my view, that the evidence discloses
    a scheme to steal free play lottery tickets.

In every case, a lottery ticket was purchased and that lottery
    ticket was validated at Variety Plus. In every case, two free tickets were
    generated. In every case, one of those tickets was validated elsewhere, and the
    second free ticket was validated at Variety Plus. In every case, the validation
    of the original ticket was done by either Jun-Chul Chung or Kenneth Chung, and
    the validation of the second free ticket was done by Jun-Chul Chung or Kenneth
    Chung.

In my view, the evidence, while
    circumstantial, is consistent only with the guilt of Jun-Chul Chung and Kenneth
    Chung, and it is inconsistent with any other reasonable conclusion.

[89]

These
    findings of fact also apply to count 3. The trial judge made no error in
    relying on Exhibit 38 to conclude that Jun-Chul participated in the scheme to
    steal lottery tickets.

[90]

Jun-Chul
    submits that the OLGs policy to pay the bearer of the ticket is relevant to
    the conviction for theft. It is not. Any relevance would potentially be to the
    conviction for fraud. For the reasons set out in relation to Kathleen, we do
    not accept this submission for Jun-Chul.

[91]

For
    these reasons, we do not accept that the verdicts for Jun-Chul on counts 1-6
    were unreasonable and his appeal on this basis is dismissed.

Issue 1(c): Did the trial judge impose unreasonable verdicts
    for Kenneth Chung?

[92]

Kenneth
    appeals his convictions for theft and possession of property obtained by crime.
    The possession of property obtained by crime was stayed pursuant to
Kienapple
.
    The convictions relate to the 30 tickets that did not win the large prize.

[93]

Kenneth
    submits that the trial judge erred in relying on Exhibit 38 (described above). He
    also submits that the trial judge erred because the tickets had no value so
    there was no theft in the first place.

[94]

The
    trial judge determined that the evidence discloses a scheme to steal free play
    lottery tickets. He considered, and rejected as unreasonable, inferences other
    than the fact that Kenneth participated in the scheme. Although Kenneth Chung
    did not testify, he had told the OLG the hours he worked. The trial judge
    found:

In my view, having regard to the
    hours of work of Jun-Chul Chung and Kenneth Chung, and the timing of the
    transactions, it is clear that Jun-Chul Chung stole some of the tickets and
    Kenneth Chung stole some.

[95]

Some
    of the split tickets were validated during the hours that Kenneth worked.
    Although he now suggests that perhaps his mother was working during some of
    those hours, this submission was not made to the trial judge. Nor was the
    evidence of what he told the OLG ever challenged at trial. We give no effect to
    this submission made for the first time on appeal.

[96]

Kenneth
    also submits that it is not illegal to take something that has no value. Since
    a lottery ticket on its own is merely a chance it has no value and  while it
    may be immoral to take someone elses lottery ticket  it is not illegal. We
    reject this submission outright. To steal means to take the property of another
    without permission.

[97]

We
    dismiss Kenneth Chungs appeal as to convictions.

(2)

Sentence Appeals:

Issue 2(a): Restitution and Fine in Lieu

(i) Did the trial judge err in dismissing the
    constitutional challenges?

[98]

Section
    462.37(1) of the
Criminal Code
authorizes the Crown to seek the
    forfeiture of any property that is the proceeds of crime, obtained by the
    commission of a designated offence. The objectives of the provision are to
    deprive the offender  of the proceeds of their crime and to deter them from
    committing crimes in the future:
Lavigne
, at para. 16. As this court
    held in
R. v. Schoer
,
2019 ONCA 105, 371 C.C.C. (3d)
    292,
where the sentencing judge is satisfied on a balance of
    probabilities that the property is the proceeds of crime, that the offender had
    possession or control of it at some point, and the designated offence was
    committed in relation to that property, a forfeiture order must be made: at
    para. 88, citing
Lavigne
, at para. 14;
R. v. Angelis
, 2016
    ONCA 675, 133 O.R. (3d) 575, at para. 35, leave to appeal refused, [2016]
    S.C.C.A. No. 484.

[99]

Parliament
    anticipated circumstances in which property that is the proceeds of crime may
    no longer be available for forfeiture: it may have been used, transferred or
    transformed, or may simply be impossible to find:
Lavigne
, at para. 18.
    To ensure, nevertheless, that the proceeds of a crime do not indirectly
    benefit those who committed it, Parliament established the fine in lieu of
    forfeiture provisions:
Lavigne
, at para. 18. Where the property that
    has been in the control of the offender is no longer available to be forfeited,
    s. 462.37(3) provides that a fine may be imposed in lieu of forfeiture.

[100]

Unlike the forfeiture
    provisions, the fine in lieu of forfeiture provisions allow for the exercise of
    some discretion. The key interpretive principle articulated in
Lavigne
is that the fine in lieu provisions are to operate so as to ensure that crime
    does not benefit those who committed it: at para. 18. There may be
    circumstances where the objectives of the provision do not call for a fine to
    be imposed, for example if the offender acted alone and did not benefit from
    the crime:
Lavigne
, at para. 28;
Schoer
, at para. 91.

[101]

However, once a
    sentencing judge has determined that a fine in lieu of forfeiture ought to be
    imposed, the sentencing judge has no discretion over the value of the fine to
    be imposed. The fine must be equal to the value of the property for which it is
    a substitute:
Lavigne
, at para. 34;
Criminal Code
, s.
    462.37(3). Where there are multiple offenders before the court, however, and
    the property passed through the hands of one offender to another without the
    first offender retaining the benefit of the full value of the property, the
    sentencing judge may allocate a portion of the fine less than the full value of
    the property that had been under the offenders possession and control,
so long as the balance of the total value of the proceeds of crime
    are distributed to the other offenders before the court
:
R. v.
    Dieckmann
, 2017 ONCA 575, 355 C.C.C. (3d) 216, at paras. 90-100, leave to
    appeal refused, [2018] S.C.C.A. No. 304 and No. 381.

[102]

As a means of
    enforcing the fine, s. 462.37(4) requires the judge who imposes the fine to
    also impose a term of imprisonment in the event that the offender does not pay
    the fine. Although the sentencing judge has some discretion in the length of
    the term of imprisonment to be set, that discretion is bounded by mandatory
    minimum and maximum terms of imprisonment that correspond to the quantum of the
    fine. For example, default of a fine of more than $1 million requires a
    mandatory minimum sentence of five years and a maximum of ten years. The
    sentencing judge must provide the offender with reasonable time to pay:
Lavigne
,
    at paras. 45-47.

[103]

Section 462.37(4)
    provides a graduated approach to setting the term of imprisonment consequent to
    default. The larger the amount of unrestored proceeds of crime that the
    offender is found to have possessed or controlled, the longer the minimum term
    of incarceration: see e.g.
R. v. Rafilovich
, 2019 SCC 51, 442 D.L.R.
    (4th) 539, at para.
109;
c
f R. v. Pham
(2002),
    167 C.C.C. (3d) 570 (Ont. C.A.), at paras.
19-21 (where this court found
    the connection under s. 240 of the
Excise Tax Act
, R.S.C. 1985, c.
    E-14, between the quantity of the illegal substance possessed and the size of
    the minimum fine established proportionality).

[104]

The mechanism for
    imprisoning a defaulting offender is set out in s. 734.7 of the
Criminal
    Code
. As the trial judge explained, the court cannot issue a warrant of
    committal until the time allowed for payment has expired, the mechanisms
    provided by ss. 734.5 and 734.6 are not considered to be appropriate, or the
    offender has, without reasonable excuse, refused to pay the fine.  Although
    ability to pay a fine is not a consideration at the sentencing stage (except in
    terms of the time to be given to pay), it is a consideration at the committal
    stage both with respect to determining if time should be given to pay and with
    respect to determining whether there has been a reasonable excuse for not
    paying:
Angelis
, at para. 81;
R. v. Wu
, 2003 SCC 73, [2003] 3
    S.C.R. 530, at paras. 60-69. No one is to be committed unless judged not to
    have had a reasonable excuse for nonpayment. Poverty is a reasonable excuse.
    The section targets
refusals
 in other words, wilful nonpayment.

[105]

The rationale for
    imprisonment in default of payment is to give serious encouragement to those
    with the means to pay a fine to make payment:
Wu
, at para. 3. This
    aligns with the intent and purpose of Part XII.2 generally, particularly the
    forfeiture regime under s. 462.37: Parliament enacted these provisions to give
    teeth to the general sentencing provisions under Part XXIII. By depriving
    offenders and criminal organizations of the proceeds of their crimes,
    Parliament sought to ensure that crime does not pay and thereby also deter
    future crimes:
Lavigne
, at paras. 10, 16 and 31;
Angelis
, at
    para. 32. Imprisonment on default of payment is thus not additional punishment
    for the underlying offence, but a means of coercing payment from those offenders
    who have the means to pay.

The Constitutional Challenge

[106]

Kathleen Chung and
    Jun-Chul Chung challenge the constitutionality of the fine in lieu of
    forfeiture regime on two bases. First, they argue that s. 462.37(4), which
    requires the judge to set the term of imprisonment in default at the sentencing
    stage rather than the committal stage, violates both s. 7 and s. 12 of the
Charter
;
    and second, that s. 462.37(4)(a)(vii), which imposes a five-year mandatory
    minimum sentence in default of payment where the amount of the fine in lieu
    exceeds $1 million, violates s. 12.

[107]

As set out below, we
    conclude that the
Charter
challenges must fail.

The s. 7 challenge

[108]

Kathleen and Jun-Chul
    argue that s. 462.37 violates Kathleen and Jun-Chuls rights under s. 7 of the
Charter
on the basis that an offender is potentially deprived of liberty without
    being afforded natural justice. In particular, Kathleen and Jun-Chul argue that
    there is a denial of the right to participate and make
meaningful
submissions as to the length of sentence to be imposed on default of payment.

[109]

At the time the order
    is imposed, the offender has the opportunity to make submissions on the
    appropriate penalty in the event of default. Once default has occurred,
    however, the offender is limited to making submissions as to whether a warrant
    of committal should issue. The judge at the committal hearing has no
    jurisdiction to vary the sentence that was established at the front end.

[110]

Kathleen and Jun-Chul
    argue that neither opportunity for submissions  at the front end or back end 
    is sufficient to satisfy the requirements of natural justice. Natural justice,
    Kathleen and Jun-Chul argue, requires that an offender be able to make submissions
    on the appropriate sentence for default
after
the default has taken
    place and the reasons for the default are known. It is only then, Kathleen and
    Jun-Chul argue, that a judge can assess the moral culpability for the default.

[111]

We do not agree. When
    the Crown seeks a fine in lieu of forfeiture, the offender has the right to be
    heard with respect to whether the fine should be imposed, the amount of the
    fine, the time to pay, and the term of imprisonment on default. Relevant considerations
    at this stage include the offenders role in possessing or controlling the
    proceeds of crime, the whereabouts of unrestored proceeds, and  with respect
    to the time being given to pay  the offenders current and anticipated ability
    to pay.

[112]

The prospective
    imprisonment is premised on the offender having subsequently defaulted. If
    default occurs, it is either culpable or non-culpable. If non-culpable, there
    is either no refusal to pay, or no unreasonable refusal. In such circumstances,
    there is to be no imprisonment.

[113]

If nonpayment is
    culpable, there will be imprisonment.

[114]

We do not agree that
    the structure of the regime breaches principles of natural justice. The
    rationale for sentencing on default does not track the panoply of ordinary
    sentencing principles that includes, for example, rehabilitation. It is principally
    concerned with specific and general deterrence, which are by their nature
    prospective. Specific deterrence in this context is concerned with providing
    the offender with motivation to disclose what happened to the money and to
    choose to pay the fine. Given this limited rationale, nothing that happens
    subsequently is relevant to the quantum of sentence imposed. When the offender
    does not pay the fine, or only pays some of it, the only open question is
    whether the nonpayment was the result of an unreasonable refusal. Did the
    offender choose not to repay? Or were there circumstances outside the
    offenders control? The offender has full rights of participation at the
    committal hearing to answer this question. As to the prior question of what the
    penalty should be if the offender deliberately and unreasonably refuses to pay,
    there is nothing contrary to natural justice in the penalty being set in
    advance in accordance with submissions made before the circumstances of default
    are known. Consequently, we do not agree that there is a violation of s. 7.

The s. 12 challenges

[115]

Section 12 of the
Charter
guarantees to everyone the right not to be subjected to any cruel or unusual
    treatment or punishment. At trial, Kathleen and Jun-Chul specifically
    challenged s. 462.37(4)(a)(vii) which sets out a five-year mandatory minimum
    sentence on default of a fine exceeding $1 million. On appeal, they added a
    second argument respecting s. 462.37(4) as a whole: that the requirement that
    the term of imprisonment be set in advance of default  before any mitigating
    or aggravating circumstances can be known  has the ability to produce grossly
    disproportionate sentences in reasonably foreseeable cases and therefore violates
    s. 12.

[116]

For the reasons set
    out below, we conclude that neither s. 462.37(4)(a)(vii) nor s. 462.37(4)
    infringes s. 12.

The first argument  mandatory minimum sentences

[117]

There is no
    disagreement in this case that although the fine in lieu of forfeiture provisions
    do not constitute punishment, they are treatment for the purposes of s. 12.
    The dispute is whether this treatment is cruel or unusual.

[118]

Although the
    methodology for determining whether treatment or punishment is cruel or unusual
    has been developed primarily in the context of punishment, the same methodology
    applies  with some adaptation  to treatment:
R. v. Boudreault
, 2018
    SCC 58, [2018] 3 S.C.R. 599;
R. v. Nur
, 2015 SCC 15, [2015] 1 S.C.R.
    773. The basic structure is set out in
Nur
, at para. 46. First, the
    court must determine what constitutes a fit and proportionate sentence for the
    offence having regard to the objectives and principles of sentencing in the
Criminal
    Code
. Second, the court must ask whether the mandatory minimum sentence
    is grossly disproportionate to the fit and proportionate sentence. If the
    answer is yes, the mandatory minimum limits s. 12 rights, and will be
    constitutionally infirm unless it can be justified under s. 1 of the
Charter
.

[119]

Boudreault
is
    a leading authority on the interaction of s. 12 and sentencing measures, in
    that case the victim surcharge under s. 737 of the
Criminal Code
. The
    surcharge imposed a mandatory, pre-set fine for every summary conviction or
    indictable offence, regardless of the severity of the crime, the
    characteristics of the offender, or the effects of the crime on the victim: at
    para. 1. The Supreme Court struck down s. 737 on the basis it constituted cruel
    and unusual punishment in violation of s. 12 of the
Charter
. Although
    there are similarities between the victim surcharge and fine in lieu of
    forfeiture regimes, in this case, the analysis is complicated by the fact that
    the mandatory minimum sentence is a matter of enforcing a fine in lieu of
    forfeiture and not a penal fine as in
Boudreault
. Because the
    objectives and principles of sentencing are different in the two contexts, the
    gross disproportionality analysis is different.

[120]

The first question is
    whether the mandatory minimum sentence provision results in a grossly
    disproportionate sentence on the person before the court. If not, the question
    is whether reasonably foreseeable applications will impose grossly
    disproportionate sentences on others:
Nur
, at para. 77.

[121]

Following the
    structure set out in
Boudreault
, disproportionality is determined by
    considering three factors: (1) the purpose of the provision; (2) the impact of
    the mandatory minimum on the offender; and (3) recognized sentencing
    principles. These inquiries must be modified somewhat to account for the
    transposition from a penal to a non-penal context.

The purpose of the provision

[122]

As noted above, the
    purpose of the fine in lieu of forfeiture is to deprive the offender of the
    proceeds of his or her crime and deter potential offenders and accomplices:
Lavigne
,
    at para. 26. The mandatory minimum terms of imprisonment further these purposes
    by providing an incentive for those offenders with the means to pay a fine to
    actually pay it:
Wu
, at para. 3.

The impact on the offender

[123]

The provision provides
    a graduated approach to terms of imprisonment on default. The larger the amount
    of unrestored proceeds of crime found to have been possessed or controlled by
    the offender, the longer the minimum term of incarceration. Although the band
    may be broad at the very top category for the greatest defaults, the regime is
    nevertheless calibrated to the amount of proceeds retained or used. If the
    purpose is to ensure that the offender does not benefit from the crime, where
    an offender frustrates that purpose by refusing pay the fine in lieu, it makes
    sense that lengthier periods of incarceration would be thought commensurate
    with greater retention or use of proceeds of crime. This is consistent with the
    fact that the sentence in default reduces in proportion to amounts paid toward
    the fine:
Criminal Code
, s. 734.8(2).

[124]

With respect to the
    impact of the provision on the offender, Kathleen and Jun-Chul advanced four
    hypothetical scenarios. Each variation involves an offender who once was in
    possession of the proceeds of crime but is no longer in possession. The
    offender may have disposed of the property or lost it without enjoying any
    benefit from it. Or the offender may have consumed the proceeds and no longer
    had any property with which to satisfy the fine, but had the means to earn an
    income and pay down a fine over time, before losing employment or employability
    and the means to pay the fine. The hypotheticals vary in the offenders degree
    of culpability for no longer having access to funds or subsequently being able
    to earn sufficient funds: drug addiction, gambling problems, loss of gainful
    employment.

[125]

In each of the
    hypotheticals, when the time to pay had been exhausted and the offender
    defaulted, the judge at the committal hearing would be required to determine
    whether the offender had refused to pay, and whether the refusal would have
    been reasonable in the circumstances of the offender. If the judge determined
    that there had been a refusal, and that the refusal was not reasonable, the
    judge would be required to commit the offender for the period of incarceration
    set at the front-end hearing. The predetermined sentence would have been set by
    reference to a mandatory minimum.
[2]

[126]

Kathleen and Jun-Chul
    argue that the mandatory minimum five-year sentence in s. 462.37(4)(a)(vii) is
    grossly disproportionate by reference to sentences that have been imposed on
    civil contemnors, and by reference to the sentence imposed for the underlying
    offence.

[127]

With respect to civil
    contempt, Kathleen and Jun-Chul refer to the decision in
Chiang (Re)
,
    2009 ONCA 3, 93 O.R. (3d) 483, in which one year of imprisonment was imposed on
    Mr. Chiang and eight months on Mrs. Chiang as a consequence of a concerted
    course of conduct spanning 15 years, in which they continually breached orders
    requiring them to disclose their assets. Kathleen and Jun-Chul argue that if
    one year of imprisonment is taken as a benchmark for a contempt related to the
    frustration of judgment of over $8 million, then a five-year minimum for
    default of payment of a fine of $1 million is grossly disproportionate.

[128]

Kathleen and Jun-Chul
    also argue that a five-year term in default of payment is grossly
    disproportionate when compared to the hypothetical offenders sentences for the
    underlying offences. They submit the fact that an offender  like Kathleen 
    may serve more time for the default than for the offence itself further
    indicates the gross disparity between the mandatory sentence and the offenders
    moral blameworthiness.

[129]

We do not agree with
    Kathleen and Jun-Chuls submissions. As the Crown argues, the rationale for a
    penalty for contempt of court is different from the rationale of the impugned
    provisions. Civil contempt penalties are a matter of securing compliance with
    court orders. What is judged to be sufficient to encourage compliance and
    respect for the courts processes will vary with the particular case. What is
    being punished, in the case of
Chiang
, was not non-payment of a
    judgment debt, but of refusing to cooperate or abide by court orders intended
    to assist the judgment creditor realize on a judgment. Significantly, after
    serving the term of incarceration, the judgment debtor would still have been
    required to submit to the processes that the judgment debtor had refused to
    participate in.

[130]

But as explained
    above, the purpose of the fine in lieu provisions is different. The purpose is
    not simply to provide an incentive to defiant litigants to comply with court
    orders. It is also to remove any benefit that the offender may have received
    from participating in a crime. Where the offender refuses to pay a fine in lieu
    of forfeiture, the incarceration stands in place of the property that has not
    been forfeited or the fine that has not been paid. Incarceration is intended to
    correct an imbalance: the injustice of the offenders possession or use of
    proceeds of crime. How lengthy a sentence  how much deprivation of liberty 
    is required to balance what the offender has taken, is a value judgment and not
    something that can be expressed with mathematical precision. But we cannot say
    that Parliaments conclusion that a five-year sentence for an unreasonable
    refusal to pay $1 million or more would be grossly disproportionate to the goal
    of ensuring that an offender did not benefit from a crime in which the offender
    received proceeds in excess of $1 million.

[131]

Although
Boudreault
was decided after the trial judge released his reasons, Kathleen and Jun-Chul
    rely on it to challenge two key aspects of the trial judges finding that the
    mandatory minimum sentence did not violate s. 12. First, the trial judge noted
    that the judge who imposes the fine has discretion over the length of time to
    pay, and an offender can apply for extensions of time. Second, the trial judge
    observed, as we have above, that a warrant of committal cannot be ordered
    unless the offender has refused to pay, and there is no reasonable excuse for
    that refusal.

[132]

Martin J., writing for
    a majority of the Supreme Court, addressed these procedural safeguards in the
    context of the victim surcharge in
Boudreault
. Before it was struck
    down, the victim surcharge was subject to the same safeguards as the fine in
    lieu of forfeiture regime, namely: the offenders ability to request an
    extension of time under s. 734.3; and prohibition on issuing a warrant of
    committal against an offender unless they unreasonably refuse to pay, pursuant
    to s. 734.7.

[133]

In
Boudreault
,
    the Crown argued that an offenders ability to apply under s. 734.3 for an
    extension of time to pay significantly mitigated the threat of incarceration.
    Martin J. rejected this argument on the basis that s. 734.3 offers certain
    offenders little, if any, relief. Martin J. explained applying for an extension
    of time is not a routine administrative matter, and some offenders  especially
    the impoverished and uneducated  would find it daunting to prepare and file a
    written application with the court. She also noted offenders cannot obtain
    state-funded legal counsel to assist with the application: at para. 73.
    Furthermore, Martin J. held that requiring some offenders  such as those
    grappling with severe addiction and mental illness  to continually appear
    before a committal judge to explain their inability to pay results in
de
    facto
indefinite sentences, saying, at para. 77:

For all of these offenders, the
    effect of the victim surcharge is that they must live with a criminal sanction
    that they are unable to acquit for the foreseeable future, if ever. These
    offenders face repeated appearances before a court to explain their inability
    to pay the surcharge  even if that inability is rooted in mental illness or
    physical disability. This ritual, which will continue indefinitely, operates
    less like debt collection and more like public shaming.

[134]

Martin J. also found
    the requirements for issuing a warrant of committal for defaulting on a fine,
    as provided for under s. 734.7, were insufficient to neutralize the
    disproportionate effects of the victim surcharge. Though she recognized that s.
    734.7(1)(b) prohibits a court from issuing a warrant of committal where the
    offender has a reasonable excuse, and that inability to pay constitutes a
    reasonable excuse, she found the provision could not attenuate the threat of
    imprisonment or detention under the victim surcharge, particularly since it
    could be difficult for committal judges to draw the line between inability to
    pay and a refusal to pay. Impoverished offenders would therefore live under a
    continual threat of imprisonment because it would be impossible to predict
    whether one would be able to prove a reasonable excuse at a committal hearing:
    at paras. 71-72.

[135]

Kathleen and Jun-Chul
    argue the same considerations apply to the fine in lieu of forfeiture regime.
    As with the victim surcharge, the ability to apply for additional time to pay
    and to present evidence of a reasonable excuse for failing to pay cannot render
    the mandatory minimum five-year sentence constitutional. However, for the reasons
    that follow, we do not agree that
Boudreault
invalidates the trial
    judges finding that s. 462.37(4)(a)(vii) does not violate s. 12.

[136]

First: the argument
    that the availability of time to pay and the opportunity to seek extensions can
    effectively lead to an indeterminate sentence. It must be noted that unlike the
    victim surcharge in
Boudreault
, the fine in lieu of forfeiture is not
    a punishment that applies indiscriminately to all offenders, regardless of
    their resources, the nature of the crime committed, or whether it is at all
    realistic to expect them to ever be in a position to pay. Rather, the fine is
    tailored to the quantum of proceeds of crime the offender has possessed or used.
    Granting time to pay  and extensions of time to pay  is not a matter of
    condemning an offender to indentured servitude, or to participating in a futile
    exercise in public shaming, but of giving to those offenders who are or will
    become capable of paying, time to organize their affairs so as to pay the fine.

[137]

Second, Kathleen and
    Jun-Chul rely on Martin J.s observation in
Boudreault
that in the
    context of persons who are poor, unhoused, addicted, marginalized, and facing a
    committal hearing for non-payment of a mandatory victim surcharge, a judge at a
    committal hearing may find it difficult to draw the line between an inability
    to pay and a refusal to pay: at para. 71. On the facts in
Boudreault
,

Martin J. found that the uncertainty caused by the subjectivity of the
    assessment added to the gross disproportionality of the surcharge.

[138]

The circumstances here
    are different, and we have no good reason to believe that a judge at the
    committal stage would have inordinate difficulty in drawing the line, that the
    committal hearing will place an unreasonable burden on the offender, or that
    uncertainty would render the scheme grossly disproportionate to the refusal to
    pay the fine. Again, there must be not just an inability to pay the fine, but a
    refusal. And not merely a refusal but a refusal without reasonable excuse. A
    person found to have received proceeds of crime in excess of $1 million is not
    in circumstances at all similar to the litigants in
Boudreault
. The
    uncertainty of whether ones extreme poverty, mental illness, addiction, and
    instability will be accepted by a court as reasonable excuse for non-payment of
    a comparatively minor fine is not analogous to the facts  hypothetical or
    otherwise  on this appeal. On the fine in lieu of forfeiture regime before this
    court, as long as there is a stable legal doctrine guiding the exercise of
    judicial discretion, the fact that an offender does not know in advance whether
    the offenders argument will be accepted is not a manifestation of cruel and
    unusual treatment. As explained further below, the doctrine is sufficiently
    stable for this purpose.

Sentencing principles

[139]

With respect to the
    argument that the minimum sentence is disproportionate in cases where the term
    of imprisonment on default is longer than the term of imprisonment for the
    underlying offence, we do not agree that the comparison is apt. Again, the
    penal sentence that offenders receive for the offences giving rise to the
    proceeds of crime has a different rationale for the sentence imposed for the
    refusal to pay a fine in lieu of forfeiture. As this court said in
Angelis
,
    at para. 39, Part XII.2 of the
Criminal Code
is not offender centric.
    Criminal sentencing goals such as rehabilitation do not factor into the
    determination of a fit sentence for wilful default. There is instead a singular
    focus on a particular mode of deterrence  ensuring that crime does not pay in
    circumstances where an offender refuses to pay without reasonable excuse.

Conclusion

[140]

We find that the trial
    judge made no error in concluding that the five-year mandatory minimum
    provision under s. 462.37(4)(a)(vii) does not infringe s. 12 of the
Charter
.

The second s. 12 argument  setting the sentence in advance

[141]

The second s. 12
    argument, which Kathleen and Jun-Chul advanced for the first time on appeal,
    does not depend on the existence of mandatory minimum terms of imprisonment.
    The argument is that the requirement that the term of imprisonment be set in
    advance of the default, before the existence of any mitigating or aggravating
    circumstances can be known, has the potential to result in grossly
    disproportionate sentences in reasonably foreseeable cases. The argument
    postulates that sentences that were reasonable when imposed could become
    grossly disproportionate when executed, because of changed circumstances in the
    interim that the committal judge would not be permitted to take into account.
    Kathleen and Jun-Chul argue that there may be
degrees
of culpability
    in circumstances giving rise to a refusal to pay, and the offender ought to
    have the opportunity to seek a reduced period of incarceration, commensurate
    with the level of culpability.

[142]

Kathleen and Jun-Chul
    advance a hypothetical offender who committed fraud and is subject to a fine in
    lieu of forfeiture of $1.5 million. The offender had assets outside of the
    country worth approximately $1.5 million, which could be liquidated to pay the
    fine. Time to pay was set at 3.5 years and a lengthy term of imprisonment in
    default was set  8 years  on the reasoning that the offender had sufficient assets
    to pay and therefore refusal to pay would reflect a high degree of moral
    blameworthiness. The offender, while serving her 2.5-year prison sentence,
    instructed her husband to sell the assets and discharge the fine. Instead, he
    sold the assets and absconded with the proceeds. After the offender served her
    initial sentence, she was unable to find work and at the end of 3.5 years had
    contributed nothing towards repayment. The judge at the committal hearing
    faulted the offender for negligence in the management of her property, which
    resulted in her being unable to pay the fine. The refusal to pay, on the
    hypothetical, was unreasonable because it resulted from negligence. Kathleen
    and Jun-Chul argue that the offender, who was committed to serve the additional
    8 years, ought to have been able to argue that the sentence on default should
    be reduced to reflect that non-payment was not the result of defiance, but of
    negligence, which ought to receive more lenient treatment.

[143]

We do not agree that
    the hypothetical raises any serious difficulty. The offender cannot repay on
    account of having been defrauded and, on the facts assumed, cannot be
    considered to have refused to pay, much less refused unreasonably. To order
    committal, in such circumstances, would be an error of law.

[144]

Under the statutory
    scheme, after a fine has been imposed, the offenders moral culpability for
    inability to pay is addressed only through the concept of unreasonable refusal.
    Unless there is an unreasonable refusal, there is to be no committal. As
Lavigne
established, inability to pay, by itself, is not enough. The absence of a third
    option  incarceration but with a lesser term for cases where there is a
    refusal that is unreasonable but not sufficiently unreasonable to warrant the
    full term of incarceration  does not render the scheme unconstitutional.

The appeal against the restitution order

[145]

At sentencing,
    Kathleen argued that no restitution order should be imposed beyond the proceeds
    that had been forfeited, and Jun-Chul argued that if any restitution or fine in
    lieu should be ordered, that he be made solely liable as he was the one who
    controlled the funds after Kathleen received them from OLG.

[146]

The trial judge
    ordered $12.5 million in restitution, payable jointly and severally by Kathleen
    and Jun-Chul. The trial judge also ordered the forfeiture of $7,555,589.70,
    which had already been seized and which was to be credited against the
    restitution order. After deducting the amounts forfeited, Kathleen and Jun-Chul
    remain jointly and severally liable under the restitution order for
    approximately $4.9 million.

[147]

Kathleen argues that
    the trial judge failed to consider sentencing principles when imposing the
    restitution order and imposed the order as a mechanical afterthought without
    considering its overall impact in combination with the custodial sentence on
    her rehabilitation or her ability to pay. She argues that the trial judge ought
    to have divided the restitution between them, or accepted Jun-Chuls submission
    at trial that he be made liable for the full amount.

[148]

We agree that the
    trial judge does not explain the rationale for making Kathleen jointly and
    severally liable for the full amount of the restitution order, given that
    Jun-Chuls much longer custodial sentence suggests the trial judge viewed him
    as significantly more culpable. Additionally, unlike the fine in lieu of
    forfeiture, ability to pay is a factor in making a restitution order, as is the
    panoply of sentencing principles including totality, proportionality, and the
    impact on the offenders prospects for rehabilitation:
R v. Castro
,
    2010 ONCA 718, 102 O.R. (3d) 609, at paras. 23-26. The trial judge did not
    address these principles, and made an order resulting in liability greater than
    double the $2.3 million fine in lieu of forfeiture he imposed on Kathleen.

[149]

Taking into account
    the full range of sentencing principles appropriate to a restitution order,
    including proportionality, totality, and rehabilitation, and taking into
    account the nature of the reduction of Kathleens custodial sentence, it is
    appropriate to vary the restitution order and reduce the amount payable by
    Kathleen to the amount of property already forfeited, plus $2.3 million. The
    amount payable by her remains jointly and severally payable by Jun-Chul.

[150]

We do not change the
    restitution order as imposed against Jun-Chul. There remain $4.9 million in
    unrecovered proceeds of crime. Jun-Chul had control over these funds after they
    were handed over to him by Kathleen. He has provided no disclosure as to the
    whereabouts of these proceeds.

The appeal against the fine in lieu of forfeiture

[151]

Kathleen requested the
    trial judge exercise his discretion to limit the fine to the amount of proceeds
    that she used for her own benefit, being $600,000, less the $500,000 forfeited.
    The trial judge declined and instead imposed a fine in the amount of $2.3
    million.

[152]

As we set out above,
    where property that is the proceeds of crime is unavailable, a sentencing judge
    has a limited discretion over whether to order a fine in lieu of forfeiture.
    Once a sentencing judge decides to impose a fine, it must be for the amount of
    the property for which it stands as substitute:
Lavigne
, at para. 34.
    However, as this court stated in
Dieckmann
, where proceeds have been
    dispersed among multiple convicted (or clearly guilty) offenders, a sentencing
    judge may impose a fine on each individual offender
for an
    amount less than the total value of the proceeds of crime, so long as the
    individual fines cumulatively equal the value of the proceeds
: at paras.
    90-100. In
Dieckmann
, even though the offender had originally been in
    receipt of proceeds of crime in the amount of $5,143,732, the sentencing judge
    imposed a fine of $1,285,930 rather than the full amount, on the basis that a
    sizable portion of the funds had been shared with her clearly guilty
    co-conspirators.
[3]

[153]

The sentencing judge
    exercised this same discretion and apportioned the fine of $4.6 million equally
    between Kathleen and Jun-Chul:

Notwithstanding the submissions
    of counsel for Jun Chul Chung and Kathleen Chung, I see no ground for fines of
    zero or anything less than $4.6 million. The objective of the statutory
    provisions, as reflected in
Lavigne
,
supra
, is to ensure that
    crime does not pay. Also reflected in
Lavigne
, ability to pay is not a
    factor.

[154]

Kathleen argues that
    the discretion was exercised improperly. She argues that the sentencing judge
    erred in his characterization of her argument. The basis of her argument was
    not that she lacked the ability to pay a fine, which is an irrelevant
    consideration per
Lavigne
, but that she never exercised any control
    over the proceeds.

[155]

We do not agree that
    the trial judge erred. The statement that ability to pay is not a factor, in
    context, does not suggest that the trial judge misapprehended Kathleens
    argument. His reasons, taken as a whole, clearly address Kathleens argument
    that she did not control the funds. Contrary to Kathleens submissions, he
    found that Kathleen did have possession and control of the funds, regardless
    that she only used a relatively small proportion for herself. The fact that
    Kathleen chose to turn the funds over to the control of Jun-Chul does not
    negate the fact that she initially had full control, and it was her choice to
    dispose of the funds in this way. The trial judge was content that she was no
    mere conduit of the funds to Jun-Chul. She was a director of corporate entities
    to which some of the funds were later transferred, and a beneficiary of the Hi
    Ok Chung Family Trust, which received much of the funds. Investment, real estate,
    and vehicle purchases  and the transfer of $3 million overseas  were
    accomplished through these entities and directly from Kathleens personal
    account.

[156]

The fact that Kathleen
    lived modestly and retained or received comparatively little of the funds (on
    the Crowns evidence, some $600,000) to her direct benefit was potentially
    relevant in allocating the fine in lieu as between her and Jun-Chul. If the
    purpose of the fine in lieu provisions is to ensure that crime does not pay, it
    makes sense that fines can be allocated between offenders on a differential
    basis that follows the money.

[157]

So even though
    Jun-Chul, on the trial judges findings, is the more culpable of the two and
    accordingly received a lengthier sentence, the fine in lieu provisions are a
    matter of recovery of proceeds of crime and not culpability:
Dieckmann
,
    at para. 88. A differential order could perhaps have been made on the basis
    that Jun-Chul had greater control over the proceeds that are now missing. But
    the trial judge chose not to exercise his discretion that way. He acted
    judicially in so doing, having regard to Kathleens means of control over the
    funds. The trial judge had reason to follow the money, not only into Kathleens
    account, but from there into corporate entities and trusts over which she had
    interest and some control. Regardless of whether Jun-Chul was the directing
    mind, her involvement with the property did not simply end with the initial
    deposit of the OLG cheque. Kathleen and Jun-Chul acted in concert and $4.6 million
    in funds have not been accounted for.

(ii)     Did the trial judge err in establishing time to
    pay and a six-year sentence in default of payment?

Time to pay

[158]

Kathleen and Jun-Chul
    were each given seven years to pay. At the sentencing hearing, they both sought
    30 years. It was undisputed that should they not be in a position to access the
    funds that have not been accounted for, at Kathleens current salary, she only
    had the ability to pay $44,000 per year towards the satisfaction of the fine.
    Kathleen argues that given that she could, at best, pay down $308,000 of a $2.3
    million fine in seven years, the time given to pay is clearly unreasonable.
    Jun-Chul takes the same position, as he submits he has no hope of discharging a
    $2.3 million fine in seven years.

[159]

We do not agree. As
    stated above, the purpose of giving offenders time to pay is not to inflict
    further punishment by indenturing them to lives of servitude. It is to ensure
    that crime does not pay. In some cases, giving an offender time to pay is a
    means of allowing the offender to arrange his or her affairs so as to realize
    on existing assets and pay the fine. This includes offenders who are able to
    recall proceeds of crime they have put into the hands of third parties. In
    other cases, an offender may have dissipated the proceeds and not have assets,
    but it is not unreasonable to require offenders to compensate for their use of
    proceeds of crime by requiring them to make payment over time from superfluous
    income. In other cases, whether because the amount of the fine is so large, or
    the offenders ability to earn income so minimal, it may not be realistic to
    expect an offender will be able to use the time given to make much of a
    contribution.

[160]

If things progress
    such that Kathleen or Jun-Chul are concerned they will be unable to discharge
    their fines within the seven years, it is open to them to apply for additional
    time to pay. In any event, all the above considerations factor into the
    assessment at the committal hearing of whether non-payment is the result of a
    refusal to pay without reasonable excuse.
Lavigne
states that
    impecuniosity is a reasonable excuse, although it may be better to say that
    genuine impecuniosity does not, in itself, constitute a refusal at all. Where
    an offender is presently impecunious as a result of living lavishly, a
    committal judge may be appropriately sceptical. But an offender who is simply
    unable to save $2.3 million in seven years  without lavish living and without
    sheltering significant assets  should not be considered in jeopardy of
    incarceration as though the fine in lieu of forfeiture provisions establish a
    form of debtors prison.

[161]

In conclusion, in
    light of the purpose of the fine in lieu provisions, the trial judge did not
    err in refusing to grant Kathleen and Jun-Chul 30 years to pay.

The six-year sentence

[162]

Kathleen and Jun-Chul
    both argue the trial judge erred in imposing a six-year custodial sentence in
    default of payment of the fine in lieu of forfeiture, as the six-year sentence
    is harsh and excessive. Specifically, they argue the trial judge erred by
    arriving at that sentence after considering only the amount of the fine. They
    submit the amount of the fine in lieu was not the only relevant factor, and
    there were two other relevant considerations: that the six-year sentence in
    default of payment  one year in addition to the mandatory minimum  is
    crushing, when considered in addition to the custodial sentence for the
    underlying offences and that there was no evidence Kathleen or Jun-Chul would
    evade payment.

[163]

We do not agree.
    First, the sentence in default is not to be considered as an add-on to the
    sentences for the convictions for fraud. It is the consequence for a separate
    matter  a refusal to pay a fine in circumstances where there is either an
    ability to pay, or an inability that is culpable. The six-year default term of
    imprisonment is reasonable given the control of the proceeds of crime and the
    failure to explain the disposition of proceeds that remain unrecovered. Second,
    Kathleen and Jun-Chul point to no authority requiring a trial judge to consider
    evidence that an offender will or will not evade payment. Again, the rationale
    for imprisonment in default of payment is to give serious encouragement to
    those with the means to pay a fine to make payment. The trial judge determined
    a six-year sentence in default of payment would properly encourage Kathleen and
    Jun-Chul to may payments, should they have the means to do so. We see no reason
    to interfere with that determination.

[164]

In summary, the
    appeals against the dismissal of the constitutional challenges are dismissed,
    as are the appeals against the quantum of the fines in lieu of forfeiture, the
    time given to pay, and the sentence to be imposed on default of payment.
    Jun-Chuls appeal against the quantum of the restitution order is dismissed,
    and Kathleens appeal is allowed in part and the quantum of restitution is
    reduced to the forfeiture order plus $2.3 million.

Issue 2(b): The Custodial Sentence Appeals

[165]

All three appellants
    seek a reduction for the custodial portion of their sentence. We will deal with
    each of these in turn.

(i)

Kenneth Chungs custodial sentence of 10 months

[166]

Kenneth maintains that
    the custodial sentence of 10 months he received for theft under $5,000 is
    manifestly unfit. He argues that the sentencing judge failed to take into
    consideration his background, prior good character, and future intentions, and
    he submits the sentencing judge failed to address the issues of general
    deterrence and rehabilitation. He further submits that the theft of the lottery
    tickets was simply the theft of a chance of potentially winning a prize and is
    therefore
de minimis
. Therefore, an absolute or conditional discharge
    was the appropriate sentence. In oral submissions, counsel went even further,
    arguing that a lottery ticket is a piece of paper that is simply reflective of
    a chance to win and is therefore of no value. As a result, the wrongful taking
    of lottery tickets, while morally reprehensible, does not constitute theft.

[167]

We disagree. The
    sentencing judge referred to the relevant sentencing principles and noted
    Kenneths positive presentence report. The sentencing judge also considered the
    absence of a criminal record. Furthermore, as we have noted earlier, the
    wrongful taking of the lottery tickets constitutes theft. As for the limited
    value of lottery tickets, the sentencing judge took the amounts involved in the
    theft in fashioning the appropriate sentence, as he recognized that Kenneth was
    only convicted of theft under $5,000. His weighing of those factors and his
    determination of the appropriate sentence are entitled to deference, and we see
    no basis to interfere.

[168]

We note, however, that
    given our disposition of the Crown appeal, Kenneth will have to return to the
    sentencing judge to be sentenced on the additional convictions.

(ii)

Jun-Chul Chungs custodial sentence of seven years

[169]

Jun-Chul seeks
    reduction of his seven-year custodial sentence to one within the range of three
    to five years for large-scale frauds. He argues in oral submissions that the
    sentence was excessively harsh given the fact that the scheme he and Kenneth
    devised and exploited was not particularly sophisticated and did not have
    serious negative consequences on the OLG. He further maintains that the
    sentencing judge did not consider the sentencing principle of rehabilitation.

[170]

We see no basis to
    interfere. This was a significant large-scale fraud. The appellant, while owing
    a duty of trust to his customers, implemented a scheme whereby lottery tickets
    were regularly stolen and, when the opportunity to defraud the OLG of the $12.5
    million prize presented itself, he proceeded to work in concert with Kathleen
    to extract payment through lies and misrepresentations. The sentencing judge
    considered all of the sentencing principles and committed no error in his
    consideration of the appropriate factors in the sentence he imposed. The range
    of sentences for large-scale frauds is broad, and, although the seven-year
    sentence is high, it is not unfit in the circumstances.

(iii)

Kathleen Chungs custodial sentence of four years

[171]

Kathleen seeks a
    reduction of her four-year custodial sentence. She argues that the sentencing
    judge erred in his identification of the applicable range of appropriate
    sentences. She explains that this case was unique among large-scale frauds
    given that: the impact on OLG, a large and sophisticated corporation, was
    relatively small; Kathleen, unlike Jun-Chul and Kenneth, was not in a position
    of trust; and this offence was not particularly sophisticated or skilled. In
    fact, the theft was more in the nature of a single instance of theft carried
    out when the opportunity presented itself.

[172]

In Kathleens
    submissions, the appropriate range for large-scale frauds is three to five
    years:
R. v. Davatgar-Jafarpour
, 2019 ONCA 353, 146 O.R. (3d) 206, at
    para. 34;
R. v. Plange
, 2019 ONCA 646, 440 C.R.R. (2d) 86, at para.
    40. She argues that the sentencing judge erred in accepting that the Crowns
    proposed range of four to five years for Kathleens custodial sentence was
    appropriate. Given that the sentencing judge expressed the view that a sentence
    at the low end of the range was appropriate in Kathleens case, the
    sentencing judges acceptance of the Crowns proposed range led him into error.
    As a result, a three-year, rather than a four-year, custodial sentence is
    appropriate.

[173]

Further, the
    sentencing judge relied on the cases of
R. v. Dobis
(2002), 58 O.R.
    (3d) 536 (C.A.), at paras. 49-51, and
R. v. Bogart
(2002), 61 O.R.
    (3d) 75 (C.A.), at paras. 33, 36, for the proposition that while conditional
    sentences are theoretically possible, they are not generally imposed in cases
    of large-scale frauds. Having referenced these cases, however, he failed to
    note that the frauds involved in
Dobis
and
Bogart
were
    carried out by persons in a position of trust and involved lengthy and somewhat
    sophisticated frauds. Further, in the case of the large-scale fraud in
Dobis
,
    there was the additional aggravating factor that the defrauded company was
    crippled by the fraud and it was unclear whether the company would in fact
    survive the fraud. In addition, despite these aggravating features being
    present in those cases and absent in Kathleens case, both Mr. Dobis and Mr.
    Bogart received lower sentences than four years.

[174]

Therefore, in
    Kathleens submission, the sentencing judge ought to have considered imposing a
    conditional sentence. Although not typical in cases of large-scale frauds, it
    would have been appropriate here given that Kathleen was not in a position of
    trust and significant mitigating circumstances existed. Those mitigating
    circumstances included the lengthy period Kathleen spent under restrictive bail
    conditions, the positive presentence report, the absence of any previous
    conviction, her youthful age, and the fact that she has three young children at
    home. Alternatively, she asks that the sentence be reduced.

[175]

The Crown, for its
    part, argues that the range of sentences in large-scale fraud cases is broad,
    and the sentence imposed in this case falls squarely within that range. Here,
    Kathleen played a central role in the fraud. Without her actions, it would not
    have been possible to collect the $12.5 million from the OLG. She maintained
    her lies for the better part of a year before she ultimately succeeded in
    obtaining payment of the funds. The Crown acknowledges that the OLG is a large
    and sophisticated Crown corporation and is in a better position than other
    victims to absorb a loss of that magnitude. However, the Crown notes that the
    OLG is more in the nature of a public institution and that the fraud is one
    made against the public. Courts have considered such frauds to be as serious as
    those committed against individuals or corporations, as frauds on the public
    purse are not victimless crime[s]:
R. v. Khatchatourov
, 2014 ONCA
    464, 313 C.C.C. (3d) 94, at para. 44;
Dieckmann
, at para. 75. In cases
    such as here, the principle of deterrence is paramount, and, in the Crowns
    submission, the sentencing judge reasonably concluded that a conditional
    sentence was not appropriate. Therefore, the four-year custodial sentence
    should stand.

[176]

We see no error in the
    sentencing judges rejection of a conditional sentence. He recognized that,
    while possible, conditional sentences were generally not imposed in large-scale
    frauds:
Dobis
, at paras. 49-51;
Bogart
, at paras. 33, 36. In
    his view, having regard to the particular circumstances of the offences and the
    importance of deterrence in cases of large-scale fraud, it was mandatory that
    each of the appellants serve some time in custody.

[177]

In our view, however,
    the sentencing judge erred in imposing a four-year sentence on Kathleen. At the
    outset, we note that it is not clear from his reasons whether the sentencing
    judge correctly identified the range for large-scale frauds as being three to
    five years:
Davatgar-Jafarpour
, at para. 34;
Plange
,
    at para. 40. His only reference is to the Crowns range of sentencing being
    appropriate, the Crown having proposed four to five years. Nowhere in his
    reasons does he identify the range to be three to five years. It is of note
    that in oral submissions on appeal, the Crown concedes that a three- to
    five-year sentencing range is appropriate for Kathleen. However, in fairness to
    the sentencing judge,
Davatgar-Jafarpour
and
Plange
, which
    clearly outlined the appropriate range, were decided subsequent to the
    sentencing. When the sentencing judge stated that Kathleen should be sentenced
    at the low end of the range, taking into account certain mitigating factors,
    we are left to wonder whether he understood the Crowns proposal to be the
    upper end of the range and whether, in fact, the sentencing judge would have
    imposed a sentence of three years had he been informed of the normal range.

[178]

There are also
    significant omissions in the sentencing judges reasons. He made no mention of
    the fact that Kathleen was not in a position of trust like Jun-Chul and Kenneth.
    Although this court in
Khatchatourov
, at para. 39, and
Davatgar-Jafarpour
,
    at para. 42, has indicated that even where there is an absence of a position of
    trust, the appropriate range for large-scale and sophisticated frauds is still
    applicable, the absence of a breach of trust is nonetheless a factor that ought
    to have been taken into account. Further, Kathleens conduct can also be
    distinguished from the breach of good faith in
Davatgar-Jafarpour
,
    at para. 43, that was determined to include [t]he same aggravating conduct
    that underlies and informs the aggravating nature of breaches of trust, or the
    nuanced breach of trust referred to in
Khatchatourov
, at para. 41.
    Unlike Jun-Chul and Kenneth, Kathleen had no relationship with or good faith
    obligation toward the customers of Variety Plus. Further, although Kathleen
    persisted with her lies to the OLG in order to secure payment of the $12.5
    million, the fraud was, as acknowledged by the Crown in oral submissions, a
    one-time crime of opportunity that is not sophisticated. This fraud was not one
    that was part of the ongoing fraudulent scheme perpetrated by her co-accused.
    Although not strictly mitigating factors, these are nonetheless significant
    points that distinguish Kathleens role as compared to that of her co-accused
    and other cases involving large-scale frauds.

[179]

By failing to
    correctly identify and refer to the appropriate range and by failing to note
    and take into account the factors we have set out above, the sentencing judge
    erred. Considering the circumstances of the offences and the offender, a
    three-year custodial sentence is fit for Kathleen.

Issue 3: Did the application judge
    err in dismissing the s.11(b) stay application?

[180]

Jun-Chul and Kathleen
    appeal the application judges dismissal of their application for a stay of
    proceedings pursuant to s. 24(1) of the
Charter
on the basis that
    their rights to a trial within a reasonable time under s. 11(b) of the
Charter
have been violated. They argue that the application judge erred in
    attributing several delay periods to defence conduct, attributing delay to the
    complexity of the case, and finding the delay can be justified under the
    transitional exceptional circumstance provision of
Jordan
.

[181]

We disagree with these
    submissions. As we will explain, the application judges attribution of delay
    to defence conduct was entirely reasonable. As explained in
R. v. Cody
,
    2017 SCC 31, [2017] 1 S.C.R. 659, at para. 31, such determinations are highly
    discretionary and appellate courts must show a correspondingly high level of
    deference thereto.

[182]

As for the application
    judges attribution of delay to the complexity of the case, we agree with the
    Crown that the application judges error in deducting specific periods of delay
    attributable to complexity is of no consequence, as it had no impact on the
    outcome. Even after deducting those periods of delay, the application judge
    recognized that the delay incurred in this case was over the 30-month
    presumptive ceiling set in
Jordan
. As a result, the Crown bore the onus
    of justifying the delay.

[183]

In
Jordan
, at
    para. 102, the Supreme Court of Canada explained that, for cases already in the
    system, the release of
Jordan
should not automatically transform what
    would have, under the previous regime in
R. v. Morin
, [1992] 1 S.C.R.
    771, been considered a reasonable delay into an unreasonable one. This was
    clearly a case where the parties were relying on the previous
Morin
framework. The appellants do not allege that the combined institutional delay
    in the Ontario Court of Justice and the Superior Court of Justice for this case
    fell outside of the
Morin
guidelines. As we will explain, an analysis
    of the criteria informing the decision as to whether the transitional
    exceptional circumstance provision set out in
Jordan
ought to apply
    weighs against the granting of a stay.

[184]

In the paragraphs that
    follow, we will first briefly outline the findings of the application judge.
    Second, we will address Jun-Chul and Kathleens concerns with the application
    judges attribution of delay to defence conduct and the application judges
    error in deducting periods of delay attributable to complexity. Third, we will
    carry out the transitional exceptional circumstance analysis as dictated in
Jordan
.
    Fourth, and lastly, we will address the submissions made in Kathleens oral
    arguments that the delay in the Ontario Court of Justice was so extensive as to
    justify a stay.

The application judges findings

[185]

There was no dispute
    that the total delay between the arrest of the appellants on September 28, 2010
    and the anticipated end of the trial on March 27, 2017 was 2,369 days, or 77.9
    months using the formula for conversion in
R. v. Shaikh
, 2019 ONCA
    895, 148 O.R. (3d) 369, at para. 33. The application judge found that there had
    been 144 days of implied or implicit defence waiver by both Jun-Chul and
    Kathleen. This is not contested on appeal. The application judge then deducted
    four periods for defence delay attributable to both Kathleen and Jun-Chul
    totalling 794 days. Different portions of this deduction are contested on
    appeal. Finally, the application judge deducted two periods of defence delay
    totalling 79 days attributable only to Jun-Chul. These delays were the result
    of accommodation for the availability of Jun-Chuls new counsel and this
    counsels subsequent failure to attend court on time on October 7, 2013. This
    is not contested by Jun-Chul on appeal. The result was a net delay of 1,431
    days (47 months) for Kathleen and a net delay of 1,352 days (44.5 months) for
    Jun-Chul. The application judge then attributed 347 days of delay to the
    complexity of the case and deducted the time from the net delay on the basis
    that it constituted exceptional circumstances. This left a net delay of 1,084
    days (35.6 months) for Kathleen and a net delay of 1,005 days (33 months) for
    Jun-Chul.

The appropriateness of the deductions for defence conduct

July 21, 2011 to November 1, 2011

[186]

The first period of
    defence conduct deductions challenged by Jun-Chul and Kathleen is the 103-day
    period running from July 21, 2011 to November 1, 2011. This was the period
    between the start of the judicial pre-trial on July 21, 2011 and the date set
    for its continuation on November 1, 2011. The application judge attributed it
    to defence delay. She found that both Jun-Chul and Kathleen had spent this
    period engaging in resolution discussions without scheduling the preliminary
    inquiry. Also, during this time period, Jun-Chul dismissed his counsel. Although
    new counsel was retained as early as August 8, 2011, his counsel did not
    respond to the Crowns attempts to confirm her availability on the dates set
    for the continuation of the judicial pre-trial.

[187]

Kathleen argues that
    there was no basis in the evidence for concluding that her conduct caused any
    of this delay. Specifically, she argues that there was no evidence that an
    earlier date was available for a continuing judicial pre-trial, nor that the
    Crown was in a position to set preliminary inquiry dates any sooner. In fact,
    she questions whether the continuing judicial pre-trial was even required in
    the first place. Jun-Chul adopts the arguments advanced by Kathleen.

[188]

We see no error in the
    application judges attribution of this period to defence delay. She found that
    during this period, both appellants were engaging in resolution discussions
    instead of setting preliminary inquiry dates while those discussions were
    ongoing. This finding is confirmed by the record. At the continuing judicial
    pre-trial held on December 22, 2011,
Jun-Chul
s
    counsel acknowledged that, at that time, the matter had been heading toward a
    resolution. This was clearly a case where resolution discussions were somewhat
    complex and would involve all three appellants. The settlement would have to
    address the period of incarceration, if any, forfeiture, restitution, and
    fines. The contribution of one appellant to forfeiture, restitution, and fines
    would no doubt be relevant to determine the amount that the other two
    appellants would be prepared to accept in a resolution. The totality of these
    considerations would be important to the Crowns decision concerning a
    resolution. It is clear that Jun-Chuls change of counsel during this period
    delayed those discussions.

[189]

The application judges
    finding is reasonable and is entitled to deference. Therefore, we would not
    interfere with this finding.

December 13, 2013 to October 30, 2014

[190]

The second period
    challenged by the appellants is December 13, 2013 to October 30, 2014. On
    December 13, 2013, Jun-Chul and Kathleen advised of their intention to bring an
    application to stay the proceedings pursuant to s. 11(b) of the
Charter
as well as an application to stay the proceedings for abuse of process. The
    date for hearing these applications was originally set for May 12, 2014.
    Considering the nature of these applications for a stay of proceedings, no
    trial dates were set pending the outcome of this hearing. The applications were
    adjourned to October 27, 2014 to allow the appellants more time to review the
    necessary transcripts. The matters were subsequently adjourned to October 30,
    2014. Although there was some delay in the preparation of transcripts, all the
    transcripts were available as of March 7, 2014. No reasonable explanation was
    put forward indicating why Jun-Chul and Kathleen were not prepared to move
    forward with these applications on the originally scheduled date, given that
    they had over two months to review the transcripts and prepare their
    submissions. Ultimately, the appellants did not file any material other than
    the transcripts, and the applications adjourned to October 30, 2014 were never
    brought.

[191]

In their factums,
    Jun-Chul and Kathleen argue that the full 321-day period between the December
    13, 2013 judicial pre-trial and the final adjourned date of October 30, 2014
    for the abandoned applications ought not to have been attributed to defence
    delay. Rather, Jun-Chul and Kathleen submit that only the period between the
    originally scheduled date for hearing the applications, May 12, 2014, to the
    adjourned date of October 27, 2014 is attributable to defence delay. This
    represents a period of 167 days instead of 321 days. They also submit that they
    are not responsible for the fact that the applications did not proceed on the
    rescheduled date of October 27, 2014. Their failure to proceed on that date was
    because Kenneth did not have a lawyer at that time. They maintain that the
    adjournment of these applications was to allow Kenneth to bring a
Rowbotham
application:
R. v. Rowbotham
(1988), 41 C.C.C. (3d) 1 (Ont. C.A.).

[192]

At the oral hearing of
    the appeal, Kathleen did not proceed with this ground of appeal, focussing on
    the delays occurring at the Ontario Court of Justice. Jun-Chul, however, did
    not explicitly concede this issue and appears to maintain his position to the
    effect that part of this period was improperly attributed to defence delay.

[193]

In our view, the
    application judge did not err in her attribution of this entire period of 321
    days to defence delay. During this whole period, Jun-Chul and Kathleen were
    expressing their desire to bring stay applications pursuant to s. 11(b)
    and for abuse of process. These applications were not diligently pursued and,
    in the end, the appellants did not file any material in furtherance of these
    applications, other than the transcripts. Over this period, dates for the
    applications were scheduled and rescheduled. Had it not been for the pending
    applications that were never brought, dates for the trial could have been set
    at the December 13, 2013 judicial pre-trial instead of much later.

February 22, 2016 to February 27, 2017

[194]

The final period of
    delay challenged is February 22, 2016 to February 27, 2017. It is challenged
    solely by Jun-Chul. That period of 370 days was attributed to defence delay by
    the application judge. Kathleen acknowledges that this delay was properly
    attributable to her on account of her decision to discharge her counsel just
    before the scheduled trial date of February 22, 2016. Jun-Chul argues, however,
    that the application judge erred in deducting this period as defence delay
    against him. The adjournment was obtained at the request of Kathleen and
    Kenneth since they both dismissed their counsel on February 16, 2016. Jun-Chul
    maintains that he did not waive his s. 11(b) rights during this period and the
    application judge wrongly faulted him for not opposing the adjournment.

[195]

In our view, the
    application judge did not err in attributing this period as defence delay
    caused by both Jun-Chul and Kathleen. It was apparent that Jun-Chul and
    Kathleen wished to proceed through the system as a collective. Jun-Chul never
    opposed the adjournment, nor did he apply for a severance so that his trial could
    proceed alone. Delays caused by scheduling challenges arising directly and
    inevitably from the joint situation of the appellants are properly analysed
    collectively: see
R. v. Albinowski
, 2018 ONCA 1084, 371 C.C.C. (3d)
    190, at paras. 36-39. Therefore, this period of defence delay of 370 days is
    attributable to both Jun-Chul and Kathleen.

The 347-day delay due to the complexity of the case

[196]

The application judge
    considered the case to be particularly complex and determined that certain
    periods of delay could properly be attributed to the complexity of the case.
    Notably, she identified periods for voluminous disclosure, for the filing of
    written submissions to the preliminary inquiry judge after completion of the
    evidence on the preliminary inquiry, for the additional time required for the
    preliminary inquiry, and for recognizing the delay caused by the presence of
    multiple co-accused. The application judge deducted these periods on the basis
    that they met the test for exceptional circumstances outlined in
Jordan
.
    In total, she deducted 347 days attributable to the complexity of the case.

[197]

Jun-Chul and Kathleen
    argue that the application judge erred in making this deduction. As held in
Cody
,
    at para. 64, Complexity cannot be used to deduct specific periods of delay.
    The application judge was, in their view, required only to consider complexity
    as a factor when deciding whether the overall delay could be justified. She was
    not entitled to deduct specific periods of delay on account of complexity. By
    deducting periods of delay on account of complexity, she improperly minimized
    the overall delay figure.

[198]

Although we agree with
    the application judges finding that the case was complex, we also agree with
    Jun-Chul and Kathleen that the application judge erred in deducting specific
    periods of delay due to complexity. However, as noted by the Crown, when she
    made her decision, the application judge did not have the benefit of
Cody
,
    as that decision was released on June 16, 2017, some five months after the
    application was dismissed on January 3, 2017.

[199]

While the application
    judge erred in deducting specific periods of delay attributable to case
    complexity, her error had no impact on the outcome. It was acknowledged by the
    Crown that the delay was in excess of the 30-month presumptive ceiling in
Jordan
even after deducting the 347 days attributable to the complexity of the case.
    As a result, the application judge knew that the Crown bore the onus of
    justifying the delay and the Crown did so on the basis of the transitional exceptional
    circumstance provision outlined in
Jordan
.
    As we will explain in the next section, the transitional exceptional
    circumstance provision applies even though the deduction for complexity was
    erroneous.

The transitional exceptional circumstance provision of
Jordan

[200]

In
Jordan
, at
    para. 102, the Supreme Court of Canada acknowledged that for cases already in
    the system, the release of their decision in
Jordan
should not
    automatically transform what would previously have been considered a reasonable
    delay into an unreasonable one. Therefore, the framework the court was
    creating ought to be applied contextually and flexibly for cases currently in
    the system:
Jordan
, at para. 94. The transitional exceptional
    circumstance was created on the basis that it would be unfair to judge the
    parties against a standard of which they had no notice:
Jordan
, at
    para. 94. The exception applies, therefore, if the Crown satisfies the court
    that the time the case has taken to make its way through the courts is
    justified based, at least in part, on the parties reasonable reliance on the
    law as it had previously existed:
Jordan
, at para. 96.

[201]

Generally, therefore,
    if the delay was incurred prior to the release of
Jordan
and the delay
    would have been reasonable under the
Morin
framework, the transitional
    exception will apply to justify delays beyond the 30-month presumptive
Jordan
ceiling. This is not to say that all cases where the delay would have been
    reasonable under
Morin
will qualify under the transitional exception.
    For example, keeping in mind that any analysis must always be contextual, the
    transitional exception might not assist in a simple case where the ceiling is
    vastly exceed[ed] due to repeated mistakes or missteps by the Crown:
Jordan
,
    at para.  98.

[202]

The present case is
    clearly not a simple case. There is no suggestion that the Crown has made
    repeated missteps resulting in a substantial delay. Importantly, it is apparent
    that there was reasonable reliance on the pre-
Jordan
law regarding
    delay. As earlier noted, Jun-Chul and Kathleen had announced their intention to
    bring an application to stay the proceedings under s. 11(b) of the
Charter
as early as December 13, 2013. However, they ultimately decided not to proceed
    with this application. It was not until late 2016, a few months after the
    release of
Jordan
, that the s. 11(b) application that is currently the
    subject of this appeal was brought.

[203]

With this background
    in mind, we now turn to consider whether the application judge was correct in
    finding that the delay was justified pursuant to the transitional exceptional
    circumstance provision in
Jordan
.

[204]

To determine whether a
    transitional exceptional circumstance justifies a delay above the 30-month
    presumptive ceiling, the court must conduct a contextual assessment of all of
    the circumstances. The relevant circumstances include:

·

the complexity of the case;

·

the period of delay in excess of the
Morin
guidelines;

·

the Crowns response, if any, to any institutional delay;

·

the defence efforts, if any, to move the case along; and

·

prejudice to the accused.

[205]

See
R. v.
    Williamson
, 2016 SCC 28, [2016] 1 S.C.R. 741, at paras. 26-30;
R. v.
    Gopie
, 2017 ONCA 728, 356 C.C.C. (3d) 36, at para. 178; and
R. v.
    Faulkner
, 2018 ONCA 174, 407 C.R.R. (2d) 59, at para. 175.

[206]

The seriousness of the
    offences is also a factor to be taken into account, as it was a consideration
    under
Morin
: see
Morin
, at p. 787;
Jordan
, at para.
    96.

[207]

While we acknowledge
    that the delays in bringing this case to trial were lengthy, as we will
    explain, an analysis of the five criteria set out in
Williamson
and
    the seriousness of the offences fully support the application judges
    conclusion that a stay is not appropriate in this case.

The case was complex

[208]

As explained in
Cody
,
    at para. 64, complexity requires a qualitative, not a quantitative, assessment
    of the case. It is noted in
Jordan
, at para. 77, that [p]articularly
    complex cases are cases that, because of the nature of the
evidence
or
    the nature of the
issues
, require an inordinate amount of trial or preparation
    time (emphasis in original). Complexity is therefore to be assessed in light
    of the entirety of the proceedings, taking into account factors such as the
    volume of disclosure and length of the preliminary inquiry:
Cody
, at
    para. 64;
R. v. Picard
, 2017 ONCA 692, 354 C.C.C. (3d) 212, at para.
    62, leave to appeal refused, [2018] S.C.C.A. No. 135; and
R. v. Baron
,
    2017 ONCA 772, 356 C.C.C. (3d) 212, at paras. 52, 71.

[209]

In our view, the
    application judge did not err in holding that this was a complex case. It
    involved voluminous disclosure, a lengthy preliminary inquiry, the evidence of
    technical witnesses, the scheduling of several pre-trial applications, charges
    covering a lengthy period of time, and multiple co-accused. All of these
    factors support the application judges finding that the case was complex.

The institutional delay did not exceed the
Morin
guidelines

[210]

In her reasons, the
    application judge stated that the institutional delay was 17 to 20 months. As
    the Crown explained on appeal, this was an error. These were the figures set
    out in the Crowns factum for the application. In oral submissions, the Crown
    had told the application judge that this was an error, as the Crown
    substantially overstated the institutional delay. On appeal, the Crown explains
    that the total institutional delay properly calculated is 12.4 months, which is
    under the
Morin
guidelines of 14 to 18 months of institutional delay:
Jordan
,
    at para. 52.

[211]

In oral submissions, Jun-Chul and Kathleen
take issue with two
    aspects of the Crowns calculation. First, they consider that the time to
    effect disclosure in this case was excessive. Specifically, they argue that
    approximately four months of the period the Crown identifies as inherent delay
    for intake and disclosure should be considered as institutional delay, since
    the disclosure could not be completed because of the ongoing police
    investigation. Second, Jun-Chul and Kathleen indicate that approximately one
    month is attributable to institutional delay for the delay in securing a date
    for the first judicial pre-trial before the Ontario Court of Justice. They
    concede, however, that even if this adjustment is made, the combined
    institutional and Crown delay before the Ontario Court of Justice and the
    Superior Court of Justice is approximately 17 months, which still comes within
    the
Morin
guidelines of 14 to 18 months. As a result, this factor
    clearly weighs in favour of dismissal of the application.

The Crowns response to institutional delay

[212]

The application judge
    found that this factor favoured dismissal of the application. She determined
    that the Crown had genuinely responded to the circumstances of the case
    including the voluminous disclosure, multiple co-accused and an ever-changing
    roster of defence counsel by seeking and creating opportunities to streamline
    the issues and evidence, and adapting to the evolving circumstances as the case
    progressed. This factual conclusion is well supported in the record, and we
    agree with the application judge that this factor also favours dismissal of the
    application.

The defence efforts to move the case along

[213]

It is apparent from a
    review of the record that neither
Jun-Chul
nor
    Kathleen demonstrated any genuine interest in moving the case along. Jun-Chul
    discharged his first counsel and there were delays caused by accommodating the
    availability of his second counsel and by this counsels subsequent failure to
    attend court on time on October 7, 2013. Lengthy delays were caused by Jun-Chul
    and Kathleens scheduling and rescheduling of their proposed stay application.
    They did not proceed with that application. There were also delays by the late
    decision of the appellants on August 6, 2015 to re-elect to a judge-alone
    trial. Prior to re-electing, they had advised of their intention to bring a
    change of venue application. Because of that pending change of venue
    application, a trial could not reasonably be scheduled until the venue was
    confirmed. Lastly, Kathleens discharge of her second lawyer occurred just
    before the scheduled trial date of February 22, 2016. This led to further
    delays.

[214]

In short, Jun-Chul and
    Kathleens actions demonstrate that they were content with the pace of
    proceedings. This factor therefore supports dismissal of the application.

Prejudice to the appellants

[215]

The application judge
    acknowledged that the protracted nature of the proceedings exacerbated the
    anxiety, concern, and stigma of exposure to criminal proceedings that
Jun-Chul and Kathleen
felt. However, in the application
    judges view, Kathleens decision to discharge her lawyer just before the trial
    scheduled for February 22, 2016 and Jun-Chuls failure to oppose that
    adjournment played a role in protracting the proceedings and called into
    question the degree to which Kathleen and Jun-Chul were anxious, at least at
    that point, to have the matter proceed expeditiously.

[216]

In terms of
    restrictions on Jun-Chul and Kathleens liberty, the amount of bail was
    significant, but the restrictions were relatively minimal and reasonable
    considering the nature of the allegations that involved moving the proceeds of
    crime out of the country. In fact, these restrictions were relaxed for Jun-Chul
    when he requested variations to his bail.

[217]

On appeal, Jun-Chul
    and Kathleen argue that the application judge failed to infer substantial
    prejudice from the length of the delay itself. Jun-Chul also argues that the
    application judge failed to consider the actual prejudice to Jun-Chul, who
    lived under the threat of a lengthy jail sentence for seven years while under
    bail conditions prohibiting him from travelling outside Ontario or from
    communicating with Kathleen, his daughter, except in the presence of counsel.

[218]

While we agree with
    the appellants that prejudice is to be inferred from the length of the delay
    and that this factor weighs in favour of granting the application, we do not,
    as the appellants suggest, view it as constituting a substantial prejudice.
    Rather, we consider it to be of limited significance in this case. The bail
    terms were not particularly onerous, certainly in respect of Kathleen, and, as the
    application judge found, the actions of the appellants indicate that they were
    not anxious to have the matter heard expeditiously.

The seriousness of the offences

[219]

The charges in this
    case were undoubtedly serious. Not only did it involve a very large fraud of
    $12.5 million on the OLG, it also involved the victimization of the rightful
    owner of the lottery ticket. Under the
Morin
analysis, the seriousness
    of the offences would weigh against the granting of a stay, as this
    consideration played a decisive role in whether delay was unreasonable under
    the previous framework:
Jordan
, at para. 96. In fact, [a]s the
    seriousness of the offence increases so does the societal demand that the
    accused be brought to trial:
Morin
, at p. 787. As these serious
    offences involved a large-scale fraud that victimized both a Crown corporation
    and the true owner of the $12.5 million lottery ticket, they do not warrant a
    stay of proceedings under the
Morin
framework.

Does the delay in the Ontario Court of Justice justify a stay?

[220]

In her oral
    submissions, Kathleen focussed her arguments on the delay that occurred in the
    Ontario Court of Justice. She maintained that it was excessive to the point
    where a stay ought to be granted. She explained that the delay in that court
    totalled almost three years. Two aspects of that delay were emphasized:

1.

the delay in completing disclosure; and

2.

the total institutional delay in that court.

[221]

We are not persuaded
    by these submissions.

The delay in completing disclosure

[222]

Kathleen argues that
    162 days (5.3 months) to effect disclosure in this case was excessive. She was
    arrested on September 28, 2010 and received significant disclosure on October
    27, 2010, but it was not until the end of January 2011 when the investigation
    ended that the materials in support of the various search warrants could be
    unsealed, and the contents could be disclosed to the appellants. In addition,
    full disclosure, including disclosure related to the search for and
    identification of the presumed true winner of the $12.5 million, was not
    completed until March 3, 2011. Therefore, Kathleen argues that approximately
    four months of this disclosure delay caused by the ongoing investigation should
    be attributable to the Crown. She further explains that the appellants could
    not reasonably prepare for a preliminary inquiry or otherwise address the
    charges until this disclosure was complete.

[223]

Kathleen maintains
    that this delay in completing disclosure from October 27, 2010 to March 3, 2011
    was the fault of the Crown, which is attributable to the Crowns decision to
    lay the charges and make the arrests before the investigation had been
    completed.

[224]

While we acknowledge
    that there were significant delays, we consider these to be reasonable in the
    circumstances of this case. As explained by the Crown in oral submissions, in
    order to find the true owner of the ticket, the OLG had to publicly announce
    that Kathleen did not win the $12.5 million prize and ask those who may be the legitimate
    owner of the ticket to come forward. If the announcement was made before the
    seizure of the defrauded funds and the freezing of the assets acquired by the
    appellants with the stolen funds, the appellants, knowing that they would have
    to return the funds and would likely be charged, may well have dissipated or
    taken the funds and assets out of reach of the authorities. Therefore, the
    seizure of the funds and freezing of the assets could not reasonably be
    effected until the charges were laid.

[225]

As for the unsealing
    of the material in support of the search warrants, this could not occur until
    after the search for the true winner had been carried out. This is because the
    material would disclose key information that only the true purchaser of the
    ticket would know, information such as the date and location of the purchase of
    the original ticket. As indicated by the Crown during oral submissions, the
    release of this search warrant information could have tainted the investigation
    for the true winner.

[226]

In these exceptional
    circumstances, we would not fault the Crown for delaying the disclosure of the
    search warrant materials or for laying the charges, even though the
    investigation, to some degree, was ongoing: see
R. v. N.N.M.
(2006),
    209 C.C.C. (3d) 436 (Ont. C.A.), at para. 16;
R. v. Schertzer
, 2009
    ONCA 742, 248 C.C.C. (3d) 270, at paras. 116, 128 and 131, leave to appeal
    refused, [2010] S.C.C.A. No. 3.

[227]

In any event, as we
    have explained in our analysis of the transitional exceptional circumstance
    provision of
Jordan
, even if the inherent delay allocated for intake
    and disclosure was reduced by four months and these four months were
    subsequently allocated to Crown delay, the overall institutional and Crown
    delay would still be within the
Morin
guidelines.

[228]

A second concern
    raised by Kathleen with respect to disclosure is the delay in disclosing
    documents that were in the possession of the OLG. It was only shortly before
    the preliminary inquiry was scheduled to commence that the Crown was alerted
    that documents in the possession of the OLG had not been provided to the Crown,
    and therefore were not disclosed to the appellants. The preliminary inquiry
    could not be completed until these documents were obtained by the Crown and
    disclosed to the appellants.

[229]

Kathleen argues that
    it was the Crowns responsibility to have obtained and disclosed these
    documents well in advance of the scheduled preliminary inquiry. She maintains
    that the delays caused by the Crowns failure to do so weigh in favour of
    granting a stay.

[230]

In our view, the delay
    by the Crown to secure the OLG documents and provide them to the appellants as
    part of their disclosure obligations does not amount to a misstep by the Crown
    that warrants or supports granting a stay. The documents were in the possession
    of the OLG, a non-party to these proceedings. While the Crown ought to have
    been aware of their existence, as there was a reference to these documents in
    the Ombudsmans report regarding an investigation into the OLG, the appellants
    also had access to this report and could have requested the production of these
    documents. It was not until the preliminary inquiry was scheduled that this
    issue came to light. Once it was discovered, the Crown acted quickly to obtain
    the documents, and the parties cooperated to make best use of the preliminary
    inquiry dates that had been set aside.

The amount of institutional delay in the Ontario Court of
    Justice

[231]

Kathleen argues that
    the start date of the preliminary inquiry was delayed because of a lack of
    court resources. She submits that while counsel was prepared to commence the
    preliminary inquiry in early fall of 2012, the court ultimately scheduled the
    preliminary inquiry to commence on November 6, 2012. In addition, she maintains
    that before the preliminary inquiry was completed, further delays were caused
    by the disclosure issues and the courts unavailability. The preliminary
    inquiry scheduled for November 2012 therefore continued in February and May
    2013, concluding on May 29, 2013. The matter was then adjourned to September
    24, 2013 for the decision on committal, since the preliminary inquiry judge had
    other judgments under reserve. These institutional delays were lengthy and
    contributed to the excessive time the case took to proceed through the Ontario
    Court of Justice. In Kathleens submission, this, in combination with the
    disclosure delays, is sufficient to justify granting a stay of proceedings.
    According to Kathleen, a case taking three years to work its way through the
    Ontario Court of Justice is simply unacceptable.

[232]

We agree that
    institutional delay in the Ontario Court of Justice is certainly a factor to be
    taken into account, as is the total length of time that a case takes to work
    its way through that court. Those delays, however, have been taken into account
    in the
Morin
analysis we carried out earlier. Under the
Morin
framework, it is the combined institutional and Crown delay for the Ontario
    Court of Justice and the Superior Court of Justice taken together that is
    considered, as it is the reasonableness of the overall delay or the
    reasonableness of the total period of time that needs to be assessed: see
R.
    v. Conway
, [1989] 1 S.C.R. 1659, at p. 1674;
R. v. Bennett
(1991),
    3 O.R. (3d) 193 (C.A.), at p. 211, affd [1992] 2 S.C.R. 168; and
Schertzer
,
    at para. 122. Therefore, an excessive delay in the Ontario Court of Justice
    can, in effect, be remedied by a short delay in Superior Court, as long as the
    total delay is reasonable. The overall delay in this case did not exceed the
Morin
guidelines.

Conclusion

[233]

There is no doubt that
    the delay in this case far exceeded the 30-month presumptive ceiling of
Jordan
.
    When the 347 days of delay that the application judge improperly deducted on
    account of complexity are added to the 1,005 days of net delay for Jun-Chul and
    the 1,084 days of net delay for Kathleen, the net delays rise to 1,352 days
    (44.5 months) for Jun-Chul and 1,431 days (47 months) for Kathleen. If, as
    argued by the appellants, the application judge improperly allocated some of
    the delay to defence conduct, the delay numbers would rise even higher.

[234]

In our view, however,
    despite the extent of the delay over the
Jordan
ceiling, we agree with
    the application judges conclusion that this is a case that falls squarely into
    the category of cases to which the transitional exceptional circumstance
    provision outlined in
Jordan
applies. Therefore, we would dismiss this
    ground of appeal advanced by Jun-Chul and Kathleen, as the application judge
    did not err in dismissing the s. 11(b) stay application.

Issue 4: Did the trial judge err in not granting interest to Kenneth Chung?

[235]

The Crown was in
    possession of $28,874.51 from Kenneth. On February 21, 2019, it was ordered
    that the funds be returned to him. The forfeiture judge declined to award
    interest on the funds. Kenneth Chung appeals that order. He relies on the
Civil
    Remedies Act
, 2001, S.O. 2001, c. 28,

the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194,

and the
Courts of Justice Act
,
    R.S.O. 1990, c. C.43,
to say that interest should have been
    provided.

[236]

The provincial
    statutes that Kenneth relies on relate to civil proceedings. They have no
    application to the federal
Criminal Code
which makes no provision for
    the payment of interest on money restrained and subsequently ordered returned. The
    trial judge did not err and this portion of Kenneths appeal is dismissed.

Issue 5: Did the trial judge err in acquitting Kenneth of counts 3-6?

[237]

The Crown appeals
    Kenneths acquittal on count 3 (the theft of the winning ticket), count 4
    (possession of the winning ticket), count 5 (fraud) and count 6 (possession of
    the proceeds of crime).

[238]

Relying on Exhibit 38,
    the trial judge found there was a scheme by Jun-Chul and Kenneth to steal free
    tickets. He found they were joint participants in an eight-month scheme under
    which they stole lottery tickets from customers. He convicted them both for
    theft and possession of stolen lottery tickets. However, the trial judge
    refused to consider the split ticket scheme in relation to remaining counts because
    the Crown did not bring a similar fact application:

As noted, no application was
    brought by the Crown to have the evidence relevant to Counts 1 and 2, that I
    have reviewed, rendered admissible under Count 3 or, for that matter, any of
    the other Counts. Accordingly, I will not consider any of the pattern
    evidence elicited under Count 1, through Exhibit 38, on any of the other
    counts, including Count 3.

[239]

The Crown submits that
    the trial judge wrongly treated the theft of the winning ticket as an isolated
    act and acquitted Kenneth because there was insufficient evidence under counts
    3-6 to support a conviction. In response, Kenneth repeats the submissions relied
    upon with respect to his appeal of the convictions on counts 1 and 2.

[240]

In each of the
    remaining counts, the trial judge  having ignored his finding on the split
    ticket scheme  found that there was a reasonable doubt because Kenneth could
    have been told that Kathleen was the legitimate owner of the ticket.

[241]

We have concluded that
    the trial judge erred by failing to consider Kenneths participation in the
    split ticket scheme on the remaining counts. This legal error had a material
    bearing on the acquittals.

[242]

We have further
    concluded that the trial judges factual findings with respect to counts 1 and
    2 establish Kenneths guilt on counts 3 and 4 beyond a reasonable doubt. But for
    the error, Kenneth would have been convicted. However, the trial judge did not
    make factual findings sufficient to convict on counts 5 and 6. Therefore we
    substitute a conviction on counts 3 and 4 and order a new trial on counts 5 and
    6.

The legal error

[243]

The trial judge
    concluded that Kenneth Chung was a joint participant in the split ticket
    scheme. He concluded that it was clear that Jun-Chul Chung stole some of the
    tickets and Kenneth Chung stole some. However, more fundamentally, in my view
    they are both guilty of all the thefts as parties under s. 21(1)(a) of the
Code
.

[244]

It was pursuant to
    that scheme that the winning ticket was stolen. Thirty-one free tickets were
    stolen, one won the $12.5 million. The theft of the 31
st
ticket was
    not an isolated act but part of the scheme. The trial judge was required to
    consider all of the evidence, and evidence of Kenneths participation in the
    scheme was admissible on counts 3-6. This was addressed by Doherty J. (as he
    then was) in
R. v. Sahaidak
,

[1990] O.J. No 3228 (Ont. H.C.),
    at para. 150:

In most cases where a multi-count
    indictment is before the Court, evidence adduced on one count is not admissible
    for or against an accused on the other counts. Where, however, the events
    underlying the various counts are part of
an ongoing course of dealings
and where those events are
interwoven and interrelated
so that as a
    matter of logic and common sense, the events underlying one count also
    enlighten and assists the trier of fact in understanding and assessing the
    evidence on the other counts, then the evidence directly relevant to one count
    is admissible on the other counts as well. [Emphasis added.]

[245]

This reasoning was
    cited with support in
R. v. Kirk
, [2004] O.J. No. 3442 (C.A.), at
    para. 15.

[246]

The scheme to steal
    free tickets, which produced 30 no wins or nominal wins, also produced the
    winning ticket. The winning ticket was part of an ongoing course of dealings
    and was interwoven and interrelated. The scheme outlined in Exhibit 38 was
    admissible on the remaining counts in the indictment. The legal error had a
    material bearing on the acquittals.

The facts found by the trial judge
    support convictions on counts 3 and 4

[247]

On an appeal from an
    acquittal, this court may 
enter a verdict of guilty with respect
    to the offence of which, in its opinion, the accused should have been found
    guilty but for the error in law: s. 686(4)(b)(ii) of the
Criminal
    Code.
The trial judges conclusion that Kenneth was a joint
    participant in the scheme pursuant to s. 21 of the
Criminal Code
leads inevitably to convictions on counts 3 and 4.

[248]

Section
    21(1) of the
Criminal
Code provides:

Everyone is a party
    to an offence who

(a) actually
    commits it;

(b) does or
    omits to do anything for the purpose of aiding any person to commit it; or

(c) abets any
    person in committing it.

[249]

As
    found by the trial judge, the scheme that Kenneth participated in was to steal
    lottery tickets. The scheme produced the winning ticket. Kenneth is guilty of
    theft and possession of the winning ticket based on the same evidence that
    resulted in his convictions on counts 1 and 2.

[250]

With respect
    to count 3, theft of the winning ticket, the
trial judge found as
    follows:

It has not been established that
    Kenneth Chung was present in the store at the time Jun-Chul Chung stole the
    ticket. I am not persuaded beyond a reasonable doubt that he was involved in
    the theft. He must be acquitted on Count 3.

[251]

The trial judge made
    the same finding on count 4, possession of the winning ticket.

[252]

These findings by the
    trial judge on counts 3 and 4 are inconsistent with Kenneths involvement in
    the scheme to steal tickets. The theft of the winning ticket was
    indistinguishable from the other 30 tickets. As part of the scheme it was not
    necessary for Kenneth to steal the specific ticket. As the trial judge held,
    the scheme involved Kenneth stealing some tickets and Jun-Chul stealing some
    tickets, but they are both guilty of all of the thefts. Had the trial judge
    considered the scheme, Kenneth would have been found guilty of theft of the
    winning ticket (count 3) and possession of the winning ticket (count 4).

The facts found by the trial judge cannot support convictions
    on counts 5 and 6

[253]

Common sense would suggest that the purpose of
    stealing a lottery ticket is to defraud the OLG and cash in the ticket.
    However, the trial judges findings with respect to counts 5 and 6 are not
    sufficient to invoke s. 686.

[254]

With respect to count
    5, defrauding OLG, the trial judge found that when Kenneth attended meetings at
    the OLG he joined in the story that Kathleen had purchased the original ticket
    that generated the winning ticket.

[255]

In acquitting Kenneth
    on count 5, the trial judge relied on the fact that Kenneth could have been
    told that Kathleen was the rightful owner:

The issue is whether Kenneth Chung
    is also guilty on this count. Once again, not without doubt, I am not convinced
    of his guilt beyond a reasonable doubt. As noted earlier, it is possible that
    he was told, falsely, that Kathleen Chung was the legitimate purchaser of the
    original ticket, and he believed her. Once again, this is a reasonable
    possibility which is inconsistent with Kenneth Chungs guilt. Accordingly, he
    must be acquitted on Count 5.

[256]

Although Kenneth stole
    the winning ticket, there are no findings from which it can be determined that
    Kenneth knew the truth when he participated in the meetings at the OLG. It is
    unclear whether the trial judges reasonable possibility that Kenneth did not
    have the requisite knowledge would have remained had he considered the scheme.

[257]

With respect to count
    6, possession of the $12.5 million paid, the trial judge expressed similar
    concerns:

While Kenneth Chung obtained
    considerable benefit from some of the proceeds of the $12.5 million, once again
    I am not convinced beyond a reasonable doubt that he knew that the money and
    property were obtained by fraud. As noted, it is at least a reasonable
    possibility that he was told that Kathleen Chung was the legitimate owner of
    the ticket, and he believed her. Thus, it is a reasonable possibility which is
    inconsistent with the guilt of Kenneth Chung.

[258]

We are not satisfied that,
    but for the error, Kenneth would have been convicted of counts 5 and 6.

[259]

Pursuant to s.
    686(4)(b)(ii) of the
Criminal Code
a conviction is entered on counts 3
    and 4 and the matter is returned to the Superior Court for sentencing. With
    respect to counts 5 and 6 a new trial is ordered.

CONCLUSION

[260]

Kathleen Chungs
    appeal is allowed in part as follows:

a.

The quantum of
    restitution is reduced to the amount of the forfeiture plus $2.3 million.

b.

The custodial
    sentence is reduced to three years.

[261]

The Crown appeal of
    the acquittals of Kenneth Chung is allowed as follows:

a.

A conviction is
    entered on counts 3 and 4 and the matter is returned to the Superior Court for
    sentencing.

b.

A new trial is
    ordered on counts 5 and 6.

[262]

In all other respects
    the appeals are dismissed.

Released: March 31, 2021 P.R.

Paul
    Rouleau J.A.

M.L. Benotto J.A.

B.W. Miller J.A.





[1]

Jun-Chul, Kenneth, and Kathleen were also charged with money
    laundering under Count 7. The trial judge acquitted all three of the money laundering
    charge, and the Crown does not appeal that acquittal.



[2]

It would be unwise to speculate as to what constitutes
    a refusal to pay, and what constitutes an unreasonable refusal to pay. This is
    an area of law that must be developed on a case-by-case basis. We do not
    propose to decide these questions on the basis of hypotheticals that may or may
    not constitute reasonable refusals. The basic principles are that the purpose
    of the provision is to prevent an offender from benefitting from crime, and that
    the committal can only be a consequence of unreasonable refusal, and not
    genuine inability to pay. There may well be cases of self-induced poverty, by
    which the property will have been consumed and the offender will thereby have
    received a benefit. This type of poverty is no defence to incarceration.



[3]

Dieckmann
dealt with a
    large-scale scheme that defrauded the Canada Revenue Agency of approximately
    $5.7 million. There were four co-conspirators: Mr. Davis, Ms. Hartman, Ms.
    Dieckmann, and Mr. Salmon. All four co-conspirators benefitted from the scheme
    and were named defendants before the court, but Mr. Davis and Ms. Hartman died
    before trial. Mr. Salmon and Ms. Dieckmann were both convicted, and the court
    accepted Mr. Davis and Ms. Hartman were clearly guilty and would have been
    convicted had they survived to trial. When imposing the fines in lieu of
    forfeiture, the trial judge apportioned the $5.7 between all four
    co-conspirators (albeit notionally, for Mr. Davis and Ms. Hartman), based on
    their respective roles in and benefits derived from the scheme. Accordingly,
    although Ms. Dieckmann had possession and control of the full $5.7 million at
    one point or another, the trial judge only fined her
$1,285,930
. Collectively, the four fines totaled $5.7 million, being the value
    of the proceeds of crime subject to forfeiture: see
R. v. Dieckmann
,
    2014 ONSC 717, affd
2017 ONCA 575, 355 C.C.C. (3d) 216, leave to appeal
    refused, [2018] S.C.C.A. No. 304 and No. 381.


