



COURT
OF APPEAL FOR BRITISH COLUMBIA




Citation:



R. v. Port Chevrolet Oldsmobile Ltd.,









2010 BCCA 47




Date: 20100126

Docket:
CA035360

Between:

Regina

Respondent

And

Port Chevrolet Oldsmobile Ltd. and
Michael Wolfe

Appellants






Before:



The Honourable Madam Justice Saunders





The Honourable Madam Justice Bennett





The Honourable Madam Justice Garson




On
appeal from: Supreme Court of British Columbia, August 27, 2007
(
R. v. Port Chevrolet Oldsmobile Ltd.
, New Westminster Reg. X065157

Oral Reasons for Judgment

[The sentence appeal of Mr. Wolfe was dismissed as abandoned. These
reasons for judgment address the Crowns sentence appeal, although in the style
of cause the Crown is named as respondent]




Counsel for the Appellant:



R. Peck, Q.C.
A.M. Willms





Counsel for the (Crown) Respondent:



J.
  Hyman





Place and Date of Hearing:



Vancouver,
  British Columbia





January 25 ,2010





Place and Date of Judgment:



Vancouver
, British Columbia





January
  26, 2010






[1]

SAUNDERS J.A.
: The
Crown appeals from the sentence imposed August 27, 2007 on Mr. Wolfe for
seven counts of GST offences contrary to ss. 327(1)(c) and (d) of the
Excise
Tax Act
, R.S.C. 1985, c. E-15. Mr. Wolfe was the president of the
co-accused Port Chevrolet Oldsmobile Ltd., also convicted of GST offences.

[2]

The learned sentencing judge, Madam Justice
Gill, sentenced Mr. Wolfe to two years less a day incarceration on each
of seven counts on which he was convicted, to be served concurrently, along
with fines on those counts totalling $6,904,071.06, to be paid by August 31,
2014, with a further eight months incarceration should he be in wilful default
of the fines.

[3]

The charges arise from a scheme created by
Sameer Mapara, owner of Rags to Riches Motorcars. Mr. Wolfe, Mr. Mapara,
Port Chevrolet and two other individuals were charged on a 13 count indictment
for events between May 1995 and November 1998. Following Mr. Maparas
conviction for a murder committed in 1998 on which he was sentenced to a life
sentence, and dismissal of Mr. Maparas appeal, the Crown stayed the
charges against Mr. Mapara relating to these GST offences. The Crown also
stayed the charges against the other two individuals. The trial proceeded,
therefore, against only Mr. Wolfe and Port Chevrolet on 12 counts.

[4]

After a 70-day trial, a jury convicted Mr. Wolfe
on seven counts. In doing so it acquitted him of two counts relating to the
period May 1995 to February 1996, and one count of fraud contrary to s. 380
of the
Criminal Code.

[5]

Mr. Wolfe and Port Chevrolet appealed
unsuccessfully against conviction: 2009 BCCA 357, 246 C.C.C. (3d) 355.

[6]

The charges against Mr. Wolfe and Port
Chevrolet arose out of the purported purchase, sale and export of vehicles from
Canada to Asia between 1995 and 1998. It is accepted the scheme was devised by Mr. Mapara. He
approached Mr. Wolfe, seeking assistance in financing the GST on luxury
vehicles for export to Asia.

[7]

As described in the reasons for judgment of
this Court on the conviction appeal, the
Excise Tax Act
requires
suppliers of goods and services to collect GST from their customers and to
remit it to the taxing authority. Purchasers of goods who subsequently sell the
goods to others are entitled to input tax credits for the amount of the GST
paid on the goods they acquired to sell. That is, there is an application to
the government for a GST rebate. GST is not collected on goods that are
exported. An exporter will pay GST on the goods it acquires and is entitled to
input tax credits, but will not collect GST from its customers.

[8]

The scheme was one in which Mr. Mapara and
his business Rags to Riches purported to sell automobiles to Port Chevrolet. The
vehicles did not exist and false documents and invalid vehicle identification
numbers were used in the paper work. Port Chevrolet paid Rags to Riches the
purchase price plus 7% for GST. Port Chevrolet then purported to sell the
vehicles back to Rags to Riches or its nominee, without imposing GST because
the vehicles were said to be sold to Mr. Mapara and his business for
export. The price of the resale by Port Chevrolet to Rags to Riches was the
initial sale price plus 1.5%. This left a profit in the hands of Rags to Riches
of 5.5% on the original purchase price.

[9]

Port Chevrolet then claimed the input tax credit
on its original purchase, that is 7% of that purchase price. Having originally
paid 107% of the purchase price for the car, and received 101.5% from Rags to
Riches and 7% rebate from the government, Port Chevrolet was ahead by 1.5% and
Rags to Riches by 5.5%.

[10]

The judge held the fraudulent transactions
involved about 1600 non-existent vehicles, over 200 transactions between Mr. Wolfe
and Mr. Mapara and approximately $6.9 million in GST input tax credits
obtained by Port Chevrolet.

[11]

The Crown contends the sentence of two years
less a day imposed by the trial judge was inadequate and unfit, given the size,
sophistication and duration of the offences. The Crown acknowledges that Mr. Wolfe
was not the principal in the fraudulent scheme whereby these GST input tax
credits were refunded to Port Chevrolet and says that had he been the main
proponent of the scheme a sentence of six or seven years would have been
appropriate on the authorities, demonstrating that a sentence of two years
less a day for being a party to such a large scale fraud on the public purse is
an inadequate sentencing response.

[12]

The Crown submits a sentence of two years less
a day departs markedly from the range of sentence normally imposed for
substantial and prolonged involvement in an on-going fraud on the public purse,
urges us to interfere with the sentence on the basis it is demonstrably unfit,
and suggests a sentence of four or five years is the appropriate sentencing
response. In support of its submission the Crown cited several cases of fraud,
tax and otherwise, including
R. v. DiGiuseppe
, 2008 ONCJ 127, [2008] 5
C.T.C. 3;
R. v. Bjellebo
(2003), 177 O.A.C. 378, 2003 D.T.C. 5659;
R.
v. Wilder
, 2008 BCCA 370, [2009] 1 C.T.C. 246;
R. v. Elless
, 2007
BCSC 962;
R. v. Alexander Street Lofts
, 2007 ONCA 309, 86 O.R. (3d) 710;
R. v. Surani
, (10 September 2008), Vancouver  487 (P.C.);
R. v.
Davda
, 2007 BCPC 463, 2008 G.T.C. 1309; and
R. v. Hofbauer
, 2004
BCSC 1810. These cases, says the Crown, establish a range of sentence in this
case of six to seven years for the principle offender in the scheme, and four
to five years for a party.

[13]

Counsel for Mr. Wolfe also refers to a
number of cases including cases of fraud under the
Criminal Code
. These
cases, it is said, demonstrate that the range of sentence for like offences is
not as high as the Crown submits:
R. v. Biller
, 2005 BCSC 1278;
R.
v. Bortolussi
(1997), [1998] 1 C.T.C. 145, 36 O.T.C. 189 (Ont. Gen. Div.);
R.
v. Ellis
, 2008 ABQB 40, 428 A.R. 334;
R. v. Gray
(1995), 76 O.A.C.
387, 95 D.T.C. 5262 (C.A.);
R. v. Khan
, 2002 BCCA 703, 183 B.C.A.C. 3;
R.
v. Minnie
, 2007 BCSC 433;
R. v. Prokofiew
(No. 2), [2004] O.J. No. 5133
(S.C.J.) and
R. v. Tulloch
, [2002] O.J. No. 5446 (S.C.J.). We are
also referred to cases involving the
Excise Tax Act:

R. v. Brown
,
2003 BCPC 537, and
R. v. Lempen
, 2006 NBQB 246, 302 N.B.R. (2d) 29.

[14]

It is well known that this Court may not
interfere with a sentence where there is no error in principle alleged, unless
the sentence is demonstrably unfit:
R. v. Fraser
, 2009 BCCA 179, 269
B.C.A.C. 200;
R. v. Johnson
(1996), 112 C.C.C. (3d) 225, 84 B.C.A.C.
261;
R. v. C.A.M.,
[1996] 1 S.C.R. 500, 105 C.C.C. (3d) 327.

[15]

In determining whether a sentence is
demonstrably unfit, the question is whether the sentence imposed by the trial
judge is a substantial and marked departure from the sentences customarily
imposed for similar offenders committing similar crimes:
R. v. C.A.M.

[16]

Given the nature of the offences in this case,
it bears mentioning that the principle of general deterrence and denunciation
must play a significant role in the sentence imposed. No doubt it is that
principle that caused the judge to impose a period of incarceration even though
the length of sentence is one which could attract a conditional sentence. Yet
at the same time, the sentence must be nuanced to reflect the degree of
culpability of the offender, reflect the particular circumstances of the
offender and the offence including considerations specific to the offender,
have a degree of parity to cases involving like offenders and like offences,
and
fit within the sentencing provisions of the governing statute
.

[17]

The sentence was imposed under the
Excise
Tax Act.
The maximum sentence for an offence under s. 327 is five
years, in contrast to the maximum sentence for fraud under the
Criminal Code
of 14 years. However, the
Excise Tax Act
requires the court to
impose a fine in an amount between 100% and 200% of the amount involved in the
fraud. This provision produced the fines totaling just over $6.9 million. As
each sentence was comprised of two distinct portions, and there are seven
offences, totality of sentence is a proper consideration, such that in total,
the sentences imposed fully but not excessively respond to the offences.

[18]

A key aspect of any sentencing decision is
determination of the culpability of the offender. Where, as here, the person is
not the principle offender, the degree of participation of the offender in the
scheme and the state of mind of the offender is important. In this case the
judge started her reasons for sentence addressing Mr. Wolfes state of
mind

[1]        ...Counsel
are agreed that the verdict of the jury reflects a finding that Mr. Wolfe
was wilfully blind to the non-existence of the vehicles which were the subject
matter of the transactions. There were acquittals on counts 1 and 2  It is
agreed that the jury must have concluded that at some point in 1996, Mr. Wolfe
had the requisite mental element but it is simply not possible to be more
specific as to when in that year. For present purposes, I therefore proceed on
the basis that the offences occurred over a period of approximately two years.

[19]

The judge first discussed certain submissions
made with respect to the mandatory fine, and then focused on the sentence to be
imposed. Mr. Wolfe was then 58 years old (now 60). She said Mr. Wolfe
has been a respected member of the community, has no criminal record,
continues to be supported by his family, by his friends, and by his business
associates, and had advanced letters that are a testament to his character. As
to Mr. Wolfes participation in the offences, the effect of the events
upon Mr. Wolfe, and the absence of any direct personal benefit she said:

[16]      The amounts in question were
received by the company not Mr. Wolfe and as has been noted, Port
Chevrolet could not continue to carry on business after it was reassessed. I
would emphasize that there is no evidence that Mr. Wolfe received any
personal benefit beyond that benefit associated with his affiliation to the
company. The reassessment and these charges have been financially consequential
to the family as a whole. The family has paid both a large personal and
financial price. As his counsel said during submissions, Mr. Wolfe has
been visibly humbled and emotionally devastated and is no doubt remorseful.

[17]      What is not apparent from the
evidence is the nature of the scheme, the players involved, the role of each,
and the benefits each received. Given the verdict on Counts 1 and 2,
however, one can say that Mr. Wolfe was not involved at the outset and in
respect of his involvement, it was not premeditated. It is, in my view,
unfortunate that it would appear that those who are responsible for the
planning of this scheme or who benefited most directly and most significantly
will not or cannot be prosecuted. Nor is Mr. Wolfes motivation for
turning a blind eye clear from the evidence. Although the Crown led evidence to
support the suggestion that Port Chevrolet would otherwise have been out of
business and that was Mr. Wolfes motivation, I have difficulty accepting
that. Defence counsel characterized the role of the accused using the word
facilitation. On the evidence, I must agree with that description and I
proceed on that basis.

[18]      In determining what sentence is
appropriate, regard must be had to the mandatory minimum fine. Although Mr. Wolfe
and Port Chevrolet are jointly and severally liable for the amounts, in reality
Mr. Wolfe will be solely responsible and it is a fiction to suggest that
there is any impact at all on Port Chevrolet.

. . .

[20]      In all
of the circumstances, including consideration of the fine for which Mr. Wolfe
will be solely responsible and his personal circumstances as set out in the
presentence report and the evidence of Mr. Wolfe and his family members,
it is my view that a sentence of two years less a day on each of Counts 3
through 9 to be served concurrently is appropriate.

[20]

Crown counsels observation is correct that had
the principal offender in this scheme been convicted, he could have expected a
sentence much greater than was imposed upon Mr. Wolfe, commensurate with
pre-meditation, the scope of the fraud, the duration of the fraud, and his role
in involving others in this illegal activity.
Crown counsel is also
correct to observe that the scale of the fraudulent activity and the duration
of the scheme are factors that bear as well upon the sentence of a facilitator
of a scheme.

[21]

Notwithstanding the forceful submissions of the
Crown, I am unable to conclude, on the facts as found by the judge,
the
sentence imposed
is demonstrably unfit.
In this case,
in my view, the sentencing judge properly considered the mental element of Mr. Wolfe
implicit in the convictions, the fact he did not derive direct personal benefit
from the crime, the fact he had no criminal record, his remorse and shame, and
the burden of the fine he carries which bears upon the totality of the
sentence, as influencing the length of sentence.

[22]

I do not propose to review each of the cases
presented to us, but I would observe they demonstrate a broad range of sentence
reflecting the many ways cases of fraud, particularly tax fraud, may present. One
theme that emerges is that such an offence committed by the principal fraudster
often attracts a period of penitentiary incarceration. Yet while it may be said
the jail sentence imposed, in this case, is towards the lower end of the
spectrum, I do not consider the cases demonstrate that this sentence, for this
offender and these offences, considering the very large fine that has been
imposed upon Mr. Wolfe and the potential for his further incarceration,
is, in the words of
R. v.
C
.A.M.
a
substantial and marked
departure from the sentences customarily imposed for similar offenders
committing similar crimes
.

[23]

I conclude there is no proper basis to interfere
with the sentence imposed. I would dismiss the appeal.

[24]

BENNETT J.A.
: I
agree.

[25]

GARSON J.A.
: I
agree.

[26]

SAUNDERS J.A.
:
This sentence appeal is dismissed.

The
Honourable Madam Justice Saunders


