



COURT 
    OF APPEAL FOR BRITISH COLUMBIA




Citation:


R. 
          v. Bodnarchuk,







2008 
          BCCA 39



Date: 20080122

Docket: CA033147

Between:

Regina

Respondent

And

Mervin 
    Michael Bodnarchuk

Appellant




Before:


The 
          Honourable Chief Justice Finch




The 
          Honourable Madam Justice Levine




The 
          Honourable Mr. Justice Chiasson



Oral Reasons for Judgment




M. 
          Tammen


Counsel for the Appellant




S.D. 
          Cooke


Counsel for the (Crown) Respondent




Place 
          and Date:


Vancouver, British Columbia




22 January 2008



[1]

LEVINE, J.A.
: The appellant, Mervin Melvin Bodnarchuk, was convicted 
    in British Columbia Supreme Court in February 2005 of 14 counts of theft under 
    s. 332 of the
Criminal Code
.  He was sentenced to 12 to 18 months 
    in prison in July 2005, and restitution orders were made in the total amount 
    of $65,000.   His conviction appeal was dismissed by this Court on August 
    20, 2007.  He was granted leave to appeal the sentences on August 30, 2007.

[2]

The circumstances of the appellant and the offences for which he was 
    convicted are reviewed in the trial judges reasons for judgment (2005 BCSC 
    150) and reasons for sentence (July 8, 2005, Vancouver Registry CCO11121), 
    and in the reasons of this Court dismissing the conviction appeal (2007 BCCA 
    417).

[3]

In essence, the appellant was found guilty of promoting the sale of 
    a companys shares to investors, on promises that the shares would be listed 
    on a stock exchange, and delayed or failed to provide share certificates to 
    the investors, with the result that the investors could not deal with their 
    shares.  The appellant was the directing mind of the company.  The business 
    venture to be undertaken by the company never came to fruition  indeed, it 
    may never have been launched.  The company was indebted to the appellant for 
    shareholders loans, and the appellant used the investors money for personal 
    and other business purposes.

[4]

This Court found the appellant was entitled to use the investors funds 
    for his own purposes, because of the shareholders loans owed to him (at para. 
    27).  The deliberate delay in providing the investors share certificates, 
    however, amounted to being in receipt of money that he fraudulently and contrary 
    to a direction employed for another purpose.  As Hall J.A. put it (at para. 
    33):

The
actus reus
of the offence was the appellant's 
    use of the investment monies and failure to timeously have issued that for 
    which the monies had been furnished.  The
mens rea
of the crime, impelled 
    by the motivation I have described above, was his intent to keep the investors 
    out of their property as long as possible to serve his own economic ends.  
    There was here, as in
Skalbania
, an intentional and unmistaken 
    misappropriation of the funds provided by the investors.  The appellant conceived 
    and executed a scheme to obtain funds from investors to keep him from financial 
    distress and the successful operation of the enterprise required him to ensure 
    that share certificates not be delivered in any timely way to investors.  
    The true state of affairs was never disclosed to the investors.  I consider 
    it was open to the trial judge to find both the
actus reus
and the
mens rea
of theft under s. 332 made out on the facts of this case.

[5]

At the appellants sentencing, defence counsel proposed three alternative 
    sentences: a conditional discharge; a sentence of six months to be served 
    in the community as a conditional sentence plus a restitution order; and a 
    fine in the range of $25,000 plus a restitution order.  The trial judge rejected 
    all of these suggestions, in favour of sentences of imprisonment of 12 to 
    18 months.

[6]

The appellants grounds of appeal on sentence are that the trial judge 
    erred in failing to impose conditional sentences, and in failing to reduce 
    the length of the sentences to take into account the restitution order.

[7]

As the appellant acknowledges, the trial judge did reduce the length 
    of the sentences she imposed to take into account the restitution orders.  
    She noted (at para. 55):  An order for restitution, it must be remembered, 
    is itself punishment and, accordingly, it must serve to reduce what would 
    otherwise be an appropriate term of imprisonment.  This statement reflects 
    the principle relied on by the appellant, as stated in
R. v. Siemens
(1999), 136 C.C.C. (3d) 353 at para. 8(1) (Man. C.A.), and adopted by this 
    Court in
R. v. Yates
(2002), 169 C.C.C. (3d) 506 at para. 20, 
    2002 BCCA 583, that a restitution order must be included as a factor in the 
    totality of the punishment imposed.

[8]

The trial judge found (at para. 53) that the range of sentences of 
    imprisonment was 18 to 22 months, depending on the amount involved.  Taking 
    into account the restitution orders, she said,  the sentence may be reduced 
    from the range which I have expressed (at para. 55).  The sentences she imposed 
    were 12 to 18 months.

[9]

The appellant argues, however, that the trial judge should have expressly 
    considered the restitution order when determining whether a conditional sentence 
    could adequately address the principles of denunciation and deterrence, did 
    not give sufficient effect to the restitution order, and should have reduced 
    the longest sentence to 12 months.  He notes that in
Yates
the 
    Court said (at para. 7):

The authorities establish that restitution orders give 
    effect to many of the principles of sentencing including denunciation, specific 
    and general deterrence and rehabilitation.

[10]

The appellants primary argument, however, is that this Courts decisions 
    in
R. v. Burkart
(2006), 214 C.C.C. (3d) 226, 2006 BCCA 446 
    and
R. v. Dickson
, 2007 BCCA 561, have changed the landscape 
    with respect to the availability of conditional sentences to offenders convicted 
    of serious breach of trust offences.  In both of those cases, the Court substituted 
    conditional sentences for sentences of imprisonment imposed at trial for serious 
    breach of trust offences against employers by their employee.  The appellant 
    says that these cases reversed the prevailing view that in cases of fraud 
    and breach of trust, incarceration was the appropriate and effective form 
    of sentence to demonstrate societal denunciation of such crimes and to deter 
    others from committing them:  see
R. v. Hoy
(1998), 113 B.C.A.C. 
    155,
[1998] B.C.J. 
    No. 1649;

R. v. Skalbania
(1998), 131 C.C.C. (3d) 166;
R. v. Schneider
, 
    2002 BCCA 143;
R. v. Khan
, 2002 BCCA 703;
R. v. Autenrieth
;

2003 BCCA 521;
R. v. Zeek
, 2004 BCCA 42;
R. v. 
    Stephenson
, 2006 BCCA 104;

and
R. v. Ireland
, 
    2007 BCCA 387.

[11]

Burkart
and
Dickson
recognize that, in accordance 
    with the
Criminal Code
and the authorities, conditional sentences 
    should be considered in every case where the minimum criteria are met.  As 
    the Chief Justice said in
Dickson
(at para. 35):

Applying the law as laid down in
Proulx
, 
    the proper approach when the minimum criteria for a conditional sentencing 
    order are met is to consider, taking into account the fundamental purpose 
    and principles of sentencing, whether there are sufficient reasons for not 
    imposing a conditional sentence, or whether there are considerations which 
    would mandate imprisonment, even though a conditional sentencing order would 
    otherwise be appropriate.  There is no presumption one way or the other.

See 
    also paras. 63-64, where the Chief Justice said:

This Court has said more than once that general deterrence 
    is central to the sentencing process in cases involving large scale frauds 
    with serious consequences for the victims.  In many cases, convictions for 
    serious fraud have led to the imposition of custodial sentences: see
R. 
    v. Khan
, [2002] B.C.J. No. 2950, 2002 BCCA 703 and
R. v. Autenreith
, 
    [2003] B.C.J. No. 2291, 2003 BCCA 521.

However, in cases of serious fraud or serious theft where 
    there are extreme personal mitigating circumstances, the courts have held 
    that the principle of general deterrence can be satisfied by a conditional 
    sentence: see
R. v. Bunn
, [2000] 1 S.C.R. 183,
R. v. Kratky
, 
    [1997] B.C.J. No. 3167 BCSC and
R. v. Anderson-Davis
, [2000] 
    B.C.J. No. 88, 2000 BCSC 42.

[12]

The trial judge proceeded exactly as mandated by
Dickson
, 
    and by
R. v.

Proulx
, [2000] 1 S.C.R. 61, which 
    she cited (at paras. 44 and 45) for the principles that an offender should 
    not be sentenced to jail if less restrictive sanctions may be appropriate 
    in the circumstances, that denunciation and deterrence may be addressed by 
    a longer conditional sentence with onerous terms, and that incarceration will 
    generally be the preferable sanction to express denunciation and to deter 
    others from similar conduct.

[13]

She reviewed the aggravating features of the offences.  These were: 
    the offences were serious, perpetrated on vulnerable victims (at para. 16); 
    the appellant used promotional tactics, recruiting known and trusted individuals 
    in their communities to at act as attractive magnets for other investors 
    (at para. 17);  the sheer multiplicity of offences which occurred over a lengthy 
    period of time, at different locations through the country, over a period 
    of four years, involving different individuals (at para. 22); the appellant 
    had previous convictions for securities offences in Alberta, Saskatchewan, 
    and Manitoba, where he pled guilty to 80 offences committed between 1990 and 
    1993 (at para. 24).  She found that the appellant did not have any real insight 
    into the impact of his actions on the complainants, nor did he understand 
    the criminal nature of his actions.

[14]

She also referred to the mitigating factors.  These were that the appellant 
    had no criminal record, and was apparently a married family man (at para. 
    29).

[15]

She concluded her consideration of the alternative of a conditional 
    sentence (at para. 47):

Again, given the circumstances of this case, the amounts 
    involved, the number of victims, the period of time over which the offences 
    were committed, the type of promotion used and the accuseds own history in 
    the securities industry, I am not satisfied the principles of deterrence and 
    denunciation can be satisfactorily addressed by the imposition of a conditional 
    sentence.

[16]

The sentencing judge did not separately consider the restitution orders 
    in the context of whether a conditional sentence would be appropriate.

[17]

The Crown argues that the restitution orders in this case were not 
    significant factors in the determination of whether a conditional sentence 
    was appropriate in the circumstances, and did not require express consideration 
    in that context.

[18]

In
Siemens
, the Court commented (at para. 8(1):

In 
    some cases, a restitution order will be a significant factor, while in others 
    it will be trivial, depending on the circumstances, but it must be included 
    as a factor in the totality of the punishment imposed.

And 
    at para. 8(4) said:

The 
    shorter the sentence, the more likely it will be that a restitution order 
    will be appropriate.  Where the amount is manageable, there is every reason 
    to impose an order of restitution when a sentence either does not involve 
    imprisonment or is so short that it does not affect the offenders employment 
    or the sentence can be served conditionally.  Conversely, as an incarceratory 
    sentence becomes longer, the futility of an order of restitution will become 
    increasingly apparent.

[19]

Based on these principles a restitution order may be a factor in the 
    determination of the appropriateness of a conditional sentence, bearing in 
    mind that a restitution order provides a measure of denunciation and deterrence.  
    It is not an error in principle, however, not to expressly consider it.  The 
    sentencing judge in this case expressly reduced the length of the jail sentences 
    to reflect the effect of the restitution orders.

[20]

In my opinion, the aggravating factors overwhelmed the mitigating factors 
    in this case to such a degree that they mandated imprisonment for these serious 
    offences: see
Dickson
at para. 35;
R. v. Mohebtash
, 
    2007 BCCA 427 at para. 10.  The sentencing judge properly emphasized the need 
    for denunciation and deterrence, and took into account the proper principles, 
    including the reduction required as a result of the restitution orders, in 
    determining the length of the sentences.

[21]

In the result, I would dismiss the appeal.

[22]

FINCH, C.J.B.C.
: I agree.

[23]

CHIASSON, J.A.
: I agree.

[24]

FINCH, C.J.B.C.
: Leave to appeal is granted.  The appeal is dismissed.

The Honourable 
    Madam Justice Levine


