



COURT OF APPEAL FOR ONTARIO

CITATION:

R. v. McLellan, 2012
    ONCA 717

DATE: 20121026

DOCKET: C51797 & C54990

Rosenberg, Blair and Tulloch JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Myles McLellan

Appellant

Myles McLellan, acting in person on the conviction
    appeal

Patrice F. Band and Shannon S.W. OConnor, for the
    appellant on the sentence appeal

Scott Latimer, for the respondent

Heard: August 17, 2012

On appeal from the conviction entered by Justice Anne
    Mullins of the Superior Court of Justice, sitting without a jury, on October 9,
    2009, and from the sentence imposed on March 10, 2010.

Tulloch
    J.A.:

Overview

[1]

The appellant appeals both his conviction and sentence. However, his conviction
    appeal is limited to the December 4, 2008 decision of Ferguson J., dismissing
    his s. 11(b) application for a stay of proceedings due to unreasonable delay:
R.
    v. McLellan,
2009 CanLII 30968 (Ont. S.C.).

[2]

At issue for the conviction appeal is whether the application judge
    erred in holding that his right to be tried within a reasonable time had not
    been violated.

[3]

The appellant also seeks leave to appeal his sentence on the basis that
    the trial judge erred in failing to impose a conditional sentence because she
    underemphasized certain mitigating factors, overemphasized deterrence  and
    denunciation, and failed to consider the principle of restraint in the
    circumstances of a first time offender.  The appellant also disputes the trial judge's
    finding that he lacked remorse and insight into the harm caused by his crimes.

[4]

In addition, the appellant has filed a fresh evidence application,
    adducing fresh evidence with respect to the issues of restitution, his
    continued education, and his wifes health issues and her dependency on him for
    assistance.

[5]

For the reasons that follow, I would dismiss the conviction appeal. I
    would allow the appellants application to admit fresh evidence and based on
    that evidence, I would grant leave to appeal the appellant's sentence, and
    would allow the appeal against sentence to the extent that I would vary the
    sentence of 22 months incarceration, less time served of 8 months, to a global
    sentence of 16 months incarceration less time served of 8 months.

Factual Background

[6]

On October 9, 2009, the appellant, Mr. Myles McLellan, was convicted of
    fraud over $5,000.00, forgery, and two counts of uttering forged documents. The
    convictions arose from conduct that took place between January 1st and May 31st,
    2006.

[7]

Mr. McLellan was a practising lawyer who had been called to the bar in
    1980. He practiced real estate, wills and estate law in Simcoe County, and had
    offices in Barrie, Innisfil and for a time, in Angus. He also engaged in real
    estate development.

[8]

As of January 2006, Mr. McLellan was experiencing financial
    difficulties. The properties that he owned, including his home, his cottage, a
    residential property he inherited from his father, his business premises, as
    well as his investment retirement home, were all subject to multiple collateral
    mortgages and principal debts. The retirement home did not have enough money to
    meet its financial obligations and had been in receivership since July 2005. In
    early 2006, he was actively seeking refinancing in order to regain control of this
    property.

[9]

During this period, Mr. McLellan contacted Mr. Alan Feldman, a mortgage
    consultant he knew in Toronto, and indicated that he had an employee, Ms. Janet
    Laurin, who wished to place a first mortgage on her property.  He advised that
    Ms. Laurin needed the money quickly and that he would personally guarantee the
    debt.  In reality, however, Ms. Laurin already had a first mortgage registered
    on her property, which Mr. McLellan had assisted her in obtaining in 1993.  She
    had also refused Mr. McLellans previous request that she obtain a second
    mortgage in order to assist him with his ongoing business dealings.

[10]

In
    February 2006, Mr. Feldman introduced Mr. McLellan to Mr. Sam Klaiman, who was
    the owner of Homark Real Estate Ltd. in Toronto. Mr. Klaiman was eighty-five
    years old and semi-retired. His company invested by providing loans that were
    secured by mortgages on real property. Based on Mr. McLellans representations,
    Homark agreed to forward $150,400 in return for a first mortgage on Ms.
    Laurins property. On February 23, 2006, that amount was deposited in Mr.
    McLellans trust account, where it was quickly dispersed for his own financial
    purposes.

[11]

In
    the weeks that followed, Mr. Klaiman and his lawyer made several requests for
    documentation that demonstrated Homarks mortgage on Ms. Laurins property.  After
    a protracted period of time, Mr. McLellan eventually provided a charge/mortgage
    document that purported to show that a mortgage had been registered in Homarks
    name on Ms. Laurins property. However, when Mr. Klaimans lawyer investigated
    the charge document, he determined that it was a forgery. Steps had been taken
    to alter a legitimate charge/mortgage document, referable to one of Mr.
    McLellans other clients, to make it appear that Homark Real Estate possessed a
    valid mortgage against Ms. Laurin's property.  The police were subsequently
    notified and the he was arrested for fraud.

[12]

After
    his arrest, Mr. McLellan took steps to repay what he had stolen. He provided
    $50,000 in cash to Homark in May 2006.  Prior to the sentencing hearing, a
    civil settlement had been reached regarding repayment of the outstanding
    amount.

[13]

The
    matter proceeded to trial following a preliminary hearing in the Ontario Court
    of Justice, but after the first trial date had been set, Mr. McLellan brought a
    s. 11(b) motion.

[14]

The
    application judge dismissed the s. 11(b) application, finding that the total
    amount of time the matter took to proceed to trial of 27 ½ months was not
    unreasonable in the circumstances. The matter eventually proceeded to trial,
    however Mr. McLellan fired his counsel and was granted a mistrial.  A
    subsequent trial date was set, following which Mr. McLellan was found guilty
    and convicted on four counts.  He received a global sentence of 22 months
    incarceration, less eight months credit for pre-trial custody and time spent
    on stringent bail conditions.

A.

Appeal from dismissal of
s
. 11(
b
)
    application

[15]

The
    appellant submits that the application judge did not undertake a balanced
    examination of the entire time period at issue, and instead applied a technical
    and narrow analysis of discrete periods of time.  He raises three specific
    grounds of appeal: that the application judge erred in attributing 9 ½ months
    of time in the Ontario Court of Justice to inherent delay; that she erred in
    holding the defence responsible for the 3 ½ months following his pre-trial
    appearance before the Senior Regional Judge to address his delay concerns; and
    that she erred in her assessment of prejudice.

[16]

I
    disagree with the submissions of the appellant.  The application judge was
    correct in her characterization of the delay and I agree with her decision to
    dismiss the s. 11(b) application. In my view, there is no merit to this ground
    of appeal. The application judge was very thorough in her assessment of the
    various time periods in the proceedings of the case, and she applied the
    factors set out in
R. v. Morin,
[1992] 1 S.C.R. 771 correctly.  I
    agree with her characterization of the time periods as well as her broader
    analysis that led to her ultimate dismissal of the delay application.  Further,
    her finding that any prejudice suffered by the appellant was as a result of
    being charged and not due to subsequent delay was reasonable.

[17]

The
    applicable systemic delay was well below the guidelines set out by the Supreme
    Court in
Morin
.  Therefore, I do not find the statistical data
    submitted by the appellant on appeal to be relevant to the disposition of the
    appeal.  It concerns the average length of cases in regions across Canada and
    institutional efforts to reduce delays.  The analysis of the specific reasons
    for delay in this case has shown that the time frame was reasonable in the circumstances. 
    A broader review of delay in Ontario courts is therefore not necessary in this
    case.

[18]

Accordingly,
    the conviction appeal is dismissed.

B.

Sentence Appeal

(1)

Positions of the
    Parties

[19]

The
    trial judge sentenced the appellant to 22 months in jail, less the eight months
    he was granted for pre-trial custody and bail conditions. The appellant submits
    that he should have received a conditional sentence for a shorter time period
    and submits that the trial judges failure to impose such a disposition amounts
    to the commission of multiple of errors in principle.  He submits that the
    trial judge committed the following errors: underemphasizing the principle of
    restraint in sentencing a first time offender; overemphasizing the principles
    of general deterrence and denunciation and as a result disregarding important
    mitigating factors; overemphasizing the necessity of imposing a jail sentence
    to achieve general deterrence; and characterizing what she found to be a lack
    of remorse as an aggravating factor.  Finally, he submits that the 22 month
    sentence of incarceration was demonstrably unfit in the circumstances.

(2)

Analysis

[20]

I
    disagree that the trial judge committed the errors in principle complained of
    by the appellant within the context of this case.

[21]

I
    am satisfied that the trial judge considered all the relevant factors
    applicable to the appellants particular circumstances and the nature of the offences
    for which he was being sentenced.

(a)

Mitigating and
    Aggravating Factors

[22]

The
    trial judge was thoroughly cognizant of the particular circumstances and
    background of the appellant.

[23]

She
    considered the appellants age and education, his status as a father and
    partner, and his lack of criminal record.  She reviewed the testimonials
    regarding his trustworthiness and reliability, as well as his community
    involvement and his prompt efforts to make restitution.  She considered that
    there had been one primary victim within a relatively brief course of
    misconduct, in circumstances of extraordinary financial pressures, which did
    not amount to a systemic fraudulent scheme against the vulnerable.

[24]

Finally,
    she took into account his physical health challenges of cancer and a severe
    bladder issue, as well as his longstanding mood disorder, which caused periods
    of depression and difficulty in making clear business judgments.  She
    acknowledged that these mental health challenges may have impaired his
    judgment.

[25]

However,
    the trial judge also noted the seriousness of the offences for which the
    appellant was being sentenced. She found that they constituted a serious breach
    of trust, committed by a practicing lawyer who deceived an 85 year-old man to
    obtain a large sum of monies from his company and in so doing, forged and
    uttered documents and made false statements in writing in order to facilitate
    the fraud.

[26]

The
    trial judge correctly observed that crimes such as the one for which the
    appellant was being sentenced impact the community in a profound and
    significant way. Quoting from the decision of Taliano J. in
R. v. Gross
, [2000] O.J. No. 3479 (S.C.),
at paras.
    16 to 18, she noted that public confidence in the reliability of financial
    transactions conducted by lawyers is eroded where, as here, a lawyer breaches
    the trust he owes to his clients and to his community.

[27]

This
    court and other Canadian appellate courts have dealt with the significance and
    impact of lawyers who commit fraudulent breaches of trust within the context of
    their professional capacities. The primary sentencing principle at play in
    these types of cases is general deterrence and denunciation, or the repudiation
    of the conduct for which the offender was found guilty. The secondary
    considerations are specific deterrence, rehabilitation and any mitigating
    circumstances such as a plea of guilty or cooperation with the authorities:
R.
    v. Scherer
(1984), 16 C.C.C. (3d) 30
(Ont. C.A.), at p. 34.

[28]

Doherty
    J.A. outlined why an offenders status as a lawyer is a significant aggravating
    factor in
R. v. Rosenfeld,
2009
    ONCA 307, 94 O.R. (3d) 641,
at para. 40:

[A]part from the specifics of the offences committed by the
    appellant, those privileged to practise law take on a public trust in exchange
    for that privilege and the many advantages that come with it. Lawyers are duty
    bound to protect the administration of justice and enhance its reputation
    within their community. Criminal activity by lawyers in the course of
    performing functions associated with the practice of law in its broadest sense,
    has exactly the opposite effect.  Lawyers like the appellant who choose to use
    their skills and abuse the privileges attached to service in the law not only
    discredit the vast majority of the profession, but also feed public cynicism of
    the profession. In the long run, that cynicism must undermine public confidence
    in the justice system: see
R. v. Oliver
, [1977] 5 W.W.R. 344
    (B.C.C.A.).

[29]

Therefore,
    I agree with the trial judge that, notwithstanding the appellants personal challenges
    and triumphs, and despite his reputation in his community and his past good
    works, the fact that he is a lawyer who has used his professional capacity to
    facilitate the crimes for which he has been convicted is a significant aggravating
    factor.

(b)

Conditional Sentence

[30]

The
    trial judge noted that as a matter of principle a breach of trust by a
    professional does not preclude the granting of a conditional sentence, even in
    circumstances of extensive pre-planned conduct over a lengthy period of time
    with devastating consequences to vulnerable victims. She then considered the
    mitigating factors of the appellants case, as noted above, and went on to
    consider the aggravating factors, the most significant of which was the
    appellants breach of trust as a lawyer.

[31]

The
    trial judge further stated that she found the appellant to lack remorse and
    insight, as illustrated by the appellants attempt to blame Ms. Laurin for his
    offence.  She considered these to be aggravating factors that militated against
    a conditional sentence.

[32]

Lack
    of remorse is not ordinarily an aggravating factor in sentencing, and courts
    ought to be very careful in treating it as such: see
R. v. Giroux
(2006),
    207 C.C.C. (3d) 512 (Ont. C.A.), at para.
68;
R. v.
    Valentini
(1999), 132 C.C.C. (3d) 262 (Ont. C.A.), at para.
82.  In
    my view, a fair reading of the trial judges comments indicates that she was
    solely addressing the issue of whether a conditional sentence was appropriate,
    and not the quantum of the sentence.

[33]

Lack
    of remorse and insight are factors that the trial judge was entitled to take
    into account in considering the appropriateness of a conditional sentence: see
R.
    v. Nguyen
, [2006] O.J. No. 796 (C.A.);
R. v. T.R.J.
, [2004] O.J.
    No. 1286 (C.A.).  The presence or absence of remorse and an assessment of
    whether an individual displays insight into his or her offending conduct are
    relevant considerations for a trial judge in deciding whether a conditional
    sentence will be consistent with the purposes and principles of sentencing.

[34]

Section
    718(f) of the
Criminal Code
,
    R.S.C. 1985, c. C-46
states that a valid sentencing objective is to
    promote a sense of responsibility in offenders, and acknowledgement of the
    harm done to victims and to the community.

[35]

The
    trial judge ultimately decided that imposing a conditional sentence was
    inappropriate in the circumstances of this case. She gave full consideration to
    the relevant factors as well as the leading authorities from this court. In so
    doing, she did not err in principle in imposing a custodial sentence:
R. v.
    Bellefeuille
, [2003] O.J. No. 4259 (C.A.);
R. v. St. Fort
, [2003]
    O.J. No. 5154 (C.A.).

[36]

Further,
    I do not find that the trial judge erred in finding a lack of remorse on behalf
    of the appellant.  The trial judges finding must be understood within the
    context of her perception of the appellants lack of insight into his conduct.
    In considering the appropriateness of a conditional sentence, the trial judge
    had to consider the totality of the evidence before her. This included the
    evidence of the appellant at trial, where he blamed his fraudulent conduct on
    his legal assistant, Ms. Laurin, as well as the evidence that the appellant
    unsuccessfully attempted to enlist Ms. Laurin into his fraudulent scheme.

[37]

The
    primary sentencing principles of general deterrence, denunciation, and the
    public perception of justice are most appropriately addressed in this case by a
    sentence of incarceration. In
R. v. Sahaidak
, [1990] O.J. No. 2792
    (H.C.), Doherty J., as he then was, imposed a three-year custodial sentence on
    a lawyer convicted of fraud for his participation in a fraudulent mortgage
    scheme.  Doherty J.s comments, at para. 11, apply to the facts of the present case:

If my job was to sentence Mr. Sahaidak, the man, and if my
    sentence did not have to concern itself with the details of the crimes, and if
    I didnt have to be concerned for the effect of my sentence on others and the
    effect of my sentence on the public perception of justice, I would impose a
    most lenient sentence in recognition of Mr. Sahaidaks positive antecedents,
    his contribution to the community, and perhaps most importantly to save his
    family from further pain. My concerns and responsibilities on sentencing,
    however, go beyond the antecedents of Mr. Sahaidak and considerations of what
    sentence is in his best interest and the best interest of his family.

(c)

Fresh Evidence

[38]

Finally,
    the appellant applies to introduce fresh evidence on appeal in the following
    three areas: i) his pursuit of higher education; ii) his caregiver status; and
    iii) his efforts at restitution. The three aspects of fresh evidence are
    summarized as follows.

[39]

First,
    the appellant returned to law school after his licence to practice law was
    revoked.  He has now completed an LL.M.  He has also completed the first year
    of a Ph.D. program in criminology at the University of Ottawa, and has been
    accepted into a double Ph.D. program which includes a period of study in
    Scotland.  The appellant submits that these efforts at self-rehabilitation
    should be considered as a mitigating factor.

[40]

Second,
    the appellants wife explained in her affidavit that she depends on the
    appellant as her primary caregiver.  She was forced to suspend her work as a
    registered nurse due to a series of health concerns, including back injury,
    fibromyalgia, a stroke and depression. She is currently not receiving unemployment
    benefits.

[41]

Third,
    while the trial judge noted that the appellant had made $50,000 in restitution,
    she went on to state that it was unlikely given the multilayered securities on
    his properties that the appellant would ever repay the full amount of the
    fraud. The fresh evidence makes it clear that the second mortgage in favour of
    the victim was not subject to other multilayered security interests. In the
    result, there was a reasonable prospect that full restitution would be made to
    the victim.  This was an important mitigating circumstance. I am satisfied
    that had the trial judge been aware of the true state of affairs respecting
    restitution, she would have imposed a lower custodial sentence.

[42]

However,
    the trial judge did not have before her evidence of the terms of the civil
    settlement between the appellant and Mr. Klaiman, nor did she have evidence of the
    title register for the property upon which the security was registered. The fresh
    evidence introduced on appeal shows that the appellant agreed to secure the
    outstanding $100,400 in the form of a second mortgage in favour of Mr. Klaiman,
    which is registered against the appellants Innisfil property. This evidence
    further shows that all but one of the other mortgages on the property have been
    discharged.

[43]

I am not satisfied that the evidence of the
    appellants pursuit of higher education or his role in providing for his wife
    justifies interfering with the sentence imposed by the trial judge. The appellant
    was already a highly educated individual prior to committing the offences in
    question.  The evidence concerning his role in providing for his wife does not
    justify a reduction in sentence, particularly considering that his capacity to
    support his wife is limited by his current status as a student and by his plans
    to study abroad.

[44]

However, I am satisfied that the new evidence
    regarding his efforts at restitution would have resulted in a reduced sentence
    had the trial judge been aware of this evidence.
An offenders ability
    and willingness to pay restitution is an important consideration in the
    sentencing o
f fraud and related offences: see
R. v.
    Smolyar,
[2003] O.J. No. 3542;
R. v. Chamczuk,
2010 ABCA 380, 499
    A.R. 212;
R. v. Quinlan
(1999), 173 Nfld. & PE.I.R. 1 (Nfld.
    C.A.). The trial judge credited the appellant for his prompt efforts at making
    restitution. I am satisfied that if the trial judge had before her the fresh evidence
    demonstrating that the appellant placed a second mortgage on his property in
    favour of Mr. Klaimans company, which interest was not subject to other multilayered
    security interests, she would have imposed a lower custodial sentence.

[45]

The
    fresh evidence of the appellants laudable efforts at providing restitution to
    the victim lead me to conclude that the appropriate length of sentence is 16
    months incarceration, less time served for pre-trial custody.

(3)

Conclusion

[46]

Accordingly,
    leave to appeal the sentence is granted. The sentence appeal is allowed and the
    sentence is varied to 16 months incarceration, less time served of 8 months
    for pre-trial custody.

Released:

MR                                                  M.
    Tulloch J.A.

OCT 26 2012                                   I
    agree M. Rosenberg J.A.

I
    agree R.A. Blair J.A.


