R.v. O'Keefe, 1988 CanLII 5394 (NL SC)
Newfoundland Supreme Court
Trial Division
Citation: R. v. O'Keefe
Date: 1988-11-08
Docket: 1987 No. G-253
Between:
R.
and
Patrick Alphonses O'Keefe
Barry, J.
Counsel:
Michael Chandler, for the Crown;
Graham Watton, for the accused.
[1] Barry, J.: The charge against the accused is that between the 1st day of August 1986 and the 21st day of August 1986 at or near Gander, Newfoundland, he did steal money, the property of Lawton's Drugs of a value exceeding $1,000.00 contrary to s. 294(a) of the Criminal Code of Canada (the Code).
[2] Lawton's Drugs is a pharmacy firm which operates a chain of drug stores throughout Newfoundland and elsewhere in Canada with a branch office in Gander in which it is engaged in the sale of drugs and other products. Its store at Gander was under a type of co-managership, i.e., that of the accused, who was specifically in charge of the pharmacy aspect of its business and Karen Walsh, who was in charge of the sale of the remainder of its nonprescription drugs and other goods. She was known as the front store manager. While both shared responsibility for the operation of the store as a whole, it appears that the accused was the Benior person in the store and Benior in authority in the eyes of the company.
[3] Karen Walsh's duties included overall supervision of the operation of the front store and its staff and overseeing all of the paper work respecting the accounts of the store. In particular, she was responsible for the balancing and depositing of cash receipts and the balancing of petty cash. There were three cash registers in the store and three cashiers to operate them. At the end of each day the cashier of each register would place all of the cash received by her in a bag and hand it over to Ms. Walsh, who would check to ensure that it balanced with the register tabulation. The cash was then usually held in the company's safe in the store that night for deposit in the bank at about 4 p.m. the next day. It would then be brought to the bank after the amount of monies in the deposit had been finally determined. The sum of $100.00 would be held out of the deposit to be returned to each cash register for change. This would become part of a petty cash fund of $800.00 consisting of small bills and coins, which would be kept out for operating expense and change. This was known as a float. The reason given for holding cash receipts for deposit until 4 p.m. the day following its receipt rather than in the morning of that day was to allow the cashiers to provide amounts of change in small bills and coins which may be contained in those funds. Such monies removed from receipts of the previous day was called a "skim" and would be replaced by bills for larger sums to keep the total amount of the deposit intact.
[4] Ms. Walsh went on vacation in mid-August 1986 and in her absence her responsibilities were taken over by Charmaine Rose, the head cashier in the store. Shortly before she went away, however, the accused had cashed a cheque for $250.00 out of the cash receipts in the store and had asked Ms. Walsh to keep the cheque out of the monies to be deposited for that day until he would let her know it was safe to deposit it. Accordingly, the cheque was held in petty cash along with other monies used for change. She declared that she understood it to be a company policy that cheques for employees or customers were not to be cashed out of store receipts. However, in practice, her experience was that employees and customers were permitted to cash cheques and did so from time to time.
[5] In Ms. Walsh's absence, Ms. Rose checked the cash receipts every day and balanced them with the registers and deposited funds, less petty cash, in the bank. She declared that she was aware that it was company policy that cheques for employees and customers were not to be cashed out of store receipts. The practice, however, she stated, was that cheques were frequently changed for customers and employees.
[6] On Saturday, the 16th day of August, while Ms. Walsh was on vacation, Ms. Rose recalled that the accused placed a cheque for $250.00 in the cash receipts for that day and asked her not to put it with the bank deposit monies for Monday as he could not cover it. She did as he requested and kept it in petty cash. On the following Monday she asked the accused about the cheque. He said he had not had time to get to the bank to cover it that evening and asked her to keep it out of the bank deposit again. She did so and the following morning, i.e., Tuesday, the cheque was still in the cash receipts, but the amount had been changed in ink, i.e., increased by $50.00. Upon his request, she held it out of the deposit for that day. The morning, i.e., Wednesday, she found a new cheque signed by the accused was in its place for the Bum of $900.00. Once more he asked her not to put it with the bank deposit. And in compliance, she kept it out of the deposit at the bank for that day. That evening she noticed that the cheque had been increased to $1,200.00, and when checking her cash she found a shortage of $100.00. She declared that she spoke to the accused about it and that he advised her not to worry about it. He then changed the amount of the cheque again, increasing it by another $100.00. In altering the amount of the cheque on each occasion, he would scratch out the amount stated in it and write on it the increased sum in figures and letters.
[7] By this time Ms. Rose had become quite concerned that she herself might become implicated in some way in what was happening with the accused's cheques, and in consequence she contacted the company's head office and informed the district manager about what had occurred. The next day the district manager, Ken Mercer; Gary Pike, the company's controller; and Mr. Ken LeGrow, the general manager came to Gander and called at the drug store. She explained to them what had occurred and showed them the accused's cheque. By this time a cheque for $1,800.00 had turned up in cash on hand in replacement of the cheque which had been there for the amount of $1,300.00 and an additional amount of $500.00. It appears that when the accused issued the cheque for $1,800.00 to cover all monies taken out by him, he had forgotten to remove the previous cheque.
[8] Mr. Mercer testified that he had received a few calls from Ms. Rose about the accused's cheques which she had found in her cash receipts. The company's policy, he declared, was that there was to be no cashing of cheques by employees out of store cash receipts. This rule, however, had been breached from time to time by employees, including the accused, without any corrective or punitive action being taken by the company. Mercer declared that on one occasion he and Gary Pike, the company controller, came to Gander to see the accused about this matter when the cheques he had cashed amounted to $750.00. Mercer spoke to the accused, reminding him of the company's policy with respect to cashing cheques and requested that he desist from so doing in future. He stated that the accused declared to him that he would not cash any further cheques out of the company's cash receipts. He had kept the general manager, Ken LeGrow, informed about the accused's practice of cashing cheques out of company funds and LeGrow requested him to let it go for a while and if the amount of the cheques cashed reached an unacceptable level in his, i.e., Mercer's, judgment, then something would have to be done about it.
[9] However, upon receiving a further call from Ms. Rose advising the amount of cheques cashed by the accused in company receipts had now exceeded $1,200.00, he felt that that sum was beyond the limit which the company would tolerate. Accordingly, he came to Gander accompanied by LeGrow and Pike. Upon examining the cash receipts, he saw the accused's cheque for $1,800.00 and brought it to the accused's bank, i.e., Central Trust, to get it certified. Certification of the cheque was refused, however, on the ground that there were insufficient funds in the accused's account to cover it. On his return to the store he and the other two officials of the company met the accused and questioned him about his ability to find monies to pay the $1,800.00 cheque. The accused replied that it would be honoured by the bank upon presentation. Mercer and Pike accompanied him to Central Trust Bank, but upon presenting the cheque for payment, they were advised that it would not clear because of insufficient funds. On the same occasion the accused called upon Parsons for a decision upon his application for a loan and was advised that it would not be granted.
[10] Gary Pike also testified and declared that the accused's salary plus his vacation pay would be a sum between $1,100.00 and $1,200.00, not enough to cover the amount of the $1,800.00 cheque plus a small charge for items of goods which he had purchased.
[11] In his testimony, Paul Parsons, manager of Central Trust, declared that the accused opened an account at his bank on July 4, 1986, and that while it was in operation, it constantly fluctuated between credit and debit balances. On August 14, a cheque for $250.00 came in to be paid out of it but was returned to the remitter because of insufficient funds in the account to cover it. In fact, on that day he had a debit balance of $1,133.31. On the following day two deposits were received to give him a credit balance of $96.25.
[12] Parsons confirmed that sometime in August, a week or two before the arrival of Mercer and his associates, the accused had applied to his bank for a loan of money which he thought was about $2,000.00, and that the accused had offered to provide as security for repayment a satisfactory co-signer who resided at St. John's. In fact, Parsons spoke to the person so proposed, i.e., Donald Davis, by telephone and told him he could go to the bank's branch at St. John's and fill out the certain forms which would elicit the information the bank required in order to determine if the person was acceptable as a co-signer.
[13] The accused's friend, Davis, the resident manager of the St. John's branch office of Richardson Green-shields, a national brokerage firm, testified on behalf of the Crown. Davis declared that the accused had been involved in a personal bankruptcy early in 1986 and that he had helped the accused at that time to reestablish himself and get his affairs in order again. Subsequently, he had agreed to sign a promissory note for the accused to help him obtain a loan to buy a car, but the accused later informed him that the money would not be needed, because he had changed his mind about that purchase. He declared that more recently he had promised to co-sign a promissory note at Central Trust for the sum of $3,000.00, which the accused wished to borrow if the terms of the loan were reasonable. He stated that he had spoken to Paul Parsons of the Gander branch bank of Central Trust and informed him he was prepared to co-sign a promissory note for the accused in those circumstances. Parsons informed him that it was not necessary to come to Gander for that purpose but that the necessary documents could be signed at the Central Trust office in St. John's. Davis waited a few days and called at the office of Central Trust and was informed that no instructions or documents had been received there from its Gander branch relating to the proposed loan. He then left town on business for a few days and on his return he called again at Central Trust. This time he was advised that the company had decided not to grant the loan. It happened that its refusal to grant the loan occurred shortly after Mercer had called at the bank to certify the accused's cheque for $1,800.00, on the same day.
[14] Counsel for the Crown had declared that all of the ingredients for the offence with which the accused has been charged were present in the evidence it had adduced. These Ingredients are:
1. The accused converted monies of Lawton's Limited to the amount of $1,800.00 to his own use by taking them from the petty cash fund.
2. That the taking of the property from Lawton's Limited was done fraudulently and without colour of right.
3. That such taking was done with intent to deprive the owner of these monies whether temporarily or absolutely.
[15] The defence argued that:
1. The accused cashed his cheque in company funds under colour of right in that he had reason to believe the money to cover it would be in the account when it was deposited, and that this honest belief would support the defence that he had done so under colour of right.
2. He had cashed cheques in company funds without intent to deprive the company of the money, either temporarily or permanently.
3. That knowing the accused was cashing cheques contrary to company policy, the company refrained from taking action until the amount involved was over $1,200.00, thus indicating a continued tolerance of that practice and a policy of not enforcing its own policy forbidding such conduct, despite its request to the accused to stop that practice.
4. That the accused had no intent to defraud the company but that he had reason to believe the cheque would be honoured when his loan was approved.
[16] The following are the relevant sections of the Code pertaining to the charge of the accused:
"2 'steal' means to commit theft;
"238(1) Every one commits theft who fraudulently and without colour of right takes, or fraudulently and without colour of right converts to his use or to the use of another person, anything whether animate or inanimate, with intent,
(a) to deprive, temporarily or absolutely, the owner of it or a person who has a special property or Interest in it, of the thing or of his property or interest in it,
(b) to pledge it or deposit it as security,
(c) to part with it under a condition with respect to its return that the person who parts with it may be unable to perform, or
(d) to deal with it in such a manner that it cannot be restored in the condition in which it was at the time it was taken or converted.
"238(2) A person commits theft when, with the intent to steal anything, he moves it or causes it to move or to be moved, or begins to cause it to become movable.
"294 Except where otherwise provided by law, everyone who commits theft
(a) is guilty of an indictable offence and is liable to imprisonment for a term not exceeding ten years, where the property stolen is a testamentary instrument or where the value of what is stolen exceeds one thousand dollars,
(b) is guilty
(i) of an indictable offence and is liable to imprisonment for two years, or
(ii) of an offence punishable on summary conviction,
where the value of what is stolen does not exceed one thousand dollars ."
[17] The accused's counsel has referred to the following words stated by Constable S.B. Sibley at the commencement of the voluntary statement of the accused after he had given him the standard police caution:
"We are investigating a complaint of false pretences made by the manager of Lawton's Drugs in Gander while you were working there in August 1986."
He alleged that at the time of its investigation the police had considered laying a charge of false pretences against the accused, not a charge of theft. He maintained that the evidence did not support a charge of theft; although there may have been grounds for suspecting commission by the accused of the offence of obtaining money by false pretences or fraud. If the offence alleged to have been committed was that of obtaining monies through the issuance of a cheque when the accused knew there were Insufficient monies in his account to honour it, the offence committed then was one under ss. 320(l)(a) and (c)(vi) and (4) of the Code, which read as follows:
"320(1) Every one commits an offence who
(a) by a false pretence, whether directly or through the medium of a contract obtained by a false pretence, obtains anything in respect of which the offence of theft may be committed or causes it to be delivered to another person; ...
(c) knowingly makes or causes to be made, directly or indirectly, a false statement in writing with intent that it should be relied upon, with respect to the financial condition or means or ability to pay of himself or any person, firm or corporation that he is interested in or that he acts for, for the purpose of procuring, in any form whatever, whether for his benefit or the benefit of that person, firm or corporation, ...
(vi) the making, accepting, discounting or endorsing of a bill of exchange, cheque, draft, or primissory note; ...
"320(4) Where, in proceedings under paragraph (l)(a), it is shown that anything was obtained by the accused by means of a cheque that, when presented for payment within a reasonable time, was dishonoured on the ground that no funds or insufficient funds were on deposit to the credit of the accused in the bank or other institution on which the cheque was drawn, it shall be presumed to have been obtained by a false pretence, unless the court is satisfied by evidence that when the accused issued the cheque he had reasonable grounds to believe that it would be honoured if presented for payment within a reasonable time after it was issued."
[18] The maximum penalties provided for an offence under s. 320 and the one charged herein are the same, i.e., 10 years imprisonment and the offences themselves are similar in that in both instances owners of property are deprived of it by the offender who converts it to his own use. However, in the case of an offence under s. 320(1) the owner is deprived of money by the offender by a false pretence, i.e., the issuance of a cheque for which there is no money in the bank to cover it. One important difference between the two is that s. 320(4) provides a defence which is not open to a person charged with theft under s. 283. Although there is a presumption created in that section that a person who issues a cheque which is later returned N.S.F. obtained the money received by a false pretence, that presumption is stated not to apply where the court is satisfied by evidence that when he issued the cheque he had reasonable grounds to believe it would be honoured if presented within a reasonable time after it was issued. It was open to the Crown to lay a charge against the accused under s. 320, which created the offence of obtaining monies by the issuance of cheques where there was insufficient funds in the issuer's bank account to pay it. Whatever its prospects may have been to prove that the accused had committed an offence under s. 320, in my view, its burden of proving that the accused stole the money which he obtained from the petty cash fund under s. 283 is a much different onus.
[19] The distinction between the two charges was the subject of a comment by Lawton, L.J., in R. v. Feely, [1973] 1 All E.R. 341. He referred to the case of R. v. Cockburn, [1968] 1 All E.R. 466, which had previously dealt with that question. In that case the manager of the shop took money from the till intending, so he said, to replace it with a cheque, but before doing so he was dismissed from service. Winn, L.J., declared that if a sum of money was taken in those circumstances with the Intention of replacing it, nevertheless, larceny had been committed. In refusing to follow that decision Law-ton, L.J., said at page 348:
"If the principle enunciated in R. v. Cockburn was right, there would be a strange divergence between the position of a man who obtains cash by passing a cheque on an account which has no funds to meet it and one who takes money from a till. The man who passes the cheque is deemed in law not to act dishonestly if he genuinely believes on reasonable grounds that when it is presented to the paying bank there will be funds to meet it: see Halstead v. Patel, per Lord Widgery, C.J. But, according to the decision in R. v. Cockburn, the man who takes money from a till intending to put it back and genuinely believing on reasonable grounds that he will be able to do so (see per Winn, L.J.) should be convicted of theft. Lawyers may be able to appreciate why one man should be adjudged to be a criminal and the other not; but we doubt whether anyone else would. People who take money from tills and the like without permission are usually thieves; but if they do not admit that they are by pleading guilty, it is for the jury, not the judge, to decide whether they have acted dishonestly."
In that case the appellant was employed as a branch manager of a firm of book makers. His employer sent a circular to all of its branch managers stating that the practice of borrowing from the shop tills was to stop. A month later the appellant borrowed 30 pounds from the till at his place of work and left an I.O.U. in it for that amount. Four days later he was transferred to another branch and the shortage was discovered. He declared that he intended to repay the money and that his employer had owed him more than the amount taken in wages and commission at that time. The trial judge directed the jury that it was no defence for the appellant to say that he intended to repay the money and had the means to do it or that he was owed more than enough by his employer to cover it. On appeal from conviction the court held that it was a defence to show that the taking of the money was not dishonest in that he had intended to repay it and had reasonable grounds to believe he would be able to do so. The question before the court was whether he had taken the money dishonestly. I quote the following portion of the judgment of Lawton, L.J., for the Court of Appeal on this point, at page 342:
"The appeal raises an important point of law, namely, can it be a defence in law for a man charged with theft and proved to have taken money, to say that when he took the money he intended to repay it and had reasonable grounds for believing and did believe that he would be able to do so? The trial judge, his Honour Judge Edward Jones, adjudged that such a defence is not available. If the law recognizes such a defence, the question arises whether the decisions of this court in R. v. Cockburn and of its predecessor the Court of Criminal Appeal in R. v. Williams are applicable to a charge of theft under s. 1 of the Theft Act, 1968 and, if they are, whether those cases were correctly decided."
[20] In the case of R. v. DeMarco (1973), 22 C.R.N.S. 258 (Ont. C.A.), the lease of a motor vehicle under a rental agreement was held over for a longer period than the term contracted. The Ontario Court of Appeal held that it is a defence to a charge of theft of a motor vehicle that the accused honestly believed that the lessor would not object if she kept it for a longer period. Martin, J.A., in his oral judgment declared, at page 260:
"The Crown was required to establish that the appellant acted fraudulently and without colour of right. If the appellant honestly thought that the complainant would not object to her keeping the car for a longer period than the rental agreement provided for, and intended to pay the rental for the car, her mere retention of the car did not constitute the crime of theft."
And further on that same page he said:
"The existence of a colour of right negatives fraud. There may be an absence of any fraudulent intention, however, notwithstanding the absence of a colour of right to do the act in question, for example, the taking of anothers property temporarily by way of a prank: Regina v. Wilkins, 1964 CanLII 307 (ON CA), [1964] 2 O.R. 365 (C.A.); Handfield v. The Queen (1953), 1953 CanLII 462 (QC CA), 17 C.R. 343; 109 C.C.C. 53 (Que. C.A.); Regina v. Kerr, 1965 CanLII 784 (MB CA), 52 W.W.R. (N.S.) 176; 47 C.R. 268; [1965] 4 C.C.C. 37 (Man. C.A.); McCormick v. The Queen, 3 C.R.N.S. 150; 1968 CanLII 852 (QC CA), [1969] 4 C.C.C. 154 (Que. C.A.); Cooper v. The King (1949), 1949 CanLII 388 (NS SC), 23 M.P.R. 398; 93 C.C.C. 286 (N.S.C.A.)."
And on page 261, he said:
"In our view this direction failed to make clear to the jury that, if the accused had an honest belief in a state of facts which if they existed would constitute a legal justification or excuse for her retaining the car, such belief itself negatived theft."
[21] The elements of the offence of theft and the meaning of the word "fraudulently" were dealt with in the case of R. v. Dalzell (1983), 1983 CanLII 3506 (NS CA), 57 N.S.R.(2d) 148; 120 A.P.R. 148; 6 C.C.C.(3d) 112 (C.A.). There the female accused was charged with theft for having taken goods from a grocery store without paying for them. It was shown in evidence that she had done this as part of a program involving work with juvenile delinquents. The trial judge acquitted the accused and I quote from the following portion of his judgment as quoted by Cooper, J.A., at page 117:
"Judge O Hearn wrote a lengthy decision in the course of which he reviewed relevant authorities on the meaning of the elements of theft as defined in s. 283 of the Code and came to the conclusion that (at p. 249):
'In sum, the cases in authorities discussed support the conclusion that "fraudulently" in s. 283 means a dishonest state of mind, leading to a dishonest intention to "appropriate" the property taken, i.e., to act with respect to it as if the taker were the owner, although perhaps only the temporary owner. It follows that the trial judge, on the basis of the defendant' s evidence, was entitled to acquit her if he had a reasonable doubt as to her fraudulent intent. He could, of course, on the evidence have convicted her instead, but to the extent that I am able to do so - not having heard the witnesses or observed them -- I agree with his conclusion.'
"Judge O Hearn's conclusion, with which I respectfully agree, is supported by authorities cited to us."
Cooper, J.A., in his judgment supported by McDonald, J.A., for the majority of the Court of Appeal, held that it was open to the trial judge to acquit the accused if he had reasonable doubt about her fraudulent intent. He referred to the case of R. v. Feely and quoted the findings of Lawton, L.J., with approval, and in particular to his reference at p. 121 to the judgment of Lord Goddard in R. v. Williams et al., [1943] All E.R. 1068, from which he quoted, at page 1070, the following excerpt:
"The court thinks that the word 'fraudulently' does add and is intended to add, something to the words 'without a claim of right', and it means (though I am not saying that the words I am about to use will fit every case, but they certainly will fit this particular case) that the taking must be intentional and deliberate, that is to say, without mistake. You must know, when you take the property, that it is the property of another person and that you are taking it deliberately, not by mistake, and with an intention to deprive the person of the property in it."
And later on the same page he alluded to Lord Goddard's statement in the following terms:
"This statement has been referred to with approval in subsequent cases, including R. v. Pace, 1964 CanLII 597 (NS CA), [1965] 3 C.C.C. 55; 48 D.L.R.(2d) 532; 50 M.P.R. 301, a judgment of this court then sitting in banco, and recently by Judge McLellan in the 'prank' case of R. v. Duggan et al. (1975), 1975 CanLII 1244 (NS SC), 32 C.C.C.(2d) 558; 38 C.R.N.S. 25; 22 N.S.R.(2d) 531; 31 A.P.R. 531, who considered himself bound to follow it in view of its approval by the court in Pace. In Duggan the inebriated accused had removed a canoe from an unlocked compound of the T. Eaton Company Limited and placed it under a railway boxcar. Judge McLellan convicted the three accused of theft but held, however, that they should be granted absolute discharges.
"Lord Goddard's statement must now be considered in the light of R. v. Feely, [1973] 1 All E.R. 341. The appellant Feely appealed against his conviction for theft. The relevant facts are fully set out in the judgment of Lawton, L.J., speaking for the Court of Appeal, Criminal Division, but may be very shortly stated for the purposes of these reasons by saying that the appellant, who was employed by a firm of bookmakers as a branch manager, took money of his employer. The appellant was indicated under the Theft Act, 1968, s. 1(1) of which reads:
'1(l) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and "thief" and "steal" shall be construed accordingly.'
"It is clear from Lawton, L.J.'s, judgment that he regarded dishonesty or not as a question of fact. He referred at pp. 346-347 to certain differences in Lord Goddard's judgment, as delivered orally and as contained in certain of the law reports, and at p. 347, said:
'But it matters little why Lord Goddard, C.J., revised his judgment as he did. What does matter is that he seems to have envisaged when delivering his judgment the possibility of an unauthorised taking which might not be fraudulent. Once this possibility exists it must be for the jury to decide whether the facts proved are within it.1
and at p. 348:
'We find it Impossible to accept that a conviction for stealing, whether it be called larceny or theft, can reveal no moral obloquy. A man so convicted would have difficulty in persuading his friends and neighbours that his reputation had not been gravely damaged. He would be bound to be lowered in the estimation of right thinking people. Further, no reference was made by Winn, L.J., (see R. v. Cockburn, [1968] 1 All E.R. 466), to the factor of fraud which Lord Goddard, C.J., in R. v. Williams had said had to be considered. It is this factor, whether it is labelled "fraudulently" or "dishonestly", which distinguishes a taking without consent from stealing.'
"I respectfully accept the view expressed in R. v. Feely that whether a taking of another's property is done fraudulently or not is a question of fact. I have dwelt upon the circumstances here perhaps at undue length to determine whether in deciding this question of fact the trial judge made some palpable and overriding error which would require us to decide that he was wrong in the conclusion to which he came and consequently that Judge O Hearn was also wrong in dismissing the appeal to his court. I find no such error. It is my opinion, therefore, that leave to appeal should be granted but that the appeal should be dismissed."
[22] In the case of R. v. Klopping (1980), 1980 CanLII 2929 (QC CA), 57 C.C.C.(2d) 574 (Que. C.A.), the accused removed the price tags from a pair of shoes and from a sweatshirt in a store and substituted tags with lower prices to the knowledge of the cashier who had been informed of it by a private detective in the store. The cashier accepted the money offered and gave the accused the goods. He was arrested a few minutes later and charged with theft. Turgeon, J.A., for the court in his judgment stated, at page 575:
"After having examined the file and the authorities cited, I am of the opinion that it is a question of deciding whether the evidence submitted reveals the commission of theft by a trick or of the offence of obtaining something by false pretences or by fraud.
"The distinction between these two offences resides in the intention of the victim in giving up the property in his goods.
"This fundamental distinction is clearly explained in the case of R. v. Hickey (1977), 1977 CanLII 2003 (ON CJ), 37 C.C.C.(2d) 122, where the facts are closely analogous to those of this case.
"The decision of the Alberta Court of Appeal in R. v. Dawood (1975), 1975 ALTASCAD 10 (CanLII), 27 C.C.C.(2d) 300; 31 C.R.N.S. 382; [1976] 1 W.W.R. 262, also has many similarities with the facts of this case. The headnote of this case reads, in part, as follows:
'The accused while shopping in a self-serve department store picked out a jumper and combined it with a blouse so that it appeared to be a two-piece outfit. She removed the price tag on the blouse and then at the check-out counter paid only the price marked on the jumper for both items. The accused was charged with theft but argued that she could only be convicted of obtaining by false pretences and that the two offences were mutually exclusive. On appeal by the accused from her conviction for theft, held, Clement, J.A., dissenting, the appeal should be allowed and the conviction quashed.
'Per McDermid, J.A., Allen, J.A., concurring: The accused could not be convicted of theft if the vendor consented not only to the transfer of possession of the blouse but to the transfer of the property in the blouse. If the vendor did not consent to property passing then notwithstanding there was a consensual taking the accused could still be guilty of theft through the doctrine of larceny by trick. Whether property passed is determined by the civil law. In this case when the accused took the goods to the check-out counter, she was offering to purchase them at the one price and the cashier had a general authority to accept such an offer which she did by accepting payment. At that point there was a contract of sale, albeit a voidable one since it had been induced by fraud, and property in the items passed to the accused.'
"I also refer to the following decisions: R. v. Hemingway (1955), 1955 CanLII 41 (SCC), 112 C.C.C. 321; 1 D.L.R.(2d) 34; [1955] S.C.R. 712 (S.C.C.); R. v. Monnink (1972), 1972 CanLII 1333 (ON CA), 6 C.C.C.(2d) 336; 2 C.R. 483; 17 C.R.N.S. 126 (Ont. C.A.); R. v. Maurer (1975), 1975 CanLII 1371 (BC CA), 30 C.C.C.(2d) 94 (B.C.C.A.); Riga v. The Queen, July 25, 1977 (Man. C.A.), unreported."
[23] The Crown has relied upon the case of R. v. Smith and Smith, 1962 CanLII 100 (ON CA), [1963] 1 C. C.C. 68; [1963] 1 O.R. 249; 36 D. L.R.(2d) 613 (C.A.). There the directors of a company purchased stock with company funds and pledged them with a bank to secure a personal overdraft and were subsequently charged with theft. The Court of Appeal held that it was immaterial that the accused might have honestly intended and with reasonable prospect to redeem the shares and repay the company or that they subsequently repaid it to the profit of the company. It held that the accused had operated with a fraudulent intent and with a view to deprive the company temporarily of special property or interest in shares and therefore guilty of theft. Apart from the fact that the interpretation of the law of theft by the court in that case has not been followed in respect of its ingredients of fraudulent intent by subsequent leading precedents, it must be distinguished also from this one upon its facts. There the directors illegally and without the knowledge or consent of the company used company funds to purchase its own shares, a totally dishonest transaction. It was one which could not be subsequently validated by returning the money to the company even at a profit and the fact that the directors had intended to pay back the money could not retroactively redeem its dishonest quality. Here the company was aware of what the accused was doing even though it disapproved. It nevertheless tolerated his misconduct and was prepared to overlook it until the amount of the monies advanced upon his cheque exceeded $1,200.00. The accused did not act in a furtive manner in so doing. In each instance, he left evidence of his transactions in the form of cheques, albeit in my view, some of the alterations in them (except for the $1,800.00 cheque) made their acceptability at the bank questionable. Nevertheless, the transactions were done openly and the final cheque to cover all cash received was in proper negotiable form. It could not be cashed on the date of its issuance, i.e., August 21, 1986, because on that day there were insufficient funds in the accused's bank to cover it. He did not propose to deprive the company of the money temporarily or absolutely and he had directed it to be held out of the deposit until money to cover it were deposited on his own account. He had reasonable expectation that this was imminent, because he had arranged for an apparently suitable co-signer to endorse a loan document for him. There was no reason for him to doubt but that the loan would be advanced since his proposed co-signer had indicated to the manager of the accused's bank that he would co-sign the loan document and had requested the necessary documents be forwarded to him for that purpose. The transaction was aborted, however, because of the company's insistence upon cashing the $1,800.00 cheque on the day of its issuance in circumstances which caused the bank manager to change his mind about advancing the loan to the accused.
[24] To substantiate a conviction of the accused for a theft of monies from the company it must be established by evidence that he fraudulently and without colour of right took the money in question. The Crown must prove that the taking was done with intent to deprive the company of that money temporarily or absolutely. The evidence discloses that the monies were taken at first with the knowledge and forebearance of the company, i.e., up to $250.00, then the accused was requested to cease cashing cheques from company funds, but he continued until the total reached $1,200.00, all under the watchful eye of the company through its district manager who then decided that he had gone far enough. The district manager and the general manager had been concerned lest the amount of the accused's cheque might become so high that it might not be honoured at the bank. In the meantime up to that point the company had been satisfied to accept cheques for the cash the accused had taken. Up to that point the accused's only misconduct had been that of disobedience. It was not until his cheque did not clear the bank that the company realized that there may be some difficulty on obtaining payment of the accused's cheque.
[25] On the occasion Mercer came to Gander to speak to the accused about his practice of cashing cheques, he said that the accused promised he would take care of the cheque outstanding at that time in the amount of $250.00. At that time the company did not regard the monies taken by the accused in the course of cashing his cheques as theft. The cheque for $250.00 had been deposited and was returned shortly afterwards with a notation that there had been insufficient funds in the account to cover it. The company was aware of this and it subsequently stood by and noted the accused's continuation of cashing cheques in petty cash fund but deliberately let him carry on until the amount had reached $1,200.00. Only then did it decide to Intervene to stop him.
[26] The company did not view the taking of monies from petty cash by the accused and substituting cheques as theft. It knew he was holding the cheques out of deposits and surely must have guessed the reason for it. As Mercer testified, the company gave the accused the benefit of the doubt as to whether his cheques would be honoured when presented for payment. The allegation that he stole these monies arose only when his final cheque was dishonoured by the bank. It can hardly be said in these circumstances that the accused's actions were dishonest when they and the facts surrounding them were known and tolerated by the company. It is a reasonable deduction from the evidence that if there had been sufficient funds in the accused's account to cover the $1,800.00 cheque, the question of theft would never have arisen.
[27] The precedents cited above are authority for the proposition that a trial judge or a jury must decide the question of whether be intended to steal the funds in question from the accused's subjective view. The district manager and general manager had been alerted to the accused's practice of cashing cheques as in the case of R. v. Feely, and as in that case he had been requested to cease that practice. Again, as in that case, the accused disobeyed. His openness in so doing, his continuance of it in the face of that prohibition, his belief upon reasonable grounds that he would be able to repay it takes his action out of the category of fraudulent behaviour within the meaning of that term as used in s. 283 of the Code. Apart from the fact that the accused had reasonable grounds to believe that he would be able to negotiate a loan through the Central Trust Bank in order to put his bank account in good standing, he was also of the belief that the company owed him sufficient monies to cover monies taken if the loan did not come through.
[28] For the foregoing reasons, I find that there is, on the face of the evidence, including the testimony of the accused, reasonable doubt that the accused had a fraudulent intent in cashing cheques in the petty cash funds of the company and the benefit of this doubt must go to the accused. In these circumstances, I find that the Crown has not proved its case beyond a reasonable doubt and the accused must be acquitted.
Accused acquitted.
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