R. v. Hooyer, 2016 ONCA 44 (CanLII)
COURT OF APPEAL FOR ONTARIO
CITATION: R. v. Hooyer, 2016 ONCA 44
DATE: 20160119
DOCKET: C59492
Doherty, Pepall and Tulloch JJ.A.
BETWEEN
Her Majesty the Queen
Respondent
and
Daniel Raymond Hooyer
Appellant
Damien Frost and Rebecca Young, for the appellant
Robert Gattrell, for the respondent
Heard: December 7, 2015
On appeal from the convictions entered on theft and fraud on July 10, 2014 by Justice Kevin A. Sherwood of the Ontario Court of Justice at Simcoe, Ontario, and on appeal from the sentences imposed on October 14, 2014.
Doherty J.A.:
I
[1] After a trial by judge alone, the appellant was convicted of one count of fraud contrary to s. 380 and one count of theft contrary to s. 331 of the Criminal Code. On the theft charge, the trial judge imposed a sentence of two years less a day and made a restitution order in favour of the estate of Paul Carroll in the amount of $378,552.67. On the fraud charge, the trial judge sentenced the appellant to six months concurrent and made a restitution order in favour of Veterans Affairs Canada in the amount of $2,224.89. The trial judge also made an order under s. 380.2(1) prohibiting the appellant from ever seeking, obtaining or continuing any employment or becoming a volunteer in any capacity that would involve authority over the real property, money or valuable security of another person.
[2] The appellant appealed conviction and sentence. At the conclusion of oral argument, the court advised counsel that the conviction appeal was dismissed and that the court would not vary the jail term imposed. The court reserved on two other aspects of the sentence appeal.
II
[3] Mr. Paul Carroll entered a long-term care facility in February 2004. He had dementia and his condition worsened as time passed. Mr. Carroll’s wife had a power of attorney over his property. She took care of him after he entered the long-term care facility.
[4] The appellant had known the Carrolls since he was a boy. As they grew older, he visited them regularly and assisted in some of their daily living needs. He was named as the substitute power of attorney for Mr. Carroll. The appellant was also named as the residual beneficiary in both Mr. and Mrs. Carroll’s wills.
[5] Mrs. Carroll died in September 2004 and the appellant assumed control over Mr. Carroll’s property under the power of attorney. He retained control until July 2011. During those seven years, the appellant moved into the Carroll’s home and treated it as if it was his own; dissipated all of Mr. Carroll’s assets; and spent almost the entirety of the income earned by Mr. Carroll’s assets during that time period. According to the Agreed Statement of Facts, the appellant diverted $378,552.67 to his own use and benefit. The appellant paid no attention to Mr. Carroll’s care. He did not see Mr. Carroll for several years before his death. The appellant repeatedly failed to pay Mr. Carroll’s monthly bills at the long-term care facility. The appellant’s habitual non-payment caused the facility to downgrade Mr. Carroll’s accommodation. Mr. Carroll died in 2013.
III
[6] On the fraud charge, the Crown alleged that the appellant submitted six invoices from the long-term care facility where Mr. Carroll resided to the insurer for Veterans Affairs Canada. Mr. Carroll, as a veteran, was entitled to have part of the monthly payments owed to the long-term care facility paid for by Veterans Affairs Canada. The Crown alleged that the appellant submitted the invoices to Veterans Affairs Canada; making a claim for reimbursement under the Veterans Independence Program. On three occasions, the insurer mailed reimbursement cheques to the appellant. He deposited those cheques into Mr. Carroll’s bank account and, taking advantage of his control over that account, used the money as he saw fit for his own personal benefit. None of the money was paid to the long-term care facility. The appellant received $2,224.89 from Veterans Affairs.
[7] Nothing more need be said about the fraud charge. The appellant virtually admitted the offence in the agreed Statement of Facts and in his cross-examination. The arguments raised on the conviction appeal go to the trial judge’s conviction on the theft charge. Nothing argued on the appeal puts the validity of the fraud conviction in doubt.
IV
[8] On the theft charge, the Crown alleged that the appellant had misused his power of attorney over Mr. Carroll’s property. The Crown contended that the appellant had misappropriated Mr. Carroll’s assets to his own purposes and left Mr. Carroll so destitute that – despite his substantial assets and income stream – he had to rely on charity for things as basic as clothing and other personal items.
[9] The Agreed Statement of Facts and supporting documents demonstrated that the appellant exercised full control over Mr. Carroll’s assets under the authority of the power of attorney. By the time the appellant surrendered the power of attorney, Mr. Carroll had $18 in his bank account, owed about $16,000 to the long-term care facility, and $13,000 in back taxes on his home. The appellant used Mr. Carroll’s assets and Mr. Carroll’s income for a variety of personal uses. He purchased a vehicle valued at $37,000, lent a friend $15,635 to purchase another vehicle, and made cash withdrawals totalling thousands of dollars to pay his day-to-day living expenses. The appellant also lived rent and expense free in Mr. Carroll’s home throughout the time that he had the power of attorney.
[10] The appellant testified. He indicated that he understood from a conversation he had with Mrs. Carroll, sometime shortly before her death in September 2004, that should he assume the power of attorney over Mr. Carroll’s property after Mrs. Carroll’s death, he would be entitled “to use the money as if it was mine”. The appellant relied on that statement as authority to do as he wished with Mr. Carroll’s property.
[11] At trial, the defence argued that:
• the terms of the power of attorney gave the appellant the power to use the money for his own purposes; and
• even if under the power of attorney the appellant was not authorized to use the money for his own purposes, he honestly believed that he was entitled to do so, thereby negating the mens rea component of the offence of theft.
[12] The trial judge examined the terms of the power of attorney in some detail. As he pointed out, the power of attorney incorporated provisions from the Substitute Decisions Act, 1992, S.O. 1992, c. 30. Those provisions put the appellant in a fiduciary relationship with Mr. Carroll and require him to exercise the powers given to him under the power of attorney for Mr. Carroll’s benefit. The Agreed Statement of Facts and the appellant’s own admissions in his cross-examination established beyond peradventure that he failed in his fiduciary duties to Mr. Carroll.
[13] On appeal, counsel for the appellant accepted that the funds had been used in violation of the terms of the power of attorney. He focussed on the mens rea requirement. He argued that the Crown could only establish the required mens rea by demonstrating beyond a reasonable doubt that the appellant knew he was not entitled to use Mr. Carroll’s property for his own purposes and without regard to Mr. Carroll’s needs. Counsel argued that the appellant’s evidence that Mrs. Carroll told him that he could use the money “as if it was mine” provided a basis for a reasonable doubt on the mens rea issue. Counsel submitted that the trial judge did not come to grips with this issue, but instead convicted the appellant on the basis that he ought to have known that he had a duty to manage Mr. Carroll’s assets in Mr. Carroll’s best interest.
[14] I reject this argument for two reasons. First, I do not read the appellant’s evidence as an assertion that he believed he could do whatever he wanted with Mr. Carroll’s assets. As I read his evidence, particularly his cross-examination, he acknowledged that he understood from his conversation with Mrs. Carroll that he could use the money as if it were his own, but that he was also obligated to take care of Mr. Carroll’s needs. By his own admission, the appellant knowingly failed to take care of those needs. Second, even if the appellant’s testimony provided a basis for doubt on the mens rea issue, the trial judge rejected the appellant’s evidence, leaving nothing in the evidence to support the appellant’s contention that he believed he could use the money without regard to Mr. Carroll’s best interests.
[15] Looking first at the substance of the appellant’s evidence, he testified in-chief that Mrs. Carroll told him that under the power of attorney he could use Mr. Carroll’s property “as if it was mine”. In cross-examination, however, the appellant conceded that he knew that the property belonged to Mr. Carroll and that the money was not “mine to give”. The appellant also acknowledged in cross-examination that when Mrs. Carroll told him he could use the assets as if they were his own, there was also a discussion about using them to take care of Mr. Carroll. The appellant conceded that he had “faltered” in meeting his obligation to look after Mr. Carroll’s needs.
[16] The cross-examination demonstrates that the appellant knew that apart from the use he could make of Mr. Carroll’s assets for his personal purposes, he was obliged to use those assets to look after Mr. Carroll’s needs. The appellant agreed in cross-examination that he failed in that obligation. Even on the appellant’s evidence, the Crown established the necessary mens rea.
[17] Counsel for the appellant argued that the appellant did no more in his cross-examination than acknowledge a moral as opposed to a legal responsibility to look after Mr. Carroll’s needs. He contended that the appellant’s evidence did not support a finding that the appellant knowingly breached the terms of the power of attorney. I do not accept this interpretation of the evidence. However, I will examine the trial judge’s reasons on the assumption that counsel’s interpretation of the appellant’s evidence is correct and that it was capable of leaving the trial judge with a doubt on the mens rea issue.
[18] The trial judge clearly appreciated that the defence rested, in part, on a denial of the necessary mens rea. In summarizing that position, he said:
The accused’s evidence was that he was not taking compensation, rather he was simply using the funds as his own which he felt he was entitled to do based on his discussion with Flora Carroll some three months or so before her death.
[19] After analyzing the nature of the duties imposed on the appellant by the power of attorney, the trial judge turned to a consideration of the appellant’s evidence. He observed that aspects of the appellant’s evidence were inconsistent with the facts as had been agreed upon in the Agreed Statement of Facts. The trial judge then said:
At the very best the position taken by Mr. Hooyer is reckless. He freely dealt with a considerable amount of assets of somebody who entrusted him to manage those assets for their benefit and he did so without checking in any way about his legal abilities, his responsibilities or the nature of the authority that had been entrusted to him.
I find that he at least was wilfully blind to the realities of the situation. The circumstances were such that he ought clearly to have known that he had a duty to manage and preserve the assets that had been entrusted to him particularly for the care of Mr. Carroll. [Emphasis added.]
[20] Counsel for the appellant contends that these passages demonstrate the trial judge’s error in law. He correctly points out that the mens rea for theft cannot be established based on what an accused “ought to have known”: R. v. Briscoe, 2010 SCC 13, [2010] 1 S.C.R. 411, at para. 20.
[21] The trial judge’s reasons do not, however, stop at the passages quoted above. In those passages, the trial judge indicates that even on the appellant’s version of events, he was reckless and wilfully blind in proceeding as he did in respect of Mr. Carroll’s assets. In the very next passage, the trial judge made it clear that he did not believe the appellant’s testimony:
When I weigh the inconsistencies in his evidence, his evasiveness, his selective and convenient memory and when I consider his evidence with a view to common sense, it is unrealistic and I do not accept his evidence. His explanations are simply incredible and self-serving. His justification is grounded in a conversation that he relates to have had with someone who is long since dead.
[22] The trial judge’s finding with respect to the appellant’s state of mind appears in the following passage:
He acknowledged specifically that in his testimony that this was Paul Carroll’s money, Paul Carroll’s assets and real property. He knew that but he converted it, used it, and disposed of it for his personal use. Despite continuing to withdraw on average hundreds of dollars per week from Paul Carroll’s bank account from what he acknowledged to be Paul Carroll’s money, he consistently ignored or refused to pay legitimate and necessary expenses for the grantor’s basic living expenses including his residence, nursing care, clothing and personal aids such as a walker and wheelchair or to preserve his assets such as his home on which the accused allowed a considerable amount of back taxes to accrue. [Emphasis added.]
[23] The trial judge’s rejection of the appellant’s evidence and his finding that the appellant knew that the assets belonged to Mr. Carroll when he converted them to his own use established the requisite mens rea for theft.
[24] The conviction appeal is dismissed.
V
THE SENTENCE APPEAL
[25] The appellant took three objections to the sentence imposed. First, he submitted that the length of the sentence (two years less a day) was demonstrably unfit having regard to the appellant’s antecedents, the positive presentence report, and the appellant’s poor health. Second, he argued that the sentencing judge erred in making a restitution order in favour of Mr. Carroll’s estate. Finally, counsel submitted that the trial judge erred in making an order under s. 380.2(1) prohibiting the appellant from taking any position involving authority over real property, money, or valuable security belonging to someone else. Counsel contended that as the commission of the fraud predated the enactment of s. 380.2(1), the prohibition created by that section could not be imposed on the appellant.
(i) The term of imprisonment
[26] The prison sentence of two years less a day imposed by the trial judge was fit. This was an egregious breach of trust committed against a very vulnerable victim over several years. The trial judge’s reasons reveal a full appreciation of the mitigating factors. He obviously gave those factors considerable weight, otherwise a much longer sentence could have been imposed: see R. v. Kaziuk, 2012 ONCJ 34, varied on appeal, 2013 ONCA 217.
(ii) The restitution order
[27] The trial judge made two restitution orders: one in favour of Mr. Carroll’s estate and the other in favour of Veterans Affairs Canada. The latter, in the amount of $2,224.89, has been paid and is not challenged on appeal. The restitution order in favour of the Carroll estate is challenged.
[28] At trial, defence counsel argued against the making of a restitution order in favour of the estate on a narrow basis. The defence argued that a restitution order was inappropriate because it would ultimately benefit the appellant, the residual beneficiary under the will. Counsel submitted that the proceeds from the sale of certain assets forfeited by the appellant to the estate would be sufficient to fulfill the bequests in the will to the other named beneficiaries, meaning that any other assets in the estate, including the proceeds from a restitution order, would go to the appellant.
[29] The trial judge declined to speculate as to who might ultimately benefit from a restitution order made in favour of the estate. As the defence did not challenge the quantum of the proposed order, the trial judge made the restitution order in the amount requested by the Crown.
[30] On appeal, very little was said about the restitution order. I understand counsel for the appellant to renew the argument made at trial and to submit that a restitution order coupled with the period of imprisonment of two years less a day renders the sentence unduly harsh. As at trial, the quantum of the order is not challenged.
[31] I agree with the trial judge that the appellant’s status as the residual beneficiary under the will should not preclude the making of a restitution order in favour of the estate. Those responsible for administering the estate will determine what steps, if any, should be taken to enforce the restitution order through the civil process: see s. 741(1) of the Criminal Code. The identity of the ultimate beneficiary of any proceeds from that enforcement process will no doubt factor significantly into that determination.
[32] The argument that a jail sentence of two years less a day is so long as to render the restitution order either futile or unduly punitive has no merit.
[33] I would not interfere with the restitution order made by the trial judge in favour of Mr. Carroll’s estate.
(iii) The s. 380.2(1) order
[34] Section 380.2(1) reads in part:
Where an offender is convicted … of an offence referred to in subsection 380(1) [fraud] the court that sentences … the offender, in addition to any other punishment that may be imposed for that offence … may make, subject to the conditions or exemptions that the court directs, an order prohibiting the offender from seeking, obtaining or continuing any employment or becoming or being a volunteer in any capacity, that involves having authority over the real property, money or valuable security of another person.
[35] Section 380.2(2) provides that the order under s. 380.2(1) may be for “any period that the court considers appropriate”. The order is discretionary and the sentencing judge may impose “conditions or exemptions”.
[36] At trial, the Crown sought, and the defence did not oppose, a lifetime prohibition order under s. 380.2(1). The trial judge made the order in the very broad terms of the section without any exemptions or qualifications. Under the terms of the prohibition order, the appellant cannot be employed in any job in which he may be required to take money, or its equivalent, from a customer on behalf of the appellant’s employer.
[37] On appeal, counsel initially raised s. 11(i) of the Charter. That section declares that if the punishment for a crime is varied between the time of the commission of the crime and the time of sentencing, an accused is entitled to the lesser punishment. In his factum, counsel submitted that an order under s. 380.2(1) was part of the appellant’s punishment for the fraud conviction. The section came into force in November 2011 (S.C. 2011, c. 6, s. 4) several months after the fraud on Veterans Affairs was committed. Counsel maintained that the introduction of s. 380.2(1) had increased the punishment for fraud by adding a new sanction that had previously been unavailable. He argued that under s. 11(i) of the Charter he was entitled to be sentenced under the penalty provision as it stood when he committed the offence. Section 380.2(1) was not part of that provision.
[38] Crown counsel in his factum argued that the appellant could not advance the Charter claim as he had failed to comply with the constitutional notice requirement in s. 109 of the Courts of Justice Act, R.S.O. 1990, c. C.43: see R. v. McCann, 2015 ONCA 451, at paras. 3-7.
[39] In his reply factum, counsel for the appellant abandoned the Charter argument, presumably because he had not given the necessary notice. Instead he advanced a submission based on principles of statutory interpretation. He argued that the prohibition created by s. 380.2(1) constituted punishment and under the prevailing rules of statutory interpretation should be read as applying prospectively only, absent a clear indication that Parliament intended the section to be applied retrospectively. Counsel contended that no such intention could be gleaned either from the language of the section or from any other source used to identify parliamentary intention.
[40] Crown counsel acknowledged that a provision which imposes a true punishment attracts the statutory presumption against retrospectivity. He submitted, however, that the presumption did not apply to s. 380.2(1) because the section was not intended to punish the offender but was intended to protect the public by excluding convicted fraudsters from jobs or positions they could use to commit further frauds. Crown counsel submitted that a provision intended primarily for public protection does not attract the presumption against retrospectivity even if it incidentally imposes a penalty on the individual who is subject to the provision: see Brosseau v. Alberta Securities Commission, 1989 CanLII 121 (SCC), [1989] 1 S.C.R. 301, at pp. 320-321; Thow v. British Columbia Securities Commission, 2009 BCCA 46, at paras. 44-49. Crown counsel further submits that if the purpose of s. 380.2(1) is the protection of the public from those who have engaged in fraudulent conduct in the past, that purpose is served by reading s. 380.2(1) as applicable to all frauds regardless of whether they were committed before or after the enactment of s. 380.2(1).
[41] The distinction the Crown urges between a prohibition that is intended to protect the public and only incidentally penalizes the target of the prohibition, and a prohibition that is part of the punishment imposed on the offender is reflected in the jurisprudence describing the application of the presumption against retrospectivity: R. Sullivan, On the Construction of Statutes, 6th ed. (Markham, LexisNexis, 2014), at pp. 784-793. The distinction is also implied in the constitutional protection created by s. 11(i) of the Charter. That protection extends only to variations “for the punishment of the offence” and not to other orders which are not punitive in nature: see R. v. Rodgers, 2006 SCC 15, [2006] 1 S.C.R. 554, at paras. 59-62.
[42] The distinction between sanctions intended to protect the public and those intended to punish offenders is difficult to make in the context of sentencing for criminal offences. Many criminal sanctions are designed to both protect the public and punish the accused. In fact, some sanctions protect the public by punishing the accused. The objectives of public protection and punishment often cannot realistically be separated and treated as individual and competing purposes in the sentencing context. The reality is that most sentencing sanctions do both and will attract the presumption against retrospectivity. This reality is reflected in the oft described “general rule” that accused are entitled to be sentenced according to the law as it stood when the offence was committed: see R. v. Johnson, 2003 SCC 46 (CanLII), [2003] 2 S.C.R. 357, at para. 41; R. v. Wiles, 2005 SCC 84, [2005] 3 S.C.R. 895, at para. 3; R. v. Clarke, 2013 ONCA 7, 115 O.R. (3d) 75, at para. 13.[1]
[43] In my view, a sanction imposed by the criminal law as a consequence of a conviction and as part of the sentencing process will generally, although not inevitably, be regarded as punishment for the purposes of applying the presumption against retrospectivity even if that sanction also serves to protect the public: see R. v. J.(K.R.), 2014 BCCA 382, 316 C.C.C. (3d) 540, per Groberman J.A., for the court on this issue, at paras. 62-65; on appeal to the SCC. If a prohibition that is imposed as part of a criminal sentencing process meaningfully restricts the liberty or security interest of an accused, the object of the prohibition is sufficiently punitive to attract the presumption against retrospectivity, even if it also serves to protect the public.
[44] The approach I favour distinguishes between sentencing sanctions which, while serving legitimate criminal law purposes, have no meaningful impact on an accused’s liberty or security of the person, and those sanctions which, while aimed at public protection concerns, also punish an accused by significantly infringing on his liberty or security of the person.
[45] Employing that distinction, a sentencing provision requiring an accused to provide a DNA sample upon conviction, or requiring an accused to register with a sex-offence registry upon conviction, does not meaningfully impair the accused’s liberty or security of the person and would not be regarded as punishment for the purposes of the application of the presumption against retrospectivity: see R. v. Rodgers, at paras. 63-65; R. v. Cross, 2006 NSCA 30, 241 N.S.R. (2d) 349, at para. 84; R. v. Dyck, 2008 ONCA 309, 90 O.R. (3d) 409, at paras. 79-84. However, a prohibition that significantly limits the lawful activities in which an accused can engage, where an accused can go, or with whom an accused can communicate or associate, would sufficiently impair the liberty and security of the accused to warrant characterizing the prohibition as punishment. These prohibitions would trigger the presumption against retrospectivity: see R. v. Farler, 2013 NSCA 13, 326 N.S.R. (2d) 255, at paras.125-128; R. v. J.(K.R.), at paras. 61-65[2]; R. v. Wiles, supra, at para. 3; R. v. Primeau, 2015 QCCQ 2028, at paras. 38-40.
[46] In examining the prohibition contemplated by s. 380.2(1) to determine whether it sufficiently impairs individual liberty and security of the person to be described as punishment, I consider the scope of the sanction as framed in the section and not as fashioned in a given case. In my view, the application of the presumption against retrospectivity either applies to s. 380.2(1) or it does not. The application of the presumption cannot depend on the specific terms of the order made in a given case. In any event, the order as made in the case is identical to the scope of the order contemplated by the section.
[47] The s. 380.2(1) sanction imposed on the appellant excludes him indefinitely from participating in a wide variety of otherwise lawful activities[3]. These include many forms of employment. The prohibition could well significantly negatively affect the appellant’s ability to find and maintain employment and fully participate within his community. Like the trial judge in R. v. Primeau, at para. 40, I would hold that a s. 380.2(1) order imposes “significant restrictions” on the accused’s liberty and security of the person. The presumption against retrospectivity applies in interpreting the temporal scope of that section.
[48] Nothing in the language of s. 380.2(1) suggests a parliamentary intention to apply the sanction to frauds committed before the enactment of the section. For example, there is no reference in s. 380.2(1) to offences that no longer existed when the section was enacted: see R. v. J.(K.R.), at paras. 66-69. Nor is there a transitional provision that could support a retrospective application of the section. The court was not referred to anything in the legislative history of the provision that would rebut the presumption against retrospectivity.
[49] I would apply the presumption and interpret the provision as applicable only to frauds committed after the enactment of the section. The s. 380.2(1) order made by the trial judge must be struck.
VI
CONCLUSION
[50] As indicated at the end of oral arguments, the conviction appeal is dismissed. The sentence appeal is allowed only to the extent vacating the prohibition order made under s. 380.2(1). Otherwise the sentence remains as imposed by the trial judge.
Released: “DD” “JAN 19 2016”
“Doherty J.A.”
“I agree S.E. Pepall J.A.”
“I agree M. Tulloch J.A.”
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