SUPREME COURT OF PRINCE EDWARD ISLAND. Citation: R. v. Hogan 2012 PESC 11 Date: Docket: S2-GC-105 Registry: Summerside

Transcription

1 SUPREME COURT OF PRINCE EDWARD ISLAND Citation: R. v. Hogan 2012 PESC 11 Date: Docket: S2-GC-105 Registry: Summerside Between: Her Majesty the Queen And: Margaret Ann Hogan Appearances: David O Brien, Q.C. for the Crown John Maynard for the Defence Before: The Honourable Justice John K. Mitchell Place and Dates of Hearing Place and Date of Oral Decision Summerside, Prince Edward Island March 15, 2012 Summerside, Prince Edward Island March 19, 2012

2 Page: 2 EMPLOYEE BREACH OF TRUST - theft/fraud - purpose and principles of sentencing - deterrence and denunciation CASES CITED: R. v. Burton, 2012 PESC 2; R. v. Karolyn Mae Tweedy, unreported, Campbell, J., November 21, 2011 (PESC); R. v. Chantelle Marion Lutz, unreported, Cheverie J., June 7, 2011 (PESC); R. v. Frances Georgina Lamoureux, 2011 PESC 3; R. v. George Allan Doucette, unreported, Mitchell J., December 3, 2010 ; R. v. Monty, [1991] P.E.I.J. No. 135 (PEICA);. R. v. Wayne Douglas Davies, October 27, 1997, AD-0733 (PESCAD); R. v. Virginia Reeves-David, unreported, Cheverie, J., March 30, 2011 (PESC) ; R. v. James Henry McClean, unreported, Mitchell, J. February 12, 2010 (PESC); R. v. Mary Jeannine Condon, unreported, Cheverie, J., January 25, 2010 (PESC); R. v. Linda Frances Gauthier, November 24, 1998, AD (PESCAD); R. v. Tracey Ann Sudsbury, unreported, C.J. Douglas, December 29, 2011(PE PC); R. v. Pierce (1997), 114 C.C.C. (3d) 23; R. v. Wismayer, [1997] O.J. No (Ont. CA); Stephen James Gallant v. Her Majesty the Queen, June 30, 1999, AD-0797 (PEICA); R. v. Bjarnason, 2011 CanLii (MB PC); R. v. Lee, 2011 NSPC 81 R. v. Bogart (2002), 167 C.C.C. (3d) 390); R. v. Chaulk, [2005] N.B.J. No. 350; R. v. Steeves, [2005] N.B.J. No. 351; R. v. Paul, [2003] M.J No. 447; R. v. Proulx (2000),140 C.C.C. (3d) 449 (SCC); R. v. Shropshire (1995), 102 C.C.C. (3d) 193 (SCC) STATUTES CITED: Criminal Code, R.S.C. 1985, Chap. C-46 TEXT CONSIDERED: Sentencing: The Practitioner s Guide, Canada Law Book, Clewley, McDermott and Young. Mitchell J.: [1] Margaret Ann Hogan has pled guilty to one count of fraud over $5,000 (s. 380(1)(a) of the Criminal Code) and one count of theft over $5,000 (s. 334(a) of the Criminal Code). Ms. Hogan was employed for 21 years as an employee at a convenience/ grocery store. Approximately the last seven of those was as an employee of Eugene s General Store in Tignish. She was a trusted employee. [2] The store had early opening hours, and Ms. Hogan was one of the staff selected to have been given keys to open the store. She was paid extra for this duty. She began stealing various lottery tickets from her employer. When a stolen ticket turned out to be a winner, she, her husband, or her son would cash the ticket. They d use the money to pay debt and other expenses. Neither her husband nor her son were aware of the fact that the tickets were stolen. [3] The loss to Eugene s General Store in tickets stolen was $10,492. The loss to

3 Page: 3 Atlantic Lottery Corporation in prize money paid out for tickets that were not purchased is $10,492. The fact that these figures are the same is a coincidence. The Offender [4] Hogan is 51 years of age. She has no prior record. She is in a stable 27-year marriage. She and her husband have one son. There does not appear to be any issues with alcohol, drugs or gambling. [5] The pre-sentence report indicates that she has a credible community reputation and a positive employment background within the Tignish community during the past twenty years. It also states that she is remorseful. Victim [6] Eugene s General Store is a small business. Joanne Perry, owner/manager of Eugene s General Store, spoke eloquently and emotionally about the impact of this offence. The owners feel betrayed. They trusted Hogan. They treated her and the other staff well. They say Ann Hogan has violated the trust that we had in her and has left us with no alternative but to feel very angry with her. They are concerned that the theft will have a negative impact on their business. Crown Position [7] The Crown s position is that recent Prince Edward Island Supreme Court cases such as R. v. Burton, 2012 PESC 2, R. v. Karolyn Mae Tweedy, unreported, Campbell J. November 21, 2011, R. v. Chantelle Marion Lutz, unreported, Cheverie, J., June 2011, R. v. Frances Georgina Lamoureux, 2011 PESC 3 and R. v. George Allan Doucette, Mitchell J. December 2010 all support the position that conditional sentences have not served their purpose as a general deterrent. The Crown therefore seeks a sentence in the range of four to six months. Defence Position [8] The defence position is that this is a case tailor made for a conditional sentence order. Hogan has no criminal record. She and her family constitute the working poor. She s an integral part of the family unit especially in caring for their 27 year-old son who suffers from mental health issues. [9] Defence points out that the vast majority of similar cases in this Province have been dealt with by way of conditional sentence orders. Defence relies on the most th recent case from the Prince Edward Island Provincial Court where, on the 29 day of

4 Page: 4 December 2011 the Chief Provincial Court Judge sentenced Tracey Ann Sudsbury to a 10 month conditional sentence order, 18 months probation and restitution for stealing $59, from her employer. Mitigating and Aggravating Circumstances [10] Hogan waived a preliminary inquiry and pled guilty. This is an indication that she accepts responsibility for her actions. The pre-sentence report says she is remorseful. She comes before the court as a first time offender. On the other hand, in committing this offence, she abused a position of trust in relation to the victim. The offences occurred over an approximately 23-month period. There were 387 days in which she stole one or more lottery tickets, thus, there is a significant degree of premeditation involved in the case. Purpose and Principles of Sentencing [11] The purpose and principles of sentencing are set out in section of the Criminal Code: 718. The fundamental purpose of sentencing is to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the following objectives: (a) to denounce unlawful conduct; (b) to deter the offender and other persons from committing offences; (c) to separate offenders from society, where necessary; (d) to assist in rehabilitating offenders; (e) to provide reparations for harm done to victims or to the community; and (f) to promote a sense of responsibility in offenders, and acknowledgment of the harm done to victims and to the community. [12] The evidence that the offender abused a position of trust or authority in relation to the victim is a statutorily aggravating factor. (s (a)(iii)) [13] The principle issue in this case is not whether or not custody should be imposed but whether the custody should be imposed by way of a conditional sentence to be served in the community or time served in the Provincial Correctional

5 Page: 5 Centre. [14] The Defence points out, in addition to the recent Prince Edward Island Supreme Court cases where incarceration was imposed for this type offence, other recent PEI Supreme Court cases have imposed conditional sentences; R. v. Virginia Reeves-David, Cheverie J., March 30, 2011 (unreported) R. v. James Henry McClean, Mitchell J., February 2010 (unreported) R. v. Mary Jeannine Condon, Cheverie J., January 2010 (unreported) In addition, as previously mentioned, there is the very recent case of R. v. Tracey Ann Sudsbury, PEI PC December 29, In that case, Douglas, C.J.P.C. stated at page 2 as follows: Of late, there have been a number of cases in the Supreme Court as well as one case from the Provincial Court where jail time has been imposed for employee theft. The Crown submits that conditional sentences have not been effective in delivering a message of general deterrence and that the recent Supreme Court decisions have mandated, if not directed, a change in direction in sentencing such offenders and reflect an evolution of sentencing for such offences. [15] Douglas, C.J.P.C., referenced Doucette, Lamoureux and Tweedy and commented: It is not clear from these recent decisions, what statistics the Court is relying on. The cases reviewed by the Crown total 24 over a period of 12 years, or an average of 2 a year. There may have been five such cases before the Courts this year. There were 3 cited from 2010 and 4 from With numbers this low, it is dangerous to try to formulate a trend. This is of course, only part of the picture however, as many such cases do not make it to Court, due to the cost to the business of a forensic audit or other considerations. [16] Douglas, C.J.P.C. also points out that offenders coming before the courts for employee theft are generally different in the sense that they are first time offenders, often with families that are dependent upon them financially. The acts are considered out of character and they often have letters of good character and community involvement to support them. He states that there is only one case of which he is aware where they have gone on to re-offend. He does not believe

6 Page: 6 specific deterrence and rehabilitation are issues. From Monty to Gauthier to Sudsbury [17] Prior to 1996 the law was clear that one should expect jail for a theft involving a breach of trust. In R. v. Monty, [1991] P.E.I.J. No. 135 (PEICA), the Court dealt with the case of an accused who used her position as voluntary Executive Director of the Prince Edward Island Chapter of Mothers Against Drunk Driving to steal $5,000 from that group. The court stated as follows: Crimes of this type generally warrant a term of imprisonment. As former Chief Justice Howland writing for the Ontario Court of Appeal in R. v. McEachern 42 C.C.C. (2d) 189 said at p. 191: "It has long been established that the most important principle in sentencing a person who holds a position of trust is that of general deterrence." He went on to say on the same page: "The public interest requires that it be made very clear to one and all that in the absence of exceptional circumstances a person holding a position of trust who steals from his employer must expect a term of imprisonment." Nadin-Davis in the text Sentencing In Canada at p. 113 says that the view expressed by the former Chief Justice of Ontario represents "the overwhelming consensus of innumerable Canadian judges". [18] In 1996 the Criminal Code was amended to allow conditional sentence orders. There followed a trilogy of Prince Edward Island Court of Appeal cases that effectively neutered Monty. The first is R. v. Wayne Douglas Davies, October 27, 1997, AD-0733 (PESCAD). This was a Crown appeal from the imposition of a conditional sentence following a guilty plea of theft over $5,000. The victim was the accused s employer. The Court of Appeal upheld the conditional sentence imposed by the trial judge as the trial judge had determined that serving the sentence in the community would be consistent with the principles of sentencing. [19] R. v. Linda Frances Gauthier, November 24, 1998, AD-0787 (PESCAD) dealt with a bank employee who defrauded the bank of $26,500 and two elderly customers of $12, over a period of five years. She had made restitution in the amount of $6,350.86, leaving a net loss of $32, She was given a nine-month conditional sentence order and probation. [20] The Crown appealed. The majority framed the issue at para. 12:...whether conditional sentences have any application to a fraud or theft case involving a breach of trust where exceptional mitigating circumstances do not exist. [21] The majority made reference to the Davies case and indicated that objectives of deterrence and denunciation can be achieved in many instances

7 Page: 7 through conditional imprisonment orders. They upheld the conditional sentence order and ruled at para. 21:... A conditional sentence is an option where there are no exceptional circumstances and the offence involves a serious breach of trust as long as the statutory limitations on the application of s are met. Webber, J., sitting ad hoc on the Court of Appeal, wrote a strong dissent. In her view, the issue in this case was whether or not the conditional sentence order would be consistent with the fundamental purpose and principles of sentencing. Webber, J., viewed this fraud as a major fraud because of the sum of money, the number of people involved and the position of trust held and abused. She points out that the Ontario Court of Appeal in R. v. Pierce (1997), 114 C.C.C. (3d) 23 (Ont.C.A.) was of the view that conditional sentence orders had to be exercised in accordance with recognized sentencing principles including specific and general deterrence. In Pierce, the Ontario Court of Appeal said that a conditional sentence order would not satisfy the principles of general deterrence and public denunciation where the offence involved a serious breach of trust by the offender from her employer. Pierce involved theft in the range of $270,000. [22] Webber also points out that Rosenburg, J.A., in R. v. Wismayer, [1997] O.J. No (Ont. CA), a case relied on by the majority, stated: General deterrence, as the principal objective animating the refusal to impose a conditional sentence, should be reserved for those offences that are likely to be affected by a general deterrent effect. Large scale wellplanned fraud by persons in positions of trust, such as the accused in R. v. Pierce, would seem to be one of those offences. [23] Webber was also of the view that while conditional sentence orders are not always inappropriate, they are not as punitive as jail. Furthermore, she emphasized that the principle in play in these cases is not specific deterrence but general deterrence. [24] R. v. Wismayer (1997), 115 C.C.C. (3d) 18 (Ont.C.A.) was decided before the May 2, 1997, amendments which added the words and would be consistent with the fundamental purpose and principles of sentencing set out in s. 718 to 718.2" to s. 742(1)(b) of the Code. Rosenburg states at para. 48: This is not to doubt the theory of general deterrence, or its application to the manner of service of the sentence of imprisonment. Requiring some offenders to serve the sentence in a correctional facility as opposed to the community can reasonably be expected to deter some persons from offending: see R. v. Shropshire, supra, at p However, these conclusions suggest that general deterrence is not a sufficient justification

8 Page: 8 for refusing to impose a conditional sentence. In view of its extremely negative collateral effects, incarceration should be used with great restraint where the justification is general deterrence.... [25] The third Court of Appeal decision to deal with this matter was Stephen James Gallant v. Her Majesty the Queen, June 30, 1999, AD-0797 (PEICA). In that case, the accused stole $1,636 from his employer. The trial judge suspended the passing of sentence and placed the appellant on probation for a year. The Prince Edward Island Supreme Court set that aside and sentenced the appellant to serve 60 days in jail. The Prince Edward Island Court of Appeal varied the sentence to a conditional sentence order of 60 days. They did so because they found that serving 60 days in the community would not endanger the public and would be consistent with the purpose and principles of sentencing. [26] From these cases, I take it to be the law that sentencing in cases of breach of trust, theft/fraud, the emphasis is on general deterrence (Monty), but a conditional sentence is still an option, even where there are no exceptional circumstances and the offence involves a serious breach of trust as long as the statutory limitations on the application of s are met (Gauthier). The statutory limitations on the application of are as follows: 1. It is not a serious personal injury offence; 2. There is no minimum term of imprisonment; 3. A period of imprisonment of less that two years is appropriate; 4. The offender does not constitute a danger to the public; 5. The sentence is consistent with the fundamental purpose and principles of sentencing. [27] In this case, there is no doubt that Ms. Hogan meets numbers 1 through 4. The issue is with number 5. The fundamental purpose and principles of sentencing are set out in ss. 718 to of the Code, and they include denunciation and deterrence, amongst other things. [28] In Proulx (2000) 140 C.C.C. (3d) 449 (SCC), the Supreme Court of Canada held that a properly crafted conditional sentence order can provide significant deterrence. It certainly can do so on a specific deterrence basis. The question is whether in this Province it has done so on a general deterrence basis since 1998 for this offence. [29] Conditional sentence orders for breach of trust/theft/fraud cases in this Province have been the norm since Davies, Gauthier and Gallant. Whereas under Monty, the onus was on the accused to show exceptional circumstances in order to

9 Page: 9 avoid a jail sentence, after Gauthier and Davies, the onus fell to the Crown to show exceptional circumstances in order to obtain a jail sentence. In the 43 breach of trust cases filed by the Crown since 2005 in the Provincial Court in Summerside, none resulted in jail sentences. Of the 21 cases cited by the Crown between 2006 and 2011, five resulted in jail sentences ranging from seven days to eight months. The size of theft/fraud, while a factor in Ontario (see Wismayer para. 50 and Pierce, supra), does not seem to be a factor in this Province: Shelly Ann Dixon (2003) stole $193,658 from her employer and received a 15-month conditional sentence order and 12 months probation; David Russell Campbell (2003) stole $484,368 from his employer, the City of Charlottetown, and the trial judge noted that a conditional sentence order would have been appropriate but for the fact that counsel had a joint recommendation of two years imprisonment; James Rayner (2008) stole $114, from the bank accounts of two deceased customers utilizing his position as an employee of TD Canada Trust, and he received a 12-month conditional sentence order; Wade Gordon Crozier (2009) stole $102, from Harness Racing PEI and received a 12-month conditional sentence order and 12 months probation; Angela Michelle MacKinnon (2009) stole $80,913 from AIDS PEI and received a 12 month conditional sentence order, 24 months probation and a s.738 restitution order; Mary Jeannine Condon (2010) who stole $116, from PEI Allied Youth and Active Communities Inc. was handed a 22-month conditional sentence order, 12 months probation and a partial restitution order. [30] In Sudsbury, the Chief Provincial Court Judge saw only 24 cases over a 12- year period. In this case, the Crown in Summerside began keeping statistics of this type of offence at the end of September To date, there have been 43 such cases in Prince County alone. The Crown did not keep statistics for the rest of Prince Edward Island; nonetheless, they were able to locate 34 cases since These are not all the cases involving breach of trust, theft/fraud in that time frame. [31] Nonetheless, from the material before me, I can conclude that there were at least eight cases in 2008, six in 2009, 12 in 2010 and 12 in While at first blush these numbers do not seem startling, one must keep in mind that breach of trust/theft/fraud cases are a subset of theft and fraud. Not everyone is an employee and not every employee occupies a position of trust. There are therefore not that many people who have the opportunity to commit this crime. Additionally, employee theft is often very difficult to detect and when detected, it is often difficult to find the culprit. This is so because the trusted employee knows the employer s systems and the weaknesses therein and has the ability to exploit those weaknesses. There is therefore a considerable amount of employee theft that goes undetected (R. v. Bjarnason, 2011 CanLii (MBPC) at p. 6).

10 Page: 10 [32] Finally, in this Province there is a huge disincentive to reporting employee th theft. In R. v. Gossen, November 9, 1999, PEIPC, a small employer believed that an employee had stolen monies in the range of $20,000. Cpl. Quinn (now retired) gave evidence in that case that when the victim approached the Charlottetown City Police, they were informed that the police didn t have the resources to investigate and prosecute such a case. The police advice was deal with it yourself, fire the employee and forget it, or obtain a forensic accounting at the victim s expense. The victim hired and paid for a forensic accountant at a cost of approximately $10,000. The accused was acquitted at trial. While the trial judge s decision was correct, it must have absolutely galled the victim to think that someone stole about $20,000 from them and the legal system required them to pay about an additional $10,000 in order to secure a trial. [33] Eleven years later, George Allan Doucette was charged with theft. He was the president and manager of the North Rustico Legion. He admitted to stealing more than $5,000 but less than $10,000. The North Rustico Legion retained an accounting firm to review its financial records which had been left in shambles by the accused. They discovered, for example, that there was $21,515 unaccounted for in commission revenues from Atlantic Lotto and a further $22,557 unaccounted for in bar sales. Yet, they were advised that the police did not have the resources to do a forensic accounting to determine if in fact the accused stole these monies, or they were stolen by someone else or if there was an innocent explanation. The accused, as was his right, did not assist the police. The victim could not afford a forensic accounting. The Crown was forced to proceed on what they could prove and that was only what the accused admitted. The North Rustico Legion sold its assets and is no longer in existence. [34] These two cases indicate, in my view, a troubling abdication of responsibilities on the part of the Attorney General s office in this Province. I know of no other offence where the authorities put the financial burden of prosecution on the victim. The Crown can only proceed on the evidence that it has and the police can only obtain evidence when they have the proper resources. Absent the proper resources the gains from defrauding one s employer may appear to some to outweigh the risks as the system is not in a position to detect this sort of crime if it is complicated. [35] The result is that when an employer is the victim of theft, the advice often given is that if it is a complicated offence, the Crown will not have the resources, and in any event it will result in a conditional sentence order. If however the victim is sufficiently well off to be able to afford a forensic accounting and the victim is willing to shell out several thousand dollars more, the matter may go ahead. This is huge disincentive to report.

11 Page: 11 [36] In light of the smaller number of people who have the opportunity to commit this type of offence, the difficulty in detection of this kind of offence, the disincentive to report this type of offence, the number of offences coming before the court and the fact that some of these cases could, and should in my view, be considered major and/or serious fraud, I am not as timid as the learned Provincial Court Judge who found the number low and could discern no trend. In my view it is quite apparent that conditional sentence orders are not working as a general deterrent. [37] The defence takes the position that a conditional sentence order in this case is appropriate. The defence states that the public just doesn t understand conditional sentence orders, and if they did, they would see that conditional sentence orders are a deterrent. In fact, defence counsel says that were he given the choice between 4 to 6 months in jail or 10 to 12 months conditional sentence order, he d be hard pressed as to what to pick. Gary R. Clewley, Paul G. McDermott and Rachel E. Young are the authors of Sentencing: The Practitioner s Guide, Canada Law Book. They do understand conditional sentence orders. At p. 14-3, those authors state as follows: In their exuberance to reconcile conditional sentences with the principles of denunciation, deterrence and retribution, the judiciary obscured an obvious point: going to prison is worse than being at home, even without the ability to watch television.... It cannot seriously be maintained that for the offender the choice between the two options is a difficult one. Surely this is because jail is harder, more frightening and severe than the strictest conditional sentence. A conditional sentence may not be a walk in the park... or a soft penalty... and the offender may have the sword of Damocles hanging over his or her head for the entire duration of the sentence... but it is still better than going to jail. A conditional sentence is a huge break, and it should be recognized as such. [38] With deference to defence counsel, I expect that the common person in this province understands only too well that Shelly Ann Dixon, James Rayner, Wade Gordon Crozier, Angela Michelle MacKinnon, Mary Jeannnine Condon, amongst others, got a huge break. [39] In the Sudsbury decision, the accused stole $59, from her employer. As part of the rationale for imposing a conditional sentence of 10 months, the Chief Provincial Court Judge stated as follows: The introduction of Conditional Sentences into the Criminal Code followed a number of studies which suggested that too many Canadians were being incarcerated, costing taxpayers millions of dollars without effectively deterring crime. The current cost to house someone in the Provincial

12 Page: 12 Correctional Center is stated by government to be $ per day. If everyone sentenced to conditional sentences in the cases referred to by the Crown, had served that time in jail instead, the cost would have been in excess of 1.1 million dollars. This calculation may be simplistic but it does point to the high cost of incarceration, if there are other effective options available. In my view, this is a factor that sentencing judges cannot take into account. It may well be an interesting debate for parliamentarians but it has no place in the courts. In R. v. Shropshire (1995), 102 C.C.C. (3d) 193 (SCC) at 202, Iacobucci J. states: The question of how society allocates public resources is for Parliament to determine. By enacting s. 744, Parliament has determined that some of society's resources will be allocated to imprisoning convicted murderers beyond the ten year point. If Parliament determines that the fiscal cost of that incarceration is too high, then they can amend s It is not the task of individual judges carrying out the sentencing process to engage in that kind of budgetary analysis (emphasis added) [40] The Defence points out that in her 51 years on the planet, Ms. Hogan has no previous record. The pre-sentence report states that its sources say that she is considered to be a good wife and mother, and further she has a credible community reputation and a positive employment background. She is also remorseful. [41] In Sudsbury, the Chief Provincial Court Judge stated: It is important to remember that the offenders coming before the courts for employee theft are very different from the offenders that the courts and the jails are use to dealing with. By and large they are first time offenders. Usually they have families that are dependent upon them financially. The acts they have committed are considered to be totally out of character. Usually letters of good character and community involvement are filed in their support. There is genuine remorse for what they have done and there is a strong sense of public humiliation. In only one of the cases cited, have they gone on to re-offend. Specific deterrence and rehabilitation are not issues of concern. [42] I agree with C.P.C.J. Douglas that specific deterrence and rehabilitation are not issues of concern. However, I contrast what the Chief Provincial Court Judge wrote with page 10-1 of Sentencing: The Practitioner s Guide, where it is stated, in reference to fraudulent transactions, as follows: Most often, this offence is committed by well-educated first offenders. Typically these offenders have an impressive employment background. Generally, sentencing courts assume that the offender will not reoffend. Hence, specific deterrence is not the governing principle....

13 Page: 13 The priority of the sentencing court is general deterrence. Consistently, courts have stated that the sentence for fraud must send a message that white collar crime will be taken very seriously.... In R. v. Lee, 2011 NSPC 81, the court states: There are limited mitigating factors in Ms. Lee's case and the most prominent one does not carry as much influence as is typically the case in the sentencing of first-time offenders. Ms. Lee has no criminal record, a fact that is usually strongly mitigating. In this case, its mitigation of her offences is blunted by the fact that, as Mr. Heerema has noted in his brief, "her good reputation would be a necessary pre-condition to holding a position of trust at Embrace Spa." The role of the good reputation in breach of trust crimes has been described by the Northwest Territorial Court in R. v. Bowden:... White collar crimes are usually committed by people with no criminal records and in fact a good background. It is those very qualities that allow them to be granted trust by their employers. We can lock our doors against intruders and criminals but we are defenceless from attacks from within, and by virtue of their good records, white collar criminals such as the accused are able to attack and cause significant damage from within. (R. v. Bowden, [2011] N.W.T.J. No. 28, paragraph 7) Arguably, Ms. Lee's good reputation is, in the context of the offences she has been convicted of, statutorily barred from consideration as a mitigating factor. Section 380.1(2) of the Criminal Code provides: "The court shall not consider as mitigating circumstances the offender's... reputation in the community if those circumstances were relevant to, contributed to, or were used in the commission of the offence."... Application to the Case at Bar [43] Mr. O Brien for the Crown states that a jail sentence is warranted given the amount of the loss which he puts at $20,984, the time period and the number of transactions which indicate a high degree of premeditation and the aggravating factor that the accused breached a position of trust or authority in relation to the victim. [44] While it is true that Eugene s General Store lost merchandise to the value of $10,492 and it is true that Atlantic Lottery paid out a similar amount for tickets which were not purchased, I find in total the loss was really $10,492. I find that had Ms. Hogan bought the tickets legitimately, she would have paid out $10,492, and Atlantic Lottery would have legitimately paid out a similar amount for winning tickets. The real loss is the loss to Eugene s General Convenience Store of

14 Page: 14 $10,492. That loss is a significant loss to a small employer. There is no doubt that the transactions occurred over a significant period of time, there being 387 separate days when lottery tickets were stolen. Ms. Hogan s reputation in the community as a good worker helped her earn the trust of her employer. She committed the thefts, or at least a portion of them, early in the day when there was no one else around. She was able to do so because she was given a set of keys as a trusted employee. She knew her employer s systems. She cashed some of the early winning tickets at the store. She used the money essentially to pay bills. She was not supporting a lavish lifestyle. In fact, I expect she was just barely getting by. Nonetheless, she was getting by on the back of her employer who had trusted her implicitly. [45] It is doubtless true that, at least elsewhere in Canada, real jail is the norm for major/serious breach of trust fraud cases (R. v. Pierce, supra, and R. v. Bogart (2002), 167 C.C.C. (3d) 390) (Ont.C.A.). While $10,942 dollars is a significant amount of money to a small business such as Eugene s General Store I do not believe this case falls under major fraud category. It is certainly not in the same league as Shelly Ann Dixon, David Russell Campbell, James Rayner, Wade Gordon Crozier, Angela Michelle MacKinnon and/or Mary Jeannine Condon. [46] Nevertheless, conditional sentence order is only available should Hogan meet the five pre-conditions. As indicated previously conditions one through four are met. The issue before me is whether or not purpose and principles of sentencing in denunciation and deterrence have been sufficiently satisfied to allow the imposition of a conditional sentence order. [47] In R. v. Chaulk, [2005] N.B.J. No. 350, NBCA, the New Brunswick Court of Appeal dealt with employee theft in the amount of $4,210. [48] The New Brunswick Court of Appeal stated at para. 3; In cases of this kind, general deterrence takes precedence over other sentencing concerns and, in the absence of exceptional circumstances, a person who abuses a position of trust in stealing from his or her employer should be sentenced to a term of imprisonment in jail. [49] In the companion case in R. v. Steeves, [2005] N.B.J. No. 351 NBCA, the Court stated in it s opening paragraph; It has long been the view of this Court and other Canadian Appellant Courts that the need for general deterrence must be met with sentencing an employee who stole from his or her employer and thereby abused a position of trust. Absent exceptional circumstances, a fit sentence for an offence of this nature is one that features incarceration. While a finding of

15 Page: 15 exceptional circumstances typically rests upon proof of mitigating factors that tend to lesson guilt or the seeming seriousness of the offence charged, the concept is elastic in meaning and courts have wisely refrained from attempting to precisely delineate it s reach. [50] In both of those cases the New Brunswick Court of Appeal would have sentenced the accused to six months incarceration but for the fact that the Attorney General s Office requested that the six months be served conditionally. [51] R. v. Paul, [2003] M.J No. 447 (MBCA) the Manitoba Court of Appeal dealt with two accused who were employees in the finance department of the victim. Mr. Paul forged and cashed a number of cheques totalling $11, The coaccused Ms. Demas also participated in the forgery and cashing of cheques in her case totalling $10, The trial judge sentenced Mr. Paul to 12 months custody and a restitution order and Ms. Demas, who had a related record, for theft, to18 months custody and a restitution order. They appealed. Manitoba Court of Appeal upheld the sentence. The Manitoba Court of Appeal at paragraphs 15 and 16; 15 Since the introduction of conditional sentences, Courts have confirmed that abuse of a position of trust will tend to result in a custodial term The very strong message referred to by the judge, that persons in such a position who engage in this sort of conduct will be severally dealt with, cannot in my opinion be adequately communicated in this case by a sentence served in the community. While such a sentence can, obviously, have a deterrent aspect, especially when sufficiently stringent conditions are imposed, there are some cases where denunciation and deterrence can only be effectively achieved by incarceration in custody. A breach of trust, committed over a long period of time and involving considerable sums of money, will typically be such a case... [52] In this case, I do not believe that a conditional sentence order would meet the fundamental purpose and principles of sentencing in that it would fail to achieve the goals of denunciation and general deterrence. I believe this is one of those offences that are likely to be affected by the general deterrent effect, and conditional sentence orders have not had the desired effect. This is a breach of trust committed over a considerable period of time involving 387 separate transactions and involving sums very close to what the Manitoba Court of Appeal in R. v. Paul called considerable sums of money. [53] But for the fact that Ms. Hogan was not stealing to support a lavish lifestyle, rather she appears to have been stealing to make ends meet, I would have

16 Page: 16 sentenced her to six months incarceration as the Crown suggested. However, in this case I sentence Ms. Hogan to 90 days incarceration and I will hear counsel on the issue of whether or not they wish to serve it intermittently. [54] As to section 738 of the Criminal Code there will be an order under section 738 in favour of Eugene s General Store in the amount of $10,492. There will be no restitution order in favour of Atlantic Lotto as I am not at all sure that granting a restitution order in their favour would not in effect be forcing Ms. Hogan to pay twice. In addition, Ms. Hogan will be placed on probation for a period of 30 months. J. March 19, 2012.