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CHARTER-SECTIONS 7 AND 12-FINES IN LIEU OF FORFEITURE-SECTION 462.37(4) OF THE CRIMINAL CODE

In R. v. Chung, 2021 ONCA 188, March 31, 2021, the accused were convicted of defrauding the Ontario Lottery and Gaming Corporation. The sentencing judge imposed periods of imprisonment and imposed fines in lieu of forfeiture pursuant to section 462.37(4) of the Criminal Code. The Ontario Court of Appeal noted that this section “requires the judge who imposes the fine at sentencing to simultaneously set the term of imprisonment in default of payment and impose mandatory minimum sentences in default of payment” (at paragraph 4).

The accused appealed from sentence. They argued, in part, that the aspects of section 462.37(4) violated sections 7 and 12 of the Charter.

This portion of their sentence appeal was dismissed.  The Ontario Court of Appeal held that the provision did not violate section 7 or 12 of the Charter.

Fines in lieu of Forfeiture:

The Ontario Court of Appeal noted that section 462.37(1) of the Criminal Code “authorizes the Crown to seek the forfeiture of any property that is the proceeds of crime, obtained by the commission of a designated offence. The objectives of the provision are ‘to deprive the offender…of the proceeds of their crime and to deter them from committing crimes in the future’…Where the property that has been in the control of the offender is no longer available to be forfeited, s. 462.37(3) provides that a fine may be imposed in lieu of forfeiture…once a sentencing judge has determined that a fine in lieu of forfeiture ought to be imposed, the sentencing judge has no discretion over the value of the fine to be imposed. The fine must be equal to the value of the property for which it is a substitute” (at paragraphs 98 to 101).

The Court of Appeal also indicated that s. 462.37(4) “requires the judge who imposes the fine to also impose a term of imprisonment in the event that the offender does not pay the fine. Although the sentencing judge has some discretion in the length of the term of imprisonment to be set, that discretion is bounded by mandatory minimum and maximum terms of imprisonment that correspond to the quantum of the fine. For example, default of a fine of more than $1 million requires a mandatory minimum sentence of five years and a maximum of ten years” (at paragraph 102).

Section 7:

In dismissing the challenge pursuant to section 7 of the Charter, the Court of Appeal concluded that the scheme for forfeiture and enforcement did not breach any principal of natural justice (at paragraph 114):

We do not agree that the structure of the regime breaches principles of natural justice. The rationale for sentencing on default does not track the panoply of ordinary sentencing principles that includes, for example, rehabilitation. It is principally concerned with specific and general deterrence, which are by their nature prospective. Specific deterrence in this context is concerned with providing the offender with motivation to disclose what happened to the money and to choose to pay the fine. Given this limited rationale, nothing that happens subsequently is relevant to the quantum of sentence imposed. When the offender does not pay the fine, or only pays some of it, the only open question is whether the nonpayment was the result of an unreasonable refusal. Did the offender choose not to repay? Or were there circumstances outside the offender’s control? The offender has full rights of participation at the committal hearing to answer this question. As to the prior question of what the penalty should be if the offender deliberately and unreasonably refuses to pay, there is nothing contrary to natural justice in the penalty being set in advance in accordance with submissions made before the circumstances of default are known. Consequently, we do not agree that there is a violation of s. 7.

Section 12:

In dismissing the challenge pursuant to section 12 of the Charter, the Court of Appeal concluded that the minimum prescribed sentence was not disproportionate (at paragraphs 139 and 140):  

In R. v. Chung, 2021 ONCA 188, March 31, 2021, the accused were convicted of defrauding the Ontario Lottery and Gaming Corporation. The sentencing judge imposed periods of imprisonment and imposed fines in lieu of forfeiture pursuant to section 462.37(4) of the Criminal Code. The Ontario Court of Appeal noted that this section “requires the judge who imposes the fine at sentencing to simultaneously set the term of imprisonment in default of payment and impose mandatory minimum sentences in default of payment” (at paragraph 4).

The accused appealed from sentence. They argued, in part, that the aspects of section 462.37(4) violated sections 7 and 12 of the Charter.

This portion of their sentence appeal was dismissed.  The Ontario Court of Appeal held that the provision did not violate section 7 or 12 of the Charter.

Fines in lieu of Forfeiture:

The Ontario Court of Appeal noted that section 462.37(1) of the Criminal Code “authorizes the Crown to seek the forfeiture of any property that is the proceeds of crime, obtained by the commission of a designated offence. The objectives of the provision are ‘to deprive the offender…of the proceeds of their crime and to deter them from committing crimes in the future’…Where the property that has been in the control of the offender is no longer available to be forfeited, s. 462.37(3) provides that a fine may be imposed in lieu of forfeiture…once a sentencing judge has determined that a fine in lieu of forfeiture ought to be imposed, the sentencing judge has no discretion over the value of the fine to be imposed. The fine must be equal to the value of the property for which it is a substitute” (at paragraphs 98 to 101).

The Court of Appeal also indicated that s. 462.37(4) “requires the judge who imposes the fine to also impose a term of imprisonment in the event that the offender does not pay the fine. Although the sentencing judge has some discretion in the length of the term of imprisonment to be set, that discretion is bounded by mandatory minimum and maximum terms of imprisonment that correspond to the quantum of the fine. For example, default of a fine of more than $1 million requires a mandatory minimum sentence of five years and a maximum of ten years” (at paragraph 102).

Section 7:

In dismissing the challenge pursuant to section 7 of the Charter, the Court of Appeal concluded that the scheme for forfeiture and enforcement did not breach any principal of natural justice (at paragraph 114):

We do not agree that the structure of the regime breaches principles of natural justice. The rationale for sentencing on default does not track the panoply of ordinary sentencing principles that includes, for example, rehabilitation. It is principally concerned with specific and general deterrence, which are by their nature prospective. Specific deterrence in this context is concerned with providing the offender with motivation to disclose what happened to the money and to choose to pay the fine. Given this limited rationale, nothing that happens subsequently is relevant to the quantum of sentence imposed. When the offender does not pay the fine, or only pays some of it, the only open question is whether the nonpayment was the result of an unreasonable refusal. Did the offender choose not to repay? Or were there circumstances outside the offender’s control? The offender has full rights of participation at the committal hearing to answer this question. As to the prior question of what the penalty should be if the offender deliberately and unreasonably refuses to pay, there is nothing contrary to natural justice in the penalty being set in advance in accordance with submissions made before the circumstances of default are known. Consequently, we do not agree that there is a violation of s. 7.

Section 12:

In dismissing the challenge pursuant to section 12 of the Charter, the Court of Appeal concluded that the minimum prescribed sentence was not disproportionate (at paragraphs 139 and 140):  

With respect to the argument that the minimum sentence is disproportionate in cases where the term of imprisonment on default is longer than the term of imprisonment for the underlying offence, we do not agree that the comparison is apt. Again, the penal sentence that offenders receive for the offences giving rise to the proceeds of crime has a different rationale for the sentence imposed for the refusal to pay a fine in lieu of forfeiture. As this court said in Angelis, at para. 39, Part XII.2 of the Criminal Code is not offender centric. Criminal sentencing goals such as rehabilitation do not factor into the determination of a fit sentence for wilful default. There is instead a singular focus on a particular mode of deterrence – ensuring that crime does not pay in circumstances where an offender refuses to pay without reasonable excuse.

We find that the trial judge made no error in concluding that the five-year mandatory minimum provision under s. 462.37(4)(a)(vii) does not infringe s. 12 of the Charter.