Last year, we reported on the sentencing decision of Justice Danyliuk of the Saskatchewan Court of Queen’s Bench in R v Fast. In the lower court, the daughter of the main architect of the fraud was sentenced to 30 months incarceration, and ordered to pay $1,000,000 in restitution. The daughter was the in-house accountant of the company that the fraud was run through and had been found criminally responsible for permitting the fraud to continue by her acts and omissions. In her appeal to Court of Appeal for Saskatchewan, the daughter appealed both her sentence and the restitution order.
The Saskatchewan Court of Appeal 2015 SKCA 86 held that the 30 month sentence was appropriate but reduced the restitution order to $250,000. In reducing the restitution order, the Saskatchewan Court of Appeal canvassed the parameters of a judge’s discretion to order restitution to victims of fraud focusing on how to approach the issue of the offender’s capacity to make restitution. The Court noted the following considerations:
- the ability/capacity of the offender to pay is one important, but not an overriding factor;
- the impact of a restitution order on the chances of rehabilitation should be considered;
- the short term ability to pay may be weighed against the offender’s long term potential for gainful employment and future payment;
- the current inability of an offender to pay should not dissuade a court from making a restitution order where a breach of trust is concerned, particularly where profits from fraud are unaccounted; and
- on the other hand, where an offender has not profited from the offence, or there is no breach of trust, the offender’s inability to pay a restitution order should become more important and merit greater weight.
Applying the above principles, the Saskatchewan Court of Appeal found that a $250,000 restitution order was more appropriate. There was no evidence that the daughter had benefited from the proceeds of the fraud, and as a facilitator and not the architect, she was in far less of a position of trust. Further, the $1,000,000 restitution order was considered to exceed not only her present ability to pay, but “such an order may well never be repaid and will hang over the appellant’s head for her lifetime.
A second issue flagged by the Saskatchewan Court of Appeal is that S. 738 of the Criminal Code makes it clear that the total restitution to which a victim is entitled, pursuant to a restitution order, is not to exceed the amount lost. The appellant’s father had already been ordered to pay restitution for the entire amount of the fraud. Despite the prospects of actual re-payment being essentially zero, the additional restitution order against the appellant led to the hypothetical possibility that the victims of the fraud could recover more than the total value of their loss. The Saskatchewan Court of Appeal disposed of this issue by amending the restitution order to prevent over recovery; ordering the daughter to pay $250,000, less any amounts exceeding the total amount of the fraud, when combined with payments made by her father.