COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Dawson v. Dawson,

2014 BCCA 44

Date: 20140131

Docket: CA041154

Between:

Judith Gwenda Dawson

Respondent

(Plaintiff)

And

David Reid Dawson

Appellant

(Defendant)

Before:

The
  Honourable Madam Justice D. Smith

The
  Honourable Madam Justice Bennett

The
  Honourable Mr. Justice Harris

On appeal from:  An order of the Supreme Court of
British Columbia, dated
July 29, 2013 (
Dawson v. Dawson
, Vernon Docket 41550).

The
  Appellant appeared on his own behalf
via telephone

Counsel
  for the Respondent:

D. Djordjevich

Place
  and Date of Hearing:

Vancouver, British Columbia

January 21, 2014

Place
  and Date of Judgment:

Vancouver, British Columbia

January 31, 2014

Written
  Reasons of the Court

Summary:

Application
to dismiss an appeal as an abuse of process granted.  The appellant sought to
raise issues that were res judicata.  Order declaring the appellant a vexatious
litigant granted.

Reasons for Judgment of
the Court:

[1]

Ms. Corfield, previously Ms. Dawson, brings several
applications in this appeal.  They are:

1)

To have the appeal, filed by her ex-husband, David Dawson, dismissed as
an abuse of process on the ground that the matters raised by it are
res
judicata
;

2)

Alternatively, to have the appeal dismissed as abandoned on the ground
that leave to appeal is required but has not been sought;

3)

To have Mr. Dawson declared a vexatious litigant;

4)

To be awarded special costs on a lump sum basis.

[2]

Mr. Dawsons appeal arises in the context of family law
proceedings.  Mr. Dawson and Ms. Corfield brought proceedings to dissolve
their marriage and deal with all related incidental issues, principally the
division of assets.  This specific appeal is from the dismissal of an
application brought by Mr. Dawson to vary the trial order, even though Mr. Dawsons
appeal from that order had been appealed and the appeal dismissed.

[3]

It is only necessary to set out some limited background.  The parties
were married for 15 years.  Their relationship broke down in part because
of a violent and unprovoked assault on Ms. Corfield by Mr. Dawson.  Litigation
ensued and the issues between the parties were tried by way of a summary trial:
Dawson v. Dawson
, 2010 BCSC 1015.  Mr. Justice Barrow ordered that
the family assets be divided equally and dismissed Ms. Corfields claim
for lump‑sum spousal support.  Included in this decision was the
dismissal of Mr. Dawsons claim for $5,000 in commission for selling one
of the parties properties.  It is this aspect of the judgment that underlies
the current appeal.

[4]

Mr. Dawson appealed Justice Barrows order, alleging a number of
errors in the division of family assets.  In his appeal, Mr. Dawson
applied for leave to adduce new evidence, which included a letter purporting to
prove his entitlement to the $5,000 commission.  His application and appeal
were dismissed:
Dawson v. Dawson
, 2012 BCCA 410.  At para. 25,
Neilson J.A. commented:

[25]      The summary trial record contained over 800 pages
of affidavits and exhibits. The appellant now seeks to lead voluminous fresh
evidence, comprised of a 37-page affidavit and over 300 pages of documentary
exhibits, all of which were filed after the parties had exchanged their
factums.

[26]      The objectives of certainty and finality in
matrimonial litigation significantly restrict the right to admit fresh evidence
on an appeal. The purpose of an appeal is to examine the record that was before
the trial court, to determine whether the judge made an error of law or a
palpable error of fact that justifies intervention. It is not an opportunity to
retry the case. To justify consideration of fresh evidence, the applicant must
establish it was not discoverable by reasonable diligence before the trial; it
is credible; it would be practically conclusive of an issue before the court;
and, if believed, could have affected the result at trial:
Scott v. Scott
,
2006 BCCA 504 at paras. 21-24, 61 B.C.L.R. (4th) 9.

[27]      The appellant frankly admits that almost all of the
material he seeks to admit existed prior to the trial. He submits it should
nevertheless be received because, as a self-represented litigant, he was naïve,
ignorant, and at a disadvantage. He says he failed to foresee some of the
issues that arose at trial, and the evidence he needed to respond to them. He
maintains the fresh evidence will be decisive on several issues, and the
interests of justice require its admission.

[28]      I am not persuaded the appellants application
should be granted. While I am sympathetic to the challenges faced by a party
who represents himself, fairness requires that the governing principles be
applied consistently to all litigants. The fact a litigant did not have counsel
cannot alone justify permitting that party to treat an appeal as an opportunity
to present his or her case anew, on a more comprehensive evidentiary base
informed by hindsight and the decision of the trial judge.

[29]      While the appellants
application has been painstakingly put together, it is not always easy to
decipher. It appears to me, however, that almost all of the evidence he now
seeks to lead was available with due diligence prior to trial. Further, I
discern little in his material that might have persuaded the trial judge to
exercise his discretion differently

[5]

In addition to these reasons, it is apparent from the transcript record
that the division expressly turned its mind to the issues connected to the
letter.

[6]

After the release of this Courts judgment, Mr. Dawson applied for
a rehearing of the appeal.  His application was dismissed and was described
as being without merit and was highly inappropriate: 2013 BCCA 344 at para. 21
(Costs Decision).

[7]

At the same time, the division exercised its powers under Appendix B
of the
Court of Appeal Rules
, B.C. Reg. 297/2001, to compensate Ms. Corfield
for the unwarranted expenses she incurred responding to certain steps in the
appeal, which were found to be unnecessarily drawn out and without merit:
Dawson
v. Dawson
, Costs Decision at paras. 21, 22.  We will briefly return to
this costs proceeding in connection with other aspects of the applications
before us.

[8]

Mr. Dawson applied for leave to appeal to the Supreme Court of
Canada but leave was refused and the Court ordered costs against Mr. Dawson
on a solicitor and client basis:
Dawson v. Dawson
, [2012] S.C.C.A. No. 545.

[9]

It is apparent that, with the dismissal of his leave application by the
Supreme Court of Canada, the legal issue between the parties over the
commission and whatever potential relevance the letter may have had to that
issue had been conclusively and finally decided against Mr. Dawson.

[10]

Undeterred, Mr. Dawson applied within the same proceeding to vary
the trial order notwithstanding having exhausted his appeal rights arising from
it.  He also alleged that both Ms. Corfield and her counsel engaged in
perjury by failing to produce the letter at the original trial.  Mr. Justice
Cole dismissed the application as being
res judicata
, without
commenting on the allegation of perjury.

[11]

In our opinion, Cole J. correctly dismissed the application to vary
the trial order.  The issue raised in the application to vary has been
conclusively and finally decided against Mr. Dawson in the proceedings
before this Court and the subsequent application for leave to appeal to the Supreme
Court of Canada.  The appeal is wholly without merit.  This Court has inherent
jurisdiction to quash an appeal if it is so devoid of merit that to countenance
it would be an abuse of the courts process:
Wiens v. Campbell
(1992),
74 B.C.L.R. (2d) 154, 21 B.C.A.C. 206.

[12]

We have no hesitation in concluding that this appeal is an abuse of
process and it is therefore dismissed.  Accordingly, it is unnecessary to
consider Ms. Corfields alternative ground for bringing the appeal to an
end.

[13]

In our view, Mr. Dawsons attempt to advance his position by
alleging perjury is similarly devoid of merit.  It is not open to Mr. Dawson
to allege perjury in the context of these civil proceedings.  If any
impropriety attached to the fact that the letter (which in any event Mr. Dawson
at all times had access to) was not disclosed in the original trial
proceedings, the potential relevance of that impropriety was encompassed within
the application to adduce fresh evidence on the appeal of the trial judgment.  But
given the serious nature of the allegation, we think it important to emphasize
that we see no merit in it.  It appears the letter related to an ultimately
unsuccessful attempt to settle issues in dispute between the parties and was
accordingly irrelevant to the issues before the trial judge.

[14]

We turn now to deal with the application to have Mr. Dawson
declared a vexatious litigant.  Section 29 of the
Court of Appeal Act
,
R.S.B.C. 1996, c. 77, provides that:

If, on the application of any
person, a justice is satisfied that a person has habitually, persistently and
without reasonable cause commenced vexatious proceedings in the court, the
justice may, after hearing that person or giving that person an opportunity to
be heard, order that proceedings must not be brought or commenced in the court
without leave of a justice.

[15]

The Court may declare a litigant to be vexatious even after judgment on
the merits of the appeal has been given:
Holland

v. Marshall
, 2010
BCCA 243 at para. 9 (Chambers), affd 2010 BCCA 562.

[16]

This Court has regularly adverted to and endorsed the following
non-exhaustive factors that should be considered in an application to declare a
person a vexatious litigant enumerated in
Re Lang Michener and Fabian
(1987),
37 D.L.R. (4th) 685 (Ont. H.C.J., per Henry J. at para. 19):

(a)   the
bringing of one or more actions to determine an issue which has already been
determined by a court of competent jurisdiction constitutes a vexatious
proceeding;

(b)   where it
is obvious that an action cannot succeed, or if the action would lead to no
possible good, or if no reasonable person can reasonably expect to obtain
relief, the action is vexatious;

(c)   vexatious
actions include those brought for an improper purpose, including the harassment
and oppression of other parties by multifarious proceedings brought for
purposes other than the assertion of legitimate rights;

(d)   it is a
general characteristic of vexatious proceedings that grounds and issues raised
tend to be rolled forward into subsequent actions and repeated and
supplemented, often with actions brought against the lawyers who have acted for
or against the litigant in earlier proceedings;

(e)   in
determining whether proceedings are vexatious, the court must look at the whole
history of the matter and not just whether there was originally a good cause of
action;

(f)    the
failure of the person instituting the proceedings to pay the costs of
unsuccessful proceedings is one factor to be considered in determining whether
proceedings are vexatious;

(g)   the respondents conduct in
persistently taking unsuccessful appeals form judicial decisions can be
considered vexatious conduct of legal proceedings.

See, for example,
Attorney General of B.C. v. Lindsay
,
2007 BCCA 165 at para. 27, Huddart J.A., leave to appeal refd [2007]
S.C.C.A. No. 359;
Holland v. Marshall
,
supra,
at para. 13;
Pearlman v. Insurance Corporation of British Columbia
, 2010 BCCA 362 at
para. 5, Low J.A. (Chambers), affd 2010 BCCA 568, leave to appeal
refd [2011] S.C.C.A. No. 39.

[17]

The purpose of the provision permitting the Court to declare a person to
be a vexatious litigant was explained in
Houweling Nurseries Ltd. v.
Houweling
, 2010 BCCA 315.  The section gives the Court the ability to
control its own process to prevent the abuse of that process by a litigant repetitively
bringing unmeritorious proceedings that result in the needless expenditure of
judicial resources and cause unnecessary expense to other parties: see, paras. 1
and 40.

[18]

We are persuaded that Mr. Dawson should be declared a vexatious
litigant.  We reach that conclusion based on his conduct in this Court, but
informed also by his conduct in the Supreme Court.  As will be seen, Mr. Dawson
has, in both courts, taken repetitive steps in relation to matters that have already
been decided.

[19]

This Court commented critically on Mr. Dawsons conduct in the Costs
Decision:

[16]      First, he brought an application for leave to
appeal when leave was clearly not required.

[17]      Second, he brought an application in this Court for
a stay of proceedings, when the proper forum for such a motion was the Supreme
Court.

[18]      Third, despite a letter from Ms. Corfields
counsel warning Mr. Dawson he must file appeal books that were 100%
complete or face increased costs and delay, the three appeal books he prepared
and filed did not include half of Ms. Corfields affidavit material from
the summary trial, and mixed up the affidavits and exhibits that they did
include. We accept that, as a result, Ms. Corfields counsel was required
to review the 564 pages in the three appeal books to determine what was
missing, and ultimately prepare a fourth volume to ensure the record before
this Court was complete. This fourth appeal book was essential and of
considerable assistance to the Court on the appeal. Yet Mr. Dawson
objected to having it filed, necessitating a Registrars hearing to settle the
contents.

[19]      Fourth, on March 20, 2012, after Ms. Corfields
counsel had filed her factum and a month before the appeal, Mr. Dawson
filed a 367-page application to lead new evidence, and an accompanying 18-page
argument, which effectively constituted a revised factum. We have no doubt Ms. Corfields
counsel was required to spend significant time in responding to this
application, which we found to be without merit because virtually all of the
material Mr. Dawson sought to have admitted had been available to him
prior to the trial.

[20]      Fifth, in May 2012, several weeks after the appeal
was heard, Mr. Dawson attempted to present an unsolicited supplementary
argument to the Court, which we declined to accept. We are satisfied Ms. Corfields
counsel was required to review this, although the Court rejected it summarily
without requiring a response from her.

[21]      Finally, in November
2012, a month after the reasons for judgment of this Court were released, Mr. Dawson
delivered to the Court an 18-page application for a rehearing of the appeal.
This application was without merit and was highly inappropriate, in that it
alleged both the trial court and this Court were prejudiced and biased against
him due to his gender, his mental illness, his status as a self-represented
litigant, and the fact his marriage to Ms. Corfield had ended because he
had viciously and unexpectedly assaulted her. His critical and derogatory submissions
set out multiple perceived errors attributable to this alleged partiality to Ms. Corfield,
and repeated many of the submissions he had made on the appeal. We accept that Ms. Corfields
counsel was required to reacquaint herself with the matter and prepare a ready
for filing response, which was submitted to the Court but not filed as the
application was peremptorily dismissed.

[20]

At that time, this Court was not satisfied that Mr. Dawsons
conduct of the appeal justified special costs, but it did order a lump sum
award of increased costs to compensate Ms. Corfield for the unnecessarily
protracted litigation and the additional expenses she incurred.

[21]

Since the final disposition of the appeal, Mr. Dawson has brought
these proceedings which are a further attempt to relitigate matters that have
already been decided against him.  As we shall describe, not only has he
brought proceedings that are utterly devoid of merit, he has done so in a
manner that involves the harassment of both of Ms. Corfield and her counsel.

[22]

Mr. Dawsons effort to relitigate the issue of the letter
purportedly entitling him to commission has not been restricted to this appeal.
There have been other proceedings in the Supreme Court, culminating in a
decision of Mr. Justice Barrows on January 13, 2014 declaring him a
vexatious litigant: 2014 BCSC 44.  We intend to quote extensively from the
recitation of the background to that application since much of what is said
there informs our analysis here:

[17]      On July 12, 2013, Mr. Dawson filed a further
application in the context of this litigation, seeking an order varying the
July 2010 trial decision and a stay of the various orders that followed from
that decision. By paragraph 3 of Part 1 on that application, he
sought directions:

3)      as to
the charge that the Plaintiff and her counsel, Ms. Djordjevich misled
justice and committed perjury by repeatedly denying the truth of a fact, both
in written submissions to the Supreme Court of BC, the Court of Appeal of BC
and the Supreme Court of Canada and orally in trial in the Supreme Court of BC
the effect of which was to mislead the trial judge and result in a mistaken
finding and order based precisely on those representations

The facts asserted by Mr. Dawson in support of that
application relate to his claim to a $5,000 commission from the sale of the
parties Chase condominium. His application was heard by Cole J. on July 29,
2013. It was dismissed on the basis that the issue was
res judicata
inasmuch as Mr. Dawson had sought to adduce the same evidence, both before
the Court of Appeal and the Supreme Court of Canada, and on both occasions, his
applications were refused. Cole J. also ordered that Mr. Dawson pay
costs, which he summarily fixed at $1,500.

[18]      Mr. Dawson has appealed Mr. Justice Coles
order. Ms. Corfield has filed an application to have Mr. Dawsons
appeal of Cole J.s order dismissed. That application is scheduled to be
heard on January 28, 2014. [
In fact January 21, 2014
]

[19]      On September 9, 2013, Mr. Dawson filed a
requisition asking to appear before me for the purpose of re-opening the June
2010 trial. In his requisition, he set out that the September 23, 2009
letter amounted to an agreement to pay commission and that through the
perjury and deceit of Ms. Corfield and Ms. Djordjevich, that
letter had been improperly suppressed. He made no mention of the fact that he
had attempted to adduce the very same evidence before the Court of Appeal and
had sought to pursue the matter just a month previous before Cole J. I
indicated to Mr. Dawson through the trial schedulers office that he could
make this application. As soon as Ms. Djordjevich became aware of the
application, she informed the court of the proceedings that had taken place in
the Court of Appeal and before Mr. Justice Cole. I then dismissed Mr. Dawsons
request to have the matter heard.

[28]      Mr. Dawsons appeals to the British Columbia
Court of Appeal and the Supreme Court of Canada are relevant to the question of
whether an order under s. 18 of the
Supreme Court Act
or s. 221
of the
Family Law Act
should be made to this extent: those proceedings
conclusively established the finality of the issues raised in this family
litigation. They established that the September 23, 2009 correspondence
from Ms. Djordjevich to Mr. Dawsons then lawyer will not be
considered in this case. This conclusion is important because on three
occasions since the Supreme Court of Canada refused leave, Mr. Dawson has
sought to have the Supreme Court of British Columbia consider that issue. His
first attempt was his application of July 12, 2013. Mr. Dawsons
argument that he was merely seeking directions by that application is
disingenuous. One of the orders he sought was a variation of the trial
judgment. In Part 3 of his application, he set out the additional orders
he was seeking. They included a reduction in the costs ordered following the
trial and punitive costs against Ms. Corfield for her perjury and that
of her counsel.

[29]      The second application was Mr. Dawsons
requisition of September 9, 2013. By this requisition, he sought to raise
precisely the same issues. Mr. Dawson clearly understood that there was a
risk that his application could be dismissed on the basis that the issue raised
was
res judicata
. He was careful to point out in his requisition that
neither the Court of Appeal nor the Supreme Court of Canada had passed judgment
on the question of whether either Ms. Djordjevich or Ms. Corfield had
committed perjury or otherwise misled the court because he had not raised the
issue in those proceedings. What Mr. Dawson did not disclose in his
requisition was the fact that Mr. Justice Cole had determined that the
very issue he sought to raise was
res judicata
. Whether Mr. Dawson
is successful in his appeal of that decision, he knew the decision was extant
and he knew the basis on which it was made. He deliberately chose not to
include that information in his request to appear back before me.

[30]      The third instance in which Mr. Dawson has
sought to revisit this issue is his application of December 2, 2013. As
noted above, by that application, he seeks an order that Ms. Djordjevich
personally pay damages to him for what he maintains was perjury. The perjury he
relies on relates to the September 23, 2009 letter. Mr. Dawsons December 2,
2013 application is also revealing in another respect. In Ms. Corfields
November 12, 2013 application, the first two orders she sought were for a
declaration under s. 18 of the
Supreme Court Act
and an order under
s. 221 of the
Family Law Act
. In paragraphs 2 and 3 of Part 1
of Mr. Dawsons December 2, 2013 application, he has reproduced
verbatim the orders sought by Ms. Corfield and replaced his name with
hers. He has not pointed to any action taken by either Ms. Corfield or Ms. Djordjevich
that even remotely resembles a vexatious or abusive step.

[31]      I am satisfied that Mr. Dawsons
conduct in repeatedly attempting to revisit an issue that was finally
determined by the highest court in this country amounts to a misuse of this
courts process.

[23]

Mr. Justice Barrow, in considering issues connected to the
restraining orders against Mr. Dawson in favour of Ms. Corfield and
her counsel, referred to Mr. Dawsons anger, apparent obsession with the
litigation, and threats he has made.  Those threats are in the material before
us.  They include threatening criminal proceedings against Ms. Corfields
counsel, threatening to report her to the RCMP, and accusing her of perjury and
dishonesty.  As summarized by Barrow J.:

[46]      Mr. Dawsons conduct in this litigation
supports the proposition that he remains excessively preoccupied with and
obsessed by it. His materials also support the conclusion that he remains angry
towards Ms. Corfield. His anger is not limited to Ms. Corfield but,
rather, extends to virtually all of those who have had involvement in this
litigation. On November 12, 2010, Mr. Dawson swore an affidavit (No. 9
in this proceeding) in support of his application to have Ms. Corfield and
Ms. Djordjevich cited for contempt. He deposed that the plaintiffs
application, to which his affidavit was also in response to, was:

3)      another
vindictive and vicious attack by a counsel so prejudiced by personal animosity
and so determined to annihilate me that she loses sight of need to find a
settlement that both parties can live with

[47]      On August 7, 2013, Mr. Dawson
wrote to Ms. Djordjevich accusing her of perjury and writing that:

Your career is over - I promise you
that.

In a January 21, 2013 letter
to Ms. Djordjevich, he wrote:

My motivation is the pursuit of
justice as I earned the money in dispute without doubt - you personally cheated
me out of commission by your denial and cover up of the agreement

A month later in a February 7,
2013 letter, Mr. Dawson wrote:

The venom came from youDont you
consider all your low tactics, the contempt citation and all the lies in court
have steeled my defence? Your determination to win has cost your client dearly.

There are numerous other
references in the material to a similar effect.

[24]

The material before us similarly includes numerous instances of similar
statements.  Based on the material that is before us, we would agree with the
assessment of Barrow J. referred to in para. 46 of his judgment just
quoted.

[25]

It is clear to us that Mr. Dawsons unrelenting pursuit of issues
connected to the commission he has claimed to be entitled to has become
obsessive.  Given amounts paid to him on account of expenses incurred in
selling the property, the amount in issue is in the order of $2,000.  He is
pursuing the matter, despite the issue having been finally decided, in an
abusive manner that includes repeated threats against both Ms. Corfield
and her counsel.  It is apparent that in doing so he has subjected both of them
to great stress.  We were advised by counsel at the hearing of this matter that
neither Ms. Corfield nor her counsel would appear to any further court
process involving this or related matters.  We are satisfied that part of the
reason for this goes beyond merely the cost in time, energy and money to
respond, but is rooted also legitimately in fear and anxiety.

[26]

In summary, we are persuaded that Mr. Dawson is a vexatious
litigant.  His conduct in this Court alone justifies that conclusion.  But his
conduct in the litigation generally, in the Supreme Court as well as this
Court, also informs our conclusion.  In both courts he has brought multiple
proceedings on issues already decided against him and that are devoid of merit.
 The proceedings have involved improper conduct and harassment, including
defamatory statements and threats against Ms. Corfield and her counsel.  Mr. Dawsons
obsessive pursuit of these proceedings has drained the resources of Ms. Corfield,
compelled her counsel to respond to unfounded allegations, and is conduct that
cannot, nor likely ever would, be adequately compensated in costs.  Mr. Dawsons
conduct exemplifies many of the factors set out in para. 16 above.

[27]

Previously, this Court concluded that Mr. Dawsons conduct did not
warrant sanction through an award of special costs.  In our view, his conduct
since the Costs Decision justifies an award of special costs.  Unfounded allegations
of perjury are exceptionally damaging to the reputation of anyone, but they are
particularly harmful to a professional, such as counsel.  In our view, Mr. Dawsons
conduct has gone further than that commented on by this Court earlier, and now
can properly be regarded as reprehensible and deserving rebuke.

[28]

The difficulty with making an award of special costs, is that those
costs must be assessed and to do so would require further proceedings.  Ms. Corfield,
accordingly, withdrew her application for special costs to try to bring this
litigation to an end.  Instead, she asked for an order that would compensate
for the disbursements incurred in relation to this proceeding.  Those
disbursements total $1,474.70.  In addition, we would award lump sum costs for
25 units on Scale 1 in the amount of $1,200.  Those costs reflect tariff
entitlements for advising the respondent, assembling a motion book, and preparing
for and attending the application.

[29]

We turn now to the form of order declaring Mr. Dawson to be a
vexatious litigant.  The order will go in the following form:

This
Court Orders that:

1.

Mr. David Reid Dawson, be
declared a vexatious litigant pursuant to section 29 of the Court of
Appeal Act;

2.

Mr. Dawson, and anyone acting
on his behalf, except a member in good standing of the Law Society of British
Columbia, shall not file or attempt to file, by any means whatsoever, any
document in the registry of the Court of Appeal for British Columbia pertaining
to or in any way connected with the subject matter of the proceedings in Court
of Appeal Registry File No. CA041154, or pertaining to or connected with
the subject matter of his allegations against Judith Gwenda Corfield or her
counsel D. Djordjevich, or arising from or related to that subject matter;

3.

The order in paragraph 2 does
not apply to any order that is made against Mr. Dawson at the behest of
another party, provided that any notice of appeal, application, or other
initiating document filed in this Court by Mr. Dawson is signed by a
member in good standing of the Law Society of British Columbia and Mr. Dawson
is represented by such a member at any hearing;

4.

Mr. Dawson, and anyone acting
on his behalf, except a member in good standing of the Law Society of British
Columbia, shall not attend in person at the Court of Appeal registry and shall
not file or attempt to file by any means whatsoever any document in the Court
of Appeal Registry;

5.

Registry staff are authorized to
reject any document that is attempted to be filed in contravention of this
order.

[30]

In the result, we would dismiss the appeal as an abuse of process,
declare Mr. Dawson to be a vexatious litigant, and award costs as set out
above.  We would also dispense with Mr. Dawsons approval of the form and
content of the order.

The
Honourable Madam Justice D. Smith

The
Honourable Madam Justice Bennett

The Honourable Mr.
Justice Harris


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

LAssociation des parents de lécole Rose-des-vents v.
  British Columbia (Minister of Education),

2014 BCCA 40

Date: 20140131

Docket: CA040429

Between:

LAssociation des parents de lécole
Rose-des-vents and Joseph Pagé in his name and in the name of all citizens of
Canada residing west of Main Street in the City of Vancouver whose first
language learned and still understood is French, or who have received their
primary school instruction in Canada in French, or of who any child has
received or is receiving primary or secondary school instruction in French in
Canada

Respondents

(Respondents)

And

The Ministry of Education of British
Columbia and
The Attorney General of British Columbia

Appellants

(Respondents)

And

Conseil Scolaire Francophone de la
Columbia-Britannique

Respondent

(Respondent)

Before:

The Honourable Madam Justice Saunders
The Honourable Madam Justice Bennett

The Honourable Mr. Justice Hinkson

Supplementary reasons
to:
LAssociation des parents de lécole Rose-des-vents v. Conseil scolaire
francophone de la Colombie-Britannique
, 2013 BCCA 407,
Docket CA40429

Counsel for the Appellant:

Leonard T. Doust,
  Q.C., W. Wilman, K. Wolfe

Counsel for the Respondent,
Conseil scolaire francophone:

R. Grant, Q.C., M. Power,
B. Elwood

Counsel for the Respondent,
LAssociation and Joseph Pagé

N.M. Rouleau

Place and Date of Hearing:

Vancouver, British
  Columbia

July 18 and 19, 2013

Place and Date of Judgment:

Vancouver, British
  Columbia

September
  20, 2013

Written Submissions received:

December 6, 12, 20,
  30, 2013

Date of Supplementary Judgment:

January 31, 2014

Supplementary Reasons of the Court

Summary:

Supplementary reasons on
costs following the allowance of the appeal. The petitioners were granted a
declaration in the Supreme Court that their minority language rights under
s. 23 of the Charter had been infringed and were granted special costs on
the basis of their status as successful public interest litigants. The Province
successfully appealed the declaration and the petition was remitted to the
Supreme Court. The Province seeks an order setting aside the special costs
order as well as an order granting its costs of the appeal.

Held: order that the award of
special costs in the Supreme Court proceedings be set aside and costs be
remitted to the judge hearing the petition and an order that the parties bear
their own costs of the appeal. The bases for the judges award of special costs
to the petitioners have been obviated by the disposition of the appeal. The
issues on appeal do not merit costs to the unsuccessful party.

Supplementary Reasons of the Court:

[1]

The Province seeks an order from this Court setting aside the awards of
special costs to the L'Association des parents de l'école Rose-des-vents and Mr. Pagé,
in his name and as a representative of parents of children enrolled at l'école
élémentaire Rose-des-vents, (collectively, "the Parents") and the Conseil
Scolaire Francophone de la Columbie-Britannique (the CSF) by the Supreme
Court judge [the judge] and an order that it be granted its costs of the
appeal.

Background

[2]

The CSF is the Francophone education authority established under the
School
Act
, R.S.B.C. 1996, c. 412. It offers homogenous French language
primary and secondary instruction throughout British Columbia.

[3]

La Fédération des Parents is a non-profit organization representing 28
parent associations from the Conseil's schools and 13 parent associations from
French language pre-schools.

[4]

The Parents filed a petition naming as respondents the Ministry of
Education, the Province of British Columbia (collectively "the
Province"), and the CSF. The petition sought a declaration that the
petitioners' minority language education rights under s. 23 of the
Canadian
Charter of Rights and Freedoms
, Part 1 of the
Constitution Act, 1982
,
being Schedule B to the
Canada Act 1982
(UK), 1982, c 11 [
Charter
]
had been breached.

[5]

A month later, the CSF and others brought an action against the
Province, alleging province-wide breaches of s. 23 of the
Charter
and raising systemic challenges to the funding system of the Ministry of
Education. The Province sought an order consolidating the petition with the
action, but this was denied. The CSF supported the declaratory relief sought by
the Parents in their petition.

[6]

On October 31, 2012, the judge declared that parents living west of Main
Street in the City of Vancouver who had the right to have their children
receive primary school instruction in French were not being provided the
minority language educational facilities guaranteed to them by s. 23 of
the
Charter
.

[7]

On June 24, 2013, in reasons indexed at 2013 BCSC 1111, the judge
ordered that the Parents would have special costs from the Province in relation
to all proceedings to that date, and that the CSF would have special costs
payable by the Province in relation to all proceedings from November 4, 2011 to
June 24, 2013.

[8]

In reasons indexed at 2013 BCCA 407, this Court allowed an appeal by the
Province and set aside the order of the judge, striking certain paragraphs from
the Provinces amended response to civil claim. This Court also set aside the
judges declaration that parents living west of Main Street in the City of
Vancouver who have the right to have their children receive primary school
instruction in French are not being provided the minority language educational
facilities guaranteed to them by s. 23 of the
Charter
, and remitted
the Petition to the Supreme Court.

Discussion

[9]

The Province contends that as it succeeded on its appeal, the award of
special costs by the judge should be set aside and the matter of the costs in
the trial court remitted to the rehearing judge for determination following the
rehearing, citing as examples of such a result the decisions of this Court in
Durant
v. Leonard
, 2001 BCCA 449 at paras. 16-17 and
BMF Trading, a
Partnership v. Abraxis Holdings Ltd.
, 2004 BCCA 12 at paras. 34.

a)       Special Costs

[10]

The judge declined to make an award of special costs based upon the
conduct of the Province. Similarly, he declined such an award of costs on the
basis that such an award was justified as a
Charter
remedy, as he had
not made a determination of a breach of a
Charter
right, nor had he determined
which of the respondents, if either of them, ought to be required to remedy the
deficiency he found to exist.

[11]

The basis for his award of special costs was that the case involved a
matter of public interest where, in exceptional cases, a departure from the ordinary
costs rules is appropriate as explained in
British Columbia (Minister of
Forests) v. Okanagan Indian Band
, 2003 SCC 71, [2003] 3 S.C.R. 371 [
Okanagan
],
and
Barclay (Guardian ad litem of) v. British Columbia (Attorney General)
,
2006 BCCA 434.

[12]

Considering the factors articulated in
Victoria (City) v. Adams
,
2003 BCCA 563 at para. 188 [
Adams
], the judge concluded that the
Parents and the CSF were successful public interest litigants who qualified for
special costs. The judge also concluded that an award for special costs to the
Parents and CSF would not be unjust in the circumstances and would be in the
public interest.

[13]

Both the Parents and the CSF contend that these findings by the judge
are unchallenged and support the awards of special costs as per
Adams
. Their
contentions miss the obvious point that the bases for the judges awards of
special costs to the Parents and the CSF have been obviated by our disposition
of the appeal; the petitioners are no longer the successful litigants.

[14]

The Parents also contend that the maintenance of the special costs order
by the judge would have the same effect as if they had received an order for
advance costs at the beginning of the proceedings. We are unable to accept that
contention. The Parents neither applied for nor received such an order, and
such an order, while accepted as possible by the Supreme Court of Canada in
Okanagan
at para. 27, engages a different analysis than that set out in
Adams
.

[15]

We would therefore set aside the judges order of special costs to both
the Parents and the CSF.

b)       Ordinary Costs

[16]

The judges award of costs to the Parents was made on the basis that
they had brought themselves within the exception to the rule that costs should
be assessed and payable at the end of the proceeding. He concluded at para. 50
of his reasons that the rationale for the ordinary costs rule did not apply
because he was in a position, at that interim period, to make a costs order
that appropriately reflected the success of the Parents on the declaratory order
sought:

Given the significant prospect
that the petitioners will seek no other remedy than the declaratory relief they
have obtained, it is, in my view, appropriate in this case to now address the
question of costs. The petitioners have brought themselves within the exception
to the rule that costs should be assessed and payable at the conclusion of
proceedings. I come to that conclusion, in part, because the rationale for the
usual order, as described in [
Freshway Specialty Foods Inc. v. Map Produce LLC
,
2005 BCSC 594] is a reluctance on the part of the judge hearing interim
applications for costs to tie the hands of the trial judge where it may be
necessary to assess the conduct of the proceedings as a whole before making the
appropriate costs order. In my view, I am now in a position to make a costs
order that appropriately reflects the proceedings to date and that does not
impose an inappropriate limit on any judge hearing further applications in
relation to this matter.

[17]

The judge awarded costs to the CSF on the basis that the CSF joined with
the Province in relation to the declaratory order sought. His reasoning on this
issue is found at paras. 58 and 6061 of his reasons:

[58]      The proceedings to date in this litigation may be
divided into two phases. In the proceedings from the date of the filing of the
petition to November 4, 2011, the petitioners sought not only a declaration
that the facilities afforded to them did not meet the standard to which
s. 23 rights holders were entitled but, further, orders requiring remedial
measures, and therefore raising the question of responsibility for any
inadequacies that may be found to exist. Thereafter, they sought only that
declaratory relief which they felt would be sufficient to stimulate
negotiations between the parties with a view toward addressing any inadequacies
that might be proven.

[60]      The petitioners have now succeeded in relation to
the preliminary issue described in the judgment of November 4, 2011. In my view
it is appropriate, in the circumstances, to award them costs in relation to
proceedings before and after that date. While there remains, for negotiation or
resolution, the question whether one or the other of the respondents must take
remedial action and, if so, what action must be taken, the fact remains that
the petitioners have, at their expense, obtained relief which they expect to be
of some value to them in asserting their constitutional rights. If these
proceedings come to an end now, it would, in my view, be inappropriate to deny
the petitioners the costs of the proceedings prior to the November 4, 2011
order that the petition should proceed in stages. As a result, they are
entitled to costs throughout as against the respondent Minister and the
respondent Attorney General.

[61]      The CSF joined issue
with the Province in relation to the matter for determination as a preliminary
question pursuant to my order of November 4, 2011.  As the CSF joined with the
petitioners and assisted them in advancing their claim, the CSF can in that
respect be regarded as a successful litigant.

[18]

The Parents contend that much of the work done to date can be used if
the first instance proceeding resumes and that to the extent that there has
been any waste of resources thus far, most of such waste is attributable to the
manner in which the province has conducted its defence.

[19]

Even if much of the work done to date can be used if the first instance
proceeding resumes, or that if there has been a waste of resources thus far
that can be blamed on the Province, I am unable to agree that this assists the
Parents or the CSF on the issue of costs at this stage of the proceedings.

[20]

As we have already stated above, the bases for the judges award of
special costs to the parents and the CSF have been obviated by our disposition
of the appeal. Similarly, an award of interim costs is no longer a justified departure
from the usual costs order.  We therefore remit the issue of costs of the
Parents petition to the judge who hears the petition.

c)       Costs
of the Appeal

[21]

What then of the costs of the appeal? The Province quite properly
conceded that such a result was subject to the Courts discretion to order
otherwise where there is a good reason particular to the case and relevant to
the
lis
between the parties that makes it equitable to do so.

[22]

The Province contends that as the successful party on the appeal, it
should have its costs pursuant to s. 23 of the
Court of Appeal Act
,
R.S.B.C. 1996, c. 77, or at a minimum, not have to bear the full costs of
vindicating its rights, nor should it have to bear the costs of the
unsuccessful parties, citing
Ngo v. South Pacific Development Ltd.
, 2007
BCCA 119, where that result obtained.

[23]

The usual rules pertaining to costs in private litigation are modified
to some extent in litigation which engages broader public interest. Such is
apparent from the reasons of Newbury and Saunders JJ.A. for the majority in
Carter
v. Canada (Attorney General)
, 2013 BCCA 435, where this Court ordered that
the parties should bear their own costs of both the appeal and the proceedings in
the Supreme Court of British Columbia, despite what they considered to be
binding authority against the respondents.

[24]

In
William v. British Columbia
,

2013 BCCA 1, the
unsuccessful party was awarded the ordinary costs of the appeal in a case
involving a claim of Aboriginal title to certain lands. Public interest in that
appeal was aroused because the trial judges decision created particular
problems and might well have been followed in the British Columbia Supreme
Court absent the appeal. At paras. 41 the Court wrote:

In making this order [granting the unsuccessful
litigant costs], we recognize that this case is highly unusual, and that orders
that an unsuccessful appellant be granted costs will be extraordinarily rare.
Such an order will not be made simply because it is perceived to be in the
public interest that jurisprudence develop in a particular area of law. It
must, at the very least, be shown that the development of jurisprudence in the
area is of a critical public importance. We are satisfied that in the unique circumstances
of this case, the Court is justified in taking the extraordinary step of
awarding costs to an unsuccessful litigant.

[25]

In
Guide Outfitters Association v. British Columbia (Information and
Privacy Commissioner),
2005 BCCA 368, Hall J.A., for the Court, observed at
para. 8:

Several judgments of the courts in the province have
recognized that questions of whether the public interest is served by the
litigation may guide the court in exercising its discretion regarding costs. In
MacDonald
, supra, at para. 13, Mr. Justice Bauman referred to
factors the Ontario Law Reform Commission considered may lead a judge to rule
the parties should bear their own costs:

(a) The proceeding involves issues the importance of which
extends beyond the immediate interests of the parties involved.

(b) The person has no personal, proprietary or pecuniary
interest in the outcome of the proceeding, or, if he or she has an interest, it
clearly does not justify the proceeding economically.

(c) The issues have not been previously determined by a
court in a proceeding against the same defendant.

(d) The defendant has a clearly superior capacity to bear
the costs of the proceeding.

(e) The plaintiff has not engaged in vexatious, frivolous or
abusive conduct.

Although I consider these factors as useful ones to guide the
Court in the exercise of its discretion as to costs,
the overarching
question is still whether the normal rule is unsuitable on the facts of this
case.
...

[Emphasis added.]

[26]

Even more recently, the Supreme Court of Canada awarded the Conseil
Scolaire Francophone de la Columbie-Britannique its costs at all levels of
court despite its loss at each level of court in
Conseil Scolaire
Francophone de la Columbie-Britannique v. British Columbia,
2013 SCC 42.
That case involved an interlocutory appeal of a novel evidentiary issue. Mr. Justice
Wagner, for the majority, wrote at para. 64 that:

Although costs are usually
awarded to the successful party, there are exceptions. In this case, the
appellants have raised a novel issue in the context of a broader
Charter
challenge,
and for that reason I would award them their costs.

[27]

We do not consider that the issues on the appeal reach the level of the
issues discussed by Mr. Justice Wagner in the passage set out above in
other litigation involving the Conseil Scolaire Francophone de la
Columbie-Britannique and the Province. However, because the appeal did raise
some issues of public interest, we consider that the normal rule as to costs is
unsuitable and order that the parties bear their own costs of the appeal as
ordered in
Carter.

The
Honourable Madam Justice Saunders

The
Honourable Madam Justice Bennett

The
Honourable Mr. Justice Hinkson


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Liao v. Vandepol,

2014 BCCA 57

Date: 20140131

Docket: CA041041

Between:

Morris Liao, Li
Chu Liao, Branko Pajic, and Durda Pajic

Respondents

(Petitioners)

And

Gerrit Vandepol

Appellant

(Respondent)

And

0935312
B.C. Ltd., Vandepol Canada Inc., Carola Vandepol,
Damrak Investments Ltd., and Occupants

Respondents

Before:

The Honourable Madam Justice Garson

The Honourable Madam Justice MacKenzie

The Honourable Mr. Justice Willcock

Application to vary: An
order of the Court of Appeal of British Columbia,
dated September 6, 2013 (
Liao v. Vandepol
, Vancouver Registry No. CA041041)

Oral Reasons for Judgment

No one appearing on behalf of the Appellant:

Counsel for the Respondent:

S.R. Andersen

Place and Date of Hearing:

Vancouver, British
  Columbia

January 31, 2014

Place and Date of Judgment:

Vancouver, British
  Columbia

January 31, 2014

Summary:

The appellant, Mr. Vandepol, applies to vary an order for
security for costs.  In ordering costs, the chambers judge concluded that
the appeal was almost entirely devoid of merit.  The appellant did not
comply with that order but, instead, applied for an extension of time to file
his Notice of Application to Vary an Order of a Justice.  His application
was granted with an order that the application be heard on a certain date. The
appellant adjourned that hearing without the respondents consent. The appellant
did not appear at the hearing before this Court but filed an affidavit saying
he could not attend. The basis of Mr. Vandepols application to vary the order,
was that he lacked the funds to comply and the judge erred in his assessment of
the strength of the appeal.

Held: Application dismissed. The appellants affidavit
should be treated as an application to adjourn.  The application is
declined as it is not in the interests of justice to adjourn the matter
further.  There is no basis to conclude that the chambers judge erred in
his appraisal of the appeals merit.  In the circumstances of this case,
it is appropriate to grant the appellant an extension of time to post the
ordered security; however, should he fail to comply with the extension his
appeal shall stand dismissed.

[1]

GARSON J.A.
: Mr. Vandepol set this application to vary an order
made by a justice of this Court for hearing today pursuant to s. 96 of the
Court
of Appeal Act
, R.S.B.C. 1996, c. 77. On January 29, 2014, the Court of
Appeal Registry received an affidavit sworn by Mr. Vandepol deposing to the
fact that he would be unable to attend todays hearing as [he] was on a flight
to Europe today at 6 p.m. to deal with a family matter. He gave no further
explanation for his inability to attend court. He asked that his application be
adjourned to a date after March 3, 2014, the date of his return. He also stated
in this affidavit that if the Court was unwilling to adjourn the hearing please
accept this material as what I would have said to the court had I been here in
person.

[2]

Mr. Andersen, counsel for the respondents on the appeal and on this
application, advised the Court that he was unaware of Mr. Vandepols request
for an adjournment, (if that is what it is), prior to being so advised by the
Court at todays hearing. He submitted that the hearing should proceed, despite
Mr. Vandepols absence. He noted that he was in the Supreme Court with Mr.
Vandepol on January 29, 2014, in connection with the underlying foreclosure
proceedings but at that time Mr. Vandepol made no reference then to his
inability to attend todays hearing.

[3]

The Order that Mr. Vandepol seeks to vary is an order for security for
costs made by Mr. Justice Groberman (in chambers) on September 6, 2013. The
terms of the order are as follows:

1.

on or before
October 7, 2013, Gerrit Vandepol deposit with the Registrar of the Court of
Appeal security for costs of this appeal in the amount of $7,500.00;

2.

the appeal be
and is hereby stayed until the security so ordered is deposited;

3.

if the security is not deposited as ordered, the Petitioners/Respondents
Morris Liao, Li Chu Liao, Branko Pajic and Durda Pajic are at liberty to apply
for an order that the appeal be dismissed as abandoned.

[4]

Mr. Vandepol did not comply with this order. Instead, he applied on
October 21, 2013, for an extension of time to file and serve his Notice of Application
to Vary an Order of a Justice. His application for an extension of time to file
this application to vary Mr. Justice Grobermans was heard by Madam Justice
MacKenzie. She made the following order:

1.

The Appellant
file and serve his Notice of Application to Vary an Order of a Justice (the
Application) on or before 4:00 p.m. on October 28, 2013.

2.

In regard to the
Application, the Appellant file and serve his motion book on or before 4:00
p.m. on November 12, 2013. If the Registry refuses to accept the motion book
for filing, the Appellant will have until 4:00 p.m. on November 18, 2013 to
remedy any such defects.

3.

The appeal will
be struck as dismissed without a further hearing if the Appellant fails to
comply with either of the deadlines set out in paragraphs 1 or 2 of this Order.

4.

The Application
will be scheduled for 1 hour and will be heard at 10:00 a.m. on January 15,
2014 or such other date as counsel may agree to in writing.

5.

If the Appellant
has counsel, then his counsel will attend the hearing of the Application.

6.

The Application
of the RespondentsPetitionersfiled October 11, 2013 is adjourned generally.

7.

Approval as to the form of this Order by Gerrit Vandepol is dispensed
with.

[5]

Despite Madam Justice MacKenzies order that the application be heard on
January 15, 2014, we are told by Mr. Andersen that Mr. Vandepol adjourned the
hearing, without Mr. Andersens consent, to todays date.

[6]

In these circumstances we determined to treat Mr. Vandepols affidavit
as an application for adjournment. We then concluded that it was in the
interests of justice to decline that adjournment and we proceeded today to hear
the application to vary this security for costs order made by Mr. Justice
Groberman.

Nature of the Application

[7]

The order made by Mr. Justice Groberman, in chambers, was an order for
security for costs. The underlying appeals are in respect to a summary judgment
on a promissory note (appealed without leave) and an associated order within a
foreclosure proceeding (appealed with leave) on the appellants personal
covenant on a mortgage.

[8]

The appellant says he is without funds and the order that is the subject
of this application deprives him of his right to bring a meritorious appeal.
Mr. Justice Groberman decided that the appeal was almost completely devoid of
merit. He ordered that Mr. Vandepol post $7,500.00 as security, as already
noted. He stayed the appeal pending the payment of that security. Also, as
already noted, Mr. Vandepol has not complied with the order.

[9]

The order for security for costs relates to two separate orders but they
were made in one proceeding: Supreme Court Action number. H13048. I turn to the
underlying facts and chambers proceedings.

Background Factsd

[10]

The lands that are the subject to this foreclosure and related
proceedings were purchased on February 29, 2012, for $1,675,000. The purchaser
was a numbered company referred to in these proceedings as 935. 935 was formed
by Vandepol and the petitioners for the purpose of acquiring the lands.

[11]

The purchase was financed by a first mortgage in favour of Pacific Coast
Mortgage Investment Corporation in the amount of $1.1 million with monthly
payments (interest only) of $8,025.00. The respondents, Mr. Liao and Mr. Pajic,
were covenantors on that first mortgage.

[12]

The respondents (petitioners below) provided the balance of the purchase
price by way of a second mortgage on the principal amount of $300,000.00
together with a promissory note in the amount of a $400,000.00, payment of which
was guaranteed by Mr. Vandepol.

[13]

Mr. Vandepol contributed $5,000.00 of his own funds to this purchase.

[14]

The agreement between the parties was that Mr. Vandepol would be
entitled to collect on the rents from the land. He would be responsible for the
operation of the property. 935, the purchaser, entered into a written lease of
the land to Vandepol Canada Inc. The monthly rent, $12,025.00 payable to 935
was intended to cover 935s mortgage payment obligations owning on the first
and second mortgage. Vandepol Canada Inc. rented out the residential property
to Vandepol and his daughter. The farm buildings were rented to third parties
for storage purposes. There is a dispute on the evidence as to the amount of
rent that was generated by the lands. What is not in dispute is that Vandepol
did not pay the rent to 935. 935 had no other source of income, and therefore
it defaulted on the mortgage payments.

[15]

When 935 ran out of money a further promissory note in the amount of
$50,000.00 was also guaranteed by Mr. Vanderpol in respect of a further advance
by the respondents. (the July promissory note)

[16]

The Petitioners filed their petition on April 16, 2013, seeking in
respect to the second mortgage, among other things, an order
nisi
, an
order declaring that the amount due and payable under the mortgage was
$387,000.00 plus per diem interest of $98.63 interest at 12%., judgment against
935, judgment against Gerit Vanderpol pursuant to his covenant, and an order
for judgment against 935 and Vandepol for default under the promissory notes
dated May 16, 2012 and July 10, 2012. The petitioners also sought the
appointment of a receiver.

[17]

On June 7, 2013, Madam Justice Brown granted all relief sought in the
petition. She made four orders which may be summarized as follows:

a)

The Order
Nisi
- she granted an order nisi and an order that 935
and Vandepol pay the Petitioners the sum of $427,718.00 on their personal
covenants plus costs.

b)

Conduct of Sale - she made a separate order for immediate sale granting
conduct of sale to the Petitioners.

c)

Judgment on the promissory notes - (the claim on the promissory notes
was included in the foreclosure petition) In a third order, pursuant to the
promissory notes dated May 16, 2012, and July 10, 2012, she ordered 935 and
Vandepol be jointly and severally liable to pay $620,050.41 plus interest.
(Only the orders made against Mr. Vandepol personally are under appeal.)

d)

Order appointing
a receiver - in the fourth order she appointed a receiver to collect the rents.

[18]

In her reasons for judgment, Madam Justice Brown noted that Vanderpol
and Vanderpol Canada Inc. opposed the application. They had argued that the
applications should be referred to the trial list or alternatively they should
have the opportunity to cross-examine Mr. Liao on his affidavit.

[19]

She recounted that Mr. Vanderpol asserted that he and the petitioners
reached a new agreement in September 2012, and that no moneys were currently
payable under the mortgage and notes. She noted that the issue before her was
whether there was a
bona fide
triable issue, or whether on the evidence
there was a dispute as to the facts or law which amounted to a defence to be
tried. After reviewing the evidence of the alleged amending or extension
agreement the judge concluded that there was no enforceable agreement to vary
the terms of the mortgage and promissory notes, and that there was no agreement
in writing as was required by s. 59(3) of the
Law and Equity Act
,
R.S.B.C. 1996, c. 253. She concluded that there was not a triable issue and
refused to refer the petition to the trial list.

[20]

At the chambers hearing before Madam Justice Brown, Mr. Vanderpol had
argued about the rate of interest, (he said it amounted to a criminal rate of
interest, however, the Supreme Court chambers judge was satisfied that it did
not); and also that there were some negotiations towards refinancing the
arrangements between the parties. Mr. Vanderpol refers to a memorandum and draft
agreements that he says evidence in writing the extension agreement. The
respondents acknowledge that negotiations towards an extension took place but
they deny that any agreement was concluded. In refusing to refer the matter to
the trial list, the chambers judge found as a fact, that no agreement was
reached to renegotiate the loans.

[21]

On July 5, 2013, Mr. Vandepol filed a Notice of Application for Leave to
Appeal. The relief he sought was an order vacating the Order
Nisi
of
June 7, 2013, and orders setting aside the orders appointing a receiver,
granting judgment on the promissory notes, and as to conduct of sale.

[22]

On September 6, 2013, the application for leave to appeal came on before
Mr. Justice Groberman.

[23]

First, Mr. Justice Groberman decided that Mr. Vanderpol did not require
leave to appeal the summary judgment granted on the promissory notes. He made
consequential orders regarding the filing of the appeal record and other
matters. This order is not the subject of this application.

[24]

With respect to the foreclosure, Mr. Justice Groberman noted that an
order in a foreclosure proceeding does require leave (s. 7
Court of Appeal
Act
and Rule 2.1(vii)). He noted that because Mr. Vandepol no longer sought
any relief to stay or otherwise affect the foreclosure proceeding he considered
that the only question remaining on appeal was Mr. Vandepols liability on the
personal covenant. Largely because the associated appeal of the judgment on the
promissory notes was proceeding as of right, Mr. Justice Groberman granted
leave. He explicitly limited leave to the judgment on the personal covenant. No
leave was granted from the order
nisi
of foreclosure except to the
extent that that order includes judgment on that personal covenant. (at para
11).

[25]

Then he turned to the cross application for security for costs.

[26]

Mr. Justice Groberman gave brief reasons on this application:

[14]      This is an application for security for costs. The
law on security for costs of the appeal is fairly straightforward. In general
the onus lies on the appellant to demonstrate why security should not be
granted. At least where an individual appellant is involved, the Court will
often decline to order security for costs where a meritorious appeal would be
stifled by the order of security.

[15]      I am satisfied from the background of this case and
from the affidavit of Mr. Vandepol that he does not have easy access to assets
or income that would allow him to post security for costs. If this were a
meritorious appeal, I would therefore not make an order for security for costs.

[16]      I have heard a great deal of argument this morning
on the merits of the appeal. It is not an appeal that has no prospect
whatsoever of success but it is almost in that category. The appeal will be a
very, very difficult one to succeed on. On the face of it, the trial judge made
a discretionary order to decide a matter summarily rather than referring to the
trial list. The reasons that she gave, particularly the absence of an agreement
in writing as required the
Law and Equity Act
, R.S.B.C. 1996, c. 253,
appear on their face to be very sound reasons.

[17]      I have granted leave to appeal the judgment of the
personal covenant on the basis that it is closely intertwined with an appeal
for which leave is not needed. I have concluded that, while there may be an
iota of merit in the appeal, it is an appeal almost completely devoid of merit.
I am not convinced that ordering security for costs would prevent an otherwise
meritorious appeal from proceeding.

[18]      In the circumstances, notwithstanding that Mr.
Vandepol has limited ability to raise funds, I am ordering security for costs.
Security has been sought in the amount of $15,000. I am prepared to grant
partial security in this case, and I am ordering that security in half that
amount: $7,500.

[19]      The normal order of this Court is that proceedings
are stayed until the security is deposited. That security shall be deposited by
the close of business on October 7, 2013. The proceedings are stayed until such
time as the security is deposited.

[20]      I know that the
respondent has asked for a guillotine order, i.e. an order dismissing the
action in the event that security is not furnished. That is not the usual order
of this Court. I am making an order only that security be deposited. In the event
that security is not deposited by that date, then Mr. Andersen is at liberty to
apply in chambers to have the appeal dismissed for non-compliance.

[27]

The order for security for costs applies to both the appeal (as of
right) on the promissory notes, as well as the appeal on which leave was
granted on the order
nisi
on the personal covenant.

[28]

The appellant says that he should not be required to pay security for
costs.

[29]

He argues that he should not be precluded from pursuing a meritorious
appeal for the reason that he is without financial ability to post security. He
says that the partnership dispute (that is the dispute with the respondents)
resulted in his inability to generate income from the business on the property.
He argues It is just not fair for the petitioner/applicants to take away the
appellants ability to generate income and demand security for costs with
respect to an appeal that is important not only to the applicant, but to the
practice of law in British Columbia. This statement is made despite the
evidence that the income was income of 935, as I understand it, intended to
cover its mortgage commitments.

[30]

Mr. Vandepol also argues in his affidavit in support of his adjourn
application and in his chambers brief that the Supreme Court judge erred in
granting summary judgment on the promissory notes because he had a meritorious
defence to that claim. He says that his counsel was unaware until the hearing
before Madam Justice Brown that the claim on his guarantee on the notes was
included in the foreclosure proceeding. He contends, as already noted, that he
had a good defence to the claims referring again to the agreements in writing
that evidence the extension. These arguments made before Madam Justice Brown
were also repeated again before Mr. Justice Groberman, but without success.

[31]

Mr. Justice Groberman concluded that the appeal was almost entirely
devoid of merit. This Court will only discharge or vary an order of a single
justice, pursuant to s. 9(6) of the
Court of Appeal Act
if the justice
was wrong in law, he misconceived the facts, or certain relevant information
was not brought to his attention.

[32]

It is not alleged that Mr. Justice Groberman erred in law. Rather as I
understand Mr. Vanderpols argument, he says that the judge erred in his
appraisal of the strength of the appeal. I see no basis on which to find that Mr.
Justice Groberman erred in principle or misapprehended the facts relevant to
the strength of the appeal.

[33]

I would dismiss the application to vary Mr. Justice Grobermans order
requiring Mr. Vanderpol to post $7,500.00 as security for costs.

[34]

The time has long since passed for Mr. Vanderpol to post the security.
Mr. Andersen in commendably fair submissions indicated that one possible order
this court might make is to grant Mr. Vanderpol a short extension to post the
security.

[35]

I am of the view that it is appropriate to grant Mr. Vanderpol a further
indulgence by extending the time to post security to February 14, 2014. In
doing so, however, the appeal itself will continue to be stayed. This Court
generally frowns upon so called guillotine orders However, in the unusual
circumstances of this case, it is my view that it is unfair and unnecessary to
require the respondents to re-attend in chambers, and apply once again to strike
this appeal, in the event that Mr. Vanderpol fails to comply with the order I
would make today. Accordingly, I would order that this appeal should stand
dismissed in the absence of compliance with Mr. Justice Grobermans order by
February 14, 2014.

[36]

I would order that it is not necessary to obtain Mr. Vandepols approval
of the form of this order and I would ask Mr. Andersen to forthwith draft and
enter this order and notify Mr. Vandepol of the terms of this order.

[37]

A. MACKENZIE J.A.
: I agree.

[38]

WILLCOCK J.A.
: I agree.

[39]

GARSON J.A.
: It is ordered that there be an extension of time for
Mr. Vandepol to post security to February 14, 2014.

[40]

This appeal will stand dismissed if he fails to post the security
ordered by Mr. Justice Groberman on or before the close of business on February
14, 2014.

[41]

It is not necessary to obtain his approval on this order, and I also
require Mr. Andersen to forthwith draft and enter the order and to immediately
notify Mr. Vandepol of the terms of the order.

[42]

I will also order that the order may be served by email. Mr. Andersen
has indicated that he has Mr. Vandepols email address.

The
Honourable Madam Justice Garson


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

R. v. Dreger,

2014 BCCA 54

Date: 20140131

Docket: CA041105

Between:

Regina

Respondent

And

Corrina Dawne
Dreger

Appellant

Before:

The Honourable Mr. Justice Tysoe

The Honourable Madam Justice Bennett

The Honourable Mr. Justice Goepel

On appeal from: An
order of the Provincial Court of British Columbia,
dated May 3, 2013, (
R. v. Dreger
, Nanaimo Registry No. 75876-1)

Oral Reasons for Judgment

Counsel for the Appellant:

F. Arbabi

Counsel for the Respondent:

S. Hulko

Place and Date of Hearing:

Vancouver, British
  Columbia

January 28, 2014

Place and Date of Judgment:

Vancouver, British
  Columbia

January 31, 2014

Summary:

The appellant pleaded guilty
to fraud and was sentenced to five years imprisonment. She appealed her
sentence. Held: The appeal was granted and the sentence was reduced to four
years imprisonment. The sentencing judge erred in treating the appellants
perceived lack of remorse as an aggravating factor. The restitution order made
by the sentencing judge was upheld.

[1]

BENNETT J.A.
: Corrina Dreger was employed for seven years by
Collins Custom Contracting Corporation (the Company), a small family owned
company located in Parksville, B.C. Ms. Dreger was the bookkeeper for the
company and, in that trusted position, defrauded her employer of $245,514.05,
over a period of about seven years. She was sentenced to five years
imprisonment, and now applies for leave to appeal this sentence.

I. FACTS

[2]

The Company has been in the business of building custom, high end homes
for 35 years. John Collins is the principal of the company, which has about 47
employees. Ms. Dreger was hired on April 29, 2002. She set up the accounting
and bookkeeping systems, using Simply Accounting. This program allows for
credits and debits to be allocated to different categories, including
shareholders loans. Only Ms. Dreger and Mr. Collins had full access to the
accounts. Mr. Collins trusted Ms. Dreger implicitly. When he was away he would
leave signed blank cheques for her to deal with payments that needed to be
made. She handled millions of dollars each year.

[3]

In December 2003, Ms. Dreger wrote herself two cheques: one for $400 and
one for $100. She posted those cheques to shareholders loans. Over the course
of the next seven years, Ms. Dreger took money from the company to pay for her
Visa and other household bills, and sometimes double paying herself. She took approximately
$1900 in 2005, $700 in 2006, $16,000 in 2007, $24,000 in 2008, $47,000 in 2009,
$63,000 in 2010, $100,000 in 2011, and $4,000 in 2012 before she was caught.

[4]

Her Visa bill reflects that she spent money on day-to-day living
expenses, trips, lottery tickets, cash advances, clothing, restaurants, and so
on. Her salary began at $14.00 per hour in 2002, and had risen to $17.00 per
hour in 2012.

[5]

During the course of her employment, Mr. Collins paid for her to attend
hockey games in Vancouver, paid to finish the home she purchased with her
parents, bought appliances for the home, gave her a generous leave when her
father was ill and loaned her a down payment for her house.

[6]

Each year the significant losses endured by the company as a result of
the fraud came to light at the financial year end (January 31), which took away
from profit-sharing and bonuses for other employees and put Mr. Collins in a
position where he did not know if he could continue with projects.

[7]

When he asked Ms. Dreger about the financial difficulties, she blamed
the losses on Mrs. Collins extravagant spending habits. Unfortunately, Mr.
Collins believed Ms. Dreger, and not his wife. When the fraud came to light,
the marriage ended, in part because of Mr. Collins misplaced distrust of his
wife.

[8]

Ms. Dregers brother, Ken Dreger, was the outside accountant responsible
for auditing the companys books. When he asked her about some of the expenses,
she told him the company had a bad spending habit. There is no suggestion that
Mr. Dreger was complicit in the fraud.

[9]

In March 2011, Ms. Dreger went on stress leave. A new bookkeeper, Ms.
Ruf, was hired to replace her. Ms. Ruf began to go through the accounts and
bank reconciliations. She found a number of problems with the accounts,
including a Visa card that had significant payments made to the account, but
could not be located within the company. After considerable checking, she and
Mr. Collins discovered that Ms. Dreger was the owner of the Visa card.

[10]

On May 19, 2011, Mr. Collins contacted the RCMP and retained a forensic
accounting firm to conduct a complete audit. The fraud in excess of $245,000
was discovered.

[11]

Mr. Collins confronted Ms. Dreger with the fraud on May 31, 2011.
Initially, she denied the acts, but then admitted she committed the fraud.

[12]

She was charged on October 4, 2012, and pleaded guilty on January 29,
2013. She consented to a civil judgment in the sum of the fraud, eliminating the
need for a civil trial in the matter.

[13]

An order for restitution was made as part of the sentence. Ms. Dreger
has paid nothing towards restitution since being caught in May 2011.

A. Ms. Dregers Circumstances

[14]

Ms. Dreger is now 45 years old. She grew up in a stable family
environment, although the family moved frequently for her fathers work. She
completed high school in Nanaimo and worked at a variety of jobs. Her son was
born in 1992. Unfortunately, her sons father, her fiancé, was killed in a
trucking accident in 1994. She returned to college in her early thirties. When
she was hired by Mr. Collins in 2002, Ms. Dreger was around 33 years old. She
had just finished an office administration and bookeeping course at Malaspina
College, and was the single parent of a ten year old son.

[15]

When she began stealing from Mr. Collins, she was living a very frugal
existence. She came to enjoy the more comfortable lifestyle she had as a result
of stealing from Mr. Collins, and her fraud escalated significantly.

[16]

Ms. Dreger reunited with an old friend and they married in June 2009.
Unfortunately, her new husband died in November 2009 from a diabetes related
illness.

[17]

Ms. Dregers father died after the offences were revealed, but before
she was sentenced.

[18]

She has been diagnosed with an anxiety disorder, and takes medication
for this condition.

[19]

Ms. Dreger submitted a letter to the sentencing judge expressing her
remorse.

I cannot express how ashamed I am of the actions and choices
that I had taken that have brought me to this point in my life and I regret all
of the pain, the hurt and the broken trust that I have caused to John Collins
and wish that I could take it all back.

I used to blame how John treated me as to why I did it but I
can't blame others as no one forced me to do what I did. Getting caught helped
me face how bad things had gotten in my life. I am not a bad person and I am
working at changing my life as I don't want what I did to define me or my life.
I accept whatever the court feels is an appropriate punishment and I look
forward to paying for my crime and moving past it.

I would like to take this time to apologize to the court, to
Mr. Collins, and to my family for all of the trouble and turmoil that I have
caused. I'd also like to apologize to my family for the shame and the
embarrassment that I have brought to them and to thank them for all of the
support, understanding, and unconditional love that they have given to me in
spite of this.

Thank you.

[20]

On the date of the sentencing, the Crown produced a print-out from a
website blog that had been written by Ms. Dreger. In it she talks about her
life, and her dream job. She then makes unfounded and derogatory allegations
against her employer, and indicates his conduct is why she left her job. She does
not mention the fraudulent acts.

B. Victim Impact

[21]

The offence had a serious impact on Mr. Collins. His business was significantly
damaged, and he is still trying to rebuild it. His marriage fell apart and, he
lost his family. He feels completely betrayed by Ms. Dregers actions. He
stated:

It is impossible to put into
words the amount of stress, strain and anguish that I have endured and am still
enduring every day. The large financial losses are just a small part of this.
The personal loss to me can never be repaired.

[22]

At the sentencing hearing, counsel agreed that the normal range of
sentence was three to five years. Counsel for Ms. Dreger sought a conditional
sentence order and the Crown sought a four year sentence.

C. Sentencing Judges Reasons

[23]

The sentencing judge set out the circumstances of the offence, and then
discussed the sentencing range, which, as noted above, was agreed to be between
three and five years. He referred to this courts decision in
R. v. Gaugler
,
2011 BCCA 508, and quoted this court in terms of the range:

The Crown sought a sentence in
the range of three to five years. This position, no doubt, reflects the guilty
plea and other mitigating factors, as the outside end of the sentencing range
is potentially much higher.

The sentencing judge then said, I think it more accurate to
say that the range of sentence in this kind of case
where there is a guilty
plea
is three to five years (emphasis added).

[24]

He then said that the second mitigating factor was that Ms. Dreger had
no criminal record. He said this was true of many of the cases put before the
court. He concluded that this was not a mitigating factor that could reduce the
sentence below three to five years.

[25]

He then considered the aggravating factors, which I have summarized as
follows:

1) Ms. Dreger exposed her brother to
the risk of criticism and perhaps professional disciplinary proceedings.

2) The offences had a severe impact on
Mr. Collins and his company, which is an aggravating circumstance under s.
380.1 of the
Criminal Code
, R.S.C. 1985, c. C-46.

3) The offence was a breach of trust.

4) There had been no attempt at restitution.

5) Her expression of remorse lacked
genuineness.

[26]

As for the impact of the offence on Mr. Collins, and specifically its
role in the break-up of Mr. Collins marriage, the sentencing judge said this:

[20]      Mr. Collins and his wife have since parted company.
He takes responsibility for that. He says that a very significant factor in the
breakup of their marriage was the false accusation which he levied against his
wife and, as he puts it, the fact that he chose to believe Ms. Dreger rather
than his wife. I can well imagine the agony that has caused him.

[21]      Sadly, even at this
trial, Ms. Dreger does not take responsibility for that. She says, through her
counsel, that the Collins marriage was on the rocks anyway. That is very
distressing.

[27]

In submissions, counsel for Ms. Dreger had said this about the marriage:

And she felt that this marriage
was already deteriorating. It was her understanding well before the fraud was
discovered that Mr. Collins and his spouse had been separated and that the
ultimate demise of the marriage, shes certainly not questioning it was
contributed to by her fraud, but she wants it to be clear that it may be a
mistake for Your Honour to conclude that because of her fraud, that caused the
marriage to end. Life is much more complicated than that, and I submit that her
version of it perhaps has a ring of

ring of truth to it.

[28]

The sentencing judge later found that this submission detracted from the
genuineness of her expression of remorse because she did not accept
responsibility for the impact the fraud had on Mr. Collins marriage.

[29]

In assessing the authenticity of Ms. Dregers remorse for the fraud the
sentencing judge said:

[24]      A fourth aggravating factor is my concern at the
expression of remorse made by Ms. Dreger here at the sentencing hearing. When
first confronted with her fraud by Mr. Collins, she said, I am sorry. I dont
know why I did it. Here at the sentencing hearing, she made a much more
fulsome expression of remorse for the fraud but not, as I hear her, for the
impact on Mr. Collins marriage.

[25]      I am concerned about
the sincerity of that expression of remorse by the fact that there is, even
today, posted on a website used by Ms. Dreger, a public statement accusing Mr.
Collins of sexually harassing her and mentally abusing her during the course of
her employment. The fact that she could make that allegation in a public forum,
even today, indicates to me a lack of sincere concern for the impact which her
crime has had upon Mr. Collins.

[30]

The sentencing judge concluded that these aggravating factors
justified a sentence at the upper end of the range, and as noted, imposed a
sentence of five years.

II. LAW

[31]

At the commencement of the offence in 2003, the maximum penalty for
fraud pursuant to s. 380 of the
Criminal Code
was ten years. On
September 15, 2004, the legislation was amended and the maximum penalty
increased to 14 years. At the same time, s. 380.1 came into force, which
codified aggravating circumstances for the purpose of sentencing in fraud
cases. Section 380.1 was amended again on November 1, 2011, adding more
aggravating circumstances, one of which was relied on by the sentencing judge and
is set out below:

(
c.1
) the offence had
a significant impact on the victims given their personal circumstances
including their age, health and financial situation.

[32]

The sentencing judge was correctly told that the maximum sentence was
ten years.

[33]

Section 11(i) of the
Canadian Charter of Rights and Freedoms
states:

11. Any person charged with an offence has the right

(i) if found guilty of the
offence and if the punishment for the offence has been varied between the time
of commission and the time of sentencing, to the benefit of the lesser
punishment.

[34]

The question of whether the increase in the available maximum penalty
(14 years from ten years) fell under s. 11(i) was not argued in this appeal,
and I do not think it affects the resulting sentence as the sentencing judge
was aware of the ten year maximum.

[35]

It also was not argued that the change in the
Criminal Code
sections presented a
Charter
issue, however, given the sentencing
judges reliance on s. 380.1(
c.1
), which was not in force at the
time the offences were committed, it is appropriate to address it. In terms of
the recent codification of aggravating factors, it is clear that the effect of
fraud on vulnerable victims would have been an aggravating factor that could
have been taken into account by a sentencing judge regardless of the amendment.
Thus, it was an appropriate factor for the sentencing judge to consider in this
case.

III. THE PARTIES POSITIONS

[36]

Ms. Dreger submits that the sentencing judge erred in his analysis of
the submissions before him, and in his reliance on factors which were not, in
law, aggravating factors. She submits that the sentence should be reduced to
three years.

[37]

The Crown submits that the sentencing judge did not err, but if he did,
the sentence was not demonstrably unfit and the appeal should be dismissed.

IV. DISCUSSION

[38]

The standard of appellate review of a sentence is well-known, and set
out in
R. v. C.A.M.
, [1996] 1 S.C.R. 500 at para. 90:

Put simply,
absent an error in principle, failure to consider a relevant factor, or an
overemphasis of the appropriate factors, a court of appeal should only
intervene to vary a sentence imposed at trial if the sentence is demonstrably
unfit. Parliament explicitly vested sentencing judges with a
discretion
to
determine the appropriate degree and kind of punishment under the
Criminal
Code.

[39]

I would first like to discuss the so-called range of sentence. At the
time of the commission of these offences, there was no minimum sentence (one
was introduced in 2011 for offences where the sum stolen was in excess of $1
million). Therefore, the theoretical range of sentence was a suspended sentence
(or fine) and ten years (now 14) in prison.

[40]

The range of sentence is, in part, an expression of the parity principle
found in s. 718.2(
b
) of the
Criminal Code
:

(
b
) a sentence should be similar to sentences
imposed on similar offenders for similar offences committed in similar
circumstances.

[41]

In
R. v. A.J.C.; R. v. Joseph
,

2004 BCCA 268 at para. 35,
186 C.C.C. (3d) 227, Finch C.J.B.C. said that sentencing ranges serve merely
as guidelines and are not conclusive of the appropriate sentence in any given
case. In
R. v. D.D.
(2002), 163 C.C.C. (3d) 471 (Ont. C.A.) at para.
33, Moldaver J.A. said:

Before going further, I wish to
emphasize that the ranges which I have identified are not meant to be fixed and
inflexible. On the contrary, sentencing is not an exact science and trial
judges must retain the flexibility needed to do justice in individual cases. The
suggested ranges are merely guidelines designed to assist trial judges in their
difficult task of fashioning fit and just sentences in similar cases.

[42]

Indeed, in
R. v. Nasogaluak
,
2010 SCC 6, the Court said, at para. 44:

The wide discretion granted to
sentencing judges has limits. It is fettered in part by the case law that has
set down, in some circumstances, general ranges of sentences for particular
offences, to encourage greater consistency between sentencing decisions in
accordance with the principle of parity enshrined in the
Code
.
But it
must be remembered that, while courts should pay heed to these ranges, they are
guidelines rather than hard and fast rules. A judge can order a sentence
outside that range as long as it is in accordance with the principles and
objectives of sentencing. Thus, a sentence falling outside the regular range of
appropriate sentences is not necessarily unfit.
Regard must be had to all
the circumstances of the offence and the offender, and to the needs of the
community in which the offence occurred.

[Emphasis added.]

[43]

In this case, the sentencing judge
concluded that the range of sentence for fraud with a guilty plea was three to
five years. In finding this, he relied on this courts observation in
Gaugler
,
noted above. In concluding this was the appropriate range, the sentencing judge
failed to take into account that Ms. Gaugler stole $2.4 million dollars over a
ten-year period, which is the rationale behind saying the range could have been
much higher. She received a sentence of four years. Thus, the sentencing judge
began with a wrong premise, and as a result, did not give sufficient weight to Ms.
Dregers guilty plea.

[44]

I turn to the aggravating and mitigating circumstances. These factual
circumstances help the judge to craft a sentence, along with the principles of
sentencing, and in particular, the fundamental principle of proportionality (s.
718.1,
Nasogaluak
at paras. 41-42) where the judge examines the moral
blameworthiness of the offender and the circumstances of the offence.

[45]

Simply, an aggravating factor is one that will tend to increase the
severity of the sentence, whereas a mitigating factor will weigh in favour of a
more lenient sentence. If the accused disputes an aggravating factor the Crown
has the burden of proving the factor beyond a reasonable doubt:
R. v.
Gardiner
, [1982] 2 S.C.R. 368. If the Crown disputes a mitigating factor,
the accused has to prove the factor on a balance of probabilities:
s. 724(3)(
d
) of the
Criminal Code
. The accused is not
entitled to rely on disputed mitigating factors in the absence of such proof:
R.
v. Holt
(1983), 4 C.C.C. (3d) 32 at 51-52 (Ont. C.A.) , leave to appeal
refd [1983] S.C.C.A. No. 474.

[46]

In this case, the sentencing judge correctly considered the breach of
trust as an aggravating factor. He also correctly identified the significant
detrimental effect on Mr. Collins and his company as an aggravating factor.
While there was no evidence that Ms. Dregers brother was facing criticism or
disciplinary proceedings, it is a reasonable inference that the outside auditors
would likely face difficulties as a result of her conduct. Ms. Dreger did not
dispute this fact when alleged by the Crown, and in my view, the effect on
others is a relevant circumstance to consider.

[47]

Where the sentencing judge erred is in his treatment of Ms. Dregers
remorse. It is clear from the reasons that the sentencing judge did not accept
her expression of remorse as genuine, which he is entitled to do, however, he
went on to treat this as an aggravating factor.

[48]

The sentencing judge considered the fact that she did not make any
effort at restitution, that, in his view, she did not accept responsibility for
the demise of Mr. Collins marriage, and that she posted the blog. The judge
considered these as factors that detracted from her expression of remorse
and
as aggravating factors
.

[49]

Courts of appeal are not consistent on the question of whether lack of
remorse can ever be an aggravating factor in sentencing. The New Brunswick
Court of Appeal in
R. v. Nash
2009 NBCA 7, leave to appeal refd [2009]
S.C.C.A. No. 131, stated that a failure to express remorse could only be
considered an aggravating factor in exceptional circumstances. The Nova Scotia Court
of Appeal has set out a similar principle:
R. v. Hawkins
, 2011 NSCA 7.

[50]

However, this Court has been clear that lack of remorse is not an
aggravating factor. In
R. v. Muhammad
, 2004 BCCA 396 at paras. 9-10,
Hall J.A. said this:

[9]        I had occasion, recently in a case, to refer to
the
Zeek
[
R. v. Zeek
, 2004 BCCA 42] case and other cases that
dealt with this difficult question of how remorse is to be treated in questions
of sentence. The principle that I gleaned from the cases is that lack of
remorse is not an aggravating factor, but if an accused displays remorse that
is something that can work in favour of an accused person. The way I would put
it is that lack of remorse is a somewhat neutral factor in sentencing, but if
an accused demonstrates remorse, it may lead the court to conclude that the
accused has begun on the road to rehabilitation by recognizing that the conduct
he or she engaged in was unacceptable. To that extent remorse can be treated as
a positive circumstance that might reduce what would be an otherwise fit
sentence for a particular offence.

[10]      In the instant case, I
consider that the learned trial judge fell into error when she stated that lack
of remorse could be an aggravating factor. That however, leaves the question at
large as to whether or not that particular error should lead to the allowance
of this appeal. I note that in the
Zeek
case, although it was found to
be error to treat lack of remorse as an aggravating circumstance, that appeal
was dismissed because the court was not persuaded that the sentence imposed was
an unfit one.

[51]

The issue was not fully argued in this appeal, thus I would not entirely
close the door to an argument that a lack of remorse could be an aggravating
factor in the most exceptional case; where, for example, it demonstrated that
the accused, by virtue of his attitude toward his offending, was a risk to the
public. If such an exception exists, this case does not fall within it, and in
my respectful opinion, the sentencing judge erred by treating a lack of remorse
as an aggravating factor.

[52]

The next question is whether those errors led the sentencing judge to
impose a demonstrably unfit sentence. In my respectful view, it did.

[53]

We have been referred to a number of sentencing decisions from all
courts in this province. Each case will turn on its own facts. We were provided
with sentences within the range of three to five years, and while I agree that
this offender fits within that range, it would be incorrect to see this as an
inflexible set range of sentence.

[54]

This Court examined the availability of different ranges of sentences
for fraud in
R. v. Bodnarchuk
, 2008 BCCA 39 at para. 11:

[11]
Burkart
[2006 BCCA 446] and
Dickson
[2007
BCCA 561] recognize that, in accordance with the
Criminal Code
and the
authorities, conditional sentences should be considered in every case where the
minimum criteria are met. As the Chief Justice said in
Dickson
(at para.
35):

Applying the law as laid down in
Proulx
, the proper
approach when the minimum criteria for a conditional sentencing order are met
is to consider, taking into account the fundamental purpose and principles of
sentencing, whether there are sufficient reasons for not imposing a conditional
sentence, or whether there are considerations which would mandate imprisonment,
even though a conditional sentencing order would otherwise be appropriate.
There is no presumption one way or the other.

See also paras. 63-64, where the Chief Justice said:

This Court has said more than once that general deterrence
is central to the sentencing process in cases involving large scale frauds with
serious consequences for the victims. In many cases, convictions for serious
fraud have led to the imposition of custodial sentences: see
R. v. Khan
,
[2002] B.C.J. No. 2950, 2002 BCCA 703 and
R. v. Autenreith
, [2003]
B.C.J. No. 2291, 2003 BCCA 521.

However, in cases of serious fraud or serious theft where
there are extreme personal mitigating circumstances, the courts have held that
the principle of general deterrence can be satisfied by a conditional sentence:
see
R. v. Bunn
, [2000] 1 S.C.R. 183,
R. v. Kratky
, [1997] B.C.J.
No. 3167 BCSC and
R. v. Anderson-Davis
, [2000] B.C.J. No. 88, 2000 BCSC
42.

[55]

The sentencing principles are set
out in ss. 718 to 718.2 of the
Criminal Code
. This case involves a
significant fraud, motivated by greed. Ms. Dreger pleaded guilty very early in
the proceedings, and she consented to a civil judgement in the amount of the
fraud, saving Mr. Collins from a civil trial. She has no criminal record. When
the offences began she was a single mother, raising a young child after his
father, her fiancé, died. She has suffered other losses in her life, including
her husband and more recently, her father.

[56]

She gave a statement to the court
apologizing for what she had done and indicated remorse for her actions. She
did not take full responsibility for the breakdown of Mr. Collins marriage,
but she did accept considerable responsibility. I do not think this latter fact
weighs against her.

[57]

However, she did post a blog which said scurrilous things about Mr.
Collins. She did not name him, but it is clear to anyone who knows the people
involved, to whom she is referring. In her statement to the court she said she
no longer blamed her actions on his conduct, but she did not remove the blog. This
blog is a factor that can be taken into account to reduce the weight to give to
her expression of remorse.

[58]

Ms. Dreger took a substantial sum of money from her employer, who had
trusted her implicitly. This occurred over a seven year period. Her crime had a
significant effect on her employer and his company, as well as other employees
and the outside auditors. Her moral blameworthiness is high, and general
deterrence is a significant sentencing factor. It is clear that a term of
imprisonment is required, and her counsel does not now suggest otherwise.
Weighing all of the circumstances and applying the principles of sentencing, I
conclude that a sentence of four years is a fit sentence.

[59]

I should comment on the restitution order. It is clear that Ms. Dreger
has no money to make restitution. The sentencing judge tacked on the
restitution order after he imposed a sentence. This is not the correct approach
to the imposition of a restitution order. A restitution order is part of the
sentence, and should not be an afterthought:
R. v. Nanos
, 2013 BCCA
339 at para. 14. In
Nanos
, this court set out the correct approach to
imposing a restitution order as a stand-alone order. The court also confirmed
the principle that where the offences involve theft or breach of trust
restitution should be ordered to compensate the victim, even if the offender
has little or no ability to pay, because an offender should be deprived of the
fruits of his crime (para. 17).

[60]

Therefore, I would not interfere with the restitution order.

V. CONCLUSION

[61]

I would grant leave to appeal, allow the appeal and set aside the
sentence of five years and substitute a sentence of four years in prison. I
would not disturb the order for restitution.

[62]

TYSOE J.A.
: I agree.

[63]

GOEPEL J.A.
: I agree.

[64]

TYSOE J.A.
: Leave to appeal is granted. The appeal is allowed. A
sentence of five years imprisonment is set aside and a sentence of four years
imprisonment is substituted in its place.

The
Honourable Madam Justice Bennett