COURT OF APPEAL FOR ONTARIO

CITATION: Ontario Securities Commission v.
    Tiffin, 2020 ONCA 217

DATE: 20200316

DOCKET: C66232

Roberts, Harvison Young and
    Thorburn JJ.A.

BETWEEN

Ontario Securities Commission

Respondent

and

Daniel Tiffin and Tiffin Financial Corporation

Appellants

Glen Jennings and Alex Zavaglia, for
    the appellants

Jonathan Feasby and Matthew Britton,
    for the respondent

Heard: October 29, 2019

On appeal from the order of Justice
    Robert Charney of the Superior Court of Justice dated May 15, 2018, with
    reasons reported at 2018 ONSC 3047, 142 O.R. (3d) 223, allowing an appeal from
    the acquittals entered on August 31, 2016, by Justice Joseph F. Kenkel of the
    Ontario Court of Justice and substituting convictions, and from the sentence
    imposed on September 26, 2018, with reasons reported at 2018 ONSC 5419.

Harvison Young J.A.:

A.

Overview

[1]

The appellants, Daniel Tiffin and his company
    Tiffin Financial Corporation (TFC), borrowed money from six people who were
    clients and friends in amounts which totalled $700,000. The appellants provided
    them with promissory notes evidencing the debt. At the time of the loans,
    Tiffin was under significant financial pressure and was subject to a cease
    trading order issued by the Ontario Securities Commission (OSC).

[2]

With respect to these promissory notes, Tiffin
    and TFC were charged by the OSC with three provincial offences pursuant to s.
    122(1)(c) of the
Securities Act
, R.S.O. 1990, c. S.5, namely (i) trading
    in securities without registration; (ii) distributing securities without filing
    a prospectus; and (iii) trading in securities while prohibited.

[3]

The central issue on this appeal is whether
    these notes were securities within the definition of the Act. The trial judge
    held that they were not, applying the test set out in
Reves v. Ernst &
    Young
(1990), 494 U.S. 56. On appeal to the Superior Court of Justice, the
    appeal judge found that the notes were securities. He declined to apply the
    American family resemblance test from
Reves
in interpreting the term
    security under the Act and concluded that the trial judge erred in finding that
    the notes were not securities.

[4]

For the following reasons, I would dismiss the
    appeal from these convictions. In brief, the definition of security in the Act
    is sufficiently broad to capture the promissory notes at issue here. While
    American law is a useful source of persuasive precedent in the securities
    context, the family resemblance test applied by the trial judge does not assist
    in the interpretation of the Act. The definition of security adopted by the
    appeal judge is supported both by the plain text of the Act and the logic of the
    regulatory scheme.

[5]

In particular, the Act contains broad
    definitions coupled with equally broad exemptions which relieve vast numbers of
    transactions involving securities from compliance with its requirements. The
    appellants ask us to import the family resemblance test, not because of an
    absence of applicable exemptions to the transaction at issue, but rather because
    pursuant to an administrative order (that is, the cease trade order) they could
    not rely on these exemptions. That quarrel is properly directed at the order,
    not the definition of security in the Act, and, in the absence of any
    legislative intent for the kind of test developed in the United States, I decline
    to impose such a test so that the appellants can escape liability under the
    securities regime in this province.

[6]

I would, however, allow the sentence appeal. While
    it was not an error in law to impose a custodial sentence per se, the sentence
    arrived at by the sentencing judge is demonstrably unfit.

B.

BACKGROUND

[7]

Tiffin was licenced to sell insurance and
    insurance-based investment products through TFC, of which he was the sole
    officer, director and shareholder. Tiffin was also registered with the OSC to
    trade in securities from 1983 to 1999.

[8]

The OSC investigated the appellants and others
    for soliciting investments in Rezwealth Financial Services Inc. (Rezwealth)
    without proper authorization. In December 2009, the OSC issued a temporary
    order requiring the appellants to cease trading in securities and prohibiting
    them from relying on any exemptions in Ontario securities law.
In making this order, the OSC relied on its power at s. 127(1)5 of
    the Act, which authorizes it to order that any exemptions contained in Ontario
    securities law do not apply to a person or company permanently or for such
    period as is specified in the order.
This order
    remained in effect until July 2014.

[9]

The OSC commenced administrative proceedings
    against the appellants in connection with the Rezwealth matter. The OSC found
    that the appellants and others had traded in securities without registration
    and had illegally distributed securities. In July 2014, the OSC issued a final
    order imposing sanctions on the appellants. Under the terms of that order, the
    appellants were prohibited from trading in securities and from relying on
    exemptions from securities law for five years, in addition to monetary
    penalties and a restitution order.

[10]

It was while he was subject to the cease trade order
    that Tiffin solicited funds from his clients for his personal use and to keep his
    business operating. The clients were told about the OSCs administrative
    actions and the consequent impact on the appellants finances. Six clients
    agreed to loan funds, a total of $700,000, to TFC on terms set out in fourteen
    promissory notes signed by Tiffin on behalf of TFC. The notes provided for
    annual interest rates ranging from 10% to 25% and stated that they were secured
    against a toy soldier collection owned by TFC. It is these promissory notes
    that are at issue in these proceedings.

C.

Decisions Below

(1)

The Trial Decision Acquitting the Appellants

[11]

At trial, it was undisputed that the appellants
    were not registered with the OSC, they did not file a prospectus, and they were
    prohibited from trading in securities by order. The only issue at trial was
    whether the promissory notes were securities as defined by the Act.

[12]

The trial judge found that the promissory notes
    were not securities and entered acquittals. He accepted OSCs characterization
    of the Act as a catch and exclude regime, which defined the term security
    broadly and then provided statutory exemptions. However, the trial judge
    concluded that a definition of security that included the promissory notes at
    issue would cast too broad a net and would be inconsistent with the purposes of
    the Act.

[13]

In reaching his conclusion, the trial judge
    adopted the family resemblance test from the Supreme Court of the United States
    decision in
Reves
. This test involves asking whether the instruments
    resemble securities based on a list of factors including: (1) whether there is
    motivation to make profit, (2) whether the plan of distribution resembles
    common trading for speculation or investment, (3) the publics reasonable
    expectation that the note is a security, and (4) whether there is another
    regulatory scheme that protects the investor. Based on these factors, the trial
    judge concluded that the promissory notes were not securities because they
    resembled notes secured by a lien on small business assets, which is one family
    of recognized non-security notes in
Reves
.

[14]

Accordingly, the trial judge acquitted the
    appellants on all charges.

(2)

The Appeal Decision Substituting Convictions

[15]

The appeal judge concluded that the
    interpretation of the term security is a question of law, and the standard of
    review is correctness. He found that the findings of fact of the trial judge
    were not in issue on appeal.

[16]

The appeal judge concluded that the trial judge
    erred in importing the family resemblance test into Ontario securities law. He disagreed
    that securities that appeared to fall within the statutory definition should
    nonetheless be excluded based on judicially crafted criteria. Contrary to the
    conclusion of the trial judge, the appeal judge concluded that the broad net
    cast by the definition of security was deliberate and consistent with the
    purposes of the Act and should not be interfered with absent a constitutional
    challenge for overbreadth. The appeal judge referred to the Alberta Court of
    Appeals decision in
R. v. Stevenson
, which declined to import the
Reves
test into Albertas securities regime: 2017 ABCA 420, 61 Alta. L.R. (6th)
    273, leave to appeal refused, [2018] S.C.C.A. No. 54.

[17]

The appeal judge also noted the significant
    differences between Ontarios securities regulation and that in the United
    States. Specifically, securities regulation in the United States differentiates
    between commercial and investment purposes in a manner that is consistent with
    the family resemblance test, but this is not determinative in Ontarios scheme.
    Further, the American statutory definition begins with the phrase unless the
    context otherwise requires, an inherent limitation that is not present in the
    Ontario Act.

[18]

The appeal judge declined to go through the
    family resemblance test in full, given that he had found it did not apply.
    However, he did point out specific elements of the trial judges reasoning in
    applying the test with which he took issue.

[19]

On the basis that the trial judge had erred in
    law and that the promissory notes were securities, the appeal judge allowed the
    appeal and substituted convictions.

(3)

The Sentencing Decision

[20]

The OSC submitted that an appropriate sentence
    would be from 12 to 15 months in jail followed by probation and a restitution
    order. Its submission was that a custodial sentence was required because the
    appellants had not paid previous financial penalties, the promissory notes were
    similar to notes used in the Rezwealth scheme and had been traded while an
    order prohibiting trading in securities was in place. The appellants submitted
    that a custodial sentence was unnecessary and would interfere with Tiffins
    ability to repay the money owing. They submitted that the evidence indicated no
    intention to defraud or deceive anyone, Tiffin was not evasive, and five of the
    holders of the promissory notes wrote in support of Tiffin.

[21]

The appeal judge noted the statutory maximum
    penalty of $5,000,000 or imprisonment for a term of not more than five years
    less a day or both. He concluded that a financial penalty would not be
    sufficient in this case given the amount still owed in relation to the previous
    offences, and also because Tiffin had exploited a position of trust with his
    clients for financial gain. He accepted that the conduct here was different
    than in the Rezwealth scheme and that Tiffin did not intend to defraud or
    deceive anyone. He noted that the case law range for persons with previous
    convictions usually begins at nine months. Accordingly, the appeal judge
    sentenced Tiffin to six months imprisonment, with 24 months of probation and a
    restitution order.

D.

Issues

[22]

The
    appellants were granted leave to appeal from their convictions:
Ontario Securities Commission v. Tiffin
, 2018 ONCA 953.
Pursuant to s. 131(1) of the
Provincial Offences Act
,
    R.S.O. 1990, c. P.33, this appeal is limited in scope to the questions of law
    on which leave to appeal have been granted.
As I noted above, the
    central question on the conviction appeal is the interpretation to be given to
    the term security within the statutory scheme pursuant to the Act.

[23]

The appellants were also granted leave to appeal from the
    sentences imposed. They take issue with the sentence of six months
    imprisonment for Tiffin, arguing that it was an error of law to impose a
    custodial sentence in the absence of a proven intent to defraud.

E.

Conviction Appeal

(1)

The Appeal Judge Properly Applied the
    Correctness Standard of Review

[24]

The preliminary question is the standard of
    review. In my view, the appeal judge correctly noted that there were no
    relevant facts in dispute, and that the central issue was one of statutory
    interpretation, which is a question of law. For this reason, he applied the
    standard of correctness.

[25]

While the ultimate question in this case was
    whether these instruments are securities, which is a question of mixed fact and
    law, the appeal judge did not take issue with the trial judges factual
    findings or how the law was applied to them, but rather with the definition the
    trial judge identified and applied. In my view, he correctly identified and applied
    the standard of correctness.

[26]

The issue on this further appeal is the same as
    on the appeal below. Therefore, I review the appeal judges determination of
    the meaning of the term security on a correctness standard.

(2)

The Applicable Legal Principles

[27]

The principles of statutory interpretation are
    well established. The terms of the Act are to be interpreted in their entire
    context, in their grammatical and ordinary sense, harmoniously with the scheme
    and object of the Act, and the intention of the legislator:
Rizzo &
    Rizzo Shoes Ltd. (Re)
, [1998] 1 S.C.R. 27, at para. 21.

(3)

The Security Act Definition in Context

[28]

I accept that the scheme of the Act is catch
    and exclude. In other words, the Act defines key terms very broadly, and
    thereby captures a great many instruments and activities in its wide regulatory
    scope, and then provides for many exemptions from the Acts requirements,
    discussed further below, to tailor this regulatory scope to its purposes.

[29]

The term security is defined at s. 1(1) of the
    Act. It consists of a non-exhaustive list of 16 clauses expressed in general
    terms, evidencing an intention for breadth. The clause most centrally at issue
    in this case is clause (e) which reads a bond, debenture, note or other evidence
    of indebtedness. Section 1 provides for only two explicit exceptions to clause
    (e):

(i) a contract of insurance issued by an
    insurance company licensed under the
Insurance Act
, and

(ii) evidence of a
    deposit issued by a bank listed in Schedule I, II or III to the
Bank
    Act
(Canada), by a credit union or league to which the
Credit
    Unions

and Caisses Populaires Act, 1994
applies, by a
    loan corporation or trust corporation registered under the
Loan and
    Trust Corporations Act
or by an association to which the
Cooperative
    Credit Associations Act
(Canada) applies

[30]

Consistent with the text of this definition, the
    Supreme Court has held that a promissory note is a security for the purpose of a
    similar statute in Saskatchewan: see
Duplain v. Cameron et al.
, [1961]
    S.C.R. 693, at p. 711.

[31]

The Act sets out broad exemptions from its core requirements, which
    require registration prior to trading in securities and the issuance of a
    prospectus prior to trading in securities: ss. 25, 53.
Exemptions cover,
    by way of example, securities issued by governments and banks, secured by a
    security agreement or mortgage, distributions to accredited investors
    purchasing securities as principals, family members, friends, business
    associates and their related corporations, an isolated distribution of
    securities, and the distribution of short-term debt instruments: see e.g. ss.
    25, 35, 35.1 and 73-74.3;
Prospectus Exemptions
, OSC NI 45-106, (2009) O.S.C.B. (Supp. 5) 1, ss. 2.4, 2.5, 2.6.1, 2.35
.
    Therefore, notwithstanding that a certain instrument may be a security, it may
    not trigger the application of one or more core requirements of the Act.

(4)

The Non-Application of the Exemptions to the Appellants

[32]

The
    appellants point out that,
according to the terms of the cease
    trade order which was issued against them at the relevant time, they were not
    allowed to shelter under these exemptions.

[33]

It is, in effect, for this reason that the appellants seek to have
    us apply the American law as set out in
Reves
that narrows the
    definition of security from the outset. If these notes were not securities, the
    appellants were not subject to the requirements of being registered, filing a
    prospectus, or trading while prohibited.

The appellants argue that interpreting the definition of security as
    being broad enough to include these notes, notwithstanding the existence of the
    broad and numerous exemptions in the Act, would give rise to unjust results
    because it would sanction activities that, in their submission, should not be
    subject to sanction under the securities regime.

[34]

The difficulty in giving effect to this
    argument is that the appellants conduct may well have been exempted from the
    requirements of the Act had they not been subject to an order forbidding them
    from relying on such exemptions. For example, at the relevant time, Ontario
    securities law contained a private issuer exemption exempting distributions of
    securities by those who met the definition of private issuer to close friends
    and business associates from the prospectus requirement:
Prospectus
    Exemptions
, s. 2.4(2).
[1]
Additionally, the notes themselves purported, by their terms, to rely on the so
    called accredited investor exemption. The exemption, provided for at s. 73.3
    of the Act, exempts some distributions to financially sophisticated parties
    identified in that section and in the
Prospectus Exemptions
.

[35]

In my view, the injustice caused by the unavailability
    of the exemptions, if any, is properly attributed to the order, and is not
    controlling of the definition of security in the Act. Moreover, in addition to
    any other route the law may provide to challenge such an order, interested
    parties can apply to the OSC to exempt specific trades from statutory
    requirements and affected parties may also apply to revoke or vary the order:
Securities
    Act
, ss. 74, 144. The appellants did not avail themselves of these procedures.

(5)

Reves
and the Applicability
    of American Law

[36]

The appellants submit that the definition of
    security in the Act is further limited by the principles propounded in the Supreme
    Court of the United States decision in
Reves
. In
Reves
, that
    court set out the so-called family resemblance test in order to determine
    whether a given note fell within the definition of security for the purposes of
    the American legislation. Under that test, a note is presumed to be a security
    unless it bears a strong resemblance to judicially recognized families of
    instruments:
Reves
, at p. 65. To determine whether a strong
    resemblance exists, the court is to look to the motivations of the parties, the
    plan of distribution, the reasonable expectations of the investing public and
    the existence of other applicable regulatory schemes that would reduce risk:
Reves
,
    at pp. 66-67.

[37]

For the following reasons, I disagree with the
    appellants and I decline to import the family resemblance test into the
    definition of security in the Act.

[38]

To begin with, there can be no question that
    American law can be useful in interpreting Canadian securities legislation. That
    is because both legislative schemes have similar purposes and intend to address
    similar issues: see
Pacific Coast Coin Exchange v. Ontario Securities
    Commission
, [1978] 2 S.C.R. 112, at pp. 126-28. Both seek to address the
    challenge of casting a broad enough regulatory net to protect the public and
    ensure the stability of the financial system without being so broad as to capture
    activities unconnected to these goals. In particular, the emphasis on
    disclosure in the federal securities regime in the United States had a
    considerable influence on the development of securities regulation in this
    province: Mark R. Gillen,
Securities Regulation in Canada
(Scarborough: Carswell, 1992) at p. 57.

[39]

The specific mechanisms the two systems have chosen to address the
    challenge, however, are not identical. Since the origins of modern securities
    regulation in the early 20th century, the securities regimes on either side of
    the border have been developed by distinct legislators and regulators shaped by
    distinct constitutional contexts and accountable to distinct polities. This
    context must be borne in mind when, as here, this court is asked to interpret
    the intention of the Ontario legislator in line with jurisprudence from another
    jurisdiction.

[40]

In particular, it is very clear that federal securities regulation in
    the United States was only intended to regulate
investments
,
    and not to create a broad federal remedy for all fraud:
Reves
, at p.
    61;
Marine Bank v. Weaver
(1982), 455 U.S. 551, at p. 556. Accordingly,
    courts in that country have distinguished between investment instruments, which
    are subject to the regime, and commercial instruments, which are not. The
    family resemblance test applied in
Reves
is the manner in which that
    court chose to draw this distinction. The parties disagree on the extent to
    which this distinction is applicable to an interpretation of the Act in Ontario.

[41]

Three key differences exist between the Act and
The Securities
    Exchange Act of 1934
, 15 U.S.C. § 78a, considered in
Reves
, such
    that the family resemblance test is not helpful in interpreting the meaning of the
    term security in the Act. First, the definition in the Act, at s. 1(1), opens
    with inclusive language, security includes , whereas the definition in
The
    Securities Exchange Act of 1934
, at s. 3(10), opens with language
    indicating an exhaustive definition security means. The Act therefore
    contains an indicator of breadth not present in the United States statute:
    Ruth Sullivan,
Sullivan on the Construction of Statutes
, 6th ed.
    (Toronto: LexisNexis, 2014), at paras. 4.34-4.39.

[42]

Second, the definitions in
The Securities Exchange Act of 1934
are preceded by the phrase unless the context otherwise requires: s. 3. The
    intention of a legislator in using these words will not always be to create
    powerful discretion for courts to craft additional exemptions to a statutory
    definition, as the OSC contends. However, the Supreme Court of the United
    States has in fact relied upon these words, at least in part, to justify a
    narrowing of the otherwise expansive definition of security:
Weaver
, at
    p. 556. No such wording is evident in the definition in the Ontario Act and I
    cannot, therefore, follow the Supreme Court of the United States reasoning in interpreting
    it.

[43]

Third, the respective approaches of the two statutes to short-term
    debt instruments demonstrate a broader definition of security in this
    jurisdiction. In
The Securities Exchange Act of 1934
, any note,
    draft, bill of exchange, or bankers acceptance which has a maturity at the
    time of issuance of not exceeding nine months is specifically excluded from
    the
definition
of security: s. 3(10). By contrast,
    in Ontario, there is no such explicit exclusion from the definition of security
    in the text of the Act. Rather, the OSC, by rule, exempts a distribution of a
    similar class of short-term debt that meets certain criteria from the
    prospectus requirement in the Act:
Prospectus Requirements
, s. 2.35.

[44]

This distinction is significant. It exemplifies a difference in legislative
    structure. Congress has made clear its intention to exclude these short-term
    debt instruments, which may be viewed as commercial, from the scope of this
    statute altogether, by carving them out of the definition of security. In
    Ontario, meanwhile, there is no indication that the legislator intended short-term
    debt instruments to be understood as anything other than securities. The
    approach taken by the regulator in this province is to enact rules exempting
    them from the prospectus requirement in the Act, rather that excluding them
    from the ambit of the scheme as a whole.

[45]

These
structural differences militate against
    importing the family resemblance test. To do so would risk undermining the legislators
    chosen scheme expressed in the Act, which, as discussed above, is to broadly
    cast its regulatory net and then exempt those activities it does not wish to
    regulate. There is simply no indication that the Ontario legislator wished to
    determinatively distinguish between commercial and investment instruments as
    courts have held in the United States.

[46]

As the parties noted before this Court, appellate courts in Canada
    have come to different conclusions regarding the applicability of
Reves
.
    In
British Columbia (Securities Commission) v. Gill
, 2003 BCCA
    169, 11 B.C.L.R. (4th) 102, the British Columbia Court of Appeal applied the
Reves
family resemblance test in reaching the conclusion
    that the documents at issue, namely
receipts, financial
    summaries and personal loan agreements
evidencing debt, were securities
    for the purpose of the
Securities Act
,
    R.S.B.C. 1996, c. 418. I note that the
Gill
decision considered whether an administrative decision-makers interpretation
    of the B.C.
Securities Act
was
reasonable
, and it referred to
    the test in
Reves
to illustrate the
    reasonableness of that decision. The court did not rely on
Reves
to narrow the definition of security, but rather
    relied on it to support its breadth.

[47]

In
    the more recent case of
Stevenson
, the Alberta
    Court of Appeal declined to import the family resemblance test into that
    provinces law, given that the numerous conditions and exemptions in the
Securities Act
, R.S.A. 2000, c. S-4, obviated the need
    for judicially created exemptions like those in
Reves
:
    at para. 16. That appeal court upheld the decision of the summary conviction
    appeal court judge concluding that the loan agreements, which were the subject
    of the regulatory prosecution, were evidence of indebtedness and therefore
    securities for the purpose of the very similar definition of security in the
    Alberta
Securities Act
: at paras. 4, 21.

[48]

I
    agree with the conclusion in
Stevenson
. In my
    view, importing the family resemblance test into the interpretation of the term,
    security, would raise a risk of unintended consequences and litigation inherent
    when tinkering with a definition central to a complex regulatory scheme. Moreover,
    and importantly, there is no need to run this risk given the statutory mechanisms
    through which the legislator has seen fit to achieve the goals which animate securities
    regulation. In short, while American securities jurisprudence may be a useful
    source of persuasive authority in some cases, it is not necessary or advisable
    to import the family resemblance test into the definition of security in the
    Ontario context.

[49]

To be clear, I do not disagree with the appellants submission
    that a legislative provision that is overly broad on its face can, in
    appropriate cases, be read down or interpreted in a manner that is narrower
    than the bare language of the text:
Canada Post Corp. v.
    Canadian Union of Postal Workers
, 2019 SCC 67, at para. 59;
Blue Mountain Resorts Ltd. v. Ontario (Ministry of Labour)
,
    2013 ONCA 75, 114 O.R. (3d) 321, at para. 29;
Montréal (City)
    v. 2952-1366 Québec Inc.
, 2005 SCC 62, [2005] 3 S.C.R. 141, at
    para. 14. This is just another way to express the principle that the words of
    legislation must always be read in context and harmoniously with the intention
    of the legislator. This exercise is distinct from reading down as a
    constitutional remedy: Sullivan, at para. 7.10. In the former case, the courts
    are interpreting the legislation in order to properly give effect to the true
    intention of the legislator. In the latter case, the courts are adjusting the
    scope of the legislation to conform to the Constitution notwithstanding the
    legislators intention.
As I have discussed, however, the
    scheme of the Act is such that the broad definition of security is consistent
    with its object and the intention of the legislator. Accordingly, the purposive
    reading does not assist the appellants.

(6)

Conclusion:  the Promissory Notes are Securities

[50]

In summary, the promissory notes at issue in
    this case are securities. They are properly captured by the phrase bond,
    debenture, note or other evidence of indebtedness in the definition of
    security for the purposes of the Act: s. 1(1). While the appellants may have
    been able to rely on exemptions from the requirements in the Act in respect of
    these transactions, these exemptions were not available to them in this case
    because of the cease trade order. This does not warrant interference with the
    definition in the Act on which the legislator has chosen to ground its scheme.

F.

Sentence Appeal

(1)

The
    Principles of Sentencing for Regulatory Offences

[51]

This appeal arises from a regulatory
    prosecution. I begin by summarizing the principles applicable to the sentencing
    for these offences.

[52]

Unlike criminal offences, regulatory offences
    are not prosecuted because they are inherently abhorrent, but rather because
    compliance is necessary to achieve the legislators public interest goal:
Ontario
    (Environment, Conservation and Parks) v. Henry of Pelham Inc.
, 2018 ONCA
    999, at para. 33. Consistent with the difference in purposes, while the sentencing
    of regulatory offenders remains multi-factorial, the principle of deterrence is
    the paramount consideration:
Henry of Pelham
, at para. 38.

[53]

Imprisonment for regulatory offences may
    sometimes be necessary to achieve this purpose. As Cory J. said in
R. v.
    Wholesale Travel Group Inc.
, [1991] 3 S.C.R. 154, at p. 250:

Regulatory schemes
    can only be effective if they provide for significant penalties in the event of
    their breach. Indeed, although it may be rare that imprisonment is sought, it
    must be available as a sanction if there is to be effective enforcement of the
    regulatory measure.  The potential for serious harm flowing from the breach of
    regulatory measures is too great for it to be said that imprisonment can never
    be imposed as a sanction.

[54]

As in criminal law, the sentence must be
    proportionate to both the gravity of the offence and the degree of
    responsibility of the offender:
Ontario (Labour) v. New Mex Canada Inc.
,
    2019 ONCA 30, 144 O.R. (3d) 673, at paras. 67-68. Moral blameworthiness can be
    relevant to the sentencing of a regulatory offender, given that it is probative
    of the degree of responsibility of the offender, notwithstanding the fact that
    regulatory offences generally involve less moral blameworthiness:
New Mex
,
    at paras. 66, 69.

[55]

The principle of restraint requires the
    sentencing court to apply a measured response to determining a sentence that
    best satisfies the purpose and principles of sentencing, as in criminal law:
New
    Mex
, at paras. 81-82. The application of restraint generally means that
    incarceration for regulatory offences is rare, but this is a descriptive
    observation, not a prescriptive one, and it is not an independent principle in
    sentencing:
New Mex
, at para. 85. It flows from the fact that
    deterrence can generally be achieved with fines.

[56]

In short, regulatory offenders are not sentenced
    in a manner wholly distinct from criminal offenders. The principles of
    proportionality and restraint still apply. The differences flow from the
    distinct purpose underlying regulatory offences, which requires a greater
    emphasis on deterrence and generally involves lower moral blameworthiness than
    in the criminal context.

(2)

The Principle from
Bowman

[57]

The appellants rely on the decision in
Rex
    v. Bowman and Thibaudeau
, [1949] 1 D.L.R. 671 (Ont. Mag. Ct.), to claim
    that there is a clear standard that only evasive and fraudulent offences
    under the Act warrant incarceration. I do not accept this submission. First, I
    do not read
Bowman
as creating this kind of bright line rule. Second, this
    submission runs contrary to the principles of sentencing in regulatory offences,
    which are inherently contextual.

[58]

In
Bowman
, Hanrahan P.M. gave very
    brief reasons for sentence in which he sentenced two brokers to imprisonment
    for violating the Act. He distinguished, at p. 672, between careless and
    intentional offenders in terms of the appropriate sentence:

When breaches of
    the Act such as these occur, dealing with failure to register or to file
    required reports designed to protect the investing public, the dividing line
    between imprisonment and monetary punishment as the appropriate penalty must be
    in which class the offender falls  the merely careless or the designedly evasive
    delinquent, who is bent on defrauding the public unhindered by the watchful
    supervision of the Commissions investigators.

[59]

This passage has been cited with approval by the
    Ontario Court of Justice and the provincial courts of other provinces.

[60]

In some cases, the principle is applied in the
    rigid manner advanced by the appellants. That is, the court determines whether
    the offender being sentenced is a merely careless offender or is a
    designedly evasive delinquent and this is determinative of whether a sentence
    of imprisonment is imposed: see e.g.
R. v. Lewandosky
, [1997] M.J. No.
    471, at paras. 12-13, 23;
Autorité des marchés financiers c. Veillet
,
    2014 QCCQ 2358, at para. 47.

[61]

Other cases do not go this far, and instead
    characterize
Bowman
as establishing a spectrum of blameworthiness on
    which a specific offence is placed to determine the appropriate penalty: see
    e.g.
R. v. Tulsiani
, 2017 ONCJ 430, at paras. 30-32;
R. v. Perch
(2006), 203 Man. R. (2d) 300 (Prov. Ct.), at paras. 19-20;
R. v. Edgar
,
    2000 BCPC 215, at para. 14. In
Autorité des marchés financiers v. Greeley
,
    2010 QCCQ 2879, Mascia J.C.Q. distills
Bowman
as merely requiring an
    assessment of moral blameworthiness: at para. 29.

[62]

In my view, the rigid application of
Bowman
is at tension with the proper approach to the sentencing of regulatory
    offenders. Moral blameworthiness is relevant to the sentencing of regulatory
    offenders because it is probative of the responsibility of the offender to
    which the sentence must be proportionate:
New Mex
, at para. 69.
    However, the sentence must also be proportionate to the gravity of the offence,
    which is unaccounted for in the
Bowman
principle. In other words, moral
    blameworthiness is relevant, but it cannot be the sole focus of the regulatory
    sentencing judge.

[63]

The regulatory sentencing court, according to
    the principles of proportionality and restraint, must impose the sentence
    required to optimally achieve the sentencing goals, of which deterrence is
    paramount. It is unclear how the comparison of the offender to the ideal types
    of the careless offender or the designedly evasive delinquent assists in
    coming to a fit sentence in the circumstances of a given case. It might be
    contrary to the principle of restraint, for example, to rigidly impose
    imprisonment on offenders based on their intention when the goal of deterrence
    could be achieved with a fine. Equally, a fine may not be sufficient to achieve
    the goals of sentencing in some cases where fraud is not made out. Sentencing
    is inherently contextual.

[64]

For this reason then, it would be contrary to
    established sentencing principles to hold that
Bowman
restricts a
    sentencing judges discretion to this one consideration above all others. The
    better formulation of the
Bowman
principle is that intention may be a
    relevant consideration in determining whether a custodial sentence is necessary
    to achieve the goals of sentencing.

(3)

The Sentence is Demonstrably Unfit

[65]

The appellants also argue that the sentence of
    six months imprisonment for Tiffin was demonstrably unfit in the
    circumstances. I agree.

[66]

This court can vary the sentence on appeal if it
    is demonstrably unfit:
R. v. Lacasse
, 2015 SCC 64, [2015] 3 S.C.R.
    1089, at para. 11. A sentence will be demonstrably unfit if it is clearly
    excessive or inadequate or if it represents a substantial and marked departure
    from a proportional sentence properly arrived at based on the correct
    application of the principles and objectives of sentencing: at para. 52.

[67]

I do not agree with the sentencing judges
    reasons for imposing a custodial sentence in addition to the probation order. In
    the unusual circumstances of this case, I find that a custodial sentence is
    manifestly unfit. In particular:

a.

Mr. Tiffin did not attempt to deceive in
    the sense that the evidence indicates that he honestly revealed his desperate
    financial situation when he sought a personal loan from his friends/clients;

b.

As noted by the sentencing judge, While Mr.
    Tiffin did not plead guilty, he did acknowledge that he engaged in the conduct
    complained of, and his defence was based on a question of statutory interpretation.
    While not quite a mitigating factor, it places this case closer to the guilty
    plea category than some of the longer sentence cases relied on by the OSC;

c.

The trial judge also noted that Mr. Tiffin is 66
    years old and likely to continue repaying his clients;

d.

Five of the six recipients of the promissory
    notes filed
letters of support;

e.

The appellants have repaid $90,500 of the
    principal amount of the loan, and $263,000 in interest, for total payments of
    $353,500; and

f.

Mr. Tiffin has expressed remorse.

[68]

There is a history of non-compliance with the
    Act, which led to the cease trading order and not all of the money has been
    repaid. Having said that, the financial penalties alone would fail to meet the applicable
    sentencing objectives.

[69]

While the appeal judge cited the relevant
    principles, the sentence is disproportionate to the point of being demonstrably
    unfit. There is relatively little in the sentencing reasons to justify the custodial
    sentence. The appeal judge cited
R. v. Da Silva
, 2012 ONCJ 279, varied,
    2013 ONSC 260, for the proposition that the applicable sentencing range where
    there is a history of non-compliance begins at nine months.

[70]

This decision does not hold that nine months is
    the starting point for the sentencing of any recidivist. The sentencing judge in
Da Silva
said, These are not first offences, so they would not
    attract periods of six months as did the offenders in
R. v. Casteneda
.
    I agree that given Mr. Da Silvas history of
Securities Act
violations,
    the range would start in these circumstances at [nine] months: at para. 29. Da
    Silvas history of non-compliance was markedly worse than that of Tiffin. Da
    Silva had been under three separate cease trade orders relating to various
    schemes at the time he committed the offences before the sentencing court: at
    para. 5. Further, unlike this case, his activities were intentionally
    deceitful: at paras. 3 and 29. It was in those circumstances that a sentence of
    nine months imprisonment was the starting point.

[71]

A review of relevant case law in Ontario
    securities matters reveals sentences that are significantly below nine months. In
Ontario Securities Commission v. DaSilva
, 2017 ONSC 4576, an offender
    with a significant history of non-compliance was sentenced to three months
    following a trial for similar offences. The sentence was upheld on appeal: at
    para. 79. While there was a smaller amount of money at issue in that case, the
    offence involved dishonesty, specifically using a fake name to solicit
    investments: at paras. 68 and 71.

[72]

Further, in
R. v. Schwartz
, 2013 ONSC
    5031, a 90-day intermittent sentence was upheld on appeal for an offender with
    a history of misconduct who pleaded guilty to violating an OSC order by committing
    fraud: at paras. 14 and 30. In
R. v. Castaneda
, 2008 ONCJ 69, a
    six-month sentence was imposed on an offender who pleaded guilty to offences
    that also made out criminal fraud and imposed significant hardship on investors:
    at paras. 19 and 33. By contrast, in this case five out of six lenders wrote in
    support of Tiffin and the appeal judge found that he was truthful with them in
    soliciting the funds. While the appellants did not plead guilty, the appeal
    judge found that this was closer to the guilty plea category given the
    circumscribed nature of the trial.

[73]

The OSC was not able to direct us to a precedent
    where a custodial sentence was imposed for conduct that was found not to be in
    any way deceitful. This is a unique mitigating factor that distinguishes the
    offences on appeal from all custodial precedents to which we were referred. A
    fit sentence must reflect the appellants reduced responsibility for the
    offences that flows from the absence of deceit in their conduct.

[74]

In light of this case law and the unique
    circumstances of this case, six months incarceration is a demonstrably unfit
    sentence and cannot stand. I would set aside the custodial term but uphold the
    24-month probation order as well as the restitution order with the same terms,
    as outlined below:

·

that the appellants not commit the same or any
    related or similar offence, or any offence under a statute of Canada or Ontario
    or any other province of Canada that is punishable by imprisonment;

·

that the appellants appear before the court as
    and when required;

·

that the appellants notify the court of any
    change in their address;

·

that the appellants report to a probation
    officer if and when directed to do so by the probation officer; and

·

that the appellants not trade in any
    securities as that term is defined in the Act.

[75]

In addition to the restitution order below, this
    probation order is sufficient to achieve the objectives of sentencing in the
    circumstances of this case.

G.

Conclusion

[76]

I would dismiss the conviction appeal and allow
    the sentence appeal. I would set aside the custodial sentence and uphold the
    probation and restitution orders.

Released: March 16, 2020

LB

A.
    Harvison Young J.A.

I
    agree L.B. Roberts J.A.

I
    agree J.A. Thorburn J.A.

[1]

An even broader exemption for distributions to close family,
    friends and business associates was subsequently added to the rules: ss. 2.5,
    2.6.1.


WARNING

THIS IS AN APPEAL UNDER THE

YOUTH CRIMINAL JUSTICE ACT

AND IS SUBJECT TO:

110(1)          Subject
    to this section, no person shall publish the name of a young person, or any
    other information related to a young person, if it would identify the young
    person as a young person dealt with under this Act.

(2) Subsection (1) does not apply

(a) in a case where the
    information relates to a young person who has received an adult sentence;

(b) in a case where the
    information relates to a young person who has received a youth sentence for a
    violent offence and the youth justice court has ordered a lifting of the
    publication ban under subsection 75(2); and

(c) in a case where the
    publication of the information is made in the course of the administration of
    justice, if it is not the purpose of the publication to make the information
    known in the community.

(3) A young person
    referred to in subsection (1) may, after he or she attains the age of eighteen
    years, publish or cause to be published information that would identify him or
    her as having been dealt with under this Act or the
Young Offenders Act
,
    chapter Y-1 of the Revised Statutes of Canada, 1985, provided that he or she is
    not in custody pursuant to either Act at the time of the publication.

111(1)          Subject
    to this section, no person shall publish the name of a child or young person,
    or any other information related to a child or a young person, if it would
    identify the child or young person as having been a victim of, or as having
    appeared as a witness in connection with, an offence committed or alleged to
    have been committed by a young person.

138(1)          Every
    person who contravenes subsection 110(1) (identity of offender not to be
    published), 111(1) (identity of victim or witness not to be published), 118(1)
    (no access to records unless authorized) or 128(3) (disposal of R.C.M.P.
    records) or section 129 (no subsequent disclosure) of this Act, or subsection
    38(1) (identity not to be published), (1.12) (no subsequent disclosure), (1.14)
    (no subsequent disclosure by school) or (1.15) (information to be kept
    separate), 45(2) (destruction of records) or 46(1) (prohibition against
    disclosure) of the
Young Offenders Act
, chapter Y-1 of the Revised
    Statutes of Canada, 1985,

(a) is guilty of an indictable
    offence and liable to imprisonment for a term not exceeding two years; or

(b) is guilty of an
    offence punishable on summary conviction.

COURT OF APPEAL FOR ONTARIO

CITATION: R. v. A.G., 2020 ONCA 183

DATE: 20200306

DOCKET: C61317

Benotto, Paciocco and Thorburn
    JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

A.G.

Appellant

Brian Irvine, for the appellant

Nicole Rivers, for the
    respondent

Heard and released orally:
    January 17, 2020

On appeal from the conviction entered on
    October 30, 2015 and the sentence imposed on October 30, 2015 by Justice Alphonse
    T. Lacavera of the Ontario Court of Justice.

REASONS FOR DECISION

Appeal of Convictions

[1]

In this case, the trial judge found that the
    accused worked together with the co-accused, to chase and assault the complainant.

[2]

Each accused agreed with the others to meet the
    complainant near his girlfriends house. They expected the complainant to
    arrive when he did, and there was common participation in a continuing event
    wherein the complainant was chased around the area. The appellant hit the
    complainant in the chest and although this did not result in bodily injuries,
    he participated in an assault and was liable as a joint principal. Joint
    principals are jointly responsible for the foreseeable consequences of an
    agreed act.

[3]

The complainant testified that after Mario took
    his bag, the appellant called him Pussy and was shit-talking. This can be
    interpreted as promotion of further violence.

[4]

It is reasonable to infer that the appellant
    knew the others intended to assault the complainant, and that he encouraged
    this through his words and actions. There was no temporal break between the
    chase and the assaults which finding is owed deference.

[5]

For these reasons, the appeal of the conviction for
    the assault causing bodily harm is dismissed.

Sentence

[6]

In this case, the facts read out on the guilty
    pleas of the co-accused made no mention of the appellant A.G. by name or of his
    participation in the assault. Nor were the guilty pleas used as evidence
    against the appellant.

[7]

The only reference to the co-accused in this
    proceeding was to explain that they pled guilty to a lesser charge of assault. Moreover,
    the trial judge gave detailed reasons for finding the appellant guilty of the
    assault causing bodily harm.

[8]

Lastly, in imposing a more onerous sentence on
    the appellant than the two accused who pled guilty, the trial judge concluded that
    the appellant was not in the same position as they, although it was late in coming,
    pled guilty to assault level 1 and expressed some sign of contrition and remorse
    in that at least they admitted their guilt.

[9]

The appellants failure to do likewise justifies
    a more serious sentence.

[10]

For these reasons, while leave to appeal the
    sentence is granted, the sentence appeal is dismissed.

M.L.
    Benotto J.A.

David
    M. Paciocco J.A.

J.A.
    Thorburn J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Balaram-Sivaram, 2020 ONCA 204

DATE: 20200312

DOCKET: C66772

Watt, Fairburn and Zarnett JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Rupen Balaram-Sivaram

Appellant

Rupen Balaram-Sivaram, acting in person

Andrew Hotke, for the respondent

Heard and released orally: March 9, 2020

On appeal from the conviction entered on February 25,
    2019 and the sentence imposed on March 28, 2019 by Justice Michael F. Brown of
    the Superior Court of Justice.

REASONS FOR DECISION

[1]

After a trial before a judge of the Superior Court of Justice sitting
    without a jury, the appellant was convicted of several offences, including
    advocating genocide; promotion of hatred; criminal harassment; threatening
    death and identity fraud.

[2]

The appellant was sentenced to a term of imprisonment of three years,
    which was reduced to five months because of the credit he received for time
    spent in pre-sentence custody. He was also ordered to comply with the terms of
    a probation order for a period of two years.

[3]

The offences of which the appellant was convicted all arise out of the
    breakdown of the appellants marriage. When that occurred, he began and
    persisted in a campaign of harassment against his wife, her new partner and her
    supervisor at work. He then posed as his wifes new partner and sent several
    communications which constitute the offences of advocating genocide and
    promoting hatred.

[4]

On appeal, the appellant advances several claims of error in the
    proceedings below. He says that:

i.

he was duped into having a trial by a judge sitting alone, rather than,
    as was his preference, a trial by a court composed of a judge and jury;

ii.

the trial judge was biased;

iii.

an adjournment of the trial prejudiced the presentation of his case, in
    particular, his examination-in-chief and cross-examination were separated,
    rather than proceeding sequentially;

iv.

his right to a trial within a reasonable time was breached;

v.

his s. 8
Charter
right was breached by a delayed search of his
    computers;

vi.

his s. 9
Charter
right was breached because there were no
    grounds for his arrest; and

vii.

the trial judge misapprehended various aspects of the evidence adduced
    at trial.

[5]

In our view, this appeal fails.

[6]

The appellant was represented by counsel at trial who, in accordance
    with the usual practice, signed a re-election form agreeing to a trial by a
    judge sitting without a jury. We see no basis upon which to interfere with that
    decision.

[7]

Nothing in the record supports any claim of actual or reasonably
    apprehended bias on the part of the trial judge. Nor does the record support
    any claims of constitutional infringement.

[8]

It does not appear to us that the trial judge misapprehended the
    evidence adduced at trial. Even if we were to have concluded that any
    misapprehension of the nature alleged by the appellant did, in fact, occur, we
    are not persuaded that it was material to the findings of guilt made by the
    trial judge.

[9]

The appeal from conviction is dismissed. The appeal from sentence was
    not pursued and is dismissed.

David Watt J.A.

Fairburn J.A.

B. Zarnett J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Bejarano-Flores, 2020 ONCA
    200

DATE: 20200311

DOCKET: C65183

Feldman, Gillese and Miller
    JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Isaac Bejarano-Flores

Appellant

Michael Dineen, for the appellant

Kerry Benzakein, for the respondent

Heard: November 19, 2019

On appeal from the convictions entered
    on December 13, 2017, by Justice Kelly P. Byrne of the Superior Court of
    Justice, with reasons reported at 2017 ONSC 7480.

Gillese J.A.:

A.

OVERVIEW

[1]

The appellant was convicted by a judge, sitting
    without a jury, of possessing MDMA for the purpose of trafficking and
    possessing the proceeds of crime. He was sentenced to 14 months in jail. He appeals
    against conviction.

[2]

The convictions stem from a police stop of a
    taxi van made in response to a 911 gun call, which is a telephone call
    reporting that a person has been seen with a gun. A customer at a York
    University food court reported the sighting to an employee, who reported it to York
    University security officers (York Security). York Security made the 911 gun
    call. DC Rand and his partner were in the area and immediately dispatched on
    the gun call.

[3]

York Security were in constant communication
    with the police. Through surveillance cameras, York Security saw the gun suspect
    enter an orange and green taxi van. They described the route that the taxi van
    was taking, which they observed through the cameras, and dispatch broadcast that
    information. Using that information, DC Rand and his partner located the taxi
    van and stopped it to investigate.

[4]

The appellant was the lone male passenger in the
    taxi van. When he stepped out of it, DC Rand saw that he matched four key aspects
    of the physical description of the gun suspect: male, medium build, early 20s,
    5 6. However, he appeared to be Hispanic, not Black, as the gun suspect had
    been described.

[5]

Despite the non-matching descriptor, DC Rand
    believed that the appellant was the gun suspect because, in addition to
    matching certain key aspects of the physical description of the gun suspect, he
    was sure that the taxi van was the one that York Security had seen the gun
    suspect enter only minutes earlier.

[6]

DC Rand told the appellant that he was investigating
    an allegation that a person with a gun had boarded an orange and green taxi
    van. He then conducted a brief pat down search of the appellant that lasted
    less than a minute. He found no gun.

[7]

A different police officer who had arrived on
    the scene searched the appellants knapsack  which was in the taxi van  for a
    gun. It did not contain a gun but it did have packages of what appeared to be
    controlled substances. Based on the drugs in his knapsack, DC Rand arrested the
    appellant. At that point, the appellant told DC Rand that he also had drugs in
    his jacket pocket and turned them over.

[8]

About two minutes elapsed between the police
    stop of the taxi van and the appellants arrest.

[9]

At trial, the appellant asserted that his ss. 8
    and 9 rights under the
Canadian Charter of Rights and Freedoms
had
    been violated. He took no issue with the initial traffic stop of the taxi van but
    maintained that there were no grounds to continue to detain him once it was
    apparent to the police that he did not match the description of the gun suspect.

[10]

The trial judge held that the appellants brief continued
    detention was constitutionally sound and that the pat down search was lawful.
    She concluded that the search of the knapsack was not lawful but admitted the evidence
    pursuant to s. 24(2) of the
Charter
.

[11]

On appeal, the appellant submits that the trial
    judge erred in finding that his continued detention was lawful. He asks this
    court to exclude the evidence under s. 24(2), set aside the convictions, and
    enter acquittals.

[12]

For the reasons that follow, I would dismiss the
    appeal.

B.

BACKGROUND IN BRIEF

[13]

Late on November 19, 2014, a customer in the
    York University food court told a Shopsys employee that he had seen someone
    with a gun. The employee reported the gun sighting to York Security who, in
    turn, called 911. At that time, the Shopsys employee did not have a
    description of the gun suspect.

[14]

At 23:36:12, DC Rand and his partner were
    dispatched to respond to the gun call. They responded immediately. A gun call
    is the highest priority for police response because of the safety risks that
    accompany a firearm, especially in a busy place like a university campus.

[15]

DCs Wenzel and Rodriguez were in a separate police
    car and also nearby. They, too, were dispatched and responded immediately.

[16]

DC Rand and his partner drove toward York University,
    listening closely as dispatch continued to broadcast information about the
    unfolding events. DC Rand understood that someone had seen a person with a gun
    in the York University food court and reported it to a Shopsys employee, who
    had reported it to York Security. He also heard the following broadcast information:

23:37:31  the gun suspect was
    described as male, Black, early 20s, 5 6

23:37:58  the gun suspect
    was further described as having a medium build and wearing a dark blue or black
    baseball hat, a black hoodie with the hood pulled over the cap, grey
    sweatpants, and a black jacket

23:39:05 York Security saw
    a male matching the gun suspect description on Vanier Lane

23:39:17  York Security
    saw the male outside Chimneystack Road, getting into a cab

23:39:32  York Security was
    advised not to approach the male

23:39:40  the cab was
    identified as an orange and green taxi van

23:39:50  the taxi van was
    driving north onto Ian MacDonald Boulevard

23:40:14  the taxi van proceeded
    north on Founders Road towards Steeles Avenue

23:41:41  York Security
    lost their visual of the taxi van, having last seen it travelling westbound
    on Steeles Avenue, at the rear of the track and field center

[17]

As DC Rand and his partner heard this information,
    they followed the same route as the taxi van. They drove onto the York
    University grounds, along Ian Macdonald Boulevard, up to Founders Road, and
    then westbound on Steeles Avenue.

[18]

At 23:43:19, DC Rand saw an orange and green Beck
    taxi van headed westbound on Steeles Avenue, almost at Jane Street, in the curb
    lane. There were few other vehicles on the road. DC Rand was sure that the taxi
    van he saw was the same one that York Security reported seeing the gun suspect
    enter approximately four minutes earlier. As they got closer to the taxi van,
    he saw a single passenger inside. He decided to stop the taxi van and investigate.

[19]

At 23:44:55, DC Rand and his partner stopped the
    taxi van just north of Steeles Avenue on Jane Street. DC Rand went to the rear passenger
    door and his partner went to the driver. As soon as he got to the taxi van, DC
    Rand opened the passenger door and saw that the appellant was the lone passenger.
    He was seated in the middle row of the van on the passenger side.

[20]

DC Rand asked the appellant to step out of the
    taxi van. When he complied, DC Rand saw that he was the same gender, age,
    height, and build as the suspected gunman. However, he immediately noticed that
    the appellant appeared to be Hispanic, not Black. At trial, DC Rand testified
    that he identifies as Hispanic; he described the appellants skin tone as
    medium and a little darker than his own.

[21]

DC Rand took the appellant to a grassy boulevard
    by the side of the road, told him he was investigating an allegation that a
    person with a gun had boarded an orange and green taxi van, and conducted a
    brief pat down search of the appellants person, looking for a weapon. He found
    none. No force was used and no weapons were drawn. The search was over in less
    than a minute.

[22]

DC Wenzel and his partner arrived on the scene
    just after the taxi van was pulled over. Safety was their primary concern as
    they suspected a firearm was in the taxi van. DC Wenzel looked inside the taxi
    vans open door and saw a knapsack between the bucket seats in the middle of
    the van. When he picked it up, he thought its weight was consistent with it
    containing a firearm so he opened the knapsack and looked inside. He did not
    find a gun but he did see several packages of what appeared to be controlled
    substances. He told DC Rand of his discovery. DC Wenzel then did a further
    visual search of the interior of the passenger area of the taxi van. He found
    no gun. His search of the knapsack and interior of the passenger area of the
    taxi van took about one minute.

[23]

DC Rand arrested the appellant based on the
    drugs in his knapsack. At that point, the appellant produced a further bag of MDMA
    from the left vest pocket of his jacket. DC Rand lodged the appellant in his
    scout car. It was 23:49.

[24]

The entire period the appellant was detained, from
    the initial stop of the taxi van to when he was arrested, was approximately two
    minutes.

The Trial

[25]

At trial, the appellant asserted that his ss. 8
    and 9
Charter
rights had been violated and sought exclusion of the
    evidence on that basis. He otherwise conceded his guilt.

[26]

He took no issue with the initial vehicle stop.
    He agreed that, based on the information the police had available, it was
    objectively reasonable for the officers to conclude that the Beck taxi van was
    connected to the gun call. However, he maintained that his continued detention
    after he exited the taxi van was not justified. He argued that, once it was
    apparent to the police that he did not match the broadcasted description of the
    gun suspect, they had no grounds to detain him and they had to stop their
    search efforts.

[27]

The trial proper and the
Charter voir dire

proceeded as a blended hearing. An agreed statement of facts was entered.
    It stated that 29.28 grams of MDMA were found in a clear ziplock bag in the
    appellants knapsack and that he turned over to the police a further 27.89
    grams of MDMA from his left vest pocket.

[28]

Three police officers testified: DC Rand, DC Wenzel
    and DC Rodriguez. All three police witnesses testified that their focus that
    evening was on determining whether there was a gun and neutralizing the risk to
    public safety.

[29]

As DC Rands testimony played a crucial role in the trial judges
Charter
ruling, key elements of it are now summarized.

[30]

DC Rand testified that there was no doubt in his
    mind that the taxi van he stopped was the one that the gun suspect had
    boarded. He spotted it within a couple of minutes of the last reported
    observation of the van that York Security had identified as carrying the gun
    suspect. It was the same type of vehicle that York Security had described and
    was unusual for the area. The timing of the events, information he had received
    about the route taken by the taxi van, distinctive characteristics of the green
    and orange Beck taxi vans and their scarcity in the vicinity, and the
    appellants resemblance to the suspect on four key descriptors gave him a
    reasonable suspicion that the appellant was in possession of a firearm.

[31]

He testified that it was only when the appellant
    stepped out of the Beck taxi van that he observed that the appellant did not appear
    to be Black.
DC Rand identifies as Hispanic and he
    recognized that the appellant also appeared to be Hispanic.
He described
    the appellant as male, Hispanic, 5 6, in his 20s, and of medium build.

[32]

DC Rand also testified that the appellants
    clothing, while similar to the description of the gun suspects clothing, did
    not match. DC Rand was less sure when he noticed the differences in the
    appellants clothing from the description given of the clothing worn by the gun
    suspect but thought it was likely during the pat down search. He said he was
    less concerned about the non-matching clothing because it is not uncommon for
    suspects to change or discard pieces of clothing to avoid police detection.

[33]

DC Rand testified that, despite the non-matching
    physical descriptor, everything else that had happened up to that point had
    been so bang on that he believed that the appellant was the gun suspect. His
    belief was based on the physical descriptors that the appellant did match and the
    following information, which he believed to be accurate:

·

the vehicle was a taxi van, which was rare for
    that area, and no other Beck taxi vans had been observed in that area that
    night;

·

the last known location of the Beck taxi van, as
    observed by York Security, was very specific and consistent with DC Rands
    initial observations of the vehicle and the location of the vehicle stop;

·

the traffic stop took place within just a couple
    of minutes of the last reported observation of the Beck taxi van by York
    Security; and

·

there was a single male passenger inside the
    Beck taxi van.

[34]

DC Rand testified that, after 18 years of
    policing experience, he was familiar with the frailties attached to eyewitness
    identification evidence. He said that stress and a host of other factors can
    impair an individuals ability to accurately observe and retain information and
    so he did not place much weight on the non-matching physical descriptor,
    especially when considered in combination with the other information he had,
    which he found to be reliable, such as the nature of the vehicle in question.

C.

THE
CHARTER
RULING

[35]

The trial judge began by addressing the defence
    submission that the police violated the appellants s. 9
Charter

rights
    because they lacked sufficient grounds to detain him once they saw that he did
    not match the gun suspects description.

[36]

After setting out the legal principles that govern
    investigative detentions, the trial judge noted that the defence took no issue
    with the initial traffic stop. The defence accepted that on the information the
    police had, it was objectively reasonable for the officers to conclude that the
    taxi van was connected to the 911 gun call. The trial judge then considered
    whether the appellants continued detention, after the initial stop, was
    justified. She observed that to justify the continued detention, the Crown had
    to show that the police had reasonable grounds to suspect, based on the
    totality of the circumstances, that the appellant was the individual connected
    to the gun call they were investigating.

[37]

The trial judge rejected the defence submission
    that DC Rand failed to turn his mind to the non-matching physical descriptors. She
    found, on the contrary, that DC Rand had taken them into consideration.  In
    making this finding, the trial judge relied on DC Rands testimony that: (1) immediately
    on removing the appellant from the taxi van, he was aware that the appellant
    appeared to be Hispanic, rather than Black, as the gun suspect had been
    described; and (2) while less sure of when he noticed the differences in
    clothing, he thought it was likely during the pat down search. DC Rand testified
    that he was less concerned about the non-matching clothing because it is not
    uncommon for suspects to change or discard pieces of clothing to avoid police detection.

[38]

The trial judge accepted DC Rands explanation
    for why he reasonably suspected that the appellant was the gun suspect despite
    the non-matching descriptors.  She referred to his evidence on the frailties
    attached to identification evidence: stress and a host of other factors can
    impair an individuals ability to accurately observe and retain information so he
    did not place much weight on it, especially when considered in combination with
    the information he had that he deemed accurate, such as the nature of the
    vehicle in question.

[39]

The trial judge found that DC Rand was entitled
    to rely on his 18 years of policing experience in assessing how much weight to
    attach to the physical descriptors. She also found that DC Rands conclusion
    that witness descriptions can often be wrong was reasonable, in the
    circumstances, when he knew nothing of the perspective or ability of the
    witness, or witnesses, who gave the description of the gun suspect.

[40]

The trial judge distinguished the case before
    her from
R. v. Clayton
,
2007 SCC 32, [2007] 2 S.C.R. 725,
    relied on by the defence. She explained that in
Clayton
, the police had
    only two physical descriptors available to them: skin colour and gender. In the
    case before her, there were multiple physical descriptors and the appellant
    matched several of them; the vehicle description was distinctive and a match; and,
    the geographical and temporal connections were relevant and accurate. She found
    that, when combined with the other factors, they provided ample and reasonable
    grounds for the appellants continued detention. She concluded that, even after
    taking into consideration the non-matching descriptors, the appellants initial
    and continued detention were objectively reasonable.

[41]

The trial judge then addressed whether the pat down
    search and/or the search of the appellants knapsack violated his s. 8
Charter

rights.

[42]

In holding that the pat down search was justified,
    the trial judge relied on her findings that justified the appellants continued
    detention and added that the police were responding to a 911 gun call; they had
    ample grounds to suspect the appellant was the individual that had been seen
    with a gun; and, the immediate concern for officer safety and the safety of
    others was self-evident. She found that the timing of the continued detention
    and the pat down search were responsive to the circumstances. Given how quickly
    the police located and stopped the orange and green taxi van, she found it
    reasonable to conclude that the appellant would still have had access to the firearm
    when the police detained and searched him. She concluded that the danger to
    safety was immediate and that the brief, non-intrusive and reasonable pat down search
    was lawful.

[43]

However, the trial judge held that DC Wenzels search
    of the appellants knapsack was unlawful. She noted that a search incident to
    investigative detention is anchored in preserving safety from immediate danger.
    In this case, the immediate danger was directly attached to the suspect, who
    was being detained by DC Rand. She said that a simple instruction removing the
    driver from the taxi van or seizing the knapsack, without searching it, would
    have alleviated all immediate safety concerns.

[44]

In light of the unlawful search of the knapsack,
    the trial judge conducted a s. 24(2) analysis to determine whether to exclude
    the evidence. In her view, all three steps in
R. v. Grant
,
2009
    SCC 32, [2009] 2 S.C.R. 353,

favoured admitting the evidence.

[45]

On the first step, the trial judge found that the
    breach was on the less serious end of the spectrum, since the police had acted reasonably
    and in good faith. On the second step, she found that, given the brief and
    circumscribed nature of the search of the knapsack, the breach had a minimal impact
    on the appellants privacy interest in its contents. On the third step, she
    viewed society as having a strong interest in the trial being resolved on its
    merits because of the serious nature of the drugs, and that the drugs were
    reliable evidence and essential to proving the Crowns case.

[46]

Accordingly, the trial judge admitted the
    evidence.

D.

THE ISSUES

[47]

The appellant submits that the trial judge erred
    in:

1.

finding that his continued detention was lawful;
    and

2.

failing to exclude the evidence pursuant to s.
    24(2).

E.

ANALYSIS

(1)

Did the
    trial judge err in finding that the appellants continued detention was lawful?

[48]

As soon as the appellant emerged from the taxi
    van, DC Rand saw that he did not match one key aspect of the description of the
    gun suspect: the appellant appeared to be Hispanic, not Black. The appellant
    submits that, at that point, the police had no grounds to continue to detain
    him and the trial judge erred in ruling otherwise. He argues that the trial
    judge erred in accepting DC Rands explanation for discounting his non-resemblance
    to the description of the gun suspect, placed undue weight on DC Rands belief
    that the taxi van was the same one that York Security saw the gun suspect
    enter, and failed to persuasively distinguish
Clayton
from the present
    case.

[49]

I do not accept this submission or the arguments
    made in support of it. In my view, in that dangerous and dynamic situation
    where public safety concerns were paramount, these experienced police officers
    had reasonable grounds to suspect that the appellant was the gun suspect.

The Relevant
    Legal Principles

[50]

The legal principles governing investigative
    detention are well settled and neither party contends that the trial judge erred
    in her articulation of them. Before setting out those principles, I remind
    myself that, in reviewing the decision below, this court must engage in a
de
    novo

analysis. This is so because whether the facts as found by the
    trial judge meet the standard for a reasonable suspicion is a question of law
    and reviewed on a correctness standard:
R. v. Chehil
, 2013 SCC 49,
    [2013] 3 S.C.R. 220, at para. 60.

[51]

A police officer may detain an individual for
    investigative purposes if there are reasonable grounds to suspect, in all the
    circumstances, that the individual is connected to a particular crime and such
    a detention is necessary:
R. v. Mann
, 2004 SCC 52, [2004] 3 S.C.R. 59,
    at para. 45.

[52]

The following recitation of the legal principles
    governing the reasonable suspicion standard comes from paras. 25-35 and 45 of
Chehil
.

[53]

The reasonable suspicion threshold respects the
    balance struck  in this case under s. 9 of the
Charter
 by permitting
    law enforcement to employ legitimate but limited investigative techniques (
Chehil
,
at para. 25). Reasonable suspicion derives its rigour from the requirement
    that it be based on objectively discernible facts that can then be subjected to
    independent judicial scrutiny. This scrutiny is exacting and must account for
    the totality of the circumstances (
Chehil
, at para. 26).

[54]

While reasonable grounds to suspect and
    reasonable and probable grounds to believe are similar, in that both must be
    grounded in objective facts, reasonable suspicion is a lower standard as it
    engages the reasonable possibility, rather than probability, of crime (
Chehil
,
    at para. 27). The fact that reasonable suspicion deals with possibilities,
    rather than probabilities, necessarily means that in some cases the police will
    reasonably suspect that innocent people are involved in crime. However, the
    suspicion cannot be so broad that it descends to the level of generalized
    suspicion (
Chehil
, at para. 28).

[55]

Reasonable suspicion must be assessed against
    the totality of the circumstances. The inquiry must consider the constellation
    of discernible facts that are said to give the investigating officer reasonable
    cause to suspect that an individual is involved in the type of criminal
    activity under investigation. This inquiry must be fact-based, flexible, and
    grounded in common sense and practical, everyday experience (
Chehil
,
    at para. 29). Reasonable suspicion need not be the only inference that can be
    drawn from a particular constellation of factors (
Chehil
, at para.
    32). Exculpatory, neutral or equivocal information cannot be disregarded when
    assessing a constellation of factors (
Chehil
, at para. 33).

[56]

The requirement for objective and ascertainable
    facts as the basis for reasonable suspicion permits an independent
    after-the-fact review by the court and protects against arbitrary state action.
    The onus is on the Crown to show that the objective facts rise to the level of
    reasonable suspicion, such that a reasonable person, standing in the shoes of
    the police officer, would have held a reasonable suspicion of criminal activity
    (
Chehil
, at para. 45).

Application to
    this Case

[57]

To be constitutionally sound, the inference of
    reasonable suspicion must be

grounded in
    objectively discernable facts known to the police and tied to both the
    individual being detained and the specific offence being investigated. In my
    view, assessed against the totality of the circumstances, a reasonable person
    standing in DC Rands shoes would have had a reasonable suspicion that the appellant
    was the gun suspect.

[58]

A consideration of the totality of the circumstances
    begins by placing the events in context. It will be recalled that these events
    began late at night in a food court on the York University campus, when a
    customer saw a man with a gun. The customer told a Shopsys employee who called
    York Security. York Security immediately made a 911 gun call and two police
    vehicles in the vicinity were deployed: DC Rand and his partner were in one
    car, DC Wenzel and his partner were in the other. Through video surveillance
    cameras, York Security saw the gun suspect get into an orange and green Beck
    taxi van and they described, to the police dispatch, the route that the taxi
    van was taking.

[59]

DC Rand and his partner knew that the suspected
    gunman was seen entering an orange and green Beck taxi van. They followed the
    same route as that of the taxi van and, within a very few minutes, they found
    and stopped an orange and green Beck taxi van carrying a lone male passenger,
    the appellant. At trial and before this court, the appellant accepts that the
    initial traffic stop was justified  that is, that it was objectively reasonable
    for the police officers to have concluded that the Beck taxi van was connected
    to the gun call.

[60]

As soon as the appellant stepped out of the taxi
    van, DC Rand knew that he did not match the gun suspect description in all
    respects. He was the same gender, age, height and build as the gun suspect but he
    appeared to be Hispanic, not Black. Later, during the pat down search, DC Rand also
    realized that the clothing the appellant was wearing was also different from
    that given for the gun suspect, although he felt it was similar.

[61]

However, DC Rand was certain that the taxi van
    he stopped was the one that the gun suspect had boarded. Its temporal and
    geographical proximity to the gun call, the information he had about the route
    the taxi van followed, the distinctive characteristics of the orange and green
    taxi van, the absence of other such vans in the area, and the presence of a
    single male passenger inside the taxi van all contributed to his certainty.
    This certainty, coupled with the appellants resemblance to the gun suspect on
    four key markers, gave DC Rand the reasonable suspicion that the appellant was
    in possession of a firearm.

[62]

The appellant says that the trial judge erred
    in accepting DC Rands explanation for why, despite the non-matching
    descriptors, he believed he had reasonable grounds to suspect that the
    appellant was the gun suspect. I do not agree.

[63]

It will be recalled that, at trial, DC Rand
    explained why the discrepancies in skin colour and clothing did not undermine
    his suspicion that the appellant was the gun suspect. During his many years as
    a police officer, he had worked dozens of gun calls and learned that eye witnesses
    are often mistaken when they try to describe a person they have just seen. He
    explained that there are many factors that can impair a witnesss ability to
    accurately observe and retain information about eyewitness identifications. In
    this case, DC Rand knew almost nothing about the eyewitnesss capacity to
    observe the gun suspect. And, in his experience, it is not uncommon for a
    suspect to change clothes while police are in pursuit.

[64]

The trial judge found that DC Rand was entitled
    to rely on his 18 years of police experience in assessing how much weight to
    attach to the physical descriptors. She also found his conclusion that such
    descriptions can often be wrong was reasonable in the circumstances where he
    knew nothing of the perspective or ability of the witness who had given the
    description of the gun suspect.

[65]

I see no error in the trial judges findings on
    this matter.  The known frailties of identification evidence have been identified
    both in social science literature and in Canadian jurisprudence: see, for
    example,
R. v. Hay
, 2013 SCC 61, [2013] 3 S.C.R. 694, at para. 40,
R.
    v. Hibbert
, 2002 SCC 39, [2002] 2 S.C.R. 445, at paras. 78-79. Further, the
    trial judge was obliged to determine whether a reasonable person standing in
    DC Rands shoes would have had a reasonable suspicion that the appellant was
    the gun suspect. In making that determination, it was open to the trial judge
    to consider DC Rands policing background and to find, as she did, that he was
    entitled to rely on his 18 years of policing experience when assessing how much
    weight to give to the non-matching physical descriptors.

[66]

The appellant also complains that the trial
    judge placed undue weight on DC Rands belief that the taxi van was the same
    one that York Security saw the gun suspect enter. Again, I see no error in her finding
    on this matter. The initial traffic stop was objectively reasonable, as the
    appellant conceded. Only a few brief minutes elapsed between York Security
    advising it had seen the gun suspect enter the orange and green taxi van and
    the police stop of a vehicle of the same description. Further, the location of
    the taxi van was fully consistent with the route which York Security described
    the taxi van carrying the gun suspect to have followed.

[67]

Finally, the appellant takes issue with the
    trial judges treatment of
Clayton
. Again, I do not agree. As the trial
    judge noted, in
Clayton
, the police had only two physical descriptors
    available to them. In this case, the appellant matched several of the physical
    descriptors; the vehicle description was distinctive and a match; and, the
    geographical and temporal connections were relevant and accurate.

[68]

In conclusion, I remind myself that in determining
    whether there are objective facts that rise to the level of reasonable
    suspicion, the court must conduct an exacting scrutiny. However, while probing,
    the judicial inquiry must be fact-based, flexible, and grounded in common
    sense. As well, it is important to recall that reasonable suspicion need not be
    the only inference that can be drawn from a particular constellation of
    factors.

[69]

In this case, the appellant matched four key
    characteristics of the gun suspect  gender, age, height and build. It is true
    that the appellant appeared to be Hispanic, rather than black, as the gun
    suspect had been described, and that his clothing was also different from that
    given for the gun suspect. But DC Rand did not disregard these non-matching
    physical descriptors. He explained why they did not detract from his certainty
    that the passenger in the Beck taxi van was the gun suspect and his explanation
    was found to be reasonable by the trial judge. The matching four physical
    characteristics, the distinctive features of the Beck taxi van, the absence of
    other such vehicles in the vicinity, and the temporal and geographical
    connections between the Beck taxi van and the gun sighting are objectively discernible
    facts to be understood within the context of a 911 gun call. The police were
    faced with a dangerous and dynamic situation in which public safety was the
    paramount concern. In my view, based on the totality of the circumstances, the
    appellants continued detention was objectively reasonable.

(2)

Did the trial judge err in failing to exclude
    the evidence?

[70]

The trial judges s. 24(2) analysis is based on
    her conclusion that the search of the appellants knapsack was the only breach
    of his
Charter
rights. The appellants submission is that his continued
    detention, following the initial stop of the taxi van, was unlawful and
    constituted a breach of s. 9. Accordingly, he says, this court owes no
    deference to the trial judges application of the
Grant

test.

[71]

As I have found that the appellants continued
    detention was lawful, it is unnecessary to revisit the trial judges s. 24(2)
    determination.

F.

DISPOSITION

[72]

Accordingly, I would dismiss the conviction appeal.
    The Crown has conceded that the mandatory victim fine surcharge should be quashed
    and I would so order.

Released: March 11, 2020 (K.F.)

E.E. Gillese
    J.A.

I agree. K.
    Feldman J.A.

I agree.
    B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Bernard, 2020 ONCA 170

DATE: 20200305

DOCKET: C65447

Rouleau, Benotto and Harvison
    Young JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Beverley Bernard

Appellant

Maija
    Martin and David Reeve, for the appellant

Victoria
    Rivers, for the respondent

Heard:
    February 6, 2020

On appeal
    from the conviction entered by Justice Paul OMarra of the Ontario Court of
    Justice on November 16, 2017, with reasons reported at 2017 ONCJ 847.

REASONS FOR DECISION

[1]

The appellant arrived at Pearson airport on a flight from Jamaica. She
    was arrested after a border agent found cocaine concealed in four jars that she
    had been carrying in her suitcase. The jars concealing the cocaine were one of
    curry powder, two of Metamucil and one of psyllium.

[2]

The appellant claimed that she did not know there were drugs in these
    containers that a stranger had asked her to bring to Canada. She was convicted
    by the trial judge of importing cocaine. She appeals on the basis that the
    trial judge erred by: (i) not conducting a
voir dire
to determine whether a Jamaican Patois interpreter was necessary; (ii)
    misapprehending the evidence; (iii) failing to consider the third branch of
W(D)
; and (iv) misapplying the principles in
R. v. Villaroman
,

2016
    SCC 33, [2016] 1 S.C.R. 1000
.

[3]

We do not accept these submissions.

[4]

The language issue arose from use of a pronoun. It was suggested that in
    Jamaican Patois, where the appellant said he, she could be referring to a
    woman. Defence counsel raised this with the trial judge and requested a
voir dire
. However, counsel agreed with the trial judge
    that, as a precondition to the request, the court should review the video of
    the appellants testimony. This was done, and the request was never raised
    again. Since it was not pursued at trial, there was no need for a
voir dire
.

[5]

On the second issue: the trial judge does appear to have been mistaken
    about some of the details of the evidence. In particular, whether the male
    stranger or the appellants cousin physically handed her the jars containing
    the cocaine; the precise movements of the people around the appellant over the
    day and hours preceding the flight to Toronto; and her family relationships. However,
    none of these matters were material to his ultimate findings on credibility and
    guilt.

[6]

On the third issue: the trial judge correctly applied
W(D)
.
He examined the Crowns case and was satisfied of guilt beyond a reasonable
    doubt.

[7]

The final issue, with respect to
Villaroman
,
arises because the trial
    judge said that the evidence reasonably supported the inference of guilt. The
    appellant submits that he did not consider other reasonable inferences that pointed
    towards the appellants innocence. However, when read as a whole, it is clear
    that the trial judge correctly understood the law. He explained that aspects of
    the appellants evidence defied common sense and he disbelieved her evidence
    as to how she came into possession of the drugs. The trial judge then went on
    to find that her evidence revealed inherently suspicious events and in effect,
    her evidence alone was capable of supporting a finding of deliberate
    ignorance. These findings when combined with the evidence led by the Crown, left
    no scope for inferences other than guilt.

[8]

The appeal is dismissed.

Paul Rouleau J.A.

M.L. Benotto J.A.

Harvison Young J.A.