COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

R. v. Potts,

2011 BCCA 9

Date: 20110114

Docket: CA037956

Between:

Regina

Appellant

And

Randall Richard
Potts

Respondent

Before:

The Honourable Madam Justice Rowles

The Honourable Mr. Justice Lowry

The Honourable Mr. Justice Hinkson

On appeal from:
Supreme Court of British Columbia, March 12, 2010 (
R. v. Potts
,

2010
BCSC 319, Vancouver Docket No. 24696
)

Counsel for the Appellant:

M.M. Devlin, Q.C.

J.K. Torrance

Counsel for the Respondent:

B. Craig

Place and Date of Hearing:

Vancouver, British
  Columbia

September 28, 2010

Place and Date of Judgment:

Vancouver, British
  Columbia

January 14, 2011

Written Reasons by:

The Honourable Madam Justice Rowles

Concurred in by:

The Honourable Mr. Justice Lowry

The Honourable Mr. Justice Hinkson

Reasons for Judgment of the Honourable
Madam Justice Rowles:

I.        Overview

[1]

The Crown seeks leave to appeal the sentence imposed on Randall Richard
Potts following his guilty plea to conspiracy to produce and traffic in
methamphetamine, two counts of trafficking in cocaine, and to unlawful possession
of proceeds of crime.  The charges arose out of a two-year RCMP investigation
of the East End Chapter of the Hells Angels (EEHA) in which a paid police
agent, Michael Plante, was used for the purpose of infiltrating the EEHA.

[2]

The sentencing judge stated that if Potts had been found guilty after a
trial, he would sentence Potts to 4 ½ years in prison for the conspiracy to
produce and traffic methamphetamine, taking into account the seriousness of the
offence, Potts criminal record, his role in the crime, and his rehabilitation.
 For the other offences, the judge said that, on the same basis, he would
sentence Potts to one year for trafficking four ounces of cocaine, to two years
for trafficking 26 ounces of cocaine, and to 18 months for possession of the
proceeds of crime, with all sentences to be served concurrently.  From the
resulting global sentence of 4 ½ years, the judge deducted six months on
account of Potts medical condition, one year for Potts guilty pleas, and one
year to take into account the effect of certain police conduct on Potts while
the police were pursuing their investigation, thus making an effective global
sentence of two years.  The judge deducted one further year for the time Potts
spent in pre-trial custody, resulting in an actual sentence of one year.
Justice Leasks reasons for sentencing, delivered 12 March 2010, are indexed at
2010 BCSC 319.

[3]

The Crowns submission is that the sentencing judge erred in principle
and arrived at an unfit sentence:  (i) in failing to impose sentences that were
proportionate to the seriousness of the crimes and the offenders degree of
responsibility in committing them; (ii) in failing to give proper weight to denunciation
and deterrence and in overemphasizing rehabilitation; (iii) in his approach to
the issue of state misconduct as discussed in
R. v. Nasogaluak
, 2010
SCC 6, [2010] 1 S.C.R. 206, and
R. v. Punko
, 2010 BCCA 365, 258
C.C.C. (3d) 144 at paras. 75 and 82-84; (iv) in making a six-month
reduction in Potts sentence based on his medical condition; (v) in taking a
piecemeal approach to the calculation of sentence; and (vi) in imposing
concurrent rather than consecutive sentences for the cocaine trafficking
offences.

[4]

The Crown argues, as it did during the sentencing proceedings, that fit sentences
would be as follows: a sentence of eight years for the methamphetamine conspiracy
count; concurrent sentences of four years each on the two cocaine trafficking
counts to be served consecutively to the eight-year sentence on the conspiracy
count; and a sentence of three years for possession of proceeds of crime, the
latter to be served concurrently with the sentences on all other counts.
Inasmuch as the Crown seeks consecutive sentences for the methamphetamine conspiracy
and the cocaine trafficking counts, the Crown acknowledges that the overall
sentence would have to be adjusted under the totality principle and suggests, in
that regard, a reduction of the overall sentence by one to two years.  The
Crown also acknowledges that credit of one year for Potts pre-trial custody
must be deducted from his sentence.

[5]

In response to the Crowns appeal, Potts takes
issue with the Crowns argument that the sentencing judge failed to give proper
weight to proportionality or that he erred in principle by placing too much
emphasis on rehabilitation at the expense of denunciation and deterrence.
In
Potts submission, much of the Crowns argument is an attempt to recast and
mischaracterize the sentencing judges findings of fact.  Potts submits that absent
allegations of palpable and overriding error or unreasonableness in the
findings of fact, the judges findings must be accepted.  Potts further argues
that the Crowns arguments ignore the case authorities that require
deference to be accorded the judges discretion on matters relating to the
weighing or balancing of the relevant principles in sentencing, and whether
sentences are to be served concurrently or consecutively.  In addition to the
totality principle, that would have to be considered if the sentences for the
drug offences were ordered to be served consecutively, Potts argues that under
the same principle, he ought not to suffer any greater penalty because the
Crown proceeded against him for offences arising out of the E-Pandora
investigation by way of two separate indictments.  In that regard, Potts is
referring to the effective sentence of seven years he received for weapons
offences charged on the indictment preferred by the Crown provincial (see
R.
v. Violette
, 2009 BCSC 1025 at paras. 62-92).

[6]

The fundamental principle in sentencing is that a
sentence must be proportionate to the gravity of the offence and the degree of
responsibility of the offender.  The proper application of that principle in
this case is contentious.  During part of the police investigation, some of
Potts activities in the conspiracy to produce and traffic in methamphetamine
were made to appear to Potts to be successful whereas much of what Potts was
being told by Plante about production and sales was fiction.  The false
information was related to Potts by Plante in order to facilitate greater
access to those in the EEHA and to cover up other deceptions.  These deceptions
enabled the police to divert drugs from the market.  The sentencing judge took
the view that Potts degree of responsibility for the drug crimes was
diminished by the part Plante played in facilitating and directing Potts
criminal activity.

[7]

Potts was addicted to the painkiller, Percocet.  During
the investigation, Plante provided Potts with Percocet and alcohol, which the
police supplied.  The sentencing judge found that providing Potts with Percocet
was to Potts detriment and reprehensible and, based on the reasoning in
Nasogaluak
,
held that Potts sentence ought to be reduced as a result.

[8]

The judges conclusion that a reduction in sentence should
be made because of Plantes supplying Potts with Percocet and alcohol during
the investigation would arguably fall within the reasoning in
Nasogaluak.
However,
I am of the view that neither the gravity of Potts drug offences nor the
degree of his responsibility in committing them was diminished by Plantes
actions, taken at the direction of or with the complicity of the police.

[9]

The sentencing judge rejected the Crowns submission
that Potts was a sophisticated criminal and accepted the paid police agents
description of Potts as a low end mope.  Regardless of Potts status within
the EEHA or his inability or ineptitude in arranging for a second production run
or cook of methamphetamine, it is clear that Potts had succeeded in the first
cook, which produced 18 pounds of methamphetamine intended for sale in the
market.  Moreover, there can be no doubt about Potts goal with respect to a
second cook because he put up $60,000 for that purpose.

[10]

The fictions and deceptions in which Plante and the police engaged with
Potts cannot mask or diminish the gravity of the
methamphetamine
conspiracy offence to which Potts pleaded guilty.

[11]

The two cocaine trafficking offences involved the sale, in total, of 30
ounces of cocaine to Plante.  The sentencing judge referred to the cocaine sales
as being stage-managed by the police.  Entrapment was not raised as a
defence. Regardless of whether Plante solicited the purchases in order to
facilitate his infiltration of the EEHA, it is clear from the wiretap evidence that
Potts, independent of Plante, had a supply of cocaine with which to make the two
sales.  Potts received $32,800 from the sale of the cocaine.  The fact that Plante
sought to make the purchases and that the police were able to divert the drugs
from the market does not, in my view, diminish
the gravity of
Potts two cocaine trafficking offences.

[12]

In my respectful view, the global sentence the judge
imposed in this case
was not proportionate to the gravity of the drug offences
and to Potts degree of responsibility in committing them.  I am also of the
view that the judges reduction of the global sentence in stepped, successive
stages had the effect of giving undue weight to what the judge considered to be
mitigating factors.  In this case, the need to emphasize deterrence and
denunciation ought to have been the predominant consideration in sentencing for
the drug offences, given the serious nature of those offences and the
circumstances in which they were committed.

[13]

I would grant leave and allow the appeal.
My
reasons follow.

II.       Legislation
and case authorities on sentencing

[14]

Part XXIII of the
Criminal Code
, R.S.C. 1985, c. C-46 (
Code
)
contains the purposes and principles applicable in sentencing.  The
fundamental
purpose
of sentencing, the
fundamental principle
in sentencing, and
other sentencing principles are found, respectively, in ss. 718, 718.1,
and 718.2 of the
Code
:

Purpose.

718.     The fundamental purpose of sentencing is to
contribute, along with crime prevention initiatives, to respect for the law and
the maintenance of a just, peaceful and safe society by imposing just sanctions
that have one or more of the following objectives:

(
a
)        to denounce
unlawful conduct;

(
b
)        to deter the
offender and other persons from committing offences;

(
c
)        to separate
offenders from society, where necessary;

(
d
)        to assist in
rehabilitating offenders;

(
e
)        to provide
reparations for harm done to victims or to the community; and

(
f
)         to promote a sense of responsibility in
offenders, and acknowledgment of the harm done to victims and to the community.

Fundamental principle.

718.1
A sentence must be
proportionate to the gravity of the offence and the degree of responsibility of
the offender
.

Other sentencing principles.

718.2
A court that imposes a sentence shall also take
into consideration the following principles
:

(
a
)
a sentence
should be increased or reduced to account for any relevant aggravating or
mitigating circumstances relating to the offence or the offender
, and,
without limiting the generality of the foregoing,

(i)         evidence that the
offence was motivated by bias, prejudice or hate based on race, national or
ethnic origin, language, colour, religion, sex, age, mental or physical
disability, sexual orientation, or any other similar factor,

(ii)        evidence that the
offender, in committing the offence, abused the offenders spouse or common-law
partner,

(ii.1)     evidence that the
offender, in committing the offence, abused a person under the age of eighteen
years,

(iii)       evidence that the
offender, in committing the offence, abused a position of trust or authority in
relation to the victim,

(iv)       evidence that the
offence was committed for the benefit of, at the direction of or in association
with a criminal organization, or

(v)        evidence that the
offence was a terrorism offence

shall be deemed to be aggravating
circumstances;

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

(
c
)
where
consecutive sentences are imposed, the combined sentence should not be unduly
long or harsh
;

(
d
)        an offender
should not be deprived of liberty, if less restrictive sanctions may be
appropriate in the circumstances; and

(
e
)        all available
sanctions other than imprisonment that are reasonable in the circumstances
should be considered for all offenders, with particular attention to the
circumstances of aboriginal offenders.

[Emphasis added.]

[15]

The principle of proportionality set out in s. 718.1 of the
Code
is central to the sentencing process:
R. v. Solowan
, 2008 SCC 62,
[2008] 3 S.C.R. 309 at para. 12;
Nasogaluak
at para. 41.  What
is meant by proportionality in the context of sentencing was considered in
Nasogaluak
,
at para. 42:

[42]      For one, it requires that a sentence not
exceed
what is just and appropriate, given the moral blameworthiness of the offender
and the gravity of the offence.  In this sense, the principle serves a
limiting or restraining function.  However, the rights-based, protective
angle of proportionality is counter-balanced by its alignment with the just
deserts philosophy of sentencing, which seeks to ensure that offenders are
held responsible for their actions and that the sentence properly reflects and
condemns their role in the offence and the harm they caused (
R. v. M. (C.A.)
,
[1996] 1 S.C.R. 500, at para. 81;
Re B.C. Motor Vehicle Act
, [1985]
2 S.C.R. 486, at pp. 533-34,
per
Wilson J., concurring). Understood
in this latter sense, sentencing is a form of judicial and social censure (J.V.
Roberts and D.P. Cole, Introduction to Sentencing and Parole, in Roberts and
Cole, eds.,
Making Sense of Sentencing
(1999), 3, at p. 10).
Whatever the rationale for proportionality, however,
the degree of censure
required to express societys condemnation of the offence is always limited by
the principle that an offenders sentence must be equivalent to his or her
moral culpability, and not greater than it.  The two perspectives on
proportionality thus converge in a sentence that both speaks out against the
offence and punishes the offender no more than is necessary.

[Italic emphasis in original; underlining
added.]

[16]

Thus, in sentencing Potts, the judge had to consider the degree of
censure required to express societys condemnation of the offences, while recognizing
that the degree of censure is limited by the principle that the sentence must appropriately
reflect Potts moral culpability, and not more:
Nasogaluak
, at para. 42.

[17]

The standard of review on a sentencing appeal is a deferential one.  The
sentencing judge enjoys considerable discretion because of the individualized
nature of the process:
R. v. L.M
.,

2008 SCC 31, [2008] 2 S.C.R.
163 at paras. 14, 17.  [In] the absence of an error in principle, failure
to consider a relevant factor, or overemphasis of the appropriate factors, a
sentence should only be overturned if the sentence is demonstrably unfit:
R.
v. McDonnell,

[1997] 1 S.C.R. 948, 114 C.C.C. (3d) 436 at para. 17;
R. v. Li
,

2009 BCCA 85 at para. 23
.

[18]

At the time of the conspiracy offence, methamphetamine was listed in
Schedule III to the
Controlled Drugs and Substances Act
, S.C. 1996,
c. 19 (
CDSA
), making the maximum sentence ten years.  Methamphetamine
was removed from Schedule III and added to Schedule I on 10 August 2005 by SOR/2005-235.
The reclassification had the effect of increasing the maximum penalty from ten
years to life imprisonment because life imprisonment is the penalty that
attaches to a Schedule I drug and that is so regardless of whether the offence
is trafficking (
CDSA
s. 5(3)(a)) or production (
CDSA
s. 7(2)(a)).

[19]

Before methamphetamine was re-scheduled, this Court recognized the drugs
addictive and dangerous properties.  In
R. v. A.J.C.
, 2002 BCCA 29,
Donald J.A. said at para. 10:

[10]      I also wish to record
my agreement with Mr. Yules position for the Crown that methamphetamine
should be understood as a dangerous drug having highly addictive properties and
the potential for inducing aggressiveness and violent behaviour.  It is said
that methamphetamine poses a much greater risk to the users health than does
cocaine by causing brain damage.  For sentencing purposes possession of
methamphetamine may be treated as comparable to possession of cocaine, allowing
for the difference that cocaine is a Schedule 1 drug and methamphetamine is a
Schedule 3 drug under the
Controlled Drugs and Substances Act
.

[20]

The Crown acknowledges that the maximum sentence provided in the
CDSA
at the time the methamphetamine conspiracy offence was committed by Potts
applies in this case.  That is so because, among other things, s. 11(i) of
the
Canadian Charter of Rights and Freedoms
provides:

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.

[21]

The effect to be given to maximum sentences must be considered in light
of the sentencing principles in the
Code
as elucidated in recent case
authorities, rather than the notion that the maximum sentence must be reserved
for a case of the worst crime committed in the worst circumstances by the worst
offender.  In
R. v. L.M.
, at paras. 20-22, the Supreme Court referred
to what was said in
R. v. Cheddesingh
, 2004 SCC 16, [2004] 1 S.C.R. 433
and re-iterated that the determination of the appropriate sentence must be
guided by the fundamental principle in s. 718.1 of the
Code
that a sentence
must be proportionate to the gravity of the offence and the degree of responsibility
of the offender.  In
R.

v.

L.M.
, LeBel J. said
at para. 20:

[20]      In
R. v. Cheddesingh
, [2004] 1 S.C.R. 433,
2004 SCC 16, the Court acknowledged the exceptional nature of the maximum
sentence, but firmly rejected the argument that it must be reserved for the
worst crimes committed in the worst circumstances.  Instead, all the
relevant factors provided for in the
Criminal Code
must be considered on
a case-by-case basis, and if the circumstances warrant imposing the maximum
sentence, the judge must impose it and must, in so doing, avoid drawing
comparisons with hypothetical cases:

... terms such as stark horror, worst offence and worst
offender add nothing to the analysis and should be avoided.  All relevant
factors under the
Criminal Code
... must be considered.  A maximum
penalty of any kind will by its very nature be imposed only rarely ... and is
only appropriate if the offence is of sufficient gravity and the offender displays
sufficient blameworthiness.  As is always the case with sentencing, the
inquiry must proceed on a case-by-case basis.

[para. 1]

III.       Background
leading to the sentencing proceedings

[22]

Potts was arrested on 15 July 2005 following a two-year RCMP
investigation known as Project E-Pandora, a wide-ranging investigation into the
EEHA which resulted in a large number of people being charged with drug and
other offences.  The police used a paid police agent named Michael Plante to
infiltrate the EEHA.  Plante, who was then a recruitment member in the EEHA,
was to receive money from the police based on the number of members of the
Hells Angels against whom he collected evidence.

[23]

Others charged as a result of the E-Pandora investigation with respect
to production and trafficking in methamphetamine included John Virgil Punko and
Kerry Ryan Renaud.  Punko had attained full patch status in the EEHA in the
spring of 2004.  The conspiracy offence date alleged in the indictment charging
Potts was between 1 March 2004 and 3 June 2005.  Between March and October
2004, Potts was a prospective member of the EEHA, and in October 2004, he
became a
full patch member.  Contemporaneous wiretap
evidence showed that Potts was very proud of that fact.

[24]

As a result of the E-Pandora investigation, indictments were preferred
by the British Columbia Attorney Generals office and the Public Prosecution
Service of Canada against a number of persons including Potts and Punko, which alleged
a number of offences under the
Code
and the
CDSA
.  On both indictments
Potts and Punko were charged under the
Code
with criminal organization
offences.  The federal indictment was held in abeyance until the Crown
provincial had completed the prosecution on its indictment.

[25]

In the prosecution on the provincial indictment, heard before Justice
Romilly and a jury, Potts stood trial with Ronaldo Lising, Jean Joseph
Violette, and Punko.  After a ten-month trial, the accused were found guilty of
7 out of the 26 counts on which they stood charged.  They were found not guilty
of any of the criminal organization offences.

[26]

Potts was convicted of four weapons offences charged under ss. 81(1)(d),
95(1), 92(1) and 92(2) of the
Code
.  The weapons involved in the most
serious of the counts were four grenades and, on that count, Justice Romilly imposed
a seven-year sentence.  The sentences for the other weapons offences were
ordered to be served concurrently and thus the effective global sentence was
seven years.  Potts had remained in custody since his arrest in July 2005 and,
as a result of the time he had spent in custody awaiting trial, Justice Romilly
reduced the sentence to one day.

[27]

Before Potts pleaded guilty to the drug and unlawful possession of
proceeds of crime charges in the federal indictment, Justice Leask ruled that
since Potts had been acquitted on the criminal organization offence in the
provincial prosecution, the Federal prosecution could not lead evidence of the
same offence based on the doctrine of issue estoppel:  see
R. v. Punko
,
2010 BCSC 70, 251 C.C.C. (3d) 232.  I understand that a Crown appeal arising
from that point, which resulted in a stay being entered, is pending.  The
appeal was heard by a division of this Court on 30 November 2010 and judgment
has been reserved.

IV.      Background
to the offences

[28]

When the E-Pandora investigation began, Potts and Plante had known each
other for a number of years.  In March 2004, Potts was looking for a methamphetamine
production cook and Plante arranged to introduce him to Renaud.  Potts supplied
a large quantity of ephedrine, an essential ingredient in the manufacture of
methamphetamine, and also financed the purchase of raw materials. Potts relied
on Renaud and other conspirators to physically produce and distribute the
product.  Potts monitored the distribution of the drugs and received his share
of the profits through Plante.  The scheme involved the production and
distribution of approximately 18 pounds of methamphetamine over an eight-month
period between April 2004 and January 2005.  At a later point, Potts invested
$60,000 in a second cook.  Although he was led to believe that another cook had
been done and that the product was being distributed to an Alberta buyer, the
information he was given about both was fictitious.

[29]

In the fall of 2004, Potts sold a total of 30 ounces of cocaine to
Plante.  The first cocaine transaction took place on 20 September 2004 when Potts
drove to Plantes residence.  Plante gave Potts $4,800 in exchange for four
ounces of cocaine.  The second transaction took place on 25 October 2004.  Potts
again met with Plante at which time Plante gave Potts $28,000.  Potts then
arranged to have an EEHA associate, Chad Barroby, deliver 26 ounces of cocaine
to Plante at a local coffee shop.  From what Potts said in contemporaneously
recorded, intercepted communications with Plante, it is clear that Potts had
access to a source of supply for cocaine which was independent of Plante.  On the
first occasion Potts physically provided the drugs to Plante and, on the second,
he directed someone else to do so.  Potts personally received the proceeds from
both transactions.

[30]

The proceeds of crime offence related to the money received by Potts
from the distribution of methamphetamine and cocaine, specifically, $231,500
from the manufacture and distribution of methamphetamine and $32,800 from
trafficking in cocaine.  Some of the money he received came, in fact, from the
police.

[31]

Potts was addicted to Percocet, a powerful painkiller.  Plante supplied Potts
with large quantities of the drug.  Similarly, Plante supplied Potts with
alcohol when Potts was known to be an alcoholic.  The police were complicit in
the supply of both Percocet and alcohol.

[32]

Plante quit his role as a police agent on 21 January 2005 and left the
EEHA recruitment program.  Thereafter, Plante did not have any further contact
with Potts.  The Crown did not allege any attempts by Potts to engage in any
further drug offences after Plante left the program.  The wiretap authorization
on Potts various telephone lines continued in force until the end of July
2005.

[33]

When he was arrested on 15 July 2005, Potts had the
following criminal record: 1981, possession of stolen property and use of a
stolen credit card (suspended sentence with probation); 1991, assault ($500, ID
20 days); 2000, careless storage of a firearm ($300, probation) and possession
of property obtained by crime over $5,000 ($500, probation).  The sentencing
judge did not regard
Potts pre-E-Pandora record as a serious
aggravating factor in sentencing and noted that Potts had not previously
received a jail sentence.

[34]

Potts participation in the drug offences was not the only criminal
activity that resulted in charges against him as a result of the E-Pandora
investigation.  As noted earlier, when he was arrested in July 2005, Potts,
along with Punko, Violette, and Lising were variously charged in an indictment with
extortion, threatening, counselling mischief, weapons possession, and criminal
organization offences.  Potts was found guilty of four weapons offences which
were committed between 1 October 2004 and 1 April 2005.  The
weapons included four grenades, a loaded Colt .45
calibre
semi-automatic pistol, an Intratec 9 mm
calibre
semi-automatic pistol, a Ruger .22
calibre
semi-automatic rifle (the latter two with readily accessible ammunition),
a
Franchi .22 calibre semi-automatic rifle, a Voere bolt action rifle, and a Ruger
.44 magnum calibre revolver.  Potts was also found guilty of possession of
prohibited devices consisting of a magazine for an lntratec 9 mm semi-automatic
pistol, and silencers for the two pistols and the two semi-automatic rifles.

[35]

Potts was sentenced on the weapons offences on 27 July 2009 by Justice
Romilly:
Violette
.  Justice Romilly viewed the weapons offences,
particularly the possession of grenades, to be of a very serious nature requiring
a very strong emphasis to be given to denunciation and general deterrence.  The
aggravating factors he found included the fact that the grenades could be used
for no purpose other than killing, maiming or the destruction of property, that
the firearms constituted a small arsenal that could be put to use on very
short notice,
that four of the firearms had silencers which suggested
they were not viewed as defensive weapons,
and that the weapons had been
stored at the home of Potts parents.  Justice Romilly found that Potts was
holding the weapons for the EEHA.

[36]

In 2008, w
hile Potts was in custody awaiting
determination of the drug offences and the separately-charged weapons offences,
he was found guilty of contempt of court for refusing to testify in the trial
of an EEHA associate, for which he received a six-month sentence.

[37]

Justice Romilly was uncertain about Potts prospects for rehabilitation
and, as I read his reasons, did not regard that as a mitigating factor in sentencing.

[38]

Potts had remained in custody subsequent to his arrest in July
2005 on both the Federal and provincial indictments.  In explaining how he
arrived at the sentence to be imposed for the weapons offences,
Justice Romilly summarized the time Potts had spent in custody prior to
sentencing and its effect on the seven-year sentence he deemed fit for the most
serious of the weapons offences:

[90]      Potts has spent 4 years
and 12 days in pre-trial custody; he is entitled to credit of 8 years and 24
days. From this I subtract the time he served on the contempt charge, 6 months,
which leaves him with a credit of 7 years, 6 months and 24 days. As this amount
exceeds the sentence I have deemed fit for Potts, I sentence him to 1 day.

[39]

Potts sought leave to appeal the one-day sentence imposed by Justice
Romilly but leave was refused by Hall J.A. (in chambers) who observed, among
other things, that the length of the effective sentence was a matter Potts might
raise in sentencing on the drug offences:  BCCA Registry CA037956, 4 May 2010.

[40]

On
7 December 2009, Potts entered a guilty plea to the
methamphetamine
conspiracy, the two cocaine trafficking offences and the
proceeds of crime offence.

[41]

In his sentencing reasons, the judge recounted in some detail the
evidence as to how the methamphetamine, which had been produced for Potts, was
dealt with by the police and Plante and how it came about that Potts sold
cocaine to Plante on two occasions.  A summary of the findings made by the
trial judge appears below, along with the paragraph references from the judges
reasons:

·

The E-Pandora operative, Plante, introduced Potts to the
methamphetamine cook, Renaud, and acted as a go-between for them (paras. 5-6).

·

Most of the methamphetamine produced in the first cook was either
purchased or seized by the police (paras. 11, 13, 18, 20, 26, 27).

·

Surrey RCMP were prepared to arrest Potts in April of 2004, but
were prevented from doing so by the E-Pandora investigators.  If the Surrey
RCMP had arrested Potts in April 2004, his criminal involvement would have
concluded much earlier without either the cocaine trafficking or possession of
proceeds of crime offences arising (paras. 14-15, 108).

·

The methamphetamine sales of 23 August and 17 September 2004 were
fictional sales intended to cover up the fact that Plante, with Punko, had
stolen 6.7 pounds of Potts methamphetamine (paras. 29-31).

·

The cocaine sales of 20 September and 21 October 2004 were stage-managed
by the police.  In both instances the cocaine was purchased by the police and
diverted from the illicit drug market (paras. 36, 43, 66).

·

The police were using Potts as an avenue to get to other members
of the EEHA (paras. 35, 46-47).  Potts was a pawn in their investigation
(para. 98).

·

Plante, with the full cooperation of the police, provided Potts
with steroids, Percocet, and alcohol knowing he was a drug addict and alcoholic
(paras. 28, 38, 81).

·

Potts was incapable of organizing or funding his own
methamphetamine cook (paras. 17, 44, 47-48).

·

The second methamphetamine cook, Plantes Alberta buyer, and the
ensuing sales were all fictional (paras. 46-54).

·

Potts was not involved in any criminal or drug offences after
Plante left the E-Pandora investigation in January 2005 (para. 55).

·

Potts criminal record consisted of minor offences, punishments
were at the low end, and prior to E-Pandora, Potts had never received a jail
sentence (para. 64).

·

Potts was less culpable than Renaud, Pearse, and Punko (para. 101).

[42]

The sentencing judge found that Potts could not be regarded as a
sophisticated criminal.  In that regard, he said:

[65]      The Crown urges me to treat as an aggravating
factor the proposition that Mr. Potts was a sophisticated criminal.  On
this subject, I am inclined to agree with the Crowns undercover agent that Mr. Potts
was a low end mope.  I cannot satisfy myself on the evidence before me that Mr. Potts
was a sophisticated criminal.  He needed Mr. Plantes help to find a
methamphetamine cook.  His attempt to distribute his 18 pounds of
methamphetamine led to 2 pounds going to Mr. Ayach which was seized by the
police with no return to Mr. Potts; 2 pounds going to Mr. Barroby
from which Mr. Potts received only $10,000 against a stated price of
$18,000; 6.7 pounds being stolen by Messrs. Punko and Plante and the final 7
pounds being seized from Mr. Plante by the police.  Although the
police paid Mr. Potts $74,500 for the seized drugs (notionally sold by Mr. Plante
to the fictional Alberta buyer) and $67,000 to cover up the rip-off, these
events do not support the characterization of Mr. Potts as a sophisticated
criminal.

[66]      According to Mr. Plante,
Mr. Potts idea of pricing was out of date; he did not understand the list
of methamphetamine producing equipment he showed Mr. Potts nor would he
have known how to obtain any of it.  His sale of cocaine, again at an
unrealistic price, was stage-managed by the police, and their agent Mr. Plante,
to buttress the idea that Mr. Plante was a successful mid-to-high end drug
middleman with purchasers standing by to take whatever drugs he could persuade
various Hells Angels members to offer for sale.

[43]

As to his personal circumstances, Potts was 49 years of
age at the time of the sentencing proceedings in December 2009.  He had been
together with his common-law wife since 1988, with the exception of two periods
of separation in 1999 and 2004.  Potts had some medical problems, which the
judge described as
relatively severe, and included recurring
diverticulitis; chronic back problems; and a recurring abscess on his buttocks.
At sentencing, Potts had the full support of his common-law
wife and their children and had reportedly made some progress towards
rehabilitation while incarcerated.  Potts had worked as a truck driver in the
past and there was some potential for similar employment in the future.

V.       The
judges sentencing reasons and the Crowns points on appeal

[44]

Although he did so in the course of giving reasons for sentencing
in Punkos case, the judge did not refer specifically to the proportionality
principle in s. 718.1 of the
Code
in his reasons in Potts case.  As
he had in his reasons in Punkos case, Justice Leask began by recognizing the
serious nature of the methamphetamine offence.  At para. 58, he referred to
the decision of Justice Ryan in
R. v. Francis
, 2008 BCCA 309 at para. 13,
in which she had quoted with approval what had been said by the sentencing
judge in that case:

[83]      These reports, the expert evidence, and the
conclusions drawn by the judges in these authorities all underscore the
dangerous and highly-addictive nature of methamphetamine and related drugs.  The
advent of increased availability and use of methamphetamine and like substances
is a true scourge and a tragedy for the people -- often young people -- who
become addicted.  Evidence indicates that users are often permanently
harmed.  They often become less or non-productive members of society
caught in a downward spiral of addiction.  They require additional health care.
 Their addictions require medical and psychiatric treatment.  They need
financial and emotional support from their families and their communities.  Many
remain unsuccessful in overcoming their addictions.

[84]      Insofar as courts are
able to impose sentences that denounce and deter the increased use and
distribution of methamphetamine, in my view they must do so.  To do otherwise
is to fail to appreciate the harm that these substances cause to the basic
health and life of the people in the community...

[45]

After accepting these remarks regarding the harm that methamphetamine can
cause in communities, the judge took the seriousness of the conspiracy offence
to be an aggravating factor.  He then considered the other aggravating and
mitigating factors and specified how some of the factors were to be given
effect in relation to the sentence to be imposed.  A summary of the factors,
together with the references to the paragraphs in the judges reasons, are set
out below:

·

The seriousness of the offences and Potts willingness to invest
in a second methamphetamine cook were aggravating factors (paras. 59, 69).

·

Potts pre-E-Pandora criminal record was not a serious
aggravating factor (para. 64).

·

Potts crimes were motivated by greed rather than by his
addiction, which Plante was feeding without demanding payment.  Potts was not
entitled to the sentencing benefit normally accorded to addicted traffickers (para. 83).

·

Potts early guilty plea was a mitigating factor entitling him to
one years credit (paras. 76, 107).

·

Potts progress towards rehabilitation while incarcerated was a
mitigating factor entitling him to a six-month reduction in sentence (paras. 77,
101).

·

Potts medical conditions cause him great discomfort and as a
result, time spent in custody is more onerous for him than for a healthy
prisoner, entitling him to a six-month reduction in sentence (paras. 80,
106).

·

The conduct of the police was a mitigating factor warranting a
one-year reduction in sentence.  Supplying Potts with drugs and alcohol had a
negative impact on him which diminished his moral culpability.  Similarly, preventing
the Surrey RCMP from arresting Potts earlier exposed him to the opportunity to
commit more crimes (paras. 98, 108).

[46]

As to Potts part in the conspiracy, and the
second
methamphetamine cook,
the judge said the
following under the heading
Investor/financial backer:

[68]      The Crown argued that Mr. Potts role as an
investor in the conspiracy to produce and traffic in methamphetamine is an
aggravating factor.  I agree that his role in Mr. Renauds production of
18 pounds of methamphetamine was analogous to that of an investor.  He supplied
a quantity of ephedrine and $14,000 to be used for the purchase of another
ingredient.  He then received the 18 pounds of methamphetamine as his share of Mr. Renauds
production.  While understanding Mr. Potts role in this conspiracy is necessary
in order to determine the appropriate sentence for him, it is not clear to me
that his role, as such, is an aggravating factor.

[69]      His willingness to invest $60,000 in another
methamphetamine cook is a different matter.  This is the fictitious cook of
November and December 2004.  No methamphetamine was manufactured or
distributed; the police agent simply lied to Mr. Potts; took his $60,000;
and returned $82,000 to him.  In the
United States of America v. Dynar
,
[1997] 2 S.C.R. 462 at para. 88, the Supreme Court of Canada had this to
say about criminal conspiracy:

[88]      A conspiracy must involve more than one person,
even though all the conspirators may not either be identified, or be capable of
being convicted.  Further, each of the conspirators must have a genuine
intention to participate in the agreement.  A person cannot be a conspirator if
he or she merely pretends to agree. ...

a conspiracy requires an actual intention in both parties at
the moment of exchanging the words of agreement to participate in the act
proposed; mere words purporting agreement without an assenting mind to the act
proposed are not sufficient.

Where one member of a so-called conspiracy is a police
informant who never intends to carry out the common design, there can be no
conspiracy involving that person ...

Because of the absence of a
co-conspirator, this transaction cannot be a conspiracy.  Nevertheless, I am
prepared to find that Mr. Potts willingness to invest in a second
methamphetamine cook is an aggravating factor.

[47]

As to Potts prospects for rehabilitation,
Justice Leask noted that he was sufficiently impressed with Potts
rehabilitation while incarcerated to reduce the starting point he would have
otherwise taken for the offence by six months, from a five-year sentence to 4 ½
years.  He made some specific findings from the sentencing material to support
his determination that Mr. Potts has made use of his time in prison to
rehabilitate himself.  In that regard, Justice Leask said at para. 77:

[77]      I am satisfied that Mr. Potts
has made use of his time in prison to rehabilitate himself.  I have read
the letter he wrote to the Court and I have read the letters of support his
counsel has filed.  I am particularly impressed by the letters from Jason
Roy and his father showing the positive influence Mr. Potts exerted on his
fellow inmates.  I am also impressed by Mr. Potts commitment to his
church and the support he has in that quarter.  I believe that Mr. Potts
has shown true remorse, an understanding of the effects of his crimes on the
community, and the vital importance of overcoming his substance abuse
problems.  I am impressed by the level of support he has from his family
and, more importantly, his recognition of his need to change his life to maintain
the love and support of his family.  The substantial progress he has made
while incarcerated deserves to be recognized in his sentence.

[48]

The judges findings concerning Potts prospects for rehabilitation were
based on information he had received at the sentencing hearing and the Crown did
not take issue with the introduction of that information.

[49]

The Crown takes issue with Justice Leasks conclusion that the conduct
of the police in relation to Potts continuing criminality during the
investigation merited a reduction in Potts sentence.  The judge summarized his
conclusion on the point as follows:

[98]      I agree with counsel for Mr. Potts
characterization that Mr. Potts was a pawn in this investigation.  Mr. Plante
supplied both Mr. Punko and Mr. Potts with drugs, free of charge, to
gain their favour and infiltrate the EEHA.  While this may be a legitimate
investigative technique used by the police to be able to get at targets higher
up in the Hells Angels organization, as recognized by Curtis J., there is no
doubt that this conduct had a negative impact on Mr. Potts, and therefore
should go to diminishing his moral culpability.
While the evidence with respect
to Mr. Potts drug abuse was insufficient to allow this Court to draw an
inference that it affected his intent to commit crime, the conduct of the
police, in supplying drugs and encouraging Mr. Potts addiction, is
clearly conduct that impacted the offender and it is a mitigating factor in
this case.  I also find as a fact that the E-Pandora investigators
persuading Surrey RCMP not to arrest Mr. Potts and Mr. Plantes
facilitation of further criminal activity by Mr. Potts has close parallels
with Lebel J.s characterization of the
Kirzner
case, i.e. the police
forces role in exposing the offender to the opportunity to commit the offences:
Nasogaluak
, at para. 54.

[99]      Drug addiction is a serious problem and
encouragement of such addictions can be said to be contrary to societys shared
values and concerns.  This is why Mr. Potts has been charged and is being
sentenced for his crimes, to reflect societys condemnation of his actions.  However,
it cuts both ways.  In sentencing Mr. Potts, this Court cannot ignore
the fact that the conduct of the police in this case was contrary to the same
shared values and concerns and this should be considered in sentencing.  While
the Court is not sitting in judgment of the police in determining the fitness
of a sentence a court may consider all that is known about the offender and
the offence, along with the realities and complexion of the community
...which are relevant to and bear upon the public perception of justice:
R.
v. Pigeon
(1992), 73 C.C.C. (3d) 337 at 343 (B.C.C.A.); and
Nasogaluak
,
at para. 52.

[Emphasis added.]

[50]

The sentencing judge concluded that the cocaine trafficking offences
should be served concurrently with the methamphetamine conspiracy offence because
the trafficking in cocaine was simply part of a process where the police
agent, Mr. Plante, maintained the illusion of being a competent mid-level
drug dealer and supplied Mr. Potts with money to keep him happy and enhance the
agents chances of advancing in the EEHA organization (para. 102).

[51]

As to the sentences to be imposed on Potts, Justice Leask provided the
following summary at the conclusion of his reasons:

[100]    Taking into account the seriousness of the offence, Mr. Potts
criminal record, his role in the crime and his rehabilitation, if Mr. Potts
had been found guilty after a trial, I would sentence him to 4 ½ years in
prison for the conspiracy to produce and traffic methamphetamine.

[101]    I arrive at this number primarily by comparing him
to other methamphetamine conspirators charged as a result of the E-Pandora
investigation.  I am satisfied that he is less culpable than Mr. Renaud,
Mr. Pearse and Mr. Punko.  I have considered all the other cases
supplied to me by both the Crown and defence counsel.  The closest
parallel outside of E-Pandora is
R. v. Renaud
, (28 June 2006), New
Westminster Registry No. X068413-2 (B.C.S.C.), affd 2006 BCCA 526, Mr. Justice
Mazckos sentence of Mr. Renaud for his first methamphetamine
offence.  At that time, Mr. Renaud was a 26-year-old first time offender
and Mazcko J. considered the appropriate sentence to be five years
imprisonment but reduced that to three years because he was impressed with Mr. Renauds
prospects for rehabilitation.  Mr. Potts is older and has a minor
pre-offence record.  Like Mazcko J., I would have sentenced him to five
years imprisonment but I was sufficiently impressed with his rehabilitation to
reduce that to 4 ½ years.

[102]    Turning to the two counts of trafficking in cocaine,
on the same hypothetical basis I would have sentenced him to one year in prison
for the charge of trafficking 4 ounces of cocaine and two years in prison
for trafficking 26 ounces of cocaine.  Those sentences would be concurrent
with each other and concurrent with the methamphetamine conspiracy count.
My reasoning is based on the fact that the trafficking in cocaine was simply
part of a process where the police agent, Mr. Plante, maintained the
illusion of being a competent mid-level drug dealer and supplied Mr. Potts
with money to keep him happy and enhance the agents chances of advancing in
the EEHA organization.

[105]    To sum up, without considering Mr. Potts
medical condition, his early guilty plea or the police conduct, I would
sentence Mr. Potts to 4 ½ years in prison for the methamphetamine conspiracy,
one year concurrent for trafficking 4 ounces of cocaine, two years concurrent
for trafficking 26 ounces of cocaine and 18 months concurrent for possession of
the proceeds of crime.

[106]    As discussed previously, I have found that Mr. Potts
medical condition makes imprisonment, both on remand and as a convicted
criminal, substantially more arduous for him than for a healthy prisoner.
On that basis, I now propose to reduce his global sentence from 4 ½ years in
prison to four years in prison.

[107]    As I indicated when discussing the early guilty
plea, I believe that Mr. Potts should receive one years credit for his
express willingness to plead to all charges except the criminal organization
count on his first appearance before me and his actual pleas as soon as I ruled
that the criminal organization count was precluded.  Pausing there, the
proper sentence for Mr. Potts would be three years imprisonment.

[108]    As in Mr. Punkos
case, I have found that the police conduct while investigating Mr. Potts
was legal and justifiable based on their plan to collect evidence against other
targets but not justifiable if their only target had been Mr. Potts.  In
this case there is the added factor that the Surrey RCMP would have arrested
him in April 2004 as a result of their methamphetamine investigation and his
criminal involvement would have concluded much earlier without either the
cocaine trafficking or possession of proceeds of crime charge.  I believe
that Mr. Potts should receive the same reduction in sentence that Mr. Punko
did for this mitigating factor.  The effect will be to reduce his sentence to
two years of imprisonment.

[52]

Justice Leask then reduced the sentences, all of
which were to run concurrently, by one year to take into account the time Potts
spent in pre-trial custody to arrive at an actual sentence of one year.

VI.      Punkos
sentence and the Crowns appeal of that sentence

[53]

Punko, one of the other methamphetamine conspirators, pleaded guilty before
Justice Leask to the same offences as Potts.  However, the circumstances
grounding the offences committed by the two offenders, and their personal
circumstances, differed.  Justice Leask found that Punko was more culpable than
Potts with respect to the methamphetamine conspiracy offence and that finding
is supported by the evidence that Punko was at the apex of the conspiracy.
Punko also had a more serious criminal record than Potts.

[54]

On the provincial indictment in which Punko stood trial with Violette,
Lising, and Potts, before Justice Romilly and a jury, Punko was convicted of
counselling to commit mischief (s. 464(
a
) of the
Code
) and
possession of a firearm, an unlicensed semi-automatic handgun (s. 95(1) of
the
Code
).  On 3 December 2007, while in custody awaiting trial on the
federal indictment, Punko, Lising and Potts, all full-patch members of the
EEHA, refused to testify in answer to a subpoena issued by the Crown federal at
the trial of three others.  Punko was sentenced for contempt to 15 months
incarceration:  see
R. v. Giles, Revell, and Rempel
(14
April 2008), Vancouver No. 23505 (S.C.).  The sentencing judge in that
case considered Punkos previous conviction in 2002 for attempting to obstruct
justice an aggravating factor.  The 2002 conviction arose out of Punkos having
threatened the prosecutor during a trial that led to the convictions of Lising
and another Hells Angels associate on cocaine conspiracy charges.  For his
contempt on that occasion, Punko was sentenced to eight months incarceration
and two years probation.

[55]

Following Punkos convictions by the jury in the provincial prosecution,
Justice Romilly sentenced Punko on 27 July 2009 to four years for counselling
to commit mischief and to 15 months consecutive for possession of a firearm, a
global sentence of five years and three months, which he reduced to one day
after giving Punko two-for-one credit for time spent in pre-trial custody:
 see
Violette
, at paras. 121-123.

[56]

Justice Leasks reasons for sentence in the case of Punko, released at
the same time as his sentencing reasons in this case, are indexed at 2010 BCSC
320.  Justice Leask imposed an effective global sentence of four years on
Punko.  In arriving at that sentence, he expressed the view that a fit
disposition would be concurrent sentences of six years for the conspiracy to
produce and traffic in methamphetamine, five years for the trafficking in
cocaine offences, and three years for the possession of proceeds of crime.
However, he considered a one-year reduction should be made for Punkos guilty
pleas and a further year for the adverse effects on Punko of what the judge
characterized as police misconduct in relation to Punko during the course of
their investigation.  After giving a credit of 34 months for pre-trial custody,
Justice Leask sentenced Punko to 14 months imprisonment, to be served
concurrently on all counts.

[57]

The Crown sought leave to appeal the sentences imposed on Punko,
asserting that the sentencing judge had erred in principle by failing to impose
a sentence that was proportionate to the seriousness of the crimes and the offenders
degree of responsibility in relation to their commission, by failing to have
due regard to the objectives of denunciation and deterrence, and by over-emphasizing
rehabilitation.

[58]

The same grounds were initially advanced on the Crowns appeal from
Potts sentence.  In light of s. 718.2(c) of the
Code
, which
provides that a sentence should be similar to sentences imposed on similar
offenders for similar offences committed in similar circumstances, it would
have been preferable for the two appeals to be heard together, but they were
not.

[59]

The Crowns appeal of Punkos sentence on the drug offences was allowed
on 5 August 2010 in reasons indexed at
R. v. Punko,
2010 BCCA 365 (leave
to appeal to the S.C.C. filed on 1 October 2010: [2010] S.C.C.A. No. 361).
In a summary contained in paras. 95-97 of the majority reasons, Justice Tysoe
(Justice D. Smith concurring) said:

[95]      Mr. Justice Smith has concluded that the
sentence imposed by the sentencing judge for the methamphetamine offence was
not fit, and I agree with him in that regard.  In addition, as I stated above,
it is my view that the judges piecemeal approach to the mitigating factors of
the guilty plea and the police conduct, together with his treatment of Mr. Plantes
involvement in the offences as being conduct falling within the range of
conduct described in
Nasogaluak
, led him to give undue weight to these
mitigating factors.  In my opinion, when all of the sentencing principles
and the aggravating and mitigating factors identified in the reasons of the
sentencing judge and Mr. Justice Smith (including the police misconduct in
supplying Percocet to Mr. Punko) are taken into account, fit sentences for
the two offences, prior to consideration of the totality principle and a credit
in respect of Mr. Punkos pre-sentence custody, are six years
imprisonment for the methamphetamine offence and four and one-half years
imprisonment for the cocaine offence.

[96]      The sentences, served consecutively, would produce
an overall sentence of ten and one-half years imprisonment.  This combined
sentence would, in my view, be unduly long, and the totality principle,
expressed in s. 718.2(c) of the
Code
, comes into play.  It is my opinion
that a combined effective sentence of 8 years imprisonment would appropriately
reflect Mr. Punkos culpability in respect of the two drug offences.  Mr. Punko
is entitled to a credit of 34 months in respect of his pre-sentence custody,
which results in an actual sentence of five years and two months.

...

[97]      For the above reasons,
I would allow the appeal, set aside the sentence of 14 months imprisonment for
the two drug offences and substitute a combined sentence of five years and two
months imprisonment.  I would allocate 38 months of the combined sentence to
the methamphetamine offence and the remaining 24 months to the cocaine offence.

[60]

As may be seen from the sentencing reasons of
Justice Leask and the majority judgment of Justice Tysoe in the Court of
Appeal, each considered that, absent other factors, a sentence of
six
years imprisonment for the methamphetamine conspiracy offence was appropriate.
With respect to the one count of trafficking in cocaine to
which Punko had pleaded guilty, Justice Leask considered that, absent other
factors, five years was the appropriate sentence whereas Justice Tysoe
considered that 4 ½ years would be.

[61]

The difference in the length of the sentence the
Court of Appeal substituted results from the majoritys conclusion that the
sentences for the
methamphetamine conspiracy offence and the cocaine
trafficking offence ought to have been ordered to be served consecutively
rather than concurrently.  Justice Leask concluded that the sentences ought to
be served concurrently for the following reason:

[80]       I would make his
sentence concurrent because I see this offence as part of a continuing process
by which the police agent, Mr. Plante, assisted Mr. Punko to make easy
money from drug dealing.

[62]

Justice Tysoe concluded, at paras. 87-89 of his reasons, that the
sentencing judge was in error in ordering the sentences to be served concurrently.
He also concluded at paras. 82-84 that the judge erred in treating the involvement
in the offences of the police agent, Plante, as conduct justifying a reduced
sentence pursuant to the principles established in
Nasogaluak
.

[63]

After this Courts reasons had been issued in
Punko
, the
Crown filed a Supplementary Statement in the Potts sentence appeal to add additional
argument, reflecting the points on which the majority had allowed the appeal.

VII.     Points
on appeal

[64]

The Crown alleges that, as a result of errors in principle made by the
sentencing judge, the total sentence imposed on Potts for the drug offences is
demonstrably unfit.  In making that argument, the Crown asserts that the
sentencing judge made substantially the same errors in principle in the present
case as he made in
Punko
, resulting in an unfit sentence.  The Crowns
main points are considered below.

(a)      State
misconduct

[65]

The first question is whether the sentencing judge was in error in his
approach to the issue of state misconduct in relation to Potts and the offences
to which he had pleaded guilty.  The judge reduced Potts sentence by one year
to reflect the effect of police conduct on him while the police were pursuing
their investigation.  One aspect of that police conduct was the supply of
Percocet and alcohol to Potts.  The second was the E-Pandora investigators
stopping the probable arrest of Potts in April 2004 by the Surrey RCMP so that
the investigation of the EEHA could continue without disturbance.  The third aspect
was couched in the judges language as follows: the police conduct while investigating
Mr. Potts was legal and justifiable based on their plan to collect
evidence against other targets but not justifiable if their only target had
been Mr. Potts (para. 108).

[66]

In
Punko
, Justice Tysoe drew the following distinction about the
applicability of
Nasogaluak
to aspects of police conduct in the E-Pandora
investigation of Punko, at paras. 80-82:

[80]      The sentencing judge considered two aspects of the
police conduct in this case to be mitigating factors under
Nasogaluak
.  The
first was the supply of Percocet by Mr. Plante to Mr. Punko.  The
second was the involvement of Mr. Plante in the two offences.

[81]      I agree with Mr. Justice Smith that, in view
of the sentencing judges findings regarding the supply of Percocet, it was
open to the judge to consider that the police conduct in this case fell within
the range of misconduct accepted by the Supreme Court of Canada in
Nasogaluak
to constitute a mitigating circumstance for sentencing purposes.  Although Mr. Plante
was not doing anything illegal in view of the exemptions obtained under the
Controlled
Drugs and Substances Act (Police Enforcement) Regulations
, SOR/97-234,
the
judge found that Mr. Punko was attempting to deal with his Percocet
addiction and that, to the knowledge of the police, the supply of the Percocet
to Mr. Punko was causing him harm because it was affecting his health.  In
my view, a right-thinking Canadian would consider the supply of Percocet to Mr. Punko
in these circumstances to be contrary to the shared values of our society.

[82]      On the other hand, it is my opinion that
Mr. Plantes
involvement in the offences does not amount to police misconduct
.  The
police were attempting to infiltrate an organization they considered to be of a
criminal nature.  Their attempt would have been futile unless their agent
participated in the criminal activities engaged in by other members of the
organization.  In my view, a right-thinking Canadian would accept that such
tactics are necessary to investigate organizations believed to be criminal and
would not consider these tactics be contrary to the rule of law or shared
values of our society.

[Emphasis added.]

[67]

In
Nasogaluak
, LeBel J. explained how police misconduct directed
to an offender and associated with an offence may be taken into account in
sentencing even though the misconduct does not constitute a
Charter
breach.  In
Punko
, the offender had been taking active steps to rid
himself of his addiction to Percocet and the ready supply of the drug being
provided by Plante had an adverse effect on those efforts.  I agree with Justices
Smith and Tysoe that, in those circumstances, it was open to the sentencing judge
to hold that the police conduct in supplying Punko with Percocet would fall
within the range of misconduct accepted in
Nasogaluak
as constituting a
mitigating circumstance for sentencing purposes.

[68]

It may be open to question, however, whether Plantes having
supplied Potts with Percocet would lead to the same conclusion as in
Punko
.
 In Potts case, t
he
sentencing judge rejected the
defence submission that Potts ought to
be treated as an
addict-trafficker because of his heavy consumption of Percocet and held instead,
that the evidence of Potts drug use was insufficient to draw the inference
that it affected his intent to commit the crimes.  It therefore seems
questionable whether Potts moral culpability in committing the offences to
which he pleaded guilty could be found to be diminished or reduced by his use
of Percocet.

[69]

Moreover, unlike Punko,
there was no
evidence that Potts was attempting to free himself of his Percocet addiction.
As to the adverse effect on Potts,
the sentencing judge
appears to have relied on an assumption, related to the use of addictive
substances generally, that harm must have been occasioned to Potts through
Plantes making available a ready supply of Percocet.  As we had very limited
argument on this point, I will simply observe that if a sentence reduction is
sought on the basis of police misconduct that inflicts unreasonable or
unnecessary harm on an offender, there ought to be a foundation in the evidence,
not simply assumptions or speculation, put forward to substantiate that harm resulted
from the misconduct.

[70]

The judge held that by preventing the Surrey RCMP from arresting Potts in
April 2004, the E-Pandora investigators provided Potts with the opportunity to
commit more crimes and that interference ought to be treated as a mitigating
factor in sentencing.  In that regard, the trial judge relied on
R. v.
Kirzner
(1976), 14 O.R. (2d) 665 (C.A.), in which the court reduced the
offenders sentence for drug trafficking and possession offences on the ground that
the police had used the offender as an informer after he had attempted to cure
himself of his addiction.  It does not appear to me that
Kirzner
can be
applied by analogy.  In April 2004, Potts was actively pursuing full-patch
membership in the EEHA, an endeavour in which he later, with some pride,
succeeded.  In short, there was no indication that Potts was attempting to turn
away from crime at the time the Surrey RCMP wanted to search his residence and
arrest him.

[71]

As to the third point concerning police conduct, I return to Justice
Tysoes reasons in
Punko
, quoted above, and agree with his conclusion,
expressed in para. 82, that Plantes involvement in the offences does not
amount to police misconduct.

[72]

I am also of the view that the sentencing judge was in error in viewing Potts
responsibility for the drug offences as being less serious because of Plantes involvement
in various aspects of the criminal activity grounding the offences.  As noted
earlier, the trial judge found that Potts was not a sophisticated criminal and
was of the view that, within the EEHA, Potts and Punko were, as Plante
described them, low level mopes.  Regardless of Potts lack of sophistication
as a criminal or how his status might be viewed as an EEHA member, it is clear
from his activities that he was well removed from the level of a street trafficker
or a low-level functionary.  The judge found that Potts activities were not
driven by addiction; rather, his criminal misconduct was driven by greed.  The methamphetamine
offence to which Potts pleaded guilty involved the production and distribution
of a large quantity of a dangerous and highly addictive drug.  Potts was an
investor in the drug business and was able to earn substantial amounts of money
through the distribution of methamphetamine, without directly being involving in
the physical production of the drug or its physical distribution.  Thus Potts
was able to limit his risk and exposure to the investment of funds, negotiating
his cut, and receiving the profits.

[73]

The sentencing judge made reference to Potts cocaine trafficking
offences as being stage-managed by the police.  There was evidence that Plante
had prompted Potts sale of cocaine to him on the two occasions that grounded
the charges.  Entrapment was not advanced as a defence.  It is clear from the
wiretap evidence that Potts had his own considerable supply of cocaine available
for trafficking.  Neither the police nor Plante had anything to do with Potts
having that supply.  Plante thought Potts had difficulty selling his cocaine
because he was mis-pricing it, but the salient facts in determining Potts
culpability for the two cocaine trafficking offences is that Potts had a
sufficient supply of cocaine that he was able to, and in fact did, sell on a
wholesale basis.

[74]

In my view, the fact that the police, through Plante, encouraged, and to
some extent enabled, Potts to commit the drug offences to which he pleaded
guilty does not diminish Potts overall culpability.  While Plante introduced Potts
to a cook, it was Potts who was seeking one.  Potts also supplied ephedrine, an
essential ingredient for the production of methamphetamine.  Potts intention
was to have all 18 pounds of methamphetamine distributed in the illicit drug
market.  Potts sold his supply of cocaine to help finance a second
methamphetamine cook.  The fact that the police did their job well and
prevented a large percentage of both drugs from reaching their intended
customers does not diminish the gravity of Potts offences or shield him from
responsibility in committing them.  In other words, the fact that much of the
actual harm in the distribution of the drug was avoided by the police does not
obviate Potts responsibility for the deliberate actions he took when
committing the drug offences.

(b)      Piecemeal approach in taking into account
aggravating and mitigating factors in sentencing

[75]

In
Punko
, both the majority and the minority were in agreement
that the sentencing judges balancing of the relevant factors was unreasonable
although they reached that conclusion for different reasons.  The majority held
that the judges piecemeal approach led him to give undue weight to the
mitigating factors (para. 79) whereas Justice K. Smith held that the judge
failed to give reasonably sufficient weight to the objectives of denunciation
and deterrence by overlooking the substantial harm caused by the very large
amount of methamphetamine that was distributed into the illegal market by Punko
and his co-conspirators (paras. 55, 62).

[76]

The majority referred to the decision in
R. v. Evanson
, 2009 BCCA
425, in which Justice Bennett criticized the piecemeal approach the sentencing
judge had taken at paras. 18-19:

[18]      I wish to add one final comment, and that is in
relation to how the sentencing judge arrived at his sentence.  He concluded
that an appropriate sentence was one of four years, and then ascribed a period
of six months to be deducted from that sentence to reflect the mitigating
guilty plea. In my respectful view, this is not an appropriate way to arrive at
a fit sentence. Sentencing is not an inflexible predetermined procedure (
L.M.
at para 17), and ascribing specific terms of credit for the various sentencing
factors would result in a very fixed procedure.  Mr. Justice LeBel in
L.M.
set out the process of arriving at a fit sentence as follows at para. 17:

To arrive at an appropriate sentence in light of the
complexity of the factors related to the nature of the offence and the personal
characteristics of the offender, the judge must weigh the normative procedures
set out by Parliament in the
Criminal Code
:

-  the objectives of denunciation, deterrence, separation of
offenders from society, rehabilitation of offenders, and acknowledgment of and
reparations for the harm they have done (s. 718
Cr. C.
) (see Appendix);

-  the fundamental principle that a sentence must be
proportionate to the gravity of the offence and the degree of responsibility of
the offender (s. 718.1
Cr. C.
); and

-  the principles that a sentence should be increased or
reduced to account for aggravating or mitigating circumstances, that a sentence
should be similar to other sentences imposed in similar circumstances, that the
least restrictive sanctions should be identified and that available sanctions
other than imprisonment should be considered (s. 718.2
Cr. C.
).

[19]      Thus, a sentencing
judge needs to consider all the factors in arriving at a fit sentence as
opposed to taking a piecemeal approach. The exception is applying the credit
for pre-trial custody after a fit sentence has been determined.

[77]

In
Evanson
, this Court did not describe the sentencing judges
deduction for the guilty plea as an error in principle and upheld the sentence
(para. 20) but it is clear from Justice Bennetts reasons that making fixed,
stepped reductions in the manner done here is not in accord with the reasoning process
in sentencing described in the Supreme Court of Canadas jurisprudence to which
she referred.

[78]

In
Punko
, Justice Tysoe held that the sentencing judge erred in
his general approach by first determining the appropriate sentence for the two
drug offences and, second, by making deductions in the sentence as a result of
mitigating factors which led him to give undue weight to those factors (paras. 76,
79).

[79]

In this case, Justice Leask first determined that an appropriate
sentence for the methamphetamine conspiracy was five years.  Second, he reduced
that sentence by six months based on Potts rehabilitation while in custody.
Third, he determined that an appropriate sentence for the cocaine offences
would be one and two years respectively, but held that those sentences should
be served concurrently.  Fourth, he concluded that the sentence for the cocaine
offences should be served concurrently with the methamphetamine sentence.
Fifth, he determined that the possession of proceeds of crime offence warranted
an 18-month sentence also to be served concurrently with the drug offences.
Sixth, he reduced the global sentence by six months to account for Potts
health condition.  Seventh, he reduced the global sentence by one year on the
basis of Potts guilty plea.  Finally, he reduced the global sentence by an
additional year on account of the police conduct (paras. 100-108).

[80]

The piecemeal approach taken by the sentencing judge, which was
disapproved in
Punko
,

is indistinguishable from the approach that
was taken in Potts case.

[81]

The specific reductions made in Potts case for rehabilitation, health
problems, guilty plea, and police conduct effectively reduced the sentence from
five to two years.  The result of that approach was to give the mitigating
factors more weight than the misconduct underpinning the offences.  In this
case, as in
Punko
, the judges approach led to undue weight being given to
mitigating factors and resulted in an unfit sentence.

[82]

The correct approach to the determination of a fit sentence, as
explained in
Nasogaluak
at para. 43, requires the sentencing judge
to weight the objectives of sentencing in a manner that best reflects the
nature of the offence and the circumstances of the offender.  Mitigating and
aggravating factors may push the sentence up or down the scale of appropriate
sentences for similar offences.  The essential point is that the aggravating or
mitigating factors should be considered as part of the determination of an appropriate
sentence rather than independently.

[83]

As in the
Punko
appeal, the Crown argues that the sentencing
judge gave insufficient weight to denunciation and deterrence, over-emphasized
rehabilitation, and failed to consider the overarching principle of proportionality.
In relation to Potts, the Crown argues that the sentences imposed were clearly
unfit.  For reasons I have already expressed, I agree with the Crowns
submission in this regard.

(c)      Reducing
the sentence on account of Potts health

[84]

The sentencing judge considered that Potts particular health problems
would make serving his sentence more onerous than for a healthy prisoner and,
as a result, took the effect of Potts health into account by reducing the
sentence by six months.

[85]

It is relatively rare for the health of an offender to be taken into
account in sentencing but there are cases in which an offenders health may be relevant.
Although an offenders health status may be relevant at sentencing, in general
these matters are best considered as part of the overall circumstances of the
offender, rather than as a basis for deducting time from an otherwise appropriate
sentence.  There are cases in which an otherwise fit sentence may be reduced on
compassionate grounds, but such reduction must be based on current, clear and
convincing evidence:  see
R. v. Shah
(1994), 94 C.C.C. (3d) 45
(B.C.C.A.);
R. v. Shahnawaz
(2000), 51 O.R. (3d) 29, 149
C.C.C. (3d) 97 (C.A.) at paras. 30-34;
R. v. Alcius
, 2007
QCCA 213 at para. 53.

[86]

Without challenging the trial judges finding that Potts various
ailments make serving time in custody more arduous than would be the case for
a healthy prisoner, the Crown submits it was inappropriate to reduce Potts
sentence by six months on account of his medical conditions.  Drug offenders
convicted of much less serious offences, with less aggravated backgrounds and
more significant medical conditions, have been refused credit or reduction in
an otherwise fit sentence, considering the availability of medical treatment
within the prison system, and the availability of early parole based on medical
necessity:  see for example
R. v. Hill
, 2007 BCCA 309, 221 C.C.C. (3d)
472 at para. 42.

[87]

I agree with the Crowns submission on this point.

(d)      Imposition
of concurrent sentences

[88]

The test for imposing concurrent sentences is whether the acts
constituting the offence were part of a linked series of acts within a single
endeavour:
R. v. Li
, 2009 BCCA 85 at para. 42.  It is important
to repeat, however, that the decision of whether to impose consecutive or
concurrent sentences is a matter of discretion for the sentencing judge:
McDonnell
,
at para. 46:

[46]      ... the decision to
order concurrent or consecutive sentences should be treated with the same
deference owed by appellate courts to sentencing judges concerning the length
of sentences ordered. The rationale for deference with respect to the length of
sentence, clearly stated in both
Shropshire
and
M. (C.A.),
applies equally to the decision to order concurrent or consecutive sentences.
In both setting duration and the type of sentence, the sentencing judge
exercises his or her discretion based on his or her first-hand knowledge of the
case; it is not for an appellate court to intervene absent an error in
principle, unless the sentencing judge ignored factors or imposed a sentence
which, considered in its entirety, is demonstrably unfit. The Court of Appeal
in the present case failed to raise a legitimate reason to alter the order of
concurrent sentences made by the sentencing judge; the court simply disagreed
with the result of the sentencing judges exercise of discretion, which is
insufficient to interfere.

[89]

Courts have considered the following non-exhaustive list of factors in
determining whether to impose concurrent or consecutive sentences:  the nature
and quality of the criminal acts; the temporal and special dimensions of the
offences; the nature of the harm caused to the community or to victims; the
manner in which the criminal acts were perpetrated; and the offenders role in
the crimes.

[90]

The Crown referred us to
R. v. Grant
, 2009 MBCA 9, 240 C.C.C.
(3d) 462, in which the offender, a high-end drug trafficker, sold two kilograms
of methamphetamine and one kilogram of cocaine to an undercover police officer
in three separate transactions over a five-week period.  The sentencing judge
imposed concurrent sentences for the three drug offences but imposed a
consecutive sentence for a related extortion charge.  The Court of Appeal
upheld the total sentence of 15 years.

[91]

R. v. Davis
(2006), 218 O.A.C. 267, supports the proposition that
an appellate court will not disturb a consecutive sentence that is overall a
fit one on the basis that, in the circumstances, the trial judge should have
imposed concurrent sentences (paras. 26-27).  It seems to me that the
converse of this proposition must also hold true.

[92]

In
Punko
, the majority held that Leask J. erred by considering Mr. Plantes
role in the offences as a reason for imposing concurrent sentences (para. 87)
rather than considering the nature and quality of the specific acts which, in
that case, constituted separate and distinct offences which should have been
made consecutive (paras. 88-89).

[93]

In the case of Potts, the sentencing judge took the same approach as he
had done in
Punko
.  He did not undertake an analysis of the two
offences, but instead focused on the continued involvement of the police
operative.  He did not consider the fact that the two schemes involved
different drugs and that Potts role in each scheme was different.  In my
respectful view, the judges focus was misplaced, although he might have
arrived at the same conclusion by a different path.

[94]

Had the sentencing judge looked at the nature and quality of the
specific acts constituting the offences, it appears to me that he might well have
arrived at a finding that concurrent sentences were appropriate.  In the
methamphetamine conspiracy, Potts acted as an investor and provided an
essential ingredient (ephedrine) for the production of methamphetamine.  He
anticipated profits from its distribution.  On the cocaine trafficking offences,
Potts participated in the cycle of wholesale drug distribution by selling 30
ounces of cocaine with a view to using the profits from the sale of one drug to
invest in the other.  The players in the conspiracy remained largely the same.

VIII.    Summary
and conclusion

[95]

In my opinion, one of the main errors in judgment in this case was the
failure of the sentencing judge to apply the fundamental principle in
sentencing found in s. 718.1 of the
Code
:  a sentence must be
proportionate to the gravity of the offence and the degree of responsibility of
the offender.

[96]

Potts could not be described as being at the high end of the drug trafficking
hierarchy but the nature of his criminality is nonetheless very serious.  Recognition
of the serious harm that results from a methamphetamine conspiracy such as this
one seems to have been lost by the judges adoption of the dismissive
description of Potts as a low end mope.  The description does not fit the
magnitude of Potts criminal misconduct.  As a result of his financial and
other contributions to the first cook, Potts cut was eight pounds of methamphetamine,
for which he was to receive the benefits of its being trafficked in the market,
all without his direct involvement.  Putting up $60,000 for a second cook showed
clearly his intention to engage in production and trafficking as an on-going
business.  The police were able to divert much of the drug away from the
market through various ruses, but the fact that the police did so does not make
the crime itself less serious or reduce the responsibility of the offender in
committing it.

[97]

A conspiracy such as this one is a despicable endeavour which causes
very substantial harm within society, the nature of which is well described in
the reasons of Justice Ryan in
Francis
, at para. 13, set out in
paragraph 44 above.

[98]

The second error concerns the judges treatment of what he regarded as
mitigating factors.  The sentencing judge had to take into account the
sentencing goals and other sentencing considerations set out in ss. 718
and 718.2 of the
Code
, but in this case, his recognition of the mitigating
factors in stepped, successive stages resulted in those factors being given such
weight that they overshadowed the important goals of denunciation and
deterrence of these very serious crimes.

[99]

In combination, the two errors to which I have referred resulted in an
unfit sentence.

[100]

Section
718.2(b) provides that a sentence should be similar to sentences imposed on
similar offenders for similar offences committed in similar circumstances.  In this
case, the sentences imposed on Potts should therefore be similar to those
imposed on Punko.  The sentencing judge found that Potts was less culpable than
Punko and that finding is consistent with the evidence of Punko being at the
apex of the conspiracy.  The amount of methamphetamine the conspiracy produced
was approximately 50 kilograms, although Punkos share of it would have been
much less.  While they were part of the same conspiracy, the difference in
culpability of the two offenders must be taken into account in sentencing on
the conspiracy count.  As well, Punkos criminal record is more serious than Potts.
 Before the E-Pandora investigation, Potts had not received any custodial sentences.
Based on the findings of the sentencing judge, it also appears that Potts may
have made some progress towards rehabilitation.

[101]

In
Punko
,
the majority were of the view that, prior to taking into account the totality
principle and credit for pre-sentence custody, a sentence of six years for the
methamphetamine offence and a sentence of 4 ½ years for the cocaine trafficking
offence, would be fit.  If served consecutively, those sentences would result
in a prison sentence of 10 ½ years.  Applying the totality principle in
s. 718.2(c), Tysoe J.A. considered that such a global sentence would be
unduly long and reduced the sentence to eight years.  He then reduced the
sentence by 34 months to take into account Punkos pre-sentence custody,
which resulted in an actual sentence of five years and two months.

[102]

In this
case, I am of the view that, after taking into account all the applicable goals
and principles in sentencing set out in the
Code
, the following would be
fit sentences:  five years for the methamphetamine conspiracy offence; three-year
sentences, concurrent with each other, for the cocaine trafficking offences; and
three years concurrent for the proceeds of crime offence.

[103]

If all
sentences were ordered to be served concurrently, the global sentence would be
five years.  If the sentences for the drug offences were ordered to be served
consecutively, the result would be a global sentence of eight years.

[104]

If the
sentences are ordered to be served consecutively, the totality principle must
be applied and, in Potts case, it is more complex than in
Punko
.  As a
result of the Crown proceeding on two separate indictments, Potts was sentenced
for offences committed during the E-Pandora investigation at different times.
On the provincial indictment, the effective global sentence he received for the
weapons offences was seven years.  If a global sentence of eight years for the
drug offences and a seven-year sentence for the weapons offences were added
together, the result would be an overall sentence of fifteen years.  While
s. 718.2(c) does not speak directly to the case where sentences are
imposed at different times, it seems to me that an injustice would be
occasioned in this case if effect were not given to the principle that
sentences, if combined, should not be unduly long or harsh.  While the weapons
offences and the drug crimes committed by Potts are very serious, I am of the
view that a sentence of 15 years for a person who had not previously been
incarcerated, as is the case with Potts, would be unduly harsh and excessive.

[105]

Potts
actual sentence on the weapons offences was one day but that resulted from
Potts having been given two-for-one credit for the time he had spent in pre-trial
custody after subtracting the six-month sentence he had received for contempt
of court in 2008.  Punko was also convicted of offences on the indictment
preferred by the Crown provincial.  The offences were counselling to commit
mischief and possession of a firearm.  On the first offence Punko was sentenced
to four years and, on the second, to 15 months consecutive, resulting in a
global sentence of five years and three months.  That sentence was reduced, after
subtracting the 15-month sentence Punko had received for contempt in 2008, to
one day after giving Punko two-for-one credit for time spent in pre-trial
custody.

[106]

For the sake
of completeness, I note that both Potts and Punko were arrested on the same
day.  In
Punko
, there was no dispute that he was entitled to have
deducted from his effective sentence, a 36 month credit for time spent in
pre-trial custody.  In Potts, there is no dispute that he is entitled to a
one-year deduction for pre-trial custody.

[107]

Finally,
with respect to the totality principle and consecutive sentences generally, I
note the helpful reasons given by Justice Frankel in
R. v. Abrosimo
,
2007 BCCA 406, 225 C.C.C. (3d) 253 at paras. 28 and 31.

[108]

I am of
the view, expressed earlier, that it was open to the sentencing judge,
albeit
for reasons other than those he expressed, to impose concurrent sentences for
the drug offences.

[109]

In the
circumstances, I have concluded that it would be in accord with s. 718.2(c)
and not offend s. 718.2(b) of the
Code
if Potts sentences were
ordered to be served concurrently rather than consecutively.

[110]

In the
result, I would grant leave and allow the appeal by setting aside the sentences
imposed by Justice Leask and substitute the following sentences:  on the methamphetamine
conspiracy offence, five years; on the cocaine trafficking counts, three years
each; and on the proceeds of crime offence, three years, with all sentences to
be served concurrently.  From that effective global sentence, I would deduct
one year, being credit for time spent in pre-trial custody, resulting in an
actual sentence of four years.

The Honourable Madam
Justice Rowles

I agree:

The Honourable Mr. Justice
Lowry

I agree:

The Honourable Mr. Justice
Hinkson


COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

D. Bacon Holdings Ltd. v. Naramata Vines Inc.,

2011 BCCA 22

Date: 20110118

Docket: CA038315

Between:

D. Bacon Holdings
Ltd., Dr. Barb Astle, Dr. Bill Astle,
Don Bacon, Dr. Danaze Chambers, Mark Smith,
Douglas J. Vincelli Professional Corporation,
Alpenstock Inc. and Sophia Ventures Ltd.

Respondents

(Plaintiffs)

And

Naramata Vines
Inc., Naramata Bench Vineyards Inc.

with an assumed
name of Naramata Vines Inc.,

0792625 B.C. Ltd.,
Tremblant Developments Inc. and James Angrove

Appellants

(Defendants)

Before:

The Honourable Madam Justice Saunders

The Honourable Mr. Justice Lowry

The Honourable Mr. Justice Frankel

On judicial review:
Court of Appeal for British Columbia, November 5, 2010
(
D. Bacon Holdings Ltd. v. Naramata Vines Inc.
, Docket
No. CA038315)

Oral Reasons for Judgment

Counsel for the Appellant:

J. Angrove

Counsel for the Respondents:

M.B. Morgan and L.E.
  Cook

Place and Date of Hearing:

Vancouver, British
  Columbia

January 18, 2011

Place and Date of Judgment:

Vancouver, British
  Columbia

January 18, 2011

[1]

LOWRY J.A.
: The appellants apply to vary the order of Mr. Justice
Low made 5 November 2010 denying their application to extend the time to post
security for the respondents costs and allowing the respondents application
to dismiss the appeal as abandoned. To succeed, the appellants must establish
the order, which was made in the exercise of a discretion, was based on an
error of law, and error of principle, or a misapprehension of the facts:
Haldorson
v. Coquitlam (City)
, 2000 BCCA 672 at para. 7.

[2]

The respondents allege that the appellants misappropriated funds they
invested in the purchase and development of a vineyard. The action was
commenced in February 2009. Judgment in default of a defence was entered in
April 2009. A notice of motion to set it aside was filed in May but was not
heard. Rather, an assessment of damages proceeded to trial in June 2010. The
appellants chose not to appear. The respondents were granted judgment for
$574,085 and special costs.

[3]

The appellants promptly filed a notice of appeal and the respondents
applied for security for costs both of the trial and the appeal. At the end of
September, Mr. Justice Chiasson ordered the respondents to post security
of $32,000 by 27 October 2010 and stayed the proceedings pending
compliance.

[4]

Mr. Justice Low found there was no reason to extend the time for
compliance with Mr. Justice Chiassons order. The appellants maintained they
were unable to post the required security and the prospects of their being able
to do so in the three or four months they sought were seen to be vague and not
supported by any business documents. Mr. Justice Low discounted the suggestion
the respondents had wrongly impaired the appellants ability to raise the funds
necessary for the security by an Internet publication warning would-be
investors to steer clear of the personal appellant in particular. Finally, he
recognized the respondents were prejudiced by the delay because it prevents
them from registering their judgment in Alberta where they consider they may
have some prospect of undertaking execution proceedings.

[5]

The appellants challenge all aspects of Mr. Justice Lows reasoning but,
in my view, they do not establish any legal error or any misapprehension of the
facts. They simply urge us to take a different view of the evidence. The fact
is they have adduced no evidence of anything more than speculation as to when
they would be able to post the required security and, most importantly, no
evidence of any material change in their circumstances during the 30 days they
were given to post the security. They have established no basis on which we
could interfere with the order they seek to have us vary.

[6]

I would dismiss the application.

[7]

SAUNDERS J.A.
: I agree.

[8]

FRANKEL J.A.
: I agree.

[9]

SAUNDERS J.A.
: The application is dismissed.

The
Honourable Mr. Justice Lowry