Supreme Court

R. v. Cleary, 2002 NWTSC 30
Date: 20020412
Docket: S-1-CR2001000083

IN THE SUPREME COURT OF THE NORTHWEST TERRITORIES

IN THE MATTER OF:


HER MAJESTY THE QUEEN


- and -


LENA CLEARY


Transcript of the Reasons for Sentence given by The Honourable Justice V.A. Schuler, sitting in Yellowknife, in the Northwest Territories, on the 10th day of April, A.D. 2002


APPEARANCES:

Mr. A. Slatkoff:   Counsel for the Crown

Mr. H. Latimer:   Counsel for the Defendant


(Charges under s. 334(a), 380(1) (a) and 122 of the Criminal Code of Canada)


THE COURT:   Lena Cleary has been found guilty by a jury of one count of theft of over $5,000 and one count of fraud over $5,000. It is now my difficult duty to impose an appropriate sentence on her for these offences.

On Count 1, the theft, the evidence was that $20,428 went missing from cash received for rent and other payments by the local housing office administering public housing for Dettah and N'dilo. Ms. Cleary was the manager of that office, variously referred to as Somba K'e Housing Authority, the Done Naawo Society, and the Yellowknives Dene Band Housing Division. Money that was recorded on receipts was not posted in the receipts journal or deposited into the bank account. The jury was clearly satisfied beyond a reasonable doubt that Ms. Cleary, who had control of the journal, took the money. She repaid $220 of the amount taken. So in terms of considering restitution on that count, the amount would be $20,208.

On Count 2, the fraud charge, the jury had a number of transactions and allegations to deal with. Because the jury verdict of guilty on that count does not, and cannot, specify the acts that make up the fraud and because counsel take different positions on the extent of the fraud, I must determine what the evidence proves, bearing in mind the criminal standard of proof, which is proof beyond a reasonable doubt.

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Dealing first with the building supplies. In my view, the evidence proves beyond a reasonable doubt that building supplies to a total value of $10,400 were billed to the local housing office between August 1993 and December 1994 but were used in the renovation to Ms. Cleary's house. Ms. Cleary admitted in her evidence that she billed supplies for her own use to the housing office and that she knew it was against the rules. The only difference was that she said she had billed only about $2,000 worth. However, in my view, she was not credible on this issue. She was evasive and uncertain about the amount she had billed and apparently considered as a loan to her from the housing office. I am satisfied that she did defraud the housing office of $10,400 in relation to the building supplies, but that she repaid the sum of $200 through a payroll deduction. So in terms of restitution, that would leave the sum of $10,200.

Next, dealing with the vehicle allowance. The evidence was clear that Ms. Cleary overpaid herself the vehicle allowance in the amount of $2,150. In one instance, by taking three of the allowable $150 per month allowances in one month. This occurred over a period of two years, and then Ms. Cleary repaid some of the money by taking less than she was entitled to in a third year, thus repaying $1,300. She therefore defrauded the housing office of $2,150, but only $850

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Will be considered for purposes of restitution.

Then the gas. Despite receiving the monthly vehicle allowance which was to compensate her for the use of her vehicle and cover her gas expenses, Ms. Cleary billed to the housing office gas purchases for gas used by her and her husband to a total of $5,013, which she was not entitled to under the terms of the vehicle allowance. She also billed gas for other vehicles to a total of $7,715. However, the Crown seeks restitution of only $1,738 of that amount based on gas purchased on days when Ms. Cleary was not working. In my view, the evidence gives rise to some doubt as to whether she fraudulently billed the rest of the gas because it was billed on business days when she was apparently working. It was not for her vehicle, which is what the allowance was for. Her testimony about the gas being used for business purposes is not unreasonable in those circumstances. So I have some doubt on that issue. And Crown s position regarding restitution simply confirms my view in that regard. In other words, with respect to the sum of $7,715 alleged, I am not satisfied that the evidence proves beyond a reasonable doubt that she defrauded the housing office of the amount beyond $1,738. Therefore, I am satisfied that there was a total amount for gas billed fraudulently of $6,751, being a total of the $1,738 and $5,013, and that is

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Also the amount to be considered for restitution.

Next, the vehicle repairs. The monthly vehicle allowance was to cover vehicle repairs, but Ms. Cleary billed $5,760 to the housing office for repairs for her own, her husband's, and other people's vehicles. There is no basis in the evidence upon which to find that the housing office would be paying to repair people's vehicles, unlike paying for gas used for its business purposes. I am satisfied that that amount should be included in the fraud charge as well.

Next, with respect to vehicle rentals. The sum of $8,693 was billed to the housing office by Ms. Cleary for vehicle rentals. In this case, the Crown seeks restitution of only $2,746 for rentals on days when Ms. Cleary was not working. This, I think, is fair in that in this instance, also, the evidence was not clear that on business days the vehicles were not used for business purposes. It does appear from the evidence that at least some of the invoices for those rentals were presented to the people signing the cheques. I have some doubt as to whether the evidence supports fraud, again bearing in mind the criminal standard of proof with respect to the full amount, and so I find the amount that is to be included in the fraud charge for vehicle rentals is $2,746.

Vacation travel allowance was the next category included in the fraud charge. Ms. Cleary claimed

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$5,817 in vacation travel allowance to which she agreed she was not entitled because her husband had already claimed it as a government employee. Her explanation that she and her husband never discussed it and never discussed who would claim the allowance or who was paying for what in relation to their vacation expenses is not credible in my view. The sum of $5,817 will therefore be included in the fraud.

Next is the housing allowance. Ms. Cleary collected the sum of $5,381 as housing allowance in 1994. During some of that time, she lived at her brother's in his subsidized housing. This would have disentitled her from the housing allowance according to the housing policy. The question really is how long she was at her brother's. Was it two and a half months as she testified, between one month and a year, or maybe six months as Ms. Cohn testified, or 12 months as the Crown alleges from the telephone records? The telephone records prove only that her telephone number was installed at her brother's house, and that was for a period of one year. Ms. Cleary's explanation for that was that he did not have a phone and she wanted to keep her number while her house was under renovation. The notes made on the telephone records, which were in evidence, were made by some unknown person whose source of knowledge is not known. So they prove no more than what Ms. Cleary admitted.

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In other words, that her phone was installed at her brother's for approximately one year. She testified that during that time she lived mostly at the house that was being renovated and in a tent in the summer.

Considering all the evidence and the standard of proof in a criminal case, I have a great deal of difficulty with the evidence on this count and I'm not satisfied that it proves anything more than that she did live at her brother's, in his subsidized housing, for two and a half months. She was not entitled to the allowance for those months and she would, as the housing manager, have known that. At the monthly allowance of $450, this amounts to fraud in the amount of $1,125. So the total under the fraud count, therefore, that I find is $55,177, of which $1,720 has been repaid. That leaves $53,457 owing.

As I have noted, these offences were committed when Ms. Cleary was the manager of the local housing office or authority. The housing office was government-funded and reported to the NWT Housing Corporation until 1995, when it was taken over by the Yellowknives Dene First Nation.

Insofar as her personal situation is concerned, Ms. Cleary is 41 years old, married, with four children. Three of those children, ages 18, 15, and 9, live with her and her husband. The eldest is expecting a child of her own in the next couple of

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months. Ms. Cleary has no criminal record. Ms. Cleary and her husband have both been well employed over the years, but they do also spend time on traditional pursuits.

It appears from the pre-sentence report and the testimony presented in court that Ms. Cleary has strong family ties and support from both her family and her community. In commenting on the support, I do bear in mind that although the local housing authority is named as the victim of the theft and fraud in the Indictment, in the end, it was the government who lost the money because it had to make up the deficit.

The main aggravating factor is that Ms. Cleary was in a position of trust in relation to the local housing office as its manager. She had previously held the same position with the Deline local housing authority and she was certainly aware of her responsibilities and that she was dealing with money for which the housing office had to account to the NWT Housing Corporation. She abused the trust placed in her.

A significant factor in all cases like this is that an individual of good character and background, like Ms. Cleary, is able to get a position like this one, a position of trust, and then to abuse and take advantage of that trust precisely because they are trusted. It is difficult for an employer to protect

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itself from employees who steal because the employer does not expect it to happen because they trust the employee. That is why, in cases like this, the employee is often able to get away with stealing or defrauding the employer for a long time before they are found out. As former Chief Sangris said in his evidence at the trial, “you have to trust your managers”. Crimes like the ones Ms. Cleary committed make it more difficult for people to do that.

The Crown submits that it was an aggravating factor that Ms. Cleary was an elected band councillor for much of the time over which the offences were committed. In my view, that fact should not be treated as a separate or additional aggravating factor because she did not commit the offences in her capacity as band councillor. However, I have no doubt that her position as a band councillor was an additional reason why she was trusted by people, why people would rely on her to act honestly.

It is aggravating that the offences involve a substantial amount of money and that they involve repeated acts of theft and fraud over approximately six years.

It was also submitted by the Crown that Ms. Cleary took pains to falsify records. While it is clear that she did not record the receipts in the journal, there were few other instances of actual

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falsification of records. It seems to me that these offences, apart from the actual thefts, involved for the most part a failure to tell those signing the cheques what the cheques were actually for more so than an actual deliberate falsification of records. The evidence was not sufficient, in my view, to establish that she forged Mr. Sangris's signature. That having been said, there was evidence that she tried to cover up what she had done; for example, by not disclosing all the receipt books to the yearly auditors and by misleading them as to the reason for the payroll deduction rather than telling them it was to repay the housing office for some of the personal building supplies she had charged.

I am not satisfied that this was a calculated, premeditated scheme from the outset. The evidence instead suggests that because there were not strong controls in place and because she was the ultimate authority in the local office, Ms. Cleary was able to get away with using the Housing Authority's money for her own purposes and so kept on doing it when she did not get caught.

From her own testimony at trial, it is clear to me that Ms. Cleary had a rather inflated sense of her authority. At one point she said, in answer to a question about the gasoline purchases, that she didn't know she had to answer to anyone, that she felt the

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most important thing was that she had left results in the community. And from all accounts, she did leave good results in the community in the area of improved housing. However, everyone who deals with money that is not their own has to answer to the source of the money, be it a band or a government or another person. That is something that is so elementary to the operation of business and society that it defies logic that Ms. Cleary would claim it didn't apply to her.

I do not agree, as Crown counsel submitted, that I should infer that Ms. Cleary's actions have damaged, or will damage, the credibility of the First Nation in its self-government negotiations. To draw that inference, in my view, would be a generalization that would not be reasonable and would be unfair to both the First Nation and Ms. Cleary.

The fact that Ms. Cleary pleaded not guilty and exercised her right to a trial is not aggravating, nor do I treat her apparent lack of remorse, except for the way in which the publicity has affected her family, as aggravating. All of this simply means, as has been pointed out in other cases, that she does not have the benefit of the usually mitigating effect of a guilty plea and expression of remorse.

As the case law indicates, a good background is not usually considered a mitigating factor because, as I have already said, it is precisely because a person

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has a good background that he or she is able to commit this type of crime.

Other than the strong support Ms. Cleary has from her family and the community, the only factor that I think can be said to be in mitigation in this case is the length of time that this matter has taken. In written reasons filed on March 6th, 2002, I dismissed Ms. Cleary's application for a stay of proceedings based on pre-charge delay arising from the fact that she was dismissed from her employment in March 1996 when it was discovered that there was a problem, the auditors had completed their report by July of 1997, but she was not charged until October 2000 essentially because of lack of police resources. Although the delay in charging her did not entitle her to a stay, it is a circumstance that I do take into account in mitigation of sentence because it means that she has had the uncertainty of this matter hanging over her for over four years. In that regard, I rely on the Leaver and Bosley cases, from the Ontario Court of Appeal, and the McCauley case, from the Alberta Court of Appeal, cited in defence counsel's brief.

I have reviewed the cases submitted by both counsel. Those cases emphasize, as do many others, that deterrence and denunciation are of paramount significance in cases of theft and fraud involving breach of trust. Many of the cases were decided

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before the conditional sentence regime was introduced by Parliament and became law. So prior to that happening in 1996, the general rule was that these offences were dealt with by a term of imprisonment in jail. Since the advent of the conditional sentence regime, the Supreme Court of Canada has had the opportunity to provide us with some guidance in cases such as Proulx and Bunn, both decided in the year 2000. Cases which were decided before those must, I think, be treated with some caution as a result. In Proulx, the Supreme Court said that a conditional sentence can provide a significant amount of denunciation and that judges should be wary of placing too much weight on deterrence when choosing between a conditional sentence and incarceration.

Crown counsel conceded in his submissions that Ms. Cleary is not a danger to the community, and certainly there is no evidence that she is.

There is no minimum term of imprisonment for the offences for which she has been convicted. Under Section 742.1, if the Court impose a sentence of less than two years and if the Court is satisfied that serving the sentence in the community would be consistent with the fundamental purpose and principles of sentencing, then a conditional sentence (that is, a sentence of imprisonment to be served in the community) may be imposed.

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In this case, the defence seeks a conditional sentence. The Crown seeks a sentence of two to three years in jail, not conditional. As I think that a sentence in the area of two years for this first offender would be appropriate, I have to consider whether that sentence should be conditional.

In cases like this, the specific facts are very important. While, in this case, the amount of money was significant, it was also significantly less than the sums in the Fehr case in the Saskatchewan Court of Appeal and the Grundy case in the Alberta Court of Appeal. Also in Fehr, where the Court of Appeal overturned a conditional sentence, there were added losses besides the money because of the loss of reputation of the victim company and the fact that the livelihood of many of its employees was jeopardized.

In this case there is no evidence of any loss other than the money. There is specifically no evidence that the community lost out in the sense of having to do without housing because of Ms. Cleary's actions. Now, obviously that would seem to be because the NWT Housing Corporation made up the deficits which resulted to the local housing office from Ms. Cleary's crime. It is, however, somewhat ironic that the letter filed on sentencing from Chiefs Edjericon and Liske attributes the fact that N'dilo and Dettah were awarded the Most Improved Community Award by the

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government in 1994 as being due in large part to Ms. Cleary's work in assisting people to move from substandard housing. Now, again, I bear in mind that her good work also explains in part how she was trusted and able to get away with these offences for so long. In the end, obviously the community in the larger sense does suffer because, in the end, it will be the taxpayers who bear the cost.

It is difficult to know from the evidence what Ms. Cleary's motive was in committing these crimes. There is no evidence that she led a lavish lifestyle or that she needed money for gambling or had personal financial problems as we sometimes see in these cases. The only motive that does appear from the evidence is greed, which again is not out of the ordinary in these cases.

One of the principles of sentencing enshrined in Section 718.2(b) of the Criminal Code is that a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances.

I wish to refer briefly to some other cases from this Court that were not cited by counsel.

In 1997, in the case of R. v. Murphy, [1997] N.W.T.J. No. 87, Mr. Justice Richard, on a joint submission, imposed a six-month conditional sentence where the accused, a member of the board of directors

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of Pangnirtung Fisheries started a fire at the fish plant. He was charged with mischief. He did not plead guilty but did not contest the Crown's evidence. He had a minor criminal record. The loss suffered by the fish plant was $40,000. This was a breach of trust situation, which, although it involved only one act, involved an act which could have caused harm to people.

In R. v. Tologanak, [1997] N.W.T.J. No. 16, a case which I heard, the accused pleaded guilty to stealing $40,000 from the Kitikmeot Hunter's and Trapper's Association, of which he was the executive director. He had a dated record for theft and had tried to make restitution. I accepted the joint submission by counsel for a conditional sentence of two years less a day with two years' probation to follow and restitution.

In R. v. Bedard, (2000) NWTSC 73, there was a guilty plea to breach of trust and fraud. The accused, a government employee, had obtained $15,000 and a computer printer by falsely certifying that certain work had been done for the government. I imposed a 15-month conditional sentence. He had already made restitution in that case.

Now, obviously there are some significant differences between these cases and Ms. Cleary's case, but they all involve breach of trust, taking or

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causing loss to an employer's or an organization's property.

I must also have regard to Section 718.2(e) of the Criminal Code which says:

“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.”

I conclude from that section, along with the conditional sentence regime, that Parliament has sought, by these legislative provisions, to encourage the courts to impose sentences of other than actual incarceration in appropriate cases. I think the Supreme Court of Canada has reinforced that in the cases of Proulx, Bunn, and Gladue.

Having given it some consideration, I do not conclude that the amount of money involved in this case, the number of transactions, or the period of time over which the offences took place, make a conditional sentence inappropriate.

Although Ms. Cleary's good background is not a mitigating factor when it comes to sentence, it does provide some assurance that she would comply with the terms of a conditional sentence if one were imposed. I draw the same conclusion from the letter from her employer for the past four years since the commission of the offences. In that letter, she is referred to

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as a capable and dependable employee who is committed to her family and dedicated to her community.

One factor that has caused me some concern is the lack of remorse, but, as I have already noted, that is not an aggravating factor and I am not prepared to give it more weight than the factors I have just mentioned in assessing Ms. Cleary's suitability for a conditional sentence.

I need not rely on the Gladue case because the sentence I am going to impose would, I believe, be appropriate in this case even if Ms. Cleary was not an aboriginal person. The principles set out in Gladue simply reinforce my view that such a sentence is appropriate in this case.

Another of the fundamental principles of sentencing is that a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender. When I consider all the circumstances, I do not believe that this is a case that requires a term of actual imprisonment, notwithstanding that it is a very serious offence and that Ms. Cleary bears a high degree of responsibility. I would repeat what I said in the Bedard case and what was said by Mr. Justice Taliano of the Ontario Court in the case called Gross, cited in Bedard, that this is probably the type of situation that Parliament had in mind when it enacted the conditional sentence

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regime. In other words, a non-violent crime, a crime of property, and an offender of otherwise good character. I think it is also important that Ms. Cleary get back on track to becoming the productive member of her community that she has been in the past and at the same time face the community whose trust, and I use that in the broadest sense, she has not lived up to by committing these crimes.

I have considered the issue of supervision of the sentence in Dettah where Ms. Cleary lives. Dettah is not all that far from Yellowknife. And the pre-sentence report, which does say that she would be a suitable candidate for a community-based disposition, does not identify any problems with supervision. In my view, it would not be appropriate to deny someone who is otherwise suitable the benefit of a conditional sentence simple because it may be more difficult to supervise.

The order I make includes a form of house arrest, but I have made allowance for Ms. Cleary to attend work if she becomes employed and under other circumstances, and I do that because she has a family to help support, she will have a debt to repay, and I think it is more productive and still consistent with the principles of sentencing to have her start at that now rather than later if she is able to obtain employment.

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A conditional sentence must include a punitive element and there is no real doubt in my mind that being confined to her house for substantial periods of time carries a punitive aspect, perhaps in particular for someone living in a small, close-knit community in which being out in the community and being out on the land is a significant activity.

Stand, please, Ms. Cleary.

In all the circumstances and having regard to all the principles of sentencing, I have decided that an appropriate sentence is two years less one day to be served in the community. That will be the total sentence for both counts.

The conditions of the sentence are as follows: Number one, you will keep the peace and be of good behaviour. Number two, you will appear before the Court when required to do so by the Court. Number three, you will report to a conditional sentence supervisor within three working days of today here in Yellowknife, and, thereafter, when and where required by the supervisor and in the manner directed by the supervisor. Pour, you will remain within the Northwest Territories unless written permission to go outside the Northwest Territories is obtained from this Court or the supervisor. Five, you will notify this Court or the supervisor in advance of any change of name or address and promptly notify the Court or

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the supervisor of any change in employment or occupation. Six, you will perform 200 hours of community service at the direction of the supervisor within the first 18 months of the conditional sentence. Seven, for the full term of the conditional sentence order, you will remain indoors at your place of residence, 24 hours a day, except for the following: (a) to complete the 200 hours of community service as directed by the supervisor; (b) to go to, attend at, and return home from employment should you obtain employment, in which case you must first notify the supervisor of your employer s name and address and your hours of work; (c) to obtain emergency medical attention for yourself, your husband, or a child residing with you; (d) for one period per week, of not more than four hours, to obtain groceries and other necessaries. Condition number eight, you will cooperate fully with random checks by telephone and in person by your supervisor or the police to verify your compliance with this conditional sentence.

In accordance with Section 742.3(3) of the Criminal Code, I direct that a copy of the conditional sentence order be given to Ms. Cleary and that the clerk, with the assistance of defence counsel, explain to Ms. Cleary the substance of Section 742.4 and 742.6 and the procedure for applying under 742.4 for changes to the optional conditions.

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I bring to your attention, Ms. Cleary, and this is very important, that if you breach any of the terms of your conditional sentence order, if you breach any of the conditions that I have just listed, you may be brought back before this court and the Court may order that you serve any of the unexpired portion of the sentence in jail.

There will also be a restitution order under Section 738 of the Criminal Code in the amount of $53,457 in favour of the NWT Housing Corporation as stipulated in the letter marked Exhibit S4. I have not made it part of the conditional sentence order because of the uncertainty as to Ms. Cleary's financial situation since she is not presently working. So it will be open to the Crown no enforce the order under Section 741. I would just say that I would hope some arrangements would be made as between Ms. Cleary and the Housing Corporation to start repayment and to work out something suitable in than regard.

You may have a seat, Ms. Cleary. Is there anything further, Counsel, that I need to deal with?

MR. SLATROFF:  Your Honour, I'm wondering if it might be appropriate as a further condition of the 24-hour condition that Ms. Cleary remain indoors that there be no visitors past a certain hour, and this is simply to add an additional punitive element to it.

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If she were incarcerated in jail facilities, she would have restricted visiting hours, and I submit it may be appropriate in these circumstances as well. And, as well, I wish that it -- I ask that it be made clear to Ms. Cleary as to what the condition is to go to, attend, and return from employment, that -- whether she can run errands on the way or pick up her children from school on the way to and from work. I believe that should be made clear as well, whether she is to proceed directly to work or if she's permitted no run other errands while she1s in town.

THE COURT:   Well, I think it's clear from the condition about going to work that she is to go to, attend at, and return home from employment. Now, I'm not going to impose a condition that she can't pick up her children. She's living in a small community and if her children are somewhere that they need to be to be picked up, it seems to me to be a little bit extreme to say she can't pick them up. But I think it is clear, and I will make it clear, that she is to proceed directly to work and home from work other than making what I would consider a necessary stop. Now, I can't predict what might happen, Mr. Slatkoff. I think that that is as much as -- I would say at this point she has the four hours to attend to necessaries, so that will not be part of going to and coming back from work. But in terms of picking up her children, I

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don't want to say that she cannot do that. I think that is a little unreasonable.

As far as people not coming to her home past a certain hour, there are other people living in her home. I think it may be restricting their lives, which I don't think I'm entitled to do under a conditional sentence. I appreciate that the case law has said that there is -- obviously, house arrest is house arrest. But I don't think it means in all ways turning her home into a jail. So I'm not going to make that condition. I don't think, in the circumstances, it is reasonable.

MR. SLATKOFF:  The only other item I had, Your Honour, I ask for an order returning exhibits when the appeal period is expired.

THE COURT:   Yes, there will be an order for the return of the exhibits at the expiry of the appeal period or once an appeal is determined, if an appeal is taken. Is there anything from the defence then?

MR. LATIMER:  No. No, thank you, Your Honour.

THE COURT:   All right. Thank you. We will close court.

(PROCEEDINGS CONCLUDED)


Certified Pursuant to Rule 723 of the Rules of Court

Jane Romanowich, CSR(A), RPR
Court Reporter

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