SCC maple syrup case clarifies court's discretion to reduce fines in lieu of property forfeiture

Decision is useful tool against organized crime, says Crown counsel on the case

SCC maple syrup case clarifies court's discretion to reduce fines in lieu of property forfeiture
Julien Beauchamp‑Laliberté, Director of Criminal and Penal Prosecutions

In a Quebec case involving an $18-million maple syrup heist, the Supreme Court of Canada ruled the court did not have jurisdiction to lower the imposed fine in lieu of forfeiture of proceeds of crime.

In R. v. Vallières, released Thursday, the Court clarified the judicial discretion under s. 462.37(3) of the Criminal Code, which allows the court to order a fine to replace stolen property which can no longer be returned to its owner.

After the Quebec Superior Court convicted Richard Vallières, the ringleader of the maple syrup theft, the court imposed on him a $10-million fine, the amount Vallières had admitted were his net proceeds in the scheme. The Court of Appeal lowered the fine to $1 million, which represented Vallières’ total profit after he had paid his co-conspirators.

In a unanimous decision, the Supreme Court of Canada has reinstated the $10-million fine. Section 462.37(3) is clear that a fine in lieu of forfeiture of proceeds of crime (fine in lieu) must equal the entire proceeds of the crime in question, because it is intended to replace that property, said the court.

Once the value of the property obtained in the crime was established through the evidence, the Court of Appeal was required to impose a fine equal to the value of the property, says Julien Beauchamp‑Laliberté, who was Crown counsel in the case. “The court can decide what is the value of the property. That's the discretionary power they have. But they cannot choose a different amount.”

The SCC’s decision is “a direct weapon against organized crime,” and will assist in cases involving drug-trafficking and other economically motivated crimes, says Beauchamp‑Laliberté.

Writing the reasons for the court, Chief Justice Richard Wagner said that, while Parliament intended the courts to have some discretion, the wording in s. 462.37(3) is “categorical” that the fine is equal to the value of the property which comprises the criminal proceeds. Parliament enacted s. 462.37(3) to deprive offenders of the fruits of their criminality and to disincentivize their illegal conduct, he said. “Distinguishing between an offender’s income and expenses in order to determine the offender’s profit margin would essentially amount to legitimating criminal activity.”

Limiting the fine to the profit also contradicts the nature of the order, said Wagner, because a fine in lieu is intended as a substitute where the forfeiture of the property is impracticable.

The Quebec Court of Appeal had misread the ruling in R. v. Dieckmann, 2017 ONCA, when it found the fine could be reduced to reflect the profit margin, provided the reduced amount met the objectives of deprivation of proceeds and deterrence, said Wagner. Dieckmann did not establish that an offender’s fine could be based on their profit. It found “the value of the property may be apportioned between co-accused where the evidence shows that they had possession or control of it at some point.”

The appeal court was also wrong when it said Vallières’ eight-year prison sentence, combined with the $1-million fine, met the deterrence objective. The fine in lieu is not meant to punish the offender, but to replace the stolen property, he said.

The exception to the principle that a fine in lieu must encompass all the criminal proceeds is when the fine is apportioned among co-accused. This is done to prevent double recovery of the same property from more than one co-accused. Some of Vallières’ accomplices were also fined, in amounts ranging from $9,840 to $1.2 million and totalling around $2 million. Because the stolen syrup was worth $18 million, and Vallières was being fined less than $10 million, the possibility of double recovery was “non-existent,” said Wagner.

The Vallières case arose out of the largest investigation ever conducted by the Sûreté du Québec. Vallières and his accomplices stole the maple syrup from a warehouse operated by the Fédération des producteurs acéricoles du Québec, the organization in charge of regulating the production and marketing of maple syrup in Quebec. Vallières’ co-conspirators drained 9,571 barrels of syrup, with a market value of $18 million, and filled the barrels back up with water. Vallières sold the syrup for $10 million and was left with around $1 million after paying his partners.

In 2016, a jury found Vallières guilty of theft, fraud and trafficking in property obtained by crime. In sentencing, the trial judge said his discretion to determine the fine was limited, and the fine had to be equal to the value of the stolen property under Vallières’ control. While the Fédération des producteurs acéricoles du Québec had lost $18 million worth of syrup, the evidence showed Vallières had only received $10 million. The judge ordered the fine in that amount, minus a $606,501.56 restitution order.

The Quebec Court of Appeal found the trial judge had erred in deciding he had no choice but to impose the $10-million fine. The judge had the discretion to order a fine reflecting the profit gained, if the amount was sufficient to meet the dual objective of deprivation of proceeds and deterrence, said the court. It was the appeal court’s view also that the fine amounted to double recovery, given the other fines imposed on Vallières’ accomplices.

The court allowed the appeal on the ground that fining Vallières based on his profit margin was more aligned with the deprivation and deterrence objectives.

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