The Queen v. Zelensky, [1978] 2 SCR 940

SUPREME COURT OF CANADA

The Queen v. Zelensky, [1978] 2 S.C.R. 940

Date: 1978-05-01

Her Majesty The Queen Appellant;

and

Anne Zelensky Respondent;

and

The T. Eaton Company Limited, The Attorney General of Canada, The Attorney General of Quebec and The Attorney General of Alberta Interveners.

1977: November 29; 1978: May 1.

Present: Laskin C.J. and Martland, Ritchie, Spence, Pigeon, Dickson, Beetz, Estey and Pratte JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR MANITOBA

Constitutional law — Criminal law — Theft — Plea of guilty — Sentence of imprisonment and probation — Order for compensation and for restitution — Require­ments not met for compensation but for restitution only — Validity of s. 653 of Criminal Code, R.S.C. 1970, c. C-34.

The accused, who was an adjuster in the catalogue sales operation of the T. Eaton Co. Ltd., and her husband were charged with defrauding Eaton to a value of $18,000 more or less and a day later some relatives of the accused were charged with receiving stolen goods. Still later, a charge of fraud was laid against another relative of the accused. Subsequently, a new charge was laid against the accused, her husband, her daughter, her son-in-law and her sister of theft of money, to the amount of $18,000 more or less and merchandise to the amount of $7,000 more or less, the property of Eaton. As a result of plea bargaining, the accused and her husband elected to be tried before a provincial court judge. They pleaded guilty to the charge of theft of money to the amount of $18,000 "more or less" and merchandise to the amount of $7,000 "more or less". All the other charges were stayed.

Eaton instituted civil proceedings, for the recovery of money and merchandise stolen from it by the offenders, a day before the criminal charges were brought against them. It continued with the civil proceedings, taking steps in connection therewith while the criminal pro­ceedings were in progress, and even after the offenders had pleaded guilty to theft. Eaton then decided to seek a compensation order under s. 653 of the Criminal Code and a dispute arose with respect to the amount of loss, particularly in relation to the money that was allegedly

[Page 941]

stolen. So far as appeared, the civil proceedings were maintained while the application for a compensation order was pursued.

The trial judge gave a suspended sentence to the accused's husband but he meted out to her a sentence of imprisonment for two years less a day. In addition, the accused was sentenced to one year of supervised proba­tion. At the same time, the trial judge made an order for compensation under s. 653(1) in the amount of $18,000, and directed restitution of recovered goods under s. 655.

On appeal to the Court of Appeal it was first unani­mously decided that the incarceration and probation sentence should be affirmed. Later, the majority expressed the view that s. 653 was ultra vires, the minority that it was valid. However, the majority also found, contrary to the conclusion of the dissenting judges, that in any case the orders of compensation and of restitution had been improperly made. An appeal by the Crown, with leave of this Court, followed:

Held: The appeal should be allowed in part; the order of the Court of Appeal is affirmed in so far as it set aside the order for compensation under s. 653 of the Code but is varied so as to reinstate that part of the composite order of the trial judge directing restitution. There should be a declaration that s. 653 is valid, Pigeon, Beetz and Pratte JJ. dissenting as to s. 653(1) and (2).

Per Laskin C.J. and Martland, Ritchie, Spence, Dickson and Estey JJ.: The validity of s. 655 was not impeached before the Court of Appeal or before this Court, and the order for restitution must stand as a severable order validly made under s. 655.

Section 653 is valid as part of the sentencing process. Although a good deal was made by those attacking the validity of the section of the provision therein for filing and entering a compensation order as a judgment of the provincial superior court, this is simply administrative machinery which cannot control the issue of validity.

In the reasons of the majority of the Court of Appeal, Matas J.A. adverts to various considerations affecting the applicability of s. 653 and draws an adverse constitu­tional conclusion when comparisons are drawn between the procedures in a civil action for damages and the relative position of the accused as a defendant in such an action and his position as a convicted person against whom an order is sought under s. 653. In assessing constitutionality there is merit in such an approach, but relative advantages in applicable procedures cannot be

[Page 942]

determinative of validity where the primary consider­ation is a more functional one, with regard being had to the object of the impugned legislation and its connection with other admittedly valid aspects of the criminal process.

An order for compensation should only be made with restraint and with caution, and in the circumstances of the present case there should be no interference with that part of the judgment of the majority of the Court of Appeal holding that the order for compensation should not have been made.

It is important to contain s. 653 within its valid character as part of the sentencing process and thus avoid the allegation of intrusion into provincial legisla­tive authority in relation to property and civil rights in the province. Although the Courts have recognized the wide scope of the federal power in relation to criminal law and criminal procedure, and although there is now a broad range of powers in a sentencing court to deal with offenders, it nonetheless remains true that the criminal law cannot be used to disguise an encroachment upon provincial legislative authority. Any serious contest on legal or factual issues, or on whether the person alleging himself to be aggrieved is so in fact, should signal a denial of recourse to an order under s. 653.

With reference to the question of appeal from an order for compensation, the filing of such an order in the provincial superior court does not put in motion any civil proceedings other than those relating to enforcement. A compensation order, being included in the definition of "sentence" under s. 601 of the Criminal Code, is appealable as provided by that Code, and the application of the principle of Pringle v. Fraser, [1972j S.C.R. 821, excludes any suggestion that civil appeal proceedings are open.

Section 616 of the Criminal Code deals with the powers of a provincial court of appeal in respect of an order for compensation and provides for suspension of the operation of the order during the time it is appealable and until appeal proceedings, if taken, are conclud­ed. Section 616(2) empowers the provincial court of appeal to annul or vary a compensation order, whether or not the conviction is quashed. It does not itself give a right of appeal. It appears, therefore, that only the accused has a right of appeal against a compensation order, a right given by s. 603(1)(b), and not the person in whose favour the compensation order is made. This is consistent with the character of such an order as part of sentence.

[Page 943]

Re Torek and The Queen (1974), 15 C.C.C. (2d) 296; Turcotte c. Gagnon, [1974] R.P. 309, applied; City of Toronto v. The King, [1932] A.C. 98; In re Board of Commerce Act, 1919, and the Combines and Fair Prices Act, 1919, [1922] 1 A.C. 191; Attorney-General of Ontario v. Hamilton Street Railway, [1903] A.C. 524; Provincial Secretary of Prince Edward Island v. Egan, [1941] S.C.R. 396; Reference re Validity of Section 5(a) of the Dairy Industry Act, [1949] S.C.R. 1, aff'd [1951] A.C. 179; R. v. Scherstabitoff, [1963] 2 C.C.C. 208; Industrial Acceptance Corporation Ltd. v. The Queen, [1953] 2 S.C.R. 273; Goodyear Tire & Rubber Co. of Canada Ltd. v. The Queen, [1956] S.C.R. 303; Sunbeam Corporation (Canada) Ltd. v. The Queen, [1969] S.C.R. 221; R. v. Groves (1977), 39 C.R.N.S. 366; Papp v. Papp, [1970] 1 O.R. 331; R. v. Cohen and Miller, [1922] 3 W.W.R. 1126; Attorney-General for Ontario v. Reciprocal Insurers, [1924] A.C. 328, referred to.

Per Pigeon, Beetz and Pratte JJ., dissenting in part: The accused admitted only having stolen some merchan­dise and a substantial sum of money the amount of which she was unwilling to admit. The trial judge was quite correct in accepting the submission by counsel for the Crown that this attitude of the accused was proof of her continuing dishonesty, in other words, that she was unrepentant. However, no matter how much this made accused's case unsympathetic and also reflected against counsel who co-operated in such tactics, it could not constitute a proper foundation for a compensation order. The making of a compensation order could not be justified without clear evidence of a definite amount by admission or otherwise.

With respect to the order for restitution, the situation was somewhat different. There were no civil proceedings pending, all the merchandise that the accused was charged with having stolen was seized by the police and nothing was said which might indicate that the plea of guilty to the charge of theft of merchandise to the amount of $7,000 more or less did not cover each of the articles seized. Also, the order of restitution was made under a section of the Code, the constitutionality of which was not disputed. The making of such order is not discretionary as the order for compensation, but is man­datory in the case specified in s. 655(1). The order of restitution should, therefore, be restored.

As to the constitutional validity of s. 653, the orders that the section purports to authorize are clearly intended to be in substitution for the civil remedy and not in addition to it. In the latter case, the section would be

[Page 944]

valid as providing for punishment. The question that arises is whether Parliament's jurisdiction over "The Criminal Law, ... including the Procedure in Criminal Matters" extends to procedure in civil matters arising out of the same set of facts that constitute a criminal offence. This question must be answered in the negative. The authority to define crimes does not include the authority to legislate concerning the purely civil conse­quences of the facts that constitute a crime. Similarly the authority to legislate respecting procedure in crimi­nal matters does not include the authority to legislate on procedure in civil matters even when the same set of facts are involved in the criminal offence as in the civil claim. In this respect one should note that s. 10 of the Criminal Code reads: "No civil remedy for an act or omission is suspended or affected by reason that the act or omission is a criminal offence." It also should be noted that a finding of guilt under the Criminal Code has been held not to be conclusive from a civil point of view: La Foncière v. Perras, [1943] S.C.R. 165.

This, however, does not decide the issue of constitu­tionality in the present case because an important aspect of the constitutional division of legislative authority remains to be considered namely, the extent of the federal ancillary power. Subsections (1) and (2) of s. 653 cannot be considered as necessarily incidental to the full exercise by Parliament of its authority over criminal law and criminal procedure. A compensation order is nothing but a civil judgment.

The provisions of s. 653(3) are of a different charac­ter than subss. (1) and (2) under which the compensa­tion order becomes a civil judgment. Subsection (3) has its origin in a different section of the previous Criminal Code namely, s. 1049, traceable to the old Larceny Act. In so far as this deals with moneys found in the posses­sion of the accused at the time of his arrest, it is properly incidental to criminal procedure. The arrest of a person suspected of crime, a search of his person and the detention of money found in his possession are all part of the normal criminal process. The proper disposi­tion of money thus seized is therefore a necessary part of the criminal procedure, just as the adjudication on the guilt or innocence of the accused.

It followed that s. 653(1) and (2) should be held to be ultra vires save to the extent contemplated in s. 653(3).

Adgey v. The Queen, [1975] 2 S.C.R. 426; Lake v. The Queen, [1969] S.C.R. 49; Provincial Secretary of Prince Edward Island v. Egan, [1941] S.C.R. 396; Switzman v. Elbling, [1957] S.C.R. 285; Ross v. Regis­trar of Motor Vehicles, [1975] 1 S.C.R. 5; City of

[Page 945]

Toronto v. The King, [1932] A.C. 98; Basted v. Grafton, [1948] 1 W.W.R. 614; Attorney General for Canada v. Attorney General for British Columbia, [1930] A.C. 111; Attorney General for Quebec v. Attor­ney General for Canada, [1945] S.C.R. 600; R. v. Scherstabitoff, [1963] 2 C.C.C. 208; Toronto Corpora­tion v. York Corporation, [1938] A.C. 415; Re State of Nebraska and Morris (1971), 2 C.C.C. (2d) 282, referred to.

APPEAL from a judgment of the Court of Appeal for Manitoba[1], allowing an appeal from a judgment of Collerman P.C.J. Appeal allowed in part, Pigeon, Beetz and Pratte JJ. dissenting in part.

J. D. Dangerfield and A. Jacksteit, for the appellant.

D. A. Yanofsky, Q.C., for the respondent.

S. Froomkin, Q.C., and S. R. Fainstein, for the Attorney General of Canada.

M. Pothier and Y. Berthiaume, for the Attorney General of Quebec.

W. M. Henkel, Q.C., for the Attorney General of Alberta.

M. L. Ostfield and B. A. Crane, for T. Eaton Co. Ltd.

The judgment of Laskin C.J. and Martland, Ritchie, Spence, Dickson and Estey JJ. was deliv­ered by

THE CHIEF JUSTICE—This appeal, brought here by leave to this Court, challenges the majority judgment of the Manitoba Court of Appeal (Matas J.A., Hall and O'Sullivan JJ.A. concurring, Monnin J.A., Guy J.A. concurring, dissent­ing) which invalidated s. 653 of the Criminal Code and held also, and in any event, that Provincial Court Judge Collerman erred in law in making an order for compensation under that provision and in directing restitution of stolen property under s. 655. The order for compensation and for restitu­tion was a composite order made at the time the respondent Anne Zelensky was sentenced to imprisonment and to a term of probation after pleading guilty to theft and was in pursuance of an

[Page 946]

application for such relief made by T. Eaton Com­pany Limited, the victim of the theft.

The validity of s. 655 was not impeached before the Manitoba Court of Appeal or before this Court, and there was nothing in the reasons of Matas J.A. which pertained particularly to the direction for restitution of the stolen goods by way of contesting that part of the trial judge's compos­ite order. It appears to have been swept out by reason of its association with the order for com­pensation. Counsel .for the respondent Anne Zelensky did not complain here of the order for restitution and, in my view, it must stand as a severable order validly made under s. 655, whatever be the disposition as to the order for compen­sation under s. 653 and as to the validity of this last-mentioned provision.

Sections 653 and 655 read as follows:

653. (1) A court that convicts an accused of an indictable offence may, upon the application of a person aggrieved, at the time sentence is imposed, order the accused to pay to that person an amount by way of satisfaction or compensation for loss or damage to prop­erty suffered by the applicant as a result of the commis­sion of the offence of which the accused is convicted.

(2) Where an amount that is ordered to be paid under subsection (I) is not paid forthwith the applicant may, by filing the order, enter as a judgment, in the superior court of the province in which the trial was held, the amount ordered to be paid, and that judgment is enforceable against the accused in the same manner as if it were a judgment rendered against the accused in that court in civil proceedings.

(3) All or any part of an amount that is ordered to be paid under subsection (1) may, if the court making the order is satisfied that ownership of or right to possession of those moneys is not disputed by claimants other than the accused and the court so directs, be taken out of moneys found in the possession of the accused at the time of his arrest.

655. (1) Where an accused is convicted of an indictable offence the court shall order that any property obtained by the commission of the offence shall be restored to the person entitled to it, if at the time of the trial the property is before the court or has been

[Page 947]

detained so that it can be immediately restored to that person under the order.

(2) Where an accused is tried for an indictable offence but is not convicted, and the court finds that an indictable offence has been committed, the court may order that any property obtained by the commission of the offence shall be restored to the person entitled to it, if at the time of the trial the property is before the court or has been detained, so that it can be immediately restored to that person under the order.

(3) An order shall not be made under this section in respect of

(a) property to which an innocent purchaser for value has acquired lawful title,

(b) a valuable security that has been paid or discharged in good faith by a person who was liable to pay or discharge it,

(c) a negotiable instrument that has, in good faith, been taken or received by transfer or delivery for valuable consideration by a person who had no notice and no reasonable cause to suspect that an indictable offence had been committed, or

(d) property in respect of which there is a dispute as to ownership or right of possession by claimants other than the accused.

(4) An order made under this section shall be execu­ted by the peace officers by whom the process of the court is ordinarily executed.

(5) This section does not apply to proceedings against a trustee, banker, merchant, attorney, factor, broker or other agent entrusted with the possession of goods or documents of title to goods, for an offence under section 290, 291, 292 or 296.

I think it desirable to set out s. 654 as well because it stands as a reinforcement and adjunct to the policy reflected in s. 653. It is in these words:

654. (1) Where an accused is convicted of an indictable offence and any property obtained as a result of the commission of the offence has been sold to an innocent purchaser, the court may, upon the application of the purchaser after restitution of the property to its owner, order the accused to pay to the purchaser an amount not exceeding the amount paid by the purchaser for the property.

(2) Where an amount that is ordered to be paid under subsection (1) is not paid forthwith the applicant may, by filing the order, enter as a judgment, in the superior court of the province in which the trial was

[Page 948]

held, the amount ordered to be paid, and that judgment is enforceable against the accused in the same manner as if it were a judgment rendered against the accused in the court in civil proceedings.

(3) All or any part of an amount that is ordered to be paid under subsection (1) may, if the court making the order is satisfied that ownership of or right to possession of those moneys is not disputed by claimants other than the accused and the court so directs, be taken out of moneys found in the possession of the accused at the time of his arrest.

Sections 653, 654 and 655 have been in the Criminal Code in similar but not exact formula­tion since the Code's enactment in 1892: see ss. 836, 837, 838. The original of the present s. 653, namely, s. 836, provided for compensation not exceeding one thousand dollars upon the applica­tion of the person aggrieved, the amount to be deemed a judgment debt owing by the accused and enforceable in the same way as an order for costs under s. 832, which provided, inter alia, for satis­faction in whole or in part out of money belonging to and taken from the accused on his arrest.

The provision for compensation was not then tied expressly to the sentencing process as is now the case under s. 653. Under the original of the present s. 654, namely, s. 837, where property involved in the offence was sold to a bona fide purchaser and restored to the true owner, the purchaser could apply for compensation out of money of the accused taken from him on his apprehension. The present s. 654 clearly goes far­ther in providing for an order for a money payment, subject to the Court being able to direct that all or part of the compensation to the purchaser be paid out of money in the possession of the accused at the time of his arrest and which is indisputably his. Neither in ss. 836 or 837 was there any such express provision as now exists in ss. 653 and 654 for filing the order for compensation, with effect as a judgment enforceable as if it was a judgment in civil proceedings.

[Page 949]

The principle of restitution under the present s. 655 is carried forward from the original s. 838, but the present provision is more explicit (if, indeed, the original provision covers the point at all) that an order will not be made if there is a dispute as to ownership of the property involved by claimants other than the accused. No such issue arose in the present case and, as I have already said, the order for restitution must stand.

It appears to me that ss. 653, 654 and 655, historically and currently, reflect a scheme of criminal law administration under which property, taken or destroyed or damaged in the commission of a crime, is brought into account following the disposition of culpability, and may be ordered by the criminal court to be returned to the victimized owner if it is under the control of the court and its ownership is not in dispute or that reparation be made by the offender, either in whole or in part out of money found in his possession when arrested if it is indisputably his and otherwise under an order for compensation, where the property has been destroyed or damaged.

I think s. 655(2) gives particular emphasis to the scheme in providing for an order of restitution, even if the accused has been acquitted, where the property involved in the commission of an offence is under the control of the court. The integrity of the scheme is seen in s. 654, already mentioned, which enables the criminal court to tidy up a situation where stolen property has been sold to a bona fide purchaser and it is available for restora­tion to the victimized owner, the court being authorized upon such restitution to inflict upon the offender a liability to pay to the innocent purchas­er what he gave for the goods.

I regard s. 654 as of a piece with s. 388(2)(3) which deals with wilful damage to property where the damage does not exceed fifty dollars. The summary conviction court is authorized to make an award of compensation, not exceeding that amount, to the aggrieved person in addition to any punishment imposed, payment being enforced by a term of imprisonment not exceeding two months. The pecuniary sanction under both s. 388 and s. 654 may be regarded as the imposition of restitutionary

[Page 950]

fines, with a direction as to the destination of the money, a direction which it is open to Parliament to give: see Toronto v. The King[2]. It is true that in that case the challenged legislation of Parliament, a provision of the Criminal Code, provided for certain fines to be paid to the municipal or local authority but I see no departure from principle and from lawful constitutional authority if they are directed to a victim of a crime or to someone, e.g. the bona fide purchaser under s. 654 who has also been victimized as a result thereof. Of course, the characterization of the compensa­tion provided under ss. 388 and 654 spills over to the provisions of s. 653 and has a relation as well to s. 655.

There is a passage in the reasons in Toronto v. The King, supra, at p. 104, which is relevant here. Lord Macmillan, speaking for the Privy Council, said this:

Turning now to s. 91 of the British North America Act, their Lordships find that "notwithstanding anything in this Act," and therefore notwithstanding the provisions of s. 109, "the exclusive legislative authority of the Parliament of Canada extends to all matters coming within ... the criminal law". Plainly, and indeed admittedly, this confers on the Dominion Parliament the exclusive right by legislation to create and define crimes and to impose penalties for their commission. In their Lordships' opinion it no less empowers the Dominion legislature to direct how penalties for infraction of the criminal law shall be applied. It has always been regarded as within the scope of criminal legislation to make provision for the disposal of penalties inflicted, as innu­merable instances show, and the power to do so is, if not essential, at least incidental, to the power to legislate on criminal matters for it may well go to the efficacy of such legislation. If the power to direct the manner of application of penalties were to be dissociated from the power to create such penalties and were to be lodged in another authority, it is easy to see how penal legislation might be seriously affected, if not stultified.

Section 653 is at the heart of the compensation provisions of the Criminal Code, and the question of its validity is a matter of first instance in this Court. We have Iong abandoned the notion expressed in the judgment of the Privy Council in

[Page 951]

In re Board of Commerce Act, 1919, and the Combines and Fair Prices Act, 1919[3], at p. 198, that there is some fixed "domain of criminal jurisprudence". The Privy Council itself had a different view in Attorney-General of Ontario v. Hamilton Street Railway[4], at p. 529, where it noted that it was "the criminal law in its widest sense" that fell within exclusive federal competence. If that was true of the substantive criminal law, it was equally true of "procedure in criminal matters", which is likewise confided exclusively to Parliament. Indeed, Duff C.J.C. said in Provincial Secretary of Prince Edward Island v. Egan[5], at p. 401, that "the subject of criminal law entrusted to the Par­liament of Canada is necessarily an expanding field by reason of the authority of the Parliament to create crimes, impose punishment for such crimes and to deal with criminal procedure." We cannot, therefore approach the validity of s. 653 as if the fields of criminal law and criminal procedure and the modes of sentencing have been frozen as of some particular time. New appreciations thrown up by new social conditions, or reassessments of old appreciations which new or altered social con­ditions induce make it appropriate for this Court to re-examine courses of decision on the scope of legislative power when fresh issues are presented to it, always remembering, of course, that it is entrusted with a very delicate role in maintaining the integrity of the constitutional limits imposed by the British North America Act.

We are concerned in this case not with a novel form of relief to persons aggrieved by another's criminal conduct, resulting in the loss or destruc­tion of property, but with one in respect of which the novelty is that no challenge has come to this Court on the matter until now. Certainly, as has been often said, time does not validate a statute which is unconstitutional, but I point out that there is an instance in our law where time has invalidated a statute which was generally regarded as constitutional. That was the result of the Margarine

[Page 952]

Reference, Reference re Validity of Section 5(a) of the Dairy Industry Act[6], holding that federal legislation prohibiting the manufacture, possession and sale of margarine, (first enacted in 1886 when there was concern about the nutritional quality of the product and its danger to health) could not be sustained as an exercise, inter alia, of the federal criminal law power because in the intervening years, changes in methods of manufac­ture and of ingredients had removed any danger to health. Correlatively, it seems to me, the passage of time has resulted in new approaches to criminal law administration so as to confirm the propriety of the long-standing provisions of the Criminal Code for compensation and restitution.

I would refer in this connection to Working Paper 5 of the Law Reform Commission of Canada, October 1974, where in dealing with res­titution (which it conceives in wide terms covering and going beyond what is embraced by ss. 653, 654 and 655), the Commission says (at p. 6) that "not only is restitution a natural and just response to crime, it is also a rational sanction". In propos­ing that "restitution ... become a central consider­ation in sentencing and dispositions" that it should merit foremost but not exclusive consideration, the Commission made a number of relevant observa­tions (at pp. 7-8):

Recognition of the victim's needs underlines at the same time the larger social interest inherent in the individual victim's loss. Thus, social values are reaf­firmed through restitution to victim. Society gains from restitution in other ways as well. To the extent that restitution works toward self-correction, and prevents or at least discourages the offender's committal to a life of crime, the community enjoys a measure of protection, security and savings. Depriving offenders of the fruits of their crimes or ensuring that offenders assist in compen­sating victims for their losses should assist in discourag­ing criminal activity. Finally, to the extent that restitu­tion encourages society to perceive crime in a more realistic way, as a form of social interaction, it should lead to more productive responses not only by Parliament,

[Page 953]

the courts, police and correctional officials but also by ordinary citizens and potential victims.

Until the decision of the majority of the Manito­ba Court of Appeal in the present case, there has not been any pronouncement by a court in this country in challenge of the validity of ss. 653, 654 and 655. There are decisions which have either assumed the validity of s. 653, or have been silent on it, as for example, Regina v. Scherstabitoff[7], but where validity has been faced it has been affirmed and I shall come to those cases shortly. At the same time, other types of sanctions than the traditional ones of imprisonment and of fines payable to the Crown have been enacted and sustained upon a challenge to their constitutionality. To take three examples, in Industrial Acceptance Corpo­ration Ltd. v. The Queen[8], this Court upheld the validity of a provision for forfeiture of property used in the commission of a criminal offence, whether or not the property was owned by a person other than the one convicted; in Goodyear Tire & Rubber Co. of Canada Ltd. v. The Queen[9], this Court sustained the validity of a provision for a prohibitory order against the continuation or repe­tition of certain offences defined in the provision, the order to be in addition to any other penalty imposed on the person convicted and to be one which could be directed to the convicted person or any other person and, as indicated in Sunbeam Corporation (Canada) Ltd. v. The Queen[10], one which may prohibit the repetition or continuance of the offence in respect of other persons than those who were the victims under the charge or by other means than those condemned under the par­ticular conviction; and in Regina v. Groves[11] O'Driscoll J. of the Ontario Supreme Court upheld the validity under the federal criminal law power of s. 663(2)(e) of the Criminal Code which provides that the Court may include in a probation order a requirement that the convicted person

[Page 954]

 

"make restitution or reparation to any person aggrieved or injured by the commission of the offence for the actual loss or damage sustained by that person as a result thereof'.

I wish to dwell for a moment on s. 663(2)(e) because, in the course of argument on this appeal when reference was made to it, there seemed to be little challenge to its validity on the view that provision for restitution or reparation was so inte­grally a part of the sentence as to distinguish it from s. 653; and there was the further point that a wilful breach of a probation order was an offence under s. 666(1) and punishable on summary conviction.

Apart from the question of enforcement under s. 666(1) (which may be contrasted with the enforcement open under s. 653 by filing the compensation order in a superior court with effect as a judgment thereof), I see no difference in principle between a provision for reparation in a probation order, as an additional term of what is in effect a sentence, and a direction for compensation or reparation by an order under s. 653 which, if made at all, must be made at the time sentence is imposed. I find little to choose, except on the side of formality, in the requirement of s. 653 that the compensation order must be based on an application by the person aggrieved rather than be made by the Court suo motu as is apparently, but only apparently, the position under s. 663(2)(e).

The reasons of the majority of the Manitoba Court of Appeal against the validity of s. 653 are those of Matas J.A., concurred in by Hall J.A., and fortified by additional concurring reasons of O'Sullivan J.A. I note that O'Sullivan J.A. agreed that monetary penalties may constitutionally be directed for the benefit of victims of crime because, in imposing a pecuniary penalty which would benefit the victim, the Court would still be imposing a penal sanction, that is to say, punishment, and the compensation would flow from the imposition of the penalty. Why then would the learned Justice hold s. 653 to be invalid? He stated his reasons as follows:

[Page 955]

The vice of sec. 653, in my opinion, is that it does not regard the payment of an amount equivalent to damage done by a criminal as part of a punishment which will vary with the circumstances of the offence and the offender. It seeks to confer directly on the victim of a crime a right to claim compensation from the wrongdo­er. The section, if valid, would confer on the victim of a crime an additional and alternative civil right to sue in a criminal court for that for which he already has the right to sue in a civil court. In my opinion, this consti­tutes an invasion of the field of property and civil rights and is beyond the powers of Parliament.

Matas J.A. acknowledged in his reasons that an order for compensation under s. 653 is part of the sentencing process but qualified this observation in two ways; first, by pointing out that, although it is included, along with orders under ss. 654 and 655 and dispositions under s. 663(1), in the definition of "sentence" under s. 601, this provision occurs in a part of the Criminal Code relating to appeals; and, second, this inclusion in a definition does not itself determine validity, nor is validity established by the fact that an order under s. 653 is, even apart from the definition in s. 601, made part of the sentencing process under its very terms, since it becomes necessary, in either case, to decide wheth­er it can validly be made part of the sentencing process under the federal criminal law power.

I find these reservations in turn diluted by the agreement of Matas J.A. with the view of Haines J. in Re Torek and The Queen[12] that compensat­ing victims of crime is a valid object in sentencing. I am unable to appreciate, therefore, why there should be any doubt about the validity of a com­pensation provision, tied to the sentencing process as is s. 653, unless refuge is taken in a renewal of a notion that there is a proper domain of criminal law which forecloses an extension of the scheme of sanctions, although, admittedly, there is a rational connection between that part of s. 653 which is challenged and that part which is valid: see Papp v. Papp[13], at p. 336.

[Page 956]

Re Torek and The Queen, supra, appears to contain the most extensive consideration of the issue under review prior to the conclusions of the Manitoba Court of Appeal in the present case. It is relied on heavily by Monnin J.A., Guy J.A. con­curring, in the dissenting reasons. The Torek case carne before Haines J. on a motion for certiorari by a convicted person to quash a compensation order against him in favour of the victim. (I note in the reasons that the order was sought by the Crown Attorney acting on behalf of the victim.) I reproduce certain portions of the reasons in Torek that sum up most of the considerations, pro and con, that were urged in the argument in this Court. At pp. 298-9 Haines J. said this:

Counsel for the applicant argued forcefully that s. 653 is really legislation pertaining to property and civil rights and falls within the ambit of s. 92(13) of the British North America Act, 1867, rather than criminal law. Counsel pointed out that under s. 653, the accused is deprived of many of the protections which he would have in an ordinary civil action. For instance, the defendant does not really have notice of the claim beforehand and cannot defend it properly. He has no right to discovery by which he could attempt to elicit proper proof of value of the articles which allegedly have been stolen. In the present case, one of the articles allegedly stolen by the applicant was a ring owned by Mrs. Kaminsky. The value of that ring was placed at $1,500, but no proof of purchase or of the value of the ring was led before the Court. In arriving at the sum of $4,377.50, His Honour Judge Reville clearly accepted Mr. Kaminsky's testimony as to exactly what was stolen in cash, the ring and liquor. The applicant argues that had Mr. Kaminsky been forced to undertake a civil action to recover the sum, he would have been forced to prove his loss in a stricter manner. However, under s. 653, all that the complainant need do is merely testify as to value and the accused cannot really disprove it. In other words, the protection afforded to a defendant by the Judicature Act, R.S.O. 1970, c. 228, and the Rules of Practice, are removed, but the consequence is really the same in the sense in that the complainant gets what is, in effect, a judgment, which by s. 653(2) can be enforced in the provincial superior Courts in the ordi­nary manner.

I do not think that there can be any doubt that the right to bring and defend an ordinary civil action is a civil right, which is within the competence of provincial legislation. Nor can there be any doubt that in these

[Page 957]

circumstances, Mr. Kaminsky could have commenced an action against the applicant. However, it does not follow that the federal Government is entirely without power to order restitution or compensation in some circumstances.

In my view, proceedings under s. 653 can be con­sidered to be part of the sentencing process. It is worth noting that in s. 601, which deals with appeals on indictable offences, the word "sentence" is defined to include an order made under s. 653. It seems to me that it is a valid object in sentencing to prevent a convicted criminal from profiting from his crime by serving a jail term and then keeping the gains of his illegal venture. Counsel for the applicant admitted that it would be proper for the order complained of to have been made as a term of probation, pursuant to s. 663(2)(e) and (h) .. .

I fail to see that there is any meaningful distinction between an order requiring an accused to make restitu­tion or reparation as set out in s. 663(2)(e) and an order requiring an accused to pay by way of satisfaction or compensation as set out in s. 653(1).

More than fifty years ago, Perdue C.J.M. in Rex v. Cohen and Miller[14], came to a similar conclusion in the Manitoba Court of Appeal, saying, with respect to the provisions for restitu­tion and compensation, that the matters dealt with in the relevant provisions "seem to me to be inci­dental to the exclusive legislative authority of Par­liament over criminal law and procedure in crimi­nal cases and therefore within its power" (at p. 1127). Matas J.A. referred briefly to Rex v. Cohen and Miller but refused to regard it as an authority for holding s. 653 to be valid, probably because Perdue C.J.M. was the only member of the Court who took the constitutional point and, in any event, his pronouncement on it was obiter.

In Iine with the view taken by Haines J. in Re Torek and The Queen, supra, is the judgment of Hugessen A.C.J. in Turcotte c. Gagnon[15], which arose by way of an application to enter as a judgment of the Superior Court of Quebec an

[Page 958]

order for compensation made under s. 653 against a convicted person in favour of his victim. In sustaining the validity of the compensation order and allowing it to be entered and enforced as a judgment of the Superior Court, Hugessen A.C.J. made two points: first, the fact that Parliament has made the compensation order enforceable as a judgment in a civil action is more a call on the administrative side of the Superior Court than on the judicial side but it is, in any event, a means open to Parliament to provide for the execution of an order validly made; and, second, the compensa­tion order may be regarded as a fine or penalty. His reasons contain the following observations (at pp. 317-318):

In my view, an order for restitution to the victim of a crime is not only incidental to criminal law and proce­dure; it may be an inherent part of the sentencing process. While it may be true that, historically, the Common Law did not recognize compensatory orders as being part of the criminal process, I can see no reason why appropriate legislation within the exercise of the criminal law power should not render them so.

…

In my opinion, Parliament has attempted to provide for such compensation, albeit in an imperfect and partial manner, by the provisions of section 653. As is made clear by section 601, an order under section 653 is a part of the sentence rendered by the criminal court. Proceedings such as the present ones taken in a civil court in order to effect the execution of such an order do not cause it thereby to lose its criminal law character. In effect, all that Parliament has done is to impose upon the provincial superior courts, which are equipped for such purpose, the duty of providing for the execution of an order already given by a court of competent jurisdic­tion. As already stated in the present judgment, the function of the civil court in such a case is not so much judicial as administrative and I would have no right, on a petition of the present sort, to vary the order made by the Court of Sessions of the Peace even were I minded to do so.

That Parliament may, by appropriate legislation, vest in a provincial superior court a jurisdiction which it did

[Page 959]

not possess at common law has been established almost since the time of Confederation... .

I regard the point taken by Hugessen A.C.J. with reference to the enforcement procedure under s. 653 as a central one, having regard to the position of the majority of the Manitoba Court of Appeal in the present case. It is not unusual for Parliament to invoke the aid of the provincial courts for the effective administration of its legis­lation. A prime example is in the field of bankrupt­cy where Parliament has enacted not only a com­prehensive statute on the substantive law but also has provided for rules of procedure which are administered in the provincial courts. A good deal was made by those attacking the validity of s. 653 of the provision therein for filing and entering a compensation order as a judgment of the provin­cial superior court. This, to me, as it was to Justice Hugessen, is machinery which cannot control the issue of validity.

The Criminal Code exhibits another illustration in ss. 656 and 657 of the resort to provincial courts for enforcement of criminal court orders. Those sections deal with the imposition of costs in de­famatory libel prosecutions, and authorize the party in whose favour costs are awarded to enter judgment for the costs by filing the order in the superior court of the Province in which the trial was held, and the judgment is to be enforceable in the same way as if it were a judgment in a civil proceeding.

In his extensive reasons for judgment, Matas J.A. adverts to various considerations affecting the applicability of s. 653 and draws an adverse consti­tutional conclusion when comparisons are drawn between the procedures in a civil action for damages and the relative position of the accused as a defendant in such an action and his position as a convicted person against whom an order is sought under s. 653. I do not disagree that in assessing constitutionality there is merit in such an approach, but relative advantages in applicable procedures cannot, in my opinion, be determina­tive of validity where the primary consideration is a more functional one, with regard being had to the object of the impugned legislation and its

[Page 960]

connection with other admittedly valid aspects of the criminal process. It appears to me that in his stress on the comparisons above noted Matas J.A. has put answer before question in remarking that "a compensation order which is invalid as an unwarranted invasion of provincial jurisdiction does not become valid because of the objective in preventing a criminal from profiting from his crime". In my opinion, the issue before us has been met by Monnin J.A. in his dissenting reasons where he said this:

... In pith and substance section 653 is part and parcel of the sentencing process set out in The Criminal Code of Canada. If it were not, the hands of our Courts would be sadly tied and the victims of crimes would of necessi­ty have to seek recovery of property or moneys illegally taken away from them through civil courts on the basis that one cannot mix that which is criminal with that which is civil and on the further basis what provincially appointed judges are not fit persons to deal with matters of civil law. Can one think of a more ridiculous proposi­tion and one bound to bring the entire legal process—already badly challenged—in disrepute? Distinctions for the sake of distinctions have no place in courts of law.

I agree with his conclusion that s. 653 is valid as part of the sentencing process.

The constitutional basis of s. 653 must, in my opinion, be held in constant view by a judge called upon to apply its terms. It would be wrong, therefore, to relax in any way the requirement that the application for compensation be directly associated with the sentence imposed as the public reproba­tion of the offence. Monnin J.A. mentioned this in bringing compensation, restitution and probation into relation with one another, saying this in his reasons:

I see little or no difference between restitution and compensation as they are described in ss. 653 and 663. Compensation must be requested by the aggrieved person at the time sentence is about to be imposed and there is case law to the effect that a request for compen­sation must be made at the time of sentencing and cannot be made at a later date. Restitution can be ordered by the sentencing judge as a part of his total sentence if it forms part of the probation order. In ordering restitution the judge may act pursuant to a request by Crown counsel or by the aggrieved party or

[Page 961]

may also do so of his own free will without any request by anyone.

Restitution has often been equated with compensation except that there is a special section, namely, s. 653, which deals with compensation for loss or damage of property suffered by a victim. So much so that even this court, though differently constituted, in Regina v. But­kans, 18th June 1970 (not reported)—a court composed by Smith C.J.M., Dickson J.A. and myself—confirmed what we called in that particular case an order of restitution under s. 638(2)(e) of the Criminal Code, 1953-54 (Can.), c. 51, which section is almost identical to the existing s. 663(2)(e). In the Butkans case the court was actually dealing with a matter of compensa­tion, though it had been called an order of restitution. Was that bench acting per incuriam? I doubt it.

There is, moreover, another important aspect of s. 653 that must be kept in mind. The Court's power to make a concurrent order for compensa­tion as part of the sentencing process is discretion­ary. I am of the view that in exercising that discretion the Court should have regard to whether the aggrieved person is invoking s. 653 to empha­size the sanctions against the offender as well as to benefit himself. A relevant consideration would be whether civil proceedings have been taken and, if so, whether they are being pursued. There are other factors that enter into the exercise of the discretion, such as the means of the offender, and whether the criminal court will be involved in a long process of assessment of the loss, although I do not read s. 653 as requiring exact measurement. A plea of guilty will, obviously, make the Court's task easier where it is asked to make an order of compensation, but there is no reason why an attempt to secure agreement on the amount of loss should not be made where the conviction follows a plea of not guilty. It is probable, of course, that the likelihood of an appeal will militate against agreement but 1 would add that I do not regard it as a function of the criminal court to force agreement to enable it to make an order for compensation. What all of this comes to is that I agree with Matas J.A. that, constitutionality apart, an order for compensation should only be made with restraint and with caution.

The present case is one in which restraint and caution should have been exercised in a refusal to

[Page 962]

make a compensation order. The aggrieved com­pany instituted civil proceedings, for the recovery of money and merchandise stolen from it by the offenders, a day before criminal charges were brought against them. It continued with the civil proceedings, taking steps in connection therewith while the criminal proceedings were in progress, and even after the offenders had pleaded guilty to theft. The aggrieved company then decided to seek a compensation order under s. 653 and a dispute arose with respect to the amount of the loss, particularly in relation to the money that was allegedly stolen. So far as appears, the civil pro­ceedings were maintained while the application for a compensation order was pursued. The civil pro­ceedings were justified because of the desire to get a garnishment order. In all the circumstances, I would not interfere with that part of the judgment of the majority of the Manitoba Court of Appeal holding that the order for compensation should not have been made.

I wish to dwell further on the course of proceedings in this case in order to provide some guidance to trial judges on the proper application of s. 653 and in order to make clear that s. 653 is not to be used in terrorem as a substitute for or a reinforcement for civil proceedings. Its validity is based, as I have already said, on its association with the sentencing process, and its administration in par­ticular cases must be limited by that consideration.

What emerges from the facts here is that the T. Eaton Company sought to use the criminal process as a more expeditious means of recovering the money lost by the fraudulent activities of the accused. Its co-operation with the Crown during the early course of the criminal proceedings is understandable, but at the same time it was pursu­ing a civil remedy against the accused, and the civil proceedings had reached the stage of discov­ery when the accused came up for sentencing by the criminal court. Eaton's then joined in the criminal proceedings as an "aggrieved person", and it became evident immediately that the amount of the loss suffered by it was in dispute. The dispute was not resolved, as it would have been under the procedures available in a civil

[Page 963]

court, and the order for compensation made in the criminal proceedings was somewhat arbitrary as to amount.

Section 653 does not spell out any procedure for resolving a dispute as to quantum; its process is, ex facie, summary but I do not think that it precludes an inquiry by the trial judge to establish the amount of compensation, so long as this can be done expeditiously and without turning the sen­tencing proceedings into the equivalent of a civil trial or into a reference in a civil proceeding. What is important is to contain s. 653 within its valid character as part of the sentencing process and thus avoid the allegation of intrusion into provin­cial legislative authority in relation to property and civil rights in the Province. Although, as I have already noted, the Courts have recognized the wide scope of the federal power in relation to criminal law and criminal procedure, and although there is now a broad range of powers in a sentenc­ing court to deal with offenders, it nonetheless remains true that the criminal law cannot be used to disguise an encroachment upon provincial legis­lative authority: see Attorney-General for Ontario v. Reciprocal Insurers[16]; Reference re Validity of s. 5(a) of the Dairy Industry Act[17], at p. 50, aff'd sub nom. Canadian Federation of Agriculture v. Attorney- General for Quebec[18].

It must be obvious, therefore, that s. 653 is not the platform upon which to unravel involved com­mercial transactions in order to provide monetary redress to those entitled thereto as against an accused. The latter, too, may have a proper interest in insisting that civil proceedings be taken against him so that he may avail himself of the procedures for discovery and production of docu­ments, as well as of a proper trial of issues which go to the merit of monetary claims against him. Again, the criminal court cannot be expected to nor should it act under s. 653 if it would be required to interpret written documents in order to

[Page 964]

arrive at a sum of money sought through an order of compensation. So too, it would be improper to invoke s. 653 if the effect of provincial legislation would have to be considered in order to determine what order should be made. Indeed, any serious contest on legal or factual issues, or on whether the person alleging himself to be aggrieved is so in fact, should signal a denial of recourse to an order under s. 653.

There looms in this case an obvious question of the effect of a discretionary order for compensa­tion under s. 653 upon subsequent civil proceedings by the victim against the accused, if he has not been made whole by the order. Parliament has not purported to interfere with any right of civil recourse which thus remains open despite s. 653. What is involved is whether the obtaining of an order under s. 653 (not the mere application therefor) amounts to an election against civil proceedings or whether the order goes simply to quantum if civil proceedings are later taken. I am inclined to the view of an election as being consistent with the criminal law character of s. 653, but no argument was addressed to the Court on this point, the respondent being content with a submission in her supplementary factum that if s. 653 was valid, the trial judge's admitted discretion to make a com­pensation order should not have been exercised. It does not raise a constitutional issue and since the result here does not call for its determination, I prefer to leave it open.

I wish to advert to one further point and that is the question of appeal from an order for compen­sation. The filing of such an order in the provincial superior court does not, in my opinion, put in motion any civil proceedings other than those relating to enforcement. A compensation order, being included in the definition of "sentence" under s. 601 of the Criminal Code, is appealable as provided by that Code, and I would apply the principle of Pringle v. Fraser[19] to exclude any suggestion that civil appeal proceedings are open.

[Page 965]

Section 616 of the Criminal Code deals with the powers of a provincial court of appeal in respect of an order for compensation and provides for suspension of the operation of the order during the time it is appealable and until appeal proceedings, if taken, are concluded. Section 616(2) empowers the provincial court of appeal to annul or vary a compensation order, whether or not the conviction is quashed. It does not itself give a right of appeal, a view expressed on the then similar English legis­lation in Rex v. Elliott[20]. It appears, therefore, that only the accused has a right of appeal against a compensation order, a right given by s. 603(1)(b), and not the person in whose favour the compensation order is made. This, in my view, is consistent with the character of such an order as part of sentence.

I would, accordingly, allow the appeal, in part, set aside the order of the Manitoba Court of Appeal in so far as it interfered with the order for restitution and restore that part of the composite order made by the trial judge. In accordance with the terms of the order of this Court granting leave, the Attorney-General of Manitoba will pay the costs of the respondent in this Court. There will be no other order as to costs.

The judgment of Pigeon, Beetz and Pratte JJ. was delivered by

PIGEON J. (dissenting in part)—This is an appeal by leave of this Court from a judgment setting aside orders of compensation and restitu­tion, made under ss. 653(1) and 655(1) of the Criminal Code respectively against the respondent accused, Anne Zelensky. These orders were in favour of The T. Eaton Company Limited ("Eaton") which was granted leave to intervene in this appeal by order of the Chief Justice. The majority in the Court of Appeal of Maniboba having expressed the view that s. 653 of the Criminal Code was ultra vires, notice of this con­stitutional question was given. The Attorney Gen­eral of Canada has intervened to support the con­stitutionality of s. 653 and the Attorneys General of Quebec and of Alberta, to attack it.

[Page 966]

I find it necessary to state the facts in some detail and in chronological order. I should point out that 1 am not doing this on the basis of evidence, because none was given in this case, but on the basis of unchallenged statements by counsel to the trial judge and, with respect to the course of the criminal proceedings and of the civil action by Eaton against the accused, on the basis of state­ments in the reasons of Matas J.A. for the majori­ty in appeal.

The accused is a middle-aged married woman, who for some ten years, had been employed by Eaton as adjuster in the catalogue sales operation. As such, she had authority to direct on her signa­ture payments by money order up to $250 on each claim, she could also order the delivery of mer­chandise. On December 17, 1975, the accused was turned over to the police in the Eaton's catalogue sales office. Under charge and caution she made the following statement:

"It was about a year ago that I started doing this. I don't know why. I just made the money orders out, cashed them at my bank, sent them to my house, some of them, and later banked them. My husband told me I was an idiot and would get caught and pay for it. There was very little merchandise, mostly money orders that I did. I have no idea of what amount. It was mostly money orders. My husband has been after me to stop. The money orders for Fedak and Marquardson, I just put in their address and their name. I would tell them the order was cancelled or whatever and the refund was coming to your place. I would then go to their place, pick up the money orders, sign them and cash them. Some I made out to myself and made them payable to the Royal Bank, Portage and Edmonton. During my lunch hour I would go there and deposit them towards the loan there. Some I made out in my daughter's name or my sister's name. I would sign them and deposit them into my husband's and my joint account at McPhillips and Mountain. My sister, Nettie Fedak, would receive money orders that I sent to her house. I would always go down to her house and pick up these money orders. I would tell her this was a cancelled order or something and she was ignorant of the fact I was involved in a fraud or whatever. I don't remember, but she may have cashed one of the money orders, but I have gone to her house after and picked up the money. That would be about the only time I would have done this."

The same day the accused was arrested, Eaton filed a statement of claim against her in the Court

[Page 967]

of Queen's Bench for $18,564.13 and obtained a garnishing order under which $10,563.50 was seized in a bank account of hers and paid into court. The following day, the accused and her husband were charged by the police with defraud­ing Eaton to a value of $18,000 more or less and a day later some relatives of the accused were charged with receiving stolen goods. It also appears that the police had seized from the resi­dence of the accused and of a relative forty-one items of merchandise, mostly furniture and other household goods.

On February 3, 1976, the accused pleaded not guilty and the preliminary hearing was scheduled for April 14 and 15, 1976.

On February 20, counsel for the accused requested particulars of the civil claim from coun­sel for Eaton.

On February 28, 1976, a charge of fraud was laid against another relative of the accused.

On April 7, a new charge was laid against the accused, her husband, her daughter, her son-in-law and her sister, of theft of money to the amount of $18,000 more or less and merchandise to the amount of $7,000 more or less, the property of Eaton.

On April 12, particulars of the claim in the action were supplied by counsel for Eaton to coun­sel for the accused. It was stated that these listed 111 money orders some of which were payable to the accused, to her husband, to her sister, to her daughter and to her son-in-law, for a total sum of $11,064.20 and the others were made payable to the Royal Bank of Canada in the amount of $7,486.26 which went to the credit of the accused and her husband.

On April 14, as a result of plea bargaining, the accused and her husband elected to be tried before provincial Judge H. Collerman. They pleaded guilty to the charge of theft of money to the amount of $18,000 "more or less" and merchan­dise to the amount of $7,000 "more or less". All the other charges were stayed. On being asked why advance notice had not been given so that other cases could be scheduled for the two days reserved

[Page 968]

for the preliminary hearing, counsel for the Crown said:

I might indicate, your honour, that this matter has been under discussion for the period of approximately one month now, and I would certainly not in any way indicate that there has been any dragging by either party. It was just a matter of resolving issues, going in detail through the evidence and then sitting down and having some serious talks with clients... .

... A good number of exhibits which form a crucial part of our negotiations were not received until approximate­ly a month ago from out east and until they arrived nobody could really sit down and start talking.

After informing the Court that counsel for Eaton was present for making an application for a compensation order she added:

I might also indicate at this point that as between Mr. Ornstein (counsel for the accused) and myself, at any rate, there is no agreement as to the amount, actual amount of compensation owed. And the figure that is laid in the Information is $18,000 more or less but there is a considerable variance in where he stands and where I stand, and I will just apprise the Court of that fact.

Counsel for the accused spoke again saying:

... although there is a plea of guilty to the sum of $18,000 more or less, merchandise to $7,000.00 more or less, in no way is that to be construed as an admission by the Defendants that they are liable in the sum of $18,000.00 and $7,000.00. It is an amount of any where between $200.00 and $25.000.00 and it is something that is to be either worked out or it can be agreed upon or it could be adjudicated on by either this Court or the Court of Queen's Bench... .

The judge interjected:

… If there is a discrepancy to that extent then I am somewhat concerned about there being a plea of guilty entered....

Counsel for the accused ended up saying:

Now, the Defendants, by pleading guilty, have admit­ted the charge of Theft of an amount of $18,000.00 more or less. We don't know how much that is and we want the complainant to prove how much that is. And, we are really leaving it up to the Plaintiff to prove this claim.

Counsel for Eaton said:

These discussions may all be resolved.

[Page 969]

Counsel for the Crown then gave a statement of the facts including some details of the various fraudulent schemes whereby the money and the merchandise had been obtained and the matter was adjourned to April 29, 1976, for a pre-sen­tence report.

On April 28, 1976, a statement of defence was filed in the action as to which Matas J.A. says:

… counsel for appellant said that the defence was intended to admit liability but dispute quantum, but that is not in accord with my reading of it.

The following day Judge Collerman was informed that counsel for the accused had refused to meet with counsel for Eaton because the latter did not provide all the documentation that was requested in addition to the money orders. There was a further adjournment for medical reports on the accused's condition. Judge Collerman was prompted to say to counsel to the accused:

... This is not a direction, perhaps, just an observation. The Police investigation has led to the charging of Theft in the approximate amount of $18,000.00 and you have, on behalf of your client, entered a plea of guilty to that particular charge. I would assume that prior to having entered that plea or prior to having your client enter that plea, you must have satisfied yourself, to some extent, at least, of the facts and of the evidence available to the Crown supporting that charge. Otherwise, I wouldn't think that you would enter that plea.

That being the case, and bearing in mind that the Crown has access to the specifics of the money orders, and certainly Eatons have access to and have provided you with these specifics as to the money orders, I would suggest, very strongly, that the two of you get together between now and remand date and perhaps co-operate a little more than both of you have to date.

There is some indication before me that there is evidence to support the Theft of $18,547.07 in money orders. I must agree with some of what Mr. Flett has said, that with respect to the additional information that you are seeking, your client would be in the best position to provide you with that information and not Eatons or counsel for Eatons.

That is merely an observation, and, perhaps we could deal with the matter on the 27th of May.

[Page 970]

What then happened in the civil action is thus stated in Matas J.A.'s reasons:

April 30, 1976—Counsel for the company was served with a notice for discovery of documents and an appointment for examination for discovery of an officer of the company to be held on May 12, 1976.

May 6, 1976—Counsel for the company wrote to coun­sel for Anne Zelensky advising of their intention to amend the statement of claim and requesting consent to the amendments. The amendment was to add a claim for conversion of merchandise in the amount of $7,000.00 more or less and to add Steve Zelensky as a defendant in respect of the total $25,000.00. The latter also proposed a meeting of counsel and clients to review the documentation of amounts claimed.

May 11, 1976—Counsel for Anne Zelensky replied, reviewed the proceedings to date and advised that examination for discovery had been rescheduled for June 29, 1976.

May 18, 1976—Notice of motion was filed, returnable on May 21, 1976, to compel production of documents or to have the statement of claim dismissed. The motion was adjourned sine die at the request of counsel for the company. Counsel for appellant understood that the statement of claim would be amended, amended statement of defence would be filed and examination for discovery of an officer of the company would be held on June 29, 1976.

In April and May, counsel for the company furnished documents to appellant's counsel in support of the com­pany's claim. Affidavit on production of documents was not filed.

The hearing on sentence took place on June 4, 1976. Judge Collerman had a pre-sentence report and several medical reports. At the outset, he asked for information as to the outcome of his suggestion. Counsel for the accused said:

... There are still negotiations going on between counsel for both sides. There has been obtained a date for examination for discovery of one of the officers of the Eatons Company and that will be taking place in a couple of weeks, I don't have the exact date and, however, your honour, there is no question there is a defence filed. The defence merely questions the amount of quan­tum and not the liability, so this is, it's all the matter of quantum that's still in issue. However, I can assure your honour that monies have been paid into Court, some $12,000.00 I believe, under a garnishing order. A clear Certificate of Title of the accuseds' home has been lodged with the Court which can always be used to raise

[Page 971]

any restitution. There is no question that as soon as the quantum is settled, a certain amount is fixed, that restitution will be made. The money is available for restitution, it's just a question of how much.

Counsel for Eaton replied:

... There are no negotiations going on... .

... Statement of defence admits only, paragraphs one and two setting out the parties and it denies that the defendant Mrs. Zelensky is indebted to the plaintiff to the straight proof thereof. [sic]

Counsel for the Crown made on that subject the following observations:

In so far as cooperating in terms of putting Eatons back into the position that it was in so far as restitution is concerned, I'm not going to get involved in the amounts or the how much. It may be that twenty-five thousand more or less may be out by a couple of hundred dollars. The only money that was paid into Court had nothing to do with any voluntary act of Mrs. Zelensky's.

... What I am saying is this, your honour, that the only money that Eatons has in Court they have because they slapped a garnishing order against her bank account on exactly the date that the police affected the arrest of Mrs. Zelensky, not because of any show of good faith or I am going to help you or I am going to assist you. As a matter of fact, in so far as making things easy, being cooperative and putting people back in the position that they would have been but for her illegal act, she stood here at the time of her guilty plea and through counsel said, we put them to the strict proof of every penny except that it's over two hundred dollars. That's been the degree of cooperation shown.

... If Mrs. Zelensky took the point of view that it wasn't eighteen thousand, it was only around fifteen thousand, she could pay fifteen thousand into Court, they could fight later about the three thousand. Not one penny has voluntarily been paid over. Not one piece of merchan­dise has voluntarily been replaced.

At this point Judge Collerman remarked:

So in effect what you're saying is that the actions of the accused after the discovery of the offence is an indication of her criminality.

Counsel for the Crown answered:

Yes, your honour, very very much so. And it contin­ues, to right to this day it continues.

[Page 972]

While counsel for the accused was speaking, Judge Collerman said to him:

... I am advised there were  111 money orders amount­ing to the sum in question, I believe if I have it exact, $18,547.07, albeit that the Information shows $18,000.00 more or less, but that each money order, or the total sum of each of the money orders upon which her endorsement is shown amounts to that sum. What can you say with respect to that.

The answer was:

All I can say with respect to that, your honour, is that her position is that certain of those money orders were legitimate and were not fraudulently or illegally obtained and it's simply a working out of the quantum and I'd rather not try to get into that, that mess at this stage.

... If there's such great certainty as to the quantum, I put it, I question why the Crown was not able to specify in the charge how much it was, why the Crown could not say anything more than $18,000.00 more or less and that is my only comment with regard to that, your honour.

In conclusion he said:

... I submit, with respect, that the appropriate disposi­tion of her case is a period of suspension or a conditional discharge followed, concurrent with probation, concurrent with counselling for both her and her husband and if your honour is inclined to make an order of restitu­tion, that will certainly be complied with; if not, there is another Court that can certainly order restitution and that will be done.

On his being asked by the judge:

You're talking about restitution as opposed to com­pensation.

He answered:

No, I'm using those words interchangeably.

Counsel for Eaton concluded his submission by saying:

....I think it's in the interest of all parties that there be no further proceedings in any Court with respect to this matter, to order compensation and restitution. I am authorized to say, your honour, that because the amount is $18,000.00 and $7,000.00 more or less, that that certainly gives your honour a leaway and to the extent that the amount is somewhat less than $18,000.00, we take no objection to it... .

[Page 973]

Thereupon a second counsel for, the accused said after some references to the civil action:

I understand there is to be an amended statement of claim, an amended statement of defence in reply and an examination for discovery has been rescheduled, post­poned at the request of Mr. Labman (counsel for Eaton) to June the 29th and that examination is forthcoming. I submit, your honour, that I notice in the first transcript that your honour referred to a multiplicity of actions. You were concerned, your honour, about the fact that there is another forum dealing with this matter, and I respectfully suggest that the Court of Queen's Bench can explore the matter thoroughly and exact amounts determined at that time.

Thereupon the Provincial Judge said, as quoted

by Matas J.A.:

Well, since you are on your feet, perhaps you can comment on the following. I am becoming increasingly concerned about one particular area, and I feel that perhaps counsel are not being as cooperative in this Court as they could be. I am advised that there are 111 money orders and that these money orders bear the endorsement of the accused Zelensky and that the total amount of these money orders comes to eighteen thousand, seven hundred and some odd dollars. I am aware further, and 1 have heard from Mr. Labman to the effect that legitimate purchases by Zelensky amounted to a hundred and seventy some odd dollars and that proof could be made of them. I have asked on repeated occasions that counsel get together for the purpose of my being better able to deal with the application for compensation in this Court, regardless of what other application may be taken in some other forum, and there appears to have been very little in the way of coopera­tion, and I am referring specifically from Mr. Ornstein's office. I am faced at this point in time with evidence of all those money orders endorsed by the accused amount­ing to eighteen thousand plus dollars, combined with, and this cannot be overlooked, combined with a plea of guilty to an offence of theft of eighteen thousand dollars more or less, plus the certain amount of merchandise that was stolen. Now bearing that in mind, and keeping in mind completely that there is an application in another forum and there has been an application for compensation made before me in this Court, there is evidence before me in this Court to support that applica­tion. I have, short of begging counsel, I have requested time and time again for them to get together and come up with the figure which the two of them would be in agreement with, and they are no closer to agreement now than they were at the commencement, except for

[Page 974]

the fact and I say, I have before me the plea, and I have before me the evidence, and I might indicate that I have given this matter an awful lot of thought over the past few weeks and I came to the conclusion that were the matter not improved, that is had the matter not reached some finality through the cooperation of counsel, then I was going to rely on the plea of guilty to the offence of theft, combined with the information which has been provided me and I am prepared on today's date to make an order with respect to compensation. As to the amount, I will deal with that in a short while. I just feel that there has not been the degree of cooperation that should have existed in this particular matter. I just wanted that on the record.

The trial judge then refused to allow further comment by accused's first counsel and proceeded to deliver his sentence. He gave a suspended sen­tence to accused's husband but he meted out to her a sentence of imprisonment for two years less a day. After a brief adjournment to enable the accused to regain her consciousness, the sentence of imprisonment was completed by the addition of one year of supervised probation. The judge then said:

Dealing with respect to the application for order of compensation, pursuant to the provision of Section 653, I am satisfied that a case has been made out for such an order for compensation and I am making that order for compensation in the sum of $18,000.00. In addition, there will be an order for restitution of the recovered goods. That is the disposition of the Court.

It was also specified that the two orders were made with respect to both accused.

On appeal it was first unanimously decided on October 27, 1976, that the incarceration and pro­bation sentence should be affirmed. Later, on November 29, a majority judgment was delivered by Matas J.A., Hall J.A. and O'Sullivan J.A. concurring, Monnin J.A. and Guy LA. dissenting. Besides statements of the facts, the reasons on both sides were devoted mostly to a consideration of the constitutionality of s. 653 of the Criminal Code which was challenged by counsel for the accused and defended by counsel for the Attorney General of Canada who has intervened in the case. The majority expressed the view that s. 653 was ultra vires, the minority that it was valid. However, the majority also found, contrary to the

[Page 975]

conclusion of the dissenting judges, that in any case the orders of compensation and of restitution had been improperly made. Matas J.A. after citing a comment made in England under somewhat different statutory provisions, said:

… see Dashner, supra (R. v. Dashner, [1974] 2 W.W.R. 11) at p. 13, where the court approved the following quotation from Regina v. Stewart (1968), 63 W.W.R. 442 at p. 445, [1968] 4 C.C.C. 54:

… It must be remembered, however, that it is most important that the sanctions of the criminal law and its administration should not be used, or be permitted to appear to be used, for the purpose of enforcing civil obligations...."

Counsel for the Crown said, in this court, that pos­sibly the learned provincial court judge was frustrated because counsel had not come to agreement on the matters in dispute. This is not a justification for making an order for compensation or restitution. Courts are provided to decide disputes where parties cannot agree. In my view, it is improper to use the powers of the criminal process as means of enforcing a financial settlement.

In my respectful view, in light of the circumstances outlined above, the learned trial judge was wrong in exercising his discretion in making an order under sec. 653(1) and was wrong in ordering restitution under sec. 655(1).

If it should turn out that appellant's claims are frivo­lous, the Court of Queen's Bench can take care of that matter by its power to award costs against an unsuccess­ful party, and by its power to allow interest to a success­ful party where payment of a just debt has been improp­erly withheld.

In dissent Monnin J.A. said:

The transcripts of the proceedings on April 14th, 29th and June 4th, 1976, consisting of more than 125 pages, are no masterpiece of clarity. Counsel seemed to have confused the Court more than helped it to obtain the precise information in order to arrive at the exact amount of the theft. Throughout the proceedings there appears to have been a strong reticence on the part of various counsel for the accused who appeared throughout the three hearings and on the part of various counsel appearing on behalf of T. Eaton Co. to come out clearly with the exact facts. The Court was not provided with a positive statement of the exact amount involved, although Collerman, P.J. attempted to the best of his ability to get the facts from counsel. That is a factor in this case and counsel are responsible for that situation.

[Page 976]

Nevertheless, it is clear in my mind that police investi­gation has led to a charge of theft of money in the approximate amount of $18,000.00 and the theft of merchandise in the approximate amount of $7,000.00 and that throughout the proceedings, advised by counsel, the accused entered into a plea of guilty of these approx­imate amounts.

Words mean something. Persons do not lightly plead guilty to theft of moneys and merchandise. When they admit to theft of such large amounts, even if the amount is "more or less", he or she must mean it, otherwise the entire system of entering pleas in criminal matters is frustrated and appears ridiculous. The plea entered dealt with theft of moneys in the amount of $18,000.00 "more or less" and theft of merchandise in the amount of $7,000.00 "more or less". Counsel for the accused and the aggrieved person failed to supply the Court with the exact amount and they cannot be surprised if, at the conclusion of three hearings, they find their clients with an order of compensation for $18,000.00 and an order of restitution of the goods recovered in the amount of $7,000.00, this despite the fact, that counsel for the accused indicated that some of the goods recovered may have been legitimately purchased by his client. That could easily have been ascertained before the plea and before the hearings.

In my view the last words of Monnin J.A. indicate what should have been done. A judge has a discretion to exercise when a plea of guilty is tendered, he is not bound to accept it: Adgey v. The Queen[21]. When counsel for the accused took the position that, on account of the words "more or less", the plea of guilty meant a plea of guilty to anything between $200 and $18,000 and implied no admission of the amount stolen and counsel for the Crown on her part said there was a considerable variance in where he stood and where she stood, it should have been made clear that a plea of guilty means a plea of guilty of a definite offence. Where the offence is theft of money, the amount stolen is an essential element (Lake v. The Queen[22]). This does not mean that the words "more or less" vitiate the charge. The trial judge was quite correct in his view that those words imply only a narrow margin. However, what was said in this case made it clear that the accused did

[Page 977]

not acknowledge having stolen money and mer­chandise in the amount of approximately $25,000, but admitted only having stolen some merchandise and a substantial sum of money the amount of which she was unwilling to admit. The trial judge was quite correct in accepting the submission by counsel for the Crown that this attitude of the accused was proof of her continuing dishonesty, in other words, that she was unrepentant.

However, no matter how much this made accused's case unsympathetic and also reflected against counsel who co-operated in such tactics, it could not constitute a proper foundation for a compensation order. It is true that on account of its discretionary nature the sentencing process is traditionally permitted to proceed largely on the basis of information rather than on the basis of evidence. But the special nature of orders for compensation and for restitution requires that they be made only on the basis of evidence by admission or otherwise. What counsel for the accused said when suggesting a suspended sentence might by itself have been taken as a consent to the making of the orders. However, what was subsequently said by the second counsel made it clear that the accused was definitely unwilling to admit any indebtedness and intended to defend the civil action. It was an ill-conceived position: this was not a claim for damages on which liability may be admitted and the quantum debated; it was a matter of theft of definite sums of money and merchandise and no award of interest and costs would ever cover more than a fraction of the additional injury inflicted by stubbornly defending the civil action. If the accused was led to believe she could expect a suspended sentence with the possibility of holding up restitution by defending the civil proceedings, she was extremely ill-advised and the shock she suffered when sentenced to two years is readily understandable. All this, however, cannot justify the making of a compensation order without clear evidence of a definite amount by admission or otherwise.

With respect to the order for restitution, the situation is somewhat different. There were no civil proceedings pending, all the merchandise that

[Page 978]

the accused was charged with having stolen was seized by the police and nothing was said which might indicate that the plea of guilty to the charge of theft of merchandise to the amount of $7,000 more or less did not cover each of the articles seized. It should also be observed that this order of restitution was made under a section of the Code, the constitutionality of which was not disputed. I can see no reason for setting aside the order for restitution and I will note that the making of such order is not discretionary as the order for compen­sation, but is mandatory in the case specified in s. 655(1). I would therefore restore the order of restitution.

I have noted that in concluding the reasons of the majority Matas J.A. said:

The goods recovered shall remain in the custody of the police and the certificate of title shall remain with the court pending final disposition of the civil proceedings commenced by the company.

This appears to have been overlooked in the drafting of the formal order and to remedy this omission, I would direct that the judgment of the Court of Appeal be varied, not only to restore the order of restitution but also to provide that the certificate of title filed in the trial Court remain with the Court pending final disposition of the civil proceedings commenced by Eaton.

Usually this Court does not rule on constitutional questions when not necessary for the disposition of the case at hand. It has, however, sometimes departed from this practice when it appeared to be desirable in the public interest, such as in Provin­cial Secretary of Prince Edward Island v. Egan[23], and Switzman v. Elbling[24]. In the present case the constitutional question has been fully argued with the assistance of counsel for the attorneys general of Canada and of several provinces and we know there are other cases in which the Courts are awaiting our judgment on the constitutional ques­tion in respect of important applications under s. 653 of the Criminal Code. It is therefore desirable

[Page 979]

that a final decision be issued promptly on its constitutional validity. Section 653 in its present form reads:

653. (1) A court that convicts an accused of an indictable offence may, upon the application of a person aggrieved, at the time sentence is imposed, order the accused to pay to that person an amount by way of satisfaction or compensation for loss of or damage to property suffered by the applicant as a result of the commission of the offence of which the accused is convicted.

(2) Where an amount that is ordered to be paid under subsection (1) is not paid forthwith the applicant may, by filing the order, enter as a judgment, in the superior court of the province in which the trial was held, the amount ordered to be paid, and that judgment is enforceable against the accused in the same manner as if it were a judgment rendered against the accused in that court in civil proceedings.

(3) All or any part of an amount that is ordered to be paid under subsection (1) may, if the court making the order is satisfied that ownership of or right to possession of those moneys is not disputed by claimants other than the accused and the court so directs, be taken out of moneys found in the possession of the accused at the time of his arrest.

Subsections 1 and 2 have their origin in s. 836 of the Criminal Code of 1892 which became s. 1048 after the 1906 statute revision. The source is given as s. 4 of The Forfeiture and Felony Act, 1870 (33-34 Vict. U.K. c. 23). This was a United Kingdom statute which was not previously in force in Canada. The maximum amount which could be awarded was a hundred pounds. In the 1892 Criminal Code this was made a thousand dollars. The limitation was removed when the present Criminal Code was enacted (see Martin's Crimi­nal Code, 1955, under s. 628).

As to the nature of the enactment, it obviously deals with a matter that is prima facie within provincial jurisdiction "satisfaction or compensa­tion for loss of or damage to property". "Property and Civil Rights" is one of the most important heads of provincial jurisdiction enumerated in s. 92 of the B.N.A. Act. Counsel for the Attorney Gen­eral of Quebec has also referred us to Halsbury's

[Page 980]

Laws of England. In the third edition, (vol. 10, p. 271) under the caption "Distinction between criminal and civil proceedings" one reads:

A civil proceeding has for its object the recovery of money or other property, or the enforcement of a right for the advantage of the person suing, while a criminal proceeding has for its object the punishment of a public offence. Criminal proceedings cannot be used as a means of recovering a civil debt in the absence of express provision to that effect.

In Ross v. Registrar of Motor Vehicles[25], a majority in this Court agreed with the statement (at p. 13) that: "It should now be taken as settled that civil consequences of a criminal act are not to be considered as 'punishment' so as to bring the matter within the exclusive jurisdiction of Parlia­ment."

It should also be noted that under s. 92, head 14, the provincial legislatures have exclusive jurisdic­tion over:

The Administration of Justice in the Province, including the Constitution, Maintenance, and Organization of Provincial Courts, both of Civil and of Criminal Jurisdiction, and including Procedure in Civil Matters in those Courts.

Unlike practically every other procedural provi­sion of the Criminal Code, the remedy contemplat­ed in s. 653 has the characteristics of a civil remedy. It is available only "upon the application of a person aggrieved". It is not sanctioned by a penalty but it is "enforceable ... as ... a judgment rendered ... in civil proceedings". In short the substance of s. 653 is that it enables a person who has suffered loss of or damage to property by the commission of an indictable offence, to obtain from the court of criminal jurisdiction a civil judgment against the offender. It provides for what is known in the law of France as "constitu­tion de partie civile" (civil third party claim) before the criminal court, a procedure which is there so frequently resorted to that an important proportion of tort cases, including malpractice claims, come before the penal, rather than the civil jurisdiction. Of course s. 653 being limited to

[Page 981]

crimes against property has a much narrower scope but, if constitutionally valid, it would be susceptible of the same extension.

I do not think a sum of money ordered to be paid under s. 653 can be considered as a "fine", so as to bring the enactment within the principle of the decision in City of Toronto v. The King[26]. In his Dictionary of English Law Lord Jowitt says: "In criminal law, a fine is a sum of money ordered to be paid to the Crown by an offender, as a punishment for his offence". In the Oxford Dic­tionary the meaning of compensation is given as obsolete. The words used in the enactment, namely: "satisfaction or compensation" clearly indicate that what is contemplated is not punishment to be suffered in addition to the civil obligation.

It appears to me that, if we choose to express an opinion on the constitutional validity of s. 653, we cannot leave undecided the nature and effect of the orders it purports to authorize. It is necessary to decide whether those orders are intended to be in substitution for the civil remedy or in addition to it. In the latter case, the section would be valid as providing for punishment. But, in my view, those orders are clearly intended to be in substitu­tion for the civil remedy, not in addition to it and it is apparent that this was how the matter was considered by all parties concerned in the present case.

In this respect, I would point out that it is only by exception that punitive damages can be awarded and they are opposed to "compensatory" damages which are governed by the principle of restitutio in integrum, (see McGregor On Damages, 13th ed., p. 303). Satisfaction and compensa­tion both imply restitutio and are opposed to any idea of punishment. They therefore relate to the civil consequences of a criminal act not to punishment therefore [sic]. This is not a case where punitive damages could be awarded, (see Basted v. Grafton and Wilde[27]). Section 10 of the Criminal Code cannot prevail over the clear intent of s. 653 and allow the creditor who has obtained an order of

[Page 982]

compensation a second recovery before a court of civil jurisdiction.

The question therefore, as I see it, is whether Parliament's jurisdiction over "The Criminal Law, ... including the Procedure in Criminal Matters" extends to procedure in civil matters arising out of the same set of facts that constitute a criminal offence. In my view this question must be answered in the negative. The authority to define crimes does not include the authority to legislate concerning the purely civil consequences of the facts that constitute a crime. Similarly the author­ity to legislate respecting procedure in criminal matters does not include the authority to legislate on procedure in civil matters even when the same set of facts are involved in the criminal offence as in the civil claim. In this respect one should note that s. 10 of the Criminal Code reads:

10. No civil remedy for an act or omission is suspended or affected by reason that the act or omission is a criminal offence.

It also should be noted that a finding of guilt under the Criminal Code has been held not to be conclusive from a civil point of view: La Foncière v. Perras[28].

This does not decide the issue of constitutional­ity in the present case because an important aspect of the constitutional division of legislative author­ity remains to be considered namely, the extent of the federal ancillary power. In the Fish Canneries case (Attorney-General for Canada v. Attorney-General for British Columbia[29]) Lord Tomlin said at p. 118:

Questions of conflict between the jurisdiction of the Parliament of the Dominion and provincial jurisdiction have frequently come before their Lordships' Board, and as the result of the decisions of the Board the following propositions may be stated:‑

(1) The legislation of the Parliament of the Domin­ion, so long as it strictly relates to subjects of legisla­tion expressly enumerated in s. 91, is of paramount authority, even though it trenches upon matters assigned to the provincial legislatures by s. 92: see Tennant v. Union Bank of Canada, [1894] A.C. 31.

[Page 983]

(2) The general power of legislation conferred upon the Parliament of the Dominion by s. 91 of the Act in supplement of the power to legislate upon the subjects expressly enumerated must be strictly confined to such matters as arc unquestionably of national interest and importance, and must not trench on any of the subjects enumerated in s. 92 as within the scope of provincial legislation, unless these matters have attained such dimensions as to affect the body politic of the Dominion: see Attorney-General for Ontario v. Attorney-General for the Dominion, [1896] A.C. 348.

(3) It is within the competence of the Dominion Parliament to provide for matters which, though otherwise within the legislative competence of the provincial legislature, are necessarily incidental to effective legislation by the Parliament of the Domin­ion upon a subject of legislation expressly enumerated in s. 91: see Attorney-General of Ontario v. Attorney-General for the Dominion, [1894] A.C. 189; and Attorney-General for Ontario v. Attorney-General for the Dominion, [1896] A.C. 348.

(4) There can be a domain in which provincial and Dominion legislation may overlap, in which case nei­ther legislation will be ultra vires if the field is clear, but if the field is not clear and the two legislations meet the Dominion legislation must prevail: see Grand Trunk Ry. of Canada v. Attorney-General of Canada, [1907] A.C. 65.

It should perhaps be noted that in para. 3, the words used are "necessarily incidental", but, in some of the cases referred to, one also finds the expressions "truly ancillary" and "properly ancil­lary" which were obviously taken as synonymous.

This ancillary power doctrine was applied by this Court in procedural matters under the Crimi­nal Code. In Attorney General for Quebec v. Attorney General for Canada[30], Taschereau J., as he then was, said (at p. 604), after referring to the judgment I have just mentioned:

It follows as a result of this jurisprudence which is applicable to the present case, that section 770 of the Criminal Code, although not being strictly legislation in relation to criminal law and procedure, is nevertheless within the competence of the Dominion of Canada, on account of its incidence upon criminal law and proce­dure. And in such a case, the field being occupied, the provincial legislation becomes inoperative.

[Page 984]

Kerwin J., the other judge who wrote in the case, similarly said (at p. 608):

It is sufficient to say that this enactment is necessarily incidental to the power to legislate upon criminal law and procedure as allotted to Parliament by head 27 of section 91 of The British North America Act,

The Criminal Law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters.

I cannot find anything which would make it possible for me to consider subss. (1) and (2) of s. 653 of the Criminal Code as necessarily incidental to the full exercise by Parliament of its authority over criminal law and criminal procedure. A com­pensation order is nothing but a civil judgment. As DesBrisay C.J.B.C. said in a passage quoted by Matas J.A. (R. v. Scherstabitoff[31]):

… I think it is perfectly clear that the definition of the word "sentence" in s. 628(1) is placed there for the purpose of enabling an appeal to be taken on such an order as this, which is a discretionary order which might otherwise have been said to not have been .appealable. Apart from that, I do not think that it is part of the sentence....

I should point out further that a compensation order under 653(1) is not of the same nature as a probation order which includes, under s. 663(2)(e), a condition that the accused shall:

(e) make restitution or reparation to any person aggrieved or injured by the commission of the offence for the actual loss or damage sustained by that person as a result thereof;

I do not consider it desirable to comment on the judgments which were cited to us respecting the scope of such probation orders. I will only note that they do not become civil judgments to be executed at the diligence of the creditor by civil process. Failure to comply is an offence under s. 666(1) and, in addition, a suspended sentence may be revoked.

[Page 985]

I should further say that the provisions of s. 653(3) also appear to me to be of a different character than subss. (1) and (2) under which the compensation order becomes a civil judgment. Subsection (3) has its origin in a different section of the previous Criminal Code namely, s. 1049, traceable to the old Larceny Act. In so far as this deals with moneys found in the possession of the accused at the time of his arrest, it appears to nie to be properly incidental to criminal procedure. The arrest of a person suspected of crime, a search of his person and the detention of money found in his possession are all part of the normal criminal process. The proper disposition of money thus seized is therefore a necessary part of the criminal procedure, just as the adjudication on the guilt or innocence of the accused. I would therefore have no hesitation in holding valid a compensation order limited to what is contemplated in subs. (3).

Similarly I see no reason for putting in doubt the constitutional validity of s. 655 dealing with the disposition of property that is before the Court at the time of a criminal trial. It is an incidental part of the criminal process to bring before the Court or to put within its control the corpus delicti. This makes it necessary to provide for the proper disposition of such things when the trial is over and I consider it clear that it is part of the proper scope of criminal procedure. Even if it could possibly be left to be determined by the action of a civil court, it would be unreasonable to deny the practical necessity for an immediate disposition by the criminal court which is properly seized of the question as an incident of the adjudi­cation over the criminal accusation.

Counsel for the Attorney General of Canada contended that, if any of the various provisions of the Criminal Code dealing with civil aspects of crime was valid, they must necessarily all be valid. I must confess to some surprise at such an asser­tion which I find entirely unsupported by authority and totally at variance with the traditional approach which is to ask whether the legislature would have enacted the impugned provisions without the others, (Toronto Corporation v. York

[Page 986]

Corporation[32], at p. 427). Here no elaborate con­sideration is required to answer this particular question, the provisions are of diverse origin and they are not interlocking. Some provisions of the Criminal Code may not be severable but such is not the case for s. 653(1) and 653(2). The sentenc­ing process will not be affected if the criminal courts are prevented from issuing, at the instance of an aggrieved person, compensation orders in the nature of civil judgments to be executed by civil process.

Matas J.A. has underlined some of the difficul­ties inherent in this power of issuing civil judg­ments in a summary way without discovery etc. Much more could be said, however we must not forget that it is not for the Courts to pass judg­ment on the wisdom of the legislation. In adjudicating on the constitutional validity we are concerned solely with the proper interpretation of the constitutional division of authority. Furthermore, the jurisdiction contemplated in s. 653 is discretionary and the remedy for the difficulties lies in the exercise of this discretion: whenever it would be unfair to the accused to issue a compen­sation order, the duty of the court is to refuse to issue it.

Another aspect mentioned by Matas J.A. is the somewhat indefinite doctrine that the criminal process should not be resorted to for the purpose of seeking a civil remedy. I will refrain from review­ing authorities at this point. The cases are all cited in Wilson J.'s judgment Re State of Nebraska and Morris[33] on which I express no opinion. All I will say is that the present case, like several other previous decisions cited to us, shows that the pros­pect of obtaining in a summary way from the court of criminal jurisdiction an order of compensation equivalent to a judgment on a civil action is an open invitation to resort to the criminal process mainly for the purpose of obtaining the civil remedy, especially in cases of crime against prop­erty committed by persons against whom a civil condemnation is likely to be of some practical

[Page 987]

value.

For all the above reasons I would hold s. 653(1) and (2) to be ultra vires save to the extent contem­plated in s. 653(3).

As previously stated, I would allow the appeal and order that the judgment of the Court of Appeal be varied to restore the order of restitution of the merchandise seized and also to provide that the certificate of title filed in the trial Court remain with the Court pending final disposition of the civil proceedings commenced by Eaton. In accordance with the terms of the order of this Court granting leave, the Attorney-General of Manitoba will pay the costs of the respondent in this Court. There will be no other order as to costs.

Appeal allowed in part; order of Court of Appeal affirmed in so far as it set aside the order for compensation but varied so as to reinstate that part of the composite order directing restitution. Declaration made that s. 653 of the Criminal Code is valid, PIGEON, BEETZ and PRATTE JJ. dissenting as to s. 653(1) and (2).

Solicitor for the appellant: Deputy Attorney General of Manitoba, Winnipeg.

Solicitors for the respondent: D. A. Yanofsky & Assoc., Winnipeg.