Date: 20110414
Docket: A-483-10
Citation: 2011 FCA 136
CORAM: EVANS
J.A.
DAWSON
J.A.
STRATAS
J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA AND
NATIONAL PAROLE BOARD
Appellants
and
JOHN ANTHONY FRANCHI
Respondent
REASONS FOR JUDGMENT
EVANS J.A.
Introduction
[1]
This is an
appeal by the Attorney General of Canada and the National Parole Board (Board)
from a decision of the Federal Court, dated November 24, 2010. In that decision
(2010 FC 1179), Justice Harrington (Judge) allowed an application for judicial
review by John Anthony Franchi. The Judge set aside a decision of the Appeal
Division of the Board, dated March 19, 2010, affirming the Board’s revocation
of Mr Franchi’s day parole and the denial of full parole.
[2]
The Board
revoked Mr Franchi’s parole because he had breached the conditions imposed on
him. In particular, he had failed to report immediately any change in
his financial situation and to provide to his parole officer full financial
disclosure (including assets, debt, income and expenditure) immediately upon
request.
[3]
The Judge
agreed that Mr Franchi had not immediately reported a change in his financial
situation. However, he concluded that, when read together, the two conditions
were contradictory and ambiguous, and did not clearly inform Mr Franchi of his
reporting obligations. Consequently, it was unreasonable of the Board to revoke
his day parole and refuse him full parole for not complying with the condition
that he immediately report to his parole officer any change in his financial
situation. The Judge also held that the Board had breached the duty of fairness
because its reasons did not state the basis of its rejection of Mr Franchi’s
explanation for not providing full financial disclosure as soon as it was
requested.
[4]
In my
respectful view, the Judge erred on both counts. Properly interpreted, the
conditions were complementary, not contradictory or ambiguous. They imposed
separate and distinct obligations on Mr Franchi: to report immediately, on his
own initiative, any change in his financial situation and to provide a full
financial disclosure immediately upon request. Further, on a fair reading, the
Board’s reasons informed Mr Franchi of the bases of its decision.
[5]
Accordingly,
I would allow the appeal.
Factual and Statutory Backgrounds
[6]
Mr Franchi
is 58 years old. In 2007, he pleaded guilty to a series of fraud-related
offences committed over several years, and was sentenced to six years’
imprisonment. This was his second conviction and six-year sentence for offences
of this nature stretching back to 1989. In addition, he committed credit card
fraud offences while on day parole during his first sentence.
[7]
In March
2009, the Board granted him day parole. His parole was subject to the standard
conditions imposed by virtue of the Corrections and Conditional Release Act,
S.C. 1992, c. 20, subsection 133(2) (CCRA).
|
133. (2) Subject to subsection (6),
every offender released on parole, statutory release or unescorted temporary
absence is subject to the conditions prescribed by the regulations.
|
133. (2) Sous réserve du paragraphe
(6), les
conditions prévues par règlement sont
réputées avoir été imposées dans tous les cas de libération conditionnelle ou
d’office ou de permission de sortir sans escorte.
|
[8]
The
condition relevant to this appeal is contained in subparagraph 161(1)(g)(iii)
of the Corrections and Conditional Release Regulations, SOR/92-620.
|
161. (1) For the purposes of subsection
133(2) of the Act, every offender who is released on parole or statutory
release is subject to the following conditions, namely, that the offender
…
(g) advise the parole supervisor of the
offender's address of residence on release and thereafter report
immediately
...
iii) any
change in the domestic
or financial situation of the offender …
|
161. (1) Pour l'application du
paragraphe 133(2) de la Loi, les conditions de mise en liberté qui sont
réputées avoir été imposées au délinquant dans tous les cas de libération
conditionnelle ou d'office sont les suivantes :
[…]
g) dès sa mise en liberté, il doit
communiquer à son surveillant l'adresse de sa résidence, de même que
l'informer sans délai de :
[…]
(iii)
tout changement dans sa situation domestique ou financière […]
|
[9]
In
addition, CCRA, subsection 133(3) empowers the Board to impose
discretionary conditions on an offender’s parole.
|
133. (3) The releasing authority may
impose any conditions on the parole, statutory release or unescorted
temporary absence of an offender that it considers reasonable and necessary
in order to protect society and to facilitate the successful reintegration
into society of the offender.
|
133. (3) L’autorité compétente peut
imposer au délinquant qui bénéficie d’une libération conditionnelle ou
d’office ou d’une permission de sortir sans escorte les conditions qu’elle
juge raisonnables et nécessaires pour protéger la société et favoriser la
réinsertion sociale du délinquant.
|
[10]
The
discretionary condition imposed on Mr Franchi by the Board pursuant to this
power that is most relevant to this appeal provided as follows:
Must provide full financial
disclosure, including assets, debts, income and expenditures, immediately to
your parole supervisor upon request.
Another condition stated: “Employment is to
be pre-approved by your parole supervisor …”.
[11]
Mr Franchi
was released on day parole on April 14, 2009, subject to the above conditions.
He took employment with his sister’s landscaping and construction business, but
expressed a concern that his job neither utilized his skills nor paid him
enough to enable him to start paying off his debts.
[12]
His case
management team met on September 1, 2009, to review financial reports on Mr
Franchi that the parole office had ordered from Equifax Canada Inc., a credit
reporting agency, in preparation for determining whether he should be granted
full parole. These reports caused concern, because they indicated that Mr
Franchi was employed by an investment firm owned by a cousin. If true, this
would have been a breach of a discretionary condition of his parole, because
his employment by this firm had not been pre-approved by his parole supervisor.
In addition, the report stated that he had engaged in investment activities
with the firm, including providing financial guidance to an investor, and had misrepresented
his employment in order to enhance his ability to borrow money.
[13]
Following
a supervision meeting on September 3, 2009, Mr Franchi’s case management team
suspended his day parole, because of the concerns raised by the Equifax
reports. At a post-suspension interview on September 9, 2009, Mr Franchi’s
parole supervisors told him why his parole had been suspended. He denied that
he was employed by the investment firm, and suggested that the Equifax report
must have been based on his previous employment with the firm, which ended when
he was incarcerated.
[14]
On
examining the financial disclosure documents produced by Mr Franchi at the
supervision meeting of September 3, 2009, the parole officers learned that in
August he had borrowed approximately $53,000 through lines of credit and credit
cards, which he had not reported. It subsequently became clear that he had
borrowed a total of $104,000.
[15]
When
questioned about these transactions at the post-suspension meeting on September
9, 2009, Mr Franchi said that he intended to invest the proceeds of the loans
at a high rate of interest through the investment firm, and to pay off his
pre-existing debts with the interest thereby earned. However, he provided no
documentation to show that the $104,000 had in fact been invested with the firm.
[16]
In its
post-suspension decision of December 2, 2009, the Board described Mr Franchi’s
financial activities while he was on parole and noted that he had not informed
his parole officer of these changes in his financial situation when they met in
August. The Board also stated (Appeal Book, p. 44) that, while Mr Franchi later
provided further information about his $104,000 loan and his investment of it,
he produced
no official documents,
receipts or contracts specifying where the funds are invested, at what rate and
for how long.
[17]
The Board
revoked Mr Franchi’s parole because he had breached both the standard condition
requiring him to report immediately any change in his financial situation, and
the discretionary condition requiring him to make full financial disclosure to
his parole officer immediately on being asked to disclose. However, the Board
found that there was insufficient evidence that he had breached the condition
respecting employment. Finally, it denied him full parole on the ground that
there was an undue risk that he would reoffend before the expiration of his
sentence.
Decision of the Appeal Division of the
Board
[18]
Before the
Appeal Division of the Board, Mr Franchi argued that the two conditions were
confusing because it was not clear whether he was to make a financial
disclosure immediately or only when his parole officer requested it. Moreover,
he said, he was not asked at his meetings with his parole officer in August
2009 to make a full financial disclosure. When he was later asked to disclose,
he provided all the documentation available to him at that time. Consequently,
it was unfair and unreasonable of the Board to revoke his day parole and deny
him full parole.
[19]
The Appeal Division
rejected these and all the other arguments advanced by Mr Franchi. It agreed
with the Board’s post-suspension decision that he had not “immediately”
informed his parole officer of changes to his financial situation, namely, his
borrowing of approximately $104,000 in August and his investment of it. It also
agreed that, when he was asked for a full financial disclosure, the information
that he provided was incomplete because it did not include “the exact nature of
the investment ....” (Appeal Book, p. 119).
[20]
On the basis of the
above, and when considered in the context of Mr Franchi’s criminal history, the
Appeal Division held that his release, whether on day or full parole, posed an
undue risk to the community. Accordingly, it affirmed the Board’s decisions
following the post-suspension hearing to revoke the former and to deny the
latter, and held that the Board’s reasons fully explained the bases for its
decision.
Analysis
[21]
On his application
for judicial review, Mr Franchi again argued that the two conditions were
confusing, and the Board’s reasons did not clearly explain the basis of its
finding that he had not made a full disclosure of the nature of his investment.
The Judge agreed.
(i) The conditions
[22]
As already noted, the
Judge held that the conditions were contradictory and ambiguous. Standing
alone, the standard condition clearly required Mr Franchi to report
“immediately” any change in his financial situation. However, in the Judge’s
view, its meaning was obscured by the addition of the discretionary condition
requiring financial disclosure upon request. When read together, he held, the
conditions did not clearly inform Mr Franchi that he was to report a change in
his financial situation immediately it occurred, whether or not the parole
officer requested him to do so.
[23]
In these circumstances,
the Judge concluded that the Board’s decision that Mr Franchi had breached the
standard condition resulted in a substantively unfair deprivation of his
conditional liberty. In order to avoid this result, he interpreted the duty to
disclose “upon request” in the discretionary condition as modifying the duty to
report “immediately” in the standard condition.
[24]
Accordingly, in the
Judge’s view, the Board’s revocation of Mr Franchi’s parole and the denial of
his application for full parole could only be justified if it had validly
decided that he had breached the duty to make full financial disclosure upon
request.
[25]
In my opinion, the
meaning of parole conditions on parole is a question of law, because they are
imposed pursuant to powers delegated by the CCRA. Since this is the Board’s
home statute, its interpretation of parole conditions will normally constitute
an error of law only if it is unreasonable, absent a question of fundamental
importance to the legal system: Smith v. Alliance Pipeline Ltd., 2011 SCC
7 at paras. 25-28.
[26]
It is clear from the
reasons of the Appeal Division and the Board that they regarded the statutory
and discretionary conditions as complementary. In light of the text, purpose,
and context of the conditions imposed on Mr Franchi, this was not, in my view,
an unreasonable conclusion. Indeed, it was the only interpretation reasonably
open to them. Hence, I would conclude that their interpretation of the
conditions was correct.
[27]
On their face, the
conditions impose different obligations. First, like most offenders released on
parole, Mr Franchi was required to report “immediately” any change in his
financial situation. Borrowing $104,000 and investing it through his cousin’s
investment firm qualified as such a change. Mr Franchi did not report these
transactions to his parole officer when they met in August, the month that they
occurred. He was thus in breach of the standard condition.
[28]
The Judge indicated
(at para. 21) that he would also have come to this conclusion if Mr Franchi had
not also been subject to the discretionary condition. In his oral submissions
to this Court, Mr Franchi also agreed that, if the standard condition had stood
alone, he had not complied with it.
[29]
Because of Mr
Franchi’s particular criminal history, the Board exercised its discretion to
impose an additional condition on him. This required a full financial
disclosure, including the documents listed in the discretionary condition,
immediately after it was requested by his parole officer, regardless of whether
there had been a change in his financial position. Because
the parole officer suspected that Mr Franchi had not reported changes in his
financial situation as required, he requested a full financial disclosure.
[30]
I see no ambiguity or
contradiction between these two conditions. They did not put Mr Franchi in the
position of being in breach of one by complying with the other. The Board
correctly concluded that the conditions were complementary and their meaning
clear: Mr Franchi was to disclose changes in his financial situation immediately
and, if requested, to immediately make a full, documented financial disclosure.
If Mr Franchi had been unsure about the scope of the duties imposed by the
conditions, which I very much doubt, he should have asked for a clarification.
[31]
Mr Franchi concedes
that the conditions themselves were not contradictory, but, he argues, were
applied by the parole officers as if they were one. As a result, he was led to
believe that he was only required to provide information about his financial
position and activities when requested. The short answer to this submission is
that the key element of the standard condition is that the offender is obliged immediately
to report changes in his financial situation without waiting to be asked,
and that only the Board, not parole officers, may vary standard conditions: CCRA,
subsection 133(6).
[32]
Accordingly, the
Board’s decision that Mr Franchi was in breach of the statutory condition requiring
him to report changes in his financial situation immediately was not
unreasonable.
(ii) Appeal Division’s reasons
[33]
Mr Franchi had argued
before the Appeal Division of the Board that, among other things, he was not in
breach of the discretionary condition to make a full financial disclosure on
request, because he did not know what his cousin was doing with the money that
Mr Franchi was investing through his investment firm.
[34]
The Judge agreed.
After noting that the Appeal Division found Mr Franchi in breach of the
discretionary condition because the financial information that he provided was
inadequate, the Judge said (at para. 25):
However, it is not stated why the disclosure
was inadequate. The arrangement with his cousin was obviously more informal than
in an arm’s length relationship. However, it was the cousin’s decision what to
do with the money. It does not follow that Mr Franchi had particulars of the
investment immediately at hand. This failure on the Board’s part to articulate
constitutes a breach of procedural fairness, and no deference whatsoever is owed.
The
Judge returned to this point at the end of his reasons (at para. 30):
The second finding that the disclosure
was inadequate because he did not immediately know what his cousin was doing
with the money was not explained in any way comprehensible to this Court.
[35]
Accordingly, the
Judge held, the decision that Mr Franchi was in breach of the discretionary
condition was invalid because, without clear reasons, it was made in breach of
the Board’s duty of fairness. On this ground, the Judge set aside the
revocation of the day parole and the refusal of full parole.
[36]
The duty of fairness
requires that the reasons of an administrative tribunal must be sufficient to
inform the parties and the public of the basis of its decision, to enable the
parties to decide whether to pursue an appeal or an application for judicial
review, and to equip the reviewing court to perform its function: see Vancouver
International Airport Authority v. Public Service Alliance of Canada, 2010
FCA 158, 320 D.L.R. (4th) 733 at para. 16.
[37]
In assessing whether
the Appeal Division’s reasons were adequate on a particular issue, the Court
must also consider the reasons given by the Board in its post-suspension
decision on that issue when, as here, the Appeal Division is affirming the
Board. The Board’s post-suspension decision was, in turn, informed by a lengthy
appraisal report submitted to the Board by Mr Franchi’s parole officers,
recommending that the Board revoke the day parole and deny full parole. This,
too, is part of the administrative record that the Court may consider when
determining whether, viewed in the context of the record as a whole, the Appeal
Division’s reasons adequately explained the basis of its conclusion that, when
requested, Mr Franchi had not made the full financial disclosure required by
the discretionary condition.
[38]
The Appeal Division
may not have described in detail the respects in which Mr Franchi’s
financial disclosure fell short. Thus, after noting that he had had ample
opportunity to disclose his loan and his investment of the proceeds, the Appeal
Division stated (Appeal Book, p. 119):
The financial information that you had
provided was found to be incomplete, unsatisfactory and failed to disclose the
exact nature of the investment you had entered into.
[39]
In saying this, the
Appeal Division was adopting the finding of the Board that Mr Franchi’s
financial disclosure had been incomplete. In its post-suspension decision the
Board stated (Appeal Book, p. 44) that, after his suspension, Mr Franchi had
provided further information about his loans and investments, but without
… official documents,
receipts or contracts specifying where the funds are invested, at what rate,
and for how long.
[40]
In my opinion, the
reasons of the Appeal Division, when read together with those given by the
Board in its post-suspension decision, adequately explain the shortcomings in
Mr Franchi’s disclosure. As I read the reasons, the finding that he breached
the discretionary condition is not based solely on his failure to disclose, immediately
after the parole officer requested a financial disclosure, what his cousin was
doing with the $104,000. More important, the essential details about the
investments, and supporting documentation, were never produced. I also
infer from the Board’s references to Mr Franchi’s evasiveness, and his evident
return to a “continuing pattern of deceit”, that it did not find him credible
and thus may not have believed that he was as ignorant about the nature of the
investments as he claimed.
[41]
Since the duty of fairness
does not require procedural perfection, the Appeal Division is not to be
faulted because it did not deal explicitly with every argument advanced by Mr
Franchi in respect of the extent of his financial disclosure. Whether the reasons
informed Mr Franchi of why it found his financial disclosure to be inadequate
must be assessed on the basis of the whole record, including the reasons of the
Board. Considered in this light, the Appeal Division’s reasons, in my
respectful view, contain no deficiency warranting the Court’s intervention.
[42]
Finally, Mr Franchi
argued that, in refusing to cancel the suspension of his day parole and
revoking it pursuant to CCRA, paragraphs 135(5)(a) and (b),
the Board failed to consider whether, if released, he would pose an undue risk
to society by reoffending before the expiration of his sentence. He
pointed out that none of the financial activities in which he was alleged to
have engaged while on day parole was illegal.
[43]
I disagree. The Board
had explained the considerations that it had taken into account when it
concluded that day parole should be revoked and full parole refused because the
“risk is undue for community release”.
In assessing your behaviour during this
release against your criminal history, the Board notes that you have an
extensive history of engaging in deceitful and fraudulent activity. In the
Board’s view, your failure to disclose crucial financial information to your
parole officer in a timely fashion is evidence of a continuing pattern of
deceit. (Appeal Book, p.
45)
The
Appeal Division approved this reasoning (Appeal Book, p. 119).
[44]
The Board stated that,
when viewed in the context of his criminal history, Mr Franchi’s breach of his
parole conditions was “evidence of a continuing pattern of deceit”. It is
implicit in this that the Board was assessing the risk of reoffending. This was
the Appeal Division’s understanding, as is evident from its comment that it was
not its function to substitute its discretion for that of the Board members
“who assessed your risk to reoffend” (Appeal Book, p. 154). In assessing
Mr Franchi’s community risk, the Board and the Appeal Division were of the view
that the positive aspects of his file were outweighed by the negative.
[45]
In my view, the Appeal
Division’s revocation of Mr Franchi’s day parole and its refusal of full parole
were reasonable on the basis of the law and the material before it, and the
reasons for its decisions are clear. A finding that he had committed a criminal
offence while on parole is not a condition precedent to a negative undue risk
assessment.
Conclusions
[46]
For these reasons, I
would allow the appeal and dismiss Mr Franchi’s application for judicial review
with costs here and below.
“John M. Evans”
“I agree.
Eleanor
R. Dawson, J.A.”
“I agree
Stratas
J.A.”
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