Fraud-Related Offences

• Author: Jonathan Shime/Ian Smith/Grace Hession David
• Pages: 225-264

225

Fraud-Related

Oences

11

I. Breach of Trust ........................................... 226

A. The Actus Reus of Breach of Trust ...................... 228

B. The Mens Rea of Breach of Trust ....................... 240

II. Secret Commissions ...................................... 247

A. Section 121: Frauds on the Government ................. 248

B. Section 426: Secret Commissions ...................... 261

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226 Prosecuting and Defending Fraud Cases

It is not uncommon for a charge of fraud to be related to other Criminal Code oences.

They include, inter alia, allegations of breach of trust (s122 of the Criminal Code) and

secret commissions (ss121 and 426 of the Criminal Code). Given that these oences

are often charged together with fraud, we will examine the essential elements required

for these oences as well.

I. Breach of Trust

Section 122 of the Criminal Code defines the oence of breach of trust. It states:

122. Every ocial who, in connection with the duties of their oce, commits fraud

or a breach of trust, whether or not the fraud or breach of trust would be an oence if it

were committed in relation to a private person, is guilty of

(a) an indictable oence and liable to imprisonment for a term not exceeding five

years; or

(b) an oence punishable on summary conviction.

The terms “oce” and “ocial” are defined in section 118 of the Criminal Code,

which states:

“oce” includes

(a) an oce or appointment under the government,

(b) a civil or military commission, and

(c) a position or an employment in a public department;

“ocial” means a person who

(a) holds an oce, or

(b) is appointed or elected to discharge a public duty.

The leading case in Canada on the law of breach of trust is R v Boulanger.1 In Boulanger,

the accused was the director of public security of the municipality of Varennes, Quebec.

Following an accident involving his daughter, he asked the police ocer in charge of the

case to prepare a second, more complete accident report. The supplementary report led

to the conclusion that his daughter was not at fault, with the result that the appellant did

not have to pay the insurance deductible of $250. At trial, the accused was convicted of

breach of trust. The conviction was upheld by the Quebec Court of Appeal, with a dis-

sent. On that basis, the case made its way to the Supreme Court of Canada.

The Supreme Court reviewed the historical development of the oence, includ-

ing what had been the leading case in Canada, R v Perreault,2 decided by the Quebec

Court of Appeal in 1992. In Perrault, the Quebec Court of Appeal had defined the

essential elements as follows:

1 2006 SCC 32.

2 (1992), 75 CCC (3d) 425 (Qc CA).

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Chapter 11 Fraud-Related Oences 227

(1) The accused is an ocial

(2) who commits an act or omission in connection with the performance of his or her

duties, and that act or omission

(a) is contrary to a duty imposed by law or regulation, by the accused’s contract

of employment or by a guideline connected with the accused’s duties; and

(b) results, directly or indirectly, in a personal benefit or a derivative benefit.3

The term “benefit” was defined to include virtually any advantage to the oce-

holder or family members.

After reviewing the common law history of the concept of breach of trust, the

Supreme Court of Canada identified two concerns arising from the Perrault decision.

First, there was a concern that the term “benefit” had been defined too broadly.4

However, the more significant issue was that the Quebec Court of Appeal in Perrault

had not set out the mens rea for the oence.5 As a result, the Supreme Court provided

much-needed guidance on the issue. The Court held:

[56] In principle, the mens rea of the oence lies in the intention to use one’s public

oce for purposes other than the benefit of the public. In practice, this has been associ-

ated historically with using one’s public oce for a dishonest, partial, corrupt or oppres-

sive purpose, each of which embodies the non-public purpose with which the oence

is concerned.6

Thus, post-Boulanger, the mens rea required turns on the intention to use one’s public

oce for purposes other than the benefit of the public.

Accordingly, the Supreme Court identified the essential elements as follows:

1. The accused is an ocial;

2. The accused was acting in connection with the duties of his or her oce;

3. The accused breached the standard of responsibility and conduct demanded of

him or her by the nature of the oce;

4. The conduct of the accused represented a serious and marked departure from the

standards expected of an individual in the accused’s position of public trust; and

5. The accused acted with the intention to use his or her public oce for a pur-

pose other than the public good, for example, for a dishonest, partial, corrupt, or

oppressive purpose.7

The first four essential elements relate to the actus reus. The fifth element establishes

the requisite mens rea.

3 R v Boulanger, supra note 1 at para 43.

4 R v Fisher, 2001 CanLII 24107, 139 OAC 96 (CA).

5 R v Boulanger, supra note 1 at para 46.

6 Ibid.

7 Ibid at para 58.

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