R. v. Zelitt (S.S.), 2006 ABQB 678

• Judge: A.D. Macleod, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: September 01, 2006
• Citations: 2006 ABQB 678;(2006), 408 A.R. 274 (QB)

R. v. Zelitt (S.S.) (2006), 408 A.R. 274 (QB)

MLB headnote and full text

Temp. Cite: [2006] A.R. TBEd. NO.008

Her Majesty the Queen (respondent) v. Sheldon Stephen Zelitt (appellant)

(020053252S1; 2006 ABQB 678)

Indexed As: R. v. Zelitt (S.S.)

Alberta Court of Queen's Bench

Judicial District of Calgary

A.D. Macleod, J.

October 26, 2006.

Summary:

The Alberta Provincial Court, in a decision reported at [2003] A.R. Uned. 158, found Zelitt guilty of 11 offences under the Securities Act.

The Alberta Provincial Court, in a decision reported at 328 A.R. 293, sentenced Zelitt to a total of four years' imprisonment and fines of $1.85 million and, in default of payment within three months, he was sentenced to a further four years' imprisonment. The court also made orders under s. 194(7) of the Securities Act, including an order that Zelitt cease trading in securities for 25 years. Zelitt appealed from the sentence.

The Alberta Court of Queen's Bench allowed the appeal in part. The court varied the sentence by substituting a fine of $1 million for the fine imposed by the trial judge and setting aside any term of imprisonment in default of payment of the fine.

Securities Regulation - Topic 5325

Trading in securities - Offences - Penalties and punishments - Misrepresentation in documents filed or given under securities laws - The accused was convicted of 11 counts under the Securities Act that he had made misrepresentations, or had permitted or acquiesced in VisuaLABS Inc. making misrepresentations, in documents required to be filed or furnished under Alberta securities laws or in materials submitted or given under Alberta securities laws - No criminal record - He was sentenced to a total of four years' imprisonment and fines of $1.85 million and, in default of payment within three months, he was sentenced to a further four years' imprisonment - The trial judge also made orders under s. 194(7) of the Securities Act, including an order that the accused cease trading in securities for 25 years - The accused appealed from the sentence - The Alberta Court of Queen's Bench held that the four year term of imprisonment was reasonable - However, the court allowed the appeal in part by substituting a fine of $1 million for the fine imposed by the trial judge and setting aside any term of imprisonment in default of payment of the fine - See paragraphs 10 to 41.

Securities Regulation - Topic 5335

Trading in securities - Offences - Penalties and punishments - Consecutive or concurrent sentences - Zelitt was convicted of 11 offences under the Securities Act - He was sentenced to a total of four years' imprisonment and fines of $1.85 million - Zelitt appealed from the sentence - He argued, inter alia, that since there were really three groups of offences, the trial judge should not have imposed 11 consecutive sentences - The Alberta Court of Queen's Bench held that even if imposing 11 consecutive sentences constituted an error, it was a harmless error - It was clear from the trial judge's reasons that the main focus was the appropriate global sentence - Since the court concluded that the overall sentence of four years was appropriate, it declined to disturb the sentence based on the argument that all 11 counts should not have resulted in consecutive sentences - See paragraph 16.

Securities Regulation - Topic 5336

Trading in securities - Offences - Penalties and punishments - Fines (incl. imprisonment in default of payment) - The accused was convicted of 11 counts under the Securities Act - He was sentenced to a total of four years' imprisonment and fines of $1.85 million and, in default of payment within three months, he was sentenced to a further four years' imprisonment - On appeal, the Alberta Court of Queen's Bench substituted a fine of $1 million for the fine imposed by the trial judge and set aside any term of imprisonment in default of payment of the fine - While the trial judge was entitled to conclude that a fine was appropriate in this case, the evidence before the trial judge would not have permitted him to conclude that Zelitt had the ability to pay the fines imposed - Since the Crown had sought a fine of $1 million and had not sought imprisonment in default of payment, the trial judge should have stated why he imposed a greater punishment than asked for by the Crown, particularly where the accused was sentenced in absentia - Further, given that Zelitt was absent from the jurisdiction when he was sentenced, the option to pay the fine imposed was illusory because there was no evidence that Zelitt was even aware of the option - The practical result was that he received a sentence of eight years, which was excessive - See paragraphs 10 to 41.

Cases Noticed:

R. v. Shropshire (M.T.), [1995] 4 S.C.R. 227; 188 N.R. 284; 65 B.C.A.C. 37; 106 W.A.C. 37; 102 C.C.C.(3d) 193, refd to. [para. 7].

R. v. Lafleche (A.M.) (2001), 293 A.R. 285; 257 W.A.C. 285; 2001 ABCA 292, refd to. [para. 8].

R. v. Boyle (K.P.) et al. (2002), 331 A.R. 273; 2002 ABPC 136, refd to. [para. 11].

R. v. Wall, [2000] O.J. No. 5447 (C.J.), refd to. [para. 12].

R. v. Benlolo (A.) (2006), 212 O.A.C. 227 (C.A.), refd to. [para. 13].

R. v. Wu (Y.), [2003] 3 S.C.R. 530; 313 N.R. 201; 182 O.A.C. 6; 2003 SCC 73, refd to. [para. 20].

R. v. Desjardins (F.) (1996), 182 N.B.R.(2d) 321; 463 A.P.R. 321 (C.A.), refd to. [para. 29].

R. v. Natrall (1973), 9 C.C.C.(2d) 390 (B.C.C.A.), refd to. [para. 32].

R. v. Zink (W.) (1992), 13 B.C.A.C. 241; 24 W.A.C. 241 (C.A.), refd to. [para. 32].

R. v. C.A.M., [1996] 1 S.C.R. 500; 194 N.R. 321; 73 B.C.A.C. 81; 120 W.A.C. 81; 105 C.C.C.(3d) 327, refd to. [para. 40].

Authors and Works Noticed:

Ruby, Clayton C., Sentencing (6th Ed. 2004), pp. 411 [para. 26]; 417 [para. 34].

Counsel:

John P. Petch and Laurie Schrader (Alberta Securities Commission), for the respondent, the Attorney General;

Timothy E. Foster (Van Harten Foster Ivonelli), for the appellant.

This matter was heard on September 1, 2006, before A.D. Macleod, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following reasons for judgment on October 26, 2006.