Obtaining Property by False Pretences (s. 362) Charges in Canada: Offences, Defences, Punishments

What is “Obtaining Property by False Pretences” in Canada?

Obtaining property by false pretences is criminalized under s. 362 of the Criminal Code. In its own wording, “obtaining property by false pretenses” is just that! Generally, it involves fraudulent activity or behaviour which ultimately assists the accused in acquiring property he or she wouldn’t otherwise be entitled to. A false pretence is defined as: “a representation of a matter of fact either present or past, made by words or otherwise, that is known by the person who makes it to be false and that is made with a fraudulent intent to induce the person to whom it is made to act upon it.” (see: s. 361(1) of the Criminal Code).

Section 362 is broken up into four subsections and captures the following acts:

• Obtains or causes to be delivered, property in respect of which the offence of theft may be committed via a false pretence (s. 362(a));
• Obtains credit via false pretences or fraud (s. 362(b));
• Obtains property via a false statement (s. 362(c)); or
• Obtains the delivery of personal property, the payment of money, the making of a loan, the grant or extension of credit, the discount of an account receivable, or the making, accepting, discounting or endorsing of a bill of exchange, cheque, draft or promissory note via false pretences (s. 362(d)). 

Examples

Some examples of obtaining property by false pretences might include:

• Convincing someone to sell you an item at a set price with no intention to pay that amount and ultimately obtaining the said item.
• A buyer convincing a seller that an item of value is actually a ‘dupe’ or is fake and obtaining that item at a cost, based on the false pretence that the item is worth less than it otherwise would be
• Inflating the value of assets on a statement in writing to obtain a grant or extension of credit

Defences

A strong defence to a charge of obtaining property by false pretences will depend on the circumstances of one’s case.

However, some common defences against a charge of obtaining property by false pretences include:

• Colour of Right
• No Risk of Loss
• Applicable Charter Defences

Punishment

The punishment for obtaining property through false pretences depends on two main factors:

1. The type of section 362 offence committed; and
2. the Crown’s choice to proceed via indictment or summarily

There are four ‘sub-offences’ enumerated in s. 362 and separate punishments associated with the different offences. All of the prospective punishments, regardless of the subsection you might have been charged under, are hybrid offences. This means that the Crown can choose to proceed via indictment (more serious category of criminal offences) or summarily (less serious category of criminal offences).

Section 362(2) – Punishment for section 362(a) offences:

• If the property obtained is worth more than $5000:
  • If charged as an indictable offence: term of imprisonment not exceeding 10 years
  • If charged as a summary offence: term of imprisonment not exceeding 2 years less a day and/or a $5000 fine
• If the property obtained is worth less than $5000:
  • If charged as an indictable offence: term of imprisonment not exceeding 2 years
  • If charged as a summary offence: term of imprisonment not exceeding 2 years less a day and/or a $5000 fine

Section 362(3) – Punishment for all other section 362 (subsections (b), (c) and (d)) offences:

• If charged as an indictable offence: term of imprisonment not exceeding 10 years
• If charged as a summary offence: term of imprisonment not exceeding 2 years less a day and/or a $5000 fine

Overview of the Offence 

Section 362 of the Criminal Code reads as follows:

For the Crown to obtain a conviction on a section 362 charge, they must prove both the actus reus and mens rea elements. The actus reus element speaks to the actual act or conduct which constitutes the criminalized behaviour within the offence, and the mens rea requires that the Crown prove that the accused had the mental intent to commit the charged offence. These are both discussed in more detail directly below.

Actus Reus and Mens Rea Elements of a s. 362 Offence

The mens rea and actus reus aspects of this offence will again, depend on the subsection that you are charged under. The chart below provides for the elements in which the Crown must prove related to each sub-sectioned offence. For the most accurate understanding of what evidence the Crown would need to proffer in your case for a successful conviction, find the exact subsection in the chart below.

“Anything”, must be property of such a nature that it can be the subject of a property right and, as well, capable of being taken or converted in a manner that results in deprivation of the victim (see: R v Stewart, 1988 CanLII 86 (SCC), [1988] 1 SCR 963).

Obtaining Property by False Pretences Defences

Colour of Right

Colour of right refers to a situation where if the facts that you believed to be true were true, you would not be guilty of the offence. An example of colour of right in the context of a section 362 offence might be that you write out a cheque for a certain amount to give in exchange for the obtainment of some property and the cheque bounces due to insufficient funds, however, you genuinely believed, that when you wrote out or cashed the cheque, that the attributable funds were available. In this scenario, you would likely not be found guilty if there was good reason for you to believe those funds would be available.

No Risk of Loss

For the actus reus element of this offence to be met, there needs to be some sort of deprivation, either actual loss or the risk of loss. As such, a possible defence to a s. 362 charge is to argue that the act in question did not result in actual deprivation or risk of deprivation.

Applicable Charter defences

The Canadian Charter sets out your rights and freedoms before and after your arrest. If the police fail to abide by these rights, either deliberately or inadvertently, it could aid in your defence. If any of your Charter rights have been violated before or after your arrest, you may be able to have some or all of the evidence that the Crown is relying on to secure a conviction excluded under s.24(2) of the Charter.

Obtaining Property by False Pretences Punishment

As discussed briefly above, the punishment for a s. 362 offence is dependent on a couple of factors. The first factor asks what subsection you are charged under. Punishments for the separate subsections can differ depending on the individual charge. Because obtaining property by false pretences is a hybrid offence, the second factor is how the Crown elects to proceed (either via indictment or summarily). An indictable charge is the more serious category of criminal offences in Canada and a summary charge is the less serious category. The chart below illustrates the potential maximum penalties which can be imposed for different s. 362 offences. For the most accurate understanding of what prospective sentence you might face, find the exact subsection of your charge in the chart below. Note these are maximum penalties and there are no minimum mandatory sentences for section 362 offences.

Besides terms of imprisonment the court is also allowed to impose:

• Fines including Victim Fine Surcharge (sections 348(1)(e) and 737)
• Bans of communication with the complainant(s), witnesses, etc. (sections 1(3)(a.1), 732.1(3)(h), 742.3(2)(a.3), 742.3(2)(f), and 743.21)
• Order samples to be provided for and saved in the DNA Databank (section 487.051)
• Restitution (paying the victim for lost, stolen or damaged items) (section 738(1))
• Forfeiture of any property intended to be used or actually used in the commission of the break and enter (section 491.1)

Frequently Asked Questions

What is an example of obtaining property by false pretences?

An example of obtaining property by false pretences could be a scenario where the offender convinces a seller of an item that the item, which the purchaser (the offender) knows to be authentic and therefore, valuable convinces the seller that it is counterfeit, a dupe, fake, etc. (i.e., worth less than its actual market value) and the unwitting seller is bargained down to an objectively unfair price for the item. For example, an uninformed/uneducated seller might be selling a necklace for which they advertise is real diamond and the offending buyer, upon inspection of the item, persuades the seller that it is not real diamond, therefore valueless and for this, obtains the necklace at a discount. A buyer would not be in contravention of section 362 if he bought the diamond necklace at an already discounted price because the seller was unaware at the outset of the item’s worth. In other words, the buyer is not obligated to educate the seller on its worth, however, he cannot use trickery to bargain with the seller.

Can you go to jail for obtaining property by false pretences?

The short answer is, yes. Imprisonment is a potential sentence, nevertheless, it is not a mandatory one. A fit sentence is constructed with an appreciation for the sentencing principles enumerated in s. 718 of the Criminal Code as well as precedent in case law. See our “Punishment” section above for more details on prospective sentences.

What is the punishment for obtaining property by false pretences?

Section 362(2) – Punishment for section 362(a) offences:

• If the property obtained is worth more than $5000:
  • If charged as an indictable offence: term of imprisonment not exceeding 10 years
  • If charged as a summary offence: term of imprisonment not exceeding 2 years less a day and/or a $5000 fine
• If the property obtained is worth less than $5000:
  • If charged as an indictable offence: term of imprisonment not exceeding 2 years
  • If charged as a summary offence: term of imprisonment not exceeding 2 years less a day and/or a $5000 fine

Section 362(3) – Punishment for all other section 362 (subsections (b), (c) and (d)) offences:

• If charged as an indictable offence: term of imprisonment not exceeding 10 years
• If charged as a summary offence: term of imprisonment not exceeding 2 years less a day and/or a $5000 fine

Published Decisions

R v Driscoll, 1987 ABCA 159 (CanLII)

Mr. Driscoll’s company was struggling financially and in 1985, he presented cheques to a service station operator for $90.00, $50.00 and $70.00 respectively in exchange for gasoline and money. At this time, Mr. Driscoll’s business account was overdrawn by $104.21. The cheques were not honoured when presented for payment. Mr. Driscoll testified that he had, in the past, written cheques when there were insufficient funds in the account; the bank honoured some of them and returned others. He also believed these cheques would be honoured, and shared frustration over the fact that he had always had difficulty in getting satisfaction from the bank as to the balance and status of his account. A bank officer testified that the bank’s statements for June to October 1985 were returned undelivered. Mr. Driscoll was away during this period but left no forwarding address. He made restitution to the service station operator for the cheques on the day before his trial. The main issue on appeal was the constitutionality of section 320(4) (now s. 362(4)) and whether the presumption that a cheque connected with an unsatisfactory account balance will presumably be one offered under false pretences. Ultimately the Court of Appeal upheld the provision as constitutional.

You can read the full case here.

R v Cohen, 1984 CanLII 3598 (QCCA)

The accused was charged with multiple counts of obtaining property by fraudulent intent. Essentially, the offender ‘invented’ invoices to demonstrate an inflated accounts receivable (the offender was trying to present his company as more profitable than it was). These fake invoices influenced the Toronto Dominion Bank to grant the offender’s company credit for $2,000,000. The issue on appeal was a statutory interpretation discrepancy between the French and English versions of the legislated offence. Ultimately, the Quebec Court of Appeal sentenced the offender to three years imprisonment.

You can read the full case here.

R v Winning, 1973 CanLII 1408 (ONCA)

This was an appeal brought by Ms. Winning who was convicted on May 16, 1972, of obtaining credit from T. Eaton Co. Limited (Eaton’s) by false pretences. Following conviction, she was sentenced to 14 days in jail. However, upon appeal, she was acquitted and the appeal was allowed.  Ms. Winning admitted to applying for credit at Eaton’s; she filled out an application for that purpose and gave her proper name and address. Nevertheless, in the particulars which she gave, she made at least two false statements. The court found, however, that Eaton’s never relied on these statements when ultimately deciding to extend Ms. Winning the credit and therefore, the evidence established that Eaton’s did not rely upon the information contained in the application, save for the name and address. The Court did point out that had Eaton’s relied upon the application form then she would have been guilty of the offence charged. The Court also considered that Ms. Winning honoured every obligation and paid Eaton’s on time for every credit advance when acquitting her.

You can read the full case here.