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OHSA - Sentencing. R. v. 1222149 Ontario Ltd. (Dairy Queen and/or Embrun DQ Grill & Chill) [sentencing]
In R. v. 1222149 Ontario Ltd. (Dairy Queen and/or Embrun DQ Grill & Chill) (Ont CA, 2024) the Ontario Court of Appeal allowed a POA [s.131] OSHA Crown sentence appeal.
Here the court considers "treating individual and corporate defendants as “similar offenders” when applying the parity principle" in sentencing:(2) The appeal court erred in law by failing to address the trial court’s error of treating individual and corporate defendants as “similar offenders” when applying the parity principle
[27] The Crown argues that the appeal court erred in failing to consider the argument it made that the sentencing justice erred by relying on the case of R. v. Scott (2005), 80 W.C.B. (2d) 582 (Ont. C.J.), a case involving an individual defendant, as a reference for the appropriate range of sentence for the corporate respondent in this case.
[28] The respondent argues that there was no impact from the failure of the appeal court to address this issue because the sentencing judge appropriately considered Scott as comparable. The respondent also notes that the sentencing justice imposed a fine 2.5 times that imposed in Scott.
[29] We agree with the Crown that the appeal court erred on this issue and that the error was material.
[30] Although the appeal court listed among the issues raised by the Crown the issue of whether it was an error to treat individual and corporate offenders as “similar offenders” for parity purposes, the court failed to address the issue. The appeal court considered parity only from the perspective of similarity of injuries caused by an offence and the size of the corporation (the latter point was tainted by the first error, discussed above, that the appeal court only considered the store where the offence occurred in assessing the size of the corporation). The appeal court did not consider whether it was an error for the sentencing justice to treat sentences imposed on individual offenders as a reference for consideration of parity when sentencing a corporation. The failure to address this issue was an error in law as the issue was fully argued by the Crown before the appeal court.
[31] The error had a material impact on the sentence imposed because the justice of the peace also erred on this issue. He found that the Scott decision was “very comparable” to the present case. In Scott, a $3,000 fine was imposed on an individual defendant where an employee’s fingers were injured in a dough sheeting machine without a guard at the time of the accident. At the time of the sentencing in Scott, the maximum fine under the OHSA for an individual was $25,000, compared to $500,000 for a corporation. Setting aside that the injuries in Scott appear to have been less serious and less long term than in this case, the sentencing justice failed to consider that the sentencing range for individual defendants is not the same as for corporate defendants.
[32] Sentencing ranges for individuals for provincial offences cannot be unthinkingly applied to sentencing of corporate defendants. This is so for at least two reasons. First, for most offences created by provincial statute, the legislature has set a higher maximum fine for a corporate defendant than for an individual defendant. For the legislation at issue in this case, the OHSA, at the time of the offence, the maximum fine for an individual was $25,000, while the maximum fine for a corporation was $500,000.[2] The fact that the maximum penalty is significantly higher for corporations than for individuals speaks to a different sentencing range. The different sentencing range for corporations as compared to individuals means that parity usually will not apply directly between sentences imposed on individuals and corporations: Cotton Felts, at p. 294; New Mex, at para. 100.
[33] This brings us to the second reason that parity often will not apply directly between corporations and individuals in sentencing for OHSA offences. The legislative choice to enact a higher maximum fine for corporations demonstrates a legislative intention that a broader spectrum of penalties be available in sentencing corporations than is available for individuals because it is often, but not always, the case that corporations have more economic means than individuals. As a result, higher fines may be required to achieve specific and general deterrence in sentencing a corporation as compared to an individual.
[34] We do not suggest that sentencing precedents for individuals in provincial offence prosecutions are entirely irrelevant to sentencing corporations. One could imagine circumstances involving a small, closely-held corporation where the quantum of fine necessary to achieve specific and general deterrence would be very similar to that appropriate for an individual defendant.
[35] The difficulty that arises when sentencing precedents for individuals are applied to corporate defendants without careful consideration is that the ranges of sentence are not the same. Typically, ranges of sentence for individual defendants for the type of offence at issue in this appeal are in the thousands of dollars, whereas ranges of sentence for corporate defendants are in the range of tens of thousands of dollars. Where a sentencing judge or justice of the peace relies on a precedent involving an individual in sentencing a corporate defendant, the reasons must show that the judge or justice of the peace turned their mind to the difference between individuals and corporations in terms of range of sentence and considered the quantum of fine necessary to achieve specific and general deterrence for the corporate defendant: New Mex, at para. 108.
[36] We acknowledge that the sentencing justice imposed a fine 2.5 times that imposed in Scott. But even $7,500 is well below the range commonly imposed on corporate defendants of the respondent’s size for similar offences (discussed further below). In the absence of any discussion by the sentencing justice in his reasons adverting to the different ranges for individual and corporate defendants, and given his reliance on Scott as “very comparable”, we conclude that he erred on this issue. As a result, the failure of the appeal court judge to address this issue had an impact on the sentence imposed. . R. v. 1222149 Ontario Ltd. (Dairy Queen and/or Embrun DQ Grill & Chill) [sentencing]
In R. v. 1222149 Ontario Ltd. (Dairy Queen and/or Embrun DQ Grill & Chill) (Ont CA, 2024) the Ontario Court of Appeal allowed a POA [s.131] OSHA Crown sentence appeal.
Here the court considers "the size of a corporate defendant and the scope of its economic activity" in sentencing:(1) The appeal court erred in law in restricting its consideration of the size of the corporation to the location operation
[12] The Crown argues that the appeal court erred in holding that, in assessing the size of a corporate defendant and the scope of its economic activity, a sentencing court may restrict its consideration to the local operation. The Crown further argues that the error had an impact on the sentence imposed because the sentencing justice incorrectly limited his assessment of the size and economic scope of the respondent corporation to the store where the offence occurred.
[13] The respondent concedes that the appeal court erred in holding that the size and economic scope of a corporate defendant must be considered at the local level when the offence is a local offence. However, it argues that the error had no impact on the sentence imposed because the sentencing justice stated and applied the law correctly on this issue. It also argues that the precedents involving corporations that the Crown relied on at the sentencing hearing do not support a fine as high as that sought by the Crown.
[14] We agree with the Crown that the appeal court erred on this issue and that it had an impact on the fine imposed.
[15] In his reasons dismissing the Crown’s sentence appeal, the appeal court judge referred to the passages from this court’s decision in Ontario (Labour) v. New Mex Canada Inc., 2019 ONCA 30, 144 O.R. (3d) 673, about the relevance of the size of a corporation and the scope of its economic activity in assessing a fit deterrent sentence. However, he then stated:I am also of the view, that the regional, provincial, national or international corporate activity cannot always be considered as the bases for the proper penalty. Once again, the proper penalty shall be assessed to the severity of the contravention. If evidence establishes that the contravention is local, then the proper penalty shall be considered on the basis of its local commercial activity. If it is provincial then the provincial economic activity shall be considered, and so on.
In this matter, the Justice focused on the local economic activity of the corporation as he determined that it was a local corporate neglect, and therefore the blameworthiness was limited to that place of business. I am satisfied that he applied the proper principle as established by Cotton Felts and New Mex Canada. [Emphasis added]. [16] The underlined portions of the passages above reflect error because they fail to recognize and apply the principle that in determining what quantum of fine is appropriate for a corporate defendant for an OHSA offence, a sentencing judge must consider the size of the company and the scope of its economic activity with a view to assessing what level of fine will achieve specific and general deterrence, given the financial means of the company. This court has recognized that in order to achieve specific and general deterrence, the amount of a fine imposed on a corporate defendant must be sufficient that the fine will be “felt” by the corporation and not merely a “slap on the wrist”: R. v. Cotton Felts Ltd. (1982), 1982 CanLII 3695 (ON CA), 2 C.C.C. (3d) 287, at pp. 294-95. In other words, a fine imposed on a corporation must take into consideration the economic means of the corporation in order to achieve both specific and general deterrence: New Mex, at paras. 97, 98 and 111.
[17] To make this assessment, a sentencing judge must consider the size of the corporation and the scope of its economic activity. Where a corporate defendant’s operations involve more than one location, in most cases, consideration of the size and economic means of the corporation will require consideration of the corporation as a whole, not just the location where the offence occurred.
[18] A focus only on the size of the location where the offence occurred, rather than the corporation as a whole, fails to recognize the responsibility of the corporation for the conduct of its local operations.
[19] The ultimate question that a sentencing court must contend with in deciding the quantum of a fine to impose on a corporation is what quantum is necessary to achieve the relevant sentencing objects, in particular specific and general deterrence: New Mex at para. 102. In sentencing a corporate defendant, a sentencing court can only make this assessment if it properly considers the size and scope of the corporation’s economic activity. The court considered on the same issue at paras 20-26.
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