Regulatory Offences: The Rarity of a Jail Sentence is No Reason Not to Order It (and other nuggets from the Court of Appeal for Ontario)
A month after the Court of Appeal for Ontario (“CAO”) re-affirmed deterrence as the primary sentencing factor for regulatory offences, the Court has released a decision that details the interplay of deterrence with proportionality and other sentencing factors. In the result, the CAO has provided an instructive judgment that behooves the attention of those litigating regulatory offences.
In R. v. New Mex Canada Inc., the company and two of its directors pleaded guilty to charges under the Occupational Health and Safety Act as a result of a 2013 workplace fatality. An epileptic worker, working without training and fall arrest protection on an elevated order picker at a height of 12 feet, suffered a seizure and fell head first onto the workplace floor. He died at the scene. Having suffered seizures in the workplace on two previous occasions, the employer knew the worker suffered from epilepsy. The sentencing justice described the circumstances as showing the highest level of negligence.
In the contested sentencing hearing, the Crown submitted that the employer should be fined at least $100,000 and the directors jailed between 15 and 30 days. The employer was a small, closely held corporation in precarious financial health. The individual defendants argued that if they were fined, it would be tantamount to a double fine, because they would also be required to pay the fines levied against the corporation. Moreover, none of the defendants were repeat offenders. Consequently, they sought lower fines and no jail time. As to the latter, the directors argued that while jail is not reserved for the worst cases, it is usually reserved to cases of repeat offending, no guilty plea and no remorse.
The presiding justice of the peace fined the employer $250,000 and jailed the directors 25 days to be served intermittently. The justice indicated that she was jailing the directors because to levy fines against them personally would only cause them more financial hardship.
On the defendants’ appeal to the Ontario Court of Justice, Bovard J. allowed the appeals, reduced the fines imposed on the employer from $250,000 to $50,000, set aside the jail sentences and instead fined the directors $15,000 each. He concluded that the sentences imposed by the justice were substantially outside the range usually imposed for like offences committed by like offenders and were therefore demonstrably unfit. In addition, she had erred in imposing jail terms as an alternative to fines because the latter would create more financial hardship. She also failed to recognize that jail sentences are more appropriate for repeat offenders who have failed to be deterred by fines. He agreed with the justice that the employer had “demonstrated a very concerning lack of care for its employees”, but the sentencing objective in regulatory offences is deterrence, not punishing moral blameworthiness. He added that the defendants had complied with all required remedial orders issued after the employee’s death.
On the Crown’s appeal to the CAO, Paciocco J.A. writing for the Court found that Bovard J.: (1) did not err in finding that the sentencing justice erred in sentencing the directors to jail terms because fines would be unduly harsh; (2) did err in finding that jail sentences were per se unavailable for first offenders who had merely been negligent and not more at fault; and, (3) did not err in finding the fines levied against the employer were demonstrably unfit.
Despite finding (2), the Court declined to vary the directors’ sentences. Bovard J. was within his authority to set aside the jail sentences imposed by the trial justice. She had erred in finding that jail could be imposed to avoid the personal hardship in paying fines and this error affected her decision to order jail time. However, Paciocco J.A. observed that, in the circumstances at the time of sentencing, the jail sentences were fit and preferable to the modest fines imposed by Bovard J. The directors were “blithely ignorant” of their obligations to ensure the safety of their workers. Had the trial justice not erred by relying on the financial burden of fines to justify the jail sentences, he would have found that Bovard J. erred in finding the jail sentences demonstrably unfit. Despite the “outrageous” circumstances surrounding the fatality, he declined to re-impose the jail sentences because of fresh evidence filed on consent in the appeal documenting recent and ongoing negative personal circumstances for both directors. In addition, the fines levied against all the three defendants, although lenient, constituted a sufficient deterrent and were not disproportionate to the gravity of the offences.
(1) The standard of review in sentencing appeals is governed by s.122 of the Provincial Offences Act and its interpretation by the CAO in R. v. Cotton Felts(1982), 2 C.C.C. (3d) 287: the appeal court is obligated to form its own opinion about the sentence under appeal and to vary it if the court does not consider it fit. Cotton Feltsmay have been overtaken by the narrower scope for appellate intervention adopted for criminal proceedings in R. v. Lacasse,  3 S.C.R. 1089: an appeal court may not vary a sentence unless the sentencing judge has erred in law or principle impacting the sentence on appeal or the sentence is demonstrably unfit. Paciocco J.A. declined to decide the issue on the limited record before the court, but observed with approval that Bovard J. found that mere unfitness was not enough to justify intervention. (paragraphs 38 to 47);
(2) Demonstrable unfitness means a substantial and marked departure from parity sentences; that is, sentences customarily imposed for similar offenders committing similar offences. Justices that impose sentences that depart from parity should explain, based on sentencing principles, why the departure is required (paragraphs 47 and 108);
(3) Hardship in paying fines does not justify a jail term as an alternative. Paciocco J.A. referred to R. v. Wu,  2 S.C.R. 530 and the Court’s finding therein that inability to pay a fine is not a proper basis for imprisonment. As a matter of principle, he found that the same must be true as to hardship (paragraphs 54 to 57);
(4) Although deterrence is the primary sentencing factor for regulatory offences, that does not mean moral blameworthiness plays no role. Referring to the CAO’s decision in Cotton Felts, Paciocco J.A. found that regulatory offences have a moral dimension in the sense that offences that threaten the public interest need to be condemned. Sentencing should be tailored to promoting deterrence and condemnation, the point being with the latter that those with guiltier minds deserve or require greater punishment (paragraphs 60 to 65):
(5) Proportionality also invites considerations of moral blameworthiness: the greater the guilt for the commission of an offence, the greater the offender’s responsibility, requiring greater punishment (paragraphs 66 to 69):
(6) As a matter of policy in sentencing first time offenders, it is incumbent on the courts to exercise restraint. Where proportionality permits, the Courts should first explore non-custodial dispositions that promote specific deterrence and rehabilitation. That is because custodial sentences may criminalize first offenders. The policy may be of less concern in regulatory proceedings, because the custodial periods ordered are usually shorter and regulatory convictions carry less stigma than criminal. Moreover, deterrence, as the primary sentencing factor, should not be undercut by overemphasizing specific deterrence or rehabilitation (paragraphs 76 to 83):
(7) The rarity of jail sentences for first time offenders is an observation, not a principle. Fines are the more frequent sanction in regulatory proceedings because they are usually sufficient to obtain deterrence. The general principles of restraint and parity also tend to foster non-custodial dispositions. But, as this case demonstrates, jail for first time offenders is fit when deterrence and proportionality require it (paragraphs 84 to 87):
(8) Fines imposed against a corporation are distinct from fines levied against its directors and should not be treated as fines imposed on the latter. Directors are under no obligation to pay fines levied against the latter (paragraphs 90 to 94):
(9) Following the decision of the CAO in Ontario (Labour) v. Flex-N-Gate Canada Company (2014), 119 O.R. (3d) 1, compliance with post-offence remedial orders should not be considered a mitigating factor in sentencing (paragraph 95); and,
(10) A fit sentence for regulatory offences is one that obtains general and specific deterrence and is otherwise appropriate, mindful of the principles of sentencing, including proportionality and parity (paragraph 102).