“Ability to pay” could limit corporate fines

An Ontario Court of Appeal decision questions whether bankruptcy may be a consideration in setting corporate fines

“Ability to pay” could limit corporate fines

In the first appellate decision relating to the sentencing of a corporate defendant under the Criminal Code (formerly Bill C45), R. v. Metron Construction Corporation, the Ontario Court of Appeal addressed the relevance of “ability to pay” in setting fines where a corporate defendant pleads guilty.  Metron pled guilty to one count of criminal negligence causing death from a December 24, 2009 accident where 3 workers and their supervisor fell to their deaths.  The sentencing Judge imposed a fine of $200,000.00.  The Crown sought leave to appeal the fine, as they had originally sought a fine of one million dollars.  The Crown relied on the following aggravating factors:  the accident was totally preventable; the company put into use a swing stage that did not indicate its load capacity; the swing stage was assembled without instructions, and the supervisor did not ensure that the workers wore fall protection.  In fact, there were only 2 sets of fall protection for 6 workers on the swing stage.  Metron argued for a fine in the amount of $100,000.00

In reviewing the sufficiency of the fine the Court noted that under Ontario’s Occupational Health and Safety Act (the “OHSA”) the maximum fine allowable for a corporation is $500,000.00 whereas the Criminal Code does not set out any maximum fine.

In reviewing the sentence the Court of Appeal concluded that the Judge, when imposing the original fine, considered the offender’s ability to pay in error, stating that an organization’s ability to pay should not be treated as a prerequisite to the imposition of a fine.  The Court stated that in the case of a corporation that is a significant employer and whose viability is seriously threatened by the imposition of a fine, the quantum of the fine may be reasonably affected.  As well, for a corporation that carries on no or limited business and has no or few employees, the impact of a fine on the corporation’s economic viability may be of little consequence.  The Court stated that the prospect of bankruptcy should not be precluded if appropriate.

The Court of Appeal held that the sentencing Judge erred when he considered that he was precluded from imposing a fine that might result in the bankruptcy of the corporation.  The Court held that the sentencing Judge placed undue weight on the Corporation’s ability to pay, determined that a fine of $200,000.00 was “manifestly unfit” and stated some might treat such a fine as simply a cost of doing business.  A fine of $750,000 was substituted as a fine, “fit in the circumstances”.

This decision represents a departure from sentencing principles adopted by the courts when a corporation is charged under the OHSA where ability to pay is regularly considered by the courts in determining the appropriate fine.   It remains to be seen whether the Court of Appeal’s decision in Metron will impact future sentencing decisions for convictions under the OHSA.

CCPartners has expertise in all areas relating to health and safety compliance, including defending corporations charged under the Criminal Code and the OHSA.

-By Karen Fields

For more information and legal insight or advice, visit www.ccpartners.ca.

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