Wednesday, December 12, 2018

Ontario Court of Appeal Declines to Clarify When Judges Can Impose Fines Below Statutory Minimum

In a decision released on December 7, 2018, the Ontario Court of Appeal missed an opportunity to provide lower courts with guidance  regarding the circumstances in which they could depart from imposing statutory minimum fines required by provincial regulatory statutes.  Section 59(2) of the Provincial Offences Act (“POA”)  gives the court discretion to impose something less than the minimum where “exceptional circumstances” make it “unduly oppressive” or “not in the interests of justice” to do so.   However, the Court of Appeal ruled that the provincial offence regime is better served by leaving the requirements for departure from minimum fines and sentences intentionally vague.  In fact, the Court may have even muddied the waters by appearing to say that “exceptional” means “unusual” and then failing to define the term unusual.
The case, Ontario (Environment, Conservation and Parks) v. Henry of Pelham Inc. 2018 ONCA 999, drew attention from a number of third parties who sought to intervene before the court of appeal to weigh in on the meaning of exceptional circumstances.  However, only the Criminal Lawyers Association was granted such leave.  Many expected the court to determine the standard to be applied in the exercise of judicial discretion to depart from mandatory minimum sentences found in over 600 Ontario provincial offences to which section 59(2) of the POA applied.  In addition, the case would have an influence on similar cases in other provinces where there was no jurisprudence at the appeal court level.  The judge who granted leave to appeal to the Court of Appeal, Justice Ian Nordheimer, in his endorsement noted both the importance of having guidance from the Court of Appeal on an unclear issue and stated that it was “essential for the due administration of justice that leave be granted”.  Justice Nordheimer held, “It is evident that there is no clear guidance as to when the requirements of section 59(2) are met.  Indeed, from the existing cases, it would appear that a very broad approach has been taken that may not reflect an apparent will of the Legislature that a departure from a minimum fine should only occur in exceptional circumstances.  Consequently, some guidance from this court respecting the minimum requirements that need to be established before section 59(2) can be invoked would be helpful.” 
Section 59(2) of the POA provides that, “although the provision that creates the penalty for an offence prescribes a minimum fine, where in the opinion of the court exceptional circumstances exist so that to impose the minimum fine would be unduly oppressive or otherwise not in the interests of justice, the court may impose a fine that is less than the minimum or suspend the sentence”. 
In November 2017, a resident of St. Catharines, Ontario called the Ministry of Environment and  Climate Change Pollution Hotline, claiming that one of the two ponds on his property had turned black.  Ministry officers investigated and observed a black pond with a faint organic odor.  The respondent, Henry of Pelham, a Niagara area winery, advised the Ministry that the corporation had spread a mixture of cattle manure and grape pomace on its lands for approximately two weeks and it had not been incorporated into the soil because of wet weather conditions.  The respondent speculated that the manure/pomace mixture may have entered one of the creeks that emptied into the pond through a tile drain.  As soon as Pelham became aware of this situation, it retained an environmental firm to assess it, prepare an action plan, replace a pump for the ponds aeration system that had not been operating for about one year, and arranged for black organic matter to be cleaned from the entrance to the pond.  These actions cost Pelham $12,000. 
At trial, the justice of the peace found that exceptional circumstances existed, not because of the monetary implications of the case, but because the nature of the offence and Pelham’s immediate actions in light of the offence and therefore the statutory minimum of $25,000 should not automatically be accepted as appropriate.
On appeal to a Superior Court judge, the appeal judge agreed that there were exceptional circumstances and concluded that a fine is “not in the interests of justice” when it is unfair.  He concluded that imposing a $25,000 fine in the circumstances would be seen as patently unfair and that the offence was a very modest incident.  He then asserted that it was not obvious that the Crown could have proved its charge without Pelham’s guilty plea.  However, he concluded that the fine should be raised from $600 to $5,000 instead of the minimum $25,000 prescribed by the Act. 
In short, both JP and the Superior Court judge had imposed fairly modest fines on Pelham for a discharge into a pond that had the effect of creating a “faint organic odor” for an unknown period of time.  Both courts held that the corporation’s acts were, essentially minimal, had no lasting effect, and took into consideration that Pelham had pleaded guilty to the charge of “discharging or causing or permitting the discharge of material into a water course” and had taken remediation measures at an expense of some $12,000.  They concluded that these were exceptional circumstances that justified departing from the minimum fine of $25,000 imposed by the Ontario Water Resources Act (“Act”).    
The Crown appealed that decision to the Court of Appeal.  Leave to appeal was granted by Justice Nordheimer.  At issue was whether the court should provide some guidance as to the operation of section 59(2) and how it affects the numerous statutes, other than the Act, that provide for provincial offences that are subject to a statutory minimum fine or sentence.  The Court of Appeal held that regulatory offences arise in a situation different from the criminal law.  They were strict liability offences where the Crown had to prove the commission of the prohibited act beyond a reasonable doubt and that liability followed unless the defendant could establish a defence of due diligence on the balance of probabilities. In addition, the main sentencing objective for regulatory offences was deterrence as opposed to punishment.  Under the Act, Pelham’s  offence was one of the more serious in which the higher range of penalties applied and that the corporation’s guilty plea put the $25,000 minimum fine in play. 
The Court of Appeal disagreed with both lower court decisions, but Justice Grant Huscroft, writing for the court, refused to identify circumstances where section 59(2) of the POA would allow the court to impose a lesser fine.  Justice Huscroft looked at the nature of minimum fines and held that they apply without regard to the circumstances of individual offenders or circumstances surrounding the particular offence.  It was an approach chosen to achieve deterrence by the legislature and the court’s responsibility to apply that approach.  In this case, the prosecutor chose to prosecute under part III of the Act where the minimum fine had to be imposed on a conviction unless relief under section 59(2) of the POA was warranted. 
Justice Huscroft went on to find that the court’s discretion in not applying a minimum fine was not unfettered but the difficulty was that the criteria in 59(2) of the POA was vaguely worded, i.e. the meaning of “exceptional”, “unduly oppressive” and “not in the interests of justice” were evaluative and comparative concepts that have no settled court meaning and leave room for interpretation in application.   Justice Huscroft held that such vague terms must be interpreted in context as the modern approach to statutory interpretation makes clear.  Trial judges must not recognize exceptional circumstances too readily less they become the norm.  Specifically, unduly oppressive includes financial hardship.  Interests of justice “allows consideration for broader residual considerations” and interests of justice does not mean fairness.     
He held that the appeal judge had erred in concluding that the circumstances of this case were exceptional and that it would not be in the interests of justice to impose the minimum fine under the Act.  The strength of the Crown’s case given the plea of guilt was irrelevant and the minimum fine ought to have been imposed.
Justice Huscroft summarized his reasoning as follows: 

1.      Section 59(2) applies exceptionally.  It will be an “unusual case” in which the imposition of a minimum fine would be considered “unduly oppressive” or “otherwise not in the interest of justice”. Justice Huscroft did not elaborate what he meant by “unusual”;
2.      Whether a minimum fine is unduly oppressive usually will depend on consideration of personal hardship.  The bar for relief is set very high where difficulty in paying a minimum fine is inadequate to justify discretionary relief;
3.      Whether a minimum fine is otherwise “not in the interests of justice” involves consideration of not only the interests of an individual offender but also the interests of the community protected by the relevant public welfare legislation; and
4.      The discretion under section 59(2) cannot be exercised arbitrarily.  Trial judges must explain their reasons for invoking section 59(2) and in particular must demonstrate both that circumstances are exceptional and that it would be unduly oppressive or otherwise not in the interests of justice to apply the minimum fine.
He held that in this case, the appeal judge erred in concluding that the circumstances were exceptional and not in the interests of justice because the appeal judge had determined that the interests of justice means no more than fairness.  Secondly, he concluded that the appeal judge had erred in engaging in a what he called “counterfactual” exercise by considering several factors that, in his view, would have rendered prosecution difficult had it occurred.  The judge had concluded that the facts in this case were so minimal that they created exceptional circumstances for the purpose of section 59(2).  Justice Huscroft held that the counterfactual analysis involved speculation on matters that the appeal judge was not entitled to consider. 
In the result, Justice Huscroft and his fellow appeal court Justices  -Watt and Fairburn - allowed the Crown’s appeal and imposed the minimum fine of $25,000 on Pelham.

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