R. v. Collingwood Prime Realty Holding Corp.

Her Majesty the Queen v. Collingwood Prime Realty Holding Corp. et al.

Ontario Reports Ontario Superior Court of Justice D.E. Harris J. May 12, 2020 150 O.R. (3d) 289 | 2020 ONSC 2953

Case Summary

Criminal law — Sentencing — Appeals — Fine — Individual and corporate accused pleading guilty to multiple charges for failing to safely dispose of equipment containing contaminants — Sentencing judge imposing fines on both accused and a jail term on individual — Sentencing judge made no error in principle regarding sentencing factors, but improperly relied on a sentencing precedent involving a much more blameworthy state of mind — No jail time for individual and fines for both accused reduced.

Criminal law — Sentencing — Principles — Individual and corporate accused pleading guilty to multiple charges for failing to safely dispose of equipment containing contaminants — Sentencing judge imposing fines on both accused and a jail term on individual — Sentencing judge made no error in principle regarding sentencing factors, but improperly relied on a sentencing precedent involving a much more blameworthy state of mind — No jail time for individual and fines for both accused reduced.

Environmental law — Offences — Penalties — Individual and corporate accused pleading guilty to multiple charges for failing to safely dispose of equipment containing contaminants — Sentencing judge imposing fines on both accused and a jail term on individual — Sentencing judge made no error in principle regarding sentencing factors, but improperly relied on a sentencing precedent involving a much more blameworthy state of mind — No jail time for individual and fines for both accused reduced.

The individual accused carried on a business of wholesale liquidation. He owned several corporations including the corporate accused, which purchased a property that was not used for any commercial or other purpose. In August 2013, compliance officers from Environment and Climate Change Canada inspected the property and found two transformers and eight capacitors containing polychlorinated biphenyls ("PCBs") in concentrations prohibited by the Canadian Environmental Protection Act, 1999, S.C. 1999, c. 33 ("CEPA"). The individual accused was notified that the equipment containing the PCBs had to be conveyed to an authorized destruction or storage site. A written warning was delivered in November 2013. In September 2014, the equipment had still not been removed so the compliance officers issued an environmental protection compliance order requiring removal of the equipment by February 2015. When the officers returned in April 2015, the equipment still had not been removed. A search warrant was executed in December 2015 and one of the transformers was found to be in use. In March 2016, the two accused were charged under the CEPA on an 11-count information: one count of improper use of a transformer, nine counts of failing to safely store the other transformer and the eight capacitors, and one count of failing to comply with the removal order. The last piece of equipment was not removed from the property until December 2017. The two accused pleaded guilty. The sentencing judge relied heavily on a sentencing decision in which an accused ignored ministry warnings, disregarded various orders, and damaged wetlands with PCBs. The judge also closely followed the Crown sentencing recommendation, fining the corporation $200,000 and the individual $220,000 and imposing an intermittent 45-day jail sentence on the individual. The accused appealed the sentences.

Held, the appeal should be allowed.

The sentencing judge made no errors in principle with respect to sentencing factors. The accused argued that the judge focused on attaining a public policy objective within the regulatory context and erred by not recognizing the important purpose of punishing moral blameworthiness. No such error was committed and could only have benefited the accused if it had been committed. The judge also did not conflate the CEPA and Criminal Code sentencing factors. The accused argued that the judge used aggravating factors for fines in the CEPA on the issue of whether there should be imprisonment, but that argument was not borne out by the judge's reasons. The judge also made no error in assessing the aggravating factors.

The judge's heavy reliance on the sentencing precedent was an error in principle. The individual in the precedent case had a much more blameworthy state of mind in that he knowingly and intentionally polluted the environment, acted under a profit motive, and exhibited a reprehensible attitude and lack of remorse. It was also a case of actual harm whereas accused's case involved potential harm. The individual accused's sentence was erroneously increased as a result of the error. Although a jail sentence lay in the range of appropriate and proportionate sentences, it was unnecessary to vindicate the pertinent sentencing principles. The four-year delay and lack of response to the inspectors was egregious, but it was negligence rather than full mens rea. The absence of actual harm was not a mitigating factor but was an important circumstance in properly characterizing the offence. The public interest in a jail sentence was not strong. The individual accused was a first offender but the corporate accused had previous convictions for fire code violations. The first ten counts were essentially one and the same delict, with the allegation of use in the first count being somewhat more serious, resulting in some of the sentences being made consecutive with the understanding that they penalized essentially one act of wrongdoing. The amount of the fine was related to the cost of the cleanup. The fines imposed by the sentencing judge were vacated and replaced with fines of $170,000 for the individual and $150,000 for the corporation.

Cited Cases

R. v. Cotton Felts Ltd., 1982 ONCA 3695, [1982] O.J. No. 178, 2 C.C.C. (3d) 287, 8 W.C.B. 447 (C.A.), apld R. v. Sinclair, [2009] O.J. No. 5318, 45 C.E.L.R. (3d) 222 (C.J.), distd Ontario (Ministry of Labour) v. New Mex Canada Inc. (2019), 144 O.R. (3d) 673, [2019] O.J. No. 227, 2019 ONCA 30, 51 C.C.E.L. (4th) 171, 53 C.R. (7th) 150 (C.A.), consd R. v. Terroco Industries Ltd., [2005] A.J. No. 361, 2005 ABCA 141, [2006] 1 W.W.R. 572, 41 Alta. L.R. (4th) 1, 367 A.R. 1, 196 C.C.C. (3d) 293, 13 C.E.L.R. (3d) 48, [2005] A.W.L.D. 1585 (C.A.), consd

Other Cases Referred To

Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, [2002] S.C.J. No. 43, 2002 SCC 42, 212 D.L.R. (4th) 1, 287 N.R. 248, [2002] 5 W.W.R. 1, J.E. 2002-775, 166 B.C.A.C. 1, 100 B.C.L.R. (3d) 1, 18 C.P.R. (4th) 289, 93 C.R.R. (2d) 189, 113 A.C.W.S. (3d) 52, REJB 2002-30904, 2002 CCAN para. 10,056 R. v. Alpha Manufacturing Inc., [2005] B.C.J. No. 2598, 2005 BCSC 1644, 18 C.E.L.R. (3d) 194, 68 W.C.B. (2d) 77 (S.C.) R. v. Friesen, [2019] S.C.J. No. 100, 2020 SCC 9, 2020EXP-902, EYB 2020-350618 R. v. Graham, [2018] O.J. No. 5993, 2018 ONSC 6817 (S.C.J.) R. v. Lacasse, [2015] 3 S.C.R. 1089, [2015] S.C.J. No. 64, 2015 SCC 64, 24 C.R. (7th) 225, 86 M.V.R. (6th) 1, 478 N.R. 319, 333 C.C.C. (3d) 450, 396 D.L.R. (4th) 214, 128 W.C.B. (2d) 175, 2016EXP-59, J.E. 2016-20, EYB 2015-259924 R. v. Metron Construction Corp., [2013] O.J. No. 3909, 2013 ONCA 541, 309 O.A.C. 355, 300 C.C.C. (3d) 212, 109 W.C.B. (2d) 95 (C.A.) R. v. Priest (1996), 1996 ONCA 1381, 30 O.R. (3d) 538, [1996] O.J. No. 3369, 93 O.A.C. 163, 110 C.C.C. (3d) 289, 1 C.R. (5th) 275, 32 W.C.B. (2d) 191 (C.A.) R. v. Sault Ste Marie (City), 1978 SCC 11, [1978] 2 S.C.R. 1299, [1978] S.C.J. No. 59, 85 D.L.R. (3d) 161, 21 N.R. 295, 40 C.C.C. (2d) 353, 7 C.E.L.R. 53, 3 C.R. (3d) 30, 2 W.C.B. 321, EYB 1978-147041, 1978 CCAN para. 10,004 R. v. Taylor, [2010] M.J. No. 355, 2010 MBCA 103, 262 Man. R. (2d) 43, 263 C.C.C. (3d) 307, [2011] 4 W.W.R. 277, 93 W.C.B. (2d) 658 (C.A.) R. v. Wholesale Travel Group Inc. (1991), 1991 SCC 39, 4 O.R. (3d) 799, [1991] 3 S.C.R. 154, [1991] S.C.J. No. 79, 84 D.L.R. (4th) 161, 130 N.R. 1, J.E. 91-1635, 49 O.A.C. 161, 67 C.C.C. (3d) 193, 38 C.P.R. (3d) 451, 8 C.R. (4th) 145, 7 C.R.R. (2d) 36, 30 A.C.W.S. (3d) 660, 14 W.C.B. (2d) 208 R. v. Williams, [2020] O.J. No. 2218, 2020 ONSC 2237 (S.C.J.) Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 SCC 837, 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 154 D.L.R. (4th) 193, 221 N.R. 241, J.E. 98-201, 106 O.A.C. 1, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 CLLC para. 210-006, 76 A.C.W.S. (3d) 894, D.T.E. 98T-154

Statutes Referred To

Canadian Environmental Protection Act, 1999, S.C. 1999, c. 33, ss. 235(1) [as am.], 272(1) [as am.], (2)(b), (i), (4)(b), 272.1, (1), (2)(b)(i), (4)(b)(i), 287 [as am.], 287.1, (1), (a), (b), (2), (g), (3), (4), (5), Sch. 1 [as am.] Criminal Code, R.S.C. 1985, c. C-46, ss. 220(b), 221(a), 278.2(1)(a) [as am.], 718.1 [as am.], 718.2 [as am.], (a)(iii.1), (b), (e), 718.201, 718.21 Interpretation Act, R.S.C. 1985, c. I-21, s. 34(2)

Rules and Regulations Referred To

PCB Regulations, SOR/2008-273, s. 19(1)

APPEAL by the accused from the sentence imposed by Justice of the Peace M. Duggal dated August 21, 2018 and September 12, 2018 for environmental offences.

H. Akin and E. Taggart, of the Public Prosecution Service of Canada, for respondent Crown. M. Webb, for appellants.

[1] D.E. HARRIS J.: — This is an appeal from sentence. Mr. El-Hinn and his corporation, Collingwood Prime Realty Holdings, pled guilty before Justice of the Peace M. Duggal to all counts on an 11-count information charging them under the Canadian Environmental Protection Act, 1999, S.C. 1999, c. 33 ("CEPA") with failing to dispose of two transformers and eight capacitors containing polychlorinated biphenyls ("PCBs") and with failure to comply with an Environmental Protection Compliance Order to remove this equipment.

[2] The Crown proceeded summarily. The individual received fines totalling $220,000 and a 45-day intermittent jail sentence. The corporation was fined a total of $200,000 for the same offences.

[3] The appellants both appeal against the fines imposed and the individual appellant appeals against the jail sentence. For the reasons below, the appeal of the appellants is allowed against both the fines and the term of incarceration.

The Facts

[4] The individual appellant carries on a business of wholesale liquidation. He owns and operates several corporations and at the time of sentencing, owned approximately 4.5 million square feet of commercial real estate. In February of 2012, Collingwood Prime Reality Holding was incorporated by Mr. El-Hinn: he is the sole director and operating mind. In that same year, it purchased the property at 101 Mountain Road, Collingwood, from the Goodyear Tire and Rubber Company of Canada.

[5] Throughout Collingwood's ownership of the property, it was not used for any commercial or other purpose. The corporation had no income and was operated at a loss. On August 16, 2013, compliance officers from Environment and Climate Change Canada ("ECCC") conducted an inspection of the property assisted by Shirpa Rana, an employee of the appellants. The equipment which was the subject matter of the prosecution was discovered in a room with a sign on the door stating "Danger PCBs". The two transformers had signs from ECCC warning of Askarel and the eight capacitors had warnings for Inerteen. Both liquids contain a significant concentration of PCBs.

[6] PCBs, used in electrical equipment and other industrial applications, are a notorious pollutant. They are highly toxic, slow to break down and accumulate in animal and human tissue. PCBs move up the food chain through animals to humans. Exposure to PCBs causes damage to the nervous system, muscle weakness and cancer. PCBs are listed as a toxic substance in Sch. 1 of the CEPA. The regulations govern the storage, use, labelling and reporting of PCBs. The use of equipment containing a concentration of 500 mg/kg or more of PCBs after December 31, 2009 is prohibited. A person in possession of PCB equipment must convey it to an authorized destruction or storage site. Not to do so is an offence under the CEPA.

[7] The individual appellant was notified soon after the initial inspection about the PCBs on his property. Yet the PCBs were not removed for another four years. This was the key aggravating factor on sentencing.

[8] The authorities issued warnings throughout the four years. Two months after the original inspection, on October 30, 2013, the ECCC officers returned. A written warning was delivered personally a week later. There is some evidence that Ms. Rana, on behalf of the corporation, had some discussions with a company to remove the equipment.

[9] However, when a follow-up inspection was done almost a year later, on September 8, 2014, the equipment still had not been removed. Of concern, as an employee of the appellants advised, a submersible pump had malfunctioned and the basement was flooded. A tray under the two transformers which was intended to catch any leaks of PCB contaminated fluid had become disconnected from the discharge pipe. There was no evidence of leakage but this backup safety system would not have caught PCB fluid if there had been.

[10] On September 19, 2014, the officers attended and issued an environmental protection compliance order ("EPCO") pursuant to s. 235(1) of the CEPA requiring the removal of the equipment by February 7, 2015 and a report providing information about the equipment to be filed by October 21, 2014. This report was never submitted.

[11] The ECCC officers attended at the corporate office on April 27, 2015 and spoke to Ms. Rana. The equipment had still not been removed. Ms. Rana explained that they were dealing with asbestos, sprinkler and gas issues. She asked but was refused an extension of the removal order.

[12] On December 17, 2015, a search warrant was executed by ECCC on the property. One of the transformers was found to be in use. Samples taken from both transformers showed PCB concentrations over 500 mg/kg.

[13] On March 9, 2016, the appellants were jointly charged with the 11 counts they ultimately pled guilty to before Justice of the Peace Duggal. Count 1 charged the use of one of the transformers containing PCBs in contravention of s. 19(1) of the PCB Regulations, SOR/2008-273, thereby committing an offence contrary to s. 272(1) of the CEPA. Count 2 charged under s. 272.1(1) the failure to send or safely store at a PCB storage site the second transformer. Counts 3 through 10 charged the same offence but with respect to each of the eight capacitors. Count 11 charged the failure to comply with the EPCO contrary to s. 272(1) of the CEPA.

[14] In September 2017, an estimate was received for removal of the equipment. Most of the equipment was removed on October 24, 2017. However, one of the removal workers fell and the Ministry of Labour shut down the property until repairs were made. The remaining items were removed from the property on December 20, 2017. The total cost was $110,276.08. Mid-way into the removal process, the corporation went into bankruptcy and the property was sold.

[15] The trial in this matter was set for nine days to begin September 17, 2017. A little over a week before the trial, counsel advised the Crown that the appellants would plead guilty. A lengthy agreed statements of facts was entered into for the purpose of the plea. The sentencing proceedings continued over several days extending into the spring of 2018.

[16] The position of the Crown on sentence for both corporate and individual offenders was consecutive fines for each count: $40,000 for count 1; $10,000 for count 2; $1250 for counts 3-10 each, for a total of $10,000; $170,000 for count 11. The total recommendation was $230,000 for the corporation and the same for the individual. In addition, the Crown sought a three-month jail term for Mr. El-Hinn.

[17] The defence recommended a total fine of $100,000 for the corporation and $25,000 for the individual.

[18] The sentencing justice imposed sentence on August 21, 2018 with fuller reasons released on September 4, 2018. He followed closely the Crown sentencing recommendation, fining the corporation a total of $200,000 and the individual $220,000 and imposing a 45-day intermittent jail sentence on the individual. This was broken down for the individual as consecutive fines: $40,000 for count 1; $10,000 for count 2; $1250 for each of counts 3 through 10; and $160,000 for count 11. The same fines were imposed on the corporation except that for count 11 the fine was $140,000.

The Grounds of Appeal

[19] The appellants raise several grounds of appeal:

(I) The sentencing justice made three errors in principle: (i) the sentencing justice misconstrued the sentencing principles relevant to the regulatory context; (ii) the sentencing justice conflated the CEPA and Criminal Code sentencing factors; (iii) the sentencing justice erred in assessing the aggravating factors. (II) The sentences imposed were demonstrably unfit.

[20] I would reconfigure the appellants' grounds in one respect. A main emphasis under the demonstrably unfit argument was the sentencing justice's purportedly erroneous reliance on the judgment in R. v. Sinclair, [2009] O.J. No. 5318, 45 C.E.L.R. (3d) 222 (C.J.).

[21] In my view, with respect, the appellants are correct that the sentencing justice erred in finding that there was parity between this case and the Sinclair case and that the moral responsibility of Sinclair and Mr. El-Hinn was similar. The result was to fix the appellants' moral culpability at too high a level. Because the comparison between the two cases was a central part of the sentencing justice's reasoning process, this error amounts to an error in principle. As a result, the sentences imposed on the appellants must be revisited. Having done so, I would not impose a jail sentence and would reduce the fines.

[22] I will first analyze the appellants' allegations of other errors in principle, none of which I accept.

The Errors in Principle

i. The sentencing justice misconstrued the sentencing principles relevant to the regulatory context

[23] The appellants argue that the sentencing justice held that the regulatory context was principally focussed on attaining a public policy objective and erred in not recognizing the important purpose of punishing moral blameworthiness.

[24] I would not give effect to this argument. If the sentencing justice discounted or disregarded moral blameworthiness, this would have been an error in favour of the appellants and would have decreased the severity of the sentence imposed. It does not lie in the mouth of the appellants to complain about such an error, an error which could only have benefited them. In any case, I am not convinced that this alleged error was committed by the sentencing justice.

[25] In Ontario (Ministry of Labour) v. New Mex Canada Inc. (2019), 144 O.R. (3d) 673, [2019] O.J. No. 227, 2019 ONCA 30 (C.A.), released after the sentencing reasons in this case, Paciocco J. found on a Crown appeal that the appeal judge had erred in holding that the concept of moral blameworthiness did not apply to regulatory offences (see paras. 60-74). The appeal judge had found that the employer's lack of care for employees ought not to be considered. Justice Paciocco disagreed and held, at para. 61:

It is true that regulatory offences are concerned with attaining public policy objectives and the criminal law punishes according to the degree of the offender's moral blameworthiness. However, this does not mean that moral blameworthiness may not also be a relevant sentencing consideration for regulatory offences.

[26] The appellants' argument is that the sentencing justice, in para. 126 of his reasons, in articulating the applicable principles of sentencing in the environmental sphere, like the appeal judge in New Mex, excluded moral blameworthiness from consideration. However, what the sentencing justice said was, as he indicated, paraphrased from Cory J. in R. v. Wholesale Travel Group Inc. (1991), 1991 SCC 39, 4 O.R. (3d) 799, [1991] 3 S.C.R. 154, [1991] S.C.J. No. 79, at para. 219, as quoted in R. v. Metron Construction Corp., [2013] O.J. No. 3909, 2013 ONCA 541, 300 C.C.C. (3d) 212 (C.A.), at para. 75. The sentencing justice wrote:

The principal focus of regulatory legislation involves a shift from protection of individual interests, deterrence and punishment of acts involving moral fault to protection of public and societal interests. While the criminal law prism general focuses on part conduct, regulatory measures focus on prevention of future harm through minimum standards of care and conduct.

(Emphasis added)

[27] This is virtually word for word what Cory J. said in the Wholesale Travel case except that Cory J. referred to a "shift in emphasis". The omission of the word "shift" from the sentencing justice's paraphrasing is immaterial. Moral blameworthiness was not excluded from sentencing in this case. This ground of appeal must be rejected.

ii. The sentencing justice conflated the CEPA and Criminal Code sentencing factors

[28] This ground of appeal cannot succeed either. It is true that the interplay between the CEPA and the Criminal Code, R.S.C. 1985, c. C-46 aggravating factors can be somewhat confusing but the sentencing justice did not fall into error in the manner alleged by the appellants.

[29] The sentencing principles in the CEPA are set out in s. 287.1:

Sentencing principles

287.1(1) In addition to the principles and factors that the court is otherwise required to consider, including those set out in sections 718.1 to 718.21 of the Criminal Code, the court shall consider the following principles when sentencing a person who is convicted of an offence under this Act:

(a) the amount of the fine should be increased to account for every aggravating factor associated with the offence, including the aggravating factors set out in subsection (2); and

(b) the amount of the fine should reflect the gravity of each aggravating factor associated with the offence.

Aggravating factors

(2) The aggravating factors are the following:

(a) the offence caused damage or risk of damage to the environment or environmental quality;

(b) the offence caused damage or risk of damage to any unique, rare, particularly important or vulnerable component of the environment;

(c) the offence caused harm or risk of harm to human health;

(d) the damage or harm caused by the offence is extensive, persistent or irreparable;

(e) the offender committed the offence intentionally or recklessly;

(f) the offender failed to take reasonable steps to prevent the commission of the offence despite having the financial means to do so;

(g) by committing the offence or failing to take action to prevent its commission, the offender increased revenue or decreased costs or intended to increase revenue or decrease costs;

(h) the offender committed the offence despite having been warned by an enforcement officer of the circumstances that subsequently became the subject of the offence;

(i) the offender has a history of non-compliance with federal or provincial legislation that relates to environmental or wildlife conservation or protection; and

(j) after the commission of the offence, the offender

(i) attempted to conceal its commission,

(ii) failed to take prompt action to prevent, mitigate or remediate its effects, or

(iii) failed to take prompt action to reduce the risk of committing similar offences in the future.

Absence of aggravating factor

(3) The absence of an aggravating factor set out in subsection (2) is not a mitigating factor.

Meaning of damage

(4) For the purposes of paragraphs (2)(a), (b) and (d), damage includes loss of use value and non-use value.

Reasons

(5) If the court is satisfied of the existence of one or more of the aggravating factors set out in subsection (2) but decides not to increase the amount of the fine because of that factor, the court shall give reasons for that decision.

(Emphasis added)

[30] There was a vigorous debate between the parties concerning whether the statutory aggravating factors in s. 287.1(2) are restricted to fines or whether they extend to incarceration as well. In my view, the former conclusion is the correct one. It should first be observed that the initial part of s. 287.1 applies to all sentencing measures. Its language is not restricted to fines. It incorporates by reference the sentencing principles in ss. 718.1 to 718.21 of the Criminal Code.

[31] However, once the provision continues in subsection (1)(a) and (b) and then on to subsection (2)-(5), it applies expressly and exclusively to fines, not imprisonment. This is explicit in subsections (1)(a) and (b). Paragraph (a) states that "the amount of the fine should be increased to account for every aggravating factor" while para. (b) states that "the amount of the fine should reflect the gravity of each aggravating factor" (emphasis added).

[32] When subsection (2) entitled "Aggravating Factors" lists the aggravating factors, it is only logical that this must be a reference to the aggravating factors described in the immediately preceding part of the legislation, i.e., s. 287.1(1)(a) and (b). Those subsections, as noted, apply on their face only to fines, not incarceration. Any interpretative doubt is resolved by subsection (5), which requires the provision of judicial reasons "if the court is satisfied of the existence of one or more of the aggravating factors set out in subsection (2) but decides not to increase the amount of the fine because of that factor" (emphasis added).

[33] The Crown argued that the aggravating factors in subsection (2) apply to incarceration as well as to fines. It is somewhat odd that Parliament, given the opportunity to list the factors applicable to all sentencing outcomes, would not do so. However, as a matter of statutory interpretation, I cannot agree with the Crown's argument. The plain meaning is not in doubt: Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 SCC 837, 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, at para. 21; Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, [2002] S.C.J. No. 43, 2002 SCC 42, at para. 26. There is no ambiguity. It is true that s. 287.1 is unusual and somewhat awkward in its structure. Part of it applies to all sentencing outcomes while part applies only to fines. Despite this structural bifurcation, it is unequivocal.

[34] In the end, however, the appellants' complaint of error cannot succeed. As I understand the appellants' argument, the sentencing justice used the aggravating factors for fines in subsection (2) on the issue of whether there should be imprisonment. This is not borne out by his reasons. He summarized s. 287.1, at para. 74 of his reasons. In paras. 130-135, entitled "Paramount Sentencing Principles", after holding that the Criminal Code aggravating factors in s. 278.2(1)(a) were not present, the sentencing justice referred again to s. 287.1(1)(a) of the CEPA. At para. 135, he explicitly recognized that it was applicable to fines. There is no indication that the sentencing justice applied the provision to the issue of incarceration. Even if he had, the factors in s. 287.1(2) are all legitimate aggravating factors across the board. It is doubtful whether any harm would have been done if s. 287.1(2) had been misinterpreted in the manner argued by the appellants.

[35] I would reject this ground of appeal.

iii. The sentencing justice erred in assessing the aggravating factors

[36] The appellants make several arguments under this heading. First, it is argued that in listing five aggravating factors, at para. 127, the sentencing justice counted one factor twice. He stated as the number two aggravating factor, the "temporal gap in regulatory compliance" and as number five, the "failure to take steps after being warned and being issued an environmental compliance".

[37] These two factors are closely related. However, number two focussed on the time that elapsed between the first warning and compliance, the "temporal gap", while number five concerned the failure to heed the warnings themselves, failing to "take steps after being warned".

[38] This was slicing the aggravating factors thin. Some judges, in their discretion, may have considered the delay together with the warnings as one factor. However, the analytical distinction between the four-year delay and the failure to heed the warnings was justified and correct. There was no error.

[39] The appellants further argue that the sentencing justice erred in finding, at para. 100, that it was an aggravating factor the appellants avoided the cleanup costs of $110,206.08. However, the following paragraphs in the sentencing reasons make it clear that the justice was referring to the use of the property, without disclosing the environmental problem, as an asset to obtain a loan. The sentencing justice held that under the statutory aggravating factor in s. 287.1(2)(g) the appellants' failure to clean-up the hazardous PCBs decreased costs to them, a reasonable conclusion.

[40] The last complaint under this heading is that the sentencing justice erred, at paras. 81-85, in determining that a potential for harm without any evidence of actual harm was an aggravating factor. It is said that he misinterpreted R. v. Terroco Industries Ltd., [2005] A.J. No. 361, 2005 ABCA 141, [2005] A.W.L.D. 1585.

[41] There was no misinterpretation. The sentencing justice said, at the end of para. 83:

When a party fails to take remedial steps to prevent the harm (real or potential), that is an aggravating factor, while reporting, cooperation and implementing corrective actions is a mitigating factor.

[42] This sentence is almost a verbatim reproduction of para. 42 of Terroco. Moreover, it is a correct and reasonable statement of the law.

iv. The sentencing justice erroneously relied on the Sinclair case

[43] I agree with the appellants argument made within the demonstrably unfit part of their argument that the sentencing justice's heavy reliance on the Sinclair case was in error. As mentioned, I would reconfigure this ground as an error in principle as opposed to a factor leading to a demonstrably unfit sentence.

[44] In Sinclair, the offender had purchased a property with pre-existing PCBs. He was ordered to remove them but ignored the repeated orders. He ultimately began to build on the site, causing the PCB-contaminated water to drain off his wetlands into the Bay of Quinte. Sinclair knew that this would occur as a result of the construction work he was undertaking. The total fines on the individual and his corporation amounted to $659,000 and Mr. Sinclair was incarcerated for four months. Upon appeal, Masse J. reduced the fines but upheld the period of incarceration.

[45] The sentencing justice in the case at hand, in a section of his reasons entitled "Application of Cases and Principles -- Caselaw", enunciated at para. 117 the principle of parity from s. 718.2(b) of the Criminal Code: a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances. He noted, at para. 118, that voluminous casebooks had been filed by both parties and there were only two unreported cases of CEPA prosecutions. These cases were not helpful. He then continued on to Sinclair and, after his review of the facts, concluded [at para. numbers 120-122]:

. . . Mr. Sinclair's moral culpability was quite high -- he knew the land had PCBs, ignored Ministry warnings, disregarded various orders and damaged the wetlands with PCBs. . .

The Sinclair decision is extremely instructive. There is no real harm in the case at bar. But the harm that came to pass in Sinclair underscores the significance of complying with environmental orders in a timely, diligent proactive manner. Mr. El-Hinn's moral culpability is similar to the Sinclair case; existing PCBs on land, environmental warnings followed by compliance orders, non-compliance over a long period of time.

There are five cases, which are factually distinguishable because they all had a common denominator -- actual harm to the environment. In this case the focus is on potential harm [footnote omitted].

(Emphasis added)

[46] The Crown, at para. 55 of their factum, supports the sentencing justice's reliance on Sinclair, saying that it was the most analogous of the 68 cases filed at the sentencing hearing. With respect, I disagree. The sentencing justice committed an error in principle when he equated Mr. El-Hinn's moral culpability to Sinclair's. Sinclair had a much more blameworthy state of mind than Mr. El-Hinn. Sinclair, contrary to outstanding orders against him, had intentionally proceeded to remove barriers which he knew had filtered or blocked PCB contaminated water from flowing off his property into the Bay of Quinte. Sinclair was a case of knowingly and intentionally polluting the environment.

[47] In the same vein, it was not correct to say as the sentencing justice did that "the harm that came to pass in Sinclair underscores the significance of complying with environmental orders in a timely, diligent proactive manner". This too wrongly equated Sinclair to this case. To be sure, like in this case, there were compliance delays and foot dragging in Sinclair. But the environmental harm was not caused by delay or negligence; the harm in Sinclair was caused by deliberate acts of pollution.

[48] There were other important, albeit less fundamental distinctions between the moral culpability of Sinclair and Mr. El-Hinn. Sinclair had referred to the Provincial Officer in a letter as "demented" and called him a "troglodyte", "moron", "lunatic", "brain dead" and referred to the order to comply as "stupid". In addition, there was no remorse. A trial was held which lasted more than ten days.

[49] Justice Masse summed up the aggravating features, at para. 135:

. . . the moral culpability of Mr. Sinclair is quite significant. He knew that the site was contaminated with PCBs. He intentionally dug up trenches to drain the wetlands and marshes knowing that by so doing, PCB contaminated sediments would be transported into the Bay of Quinte. His motivation for doing so was to increase profits or to decrease costs. He ignored warnings of the Ministry. He totally disregarded lawful Orders of the Provincial Officers, the Director and even the Court. He devastated the wetlands on the property without regard to the effect of doing so on the environment. There was actual damage to the Bay of Quinte and that damage, in view of the toxicity of PCBs, was significant. He denied the toxicity of PCBs even though such is well known. His actions were deliberate, flagrant and calculated and continued over a lengthy period of time. He showed no remorse. His attitude towards Ministry personnel was deplorable and extremely insulting. He was totally un-cooperative. His actions were taken with callous disregard for the environment or for the law.

(Emphasis added)

[50] In the case at hand, the appellants' culpability was of a lower degree. It lay in passive negligence. That is a fundamental distinction from Sinclair. To quote a comment in New Mex, at para. 64, which followed consideration of R. v. Sault Ste. Marie (City), 1978 SCC 11, [1978] 2 S.C.R. 1299, [1978] S.C.J. No. 59, at pp. 1325-26 S.C.R., "[T]hose with guiltier minds tend to deserve or require greater punishment": also see Terroco, at para. 35. Moreover, unlike Sinclair, who was acting under a profit motive, the appellants were not attempting to make a profit at the expense of the environment, they were attempting to avoid cleanup costs. This also tended to lead to a lower level of culpability. Second, Mr. El-Hinn did not exhibit the reprehensible attitude and lack of remorse that Sinclair did. Mr. El-Hinn's relations with the authorities further served to differentiate him from Sinclair. Although there were unconscionable delays in compliance, Mr. El-Hinn ultimately pled guilty and the sentencing justice found he was remorseful.

[51] Lastly, the sentencing justice seemed to understand that Sinclair was a case of actual harm and the appellants' case was of potential harm. However, after the discussion of Sinclair quoted above, the sentencing justice, in para. 122, excluded from consideration five other cases that he said were distinguishable because they featured actual harm. On that basis, Sinclair should have been distinguished as well.

[52] In summary, with respect, analogizing Mr. El-Hinn's moral culpability to Mr. Sinclair's was untenable. Mr. El-Hinn's culpability was of quite a different order than was Sinclair's.

[53] The sentencing justice found that Sinclair was "extremely instructive". The discussion of Sinclair was a central component of the reasons leading to the sentences imposed. Culpability was the most important factor in this sentencing. Mr. El-Hinn's sentence was erroneously increased as a result of this error: see New Mex, at para. 73. With respect, the erroneous reliance and analogy to Sinclair's moral culpability constitutes an error in principle. Deference to the trial decision is lost and the appellants must be sentenced afresh: R. v. Friesen, [2019] S.C.J. No. 100, 2020 SCC 9, at para. 26; R. v. Lacasse, [2015] 3 S.C.R. 1089, [2015] S.C.J. No. 64, 2015 SCC 64, at paras. 44, 49. In light of this conclusion, it is not necessary to specifically address the appellants' demonstrably unfit submissions.

Should a Period of Incarceration be Imposed?

[54] Dealing first with the jail sentence, because of the four-year-plus delay in compliance and the flouting of the warnings and the orders, particularly the EPCO, a jail sentence lay in the range of appropriate and proportionate sentences for Mr. El-Hinn. However, I would not exercise my discretion to impose a jail sentence for several reasons.

[55] A jail sentence should only be imposed if it is necessary to vindicate the pertinent sentencing principles. Section 287.1(1) of the CEPA incorporates by reference the restraint principle from s. 718.2(e) of the Criminal Code. The fundamental sentencing principles under the CEPA are specified in s. 287 and include general deterrence, specific deterrence, denunciation of harm and the risk of harm and the "polluter pays" principle ensuring that the offender is held responsible for cleanup and restoration.

[56] The sentencing justice, as mentioned above, did not have the benefit of Paciocco J.'s judgment in New Mex. In that case, Paciocco J. clarifies the importance of restraint in sentencing for regulatory offences and comments on incarceration for regulatory offenders. In reference to restraint, relying on R. v. Priest (1996), 1996 ONCA 1381, 30 O.R. (3d) 538, [1996] O.J. No. 3369 (C.A.), at p. 545 O.R., for first offenders a sentencing judge should explore other dispositions before jail is imposed. This principle is of decreased force in the regulatory context but is still important. Furthermore, a sentence should be the minimum necessary and be the least restrictive sanction required to satisfy the pertinent sentencing principles: New Mex, paras. 76-83.

[57] With respect to incarceration, Paciocco J. points out that it is relatively uncommon in the regulatory context. As stated on several occasions by the Court of Appeal, including in New Mex, fines are usually sufficient as a means of regulatory enforcement: New Mex, at para. 84; Metron at para. 78; R. v. Cotton Felts Ltd., 1982 ONCA 3695, [1982] O.J. No. 178, 2 C.C.C. (3d) 287 (C.A.), at p. 294 C.C.C. Justice Paciocco, however, was at pains to clarify that incarceration is an available and appropriate sanction in some cases [New Mex, at para. 86],

The reason why fines are typically imposed in regulatory prosecutions is that fines tend to be sufficient to achieve the deterrence required. When this fact is combined with the general principle of restraint just described, and with the principle of parity, the natural outcome is that sentences of incarceration are not apt to be common. However, the proposition that "incarceration is rarely imposed" for regulatory offences is not a principle of sentencing.

[58] Examining the case at hand, the degree of fault in this case was high. However, I do not agree with the respondent Crown that it was on a par with willful conduct or was on a criminal scale. Willful conduct was what Sinclair did in knowingly and intentionally polluting Lake Ontario. There can be no question that the four-year-plus delay and the lack of response to the inspectors and the EPCO was nothing short of egregious. But it was negligence, not full criminal mens rea.

[59] Furthermore, this was a case of potential harm, not actual harm. The Alberta Court of Appeal in Terroco summed up the correct approach, at para. 48:

An offender lucky enough to avoid actual harm should not benefit from the intervention of luck: see U.K. Sentencing Advisory Panel at para. 17. Where there is potential for harm that is avoided by fortuitous circumstances, that potential is a relevant factor. As many environmental protection statutes prohibit the creation of potential harm and not just actual harm, the potential may often be the focus of the harm principle.

(Emphasis added)

[60] In measuring moral blameworthiness and the need for general deterrence and denunciation, an assessment of the risk created by the appellants inaction is necessary. In some rare cases, a precise quantification of risk may be possible. It is not in this case because the likelihood of the PCBs leaking was unknowable. But the risk of them leaking was increased by the failure of the backup system for catching contaminated fluid and, most importantly, the protracted delay in addressing the problem. The risk of leakage over a four-year period was much greater than the risk would have been over a four-month period, for example.

[61] In addition, in evaluating risk, the damage caused if a leak occurred must be part of the analysis. In this case, there was a substantial quantity of PCBs and it is not difficult to infer that leakage of such a toxic chemical would have been disastrous.

[62] In summary, the potential harm to the environment was real and substantial. Some comment should also be made concerning the fact that there was no actual harm caused. The absence of actual harm is not a mitigating factor but is an important circumstance in properly characterizing the offence. Consequences caused by an offender are always relevant to the question of sentence. Section 718.2(a)(iii.1) of the Criminal Code requires a court to take into account harm to the victim. The more significant the harm caused, the higher the sentence. For example, causing death by criminal negligence is punishable by a maximum of life in prison (s. 220(b) of the Criminal Code). Causing bodily harm by criminal negligence has the same elements except for the different, lesser consequence. It is punishable by a much lower maximum: ten years if the Crown proceeds by indictment (s. 221(a)).

[63] The law, in the criminal context, does not treat as severely the "lucky" offender who causes a lower level of harm. Because of the greater emphasis in environmental law on the future as opposed to the past and the primacy of general deterrence, the approach must be differentiated to some extent from the approach in criminal law. Nonetheless, actual harm in environmental cases as exemplified by the case law remains an important aggravating factor. It is not present in this case.

[64] Moving to the circumstances of the offender, Mr. El-Hinn is a first offender. The corporation, however, of which he is the directing mind, has been convicted of numerous fire code violations.

[65] Mr. El-Hinn was 52 years old at the time of sentencing with a high school education. His businesses employ over 500 employees. Despite having some financial issues, it is apparent that he is a very wealthy man. He has three young adult daughters, a son who was ten months old at the time of sentencing and an eight-year-old stepson. He is also the father of twins born in July 2018. Mr. El-Hinn has donated to various charities including an organization that assists Holocaust survivors.

[66] Although there were some financial difficulties Collingwood was facing, the cleanup costs could have and should have been undertaken promptly. A silo approach to the corporate entity and the individual would be inappropriate. Mr. El-Hinn easily had the means to do what was legally required of him.

[67] The appellants both pled guilty although their intention to do so was only conveyed a few days before the commencement of the trial. The sentencing justice gave them credit both for remorse and for the saving of court time. I agree that these were important mitigating factors. The saving of nine days court time, in our Central West jurisdiction besieged with unacceptable delay for decades now, is a very important factor in mitigation.

[68] The maximum sentence of incarceration for counts 1 and 11 was six months (s. 272(2)(b)) but jail was not available for the other counts. A conditional sentence was available for counts 1 and 11: Interpretation Act, R.S.C. 1985, c. I-21, s. 34(2). In light of the restraint principle discussed above, a conditional sentence had to be contemplated before incarceration was imposed.

[69] I have read the cases put forward as precedents by the appellants and the respondent. Like the sentencing justice, I find them unhelpful in determining a sentence in this case. Most are cases of actual harm with substantially higher moral culpability than in this case: see the discussion in R. v. Alpha Manufacturing Inc., [2005] B.C.J. No. 2598, 2005 BCSC 1644 (S.C.), at paras. 31-38. While these cases are not without some relevance, they are of limited assistance for the reasons explored above. Furthermore, as is so often true in sentencing, the factual permutations are so varied that analogies between those cases and this one are difficult to draw. This process is further hampered by the sparsity of sentencing cases in this general area: see Terroco, at paras. 64-65.

[70] Lastly, in deciding whether a jail sentence is imposed, I am in the position of a judge at first instance. The COVID-19 crisis must be taken into account. In this case, the public interest in a jail sentence, gauged by the short 45-day intermittent sentence imposed by the sentencing justice, was not strong. On the other hand, the threat to an individual in jail presented by the virus has been well-documented and is not insubstantial: R. v. Williams, [2020] O.J. No. 2218, 2020 ONSC 2237 (S.C.J.), at paras. 65-89. This militates against a jail sentence for Mr. El-Hinn.

[71] I am heartened in this conclusion by the knowledge that in response to the virus threat in the jails and in order to reduce capacity, the Ministry of the Solicitor General has seen fit to provide immediate Temporary Absence Program admission to all those offenders facing intermittent sentences (see response to covid-19 information note, Ministry of the Solicitor General, Institutional Services Division, Assistant Deputy Minister's Office, May 5, 2020, p. 8). Those individuals with intermittent sentences will not have to serve time in correctional institutions.

[72] I am aware of the general distaste for considering post-sentencing decisions by jail and parole administrators in crafting a sentence. But the decision of the authorities here is significant for what can be drawn from it with respect to the state of our prisons. The judgment of those in charge of the jails who have the most up to date and reliable information supports the conclusion that at present, there is an additional hardship and threat to inmates in prison. This fortifies the conclusion that the individual and collective cost of an intermittent jail sentence in the time of COVID-19 outweighs any benefit to the public interest.

[73] In all the circumstances, substantial fines are sufficient to fulfill the pertinent sentencing objectives. For these reasons, I decline to impose a jail sentence on Mr. El-Hinn.

Should the Fines be Reduced?

[74] The fines imposed between the appellants totalled $420,000: $220,000 for the individual, $200,000 for the company. In view of the steadfast refusal of the appellants to undertake the cleanup of the PCBs over a period of years, fines of this general magnitude were warranted. The defence submissions for total fines of $125,000 was below the available range of sentence and would be disproportionate to Mr. El-Hinn's culpability and the seriousness of the offences. However, for the following reasons, I would reduce the fines upon this re-sentencing.

[75] The first reason I would reduce the fines is because of the appellants' moral culpability being lower than determined by the sentencing justice. This follows from the error in principle identified above. In addition, the sentencing justice seemed to believe there were several wrongs committed by the appellants here. Exercising my discretion, I would modify this approach.

[76] The sentencing justice imposed consecutive sentences for each count. To recap (see para. 18 above for the specifics), count 1 related to use of one of the transformers, count 2 charged failure to dispose of the second transformer, and counts 3 through 10 referred to the failure to dispose of each of the eight capacitors. Count 11 referred to the failure to comply with the EPCO. The sentencing justice found that count 1, counts 2 to 10 and count 11 embodied "differently protected legal interests in terms of penalties" (see para. 141).

[77] In my view, although totality is always the ultimate gauge of sentence proportionality when sentencing for multiple counts, logic dictated that counts 1 through 10 should be dealt with as essentially one and the same delict. The allegation in count 1 of use of the transformer was somewhat more serious than the others in this category. The general risk of leakage would likely be higher from a transformer that was being used than one that was not. But other than this aspect, counts 1 through 10 were the same allegations with respect to ten different pieces of equipment all containing PCBs and housed in the same room on the same property.

[78] As stated recently by the Supreme Court in Friesen (para. 155), "the general rule is that offences that are so closely linked to each other as to constitute a single criminal adventure may, but are not required to, receive concurrent sentences, while all other offences are to receive consecutive sentences". In R. v. Taylor, [2010] M.J. No. 355, 2010 MBCA 103, 263 C.C.C. (3d) 307 (C.A.), at para. 11, the language used to describe counts which ought to be sentenced concurrently was "sufficiently interrelated" and "a reasonably close nexus". In this case, the ten counts are unified by the failure to dispose of each piece of equipment as was required. This was a single act of malfeasance and ought not to be broken down into separate sentences. For this reason, I would exercise my discretion somewhat differently than did the sentencing justice. Counts 1 through 10 should be viewed as one wrong and yield concurrent sentences if possible.

[79] Count 11, the violation of the EPCO, is different and should be consecutive in order to give teeth and reinforce the importance of compliance with government orders in the environmental field. The deterrence and denunciatory impact of the sentence would be muted if this sentence were not consecutive (see by analogy the importance of consecutive sentences when there is a possession of firearms count and a count charging violation of a firearms prohibition order, e.g., R. v. Graham, [2018] O.J. No. 5993, 2018 ONSC 6817 at para. 41).

[80] In summary, conceptually there were two wrongs committed by the appellants, not 11. However, concurrent sentences present a problem in view of the insufficiency of the offence maximums. Counts 1 and 11 charged offences under s. 272(1) of the CEPA. For a "small revenue corporation" like Collingwood, the minimum fine under s. 272(4)(b) is $25,000 with a maximum of $2,000,000. For an individual, the sentence under s. 272(2)(b)(i) is a fine of not less than $5,000 and not more than $300,000.

[81] Counts 2 through 10 charged offences against s. 272.1. This is a much less serious offence. This is where the problem presents itself. Section 272.1(4)(b)(i) provides that for a small revenue corporation, the maximum is a fine of not more than $50,000. For an individual, s. 272.1(2)(b)(i) limits the fine for a first offence to a maximum of $25,000.

[82] Although I would have preferred to have made 1-10 concurrent to each other, for the individual the maximum fine for counts 2-10 is only $25,000. In light of that, concurrent sentences for counts 1 to 10 are not sufficient. Some of the sentences will have to be consecutive but with the underlying concept that they penalize essentially one act of wrongdoing.

[83] The methodology I would use in setting the amount of the fine is to relate the fines to the cost of the cleanup. A regulatory offender must not only shoulder the cost of the cleanup (or surrender the benefit that they have garnered from the misconduct) but must be subject to punitive sanctions to advance deterrence and denunciation. Here, the sentencing justice had imposed fines approximately four times the cleanup cost. For the reasons indicated, I would reduce this to fines of approximately three times the cost of the clean up, or $330,000. This amount is proportionate to the offences and the offenders.

[84] Based on the aggravating factors stipulated in s. 287.1 of the CEPA and the other pertinent factors including those identified by the Court of Appeal in Cotton Felts Ltd., at p. 294 C.C.C., I would vacate the fines imposed by the sentencing justice, and in their place, order fines of $170,000 for the individual and $150,000 for the corporation, broken down as follows:

For Mr. El-Hinn, -- on count 1, $60,000 consecutive to the other counts; -- on counts 2 through 10, a fine of $20,000 concurrent on each count but consecutive to counts 1 and 11; -- on count 11, a fine of $90,000 consecutive to the other counts.

For Collingwood Prime Realty, -- on count 1, a fine of $25,000 consecutive to the other counts; -- on counts 2 through 10, a fine of $50,000 concurrent on each count but consecutive to counts 1 and 11; -- on count 11, a fine of $75,000 consecutive to the other counts.

[85] There will be nine months to pay. Like the sentencing judge, I would waive the victim surcharge.

Appeal allowed.

End of Document