Court File and Parties

Court File No.: Hamilton POA #10-3620 Date: 2013-01-15 Ontario Court of Justice

Between: Her Majesty the Queen Respondent

— And —

1820419 Ontario Inc. Appellant

Before: Justice M. Speyer

Heard on: January 8, 2013

Reasons for Judgment released on: January 15, 2013

Counsel:

• V. L. Reid for the Respondent
• D. D. Paquette for the Appellant

M. SPEYER J.:

[1] Introduction

1820419 Ontario Inc. brings an application for costs on an appeal from a conviction under the Liquor Licence Act of Ontario. This application is made under section 129 of the Provincial Offences Act, R.S.O. 1990, c. P-44.

FACTS

[2] Summary of Facts

The facts upon which the application is based are not in dispute and can be summarized as follows:

[3] Original Conviction

On February 23, 2011, the appellant was convicted in absentia that it "did being a licence holder of a place to wit: The Blue Mountain Bar, 11 Hess Street South, Hamilton failed to ensure that the number of persons on the premises to which the license applies, including employees of the licence holder did not exceed the capacity of the licenced premises as stated on the licence" contrary to s. 43 of O. Reg. 719 under the Liquor Licence Act of Ontario. The Appellant was fined $5000.

[4] Amendment to Information

The appellant was not given notice of the charge. The Information upon which the proceedings were based charged 1419664 Ontario Inc. of this offence. A summons was issued to this defendant. No one representing this numbered company attended on the day of trial. At the outset of the trial, the prosecutor sought an amendment to the Information changing the name of the defendant to 1820419 Ontario Inc. The prosecutor advised the court that:

"It appears that a officer of the corporation passed away prior to the last trial date and as such the corporation changed. They allowed 1419664 Ontario Incorporated to lapse and re-named under 1820419 Ontario Incorporated."

[5] Allowance of Amendment

Based on this request, the justice of the peace allowed the information to be amended to reflect a different defendant: the appellant.

[6] Appeal and Quashing of Conviction

On March 6, 2012, the appellant received notice of a fine in respect of the February 23, 2012 conviction. The principal of the corporation, Josie Di Trapani, acted quickly to appeal this conviction. On August 21, 2012 the matter came before me for an appeal of the conviction. On consent of the Crown, I allowed the appeal and quashed the conviction. The matter of costs was adjourned for argument to January 8, 2013.

ISSUES BEFORE THE COURT

Jurisdiction

[7] Authority to Award Costs

The first issue to be addressed is whether this court has jurisdiction to grant costs on an appeal. The appellant relies on section 129 of the Provincial Offences Act which provides express authority for an appeal court to make any award with respect to costs that it considers just and reasonable. It states as follows:

Costs

129.--(1) Where an appeal is heard and determined or is abandoned or is dismissed for want of prosecution, the court may make any order with respect to costs that it considers just and reasonable.

Payment

(2) Where the court orders the appellant or respondent to pay costs, the order shall direct that the costs be paid to the clerk of the trial court, to be paid by the clerk to the person entitled to them, and shall fix the period within which the costs shall be paid.

Enforcement

(3) Costs ordered to be paid under this section by a person other than a prosecutor acting on behalf of the Crown shall be deemed to be a fine for the purpose of enforcing its payment.

[8] Charter Authority

The appellant submits that a provincial offences court also has jurisdiction to award costs under section 24(1) of the Charter of Rights and Freedoms (see R. v. 974649 Ontario Inc. 2011 SCC 58, [2011] 3 S.C.R. 575). The Crown concedes that this court has jurisdiction to award costs under section 129 of the POA. It argues however, that the appellant's failure to bring a proper Charter application on the appeal, bars it from seeking a Charter remedy.

[9] Basis of Application

In oral argument, counsel for the appellant indicated that although the Charter is a possible source of authority for an order of costs, the basis for this application is under s. 129 of the POA act. Accordingly, it is not necessary for this court to determine whether on the facts of this case, an order for costs could be granted pursuant to section 24(1) of the Charter.

[10] Court's Finding on Jurisdiction

I am satisfied that this court has jurisdiction to make an order for costs on the appeal pursuant to section 129 of the POA.

Is this an appropriate case in which to make such an order?

[11] Costs Awards Not Ordinarily Granted

While a provincial offences appeal court has the power to grant an award of costs, such orders are not ordinarily granted (see: R. v. Felderhof (2003), 68 O.R. (3rd) 481 (C.A.), at para 100 and R. v. 974649 Ontario Inc., supra, at para. 85)

[12] Limited Appellate Guidance

There is little guidance from the appellate courts as to how section 129 of the POA is to be applied. The appellant relies on R. v. Garcia, [2005] O.J. No. 732 (C.A.) which considered an application for costs on a summary conviction appeal under section 826 of the Criminal Code. That section states as follows:

Costs

826. – Where an appeal is heard and determined or is abandoned or is dismissed for want of prosecution, the appeal court may make an order with respect to costs that it considers just and reasonable.

[13] Parallel Provisions

The wording of this section mirrors that found in section 129 of the POA. Section 2 of the POA contemplates that judicial interpretation of similar provisions of the Criminal Code can be applied to the corresponding provisions of the POA. The Crown agrees with the appellant that cases in which section 826 of the Criminal Code was considered apply to s. 129 of the POA and that R. v. Garcia, supra, sets out the test to be applied on such applications.

[14] The Garcia Test

In R. v. Garcia, at para. 13, the Ontario Court of Appeal held that there are generally two broad categories of cases where orders of costs against the Crown have been made. The first category consists of cases where the conduct of the prosecution is said to merit sanction in the form of an award of costs. The second category consists of cases where there has been no Crown misconduct, but other "exceptional circumstances exist such that fairness requires that the individual litigant not carry the financial burden flowing from his or her involvement in the litigation".

[15] Prosecutor's Conduct

The appellant argues that the prosecutor in this case was, at best, unacceptably negligent in seeking an amendment to the Information. The effect of the amendment was to substitute one accused for another without any notice whatsoever to the newly charged accused. The Crown takes the position that the prosecutor made an error, but such error was not malicious or flagrantly improper. Ms. Reid points to page 10 of the transcript in which the prosecutor essentially advises the court that based on information he had received, the corporation merely changed names.

[16] Duty to Notify

There is no doubt in this case that the effect of the amendment was to substitute one accused for another. The appellant was convicted of a fairly serious offence under the Liquor Licence Act without ever receiving any notice of the offence or trial date. A conviction under this act is no trivial matter. The fine for the offence was $5000 and a conviction may impact on the appellant's suitability to obtain or keep a liquor licence. Accordingly, the prosecutor had a duty to notify the appellant if it intended to charge it under the Liquor Licence Act.

[17] Procedural Safeguards

I agree with the appellant that although section 34 of the POA gives the prosecutor the ability to seek, and the court the power to grant, an amendment to an Information, an amendment to change the name of the defendant is not contemplated by this provision. Section 26 of the POA requires that a defendant must be named in and served with a summons setting out the charge against it. Section 54 provides that a defendant can be convicted in absentia where the prosecutor proves that the summons or notice of trial was served on the defendant. Amending the Information to change the name of the defendant, in the absence of that defendant, runs contrary to these provisions. At the very least, the prosecutor should have requested an adjournment of the trial to properly serve a summons or notice of trial on the appellant. In failing to do so, the prosecutor carelessly disregarded the procedural safeguards afforded to the appellant under the POA.

[18] Misconduct Analysis

Having found that the prosecutor was careless in seeking an amendment to the Information in the absence of the defendant, is this sufficient "misconduct" as contemplated by R. v. Garcia, supra, to make an award of costs? The appellant argues that this level of negligence, even though not made in bad faith, is sufficient. I am not satisfied that it is. I come to this conclusion because it is apparent from page 10 of the transcript that the prosecutor believed, based on information in his possession, that the amendment was required to reflect a change in the name of the original defendant, as opposed to substituting one defendant for another. As it turned out, he was wrong. However without evidence showing that the prosecutor knew that he was wrong, or was wilfully blind as to the correctness of his knowledge, I am not satisfied that his conduct was so oppressive or improper as to merit an award of costs against the Crown.

[19] Exceptional Circumstances

The second category of cases identified by the Court of Appeal in R. v. Garcia, are those cases where such exceptional circumstances exist that fairness requires that the individual litigant not carry the financial burden of flowing from his or her involvement in the litigation. On the facts of this case, I am satisfied that the circumstances of this case fall within this second category.

[20] Crown's Argument on Exceptional Circumstances

The Crown argues that this category of cases is reserved only for test cases where a Crown appeal is required to resolve a controversial and important legal issue transcending the particular circumstances of the individual litigant. In support of this argument, Ms. Reid points to the facts in R. v. Garcia, and the cases cited in that decision, namely R. v. Trask, [1987], 2 S.C.R. 304, 37 C.C.C. (3d) 92 at 94-95, R. v. Gagnon (2000), 147 C.C.C. (3d) 184 at 190 (Que.C.A.) and R. v. Veri, [2000] O.J. No. 384 (C.A.).

[21] Broad Discretion Under Section 129

Section 129(a) of the POA grants the court discretion to make any order with respect to costs that it considers "just and reasonable". In R. v. Trask, supra, the Supreme Court of Canada held that the intent of the Criminal Code provisions dealing with costs on summary conviction appeals was to provide judges with broad discretion. I do not agree that absent Crown misconduct, the court's discretion to award costs in provincial offences appeals is limited to test cases. To so hold would be to unduly restrict the plain language and intent of s. 129 of the POA.

[22] Fairness Requires Relief

1820419 Ontario Inc. was convicted without ever being issued a summons or served with notice that it had even been charged. It had no opportunity to argue at trial whether it should have been named as a defendant, or given an opportunity to defend the charge on its merits. In addition, through no fault of its own, the appellant was required to retain counsel to bring this appeal to have the conviction quashed. In the unusual circumstances of this case, fairness demands that the appellant be relieved of the financial burden of the costs of this appeal and application.

[23] No Knowledge of Charge

There is no evidence to support the argument by the Crown that the principal of the appellant corporation, Josie Di Trapani, was an officer of 1419664 Ontario Inc. at the time of the offence, and as such had knowledge of the charge. The fact is that through no fault of its own, the corporate appellant was wrongly convicted of the offence and was required to bring an appeal to clear its name.

What is the appropriate quantum of costs?

[24] Discretion in Determining Quantum

There is little judicial interpretation of section 129 of the POA or s. 826 of the Criminal Code, as to how the court should decide the quantum of costs. In R. v. Trask, supra, the Supreme Court of Canada held that the intent of the Criminal Code provisions dealing with costs on summary conviction appeals was to provide judges with broad discretion. The court held there are no absolute rules governing costs in summary conviction appeals and it rejected arguments that costs should follow the cause, or that solicitor-client costs should be the norm where there has been a Charter violation.

[25] Full Indemnity

In the circumstances of this case, I have determined that fairness demands that the appellant be compensated for the financial burden of its involvement in this litigation. The appellant seeks full indemnity, including the cost of arguing the application for costs. I see no reason why the appellant should not be fully compensated. Given the nature and complexity of this case, the amount claimed by the appellant is reasonable.

[26] Order for Costs

Accordingly, there will be an award of costs against the Crown in favour of the appellant in the amount of $4,520.00, payable within 30 days.

Released: January 15, 2013

Signed: "Justice M. Speyer"