Court File and Parties
Ontario Court of Justice
Date: 2017-09-19
Court File No.: Barrie 3860-999-16-0479-00
In the Matter of: An appeal under clause 116(2)(a) of the Provincial Offences Act, R.S.O. 1990, c. P.33, as amended
Between:
Her Majesty the Queen (Ministry of Labour) Appellant
— AND —
Guildwood Construction and Peng Zhao Respondents
Before: Justice E.A. Carlton
Heard: August 1, 2017 at Barrie POA Appeal Court
Reasons for Judgment Released: September 19, 2017
Counsel
T. Wong — counsel for the prosecution
The defendant P. Zhao — on his own behalf
Background
On appeal from a sentence imposed by Justice of the Peace Hilton on June 28, 2016.
Carlton J.:
Decision
[1] Nature of Appeal
This is an appeal by the Crown, represented by the Ministry of Labour, of sentence on two convictions under the Occupational Health and Safety Act.
[2] Respondents
The respondents on this appeal are Guildwood Construction and the worksite supervisor Mr. Peng Zhao. Mr. Zhao is also the owner of Guildwood Construction.
[3] Guildwood Construction Conviction
Guildwood Construction pled guilty to failing to carry out the measures and procedures prescribed by section 26.1(2) of Ontario Regulation 213/91 at a project in Barrie Ontario on April 7, 2015. This creates an offence under section 25(1)(c) of the Occupational Health and Safety Act.
[4] Mr. Zhao Conviction
Mr. Zhao pled guilty to the charge of failing as a supervisor to ensure that a worker works in the manner and with the protective devices, measures and procedures prescribed by section 26.1(2) of the same regulation. This creates an offence under section 27(1)(a) of the Occupational Health and Safety Act.
[5] Particulars of Offence
The measures and procedures that both the company, Guildwood Construction, and the supervisor, Mr. Zhao failed to carry out are particularized as follows:
The defendant failed to ensure that a worker was adequately protected by at least one of the methods of fall protection prescribed by the regulation when on the roof and exposed to a fall of 3m or more.
[6] Original Sentence
Both respondents pled guilty on June 28, 2016. The Learned Justice of the Peace imposed a sentence of a $1,000.00 fine on Guildwood Construction and a $500.00 fine on Mr. Zhao.
[7] Basis of Appeal
The Crown has appealed those sentences under s. 122 of the Provincial Offences Act.
[8] Appeal Hearing
The appeal was heard on August 1, 2017. Mr. Wong appeared on behalf of the appellant Ministry of Labour. Mr. Zhao appeared on behalf of Guildwood Construction and on his own behalf.
Plea Proceedings of June 28, 2016
[9] Representation
Plea and sentencing occurred on June 28, 2016. Mr. Zhao represented himself personally and represented Guildwood Construction as the owner and director of that company.
[10] Facts of the Incident
Guildwood Construction operates as Guildwood Roofing. On April 7, 2015 the company was carrying out a roofing project at an address on Hershey Crescent in Barrie Ontario. Mr. Zhao was the supervisor of that project. The project was to remove and replace shingles on a two-storey residence.
[11] The Fall
One of the employees, Zhi Can Zhong, was cleaning debris on the roof. He was wearing a harness but there were no ropes and Mr. Zhong was not connected or tied in to any fall protection. Mr. Zhong lost his footing and fell approximately 6 meters to the ground. Mr. Zhao, although the supervisor, had temporarily left the site at the time of the incident.
[12] Injuries Sustained
Mr. Zhong sustained serious injuries from the fall. He fractured his pelvis, he had breaks in both arms requiring surgeries and had cuts to his head requiring stitches. These injuries are considered "critical injuries" under Ontario Regulation 834/90.
[13] Mr. Zhao's Explanation
In clarifying the facts Mr. Zhao stated that:
Mr. Zhong, he probably had a short period of experience but all my workers had to be trained. He had gone through all the training and out of all the six workers, he's one of the more experienced ones. If I'm away he will be the person taking care of the supervising role, and he was the person who went to get the garbage. The reason he fell was because he went to get the garbage and he fell.
So as work is concerned when you complete the work, the last step was to remove the anchor from your harness. So he was doing that because he finished working. That's why he removed the anchor from the harness – harness from the anchor.
[14] Crown's Position on Facts
This characterization of the offence was not disputed by the Crown.
[15] Prior Record
No prior record was alleged against either the corporation or Mr. Zhao.
[16] Crown's Sentencing Position
The Crown sought fines of $15,000.00 and $5,000.00 against the company and Mr. Zhao respectively.
[17] Crown's Sentencing Submissions
The Crown noted the serious injuries sustained and relied on the principles of specific and general deterrence. The Crown relied on a chart of sentencing cases with similar facts from the Annotated Occupational Health and Safety Act to justify its position.
[18] Defence Sentencing Submissions
Mr. Zhao advised that Court that he felt "safety was paramount" and that all of his workers had received safety training. After the incident he sent his workers to receive training on new safety regulations. Proof of this was filed as an exhibit. Mr. Zhao relayed that the company had two full time and two part time workers and that they were all covered by WSIB.
[19] Initial Sentencing Decision
This appeared to complete the defence submissions on sentence. The Learned Justice of the Peace then commenced giving reasons for fines of $12,000.00 on the company and $2,500.00 against Mr. Zhao. The Court emphasized the principle of general deterrence in these remarks. The Court took into account the training that had occurred since the incident.
[20] Re-opening of Sentencing
After the Court had set out its views, Mr. Zhao and his wife indicated that they wished to make a submission about the financial state of their company. The Court described its earlier comments as "my final decision" but the Court then decided to "strike my decision on sentencing" and heard additional submissions from the defendants. The Crown was not opposed to the procedure. Later, the Court offered to strike the plea but the Crown stated that he "didn't discern any unfairness" in respect of the re-opening of submissions.
[21] Financial Submissions
The defendants wanted to file their own "Defendant's Statement of Facts". The Crown objected to most of the content of that document but did consent to the filing of the company's financial statements for 2014, an income statement of the company for 2015 and the Canada Revenue Agency Notice of Assessment for Mr. Zhao for 2015. Ms. Li, Mr. Zhao's spouse, spoke about the financial state of the company and their family and that Mr. Zhao has worked hard to create a viable business.
[22] Financial Details
The financial statements showed that company had a net income of $733.00 in 2013 and $21,860 in 2014. The income statement of the company for 2015 shows a net income of $13,481.54 and that the company had $57,450.17 in cash as of December 31, 2015. Sales ranged from $176,876 in 2013 to $279,114 in 2015. The Canada Revenue Agency assessment shows that Mr. Zhao had an income of $48,051 in 2015.
[23] Final Sentencing Reasons
The Learned Justice of the Peace then gave reasons for sentence. She noted that she had not heard of any work orders against the company and nor were there any prior convictions. She noted that the company had provided safety training for its workers both before and after the incident.
[24] Emphasis on Company Size
The Learned Justice of the Peace placed considerable reliance on the size of the company. The Court stated that "a large fine will devastate this particular company". The Court stated:
Taking into consideration the submissions of the representative of Guildwood Construction Ltd., your financial situation, their ongoing concern and safety training for their employees, a fair and just sentence to send out the message that the law must take mitigating facts to heart and not ruin a fledgling business, I'm imposing a fine of $1,000.00 for the company and $500.00 for the supervisor Peng Simon Zhao sending a message regarding general deterrence that if you genuinely try to improve safety conditions, it will go in your favour. And this was the main reason I came to this decision, is the fact that you have tried and are still trying to keep a safe business going.
Position of the Parties
[25] Crown's Appeal Position
The appellant, Ministry of Labour, appeals against sentence. Their position is that the sentence is demonstrably unfit. In arriving at the sentence, the appellant submits that the Learned Justice of the Peace:
- failed to give sufficient weight to harm and deterrence;
- misapprehended the principle of general deterrence;
- placed too much weight on compliance with minimum standards;
- placed too much weight on the absence of a record and the financial circumstances of the respondent.
[26] Crown's Requested Sentence
The appellants seek to have this Court substitute fines of $15,000.00 against the company and $5,000 against Mr. Zhao.
[27] Respondents' Position
The respondents submit that the sentences imposed are fair. In oral submissions Mr. Zhao expressed his personal concern for the welfare of Mr. Zhong and relied on the steps taken by the company to comply with the law and the effect that a large fine would have on his small business.
[28] Court's Observation
The Court was impressed, as is clear so was the Learned Justice of the Peace, with Mr. Zhao's sincerity and his genuine concern for the welfare of his employees.
Analysis
The Standard of Review
[29] Statutory Framework
This is an appeal under s.122 of the Provincial Offences Act. It reads as follow:
Orders on appeal against sentence
(1) Where an appeal is taken against sentence, the court shall consider the fitness of the sentence appealed from and may, upon such evidence, if any, as it thinks fit to require or receive, by order,
(a) dismiss the appeal; or
(b) vary the sentence within the limits prescribed by law for the offence of which the defendant was convicted,
and, in making any order under clause (b), the court may take into account any time spent in custody by the defendant as a result of the offence.
Variance of sentence
(2) A judgment of a court that varies a sentence has the same force and effect as if it were a sentence passed by the trial court. R.S.O. 1990, c. P.33, s. 122.
[30] Appellate Intervention Standard
On appeal, this Court cannot simply substitute its own view as to the appropriate sentence. In R. v. Fagbemi, [2000] O.J. No. 2250 (C.J.), at paragraph 22 Justice Fairgrieve noted that the Court of Appeal decision in R. v. Cotton Felts "can still be relied on only as authority for the proposition that the principles governing the assessment of the fitness of sentence by a provincial offences appeal court are the same as those which apply to appellate courts under the Criminal Code".
[31] Lacasse Test
Accepting this interpretation of s.122 of the Provincial Offences Act, I note that the most recent statement on appellate intervention on sentence is the Supreme Court of Canada decision in R. v. Lacasse, 2015 SCC 64, [2015] 3 S.C.R. 1089. It restricts appellate intervention on sentence to situations in which there has been (1) an error of law or error in principle that has an impact on the sentence or (2) when the sentence imposed is "demonstrably unfit". The majority decision stated at paragraph 11 of the decision as follows:
This Court has on many occasions noted the importance of giving wide latitude to sentencing judges. Since they have, inter alia, the advantage of having heard and seen the witnesses, sentencing judges are in the best position to determine, having regard to the circumstances, a just and appropriate sentence that is consistent with the objectives and principles set out in the Criminal Code in this regard. The fact that a judge deviates from the proper sentencing range does not in itself justify appellate intervention. Ultimately, except where a sentencing judge makes an error of law or an error in principle that has an impact on the sentence, an appellate court may not vary the sentence unless it is demonstrably unfit.
[32] Demonstrably Unfit Test
On the second arm of the test, whether the sentence is demonstrably unfit, the central issue is the proportionality between the sentence imposed and gravity of the offence and the degree of responsibility of the offender. In order to meet that test it is not sufficient to show that the sentence is outside the standard range of sentence. The majority decision stated at paragraph 58 of the decision as follows:
There will always be situations that call for a sentence outside a particular range: although ensuring parity in sentencing is in itself a desirable objective, the fact that each crime is committed in unique circumstances by an offender with a unique profile cannot be disregarded. The determination of a just and appropriate sentence is a highly individualized exercise that goes beyond a purely mathematical calculation. It involves a variety of factors that are difficult to define with precision. This is why it may happen that a sentence that, on its face, falls outside a particular range, and that may never have been imposed in the past for a similar crime, is not demonstrably unfit.
[33] Deference to Sentencing Court
The overall approach is one of deference to the sentencing court who had the task of balancing a number of sentencing objectives in the case before it. I note as well that the Provincial Offences Court is the Court with responsibility for regulatory offences and as such, has great experience in sentencing in this area.
The Weight Attached to Economic Impact of a Fine on the Respondents
[34] Unusual Sentencing Circumstances
The somewhat unusual circumstances of the sentencing process allow for insight into the manner in which the Learned Trial Judge weighed the various factors in arriving at a sentence.
[35] Dramatic Reduction in Sentence
After first hearing submissions the Court stated its intent to impose sentences of $12,000 against the company and $2,500.00 against Mr. Zhao. The Court then heard additional submissions about the financial state of the company after which it varied the fines to $1,000.00 and $500.00 respectively.
[36] Error in Principle
Respectfully, I accept the appellant's submission that in doing so the Learned Justice of the Peace erred by placing undue weight on the size of the company and its financial circumstances. This overemphasis on what is a relevant factor is an error in principle and allows for appellate intervention on sentence.
[37] Size of Enterprise as Relevant Factor
I accept that the scale of the enterprise is a relevant consideration on sentence (see R. v. Cotton Felts, [1982] O.J. No. 178 (C.A.) at para 19). That said, a focus on the financial size of the defendant company cannot alone take on such weight that the sentence imposed is well outside of the established range. In such circumstances little weight is placed on general deterrence which must be of "paramount importance" (see R. v. Cotton Felts at para 20). Consideration of the financial statements of the company reduced the fine to a small fraction of what the Court had otherwise considered appropriate.
[38] Nature of Economic Activity
The economic activity here, residential roofing on a two-storey home, is often carried out by small contracting companies. Such companies would not be deterred from ignoring their safety obligations by the fines imposed in this case.
[39] Company's Financial Viability
The financial documents filed in this case show Guildwood to be a modest company but nonetheless a viable one. The company had cash on hand at the end of 2015 of over $50,000.00. It had revenues in 2015 of approximately $280,000.00. It falls within a class of enterprises for which fines that amount to a license fee may cause the business not to spend the time and money on worker safety. Fines totaling $1500.00 would have a negligible impact on the company or Mr. Zhao.
[40] Impact on Sentence
It is clear from a review of the proceedings that the overemphasis on the size of the company and its financial situation had a direct impact on the sentence imposed.
[41] Ability to Pay
Issues with ability to pay can be addressed through setting reasonable periods of time to pay (see R. v. Brady Mechanical Systems (unreported August 25, 2005 O.C.J.)).
The Issue of Whether the Sentences are Demonstrably Unfit
[42] Demonstrably Unfit Standard
As set out above, in the Supreme Court of Canada decision in Lacasse, the second ground on which appellate courts can vary sentence is when the sentence is demonstrably unfit. This is not the same as finding the sentence is outside the established range. Sentencing must respond to the specific facts of the case. Those facts can compel the imposition of a sentence outside the established range.
[43] Sentencing Principles for Regulatory Offences
The sentencing principles to be applied in what are sometimes referred to as "public welfare offences" were set out in R. v. Cotton Felts at paragraph 19 as follows:
In our complex interdependent modern society such regulatory statutes are accepted as essential in the public interest. They ensure standards of conduct, performance and reliability by various economic groups and make life tolerable for all. To a very large extent the enforcement of such statutes is achieved by fines imposed on offending corporations. The amount of the fine will be determined by a complex of considerations, including the size of the company involved, the scope of the economic activity in issue, the extent of actual and potential harm to the public, and the maximum penalty prescribed by statute. Above all, the amount of the fine will be determined by the need to enforce regulatory standards by deterrence.
[44] Deterrence as Paramount
The case makes clear that deterrence is to be of "paramount importance" in sentence and that the fines cannot be so law as to become a license fee for non-compliance if indeed the risk of injury in fact materializes and a conviction occurs. Again, I refer to Cotton Felts at paragraph 22:
The main factors in the computation of a fine expressed in these decisions are the same as those expressed by Judge Dnieper. Without being harsh, the fine must be substantial enough to warn others that the offence will not be tolerated. It must not appear to be a mere licence fee for illegal activity.
[45] Factors from Cotton Felts
More broadly, in looking at the factors set out in Cotton Felts I have already addressed the issues of the size of the company and the scope of the economic activity in issue. Guildwood Construction is a modest sized company that works in an industry where safety issues are at the forefront.
[46] Actual and Potential Harm
On the issue of actual or potential harm I note that Mr. Zhong sustained a fractured pelvis and two broken arms. He required surgery. This is not simply a case of non-compliance with the regulations; it is a case where noncompliance caused serious harm to a worker.
[47] Maximum Penalty
Lastly, under s.66 of the Occupational Health and Safety Act the maximum penalty is $500,000.00 for the company and $25,000.00 for an individual.
[48] Sentencing Comparables
The Crown supplied a table in which similar cases are summarized. These are summaries of unreported cases so some caution must be exercised as the actual case has not been provided to this Court.
[49] Sentence Outside Established Range
It is clear that the sentence imposed is substantially and markedly outside the established range. The summaries provided are all sentencings under the Occupational Health and Safety Act in which falls from heights result in serious injuries. No two cases are identical but these cases do offer some assistance as to what constitutes a fit sentence.
[50] Range of Comparable Sentences
Three cases set out a range of fines of $20,000.00 to $25,000.00 against the company. Two cases set out fines of $8,000.00 to $12,000.00 as against a supervisor.
[51] Absence of Exceptional Circumstances
This case is similar to many other cases in which a serious injury has occurred due to a breach of a regulation under the Occupational Health and Safety Act. Many of the mitigating issues here, the absence of a record, a guilty plea, the fact that the company is a small enterprise and that the company carried out appropriate training before the incident giving rise to the injury are not exceptional in themselves. There are no compelling grounds for departing from a fine within the established range.
[52] Sentences Demonstrably Unfit
Respectfully, it is my view that in this case fines of $1,000.00 against the company and $500.00 against the supervisor are both substantially outside of the accepted range and demonstrably unfit. As a result, there is not a proportionality between the sentence imposed and gravity of the offence and the degree of responsibility of the company or Mr. Zhao. Fines set at this level can be seen by others working in this industry as license fees and do not promote general deterrence. This finding also allows for appellate intervention on sentence.
[53] Grounds for Appellate Intervention
I therefore find that under the test for review that appellate intervention under s.122 of the Provincial Offences Act is warranted by both an overemphasis on the financial state of the company and the imposition of a fine that is demonstrably unfit. In these circumstances I do need to examine the other grounds of appeal advanced by the appellant.
The Imposition of Sentence by This Court
[54] Task of Court
This leaves the task of imposing an appropriate penalty by this Court.
[55] Mitigating Factors
In imposing sentence this Court respects the views of the Learned Justice of the Peace that there are significant mitigating factors at issue here, and in particular, the early plea and absence of record. Like the learned Justice of the Peace I was impressed with the sincerity of Mr. Zhao in his bearing and in his submissions at the appeal hearing.
[56] Lower End of Range
The Court below, in my view, was endeavouring to impose a sentence at the bottom end of the sentencing range. I will respect that view in setting the amount of the fine on appeal. It is my view that the sentences first discussed by the Justice of the Peace during the sentencing hearing correctly identified the lower end of the range for these offences.
[57] Sentence Against Guildwood Construction
Therefore, as to the appeal against sentence on Count #1 against Guildwood Construction the appeal is allowed and a fine of $12,000.00 is imposed. There will be 12 months to pay.
[58] Sentence Against Mr. Zhao
In assessing the appropriate fine against Mr. Zhao, I have considered that Guildwood Construction is a small family business. Mr. Zhao is both the owner and the jobsite supervisor and there is no clear separation of his duties. I think it appropriate in such circumstances to consider the issue of totality and impose a fine that would be less than for someone whose only liability is that of a supervisor.
[59] Sentence Against Mr. Zhao - Final
Therefore, as to the appeal against sentence on Count #2 against Mr. Zhao the appeal is allowed and a fine of $2,000 is imposed. There will be 12 months to pay.
[60] Payment Terms
The Court reaffirms that there are 12 months to pay the fines of $12,000.00 and $2,000.00 commencing from today. Both fines are exclusive of any surcharges imposed by the Provincial Offences Act. The respondents were advised in the Provincial Offences Court that there are ways in which an extension to the time to pay can be sought if that is necessary.
Released: September 19, 2017
Signed: Justice E.A. Carlton