ONTARIO COURT OF JUSTICE

CITATION: R. v. 2460043 Ontario Inc. known as St. Louis Bar and Grill (Cambridge), 2021 ONCJ 515

DATE: 2021 10 07

BETWEEN:

HER MAJESTY THE QUEEN

— AND —

2460043 Ontario Inc. known as ST. LOUIS BAR AND GRILL (Cambridge)

Before Justice W. G. Rabley

Heard on September 15, 2021

Reasons for Sentence released on October 7, 2021

B. Schnell............................................................................................. counsel for the Crown

C. Lord........................................................................ counsel for the corporate defendant

RABLEY J.

1. On November 6th, 2019, Jason Fach decided to go to 2460043 Ontario Inc. known as St. Louis Bar and Grill in Cambridge to have a couple of beers with a friend. Unfortunately, he was clearly intoxicated when he arrived. Once there, he was served five 20-ounce glasses of beer over the course of an hour and then left to drive home. He was drunk when he staggered out of the bar and got into his car.

2. Mr. Fach’s driving was so bad that he drove over a curb and abruptly stopped to avoid striking a parked vehicle. He then continued driving and struck an unoccupied parked vehicle. He fled the scene and then veered into a vehicle being driven by Kenneth Scott who died because of the head on collision. Mr. Fach was arrested and provided samples of his breath which resulted in readings of 220 and 210 milligrams of alcohol in 100 milliliters of his blood.

3. Jason Fach pleaded guilty before me and received a sentence of six years in the penitentiary. As part of the investigation into Mr. Fach’s case, the Waterloo Regional Police asked St. Louis Bar and Grill to provide a copy of the video footage in the bar. When the police reviewed the events of the evening, it became abundantly clear to them that not only was Mr. Fach intoxicated while he was at the bar, but that the servers should have been aware of his state of inebriation because they had significant contact with him that evening. As a result of this discovery, further investigation was done and ultimately these charges were laid against the bar.

4. Mr. Mandeep Mand appeared on behalf of the corporate defendant which is owned by himself and his wife Verinder Mand. As an officer of the company, he entered guilty pleas to charges under the Liquor License Act of permitting drunkenness to occur and permitting liquor to be sold to someone who was intoxicated.

5. Counsel submit that I ought to impose a fine relative to these matters. The maximum fine for each offence is $250,000. The question for me to determine is what amount is appropriate in these circumstances.

VICTIM IMPACT

6. I have once again listened to and reviewed the Victim Impact statements of those who were close to Kenneth Scott. Words cannot do justice to describe the incredible loss that his family and community continue to suffer knowing that this remarkable man will no longer be in their lives.

PRINCIPLES TO BE APPLIED

7. The charges that St. Louis Bar and Grill pleaded to are regulatory or public welfare offences. Therefore, although there are some similarities to the Criminal Code, the principles involved in sentencing a corporate defendant in these circumstances are somewhat different.

8. In my view, Justice Watson of the Alberta Queen’s Bench fairly set out the considerations for a sentencing judge to consider. In R. v. General Scrap Iron & Metals Ltd., 2003 ABQB 22, he said at paragraph 35:

[35] Nevertheless, there must be a principled approach to sentencing corporate offenders for regulatory offences. It is axiomatic that an unguided approach would offer no guide to corporate behaviour, as sanctions would be seen as random, even arbitrary or capricious. I conclude, then, that the appropriate approach for sentencing corporations should be to evaluate three aspects of the matter:

(1) the conduct, circumstances and consequences of the offence,

(2) the terms and aims of the relevant enactment or regulation, considered in the larger context of comparable regulation and legitimate corporate functioning in the relevant areas, and

(3) the participation, character and attitude of the corporation offender, considered in the larger context of corporations engaged in relevant industrial or business activity as to aspect (1),

9. In R. v. Cotton Felts Ltd., 1982 3695 (ON CA), Mr. Justice Blair speaking on behalf of the Court of Appeal also set out a number of considerations including:

(a) the size of the company involved;

(b) the scope of the economic activity in issue;

(c) the extent of actual and potential harm to the public; and

(d) the maximum penalty prescribed by statute.

10. Justice Blair made it clear that deterrence was the paramount consideration when sentencing in these cases and cited with approval the comments of Justice Linden in R. v. Hoffmann-LaRoche Ltd. (No. 2) (1980), 1980 2695 (ON SC), 56 C.C.C. (2d) 563 where he said:

In conclusion, I feel that a fine that is more than nominal, but which is not harsh, would be appropriate in this case. The amount must be substantial and significant so that it will not be viewed as merely a licence for illegality, nor as a mere slap on the wrist. The amount must be one that would be felt by this defendant. It should also serve as a warning to others who might be minded to engage in similar criminal activity that it will be costly for them to do so even if they do not succeed in their illegal aims.

ANALYSIS

11. At the outset, I want to disabuse anyone of the notion that the amount of the fine in this case in any way reflects the value that we place on the life of Kenneth Scott. My heart goes out to Mr. Scott’s family and friends. As I have been told, not only was he a wonderful husband and father, but he was a valuable member of a community which will no doubt feel his loss for some time to come. I am confident that he will be remembered for the true gentleman that he was. I can only hope that this sentencing will at least close this chapter for those who must pick up the pieces in their lives so that they can open a new page. I am sure he would want that for them, and I am confident that his memory will guide them along their new path.

12. No doubt as a result of the terrible loss that our community has suffered because of what happened on November 6th, there has been liberal use of the word punishment during the sentencing hearing.

13. First, it must be remembered that the person who was the cause of this terrible tragedy has been punished and he is now serving a significant custodial sentence in a penitentiary. I am told that the server who was neglectful in fulfilling her responsibilities and served Mr. Fach while he became intoxicated has also pleaded guilty and has been sentenced by another court.

14. I am now asked to punish the corporate defendant for its role in Mr. Scott’s death. Traditional sentencing principles require me to look, not only at the aggravating circumstances, but also those factors which might mitigate a sentence.

15. The aggravating factors speak for themselves. The corporate defendant is responsible for its servers and for ensuring that people are not over-served and allowed to leave their bars intoxicated without intervention and assistance. The complete failure to do so in this case and the tragic loss that occurred as a result of that neglect are significantly aggravating and are factors that I must take into account.

16. On the other hand, there are mitigating factors that must also be considered. In this case, I acknowledge that the corporate defendant:

(a) entered pleas of guilty in a timely way;

(b) did so in circumstances where there were serious Defence arguments regarding potential Charter issues;

(c) has no previous record of regulatory violations;

(d) had adequately trained its staff such that they were all Smart Served and had received additional training regarding the perils of over-serving and the need to take extra precautions with intoxicated patrons; and

(e) even though the business became too busy for the number of people who ultimately attended, the Defendant had appropriately staffed the restaurant for what it anticipated would be the traffic flow for that evening.

As Mr. Justice Keast said in the National Wrecking case: “I must focus not simply on the result of what happened, I must focus on the conduct.”

17. Determining an appropriate fine in this situation is difficult because I have not been provided with sufficient financial information to indicate the impact that the financial penalty will have upon the corporate defendant. Traditionally, a court is provided with some financial disclosure in these types of cases to assist it in making this assessment. As stated in R. v. Lopes (2003), 18 C.E.L.R. (N.S.) 299 (Ont. C.J.), it is the responsibility of the corporate defendant to lead evidence of their financial circumstances if they are seeking to mitigate the sentence on the basis of inability to pay.

18. Obviously, on the one hand, when a company has significant sales and assets, a fine needs to be significant enough to act as a deterrent so that the impugned act is rectified for the future rather than having the corporation simply pay the fine as a part of the ‘cost of doing business.’ On the other hand, where a company is small and carrying significant expenses and debt, even a more modest fine can be potentially crushing.

19. In this particular case, the facts indicate that I am dealing with a corporate defendant operating as a franchise based out of Cambridge that is part of a chain of restaurants known as St. Louis Bar and Grill. Traditionally, these types of businesses involve a lot of hard work for modest return. As I have no evidence about the corporate defendant’s financial circumstances, it would be pure speculation by me to try to determine their yearly income. What I do know is that restaurants and particularly, bars in Ontario, have been crippled over the past two years by the necessary measures that have been undertaken by our governments to limit the spread of the Covid19 virus. I think that it also fair that I surmise that this corporate defendant is not a multinational company that would look at a fine of $25,000 to $50,000 as an inconvenience rather than as a hardship.

20. Counsel assure me that there is very little by way of legal precedents to assist me in determining the amount of the fine for this type of case. They have filed cases which reflect that: 1) small liquor license transgressions are dealt with by modest fines; and 2) that usually this kind of situation is addressed by a hearing before the Ontario Alcohol and Gaming Commission where the prosecution seeks to suspend the liquor license of the corporate defendant for a period of time. Crown counsel submits that when one takes a snapshot of the earnings from St. Louis Bar and Grill for a day and then multiplies that by the average suspension that most businesses receive for these type of offences, that the fine of $50,000 is within that range. I should note that there is no request for a suspension in this case. I agree that in this case, the sanction can be appropriately be dealt with by a monetary penalty.

21. I thank counsel for their efforts to provide me with these authorities. It is clear that the consequences that result from a breach of public welfare impact on the sanction that the corporate defendant receives. The same principle is often applied in the sentencing of criminal matters. If Mr. Fach had been stopped by a RIDE program and no accident had occurred, instead of receiving a six-year sentence, no doubt he would have received a fine in the range of $2,000. Similarly, in public welfare cases under the Ontario Health and Safety Act, the fines are significantly higher when an employee dies as a result of the infraction.

22. Crown counsel filed a Newspaper article from the Toronto Star which reported that Clublink, carrying on business as the Lake Joseph Club, was fined $62,500 in similar circumstances where a fatal accident claimed the lives of three patrons and injured a fourth. The driver had been over-served at the restaurant and tragically was killed at the same time as his passengers.

23. I am also aware of a decision reported by a newspaper called The Intelligencer reporting that the owners of a bar known as the Angry Beaver were fined by Justice Hunter in the amount of $10,000 each. One of their employees attended an all-night Super Bowl party after work and became intoxicated before getting into her car and driving the wrong way causing a head on collision and killing a young woman on her way to college. The owners were charged criminally but were discharged after a preliminary inquiry: R. v. Sztejnmiler, 2013 Carswell Ont 9543.

24. The Court heard that there were significant mitigating factors in that case. There were no previous infractions. The owners had made arrangements for a designated driver to be available after hours on the evening in question. They had been told by the employee that she was going to use the service and was not going to drive home. They had no knowledge that she was going to get into her car and leave or did they know her level of intoxication. In addition to the personal fines against the owners, the Angry Beaver had its liquor license permanently revoked.

25. Other than the references to these two cases in newspapers, I have no other authorities directly on point before me.

26. I begin my analysis by saying that I part way with the suggestion that this sentencing is about punishing the corporate defendant which might ask the question “what more could we do?” This is not a case where the Defendant cut corners to save money nor did it fail to install safety measures or provide training that put employees and other lives at risk. On its face, the owners of St. Louis Bar and Grill did everything they were required to do and more, but the simple answer to the question is ‘that was and is not good enough.’

27. In my view, this sentencing is not so much about punishment as it is deterrence and prevention. There must be a clear message that our communities will not tolerate this kind of tragedy and that employees of bars and restaurants must not be indecisive about taking steps to cut off patrons who appear to be intoxicated. It is also their responsibility to take active steps to train and to reinforce to their staff that once these patrons become intoxicated, that they have an obligation to ensure that they are safely on their way home and not putting members of the community at risk by operating their motor vehicles.

28. The fine in this case must make it clear to all business, small and large, that the courts will not be sympathetic when tragedies like this occur. Could the business have done more? The answer is yes. They could have made sure in no uncertain terms, that their employees realized that no matter how busy they were, that they must not let down their guard and they must maintain their vigilance to make sure that safety is always their first priority.

29. I have given this case considerable thought and read many cases where significant fines were imposed for breaches of regulatory legislation. In my view, $50,000 for a small corporate defendant, in the circumstances before me, is the appropriate starting point for a case such as this.

30. I am mindful that the Provincial government will attach a 25% surcharge to any fine over $1,000 and I recognize that this is an additional hardship. More significantly, I believe the corporate defendant must be given credit for the mitigating factors and responsible way it has conducted itself throughout these proceedings. It gave full cooperation to the police, entered guilty pleas which saved the administration of justice valuable resources. Most importantly, by pleading guilty the corporate defendant saved the family of Kenneth Scott the anguish of reliving the horrific events of that evening.

31. As a result, I will reduce the sum of $10,000 from the fine and sentence the corporate defendant to $20,000 on each of the two counts totaling $40,000. The victim surcharge will add an additional $10,000. The total amount payable will be $50,000 which I believe will be a strong, but necessary message to this Defendant and others that they must do everything they can and more, to make sure that this type of tragedy does not happen again.

32. Once again, I wish to extend my sympathies to the family and friends of Kenneth Scott. Thank you, counsel, for your able assistance.

Released: October 7, 2021