ONTARIO COURT OF JUSTICE

CITATION: Toronto (City) v. 723187 Ontario Incorporated, 2022 ONCJ 308

DATE: 2022 06 29

BETWEEN:

CITY OF TORONTO (Appellant)

— AND —

723187 ONTARIO INCORPORATED (Respondent)

Before Justice V. Rondinelli

Heard on June 1, 2022

Reasons for Judgment released on June 29, 2022

J. Mathurin………………………………………………………………For the Appellant

V.H.S. Manoukian………………………………………………………For the Respondent

Rondinelli J.:

[1] The Respondent was convicted of knowingly permitting a premise of which it is a landlord to be used in relation to the unlawful sale or distribution of cannabis, contrary to s. 13(1) of the Cannabis Control Act.

[2] The City of Toronto appeals the fine imposed by the Justice of the Peace, which was below the mandatory minimum fine of $25,000 prescribed by s. 23(3)(a) of the Cannabis Control Act.

[3] The Justice of the Peace delivered short oral Reasons for Sentence. The crux of the reasons are as follows:

However, as serious as this matter is, the mistakes made by Mr. Faraci, deliberately or unknowingly, or for whatever reasons, given his age and the fact that his wife is a cancer survivor or is still going through the recovery, which put a strain on the family, this has not been a pleasant experience for Mr. Faraci given his age. At some point he has acted without knowing what was right or wrong, he may have been a baba (ph). Times are hard with COVID-19, is affecting everybody, rich or poor, young or old, it does not discriminate. I doubt if Mr. Faraci would ever do this again, and for those reasons I will reduce the fine or penalty to $4,000 and give him 365 days to pay.

[4] Both parties are in general agreement that the Justice of the Peace erred in considering an officer or director’s personal financial circumstances to mitigate the fine amount. Furthermore, nowhere in his Reasons for Sentence does the Justice of the Peace appear to apply the interpretive guidance for s. 59(2) of the Provincial Offences Act provided by the Ontario Court of Appeal in Ontario (Environment, Conservation and Parks) v. Henry of Pelham Inc., 2018 ONCA 999 at para. 63 (“Henry of Pelham”) to justify such a substantial departure from the $25,000 minimum fine.

[5] In the face of these errors, the sentence imposed by the Justice of the Peace is not entitled to deference and permits this court to impose a sentence it considers fit: See R. v. Lacasse, 2015 SCC 64 at para. 11.

[6] Section 59(2) of the Provincial Offences Act (“POA”) states:

(2) Although the provision that creates the penalty for an offence prescribes a minimum fine, where in the opinion of the court exceptional circumstances exist so that to impose the minimum fine would be unduly oppressive or otherwise not in the interests of justice, the court may impose a fine that is less than the minimum or suspend the sentence.

[7] The City of Toronto argues that an elevated fine of $40,000 is an appropriate fine, primarily given the aggravating fact that the Respondent continued to permit the ongoing illegal sale of cannabis products, despite having been previously warned that this activity was taking place in its building.

[8] The Respondent argues that a fine below the minimum of $25,000 is appropriate since the COVID-19 pandemic would qualify as “exceptional circumstances” under s. 59(2). As the Respondent put it in its factum, “During these exceptional times, the Canadian Government has recognized the importance of assisting its citizens as well as small businesses with financial aid during the pandemic. It is submitted that going below the minimum fine of $25,000 does not offend the intent of that section.”

[9] I am prepared to accept that it may fall within the accepted realm of judicial notice to take into account the fact that the COVID-19 pandemic has had a negative financial impact on Canadians generally. However, this should not translate into an automatic reduction of minimum fines for every offender – individual or corporate – that comes before the court for sentencing in a regulatory matter. Individualization remains an important principle in sentencing. As mentioned, s. 59(2) of the POA provides trial judges and justices of the peace discretionary authority to grant relief from minimum fines in “exceptional circumstances.” The Court in Henry of Pelham noted at para. 63, “Whether a minimum fine is unduly oppressive usually will depend on consideration of personal hardship. The bar for relief is set very high. Mere difficulty in paying a minimum fine is inadequate to justify discretionary relief.” The financial information tendered on behalf of the Respondent in this case does not show a corporation teetering on the brink of financial collapse. Put another way, 723187 Ontario Incorporated did not demonstrate that it was facing a “hardship that rises to an extreme level they cannot be made to bear”: See Henry of Pelham at para. 57. However, while not unduly oppressive, the minimum fine undoubtedly remains a significant financial burden for a corporation this size. In this regard, an extension of time to pay permitted under s. 66(2) of the POA can attenuate the burden of the fine.

[10] In considering the “interest of justice” component of s. 59(2), both the interests of the offender and the interests of the community protected by the legislation are relevant factors. The purposes of the Cannabis Control Act are set out in s. 1 of the Act:

Purposes

1. The purposes of this Act are,

(a) to establish prohibitions relating to the sale, distribution, purchase, possession, cultivation, propagation and harvesting of cannabis in order to,

(i) protect public health and safety,

(ii) protect youth and restrict their access to cannabis, and

(iii) ensure the sale of cannabis in accordance with the Ontario Cannabis Retail Corporation Act, 2017 and the Cannabis Licence Act, 2018;

(b) to deter illicit activities in relation to cannabis through appropriate enforcement and sanctions; and

(c) to provide for approved youth education or prevention programs, including culturally appropriate programs for Indigenous youth, as an alternative to enforcement and sanctions. 2018, c. 12, Sched. 1, s. 2.

[11] Needless to say, these are laudable objectives. Meaningful minimum fines are designed to have a deterrent effect in public welfare offences. Sentencing courts that recognize exceptional circumstances too readily do so at the risk of diluting any deterrent effect hoped to be achieved by a minimum fine: See Henry of Pelham at para. 53.

[12] In this case, the Respondent is a first-time offender. Even though the Respondent was warned prior to being charged and convicted, I do not consider this an aggravating factor in this case. While not directly applicable, the Coke principle may have some relevance to this case. Justice Paciocco summarized the old English common law rule known as the Coke principle in R. v. Wilson, 2020 ONCA 3 at paras. 60-61, as follows:

“Lord Coke’s principle” “is a common law rule applicable to sentencing proceedings unless ousted by a clear statutory provision or by necessary implication”: R. v. Hexamer, 2019 BCCA 285, at para. 171, leave to appeal requested, [2019] S.C.C.A. No. 343, citing Skolnick, at p. 58. It holds that subsequent convictions cannot be relied upon to aggravate the sentence imposed for a prior offence. [page378]

“Lord Coke’s principle” makes sense. A repeat offender who has already been sentenced for offending may require increased punishment to achieve specific deterrence since they have not learned from their earlier sentence. Their degree of responsibility is heightened by the contempt their subsequent conduct may show for the sentencing process: R. v. Cheetham (1980), 1980 CanLII 2978 (ON CA), 53 C.C.C. (2d) 109 (Ont. C.A.), at p. 114. These considerations do not operate where the offender committed the offence being sentenced before being punished for subsequent offences.

[13] In this case, the Respondent received a Notice of Contravention about five weeks prior to being formally charged with this offence. The Notice outlined that the property had been identified as an unauthorized cannabis retail location and that under the Cannabis Control Act, the landlord had the duty to bring the location into compliance or face potential legal consequences. However, it must be noted that the Cannabis Control Act was fairly new legislation when the Respondent was warned. The moral blameworthiness in a newly charted legislative scheme may be less than if the actions occurred in a much more established state of enforcement and prosecution of the laws. More importantly, the Respondent plead not guilty and chose to defend the charge at a trial. In my view, the Respondent’s knowledge of wrongdoing only crystalized upon being convicted of the offence and any increased punishment should follow any subsequent conduct to the sentence in this case.

[14] In all of these circumstances, I see nothing exceptional to conclude that imposing the minimum fine would be unduly oppressive or otherwise not in the interests of justice. At the same time, I do not see circumstances that would justify an elevated fine for a first-time offender.

[15] Consequently, I would allow the appeal and vary the sentence by imposing the minimum fine of $25,000. The Respondent will be given 24 months to pay the fine.

Released: June 29, 2022

Signed: Justice V. Rondinelli