Ontario Court of Justice

Date: 2024 04 18 Toronto

Parties

Between: His Majesty the King in Right of Ontario (Ministry of Labour, Immigration, Training and Skills Development)

And: A & L Hammer Workforce Management Inc.

And: Liwayway Coluna Miranda

Appearances

Before: Justice of the Peace Scarfe

Heard on: July 19, 2023, and March 13, 2024 Reasons for Judgment released on: April 18, 2024

Counsel: M. Chin-Yee, for the Ministry R. Sewani, Counsel for the defendant, Miranda LIWAYWAY

Reasons for Judgment

Justice of the Peace Scarfe:

[1] A & L Hammer Workforce Management Inc. (“the corporation”) and LIWAYWAY COLUNA MIRANDA (“Ms. Miranda”), both face charges that they failed to comply with orders to pay various employee wages contrary to s 132 of the Employment Standards Act, 2000, and contrary to section 41 of the Employment Protection for Foreign Nationals Act, 2009.

[2] There were 18 counts on the single Information before the Court. Counts 1-12 were allegations against the defendant corporation. Counts 13-18 charged Ms. MIRANDA personally. Some of the Orders to Pay issued by the Employment Standards Officer were issued pursuant to the Employment Standards Act (“ESA”), and the remaining orders were issued pursuant to the Employment Protection for Foreign Nationals Act (“EPFNA”).

[3] Mr. Sewani attended as counsel to Ms. Miranda but indicated from the outset that he did not act on behalf of the corporate defendant. Ms. Miranda was present throughout the entire proceeding.

[4] The Court arraigned the defendant on all charges. Ms. Miranda declined to enter a plea on behalf of the corporation (counts 1-12). The Court entered a plea of not guilty on behalf of the corporation.

[5] Ms. Miranda entered pleas of not guilty with respect to the charges against her, specifically counts 13-18.

[6] Ms. Miranda was listed as the sole director of the corporate defendant. She was invited to participate in the proceedings with respect to counts 1-12 but declined to do so.

[7] The trial proceeded on an ex-parte basis in respect of counts 1-12 against the corporation. Neither counsel, nor Ms. Miranda took issue with this process.

[8] Crown prosecutor Ms. Chin-Yee, on behalf of the Ministry of Labour, Immigration, Training and Skills Development (“the Ministry”), filed a voluminous book of documentary evidence on consent.

[9] The Ministry alleges that Ms. Miranda, acting through and on behalf of the defendant corporation, recruited at least 11 foreign workers from the Philippines to work in a variety of farms and food processing businesses from July 2018 until September 2019.

[10] Many of the employees travelled to Canada, some after paying a recruitment fee to the defendant corporation. They worked full-time for a set hourly wage, for many months, mostly during the spring and summer of 2018. They received paycheques from the corporation on account of wages earned. Some of these paycheques were honoured, while others were returned by the banks marked NSF, or non-sufficient funds.

[11] Claims were made to the Ministry by many of the employees for unpaid wages and in some cases, the return of the recruitment fees. Each of these claims were the subject of a detailed investigation by employment standards officers. Records of hours worked as well as NSF cheques from the employer were submitted, and in most cases the complainants were interviewed.

[12] Ms. Miranda failed to respond to most of inquires posed by the investigating employment standards officers. Upon completion of the various investigations, Orders to Pay Wages were issued along with documentation explaining how to challenge the findings within the 30-day appeal period. In all cases, the defendant corporation and Ms. Miranda did not file for review of the decisions within the time provided. Eventually charges were laid for failing to comply with the Ministry’s various orders. The combined loss to the various employees was approximately $122,000.00 dollars.

[13] Ms. Miranda testified in her own defence. She explained that prior to October 2017, she had operated the defendant corporation for about 3 years, and that it was a successful venture. She testified that during that time, she was able to keep up with all wage payments as well as her obligations to the Canada Revenue Agency (“CRA”).

[14] Then in October of 2017, her office, and the office of the corporate defendant was raided by Canada Border Services Agency (“CBSA”) officers as part of a criminal investigation into suspected human trafficking. She testified that as a result of the raid, all of her computers were seized. Shortly thereafter, her business and personal accounts were frozen.

[15] Approximately five months later, in April of 2018, she was arrested and charged criminally with a variety of human trafficking offences. She retained counsel and attended a preliminary hearing during the latter part of 2019. After several days of evidence, the Crown withdrew all the criminal charges.

[16] Ms. Miranda testified in her defence explaining how these events essentially destroyed her business. She said the fallout of these events made it impossible to conduct her business because she did not have access to any of her business or personal bank accounts, or her computers. She claimed she was unable to write cheques or deposit funds within a few weeks of the raid because of the banks closing her accounts. The combinations of events destroyed her otherwise financially successful employment agency business. Her psychological health and well-being deteriorated, and she became depressed, anxious, and unable to cope psychologically. She sought and attended counselling.

[17] She concedes that a number of employees did not get paid for hours they had worked. She acknowledged owing money and testified she wanted to pay but simply could not as she, nor the corporation, had any assets or access to financing, even at the time of the trial which began in 2023.

[18] She took issue with the Ministry’s findings with respect to her charging illegal recruitment fees, characterizing them as “administrative fees” which the corporation charged, not to the employee, but to their relatives. Her counsel told the Court that while she both respected and accepted the findings of the employment standards officers and the subsequent orders to pay, she was left in an impossible situation with respect to compliance and ought to be acquitted based on the due diligence defence.

[19] She was cross-examined at length. Despite her counsel’s representation that she respected the findings of the employments standards officer and made no collateral attack on the findings of the Employment Standards Officers, or the subsequent orders to pay, during her testimony she took the position that she had ceased the conduct of all business in October 2017 as a result of the CBSA raid, and that the allegations of the employees who said they were recruited to work, and did in fact work in 2018, were simply untrue.

[20] Ms. Miranda’s evidence was essentially a blanket denial which failed to address the mountain of evidence submitted by the Ministry, which clearly showed that many of the complainants were recruited and travelled to Canada in 2018, long after the CBSA raid in October of 2017. Most of the claimants were able to produce evidence that they were employed through the defendant corporation during 2018 and were paid for the hours they worked, at least in part. Many described an initial period for which they were paid but went on to say that after a period of time, the paycheques began to bounce.

[21] Furthermore, the evidence submitted by the Ministry showed that long after the CBSA raid, Ms. Miranda, through the defendant corporation, was still issuing paycheques and receiving recruitment fees. Some of those paycheques were honoured, while others were returned by the bank as “NSF”. The bulk of the evidence significantly contradicts Ms. Miranda’s claims that the business completely shut down within a few weeks of the raid in October 2017.

[22] While I have some sympathy for Ms. Miranda given the devastating and overwhelming experience she has been through, the fact remains that after the raid, according to her own evidence, she simply stopped responding to correspondence. I accept her evidence that her office was raided by CBSA officers in October 2017, and that her computers were seized. I also accept her evidence that in the subsequent months, she was served with several civil claims. I also believe her with respect to her subsequent arrest on criminal charges and the fact that those charges were eventually withdrawn. Finally, I accept that the combination of events had a deleterious effect on her mental health.

[23] Nevertheless, having started a business and having entered into multiple agreements with a variety of employees, it appears Ms. Miranda failed in her duties as set out in the ESA and the EPFNA. This legislation imposes a high standard on employers for good reasons, especially in this case. Foreign farm workers are among the most vulnerable of employees. I find Ms. Miranda was given multiple opportunities to engage with employment standards officers and participate in their ongoing investigations, but declined to do so.

[24] This Court heard no evidence from Ms. Miranda that she responded to correspondence from the Ministry or engaged in any way with Employment Standards Officers. Nor did she ask for more time to respond. Upon being served with the various Orders to Pay Wages and return fees, it appears she failed to challenge the orders within the legislated appeal period. Simply checking the necessary box on the form and returning it to the Ministry within 30 days would not have caused her any great hardship.

[25] Similarly, this Court heard no evidence that Ms. Miranda made any specific attempts to secure financing or otherwise access funds to keep things afloat such that the corporate defendant could fulfill its important obligations to its many employees. When asked about this in cross-examination, she simply stated that nobody would loan her money, but did not provide any specific details with respects to any efforts she made to obtain financing from any lender.

[26] Most importantly, it appears from the Ministry evidence that long after the CBSA raid and subsequent laying of criminal charges, she continued to recruit foreign nationals, encouraging them to come to Canada, even when it was readily apparent that she may not have sufficient means to pay them. This Court heard no evidence that she reached out to any single employee or prospective employee to explain that circumstances had changed, and that in a short period of time, she would be unable to fulfill her obligations. Rather, this Court finds Ms. Miranda remained silent with respect to the change in circumstances and made no effort to warn any prospective employee that things were not going to work out as they expected.

[27] His Worship, Justice of the Peace Hunter dealt with similar issues respecting the defence of due diligence in Ontario (Ministry of Labour) v Proformance Group Insurance Solutions Inc. 2019 O.J. 6499. In that case, orders to pay wages had been made by the Ministry pursuant to the ESA. The corporation did not pay. They were subsequently charged with failing to comply with the order to pay, pursuant to s 132 of the ESA. At trial, the defence relied on the due diligence defence, submitting that the corporation had no assets, and therefore had no ability to pay as it lacked the resources to do so.

[28] His Worship reviewed the jurisprudence respecting the availability of the due diligence defence in the context of the defendant’s stated impecuniosity including the Ontario Court of Appeal’s decision in R v Consolidated Maybrun Mines Limited et al, 1996 28 O.R, (3d) 161 and Grayker Corp (c.o.b. as Cadet Cleaners) v Ontario (Employment Standards Officer) 2006 O.J. No. 2193. He determined that:

“in order to establish a lack of resources, a defendant must do more than make of claim of debt or lack of assets. The defendant must establish that reasonable, though unsuccessful, efforts were made to obtain funding before the corporation can successfully claim that it lacked the financial resources to avoid committing the offence.”

[29] In the case before this Court, Ms. Miranda spoke of one attempt to secure paid employment, but explained that she did not go through with it as she saw a picture of herself in a newspaper in the waiting room. Rather than staying and participating in the interview, she simply left. That was the only attempt to secure paid employment that she testified about.

[30] When confronted in cross-examination with the evidence that her business continued to operate, recruit and issue paycheques long after she claimed she was shut down, she collaterally attacked the basis for the ESA orders by denying that she did anything at all after the raid, implying that the claimants were lying about having worked and been paid during the spring and summer of 2018. I reject her evidence on this point. Moreover, in regulatory proceedings, collateral attacks on the basis for issuing regulatory orders are generally prohibited. See R v Consolidated Maybrun Mines Limited et al.

[31] The offences she and the corporate defendant are charged with are strict liability offences within the framework set out by the Supreme Court of Canada in R v Sault Ste. Marie, 2 S.C.R. 1299. Where the actus reus is made out, the defence of due diligence is only available where the defendant establishes on a balance of probabilities that it took all reasonable steps to comply with the order. Establishing due diligence is a high bar and the onus is on the defendant.

[32] I find Ms. Miranda has failed to discharge her onus and that the proffered defence of due diligence fails. In respect of counts 13-18 where she is charged in personal capacity, I reject her evidence and find her guilty as charged. Having heard no evidence on behalf of the corporation on counts 1-12 and finding that the prosecution has made out a prima facie case, I find the corporation guilty on all 12 counts.

Released: April 18, 2024 Signed: Justice of the Peace Scarfe