COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Labour) v. New Mex Canada Inc., 2019 ONCA
    30

DATE: 20190118

DOCKET: C64840

MacPherson, Miller and Paciocco JJ.A.

BETWEEN

Her Majesty the Queen in right of Ontario
    (Ministry of Labour)

Appellant

and

New Mex Canada Inc., Baldev Purba and Rajinder
    Saini

Respondents

Daniel Kleiman and Aaron Dewitt, for the appellant

Jeremy Warning, for the respondents

Heard: October 29, 2018

On appeal from the judgment of Justice Joseph W. Bovard
    of the Ontario Court of Justice, dated September 22, 2017, with reasons
    reported at 2017 ONCJ 626, allowing the appeal from the sentences imposed on
    January 13, 2015 by Her Worship Justice of the Peace C. Jill Fletcher.

Paciocco J.A.:

OVERVIEW

[1]

On January 16, 2013, Mr. Shangar Singh fell to his death while
    attempting to retrieve merchandise in a Brampton, Ontario furniture warehouse
    where he worked. This led to charges under the
Occupational Health and
    Safety Act
, R.S.O. 1990, c. O.1 (
OHSA
) against Mr. Singhs
    employer, New Mex Canada Inc. (New Mex), and two New Mex directors, Mr. Baldev
    Purba and Mr. Rajinder Saini (collectively, the defendants). The
    circumstances of Mr. Singhs death would later be described by the sentencing
    Justice of the Peace (the sentencing justice) as showing the highest level
    of negligence on the part of the defendants. The description is apt.

[2]

Mr. Singh, who was known by his employer to be epileptic and to have
    fainted twice before at work, was assigned to work on an elevated order picker
     a forklift with an open-sided, makeshift, polished steel, non-slip-resistant
    platform that sagged at the unsupported end. Workers would stand on the
    platform, less than four feet wide, while they were elevated to work at heights.
    The order picker was not equipped with fall protection equipment, and Mr. Singh
    was wearing dress shoes. He was not equipped with a safety harness or tether.
    As with his co-workers, Mr. Singh had received no health or safety training.

[3]

The order picker was at a height of approximately 12 feet when Mr. Singh
    fell. He died at the scene. A pathologist confirmed that the cause of death was
    blunt force craniocerebral trauma. There were no fractures or other injuries,
    suggesting that Mr. Singh fell directly onto his head without making any effort
    to protect himself. The pathologist inferred that he fell while unconscious and
    that a seizure precipitated the fall.

[4]

In the face of this tragic and disturbing incident, multiple
OHSA
charges were laid against New Mex as employer, and Mr. Purba and Mr. Saini as
    directors. Mr. Purba and Mr. Saini are the sole directors of New Mex, and the
    sole supervisors operating this small, 12-employee business. Each of the three defendants
    pleaded guilty to two offences.

[5]

Based on its pleas, New Mex was found guilty of:

·

failing, as an employer, to provide information, instruction and
    supervision to protect the health or safety of Mr. Singh, relating to fall
    protection and working from a height, contrary to
OHSA
, s. 25(2)(a);
    and

·

failing, as an employer, to ensure that measures and procedures
    prescribed by s. 85(a) of
Industrial Establishments
, R.R.O. 1990, Reg.
    851, as amended, were carried out at the workplace, contrary to
OHSA
, s.
    25(1)(c).

[6]

Mr. Purba and Mr. Saini were found guilty of:

·

failing, as directors, to take all reasonable care to ensure that
    New Mex complied with
OHSA
, s. 25(2)(a) as required by
OHSA
, s.
    32(a); and

·

failing, as directors, to take all reasonable care to ensure that
    New Mex complied with s. 85(a) of
Industrial Establishments
, R.R.O.
    1990, Reg. 851, as amended, also contrary to
OHSA
, s. 32(a).

[7]

The sentencing justice, who accepted the pleas, imposed a total fine on
    New Mex of $250,000: $125,000 per count. The Crown had asked for a total fine
    of $100,000 or higher. The sentencing justice imposed 25-day intermittent
    sentences of incarceration and 12 months of probation on both Mr. Purba and Mr.
    Saini.

[8]

All three defendants appealed their sentences to a provincial offences
    appeal court. New Mex appealed the quantum of the fine. Mr. Purba and Mr. Saini
    appealed their sentences of incarceration but not the probationary orders.

[9]

The provincial offences appeal court judge (the appeal judge) allowed
    all three appeals and varied the sentences. He reduced New Mexs fine to a
    total of $50,000: $25,000 per count. He imposed $15,000 in total fines on both
    Mr. Purba and Mr. Saini: $7,500 per count.
[1]

[10]

The
    Crown, seeking a restoration of the sentences imposed at first instance, sought
    leave to appeal the appeal judges decision to this court. A single judge of
    this court granted leave to appeal, in part because of the need for guidance in
    sentencing regulatory offenders, particularly for sentences of incarceration.
    We have now heard the appeal. While there are issues with the appeal judges
    decision, I would not disturb the result. I would therefore dismiss the appeal.

THE SENTENCING JUSTICES SENTENCES

[11]

Crown
    counsel asked the sentencing justice to impose a fine on New Mex of at least
    $100,000.00. She said [h]ow much over $100,000.00 may depend on what my
    friend [defence counsel] has to tell you about the company.

[12]

She
    asked that Mr. Purba and Mr. Saini be imprisoned for between 15 and 30 days
    each.

[13]

In
    her sentencing submissions, Crown counsel did not rely on any prior
OHSA
convictions. She emphasized the need for general deterrence and gave focus to
    the serious consequences and disturbing details of the accident, including the
    disregard by Mr. Purba and Mr. Saini of their obligations to ensure workplace
    safety. They had received a copy of the
OHSA
but misplaced it without
    ever reading it.

[14]

Defence
    counsel representing all three defendants responded:

Normally, where we can agree on a
    joint submission to fine, we do that but in this case since the request was for
    jail time, we obviously could not agree to that and our submissions will be
    with respect to why it should not be jail time in this case.

[15]

Defence
    counsel argued that incarceration was not appropriate in this case. The
    defendants were first offenders who demonstrated remorse by taking a leading
    role in funeral arrangements and assisting workers with the tragedy. She urged
    that specific deterrence was not required for Mr. Purba and Mr. Saini because
    this incident had already been costly enough to them to send the required
    message. New Mex lost orders, had to shut down temporarily, and had shrunk to two
    employees.

[16]

She
    argued further that this case was unlike those few cases where sentences of
    incarceration had been imposed for
OHSA
offences. She argued that, as
    a matter of principle, incarceration should be used only when other penalties
    would not achieve the goals of sentencing. She argued that while incarceration
    is not reserved for the worst cases, it is customarily reserved to cases where
    there is repeat offending, no guilty plea, and no remorse.

[17]

With
    respect to the fine to be imposed on New Mex, defence counsel relied on
R.
    v. Cotton Felts Ltd.
(1982),

2 C.C.C. (3d) 287 (Ont. C.A.), and emphasized
    the smallness of the business and its financial performance  a profit of $101,000
    in 2012 and a loss of $700,000 in 2013. She noted that in order to keep the
    business afloat after the accident Mr. Purba and Mr. Saini had to borrow money
    and make personal loans.

[18]

In
    support of the fines she was seeking for Mr. Purba and Mr. Saini, defence
    counsel asked the sentencing justice to bear in mind that the men had extremely
    modest reported incomes  in 2013, $18,085 for Mr. Purba and $21,943 for Mr.
    Saini. She advised the sentencing justice that the men were not drawing a
    salary at the time of sentencing. Finally, she urged that Mr. Purba and Mr. Saini
    would be paying the New Mex fine themselves, [s]o, in every sense of the word,
    its a double fine.

[19]

In
    imposing the sentences, the sentencing justice recognized that the defendants
    were first offenders who had accepted responsibility and demonstrated remorse.
    She said she gave great thought and consideration to the financial status of
    the defendants, including that Mr. Purba and Mr. Saini would have to satisfy
    the corporate fine. She said that she applied the principles identified by this
    court in
Cotton Felts
. She then placed significance in her reasons on two
    factors: the failure by Mr. Purba and Mr. Saini to educate themselves about
    their duties and responsibilities relating to workplace safety; and the lack of
    common sense and unacceptable conduct in having a man, known to be epileptic,
    work at height on an elevated order picker without any fall protection
    equipment, calling this the highest level of negligence.

[20]

She
    expressed hope that the sentences she would impose would act as both a specific
    and general deterrent, and that they would send a message to all companies,
    employers, directors, [and] supervisors of the specific need for the safety of
    their employees.

[21]

She
    then said, [w]hen I consider the totality of the facts, the plea, the
    submissions, the absence of any record, the relevant case law that is provided,
    regarding New Mex Canada Inc., a fine of $250,000.00 will be imposed. She went
    on to clarify that this fine consisted of $125,000 fines imposed on each of the
    two counts to which New Mex had pleaded guilty.
[2]

[22]

She
    said with respect to Mr. Purba and Mr. Saini:

I appreciate the financial
    circumstances of each of these defendants as outlined by Miss Fields. Having
    considered the totality regarding each, the facts, the plea, the absence of a
    record, the submissions made by both the Crown and the defence and the case
    law, as I indicated earlier, that was provided; in light of those
    circumstances, I find that to impose a fine upon them personally would only
    cause more financial hardship. However again, I reiterate the need for this
    court to impose a sentence that deals with general deterrence that brings home
    to other companies their responsibility, the seriousness of this type of
    situation. It is unfortunate that we have the loss of the life of Mr. Singh in
    relation to this matter when it could so easily have been avoided. I do find
    that a period of incarceration is warranted when considering the totality of
    the facts in this case. I have given great thought to the submissions of Miss
    Fields regarding the further difficulties a jail sentence would impose on each
    of these gentlemen as well as to the company and as a result, I have decided
    that it would be an intermittent sentence to assist them in carrying on their
    day-to-day life, their assistance with their family, their extended family, the
    operation of the company. Each will be [sentenced] to a period of 25 days to be
    served intermittently plus a period of probation for 12 months.

THE APPEAL JUDGES DECISION

[23]

The
    appeal judge varied the fine imposed on New Mex, and the sentences of
    incarceration imposed on Mr. Purba and Mr. Saini.

[24]

He
    noted in doing so that in sentencing for
OHSA
offences, [d]eterrence is
    the cardinal principle. He stated, however, that deterrence operates
    differently for regulatory offences because [r]egulatory offences are
    concerned with attaining public policy objectives as opposed to punishing moral
    blameworthiness, citing
R. v. Di Franco
, 2008 CanLII 8785 (Ont.
    S.C.), at para. 11.

[25]

He
    emphasized that imprisonment is unusual, seldom employed and [t]o a very
    large extent the enforcement of such statutes is achieved by fines imposed on offending
    corporations:
Cotton Felts
, at p. 294. He cited a passage from para.
    13 of
Di Franco
, that amendments to the
OHSA
sentencing
    provisions elevating the maximum fine that could be imposed on a corporation,
    but leaving the maximum term of imprisonment alone, reinforce the primacy of
    fines over incarceration for regulatory offences.

[26]

The
    appeal judge also relied upon the proposition that in the few regulatory cases
    where incarceration has been imposed, those dispositions were for conduct that
    was willful as opposed to merely negligent:
Di Franco
,
at
    para. 13.

[27]

He
    then considered six decisions where the death of a worker had occurred. In only
    one of those cases was a sentence of incarceration imposed. In
R. v. Roofing
    Medics Ltd.
, 2013 ONCJ 646, a director was incarcerated. He was working in
    the roofing industry where casualties from falls are frequent and where there
    was evidence that fines were not serving to deter participants. Moreover, the director
    had driven the victim to the hospital rather than calling an ambulance to the
    work site, and then claimed that the victim had fallen from a ladder while
    helping out as a friend at the directors home installing roofing.

[28]

The
    appeal judge affirmed the application to regulatory offences of the criminal
    law principle articulated in
R. v. Priest
(1996), 30 O.R. (3d) 538
    (C.A.), at p. 545, that for first offenders courts should explore other
    dispositions before imposing a custodial sentence.

[29]

He
    then applied the factors identified by this court in
Cotton Felts
, at
    p. 294,

for quantifying fines, including: (1) the size of the company
    involved; (2) the scope of the economic activity in issue; (3) the extent of
    actual and potential harm to the public; (4) the maximum penalty prescribed by
    statute; and (5) the need to enforce regulatory standards by deterrence.

[30]

He
    then examined the mitigating and aggravating factors before concluding that the
    sentencing justice erred in the sentences she imposed.

[31]

Specifically,
    the appeal judge held that based on the jurisprudence cited, the sentences
    imposed by the sentencing justice were significantly out of the range of
    sentences regularly imposed by the courts for these types of offences and for these
    types of offenders. He found that since the sentences imposed departed substantially
    and markedly from appropriate sentences, the sentences imposed were demonstrably
    unfit.

[32]

The
    appeal judge also found that the sentencing justice erred in principle. She did
    not pay sufficient heed to the fact that the courts have repeatedly found that
    significant fines act as a deterrent in these types of cases, and that
    sentences of incarceration are more appropriate for defendants with prior
    convictions for whom fines have not had a deterrent effect. While he agreed
    with the sentencing justice that Mr. Purba and Mr. Saini demonstrated a very concerning
    lack of care for their employees, he downplayed the significance of this,
    reaffirming that [r]egulatory offences are concerned with attaining public
    policy objectives as opposed to punishing moral blameworthiness.

[33]

Finally,
    he found that the sentencing justice erred by imposing sentences of
    incarceration on Mr. Purba and Mr. Saini because fines would cause them more
    financial hardship.

[34]

He
    therefore varied the appealed sentences, imposing the fines described above:
    $50,000 on New Mex, consisting of $25,000 per count, and $15,000 on each of Mr.
    Purba and Mr. Saini, consisting of $7,500 per count.

GROUNDS OF APPEAL

[35]

The
    Crown made the following arguments before us:

·

The appeal judge failed to respect the principles that apply in a
    sentence appeal;

·

The appeal judge erred by effectively holding that sentences of
    incarceration are
per se

significantly outside of the range
    and demonstrably unfit for first time offenders convicted of regulatory
    offences;

·

The appeal judge erred by effectively holding that for
    regulatory offences sentencing is not concerned with punishing the moral
    blameworthiness of the offender and offence, and that sentences of
    incarceration are reserved for conduct that is willful, as opposed to merely
    negligent and for where the defendant is a repeat offender for whom fines have
    not had a deterrent effect;

·

The appeal judge erred by treating amendments to the
OHSA

that altered the maximum fine that could be imposed on a corporation, but
    not the maximum period of incarceration, as confirming the priority that is to
    be given to fines in sentencing for
OHSA
offences; and

·

The appeal judge erred in applying the principles of sentencing that
    apply where corporations are closely held.

[36]

In
    my view, some of the positions attributed to the appeal judge in these
    arguments are overstated. I do not read the appeal judge to be advancing the
    proposition that incarceration is
per se

significantly outside of
    the appropriate range and demonstrably unfit for first offenders convicted of
    regulatory offences. His position was that dispositions other than
    incarceration are to be considered for first offenders, before imposing
    custodial sentences. He did not say that incarceration is reserved for conduct
    that is wilful as opposed to merely negligent, or for repeat offenders who have
    not been deterred by fines. His position was that the sentencing justice did
    not pay sufficient heed to the absence of such factors in this case.

[37]

As
    I see it, placing them in an analytically convenient order, the issues to be
    decided on appeal can be more profitably considered by asking:

(A)

Whether the appeal judge erred by
    misapplying the standard of review in a sentencing appeal;

(B)

Whether the appeal judge erred in finding
    that the sentencing justice erred in imposing sentences of incarceration
    because fines would be unduly harsh for Mr. Purba and Mr. Saini;

(C)Whether
    the appeal judge erred in identifying the principles of sentencing for regulatory
    offences, specifically:

o

The immateriality of moral blameworthiness in sentencing for regulatory
    offences;

o

Restraint in incarceration for first offenders;

o

The primacy of fines over sentences of incarceration;

o

The relevance of corporate fines to the ability of directors in
    closely held corporations to pay related fines; and

o

The relevance of compliance with orders issued after the accident;

(D)Whether
    the appeal judge erred in finding that the fines imposed on New Mex by the
    sentencing justice were demonstrably unfit; and

(E)

Whether the appeal judge erred in
    imposing the sentences he did.

ANALYSIS

A.

DID THE APPEAL JUDGE MISAPPLY THE
    STANDARD OF REVIEW IN A SENTENCING APPEAL

[38]

The
    Crown argues that the appeal judge misapplied the standard of review in a sentencing
    appeal by failing to apply the limited powers identified in
R. v. Lacasse
,
    2015 SCC 64, [2015] 3 S.C.R. 1089, which the Crown contends governs
Provincial
    Offences Act
, R.S.O. 1990, c. P.33 (
POA
) appeals. Crown counsel
    argues that the appeal judge failed to follow the very high demonstrably
    unfit threshold now demanded, and erred by placing undue emphasis on
    sentencing ranges and by not deferring to the sentencing justice.

[39]

In
    my view, even assuming that the
Lacasse

standards apply, the
    appeal judge did not misapply the standard of review. I am expressing my
    conclusion about the
Lacasse

standards cautiously because of
    this courts
Cotton Felts

decision. In 1982,
Cotton Felts

held that pursuant to
POA
, s. 105(1) (now s. 122(1)), the power of
    an appellate court to vary a sentence imposed is not limited to cases where the
    sentencing judge has proceeded upon an error of law or an error in principle. An
    appellate court can, and is duty bound to, form its own opinion on the fitness
    of sentence and to vary any sentence if it does not consider it to be fit:
Cotton
    Felts
, at p. 292.

[40]

The
    Crown argues that the notion expressed in
Cotton Felts
,

that an
    appellate court can simply vary a
POA
sentence it considers to be
    unfit, has been overtaken by subsequent Supreme Court of Canada jurisprudence,
    including
Lacasse
, relating to the powers of appellate courts in
    sentencing appeals under the functionally identically worded appeal provision
    in
Criminal Code
, R.S.C. 1985, c. C-46,

s. 687(1).

[41]

I
    do find the Crowns argument about the application of
Lacasse

standards
    to
POA
appeals to be attractive. The scope for appellate intervention
    articulated in
Cotton Felts

is much broader than that of
Lacasse
,
    notwithstanding that the legislative authority for both
POA
appeals
    and criminal appeals is functionally identical. However, this issue was not
    argued in detail before us and we do not need to resolve it for the purposes of
    this appeal. In my view, the appeal judge in this case did not claim a power to
    intervene inconsistent with the principles articulated in
Lacasse
.

[42]

As
    I read the
Lacasse
decision, there are two bases for appellate
    intervention during sentencing appeals. This is what Wagner J. (as he then was)
    said, at para. 11:

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.

[43]

In
    other words, an appeal court may vary a sentence: (1) where a sentencing judge
    makes an error of law or an error in principle that has an impact on the
    sentence; or (2) where the sentence is demonstrably unfit.

[44]

What
Lacasse

clarifies with respect to the first situation is that
    an appellate court cannot simply find an error of law or an error in principle,
    and then proceed to vary a sentence. As the quoted passage makes clear, an appellate
    court may do so only if that error of law or error in principle has an impact
    on the sentence. Paragraphs 42-44 of
Lacasse

are particularly
    helpful in demonstrating this.

[45]

What
Lacasse

adds with respect to the second situation is that in
    determining whether a sentence is demonstrably unfit, [t]he fact that a judge
    deviates from the proper sentencing range does not in itself justify appellate
    intervention: at para. 11. Paragraphs 51 and 58-69 are helpful on this point.

[46]

Moreover,
    as the Crown pointed out before us,
Lacasse

affirms a very high
    threshold for determining whether a sentence is demonstrably unfit. It must be
    clearly excessive or inadequate or represent a substantial and marked
    departure from a proportional sentence properly arrived at based on the
    correct application of the principles and objectives of sentencing:
Lacasse
,
    at para. 52. Paragraphs 52-55 are of assistance on this point.

[47]

In
    the case before us, the appeal judge recognized the controversy over the
    continued application of
Cotton Felts
. Indeed, he adopted the view
    expressed by Fairgrieve J. in
R. v. Fagbemi
(2000), 4 M.V.R. (4th) 221
    (Ont. C.J.), at paras. 22-24, that
Cotton Felts

has long been
    overtaken by more recent case law such as
R. v. Turcotte
(2000)
,
48
    O.R. (3d) 97 (C.A.). The appeal judge therefore proceeded on the basis that mere
    unfitness is not enough. He accepted that a sentence must be demonstrably unfit
    for an appellate court to intervene in the absence of an error of law or error in
    principle that has an impact on the sentence. This is the standard he applied
    when finding the New Mex fine and the incarceration imposed on Mr. Purba and
    Mr. Saini to be a substantial and marked departure from the sentences
    customarily imposed for similar offenders committing similar crimes.

[48]

I
    appreciate that the passage I have just quoted might be taken in isolation to
    suggest that, in contravention of the direction in
Lacasse
, the appeal
    judge committed the error of varying the sentences simply because they deviated
    from the proper sentencing range. However, I do not believe the appeal judges
    reasons should be read in this way.

[49]

It
    is not an error for an appellate court to situate the sentence before it within
    the usual range of sentences, which is what the appeal judge did here. One
    cannot begin to measure the demonstrable fitness of a sentence without having
    an eye to the customary sentencing range. An appeal court errs if it tethers a
    finding of unfitness to the simple fact that the range is missed, but commits
    no error by getting a perspective on what a fit sentence looks like by
    examining comparable cases.

[50]

The
    principle of parity requires that sentences should be similar to other sentences
    imposed on similar offenders for similar offences committed in similar
    circumstances. This principle is equally applicable to sentencing for
    regulatory offences and criminal offences. It is, after all, a corollary of the
    rule of law and a safeguard for the equal and objective treatment of offenders,
    considerations just as material in regulatory prosecutions as they are in
    criminal cases.

[51]

When
    the appeal judges reasons are examined closely, it is evident that he did not
    base his finding of demonstrable unfitness simply on the gap between the
    sentences imposed and the usual sentencing range. Instead, he measured the
    fitness of the sentences by considering what is required to achieve the
    deterrent effect that is the priority consideration in sentencing for regulatory
    offences. He then applied the principles appropriate to imposing sentences of
    incarceration, and he measured the corporate fine using the
Cotton Felts

principles. In other words, he assessed the fitness of the sentence by
    considering the objectives and principles of sentencing, as he was meant to do.

[52]

To
    be sure, there are issues that arose in the appeal judges analysis. Those
    problems, however, are with the principles the appeal judge ultimately
    identified and used in achieving a fit sentence. They are not errors related to
    the standards of review in a
POA
sentencing appeal.

[53]

I
    would therefore dismiss this ground of appeal.

B.

DID THE APPEAL JUDGE ERR IN FINDING
    THAT THE SENTENCING JUSTICE ERRED IN IMPOSING SENTENCES OF INCARCERATION
    BECAUSE FINES WOULD BE UNDULY HARSH FOR MR. PURBA AND MR. SAINI?

[54]

The
    sentencing justice accepted that Mr. Purba and Mr. Saini would have to pay the
    corporate fine, which New Mex could clearly not afford. Against this backdrop,
    she opted to incarcerate Mr. Purba and Mr. Saini because it would be too
    difficult for them to pay an additional personal fine, given the heavy
    corporate fine that they were already facing. I have already quoted the
    relevant passage in para. 22 of this decision. I will repeat it here, in
    material part, for convenience:

I find that to impose a fine upon
    them personally would only cause more financial hardship. However again, I
    reiterate the need for this court to impose a sentence that deals with general
    deterrence that brings home to other companies their responsibility, the
    seriousness of this type of situation. It is unfortunate that we have the loss
    of the life of Mr. Singh in relation to this matter when it could so easily
    have been avoided. I do find that a period of incarceration is warranted when
    considering the totality of the facts in this case.

[55]

In
R. v. Wu
,
2003
SCC 73,
[2003] 3 S.C.R. 530, at para. 3,
    Binnie J. made clear that [g]enuine inability to pay a fine is not a proper basis
    for imprisonment. As a matter of principle, it must also hold true that the
    hardship of a fine is not a proper basis for imprisonment either. Although the
    sentencing justice was well-intentioned, her choice to impose incarceration in
    preference to a fine was a serious error, irrespective of whether the sentences
    of incarceration she imposed would have been fit.

[56]

The
    appeal judge was therefore correct in finding that the sentencing justice erred
    in imposing a jail term because a fine would cause more financial hardship.
    Although he did not address expressly whether this error affected the sentence,
    it is obvious that it did.

[57]

On
    this basis alone, the appeal judge was entitled to set aside the sentences of
    incarceration and to vary the sentences within the limits prescribed by law:
POA
,
    s. 122(1)(b). I will consider at the end of this judgment whether he succeeded
    in substituting fit sentences in place of the sentences of incarceration.
    Important to that determination are the Crowns arguments, that I will now
    address, that the appeal judge identified incorrect principles for sentencing
    regulatory offenders.

C.

DID THE APPEAL JUDGE ERR IN
    IDENTIFYING THE PRINCIPLES OF SENTENCING FOR REGULATORY OFFENCES?

[58]

When
    I stated this issue above in para. 37(C), of this decision, I listed five
    bulleted principles that the Crown challenged during the course of its argument
    on appeal. The Crowns argument was, in fact, more integrated than the separate,
    bullet-pointed sub-issues I have identified might suggest. The first three
    points  (1) the immateriality of moral blameworthiness, (2) restraint in
    incarceration of first offenders, and (3) the primacy of fines over sentences
    of incarceration  were components of the Crowns linked submission that the
    appeal judge erred by finding that sentences of incarceration are
per se

unavailable for first offenders convicted of regulatory offences, where the
    conduct has merely been negligent and not wilful.

[59]

In
    evaluating the correctness of the appeal judges decision, I will not lose
    sight of this, but in my view the most instructive way to approach the Crowns
    arguments is to address the role that each of these considerations plays in
    sentencing regulatory offenders, and only then consider, along with the other
    grounds of appeal, how the appeal judges approach bears on the correctness of
    the decisions he made.

(1)

The principle of moral blameworthiness

[60]

The
    term moral blameworthiness refers to an offenders level of culpability,
    determined primarily by his or her mental state:
R. v. M. (C.A.)
,
    [1996] 1 S.C.R. 500, at para. 79. In my view, where the moral blameworthiness
    of a regulatory offender is elevated, it may be appropriate to elevate the
    sentence imposed.

[61]

The
    appeal judge was therefore incorrect in adopting as a sentencing principle, the
    proposition stated in
Di Franco
, at para. 11, that [r]egulatory
    offences are concerned with attaining public policy objectives
as opposed to
    punishing moral blameworthiness
 (emphasis added). This is too crude a
    formulation and poses a false dichotomy. It is true that regulatory offences
    are concerned with attaining public policy objectives and the criminal law
    punishes according to the degree of the offenders moral blameworthiness.
    However, this does not mean that moral blameworthiness may not also be a
    relevant sentencing consideration for regulatory offences. That relevance can
    readily be demonstrated.

[62]

Without
    question, despite their public policy focus regulatory offences often have a
    moral dimension. In
Cotton Felts
, at p. 295, Blair J.A. invoked this
    moral dimension when explaining how deterrence performs a broader role in
    regulatory offences than its conventional role in criminal offences.
    Specifically, since the moral wrong in causing public harm by regulatory
    offending may be less obvious than the inherent wrong in committing crimes,
    regulatory sentencing plays the double role of not only deterring by threat of
    punishment, but also of  communicating condemnation for the moral wrong in
    acting contrary to the public good. In making this point, Blair J.A. quoted
    from an earlier decision of this court,
R. v. Roussy
, [1977] O.J. No.
    1208 (C.A.):

A sentence by emphasizing
    community disapproval of an act, and branding it as reprehensible has a moral
    or educative effect, and thereby affects the attitude of the public. One then
    hopes that a person with an attitude thus conditioned to regard conduct as
    reprehensible will not likely commit such an act.

[63]

It
    is also uncontestable that the moral dimension of regulatory offences varies.
    In
R. v. Sault Ste. Marie
, [1978] 2 S.C.R. 1299, at pp. 1325-26,
    Dickson J. (as he then was) identified three general categories of offences:
    (1) subjective fault offences consisting of some positive state of mind such
    as intent, knowledge, or recklessness; (2) strict liability, or negligence
    based offences that punish an absence of reasonable care or due diligence;
[3]
and (3) offences of absolute liability where it is not open to the accused to
    exculpate himself by showing that he was free of fault. As Dickson J.
    explained, there are regulatory offences that fall into each of these
    categories.

[64]

For
    its part, the criminal law recognizes a loose continuum of moral
    blameworthiness according to these categories that can affect the sentence
    imposed. The underlying notion is that those with guiltier minds tend to
    deserve or require greater punishment. This same principle applies to
    regulatory offences.

[65]

This
    is reflected in
Re B.C. Motor Vehicle Act
, [1985] 2 S.C.R. 486, at pp.
    515-16, where the Supreme Court of Canada held that it is not constitutionally
    permissible to incarcerate regulatory offenders for absolute liability
    offences, where the mere performance of the act is enough for conviction,
    without subjective
mens rea
or negligence. The reason for this is that
    absolute liability does not carry moral blameworthiness to warrant the
    imposition of incarceration. In contrast, subjective fault and negligence based
    offences carry sufficient moral blameworthiness to make incarceration
    appropriate, depending on the circumstances. As Cory J. said in
Wholesale
    Travel
,
at p. 238,

[i]t should not be
    forgotten that
mens rea
and negligence are both fault elements which
    provide a basis for the imposition of liability.

[66]

In
    my view, the relevance of moral blameworthiness in sentencing for regulatory
    offences follows necessarily from the application in regulatory offences of the
    fundamental sentencing principle of proportionality.

[67]

Simply
    put, the principle of proportionality requires that there be just proportion
    between the offence and the sentence:
R. v. Wilmott
(1966)
,
1
    C.C.C. 171 (Ont. C.A.), at p. 179. More precisely, it holds that a sentence
    must be proportionate to both the gravity of the offence and the degree of
    responsibility of the offender:
R. v. Anderson
, 2014 SCC 41, [2014] 2
    S.C.R. 167, at para. 21.

[68]

The
    applicability of this principle to sentencing for regulatory offences is clear.
    In
R. v. Ipeelee
, 2012 SCC 13, [2012] 1 S.C.R. 433, at para. 37, LeBel
    J. called proportionality the
sine qua non
of a just sanction. To
    similar effect, in the regulatory offence case of
Re B.C. Motor Vehicle Act
,
    Wilson J. stated, at p. 533: It is basic to any theory of punishment that the
    sentence imposed bear some relationship to the offence; it must be a fit
    sentence proportionate to the seriousness of the offence. Not surprisingly,
    this
sine qua non
of just punishment is a central consideration when
    sentencing regulatory offenders where the penalty is not fixed: see, for
    example,
R. v. Nova Scotia Power Inc
.
, 2008 NSPC 72, 271 N.S.R.
    (2d) 341, at para. 33, and
O
ntario (Ministry of Natural Resources) v.
    819743 Ontario Inc.
, 2013 ONCJ 128, at paras. 18-19.

[69]

The
    principle of proportionality, in turn, necessarily invites considerations of
    moral blameworthiness. This is because moral blameworthiness is one of the
    primary variables relied on to identify the degree of responsibility of the
    offender and hence the proportionality of the sentence imposed. So much so that
    in
R. v. M. (C.A.)
, at para. 79, Lamer C.J. stated that it is this
    element of moral blameworthiness which animates the determination of the
    appropriate quantum of punishment for a convicted offender as a just
    sanction.

[70]

The
    normative appeal of this proposition can be seen in this case. Ironically,
    despite endorsing the erroneous proposition from
Di Franco
, the appeal
    judge correctly accepted that incarceration is more appropriate where an
    offender has acted wilfully or is a repeat offender. These are moral
    blameworthiness considerations that may properly influence the sentence
    imposed.

[71]

It
    is important to appreciate that, despite its application, moral blameworthiness
    does not operate the same way in sentencing regulatory offenders, as it does in
    sentencing criminal offenders. This is because regulatory offences tend to
    reflect lower levels of moral blameworthiness. In
Sault Ste. Marie
, at
    pp. 1324-26, Dickson J. (as he then was) observed that although some regulatory
    offences require subjective
mens rea
such as wilfulness or knowledge, regulatory
    offences are presumed to be strict liability offences that, while employing a
    reverse onus, penalize the absence of due diligence or reasonable care. In
    other words, strict liability offences are presumed to be negligence based
    offences. In
Wholesale Travel
,

Cory J. cautioned, at p. 219, that regulatory offences based on a standard
    of reasonable care do not imply moral blameworthiness in the
same manner
as criminal fault (emphasis added).

[72]

This
    point is reflected in
R. v. Metron Construction Corporation
, 2013 ONCA
    541, 309 O.A.C. 355. There, the sentencing judge relied upon
OHSA
sentences to determine an appropriate sentence for the crime of criminal
    negligence. It was not wrong for him to consider the
OHSA
sentences.
    His error was in failing to appreciate that criminal negligence offences carry
    a higher degree of moral blameworthiness and gravity than
OHSA
offences. In other words, while both kinds of offences reflect moral
    blameworthiness, the moral blameworthiness in criminal offences tends to be
    greater, and that difference must be respected when imposing sentences.

[73]

To
    be clear, the relevance of moral blameworthiness in regulatory sentencing does
    not mean that sentences should be reduced where higher levels of moral blameworthiness
    are not present. After all, by design, most regulatory offences can be
    committed by mere negligence, and some are absolute liability offences imposing
    punishment even in the absence of moral blameworthiness. The point is that
    where the moral blameworthiness of a particular offender increases, so too can
    the penalty imposed.

[74]

In
    my view, the appeal judge therefore erred in accepting as a sentencing
    principle the erroneous view that regulatory offences are not concerned with
    moral blameworthiness. Unfortunately, his later recognition that incarceration
    is more appropriate for wilful offenders or repeat offenders does not make this
    error harmless. This is because he went on, incorrectly, to discount the very
    concerning lack of care for their employees that was exhibited, on the basis
    that it was a moral blameworthiness consideration being offered in a regulatory
    case.

[75]

I
    therefore agree with the Crown. The appeal judge erred in his treatment of
    moral blameworthiness in sentencing for regulatory offences.

(2)

The principle of restraint

[76]

The
    Crown argues that the appeal judge erred by holding that incarceration is
per
    se

an unreasonable sentence for a first offender convicted of a
    regulatory offence, and that a fine is the only fit sentence, regardless of the
    circumstances of the case. In my view, the appeal judge did not go that far. As
    indicated, he cited the principle of restraint from
Priest
that
    requires a sentencing judge, before imposing a custodial sentence on a first
    offender, to explore whether dispositions other than incarceration are
    sufficient. He went on to note that incarceration is more appropriate for
    defendants with prior convictions for whom fines have not had a deterrent
    effect. In my view, there is nothing wrong with applying this principle, or in
    making the latter observation.

[77]

I
    would, however, raise one caveat. The first offender principle from
Priest

must be applied to regulatory offences with contextual sensitivity. In criminal
    cases, where proportional sentencing allows, primacy is to be given in
    sentencing first offenders to the sentencing objectives of individual or
    specific deterrence and rehabilitation:
Priest
, at pp. 543-45. Particular
    restraint is called for in criminal cases because prolonged incarceration can push
    non-criminalized individuals towards criminality, and incarceration is more
    difficult for offenders who are not already criminalized. In my view, these
    considerations, while still relevant, do not have the same currency with
    respect to shorter periods of incarceration imposed for regulatory offences
    that inherently do not carry the stigma of criminalization.

[78]

This
    is particularly so in sentencing for
OHSA
offences, where, as Laskin
    J.A. observed in
Ontario (Labour) v. Flex-N-Gate Canada Company
, 2014
    ONCA 53, 119 O.R. (3d) 1,

at para. 22, deterrence, and most notably
    general deterrence, is the most important sentencing principle. Even in the
    case of first offenders, this sentencing priority should not be undercut by
    over-emphasizing rehabilitation or specific deterrence.

[79]

There
    is nothing startling about this. Even in criminal cases involving youthful
    first offenders, where the need for general deterrence is pressing, incarceration
    may occur despite the usual focus on rehabilitation and specific deterrence:
R.
    v. Currie
, 2018 ONCA 218, 23 M.V.R. (7th) 16, at para. 12.

[80]

Naturally,
    the absence of a history of offending is material in gauging a regulatory
    offenders degree of fault, and a prior good record is relevant in determining
    what is needed to achieve specific deterrence and rehabilitation. The point is
    that the first offender principle from
Priest

does not speak
    as loudly in the regulatory context as it does in criminal cases.

[81]

There
    is a related, more general principle of restraint that is also to be
    considered. It is aptly described by Derrick J. in
Nova Scotia Power
,
    at para. 56:

The principle of restraint
    requires the sentencing court to apply a measured response in determining the
    sentence that best satisfies the purpose and principles of sentencing. In an occupational
    health and safety case this means that the fine imposed must be no greater than
    is required to meet the objectives of sentencing.

[82]

I
    agree with Derrick J. that this criminal law principle, which can influence not
    only fines but also the need for and the length of incarceration, applies as
    much in sentencing for regulatory offences as it does in the criminal sphere.
    It reflects the inherent notion of fairness that although sentencing must at
    times occur in the public interest, punishment should not be more aggressive
    than the public interest requires. As this more general proposition was put by
    Rosenberg J.A. in
Priest
, at p. 544, it has been an important
    principle of sentencing in this province that the sentence should constitute
    the minimum necessary intervention that is adequate in the particular
    circumstances, and that an offender should not be deprived of liberty if
    less restrictive sanctions may be appropriate in the circumstances. Since
    corporations cannot lose their liberty in any meaningful sense, this principle
    applies with more force when sentencing individuals, but even corporations
    should not be harmed by sentences that are harsher than they need to be.

[83]

There
    may be room in a given case for reasonable people to disagree over whether a
    sentence of incarceration is required in spite of the principle of restraint.
    In such cases it is for the sentencing judge to determine whether this is so.
    Unless an error of law or error in principle occurred, or the sentence is sufficiently
    unfit to attract appellate review, deference is required and an appeal court
    will not intervene simply because of its conclusion that a lesser intervention
    would have sufficed.

(3)

The primacy of fines over incarceration

[84]

Sentences
    of incarceration are uncommon in regulatory prosecutions. In
Wholesale
    Travel
,

Cory J. observed, at p. 250, that imprisonment is only
    rarely sought for such offences. This court recognized in 1982 in
Cotton
    Felts
, at p. 294, that [t]o a very large extent the enforcement of the
OHSA
is achieved by imposing fines, and this court again made the same observation
    in 2013 in
Metron
, at para. 78. Nothing has changed. The Crown
    acknowledged before us that in the thousands of
OHSA
prosecutions that
    have occurred, fewer than two dozen sentences of incarceration have been
    imposed.

[85]

In
    my view, the rarity of incarceration for regulatory offences is a descriptive
    observation, not a prescriptive one. In other words, recognizing that incarceration
    is rare is factually correct, but going beyond the principles of restraint and parity
    and using the rarity of incarceration as an independent sentencing principle
    that influences a sentencing outcome is an error. As Cory J. observed in
Wholesale
    Travel
, at p. 250, [imprisonment] must be available as a sanction if
    there is to be effective enforcement of the regulatory measure. Where a
    sentencing judge, applying proper principles of sentencing, determines that
    incarceration is required to achieve the goals of sentencing, the judge is not
    forestalled from imposing a sentence of incarceration simply because
    incarceration is uncommon.

[86]

The
    reason why fines are typically imposed in regulatory prosecutions is that fines
    tend to be sufficient to achieve the deterrence required. When this fact is
    combined with the general principle of restraint just described, and with the
    principle of parity, the natural outcome is that sentences of incarceration are
    not apt to be common. However, the proposition that incarceration is rarely
    imposed for regulatory offences is not a principle of sentencing.

[87]

As
    indicated, the Crown argues that the appeal judge erred in this case by
    treating incarceration as
per se

unfit for first offenders, as
    a matter of principle. Although I think the Crown has overstated the appeal
    judges position, I agree that in this case the appeal judge did give undue
    emphasis to the rarity of sentences of incarceration in arriving at the
    sentences he imposed. He referenced the rarity of sentences of incarceration in
    regulatory cases several times, and when distinguishing the sentence of
    incarceration imposed by Nelson J. in
Roofing Medics Ltd.

he
    said it was important to note that Nelson J. recognized that imposing a
    sentence of incarceration is unusual.

[88]

I
    also agree with the Crown that legislative amendments increasing the maximum
    fines for
OHSA
offences, but not the maximum period of incarceration, cannot
    fairly be taken as signalling a legislative intention to limit the application
    of custodial sentencing. I do not share the contrary opinion expressed in the
    passage in
Di Franco
, at para. 13, cited by the appeal judge.

[89]

In
    my view, the appeal judge should not have used the rarity of sentences of
    incarceration as a reason not to impose one.

(4)

The relevance of corporate fines to the ability of directors in closely
    held corporations to pay related fines

[90]

In
    the course of his decision, the appeal judge listed the factors that were
    before the sentencing justice. Included among them was that [t]he defendant
    directors will have to pay the companys fine as well as their own fines. Defence
    counsel had used this claim before the sentencing justice to argue that in
    substance, Mr. Purba and Mr. Saini were being double punished because they
    would be paying the corporate fines as well, and that this should be taken into
    account when quantifying their fines. The appeal judge did not say expressly
    that he was relying on this factor when imposing the fines he did on Mr. Purba
    and Mr. Saini, but he appears to have done so. He said: After considering all
    of the circumstances, the law, the parties submissions, and [the sentencing
    justices] reasons for sentence, I allow the appeal and vary the sentences as
    follows.

[91]

The
    Crown argues that relying on the claim that Mr. Purba and Mr. Saini will have
    to pay New Mexs fine to reduce their own fines is an error in principle. The
    Crown argues that this perverts the basis of corporate law by failing to
    recognize that corporate defendants are distinct legal entities and ought to be
    treated as separate from their directors or owners when regulatory penalties
    are imposed. The Crown also invokes, by analogy, the principles restricting the
    corporate indemnification of directors described in
R. v. Bata Industries
    Ltd.
(1995), 25 O.R. (3d) 321 (C.A.). Finally, the Crown argues that it
    dulls the deterrent effect of their sentences to permit individual defendants
    to pierce the corporate veil to achieve reduced penalties.

[92]

I
    need not address each of these arguments save to say that I agree with the
    proposition that a fine imposed on a corporation should not be treated as a
    fine imposed on a director. In law, the fines are distinct, and the director is
    under no obligation to pay the corporate fine.

[93]

I
    can, however, imagine arguments being made about how fines imposed on a closely
    held corporation can indirectly impoverish individual equity directors by
    reducing the value of their corporate asset, an event that could affect the ability
    of the individual equity directors to pay their own fines, or influence the
    quantum of fine needed to achieve specific deterrence. But this is not the argument
    that was made here and I take no position on whether such arguments would be
    tenable. Here, the individual fines were reduced in anticipation that Mr. Purba
    and Mr. Saini would be paying the corporate fine. The difficulty with reducing
    individual fines on this basis is that Mr. Purba and Mr. Saini are under no legal
    obligation to actually pay the corporate fine. Once the sentence is imposed
    they could choose to let New Mex fail, with the result that the corporate fine
    never gets paid. Yet each would still walk away with a pointlessly lowered
    personal fine because of an anticipated payment that never occurs.

[94]

In
    my view, to the extent that he may have done so, the appeal judge erred by
    relying on an eventuality that might never occur to assist in quantifying fit
    fines.

(5)

The relevance of compliance with orders issued after the accident

[95]

In
    listing the factors that were before the sentencing justice, the appeal judge said:
    The defendants complied with all required orders issued after the accident.
    To the extent that the appeal judge relied on this as a mitigating factor in
    setting the sentences he imposed, this too was an error. This court held in
Flex-N-Gate
,
    at para. 19, that courts should not have discretion to treat an employers
    post-offence compliance, though statutorily required, as a mitigating factor on
    sentence. Justice Laskin explained that doing so reduces employers incentive
    to comply before an accident occurs, and it reduces the deterrent effect of
    sentences by mistakenly rewarding defendants for doing the right thing
    despite their obligation to comply.

D.

DID THE APPEAL JUDGE ERR IN FINDING
    THAT THE FINES IMPOSED ON NEW MEX BY THE SENTENCING JUSTICE WERE DEMONSTRABLY
    UNFIT?

[96]

There
    is no question that the errors in principle made by the appeal judge affected his
    conclusion that the New Mex fine was demonstrably unfit. Those errors,
    particularly discounting moral blameworthiness, would have affected his
    perspective on the significance of the offences that he was sentencing. Nevertheless,
    I believe that the appeal judge was correct in finding that the fines imposed
    were demonstrably unfit.

[97]

To
    be sure, the sentencing justice was right in identifying deterrence as the
    paramount sentencing objective. However, the question of a fit sentence does
    not rest only on whether that sentence would be an effective deterrent. The inquiry
    is more subtle, involving a careful examination of the circumstances of the
    offence and the offender, and a determination of what a fair and effective
    sentence would be in those circumstances. The factors identified by Blair J.A. in
Cotton Felts
at p. 294

are helpful.

[98]

The
    first two of the five main
Cotton Felts

factors address
    offender based considerations: (1) the size of the company involved; and (2) the
    scope of the economic activity in issue. As I will explain below, the impact
    of the fine on the company is an important consideration in identifying a fit
    deterrent sentence.

[99]

Justice
    Blair then identified an important proportionality or fairness consideration:
    (3) the extent of actual and potential harm to the public. The message is
    that the deterrent sentence should be harsh enough, in all of the
    circumstances, to be proportional to the harm, but not so harsh as to be disproportionate
    to the harm.

[100]

Justice Blair then
    turned his attention to: (4) the maximum penalty prescribed by statute. A fit
    deterrent sentence is situated properly on the continuum, within the permissible
    sentencing range.

[101]

Only after the context
    is determined in this way does Blair J.A. pose for consideration: (5) the need
    to enforce regulatory standards by deterrence.

[102]

In my view, the
    fitness of an
OHSA
fine, and hence the demonstrable unfitness of a
    sentence of a fine, can be determined essentially by asking: What amount of
    fine is required to achieve general and specific deterrence, and would otherwise
    be appropriate bearing in mind the principles of sentencing, including proportionality,
    and parity? The answer to that question in this case does not remotely support
    a $250,000 fine.

[103]

I have no
    difficulty here with the
proportionality
of the cumulative $250,000 fine
to the offence that occurred
, even considering that coupled with the
    victim surcharge the total amount that must be paid is approximately $312,500.
    A man died in truly outrageous circumstances, working for a corporation that
    demonstrated complete disinterest in complying with its legal obligations to
    protect worker safety, in the absence of significant mitigating circumstances.
In a different case, depending on the
    offender, a fine many times this level could survive a proportionality
    challenge for an incident as reprehensible as the one in which Mr. Singh died.

[104]

The concerns I
    have here are with the principle of parity, and, to an even greater extent,
    with the quantum of fine required to achieve the objectives of general and specific
    deterrence in this case.

[105]

In terms of the
    principle of parity, the Crown conceded before the appeal judge and before us
    that this fine was very, very high relative to fines imposed on similarly
    situated defendants in similar cases. Before the sentencing justice, the Crown
    sought a minimum fine in the amount of $100,000. The Crown suggested that the
    fine amount could rise, depending on New Mexs financial circumstances. Yet the
    sentencing justice imposed a fine two and one-half times that amount on a small,
    financially-weak company. The Crowns sentencing position was, in my view, sensitive
    to the fines imposed on similarly situated offenders in similar cases. The
    $250,000 fine imposed was not.

[106]

A review of the
    Workers Fatally Injured  Corporations chart found in Bruce Arnott et al.,
Annotated
    Occupational Health and Safety Act
, loose-leaf (May 2017-Rel.), Vol. 2
    (Toronto: Thomson Reuters Canada Ltd., 2017), reveals more than a dozen other $250,000
    fines imposed in fatality cases, but virtually all of the defendants were large
    companies, typically: publicly traded companies, international companies,
    municipal corporations or public utilities. Even fines over $150,000, but under
    $250,000, tend, with the occasional exception, to be imposed on large
    manufacturers, businesses with employees in the hundreds, or businesses engaged
    in large scale projects. Fines over $130,000, but under $150,000, tend to be imposed
    on firms with dozens of employees or more, or that work on large scale
    projects.

[107]

To be clear, by
    making these observations I should not be taken as suggesting that the fines
    that are to be imposed on large corporations, public utilities, and
    municipalities,
should
generally fall in the $250,000 range or less. Recently,
    the maximum
OHSA
fines for corporate offenders were increased from
    $500,000 to $1,500,000:
Stronger, Fairer Ontario Act (Budget Measures)
,
    2017
, S.O. 2017, c. 34, Schedule 30, ss. 4(2), 6 (Royal Assent received December
    14, 2017). Nor do I offer these ranges and general descriptors to suggest that
    they are sentencing targets that must be or even should be complied with. As
Lacasse

makes clear, sentencing ranges are guidelines, and no more.

[108]

My point is that
    the fine imposed in this case is so far removed from parity sentencing that the
    sentencing justice bore a responsibility to demonstrate why, based on
    sentencing principles, this should be so. Yet she did not. The fine imposed was
    a substantial and marked departure from what the principle of parity would
    suggest: a relevant factor in evaluating whether the sentence imposed was
    demonstrably unfit.

[109]

More
    significantly, in my opinion the fine imposed on New Mex was markedly more than
    would have been required to achieve the sentencing objectives of general and
    specific deterrence in this case.

[110]

I will begin
    with specific deterrence. On the uncontested evidence before the sentencing
    justice, New Mex was financially precarious. It was barely surviving. Yet the
    fine that was imposed was more than twice the gross profit New Mex showed in
    its last profitable year. Even assuming that the principals of New Mex might
    not be inspired by the human tragedy of the death of a co-worker to take their
OHSA
obligations more seriously, a much smaller fine than the one imposed would have
    been sufficient to drive that message home.

[111]

In my view, although
    the circumstances of the offender are crucial in identifying an effective
    specific deterrent sentence, they remain important in determining an effective
    general deterrent sentence, as well. The theory of general deterrence is that
    the sentence imposed
and the relevant circumstances that support the
    sentence
will become known to others and stand as a warning that the cost
    of the behaviour outweighs its benefits. Assuming the fine was $100,000,
    interested court watchers aware of the circumstances would not just see the
    $100,000 fine. They would see a $100,000 fine imposed on a closely held
    corporation operated by two individuals as a form of convenient business
    association for their modest 12-employee enterprise that, in a good year, might
    gross $100,000. The fine would send a message that corporate employers that
    violate
OHSA
obligations risk significantly burdensome, even
    existentially threatening fines. In my view, a $250,000 fine far exceeded what
    was required to send this deterrent message to employers.

[112]

One more point
    of clarification is required. The point I am making is that a fine imposed on a
    corporate regulatory offender should meaningfully take into account the size
    and economic activity of the corporation. Since it is not necessary to do so to
    dispose of this appeal, I am not commenting on whether an offenders ability
    to pay factors into regulatory fines the way it does in criminal cases,
    namely, as a limitation on the amount of the fine that may be imposed on
    individual offenders:
Criminal Code
, s. 734(2).

[113]

In my view,
    despite the errors in principle he made, the appeal judge was correct in
    finding the fines imposed on New Mex by the sentencing justice to be
    demonstrably unfit.

E.

DID THE APPEAL JUDGE ERR IN IMPOSING
    THE SENTENCES HE DID?

[114]

I have already
    found that the appeal judge was correct in finding that the sentencing justice
    erred in law when imposing sentences of incarceration on Mr. Purba and Mr. Saini,
    and that this legal error affected the sentences imposed. This gave the appeal
    judge the authority under
POA
,

s. 122(1)(b), to vary the
    sentences imposed on Mr. Purba and Mr. Saini, within the limits prescribed by
    law.

[115]

The appeal judge
    was also correct in finding that the fines imposed on New Mex were demonstrably
    unfit. This gave the appeal judge the authority under
POA
,
s. 122(1)(b),
    to vary the fines imposed on New Mex.

[116]

Having said this,
    I have also found that the appeal judge erred in the principles that he applied
    in identifying a fit sentence for all three defendants. Even if deference is to
    be given to sentences imposed by appeal judges that have varied erroneous trial
    sentences, no deference is owed in this case by this court to the varied sentences
    imposed by the appeal judge. The question remains whether we should now vary
    the sentences that he imposed.

[117]

I would not vary
    the fines imposed on Mr. Purba and Mr. Saini by the appeal judge, or substitute
    sentences of incarceration. I say this even though I disagree with the appeal
    judges conclusion that the sentences of incarceration imposed by the sentencing
    justice were demonstrably unfit. In my view, the sentences of incarceration
    were entirely fit, and, in the circumstances at the time of sentencing, much to
    be preferred to the modest fines imposed by the appeal judge. As I have said,
    the circumstances of Mr. Singhs death were outrageous. The life of Mr. Singh,
    a vulnerable man, was put at risk by allowing him to use unsafe equipment in
    dangerous circumstances. Had the
OHSA
guidelines been complied with,
    he would have known to use fall protection equipment that would have been
    available to him. His death may have been prevented.

[118]

Mr. Purba and
    Mr. Saini were not only directors of the corporation Mr. Singh worked for, and
    therefore legally responsible for ensuring
OHSA
compliance; they were also
    intimately familiar, as supervisors, with the working practices in the warehouse.
    As such, it fell directly to them to ensure that
OHSA
standards were
    observed, yet they remained blithely ignorant of their obligations. Had the sentencing
    justice not erred in law by choosing to incarcerate the men because of the
    financial burden of a fine, I would have found the appeal judge to have erred
    in finding those sentences of incarceration to be demonstrably unfit.

[119]

However, things
    have changed since Mr. Purba and Mr. Saini were originally sentenced. Based on
    fresh evidence put before us on consent, Mr. Purbas health has declined. Mr.
    Saini is a primary caregiver, relied upon heavily and daily to attend to his
    elderly parents.

[120]

Although these
    circumstances alone would not disqualify a sentence of incarceration, it has
    been close to six years since the incident, the economic fall-out from the
    incident has been financially difficult for both Mr. Purba and Mr. Saini, and,
    given her reasoning, the sentencing justice appears to have believed that a
    fine would have been a fit sentence, even when she sentenced the men. As I say,
    she reasoned that because a fine would be difficult for them, she would
    incarcerate them instead. In these circumstances I would not reinstate the
    sentences of incarceration imposed by the sentencing justice. In my view, a fine
    is the appropriate sentence for Mr. Purba and Mr. Saini at this point in time.
    The only issue is the amount of those fines.

[121]

Although I
    consider the $15,000 fines imposed by the appeal judge to be lenient, I cannot find
    under the present circumstances that these fines are demonstrably unfit. Combined
    with the corporate sentence, they are not disproportionate to the gravity of
    the event, and, bearing in mind their impact on Mr. Purba and Mr. Saini, the
    fines are not disproportionate. In all of the circumstances, these sentences
    operate as a sufficient deterrent to these men, and to other similarly situated
    directors. The fines imposed by the appeal judge offend no other sentencing
    principles. Therefore, I would not disturb the appeal judges judgment on the
    quantum of the fines imposed on Mr. Purba and Mr. Saini.

[122]

I can make much
    the same comment with respect to the fines imposed on New Mex by the appeal judge.
    The cumulative $50,000 fine imposed is lenient, even bearing in mind the size
    and economic activities of New Mex. Unlike the fines imposed by the sentencing
    justice, however, they are not demonstrably unfit. I would leave them
    undisturbed.

CONCLUSION

[123]

For the reasons
    provided, I would dismiss the appeal.

Released: January 18, 2019 (J.C.M.)

David M. Paciocco J.A.

I agree. J.C. MacPherson J.A.

I agree. B.W. Miller J.A.

[1]
Fines imposed in provincial offence prosecutions, including the fines imposed
    in this case, carry an automatic additional 25% surcharge:
Victim Fine
    Surcharges
, O. Reg. 161/00, s. 1.

[2]
The sentencing justice referred to the fines on each count as concurrent but
    it is clear that she meant for the $125,000 fines to apply cumulatively, or
    consecutively. As is true in criminal cases, there is no authority in a
Provincial
    Offences Act
, R.S.O. 1990, c. P.33

prosecution to impose concurrent
    fines:
Ontario (Labour) v. Flex-N-Gate Canada Company
, 2014 ONCA 53, 119
    O.R. (3d) 1, at paras. 35-37.

[3]

In
R. v. Wholesale Travel Group Inc
.
, [1991] 3 S.C.R. 154,

at p.
    210, La Forest J. equates the absence of due diligence with mere negligence.


COURT OF APPEAL FOR ONTARIO

CITATION: Phillip (Re), 2019 ONCA 48

DATE: 20190125

DOCKET: C65754

Doherty, Miller and Trotter JJ.A.

IN THE MATTER OF: MICHAEL PHILLIP

AN APPEAL UNDER PART XX.1 OF THE
CODE

Daniel R. Medd, for the appellant

Jeremy Tatum, for the respondent Attorney General for
    Ontario

Janice E. Blackburn, for the respondent Person
    in Charge of Waypoint Centre for Mental Health Care

Heard and released orally: January 22, 2019

On appeal against the disposition of the Ontario Review
    Board dated June 26, 2018.

REASONS FOR DECISION

[1]

The appellant was found not criminally responsible on account of mental
    disorder on April 27, 2018, on charges of assault and breach of probation. In
    June 2018, a panel of the ORB ordered him detained at Waypoint Centre, a
    maximum security facility. This was Mr. Phillips first appearance before the
    ORB.

[2]

Mr. Phillips custodial history is complex. He is presently under the ORB
    detention order, which is the subject of this appeal. He is also serving a jail
    sentence on other charges. That sentence expires in March or April of this
    year. Mr. Phillip is also subject to an assessment order in another criminal
    proceeding.

[3]

Mr. Phillip appeals the detention order made by the ORB. He asks that
    this court set aside that order and direct a new hearing at which the ORB can
    properly inquire into the feasibility of the placement of Mr. Phillip at
    Ontario Shores, a medium security facility.

[4]

Before the ORB, Dr. Dickey, the appellants treating psychiatrist and a
    member of the Waypoint clinical team, testified that he believed that it may
    be that the appellant should be moved to Ontario Shores for at least a trial
    stay in a medium security facility. The clinical team had, however, recommended
    keeping the appellant at Waypoint. Dr. Dickey had initially agreed with the
    clinical team.

[5]

The ORB appreciated the difference in the opinion between Dr. Dickey and
    the clinical team. Certainly, the appellants conduct in the two months before
    the ORB hearing was positive. It gave cause to consider a less restrictive
    disposition than maximum security. As counsel for Mr. Phillip put it in his
    factum, the appellants behaviour was on an upward trajectory in the two
    months immediately preceding the hearing.

[6]

The ORB was, however, required to consider the entire picture and not
    just the most recent events. That entire picture included the following:

·

The very serious nature of the appellants mental illness;

·

The long history of the appellants mental disorder accompanied
    by serious criminal activity;

·

The appellants past history of non-compliance with his
    medication; and

·

The appellants demonstrated history of quick decompensation
    accompanied by acts of violence when he stopped taking his medication.

[7]

The Boards conclusion is found at para. 27 of its reasons. The Board
    describes a transfer to medium security as premature in the entirety of the
    circumstances. We cannot say that the Boards conclusion is unreasonable.

[8]

In oral argument, counsel for the appellant focused on the submission
    that the Board erred in law by failing to direct that inquiries be made of
    Ontario Shores concerning the feasibility of transfer to that facility from
    Waypoint. This issue arose as a result of Dr. Dickeys changed opinion
    concerning the appropriate treatment of the appellant.

[9]

Certainly, in appropriate cases, the Board can and sometimes must direct
    that the kind of inquiries described above be made. We cannot say, however,
    that the Board acted unreasonably in the circumstances of this case in not
    requiring those inquiries to be made. The factors identified by the Board, and
    summarized above, made out a formidable case for holding the appellant in
    maximum security at Waypoint. Dr. Dickeys evidence, which offered little more
    than a tentative opinion without any factual foundation, did not command
    further inquiry by the Board, having regard to the rest of the evidence.

[10]

The
    appeal is dismissed. We note that the appellant is subject to a review hearing
    before the Board in about two to three weeks time. No doubt the Board will
    give careful consideration to any changes in the appellants circumstances.

Doherty J.A.

B.W. Miller J.A.

G.T. Trotter J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Presley v. Van Dusen, 2019 ONCA 66

DATE: 20190130

DOCKET: C65573

Sharpe, Juriansz and Roberts JJ.A.

BETWEEN

Janice Presley and
    Robert Frederick

Plaintiffs (Appellants)

and

Jack Van
    Dusen a.k.a. Jack Van Dusen Excavating

Defendant (Respondent)

and

Leeds,
    Grenville and Lanark District Health Unit

Defendant (Respondent)

Jonathan Chen, for the appellants

Michael D. Swindley and Zach Flemming-Giannotti, for the
    respondent Jack Van Dusen a.k.a. Jack Van Dusen Excavating

Alex Robineau, for the respondent Leeds, Grenville and Lanark
    District Health Unit

Heard: January 14, 2019

On appeal from the
    order of Justice R. Ryan Bell of the Divisional Court, dated November 8, 2017,
    with reasons reported at 2017 ONSC 7816,
81 C.L.R. (4th)
    214, affirming the order of Deputy Judge Harry R. Preston of the Superior Court
    of Justice, Small Claims Court, dated February 2, 2017
.

Sharpe
    J.A.

[1]

This is an appeal, with leave, from the dismissal of an appeal from the
    dismissal of a Small Claims Court action for negligent design, installation,
    approval and inspection of a septic system. The trial judge dismissed the
    action on the ground that it was statute barred under the
Limitations Act,
2002
.
    S.O. 2002, c. 24, Sched. B. The central issue is whether the trial judge and
    the Divisional Court judge on appeal to failed to conduct a proper analysis
    under s. 5(1)(a)(iv) of the
Limitations Act
of when, having
    regard to the nature of the injury, loss or damage, the appellants knew or
    should have known that a legal proceeding would be an appropriate means to seek
    to remedy it.

FACTS

[2]

The appellant homeowners, Janice Presley and Robert Frederick, retained
    the respondent Jack Van Dusen to install a septic system in 2010. The
    respondent Leeds, Grenville and Lanark District Health Unit approved the
    proposed septic system that same year. There were initial problems with the
    operation of the system. When smell began to emanate from the system in the
    spring of 2011, the appellants called Van Dusen and he appeared to fix the
    problem by replacing a failed sewage pump. The appellants encountered further
    problems with smell in the spring of 2012. Van Dusen advised the appellants
    that the cause was an unusually wet year and that many property owners were
    having the same problem. In the spring of 2013 there was both smell and
    effluent from the system although it was otherwise functioning without issue.
    Van Dusen inspected the system and advised the appellants that the problem
    could be remedied by applying a load of sand to a portion of the septic bed. He
    assured them that he would return to perform that work.

[3]

The appellants had on-going discussions with Van Dusen regarding the
    sand. These discussions led them to believe that he would come with the sand to
    fix the problem. Van Dusen came with sand in the fall of 2013 but the
    appellants were not at home and he was unable to access the property to deposit
    the sand. The appellant Frederick testified that Van Dusen [kept] stating he
    will fix the issue. He failed to come again in the spring of 2014 because of
    excessive mud on the appellants property that made depositing the sand
    difficult. He did not come during the winter of 2014 although the appellants
    had several discussions with him about coming and plowed the snow to give him
    access to the property.

[4]

In April 2015 the appellant Frederick called the respondent Health Unit.
    This led to an inspection by the supplier of the septic system and Van Dusen. Van
    Dusen took samples of the effluent. Ultimately, on June 1, 2015, the Health
    Unit condemned the system and issued an Order to Comply requiring the
    appellants to replace it.

THE TRIAL JUDGES DECISION

[5]

The appellants commenced this Small Claims Court action against Van
    Dusen in August 2015. The appellants added the Health Unit as a defendant in
    January 2016. At trial, both appellants testified, documentary evidence was
    introduced and, by agreement, the trial judge determined the limitations issue
    on the basis of the record as it stood at that point.

[6]

The issue to be determined was when the appellants discovered their
    claims against Van Dusen and the Health Unit within the meaning of the
Limitations
    Act
.

[7]

The
Limitations Act
, s. 5 provides:

Discovery

5

(1) A claim
    is discovered on the earlier of,

(a) the day on which
    the person with the claim first knew,

(i) that the injury,
    loss or damage had occurred,

(ii) that the injury,
    loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or
    omission was that of the person against whom the claim is made, and

(iv) that, having
    regard to the nature of the injury, loss or damage, a proceeding would be an
    appropriate means to seek to remedy it; and

(b) the day on which
    a reasonable person with the abilities and in the circumstances of the person
    with the claim first ought to have known of the matters referred to in clause
    (a).

Presumption

(2) A person with a claim shall be presumed to
    have known of the matters referred to in clause (1) (a) on the day the act or
    omission on which the claim is based took place, unless the contrary is proved.

[8]

The Small Claims Court trial judge found that by the spring of 2013 when
    there was smell and effluent coming from the septic system any reasonable
    thinking individual or homeowner would know from the smells and the lack of additional
    work byVan Dusen that (i) the injury, loss or damage had occurred; (ii) the
    injury, loss or damage was caused or contributed to by an act or omission; and
    (iii) the act or omission was that of Van Dusen and perhaps the Health Unit. The
    trial judge accordingly made a finding under s. 5(1)(b) that a reasonable
    person would have discovered the claim by spring 2013.

[9]

The trial judge did not consider the s. 5(1)(a)(iv) criterion as
    to when the appellants did know or should have known that a proceeding would be
    an appropriate means to remedy their claim.
He gave the following reason for not considering s. 5(1)(a)(iv): It is
    not necessary for me to make any determination under that subsection and I do
    not do so as I only have to find the earliest date and I have no difficulty, as
    I have said, in finding that that date was the spring of 2013.

[10]

The trial judge also found that there was insufficient evidence to
    rebut the presumption under s. 5(2) that the plaintiff knew all the matters
    referred to in s. 5(1)(a
), again without any consideration of s.
    5(1)(a)(iv).

THE DIVISIONAL COURTS DECISION

[11]

The Divisional Court judge upheld the trial judges decision. She
    rejected the contention that the trial judge erred by failing to consider s.
    5(1)(a)(iv). In her view, having made the determination under s. 5(1)(b) that a
    reasonable person ought to have known the matters set out in s. 5(1)(a) in the
    spring of 2013, there was no requirement for the [trial judge] to make an
    explicit finding as to what [the appellants] actually knew in relation to
    subsection 5(1)(a)(iv). The Divisional Court judge also concluded that the trial
    judge had correctly determined that the appellants had not rebutted the
    statutory presumption in s. 5(2).

ANALYSIS

(1)

Did the trial judge and the Divisional Court judge
    err in law by failing to conduct a proper analysis under s. 5(1)(a)(iv)?

[12]

The
    appellants do not appeal the trial judges findings that the elements of s.
    5(1)(a)(i), (ii) and (iii) were satisfied. Their appeal rests on the submission
    that both the trial judge and the Divisional Court judge erred in law by
    failing to conduct a proper analysis as required by s. 5(1)(a)(iv).

[13]

I
    agree with that submission.

[14]

The analysis of both the trial judge and the Divisional Court judge of
    ss. 5(1)(a)(iv), 5(1)(b) and s. 5(2) of the
Limitations Act

is flawed. The trial judge explicitly stated that he was not
    considering s. 5(1)(a)(iv)
.
A determination under s.
    5(1)(b) as to the date a reasonable person would have discovered the claim
    requires consideration of all four matters referred to in clause (a).
    Similarly, the finding that there was insufficient evidence to rebut the
    presumption under s. 5(2) that the plaintiff knew all the matters referred to
    in s. 5(1)(a
) cannot stand as there was no consideration of s.
    5(1)(a)(iv).

[15]

This
    court has repeatedly held that consideration of when a proceeding was an
    appropriate means to remedy a claim is an essential element in the
    discoverability analysis and that failure to consider s. 5(1)(a)(iv) is an
    error of law:
Gillham v. Lake of Bays (Township)
, 2018 ONCA 667, 425
    D.L.R. (4th) 178, at paras. 33-34;
Kudwah v. Centennial Apartments
,
    2012 ONCA 777, at paras. 1-2;
Har Jo Management Services Canada Ltd. v.
    York (Regional Municipality)
,
2018 ONCA 469, 91 R.P.R. (5th) 1, at
    paras. 21 and 35.

[16]

As
    neither the trial judge nor the Divisional Court judge considered the
    application of s. 5(1)(a)(iv), it is appropriate for this court to do so.

(2)

Was it appropriate for the appellants to delay bringing an action
    against the respondent Van Dusen?

[17]

Subsection
    5(1)(a)(iv) serves to deter needless litigation:
407 ETR Concession Co. v.
    Day
, 2016 ONCA 709, 133 O.R. (3d) 762, at para. 48, leave to appeal
    refused, [2016] S.C.C.A. No. 509. If a legal proceeding is inappropriate, the
    start date for the commencement of the limitation period is postponed beyond
    the date on which the constitutive elements of the claim are discovered:
Presidential
    MSH Corp. v. Marr, Foster & Co. LLP
, 2017 ONCA 325, 135 O.R. (3d) 321,
    at paras. 17-18.

[18]

In
Presidential MSH
, which I note, in fairness to the trial judge, was
    decided after the trial in this case, Pardu J.A. reviewed the jurisprudence and
    distilled and extracted two guiding principles on the effect of assistance by a
    defendant to eliminate the loss.

[19]

First,
    at para. 20:

[A] legal proceeding against an expert
    professional may not be appropriate if the claim arose out of the
    professionals alleged wrongdoing but may be resolved by the professional
    himself or herself without recourse to the courts, rendering the proceeding
    unnecessary.

[20]

Second, at para. 26:

Resort to legal action may be inappropriate in
    cases where the plaintiff is relying on the superior knowledge and expertise of
    the defendant, which often, although not exclusively, occurs in a professional
    relationship. Conversely, the mere existence of such a relationship may not be
    enough to render legal proceedings inappropriate, particularly where the
    defendant, to the knowledge of the plaintiff, is not engaged in good faith
    efforts to right the wrong it caused. The defendants ameliorative efforts and
    the plaintiffs reasonable reliance on such efforts to remedy its loss are what
    may render the proceeding premature.

[21]

These
    principles are applicable to the facts of this case. Van Dusen is licenced to
    install septic systems. The appellants contracted with him because of his
    special training and expertise. While the respondents argue he may not qualify
    as an expert professional, there can be no question he did have expertise
    upon which the appellants reasonably relied.

[22]

Moreover,
reliance on superior knowledge and expertise sufficient to delay
    commencing proceedings is not restricted to strictly professional
    relationships:
Presidential
, at para. 26.
I
    acknowledge that the previous cases where this court has made a finding that it
    was reasonable for the plaintiff to rely on the defendants superior knowledge
    and expertise have concerned defendants belonging to traditional expert
    professions. For instance,
Brown v. Baum
, 2016 ONCA 325, 397 D.L.R.
    (4th) 161, involved a physician,
Chelli-Greco v. Rizk
, 2016 ONCA 489,
    involved a dentist, and
Presidential MSH
involved an accountant.
    However, recent Superior Court decisions have applied the superior knowledge
    and expertise prong of
Presidential MSH

to persons who are
    members of non-traditional professions or who are not professionals at all. For
    instance, in
YESCO Franchising LLC v. 2261116 Ontario Inc.
,
2017 ONSC 4273,
the court found that s. 5(1)(a)(iv) applied in
    a franchisor-franchisee relationship where the franchisees relied on the
    franchisors superior knowledge and expertise, even though the franchisor was
    not a member of an expert profession. Similarly, in
Barrs v. Trapeze
    Capital Corp.
,

2017 ONSC 5466, affd 2019 ONSC 67
    (Div. Ct.)
, the Superior Court and the Divisional Court found that s.
    5(1)(a)(iv) applied to investors who relied on the superior knowledge and
    expertise of their investment portfolio managers.

[23]

Van
    Dusen initially attempted to fix the problem with the appellants septic system
    by replacing a pump. He then assured the appellants that the problem could be
    remedied with a load of sand. He also assured them that he would attend at
    their property to fix the problem. While the appellants might be criticized for
    not being more insistent that Van Dusen fulfill this assurance more promptly,
    the evidence establishes that they were engaged in ongoing discussions with him
    and took actions to enable him to access the property. He continued to assure
    them that the problem could be readily fixed and that he would fix it. The
    appellants reasonably relied on Van Dusens assurances.  These assurances led
    the appellants to the reasonable belief that the problem could and would be
    remedied without cost and without any need to have recourse to the courts. Section
    5(1)(b) is satisfied.

[24]

I
    do not agree with the contention that there was no evidence to rebut the
    presumption under s. 5(2). The threshold to displace the presumption in s. 5(2)
    is relatively low:
Miaskowski v. Persaud
, 2015 ONCA 758, 393 D.L.R.
    (4th) 237, at para. 28. The appellant Frederick testified as to what Van Dusen
    told him and that he relied on Van Dusens assurance that the problem with the
    septic system was readily fixable and that Van Dusen would fix it. The trial
    judge did not consider this evidence and did not consider the s. 5(1)(a)(iv)
    factor when applying the s. 5(2) presumption. As the evidence of the appellant
    Frederick was uncontradicted, I consider that it is sufficient to rebut the
    presumption under s. 5(2).

[25]

The
    situation here is distinguishable from that in
Sampson v. Empire (Binbrook
    Estates) Ltd
,
2016 ONSC 5730, where the court held that ongoing
    communications, investigations or negotiations do not postpone the commencement
    of the limitation period. That principle applies where it is known that legal
    proceedings are appropriate and the issue is whether or not the claim can be
    settled. In cases like this one that fall under s. 5(1)(a)(iv), the plaintiffs
    were making efforts not to settle a known claim but rather to remedy the
    problem so as to make a claim and litigation unnecessary. Moreover, I agree
    with the appellants that the statement in

Sampson
, at para. 44,
    that [t]he fact that a defendant assists in attempting to rectify a problem
    does not postpone the running of the limitation period must now be read in the
    light of
Presidential MSH
and the other cases I have discussed dealing
    with s. 5(1)(a)(iv).

[26]

In
    my view, the facts of this case bring it within the category of cases
    contemplated by s. 5(1)(a)(iv). I am satisfied that in the circumstances of
    this case, the appellants did not know, and that, as required under s. 5(1)(b),
    a person in their situation would not reasonably have known, that a proceeding
    would be an appropriate means to seek a remedy until, at the earliest, the winter
    of 2014. There is evidence they still reasonably expected Van Dusen to come up
    to this point. There were discussions in the spring of 2014 regarding excessive
    mud that prevented Van Dusen from doing the remedial work, and in the winter of
    2014 the appellants ploughed snow to give Van Dusen access.

[27]

As
    the action against Van Dusen was commenced in August 2015, it was well within
    the prescribed two-year period and was not statute barred.

(3)

Was it appropriate for the appellants to delay bringing an action against
    the respondent Health Unit?

[28]

The
    Heath Unit submits that, as the appellants had no communications with the
    Health Unit until the spring of 2015 and the Health Unit was not engaging in
    any ameliorative efforts, the s. 5(1)(a)(iv) analysis of the timing of a claim
    against Van Dusen has no application to the appellants claim against it. The
    Health Unit argues that
Presidential MSH
makes it clear that
    ameliorative efforts only delay the running of the limitation period against
    the potential wrongdoer who is performing them, not against other potential
    wrongdoers.

[29]

I
    disagree. Under the
Limitations Act
, the discoverability issue is
    decided on the basis of what the plaintiff knew or ought to have known. It is
    not decided on the basis of fault or who is responsible for any gap in the
    plaintiffs knowledge. I have found that the appellants did not know that a
    proceeding against Van Dusen was an appropriate remedy until the spring. If a
    proceeding against Van Dusen was not appropriate until the appellants realized
    that the problem with their septic system was more serious than Van Dusen had
    led them to believe and that he was unwilling or unable to fix it, I fail to
    see how they could have known that a proceeding was appropriate against the
    Health Unit at an earlier date.
Presidential MSH

does not
    assist the Health Unit because it concerned only a single potential wrongdoer
    who was performing ameliorative efforts. Pardu J.A. did not make any
    pronouncement about a situation involving multiple potential wrongdoers where
    only one of them was performing ameliorative efforts, as this situation was not
    before her.

[30]

This
    interpretation is consistent with the purpose of s. 5(1)(a)(iv) this court
    identified in
407 ETR
, at para. 48, namely to deter needless
    litigation. The interpretation the respondent Health Unit urges upon us would
    encourage needless litigation. On the Health Units interpretation, in order to
    avoid having their claim be limitations-barred, the appellants would have had
    to commence a claim against the Health Unit at a time when they reasonably
    believed that the problem was readily fixable and Van Dusen was going to fix
    it.

[31]

The
    situation in this case is distinguishable from the case in which a plaintiff
    argues that an ongoing legal proceeding against one defendant for a particular
    wrong makes it inappropriate to commence a legal proceeding against another
    defendant for the same wrong. In
Tapak v. Non-Marine Underwriters, Lloyd's
    of London
, 2018 ONCA 168, 76 C.C.L.I. (5th) 197, leave to appeal refused,
    [2018] S.C.C.A. No. 157, this court held that s. 5(1)(a)(iv) is not intended
    to be used to parse claims as between different defendants and thus permit one
    defendant to be pursued before turning to another defendant: para. 13. In my
    view, the principle in
Tapak
does not apply here because the
    appellants do not assert that it was appropriate for them to delay an action
    against the respondent Health Unit until they pursued legal claims against the
    respondent Van Dusen. Instead, the appellants argue that it was appropriate for
    them to delay bringing a claim against the Health Unit until it became clear
    that Van Dusen would not fix a problem he described as readily fixable. Once it
    became clear that Van Dusen could not or would not fix the problem, it was
    appropriate for the appellants to bring a claim against both Van Dusen and the
    Health Unit. The appellants added the respondent Health Unit within the
    two-year period that I have found commenced in winter 2014. Accordingly, the
    claim against the Health Unit is not limitations barred.

CONCLUSION

[32]

Accordingly,
    I would allow the appeal and remit the matter to the Small Claims Court for
    determination on the merits against both respondents.

[33]

The
    appellants are entitled to their costs of the appeal fixed at $15,000 inclusive
    of disbursements and taxes. The Divisional Courts costs order in favour of the
    respondents should be set aside and the appellants are entitled to costs of
    that appeal in the same amount. The costs of the Small Claims Court trial should
    be reserved to the Small Claims Court on the new trial.

Released:

RJS                                                 Robert
    J. Sharpe J.A.

JAN 30 2019                                    I agree
    R.G. Juriansz J.A.

I
    agree L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Pustai v. Pustai, 2019 ONCA 67

DATE: 20190131

DOCKET: C64351

Hoy A.C.J.O., van Rensburg and Pardu JJ.A.

BETWEEN

Scott Timothy Pustai

Applicant (Respondent)

and

Christine Marie Pustai

Respondent (Appellant)

Michael H. Tweyman, for the appellant

Stephen P. Kirby and William Abbott, for the respondent

Heard: July 16, 2018

On appeal from the final
    order of Justice Hugh K. OConnell of the Superior Court of Justice, dated
    August 30, 2017.

COSTS ENDORSEMENT

[1]

This court allowed the appeal of a judgment that
    was primarily with respect to spousal support:
Pustai v. Pustai
, 2018 ONCA 785. In the result, the trial judges order, which
    reduced for one year and then terminated the monthly $3,000 spousal support payment
    to which the parties had previously agreed, was replaced by an order reducing
    the appellants spousal support to $2,350 per month from June 1, 2013 to December
    31, 2017 and fixing support at $2,250 per month effective January 1, 2018. The
    trial judges order requiring the appellant to pay the respondent one half of
    the proceeds of the sale of the matrimonial home was set aside. The court fixed
    the costs of the appeal, and invited the parties, if they were unable to agree,
    to provide written submissions on their costs in the court below.

[2]

The court has now received and considered these
    submissions.

[3]

The appellant does not seek costs of the first
    trial, which resulted in a successful appeal to this court, reported at
Pustai
    v. Pustai
, 2014 ONCA 422, 319 O.A.C. 403. In respect of
    the second trial, the appellant seeks costs of $30,000, inclusive of HST and
    disbursements, enforceable by the Family Responsibility Office (FRO) as support
    and payable forthwith. She submits that she was substantially successful at
    trial, that her settlement offer was much more reasonable than the respondents,
    and that the costs she is seeking are both reasonable and proportionate.

[4]

The respondent agrees that no costs should be
    ordered in respect of the first trial. With respect to the second trial, he
    submits that the parties should bear their own costs. He contends that success
    was divided and that the appellant should not be rewarded for her bad faith
    conduct in withholding court-ordered financial disclosure (about her
    employment). He says that the appellants offer to settle contained no element
    of compromise on the termination of support payments. He also argues that the
    amount of costs sought by the appellant is too high, as it approaches full
    recovery of her actual legal costs, which were $36,198.42 plus disbursements of
    $778.30.

[5]

Having considered the parties detailed written
    submissions, and for the following reasons, we order that the appellant is
    entitled to costs of $24,000, inclusive of applicable taxes and disbursements,
    enforceable by FRO as support.

[6]

First, we are satisfied that the appellant was
    the more successful party and is presumptively entitled to her costs, according
    to the
Family Law Rules
, O. Reg. 114/99, r.
    24(1). The primary issue at trial was spousal support. The respondent sought an
    order terminating spousal support as of June 2013. The appellant relied on the
    parties agreement for indefinite spousal support of $3,000 per month. Although
    her argument that support should not be reduced did not prevail, she was
    successful in that her continued entitlement to some support was recognized. In
    fixing the level of support, the court imputed minimum wage level income to the
    appellant and rejected the respondents position that his income had
    significantly decreased.

[7]

Second, there is nothing in the conduct of
    either party in relation to settlement that enhances the appellants costs, or
    that reduces or eliminates her claim to costs. The parties exchanged written
    offers to settle before the second trial. Both offers contained an element of
    compromise. With respect to spousal support, the appellant offered to accept a
    reduced level of support, without termination for life, and the respondent
    offered to continue to pay support, but only until June 30, 2015. Neither party
    beat their offer.

[8]

Third, we reject the respondents argument that
    the appellant engaged in bad faith conduct sufficient to disentitle her to
    costs. With respect to the conduct relied on by the respondent, this court
    noted, at para. 49 of the reasons on the merits, that [w]hile Ms. Pustai was
    at fault for not providing complete financial disclosure from the start of
    these proceedings, this is not a case of egregious non-disclosure. However, the
    appellants failure to provide proper disclosure of her financial circumstances
    and the unexplained increase in her fortunes resulted in the finding that her
    financial circumstances had materially changed, the imputation of an annual
    income to her, and a reduction in her monthly support entitlement.

[9]

Finally, we agree with the respondent that the
    amount sought by the appellant is too high. The costs of the second trial were
    fixed, on consent, at the inclusive amount of $23,068.10 payable by the
    appellant to the respondent. This amount is a useful benchmark to determine reasonable
    and proportionate costs consistent with both parties expectations. We also
    note that the respondent does not challenge the work done or the hourly rates
    reflected in the appellants bill of costs.

[10]

In the circumstances, and having considered the
    parties submissions, we fix the appellants costs in the court below at
    $24,000, inclusive of HST and disbursements. We order that the costs award is
    recoverable as spousal support by FRO.

Alexandra Hoy A.C.J.O.

K. van Rensburg J.A.

G. Pardu J.A.