In the recent decision of Ontario (Environment, Conservation and Parks) v. Henry of Pelham Inc., the Ontario Court of Appeal (“ONCA“) reversed the decision of the Ontario Court of Justice (“ONCJ“) to relieve Henry of Pelham Inc. (“HPI“) of the mandatory minimum fine for a first-time water pollution offence under the Ontario Water Resources Act (“OWRA“).1
On November 7, 2014, a St. Catherines resident reported to the Ministry of Environment and Climate Change (the “Ministry“) that a pond on his property had turned black. Upon immediate investigation, the Ministry confirmed the discolouration and detected an organic odour stemming from the pond. As a creek leading to the subject pond runs through a vineyard owned by HPI, the Ministry met with HPI personnel to discuss the incident. HPI indicated it was possible that cattle manure and grape pomace spread on their land, but not yet incorporated into the soil, had entered the creek through a tile drain.2
HPI was charged and pled guilty to an offence under s. 30(1) of the OWRA, which specifically prohibits discharging a material into any water that may impair its quality or the quality of any other water. The colour and odour of the subject pond met the test of “water deemed to be impaired” under s. 1(3)(c) of the OWRA, which occurs when a material or its derivative enters water, directly or indirectly, and causes or may cause a degradation in the appearance, taste or odour of the water.3
While offences under s. 30(1) are subject to a minimum fine of $25,000, on the invitation of HPI, the trial judge relied on s. 59(2) of the Provincial Offences Act (“POA“) to impose a fine of only $600. Section 59(2) provides courts with discretionary authority to impose a fine less than a declared minimum, if the imposition of such minimum fine would be unduly oppressive or otherwise contrary to the interests of justice.4
On appeal of sentence by the Crown, HPI’s fine was increased to $5,000. While the ONCJ found that the trial judge erred in finding certain circumstances as mitigating (namely, the Crown’s decision to prosecute under Part III of the OWRA (which prescribes harsher penalties than Part I) and HPI’s lack of prior convictions), HPI was once again granted relief from the minimum fine under s. 59(2) of the POA. The ONCJ determined the $25,000 fine to be “patently unfair”, given the low severity of the incident, the Crown’s weak case and HPI’s guilty plea. The ONCJ also considered HPI’s lack of prior convictions, not as a mitigating factor but rather a circumstance that brought this offence into the “exceptional” category whereby relief from the minimum fine was warranted.5
Allowing the Crown’s second sentence appeal, the ONCA varied the sentence and imposed the minimum fine of $25,000. The ONCA determined the ONCJ inappropriately cited HPI’s guilty plea on the Crown’s weak case as a mitigating factor and undermined the purpose of the OWRA, as the circumstances of HPI’s offence did not meet the threshold of “exceptional” that is necessary to warrant a departure from the minimum fine.
The ONCA noted that while the terms “unduly oppressive” and “in the interests of justice”, in s.59(2) of the POA, do not have a settled core meaning, they must be understood in the context of the Legislature’s decision to promote deterrence in the public welfare sphere through the imposition of minimum fines. The ONCA held that discretion to provide relief from a minimum fine may only be exercised by courts in truly exceptional circumstances, as the exercise of such discretion too readily would undermine the deterrence-based purpose of public welfare legislation. As a fine will generally only meet the “unduly oppressive” threshold when it imposes personal financial hardship, relief under this prong will normally be limited to individuals. Corporations will thus be limited to relief under the “otherwise not in the interests of justice” prong. While “interests of justice” allows for broader considerations, the ONCJ cautioned that these concerns must always be balanced against the interests of the community in imposing the minimum fine. Unless the scale tips in favour of the party seeking relief, the minimum fine must be imposed.6
The ONCA was careful to note that under both prongs, discretion must always be exercised within the constraints of the statutory scheme and never arbitrarily. Judges do not have power to provide relief from a minimum fine that is simply “unfair”, as unfairness is not a “freestanding test” that triggers relief under s. 59(2) of the POA.7
While the facts of the case stem from the s. 30(1) offence under the OWRA, the ONCA decision provides commentary on minimum fines in the regulatory context generally (e.g. Environmental Protection Act (“EPA“), Liquor Licence Act, etc.).
In supporting a very strict application of the use of s. 59(2) to relieve against a minimum penalty, the ONCA provides the justification that the minimum penalty regimes (e.g. s.109 of the OWRA, but see also s.187(4) of the EPA) apply to the “more serious offences”. While it is correct that minimum penalties are triggered for some serious offences, there are several categories of offences that also trigger harsh minimum penalties in factual circumstances that are objectively environmentally trivial. Consider, for example, a slight exceedance of a numerical limit in an Environmental Compliance approval where there is no impact in any way on the natural environment. Such an offence would trigger the minimum penalty sections.
While the ONCA is correct to be vigilant of situations where judges may reverse the intention of the Legislature, care should be taken not to limit judicial discretion to such a degree that relief from minimum penalties is effectively unavailable. Section 59(2) of the POA was equally enacted by the legislature with a purpose in mind. Trial judges and justices are best suited, having heard the evidence of witnesses, to assess the “interests of justice” and yes, fairness.
1 2018 ONCA 999 (“Henry of Pelham“); R.S.O. 1990, c. O.40.
2 Henry of Pelham at paras 6-7.
3 Ibid at paras 9-10.
4 R.S.O. 1990, c. P.33; Ibid at paras 11-13.
5 Ibid at paras 19-22.
6 Ibid at paras 52-57.
7 Ibid at paras 61-62.
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About the Authors
Peter Brady is a partner in the McCarthy Tétrault LLP Litigation and Mining Groups and co-head of the firm’s National Environmental, Regulatory & Aboriginal Group. He brings vast experience in Environmental law, extractive industry projects, occupational health and safety law, and anti-corruption compliance to McCarthy Tétrault. Peter advises and represents clients in all legal aspects of regulatory litigation, with particular emphasis in the areas of environmental law, occupational health & safety law and mining law.
Leah Whitworth is an associate in the McCarthy Tétrault LLP Business Law Group in Vancouver. She maintains a general corporate and commercial practice, which includes mergers and acquisitions, secured lending, private equity and investments. Leah represents clients in various industries, including financial services, infrastructure and technology. She has experience advising clients on a variety of corporate transactions, including asset and share transactions, private placements and bond offerings.