Court of Appeal Increases Corporate Fine in Fatal Accident

by Bennett Jones LLP
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In December 2009, four workers fell to their deaths while repairing balconies at an apartment complex in north Toronto. The accident was caused by the site supervisor’s negligence (he died in the accident). The construction company, Metron Construction Corporation, and its president and sole director, Joel Swartz, were charged under the Occupational Health and Safety Act and Criminal Code on the basis of the site supervisor’s actions.

Swartz and Metron pleaded guilty. Swartz was convicted of four counts under the Occupational Health and Safety Act and fined $90,000 (plus the 25% victim fine surcharge).  This was the highest fine ever imposed against an individual under the Act.  Swartz and the Crown made a joint sentencing submission, which the sentencing judge accepted.

Metron pleaded guilty to criminal negligence causing death under the Criminal Code, but Metron and the Crown disagreed on the fine. The Crown sought a fine of $1 million. Metron argued for a fine of $100,000. The judge imposed a fine of $230,000, including the victim fine surcharge. The judge based his decision, in part, on the fact that a fine of $1 million ” would likely drive [Metron] into bankruptcy”.

The Crown appealed. The Court of Appeal, in a decision released on September 4, 2013, agreed with the Crown that the fine was too low and ordered Metron to pay $750,000. In coming to this conclusion, the Court of Appeal considered the factors relevant to sentencing corporations for occupational fatalities:

  1. The sentencing judge used fines under the OHSA as a benchmark. The Court of Appeal rejected this approach, saying that the Criminal Code is intended to “provide additional deterrence for morally blameworthy conduct”.
  2. Though the Criminal Code provides that ability to pay is relevant to fines against individuals, the Court found that the same prerequisite does not apply to corporations.
  3. The Court of Appeal held that the prospect of the corporation going bankrupt is not irrelevant. Though it is one factor to be considered, it is not determinative. In this case, the Court found that there was no obvious public interest in the continued viability of Metron (i.e., it had a few employees and there was no evidence of its importance to the community or its value as a source of supply or as an industry participant).
  4. The Court of Appeal concluded that the $200,000 fine was simply too low, given the seriousness of the offence. Four workers died. Two more were injured. The accident was preventable. As the Court concluded, the sentence of a fine of $200,000 was “manifestly unfit”.

Metron is only the second case decided under the criminal negligence provisions of the Criminal Code and the first where the parties did not agree on the sentence. Given cases are very fact-based, it is difficult to know how much impact this decision may have for fines resulting from workplace accidents. It does seem to signal the Crown’s desire to impose more significant penalties. It seems clear that the Crown, and the courts, are determined to ensure that employers understand that, in certain circumstances, workplace accidents, even those caused by mid-level employees, may result in serious penalties, even if the fine would financially impair the company.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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