Chartered Professional Accountants of Ontario v. Gujral

CITATION: Chartered Professional Accountants of Ontario v. Gujral, 2020

ONCJ 307

DATE: July 3, 2020

IN THE MATTER OF

the Chartered Professional Accountants of Ontario Act, 2017,

S.O. 2017, c. 8, Sched. 3,

the Certified Management Accountants Act, 2010, S.O. 2010, c. 6, Sched. B,

and the Chartered Accountants Act, 2010, S.O. 2010, c. 6, Sched. C.

Between

Chartered Professional Accountants of Ontario

prosecutor

and

Joginder Singh GUJRAL

(No. 2)

defendant

Ontario Court of Justice

Brampton, Ontario

Quon J.P.

Reasons for Sentence

Offences convicted on (8 counts):

Between March 1, 2017 and June 30, 2018 at the City of Brampton, Joginder Singh

GUJRAL,

(1) committed 3 counts of taking or using designations or initials or a description implying that he

is a Certified Management Accountant, or otherwise holding himself out as a Certified

Management Accountant, while not being a member of the Certified Management Accountants

of Ontario, contrary to section 26 of the Certified Management Accountants Act, 2010;

(2) committed 2 counts of taking or using designations or initials or a description implying that he

is a Chartered Accountant, or otherwise holding himself out as a Chartered Accountant, while

not being a member of the Institute of Chartered Accountants of Ontario, contrary to section 27

of the Chartered Accountants Act, 2010;

(3) committed of 3 counts of taking or using designations or initials or a description implying that

he is a Chartered Professional Accountant, Chartered Accountant, Certified Management

Accountant, or Certified General Accountant, or otherwise holding himself out as a Chartered

Accountant, while not being a member of the Chartered Professional Accountants of Ontario,

contrary to section 29 of the Chartered Professional Accountants of Ontario Act, 2017;

(4) committed of 1 count of practicing as a Chartered Professional Accountant while not being a

member of the Chartered Professional Accountants of Ontario, contrary to section 29(1)(d) of

the Chartered Professional Accountants of Ontario Act, 2017.

i

Sentencing hearing held:

Judgment released:

January 17, 2020.

July 3, 2020.

Counsel:

Madeline Brown, Polley Faith LLP, counsel for the Chartered Professional

Accountants of Ontario.

Joginder Singh Gujral, unrepresented.

Cases Considered or Referred To:

Abrametz v. The Law Society of Saskatchewan, [2018] S.J. No. 217 (Sask. C.A.).

Allen v. Law Society of New Brunswick, [2017] N.B.J. No. 190 (N.B.C.A.).

Barik v. College of Physicians and Surgeons of Saskatchewan, [1992] S.J. No. 50 (Sask. C.A.).

Brand v. College of Physicians and Surgeons of Saskatchewan, [1991] S.J. No. 417 (Sask. Q.B.).

British Columbia (Minister of Forests) v. Okanagan Indian Band, [2003] S.C.J. No. 76 (S.C.C.).

Cohen v. Kealey & Blaney, [1985] O.J. No. 160 (Ont. C.A.), per Howland C.J.O., Lacourciere and

Robins JJ.A.

Chartered Professional Accountants of Ontario v. Gujral, [2019] O.J. No. 6103 (Ont. C.J.), per

Quon J.P.

Creager v. Provincial Dental Board of Nova Scotia, [2005] N.S.J. No. 32 (N.S.C.A.).

Czumak v. Etobicoke (City), [1994] O.J No. 2247 (Ont. Ct. (Prov. Div.)), per Fairgrieve J.

Davies v. Clarington (Municipality) (2009), 100 O.R. (3d) 66 (Ont. C.A.), per Goudge, Sharpe and

Epstein JJ.A.

Gichuru v. Smith (c.o.b. Howard Smith & Co.), [2014] B.C.J. No. 2646 (B.C.C.A.).

Groia v. Law Society of Upper Canada, [2018] S.C.J. No. 27 (S.C.C.).

Groia v. Law Society of Upper Canada, [2016] O.J. No. 3094 (Ont. C.A.), per MacPherson, Cronk

and Brown JJ.A.

Hatfield v. Nova Scotia Barristers' Society, [1978] N.S.J. No. 677 (N.S.C.A.).

Hoff v. Alberta Pharmaceutical Assn., [1994] A.J. No. 218 (Alta. Q.B.).

James v. Real Estate Council of Alberta, [2004] A.J. No. 1422 (Alta. Q.B.).

Jaswal v. Newfoundland Medical Board, [1996] N.J. No. 50 (Nfld.S.C. (Trial Div.).

Johnson v. The King, [1904] A.C. 817 (J.C.P.C.).

Lambert v. College of Physicians and Surgeons, [1992] S.J. No. 311 (Sask. C.A.).

ii

Law Society of British Columbia v. Taschuk, [1999] L.S.D.D. No. 32 (Law Society of B.C.).

Little Sisters Book and Art Emporium v. Canada (Commissioner of Customs and Revenue),

[2007] 1 S.C.R. 38 (S.C.C.).

Moore v. College of Physicians and Surgeons of Ontario, [2003] O.J. No. 5200 (Ont. S.C. (Div.

Ct.)), per Then, Benotto and Jennings JJ.

Ontario (Ministry of Labour) v. New Mex Canada Inc., [2019] O.J. No. 227 (Ont. C.A.), per

MacPherson, Miller and Paciocco JJ.A.

Ontario (Ministry of Labour) v. Sunrise Propane Energy Group Inc., [2013] O.J. No. 3086 (Ont.

C.J.), per Chapin J.

Pearlman v. Manitoba Law Society Judicial Committee, [1991] S.C.J. No. 66 (S.C.C.).

R. v. 974649 Ontario Inc. c.o.b. as Dunedin Construction (1992) and Bob Hoy, [2001] S.C.J. No.

79 (S.C.C.).

R. v. Abrosimo, [2007] B.C.J. No. 1700 (B.C.C.A.).

R. v. Angelillo, [2006] S.C.J. No. 55 (S.C.C.).

R. v. Armco Canada Ltd. and Nine other Corporations (No. 2) (1975), 24 C.C.C. (2d) 147

(O.H.C.) per Lerner J.; varied 30 C.C.C. (2d) 183 (O.C.A.).

R. v. C. (K.), [2005] O.J. No. 2046 (Ont. C.J.), per Kukurin J.

R. v. Caron, [2011] S.C.J. No. 5 (S.C.C.).

R. v. Caron, [2007] A.J. No. 449 (Alta. Q.B.).

R. v. Chan, [2012] A.J. No. 1023 (Alta. Prov. Ct.), per Fradsham J.

R. v. Ciarniello (2006), 81 O.R. (3d) 561, [2006] O.J. No. 3444, 211 C.C.C. (3d) 540 (Ont. C.A.),

per Sharpe and Juriansz JJ.A. and G.D. Lane J. (ad hoc).

R. v. Cotton Felts Ltd. (1982), 2 C.C.C. (3d) 287, [1982] O.J. No. 178 (Ont. C.A.), per Martin,

Zuber and Blair JJ.A.

R. v. D.F.P. (2005), 197 C.C.C. (3d) 498, [2005] N.J. No. 176 (N.L.C.A.).

R. v. D.S.K., [2005] S.J. No. 97 (Sask. C.A.).

R. v. Dumont, [2002] A.J. No. 424 (Alta. Prov. Ct.).

R. v. Dodson, [2000] O.J. No. 35 (Ont. C.A.), per Laskin, Feldman and O'Connor JJ.A.

R. v. E.T.P., [2002] M.J. No. 64 (Man. C.A.).

R. v. Felderhof, [2003] O.J. No. 393 (Ont. S.C.), per Campbell J.

R. v. Felderhof, [2003] O.J. No. 4819, 68 O.R. (3d) 481 (Ont. C.A.), per Carthy, Doherty and

Rosenberg JJ.A.

R. v. Gardiner, [1982] S.C.J. No. 71 (S.C.C.).

iii

R. v. Hicks, [2007] N.J. No. 219 (N.L.C.A.).

R. v. Jones (1994), 89 C.C.C. (3d) 353, 114 D.L.R. (4th) 645, [1994] 2 S.C.R. 229 (S.C.C.).

R. v. Kirk (c.o.b. B.A. Holdings), [2005] O.J. No. 3316 (O.C.J.), per Kukurin J.

R. v. M.(C.A.) (1996), 105 C.C.C. (3d) 327, [1996] S.C.J. No. 28 (S.C.C.).

R. v. Ouellette, [1980] 1 S.C.R. 568, [1980] S.C.J. No. 12 (S.C.C.).

R. v. P.H.H. (No. 2), [1997] O.J. No. 4234 (Ont. Ct. (Prov. Div.)) per Renaud J.

R. v. Rasper, [1978] O.J. No. 334 (Ont. C.A.), per Martin, Lacourciere and Houlden JJ.A.

R. v. Sears (1978), 39 C.C.C. (2d) 199 (Ont. C.A.), per Arnup, Dubin and Zuber, JJ.A.

R. v. Snider, (1977), 37 C.C.C. (2d) 189, [1977] O.J. No. 996 (Ont. C.A.), per. Martin, Lacourciere

and Weatherston JJ.A.

R. v. Solomon, [2008] S.C.J. No. 55 (S.C.C.).

R. v. Tiegs, [2012] A.J. No. 378 (Alta. C.A.).

R. v. Tiffin (2008), 90 O.R. (3d) 575 (Ont. C.A.), per MacPherson, Juriansz and LaForme JJ.A.

R. v. Topp, [2011] S.C.J. No. 43 (S.C.C.).

R. v. Virk, [2002] O.J. No. 4102 (O.C.J.), per Madigan J.P.

R. v. Ward (1980), 56 C.C.C. (2d) 15, [1980] O.J. No. 1439 (O.C.A.), per Martin, Blair and

Goodman JJ.A.

R. v. Wells, [2003] O.J. No. 2025 (Ont. C.J.), per Lane J.

R. v. Wharry, [2008] A.J. No. 945 (Alta. C.A.).

R. v. Wholesale Travel Group Inc., [1991] S.C.J. No. 79 (S.C.C.).

R. v. Wu, 2003 SCC 73, [2003] 3 S.C.R. 530 (S.C.C.).

Real Estate Council Of Ontario v. Wang, [2013] O.J. No. 4294 (Ont. C.J.), per Fairgrieve J.

Reid v. College of Chiropractors of Ontario, [2016] O.J. No. 3080 (Ont. S.C. (Div. Ct.), per

Marrocco A.C.J.S.C.J., Wilson and Pattillo JJ.

Roberts v. College of Dental Surgeons of British Columbia, (1999), 63 B.C.L.R. (3d) 116, [1999]

B.C.J. No. 357 (B.C.C.A.).

Sazant v. College of Physicians and Surgeons of Ontario, [2011] O.J. No. 192 (Ont. S.C. (Div.

Ct.), per Jennings, Swinton and Sachs JJ.

Shpak v. Institute of Chartered Accountants of British Columbia, [2003] B.C.J. No. 514 (B.C.C.A.).

Wachtler v. College of Physicians and Surgeons of Alberta, [2009] A.J. No. 347 (Alta. C.A.).

iv

Zesta Engineering Ltd. v. Cloutier, [2002] O.J. No. 4495 (Ont. C.A.), per Finlayson, Charron and

Simmons JJ.A.

Statutes, Regulations and Rules Cited:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 178(1)(a).

Certified Management Accountants Act, 2010, S.O. 2010, c. 6, Sched. B, ss. 1, 14, 14(1), 15, 26,

26(1), 26(1)(d), 26(2), 26(2)(1), 26(2)(1)(ii), 26(3), 26(6), 27, 27(1), 27(3), 28(1), and 38.

Chartered Accountants Act, 2010, S.O. 2010, c. 6, Sched. C, ss. 1, 11, 12, 27, 27(1), 27(1)(d),

27(2), 27(2)(1)(ii), 27(3), 27(6), 28, 28(1), 28(3), 29(1), and 38.

Chartered Professional Accountants of Ontario Act, 2017, S.O. 2017, c. 8, Sched. 3, ss. 1, 5,

15(1), 15(3), 17, 18, 18(2), 29, 29(1), 29(1)(d), 29(2), 29(2)(b), 29(3), 29(6), 30, 30(1), 30(3), 31,

31(1), and 38.

Criminal Code, R.S.C. 1985, c. C-46, ss. 718, 718.1, 718.2, 718.2(c), 723(1), 723(2), and

724(1).

Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131 and 131(1).

Law Society Act, R.S.M. 1987, c. L100, s. 52(4).

Law Society Act, R.S.O. 1990, c. L.8, ss. 26.2(6), 49.28, and 61.0.7(9).

Provincial Offences Act, R.S.O. 1990, c. P.33, ss. 18.3(2), 29(3), 53(3), 57(3), 60(1), 60(2), 68(4),

72, 72(2), 72(3)(a), 81, 90(2), 129, 138(3), 139(3), and 142(5).

Regulated Health Professions Act, 1991, S.O. 1991, c. 18, s. 53.1.

Rules Of Civil Procedure (Courts of Justice Act, R.R.O. 1990), O. Reg. 194, Rule 57, Tariff A.

Reference Material Considered or Cited:

Glenn, H. Patrick, “Costs And Fees In Common Law Canada And Quebec”, online: <http://www-

personal.umich.edu/~purzel/national_reports/Canada.pdf>,

Ruby, Clayton C. Sentencing (2ed) (Toronto, Canada: Butterworths, 1980).

Salte, B. The Law of Professional Regulation (Markham, Ontario: LexisNexis Canada Inc., 2015),

at p. 262.

Stewart, S. Stewart on Provincial Offences Procedure in Ontario (3rd. Ed.) (Toronto, Canada:

Earlscourt Legal Press, Inc., 2011).

Exhibits entered:

Exhibit "1" - Affidavit of Nykhol Mancini sworn on January 17, 2020, attesting that the affiant is

a legal assistant with the law firm Polley Faith LLP and that the affiant had taken a

screen shot of Joginder Singh Gujral’s LinkedIn profile webpage on January 16,

2020, which consists of 3 legal-sized pages that show Gujral is still using his

v

foreign professional accounting designations of CMA(USA), FCA(India),

FCMA(India) publicly in Ontario without including the required disclaimer that

Gujral is not a member of CPA Ontario and not regulated by CPA Ontario (6

pages).

Exhibit "2" - copy of Statement Of Earnings And Deductions from indicating a payment dated

for January 31, 2019, to Joginder Gujral for the pay period ending January 26,

2019. The statement also indicated that the total amount of earnings for the 2-

week pay period was for $3461.54 based on an hourly rate of $47.4184 for 73

hours; that the pay period was 03 of 26 pay periods; that the net amount (after

deductions) payable to Gujral was for $2350.27; and that Gujral had last been

hired on April 30, 2018. The employer is stated as Data Communications

Management Corp. with an address of 9195 Torbram Rd., Brampton, Ontario L6S

6H2 (1 page).

Exhibit "3" - copy of the total costs & disbursements of $58,190.60 incurred by Polley and Faith

LLP in respect to the prosecution of Joginder Singh Gujral from June 1, 2018 to

January 16, 2020 which contain 14 invoices presented by Polley and Faith LLP to

the Chartered Professional Accountants of Ontario for their legal fees and

disbursements (30 pages).

Exhibit "4" - copy of letter containing Joginder Singh Gujral’s written submissions in regards to

an appropriate sentence, in which Gujral requests that his entire fine and fees be

waived because Gujral has 3 dependents (his wife who is a housewife and does

not earn any income, his daughter who is a university student who does not earn

any income, and is son who is a grade 12 student who does not earn any income)

and because Gujral does not earn enough to support them all or for paying all of

his bills, and that each month Gujral’s borrowings/loan keep increasing. And in lieu

of waiving off the fines and fees, Gujral submits that he is willing to do community

service instead because Gujral may declare bankruptcy if a fine is actually

imposed on him. However, in the alternative to waiving off his fines or fees, Gujral

submits that he is willing to pay $2000 as a fine, which would be all inclusive of

lawyers fees, court fines and all other charges, to be paid over 40 months, at $50

per month.

[However, no financial documents, income tax returns, bank

statements, mortgage documents were attached to Gujral’s letter to support his

submissions in respect to his inability to pay a fine or his inability to reimburse CPA

Ontario for reasonable legal costs incurred by CPA Ontario for the prosecution of

Gujral].

vi

1.

INTRODUCTION

[1]

Besides having to decide what penalty or sanction, if any, should be imposed on

the convicted offender as an appropriate sentence, the issue that has arisen in this

regulatory offences sentencing is whether the convicted offender should also be

ordered to pay $58,190.60 in costs, which is the amount of legal fees and

disbursements incurred and sought by the prosecution. And, if a costs order is

warranted, then it will also have to be determined whether all or part of the

prosecution’s costs should be paid by the offender, as well as what factors or

criteria should be considered or used to calculate the actual amount of those costs

that should be paid by the offender and to assess the reasonableness of that

amount.

[2]

[3]

For the present sentencing, Joginder Singh Gujral had been convicted on

November 29, 2019, of committing 8 public welfare or regulatory offences in

respect to 3 different professional accounting statutes in Ontario (see Chartered

Professional Accountants of Ontario v. Gujral, [2019] O.J. No. 6103 (Ont. C.J.)).

The 8 strict liability regulatory offences had been committed by Gujral between

March 1, 2017 and June 30, 2018 in the City of Brampton. They had been for

practicing as a Chartered Professional Accountant while not being a member of

the Chartered Professional Accountants of Ontario (“CPA Ontario”), as well as for

taking or using designations or initials or a description on websites available to be

viewed by the public in Ontario implying that he was a Certified Management

Accountant, a Chartered Accountant, or a Chartered Professional Accountant in

Ontario, or otherwise holding himself out as one of those accounting professionals

when Gujral was not respectively a member of the Certified Management

Accountants of Ontario, a member of the Institute of Chartered Accountants of

Ontario, or a member of CPA Ontario. These were offences under s. 26 of the

Certified Management Accountants Act, 2010, S.O. 2010, c. 6, Sched. B, s. 27 of

the Chartered Accountants of Ontario Act, 2010, S.O. 2010, c. 6, Sched. C., and s.

29 of the Chartered Professional Accountants of Ontario Act, 2017, S.O. 2017, c.

8, Sched. 3, respectively.

[4]

Although the offender, Joginder Singh Gujral, had received the professional

accounting designations of “Chartered Accountant”, “Fellow Chartered

Accountant”, “Cost Management Accountant”, “Fellow Cost Management

Accountant” in India and his “Certified Management Accountant” designation from

the United States, and had also worked as a professional accountant for

approximately 20 years for major international corporations, Gujral was not legally

permitted to publicly use his foreign professional accounting designations, initials,

or descriptions in Ontario unless he was a member of the Certified Management

Accountants of Ontario, the Institute of Chartered Accountants of Ontario, or of

CPA Ontario. Gujral was indeed not a member of any of the professional

accounting bodies in Ontario at the time when he had committed the 8 regulatory

offences, nor is he a member of CPA Ontario at the time of the sentencing

1

hearing. But, for a time, Gujral had been enrolled as a student of CPA Ontario

from June 23, 2015 to February 12, 2018, and taking courses and preparing for

the Common Final Exam that are prerequisites for membership in CPA Ontario.

However, since Gujral had failed to pass the Common Final Exam on three

attempts, Gujral was deregistered as a student of CPA Ontario on February 12,

2018.

[5]

On the other hand, Gujral would have been legally permitted to use his foreign

professional accounting designations, initials, or descriptions in respect to a

member of the public in Ontario, if its use, or Gujral’s purpose, fell within the 3

legal exceptions set out in the 3 professional accounting statutes of Ontario that

had applied to Gujral, and where Gujral had also expressly included the qualifying

statement or proviso of, “I am not a member of Chartered Professional

Accountants of Ontario (CPA Ontario) and I am not governed by CPA Ontario. My

services have not been approved or endorsed by CPA Ontario”, alongside his

foreign professional accounting designations, initials, or descriptions. Moreover,

for the 8 regulatory offences committed by Gujral, Gujral’s public use of his foreign

professional accounting designations, initials, or descriptions on his websites,

which were readily available to be viewed by the public in Ontario, did not fall

within the 3 statutory exceptions set out in the 3 governing statutes, nor did Gujral

include the legally required qualifying statement or proviso about his non-

membership in CPA Ontario in any of his webpages that were available for public

viewing in Ontario.

[6]

Joginder Singh Gujral’s sentencing hearing was held on January 17, 2020. In their

sentencing submissions, the prosecution sought as an appropriate sentence for

Gujral’s 8 convictions the following: (1) a total monetary fine of $48,000, which

comprises of a fine of $6000 for each of the 8 convictions (exclusive of the court

costs and the victim fine surcharge); (2) a period of probation for 2 years with a

condition that Gujral not commit the same or similar offences during the

probationary period; and (3) an order that Gujral pay the total legal costs and

disbursements incurred by CPA Ontario in the prosecution of Gujral for those 8

regulatory offences, which had amounted to $58,190.60.

[7]

Conversely, Joginder Singh Gujral, in his oral and written sentencing submissions,

made a request that the court waive any fines or fees and instead order Gujral to

do community service. Alternatively, if there were to be a fine imposed by the

court then Gujral had requested that his fine should be in the amount of $2,000

inclusive of all fees and costs, which would be paid off over 40 months, at $50 a

month, because Gujral contends that he does not having enough money to

support himself and his wife and two children, nor to pay his monthly bills and

mortgage. Moreover, Gujral also submitted that if a fine were to be imposed on

him then Gujral might have to declare bankruptcy. However, at the sentencing

hearing on January 17, 2020, Gujral did not submit any financial documents, such

as bank statements, mortgage documents, loan payment documents, current pay

stubs (the prosecution had been the party who had submitted a pay stub for

2

Gujral, which Gujral had provided to the prosecution), income tax returns, social

assistance benefit documents, or other documents in respect to his and his

family’s living expenses, which would support his contention that he is

impecunious or that he lacks the ability to pay a fine within a reasonable period.

On the other hand, when Gujral was informed that when one contends an inability

to pay a fine one would likely need documentary proof to support that claim,

considering there was evidence that Gujral had 2 full-time jobs, and then when he

was asked why he did not bring any financial documents to prove his contention

that he would be unable to pay a fine after being reminded that his sentencing

hearing was being conducted at that time on January 17, 2020, Gujral remarked

that he would bring such documentary proof on the next date, which would have

been on May 5, 2020, the date scheduled for Gujral’s sentence to be actually

rendered in court. In addition, Gujral did not contend that he had any unusual

expenses or debts which would be different from anyone else in Canada, who also

carry a mortgage and have children in school and a spouse who does not work

outside the home.

[8]

As for the prosecution’s request for an order requiring Joginder Singh Gujral to pay

CPA Ontario’s “legal costs” that were incurred in the prosecution of Gujral, the

legal requirement for a member of a regulated profession in Canada, after having

been found to have committed professional misconduct by the disciplinary

committee of their governing body, to pay to their governing body the costs

incurred by the governing body in the investigation of the member and in holding a

disciplinary hearing for a member’s professional misconduct under administrative

law proceedings is a regular consequence, but they are rarely available as part of

a sentence that can be imposed on someone convicted of committing a quasi-

criminal or regulatory offence. However, in the present case, the 3 professional

accounting statutes in Ontario that govern and regulate professional accountants

in Ontario that were in force and applicable to Gujral at the time the 8 regulatory

offences had been committed by Gujral, do expressly provide for, as well as legally

empowering the sentencing court to make such an order as part of an appropriate

sentence.

Specifically, Gujral, as a non-member of CPA Ontario or its

predecessor bodies, may be ordered to pay to CPA Ontario, the “reasonable

costs” that had been incurred by them for the investigation and prosecution of

Gujral. Furthermore, these 3 accounting statutes applicable to Gujral legally

permit either a disciplinary committee to order reasonable costs to be paid by

members to the governing accounting body, or as in the present case, a court to

order reasonable costs to be paid by non-members to the specific governing

accounting body enforcing one of the professional accounting statutes in Ontario.

[9]

Ergo, in order to arrive at a fit and just sentence for Joginder Singh Gujral for the 8

regulatory offences that he was convicted of committing, it will have to be first

determined what the appropriate fine should be, if any, in order to address the

primary sentencing factors of general and specific deterrence; secondly, it will

have to be determined whether a period of probation with conditions is required;

and thirdly, it will have to be determined whether any “reasonable costs” that had

3

been incurred by CPA Ontario for the prosecution of Gujral’s 8 regulatory offences

should be ordered to be paid by Gujral to CPA Ontario, as legally permitted under

the 3 governing accounting statutes.

2.

BACKGROUND

(A) THE REGULATORY OFFENCES COMMITTED BY JOGINDER SINGH

GUJRAL

[10] The offender, Joginder Singh Gujral, had been convicted on November 29, 2019,

of committing the 8 regulatory offences set out in Information #5539. The 8

convictions had been for the following 8 regulatory offences that were committed in

Brampton between March 1, 2017 and June 30, 2018:

(1) taking or using designations or initials or a description implying that he is a

Certified Management Accountant, or otherwise holding himself out as a

Certified Management Accountant, while not being a member of the

Certified Management Accountants of Ontario, to wit: on the website

http://gujraltutor.com, contrary to section 26 of the Certified Management

Accountants Act, 2010;

(2) taking or using designations or initials or a description implying that he is a

Certified Management Accountant, or otherwise holding himself out as a

Certified Management Accountant, while not being a member of the

Certified Management Accountants of Ontario, to wit: in a Kijiji

advertisement, to section 26 of the Certified Management Accountants Act,

2010;

(3) taking or using designations or initials or a description implying that he is a

Chartered Accountant, or otherwise holding himself out as a Chartered

Accountant, while not being a member of the Institute of Chartered

Accountants of Ontario, to wit: on the website http://gujraltutor.com, contrary

to section 27 of the Chartered Accountants Act, 2010;

(4) taking or using designations or initials or a description implying that he is a

Chartered Accountant, or otherwise holding himself out as a Chartered

Accountant, while not being a member of the Institute of Chartered

Accountants of Ontario, to wit: in a Kijiji advertisement, contrary to section

27 of the Chartered Accountants Act, 2010;

(5) taking or using designations or initials or a description implying that he is a

Chartered Professional Accountant, Chartered Accountant,

Certified

Management Accountant, or Certified General Accountant, or otherwise

holding himself out as a Chartered Accountant, while not being a member of

the Chartered Professional Accountants of Ontario, to wit: on a LinkedIn

profile, contrary to section 29 of the Chartered Professional Accountants of

Ontario Act, 2017;

4

(6) taking or using designations or initials or a description implying that he is a

Chartered Professional Accountant, Chartered Accountant, Certified

Management Accountant, or Certified General Accountant, or otherwise

holding himself out as a Chartered Accountant, while not being a member of

the Chartered Professional Accountants of Ontario, to wit: on the website

http://home.icmai-canada.org., contrary to section 29 of the Chartered

Professional Accountants of Ontario Act, 2017;

(7) taking or using designations or initials or a description implying that he is a

Chartered Professional Accountant, Chartered Accountant,

Certified

Management Accountant, or Certified General Accountant, or otherwise

holding himself out as a Chartered Accountant, while not being a member of

the Chartered Professional Accountants of Ontario, to wit: on the website

http://gujralaccounting.ca, contrary to section 29 of the Chartered

Professional Accountants of Ontario Act, 2017; and

(8) practising as a Chartered Professional Accountant while not a member of

the Chartered Professional Accountants of Ontario, contrary to section

29(1)(d) of the Chartered Professional Accountants of Ontario Act, 2017.

(B) THE OFFENDER, JOGINDER SINGH GUJRAL

[11] The offender, Joginder Singh Gujral, was 48 years old at the time of the trial. He

was born in India and attended university in India where he graduated with a

Bachelor of Commerce degree and a Master of Business Administration degree.

Furthermore, the defendant has approximately 20 years of experience working as

a Chartered Accountant (C.A.) or Cost and Management Accountant (C.M.A.) with

various international companies in India and elsewhere, before he was accepted

as a student of CPA Ontario on June 23, 2015. Gujral was enrolled and took the

required CPA Ontario courses, and also studied to write the Common Final Exam

for admission as a member of CPA Ontario. In addition, Gujral wrote the Common

Final Exam 3 times but failed to pass the Common Final Exam on these 3

occasions, and as such, was deregistered by CPA Ontario as a student of CPA

Ontario on February 12, 2018.

[12] Gujral had also emigrated to Canada with his wife and 2 children. Presently,

Gujral has the status of a permanent resident of Canada and is presently a

resident in Brampton, Ontario.

[13] Moreover, Gujral testified at his trial that he was very busy as he had 2 full-time

jobs. Exhibit #2 (for Sentencing) indicates that for one of his jobs he has been and

is still employed with Data Communications Management Corp. of 9195 Torbram

Rd., Brampton, Ontario, since April 30, 2018, where he earns approximately

$90,000 per year before deductions ($47.4184 per hour for 73 hours of work every

2 weeks for 26 pay periods in a year, which would make it approximately $90,000

a year).

5

[14] Furthermore, on his website “http://gujralaccounting.ca” (see Exhibit #14 in the

trial), Gujral advertised that his accounting firm, “Gujral Accounting”, had offices in

Ontario in which he and his accounting firm provided professional services that

included accounting and taxation services to a broad range of small or medium-

sized entrepreneurial clients, and that Gujral Accounting serves the Greater

Toronto Area including Brampton, Mississauga, Toronto, Thornhill, Richmond Hills,

Scarborough, North York and Etobicoke.

[15] Moreover, Gujral has also purchased a house in Brampton, Ontario, which is

located at 5 Keystone Drive in Brampton. Gujral also indicated that he has a

mortgage on that property.

[16] Furthermore, by written and oral submissions, Gujral stated that he also has 3

dependents, his wife who is a housewife that does not earn any income, a

daughter who is a university student that does not earn any income, and a son

who is a grade 12 high school student that does not earn any income.

(C) JOGINDER

SINGH

GUJRAL

HAD

OBTAINED

SEVERAL

PROFESSIONAL ACCOUNTING DESIGNATIONS FROM INDIA AND

THE UNITED STATES

[17] Gujral had received the professional accounting designation of “Chartered

Accountant (C.A.)” from the Institute of Chartered Accountants of India in 1995.

He was also granted in 2012 by the Institute of Chartered Accountants of India the

designation of “Fellow Chartered Accountant (F.C.A.)”. In addition, Gujral had

received the accounting designation “Cost and Management Accountant (C.M.A.)”

from the Institute of Cost Accountants of India in 2002. Gujral also received from

the Institute of Cost and Management Accountants of India the accounting

designation of “Fellow Cost and Management Accountant (F.C.M.A.)” in 2012.

Furthermore, Gujral received the accounting designation of “Certified Management

Accountant (C.M.A.)” from the Institute of Management Accountants of the United

States (date it was obtained is unknown).

(D) JOGINDER SINGH GUJRAL WAS NOT A MEMBER OF CPA ONTARIO

OR A MEMBER OF ANY PROFESSIONAL ACCOUNTING BODY IN

ONTARIO PRIOR TO BE CONVICTED OF COMMITTING THE 8

OFFENCES OR AT THE TIME OF SENTENCING.

[18] Joginder Singh Gujral had been registered as a student of CPA Ontario on June

23, 2015. He had commenced the application process to become a student of

CPA Ontario while he was working and residing in Cape Town, South Africa.

[19] Gujral was not exempted by CPA Ontario from the education and examination

(Common Final Exam) requirements for the qualification program of CPA Ontario

for foreign qualified professional accountants, so Gujral had been required to

6

successfully complete those requirements to qualify for admission as a member of

CPA Ontario.

[20] However, Gujral had been deregistered by CPA Ontario as a student of CPA

Ontario on February 12, 2018, after his third attempt and failure in passing the

Common Final Exam (CFE).

[21] But more importantly, students enrolled with CPA Ontario are not “members” of

CPA Ontario for the purpose of being legally permitted to use their foreign

professional accounting designations and their corresponding initials or

descriptions in the public realm in Ontario, which members of CPA Ontario are

legally permitted to do. Only when a student of CPA Ontario successfully

completes the required courses, fulfills the experience requirement and passes the

qualifying exam, is the student then entitled for admission as a member of CPA

Ontario.

[22] In addition, Gujral had not been a member of the Certified Management

Accountants of Ontario, a member of the Institute of Chartered Accountants of

Ontario, or a member of CPA Ontario at the time the 8 regulatory offences had

been committed by Gujral, nor is Gujral presently a member of CPA Ontario.

(E) JOGINDER SINGH GUJRAL IS STILL UNLAWFULLY USING HIS

FOREIGN PROFESSIONAL ACCOUNTING DESIGNATIONS, INITIALS,

OR DESCRIPTIONS ON HIS “LINKEDIN” WEBPAGE, WHICH ARE

ACCESSIBLE AND VIEWABLE BY THE PUBLIC IN ONTARIO

[23] Furthermore, Nykhol Mancini, legal assistant with the law firm Polley Faith LLP, in

her affidavit (Exhibit #1 (for Sentencing)) stated that Joginder Singh Gujral has

been still unlawfully using his foreign professional accounting designations, initials,

or descriptions on his LinkedIn webpage on January 16, 2020, which is the day

before the sentencing hearing held on January 17, 2020.

[24] In particular, Exhibit #1 (for Sentencing) shows that Gujral had used the foreign

professional accounting designations, initials or descriptions of “CMA(USA)”,

“FCA(India)”, and “FCMA(India)” on his LinkedIn webpage that was available to be

viewed by the public in Ontario on January 16, 2020. Furthermore, the public use

of those foreign professional accounting designations, initials or descriptions in

Ontario by Gujral were not exempted by the 3 statutory exceptions set out in the 3

Ontario accounting statutes applicable to Gujral. Moreover, Gujral did not

expressly state or include the required qualifying statement by Gujral on his

LinkedIn webpage that “I am not a member of Chartered Professional Accountants

of Ontario (CPA Ontario) and I am not governed by CPA Ontario. My services

have not been approved or endorsed by CPA Ontario”, alongside those foreign

professional accounting designations, initials, or descriptions.

7

(F) JOGINDER SINGH GUJRAL’S CONDUCT IN THE PROCEEDINGS HAS

CAUSED CPA ONTARIO TO INCUR ADDITIONAL LEGAL COSTS

[25] Even though, Joginder Singh Gujral was self-represented for most of the

proceedings, Gujral did not conduct himself properly throughout the proceedings.

Gujral initially had a paralegal represent him at his first appearance in the

proceedings, but then Gujral self-represented himself after the first appearance.

[26] Gujral’s improper conduct in the proceedings which led to additional costs being

incurred by CPA Ontario first occurred at the Judicial Pre-trial Conference held on

March 26, 2019, where Gujral did not act with sincerity or candour or cooperate

with the Judicial Pre-trial court in setting the earliest trial date. Instead of Gujral

agreeing to set a trial date, Gujral had refused to set a trial date and claimed that

he would be unavailable for the earliest available dates for trial because he had to

be out of the country on those dates. The Judicial Pre-trial court then ordered

Gujral to bring or provide proof on April 8, 2019, that Gujral would be out of the

country on those available trial dates. On April 8, 2019, Gujral produced airline

tickets to the Judicial Pre-trial court as proof that Gujral would be out of the country

on those earliest available trial dates. However, the airline tickets had only been

purchased by Gujral on April 3, 2019, which was a date after the first Judicial Pre-

trial Conference date of March 26, 2019. By not setting a trial date on March 26,

2019, Gujral had caused CPA Ontario to incur costs of an additional court

appearance on April 8, 2019.

[27] Another incident of improper conduct occurred when Gujral brought an

unmeritorious and groundless application on August 19, 2019, to adjourn the

scheduled trial date of September 11, 2019, for which CPA Ontario had to incur

additional legal costs to appear on Gujral’s adjournment application to challenge

the adjournment application that was eventually dismissed. His Worship Bonas,

who had dismissed Gujral’s application to adjourn the scheduled trial date, also

found Gujral’s grounds and motion "frivolous" and "lacking in truthfulness".

[28] Moreover, CPA Ontario had to also incur additional legal costs to research and

address the many frivolous, groundless, and unmeritorious claims of Charter

infringements brought against CPA Ontario at trial. Only Gujral’s claim that his

freedom of expression guaranteed under s. 2(b) of the Charter had been infringed

had any merit.

[29] Accordingly, CPA Ontario had to incur additional legal costs for additional court

appearances to set a trial date and to challenge the groundless adjournment

application, as well as incurring additional legal costs to conduct many hours of

legal research in order to address the many frivolous and unmeritorious Charter

infringement claims brought by Gujral.

8

3. POTENTIAL PENALITIES THAT COULD BE IMPOSED ON JOGINDER SINGH GUJRAL

FOR THE 8 REGULATORY OFFENCES CONVICTIONS UNDER THE 3 APPLICABLE

PROFESSIONAL ACCOUNTING STATUTES

[30] For the 8 strict liability regulatory offences that Joginder Singh Gujral has been

convicted of committing, 2 of the 8 offences were under s. 26 of the Certified

Management Accountants Act, 2010, S.O. 2010, c. 6, Sched. B; another 2 of the 8

offences were under s. 27 of the Chartered Accountants of Ontario Act, 2010, S.O.

2010; and 4 of the 8 offences were under s. 29 of the Chartered Professional

Accountants of Ontario Act, 2017, S.O. 2017, c. 8, Sched. 3.

(A) THE CERTIFIED MANAGEMENT ACCOUNTANTS ACT, 2010

[31] For counts #1 and #2, Joginder Singh Gujral was convicted of committing offences

that are set out under s. 26 of the Certified Management Accountants Act, 2010,

S.O. 2010, c. 6, Sched. B. The penalties or measures that could be imposed on

Gujral for committing an offence under s. 26 include: [1] under s. 27(1), a fine of

not more than $10,000 for each offence; [2] under s. 27(3), a period of probation

that may include a condition that Gujral pay compensation or make restitution to

any person who suffered a loss as a result of the offence and a condition not to

contravene s. 26; and [3] under s. 28(1), an order for Gujral to pay to the “Certified

Management Accountants of Ontario” some or all of the costs reasonably incurred

by them in prosecuting Gujral for the offences in question and in undertaking any

investigation related to the subject matter of the prosecution [emphasis is mine

below]:

Offences and penalty

27(1) Every person who contravenes section 26 is guilty of an offence and on

conviction is liable to a fine of not more than $10,000.

Application to corporation

(2) If a corporation is guilty of an offence under subsection (1), every director

or officer of the corporation who authorized, permitted or acquiesced in

the commission of the offence is deemed to be a party to and guilty of the

offence and on conviction is liable to a fine of not more than $10,000.

Probation orders

(3) On conviction of a person for an offence under this section, the court may

prescribe as a condition of a probation order any of the following:

1. That the person pay compensation or make restitution to any

person who suffered a loss as a result of the offence.

9

2. That the person shall not contravene section 26.

Costs

28(1) In addition to the fine, on conviction for an offence under section 27, a

court may order that the convicted person pay to the Corporation some or

all of the costs reasonably incurred by it in prosecuting the offence and in

undertaking any investigation related to the subject matter of the

prosecution.

Same

(2) Costs payable under subsection (1) are deemed to be a fine for the

purpose of enforcing payment.

(B) THE CHARTERED ACCOUNTANTS OF ONTARIO ACT, 2010

[32] Furthermore, for counts #3 and #4, Joginder Singh Gujral was convicted of

committing offences that are set out under s. 27 of the Chartered Accountants of

Ontario Act, 2010, S.O. 2010, c. 6, Sched. C. The penalties or measures that

could be imposed on Gujral for committing an offence under s. 27 include: [1]

under s. 28(1), a fine of not more than $10,000 for each offence; [2] under s.

28(3), a period of probation that may include a condition that Gujral pay

compensation or make restitution to any person who suffered a loss as a result of

the offence and a condition not to contravene s. 27; and [3] under s. 29(1), an

order for Gujral to pay to the “Institute of Chartered Accountants of Ontario” (CPA

Ontario) some or all of the costs reasonably incurred by them in prosecuting Gujral

for the offences in question and in undertaking any investigation related to the

subject matter of the prosecution [emphasis is mine below]:

Offence and penalty

28(1) Every person who contravenes section 27 is guilty of an offence and on

conviction is liable to a fine of not more than $10,000.

Application to corporation

(2) If a corporation is guilty of an offence under subsection (1), every director

or officer of the corporation who authorized, permitted or acquiesced in

the commission of the offence is deemed to be a party to and guilty of the

offence and on conviction is liable to a fine of not more than $10,000.

Probation orders

(3) On conviction of a person for an offence under this section, the court may

prescribe as a condition of a probation order any of the following:

10

1. That the person pay compensation or make restitution to any person

who suffered a loss as a result of the offence.

2. That the person shall not contravene section 27.

Costs

29(1) In addition to the fine or any other penalty imposed on conviction for an

offence under section 28, the court may order that the convicted person

pay to the Institute some or all of the costs reasonably incurred by it in

prosecuting the offence and in undertaking any investigation related to

the subject matter of the prosecution.

Same

(2) Costs payable under subsection (1) are deemed to be a fine for the

purpose of enforcing payment.

(C) THE CHARTERED PROFESSIONAL ACCOUNTANTS OF ONTARIO ACT,

2017

[33] In addition, for counts #5, #6, #7, and #8, Gujral was convicted of committing

offences that are set out under s. 29 of the Chartered Professional Accountants of

Ontario Act, 2017, S.O. 2017, c. 8, Sched. 3. The penalties or measures that

could be imposed on Gujral for committing an offence under s. 29 include: [1]

under s. 30(1), a fine of not more than $10,000 for each offence if it is a first

offence or a fine of not more than $25,000 for each offence if it is a subsequent

offence; [2] under s. 30(3), a period of probation that may include a condition that

Gujral pay compensation or make restitution to any person who suffered a loss as

a result of the offence and a condition not to contravene s. 29; and [3] under s.

31(1), an order for Gujral to pay to “CPA Ontario” some or all of the costs

reasonably incurred by them in prosecuting Gujral for the offences in question and

in undertaking any investigation related to the subject matter of the prosecution

[emphasis is mine below]:

Offence and penalty

30(1) Every person who contravenes section 29 is guilty of an offence and on

conviction is liable to a fine of not more than $10,000 for a first offence,

and not more than $25,000 for each subsequent offence.

Application to corporation

(2) If a corporation is guilty of an offence under subsection (1), every director

or officer of the corporation who authorized, permitted or acquiesced in

the commission of the offence is deemed to be a party to and guilty of the

offence and on conviction is liable to a fine of not more than $10,000 for a

first offence, and not more than $25,000 for each subsequent offence.

11

Probation orders

(3) On conviction of a person for an offence under this section, the court may

prescribe as a condition of a probation order any of the following:

1. That the person pay compensation or make restitution to any person

who suffered a loss as a result of the offence.

2. That the person shall not contravene section 29.

Costs

31(1) In addition to the fine or any other penalty imposed on conviction for an

offence under section 30, the court may order that the convicted person

pay to CPA Ontario some or all of the costs reasonably incurred by it in

prosecuting the offence and in undertaking any investigation related to

the subject matter of the prosecution.

Same

(2) Costs payable under subsection (1) are deemed to be a fine for the

purpose of enforcing payment

(D) A PERIOD OF IMPRISONMENT IS NOT AVAILABLE AS A SANCTION

UNDER THE 3 GOVERNING PROFESSIONAL ACCOUNTING STATUTES

[34] But, more importantly, Joginder Singh Gujral is not subject to being sentenced to a

period of imprisonment for these 8 convictions, since such a penalty or sanction is

not expressly provided for under the Certified Management Accountants Act, 2010,

under the Chartered Accountants of Ontario Act, 2010, or under the Chartered

Professional Accountants of Ontario Act, 2017.

4. THE SENTENCING PRINCIPLES WHICH GOVERN REGULATORY OR PUBLIC WELFARE

OFFENCES IN ONTARIO

(A) THE OBJECTIVES AND THE PRINCIPLES OF SENTENCING FOR A

REGULATORY OFFENCE

[35] In determining the appropriate sentence to impose on Joginder Singh Gujral for

the 8 regulatory offences convictions, consideration should begin with R. v.

M.(C.A.) (1996), 105 C.C.C. (3d) 327, [1996] S.C.J. No. 28, in which Lamer C.J.C.

for the Supreme Court of Canada, held at para. 82 that the objectives of

retribution, deterrence, denunciation, rehabilitation and the protection of society

are legitimate objectives of sentencing and that the overarching duty of a

sentencing judge is to draw upon all the legitimate principles of sentencing to

12

determine a "just and appropriate" sentence which reflects the gravity of the

offence committed and the moral blameworthiness of the offender [emphasis is

mine below]:

… it is important to stress that neither retribution nor denunciation alone provides

an exhaustive justification for the imposition of criminal sanctions. Rather, in our

system of justice, normative and utilitarian considerations operate in conjunction

with one another to provide a coherent justification for criminal punishment. As

Gonthier J. emphasized in Goltz, supra, at p. 502, the goals of the penal sanction

are both "broad and varied". Accordingly, the meaning of retribution must be

considered in conjunction with the other legitimate objectives of sentencing,

which include (but are not limited to) deterrence, denunciation, rehabilitation and

the protection of society. Indeed, it is difficult to perfectly separate these

interrelated principles. And as La Forest J. emphasized in Lyons, the relative

weight and importance of these multiple factors will frequently vary depending on

the nature of the crime and the circumstances of the offender. In the final

analysis, the overarching duty of a sentencing judge is to draw upon all the

legitimate principles of sentencing to determine a "just and appropriate" sentence

which reflects the gravity of the offence committed and the moral

blameworthiness of the offender.

[36] Moreover, Lamer C.J.C confirmed, at para. 78, in R. v. M.(C.A.), that a majority of

the Supreme Court in R. v. Jones (1994), 89 C.C.C. (3d) 353 at p. 397, had

recognized that the fundamental purpose of sentencing for criminal matters was to

preserve the authority of and promote respect for the law through the imposition of

just sanctions, which would likewise be an applicable principle for the sentencing

of regulatory offences [emphasis is mine below]:

… With these considerations in mind, the Commission explicitly defined the

fundamental purpose of sentencing with reference to the normative goal of

imposing "just sanctions". As the Commission cast the guiding purpose of

criminal sentencing, at p. 153:

In furtherance of the overall purpose of the criminal law of maintaining a

just, peaceful and safe society, the fundamental purpose of sentencing is to

preserve the authority of and promote respect for the law through the imposition

of just sanctions. [Emphasis added.]

A majority of this Court has since expressed approval of this passage as an

accurate statement of the essential goals of sentencing. See R. v. Jones, [1994]

2 S.C.R. 229, at p. 291 (although I dissented on the merits of the case).

In furtherance of the overall purpose of the criminal law of maintaining a just,

peaceful and safe society, the fundamental purpose of sentencing is to preserve

the authority of and promote respect for the law through the imposition of just

sanctions.

13

(1) What Are The Objectives Of Sentencing For Regulatory Or Public Welfare

Offences?

(a) The universal sentencing principles of the criminal law apply

equally to sentencing of regulatory or public welfare offences.

[37] Although the Provincial Offences Act, R.S.O. 1990, c. P.33, the governing

procedural statute for the prosecution of regulatory offences in Ontario, has not

expressly set out the principles and objectives of sentencing for regulatory matters

like that which has been codified in the Criminal Code under ss. 718, 718.1, and

718.2, Kukurin J. in R. v. Kirk (c.o.b. B.A. Holdings), [2005] O.J. No. 3316 (O.C.J.),

at para. 16, has reasoned that, despite this lack of specific statutory guidance in

the Provincial Offences Act, a sentence is not chosen arbitrarily from the pool of

sentence options available in any particular case. Accordingly, Kukurin J.

surmised that an offence created by provincial statute or a federal statute or one

that qualifies as a crime under the Criminal Code is subject to universal principles

of sentencing that apply to all offences, so that a sentencing court would be bound

to apply those universal sentencing principles which are particularly relevant to the

nature and circumstances of the offence and to the particular offender [emphasis

is mine below]:

The Provincial Offences Act is subdivided into ten parts. Part IV deals with trials

and sentencing. There is no provision in the POA that is analogous to section

718, section 718.1 or section 718.2 of the Criminal Code of Canada. … In other

words, there is no specific statutory guideline within the POA that directs the

court to general purposes and principles of sentencing. Notwithstanding this lack

of specific statutory guidance, it is evident that a sentence cannot just be chosen

arbitrarily from the pool of sentence options available in any particular case.

Whether an offence is created by a provincial statute, or by federal statute or

qualifies as a crime under the Criminal Code, it is subject to universal principles

of sentencing that apply to all offences. As a sentencing court, the court imposing

the sentence on the defendant Kirk was bound to apply those sentencing

principles that were relevant. For purposes of this appeal, I adopt section 718,

section 718.1 and section 718.2 of the Criminal Code as provisions that have

applicability to the offences in this case for which the defendant was convicted,

not because the POA specifically imports these by its own terms, but rather

because the provisions of these sections have general applicability whether an

offence is a crime or is an offence created by a provincial statute.

[38] As such, the sentencing principles set out in s. 718, s. 718.1 and s. 718.2 of the

Criminal Code would also apply to the sentencing of an offender who has

committed a regulatory offence, since those particular provisions which are based

on universal principles of sentencing would have general applicability to all

offences.

[39] In addition, s. 718 of the Criminal Code of Canada states that the fundamental

purpose of sentencing is to protect society and to contribute, along with crime

14

prevention initiatives, to respect for the law and the maintenance of a just, peaceful

and safe society by imposing just sanctions that have one or more of the following

objectives: denunciation, deterrence, separation of the offender from society where

necessary, rehabilitation of the offender, reparations to victims and to the

community, promoting a sense of responsibility in the offender:

718. The fundamental purpose of sentencing is to contribute, along with crime

prevention initiatives, to respect for the law and the maintenance of a just,

peaceful and safe society by imposing just sanctions that have one or

more of the following objectives:

(a) to denounce unlawful conduct;

(b) to deter the offender and other persons from committing offences;

(c) to separate offenders from society, where necessary;

(d) to assist in rehabilitating offenders;

(e) to provide reparations for harm done to victims or to the community;

and

(f) to promote a sense of responsibility in offenders, and acknowledgment

of the harm done to victims and to the community.

…

Fundamental principle

718.1 A sentence must be proportionate to the gravity of the offence and the

degree of responsibility of the offender.

Other sentencing principles

718.2 A court that imposes a sentence shall also take into consideration the

following principles:

(a) a sentence should be increased or reduced to account for any

relevant aggravating or mitigating circumstances relating to the

offence or the offender, and, without limiting the generality of the

foregoing,

(i)

evidence that the offence was motivated by bias, prejudice or

hate based on race, national or ethnic origin, language, colour,

religion, sex, age, mental or physical disability, sexual

orientation, or any other similar factor,

(ii)

evidence that the offender, in committing the offence, abused

the offender’s spouse or common-law partner,

15

(ii.1) evidence that the offender, in committing the offence, abused

a person under the age of eighteen years,

(iii)

evidence that the offender, in committing the offence, abused

a position of trust or authority in relation to the victim,

(iii.1) evidence that the offence had a significant impact on the

victim, considering their age and other personal

circumstances, including their health and financial situation,

(iv) evidence that the offence was committed for the benefit of, at

the direction of or in association with a criminal organization,

or

(v)

evidence that the offence was a terrorism offence shall be

deemed to be aggravating circumstances;

(b) a sentence should be similar to sentences imposed on similar

offenders for similar offences committed in similar circumstances;

(c) where consecutive sentences are imposed, the combined sentence

should not be unduly long or harsh;

(d) an offender should not be deprived of liberty, if less restrictive

sanctions may be appropriate in the circumstances; and

(e) all available sanctions other than imprisonment that are reasonable

in the circumstances should be considered for all offenders, with

particular attention to the circumstances of aboriginal offenders.

[40] Likewise, in the textbook entitled, “Stewart on Provincial Offences Procedure in

Ontario (3ed.)”, Toronto, Canada: Earlscourt Legal Press, Inc., 2011, at p. 371, the

author reiterated that the Provincial Offences Act does not contain a complete

sentencing code, including sentencing principles, but that the common-law and

criminal law jurisprudence on sentencing also applies to regulatory or provincial

offences. Accordingly, the author indicates that a sentencing court in determining

an appropriate sentence for a regulatory offence would have to consider such

factors as general and specific deterrence, aggravating or mitigating factors (such

as a plea of guilty), the protection of the public, denunciation, the gravity and

consequences of the offence, any rehabilitation and remorse, proportionality, the

offender’s record, and an offender’s ability to pay a fine [emphasis is mine below]:

Unlike the Criminal Code, the Provincial Offences Act does not contain a

complete sentencing code, including sentencing principles. Instead, common

law and criminal law jurisprudence applies. For example, s. 718.1 of the Criminal

Code provides that sentencing must be proportionate to the gravity of the offence

and the degree of the responsibility of the offender. This principle applies equally

to sentencing for a provincial offence.

16

In addition, to the statutory provisions and sentencing jurisprudence, the court

will consider general and specific deterrence, aggravating or mitigating factors

(such as a plea of guilty), the protection of the public, denunciation, the gravity

and consequences of the offence, any rehabilitation and remorse, proportionality,

the defendant’s record, and ability to pay a fine. …

[41] Ergo, when sentencing Joginder Singh Gujral in respect to the 8 regulatory

offences he had committed, the sentencing objectives, as well as the other

principles of sentencing set out in ss. 718, 718.1, and 718.2 of the Criminal Code

may be taken into account to arrive at a just and fit sentence.

[42] Furthermore, the author in the textbook, “Stewart on Provincial Offences

Procedure in Ontario (3ed.)”, at p. 371, also referred to the Supreme Court of

Canada’s decision in R. v. Solomon, [2008] S.C.J. No. 55, where it had been held

that the maximum sentence is not always reserved for the worst crime committed

in the worst circumstances and that it may be imposed if warranted in light of

sentencing principles applied in an individualized context and for the

circumstances of the offence that had been committed. The author also

emphasized in her textbook that it is the finding of fact at trial that governs the

sentencing hearing, since the facts that constitute the essential elements of an

offence do not lose their relevance on sentencing and would always be part of the

consideration on sentencing [emphasis is mine below]:

Where a fine is imposed, appellate courts generally have declined to vary the

sentence on the grounds that a fine is particularly within the discretion of the trial

judge and should not be lightly interfered with. In R. v. Solomon, the Supreme

Court of Canada rules that the “worst case, worst offender” principle no longer

operates as a constraint on the imposition of a maximum sentence or penalty

where the maximum would otherwise be appropriate. The maximum sentence is

not always reserved for the worst crime committed in the worst circumstances,

and it may be imposed if warranted in light of sentencing principles, applied in an

individualized context and the circumstances of the offence. The sentence must

be proportionate to the gravity of the offence and the degree of the responsibility

of the offender. The consequences of the commission of the offence, of

themselves, do not elevate an offence to the “worst offence”. A maximum

sentence, as with any other sentence, is subject to appellate intervention only

where the trial court applied the wrong sentencing principles or the sentence was

clearly excessive in the circumstances.

It is the finding of fact at trial that govern the sentencing hearing. The facts that

constitute essential elements of an offence do not lose their relevance on

sentencing and will always be part of the consideration on sentencing. … An

accused must know what he is convicted of when making submissions on

sentencing and only needs to make submissions based on the facts as found by

the trial justice.

…

17

[43] And, similar to provisions in the Provincial Offences Act, ss. 723(1) and (2) of the

Criminal Code, stipulates that the sentencing court for a criminal offence is

required before determining the appropriate sentence to give the prosecutor and

the offender an opportunity to make submissions with respect to any facts relevant

to the sentence to be imposed. As well, the sentencing court is also required to

hear any relevant evidence presented by the prosecutor or the offender:

Submissions on facts

723(1) Before determining the sentence, a court shall give the prosecutor and

the offender an opportunity to make submissions with respect to any facts

relevant to the sentence to be imposed.

Submission of evidence

(2) The court shall hear any relevant evidence presented by the prosecutor

or the offender.

[44] In addition, under s. 724(1) of the Criminal Code, in regards to determining the

appropriate sentence, the sentencing court for a criminal offence may accept as

proved any information disclosed at the trial or at the sentencing proceedings and

any facts agreed on by the prosecutor and the offender:

Information accepted

724(1) In determining a sentence, a court may accept as proved any information

disclosed at the trial or at the sentencing proceedings and any facts

agreed on by the prosecutor and the offender.

(2) The Category Or Nature Of The Offences Committed By Joginder Singh

Gujral.

[45] In respect to the nature of the 8 regulatory offences Joginder Singh Gujral had

been convicted of committing, the 8 offences are strict liability regulatory offences

in which the fault element is negligence, and which only requires that the

prosecution prove the actus reus element of the offence beyond a reasonable

doubt but does not require the prosecution to prove any mens rea element for that

offence.

[46] Furthermore, in R. v. Chan, [2012] A.J. No. 1023 (Alta. Prov. Ct.), at paras. 32 and

33, Fradsham J. neatly summarized the sentencing objectives for regulatory

offences and also noted that the objective of regulatory legislation is to protect the

public or broad segments of the public from the potentially adverse effects of

otherwise lawful activity, and that regulatory legislation involves a shift of emphasis

from the protection of individual interests and the deterrence and punishment of

acts involving moral fault to the protection of public and societal interests, and that

18

regulatory offences are directed primarily not to conduct itself but to the

consequences of conduct, and that regulatory measures are generally directed to

the prevention of future harm through the enforcement of minimum standards of

conduct and care. And, where regulatory offences involve a greater degree of

moral blameworthiness on the part of the offender, Fradsham J. emphasized that

the penalties imposed should reflect that greater moral blameworthiness.

However, Fradsham J. also pointed out that in the case of little or no actual harm

arising from the offence, the penalty for the violation may still be substantial, so as

to deter others from violating the statute because the consequence of a future

violation could be very serious. And, as a result, Fradsham J. concluded that

sentences for regulatory offences must also take into account the potential

consequences of committing the particular offence [emphasis is mine below]:

In the case at bar, the sentencing objectives which apply are: (1) to denounce

unlawful conduct; (2) to deter Mr. Chan and other persons from committing

offences; (3) to assist in rehabilitating the offender; (4) to provide reparation for

harm done to the community; and (5) to promote a sense of responsibility in the

offender, and acknowledgment of the harm done to the community. The primary

sentencing objectives are denunciation and deterrence, followed by rehabilitation

of the offender (including the promotion in him of a sense of responsibility for his

offending behaviour). The restitution orders sought by the Crown, and not

opposed by Mr. Chan, will address the objective of providing reparation for the

harm done.

In concluding that general deterrence is one of the primary sentencing objectives,

I am mindful that the offences to which Mr. Chan has pleaded guilty are

regulatory offences. In R. v. Kreft (2006), 407 A.R. 376, I had occasion to

discuss the jurisprudence on the sentencing of regulatory offences. I continue to

be of the view I set forth in paragraph 47 of Kreft:

47 In my view, the jurisprudence, including the cases of R. v. Wholesale Travel

Group Inc., supra, [1991] S.C.J. No. 79, R. v. Beach Motors Inc., supra,

[2002] O.J. No. 4458 R. v. Virk., supra, [2002] O.J. No. 4102 and R. v Kirk

(c.o.b B.A. Holdings), supra, [2005] O.J. No. 3316, when read together,

lead to these conclusions:

1. One starts with the general proposition that:

"[t]he objective of regulatory legislation is to protect the public or broad

segments of the public ... from the potentially adverse effects of otherwise

lawful activity. Regulatory legislation involves a shift of emphasis from the

protection of individual interests and the deterrence and punishment of

acts involving moral fault to the protection of public and societal interests.

While criminal offences are usually designed to condemn and punish

past, inherently wrongful conduct, regulatory measures are generally

directed to the prevention of future harm through the enforcement of

minimum standards of conduct and care.

... [R]egulatory offences are directed primarily not to conduct itself but to

the consequences of conduct. ... The concept of fault in regulatory

offences is based upon a reasonable care standard and, as such, does

not imply moral blameworthiness in the same manner as criminal fault.

Conviction for breach of a regulatory offence suggests nothing more than

19

that the defendant has failed to meet a prescribed standard of care" (R. v.

Wholesale Travel Group Inc., supra).

2. However, regulatory offences form a continuum ranging from the less

serious to the very serious. As one approaches the "very serious" end of

the continuum, one is dealing with offences which are designed to

address "inherently wrongful conduct" and for which there is a greater

degree of moral blameworthiness on the part of the offending defendant.

Those regulatory offences which "if not a species in the family of

fraudulent conduct are a close cousin" are examples of regulatory

offences which involve a greater degree of moral blameworthiness on the

part of the offender, and the penalties for them will reflect that.

3. Having said that, regulatory offences which do not involve inherently

wrongful conduct (with its attendant moral blameworthiness) can still

attract significant penalties. Regulatory legislation has as its goal

adherence to a particular standard of care by those involved in the

regulated activity, and the severity of the consequences of a failure to

meet the legislated standard of care will vary with the regulated activity

involved and nature of the failure. A defendant who commits an offence

under a regulatory statute may cause little, if any, actual damage as a

result of his or her particular actions. In other words, the acts of the

defendant, while violating a provision of a regulatory statute, may not in a

particular case result in any significant actual harm. However, the

provision of the regulatory statute which the defendant violated may be

such that violations of it in general have the potential to cause serious

harm to the public. Therefore, in the case of little, or no, actual harm

arising from the offence, the penalty for the violation may still be

substantial so as to deter others from violating the statute because the

consequence of a future violation could be very serious. As noted earlier,

regulatory offences are directed at the consequences of failing to abide by

the legislated standards of care, not at the actual actions which

constituted the violation. "Consequences" include not only actual harm

resulting from the specific actions which constituted the offence, but also

that which could potentially result from the commission of the offence.

Sentences for regulatory offences must similarly take into account the

potential consequences of committing the particular offence. Examples of

this concept are often found in environmental law sentencing cases such

as R. v. Van Waters & Rogers Ltd. (1998) 220 A.R. 315 (Alta. Prov. Ct.)

and R. v. Terroco Industries Ltd. (2005) 367 A.R. 1 (Alta. C.A.).

[47] In addition, my colleague Madigan J.P. in R. v. Virk, [2002] O.J. No. 4102 (O.C.J.),

at paras. 52 to 56, had considered the sentencing scheme for regulatory offences

and had noted a different approach and application of sentencing objectives in the

sentencing of regulatory offences in comparison to criminal offences. Madigan

J.P. had also confirmed that absolute or strict liability offences do not involve moral

blameworthiness, and that for absolute or strict liability offences the rehabilitation

of the offender and public protection become more important in sentencing. On

the other hand, Madigan J.P. noted that in regards to the continuum of offences,

as a regulatory offence approaches or becomes more like a criminal offence where

there is an element of mens rea or moral blameworthiness, then the objectives of

20

denunciation, retribution and deterrence gain more importance in sentencing

[emphasis is mine below]:

R. v. Wholesale Travel Group Inc. (1991) 67 C.C.C. (3d) 193 (S.C.C.) is

authoritative caselaw in which the Supreme Court of Canada addresses the

distinction between regulatory offences and criminal offences at pages 237-238.

To paraphrase Justice Cory, criminal law is intended to punish “inherently

wrongful conduct”, whereas regulatory offences are aimed at enforcement of

“prescribed standards of care” which society wishes to establish and promote.

Further, public welfare offences are “directed not to conduct itself but to the

consequences of conduct” and do not imply “moral blameworthiness” in the same

manner as criminal fault.

Most public welfare offences are properly classified as either absolute liability or

strict liability offences. Very few regulatory offences require the Crown to prove

wrongful intention or knowledge in addition to the prohibited conduct.

Not all public welfare offences are equal in gravity. Some are more serious than

others. Those requiring proof of wrongful intention or knowledge are more

serious, for sentencing purposes, precisely because the prosecution has proven

a guilty mind in addition to the prohibited conduct. Convictions for absolute

liability and strict liability offences usually suggest “…nothing more than the

defendant has failed to meet a prescribed standard of care”. However, offences

like those alleged and proven in this case tend to involve an element of fault or

moral blameworthiness in that they prohibit conduct which is inherently wrong.

Quite undeniably, the intention to defraud and the intention to lie qualify as

morally blameworthy.

…

On a continuum of offences running from public welfare offences to true criminal

offences, the offences of which Mr. Virk has been found guilty are much more

serious and therefore more comparable to criminal offences than to public

welfare offences. Obviously, this has significance for sentencing.

In the case of most regulatory offences, the sentencing court usually attempts to

balance the competing considerations in favour of rehabilitation of the offender

and protection of the public. However, in cases involving proof of mens rea, the

balance must favour the objectives of denunciation, retribution, and deterrence.

Whereas mens rea offences involve some degree of moral blameworthiness or

fault, absolute liability and strict liability offences do not. This distinction justifies

the difference in approach to sentencing.

[48] But more importantly, Cory J. in R. v. Wholesale Travel Group Inc., [1991] S.C.J.

No. 79 (S.C.C.), at para. 219, emphasized that regulatory schemes can only be

effective if they provide for significant penalties in the event of their breach

[emphasis is mine below]:

Regulatory schemes can only be effective if they provide for significant penalties

in the event of their breach. Indeed, although it may be rare that imprisonment is

21

sought, it must be available as a sanction if there is to be effective enforcement

of the regulatory measure. Nor is the imposition of imprisonment unreasonable in

light of the danger that can accrue to the public from breaches of regulatory

statutes. The spectre of tragedy evoked by such names as Thalidomide, Bhopal,

Chernobyl and the Exxon Valdez can leave no doubt as to the potential human

and environmental devastation which can result from the violation of regulatory

measures. Strong sanctions including imprisonment are vital to the prevention of

similar catastrophes.

(3) Deterrence Must Be Given Paramount Consideration In Arriving At A Fit

And Just Sentence For Public Welfare Offences

[49] In R. v. Cotton Felts Ltd. (1982), 2 C.C.C. (3d) 287, [1982] O.J. No. 178, which is

the prevailing case for sentencing of regulatory offences in Ontario, Blair J.A. for

the Court of Appeal for Ontario, at paras. 18 to 24, established that the primary

factor for a sentencing court to consider in determining the appropriate sentence

for public welfare or regulatory offences is deterrence. And, in respect to the

imposition of a fine for deterrence, Blair J.A. held that the fine must be substantial

enough to warn others that the offence will not be tolerated, but without being

harsh, and that the fine must also not appear to be a mere licence fee for illegal

activity [emphasis is mine below]:

Since, as far as we are aware, this is the first appeal against sentence under the

Act to reach this Court, it is incumbent on us to consider the proper principles

governing the imposition of fines for this type of offence. As my brothers and

myself made clear during argument, the range of fines imposed by the County

Court appears inordinately low for these offences. It is recognized that in the

circumstances of particular cases such fines might have been justified, but it

would be error for any sentencing judge to accept these County Court appeal

decisions as establishing a binding range of fines in these cases. Sentencing for

this type of offence cannot be achieved by rote or by rule. In every case it is the

responsibility of the sentencing judge to impose a fit sentence, taking into

account the factors upon which I now propose to comment.

The Occupational Health and Safety Act is part of a large family of statutes

creating what are known as public welfare offences. The Act has a proud place in

this group of statutes because its progenitors, the Factory Acts, were among the

first modern public welfare statutes designed to establish standards of health and

safety in the work place. Examples of this type of statute are legion and cover all

facets of life ranging from safety and consumer protection to ecological

conservation. In our complex interdependent modern society such regulatory

statutes are accepted as essential in the public interest. They ensure standards

of conduct, performance and reliability by various economic groups and make life

tolerable for all. To a very large extent the enforcement of such statutes is

achieved by fines imposed on offending corporations. The amount of the fine will

be determined by a complex of considerations, including the size of the company

involved, the scope of the economic activity in issue, the extent of actual and

potential harm to the public, and the maximum penalty prescribed by statute.

Above all, the amount of the fine will be determined by the need to enforce

22

regulatory standards by deterrence: see R. v. Ford Motor Company of Canada

Limited (1979), 49 C.C.C. (2d) 1, per MacKinnon A.C.J.O at p. 26; Nadin-Davis,

Sentencing in Canada, p. 368 and cases therein cited.

The paramount importance of deterrence in this type of case has been

recognized by this Court in a number of recent decisions. An example is

provided by R. v. Hoffman-LaRoche Limited (No.2) (1980), 30 O.R. (2d) 461. In

that case Mr. Justice Linden imposed a fine of $50,000 for an offence under the

Combines Investigation Act, R.S.C. 1970, c. C-23, and stated the principles

governing the amount of a fine as follows:

In conclusion, I feel that a fine that is more than nominal, but which is not harsh,

would be appropriate in this case. The amount must be substantial and

significant so that it will not be viewed as merely a licence for illegality, nor as a

mere slap on the wrist. The amount must be one that would be felt by this

defendant. It should also serve as a warning to others who might be minded to

engage in similar criminal activity that It will be costly for them to do so even if

they do not succeed in their illegal aims.

The sentence was upheld by this Court, (1981), 62 C.C.C. (2d) 1, where my

brother Martin said at pp. 160-161:

A careful examination of those reasons satisfies me that he considered that

general deterrence was the paramount factor to be considered in arriving at an

appropriate sentence.

Another example is provided by this Court's decision in R. v. K-Mart Canada

Limited (1982), 66 C.C.C. (2d) 329. In that case the Court increased a fine of

$25,000 to $100,000 for a company convicted of conspiring to interfere with the

formation and operation of a trade union, contrary to the Labour Relations Act,

R.S.O. 1970, c. 232, now R.S.O. 1980, c. 228. In so doing Chief Justice Howland

had this to say at p. 332:

In our opinion, the fine imposed did not adequately reflect the gravity of the

offence and was an error in principle. The fine must not be tantamount to a

licence fee to commit illegal activity, but must be sufficiently substantial to warn

others that such illegal activity will not be tolerated.

The main factors in the computation of a fine expressed in these decisions are

the same as those expressed by Judge Dnieper. Without being harsh, the fine

must be substantial enough to warn others that the offence will not be tolerated.

It must not appear to be a mere licence fee for illegal activity.

With reference to these offences, deterrence is not to be taken only In its usual

negative connotation of achieving compliance by threat of punishment. Recently

my brother Zuber in R. v. Ramdass, a judgment pronounced on November 17,

1982, referred to deterrence in a more positive aspect. There he was dealing with

a driving offence and he quoted an earlier unreported decision of this Court in R.

v. Roussy, [1977] O.J. No. 1208 (released December 15, 1977), where the Court

stated:

23

But in a crime of this type the deterrent quality of the sentence must be given

paramount consideration, and here I am using the term deterrent in its widest

sense. 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.

This aspect of deterrence is particularly applicable to public welfare offences

where it is essential for the proper functioning of our society for citizens at large

to expect that basic rules are established and enforced to protect the physical,

economic and social welfare of the public.

(4) The Sentence Must Be Proportional

[50] In R. v. M.(C.A.) (1996), 105 C.C.C. (3d) 327, [1996] S.C.J. No. 28, at para. 40,

Lamer C.J.C., for the Supreme Court of Canada, had also emphasized that the

fundamental sentencing principle in regards to the quantum of sentence to be

imposed should be broadly commensurate with the gravity of the offence

committed and the moral blameworthiness of the offender [emphasis is mine

below]:

… It is a well-established tenet of our criminal law that the quantum of sentence

imposed should be broadly commensurate with the gravity of the offence

committed and the moral blameworthiness of the offender. As Wilson J.

expressed in her concurring judgment in Re B.C. Motor Vehicle Act, 1985

81 (SCC), [1985] 2 S.C.R. 486, 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. Only if this is so can the public be satisfied that the

offender "deserved" the punishment he received and feel a confidence in the

fairness and rationality of the system.

[51] Furthermore, in R. v. Angelillo, [2006] S.C.J. No. 55 (S.C.C.), Charron J., at para.

22, noted that the fundamental principle of proportionality requires that the

sentence be proportionate to the gravity of the offence and the degree of

responsibility of the offender, so that the sentence imposed in such a case would

be merely a reflection of the individualized sentencing process [emphasis is mine

below]

… The fundamental principle of proportionality requires that the sentence be

proportionate to the gravity of the offence and the degree of responsibility of the

offender; a prior conviction cannot, therefore, justify a disproportionate

sentence. This principle, which is set out in s. 718.1 Cr. C., assures repeat

offenders the right not to be “punished . . . again”, as guaranteed in s. 11(h) of

the Charter. The sentence imposed on a repeat offender may well be more

severe, but this is not contrary to the offender’s right not to be punished

24

again. From the standpoint of proportionality, the sentence imposed in such a

case is merely a reflection of the individualized sentencing process.

[52] Recently, Paciocco J.A. for the Court of Appeal for Ontario in Ontario (Ministry of

Labour) v. New Mex Canada Inc., [2019] O.J. No. 227, at paras. 62 to 73,

reaffirmed the sentencing principles established for regulatory or public welfare

offences established by the Court of Appeal for Ontario in R. v. Cotton Felts Ltd.

Paciocco J.A. also emphasized in the New Mex Canada Inc. decision that Blair

J.A. in Cotton Felts, at p. 295, had indicated that deterrence performs a broader

role in regulatory offences than its conventional role in criminal offences, and that

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. Moreover, Paciocco J.A. noted that the criminal

law recognizes a loose continuum of moral blameworthiness that can affect the

sentence imposed and that this underlying notion that those with guiltier minds

tend to deserve or require greater punishment applies equally to regulatory

offences. Accordingly, Paciocco J.A. noted that moral blameworthiness is relevant

in sentencing for regulatory offences and follows necessarily from the application

of the fundamental sentencing principle of proportionality in the sentencing of

regulatory offences. In addition, Paciocco J.A. emphasized that 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.

On the other hand, Paciocco J.A. noted that where the moral blameworthiness of a

particular offender increases so too can the penalty that is imposed [emphasis is

mine below]:

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.

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;³and (3) offences of "absolute

25

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.

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.

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."

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.

Simply put, the principle of proportionality requires that there be "just proportion"

between the offence and the sentence: R. v. Wilmott [1967] 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.

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 Ontario (Ministry of Natural Resources)

v. 819743 Ontario Inc., 2013 ONCJ 128, at paras. 18-19.

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".

26

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.

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).

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.

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.

…

[53] Furthermore, Paciocco J.A. in Ontario (Ministry of Labour) v. New Mex Canada

Inc., at paras. 97 to 105, commented on the principle of deterrence in the

sentencing of regulatory offences and noted that a fit sentence does not rest only

on whether that sentence would be an effective deterrent, but involves 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. Moreover, Paciocco J.A. indicated that the impact of the fine on

the offender is an important consideration in identifying a fit deterrent sentence

and 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. In addition, Paciocco J.A. surmised that the fitness

27

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

[emphasis is mine below]:

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.

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.

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.

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.

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".

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.

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.

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.

28

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 Mex's financial

circumstances. Yet the sentencing justice imposed a fine two and one-half times

that amount on a small, financially-weak company. The Crown's 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.

(5) The Sentence Must Not Contravene The Totality Principle

[54] Moreover, to determine a fit and appropriate sentence, the sentencer must also

consider the totality principle. The Supreme Court in R. v. M.(C.A.) (1996), 105

C.C.C. (3d) 327, [1996] S.C.J. No. 28, at para. 42, explained that the totality

principle requires a sentencing judge, who orders an offender to serve consecutive

sentences for multiple offences, ensure that the cumulative sentence rendered

does not exceed the overall culpability of the offender [emphasis is mine below]:

In the context of consecutive sentences, this general principle of proportionality

expresses itself through the more particular form of the “totality principle”.

The totality principle, in short, requires a sentencing judge who orders an

offender to serve consecutive sentences for multiple offences to ensure that the

cumulative sentence rendered does not exceed the overall culpability of the

offender. As D. A. Thomas describes the principle in Principles of Sentencing

(2nd ed. 1979), at p. 56:

The effect of the totality principle is to require a sentencer who has passed a

series of sentences, each properly calculated in relation to the offence for which

it is imposed and each properly made consecutive in accordance with the

principles governing consecutive sentences, to review the aggregate sentence

and consider whether the aggregate sentence is "just and appropriate".

Clayton Ruby articulates the principle in the following terms in his treatise,

Sentencing, supra, at pp. 44-45:

The purpose is to ensure that a series of sentences, each properly imposed in

relation to the offence to which it relates, is in aggregate "just and appropriate". A

cumulative sentence may offend the totality principle if the aggregate sentence is

substantially above the normal level of a sentence for the most serious of the

individual offences involved, or if its effect is to impose on the offender "a

crushing sentence" not in keeping with his record and prospects.

[55] Moreover, s. 718.2(c) of the Criminal Code of Canada sets out and provides for

the application of the totality principle by expressly stating that “where consecutive

sentences are imposed, the combined sentence should not be unduly long or

harsh”. Hence, this provision ensures that a sentencing court would "avoid

sentences that cumulatively are out of proportion to the gravity of the offences": R.

29

v. D.F.P., [2005] N.J. No. 176 (N.L.C.A.), at para. 24. Moreover, the totality

principle requires a Canadian court to fashion a global sentence in respect to all

offences so that it is not excessive: R. v. M.(C.A.) (1996), 105 C.C.C. (3d) 327,

[1996] S.C.J. No. 28 (S.C.C.), at para 42. In other words, if the total sentence is

excessive the court must adjust the sentence so that the "total sentence is proper":

R. v. D.S.K., [2005] S.J. No. 97 (Sask. C.A.) and R. v. Hicks, [2007] N.J. No. 219

(N.L.C.A.).

[56] Ergo, a sentence may violate the totality principle where: (1) the global sentence

considerably exceeds the "normal" level of the most serious of the individual

offences: R. v. E.T.P., [2002] M.J. No. 64 (Man C.A.); or where: (2) the global

sentence "exceeds what is appropriate given the offender's overall culpability: R. v.

Wharry, [2008] A.J. No. 945 (Alta. C.A.), at para. 35; R. v. Abrosimo, [2007] B.C.J.

No. 1700 (B.C.C.A.), at paras. 20 to 31; and R. v. Tiegs, [2012] A.J. No. 378 (Alta.

C.A.).

(6) For Disputed Facts In A Sentencing Hearing, Evidence Must Be Called In

Respect To That Disputed Fact.

[57] In R. v. Gardiner, [1982] S.C.J. No. 71 (S.C.C.), Dickson J. held that any facts

relied upon by the Crown in aggravation must be established by the Crown beyond

a reasonable doubt. Moreover, Dickson J. emphasized that where the facts are

contested, the issue should be resolved by ordinary legal principles governing

criminal proceedings, including resolving relevant doubt in favour of the offender.

But, more importantly, Dickson J. held that facts which justify the sanction are no

less important than the facts which justify the conviction, so that both should be

subject to the same burden of proof. In addition, he confirmed that the sentencing

process is merely a phase of the trial process, so that upon conviction the offender

is not abruptly deprived of all procedural rights existing at trial [emphasis is mine

below]:

It should also be recalled that a plea of guilty, in itself, carries with it an admission

of the essential legal ingredients of the offence admitted by the plea, and no

more. Beyond that any facts relied upon by the Crown in aggravation must be

established by the Crown. If undisputed, the procedure can be very informal. If

the facts are contested the issue should be resolved by ordinary legal principles

governing criminal proceedings including resolving relevant doubt in favour of the

offender.

To my mind, the facts which justify the sanction are no less important than the

facts which justify the conviction; both should be subject to the same burden of

proof. Crime and punishment are inextricably linked. “It would appear well

established that the sentencing process is merely a phase of the trial process”

(Olah, supra, at p. 107). Upon conviction the accused is not abruptly deprived of

all procedural rights existing at trial: he has a right to counsel, a right to call

evidence and cross-examine prosecution witnesses, a right to give evidence

himself and to address the court.

30

In S. v. Manchester City Recorder, [1969] 3 All E.R. 1230 the suggestion was

made that a court might be functus officio in the use of its powers to convict or

acquit, as distinct from its powers to sentence. Lord Reid found this proposition to

be both novel and erroneous, adding at p. 1233:

In my judgment magistrates have only one officium—to carry the case

before them to a conclusion. There is no reason to divide up their

functions and hold that at some stage in the proceedings one officium

comes to an end and another begins.

In my view, both the informality of the sentencing procedure as to the

admissibility of evidence and the wide discretion given to the trial judge in

imposing sentence are factors militating in favour of the retention of the criminal

standard of proof beyond a reasonable doubt at sentencing.

[B]ecause the sentencing process poses the ultimate jeopardy to an

individual enmeshed in the criminal process, it is just and reasonable that

he be granted the protection of the reasonable doubt rule at this vital

juncture of the process [Olah, supra, at p. 121].

The rationale of the argument of the Crown for the acceptance of a lesser

standard of proof is administrative efficiency. In my view, however, the

administrative efficiency argument is not sufficient to overcome such a basic

tenet suffusing our entire criminal justice system as the standard of proof beyond

a reasonable doubt. I am by no means convinced that if the standard of proof

were lowered, conservation of judicial resources would be enhanced. In the

event of a serious dispute as to facts, it would be in the interests of the accused

to plead not guilty in order to benefit at trial from the higher standard of

reasonable doubt. This would not only be destructive of judicial economy but at

the same time prejudicial to whatever mitigating effect might have come from a

guilty plea, as evidence of remorse. There would seem in principle no good

reason why the sentencing judge in deciding disputed facts should not observe

the same evidentiary standards as we demand of juries. In R. v. Proudlock,

[1979] 1 S.C.R. 525 Pigeon J., dealing with an issue involving conviction,

observed (at p. 550):

In my view, there are in our criminal law only three standards of evidence:

1. Proof beyond a reasonable doubt which is the standard to be met by

the Crown against the accused;

2. Proof on a preponderance of the evidence or a balance of probabilities

which is the burden of proof on the accused when he has to meet a

presumption requiring him to establish or to prove a fact or an excuse;

3. Evidence raising a reasonable doubt which is what is required to

overcome any other presumption of fact or of law.

The civil test only comes into play when the accused has to meet a presumption

and it operates in favour of the accused.

31

I can see no good purpose served by the alternate Crown submission, namely,

the adoption of a third standard of proof, “clear and convincing” evidence, in

Canadian law. I agree with the remarks of Lord Tucker in Dingwall v. J. Wharton

(Shipping), Ltd., [1961] 2 Lloyd’s Rep. 213 at p. 216:

…I am quite unable to accede to the proposition that there is some

intermediate onus between that which is required in criminal cases and

the balance of probability which is sufficient in timeous civil actions.

In conclusion, I see no justification for the introduction of the complexity and

confusion which would inevitably follow upon the acceptance of standards of

proof varying from trial to sentence.

5.

THE APPROPRIATE SENTENCE FOR JOGINDER SINGH GUJRAL

(A) THE SENTENCE SOUGHT BY THE PROSECUTION

[58] To reiterate, the prosecution seeks the following sentence for Joginder Singh

Gujral for the 8 convictions:

(1) fines totalling $48,000 (exclusive of costs and victim fine

surcharges) for the 8 convictions;

(2) a term of probation for a period of 2 years with the statutory

conditions set out in the Provincial Offences Act, especially the

condition not to commit the same offence; and

(3) an order requiring Joginder Singh Gujral to pay “reasonable

legal costs” in the amount of $58,190.60 that were incurred by

CPA Ontario in the prosecution of Gujral.

(B) THE OFFENDER, JOGINDER SINGH GUJRAL, DOES NOT BELIEVE

HE SHOULD BE REQUIRED TO PAY ANY FINE, BUT SEEKS

INSTEAD A SENTENCE INVOLVING COMMUNITY SERVICE

[59] The offender Joginder Singh Gujral submitted a written submission for sentence

(Exhibit #4) and also made oral submissions. In his submissions, Gujral asks that

his fine and other fees be waived as he might have to declare bankruptcy if he had

to pay a fine; but alternatively, if a fine were to be impose, then Gujral requests a

fine in the amount of $2,000 which includes all costs and fees and 40 months to

pay off the fine, at $50 a month. Furthermore, Gujral contends that he can only

pay a fine of $2000, at $50 a month, because his wife does not work and because

he has two children attending school full-time, who both also do not work. He also

submits that his daughter attends university and that his son is in Grade 12 in high

32

school and that his wife and 2 children are dependent on him. However, Gujral

also owns his house at 5 Keystone Drive in Brampton and has an outstanding

mortgage on that property.

[60] In addition, Gujral submits that his pay stub entered as Exhibit #2 (for Sentencing)

is actually for 5 weeks of employment and not for 4 weeks of employment, so that

the prosecution’s estimate that his annual income is $120,000 is incorrect.

However, Gujral has not provided any documents which shows what is annual

income from his employment or from other sources is presently.

(C) DECLARING BANKRUPTCY AND ITS CONSEQUENCE ON FINES

[61] The offender Joginder Singh Gujral submitted that if a fine is imposed he may

have to declare bankruptcy, but that in the alternative if a fine, costs, victim fine

surcharge, and reimbursement of legal fees were to be imposed that Gujral

submits that he is only able to pay a fine totalling $2000 over 40 months at $50 a

month.

[62] Unfortunately, for Gujral, under s. 178(1)(a) of the federal Bankruptcy and

Insolvency Act, R.S.C. 1985, c. B-3, and under the law of bankruptcy, an order of

discharge would not release Gujral from paying “any fine, penalty, restitution order

or other order similar in nature to a fine, penalty or restitution order, imposed by a

court in respect of an offence” committed by Gujral, if Gujral were to declare

personal bankruptcy as a scheme to avoid paying any fines [emphasis is mine

below]:

Debts not released by order of discharge

178(1) An order of discharge does not release the bankrupt from

(a) any fine, penalty, restitution order or other order similar in nature to

a fine, penalty or restitution order, imposed by a court in respect of

an offence, or any debt arising out of a recognizance or bail;

(a.1) any award of damages by a court in civil proceedings in respect of

(i)

bodily harm intentionally inflicted, or sexual assault, or

(ii) wrongful death resulting therefrom;

(b) any debt or liability for alimony or alimentary pension;

(c) any debt or liability arising under a judicial decision establishing

affiliation or respecting support or maintenance, or under an

agreement for maintenance and support of a spouse, former

spouse, former common-law partner or child living apart from the

bankrupt;

33

(d) any debt or liability arising out of fraud, embezzlement,

misappropriation or defalcation while acting in a fiduciary capacity

or, in the Province of Quebec, as a trustee or administrator of the

property of others;

(e) any debt or liability resulting from obtaining property or services by

false pretences or fraudulent misrepresentation, other than a debt

or liability that arises from an equity claim;

(f) liability for the dividend that a creditor would have been entitled to

receive on any provable claim not disclosed to the trustee, unless

the creditor had notice or knowledge of the bankruptcy and failed to

take reasonable action to prove his claim;

(g) any debt or obligation in respect of a loan made under the Canada

Student Loans Act, the Canada Student Financial Assistance Act

or any enactment of a province that provides for loans or

guarantees of loans to students where the date of bankruptcy of

the bankrupt occurred

(i)

before the date on which the bankrupt ceased to be a full- or

part-time student, as the case may be, under the applicable

Act or enactment, or

(ii) within seven years after the date on which the bankrupt

ceased to be a full- or part-time student;

(g.1) any debt or obligation in respect of a loan made under the

Apprentice Loans Act where the date of bankruptcy of the bankrupt

occurred

(i)

before the date on which the bankrupt ceased, under that Act,

to be an eligible apprentice within the meaning of that Act, or

(ii) within seven years after the date on which the bankrupt

ceased to be an eligible apprentice; or

(h) any debt for interest owed in relation to an amount referred to in

any of paragraphs (a) to (g.1).

Court may order non-application of subsection (1)

(1.1) At any time after five years after the day on which a bankrupt who has a

debt referred to in paragraph (1)(g) or (g.1) ceases to be a full- or part-

time student or an eligible apprentice, as the case may be, under the

applicable Act or enactment, the court may, on application, order that

subsection (1) does not apply to the debt if the court is satisfied that

(a) the bankrupt has acted in good faith in connection with the

bankrupt’s liabilities under the debt; and

34

(b) the bankrupt has and will continue to experience financial difficulty

to such an extent that the bankrupt will be unable to pay the debt.

Claims released

(2) Subject to subsection (1), an order of discharge releases the bankrupt

from all claims provable in bankruptcy.

[63] Ergo, in respect to Gujral’s submission that he would have to declare bankruptcy if a fine,

fees, and legal costs were to be imposed on him are not worthy of consideration, nor is it a

legitimate submission to consider, as Gujral has not provided any proof of dire financial

circumstances or a list of his actual debts that he cannot pay off within a reasonable time

frame. And, considering the evidence of Gujral’s ability to pay which includes Gujral

stating that he owns a house and that he is gainfully employed and earning at least

$90,000 a year, would be further evidence that also contradicts Gujral’s contention that he

may have to declare bankruptcy if he were sentenced to pay fines, fees, and legal costs

for his 8 convictions.

[64] But more importantly, any fine or monetary penalty that could be imposed on Gujral,

including an order to pay CPA Ontario’s reasonable legal costs (which are deemed to be a

fine under all 3 of the professional accounting statutes that govern the sentencing of

Gujral), would not in any event be released under an order of discharge issued under the

federal Bankruptcy and Insolvency Act.

(D) SHOULD JOGINDER SINGH GUJRAL BE SENTENCED TO PAY A

FINE FOR EACH OF THE

CONVICTIONS?

8

REGULATORY OFFENCES

[65] To reiterate, the prosecution seeks a separate fine of $6,000 (exclusive of courts

costs and victim surcharge) for each of the 8 counts the offender Joginder Singh

Gujral has been convicted of committing. Specifically, the prosecution seeks a

total amount of fines of $48,000, which would not include the courts costs and

victim surcharges that would be an additional amount that Gujral would have to

also pay above the $48,000 amount and which are set by regulation.

[66] Moreover, the penalty provisions under s. 27(1) of the Certified Management

Accountants Act, 2010, S.O. 2010, c. 6, Sched. B, in respect to counts #1 and #2

provides for a fine of not more than $10,000 for each of the counts.

[67] In addition, the penalty provisions under s. 28(1) of the Chartered Accountants of

Ontario Act, 2010, S.O. 2010, c. 6, Sched. C, in respect to counts #3 and #4

provides for a fine of not more than $10,000 for each of the counts.

[68] Furthermore, the penalty provisions under s. 30(1) of the Chartered Professional

Accountants of Ontario Act, 2017, S.O. 2017, c. 8, Sched. 3, in respect to counts

35

#5, #6, #7, and #8 provides for a fine of not more than $10,000 for a first offence,

and not more than $25,000 for each subsequent offence. These 4 offences are

first offences for the purpose of sentencing.

[69] In respect to determining the appropriate fine for each of the 8 regulatory offences,

the general principles for imposing fines has been summarized by Clayton Ruby in

his textbook, “Sentencing (2ed)” (Toronto, Canada: Butterworths, 1980), at page

262-263, and includes the notion that an offender should not gain from their

wrongdoing; that the amount of the fine must not be excessive; that the amount of

the fine should reflect the offence only and not extraneous factors; that the amount

of the fine must be applied without reference to the wealth of the offender; and that

the imposition of a fine must not be seen as licence to commit the offence

[emphasis is mine below]:

There are several principles which provide the foundation for fines. They can be

summarized briefly: the offender must not gain from his or her wrongdoing; the

amount fined must not be excessive; the amount fined should reflect the offence

only and not extraneous factors; the amount fined must be applied without

reference to the wealth of the offender; and the imposition of a fine must not be

seen as licence to commit the offence.

It is likely that the principle that the amount of the fine must not be excessive was

part of the common law even before it was enunciated in the English Bill of

Rights. There is mention of it as far back as Magna Carta, 1215: “for a trivial

offence, a freeman shall be fined only in proportion to the degree of his offence,

and for a serious offence correspondingly, but not so heavily as to deprive him of

his livelihood.”

…

The conclusion that one of the purposes of a fine is to see that the offender does

not gain from his wrong-doing can be seen in R. v. Poynton (1972), 9 C.C.C. (2d)

32 at pp. 45-46 (Ont. C.A.): “It is not the intention of the Court to impose a fine in

addition to a gaol term in view of the fact that the money illegally appropriated

has been repaid and that a penalty of some $4200 has been imposed upon the

respondent under the provisions of the Income Tax Act.”

[70] In addition, these 8 regulatory offences committed by Gujral in respect to the

penalty section under s. 30(1) of the Chartered Professional Accountants of

Ontario Act, 2017 are his first offences or convictions. Therefore, the maximum

fine that could be imposed against Gujral for each of the 8 separate offences that

were committed under the 3 professional accounting statutes applicable to Gujral

is $10,000 for each offence.

(1) Ability Of Joginder Singh Gujral To Pay A Fine

[71] If Joginder Singh Gujral were to be sentenced to pay fines as a penalty for

committing the 8 regulatory offences, then one of the key factors to consider in

36

determining a fit and appropriate sentence is Gujral’s ability to pay a fine within a

reasonable time.

(a) A sentencing court for a criminal offence is legally

required to investigate an offender’s “ability to pay”

before imposing a fine.

[72] The importance and determination of an offender’s “ability to pay” a fine for

criminal offences had been considered by the Supreme Court of Canada in R. v.

Topp, [2011] S.C.J. No. 43. In that case, the Supreme Court had to be decide

whether the trial judge, who had not imposed a fine against the convicted owner of

a customs brokerage business that had misappropriated $4.7 million dollars from

his business, had erred in law in declining to impose a fine. The Supreme Court

had to also determine whether the trial judge had been legally bound to impose a

fine, especially when the convicted owner, Topp, had failed to reasonably explain

what had happened to that ill-gotten $4.7 million dollars. The trial judge in the

Topp case had not imposed a fine, as she had not been persuaded that Topp had

the ability to pay a fine sought by the Crown due to the lack of any evidence of

Topp’s ability to pay a fine, even though Topp had taken and defrauded an amount

of $4.7 million dollars. Fish J., writing for the Supreme Court, had held at paras. 9

to 20 in R. v. Topp, that as a matter of law, the court cannot impose a fine unless it

is satisfied that the offender is able to pay, which necessarily involves an

affirmative finding based on the evidence and information that is properly before

the court. In short, Fish J. had held that the sentencer must be satisfied that the

offender is able to pay the contemplated fine before the fine could legally be

imposed. Moreover, Fish J. had noted that the legislative purpose behind the fine

provisions in the Criminal Code had been to prevent offenders from being fined

amounts in which they would be truly unable to pay, and to correspondingly reduce

the number of offenders who would be incarcerated for defaulting in the payment

of fines. In addition, Fish J. had emphasized that the effect of the fine provision in

the Criminal Code had been previously described in R. v. Wu, 2003 SCC 73,

[2003] 3 S.C.R. 530, at para. 47, as the situation where Parliament had rejected in

general the notion that a fine should be set without regard to an offender's ability to

pay. And, as such, Fish J. noted that a “means inquiry” is now a condition

precedent to the imposition of a fine except where otherwise provided by law

[emphasis is mine below]:

Mr. Topp was the owner and manager of Topp Customs Services Inc., a

brokerage business that helped importers determine and satisfy their customs

obligations. Between 1999 and 2001, on more than 400 separate occasions, he

instead helped himself to a total of more than $4.7 million entrusted to his firm for

that purpose. In each instance, Topp Customs collected from its clients the duties

and taxes properly payable to the government, but submitted false documents to

Canada Customs indicating that the clients owed little or nothing.

37

Mr. Topp was convicted at trial of 16 counts of fraud and attempted fraud under

s. 153(c) of the Customs Act, R.S.C. 1985, c. 1 (2nd Supp.). His convictions are

not in issue.

The sole issue on this appeal is whether the trial judge, Baltman J., erred in law

in declining to impose a fine, pursuant to the Crown's request. More particularly,

the decisive question is whether Judge Baltman misapplied s. 734(2) of the

Criminal Code. More particularly still, the question is whether Judge Baltman was

bound to impose a fine in light of Mr. Topp's failure to explain what had happened

to the $4.7 million he was found by the judge to have misappropriated.

Section 734(2) provides:

734... .

(2) Except when the punishment for an offence includes a minimum fine or a fine

is imposed in lieu of a forfeiture order, a court may fine an offender under this

section only if the court is satisfied that the offender is able to pay the fine or

discharge it under section 736.

Section 736 provides that "[a]n offender who is fined under section 734 may ...

discharge the fine in whole or in part by earning credits for work performed during

a period not greater than two years in a [provincial] program established for that

purpose". Ontario has not established such a program. Accordingly, unless the

judge was satisfied that Mr. Topp was able to pay the fine, no fine could legally

be imposed.

Judge Baltman declined to impose a fine. After considering counsels'

submissions, she explained her conclusion this way:

There is virtually no information about what Mr. Topp did with the stolen funds;

the Crown attempted to trace the funds and found that some monies had been

transferred to a bank account in Antigua, but there was nothing left to re-cover.

Mr. Topp appears to have few tangible assets, and so where the money went

remains a mystery.

...

... As I am not persuaded the accused has the ability to pay a fine, none is

imposed. [paras. 6 and 33]

…

Subject to s. 734(2), the court may impose a fine "in addition to or in lieu of any

other sanction" that the court is required or authorized to impose (s. 734(1)(a)).

In this case, the Crown urged the court to impose a fine in addition to a lengthy

term of imprisonment. In other cases, the offender seeks the imposition of a fine

in lieu of a more severe punishment. Moreover, the court may impose a fine

where none is requested by either side. Section 734(2) applies in all three

instances: The court can only impose a fine if it is satisfied, on the basis of the

record before it, that the offender has the means to pay the contemplated fine (or

to discharge it under s. 736).

38

The legislative purpose behind s. 734(2) is to prevent offenders from being fined

amounts that they are truly unable to pay, and to correspondingly reduce the

number of offenders who are incarcerated in default of payment. In proposing its

adoption in 1994, the then-Minister of Justice explained the rationale behind s.

734(2) this way:

[TRANSLATION] At the present time, nearly a third of the people liable to

incarceration in provincial jails are in that situation because they did not pay

fines... .

The bill recognizes this situation.

These provisions state that the court must be convinced that the offender can

pay the fine contemplated before imposing it.

(House of Commons Debates, vol. 133, 1st Sess., 35th Parl., September 20,

1994, at p. 5872)

And the effect of the provision was thus described by this Court in R. v. Wu, 2003

SCC 73, [2003] 3 S.C.R. 530, at para. 47:

... Parliament rejected in general the notion that a fine should be set without

regard to an offender's ability to pay. A means inquiry is now a condition

precedent to the imposition of a fine except where otherwise provided by law.

An affirmative finding that an offender is able to pay is therefore required before a

fine can be imposed. In the absence of evidence capable of supporting that

finding, the party seeking a fine cannot succeed.

[73] However, even before the Supreme Court had held that a sentencing court for a

criminal matter should only impose a fine where an offender has the ability to pay,

Martin J.A. for the Court of Appeal for Ontario in R. v. Snider, (1977), 37 C.C.C.

(2d) 189, [1977] O.J. No. 996, had similarly held, at paras. 6 and 7, that where a

fine is an appropriate disposition, the trial judge should only impose a fine that is

within the offender's ability to pay, bearing in mind of the possibility that the trial

judge may extend the time for payment; otherwise a custodial sentence would

result from an inability to pay the fine [emphasis is mine below]:

Counsel for the Crown does not dispute that the appellant is unable to pay the

fine imposed. Having, decided that a fine is an appropriate disposition, the trial

judge should only impose a fine that is within the offender's ability to pay, bearing

in mind of course, the possibility that he may extend the time for payment.

Otherwise a custodial sentence results from inability to pay the fine.

We have carefully considered whether we ought in this case to substitute a

custodial sentence in lieu of the fine imposed by the trial judge on the basis that it

was an inappropriate disposition, as was done in Regina v. Hall (1968) 52 Cr.

App. R. 736. We think, however, in the particular circumstances of this case, that

we should not interfere with the trial judge's discretion in imposing a fine. Since,

however, the fine exceeds the appellant's ability to pay we have concluded that

we should allow the appeal, reduce the fine to the sum of $2,400, payable over a

39

period of two years, and in default of payment the appellant is to be imprisoned

for three months, and, in addition, the appellant will be placed on probation for

two years on the statutory conditions. The appeal is allowed to give effect to this

variation.

(b) A sentencing court for a criminal offence is legally

required to conduct a “means inquiry” before imposing a

fine.

[74] Ergo, as held by the Supreme Court in R. v. Topp, [2011] S.C.J. No. 43, the

sentencing court as a matter of law cannot impose a fine for a criminal offence

unless it is satisfied that the offender is able to pay the fine. Moreover, the

Supreme Court confirmed that a “means inquiry” is now a condition precedent to

the imposition of a fine for a criminal offence, except where it is otherwise provided

by law. Furthermore, the Supreme Court in Topp recognized that as a matter of

practice, that the party seeking the fine has the burden to establish the ability to

pay the fine being sought. But more importantly, the Supreme Court held in Topp

that in a sentencing hearing, offenders do not have a formal evidential or

persuasive burden of proof that they are unable to pay a fine, but nevertheless an

offender is entitled to present any evidence or information admissible on sentence

that tends to show that the offender is unable to pay. In addition, the offender

remains free to argue that the evidence relied on by the proponent of the fine

should not satisfy the court that the offender is able to pay. Additionally, the

Supreme Court held in Topp that in determining whether the record contains

sufficient evidence to satisfy the sentencing court that the offender can afford to

pay the contemplated fine, the sentencing judge must be satisfied on a balance of

probabilities of the offender's ability to pay.

[75] In addition, Martin J.A. for the Court of Appeal for Ontario had held at para. 5 in R.

v. Rasper, [1978] O.J. No. 334, that it is an error in principle if the trial judge

imposes a fine for a criminal offence without making any investigation to assure

that a fine of a certain magnitude could be paid by the appellant:

In our view, the trial judge erred in principle in imposing a fine of $25,000 without

making any investigation to assure himself that a fine of that magnitude could be

paid by the appellant.

[76] Furthermore, in R. v. Ward (1980), 56 C.C.C. (2d) 15, the Court of Appeal for

Ontario held at para. 10, that where a fine is an appropriate penalty for a criminal

offence, a fine should not be imposed without having regard to the means of the

offender and without having regard to whether it can be paid within a reasonable

time. In addition, the Court of Appeal confirmed that it would be an error in

principle to not impose a custodial sentence and instead impose a fine in lieu of a

custodial sentence, where a custodial sentence is required to be imposed following

a conviction [emphasis is mine below]:

40

We would also observe that, where a fine is an appropriate penalty, a fine of

such magnitude should not be imposed, that having regard to the means of the

offender, it cannot be paid within a reasonable time. In our view, the imposition of

a fine in lieu of a custodial sentence in this case reflects an error in principle. The

principle has been clearly expressed by this Court on many occasions, and by

other appellate courts in Canada that, save in exceptional circumstances, a

custodial sentence is required to be imposed following a conviction for trafficking

in the more dangerous drugs, of which Methamphetamine is one. We are of the

view that there were, at the time of sentencing, no exceptional circumstances

which justified a departure from that principle in the present case, having regard

to the nature of the drug, the quantity involved and the obvious commercial

nature of the transaction. The fact that the offender had, during the interval

between the commission of the offence and his trial, rid himself of his drug

dependency, was a mitigating circumstance but not an exceptional circumstance,

nor was the fact that he was at the time of sentence gainfully employed an

exceptional circumstance although it was a factor which was entitled to due

weight.

(c) Before imposing a fine, should the sentencing court for a

regulatory offence also make inquiries about the

offender’s ability to pay?

[77] Even though the Supreme Court had held that a “means inquiry” was legally

required before a sentencing court could impose a fine on an offender convicted of

a criminal offence, is the same “means inquiry” required to be undertaken by a

sentencing court of an offender for a regulatory offence before a fine can also be

imposed?

(i) s. 57(3) of the Provincial Offences Act permits the

sentencing court to make inquiries about an

offender’s economic circumstances, but the

offender is not legally compelled to answer.

[78] Subsection 57(3) of the Provincial Offences Act, R.S.O. 1990, c. P.33, authorizes

the sentencing court to make such inquiries, on oath or otherwise, of and

concerning the defendant as it considers desirable, including the defendant’s

economic circumstances, but the defendant shall not be compelled to answer

[emphasis is mine below]:

Inquiries by court

57(3) Where a defendant is convicted of an offence, the court may make such

inquiries, on oath or otherwise, of and concerning the defendant as it

considers desirable, including the defendant’s economic circumstances,

but the defendant shall not be compelled to answer.

[79] On the question of whether a means inquiry is required for a sentencing of

regulatory offence, Kukurin J. had commented in R. v. C. (K.), [2005] O.J. No.

2046 (Ont. C.J.), in endnote #18 of the judgment, about the rudimentary nature of

41

sentencing in the Provincial Offences Act by making specific reference to s. 57 of

the Provincial Offences Act. Kukurin J. had explained that by virtue of s. 57(1), the

Provincial Offences Court is required to ask the offender if they have anything to

say before being sentenced, and under s. 57(3) the sentencing court is also

permitted to make inquiries concerning the offender’s economic circumstances:

18. The rudimentary nature of the POA in the area of sentencing can be seen

in S. 57 which requires the POA court to ask the defendant if he or she has

anything to say before being sentenced [subsection (1)], and permits the

court to make such inquiries concerning the defendant, including his/her

economic circumstances [subsection (3)]. There is not much else by way of

guidance contained in the statute. Fortunately, there is a provision for a

mandatory preparation of a pre-sentence report for young persons where

custody is contemplated.

[80] Moreover, while considering an appeal of sentence for a regulatory offence,

Justice Lane confirmed in R. v. Wells, [2003] O.J. No. 2025 (Ont. C.J.), at paras.

20 to 23, that it is indeed an error in principle for the sentencer to impose a fine

without conducting an investigation into the offender’s ability to pay, or to impose a

fine when the offender lacks the means to pay within a reasonable time. However,

as it pertains to the present application by the prosecution, Justice Lane also

emphasized that the sentencing judge has the jurisdiction to ask questions of the

offender, but that such power is not unconstrained, as questions about the offence

cannot be asked of the offender, since this could lead to the offender volunteering

information that could put the offender into greater jeopardy. Moreover, Justice

Lane pointed out that at all stages in the court process, the defendant has a right

to remain silent, and cannot be made a compellable witness against himself, or be

required to incriminate himself. Lane J. also noted that s. 57(3) of the Provincial

Offences Act made it quite clear that the defendant could not be compelled to

answer questions put to him. In addition, Lane J. confirmed that the power under

s. 57(3) is directed particularly to the financial circumstances of the defendant, so

that a defendant’s capacity to pay can be considered in imposing an appropriate

sentence and that it would be an error in principle for the sentencing court to

impose a fine without conducting an investigation into the defendant's ability to

pay, or to impose a fine which the defendant would lack the means to pay within a

reasonable time [emphasis is mine below]:

The conduct of the sentencing hearing raises significant concerns. The crown

made no submissions as to sentence, and put forth no aggravating facts upon

which sentence should be based. As the appellant was unrepresented, the

presiding Justice proceeded to ask questions on which to base his sentence. As

required by s. 57(1) of the Provincial Offences Act, he asked the defendant if he

had anything to say before sentence is passed. Section 57(3) of the P.O.A. also

provides that

"the court may make such inquiries, on oath or otherwise, of and

concerning the defendant as it considers desirable, including the

42

defendant's financial circumstances, but the defendant shall not be

compelled to answer."

Although the Justice clearly has jurisdiction to "make inquiries" as indicated, his

power to do so is not unconstrained. Questions can be asked about the

defendant, but not about the offence: Drinkwater and Ewart, Ontario Provincial

Offences Procedure, Carswell, 1980, p. 218. This is an important distinction.

Questions about the offence are inappropriate as they can (as they did in this

case) lead to the defendant "volunteering" additional information which can place

him or her in greater jeopardy. This violates the fundamental principle that, at all

stages in the court process, the defendant has a right to remain silent, and

cannot be made a compellable witness against himself, or be required to

incriminate himself. The statute itself makes it clear that the defendant cannot be

compelled to answer questions put to him.

The power under s. 57(3), furthermore, is directed particularly to the financial

circumstances of the defendant, so that his capacity to pay can be considered in

imposing an appropriate sentence. It has been found, for example, that it is an

error in principle to impose a fine without an investigation into the defendant's

ability to pay, or to impose a fine which he or she lacks the means to pay within a

reasonable time: Czumak v. Etobicoke (City), [1994] O.J No. 2247, September

16, 1994, Fairgrieve J., Ont. Prov. Ct.

In this case, the presiding jurist made no inquiries about Mr. Wells, nor about his

financial circumstances. At the conclusion of the sentencing hearing, we know

nothing about who he is, what his circumstances were since 1992, what he does

for a living, nor how much (if anything) he earns. …

[81] Moreover, in Real Estate Council Of Ontario v. Wang, [2013] O.J. No. 4294 (Ont.

C.J.), Fairgrieve J. held, at para. 22, that the principles from the criminal law for the

determination of whether a fine should be imposed would equally apply in the

sentencing of an offender for a regulatory offence. Fairgrieve J. also identified the

principle that applies when a fine is an appropriate penalty, which is that the

sentencing judge should only impose a fine that is within the offender’s ability to

pay within a reasonable time. Moreover, Fairgrieve J. held that it would be an

error in principle for a sentencing judge to impose a fine without inquiring into the

offender‘s financial circumstances, as contemplated by s. 57(3) of the Provincial

Offences Act, as well as an error in principle to impose fines that were clearly

excessive and well beyond the offender’s ability to pay [emphasis is mine below]:

There is no confusion about the principles that apply in a criminal case to the

imposition of fines. In R. v. Ward (1980), 56 C.C.C. (2d) 15 at p. 18 (Ont. C.A.),

Martin J.A. stated that "where a fine is an appropriate penalty, a fine of such

magnitude should not be imposed, that having regard to the means of the

offender, it cannot be paid within a reasonable time." Similarly, in R. v. Snider

(1977), 37 C.C.C. (2d) 189 at p. 190 (Ont. C.A.), Martin J.A. also stated that

having decided that a fine is an appropriate disposition, "the trial judge should

only impose a fine that is within the offender's ability to pay, bearing in mind, of

course, the possibility that he may extend the time for payment." I see no reason

43

why sentences for regulatory offences should involve a different principle. I am

satisfied that in the circumstances here, the justice of the peace erred in principle

both by failing to inquire into the defendants' financial circumstances, as

contemplated by s. 57(3) of the P.O.A., and also by going on to impose fines that

were clearly excessive and well beyond their ability to pay. The fines, in my view,

were totally disproportionate to the gravity of the offences they had committed

and would cause undue financial hardship to both the defendants and their

numerous dependents.

[82] Also, in Czumak v. Etobicoke (City), [1994] O.J No. 2247 (Ont. Ct. (Prov. Div.)), at

para. 56, Fairgrieve J., in referencing s. 57(3) of the Provincial Offences Act, had

held that it is an error in principle to impose a fine without conducting an

investigation into the offender's ability to pay it or to impose a fine for which the

offender lacks the means to pay within a reasonable time. Fairgrieve J. also

explained that s. 57(3) of the Provincial Offences Act provides the sentencing court

with the power to make inquiries about the offender's economic circumstances as

it considers desirable [emphasis is mine below]:

It is an error in principle to impose a fine without an investigation into the

defendant's ability to pay it, or to impose a fine which he or she lacks the means

to pay within a reasonable time: see R. v. Ward (1980), 56 C.C.C. (2d) 15 (Ont.

C.A.), and R. v. Snider (1977), 37 C.C.C. (2d) 189 (Ont. C.A.). As well, s. 57(3) of

the Provincial Offences Act provides that the court may make such inquiries

concerning the defendant's economic circumstances as it considers desirable. In

this case, after the prosecutor's submissions concerning sentence, Mr. Czumak

stated simply, "I can't afford those fines". He went on to explain that he and his

brother did not have any assets, and that their company was almost insolvent Mr.

Czumak stated that they had not been paid for their last three projects. As well,

although the prosecutor referred to evidence that the defendants' parents had

purchased the house for $220,000 and that it was then listed for sale at

$449,000, Mr. explained that with the cost of the property and the construction,

there would be Czumak little profit. The purpose of the project had been to

demonstrate their workmanship to obtain spin-off work, and because the house

had been over-improved for the area, their margin was very slim.

[83] Ergo, before imposing a fine as a penalty, a sentencing court for a regulatory

offence is also required in principle to investigate or make inquiries that it

considers desirable about the offender’s economic circumstances in respect to

their ability to pay a fine, especially if there is no evidence in the record about the

offender’s ability to pay a fine within a reasonable period.

(d) Who has the burden to prove an offender’s ability or

inability to pay a fine?

[84] Fish J. for the Supreme Court in R. v. Topp, [2011] S.C.J. No. 43, at paras. 21 and

22, had also considered whether there is a legal or persuasive burden imposed on

the prosecution to prove that the offender of a criminal offence has the ability to

pay the proposed fine. On that issue, Fish J. held that even though the fine

44

provisions in the Criminal Code did not formally place a legal burden on the

proponent seeking a fine, there is nevertheless a burden on the party seeking the

fine as a practical matter, since the court cannot impose a fine as a matter of law

unless it is satisfied that the offender is able to pay the proposed fine. And, in

order to discharge that burden, Fish J. held that the proponent of the fine may rely

on all the relevant material before the court on sentencing -- including evidence or

information provided by any other party, or otherwise properly elicited by the judge

pursuant to the fine provisions in the Criminal Code. In addition, Fish J. held that

in determining whether the record contains sufficient evidence to "satisfy" the court

that the offender can afford to pay the contemplated fine, the trial judge must be

satisfied on a balance of probabilities of the offender's ability to pay [emphasis is

mine below]:

Section 734(2) does not impose a formal burden of proof on the party seeking a

fine. As a practical matter, however, it does so to this extent. As a matter of law,

the court cannot impose a fine unless it is satisfied that the offender is able to

pay. This necessarily involves an affirmative finding based on the evidence and

information properly before the court pursuant to ss. 720 to 724 of the Criminal

Code. Absent a sufficient basis for that finding, the party seeking the fine cannot

legally succeed.

In this sense, s. 734(2) imposes a burden on the party seeking the fine to satisfy

the court that the offender is able to pay. To discharge that burden, the

proponent of the fine may rely on all the relevant material before the court on

sentencing -- including evidence or information provided by any other party, or

otherwise properly elicited by the judge pursuant, for example, to s. 723(3) of the

Criminal Code.

[85] Accordingly, for offences under the Criminal Code, if the Crown is proposing that a

fine be imposed against the offender as an appropriate sentence, then it has to

satisfy the sentencing court that the offender is able to pay the contemplated fine

by relying on all the relevant material before the court on sentencing, including

evidence or information provided by any other party, or otherwise properly elicited

by the sentencing judge.

(e) What is the standard of proof for proving that the

offender has the ability to pay a fine?

[86] In R. v. Topp, [2011] S.C.J. No. 43 (S.C.C.), at paras. 24 to 26, Fish J. held that in

determining whether the record contains sufficient evidence to "satisfy" the court

that the offender can afford to pay the contemplated fine for a criminal offence, the

trial judge must be satisfied on a “balance of probabilities” of the offender's ability

to pay [emphasis is mine below]:

In determining whether the record contains sufficient evidence to "satisfy" the

court that the offender can afford to pay the contemplated fine, the trial judge

must be satisfied, on a balance of probabilities, of the offender's ability to pay.

45

The balance of probabilities standard is appropriate, in the context of s. 734(2),

for two reasons.

First, as a logical matter, the word "satisfied" in this context cannot signify

anything less than the balance of probabilities standard. It would make little

sense for a trial judge to be satisfied that an offender could pay a contemplated

fine, but not believe that the offender was, more likely than not, able to pay it.

Second, the balance of probabilities standard accords with s. 724(3)(d) of the

Code. Section 724(3)(d) states:

724 ... .

(3) Where there is a dispute with respect to any fact that is relevant

to the determination of a sentence,

...

(d) subject to paragraph (e), the court must be satisfied on a

balance of probabilities of the existence of the disputed

fact before relying on it in determining the sentence ...

Paragraph (e) states that aggravating facts must be proved by the Crown beyond

a reasonable doubt. The finding that an offender is able to pay a fine is not an

aggravating fact.

(f) Does an offender have any evidential or persuasive

burden to prove an inability to pay a fine?

[87] In R. v. Topp, [2011] S.C.J. No. 43 (S.C.C.), at paras. 23 and 36, Fish J. had also

considered whether Parliament had explicitly placed an evidentiary burden on the

offender to prove an inability to pay a fine as a penalty for a criminal offence, since

the offender is in a better position to obtain and adduce relevant evidence about

their finances. In resolving that question, Fish J. indicated that even though

Parliament had well understood that the offender would be better positioned to

produce evidence of their finances than the Crown, Parliament had nonetheless

explicitly chosen to require an affirmative finding that the offender is able to pay a

fine, rather than requiring the offender who opposes a fine to satisfy the court that

they are unable to pay a fine. On the other hand, Fish J. held that the party

opposing a fine -- often, but not always, the offender -- is entitled, of course, to

present any evidence or information admissible on sentence and tending to show

that the offender is unable to pay the contemplated fine. However, Fish J. noted

that the party, in opposing the fine, does not assume a formal evidential or

persuasive burden of proof, but that he or she remains free to argue that the

evidence relied on by the proponent of the fine should not satisfy the court that the

offender is able to pay [emphasis is mine below]:

The party opposing a fine -- often, but not always, the offender -- is entitled, of

course, to present any evidence or information admissible on sentence and

tending to show that the offender is unable to pay. But that party, in opposing the

fine, does not assume a formal burden of proof -- evidential or persuasive. He or

46

she remains free to argue that the evidence relied on by the proponent of the fine

should not satisfy the court that the offender is able to pay.

…

Second, the Crown's argument disregards the text of s. 734(2). It may be

desirable from a truth-seeking perspective to place an evidentiary onus on the

party that is best positioned to produce evidence. Parliament well understood

that the offender is better positioned to produce evidence of his finances than the

Crown. But Parliament has nonetheless explicitly chosen to require an affirmative

finding that the offender is able to pay a fine, instead of requiring the offender

who opposes a fine to satisfy the court that he or she is unable to pay.

[88] And, to reiterate, both Lane J. in R. v. Wells, [2003] O.J. No. 2025 (Ont. C.J.), at

para. 22 and Fairgrieve J. in Real Estate Council Of Ontario v. Wang, [2013] O.J.

No. 4294 (Ont. C.J.), at para. 22, had recognized that a sentencing court under s.

57(3) of the Provincial Offences Act is authorized to investigate or make inquiries

about the economic circumstances of the offender to determine the offender’s

ability to pay, and that as a matter of principle the sentencing court for a regulatory

or provincial offence is required to investigate or make inquiries about the

offender’s ability to pay before the sentencing court can impose a fine. However,

as Lane J. noted at para. 21 in R. v. Wells, an offender is not compelled by virtue

of s. 57(3) of the Provincial Offences Act to answer any inquiries by the sentencing

court about “the offence”, since that could lead to the offender "volunteering"

additional information which could place them in greater jeopardy.

[89] Ergo, on the admissible evidence, the sentencing judge must be satisfied on a

balance of probabilities that the offender is able to pay a fine before imposing a

fine, while the offender has no legal or evidential burden to prove an inability to

pay a fine and can simply argue that the evidence on record relied on by the

prosecution, who is seeking the fine, should not satisfy the court that the offender

is able to pay. However, despite not having a legal or evidential burden to prove

an inability to pay, the offender is still entitled to present or adduce any evidence or

information admissible in the sentencing hearing that would tend to show that the

offender is unable to pay a fine.

(g) Tax documents for Gujral and his business are not

difficult to obtain by Gujral.

[90] In Ontario (Ministry of Labour) v. Sunrise Propane Energy Group Inc., [2013] O.J.

No. 3086 (Ont. C.J.), at para. 39, Chapin J. took judicial notice that copies of both

corporate and personal tax documents that have been filed with the Federal

Government are financial documents that are not difficult to obtain as proof of the

offender’s lack of an ability to pay fines [emphasis is mine below]:

I can certainly take judicial notice of the fact that the Federal Government keeps

copies of both corporate and personal tax documents filed and it would not be

difficult for the defendants to obtain copies of this information regardless of the

destruction of paperwork at the Sunrise Propane facility at 54 Murray Road.

47

There is simply no reliable information before me that would allow me to

conclude that there is a lack of ability to pay and the defendants have failed to

establish this mitigating factor. I am cognizant of the fact that there are

numerous civil law suits, but again, in my view I do not have sufficient information

to allow me to consider this as tending to show an inability to pay a substantial

fine.

[91] And, more importantly, Gujral, is someone who has stated on his websites that he

is actually involved in providing accounting services and preparing tax returns (see

Exhibits #9, #12, and #14 (for Trial)) and therefore, his own tax documents would

not be difficult to obtain or provide in this sentencing hearing. Again, even though

Gujral does not have an evidential burden to prove an inability to pay a fine, there

is no tax or financial documents or other documents before the court indicating that

Gujral is receiving social assistance or disability benefits to support the contention

that Gujral is unable to pay any fine whatsoever. Contrarily, the evidence before

the court shows that Gujral does indeed have the ability to pay a fine, since Gujral

earns about $90,000 a year in one of his two jobs, as well as having equity in a

house that he owns in Brampton.

(2) What Is The Appropriate Fine, If Any, That Should Be Imposed

On Gujral For Committing The 8 Regulatory Offences?

[92] To reiterate, when sentencing an offender in respect of a quasi-criminal or

regulatory offence in Ontario, the sentencing court may take into account the

objectives of denunciation, specific and general deterrence, separation of the

accused from society if necessary, rehabilitation, reparation to victims and to

society, and promoting a sense of responsibility in offenders, as well as the other

principles or goals of sentencing set out in ss. 718, 718.1, and 718.2 of the

Criminal Code. But more importantly, the sentencing court, as a matter of

principle, must investigate or conduct an inquiry into the offender’s ability to pay

before it can impose a fine.

[93] And, like one of the principal purposes behind regulating different professions in

Ontario, the regulation of Certified Management Accountants, Chartered

Accountants, and Chartered Professional Accountants in Ontario is for the

protection of the public in Ontario and to ensure professional accountants who

wish to practice in Ontario are competent and ethical professionals. On the

contrary to this requirement for ethical professionalism, Joginder Singh Gujral has

been convicted for publicly using his foreign professional accounting designations,

initials, or descriptions in Ontario, as well as being convicted for holding himself

out as a member of and practicing as a Certified Management Accountant,

Chartered Accountant, and Chartered Professional Accountant in Ontario while not

being a member of any of the professional accounting bodies in Ontario. Ergo,

because of the need to protect the public in Ontario against unregulated

individuals who are not members of one of the professional accounting bodies in

48

Ontario and who offer professional accounting services to the public, fines are

necessary to deter Gujral and others from committing similar offences.

[94] On Joginder Singh’s ability to pay a fine, Gujral had testified during the trial that he

had been too busy to deal with his advertisements and webpages as he had 2 full-

time jobs. Gujral had stated that he was operating “Gujral Accounting” and “Gujral

Finance Inc.”, as indicated on his various websites (see Exhibits #9, #12, and #14

(for Trial)), and that he was also working full-time for Data Communications

Management Corp. since April 30, 2018, as indicated by Exhibit #2 (for

Sentencing). His employment at Data Communications Management Corp. paid

Gujral approximately $90,000 annually.

[95] Furthermore, Gujral on his Linked-In webpage states he has worked in high

positions for Fortune 500 companies and had been a professional accountant for

approximately 20 years (see Exhibits #9, #14, #15, and #21 (for Trial)).

[96] Also, In respect to Gujral’s ability to pay a fine, the prosecution submitted a Data

Communications Management Corp. paystub (Exhibit #2 (for Sentencing)) which

had been provided to the prosecution by Gujral. The pay stub indicates that Gujral

earns $47.4184 an hour and that he works 35 hours a week and that the amount

for that period was $3461.54 before deductions. Extrapolated over 52 weeks, the

prosecution calculates that Gujral’s income would be approximately $120,000 a

year. However, Gujral submits that the pay stub is actually for 5 weeks' worth of

employment and not for 4 weeks of employment. On the other hand, Gujral did

not provide any evidence on what his annual salary should be from his

employment at Data Communications Management Corp. However, neither the

prosecution nor Gujral appear to be correct in the proper interpretation of Gujral’s

pay stub entered as Exhibit #2 (for Sentencing). Ergo, for the purposes of

determining the annual employment salary for Gujral at Data Communications

Management Corp., the pay stub indicates that the pay period was pay period #3

of 26 pay periods. Normally, there would be 26 pay periods in a 52-week year for

most employees in Canada, in which one pay period would be for 2 weeks of

employment. As such, the annual employment salary for Gujral at Data

Communications Management Corp would be approximately $90,000 a year

before deductions, which is based on $3461.54 for one pay period times 26 pay

periods in a year.

[97] As the offender Gujral is gainfully employed since at least April 30, 2018, with the

same employer, Data Communications Management Corp. (see Exhibit #2 (for

Sentencing)) and his annual income is approximately $90,000 a year, Gujral has

the ability to pay a fine and reasonable costs incurred by CPA Ontario in

prosecuting Gujral, if costs were to be ordered to be paid by Gujral. Gujral’s

submission that he is impecunious and unable to pay any fine, since he may have

to declare bankruptcy is disingenuous, considering that Gujral has publicly stated

on his LinkedIn webpage that he has been employed as a professional accountant

for over 20 years with various companies (including Fortune 500 companies) in

49

high positions and owns a house in Ontario, and has publicly stated on his

websites that his accounting business or firm in Ontario provides professional

services to a broad range of small or medium sized entrepreneurial clients (see

Exhibits #9, #12, and #14 (for Trial)), in which it could be reasonably inferred that

Gujral has accumulated significant assets over his professional life. Furthermore,

considering that Gujral has not been forthright and credible in his testimony during

the trial, and because of his effort to delay these proceedings, very little weight can

be put onto Gujral’s submissions about his inability to pay any fines or fees.

[98] Ergo, Gujral is not someone who is impecunious, but rather someone who does

have the ability to pay a fine based on his employment income and the equity in

his house at that he owns at 5 Keystone Drive in Brampton.

[99] Accordingly, significant fines are necessary in this case to deter similar offences

from being committed by Joginder Singh Gujral and by others, in order to protect

the public from individuals or firms who provide accounting services from holding

themselves out as or implying that they are members of one of the regulated

professional accounting bodies in Ontario, when they are not in fact a member nor

are they regulated by a professional accounting body in Ontario. In the

circumstances, fines totalling $16,000 (exclusive of court costs and victim fine

surcharges) for Gujral’s 8 convictions will act as both a general and specific

deterrent.

[100] Therefore, in consideration of the sentencing principles, in particular the principles

of proportionality, parity, and totality; and to address general and specific

deterrence, especially specific deterrence considering that Gujral was still

unlawfully using his foreign professional designations, initials or descriptions

publicly in Ontario up to the day before Gujral’s sentencing hearing on January 16,

2020; and in light of Gujral’s ability to pay, Joginder Singh Gujral will have to pay

the following fines for the 8 convictions:

(1) count #1: no fine.

(2) count #2: no fine.

(3) count #3: a fine of $2,000.

(4) count #4: no fine.

(5) count #5: a fine of $2,000.

(6) count #6: no fine.

(7) count #7: a fine of $6,000.

(8) count #8: a fine of $6,000.

50

[101] The total amount of fines that Joginder Sigh Gujral will have to pay is $16,000

(which does not include the corresponding court costs and victim fine surcharges

for each of the 8 convictions).

(E) SHOULD GUJRAL BE SENTENCED TO A PERIOD OF PROBATION?

[102] The prosecution seeks a period of probation for the offender, Joginder Singh

Gujral, of 2 years with the condition that Gujral not commit the same offences

during that period. The period of 2 years is warranted, the prosecution contends,

because Gujral has been up to January 16, 2020, which is only the day before the

sentencing hearing (see Exhibit #1 (for Sentencing), still unlawfully using his

foreign professional accounting designations, initials or descriptions on his

LinkedIn webpage that would be readily available for viewing by the public in

Ontario, when Gujral is still not a member of CPA Ontario and not legally permitted

to do so, except under the circumstances set out in the 3 statutory exceptions

under s. 29(2) of the Chartered Professional Accountants of Ontario Act, 2017.

Furthermore, Gujral had also failed to include the required proviso or qualifying

statement or expressly state on his LinkedIn webpage that “I am not a member of

Chartered Professional Accountants of Ontario (CPA Ontario) and I am not

governed by CPA Ontario. My services have not been approved or endorsed by

CPA Ontario”.

(1) Probation Orders.

[103] In respect to probation orders, s. 72 of the Provincial Offences Act, R.S.O. 1990, c.

P.33, governs the imposition of probation orders for an offender convicted of a

regulatory offence that is commenced by a Part III information and permits the

sentencer to impose both a fine and a probation order on the offender.

Furthermore, where an offender is sentenced to serve a period of probation, the

probation order will automatically comprise of 3 statutory conditions that are set

out under s. 72(2), namely: (1) not commit the same or any related or similar

offence; (2) appear before the court as and when required; and (3) notify the court

of any change in address [emphasis is mine below]:

Probation order

72(1) Where a defendant is convicted of an offence in a proceeding

commenced by information, the court may, having regard to the age,

character and background of the defendant, the nature of the offence and

the circumstances surrounding its commission,

(a) suspend the passing of sentence and direct that the defendant

comply with the conditions prescribed in a probation order;

(b) in addition to fining the defendant or sentencing the defendant to

imprisonment, whether in default of payment of a fine or otherwise,

51

direct that the defendant comply with the conditions prescribed in a

probation order; or

(c) where it imposes a sentence of imprisonment on the defendant,

whether in default of payment of a fine or otherwise, that does not

exceed ninety days, order that the sentence be served intermittently

at such times as are specified in the order and direct that the

defendant, at all times when he or she is not in confinement pursuant

to such order, comply with the conditions prescribed in a probation

order.

Statutory conditions of order

(2) A probation order shall be deemed to contain the conditions that,

(a) the defendant not commit the same or any related or similar offence,

or any offence under a statute of Canada or Ontario or any other

province of Canada that is punishable by imprisonment;

(b) the defendant appear before the court as and when required; and

(c) the defendant notify the court of any change in the defendant’s

address.

Conditions imposed by court

(3) In addition to the conditions set out in subsection (2), the court may

prescribe as a condition in a probation order,

(a) that the defendant satisfy any compensation or restitution that is

required or authorized by an Act;

(b) with the consent of the defendant and where the conviction is of an

offence that is punishable by imprisonment, that the defendant

perform a community service as set out in the order;

(c) where the conviction is of an offence punishable by imprisonment,

such other conditions relating to the circumstances of the offence

and of the defendant that contributed to the commission of the

offence as the court considers appropriate to prevent similar unlawful

conduct or to contribute to the rehabilitation of the defendant; or

(d) where considered necessary for the purpose of implementing the

conditions of the probation order, that the defendant report to a

responsible person designated by the court and, in addition, where

the circumstances warrant it, that the defendant be under the

supervision of the person to whom he or she is required to report.

52

(2) Restitution Orders.

[104] The sentencing court may also order the offender to pay compensation or

restitution as a standalone restitution order or as a condition of a Probation Order

under s. 72(3)(a) of the Provincial Offences Act, if the governing statute of the

offence specifically authorizes a sentencing court to make such an order.

[105] For the case at bar, the 3 accounting statutes that are applicable to Joginder Singh

Gujral do expressly authorize or provide for restitution or compensation to be paid

by the offender, and as such, an order for restitution or compensation, either as a

standalone restitution order or as a condition of a probation order is an available

sanction that can be imposed in a sentence for Gujral. These such orders for

restitution as part of a probation order are contained in s. 27(3) of the Certified

Management Accountants Act, 2010, S.O. 2010, c. 6, Sched. B, s. 28(3) of the

Chartered Accountants of Ontario Act, 2010, S.O. 2010, c. 6, Sched. C., and s.

30(3) of the Chartered Professional Accountants of Ontario Act, 2017, S.O. 2017,

c. 8, Sched. 3.

[106] However, as there was no evidence that specific members of the public were

negatively affected or impacted by Gujral’s unlawful conduct, then no restitution

order is required to be made.

(3) Is A Period Of Probation For Joginder Singh Gujral

Warranted?

[107] Despite being warned by CPA Ontario as early as of March 30, 2017, against

using his foreign professional accounting designations, initials or descriptions

publicly in Ontario (see Exhibit #10 (for Trial)), and by being convicted of doing so

on November 29, 2019, Joginder Singh Gujral continues to disregard the law in

respect to the prohibition against the defendant publicly using his foreign

professional accounting designations, initials or descriptions publicly in Ontario as

evidenced by Exhibit #1 (for Sentencing) which shows that Gujral was still

unlawfully using his foreign professional accounting designations on his Linked-in

webpage which is publicly available and viewable in the province of Ontario up to

and including January 16, 2020, which is the day before Gujral’s sentencing

hearing. And because of Gujral’s continuation of this unlawful conduct and his

disregard for complying with the law, a period of probation with the 3 statutory

condition set out in s. 72(2) of the Provincial Offences Act, 1990, c. P.33, for 2

years is warranted for Gujral. Specifically, Joginder Singh Gujral is required to

comply with a probation order for a period of 2 years with the following 3 statutory

conditions:

(1) Joginder Singh Gujral is not to commit the same or any related or

similar offence, or any offence under a statute of Canada or Ontario or

any other province of Canada that is punishable by imprisonment;

53

(2) Joginder Singh Gujral is to appear before the court as and when

required; and

(3) Joginder Singh Gujral is to notify the court of any change in his

address.

(F) SHOULD JOGINDER SINGH GUJRAL BE ORDERED TO PAY THE

“REASONABLE COSTS” INCURRED BY CPA ONTARIO IN THIS

PROSECUTION?

[108] The prosecution also submits that Joginder Singh Gujral should indemnify CPA

Ontario for its legal costs that have been incurred by them in the prosecution of

Gujral for these 8 regulatory offences and be ordered to pay the entirety of their

legal costs, which has amounted to $58,190.60. In addition, the prosecution

submits that such an order for costs are provided for and legally permitted under s.

28(1) of the Certified Management Accountants Act, 2010, S.O. 2010, c. 6, Sched.

B, under s. 29(1) of the Chartered Accountants of Ontario Act, 2010, S.O. 2010, c.

6, Sched. C, and under s. 31 of the Chartered Professional Accountants of Ontario

Act, 2017, S.O. 2017, c. 8, Sched. 3. In addition, the prosecution relies on s.

131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, that provides the legal

authority and discretion for a court to award costs and to also determine who

should pay the costs and to what extent of those costs that were incurred should

actually be paid, which would also be subject to the provisions of an Act or rules of

court.

[109] However, the prosecution submits that there is very little guidance in the case law

in respect to the factors and criteria that a sentencing court should consider or use

in deciding whether costs should be ordered against an offender convicted of a

committing a regulatory offence and for determining whether all or part of the costs

incurred by the prosecution should be ordered to be paid by the offender.

Because of this lack of guidance, the prosecution submits that the principles and

criteria in awarding costs under Rule 57 of the Rules of Civil Procedure for Ontario

should be followed.

[110] And, relying on the factors listed in Rule 57 that can be used in determining the

amount of the costs award, the prosecution submits that Gujral’s insincerity and

reprehensible conduct in the proceedings has caused CPA Ontario to incur

additional and needless legal costs. In particular, the prosecution submits that

Gujral had intentionally delayed the proceedings; that Gujral had caused the

prosecution to make numerous court appearances; that the prosecution had made

a settlement offer to Gujral before the trial commenced; that Gujral had brought

various motions, including an application to adjourn the trial that had been without

merit; and that Gujral had brought a Charter application in the trial which was of

limited application and which had caused the prosecution to spend and undertake

many hours on research and preparation time, which taken together supports the

prosecution’s argument for an order for Joginder Singh Gujral to indemnify CPA

54

Ontario’s for its legal costs incurred in the prosecution of Gujral. In addition, the

prosecution submits that the Gujral matter was not complex, but that the Charter

application had been complex and had increased the length of the proceeding,

and had also caused the prosecution to spend additional time to prepare and to

respond to Gujral’s Charter application, which had alleged that many of Gujral’s

Charter rights had been infringed by CPA Ontario and the prosecution.

Furthermore, the prosecution submits that Gujral had brought an adjournment

application which was held to be frivolous and lacking in truthfulness by Bonas J.P.

and that it had been an unnecessary step. Moreover, the prosecution submits that

Gujral had not been forthright and had refused to admit any facts or make any

admissions which included Gujral seemingly forgetting about the webpages that

Gujral had created and put onto the internet.

[111] But, before accepting the prosecution’s submission about having to rely on the

factors set out in Rule 57 of the Rules of Civil Procedure for considering an order

for costs, it should be noted that the purpose and criteria for awarding costs in civil

litigation proceedings, as well as the different legal standards of proof involved

between civil law proceedings and regulatory offences proceedings, may not be

appropriate to utilize or adopt when sentencing an offender for a quasi-criminal or

regulatory offence. Ergo, a review of the purpose and criteria for cost awards in

civil litigation proceedings and administrative proceedings, such as cost awards in

professional disciplinary proceedings will be undertaken to determine the

appropriate criteria or factors to use in determining whether Joginder Singh Gujral

should be ordered to pay costs to CPA Ontario and also whether all or part of CPA

Ontario’s incurred costs should be paid by Gujral.

[112] Furthermore, cost awards generally comprise of lawyers’ fees and disbursements.

When dealing with cost awards, there are 2 regimes which govern the awarding of

costs. Costs may be awarded according to principles established under the

common law or under a statutory provision. Furthermore, costs also may be

awarded in respect to civil litigation proceedings, administrative proceedings, and

criminal or quasi-criminal proceedings. However, courts have also held that when

costs are to be awarded against a party then those costs must be reasonable.

[113] The historical basis for the courts to order a party to pay all or part of the costs of

the other party in a legal proceeding was detailed by LeBel J., writing for the

majority of the Supreme Court of Canada, in British Columbia (Minister of Forests)

v. Okanagan Indian Band, [2003] 3 S.C.R. 371, [2003] S.C.J. No. 76. At paras. 19

to 26, LeBel J. noted that the English common law courts did not have inherent

jurisdiction over costs, but that beginning in the late 13th century the common law

courts were given the power by statute to order costs in favour of a successful

party. The Statute of Gloucester enacted in 1278 had provided that a jury could

award costs as part of an award of damages to a successful plaintiff. On the other

hand, LeBel J. indicated that courts of equity did have discretionary jurisdiction to

order costs according to the dictates of conscience. Furthermore, LeBel J.

explained that in the modern Canadian legal system, this equitable and

55

discretionary power survives, and is recognized by the various provincial statutes

and rules of civil procedure which make costs a matter for the court's discretion.

Moreover, LeBel J. found that the standard characteristics of costs awards were

the following: (1) They are an award to be made in favour of a successful or

deserving litigant, payable by the loser; (2) Of necessity, the award must await the

conclusion of the proceeding, as success or entitlement cannot be determined

before that time; (3) They are payable by way of indemnity for allowable expenses

and services incurred relevant to the case or proceeding; and (4) They are not

payable for the purpose of assuring participation in the proceedings. In addition,

LeBel J. also affirmed that the traditional purpose of an award of costs is to

indemnify the successful party in respect of the expenses sustained. LeBel J. also

explained that even though the principle of indemnification is paramount, it is not

the only consideration when the court is called on to make an order of costs, since

other important functions may be served by a costs order, such as, to encourage

settlement, to prevent frivolous or vexatious litigation, and to discourage

unnecessary steps [emphasis is mine below]:

(1) Traditional Costs Principles -- Indemnifying the Successful Party

The jurisdiction of courts to order costs of a proceeding is a venerable one. The

English common law courts did not have inherent jurisdiction over costs, but

beginning in the late 13th century they were given the power by statute to order

costs in favour of a successful party. Courts of equity had an entirely

discretionary jurisdiction to order costs according to the dictates of conscience

(see M. M. Orkin, The Law of Costs (2nd ed. (loose-leaf)), at p. 1-1). In the

modern Canadian legal system, this equitable and discretionary power survives,

and is recognized by the various provincial statutes and rules of civil procedure

which make costs a matter for the court's discretion.

In the usual case, costs are awarded to the prevailing party after judgment has

been given. The standard characteristics of costs awards were summarized by

the Divisional Court of the Ontario High Court of Justice in Re Regional

Municipality of Hamilton-Wentworth and Hamilton-Wentworth Save the Valley

Committee, Inc. (1985), 51 O.R. (2d) 23, at p. 32, as follows:

(1) They are an award to be made in favour of a successful or deserving

litigant, payable by the loser.

(2) Of necessity, the award must await the conclusion of the proceeding, as

success or entitlement cannot be determined before that time.

(3) They are payable by way of indemnity for allowable expenses and services

incurred relevant to the case or proceeding.

(4) They are not payable for the purpose of assuring participation in the

proceedings. [Emphasis in original.]

The characteristics listed by the court reflect the traditional purpose of an award

of costs: to indemnify the successful party in respect of the expenses sustained

either defending a claim that in the end proved unfounded (if the successful party

56

was the defendant), or in pursuing a valid legal right (if the plaintiff prevailed).

Costs awards were described in Ryan v. McGregor (1925), 58 O.L.R. 213 (App.

Div.), at p. 216, as being "in the nature of damages awarded to the successful

litigant against the unsuccessful, and by way of compensation for the expense to

which he has been put by the suit improperly brought".

(2) Costs as an Instrument of Policy

These background principles continue to govern the law of costs in cases where

there are no special factors that would warrant a departure from them. The power

to order costs is discretionary, but it is a discretion that must be exercised

judicially, and accordingly the ordinary rules of costs should be followed unless

the circumstances justify a different approach. For some time, however, courts

have recognized that indemnity to the successful party is not the sole purpose,

and in some cases not even the primary purpose, of a costs award. Orkin, supra,

at p. 2-24.2, has remarked that:

The principle of indemnification, while paramount, is not the only consideration

when the court is called on to make an order of costs; indeed, the principle has

been called "outdated" since other functions may be served by a costs order, for

example to encourage settlement, to prevent frivolous or vexations [sic] litigation

and to discourage unnecessary steps.

The indemnification principle was referred to as "outdated" in Fellowes, McNeil v.

Kansa General International Insurance Co. (1997), 37 O.R. (3d) 464 (Gen. Div.),

at p. 475. In this case the successful party was a law firm, one of whose partners

had acted on its behalf. Traditionally, courts applying the principle of

indemnification would allow an unrepresented litigant to tax disbursements only

and not counsel fees, because the litigant could not be indemnified for counsel

fees it had not paid. Macdonald J. held that the principle of indemnity remained a

paramount consideration in costs matters generally, but was "outdated" in its

application to a case of this nature. The court should also use costs awards so as

to encourage settlement, to deter frivolous actions and defences, and to

discourage unnecessary steps in the litigation. These purposes could be served

by ordering costs in favour of a litigant who might not be entitled to them on the

view that costs should be awarded purely for indemnification of the successful

party.

Similarly, in Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201, the British

Columbia Court of Appeal stated at para. 28 that "the view that costs are

awarded solely to indemnify the successful litigant for legal fees and

disbursements incurred is now outdated". The court held that self-represented lay

litigants should be allowed to tax legal fees, overruling its earlier decision in

Kendall v. Hunt (No. 2) (1979), 16 B.C.L.R. 295. This change in the common law

was described by the court as an incremental one "when viewed in the larger

context of the trend towards awarding costs to encourage or deter certain types

of conduct, and not merely to indemnify the successful litigant" (para. 44).

As the Fellowes and Skidmore cases illustrate, modern costs rules accomplish

various purposes in addition to the traditional objective of indemnification. An

order as to costs may be designed to penalize a party who has refused a

57

reasonable settlement offer; this policy has been codified in the rules of court of

many provinces (see, e.g., Supreme Court of British Columbia Rules of Court,

Rule 37(23) to 37(26); Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194,

Rule 49.10; Manitoba Queen's Bench Rules, Man. Reg. 553/88, Rule 49.10).

Costs can also be used to sanction behaviour that increases the duration and

expense of litigation, or is otherwise unreasonable or vexatious. In short, it has

become a routine matter for courts to employ the power to order costs as a tool

in the furtherance of the efficient and orderly administration of justice.

Indeed, the traditional approach to costs can also be viewed as being animated

by the broad concern to ensure that the justice system works fairly and efficiently.

Because costs awards transfer some of the winner's litigation expenses to the

loser rather than leaving each party's expenses where they fall (as is done in

jurisdictions without costs rules), they act as a disincentive to those who might be

tempted to harass others with meritless claims. And because they offset to some

extent the outlays incurred by the winner, they make the legal system more

accessible to litigants who seek to vindicate a legally sound position. These

effects of the traditional rules can be connected to the court's concern with

overseeing its own process and ensuring that litigation is conducted in an

efficient and just manner. In this sense it is a natural evolution in the law to

recognize the related policy objectives that are served by the modern approach

to costs.

(1) COSTS IN CIVIL LITIGATION PROCEEDINGS

(a) Costs in Civil Litigation Proceedings Under The

Common Law

[114] For civil litigation proceedings under the common law, the general rule is that costs

“follow the event” or that “the loser pays”, in which costs would be awarded on a

“party to party” basis, “solicitor and client” basis, or on a “solicitor and own client”

basis. In Ontario, “party and party” costs (now referred to as “partial indemnity”)

were generally a partial indemnity of the costs incurred, which are about 50% to

60% of the winning party’s costs; while “solicitor and client” costs (now referred to

as “substantial indemnity”) are about an 80% partial indemnity of the winning

party’s costs; and “solicitor and own client” costs (now referred to as “full

indemnity”) are 100% indemnity of the winning party’s costs of the litigation. But

more importantly, costs awards in Ontario are at the discretion of the court.

[115] In addition, Canada follows a modified loser-pay model, which requires the loser of

the civil lawsuit to bear not only their own legal costs, but also part of the costs of

the winning party, which would inevitably mean that the financial risk of bringing

any dispute to court for resolution would be exceptionally high. Accordingly,

bringing a dispute for a court to resolve may be viewed as being of such high risk

that it may bar practical access to the courts.

58

[116] A succinct summary of the law of costs in civil litigation proceedings in Canada can

be found in the article by the late Professor H. Patrick Glenn of McGill University

entitled, “Costs And Fees In Common Law Canada And Quebec”, online:

<http://www-personal.umich.edu/~purzel/national_reports/Canada.pdf>. Professor

Glenn had remarked that the law relating to costs and fees in civil litigation

proceedings varies from province to province, but that there are considerable

similarities amongst the common law provinces. In addition, Professor Glenn

noted that all Canadian jurisdictions follow the “world rule” that costs in principle

are “in the cause”, which means that the loser of the litigation pays, subject to the

discretion of the court. Professor Glenn also explained that the “loser pays” rule

was received in Canada through reception of French and English law and rests on

the traditional justification, that a successful party should not have to bear the cost

of establishing their right against an unjust claim or defence. However, Professor

Glenn also indicated that some writers suggest that there is a further justification

for the “loser pays” rule in that it acts as deterrent effect on litigation, in the form of

the down-side risk of having to cover costs of the other side in addition to one’s

own costs. In addition, Professor Glenn noted that in the common law provinces

the winner will recover more than in Quebec, but the amount will vary depending

on the level of costs fixed by the court, which may vary from full through

substantial to only partial indemnity, and by any further element affecting the

discretion of the court, e.g., abusive procedure in a winning cause. Accordingly,

Professor Glenn emphasized that costs awards may also fill an important

disciplinary function on the parties in the litigation [emphasis is mine below]:

Civil procedure in Canada, including the law of costs and fees, is largely

provincial in origin and therefore varies from province to province. The provincial

civil procedure (in the form of Rules of Civil Procedure (RCP) in the common law

provinces and a Code of Civil Procedure (CCP) in Quebec) applies in the

provincial and superior courts of each province. There is a Federal Court, with

Federal Rules of Procedure, but neither the Federal Court nor the Federal Rules

enjoy the level of prominence enjoyed by the U.S. Federal Courts and the U.S.

Federal Rules of Civil Procedure.

The law relating to costs and fees varies from province to province but there are

considerable similarities amongst the common law provinces. The law of Quebec

shares some basic rules with the other provinces but Quebec law is the most

distinctive of the Canadian provinces.

1. All Canadian jurisdictions follow the ‘world rule’ that costs in principle are ‘in

the cause’. The loser pays, subject to the discretion of the court. This extends to

both attorney fees and court costs, though they are separately determined. Court

costs are recoverable as ‘disbursements’ made in the course of litigation by the

successful party or his or her counsel. Attorney fees are recoverable as such,

though the amount of recovery varies greatly between Quebec and the common

law provinces. The ‘loser pays’ rule was received in Canada through reception of

French and English law and rests on the traditional justification, that a successful

party should not have to bear the cost of establishing their right against an unjust

claim or defence. Some maintain that a further justification for the rule would be

59

its deterrent effect on litigation, in the form of the down-side risk of having to

cover costs of the other side in addition to one’s own costs.

2. While the rule is that the loser pays, application of the rule varies considerably.

In Quebec the loser pays very little, since the tariff of costs payable is maintained

at a very low level, making the Quebec situation closer to the ‘American’ rule that

each side bears their own costs. This position may also reflect the historic French

position that lawyer’s fees are not recoverable (‘frais irrépétibles’). In the common

law provinces the winner will recover more than in Quebec, but the amount will

vary depending on the level of costs fixed by the court, which may vary from full

through substantial to only partial indemnity, and by any further element affecting

the discretion of the court, e.g., abusive procedure in a winning cause. Costs

awards may therefore fill an important disciplinary function. Further information

on the determination of costs is found below in section IV.

…

[117] In addition, Professor Glenn commented in his article on the role of settlement

offers and its affect on awarding costs, and noted that where a party refuses a

settlement offer that particular party will suffer costs consequences if the eventual

judgment is more prejudicial to them than the settlement offer [emphasis is mine

below]:

5. A very high percentage of cases are settled, given the costs of a trial.

Estimates given are often in the order of 95%. The parties may agree on costs

and fees as part of the settlement. The nature of the agreement on costs and

fees will vary depending on the circumstances and the relative bargaining

position of the parties. In the absence of empirical evidence, the usual model

may be that each side bears their own costs and fees. In particular

circumstances a party may assume costs and/or fees of the other side.

Settlement offers are highly relevant to eventual costs orders. In general a party

refusing a settlement offer will suffer costs consequences if the eventual

judgment is more prejudicial to them than the settlement offer. For example, if a

plaintiff refuses a defendant’s offer and then recovers less than the offer, the

plaintiff will recover costs on a partial indemnity basis up to the date of service of

the defendant’s offer and no costs thereafter, while the defendant will recover

partial indemnity costs from the date of service of the defendant’s offer. If a

defendant refuses a plaintiff’s offer and then is found liable for more than the

amount of the offer, the defendant is liable for partial indemnity costs to the date

of service of the offer and substantial indemnity costs thereafter. This solution is

codified in Ontario in RCP 49 and is the object of case law in at least some other

provinces, including Quebec.

[118] Furthermore, Professor Glenn identified in his article that the process of shifting of

costs and fees inevitably acts as a deterrent to litigation [emphasis is mine below]:

III. Encouragement or Discouragement of Litigation.

1. Most would agree that the process of shifting of costs and fees acts as a

deterrent to litigation. This will depend on the extent of shifting but in the common

60

law provinces in particular the down-side risk may be substantial. Counsel are

ethically obliged to explain this risk in discussing the case with their client. The

greatest deterrent is with respect to litigation by out-of-province plaintiffs, who

may be required in all provinces to post security for costs. Orders for posting of

security for costs are made on motion and are in the discretion of the court, but

are frequently made. Plaintiffs may generally avoid such an order only by

showing that they have assets within the province which can satisfy a costs

order, or that they are impecunious. Orders have required costs to be posted in

amounts of over $1M. See generally Ont. RCP 56, CCP art. 65. Security for

costs has been challenged constitutionally in many provinces but has generally

survived these challenges. The coming into force of the North American Free

Trade Agreement (NAFTA) has had no effect on such provisions for security for

costs in North America. Given the cost of litigation, parties may ask for

provisional or interim costs orders to be made, to allow them to finance their

litigation. This is exceptionally granted, e.g., where the plaintiff could not afford

the litigation, appeared to have a meritorious claim, and raised issues of public

importance; British Columbia (Minister of Forests) v. Okanagan Indian Band

(2003) 43 C.P.C. (5th) 1. The Quebec Court of Appeal recently refused such an

order, however, on the ground that an action against a doctor with respect to a

child born prematurely does not raise questions of public interest; St. Arnaud c.

C.L. [2009] R.J.Q. 239.

2. Parties will provide a retainer to their counsel, frequently in the order of

$10,000 and this will be used for disbursements (including court filing costs,

expert witnesses, etc.) and as an advance payment on counsel fees. This will be

replenished on an ongoing basis and in extended litigation billing may be on a

monthly basis. This has an unquestionable deterrent effect and leads to great

pressure for law-firm financing or third-party financing of suits.

[119] Professor Glenn also recognized that the process of shifting of costs and fees acts

as a deterrent to litigation. He also noted that there are 3 models of costs awards

in Canada: (1) the Quebec model, (2) the common law model used by provinces

outside Ontario, and (3) the Ontario Model. For the Ontario model, Professor

Glenn noted, that Ontario has recently abandoned the idea of a tariff or ‘Grill’ of

costs in favour of the presiding judge ruling on costs, generally after submissions

by the parties on the complexity of the case, time actually spent, hourly rates and

other factors. He also indicated that the assessment of costs may be made on a

‘partial indemnity’, ‘substantial indemnity’ or ‘full indemnity’ basis, which largely

corresponds to the prior distinction between party and party costs, solicitor-client

costs, and solicitor-own client costs. Moreover, Professor Glenn stated that a

global amount will be fixed, though a judge may also order a ‘line-by-line’

assessment to be undertaken by a taxing officer. Once again, Professor Glenn

reiterated that costs may be very substantial and the deterrent effect of the

common law costs rule would be fully evident. Professor Glenn also gave

examples of lawyer’s fees and the average daily lawyer’s fee to each party for

attending trial is approximately $22,738, which includes preparation time but not

disbursements, court costs or expert fees [emphasis is mine below]:

61

IV. The Determination of Costs and Fees.

1. Court costs are fixed by Regulation under the relevant statute of the court in

question. Court costs will generally be lower for small claims cases but will

usually be the same for other levels of provincially-administered courts, e.g., the

Quebec (provincial) court and the Quebec Superior Court. Whether there is

variation depending on the amount of the claim depends on the province.

Variation in Quebec is set out in the Tarif des frais judiciaries en matière civile et

des droits de greffe, and costs vary according to Six classes of litigation. Filing of

an action may thus cost from $56 to $656 depending on the amount in question.

In Ontario there is no variation and filing of an action costs a uniform amount of

$181. As mentioned above, these court costs are recoverable as disbursements

under the rules for shifting of costs and fees.

2. Lawyers’ fees are subject to market forces and there is no statutory or

regulatory control of them. Empirically fees vary according to province, rural or

urban environment, and large or small firm size. A recent survey (The Canadian

Lawyer, June, 2009) p. 33 gave average hourly fees for a lawyer with 10 years

experience of $382 in Ontario and $467 in the western provinces. In Ontario fees

are said to range up to $900 per hour. In Quebec a recent survey showed that

only 2% of the profession was charging more than $500 per hour, with a further

1% at more than $400 (Le Journal du Barreau du Québec, Mai, 2009, p. 32).

3. Costs which are to be shifted between the parties (including court costs, other

allowable disbursements and counsel fees) may be fixed either by the presiding

judge or by an assessment or ‘taxing’ officer (variously named). Traditionally the

presiding judge would give the appropriate costs order (on which, see below),

and the taxing officer would hear representations of the parties and fix the actual

amount based on proof of the work done, usually in reliance on a fixed tariff of

costs which would set out allowable items and rates for them. In recent years,

probably because of the size of costs awards, both the awarding and the fixing of

costs may be done by the trial judge, at his or her discretion. Appeal is possible

both from an order of an assessment officer or from a costs order of a presiding

judge, depending on usual criteria for appeal. It is with respect to the nature of

the costs order and the general scale of its amount that the greatest differences

exist amongst the provinces. In general three models are discernible.

The first model is that of Quebec, where there is an established tariff of

recoverable costs and fees but which has been (deliberately?) neglected, such

that recoverable costs are very low. This removes much of the down-side risk of

litigation, and there is a view that this is the main reason for the government’s

failure to revise the tariff. The Quebec Bar has officially and publicly protested

against the lack of revision, but to no avail.

Currently the Tarif des honoraires judiciaires des avocats allows, for example, for

$1000 in fees recoverable from the other side in the most expensive class of

cases (over $50,000) for obtaining a contested judgment on the merits, without

regard to the length of the trial. Fifty ($50) is allowed for each contested motion.

Since recoverable fees are so low, there are a number of exceptions. Two are

provided by the Tariff itself. Article 15 thus allows for a ‘special honorarium’ in an

‘important’ case. … .

62

The second model is the traditional common law model, which prevails in some

provinces outside of Ontario. Here there is a tariff of costs or fees, as in Quebec,

which bears a closer relationship to market amounts, and the costs order made

by the court will be followed by taxation or verification of precise items before an

assessor, a Master or a taxing officer. Depending on the frequency of revision of

the Tariff, the recoverable costs here will be significant. They may be made more

significant if the presiding judge orders not simply ‘party and party’ costs, as they

are traditionally known, but ‘solicitor client’ costs which are still higher. Party and

party costs are usually estimated at 50-60% of lawyers’ actual fees; solicitor-

client costs will cover up to 90% of such fees. There is even a further category of

‘solicitor-own client’ fees which requires full compensation of the opposing side’s

counsel. The type of award varies on the presiding judge’s appreciation of the

conduct of the litigation. Solicitor-client costs are generally awarded only in cases

of ‘scandalous’ or ‘reprehensible’ conduct on behalf of a party.

The final model is that of Ontario, which has recently abandoned the idea of a

tariff or ‘Grill’ of costs in favour of the presiding judge ruling on costs, generally

after submissions by the parties on the complexity of the case, time actually

spent, hourly rates and other factors. The assessment may be made on a ‘partial

indemnity’, ‘substantial indemnity’ or ‘full indemnity’ basis, which largely

corresponds to the prior distinction between party and party costs, solicitor-client

costs, and solicitor-own client costs. Here a global amount will be fixed, though a

judge may also order a ‘line-by-line’ assessment to be undertaken by a taxing

officer. Costs here may be very substantial and the deterrent effect of the

common law costs rule is fully evident.

In all three models, costs may be awarded personally against counsel for their

conduct of the action. These are known colloquially as ‘Torquemada’ costs and

they have been awarded. In some provinces such as Nova Scotia, they may be

awarded for ‘undue delay, neglect or other default’ (N.S. RCP 63.15(2). The most

intimidating costs order, for counsel, is for costs payable personally by counsel

on a full indemnity basis and forthwith. The disciplinary authority of the court is

thus exercisable on a regular basis in the course of litigation and the costs order

is usually an integral part of the judgment, though in a large and complex case

may be the object of a special hearing and order. The above discussion relates

to the shifting of costs and fees between the parties. It is also the case that the

fees owed by a client to his own counsel is subject to some form of control other

than through normal litigation. In the common law provinces there is a procedure

of ‘taxation’ or assessment of counsel fees, which is available to either client or

counsel on simple motion within a case or on its completion. The assessment

officer or taxation Master bases his fee award on a range of criteria which include

market rates for counsel of similar standing and expertise, time spent on the

case, importance of the case, success in the case, and so on. Case law thus

develops which is the origin of the notion of ‘solicitor-client’ costs, used when a

costs order is made on this basis, in order to substantially compensate a party for

their costs. In Quebec there is no procedure for taxation of fees by a court officer

but the Quebec Bar offers an arbitration programme under which fee disputes

may be resolved by arbitration, a reflection of the traditional jurisdiction of the

Batonnier in France to resolve fee disputes.

…

63

VII. Examples.

1. Costs and fees of litigation vary according to the type of court. In Small Claims

Courts the court costs are low and lawyers may be prohibited (as in Quebec) or

very rare (as in the common law provinces). A claimant in Quebec Small Claims

Court pays a court fee varying from $69 to $157 dollars according to the amount

claimed (from $.01 to $7000). Similar amounts are payable in the common law

provinces. Small Claims Courts appear to be effective and are widely used.

A claim beyond the jurisdiction of a Small Claims court may be brought in an

intermediate court, such as the Quebec Court in Quebec, or in the Superior Court

of first instance of the province. The procedure is largely the same in both cases

though some provinces have now initiated Simplified Procedure Rules for cases

under $100,000, which has the effect of severely limiting, or even eliminating,

discovery. This reduces lawyer fees considerably but is dependent on the

province and the extent to which procedure is simplified. A recent survey of fees

charged by lawyers, based on responses given by lawyers, gave as the lawyer’s

fee for one party for a two day trial in Ontario (with no indication of the amount in

question) a minimum of $18,738 and a maximum of $90,404, with an average of

$45,477. For both parties combined this would yield fees of:

Minimum: $37,476

Maximum: $180,808

Average: $90,954.

The significant factor appears therefore to be the length of trial as opposed to the

amount in question, and the amounts indicated above would indicate a daily

lawyer’s fee to each party of approximately $22,738, this including preparation

time but not disbursements, court costs or expert fees.

2. In addition to the above fees for a losing plaintiff’s own lawyer, costs payable

to the other side would also depend not on the amount in question so much as

the duration of the trial. For a trial of two days duration, as above, a partial

indemnity costs award in Ontario (at 60% of the average of fees charged, not

including court costs, disbursement or expert fees) would add a further $27,286

to the plaintiff’s overall bill, for a total bill of the two day trial of $45,477 (own

lawyer’s fee) + $27,286 (costs to winning defendant) = $72,763. This would

increase substantially if there was considerable use of experts. In Quebec the

costs award might be as low as $1000, yielding a total bill, again excluding court

costs, disbursements and expert fees, of $46, 477.

3. The calculations above at 2. are the same for a losing defendant.

…

[120] Ergo, judges in civil litigation proceedings will usually only order the losing party to

pay a portion of the winning party’s legal bill. This partial cost-shifting, as has

been suggested, increases access to the legal system because it allows winning

64

parties to be indemnified for their litigation costs somewhat without dealing a

crippling costs setback to the losing party. The basis of this cost-shifting from the

losing party to the winning party in a civil lawsuit is often referred to as “party and

party” costs (now referred to as “partial indemnity” costs in Ontario). Furthermore,

where it is warranted the judge may decide that a party should be indemnified for

court and legal costs on a “solicitor and client” costs basis, in which the losing

party in the litigation is ordered to pay a substantial part of the legal bill of the

winning party. Hence, “solicitor and client” costs (now referred to as “substantial

indemnity” costs in Ontario) can be used to sanction a party or lawyer who has

acted egregiously in the litigation.

[121] Furthermore, an award of costs on an elevated scale is justified in only very

narrow circumstances, such as where an offer to settle is engaged or where the

losing party has engaged in behaviour worthy of sanction: Davies v. Clarington

(Municipality) (2009), 100 O.R. (3d) 66 (Ont. C.A.), at para. 28. Hence,

“substantial indemnity” costs are normally resorted to when the court wishes to

express its disapproval of the conduct of a party to the litigation. On the other

hand, to justify the highest scale of “full indemnity” costs, a party’s conduct would

have to be especially egregious. Egregious conduct that could justify “full

indemnity” costs would be for example: where a party moves funds out of the

country in an effort to place them out of reach of the other party or where a party

has fabricated evidence.

(b) Statute Law

(i) Courts of Justice Act

[122] Under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, it is expressly

provided that subject to the provisions of an Act or rules of court, the costs of and

incidental to a proceeding or a step in a proceeding are in the discretion of the

court, and the court may determine by whom and to what extent the costs shall be

paid [emphasis is mine below]:

Costs

131(1) Subject to the provisions of an Act or rules of court, the costs of and

incidental to a proceeding or a step in a proceeding are in the

discretion of the court, and the court may determine by whom and to

what extent the costs shall be paid.

65

Crown costs

(2) In a proceeding to which Her Majesty is a party, costs awarded to

Her Majesty shall not be disallowed or reduced on assessment

merely because they relate to a lawyer who is a salaried officer of

the Crown, and costs recovered on behalf of Her Majesty shall be

paid into the Consolidated Revenue Fund.

(ii) Rules Of Civil Procedure

[123] Furthermore, in Ontario, under the Rules Of Civil Procedure (under Courts of

Justice Act, R.S.O. 1990, c. C.43), R.R.O. 1990, Reg. 194, costs may now be

awarded under 3 bases or categories: (1) partial indemnity (50%), (2) substantial

indemnity (80%), and (3) full indemnity (100%). Cost awards were generally

awarded on a 50% indemnity basis, but courts could also award 80% to 100% of

the winning party’s costs in the litigation where there is egregious or reprehensible

misconduct engaged by the losing party in the litigation, such as where the losing

party adds delay and costs to the proceedings, is less than forthright with

documentary disclosure, repeatedly lies under oath, fraudulently creates

documents and/or attempts to perpetrate a fraud on the winning party and the

court [emphasis is mine below]:

DEFINITIONS

1.03(1) In these rules, unless the context requires otherwise,

…

“partial indemnity costs” mean costs awarded in accordance with Part I

of Tariff A, and “on a partial indemnity basis” has a corresponding

meaning; (“dépens d’indemnisation partielle”)

…

“substantial indemnity costs” mean costs awarded in an amount that is

1.5 times what would otherwise be awarded in accordance with Part

I of Tariff A, and “on a substantial indemnity basis” has a

corresponding meaning; (“dépens d’indemnisation substantielle”)

INTERPRETATION

GENERAL PRINCIPLE

1.04(1) These rules shall be liberally construed to secure the just, most expeditious

and least expensive determination of every civil proceeding on its merits.

Proportionality

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(1.1) In applying these rules, the court shall make orders and give directions that

are proportionate to the importance and complexity of the issues, and to the

amount involved, in the proceeding.

Matters Not Provided For

(2) Where matters are not provided for in these rules, the practice shall be

determined by analogy to them.

(3) REVOKED: O. Reg. 231/13, s. 2.

“Party and Party” Costs

(4) If a statute, regulation or other document refers to party and party costs,

these rules apply as if the reference were to partial indemnity costs.

“Solicitor and Client” Costs

(5) If a statute, regulation or other document refers to solicitor and client costs,

these rules apply as if the reference were to substantial indemnity costs.

…

COSTS SANCTIONS FOR IMPROPER USE OF RULE

20.06 The court may fix and order payment of the costs of a motion for summary

judgment by a party on a substantial indemnity basis if,

(a) the party acted unreasonably by making or responding to the

motion; or

(b) the party acted in bad faith for the purpose of delay.

…

[124] Furthermore, Rule 57 of the Rules Of Civil Procedure sets out the factors which a

court may consider in its discretion to award costs, which include: (1) the result in

the proceeding; (2) any offer to settle or to contribute made in writing; (3) the

principle of indemnity, including, where applicable, the experience of the lawyer for

the party entitled to the costs as well as the rates charged and the hours spent by

that lawyer; (4) the amount of costs that an unsuccessful party could reasonably

expect to pay in relation to the step in the proceeding for which costs are being

fixed; (5) the amount claimed and the amount recovered in the proceeding; (6) the

apportionment of liability; (7) the complexity of the proceeding; (8) the importance

of the issues; (9) conduct of any party that tended to shorten or to lengthen

unnecessarily the duration of the proceeding; (10) whether any step in the

proceeding was improper, vexatious or unnecessary, or taken through negligence,

mistake or excessive caution; (11) a party’s denial of or refusal to admit anything

that should have been admitted; (12) whether it is appropriate to award any costs

67

or more than one set of costs where a party commenced separate proceedings for

claims that should have been made in one proceeding, or in defending a

proceeding separated unnecessarily from another party in the same interest or

defended by a different lawyer; and (13) any other matter relevant to the question

of costs [emphasis is mine below]:

RULE 57 COSTS OF PROCEEDINGS

GENERAL PRINCIPLES

Factors in Discretion

57.01(1) In exercising its discretion under section 131 of the Courts of Justice

Act to award costs, the court may consider, in addition to the result in

the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the

experience of the lawyer for the party entitled to the costs as

well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably

expect to pay in relation to the step in the proceeding for which

costs are being fixed;

(a) the amount claimed and the amount recovered in the

proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen

unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have

been admitted;

(h) whether it is appropriate to award any costs or more than one

set of costs where a party,

(i) commenced separate proceedings for claims that should

have been made in one proceeding, or

68

(ii) in defending a proceeding separated unnecessarily from

another party in the same interest or defended by a different

lawyer; and

(i)

any other matter relevant to the question of costs.

Costs Against Successful Party

(2) The fact that a party is successful in a proceeding or a step in a

proceeding does not prevent the court from awarding costs against the

party in a proper case.

Fixing Costs: Tariffs

(3) When the court awards costs, it shall fix them in accordance with

subrule (1) and the Tariffs.

Assessment in Exceptional Cases

(3.1) Despite subrule (3), in an exceptional case the court may refer costs

for assessment under Rule 58.

Authority of Court

(4) Nothing in this rule or rules 57.02 to 57.07 affects the authority of the

court under section 131 of the Courts of Justice Act,

(a) to award or refuse costs in respect of a particular issue or part of

a proceeding;

(b) to award a percentage of assessed costs or award assessed

costs up to or from a particular stage of a proceeding;

(c) to award all or part of the costs on a substantial indemnity basis;

(d) to award costs in an amount that represents full indemnity; or

(e) to award costs to a party acting in person.

Bill of Costs

(5) After a trial, the hearing of a motion that disposes of a proceeding or

the hearing of an application, a party who is awarded costs shall serve

a bill of costs (Form 57A) on the other parties and shall file it, with

proof of service.

Costs Outline

69

(6) Unless the parties have agreed on the costs that it would be

appropriate to award for a step in a proceeding, every party who

intends to seek costs for that step shall give to every other party

involved in the same step, and bring to the hearing, a costs outline

(Form 57B) not exceeding three pages in length.

Process for Fixing Costs

(7) The court shall devise and adopt the simplest, least expensive and

most expeditious process for fixing costs and, without limiting the

generality of the foregoing, costs may be fixed after receiving written

submissions, without the attendance of the parties.

[125] Furthermore, Tariff A of the Rules Of Civil Procedure establishes the lawyers’ fees

and what type of disbursements that are allowable under rules 57.01 and 58.05.

Specifically, Tariff A provides that the fee for any step in a proceeding authorized

by the Rules of Civil Procedure and the counsel fee for motions, applications,

trials, references and appeals shall be determined in accordance with section 131

of the Courts of Justice Act and the factors set out in subrule 57.01(1) [emphasis is

mine below]:

TARIFF A

LAWYERS’ FEES AND DISBURSEMENTS ALLOWABLE UNDER RULES

57.01 AND 58.05

PART I — FEES

The fee for any step in a proceeding authorized by the Rules of Civil Procedure

and the counsel fee for motions, applications, trials, references and appeals shall

be determined in accordance with section 131 of the Courts of Justice Act and

the factors set out in subrule 57.01 (1).

Where students-at-law or law clerks have provided services of a nature that the

Law Society of Ontario authorizes them to provide, fees for those services may

be allowed.

PART II — DISBURSEMENTS

21. Attendance money actually paid to a witness who is entitled to attendance

money, to be calculated as follows:

1. Attendance allowance for each day of necessary attendance: $50.

2. Travel allowance, where the hearing or examination is held,

(a) in a city or town in which the witness resides, $3.00 for each

day of necessary attendance;

70

(b) within 300 kilometres of where the witness resides, 24¢ a

kilometre each way between his or her residence and the

place of hearing or examination;

(c) more than 300 kilometres from where the witness resides,

the minimum return air fare plus 24¢ a kilometre each way

from his or her residence to the airport and from the airport

to the place of hearing or examination.

3. Overnight accommodation and meal allowance, where the witness

resides elsewhere than the place of hearing or examination and is

required to remain overnight, for each overnight stay: $75.

22. Fees or expenses actually paid to a court, authorized court transcriptionist,

official examiner or sheriff under the regulations under the Administration

of Justice Act.

23. For service or attempted service of a document,

(a) in Ontario, the amount actually paid, not exceeding the fee

payable to a sheriff under the regulations under the

Administration of Justice Act;

(b) outside Ontario, a reasonable amount;

(c) that was ordered to be served by publication, a reasonable

amount.

23.1 Fees actually paid to a mediator in accordance with Ontario Regulation

451/98 made under the Administration of Justice Act.

23.2 Fees actually paid to a mediator in accordance with Ontario Regulation

291/99 made under the Administration of Justice Act.

24. For an examination and transcript of evidence taken on the examination,

the amount actually paid, not exceeding the fee payable to an official

examiner under the regulations under the Administration of Justice Act.

25. For the preparation of a plan, model, videotape, film or photograph

reasonably necessary for the conduct of the proceeding, a reasonable

amount.

26. For experts’ reports that were supplied to the other parties as required by

the Evidence Act or these rules and that were reasonably necessary for

the conduct of the proceeding, a reasonable amount.

27. The cost of the investigation and report of the Official Guardian.

28. For an expert who gives opinion evidence at the hearing or whose

attendance was reasonably necessary at the hearing, a reasonable

71

amount not exceeding $350 a day, subject to increase in the discretion of

the assessment officer.

29. For an interpreter for services at the hearing or on an examination, a

reasonable amount not exceeding $100 a day, subject to increase in the

discretion of the assessment officer.

29.1 Where ordered by the presiding judge or officer, for translation into English

or French of a document that has been filed, a reasonable amount.

30. Where ordered by the presiding judge or officer, such travelling and

accommodation expenses incurred by a party as, in the discretion of the

assessment officer, appear reasonable.

31. For copies of any documents or authorities prepared for or by a party for

the use of the court and supplied to the opposite party, a reasonable

amount.

32. For copies of records, appeal books and compendiums, and factums, a

reasonable amount.

33. The cost of certified copies of documents such as orders, birth, marriage,

and death certificates, abstracts of title, deeds, mortgages and other

registered documents where reasonably necessary for the conduct of the

proceeding.

34. The cost of transcripts of proceedings of courts or tribunals,

(a)

where required by the court or the rules; or

(b)

where reasonably necessary for the conduct of the

proceeding.

35. Where ordered by the presiding judge or officer, for any other

disbursement reasonably necessary for the conduct of the proceeding, a

reasonable amount in the discretion of the assessment officer.

36. Harmonized sales tax (HST) actually paid or payable on the lawyer’s fees

and disbursements allowable under rule 58.05.

(c) Costs Awarded in Civil Law Proceedings Must Be

Reasonable

[126] The Court of Appeal for Ontario in Zesta Engineering Ltd. v. Cloutier, [2002] O.J.

No. 4495, at para. 4, held that the approach for awarding costs in a civil law

proceeding was to be based on the principle of reasonableness rather than being

based on any exact measure of the actual costs incurred by the successful litigant

[emphasis is mine below]:

72

As indicated in our reasons for decision, the appellant is entitled to its costs of

the proceedings in this court. Having considered the submissions of the parties,

we hereby fix those costs on a partial indemnity basis at $36,000, all inclusive.

Our reasons can be briefly stated. We have considered the bills of costs

submitted by the appellant. However, we make no specific finding with respect to

the amount of time spent or the rates charged by counsel. In our view, the costs

award should reflect more what the court views as a fair and reasonable amount

that should be paid by the unsuccessful parties rather than any exact measure of

the actual costs to the successful litigant. We note however that we have

discounted the costs related to the investigation of the new evidence as it is our

view that those costs should not form part of the costs award for the proceedings

in this court. We note further that the costs are awarded in respect of the motion

to introduce fresh evidence only. We do not find it appropriate to make an award

of costs in respect of the appeal since it was not heard, or disposed of, on the

merits. Nonetheless, in arriving at a reasonable quantum, we have taken into

consideration the fact that the motion to introduce fresh evidence could not have

been brought by the appellant independently of its appeal.

(d) Criteria For Reasonable Costs Awarded in Civil Law

Proceedings

[127] Furthermore, in Cohen v. Kealey & Blaney, [1985] O.J. No. 160, the Court of

Appeal for Ontario recognized that in respect to the imposition of costs in a civil

law proceeding the Taxing Officer had properly considered and listed the

considerations normally applicable to the taxation of a solicitor's account, namely,

 the time expended by the solicitor,

 the legal complexity of the matters to be dealt with,

 the degree of responsibility assumed by the solicitor,

 the monetary value of the matters in issue,

 the importance of the matter to the client,

 the degree of skill and competence demonstrated by the solicitor,

 the results achieved,

 the ability of the client to pay, and

 the client's expectation as to the amount of the fee

[emphasis is mine below]:

It is conceded that the understanding upon which the solicitor was retained fixed

the maximum fee, inclusive of disbursements, that the solicitor was entitled to

receive for his services through to trial at $50,000. The range of fees originally

quoted by the solicitor was a wide one, between $10,000 and $50,000 including

disbursements. The Taxing Officer properly listed the considerations normally

applicable to the taxation of a solicitor's account, namely, the time expended by

the solicitor, the legal complexity of the matters to be dealt with, the degree of

responsibility assumed by the solicitor, the monetary value of the matters in

issue, the importance of the matter to the client, the degree of skill and

competence demonstrated by the solicitor, the results achieved, the ability of the

73

client to pay and the client's expectation as to the amount of the fee. He did not,

however, appear to fully appreciate the significance of the understanding reached

by the parties on the basis of which the solicitor was hired or attach sufficient

weight to that understanding. He treated the understanding as an estimate rather

than a firm understanding as to the maximum fee he was entitled to charge

depending on the success of the proceedings. Even in the case of an estimate, a

solicitor is obliged to advise the client without delay of any developments that are

likely to increase the fee beyond the estimate and that was not done in this case.

[128] Ergo, when costs are awarded in a civil litigation proceeding in Ontario, it is at the

discretion of the court. It is also treated as an indemnification and is usually paid

by the losing party in the proceeding to the winning party in the proceeding.

However, the quantum of the cost award is not normally a full indemnification of

the actual costs that have been incurred by the winning party, but the award is

usually only a partial indemnification of those costs and which still have to be

reasonable in the circumstances. On the other hand, in exceptional cases a court

in Ontario is legally permitted to award costs that would be a substantial

indemnification, or a full indemnification of the costs incurred by the winning party

where there has been egregious conduct by the losing party, or by one of the

parties, in the proceedings. And, although the principle of indemnification is the

paramount consideration in the determination of costs awarded in civil

proceedings, it is not the only consideration, since other important functions may

be served by a costs order, such as, encouraging settlement, preventing frivolous

or vexatious litigation, and discouraging unnecessary steps.

(2) COSTS IN ADMINISTRATIVE LAW PROCEEDINGS

(a) Costs In Administrative Proceedings Under The

Common Law

[129] Costs that may be awarded in administrative proceedings did not fall under the

common law, but were a creature of statute.

(b) Costs In Administrative Proceedings Under Statute

Law

[130] An order for costs in respect to administrative proceedings, such as in professional

disciplinary proceedings, are governed by the statute or regulation which governs

the administrative proceeding. For the 3 professional accounting statutes in

Ontario that are applicable to Joginder Singh Gujral, there are statutory provisions

contained in those 3 statutes that permit the administrative tribunal, or disciplinary

panel or committee, to order a member of one of those 3 professional accounting

bodies of Ontario, who is found to have committed professional misconduct or

contravened provisions of the accounting statute at a disciplinary proceeding, to

pay all or part of the costs incurred by the professional accounting body in the

74

investigation of or in the administrative disciplinary hearing of the member’s

professional misconduct. However, the amount or quantum of the costs that the

member of the professional accounting body can be ordered to pay to the

professional body must be in the circumstances “reasonable”.

(i) Certified Management Accountants Act, 2010

[131] Under s. 38 of the Certified Management Accountants Act, 2010, S.O. 2010, c. 6,

Sched. B, the Discipline Committee of the Certified Management Accountants of

Ontario may order a “member” of the Certified Management Accountants of

Ontario to pay some or all of the costs reasonably incurred by them in the

investigation, prosecution, hearing and, if applicable, appeal of a matter that is the

subject of the disciplinary proceeding of a member and any other costs specified

by the by-laws [emphasis is mine below]:

Costs

38(1) The discipline committee may award the costs of a proceeding before it

under section 35 against the member who or firm that is the subject of the

proceeding, in accordance with its procedural rules.

Same

(2) The appeal committee may award the costs of a proceeding before it

under section 37 against the member who or firm that is the subject of the

proceeding, in accordance with its procedural rules.

Inclusion of Corporation’s costs

(3) The costs ordered under subsection (1) or (2) may include costs incurred

by the Corporation arising from the investigation, prosecution, hearing

and, if applicable, appeal of the matter that is the subject of the

proceeding and any other costs specified by the by-laws.

Application

(4) This section applies despite section 17.1 of the Statutory Powers

Procedure Act. 2010.

(ii) Chartered Accountants of Ontario Act, 2010

[132] Furthermore, under s. 38 of the Chartered Accountants of Ontario Act, 2010, S.O.

2010, c. 6, Sched. C, the Discipline Committee of the Institute of Chartered

Accountants of Ontario may order a “member” of the Institute of Chartered

Accountants of Ontario to pay some or all of the costs reasonably incurred by

them in the investigation, prosecution, hearing and, if applicable, appeal of a

matter that is the subject of the disciplinary proceeding of a member and any other

costs specified by the by-laws [emphasis is mine below]:

75

Costs

38(1) The discipline committee may award the costs of a proceeding before it

under section 35 or 36 against the member who or firm that is the subject

of the proceeding, in accordance with its procedural rules.

Same

(2) An appeal committee may award the costs of a proceeding before it

under section 37 against the member who or firm that is the subject of the

proceeding, in accordance with its procedural rules.

Inclusion of Institute’s costs

(3) The costs ordered under subsection (1) or (2) may include costs incurred

by the Institute arising from the investigation, including any further

investigation ordered under subsection 35 (4), prosecution, hearing and, if

applicable, appeal of the matter that is the subject of the proceeding.

The Chartered Accountants Act, 1956

(4) An order for costs made under The Chartered Accountants Act, 1956 is

deemed to have been validly made if the order was made,

(a) on or after December 6, 2000;

(b) by a committee established by by-laws made under clause 8 (1) (g) or

(h) of that Act; and

(c) in respect of a proceeding referred to in subclause 8 (1) (g) (ii) of that

Act or an appeal of that proceeding.

Same

(5) The references in subsection (4) to The Chartered Accountants Act, 1956

are to that Act as it read immediately before its repeal.

Application

(6) This section applies despite section 17.1 of the Statutory Powers

Procedure Act.

(iii) Chartered Professional Accountants of

Ontario Act, 2017

[133] Under s. 38 of the Chartered Professional Accountants of Ontario Act, 2017, S.O.

2017, c. 8, Sched. 3, the Discipline Committee of CPA Ontario or a predecessor

body may order a “member” of CPA Ontario or a predecessor body of CPA Ontario

to pay some or all of the costs reasonably incurred by them in the investigation,

76

prosecution, hearing and, if applicable, appeal of a matter that is the subject of the

disciplinary proceeding of a member or firm and any other costs specified by the

by-laws [emphasis is mine below]:

Costs

38(1) The discipline committee may award the costs of a proceeding before it

under section 35 or 36 in accordance with its procedural rules, but only

against the member or firm that is the subject of the proceeding.

Same

(2) An appeal committee may award the costs of a proceeding before it

under section 37 in accordance with its procedural rules, but only against

the member or firm that is the subject of the proceeding.

Inclusion of expenses

(3) The costs ordered under subsection (1) or (2) may include expenses

incurred by CPA Ontario or a predecessor body as a result of the

investigation, including any investigation ordered under subsection 35 (4),

prosecution, hearing and, if applicable, appeal of the matter that is the

subject of the proceeding.

Application

(4) This section applies despite section 17.1 of the Statutory Powers

Procedure Act.

(iv) The purpose for a professional regulatory

body to order costs in administrative

disciplinarian hearings

[134] In Pearlman v. Manitoba Law Society Judicial Committee, [1991] S.C.J. No. 66, at

paras. 49 and 52 to 54, Iacobucci J. for the Supreme Court of Canada held that s.

52(4) of the Manitoba Law Society Act, R.S.M. 1987, c. L100, the statutory

provision which allows the Manitoba Law Society to recoup its costs in a

disciplinary proceeding, does not violate the principles of fundamental justice, and

as such, Iacobucci J. concluded that there was not a violation of s. 7 of the

Charter.

In addition, Iacobucci J. reasoned that the legislative provision

authorizing the recoupment of costs in disciplinary proceedings does not, in and of

itself, put into doubt the impartiality of the disciplinary proceedings. Furthermore,

Iacobucci J. held that the costs which stand to be recouped under s. 52(4) are in

no sense "profits" or "gains", but are a direct reimbursement for expenses

previously incurred in an investigation that had uncovered legitimate grounds for

the imposition of sanctions against a member of the Manitoba Law Society.

Moreover, Iacobucci J. had recognized that the Manitoba Legislature had also

decided it was appropriate that, in addition to the punitive sanctions that might be

77

imposed, the lawyer who is found guilty of professional misconduct may also have

to bear the costs of the investigation into his or her own questionable conduct

[emphasis is mine below]:

First, it is important to remember that the costs which stand to be recouped under

s. 52(4) are in no sense "profits" or "gains". These costs are a direct

reimbursement for expenses previously incurred in an investigation which, ex

hypothesi, has uncovered legitimate grounds for the imposition of sanctions. The

Legislature considered it appropriate that, in addition to the sanctions that might

be imposed, the lawyer found guilty of misconduct may also have to bear the

costs of the investigation into his or her own questionable conduct.

…

This very issue was considered in the context of another self-governing

organization, the New Brunswick Veterinary Medical Association. In McAllister v.

New Brunswick Veterinary Medical Association (1986), 71 N.B.R. (2d) 109

(Q.B.), Stevenson J. was called upon to consider, inter alia, allegations of

institutional bias that stemmed from the order of the Association's council that the

appellant be reinstated "upon paying all costs of the hearing". Having considered

the relevant jurisprudence, including the Bateman case that was found to be

inapplicable by Jewers J. at first instance of the case at bar, Stevenson J.

concluded (at p. 117):

I cannot accept that an apprehension of bias or interest is a corollary to any

authority of a governing body to assess costs. If the governing body or a

disciplinary tribunal is given such authority by the legislation creating it, it must

surely be a rebuttable presumption that the authority will be exercised fairly and

judiciously. [Emphasis added.]

Without endorsing the conclusion regarding the "rebuttable presumption of

fairness", I am of the view, as was Stevenson J., that a costs provision like s.

52(4) in the instant appeal does not itself give rise to a reasonable apprehension

of bias in the context of self-governing professional organizations. Section 52(4)

of the Act, without more, does not create an apprehension of bias in a reasonably

well-informed person that would taint the disciplinary proceedings of the Law

Society.

It is worth mentioning that, if there were to be an unfair or otherwise abusive

order of costs pursuant to s. 52(4), Pearlman would have the full panoply of

administrative remedies open to him. All I am deciding is that the legislative

provision authorizing the recoupment of costs involved in disciplinary

proceedings does not, in and of itself, put into doubt the impartiality of those

proceedings.

Conclusion

Accordingly, I am of the view that s. 52(4) of the Act does not violate the

principles of fundamental justice. As such, there is no violation of s. 7 of the

Charter …

78

[135] Furthermore, in Abrametz v. The Law Society of Saskatchewan, [2018] S.J. No.

217, at paras. 43 and 44, the Saskatchewan Court of Appeal had held that the

purpose for ordering costs to be paid by a member of a professional body, who is

found to have committed professional misconduct in a disciplinarian hearing, is not

for punishment, since a costs award is not intended to be a punitive measure to

supplement whatever penalties the panel imposes, but it is a balancing measure

that reflects the privilege of membership in a professional organization.

Specifically, the Saskatchewan Court of Appeal had reasoned that the focus for

awarding costs is not to indemnify the opposing party, but for the sanctioned

member to bear the costs of the disciplinary proceedings as an aspect of the

burden of being a member of the professional organization, and in order not to visit

those expenses on the collective membership by ensuring that the other members

of the profession do not bear the full costs of that member’s misconduct [emphasis

is mine below]:

Costs are at the discretion of the Discipline Committee, with discretion to be

exercised judicially (Brand v College of Physicians and Surgeons of

Saskatchewan (1990), 72 DLR (4th) 446 () (Sask CA) [Brand]). Even

though the Act expressly authorizes the discipline body to impose an order

requiring the disciplined member to pay costs of the inquiry, the legislation does

not prescribe any principles to guide the exercise of that discretion. For that, I

turn to the jurisprudence and other authorities.

Before turning to the factors that have been considered relevant by other courts, I

begin with the theory or purpose underlying costs in a professional disciplinary

setting. As explained in “Trends in Costs Awards before Administrative Tribunals”

(2014) 27 Can J Admin L & Prac 259 (WL) by Robert A. Centa and Denise

Cooney [“Trends in Costs”], the purpose of costs in this context differs from the

approach taken in the courts. The focus is not to indemnify the opposing party

but for the sanctioned member to bear the costs of disciplinary proceedings as

an aspect of the burden of being a member (at 263), and not to visit those

expenses on the collective membership:

[W]hile the costs awarded by a professional discipline body will partially

compensate the opposing party for its expenses, the purpose is not for the

member to indemnify personally an adverse party for its expenses. Rather, the

disciplined member is ensuring that the other members of the profession do not

bear the full costs of her misconduct. The costs award thus reflects one of the

burdens of being a member of a profession and represents a corresponding

theory regarding the allocation of costs in a proceeding. (See also Groia v Law

Society of Upper Canada, 2016 ONCA 471 at para 179, 131 OR (3d) 1, leave to

SCC granted [Groia].)

[136] Moreover, in Hoff v. Alberta Pharmaceutical Assn., [1994] A.J. No. 218 (Alta.

Q.B.), at para. 25, the Alberta court had recognized that disciplinary proceedings

against a member of the Alberta Pharmaceutical Association, whose members

are in a self-governing profession, must be conducted by the Association as part of

its public mandate to assure to the public that its members are competent and

ethical pharmacists, and that it is this membership in a self-governing profession,

79

which is a privilege, that justifies the costs of an investigation or disciplinary

proceeding about a member whose conduct is at issue being properly borne by

that member who is found to be wanting [emphasis is mine below]:

3. The imposition of an obligation on the appellant to pay the respondent's

costs of the proceedings is substantial - something in excess of $22,000.00 -

and the appellant asks that this sum be cancelled or reduced. Of this amount

legal fees account for about one-half. The respondent's out of pocket

expenses for transcripts, travelling costs, etc. make up the balance. As a

member of the pharmacy profession the appellant enjoys many privileges.

One of them is being part of a self-governing profession. Proceedings like this

must be conducted by the respondent association as part of its public

mandate to assure to the public competent and ethical pharmacists. Its costs

in so doing may properly be borne by the member whose conduct is at issue

and has been found wanting. Appellant's request for cancellation or reduction

is accordingly refused.

[137] Also, in Allen v. Law Society of New Brunswick, [2017] N.B.J. No. 190, at para. 28

to 41, the New Brunswick Court of Appeal held that the purpose of administrative

disciplinary hearings for a member of a professional association is not to punish

the member for the member’s professional misconduct, but to ensure public

protection. Furthermore, the New Brunswick Court of Appeal reasoned that the

factors frequently weighed in assessing the seriousness of the lawyer's

professional misconduct, includes the extent of injury, the lawyer's

blameworthiness, and the penalties that have been imposed previously for similar

misconduct. In addition, the New Brunswick Court of Appeal held that in

assessing each of those factors, the Discipline Hearing panel must focus on the

offence rather than on the offender, and to also consider the desirability of parity

"and" proportionality in the determination of sanctions, as well as the need for

deterrence.

But more importantly, the New Brunswick Court of Appeal

emphasized that even though the disciplinary panel’s focus should be on the

offence rather than on the offender, the disciplinary panel must also consider all

aggravating and mitigating factors, including taking into consideration the personal

situation of the member being disciplined in arriving at the appropriate sanction.

However, as to whether an “order for costs” is a punitive sanction in the context of

the legislation, the New Brunswick Court of Appeal held that the disciplinary

panel's treatment of an order of costs as a non-punitive measure to which the

"general" rule could be applied would not be legally impermissible nor labeled

unreasonable on that basis, since the statutory provision for awarding costs did not

require that the disciplinary panel in determining the appropriateness of an order of

costs had to resort the framework it had used and applied in determining the

punitive sanctions of a reprimand and a fine of $3000 in relation to the member’s

professional misconduct. The “general rule” that the New Brunswick Court of

Appeal had referred to, for a disciplinary panel to order costs to be paid by the

member who is found guilty of conduct deserving sanction, is the one where

reasonable costs which have arisen from the New Brunswick Law Society's

investigation of the complaint and the ensuing inquiry should be borne by the

80

member as a privilege of membership and not borne by the profession as a whole

[emphasis is mine below]:

As indicated, after finding the appellant guilty of conduct deserving sanction,

the panel chose to reprimand him and order he pay a fine of $3,000. The

panel viewed each of those measures as a "penalty", and found they were

appropriate upon consideration of the factors that commonly inform

determinations of that kind:

In order to determine the appropriate penalty, this Panel must embark on a

"[conscious] comparison" of the relevant factors with similar cases, lest

inconsistent results are reached: Stevens v. Law Society of Upper Canada

(1979) 55 O.R. (2d) 405 (Ont. S.C.).

The factors to be considered are enumerated in Law Society of British

Columbia v. Ogilvie [1999] L.S.D.D. No. 45, 1999 LSBC 17 as:

a. The nature and gravity of the conduct proven;

b. The age and experience of the respondent;

c. The previous character of the respondent, including details of prior

discipline;

d. The impact upon the victim;

e. The advantage gained, or to be gained, by the respondent;

f. The number of times the offending conduct occurred;

g. Whether the respondent acknowledged the misconduct and taken

steps to disclose and redress the wrong and the presence or absence

of other mitigating circumstances;

h. The possibility of remediating or rehabilitating the respondent;

[...]

[j]. The impact of the proposed penalty on the respondent;

[k]. The need for specific and general deterrence;

[l]. The need to ensure the public's confidence in the integrity of the

profession; and

[m]. The range of penalties imposed in similar cases.

As stated in numerous decisions, the purpose of these proceedings is not to

punish the Member. The purpose is to ensure public protection.

Citing Gavin Mackenzie's Lawyers and Ethics; Professional Responsibility and

Discipline (Carswell 1993), the Panel in the P.P. decision [Law Society of New

Brunswick v. P.P., 2008 NBLSB 2 ()] referred to above said:

81

Factors frequently weighed in assessing the seriousness of the lawyer's

misconduct include the extent of injury, the lawyer's blameworthiness, and the

penalties that have been imposed previously for similar misconduct. In

assessing each of these factors, the Discipline Hearing panel focuses on the

offense rather than the offender and considers the desirability of parity "and"

proportionality in sanctions and the need for deterrence. The panel also

considers an array of aggravating and mitigating factors, many of which are

relevant to the likelihood of recurrence. These aggravating and mitigating

factors include the lawyer's prior discipline record, the lawyer's reaction to the

discipline process, the restitution (if any) made by the lawyer, the length of time

the lawyer has been in practice, the lawyer's general character and the lawyer's

mental state. Alcoholism, drug addiction, stress caused by financial and

matrimonial difficulties, and mental illness are common factors in discipline

cases and are material to the assessment of penalty in cases where a causal

relationship exists between the lawyer's condition and the misconduct being

considered ...

Therefore, although the panel must focus on the offense rather than the

offender, it must also consider all aggravating and mitigating factors including

taking into consideration the personal situation of the member being

disciplined.

Applying the different factors found in Ogilvie above, we have before us two

serious breaches, although not as serious as offenses dealing with dishonesty

or misappropriation of funds. Mr. Allen has been practicing for over 55 years

without ever having been disciplined, and lawyers and the Courts have

recognized his expertise in the field.

The impact on the victim is difficult to assess. We have heard evidence that

she filed a civil action against many defendants and settled for an amount

which left her, after her legal expenses, with approximately $10,000 (She had

lost $25,000 in the transaction although it cannot be said for sure that the

result would have been any different were it not for the breaches to the Code

of Conduct). It is unknown whether the Member paid all or part of this

settlement.

Although there have been admissions of facts, for example, failing to produce

a proper Statement of Adjustment and report to his client, Mr. Allen never

admitted having acted in a manner deserving sanction and has never

apologized to the complainant or the law Society.

The Panel recognizes that this procedure has been very difficult on the

Member.

Mr. Allen has not gained any advantage other than his regular fees. There is

only one occurrence of the offending conduct.

Considering all these factors, the need for specific and general deterrence and

the similar cases, this Panel therefore makes the following order:

82

a. Pursuant to paragraph 60(1)a) of the Act, the Member is

reprimanded.

b. Pursuant to paragraph 60(1)b) of the Act, the Member shall pay,

within 60 days of this decision, a fine of $3,000. [paras. 18-28]

The panel then turned its attention to the issue of costs. In making its

determination on point, the panel did not apply the Ogilvie factors, as it did in

connection with the reprimand and the fine. Instead, and after observing the

appellant had been found guilty of both charges in the Notice of Complaint, the

panel applied the "general rule" by which reasonable costs arising from the

Law Society's investigation of the complaint and the ensuing inquiry should be

borne by the member found guilty of conduct deserving sanction, not the

profession as a whole. The panel relied upon Groia v. the Law Society of

Upper Canada, 2016 ONCA 471, [2016] O.J. No. 3094 (QL), at paragraph

234, leave to appeal granted [2016] S.C.C.A. No. 310, as authority for the

application of that framework. In the result, the panel determined the Law

Society was entitled to an order directing the appellant pay the costs claimed

in Exhibit 1 except, as mentioned, for the cost ($5,864.14) of the financial audit

of his practice:

There remains the question of costs. The general rule is that the reasonable

costs of investigating and conducting a disciplinary proceeding should not be

borne by the profession as a whole where a determination adverse to the

defending lawyer has been made. See Groia v. The Law Society of Upper

Canada, 2016 ONCA 471 (), at paragraph 234.

In cases where the lawyer was not found guilty of all charges, costs have

sometimes been reduced accordingly. See The Law Society of New Brunswick

v. Peters, 2013 NBLSB 6 (). Here, the Member has been found guilty of

both charges.

Although it is submitted for the Member that he should not be ordered to pay

any cost, there were no questions on the amount claimed except for the sum of

$5,864.14 paid to Grant Thornton for a practice audit. No explanation regarding

the reason for requesting an audit, under the circumstances, were provided to

the Panel.

The Law Society indicated that audits are not always requested in investigations

and that this particular audit found no irregularity.

Mr. Allen has not been charged with any breach of the Code of Conduct or of

the rules adopted under the Act regarding his trust account. The panel is

therefore not convinced that this disbursement was necessary for the

investigation or of conducting the disciplinary proceeding.

Except for this amount, the Panel finds no reason to depart from the general

rule.

The Law Society is therefore entitled to costs for an amount of $16,195.27, to

be paid on or before February 2, 2017. The Law Society has not asked for costs

for the sanction hearing. [paras. 29-35]

83

In Dr. Q. v. College of Physicians and Surgeons of British Columbia, 2003

SCC 19, [2003] 1 S.C.R. 226, Chief Justice McLachlin confirmed great

deference is owed by a reviewing court to a tribunal's selection of remedies or

administrative responses:

A statutory purpose that requires a tribunal to select from a range of remedial

choices or administrative responses, is concerned with the protection of the

public, engages policy issues, or involves the balancing of multiple sets of

interests or considerations will demand greater deference from a reviewing

court [ ... ] [para. 31]

Courts have only reluctantly interfered with the measures crafted by

professional bodies as responses to objectionable conduct by their members.

In Bouhamdani v. Association of Professional Engineers and Geoscientists of

New Brunswick, 2004 NBCA 84, 276 N.B.R. (2d) 341, Turnbull, J.A. identifies

the rationale behind that reluctance:

[...] courts are generally reluctant to vary any penalty imposed by a profession's

discipline committee. Such judicial deference is derived from the legislated

authorization of self-governance, and the consequent belief that the members of

that profession, because of their particular expertise, are the best judges of the

appropriate penalty for one of their peers. [para. 75]

In Law Society of New Brunswick v. Ryan, the Supreme Court of Canada ruled

this Court should only intervene if the contested panel decision, determination

or order "is shown to be unreasonable". A disposition may be labelled

"unreasonable" only if "no line of analysis within the given reasons [...] could

reasonably lead the tribunal from the evidence before it to the conclusion at

which it arrived. If any of the reasons that are sufficient to support the

conclusion are tenable in the sense that they can stand up to a somewhat

probing examination, then the decision will not be unreasonable and a

reviewing court must not interfere" (see Ryan, at paras. 42 and 55). In my

view, this unmistakably exacting standard applies to all dispositions, including

cost orders, prescribed by panels of the Discipline Committee.

The appellant submits the order of costs is unreasonable because it flows

from the application of the general rule described above, instead of the

pertinent Ogilvie factors. While acknowledging this general rule has been

recognized and applied in other provinces, the appellant argues it has no

traction in this jurisdiction because, unlike the situation elsewhere, an order of

costs, such as the one under appeal, is a sanction under the Act. This rather

odd equation would arise from: (1) s. 60(1)'s inclusion of costs orders in the

pool of measures commonly viewed as sanctions (reprimand, fine, suspension

and disbarment) and; (2) the Act's failure to invest panels with the power to

order the Law Society pay costs to a member found not guilty of conduct

deserving sanction. I respectfully reject this submission for the following

reasons.

First, and contrary to the appellant's understanding, panels do have the power

to order the Law Society pay costs to a respondent member in the event he or

she is found not guilty of conduct deserving sanction (see s. 60(3)). Second,

84

the appellant's submission overlooks what s. 60(1) states, and what it does not

state.

Indeed, by its very terms, s. 60(1) does no more than enunciate the measures

a panel of the Discipline Committee may prescribe following a finding of

conduct deserving sanction. Those measures include, but are not confined to

penalties or sanctions. On a plain reading of its wording, s. 60(1) does not

provide, explicitly or implicitly, that all measures listed in its sub-paragraphs

constitute sanctions; it merely sets out what a panel "may do" once it finds the

respondent member guilty of conduct deserving sanction. The French

version's reference to "choices" open to the panel is ambiguous and, in my

view, fails to tilt the interpretative scales, one way or the other.

Of the ordinary meanings ascribable to the term "sanction", only one has

application in the present context, and it is "a penalty [...] enacted to enforce

obedience to a law or rule" Oxford Canadian Dictionary, 2nd ed (Oxford

University Press: Toronto, 2006)). An order of costs under s. 60(1)(e), like the

one under appeal, is not captured by that meaning: the object of such an order

is restitutive, not punitive. In my view, the order of costs rendered in first

instance is no more a sanction or penalty than an order of restitution under s.

60(1)(d.1). Section 60(1)(f) is also telling: it confers on a panel the power to

make any "other order as in its opinion is necessary and appropriate in the

circumstances". There is no reason to interpret this omnibus provision in a

manner that would limit its scope to measures in the nature of penalties or

sanctions.

Here, the panel found the appellant guilty of both charges in the Notice of

Complaint. It described each charge as "serious". After giving due

consideration to the pertinent Ogilvie factors and as required under s. 59, the

panel imposed sanctions in accordance with s. 60, specifically subparagraphs

(a) (reprimand) and (b) (fine). Applying the general rule referenced

hereinabove, the panel then combined those sanctions with a non-punitive

measure, the order of costs under sub-paragraph (e). In my judgment, the

panel's treatment of an order of costs as a non-punitive measure to which the

"general" rule could be applied is not legally impermissible and cannot be

labeled unreasonable on that basis (see Lysons v. Alberta Land Surveyors'

Association, 2017 ABCA 7, [2017] A.J. No. 10 (QL), at paras. 12-13 and Bryan

Salte, The Law of Professional Regulation, (Markham, Ont.: LexisNexis, 2015)

at paras. 8.12 and 8.14). I would go further: the panel's approach reflects a

rationally defensible policy choice and its use would be appropriate in other

cases, like the present one, where the essence of each charge is proven and

as a result, the respondent member is found guilty of all charges. Where the

case features a mix of proven and unproven charges, a corresponding

allocation of the costs might be warranted (see Hasan v. College of Physicians

and Surgeons (N.B.) (1994), 152 N.B.R. (2d) 230, [1994] N.B.J. No. 389 (C.A.)

(QL), per Ryan, J.A.). In relatively rare cases, a suitably calibrated

apportionment of costs might also be appropriate where, despite all charges

being proven, the more serious particulars, as pleaded, have been rejected.

On the panel's findings, that is clearly not the case here.

In coming to the conclusion that s. 60(1) did not require the panel determine

85

the appropriateness of an order of costs by resorting to the framework it

applied for the reprimand and the fine, I have not overlooked that multi-faceted

provision's one-word heading: "Sanctions". While s. 16 of the Interpretation

Act, R.S.N.B. 1973, c, I- 13, states headings are "inserted for convenience of

reference only", there is authority for the proposition that headings may be

relied upon for interpretative purposes, even where the wording of the

provision itself is not ambiguous (see Ruth Sullivan, Statutory Interpretation,

3rd ed (Toronto: Irwin Law, 2016) at 160, 161 and 167).

The drafters' choice of "Sanctions" as the heading for s. 60 is neither

surprising nor entirely ill-suited; after all, the bulk of the measures listed in s.

60(1) is comprised of sanctions (reprimand, fine, suspension and disbarment).

A one-word heading will rarely purport to capture the full reach of a multi-

faceted provision. The key question is whether s. 60(1)'s heading reflects an

intention that all of the measures it identifies, including the non-punitive ones,

be viewed as penalties or sanctions. In my view, it does not. A "non-punitive

sanction" surely qualifies as an oxymoron and the drafters could not have

intended that illogical result, a consequence of morphing non-punitive

measures into punitive ones.

One final observation. Even if the appellant's interpretation of s. 60(1) had

carried the day, so that orders of costs under s. 60(1)(e) would stand to be

included, like reprimands, fines, suspensions and disbarments, in the basket

of imposable sanctions, I would still conclude the panel's approach has not

been shown to be unreasonable. There is nothing in s. 60(1) that requires the

application of the Ogilvie factors to every measure enunciated in its sub-

paragraphs. Indeed, no feature of the Act's pertinent provisions precludes a

panel from resorting to the general rule applied in first instance to determine

the appropriateness of an order of costs under s. 60(1)(e).

IV. Conclusion

As more fully appears from the preceding text, the panel's order under s.

60(1)(e) of the Law Society Act, 1996 requiring the appellant pay the sum of

$16,195.27 towards the costs incurred by the Law Society has not been

shown to be unreasonable. It is for this reason that I joined my colleagues in

dismissing the appeal from the bench. I would wrap up the proceedings by

ordering the appellant pay costs on appeal of $2,500.

[138] In sum, when a disciplinary panel or committee of a professional organization

orders a member of that professional body to pay the reasonable costs that have

been incurred by the professional body in the investigation and inquiry in an

administrative disciplinary proceeding of the member’s conduct that has been

found wanting, those costs are not considered to be part of the array of punitive

sanctions that could be imposed by the professional organization on the member

for that misconduct, but is considered to be a “balancing measure” that reflects the

privilege of membership in the professional organization, which have been given

powers of self-government by the legislature of a province. Accordingly, it has

been held that those costs should be properly borne by the member as a privilege

86

of membership in that professional organization, and that such costs should not be

borne by the profession as a whole.

(v) Reasonableness is also required for the

determination of costs in administrative

disciplinarian hearings

[139] In Jaswal v. Newfoundland Medical Board, [1996] N.J. No. 50 (Nfld. S.C. (Trial

Div.), at para. 50, the Newfoundland Supreme Court held that despite whatever

standard of deference there ought to be with respect to decisions of professional

discipline tribunals on substantive matters, that deference ought not extend to

issues of payment of expenses. The Newfoundland Supreme Court also

recognized that awarding costs of and incidental to the investigation is

discretionary and must be exercised judicially, and that the amount of the costs

awarded in an administrative disciplinary proceeding must be reasonable in the

circumstances [emphasis is mine below]:

In my view, whatever standard of deference there ought to be with respect to

decisions of professional discipline tribunals on substantive matters, that

deference ought not to extend to issues of payment of expenses. The Board, as

the agency which has incurred the expenses, has a pecuniary interest in the

outcome of any decision as to whether or not costs can be recovered from an

offending physician. Whilst the Board has the undoubted statutory authority to

make such an order, and having such power in itself does not taint the decision-

maker with bias (see, Pearlman) the resulting decision ought nevertheless to be

subject to careful scrutiny to ensure that the decision-maker in fact acted

appropriately in a particular case. Indeed, the Brand case had previously been

the subject of discussion in the Saskatchewan Court of Appeal, reported at 72

D.L.R. (4th) 446 where it was stated:

"The awarding of compensation [ie. "the costs of and incidental to the

investigation"] is discretionary and must be exercised judicially. The

reasonableness of the assessment or awarding of compensation to the

investigating body is, therefore, subject to judicial review. The right of appeal and

the right to examine the reasonableness of the exercise of that discretion is

expressly wide when the consequence is that someone is or can be deprived of

his rights, in this case, his right to practice medicine... The standard of review is

whether the assessment is reasonable, and not whether there has been clear

error."

[140] Furthermore, in Abrametz v. The Law Society of Saskatchewan, [2018] S.J. No.

217, at para. 45, the Saskatchewan Court of Appeal did acknowledge that the

principle of reasonableness applies when a discipline committee in an

administrative proceeding orders a member of a professional organization to pay

costs that have been incurred by that professional organization in the investigation

and inquiry into that member’s impugned conduct.

Furthermore, the

Saskatchewan Court of Appeal in adopting the “burden of membership” principle

that underpins a costs order also emphasized that the application of this principle

87

does not necessarily mean a full indemnification of the professional organization’s

costs. But more importantly, the Saskatchewan Court of Appeal emphasized that

an order for costs should not be so prohibitive that it would prevent a member of a

professional body from defending his or her right to practice in the chosen

profession, or from being able to dispute the misconduct charges [emphasis is

mine below]:

That said, the burden of membership principle that underpins a costs order

does not necessarily mean full indemnification. Costs should not be so

prohibitive as to prevent a member from defending his or her right to practice

in the chosen profession, or from being able to dispute misconduct charges.

As explained by Centa and Cooney, this consideration requires the

disciplinary body to strike a careful balance:

At the same time, in a discipline hearing, the individual’s right to practise as a

professional is at stake. The costs of defending one’s ability to practise one’s

chosen profession should not be so prohibitive as to prevent individuals from

defending themselves. If there is a finding of misconduct and the individual

loses the right to practise, a costs award in addition to the revocation of the

licence can be devastating. Indeed, it can affect the ability to recover from the

discipline and return to practice, if permitted. In this way, a costs award is not

intended to be a punitive measure to supplement whatever penalties the panel

imposes but a balancing measure that reflects the privilege of membership in a

professional organization. (Emphasis added, “Trends in Costs” at 262) (See

also Chuang v Royal College of Dental Surgeons of Ontario, 211 OAC 281 (Div

Ct) [Chuang].)

[141] Moreover, in Lambert v. College of Physicians and Surgeons (1992), 100 Sask. R.

203, [1992] S.J. No. 311, the Saskatchewan Court of Appeal had commented that

even though the chamber judge had found that the costs ordered to be paid by the

member had not reached an excessive level, the Court of Appeal also recognized

that it is possible that the costs in an individual case or as a matter of routine

practice of the College of Physicians and Surgeons might become so excessive

and exorbitant that they could deny the doctor a fair chance to dispute any

suggestions of professional misconduct [emphasis is mine below]:

The final matter is a question of penalty, and more specifically the award of costs.

The chamber judge, after analyzing them, concluded them to be reasonable and

in the circumstances, no error in his analysis having been shown, we are not

prepared to interfere. We merely point out that counsel for the appellant noted

that in Barik v. College of Physicians and Surgeons (unreported, 31 January

1992, Sask. C.A.) this Court had commented that the large component normally

constituted by the fees of the College's lawyers should be subject to taxation.

Counsel for the appellant indicated he was likely to make this request after this

appeal in the event that he were not successful, and this Court urges upon the

College what it said in Barik, that the taxation of these bills by the physician is

appropriate. The College, which is in the solicitor/client relationship and able to

ask for taxation, if it has no responsibility for the bill, is unlikely to do so. The

physician, not having a solicitor/client relationship should have some recourse to

88

assure that the bill is in all respects reasonable, once he has been ordered to pay

it. We further comment that while the chamber judge found here that the costs

had not reached an excessive level, it is possible that in absolute terms the costs

might, in an individual case or as a matter of routine practice of the College,

become so excessive and exorbitant that they do deny to the doctor a fair chance

to dispute any suggestions of professional misconduct.

[142] In addition, the Nova Scotia Court of Appeal in Creager v. Provincial Dental Board

of Nova Scotia, [2005] N.S.J. No. 32, at paras. 95 and 96, also agreed with the

Saskatchewan Court of Appeal that the reasonableness standard permits a

consideration of whether the quantum of costs would be so excessive that it would

deny the accused member of a professional organization a fair opportunity to

dispute the allegations of professional misconduct in an administrative disciplinary

proceeding or so as to effectively bar the member from practice [emphasis is mine

below]:

I agree with the comments of the Saskatchewan Court of Appeal. The

reasonableness standard of review permits consideration of whether the quantum

of costs would be so excessive as to deny the accused person a fair opportunity

to dispute the allegations of professional misconduct.

The reasonableness standard might also involve consideration of whether the

costs award is so exorbitant that it would effectively bar the complainant from

practice, contrary to the Committee's express dispositive sanction.

[143] Also, in Roberts v. College of Dental Surgeons of British Columbia (1999), 63

B.C.L.R. (3d) 116, [1999] B.C.J. No. 357, at paras. 54, 58 and 59, the British

Columbia Court of Appeal affirmed that as a principle of general application, it is

for the prosecution to make its case and that it is not in the public interest to lessen

that responsibility by holding over the head of the professional whose livelihood is

in jeopardy, the additional threat of “special costs” [special costs in British

Columbia under the Supreme Court Civil Rules refer to an award of between 75%

and 100% of the successful litigant’s actual legal expense and are usually

awarded where the losing party caused an increase in legal expenses by behaving

badly during the litigation or trial or has made serious but unfounded allegations,

such as fraud or breach of fiduciary duty that are ultimately unproven] [emphasis is

mine below]:

Special costs, in place of solicitor and client costs, are provided in the Supreme

Court Rules to allow a higher measure of indemnity than the party and party

tariff. Although it was not argued before us I think it desirable to consider whether

the Panel could have imposed 75% of the College's legal expenses on the

appellant as special costs. Such costs may be imposed by a court only where the

conduct of the party in question was reprehensible in the sense that word has

been considered by the courts in the context of costs.

…

89

In this circumstance I consider the observations of the Ontario Court of Appeal in

Mortimer v. Cameron (1994), 17 O.R. (3d) 1 at 22 (Ont.C.A.); leave to S.C.C.,

[1994] S.C.C.A. No. 150, refused; 19 O.R. xvi, apposite:

The courts have a wide discretion with respect to costs but there have always

been certain principles guiding the exercise of that discretion. The first of those

principles is that costs are usually paid by the unsuccessful party on a party and

party scale. This court addressed the issue in Foulis v. Robinson (1978), 21

O.R. (2d) 769. That was a case where, according to the trial judge, the

defendant and third party dragged "all these plaintiffs through a three day

Supreme Court of Ontario trial when there [was] really no defence ..." (p. 770).

He found, in those circumstances, that the plaintiffs should have complete

indemnity for costs and accordingly awarded costs on a solicitor and client

scale. This court, in allowing an appeal from that order and substituting party

and party costs, made clear that it is only in the rare and exceptional case that

costs are awarded on a solicitor and client scale rather than on a party and party

scale. Speaking for the court, Dubin J.A., at p. 776, made two comments

germane to the present case:

Under our system defendants are entitled to put the plaintiff to the proof, and there

is no obligation to settle an action.

[...]

They [the defendant and third party] were not compelled to admit liability, nor

settle the damages. There was no suggestion that the defendant and third party

were using the judicial process to harass the plaintiffs, nor could it be said that the

conduct of the defendant and third party constituted an abuse of process.

The law respecting solicitor-and-client costs is admirably reviewed in M. Orkin,

The Law of Costs, 2nd Ed. (Aurora, Ont. (1993), pp. 2-91 to 2-92:

Costs on the solicitor-and-client scale should not be awarded unless special

grounds exist to justify a departure from the usual scale.

Such orders are not to be made by way of damages, or on the view that the

award of damages should reach the plaintiff intact, and are inappropriate where

there has been no wrongdoing.

An award of costs on the solicitor-and-client scale it has been said, is ordered

only in rare and exceptional cases to mark the court's disapproval of the conduct

of a party in the litigation. The principle guiding the decision to award solicitor-

and-client costs has been enunciated thus:

"[S]olicitor-and-client costs should not be awarded unless there is some form of

reprehensible conduct, either in the circumstances giving rise to the cause of

action, or in the proceedings, which makes such costs desirable as a form of

chastisement."

(Footnotes omitted.)

I do not refer to this case as an authority binding on this Court in respect to costs

nor do I suggest that Orkin's text on The Law of Costs reflects in all

circumstances the practice in this jurisdiction. I do so to illustrate a principle of

general application: it is for the prosecution to make its case and it is not in the

public interest to lessen that responsibility by holding over the head of the

professional whose livelihood is in jeopardy the additional threat of special costs.

90

[144] Furthermore, in Groia v. Law Society of Upper Canada, [2016] O.J. No. 3094, at

para. 234, the Court of Appeal for Ontario confirmed that the principle purpose for

the general rule of requiring the reasonable costs, which have been incurred by

the professional body in investigating and conducting a disciplinary administrative

proceeding and where there has been a determination made that is adverse to the

defending lawyer, to be paid by the lawyer is that the costs should not be borne by

the profession as a whole [emphasis is mine below]:

I disagree. No error in principle in the challenged costs award has been

demonstrated, nor has any reason to depart from the general rule that the

reasonable costs of investigating and conducting a disciplinary proceeding should

not be borne by the profession as a whole where a determination adverse to the

defending lawyer has been made.

[145] Moreover, in Groia v. Law Society of Upper Canada, [2018] S.C.J. No. 27 (S.C.C.),

Côté J. held at para. 173 that the Supreme Court of Canada rightly expects that

lawyers will push the boundaries of the law, where appropriate, in advancing the

interests of their clients. However, Côté J. noted that this does not give lawyers

free licence to knowingly advance frivolous or completely baseless positions.

Moreover, Côté J. also emphasized that courts must be cognizant or be sensitive

to the potential chilling effect on legal advocacy when assessing the jurisprudential

context in which the alleged professional misconduct had occurred [emphasis is

mine below]:

I also agree with Moldaver J. (at paras. 143-47) that the uncertain state of the law

regarding the manner in which abuse of process allegations should be raised

weighs against a finding of professional misconduct. We rightly expect that

lawyers will push the boundaries of the law, where appropriate, in advancing the

interests of their clients. The law would stagnate in the absence of creative and

novel legal argumentation. Although this does not give lawyers free licence to

knowingly advance frivolous or completely baseless positions, we must be

sensitive to the potential chilling effect on legal advocacy when assessing the

jurisprudential context in which alleged misconduct occurs. Here, I am prepared

to err on the side of accepting that there was some procedural uncertainty --

which the Appeal Panel did not account for -- that contextualizes the frequency of

Mr. Groia's allegations. This, too, undermines the correctness of the Appeal

Panel's ultimate conclusion.

[146] Additionally, in Sazant v. College of Physicians and Surgeons of Ontario, [2011]

O.J. No. 192, at paras. 282 to 285, the Ontario Divisional Court held that an order

for costs against the member doctor at the disciplinarian hearing was appropriate

based on the following factors: (1) the repeated nature of the doctor’s misconduct;

(2) the number of victims and the nature of the misconduct; (3) together with the

manner in which the doctor testified. On the issue of the quantum of costs, which

was for an amount of $95,812, the Divisional Court had been concerned that the

doctor who had his licence revoked by the Discipline Committee would be unable

91

to earn any significant income. However, because there had been nothing on the

record in respect to the doctor’s financial circumstances the Divisional Court had

found it impossible for that reason to consider a variation of the cost award

[emphasis is mine below]:

In an appropriate case, the College is entitled seek costs against a member,

pursuant to s. 53(1) of the Code.

In our opinion, the Committee considered the relevant factors such as the

repeated nature of the appellant's misconduct, the number of victims and the

nature of the misconduct, together with the manner in which the appellant

testified in arriving at its conclusion that this was an appropriate case in which to

order costs. That decision was reasonable.

In considering the quantum of costs, the Committee had regard to its Rules of

Procedure, which establishes a per diem level for costs of $3,650.00. The

Committee reduced the sum sought by the College by about 25% to take into

account the time spent in receiving evidence of a complainant on a charge that

the Committee found not to have been made out. We cannot say that the sum

awarded was unreasonable given the length and complexity of the hearing.

Of some concern to us is that the sum awarded, $95,812.00, is an amount which

the appellant may find impossible to pay. We are aware that at his age of

approximately 75 years the revocation of his licence will mean that, for all

practical purposes, the appellant will be unable to earn any significant income.

Unfortunately, there is nothing on the record before us to indicate the financial

circumstances of the appellant, other than a reference to him having carried on a

vibrant and busy practice. Absent any evidence to that effect, it is impossible for

us to consider a variation of the cost award. This is something only the College

could consider, if the appellant were to bring a properly founded application

before it for some leniency in the payment of the costs award, such as the

opportunity to pay the award in installments

[147] Ergo, the important principle in the determination of costs for administrative

disciplinary proceedings, which has been established by the various Courts of

Appeal throughout Canada, is that the costs award cannot be excessive or

exorbitant since excessive or exorbitant costs being ordered against the member

of a regulated profession could deny or deprive that member from having a fair

opportunity to dispute the allegations of professional misconduct in that

administrative disciplinary proceeding or it could effectively bar the member from

being able to continue to practice in the profession. In short, if costs are to be

awarded against the member of a professional organization in an administrative

disciplinary proceeding then the quantum of the costs awarded against the

member must be reasonable in the circumstances.

(vi) Criteria for awarding “reasonable costs” for

administrative disciplinarian hearings

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[148] In his textbook entitled, The Law of Professional Regulation, (Markham:

LexisNexis, 2015), at p. 262, Bryan Salte sets out the following non-exhaustive

criteria that can be used by a discipline committee of a professional organization in

an administrative disciplinary hearing as an aid in determining the reasonable

costs that a member found to have engaged in professional misconduct could be

ordered to pay to the professional organization:

1. Whether the costs are so large that the costs are punitive;

2. Whether the costs are so large that they are likely to deter a member from

raising a legitimate defence;

3. The member’s financial status;

4. A member has an obligation to provide financial information to support a

contention that a cost award will impose an undue hardship;

5. The regulatory body should provide full supporting material for the amount of

costs claimed;

6. The regulatory body should provide the individual with an opportunity to

respond to the information and respond to the total quantum of costs which

may be ordered before costs are imposed;

7. The regulatory body should provide reasons for reaching the decision that it

made;

8. If the decision is made in British Columbia, it appears that the cost award will

have to be based upon the tariff of costs that is awarded in court actions.

[149] Moreover, the Saskatchewan Court of Appeal in Abrametz v. The Law Society of

Saskatchewan, [2018] S.J. No. 217, at paras. 46 to 51, adopted Bryan Salte’s non-

exhaustive list of criteria for discipline committees to use in the determination of

the quantum of the reasonable costs that a member, who is found to have

committed misconduct, may be ordered to pay to the professional body, as well as

other criteria such as consideration of the other sanctions that have been imposed

on the member and the expenses associated with those other sanctions and

consideration of prorating the costs incurred between charges where the member

is found guilty and charges where the member is found not guilty [emphasis is

mine below]:

Apart from these broad principles, courts have taken a variety of factors into

account in undertaking a reasonableness review of a costs award. The factors

that emerge from case authority, as identified by Bryan Salte in The Law of

Professional Regulation, (Markham: LexisNexis, 2015) at 262 [Professional

Regulation], are the following:

93

1. Whether the costs are so large that the costs are punitive;

2. Whether the costs are so large that they are likely to deter a

member from raising a legitimate defence;

3. The member’s financial status;

4. A member has an obligation to provide financial information to

support a contention that a cost award will impose an undue

hardship;

5. The regulatory body should provide full supporting material for

the amount of costs claimed;

6. The regulatory body should provide the individual with an

opportunity to respond to the information and respond to the

total quantum of costs which may be ordered before costs are

imposed;

7. The regulatory body should provide reasons for reaching the

decision that it made;

8. If the decision is made in British Columbia, it appears that the

cost award will have to be based upon the tariff of costs that is

awarded in court actions.

A more concise statement of factors can be found in the Nova Scotia Court of

Appeal decision of Hills v Nova Scotia (Provincial Dental Board), 2009 NSCA 13,

307 DLR (4th) 341 [Hills]. There, the Court reduced the salient considerations to

the following:

[61]

… the Committee referred to the Regulation prescribing the sanctions

which it could impose, summarized the expenses … and identified and

addressed the following factors:

a. The balance between the effect of a cost award on the Appellant and

the need for the Provincial Dental Board to be able to effectively

administer the disciplinary process;

b. The respective degrees of success of the parties;

c. Costs awards ought not to be punitive;

d.

The other sanctions imposed and the expenses associated

therewith;

e. The relative time and expense of the investigation and hearing

associated with each of the charges and in particular those on which

guilt were entered and those where the Appellant was found not

guilty.

(Emphasis added)

94

There is considerable attraction to the factors identified in Hills, not only for

review purposes but for the Discipline Committee’s use in making the initial

order. The application of the Hills factors on a go-forward basis would serve the

twofold purpose of allowing a member to understand why the costs award was

made, and allow for an appellate court to undertake a reasonableness review in

a meaningful manner. That said, this list of factors should not be construed as

exhaustive. The proper exercise of discretionary authority necessarily requires a

discipline body to take into account any other matter that is relevant to the unique

circumstances of the case before it.

One final general observation about the “mixed success” factor identified in Hills

must be made at the outset. While this principle is generally understood to refer

to a result where some, but not all of the charges are proven, how courts and

regulatory bodies have applied this principle to appropriately quantify costs has

not been uniform across Canada: “There does not appear to be a consistent

approach by regulatory bodies in determining how to assess costs where the

success has been divided, nor does there appear to be a consistent approach by

the courts in suggesting which approach is appropriate” (Professional Regulation

at 268). Some regulatory bodies and courts have applied a strict mathematical

calculation (Fadelle v Nova Scotia (College of Pharmacists), 2013 NSCA 26

[Fadelle]; or Kaburda v British Columbia (College of Dental Surgeons), 2002

BCSC 870, [2002] BCTC 870). Another approach has been to determine what

the total costs would have been if the member had only been charged with the

particulars ultimately proven (Huerto v College of Physicians and Surgeons of

Saskatchewan, 2004 SKQB 360, 253 Sask R 1 [Huerto]; Hills). Yet another

approach has been to consider a variety of factors (e.g., the relative importance

of the charges dismissed compared to those proven) in determining what portion

of the costs should be borne by the member (K.C. v College of Physical

Therapists (Alberta), 1999 ABCA 253, [1999] 12 WWR 339 [K.C.]).

Several Saskatchewan decisions have dealt with costs in a mixed success

situation. In Brand, the physician under investigation was found guilty of

professional misconduct and ordered to pay costs of $12,177.13 for a three day

hearing. Speaking for the Court, Vancise J.A. characterized the costs award as

discretionary in nature, stating that it “must be exercised judicially” (at para 24).

Applying the reasonableness standard to the full indemnification award, the Court

held “$12,177.13 for a hearing which lasted a portion of three days (a greater

portion of which was taken up in connection with an offence which was not

proven) is unreasonable” (at para 25, emphasis added). The matter was remitted

for reassessment.

In Huerto, the Court of Queen’s Bench addressed the reasonableness of a costs

award in a situation where Dr. Huerto was charged with 31 offences but

convicted of only 14. Total costs for the overall investigation and disciplinary

hearing amounted to $205,608.78. Given the divided success, the Court

deducted the costs that would not have been incurred had the charges not

proven not been laid, and thus reduced the total amount to $172,600.

95

[150] In addition, the Newfoundland Supreme Court in Jaswal v. Newfoundland Medical

Board, [1996] N.J. No. 50 (Nfld.S.C. (Trial Div.), at paras. 51, 52 and 61, also set

out a non-exhaustive list of 6 factors for the discipline committee or panel of the

Newfoundland Medical Board to consider before it decides to impose an order for

payment of expenses, which includes: (1) the degree of success, if any, of the

physician in resisting any or all of the charges; (2) the necessity for calling all of

the witnesses who gave evidence or for incurring other expenses associated with

the hearing; (3) whether the persons presenting the case against the doctor could

reasonably have anticipated the result based upon what they knew prior to the

hearing; (4) whether those presenting the case against the doctor could

reasonably have anticipated the lack of need for certain witnesses or incurring

certain expenses in light of what they knew prior to the hearing; (5) whether the

doctor cooperated with respect to the investigation and offered to facilitate proof by

admissions, etc.; (6) the financial circumstances of the doctor and the degree to

which his financial position has already been affected by other aspects of any

penalty that has been imposed. [emphasis is mine below]:

It is necessary, therefore, to determine the factors appropriate to the proper

exercise of the judicial discretion to make an order for payment or partial

payment of expenses. In my view, based on the submissions of counsel, the

following is a non-exhaustive list of factors which ought to be considered in a

given case before deciding to impose an order for payment of expenses:

1. the degree of success, if any, of the physician in resisting any or all

of the charges

2. the necessity for calling all of the witnesses who gave evidence or

for incurring other expenses associated with the hearing

3. whether the persons presenting the case against the doctor could

reasonably have anticipated the result based upon what they knew

prior to the hearing

4. whether those presenting the case against the doctor could

reasonably have anticipated the lack of need for certain witnesses

or incurring certain expenses in light of what they knew prior to the

hearing

5. whether the doctor cooperated with respect to the investigation

and offered to facilitate proof by admissions, etc.

6. the financial circumstances of the doctor and the degree to which

his financial position has already been affected by other aspects of

any penalty that has been imposed.

In examining the scope of the inquiry and the manner and focus of the

investigation the Court, or the Board, ought to be careful not to apply, with the

benefit of hindsight, too high a standard for the imposition of costs. The decision

to call witnesses and to take a certain approach is made before the disposition in

96

the case is known. The test is therefore not one of necessity viewed in the light of

the resulting decision but one of reasonableness viewed from the perspective of

the persons investigating and preparing the case for hearing. Thus, in the context

of costs awards in litigation in the Supreme Court, it has been held that the fact

that evidence from a witness may not ultimately have to be relied upon or used

by the Court in reaching its decision does not in itself disentitle a party to recover

costs associated therewith if the engagement of the expert viewed from the

perspective of someone preparing for trial was nevertheless reasonable in the

circumstances. See, Kolonel v. Kenny (1992), 98 Nfld. & P.E.I.R. 1 (NFSC, TD).

A similar position ought to apply to proceedings before the Board.

…

Taking all of the above factors into account, I do not consider that it was

reasonable to order that Dr. Jaswal pay all of the costs of the investigation and

hearing up a maximum of $20,000. The more appropriate disposition would have

been to order that he pay a proportion of all of the costs involved, taking into

account his degree of success at the hearing, the nature and scope of the

hearing, his degree of cooperation in facilitating proof at the inquiry and the

financial impact on him. Taking those factors into consideration, I believe that a

fair and reasonable disposition of the costs issue would have been to order that

he pay 40 percent of all of the reasonable expenses incurred by the Board in

conducting the inquiry.

[151] Additionally, in Abrametz v. The Law Society of Saskatchewan, [2018] S.J. No.

217, the Saskatchewan Court of Appeal, at paras. 43 to 51, held that the focus on

costs in a professional disciplinary setting is not to indemnify the opposing party

but for the sanctioned member to bear the costs of disciplinary proceedings as an

aspect of the burden of being a member, and not to visit those expenses on the

collective membership. However, the Saskatchewan Court of Appeal also held

that the burden of membership principle that underpins a costs order does not

necessarily mean full indemnification; rather, costs should not be so prohibitive as

to prevent a member from defending his or her right to practice in the chosen

profession, or from being able to dispute misconduct charges [emphasis is mine

below]:

Costs are at the discretion of the Discipline Committee, with discretion to be

exercised judicially (Brand v College of Physicians and Surgeons of

Saskatchewan (1990), 72 DLR (4th) 446 () (Sask CA) [Brand]). Even

though the Act expressly authorizes the discipline body to impose an order

requiring the disciplined member to pay costs of the inquiry, the legislation does

not prescribe any principles to guide the exercise of that discretion. For that, I

turn to the jurisprudence and other authorities.

Before turning to the factors that have been considered relevant by other courts, I

begin with the theory or purpose underlying costs in a professional disciplinary

setting. As explained in “Trends in Costs Awards before Administrative Tribunals”

(2014) 27 Can J Admin L & Prac 259 (WL) by Robert A. Centa and Denise

Cooney [“Trends in Costs”], the purpose of costs in this context differs from the

approach taken in the courts. The focus is not to indemnify the opposing party

97