Introduction: The Bill C-45 Initiative
Effective corporate compliance to prevent regulatory risk requires a foundation of legal understanding. While corporate accountability and criminal liability has been a recent focus of legislation, law enforcement and regulatory agencies, the modern legislative framework for holding corporations criminally responsible for the wrongdoing was enacted over a decade ago with the passing of Bill C-45 – An Act to Amend the Criminal Code (Criminal Liability of Organizations).
These amendments to the Criminal Code (“Code”) expanded the range of individuals whose acts and omissions could result in corporate criminal liability from those who were “directing minds” to the current standard descried in the Code as “senior officers”. Somewhat surprisingly, there have been few cases interpreting the new Code provisions and considering the scope of individuals that may be “senior officers” for the purposes of the Code. The limited jurisprudence does affirm the increased risk of criminal liability for corporations arising from the Bill C-45 amendments. Decisions from the Courts of Appeal for Ontario and Quebec indicate that courts will interpret the term “senior officer” broadly, encompassing certain lower level managers as well as those employees who manage an important aspect of the corporation’s business.
Replacement of “Directing Mind” with Statutory Formula
The historical and political impetus for Bill C-45 was the 1992 Westray mine disaster, where 26 miners were killed in Pictou County, Nova Scotia. No individuals or corporate employer was ever convicted of a criminal or occupational health and safety regulatory offence. In response to a public inquiry, failed legal proceedings and union lobbying, Bill C-45 was passed to amend the Code to facilitate the conviction of organizations for criminal offences.
Under the former identification theory, a corporation faced criminal liability for the criminal acts of a “directing mind” of the corporation. At common law, the directing mind was defined as a person with:
authority to design and supervise the implementation of corporate policy rather than simply to carry out such policy. In other words, the courts must consider who has been left with the decision making power in a relevant sphere of corporate activity.
The amendments were designed to remedy the inherent limitations of the attached to the “directing mind” paradigm and to better align the Code with the reality of modern, large corporations. As a result, Bill C-45 introduced the defined term “senior officer”. Under the Code, “senior officer” is:
- a representative who plays an important role in the establishment of an organization’s policies; or
- is responsible for managing an important aspect of the organization’s activities; and,
- in the case of a body corporate, includes a director, its chief executive officer and its chief financial officer.
In what can only be described as a harsh sentence, with scathing reasons, Justice MacDonnell sentenced Vadim Kazenelson to 3 ½ years in prison, for each of five convictions of criminal negligence, relating to the Metron Construction Swing Stage collapse, to be served consecutively. With the January 11, 2016 sentencing, the tragic saga of a quadruple fatality on a construction site on Christmas Eve 2009 has finally come to legal conclusion. On June 26, 2015, following a trial, Kazenelson had been found guilty of all five counts of criminal negligence for which he had been charged in relation to the cause of the incident.
The trial judge said in the Reasons for Sentence: “ … a significant term of imprisonment is necessary to reflect the terrible consequences of the offences and to make it unequivocally clear that persons in positions of authority in potentially dangerous workplaces have a serious obligation to take all reasonable steps to ensure that those who arrive for work in the morning will make it safely back to their homes and families … “
In August 2009, Metron was retained to repair concrete balconies on two high-rise apartments. As was its normal practice, Metron hired a project manager and a site supervisor to oversee the project. Mr. Kazenelson was retained by Metron as its project manager. Mr. Kazenelson owned and operated his own construction company and according to reports, came highly recommended as an experienced and qualified project manager.
The tragic saga of a quadruple fatality on a construction site on Christmas Eve 2009 has finally come to legal conclusion with the criminal conviction and sentencing of the project manager overseeing the project. On June 26, 2015, following a trial, Vadim Kazenelson (Mr. Kazenelson), the project manager overseeing the project for Metron Construction Company (Metron), was found guilty of five counts of criminal negligence in relation to the accident. Mr. Kazenelson has had sentencing submissions completed before the trial judge.
The Crown argued that a penitentiary sentence of 4 to 5 years was appropriate, and that the sentence should be at the upper range. The Defence argued that the appropriate sentence in this case was 12 months to 2 years of incarceration. The Defence argued that 4 years imprisonment overshoots the mark for deterrence purposes, and that there is a real risk of sentencing imbalance, given that imprisonment is a blunt instrument. At the conclusion of submissions, Justice MacDonnell commented that there is no sentencing precedent that could easily be applied to this case, and as a result, sentencing would require much more thought. Justice MacDonnell did note that it is common ground that incarceration should be imposed; the only question remaining is the length of incarceration. Justice MacDonnell adjourned the sentencing decision until January 11, 2016.