R. v. Cordoba, 2016 ONCJ 13

Her Majesty The Queen in Right of Ontario v. Cordoba [Indexed as: R. v. Cordoba] Ontario Reports Ontario Court of Justice, Quon J.P. January 8, 2016 128 O.R. (3d) 594 | 2016 ONCJ 13 Case

Summary Criminal law — Provincial offences — Operating vehicle without insurance — Defendant charged as owner with operatingvehicle on highway without insurance contrary to s. 2(1)(

a) of Compulsory Automobile Insurance Act — One-person corporationowned by defendant being registered owner of vehicle — Evidence not establishing that defendant had exclusive possession ofvehicle or that it was under his exclusive dominion and control — Crown adducing no evidence that defendant was director,officer or controlling mind of corporation — No reason existing to pierce corporate veil as there was no evidence that defendantused corporation to avoid compliance with s. 2(1) of Act — Defendant not "owner" of vehicle and therefore not guilty of offence— Defendant not a party to offence committed by corporation — Compulsory Automobile Insurance Act, R.S.O. 1990, c.

C.25, s.2(1). The defendant was charged as an owner with operating a vehicle on a highway without insurance, contrary to s. 2(1) of the CompulsoryAutomobile Insurance Act. The registered owner of the vehicle was a one-person corporation owned by the defendant. Held, the defendant should be acquitted. The defendant was not the common law "owner" of the vehicle for the purposes of s. 2(1) of the Act. It could not be concluded that hehad the exclusive possession of the vehicle or that it was under his exclusive dominion and control.

As the defendant had admitted that hewas the owner of the corporation, it could be assumed that he was a shareholder. However, the Act does not contain a provision whichimputes penal liability to a shareholder, director, officer or agent of the corporation for the unlawful acts or omissions of the corporation.The defendant was not a party to the offence.

There was no evidence that he was a director, officer or agent for the corporation, and thathe had actually omitted to purchase or arrange for proper liability insurance coverage on the vehicle, or that he was the only individualassociated with the corporation who would have been ultimately responsible for purchasing or arranging for proper liability insurancecoverage. As there was no evidence that he was a director or officer of the corporation, it could not be concluded that he was thedirecting mind of the corporation.

Accordingly, it was not established that the defendant did anything or [page595] omitted to doanything to aid or abet the corporation in not having the vehicle properly insured. As a shareholder, the defendant did not have abeneficial interest in the vehicle such that he could be said to indirectly own the vehicle. There was no reason to pierce the corporate veilin the circumstances of this case.

There was no evidence that the defendant was using the corporation to avoid complying with s. 2(1) ofthe Act or that he had a history of using a corporation to register a motor vehicle in order to avoid legal and financial obligations. Honan v. Gerhold, (SCC), [1975] 2 S.C.R. 866, [1974] S.C.J. No. 131, 50 D.L.R. (3d) 582, 3 N.R. 81; Keizer v. Hanna(1975), (ON CA), 10 O.R. (2d) 597, [1975] O.J. No. 2519, 64 D.L.R. (3d) 193 (C.A.); Macaura v. Northern AssuranceCo., [1925] A.C. 619, [1925] All E.R. Rep. 51, 94 L.J.P.C. 154, 133 L.T. 152, 41 T.L.R. 447, 69 Sol. Jo. 777, 31 Com. Cas. 10 (H.L.); R.v.

Zwicker (1994), (ON CA), 17 O.R. (3d) 171, [1994] O.J. No. 197, 69 O.A.C. 169, 21 C.C.L.I. (2d) 171, [1994]I.L.R. Â1-3032 at 2723, 1 M.V.R. (3d) 1, 22 W.C.B. (2d) 469 (C.A.); Salomon v. Salomon & Co. Ltd., [1897] A.C. 22, [1895-1899] AllE.R. Rep. 33 (H.L.), consd Other cases referred to 642947 Ontario Ltd. v. Fleischer (2001), (ON CA), 56 O.R. (3d) 417, [2001] O.J. No. 4771, 209 D.L.R. (4th) 182,152 O.A.C. 313, 16 C.P.C. (5th) 1, 47 R.P.R. (3d) 191, 110 A.C.W.S. (3d) 568 (C.A.); Kosmopoulos v. Constitution Insurance Co. of

Canada, (SCC), [1987] 1 S.C.R. 2, [1987] S.C.J. No. 2, 34 D.L.R. (4th) 208, 74 N.R. 360, 21 O.A.C. 4, 36 B.L.R. 233,22 C.C.L.I. 296, [1987] I.L.R. Â1-2147 at 8297, J.E. 87-218, EYB 1987-68613, 3 A.C.W.S. (3d) 22; Olympia & York Developments Ltd.and City of Toronto (Re) (1980), (ON SC), 29 O.R. (2d) 353, [1980] O.J. No. 3672, 113 D.L.R. (3d) 695, 12M.P.L.R. 219, 4 A.C.W.S. (2d) 402 (Div. Ct.); R. v. Briscoe, [2010] 1 S.C.R. 411, [2010] S.C.J.

No. 13, 2010 SCC 13, EYB 2010-171953, 2010EXP-1249, J.E. 2010-680, 400 N.R. 216, 210 C.R.R. (2d) 150, 316 D.L.R. (4th) 577, 253 C.C.C. (3d) 140, 477 A.R. 86, 73C.R. (6th) 224, 22 Alta. L.R. (5th) 49, [2010] 6 W.W.R. 1, 87 W.C.B. (2d) 293; R. v. Isaac, (SCC), [1984] 1 S.C.R. 74,[1984] S.C.J. No. 5, 5 D.L.R. (4th) 193, 51 N.R. 308, 9 C.C.C. (3d) 289, 11 W.C.B. 317; R. v. Thatcher, (SCC), [1987]1 S.C.R. 652, [1987] S.C.J. No. 22, 39 D.L.R. (4th) 275, 75 N.R. 198, [1987] 4 W.W.R. 193, 57 Sask. R. 113, 32 C.C.C. (3d) 481, 57C.R. (3d) 97, 2 W.C.B. (2d) 314; R. v. Vu, [2012] 2 S.C.R. 411, [2012] S.C.J.

No. 40, 2012 SCC 40, 94 C.R. (6th) 246, 324 B.C.A.C. 40,433 N.R. 77, 2012EXP-2772, J.E. 2012-1460, EYB 2012-209478, 351 D.L.R. (4th) 1, 288 C.C.C. (3d) 405, 102 W.C.B. (2d) 694;Shoppers Drug Mart Inc. v. 6470360 Canada Inc. (c.o.b. Energyshop Consulting Inc./Powerhouse Energy Management Inc.), [2014]O.J. No. 476, 2014 ONCA 85, 314 O.A.C. 341, 23 B.L.R. (5th) 26, 372 D.L.R. (4th) 90, 237 A.C.W.S. (3d) 390; Wynne v. Dalby (1913), (ON CA), 30 O.L.R. 67, [1913] O.J. No. 9, 16 D.L.R. 710, 5 O.W.N. 487 (S.C. (A.D.)) Statutes referred to Business Corporations Act, R.S.O 1990, c.

B.16, ss. 15, 34(5), 92(1) [as am.], 108(5) [as am.], 243 [as am.] Canadian Environmental Protection Act, 1999, S.C. 1999, c. 33, s. 280 [as am.] Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25, ss. 1 [as am.], (1) [as am.], 2(1) [as am.], (a), (3) [as am.], 2(7) [as am.] Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A, ss. 52 [as am.], 116(3) Employment Standards Act, 2000, S.O. 2000, c. 41, ss. 136, 137,

(1) Fisheries Act, R.S.C. 1985, c. F-14, s. 78.2 Highway Traffic Act, R.S.O. 1990, c. H.8, s. 53 [as am.] Insurance Act, R.S.O. 1990, c. I.8, ss. 251, 265 [as am.] Legislation Act, 2006, S.O. 2006, c. 21, Sch. F, ss. 87 [as am.], 92(1) Provincial Offences Act, R.S.O. 1990, c. P.33 [as am.], s. 77(1), (b) [page596] Authorities referred to Archibald, T., K. Jull and K. Roach, Regulatory and Corporate Liability: From Due Diligence To Risk Management (Aurora, Ont.:Canada Law Book Inc., 2007) Smyth, J.E., D.A. Soberman and A.J.

Easson, The Law and Business Administration in Canada, 11th ed. (Toronto: Pearson Canada,2006) TRIAL on a charge of operating a motor vehicle without insurance. D. Burgess, provincial prosecutor. J. Lopez, for defendant. QUON J.P.: — 1. Introduction [1] Owners and lessees of motor vehicles are required by law to purchase and maintain sufficient insurance coverage on or for their

vehicle, before they can legally operate their vehicle on public roadways or highways in Ontario, or before they can permit someone elseto operate their vehicle. This legal requirement is set out in s. 2(1) of the Compulsory Automobile Insurance Act, R.S.O. 1990, c. C.25("CAIA").

But, if they fail to fulfill this legal obligation to properly insure their vehicle and they operate or permit their vehicle to beoperated on an Ontario highway, then they would be liable for a minimum fine of $5,000 for a first conviction, and the possibility uponconviction, that their driver's licence could be suspended for up to a year or that their vehicle could be impounded for up to three months. [2] In this particular

Part III regulatory proceeding, the defendant, Edgardo Cordoba, had been observed driving a Dodge van onRutherford Road in the City of Brampton on May 3, 2014 by Officer Nicholson at approximately 12:04 a.m. After the van was stoppedand investigated in respect to a police-initiated program for checking drivers' sobriety and for compliance with Ontario's traffic laws,Officer Nicholson charged the defendant with committing two regulatory offences.

These two charges were for (1) unlawfully operatinga motor vehicle on a highway when his driver's licence was suspended, contrary to s. 53 of the Highway Traffic Act, R.S.O. 1990, c. H.8;and (2) for being the "owner" of a motor vehicle that he had operated on a highway when it was not insured under a contract ofautomobile insurance, contrary to s. 2(1)(

a) of the CAIA. [3] The trial of the defendant's two charges was subsequently held on an ex parte basis, on October 1, 2015, as neither the defendant norhis legal representative had appeared for the [page597] trial. After the prosecution completed their case against the defendant, thedefendant was then found on the evidence to have committed the offence of driving while under suspension beyond a reasonable doubt,and then sentenced to pay the minimum fine of $1,000 for a first conviction.

However, closing argument for the "no insurance" chargehad been adjourned to December 4, 2015 so that the prosecution could research and prepare their argument on the prosecution'scontention that the defendant is the "owner" of the Dodge van for the purposes of s. 2(1) of the CAIA, even though, as established byExhibit 1, a corporation named "CM Corporate Maintenance Ltd." had been the "registered owner" of the motor vehicle that was beingdriven by the defendant on the date and time in question. [4] On December 4, 2015, the defendant's legal representative, J. Lopez, then appeared for the defendant.

The defendant's legalrepresentative had initially appeared for the defendant's matter on the first appearance date of June 26, 2014, but did not attend on thefour subsequent appearances, and had only appeared again on December 4, 2015.

After closing arguments were made on the "noinsurance" charge, judgment was reserved and adjourned to January 8, 2016. [5] In their closing submissions, the prosecution made three arguments for why the defendant should be found guilty of committing theoffence of "owner operate motor vehicle on a highway without insurance", as the owner of the Dodge van within the meaning of s.2(1)(a).

They are (1) that the defendant is the common law owner of the Dodge van because the corporation is simply the alter ego ofthe defendant; (2) that the defendant had been the human person responsible for the Dodge van and by failing to properly insure theDodge van, he would be a party to the offence; and (3) that the corporate veil should be lifted to ensure that the defendant cannot evadethe financial and legal obligations under s. 2(1)(

a) of the CAIA. [6] For their first argument, the prosecution submits that the "owner" of the Dodge van for the purposes of s. 2(1) (

a) is not restricted toonly the "registered owner" of that motor vehicle, but that the term "owner" in s. 2(1) (

a) also includes the "common law" owner of thevehicle. And that, in this case, the defendant would be the common law owner of the Dodge van, since the corporation is merely the alterego of the defendant. Moreover, the prosecution submits that the criteria for finding or for interpreting whether someone would beclassified as the "common law owner", and therefore the "owner" of a particular vehicle under s. 2(1) of the CAIA, had been establishedand recognized by the Court of Appeal for Ontario in R. v.

Zwicker (1994), (ON CA), 17 O.R. (3d) 171, [1994] O.J.No. 197 (C.A.). [page598] The Court of Appeal in that particular case had held that someone who is not the registered owner could stillbe considered or found, within the meaning of s. 2(1) of the CAIA, to be the legal "owner" of the motor vehicle in question under thecategory of common law ownership. [7] And, to further support their contention that the defendant is the "common law owner" of the Dodge van, the prosecution argues thatbecause the defendant is a shareholder of the corporation, he would also indirectly own the assets of the corporation, which wouldinclude the Dodge van.

Especially, considering that if the corporation were to be wound up and its liabilities paid off, then what assetsthat would remain would be evenly divided among the shareholders, if there is more than one shareholder. Therefore, the prosecutioncontends that the admission by the defendant to Cst.

Nicholson that he was the owner of the corporation named CM CorporateMaintenance Ltd., which is the registered owner of the Dodge van, and that because the defendant knew that the van was not properlyinsured and that the defendant and the corporation had shared the same municipal address, when considered together would be sufficientevidence or proof that the defendant is the "common law owner" of the Dodge van that Officer Nicholson had observed the defendantdriving on May 3, 2014. [8] As for their second argument, the prosecution submits that since CM Corporate Maintenance Ltd. is really the alter ego of thedefendant, the defendant by necessary implication was also a party to the offence, given that the defendant as the owner of thecorporation would be the human person ultimately responsible for the Dodge van.

In other words, because a corporation by its verynature is an artificial entity created by statute and which can only act through a human person, then the defendant, who is the owner ofthe corporation, would in fact be that human person behind the corporate veil who would have to actually purchase or maintainautomobile insurance on the Dodge van on behalf of the corporation.

And, since the defendant had failed to have the Dodge van properlyinsured before he drove it on Rutherford Road on May 3, 2014, then this omission by the defendant, as the prosecution contends, wouldhave made the defendant a party to the offence. [9] And, finally, for their third argument, the prosecution contends that the corporate veil should be lifted in order that the defendant, asthe owner of the corporation, would be seen to be the true owner of the Dodge van within the meaning of s. 2(1)(a), since the defendantdominates and controls the corporation and uses the corporation merely as a sham for his alter ego.

As such, [page599] the prosecutionargues that since the corporate identity has no separate will or existence apart from the defendant, then the defendant should be found tobe the "common law owner" of the Dodge van, in order that s. 2(1) of the CAIA would be an enforceable obligation and to ensure thatthe defendant is unable to avoid this legal and financial obligation by hiding behind a corporate veil. [10] Ergo, to decide whether the prosecution has established that the defendant is the common law owner of the Dodge van so as to makehim the "owner" of the Dodge van for the purposes of s. 2(1)(a), then several questions have to be resolved.

First, it has to be determined

whether the prosecution has proven that the defendant is the common law owner of the Dodge van beyond a reasonable doubt. Second, it has to be determined whether the defendant, as the owner of the corporation, is indeed the human person who controls the corporation and who had failed to ensure that the Dodge van had been properly insured, so as to make him a party to the offence.

And third, it has to be determined whether there are exceptional circumstances in this case which would justify piercing the corporate shield in order to attribute the offence to the defendant, as the owner of the corporation, especially in light of the principle that a corporation is a separate legal entity that is distinct from its shareholders. (

A) Factual background [ 11 ] On May 3, 2014, at approximately 12:03 a.m., Officer Nicholson, a police officer who is a trained and qualified breath technician for the Peel Regional Police, had observed the white-coloured Dodge van driven by the defendant leave the premises of the restaurant and bar named "Spot 1 Grill", which is located in the City of Brampton. At that time, Officer Nicholson was scrutinizing the establishment under the "last drink and operation lookout program" due to the history of previous drinking and driving charges being laid against motorists who had been at that establishment.

After seeing the van operated by the defendant leave the Spot 1 Grill premises, Officer Nicholson then observed that van with the Ontario licence plate number [plate number omitted] being driven southbound on Rutherford Road in the City of Brampton. At 12:04 a.m., Officer Nicholson then stopped the van on Rutherford Road just north of Steeles Avenue to check on the sobriety of the driver and to investigate the status of the motor vehicle. The defendant had been the lone occupant of the van.

Officer Nicholson then made a request to the defendant to provide Nicholson with a driver's licence, an [page600] ownership permit and proof of insurance for the van. After Officer Nicholson had made a request for those documents, it then took two to three minutes before the defendant had been able to actually produce any of the three required documents. Of the three requested documents, the defendant had been unable to provide a valid Ontario driver's licence or proof of insurance for the van, but had been able to provide the ownership permit for the van.

Officer Nicholson had also testified in the trial that the name of the registered owner on the ownership permit provided by the defendant was a company with an address of [unit number omitted] 2100 Sherobee Road in Mississauga.

In addition, the prosecution entered a certified document from the Ministry of Transportation (Exhibit 1), which indicated that the registered owner of the Dodge van being driven by the defendant is a corporation named CM Corporate Maintenance Ltd. [ 12 ] Moreover, in order to identify himself, the defendant had provided Officer Nicholson with an Ontario Health Card in the name of Edgardo Cordoba, which had contained a photograph and a date of birth of ( removed for privacy ).

The defendant had also provided Officer Nicholson with his address of [unit number omitted] 2100 Sherobee Road in Mississauga, which had also been the same address for the corporation named CM Corporate Maintenance Ltd. that had been on the ownership permit for the Dodge van.

In addition, Officer Nicholson had testified that he had been satisfied with the identity of the driver of the Dodge van as being Edgardo Cordoba, which is the defendant in this proceeding. [ 13 ] Officer Nicholson also said that the defendant had not provided proof of insurance for the van on May 3, 2014 when requested to provide such proof, nor has the defendant provided such proof to Officer Nicholson since the date the defendant had been stopped by Officer Nicholson on May 3, 2014 to the date of the trial. [ 14 ] Furthermore, after a voir dire had been held to determine the voluntariness of any statements or utterances made by the defendant to Officer Nicholson during the traffic stop and investigation, it was determined that the statements made by the defendant in respect to the insurance coverage for the van had been voluntarily given to Officer Nicholson beyond a reasonable doubt and, as such, were permitted to be entered as evidence in the trial proper as voluntary statements made by the defendant. [ 15 ] Those voluntary utterances or statements made by the defendant had been responses to questions asked by Officer Nicholson and consist of the following conversation between Officer Nicholson and the defendant: [page601] Officer Nicholson: Are you the owner of the company?

The defendant: Yes. Officer Nicholson: Is the van insured? The defendant: Yes. Officer Nicholson then testified that he had cautioned the defendant about obstructing his investigation and that he could be charged for obstructing his investigation. The defendant then was asked if he understood the caution given by Officer Nicholson, after which the defendant had informed Officer Nicholson that he understood the caution given by Officer Nicholson. Officer Nicholson then asked the defendant another question. Officer Nicholson: Is the van insured?

The defendant: No. [ 16 ] Ergo, the defendant had admitted to Officer Nicholson that he was the owner of the company, CM Corporate Maintenance Ltd., which was listed as the registered owner of the Dodge van that was being driven by the defendant when Officer Nicholson stopped him on May 3, 2014.

Furthermore, Exhibit 1, which is a certified document issued by the Ministry of Transportation, confirms that the corporation named CM Corporate Maintenance Ltd. is the registered owner of that Dodge van. [ 17 ] However, there is no evidence adduced by the prosecution that the defendant is a director or an officer of CM Corporate Maintenance Ltd.

Nor is there any evidence on whether the defendant is the sole shareholder of that corporation or whether the company is a one-person corporation. [ 18 ] In addition, Officer Nicholson had testified that he had obtained the V.I.N. (vehicle identification number) of [number omitted] for the Dodge van from the front dashboard of that van.

2. Relevant Law [ 19 ] Subsection 2(1) of the CAIA provides that no owner or lessee of a motor vehicle shall operate or cause or permit a motor vehicle to be operated on a highway unless that motor vehicle is insured under a contract of automobile insurance: Compulsory automobile insurance 2(1) Subject to the regulations, no owner or lessee of a motor vehicle shall, (

a) operate the motor vehicle ; or (

b) cause or permit the motor vehicle to be operated, on a highway unless the motor vehicle is insured under a contract of automobile insurance . [page602] Definition

(2) For the purposes of subsection (1), where a permit for a motor vehicle has been issued under subsection 7(7) of the Highway Traffic Act , "contract of automobile insurance", with respect to that motor vehicle, means a contract of automobile insurance made with an insurer. (Emphasis added) [ 20 ] In addition, under s. 2(3) of the CAIA , where the owner or lessee of a motor vehicle is convicted of contravening s. 2(1) ( a ), then they are subject to a minimum fine of $5,000 and up to a maximum fine of $25,000; a potential suspension of their driver's licence for a period that does not exceed one year; or the possibility of having the motor vehicle that had been driven by the owner or lessee being impounded for a period of not more than three months under s. 2(7) : Offence 2(3) Every owner or lessee of a motor vehicle who, (

a) contravenes subsection (1) of this

section or subsection 13(11); or (

b) surrenders an insurance card for inspection to a police officer, when requested to do so, purporting to show that the motor vehicle is insured under a contract of automobile insurance when the motor vehicle is not so insured, is guilty of an offence and is liable on a first conviction to a fine of not less than $5,000 and not more than $25,000 and on a subsequent conviction to a fine of not less than $10,000 and not more than $50,000 and, in addition, his or her driver's licence may be suspended for a period of not more than one year . . . . . . Impounding motor vehicle 2(7) In the event of a conviction under subsection (3), the justice may order that the motor vehicle, (

a) that was operated in contravention of subsection (1) ; (

b) for which a false statement in respect of insurance was made in contravention of subsection 13(11); or (

c) for which an insurance card was produced in contravention of clause (3)( b ), shall be seized, impounded and taken into the custody of the law for a period of not more than three months. [ 21 ] Furthermore, the word "lessee" is defined in s. 1(1) of the CAIA , and means a person who is leasing or renting the motor vehicle for a period of 30 days or more: "lessee" means, in respect of a motor vehicle, a person who is leasing or renting the motor vehicle for a period of 30 days or more[.] [page603] [ 22 ] In addition, "automobile insurance" for a motor vehicle is also defined in s. 1(1) of the CAIA , and means insurance against liability arising out of bodily injury to or the death of a person or loss of or damage to property caused by a motor vehicle or the use or operation thereof, and which insures at least to the limit required by s. 251 of the Insurance Act , R.S.O. 1990, c.

I.8, and that also provides for the statutory accident benefits set out in the Statutory Accident Benefits

Schedule under the Insurance Act and the benefits prescribed under s. 265 of the Insurance Act : "automobile insurance" means insurance against liability arising out of bodily injury to or the death of a person or loss of or damage to property caused by a motor vehicle or the use or operation thereof, and which, (

a) insures at least to the limit required by

section 251 of the Insurance Act ,

(

b) provides the statutory accident benefits set out in the Statutory Accident Benefits

Schedule under the Insurance Act, and (

c) provides the benefits prescribed under

section 265 of the Insurance Act[.] 3. Analysis and Decision (

A) For the purposes of s. 2(1) of the CAIA, who is the "owner" of the Dodge van that was being driven by the defendant on May 3,2014? [23] Regarding whether the defendant is the "owner" of the Dodge van that he was observed driving on May 3, 2014, for the applicationof s. 2(1) of the CAIA, the prosecution contends that even though the defendant is not listed as the registered owner of the Dodge vanwith the Ministry of Transportation, the defendant is nonetheless the "common law" owner of the Dodge van on the basis that he hadadmitted to being the owner of the company listed as the registered owner, which was the defendant's alter ego; on the basis that thedefendant had personally been aware that the Dodge van was not insured; and on the basis that both the defendant and the corporationnamed CM Corporate Maintenance Ltd. had the same municipal address. [24] For the purposes of the CAIA, the registered owner of the motor vehicle in question is generally considered to be the "owner" of thatmotor vehicle under s. 2(1) (a), unless there is evidence which establishes that someone else should be treated as the owner of that motorvehicle. [25] In the case at bar, the registered owner of the Dodge van at the time the defendant had been stopped by Officer Nicholson, as provenby Exhibit 1, is a corporation named CM Corporate Maintenance Ltd.

However, during the traffic stop and [page604] conversationbetween the defendant and Officer Nicholson, the defendant had voluntarily admitted to Officer Nicholson that the defendant was theowner of that company and that the Dodge van was not insured. In addition, both CM Corporate Maintenance Ltd. and the defendanthave the same address of 2100 Sherobee Road, [unit number omitted], Mississauga, Ontario.

This correlation, the prosecution contends,of the defendant being the owner of CM Corporate Maintenance Ltd., of the defendant knowing the Dodge van was not insured, and ofthe defendant and the corporation sharing the same address, is evidence that CM Corporate Maintenance Ltd. is really the alter ego ofthe defendant and sufficient proof that the defendant is the "common law owner" of the Dodge van, which would then make thedefendant the "owner" of the van within the meaning of s. 2(1) of the CAIA. [26] On the surface, this evidence, as the prosecution would suggest, could possibly make the corporation, CM Corporate MaintenanceLtd., which is owned by the defendant, a private and small one-person corporation or a private and small closely held corporation. [27] However, being mindful of the principle that the shareholder or shareholders of a corporation and the corporation itself are legallydistinct and separate entities, then it will have to be determined whether the defendant's voluntary admission that he is the owner of CMCorporate Maintenance Ltd. as well as his knowledge that the Dodge van was not insured and that the defendant and the corporationshare the same address, is proof beyond a reasonable doubt that the defendant is the common law owner of the Dodge van.

(1) Is the word "owner" defined in the CAIA? [28] In considering whether the term "owner" in s. 2(1) (

a) of the CAIA includes the defendant, as the owner of the corporation, which islisted as the registered owner of the Dodge van that was being driven by the defendant on May 3, 2014, the CAIA and its regulations arenot of any assistance in deciding this issue, as the definition

section contained in s. 1 of that statute does not contain a definition for theterm "owner", nor is the word "owner" defined in any other part of the CAIA or its regulations. [29] As well, the term "owner" is not defined in s. 87 of the Legislation Act, 2006, S.O. 2006, c. 21, Sch. F, which is a statute that appliesto all statutes and regulations enacted by the Ontario legislature, and which had been enacted as a statutory tool to assist in theinterpretation of Ontario statutes and regulations. Similarly, the term "owner" is also not defined [page605] in the Provincial OffencesAct, R.S.O. 1990, c.

P.33, or in its regulations, which is the procedural legislation that governs this regulatory prosecution. [30] As a result, dictionary

definitions and prior judicial consideration of the term "owner" will have to be relied upon in order to resolvethe issue of whether the defendant, as the owner of CM Corporate Maintenance Ltd., is the "owner" of the Dodge van for the purposes ofs. 2(1)(

a) of the CAIA.

(2) Definition of "owner" in Black's Law Dictionary [31] In Black's Law Dictionary, Revised 4th ed. (St. Paul: West, 1968), the word "owner" is defined as a general term in which "itsmeaning is to be gathered from the connection in which it is used and from the subject-matter to which it is applied", and to some extentmeans the "proprietor" or the "person in whom is vested the ownership, dominion, or title of property": OWNER. The person in whom is vested the ownership, dominion, or title of property; proprietor. . . . . .

The term is, however, a nomen generalissimum, and its meaning is to be gathered from the connection in which it is used, and from thesubject-matter to which it is applied. . . . The primary meaning of the word as applied to land is one who owns the fee and who has theright to dispose of the property, but the term also includes one having a possessory right to land or the person occupying or cultivating it.

(3) Judicial consideration of the term "owner" [32] In Olympia & York Developments Ltd. and City of Toronto (Re) (1980), (ON SC), 29 O.R. (2d) 353, [1980] O.J.No. 3672, 113 D.L.R. (3d) 695 (Div. Ct.), the Divisional Court of Ontario in determining the meaning of the word "owner" used in a

statutory provision where that word had not been specifically defined in that statute had relied on the reasoning used in Wynne v. Dalby(1913), (ON CA), 30 O.L.R. 67, [1913] O.J. No. 9 (S.C. (A. D.)), which had considered the possibility that twopersons may at the same time be properly viewed to be the owner of a thing, which included the registered owner of the thing andsomeone who had been given the rights of ownership to that thing for a limited time [at para. 8]: The real issue in dispute is what is the meaning of the word "owner" in s. 35a of the Act?

Does it exclude the owner in fee simple of thelands where such owner is not the person undertaking the development? The term "owner" has been considered judicially in manydifferent contexts and referred to by legal authors. In Wynne v. Dalby (1913), (ON CA), 30 O.L.R. 67, 6 D.L.R. 710,reference was made at p. 72 O.L.R., p. 714 D.L.R., as follows: [page606] The word "owner" is an elastic term, and the meaning which must be given to it in a statutory enactment depends very much upon theobject the enactment is designed to serve. As was said by Lord Herschell in Baumwoll Manufactur von Carl Scheibler v.

Furness, [1893] A.C. 8, 17: "There may be two persons atthe same time in different senses not improperly spoken of as the owner of a ship. The person who has the absolute right to the ship, whois the registered owner, the owner (to borrow an expression from real property law) in fee simple, may be properly spoken of, no doubt,as the owner; but at the same time he may have so dealt with the vessel as to have given all the rights of ownership for a limited time tosome other person, who, during that time, may equally properly be spoken of as the owner." [33] Moreover, the appeal court, at para. 15 in Wynne v.

Dalby, supra, had emphasized that the meaning which must be given to the term"owner" in a statutory enactment would depend on the object the enactment is designed to serve: The word "owner" is an elastic term, and the meaning which must be given to it in a statutory enactment depends very much upon theobject the enactment is designed to serve. [34] And, even though the term "owner" is not defined in the CAIA, its meaning in respect to that statute had been considered by theCourt of Appeal for Ontario in R. v. Zwicker, supra.

In that case, the Court of Appeal had to consider whether someone who had justbought a vehicle, but had not yet registered that vehicle in their own name with the Ministry of Transportation, would in the context of s.2(1) of the CAIA be the "owner" of that vehicle. Although the accused, Zwicker, in that case had bought the motor vehicle from a friendthree days earlier and had legally owned that motor vehicle when she was stopped by a police officer, she had not yet registered herselfwith the ministry as the owner of that vehicle until three days after she had been stopped and charged.

At her trial, Zwicker had arguedthat since the vehicle had still been registered under the name of her friend who had sold the vehicle to Zwicker, then she should not beconvicted under s. 2 of the CAIA as that vehicle's owner because she had not been the registered owner of the vehicle when she had beenstopped. [35] However, the Court of Appeal did not agree with Zwicker's argument and held, at paras. 10 and 11 of their judgment, that theapplication of s. 2(1) cannot be simply limited to only the registered owners of vehicles, since that

interpretation would allow the personwith all the rights of common law ownership the means and ability to avoid the corresponding responsibilities of ownership.

The Courtof Appeal had also reasoned that since the buyer of the vehicle, Zwicker, had been the legal owner of the vehicle when the offence hadbeen committed, [page607] then Zwicker would be the owner under s. 2(1), since she would be the common law owner of the vehicle atthe material time, even though the vehicle had been still registered in the name of the person who had just sold the vehicle to her.Moreover, the Court of Appeal indicated that under Ontario's Highway Traffic Act, Zwicker had been legally obligated and required toregister her ownership of that vehicle within six days of purchasing the vehicle and that the responsibility for ensuring that the motorvehicle is insured under a contract of insurance would rest on the "owner" of that motor vehicle, which would have been on Zwicker andnot on the seller of the vehicle, so that the word "owner" in the context of the CAIA would also include the "common law owner" of themotor vehicle: The Compulsory Automobile Insurance Act is intended to ensure that every car operated in the province is insured.

The term "owner" asit appears in s. 2(1) of this Act, in our view, cannot properly be limited solely to the "registered owner". To interpret "owner" in thatmanner would permit the person with all the rights of common law ownership to avoid corresponding responsibilities of ownership.Under the present Highway Traffic Act the appellant was required to register her ownership within six days of purchase. In directcontravention of this Act, she failed to do so. It would be anomalous indeed if a breach of the Highway Traffic Act could amount to ashield against liability under the Compulsory Automobile Insurance Act.

In sum, responsibility for ensuring that a motor vehicle is insured under a contract of insurance rests on the "owner". The "owner" in thecontext of the Compulsory Automobile Insurance Act includes the "common law owner". (Emphasis added) [36] Accordingly, whether the defendant is the common law owner of the Dodge van at the material time would depend on thecircumstances particular to the defendant.

(4) What is the object of the CAIA? [37] The Court of Appeal held, at para. 10 in R. v. Zwicker, that the purpose of the CAIA is to ensure that every car operated in theProvince of Ontario is insured: The Compulsory Automobile Insurance Act is intended to ensure that every car operated in the province is insured[.]

(5) Has the prosecution proven beyond a reasonable doubt that the defendant is the "common law owner" of the Dodge van? [38] The prosecution contends that based on the CAIA's object of ensuring that every car operated in Ontario is properly insured; theruling in Zwicker that someone who is not the registered owner of a motor vehicle could still be found to be its [page608] common law

owner; that the defendant is the owner of the corporation that is the registered owner of the Dodge van; that a corporation can only actthrough a human person; that the defendant had knowledge of the Dodge van not being insured; and that the defendant and thecorporation share the same municipal address, that the defendant should be found in the circumstances to be the common law owner ofthe Dodge van.

Otherwise, the prosecution contends that every motorist in Ontario could register their motor vehicles under the name ofa corporation and then not arrange or obtain proper liability insurance for that vehicle, in order to potentially escape or disregard the legaland financial obligations associated with obtaining or purchasing proper liability insurance for their motor vehicles under the CAIA, aswell as avoiding the penalties involved if the corporation, as the registered owner of the motor vehicle, is convicted of operating orpermitting the vehicle to be operated on a highway in Ontario without insurance. [39] Ergo, the prosecution contends that in the circumstances of this case and in order that the defendant be held liable for thecorporation's acts or omissions in respect to operating or permitting the Dodge van to be operated on a highway without insurance, eitherthe defendant be found to be the common law owner of the Dodge van based on indicia of common law ownership or that the corporateveil should be pierced in order to find that the defendant is the true or common law owner of the Dodge van; or that the defendant shouldbe found to be a party to the offence under the CAIA based on the defendant being ultimately the human person responsible for theDodge van and who had failed to ensure that the Dodge van had been properly insured. (

a) What are the indicia of common law ownership of a motor vehicle? [40] In deciding whether a particular person, who is not the registered owner of a motor vehicle, would be the owner of a motor vehiclein the common law sense, and be liable under s. 2(1) for the insurance obligations for that vehicle, the Court of Appeal had noted in R. v.Zwicker, at para. 11, that indicia of common law ownership of a motor vehicle could be derived from the reasoning in Honan v. Gerhold, (SCC), [1975] 2 S.C.R. 866, [1974] S.C.J. No. 131, 50 D.L.R. (3d) 582 and from Keizer v. Hanna (1975), (ON CA), 10 O.R. (2d) 597, [1975] O.J.

No. 2519, 64 D.L.R. (3d) 193 (C.A.): For the indicia of common law ownership reference may be made to cases such as Honan v. Gerhold, (SCC), [1975] 2S.C.R. 866, 50 D.L.R. (3d) 582, and Keizer v. Hanna (1975), (ON CA), 10 O.R. (2d) 597, 64 D.L.R. (3d) 193 (C.A.).[page609] The appellant was the owner of her motor vehicle within the meaning of the Compulsory Automobile Insurance Act and wasclearly prohibited from operating the vehicle without insurance on the day in question. [41] In Keizer v.

Hanna, supra, at paras. 13 and 14, the Court of Appeal decided that the basis for determining whether someone is the"common law owner" of a motor vehicle would have to be considered on the relevant circumstances particular to each case.

In order todecide the issue of common law ownership in that case, the Court of Appeal had reviewed and considered a number of decisions that haddealt with the degree of interest in a motor vehicle or the combination of circumstances in respect to its ownership and control that wouldbe sufficient to render a person vicariously liable under the Highway Traffic Act as an "owner" of that vehicle.

After their review, theCourt of Appeal surmised that in each of those other decisions the circumstances had varied substantially from case to case, so that therehad been no need to set out the precise criteria that had been deduced in those decisions in order to decide the issue of common lawownership for that particular case: There have been a number of cases dealing with what degree of interest in a motor vehicle, or what combination of circumstances withrespect to its ownership and control, is sufficient to render a person vicariously liable under the Highway Traffic Act as an "owner".

Themost recent pronouncement is that of the Supreme Court of Canada in Honan et al. v. Gerhold et al., (SCC), 50 D.L.R.(3d) 582, 3 N.R. 81, pronounced on October 1, 1974, which reversed the judgment of this Court: (ON CA), [1973] 2O.R. 341, 33 D.L.R. (3d) 657. Other recent cases are Hawryluk et al. v. Hodgins, (ON CA), [1972] 3 O.R. 741, 29D.L.R. (3d) 403; Hayduk et al. v. Pidoborozny et al., (SCC), [1972] S.C.R. 879, 29 D.L.R. (3d) 8, [1972] 4 W.W.R.522; and May et al. v. Municipality of Metropolitan Toronto, (ON SC), [1969] 1 O.R. 419, 2 D.L.R. (3d) 659.

I do not think that the decision of this case requires us to attempt to set out in precise terms the ratio of the various cases to which I havereferred, the circumstances of which vary substantially from case to case. [Emphasis added] [42] Moreover, in Honan v.

Gerhold, supra, the Supreme Court of Canada had to decide whether the registered owner of the automobileinvolved in an accident should be held liable for the actions of the driver of the automobile, who had injured an infant, who had theexclusive possession and control of the automobile, and who had been the original owner of the automobile who had the automobileregistered in the name of his friend in order to prevent the automobile from being seized in a judgment rendered against him. [43] In the circumstances of the Honan v.

Gerhold case, Kathleen Honan, an infant, had been injured in an automobile accident in whichChester Doman had been the driver of the [page610] automobile that had held to be at fault for the accident. However, the automobilethat Doman had been driving had been registered in the name of a person named Raymond Gerhold. The trial judge had concluded thatChester Doman was responsible for the accident and awarded damages to the infant Honan against the estate of Chester Doman, who haddied some time later from the injuries he had received in the accident.

The infant Honan had also sued Raymond Gerhold as theregistered owner of the automobile driven by Chester Doman, but the trial judge had dismissed the action against Gerhold.

The matterwas eventually appealed to the Supreme Court of Canada, where the Supreme Court did find that Raymond Gerhold did have commonlaw ownership of the automobile that Chester Doman had been driving in the accident where the infant Kathleen Honan had beenseriously injured. [44] Gerhold, as the registered owner, had argued that he was not the real owner of the automobile despite the evidence that theautomobile had been registered in his name, but that Gerhold had only registered the automobile in his name so that his friend ChesterDoman, the true owner of the automobile, would be able to keep the automobile from being seized in a judgment that had been awardedto Doman's wife.

However, despite Raymond Gerhold's argument about not being the true owner, the Supreme Court concluded thatGerhold was nonetheless the owner of the automobile in a common law sense. And, although there had been evidence from Gerhold thatChester Doman had only transferred the automobile to Gerhold to protect the automobile from being seized in execution of a judgment

for alimony held by Doman's wife, that Chester Doman still continued to have the exclusive possession of the automobile, and that Doman had the automobile under his dominion and control, the Supreme Court concluded that there had been a legal transfer of the vehicle from Doman to Gerhold, which gave Gerhold legal title to the automobile.

More importantly, the Supreme Court had also concluded that Gerhold did manifest his ownership in the automobile through several important actions, namely, that Gerhold had first placed the vehicle under his insurance policy and had certified to the insurance company that the automobile was Gerhold's vehicle, and that, second, Gerhold had applied for the registration of the automobile in the first place in 1966 and again in 1968 and 1969, and had taken great objection to Chester Doman having done so in Gerhold 's name in the year 1967.

In addition, the Supreme Court had put significant emphasis on the fact that Raymond Gerhold had also disposed of the wrecked automobile after the accident and had taken all the proceeds for his own use without accounting to [page611] the estate of the late Chester Doman, and had also found that this particular action by Gerhold in keeping the proceeds of the sale to be only consistent with an assertion of Raymond Gerhold's ownership of the automobile.

Under those circumstances, the Supreme Court had concluded that Raymond Gerhold was the owner in common law of that automobile, which had been involved in the accident, so that Gerhold would be held jointly liable in the action brought by the Honan infant: With every respect for the learned justice on appeal, I am not so persuaded. What had moved Chester Doman was to protect the vehicle from seizure in execution of the judgment held by his wife. That end could not be accomplished unless he transferred the automobile. He, therefore, did transfer the automobile.

The transfer gave Gerhold the legal title and it was intended to have that exact effect. The form of application for register of the transfer does, in my view, contain words which show that there has been a conveyance. Such a form appears in Ex. 19 and it should be noted that the form is signed both by the transferor and the transferee and it contains the words: "I hereby give notice of the change of ownership of the vehicle described hereon and make application for transfer of the permit".

Of course, under the circumstances, the late Chester Doman continued to have the exclusive possession of the automobile and have it under his dominion and control. That was part of the transaction. In fact exclusive dominion and control was present in both Haberl v. Richardson and Hayduk v. Pidoborozny . Despite this, however, Gerhold did manifest his ownership in several important actions. Firstly, he placed the vehicle under his insurance policy, and so certified to the insurance company that the vehicle was his.

Secondly, he applied for the registration, in the first place in 1966 and again in 1968 and 1969, and he took great objection to Doman having done so in Gerhold 's name in the year 1967. Finally, and in my view most important, he disposed of the wrecked car and took the proceeds for his own use with evidently no intention of accounting to the estate of the late Chester Doman. This latter action could only be consistent with an assertion of his ownership of the vehicle. (Emphasis added) [ 45 ] Similarly, in Keizer v.

Hanna , supra , the Court of Appeal for Ontario had to determine from the circumstances whether John Buch, who was the registered owner of a motor vehicle driven by Herbert Hanna that had been involved in an automobile accident with Marilyn Keizer, should be held jointly liable for Keizer's injuries. In that case, Buch, a car dealer, had sold the automobile involved in the accident to Herbert Hanna, the driver of the motor vehicle that had been held responsible for the accident.

However, Buch had decided not to transfer the title for the car to Hanna until such time as Hanna had obtained insurance for the car or until Hanna had paid Buch fully for the car. At para. 14 of their judgment, the Court of Appeal had concluded that Buch intended that the automobile should remain in Buch's name until Hanna had either produced evidence that the automobile was insured under Hanna's policy or had produced $25 [page612] so that the transfer could take place or be registered with no evidence of insurance intended to be produced to the issuer of permits.

The Court of Appeal had also concluded that it was not an unreasonable inference from the evidence that Buch had not been prepared to transfer the automobile into Hanna's name until he got the balance of $200 owing on the purchase price.

Moreover, the Court of Appeal held that these facts, coupled with the certification by Buch that he was the owner of the automobile and that the automobile had been insured under Buch's own policy, provided ample foundation for the trial judge's finding that John Buch was the owner of the automobile for the purposes of the Highway Traffic Act , even though Buch had sold the automobile to Hanna and Hanna had been driving the car exclusively: In this case the conclusion is irresistible that Buch intended that the car should remain in his name at least until Hanna had either produced evidence that the car was insured under Hanna's policy or produced $25 so that the transfer could take place with no evidence of insurance produced to the issuer of permits.

Indeed, it is not an unreasonable inference from the evidence that Buch was not prepared to transfer the car into Hanna's name until he got the balance of $200 owing on the purchase price. These facts, coupled with the certification by Buch that he was the owner and that the car was insured under his own policy, provided ample foundation for the finding by the trial Judge that Buch was the owner for the purposes of the Highway Traffic Act . Accordingly, I would dismiss the appeal against that finding. (Emphasis added) (

b) In the present proceeding, are there indicia that the defendant is the common law owner of the Dodge van? [ 46 ] Undoubtedly, the evidence from Officer Nicholson that the defendant had admitted or acknowledged that he is the owner of the company named on the ownership permit, that he had been aware that the Dodge van had not been insured, and that the defendant and the corporation had shared the same municipal address could infer that the defendant is either the sole shareholder of the corporation or just one of the shareholders of the corporation. However, this is not necessarily mean that the defendant is the common law owner of the Dodge van in respect to the application of s. 2(1) (

a) of the CAIA . (

i) Is there evidence that the defendant had exclusive possession, dominion and control of the Dodge van? [ 47 ] On whether the defendant had exclusive possession, dominion and control of the Dodge van to support a finding of [page613] common law ownership, there is no evidence that the defendant is the sole driver of the Dodge van or that he is the only person who drives the Dodge van. [ 48 ] Therefore, it cannot be concluded that the defendant had the exclusive possession of the Dodge van or that the van had been under

the defendant's exclusive dominion and control, as evidence to prove the defendant is the owner of the Dodge van in the common lawsense. (ii) Is there evidence that the defendant had registered the Dodge van under the name of the corporation for some ulterior purpose, butremained its true owner? [49] On this issue, there has been no evidence adduced by the prosecution that the defendant had the Dodge van registered in thecorporation's name for some ulterior purpose, so that the defendant could remain the true owner of the Dodge van. [50] Accordingly, up this stage of the analysis, the prosecution has not provided sufficient evidence to prove beyond a reasonable doubtthat the defendant is the owner of the Dodge van in the common law sense.

As such, the prosecution's arguments that the corporate veilshould be lifted in order to find that the defendant is the owner of the Dodge van within the meaning of s. 2(1)(a), or that the defendanthas participated in or abetted the corporation in the commission of the offence, so as to be a party to the offence, will then have to beconsidered to determine whether the defendant should be held legally responsible for the corporation's unlawful act or omissionpertaining to operating or permitting the Dodge van to be operated on a highway without insurance. (

B) Other approaches of imputing penal liability to shareholders, directors, or officers of a corporation for the unlawful acts oromissions of the corporation [51] Owners of a corporation are either natural persons or artificial persons or entities who own the shares of the corporation. Moreimportantly, the law treats the corporation as an artificial legal person or entity that is distinct from its shareholders.

This general rulethat a corporation is a legal entity distinct from its shareholders was confirmed by the Supreme Court of Canada in Kosmopoulos v.Constitution Insurance Co. of Canada, (SCC), [1987] 1 S.C.R. 2, [1987] S.C.J. No. 2, 34 D.L.R. (4th) 208, where theyalso confirmed, at para. 12, that a court may disregard this principle in exceptional circumstances by lifting the [page614] corporate veiland consider the corporation to be a mere agent or puppet of its controlling shareholder: As a general rule a corporation is a legal entity distinct from its shareholders: Salomon v.

Salomon & Co., [1897] A.C. 22 (H.L.).

The lawon when a court may disregard this principle by "lifting the corporate veil" and regarding the company as a mere "agent" or "puppet" ofits controlling shareholder or parent corporation follows no consistent principle. [52] This legal distinction, therefore, generally regards the shareholders of the corporation not to be liable for the debts and liabilities ofthe corporation, unless there is an explicit statutory provision which holds the shareholders of the corporation liable for the corporation'sdebts and liabilities or in the event that the corporation has been used for fraudulent or improper purposes, which then permits a court todisregard the sacrosanct corporate veil.

Similarly, under the common law, the shareholders of a corporation may also be found to beliable for the unlawful acts or omissions of a corporation through the lifting of the corporate veil when there has been fraudulent orimproper use of the corporation by its shareholders. [53] On the other hand, the directors, officers, or agents of the corporation could also be deemed through an explicit statutory provisionto be a party to and guilty of an offence committed by the corporation, if they actually direct, authorize, assent to, acquiesce in orparticipate in the commission of that offence. [54] Moreover, in their contention that the defendant should be held liable as a party to the offence, the prosecution submits that sincethe defendant is a shareholder or owner of the company that is the registered owner of the Dodge van, such that the defendant wouldindirectly own all of the corporation's assets and undertaking, including its liabilities, and because the defendant had knowledge that theDodge van was not insured and that the defendant and the corporation had shared the same municipal address, would then make thedefendant so centrally connected to the corporation and the human person ultimately responsible for the Dodge van, so that thedefendant would have had to have participated in or assisted the corporation in committing the offence of owner operating its Dodge vanon a highway without insurance. [55] Before pondering the merits of the prosecution's argument that the defendant is a party to the offence, a review will have to be madeof other statutory or common law approaches for imputing penal liability to the shareholders, directors, or officers of a corporation forthe corporation's unlawful acts or omissions.

First, in some regulatory statutes, there are provisions that hold them personally liable forthe wrongful actions or [page615] omissions committed by the corporation by deeming the directors or senior officers of a corporation tobe a party to and guilty of the offence or by making them liable for the offence as the principal offender.

Second, under the common lawapproach, the shareholders of a corporation could also face similar penal liability that the directors, officers, or agents of the corporationwould face for the unlawful acts or omissions of a corporation, where there are exceptional circumstances which allows a court to lift orpierce the corporate veil and regard the corporation as a mere agent or puppet of the shareholders, whereby the shareholders are heldresponsible for the offence.

Also, where a shareholder had been directly involved or participated in the activities that constituted theoffence, then the shareholder could be found to be a party to the offence.

Although allowing the corporate veil to be lifted would be rare,the common law does permit a court to find the shareholders liable if the corporation is being used for shielding the shareholders fromany culpability for fraudulent or illegal activities. [56] Additionally, the prosecution's concern about a corporation being used to evade compliance with the CAIA or other regulatoryprovisions has been commented on by the authors of the textbook The Law and Business Administration in Canada, 11th ed. (Toronto:Pearson Canada, 2006). The authors, J.E. Smyth, D.A. Soberman and A.J.

Easson, at p. 650, have expressed their concern, as well as theconcern of regulators, that a corporation that is convicted of committing a regulatory offence may be merely a "shell" with virtually noassets to pay its fine, so that those who control the enterprise could walk away from it and start up a similar activity using a newcorporation.

They also suggest that in the situation where only the corporation is held liable for the offence, that this would not act as aneffective deterrence to ensure effective enforcement of regulatory schemes unless the directors and senior officers, who would beresponsible for that offence being committed, are also punished.

To address this concern about effective deterrence, the authors of thetextbook have also noted that regulators have enacted specific statutory provisions that would make directors and senior officerspersonally liable for the unlawful acts or omissions of their corporation and to also make the grounds for individual liability muchbroader:

The principle of limited liability does not protect directors from liability for torts or breaches of fiduciary duty that they personally commit. In principle, directors, like employees, are liable for their own torts that are committed in the course of performing their duties, even though the corporation may also be vicariously liable. [page616] The question we address here is whether directors (and officers) should be held criminally liable for offences committed by their corporation under their supervision .

Our view is that simply holding corporations liable is not in itself strong enough deterrent to ensure effective enforcement of regulatory schemes . A large corporation with sufficient assets might consider the penalty merely a "licence"; it pays the fine and carries on with its activities. The corporation's manager thus often passes the costs on to the consumer through higher prices or to the corporation's shareholders through lower dividends.

At the other extreme, a corporation may be merely a "shell" with virtually no assets to pay its fine; those who control the enterprise walk away from it and start up a similar activity using a new corporation. A strong argument can be made that effective deterrence requires that, as well as the corporation, the individuals responsible for the offence be punished directly. Directors and senior officers should be personally liable for offences committed by their corporation [.] However, there are problems in attempting to prosecute individuals.

In complex organizations, where responsibility is shared among a number of persons, it is often difficult to identify with any certainty who is "responsible" and who can -- and should -- be convicted of committing an offence.

These two factors -- a belief that directors and officers and not just corporations should be made liable and that it may be difficult to obtain convictions -- have led legislatures -- To enact express provisions making senior officers and directors liable and -- To make the grounds for individual liability much broader . (Emphasis added) [ 57 ] Also, a similar comment was made in the textbook Regulatory And Corporate Liability: From Due Diligence To Risk Management (Aurora, Ont.: Canada Law Book Inc., 2007), where the authors T. Archibald, K. Jull and K.

Roach, at p. 13-2, refer to academic criticism of the corporate structure that insinuates that limited liability narrows the extent to which corporations can be held responsible for criminal or regulatory offences. Especially, as they suggest, in the situation where a large fine is assessed against a corporation that is undercapitalized, which could then put the payment of the fine in jeopardy.

And, if the fine is not paid, they note there may be little recourse available to regulators in collecting the fine: If a large fine is assessed against a corporation that is undercapitalized, the payment of the fine may be in jeopardy, and, if not paid, there may be little recourse available . This potential problem is one of the topics in Harry Glasbeek's Wealth by Stealth . A central theme of Glasbeek's book is that the corporate structure of limited liability narrows the extent to which corporations can be responsible for criminal or regulatory offences.

Glasbeek ventures to predict, on admittedly limited empirical data, that the largest fines are often not collected: [page617] The little evidence (largely anecdotal) that exists on this issue suggests that the largest fines are generally imposed on corporations that have no assets. For example, on February 3, 1992, the Windsor Star trumpeted the imposition of what was then the largest fine imposed for an occupational health and safety violation penalty in Ontario under its invigorated sanction regime. It was $400,000.

But the guilty corporation, Elan Corporation, was bankrupt by the time the fine was levied. (Emphasis added) [ 58 ] For a statutory provision that would make directors or officers of a corporation party to an offence and impute penal liability onto them for the unlawful acts or omissions of a corporation, an example is contained in s. 78.2 of the Fisheries Act , R.S.C. 1985, c. F-14. That

section provides that where a corporation commits an offence, then any officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence, and is liable upon conviction to the punishment provided for the offence regardless if the corporation had been prosecuted: Offences by corporate officers, etc. 78.2 Where a corporation commits an offence under this Act, any officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punishment provided for the offence, whether or not the corporation has been prosecuted. [ 59 ] Also, under s. 280 of the Canadian Environmental Protection Act, 1999 , S.C. 1999, c. 33, penal liability can be imputed to a director, officer, agent or mandatary of the corporation, for the corporation's unlawful acts or omissions, when one of those individuals had directed, authorized, assented to, acquiesced in or participated in the commission of the offence.

Under that section, they would nevertheless be held to be party to and guilty of the offence, even though the corporation had not been prosecuted or convicted for committing the offence: Liability of directors, officer, etc., of corporation 280(1) If a corporation commits an offence under this Act, any director, officer, agent or mandatary of the corporation who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence, and is liable on conviction to the penalty provided for by this Act for an individual in respect of the offence committed by the corporation, whether or not the corporation has been prosecuted or convicted.

[ 60 ] In addition, s. 116(3) of the Consumer Protection Act, 2002 , S.O. 2002, c. 30, Sch.

A contains another example of a statutory provision which imputes liability to an officer or director [page618] of the corporation for a particular offence committed by the corporation, where that officer or director fails to take reasonable care to prevent the corporation from committing that offence: Corporation 116(3) An officer or director of a corporation is guilty of an offence if he or she fails to take reasonable care to prevent the corporation from committing an offence mentioned in subsection (1) or (2). [ 61 ] And, penal liability can also be imputed to an officer, director or agent of the corporation, or a person acting or claiming to be acting in that capacity, for an unlawful act or omission committed by the corporation, under ss. 136 and 137 of the Employment Standards Act, 2000 , S.O. 2000, c. 41.

Specifically, s. 137(1) deems the particular individual who authorizes or permits the contravention or acquiesces in it, to be a party to and liable for the offence committed by the corporation, even though the corporation has not been charged or convicted of committing the offence: Offence re directors' liability 136(1) A director of a corporation is guilty of an offence if the director, (

a) fails to comply with an order of an employment standards officer under

section 106 or 107 and has not applied for a review of that order; or (

b) fails to comply with an order issued under

section 106 or 107 that has been amended or affirmed by the Board on a review of the order under

section 116 or with a new order issued by the Board on such a review. Penalty

(2) A director convicted of an offence under subsection (1) is liable to a fine of not more than $50,000. Offence re permitting offence by corporation 137(1) If a corporation contravenes this Act or the regulations, an officer, director or agent of the corporation or a person acting or claiming to act in that capacity who authorizes or permits the contravention or acquiesces in it is a party to and guilty of the offence and is liable on conviction to the fine or imprisonment provided for the offence. Same (2) Subsection (1) applies whether or not the corporation has been prosecuted or convicted of the offence . Onus of proof

(3) In a trial of an individual who is prosecuted under subsection (1), the onus is on the individual to prove that he or she did not authorize, permit or acquiesce in the contravention. [page619] Additional penalty

(4) If an individual is convicted under this section, the court may, in addition to any other fine or term of imprisonment that is imposed, assess any amount owing to an employee affected by the contravention and order the individual to pay the amount assessed to the Director. [ 62 ] However, unlike those statutory provisions contained in s. 78.2 of the Fisheries Act , s. 280 of the Canadian Environmental Protection Act, 1999 , s. 52 of the Consumer Protection Act, 2002 and ss. 136 and 137 of the Employment Standards Act, 2000 , the CAIA does not contain a provision which imputes penal liability to a shareholder, director, officer or agent of the corporation, for the unlawful acts or omissions of the corporation committed under that statute, such as the corporation operating or permitting a motor vehicle that it owns to be driven on an Ontario highway without insurance. [ 63 ] Likewise, the shareholders of a corporation could also be made liable for the unlawful acts or omissions of a corporation through a unanimous shareholders agreement or, alternatively, by explicit statutory provisions the shareholders could also be held liable for the payment of fines imposed against the corporation.

Then again, there has been no evidence adduced by the prosecution that the defendant as a shareholder of the corporation would be made liable for the wrongful acts or omissions of the corporation through a unanimous shareholders agreement, nor does the CAIA contain a provision, which makes shareholders of a corporation specifically liable for the fines of the corporation.

(1) Is the defendant a party to the offence? [ 64 ] Subsection 77(1) of the Provincial Offences Act , which is the statute that governs proceedings prosecuted under the CAIA , sets out four circumstances in which an individual can be found to be a party to and guilty of an offence, namely, as (1) a principal offender; (2) as an aider; (3) as an abettor; and (4) as someone who had common intention to commit the offence with the person who actually committed the offence: Parties to offence 77(1) Every person is a party to an offence who,

a) actually commits it;

(

b) does or omits to do anything for the purpose of aiding any person to commit it; or (

c) abets any person in committing it. [page620] Common purpose

(2) Where two or more persons form an intention in common to carry out an unlawful purpose and to assist each other therein and anyone of them, in carrying out the common purpose, commits an offence, each of them who knew or ought to have known that thecommission of the offence would be a probable consequence of carrying out the common purpose is a party to the offence. [65] In R. v. Vu, 2012 SCC 40 , [2012] 2 S.C.R. 411, [2012] S.C.J.

No. 40, at paras. 58 and 59, the Supreme Court of Canada, inconsidering whether an accused for a criminal charge had been party to an offence, had held that an individual will bear the sameresponsibility for the offence regardless of whether they are the principal, aider or abettor of the offence: Under s. 21(1), a person is criminally liable, as a party to an offence, if that person, having the requisite intent, plays one of the threeenumerated roles in the offence -- principal, aider or abettor.

An individual will bear the same responsibility for the offence regardlessof which particular role he or she played: R. v. Thatcher, (SCC), [1987] 1 S.C.R. 652, at pp. 689-90. As this Courtrecently explained in R. v. Briscoe, 2010 SCC 13, [2010] 1 S.C.R. 411, a person becomes a party to an offence when that person -- armedwith knowledge of the principal's intention to commit the crime and with the intention of assisting the principal in its commission -- does(or, in some circumstances, omits to do) something that assists or encourages the principal in the commission of the offence (paras. 14-18).

In my view, the well-established principles of s. 21(1) criminal liability apply with equal force to continuing offences that have beencompleted in law but not in fact. In particular, where an accused -- with knowledge of the principal's intention to see a continuing offencethrough to its completion -- does (or omits to do) something, with the intention of aiding or abetting the commission of the ongoingoffence, party liability is established. (Emphasis added) [66] Furthermore, in R. v. Thatcher, (SCC), [1987] 1 S.C.R. 652, [1987] S.C.J.

No. 22, at paras. 71 to 73, the SupremeCourt of Canada had held that it is no longer necessary to specify in the charge the nature of an accused's participation in the offence,whether as principal, aider or abettor: I should perhaps note that the old common law authorities stand for the proposition that an indictment may charge all who are presentand abet the act as principals in the first degree.

As Fauteux J. states in Harder, at p. 492: At common law, the actor or actual perpetrator of the fact and those who are, actually or constructively, present at the commission ofthe offence and aid and abet its commission, are distinguished as being respectively principal in the first degree and principals in thesecond degree; yet, in all felonies in which the punishment of the principal in the first degree and of the principals in the second degreeis the same, the indictment may charge all who are present and abet as principals in the first degree. [page621] Thus, the common law generally drew no distinction between a principal in the first degree (someone who actually committed theoffence) and a principal in the second degree (someone who was actually or constructively present but who only aided and abetted in thecommission of the offence) for the purposes of indictment.

The upshot of this rule was stated in East, Pleas of the Crown (1803), vol. 1, atp. 350: "the blow of one is, in law, the blow of all". The common law did, however, draw a distinction between principals andaccessories. Accessories were those who conspired with the principal in the first degree or who aided and abetted him but were neitheractually nor constructively present at the scene of the crime. See R. v. Smith (1876), 38 U.C.Q.B. 218, at pp. 227-28. Thus, if Thatcheraided and abetted, rather than personally committed, I do not think it is contended that he was necessarily physically present at themurder.

Therefore, his case might well not fall within the old common law rule permitting one charge but two different possible modes ofparticipation in the offence. But this is precisely the distinction that disappeared when Parliament abolished the common law distinctionbetween principals and accessories. As Fauteux J. states in Harder, at p. 493, in relation to s. 21's predecessor: This Imperial statute [24 & 25 Vict. c. 94], later adopted into Canadian law (R.S.C. 1886, c. 145) practically brought to an end thedistinctions between accessories before the fact and principals in the second degree. By the enactment of

section 61, the predecessor of

section 69, these distinctions in the substantive law entirely disappeared from ourcriminal laws when codified in 1892. With them, of course, also disappeared, because being made no longer necessary, the relevantadjective rules related to the framing of the indictment of such persons who, not actually committing the offence charged, were thenmade, by statute, principals and equally party to, guilty of and punishable for the offence as if actually committed by them.

It isunthinkable that, getting rid of the difficulties arising out of these prior distinctions, Parliament would, in the same breath, have creatednew ones by refusing to the Crown the right to indict -- which right it had before, under common and statutory law -- as principalsimpliciter, either as a principal in the second degree or an accessory before the fact, and this, under the regime of this new law holdingeach and all particeps criminis as being nothing less than principals.

Thus, s. 21 has been designed to alleviate the necessity for the Crown choosing between two different forms of participation in acriminal offence. The law stipulates that both forms of participation are not only equally culpable, but should be treated as one singlemode of incurring criminal liability. The Crown is not under a duty to separate the different forms of participation in a criminal offenceinto different counts.

Obviously, if the charge against Thatcher had been separated into different counts, he might well have beenacquitted on each count notwithstanding that each and every juror was certain beyond a reasonable doubt either that Thatcher personallykilled his ex-wife or that he aided and abetted someone else who killed his ex-wife. This is precisely what s. 21 is designed to prevent. In sum, this Court has held that it is no longer necessary to specify in the charge the nature of an accused's participation in the offence:Harder.

Moreover, if there is evidence before a jury that points to an accused either committing a crime personally or, alternatively,

aiding and abetting another to commit the offence, provided the jury is satisfied beyond a reasonable doubt that the accused did one orthe other, it is "a matter of indifference" which [page622] alternative actually occurred: Chow Bew. It follows, in my view, that s. 21precludes a requirement of jury unanimity as to the particular nature of the accused's participation in the offence. Why should the jurorbe compelled to make a choice on a subject which is a matter of legal indifference? (Emphasis added) [67] Moreover, in R. v. Briscoe, 2010 SCC 13 , [2010] 1 S.C.R. 411, [2010] S.C.J.

No. 13, at paras. 13 to 18, the Supreme Courtof Canada had held that Canadian criminal law does not distinguish between the principal offender and parties to an offence indetermining criminal liability, but that the actus reus and mens rea for aiding or abetting, however, are distinct from those of theprincipal offence. In addition, the Supreme Court explained that the actus reus of aiding or abetting is doing or omitting to do somethingthat assists or encourages the perpetrator to commit the offence.

However, the court also noted that the concepts of aiding or abetting aredistinct and that liability could flow from either one.

They further noted that the concept of aiding under the statutory provision generallymeans to assist or help the actor who commits the offence, while to abet includes encouraging, instigating, promoting or procuring thecrime to be committed: Canadian criminal law does not distinguish between the principal offender and parties to an offence in determining criminal liability.Section 21(1) of the Criminal Code makes perpetrators, aiders, and abettors equally liable: 21(1) Every one is a party to an offence who (

a) actually commits it; (

b) does or omits to do anything for the purpose of aiding any person to commit it; or (

c) abets any person in committing it. The person who provides the gun, therefore, may be found guilty of the same offence as the one who pulls the trigger. The actus reus andmens rea for aiding or abetting, however, are distinct from those of the principal offence. The actus reus of aiding or abetting is doing (or, in some circumstances, omitting to do) something that assists or encourages theperpetrator to commit the offence. While it is common to speak of aiding and abetting together, the two concepts are distinct, andliability can flow from either one. Broadly speaking, "[t]o aid under s. 21(1)(

b) means to assist or help the actor. To abet within themeaning of s. 21(1)(

c) includes encouraging, instigating, promoting or procuring the crime to be committed": R. v. Greyeyes, (SCC), [1997] 2 S.C.R. 825, at para. 26. The actus reus is not at issue in this appeal. As noted earlier, the Crown argued attrial that Mr. Briscoe was both an aider and an abettor. The trial judge's finding that Mr. Briscoe performed the four acts of assistancedescribed above is not disputed. Of course, doing or omitting to do something that resulted in assisting another in committing a crime is not sufficient to attract criminalliability. As the Court of Appeal for Ontario wrote in R. v. F. W.

Woolworth Co. (1974), (ON CA), 3 O.R. (2d) 629,"one does not render himself liable by renting or loaning [page623] a car for some legi

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