R. v. Northland Properties et al Date:, 2014 BCPC 298

Citation: R. v. Northland Properties et al Date: 20141212 2014 BCPC 0298 File No: 93703-1 Registry: Kamloops IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. NORTHLAND PROPERTIES CORPORATION, ROBERT JOHN GAGLARDI and ROBERT THOMAS GAGLARDI REASONS FOR SENTENCE OF THE HONOURABLE JUDGE S.R. HARRISON Counsel for the Crown: Mr. D. Keir, Q.C. Counsel for the Accused: Mr. R. Bruneau and Mr. R. Toor Place of Hearing: Kamloops , B.C. Dates of Hearing: January 13 - 15, April 14 and 15, and June 13, 2014 Trial Decision: August 7, 2014

Submissions on Sentencing: October 20, 2014 Date of Judgment: December 12, 2014 [1] The defendants, Northland Properties Corporation (“Northland”) and Robert Thomas “Tom” Gaglardi were convicted after trialof two offences under section 35(1) of the Fisheries Act R.S.C., 1985, c. F-14. The other defendant, Robert John “Bob” Gaglardi, wasacquitted on both counts. The charges were proceeded with summarily. [2] Count one related to unlawfully carrying on a work or undertaking, land clearing, which resulted in the harmful alteration,disruption or destruction of fish habitat on the foreshore of Kamloops Lake.

Count two involved the same offence committed by meansof the placement of fill material to the same effect. Both offences were committed over the period April 1, 2010 to January 25, 2011. [3] The evidence heard and facts found at trial are set out in the reasons for judgment given August 7, 2014. Those reasons will befound at the Provincial Court website under R. v. Northland Properties, Gaglardi and Gaglardi, 2014 BCPC 251 , 2014B.C.P.C. 0251 and form part of these reasons. [4] In brief

summary, Tom Gaglardi, whom I will refer to as Mr. Gaglardi, is the Northland president. Northland is a largecommercial property developer which owns and operates about 200 businesses, including many hotels and restaurants. Northland wasfounded by Bob Gaglardi, father to Tom, and it employs about 12,000 people. The company is headquartered in Vancouver and has morethan a hundred employees in the head office.

At all relevant times Tom Gaglardi was actively involved in the day to day work ofNorthland. [5] Tom Gaglardi was also the family member responsible for directing renovations to an existing bungalow, construction of aresidential addition and other changes to the Gaglardi family property. He did this through the offices of Northland. The property, whichhas been in the Gaglardi family for many years, is located along 700 feet of Kamloops Lake frontage near Savona, B.C. [6] The property was well-treed and in places thickly vegetated. Mature deciduous trees such as cottonwood were prominent andclose to the water.

Many of these trees and the surrounding vegetation were below high water in the spring. This created a valuable fishhabitat which provided food and protection from predators to immature salmon on their way to the Thompson and Fraser Rivers andeventually the sea. [7] Mr. Gaglardi used Northland systems, staff and contractors to design and carry out the work on the project. The projectsuperintendent on site was a Northland contractor, Jim Parks. Mr.

Gaglardi said the project was not very big by Northland standards andestimated the cost between $1,000,000 and $2,000,000, including the $80,000 - $85,000 costs of remediation. [8] As a result of the work performed along the foreshore of the property, a good deal of valuable salmon habitat was altered,disrupted or destroyed. The damage was serious and substantial.

Despite the remediation undertaken by the defendants, this fish habitatwill not be effectively restored for many years, if not decades to come. [9] No regional district building permits were applied for until after the damage was done to the fish habitat. Had such permitsbeen applied for, it is likely that processes would have been engaged which would have prevented the damage to the fish habitat. [10] Cases referred to in submissions of counsel included: R. v. Brown, 2010 BCCA 225 ; R. v. Terroco Industries Ltd.,2005 ABCA 14; R. v. Basso, 2001 BCSC 801; R. v. 0702905 B.C.

Ltd dba Old Town Bay et al., (April 12, 2010) Salmon Arm RegistryNo. 19840-1 (BCPC); R. v. Greater Vancouver Regional District et al., (April 4, 2014) Vancouver Registry No. 217720-1 (BCPC); R.v.Woroby, (2003) 174. C.C.C. (3d) 128 (Man.C.A.); R.v. Larsen and Mission Western Developments Ltd., 2013 BCPC 231 ; R.v. First Prince George Developments Ltd., 2006 BCPC 231 ; R.v. Golden Eagle Ranch Inc., 2003 BCPC 206 . I havealso had regard to R. v. United Keno Hill Mines Ltd., [1980] Y.J. No. 10 (Terr. Ct.). Applicable Sentence Principles [11]

Part XXIII of the Criminal Code sets out the sentencing principles generally applied in sentence proceedings and they haveapplication here.

Section 718.21 provides considerations for the sentencing of organizations. There are also particular considerations forsentencing in environmental cases. [12] In R. v.

Brown, at paragraph 13, the British Columbia Court of Appeal identified the Alberta Court of Appeal decision of R. v.Terroco Industries Ltd. as “the leading case on the principles of sentencing for environmental offences.” Brown endorsed theproposition that sentencing principles for environmental offences require a special approach, and that the courts should be focused on 1)the extent of the defendants’ culpability, 2) any prior record and past involvement with the authorities, 3) the acceptance of responsibilityand remorse, 4) the extent of the damage and harm done and 5) the need for deterrence. [13] Deterrence is said at paragraph 14 of Brown to be a “key component” of sentences for breach of environmental protectionstatutes.

Our Court of Appeal also adopted the observation in Terroco that “when the maximum fines under an environmental statute arehigh, it is a message that low or nominal fines do not meet the goal of the statutes.” [14] The applicable maximum penalty upon

summary conviction under s. 40(1) of the Fisheries Act was at the relevant time a finenot exceeding three hundred thousand dollars on each count for each accused. Maximum penalties have since increased. [15] The Crown has submitted that an appropriate sentence against both offenders on both counts would include fines and penaltiesin the amount of $300,000 in total. The defence has suggested that total fines and penalties in the range of $50,000 to $75,000 wouldmeet the requirements of the case. The parties are agreed that a monetary order should go against the offenders as part of a communityservice order pursuant to s. 79.2(

e) of the Fisheries Act. This order would be to the benefit the British Columbia Conservation

Foundation in its work improving fish habitat. 1. The Degree of Culpability [ 16 ] At paragraph 66 of Terroco Industries , Justice Ritter directed sentencing judges to consider the degree of culpability of the offender.

This involves a rigorous assessment of the facts of the predicate offence “to see where the offender’s conduct lies on the continuum between virtual due diligence and virtual intent.” [ 17 ] At trial, these two defendants submitted that the Crown case had been made out against them, but only on the basis that neither defendant exercised sufficient due diligence in supervising the work done by the project superintendent, Jim Parks. It was suggested in that Mr.

Parks, contrary to the evidence he gave, had exceeded his instructions in clearing the land and placing the fill as he did. [ 18 ] At trial I accepted the evidence of Jim Parks. As I stated at paragraph 71 of the Reasons for Judgment: In consideration of all the evidence heard in the case, I am satisfied that the Crown has made out the case substantially on the basis of the evidence given by Jim Parks.

That evidence has persuaded me to the standard of proof beyond a reasonable doubt that Parks was substantially carrying out the will of these parties when he cleared out the vegetation and used fill material to level the lots, so causing the damage complained of. [ 19 ] I rejected the evidence of Northland employee Scott Harwood and Tom Gaglardi that Jim Parks was not authorised to do the clearing and filling he did on the property.

Neither did I accept Tom Gaglardi’s evidence that he was not actively involved in the project. [ 20 ] At paragraph 76 I said: I conclude that if Tom Gaglardi and Northland did not intend the harm to fish habitat that resulted with this project, they certainly did nothing to inform themselves of their obligations or to engage in processes which might have presented challenges or hampered progress.

There was an element of willfulness here, a desire to get the job done, and if necessary, to seek forgiveness later. [ 21 ] In light of the findings made at trial, I consider that on the continuum between virtual due diligence and virtual intent referred to in Terroco , the degree of culpability of these defendants lies closer to virtual intent. [ 22 ] It should also be noted that some of the large trees along the foreshore were expressly and intentionally ordered by Tom Gaglardi to be taken down without proper examination, assessment or permission.

These removals also contributed to the damage to fish habitat. 2. Prior Record and Past Involvement with Authorities [ 23 ] It was not alleged that either of the defendants had any prior record of convictions or involvement with authorities. That factor is not present in this case. 3. Acceptance of Responsibility and Remorse [ 24 ] It is a well-established mitigating factor on sentence when a defendant pleads guilty and saves the state the time, cost and uncertainty of a trial.

However, it is important to be clear that there is no aggravating factor to be attributed to a defendant who chooses to exercise his or her fundamental right to a trial. [ 25 ] This was not a case where the defendants entered an early guilty plea or any guilty plea at all. There was an acknowledgement of some responsibility made at the start of the trial, on foot only of the failure of these two defendants to exercise due diligence. That position was disputed by the Crown.

In the result, no guilty plea was entered and the trial proceeded. [ 26 ] It was suggested in mitigation that the defendants had cooperated with the investigation. It is not clear to me on the evidence that there was any meaningful cooperation by the defendants with the investigation. To the contrary, I have found that the Northland manager, Mr. Harwood, who was charged with giving Mr. Parks instructions on behalf of Northland, instructed Mr. Park to destroy evidence on the “600” grading plan that linked that plan to both Mr.

Harwood and Northland. [ 27 ] Again, a defendant who chooses not to assist investigators is exercising a citizen’s fundamental right and that cannot be an aggravating feature in the balancing required by the sentencing process. The attempt to procure the destruction of evidence undercut the submission that Northland took responsibility, cooperated with DFO investigators or exhibited meaningful remorse. [ 28 ] There is mitigation to be found in the remedial work performed on the Gaglardi property by the defendants after the fact and in consultation with Fisheries and Oceans Canada (DFO).

This remediation was agreed and executed promptly. The work was performed to the satisfaction of the DFO at an expense to the defendants of approximately $80,000 or $85,000, according to Tom Gaglardi. 4. Damage and Harm [ 29 ] With respect to the damage and harm caused by the commission of the offences to this important salmon habitat, it was expected by the expert witnesses that the remediation will take decades to mend the harm done. For convenience I will restate the findings at paragraphs 78 - 83 of the Reasons for Judgment: Harmful Alteration to the to Fish Habitat

[78] I have been asked to deal with the issue of harmful alteration to the fish habitat at this stage of the proceedings and the extent of thatharm. The Crown has submitted that a massive amount of highly-productive fish habitat was torn out and damaging fill placed on top toa very extensive degree. The defence submitted that the amount of actual harm done is vague and difficult to quantify, but acknowledgessome harm done. [79] I accept the evidence of the two experts called. Dr.

Rosenau is an expert on fresh water fish habitat and salmonid species, withparticular knowledge of the Kamloops, Shuswap and Little Shuswap Lakes and associated salmon runs, such as the massive AdamsRiver sockeye run. David Pehl is a very experienced fisheries biologist who was on the scene when DFO officers first arrived on site. [80] These two expert witnesses gave evidence of the role that the shoreline vegetation plays in sustaining immature fish particularlyduring seasonal high water.

The damage to the fish habitat along the Gaglardi property was over a significant area of the 700 foot beach.The impact is all the more serious given the relatively few places along the banks of Kamloops Lake where such mature cottonwoodgroves offer sustenance and protection to immature salmonids and the length of time it takes to replace a mature stand. [81] Such damage as occurred here tends to be long lasting in its effect. Mr.

Pehl stated that in three or four decades of assessingrestoration activities in this hot, dry climate, he had yet to see a project result in a mature stand of trees at 60cm in diameter, the size ofsome of the stumps left behind by the work on the Gaglardi property. [82] This not a situation where $80 or $85,000 can restore what has been lost, except over a long period of time. [83] Dr. Rosenau compared the changes wrought as going from a very good fish habitat to a moonscape.

Despite the fact that the damageto the fishery is very hard to analyze quantitatively, the available evidence establishes that the destruction of this fish habitat at thislocation is a significant and long lasting loss. [30] The evidence of actual and serious harm to fish habitat has been established on the evidence of Dr. Rosenau and Mr. Pehl. Thatdamage could easily have been avoided by the defendants had they wished to do so. What on-site rehabilitation can be done, has beendone. 5.

Deterrence [31] In Brown (para. 14) and Terrocco (paras. 53 - 54) the courts emphasised the importance of deterrence in sentencing inenvironmental offences. The purpose of deterrence is two-fold: firstly to ensure that these specific defendants are deterred fromcommitting such acts in the future.

Secondly, deterrence also addresses the need to influence and impact other similarly situated personsor enterprises who might risk committing environmental offences for pecuniary or other reasons. [32] Many of the factors mentioned above will play into the assessment of the requirement of specific deterrence for offenders.Acceptance of responsibility, remorse, cooperation with authorities and the negation of financial gain resulting from the breach are allfactors to be taken into account in determining the appropriate penalties required under this head. [33] The Crown submitted that the behaviour of both defendants in this matter fell far short of the standard that parliament, thecourts and society at large expect from businesses and business leaders.

The Crown submitted that the great wealth and prosperity ofboth Northland and Tom Gaglardi should be a factor in setting appropriate penalties towards the higher end of the scale. [34] While admitting the relative wealth of the defendants, defence counsel took issue with this submission and argued that the defendants should not be penalized for their wealth. He relied upon an extract from Clayton C.

Ruby, Sentencing, (8th ed.) (Markham:LexisNexis Canada, 2012) Ch. 11 at pp. 478 - 480: 11.25 It is not permissible to impose a jail sentence merely because someone is “a man of means” to whom a fine would mean “virtuallynothing”. In [Regina v. Johnson (NS CA), [1971] 5 C.C.C. (2d) 541 at p. 543, (N.S.C.A.)], the court said: What concerns the Court deeply is the cardinal principle upon which our criminal justice system … is based, namely, that all persons stand equal before the Court.

It matters not what the race, creed, colour, status in society, whether pauper or rich man,an accused must receive equality of treatment before the law. [35] At page 480, Mr. Ruby also made the following comments: 11.30 In addition to taking into account of a person’s means in order to lower a fine on a person who could not otherwise pay, the finemay sometimes be raised to be sure that the fine does have the effect of punishing. But it should not be scaled up to the point where theappellant would be stripped of a very substantial part of his assets, or where the penalty becomes more serious that the offence.

It shouldnot be scaled up to the point that it is excessive for the offence committed. [36] In Terroco at paragraph 60, Justice Ritter stated, in the context of environmental offences committed by offenders in the oil, gasand petrochemical industries, that: Individuals and corporations engaged in these industries come in all sizes from sole proprietorships to some of the largest multinationalcorporate conglomerates in existence. What will be a severe fine for one offender may be a pittance to another.

The starting point forsentencing a corporate offender must be such that the fine imposed appears to be more than a licensing fee for illegal activity or the costof doing business: Cotton Felts; General Scrap Iron & Metals; Van Waters & Rogers. The other side of this coin must be that, in the

majority of cases, the sentence should not result in economic inviability: United Keno Mines at 50; see also s. 718.21 (

d) of the Criminal Code, R.S.C. 1985, c. C-46 . The penalty must be more than a slap on the wrist but less than a fatal blow. [ 37 ] Counsel for the defendants pointed out that unlike many of the cases referred to by counsel, this was not a situation where the defendants stood to make money as a result of the offence. Northland took no benefit or advantage from the commission of the offence beyond serving the interests of its principals. [ 38 ] It is true that the damaging “improvements” to the property were never intended for a business advantage or for the purpose of generating income.

The benefits that accrued had to do with increased “usefulness” of the lots and widened, sweeping views of Kamloops Lake from the Gaglardi property. Other Mitigating Features [ 39 ] Counsel has pointed out that there has been a good deal of media interest and publicity attached to this case and that the defendants Northland and Tom Gaglardi will feel some deterrent effect through consequent public embarrassment and damage to reputation. No doubt this is correct.

Sentence [ 40 ] An appropriate sentence for each offender must be proportionate to the offence, it must reflect the sentencing principles mentioned above, including the degree of culpability, the harm done and the need for deterrence of these offenders and others who may be similarly situated. [ 41 ] Taking into account all that I must, including the range of penalties imposed in other cases of this type and the relative wealth of the offenders, I am satisfied that an appropriate penalty for Northland Properties Corporation and Robert Thomas Gaglardi will be firstly a fine of $5,000 for each offender on each count.

These fines will be payable to the Clerk of the Court in Kamloops. [ 42 ] Further, having regard to the nature of the offences and the circumstances surrounding their commission, there will also be a community service order pursuant to s. 79.2 (

e) of the Fisheries Act . [ 43 ] Northland Properties Corporation and Robert Thomas Gaglardi will perform community service by paying to the British Columbia Conservation Foundation the sum of $60,000 each. These monies shall be for the purpose of funding projects and activities that promote the conservation and protection of fish or fish habitat in the Thompson River watershed.

The funds shall be expended by that Foundation on such purposes under the direction and with the concurrence of the Department of Fisheries and Oceans at Kamloops, British Columbia. [ 44 ] Total fines and penalties for both offenders together amount to $140,000. I will also hear from counsel on time to pay. _______________________ S.R. Harrison Provincial Court Judge