In an August 2013 decision of the Quebec Superior Court, R.
c. Les Pétroles Global Inc., a company was found guilty
of price fixing based on the criminal conduct of its general
manager who pleaded guilty to the same offence in 2009. The case
marks one of the first decisions that considers the scope of
section 22.2 of the Criminal Code (the organization
liability offence) in the context of a criminal trial on the
merits. The decision is important for two reasons.
First, and as discussed at length in the court's reasons,
the addition of section 22.2 in 2003 represented a departure from
the old common law rule that required the Crown to tie the
underlying criminal conduct to the "directing minds" of
the corporation. The 2003 amendment was prompted by a number of
incidents involving corporations, including the Westray mine
disaster in 1992.
Second, and more importantly, enforcement officials from a
number of agencies, including the Competition Bureau, will point to
this decision to support their view that conduct need not have been
formulated at the highest levels of an organization to give rise to
corporate culpability, and that even conduct engaged in by
mid-level managers is sufficient to convict a corporation.
For a discussion of the May 30, 2012 decision that followed the
preliminary inquiry in this matter, please see our October 2012
Blakes Bulletin. The decision treated in detail the issue
of who can trigger a corporation's liability under section
Les Pétroles Global Inc. (Global) is a retail gasoline
operator with stations located across Eastern Canada. In 2008,
Global was accused of conspiring to fix gasoline prices in
Sherbrooke and Magog between May 2005 and May 2006. Following a
preliminary inquiry in May 2012, Global was committed to trial on
the conspiracy charge. All of the facts necessary to convict for
conspiracy were admitted in this case with the exception of whether
the company's general manager satisfied the "senior
officer" requirement under section 22.2.
The court began by considering the legislative history of
section 22.2. It noted that the parliamentary debates surrounding
the enactment of section 22.2 (through Bill C-45) revealed that
Parliament intended to expand the scope of personnel whose conduct
could result in corporate criminal liability to include mid-level
managers, such as regional or general managers. The court also
considered the language of section 22.2, as well as relevant
academic literature, and determined that Parliament intended to
move away from the restrictive interpretation of the common law
"directing minds" concept, as set out by the Supreme
Court of Canada in Rhône (The) v. Peter A.B. Widener
(The) and in Canadian Dredge and Dock v. The Queen.
In doing so, the court affirmed that the standard for imposing
corporate criminal liability for the conduct of the
organization's personnel is, indeed, lower than the common law
"directing minds" standard and rejected the defence's
arguments that Bill C-45 merely clarified the common law by further
identifying the persons susceptible to being characterized as
In order to determine whether or not the key employees of Global
were "senior officers", the court examined the roles and
responsibilities of those employees and did not rely merely on
their titles or positions within the organization. The court
pointed to a number of factors to support its holding that the
defendant's general manager was, indeed, a "senior
officer": he held the title of general manager for Quebec and
the Maritimes and was responsible for overseeing two-thirds of the
company's stations; he was the third-highest-paid employee with
the company; territory managers under his direct supervision were
responsible for setting gasoline prices; and his superiors had no
involvement in the day-to-day operations of the stations in his
The decision raises a number of implications for Canadian
First, the decision confirms that the conduct of individuals who
do not sit within the highest levels of management still can result
in criminal liability for a company in Canada.
Second, an employee with significant operational authority
rather than traditional decision-making power can be considered a
"senior officer" for the purpose of section 22.2.
Third, cases in which criminal liability can be attached to a
corporation will be highly fact-specific. The line between being a
"senior officer" and a "mere employee" remains
undefined, particularly given the dearth of case law, meaning that
criminal conduct of certain lower-level employees without
managerial or supervisory functions may not be sufficient to result
in criminal liability for their employer.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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