Her Majesty the Queen v. Baldree

[Indexed as: R. v. Baldree]

109 O.R. (3d) 721

2012 ONCA 138

Court of Appeal for Ontario,

Feldman, Blair and Watt JJ.A.

March 2, 2012

Criminal law -- Evidence -- Hearsay -- Police initially in residence to investigate break and enter -- Police disregarding small amount of marijuana as unrelated to break and enter -- Police then discovering cocaine, trafficking quantity of marijuana, digital scale and debt list -- Police charging everyone in apartment with possession of drugs for purpose of trafficking -- Accused also charged with possession of proceeds of crime for cash found in his clothing and his cellphone seized upon arrest -- While still in apartment police officer answering call to accused's cellphone and speaking to caller who wanted to buy drugs -- Caller identifying accused by name and stating that accused had sold him drugs in past -- Trial judge erring in admitting evidence of call as amounting to implied assertion that accused was drug dealer and therefore used for truth of contents of call -- Single call from unknown person not meeting necessity/reliability requirements of principled exception to hearsay rule -- Trial judge also erring in failing to consider whether probative value of call outweighed its prejudicial effect.

The police were present at L's apartment because of a report of a break and enter. They smelled marijuana and found a small amount of the drug, which they disregarded as it was unrelated to their investigation. As the search progressed, the police found a safe containing a large amount of marijuana, cocaine, a digital scale and a debt list. All of the persons in the apartment were charged with possession of drugs for the purpose of trafficking and the accused was also charged with the possession of proceeds of crime after a search disclosed that he was carrying over $200. L, who was also charged with drug offences, claimed that the accused was living at his apartment at the time. The accused claimed that he had merely stayed overnight and denied knowledge of the drugs. The live issue at trial was which of the apartment's residents possessed the drugs. When the accused was arrested, a police officer seized his cellphone. It rang, and a caller asked for the accused by name, stated that the accused had sold drugs to him in the past and asked to buy more drugs. The accused objected to the admission of the evidence of the call at trial on the basis that it was inadmissible hearsay. The trial judge found that the evidence was admissible as non-hearsay circumstantial evidence that the accused was engaged in drug trafficking.

Held, the appeal should be allowed.

Per Feldman J.A.: The trial judge erred when he admitted the evidence of the one call on the basis that it was not hearsay. Although the Crown said at the time that the evidence about the call was admitted that it was not being admitted for the truth of its contents, the Crown later relied upon the call as proof that the accused was a drug dealer. The evidence was hearsay and the single call did not meet the necessity/reliability requirements of the principled exception to the hearsay rule. Necessity was not made out as the police had the caller's address but never tried to contact him or obtain his testimony. There was no basis to say that the caller's belief was reliable without testing the basis for that belief by cross-examination. Finally, before admitting the evidence of one anonymous phone call, the trial judge should have considered whether its probative value outweighed its prejudicial effect, even though defence counsel had not specifically objected on that basis. It could not be said that exclusion of the evidence would not have affected the verdict. A new trial was ordered.

Per Blair J.A. (concurring in the result): The time has come for jurists to spend less time focusing on the characterization of evidence into "hearsay" or "non-hearsay" categories in these types of close-call scenarios and to spend more effort focusing on the principled criteria of necessity/reliability and prejudice vs. probative value. It was unnecessary to cut the "hearsay" Gordian knot to resolve this appeal because the one drug-purchase call tendered in this case would not have survived the necessity/reliability analysis, nor would it have survived the prejudicial effect/probative value analysis that the trial judge should have conducted.

Per Watt J.A. (dissenting): The preponderance of authorities in Canada favour the conclusion that evidence of a drug purchase call is not hearsay and is instead circumstantial evidence of the nature of the business carried on by the person charged. Whether the call was hearsay does not depend on the number of calls of which evidence was given. The key point is the purpose for which the evidence was adduced. The Crown did not introduce the call to prove the truth of its contents. The evidence of the phone call was not hearsay: it is evidence of conduct in words. The call was relevant to show the nature of the business carried on by the accused. The trial judge properly focused on whether the statement was hearsay and for that purpose the necessity/reliability analysis is irrelevant. It is correct that evidence, including non-hearsay evidence, may be excluded if the prejudicial effect of the evidence is out of proportion with its probative value. However, the trial judge did not err in failing to exclude the call on the basis that its prejudicial effect exceeded its probative value as that argument was not made by defence counsel. It is not agreed that had the judge considered the relative probative value versus the prejudicial effect of the evidence, he would have inevitably excluded the evidence of the call. The trial judge did not improperly use the evidence of the phone call in convicting the accused. Even if the trial judge should not have admitted the evidence, there was no miscarriage of justice or unfairness by its admission and use as the cumulative effect of the several other pieces of circumstantial evidence accepted by the trial judge confirmed the verdict of guilt.

APPEAL by the accused from the conviction entered on October 7, 2009 by McKinnon J. of the Superior Court of Justice.

Cases referred to

R. v. Edwards (1996), 26 O.R. (3d) 736, [1996] 1 S.C.R. 128, [1996] S.C.J. No. 11, 132 D.L.R. (4th) 31, 192 N.R. 81, J.E. 96-349, 88 O.A.C. 321, 104 C.C.C. (3d) 136, 45 C.R. (4th) 307, 33 C.R.R. (2d) 226, 29 W.C.B. (2d) 366, affg (1994), 19 O.R. (3d) 239, [1994] O.J. No. 1390, 73 O.A.C. 55, 91 C.C.C. (3d) 123, 34 C.R. (4th) 113, 22 C.R.R. (2d) 29, 24 W.C.B. (2d) 322 (C.A.); R. v. Kearley, [1992] 2 A.C. 228, [1992] 2 All E.R. 345, [1992] 2 W.L.R. 656, 95 Cr. App. Rep. 88, 136 S.J. L.B. 130 (H.L.); R. v. Lucia, [2010] O.J. No. 3154, 2010 ONCA 533; R. v. Ly, [1997] 3 S.C.R. 698, [1997] S.C.J. No. 90, 219 N.R. 237, J.E. 97-2094, 206 A.R. 309, 119 C.C.C. (3d) 479, 36 W.C.B. (2d) 136; R. v. Owad (1951), 102 C.C.C. 155 (Ont. C.A.); R. v. Wilson (1996), 29 O.R. (3d) 97, [1996] O.J. No. 1689, 90 O.A.C. 386, 107 C.C.C. (3d) 86, 47 C.R. (4th) 61, 31 W.C.B. (2d) 49 (C.A.), consd Other cases referred to Bannon v. The Queen (1995), 185 C.L.R. 1, 132 A.L.R. 87 (Aus. H.C.); Lord Advocate's Reference (No. 1 of 1992), 1992 S.C.C.R. 724, 1992 SC (JC) 179 (Scot. H.C. Just.); R. v. Abbey, [1982] 2 S.C.R. 24, [1982] S.C.J. No. 59, 138 D.L.R. (3d) 202, 43 N.R. 30, [1983] 1 W.W.R. 251, J.E. 82-762, 39 B.C.L.R. 201, 68 C.C.C. (2d) 394, 29 C.R. (3d) 193, 8 W.C.B. 81; R. v. Bevan, [1993] 2 S.C.R. 599, [1993] S.C.J. No. 69, 104 D.L.R. (4th) 180, 154 N.R. 245, J.E. 93-1203, 64 O.A.C. 165, 82 C.C.C. (3d) 310, 21 C.R. (4th) 277, 20 W.C.B. (2d) 131; R. v. Brooks, [2000] 1 S.C.R. 237, [2000] S.C.J. No. 12, 2000 SCC 11, 182 D.L.R. (4th) 513, 250 N.R. 103, J.E. 2000-417, 129 O.A.C. 205, 141 C.C.C. (3d) 321, 30 C.R. (5th) 201, 45 W.C.B. (2d) 46; R. v. Cook, [1978] B.C.J. No. 1125, 10 B.C.L.R. 84, 46 C.C.C. (2d) 318 (C.A.); R. v. Côté, [2011] 3 S.C.R. 215, [2011] S.C.J. No. 46, 2011 SCC 46, 421 N.R. 112, 2011EXP-3108, J.E. 2011-1739, EYB 2011-196883, 87 C.R. (6th) 1, 276 C.C.C. (3d) 42, 97 W.C.B. (2d) 17; R. v. Fialkow, [1963] O.J. 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(6th) 371, 59 W.C.B. (2d) 426; R. v. O'Brien, [2011] 2 S.C.R. 485, [2011] S.C.J. No. 29, 2011 SCC 29, 304 N.S.R. (2d) 383, 417 N.R. 52, EYB 2011-191582, 2011EXP-1828, J.E. 2011-1013, 270 C.C.C. (3d) 450, 335 D.L.R. (4th) 94, 95 W.C.B. (2d) 553, 85 C.R. (6th) 216; R. v. Potvin, [1989] 1 S.C.R. 525, [1989] S.C.J. No. 24, 93 N.R. 42, J.E. 89-521, 21 Q.A.C. 258, 47 C.C.C. (3d) 289, 68 C.R. (3d) 193, 42 C.R.R. 44, 7 W.C.B. (2d) 41; R. v. Seaboyer, [1991] 2 S.C.R. 577, [1991] S.C.J. No. 62, 83 D.L.R. (4th) 193, 128 N.R. 81, J.E. 91-1312, 48 O.A.C. 81, 66 C.C.C. (3d) 321, 7 C.R. (4th) 117, 6 C.R.R. (2d) 35, 13 W.C.B. (2d) 624; R. v. Singh, [2006] EWCA Crim. 660, [2006] 170 J.P. 222 (C.A.); R. v. Twist, [2011] All E.R. (D) 102 (May), [2011] EWCA Crim. 1143 (C.A.); R. v. Vetrovec, [1982] 1 S.C.R. 811, [1982] S.C.J. No. 40, 136 D.L.R. (3d) 89, 41 N.R. 606, [1983] 1 W.W.R. 193, J.E. 82-563, 67 C.C.C. (2d) 1, 27 C.R. (3d) 304, 7 W.C.B. 477; R. v. Wray, [1971] S.C.R. 272, [1970] S.C.J. No. 80, 11 D.L.R. (3d) 673, [1970] 4 C.C.C. 1, 11 C.R.N.S. 235; Walton v. The Queen (1989), 1991 ABCA 261, 166 C.L.R. 283, 84 A.L.R. 59 (Aus. H.C.) Statutes referred to Canadian Charter of Rights and Freedoms, s. 8 Criminal Justice Act 2003 (U.K.), 2003, c. 44 [as am.] Rules and regulations referred to Federal Rules of Evidence (U.S.), art. VIII, rules 801, (a), (c), 802 Authorities referred to Birch, Diane, "Criminal Justice Act 2003 (IV) Hearsay: Same Old Story, Same Old Song?" (2004), Crim. L. Rev. 556 Broun, Kenneth S., ed., George E. Dix et al., McCormick on Evidence, 6th ed. (St. Paul, MN: Thomson/West, 2006) Cross, R., "What should be done about the Rule Against Hearsay?" (1965), Crim. L. Rev. 68 Dennis, Ian, The Law of Evidence, 2nd ed. (London: Sweet & Maxwell, 2002) Hill, S. Casey, David M. Tanovich and Louis P. Strezos, McWilliams' Canadian Criminal Evidence, 4th ed., looseleaf (Aurora, Ont.: Canada Law Book, 2011) Koch, Frederick W.J., "The Hearsay Rule's True Raison d'Être: Its Implications for the New Principled Approach to Admitting Hearsay Evidence" (2006), 37 Ottawa L. Rev. 249 Law Commission, Law Commission Report No. 245, Evidence in Criminal Proceedings: Hearsay and Related Topics, Cm. 3670 (London: Stationary Office, 1997) Roberts, Paul, and Adrian Zuckerman, Criminal Evidence (Oxford: Oxford University Press, 2004) Williams, Charles Robert, "Implied Assertions in Criminal Cases" (2006), 32 Monash U.L. Rev. 47

Michael Davies, for appellant. Brian G. Puddington, for respondent.

1WATT J.A. (dissenting): -- A police officer answered a call made to Chris Baldree's cellphone police had seized when they arrested Baldree on several drug charges. The caller wanted to buy and have delivered to a local address an ounce of "weed". Posing as Baldree's successor, the officer agreed to deliver the drugs at the price Baldree usually charged, but didn't make the delivery.

2The evidence adduced at Baldree's trial on the drug and related charges included the officer's version of the conversation with the unknown caller. The principal ground advanced on Baldree's appeal against the convictions recorded at trial has to do with the admissibility and judge's use of the officer's evidence about the call to buy drugs.

3These reasons explain my conclusions that the evidence about the call was properly admitted and not misused by the trial judge and that Baldree's appeal from conviction should fail.

4The reasons also explain why I disagree with my colleagues, whose reasons I have had the benefit of reading. They and I part company on three issues. I do not agree with them (i) that the evidence of the telephone call was hearsay, thus requiring a listed or principled exception to justify its reception; (ii) that the trial judge erred in failing to exclude the telephone call as evidence on the basis, not advanced at trial, that its prejudicial effect exceeded its probative value; and (iii) that the trial judge improperly used the evidence of the telephone call in finding the appellant's guilt proven beyond a reasonable doubt. The Background Facts

5A brief canvass of the circumstances that led to the appellant's arrest will provide the necessary backdrop.

The setting

6Valerie Stanley was the landlady of an apartment building in Cornwall. Eric Lepage was a tenant. A condition of Lepage's lease required him to notify Stanley if anyone else was living in his apartment. A previous occupant of Lepage's apartment had been asked to leave because the odour of burning marijuana pervaded the building. Other tenants complained about the smell.

7Eric Lepage did not notify Stanley that anyone else had moved into the apartment after the previous occupant had been expelled.

The suspicious activities

8Eric Lepage left his apartment around 5:30 a.m. and returned from his job around 6:00 p.m. each weekday. Stanley knew about Lepage's work-week routine.

9On May 11, 2006, Stanley noticed a strange vehicle, a black Cadillac, repeatedly entering and leaving the driveway of the apartment building. She approached the driver and asked whether she could help him. The driver told Stanley that he was looking for Lepage's roommate. Stanley knocked on the door to Lepage's apartment. No one responded. She then told the driver of the black Cadillac that no one was at home in Lepage's apartment. Stanley drove away.

10Stanley grew increasingly suspicious about the presence of the strange automobile around the apartment building. A few minutes later, she returned to the apartment building. She saw the black car nearby again and noticed that the patio door to Lepage's apartment was open although it had been closed before.

11Stanley thought that someone might be breaking into Lepage's apartment. She called the police to report a suspected break and entry.

The police response

12The police responded quickly to Stanley's 911 call. She gave the officers a key and permission to enter Lepage's apartment.

The initial discussion

13Police officers went to the door of Lepage's apartment. As they entered or were about to enter, the appellant appeared at the door, brushing his teeth. The appellant explained that he lived with his uncle, a Cornwall police officer, but was staying in the apartment for the rest of the month. He told the police that no one else was in the apartment.

14When the officers entered the apartment, they smelled freshly burned marijuana and saw rolling papers and some small buds in an ashtray. They flushed the marijuana down the toilet because they were there only to investigate a suspected break and entry.

The search

15To find out whether anybody else was in the apartment, the police looked around. In the master bedroom, they found three people. Adam Peace was on a computer. Chris Anderson and Karyne Sauvé were sitting on the bed. The closet of this room was full of clothes and toiletries.

16In a smaller bedroom, police noticed two lazy-boy chairs and a tote bag containing some clothes. Otherwise, the room appeared unoccupied. When the officer opened a closet door in this room, he saw an open safe. In the safe was some cocaine. In a box, the officer found more than a pound of marijuana, a digital scale, a spoon to which some cocaine residue adhered and a debt list.

The arrests

17Investigators arrested everyone in the apartment. Each was charged with possession and possession for the purpose of trafficking in cocaine and marijuana. When the appellant was searched as an incident to his arrest, officers found $230 in his pocket. The appellant was also charged with possession of the proceeds of crime. The police also seized the appellant's cellphone.

18When he returned home from work early in the evening of May 11, 2006, police arrested Eric Lepage on the same charges laid against the others.

19Investigators released Adam Peace and Karyne Sauvé unconditionally after further questioning at the police station.

The telephone call

20The cellphone seized from the appellant rang as the lead investigator was making a list of the things seized from the apartment and the appellant. The officer answered the phone. The caller wanted to speak to the appellant and to buy an ounce of "weed". When the officer asked about the price, the caller said that the appellant usually charged him $150 for that amount. The officer explained that he was running the appellant's operation and would deliver the "weed", as the caller had asked, at the appellant's usual price. The officer did not make the delivery nor did the police visit the address where the delivery was to be made.

Lepage's account

21Eric Lepage testified as a witness for the prosecution. The charges laid against him on May 11, 2006 had not been resolved when he testified at the appellant's trial.

22According to Eric Lepage, the appellant moved into Lepage's apartment on May 5 or 6, 2006. The appellant wanted some freedom from the restrictions imposed by his uncle. Lepage did not notify Ms. Stanley of the appellant's occupancy of the appellant's second bedroom because Ms. Stanley had been away on vacation. Lepage knew Anderson, Peace and Sauvé, but none of them had been to his apartment before the appellant arrived a few days earlier.

23Eric Lepage denied having, using or trafficking in cocaine or marijuana. He said he knew nothing about the drugs found in the second bedroom of his apartment.

The appellant's version

24The appellant said he had slept at Lepage's apartment on May 11, 2006, because he and Lepage had been out drinking that night at a local bar. The appellant's uncle required him to be home by 1:00 a.m. or sleep elsewhere. He denied having any difficulty with his uncle or adhering to the rules his uncle imposed.

25The appellant testified that he was living with his uncle in May 2006. He was not living in Lepage's apartment nor did he have any property there. The other persons in the apartment when the police arrived, Peace, Anderson and Sauvé, had arrived earlier on May 11, 2006. None of them had stayed overnight on May 11, 2006.

26The appellant denied knowledge of the drugs and related paraphernalia found in the closet of the second bedroom. He also denied telling the police that nobody else was in the apartment when the officers arrived. The Reasons of the Trial Judge

27The trial judge accepted Lepage's evidence about the appellant's occupation of the apartment and concluded, on all the evidence, that the appellant had knowledge, custody of and control over the drugs and associated paraphernalia found in the second bedroom. Trial counsel agreed that the amount of drugs found supported the conclusion that possession of the drugs was for the purpose of trafficking.

28The trial judge did not believe the appellant's evidence nor did the appellant's version of events raise a reasonable doubt in the trial judge's mind about his guilt. The judge was satisfied, on the whole of the evidence, that the appellant's guilt had been established beyond a reasonable doubt. The Grounds of Appeal

29In his factum, Mr. Davies advanced three grounds of appeal on the appellant's behalf. He submitted that the trial judge was wrong in (i) admitting into evidence the drug purchase call and using it as evidence to establish the appellant's guilt; (ii) assessing the credibility of Lepage and the reliability of his evidence; and (iii) assessing the credibility of the appellant.

30In oral argument, Mr. Davies did not pursue the third ground. He was right not to do so.

Ground #1: The admissibility and use of the drug purchase call

31The circumstances in which the drug purchase call took place have been described already. Their repetition would serve no useful purpose. Of some value, however, is a brief recapture of the positions advanced at trial when this evidence was tendered, as well as the use the trial judge made of it in reaching his conclusion that the appellant's guilt had been proven with the necessary degree of certainty.

The positions at trial

32When the lead investigator was about to give evidence regarding the drug purchase call, counsel for the appellant at trial (who was not Mr. Davies) objected on the ground that the evidence was inadmissible hearsay. The prosecutor responded that she was not tendering the evidence to prove the truth of any matter asserted, but rather to demonstrate the nature of the activity on the appellant's cellphone and to establish that a telephone request or order took place.

33The trial judge admitted the evidence provisionally, not to prove that the appellant was trafficking in drugs, but rather as an item of circumstantial evidence "of drug trafficking". The judge made it clear that he would hear further submissions about admissibility after trial counsel had the opportunity to review the relevant authorities.

34Trial counsel for the appellant reiterated his hearsay objection with little elaboration. He contended that the failure of investigators to go to the address specified in the call to determine its legitimacy deprived the evidence of any probative value.

35The prosecutor described the telephone call as the strongest item of evidence in the case against the appellant. She contended that the call to the appellant's cellphone seeking an ounce of marijuana was a piece of evidence that tended to link the appellant to the drugs found in Lepage's apartment and the purpose associated with their possession.

The ruling of the trial judge

36In his reasons for judgment, the trial judge explained the basis upon which he had admitted the evidence of the drug purchase call and its role in the prosecutor's attempt to establish the appellant's guilt:

Earlier in this trial, I held that the evidence of the drug call was admissible evidence relying on the authorities of R. v. Ly [1997] 3 S.C.R. 698 and R. v. Edwards (1994) 91 C.C.C. (3d) 123 (Ont. C.A.).

Whether these calls can be referred to as admissible hearsay or simply statements of state of mind, the law holds that they are admissible as circumstantial evidence to indicate a person engaged in drug trafficking. They are not tendered in evidence for the truth of the fact that the individual phoning is in fact the individual whom the individual states to be or that the individual in fact will carry out the trafficking of the drugs. As stated, it is circumstantial evidence of an individual engaged in the trafficking of drugs.

The positions on appeal

37For the appellant, Mr. Davies submits that the threshold issue to decide is whether the drug purchase call is hearsay. He says that the call is an implied assertion that the appellant is a drug dealer. And according to the House of Lords in R. v. Kearley, [1992] 2 A.C. 228, [1992] 2 All E.R. 345 (H.L.), implied assertions are hearsay.

38Mr. Davies acknowledges that Canadian authorities such as R. v. Edwards (1994), 19 O.R. (3d) 239, [1994] O.J. No. 1390 (C.A.), affd (1996), 26 O.R. (3d) 736, [1996] 1 S.C.R. 128, [1996] S.C.J. No. 11; R. v. Nguyen, 2003 BCCA 556, [2003] B.C.J. No. 2496, 180 C.C.C. (3d) 347 (C.A.), at para. 17; and R. v. Ly, [1997] 3 S.C.R. 698, [1997] S.C.J. No. 90, at para. 3, characterize drug purchase calls as non-hearsay.

39Mr. Davies contends that if the drug purchase call in this case is characterized as hearsay, the evidence is presumptively inadmissible. No listed or principled exception would permit its admission. On the other hand, if the evidence is characterized as non-hearsay, it should have been excluded because its probative value as non-hearsay is overborne by its prejudicial effect.

40For the respondent, Mr. Puddington says that the drug purchase call is rightly characterized and admitted as non- hearsay. The decision in Kearley does not reflect Canadian law. We characterize implied assertions as non-hearsay. The trial judge was never asked to exclude the evidence on the ground that its prejudicial effect exceeded its probative value. In any event, the trial judge's reasons reflect no improper use of this evidence.

The governing principles

41The issue the appellant raises concerns the admissibility of a single drug-purchase call made to the appellant's cellphone shortly after his arrest. In a prosecution for possession of controlled substances for the purpose of trafficking, drug purchase calls are relevant and material. Whether evidence of drug purchase calls should be received at trial depends upon whether their reception is generally barred by the hearsay rule.

42The authorities that consider whether drug purchase calls are reached by the hearsay rule, or if they are, whether the calls should be admitted by exception or excluded on some other basis do not achieve even the most modest level of consistency or clarity. In the faint hope that these reasons will achieve one or the other, it is helpful, as always, to return to basics.

The identification of hearsay

43The value of testimony depends on four factors: (i) perception; (ii) memory; (iii) narration; and (iv) sincerity. Kenneth S. Broun et al., McCormick on Evidence, 6th ed. (St. Paul, MN: Thomson/West, 2006), 245, at p. 125

44To encourage witnesses to make their best efforts and to expose inaccuracies that might be present due to any of these factors, we impose three conditions under which witnesses are required to testify, at least as a general rule: (i) the oath or similar equivalent; (ii) personal presence at trial; and (iii) cross-examination. The hearsay rule seeks to ensure compliance with these essential conditions. When any of the conditions is absent, the hearsay rule may form the basis for exclusion of the evidence.

45In the paradigmatic hearsay situation, two "witnesses" are involved. One, an in-court witness, meets all three ideal conditions for giving the testimony, but simply recounts or repeats what the second "witness" said. The second "witness", the first-hand observer, is the out-of-court declarant whose statement, as reported by the in-court witness, complies with none of the ideal conditions, but contains the critical information.

46In cases like this, where the prosecutor introduces, in court, through one person what another person said out of court, four elements are involved in the determination of whether the hearsay rule is engaged: (i) a declarant; (ii) a recipient; (iii) a statement; and (iv) a purpose.

47When the hearsay rule is offered as an objection to the admissibility of an item of evidence that is both relevant and material, a critical first step, regrettably overlooked with unwarranted haste in many instances, is whether the proposed evidence is actually hearsay. Every out-of-court statement is not hearsay: R. v. Khelawon, [2006] 2 S.C.R. 787, [2006] S.C.J. No. 57, 2006 SCC 57, at para. 56.

48In most cases where the hearsay rule is offered as a bar to the admissibility, no controversy will surround the first two elements and little more controversy, the third. The declarant is the maker of the out-of-court statement. The recipient is the person to whom the declarant spoke, or at least someone who overheard the declarant speak, and a witness in the proceedings. The statement is what was said or written, the precise words of which or whether anything was said, may be controversial.

49The critical defining feature of the exclusionary hearsay rule is the purpose for which the declarant's statement is being introduced through the recipient, a witness at trial. Did the declarant want the recipient to act on the statement, to do something as a consequence of what the declarant said? Or, did the declarant want the recipient to do or not do something on the basis that the statement was true?

50The hearsay rule is only engaged where the purpose for which the statement is offered is to prove the truth of what was said. If the purpose of introducing the statement is not to prove the truth of its contents, but rather, for example, to show that the recipient had notice, knowledge or motive, then the hearsay rule is not implicated and will not bar admissibility. Where the statement is tendered to prove the truth of its contents, however, the hearsay rule renders the statement presumptively inadmissible. The statement may only be admitted under a traditional or the principled exception to the exclusionary rule: Khelawon, at para. 42.

Implied assertions

51The concept of an "implied assertion" is, at best, "a somewhat unfortunate expression". [See Note 1 below] It has also been described as a "legalistic backwater . . . the home of sophistry and the graveyard of common sense". [See Note 2 below]

52An implied assertion is a statement not intended by the declarant to be assertive of the fact it is tendered to prove. For example, to assist in proving X was present at a place at a certain time, a witness testifies that she or he heard someone at the place and time say "Hello X". (i) Drug purchase calls as implied assertions

53Canadian courts have dealt with evidence of drug purchase calls and determined their admissibility in the context of objections taken on hearsay grounds. Reference to implied assertions, and whether implied assertions fall within or are not reached by the hearsay rule, has played little or no role in these decisions. Treating the callers' requests as implicitly asserting the fact that D was a supplier of drugs would constitute an implied assertion.

54Out-of-court statements that directly assert a fact, offered through the recipient to prove that fact, are hearsay and presumptively inadmissible. A canvas of the authorities that consider whether implied assertions, in particular drug purchase calls, fall foul or escape the grasp of the hearsay rule reveals mixed results, often without any principled analysis. (ii) The Canadian authorities

55In Edwards, police seized a cellphone and pager belonging to the appellant. In the several hours following the seizure, police received several pager messages and telephone calls. When the police answered the telephone or returned the pager message, many of the individuals asked for the appellant. Some asked for crack cocaine. The trial judge admitted the evidence as non-hearsay to demonstrate the nature of the business in which the appellant was involved.

56This court dismissed Edwards' appeal on the issue of the admissibility of the cellphone calls. McKinlay J.A., whose judgment on the issue is that of the majority, concluded, at pp. 248-49 O.R.:

With respect to the issue of hearsay, the trial judge held that the evidence was not tendered for the truth of its contents, but to show the nature of the business carried on by the appellant. I agree. In this case the requests for drugs would only constitute hearsay evidence if they were tendered to show that the callers did, in fact, desire to purchase crack cocaine. However, the real issue is not whether such requests contained truths or falsehoods, but whether they were in fact made. In this case the fact that the requests were made can only be relevant to determining the nature of the activities of the appellant, who was intended to respond to the requests: see R. v. Fialkow, [1963] 2 C.C.C. 42 at p. 44, 40 C.R. 151 (Ont. C.A.).

However, even if these requests could be considered hearsay, the Supreme Court of Canada has recently in R. v. Khan, [1990] 2 S.C.R. 531, 59 C.C.C. (3d) 92, and in R. v. Smith, [1992], 2 S.C.R. 915, 75 C.C.C. (3d) 257, adopted the dissenting reasons of Lord Donovan in Myers v. Director of Public Prosecutions, [1965] A.C. 1001, [1964] 1 All E.R. 877 (C.C.A.), expanding the exceptions to the hearsay rule to include evidence which is both necessary and reliable. In my view, the evidence in issue fulfils these criteria. It was necessary to prove the nature of the appellant's drug activities, and they could not have been proven in this case in any other was that was available to the police. They did not know the identity of the callers, and, in any event, it is unlikely the callers would have testified if their identity had been known. The evidence is reliable, because it was made under circumstances which negate the possibility that the requests were spurious ones. The callers were led to believe that the persons to whom they were speaking (the police) were speaking on behalf of the appellant. The decision of the majority was affirmed on other grounds by the Supreme Court of Canada.

57In R. v. Wilson (1996), 29 O.R. (3d) 97, [1996] O.J. No. 1689 (C.A.), a police officer testified that while at the appellant's apartment executing a search warrant, a man came to the door, asked for "Rob" and sought to buy some drugs. The trial judge admitted the evidence on the basis of Edwards. This court disagreed. At pp. 104-105 O.R., McMurtry C.J.O. wrote:

In the case before us, it was dangerous to allow into evidence the police officer's testimony that one individual had attended at the appellant's apartment seeking to buy drugs. The problem is best illustrated by an excerpt from the trial judge's charge:

Obviously you would not and could not convict a person of being a drug trafficker only on the evidence that someone came to his door looking for him and wishing to buy drugs from him. That certainly would not be an appropriate conviction if it was based on that evidence alone. Anyone could do that or could be put up to doing that for a variety of reasons, some legitimate, some not. That evidence alone therefore would not justify a conviction. However, you are entitled to consider that evidence in conjunction with all of the other evidence with respect to the nature of the accused's activities in the apartment and if the totality of all of the evidence convinces you of the accused's guilt then so be it. If on the other hand you conclude that the totality of the evidence [against] the accused is unconvincing or if it raises a reasonable doubt then of course you will find him not guilty because it would be unsafe and inappropriate to convict on the basis of the hearsay evidence alone.

It would be unsafe to convict on this type of hearsay evidence alone, or together with other evidence. It should, therefore, not have been admitted into evidence.

58In R. v. Lucia, [2010] O.J. No. 3154, 2010 ONCA 533, police seized a cellphone from the appellant when they arrested her for possession of cocaine for the purpose of trafficking. A police officer answered two calls from persons who asked about the purchase of crack cocaine. The court concluded, in para. 7:

In our view, the evidence was not tendered for the truth of the statements made by the caller on the telephone but as circumstantial evidence of the nature of the business carried on by the appellant. The evidence was therefore admissible.

59In British Columbia, the prevailing view seems to be that drug purchase calls are non-hearsay: R. v. Cook, [1978] B.C.J. No. 1125, 46 C.C.C. (2d) 318 (C.A.), at p. 320 C.C.C.; and R. v. Nguyen, supra, at paras. 11 and 17.

60In R. v. Ly, supra, the only issue raised on an appeal as of right was the admissibility of a conversation between an unidentified person and a police officer, in which the unidentified person arranged to deliver drugs to the police officer at a designated time and place. The trial judge had excluded the evidence as hearsay. The Alberta Court of Appeal ordered a new trial on an appeal by the Crown. In a brief oral judgment, the Supreme Court of Canada concluded that the evidence was non-hearsay. McLachlin J. said, at para. 3:

The telephone conversation was admissible. It was a statement of intention, or a statement tendered to establish the alleged drug transaction, and hence not tendered for the truth for its contents. Accordingly, it was not hearsay. The telephone conversation is merely one of the circumstances which, combined with others, may suffice to establish that the appellant, when he appeared at the designated time and place, in possession of the drugs, did so for the purpose of trafficking. Any frailties in relation to the connection between the appellant and the telephone conversation go to weight and not admissibility.

(iii) The U.K. authorities

61In Kearley, a majority of the House of Lords concluded that drug purchase calls were inadmissible hearsay. For the majority, it made no sense to permit the prosecution to escape the rigours of the hearsay rule simply because the declarant's words implied, rather than expressly stated, a particular fact. The minority thought that the majority's decision defied common sense and preferred to characterize the calls as circumstantial evidence from which the jury could infer that Kearley was a drug dealer.

62The majority decision in Kearley has been repeatedly criticized and was statutorily overtaken by the enactment of the Criminal Justice Act 2003 (U.K.), 2003, c. 44. Implied assertions are no longer excluded as hearsay: R. v. Singh, [2006] EWCA Crim. 660, [2006] 170 J.P. 222 (C.A.); and R. v. Twist, [2011] EWCA Crim. 1143, [2011] All E.R. (D) 102 (May) (C.A.). (iv) Australia

63Prior to the decision of the High Court in Walton v. The Queen (1989), 1991 ABCA 261, 166 C.L.R. 283, 84 A.L.R. 59 (Aus. H.C.), the balance of Australian authority favoured the view that the hearsay rule, while strict in its application, did not extend to implied assertions. In Walton, however, and in later cases following its lead, the High Court altered course in favour of the view that the hearsay rule did extend to implied assertions. Some members of the court favoured a flexible approach to admissibility rooted in reliability. In Bannon v. The Queen (1995), 185 C.L.R. 1, 132 A.L.R. 87 (Aus H.C.), the court affirmed the applicability of the hearsay rule to implied assertions, but retrenched to a strict approach to admissibility.

64More recently, statutory authority has altered the landscape in Australia as it did in the United Kingdom. Under the uniform Evidence Acts, the hearsay rule expressly does not extend to implied assertions: see C.R. Williams, "Implied Assertions in Criminal Cases" (2006), 32 Monash U.L. Rev. 47, at p. 64. (v) The United States

65Under the Federal Rules of Evidence, Rule 801 enacts several definitions that apply to art. VIII, Hearsay. Rule 801(a) defines a "statement" as "an oral or written assertion or nonverbal conduct of a person, if it is introduced by the person as an assertion". The term "assertion" is not defined. Rule 801(c) defines "hearsay" as "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted". Rule 802 enacts a general exclusionary rule: hearsay is not admissible except as the Federal Rules of Evidence or other rules prescribed by the Supreme Court permit its reception.

66The hearsay definition in Rule 801 of the Federal Rules of Evidence is in effect in the federal courts in the United States. The definition, which is followed as well by most states, consists of two major elements: (i) a statement; (ii) offered to prove the truth of an assertion. The definition is affirmative in its form. Under it, an out-of-court assertion, offered to prove the truth of the matter asserted, is hearsay: McCormick on Evidence, 246, at pp. 128-29.

67The definition of "hearsay" in Rule 801(c) does not say, in terms, that everything not included in the definition is not hearsay, but, according to the advisory committee's note, that was the intended effect of the rule: Adv. Comm. Note, Fed. R. Evid. 801(a); McCormick on Evidence, 246, at p. 129. In other words, according to the rules' definition, out-of-court conduct, whether verbal or non-verbal, is not hearsay if it is not an assertion or, even if it is assertive, if it is not offered to prove the truth of the matter asserted. Nothing is an assertion unless it is intended by the declarant to be an assertion. And nothing is hearsay unless it is an assertion and offered to prove the truth of what is asserted.

The principles applied

68I would not accede to this ground of appeal.

69Whether implied assertions, in particular drug purchase calls, should be characterized as hearsay or viewed as non- hearsay is an issue that is neither free from difficulty nor the subject of principled analysis in our jurisprudence. For the most part, evidence of drug purchase calls seems generally to be admitted, either as non-hearsay or as hearsay that is both necessary and reliable.

70In Ontario, the preponderance of authority favours the conclusion that evidence of drug purchase calls is non-hearsay, circumstantial evidence of the nature of the business carried on by the person charged: Lucia, at para. 7; Edwards, at pp. 248-49 O.R. That said, in Edwards, McKinlay J.A. went on to hold that, even if the evidence should be considered hearsay, it was admissible as necessary and reliable: Edwards, at p. 249 O.R.

71In Wilson, this court concluded that evidence of a single request to buy drugs formed an unsafe basis upon which to convict Wilson. The court referred to "this type of hearsay evidence" and appeared to place particular emphasis on the fact that the evidence revealed a single call, unlike Edwards, where evidence of several calls had been adduced.

72Whether evidence of drug purchase calls is non-hearsay or hearsay does not depend on the number of calls of which evidence is given. The evidence is either hearsay or it is not. Critical to a proper characterization is a determination of the purpose for which the evidence is adduced, not the number of calls involved.

73A review of the reasons of this court in Wilson also makes it clear that the discussion of the admissibility of the drug purchase request was obiter because the court had already concluded that the failure of the trial judge to permit a challenge for cause vitiated the appellant's conviction. Further, the decision in Wilson appears to have been overtaken by the decision of the Supreme Court of Canada in Ly that held evidence of a single drug purchase call was admissible as non- hearsay: Ly, at para. 3.

74The appellant grounds his case for the characterization of the evidence of the drug purchase call as hearsay on the reasoning of the majority of the House of Lords in Kearley.

75Setting to one side the statutory reversal of Kearley by the Criminal Justice Act 2003, it is worth notice that in a Scottish appeal soon after Kearley was decided, Lord Hope indicated approval of the dissenting speeches in Kearley. He concluded that the existence of a pool of customers seeking to buy drugs from Kearley was "direct evidence" of a relevant fact. This conclusion, Lord Hope said, "would cause no surprise in Scotland": Lord Advocate's Reference (No. 1 of 1992), 1992 S.C.C.R. 724, 1992 SC (JC) 179 (Scot. H.C. Just.), at p. 741 S.C.C.R.

76Some have argued that the majority's reasoning in Kearley collapses quickly into a reductio ad absurdum according to which virtually all evidence of out-of-court statements could be argued to be hearsay, thus rendering the exclusionary rule against hearsay a nonsense: see, for example, Paul Roberts and Adrian Zuckerman, Criminal Evidence (Oxford: Oxford University Press, 2004), at p. 590. Others have described the exclusion of this highly probative evidence of drug purchase calls as a technical and counterintuitive application of the hearsay rule: Ian Dennis, The Law of Evidence, 2nd ed. (London: Sweet & Maxwell, 2002), at p. 569.

77The rule excluding hearsay is intended to enhance the accuracy of the court's findings of fact by ensuring that only reliable evidence is received. The central reason for the presumptive exclusion of hearsay is the general inability to test its reliability: Khelawon, at para. 2. Hearsay evidence may be admitted, however, if, because of the way in which it came about, its contents are trustworthy, or if circumstances allow the trier of fact to sufficiently assess its worth: Khelawon, at para. 2.

78The defining features of hearsay are the fact that the declarant's statement is adduced to prove the truth of its contents and the absence of contemporaneous opportunity to cross-examine the declarant: Khelawon, at paras. 35 and 56.

79The value of viva voce testimony depends on four factors:

-- perception;

-- memory;

-- narration;

-- sincerity. The principal justification for the exclusionary rule about hearsay is the lack of opportunity to cross-examine the declarant, thus to inquire into his or her perception, memory, narration and sincerity.

80To focus the admissibility inquiry in this case, we must recall the defining features of hearsay. An out-of-court statement, like the drug purchase call, will be hearsay and presumptively inadmissible when (i) the statement is adduced to prove the truth of its contents; and (ii) no opportunity exists for a contemporaneous cross- examination of the declarant. Khelawon, at para. 56.

81In this case, the prosecutor did not introduce the drug purchase call to prove the truth of its contents. A telephone call is evidence of conduct in words. The conduct is carried out by use of a telephone. The call was relevant to show the nature of the business carried by the appellant. The nature of that business was a material issue in the prosecution of the appellant. The caller wanted to buy drugs. The conduct of the buyer was an item of evidence, which, together with other items of evidence, may help to establish the nature of the appellant's business, the purpose for which he had various controlled substances in his possession.

82The extension of the hearsay rule to implied assertions, to some extent at least, depends upon the extent to which the testimonial dangers, inherent in express hearsay, exist for implied assertions. The dangers of faulty perception and erroneous memory on the declarant's part may not be appreciably different for implied assertions than for express assertions. The danger of lack of sincerity would not seem a significant risk in connection with implied assertions. But narration, and in particular, ambiguity, may present an enhanced danger for implied assertions, an inevitable consequence of the inference- drawing process.

83On the other hand, it is nearly always possible to impute an assertion to all kinds of evidence, including oral statements, non-verbal conduct, even real evidence. A commonplace example will suffice. A witness testifies that he looked out his window and saw people in the street putting up their umbrellas. Is this admissible evidence from which a jury may infer that it had started to rain, or inadmissible hearsay because it comprises implied assertions of this fact by the passers-by, who are not called as witnesses? To adopt the latter view is to impute an assertion to the passers-by when, in reality, they are making no assertion about the weather, implied or otherwise. Just like drug purchase callers who do not intend to assert anything about the recipient, the passers- by have no intention of making any statement about the weather. They are simply putting up their umbrellas, presumably to shelter from the rain.

84In this case, a caller telephoned the appellant's cellphone to arrange a drug delivery -- a specific quantity, of a specific drug, for an agreed upon price. Consistent with prior decisions, such as Edwards, Lucia and Ly, the trial judge admitted the evidence as non-hearsay. His conclusion is also consistent with earlier decisions of this court in betting house cases: see, for example, R. v. Owad (1951), 102 C.C.C. 155 (Ont. C.A.), at p. 166 C.C.C.; and R. v. Fialkow, [1963] O.J. No. 75, [1963] 2 C.C.C. 42 (C.A.), at p. 44 C.C.C. In my view, he committed no error in doing so.

85Feldman J.A. criticizes the trial judge for failing to follow the "sophisticated approach to allow hearsay statements to be admitted into evidence when it is fair to do so, based on the criteria of necessity and reliability". With respect, I do not agree.

86The threshold issue for the trial judge to determine in this case was whether the telephone call was hearsay. The necessity/reliability analysis has nothing to offer on this threshold issue of classification. Search for an exception, whether listed or principled, thus the need for necessity/ reliability analysis, is pertinent only when the evidence is hearsay. Absent classification of the evidence as hearsay, the exclusionary rule does not apply. Absent operation of the exclusionary rule, the search for an exception is beside the point.

87Feldman J.A. says that in earlier disorderly house cases "what the courts were effectively doing was performing a necessity/reliability analysis on the evidence". I disagree for two reasons.

88First, my colleague's observations confuse the necessity/ reliability analysis applicable to the principled exception to hearsay, with the overarching discretion to exclude otherwise admissible evidence on the ground that its prejudicial effect predominates over its probative value. We have yet to recognize an exclusionary rule of general application or an inclusionary rule grounded in necessity and reliability.

89Second, the earlier authority to which Feldman J.A. refers, R. v. Owad, supra, was decided at a time before the probative value/prejudicial effect discretion balance was set as at present: see R. v. Wray, [1971] S.C.R. 272, [1970] S.C.J. No. 80, at pp. 293 and 299-300 S.C.R.

90Feldman J.A. takes issue with the decisions in Edwards, Ly and Lucia for their failure to analyze the evidence of telephone calls as an implied assertion. She says that Wilson is the controlling precedent. Yet, the obiter statement she invokes in Wilson to conclude that the evidence is hearsay itself contains no analysis of implied assertions and is bookended by other authorities from this court, as well as the brief judgment of the Supreme Court of Canada in Ly, that characterize this evidence as non-hearsay.

91To determine that a drug purchase call is non-hearsay does not end the inquiry into its admissibility. Evidence that is relevant, material and not excluded by the hearsay rule may be excluded where its prejudicial effect is out of proportion to its probative value: Khelawon, at para. 49.

92Trial counsel did not ask the trial judge to exclude the evidence of the telephone call on the basis that its prejudicial effect exceeded its probative value. In closing submissions, experienced trial counsel contended that the evidence should be assigned no weight because the police made no effort to confirm the legitimacy of the call by attending the premises to which the delivery of "weed" was to be made. Counsel also suggested that the call might never have occurred.

93I do not contest the obligation of a trial judge in a criminal case to ensure that only relevant, material and admissible evidence makes its way into the trial. Nor do I dispute the self-evident proposition that a trial judge is not entitled to ground his or her findings of fact, including a determination of the ultimate issue of guilt or innocence, on evidence that is irrelevant, immaterial or inadmissible. That said, trial judges are entitled to expect that counsel appearing at trial will object to the admissibility of evidence that falls foul of an exclusionary rule.

94My colleagues suggest that had the trial judge applied the probative value/prejudicial effect analysis to the evidence of the telephone call, he would inevitably have excluded the evidence. I do not agree. A determination of whether probative value or prejudicial effect predominates in connection with otherwise admissible evidence involves the exercise of judicial discretion and a consideration of all the circumstances of the case. Each case is unique. Reasonable people may differ about the appropriate conclusion.

95My colleagues' conclusion that the trial judge erred in failing to exclude evidence of the telephone call, either as inadmissible hearsay or as otherwise admissible evidence the prejudicial effect of which exceeded its probative value, segues into their determination that a new trial is required. Once again, I disagree.

96The critical issue in this case was the identity of the person in possession of the drugs and related commercial paraphernalia found in the apartment leased to Lepage. It was common ground at trial that whoever had possession of the drugs had them for the purpose of trafficking.

97The appellant denied that he was living in Lepage's apartment. He claimed that he had stayed there the previous evening because he had been out drinking with Lepage and others and could not return to his uncle's home where he was living because of a strict curfew his uncle imposed. The trial judge rejected the appellant's evidence.

98In his review of the evidence adduced at trial, the trial judge referred to the telephone call that he had admitted as non-hearsay. But in reaching his conclusion about the essential elements of possession, the trial judge made no reference to the call as an inculpatory circumstance in establishing the critical features of knowledge and control. The evidence to which he referred provided ample support for his conclusion.

99In the end, even if my colleagues are correct and the evidence of the telephone call should not have been admitted, the trial judge's findings on the critical issues of knowledge and control betray any express reliance on the telephone call as a piece of evidence supportive of his conclusions. Nor am I prepared to impute to the trial judge, from his earlier reference to the telephone call in a recital of the evidence adduced at trial, his reliance upon it making the findings of fact essential to proof of guilt. In my view, reading the reasons of the trial judge as a whole confirms that he found guilt established on the basis of the cumulative effect of several items of circumstantial evidence independently of the evidence of the telephone call. A finding of guilt made independently of evidence said to be inadmissible works no unfairness and causes no miscarriage of justice: R. v. Khan, [2001] 3 S.C.R. 823, [2001] S.C.J. No. 83, 2001 SCC 86, at para. 30; R. v. O'Brien, [2011] 2 S.C.R. 485, [2011] S.C.J. No. 29, 2011 SCC 29, at para. 15; R. v. Côté, [2011] 3 S.C.R. 215, [2011] S.C.J. 46, 2011 SCC 46, at para. 63.

100I would not give effect to this ground of appeal.

Ground #2: The failure of the trial judge to subject Lepage's evidence to Vetrovec scrutiny

101The second ground of appeal advanced by Mr. Davies on the appellant's behalf related to the trial judge's assessment of the credibility of a principal prosecution witness, Eric Lepage, and the reliability of his evidence that implicated the appellant in possession of the controlled substance as charged. The essence of the submission is that the trial judge erred when he failed to apply Vetrovec [R. v. Vetrovec, [1982] 1 S.C.R. 811, [1982] S.C.J. No. 40] principles to the evidence of Lepage.

The positions at trial

102The appellant's counsel at trial contended that Lepage was an accomplice, thus his evidence should be subject to scrutiny in accordance with Vetrovec. After all, trial counsel submitted, Lepage leased the apartment where the drugs were found and was himself charged with the same offences for which the appellant was being tried.

103The trial Crown appears not to have made any express reference to Vetrovec in her submissions to the trial judge. She did submit, however, that the outstanding charges against Lepage did not provide a motive for Lepage to falsely implicate the appellant although withdrawal of those charges might have done so.

The reasons of the trial judge

104After summarizing the substance of Lepage's evidence, the trial judge declined to instruct himself in accordance with Vetrovec principles in connection with Lepage's evidence. The judge concluded that Lepage, who did not use drugs or consume alcohol, was not an accomplice in the offences charged. He had expelled his prior roommate, his cousin, because of the cousin's drug use and nuisancy behaviour.

105After he rejected the submission that he should apply Vetrovec principles to the testimony of Lepage because he was an accomplice, the trial judge said:

Even were I to approach Mr. Lepage's evidence with caution, I would still believe his testimony. He was challenged, for example, on the suggestion that he owned a video game. He stated he did not own a video game. I find that the video game used in the living room while Sergeant Martelle was searching the premises belonged to Mr. Baldree. This is confirmed by Mr. Baldree's own uncle who testified that Mr. Baldree owned video games that he kept in his basement room.

Suffice to say, I found that Mr. Lepage did not give his evidence as a result of any untoward offers made by the Crown. I found that his evidence was forthright and believable.

The governing principles

106In R. v. Vetrovec, supra, at pp. 825 and 830 S.C.R., the Supreme Court of Canada made it clear that accomplices occupy no special category of witness that requires utterance of some ritualistic incantation about the dangers of the trier of fact finding guilt on the basis of their evidence without corroboration of it. As a matter of common sense, something in the nature of confirmatory evidence should be found before the trier of fact relies upon the evidence of a witness whose testimony occupies a central position in the prosecutor's attempt to demonstrate guilt, and yet may be suspect because the witness is an accomplice, a complainant or a person of disreputable character. In that case, a trial judge may provide to the jury or to him or herself a clear and sharp warning about the risks of adopting, without more, the evidence of the witness: Vetrovec, at pp. 831-32 S.C.R.

107Whether a trial judge provides the jury or her or himself with a Vetrovec caution lies within the discretion of the trial judge: R. v. Potvin, [1989] 1 S.C.R. 525, [1989] S.C.J. No. 24, at p. 557 S.C.R.; R. v. Bevan, [1993] 2 S.C.R. 599, [1993] S.C.J. No. 69, at p. 612 S.C.R.; and R. v. Brooks, [2000] 1 S.C.R. 237, [2000] S.C.J. No. 12, 2000 SCC 11, at para. 3. Appellate courts should give wide latitude and afford deference to trial judge's decisions about whether to give a Vetrovec warning: Bevan, at p. 613 S.C.R.

The principles applied

108I would not give effect to this ground of appeal.

109The basis advanced at trial for the Vetrovec warning was twofold. The prosecution witness Lepage was charged with the same offences as the appellant. The charges against Lepage remained outstanding against him when he testified for the prosecution at the appellant's trial. Thus, according to the appellant, Lepage had a strong motive to give evidence exculpatory of himself and inculpatory of the appellant. Such evidence would secure the appellant's conviction and withdrawal of the charges against Lepage. It was Lepage's position as an accomplice that engaged the requirement of a Vetrovec self- instruction.

110The trial judge appreciated that he had a discretion whether to provide a Vetrovec self-instruction about the testimony of Lepage. He understood and considered the basis upon which the argument was being advanced -- that Lepage was an accomplice. He concluded, as he was entitled to do, that Lepage was not an accomplice. The record reveals no other basis upon which Lepage's evidence would attract a Vetrovec warning.

111The trial judge also pointed out that, even if he were to have approached the testimony of Lepage with caution, he would have believed it nonetheless, and would have been prepared to act upon it.

112This ground of appeal fails. Conclusion

113For these reasons, I would dismiss the appeal.

114FELDMAN J.A.: -- I have had the benefit of reading the reasons of Watt J.A., and on the hearsay issue, I respectfully disagree. The question of whether the contents of a phone call constitute implied hearsay has been the subject of judicial debate and disagreement in a number of Commonwealth jurisdictions, in the U.S. and in Canada, and particularly in Ontario.

115In some of those jurisdictions where the courts have held that such evidence does constitute implied hearsay, such as England, legislation has been introduced to make such evidence admissible. That has not occurred in Canada, where we have developed a sophisticated approach to allow hearsay statements to be admitted into evidence when it is fair to do so, based on the criteria of necessity and reliability (R. v. Khelawon, 2006 SCC 57, [2006] 2 S.C.R. 787, [2006] S.C.J. No. 57).

116That was not the approach taken by the trial judge in this case. Nor did he consider whether the evidence should have been excluded because of its prejudicial effect as compared with its minimal probative value as circumstantial evidence of one phone call from a person not called to testify and be cross-examined. In any event, the evidence the Crown sought to admit was circumstantial evidence that drug trafficking was being carried on, when that was an admitted fact. The issue in the case was identity and the contents of the phone call spoke directly to that issue. The contents of the call were admitted as evidence that it was the appellant who was involved in drug dealing, effectively answering that issue. Factual Context

117In order to place the legal analysis in context, it is essential to set out the full content and circumstances of the cellphone call. Officer Martelle testified that he seized a cellphone from the appellant upon his arrest. He also seized one from one of the other people who was arrested, Chris Anderson. When they got to the police station, both phones were ringing. Officer Martelle answered the phone seized from the appellant and said hello. I quote the rest of the testimony:

A male voice on the other end of the, of the phone advised that he was at 327 Guy Street and that he was a friend of Megan and asked for Chris. Knowing that there were two Chris that I had just arrested, I asked, "Chris who?" and the male advised, "Baldree" and requested one ounce of weed. I then stated that I was running the show here and that Mr. Baldree was not here and I was gonna take his . . .

[interruption by the trial judge]

He asked for one ounce of weed. I then asked him how much Chris charges him, he says he pays $150. I then advised him I would deliver same, 327 Guy, and that was the end of the conversation.

118Although they knew his address, the police never investigated the caller at 327 Guy.

119When the trial Crown sought to tender the evidence of the cellphone conversation, defence counsel objected on the ground that it was hearsay. The trial Crown told the court that she was asking that it be entered, "simply to demonstrate the activity on the cellular phone and not for the truth of its content in that the caller . . . what he was requesting, that he was actually requesting the product, but that the telephone call placing the order was made on the telephone".

120The trial judge received submissions from both counsel and references to case law, following which he admitted the evidence, stating:

It's not admitted for the proof of the fact that your client is a drug trafficker, it's admitted for proof of the fact, it's circumstances that your client might have been involved in the trafficking of drugs.

121However, in her closing submissions, Crown counsel referred to the phone call as the strongest piece of evidence in the following excerpt:

And when you look at all of the twelve items I asked the Court to consider at the beginning, the last of them, the strongest of all, the cell phone call with the first and last name given where an order for an ounce of marijuana is placed to the cell of Chris Baldree, that's who the caller identifies, and what does Chris normally charge for an ounce of weed? $150.

When you look at the evidence as a whole, Your Honour, I would ask the court to find that there is no other inference that can be drawn, that the Crown has proven its case beyond a reasonable doubt on the proven facts before you. (Emphasis added)

122In his reasons for conviction, the trial judge again referred to the basis for admitting this evidence. He recited the entire phone conversation, including the officer's inquiry of "which Chris", the response that it was Chris Baldree, the officer's further inquiry as to how much he had paid previously for an ounce and the answer of $150. The trial judge then explained the basis for admitting the evidence:

Earlier in the trial, I held that the evidence of the drug call was admissible evidence relying on the authorities of R. v. Ly, [1997] 3 S.C.R. 698 and R v. Edwards (1994), 91 C.C.C. (3d) 123 (Ont. C.A.).

Whether these calls can be referred to as admissible hearsay or simply statements of state of mind, the law holds that they are admissible as circumstantial evidence to indicate a person engaged in drug trafficking. They are not tendered in evidence for the truth of the fact that the individual phoning is in fact the individual whom the individual states to be or that the individual in fact will carry out the trafficking of the drugs. As stated, it is circumstantial evidence of an individual engaged in the trafficking of drugs.

123Later in his reasons, the trial judge accepted Officer Martelle's evidence regarding the phone call and rejected the appellant's "half-hearted assertion that this telephone call may not have occurred".

124It was acknowledged by the defence at trial that the quantity of drugs found in the apartment was sufficient for possession for the purpose of trafficking. Therefore, the only issue was identity: which person was in possession of the drugs. Law and Analysis

125The seminal case on the evidentiary nature of anonymous telephone calls where the caller seeks to purchase drugs is the House of Lords decision in R. v. Kearley, [1992] 2 All E.R. 345, [1992] 2 A.C. 228 (H.L.). In that case, the police raided a home where the appellant, his wife and another man lived. They found drugs, but, unlike in this case, in an insufficient quantity to allow the inference of possession for the purpose of trafficking. While the police were there, however, ten telephone calls were intercepted in which the callers asked for the appellant for the purpose of purchasing drugs, and seven people actually came to the flat for the same purpose. The Crown did not seek to call as witnesses any of the persons who called or came to the house.

126The majority of the panel of five law lords held that the police could not give evidence of the contents of the telephone calls or what the in-person purported purchasers said because those contents constituted implied hearsay and were therefore inadmissible. The implied hearsay is the implicit statement of the caller who calls asking for drugs that he or she believes that the appellant sells drugs. Had the caller said directly, "I'm calling to purchase drugs because the appellant sells drugs", that would be a direct hearsay assertion of the same belief and presumptively inadmissible. Because the calls were requests for drugs rather than statements, the callers were not asserting but instead implying their belief that they could buy drugs from the appellant because he was a drug dealer. The hearsay nature of the content is the same.

127The minority referred back to betting house cases in which the courts have held that where the number of calls from strangers to a place requires an explanation, the contents of those calls becomes admissible, not for the truth of their contents, but for the purpose of explaining why the calls were made. That reasoning, applied to drug cases, permits similar evidence to demonstrate a market in the drugs created by the dealer operating out of the particular place. Lord Griffiths, one of the minority, summarized his conclusion in the following significant paragraph:

I would be prepared to answer the certified question [See Note 3 below] in the affirmative. It is true that the question as drafted refers to only one customer and the strength of the evidence lies in the fact that there are so many customers. But in order to be able to establish so many customers as to constitute a market in the drugs created by the dealer it is necessary to introduce evidence of the number of individual customers who collectively can be regarded as a market. If the evidence of each individual customer is held to be inadmissible it is obviously impossible ever to give evidence of a market. If there had been only one or two calls made to the premises offering to buy drugs they would carry little weight; they might be the result of mistake or even malice, but as the number of calls increases so these possibilities recede till the point is reached when any man of sense will be confident that any inference other than that the accused was a dealer can be safely rejected. A judge always has power to refuse to admit any evidence whose prejudicial value outweighs its probative value and if in the circumstances of this case it had been wished to adduce no more than one or possibly two calls I feel confident that a judge would have exercised his discretion to exclude such evidence.

128Lord Browne-Wilkinson, the other dissenting law lord, came to the same conclusion, that it is really the fact of a large number of calls that makes the evidence cogent, but that a single call must be technically admissible if a number of calls are. At the end of his reasons, he stated:

I must now revert to the certified question before this House and consider the case on the basis that there was only one caller. Would evidence of his call alone be admissible? In my judgment the reasoning which has led me to the view that evidence of multiple calls is both relevant and admissible applies also to one call alone: the caller is a potential customer. But a single call would have little probative value in showing the existence of a market. The possible prejudice to the accused by the jury drawing the wrong inference would be so great that I would expect a judge in his discretion to exclude it. I would also modify the question so as to make it clear that the inference to be drawn by the jury is to be drawn not from the words used by the callers but from the fact that there were callers who (from the words used) were shown to be seeking to acquire drugs.

129I believe it is clear from the reasons of the dissenting law lords that they believed that one could draw the inference from a large number of calls that something was going on which required an explanation, the explanation coming from the content of the calls. The explained calls then are admitted as circumstantial evidence of a market in drugs operated by the recipient of the calls. The dissenting law lords emphasized that, for them, the evidence admitted was the act or fact of the large number of calls rather than the hearsay content. In that way, the reliance is not on the belief of any individual caller that the accused is a drug dealer, thereby avoiding the hearsay problem.

130This analysis is consistent with the older Ontario case law involving charges of keeping a common betting house, such as R. v. Owad (1951), 102 C.C.C. 155 (Ont. C.A.). In that case, part of the evidence against the appellant consisted of 50 calls fielded by the police while they were on the premises during a gambling raid. The content of the calls was admitted as evidence of the character of the premises as a betting establishment, not as hearsay. Again, it was the number of calls that allowed the evidence to be treated in that manner.

131In my view, what the courts were effectively doing was performing a necessity/reliability analysis on the evidence. Where the police were unable to identify the callers, it was necessary to report their conversations in order to get the evidence of the character of the premises. The number of calls speaks to the reliability of the evidence. One or two calls may well be a wrong number or a deliberate attempt to harm the accused, while a large number of calls from strangers are less likely to be made in error or deliberately.

132One may analyze the umbrella example (as my colleague did in para. 83) in the same way. When everyone walking with an umbrella outside opens their umbrellas, an observer may infer from the group action that it is raining. But if only one or two people open their umbrellas while others do not, one could not reliably draw the inference of rain. Having said that, the umbrella observations are not implied hearsay -- the inference of rain is not based on the belief of the person with the umbrella of a fact about the statements or actions of another person, but on their direct reaction to feeling rain. From observing their actions, one may draw the inference that it is raining -- a classic example of circumstantial evidence. Recent Ontario and Supreme Court of Canada Cases

133The Ontario case law may be viewed as somewhat inconsistent on the hearsay issue. R. v. Edwards in the Supreme Court of Canada ((1996), 26 O.R. (3d) 736, [1996] 1 S.C.R. 128, [1996] S.C.J. No. 11) was an important case on s. 8 of the Canadian Charter of Rights and Freedoms and the parameters of the reasonable expectation of privacy. However, in the Ontario Court of Appeal, (1994), 19 O.R. (3d) 239, [1994] O.J. No. 1390 (C.A.), another issue in Edwards (not raised in the Supreme Court of Canada) was the admissibility of ten cellphone and pager calls which the police intercepted following the arrest of the accused. He objected to the introduction of the evidence that the callers asked for him and some requested crack cocaine, claiming it was inadmissible hearsay.

134In Edwards, this court agreed with the trial judge that the calls were admitted to show the activity of the appellant, but not for the truth of whether the callers actually wanted to buy crack cocaine. I make two observations about this court's hearsay analysis. First, the court did not focus on the implied hearsay problem. The issue was not the truth of whether the anonymous callers actually wished to buy crack cocaine. That was, of course, irrelevant. The calls were relevant because they showed that the callers believed the appellant was a drug dealer -- that belief is the implied hearsay asserted in the request for drugs. Second, the court's analysis that the evidence was admitted to show the nature of the appellant's activities is similar to the view of the dissenting law lords in Kearley, that the evidence from a large number of calls shows a market. This court relied on its decision in R. v. Fialkow, [1963] O.J. No. 75, [1963] 2 C.C.C. 42 (C.A.), another betting house case.

135Importantly, the court in Edwards went on to state that even if the calls were hearsay evidence, they were properly admitted based on the criteria of necessity and reliability. The evidence was necessary because the police did not know the identity of the callers, who may not have testified anyway. It was reliable [at para. 23 (C.A.)] "because it was made under circumstances which negate the possibility that the requests were spurious ones". I would add that a number of calls that are "strikingly similar" in their content may, in an appropriate case, be viewed as increasing the likelihood of the reliability of the accuracy of the callers' belief. (See Khelawon, at para. 108.)

136Two years later, the same issue arose in R. v. Wilson (1996), 29 O.R. (3d) 97, [1996] O.J. No. 1689 (C.A.), but in that case, while the police were searching the appellant's premises, one man came to the door, asked for Rob and said he wanted to buy drugs. Chief Justice McMurtry distinguished Edwards on the basis that while ten calls indicated an enterprise, it would be dangerous to draw an inference from one customer. He concluded that "[i]t would be unsafe to convict on this type of hearsay evidence alone, or together with other evidence. It should, therefore, not have been admitted into evidence" (para. 27).

137Chief Justice McMurtry characterized the evidence as hearsay, but also referred to the market or enterprise inference one can draw from a significant number of calls. In other words, he referred to both analytical conceptualizations of this evidence.

138A similar but distinguishable hearsay issue was also dealt with very briefly by the Supreme Court of Canada the next year in R. v. Ly, [1997] 3 S.C.R. 698, [1997] S.C.J. No. 90, on appeal from the Alberta Court of Appeal. In Ly, the facts, although very briefly referred to, were quite different, as was the purpose for admitting the evidence. The appellant was alleged to be operating a "dial-a-dope" scheme. A police officer called the appellant and made arrangements to take delivery of drugs from him at a designated place and time. The appellant showed up at the place and time with the drugs. The telephone conversation was ruled admissible not for the truth of its contents (of course set-up phone calls from police could not be admitted into evidence in a trial to prove the truth of any fact), but as a statement tendered to establish the drug transaction and to explain the fact that the appellant delivered the drugs in response. Together, the evidence was tendered in order to prove that the appellant was in possession of the drugs for the purpose of trafficking.

139More recently, this court again dealt with this kind of evidence in a brief "by the court" endorsement in R. v. Lucia, [2010] O.J. No. 3154, 2010 ONCA 533. Based on information from informants that the appellant was trafficking crack cocaine out of her mother's car, the police watched her have short meetings in the car with four males, two of whom were known crack users, then arrested her for possession of crack cocaine for the purpose of trafficking. They found drugs, a pellet gun and a cellphone in the car. The phone rang twice following the arrest. When the police answered in each case the caller asked to purchase crack cocaine. The court held that the calls were admissible as circumstantial evidence of the nature of the business carried on by the appellant, which was an issue in the case, but not for the truth of their contents. The court did not, however, attempt to analyze the use being made of the content as implied hearsay of the belief of the two anonymous callers that the appellant dealt drugs. A review of the record discloses that the R. v. Wilson decision was not cited to the court, nor did the court refer to it in the endorsement.

140I agree with Chief Justice McMurtry in R. v. Wilson that admitting the contents of one call into evidence is admitting that evidence for a hearsay purpose. It is the implied assertion of the caller, untested by cross-examination, that the accused is a drug dealer. That was also the conclusion of the majority of the House of Lords in Kearley, with which I also agree.

141When there are a significant number of calls, the analysis of the minority in that case, that the fact of the calls requires an explanation which comes from the content of the calls, which content is admitted to show the operation of a market in drugs, becomes cogent. However, even on that analysis, in my view, it is still the truth of the content of the calls that is being relied on. With respect to those of the contrary view, it is not circumstantial evidence from which an inference can be drawn that the accused is a drug dealer. The evidence gets its probative value from the belief of the callers, which may or may not be accurate.

142But such evidence only shows a market if the callers' belief in the fact that they are calling a betting house or a drug dealer is accurate. As counsel offered in oral argument, if a person called his office looking for a family lawyer, it would be wrong to conclude that he practised family law. All one could say is that the caller wrongly believed that to be the case. Even if 12 callers called, the inference would still be factually wrong, but it is likely there is a reason for the error: for example, his number was formerly that of a family lawyer, or his name was the same as a family lawyer.

143Finally, the fact that in some other jurisdictions, the legislature has decided to make this type of evidence admissible, even though it is hearsay, does not change the analysis. This has not been done legislatively in Canada. However, hearsay statements may be properly admitted for the truth of their contents if they meet the two criteria of necessity and reliability, and if their probative value is not outweighed by their prejudicial effect (Khelowan, at paras. 3 and 49). Application to This Case

144The trial judge in this case was in error when he admitted the evidence of the one call on the basis that it was not hearsay and not being admitted for the truth of its contents. In fairness to the trial judge, he was focused on the truth of whether the caller really wanted to purchase drugs, which was of course irrelevant, and not on the implied assertion in the request that the appellant is a drug dealer. Furthermore, he was not referred to the Wilson case, an important and binding Ontario authority. The caller also made direct statements of fact that the appellant, whom he identified by name, had sold him drugs before for $150. These were clearly direct hearsay statements and prima facie inadmissible.

145The trial judge also erred by admitting the evidence on the basis that it showed that the appellant was in the drug- dealing business. This was an error since, unlike in other cases, it was admitted that the quantity of drugs found was sufficient to prove that whoever possessed the drugs possessed them for the purpose of trafficking. The only live issue was which of the apartment's occupants possessed the drugs. The caller clearly identified the appellant as the drug dealer.

146Nor would the single call have met the necessity/ reliability test. The Crown did not make out a case for necessity: the police had the caller's address but never tried to contact him or obtain his testimony. There was no basis to say that the caller's belief was reliable without testing the basis for that belief by cross-examination.

147Finally, before admitting the evidence of one anonymous call, the trial judge should have considered whether its probative value outweighed its prejudicial effect, whether counsel specifically objected on that basis or not, and where defence counsel had asked the judge to rule the evidence inadmissible as hearsay (Khelawon, at paras. 3 and 49):

. . . because trial fairness may encompass factors beyond the strict inquiry into necessity and reliability, even if the two criteria are met, the trial judge has the discretion to exclude hearsay evidence where its probative value is outweighed by its prejudicial effect.

148The minority in Kearley, who would have found the calls theoretically admissible as non-hearsay, were clear that the probative/prejudicial weighing was required where there were only one or two calls, and that in those circumstances, such evidence should be rejected because its probative value was questionable while its prejudicial effect was clear. (See the two statements quoted above, at paras. 127 and 128.) Conclusion

149Because the trial judge admitted the contents of the anonymous call as evidence that it was the appellant who was in the business of drug dealing out of the apartment, it was clearly evidence that was important to the conviction. Crown counsel at trial characterized it as the strongest piece of evidence in the case. The trial judge referred to the call in his reasons for judgment. Although he discussed other evidence in his analysis, that does not mean that the evidence of the call did not play a role in his decision to convict. "A trial judge is not required to refer to every item of evidence considered or to detail the way each item of evidence was assessed" (R. v. H. (J.M.), 2011 SCC 45, [2011] 3 S.C.R. 197, [2011] S.C.J. No. 45, at para. 32). I cannot find that exclusion of the evidence would not have affected the verdict. I would therefore decline to apply the proviso in this case. I would set aside the verdict, allow the appeal and order a new trial.

150BLAIR J.A.: (concurring in the result): -- I have had the opportunity of reading the reasons of both of my colleagues, Justice Feldman and Justice Watt. I agree that the second ground of appeal -- the failure of the trial judge to subject Lepage's evidence to a Vetrovec [R. v. Vetrovec, [1982] 1 S.C.R. 811, [1982] S.C.J. No. 40] warning -- cannot succeed, for the reasons expressed by Watt J.A. Like Feldman J.A., I would set aside the conviction and order a new trial on the ground relating to the admissibility and use of the drug purchase call. However, I take a somewhat different view of the hearsay problem that bedevils us in these particular circumstances.

151For centuries, judges, lawyers and academics have devoted much thought and debate to the questions of what does or does not constitute hearsay evidence and why and in what circumstances, and what are the principles underlying the admissibility of such evidence. The authors of McWilliams' Canadian Criminal Evidence observe that "[f]or more than two centuries the common law has woven a web of complex rules and exceptions related to the admission of out-of-court assertions": S. Casey Hill, David M. Tanovich and Louis P. Strezos, McWilliams' Canadian Criminal Evidence, 4th ed., looseleaf (Aurora, Ont.: Canada Law Book, 2011), at p. 7-4. As early as 1684, Jeffreys L.C.J. said that unsworn oral hearsay is "a sort of evidence, but it is not to be allowed" (emphasis added): see Frederick W.J. Koch, "The Hearsay Rule's True Raison d'Être: Its Implications for the New Principled Approach to Admitting Hearsay Evidence" (2006), 37 Ottawa L. Rev. 249, at para. 26. What sort of evidence confronts us here, is at the heart of the appeal.

152Indeed, it is likely there are factual situations where, if 100 legal professionals were placed in a room and asked whether the proffered evidence constitutes hearsay, the question would generate 40 firm responses in the affirmative and 40 equally firm responses in the negative, with the remaining 20 falling into the unsure category. Such is the case with the contents of a drug-purchase phone call. As my colleague Watt J.A. points out [at para. 42]:

The authorities that consider whether drug purchase calls are reached by the hearsay rule, or if they are, whether the calls should be admitted by exception or excluded on some other basis do not achieve even the most modest level of consistency or clarity.

153I fall into the "unsure" category in this case. There are arguments in favour of the positions advanced by both of my colleagues, each of whom has engaged in a careful and reflective exploratory journey through the tricky shoals of what does or does not constitute "hearsay". On balance, I favour the conclusions reached by Feldman J.A. and her analysis in arriving at those conclusions in the particular circumstances of this case. But I would add the following observations.

154Legal purists, and judges who must cope with and decide these issues, spend a great deal of intellectual energy worrying about whether evidence such as that confronting the trial judge is hearsay. While this approach provides a framework for analysis, I wonder if a different approach might be helpful.

155Canadian jurisprudence has developed over the past 20 years to the point where it is the guiding principles underlying the traditional exceptions to the hearsay rule -- necessity and reliability -- that generally govern the determination of hearsay admissibility in circumstances not involving one of the traditional exceptions: R. v. Khelawon, [2006] 2 S.C.R. 787, [2006] S.C.J. No. 57, 2006 SCC 57, para. 42. Given this evolution, coupled with a trial judge's overriding discretion to exclude evidence -- even non-hearsay evidence in appropriate circumstances -- the time has come, in my view, for jurists to spend less time focusing on the characterization of evidence into "hearsay" or "non-hearsay" categories in these types of close-call scenarios and to spend more effort focusing on the principled criteria of necessity/ reliability and prejudice vs. probative value.

156For those reasons, I do not think it is necessary to cut the "hearsay" Gordian knot to resolve this appeal because in the end I conclude -- as does Feldman J.A. -- that the one drug-purchase phone call tendered here would not have survived the necessity/reliability analysis called for if the phone call were considered to be hearsay, nor would it have survived the prejudicial effect/probative value exercise that the trial judge should have conducted, but did not, even after concluding that the evidence was not hearsay.

157I am not suggesting that the analysis of whether a particular piece of evidence is or is not "hearsay" should be jettisoned in all cases. The hearsay concept is too deeply imbedded in the law of evidence -- for all of the sound reasons underlying the law's caution in relation to such evidence. As Dickson J. observed in R. v. Abbey, [1982] 2 S.C.R. 24, [1982] S.C.J. No. 59, at p. 40 S.C.R., citing from an article by Professor Cross:

There exists a "superstitious awe . . . about having any truck with evidence which involves A's telling the court what B said to him". [See Note 4 below]

158The reasons underlying this concern are explained by Charron J. in Khelawon [R. v. Khelawon, 2006 SCC 57, [2006] 2 S.C.R. 787, [2006] S.C.J. No. 57], at para. 35:

Our adversary system puts a premium on the calling of witnesses, who testify under oath or solemn affirmation, whose demeanour can be observed by the trier of fact, and whose testimony can be tested by cross-examination. We regard this process as the optimal way of testing testimonial evidence. Because hearsay evidence comes in a different form, it raises particular concerns. The general exclusionary rule is a recognition of the difficulty for a trier of fact to assess what weight, if any, is to be given to a statement made by a person who has not been seen or heard, and who has not been subject to the test of cross- examination. The fear is that untested hearsay evidence may be afforded more weight than it deserves. The essential defining features of hearsay are therefore the following: (1) the fact that the statement is adduced to prove the truth of its contents and (2) the absence of a contemporaneous opportunity to cross-examine the declarant.

159Nonetheless, I think the following approach to hearsay cases makes some sense. A trial judge should begin by addressing whether the prospective evidence constitutes hearsay, using the traditional criteria for that determination. If the answer is readily determined in the affirmative, then the governing framework as developed in the modern jurisprudence, and summarized recently in R. v. Mapara, [2005] 1 S.C.R. 358, [2005] S.C.J. No. 23, 2005 SCC 23, at para. 15, should be followed:

(a) Hearsay evidence is presumptively inadmissible unless it falls under an exception to the hearsay rule. The traditional exceptions to the hearsay rule remain presumptively in place.

(b) A hearsay exception can be challenged to determine whether it is supported by indicia of necessity and reliability, required by the principled approach. The exception can be modified as necessary to bring it into compliance.

(c) In "rare cases", evidence falling within an existing exception may be excluded because the indicia of necessity and reliability are lacking in the particular circumstances of the case.

(d) If hearsay evidence does not fall under a hearsay exception, it may still be admitted if indicia of reliability and necessity are established on a voir dire. See, also, Khelawon, at para. 42.

160However, if the hearsay nature of the prospective testimony is particularly difficult to pinpoint, courts should consider falling back on the newer, more principled tools of reliability and prejudice/probative value assessments to resolve the question of admissibility. Such a situation may arise where -- as here, for example -- the purpose for which the evidence is tendered is ambivalent or open to more than one usage, but the evidence, at least on its face, has many of the hearsay-danger characteristics that make courts cautious about receiving it. "Necessity" is less of a factor in these circumstances. If evidence lacks sufficient reliability, it will have little probative value in any event, but even if the proffered evidence meets the reliability threshold for admissibility, a judge may still conclude, in his or her discretion, that the evidence ought to be excluded because its prejudicial potential outweighs any probative value it may have: Khelawon, at para. 3; R. v. Seaboyer, [1991] 2 S.C.R. 577, [1991] S.C.J. No. 62.

161Like Feldman J.A., I conclude that the trial judge erred in admitting the evidence of the one drug-purchase call on the basis that it showed the appellant was in the drug- dealing business. I agree with her analysis, at paras. 144-49 of her reasons, in this regard.

162If the phone call evidence was hearsay, it ought to have been subjected to a necessity/reliability analysis, which, in my view, it would fail. If, as the trial judge concluded on the basis of the authorities he followed, it was not hearsay, it ought nonetheless to have been subjected to a prejudice/ probative value balancing exercise, which the trial judge did not do. Like my colleague, I do not think the fact that defence counsel did not seek to have the phone call excluded on Khelawon principles is fatal in the circumstances. In circumstances such as this, trial judges should be alive to their discretion to exclude evidence on the prejudice vs. probative value ground.

163I would accordingly allow the appeal and order a new trial for the foregoing reasons.

Appeal allowed.

Notes

Note 1: Law Commission Report No. 245, Evidence in Criminal Proceedings: Hearsay and Related Topics, Cm. 3670 (London: Stationary Office, 1997), at para. 7.7.

Note 2: Birch, "Criminal Justice Act 2003 (IV) Hearsay: Same Old Story, Same Old Song?" (2004), Crim. L. Rev. 556, at p. 564.

Note 3: The certified question was: "Whether evidence may be adduced at a trial of words spoken (namely a request for drugs to be supplied by the Defendant), not spoken in the presence or hearing of the Defendant, by a person not called as a witness, for the purpose not of establishing the truth of any fact narrated by the words, but of inviting the jury to draw an inference from the fact that the words were spoken (namely that the Defendant was a supplier of drugs)."

Note 4: Cross, "What should be done about the Rule Against Hearsay?" (1965), Crim. L. Rev. 68, at p. 82.