Court File and Parties

Court File Nos.: 08-5820, 08-5821, 08-5822

Ontario Court of Justice

Between:

Her Majesty the Queen

— and —

Richard Clare, 1553603 Ontario Inc., o/a Butch Clare Cattle and 1648291 Ontario Inc., o/a Butch Clare Livestock

Before: Justice Robert S. Gee

Heard on: September 8, 2014

Reasons for Judgment released on: November 17, 2014

Counsel:

• S. Dunsmuir, for the Crown
• N. Lutes, for the Accused

Introduction

[1] Richard Clare, 1553603 Ontario Inc., o/a Butch Clare Cattle and 1648291 Ontario Inc., o/a Butch Clare Livestock were charged with 11 counts each of acting as livestock dealers without a licence during an 11 week period between July and September of 2007, contrary to s. 2(a) of the Livestock and Livestock Products Act (the "LLPA").

[2] This is a matter with a somewhat long and torturous history which, hopefully, ends today.

[3] Between December 11, 2008 and June 18, 2009 a five day trial was heard which resulted in the accuseds' convictions. Those convictions were successfully appealed and a new trial was ordered.

[4] The new trial was held before Justice of the Peace Quinn on November 8, 2013. No viva voce evidence was called. The evidence was presented through an agreed statement of facts and the transcripts and exhibits from the first trial. This trial ended in the accuseds' acquittals.

[5] This is an appeal by the Crown from those acquittals.

Facts

[6] The facts were relatively straightforward. During the 11 week period covered by the Informations, Mr. Clare, who it was agreed was the operating mind of the two corporate accused, made weekly purchases and sales of cattle. A total of 2,156 cattle at a cost of $1,367,000.00 were purchased, and 2,811 cattle were sold for approximately $1,619,000.00. The cattle were not purchased directly by Mr. Clare but were purchased by third parties who would then sell them to Mr. Clare, at cost plus a fee of $5.00 or $10.00 per head. These fees for each head of cattle totalled $7,530.00, paid by Mr. Clare to these third parties during this 11 week period. A bank account of one of the corporate accused, at the CIBC and utilized in relation to the purchase and sale transactions, when opened, stated its purpose was to "buy and sell cattle."

[7] There was also evidence that Mr. Clare owned a large cattle farming operation. Photographs of the Clare farm confirmed it had all the accoutrements of such an operation, such as structures to house and feed cattle.

Issues

[8] The Crown has raised two issues on this appeal; first, that the justice of the peace erred by relying on the provisions of other provincial legislation to assist in his interpretation of the provisions of the LLPA, and second, that the justice of the peace erred in finding that the Crown had not proven beyond a reasonable doubt that the accused were in the business of buying or selling cattle.

The Standard of Review on Appeal

[9] As a starting point, it is clear that an appellate court is not to retry a case and substitute its views for those of the trial judge. An appellate court is prohibited from reviewing a trial judge's decision if there was some evidence upon which he or she could have relied to reach that conclusion. See Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 at par. 1 to 3.

[10] The standard of review on appeal will vary based on the nature of the error made. The standard of review for a pure question of law is correctness. As stated by the Supreme Court in par. 8 of Housen (supra); "[A]n appellate court is free to replace the opinion of the trial judge with its own" if the trial judgment is based upon a purely legal error. However, where the alleged error is based in whole or in part on findings of fact then "[t]he standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a 'palpable and overriding error.'" (Housen at par. 10)

Analysis

[11] The sections of the LLPA relevant to this matter are:

Definitions

Section 1. In this Act,

"livestock dealer" means a person engaged in the business of buying or selling livestock as a principal or as an agent;

Licence required

Section 2. No person shall engage in business,

(a) as a livestock dealer; or

(b) as a dealer in livestock products,

without a licence therefor from the director.

The sections of Ontario Regulation 725 made pursuant to the LLPA relevant to this matter are:

Section 1. In this Regulation,

"cattle" means cattle sold for the purpose of,

(a) slaughter for the production of beef, or

(b) further feeding for the production of beef;

"director" means the director appointed under the Act;

"producer" means a producer of livestock.

Section 2. Cattle are designated as livestock.

Section 3. Section 2 of the Act and this Regulation do not apply to a producer who buys livestock from, or sells livestock to, other producers in the ordinary course of a farming operation.

[12] It was argued by the accused that to give a proper interpretation to these sections and regulations of the LLPA it was necessary to interpret them in conjunction with other legislation and regulations made thereunder, specifically the Farm Products Payment Act (the FPPA) and the Beef Cattle Marketing Act (the BCMA).

[13] The accused argued that the LLPA and the FPPA form an integrated scheme to regulate aspects of the livestock industry and in order to properly interpret what livestock dealing is, as that term is used in the LLPA, the entire statutory and regulatory scheme established pursuant to these acts must be considered.

[14] As support for this concept, the accused relied on paragraph 35 of Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services) 2004 SCC 54, [2004] 3 S.C.R. 152 which held:

35 … While it is true that a statute sits higher in the hierarchy of statutory instruments, it is well recognized that regulations can assist in ascertaining the legislature's intention with regard to a particular matter, especially where the statute and regulations are "closely meshed" (see R. v. Campbell, [1999] 1 S.C.R. 565, at para. 26; Sullivan and Driedger on the Construction of Statutes (4th ed. 2002), at p. 282). In this case, the statute and the regulations form an integrated scheme on the subject of surplus treatment and the thrust of s.70(6) can be gleaned in light of this broader context.

[15] It is the position of the Crown that it is not permissible in order to interpret the meaning of a section or term of a particular statute or regulation made thereunder, to rely on terms or regulations contained in other statutes or regulations. Moreover, even if it were permissible, it is not necessary in this case as the LLPA provides a clear and unambiguous definition of livestock dealer, and as such, reference to other legislation or regulations is not necessary to glean the legislature's intent.

[16] The Crown position at trial as well was that the cumulative effect of the evidence presented was more than sufficient for finding beyond a reasonable doubt that the accuseds were acting as livestock dealers, without the required licence and they had not established an entitlement to the exemption afforded a producer pursuant to s.3 of the regulation to the LLPA.

[17] The defence position was that the evidence fell short of proof beyond a reasonable doubt that the accused were acting as livestock dealers, and the existence of the so called exemption for producers in the regulation, does not displace the Crown's onus to prove the accused engaged in the unlawful activity.

[18] The reasons of the justice of the peace in this matter were delivered orally and span some six transcribed pages. The first five pages are a review of the facts and the various positions of the parties. His reasons for dismissing the charges are less than a page and are contained in four paragraphs as follows:

The Crown has not proven beyond a reasonable doubt that Mr. Clare and the defendants were other than producers of livestock. Here [sic] is not one head of cattle that has been proven purchased by Mr. Clare or the defendants without going for finishing at the Clare farm. Not one head of cattle purchased can be shown as being sold to slaughter without finishing at the Clare farm.

One cannot look at one piece of legislation without looking at the total package. There is no evidence that Mr. Clare or the defendants were dealing in cattle.

Again I go back to 47(3) where it is suggested the onus is on the defendant, and I believe that Mr. Greenspan has submitted to the court legislation that flies in the face of one another that the Crown suggested no ambiguity, yet I believe by looking at the various pieces of legislation, that there is considerable ambiguity in regards to what is a dealer, what is a producer. Or I should not say that, it very clearly indicates what a producer is and what a dealer is, but they seem, from time to time, not to interact properly. There is nothing that can be done without suggesting that.

Richard Walter Clare, 1553603 Ontario Inc., 1648291 Ontario Inc., all charges dismissed.

Issue 1 - Did the justice of the peace err by relying on the provisions of other provincial legislation to assist in his interpretation of the provisions of the LLPA?

[19] Although it seems clear the justice of the peace held that in interpreting the LLPA it was necessary to consider provisions of other legislation, it is unclear from his reasons which other legislation he was referring to or how it played a role in his analysis. Notwithstanding this, the crux of his decision, as I read it, was that he found that the accused were not dealing in cattle. Any error on the part of the justice of the peace in this regard would be a mixed question of fact and law thereby requiring the Crown to prove a palpable and overriding error.

[20] To the extent that the reliance on other legislation to help interpret the LLPA is a pure question of law that can be extracted from this mixed question of fact and law, I would hold that the justice of the peace was not correct in so finding.

[21] The Monsanto (supra) case referred to as I read it, does not stand for the proposition suggested by the accused. It suggests that regulations may be read in a manner that assists in interpreting the parent statute. It suggests a type of vertical interpretation as opposed to a horizontal one as suggested by the accused. In any event, I find it is unnecessary to look beyond the LLPA and its regulations, as the sections in question in the LLPA are clear and unambiguous.

[22] Section 2 of the LLPA regulates certain activity. It requires any person in the business as a livestock dealer to be licenced.

[23] A livestock dealer is also clearly and unambiguously defined in s.1 of the LLPA as a person engaged in the business of buying or selling livestock.

[24] The LLPA does not define a livestock dealer as every person who buys or sells livestock. The LLPA only requires those persons who are in the business of buying or selling livestock to be licenced.

[25] The legislature chose to use the word "business" in its definition of livestock dealer. As such that word must be given its usual meaning.

[26] The word "business" in this context, without attempting to conclusively define it, imparts a notion of commercial activity engaged in as a livelihood, or an occupation, profession or trade. It is an activity, undertaken for the pursuit of profit. That is the crux of what the Crown needs to demonstrate in relation to the purchase or sale of livestock to prove a person requires a licence under the LLPA.

[27] Since the basis for the decision of the justice of the peace was in the end a finding the Crown had failed to prove dealing in cattle, any error he may have made regarding his reference to other legislation was of no consequence and as such this ground of appeal fails.

Issue 2 - Did the justice of the peace err in finding that the Crown had not proven beyond a reasonable doubt that the accused were in the business of buying or selling cattle?

[28] The Crown takes the position that the justice of the peace erred when he stated there is no evidence the defendants were dealing cattle. If these charges had been dismissed after a motion for a directed verdict, or if one were applying the test for committal for trial at a preliminary inquiry, I would agree that was an incorrect finding.

[29] However, one cannot look at the justice of the peace's reasons in isolation; they must be viewed as a whole. When looked at as a whole and in the context of other findings he made, it is clear he was not satisfied the Crown had proven the case beyond a reasonable doubt.

[30] Given this was a finding of fact, the Crown is required to demonstrate that this was a palpable and overriding error. It is not enough for the Crown to demonstrate another justice of the peace may have come to a different conclusion based on the same evidence, nor is it permissible for me to substitute my view of the evidence.

[31] All cases have their own unique evidentiary challenges. This case is no different. The intention of the accused at the time of the purchase and sale transactions is what is determinative. It is trite to say that the Crown always carries the burden of proving the accused's guilt beyond a reasonable doubt.

[32] In this case, much was said of the so called exemption from the licencing requirement for producers of livestock found in s.3 of the Regulations to the LLPA. The Crown pointed out s.47(3) of the Provincial Offences Act places the burden of demonstrating an entitlement to this exemption on the person claiming it and that the accused in this case had failed to do so.

[33] However, the existence of an exemption and the fact a defendant has failed to demonstrate its applicability, or to claim it, does not displace or lessen the Crown's burden of proving beyond a reasonable doubt that the accused engaged in the prohibited activity.

[34] The Crown has contended that the finding of the justice of the peace, that it failed to prove the case beyond a reasonable doubt, is untenable in light of the evidence led at trial.

[35] Briefly, the evidence the Crown based this contention on is the following:

(i) The size, volume and consistency of the transactions––several thousand cattle were bought and sold for millions of dollars over the 11 week period;

(ii) The purpose noted for the CIBC bank account;

(iii) Evidence of various witnesses––witnesses described the accused's business as "a very large livestock business." As well some cattle sellers testified the accused purchased fat cattle and "burnt out milkers" both of which are types of cattle destined directly for slaughter; and

(iv) Evidence the accused knew they required a licence––the fact the accused utilized licenced third parties to make the purchases on their behalf and thereby incurred extra costs of over $7,500.00, as well as voluminous quantities of extra paperwork, demonstrates knowledge on their part that they were engaging in the type of activity that required a licence. If they truly felt they did not require a licence they would have made the purchases directly and not incurred this extra cost and paperwork.

[36] The defence on the other hand contended there was evidence that pointed away from a finding that in relation to the transactions in question, the accused fit the definition of a livestock dealer. For instance, it was agreed that Mr. Clare owned what was described as a large cattle farming operation. Additionally, there was never any tracing done of what became of the cattle purchased during the 11 week period. It was never shown where any of the cattle purchased went once purchased by the accused, let alone any evidence any went directly from the sales barns to the slaughterhouse.

[37] Moreover, there was no evidence comparing the activities of the accused with activities of other similar sized cattle farmers.

[38] As well, there was some evidence that the sales were being structured as they were, through the third parties, at the request of the sales barns.

[39] Bearing in mind that all this evidence was before the justice of the peace, and keeping in mind the standard of review, I am unable to say that the justice of the peace made a palpable and overriding error in his assessment of the evidence and conclusion that the Crown had failed to prove beyond a reasonable doubt that the accused were dealing in livestock.

[40] As a result, the appeal will be dismissed.

Dated at Brantford, Ontario

This 17th day of November 2014.

The Honourable Mr. Justice R.S. Gee