Court File and Parties

COURT FILE NO.: CV-05-287428-00CP DATE: 20210301 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: FLYING E RANCHE LTD. Plaintiff

AND:

THE ATTORNEY GENERAL OF CANADA on behalf of HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE MINISTER OF AGRICULTURE Defendant

BEFORE: Paul B. Schabas J.

COUNSEL: Malcolm Ruby, Duncan Boswell, Rachel McMillan, Andrew Locatelli and Cameron Pallett for the Plaintiff William Knights, Cynthia Koller, Victor Paolone and Adam Gilani for the Defendants

HEARD: February 25, 2021

Ruling on Hearsay Objection to the Sears Affidavit

[1] The common issues trial in this matter began on February 16, 2021. It is expected to continue for several months. The case deals with the outbreak of Bovine Spongiform Encephalopathy (“BSE”), often known as “mad cow disease,” in Canada in and after 2003.

[2] Following an order of Glustein J., dated October 22, 2020, the matter is proceeding in a hybrid format, in which many witnesses will have their evidence-in-chief presented largely by way of affidavit.

[3] As this is a trial, and not a motion or application, the rules permitting affidavits to contain evidence based on information and belief or, put another way, hearsay, do not apply, and the rules of evidence must be followed.

[4] The plaintiff’s first witness is Lawrence Sears, the principal of the representative plaintiff. He is a cattle producer and has prepared an affidavit dated December 31, 2020 describing the impact of BSE on himself and his business.

[5] In a number of paragraphs of his affidavit Mr. Sears makes statements which the defendant argued are inadmissible hearsay. As the parties required an immediate ruling on this issue so that Mr. Sears could begin his testimony, I ruled that I would admit the evidence as, in my view, it is not hearsay but rather evidence within Mr. Sears’ personal knowledge based on his experience and observations. I indicated I would provide brief reasons, which I do below.

[6] The defendant objected to, and asked that I strike out, the following sections of Mr. Sears’ affidavit:

a.1) Para. 51: "I knew that there were some cattle owners who did not want their UK imports euthanized. [...] The CCA and the Alberta Cattle Commission also supported expeditious depopulation of the remaining UK imports." a) Para. 62: "My family was also shocked and believed, as I did, that this issue could be resolved relatively quickly, the borders could reopen and the markets would recover sooner rather than later - how wrong we were!" b) Para. 63: "My neighbours and I were afraid of the collapsing market prices and the impact on their operations." c) Para. 64: "... I remember that members asked pointed questions about how and why this could happen, and as time rolled on, why it continued to occur. Questions about the origin of the outbreak were abundant but few answers were apparent or forthcoming from the CFIA." d) Para. 85: ".... CIBC contended that the returns in the cattle industry in general were not worth the risk. As a result, CIBC made unreasonable new demands for increased levels of security and onerous reporting, along with steep penalties for not meeting their new requirements. .... Over a period of three months, two banks gave us responses that were no different than CIBC's response. Because the value of cattle decreased due to the BSE crisis, banks were no longer willing to loan based on the value of cattle." e) Para. 120: "After BSE was diagnosed in a Canadian-born cow, the value of grazing leases also took a hit for a number of years. If a farmer sold their rights to a grazing lease between 2003 and 2007, they would have received less than they would have before May 2003. The value of grazing leases has increased over time, so that they are only now back to the value they were at prior to the BSE crisis." f) Para. 121: "Based on my experience working in the cattle industry, my involvement with the CBEF and CCA, and discussions with other cattle producers, I believe that the long term effects of the BSE crisis were and are profound. Cattle farmers, myself included, are a proud bunch. Those who stayed in the business kept their heads down and focused on staying afloat. However, the crisis destroyed the will of many farmers to stay in the cattle business. I know some older cattle producers exited the business as soon as prices allowed them to leave with something rather than nothing, which was tragic." g) Para. 122: "The BSE crisis eroded any optimism there was in believing there could be profitability in the cow calf sector. Consequently, we have seen stagnation in beef cow numbers in spite of some lucrative market signals over the past few years. This crisis is still haunting us and has kept a decade's worth of the younger generation away, so succession has not occurred as it should have." h) Exhibit "V" - [AGC00083954] AAFC report titled "Economic Impacts of BSE and Programs on the Canadian Agricultural Markets" dated March 2008; and the related paragraphs referencing this document.

[7] Put at its simplest, hearsay is an out-of-court statement made by someone other than the witness which is tendered for the truth of its contents: R. v. Khelawon, 2006 SCC 57, at paras. 35 and 36. The main concern with hearsay is the inability to test it by cross-examination. As the Supreme Court stated 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. [emphasis added]

[8] In my view, each statement by Mr. Sears is a statement of his own belief. For example, in para. 51 he states that he was aware of “some cattle owners who did not want their UK imports euthanized.” Leaving aside the fact that this point has already been established in the read-ins and is not in dispute, it is a statement of Mr. Sears’ own knowledge. He can be cross-examined on this point.

[9] Mr. Sears’ statement of the positions of the “CCA”, which is the Canadian Cattlemen’s Association, and the Alberta Cattle Commission, is also not hearsay, but a statement of positions taken by organizations in which Mr. Sears had been involved as a delegate and as a director. He can also be readily cross-examined on the correctness of his statements should the defendant wish to do so.

[10] Mr. Sears is well-positioned to state whether his family was shocked and believed, as did he, that the BSE issue would be resolved quickly. It is clear that he is testifying to a general reaction that he felt and observed in others. In fact, the evidence from the read-ins was that representatives of the defendant also hoped at the time that the issue would be resolved quickly.

[11] Similarly, Mr. Sears’ comment on the fact that his neighbours and he “were afraid of the collapsing market prices and the impact on their operations” is based on his own knowledge. Again, he is stating an impression he had from his experience and observations, following the discovery of a cow with BSE in 2003, and how it impacted cattle farming operations. It too, can be the subject of cross-examination, should the defendant wish to challenge it.

[12] Mr. Sears’ reference to “pointed questions” is simply evidence that people were asking tough questions, as one would expect. This is not hearsay, as the questions are not put in for the truth of their contents, but the fact that they were made. This is Mr. Sears’ evidence of events that followed the outbreak which Mr. Sears observed and heard.

[13] Regarding the position of banks, this is also evidence of Mr. Sears’ own experience, which is hardly surprising in the circumstances and is capable of being challenged, if the defendant wishes to do so.

[14] Mr. Sears can also speak to grazing leases, as he leases grazing lands. His statement does not contain hearsay and can be the subject of cross-examination, should the defendant wish to challenge it.

[15] I also see no inadmissible hearsay at all in paragraphs 121 and 122 of the affidavit, which simply provides Mr. Sears’ beliefs as to the long term impact of the BSE crisis, which are informed by his position as a cattle farmer and as an active participant in the cattle industry.

[16] Finally, the objection to Exhibit “V” is puzzling. Exhibit “V” is in fact a document produced by the defendant which has already been referred to in the read-ins and is part of the record. Mr. Sears simply makes use of the document, which contains pricing information, to discuss his calculations of his own losses. There is nothing wrong with doing so.

Paul B. Schabas J. Date: March 1, 2021