| Executive Summary
The trials of David Sawatzky, Andrew McMechan, and Bill Cairns are, arguably,
the judicial cornerstones of the CWB debate. An examination of these
cases provides a foundation for understanding recent grain-related
changes in the legislative and judicial realms. In this paper, the
evaluation of criminal cases will involve three steps. First, how
the cases arose will be described. Secondly, the major arguments
introduced at the trial or appeals case will be evaluated.
Finally, the actual and potential effects of the decision will be
discussed.
David Sawatzky admitted to making 860 grain runs to the United States
between November 30, 1993 and August 5, 1994 with wheat and barley worth
over US $2.2 million. At no time did he possess a valid Canadian
Wheat Board export licence. Accordingly, he was charged with
failing to provide Canada Customs with a licence granted by the CWB for
grain exportation under section 95(1) of the Customs Act.
The Crown and the defense argued over two main points. The
first dealt with how the governing legislation and regulations should be
interpreted. Ambiguous wording provided to be a stumbling block;
both sides advanced contrasting opinions as to the government's intent
in drafting given pieces of legislation. The second consideration
was how different versions of the same legislation should be read.
Inconsistencies between the French and English translations of Customs
Act regulations fueled the Crown's claim that, if the interpretation
question was unanswerable, then the clearest and most developed version
of regulations and legislation - in this case, the French translation -
should be used when considering Sawatzky's case. Sawatzky was
acquitted of all charges against him.
Between December 1993 and July 1994, Andrew McMechan and Bill Cairns
made 97 shipments of wheat and barley worth over US $300,000 to the
United States on behalf of other farmers. McMechan was
subsequently charged with four counts while Cairns was charged with two
counts, of failing to provide the Chief Officer of Customs a licence
granted by the CWB for grain export under section 95(1) of the Customs
Act.
It should be noted that the charges against McMechan and Cairns were
identical to those leveled against Sawatzky. Accordingly the Crown
approached the case in a similar manner. The main difference,
however, was that the questioning of differences between the French and
English versions did not arise. Rather, the trial hinged on
whether permits were explicitly called for under the governing legislation.
Both McMechan and Cairns were convicted.
On March 3, 1996, McMechan exported 50 bushels of barley to the
United States through the customs port at Lyleton, MB. Upon return
to Canada, customs officials seized his tractor pursuant to the
provisions of the Customs Act. McMechan, despite being warned that
if he left the port with the tractor he would be charged with theft for
not surrendering the vehicle, left the port. Later the same day,
he returned with 1,200 bushels of barley and drive straight though a
Customs roadblock. Following the incident , seven charges -- three
under the Customs Act, three under the Criminal Code, and one under the
Immigration Act -- were laid against him.
The seven charges prompted three general responses from the defense.
First, the grounds of the seizure were questioned. It was asserted
that, if Customs had decided to seize McMechan's tractor based on the
same regulations that had acquitted Sawatzky, then the seizure was
invalid. The second claim, that an individual is only required to
present themselves at Customs, but not ensure they are questioned or
given proper leave meant that there was no obligation for McMechan to
remain at Customs. Finally, the defense questioned how a seizure
should take place. In this case, they argued that if Customs did
not physically takes possession of the seized good, the seizure is
void. The Crown, naturally, took issue with these claims.
They argued that there was no place in law where the defense's
assertions were substantiated, and that precedent had been set disproving
them in previous trials. McMechan was initially convicted on all
seven charges. His appeals case overturned one Criminal Code
conviction.
The final section of this paper examines the effects of the rulings
in each of these three cases. The Sawatzky trial forced regulatory
changes to be made. Within hours of the ruling, the CWB
regulations were amended to explicitly call for producers to obtain
export permits and to produce them to Customs officers. The
McMechan and Cairns ruling, despite being condemned as weak, served to
reinforce existing legislation and regulations. The rulings'
provisions have, however, fallen into disuse. Finally, the
McMechan decision made following trials easier by providing jurisprudence
which had not, until then, existed.
Introduction
In January, 1997, Farmers for Justice members Andrew McMechan and Ken
Dillen appeared on the Dave Rutherford Show in Edmonton. McMechan,
having recently been convicted on all charges laid against him stemming
from a March, 1996, incident at Lyleton, MB, was unabashed in his
condemnation of the Canadian Wheat Board. Callers were equally
extreme, some going so far as to liken the federal government to a
dictatorship. A fascist Nazi would disagree that those are
excessive, even mean statements. These statements, however,
closely parallel the 'in-your-face' protest actions taken by CWB
opponents. These actions incite strong feelings on both sides of
the issue. Some attack CWB opponents as a dangerous fringe
movement, while others extoll them as crusaders and heroes. David
Sawatzky openly admitted to hundreds of illegal grain runs to the Untied
States. McMechan and Bill Cairns exported grain for their
neighbours and friends. McMechan defied customs officials by
sealing a seized tractor and using it to export grain.
Accordingly, their trials spark great controversy.
The trials of Sawatzky, McMechan, and Cairns, are, arguable, the
judicial cornerstones of the CWB debate. The first forced
regulatory changes to be made, while the two latter strengthened
existing regulations. Therefore, an examination of these cases
provides a foundation for understanding recent grain-related changes in
the legislative and judicial realms. The assessment of these
criminal cases will involve three steps. Firs, how the cases arose
will be described. Secondly, the major arguments introduced at the
trial or appeals case will be evaluated. Finally, the actual and
potential effects of the decision will be discussed.
In the aforementioned cases, the three defendants decided to
represent themselves with the help of Dan Creighton. For their appeals
cases, Sawatzky and McMechan hired Greg Brodsky and Leonard Tailleur, respectively.
Therefore, any mention of the defense will refer to the arguments
present by the defendant, counsel or the presiding judge.a
Grain Handling
Before proceeding, a brief description of the present grain
exportation system is required. To legally export commodities
under CWB control the Canadian Wheat Board Act (CWB Act) requires an
export permit to be obtained. Under the buy-back process after the
grain is contracted to the CWB a producer can purchase his grain back at
a price equal to the CWB's opportunity cost and apply for an export
licence. Copies of this licence are then forwarded to Canada
Customs and are later matched with the exporter's copy to verify that
the export has taken place. As will be shown, Sawatzky, McMechan,
and Cairns attempted to circumvent this process and, consequently, were
convicted under the governing regulations.
(i.) David Sawatzky
David Sawatzky admitted to making 860 separate grain runs to the
United States between November 30, 1993 and August 5, 1994 with
approximately 13,000 tonnes of wheat and barley worth over US $2.2
million. At no time did he possess a valid Canadian Wheat Board
export licence. Much of the grain was infected with fusarium
fungus, thus prohibited for export because it exceeded the CWB's
prescribed tolerance for human or animal consumption.
Sawatzky was charged with:
Customs Act section 95(1) and Reporting of Exported Goods
Regulations [REGR] section 5: two counts of failing to provide the
Chief Officer of Customs a licence granted by the CWB for grain
export.
The Crown's case -- Sawatzky's actions weighted against the provision
of the Customs Act and the REGR -- seemed well founded in law.
There was, however, one problem: do the two Acts explicitly call for
export permits to be presented to customs officers? Although the
Crown conceded that there were no clear provisions under the given
sections of the two Acts, it was argued that, if the entire body of
legislation relating to exportation of grain was considered, there was
an implicit requirement for licences. Consequently, Sawatzky
became an exercise in reconciling the REGR, Customs Act, and the CWB Act
with each other. Two arguments were central to this. The
first dealt with how legislation and regulations should be
interpreted. The second consideration was how differing versions
of the same legislation should be read.
The first argument hinged on section 5 of the REGR. It reads:
5. For the purposes of these Regulations, the exporter of the goods
shall provide to the chief officer of customs on or before the day of
exportation any information and all certificates, licences, permits or
other documents relating to the goods required to be provided under
the Act or any regulations made pursuant thereto or under any other
Act of Parliament or regulations made pursuant thereto that prohibit,
control or regulate the exportation of goods.
The sticking point was how "provide" should be interpreted.
The Crown had an interest in keeping the definition wide to ensure that
no interpretation was excluded. If "provide" was seen in
a similar sense as "obtain," then Sawatzky's conviction would
be assured. The Crown insisted that any ambiguities resulting from
broad interpretations were clarified when the legislation was examined
both as a whole and measured against corresponding sections of other
Acts. Since the REGR is subordinate to the Customs Act, it cannot
be interpreted on its own. Citing Justice Weston in Francouer
v. Canada (1994) 78 F.T.R. 109 FCTD:
The Customs Agency serves to organize the movement of goods in and
out of Canada and supports the administration and enforcement of
other other statues that relate to the importation an exportation of
goods (emphasis added).1
In short, the REGR must be read with the Customs Act.
95(1) Subject to paragraph (2)(a), all goods that are exported
shall be reported at such time and place in such manner as may be
prescribed.
(2) Governor in council may prescribe
(a) The classes of goods that are exempted from the requirements
of subsection (1) and the circumstances in which any of those
classes of goods are not so exempted; and
(b) the classes of persons who are required to report goods under
subsection (1) and the circumstances in which they are so required.
The Crown argued that, in addition to allowing broad interpretations
to be made, Parliament's intent in drafting legislation should be
examined. The most effective way to understand the intention of a
section is to read it in the context of the entire regulation. If
section 5 of the REGR is unreasonably vague, the other sections should
be consulted for clarification. According to the Crown,
"words have meaning because of there context in the statute [...
and...] must be read in the context of the statue as a whole."2
Evaluating the meaning of a section outside of the context of an entire
regulation risks dividing the regulation against itself. Moreover,
the delicate balance between complimentary pieces of legislation may be
skewed by misinterpretation.
By advancing this argument, the Crown hoped to introduce section 3 of
the REGR into the trial. It reads:
3. Except as otherwise provided in these Regulations, all goods
that are exported shall, prior to their exportation, be reported under
section 95 of the [Customs] Act in writing by the exporter, the agent
of the exporter or the person transporting the goods.
The provisions of section 3 place on the exporter the duty to report
goods in writing prior to export. The difference between section 5
and section 3, therefore, is that in the former "provide"
places no obligation on the exporter to obtain a permit , while in the
latter "report in writing" demands an exporter both obtain and
show a permit. In short, the difference is the legal
interpretation of the wording.
A second, equally compelling, argument was made by comparing the
English and French translations of legislation. The Crown
asserted, since the French and English version of section 5 of the REGR
were different, the stronger of the two should be used in rendering judgment.
The French version, which reads, "[any certificates, licences, or
documentation] which are required pursuant to the Act or any other
federal statute [shall be presented to Canada Customs]'" instead of
the English "shall provide to," eliminated the need to define
"provide." Furthermore, the French version provided an
indisputable link to other legislation -- including the CWB Act.
If properly drawn the link to the CWB Act clarified any deficiencies in
the REGR and Customs Act. Sections 45 and 46 of the CWB Act are
central in this claim:
45. Except as permitted under the regulations, no person other than
the Board shall
(a) export from Canada wheat or wheat products owned by a person other
than the board;
(c) sell or agree to sell wheat or wheat products situated in one
province for delivery in another province or outside Canada
46. The Governor in council may make regulations
(c) to provide for the granting of licences for the export from
Canada, or for the sale or purchase or delivery outside Canada, of
wheat or wheat products, which export, sale or purchase is otherwise
prohibited under this part
The Crown's argument was based on interpretation; to make an informed
ruling, justice Conner could not examine the REGR without considering
complimentary sections in the Customs and CWB Acts. Each Act, in
short, had to be interpreted in harmony with each other two's
provisions. Accordingly, despite having only been charged under
the Customs Act and REGR, Sawatzky could be found guilty by appealing to
the CWB Act. According to the defense, this argument was, at
best, nebulous.
The defense's argument amount to:
[U]nless the Crown is able to prove that the respondent was required
to provide the export licence to the chief officer of customs at or
before the time or exportation, he must be acquitted.3
The decision to acquit or convict would, thus, hinge on the degree of
interpretation allowed by Justice Conner. While there was no
argument that the REGR is subordinate to the Customs Act, it was held
that the CWB Act was separate. The defense sought to undermine the
REGR and Customs Act by isolating them from the CWB Act. This was
best accomplished by interpreting the two acts narrowly. A narrow
interpretation would allow only the content of the legislation to be
considered, instead of making inferences about its intent. The defense,
therefore, argued that since Sawatzky had been charged under specific
sections of the REGR and Customs Act, those sections must be interpreted
literally.
To limit the REGR, the defense claimed that the French and English
version of the Act were, in fact, identical. The goal was to
discredit the Crown's claim that since the French version is less
ambiguous and mroe in line with the intent of Parliament, it should be
given precedence in any court ruling. The effect would be
twofold. First, the "provide" question would remain
unresolved allowing the defense to advance its narrow definition.
Secondly, the Crown's appeals to the CWB Act would be tenuous.
With respect to the Customs Act, the defense again called for a
limited interpretation. Section 95(4) explained that all written
reports required under section 95(1) should be submitted in the prescribed
form containing the prescribed information as is satisfactory to the Minister.
"Prescribed," they noted, meant filing a form in the manner
authorized by the Minister or in the rules defined within the
regulation. The defense argued:
In order to complete a report, one is to report "in the
prescribed form containing the prescribed information.
However... no prescribed form exists with respect to exports to the
United States.4
The defense charged that, although the Customs Act mandated that a
report be filed by exporters, there was no proper method set out to do
so. Whether an export license was required to be presented, or
even obtained, was unclear in the absence of a proper method for filing
export reports. Accordingly, the defense not only undermined the
provisions of the Customs Act, but also weakened its link to section 5
of REGR.
As explained above, the Crown had argued that sections 3 and 5 of the
REGR were intrinsically linked: one should not be read in the absence of
the other. The defense claimed otherwise; it was recognized that,
if read in isolation, section 5 was ambiguous and weak. The defense,
therefore, keyed on the "provide" question that the Crown had
attempted to downplay. Without the clear provisions of section 3
to "report in writing" which bolstered the interpretation of
section 5, Sawatzky's conviction was uncertain.
(ii.) Andrew McMechan and Bill Cairns
Between December 1993 and July 1994, Andrew McMechan and Bill Cairns
made 97 shipments of wheat and barley worth over US $300,000 to the
United States on behalf of other farmers. At no time did they
possess a valid Canadian Wheat Board export license. McMechan was
charged with:
Customs Act section 95(1) and Reporting of Exported Goods
Regulations [REGR] section 5: four counts of failing to provide the
Chief Officer of Customs a license granted by the CWB for grain
export.
Bill Cairns was charged with:
Customs Act section 95(1) and Reporting of Exported Goods
Regulations [REGR] section 5: two counts of failing to provide the
Chief Officer of Customs a license granted by the CWB for grain
export.
McMechan and Cairns were charged with the same offence as Sawatzky,
and the Crown approached their case in a similar manner. In fact,
the cases were tried almost simultaneously.b As will be
discussed below, however, the outcome of the cases was entirely different.
(iii.) Andrew McMechan
On March 3, 1996, Andrew McMechan exported 50 bushels of barley to
the United States through the customs port at Lyleton, MB. Upon
return to Canada, customs officials seized his tractor pursuant to the
provision of the Customs Act. McMechan, despite being warned that
if he left the port with the tractor he would be charged with theft over
$5,000, refused to surrender the vehicle. Later the same day he
returned with 1,200 bushels of barley and drove straight through a
Customs roadblock. Re-entering Canada, he again passed through the
Lyleton port. He stopped, exited his tractor, and waited for
officers to question him. The officers, meanwhile, were awaiting
instructions from their supervisors as to how to deal with
McMechan. McMechan's wife, Pamela, asked the officers when he
would be dealt with. They answered, "in due time," which
she construed as that the officers "weren't coming out."
McMechan left the port. He was arrested on March 4, 1996, and
seven charges relating to the incidents at Lyleton were laid.5
McMechan's first trial centered on his conduct on March 3, 1996.
Judge Tarwid
Customs Act section 11: Unlawfully failing to present himself for
questioning by a customs officer acting in the performance of his
duties.
Customs Act section 31: Unlawful removal of goods -- a farm tractor
-- from a customs office.
Customs Act section 153(c): Unlawfully, willfully evade compliance
with section 114 of the Customs Act by failing to place in the custody
of an officer property that was seized under the Customs Act -- a farm
tractor.
Immigration Act section 94(1): Unlawfully elude examination under
the Immigration Act.
Criminal Code of Canada section 143(3): Failure to comply with the
conditions of a recognizance -- to keep the peace and be of good
behaviour.
After being released from custody on March 4, 1996, McMechan refused
to follow an order of his judicial interim release to return his seized
tract to custom officials. The second trial concerned McMechan's
unwillingness to comply with this order.
Associate Chief Judge Giesbrecht:
Criminal Code of Canada section 145(3): Failure to turn in a farm
tractor within 5 days from March 4, 1996 to March 9, 1996.
Criminal Code of Canada section 145(3): Failure to turn in a farm
traction within 5 days of March 4, 1996: Offence date March 9, 1996 to
July 6, 1996.
For the purposes of this paper, the Tarwid ruling will be examined in
greater depth than the Giesbrecht ruling as it dealt with more
immediately relevant topics the atmosphere of the Canadian grain trade.
While McMechan was never directly charged with crimes under the CWB
Act or REGR, there clearly were grounds to do so. The Crown has
stated that additional charges could have included:
Exporting grain without a Wheat Board license contrary to section
45 of the CWB Act.
Failing to report the export of grain in writing contrary to
section 3 of the REGR and Section 95(1) of the Customs Act.
Failing to provide a CWB license to the chief officer of customs
contrary to section 5 of the REGR and Section 95(1) of the Customs
Act.
Once can speculate that the Sawatzky decision may have produced uncertainly
about the REGR, Customs Act, and CWB Act. By charging McMechan
under the Customs Act, the Crown may have wanted to avoid using the
contentious provisions of the CWB Act. Moreover, the Crown may
have wished to avoid stoking the anti-CWB fires by promoting the
perception that it aggressively pursues innocent farmers in order to
protect a government monopoly. Farmers for Justice member Rod
Flaman explained that:
[T]he position we were caught in is that we were charged under the
Customs Act. You know, we never had a complaint with the Customs
Act.6
Whatever the reasons fro the Crown not filing grain-related charges,
McMechan still adds to the changing relationship of the three
regulations when the appeals case heard by Justice Menzies is
considered.
There were three key arguments concerning the Customs Act introduced
by the defense during the appeals case. The first maintained that
using the REGR to convict McMechan breached the Sawatzky ruling.
The second examined McMechan's legal obligation to be questioned by
customs officials. The third quested the validity of the seizure.
Once reasonable grounds exist to believe that the Customs Act has
been contravened, seizure of goods or conveyances is
justified. Section 110 reads:
(1) An officer may, where he believes on reasonable grounds that
this Act or the regulations have contravened in respect of goods, seize
as forfeit
(b) any conveyances the officer believes on reasonable grounds
was made use of in any respect of the goods, whether at or after the
time of the contravention
However, the defense claimed that, if section 5 of the REGR
constituted these "reasonable grounds," then McMechan must be
acquitted. Since Sawatzky had invalidated the use of section 5,
there was no basis in law to warrant stopping McMechan. They
reasoned:
[I]t is clear that the reasonable and probably grounds to seize the
tractor the (Accused) Appellant was based on what has now been
interpreted as a provision which imposed no duty on the (Accused)
Appellant.7
In other words, they claimed that if McMechan could not be charged
with failing to provide a license to customs officers, then he should
not be charged with anything else.
It is submitted that the uncertainty of the provision of the Customs
Act and [REGR] created an officially induced area of law which allowed
the (Accused) Appellant to conduct himself in a fashion which imposed to
duty nor created any unlawfulness in his actions at the Customs border.8
The defense's second claim was the McMechan's responsibility at the
customs port was only to stop, not to ensure he was questioned by
officers. If this could be proven, McMechan's conviction under
section 11 of the Customs Act would be overturned. The Customs
Act, the defense held,
only uses the phraseology, eludes examination, but, that clearly
was not what the (Accused) Appellant was doing, for he had stopped for
more than several minutes at the Customs Canada Port.9
McMechan had not eluded questioning, rather customs officials had
refused to perform questioning. Accordingly, McMechan can not be
held liable for the officers' failure to fulfill their duty if he
performed his.
[T]he (Accused) Appellant stopped his vehicle and on both occasions
alighted his vehicle and therefore presented ample opportunity for the
Customs officials to speak to the (Accused) Appellant and in fact did so
on the first occassion.10
Combined with the fact that Pamela McMechan had informed her husband
that the officers "weren't coming out," the defense claimed
that McMechan was justified in leaving the customs port. The
defense's argument can be summarized as: unless officers question an
individual promptly, or inform them why there will be a delay in
questioning, that individual is under no obligation to remain at
customs.
A third argument made by the defense concerning the Customs Act was,
even if the seizure had been justified in law, it is the responsibility
of the customs officer to make it clear that a seizure has taken
place. In the McMechan case, since the officers did not enforce
the seizure by taking physical possession of the tractor, the seizure
was void. The goal was to undermine in a round-about way the
charges laid under section 110 of the Customs Act by showing that
section 114 had not been fulfilled.
114(1)Custody of things seized -- Anything that is seized under this
Act shall forthwith be placed in the custody of an officer.
If the officers did not have custody of the tractor, no matter the
reason, then a seizure could not have taken place. Further, if no
seizure took place, then McMechan could not be charged with the unlawful
removal of his tractor (section 31) as it was still his.
The Crown took issue with these three claims. Justice Menzies
was first reminded that, unlike Sawatzky, McMechan had not been charged
under the REGR. The seizure was based solely on the Customs Act,
thus any charge rests on the provisions of the entire Act. The
REGR, being subordinate to the Customs Act, can be used to support the
charges, but must be read as a whole. If the seizure of McMechan's
tractor rested on the REGR, then section 3 is as useful for determining
the validity of the charges as is section 5. Therefore, even if
the interpretation of section 5 of the REGR established in Sawatzky was
accepted, there would still be no basis for the claim that the seizure
was unlawful. The Crown concluded:
The Appellant is incorrect throughout his factum to presume that the
lawfulness of the seizure of the Appellant's tractor rests solely on
failing to provide a Canadian Wheat Board license contrary to section 5
of the [REGR]. As stated earlier there was another infraction of
the Customs Act committed by the Appellant, namely a contravention of
section 3, to warrant subsequent seizure of his tractor.11
and,
there was a clear violation of section 3 (failure to report in writing)
of the [REGR] committed by the Appellant. The seizure of the tract
was therefore supported in law, even if this Honorable Court were to
strike down section 5 of the [REGR] as being unconstitutional.12
The second argument, that McMechan was required to stop but not
ensure he was questioned, was refuted by citing legal precedents.
The most noteworthy of these cases is R. v. Wong (1991) BCJ No.
3931 (BCSC) which established that the questioning power of customs
officers exists for a "reasonable period of time" after an
individual's arrival in Canada. This would mean that McMechan's
responsibilities extended beyond merely stopping, rather he must wait
until he was granted leave by customs officers. The Crown stated:
There is no time limit that a person has to wait before leaving
Customs, otherwise people could legally evade their responsibility to
answer questions put to them by Customs Officers about what they were
bring (sic) into the country and what their immigration status was based
solely on personal perceptions relating to an artificial time limit.13
Since McMechan did not speak with a customs officer after his second
trip, clearly he could not have been given leave. Accordingly,
[t]he Appellant did not fulfill the requirements of section 1 of
the Customs Act because he left before he could be question [...] the
burden was on him to establish he acted with due diligence in the
circumstances. (emphasis added).14
No matter the situation it is the customs officer's decision as to
when an individual can leave a customs port. Even in the event
that customs officer neglects this duty, it becomes the individual's
obligation to secure this permission. In short, the burden of duty
rests on the individual. On the third claim, that the tractor had been
improperly seized, the Crown argued that force is the last resort of
customs officers. The extreme patience of the officers, in spite
of McMechan's behaviour, is illustrative of the law. Once a
seizure has occurred, the onus is on the individual -- not customs
officers -- to ensure the law is complied with.
The Customs Act relies on voluntary compliance [...] it is a
"self reporting system." It places legal obligations
on people to do acts [...] The Crown submits that when goods are
seized as forfeit to the Crown there must be some mechanism to
transfer "physical possession" of the item to the Crown,
otherwise the law would expend physical force to be used when someone,
like the Appellant, is recalcitrant to turn over the seized property.15
Since McMechan was told he would be charged with theft if he removed
the vehicle, yet failed to comply, he clearly did not fulfill his responsibilities
under the law. The Crown submits that there was no question that
he understood that a seizure had taken place because he was given the
opportunity to discuss the matter with the customs officers' superior,
yet refused the chance. If there is a more appropriate method of performing
a seizure, force is to be avoided. In this case, the officers
decided to let McMechan leavd and take possession of the tractor the
next day. Physical force was avoided because there was more
suitable alternative. (iv.) Other notable cases Justice
Thornson noted, while presenting his ruling in the Clayton Desrochers
case, that: I had the impression when I heard this case that in some
sense, Canada Customs is put in the position of regulating this matter,
not happily or unhappily, but because it's their job and it arises from
the question before me, exporters sand the Canadian Wheat Board, only
because of the nature of that relationship has it become a Customs
matter at all.16 His observation
would prove prophetic. The nature of grain related incidents began
to change following the Sawatzky, McMechan and Cairns trials.
Grain runs to the United States were no longer for economic reasons,
rather they were don to protest the CWB monopoly. Farmers became activists
rather than exporters. With this shift, naturally, came a change
in the nature of charges laid. Fewer cases were based on
contravention of export regulations: reporting in writing under the REGR
and Customs Act, or obtaining a permit under section 45 and 46 of the
CWB Act. Most were now filed under sections 11 and 153(c) of the
Customs Act which related to evading questioning by customs
officials. This will be discussed further in the effect of the
rulings section. Judgment (i.) Sawatzky Justice
Conner agreed with the defense claim that the English and French
versions of REGR were identical, thereby discounting the Crowns claim
that the REGR, Customs Act and CWB Act regulations should be read in
harmony. He explained:
[T]he interpretation of these regulations has to stand on its own
without any reference to the CWB Act.17
The decision, therefore, was made according to the English version of
the REGR. In this judgment, Justice Conner explained:
It is the words which follow repeatedly the words "required to
be provided" which are contentious. Do these words modify
the information and documents in a sense that only information and
documents obtained under its regulations that prohibit, control or
regulate the exportation of goods are to be provided, as Crown counsel
contends, or do the words qualify the obligation to provide
information and documents identifying the circumstances in which the
information and the documents are to be provided to the chief officers
of customs, in the sense that only information and documents which are
mandated to be provided by an Act or regulation must be provided to
the chief officer of customs?18
Justice Conner concluded that a narrow interpretation of the REGR was
most appropriate. He reasoned that unless the words "required
to be provided," are read as mere surplusage, then some meaning
must be given to them. In short, interpretation could not be so broad
as to remove all meaning from the regulation itself.
"Provided " was taken at face value; Conner ruled that nowhere
in the applicable legislation is there a statutory requirement that once
obtained, a permit has to be provided to a customs officer before
exportation. His ruling relied more on the appropriate meaning of
regulations, rather than their interrelation. Ultimately, Justice
Conner reasoned:
Having regard to this interpretation of section 5 of the Reporting
Regulations, I hold that the Customs Act, the Wheat Board Act and the respective
regulations did not require Mr. Sawatzky to provide to the Chief
Officer of Customs any information, certificate, licenses, permits or
other documents relating to the what and barley which he
exported. Crown counsel could not identify any other Act of
Parliament or regulations made pursuant thereto that prohibit, control
or regulate the exportation of goods which mandated Mr. Sawatzky to
provide to the Chief Officer of Customs and information, certificate, licenses
permits or other documents relating to the wheat and barley which he
exported. I therefore acquit Mr. Sawatzky of the charges under
the Customs Act.19
While he agreed that Sawatzky had broken the law, there was no legal
foundation on which to base the charges. Justice Conner explained
that a conviction could have been made,
pursuant to section 95 of the Customs Act and section 3 of the
Reporting Regulations, Mr. Sawatzky was required to report in writing
at the appropriate customs office, the export of the wheat and
barley. However, Mr. Sawatzky has not been charged for failing
to report as required by section 95 of the Customs Act and section 3
of the Reporting Regulations. He has been charged with failing
to provide to the chief officer of customs a license granted by the
Board for the export of grain contrary to section 5 of the Reporting
Regulations.20
The Crown's appeal of the ruling maintained that Justice Conner had
erred in his interpretation of section 5 of the REGR. By taking
non experts opinion that the English and French versions were identical,
Justice Conner failed to appreciate the true nature of the
regulation. While appeals judge Justice Keyser agreed that the two
versions were indeed different, Justice Conner's ruling was
upheld. The differences, she ruled, did not necessarily mean one
was closer to the true intent of Parliament. Accordingly, the
version most favourable to Sawatzky -- in this case the narrower English
version -- must prevail in rendering judgment. As will be shown, this
case had consequences for both the Canadian legal and legislative
systems. (ii.) McMechan and Cairns Justice Coppleman
convicted both McMechan and Cairns on all charges laid against
them. McMechan was fined $500 per count for a total of $2000 and
ordered to pay nearly $56,000 in damages to the CWB. Cairns was
fined $600 in total. How did Justice Coppleman arrive at a different
conclusion than did Justice Conner, despite having heard similar
arguments? The reasons were two fold. First, Justice
Coppleman accepted the Crown's argument that the governing regulations
should be interpreted broadly. Broad interpretation, he reasoned,
would not create disharmony between regulations provided the meaning was
reasonably appropriate. Citing the Supreme Court of Canada:
If, notwithstanding that the words are clear and unambiguous when reading
their grammatical and ordinary send, there is disharmony within the
statue, statutes in pari materia, or the general law, then an
unordinary meaning that will produce harmony is to be given the words
of, if the are reasonably capable of bearing that meaning. (emphasis
added)21
How then, should the Customs Act regulations be interpreted? As
was argued during Sawatzky, if no clear meaning could be inferred upon
ambiguous passages -- like section 5 -- Parliament's intent should be
examined. In the words of the Crown, "the primary goal of
statutory interpretation [...is...] to give meaning the legislature's
intentions."22 Ultimately, Justice
Coppleman hoped to prevent dividing regulations against themselves. Secondly,
Justice Coppleman reasoned that the a narrow interpretation of the
Customs Act would unduly limit the provisions of the CWB Act. In
Sawatzky, it was ruled that section 5 of the REGR could be read narrowly
and on its own. The result was Justice Conner's judgment that,
while an export license was required to be obtained, it did not have to
be shown. Since the CWB Act relies heavily on the Customs Act for
enforcement, this interpretation renders the CWB Act largely
impotent. Justice Coppleman recognized this problem, and by
allowing for broad interpretation he hoped to avoid it. The
implicit link between the Customs and CWB Acts requires that they not be
at odds with each other. This said, Justice Coppleman reasoned
that it would make no sense to expect an exporter to report in writing
-- REGR section 3 -- without requiring them to show the license as
well. He wrote:
The requirements of other Acts of Parliament are incorporated into
the [Customs Act] by general inference. To construe the words of
the [Customs Act] so as to obviate the need to present an export
license would certainly not be in harmony with the clear intentions of
Parliament in enacting the Canadian Wheat Board Act and regulations.23
While it would be expected that neither McMechan or Cairns would
challenge their sentences, it was, in fact, the Crown that filed an
appeal. Given McMechan's history of insurgency the Crown had hoped
for a stiffer penalty. On July 30, 1996, McMechan's fines were
increased from $500 to $5,000 per count for a total of $20,000 by
Justice Steel. Similarly, Cairns' fines were increased to
$2,000. Cairns later asked Justice Mykle to substitute 60 days jail
time for the fine.c (iii.)
McMechan McMechan was convicted by Justices Tarwid and Giesbrecht
on all seven charges. His sentencing under the Customs and
Immigration Acts netted $13,000 in fines, while the criminal charges
resulted in six months and one day of prison time. Justice Menzies
upheld McMechan's conviction on six of the seven charges, but reduced
his fines to $1,000 and jail time to four months and one day. The
one overturned charge related to McMechan's refusal to turn over his
tractor after the original five day period had expired. It was
found that once he'd failed to turn over his tractor on March 9, 1996,
the offence was complete. The continued failure to turn in the
tractor was not a further breach of the law, since the second charge
merely duplicated the first. This said, it should be remembered that
all of the key convictions were upheld. Unlike Sawatzky, no
judicial loopholes were created in either the trial or appeals
cases. In upholding six of seven convictions, Justice Menzies
largely accepted the Crown's arguments. Regarding the claim that a
seizure resting of section 5 of the REGR was invalid, Justice Menzies
found that, since McMechan had been charged under the Customs Act, not
the REGR, all provision of the Act were applicable to the interpretation
of the offences. Invalid or not, the customs officers had reason
in law to sop McMechan; even if Sawatzky could be applied in McMechan,
whether or not section 5 was valid would have no bearing on the ruling: When
the tractor was seized, McMechan was advised that it was being seized
for a violation of the Customs Act. The officers were acting in
good faith and within the statutory scope of their authority. The
actions taken by McMechan taken (sic) on March 3, 1996 violated both
section 3 and 5 of the [REGR]. A violation of either section
renders McMechan's tractor subject to seizure. Whether section 5
is invalid or not, the officers had the grounds and authority to effect
the seizure of the tractor.24 The
reduction of the fines and jail time resulted from the totality of the
punishment. While individually the punishments may have been just,
together they "reflect a much more serious offence than the one
before the court."25 Effect
of the Rulings The government had two concerns, should Justice
Coppleman find in favour of McMechan and Cairns. The first
centered on possible amendments to the CWB regulations to include a
specific and clear legal requirement for wheat and barley exporters to
present export permits to customs. A second concern was whether
Revenue Canada should change section 5 of the REGR to eliminate any
ambiguities about the responsibility of exporters. Of course, neither
of these concerns had to be addressed after the trail, as McMechan and
Cairns were convicted. However, following the acquittal of
Sawatzky, these concerns returned to the forefront of the government's
agenda. Within hours, the CWB regulations were amended
(SRO/96-265) to explicitly call for export permits to be obtained and
produced. The amendment reads: 14.2 Any person who exports
wheat, wheat products, barley or barley products from Canada shall, at
the time of exportation, give to a customs officer at the customs office
at the point of exit specified on the export license
(1) the original export license for that grain or product, and a
copy of it; or (b) in the case of an export license for multiple
shipments of that grain or product
(i) at the time of every shipment except the final shipment, two
copies of the export license, and
(ii) at the time of the final shipment, the original export license
and a copy of it.
The questions remains if section 5 of the REGR and section 95 of the
Customs Act had been enough to convict McMechan and Cairns, and if
Justice Conner had explained that Sawatzky could have been convicted
pursuant to section 3 of the REGR, why would the CWB regulations need to
be amended? Why wouldn't the government simply amend the ambiguous
provisions of the REGR to read more clearly? Did changes to any
regulations really have to be made? In answering the first question,
it must be remembered that Justice Conner's ruling immediately created
doubt about the provisions of the Customs Act and REGR. No matter
what Justice Coppleman had found before, many individuals were waiting
for an excuse to flout the law. Therefore, given this potential
for protest and upheaval at the border, it was felt that the Sawatzky
loophole should be closed as quickly as possible. It was decided that
the best way was to amend the CWB regulations -- a move which does not
need time-consuming Parliamentary approval 0 -- to require production of
an export license at the time of export. he second question, whether
to amend the REGR, hinged on the scope of the regulations. The
belief was that since the REGR had implications for commodities beyond
grain exports, changes might alter its meaning. In view of the
fact that section 5 was the preferred section for export enforcement of
customs officials, it was deemed easier to change the CWB
regulations. In short, customs did not want to risk sacrificing
the overall effectiveness of the REGR to solve a specific problem. Whether
or not the regulations really had to be amended is debatable. The
government required a document which explicitly called for the
production of CWB export licences by exporters. This is
understandable; reliance on an array of different legislation and
regulations had failed to consistently convict offenders. It must
be asked, however, didn't section 95 of the Customs Act and section 3 of
the REGR solve the inconsistency problem? The legal answer to this
seems to be, in short, that these two pieces of legislation were enough
tot convict illegal grain marketers. Unfortunately, the problem
was not this straightforward. The loophole suggested in Sawatzky
undermined the effectiveness of the applicable regulations; while they
had not been legally diminished, the public perception of the efficacy
was eroded. Even if nothing had changed judicially , a deterrent
was required. It may be that there was no conscious shift away from
laying grain-related charges, but that the nature of offences had
changed. Exportation was no longer commercial in nature --
multiple large shipments -- but for protest. An incident near
Boissevain, MB offers an example of this. Farmers staged a
symbolic protest by exporting sacks of grain in wheelbarrows --
challenging the federal government to lay charges for exporting without
a license, and seize their conveyances. The object was to directly
challenge the Customs Act, REGR, and the CWB Act, rather than evade
it. Protesters wanted to be tried so that they could test the validity
of their charges in court. In such situations, the Crown has
either refrained from charging farmers, or charged them under sections 1
or 153(c) of the Customs Act: evading examination by customs
officers. By selectively charging protesters, the Crown avoided
depriving farmers of their right to protests, while preserving the
integrity of the governing legislation. McMechan and Cairns proved to
be a controversial ruling. Justice Conner's ruling, while it
created uncertainty in grain-related legislation, was generally held as
a proper legal judgment. In contrast, Justice Coppleman's ruling
fell into disuse after the Crown's unsuccessful use of it during the
Sawatzky appeal. While not bound to consider the judgment, Justice
Keyser felt compelled to comment that it was "inconsistent."26
While the Crown had successfully prosecuted McMechan and Cairns, the
legal precedents established during the trial were viewed as weak.
Consistent with Justice Conner's remarks, the Crown stopped charging
individuals under section 5 of the REGR in favour of section 3. The nature
of McMechan's second trial has not yet been fully explored.
Certainly, McMechan's first foray across the border March 3, 1996
resembled a protest grain run: 50 bushes is far from a a commercial
shipment. Whey then, was his tractor seized? One answer is
his checkered past. McMechan had flouted the law numerous times
before and had clearly done so again. In addition, customs may
have believed that this was not a protest shipment, and that McMechan
would return with more grain later. The terms of McMechan's probation
-- pursuant to his conviction with Cairns -- was to "keep the peace
and be of good behaviour." Clearly he had not done so. Since
custom officials testified that they knew of McMechan's probation, they
had reason to charge him for failing to abide by those conditions.
Once McMechan made his first border crossing March 3, he had opened
himself up tot he full spectrum of grain-related charges. Granted
that customs officials and the crown charged McMechan under the less
contentious provisions of the Customs Act, Immigration Act, and Criminal
Code, they would have been justified in charging him under any section
of the Customs Act, REGR, or CWB Act which he had contravened.
This is not to imply that McMechan was unimportant. Despite rulings on
the questioning and seizure provision of the Customs Act, the McMechan
trail was the first to deal specifically with export regulations.
Section 31 -- removal of seized goods -- had rarely been used until
McMechan and remained legally untested. In short, McMechan
provided jurisprudence which had, up to then, not existed.
McMechan provided the judicial viability of untested sections and
allowed the application to other cases. There were two
consequences of this. McMechan reconfirmed the right of customs
officers to seize vehicles used in grain-related offenses. Once a
conveyance has been seized, it is the individual's responsibility to
ensure they have complied with the seizure provisions of the Customs
Act. Customs officers are not obliged to physically take
possession of an item for the seizure to be valid and proper. With
the nature of grain-related cases changing from economic to protest,
seizure provisions have become the most effect means of preserving the legitimacy
of customs regulations. Accordingly, the initial seizure
produces charges pursuant to Customs Act section 110, followed by
charges under section 31, 114 and 153(c) against recalcitrant
individuals, have become the norm. Secondly, McMechan affirmed that
individuals must present themselves, submit to questioning, and be given
leave by customs officers. In terms of the changing nature of
cases, the strengthening of these provision means that, even while
farmers may protest, the Crown retains control over the borders and
enhances the legitimacy of grain-related regulations by ensuring that
sections 11 and 153 of the Customs Act are not rendered impotent. Prepared
by Kasim Alim
AGPD, PDPSD summer student
(204) 984-7791
July, 1998 |
