R. v. Piko Foods Ltd. and Paul Peter Zwierzewicz Date:, 2011 BCPC 204

Citation: R. v. Piko Foods Ltd. and Paul Peter Zwierzewicz Date: 20110811 2011 BCPC 0204 File No: 168943 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. Piko Foods Ltd. and Paul Peter Zwierzewicz RULING ON VOIR DIRE OF THE HONOURABLE JUDGE J. O'C. WINGHAM Counsel for the Crown: Baljinder Girn (for Public Prosecution Service of Canada) Counsel for the Defendant: Catherine Wong Place of Hearing: Surrey, B.C. Dates of Hearing: Nov. 22, 23, 24, 2010; Mar. 28, 29, May 18, 2011 Date of Judgment: August 11, 2011 INTRODUCTION [ 1 ] This is a ruling on a voir dire on the issue of whether the accuseds ’ rights under sections 7 , 8 , 10(

a) and 10(

b) of the Canadian Charter of Rights and Freedoms were violated by agents of the Canadian Food Inspection Agency (“CFIA”) and, if they were violated, whether evidence which was gathered (consisting of statements by the accused, seized food product, seized documents and any derivative evidence) should be excluded from the trial of this matter. [ 2 ] The accused Piko Foods Ltd. (“ Piko ”) and Paul Peter Zwierzewicz (“ Zwierzewicz ”) are charged jointly with offences under the Food and Drugs Act, the Food and Drug Regulations and the Canada Agricultural Products Act and Regulations .

The charges are set out in four counts in Information No. 168943-1. The allegations are that the accused sold or advertised food in a manner that was false, misleading or deceptive, that they sold adulterated food, that they imported into Canada a food

article called Mozzarella that was intended for sale and was likely to be mistaken for mozzarella cheese and which did not comply with the prescribed standard for mozzarella cheese, and that they imported into Canada a mixture of mozzarella cheese in a manner that it was likely to be mistaken for mozzarella cheese. The accused Zwierzewicz is also charged on a fifth count that he failed to provide sales invoices to an inspector who was carrying out duties under the Canada Agricultural Products Act or the Regulations.

BACKGROUND/ISSUES [ 3 ] The accused came to the attention of the CFIA in early May, 2007, when a complaint was received that the defendants were selling a product which was being marketed as mozzarella cheese when in fact it was not mozzarella cheese. [ 4 ] The complaint was given to Bronwyn Fraser, an inspector employed by CFIA, to follow up. Ms. Fraser had subsequent dealings with Mr. Zwierzewicz . In the course of those dealings, Ms. Fraser received statements from Mr. Zwierzewicz that the product that he was marketing as Mozzarella was not 100% mozzarella cheese.

She also entered the defendants’ cooler and seized a sample of the product and placed the product under detention. The evidence suggests that the defendants could market the product but not as

mozzarella cheese and not without a label that complied with the relevant legislation. In the following months Ms. Fraser had further dealings with the defendants. Her evidence was that she was trying to work with the defendants to bring their label for the product into compliance with the relevant statutes and regulations. [ 5 ] The accused say that the actions of Ms. Fraser had as their predominant purpose the determination of the accuseds ’ penal liability and, as such, Ms.

Fraser was obligated to inform the defendants of their Charter rights and, further, that a search warrant ought to have been obtained before she entered the defendants’ cooler and seized the sample of product. [ 6 ] The accused say that, in fact, the actions of Ms. Fraser amounted to an investigation which was conducted under the guise of an inspection. They submit that any evidence obtained as a result of Ms.

Fraser’s dealings with them should be excluded under section 24(2) of the Charter . [ 7 ] The Crown says that the actions of the CFIA agents were part of a lawful regulatory inspection being conducted after a consumer complaint was made to the CFIA. The Crown submits that the predominant purpose of the inspection was to ensure compliance with the relevant statutory and regulatory provisions. The Crown says that the accused voluntarily participated in a highly regulated industry and, as such, they had a lower expectation of privacy and were not entitled to the protections guaranteed by the Charter .

FACTS/EVIDENCE Evidence of Marie DeMontigny and Bronwyn Fraser [ 8 ] On May 8, 2007, Marie DeMontigny , an inspector with the CFIA, received a complaint from a woman named Kathy Scardillo that Piko Foods Ltd. was marketing a product as mozzarella cheese when in fact the product was not real mozzarella cheese. Ms. Scardillo produced a box with two blocks of what appeared to be cheese in it. The label on the box described the product as “mozzarella” and indicated that it had been imported from the EU and that it was prepared for Piko Foods. [ 9 ] Ms.

DeMontigny passed on the complaint to a CFIA dairy inspector, Bronwyn Fraser, and asked her to follow up. Ms. DeMontigny testified that all complaints are followed up. She said that she had no reason at that time to refer the complaint to the investigation

section of CFIA as she had no information as to whether the complaint was or was not valid. Ms. DeMontigny had no prior dealings with either of the accused. Ms. DeMontigny’s evidence was that she had no contact with anyone in the investigation

section of CFIA concerning the complaint until October, 2007. [ 10 ] Ms. Fraser has been an inspector with the CFIA since July, 2006. She described her duties as ensuring compliance with the Regulations and ensuring that the public is protected. Her duties include ensuring that a product is properly labeled , that the ingredients are reflected and that it is safe for consumption. She said that inspectors also protect the industry by ensuring that everyone engaged in the industry is on the same competitive footing. [ 11 ] Ms.

Fraser testified that her authority as an inspector arises under various Federal statutes, including the Canadian Agricultural Products Act and the Food and Drug Act . [ 12 ] Ms. Fraser testified that she has powers as an inspector that investigators do not have. Under the Canadian Agricultural Products Act and the Food and Drug Act, an inspector is empowered to enter premises to inspect, to open containers, to request documents believed to be relevant to food and to stop vehicles relating to the transfer of food. She said that while the inspection

section of the CFIA and the investigation

section are in the same office space, they do not work on the same files at the same time and that inspectors do not receive instructions from investigators. [ 13 ] On May 10, 2007, Ms. Fraser and another inspector, Pamela Glennie , attended at the business premises of Piko Foods Ltd. Their purpose was to follow up on the complaint made by Ms. Scardillo , to gather information about the product and to determine if the complaint was valid and if there was a labeling issue with the product. Ms.

Fraser testified that when a complaint is received, an inspection is done in order to obtain objective evidence as to the validity of the complaint. Her goal, she said, was to attempt to obtain compliance. She said that she had been to Piko’s warehouse in the past and had worked with Mr. Zwierzewicz on a labeling issue. She said that that issue was resolved and that no other steps were taken. [ 14 ] When Ms. Fraser and Ms. Glennie attended at Piko’s business premises on May 10, 2007, Mr. Zwierzewicz was not present. They dealt with a person who identified himself as Mr. Zwierzewicz ’ son, “Stephen”.

They said that they were following up on a complaint and told him that they wanted access to the cooler. Mr. Zwierzewicz ’ son refused to allow them access to the cooler, advising them that his father needed to be there. [ 15 ] Ms. Fraser and Ms. Glennie left after being denied entry to Piko’s cooler. They returned to the CFIA office. Ms. Fraser testified that she was unsure if she had been obstructed by Mr. Zwierzewicz ’ son and she discussed the issue with her supervisor, George Ferguson. [ 16 ] On May 11, 2007, Ms. Fraser sent an email to Ken Lowe, an investigator with CFIA.

In that email, she described the visit to Piko’s warehouse and the fact that she was not allowed into the cooler by Mr. Zwierzewicz ’ son. Her evidence was that she communicated with Mr. Lowe because she wasn’t sure if she had been obstructed and that she was seeking clarification on that issue. [ 17 ] On May 15, 2007, Ms. Fraser and George Ferguson went to Piko’s business premises and met with Mr. Zwierzewicz . Both Ms. Fraser and Mr. Ferguson testified that their intention was to achieve compliance by the accused by having them bring their label into compliance with the statute and regulations. [ 18 ] Mr.

Ferguson testified that he believed that an obstruction had occurred on the May 11, 2007, visit by Ms. Fraser and Ms. Glennie but the issue had not been referred to the investigation

section of CFIA because they wanted to work with the “clients” ( Piko and Mr. Zwierzewicz ) and to achieve voluntary compliance. Mr. Ferguson told Mr. Zwierzewicz that what had occurred on the previous occasion could be considered obstruction, but that they were not going to pursue it.

[ 19 ] Mr. Zwierzewicz allowed Ms. Fraser and Mr. Ferguson access to the cooler. Inside the cooler were boxes labeled “Mozzarella”. Some boxes were empty and some had product in them. Ms. Fraser observed labels on some product, but the labels were not in compliance with the regulations as they did not have the name of the product, the “best before date” or a list of the ingredients. [ 20 ] Ms. Fraser and Mr. Ferguson discussed with Mr. Zwierzewicz the standards for mozzarella cheese in Canada and advised him that it must be 100% mozzarella. Mr.

Zwierzewicz acknowledged that a percentage of the product was not mozzarella. Ms. Fraser testified that she did not consider at that time that an offence had been committed. She said that they were trying to help the accused bring his labels into compliance so that it did not become a bigger issue. She testified that the primary purpose was to educate Mr. Zwierzewicz . She told him that if only a percentage of the product is mozzarella it does not comply with the regulations. Mr. Zwierzewicz disagreed with her, telling her that it was considered mozzarella in Italy. Ms.

Fraser explained to him that the regulations in Canada had to be followed. She detained the product which was in the cooler and took a sample for analysis to determine whether or not the product was in compliance. [ 21 ] Ms. Fraser also requested copies of invoices from the accused relating to the purchase and the sale of the product. She testified that her purpose in doing so was to complete her file, not to build a case for prosecution.

She said that she wanted to see if the accused purchased the product thinking that it was mozzarella so that she could educate him, and she also wanted to know who purchased the product as the purchasers need to know whether or not the product was real mozzarella for nutritional and price purposes. [ 22 ] Although Ms. Fraser received some invoices from Piko , they did not relate to the product in question. [ 23 ] On May 16, 2007, Ms. Fraser again emailed Ken Lowe. In that email she described the visit she and Mr. Ferguson had made to Piko’s business premises.

She testified that she sent the email to follow up to say that she had been given access to the cooler. She said that she was trying to give as much information as possible to Mr. Lowe but acknowledged that she probably gave him more than was needed. [ 24 ] Ms. Fraser’s dealings with the accused continued after May 15, 2007. She testified that she was attempting to assist Mr. Zwierzewicz to get a label for the product that was in compliance with the regulations. She told him that she would assist him for free so that he could bring the product label into compliance.

She received an ingredient list for the product from the accused and an email referring to the product as “ Piko Mozzarella” which she said was not acceptable because it was deceptive. [ 25 ] On July 12, 2007, Ms. Fraser received the analysis of the sample which she had taken from Piko’s cooler on May 15. The analysis showed that the sample contained a higher amount of plant sterols than is permitted for cheese products so that the product cannot be called cheese. [ 26 ] Ms.

Fraser testified that at that point she had reasonable grounds to believe that an offence had occurred in relation to the labeling of the product but that she did not at that time refer the matter to the investigative

section as she was continuing to try to assist the accused in bringing the label into compliance. Her evidence was that it would have been irresponsible for her to ignore the problem with the label as the accused told her that he was bringing in more products. She denied that she received any instructions from the investigation

section of the CFIA to obtain documents or statements from the accused. [ 27 ] On July 13, 2007, Ms. Fraser met with Mr. Zwierzewicz in her office and reviewed the analysis of the sample, the product’s label and the labeling requirements. She told him that the product had tested as “adulterated”. She did not tell him that he could be facing charges. She testified that she did not forward the case to investigative services at that time as she was still trying to get compliance. Ms. Fraser provided Mr.

Zwierzewicz with a Canada Food Inspection Agency document entitled “Basic Labeling Requirements for Pre- Packaged Foods”. She suggested to Mr. Zwierzewicz that he call the product “Mozzarella Flavoured Pizza Topping”. She followed up with a letter to him dated July 13, 2007, in which she outlined the labeling requirements under the Canada Agricultural Products Act and the Consumer Packaging and Labeling Regulations . [ 28 ] Ms. Fraser did not, in any of her dealings with Mr. Zwierzewicz , read to him or advise him of his rights under sections 10(

a) or 10(

b) of the Charter . Nor did she advise him of his right to counsel under

section 7 of the Charter . She did not obtain a warrant to search the cooler at the accused’s business premises or to seize samples of the product complained of. She testified that at all times in her dealings with the accused she was acting in her duties as an inspector; she was not investigating an offence and she was acting within her powers as an inspector, which did not require her to advise the accused of his rights under the Charter or to obtain a warrant to search or to seize product. She testified that she was never instructed by investigative services to do anything. [ 29 ] Ms. Fraser completed an Inspection Report and forwarded it to the Investigative

Section on or about August 30, 2007. After doing so she continued to have dealings with Mr. Zwierzewicz . She did not tell him the matter had been referred to investigation and that he could be charged. She said that she was still doing her job as an inspector by trying to get his label into compliance because he continued to import the product. [ 30 ] On November 1, 2007, Ms. Fraser again wrote a letter to the accused which contained information and instructions on how to bring the label for the product into compliance with the legislation. Evidence of George Ferguson [ 31 ] George Ferguson was Ms.

Fraser’s supervisor in 2007. He described the mandate of inspectors at the CFIA as the routine inspection of products for compliance and safety. He said that inspectors have no powers of investigation. [ 32 ] Mr. Ferguson testified that even if an inspector is of the view that an offence has been committed, he or she will continue with the inspection because the objective is to bring the product into voluntary compliance. He said that in all of his time as an inspector (15 years) , this was the only file which was referred to the investigation

section for enforcement. He said that until this case they were always able to achieve voluntary compliance. [ 33 ] Mr. Ferguson testified that once an inspector becomes aware that a file has become an investigation, the whole file will be passed

on to the investigation section. He stated, however, that the mere fact that an inspector determines that there has been a breach of the statutes or regulations does not trigger an investigation. [ 34 ] Mr. Ferguson’s evidence was that in this case after Ms. Fraser and Ms. Glennie were denied entry to the defendants’ cooler, he believed that an obstruction had taken place but they determined not to refer the case to the investigation

section for enforcement purposes because they wanted to achieve voluntary compliance by working with the clients ( Piko and Mr. Zwierzewicz ). As a result he and Ms. Fraser made a second visit to Piko’s warehouse on May 15, 2007. He informed Mr. Zwierzewicz that the issue on the previous visit could be considered obstruction but he never told him that he would be charged with obstruction. He did not advise Mr. Zwierzewicz of his Charter rights. Evidence of Pamela Davies [ 35 ] Pamela Davies is an investigator with CFIA.

She has been doing investigations since 2005 and was a supervisor of inspectors for one year before that. She described the role of an inspector as one of assisting the party in complying with the laws and the regulations relating to the product. She described the relationship between the inspector and the client as collaborative; explaining the requirements of the law and assisting the client in complying. [ 36 ] She described the inspector’s purpose as verifying and achieving compliance and the investigator’s role as gathering evidence to support a prosecution. [ 37 ] Ms.

Davies’ evidence was that there is no relationship between an inspector and an investigator with the exception that an inspector may ask an investigator for constructive advice, such as a question about the legislation or what the next step in a case might be if the inspector cannot get compliance through education of the client. [ 38 ] Ms. Davies testified that the sole purpose of an investigator with CFIA is to gather evidence and information to ascertain whether there is a violation of the legislation and, if so, to recommend prosecution.

She said that investigators must apply the Charter when investigating, including advising parties of their rights to silence and the need to obtain warrants to search . She also said that investigators cannot compel the production of documents. [ 39 ] Ms. Davies received an inspection report/referral concerning Piko and Mr. Zwierzewicz from Ms. Fraser on August 30, 2007. The report described the various dealings which Ms. Fraser had had with Piko and Mr.

Zwierzewicz from May 10 through July 30, 2007, including at least some of the efforts made to bring the label for the product into compliance and the efforts to obtain invoices from the defendants. Ms. Davies testified that she had had no dealings with Ms. Fraser concerning Piko before August 30, 2007, and she was unsure if she had even met Ms. Fraser before then. She said that she never gave instructions to anyone on how to conduct an investigation. [ 40 ] After receiving the referral, Ms. Davies interviewed Ms. Fraser.

Her practice, once she receives a referral, is to interview the inspector, check to see if there have been prior dealings with the company or person that she will be investigating, interview any witnesses and, if appropriate, conduct a “ Charter warned” interview of the person she is investigating. [ 41 ] Ms.

Davies was questioned concerning the Canadian Food Inspection Agency Enforcement and Compliance Policy (Revised 1999) and, in particular, she was asked in both direct examination and in cross-examination about portions of that policy which provide that inspectors may conduct investigations and that they may assist investigators in conducting investigations. [ 42 ] Ms. Davies said that the Policy was formulated before the decision of the Supreme Court of Canada in R. v. Jarvis 2002 SCC 73 .

She said that it was in force at the time with modifications (which were not in writing) in the way that investigators and inspectors proceeded in order to comply with Jarvis . She testified that she has never asked an inspector for assistance in an investigation. [ 43 ] Ms. Davies was aware that Ms. Fraser continued to be in contact with Mr. Zwierzewicz after August 30, 2007. She did not tell Ms. Fraser to advise Mr. Zwierzewicz of his Charter rights or that he might be facing prosecution.

She said that an inspection may continue after a referral to the investigation section, but if it does, and the inspector becomes aware of a further violation, the inspector would have to make another referral report in order for the investigative

section to pursue it. In the meantime the inspector’s role is to audit to ensure compliance, not to gather evidence. She said that she did not ask Ms. Fraser to get more information. [ 44 ] On November 13, 2007, Ms. Davies telephoned Mr. Zwierzewicz to ask if he would come into her office for an interview. She told him that she was investigating, but not what “investigation” meant. At the time she did not advise him of his rights under the Charter or his right to Counsel. [ 45 ] On November 15, 2007, Mr. Zwierzewicz came to Ms. Davies’ office for an interview. Ms. Davies testified that when she met with Mr.

Zwierzewicz she told him that he was not detained. She said that she told him that he did not have to answer any of her questions but that, if he did, his answers could be used in a Court of law. She could not remember if she advised him of his right to retain and instruct counsel, but said that because he was not detained there was no need to give him his right to counsel. Ms. Davies described Mr. Zwierzewicz as “engaged, cooperative and sometimes quite humorous” in her interview with him. [ 46 ] The Crown is not leading any evidence which arises out of Ms. Davies’ dealings with Mr. Zwierzewicz .

Alleged Charter Breaches [ 47 ] The defendants allege the following breaches of their Charter rights: 1. There was a failure to warn Mr. Zwierzewicz on May 15, 2007, when Mr. Ferguson and Ms. Fraser attended at Piko’s warehouse and discussed the issue of obstruction;

2. On May 15, 2007, Mr. Ferguson and Ms. Fraser were actually conducting an investigation under the guise of an inspection andthey incorrectly relied on the compellability sections of the Food and Drug Act. In doing so, they breached Mr. Zwierzewicz’ rightunder

section 7 of the Charter as he was facing incarceration and he was compelled to provide self-incriminating information. 3. On May 15, 2007, Mr. Zwierzewicz was not provided with his rights under 10(

a) and 10(

b) of the Charter after he told Mr.Ferguson and Ms. Fraser that the product was not 100% mozzarella. 4. On May 15, 2007, Mr. Ferguson and Ms. Fraser searched the defendants’ cooler and seized a sample of product from the coolerwithout first obtaining a warrant, thereby breaching the defendants’ right to be free from unreasonable search and seizure pursuant tosection 8 of the Charter. 5. On May 15, 2007, Mr. Ferguson and Ms. Fraser failed to tell Mr. Zwierzewicz that he could be facing prosecution, therebybreaching his

section 7 Charter rights. 6. Ms. Fraser obtained documents from Mr. Zwierzewicz without warrant and without advising him that materials seized from him orprovided by him could be used to incriminate him. 7. On November 13, 2007, when Ms. Davies telephoned Mr. Zwierzewicz, she did not advise him of his rights under sections 10(a)and 10(

b) of the Charter or to advise him that her investigation could result in penal liability. 8. On November 15, 2007, Ms. Davies failed to properly Charter and warn Mr. Zwierzewicz of his Charter rights, including his rightto retain and instruct counsel. The Law [48] The Food and Drug Act and the Canada Agricultural Products Act are regulatory statutes.

Section 22 of the Food and DrugAct provides that the Minister of Health may designate a person as an inspector for the purpose of enforcement under that Act. Section19 of the Canada Agricultural Products Act provides that the President of the Canadian Food Inspection Agency may designateinspectors for the purposes of that Act. Sections 23-26 of the Food and Drug Act and sections 21-26 of the Canada AgriculturalProducts Act set out the powers of inspectors designated under those Acts.

Under the Food and Drug Act an inspector may, inter alia,enter any place (a warrant is required if it is a dwelling house), examine articles, take samples, seize and detain articles and examine andmake copies of documents. The owner of or the person in charge of a place entered by an inspector is required to give all reasonableassistance and provide any information the inspector may reasonably require.

Inspectors designated under the Canada AgriculturalProducts Act have similar powers which include similar provisions requiring cooperation from those persons who own or are in chargeof the premises. [49] Despite their nature as regulatory statutes, however, these Acts contain provisions which can result in penal liability toindividuals and companies. [50] In R. v. Jarvis, 2002 SCC 73 , [2002] 3 S.C.R. 757, the Supreme Court of Canada considered the distinction betweenthe audit and the investigative powers of tax officials under the Income Tax Act.

Sections 231.1 and 231.2 of that Act contain provisionswhich are similar to those referred to in the Food and Drug Act and the Canada Agricultural Products Act. In Jarvis, the Courtconsidered the circumstances in which tax officials were no longer entitled to rely on the “inspection and requirement” powers in ss.231.1 and 231.2 and when the Charter became applicable in tax officials’ dealings with the taxpayer. The Court determined that the“predominant purpose” of the inquiry is what is important in determining whether the authority involved may rely on his or her statutorypowers or whether the Charter applied.

At paras. 88 – 91 the Court stated: 88 In our view, where the predominant purpose of a particular inquiry is the determination of penal liability, CCRA officials mustrelinquish the authority to use the inspection and requirement powers under ss. 231.1(1) and 231.2(1). In essence, officials "cross theRubicon" when the inquiry in question engages the adversarial relationship between the taxpayer and the state. There is no clear formulathat can answer whether or not this is the case.

Rather, to determine whether the predominant purpose of the inquiry in question is thedetermination of penal liability, one must look to all factors that bear upon the nature of that inquiry. 89 To begin with, the mere existence of reasonable grounds that an offence may have occurred is by itself insufficient to support theconclusion that the predominant purpose of an inquiry is the determination of penal liability. Even where reasonable grounds to suspectan offence exist, it will not always be true that the predominant purpose of an inquiry is the determination of penal liability.

In thisregard, courts must guard against creating procedural shackles on regulatory officials; it would be undesirable to "force the regulatoryhand" by removing the possibility of seeking the lesser administrative penalties on every occasion in which reasonable grounds existedof more culpable conduct.

This point was clearly stated in McKinlay Transport, supra, at p. 648, where Wilson J. wrote: "The Ministermust be capable of exercising these [broad supervisory] powers whether or not he has reasonable grounds for believing that a particulartaxpayer has breached the Act." While reasonable grounds indeed constitute a necessary condition for the issuance of a search warrant tofurther a criminal investigation (s. 231.3 of the ITA; Criminal Code, s. 487), and might in certain cases serve to indicate that the audit

powers were misused, their existence is not a sufficient indicator that the CCRA is conducting a de facto investigation. In most cases, ifall ingredients of an offence are reasonably thought to have occurred, it is likely that the investigation function is triggered. 90 All the more, the test cannot be set at the level of mere suspicion that an offence has occurred. Auditors may, during the course oftheir inspections, suspect all manner of taxpayer wrongdoing, but it certainly cannot be the case that, from the moment such suspicion isformed, an investigation has begun.

On what evidence could investigators ever obtain a search warrant if the whiff of suspicion wereenough to freeze auditorial fact-finding? The state interest in prosecuting those who wilfully evade their taxes is of great importance, andwe should be careful to avoid rendering nugatory the state's ability to investigate and obtain evidence of these offences. 91 The other pole of the continuum is no more attractive. It would be a fiction to say that the adversarial relationship only comes intobeing when charges are laid.

Logically, this will only happen once the investigators believe that they have obtained evidence thatindicates wrongdoing. Because the s. 239 offences contain an element of mental culpability, the state will, one must presume, usuallyhave some evidence that the accused satisfied the mens rea requirements before laying an information or preferring an indictment. Theactive collection of such evidence indicates that the adversarial relationship has been engaged, since it is irrelevant to the determinationof tax liability.

Moreover, although there are judicial controls on the unauthorized exercise of power (Roncarelli v. Duplessis, (SCC), [1959] S.C.R. 121; Babcock v. Canada (Attorney General), [2002] 3 S.C.R. 3, 2002 SCC 57, at para. 25), we believethat allowing CCRA officials to employ ss. 231.1(1) and 231.2(1) until the point where charges are laid, might promote bad faith on thepart of the prosecutors. Quite conceivably, situations may arise in which charges are delayed in order to compel the taxpayer to provideevidence against himself or herself for the purposes of a s. 239 prosecution.

Although the respondent argued that such situations could beremedied by the courts, we view it as preferable that such situations be avoided rather than remedied. It is for this reason that the test isas set out above. 92 Whether a matter has been sent to the investigations

section is another factor in determining whether the adversarial relationshipexists. Again, though, this, by itself, is not determinative. An auditor's recommendation that investigators look at a file might result innothing in the way of a criminal investigation since there is always the possibility that the file will be sent back. Still, if, in an auditor'sjudgment, a matter should be sent to the investigators, a court must examine the following behaviour very closely.

If the file is sent back,does it appear that the investigators have actually declined to take up the case and have returned the matter so that the audit can becompleted?

Or, does it appear, rather, that they have sent the file back as a matter of expediency, so that the auditor may use ss. 231.1(1)and 231.2(1) to obtain evidence for a prosecution (as was found to be the case in Norway Insulation, supra)? 93 To reiterate, the determination of when the relationship between the state and the individual has reached the point where it iseffectively adversarial is a contextual one, which takes account of all relevant factors. In our opinion, the following list of factors willassist in ascertaining whether the predominant purpose of an inquiry is the determination of penal liability.

Apart from a clear decision topursue a criminal investigation, no one factor is necessarily determinative in and of itself, but courts must assess the totality of thecircumstances, and make a determination as to whether the inquiry or question in issue engages the adversarial relationship between thestate and the individual. 94 In this connection, the trial judge will look at all factors, including but not limited to such questions as: (

a) Did the authorities have reasonable grounds to lay charges? Does it appear from the record that a decision to proceed with acriminal investigation could have been made? (

b) Was the general conduct of the authorities such that it was consistent with the pursuit of a criminal investigation? (

c) Had the auditor transferred his or her files and materials to the investigators? (

d) Was the conduct of the auditor such that he or she was effectively acting as an agent for the investigators? (

e) Does it appear that the investigators intended to use the auditor as their agent in the collection of evidence? (

f) Is the evidence sought relevant to taxpayer liability generally? Or, as is the case with evidence as to the taxpayer's mens rea, is theevidence relevant only to the taxpayer's penal liability? (

g) Are there any other circumstances or factors that can lead the trial judge to the conclusion that the compliance audit had in realitybecome a criminal investigation? It should also be noted that in this case we are dealing with the CCRA. However, there may well be other provincial or federalgovernmental departments or agencies that have different organizational settings which in turn may mean that the above factors, as wellas others, will have to be applied in those particular contexts. ANALYSIS [51] The defendants submit that Ms. Fraser and Mr.

Ferguson were conducting a de facto investigation from the beginning of theirinvolvement with the defendants. They say that the predominant purpose of their involvement was to determine the penal liability of thedefendants. Did the Authorities Have Reasonable Grounds to lay Charges? [52] The evidence indicates that the information provided by Ms. Scardillo came in as a complaint. The defendants say that theexistence of a detailed tip from Ms. Scardillo should lead to the conclusion that Ms. Fraser and Mr.

Ferguson were conducting a de factoinvestigation. [53] The mere existence of a complaint is not sufficient to constitute reasonable and probable grounds that an offence has beencommitted and to require a search warrant (The Attorney General of Quebec v. Jonathan Potash, (SCC), [1994] 2

S.C.R. 406 ). In the Potash case the Supreme Court of Canada stated, at paras . 86 -87: 86 It is of the very nature of an administrative inspection in a regulated industry that it takes place when there are no reasonable grounds to believe that a particular offence has been committed. The question must be whether, when the inspection is not at random but results from a complaint made by an employee, a different conclusion as to the reasonableness of the limits set out in the second paragraph of s. 22(

e) ACAD is warranted. A complaint was made in the present appeal as well as in some 9,357 inspections made in 1991 (see 1991 Annual Report, Record - Addendum, at p. 292). It could be argued that, when a complaint is filed, the situation is close to the one contemplated in Hunter v. Southam Inc. , since it is then possible to identify a particular offence which may eventually lead to a penal prosecution. I do not, however, subscribe to this argument. 87 In my opinion, a mere complaint is insufficient in itself to justify inspectors being subject to the requirements of Hunter v. Southam Inc.

There is an important distinction between having reasonable and probable grounds to believe that an offence was committed and simply having an information , especially if the latter is given anonymously. An inspection will often be necessary before it is even possible to establish the existence of reasonable grounds to believe that a breach of the law has occurred. This is the position taken by appellate courts in various provinces, inter alia in the aforementioned decisions of the Ontario Court of Appeal, R. v. Quesnel , at p. 83, and Ontario Chrysler

(1977) Ltd. v. Ontario (Director of the Consumer Protection Division of the Ministry of Consumer & Commercial Relations) , at pp. 150-51. This is, moreover, the position mandated by the fact that the ACAD covers only a regulated industrial sector. [ 54 ] In this case, CFIA received a complaint from a known source. Ms. Fraser was assigned to follow up on the complaint. Her evidence was that all complaints are followed up and that her purpose or goal in following up with this complaint was to objectively determine if the complaint was valid and, if so, to obtain compliance.

That accords with her duties as described in the legislation. At the time that she received the file from Ms. DeMontigny , all she had was a complaint. She did not possess objective evidence that the complaint was valid. I am satisfied based on the evidence that when she attended at Piko’s business premises on May 10, 2007, she did not have reasonable and probable grounds to believe that an offence had been committed. [ 55 ] When Ms. Fraser and Ms.

Glennie were denied entry to Piko’s cooler on May 10, 2007, she sought clarification as to whether she had been obstructed, which is an offence under both the Food and Drug Act and the Agricultural Products Act . When she and Mr. Ferguson attended at Piko’s premises and spoke to Mr. Zwierzewicz , it is clear that they believed that the person that Ms. Fraser and Ms. Glennie had dealt with on May 10 had obstructed them. Despite that, Mr. Zwierzewicz was advised that the obstruction was not going to be proceeded with. [ 56 ] The evidence indicates that Mr.

Zwierzewicz admitted that the product was not 100% mozzarella cheese and that the labelling of the product did not comply with the relevant legislation. [ 57 ] While Ms. Fraser’s evidence was that it was not until July 12 when she received the analysis of the sample which she seized that she had reasonable grounds to believe that an offence had been committed, the evidence indicates that she could have formed those grounds on May 15 with the admissions of Mr.

Zwierzewicz and her observations of the product in Piko’s cooler. [ 58 ] I note, however, that the existence of reasonable and probable grounds is only one factor to consider in an overall contextual analysis ( Jarvis , supra ) as to the predominant purpose of the enquiry. I must, therefore, consider the other factors listed in Jarvis in ascertaining the predominant purpose of the inquiry. What was the General Conduct of CFIA Officials and was it Consistent with the Pursuit of a Criminal Investigation? [ 59 ] Counsel for the defendants submits that Ms. Fraser and Mr.

Ferguson were conducting an investigation when they attended at Piko’s business premises on May 15, 2007. She says that they had determined that an obstruction had occurred on the May 10, 2007, attendance and that Mr. Ferguson threatened Mr. Zwierzewicz with obstruction charges and thereby compelled him to cooperate. [ 60 ] The defendants say that this case is similar to the case of R. v. Kooktook , [2006] NuJ . No. 7 ( NuCA ) in which the Nunavut Court of Appeal found that the

section 7 Charter rights of three accused were breached by fisheries officers who, acting on a tip that the accused had exceeded the quota for narwhal, called the accused and demanded that they attend the fisheries office and bring in the narwhal tusks. Possession of a narwhal without a tusk was an offence. The accused complied with the request and brought in the tusks and provided incriminatory written statements.

They were not told that they might be charged with an offence or that they had a right to a lawyer. [ 61 ] The Court found that the demand for the production of the tusks was not part of a routine exercise of an administrative requirement such as record keeping. It found that the fisheries officers were engaged primarily in the determination of penal liability and that the demand for production of the tusks and tags was a deliberate misuse of a regulatory power by the officers. [ 62 ] In my view, this case is distinguishable from Kooktook on its facts.

In Kooktook , the fisheries officer was clearly investigating a crime. [ 63 ] In this case, the conduct of Ms. Fraser after May 15, 2007, and up until the time the matter was referred to investigation, corroborates her evidence that she was trying to achieve compliance by the Defendants with the legislation, rather than conducting an investigation leading to penal consequences. Once she determined that Mr. Zwierzewicz ’ label for the product was not in compliance, she met with him and corresponded with him on a number of occasions to try to assist him to bring it into compliance.

She offered to review his label and provide advice free of charge. She sent him correspondence on labelling requirements. Those actions are not consistent with a determination that the predominant purpose of her involvement was the determination of penal liability. [ 64 ] The fact that Ms. Fraser continued to try to assist Mr.

Zwierzewicz after July 12, 2007, which is the date that she received the analysis of the sample she had seized and the date that she said that she had reasonable grounds to believe an offence had been committed, is further evidence that she continued to pursue her duties under the Canada Agricultural Products Act and the Food and Drug Act to achieve compliance by Mr. Zwierzewicz and Piko .

[65] It was not until August 30, 2007, that Ms. Fraser forwarded her report to Ms. Davies in the Investigative

Section of CFIA forenforcement. The evidence indicates that prior to that date, Ms. Fraser had had no communication with Ms. Davies and that, with theexception of her consultation with Ken Lowe on the obstruction issue in May, 2007, she had no communication with anyone in theInvestigative

Section and specifically that she did not receive any instructions from anyone in that section. When were the Files and Materials Transferred to the Investigative Section? [66] Ms. Fraser sent her Inspection Report/Referral to the Investigative

Section on August 30, 2007. That was the date of the filetransfer. The evidence indicates that there was no communication between Ms. Fraser and Ms. Davies before that date. [67] In my view there is nothing in the evidence which would justify a conclusion that Ms. Fraser and/or Mr. Ferguson were at anytime acting as agents for the investigators. Although the (admittedly outdated) policy manual indicates that investigators may use theassistance of inspectors in conducting investigations, the evidence in this case does not support the conclusion that that occurred. [68] Ms.

Fraser continued her involvement with the defendants after she had referred the case to the Investigative Section. She agreedthat she did not tell the defendants that the case had been referred for investigation and she did not advise him of the rights under theCharter.

While it might be concluded that there were Charter breaches in the period after August 30, 2007, the Crown is not seeking torely on any evidence which may have been obtained as a result of any such breach. [69] I conclude that the predominant purpose of the involvement of the CFIA inspectors up to August 30, 2007, was to ensurecompliance under the Food and Drug Act and the Canada Agricultural Products Act and that when they attended at Piko’s businesspremises on May 10 and 15, 2007, and when they dealt with Mr.

Zwierzewicz on May 15, 2007, they were conducting a lawfulregulatory inspection as allowed by those Acts. Their subsequent dealings with Mr. Zwierzewicz, at least up until the case was referredto the Investigative Section, also had, as their predominant purpose, the achievement of compliance under those Acts and they wereacting within the authority conferred on them as inspectors by those Acts. Does the Charter Apply When There Exists Statutorily Compellable Information? [70] Counsel for the defendants submits that the accused’s right against self-incrimination as guaranteed by

section 7 of the Charterwas breached in this case. [71] In R. v. Fitzpatrick, [1995] 4 S.R.C. 154, the Supreme Court of Canada concluded that in most cases the right against self-incrimination contained in

section 7 of the Charter is subject to regulatory regimes where there is statutory compellability. At para. 29the Court stated: 29 At issue in this case is the ability of the government to enforce important regulatory objectives relating to the conservation andmanagement of the groundfish fishery.

To suggest that s. 7 of the Charter protects individuals who voluntary participate in this fisheryfrom being "conscripted" against themselves, by having information used against them that they were knowingly required to provide as acondition of obtaining their fishing licences, would in my view be to overshoot the purposes of the Charter. The right against self-incrimination has never yet been extended that far; nor should it be.

The Charter was not meant to tie the hands of the regulatory state. 42 Surely it defies common sense to argue that the state, in seeking to regulate the commercial fishery by attaching certain conditionsto a fishing licence, is coercing an individual to furnish information against himself. Quite the opposite in fact is true; the individual isfurnishing information that is meant to benefit him or her, through proper and fair distribution of scarce fishing resources.

Just becausethis information may later be used in an adversarial proceeding, when the state seeks to enforce the restrictions necessary to accomplishits regulatory objectives, does not mean that the state is guilty of coercing the individual to incriminate himself. The state required certaininformation to be provided, and the individual voluntarily assumed the obligation to do so in deciding to become a fisher in the firstplace. It ill lies in the mouth of someone who knowingly assumes an obligation for a beneficial purpose to argue later that this obligationhas the effect of denying him his rights. [72] In R. v.

White, (SCC), [1999] 2 S.C.R. 417, the Supreme Court of Canada stated that a contextual analysisshould be undertaken in determining the issue. At paragraph 48 it stated: 48 It is the balancing of principles that occurs under s. 7 of the Charter that lends significance to a given factual context in determiningwhether the principle against self-incrimination has been violated. In some contexts, the factors that favour the importance of the searchfor truth will outweigh the factors that favour protecting the individual against undue compulsion by the state.

This was the case, forexample, in Fitzpatrick, supra, where the Court emphasized the relative absence of true state coercion, and the necessity of acquiringstatements in order to maintain the integrity of an entire regulatory regime. In other contexts, a reverse situation will arise, as was thecase, for example, in Thomson Newspapers, supra, S. (R.J.), supra, and Branch, supra.

In every case, the facts must be closely examinedto determine whether the principle against self-incrimination has truly been brought into play by the production or use of the declarant'sstatement. [73] The Court considered four factors as considered by the Supreme Court of Canada in Fitzpatrick, supra. 1.

The Existence of Coercion [74] In both White and Fitzpatrick, the Court found that there was no coercion as the accused decided to participate in the activitieswhich were being regulated (fishing in the Fitzpatrick case; driving in the White case). [75] In the present case, the defendant has chosen to import and market food products. That industry is heavily regulated and requiresparticipants to comply with strict standards of packaging and labeling of products which are meant for human consumption. Nothingrequires the defendant to engage in this commercial activity.

In that sense, this case is similar to Fitzpatrick where the accused chose toengage in fishing, another highly regulated activity. While the defendant submits that the regulatory regime in this case is coercive as itapplies to all citizens by virtue of their participation in day to day business activities, and that the accused must maintain employment to

remain a productive citizen, there is nothing in the evidence to suggest that there were not other less regulated employment or businessopportunities available to the defendant. 2. The Existence of an Adversarial Relationship [76] The defendant submits that an adversarial relationship existed between the CFIA agents and Mr. Zwierzewicz because the CFIAhad received a tip, because there were reasonable grounds for an obstruction charge and because the defendant admitted (or “confessed”)that the product was not 100% mozzarella. In this case the evidence indicates that when Ms. Fraser and Ms.

Glennie attended at Piko’swarehouse on May 10, 2007, they were there to follow up on a complaint and to obtain compliance, if necessary. They were not there toinvestigate an offence. In my view there was no adversarial relationship at that point. [77] Similarly, when Ms. Fraser and Mr. Ferguson attended on May 15, 2007, they went for the purpose of following up on thecomplaint and to achieve compliance, if necessary. There was no threat of an obstruction charge. On the contrary the defendant wastold that no such charge would be pursued.

In fact, any such charge would not have involved the defendant in any event as he had notbeen there when the issue arose. [78] The evidence also establishes that the admission that the product was not 100% mozzarella did not create an adversarialrelationship. Ms. Fraser continued to work in a collaborative fashion with Mr. Zwierzewicz to have him bring his label into complianceafter May 15, 2007. 3.

The Potential for Unreliable Confessions [79] In my view the presence of an inspector asking questions about food products, who possesses the power to inspect and seizesamples of product, does not increase the likelihood of an unreliable confession. If anything, it would lead to a greater likelihood thatany statement would be reliable, particularly if it was known that the inspector was there to facilitate compliance rather than to pursuepenal liability. 4. Abuse of Power [80] The continued involvement of Ms.

Fraser with the defendant was to assist him in bringing his label into compliance with thelegislation and regulations. I have found that that was the predominant purpose of her involvement with the defendants and that it wasnot, as argued by the defendants, for the purpose of conducting an inspection under the guise of an inspection. The use of theinformation obtained by Ms. Fraser in her interactions with Mr. Zwierzewicz, at least up until the case was referred to the investigativesection for the subsequent prosecution of the defendants, is not an abuse of power.

As the Supreme Court of Canada said in Fitzpatrick,supra, at para. 49: 49 My conclusion that it is not abusive for the state to prosecute those who overfish, using their own hail reports and fishing logs asevidence of the offence, is strengthened by reference to this Court's jurisprudence on the application of s. 8 of the Charter in theregulatory context.

In applying a contextual approach under s. 8, this Court has repeatedly emphasized that searches and seizures ofdocuments relating to activity known to be regulated by the state are not subject to the same high standard as searches and seizures in thecriminal context. This is because a decreased expectation of privacy exists respecting records that are produced during the ordinarycourse of business; see in particular my reasons in both Thomson Newspapers, supra, at pp. 506-8, and Comité paritaire de l'industrie dela chemise v.

Potash, (SCC), [1994] 2 S.C.R. 406, at pp. 420-21 and 424, as well as those of Wilson J. in R. v. McKinlayTransport Ltd., (SCC), [1990] 1 S.C.R. 627, at pp. 645-47, L'Heureux-Dubé J. in Comité paritaire, at pp. 443-44, andSopinka J. in R. v. Plant, (SCC), [1993] 3 S.C.R. 281, at pp. 291-96. In my view a similar standard should be applied tothe use in a regulatory prosecution of records that are statutorily compelled as a condition of participation in the regulatory area.

Littleexpectation of privacy can attach to these documents, since they are produced precisely to be read and relied upon by state officials.Similarly, I do not believe it is inconsistent with the principles of fundamental justice for the Crown to rely upon these documents in aprosecution for overfishing. The documents should not be equated to involuntary confessions to investigators, reflecting as they doinstead the voluntary compliance by commercial fishers with the statutory requirements of the regulated fishing regime.

The principleagainst self-incrimination under s. 7 of the Charter should not be understood to elevate all records produced under statutory compulsionto the status of compelled testimony at a criminal or investigative hearing. [81] I conclude that the accused’s right against self-incrimination as guaranteed in

section 7 of the Charter is subject to the provisionsof sections 23-26 of the Food and Drug Act and sections 21-26 of the Canada Agricultural Products Act which require persons subject tothose Acts to give all reasonable assistance and to provide information to inspectors which may reasonably be required.

SUMMARY [82] For all of the above reasons I find that, at least until August 30, 2007, the preliminary purpose of the involvement of CFIAinspectors was to achieve compliance, not the pursuit of penal consequences. [83] I conclude that until that date, at least, there were no breaches of the accused’s Charter rights and that any evidence obtained upuntil that date is admissible at the trial of this matter. [84] As the Crown is not seeking to rely on any evidence that may have been obtained after August 30, 2007, it is unnecessary todetermine for the purposes of this voir dire whether any Charter breaches occurred after that date. ___________________________________

The Honourable Judge J.O’C. Wingham Provincial Court of British Columbia