R. v. Pasco Seafood Enterprises Inc., 2018 BCPC 377

Citation: R. v. Pasco Seafood Enterprises Inc. 2018 BCPC 377 Date: 20180420 File No: 60520-1 Registry: Richmond IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. PASCO SEAFOOD ENTERPRISES INC. REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE L. SMITH Counsel for the Crown: A.R. Clarkson Counsel for the Defendant: B.R.B. Morahan Place of Hearing: Richmond , B.C. Dates of Hearing: March 29, 30, June 26-29, July 4-7, August 14-17, 31, December 15, 18, 19, 20, 2017, March 2 and 23, 2018

Date of Judgment: April 20, 2018 [1] Pasco is charged in Information 60520 with five counts: Count 1 - Pasco Seafoods Enterprises Inc. (“Pasco”) on or between August 5, 2011 and August 8, 2011 at or near the city of Richmond,B.C., did unlawfully buy fish, to wit: salmon, not caught under the authority of a license, contrary to s. 35(2) of the Fishery (General)Regulations, thereby committing an offence under s. 78(

a) of the Fisheries Act. Count 2 - Pasco, on or between August 5 and August 8, 2011, at or near Richmond, B.C., did unlawfully purchase fish, to wit: salmon,caught in contravention of the Fisheries Act or Regulations, to wit: caught during a closed time, contrary to s. 33 of the Fisheries Act,thereby committing an offense under s. 78(

a) of the Fisheries Act. Count 3 - Pasco, on or between August 5 and August 10, 2011, at or near Richmond, B.C., did unlawfully possess fish, to wit: salmon,caught in contravention of the Fisheries Act or Regulations, to wit: caught during a closed time, contrary to s. 33 of the Fisheries Act,thereby committing an offense under s. 78(

a) of the Fisheries Act. Count 4 - Pasco, on or between August 6 and 10, 2011, at or near Richmond, B.C., did unlawfully sell fish, to wit: salmon, not caughtunder the authority of a licence, contrary to s. 35(2) of the Fishery (General) Regulations, thereby committing an offense under s. 78(a)of the Fisheries Act. Count 5 - Pasco, on or between August 6 and August 10, 2011, at or near Richmond, B.C., did unlawfully sell fish, to wit: salmon,caught in contravention of the Fisheries Act or Regulations, to wit: caught during a closed time, contrary to s. 33 of the Fisheries Act,thereby committing an offense under s. 78(

a) of the Fisheries Act. [2]

Section 33 of the Fisheries Act, which is referred to in Counts 2, 3, and 5, provides as follows: No person shall purchase, sell or possess any fish that has been caught in contravention of this Act or the Regulations. [3] Section 35(2) of the Fishery (General) Regulations referred to in Counts 1 and 4 provides: . . . no person shall buy, sell, trade, barter or offer to buy, sell, trade or barter any fish unless it was caught and retained under theauthority of a licence issued for the purpose of commercial fishing, a licence issued under

Part VII, a licence issued under the AboriginalCommunal Fishing Licences Regulations in which the Minister has authorized the sale of fish or an Excess Salmon to SpawningRequirement Licence issued under the Pacific Fishery Regulations, 1993. [4] In a strict liability prosecution such as this, the onus lies on the Crown to prove beyond a reasonable doubt that the defendantcommitted the prohibited acts; if that is proved, in order to escape liability, the onus shifts to the defendant to establish, on a balance ofprobabilities, that it exercised due diligence or was subject to a mistake of fact.

At common law, this is clearly explained in R. v. SaultSte. Marie, (SCC), [1978] 2 SCR 1299: Offences in which there is no necessity for the prosecution to prove the existence of mens rea; the doing of the prohibited act prima facieimports the offence, leaving it open to the accused to avoid liability by proving that he took all reasonable care. This involvesconsideration of what a reasonable man would have done in the circumstances.

The defence will be available if the accused reasonablybelieved in a mistaken set of facts which, if true, would render the act or omission innocent, or if he took all reasonable steps to avoid theparticular event. These offences may properly be called offences of strict liability. Mr. Justice Estey so referred to them in Hickey’scase, [per Dickson, J.] [5]

Section 78.6 of the Fisheries Act codifies the defences of due diligence and mistaken belief for offences such as these: 78.6 No person shall be convicted of an offence under this Act if the person establishes that the person (

a) exercised all due diligence to prevent the commission of the offence; or (

b) reasonably and honestly believed in the existence of facts that, if true, would render the person’s conduct innocent. [6] In this case, as a result of significant admissions made by Pasco, as well as evidence led without challenge at trial, the mainissues relate to whether Pasco has established a defence. [7] In 2011, Pasco was a private corporation in the business of buying, processing and selling fish. According to its president,Jason Ogilvie, Pasco sourced its fish from Alaska, Russia and Canada. According to its head of sales, Casey Sugden, its annual saleswere about $20,000,000.

Its customers included Wholefoods, Sobeys and Loblaws. Pasco had an Eastern Canada sales division, as wellas its plant and main office of sales and operation which were located in Richmond, B.C. [8] Pasco’s composition included employees experienced in purchasing and procuring fish, Jason Ogilvie and David Sugden,(Casey Sugden’s brother). It had employees who specialized in the sale of Pasco’s fish, within Canada and to foreign markets, includingthe U.S. and Japan. Pasco’s sales team included Casey Sugden, Chris Mydske and Roger Banting. Mr.

Banting was VP of sales and incharge of Pasco’s Eastern sales division in Toronto. [9] Casey Ogilvie, Chris Mydske and Roger Banting all testified to the effect that they were just involved on the sales end of

Pasco’s business and looked to Jason Ogilvie and David Sugden to ensure that the fish obtained and sold by Pasco were legal. [ 10 ] Pasco enjoyed decades of cumulative experience in the commercial fish industry: Jason Ogilvie began working in the fishing industry in his mid-teens; he started his first company in the industry about 20 years ago and began Pasco in 2005 or 2006, according to his testimony. Similarly, Casey Sugden worked in the fish industry since the early 2000 ’ s. Pasco was incorporated in November 2006.

Jason Ogilvie and Casey Sugden were owners of the company. [ 11 ] Prior to August 2011, First Nations had been permitted by the Department of Fisheries and Oceans (“DFO”) to, on occasion, catch fish for sale.

As established by the evidence at this trial, this happened, for example, when there was a particularly large sockeye run in the Fraser River in 2010. [ 12 ] The evidence at trial, which I accept from Pasco’s president, Jason Ogilvie, is that Pasco had bought such fish, referred to as “First Nations Economic Opportunity” fish, before August 2011 and that it had bought it through an experienced fish broker, Stan Theologus. [ 13 ] On August 5, 2011, Ronald Sparrow, a member of the Musqueum First Nation, skippered his seine vessel, the Shani Lynne No. 2 , into the waters of or near Johnstone Strait, on the north east end of Vancouver Island. [ 14 ] The waters are in the territory of the ‘Namgis First Nation. [ 15 ] At trial, Mr.

Sparrow presented two documents which he characterized as permits, issued by yet a third First Nation, the Hupacasath. One of the permits purports to authorize Mr. Sparrow to catch 50,000 sockeye salmon under an economic agreement between the Hupacasath First Nation and the Department of Fisheries. The other purports to authorize Mr.

Sparrow to catch 10,000 sockeye (plus by-catch), for food, social, and ceremonial use by the Hupacasath. [ 16 ] The permits do not identify where the permitted fishing is to occur. [ 17 ] The permits appear to be signed by Steven Tatoosh, Chief Councillor of the Hupacasath Band, who is identified as the Natural Resource Manager and the person who will issue landing slips regarding the fishing. [ 18 ] Neither the Musqueum nor the Hupacasath territories are within several hundred kilometres of where the fishing in this case occurred.

The Hupacasath First Nation Resource Department address on the permits is identified as Port Alberni, B.C., which is located at the other end and on the other side of Vancouver Island from the Johnstone Strait. [ 19 ] Mr. Sparrow caught just under 30,000 sockeye salmon on August 5 and 6, 2011. He stopped fishing on August 6, 2011 because of boat problems. [ 20 ] The fish were offloaded from his vessel at a government certified offloading site in Port Hardy late in the day on August 6, 2011.

The fish filled four transport trucks which all left Port Hardy by 9:30 that night, headed for the Lower Mainland. [ 21 ] Three of the trucks arrived at Pasco’s plant in Richmond sometime on August 7, 2011; the fourth arrived at Pasco’s designate facility in Richmond around the same time. Pasco had directed that the fourth truck transporting fish go to a different facility, because Pasco’s facility could not handle all of the fish caught by Mr.

Sparrow. [ 22 ] Pasco began processing the fish and sending it out of its plant to its customers. [ 23 ] On August 8, 2011, two DFO officers, one of whom was witness Katherine Sumi, attended the Pasco plant to inspect the fish. Officer Sumi initially spoke to the plant manager, Sal de Vico. Mr. De Vico told her, in part, that he did not know much about the fish and that she should speak to Pasco’s people. David Sugden arrived and gave Officer Sumi three sets of documents: three bills of lading, three dock tallies, three landing slips, and three permits. Officer Sumi testified that Mr.

Sugden told her that Pasco had received the dock tallies and bills of lading by email and that the permits and landing slips had come down with the fish on the trucks. [ 24 ] At this time, Pasco was permitted to continue to process the fish. After consulting a supervisor by phone, the two DFO officers stopped Pasco’s production and seized the fish from Pasco. [ 25 ] At about five o’clock on the 8th of August, Stan Theologus arrived at the Richmond plant, agitated by DFO’s involvement. He told Officer Sumi that he was going to call the chief of the Hupacasath First Nation.

At about seven o’clock that night, Steven Tatoosh arrived at the Richmond plant; he introduced himself to Officer Sumi. [ 26 ] On August 10, 2011, DFO officers re-attended the Richmond Pasco plant and searched the premises. During the search, a number of internal and external emails were located on Pasco computers and seized. Some of them have been entered into evidence at this trial. [ 27 ] Broadly put, the issues in this case are: 1. Has the Crown proved, beyond a reasonable doubt, the actus reus of the offences charged? 2. If yes, has Pasco established (

i) that it exercised all due diligence, or (ii) reasonably and honestly believed in the existence of facts that, if true, would render their actions innocent? ACTUS REUS [ 28 ] The defendant did not contest the Crown’s proof of much of the case. Counts 2, 3, and 5: “caught during a closed time”

[ 29 ] With regard to the allegation that the fish were “caught during a closed time”, set out in the charges in Counts 2, 3 and 5 in the Information, there is no doubt that that is what occurred: the interplay between

Schedule VI and s. 53 of the Pacific Fishery Regulations , 1993 (which is referred to in s. 35(2) of the Fishery (General) Regulations ), results in a regime whereby, unless there is a specific “opening” by DFO, waters are closed to fishing. [ 30 ] Variation of this blanket closure on commercial salmon fishing in the Pacific Region is provided for in s. 54 of the Pacific Fishery Regulations , 1993 , which refers to closure variations being permitted pursuant to s. 6 of the Fishery (General) Regulations .

Section 7 of the Fishery (General) Regulations sets out the means by which openings/variations of the blanket closure shall be communicated: 7(1) Subject to subsection (3) [irrelevant], where a variation order is made under

section 6, notice of the variation shall be given to the persons affected or likely to be affected by the variation by one or more of the following methods: (

a) broadcasting the notice over a commercial or marine radio station, a radio station operated by the Department or a radio station located on a vessel under contract to the Department that broadcasts in the area or in the vicinity of the area affected by the variation; (

b) publishing the notice in a newspaper that is circulated in the vicinity of the area affected by the variation; (

c) posting the notice in the area or in the vicinity of the area affected by the variation; (

d) transmitting the notice by electronic means to those persons; (d.1) posting the notice on the web site of the Department or of the province; (

e) having a fishery officer or fishery guardian give oral notice thereof to those persons; and (

f) publishing the notice in the next issue of a sport fishing publication, published periodically by the applicable province or by the Department. [ 31 ] DFO Fisheries Notices filed by consent in this trial show that there was no opening in these waters until a Gillnet Opening on August 8, 2011. [ 32 ] In addition, a number of witnesses whom I found to be reliable and knowledgeable about the regulated waters near the Johnstone Strait testified that the waters were closed to fishing on August 5 and 6, 2011. [ 33 ] These witnesses include: (

i) Christy Whitmore, an employee at Keltic Seafood offloading facility, in Port Hardy, who dealt with Pasco and the offload of the fish from the fishing vessel on August 6, 2011, and testified that there was no opening in the area at the time; (ii) Ellen Rose, Ms.

Whitmore’s boss at the time, who confirmed this, testifying to the effect that she was on the DFO’s mailing list and checked for openings as part of Keltic’s regular business practices, given that it operated in a highly regulated industry; (iii) Gordon Wasden, a captain of a test vessel fishing in the area at the time who also testified that the area was closed to fishing. [ 34 ] “Area” in this case refers to the designation given by fishing regulations to the waters at the northeast end of Vancouver Island, near or in Johnstone Strait, where the fishing took place.

Pursuant to the Pacific Fishery Management Area Regulations , much of B.C.’s coast is divided up into numbered “Areas”. The fishing in this case took place in Area 12. [ 35 ] Given all of the evidence at trial, there is no doubt that Area 12 was closed to fishing on August 5 and 6, 2011. There is no doubt that the fish were caught in Area 12. The Crown has proved this part of its case beyond a reasonable doubt.

Counts 1 and 4: “not caught under the authority of a license” [ 36 ] Similarly, there is no doubt that these fish were caught without a licence, within the meaning of s. 35(2) of the Fishery (General) Regulations . [ 37 ] Mr. Sparrow fished in Area 12. He testified that he relied upon two documents which are, on their face, from a First Nation from the southwest side of Vancouver Island, whose territory includes waters in Area 23, not Area 12. The documents do not identify the locale where fishing is said to be permitted.

Fishing regulation and management on B.C.’s coast is integrally tied to the locale of the proposed activity. These documents do not contain this basic and critical information. On their face, they do not appear to be licences. [ 38 ]

Section 78.5 of the Fisheries Act provides the following: 78.5 In any prosecution for an offence under this Act, where a question arises as to whether a person was issued a license, the burden is on the person to establish that the license was issued. [ 39 ] That burden has not been met. [ 40 ] On all of the evidence, the Crown has proved beyond a reasonable doubt that the fish were caught without a licence. Counts 1 to 5: Other necessary elements [ 41 ] With regard to other elements in the charges, Pasco made the following formal Admissions of Fact: 1.

On August 5 and 6, 2011, Ronald Sparrow, using the seine fishing vessel Shani Lynne No. 2 in Pacific Fishery Management Subarea 12-3, in British Columbia caught: 18,046 sockeye (107,788 lbs.)

1,755 pink salmon (32,915 lbs.) 20 coho (267 lbs.) 25 chum salmon (366 lbs.) 9 chinook (94 lbs.) Total: 29,855 salmon (141,430 lbs.) . . . 3. Pasco Seafood Enterprises Inc. (“Pasco”) purchased the salmon caught by Ronald Sparrow from Nu Natural, a registered business in Alberta, through Stan Theologus. 6. On August 6, 2011, Ronald Sparrow and the Shani Lynne No. 2 offloaded the Salmon at Keltic Seafoods Ltd. at 8525 Glenview Road, Port Hardy, British Columbia.

The unloading started at approximately 5:50 p.m. and continued to approximately 9:00 p.m. and accounted in dock unloading tallies 3472, 3473, 3474 and 3475. 7. The Salmon was tallied in Aboriginal Fishery Landing Slips signed by the Chief of the Hupacasath Nation, Steven Tatoosh. Mr.

Tatoosh signed the Tsu-ma-uss Fishery Agreement on July 8, 2011. [ 42 ] With regard to Pasco’s possessing and selling the fish, as set out in Counts 3 to 5, given the admissions, along with all of the other evidence at trial, there is no reasonable doubt but that Pasco possessed and sold the fish as charged. [ 43 ] With regard to buying and purchasing the fish as set out in Counts 1 and 2, Pasco made formal admissions that it purchased the fish from Nu Natural (see: Admission No. 3, above). [ 44 ] I sought further submissions from counsel, after adjourning for decision, about the particularization of the situs of the alleged purchase/buy in the counts.

I have considered these further submissions, in the context of having had an opportunity to consider all of the evidence led at trial. As discussed below, I have concluded that the evidence proves beyond a reasonable doubt that Pasco bought and purchased the fish in Richmond, B.C. [ 45 ] On all of the evidence, including the admissions, I find that the Crown has proved, beyond a reasonable doubt, that Pasco bought, possessed and sold the fish as alleged in Counts 1 to 5 of the Information. DEFENCE CASE [ 46 ] I will turn now to the main issues, which are whether or not Pasco has established that it: 1.

Exercised due diligence in procuring the fish by: a. insisting that First Nations Landing Slips accompany the fish; b. relying on Stan Theologus, a fish buyer with many years’ experience; c. being a second buyer of the fish. 2. Reasonably and honestly believed the fish were lawfully caught in a First Nations Economic Opportunity fishery as a result of the First Nations Landing Slips that accompanied them; 3.

Had been officially induced into error in its belief that the First Nations Landing Slips were proof of the fish’s lawfulness, both by DFO officers and by Steven Tatoosh, the then-chief of the Hupacasath First Nation. ISSUE 1(

a) Has Pasco established that it exercised due diligence in ensuring that the fish were lawfully caught before buying, possessing or selling them, by insisting that First Nations Landing Slips accompany the fish when it arrived at the Pasco plant? [ 47 ] The case for the defence is that Pasco believed that the fish were caught in a First Nations Economic Opportunity fishery, as evidenced by the First Nations Landing Slips which are created in such a fishery. [ 48 ] Jason Ogilvie described three types of fishing: (

i) the standard commercial fishing, conducted by licenced, non-aboriginal fishers; (ii) economic fishers (First Nations); (iii) Food Fish, as it was called at trial, which is for food, social, and ceremonial purposes for First Nations. He testified that Pasco had purchased First Nations Economic Opportunity fish before August 2011. [ 49 ] With regard to the standard fishing, described by Mr. Ogilvie, like all fishing, this is regulated by DFO: it requires licences and DFO sanctioned openings.

Fish caught by such fishers comprise the bulk of commercially sold fish. [ 50 ] As discussed above, the regulations establish a scheme whereby, unless an area is specifically open, it is closed to standard fishing. Openings are communicated by the DFO to fishers and to the public at large by way of Fisheries Notices. Mr. Ogilvie testified that Pasco subscribed to the DFO email issuing such notices, but that he did not review them. [ 51 ] With regard to Food Fish, Mr. Ogilvie testified that he knew that such fish are not legally permitted to be sold. They should never be on a commercial market.

[ 52 ] In 2011, Dave Sugden was in charge of Pasco’s fish procurement and dealt with the logistics of getting the fish from dockside to Pasco’s plant. Mr. Ogilvie testified that Mr. Sugden was trained in all three types of fishing and knew never to buy Food Fish. [ 53 ] Unlike standard fishing, Food Fish fishing is not the subject matter of DFO openings. [ 54 ] First Nations Economic Opportunity fish are permitted to be sold; such fish are caught pursuant to a licence issued by DFO under s. 4 of the Aboriginal Communal Fishing Licenses Regulations . [ 55 ] Mr.

Ogilvie explained that in 2010 there was a very large sockeye run and that Dave Sugden spent a lot of time learning what was legal in relation to fish caught in a First Nations Economic Opportunity fishery. [ 56 ] Evidence was led at trial with regard to there being no Opening announced with regard to any First Nations Economic Opportunity fishing in Area 12. Pasco led evidence about the unreliability of DFO Opening announcements when it comes to this type of fishery elsewhere than Area 12.

Pasco led evidence that, in light of this unreliability (as well as advice received from DFO officers), it had relied upon Landing Slips accompanying the fish as proof that the fish came from a First Nations Economic Opportunity fishery and were lawful. [ 57 ] The defendant’s argument is that, given that the Landing Slips are created in the context of First Nations Economic Opportunity fishing, they are evidence of that type of sanctioned fishery. [ 58 ] Jason Ogilvie testified that Pasco had a policy that no First Nations Economic Opportunity fish would be permitted off the transport truck and into the Pasco plant unless the fish was accompanied by a First Nations Landing Slip, bill of lading, or receiving slip from a government certified offloading site.

He said that if those documents were not with the fish, they would not be accepted in Pasco’s plant. He said that Pasco would never buy a pound of fish without a First Nation Landing Slip and bill of lading. He explained that DFO gives the slips to First Nations to monitor their catch and that each Landing Slip is associated with the fish landed and the fisherman’s name. [ 59 ] Stan Theologus, the fish broker in this deal, testified to the same effect: with many years of having bought fish on the Pacific Coast, often from First Nations, Mr.

Theologus testified that you cannot put fish on the truck unless you have a Landing Slip when purchasing Aboriginal Economic fish, as he referred to First Nations Economic Opening catch. Mr. Theologus testified that without the Landing Slip, he and the business that he said he represented, Nu Natural, would not have touched the fish. [ 60 ] Sal De Vico, Pasco’s plant manager in 2011, testified that if the correct documentation did not accompany the fish, the shipment would be put on hold. He testified that he worked closely with Jason Ogilvie.

He testified that he remembered seeing the bills of lading, dock tallies and Landing Slips when the fish in this case came into Pasco between August 6 to 8, 2011. He testified that he was aware that in 2010 Pasco bought Aboriginal fish, and believed that Landing Slips were necessary documentation. He believed this fish in early August 2011, was from an Aboriginal fishery - fished at the time of the Johnstone Strait test fishery. [ 61 ] Dave Sugden testified that he remembered little of the events underpinning this prosecution.

He testified that he took direct instructions from his boss and supervisor, Jason Ogilvie. [ 62 ] Jason Ogilvie testified that he recalled writing fish buying polices for Pasco with Sal. [ 63 ] Sal De Vico testified that Pasco had no written policy. [ 64 ] Dave Sugden testified that any protocols would have been verbal. [ 65 ] In addition to testifying at trial about the importance of Landing Slips to Pasco, Mr.

Ogilvie swore two affidavits which he adopted during his testimony: the first affidavit was sworn on August 12, 2011, just six days after the fishing, in support of an application in BCSC for injunctive relief; the second affidavit was sworn in March, 2017 in support of an application in this matter for Charter relief based on delay. At para. 36 of this later affidavit, Mr.

Ogilvie avers: [36] As stated in paragraph 8 of my Affidavit earlier referred to, I had been informed by a Fisheries Officer that it was lawful for Pasco Seafood Enterprises Inc. to purchase and possess fish if there was a properly authorized landing slip provided by a First Nation. At all times Pasco Seafood believed the fish were lawfully in its possession. [ 66 ] With this evidence in mind, I will now turn to the documents. I.

The Four Landing Slips [ 67 ] There are four First Nations Landing Slips which Pasco says accompanied the fish to Richmond on August 7, 2011 and upon which Pasco says it relied as evidencing the lawfulness of the fish. Copies of the slips are exhibits at trial (“the Landing Slips”). [ 68 ] The documents are pre-printed forms with “First Nation Fishery Landing Slip” printed at the top, along with a seven-digit number. They provide for the entry of the following information: - date; - time; - landing location; - participant landing fish; - First Nation Vessel;

- Band Name; - Fishing Location; - Name of Monitor; - Signature of Monitor; - Signature of Participant and any certification of the accuracy of the information; - Species (caught): sockeye, coho, pink, chum, chinook (spring) etc.; - a column in which to insert the total number of fish landed; - a column for the number of fish taken home; and - a column for the number of fish released. [ 69 ] Below the space for the monitor’s signature are the following pre-printed words: “I certify that the information on this form is complete and accurate.” [ 70 ] The four Landing Slips are numbered 1-004671, 1-004672, 1-004673 and 1-004674 (I will refer to them by their last four numbers, for ease).

All four of the Landing Slips are dated August 6, 2011. All four identify Steven Tatoosh as the Monitor with what is said to be his signature in each “Signature of Monitor” spot. All four identify the “ Shani Linne II ” as the First Nation vessel. All four slips identify “Port Hardy Keltic” as the Landing Location. (

a) Obvious missing Information in the Slips [ 71 ] All four Slips have the Fishing Location blank. [ 72 ] The omission of the location of the fishing is significant: As explained by Keltic’s Ms. Rose, a fishing location is necessary to reference the applicable rules and regulations applicable to that particular fishing. [ 73 ] When the fish landed on Pasco’s doorstep on August 7th, Pasco accepted the fish into its plant, notwithstanding the apparent omissions on the Slips, which were the documents which Pasco said were critical in its ascertaining the lawfulness of the fish. [ 74 ] In direct examination, Mr.

Ogilvie testified that Pasco expected the landing slips it received to be filled out properly and explained that they were not lawyers and errors were possible. In cross-examination, when asked if he would agree that it is important that a fish buying company have a policy for employees to scrutinize such documents, Mr. Ogilvie replied: “I don’t want to answer your question.” [ 75 ] There were only four, simple documents said to accompany the fish. Separate and apart from the fact that Mr.

Tatoosh’s name appears as “Monitor” and “Participant” on Landing Slip #4674, the omission of the fishing location in all four slips renders questionable Pasco’s stated reliance on these documents to establish the lawfulness of a commodity in a highly regulated field. [ 76 ] Pasco’s accepting the fish, given this glaring omission of highly relevant information in the documents, is not consistent with diligence. [ 77 ] It is also not consistent with the testimony of Mr. Ogilvie, Mr. Theologus, and Mr.

De Vico that the fish would be refused if not accompanied by landing slips, if one accepts that by that term Pasco meant “valid and complete landing slips”. [ 78 ] It is not consistent with Pasco’s position that it was relying on landing slips as proof that the fish had been caught lawfully in a First Nations Economic Opportunity. [ 79 ] I note that on Thursday, August 4, 2011, Pasco’s fish procurer, David Sugden, telephoned Ms. Whitmore at Keltic about the anticipated offload of fish at Port Hardy.

Pasco could, obviously, have telephoned the DFO office in the area that day and ascertained whether the First Nations Economic Opportunity fishing which they say they thought was occurring was, in fact, set to occur according to DFO. The tens of thousands of fish were still alive then. It was a weekday. [ 80 ] Pasco did not take that step. Instead, the defendant says that it relied upon documents proving the lawfulness of a fishery which documents would only exist after the fish were out of the water and transported to their door.

Given that fish are highly perishable, the waste potential is staggeringly high, in the event that Pasco was not to be satisfied with the Landing Slips. It just makes no sense. (

b) Tatoosh not at Keltic on August 6, 2011 at the Offload [ 81 ] Each Landing Slip has a time entry. The first in time is recorded as 5:00 p.m.; the next three are recorded as 6:01 p.m.; 7:20 p.m.; and 7:55 p.m., all dated August 6, 2011. [ 82 ] According to the Admission of Facts discussed above, the salmon were “tallied in Aboriginal Fishery Landing Slips signed by the Chief of the Hupacasath Nation, Steven Tatoosh.” [ 83 ] I accept that Mr.

Tatoosh signed the slips. [ 84 ] Considering all of the evidence in this trial, I find that “tallied” in the admissions means “recorded the number of” or something like that; it cannot mean anything like “counted on site,” because I find, as a fact, that Mr. Tatoosh was not present at Port Hardy to

count the fish himself on August 6, 2011 between 5:00 and 7:55 in the evening or at all. [ 85 ] This finding leads to a discussion of the testimony of Christine Whitmore, one of the more reliable witnesses in this trial. Ms. Whitmore was actually at Port Hardy when Ron Sparrow docked the Shani Lynne No. 2 and the fish were offloaded from the boat. She had opportunity to observe the events about which she testified, directly.

She worked as an employee of Keltic Seafood, the offloading facility licenced by DFO that Pasco chose for the salmon unload; it is a company independent of Pasco and, while I find that Pasco had used Keltic’s services many times before 2011, they were not connected corporately and I find that she was not interested in the outcome of this litigation. As well, as discussed below, Ms. Whitmore, at times in her testimony, identified reasons for her recollection of certain events or words spoken.

During her testimony, she referred to emails (exhibits at trial) that she had received and authored at the time of her involvement in these events, which corroborated her testimony. I found her to be a careful and reliable, disinterested witness. Her lengthy experience in the fishing industry enhanced her reliability. As of June 2017 (when she testified), she was working in Port Hardy as an Aboriginal advisor; before beginning to work at Keltic in 2004, she had fished commercially for three years and been a test fisher for five years.

By the time of these events, she had worked in Port Hardy offloading commercially caught fish, test fish and Food Fish. She had never heard of a First Nations Economic Opportunity fishery or First Nations fish that could be sold. [ 86 ] She testified that she was physically present for the offload of the fish from the Shani Lynne No. 2 .

She identified documents called “offloading tallies”, which are pre-printed forms with Keltic’s name and logo, which Keltic used to record the piece counts coming off the vessel. [ 87 ] She also identified four bills of lading that she had prepared in relation to the trucking of the salmon that came off the Shani Lynne , which is accounted for in the dock tallies. One bill of lading went with each truck. [ 88 ] Ms.

Whitmore testified that while she was present for the offload of the fish, she did not see any monitors or validators or observers or any people performing such a function or checking the offload: Q While you were present for the offload of the fish, did you observe any monitors there or observers or validators or people performing that kind of function, checking the offload? A No, there was none for this. [Transcript: June 26, 2017; p. 11, l. 46 to p. 12, l. 3] [ 89 ] The offloading of the fish began at 5:50 p.m., according to the admissions filed and according to the dock unloading tallies. Ms.

Whitmore was present. She testified that she was the one reporting to Pasco about the movement and quality of the fish; this evidence is corroborated by emails entered into evidence. [ 90 ] I find as a fact that, while the Landing Slips have “Port Hardy Keltic” written as the landing site, Mr.

Tatoosh was not actually at Keltic, in Port Hardy, at the times recorded on the Landing Slips. [ 91 ] While Pasco says that the Landing Slips came down on the trucks with the fish, the evidence does not support that set of events: the one person involved, hands-on, in the logistics of offloading and transporting the fish, from the seiner to the trucks - Ms. Whitmore - was not involved in the Landing Slips. [ 92 ] As discussed below, I find as a fact that Mr. Theologus was not present, nor was a designate from Nu Natural, given these findings. (

c) The Bills of Lading and the Numbers in the Landing Slips [ 93 ] The bills of lading which Ms. Whitmore prepared in relation to the fish and the four transport trucks have reliability in that they were made in the ordinary course of the business of Keltic, a licenced business in a highly regulated industry, by a person who I have found to be reliable, whose job it was to accurately record the information set out in the documents.

I find that the bills of lading accurately reflect certain events of August 6, 2011 at Keltic. [ 94 ] The first bill of lading shows that Truck #1 left Port Hardy with 6,542 sockeye salmon, for Richmond, on August 6, 2011 at 7:10 p.m. These 6,542 fish had been offloaded from the Shani Lynne by Keltic, separated from the other fish when placed into 32 totes and separated from the other totes of fish unloaded when placed into Truck #1. [ 95 ] The second bill of lading shows that Truck #2 left Keltic with 6,694 sockeye, at 8:30 p.m.

Again, these 6,694 fish had been separated out from the other fish caught and placed into 38 totes, which were then separated out from the other totes of offloaded fish and placed onto Truck #2. [ 96 ] The bill of lading for Truck #3 identifies 3,678 sockeye salmon being on board; as well, a single tote (#140) containing 267 pounds of coho, 366 pounds of chum, and 94 pounds of spring salmon; these fish all contained in 22 totes.

The third truck left Keltic at 9:10 p.m. [ 97 ] The bill of lading for Truck #4 records 11,755 pinks and 1,132 sockeye salmon being transported in 40 totes; this last truck left Keltic at 9:15 p.m. on August 6. (

d) Keltic’s Reporting to Pasco of the Numbers found in the Landing Slips [ 98 ] On Saturday, August 6, 2011 at 3:18 p.m., David Sugden emailed Christy Whitmore at Keltic about “Seine Salmon - Aug. 6”. Jason Ogilvie and Ellen Rose are copied on the email. In the email, Mr. Sugden specifically requests that Ms. Whitmore advise Pasco of certain information, including the “weight and piece count per species”; he directs her to put “all pinks plus whatever sockeye can fit

to fill the truck” destined for Viscount Way, in Richmond. [ 99 ] Ms. Whitmore testified that she emailed or faxed the bills of ladings and dock tallies to Pasco immediately. This evidence is consistent with what happens within an hour of the last truck leaving Keltic: At 10:19 p.m. on August 6, Mr. Sugden has the information he had requested from Ms. Whitmore at 3:18 p.m. that day; he sends the information to Jason Ogilvie and Pasco’s sales team members Casey Sugden, Chris Mydske and Roger Banting in an email headed, “Truck breakdown”.

Truck #1: 6,542 sox [which I understand to mean sockeye salmon] Truck #2: 6,694 sox Truck #3: 11,755 pink 1,132 sox Truck #4: 3,678 sox 20 coho 25 chum 9 spring [ 100 ] These numbers reflect the number of the various fish that were placed into totes and then into the four trucks that Pasco had arranged. Keltic arranged the offloading; the placing into totes and the placing into the trucks. According to Ms. Whitmore, no one else was there. (

e) The Landing Slip Numbers [ 101 ] “6,542 sockeye” is written on Landing Slip #4671. [ 102 ] The time on the Landing Slip is stated to be 5:00 p.m.; the location, “Port Hardy Keltic”. As mentioned above, based on Ms. Whitmore’s testimony, which I accept, there was no one at Port Hardy monitoring the offload or counting the fish at Keltic other than her. The offloading of the fish had not begun as at 5:00 p.m. on August 6; it did not start until 5:50. [ 103 ] If Mr.

Tatoosh was on the Shani Lynne , it is possible that he could have counted the fish at 5:00 p.m. and created this Landing Slip on the vessel, without Ms. Whitmore seeing him. However, that would mean that he counted and recorded the exact number of fish that Keltic later divided up into totes and placed into Truck #1. That is most unlikely. [ 104 ] In Landing Slip #4672, “6,694 sockeye” is written in the “Total number of fish landed” pre-printed portion of the slip. The time on this Landing Slip is 6:01 p.m. [ 105 ] “6,694” is the number of sockeye which Ms.

Whitmore wrote on Keltic’s Truck #2 bill of lading which she had sent (by fax or email or both) to Pasco as soon as the offloading was done. It represents the number of fish she counted that were split up into various totes and placed on the second truck. It is the number that Pasco knew was coming to them in Truck #2 before the truck arrived. [ 106 ] At 6:01 p.m. at the Keltic offload site in Port Hardy, the offloading or landing of the fish from the Shani Lynne No. 2 had been underway for about ten minutes. No one, including Mr. Tatoosh, was there, monitoring or counting the fish, apart from Ms.

Whitmore. [ 107 ] In Landing Slip #4673 the “Total number of fish landed” is “1,132 sockeye” and “11,755 pinks”. The time on this Landing Slip is 7:20 p.m. at “Port Hardy Keltic”. Again, I find as a fact that Mr. Tatoosh was not at Port Hardy/Keltic, at 7:20 p.m. on August 6, 2011. [ 108 ] The numbers in this slip are the numbers of each species that Ms. Whitmore wrote as being transported in Truck #4, as indicated in the accompanying bill of lading, Ms.

Whitmore wrote “Pink pieces 11,755” and “sockeye pieces 1,132”. [ 109 ] Finally, in the “Total number of fish landed” spot in Landing Slip #4674, someone has written “3,678 sockeye”; this is the same number as on Keltic’s Truck #3 bill of lading which Ms. Whitmore had sent (by fax or email or both) to Pasco. It is the number referred to by Dave Sugden at 10:19 pm on August 6, in his email referred to above. [ 110 ] The time on the Landing Slip is stated to be at 7:20 p.m. at Port Hardy Keltic. Again, I find as a fact that Mr.

Tatoosh was not counting the fish at Port Hardy at 7:20 p.m. on August 6, 2011; these numbers could not come from him. [ 111 ] The numbers in the Landing Slips, written in by Mr. Tatoosh, are the exact numbers which Dave Sugden refers to in his email at 10:19 p.m. on August 6, 2011. [ 112 ] Pasco had the numbers long before DFO Officer Sumi attended at the Richmond plant on August 8 and received the Landing Slips from Dave Sugden. [ 113 ] Fisheries Officer Sumi saw Mr. Tatoosh at Pasco, in Richmond, on August 8. (

f) Pasco’s Actions Before the Landing Slips Existed [ 114 ] August 5 was the first day of Mr. Sparrow’s unlicensed fishing in closed Area 12. It is the day before the date on the Landing Slips. On August 5, at a minute before midnight, Jason Ogilvie wrote an email to Dave Sugden (the logistics arranger with regard to the

fish), plant manager Sal De Vico, and salesmen Chris Mydske and Casey Sugden. His message includes: 100 k soxi [which I find as a fact refers to 100,000 pounds of sockeye salmon] 30 k pinks [which I find as a fact refers to 30,000 pounds of pink salmon] 10 k coho chum king Offloading tomorrow pm hardy weights are approx. will have more exact tomorrow. We all need to talk tomorrow to form a game plan. [ 115 ] I understand “hardy”, given the facts, to refer to Port Hardy. [ 116 ] At the time of Mr. Ogilvie’s writing, about 140,000 pounds of fish had been caught in the closed Johnstone Strait by Mr. Sparrow. Mr.

Sparrow continued fishing the following day. Clearly, at the time of sending this email to his plant manager and salesmen, Mr. Ogilvie could not have been certain of the lawfulness of the fish, on Pasco’s version of events, because the fish had not been landed and, therefore, no authenticating Landing Slip could exist. [ 117 ] At 11:56 p.m. on August 5, David Sugden emailed Jason Ogilvie, “Where unload?” [ 118 ] At 12:34 a.m. on August 6, Mr.

Ogilvie replied, “Thinking Keltic.” [ 119 ] These emails are consistent with my finding that it was Pasco that was controlling the fishing and was unconcerned with any documentation, created post-catch, supposedly establishing the lawfulness of the fishing. [ 120 ] The Shani Lynne No. 2 offloaded the fish at Keltic Seafood in Port Hardy, the site identified by Mr. Ogilvie in his 12:34 a.m. email. The offloading began at 5:50 p.m. to about 9:00 p.m. on August 6, 2011. The bills of lading show that the last truck of fish left Keltic at 9:15 p.m. This evidence does not materially conflict with the admission.

I find as a fact that this is the offloading facility which Pasco’s president identified for the offloading site of the fish. [ 121 ] About eight hours before the first Landing Slip was created (accepting its accuracy and authenticity for the moment), at 9:24 in the morning of August 6, Pasco’s president, Jason Oglivie, wrote an email to his salesmen Casey Sugden, Chris Mydske and Roger Banting, along with David Sugden, which starts, “Hi thinking 100k sox”. I find as a fact that he is referring to 100,000 pounds of sockeye. He then sets out how some of the fish will be packaged.

He writes: 70k 4-6 - I would like to sell as much of this as possible fresh we have a one day advantage over our competitors as the gillnet opens on Sunday. 10 k 6-9 -- if we can sell this fresh for a premium we should, otherwise we should freeze it for our local jap market 20 k pinks - this market is very short and will be until tues wed. the sales price last week was 1.50 boxed but I think it will be much better Monday.

I do need to sell my dad some. 10 k chum coho spring The sox are going to cost us 3.25 toted Pinks boxed 50s cost 1.32 Coho toted 2.35 Spring h and g toted 3.35 Chum toted 1.85 Sal has been instructed to tote and box as above so if you need to change any for your orders let him know asap This is our time to make some money on a short market lets take advantage, but remember the market will only be short till tues pm. [ 122 ] This message demonstrates that Pasco was not at all concerned with the contents of any First Nations Landing Slips that were coming down with the fish; Pasco is concerned about getting the fish into market while there is a short supply because fishing is closed.

Mr. Ogilvie’s statement that “the gillnet opens on Sunday” is clear evidence that Pasco knows that Area 12 is closed.

This is particularly significant when one considers how Pasco characterizes the fish when dealing with Keltic employees working in the fish industry in Area 12, who would almost certainly know that the area was closed to commercial fishing on August 5 and 6. [ 123 ] The email is markedly lacking any indication that the plant manager will not be letting the fish into the plant unless there is proof of legality, by way of the Landing Slips which Pasco says were conditions precedent to their receiving the fish into the plant. [ 124 ] An hour and a half after this email, salesman Casey Sugden is offering the fish for sale by email.

At 11:01 a.m. on August 6 (six hours before the time on the first Landing Slip), Casey Sugden wrote to a customer as follows: Hi Dan,

We finally have our test seine sockeye out of the water. There will be some chums, pinks and coho with the load. Give me a shout if you want to put something together. [Emphasis added] [ 125 ] This is not a conditional or contingent offer for sale, pending confirmation of the lawfulness of the fish; it is a firm offer. The fish are not offloaded for another six-plus hours; the Landing Slips do not exist.

Even on Pasco’s version, the Landing Slips could not have been in Pasco’s possession at the time of this email. [ 126 ] Similarly, before the time on two of the four Landing Slips, at 6:43 p.m. on August 6, 2011, Pasco’s fish seller Chris Mydske sent an email to David Sugden, Jason Ogilvie, Casey Sugden, Roger Banting, the subject line of which is: “Re: Seine Salmon – Aug 6”, the message is, “YES!!!! Happy Sellin!!” [ 127 ] There is nothing in this email or any reply that indicates that Pasco is waiting for information to confirm the lawfulness of the fish before incorporating it into its inventory for sale.

Findings and Conclusion re: Issue 1(a): i. The Landing Slips were created by Mr. Tatoosh. ii. Mr. Tatoosh was not at Keltic Port Hardy at the time and date on the face of the Landing Slips. iii. Pasco was offering the fish for sale before it could have seen the Landing Slips. iv. Mr. Tatoosh was in Richmond, at Pasco’s plant, on August 8, 2011, at the time of the DFO search. v. The fish were accepted, even though the Landing Slips omit the location of the fish. vi. There was no one at Keltic to put the Landing Slips on the trucks with the fish.

Given this, I find as a fact that the Landing Slips in evidence did not accompany the fish to Pasco’s plant or to its designate plant with the fish. vii. The number of fish recorded or “tallied” by Mr. Tatoosh on the four Landing Slips are the exact numbers that are on Keltic’s bills of ladings and were in possession of Pasco as evidence of Mr.

Sugden’s 10:19 pm email on August 6th. [ 128 ] All of the foregoing has led me to the conclusion that Pasco has not established that it exercised due diligence by ensuring that the fish were lawfully caught by insisting that the First Nations Landing Slips accompanied the fish. Rather, the evidence leaves me with no doubt, when considered cumulatively, that the Landing Slips in this case were false. ISSUE 1(

b) Has Pasco established that it exercised due diligence in ensuring that the fish were lawfully caught before buying, possessing or selling them, by relying on Stan Theologus, a fish buyer with many years’ experience? [ 129 ] Jason Ogilvie testified to the effect that he was introduced to Stan Theologus by a trusted friend in the fish industry, sometime before 2010, as a person with very strong relations with First Nations fishers, which Pasco did not otherwise have. He testified that he interviewed Mr.

Theologus multiple times and ascertained that he had over 40 years of seafood knowledge and had been one of the first buyers when First Nations were first allowed to sell their fish. Mr. Theologus had, according to Mr. Ogilvie, said that he would be able to procure fish through multiple First Nations fishers. He testified that he bought from Mr. Theologus in 2010 without any problem. He said that he had told Mr. Theologus that his rules were that all First Nations Economic Opportunity fish had to be accompanied by First Nations Landing Slips and that as long as things were on the “up and up”, Mr.

Theologus could buy for Pasco. [ 130 ] In 2011, according to Mr. Ogilvie’s testimony, Mr. Theologus had a company that he wanted to run fish purchases through, called Nu Natural. Pasco did not mind and so the fish-buying went through Nu Natural. [ 131 ] Mr. Ogilvie testified that, given Mr. Theologus’ performance in 2010 and his experience as a fish buyer, Pasco expected the same kind of dealings and proper documentation in 2011, when buying the fish from Nu Natural. He testified that he had no contact with the fisher, Mr. Sparrow, and that everything went through Mr. Theologus.

He testified that he was in the office with 100 employees and that he could not be out on the grounds, talking to the fishers, and explained that that is why he hired Mr. Theologus; that sometimes Mr. Theologus is on the Island or up river and that he had always been reliable, for example, ensuring the fish is iced properly. [ 132 ] With regard to these particular fish, Mr. Ogilvie testified that he was in contact with Mr. Theologus many times the day it was unloaded and many times before, when Mr. Theologus knew the fish was coming in. With regard to the monitoring and supervision of the fish, Mr.

Ogilvie testified that he was on the phone with Mr. Theologus “all the time”, especially when it was being unloaded. He explained that there were a lot of variables. He testified that he had the ultimate supervision of Mr. Theologus in that if he did not do a good job, he would no longer have a job. [ 133 ] As noted above, Ms. Whitmore’s evidence contradicts Mr. Ogilvie’s assertions that Mr. Theologus was on the grounds on behalf of Pasco.

She testified that she was the only person at Port Hardy dealing with the offload of the fish from the Shani Lynne . (See: Transcript of June 26, 2017; p. 11, l. 46 to p. 12, l. 3). [ 134 ] This is supported by Ms. Whitmore’s email communications with Pasco’s David Sugden about the timing of the vessel’s arrival; the timing of the offload; care of the fish; and quality reports by Ms. Whitmore to Pasco throughout the afternoon and evening of August 6, 2011. These emails, entered into evidence, make it clear that Pasco is relying upon Keltic’s Ms. Whitmore, not Mr.

Theologus, to obtain information about the timing of the offloading and the condition of the fish. [ 135 ] Mr. Theologus, himself, testified that he was not in Port Hardy at the offload of the Shani Lynne on August 6, 2011; he was in Vancouver at the time of the fish offload (DARS: July 18, 2017 at 10:25; S. Theologus, in cross).

[ 136 ] I do not believe Mr. Ogilvie’s testimony about his relying on Mr. Theologus with regard to the latter’s overseeing the offloading of the fish or with regard to his ensuring that the proper documentation accompanied the fish. I find as a fact that Mr. Theologus was not anywhere near the offload; he was not at Port Hardy ensuring proper Landing Slips were accompanying the fish. [ 137 ] Considering all of the reliable evidence (including the emails entered into evidence and Ms.

Whitmore’s testimony), there is no doubt that Pasco was relying on Keltic employee, Christy Whitmore, when it came to overseeing the offload and quality of the fish, only. Pasco was not relying on Stan Theologus, as a contractor or agent for Pasco or for Nu Natural (which I will discuss shortly) to ensure the lawfulness of the fish. Mr. Theologus had no role in monitoring the sourcing of the fish that Pasco was getting ready to receive and sell. He was not there to ensure that Landing Slips were on the trucks. [ 138 ] I also reject Mr.

Theologus’ testimony that Helen Begin was at Port Hardy, and somehow involved in the oversight of the fish on behalf of Nu Natural; Ms. Whitmore’s evidence is not consistent with this, nor is my finding that Nu Natural had no authentic role in the transaction, discussed below. Conclusion re: Issue 1(b) [ 139 ] Pasco has not established that it exercised due diligence by relying on Stan Theologus because, in fact, Pasco did not rely on Mr. Theologus in any way with regard to ensuring the fish were lawfully sourced. ISSUE 1(

c) Has Pasco established that it exercised due diligence in ensuring that the fish were lawfully caught before buying, possessing or selling them, by being the second purchaser of the fish, having purchased them from Nu Natural, or has it established that a lower standard applies, given that it did not buy directly from the fisher? [ 140 ] In its written Argument, Pasco says: Pasco Seafood honestly believed that the fish had been lawfully harvested. The industry standard requires the first buyer of Aboriginal economic opportunity fish to have in their possession an AFLS [Aboriginal Fishing Landing Slip].

The industry standard does not require an AFLS for a second person buyer to prove that the fish were caught lawfully. Therefore, Pasco met the industry standard of due care and believed that the fish had been harvested lawfully. [ 141 ] Both Jason Ogilvie and Stan Theologus testified that only the buyer who purchases fish directly from a First Nations fisher in a First Nations Economic Opportunity opening requires the First Nations Landing Slip in order to secure lawful possession of the fish.

Essentially, they said that Pasco’s insistence on the Landing Slips accompanying the fish was beyond what was necessary for Pasco to do. [ 142 ] Mr. Theologus explained that Nu Natural was the second buyer of the fish caught by Mr. Sparrow, that the First Nation that had hired Mr. Sparrow to do the fishing (the Hupacasath) was the first buyer. Still, Nu Natural was trying to ensure that there was an Aboriginal Landing Slip, as he described them.

According to him, the next buyer, Pasco, did not have to have the slips. [ 143 ] Nu Natural was a business out of Alberta; a Declaration of Trade Name, made by Helen Begin and filed September 3, 1992, at the Alberta Registrar of Corporations, Province of Alberta was entered into evidence. The declaration identifies Nu Natural’s business as “natural health products”, conducted North of Girouxville, Alberta. [ 144 ] Mr. Theologus testified that Ms. Begin was his girlfriend in 2011 and that she and he joined forces in brokering fish sales around that time; the benefit to him was that she would do the books. (

a) Pasco/Nu Natural Purchase Agreement [ 145 ] A document said to be the contract of purchase between Pasco and Nu Natural in relation to these fish was entered into evidence. Jason Ogilvie testified that he saw Ms. Begin sign the contract in the boardroom at Pasco. Mr. Theologus testified that he saw the parties sign the contract outside of Mr. Ogilvie’s apartment in Richmond. [ 146 ] Ms. Begin did not testify. [ 147 ] The contract is dated July 30, 2011. [ 148 ] In his 2017 affidavit, Mr. Ogilvie swore that Mr.

Theologus contacted him about the fish deal in early August 2011; that is to say, after the date of the contract which is supposed to reflect the deal. [ 149 ] The contract requires Pasco to supply the ice and trucking and to pay for the offloading. Notwithstanding these contractual terms, Mr. Ogilvie testified that Pasco advanced the money for offloading and trucking on Nu Natural’s behalf, because of Nu Natural’s lack of credit with Keltic and C-Force Trucking. That is to say, on Mr.

Ogilvie’s evidence, and contrary to the terms of the agreement, Pasco was not ultimately responsible to pay for these services, Nu Natural was. [ 150 ] Mr.

Ogilvie testified specifically that the funds advanced by Pasco for the trucking and offloading on Nu Natural’s behalf would be adjusted in the fish price: “we would work it out of the cost of the fish.” As discussed below, there was, in fact, no invoicing by Nu Natural and no evidence of reconciling. [ 151 ] The prices set in the contract are firm from July 27 to August 5, 2011, a time frame which pre-dates the contract execution date of July 30 by three days and provides for sale at dockside which occurs a day after the end date of the pricing (August 5) on August 6. As well, as mentioned above, Mr.

Ogilvie averred that Mr. Theologus did not approach him about the fishing until early August 2011.

[ 152 ] Jason Ogilvie testified that Pasco had a full accounting system. [ 153 ] In his affidavit, sworn in 2017, at para. 28, Mr. Ogilvie avers: [28] . . . Pasco Seafoods had paid an agent or the agent’s corporation the fair market value of the fish and Pasco Seafoods lost the purchase price and the profits. [ 154 ] At trial, he testified that Pasco paid fair market value for the fish at a price of $2.10 to $2.15 per pound of round salmon. There were 140,000 pounds of salmon.

That works out to over a quarter of a million dollars. [ 155 ] When asked in cross-examination where the Nu Natural invoice was in relation to the sale of over one hundred thousand pounds of salmon, with a value exceeding $200,000, Mr. Ogilvie testified as follows: Q: Yeah. Where is the Nu Natural invoice for this fish? A: Yeah. So the entire time I was dealing with Stan, that I can remember -- Q: Yeah? A: -- I never had an invoice from him for anything. We had delivery slips. Q: Mm-hm? A: Sometimes there was a -- a price or, you know, there would be a weight or a price -- Q: Mm-hm.

A: -- but, you know, a lot of kind of salmon buyers are not as really professional as we are, because -- well, for numerous reasons. But one of those reasons is it's only usually a one -- one-month-long season or -- you know, depending on the season, so -- Q: Mm-hm? A: -- a lot of buyers don't spend a ton of money on counting systems and, you know, they -- they're more like old school, you know? Q: Yeah. [Transcript: August 16, 2017, p. 57, l. 21 to p. 58, l. 17] [ 156 ] This evidence is difficult to reconcile, given Mr.

Theologus’ testimony that a benefit of Nu Natural’s role in the fish brokering was that Nu Natural would do the records and books. [ 157 ] As noted above, Pasco was a sophisticated, multi-million dollar, international, experienced fish buyer and seller. It is not believable that it would engage in a legitimate business transaction in relation to hundreds of thousands of dollars without a proper paper trail. I do not believe Mr.

Ogilvie’s testimony in this regard. [ 158 ] The trucking/offloading terms in the Nu Natural/Pasco July 30 purchase agreement do not accord with how payment was actually structured, according to Jason Ogilvie; the July 30 date predates when Mr.

Ogilvie deposed he knew of the fish deal; the firm dates for pricing are both before the agreement date and before the fishing in this case ended; there is no invoice from Nu Natural to Pasco, notwithstanding the size of the sale; two witnesses who testified to the authenticity of the agreement (Ogilvie and Theologus) were inconsistent in their versions of how the contract was executed. There are no reconciliation documents, notwithstanding Mr. Ogilvie’s testimony that there would be price adjustments in relation to Pasco’s fronting Nu Natural the money for the offload and trucking. (

b) Nu Natural’s complete absence from the transaction [ 159 ] As noted above, Ms. Whitmore’s evidence proves that Ms. Begin was not at the Port Hardy offload site of the fish. Ms. Rose testified that the only person she saw on the dock at the offload was one man from the Shani Lynne . Given Mr. Theologus’ testimony that he was not at the offload site, that man was not him, Nu Natural’s purported representative. I find as a fact that there was no Nu Natural representative at the fish offload at Keltic. I note that Mr.

Sparrow testified that he attended at the Keltic office. [ 160 ] As discussed above, Pasco (not Nu Natural) had Keltic reporting on the fish. [ 161 ] It was Pasco’s Dave Sugden (not a Nu Natural representative) who called Ms. Whitmore on August 4, 2011, inquiring about Keltic’s capacity to process 100,000-plus fish in the next short while. [ 162 ] Pasco’s Jason Ogilvie, not Nu Natural’s Helen Begin or Stan Theologus, decided where the fish would be offloaded.

At Ogilvie’s direction, Pasco’s Dave Sugden instructs Keltic how the fish will be shipped. [ 163 ] In a Pasco email written on August 8, 2011, the subject line written is: Our seiner caught more than the entire gillnet fleet [Emphasis added] (

c) Nu Natural’s name on the transport documents (not Pasco’s) [ 164 ] On August 6, 2011, Pasco’s David Sugden emailed Ms. Whitmore specific instructions to keep Pasco’s name off the offload and

transport documents, with an explanation for that direction: Hi Christy, Thank you for unloading this boat on such short notice. We are expecting there to be approximately 150,000 lbs on the vessel which will take up 4 trucks. Please specify all fish is unloaded as “Hupacasath - Nu Natural” - not Pasco. The fisherman is selling the fish to Nu Natural and does not want Pasco on any of the paperwork (offload tally, BOL, tote tags). Pasco guarantees payment for the offloading (and trucking) of this vessel.

Will you please include the following information on each BOL: Consignee: Hupacseth - Nu Natural (Address (not name) of destination) Weight and piece count per species Boat name Trailer license plate # Destination 1 - 2460 Viscount Way, Richmond, BC All pinks pus whatever sockeye can fit to fill the truck Destination 2 - 120 - 12160 Horseshoe Way, Richmond, BC [which is Pasco’s address] Everything else. Let me know if you have any questions. Thank you. [ 165 ] At trial, Mr. Sugden testified that Jason Ogilvie had directed him to arrange things this way. [ 166 ] Ms.

Whitmore testified that it was not, in her experience, unusual to have the name of entities on the offload or trucking documents other than that which paid for the services. [ 167 ] C-Force Trucking’s Dan Rose testified to the contrary. He examined the bills of lading and said that the only difference (from other bills of lading), in his view, was that there was no plant name, but, rather, just an address. He testified to the effect that, usually, there is a plant name designation, not an address unless the driver requests it.

He testified that, normally, the bills of lading would say “Pasco” or whatever company plant name the trucks were going to. [ 168 ] Mr. Ogilvie testified that he believed that Mr. Theologus did not want his fisher (Mr. Sparrow) to know where the fish were going, that it was Stan who had required this labelling set out in Sugden’s direction to Keltic - without Pasco’s name as the consignee - to make the deal work. [ 169 ] Mr.

Theologus testified that Nu Natural is identified as the shipper on the bills of lading because Helen Begin made the deal to buy the fish from Hupacasath; that Pasco’s name was not on the documentation because Pasco does not get the fish until it gets to the plant and he is not up there in Port Hardy to get the fish; that Nu Natural is the owner of the fish as it is being trucked, because it is going from Hupacasath to Nu Natural, trucked to Pasco and then it becomes Pasco’s product. [ 170 ] Mr. Ogilvie and Mr.

Theologus’ testimony on this point does not reconcile. [ 171 ] The obvious outcome of Keltic’s following Pasco’s labelling instructions was that Pasco’s name did not appear on the offload tallies, bills of lading or tote tags; rather, Nu Natural’s name appeared, along with a First Nation name, Hupacasath. [ 172 ] These were the documents that travelled with the fish in the four trucks down Vancouver Island from the Johnstone Strait area during a closed time, to Richmond.

While the fish were Pasco’s fish and were heading to Pasco’s facility and designate, if the trucks were intercepted by DFO, nothing on the documents would indicate that Pasco had any connection to the fish, by the names on the documents. [ 173 ] I note Dan Rose’s testimony that he had been inspected transporting fish.

Conclusion re: Issue 1(c) [ 174 ] Pasco has failed to establish that it exercised due diligence in ensuring that the fish were lawfully caught by purchasing them from Nu Natural. [ 175 ] As discussed above, I find as a fact that the purported contract between Pasco and Nu Natural for Pasco to purchase the fish caught by Ron Sparrow, on August 5 and 6, 2011, was a sham. [ 176 ] I find as a fact that Nu Natural had no role in Pasco’s buying the fish in early August 2011. Like the Landing Slips, this purchase agreement is an effort to authenticate actions taken by Pasco that were unlawful.

The artificial insertion of Nu Natural into the arrangement created a buffer between Pasco and Sparrow that Pasco could point to.

[ 177 ] It also provided a means by which Pasco could keep its name off transport documentation that it knew would accompany the fish down the Island from Port Hardy to Richmond. [ 178 ] Jason Ogilvie testified that he conducted his business from Pasco’s Richmond office while others were in the field. This testimony is not refuted by other evidence. I am satisfied that Pasco bought and purchased the fish in Richmond. I note that Stan Theologus, Steven Tatoosh and Jason Ogilvie were all in Richmond on August 8, 2011.

None was ever in Port Hardy at the relevant times. [ 179 ] This deals with my concerns about situs , which arose upon my initial review of documents, some of which I have now concluded are fraudulent, having reviewed all of the evidence carefully, particularly the Nu Natural agreement. [ 180 ] Where Admission No. 3 conflicts with the trial evidence, I prefer the evidence at trial; specifically, while Pasco purchased the salmon caught by Ronald Sparrow through Stan Theologus, it did not purchase it from Nu Natural.

ISSUE 2 Has Pasco established that it reasonably and honestly believed - albeit mistakenly - that the fish were lawfully caught as a result of the First Nations Landing Slips that accompanied them? [ 181 ] Pasco urges a finding that it reasonably and honestly believed that the nearly 30,000 fish that Pasco procured in early August 2011 were legally caught because of the existence of the four First Nations Landing Slips. [ 182 ] The defendant points to a number of facts which it says support the conclusion that it believed that the fishing was lawful, including that: (

i) the fish were unloaded at a government-approved facility, openly, and in broad daylight, without raising any suspicion amongst the offloaders; (ii) the fish were transported by a legitimate trucking company; (iii) Pasco presented legitimate documents such as bills of lading, dock tallies, purported landing slips, and the Hupacasath permits; (iv) utilization of ThisFish website. [ 183 ] I will spend the most time on the first point raised, as it is highly significant in an assessment of Pasco’s actions. [ 184 ] Having considered all of the evidence, I have concluded that Pasco’s actions were akin to hiding something in plain sight.

At the first offload site in Port Hardy, Pasco characterized the fish as Food Fish; simultaneously, to the trucking company and to its customers, Pasco represented the same fish - not as Food Fish, which cannot be sold, but, rather, as “test fish”, which can be sold; to the DFO and to the court, Pasco represented (its belief that) the fish was from a First Nations Economic Fishery. It is none of these. It is not Food Fish, it is not test fish, and it is not First Nations Economic Opportunity fish; it is illegally caught fish, caught in a closed area without a DFO licence.

This shifting characterization of the fish, depending on the context and audience, reveals Pasco’s sophistication and understanding of the regulatory scheme and belies diligence or negligence - it reveals a design to get these fish before the first commercial opening. (a) “Food Fish” at Keltic [ 185 ] Christy Whitmore testified that she dealt with Dave Sugden many times prior to August 2011, in her capacity as an employee at Keltic involved in offloading fish. She knew him to be responsible for setting up the logistics involved in landing fish boats and organizing the trucks of fish to Pasco. [ 186 ] Ms.

Whitmore testified that on August 4, 2011, Dave Sugden called her at Keltic and said that, “he was looking to have one of his boats offload fish and could we do it”. She said that his times and dates were sketchy; she thinks that he got back to her the next day, which is to say, August 5. When he did, he told her that the offload would be approximately 150,000 pounds of salmon, coming off the vessel the Shani Lynne No. 2 . [ 187 ] She testified that she asked Dave Sugden if it was Food Fish, because Food Fish needs to be counted; she testified that he said that it was.

She explained in cross-examination that when Keltic does a piece count, they charge extra for the count. She testified that they also did a weight count of the fish, not because Pasco required it but for the trucks. She testified that the piece count was for the First Nations, in relation to the Food Fish. [ 188 ] She testified that Keltic offloaded test fish, Food Fish, and commercially caught fish. She testified that she knew that Area 12 was closed to commercial fishing. Ms.

Whitmore testified that no fishing boat had offloaded First Nations Economic Opportunity fish at Keltic. [ 189 ] Ellen Rose was the operations manager at Keltic, beginning in late 2010. She had worked for Keltic for about 16 years. She described Keltic as a custom (fish) offloader in Port Hardy. She was Christy Whitmore’s boss in 2011. [ 190 ] Like Ms. Whitmore, I found Ms. Rose to be a careful witness, disinterested in the outcome of this litigation, with obvious familiarity with the fishing industry based on many years of experience.

She testified that there was no commercial opening in the area at the time of the Shani Lynne offload and that there had never been an economic opening in the area for First Nations to catch and sell fish, to her knowledge. [ 191 ] She spoke to Dave Sugden about the offload on August 6.

When he said 100,000 pounds, she assumed it was Food Fish. [ 192 ] Given that there was no commercial opening in the area; that the Shani Lynne No. 2 was not a test vessel in the area and that there had never been a First Nations Economic Opportunity fishery in Area 12, only one lawful, plausible type of fish remained, given where the offloading was occurring. Ms. Rose had dealt with Pasco many times. [ 193 ] Apart from commercial fish and test fish, the only other fish offloaded at Keltic in the normal course was First Nations Food Fish. Ms.

Whitmore testified that DFO openings do not apply to such fish; the arrangements are made between the band and DFO, so

her not seeing a DFO opening notice for Pasco’s fish would not trigger questions from her. [ 194 ] Gordon Wasden, the skipper of the test vessel Odysseus testified that he was test fishing in the Johnstone Strait on August 5, 2011. He knew Ron (or “Bud”) Sparrow and knew his seiner, the Shani Lynne No. 2 . He described the vessel as a big boat. He saw the vessel by Robson Bight. He knew that Sparrow was a member of the Musqueum Band and described him as a “highliner,” which he explained meant an excellent fisher. [ 195 ] Mr.

Wasden testified that the Shani Lynne was low in the water when he saw the vessel; this indicated to him that it had been fishing and was weighed down by its catch. He and Bud Sparrow spoke a bit, but Mr. Wasden did not ask what type of fishing Mr. Sparrow was engaged in. [ 196 ] Mr. Wasden testified that knew that, at the time, Area 12 was closed to commercial fishing and knew of no such fishery as an Economic Fishery ever taking place there. He testified that he assumed that Sparrow - a First Nations fisher - was probably doing a food fishery for someone. [ 197 ] Mr.

Wasden’s vessel was one of two test vessels in the area; the Shani Lynne was not a test vessel. [ 198 ] To recap, three people integrally familiar with the fishing in Area 12: (

i) knew that it was closed; (ii) had never heard of First Nations Economic Opportunity fishing in the area; (iii) knew Sparrow was not test fishing; and (iv) believed or assumed that the fish he caught were Food Fish. [ 199 ] This was not Food Fish. [ 200 ] While Pasco suggested that Mr. Sugden did not tell Ms. Whitmore that the fish were Food Fish, I find as a fact that David Sugden did tell Ms. Whitmore that the fish being offloaded from the Shani Lynne was Food Fish. Ms.

Whitmore was not shaken in cross-examination on the point, she had reason to recall it because Food Fish requires counting and she, in fact, counted the fish, incurring additional expense to Pasco. The significance of this mis-description by Mr. Sugden to this experienced fish handler, at the site of the fishing, is high. In the context of this highly regulated field, and given that it could not be commercially caught fish due to the closure and was not test fish, what else could it be? [ 201 ] Tellingly, he did not tell Ms.

Whitmore that the fish was caught in a First Nations Economic Fishery, which is what Pasco is now saying. [ 202 ] While Ms. Whitmore testified that nothing in the events of August 4 to 7, 2011 raised her suspicions, at that time, she thought that she was unloading Food Fish.

Food Fish fit within the factual context of which she was aware. [ 203 ] Pasco’s point that its use of Keltic shows that the defendant was not trying to hide anything loses its force, given that Pasco misrepresented the fish as something that, in the context, would have been viewed by Keltic to be lawful. [ 204 ] Pasco’s characterization of the fish as Food Fish, in the context, demonstrates a sophisticated understanding of the state of regulation attached to the activity they were engaging in. [ 205 ] I will continue to discuss this changing characterization of the fish by Pasco, as it is highly relevant to an assessment of whether Pasco had a reasonable and honest belief that the fish were lawfully caught. (b) “Test fish” [ 206 ] While characterizing the fish as Food Fish to Keltic, at the offload site, Pasco was characterizing it as “test” fish to the trucking company it sought to use to transport the fish and to Pasco’s prospective fish customers. [ 207 ] Dan Rose testified that Dave Sugden phoned him on August 5, 2011 about moving test fish from Port Hardy.

He had done lots of work trucking for Pasco and Dave was his usual contact. Mr. Sugden needed four trucks. According to Mr. Rose, it was not uncommon to haul test fish. He testified that Pasco booked the hauling and paid for it. [ 208 ] Mr. Rose was unshaken in cross-examination that Dave Sugden told him it was test fish. He explained that he was just a trucker and did not know which boats were the test fish boats in Johnstone Strait, just that only bills of ladings needed to go with the fish.

The bills of lading are prepared by Keltic. [ 209 ] The bills of lading prepared in relation to the transport of the fish which Mr. Rose identified are consistent with his testimony. Mr. Rose testified in cross-examination that C-Force had a policy not to haul Food Fish although also testified that he had done at least one such haul to French Creek in the past. Mr. Rose had no interest in the outcome of the case. He clearly recalled that he was told “test fish” by Pasco. [ 210 ] Pasco was also describing this fish as “test fish” in its sales offerings.

As mentioned above, at 11:01 a.m. on August 6, Casey Sugden emailed his customer: Hi Dan, We finally have our test seine sockeye out of the water . . . [Emphasis added] [ 211 ] On August 7, 2011, Vice President of sales, Roger Banting, authored an email to Sobeys, offering them an opportunity to buy the fish. Jason Ogilvie is copied on the email. Mr. Banting wrote: These fish were caught by our contracted seiner who had permission to fish during the DFO test fishery phase. This test phase occurs prior to the industry getting access to the fish!

Therefore, we are first to get access to Johnstone Straits Sockeye headed for the Fraser

River.

And legally these are Ocean Caught Fraser River Strain. [Emphasis added] [ 212 ] This note evidences Pasco’s awareness that the legality of the fish was of importance in the field of commerce in which they were engaged. [ 213 ] DFO Officer Sumi testified that when she attended Pasco on August 8 to conduct an inspection, plant manager Sal De Vico told her they were test fish. [ 214 ] Just as the fish could not be called “Test Fish” or “First Nations Economic Opportunity” fish in Port Hardy (to Keltic employees) without foreseeably raising questions, given the context, the fish could not be called “Food Fish” in Pasco’s offers of sale because selling and buying Food Fish is illegal: this fish had to be called something else. (

c) First Nations Economic Opportunity Fishery [ 215 ] On August 8, 2011, Jason Ogilvie told Officer Sumi that they got the slips and he believed that everything was alright, or words to that effect. This was Pasco’s first assertion that the fish were lawfully caught in a First Nations Economic Opportunity. [ 216 ] On August 12, 2011, when Jason Ogilvie swore his first affidavit in relation to litigation arising from the fishing, Pasco characterized the fish as the product of “First Nation Economic Opportunity Fishing”, lawfully purchased from the First Nations.

At para. 10 he avers: [10] When I purchased and processed the fish I believed that the fish had been lawfully caught pursuant to a licence issued to the aboriginal fisherman and that I was entitled to purchase the fish and process them for sale to third parties. [ 217 ] This affidavit was sworn in support of Pasco’s seeking injunctive relief to prevent DFO from contacting its customers in its investigation into these matters. [ 218 ] The context of this characterization of the fish is litigation with the Federal Crown, who could easily refute Pasco’s description of the fish as Food Fish (so described to Keltic) or as test fish (so described to customers). [ 219 ] Attached to Mr.

Ogilvie’s 2011 affidavit as an exhibit is a copy of an agreement between the Hupacasath First Nation of Port Alberni/Area 23 and the Department of Justice, dated July 28, 2011. Mr. Ogilvie sets out his

interpretation of the agreement for a number of paragraphs in his affidavit, in support of his assertion that he thought the fishing that occurred in Area 12 was authorized by the agreement. [ 220 ] This asserted

interpretation of the agreement is hard to believe: Mr. Ogilvie was the president of a multi-million dollar buying and selling fish business; he has spent years in the fish industry; his business is sophisticated, with an international element; he can, obviously, read. [ 221 ] The Hupacasath agreement has nothing to do with the fish anywhere but in Area 23 and it is clear on its face that this is so: it is called “TSU-MA-USS FISHERY AGREEMENT” in bold at the top of the first page and the area subject of the agreement is set out at para. 2 of the

preamble: AND WHEREAS the Parties are interested in the conservation, protection and management of th

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