ANDREW KENT v. LINFIELD INVESTMENTS INC., 2022 SKKB 208

KING’S BENCH FOR SASKATCHEWAN Citation: 2022 SKKB 208 Date: 2022 09 19 Docket: CRM-SA-00231-2021 Judicial Centre: Saskatoon BETWEEN: ANDREW KENT and LINFIELD INVESTMENTS INC. APPELLANTS - and - HIS MAJESTY THE KING (City of Saskatoon) RESPONDENT Counsel: Jay D. Watson for the appellants Brandon P.M. Friesen for the respondent ___________________________________________________________________________ JUDGMENT CLACKSON J. September 19, 2022 ___________________________________________________________________________ I. Overview [ 1 ] Linfield Investments Inc. [Linfield] is a real estate investment company.

Andrew Kent [Mr. Kent] and Christopher Kent are the directors of Linfield and each own 50 percent of its voting shares. [ 2 ] On April 1, 2017 Linfield leased commercial premises to Best Buds Society Inc. [BBS]. The lease was signed by Andrew Kent as director of Linfield. The parties to the lease agreed that the premises would be used by BBS only “for the purposes of medical marijuana dispensary and related accessories”. During BBS’s occupation of the premises the City of Saskatoon [City] concluded that BBS was selling marijuana from the premises, which was not permitted under the terms of BBS’s business license.

In July of 2018 BBS sought to renew its business license but its application was not approved by the City. On September 30, 2018, BBS surrendered the lease to Linfield. [ 3 ] On February 12, 2019 Mr. Kent and Linfield were each charged with carrying on business in the leased premises between April 1, 2017 and September 30, 2018 without a license, contrary to the Business License Bylaw, 2002 (since rep) [ Bylaw ]. [ 4 ] After a trial of the charges the appellants were convicted under s. 21(1) (

b) of the Criminal Code , RSC 1985, c C-46 , of being parties to the offence of operating an unlicensed business, that is a marijuana dispensary, between December 20, 2017 and July 31, 2018.

[5] The appellants now appeal that conviction upon the basis that the verdict was unreasonable, there being noevidence that either appellant knew of BBS’s intention to sell marijuana without a license or intended to aid BBS in that offence. Aswell, Mr. Kent asserts that the verdict against him was also unreasonable on the basis that there was no evidence supporting theconclusion that he was personally responsible for the actions of Linfield. As to this latter ground of appeal, counsel for Mr. Kentconceded in argument that if Linfield was guilty of a breach of the Bylaw, then Mr.

Kent was also guilty of that offence by operation of s.338(4) of The Cities Act, SS 2002, c C-11.1. [6] In my respectful view, the trial judge erred in law in concluding that proof only that the appellants knew orwere wilfully blind to BBS’s intention to commit the underlying offence was sufficient to establish the mens rea requirement of theoffence under s. 21(1)(b). The conviction of the appellants must therefore be set aside. I also conclude that a retrial of the matter isunnecessary and after consideration of the evidence adduced at trial, find that Linfield and Mr.

Kent are not guilty of the charges allegedin Informations 109602 and 109601. These are my reasons. II. ISSUES [7] Did the trial judge err in finding that proof only that the appellants knew or were wilfully blind to BBS’sintention to commit the underlying offence was sufficient to establish the mens rea requirement of the offence under s. 21(1)(

b) of theCriminal Code?

a) If yes, is it appropriate for this Court to convict or acquit Linfield on the strength of the evidence adduced at trial? (

i) If yes, has the prosecution proved the mens rea requirement of s. 21(1)(

b) with respect to either appellant beyond a reasonabledoubt? III. STANDARD OF REVIEW [8] Appeals of

summary conviction matters are governed by

Part XXVII of the Criminal Code. Section 812(1)(d)of the Criminal Code directs that

summary conviction appeals in Saskatchewan are to be heard by the Court of King’s Bench. Section813(

a) provides that a defendant may appeal from conviction, sentence or both. [9] Conviction appeals are governed by ss. 686(1) and (2) of the Criminal Code. Pursuant to these sections anappellate court may allow the defendant’s appeal where the verdict is unreasonable or cannot be supported on the evidence, the decisionof the trial judge is wrong on a question of law, or there was a miscarriage of justice.

Pursuant to s. 686(2), if the appeal is allowed theappellate court is empowered to quash the conviction and acquit the accused or order a new trial. [10] When an appeal is taken on factual grounds, the standard of review for the appellate court is whether there wasevidence before the trier of fact upon which he or she, properly instructed, could reasonably reach the verdict. See R v Bigsky, 2006SKCA 145 at para 74, [2007] 4 WWR 99; R v Biniaris, 2000 SCC 15, [2000] 1 SCR 381; and R v Yebes, (SCC), [1987]2 SCR 168.

While the appellate court is entitled to review, re-examine and reweigh the evidence it may do so only for the purpose ofdetermining whether the evidence was reasonably capable of supporting the trial judge’s conclusion. The appellate court may notoverturn the verdict simply because it takes a different view of the evidence than the trial judge. [11] On questions of law the standard of review is correctness. Thus, the appellate court should intervene where thedecision is not correct in law, unless no substantial wrong or miscarriage of justice has occurred despite the error.

See R v Shepherd, 2007SKCA 29, [2007] 4 WWR 659. IV. ANALYSIS [12] Whether the trial judge correctly identified the components of the mens rea requirement in s. 21(1)(

b) of theCriminal Code is a question of law. The standard of review is therefore correctness. [13] At trial the prosecution acknowledged there was no evidence that either appellant sold marijuana from thecommercial premises leased to BBS. Consequently, the case against the appellants was prosecuted on the basis that they were parties tothe offence as expressed in s. 21(1)(

b) of the Criminal Code. Section 21(1)(

b) provides that every person is a party to an offence who, byact or omission, does anything for the purpose of aiding any person to commit the offence. [14] In argument before the trial judge the prosecution submitted that the Bylaw is regulatory in nature and thereforeis presumed to impose strict liability for violation of its provisions.

On the authority of the decision in Halton Region ConservationAuthority v Ahmad, 2016 ONCJ 380 [Halton], the prosecution argued that to affix liability upon Linfield as a party to BBS’s offence itneed only prove beyond a reasonable doubt that Linfield permitted BBS to occupy the commercial space thereby aiding BBS’s violationof the Bylaw. The prosecution submitted that it need not also prove that Linfield intended to aid BBS in violating the Bylaw, which is acomponent of the mens rea requirement in s. 21(1)(b).

The prosecution argued alternatively that if it bore the burden of proving thatLinfield intended to aid BBS, then proof beyond a reasonable doubt that Linfield knew, or was wilfully blind to BBS’s intention tocommit the offence was sufficient to satisfy the mens rea requirement in s. 21(1)(b). [15] At trial Linfield argued that the prosecution must prove both the act of aiding BBS and the intent to aid BBS incommitting the offence. In argument on this appeal, the appellants conceded that permitting BBS to occupy the premises aided BBS inselling marijuana without a license.

Consequently, Linfield concedes the actus reus requirement of s. 21(1)(b). [16] The trial judge concluded that as the underlying offence is one of strict liability, the mens rea requirement of s.21(1)(

b) is satisfied by proof beyond a reasonable doubt that Linfield knew, or was wilfully blind to, BBS’s intention to commit theoffence. The prosecution need not also prove that Linfield intended to aid BBS in committing the offence. At page T92 of the transcriptthe trial judge expressed his conclusion thus:

THE COURT: … To require more than knowledge or willful blindness, in my opinion, would in effect elevate the underlying offence to somethingmore than a strict liability offence.

Thus in my opinion, the most that would be required is that the Crown prove knowledge or willfulblindness to fulfill its obligation to show intent on the facts of this case. (Transcript of Trial, Provincial Court, Saskatoon, December 10, 2020, Volume 1) [17] After having considered the decision in Halton and in Québec (Autorité des marchés financiers) c Souveraine,cie d'assurance Générale 2013 SCC 63, [2013] 3 SCR 756 [Souveraine], a decision upon which the judge in Halton relied to reach asimilar conclusion to that of the trial judge in this case, I conclude that the trial judge is in error. [18] In Souveraine the accused was charged with being a party to an offence under the provisions of a Quebec statuteconcerning the regulation of the insurance industry in the province.

The specific provision under which the accused was charged as aparty to the offence provided as follows: 482. Every insurer that helps or, by encouragement, advice or consent or by an authorization or order, induces a firm or an independentrepresentative or independent partnership through which it offers insurance products or an executive officer, director, partner, employeeor representative of such a firm or independent partnership to contravene any provision of this Act or the regulations is guilty of anoffence.

The same applies to any director, executive officer, employee or mandatary of an insurer. [19] The Court first noted that, given the nature and purpose of the statute in which it appears, the offence in s. 482 isa regulatory offence and therefore one of strict liability: proof of mens rea is not required. (Souveraine, para 33). [20] The appellant in Souveraine argued that the common law requires proof of mens rea even where the principaloffence is one of strict liability. As authority for this proposition the appellant relied on the decisions in Regina v F.W.

Woolworth Co.Ltd. (1974), (ON CA), 3 OR (2d) 629 (CA) [Woolworth] and R v Briscoe, 2010 SCC 13, [2010] 1 SCR 411 [Briscoe].Both of those cases considered party liability under the provisions of s. 21(1)(

b) and concluded that the mens rea requirement of thatsection could only be satisfied by proof the accused knew, or was wilfully blind, the perpetrator’s intent to commit the underlyingoffence and did something with the intent of aiding the perpetrator to commit the offence. [21] In rejecting the appellant’s proposition, the Court in Souveraine determined that where party liability arisesunder a specific provision in a regulatory statute then the party liability offence is presumptively one of strict liability and proof of mensrea is not required. But, if party liability arises under s. 21(1)(

b) of the Criminal Code then proof of mens rea as set out in Woolworthand Briscoe is still required even if the principal offence is one of strict liability. Thus: 38 With respect, I find that Woolworth and Briscoe do not support the proposition that proof of mens rea is required in every caseof secondary penal liability. It is true that the reasoning set out in Woolworth and Briscoe applies where the secondary penal liabilityprovided for in s. 21 of the Criminal Code is at issue.

However, for the following reasons, I find that that reasoning does not apply in theinstant case. 39 First of all, there is a significant difference between the wording used for the independent offence provided for in s. 482 of theADFPS and the wording of s. 21(1)(

b) of the Criminal Code, which defines the concept of being a "party to an offence". Whereas theformer provides that "[e]very insurer that helps or ... induces a firm ... to contravene any provision of this Act ... is guilty of an offence",the latter provides that "[e]very one is a party to an offence who ... does or omits to do anything for the purpose of aiding any person tocommit it". 40 This difference in wording is determinative. As this Court has pointed out, the expression "for the purpose of" is synonymouswith intention, which is why intention and knowledge on the accomplice's part must be established in order to convict him or her unders. 21(1)(

b) of the Criminal Code (R. v. Hibbert, (SCC), [1995] 2 S.C.R. 973 (S.C.C.)). … 43 In addition to the distinction based on the mens rea requirement that flows from the use of the expression "for the purpose of" ins. 21(1)(

b) of the Criminal Code and the absence of that expression from s. 482 of the ADFPS, another more general distinctionpersuades me that s. 482 of the ADFPS is not subject to the common law rule that proof of mens rea continues to be required for a partyliability offence even when the principal offence is one of strict liability. [22] At the conclusion of his reasons on this issue Wagner J. stated: 48 Before concluding on this issue, I will add a few observations about the comment made by the Ontario Court of Appeal inWoolworth that a person does not incur liability by loaning or renting a car for some legitimate activity merely because the person towhom it is loaned or rented chooses to use it to transport stolen goods, or by renting a house for residential purposes to a tenant whosurreptitiously uses it to store drugs. 49 I agree with that comment in the criminal context and am of the opinion that s. 21(1)(

b) of the Criminal Code addresses theseconcerns by requiring proof of mens rea. However, I consider the situation to be quite different in the context of regulatory offences.Those who engage in regulated activities agree in advance to adhere to strict standards, and they accept that they will be rigorously heldto those standards, which are typical of such spheres of activity. It is therefore not surprising in the regulatory context to find strictliability offences that encompass forms of secondary penal liability for the ultimate purpose of vigilantly ensuring compliance with aregulatory framework established to protect the general public.

[23] It is these two paragraphs upon which Dechert J.P. relies in Halton to conclude that the Supreme Court ofCanada was heralding “a shift in judicial philosophy relative to the standard of proof necessary to prove charges pertaining to violationsof public welfare offences, whether or not such charges relate to principal violators or to persons accused of aiding principal violators.”(Halton, para 47) With respect, I disagree. [24] In Souveraine Wagner J., writing for the majority, meticulously and methodically reasoned his way to theconclusion that mens rea continues to be a requirement of party liability under s. 21(1)(

b) of the Criminal Code even if the principaloffence is one of strict liability under a regulatory statute. Having done so it would be extraordinary to set that reasoning aside and herald“a shift in judicial philosophy” by way of a statement made in obiter without analysis.

Had that been the Court’s intention one wouldexpect the analysis leading to that conclusion to have been the substance of the Court’s analysis on the issue before it rather than anafterthought. [25] In my respectful view, in paras. 48 and 49 Wagner J. is simply expressing a further justification for excluding amens rea requirement from party liability for strict liability offences where the wording of the party liability provision in the regulatorystatute does not require proof that the act or omission was “for the purpose of” aiding the person to commit the offence.

The analysis thatpreceded this justification clearly explains that where party liability arises under s. 21(1)(

b) of the Criminal Code, the prosecution isobliged to prove the mens rea requirement of s.21(1)(

b) even if the underlying offence attracts strict liability. [26] The mens rea requirement of s. 21(1)(

b) has two components: intent and knowledge.

Expressing the mens rearequirement in the context of this case, the prosecution must not only prove that Linfield knew BBS intended to sell marijuana without alicense but also that Linfield allowed BBS to occupy the premises with the intention of assisting BBS in committing that offence. [27] The prosecution may satisfy the knowledge component by proving that Linfield had actual knowledge ofBBS’s intent to sell marijuana without a license or by proving that Linfield’s suspicion was aroused to the point where it saw the need tomake further inquiries but deliberately chose not to do so.

If the latter circumstance is proved Linfield will be found to have wilfullyblinded itself so as not to acquire guilty knowledge. That is, Linfield deliberately chose to remain ignorant. "[a] finding of wilfulblindness involves an affirmative answer to the question: Did the accused shut his eyes because he knew or strongly suspected thatlooking would fix him with knowledge?" See R v Jorgensen, (SCC), [1995] 4 SCR 55 at para 103. [28] In applying these principles, the Court must be careful not to equate “purpose” as used in s. 21(1)(

b) with“desire”. The prosecution need not prove that Linfield wanted BBS to sell marijuana without a license. Consequently, it is immaterialwhether Linfield rendered the assistance to BBS to satisfy its own desires, such as receiving rents, if it knew or was wilfully blind toBBS’s intention to sell marijuana without a license. See Briscoe at para 16. [29] The trial judge erred in law in finding that to satisfy the mens rea requirement of s. 21(1)(

b) it was sufficient forthe prosecution to prove only that Linfield knew or was wilfully blind to BBS’s intent to sell marijuana without a license. Consequently,Linfield’s conviction cannot stand and must be set aside. Is it appropriate for this Court to convict or acquit on the strength of the evidence adduced at trial? [30] No evidence was called on behalf of the defence at trial. Neither of the prosecution’s witnesses was cross-examined on their evidence and the documentary evidence was tendered into evidence by consent.

While there is disagreement on theinferences to be drawn from the facts adduced by the prosecution there is no controversy on the facts themselves. In these circumstancesthis Court is in as good a position as the trial judge to apply the law and arrive at a verdict. A retrial of the issues is neither desirable nornecessary. Has the prosecution proved the mens rea requirement of s. 21(1)(

b) with respect to either appellant beyond a reasonable doubt? [31] Michele Garcea, employed in the City’s business licensing program, testified that BBS was issued a businesslicense to operate a retail store for “specialty health, nutrition and lifestyle products” but was specifically advised by letter that thebusiness license did not include approval to operate a cannabis dispensary or to sell cannabis products. BBS’s business license wasapproved by the City on June 22, 2017 and remained valid for one year. Mr.

Garcea testified that a request in July of 2018 to renewBBS’s business license for a further year was not approved by the City. This evidence was not challenged by the defence. [32] Irene Thebaud, an inspector with the business license program, also testified. Her testimony established thatBBS was offering cannabis products for sale from the premises it was leasing from Linfield in the period between December 20, 2017and July 31, 2018. Ms.

Thebaud’s evidence was also not challenged by the defence. [33] Taken together this testimony establishes that BBS was offering cannabis products for sale from the premisesBBS leased from Linfield and that such activity was a violation of BBS’s business license. [34] The only evidence tendered by the prosecution regarding the state of the appellants’ knowledge of BBSactivities is a copy of the lease between BBS and Linfield. There is no evidence that Linfield knew the terms and restrictions on BBS’sbusiness license.

Nor is there any direct evidence that Linfield was aware that BBS was selling cannabis products from the leasedpremises in violation of its business license. In these circumstances I agree with the trial judge’s conclusion that there is no directevidence that Linfield had actual knowledge of BBS’s intention to sell medical marijuana without a license at any time before or duringBBS’s occupancy of the leased premises. [35] Without direct evidence on the matter the state of Linfield’s knowledge must be inferred from the surroundingcircumstances.

Circumstantial evidence may provide proof of a matter beyond a reasonable doubt but in assessing that evidence theCourt must consider “whether the circumstantial evidence, viewed logically and in light of human experience, is reasonably capable ofsupporting an inference other than that the accused is guilty." See R v Villaroman 2016 SCC 33 at para 8, [2016] 1 SCR 1000. In thiscase, the prosecution relied on the terms of the lease between BBS and Linfield as circumstantial evidence of Linfield’s knowledge, orwilful blindness, to BBS’s intention to sell medical marijuana without a business license.

[ 36 ] The terms of the lease relevant to this issue are contained in clauses 4.01 and 4.03 as follows: 4.0l Use of Leased Premises The Tenant covenants to use the Leased Premises solely for the purposes of medical marijuana dispensary and related accessories and the Tenant agrees not to use, or permit the Leased Premises or any part thereof, to be used, for any purpose other than those uses described herewithin. … 4.03 Prohibited Uses The Tenant shall not carry on, or permit to be carried on, on the Lands, in the Building or in the Leased Premises any or the following:

a) any activity in contravention of any and all statutes, bylaws, rules, and regulations of any dominion, provincial, municipal, or other competent authority for the time being in force. *Notwithstanding the above, the Landlord hereby acknowledges the Tenant’s use clause and that the legislation associated with such use will follow thereafter ; … [Emphasis in original] [ 37 ] Given the provisions of clause 4.01 of the lease Linfield knew that BBS would be selling medical marijuana from the premises, but that is not the underlying offence to which the appellants are alleged to be parties.

The underlying offence is selling medical marijuana from the premises without a business license. Clause 4.01 does not purport to speak to that state of affairs and thus on its own cannot be regarded as proof beyond a reasonable doubt that Linfield knew, or was wilfully blind to the knowledge, that BBS intended to sell medical marijuana from the premises without a business license. [ 38 ] To affix knowledge of the underlying offence on Linfield the prosecution relies on clause 4.03 of the lease agreement. The defence argues that the first sentence of clause 4.03, subclause

a) clearly demonstrates that Linfield intended and expected that BBS would comply with all applicable laws and bylaws concerning its occupancy of the premises and the business it conducted in the premises.

The prosecution relies on the following wording as circumstantial evidence that Linfield knew BBS would be selling medical marijuana from the premises and that at the time the lease was signed it was illegal to do so: *Notwithstanding the above, the Landlord hereby acknowledges the Tenant’s use clause and that the legislation associated with such use will follow thereafter; [ 39 ] The trial judge was convinced that this sentence could lead to no other rational conclusion but that Linfield knew of BBS’s intention to sell marijuana from the premises and that the sale of medical marijuana was not legal under the laws existing at the time the lease was signed. [ 40 ] The meaning of clause 4.03 is ambiguous.

As an expression of Linfield’s knowledge or intent it leaves significant room for debate. The sentence upon which the prosecution relies may be interpreted in a manner that fixes Linfield with knowledge that the sale of medical marijuana was then illegal and expresses Linfield’s intention to permit BBS to sell medical marijuana notwithstanding the illegality of doing so.

On the other hand, the same sentence may be interpreted to mean that notwithstanding that clause 4.01 permitted BBS to sell medical marijuana from the premises, BBS was not entitled to engage in that use until legislation was passed to permit such activity. In my view, this

interpretation of clause 4.03 is as reasonable as the

interpretation proposed by the prosecution and is more consistent with the other clauses in the lease obligating BBS to comply with existing laws and regulations in other matters. [ 41 ] The circumstantial evidence upon which the prosecution relies to affix knowledge upon Linfield is reasonably capable of supporting an inference other than guilt and consequently does not prove beyond a reasonable doubt that Linfield knew, or was wilfilly blind to, BBS’s intention to sell medical marijuana in contravention of the Bylaw . [ 42 ] The prosecution has therefore failed to prove the knowledge component of the mens rea requirement of s. 21(1) (

b) beyond a reasonable doubt. As the evidence offered by the prosecution is insufficient to establish the knowledge component of the mens rea requirement there is no need to consider whether the prosecution has proved that Linfield intended to aid BBS in committing the offence. V. CONCLUSION [ 43 ] Linfield’s conviction as a party to the offence of BBS is set aside and an acquittal shall be entered. [ 44 ] The prosecution concedes in argument that the basis for Mr. Kent’s liability arises entirely under s. 338(4) of The Cities Act . In effect, if Linfield is guilty as a party to violation of the Bylaw , then Mr.

Kent, as a director of Linfield, is also guilty. The defence agrees with this submission. [ 45 ] There is no evidence establishing Mr. Kent’s liability as a party to BBS’s offence, independent of his involvement as a director of Linfield. As I have found Linfield not guilty of the charge, Mr. Kent must also be found not guilty. Consequently, the conviction against Mr. Kent must also be vacated and an acquittal entered.

J. C.D. CLACKSON