The trials of David Sawatzky, Andrew McMechan, and Bill Cairns are, arguably, the judicial cornerstones of the CWB debate.  An examination of these cases provides a foundation for understanding recent grain-related changes in the legislative and judicial realms.  In this paper, the evaluation of criminal cases will involve three steps.  First, how the cases arose will be described.  Secondly, the major arguments introduced at the trial or appeals case will be evaluated.  Finally, the actual and potential effects of the decision will be discussed.

David Sawatzky admitted to making 860 grain runs to the United States between November 30, 1993 and August 5, 1994 with wheat and barley worth over US $2.2 million.  At no time did he possess a valid Canadian Wheat Board export licence.  Accordingly, he was charged with failing to provide Canada Customs with a licence granted by the CWB for grain exportation under section 95(1) of the Customs Act.

The Crown and the defense argued over two main points.  The first dealt with how the governing legislation and regulations should be interpreted.  Ambiguous wording provided to be a stumbling block; both sides advanced contrasting opinions as to the government's intent in drafting given pieces of legislation.  The second consideration was how different versions of the same legislation should be read.  Inconsistencies between the French and English translations of Customs Act regulations fueled the Crown's claim that, if the interpretation question was unanswerable, then the clearest and most developed version of regulations and legislation - in this case, the French translation - should be used when considering Sawatzky's case.  Sawatzky was acquitted of all charges against him.

Between December 1993 and July 1994, Andrew McMechan and Bill Cairns made 97 shipments of wheat and barley worth over US $300,000 to the United States on behalf of other farmers.  McMechan was subsequently charged with four counts while Cairns was charged with two counts, of failing to provide the Chief Officer of Customs a licence granted by the CWB for grain export under section 95(1) of the Customs Act.

It should be noted that the charges against McMechan and Cairns were identical to those leveled against Sawatzky.  Accordingly the Crown approached the case in a similar manner.  The main difference, however, was that the questioning of differences between the French and English versions did not arise.  Rather, the trial hinged on whether permits were explicitly called for under the governing legislation.  Both McMechan and Cairns were convicted.

On March 3, 1996, McMechan exported 50 bushels of barley to the United States through the customs port at Lyleton, MB.  Upon return to Canada, customs officials seized his tractor pursuant to the provisions of the Customs Act.  McMechan, despite being warned that if he left the port with the tractor he would be charged with theft for not surrendering the vehicle, left the port.  Later the same day, he returned with 1,200 bushels of barley and drive straight though a Customs roadblock.  Following the incident , seven charges -- three under the Customs Act, three under the Criminal Code, and one under the Immigration Act -- were laid against him.

The seven charges prompted three general responses from the defense.  First, the grounds of the seizure were questioned.  It was asserted that, if Customs had decided to seize McMechan's tractor based on the same regulations that had acquitted Sawatzky, then the seizure was invalid.  The second claim, that an individual is only required to present themselves at Customs, but not ensure they are questioned or given proper leave meant that there was no obligation for McMechan to remain at Customs.  Finally, the defense questioned how a seizure should take place.  In this case, they argued that if Customs did not physically takes possession of the seized good, the seizure is void.  The Crown, naturally, took issue with these claims.  They argued that there was no place in law where the defense's assertions were substantiated, and that precedent had been set disproving them in previous trials.  McMechan was initially convicted on all seven charges.  His appeals case overturned one Criminal Code conviction.

The final section of this paper examines the effects of the rulings in each of these three cases.  The Sawatzky trial forced regulatory changes to be made.  Within hours of the ruling, the CWB regulations were amended to explicitly call for producers to obtain export permits and to produce them to Customs officers.  The McMechan and Cairns ruling, despite being condemned as weak, served to reinforce existing legislation and regulations.  The rulings' provisions have, however, fallen into disuse.  Finally, the McMechan decision made following trials easier by providing jurisprudence which had not, until then, existed.

Introduction

In January, 1997, Farmers for Justice members Andrew McMechan and Ken Dillen appeared on the Dave Rutherford Show in Edmonton.  McMechan, having recently been convicted on all charges laid against him stemming from a March, 1996, incident at Lyleton, MB, was unabashed in his condemnation of the Canadian Wheat Board.  Callers were equally extreme, some going so far as to liken the federal government to a dictatorship.  A fascist Nazi would disagree that those are excessive, even mean statements.  These statements, however, closely parallel the 'in-your-face' protest actions taken by CWB opponents.  These actions incite strong feelings on both sides of the issue.  Some attack CWB opponents as a dangerous fringe movement, while others extoll them as crusaders and heroes.  David Sawatzky openly admitted to hundreds of illegal grain runs to the Untied States.  McMechan and Bill Cairns exported grain for their neighbours and friends.  McMechan defied customs officials by sealing a seized tractor and using it to export grain.  Accordingly, their trials spark great controversy.

The trials of Sawatzky, McMechan, and Cairns, are, arguable, the judicial cornerstones of the CWB debate.  The first forced regulatory changes to be made, while the two latter strengthened existing regulations.  Therefore, an examination of these cases provides a foundation for understanding recent grain-related changes in the legislative and judicial realms.  The assessment of these criminal cases will involve three steps.  Firs, how the cases arose will be described.  Secondly, the major arguments introduced at the trial or appeals case will be evaluated.  Finally, the actual and potential effects of the decision will be discussed.

In the aforementioned cases, the three defendants decided to represent themselves with the help of Dan Creighton.  For their appeals cases, Sawatzky and McMechan hired Greg Brodsky and Leonard Tailleur, respectively.  Therefore, any mention of the defense will refer to the arguments present by the defendant, counsel or the presiding judge.^a

Grain Handling

Before proceeding, a brief description of the present grain exportation system is required.  To legally export commodities under CWB control the Canadian Wheat Board Act (CWB Act) requires an export permit to be obtained.  Under the buy-back process after the grain is contracted to the CWB a producer can purchase his grain back at a price equal to the CWB's opportunity cost and apply for an export licence.  Copies of this licence are then forwarded to Canada Customs and are later matched with the exporter's copy to verify that the export has taken place.  As will be shown, Sawatzky, McMechan, and Cairns attempted to circumvent this process and, consequently, were convicted under the governing regulations.

(i.) David Sawatzky

David Sawatzky admitted to making 860 separate grain runs to the United States between November 30, 1993 and August 5, 1994 with approximately 13,000 tonnes of wheat and barley worth over US $2.2 million.  At no time did he possess a valid Canadian Wheat Board export licence.  Much of the grain was infected with fusarium fungus, thus prohibited for export because it exceeded the CWB's prescribed tolerance for human or animal consumption.

Sawatzky was charged with:

Customs Act section 95(1) and Reporting of Exported Goods Regulations [REGR] section 5: two counts of failing to provide the Chief Officer of Customs a licence granted by the CWB for grain export.

The Crown's case -- Sawatzky's actions weighted against the provision of the Customs Act and the REGR -- seemed well founded in law.  There was, however, one problem: do the two Acts explicitly call for export permits to be presented to customs officers?  Although the Crown conceded that there were no clear provisions under the given sections of the two Acts, it was argued that, if the entire body of legislation relating to exportation of grain was considered, there was an implicit requirement for licences.  Consequently, Sawatzky became an exercise in reconciling the REGR, Customs Act, and the CWB Act with each other.  Two arguments were central to this.  The first dealt with how legislation and regulations should be interpreted.  The second consideration was how differing versions of the same legislation should be read.

The first argument hinged on section 5 of the REGR.  It reads:

5. For the purposes of these Regulations, the exporter of the goods shall provide to the chief officer of customs on or before the day of exportation any information and all certificates, licences, permits or other documents relating to the goods required to be provided under the Act or any regulations made pursuant thereto or under any other Act of Parliament or regulations made pursuant thereto that prohibit, control or regulate the exportation of goods.

The sticking point was how "provide" should be interpreted.  The Crown had an interest in keeping the definition wide to ensure that no interpretation was excluded.  If "provide" was seen in a similar sense as "obtain," then Sawatzky's conviction would be assured.  The Crown insisted that any ambiguities resulting from broad interpretations were clarified when the legislation was examined both as a whole and measured against corresponding sections of other Acts.  Since the REGR is subordinate to the Customs Act, it cannot be interpreted on its own.  Citing Justice Weston in Francouer v. Canada (1994) 78 F.T.R. 109 FCTD:

The Customs Agency serves to organize the movement of goods in and out of Canada and supports the administration and enforcement of other other statues that relate to the importation an exportation of goods (emphasis added).¹

In short, the REGR must be read with the Customs Act.

95(1) Subject to paragraph (2)(a), all goods that are exported shall be reported at such time and place in such manner as may be prescribed.

(2) Governor in council may prescribe

(a) The classes of goods that are exempted from the requirements of subsection (1) and the circumstances in which any of those classes of goods are not so exempted; and

(b) the classes of persons who are required to report goods under subsection (1) and the circumstances in which they are so required.

The Crown argued that, in addition to allowing broad interpretations to be made, Parliament's intent in drafting legislation should be examined.  The most effective way to understand the intention of a section is to read it in the context of the entire regulation.  If section 5 of the REGR is unreasonably vague, the other sections should be consulted for clarification.  According to the Crown, "words have meaning because of there context in the statute [... and...] must be read in the context of the statue as a whole."²  Evaluating the meaning of a section outside of the context of an entire regulation risks dividing the regulation against itself.  Moreover, the delicate balance between complimentary pieces of legislation may be skewed by misinterpretation.

By advancing this argument, the Crown hoped to introduce section 3 of the REGR into the trial.  It reads:

3. Except as otherwise provided in these Regulations, all goods that are exported shall, prior to their exportation, be reported under section 95 of the [Customs] Act in writing by the exporter, the agent of the exporter or the person transporting the goods.

The provisions of section 3 place on the exporter the duty to report goods in writing prior to export.  The difference between section 5 and section 3, therefore, is that in the former "provide" places no obligation on the exporter to obtain a permit , while in the latter "report in writing" demands an exporter both obtain and show a permit.  In short, the difference is the legal interpretation of the wording.

A second, equally compelling, argument was made by comparing the English and French translations of legislation.  The Crown asserted, since the French and English version of section 5 of the REGR were different, the stronger of the two should be used in rendering judgment.  The French version, which reads, "[any certificates, licences, or documentation] which are required pursuant to the Act or any other federal statute [shall be presented to Canada Customs]'" instead of the English "shall provide to," eliminated the need to define "provide." Furthermore, the French version provided an indisputable link to other legislation -- including the CWB Act.  If properly drawn the link to the CWB Act clarified any deficiencies in the REGR and Customs Act.  Sections 45 and 46 of the CWB Act are central in this claim:

45. Except as permitted under the regulations, no person other than the Board shall
(a) export from Canada wheat or wheat products owned by a person other than the board;
(c) sell or agree to sell wheat or wheat products situated in one province for delivery in another province or outside Canada

46. The Governor in council may make regulations
(c) to provide for the granting of licences for the export from Canada, or for the sale or purchase or delivery outside Canada, of wheat or wheat products, which export, sale or purchase is otherwise prohibited under this part

The Crown's argument was based on interpretation; to make an informed ruling, justice Conner could not examine the REGR without considering complimentary sections in the Customs and CWB Acts.  Each Act, in short, had to be interpreted in harmony with each other two's provisions.  Accordingly, despite having only been charged under the Customs Act and REGR, Sawatzky could be found guilty by appealing to the CWB Act.   According to the defense, this argument was, at best, nebulous.

The defense's argument amount to:

[U]nless the Crown is able to prove that the respondent was required to provide the export licence to the chief officer of customs at or before the time or exportation, he must be acquitted.³

The decision to acquit or convict would, thus, hinge on the degree of interpretation allowed by Justice Conner.  While there was no argument that the REGR is subordinate to the Customs Act, it was held that the CWB Act was separate.  The defense sought to undermine the REGR and Customs Act by isolating them from the CWB Act.  This was best accomplished by interpreting the two acts narrowly.  A narrow interpretation would allow only the content of the legislation to be considered, instead of making inferences about its intent.  The defense, therefore, argued that since Sawatzky had been charged under specific sections of the REGR and Customs Act, those sections must be interpreted literally.

To limit the REGR, the defense claimed that the French and English version of the Act were, in fact, identical.  The goal was to discredit the Crown's claim that since the French version is less ambiguous and mroe in line with the intent of Parliament, it should be given precedence in any court ruling.  The effect would be twofold.  First, the "provide" question would remain unresolved allowing the defense to advance its narrow definition.  Secondly, the Crown's appeals to the CWB Act would be tenuous.

With respect to the Customs Act, the defense again called for a limited interpretation.  Section 95(4) explained that all written reports required under section 95(1) should be submitted in the prescribed form containing the prescribed information as is satisfactory to the Minister.  "Prescribed," they noted, meant filing a form in the manner authorized by the Minister or in the rules defined within the regulation.  The defense argued:

In order to complete a report, one is to report "in the prescribed form containing the prescribed information.  However... no prescribed form exists with respect to exports to the United States.⁴

The defense charged that, although the Customs Act mandated that a report be filed by exporters, there was no proper method set out to do so.  Whether an export license was required to be presented, or even obtained, was unclear in the absence of a proper method for filing export reports.  Accordingly, the defense not only undermined the provisions of the Customs Act, but also weakened its link to section 5 of REGR.

As explained above, the Crown had argued that sections 3 and 5 of the REGR were intrinsically linked: one should not be read in the absence of the other.  The defense claimed otherwise; it was recognized that, if read in isolation, section 5 was ambiguous and weak.  The defense, therefore, keyed on the "provide" question that the Crown had attempted to downplay.  Without the clear provisions of section 3 to "report in writing" which bolstered the interpretation of section 5, Sawatzky's conviction was uncertain.

(ii.) Andrew McMechan and Bill Cairns

Between December 1993 and July 1994, Andrew McMechan and Bill Cairns made 97 shipments of wheat and barley worth over US $300,000 to the United States on behalf of other farmers.  At no time did they possess a valid Canadian Wheat Board export license.  McMechan was charged with:

Customs Act section 95(1) and Reporting of Exported Goods Regulations [REGR] section 5: four counts of failing to provide the Chief Officer of Customs a license granted by the CWB for grain export.

Bill Cairns was charged with:

Customs Act section 95(1) and Reporting of Exported Goods Regulations [REGR] section 5: two counts of failing to provide the Chief Officer of Customs a license granted by the CWB for grain export.

McMechan and Cairns were charged with the same offence as Sawatzky, and the Crown approached their case in a similar manner.  In fact, the cases were tried almost simultaneously.^b  As will be discussed below, however, the outcome of the cases was entirely different.

(iii.) Andrew McMechan

On March 3, 1996, Andrew McMechan exported 50 bushels of barley to the United States through the customs port at Lyleton, MB.  Upon return to Canada, customs officials seized his tractor pursuant to the provision of the Customs Act.  McMechan, despite being warned that if he left the port with the tractor he would be charged with theft over $5,000, refused to surrender the vehicle.  Later the same day he returned with 1,200 bushels of barley and drove straight through a Customs roadblock.  Re-entering Canada, he again passed through the Lyleton port.  He stopped, exited his tractor, and waited for officers to question him.  The officers, meanwhile, were awaiting instructions from their supervisors as to how to deal with McMechan.  McMechan's wife, Pamela, asked the officers when he would be dealt with.  They answered, "in due time," which she construed as that the officers "weren't coming out."  McMechan left the port.  He was arrested on March 4, 1996, and seven charges relating to the incidents at Lyleton were laid.⁵

McMechan's first trial centered on his conduct on March 3, 1996.

Judge Tarwid

Customs Act section 11: Unlawfully failing to present himself for questioning by a customs officer acting in the performance of his duties.

Customs Act section 31: Unlawful removal of goods -- a farm tractor -- from a customs office.

Customs Act section 153(c): Unlawfully, willfully evade compliance with section 114 of the Customs Act by failing to place in the custody of an officer property that was seized under the Customs Act -- a farm tractor.

Immigration Act section 94(1): Unlawfully elude examination under the Immigration Act.

Criminal Code of Canada section 143(3): Failure to comply with the conditions of a recognizance -- to keep the peace and be of good behaviour.

After being released from custody on March 4, 1996, McMechan refused to follow an order of his judicial interim release to return his seized tract to custom officials.  The second trial concerned McMechan's unwillingness to comply with this order.

Associate Chief Judge Giesbrecht:

Criminal Code of Canada section 145(3): Failure to turn in a farm tractor within 5 days from March 4, 1996 to March 9, 1996.

Criminal Code of Canada section 145(3): Failure to turn in a farm traction within 5 days of March 4, 1996: Offence date March 9, 1996 to July 6, 1996.

For the purposes of this paper, the Tarwid ruling will be examined in greater depth than the Giesbrecht ruling as it dealt with more immediately relevant topics the atmosphere of the Canadian grain trade.

While McMechan was never directly charged with crimes under the CWB Act or REGR, there clearly were grounds to do so.  The Crown has stated that additional charges could have included:

Exporting grain without a Wheat Board license contrary to section 45 of the CWB Act.

Failing to report the export of grain in writing contrary to section 3 of the REGR and Section 95(1) of the Customs Act.

Failing to provide a CWB license to the chief officer of customs contrary to section 5 of the REGR and Section 95(1) of the Customs Act.

Once can speculate that the Sawatzky decision may have produced uncertainly about the REGR, Customs Act, and CWB Act.  By charging McMechan under the Customs Act, the Crown may have wanted to avoid using the contentious provisions of the CWB Act.  Moreover, the Crown may have wished to avoid stoking the anti-CWB fires by promoting the perception that it aggressively pursues innocent farmers in order to protect a government monopoly.  Farmers for Justice member Rod Flaman explained that:

[T]he position we were caught in is that we were charged under the Customs Act.  You know, we never had a complaint with the Customs Act.⁶

Whatever the reasons fro the Crown not filing grain-related charges, McMechan still adds to the changing relationship of the three regulations when the appeals case heard by Justice Menzies is considered.

There were three key arguments concerning the Customs Act introduced by the defense during the appeals case.  The first maintained that using the REGR to convict McMechan breached the Sawatzky ruling.  The second examined McMechan's legal obligation to be questioned by customs officials.  The third quested the validity of the seizure.

Once reasonable grounds exist to believe that the Customs Act has been contravened, seizure of goods or conveyances is justified.   Section 110 reads:

(1) An officer may, where he believes on reasonable grounds that this Act or the regulations have contravened in respect of goods, seize as forfeit

(b) any conveyances the officer believes on reasonable grounds was made use of in any respect of the goods, whether at or after the time of the contravention

However, the defense claimed that, if section 5 of the REGR constituted these "reasonable grounds," then McMechan must be acquitted.  Since Sawatzky had invalidated the use of section 5, there was no basis in law to warrant stopping McMechan.  They reasoned:

[I]t is clear that the reasonable and probably grounds to seize the tractor the (Accused) Appellant was based on what has now been interpreted as a provision which imposed no duty on the (Accused) Appellant.⁷

In other words, they claimed that if McMechan could not be charged with failing to provide a license to customs officers, then he should not be charged with anything else.

It is submitted that the uncertainty of the provision of the Customs Act and [REGR] created an officially induced area of law which allowed the (Accused) Appellant to conduct himself in a fashion which imposed to duty nor created any unlawfulness in his actions at the Customs border.⁸

The defense's second claim was the McMechan's responsibility at the customs port was only to stop, not to ensure he was questioned by officers.  If this could be proven, McMechan's conviction under section 11 of the Customs Act would be overturned.  The Customs Act, the defense held,

only uses the phraseology, eludes examination, but, that clearly was not what the (Accused) Appellant was doing, for he had stopped for more than several minutes at the Customs Canada Port.⁹

McMechan had not eluded questioning, rather customs officials had refused to perform questioning.  Accordingly, McMechan can not be held liable for the officers' failure to fulfill their duty if he performed his.

[T]he (Accused) Appellant stopped his vehicle and on both occasions alighted his vehicle and therefore presented ample opportunity for the Customs officials to speak to the (Accused) Appellant and in fact did so on the first occassion.¹⁰

Combined with the fact that Pamela McMechan had informed her husband that the officers "weren't coming out," the defense claimed that McMechan was justified in leaving the customs port.  The defense's argument can be summarized as: unless officers question an individual promptly, or inform them why there will be a delay in questioning, that individual is under no obligation to remain at customs.

A third argument made by the defense concerning the Customs Act was, even if the seizure had been justified in law, it is the responsibility of the customs officer to make it clear that a seizure has taken place.  In the McMechan case, since the officers did not enforce the seizure by taking physical possession of the tractor, the seizure was void.  The goal was to undermine in a round-about way the charges laid under section 110 of the Customs Act by showing that section 114 had not been fulfilled.

114(1)Custody of things seized -- Anything that is seized under this Act shall forthwith be placed in the custody of an officer.

If the officers did not have custody of the tractor, no matter the reason, then a seizure could not have taken place.  Further, if no seizure took place, then McMechan could not be charged with the unlawful removal of his tractor (section 31) as it was still his.

The Crown took issue with these three claims.  Justice Menzies was first reminded that, unlike Sawatzky, McMechan had not been charged under the REGR.  The seizure was based solely on the Customs Act, thus any charge rests on the provisions of the entire Act.  The REGR, being subordinate to the Customs Act, can be used to support the charges, but must be read as a whole.  If the seizure of McMechan's tractor rested on the REGR, then section 3 is as useful for determining the validity of the charges as is section 5.  Therefore, even if the interpretation of section 5 of the REGR established in Sawatzky was accepted, there would still be no basis for the claim that the seizure was unlawful.  The Crown concluded:

The Appellant is incorrect throughout his factum to presume that the lawfulness of the seizure of the Appellant's tractor rests solely on failing to provide a Canadian Wheat Board license contrary to section 5 of the [REGR].  As stated earlier there was another infraction of the Customs Act committed by the Appellant, namely a contravention of section 3, to warrant subsequent seizure of his tractor.¹¹

and,

there was a clear violation of section 3 (failure to report in writing) of the [REGR] committed by the Appellant.  The seizure of the tract was therefore supported in law, even if this Honorable Court were to strike down section 5 of the [REGR] as being unconstitutional.¹²

The second argument, that McMechan was required to stop but not ensure he was questioned, was refuted by citing legal precedents.  The most noteworthy of these cases is R. v. Wong (1991) BCJ No. 3931 (BCSC) which established that the questioning power of customs officers exists for a "reasonable period of time" after an individual's arrival in Canada.  This would mean that McMechan's responsibilities extended beyond merely stopping, rather he must wait until he was granted leave by customs officers.  The Crown stated:

There is no time limit that a person has to wait before leaving Customs, otherwise people could legally evade their responsibility to answer questions put to them by Customs Officers about what they were bring (sic) into the country and what their immigration status was based solely on personal perceptions relating to an artificial time limit.¹³

Since McMechan did not speak with a customs officer after his second trip, clearly he could not have been given leave.  Accordingly,

[t]he Appellant did not fulfill the requirements of section 1 of the Customs Act because he left before he could be question [...] the burden was on him to establish he acted with due diligence in the circumstances. (emphasis added).¹⁴

No matter the situation it is the customs officer's decision as to when an individual can leave a customs port.  Even in the event that customs officer neglects this duty, it becomes the individual's obligation to secure this permission.  In short, the burden of duty rests on the individual.

On the third claim, that the tractor had been improperly seized, the Crown argued that force is the last resort of customs officers.  The extreme patience of the officers, in spite of McMechan's behaviour, is illustrative of the law.  Once a seizure has occurred, the onus is on the individual -- not customs officers -- to ensure the law is complied with.

The Customs Act relies on voluntary compliance [...] it is a "self reporting system."  It places legal obligations on people to do acts [...] The Crown submits that when goods are seized as forfeit to the Crown there must be some mechanism to transfer "physical possession" of the item to the Crown, otherwise the law would expend physical force to be used when someone, like the Appellant, is recalcitrant to turn over the seized property.¹⁵

Since McMechan was told he would be charged with theft if he removed the vehicle, yet failed to comply, he clearly did not fulfill his responsibilities under the law.  The Crown submits that there was no question that he understood that a seizure had taken place because he was given the opportunity to discuss the matter with the customs officers' superior, yet refused the chance.  If there is a more appropriate method of performing a seizure, force is to be avoided.  In this case, the officers decided to let McMechan leavd and take possession of the tractor the next day.  Physical force was avoided because there was more suitable alternative.

(iv.) Other notable cases

Justice Thornson noted, while presenting his ruling in the Clayton Desrochers case, that:

I had the impression when I heard this case that in some sense, Canada Customs is put in the position of regulating this matter, not happily or unhappily, but because it's their job and it arises from the question before me, exporters sand the Canadian Wheat Board, only because of the nature of that relationship has it become a  Customs matter at all.¹⁶

His observation would prove prophetic.  The nature of grain related incidents began to change following the Sawatzky, McMechan and Cairns trials.  Grain runs to the United States were no longer for economic reasons, rather they were don to protest the CWB monopoly.  Farmers became activists rather than exporters.  With this shift, naturally, came a change in the nature of charges laid.  Fewer cases were based on contravention of export regulations: reporting in writing under the REGR and Customs Act, or obtaining a permit under section 45 and 46 of the CWB Act.  Most were now filed under sections 11 and 153(c) of the Customs Act which related to evading questioning by customs officials.  This will be discussed further in the effect of the rulings section.

Judgment

(i.) Sawatzky

Justice Conner agreed with the defense claim that the English and French versions of REGR were identical, thereby discounting the Crowns claim that the REGR, Customs Act and CWB Act regulations should be read in harmony.  He explained:

[T]he interpretation of these regulations has to stand on its own without any reference to the CWB Act.¹⁷

The decision, therefore, was made according to the English version of the REGR.  In this judgment, Justice Conner explained:

It is the words which follow repeatedly the words "required to be provided" which are contentious.  Do these words modify the information and documents in a sense that only information and documents obtained under its regulations that prohibit, control or regulate the exportation of goods are to be provided, as Crown counsel contends, or do the words qualify the obligation to provide information and documents identifying the circumstances in which the information and the documents are to be provided to the chief officers of customs, in the sense that only information and documents which are mandated to be provided by an Act or regulation must be provided to the chief officer of customs?¹⁸

Justice Conner concluded that a narrow interpretation of the REGR was most appropriate.  He reasoned that unless the words "required to be provided," are read as mere surplusage, then some meaning must be given to them.  In short, interpretation could not be so broad as to remove all meaning from the regulation itself.  "Provided " was taken at face value; Conner ruled that nowhere in the applicable legislation is there a statutory requirement that once obtained, a permit has to be provided to a customs officer before exportation.  His ruling relied more on the appropriate meaning of regulations, rather than their interrelation.  Ultimately, Justice Conner reasoned:

Having regard to this interpretation of section 5 of the Reporting Regulations, I hold that the Customs Act, the Wheat Board Act and the respective regulations did not require Mr. Sawatzky to provide to the Chief Officer of Customs any information, certificate, licenses, permits or other documents relating to the what and barley which he exported.  Crown counsel could not identify any other Act of Parliament or regulations made pursuant thereto that prohibit, control or regulate the exportation of goods which mandated Mr. Sawatzky to provide to the Chief Officer of Customs and information, certificate, licenses permits or other documents relating to the wheat and barley which he exported.  I therefore acquit Mr. Sawatzky of the charges under the Customs Act.¹⁹

While he agreed that Sawatzky had broken the law, there was no legal foundation on which to base the charges.  Justice Conner explained that a conviction could have been made,

pursuant to section 95 of the Customs Act and section 3 of the Reporting Regulations, Mr. Sawatzky was required to report in writing at the appropriate customs office, the export of the wheat and barley.  However, Mr. Sawatzky has not been charged for failing to report as required by section 95 of the Customs Act and section 3 of the Reporting Regulations.  He has been charged with failing to provide to the chief officer of customs a license granted by the Board for the export of grain contrary to section 5 of the Reporting Regulations.²⁰

The Crown's appeal of the ruling maintained that Justice Conner had erred in his interpretation of section 5 of the REGR.  By taking non experts opinion that the English and French versions were identical, Justice Conner failed to appreciate the true nature of the regulation.  While appeals judge Justice Keyser agreed that the two versions were indeed different, Justice Conner's ruling was upheld.  The differences, she ruled, did not necessarily mean one was closer to the true intent of Parliament.  Accordingly, the version most favourable to Sawatzky -- in this case the narrower English version -- must prevail in rendering judgment.

As will be shown, this case had consequences for both the Canadian legal and legislative systems.

(ii.) McMechan and Cairns

Justice Coppleman convicted both McMechan and Cairns on all charges laid against them.  McMechan was fined $500 per count for a total of $2000 and ordered to pay nearly $56,000 in damages to the CWB.  Cairns was fined $600 in total.

How did Justice Coppleman arrive at a different conclusion than did Justice Conner, despite having heard similar arguments?  The reasons were two fold.  First, Justice Coppleman accepted the Crown's argument that the governing regulations should be interpreted broadly.  Broad interpretation, he reasoned, would not create disharmony between regulations provided the meaning was reasonably appropriate.  Citing the Supreme Court of Canada:

If, notwithstanding that the words are clear and unambiguous when reading their grammatical and ordinary send, there is disharmony within the statue, statutes in pari materia, or the general law, then an unordinary meaning that will produce harmony is to be given the words of, if the are reasonably capable of bearing that meaning. (emphasis added)²¹

How then, should the Customs Act regulations be interpreted?  As was argued during Sawatzky, if no clear meaning could be inferred upon ambiguous passages -- like section 5 -- Parliament's intent should be examined.  In the words of the Crown, "the primary goal of statutory interpretation [...is...] to give meaning the legislature's intentions."²² Ultimately, Justice Coppleman hoped to prevent dividing regulations against themselves.

Secondly, Justice Coppleman reasoned that the a narrow interpretation of the Customs Act would unduly limit the provisions of the CWB Act.  In Sawatzky, it was ruled that section 5 of the REGR could be read narrowly and on its own.  The result was Justice Conner's judgment that, while an export license was required to be obtained, it did not have to be shown.  Since the CWB Act relies heavily on the Customs Act for enforcement, this interpretation renders the CWB Act largely impotent.  Justice Coppleman recognized this problem, and by allowing for broad interpretation he hoped to avoid it.  The implicit link between the Customs and CWB Acts requires that they not be at odds with each other.  This said, Justice Coppleman reasoned that it would make no sense to expect an exporter to report in writing -- REGR section 3 -- without requiring them to show the license as well.  He wrote:

The requirements of other Acts of Parliament are incorporated into the [Customs Act] by general inference.  To construe the words of the [Customs Act] so as to obviate the need to present an export license would certainly not be in harmony with the clear intentions of Parliament in enacting the Canadian Wheat Board Act and regulations.²³

While it would be expected that neither McMechan or Cairns would challenge their sentences, it was, in fact, the Crown that filed an appeal.  Given McMechan's history of insurgency the Crown had hoped for a stiffer penalty.  On July 30, 1996, McMechan's fines were increased from $500 to $5,000 per count for a total of $20,000 by Justice Steel.  Similarly, Cairns' fines were increased to $2,000.  Cairns later asked Justice Mykle to substitute 60 days jail time for the fine.^c

(iii.) McMechan

McMechan was convicted by Justices Tarwid and Giesbrecht on all seven charges.  His sentencing under the Customs and Immigration Acts netted $13,000 in fines, while the criminal charges resulted in six months and one day of prison time.  Justice Menzies upheld McMechan's conviction on six of the seven charges, but reduced his fines to $1,000 and jail time to four months and one day.  The one overturned charge related to McMechan's refusal to turn over his tractor after the original five day period had expired.  It was found that once he'd failed to turn over his tractor on March 9, 1996, the offence was complete.  The continued failure to turn in the tractor was not a further breach of the law, since the second charge merely duplicated the first.

This said, it should be remembered that all of the key convictions were upheld.  Unlike Sawatzky, no judicial loopholes were created in either the trial or appeals cases.  In upholding six of seven convictions, Justice Menzies largely accepted the Crown's arguments.  Regarding the claim that a seizure resting of section 5 of the REGR was invalid, Justice Menzies found that, since McMechan had been charged under the Customs Act, not the REGR, all provision of the Act were applicable to the interpretation of the offences.  Invalid or not, the customs officers had reason in law to sop McMechan; even if Sawatzky could be applied in McMechan, whether or not section 5 was valid would have no bearing on the ruling:

When the tractor was seized, McMechan was advised that it was being seized for a violation of the Customs Act.  The officers were acting in good faith and within the statutory scope of their authority.  The actions taken by McMechan taken (sic) on March 3, 1996 violated both section 3 and 5 of the [REGR].  A violation of either section renders McMechan's tractor subject to seizure.  Whether section 5 is invalid or not, the officers had the grounds and authority to effect the seizure of the tractor.²⁴

The reduction of the fines and jail time resulted from the totality of the punishment.  While individually the punishments may have been just, together they "reflect a much more serious offence than the one before the court."²⁵

Effect of the Rulings

The government had two concerns, should Justice Coppleman find in favour of McMechan and Cairns.  The first centered on possible amendments to the CWB regulations to include a specific and clear legal requirement for wheat and barley exporters to present export permits to customs.  A second concern was whether Revenue Canada should change section 5 of the REGR to eliminate any ambiguities about the responsibility of exporters.

Of course, neither of these concerns had to be addressed after the trail, as McMechan and Cairns were convicted.  However, following the acquittal of Sawatzky, these concerns returned to the forefront of the government's agenda.  Within hours, the CWB regulations were amended (SRO/96-265) to explicitly call for export permits to be obtained and produced.  The amendment reads:

14.2 Any person who exports wheat, wheat products, barley or barley products from Canada shall, at the time of exportation, give to a customs officer at the customs office at the point of exit specified on the export license

(1) the original export license for that grain or product, and a copy of it; or

(b) in the case of an export license for multiple shipments of that grain or product

(i) at the time of every shipment except the final shipment, two copies of the export license, and
(ii) at the time of the final shipment, the original export license and a copy of it.

The questions remains if section 5 of the REGR and section 95 of the Customs Act had been enough to convict McMechan and Cairns, and if Justice Conner had explained that Sawatzky could have been convicted pursuant to section 3 of the REGR, why would the CWB regulations need to be amended?  Why wouldn't the government simply amend the ambiguous provisions of the REGR to read more clearly?  Did changes to any regulations really have to be made?

In answering the first question, it must be remembered that Justice Conner's ruling immediately created doubt about the provisions of the Customs Act and REGR.  No matter what Justice Coppleman had found before, many individuals were waiting for an excuse to flout the law.  Therefore, given this potential for protest and upheaval at the border, it was felt that the Sawatzky loophole should be closed as quickly as possible.  It was decided that the best way was to amend the CWB regulations -- a move which does not need time-consuming Parliamentary approval 0 -- to require production of an export license at the time of export.

he second question, whether to amend the REGR, hinged on the scope of the regulations.  The belief was that since the REGR had implications for commodities beyond grain exports, changes might alter its meaning.  In view of the fact that section 5 was the preferred section for export enforcement of customs officials, it was deemed easier to change the CWB regulations.  In short, customs did not want to risk sacrificing the overall effectiveness of the REGR to solve a specific problem.

Whether or not the regulations really had to be amended is debatable.  The government required a document which explicitly called for the production of CWB export licences by exporters.  This is understandable; reliance on an array of different legislation and regulations had failed to consistently convict offenders.  It must be asked, however, didn't section 95 of the Customs Act and section 3 of the REGR solve the inconsistency problem?  The legal answer to this seems to be, in short, that these two pieces of legislation were enough tot convict illegal grain marketers.  Unfortunately, the problem was not this straightforward.  The loophole suggested in Sawatzky undermined the effectiveness of the applicable regulations; while they had not been legally diminished, the public perception of the efficacy was eroded.  Even if nothing had changed judicially , a deterrent was required.

It may be that there was no conscious shift away from laying grain-related charges, but that the nature of offences had changed.  Exportation was no longer commercial in nature -- multiple large shipments -- but for protest.  An incident near Boissevain, MB offers an example of this.  Farmers staged a symbolic protest by exporting sacks of grain in wheelbarrows -- challenging the federal government to lay charges for exporting without a license, and seize their conveyances.  The object was to directly challenge the Customs Act, REGR, and the CWB Act, rather than evade it.  Protesters wanted to be tried so that they could test the validity of their charges in court.  In such situations, the Crown has either refrained from charging farmers, or charged them under sections 1 or 153(c) of the Customs Act: evading examination by customs officers.  By selectively charging protesters, the Crown avoided depriving farmers of their right to protests, while preserving the integrity of the governing legislation.

McMechan and Cairns proved to be a controversial ruling.  Justice Conner's ruling, while it created uncertainty in grain-related legislation, was generally held as a proper legal judgment.  In contrast, Justice Coppleman's ruling fell into disuse after the Crown's unsuccessful use of it during the Sawatzky appeal.  While not bound to consider the judgment, Justice Keyser felt compelled to comment that it was "inconsistent."²⁶ While the Crown had successfully prosecuted McMechan and Cairns, the legal precedents established during the trial were viewed as weak.  Consistent with Justice Conner's remarks, the Crown stopped charging individuals under section 5 of the REGR in favour of section 3.

The nature of McMechan's second trial has not yet been fully explored.  Certainly, McMechan's first foray across the border March 3, 1996 resembled a protest grain run: 50 bushes is far from a a commercial shipment.  Whey then, was his tractor seized?  One answer is his checkered past.  McMechan had flouted the law numerous times before and had clearly done so again.  In addition, customs may have believed that this was not a protest shipment, and that McMechan would return with more grain later.

The terms of McMechan's probation -- pursuant to his conviction with Cairns -- was to "keep the peace and be of good behaviour." Clearly he had not done so.  Since custom officials testified that they knew of McMechan's probation, they had reason to charge him for failing to abide by those conditions.  Once McMechan made his first border crossing March 3, he had opened himself up tot he full spectrum of grain-related charges.  Granted that customs officials and the crown charged McMechan under the less contentious provisions of the Customs Act, Immigration Act, and Criminal Code, they would have been justified in charging him under any section of the Customs Act, REGR, or CWB Act which he had contravened.  This is not to imply that McMechan was unimportant.

Despite rulings on the questioning and seizure provision of the Customs Act, the McMechan trail was the first to deal specifically with export regulations.  Section 31 -- removal of seized goods -- had rarely been used until McMechan and remained legally untested.  In short, McMechan provided jurisprudence which had, up to then, not existed.  McMechan provided the judicial viability of untested sections and allowed the application to other cases.  There were two consequences of this.

McMechan reconfirmed the right of customs officers to seize vehicles used in grain-related offenses.  Once a conveyance has been seized, it is the individual's responsibility to ensure they have complied with the seizure provisions of the Customs Act.  Customs officers are not obliged to physically take possession of an item for the seizure to be valid and proper.  With the nature of grain-related cases changing from economic to protest, seizure provisions have become the most effect means of preserving the legitimacy of customs regulations.   Accordingly, the initial seizure produces charges pursuant to Customs Act section 110, followed by charges under section 31, 114 and 153(c) against recalcitrant individuals, have become the norm.

Secondly, McMechan affirmed that individuals must present themselves, submit to questioning, and be given leave by customs officers.  In terms of the changing nature of cases, the strengthening of these provision means that, even while farmers may protest, the Crown retains control over the borders and enhances the legitimacy of grain-related regulations by ensuring that sections 11 and 153 of the Customs Act are not rendered impotent.

Prepared by Kasim Alim
AGPD, PDPSD summer student
(204) 984-7791
July, 1998

Endnotes:
¹SAWATZKY, Factum of the Appellant (CR-96-01-17619) pg. 34
²SAWATZKY, Factum of the Appellant (CR-96-01-17619) pg. 59
³SAWATZKY, Factum of the Respondent (CR-96-01-17619) pg. 10
⁴SAWATZKY, Factum of the Respondent (CR-96-01-17619) pg. 11
⁵McMECHAN, Factum of the Respondent (CR-96-02-73) pg. 10
⁶CKDQ Radio, Drumheller, AB, June 18, 1998