THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 002 Date: 2013-01-07 Between: Docket: CACR2011 Her Majesty the Queen and Chisum Log Homes and Lumber Ltd. Corp. #309621 and Garry Varga Coram: Cameron, Caldwell and Herauf JJ.A. Counsel: Anthony B. Gerein for the appellant Robert Kennedy, Q.C. for the respondent Appeal: From: 2011 SKQB 155 (CanLII) Heard: January 7, 2013 Disposition: Appeal Allowed Reasons By: The Honourable Mr. Justice Cameron for the Court CAMERON J.A. [1] Chisum Log Homes and Lumber Ltd. manufactures log-home packages near Weyakwin, Saskatchewan, under the direction of Garry Varga, the sole director of the company. As a result of what the manufacture of these packages entails, both the company and Mr. Varga were convicted in Provincial Court of operating a forest products processing facility without a licence, contrary to s.18.1 of The Forest Resources Management Act, S.S. 1996, c. F-19.1. In consequence, each was fined and ordered to pay surcharge. [2] They then appealed to the Court of Queen’s Bench. The judge who heard their appeal allowed it and set aside the convictions. He did so on the basis the steps taken in connection with the manufacture of the log-home packages by the company and Mr. Varga were not such as to engage the licensing provisions of the Act. With that, the Attorney General applied to this Court for leave to appeal on the ground the judge misconstrued the licensing provisions of the Act and hence misapplied them. [3] We are of the opinion this is an appropriate case in which to grant leave to appeal. For the reasons that follow, we are also of the opinion the appeal should be allowed and the convictions restored. [4] The charges stemmed from the manufacture of log-home packages by the company under the direction of Mr. Varga. The two operated facility near Weyakwin for that purpose. The manufacture of these packages entailed the following steps, beginning with the purchase of felled trees harvested by others from Crown lands; felled trees, that is, of certain length, girth, and trueness, with their tops lopped and limbs removed by the others. Upon being delivered to the Weyakwin facility, the company and Mr Varga sawed these rough logs, so to speak, into various lengths, removed the bark from them, and turned them into uniform girth on large lathe. They then cut each of them along the top and bottom surfaces in double tongue and groove pattern. They also notched each at the extremity with saddle-like notches. Next, they marked each for ease of home construction and assembled them into log-home packages, packages that were sold directly to consumers in Canada and elsewhere. The packages contained only the finished logs, so to speak, ready for assembly, with the roofs and floors being extra. [5] The question throughout has been, and continues to be, whether the steps taken by the company and Mr. Varga in the course of operating the Weyakwin facility for the purpose of manufacturing these log-home packages were such as to bring the operation of the facility within the meaning and scope of the licensing requirements of The Forest Resources Management Act, beginning with s. 18.1. [6] Section 18.1 states that that “no person shall operate processing facility without licence.” The term “processing facility” is defied by s. 2(1)(w) of the Act as follows: (w) “processing facility” means pulp mill, sawmill, plywood mill, fibre or strand board mill, post plant or any other facility, fixed or mobile, designed for manufacturing forest products and includes slasher, chipper, debarker, fuelwood processor or any other mechanized equipment, fixed or mobile or any component of the equipment, designed for manufacturing forest products; [7] number of the terms found within this definition of processing facility, including terms such as “forest products” and “manufacturing” are also defined in s. 2(1) of the Act. The former is defined in s. 21(1)(k) to mean, among other things “vegetation on or from forest land…whether alive, dead, or cut, and includes trees…” The latter is defined in s. 21(r) to mean this: (r) “manufacture” means any step taken to prepare forest product for market, and includes the sawing, peeling, chipping, debarking, preserving, cleaning, drying, extracting and packaging of forest products, but does not include harvesting. [8] Having regard for these provisions, and for the steps entailed in the manufacture of the log-home packages in question, we are of the opinion the operation of the Weyakwin facility by the company and Mr. Varga without a processing facility licence was unlawful as being contrary to s. 18.1 of the Act. Indeed, we are of the opinion the operation of the facility fell squarely with the meaning and scope of these provisions. Hence, we agree with the conclusion arrived by the judge of the Provincial Court, who convicted, and disagree with the judge of the Court of Queen’s Bench, who set aside the convictions. [9] With respect, we are of the view the judge of the Court of Queen’s Bench misconstrued these provisions and in consequence misapplied them. As we see it, he was too much concerned in the abstract with the potential scope of these provisions, fearing, as he did, that as one moved from the meaning of them at the centre to their potential meaning at the periphery, they reached beyond the contemplation of the legislature, especially in the context of the commission of an offence. In consequence he so restricted the meaning of these provisions, and others associated with them, as to narrow the scope of the licensing provisions well beyond that which, in our respectful opinion, was clearly intended by the legislature in light of the Act as whole, including the overall purpose, the licensing scheme and its objects, and the cast of the provisions in question. [10] As we say, the circumstances in this case are such as to bring the case squarely within these provisions. That being so, what might be made of these provisions in another case, featuring different circumstances and engaging the meaning of the provisions at their periphery, is matter for another day. With the greatest of respect, the matter need not, and should not, have been taken up in the context of this case, at least not to the extent and to the effect the judge of the Court of Queen’s Bench thought appropriate. In our respectful judgment this went quite beyond what the case called for. [11] We should add that Mr. Varga was assumed throughout to have been responsible, along with Chisum Log Home and Lumber Ltd, for the operation of the Weyakwin facility. Hence, he was convicted alongside the company. Nothing was made of his liability, as distinct form that of the company, either in this Court or in the courts below, so nothing we have said is to be taken as having any bearing on whether he, too, needed license. [12] For these reasons, then, we have decided to allow the appeal, set aside the decision in the Court of Queen’s Bench, and restore the decision of the trial judge. It follows that the convictions must stand. As for the fines and surcharges, there is nothing in the case to suggest we might interfere with the decision of the trial judge, so they too must stand.
The Crown applied for leave to appeal a Queen's Bench decision that set aside the convictions of the respondents, Chisum Log Homes and Lumber Ltd. and its sole director, Varga, for operating a forest products processing facility without a licence, contrary to s. 18.1 of The Forest Resources Management Act. The charges had stemmed from the manufacture of log-home packages by the company under the direction of Varga. The manufacture of these packages entailed the purchase of felled trees harvested by others from Crown lands. The logs were then cut at the respondents' facility into various lengths and notched, marked for construction and assembled into log-home packages. In the appeal to Queen's Bench of the convictions, the judge found that these steps in the manufacture of the packages did not engage the licencing provisions of the Act. HELD: The Court gave leave to appeal and allowed the appeal. Based on the definitions provided in s. 2 of the Act with respect to the words 'processing facility', 'forest products', and 'manufacture', it found that the operation of the facility by the company and Varga without a processing facility licence was unlawful as being contrary to s. 18.1. As the Provincial Court judge's conclusion was correct, the Court held that the convictions must stand and did not interfere with the fines and surcharges imposed upon the respondents.