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Page 14 June 6, 2016 • Law Times www.lawtimesnews.com CASELAW which no rent was payable. Ten- ant commenced action claiming that landlord breached lease and sought injunction and damages. Numbers of court orders were made. Tenant brought motion to strike statement of defence. Motion was granted. State- ment of defence was struck and proceeding was to continue to undefended trial. Landlord ap- pealed order of trial judge strik- ing statement of defence. Appeal dismissed. Trial judge properly recognized that court should only reluctantly strike statement of defence. This was one of rare cases in which it was appropri- ate to do so. Position appellants found themselves in was due to their own intransigence. Land- lord failed to comply with litany of court orders. 1860035 Ontario Ltd. v. Ve- lika Realty Inc. (Mar. 7, 2016, Ont. C.A., Laskin J.A., Mac- Farland J.A., and Roberts J.A., CA C61183) Decision at 258 A.C.W.S. (3d) 287 was affirmed. 264 A.C.W.S. (3d) 907. Criminal Law PROCEEDS OF CRIME Application judge correctly applied two-step process man- dated by the Civil Remedies Act Appellant was traveler who was stopped at airport secu- rity check. Traveler was found to have US$100,000 in tightly- wound bundles concealed inside socks in his luggage. Traveler also had US$4,877 in his pocket and small amount of cocaine in wallet. Traveler claimed that US funds were combination of tips when he worked at casino, gam- bling winnings, and proceeds from insurance settlement. On application, trial judge found that funds were proceeds from unlawful activity and that trav- eler was not legitimate owner. Application judge granted At- torney General of Ontario for- feiture of US$104,877 under ss. 3 and 8 of Civil Remedies Act (Ont.). Traveler appealed from order. Appeal dismissed. Ap- plication judge correctly applied two-step process mandated by Act. Application judge found, on balance of probabilities, that traveler was acting as cash cou- rier. Traveler had no cogent ex- planation to disprove this, given evidence against him. Forfeiture was appropriate remedy under circumstances. Ontario (Attorney Gener- al) v. $104,877 in U.S. Curren- cy (In rem) (Jan. 25, 2016, Ont. C.A., Doherty J.A., G. Pardu J.A., and M.L. Benotto J.A., CA C59589) Decision at 245 A.C.W.S. (3d) 93 was affirmed. 264 A.C.W.S. (3d) 946. Hotels and Restaurants LIQUOR CONTROL Mark-up imposed by Liquor Control Board of Ontario on distillery licensed to sell spirits at retail store was proprietary charge Applicant distillery was li- censed to distil and warehouse spirits. Alcohol and Gaming Commission of Ontario grant- ed distillery's application for manufacturer's licence and re- tail store authorization for per- mission to sell spirits at store, on condition that distillery enter into contract with Liquor Con- trol Board of Ontario (LCBO). Contract required distillery to first sell spirits to LCBO and only then retain them for sale at retail store, and gave LCBO power to calculate mark-up and commission rates applicable to products sold based on com- bined cost and federal excise tax total. Contract meant that dis- tillery would sell to consumer as LCBO's agent. Price to be paid by consumer was price paid by LCBO when purchasing prod- uct plus LCBO's standard mark- up. Distillery brought applica- tion for declaration that levy imposed by LCBO and charged on sale of spirits in retail store was ultra vires of existing leg- islation under ss. 53 and 90 of Constitution Act, 1867 (Can.). Application dismissed. Mark- up imposed by LCBO was not tax but proprietary charge, or alternatively, contractual term agreed to by distillery. Mark-up fit within criteria in jurispru- dence as to whether charge was tax. Mark-up was enforceable by law as condition of authori- zation, power to impose mark- up emanated from statutory power, LCBO was public body, and mark-up was intended for public purpose of revenue gen- eration and curbing excessive alcohol consumption. Mark-up constituted proprietary charge. Liquor may be subject to pro- prietary charge once it was sup- plied by province commercially. Fact that product remained on distillery's premises did not change fact that spirits had be- come property of LCBO. Toronto Distillery Co. v. Ontario (Alcohol And Gaming Commission) (Apr. 1, 2016, Ont. S.C.J., S.A.Q. Akhtar J., CV-15- 533046) 264 A.C.W.S. (3d) 1000. Sale of Land EFFECT OF CLOSING Motions judge correctly found that arrears formed part of sale and had to be accounted for as part of transaction D Inc. purchased property in 2005 and later built school on property that was operated by J Inc.. D Inc. agreed to sell property to R Ltd. in trust for company to be incorporated. A Ltd. was that company. J Inc. was to continue as tenant. Parties agreed that J Inc. would pay $25,000 to A Ltd. to complete first sale agreement. First mortgagee of property ob- tained order appointing receiver of assets of A Ltd.. Receiver trans- ferred property to 368 Ltd.. Mo- tion judge directed that $188,845 be held back from initial distribu- tion of net proceeds of sale pend- ing determination of whether amounts paid by J Inc. to A Ltd. on account of property taxes un- der lease were enforceable against 368 Ltd., and entitlement of vari- ous parties to disputed balance. Motion judge held that amounts paid by J Inc. to A Ltd. for proper- ty taxes were enforceable against 368 Ltd.. However, motion judge also found that 368 Ltd. should be paid amount owing for rent from disputed balance, less credit for property tax overpayments. Motion judge denied J Inc.'s re- quest to enforce against 368 Ltd. $25,000 payment made to A Ltd. under side agreement. D Inc. and J Inc. appealed. Appeal dismissed. Sale documents made clear that all benefits and obligations un- der lease, including rents, vested in 368 Ltd.. 368 Ltd. was entitled to rent arrears owed by J Inc.. Arrears formed part of sale and had to be accounted for as part of transaction. 368 Ltd. was not party to side agreement. J Inc. was not entitled to credit against 368 Ltd. in amount of $25,000. DBDC Spadina Ltd. v. Wal- ton (Mar. 21, 2016, Ont. C.A., John Laskin J.A., Janet Simmons J.A., and Grant Huscroft J.A., CA C60593) 264 A.C.W.S. (3d) 1068. Statutes INTERPRETATION Neither wisdom nor efficacy of a regulation is justiciable issue Pesticides Act (Ont.). Ontario farmers rely on seeds treated with neonicotinoids, pesticides, to protect crops but they are toxic to bees. Ontario amended Regu- lation 139/15 made under Pesti- cides Act (Ont.) to sharply reduce use of neonicotinoids. Specifical- ly, use of treated seeds was per- mitted where user obtains pest assessment report establishing use as necessary. Regulation pro- vides for crop pest assessment, which may only be prepared af- ter March 1, 2016, and soil pest assessment (SPA), which was not restricted by date. Grain Farmers of Ontario (GFO), representing Ontario farmers, brought ap- plication under R. 14.05(3)(d) of Rules of Civil Procedure (Ont.), seeking declaration interpreting Regulation and stay of Regula- tion pending interpretation. It was concerned Regulation would significantly impair ability of farmers to protect crops from damaging insects. GFO argued that absence of date governing preparation of SPAs created am- biguity, making its application uncertain and rendering compli- ance impossible. Ontario Minis- try of Environment and Climate Change (Ontario) brought cross- motion to strike out GFO's no- tice of application as disclosing no reasonable cause of action. Motion judge granted Ontario's cross-motion, finding that rem- edy GFO sought was not deter- mination of rights arising from interpretation of Regulation but rather re-writing of Regulation. GFO's appeal dismissed. Regula- tion affected farmers' legal rights but there was no controversy as to farmers' rights or obligations under Regulation that could make the matter justiciable. Rule 14.05(3)(d) is procedural in na- ture and does not create jurisdic- tion. Neither wisdom nor effi- cacy of regulation is a justiciable issue. Dispute between parties did not turn on interpretation of Regulation. Regulatory precon- ditions that must be satisfied be- fore farmer can purchase and use treated seeds were clear. There was no ambiguity. GFO sought to have court take alleged unfair- ness of Regulation as authority to rewrite it to alleviate burden on farmers. Courts cannot, howev- er, be used as indirect method of altering public policy decisions. Application did not disclose rea- sonable cause of action. Grain Farmers of Ontario v. Ontario (Ministry of the Environment and Climate Change) (Apr. 20, 2016, Ont. C.A., John Laskin J.A., E.A. Cronk J.A., and B.W. Miller J.A., CA C61289) Decision at 260 A.C.W.S. (3d) 5 was affirmed. 264 A.C.W.S. (3d) 888. Ontario Criminal Cases Appeal SENTENCE APPEAL Despite successful appeal for some offences, overall sentence was not affected and remained fit Police officers executed search warrant on suspected drug op- eration. Police found accused JM and co-accused in basement bedroom. JM was subject to two prohibition orders since he was convicted of firearms offences. In that bedroom police found loaded handgun near JM. Hand- gun contained 14 bullets in mag- azine and one in chamber. Police found marijuana, five working cell phones, three digital scales, accounting list, ammunition and $3,000 in bundled cash. JM was convicted of possession of loaded prohibited firearm, possession of firearm knowing its possession was unauthorized, possession of prohibited device, being high capacity magazine, possession of crime proceeds, possession of marijuana for purpose of traf- ficking, and breaching two fire- arm prohibition orders. JM was sentenced to nine and one-half years' imprisonment, less credit for pre-sentence custody. JM re- ceived eight and one-half years for possession of loaded fire- arm and one additional year for breaches of two prohibition or- ders. Sentences for other charges were to run concurrently and they did not impact on total sen- tence. Convictions for posses- sion of crime proceeds and mari- juana quashed and acquittals were entered. Accused appealed sentence. Appeal dismissed. De- spite successful appeal for crime proceeds and marijuana offences overall sentence was not affected and it remained fit. R. v. Mullings (Mar. 1, 2016, Ont. C.A., Robert J. Sharpe J.A., M.L. Benotto J.A., and Grant Huscroft J.A., CA C58150) 128 W.C.B. (2d) 538. Charter of Rights ARBITRARY DETENTION OR IMPRISONMENT Reasonable suspicion may be grounded in constellation of factors Accused was detained by police in front of his residence for in- vestigation of trespass and liquor- related provincial offences. Alter- cation ensued in which accused shoved and kicked officers and ran into residence. Police arrested accused and subsequent search of his backpack revealed handgun. At trial, accused alleged numer- ous infringements of his Charter rights and brought application to exclude from evidence hand- gun and for stay of proceedings. Trial judge dismissed applica- tion. Among other things, trial judge found that accused had been lawfully detained for brief investigation for offences under Trespass to Property Act (Ont.), and Liquor Licence Act (Ont.). Accused was convicted of vari- ous firearms and weapons of- fences and of assaulting police. Trial judge had found police had grounds to detain accused based upon manner in which accused had turned to first available door- way and urgently tried to gain entry by turning door handle and knocking, accused did not have key to unit that he was trying to enter, accused was carrying par- tially consumed bottle of liquor, smelled of alcohol, and had blood shot eyes such that it could be in- ferred that he had been drinking in courtyard, accused's very ner- vous demeanour, including trem- bling hand when he produced his health card and his manner of standing with his backpack up against wall, and complaint from property manager that there were trespassers in courtyard area, particularly during evenings after 8:00 p.m., and that someone ap- peared to be letting them in. Ac- cused appealed his convictions. Appeal dismissed. Actions noted may have been lawful and each of facts, if considered in isola- tion, may have been insufficient. However, when totality of facts was viewed together, they were capable of grounding reasonable suspicion that accused may be en- gaged in trespass or liquor-related offences. Reasonable suspicion may be grounded in constellation of factors, even if any one of those factors on its own would not have been sufficient. R. v. Darteh (Feb. 22, 2016, Ont. C.A., Doherty J.A., E.A. Cronk J.A., and H.S. LaForme J.A., CA C59386) Decision at 112 W.C.B. (2d) 325 was affirmed. 128 W.C.B. (2d) 558. Drug Offences CULTIVATING MARIJUANA Trial judge's findings were suf- ficient to support conviction for aiding production of marijuana and aiding possession of mari- juana for purpose of trafficking Accused was proprietor of gar- den supply business, ASGS. Accused had one employee, S. During surveillance, police fol- lowed ASGS customers and de- liveries made. Police discovered four marijuana grow opera- tions linked to four customers. Accused was found guilty of conspiracy to commit offences of possession of marijuana for purpose of trafficking and pro- duction of marijuana; and sub-

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