COURT OF APPEAL FOR ONTARIO

CITATION:
R. v. Baldree, 2012 ONCA 138

DATE: 20120302

DOCKET: 52415

Feldman, Blair and Watt JJ.A.

BETWEEN

Her Majesty The Queen

Respondent

and

Christopher Baldree

Appellant

Michael Davies, for the appellant

Brian G. Puddington, for the respondent

Heard: July 26, 2011

On appeal from the conviction entered on October 7, 2009 by
    Justice Colin McKinnon of the Superior Court of Justice.

Watt J.A.
  (Dissenting):

[1]

A police officer answered a call made to Chris Baldrees cell
    phone police had seized when they arrested Baldree on several drug charges. The
    caller wanted to buy and have delivered to a local address an ounce of weed.
    Posing as Baldrees successor, the officer agreed to deliver the drugs at the
    price Baldree usually charged, but didnt make the delivery.

[2]

The evidence adduced at Baldrees trial on the drug and related
    charges included the officers version of the conversation with the unknown
    caller. The principal ground advanced on Baldrees appeal against the
    convictions recorded at trial has to do with the admissibility and judges use
    of the officers evidence about the call to buy drugs.

[3]

These reasons explain my conclusions that the evidence about the
    call was properly admitted and not misused by the trial judge and that
    Baldrees appeal from conviction should fail.

[4]

The reasons also explain why I disagree with my colleagues whose
    reasons I have had the benefit of reading.  They and I part company on three
    issues.  I do not agree with them

i.

that the evidence of the telephone call was hearsay thus requiring a
    listed or principled exception to justify its reception;

ii.

that the trial judge erred in failing to exclude the telephone call as
    evidence on the basis, not advanced at trial, that its prejudicial effect
    exceeded its probative value; and

iii.

that the trial judge improperly used the evidence of the telephone call
    in finding the appellants guilt proven beyond a reasonable doubt.

THE BACKGROUND FACTS

[5]

A brief canvass of the circumstances that led to the appellants
    arrest will provide the necessary backdrop.

The Setting

[6]

Valerie Stanley was the landlady of an apartment building in
    Cornwall. Eric Lepage was a tenant.  A condition of Lepages lease required him
    to notify Stanley if anyone else was living in his apartment.  A previous
    occupant of Lepages apartment had been asked to leave because the odour of
    burning marijuana pervaded the building.  Other tenants complained about the
    smell.

[7]

Eric Lepage did not notify Stanley that anyone else had moved
    into the apartment after the previous occupant had been expelled.

The Suspicious Activities

[8]

Eric Lepage left his apartment around 5:30 a.m. and returned from
    his job around 6:00 p.m. each weekday.  Stanley knew about Lepages work-week
    routine.

[9]

On May 11, 2006, Stanley noticed a strange vehicle, a black
    Cadillac, repeatedly entering and leaving the driveway of the apartment
    building.  She approached the driver and asked whether she could help him.  The
    driver told Stanley that he was looking for Lepages roommate. Stanley knocked
    on the door to Lepages apartment.  No one responded. She then told the driver
    of the black Cadillac that no one was at home in Lepages apartment.  Stanley
    drove away.

[10]

Stanley grew increasingly suspicious about the presence of the
    strange automobile around the apartment building. A few minutes later, she
    returned to the apartment building. She saw the black car nearby again and
    noticed that the patio door to Lepages apartment was open although it had been
    closed before.

[11]

Stanley thought that someone might be breaking into Lepages
    apartment.  She called the police to report a suspected break and entry.

The Police Response

[12]

The police responded quickly to Stanleys 911 call. She gave the
    officers a key and permission to enter Lepages apartment.

The Initial Discussion

[13]

Police officers went to the door of Lepages apartment. As they
    entered or were about to enter, the appellant appeared at the door, brushing
    his teeth. The appellant explained that he lived with his uncle, a Cornwall
    police officer, but was staying in the apartment for the rest of the month. He
    told the police that no one else was in the apartment.

[14]

When the officers entered the apartment, they smelled
    freshly-burned marijuana and saw rolling papers and some small buds in an
    ashtray. They flushed the marijuana down the toilet because they were there
    only to investigate a suspected break and entry.

The Search

[15]

To find out whether anybody else was in the apartment, the police
    looked around.  In the master bedroom, they found three people. Adam Peace was
    on a computer.  Chris Anderson and Karyne Sauvé were sitting on the bed. The
    closet of this room was full of clothes and toiletries.

[16]

In a smaller bedroom, police noticed two lazy boy chairs and a
    tote bag containing some clothes. Otherwise, the room appeared unoccupied. When
    the officer opened a closet door in this room, he saw an open safe. In the safe
    was some cocaine.  In a box, the officer found more than a pound of marijuana,
    a digital scale, a spoon to which some cocaine residue adhered, and a debt
    list.

The Arrests

[17]

Investigators arrested everyone in the apartment. Each was
    charged with possession and possession for the purpose of trafficking in
    cocaine and marijuana.  When the appellant was searched as an incident to his
    arrest, officers found $230 in his pocket.  The appellant was also charged with
    possession of the proceeds of crime.  The police also seized the appellants
    cell phone.

[18]

When he returned home from work early in the evening of May 11,
    2006, police arrested Eric Lepage on the same charges laid against the others.

[19]

Investigators released Adam Peace and Karyne Sauvé
    unconditionally after further questioning at the police station.

The Telephone Call

[20]

The cell phone seized from the appellant rang as the lead
    investigator was making a list of the things seized from the apartment and the
    appellant. The officer answered the phone. The caller wanted to speak to the
    appellant and to buy an ounce of weed.  When the officer asked about the
    price, the caller said that the appellant usually charged him $150 for that
    amount. The officer explained that he was running the appellants operation and
    would deliver the weed, as the caller had asked, at the appellants usual
    price.  The officer did not make the delivery nor did the police visit the
    address where the delivery was to be made.

Lepages Account

[21]

Eric Lepage testified as a witness for the prosecution. The
    charges laid against him on May 11, 2006 had not been resolved when he testified
    at the appellants trial.

[22]

According to Eric Lepage, the appellant moved into Lepages
    apartment on May 5 or 6, 2006. The appellant wanted some freedom from the
    restrictions imposed by his uncle.  Lepage did
not
notify Ms. Stanley of
    the appellants occupancy of the appellants second bedroom because Ms. Stanley
    had been away on vacation. Lepage knew Anderson, Peace and Sauvé, but none of
    them had been to his apartment before the appellant arrived a few days earlier.

[23]

Eric Lepage denied having, using or trafficking in cocaine or
    marijuana. He said he knew nothing about the drugs found in the second bedroom
    of his apartment.

The Appellants Version

[24]

The appellant said he had slept at Lepages apartment on May 11, 2006,
    because he and Lepage had been out drinking that night at a local bar. The
    appellants uncle required him to be home by 1:00 a.m. or sleep elsewhere. He
    denied having any difficulty with his uncle or adhering to the rules his uncle
    imposed.

[25]

The appellant testified that he was living with his uncle in May,
    2006.  He was
not
living in Lepages apartment nor did he have any
    property there. The other persons in the apartment when the police arrived,
    Peace, Anderson and Sauvé, had arrived earlier on May 11, 2006.  None of them
    had stayed overnight on May 11, 2006.

[26]

The appellant denied knowledge of the drugs and related
    paraphernalia found in the closet of the second bedroom. He also denied telling
    the police that nobody else was in the apartment when the officers arrived.

THE REASONS OF THE TRIAL JUDGE

[27]

The trial judge accepted Lepages evidence about the appellants
    occupation of the apartment and concluded, on all the evidence, that the
    appellant had knowledge, custody of and control over the drugs and associated
    paraphernalia found in the second bedroom. Trial counsel agreed that the amount
    of drugs found supported the conclusion that possession of the drugs was for
    the purpose of trafficking.

[28]

The trial judge did
not
believe the appellants evidence
    nor did the appellants version of events raise a reasonable doubt in the trial
    judges mind about his guilt. The judge was satisfied, on the whole of the
    evidence, that the appellants guilt had been established beyond a reasonable
    doubt.

THE GROUNDS OF APPEAL

[29]

In his factum, Mr. Davies advanced three grounds of appeal on the
    appellants behalf.  He submitted that the trial judge was wrong in

i
.
admitting into evidence the drug
    purchase call and using it as evidence to     establish the appellants guilt;

ii.       assessing the credibility of
    Lepage and the reliability of his evidence; and

iii.      assessing the credibility of
    the appellant.

[30]

In oral argument, Mr. Davies did not pursue the third ground.  He
    was right not to do so.

Ground #1: The Admissibility and Use of the Drug Purchase Call

[31]

The circumstances in which the drug purchase call took place have
    been described already. Their repetition would serve no useful purpose. Of some
    value, however, is a brief recapture of the positions advanced at trial when
    this evidence was tendered, as well as the use the trial judge made of it in
    reaching his conclusion that the appellants guilt had been proven with the
    necessary degree of certainty.

The Positions at Trial

[32]

When the lead investigator was about to give evidence regarding
    the drug purchase call, counsel for the appellant at trial (who was not Mr.
    Davies) objected on the ground that the evidence was inadmissible hearsay. The
    prosecutor responded that she was not tendering the evidence to prove the truth
    of any matter asserted, but rather to demonstrate the nature of the activity on
    the appellants cell phone and to establish that a telephone request or order
    took place.

[33]

The trial judge admitted the evidence provisionally, not to prove
    that the appellant was trafficking in drugs, but rather as an item of
    circumstantial evidence of drug trafficking. The judge made it clear that he
    would hear further submissions about admissibility after trial counsel had the
    opportunity to review the relevant authorities.

[34]

Trial counsel for the appellant reiterated his hearsay objection
    with little elaboration. He contended that the failure of investigators to go
    to the address specified in the call to determine its legitimacy deprived the
    evidence of any probative value.

[35]

The prosecutor described the telephone call as the strongest item
    of evidence in the case against the appellant. She contended that the call to
    the appellants cell phone seeking an ounce of marijuana was a piece of
    evidence that tended to link the appellant to the drugs found in Lepages
    apartment and the purpose associated with their possession.

The Ruling of the Trial Judge

[36]

In his
Reasons for Judgment
, the trial judge explained the
    basis upon which he had admitted the evidence of the drug purchase call and its
    role in the prosecutors attempt to establish the appellants guilt:

Earlier in this trial, I held that the evidence of the drug
    call was admissible evidence relying on the authorities of
R. v. Ly
[1997]
    3 S.C.R. 698 and
R. v. Edwards
(1994) 91 C.C.C. (3d) 123 (Ont. C.A.).

Whether these calls can be referred to as admissible hearsay or
    simply statements of state of mind, the law holds that they are admissible as
    circumstantial evidence to indicate a person engaged in drug trafficking. They
    are not tendered in evidence for the truth of the fact that the individual
    phoning is in fact the individual whom the individual states to be or that the
    individual in fact will carry out the trafficking of the drugs. As stated, it
    is circumstantial evidence of an individual engaged in the trafficking of
    drugs.

The Positions on Appeal

[37]

For the appellant, Mr. Davies submits that the threshold issue to
    decide is whether the drug purchase call is hearsay. He says that the call is
    an implied assertion that the appellant is a drug dealer. And according to the
    House of Lords in
R. v. Kearley
, [1992] 2 A.C. 228, implied assertions
    are hearsay.

[38]

Mr. Davies acknowledges that Canadian authorities such as
R.
    v. Edwards
(1994), 19 O.R. (3d) 239 (C.A.), affirmed, [1996] 1 S.C.R. 128;
R. v. Nguyen

(2003), 180 C.C.C. (3d) 347 (B.C.C.A.), at para.
    17; and
R. v. Ly
, [1997] 3 S.C.R. 698, at para. 3, characterize drug
    purchase calls as non-hearsay.

[39]

Mr. Davies contends that if the drug purchase call in this case
    is characterized as hearsay, the evidence is presumptively inadmissible. No
    listed or principled exception would permit its admission. On the other hand,
    if the evidence is characterized as non-hearsay, it should have been excluded
    because its probative value as non-hearsay is overborne by its prejudicial
    effect.

[40]

For the respondent, Mr. Puddington says that the drug purchase
    call is rightly characterized and admitted as non-hearsay. The decision in
Kearley
does not reflect Canadian law.  We characterize implied assertions as
    non-hearsay. The trial judge was never asked to exclude the evidence on the
    ground that its prejudicial effect exceeded its probative value. In any event,
    the trial judges reasons reflect no improper use of this evidence.

The Governing Principles

[41]

The issue the appellant raises concerns the admissibility of a
    single drug purchase call made to the appellants cell phone shortly after his
    arrest. In a prosecution for possession of controlled substances for the
    purpose of trafficking, drug purchase calls are relevant and material. Whether
    evidence of drug purchase calls should be received at trial depends upon
    whether their reception is generally barred by the hearsay rule.

[42]

The authorities that consider whether drug purchase calls are
    reached by the hearsay rule, or if they are, whether the calls should be
    admitted by exception or excluded on some other basis do not achieve even the
    most modest level of consistency or clarity.  In the faint hope that these
    reasons will achieve one or the other, it is helpful, as always, to return to basics.

The Identification of Hearsay

[43]

The value of testimony depends on four factors:

i.        perception;

ii.       memory;

iii.      narration;
    and

iv.      sincerity

Kenneth S. Broun et al., 2
McCormick on Evidence
,
    (6th ed.) (USA: Thomson/West, 2006), §245, at p. 125

[44]

To encourage witnesses to make their best efforts and to expose
    inaccuracies that might be present due to any of these factors, we impose three
    conditions under which witnesses are required to testify, at least as a general
    rule:

i.        the oath or similar
    equivalent;

ii.       personal
    presence at trial; and

iii.      cross-examination.

The hearsay rule seeks to ensure compliance with these
    essential conditions. When any of the conditions is absent, the hearsay rule
    may form the basis for exclusion of the evidence.

[45]

In the paradigmatic hearsay situation, two witnesses are
    involved. One, an in-court witness, meets all three ideal conditions for giving
    the testimony, but simply recounts or repeats what the second witness said.
    The second witness, the first-hand observer, is the out-of-court declarant
    whose statement, as reported by the in-court witness, complies with none of the
    ideal conditions, but contains the critical information.

[46]

In cases like this, where the prosecutor introduces, in court,
    through one person what another person said out of court, four elements are
    involved in the determination of whether the hearsay rule is engaged:

i.        a declarant;

ii.       a
    recipient;

iii.      a
    statement; and

iv.      a purpose

[47]

When the hearsay rule is offered as an objection to the
    admissibility of an item of evidence that is both relevant and material, a
    critical first step, regrettably overlooked with unwarranted haste in many
    instances, is whether the proposed evidence is actually hearsay.  Every
    out-of-court statement is not hearsay:
R. v. Khelawon
, 2006 SCC 57,
    [2006] 2 S.C.R. 787, at para. 56.

[48]

In most cases where the hearsay rule is offered as a bar to the
    admissibility, no controversy will surround the first two elements and little
    more controversy, the third. The
declarant
is the maker of the
    out-of-court statement. The
recipient
is the person to whom the
    declarant spoke, or at least someone who overheard the declarant speak, and a
    witness in the proceedings. The
statement
is what was said or written,
    the precise words of which or whether anything was said, may be controversial.

[49]

The critical defining feature of the exclusionary hearsay rule is
    the
purpose
for which the declarants statement is being introduced
    through the recipient, a witness at trial. Did the declarant want the recipient
    to act on the statement, to do something as a consequence of what the declarant
    said? Or, did the declarant want the recipient to do or not do something on the
    basis that the statement was true?

[50]

The hearsay rule is only engaged where the purpose for which the
    statement is offered is to prove the
truth
of what was said. If the
    purpose of introducing the statement is
not
to prove the truth of its
    contents, but rather, for example, to show that the recipient had notice,
    knowledge or motive, then the hearsay rule is not implicated and will not bar
    admissibility. Where the statement is tendered to prove the
truth
of its
    contents, however, the hearsay rule renders the statement presumptively
    inadmissible. The statement may only be admitted under a traditional or the
    principled exception to the exclusionary rule:
Khelawon
, at para. 42.

Implied Assertions

[51]

The concept of an implied assertion is, at best, a somewhat
    unfortunate expression.
[1]
It has also been described as a legalistic backwater  the home of sophistry
    and the graveyard of common sense.
[2]

[52]

An implied assertion is a statement
not
intended by the
    declarant to be assertive of the fact it is tendered to prove.  For example, to
    assist in proving X was present at a place at a certain time, a witness
    testifies that she or he heard someone at the place and time say Hello X.

(i)

Drug Purchase Calls as Implied Assertions

[53]

Canadian courts have dealt with evidence of drug purchase calls
    and determined their admissibility in the context of objections taken on
    hearsay grounds. Reference to implied assertions, and whether implied
    assertions fall within or are not reached by the hearsay rule, has played
    little or no role in these decisions. Treating the callers requests as
    implicitly asserting the fact that D was a supplier of drugs would constitute
    an implied assertion.

[54]

Out-of-court statements that
directly
assert a fact,
    offered through the recipient to prove that fact, are hearsay and presumptively
    inadmissible. A canvas of the authorities that consider whether implied
    assertions, in particular drug purchase calls, fall foul or escape the grasp of
    the hearsay rule reveals mixed results, often without any principled analysis.

(ii)

The Canadian Authorities

[55]

In
Edwards
, police seized a cell phone and pager
    belonging to the appellant. In the several hours following the seizure, police
    received several pager messages and telephone calls. When the police answered
    the telephone or returned the pager message, many of the individuals asked for
    the appellant. Some asked for crack cocaine. The trial judge admitted the
    evidence as non-hearsay to demonstrate the nature of the business in which the
    appellant was involved.

[56]

This court dismissed Edwards appeal on the issue of the
    admissibility of the cell phone calls. McKinlay J.A. whose judgment on the
    issue is that of the majority, concluded at pp. 248-249:

With respect to the issue of hearsay, the trial judge
    held that the evidence was not tendered for the truth of its contents, but to
    show the nature of the business carried on by the appellant. I agree. In this
    case the requests for drugs would only constitute hearsay evidence if they were
    tendered to show that the callers did, in fact, desire to purchase crack
    cocaine. However, the real issue is not whether such requests contained truths
    or falsehoods, but whether they were in fact made. In this case the fact that
    the requests were made can only be relevant to determining the nature of the
    activities of the appellant, who was intended to respond to the requests: see
R.
    v. Fialkow
, [1963] 2 C.C.C. 42 at p. 44, 40 C.R. 151 (Ont. C.A.).

However, even if these requests could be considered
    hearsay, the Supreme Court of Canada has recently in
R. v. Khan
,
    [1990] 2 S.C.R. 531, 59 C.C.C. (3d) 92, and in
R. v. Smith
, [1992], 2
    S.C.R. 915, 75 C.C.C. (3d) 257, adopted the dissenting reasons of Lord Donovan
    in
Myers v. Director of Public Prosecutions
, [1965] A.C. 1001, [1964]
    1 All E.R. 877 (C.C.A.), expanding the exceptions to the hearsay rule to
    include evidence which is both necessary and reliable.  In my view, the
    evidence in issue fulfils these criteria. It was necessary to prove the nature
    of the appellants drug activities, and they could not have been proven in this
    case in any other was that was available to the police. They did not know the
    identity of the callers, and, in any event, it is unlikely the callers would
    have testified if their identity had been known. The evidence is reliable,
    because it was made under circumstances which negate the possibility that the
    requests were spurious ones. The callers were led to believe that the persons
    to whom they were speaking (the police) were speaking on behalf of the
    appellant.

The decision of the majority was affirmed on other
    grounds by the Supreme Court of Canada.

[57]

In
R. v. Wilson
(1996), 29 O.R. (3d) 97 (C.A.), a police
    officer testified that while at the appellants apartment executing a search
    warrant, a man came to the door, asked for Rob and sought to buy some drugs.
    The trial judge admitted the evidence on the basis of
Edwards
.  This
    court disagreed. At pp. 104-105, McMurtry C.J.O. wrote:

In the case before us, it was dangerous to allow into evidence
    the police officers testimony that one individual had attended at the
    appellants apartment seeking to buy drugs. The problem is best illustrated by
    an excerpt from the trial judges charge:

Obviously you would not and could not convict a person of
    being a drug trafficker only on the evidence that someone came to his door
    looking for him and wishing to buy drugs from him.  That certainly would not be
    an appropriate conviction if it was based on that evidence alone. Anyone could
    do that or could be put up to doing that for a variety of reasons, some
    legitimate, some not. That evidence alone therefore would not justify a
    conviction. However, you are entitled to consider that evidence in conjunction
    with all of the other evidence with respect to the nature of the accuseds
    activities in the apartment and if the totality of all of the evidence
    convinces you of the accuseds guilt then so be it. If on the other hand you
    conclude that the totality of the evidence [against] the accused is
    unconvincing or if it raises a reasonable doubt then of course you will find
    him not guilty because it would be unsafe and inappropriate to convict on the
    basis of the hearsay evidence alone.

It would be unsafe to convict on this type of hearsay evidence
    alone, or together with other evidence. It should, therefore, not have been
    admitted into evidence.

[58]

In
R. v. Lucia
, 2010 ONCA 533 police seized a cell phone
    from the appellant when they arrested her for possession of cocaine for the
    purpose of trafficking.  A police officer answered two calls from persons who
    asked about the purchase of crack cocaine.  The court concluded in para. 7:

In our view, the evidence was not tendered for the truth of
    the statements made by the caller on the telephone but as circumstantial
    evidence of the nature of the business carried on by the appellant.  The
    evidence was therefore admissible.

[59]

In British Columbia, the prevailing view seems to be that drug
    purchase calls are non-hearsay:
R. v. Cook
(1978), 46 C.C.C. (2d) 318
    (B.C.C.A.), at p. 320; and
R. v. Nguyen

, 2003 BCCA 556, 180
    C.C.C. (3d) 347 (B.C.C.A.),  at paras. 11 and 17.

[60]

In
R. v. Ly
,
[1997] 3 S.C.R. 698, the
    only issue raised on an appeal as of right was the admissibility of a
    conversation between an unidentified person and a police officer, in which the
    unidentified person arranged to deliver drugs to the police officer at a
    designated time and place. The trial judge had excluded the evidence as
    hearsay. The Alberta Court of Appeal ordered a new trial on an appeal by the
    Crown. In a brief oral judgment, the Supreme Court of Canada concluded that the
    evidence was non-hearsay.  McLachlin J. said at para. 3:

The telephone conversation was admissible. It was a statement
    of intention, or a statement tendered to establish the alleged drug
    transaction, and hence not tendered for the truth for its contents.
    Accordingly, it was not hearsay. The telephone conversation is merely one of
    the circumstances which, combined with others, may suffice to establish that
    the appellant, when he appeared at the designated time and place, in possession
    of the drugs, did so for the purpose of trafficking. Any frailties in relation
    to the connection between the appellant and the telephone conversation go to
    weight and not admissibility.

(iii)

The U.K.
    Authorities

[61]

In
Kearley
, a majority of the House of Lords concluded
    that drug purchase calls were inadmissible hearsay. For the majority, it made
    no sense to permit the prosecution to escape the rigours of the hearsay rule
    simply because the declarants words implied, rather than expressly stated, a
    particular fact. The minority thought that the majoritys decision defied
    common sense and preferred to characterize the calls as circumstantial evidence
    from which the jury could infer that Kearley was a drug dealer.

[62]

The majority decision in
Kearley
has been repeatedly
    criticized and was statutorily overtaken by the enactment of the
Criminal
    Justice Act 2003
. Implied assertions are no longer excluded as hearsay:
R.
    v. Singh
, [2006] E.W.C.A. Crim 660; and
R. v. Twist
, [2011]
    E.W.C.A. Crim 1143.

(iv)

Australia

[63]

Prior to the decision of the High Court in
Walton v. The
    Queen
(1989), 166 C.L.R. 283, the balance of Australian authority favoured
    the view that the hearsay rule, while strict in its application, did
not
extend to implied assertions. In
Walton
, however, and in later cases
    following its lead, the High Court altered course in favour of the view that
    the hearsay rule did extend to implied assertions. Some members of the court
    favoured a flexible approach to admissibility rooted in reliability.  In
Bannon
    v. The Queen
(1995), 185 C.L.R. 1, the Court affirmed the applicability of
    the hearsay rule to implied assertions, but retrenched to a strict approach to
    admissibility.

[64]

More recently, statutory authority has altered the landscape in
    Australia as it did in the United Kingdom.  Under the uniform
Evidence Acts
,
    the hearsay rule expressly does
not
extend to implied assertions: see,
    C.R. Williams, Implied Assertions in Criminal Cases, (2006), 32 Monash U.L.
    Rev. 47, at p. 64.

(v)

The United States

[65]

Under the
Federal Rules of Evidence
, Rule 801 enacts
    several definitions that apply to Article VIII, Hearsay. Rule 801(a) defines a
    statement as an oral or written assertion or nonverbal conduct of a person,
    if it is introduced by the person as an assertion. The term assertion is not
    defined. Rule 801(d) defines hearsay as a statement, other than one made by
    the declarant while testifying at the trial or hearing, offered in evidence to
    prove the truth of the matter asserted.  Rule 802 enacts a general
    exclusionary rule: hearsay is
not
admissible except as the
Federal
    Rules of Evidence
or other rules prescribed by the Supreme Court permit
    its reception.

[66]

The hearsay definition in Rule 801 of the
Federal Rules of
    Evidence
is in effect in the federal courts in the United States. The
    definition, which is followed as well by most States, consists of two major
    elements:

i.        a
    statement;

ii.       offered
    to prove the truth of an assertion

The definition is affirmative in its form.  Under it,
    an out-of-court
assertion
, offered to prove the
truth
of the
    matter asserted, is hearsay:
McCormick on Evidence
, §246, at pp.
    128-129.

[67]

The definition of hearsay in Rule 801(c) does not say, in
    terms, that everything not included in the definition is not hearsay, but,
    according to the Advisory Committees Note, that was the intended effect of the
    rule:
Adv. Comm. Note, Fed. R. Evid. 801(a); McCormick on Evidence
,
    §246, at p. 129.  In other words, according to the rules definition,
    out-of-court conduct, whether verbal or non-verbal, is not hearsay if it is
not

an assertion or, even if it is assertive, if it is
not
offered to
    prove the truth of the matter asserted.  Nothing is an assertion unless it is
    intended by the declarant to be an assertion. And nothing is hearsay unless it
    is an assertion and offered to prove the truth of what is asserted.

The Principles Applied

[68]

I would not accede to this ground of appeal.

[69]

Whether implied assertions, in particular drug purchase calls,
    should be characterized as hearsay or viewed as non-hearsay is an issue that is
    neither free from difficulty nor the subject of principled analysis in our
    jurisprudence.  For the most part, evidence of drug purchase calls seems
    generally to be admitted, either as non-hearsay or as hearsay that is both
    necessary and reliable.

[70]

In Ontario, the preponderance of authority favours the conclusion
    that evidence of drug purchase calls is non-hearsay, circumstantial evidence of
    the nature of the business carried on by the person charged:
Lucia
, at
    para. 7;
Edwards
, at pp. 248-249. That said, in
Edwards
,
McKinlay J.A. went on to hold that, even if the evidence should be considered
    hearsay, it was admissible as necessary and reliable:
Edwards
at p.
    249.

[71]

In
Wilson
, this court concluded that evidence of a
    single request to buy drugs formed an unsafe basis upon which to convict
    Wilson. The court referred to this type of hearsay evidence and appeared to
    place particular emphasis on the fact that the evidence revealed a single call,
    unlike
Edwards
where evidence of several calls had been adduced.

[72]

Whether evidence of drug purchase calls is non-hearsay or hearsay
    does not depend on the number of calls of which evidence is given. The evidence
    is either hearsay or it is not. Critical to a proper characterization is a
    determination of the
purpose
for which the evidence is adduced, not the
    number of calls involved.

[73]

A review of the reasons of this court in
Wilson
also makes
    it clear that the discussion of the admissibility of the drug purchase request
    was
obiter
because the court had already concluded that the failure of
    the trial judge to permit a challenge for cause vitiated the appellants
    conviction. Further, the decision in
Wilson
appears to have been
    overtaken by the decision of the Supreme Court of Canada in
Ly

that
    held evidence of a single drug purchase call was admissible as non-hearsay:
Ly
,
    at para. 3.

[74]

The appellant grounds his case for the characterization of the
    evidence of the drug purchase call as hearsay on the reasoning of the majority
    of the House of Lords in
Kearley
.

[75]

Setting to one side the statutory reversal of
Kearley

by the
Criminal Justice Act 2003
, it is worth notice that in a
    Scottish appeal soon after
Kearley
was decided, Lord Hope indicated
    approval of the dissenting speeches in
Kearley
.
He concluded
    that the existence of a pool of customers seeking to buy drugs from Kearley was
    direct evidence of a relevant fact. This conclusion, Lord Hope said, would
    cause no surprise in Scotland:
Lord Advocates Reference
[No. 1 of
    1992] 1992 S.C.C.R. 724, at p. 741.

[76]

Some have argued that the majoritys reasoning in
Kearley
collapses quickly into a
reductio ad absurdum

according to
    which virtually all evidence of out-of-court statements could be argued to be
    hearsay, thus rendering the exclusionary rule against hearsay a nonsense: see,
    for example, Paul Roberts and Adrian Zuckerman,
Criminal Evidence
,
(Oxford: Oxford University Press, 2004), at p. 590. Others have described the
    exclusion of this highly probative evidence of drug purchase calls as a
    technical and counter-intuitive application of the hearsay rule: Ian Dennis
,
The Law of Evidence
(2
nd
ed.) (London: Sweet and
    Maxwell, 2002), at p. 569.

[77]

The rule excluding hearsay is intended to enhance the accuracy of
    the courts findings of fact by ensuring that only reliable evidence is
    received. The central reason for the presumptive exclusion of hearsay is the
    general inability to test its reliability:
Khelawon
, at para. 2.
    Hearsay evidence may be admitted, however, if, because of the way in which it
    came about, its contents are trustworthy, or if circumstances allow the trier
    of fact to sufficiently assess its worth:
Khelawon
, at para. 2.

[78]

The defining features of hearsay are the fact that the
    declarants statement is adduced to prove the truth of its contents and the
    absence of contemporaneous opportunity to cross-examine the declarant:
Khelawon
,
    at paras. 35 and 56.

[79]

The value of
viva voce
testimony depends on four
    factors:

·

perception

·

memory

·

narration

·

sincerity

The principal justification for the exclusionary rule
    about hearsay is the lack of opportunity to cross-examine the declarant, thus
    to inquire into his or her perception, memory, narration and sincerity.

[80]

To focus the admissibility inquiry in this case, we must recall
    the defining features of hearsay. An out-of-court statement, like the drug
    purchase call, will be hearsay and presumptively inadmissible when:

i.        the statement is adduced to
    prove the
truth
of its contents; and

ii.       no opportunity
    exists for a contemporaneous cross-examination of the declarant.

Khelawon,
at para. 56.

[81]

In this case, the prosecutor did not introduce the drug purchase
    call to prove the truth of its contents.  A telephone call is evidence of
    conduct in words.  The conduct is carried out by use of a telephone. The call
    was
relevant
to show the nature of the business carried by the
    appellant. The nature of that business was a
material
issue in the
    prosecution of the appellant. The caller wanted to buy drugs. The conduct of
    the buyer was an item of evidence, which, together with other items of
    evidence, may help to establish the nature of the appellants business, the
    purpose for which he had various controlled substances in his possession.

[82]

The extension of the hearsay rule to implied assertions, to some
    extent at least, depends upon the extent to which the testimonial dangers,
    inherent in express hearsay, exist for implied assertions. The dangers of
    faulty perception and erroneous memory on the declarants part may not be
    appreciably different for implied assertions than for express assertions. The
    danger of lack of sincerity would not seem a significant risk in connection with
    implied assertions.  But narration, and in particular, ambiguity, may present
    an enhanced danger for implied assertions, an inevitable consequence of the
    inference-drawing process.

[83]

On the other hand, it is nearly always possible to
impute
an assertion to all kinds of evidence, including oral statements, non-verbal
    conduct, even real evidence. A commonplace example will suffice. A witness
    testifies that he looked out his window and saw people in the street putting up
    their umbrellas. Is this admissible evidence from which a jury may infer that
    it had started to rain, or inadmissible hearsay because it comprises implied
    assertions of this fact by the passers-by, who are not called as witnesses?  To
    adopt the latter view is to
impute
an assertion to the passers-by
    when, in reality, they are making no assertion about the weather, implied or
    otherwise. Just like drug purchase callers who do not intend to assert anything
    about the recipient, the passers-by have no intention of making any statement
    about the weather. They are simply putting up their umbrellas, presumably to
    shelter from the rain.

[84]

In this case, a caller telephoned the appellants cell phone to
    arrange a drug delivery  a specific quantity, of a specific drug, for an
    agreed upon price.  Consistent with prior decisions, such as
Edwards, Lucia

and
Ly
, the trial judge admitted the evidence as non-hearsay.  His
    conclusion is also consistent with earlier decisions of this court in betting
    house cases: see, for example,
R. v. Owad
(1951), 102 C.C.C. 155 (Ont.
    C.A.), at p. 166; and
R. v. Fialkow
, [1963] 2 C.C.C. 42 (Ont. C.A.),
    at p. 44.  In my view, he committed no error in doing so.

[85]

Feldman J.A. criticizes the trial judge for failing to follow the
    sophisticated approach to allow hearsay statements to be admitted into
    evidence when it is fair to do so, based on the criteria of necessity and
    reliability.  With respect, I do not agree.

[86]

The threshold issue for the trial judge to determine in this case
    was whether the telephone call was hearsay.  The necessity/reliability analysis
    has nothing to offer on this threshold issue of classification.  Search for an
    exception, whether listed or principled, thus the need for
    necessity/reliability analysis, is pertinent only when the evidence is
    hearsay.  Absent classification of the evidence as hearsay, the exclusionary
    rule does not apply.  Absent operation of the exclusionary rule, the search for
    an exception is beside the point.

[87]

Feldman J.A. says that in earlier disorderly house cases what
    the courts were effectively doing was performing a necessity/reliability
    analysis on the evidence.  I disagree for two reasons.

[88]

First, my colleagues observations confuse the
    necessity/reliability analysis applicable to the principled exception to
    hearsay, with the overarching discretion to exclude otherwise admissible
    evidence on the ground that its prejudicial effect predominates over its
    probative value.  We have yet to recognize an exclusionary rule of general
    application, or an inclusionary rule grounded in necessity and reliability.

[89]

Second, the earlier authority to which Feldman J.A. refers,
R.
    v. Owad
(1951), 102 C.C.C. 155 (Ont. C.A.), was decided at a time before
    the probative value/prejudicial effect discretion balance was set as at
    present: see,
R. v. Wray
, [1971] S.C.R. 272, at pp. 293; and 299-300.

[90]

Feldman J.A. takes issue with the decisions in
Edwards, Ly

and
Lucia

for their failure to analyze the evidence of
    telephone calls as an implied assertion. She says that
Wilson
is the
    controlling precedent. Yet, the
obiter
statement she invokes in
Wilson
to conclude that the evidence is hearsay itself contains no analysis of implied
    assertions and is bookended by other authorities from this court, as well as
    the brief judgment of the Supreme Court of Canada in
Ly
, that characterize
    this evidence as non-hearsay.

[91]

To determine that a drug purchase call is non-hearsay does not
    end the inquiry into its admissibility.  Evidence that is relevant, material
    and not excluded by the hearsay rule may be excluded where its prejudicial effect
    is out of proportion to its probative value
Khelawon
, at para. 49.

[92]

Trial counsel did not ask the trial judge to exclude the evidence
    of the telephone call on the basis that its prejudicial effect exceeded its
    probative value.  In closing submissions, experienced trial counsel contended
    that the evidence should be assigned no weight because the police made no
    effort to confirm the legitimacy of the call by attending the premises to which
    the delivery of weed was to be made.  Counsel also suggested that the call
    might never have occurred.

[93]

I do not contest the obligation of a trial judge in a criminal
    case to ensure that only relevant, material and admissible evidence makes its
    way into the trial.  Nor do I dispute the self-evident proposition that a trial
    judge is not entitled to ground his or her findings of fact, including a
    determination of the ultimate issue of guilt or innocence, on evidence that is
    irrelevant, immaterial or inadmissible.  That said, trial judges are entitled
    to expect that counsel appearing at trial will object to the admissibility of
    evidence that falls foul of an exclusionary rule.

[94]

My colleagues suggest that had the trial judge applied the
    probative value/prejudicial effect analysis to the evidence of the telephone
    call, he would inevitably have excluded the evidence.  I do not agree.  A
    determination of whether probative value or prejudicial effect predominates in
    connection with otherwise admissible evidence involves the exercise of judicial
    discretion and a consideration of all the circumstances of the case.  Each case
    is unique.  Reasonable people may differ about the appropriate conclusion.

[95]

My colleagues conclusion that the trial judge erred in failing
    to exclude evidence of the telephone call, either as inadmissible hearsay or as
    otherwise admissible evidence the prejudicial effect of which exceeded its
    probative value, segues into their determination that a new trial is required.
    Once again, I disagree.

[96]

The critical issue in this case was the identity of the person in
    possession of the drugs and related commercial paraphernalia found in the
    apartment leased to Lepage.  It was common ground at trial that whoever had
    possession of the drugs had them for the purpose of trafficking.

[97]

The appellant denied that he was living in Lepages apartment.
    He claimed that he had stayed there the previous evening because he had been
    out drinking with Lepage and others and could not return to his uncles home
    where he was living because of a strict curfew his uncle imposed.  The trial judge
    rejected the appellants evidence.

[98]

In his review of the evidence adduced at trial, the trial judge
    referred to the telephone call that he had admitted as non-hearsay.  But in
    reaching his conclusion about the essential elements of possession, the trial
    judge made no reference to the call as an inculpatory circumstance in
    establishing the critical features of knowledge and control.  The evidence to
    which he referred provided ample support for his conclusion.

[99]

In the end, even if my colleagues are correct and the evidence of
    the telephone call should not have been admitted, the trial judges findings on
    the critical issues of knowledge and control betray any express reliance on the
    telephone call as a piece of evidence supportive of his conclusions.  Nor am I
    prepared to impute to the trial judge from his earlier reference to the
    telephone call in a recital of the evidence adduced at trial, his reliance upon
    it making the findings of fact essential to proof of guilt.  In my view,
    reading the reasons of the trial judge as a whole confirms that he found guilt
    established on the basis of the cumulative effect of several items of
    circumstantial evidence independently of the evidence of the telephone call.  A
    finding of guilt made independently of evidence said to be inadmissible works
    no unfairness and causes no miscarriage of justice:
R. v. Khan
, 2011
    SCC 86, [2001] 3 S.C.R. 823, at para. 30;
R. v. OBrien
2011 SCC 29,
    [2011] 2 S.C.R. 485, at para. 15;
R. v. Côté
, 2011 SCC 46, [2011] 3
    S.C.R. 215, at para. 63.

[100]

I would not give effect to this ground of appeal.

Ground #2:  The Failure of the Trial
    Judge to Subject Lepages Evidence to
Vetrovec
Scrutiny

[101]

The second ground of appeal advanced by Mr. Davies on the
    appellants behalf related to the trial judges assessment of the credibility
    of a principal prosecution witness, Eric Lepage, and the reliability of his
    evidence that implicated the appellant in possession of the controlled
    substance as charged. The essence of the submission is that the trial judge
    erred when he failed to apply
Vetrovec
principles to the evidence of
    Lepage.

The Positions at Trial

[102]

The appellants counsel at trial contended that Lepage was an
    accomplice, thus his evidence should be subject to scrutiny in accordance with
Vetrovec
.
    After all, trial counsel submitted, Lepage leased the apartment where the drugs
    were found and was himself charged with the same offences for which the
    appellant was being tried.

[103]

The trial Crown appears not to have made any express reference to
Vetrovec
in her submissions to the trial judge. She did submit,
    however, that the outstanding charges against Lepage did not provide a motive
    for Lepage to falsely implicate the appellant although withdrawal of those
    charges might have done so.

The Reasons of the Trial Judge

[104]

After summarizing the substance of Lepages evidence, the trial
    judge declined to instruct himself in accordance with
Vetrovec
principles in connection with Lepages evidence. The judge concluded that
    Lepage, who did
not
use drugs or consume alcohol, was
not
an
    accomplice in the offences charged. He had expelled his prior roommate, his
    cousin, because of the cousins drug use and nuisancy behaviour.

[105]

After he rejected the submission that he should apply
Vetrovec
principles to the testimony of Lepage because he was an accomplice, the trial
    judge said:

Even were I to approach Mr. Lepages evidence with caution, I
    would still believe his testimony.  He was challenged, for example, on the
    suggestion that he owned a video game.  He stated he did not own a video game.
    I find that the video game used in the living room while Sergeant Martelle was
    searching the premises belonged to Mr. Baldree. This is confirmed by Mr.
    Baldrees own uncle who testified that Mr. Baldree owned video games that he
    kept in his basement room.

Suffice to say, I found that Mr. Lepage did not give his
    evidence as a result of any untoward offers made by the Crown. I found that his
    evidence was forthright and believable.

The Governing Principles

[106]

In
R. v. Vetrovec
, [1982] 1 S.C.R. 811, at pp. 825 and
    830, the Supreme Court of Canada made it clear that accomplices occupy no
    special category of witness that
requires
utterance of some
    ritualistic incantation about the dangers of the trier of fact finding guilt on
    the basis of their evidence without corroboration of it. As a matter of common
    sense, something in the nature of confirmatory evidence should be found before
    the trier of fact relies upon the evidence of a witness whose testimony
    occupies a central position in the prosecutors attempt to demonstrate guilt,
    and yet may be suspect because the witness is an accomplice, a complainant or a
    person of disreputable character. In that case, a trial judge may provide to
    the jury or to him or herself a clear and sharp warning about the risks of adopting,
    without more, the evidence of the witness:
Vetrovec
, at pp. 831-832.

[107]

Whether a trial judge provides the jury or her or himself with a
Vetrovec

caution lies within the discretion of the trial judge:
R. v. Potvin
,
    [1989] 1 S.C.R. 525, at p. 557;
R. v. Bevan
, [1993] 2 S.C.R. 599, at
    p. 612; and
R. v. Brooks
, 2000 SCC 11, [2000] 1 S.C.R. 237, at para.
    3. Appellate courts should give wide latitude and afford deference to trial
    judges decisions about whether to give a
Vetrovec

warning:
Bevan

at p. 613.

The Principles Applied

[108]

I would not give effect to this ground of appeal.

[109]

The basis advanced at trial for the
Vetrovec

warning
    was twofold. The prosecution witness Lepage was charged with the same offences
    as the appellant. The charges against Lepage remained outstanding against him
    when he testified for the prosecution at the appellants trial. Thus, according
    to the appellant, Lepage had a strong motive to give evidence exculpatory of
    himself and inculpatory of the appellant. Such evidence would secure the
    appellants conviction and withdrawal of the charges against Lepage.  It was
    Lepages position as an accomplice that engaged the requirement of a
Vetrovec

self-instruction.

[110]

The trial judge appreciated that he had a discretion whether to
    provide a
Vetrovec

self-instruction about the testimony of
    Lepage. He understood and considered the basis upon which the argument was being
    advanced  that Lepage was an accomplice. He concluded, as he was entitled to
    do, that Lepage was
not
an accomplice. The record reveals no other basis
    upon which Lepages evidence would attract a
Vetrovec

warning.

[111]

The trial judge also pointed out that, even if he were to have
    approached the testimony of Lepage with caution, he would have believed it,
    nonetheless, and would have been prepared to act upon it.

[112]

This ground of appeal fails.

CONCLUSION

[113]

For these reasons, I would dismiss the appeal.

Signed: David
    Watt J.A.

Feldman
    J.A.:

[114]

I
    have had the benefit of reading the reasons of Watt J.A., and on the hearsay
    issue, I respectfully disagree. The question of whether the contents of a phone
    call constitute implied hearsay has been the subject of judicial debate and
    disagreement in a number of Commonwealth jurisdictions, in the U.S. and in Canada and particularly in Ontario.

[115]

In
    some of those jurisdictions where the courts have held that such evidence does
    constitute implied hearsay, such as England, legislation has been introduced to
    make such evidence admissible. That has not occurred in Canada, where we have developed a sophisticated approach to allow hearsay statements to be
    admitted into evidence when it is fair to do so, based on the criteria of necessity
    and reliability. (
R. v. Khelawon
, [2006] 2 S.C.R. 787).

[116]

That
    was not the approach taken by the trial judge in this case. Nor did he consider
    whether the evidence should have been excluded because of its prejudicial
    effect as compared with its minimal probative value as circumstantial evidence
    of one phone call from a person not called to testify and be cross-examined. In
    any event, the evidence the Crown sought to admit was circumstantial evidence
    that drug trafficking was being carried on, when that was an admitted fact. The
    issue in the case was identity and the contents of the phone call spoke
    directly to that issue. The contents of the call were admitted as evidence that
    it was the appellant who was involved in drug dealing, effectively answering
    that issue.

Factual Context

[117]

In
    order to place the legal analysis in context, it is essential to set out the
    full content and circumstances of the cell phone call. Officer Martelle
    testified that he seized a cell phone from the appellant upon his arrest. He
    also seized one from one of the other people who was arrested, Chris Anderson.
    When they got to the police station, both phones were ringing. Officer Martelle
    answered the phone seized from the appellant and said hello. I quote the rest
    of the testimony:

A male voice on the other end of the, of the phone advised that
    he was at 327 Guy Street and that he was a friend of Megan and asked for Chris.
    Knowing that there were two Chris that I had just arrested, I asked, Chris
    who? and the male advised, Baldree and requested one ounce of weed. I then
    stated that I was running the show here and that Mr. Baldree was not here and I
    was gonna take his

[interruption by the trial judge]

He asked for one ounce of weed. I then asked him how much Chris
    charges him, he says he pays $150. I then advised him I would deliver same, 327
    Guy, and that was the end of the conversation.

[118]

Although
    they knew his address, the police never investigated the caller at 327 Guy.

[119]

When
    the trial Crown sought to tender the evidence of the cell phone conversation,
    defence counsel objected on the ground that it was hearsay. The trial Crown
    told the court that she was asking that it be entered, simply to demonstrate
    the activity on the cellular phone and not for the truth of its content in that
    the caller  what he was requesting, that he was actually requesting the
    product, but that the telephone call placing the order was made on the
    telephone.

[120]

The
    trial judge received submissions from both counsel and references to case law,
    following which he admitted the evidence, stating:

Its not admitted for the proof of the fact that your client is
    a drug trafficker, its admitted for proof of the fact, its circumstances that
    your client might have been involved in the trafficking of drugs.

[121]

However, in her closing submissions, Crown counsel referred to
    the phone call as the strongest piece of evidence in the following excerpt:

And
    when you look at all of the twelve items I asked the Court to consider at the
    beginning, the last of them,
the strongest of all,
the cell phone call with the first and last name
    given where an order for an ounce of marijuana is placed to the cell of Chris
    Baldree, thats who the caller identifies, and what does Chris normally charge
    for an ounce of weed? $150.

When
    you look at the evidence as a whole, Your Honour, I would ask the court to find
    that there is no other inference that can be drawn, that the Crown has proven
    its case beyond a reasonable doubt on the proven facts before you. [Emphasis
    added.]

[122]

In
    his reasons for conviction, the trial judge again referred to the basis for
    admitting this evidence. He recited the entire phone conversation including the
    officers inquiry of which Chris, the response that it was Chris Baldree, the
    officers further inquiry as to how much he had paid previously for an ounce
    and the answer of $150. The trial judge then explained the basis for admitting
    the evidence:

Earlier in the trial, I held that the evidence of the drug call
    was admissible evidence relying on the authorities of
R. v. Ly
, [1997]
    3 S.C.R. 698 and
R v. Edwards
(1994), 91 C.C.C. (3d) 123 (Ont. C.A.).

Whether these calls can be referred to as admissible hearsay or
    simply statements of state of mind, the law holds that they are admissible as
    circumstantial evidence to indicate a person engaged in drug trafficking. They
    are not tendered in evidence for the truth of the fact that the individual
    phoning is in fact the individual whom the individual states to be or that the
    individual in fact will carry out the trafficking of the drugs. As stated, it
    is circumstantial evidence of an individual engaged in the trafficking of
    drugs.

[123]

Later
    in his reasons, the trial judge accepted Officer Martelles evidence regarding
    the phone call and rejected the appellants half-hearted assertion that this
    telephone call may not have occurred.

[124]

It
    was acknowledged by the defence at trial that the quantity of drugs found in
    the apartment was sufficient for possession for the purpose of trafficking.
    Therefore the only issue was identity: which person was in possession of the
    drugs.

Law and Analysis

[125]

The
    seminal case on the evidentiary nature of anonymous telephone calls where the
    caller seeks to purchase drugs is the House of Lords decision in
R. v.
    Kearley,
[1992] 2 All E.R. 345. In that case, the police raided a home
    where the appellant, his wife and another man lived. They found drugs, but,
    unlike in this case, in an insufficient quantity to allow the inference of
    possession for the purpose of trafficking. While the police were there, however,
    10 telephone calls were intercepted in which the callers asked for the
    appellant for the purpose of purchasing drugs, and seven people actually came
    to the flat for the same purpose. The Crown did not seek to call as witnesses
    any of the persons who called or came to the house.

[126]

The
    majority of the panel of five Law Lords held that the police could not give
    evidence of the contents of the telephone calls or what the in-person purported
    purchasers said because those contents constituted implied hearsay and were
    therefore inadmissible. The implied hearsay is the implicit statement of the
    caller who calls asking for drugs that he or she believes that the appellant
    sells drugs. Had the caller said directly, Im calling to purchase drugs
    because the appellant sells drugs, that would be a direct hearsay assertion of
    the same belief and presumptively inadmissible. Because the calls were requests
    for drugs rather than statements, the callers were not asserting but instead
    implying their belief that they could buy drugs from the appellant because he
    was a drug dealer. The hearsay nature of the content is the same.

[127]

The
    minority referred back to betting house cases in which the courts have held
    that where the number of calls from strangers to a place requires an explanation,
    the contents of those calls becomes admissible, not for the truth of their
    contents, but for the purpose of explaining why the calls were made. That
    reasoning, applied to drug cases, permits similar evidence to demonstrate a
    market in the drugs created by the dealer operating out of the particular
    place. Lord Griffiths, one of the minority, summarized his conclusion in the
    following significant paragraph:

I would be prepared to answer the certified question
[3]
in the affirmative. It is true that the question as drafted refers to only one
    customer and the strength of the evidence lies in the fact that there are so
    many customers. But in order to be able to establish so many customers as to
    constitute a market in the drugs created by the dealer it is necessary to
    introduce evidence of the number of individual customers who collectively can
    be regarded as a market. If the evidence of each individual customer is held to
    be inadmissible it is obviously impossible ever to give evidence of a market.
    If there had been only one or two calls made to the premises offering to buy
    drugs they would carry little weight; they might be the result of mistake or
    even malice, but as the number of calls increases so these possibilities recede
    till the point is reached when any man of sense will be confident that any
    reference other than that the accused was a dealer can be safely rejected. A
    judge always has power to refuse to admit any evidence whose prejudicial value
    outweighs its probative value and if in the circumstances of this case it had
    been wished to adduce no more than one or possibly two calls I feel confident
    that a judge would have exercised his discretion to exclude such evidence.

[128]

Lord
    Browne-Wilkinson, the other dissenting Law Lord, came to the same conclusion,
    that it is really the fact of a large number of calls that makes the evidence
    cogent, but that a single call must be technically admissible if a number of
    calls are. At the end of his reasons he stated:

I must now revert to the certified question before this House
    and consider the case on the basis that there was only one caller. Would
    evidence of his call alone be admissible? In my judgment the reasoning which
    has led me to the view that evidence of multiple calls is both relevant and
    admissible applies also to one call alone: the caller is a potential customer.
    But a single call would have little probative value in showing the existence of
    a market. The possible prejudice to the accused by the jury drawing the wrong
    inference would be so great that I would expect a judge in his discretion to
    exclude it. I would also modify the question so as to make it clear that the
    inference to be drawn by the jury is to be drawn not from the words used by the
    callers but from the fact that there were callers who (from the words used)
    were shown to be seeking to acquire drugs.

[129]

I
    believe it is clear from the reasons of the dissenting Law Lords that they
    believed that one could draw the inference from a large number of calls that
    something was going on which required an explanation, the explanation coming
    from the content of the calls. The explained calls then are admitted as
    circumstantial evidence of a market in drugs operated by the recipient of the
    calls. The dissenting Law Lords emphasized that for them, the evidence admitted
    was the act or fact of the large number of calls rather than the hearsay
    content. In that way, the reliance is not on the belief of any individual
    caller that the accused is a drug dealer, thereby avoiding the hearsay problem.

[130]

This
    analysis is consistent with the older Ontario case law involving  charges of
    keeping a common betting house, such as
R. v. Owad
(1951), 102 C.C.C.
    155 (Ont. C.A.). In that case, part of the evidence against the appellant
    consisted of 50 calls fielded by the police while they were on the premises
    during a gambling raid. The content of the calls was admitted as evidence of
    the character of the premises as a betting establishment, not as hearsay.
    Again, it was the number of calls that allowed the evidence to be treated in
    that manner.

[131]

In
    my view, what the courts were effectively doing was performing a
    necessity/reliability analysis on the evidence. Where the police were unable to
    identify the callers, it was necessary to report their conversations in order
    to get the evidence of the character of the premises. The number of calls
    speaks to the reliability of the evidence. One or two calls may well be a wrong
    number or a deliberate attempt to harm the accused, while a large number of
    calls from strangers are less likely to be made in error or deliberately.

[132]

One
    may analyze the umbrella example, (as my colleague did in para. 83), in the
    same way. When everyone walking with an umbrella outside opens their umbrellas,
    an observer may infer from the group action that it is raining. But if only one
    or two people open their umbrellas while others do not, one could not reliably
    draw the inference of rain. Having said that, the umbrella observations are not
    implied hearsay  the inference of rain is not based on the belief of the person
    with the umbrella of a fact about the statements or actions of another person,
    but on their direct reaction to feeling rain. From observing their actions one
    may draw the inference that it is raining- a classic example of circumstantial
    evidence.

Recent Ontario and Supreme Court of Canada Cases

[133]

The
    Ontario case law may be viewed as somewhat inconsistent on the hearsay issue.
R.
    v. Edwards
in the Supreme Court of Canada ([1996] 1 S.C.R. 128) was an
    important case on s. 8 of the
Charter
and the parameters of the
    reasonable expectation of privacy. However, in the Ontario Court of Appeal, (1994)
    19 O.R. (3d) 239, another issue in
Edwards
(not raised in the Supreme
    Court of Canada) was the admissibility of ten cell phone and pager calls which
    the police intercepted following the arrest of the accused. He objected to the
    introduction of the evidence that the callers asked for him and some requested
    crack cocaine, claiming it was inadmissible hearsay.

[134]

In
Edwards
this court agreed with the trial judge that the calls were admitted to
    show the activity of the appellant, but not for the truth of whether the
    callers actually wanted to buy crack cocaine. I make two observations about
    this courts hearsay analysis. First, the court did not focus on the implied
    hearsay problem. The issue was not the truth of whether the anonymous callers
    actually wished to buy crack cocaine. That was, of course, irrelevant. The
    calls were relevant because they showed that the callers believed the appellant
    was a drug dealer  that belief is the implied hearsay asserted in the request
    for drugs. Second, the courts analysis that the evidence was admitted to show
    the nature of the appellants activities is similar to the view of the dissenting
    Law Lords in
Kearley
, that the evidence from a large number of calls
    shows a market. This court relied on its decision in
R. v. Fialkow
,
    [1963] 2 C.C.C. 42 (Ont. C.A.), another betting house case.

[135]

Importantly,
    the court in
Edwards
went on to state that even if the calls were
    hearsay evidence, they were properly admitted based on the criteria of
    necessity and reliability. The evidence was necessary because the police did
    not know the identity of the callers, who may not have testified anyway. It was
    reliable because it was made under circumstances which negate the possibility
    that the requests were spurious ones. I would add that a number of calls that
    are strikingly similar in their content may, in an appropriate case, be
    viewed as  increasing the likelihood of the reliability of the accuracy of the
    callers belief. (See
Khelawon
at para.108)

[136]

Two
    years later, the same issue arose in
R. v. Wilson
(1996), 29 O.R. (3d)
    97 (C.A.), but in that case, while the police were searching the appellants
    premises, one man came to the door, asked for Rob and said he wanted to buy
    drugs. Chief Justice McMurtry distinguished
Edwards
on the basis that
    while ten calls indicated an enterprise, it would be dangerous to draw an
    inference from one customer. He concluded that it would be unsafe to convict
    on this type of hearsay evidence alone, or together with other evidence. It
    should, therefore, not have been admitted into evidence. (para. 27)

[137]

Chief
    Justice McMurtry characterized the evidence as hearsay, but also referred to
    the market or enterprise inference one can draw from a significant number of
    calls. In other words, he referred to both analytical conceptualizations of
    this evidence.

[138]

A
    similar but distinguishable hearsay issue was also dealt with very briefly by
    the Supreme Court of Canada the next year in
R. v Ly
,
[1997] 3 S.C.R. 69, on appeal from the
    Alberta Court of Appeal. In
Ly
, the facts, although very briefly
    referred to, were quite different, as was the purpose for admitting the
    evidence. The appellant was alleged to be operating a dial-a-dope scheme. A
    police officer called the appellant and made arrangements to take delivery of
    drugs from him at a designated place and time. The appellant showed up at the
    place and time with the drugs. The telephone conversation was ruled admissible
    not for the truth of its contents (of course set-up phone calls from police
    could not be admitted into evidence in a trial to prove the truth of any fact),
    but as a statement tendered to establish the drug transaction and to explain
    the fact that the appellant delivered the drugs in response. Together, the
    evidence was tendered in order to prove that the appellant was in possession of
    the drugs for the purpose of trafficking.

[139]

More
    recently, this court again dealt with this kind of evidence in a brief by the
    court endorsement in
R. v. Lucia
,
    2010 ONCA 533,
[2010] O.J. No. 3154 (C.A.). Based on information
    from informants that the appellant was trafficking crack cocaine out of her
    mothers car, the police watched her have short meetings in the car with four
    males, two of whom were known crack users, then arrested her for possession of
    crack cocaine for the purpose of trafficking. They found drugs, a pellet gun
    and a cell phone in the car. The phone rang twice following the arrest. When
    the police answered in each case the caller asked to purchase crack cocaine.
    The court held that the calls were admissible as circumstantial evidence of the
    nature of the business carried on by the appellant, which was an issue in the
    case, but not for the truth of their contents. The court did not, however,
    attempt to analyze the use being made of the content as implied hearsay of the
    belief of the two anonymous callers that the appellant dealt drugs. A review of
    the record discloses that the
R. v. Wilson

decision was not
    cited to the court, nor did the court refer to it in the Endorsement.

[140]

I
    agree with Chief Justice McMurtry in
R. v. Wilson
that admitting the
    contents of one call into evidence is admitting that evidence for a hearsay
    purpose. It is the implied assertion of the caller, untested by
    cross-examination, that the accused is a drug dealer. That was also the
    conclusion of the majority of the House of Lords in
Kearley
, with
    which I also agree.

[141]

When
    there are a significant number of calls, the analysis of the minority in that
    case, that the fact of the calls requires an explanation which comes from the
    content of the calls, which content is admitted to show the operation of a
    market in drugs, becomes cogent. However, even on that analysis, in my view, it
    is still the truth of the content of the calls that is being relied on. With
    respect to those of the contrary view, it is not circumstantial evidence from
    which an inference can be drawn that the accused is a drug dealer. The evidence
    gets its probative value from the belief of the callers, which may or may not
    be accurate.

[142]

But
    such evidence only shows a market if the callers belief in the fact that they
    are calling a betting house or a drug dealer is accurate. As counsel offered in
    oral argument, if a person called his office looking for a family lawyer, it
    would be wrong to conclude that he practised family law. All one could say is
    that the caller wrongly believed that to be the case. Even if 12 callers
    called, the inference would still be factually wrong, but it is likely there is
    a reason for the error: for example, his number was formerly that of a family
    lawyer, or his name was the same as a family lawyer.

[143]

Finally,
    the fact that in some other jurisdictions, the legislature has decided to make
    this type of evidence admissible, even though it is hearsay, does not change
    the analysis. This has not been done legislatively in Canada. However, hearsay
    statements may be properly admitted for the truth of their contents if they
    meet the two criteria of necessity and reliability, and if their probative
    value is not outweighed by their prejudicial effect. (
Khelowan
at paras.
    3 and 49)

Application to This Case

[144]

The
    trial judge in this case was in error when he admitted the evidence of the one
    call on the basis that it was not hearsay and not being admitted for the truth
    of its contents. In fairness to the trial judge, he was focused on the truth of
    whether the caller really wanted to purchase drugs, which was of course,
    irrelevant, and not on the implied assertion in the request that the appellant
    is a drug dealer. Furthermore, he was not referred to the
Wilson
case,
    an important and binding Ontario authority. The caller also made direct
    statements of fact that the appellant, whom he identified by name, had sold him
    drugs before for $150. These were clearly direct hearsay statements and
prima
    facie
inadmissible.

[145]

The
    trial judge also erred by admitting the evidence on the basis that it showed
    that the appellant was in the drug-dealing business. This was an error since,
    unlike in other cases, it was admitted that the quantity of drugs found was
    sufficient to prove that whoever possessed the drugs possessed them for the
    purpose of trafficking. The only live issue was which of the apartments
    occupants possessed the drugs. The caller clearly identified the appellant as
    the drug dealer.

[146]

Nor
    would the single call have met the necessity/reliability test. The Crown did
    not make out a case for necessity: the police had the callers address but
    never tried to contact him or obtain his testimony. There was no basis to say
    that the callers belief was reliable without testing the basis for that belief
    by cross-examination.

[147]

Finally,
    before admitting the evidence of one anonymous call, the trial judge should
    have considered whether its probative value outweighed its prejudicial effect,
    whether counsel specifically objected on that basis or not, and where defence
    counsel had asked the judge to rule the evidence inadmissible as hearsay. (
Khelawon
at paras. 3 and 49):

because trial fairness may encompass factors beyond the strict
    inquiry into necessity and reliability, even if the two criteria are met, the
    trial judge has the discretion to exclude hearsay evidence where its probative
    value is outweighed by its prejudicial effect. (para. 49)

[148]

The
    minority in
Kearley
, who would have found the calls theoretically
    admissible as non-hearsay, were clear that the probative/prejudicial weighing
    was required where there were only one or two calls, and that in those
    circumstances, such evidence should be rejected because its probative value was
    questionable while its prejudicial effect was clear. (See the two statements
    quoted above at paras. 127 and 128).

Conclusion

[149]

Because
    the trial judge admitted the contents of the anonymous call as evidence that it
    was the appellant who was in the business of drug dealing out of the apartment,
    it was clearly evidence that was important to the conviction. Crown counsel at
    trial characterized it as the strongest piece of evidence in the case. The
    trial judge referred to the call in his reasons for judgment. Although he
    discussed other evidence in his analysis, that does not mean that the evidence
    of the call did not play a role in his decision to convict. [A] trial judge is
    not required to refer to every item of evidence considered or to detail the way
    each item of evidence was assessed. (
R. v. J.M.H
., [2011] 3 S.C.R.
    197 at para. 32). I cannot find that exclusion of the evidence would not have
    affected the verdict. I would therefore decline to apply the proviso in this
    case. I would set aside the verdict, allow the appeal and order a new trial.

Signed:        K. Feldman
    J.A.

R.A. Blair: (Concurring with Feldman J.A.):

[150]

I have had the opportunity of reading the reasons of both of my
    colleagues, Justice Feldman and Justice Watt.  I agree that the second ground
    of appeal  the failure of the trial judge to subject Lepages evidence to a
Vetrovec
warning  cannot succeed, for the reasons expressed by Watt J.A.  Like Feldman
    J.A., I would set aside the conviction and order a new trial on the ground
    relating to the admissibility and use of the drug purchase call.  However, I
    take a somewhat different view of the hearsay problem that bedevils us in these
    particular circumstances.

[151]

For centuries, judges, lawyers and
    academics have devoted much thought and debate to the questions of what does or
    does not constitute hearsay evidence and why and in what circumstances, and
    what are the principles underlying the admissibility of such evidence.  The
    authors of
McWilliams Canadian Criminal Evidence
observe that [f]or more than two
    centuries the common law has woven a web of complex rules and exceptions
    related to the admission of out-of-court assertions:  S. Casey Hill, David M.
    Tanovich, & Louis P. Strezos,
McWilliams Canadian Criminal
    Evidence
,
looseleaf (Toronto: Canada Law Book,
    2011) at p. 7-4.  As early as 1684, Jeffreys L.C.J. said that unsworn oral
    hearsay is
a sort of
evidence, but it is not to be allowed (emphasis added):  see
Frederick W. J. Koch,
    The Hearsay Rules True Raison dÊtre:  Its Implications for the New
    Principled Approach to Admitting Hearsay Evidence (2005-2006) 37 Ottawa L.
    Rev. 249-289, at para. 26
,
What sort of evidence confronts us here, is at the heart of the appeal.

[152]

Indeed, it is likely there are factual
    situations where, if 100 legal professionals were placed in a room and asked
    whether the proffered evidence constitutes hearsay, the question would generate
    40 firm responses in the affirmative and 40 equally firm responses in the
    negative, with the remaining 20 falling into the unsure category.  Such is the
    case with the contents of a drug-purchase phone call.  As my colleague, Watt
    J.A. points out:

The authorities that consider whether drug purchase calls are
    reached by the hearsay rule, or if they are, whether the calls should be
    admitted by exception or excluded on some other basis do not achieve even the
    most modest level of consistency or clarity.

[153]

I fall into the unsure category in
    this case.  There are arguments in favour of the positions advanced by both of
    my colleagues, each of whom has engaged in a careful and reflective exploratory
    journey through the tricky shoals of what does or does not constitute
    hearsay.  On balance, I favour the conclusions reached by Feldman J.A. and
    her analysis in arriving at those conclusions in the particular circumstances
    of this case.  But I would add the following observations.

[154]

Legal purists, and judges who must
    cope with and decide these issues, spend a great deal of intellectual energy
    worrying about whether evidence such as that confronting the trial judge is
    hearsay.  While this approach provides a framework for analysis, I wonder if a
    different approach might be helpful.

[155]

Canadian jurisprudence has developed
    over the past 20 years to the point where it is the guiding principles
    underlying the traditional exceptions to the hearsay rule  necessity and
    reliability  that generally govern the determination of hearsay admissibility
    in circumstances not involving one of the traditional exceptions:
R.
    v. Khelawon
, 2006 SCC 57,
    [2006] 2 S.C.R. 787, para. 42.  Given this evolution, coupled with a trial
    judges overriding discretion to exclude evidence  even non-hearsay evidence
    in appropriate circumstances  the time has come, in my view, for jurists to
    spend less time focussing on the characterization of evidence into hearsay or
    non-hearsay categories in these types of close-call scenarios and to spend
    more effort focussing on the principled criteria of necessity/reliability and
    prejudice vs. probative value.

[156]

For those reasons, I do not think it
    is necessary to cut the hearsay Gordian knot to resolve this appeal because
    in the end I conclude  as does Feldman J.A.  that the one drug-purchase phone
    call tendered here would not have survived the necessity/reliability analysis
    called for if the phone call were considered to be hearsay, nor would it have
    survived the prejudicial effect/probative value exercise that the trial judge
    should have conducted, but did not, even after concluding that the evidence was
    not hearsay.

[157]

I am not suggesting that the analysis
    of whether a particular piece of evidence is or is not hearsay should be
    jettisoned in all cases.  The hearsay concept is too deeply imbedded in the law
    of evidence  for all of the sound reasons underlying the laws caution in
    relation to such evidence.  As Dickson J. observed in
R. v. Abbey
, [1982] 2 S.C.R. 24, at p. 40, citing
    from an article by Professor Cross:

There exists a superstitious awe  about having any truck with
    evidence which involves As telling the court what B said to him.
[4]

[158]

The reasons underlying this concern
    are explained by Charron J. in
Khelawon
, at para. 35:

Our adversary system puts a premium on the calling of
    witnesses, who testify under oath or solemn affirmation, whose demeanour can be
    observed by the trier of fact, and whose testimony can be tested by
    cross-examination.  We regard this process as the optimal way of testing
    testimonial evidence.  Because hearsay evidence comes in a different form, it
    raises particular concerns.  The general exclusionary rule is a recognition of
    the difficulty for a trier of fact to assess what weight, if any, is to be given
    to a statement made by a person who has not been seen or heard, and who has not
    been subject to the test of cross-examination.  The fear is that untested
    hearsay evidence may be afforded more weight than it deserves.  The essential
    defining features of hearsay are therefore the following: (1) the fact that the
    statement is adduced to prove the truth of its contents and (2) the absence of
    a contemporaneous opportunity to cross-examine the declarant.

[159]

Nonetheless, I think the following
    approach to hearsay cases makes some sense.  A trial judge should begin by
    addressing whether the prospective evidence constitutes hearsay, using the
    traditional criteria for that determination.  If the answer is readily
    determined in the affirmative, then the governing framework as developed in the
    modern jurisprudence, and summarized recently in
R. v. Mapara
, 2005 SCC 23, [2005] 1 S.C.R. 358, at
    para. 15 should be followed:

(a)  Hearsay evidence is presumptively inadmissible unless it
    falls under an exception to the hearsay rule.  The traditional exceptions to
    the hearsay rule remain presumptively in place.

(b)  A hearsay exception can be challenged to determine whether
    it is supported by indicia of necessity and reliability, required by the
    principled approach.  The exception can be modified as necessary to bring it
    into compliance.

(c)  In rare cases, evidence falling within an existing
    exception may be excluded because the indicia of necessity and reliability are
    lacking in the particular circumstances of the case.

(d)  If hearsay evidence does not fall under a hearsay
    exception, it may still be admitted if indicia of reliability and necessity are
    established on a
voir dire
.

See also
Khelawon
, at para. 42.

[160]

However, if the hearsay nature of the
    prospective testimony is particularly difficult to pinpoint, courts should
    consider falling back on the newer, more principled tools of
reliability
    and prejudice/probative value assessments to resolve the question of
    admissibility.  Such a situation may arise where  as here, for example  the
    purpose for which the evidence is tendered is ambivalent or open to more than
    one usage, but the evidence, at least on its face, has many of the
    hearsay-danger characteristics that make courts cautious about receiving it.
    Necessity is less of a factor in these circumstances.  If evidence lacks
    sufficient reliability it will have little probative value in any event, but
    even if the proffered evidence meets the reliability threshold for
    admissibility a judge may still conclude, in his or her discretion, that the
    evidence ought to be excluded because its prejudicial potential outweighs any
    probative value it may have:
Khelawon
, at para. 3;
R. v. Seaboyer
, [1991] 2 S.C.R. 577.

[161]

Like Feldman J.A., I conclude that the
    trial judge erred in admitting the evidence of the one drug-purchase call on
    the basis that it showed the appellant was in the drug-dealing business.  I
    agree with her analysis at paragraphs 144‑149 of her reasons in this
    regard.

[162]

If the phone call evidence was
    hearsay, it ought to have been subjected to a necessity/reliability analysis,
    which, in my view it would fail.  If, as the trial judge concluded on the basis
    of the authorities he followed, it was not hearsay, it ought nonetheless to
    have been subjected to a prejudice/probative value balancing exercise, which
    the trial judge did not do.  Like my colleague, I do not think the fact that
    defence counsel did not seek to have the phone call excluded on
Khelawon
principles is fatal in the
    circumstances.  In circumstances such as this, trial judges should be alive to
    their discretion to exclude evidence on the prejudice vs. probative value
    ground.

[163]

I would accordingly allow the appeal
    and order a new trial for the foregoing reasons.

Signed:  R. A. Blair J.A.

RELEASED: KF MARCH 2, 2012

[1]
Law Commission Report No. 245,
Evidence in Criminal Proceedings: Hearsay and
    Related Topics
, Cm. 3670 (1997), at para. 7.7.

[2]

Birch,
Criminal Justice Act 2003
(IV) Hearsay:
Same
    Old Story, Same Old Song
?, [2004] Crim. L. R. 556, at p. 564.

[3]

The certified question was: Whether evidence may be adduced
    at a trial of words spoken (namely a request for drugs to be supplied by the
    Defendant), not spoken in the presence or hearing of the Defendant, by a person
    not called as a witness, for the purpose not of establishing the truth of any
    fact narrated by the words, but of inviting the jury to draw an inference from
    the fact that the words were spoken (namely that the Defendant was a supplier
    of drugs).

[4]
Cross, What should be done about the Rule Against Hearsay: [1965] Crim. L.R.
    68, at p. 82.


COURT OF APPEAL FOR ONTARIO

CITATION:
R. v. Beatty, 2012 ONCA 202

DATE: 20120330

DOCKET: C53788

Rosenberg, Armstrong and Juriansz JJ.A.

BETWEEN

Her Majesty The Queen

Respondent

and

Rosemary Beatty

Appellant

Christopher Hynes, for the appellant

Riun Shandler for the respondent

James Thomson, for the respondent Centre for Addiction
    and Mental Health

Heard and endorsed: March 23, 2012

On appeal from the treatment order issued by Justice
    William P. Bassel of the Ontario Court of Justice, dated May 26, 2011.

APPEAL BOOK ENDORSEMENT

[1]

The appellant was found fit soon after the impugned order was
    made. The appeal is therefore moot. This is not a proper case for this court to
    exercise its discretion to hear the appeal. The serious issues of principle
    respecting treatment orders are under reserve in this court. The other issue
    sought to be raised by counsel is specific to the facts of this case.

[2]

Accordingly, the appeal is dismissed.