IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]         Yung Fung is charged by indictment, as follows:

[2]         In these reasons, I will use the term contraband cigarettes to mean unstamped tobacco.

[3]         The Crown and defence tendered a compendious Statement of Admitted Facts (Admissions) under section 655 of the Criminal Code for purposes of dispensing with proof of material facts at trial.

[4]         The facts establish that in the course of an investigation into the sale of contraband cigarettes in British Columbia, Ministry of Finance investigators uncovered boxes of contraband cigarettes in a residential garage in Vancouver and in the hold of an abandoned U-Haul van. Further boxes of contraband cigarettes were located in a metal cargo container in Richmond, British Columbia.

[5]         The issue to be decided is whether the Crown has proved, beyond a reasonable doubt, that Mr. Fung was in knowing possession of unstamped tobacco products found in the garage and the U-Haul in Vancouver on January 23, 2019.

[6]         A number of elements of the offence are not in dispute. There is no issue with respect to date, jurisdiction, and identification of Mr. Fung.

[7]         Under federal law, section 32 of the Excise Act, 2001, S.C. 2002, c. 22 makes it an offence to possess, offer for sale or have possession of tobacco unless it is stamped.

[8]         Additionally, under section 39(1) of the Tobacco Tax Act, RSBC 1996, c. 452, it is an offence to possess, sell or have possession of tobacco in excess of 1000 grams that does not bear the prescribed mark or stamp and/or to transport in excess of 50 cartons of cigarettes unless that person has the required authorization to do so. Pursuant to s. 39(7) of the Act, a person commits an offence when they possess or keep tobacco in contravention of the Act.

[9]         Mr. Fung accepts that tobacco manufacturers must pay federal tax on tobacco before the tobacco product enters the Canadian market. Therefore, all tobacco for sale within the Canadian market must carry the federal excise stamp, or duty paid stamp, for tobacco products destined for sale within Canada.

[10]      Moreover, tobacco products cannot be legally sold in British Columbia unless each package of cigarettes is marked with the British Columbia tax stamp.

[11]      An absence of either the federal or provincial stamp on tobacco products signifies that the requisite tax has not been paid as mandated under law.

[12]      Mr. Fung admits that at the times alleged in the Indictment, he was not authorized under the Excise Act, 2001, to possess, sell or transport unstamped tobacco. He was not a registered tobacco dealer in British Columbia and did not possess a tobacco retail authorization or tobacco wholesale dealer permit pursuant to the Tobacco Tax Act.

[13]      In or around August 2018, the Ministry of Finance (MOF) commenced an investigation into the importation and distribution of illegal tobacco products in the Metro Vancouver region. MOF investigators received information from a contact with the Ontario Provincial Police that large quantities of illegal tobacco products were being shipped from Ontario to British Columbia. Investigators were able to pinpoint the delivery location to a freight forwarding and shipping business located in Richmond, British Columbia. The business identified an individual named Cong Ton Tran as the named consignee receiving the suspected shipments.

[14]      From August 20, 2018 to January 23, 2019, the transport company received 33 shipments consistent with over 80 skids of contraband cigarettes. The typical shipping pattern appeared to be delivery of 1-2 skids from Ontario to British Columbia about 1-2 times per week.

[15]      A shipping skid will fit 50 half-cases of cigarettes. A half-case is a box containing 30 cartons of cigarettes or a total of 6000 cigarettes. A half-case containing 30 cartons weighs 10.5 kg or about 23 pounds.

[16]      The transport company facilitated the storage of the shipments in an adjacent warehouse. MOF investigators commenced surveillance to uncover the movement or distribution of the contraband cigarettes into and from the Richmond warehouse.

[17]      Surveillance between September 17, 2018 and December 5, 2018, disclosed that an individual, believed to be the consignee Cong Ton Tran, picked up pallets containing boxes consistent in appearance with half-cases of contraband cigarettes and transported the cargo in a Savana van to Vancouver, including to a detached garage located at the rear of a residence at 2736 Ward Street (the Ward Street garage).

[18]      Specifically, in late 2018, Cong Ton Tran took possession of four pallets (224 half-cases) on October 2; two pallets (112 half-cases) on October 16; and four pallets on December 5 (224 half-cases). On each of these dates, the Savana van was seen picking up half-cases of suspected contraband tobacco products and driving to and backing into the driveway next to the Ward Street garage.

[19]      On subsequent dates in December 2018, a tracking device on the Savana van disclosed that six additional shipments to consignee Cong Ton Tran were picked up from the Richmond-based shipper or an adjacent warehouse. Thereafter, the tracker confirmed several attendances by the Savana van to the Ward Street garage.

[20]      The net result of this investigation and surveillance was that contraband cigarettes in half-case boxes were received and stored initially in Richmond and then distributed to storage locations in Vancouver, and specifically to the Ward Street garage.

[21]      In addition to the formal admissions of fact, the prosecution presented testimonial evidence of MOF investigators Monsoor Nasiri, Marco Greco, Robert Bruce Headridge, and MOF employee Gursewak Sandhu.

[22]      Mr. Fung testified on his own behalf, with the assistance of an interpreter.

[23]      Mr. Nasiri described seeing a U-Haul by the Ward Street garage on January 23, 2019, and later observed that van being loaded with half-cases from a metal cargo container in Richmond B.C. He did not see any exchange of paperwork and was not aware of any form of markings on the half-cases apart from initials on the outside labels.

[24]      Mr. Greco was on the MOF surveillance team on January 23, and confirmed that he saw the target U-Haul which had been loaded with half-cases of tobacco arrive from Richmond to Vancouver. He saw a change of drivers in the rear lane of Victoria Drive at 42^nd avenue, with Mr. Fung taking over to drive the U-Haul from there to the Ward Street garage. He confirmed seeing Mr. Fung in the cargo hold of the U-Haul which was parked adjacent to an open garage door.

[25]      Mr. Sandhu was also on the surveillance team on January 23, 2019, and went to the Ward Street residence at 11:15 a.m. He saw a van in the rear lane of the house, and later saw Mr. Fung walk to the front of the house on his telephone. He kept looking around as he paced back and forth. This behaviour suggested to Mr. Sandhu that Mr. Fung was “heat conscious”, meaning that he was aware of being watched. Mr. Sandhu also agreed that he might have been looking out for someone he was expecting. At some point, he walked away from the house westbound. In short order, Ms. Mo arrived in her Lexus and she too was looking around. He conceded Mr. Fung may have been looking around for her.

[26]      Mr. Sandhu next caught sight of Mr. Fung at 1:42 p.m. when he left the Ward Street property in the U-Haul at a fast rate of speed, driving in an erratic manner with sharp and quick turns. He lost sight of the U-Haul but other members of the surveillance team located it very shortly thereafter.

[27]      Robert Bruce Headridge was part of the January 23 surveillance team and saw Mr. Fung drive the U-Haul to the Ward Street residence and garage on two occasions. His first arrival was at 10:40 a.m. Mr. Fung opened the gates of the rear driveway, backed the U-Haul van onto the property, and closed the gates. He went into the residence. Mr. Headridge took a covert IPhone photo of Mr. Fung. Mr. Fung waved as Mr. Headridge drove past him down the lane.

[28]      Mr. Headridge saw Mr. Fung a second time at 12:27 p.m. He was backing the U-Haul van onto the Ward Street property. Mr. Headridge approached a resident across the lane from the property to arrange access to a better viewing spot from the neighbour’s raised deck in order to see what was occurring on the Ward Street property. The upstairs resident of the target Ward Street residence looked over and saw Mr. Headridge speaking with his neighbour, and then said something to Mr. Fung. The two men left the rear yard and went to the front of the house.

[29]      Mr. Headridge remained at his vantage spot on the neighbour’s patio and at 13:42 p.m. Mr. Fung returned to the rear of the residence on Ward Street. He took a quick look around before opening a double set of gates of the rear driveway. He drove the U-Haul out of the driveway very quickly, as if he was in a hurry to leave the area. He did not close the driveway gates. A moment later Mr. Headridge saw a member of the surveillance team follow the route Mr. Fung had taken, also going at a very fast rate of speed.

[30]      Mr. Headridge agreed that Mr. Fung first came to his attention about two months after the start of the investigation into contraband tobacco. He agreed he did not see any of the boxes being moved on his watch. He agreed that MOF investigators included one female surveillance member but he did not remember if she was involved in the investigation he was on.

[31]      Mr Fung was born in 1968 and originates from Guangzhou, Guangdong Province, China. He is a Canadian citizen. He came to Canada in around 1991, in his early twenties. He received only a rudimentary education in China, not past elementary school level. He took some English classes on arrival, but he is not functional in the English language. He testified through the assistance of a Cantonese interpreter at trial.

[32]      Mr. Fung remained in Canada for a number of years before returning to his country of origin. He then returned to Canada around 2017 or 2018, and began to work in a hairdressing salon in the Downtown Eastside of Vancouver.

[33]      In around 2018, a person he identified as Michael Li offered him a job moving items in his van. He promised to pay him $100 to $150 per move, depending on the number of items, and he received cash for his transport and delivery work. The moving work was secondary work, a side-line for which he was available when called. He had another job, his official job, where he worked for about 6 months of the year, earning $3,000 per month. For the remaining months, he received employment insurance of around $2,000 per month.

[34]      Mr. Fung owned a 2000 blue Mazda MPV which he used for making deliveries. On rarer occasions, he used a U-Haul van if Michael Li asked him to do so. He only did a few transport jobs for Michael Li, the number of which varied during cross-examination, but it was not a significant number.

[35]      Mr. Fung had a cell phone but Michael Li provided Mr. Fung with another cell phone that was to be used to communicate with him about delivery jobs. Personal phones were not to be used. Mr. Fung no longer has that phone in his possession. Michael Li took it back at some point.

[36]      Between the Fall of 2018 to Spring 2019, precisely when Mr. Fung cannot say, he verbally agreed to sell his MPV van to Michael Li. He handed over a set of keys to him. Mr. Fung would use that van for deliveries for Michael Li even after the verbal sales agreement. How often he used the MPV he could not say with any certainty. He testified that Michael Li has not yet paid him for the purchase of the 2000 Mazda MPV.

[37]      Mr. Fung agrees he transported cardboard boxes for Michael Li. He understood them to contain plates and eating utensils similar to those found in Chinese restaurants. He did not look inside the boxes at any point. He did not make any inquiries of Michael Li as to the contents of the boxes. When asked if he believed Michael Li about what was in the boxes, Mr. Fung said it was not a matter of believing him or not. He was being paid and he did his job.

[38]      The boxes had minimal markings on the outside, including some English markings. He was not proficient in reading or speaking in the English language in any event.

[39]      Mr. Fung attended to the boxes warehoused in the Ward Street garage. He used a ledger to note the number of boxes being moved into and out of the garage.

[40]      The photographic evidence shows that the boxes were stacked together in keeping with and according to the label on the outside of the boxes. It is not contested the labels noted the initials of the brand of cigarettes contained inside.

[41]      Mr. Fung said he was never given any paperwork by Michael Li or anyone else related to the items he was picking up or delivering. No waybills, receipts or invoices. Michael Li always paid him in cash, and never provided any paystubs or pay statements to him.

[42]      As to the pattern of deliveries, Mr. Fung agreed that he moved the boxes to and from a detached garage on residential property on Ward Street or delivered boxes by meeting persons in public places or parking lots in Vancouver. He agrees he delivered to a woman named Wei Min Mo whom he knew from his work in the hair salon. He did not indicate how it was that Michael Li knew Ms. Mo or what need Ms. Mo had for restaurant supplies.

[43]      There is no evidence indicating that Mr. Fung delivered the boxes directly to any restaurants or business premises of any kind.

[44]      On January 23, 2019, at around 10:40 a.m., Mr. Fung drove a U-Haul full of boxes to the Ward Street garage, unloaded the boxes in the garage, and drove away from the property in the same U-Haul at about 11:26 a.m. He returned with another load of boxes in the U-Haul at around 12:30 p.m. that day. He parked the U-Haul adjacent to the garage. This time, he did not unload the U-Haul. He lingered around the property and went to the front of the property. He engaged in some phone calls and then left in the U-Haul without unloading its cargo.

[45]      He agrees that on January 23, he met a man, Mr. Lau, who lived in the Ward Street residence. He could call on this person to open the garage door for him if the need arose. He says he did not know him well at all. Yet in explaining why on that day he went into the house of a man he did not know well, he explained he wanted to ask him if the house was for sale because he had seen a female who looked like a realtor taking photos of it.

[46]      Mr. Fung denies that he was looking around the property to see if he was being watched. He agreed that he walked away from the U-Haul for a period of time but it was not unusual for him to walk about in this way. He does not deny that he had nine telephone contacts with Mr. Lai in the afternoon of January 23, 2019, but insisted they were about their mutual diabetes health issues.

[47]      Mr. Fung said that he returned to the U-Haul and left at a normal rate of speed. As earlier noted, investigators saw him drive off at a high rate of speed. Mr. Fung denied that he followed an indirect route with a number of turns before reaching a nearby cul-de-sac. He parked the U-Haul, still full of boxes, in the cul-de-sac and left the area without speaking with anyone at that location.

[48]      Mr. Fung said he left the U-Haul at that location for someone else to collect and did so at the telephone direction of Michael Li. He was simply following his instructions.

[49]      Mr. Fung said he did not know that the boxes contained contraband tobacco. He did not look into any of the boxes, and he simply went where he was told to go to deliver the boxes. After January 23, he never delivered any more boxes for Michael Li.

[50]      The above brief summary is the gist of Mr. Fung’s evidence on his relationship with Michael Li, on his understanding of the product he was delivering, the details of his arrangement with Michael Li, and the actions he took specifically on January 23, 2019.

[51]      The Ward Street garage is the location to and from which boxes of contraband tobacco were delivered or removed in various vehicles. The evidence in this case links Mr. Fung to the Ward Street garage and residence. I summarize those linkages in the following sections.

[52]      I am satisfied that on October 16, 2019, a significant number of half-cases of contraband cigarettes were removed from the Richmond warehouse and driven in a U-Haul to the Ward Street garage. The U-Haul cargo was unloaded and transferred for storage in the garage. It look less than 40 minutes to do so.

[53]      Mr. Fung arrived at or was in the near vicinity of the Ward Street garage as this was occurring. Once the U-Haul was emptied, Mr. Fung drove the empty U-Haul van to a location in the rear lane of Victoria Drive and 42^nd Avenue. He had contact with Ms. Mo, an acquaintance. He relinquished possession of the U-Haul to another Asian male at that location. This male drove away, refuelled the U-Haul and returned it empty of cargo to the U-Haul rental facility within 24 hours of its rental. Ton Lei Lai, an individual known to Mr. Fung, had rented the U-Haul.

[54]      The evidence shows that Mr. Fung arrived at the Ward Street garage in close coordination to the unloading of the boxes from the U-Haul and into the garage. He then drove the empty van to a prearranged location about 2 kilometres away to hand off the empty van to another male for its return to the U-Haul rental facility located about 3.5 kilometres away. He personally knew Ms. Mo and Mr. Lai, each of whom had a role in the rental, transfer or return of the U-Haul.

[55]      The next day, Mr. Fung drove his Blue MPV van to the Ward Street garage and left eight minutes later. I am satisfied that Mr. Fung loaded the half-case boxes into his MPV from product stored in the Ward Street garage. Mr. Fung next drove his MPV to the rear parking lot located at the intersection of Kingsway Avenue and Earles Street. At this location, Mr. Fung met with the driver of a grey Lexus SUV, into whose vehicle they loaded 8-10 cardboard boxes consistent in size with half-cases of contraband cigarettes.

[56]      Mr. Fung then drove back to the Ward Street garage and reloaded another 10 boxes into his blue MPV. The boxes were labelled “RGF”, shorthand for the brand of cigarettes known as Rolled Gold Full Flavour. He drove to a different parking lot located near the intersection of Grandview Highway and Renfrew Street. Within half an hour, a different Asian male arrived in a white SUV, met with Mr. Fung, and gave him a white envelope. This person then left the area alone, driving Mr. Fung’s blue MPV to a storage facility located on Rupert Street. At this location, the male unloaded boxes consistent with half-cases of contraband tobacco and then returned the blue MPV to Mr. Fung who remained waiting in the parking lot for the return of his vehicle.

[57]      The events of October 17 establish that Mr. Fung personally handled the boxes of what were later found to be contraband cigarettes by removing the requisite number of boxes, of the requisite brands, required for each delivery. The deliveries were pre-arranged with the recipients, for drop off at prearranged locations to persons who arrived within short order at public places to meet with Mr. Fung to accept delivery. Each delivery was in a parking lot. Mr. Fung trusted one person to allow him the personal use of his MPV.

[58]      On November 28, Mr. Fung attended at and accessed the Ward Street garage. He took 30 half-case boxes from the garage and placed them in his MPV for delivery to a female in an underground parking lot of a strip mall at Renfrew and 1^st Avenue. Mr. Fung loaded the first 15 boxes into the female’s Lexus, and waited in the parking lot for her to return to load the next 15 or so boxes. Both then drove away from the lot in their respective vehicles.

[59]      I find that on this occasion Mr. Fung picked up the requisite number of boxes of the requisite brand from the Ward Street garage to fulfil the delivery in a parking lot.

[60]      I find that on each of the three delivery dates, Mr. Fung presented no invoices or paperwork to the recipients confirming the contents of the delivery and did not require any documents to be signed confirming receipt of the orders he was delivering. He admits to receiving an envelope on one occasion, from the man to whom he handed over his vehicle but denies knowing what the envelope contained.

[61]      On the morning of January 23, 2019, the residence at 2736 Ward Street was under surveillance. Mr. Fung drove a U-Haul cargo van into the rear laneway and backed into the rear driveway of the residence. He parked the U-Haul beside the detached garage main door. He knocked on the door of the residence and was admitted through a rear entrance. Shortly thereafter, the main door of the garage and the side door of the U-Haul were seen in an open position.

[62]      Mr. Fung left the Ward Street garage within 50 minutes of his arrival and drove the U-Haul to the rear lane of Victoria Drive and 43^rd Avenue. This was within a block of the location to where Mr. Fung had previously driven a different U-Haul on October 16, 2018.

[63]      Mr. Fung transferred possession of the U-Haul to two males, who drove to a Richmond location to access a cargo container. In about 12 minutes the two males loaded 2 skids full of boxes marked with the label “CR”, being suspected half-cases of contraband cigarettes of the brand “Canadian Red”, into the U-Haul. They then returned to Mr. Fung who had waited for them in the same laneway. The U-Haul was transferred back to Mr. Fung who drove the loaded U-Haul to the Ward Street garage. He arrived at 12:33 p.m.

[64]      Unlike previous occasions when loading and offloading occurred expeditiously, on this occasion the side door of the van was open, and the garage door was open, but no steps were taken to unload the van. Instead, Mr. Fung walked first to the front of the house and westward on Ward Street. The open van remained unattended beside the open detached garage.

[65]      Within 30 minutes, at 12:57 p.m., Ms. Mo and another male arrived at the Ward Street residence. At 13:42 p.m. Mr. Fung got into the U-Haul and drove away. He was followed by a MOF surveillance team who saw him drive away at a fast rate of speed, taking a series of turns before they lost sight of the U-Haul. Within moments, the U-Haul was found at the rear driveway of 5051 Spencer Street, Vancouver. No one at the Spencer Street address had any knowledge of or connection to the U-Haul. The U-Haul was taken into custody by MOF investigators. Mr. Fung was nowhere to be seen.

[66]      Pursuant to a production order obtained for cell phone numbers associated with Mr. Fung, Ms. Mo (Lexus driver to U-Haul facility on October 16, 2018), Mr. Lai (U-Haul renter on October 15-16, 2018) and Mr. Lau (upstairs resident at Ward Street garage address), there was routine contact between these individuals up to January 23, 2019, with a large spike in calls (31 in total) between the hours of 12:37 p.m. and 16:13 p.m. on January 23, 2019. The calls on January 23, 2019, between them are as follows:

[67]      Search warrants for the Ward Street garage, Richmond cargo container and U-Haul van were obtained and executed, revealing the following contents:

[68]      The duties and taxes owed on the contraband cigarettes seized in Vancouver are as follows:

[69]      The Crown is not alleging that the accused Mr. Fung was party to the importing of the contraband cigarettes to Richmond, British Columbia from Ontario. There is no direct evidence linking him to the consignee Cong Ton Tran or to the shipping and warehouse storage location of the contraband tobacco in Richmond, British Columbia.

[70]      The Crown alleges that Mr. Fung was a lower tier participant in that he knowingly took possession of contraband cigarettes and facilitated their storage and illegal distribution in and around Vancouver.

[71]      The Crown relies on several factors in advancing its allegations.

[72]      First, it relies on Mr. Fung’s activities in relation to the movement or storage of the half-cases of cigarettes in the Ward Street garage in Vancouver. Second, it relies on Mr. Fung’s blue Mazda MPV in temporal and geographical proximity to the movement of contraband cigarettes. Lastly, it relies on Mr. Fung personally operating a U-Haul truck in which were found half-cases of contraband cigarettes, and personally attending at the Ward Street garage to unload and store half-cases of contraband cigarettes.

[73]      The Crown submits that Mr. Fung had actual knowledge that the half-cases contained contraband cigarettes. In the alternative, the Crown submits that Mr. Fung was wilfully blind as to the illegal contents of the half-cases.

[74]      The Crown contends that where an accused is in possession of contraband of significant value, it may be open for a trier of fact to infer that such a valuable quantity of contraband “would not be entrusted to anyone who did not know the nature of the contents of the bag or other container.”: R. v. Bains, 2015 ONCA 677 at para. 157.

[75]      Mr. Fung accepts that the direct and circumstantial evidence in this case establishes the actus reus of the offence. He argues that the evidence as a whole is insufficient to establish guilty intent or mens rea beyond a reasonable doubt. He relies on the defence of mistake of fact.

[76]      I find that the defence concession as to the proof of the actus reus is correct. Mr. Fung was observed in Vancouver at various times but specifically on January 23, 2019, in circumstances that establish his personal or constructive possession of unstamped tobacco. The evidence shows beyond a reasonable doubt that Mr. Fung was in personal possession of the tobacco products while handling and transporting them. He was in constructive possession of the boxes after they were stored in the garage. I conclude that Mr. Fung’s transport and manual handling of the half-case boxes containing multiple cartons of contraband cigarettes is sufficient proof of the actus reus of the offence.

[77]      I turn to the legal principles for assessing proof of the mens rea of the offence.

[78]      In a criminal trial, the presumption of innocence is a constitutionally enshrined right of an accused person. As noted in R. v. Lifchus, 1997 CanLII 319 (SCC), [1997] 3 S.C.R. 320, the burden of proof rests on the prosecution throughout a criminal trial and never shifts to the accused. The accused is not required to prove anything. A reasonable doubt is based on reason and common sense and is logically connected to the evidence or absence of evidence.

[79]      The Crown’s burden to prove guilt beyond a reasonable doubt does not involve proof to an absolute certainty, and the standard is not proof beyond any doubt. However, more is required than proof that the accused is probably guilty in which circumstance the standard for conviction would not be met. As noted in R. v. Starr, 2000 SCC 40, proof beyond a reasonable doubt is “much closer to absolute certainty than to a balance of probabilities” (at para. 242).

[80]      In this case, a number of Crown witnesses testified, and Mr. Fung testified in his defence. The credibility and reliability of each witness’s testimony must be assessed in light of the standard of reasonable doubt. As set out in the leading case on the assessment of credibility in a criminal proceeding, R. v. W.(D.), 1991 CanLII 93 (SCC), [1991] 1 SCR 742:

[81]      In R. v. C.W.H., (1991) 1991 CanLII 3956 (BC CA), 68 C.C.C.(3d) 146 at 155, Wood J.A. noted that if, after a careful consideration of all of the evidence, the trier of fact is unable to decide whom to believe, the accused is entitled to an acquittal.

[82]      The W.(D.) analysis is meant to underscore that the rule of reasonable doubt applies to assessments of credibility. A verdict of guilt must not be based on a credibility contest of simply preferring one account over the other. That is, the “lack of credibility on the part of the accused does not equate to proof of…guilt beyond a reasonable doubt”: R. v. S. (J.H.), 2008 SCC 30 (CanLII), [2008] 2 S.C.R. 152 at para. 1. The court is required to undertake an assessment of the whole of the evidence against the standard of proof beyond a reasonable doubt in arriving at its verdict: R. v. C.L.Y., 2008 SCC 2 at para. 8.

[83]      The principles for assessing credibility are described in the decision Bradshaw v. Stenner, 2010 BCSC 1398, wherein Madam Justice Dillon said:

[84]      In sum, credibility relates to whether a witness is being honest and telling the truth during their testimony. Reliability is related to the accuracy of their testimony, as determined by the witness’s ability to accurately observe, correctly recall and properly recount the event being discussed. Demeanour alone is not a reliable measure of credibility or reliability but may play a limited role in assessing the testimonial veracity of a witness: R. v. Parent, 2000 BCPC 11 at para. 5.

[85]      A trier of fact may believe none, some or all of a witness’s evidence and may attach different weights to different aspects of a witness’s evidence. What a judge may not do is make determinations of fact by relying on any preconceived notions of human behaviour arising from stereotypical or ungrounded common-sense assumptions: R. v. Campbell, 2023 BCCA 19. That is not to say that a judge is precluded from weighing the sense or logic of a witness’s evidence and drawing logical and common-sense inferences arising from context-specific and case-specific evidence: see Campbell at para. 49; R. v. R.K.K., 2022 BCCA 17, at para. 39.

[86]      The prosecution must establish, beyond a reasonable doubt, that Mr. Fung knew or was wilfully blind to the fact that the boxes in the Ward Street garage and in the U-Haul he was operating on January 23, 2019, contained contraband tobacco.

[87]      Possession in the criminal law requires proof that the accused had the requisite knowledge of the criminal character of the item in issue and a measure of control over it: R. v. D.L.W., 2013 BCSC 1327 at para. 288 and Beaver v. The Queen, 1957 CanLII 14 (SCC).

[88]      Personal possession is established by knowledge of the character of the item and the accused’s manual handling, or physical contact with it. In the absence of manual handling, knowledge plus control of the item located within a sufficient degree of physical proximity may be sufficient to establish possession under law: R. v. Dill, 2020 BCSC 1453 at para. 26, citing R. v. Bird, 2020 ABCA 236.

[89]      Constructive possession arises where the accused has knowledge of the character of the item, and knowingly keeps the item lodged with any person or at any place for the use or benefit of themselves or other persons: R. v. Morelli, 2010 SCC 8 at paras. 16-17.

[90]      The court must determine whether the evidence, both direct and circumstantial, establishes beyond a reasonable doubt that Mr. Fung knew, in the sense of having actual knowledge, that the boxes contained contraband cigarettes.

[91]      If the evidence does not support actual knowledge, the court must ask whether the prosecution has established that Mr. Fung was wilfully blind to the fact that the boxes contained contraband or illegal items.

[92]      In R. v. Edwards, 2020 BCCA 253 at paras. 49-68, Justice Willcock commented on the requisite “state of subjective awareness of a material fact that may be said to amount to wilful blindness”. Justice Willcock noted that the Crown must show circumstances that establish the existence of not just “mere suspicion” but a “heightened level of suspicion”. The court expressly refers to the comments of Doherty J.A. in R. v. Duong that liability under wilful blindness arises from “the decision not to inquire once real suspicions arise…”: Edwards, at para. 53.

[93]      The court in Edwards notes that the test in R. v. Briscoe, 2010 SCC 13, is that “strong suspicion”, or “suspicion to the point where the accused actually sees the need to make further inquiries” and fails to do so, is the standard for proof of wilful blindness. As noted at para. 66 of Edwards:

[94]      Guilty knowledge will attach where the circumstances are “so inherently suspicious” that a person can be taken to have been aware of the potential that the package contained contraband and chose not to make the necessary inquiries: R. v. Anderson, 2020 ONCA 780. To substitute for knowledge, the level of subjective suspicion must be high enough such that “it can almost be said that the accused actually knew”: R. v. Morrison, 2019 SCC 15 at para. 98.

[95]      In sum, to know the truth would fix the accused with guilty knowledge. Therefore, in the face of a heightened level of suspicion calling for the need to make an inquiry, an accused who deliberately fails to do so because they do not want to know the truth exposes themselves to liability under wilful blindness.

[96]      Mr. Fung relies on the defence of mistake of fact. He says he was duped into believing he was delivering kitchen utensils or restaurant supplies when he was in fact handling contraband tobacco. Mistake of fact amounts to a claim that the accused committed the actus reus of the offence while mistakenly perceiving facts that negate, or raise a reasonable doubt about, as to the fault element.

[97]      In R. v. Ewanchuk, 1999 CanLII 711 (SCC), [1999] 1 SCR 330, the SCC adopted the dissenting reasons of Dickson J. (as he then was) in Pappajohn:

[98]      Mr. Fung refers to the decisions of R. v. Chen, 2018 BCSC 1996, R. v. Kandola, 2018 BCPC 325, and R. v. Ma, 2019 BCPC 292. Justice Ward in R. v. Chen, at para. 46, notes:

[99]      I have considered Mr. Fung’s statement that he believed that he was delivering boxes of kitchen supplies and have weighed this evidence in the context of the evidence as a whole. I have very little confidence that Mr. Fung is telling the court the truth about his knowledge of what he was tasked with delivering prior to, and specifically on, January 23, 2019.

[100]   Mr. Fung’s overall evidence was replete with half turns and reversals from his prior evidence, and interspersed with evasion and argument. He was not prepared to commit to simple facts such as: that the period of his involvement in delivery work was between the Fall of 2018 and January 2019; or that the U-Haul was likely a rental vehicle; or that unloading his MPV took a matter of minutes and unloading the U-Haul van generally took longer but well under an hour. During cross-examination, many of the questions had to be repeated multiple times to get a responsive answer. This was not due to issues of interpretation but to obfuscation.

[101]   Mr. Fung’s testimony would change almost within seconds. As one example, he pivoted from saying he did only four delivery jobs to denying this number, then suggested an uncertain number due to the passage of time. Moments earlier in his evidence he had confirmed that he drove a U-Haul van 2 to 3 times and used his MPV van more frequently than the U-Haul to make deliveries.

[102]   Mr. Fung’s evidence of the use of his Mazda MPV van and its purported sale to Michael Li raises very significant questions about his credibility. His evidence was that excluding his delivery work, his employment earnings over half the year were $3,000 per month and employment insurance benefits were $2,000 per month, for a total annual income of $30,000. He was prepared to hand over a significant asset, a 2000 Mazda, to Michel Li who was paying him about $100-$150 per delivery job. The sale arrangement was unorthodox in that it was an unregistered sale of the vehicle to Michael Li.

[103]   During his cross-examination, Mr. Fung changed his evidence about the sale of his MPV van to Michael Li, saying he let him “borrow” it at first, and later sold it to him. Mr. Fung gave Mr. Li the MPV keys, or at least one set of keys, and agreed he continued to use the MPV after the sale to make deliveries for Michael Li.

[104]   Mr. Fung was not able to provide any concrete details as to when he transferred the MPV to Mr. Li, or how long he waited to be paid for it, professing a complete lack of memory due to the passage of time. He acknowledged not telling Ms. Mo and Mr. Lai that he had not been paid for his vehicle. Although he felt defrauded by Mr. Li’s non-payment he did not report the matter to police. He took no steps to secure the return of his asset.

[105]   In my judgment, Mr. Fung’s explanations for parting with his MPV, and not securing payment, were highly implausible in the context of his overall limited earnings and payments by Mr. Li of only $100-$150 per delivery.

[106]   Mr. Fung testified to having no knowledge or suspicion that the boxes he handled and delivered contained contraband tobacco. His understanding was that he was delivering boxes of eating utensils and plates from China, typically used in Chinese restaurants. Mr. Fung was cross-examined about whether the plates and utensils in the boxes ever made noise on being moved. He revised his evidence to add that the boxes might contain items beyond plates and utensils, such as toothpicks or chopsticks that would not make noise.

[107]    Mr. Fung said he believed he was delivering restaurant supplies. Yet his deliveries were never to a specified restaurant or business address. The deliveries were person-to-person handovers in parking lots. It would be speculation to say there might have been a restaurant nearby the parking lot when it would be far easier to deliver right to such nearby premises.

[108]   Mr. Fung quibbled with the proposition that the boxes were uniform in size and weight, with printed stickers such as those found in the Ward Street garage. His evidence was inconsistent with the photographic evidence of the half-case boxes, all of a similar size and weight.

[109]    Mr. Fung’s job required him to use the Ward Street garage as a hub to deliver boxes to and remove boxes from the garage. He used a ledger in the garage to record the number of boxes coming in or going out. Although he denies all the ledger entries are in his handwriting, the majority of the written number entries are highly consistent in shape and size with his admitted written entry of the morning of January 23, 2019. I find that he maintained the ledger to record the stock brought to or removed from the garage for local delivery. I am satisfied that he organized and stacked the stock in accordance with the brand initials on the label on the outside of the box.

[110]   Mr. Fung was tasked with delivering boxes to customers. He said he received verbal orders to deliver supplies, and not any written waybills or purchase orders. He received no paperwork to pass on to customers to sign. In my view, verbally placed orders for customer delivery could only be properly executed if the person loading the boxes knew the correct brand to select for that customer. The only rational inference that can be made is that Mr. Fung knew what the markings on the outside of the boxes stood for and selected the appropriate brand for the requested order. In the absence of paperwork, it is a fair inference that during handoffs customers were likely to verbally confirm the amount and type or brand of product they were receiving. It beggars belief that these were completely wordless transfers or transactions without reference to the contents of the boxes.

[111]   Mr. Fung testified that he was ignorant of the fact that his long-time acquaintance, Ms. Mo, was also involved in the same type delivery work. This is inconsistent with the fact that Mr. Fung and his MPV were seen at Ms. Mo’s residence on the day of his delivery on November 28, 2018. On January 23, 2019, Ms. Mo arrived at the Ward Street residence after Mr. Fung decided or was directed to not unload the U-Haul. His claim of being ignorant of Ms. Mo’s connection with the enterprise is not credible.

[112]   Mr. Fung denies collecting cash on delivery of the boxes and said he only received one envelope the contents of which he did not know or suspect to be cash.

[113]   Mr. Fung was paid cash for his services in delivering orders for Michael Li. Cash payments, standing alone, are neutral because many legitimate one-time or infrequent jobs can be paid in cash. It is now more the case that these types of payments are made by electronic transfer and leave an electronic trail. The absence of a record of payment is a relatively minor factor to be assessed as part of the totality of the evidence.

[114]   I find that there is insufficient evidence to find that Mr. Fung was personally involved in renting the U-Haul vans and the video evidence of a second male accompanying the renter at the U-Haul rental location on January 23, 2019, is of poor quality and not of assistance in identifying the second male as Mr. Fung. However, Mr. Fung was seen driving the U-Haul within an hour after it was rented, arriving at the Ward Street garage.

[115]   There is uncontroverted evidence that boxes of contraband cigarettes that were stored at the Richmond warehouse site were delivered to Vancouver for hand-off to others. Mr. Fung took possession of the U-Haul van in Vancouver for a segment of its journey, taking over from another driver arriving from Richmond with the product, and moving it to the Ward Street garage, or handing off the empty U-Haul to another driver to reload with product or to return to the rental facility. Such change or transfer of U-Haul drivers in Vancouver, particularly for driving short distances within a narrow geographic area for no discernible reason, raises a high level of suspicion about the purpose of the handover or the contents of the shipment.

[116]   In the early afternoon of January 23, 2019, Mr. Fung arrived with another load in the U-Haul. He entered the garage but did not start to unload the boxes from the U-Haul van. He suggested in cross-examination that maybe the garage was too full to accommodate the second load. Mr. Fung’s somewhat off-hand suggestion of insufficient room to unload boxes into the garage developed over his cross-examination into a concrete and firm opinion.

[117]   This is at odds with the photographic evidence of evident space in the garage for further storage. Mr. Fung had already been to the garage to unload the first load that morning and can be taken to know how much space remained. A shortage of space, had that been the case, is a fact he could have communicated prior to taking the second load. That he went into the garage but did not even unload as much of the shipment as in his opinion could be warehoused, suggests it was not absence of space that was driving his thinking and conduct.

[118]   Mr. Fung by the end of his cross on this point said he did tell Mr. Li by phone of the lack of space. He said Mr. Li told him to drive to a nearby location and leave the U-Haul there and leave. He said he had no further interactions with anyone about the delivery job thereafter. When he was asked about the U-Haul key, he circled back to revise his evidence to admit that he did in fact meet with Mr. Li that very day to hand over the van keys.

[119]   Mr. Fung’s evidence on his instructions from Mr. Li as to where to move the U-Haul took on additional undisclosed details as he was confronted in cross-examination.

[120]   Mr. Fung’s evidence as to the series of telephone calls between him and Mr. Lai on January 23 being about their mutual health concerns is simply not credible. In my judgment, the phone calls related to the reason why Mr. Fung felt it was not safe to handle the U-Haul cargo at the Ward Street garage. In my view, something spooked Mr. Fung, either Mr. Headridge’s presence in the lane again in the afternoon, or Mr. Headridge looking into the Ward Street residence from a neighbouring property or he noted some other member of the surveillance team.

[121]   Mr. Fung submits that his driving away from the Ward Street garage was an innocent act and not evidence of a guilty mind trying to shake surveillance. Mr. Fung submits he still had the contraband in the U-Haul hold and driving away with it does not make sense if he were trying to avoid liability for possessing contraband.

[122]   I find that Mr. Fung drove the U-Haul in a hurry and abandoned it in a nearby neighbourhood. He did not check with anyone at the address in front of where he parked. He left the area after parking the U-Haul van. It is difficult to reconcile how a heretofore-secure garage with apparent storage room would be passed over in favour of the boxes being left in a van on a side street in front of a random residence. Mr. Fung could not explain this in any satisfactory way. The only logical inference is that he did so to distance himself from the risk of discovery of contraband in the garage and the U-Haul.

[123]   I have not gone into all the details and circumlocutions evident during Mr. Fung’s testimony. Even after accounting for evidence given through an interpreter, Mr. Fung’s testimony was neither credible nor reliable. His evidence was internally inconsistent, and at odds with other evidence.

[124]   The evidence of MOF investigators was credible and reliable as to their observations. I found Investigator Headridge in particular to be a careful observer and his testimony withstood effective cross-examination.

[125]   Proof of the purpose or intention behind the possession of the tobacco in this case depends largely on as assessment of the circumstantial evidence.

[126]   The Supreme Court of Canada in R. v. Villaroman, 2016 SCC 33 at para. 55 stated that where the Crown's case depends on circumstantial evidence, the question is whether the trier of fact, acting judicially, could reasonably be satisfied that the accused's guilt is the only reasonable conclusion available on the totality of the evidence.

[127]   The SCC directed the fact-finder to proceed with caution in drawing inferences from circumstantial evidence. At paras. 36-38 of Villaroman, the following instructions are set out:

[128]   The duty of the court is to examine the evidence in its totality to determine whether collectively the evidence provides the level of certitude necessary to meet the criminal standard for conviction. In assessing the circumstantial evidence, the trier of fact must ask whether there are any plausible theories or other reasonable possibilities which are inconsistent with guilt. If there are reasonable inferences other than guilt, the Crown's evidence does not meet the standard of proof beyond a reasonable doubt: Villaroman, at para 35.

[129]   I find that the direct and circumstantial evidence establishes the following:

[130]   I turn now to assessing Mr. Fung’s contention that he sincerely and honestly believed that he was delivering kitchen supplies to customers of Michael Li. As noted in R. v. Chen, at para. 34, one of the considerations as to whether the mistaken belief was genuinely held is the reasonableness of the belief.

[131]   Mr. Fung’s case is quite distinguishable from the cases on which he relies, where contractors tending to marijuana grow operations satisfied themselves, albeit wrongly, by looking at documents purporting to show valid licences to persuade themselves that they were lawfully entitled to be employed in the operation. In R. v. Chen, the accused was found to be generally credible and was shown a document purporting to be a valid licence on which he relied without appreciating that it was for a much smaller operation. Similarly, in R. v. Ma, the accused was shown an expired licence and the court found that the mistake as to the ongoing legality of the operation was honestly held.

[132]   In Chen and Ma, the genuineness of their state of mind, or their honestly held belief, as to the legality of their grow-operation was supported in part by documentary evidence of grow-operation licences. There is no documentary evidence in this case of invoices for restaurant supplies, restaurant addresses on boxes, deliveries to kitchens or restaurants to give credence to or raise a doubt about what Mr. Fung believed he was delivering.

[133]   As already noted, Mr. Fung’s testimony was so deficient in veracity to call for its rejection. There is no credible evidence in Mr. Fung’s case that allows for a finding that he genuinely believed that he was delivering restaurant supplies. His acceptance of and reliance on any suggestion that he was delivering restaurant supplies was not reasonable. I reject Mr. Fung’s evidence that he was acting under a mistaken belief of fact as to what he was delivering, and his evidence does not raise a reasonable doubt as to his state of mind on this point.

[134]   In my judgment, I find it proven beyond a reasonable doubt that Mr. Fung was knowingly involved in the Vancouver end of the contraband cigarettes enterprise. The Ward Street garage was a hub for the receipt of contraband product for delivery to customers and Mr. Fung was knowingly involved in that operation. Mr. Fung had enough insider knowledge about the operation to maintain stock and to fulfil orders correctly. A highly probative basis to find that Mr. Fung did know that he was in possession of contraband tobacco was his attempt to separate himself from any connection to the larger cache of cargo in the garage by driving away and then from the U-Haul cargo by abandoning it.

[135]   As noted in R. v. Calnen, 2019 SCC 6, post-offence conduct has probative value when assessed in the context of all the evidence in the case. It is not fundamentally different from other kinds of circumstantial evidence. It may permit the trier of fact to determine what motivation the accused had for his action: R. v. White, 1998 CanLII 789 (SCC), [1998] 2 SCR 72 and R. v. White, 2011 SCC 13 at paras. 20-22. I would not characterize the drive strictly as post-offence conduct because Mr. Fung was still in possession of the contraband tobacco when he drove away and abandoned the U-Haul. His conduct is however very probative evidence of guilty knowledge.

[136]   In the alternative, a path of liability can be established under wilful blindness. In this case, the totality of the circumstances were so highly suspicious as to put Mr. Fung on notice that he could not rely on any assurance that he was delivering restaurant supplies. The unusual change of the U-Haul drivers within short distances, the same size and shape of boxes delivered to different customers, the lack of delivery to any restaurant or business, the use of a separate phone for communication for the delivery jobs, the lack of invoices or waybills, all pointed to something highly suspicious. Mr. Fung deliberately chose not to make inquiries that were warranted in the circumstances facing him. He said he was there to do the job, not to ask questions, indicating that he did not want to be armed with culpable knowledge by making any inquiries.

[137]   In the result, I have rejected the evidence of Mr. Fung that he did not know he was handling and delivering contraband tobacco and his evidence on this issue does not raise a reasonable doubt in my mind as to his guilt. I have considered whether the circumstantial evidence is reasonably capable of supporting an inference other than guilt and I find that viewed in its totality it does not.  I find on a totality of the evidence, direct and circumstantial, that the prosecution has proven beyond a reasonable doubt Mr. Fung was in knowing possession of unstamped tobacco products on January 23, 2019. I find Mr. Fung guilty of Count 1 and Count 2 of the Indictment.