The crown dropped 75 of the counts and Furlong Foods pleaded guilty to two counts — one charge of marketing without a licence and one processing without a licence.
Furlong Foods defence counsel John Mate said the problem stemmed from Furlong Brothers company making an application after running into financial difficulty in 2010 when it lost $800,000 from an American company that didn’t pay them after it went bankrupt.
“They were out $800,000 and that basically destroyed the company. They went into receivership and Beothuk ultimately bought the plant and the Furlong family incorporated this new company called Furlong Foods with the intention of operating a smaller-scale operation,” Mate said.
Beothuk supported them and helped in transferring the processing licence to Furlong Foods, Mate said.
Mate said they ran into trouble when Workers Compensation and the province made them pay what was owed in licensing fees from the Furlong Brothers company.
The brothers maintained while they were the same people, they were now a different company and it was not fair to have to pay those fees.
The Canada Food Inspection Agency approved the plant, but the only holdout was Workers Compensation and it wanted licensing fees going back several years.
“They wanted Furlong Foods to pay Furlong Brothers’ licensing fees. There was a bit of a holdout, and during that period they accepted delivery of some codfish and had some fishcakes that they sold to a couple grocery stores. That’s all it takes to violate this legislation,” Mate said.
Mate said it is a situation with over-regulation and it’s unfortunate.
“If I have a company and it goes bankrupt and I start up a new company, that company is a separate legal person. You can’t go trying to make them pay,” Mate said.
“If you look at the definition of processing, (it) is so wide open, simply freezing is considered processing. That’s part of the issue and I know it’s there for protection, but I think we went too far and I think we are in the process of scaling it back a bit. We went from 30 to 40 years ago having no regulation and doing anything you wanted to having too much regulation.”
Crown prosecutor Danny Vavasour declined comment on the decision.