After being indicted for instructing the commission of an offence for an organized criminal organization, assault with a weapon, assault, unlawful confinement, and trafficking and conspiring to traffic cocaine and heroin, Mr. Terezakis and his co-accused challenged the constitutional validity of s 467.13 of the Criminal Code, the legal basis of the instruction charge, for being too vague and overbroad. They argued that the provisions infringe the right to freedom of association guaranteed by s 2(d) of the Canadian Charter of Rights and Freedoms largely because through their excessive breadth they attached significant criminal consequences to lawful, as well as unlawful, association. Moreover, they argued that the provisions in their practical application violated an accused person’s fair trial rights as guaranteed by ss 7 and 11(d) of the Charter because they allow for the introduction of the most damaging evidence of bad character and encourage a reasoning process that derives guilt from association. The challenge was heard before the trial with jury began.

The judge observed that the term “group, however organised” standing alone has a potentially vast field of application. She noted that under Canadian law this term is subject to a number of conditions in relation to size and the condition that one of the main purposes or main activities of the group is the facilitation or commission of a serious offence. However, in relation to the phrase “activity”, the judge noted that a group may engage in a main activity unrelated to the characterizing purpose or feature of the group. Therefore, the definition does not require a nexus between the characteristic of the group and the serious offence or activity in which it engages. The judge contrasted this with the definition contained in Article 2 of the United Nations Convention against Transnational Organized Crime which refers several times to the purpose of committing serious crime as bringing together the members of the group. The Court observed that there may be many circumstances in which a person is fully aware of the existence of a group that devotes itself to serious crime but is unaware that he or she may be considered part of that group. This is especially so where that person engages in crime at the periphery of the serious crime to which the group is dedicated. The Court concluded that s 467.13, together with the s 467.1(1) definition of “criminal organization”, "do not provide a meaningful basis for a person to determine whether he or she is one of the persons who constitute a criminal organisation “group” and does not provide the necessary guidance to law enforcement officials".

Likewise, the trial judge addressed the limiting elements of the instruction offence, finding that the term "persons who constitute a criminal organization" is very broad and could extend to a wide range of persons. She noted, for instance, it could extend to those within the group who may share an innocent main purpose but who do not share the goal of the facilitation or commission of criminal activity held by a subset of the group, and indeed might be unaware of that criminal activity.

Furthermore, as the appellate court later put it in R v Terezakis, 2007 BCCA 384, the trial judge "accepted that a person who "knowingly instructs" the commission of an offence must be in a position of authority but she rejected the submission of  counsel for the Attorneys General that the person giving the instruction must necessarily be a member of the criminal organization and aware of that fact. In her view, the instructing person's position of authority may be unrelated to the group and the person may commit an offence in close connection with the criminal organization without being a member of the group. She noted that the instructed offence does not have to be a serious offence and extends to any offence under a federal statute."

For these reasons, the judge held that the offence violated the Canadian Charter of Rights and Freedoms for being either vague or overbroad and quashed the count of instruction on the indictment.

Following the pre-trial hearing, in which the charge of instruction was quashed, Mr. Terezakis pleaded guilty to three serious drug offences at the beginning of his trial before a jury, and the charges against his co-accused were severed. The Crown proceeded against Mr. Terezakis on the remaining twelve counts (eight counts of assault, three counts of assault with a weapon and one count of unlawful confinement) and, following a jury trial, he was found guilty of seven counts of assault and three counts of assault with a weapon. He received a total sentence of eleven-and-a-half years' imprisonment.

This appeal concerned the pre-trial declaration quashing count 1 of an indictment charging the accused with the criminal organization offence of "instruction". The trial judge concluded that the section establishing the offence, s.467.13 of the Criminal Code, was unconstitutional for being vague and overbroad.

The Court of Appeal of British Columbia disagreed and overturned the decision of the trial judge. The court held that Canada’s definition of criminal organization was constitutionally sound. Accordingly, the appeal was allowed and the order quashing count 1 of the indictment was vacated.

Among other observations, Justice Mackenzie, with whom Justice Newbury and Justice Chiasson agreed, noted that:

“The trial judge erred in interpreting main activities to extend the definition of criminal organization to include persons who are part of a group without a main criminal purpose and have no common involvement with others in the group in a main criminal activity. As I read the definition the persons who compose the group must share a main purpose or activity that involves the facilitation or commission of serious offences. A person who does not share such a purpose or activity is not part of the group”.

Justice Mackenzie went on to find that:

“The trial judge observed that the authority exercised in the instruction by a "person who knowingly instructs, directly or indirectly, any person to commit an offence ..." did not have to emanate from the position of the instructing person in the criminal organization. She was concerned that the instruction offence could be committed by a person who was not aware that he or she was one of the persons who constitute the criminal organization. In reaching that conclusion, she noted that the instructed person could be "any person", unconnected to the organization, implying in her view a broader scope to the s. 467.13 instruction offence. The trial judge's concern is met once it is determined that the instruction offence requires subjective knowledge that the instructing person is part of the criminal organization. That knowledge plus the fact that the instructed offence must be connected to the criminal organization avoids the risk of an overbroad ambit to the offence and I do not think that the fact that the source of the instructing person's authority may be outside the criminal organization is problematic”.