SUPREME
COURT OF CANADA
Between:
Imperial Tobacco
Canada Limited
Appellant
v.
Her Majesty the
Queen in Right of British Columbia
Respondent
AND BETWEEN:
Imperial Tobacco
Canada Limited
Appellant
v.
Attorney General
of British Columbia
Respondent
AND BETWEEN:
Rothmans, Benson
& Hedges Inc.
Appellant
v.
Her Majesty the
Queen in Right of British Columbia
Respondent
AND BETWEEN:
Rothmans, Benson
& Hedges Inc.
Appellant
v.
Attorney General
of British Columbia
Respondent
AND BETWEEN:
JTI‑Macdonald
Corp.
Appellant
v.
Her Majesty the
Queen in Right of British Columbia
Respondent
AND BETWEEN:
JTI‑Macdonald
Corp.
Appellant
v.
Attorney General
of British Columbia
Respondent
AND BETWEEN:
Canadian Tobacco
Manufacturers’ Council
Appellant
v.
Her Majesty the
Queen in Right of British Columbia
Respondent
AND BETWEEN:
British American
Tobacco (Investments) Limited
Appellant
v.
Her Majesty the
Queen in Right of British Columbia
Respondent
AND BETWEEN:
Philip Morris
Incorporated, Philip Morris International Inc.
Appellants
v.
Her Majesty the
Queen in Right of British Columbia
Respondent
‑ and ‑
Attorney
General of Ontario, Attorney General of Quebec,
Attorney
General of Nova Scotia, Attorney General of
New
Brunswick, Attorney General of Manitoba,
Attorney
General for Saskatchewan, Attorney General of
Alberta
and Attorney General of Newfoundland and Labrador
Interveners
Coram:
McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella
and Charron JJ.
Reasons for
Judgment:
(paras. 1 to 78)
|
Major J. (McLachlin C.J. and Bastarache, Binnie, LeBel,
Deschamps, Fish, Abella and Charron JJ. concurring)
|
______________________________
British
Columbia v. Imperial Tobacco Canada Ltd., [2005] 2
S.C.R. 473, 2005 SCC 49
Imperial
Tobacco Canada Limited Appellant
v.
Her Majesty
The Queen in Right of British Columbia Respondent
and
Imperial
Tobacco Canada Limited Appellant
v.
Attorney
General of British Columbia Respondent
and
Rothmans,
Benson & Hedges Inc. Appellant
v.
Her Majesty
The Queen in Right of British Columbia Respondent
and
Rothmans,
Benson & Hedges Inc. Appellant
v.
Attorney
General of British Columbia Respondent
and
JTI‑Macdonald
Corp. Appellant
v.
Her Majesty
The Queen in Right of British Columbia Respondent
and
JTI‑Macdonald
Corp. Appellant
v.
Attorney
General of British Columbia Respondent
and
Canadian
Tobacco Manufacturers’ Council Appellant
v.
Her Majesty
The Queen in Right of British Columbia Respondent
and
British
American Tobacco (Investments) Limited Appellant
v.
Her Majesty
The Queen in Right of British Columbia Respondent
and
Philip Morris
Incorporated and Philip Morris International Inc. Appellants
v.
Her Majesty
The Queen in Right of British Columbia Respondent
and
Attorney
General of Ontario, Attorney General of Quebec,
Attorney
General of Nova Scotia, Attorney General of
New
Brunswick, Attorney General of Manitoba,
Attorney
General for Saskatchewan, Attorney General of
Alberta and
Attorney General of Newfoundland and Labrador Interveners
Indexed
as: British Columbia v. Imperial Tobacco Canada Ltd.
Neutral
citation: 2005 SCC 49.
File
No.: 30411.
2005: June 8;
2005: September 29.
Present:
McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella
and Charron JJ.
on appeal from
the court of appeal for british columbia
Constitutional law — Division of powers — Extra‑territoriality
— Limitation on provincial legislation — Provincial legislation authorizing
civil actions by government of British Columbia against manufacturers of
tobacco products for recovery of health care expenditures incurred by
government in treating individuals exposed to those products — Tobacco
manufacturers sued by government challenging constitutional validity of
legislation — Whether legislation exceeds territorial limits on provincial
legislative jurisdiction — Constitution Act, 1867, s. 92(13) — Tobacco
Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30.
Constitutional law — Judicial independence — Provincial legislation
authorizing civil actions by government of British Columbia against
manufacturers of tobacco products for recovery of health care expenditures
incurred by government in treating individuals exposed to those products —
Whether legislation constitutionally invalid as being inconsistent with
principle of judicial independence — Whether rules of civil procedure contained
in legislation interfere with adjudicative role of court hearing action —
Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000,
c. 30.
Constitutional law — Rule of law — Provincial legislation
authorizing civil actions by government of British Columbia against
manufacturers of tobacco products for recovery of health care expenditures
incurred by government in treating individuals exposed to those products —
Whether legislation constitutionally invalid as offending rule of law — Whether
Constitution, through rule of law, requires legislation to be prospective,
general in character and devoid of special advantages for government (except
where necessary for effective governance), as well as to ensure fair civil
trial — Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000,
c. 30.
The Tobacco Damages and Health Care Costs Recovery Act (the
“Act”) authorizes an action by the government of British Columbia against
a manufacturer of tobacco products for the recovery of health care expenditures
incurred by the government in treating individuals exposed to those products.
Liability hinges on those individuals having been exposed to tobacco products
because of the manufacturer’s breach of a duty owed to persons in
British Columbia, and on the government having incurred health care
expenditures in treating disease in those individuals caused by such exposure.
The appellants, each of which was sued by the government pursuant to the Act,
challenged its constitutional validity. The British Columbia Supreme Court
dismissed the government’s actions, concluding that the Act was
unconstitutional because it failed to respect territorial limits on provincial
legislative jurisdiction. The Court of Appeal set aside the decision, finding
that the Act’s pith and substance is “Property and Civil Rights in the
Province” within the meaning of s. 92(13) of the Constitution Act, 1867 ,
and that the extra‑territorial aspects of the Act, if any, are incidental
to it. The court also found that the Act does not offend judicial independence
or the rule of law.
Held: The appeals should be dismissed. The Act is
constitutionally valid.
The Act is not unconstitutional by reason of extra‑territoriality.
The cause of action that constitutes the pith and substance of the Act is
properly described as located “in the Province” under s. 92(13) of the Constitution
Act, 1867 . The Act is meaningfully connected to the province as there are
strong relationships among the enacting territory (British Columbia), the
subject matter of the law (compensation for the government of
British Columbia’s tobacco‑related health care costs) and the
persons made subject to it (the tobacco manufacturers ultimately responsible
for those costs). The Act also respects the legislative sovereignty of other
jurisdictions. Though the cause of action may capture, to some extent,
activities occurring outside of British Columbia, no territory could possibly
assert a stronger relationship to that cause of action than
British Columbia. The breaches of duty to which the Act refers are of
subsidiary significance to the cause of action created by it, and thus the
locations where those breaches might occur have little or no bearing on the
strength of the relationship between the cause of action and
British Columbia. [37‑38] [40] [43]
The Act does not violate the independence of the judiciary. A court
called upon to try an action brought pursuant to the Act retains at all times
its adjudicative role, and the ability to exercise that role without
interference. It must independently determine the applicability of the Act to
the government’s claim, independently assess the evidence led to support and
defend that claim, independently assign that evidence weight, then
independently determine whether its assessment of the evidence supports a
finding of liability. The fact that the Act shifts onuses of proof in respect
of some of the elements of an aggregate claim or limits the compellability of
certain information does not in any way interfere, in either appearance or
fact, with the court’s adjudicative role or any of the essential conditions of
judicial independence. Judicial independence can abide unconventional rules of
civil procedure and evidence. [55‑56]
The Act does not implicate the rule of law in the sense that the
Constitution comprehends that term. Except in respect of criminal law, the
retrospectivity and retroactivity of which is limited by s. 11 (g)
of the Canadian Charter of Rights and Freedoms , there is no requirement
of legislative prospectivity embodied in the rule of law or in any provision of
our Constitution. Nor does the Constitution, through the rule of law, require
that legislation be general in character and devoid of special advantages for
the government (except where necessary for effective governance), or that it
ensure a fair civil trial. In any event, tobacco manufacturers sued pursuant
to the Act will receive a fair civil trial: they are entitled to a
public hearing, before an independent and impartial court, in which they may
contest the claims of the plaintiff and adduce evidence in their defence. The
court will determine their liability only following that hearing, based solely
on its understanding of the law as applied to its findings of fact. That
defendants might regard the Act as unjust, or the procedural rules it
prescribes as unprecedented, does not render their trial unfair. [69] [73] [76‑77]
Applied: Air Canada v. British Columbia,
[1989] 1 S.C.R. 1161; Authorson v. Canada (Attorney
General), [2003] 2 S.C.R. 40, 2003 SCC 39; referred
to: JTI‑Macdonald Corp. v. British Columbia
(Attorney General) (2000), 184 D.L.R. (4th) 335,
2000 BCSC 312; Morguard Investments Ltd. v. De Savoye, [1990]
3 S.C.R. 1077; Hunt v. T&N plc, [1993]
4 S.C.R. 289; Unifund Assurance Co. v. Insurance Corp. of
British Columbia, [2003] 2 S.C.R. 63, 2003 SCC 40; Reference
re Upper Churchill Water Rights Reversion Act, [1984]
1 S.C.R. 297; Global Securities Corp. v. British Columbia
(Securities Commission), [2000] 1 S.C.R. 494,
2000 SCC 21; Reference re Firearms Act (Can.), [2000]
1 S.C.R. 783, 2000 SCC 31; Kitkatla Band v. British
Columbia (Minister of Small Business, Tourism and Culture), [2002]
2 S.C.R. 146, 2002 SCC 31; Fédération des producteurs de
volailles du Québec v. Pelland, [2005] 1 S.C.R. 292,
2005 SCC 20; General Motors of Canada Ltd. v. City National
Leasing, [1989] 1 S.C.R. 641; Reference re Remuneration of
Judges of the Provincial Court of Prince Edward Island, [1997]
3 S.C.R. 3; Ell v. Alberta, [2003] 1 S.C.R. 857,
2003 SCC 35; Application under s. 83.28 of the Criminal Code
(Re), [2004] 2 S.C.R. 248, 2004 SCC 42; Mackin v.
New Brunswick (Minister of Finance), [2002] 1 S.C.R. 405,
2002 SCC 13; MacKeigan v. Hickman, [1989]
2 S.C.R. 796; Valente v. The Queen, [1985]
2 S.C.R. 673; Beauregard v. Canada, [1986]
2 S.C.R. 56; R. v. Lippé, [1991] 2 S.C.R. 114; Babcock
v. Canada (Attorney General), [2002] 3 S.C.R. 3,
2002 SCC 57; Provincial Court Judges’ Assn. of New Brunswick v.
New Brunswick (Minister of Justice), [2005] 2 S.C.R. 286,
2005 SCC 44; R. v. Salituro, [1991] 3 S.C.R. 654; Hill
v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130; Wells
v. Newfoundland, [1999] 3 S.C.R. 199; Roncarelli v. Duplessis,
[1959] S.C.R. 121; Reference re Secession of Quebec, [1998]
2 S.C.R. 217; Reference re Manitoba Language Rights, [1985]
1 S.C.R. 721; Singh v. Canada (Attorney General), [2000]
3 F.C. 185; Bacon v. Saskatchewan Crop Insurance Corp. (1999),
180 Sask. R. 20; Cusson v. Robidoux, [1977]
1 S.C.R. 650; Notre‑Dame Hospital v. Patry, [1975]
2 S.C.R. 388; Landgraf v. USI Film Products,
511 U.S. 244 (1994); In re Spectrum Plus Ltd., [2005]
3 W.L.R. 58, [2005] UKHL 41.
Statutes
and Regulations Cited
Canadian Charter of Rights and Freedoms,
ss. 1 , 11 (d), (g).
Constitution Act, 1867 , preamble,
ss. 92 , 96 ‑100.
Constitution Act, 1982 , preamble.
Limitation Act, R.S.B.C. 1996,
c. 266, s. 6(1).
Tobacco Damages and Health Care Costs Recovery
Act, S.B.C. 2000, c. 30.
Tobacco Damages Recovery Act,
S.B.C. 1997, c. 41.
Authors Cited
British Columbia. Debates of the Legislative
Assembly, vol. 20, No. 6, 4th Sess., 36th Parl.,
June 7, 2000, p. 16314.
Edinger, Elizabeth. “Retrospectivity in Law”
(1995), 29 U.B.C. L. Rev. 5.
Elliot, Robin. “References, Structural
Argumentation and the Organizing Principles of Canada’s Constitution” (2001),
80 Can. Bar Rev. 67.
Hogg, Peter W. Constitutional Law of
Canada, vol. 1, loose‑leaf ed. Scarborough,
Ont.: Carswell, 1997 (updated 2003, release 1).
Hogg, Peter W., and Cara F. Zwibel.
“The Rule of Law in the Supreme Court of Canada” (2005), 55 U.T.L.J. 715.
Newman, Warren J. “The Principles of the Rule
of Law and Parliamentary Sovereignty in Constitutional Theory and Litigation”
(2005), 16 N.J.C.L. 175.
Sullivan, R. E. “Interpreting the Territorial
Limitations on the Provinces” (1985), 7 Sup. Ct. L. Rev. 511.
APPEALS from the judgments of the British Columbia Court of Appeal
(Lambert, Rowles and Prowse JJ.A.) (2004), 239 D.L.R. (4th) 412,
199 B.C.A.C. 195, 326 W.A.C. 195, 29 B.C.L.R.
(4th) 244, [2004] 9 W.W.R. 230, [2004] B.C.J. No. 1007
(QL), 2004 BCCA 269, reversing a decision of Holmes J. (2003),
227 D.L.R. (4th) 323, [2003] B.C.J. No. 1309 (QL),
2003 BCSC 877. Appeals dismissed.
David C. Harris, Q.C., William S. Berardino,
Q.C., and Andrea N. MacKay, for the appellant Imperial
Tobacco Canada Limited.
Kenneth N. Affleck, Q.C., James A. Macaulay,
Q.C., Steven Sofer, Michael Sobkin and Ian G. Christman,
for the appellant Rothmans, Benson & Hedges Inc.
Jack M. Giles, Q.C., Jeffrey J. Kay,
Q.C., and Dylana R. Bloor, for the appellant JTI‑Macdonald
Corp.
Written submissions only by Maryanne F. Prohl, for the
appellant Canadian Tobacco Manufacturers’ Council.
John J. L. Hunter, Q.C., Craig P. Dennis,
Matthew J. Westphal, for the appellant British American
Tobacco (Investments) Limited.
Simon Potter and Cynthia A. Millar, for
the appellants Philip Morris Incorporated and Philip Morris
International Inc.
Thomas R. Berger, Q.C., Daniel A. Webster,
Q.C., Elliott M. Myers, Q.C., and Craig E. Jones,
for the respondents.
Robin K. Basu and Mark Crow, for the intervener
the Attorney General of Ontario.
Alain Gingras and Brigitte Bussières, for the
intervener the Attorney General of Quebec.
Written submissions only by Edward A. Gores, for the
intervener the Attorney General of Nova Scotia.
John G. Furey, for the intervener the Attorney General
of New Brunswick.
Eugene B. Szach, for the intervener the Attorney
General of Manitoba.
Graeme G. Mitchell, Q.C., and R. James Fyfe,
for the intervener the Attorney General for Saskatchewan.
Robert Normey, for the intervener the Attorney General of
Alberta.
Donna Ballard and Barbara Barrowman, for the
intervener the Attorney General of Newfoundland and Labrador.
The judgment of the Court was delivered by
1
Major J. — The Tobacco
Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30 (the “Act”),
authorizes an action by the government of British Columbia against a
manufacturer of tobacco products for the recovery of health care expenditures
incurred by the government in treating individuals exposed to those products.
Liability hinges on those individuals having been exposed to tobacco products
because of the manufacturer’s breach of a duty owed to persons in British
Columbia, and on the government of British Columbia having incurred health care
expenditures in treating disease in those individuals caused by such exposure.
2
These appeals question the constitutional validity of the Act. The
appellants, each of which was sued by the government of British Columbia
pursuant to the Act, challenge its constitutional validity on the basis that it
violates: (1) territorial limits on provincial legislative jurisdiction; (2)
the principle of judicial independence; and (3) the principle of the rule of
law.
3
For the reasons that follow, the Act is constitutionally valid. The
appeals are dismissed, with costs to the respondents throughout.
I. Background
A. The Legislation
4
The Act, in its entirety, is reproduced in the Appendix. Its essential
aspects are summarized below.
5
Section 2(1) is the keystone of the Act. It reads:
The government has a direct and distinct action against a manufacturer
to recover the cost of health care benefits caused or contributed to by a
tobacco related wrong.
6
The terms “manufacturer”, “cost of health care benefits” and “tobacco
related wrong” are defined in s. 1(1) of the Act. Their definitions in turn
refer to other defined terms. Incorporating the definitions into s. 2, then
paraphrasing to some degree, the section provides as follows:
The government has a direct and distinct action against a manufacturer
for the present value of existing and reasonably expected future expenditures
by the government for
(a) benefits as defined under the Hospital Insurance Act or the Medicare
Protection Act;
(b) payments under the Continuing Care Act; and
(c) programs, services or benefits associated with disease,
where
(a) such expenditures result from disease or the risk of disease caused
or contributed to by exposure to a tobacco product; and
(b) such exposure was caused or contributed to by
(i) a tort committed in British Columbia by the manufacturer; or
(ii) a breach of a common law, equitable or statutory duty or
obligation owed by the manufacturer to persons in British Columbia who have
been or might have become exposed to a tobacco product.
7
Viewed in this light, s. 2(1) creates a cause of action by which the
government of British Columbia may recover from a tobacco manufacturer money
spent treating disease in British Columbians, where such disease was caused by
exposure to a tobacco product (whether entirely in British Columbia or not),
and such exposure was caused by that manufacturer’s tort in British Columbia,
or breach of a duty owed to persons in British Columbia.
8
The cause of action created by s. 2(1), besides being “direct and
distinct”, is not a subrogated claim: s. 2(2). Nor is it barred by the Limitation
Act, R.S.B.C. 1996, c. 266, s. 6(1). Crucially, it can be pursued on an
aggregate basis — i.e., in respect of a population of persons for whom the
government has made or can reasonably be expected to make expenditures: s.
2(4)(b).
9
Where the government’s claim is made on an aggregate basis, it may use
statistical, epidemiological and sociological evidence to prove its case: s.
5(b). It need not identify, prove the cause of disease or prove the
expenditures made in respect of any individual member of the population on
which it bases its claim: s. 2(5)(a). Furthermore, health care records and
related information in respect of individual members of that population are not
compellable, except if relied upon by an expert witness: s. 2(5)(b) and (c).
However, the court is free to order the discovery of a “statistically
meaningful sample” of the health care records of individual members of that
population, stripped of personal identifiers: s. 2(5)(d) and (e).
10
Pursuant to s. 3(1) and (2), the government enjoys a reversed burden of
proof in respect of certain elements of an aggregate claim. Where the
aggregate claim is, like the one brought against each of the appellants, to
recover expenditures in respect of disease caused by exposure to cigarettes,
the reversed burden of proof operates as follows. Once the government proves
that
(a) the defendant manufacturer
breached a common law, equitable or statutory duty or obligation it owed to
persons in British Columbia who have been or might become exposed to
cigarettes;
(b) exposure to cigarettes can cause
or contribute to disease; and
(c) during the manufacturer’s breach,
cigarettes manufactured or promoted by the manufacturer were offered for sale
in British Columbia,
the court will
presume that
(a) the population that is the basis
for the government’s aggregate claim would not have been exposed to cigarettes
but for the manufacturer’s breach; and
(b) such exposure caused or
contributed to disease in a portion of the population that is the basis for the
government’s aggregate claim.
11
In this way, it falls on a defendant manufacturer to show that its
breach of duty did not give rise to exposure, or that exposure resulting from
its breach of duty did not give rise to the disease in respect of which the
government claims for its expenditures. The reversed burden of proof on the
manufacturer is a balance of probabilities: s. 3(4).
12
Where the aforementioned presumptions apply, the court must determine
the portion of the government’s expenditures after the date of the
manufacturer’s breach that resulted from exposure to cigarettes: s. 3(3)(a).
The manufacturer is liable for such expenditures in proportion to its share of
the market for cigarettes in British Columbia, calculated over the period of
time between its first breach of duty and trial: ss. 3(3)(b) and 1(6).
13
In an action by the government, a manufacturer will be jointly and
severally liable for expenditures arising from a joint breach of duty (i.e.,
for expenditures caused by disease, which disease was caused by exposure, which
exposure was caused by a joint breach of duty to which the manufacturer was a
party): s. 4(1).
14
Pursuant to s. 10, all provisions of the Act operate retroactively.
15
The Act is the second British Columbia statute designed to enable the
government to sue tobacco manufacturers for tobacco-related health care costs
that has been challenged on the basis of its constitutionality. The Supreme
Court of British Columbia struck down the earlier statute, the Tobacco
Damages Recovery Act, S.B.C. 1997, c. 41, as being in pith and substance
legislation in relation to extra-provincial civil rights and therefore ultra
vires the Legislative Assembly of British Columbia: see JTI-Macdonald
Corp. v. British Columbia (Attorney General) (2000), 184 D.L.R. (4th) 335,
2000 BCSC 312.
16
The legislative history of the Act confirms that it was drafted to
address concerns about the extra-territorial aspects of the earlier statute and
to avoid any further challenges with respect to extra-territoriality: see Debates
of the Legislative Assembly, vol. 20, No. 6, 4th Sess., 36th Parl., June 7,
2000, at p. 16314.
B. Procedural History
17
On January 24, 2001, the Act came into force. On the same day, the
government sued 14 entities in the tobacco industry in the Supreme Court of
British Columbia, pursuant to s. 2 of the Act.
18
The appellants are among the 14 entities sued by the government. The
appellants Imperial Tobacco Canada Limited, Rothmans, Benson & Hedges Inc.,
JTI‑Macdonald Corp. and Canadian Tobacco Manufacturers’ Council are
Canadian corporations, and were served in British Columbia. The appellants
Philip Morris Incorporated (now Philip Morris USA Inc.) and Philip Morris
International Inc. are incorporated under the laws of Virginia and Delaware,
respectively, and were served ex juris. The appellant British American
Tobacco (Investments) Limited is incorporated under the laws of the United
Kingdom, and was also served ex juris.
19
The Canadian appellants applied for a declaration that the Act is
unconstitutional. The appellants served ex juris applied to set aside
service on the basis that the Act is unconstitutional, and thus that the
government’s actions founded on it were bound to fail.
20
Throughout the proceedings, the appellants’ constitutional attack has
been essentially tripartite. They argue that the Act exceeds the territorial
limits on provincial legislative jurisdiction, violates judicial independence
and infringes the rule of law.
II. Judicial History
A. Supreme Court of British Columbia
(2003), 227 D.L.R. (4th) 323, 2003 BCSC 877
21
Holmes J. rejected the appellants’ submissions concerning judicial
independence and the rule of law, but accepted their submissions concerning
extra-territoriality. He concluded that the Act fails to respect territorial
limits on provincial legislative jurisdiction because, in his view, the
exposure to tobacco products giving rise to liability is territorially
unconfined, and the aim of the Act is recovery of health care costs “from the
tobacco industry nationally and internationally” (para. 222).
22
In the result, Holmes J. declared the Act invalid, dismissed the
government’s actions brought pursuant to the Act and set aside all ex juris
service by the government.
B. Court of Appeal for British Columbia
(2004), 239 D.L.R. (4th) 412, 2004 BCCA 269
23
The Court of Appeal for British Columbia allowed the respondents’
appeals. Lambert, Rowles and Prowse JJ.A. each gave reasons concluding that
the Act’s pith and substance is “Property and Civil Rights in the Province”
within the meaning of s. 92(13) of the Constitution Act, 1867 ; that the
extra-territorial aspects of the Act, if any, are incidental to it; and
therefore that the Act is not invalid by reason of extra-territoriality. All
agreed that the Act does not offend judicial independence or the rule of law.
24
In the result, the court dismissed the appellants’ applications for
declarations that the Act is invalid, set aside Holmes J.’s orders dismissing
the government’s actions and remitted to the Supreme Court of British Columbia
the applications of the appellants served ex juris to have service set
aside, with such applications to be decided on the basis that the Act is
constitutionally valid.
III. Issues
25
McLachlin C.J. stated the following constitutional questions:
1. Is the Tobacco Damages and
Health Care Costs Recovery Act, S.B.C. 2000, c. 30, ultra vires the
provincial legislature by reason of extra-territoriality?
2. Is the Tobacco Damages and
Health Care Costs Recovery Act, S.B.C. 2000, c. 30, constitutionally
invalid, in whole or in part, as being inconsistent with judicial independence?
3. Is the Tobacco Damages and
Health Care Costs Recovery Act, S.B.C. 2000, c. 30, constitutionally
invalid, in whole or in part, as offending the rule of law?
IV. Analysis
A. Extra-territoriality
26
Section 92 of the Constitution Act, 1867 is the primary source of
provincial legislatures’ authority to legislate. Provincial legislation must
therefore respect the limitations, territorial and otherwise, on provincial
legislative competence found in s. 92 . The opening words of s. 92 — “In each
Province” — represent a blanket territorial limitation on provincial powers.
That limitation is echoed in a similar phrase that qualifies a number of the
heads of power in s. 92 : “in the Province”.
27
The territorial limitations on provincial legislative competence reflect
the requirements of order and fairness underlying Canadian federal arrangements
and discussed by this Court in Morguard Investments Ltd. v. De Savoye,
[1990] 3 S.C.R. 1077, at pp. 1102-3, Hunt v. T&N plc, [1993] 4
S.C.R. 289, at pp. 324-25, and Unifund Assurance Co. v. Insurance Corp. of
British Columbia, [2003] 2 S.C.R. 63, 2003 SCC 40, at para. 56. They serve
to ensure that provincial legislation both has a meaningful connection to the
province enacting it, and pays respect to “the sovereignty of the other
provinces within their respective legislative spheres”: Unifund, at
para. 51. See also, generally, R. E. Sullivan, “Interpreting the Territorial
Limitations on the Provinces” (1985), 7 Sup. Ct. L. Rev. 511.
28
Where the validity of provincial legislation is challenged on the basis
that it violates territorial limitations on provincial legislative competence,
the analysis centres on the pith and substance of the legislation. If its pith
and substance is in relation to matters falling within the field of provincial
legislative competence, the legislation is valid. Incidental or ancillary
extra-provincial aspects of such legislation are irrelevant to its validity.
See Reference re Upper Churchill Water Rights Reversion Act, [1984] 1
S.C.R. 297 (“Churchill Falls”), at p. 332, and Global Securities
Corp. v. British Columbia (Securities Commission), [2000] 1 S.C.R. 494,
2000 SCC 21, at para. 24.
29
In determining the pith and substance of legislation, the court
identifies its essential character or dominant feature: see Global
Securities Corp., at para. 22, and Reference re Firearms Act (Can.),
[2000] 1 S.C.R. 783, 2000 SCC 31, at para. 16. This may be done through
reference to both the purpose and effect of the legislation: see Kitkatla
Band v. British Columbia (Minister of Small Business, Tourism and Culture),
[2002] 2 S.C.R. 146, 2002 SCC 31, at para. 53. See also Fédération des
producteurs de volailles du Québec v. Pelland, [2005] 1 S.C.R. 292, 2005
SCC 20, at para. 20.
30
Where the pith and substance of legislation relates to a tangible matter
— i.e., something with an intrinsic and observable physical presence — the
question of whether it respects the territorial limitations in s. 92 is easy to
answer. One need only look to the location of the matter. If it is in the
province, the limitations have been respected, and the legislation is valid.
If it is outside the province, the limitations have been violated, and the
legislation is invalid.
31
Where legislation’s pith and substance relates to an intangible matter,
the characterization is more complicated. That is the case here.
32
The pith and substance of the Act is plainly the creation of a civil
cause of action. More specifically, it is the creation of a civil cause of
action by which the government of British Columbia may seek compensation for
certain health care costs incurred by it. Civil causes of action are a matter
within provincial legislative jurisdiction under s. 92(13) of the Constitution
Act, 1867 : “Property and Civil Rights in the Province”. See General
Motors of Canada Ltd. v. City National Leasing, [1989] 1 S.C.R. 641,
at p. 672.
33
But s. 92(13) does not speak to “Property and Civil Rights” located
anywhere. It speaks only to “Property and Civil Rights in the Province”.
And, to reiterate, it is, like all provincial heads of power, qualified by the
opening words of s. 92 : “In each Province”. The issue thus becomes how to
determine whether an intangible, such as the cause of action constituting the
pith and substance of the Act, is “in the Province”.
34
Churchill Falls dealt with a similar issue. In that case,
McIntyre J. was confronted with a Newfoundland statute, the pith and substance
of which was the modification of rights existing under a contract between
Churchill Falls (Labrador) Corporation Limited and Quebec Hydro-Electric
Commission. Since the entity possessing those rights (namely, the Commission)
was constituted in Quebec, and the parties had agreed that the Quebec courts
had exclusive jurisdiction to adjudicate disputes concerning their contract,
McIntyre J. regarded the rights created by that contract as situated in
Quebec. The Newfoundland law that purported to modify them was thus invalid.
It related to civil rights, but not to civil rights “in the Province”.
35
McIntyre J.’s approach to locating the civil rights constituting the
pith and substance of the Newfoundland legislation illustrates the role,
pointed out by Binnie J. in Unifund, at para. 63, that “the
relationships among the enacting territory, the subject matter of the law, and
the person[s] sought to be subjected to its regulation” play in determining the
validity of legislation alleged to be impermissibly extra-territorial in
scope. In Churchill Falls, an examination of those relationships
indicated that the intangible civil rights constituting the pith and substance
of the Newfoundland legislation at issue were not meaningfully connected to the
legislating province, and could properly be the subject matter only of Quebec
legislation. Put slightly differently, if the impugned Newfoundland
legislation had been permitted to regulate those civil rights, neither of the
purposes underlying s. 92 ’s territorial limitations would be respected. It
followed that those civil rights should be regarded as located beyond the
territorial scope of Newfoundland’s legislative competence under s. 92 .
36
From the foregoing it can be seen that several analytical steps may be
required to determine whether provincial legislation in pith and substance
respects territorial limits on provincial legislative competence. The first
step is to determine the pith and substance, or dominant feature, of the
impugned legislation, and to identify a provincial head of power under which it
might fall. Assuming a suitable head of power can be found, the second step is
to determine whether the pith and substance respects the territorial
limitations on that head of power — i.e., whether it is in the province. If
the pith and substance is tangible, whether it is in the province is simply a
question of its physical location. If the pith and substance is intangible,
the court must look to the relationships among the enacting territory, the
subject matter of the legislation and the persons made subject to it, in order
to determine whether the legislation, if allowed to stand, would respect the
dual purposes of the territorial limitations in s. 92 (namely, to ensure that
provincial legislation has a meaningful connection to the enacting province and
pays respect to the legislative sovereignty of other territories). If it
would, the pith and substance of the legislation should be regarded as situated
in the province.
37
Here, the cause of action that is the pith and substance of the Act
serves exclusively to make the persons ultimately responsible for
tobacco-related disease suffered by British Columbians — namely, the tobacco
manufacturers who, through their wrongful acts, caused those British Columbians
to be exposed to tobacco — liable for the costs incurred by the government of
British Columbia in treating that disease. There are thus strong relationships
among the enacting territory (British Columbia), the subject matter of the law
(compensation for the government of British Columbia’s tobacco-related health
care costs) and the persons made subject to it (the tobacco manufacturers
ultimately responsible for those costs), such that the Act can easily be said
to be meaningfully connected to the province.
38
The Act respects the legislative sovereignty of other jurisdictions.
Though the cause of action that is its pith and substance may capture, to some
extent, activities occurring outside of British Columbia, no territory could
possibly assert a stronger relationship to that cause of action than British
Columbia. That is because there is at all times one critical connection to
British Columbia exclusively: the recovery permitted by the action is in
relation to expenditures by the government of British Columbia for the health
care of British Columbians.
39
In assessing the Act’s respect for the territorial limitations on
British Columbia’s legislative competence, the appellants and the Court of
Appeal placed considerable emphasis on the question of whether, as a matter of
statutory interpretation, the breach of duty by a manufacturer that is a
necessary condition of its liability under the cause of action created by the Act
must occur in British Columbia. That emphasis was undue, for two reasons.
40
First, the driving force of the Act’s cause of action is compensation
for the government of British Columbia’s health care costs, not remediation of
tobacco manufacturers’ breaches of duty. While the Act makes the existence of
a breach of duty one of several necessary conditions to a manufacturer’s
liability to the government, it is not the mischief at which the cause of
action created by the Act is aimed. The Act leaves breaches of duty to be
remedied by the law that gives rise to the duty. Thus, the breaches of duty to
which the Act refers are of subsidiary significance to the cause of action
created by it, and the locations where those breaches might occur have little
or no bearing on the strength of the relationship between the cause of action
and the enacting jurisdiction.
41
Second, and in any event, the only relevant breaches under the Act are
breaches of duties (or obligations) owed “to persons in British Columbia” (s.
1(1) “tobacco related wrong” and s. 3(1)(a)) that give rise to health care
expenditures by the government of British Columbia. Thus, even if the
existence of a breach of duty were the central element of the Act’s cause of
action (it is not), the cause of action would remain strongly related to
British Columbia.
42
The question of whether other matters, such as exposure and disease, to
which the Act refers, must occur or arise in British Columbia is equally or
more irrelevant to the Act’s validity. Those matters too are conditions
precedent to success in an action brought pursuant to the Act and of subsidiary
significance to it.
43
It follows that the cause of action that constitutes the pith and
substance of the Act is properly described as located “in the Province”. The
Act is not invalid by reason of extra-territoriality, being in pith and
substance legislation in relation “Property and Civil Rights in the Province”
under s. 92(13) of the Constitution Act, 1867 .
B.
Judicial Independence
44
Judicial independence is a “foundational principle” of the Constitution
reflected in s. 11 (d) of the Canadian Charter of Rights and Freedoms ,
and in both ss. 96 -100 and the preamble to the Constitution Act, 1867 : Reference
re Remuneration of Judges of the Provincial Court of Prince Edward Island,
[1997] 3 S.C.R. 3, at para. 109. It serves “to safeguard our constitutional
order and to maintain public confidence in the administration of justice”: Ell
v. Alberta, [2003] 1 S.C.R. 857, 2003 SCC 35, at para. 29. See also Application
under s. 83.28 of the Criminal Code (Re), [2004] 2 S.C.R. 248, 2004 SCC 42,
at paras. 80-81.
45
Judicial independence consists essentially in the freedom “to render
decisions based solely on the requirements of the law and justice”: Mackin
v. New Brunswick (Minister of Finance), [2002] 1 S.C.R. 405, 2002 SCC 13,
at para. 37. It requires that the judiciary be left free to act without
improper “interference from any other entity” (Ell, at para. 18) — i.e.,
that the executive and legislative branches of government not “impinge on the
essential ‘authority and function’ . . . of the court” (MacKeigan
v. Hickman, [1989] 2 S.C.R. 796, at p. 828). See also Valente v. The
Queen, [1985] 2 S.C.R. 673, at pp. 686-87; Beauregard v. Canada,
[1986] 2 S.C.R. 56, at pp. 73 and 75; R. v. Lippé, [1991] 2 S.C.R. 114,
at pp. 152-54; Babcock v. Canada (Attorney General), [2002] 3 S.C.R. 3,
2002 SCC 57, at para. 57; and Application under s. 83.28 of the Criminal
Code (Re), at para. 87.
46
Security of tenure, financial security and administrative independence
are the three “core characteristics” or “essential conditions” of judicial
independence: Valente, at pp. 694, 704 and 708, and Reference re
Remuneration of Judges of the Provincial Court of Prince Edward Island, at
para. 115. It is a precondition to judicial independence that they be
maintained, and be seen by “a reasonable person who is fully informed of all
the circumstances” to be maintained: Mackin, at paras. 38 and 40, and Provincial
Court Judges’ Assn. of New Brunswick v. New Brunswick (Minister of Justice),
[2005] 2 S.C.R. 286, 2005 SCC 44, at para. 6.
47
However, even where the essential conditions of judicial independence
exist, and are reasonably seen to exist, judicial independence itself is not
necessarily ensured. The critical question is whether the court is free, and
reasonably seen to be free, to perform its adjudicative role without interference,
including interference from the executive and legislative branches of
government. See, for example, Application under s. 83.28 of the Criminal
Code (Re), at paras. 82-92.
48
The appellants submit that the Act violates judicial independence, both
in reality and appearance, because it contains rules of civil procedure that
fundamentally interfere with the adjudicative role of the court hearing an
action brought pursuant to the Act. They point to s. 3(2), which they say
forces the court to make irrational presumptions, and to ss. 2(5)(a), 2(5)(b)
and 2(5)(c), which they say subvert the court’s ability to discover relevant
facts. They say that these rules impinge on the court’s fact-finding function,
and virtually guarantee the government’s success in an action brought pursuant
to the Act.
49
The rules in the Act with which the appellants take issue are not as
unfair or illogical as the appellants submit. They appear to reflect
legitimate policy concerns of the British Columbia legislature regarding the
systemic advantages tobacco manufacturers enjoy when claims for tobacco-related
harm are litigated through individualistic common law tort actions. That,
however, is beside the point. The question is not whether the Act’s rules are
unfair or illogical, nor whether they differ from those governing common law
tort actions, but whether they interfere with the courts’ adjudicative role,
and thus judicial independence.
50
The primary role of the judiciary is to interpret and apply the law,
whether procedural or substantive, to the cases brought before it. It is to
hear and weigh, in accordance with the law, evidence that is relevant to the
legal issues confronted by it, and to award to the parties before it the
available remedies.
51
The judiciary has some part in the development of the law that its role
requires it to apply. Through, for example, its interpretation of legislation,
review of administrative decisions and assessment of the constitutionality of
legislation, it may develop the law significantly. It may also make
incremental developments to its body of previous decisions — i.e., the common
law — in order to bring the legal rules those decisions embody “into step with
a changing society”: R. v. Salituro, [1991] 3 S.C.R. 654, at p. 666.
See also Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130,
at paras. 91-92. But the judiciary’s role in developing the law is a
relatively limited one. “[I]n a constitutional democracy such as ours it is
the legislature and not the courts which has the major responsibility for law
reform”: Salituro, at p. 670.
52
It follows that the judiciary’s role is not, as the appellants seem to
submit, to apply only the law of which it approves. Nor is it to decide cases
with a view simply to what the judiciary (rather than the law) deems fair or
pertinent. Nor is it to second-guess the law reform undertaken by legislators,
whether that reform consists of a new cause of action or procedural rules to
govern it. Within the boundaries of the Constitution, legislatures can set the
law as they see fit. “The wisdom and value of legislative decisions are
subject only to review by the electorate”: Wells v. Newfoundland,
[1999] 3 S.C.R. 199, at para. 59.
53
In essence, the appellants’ arguments misapprehend the nature and scope
of the courts’ adjudicative role protected from interference by the
Constitution’s guarantee of judicial independence. To accept their position on
that adjudicative role would be to recognize a constitutional guarantee not of
judicial independence, but of judicial governance.
54
None of this is to say that legislation, being law, can never
unconstitutionally interfere with courts’ adjudicative role. But more is
required than an allegation that the content of the legislation required to be
applied by that adjudicative role is irrational or unfair, or prescribes rules
different from those developed at common law. The legislation must interfere,
or be reasonably seen to interfere, with the courts’ adjudicative role, or with
the essential conditions of judicial independence. As McLachlin C.J. stated in
Babcock, at para. 57:
It is well within the power of the legislature to enact laws, even laws
which some would consider draconian, as long as it does not fundamentally alter
or interfere with the relationship between the courts and the other branches of
government.
55
No such fundamental alteration or interference was brought about by the
legislature’s enactment of the Act. A court called upon to try an action
brought pursuant to the Act retains at all times its adjudicative role and the
ability to exercise that role without interference. It must independently
determine the applicability of the Act to the government’s claim, independently
assess the evidence led to support and defend that claim, independently assign
that evidence weight, and then independently determine whether its assessment
of the evidence supports a finding of liability. The fact that the Act shifts
certain onuses of proof or limits the compellability of information that the
appellants assert is relevant does not in any way interfere, in either
appearance or fact, with the court’s adjudicative role or any of the essential
conditions of judicial independence. Judicial independence can abide
unconventional rules of civil procedure and evidence.
56
The appellants’ submission that the Act violates the independence of the
judiciary and is therefore unconstitutional fails for the reasons stated above.
C. Rule of Law
57
The rule of law is “a fundamental postulate of our constitutional
structure” (Roncarelli v. Duplessis, [1959] S.C.R. 121, at p. 142) that
lies “at the root of our system of government” (Reference re Secession of
Quebec, [1998] 2 S.C.R. 217, at para. 70). It is expressly acknowledged by
the preamble to the Constitution Act, 1982 , and implicitly recognized in
the preamble to the Constitution Act, 1867 : see Reference re
Manitoba Language Rights, [1985] 1 S.C.R. 721, at p. 750.
58
This Court has described the rule of law as embracing three principles.
The first recognizes that “the law is supreme over officials of the government
as well as private individuals, and thereby preclusive of the influence of
arbitrary power”: Reference re Manitoba Language Rights, at p. 748.
The second “requires the creation and maintenance of an actual order of
positive laws which preserves and embodies the more general principle of
normative order”: Reference re Manitoba Language Rights, at p. 749.
The third requires that “the relationship between the state and the individual
. . . be regulated by law”: Reference re Secession of Quebec,
at para. 71.
59
So understood, it is difficult to conceive of how the rule of law could
be used as a basis for invalidating legislation such as the Act based on its
content. That is because none of the principles that the rule of law embraces
speak directly to the terms of legislation. The first principle requires that
legislation be applied to all those, including government officials, to whom
it, by its terms, applies. The second principle means that legislation must
exist. And the third principle, which overlaps somewhat with the first and
second, requires that state officials’ actions be legally founded. See R.
Elliot, “References, Structural Argumentation and the Organizing Principles of
Canada’s Constitution” (2001), 80 Can. Bar Rev. 67, at pp. 114-15.
60
This does not mean that the rule of law as described by this Court has
no normative force. As McLachlin C.J. stated in Babcock, at para. 54,
“unwritten constitutional principles”, including the rule of law, “are capable
of limiting government actions”. See also Reference re Secession of Quebec,
at para. 54. But the government action constrained by the rule of law as
understood in Reference re Manitoba Language Rights and Reference re
Secession of Quebec is, by definition, usually that of the executive and
judicial branches. Actions of the legislative branch are constrained too, but
only in the sense that they must comply with legislated requirements as to
manner and form (i.e., the procedures by which legislation is to be enacted,
amended and repealed).
61
Nonetheless, considerable debate surrounds the question of what additional
principles, if any, the rule of law might embrace, and the extent to which they
might mandate the invalidation of legislation based on its content. P. W. Hogg
and C. F. Zwibel write in “The Rule of Law in the Supreme Court of Canada”
(2005), 55 U.T.L.J. 715, at pp. 717-18:
Many authors have tried to define the rule of law and to explain its
significance, or lack thereof. Their views spread across a wide
spectrum. . . . T.R.S. Allan, for example, claims that laws
that fail to respect the equality and human dignity of individuals are contrary
to the rule of law. Luc Tremblay asserts that the rule of law includes the
liberal principle, the democratic principle, the constitutional principle, and
the federal principle. For Allan and Tremblay, the rule of law demands not
merely that positive law be obeyed but that it embody a particular vision of
social justice. Another strong version comes from David Beatty, who argues
that the ‘ultimate rule of law’ is a principle of ‘proportionality’ to which
all laws must conform on pain of invalidity (enforced by judicial review). In
the middle of the spectrum are those who, like Joseph Raz, accept that the rule
of law is an ideal of constitutional legality, involving open, stable, clear,
and general rules, even-handed enforcement of those laws, the independence of
the judiciary, and judicial review of administrative action. Raz acknowledges
that conformity to the rule of law is often a matter of degree, and that
breaches of the rule of law do not lead to invalidity.
See also W. J.
Newman, “The Principles of the Rule of Law and Parliamentary Sovereignty in
Constitutional Theory and Litigation” (2005), 16 N.J.C.L. 175, at pp.
177-80.
62
This debate underlies Strayer J.A.’s apt observation in Singh v.
Canada (Attorney General), [2000] 3 F.C. 185 (C.A.), at para. 33, that
“[a]dvocates tend to read into the principle of the rule of law anything which
supports their particular view of what the law should be.”
63
The appellants’ conceptions of the rule of law can fairly be said to
fall at one extreme of the spectrum of possible conceptions and to support
Strayer J.A.’s thesis. They submit that the rule of law requires that
legislation: (1) be prospective; (2) be general in character; (3) not confer
special privileges on the government, except where necessary for effective
governance; and (4) ensure a fair civil trial. And they argue that the Act
breaches each of these requirements, rendering it invalid.
64
A brief review of this Court’s jurisprudence will reveal that none of
these requirements enjoy constitutional protection in Canada. But before
embarking on that review, it should be said that acknowledging the
constitutional force of anything resembling the appellants’ conceptions of the
rule of law would seriously undermine the legitimacy of judicial review of
legislation for constitutionality. That is so for two separate but
interrelated reasons.
65
First, many of the requirements of the rule of law proposed by the
appellants are simply broader versions of rights contained in the Charter .
For example, the appellants’ proposed fair trial requirement is essentially a
broader version of s. 11 (d) of the Charter , which provides that
“[a]ny person charged with an offence has the right . . . to
. . . a fair and public hearing.” But the framers of the Charter
enshrined that fair trial right only for those “charged with an offence”. If
the rule of law constitutionally required that all legislation provide for a
fair trial, s. 11 (d) and its relatively limited scope (not to mention
its qualification by s. 1 ) would be largely irrelevant because everyone
would have the unwritten, but constitutional, right to a “fair . . .
hearing”. (Though, as explained in para. 76, the Act provides for a fair trial
in any event.) Thus, the appellants’ conception of the unwritten
constitutional principle of the rule of law would render many of our written
constitutional rights redundant and, in doing so, undermine the delimitation of
those rights chosen by our constitutional framers. That is specifically what
this Court cautioned against in Reference re Secession of Quebec, at
para. 53:
Given the existence of these underlying
constitutional principles, what use may the Court make of them? In [Reference
re Remuneration of Judges of the Provincial Court of Prince Edward Island],
at paras. 93 and 104, we cautioned that the recognition of these
constitutional principles . . . could not be taken as an invitation
to dispense with the written text of the Constitution. On the contrary, we
confirmed that there are compelling reasons to insist upon the primacy of our
written constitution. A written constitution promotes legal certainty and
predictability, and it provides a foundation and a touchstone for the exercise
of constitutional judicial review. [Emphasis added.]
66
Second, the appellants’ arguments overlook the fact that several
constitutional principles other than the rule of law that have been recognized
by this Court — most notably democracy and constitutionalism — very strongly
favour upholding the validity of legislation that conforms to the express terms
of the Constitution (and to the requirements, such as judicial independence,
that flow by necessary implication from those terms). Put differently, the
appellants’ arguments fail to recognize that in a constitutional democracy such
as ours, protection from legislation that some might view as unjust or unfair
properly lies not in the amorphous underlying principles of our Constitution,
but in its text and the ballot box. See Bacon v. Saskatchewan Crop
Insurance Corp. (1999), 180 Sask. R. 20 (C.A.), at para. 30; Elliot, at pp.
141-42; Hogg and Zwibel, at p. 718; and Newman, at p. 187.
67
The rule of law is not an invitation to trivialize or supplant the
Constitution’s written terms. Nor is it a tool by which to avoid legislative
initiatives of which one is not in favour. On the contrary, it requires that
courts give effect to the Constitution’s text, and apply, by whatever its
terms, legislation that conforms to that text.
68
A review of the cases showing that each of the appellants’ proposed
requirements of the rule of law has, as a matter of precedent and policy, no
constitutional protection is conclusive of the appellants’ rule of law
arguments.
(1) Prospectivity in the Law
69
Except for criminal law, the retrospectivity and retroactivity of which
is limited by s. 11 (g) of the Charter , there is no requirement of
legislative prospectivity embodied in the rule of law or in any provision of
our Constitution. Professor P. W. Hogg sets out the state of the law
accurately (in Constitutional Law of Canada (loose-leaf ed.), vol. 2, at
p. 48-29):
Apart from s. 11 (g), Canadian constitutional law
contains no prohibition of retroactive (or ex post facto) laws. There is a
presumption of statutory interpretation that a statute should not be given
retroactive effect, but, if the retroactive effect is clearly expressed, then
there is no room for interpretation and the statute is effective according to
its terms. Retroactive statutes are in fact common.
70
Hence, in Air Canada v. British Columbia, [1989] 1 S.C.R. 1161,
at p. 1192, La Forest J., writing for a majority of this Court,
characterized a retroactive tax as “not constitutionally barred”. And in Cusson
v. Robidoux, [1977] 1 S.C.R. 650, at p. 655, Pigeon J., for a unanimous
Court, said that it would be “untenable” to suggest that legislation reviving
actions earlier held by this Court (in Notre-Dame Hospital v. Patry,
[1975] 2 S.C.R. 388) to be time-barred was unconstitutional.
71
The absence of a general requirement of legislative prospectivity exists
despite the fact that retrospective and retroactive legislation can overturn
settled expectations and is sometimes perceived as unjust: see E. Edinger,
“Retrospectivity in Law” (1995), 29 U.B.C. L. Rev. 5, at p. 13. Those
who perceive it as such can perhaps take comfort in the rules of statutory
interpretation that require the legislature to indicate clearly any desired
retroactive or retrospective effects. Such rules ensure that the legislature
has turned its mind to such effects and “determined that the benefits of
retroactivity [or retrospectivity] outweigh the potential for disruption or
unfairness”: Landgraf v. USI Film Products, 511 U.S. 244 (1994), at p.
268.
72
It might also be observed that developments in the common law have
always had retroactive and retrospective effect. Lord Nicholls recently
explained this point in In re Spectrum Plus Ltd., [2005] 3 W.L.R. 58,
[2005] UKHL 41, at para. 7:
A court ruling which changes the law from what it was previously
thought to be operates retrospectively as well as prospectively. The ruling
will have a retrospective effect so far as the parties to the particular
dispute are concerned, as occurred with the manufacturer of the ginger beer in Donoghue
v Stevenson [1932] AC 562. When Mr Stevenson manufactured and bottled and
sold his ginger beer the law on manufacturers’ liability as generally
understood may have been as stated by the majority of the Second Division of
the Court of Session and the minority of their Lordships in that case. But in
the claim Mrs Donoghue brought against Mr Stevenson his legal obligations fell
to be decided in accordance with Lord Atkin’s famous statements. Further,
because of the doctrine of precedent the same would be true of everyone else
whose case thereafter came before a court. Their rights and obligations would
be decided according to the law as enunciated by the majority of the House of
Lords in that case even though the relevant events occurred before that
decision was given.
This
observation adds further weight, if needed, to the view that retrospectivity
and retroactivity do not generally engage constitutional concerns.
(2) Generality in the Law, Ordinary Law for
the Government and Fair Civil Trials
73
Two decisions of this Court defeat the appellants’ submission that the
Constitution, through the rule of law, requires that legislation be general in
character and devoid of special advantages for the government (except where
necessary for effective governance), as well as that it ensure a fair civil
trial.
74
The first is Air Canada. In it, a majority of this Court
affirmed the constitutionality of 1981 amendments to the Gasoline Tax Act,
1948, R.S.B.C. 1960, c. 162, that retroactively taxed certain companies in
the airline industry. The amendments were meant strictly to defeat three
companies’ claims, brought in 1980, for reimbursement of gasoline taxes paid
between 1974 and 1976, the collection of which was ultra vires the
legislature of British Columbia. The legislative amendments, in addition to
being retroactive, were for the benefit of the Crown, aimed at a particular
industry with readily identifiable members and totally destructive of that
industry’s ability to pursue successfully their claims filed a year earlier.
Nonetheless, the constitutionality of those amendments was affirmed by a
majority of this Court.
75
The second is Authorson v. Canada (Attorney General), [2003] 2
S.C.R. 40, 2003 SCC 39, in which this Court unanimously upheld a provision of the
Department of Veterans Affairs Act, R.S.C. 1985, c. V-1 , aimed
specifically at defeating certain disabled veterans’ claims, the merits of
which were undisputed, against the federal government. The claims concerned
interest owed by the government on the veterans’ benefit accounts administered
by it, which interest it had not properly credited for decades. Though the
appeal was pursued on the basis of the Canadian Bill of Rights, S.C.
1960, c. 44 , the decision confirmed that it was well within Parliament’s power
to enact the provision at issue — despite the fact that it was directed at a
known class of vulnerable veterans, conferred benefits on the Crown for
“undisclosed reasons” (para. 62) and routed those veterans’ ability to have any
trial — fair or unfair — of their claims. See para. 15:
The Department of Veterans Affairs Act, s.
5.1(4) takes a property claim from a vulnerable group, in disregard of the
Crown’s fiduciary duty to disabled veterans. However, that taking is within
the power of Parliament. The appeal has to be allowed.
76
Additionally, the appellants’ conception of a “fair” civil trial seems
in part to be of one governed by customary rules of civil procedure and
evidence. As should be evident from the analysis concerning judicial
independence, there is no constitutional right to have one’s civil trial
governed by such rules. Moreover, new rules are not necessarily unfair.
Indeed, tobacco manufacturers sued pursuant to the Act will receive a fair
civil trial, in the sense that the concept is traditionally understood: they
are entitled to a public hearing, before an independent and impartial court, in
which they may contest the claims of the plaintiff and adduce evidence in their
defence. The court will determine their liability only following that hearing,
based solely on its understanding of the law as applied to its findings of
fact. The fact that defendants might regard that law (i.e., the Act) as
unjust, or the procedural rules it prescribes as unprecedented, does not render
their trial unfair.
77
The Act does not implicate the rule of law in the sense that the
Constitution comprehends that term. It follows that the Act is not
unconstitutional by reason of interference with it.
V. Conclusion
78
The Act is constitutionally valid. The appeals are dismissed, with
costs to the respondents throughout. Each constitutional question is answered
“no”. The stay of proceedings granted by McLachlin C.J. on January 21, 2005 is
vacated.
APPENDIX
Tobacco
Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30, as am.
S.B.C. 2003, c. 70, s. 297
HER MAJESTY,
by and with the advice and consent of the Legislative Assembly of the Province
of British Columbia, enacts as follows:
Definitions
and interpretation
1 (1) In this Act:
“cost of health care benefits” means the sum of
(a) the present value of the total
expenditure by the government for health care benefits provided for insured
persons resulting from tobacco related disease or the risk of tobacco related
disease, and
(b) the present value of the estimated total
expenditure by the government for health care benefits that could reasonably be
expected will be provided for those insured persons resulting from tobacco
related disease or the risk of tobacco related disease;
“disease” includes general deterioration of health;
“exposure” means any contact with, or
ingestion, inhalation or assimilation of, a tobacco product, including any
smoke or other by‑product of the use, consumption or combustion of a
tobacco product;
“health care benefits” means
(a) benefits as defined under the Hospital
Insurance Act,
(b) benefits as defined under the Medicare
Protection Act,
(c) payments made by the government under
the Continuing Care Act, and
(d) other expenditures, made directly or
through one or more agents or other intermediate bodies, by the government for
programs, services, benefits or similar matters associated with disease;
“insured person” means
(a) a person, including a deceased person,
for whom health care benefits have been provided, or
(b) a person for whom health care benefits
could reasonably be expected will be provided;
“joint venture” means an association of 2 or more persons, if
(a) the relationship among the persons does
not constitute a corporation, a partnership or a trust, and
(b) the persons each have an undivided
interest in assets of the association;
“manufacture” includes, for a tobacco
product, the production, assembly or packaging of the tobacco product;
“manufacturer” means a person who
manufactures or has manufactured a tobacco product and includes a person who
currently or in the past
(a) causes, directly or indirectly, through
arrangements with contractors, subcontractors, licensees, franchisees or
others, the manufacture of a tobacco product,
(b) for any fiscal year of the person,
derives at least 10% of revenues, determined on a consolidated basis in
accordance with generally accepted accounting principles in Canada, from the
manufacture or promotion of tobacco products by that person or by other
persons,
(c) engages in, or causes, directly or
indirectly, other persons to engage in the promotion of a tobacco product, or
(d) is a trade association primarily engaged
in
(i) the advancement of the interests of
manufacturers,
(ii) the promotion of a tobacco product, or
(iii) causing, directly or indirectly, other
persons to engage in the promotion of a tobacco product;
“person” includes a trust, joint venture or trade association;
“promote” or “promotion” includes,
for a tobacco product, the marketing, distribution or sale of the tobacco
product and research with respect to the tobacco product;
“tobacco product” means tobacco and any product that includes
tobacco;
“tobacco related disease” means disease caused
or contributed to by exposure to a tobacco product;
“tobacco related wrong” means,
(a) a tort committed in British Columbia by
a manufacturer which causes or contributes to tobacco related disease, or
(b) in an action under section 2 (1), a breach
of a common law, equitable or statutory duty or obligation owed by a
manufacturer to persons in British Columbia who have been exposed or might
become exposed to a tobacco product;
“type of tobacco product” means one or a
combination of the following tobacco products:
(a) cigarettes;
(b) loose tobacco intended for incorporation
into cigarettes;
(c) cigars;
(d) cigarillos;
(e) pipe tobacco;
(f) chewing tobacco;
(g) nasal snuff;
(h) oral snuff;
(i) a prescribed form of tobacco.
(2) The definition of “manufacturer” in
subsection (1) does not include
(a) an individual,
(b) a person who
(i) is a manufacturer only because they are
a wholesaler or retailer of tobacco products, and
(ii) is not related to
(A) a person who manufactures a tobacco
product, or
(B) a person described in paragraph (a) of
the definition of “manufacturer”, or
(c) a person who
(i) is a manufacturer only because
paragraph (b) or (c) of the definition of “manufacturer” applies to the person,
and
(ii) is not related to
(A) a person who manufactures a tobacco
product, or
(B) a person described in paragraphs (a) or
(d) of the definition of “manufacturer”.
(3) For the purposes of subsection (2), a
person is related to another person if, directly or indirectly, the person is
(a) an affiliate, as defined in section 1 of
the Business Corporations Act, of the other person, or
(b) an affiliate of the other person or an
affiliate of an affiliate of the other person.
(4) For the purposes of subsection (3) (b),
a person is deemed to be an affiliate of another person if the person
(a) is a corporation and the other person,
or a group of persons not dealing with each other at arm’s length of which the
other person is a member, owns a beneficial interest in shares of the
corporation
(i) carrying at least 50% of the votes for
the election of directors of the corporation and the votes carried by the
shares are sufficient, if exercised, to elect a director of the corporation, or
(ii) having a fair market value, including a
premium for control if applicable, of at least 50% of the fair market value of
all the issued and outstanding shares of the corporation, or
(b) is a partnership, trust or joint venture
and the other person, or a group of persons not dealing with each other at
arm’s length of which the other person is a member, has an ownership interest
in the assets of that person that entitles the other person or group to receive
at least 50% of the profits or at least 50% of the assets on dissolution,
winding up or termination of the partnership, trust or joint venture.
(5) For the purposes of subsection (3) (b),
a person is deemed to be an affiliate of another person if the other person, or
a group of persons not dealing with each other at arm’s length of which the
other person is a member, has any direct or indirect influence that, if
exercised, would result in control in fact of that person except if the other
person deals at arm’s length with that person and derives influence solely as a
lender.
(6) For the purposes of determining the
market share of a defendant for a type of tobacco product sold in British
Columbia, the court must calculate the defendant’s market share for the type of
tobacco product by the following formula:
dm
dms
= H 100%
![](/scc-csc/scc-csc/en/2282/268363/res.do)
MM
where
dms = the defendant’s market share for the
type of tobacco product from the date of the earliest tobacco related wrong
committed by that defendant to the date of trial;
dm = the quantity of the type of tobacco
product manufactured or promoted by the defendant that is sold within British
Columbia from the date of the earliest tobacco related wrong committed by that
defendant to the date of trial;
MM = the quantity of the type of tobacco
product manufactured or promoted by all manufacturers that is sold within
British Columbia from the date of the earliest tobacco related wrong committed
by the defendant to the date of trial.
Direct
action by government
2 (1) The government has a direct and
distinct action against a manufacturer to recover the cost of health care
benefits caused or contributed to by a tobacco related wrong.
(2) An action under subsection (1) is
brought by the government in its own right and not on the basis of a subrogated
claim.
(3) In an action under subsection (1), the
government may recover the cost of health care benefits whether or not there
has been any recovery by other persons who have suffered damage caused or
contributed to by the tobacco related wrong committed by the defendant.
(4) In an action under subsection (1), the
government may recover the cost of health care benefits
(a) for particular individual insured
persons, or
(b) on an aggregate basis, for a population
of insured persons as a result of exposure to a type of tobacco product.
(5) If the government seeks in an action
under subsection (1) to recover the cost of health care benefits on an
aggregate basis,
(a) it is not necessary
(i) to identify particular individual
insured persons,
(ii) to prove the cause of tobacco related
disease in any particular individual insured person, or
(iii) to prove the cost of health care
benefits for any particular individual insured person,
(b) the health care records and documents of
particular individual insured persons or the documents relating to the
provision of health care benefits for particular individual insured persons are
not compellable except as provided under a rule of law, practice or procedure
that requires the production of documents relied on by an expert witness,
(c) a person is not compellable to answer
questions with respect to the health of, or the provision of health care
benefits for, particular individual insured persons,
(d) despite paragraphs (b) and (c), on
application by a defendant, the court may order discovery of a statistically
meaningful sample of the documents referred to in paragraph (b) and the order
must include directions concerning the nature, level of detail and type of
information to be disclosed, and
(e) if an order is made under paragraph (d),
the identity of particular individual insured persons must not be disclosed and
all identifiers that disclose or may be used to trace the names or identities
of any particular individual insured persons must be deleted from any documents
before the documents are disclosed.
Recovery of
cost of health care benefits on aggregate basis
3 (1) In an action under section 2 (1)
for the recovery of the cost of health care benefits on an aggregate basis,
subsection (2) applies if the government proves, on a balance of probabilities,
that, in respect of a type of tobacco product,
(a) the defendant breached a common law,
equitable or statutory duty or obligation owed to persons in British Columbia
who have been exposed or might become exposed to the type of tobacco product,
(b) exposure to the type of tobacco product
can cause or contribute to disease, and
(c) during all or part of the period of the
breach referred to in paragraph (a), the type of tobacco product, manufactured
or promoted by the defendant, was offered for sale in British Columbia.
(2) Subject to subsections (1) and (4), the
court must presume that
(a) the population of insured persons who
were exposed to the type of tobacco product, manufactured or promoted by the
defendant, would not have been exposed to the product but for the breach
referred to in subsection (1) (a), and
(b) the exposure described in paragraph (a)
caused or contributed to disease or the risk of disease in a portion of the
population described in paragraph (a).
(3) If the presumptions under subsection (2)
(a) and (b) apply,
(a) the court must determine on an aggregate
basis the cost of health care benefits provided after the date of the breach
referred to in subsection (1) (a) resulting from exposure to the type of
tobacco product, and
(b) each defendant to which the presumptions
apply is liable for the proportion of the aggregate cost referred to in
paragraph (a) equal to its market share in the type of tobacco product.
(4) The amount of a defendant’s liability
assessed under subsection (3) (b) may be reduced, or the proportions of
liability assessed under subsection (3) (b) readjusted amongst the defendants,
to the extent that a defendant proves, on a balance of probabilities, that the
breach referred to in subsection (1) (a) did not cause or contribute to the
exposure referred to in subsection (2) (a) or to the disease or risk of disease
referred to in subsection (2) (b).
Joint and
several liability in an action under section 2 (1)
4 (1) Two or more defendants in an action under
section 2 (1) are jointly and severally liable for the cost of health care benefits
if
(a) those defendants jointly breached a duty
or obligation described in the definition of “tobacco related wrong” in section
1 (1), and
(b) as a consequence of the breach described
in paragraph (a), at least one of those defendants is held liable in the action
under section 2 (1) for the cost of those health care benefits.
(2) For purposes of an action under section
2 (1), 2 or more manufacturers, whether or not they are defendants in the
action, are deemed to have jointly breached a duty or obligation described in
the definition of “tobacco related wrong” in section 1 (1) if
(a) one or more of those manufacturers are
held to have breached the duty or obligation, and
(b) at common law, in equity or under an
enactment those manufacturers would be held
(i) to have conspired or acted in concert
with respect to the breach,
(ii) to have acted in a principal and agent
relationship with each other with respect to the breach, or
(iii) to be jointly or vicariously liable for
the breach if damages would have been awarded to a person who suffered as a
consequence of the breach.
Population
based evidence to establish causation and quantify damages or cost
5 Statistical information and
information derived from epidemiological, sociological and other relevant
studies, including information derived from sampling, is admissible as evidence
for the purposes of establishing causation and quantifying damages or the cost
of health care benefits respecting a tobacco related wrong in an action brought
(a) by or on behalf of a person in the
person’s own name or as a member of a class of persons under the Class
Proceedings Act, or
(b) by the government under section 2 (1).
Limitation
periods
6 (1) No action that is commenced within
2 years after the coming into force of this section by
(a) the government,
(b) a person, on his or her own behalf or on
behalf of a class of persons, or
(c) a personal representative of a deceased
person on behalf of the spouse, parent or child, as defined in the Family
Compensation Act, of the deceased person,
for damages, or the cost of health care benefits, alleged to have been
caused or contributed to by a tobacco related wrong is barred under the Limitation
Act.
(2) Any action described in subsection (1)
for damages alleged to have been caused or contributed to by a tobacco related
wrong is revived if the action was dismissed before the coming into force of
this section merely because it was held by a court to be barred or extinguished
by the Limitation Act.
Liability
based on risk contribution
7 (1) This section applies to an action
for damages, or the cost of health care benefits, alleged to have been caused
or contributed to by a tobacco related wrong other than an action for the
recovery of the cost of health care benefits on an aggregate basis.
(2) If a plaintiff is unable to establish
which defendant caused or contributed to the exposure described in paragraph
(b) and, as a result of a breach of a common law, equitable or statutory duty
or obligation,
(a) one or more defendants causes or
contributes to a risk of disease by exposing persons to a type of tobacco
product, and
(b) the plaintiff has been exposed to the
type of tobacco product referred to in paragraph (a) and suffers disease as a
result of the exposure,
the court may find each defendant that caused or contributed to the
risk of disease liable for a proportion of the damages or cost of health care
benefits incurred equal to the proportion of its contribution to that risk of
disease.
(3) The court may consider the following in
apportioning liability under subsection (2):
(a) the length of time a defendant engaged
in the conduct that caused or contributed to the risk of disease;
(b) the market share the defendant had in
the type of tobacco product that caused or contributed to the risk of disease;
(c) the degree of toxicity of any toxic
substance in the type of tobacco product manufactured or promoted by a
defendant;
(d) the amount spent by a defendant on
promoting the type of tobacco product that caused or contributed to the risk of
disease;
(e) the degree to which a defendant
collaborated or acted in concert with other manufacturers in any conduct that
caused, contributed to or aggravated the risk of disease;
(f) the extent to which a defendant
conducted tests and studies to determine the risk of disease resulting from
exposure to the type of tobacco product;
(g) the extent to which a defendant assumed
a leadership role in manufacturing the type of tobacco product;
(h) the efforts a defendant made to warn the
public about the risk of disease resulting from exposure to the type of tobacco
product;
(i) the extent to which a defendant
continued manufacture or promotion of the type of tobacco product after it knew
or ought to have known of the risk of disease resulting from exposure to the
type of tobacco product;
(j) affirmative steps that a defendant took
to reduce the risk of disease to the public;
(k) other considerations considered relevant
by the court.
Apportionment
of liability in tobacco related wrongs
8 (1) This section does not apply to a
defendant in respect of whom the court has made a finding of liability under
section 7.
(2) A defendant who is found liable for a
tobacco related wrong may commence, against one or more of the defendants found
liable for that wrong in the same action, an action or proceeding for
contribution toward payment of the damages or the cost of health care benefits
caused or contributed to by that wrong.
(3) Subsection (2) applies whether or not
the defendant commencing an action or proceeding under that subsection has paid
all or any of the damages or the cost of health care benefits caused or
contributed to by the tobacco related wrong.
(4) In an action or proceeding described in
subsection (2), the court may apportion liability and order contribution among
each of the defendants in accordance with the considerations listed in section
7 (3) (a) to (k).
Regulations
9 (1) The Lieutenant Governor in Council
may make regulations referred to in section 41 of the Interpretation Act.
(2) Without limiting subsection (1), the
Lieutenant Governor in Council may make regulations prescribing a form of
tobacco for the purposes of paragraph (i) of the definition of “type of tobacco
product” in section 1 (1).
Retroactive
effect
10 When brought into force under
section 12, a provision of this Act has the retroactive effect necessary to
give the provision full effect for all purposes including allowing an action to
be brought under section 2 (1) arising from a tobacco related wrong, whenever
the tobacco related wrong occurred.
.
. .
Commencement
12 This Act comes into force by
regulation of the Lieutenant Governor in Council.
Appeals dismissed with costs.
Solicitors for the appellant Imperial Tobacco Canada
Limited: Berardino & Harris, Vancouver.
Solicitors for the appellant Rothmans, Benson & Hedges
Inc.: Macaulay McColl, Vancouver.
Solicitors for the appellant JTI-Macdonald Corp.: Farris,
Vaughan, Wills & Murphy, Vancouver.
Solicitors for the appellant Canadian Tobacco Manufacturers’
Council: Kuhn & Company, Vancouver.
Solicitors for the appellant British American Tobacco (Investments)
Limited: Sugden, McFee & Roos, Vancouver.
Solicitors for the appellants Philip Morris Incorporated and
Philip Morris International Inc.: McCarthy Tétrault, Montréal.
Solicitors for the respondents: Bull, Housser &
Tupper, Vancouver.
Solicitor for the intervener the Attorney General of
Ontario: Attorney General of Ontario, Toronto.
Solicitor for the intervener the Attorney General of
Quebec: Attorney General of Quebec, Sainte‑Foy.
Solicitor for the intervener the Attorney General of Nova
Scotia: Attorney General of Nova Scotia, Halifax.
Solicitor for the intervener the Attorney General of New
Brunswick: Attorney General of New Brunswick, Fredericton.
Solicitor for the intervener the Attorney General of
Manitoba: Attorney General of Manitoba, Winnipeg.
Solicitor for the intervener the Attorney General for
Saskatchewan: Attorney General for Saskatchewan, Regina.
Solicitor for the intervener the Attorney General of
Alberta: Attorney General of Alberta, Edmonton.
Solicitor for the intervener the Attorney General of Newfoundland
and Labrador: Attorney General of Newfoundland and Labrador, St.
John’s.