British Columbia v. Imperial Tobacco Canada Ltd. et al., (2004) 199 B.C.A.C. 195 (CA)

• Judge: Lambert, Rowles and Prowse, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: May 20, 2004
• Jurisdiction: British Columbia
• Citations: (2004), 199 B.C.A.C. 195 (CA);2004 BCCA 269

B.C. v. Imperial Tobacco (2004), 199 B.C.A.C. 195 (CA);

    326 W.A.C. 195

MLB headnote and full text

Temp. Cite: [2004] B.C.A.C. TBEd. MY.046

Her Majesty the Queen in Right of British Columbia (appellant/plaintiff) v. Imperial Tobacco Canada Limited, Rothmans, Benson & Hedges Inc., Rothmans Inc., JTI-Macdonald Corp., Canadian Tobacco Manufacturers' Council, B.A.T. Industries p.l.c., British American Tobacco (Investments) Limited, Carreras Rothmans Limited, Philip Morris Incorporated, Philip Morris International, Inc., R.J. Reynolds Tobacco Company, R.J. Reynolds Tobacco International, Inc., Rothmans International Research Division and Ryesekks p.l.c. (respondents/defendants)

(CA030975)

JTI Macdonald Corp. (respondent/plaintiff) v. Attorney General of British Columbia (appellant/defendant)

(CA030976)

Imperial Tobacco Canada Limited (respondent/plaintiff) v. Attorney General of British Columbia (appellant/defendant)

(CA030977)

Rothmans, Benson & Hedges Inc. (respondent/plaintiff) v. Attorney General of British Columbia (appellant/defendant)

(CA030978)

(2004 BCCA 269)

Indexed As: British Columbia v. Imperial Tobacco Canada Ltd. et al.

British Columbia Court of Appeal

Lambert, Rowles and Prowse, JJ.A.

May 20, 2004.

Summary:

The Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30, provided for a direct action by the govern­ment of British Columbia against tobacco manufacturers to recover the cost of health care benefits expended to treat tobacco related disease which was caused or contrib­uted to by a tobacco related wrong. The Attorney General of British Columbia brought an aggregate action under the Act against 14 defendants. Three defendants were Canadian cigarette manufacturers and one was a former Canadian cigarette manufac­turer. Another defendant, the Canadian Tobacco Manufacturers Council, was a trade organization. There were nine non-Canadian defendants. Three of them manufactured cigarettes which were sold in British Colum­bia and the other six were said to be in some form of relationship which attracted liability with one or more defendants who manufac­tured cigarettes sold in British Columbia. The three Canadian cigarette manufacturers each brought an action for a declaration that the Act was unconstitutional. They argued that: (1) the Act in pith and substance was extra-territorial; (2) the Act derogated mater­ially from the independence of the judiciary; and (3) the Act offended the rule of law.

The British Columbia Supreme Court, in a decision reported at [2003] B.C.T.C. 877, held that the Act was unconstitutional on the extra-territoriality ground. The court would have found the Act to be constitutional on the judicial independence and rule of law grounds. The Attorney General appealed, arguing that the court reached the wrong decision on the extra-territoriality issue. The Canadian cigarette manufacturers argued that the court reached the correct decision on the extra-territoriality issue, but that it also should have found the Act unconstitutional on the judicial independence and rule of law grounds.

The British Columbia Court of Appeal allowed the appeal. The court held that the Act was not unconstitutional on the basis of extra-territoriality. The Act was also not unconstitutional on the ground that it dero­gated from the independence of the judiciary or on the ground that it offended the rule of law.

Actions - Topic 1628

Cause of action - Torts - Situs of action - The British Columbia Court of Appeal held that the decisions in Moran v. Pyle National (Canada) Ltd. (S.C.C.) and Dis­tillers Co. (Bio-Chemicals) Ltd. v. Thomp­son (P.C.) stood for the proposition that in cases of defective products, cases of failure to warn, and cases of misrepresentation to the consumer and ultimate user, the place where the breach of duty and the tort occurred was the place of purchase, con­sumption and subsequent injury - See paragraphs 36 and 144.

Constitutional Law - Topic 5.3

General - General principles - Unwritten constitutional principles - Constitutionalism and the rule of law - The Tobacco Dam­ages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30, provided for a direct action by the government of British Columbia against tobacco manufacturers to recover the cost of health care benefits expended to treat tobacco related disease which was caused or contributed to by a tobacco related wrong - Philip Morris Inc., a non-Canadian cigarette manufacturer which sold cigarettes in British Columbia, argued that a number of aspects of the rule of law were infringed by the Act, namely: the requirement of generality in the laws; the requirement that laws should be pro­spective and not retroactive; the re­quirement of equality in the law; the re­quirement that the Crown be bound by the ordinary law; and the requirement of a fair trial - The British Columbia Court of Appeal held that the fundamental prin­ciples embraced by the rule of law were not absolute and that they had to be bal­anced against each other and against other laws which promoted societal goals and purposes - The court concluded that there was no real infringe­ment of the principles referred to by Philip Morris and that any infringement of those principles was out­weighed in the balance by the principle of legislative sovereignty - See paragraphs 106 to 115.

Constitutional Law - Topic 482

Powers of parliament and the legislatures - Limitations on powers of parliament - Rule of law - [See Constitutional Law - Topic 5.3 ].

Constitutional Law - Topic 772

Territorial limits - Provinces - British Columbia - The Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30, provided for a direct action by the government of British Columbia against tobacco manufacturers to recover the cost of health care benefits expended to treat tobacco related disease, which was caused or contributed to by a tobacco related wrong - The British Columbia Court of Appeal held that the Act was not unconstitutional on the basis of extra-terri­toriality - The pith and substance of the Act was property and civil rights within the province (s. 92(13) of the Constitution Act, 1867) and any extraterritorial effects of the legislation were incidental - See paragraphs 22 to 73, 124 to 256.

Constitutional Law - Topic 6753

Provincial jurisdiction (s. 92) - General principles - Territorial limitation - [See Constitutional Law - Topic 772 ].

Constitutional Law - Topic 7201

Provincial jurisdiction (s. 92) - Property and civil rights - General - [See Constitu­tional Law - Topic 772 ].

Constitutional Law - Topic 8655

Judges (incl. justices of the peace) - In­dependence - The Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30, provided for a direct action by the government of British Columbia against tobacco manufacturers to recover the cost of health care benefits expended to treat tobacco related disease which was caused or contributed to by a tobacco related wrong - Canadian cigarette manu­facturers argued that the Act was un­constitutional because it prevented the independent exercise of the judicial fact-finding process and compromised the independence of the court - The provisions of the Act which gave rise to their argu­ment were those relating to the presump­tions of causation (ss. 3(2), 3(3) and 3(4)), coupled with those relating to the protec­tion of privacy (s. 2(5)) - The British Columbia Court of Appeal held that the Act was not unconstitutional on the ground that the whole Act or any part of it in­fringed judicial independence - A reason­ably informed member of the public would not conclude that a judge trying an action under the Act had lost judicial indepen­dence - See paragraphs 74 to 89.

Courts - Topic 308

Judges - Independence of judiciary - What constitutes interference with - [See Consti­tutional Law - Topic 8655 ].

Health - Topic 1213

Public health legislation - Health care cost recovery schemes - Tobacco damages - [See Constitutional Law - Topic 5.3 , Constitutional Law - Topic 772 , Consti­tutional Law - Topic 8655 and Statutes - Topic 6701 ].

Statutes - Topic 6701

Operation and effect - Commencement, duration and repeal - Retrospective and retroactive enactments - General - The Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30, pro­vided for a direct action by the government of British Columbia against tobacco manu­facturers to recover the cost of health care benefits expended to treat tobacco related disease which was caused or contributed to by a tobacco related wrong - Section 10 of the Act provided that "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" - Canadian cigarette manufacturers argued that the retroactive provision was such that in its application it would so offend established principles of law that it must, in itself, be unconstitutional - The British Columbia Court of Appeal held that retroactivity aspects of the Act were not such as to make either the Act as a whole or any retroactive application of the Act un­constitutional - See paragraphs 90 to 105.

Cases Noticed:

JTI-MacDonald Corp. v. British Columbia (Attorney General), [2000] B.C.T.C. 178; 74 B.C.L.R.(3d) 149; 184 D.L.R.(4th) 335 (S.C.), refd to. [para. 3].

Upper Churchill Water Rights Reversion Act, 1980, Re; Churchill Falls (Labrador) Corp. and Hydro-Quebec et al. v. New­foundland (Attorney General) et al., [1984] 1 S.C.R. 297; 53 N.R. 268; 47 Nfld. & P.E.I.R. 125, 139 A.P.R. 125; 8 D.L.R.(4th) 1, consd. [para. 25].

Reference Re Upper Churchill Water Rights Reversion Act 1980 (New­foundland) - see Upper Churchill Water Rights Reversion Act, 1980, Re; Chur­chill Falls (Labrador) Corp. and Hydro-Quebec et al. v. Newfoundland (Attorney General) et al.

Ladore v. Bennett, [1939] 3 D.L.R. 1; [1939] A.C. 468 (P.C.), refd to. [para. 26].

Moran v. Pyle National (Canada) Ltd., [1975] 1 S.C.R. 393; 1 N.R. 122, consd. [para. 33].

Distillers Co. (Bio-Chemicals) Ltd. v. Thompson, [1971] 1 All E.R. 694; [1971] A.C. 458; [1971] 2 W.L.R. 441 (P.C.), consd. [para. 35].

Tolofson v. Jensen and Tolofson, [1994] 3 S.C.R. 1022; 175 N.R. 161; 77 O.A.C. 81; 51 B.C.A.C. 241; 84 W.A.C. 241; [1995] 1 W.W.R. 609; 120 D.L.R.(4th) 289; 100 B.C.L.R.(2d) 1; 7 M.V.R.(3d) 202, refd to. [para. 38].

Unifund Assurance Co. v. Insurance Corp. of British Columbia, [2003] 2 S.C.R. 63; 306 N.R. 201; 176 O.A.C. 1; 2003 SCC 40, refd to. [para. 38].

R. v. Valente (1983), 145 D.L.R.(3d) 452 (Ont. C.A.), affd. (1985), 64 N.R. 1; 14 O.A.C. 79; 24 D.L.R.(4th) 161 (S.C.C.), refd to. [para. 84].

Rice, P.C.J. v. New Brunswick, [2002] 1 S.C.R. 405; 282 N.R. 201; 245 N.B.R.(2d) 299; 636 A.P.R. 299; 209 D.L.R.(4th) 564, refd to. [para. 84].

Mackin v. New Brunswick (Minister of Finance) - see Rice, P.C.J. v. New Brun­swick.

Authorson v. Canada (Attorney General) (2003), 306 N.R. 335; 175 O.A.C. 363; 227 D.L.R.(4th) 385; 2003 SCC 39, refd to. [para. 87].

Reference Re Remuneration of Judges of the Provincial Court (P.E.I.), [1997] 3 S.C.R. 3; 217 N.R. 1; 206 A.R. 1; 156 W.A.C. 1; 121 Man.R.(2d) 1; 158 W.A.C. 1; 156 Nfld. & P.E.I.R. 1; 483 A.P.R. 1; 150 D.L.R.(4th) 577, refd to. [para. 108].

Reference Re Secession of Quebec, [1998] 2 S.C.R. 217; 228 N.R. 203; 161 D.L.R.(4th) 385, refd to. [para. 108].

Robert v. Quebec (Conseil de la magistra­ture), [2000] J.Q. No. 470 (C.A.), refd to. [para. 108].

Ell et al. v. Alberta (2003), 306 N.R. 1; 330 A.R. 201; 299 W.A.C. 201; 2003 SCC 35, refd to. [para. 108].

Babcock et al. v. Canada (Attorney Gen­eral) et al. (2002), 289 N.R. 341; 168 B.C.A.C. 50; 275 W.A.C. 50; 214 D.L.R.(4th) 193 (S.C.C.), consd. [para. 111].

City National Leasing Ltd. v. General Motors of Canada Ltd., [1989] 1 S.C.R. 641; 93 N.R. 326; 32 O.A.C. 332, refd to. [para. 132].

Reference re Status of the Supreme Court of British Columbia (1882), 1 B.C.R. 153 (S.C.C.), refd to. [para. 133].

Hunt v. Lac d'Amiante du Québec Ltée et al., [1993] 4 S.C.R. 289; 161 N.R. 81; 37 B.C.A.C. 161; 60 W.A.C. 161, refd to. [para. 133].

Ontario (Attorney General) v. Scott, [1956] S.C.R. 137, refd to. [para. 133].

Schneider v. British Columbia et al., [1982] 2 S.C.R. 112; 43 N.R. 91, refd to. [para. 134].

R. v. Morgentaler, [1993] 3 S.C.R. 463; 157 N.R. 97; 125 N.S.R.(2d) 81; 349 A.P.R. 81, refd to. [para. 134].

Morgan et al. v. Prince Edward Island (Attorney General) et al., [1976] S.C.R. 349; 5 N.R. 455; 7 Nfld. & P.E.I.R. 537; 3 A.P.R. 537, refd to. [para. 176].

Morguard Investments Ltd. et al. v. De Savoye, [1990] 3 S.C.R. 1077; 122 N.R. 81; [1991] 2 W.W.R. 217; 76 D.L.R.(4th) 256; 52 B.C.L.R.(2d) 160, refd to. [para. 202].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1; 36 O.R.(3d) 418, refd to. [para. 236].

Statutes Noticed:

Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30, sect. 1(1), sect. 2(1), sect. 2(4), sect. 2(5), sect. 3 [para. 19]; sect. 10 [para. 20].

Authors and Works Noticed:

Driedger, Elmer A., Construction of Stat­utes (2nd Ed. 1983), p. 87 [para. 236].

Hogg, Constitutional Law of Canada (1977), pp. 209 to 210 [para. 26].

Hogg, Constitutional Law of Canada (Looseleaf Ed. 1997), vol. 1, pp. 15-7, 15-14, 15-15 [para. 136]; 21-4 [para. 131].

Counsel:

T.R. Berger, Q.C., D.A. Webster, Q.C., E.M. Myers, Q.C., and C.E. Jones, for the appellant;

J. Giles, Q.C., J.J. Kay and D. Bloor, for the respondents, JTI-Macdonald Corp., R.J. Reynolds Tobacco Co. and R.J. Reynolds Tobacco International, Inc.;

J.A. Macaulay, Q.C., and K.N. Affleck, Q.C., for the respondent, Rothmans, Benson & Hedges Inc.;

W.S. Berardino, Q.C., D. Harris and A.N. Mackay, for the respondent, Imperial Tobacco Canada Limited;

R.R. Sugden, Q.C., and C.P. Dennis, for the respondent, British American Tobac­co (Investments) Limited;

D.R. Clark and C.A. Millar, for the re­spondents, Philip Morris Incorporated and Philip Morris International Inc.;

L.D. Russell, for the respondent, Canadian Tobacco Manufacturers' Council.

This appeal was heard on November 24, to 28, 2003, at Vancouver, British Columbia, before Lambert, Rowles and Prowse, JJ.A., of the British Columbia Court of Appeal. The judgment of the Court of Appeal was delivered on May 20, 2004, including the following opinions:

Lambert, J.A. - see paragraphs 1 to 117;

Rowles, J.A. - see paragraphs 118 to 181;

Prowse, J.A. - see paragraphs to 182 to 258.