R. v. Nova Scotia Pharmaceutical Society et al. (No. 2), (1992) 139 N.R. 241 (SCC)

• Judge: Sopinka, Gonthier, Cory and Iacobucci, JJ.
• Court: Supreme Court (Canada)
• Case Date: July 09, 1992
• Jurisdiction: Canada (Federal)
• Citations: (1992), 139 N.R. 241 (SCC);[1992] SCJ No 67 (QL);74 CCC (3d) 289;10 CRR (2d) 34;[1992] 2 SCR 606;[1992] ACS no 67;1992 CanLII 72 (SCC);16 WCB (2d) 460;JE 92-1019;139 NR 241;313 APR 91;43 CPR (3d) 1;114 NSR (2d) 91;34 ACWS (3d) 1092;93 DLR (4th) 36;15 CR (4th) 1

R. v. N.S. Pharmaceutical Soc. (1992), 139 N.R. 241 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Nova Scotia Pharmaceutical Society, Pharmacy Association of Nova Scotia, Lawtons Drug Stores Limited, William H. Richardson, Empire Drugstores Limited, Woodlawn Pharmacy Limited, Nolan Pharmacy Limited, Christopher D.A. Nolan, Blackburn Holdings Limited, William G. Wilson, Woodside Pharmacy Limited and Frank Forbes (appellants) v. R. (respondent) and Attorney General of Ontario and Attorney General of Alberta (intervenors) and Association Québécoise des Pharmaciens Propriétaires, Cumberland Drugs (Merivale) Ltd., Kane's Super Drugmart Corp. Ltd., Les Enterprises Norpharm Inc., Escompte Chez Lafortune Inc., Famili-Prix Inc., Le Groupe Jean Coutu (P.J.C.) Inc., Groupe Pharmaceutique Focus Inc., Les Magasins Koffler de l'Est Inc., McMahon Essaim Inc., Super Escompte Brouillet Inc., B. Mayrand Inc., Superpharm (Montréal) Ltée, Uniprix Inc., Pierre Bossé, François-Jean Coutu, Claude Gagnon, Guy Lanoue, Michel Lesieur, Guy-Marie Papillon and Jean-Guy Prud'homme (intervenors)

(22473)

Indexed As: R. v. Nova Scotia Pharmaceutical Society et al. (No. 2)

Supreme Court of Canada

Lamer, C.J.C., La Forest, L'Heureux-Dubé,

Sopinka, Gonthier, Cory

and Iacobucci, JJ.

July 9, 1992.

Summary:

The accused were charged with conspiring to unduly prevent or lessen competition in the retail pharmaceutical business in Nova Scotia. After a preliminary hearing they were committed to stand trial, but before trial moved for a declaration that ss. 32(1)(c) and 32(1.1) of the Combines Investigation Act under which they were charged violated the Canadian Charter of Rights and Freedoms and were invalid.

The Nova Scotia Supreme Court, Trial Division, in a judgment reported 98 N.S.R.(2d) 296; 263 A.P.R. 296; 73 D.L.R.(4th) 500; 59 C.C.C.(3d) 30; 32 C.P.R.(3d) 259, allowed the application. The court held that the sections violated the Charter, because they did not require mens rea for one of the elements of the offence and the use of the word "unduly" rendered the sections vague, depriving the accused of the rights to make full answer and defence and have a fair trial. The court quashed the indictments against the accused. The Crown appealed.

The Nova Scotia Supreme Court, Appeal Division, in a judgment reported 102 N.S.R.(2d) 222; 279 A.P.R. 222; 80 D.L.R.(4th) 206; 64 C.C.C.(3d) 129; 36 C.P.R.(3d) 173; 7 C.R.R.(2d) 352, allowed the appeal and upheld the validity of ss. 32(1)(c) and 32(1.1) of the Combines Inves­tigation Act. The court held that the sections were not vague and mens rea was required to be proved by the Crown. The accused appealed.

The Supreme Court of Canada dismissed the appeal.

Civil Rights - Topic 3107

Trials - Due process, fundamental justice and fair hearings - Void for vagueness doctrine - The Combines Investigation Act, ss. 32(1)(c) and 32(1.1), prescribed the offence of "unduly" lessening competi­tion - The Supreme Court of Canada held that the sections were not void for vague­ness and did not violate s. 7 of the Charter - The court discussed and explained the notion of vagueness and its relation to the notion of overbreadth and summed up with the proposition that "a law will be found unconstitutionally vague if it so lacks in precision as not to give sufficient guidance for legal debate" - See paragraphs 17 to 111.

Civil Rights - Topic 4949

Presumption of innocence - Evidence - Removal of element of intent - The Com­bines Investigation Act, s. 32(1)(c), pro­vided that "everyone who conspires, com­bines, agrees or arranges with another person ... to prevent, or lessen, unduly, competition" was guilty of an offence - The Supreme Court of Canada held that s. 32(1)(c) did not violate s. 7 of the Charter by failing to require mens rea - The court held that the Crown was required to estab­lish the subjective fault elements that the accused intended to enter the agreement and was aware of its terms and that the proof, viewed objectively (i.e. by a rea­son­able business person), establishes that the accused was aware or ought to have been aware that the effect of the agreement would be to prevent or lessen competition unduly - See paragraphs 112 to 122.

Civil Rights - Topic 8318

Canadian Charter of Rights and Freedoms - General - Application - Statutory inter­pretation - Preference to Charter values - The Supreme Court of Canada reiterated that "if there are two possible interpreta­tions of a statutory provision, one of which embodies the Charter values and the other does not, that which embodies the Charter values should be adopted" - See paragraph 120.

Civil Rights - Topic 8469

Canadian Charter of Rights and Freedoms - Interpretation - United States experience - The Supreme Court of Canada con­sidered U.S. Supreme Court decisions in explaining the notions of vagueness and overbreadth in the context of the constitu­tionality of statutes - See paragraphs 30 to 54.

Civil Rights - Topic 8470

Canadian Charter of Rights and Freedoms - Interpretation - International law - The Supreme Court of Canada considered decisions of the European Court of Human Rights in explaining the notions of vague­ness and overbreadth in the context of the constitutionality of statutes - See para­graphs 55 to 69.

Civil Rights - Topic 8626

Canadian Charter of Rights and Freedoms - Regulation of guaranteed rights - Vagueness rule - [See Civil Rights - Topic 3107 ].

Courts - Topic 103

Stare decisis - Authority of judicial deci­sions - English and American authorities - American decisions - [See Civil Rights - Topic 8469 ].

Courts - Topic 112

Stare decisis - Authority of judicial deci­sions - European authorities - European Court of Human Rights - [See Civil Rights - Topic 8470 ].

Practice - Topic 8983

Appeals - When appeal available - From reasons for judgment - The accused appealed to the Supreme Court of Canada on only one of two issues decided by the Court of Appeal - The Crown sought a variation of the reasons of the Court of Appeal on the other issue, but not a rever­sal of the result - The accused objected that the Crown could not raise its issue without leave under rule 29(2) of the Supreme Court Rules - The Supreme Court of Canada held that the seeking of variation of reasons but not result by the Crown was not a cross-appeal, so rule 29(2) was inapplicable - Further, under rule 29(1) the court could treat the whole case as open - See paragraphs 14 to 16.

Practice - Topic 9010

Appeals - Restrictions on argument on appeal - General - [See Practice - Topic 8983 ].

Practice - Topic 9161

Appeals - Cross-appeals - What consti­tutes cross-appeal - [See Practice - Topic 8983 ].

Statutes - Topic 4552

Operation and effect - Validity - Vague­ness - [See Civil Rights - Topic 3107 ].

Trade Regulation - Topic 601

Competition - Price fixing agreements - General - [See Civil Rights - Topic 3107 ].

Trade Regulation - Topic 602

Competition - Price fixing agreements - Intention - [See Civil Rights - Topic 4949 ].

Trade Regulation - Topic 605

Competition - Price fixing agreements - Unduly - Meaning of - [See Civil Rights - Topic 3107 ].

Cases Noticed:

R. v. Vaillancourt, [1987] 2 S.C.R. 636; 81 N.R. 115; 10 Q.A.C. 161; 68 Nfld. & P.E.I.R. 281; 209 A.P.R. 281; 39 C.C.C.(3d) 118; 60 C.R.(3d) 289, consd. [paras. 4, 115].

Reference re ss. 193 and 195.1(1)(c) of the Criminal Code (Man.), [1990] 1 S.C.R. 1123; 109 N.R. 81; 68 Man.R.(2d) 1; 56 C.C.C.(3d) 65; 77 C.R.(3d) 1, consd. [paras. 5, 21].

Howard Smith Paper Mills Ltd. v. R., [1957] S.C.R. 403, consd. [paras. 5, 78, 88].

Reference re s. 94(2) of the Motor Vehicle Act (B.C.), [1985] 2 S.C.R. 486; 63 N.R. 266; [1986] 1 W.W.R. 481; 24 D.L.R.(4th) 536; 48 C.R.(3d) 289; 36 M.V.R. 240; 69 B.C.L.R. 145; 18 C.R.R. 30; 23 C.C.C.(3d) 289, consd. [para. 6].

R. v. Atlantic Sugar Refineries Co., [1980] 2 S.C.R. 644; 32 N.R. 562; 115 D.L.R.(3d) 21, consd. [paras. 7, 78].

Knox Contracting Ltd. and Knox v. Canada, [1990] 2 S.C.R. 338; 110 N.R. 171; 106 N.B.R.(2d) 408; 265 A.P.R. 408, consd. [para. 7].

R. v. Hess; R. v. Nguyen, [1990] 2 S.C.R. 906; 119 N.R. 5, consd. [para. 7].

R. v. Perka, Nelson, Hines and Johnson, [1984] 2 S.C.R. 232; 55 N.R. 1, consd. [para. 15].

R. v. Morgentaler, [1988] 1 S.C.R. 30; 82 N.R. 1; 26 O.A.C. 1; 62 C.R.(3d) 1; 37 C.C.C.(3d) 449, consd. [para. 19].

Irwin Toy Ltd. v. Quebec (Procureur Gen­eral), [1989] 1 S.C.R. 927; 94 N.R. 167; 24 Q.A.C. 2; 58 D.L.R.(4th) 577, consd. [para. 20].

R. v. Keegstra, [1990] 3 S.C.R. 697; 117 N.R. 1; 114 A.R. 81, consd. [para. 23].

R. v. Oakes, [1986] 1 S.C.R. 103; 65 N.R. 87; 14 O.A.C. 335; 50 C.R.(3d) 1; 24 C.C.C.(3d) 321; 26 D.L.R.(4th) 200, consd. [para. 23].

Taylor and Western Guard Party v. Cana­dian Human Rights Commission, [1990] 3 S.C.R. 892; 117 N.R. 191, consd. [para. 24].

Committee for the Commonwealth of Canada et al. v. Canada, [1991] 1 S.C.R. 139; 120 N.R. 241, consd. [paras. 25, 34].

Osborne, Millar and Barnhart et al. v. Canada (Treasury Board et al.), [1991] 2 S.C.R. 69; 125 N.R. 241, consd. [para. 26].

R. v. Butler and McCord, [1992] 1 S.C.R. 452; 134 N.R. 81; 78 Man.R.(2d) 1, consd. [para. 27].

Village of Hoffman Estates v. Flipside, Hoffman Estates Inc. (1982), 455 U.S. 489, consd. [para. 31].

Broadrick v. Oklahoma (1973), 413 U.S. 601, consd. [para. 32].

R. v. Smith (E.D.), [1987] 1 S.C.R. 1045; 75 N.R. 321; 34 C.C.C.(3d) 97; 58 C.R.(3d) 193, consd. [para. 34].

R. v. Goltz, [1991] 3 S.C.R. 485; 131 N.R. 1, consd. [para. 34].

R. v. Zundel (1987), 8 O.A.C. 161; 58 O.R.(2d) 129, appld. [para. 36].

Maynard v. Cartwright (1988), 486 U.S. 356, consd. [para. 38].

Grayned v. City of Rockford (1972), 408 U.S. 104, consd. [para. 43].

R. v. MacDougall, [1982] 2 S.C.R. 605; 44 N.R. 560; 54 N.S.R.(2d) 562; 112 A.P.R. 562, consd. [para. 45].

Papachristou v. City of Jacksonville (1972), 405 U.S. 156, consd. [para. 50].

Kolender v. Lawson (1983), 461 U.S. 352, consd. [para. 50].

Smith v. Goguen (1974), 415 U.S. 566, consd. [para. 52].

Sunday Times case, Eur. Court H.R. judg­ment of 26 April 1979, Series A No. 30, consd. [paras. 56, 62, 68].

Malone case, Eur. Court H.R. judgment of 2 August 1984, Series A No. 82, consd. [paras. 56, 62, 69].

Kruslin case, Eur. Court H.R. judgment of 24 April 1990, Series A No. 176-A, consd. [para. 56].

Huvig case, Eur. Court H.R. judgment of 24 April 1990, Series A No. 176-B, consd. [para. 56].

Silver and others case, Eur. Court H.R. judgment of 25 March 1983, Series A No. 61, consd. [para. 62].

Barthold case, Eur. Court H.R. judgment of 25 March 1985, Series A No. 90, consd. [paras. 68, 110].

Müller et al. case, Eur. Court H.R. judg­ment of 24 May 1988, Series A No. 133, consd. [para. 68].

Leander case, Eur. Court H.R. judgment of 26 March 1987, Series A No. 116, consd. [para. 69].

R. v. Wigglesworth, [1987] 2 S.C.R. 541; 81 N.R. 161; 61 Sask.R. 105; 37 C.C.C.(3d) 385; 60 C.R.(3d) 193; 45 D.L.R.(4th) 235, consd. [para. 76].

R. v. Shubley, [1990] 1 S.C.R. 3; 104 N.R. 81; 37 O.A.C. 63, consd. [para. 76].

Weidman v. Shragge (1912), 46 S.C.R. 1, consd. [para. 78].

Stinson-Reeb Builders Supply Co. v. R., [1929] S.C.R. 276, consd. [para. 78].

Container Materials Ltd. v. R., [1942] S.C.R. 147, consd. [paras. 78, 85].

R. v. Aetna Insurance Co., [1978] 1 S.C.R. 731; 15 N.R. 117; 20 N.S.R.(2d) 565; 27 A.P.R. 565; 75 D.L.R.(3d) 332, consd. [paras. 78, 107].

R. v. Elliott (1905), 9 C.C.C. 505 (Ont. C.A.), consd. [para. 79].

R. v. J.J. Beamish Construction Co. (1967), 65 D.L.R.(2d) 260 (Ont. C.A.), consd. [paras. 79, 95].

City National Leasing v. General Motors of Canada Ltd., [1989] 1 S.C.R. 641; 93 N.R. 326; 32 O.A.C. 332, consd. [para. 86].

R. v. J.W. Mills & Son Ltd., [1968] 2 Ex. C.R. 275, consd. [paras. 95, 97, 99, 106].

R. v. Canadian Coat and Apron Supply Ltd., [1967] 2 Ex. C.R. 53, consd. para. 95].

R. v. Anthes Business Forms Ltd. (1975), 26 C.C.C.(2d) 349 (Ont. C.A.), consd. [para. 95].

R. v. Canadian General Electric Co. (1976), 34 C.C.C.(2d) 489 (Ont. H.C.), consd. [para. 95].

R. v. Metropolitan Toronto Pharmacists' Association (1984), 3 C.P.R.(3d) 233 (Ont. H.C.), consd. [para. 96].

Association québécoise des pharmaciens propriétaires v. Canada (Procureur géné­ral), [1991] R.J.Q. 205 (S.C.), consd. [para. 98].

R. v. Abitibi Power & Paper Co. (1960), 131 C.C.C. 201 (Que. Q.B.), consd. [para. 103].

NCAA v. Board of Regents of the Uni­versity of Oklahoma (1984), 468 U.S. 85, consd. [para. 104].

Federal Trade Commission v. Indiana Federation of Dentists (1986), 476 U.S. 447, consd. [para. 104].

Völk v. Etablissements J. Vervaecke S.p.r.l., Case 5/69, [1969] E.C.R. 295, consd. [para. 105].

S.A. Cadillon v. Firma Höss Maschinebau K.G., Case 1/71, [1971] E.C.R. 351, consd. [para. 105].

R. v. McGavin Bakeries Ltd. (No. 6) (1951), 3 W.W.R.(N.S.) 289 (Alta. S.C.), consd. [para. 106].

R. v. Northern Electric Co., [1955] 3 D.L.R. 449 (Ont. H.C.), consd. [para. 107].

R. v. Wholesale Travel Group Inc., [1991] 3 S.C.R. 154; 130 N.R. 1; 49 O.A.C. 161, appld. [para. 116].

Hills v. Canada (Attorney General), [1988] 1 S.C.R. 513; 84 N.R. 86, appld. [para. 120].

Statutes Noticed:

Act for the Prevention and Suppression of Combinations formed in restraint of Trade, S.C. 1889, c. 41 [para. 84].

Canadian Charter of Rights and Freedoms, sect. 2, sect. 7, sect. 8, sect. 11(a), sect. 11(d), sect. 11(h).

Civil Code of Lower Canada, art. 1053 [para. 91].

Combines Investigation Act, R.S.C. 1970, c. C-23, sect. 32(1)(c), sect. 32(1.1), sect. 32(1.3) [para. 3]; sect. 32.01 [para. 76]; sect. 32(2), sect. 32(3), sect. 32(6) [para. 108]; sect. 51(7), sect. 70 [para. 76].

Commission notice of 3 September 1986 on agreements of minor importance which do not fall under Article 85(1) of the Treaty establishing the Europen Economic Community, O.J.E.C., 12 Sep­tember 1986, No. C 231/2 [para. 105].

Commission Regulation (EEC) No. 1983/83 of 22 June 1983 on the appli­cation of Article 85(3) of the Treaty to categories of exclusive distribution agreements, O.J.E.C., 30 June 1983, No. L 173/1, art. 1, art. 2 [para. 108].

Competition Act, R.S.C. 1985, c. C-34, sect. 45(1)(c), sect. 45(2), sect. 45(2.2) [para. 3]; sect. 45.1, sect. 79(7), sect. 98 [para. 76].

Constitution of the United States, First Amendment, Fifth Amendment, Eighth Amendment, Fourteenth Amendment.

Criminal Code, R.S.C. 1985, c. C-46, sect. 19 [para. 45]; sect. 219 [para. 91]; sect. 222, sect. 223, sect. 224, sect. 225, sect. 226, sect. 227, sect. 228, sect. 229, sect. 230, sect. 231, sect. 232, sect. 233, sect. 234, sect. 235, sect. 236, sect. 237, sect. 238, sect. 239, sect. 240 [para. 47].

European Convention for the Protection of Human Rights and Fundamental Free­doms, 213 U.N.T.S. 222, art. 8(2), art. 9(2), art. 10(2), art. 11(2) [para. 55].

Protocol No. 4 to the European Convention for the Protection of Human Rights and Fundamental Freedoms, securing certain rights and freedoms other than those included in the Convention and in the first Protocol thereto, Europ. T.S. No. 46, art. 2(3) [para. 55].

Rules of the Supreme Court of Canada, rule 29(1), rule 29(2) [para. 15].

Sherman Act, c. 647, 26 Stat. 209 (1890), sect. 1 (codified as amended 15 U.S.C. 1-7 (1982)) [paras. 84, 87].

Treaty establishing the European Economic Community, art. 85 [para. 87].

1984 Merger Guidelines, 49 Fed. Reg. 26823 [para. 99].

Authors and Works Noticed:

Amselek, Paul, La teneur indécise du droit (1991), 107 Rev. dr. publ. 1199 [para. 59].

Areeda, Phillip E., Antitrust Law: An Analysis of Antitrust Principles and Their Application (1987), vol. 7 [paras. 89, 104].

Areeda, Phillip E., and Herbert Hoven­kamp, Antitrust Law: An Analysis of Antitrust Principles and Their Appli­cation (1990 Supplement) [para. 89].

Baudouin, Jean-Louis, Les obligations (3rd Ed. 1989), p. 122 [para. 45].

Blaau, Loammi C., The Rechtsstaat Idea Compared with the Rule of Law as a Paradigm for Protecting Rights (1990), 107 S. Afr. L.J. 76 [para. 64].

Carré de Malberg, R., Contribution à la théorie générale de l'Etat, t. 1, Paris: Sirey, 1920 [para. 65].

Chevallier, Jacques, L'Etat de droit (1988), 104 Rev. dr. publ. 313 [para. 65].

Chitty on Contracts: General Principles (25th Ed. 1983), paras. 314, 353 [para. 45].

Colvin, Eric, Criminal Law and The Rule of Law, In Patrick Fitzgerald, Ed., Crime, Justice & Codification: Essays in commemoration of Jacques Fortin (1986) p. 125, at 151 [para. 45].

Dunlop, Bruce, David McQueen and Michael Trebilcock, Canadian Competi­tion Policy: A Legal and Economic Analysis (1987), pp. 42 [para. 85]; 114 [para. 100].

Fitzgerald, Patrick (Ed.), Crime, Justice and Codification: Essays in Com­memoration of Jacques Fortin, p. 125, at 151 [para. 45].

Henry, Jean-Pierre, Vers la fin de l'Etat de droit? (1977), 93 Rev. dr. publ. 1207 [para. 65].

Jeffries, John Calvin, Jr., Legality, Vague­ness and the Construction of Penal Stat­utes (1985), 71 Va. L. Rev. 189 [para. 45]; 211 [para. 46].

Neumann, Franz, The Rule of Law: Politi­cal Theory and the Legal System in Modern Society (Leamington Spa, Warwirckshire: Berg Publishers Ltd., 1986), pp. 238-239 [para. 67].

Rogerson, Carol, The Judicial Search for Appropriate Remedies Under the Charter: The Examples of Overbreadth and Vagueness, In Robert J. Sharpe, Ed., Charter Litigation (1987), pp. 261-262 [para. 32].

Sharpe, Robert J. (Ed.), Charter Litigation (1987), pp. 261-262 [para. 32].

Stanbury, W.T., Legislation to Control Agreements in Restraint of Trade in Canada: Review of the Historical Record and Proposals for Reform, National Conference on the Centenary of Com­petition Law and Policy in Canada, Oc­tober 1989 [para. 98].

Stanbury, W.T., and G.B. Reschenthaler, Reforming Canadian Competition Policy: Once More unto the Breach (1981), 5 Can. Bus. L.J. 381 [para. 98].

Tribe, Laurence H., American Constitu­tional Law (2nd Ed. 1988), p. 1022 [para. 31].

Counsel:

Joel Fichaud, H.E. Wrathall, Q.C., and Catherine Walker, for the appellant accused;

Michael R. Dambrot, Q.C., Calvin S. Goldman, Q.C., and John S. Tyhurst, for the respondent Crown;

M. Philip Tunley and David B. Butt, for the intervenor Attorney General for Ontario;

Bart Rosborough, for the intervenor At­torney General for Alberta;

Yves Bériault and Madeleine Renaud, for the intervenors Association québécoise des pharmaciens propriétaires et al.

Solicitors of Records:

McInnes, Cooper & Robertson, Halifax, Nova Scotia, and Patterson Kitz, Halifax, Nova Scotia, for the appellants;

Department of Justice (Legal Branch, Consumer & Corporate Affairs), Hull, Quebec, for the respondent;

Deputy Attorney General of Ontario, Toronto, Ontario, for the intervenor the Attorney General for Ontario;

Attorney General for Alberta, Edmonton, Alberta, for the intervenor Attorney General for Alberta;

McCarthy Tétrault, Montréal, Quebec, for the intervenors Association québécoise des pharmaciens propriétaires et al.

This case was heard on December 4, 1991, at Ottawa, Ontario, before Lamer, C.J.C., La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory and Iacobucci, JJ., of the Supreme Court of Canada.

On July 9, 1992, Gonthier, J., delivered the following judgment for the court in both official languages: