T-2853-84
C.E. Jamieson & Co. (Dominion) Ltd. (Plaintiff)
v.
Attorney General of Canada, the Director and
Assistant Deputy Minister, Health Protection
Branch of the Department of National Health and
Welfare (Defendants)
T-2968-84
C.E. Jamieson & Co. (Dominion) Ltd., Pharmet-
ics Ltd. and Swiss Herbal Remedies Ltd.
(Plaintiffs)
v.
Attorney General of Canada, the Director and
Assistant Deputy Minister, Health Protection
Branch of the Department of National Health and
Welfare (Defendants)
INDEXED AS: C.E. JAMIESON & Co. (DOMINION) V. CANADA
(ATTORNEY GENERAL)
Trial Division, Muldoon J.—Montréal, December
16, 17, 18, 1986; Ottawa, September 17, 1987.
Constitutional law — Distribution of powers — Food and
Drugs Act and Regulations thereunder — New drugs and DIN
— Trade and commerce power — Criminal law power includ
ing jurisdiction to establish national scheme overseen by
regulatory agency — Peace, order and good government —
Regulation of dissemination of pharmaceutical products not
dealt with in distribution of legislative powers — Matter of
national concern — Not resolved by provincial co-operation by
uniform legislation — Constitution Act, 1867, s. 121 providing
for free trade among provinces.
Constitutional law — Charter of Rights — Criminal pro
cess — Unreasonable search or seizure — Seizure of isolated
amino acids and other products from manufacturer's premises
under Food and Drugs Act — Defendant not knowing why
other products seized — Distinction between criminal investi
gations and regulatory inspections — Act providing breach of
Regulations prosecuted by indictment — Search and seizure in
context of criminal investigation — Obtaining warrant practi
cable — Charter s. 8 contravened — Seizure quashed as
unconstitutional.
Judicial review — Equitable remedies — Declarations —
Regulations under Food and Drugs Act — Whether Governor
in Council exceeding authority delegated — Regulations not
unauthorized licensing scheme — Regulations by Governor in
Council and municipal by-laws distinguished — Municipal
council congressional, not parliamentary — Regulations not
too imprecise as aimed at manufacturers, not man in street —
No illegal subdelegation'of authority by Governor in Council
— Presumption that Minister's discretionary powers exercised
by departmental officials — Director's powers restricted.
Food and Drugs — Act and Regulations — New drugs and
DIN - Whether ultra vires of Parliament or of Governor
General in Council — Whether unauthorized licensing scheme
— Regulations concerning dissemination of drugs and claims
made therefor — Not too imprecise in context — No illegal
subdelegation by Governor in Council — Presumption that
acts within Minister's discretionary powers performed by
departmental officials — Search and seizure unreasonable,
violating Charter s. 8 — Investigation criminal in nature —
Obtaining warrant practicable — S. 22(1)(d) of Act of no force
or effect.
This is an action for a declaration that subparagraph
25(1)(o)(ii) of the Food and Drugs Act is ultra vires of
Parliament and that sections C.01.014 to C.01.014.4 and
C.08.001 to C.08.011 inclusive of the Food and Drug Regula
tions are ultra vires. Subparagraph 25(1)(o)(ii) provides that
the Governor in Council may make regulations for carrying the
purposes of the Act into effect. C.E. Jamieson & Co. (Domin-
ion) Ltd. also asserts that the search and seizure by the
Director's personnel were illegal as they contravened section 8
of the Charter. Finally Jamieson seeks mandamus commanding
the Director to issue a drug identification number (DIN) for
"Stress Ease with Vitamins and Minerals" on the basis that the
Regulations have been applied unfairly to the point of creating
an injustice.
For a statement of the issues see the Editor's Note.
Held, subparagraph 25(1)(o)(ii) and the impugned Regula
tions are intra vires of Parliament. The warrantless seizure was
illegal as it contravened section 8 of the Charter. Paragraph
22(1)(d) of the Act is declared to be of no force or effect.
Jamieson is not, however, entitled to receive a DIN for its
product.
The apparently broad scope of the trade and commerce
power had been limited by judicial interpretation. Absent an
emergency, Parliament does not have power, under head 2 of
section 91 of the Constitution Act, 1867, to regulate the
business of the pharmaceutical industry within Canada. The
statutory delegation and regulations were not aimed directly at
trade and commerce but at the regulation of a single industry.
They did not regulate trade affecting the whole country.
Legislative competence was, however, to be found in the
federal criminal law power. Head 27 of section 91 of the
Constitution Act, 1867 gave Parliament jurisdiction over the
criminal law including procedure in criminal law matters. The
legislation was aimed at the dissemination of substances injuri
ous to health and the deception of the public as to the value and
safety of drugs. There are penal consequences for breaches of
the Act. The plaintiffs' argument, that these enactments regu
late a business rather than prohibit conduct, could not be
accepted. The constitutional validity of the Food and Drugs
Act, under the criminal law power, had been affirmed in a
number of reported cases. The exception was the Labatt Brew
eries case in which the Supreme Court of Canada held that the
regulation defining "light beer" had no criminal law purpose
since the product was not a hazard to health and the regulation
was not aimed at the prevention of deception through
mislabelling.
While Parliament can enact that certain conduct is criminal,
it can also, either specifically or by necessary implication,
decree other, related conduct not to be criminal. An example of
the latter was an abortion performed under a certificate issued
by a therapeutic abortion committee. In the case of the Food
and Drug Regulations, Parliament had established its own
institution to administer a criminal law statute. Parliament had
jurisdiction to establish a national regulatory scheme overseen
by a regulatory agency. Supreme Court of Canada decisions
reject the notion that criminal legislation can not go beyond
prohibition to regulation. The scope of criminal law was not to
be so restricted.
What constitutes the peace, order and good government of
Canada was not a closed book. The regulation of what is just
outside the profile of criminal law in regard to the dissemina
tion of pharmaceutical products was dealt with neither in the
Confederation debates nor in the specific distribution of legisla
tive powers. Subparagraph 25(1)(o)(ii) of the Food and Drugs
Act along with the DIN and new drug regulations made there-
under were Mira vires of Parliament, as matters of national
concern, under its authority to legislate for the peace, order and
good government of Canada. The problem was one that could
not be solved by provincial co-operation even if uniform laws
were enacted. Uniform laws did not bespeak uniform regulato
ry agencies. Provincial attempts to protect the public from
unsafe or deceptively labelled drugs would be frustrated if even
one province failed to co-operate. That was because, under
section 121 of the Constitution Act, 1867, all goods manufac
tured in a province shall be admitted free into each of the other
provinces.
It having been concluded that the Act and Regulations were
intra vires of Parliament, the next question was whether the
Governor in Council had exceeded the authority delegated. The
Regulations did not constitute an unauthorized licensing
scheme. Re Imperial Oil Limited and The City of Kingston,
[1955] O.W.N. 767, the case relied upon by the plaintiffs,
related to municipal law and stood for the proposition that if a
by-law provides for the approval of a designated official, the
corporation cannot require the further approval of another
official or of city council. Even if the Regulations in question
had to conform with the principle in that case, they did not
offend it. The Regulations did not create a licensing scheme:
they regulated the dissemination of drugs and the claims made
therefor rather than licensing drug manufacturers and mer
chants in their business existence, sales forces or price
structures.
Although it was clear that a municipal by-law could be
struck down for vagueness, it was another question whether the
same could be said with respect to regulations made by the
Governor in Council. The courts have drawn a distinction
between statutory regulations and municipal by-laws. That is
because by-laws are enacted by creatures of the legislature
which are not directly responsible to it while regulations are
made by the executive which is answerable to the legislature. If
the executive branch of the federal or provincial legislature, a
parliamentary body, loses the confidence of the elected legisla
tors, it must resign. But a municipal council is congressional in
nature. The executive has a fixed term of office even if it loses
the confidence of the elected tribunes of the people. As to the
allegation of vagueness, it had to be kept in mind that these
Regulations were aimed not at the man in the street but at drug
manufacturers and sellers who are expected to know their
business. The Court would not strike down these Regulations as
too imprecise given the context of the Act, the Regulations and
the industry. Legislative clairvoyance would be required for the
statute or regulations to identify all the new discoveries and all
the reasonable apprehensions and questions which might occur
to the Director. The DIN and new drug regulations were
sufficiently precise to tell the applicant to make full disclosure
whereupon the Director will decide whether the legislated
criteria are met by the application.
Nor did the impugned regulations involve an illegal subdele-
gation of authority by the Governor in Council. The maxim
delegates non pot est delegare, being a presumption of statutory
interpretation rather than a rule of law, operates subject to any
contrary intention found in the legislation. The courts have
been open to perceiving such an intention. It has been held that
where the exercise of a discretionary power is entrusted to a
Minister it may be presumed that the acts will be performed by
responsible departmental officials, it being unreasonable to
expect them to be performed by the Minister himself. The
discretionary powers of the Minister and the Director were not
left at large but were quite restricted.
It was admitted by the defendants that except "for the amino
acids ... the Bureau of Non-Prescription Drugs does not know
why the other products ... were seized". It was thus admitted
that there was no reasonable belief of any violation in regard to
the seized products subsequently released from seizure. The
plaintiffs Jamieson and Swiss Herbal suffered an unreasonable
seizure. As to whether Charter section 8 had been violated, it
had to be noted that the courts have drawn a distinction
between criminal investigations and regulatory inspections. A
warrantless search or seizure is more likely to be found unrea
sonable in the former case. Those who choose to enter a
government-regulated business must not have a high expecta-
tion of privacy. What is reasonable in inspecting industrial or
commercial premises differs from what is reasonable in the
search and seizure of private papers in a dwelling house. But
the search and seizure in question was in the context of a
criminal investigation. The defendant could not be heard to
deny this when the legislation was argued to be intra vires of
Parliament as relating to criminal law. The Act provides that
breach of the Regulations is an offence prosecuted by indict
ment. Nor would it have been impracticable to have obtained a
warrant. There was no emergency. Obtaining prior authoriza
tion for the search and seizure would not have impeded effec
tive law enforcement. The plaintiffs actions were in the open;
there was no risk that its "new drugs" would be concealed or
destroyed. Charter section 8 had been contravened. Paragraph
22(1)(d) of the Act is declared to have been of no force or
effect. The seizure is quashed as unconstitutional. The plain
tiffs' victory was a moral one only, since the products contain
ing amino acids remain subject to the new drug regulations.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.), s. 8.
Combines Investigation Act, R.S.C. 1970, c. C-23, s.
32(1)(c) (as am. by S.C. 1974-75-76, c. 76, s. 14(1)).
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.)
[R.S.C. 1970, Appendix II, No. 5] (as am. by Canada
Act 1982, 1982, c. 11 (U.K.), Schedule to the Consti
tution Act, 1982, Item 1), ss. 91(2),(27), 92(7),(13),
121.
Criminal Code, R.S.C. 1970, c. C-34, ss. 251(4), 443.1
(as added by S.C. 1985, c. 19, s. 70).
Employment Standards Act, R.S.O. 1980, c. 137, s. 45.
Farm Products Marketing Act, R.S.O. 1980, c. 158.
Food and Drugs Act, R.S.C. 1970, c. F-27, ss. 2 (as am.
by S.C. 1980-81-82-83, c. 47, s. 19), 3, 8, 9, 10, 11, 12,
13, 14, 15, 22 (as am. by S.C. 1985, c. 26, s. 12),
25(1)(b) (as am. by S.C. 1976-77, c. 28, s. 16),
(e),(m),(o)(ii), 26, 27, 28, 29, 32, Schedules A, B, C,
D, E, F.
Food and Drug Regulations, C.R.C., c. 870, ss. C.01.014
(as am. by SOR/81-248, s. 2), C.01.014.1 (as am.
idem), C.01.014.2 (as am. idem), C.01.014.3 (as am.
idem), C.01.014.4 (as am. idem), C.08.001, C.08.002,
C.08.003, C.08.004, C.08.005 (as am. by SOR/79-236,
s. 5), C.08.006, C.08.007, C.08.008, C.08.009,
C.08.010, C.08.011.
Narcotic Control Act, R.S.C. 1970, c. N-1, s. 12.
Plant Quarantine Act, R.S.C. 1970, c. P-13, s. 6(1)(a).
CASES JUDICIALLY CONSIDERED
APPLIED:
Standard Sausage Co. v. Lee, Proctor v. Standard Sau
sage Co., [1933] 4 D.L.R. 501 (B.C.C.A.); Labatt Brew
eries of Canada Ltd. v. Attorney General of Canada,
[1980] 1 S.C.R. 914; revg. [1980] 1 F.C. 241 (C.A.);
revg. (1978), 84 D.L.R. (3d) 61 (F.C.T.D.); R. v. Wet-
more et al., [1983] 2 S.C.R. 284; Re: Anti-Inflation Act,
[1976] 2 S.C.R. 373; Carltona Ltd. v. Works Comrs.,
[1943] 2 All E.R. 560 (C.A.); R. v. Harrison, [1977] 1
S.C.R. 238; Hunter et al. v. Southam Inc., [1984] 2
S.C.R. 145; R. v. Rao (1984), 12 C.C.C. (3d) 97 (Ont.
C.A.) (leave to appeal to Supreme Court of Canada
refused, [1984] 2 S.C.R. ix); Re Belgoma Transportation
Ltd. and Director of Employment Standards (1985), 51
O.R. (2d) 509 (C.A.); R. v. Quesnel (1985), 24 C.C.C.
(3d) 78 (Ont. C.A.) (leave to appeal to Supreme Court of
Canada refused, [1986] 1 S.C.R. xiii); Bertram S. Miller
Ltd. v. R., [1986] 3 F.C. 291 (C.A.) (leave to appeal to
Supreme Court of Canada refused, [1986] 2 S.C.R. v);
R. v. Bichel (1986), 4 B.C.L.R. (2d) 132 (C.A.).
DISTINGUISHED:
Re Imperial Oil Limited and The City of Kingston,
[1955] O.W.N. 767 (H.C.); Brant Dairy Co. Ltd. et al. v.
Milk Commission of Ontario et al., [1973] S.C.R. 131;
Voyageur Inc. c. Commission des transports du Québec,
[1986] R.J.Q. 2577 (C.S.).
CONSIDERED:
Citizens Insurance Company of Canada v. Parsons
(1881-82), 7 A.C. 96 (P.C.); Attorney General of Canada
v. Canadian National Transportation, Ltd. et al., [1983]
2 S.C.R. 206; Canadian Federation of Agriculture v.
Attorney-General for Quebec (Margarine Reference),
[1951] A.C. 179 (P.C.); Berryland Canning Company
Ltd. v. The Queen, [1974] F.C. 91 (T.D.); R. v. Kripps
Pharmacy Ltd. and Kripps (1980), 114 D.L.R. (3d) 457
(B.C.Co.Ct.); Canadian Indemnity Co. et al. v. A.G. of
British Columbia, [1977] 2 S.C.R. 504; R. v. Hauser,
[1979] 1 S.C.R. 984; R. v. Aziz, [1981] 1 S.C.R. 188;
Schneider v. The Queen in Right of British Columbia,
[1982] 2 S.C.R. 112.
REFERRED TO:
In re "Insurance Act, 1910" (1913), 48 S.C.R. 260; In re
Board of Commerce Act, 1919, and Combines and Fair
Prices Act, 1919, [1922] 1 A.C. 191 (P.C.); MacDonald
et al. v. Vapor Canada Ltd., [1977] 2 S.C.R. 134;
Attorney General of Canada v. Québec Ready Mix Inc.,
[1985] 2 F.C. 40 (C.A.); Proprietary Articles Trade
Association v. Attorney-General for Canada, [1931]
A.C. 310 (P.C.); Combines Investigation Act Reference
re Validity of The, [1929] S.C.R. 409; [1929] 2 D.L.R.
802; Morgentaler v. The Queen, [1976] 1 S.C.R. 616;
Asbjorn Horgard AIS v. Gibbs/Nortac Industries Ltd.,
[1987] 3 F.C. 544 (C.A.); James Richardson and Sons
Limited v. Minister of National Revenue, [1983] 1 F.C.
3 (T.D.); Attorney-General of British Columbia v.
Attorney-General of Canada (the Johnny Walker case),
[1924] A.C. 222 (P.C.); Re: Exported Natural Gas Tax,
[1982] 1 S.C.R. 1004; Johannesson v. Municipality of
West St. Paul, [1952] 1 S.C.R. 292; Munro v. National
Capital Commission, [1966] S.C.R. 663; Comité d'ad-
ministration du régime de rentes c. La Régie des rentes,
500-05-024078-782, November 6, 1979, Que. S.C.,
unreported; Miron Ltée c. R., [1979] C.A. 36; R. v.
Sandler (1971), 21 D.L.R. (3d) 286 (Ont. C.A.); Mon-
treal Gazette Ltd. c. Ville de Montréal, [1975] C.S. 686
(appeal dismissed, unreported, 500-09-00910-752,
C.A.M., February 27, 1981); Corporation municipale du
village de Rimouski Est c. Corporation municipale de la
cité de Rimouski et P.G. du Québec, [1976] C.S. 485; Re
Campeau Corporation and City of Ottawa (1978), 22
O.R. (2d) 40 (Div. Ct.); City of Dartmouth v. S. S.
Kresge Co. Ltd. (1966), 58 D.L.R. (2d) 229 (N.S.S.C.);
Kruse v. Johnson, [1898] 2 Q.B. 91 (Div. Ct.); Aerlinte
Eireann Teoranta v. Canada, [1987] 3 F.C. 383 (T.D.);
Bacon v. Ont. Flue-Cured Tobacco Growers Marketing
Bd., [1959] O.W.N. 256 (H.C.); Remis v. Fontaine,
[1951] 2 D.L.R. 461 (Man. C.A.); Sparks v. Edward
Ash, Ld., [1943] K.B. 223 (C.A.); Taylor v. Brighton
Borough Council, [1947] K.B. 736 (C.A.).
AUTHORS CITED
Bennion, F.A.R. Statutory Interpretation, London: But-
terworths, 1984.
Canada. Commission de réforme du droit. Notre droit
pénal. Ottawa: Ministre des Approvisionnements et
Services, 1976.
Canada. Law Reform Commission, Our Criminal Law.
Ottawa: Minister of Supply and Services, 1976.
De Smith's Judicial Review of Administrative Action,
4th ed. by J. M. Evans London: Stevens & Sons, 1980.
Driedger, Elmer A. Construction of Statutes, 2nd ed.
Toronto: Butterworths, 1983.
Driedger, Elmer A. "Subordinate Legislation" (1960), 38
Cdn. B. Rev. 1.
Dussault, René and Louis Borgeat. Administrative Law:
A Treatise, (trans. by M. Rankin), Toronto: Carswell,
1985.
Garant, Patrice. Droit administratif, 2' éd. Montréal:
Editions Yvon Blais Inc., 1985.
Gibson, R. Dale. "Measuring National Dimensions"
(1976), 7 Man. L.J. 15.
Hogg, Peter W. Constitutional Law of Canada, 2nd ed.
Toronto: Carswell, 1985.
Pigeon, Louis-Philippe. Rédaction et Interprétation des
lois, Québec: Éditeur officiel du Québec, 1965.
COUNSEL:
P. Wilbrod Gauthier, Q.C. and Christine
Carron for plaintiffs.
J. M. Mabbutt and Jean-Marc Aubry for
defendants.
SOLICITORS:
Ogilvy, Renault, Montréal, for plaintiffs.
Deputy Attorney General of Canada for
defendants.
EDITOR'S NOTE
The Executive Editor has decided to report, as
abridged, His Lordship's 128-page reasons for
judgment herein. The issues in this litigation were:
(1) whether subparagraph 25(1)(o)(ii) of the Food
and Drugs Act is ultra vires of Parliament; (2)
whether the DIN regulations and/or the new drug
regulations are ultra vires of the Governor Gener
al in Council and (5) whether the search and
seizure under the Food and Drugs Act, section 22
violated the plaintiffs' Charter section 8 rights.
The decision with respect to those issues is pub
lished in its entirety. Omitted from this report are
the reasons for judgment with respect to the third
and fourth issues. They were: (3) were the isolat
ed amino acids and amino acid products truly
"new drugs" within the meaning of the legislation
and (4) were the new drug regulations applied in
an unfair, unreasonable and discriminatory
manner? The conclusions concerning the omitted
issues are dealt with in an Editor's Note.
The following are the reasons for judgment
rendered in English by
MULDOON J.: In this combined litigation the
plaintiffs assert that subparagraph 25(1)(o)(ii) of
the Food and Drugs Act, R.S.C. 1970, c. F-27, is
ultra vires of Parliament and that regulations
C.01.014 to C.01.014.4 inclusive, [Food and Drug
Regulations] C.R.C., c. 870 as added by SOR/81-
248, s. 2 and regulations C.08.001 to C.08.011
inclusive, as amended by SOR/79-236 s. 5, are all
also ultra vires if not of Parliament then of the
Governor General in Council. The above-men
tioned regulations are alleged, consequently, to be
null and void in that:
a) they constitute a licensing scheme not authorized by the
powers to make regulations under section 25 of the Food and
Drugs Act (hereinafter, the Act);
b) they are not regulations at all since they contain no objec
tive standards for the criteria for (i) the definition of a new
drug, (ii) the issuance of notice of compliance by the Minister,
(iii) the issuance of a "drug identification number" (herein-
after, DIN);
c) they constitute [or are an expression of] an illegal delegation
of authority;
d) they constitute an illegal delegation of discretion to the
Director [the Assistant Deputy Minister of National Health
and Welfare] which discretion has been exercised in an arbi
trary and discriminatory manner by his employees ([sic] or
subordinate personnel); and
e) they have the effect of constituting the Director a court by
reason of the fact that they purport to give him the power to
determine what constitutes a violation of the Act or its
regulations.
In regard to the foregoing, the plaintiffs seek
declaratory relief.
The plaintiff, C.E. Jamieson & Co. (Dominion)
Ltd., hereinafter Jamieson, asserts also that the
search on its premises for and seizure of all isolat
ed amino acids and all amino acid products in its
inventory on December 17, 1984, by the Director's
personnel were and are illegal, null and void, in
particular in that they were unreasonable and
contravene section 8 of the Canadian Charter of
Rights and Freedoms [being Part I of the Consti
tution Act, 1982, Schedule B, Canada Act 1982,
1982, c. 11 (U.K.)]. The plaintiffs assert that, in
any event, the said isolated amino acids and amino
acid products are not "new drugs" within the
meaning of the Act and Regulations.
Finally, and in the ultimate alternative the
plaintiffs allege that even if the above-mentioned
regulations be not ultra vires, the manner in which
they have been applied vis-a-vis the plaintiffs is
unfair, unreasonable and discriminatory to the
point of creating a flagrant injustice, and that in
particular Jamieson is entitled to receive a DIN for
its product.
In this latter regard Jamieson seeks, in effect, an
order in the nature of mandamus commanding the
Director to issue a DIN for its product "Stress Ease
with Vitamins and Minerals". In fact, the parties
now agree that the Director and his staff withdrew
their objection to Jamieson's proposed trade name
"Stress-Ease", after the institution of these present
proceedings. While the Director did not withdraw
his objection to the inclusion of L-tryptophan in
the product, he did approve the issuance of a DIN
for a product, without tryptophan, under the trade
name, "Stress-Ease".
These two cases came to trial simultaneously on
December 16, 17 and 18, 1986, in Montréal,
Quebec. The exhibits are voluminous, most being
entered in each action, and the parties' joint state
ments of agreed facts, one entered in each action,
are complex. Finally settled pleadings were intro
duced and certified records amended by nunc pro
tune order, with the consent of counsel on both
sides, only at the opening of the simultaneous
trials, and the requisite amended form of state
ment of defence in action No. T-2853-84 was filed
in January 1987. Written submissions were
received also in that month. Transcripts of the
proceedings were also obtained.
The parties' amended joint admissions of facts
and their written additional admissions, including
documents adopted therein by reference, are no
doubt uppermost in the parties' minds in each
action and in every detail and so it is unnecessary
to repeat or recite them here. Needless to empha
size in adversarial civil litigation such as this is,
albeit concerned with important issues of public
law, the Court will ordinarily accept and adopt the
facts which the adversaries present by agreement.
In addition to the agreed written evidence, the
plaintiffs called five witnesses to present viva voce
testimony. They are: Eric Margolis, Chief Execu
tive Officer of the plaintiff, Jamieson; James Allan
Maranda, President of the plaintiff, Swiss Herbal
Remedies; Barrie Carlson, President of Ouest
Vitamin Supplies Limited; Errol Abramson, owner
of BEA per Capita Corporation, a British
Columbia based vitamin packager and retailer;
and Hyman Busgang, President and owner of the
plaintiff, Pharmetics. Counsel for the defendants
cross-examined only Mr. Margolis, and he did not
call any witnesses to testify viva voce at trial for
the defence.
For the defence there was tendered, by defend
ants' counsel, as exhibit 2 in both actions, the
affidavit of Simon N. Young, Ph.D. an expert
who, with the consent of both sides, was not called
to testify at the trial. A transcript of the cross-
examination of Professor Young by plaintiffs'
counsel, held on December 11, 1986, is exhibit 3 in
both actions. Various substances in tablets, sachets
and capsules were identified during that cross-
examination and they are received as exhibits
3(SY1) through 3(SY8) in both actions. Extracts
from the transcripts of the examinations by plain
tiffs' counsel for discovery of defendants' officials,
Denys Cook and Robert Ferrier are together
exhibit 4.
In all, twenty major exhibits are filed herein,
three en liasse and several being documents of as
many as six pages. The documentary evidence
tendered is voluminous, highly detailed and rather
technical in general.
On their part, the defendants rely on the state
ment of admissions and the supplementary docu
ments produced as and with exhibit 1, the affidavit
of Professor Simon N. Young (ex. 2) and the
transcript of his cross-examination thereon (ex. 3)
and exhibit 10 (en liasse) the notice of compliance
dated October 6, 1986, and product monograph
ICN Canada Ltd. of September 2, 1986. (Tran-
script 1, page 137.)
ISSUES
The facts and the pleadings raise a number of
administrative law and constitutional law issues.
These will be examined in the order of sine qua
non, starting with the issue of legislative compe
tence under the division of powers as to the vires of
Parliament to legislate and to delegate legislative
authority in the matter of food and drugs. The
issues, then, are the following:
I. LEGISLATIVE COMPETENCE: Are subparagraph
25(1)(o)(ii) of the Food and Drugs Act and the regula
tions regarding new drugs ultra vires or intra vires of
Parliament?
II. SUBORDINATE LEGISLATIVE COMPETENCE: Are the DIN
regulations and/or the new-drug regulations ultra vires
of the Governor General in Council for any of the
following asserted reasons:
A. They constitute a licensing scheme not authorized
by section 25 of the Food and Drugs Act;
B. They establish no objective standards and are too
vague; and/or
C. They constitute or are an expression of an illegal
subdelegation of authority?
III. Were the isolated amino acids and amino acid products
truly "new drugs" in contemplation of the Act and the
Regulations?
IV. Were the regulations regarding new drugs applied in an
unfair, unreasonable and discriminatory manner?
V. CHARTER APPLICATION: Did the search and seizure
pursuant to section 22 of the Food and Drugs Act,
violate the plaintiffs' right guaranteed by section 8 of
the Canadian Charter of Rights and Freedoms, and is
that section 22 itself violative of such right?
The determination of the foregoing issues will
provide the definitive outcome of this litigation.
I. PARLIAMENT'S LEGISLATIVE COMPETENCE:
Are subparagraph 25(1)(o)(ii) of the Food and
Drugs Act and the regulations regarding new
drugs ultra vires or intra vires of Parliament?
This question demands a resolution of constitu
tional division of powers and that resolution is the
sine qua non of this litigation. It is such, because if
the statutory enactment upon which the regula
tions depend be beyond Parliament's constitutional
powers, then the regulations will fall for lack of a
legal base and the plaintiffs will be able—and will
have been able—to pursue their activities free of
regulatory constraint on the part of the Parliament
and government of Canada. On the other hand, if
the statutory enactment be valid, one must still
consider whether the actual regulations be a
proper exercise of the powers conferred on the
Governor in Council and, if so, whether the state's
functionaries have applied and enforced them law
fully. If the regulations be invalidly formulated
and promulgated then the enquiry will stop upon
such a finding.
The plaintiffs submit that the statutory provi
sion, subparagraph 25(1)(o)(ii) of the Act, cannot
be supported by Parliament's exclusive power to
make laws in relation to all matters within the
subjects of "trade and commerce" or "criminal
law", nor yet by the general jurisdiction to make
laws for the peace, order and good government
(p.o. & g.g.) of Canada. The first-mentioned field
of jurisdiction resides in Head 2 of section 91 of
the Constitution Act, 1867 [30 & 31 Vict., c. 3
(U.K.) [R.S.C. 1970, Appendix II, No. 5] (as am.
by Canada Act 1982, 1982, c. 11 (U.K.), Schedule
to the Constitution Act, 1982, Item 1)], the second
resides in Head 27 of section 91 and the general
power, last-mentioned finds its origin in the Con
stitution's basic grant of Parliament's power
expressed in the opening words of section 91.
In addition to that panoramic assertion of lack
of jurisdiction, the plaintiffs further assert that
such an enactment must come within, because it
infringes, the provincial jurisdiction to make laws
exclusively in relation to matters within the class
of subject which is "property and civil rights of the
province" which might enact such laws or decline
to do so. The provincial jurisdiction resides in
Head 13 of section 92 of the Constitution Act,
1867. In this litigation the plaintiffs alone carry
the burden of such persuasion, unaided by any
provincial attorney general because none was
represented in these proceedings.
In response, the defendants submit that the
impugned provision of the Food and Drugs Act,
with the supporting provisions generally of the Act
itself, is validly enacted by Parliament pursuant to
its powers under section 91 of the Constitution
Act, 1867, particularly the power to make laws in
relation to criminal law and/or p.o. & g.g.
Judicial review of legislation in the context of
the constitutional division of powers is theoretical
ly a two-step sequence: first, a determination of
the pith and substance (that is, dominant subject-
matter) of the legislation; and then the assignment
of that subject-matter to one of the heads of power
(that is, classes of subjects) listed in and distribut
ed by sections 91 and 92 (inter alia) of the consti
tutional statute. Those two steps frequently fuse
because determination of the pith and substance is
often expressed as one or more of the heads of
power to legislate.
There is more to the question of power to legis
late than resides only in subparagraph 25(1)(o)(ii)
of the principal enactment. The form and purpose
or thrust of the Act and its Regulations are to be
considered. Because the Act in form does not
contain any preamble to state its legislative intent,
the same must be inferred from its provisions.
Certain of the interpretive definitions [section 2
(as am. by S.C. 1980-81-82-83, c. 47, s. 19)] are
worth reciting, thus:
2....
"Department" means the Department of National Health and
Welfare; [and "Minister" of course bears the correlative
meaning];
"drug" includes any substance or mixture of substances manu
factured, sold or represented for use in
(a) the diagnosis, treatment, mitigation or prevention of a
disease, disorder, abnormal physical state, or the symp
toms thereof, in man or animal,
(b) restoring, correcting or modifying organic functions in
man or animal, or
(c) disinfection in premises in which food is manufac
tured, prepared or kept;
"inspector" means any person designated as an inspector under
section 21.1 or pursuant to the Department of Consumer and
Corporate Affairs Act for the purpose of the enforcement of
this Act;
"label" includes any legend, word or mark attached to, includ
ed in, belonging to or accompanying any food, drug, cosmet
ic, device or package;
"package" includes any thing in which any food, drug, cosmetic
or device is wholly or partly contained, placed or packed;
"prescribed" means prescribed by the regulations;
"sell" includes sell, offer for sale, expose for sale, have in
possession for sale, and distribute;
Part I of the Food and Drugs Act bears the title
FOODS, DRUGS, COSMETICS AND DEVICES. This
Part commences with a general provision:
General
3. (1) No person shall advertise any food, drug, cosmetic or
device to the general public as a treatment, preventative or cure
for any of the diseases, disorders or abnormal physical states
mentioned in Schedule A.
(2) No person shall sell any food, drug, cosmetic or device
(a) that is represented by label, or
(b) that he advertises to the general public
as a treatment, preventative or cure for any of the diseases,
disorders or abnormal physical states mentioned in Schedule A.
(3) Except as authorized by regulation, no person shall
advertise to the general public any contraceptive device or any
drug manufactured, sold or represented for use in the preven
tion of conception.
Under its next heading Food, there are four fur
ther sections which, like section 3, having regard to
section 26 under Penalties, create offences being
the sale of poisonous or harmful substances, food
unfit for human consumption, rotten, decomposed
or adulterated food and the like. Labelling, pack
aging, selling or advertising any food in a false,
misleading or deceptive manner, or likely creating
a false impression about its character, value, merit
or safety and the like are all prohibited. Unsani
tary conditions for food are likewise prohibited.
That division of Part I entitled Drugs is more
elaborate than the foregoing but is largely
modelled on the offences and prohibitions
expressed under Food. In the circumstances, it is
worth reciting in detail, so:
Drugs
8. No person shall sell any drug that
(a) was manufactured, prepared, preserved, packed or stored
under unsanitary conditions; or
(b) is adulterated.
9. (1) No person shall label, package, treat, process, sell or
advertise any drug in a manner that is false, misleading or
deceptive or is likely to create an erroneous impression regard
ing its character, value, quantity, composition, merit or safety.
(2) A drug that is not labelled or packaged as required by
the regulations, or is labelled or packaged contrary to the
regulations, shall be deemed to be labelled or packaged con
trary to subsection (1).
10. (1) Where a standard has been prescribed for a drug, no
person shall label, package, sell or advertise any substance in
such a manner that it is likely to be mistaken for such drug,
unless the substance complies with the prescribed standard.
(2) Where a standard has not been prescribed for a drug,
but a standard for the drug is contained in any publication
mentioned in Schedule B, no person shall label, package, sell or
advertise any substance in such a manner that it is likely to be
mistaken for such drug, unless the substance complies with
such standard.
(3) Where a standard for a drug has not been prescribed and
no standard for the drug is contained in any publication
mentioned in Schedule B, no person shall sell such drug, unless
(a) it is in accordance with the professed standard under
which it is sold, and
(b) it does not resemble, in a manner likely to deceive, any
drug for which a standard has been prescribed or is contained
in any publication mentioned in Schedule B.
11. No person shall manufacture, prepare, preserve, package
or store for sale any drug under unsanitary conditions .
12. No person shall sell any drug described in Schedule C or
D unless the Minister has, in prescribed form and manner,
indicated that the premises in which the drug was manufac
tured and the process and conditions of manufacture therein
are suitable to ensure that the drug will not be unsafe for use.
13. No person shall sell any drug described in Schedule E
unless the Minister has, in prescribed form and manner,
indicated that the batch from which the drug was taken is not
unsafe for use.
14. (1) No person shall distribute or cause to be distributed
any drug as a sample.
(2) Subsection (1) does not apply to the distribution, under
prescribed conditions, of samples of drugs to physicians, den
tists, veterinary surgeons or pharmacists.
15. No person shall sell any drug described in Schedule F.
[Schedule revoked July 18, 1984 (SOR/84-566, s. 1).]
Part II of the Act bearing the title, ADMINIS
TRATION AND ENFORCEMENT deals with inspec
tors, search and seizure, forfeiture, analysis of
articles and substances, regulations (including the
impugned provision), penalties and evidence. In
terms of characterizing Parliament's legislative
competence in regard to the enactment of the
Food and Drugs Act from the point of view of
international trade and commerce, Part II ends
with a most telling section. It runs under the title,
Exports, thus:
32. This Act does not apply to any packaged food, drug
(other than a drug or other substance defined as a controlled
drug by Part III or as a restricted drug by Part IV), cosmetic or
device, not manufactured for consumption in Canada and not
sold for consumption in Canada, if the package is marked in
distinct overprinting with the word "Export", and a certificate
that the package and its contents do not contravene any known
requirement of the law of the country to which it is or is about
to be consigned, has been issued in respect thereof in prescribed
form and manner.
Schedule A is a list of some 46 conditions and
diseases, mental and physical, alphabetically
arranged, from alcoholism, through anxiety,
depression, obesity and pleurisy, among others, to
vaginitis and venereal disease. Schedule B is a list
of seven well-known formularies and pharmaco-
poeiae. Schedule C covers radiopharmaceuticals,
and D is a list of natural and organic substances
and secretions. Schedule E is blank, and F was
revoked in July 1984.
By virtue of section 32, above cited, the compass
of the Food and Drugs Act operates only in and
throughout Canada, with an exception provided in
regard to the labelling of drugs manufactured for
consumption outside of Canada. The exception is
not in issue here. Therefore it is within the sole
optic of a statute enacted and promulgated by
Parliament in and for Canada that the plaintiffs
attack the vires of the impugned subparagraph:
25. (1) The Governor in Council may make regulations for
carrying the purposes and provisions of this Act into effect,
and, in particular, but not so as to restrict the generality of the
foregoing, may make regulations
(o) respecting
(ii) the sale or the conditions of sale of any new drug,
and defining for the purposes of this Act the expression "new
drug „ ...
Paragraph 25(1)(o) is enacted in the context of
that section of the Act which declares at least one
legislative intent of the statute, and expresses a
purpose which is closely connected with the
impugned provision. The other, closely connected
part is paragraph 25(1)(b) [as am. by S.C. 1976-
77, c. 28, s. 16], among others. In context, then,
the impugned subparagraph is part of a legislative
schema which runs, at least partially, thus:
25. (1) The Governor in Council may make regulations for
carrying the purposes and provisions of this Act into effect,
and, in particular, but not so as to restrict the generality of the
foregoing, may make regulations
(b) respecting
(i) the labelling and packaging and the offering, exposing
and advertising for sale of food, drugs, cosmetics and
devices,
(ii) the size, dimensions, fill and other specifications of
packages of food, drugs, cosmetics and devices,
(iii) the sale or the condition of sale of any food, drug,
cosmetic or device, and
(iv) the use of any substance as an ingredient in any food,
drug, cosmetic or device,
to prevent the consumer or purchaser thereof from being
deceived or misled as to its design, construction, perform
ance, intended use, quantity, character, value, composition,
merit or safety, or to prevent injury to the health of the
consumer or purchaser;
(e) respecting the method of preparation, manufacture, pre
serving, packing, storing and testing of any food, drug,
cosmetic or device in the interest of, or for the prevention of
injury to, the health of the consumer or purchaser;
(m) adding anything to any of the schedules, in the interest
of, or for the prevention of injury to, the health of the
consumer or purchaser, or deleting anything therefrom;
(o) respecting
(i) the method of preparation, manufacture, preserving,
packing, labelling, storing and testing of any new drug,
and
(ii) the sale or the condition of sale of any new drug,
and defining for the purposes of this Act the expression "new
drug"; .... [Emphasis not in original text.]
In order to understand the pith and substance of
the impugned subparagraph 25(1)(o)(ii), it is
essential to ascertain the legislative intent and
purpose of the provision in its proper context. The
context of this provision which confers on the
Governor in Council the power to make regula
tions for carrying the purposes of the Act into
effect reveals a legislative intent which is manifest
in sections 8, 9(1), 10(1) and (2), 11, 12, 13, 26,
27, 28, 29 and in paragraphs 25(1)(b), (e) and
(m). The statutory authority to make regulations
respecting drugs generally, and new drugs in par
ticular, must stand or fall in this constitutional and
legislative context.
Early on in the Regulations, there are the DIN
provisions of which the plaintiffs complain and
which they seek to have declared ultra vires of
Parliament and of the Governor in Council in
terms of the scope and reach of the Food and
Drugs Act. They are regulations C.01.014 to
C.01.014.4 which may conveniently be either
quoted or paraphrased thus:
C.01.014. (1) No manufacturer shall sell a drug in dosage
form unless a drug identification number has been assigned for
that drug and the assignment of the number has not been
cancelled pursuant to section C.01.014.6.
(2) Subsection (1) does not apply where the drug is a
radiopharmaceutical, a sensitivity disc or a sensitivity tablet.
C.01.014.1. Any manufacturer or importer may apply for a
DIN, which shall be made to the Director in writing and shall
set out specified matters (a) to (n), such as: the pharmaceutical
form in which the drug is to be sold; the recommended route of
administration; quantitatively the medicinal ingredients by
their proper, or at least common names; whether sold for
human or veterinary use, or for disinfection of premises; name
and quantity of each colouring which is not a medicinal
ingredient; the use or purpose for which the drug is recom
mended; recommended dosage; identification of the manufac
turer or importer; and the text of all labels and package inserts
and of any further prescribing information stated to be avail
able on request. In the case of a new drug, a submission filed
under C.08.002, or in the case of a proprietary medicine an
application under C.10.003, is deemed to be an application for
a DIN.
C.01.014.2. Where an applicant has provided all the infor
mation required in respect of a drug, the Director shall issue "a
document" setting out the DIN and recording the information
referred to in C.01.014.1(2)(a) to (f), but where the Director
believes on reasonable grounds that the product is not a drug,
or, is a drug but its sale [sic] [ingestion, surely] would cause
injury to the health of the consumer or purchaser or would
violate the Act or Regulations, he may refuse to issue that
"document". If so, the applicant may submit additional infor
mation and ask the Director to reconsider, that which the latter
shall do.
C.01.014.3. The applicant or a person authorized by the
applicant shall, within 30 days after he commences sale of a
drug, date and sign the document issued pursuant to section
C.01.014.2 in respect of the drug and return the document
(a) with a confirmation that the information recorded there
in is correct;
(b) indicating the date on which the drug was first sold in
Canada; and
(c) accompanied by samples or facsimiles of all labels and
package inserts and any further prescribing information
stated to be available on request.
C.01.014.4. Where an application in respect of a drug is
made under section C.01.014.1 and the information set out in
the application is no longer correct due to a change in the
subject matter of that information,
(a) in the case of a change in the subject matter of any of
the information referred to in paragraphs C.01.014.1(2)(a)
to (e)
(i) that occurs prior to the sale of the drug, a new
application shall be made, or
(ii) that occurs after the sale of the drug, no further sale
of the drug shall be made until a new application for a
drug identification number in respect of that drug is made
and a number is assigned; and
(b) in the case of a change in the subject matter of any of
the information referred to in paragraphs C.01.014.1(2)(J)
to (k)
(i) that occurs prior to the sale of the drug, the particulars
of the change shall be submitted with the return of the
document referred to in section C.01.014.3, or
(ii) that occurs after the sale of the drug, the person to
whom the drug identification number in respect of that
drug was issued shall, within 30 days of the change, inform
the Director of the change.
The heart of the plaintiffs' complaint is the alleged
vagueness of section C.01.014.2, paraphrased
above.
The "new drug" regulations of which the plain
tiffs complain are promulgated in Division 8 of the
Regulations. It begins with a definition of New
Drugs, thus:
C.08.001. For the purposes of the Act and this Division
"New Drug" means
(a) a drug that contains or consists of a substance, whether
as an active or inactive ingredient, carrier, coating, excipient,
menstruum or other component, that has not been sold as a
drug in Canada for sufficient time and in sufficient quantity
to establish in Canada the safety and effectiveness of that
substance for use as a drug;
(b) a drug that is a combination of two or more drugs, with
or without other ingredients, and that has not been sold in
that combination or in the proportion in which those drugs
are combined in that drug, for sufficient time and in suffi
cient quantity to establish in Canada the safety and effective
ness of that combination and proportion for use as a drug; or
(c) a drug, with respect to which the manufacturer pre
scribes, recommends, proposes or claims a use as a drug, or a
condition of use as a drug, including dosage, route of
administration, or duration of action and that has not been
sold for that use or condition of use in Canada, for sufficient
time and in sufficient quantity to establish in Canada the
safety and effectiveness of that use or condition of use of that
drug.
The remainder of the impugned regulations
in Division 8 are voluminous, and this exer
cise of characterizing them—C.08.002 through
C.08.011—in terms of constitutional vires, can be
adequately served by a paraphrased brief sum
mary.
C.08.002—provides that no person shall sell a new drug
unless the manufacturer has filed with the Minister a new drug
submission and obtained a notice of compliance; lists the
information which a new drug submission must include.
C.08.003—in effect provides that if any of the information
contained in the new drug submission differs from the actual
selling practices of that new drug, the new drug shall not be
sold unless the manufacturer files with the Minister a supple
ment to the new drug submission containing such information
and material as the Director may require.
C.08.004—requires the Minister to issue a notice of compli
ance within 120 days where the new drug submission complies
with C.08.002 or C.08.003.
C.08.005—lists the circumstances under which a manufac
turer may sell a new drug to "qualified investigators" for the
sole purpose of clinical testing to obtain evidence about its
safety, dosage and effectiveness, notwithstanding section
C.08.002 or C.08.003.
C.08.006—authorizes the Minister to suspend a notice of
compliance where doing so is, in his or her opinion, in the
interests of public health, where the effectiveness of the new
drug is now questionable, or where the new drug submission
has been found to have been based upon any untrue statement
of material fact.
C.08.007—requires a manufacturer, who has obtained a
notice of compliance, to maintain adequately organized records
of current scientific research concerning the new drug, and of
actual selling and consumption practices of the new drug.
C.08.008—prohibits manufacturers from selling new drugs
unless they have complied with C.08.007.
C.08.009—sets out the procedure to be followed when the
Minister suspends a notice of compliance.
C.08.010—provides for the sale, on the Director's authoriza
tion, of a new drug to a medical practitioner for emergency
treatment.
C.08.011—permits a manufacturer to make a C.08.010 type
of sale, and exempts such a sale from the provisions of the Act
and Regulations.
I (1): TRADE AND COMMERCE
The defendants' counsel rightly did not rely
heavily upon this head of Parliament's power. It
can be dealt with quite briefly.
Head 2 of section 91 of the Constitution Act,
1867, confers upon Parliament the exclusive legis
lative authority to make laws in regard to that
class of subject designated as the regulation of
trade and commerce. The apparently broad scope
of this power has been restrictively limited by
judicial interpretation. The decision of the Judicial
Committee of the Privy Council in Citizens Insur
ance Company of Canada v. Parsons (1881-82), 7
A.C. 96, accepts that Parliament's regulatory
power over trade and commerce includes political
arrangements in regard to trade requiring the
sanction of Parliament, regulation of interprovin-
cial trade and perhaps regulation of trade affecting
the whole country, but does not comprehend the
regulation by legislation of the contracts of a
particular business or trade in a single province.
Here, Parliament purports to regulate the business
of the pharmaceutical industry within Canada.
However, it is not acceptable that it may lawfully
do so, absent an emergency, even though the
industry operates and the legislation applies
throughout the country. Such a conclusion on the
trade and commerce power may be taken, inter
alia, from a selection of the decisions of the
Supreme Court of Canada and the Judicial Com
mittee of the Privy Council over a fair span of
years in: In re `Insurance Act, 1910" (1913), 48
S.C.R. 260; In re Board of Commerce Act, 1919,
and Combines and Fair Prices Act, 1919, [1922] 1
A.C. 191 (P.C.); and MacDonald et al. v. Vapor
Canada Ltd., [1977] 2 S.C.R. 134.
Conceding that the Food and Drugs Act is
regulatory legislation (transcript 3, pages 91 and
92), the defendants' counsel argued simply that it
rests, in part, on the trade and commerce power,
being "justifiable as regulation as a general matter
of trade of interest to the Dominion", (transcript
3, page 123). He submitted nothing more on the
subject of that power as a foundation for this
legislation.
Some support for invocation of the trade and
commerce power might be inferred from the
minority judgments in Attorney General of
Canada v. Canadian National Transportation,
Ltd. et al., [1983] 2 S.C.R. 206. There Messrs.
Justices Beetz and Lamer expressed themselves
(page 282) to be in substantial agreement with
Mr. Justice Dickson (now Chief Justice) to the
effect that paragraph 32(1)(c) of the Combines
Investigation Act [R.S.C. 1970, c. C-23 (as am. by
S.C. 1974-75-76, c. 76, s. 14(1))] was validly
enacted by Parliament under its authority to make
laws in relation to trade and commerce pursuant to
Head 2 of section 91 of the Constitution Act,
1867. Dickson J. is reported, at pages 267 and 268,
to have made these observations, which may bear
some relevance to the instant circumstances.
In approaching this difficult problem 'of characterization it is
useful to note the remarks of the Chief Justice in MacDonald v.
Vapor Canada Ltd., supra, at p. 165, in which he cites as
possible indicia for a valid exercise of the general trade and
commerce power the presence of a national regulatory scheme,
the oversight of a regulatory agency and a concern with trade
in general rather than with an aspect of a particular business.
To this list I would add what to my mind would be even
stronger indications of valid general regulation of trade and
commerce, namely (i) that the provinces jointly or severally
would be constitutionally incapable of passing such an enact
ment and (ii) that failure to include one or more provinces or
localities would jeopardize successful operation in other parts of
the country.
The above does not purport to be an exhaustive list, nor is the
presence of any or all of these indicia necessarily decisive. The
proper approach to the characterization is still the one suggest
ed in Parsons, a careful case by case assessment. Nevertheless,
the presence of such factors does at least make it far more
probable that what is being addressed in a federal enactment is
genuinely a national economic concern and not just a collection
of local ones. [Emphasis is not in original text.]
These thoughts do not, of course, contemplate the
exact circumstances of the case at bar, but they do
not overbear the defendants' concession about the
regulatory character of the Food and Drugs Act.
Of interest here are the comprehensive reasons of
MacGuigan J. in Attorney General of Canada v.
Québec Ready Mix Inc., [1985] 2 F.C. 40 (C.A.),
in which his colleagues concurred.
Although they may have some incidental effect
on international and interprovincial trade and
commerce the statutory delegation and the conse
quent regulations are not aimed directly at such
trade and commerce. Thus, they are not sustain
able on that branch of the power. Further, since
the Act and Regulations are directed by Parlia
ment toward the regulation of a single (albeit
multifarious) industry—pharmaceuticals—they
reside outside the regulation of trade, in its mega-
scopic sense, affecting the whole country. The
Court therefore concludes that the delegation of
regulation-making authority expressed in subpara-
graph 25(1)(o)(ii) with its companion provisions,
and the impugned regulations purportedly made
pursuant thereto, cannot be sustained by Parlia
ment's authority to legislate in regard to the regu
lation of trade and commerce within the meaning
of Head 2, section 91 of the Constitution Act,
1867.
I (2): CRIMINAL LAW
Head 27 of section 91 of the Constitution Act,
1867 accords to Parliament the jurisdiction to
enact statutes in relation to "The Criminal Law
... including the Procedure in Criminal [law]
Matters."
Criminal law's essence, as seen in 1976 by the
Law Reform Commission of Canada in its Report
3: Our Criminal Law, was described thus [at
page 5]:
Criminal law, then, primarily has to do with values. Natural
ly, for crime itself is nothing more nor less than conduct
seriously contrary to our values. Crimes are acts not only
punishable by law but also meriting punishment. As Fitzjames
Stephen said, the ordinary citizen views crime as an act "for-
bidden by law and revolting to the moral sentiments of society".
Crimes are not just forbidden, they are also wrong.
Jurisprudence offers this much, at least, in gen
eral description of criminal law:
A statutory prohibition of defined conduct with penal conse
quences, which prohibition safeguards the public interest by
excluding substances injurious to health, by denouncing fraud,
deception and other injurious exploitation and by promoting
peace, order and security.
That concocted definition, general as it is, is drawn
from various judicial pronouncements among
which not least are, Proprietary Articles Trade
Association v. Attorney-General for Canada,
[1931] A.C. 310 (P.C.), at page 324; and Canadi-
an Federation of Agriculture v. Attorney-General
for Quebec (Margarine Reference), [1951] A.C.
179 (P.C.), at pages 196 and 197. Indeed, in the
last-mentioned case, it was specifically stated that
the argument to the effect that Parliament's ban
on margarine was an enactment of criminal law,
"would have had more weight if it had been
possible to contend that the object of the prohibi
tion was to exclude from Canada substances
injurious to health." (Emphasis added.) See, also,
the judgment of Mr. Justice Duff, in the Supreme
Court of Canada in Combines Investigation Act
Reference re Validity of The, [1929] S.C.R. 409,
at page 413; [1929] 2 D.L.R. 802, at page 805, in
regard to the control of human conduct being a
concern of the criminal law.
The pertinent passages of the Food and Drugs
Act above quoted, demonstrate that the prohibited
conducts at which they are aimed are the dissemi
nation of substances injurious to health, and the
misleading or deception of the public in regard to
the character, value, quantity, composition, merit
or safety of drugs, in particular. Penal conse
quences for such conduct are provided by section
26 of the Act.
The defendants submit that the exclusion and
prohibition of injurious substances, and the estab
lishment of standards for permissible substances
serve the purposes of criminal law, to the end of
protecting public health and preventing the dan
gers of deceiving or misleading the public about
the potential risks associated even with the permis
sible substances. Any effect on property and civil
rights is merely incidental, say the defendants. The
plaintiffs disagree. They argue that, in essence,
these enactments do not prohibit conduct but,
rather, regulate a business. Accordingly, the plain
tiffs urge, this is colourable legislation which really
bears on property and civil rights in a (if not
every) province, not criminal law.
The constitutional validity of various provisions
of the Food and Drugs Act has been challenged in
litigation on at least four previous occasions.
In Standard Sausage Co. v. Lee, Proctor v.
Standard Sausage Co., [1933] 4 D.L.R. 501
(B.C.C.A.), with the scholarly addendum of
Martin J.A. reported in [ 1934] 1 D.L.R. 706, the
validity of provisions prohibiting the adulteration
of food with certain preservatives was under
attack. The Court unanimously held that the sub
ject resides squarely within Parliament's legislative
jurisdiction over criminal law. The appeal lay from
the judgment of Macdonald J. Macdonald J.A.
wrote for himself and Macdonald C.J.B.C. thus
[at page 506]:
So ... if the Federal Parliament, to protect the public health
against actual or threatened danger, places restrictions on, and
limits the number of preservatives that may be used, it may do
so under s. 91 (27) of the B.N.A. Act. This is not in essence an
interference with property and civil rights. That may follow as
an incident but the real purpose (not colourable and not merely
to aid what in substance is an encroachment) is to prevent
actual, or threatened injury or the likelihood of injury of the
most serious kind to all the inhabitants of the Dominion.
Continuing, on page 507, Macdonald J.A. is fur
ther reported as holding:
The primary object of this legislation is the public safety—
protecting it from threatened injury. If that is its main pur-
pose—and not a mere pretence for the invasion of civil rights—
it is none the less valid because it may be open to a criticism,
from which few acts are free, that its purpose would be served
equally well by accepting the opinion of others, viz., that
sulphur dioxide might with safety be added to the list of usable
preservatives. Tampering with food by the introduction of
foreign matter, however good the intentions, should properly be
regarded as a public evil and it may properly be regarded as
highly dangerous to lower the bars, or to remove restrictions
which, rightly or wrongly, Parliament in its wisdom thought fit
to prescribe.
The immediately preceding pronouncement has
stood unimpaired during more than half a century.
It certainly buttresses the defendants' posture on
the issues of the prescribing of standards, consider
ations of danger, and "newness" in regard to the
plaintiffs' substances. It also indicates that such
factors do not adversely affect the issue of consti
tutional validity.
Beyond the matter of public safety, Macdonald
J.A. held that the Act's validity is sustainable on
yet another ground, suppression of fraud in the
distribution of food products, in that instance,
where a dealer misrepresented the adulterated sau
sages as being "fresh". Obviously, drugs and other
substances cannot escape the force of such
reasoning.
The reasoning and conclusions stated in the
Standard Sausage case were adopted and applied
by Mr. Justice Heald, then of the Trial Division of
this Court in the case of Berryland Canning Com
pany Ltd. v. The Queen, [1974] F.C. 91. Heald J.
held that paragraph 4(d) of the Act, pursuant to
which cyclamates were to be phased out and
banned for use in canned foods, is infra vires of
Parliament. He is reported, at page 95, as saying:
A comparison of the 1927 Act with the present Act clearly
shows that, while some provisions have been added and others
changed, the main purposes of the Act have not changed over
the years. Thus, the rationale of the Standard Sausage case
(supra) applies equally to the present case.
An apt description of the criminal law power of the Parlia
ment of Canada is contained in the judgment of Mr. Justice
Rand in The Reference as to the Validity of Section 5(a) of the
Dairy Industry Act [1949] S.C.R. 1 at p. 50 where he said:
Is the prohibition then enacted with a view to a public
purpose which can support it as being in relation to criminal
law? Public peace, order, security, health, morality: these are
the ordinary though not exclusive ends served by that
law ... (Italics mine).
More recently, the Supreme Court of Canada
has twice considered the constitutional validity of
certain provisions in the Food and Drugs Act,
which were invalidated in one instance and sus
tained in the other. Both decisions are closely
reasoned, although neither was unanimous.
In Labatt Breweries of Canada Ltd. v. Attorney
General of Canada, [1980] 1 S.C.R. 914, the
Court considered the impugned validity of a regu
lation made pursuant to the Act, which regulation
prescribed the compositional standards of "beer"
and "light beer". The appellant had marketed a
new brand of beer labelled "Labatt's Special
Lite", which contained 4% alcohol by volume. The
regulation in question exacted that "light beer"
contain not more than 2.5% alcohol, whereas regu-
lar "beer" was required to have only between 2.6%
and 5.5% alcohol by volume. The brewery's appeal
was allowed by a majority of six of the nine judges.
Of that majority, five judges speaking through the
voice and words of Mr. Justice Estey, did set aside
the judgment of the Court of Appeal [[1980] 1
F.C. 241] and the order of the Trial Division
[(1978), 84 D.L.R. (3d) 61] and declared [at page
947]:
... that sections B.02.130 to B.02.135 inclusive of the Food and
Drug Regulations are invalid and that sections 6 and 25(1)(c)
of the Food and Drugs Act are ultra vires Parliament in so far
as they relate to malt liquors.
Mr. Justice Pratte, the sixth judge of the majority
joined in allowing the brewery's appeal, but would
simply have restored the judgment of the Trial
Judge.
In that Labatt Breweries case, Estey J. held that
the regulation had no criminal law purpose.
Health protection could not be its purpose since,
adopting the appellant's submission, as Estey J.
did, (at page 934): "any such beverage regardless
of its name having an alcoholic content by volume
of not less than 1.2% and not more than 8.5% [sic]
and otherwise brewed in accordance with the pro
cess common to all "Malt Liquors" is presump-
tively not a hazard to health." Nor was the regula
tion aimed at the prevention of deception through
mislabelling because such, in the context of beer
and "light" beer, would arise only after the defini
tion and category of "light beer" had been created
by statutory regulation. That is, but for the regula
tion itself, there would have been no issue as to the
label since the product did in fact have a volume of
alcohol less than the maximum prescribed for
regular beer.
In regard to Parliament's jurisdiction to make
laws pursuant to section 91 of the Constitution
Act, 1867, Estey J. for the majority in the Labatt
Breweries case is reported at page 934 as express
ing these thoughts:
The jurisdiction of Parliament in matters related to health
similarly has no application here. Parliament may make laws in
relation to health for the peace, order and good government of
Canada: quarantine laws come to mind as one example. The
Privy Council hinted that legislation enacted by Parliament to
deal with an "epidemic of pestilence" would be valid in Toronto
Electric Commissioners v. Snider ([1925] A.C. 396). But we
are not concerned with such matters here. Where health is an
aspect of criminal law, as in the case of adulteration provisions
in the statute, the answer is clear but here not helpful.
A few years later, the Supreme Court upheld
other provisions of the Food and Drugs Act. It is
pertinent here to note that those provisions are
sections 8 and 9, for which penalties for their
violation are provided in section 26. In that case,
R. v. Wetmore et al. [hereinafter the Kripps Phar
macy case], [1983] 2 S.C.R. 284, the majority
(Mr. Justice Dickson, now Chief Justice, dissent
ing), followed the Court's immediately preceding
decision in Attorney General of Canada v.
Canadian National Transportation, Ltd. et al.,
[1983] 2 S.C.R. 206. The Kripps Pharmacy case
involved an appeal by the Crown in right of
Canada from a judgment of the British Columbia
Court of Appeal, which had dismissed an appeal
from a judgment of Berger J., who in turn had
dismissed an application for mandamus requiring
County Court Judge Wetmore to proceed with the
trial of indictments drawn pursuant to section 26
of the Act.
The first question posed for the Supreme
Court's consideration in that Kripps Pharmacy
case asked: "Does the constitutional validity of
sections 8(a), 9(1) and 26 of the Food and Drugs
Act depend upon subsection 91(27) of the [Consti-
tution Act, 1867]?" Section 26 of the Act enacts
that violation of its provisions is an offence triable
either summarily or upon indictment, but no men
tion is made of criminal law as such nor even of
the Criminal Code [R.S.C. 1970, c. C-34). The
late Chief Justice Laskin writing also for Messrs.
Justices Ritchie, Estey and McIntyre is reported at
pages 288 and 289, as holding that sections 8 and
9, if not the whole Act, are sustainable by the
criminal law power. As well, he speculated that
provisions such as section 9 reside also within
Parliament's trade and commerce powers,
although he stopped short of a definitive assertion
to that effect. The late Chief Justice then wrote
further [at pages 288-289]:
However, it is unnecessary to pursue this issue and it has
been well understood over many years that protection of food
and other products against adulteration and to enforce stand
ards of purity are properly assigned to the criminal law.
Standard Sausage Co. v. Lee, [1933] 4 D.L.R. 501, supple
mented by addendum at [1934] 1 D.L.R. 706 is a long standing
application of these principles.
Sections 8 and 9, as well as the offence creating
and penalty provisions in section 26 were, again,
found to be intra vires of Parliament's authority to
enact criminal law—as well as to enforce it in the
circumstances.
In asserting that the Act and Regulations in
question here are merely a licensing scheme, the
plaintiffs are adopting the words and reasoning of
Wetmore Co.Ct.J., [R. v. Kripps Pharmacy Ltd.
and Kripps] reported at (1980), 114 D.L.R. (3d)
457 (B.C.Co.Ct.) at pages 468 and 469. He assert
ed, as do the plaintiffs, that the impugned regula
tions' aim "is not a criminal purpose. In reality, it
is a licensing scheme for new drugs and as such is
a violation of s. 92(13) and (16) of the British
North America Act, 1867. Therefore, the
impugned Regulation is not a valid exercise of the
federal criminal law power." Clearly, that view of
the matter is not tenable as a result of the
Supreme Court's adjudication of the Kripps Phar
macy case.
It seems as clear as any notion can be, that
given the constitutional authority to identify and
denounce human conduct by enactment of crimi
nal law, Parliament may specifically exempt other,
related, conduct from the purview of criminal law
by enacting that it is not criminal. It may do so
specifically, of course, and by necessary implica
tion. To put the matter in visual terms, it may be
said that because Parliament can configure the
profile of a crime, it can equally carve out an
exception or indentation in that profile such that it
does not cover certain defined or implied conduct
from the outset or which it previously covered.
Again to resort to a familiar element, albeit in a
concocted expression, provision for an "offence
nisi" may lawfully be enacted by Parliament. That
is, to do a certain act intentionally is an offence,
unless the feasor first, or concurrently or even
subsequently complies with a prescribed statutory
condition. To procure a miscarriage was long a
crime, and it still is—but now there is an exempt
ing condition—the obtaining of a certificate from
the therapeutic abortion committee at an accredit
ed or approved hospital pursuant to subsection
251(4) of the Criminal Code, R.S.C. 1970, c.
C-34. That provision has been held to be valid
([1976] 1 S.C.R. 616 [Morgentaler v. The
Queen]) even though its exception requires the
cooperation of institutions which, and professional
persons who, operate wholly within provincial
jurisdiction. (Head 7 for example, of section 92.)
In the present instance of the Food and Drug
Regulations which do not mention, and are not
mentioned in, the Criminal Code, Parliament has
established its own institution and engaged its own
professionals for the purpose of the administration
of this particular criminal law statute. It is nothing
adverse to Parliament's jurisdiction here in enact
ing criminal law that it erects with it a national
regulatory scheme overseen by a regulatory agency
such as were mentioned not only in the Canadian
National Transportation case, but also more
recently, on March 16, 1987, by Mr. Justice Mac-
Guigan for the Appeal Division of this Court in
Asbjorn Horgard AIS v. Gibbs/Nortac Industries
Ltd., [1987] 3 F.C. 544. The regulatory agencies
here are the Directors, the various Food and Drug
Directorates and Bureaux in the Health Protection
Branch of the Department of National Health and
Welfare mentioned in paragraphs 7 to 13 of the
parties' "amended joint admission of facts".
Another regulatory agency involved in this nation
al regulatory scheme is the federal Department of
Consumer and Corporate Affairs, mentioned in
paragraph 14 of the joint admission. The parties
agree that this Department has certain respon
sibilities under the, Act in question. In particular,
this Department's inspectors exercise the delegated
responsibilities of inspectors under the Food and
Drugs Act.
Now, the plaintiffs submit that when the
attempt to enact criminal law goes beyond mere
prohibition with penal consequences and into regu
lation, it goes beyond Parliament's powers. Such a
contention cannot withstand the force of reasoning
in the Standard Sausage judgment and the Kripps
Pharmacy judgment, both carefully considered by
the Supreme Court of Canada. The defendants
submit that criminal law does not need to be, and
has not been, interpreted in such a narrow sense as
urged by the plaintiffs. This Court agrees with the
defendants' submission (transcript 3, page 128)
that where the "legitimate" purpose—that is, "the
pith and substance"—of the legislation is the pro
tection of the public health and safety, supple
mented by the suppression of deception and fraud,
and not an attempt to protect or to suppress a
particular trade or business, it is open to Parlia
ment to legislate on the footing of criminal law.
It is noteworthy, also, that Parliament does not
attempt, in this regard, to regulate the prices or
quantities of goods. The legislation, including the
regulations, is not aimed at one sector or market
for either promotion or derogation of another or
others. Further, the regulation of product stand
ards is exacted only in so far as the health and
safety of the public are concerned. In his opus
Constitutional Law of Canada, 2nd ed. Toronto:
Carswell, 1985, at page 417, Professor Peter W.
Hogg recites four examples in the Criminal Code
whereby the appending of a regulatory or adminis
trative agency with a power of dispensation does
not dilute, or impugn the quality or vires of the
respective criminal law provisions therein enacted.
Indeed, there is no good reason why Parliament
should not supplement prohibitions and their penal
consequences with national regulatory schemes to
ensure compliance. The "flagship offence",
murder, needs moral and human family upbring
ing of yesterday's children to aid today's compli
ance with the prohibition, but that is not, an apt
function of the State, even though such upbringing
sometimes fails. When, however, it comes to the
manufacturing, labelling and marketing through
out Canada of ingestible substances which,
depending on the dosages could be poisonous, cap
able of altering moods or just plain lethal, it
cannot be reasoned that regulation by the Health
Protection Branch (HPB), in the protection of
public health and safety including informed
buying and ingestion, is too heavy a burden for
valid criminal law to bear. See James Richardson
and Sons Limited v. Minister of National Reve
nue, [1983] 1 F.C. 3 (T.D.) at pages 20 and 21,
regarding legislative jurisdiction.
The Court finds that the Food and Drugs Act in
its specific provision, paragraph 25(1)(o), delegat
ing the power to make regulations, and the general
tenor of the impugned regulations C.01.014 to
C.01.014.4, as well as C.08.001 to C.08.011 are
supportable pursuant to Head 27 of section 91 of
the Constitution Act, 1867 as criminal law and as
legislation necessarily incidental to that criminal
law. The particular regulations must be examined
further to consider their very particular relation
ship to the purpose of the Act, but their general
tenor is supportable for the regulatory scheme
designed to generate compliance with this particu
lar manifestation of valid criminal law.
I (3): PEACE, ORDER, AND GOOD GOVERNMENT
The general grant of legislative jurisdiction,
expressed in the opening words of section 91 of the
Constitution Act, 1867, runs as follows:
91. It shall be lawful for the Queen, by and with the Advice
and Consent of the Senate and House of Commons, to make
Laws for the Peace, Order, and good Government of Canada,
in relation to all Matters not coming within the Classes of
Subjects by this Act assigned exclusively to the Legislatures of
the Provinces;
and, so as not to restrict the generality of the
above, but for greater certainty, there follows the
list of most of Parliament's classes of subjects for
its legislative authority, including, of course, the
criminal law, which is discussed earlier herein.
It may be wondered why the Court would
bother to examine the subject at hand through the
optic of p.o. & g.g., once it had concluded that the
Act and Regulations rest on Parliament's head of
legislative authority to enact laws coming within
that class of subject specifically enumerated as
"the criminal law ... including the procedure in
criminal [law] matters". Ordinarily, when a legis
lative exercise can be so classified, further enquiry
is discontinued. However, there is nothing contrary
to good reason in enquiring whether the legislation
may not be supported by some further legislative
authority accorded to the enacting legislature.
Usually, of course, such an enquiry is next to, if
not completely, irrelevant since the prime charac
terization of the legislation's matter settles the
question of the division of legislative authority.
In the instant case, the Court characterizes the
prohibitions and penalties aspect of the Food and
Drugs Act as criminal law, and the impugned
regulations as criminal law, too, but because they
are necessarily incidental to Parliament's schema
of prohibitions and penalties in order to protect
public health and safety and to deter or punish
fraud and deception. It is conceivable, however,
that the necessarily incidental regulations could
have a federal basis of their own, to which the
prohibitions and penal consequences could assume
the role of being necessarily incidental.
The proposed approach is, after all, not unthink
able. In Canadian Indemnity Co. et al. v. A.G. of
British Columbia, [1977] 2 S.C.R. 504, the appel
lant mounted two attacks on the provincial legisla
tion, both based on separate matters of Parlia
ment's legislative authority: trade and commerce,
and federally incorporated companies. Both
attacks failed but, in the provincial Court of
Appeal, each attracted some support. More to the
point of double attributions of legislative authority
however are the cases of Attorney-General of
British Columbia v. Attorney-General of Canada
(the Johnny Walker case), [1924] A.C. 222
(P.C.); Re: Exported Natural Gas Tax, [1982] 1
S.C.R. 1004, at page 1074; and Attorney General
of Canada v. Canadian National Transportation,
Ltd. et al., earlier cited, at pages 279 and 280
[S.C.R.]. Plaintiffs' counsel accepted the legitima
cy of such an approach. (Transcript 3, pages 16 to
19.) .
It may safely be assumed that neither amino
acids in general (the "building blocks" of proteins
per HPB Information Letter, ex. 1 (E-10) page 1)
nor essential amino acids, for example, tryptophan
in particular, (ex. 1 (E-10) page 2), were upper
most in the minds of the Fathers of Confederation
when they were considering the division of powers.
Had they turned their minds to the task of defin
ing the term "drug" they might very well have
formulated a definition closely similar to that
which is expressed in section 2 of the Food and
Drugs Act. However such was not their concern.
What they wrought was the notion of legislating,
not about substances or things, but rather in rela
tion to classes of subject, with logical examples for
greater certainty, or, in some instances, simply
pragmatic allocations to accord with their expecta
tions or tolerations of a federal state. There were
to be no "cracks" and no legislative lacunae in the
powers of what was to be a virtually, and has
become a completely, sovereign federal state.
The broad scope suggested by p.o. & g.g. in
section 91 has become somewhat limited over the
years, and also more precisely defined. In Re:
Anti-Inflation Act, [1976] 2 S.C.R. 373, Mr.
Justice Beetz, despite being in dissent, articulated
a view of p.o. & g.g. which was apparently accept
ed by the majority. He opined that Parliament's
authority to enact laws for p.o. & g.g. is confined
to two types of legislation: (i) temporary measures
dealing with a national emergency; and (ii) legisla
tion dealing with "distinct subject matters which
do not fall within any of the enumerated heads of
s. 92 and which, by nature, are of national con
cern" (page 457). In the Labatt Breweries case,
above cited, at pages 944 and 945, Mr. Justice
Estey perceived two groupings in that second
branch: (a) areas where the federal competence
arises because the subject-matter did not exist at
the time of Confederation and it cannot be classi
fied as a matter of a merely local or private nature;
and (b) areas where the subject-matter "goes
beyond local or provincial concern or interest and
must, from its inherent nature be the concern of
the Dominion as a whole". In effect, one can speak
of three branches.
The first branch—temporary legislation dealing
with a national emergency—does not apply here.
The "new drug" regulations and the drug regula-
tions taken together are certainly not intended to
be merely temporary in duration, and there is no
evidence of a "new drugs" emergency.
The defendants submit that either the second or
third branches of p.o. & g.g., or both of them, are
capable of sustaining the impugned legislation,
including the pertinent regulations.
To rest upon and within the second branch, the
subject-matter of the legislation would have to
be regarded as not existing at the time of Confed
eration and as not being a matter of a merely local
or private nature. However, subparagraph
25 (1) (o) (ii) of the Act and the new drug regula
tions do not precisely meet the first criterion. It is,
nevertheless, true that every new pharmaceutical
product generated by the on-going process of
scientific and chemical research, analysis and de
velopment, must have been "new" at some point.
To be sure, most in being today were generated
since July 1, 1867. Furthermore, no evidence was
presented to indicate that nowadays there is a
problem about the safety, efficacy and proper
labelling of new drugs which did not exist at the
time of Confederation, although one could prob
ably surmise that such is the case.
The subject-matter of the new drug regulations
is to protect the people from the dissemination for
the ingestion by themselves or their animals or
other use or consumption of potentially deleterious
or otherwise dangerous drugs and from deception
in the dissemination for such ingestion, use or
consumption of substances falsely or mistakenly
advertised to have the properties of drugs or of
other drugs. Now, it is apparent that there is no
permanently closed book of drug substances and
chemicals which bars scientific analysis, new
understandings, modifications or recombinations
thereof. Research and development, as the regula
tions themselves clearly show, are the essentials of
the living pharmaceutical industry, or if not, Par
liament at least is prepared for them in defence of
the public interest by the avoidance of potential
jeopardy thereto, through regulation.
Just as there is no closed book of criminal
offences, so there is no closed book of what consti
tutes the peace, order and good government of
Canada, because the Constitution distributes in
this federal state all of the legislative power inher
ent in the notion of a sovereign state. It must be
added that there is no closed book of "all matters
of a merely local or private nature in the prov
ince". The legislature is always capable of dealing
with the exigencies of human ingenuity which
include criminality and the creation of jeopardy.
Where, in the free market which is Canada, those
evils can be disseminated into two or more prov
inces and the legislative jurisdiction is not specifi
cally and exclusively assigned to provincial legisla
tures, there is a subject-matter of national concern
which resides within p.o. & g.g. It may arise
because the subject-matter did not appear to exist
at the time of Confederation.
The criminal law did surely exist at that time.
But the necessary, complementary regulation of
what is just "outside" of the profile of the criminal
law in regard to the dissemination of pharmaceuti
cal products cannot necessarily be seen either in
the Confederation debates, nor in the specific dis
tribution of exclusive heads of legislative power.
At this point the case of R. v. Hauser, [1979] 1
S.C.R. 984, ought to be mentioned. There, the
Supreme Court concluded that it was not the
criminal law, but rather p.o. & g.g. upon which
the constitutional validity of the Narcotic Control
Act [R.S.C. 1970, c. N-1] rests. Writing for the
majority of the bench, Mr. Justice Pigeon held
that the Narcotic Control Act was enacted to deal
with a genuinely new problem—abuse of narcot-
ics—which did not exist at the time of Confedera
tion. The judgment was much criticized. It now
appears to be generally accepted that the majority,
for whom Pigeon J. spoke, erred in Hauser in
holding that the very prohibition and penalty
provisions of that Narcotic Control Act, whose
prosecutions were directly under consideration,
rested on p.o. & g.g.
There is nothing genuinely new about prohibi
tions with penal consequences, for, unless they be
invoked for colourably inappropriate ends, they
constitute valid criminal law. But there is more to
the statutory control of narcotics than that. There
is, notably, section 12 of that Act, thus:
12. The Governor in Council may make regulations
(a) providing for the issue of licences
(i) for the importation, export, sale, manufacture, produc
tion or distribution of narcotics, and
(b) prescribing the form, duration and terms and conditions
of any [such] licence ... the fees payable therefor, and ...
the cancellation and suspension [thereof] ...
(c) authorizing the sale or possession of or other dealing in
narcotics and prescribing the circumstances and conditions
under which and the persons by whom narcotics may be sold,
had in possession or otherwise dealt in;
(d) requiring physicians, dentists, veterinarians, pharmacists
and other persons who deal in narcotics as authorized by this
Act or the regulations to keep records and make returns;
(e) authorizing the communication of any information
obtained under this Act or the regulations to provincial
professional licensing authorities;
(J) prescribing the punishment by a fine ... or imprisonment
... or both, to be imposed ... for breach of any regulation;
and
(g) generally, for carrying out the purposes and provisions of
this Act.
In truth, the Narcotic Control Act does appear to
evince the criminal law power of Parliament, but
the provisions of its section 12 with the necessarily
incidental regulations thereunder do appear, as
Pigeon J. said, to rest on p.o. & g.g. Someone
might, of course, try to argue that they constitute
a licensing scheme, or that they purport to regu
late the medical, dental, veterinarian and phar
maceutical professions in each province, or some
such similar argument, but clearly such arguments
could not prevail. Of course, under the Narcotic
Control Act the prohibitions and regulations are a
good deal more simple and less subtle than they
are under the Food and Drugs Act because, under
the former statute all drugs and substances are
regarded by Parliament as being very powerful
and highly dangerous. Since that is not always the
case, in both respects under the Food and Drugs
Act, the regulation on the edge of the profile of
criminality there is more complex because Parlia-
ment is relenting somewhat from the firm and
severe standards invoked in the narcotic control
legislation.
In both instances, it is clear, the regulation of
those drugs which are not absolutely prohibited,
which may be utilized under regulatory conditions
for moderating or obviating danger to public
health and obviating fraud and deception, is a
matter not of the specifically profiled criminal law,
but rather of peace, order and good government.
To such extent, surely, the majority of the
Supreme Court for whom Pigeon J. wrote the
opinion in Hauser must be accepted as stating
authoritative constitutional law in regard to p.o. &
g.g. Indeed, in R. v. Aziz, [1981] 1 S.C.R. 188,
Mr. Justice Martland writing for the Supreme
Court of Canada said at page 197, that "there is
no sound reason for now reversing" the Court's
judgment in Hauser. That Aziz judgment, accord
ing to Chief Justice Laskin, "was cautious in its
endorsement of Hauser as basing the Narcotic
Control Act entirely on the peace, order and good
government clause." He made this statement in
Schneider v. The Queen in Right of British
Columbia, [1982] 2 S.C.R. 112, at page 115,
saying in his individual concurrence with the
majority that Hauser was incorrectly decided and
that he "would have supported the reasons of
Spence J. who, in Hauser, saw the Narcotic Con
trol Act as referable to both the criminal law
power and to the trade and commerce power; see
[1979] 1 S.C.R. 984, at pp. 1003-04".
In his Constitutional Law of Canada (above
cited), Professor Hogg flatly concludes [at page
383] "that Hauser was wrongly decided, and
should be overruled by the Court" going on to say
that the Narcotic Control Act "is properly to be
characterized as a criminal law. It cannot be
placed within the national concern branch of
p.o.g.g." It would be hard to disagree with Profes-
sor Hogg in regard only to the prohibitions and
penalties provided in that Act. However his view
seems to be not so sensitive as to notice the other
aspect of that Act in section 12 and the Regula
tions, which, quite apart from the principal prohi
bitions with penal consequences, can surely be
enacted by Parliament pursuant to p.o. & g.g.
Given the harmful nature of the narcotic drugs
regulated under the Regulations, Parliament
might lawfully choose the paths of criminal law
prohibition, or residual power regulation, or both
aspects in the same statute, as it did in fact choose.
So it is with the regulatory aspects in the Food
and Drugs Act's Regulations for identifying and
labelling of drugs and new drugs. Parliament has
chosen both aspects in the legislation and regula
tions. These are not matters of a merely local and
private nature, but rather of concern to the whole
nation.
When does the subject-matter of such regula
tions become of such concern? Professor Hogg, in
his cited work, at page 379, asserts that the answer
can be gleaned, if at all, from the dicta in
Johannesson v. Municipality of West St. Paul,
[1952] 1 S.C.R. 292 and in Munro v. National
Capital Commission, [1966] S.C.R. 663. It is "a
sense that it is the nation-wide importance of a
subject of legislation" which "determines whether
or not it has the requisite national concern." Yet,
the author quickly notes, that criterion is too sub
jective to serve as a justiciable test. Adding geo
graphical extent and the notion of uniformity
helps, but still does not perfect the justiciability of
the test.
An appropriate test of national interest,
endorsed by Professor Hogg, is that enunciated by
Professor R. Dale Gibson in ["Measuring Nation
al Dimensions"] (1976), 7 Man. L.J. 15, twice
cited at page 379 of Hogg's work. It is the "provin-
cial inability" test whereby, if a problem of wide
import in Canada cannot realistically be solved by
provincial co-operation, because it is beyond the
power of the provinces to deal with it, the subject-
matter resides within the "national interest" scope
of p.o. & g.g. It may be noted that Dickson J. in
dissent applied just such a test to determine the
content of the trade and commerce power which he
considered in Attorney General of Canada v.
Canadian National Transportation, Ltd., above
cited.
Applying the provincial inability test here, it is
clear that the dissemination for ingestion of poten
tially harmful drugs and new drugs in and
throughout Canada goes realistically beyond the
control of individual provinces, even in the realm
of uniform law. Uniform law does not bespeak
uniform regulatory agencies. That is, provincial
attempts to protect the public from potentially
unsafe and deceptively labelled drugs and new
drugs would be frustrated if even one province
declined to enact like legislation or to create well-
motivated regulatory agencies. Section 121 of the
Constitution Act, 1867 exacts that "All Articles of
the .. . Manufacture of any one of the Provinces
shall ... be admitted free into each of the other
Provinces." Thus, people of all provinces could buy
such drugs in, or from, the unhelpful province or
provinces.
The regulation which the plaintiffs so dislike,
C.01.014.2, illustrates the point. If the applicant
complies, a DIN is issued which serves to identify
the product and its ingredients throughout
Canada. If the Director, on reasonable grounds,
believes from the application and his or her own
knowledge that the product is either not a drug, or
is an injurious or dangerous drug, he or she may
properly refuse to issue the document which sets
out a new DIN. Reasonable grounds require the
expression and communication of the reasons. In
such circumstances, the regulation invites the
applicant to submit additional information so that
the Director can reconsider the first decision. In
such a manner the health of persons everywhere in
Canada can be protected or, it must be admitted,
not protected in the event of negligence on the
Director's part. Further, in such a manner,
applications for DIN'S submitted from anywhere in
Canada may be verified and approved or rejected
according to standard criteria. This is not criminal
law. However, the criminal law prohibitions need
to be supplemented by the more sensitive and
refined instrumentality of the regulations which,
after all, help manufacturers from running afoul of
the criminal law when they produce for sale and
human ingestion a new product which, although
not absolutely prohibited, remains potentially dan
gerous. It is the danger or potential danger
through ingestion of deleterious substances or
being misled as to quantities and compositions
which render this subject-matter one of national
concern. Uniform provincial legislation including
regulations could not serve the purpose even if
perfectly uniform unless the provincial legislatures
also agreed unanimously upon one regulatory
administration paid for by all. Such complete and
instantaneous uniformity is achieved by legislation
on the part of Parliament. The two "federal-pur
pose" aspects of the federal legislation here are
necessarily incidental to each other on a reciprocal
basis.
For all of the pertinent foregoing reasons, the
Court holds that subparagraph 25(1)(o)(ii) of the
Food and Drugs Act, with the DIN and new drug
regulations made thereunder, are intra vires of
Parliament, pursuant to its authority to make laws
for the peace, order and good government of
Canada. They are matters of national interest and
concern.
II. SUBORDINATE LEGISLATIVE COMPETENCE:
Are the DIN regulations and/or the new drug
regulations ultra vires of the Governor General
in Council for any of the following asserted
reasons?
In regard to this issue, with its asserted reasons,
which follow, one must now, in light of the earlier
conclusions herein, accept that the Food and
Drugs Act, with the kind or scope of regulations
recited and reviewed above, is indeed intra vires of
Parliament. Here the question is, given the forego
ing, did Parliament accord to its delegate the
authority to make the very regulations, or did the
Governor in Council exceed the mandate accord-
ed? If the Governor in Council did exceed the
mandate either in regard to the powers conferred
by the Act, or in regard to Parliament's own
powers, then, to such extent, the impugned regula
tions must be held to be ultra vires of the Gover
nor in Council.
Counsel for the plaintiffs is quite probably cor
rect in saying (transcript 2, pages 2 to 4) that the
issues articulated in II A., II C. and IV are
subsumed as variations II B. that is, whether the
impugned regulations are vague and contain no
objective standards. All specified issues were,
nevertheless resolutely argued by both sides. Each
reason for which the regulations are impugned by
the plaintiffs will be considered in turn.
II A.: Do those regulations constitute a licensing
scheme not authorized by section 25 of the
Food and Drugs Act?
The plaintiff Jamieson attacks the DIN regula
tions and the new drug regulations, while the
plaintiffs Pharmetics and Swiss Herbal attack only
the new drug regulations. The DIN regulations
were promulgated purportedly pursuant to sub-
paragraphs 25(1)(b)(i), (iii) and (iv) of the Food
and Drugs Act; and the new drug regulations were
made purportedly pursuant to subparagraphs
25(1)(o)(i) and (ii). Regulations pursuant to sub-
paragraph (i) are not in contention as noted in
transcript 2, pages 11 to 13. These statutory provi
sions are recited above, as are the impugned regu
lations. They are too voluminous to repeat here. It
is, however, worthwhile to repeat that the power
conferred on the Governor in Council to make
regulations in section 25 is "for carrying the pur
poses and provisions of this Act into effect". As
well, paragraph 25(1)(b) further delegates specific
authority to make the kind of regulations therein
designated regarding any food, drug, cosmetic or
device in order to prevent deception and injury to
health.
Counsel for the plaintiffs avers that if the DIN
regulations went no further than the provisions of
regulations C.01.014 and C.01.014.1, and in par
ticular the items in C.01.014.1(2), "I don't think
we would be here today." (Transcript 2, page 15.)
Nor do the plaintiffs quarrel with regulation
C.01.014.2(1).
In regard to regulation C.01.014.2(2) however,
which authorizes the director of the HPB "on
reasonable grounds ... [to] refuse to issue the
document [the DIN] referred to in [subsection]"
C.01.014.2(1), the plaintiffs express determined
objection. This impugned subsection C.01.014.2(2)
professes to operate where the Director believes on
the stated grounds that product for which a DIN is
sought
C.01.014.2. (2) ...
(a) is not a drug, or
(b) is a drug but that its sale would cause injury to the
health of the consumer or purchaser or would be a violation
of the Act or these Regulations ... .
Paragraph (b) is poorly expressed. The mere sale
of the product could constitute a violation of the
law, but surely only the ingestion (or proximity, if
the product were noxiously volatile or radioactive)
could injure the health of the consumer (or pur
chaser). However, the Court would not invalidate
that paragraph on that account, for the intent and
meaning are hardly unclear. Rather, the plaintiffs
complain that paragraph C.01.014.2(2)(b) is
vague and imprecise because, they say, it pre
scribes no standard for determining what consti
tutes injury to the health of the consumer. (Tran-
script 2, page 18.) They argue that even a product
which is regarded to be as innocuous as aspirin
could be impugned under that paragraph. (Exhibit
3, cross-examination of Simon Young, page 31.) It
may well be that aspirin (acetylsalicylic acid, or
ASA) ought to be more closely regulated, but that
is another question not here in issue.
In regard to the new drug regulations, para
graphs C.08.001 (a), (b) and (c) all include in their
definitions the qualification that the drug or
combination
has not been sold ... in Canada for sufficient time and in
sufficient quantity to establish in Canada the safety and effec
tiveness of that substance [or combination and proportion, or
condition of use] for use as a drug.
Of this common qualifier the plaintiffs' counsel
argues that "there is nothing in this regulation ...
to guide the ordinary citizen in determining what
quantities are sufficient, and what length of time is
sufficient for the purposes of this drug". (Tran-
script 2, page 23.)
Regulation C.08.002(1) (a) is also objectionable
to the plaintiffs in that it requires the filing of a
new-drug submission "in a form and having a
content satisfactory to the Minister". Further
regulation C.08.002(2) exacts that such a submis
sion must "include such information and material
as the Director may require and, without limiting
the generality of the foregoing, shall include" the
information and material specified in paragraphs
(a) to (n). Not without significance to the outcome
of this adjudication are two paragraphs to which
counsel for the plaintiffs made special reference.
They are:
C.08.002. (2) ...
(g) detailed reports of the tests made to establish the safety
of the new drug for the purpose and under the conditions
recommended [by the manufacturer];
(h) substantial evidence of the clinical effectiveness of the
new drug for the purpose and under the conditions of use
recommended [again, by the manufacturer];
Noteworthy in this regard is the exception in
regulation C.08.005(1) whereby a manufacturer
may sell a new drug to " `qualified investigators',
for the sole purpose of clinical testing to obtain
evidence with respect to the safety, dosage and
effectiveness of the new drug" subject to enumer
ated reasonable conditions. However, regulation
C.08.005(3) empowers the Minister to prohibit
such sales if, in his or her opinion, "it is in the
interest of public health to do so". The plaintiffs
concede that if the Act be intra vires of Parlia
ment, as it has herein been found to be, "it would
have been perfectly legitimate and competent for
Parliament to legislate in these terms, but that is
not what Parliament chose to do". (Transcript 2,
pages 28 and 29.)
The plaintiffs complain that this kind of regula
tion amounts to saying that the Minister and
Director must be satisfied as to the safety and
effectiveness of the drug or substance. They
submit "that for the regulations to be valid .. .
they must have the degree of specificity necessary
for an ordinary citizen to know in advance, on a
simple reading of the regulation, what is expected
of him, what test he must meet in order to obtain a
DIN or, in the case of a new drug, a notice of
compliance".
Now, do these regulations constitute a licensing
scheme not authorized by section 25 of the Food
and Drugs Act? They do not.
The plaintiffs' counsel cited a considerable
volume of learned doctrine and jurisprudence, in
support of their contentions. It is important to note
that such doctrine and jurisprudence virtually
entirely relates to municipal by-laws and regula
tions. These will be considered under the next
enumerated issue herein, II B., relating to the
questions of objective standards or vagueness.
What constitutes these regulations into an unau
thorized licensing scheme say the plaintiffs (tran-
script 2, pages 118 to 121 and following) is the
authority of Minister and/or the Director to with
hold a DIN or a notice of new drug compliance
upon their opinion that the submissions do not
comply with the Act or the Regulations and the
authority to require further information or
material.
The plaintiffs rely principally on the decision of
the Ontario High Court in Re Imperial Oil Lim
ited and The City of Kingston, [1955] O.W.N.
767 (H.C.), in which, they say "the matter is very
succinctly put". (Transcript 2, page 119.) The text
of that decision is very brief. (Plaintiffs' books of
authorities, Part III, tab 1.) It bears an index
reference to "Municipal Corporations—Regulato-
ry Powers" the particular passage emphasized
runs:
The cases that were referred to in argument by counsel for
the applicant establish that while The Municipal Act, R.S.O.
1950, c. 234, gives authority to municipalities to regulate and
prohibit the matters set out in s. 388, clause 16, that does not
carry with it the authority to annex to a regulation a proviso
requiring a further permission. The cases referred to were City
of Toronto v. Mandelbaum, [1932] O.R. 552, [1932] 3 D.L.R.
604, and Donald v. The Town of Whitby, [1949] O.R. 44,
[1949] 1 D.L.R. 361. The reason for that rule is, I think,
obvious, and it is salutary because if any municipality could
establish regulations and then say an applicant required a
further approval, it would permit discrimination.
This passage does not disclose the entire ratio of
the decision. The subsequent paragraphs indicate
that the city relied on the wrong clause for its
purported denial of permission to store a sub
stance, gasoline, which was governed by another
clause. Although the text does refer to "the issu
ance of any permit", it makes no reference to any
licensing scheme.
What the Imperial Oil and Kingston decision
stands for, in the context of municipal law, is that
when the municipal by-law provides for the
approval of a designated official (or even officials)
the corporation cannot gratuitously require the
further approval of another official, or even the
city council. That case hardly goes against the
impugned Food and Drug Regulations. For cer
tain specific purposes expressed in those Regula
tions approval is required on the part of the Minis
ter or the Director, who are the officials
designated in the Regulations. Apart from public
service employees who are assigned to help them,
under their direction, and responsibility it may be
noted, there is no other official or no other body or
council from whom one must seek a DIN or notice
of compliance. If these Food and Drug Regula
tions were required to conform with the cited
decision, they would not fail in this regard.
Furthermore, these regulations purport to regu
late the dissemination of drugs, substances, prod
ucts and the claims made for their properties and
uses. The regulations do not purport to license the
manufacturers and merchants of drugs in their
business existence or organizations, nor in their
sales forces or price structures. They have nothing
whatever to do with permission to carry on any
such business. They simply do not constitute a
licensing scheme. In this regard they simply do
evince the regulation-making power of the Gover
nor in Council pursuant to Parliament's enabling
legislation, the Food and Drugs Act.
II B.: The regulations, do they establish no objec
tive standards, and are they too vague?
The plaintiffs regard this question to be the
principal matter of attack on the Regulations.
They assert that both the DIN and new drug
regulations are ultra vires on the ground of vague
ness. Here they begin with the learned work of the
late Honourable Louis-Philippe Pigeon, Rédaction
et interprétation des Lois. Under the title DELEGA-
TUS NON POTEST DELEGARE that renowned author
wrote a lucid chapter, which could perhaps be
encapsulated by these passages at pages 25 and 26:
[TRANSLATION] A public employee can certainly be made
responsible for ensuring that standards are observed, but the
power to set them cannotpe delegated to him.
The leading case on this point is ...: Vic Restaurant v.
Montreal, (1959, S.C.R., 58). The case concerned a restaurant
licensing by-law .... The permit was denied because the Chief
of Police refused to give his recommendation. What did the
Supreme Court say? It simply observed that the by-law pre
scribed no standards. It said: "No standard, rule or condition is
prescribed" ... It is he [the Chief of Police] who will make the
by-law, since it says "the permit will not be granted if you do
not give your recommendation and you may give or deny your
recommendation as you see fit".... Municipalities have the
power to regulate all kinds of things in this area, but the
standards must be contained in the enactment adopted by the
municipal council or in an appendix thereto .... What is not
allowed is not to prescribe standards and so to make a public
employee responsible for prescribing them in place of the
council, by delegating to him the power to grant a permit or
deny it as he sees fit. If there is not to be a delegation of power,
the public employee must be responsible for ensuring that the
standards prescribed are observed, not for ensuring that non
existent or imprecise directives are observed. Clearly no one can
say a priori to what extent a directive is so imprecise that it
amounts to a delegation of power; the test is whether a reason
able person can decide from looking at the wording whether he
has met the standard.
The above-recited passages are found in the plain
tiffs' book of authorities, Part II, tab 1.
It will be noted that the learned author, above
quoted, refers to regulations, or by-laws enacted by
a municipal council, and does so throughout the
longer text from which the above-recited passages
are drawn. The law on this issue is not entirely
clear, or is largely misunderstood. The plaintiffs
cited a number of judicial decisions in support of
their contention that regulations must be precise in
defining requisite conditions for compliance and, if
not, then the regulations may be struck down as
ultra vires for vagueness. An incomplete list of
such cases, for example, is: Comité d'administra-
tion du régime de rentes c. La Régie des rentes,
unreported, 500-05-024078-782, November 6,
1979 (Que. S.C.); Cie Miron Ltée c. R., [1979]
C.A. 36; R. v. Sandler (1971), 21 D.L.R. (3d) 286
(Ont. C.A.); Montreal Gazette Ltd. c. Ville de
Montréal, [1975] C.S. 686 (appeal dismissed,
unreported, 500-09-00910-752, C.A.M., February
27 1981); Corporation municipale du village de
Rimouski Est c. Corporation municipale de la cité
de Rimouski et P. G. du Québec, [1976] C.S. 485;
Re Campeau Corporation and City of Ottawa
(1978), 22 O.R. (2d) 40 (Div. Ct.); and City of
Dartmouth v. S. S. Kresge Co. Ltd. (1966), 58
D.L.R. (2d) 229 (N.S.S.C.). It must be noted that
all of these cases involved municipal by-laws.
There is no denying that by-laws may be invalidat
ed for vagueness and uncertainty; indeed, such has
been the law since Kruse v. Johnson, [1898] 2
Q.B. 91 (Div. Ct.). Whether the same can be said
of regulations emanating from the Governor in
Council is another question.
At tab 2 of Part II of their books of authorities
the plaintiffs reproduce pages 319 and 320 from
Patrice Garant Droit administratif, 2e éd. Mont-
réal: Éditions Yvon Blais Inc., 1985. At page 319
that learned author writes:
[TRANSLATION] It certainly must be taken into account that
this cause of invalidity has traditionally been regarded as
"characteristic of by-laws adopted by non-central authorities
such as municipal and professional corporations". 16 However,
it has happened that some cases in the precedents on review of
reasonableness have suggested that any by-law could be
reviewed for lack of precision, even one issued by the govern
mental authority. 147 The rule has been gradually applied by the
Superior Court.' 48
*146 COTÉ and LORD, op. cit., note 145, p. 30; DE SMITH,
Judicial Review of Administrative Action, 3d ed., London,
Stevens and Sons, 1973, p. 312.
*147 McEldowney v. Forde, [1971] A.C. 632; P. G. du Québec
c. Raymond Godbout, C.S. Québec, no. 200-05-004182-
729, June 13, 1977.
*148 Rimouski Est c. Cité de Rimouski, [1976] C.S. 485,
Fontainhead Fun Centre c. Ville de Montréal, J.E. 78-393;
Fontainhead Fun Center c. Ville St-Laurent, [1979] C.S.
132.
The citations mentioned in footnote 148 are, again,
municipal cases.
In footnote 146, Professor Garant cites De
Smith's third edition. That to which attention is
drawn there, is mentioned again in the fourth
edition: S. A. De Smith, Judicial Review of
Administrative Action, 4th ed. by J. M. Evans,
London: Stevens & Sons, 1980, at pages 354 and
355:
It has commonly been assumed that no criterion of reasonable
ness governs the validity of statutory instruments made by
Ministers or Her Majesty in Council. If a statutory instrument
or other departmental regulation appears to a court to be
outrageous it may be held to be ultra vires, but its invalidity
will probably not be attributed to unreasonableness per se. But
there is no reason of principle why a manifestly unreasonable
statutory instrument should not be held to be ultra vires on that
ground alone, provided that the subject-matter of the grant of
power is not so pregnant with "policy" considerations as to
render the application of such a standard inappropriate.
It certainly must be conceded that even a statutory
instrument made by the Governor in Council is
liable to be invalidated if it bear no perceivable
relationship to the subject-matter of the statute, or
the expressed purpose of the rule-making authority
enacted therein; or if it run contrary to the Consti
tution; or if it counsel or require the commission of
an offence; or if it be simply incomprehensible or
uncertain in its application.
A regulation made by the executive branch pur
suant to a validly enacted statute, either federal or
provincial, however, enjoys a greater security
against judicial invalidation than does the by-law
of a municipal corporation. This same consider
ation arose in the case of Aerlinte Eireann Teo-
ranta v. Canada, [1987] 3 F.C. 383 (T.D.). The
public law being in the realm of common law, it is
appropriate to note that common law courts tradi
tionally have drawn the distinction between statu
tory regulations and municipal by-laws. Professor
Driedger noted such distinction: by-laws are enact
ed by subordinate legislatures or other bodies such
as universities or professional corporations which
are all creatures of the legislature, but which are
not directly responsible to the legislature or the
executive branch, whereas regulations, by contrast,
are enacted by the executive which is answerable
to the legislature. ("Subordinate Legislation" by
Elmer A. Driedger (1960), 38 Cdn. B. Rev. 1, at
page 2.)
Bennion, F.A.R. Statutory Interpretation,
London: Butterworths, 1984, at page 144, calls the
distinction "illogical" but explains and teaches it.
René Dussault and Louis Borgeat Administrative
Law: A Treatise, translated by M. Rankin,
Toronto: Carswell, 1985, write at page 422 on the
subject of imprecision. They speak of the principle
of requiring "some degree of precision and detail"
and go on to say that: "Today this principle is
applied quite rigorously by courts, especially, but
not exclusively in municipal matters." The exam
ples given under this heading are all cases involv
ing either municipalities or professional corpora
tions. In any event such institutions are of a local,
provincial character and their by-laws are perhaps
not aptly compared and contrasted with statutory
regulation in Parliament's domain.
Conspicuously absent here are cases where regu
lations and other forms of subordinate legislation
emanating from the executive were held not to be
subject to challenge on the ground of uncertainty
or unreasonableness. (Bacon v. Ont. Flue-Cured
Tobacco Growers Marketing Bd., [1959] O.W.N.
256 (H.C.); Remis v. Fontaine, [1951] 2 D.L.R.
461 (Man. C.A.); Sparks v. Edward Ash, Ld.,
[1943] K.B. 223 (C.A.); Taylor v. Brighton Bor
ough Council, [1947] K.B. 736 (C.A.).
If, however, as Bennion states, the distinction
although real in law, is illogical, it is not utterly
egregious and wanton. Municipal "legislatures"
are after all congressional in nature in that the
executive remains secure in its fixed term of office
even if it loses the confidence of the elected tri
bunes of the people. The federal and provincial
legislatures are parliamentary in that the executive
branches are responsible to, and must maintain the
confidence of, the elected legislators, or they must
resign from office. Bennion, op. cit., at page 204,
indicates:
[With regard to voidness for uncertainty] the interpreter is not
permitted to declare an enactment containing a broad term or
other ambiguous expression void for uncertainty. The uncer
tainty is intended to be resolved by the interpreter.... A
corresponding rule applies to uncertainty in statutory instru
ments and most other delegated legislation .... The position is
different with bylaws however. A bylaw may be declared void if
uncertain in its terms.
The above passage is no doubt a correct statement
of the law, excepting, of course, the kind of gross
defects mentioned a few paragraphs above herein.
In regard to regulation, C.01-014.2(2), which
authorizes the Director "on reasonable grounds ...
[to] refuse to issue the" DIN where the product for
which it is sought "would cause injury to the
health of the consumer" or its sale "would be a
violation of the Act or ... Regulations", these
provisions are reasonable and in sweet accord with
the purpose and intent of the legislation. They are
clear enough for the plaintiffs and other manufac
turers and merchants in the industry.
The plaintiffs' counsel seek to paint their clients
with a pristine gloss of wide-eyed naïvety. This
observation applies to their submissions in regard
to all the impugned regulations. The plaintiffs and
their ilk are not just plain, ordinary lay folk, a
standard to which plaintiffs' counsel pitched their
arguments in attacking the precision and clarity of
the regulations. The Regulations are themselves
not pitched to the ordinary, average—or even
above average—person whom one might randomly
meet in the street or on any other everyday occa
sion. The Act and the Regulations are aimed at
the regulation of drugs and other substances which
are disseminated by manufacturers and sellers of
the same. There is no licensing scheme to prevent
or filter out the ordinary person from becoming
such a manufacturer or seller, or entering into the
business, to be sure, but those who do so are quite
rightly expected to know their business.
In the like manner, the by-laws of a professional
corporation which denounce professional miscon
duct or which regulate the keeping of accounts
(albeit part of true licensing schemes) are not
pitched to a random person whom one might
encounter in a shopping mall, but are, rather,
pitched to the appropriate professionals. Such
professionals cannot credibly assume the mantle of
an ordinary law person and claim that professional
misconduct, for example, is a concept which is too
general or too vague or too unclear for compliance
by that ordinary lay person. Of course, the notion
of any ward politics, local jealousies or municipal
zeal is plainly out of the question in terms of the
exercise of regulation-making authority in this
case of federal statutory regulation.
The Court will simply not strike down such a
statutory regulation on the ground of alleged
vagueness. The "applicant" here, intending to
market a drug or a new drug, must be deemed to
know something of the properties of the product. If
the applicant does not know enough about it, and
if the Director harbours a reasonable apprehension
of its causing injury to health, or if the Director
perceives that marketing it would violate the Act
or Regulations, he does not confound the applicant
by refusing a DIN. Indeed, in such circumstances
the applicant is not necessarily foreclosed from
obtaining a drug identification number, for subsec
tions C.01-014.2(3) and (4) invite dialogue be
tween the Director and the applicant. In truth, the
clear meaning of the regulation is a message to the
applicant to provide to the Director all the infor
mation which the applicant can possibly obtain
about the properties of the drug and the product.
The basic informational requirements are set out
in C.01.014.1(2), to which the plaintiffs take no
objection. The provisions of C.01-014.2(2) to the
effect that the Director may refuse only where his
belief is formed on reasonable grounds, require the
Director to make such grounds known to the appli
cant. The message is clear, and the invitation to
clear up the Director's apprehensions is equally
clear. In the result, the regulation is not unclear,
not too imprecise for the "applicant" in the con
text of this Act, these regulations and this
industry.
The new drug regulations are also alleged to be
without objective standards and therefore too
vague to be allowed to stand. The definitions of
new drugs, expressed in regulation C.08.001(a),
(b) and (c) all have that common qualifier about
not having been sold in Canada for sufficient time
and in sufficient quantity to establish in Canada
their safety and effectiveness. From the evidence
in this case, if not from well and commonly known
facts, there is a positive inference to be drawn that
manufacturers, through their research and de
velopment programs, are virtually constantly pro
pounding new drugs for dissemination in the
market. The constitutionally legitimate purpose of
this legislation is to regulate such products and
their dissemination for the protection of the health
and medicine-oriented expectations of the public.
It is only common sense that new drugs be accept
ed with a cautious prudence. No doubt that is why
the definitions of "food" and "drug" say what they
include, and not definitively what they, for all
time, are. What must be established is the safety
and efficacy of such drugs and their combinations.
That is something of which the seller, and especial
ly the manufacturer, must know something. That
is something of which the seller and manufacturer
must learn something, if they do know, and relate
it to the Director.
These regulations, in sweet accord with the pur
poses and intent of the legislation, are meant to
discourage a slap-dash selling and advertising
campaign without ascertaining the properties and
effects of the new drugs which are to be sold and
advertised. The touchstone here is safety and
effectiveness. It is for the person, firm or corpora
tion formulating a new drug submission to decide
soberly when to make it in regard to the time and
quantities of sale in Canada.
The safety and efficacy of a new drug or indeed
any drug may be ascertained by clinical testing as
mentioned in paragraphs C.08.002(2)(g) and (h).
Now clinical testing is prima facie a matter of a
local and private nature in any province, subject to
provincial regulation and licensing of the health
and other scientific professions. The regulations do
not purport to trench upon such matters (although
there is some justification to do so in regard to p.o.
& g.g.) but, rather, they ask for the results of such
testing. In administering the Regulations, the HPB
does not interfere with private consumption of
drugs which, are not otherwise forbidden or
restricted. Unless one be a latter-day Lucretia
Borgia (a matter for the criminal law) one may
otherwise have the substance in question here for
personal use. Thus paragraph 1 of the Additional
Admissions of the parties, included in the trial
record, provides:
1. The Health Protection Branch does not object to importa
tions of reasonable quantities of isolated amino acids by
individuals for their own personal use.
Because the definitions of "food" and "drug"
expressed in section 2 of the Act are not set in
eternally finite terms, and are not even mutually
exclusive, it can be noted that Parliament must
have been quite aware of the well-known facts that
food and drug research is actively performed in
Canada and elsewhere. It is also well known that
foods can contain substances which, when extract
ed, evince the properties of drugs; and some foods
and drugs are discovered, through refined clinical
and pharmaceutical techniques, to have hitherto
unsuspected effects on life and health. These facts
are manifested also through the evidence herein
and the inferences to be drawn from the entirety of
it. Drug research and development are a field of
new discovery and changed expectations.
It is obvious that, if the Regulations are to be
consonant with the purposes of this intra vires
legislation, and if the Minister, the Director, the
HPB with the other branches and bureaux, and the
inspectors are all to discharge the duties imposed
by the legislation, this regulatory system must be
responsive to the new discoveries in terms of safety
and be capable of exacting that the public be
adverted to all changed expectations of basic use
and effectiveness.
Examined for discovery by plaintiffs' counsel
(exhibit 4), Robert Ferrier, head of the defen
dants' Bureau of Non-prescription Drugs made the
following unexceptionable answers to questions
posed to him (May 10, 1985, pages, 73, 76, 77, 81
and 82):
245. Q. When you came to the conclusion that you had to
consider isolated amino acid products as new drugs, on whose
recommendation did you come to that conclusion.
A. Well that conclusion was based on recommendations
from our Dr. Armstrong and his staff primarily.
[Paras. 10 (T-2583-84) & 13 (T-2968-84)—Amended Joint
Admission of Facts]—
Dr. Armstrong was, at all relevant times to the litigation, the
Assistant Director and Chief of the Drug Evaluation Division
of the Bureau of Non-prescription Drugs of the Drug Director
ate and reports to Mr. Ferrier.
246. Okay, were there any incidents reported to your bureau
that single amino acid products, whether those of Jamieson or
of any other manufacturer, particularly those you referred to as
having been allowed to release them under the emergency drug
regulation—were any incidents reported that these products
themselves had caused damage or harm to humans consuming
them?
A. I'm not aware of any—of any reports of that nature.
L-tryptophan [an isolated amino acid according to the plead-
ings and, paras. 2 and 6 of Amended Joint Admission of Facts]
is widely recognized as having some type of sedative affect
[sic]. It is these effects that have been recognized in reference
texts such as Martindales, in several Canadian reference texts
for that matter. It is reputed to have this sedative affect [sic],
and has been used in psychiatric institutions for the treatment
of certain psychotic diseases. The product was in a phar
maceutical dosage form. It had directions for use, and because
it was considered—because of this information, we consider
this to be a drug, and on the basis of the fact that we did not
have sufficient evidence in the Health Protection Branch
regarding the safety and effectiveness, it was a new drug.
266. Q. Do you or your bureau consider that until you have all
the information you require about a substance, article or prod
uct that is being marketed, you must or will declare it to be a
new drug or place it in new drug status?
A. Not necessarily so. If we have an application for a new
drug—for a drug identification number, we—our first step is to
if unless the information is readily available to us, if it's
something that is unknown to us, we will routinely request the
manufacturer to give us some further information on that
particular ingredient.
267. Q. But if, as in the case here of most if not all except one
products, the Plaintiffs did not apply for drug identification
numbers, would your bureau or you consider that the products
they placed on the market were new drugs until you got the
information you wanted, just because they placed them on the
market?
A. Based on past action of other manufacturers, other appli
cants, we would probably consider these products to be drugs
just from a knowledge of the activities, the actions of these
particular products.
From this testimony it can be seen that an
applicant, manufacturer or seller of products in the
synthetic or supplemented food, and especially the
drug field, can appreciate exactly what the Regu
lations require by invoking the experienced, quasi-
professional judgment, of itself, of such an appli
cant, manufacturer or seller: reveal all information
known about the product, including clinical tests
and reports of hitherto unsuspected side-effects. In
effect, such an applicant, manufacturer or seller
must not disseminate any such product among the
general public without being prepared to reveal or
ultimately revealing all the facts, effects, proper
ties, clinical trials and reports known to him, her
or the firm about the product proposed to be
disseminated to and through the public. Given the
knowledge which the applicant has, or reasonably
ought to have, such an applicant (as distinct from
John and Jane Doe) is not confronted by impre
cise, vague regulations, at all. Full disclosure is the
so-called "bottom line" or ultimate requirement
imposed on knowledgeable applicants.
In light of the foregoing, and in light of the
continuing stream of new discoveries and altered
medicinal expectations produced by on-going
research and development one is not surprised to
note that the Regulations are administered in
accordance with passages numbered 2 in the par
ties' additional admissions:
2. That the Health Protection Branch considers that manufac
turers have access to adequate warning of changes in policy
concerning the acceptability of substances they manufacture
through various mechanisms such as Branch Information
Letters which are frequently used to announce proposed
regulation changes or departmental positions on specific
subjects.
Another such mechanism for HPB/Manufacturer dialogue is
through the DIN application procedure. This is a first step to
check compliance. The importer should determine the
acceptability and degree of compliance before he imports the
drug product. Queries on such products should be directed to
the Drug Inspection unit of HPB as a first step.
The Regulations, given the realities of the indus
try, are more than adequately precise and unam
biguous. After all, the criterion is not an unattain
able, absolute perfection. Certainly, to identify in a
statute or regulations all the new discoveries, all
the possible reasonable apprehensions and ques
tions which can legitimately occur to the Director,
would require legislative clairvoyance and embark
ing into statutory expression which would neces
sarily be encyclopaedic in sheer volume. And one
would still fail. The DIN and new drug regulations,
however, do not fail. They are clear and precise
enough to tell the applicant to make full disclo
sure, whereupon the Director, within a limited
time, will decide if the application complies with
the legislated criteria.
II C.: The impugned regulations, do they consti
tute, or are they, an expression of an illegal
subdelegation of authority?
"Minister", according to section 2 of the Food
and Drugs Act, means the Minister of National
Health and Welfare, a member of the cabinet and
government of the day. It is stated in paragraphs 8
and 9 of the amended joint admission of facts, that
the Director under the Regulations is the Assistant
Deputy Minister of the Department of National
Health and Welfare, a federal government depart
ment which includes the HPB, which is, itself com
posed of various directorates. The Minister and the
Director are, then, entirely appropriate delegates
of the limited regulatory powers conferred by the
Regulations. In view of the requirements imposed
upon naturally knowledgeable, indeed, quasi-
professional applicants, manufacturers and sellers
in contemplation of the Regulations, taken to
gether with the inherent mechanism for dialogue
emplaced therein, it cannot be accepted that there
is any illegal subdelegation of those powers.
But, the plaintiffs argue that the subdelegation
of powers to the Minister and the Director, which
Parliament conferred on the Governor in Council,
is illegal. They contend that the Regulations, by
conferring discretionary powers on the two offi
cials are illegal subdelegations by the Governor in
Council. Only the statute, and not the Regulations,
may confer any such discretionary powers, the
plaintiffs say. This results, according to the plain
tiffs, in the Minister and civil servants developing
their own standards and policies and, in effect it is
the latter, and not the Governor in Council, who
are making the regulations.
Here the plaintiffs raise the maxim of delegatus
non potest delegare. Since this principle is a pre
sumption of statutory interpretation, and not a
rule of law, it operates subject to any contrary
intention found in the statute or in any other
relevant statutes.
In the context of the administrative functions of
modern government, the courts have not been
markedly reluctant to perceive such an intention.
In fact, they have developed a special rationale for
finding an intention and a power to subdelegate in
most legislative schemes empowering executive
action. The seminal decision was made in Carltona
Ltd. v. Works Comrs., [1943] 2 All E.R. 560
(C.A.). This case involved consideration of a war
time regulation, but the Court did not hold that its
view of subdelegation related especially to that
factor. The judgment was written by Lord Greene
M.R. and it has these passages at pages 563 and
564:
In the administration of government in this country the
functions which are given to ministers (and constitutionally
properly given to ministers because they are constitutionally
responsible) are functions so multifarious that no minister
could ever personally attend to them .... The duties imposed
upon ministers and the powers given to ministers are normally
exercised under the authority of the ministers by responsible
officials of the department. Public business could not be carried
on if that were not the case. Constitutionally, the decision of
such an official is, of course, the decision of the minister. The
minister is responsible ....
In the present case the assistant secretary, a high official of
the Ministry, was the person entrusted with ... looking after
this particular matter and the question, therefore, is ... did he
direct his mind to the matters to which he was bound to direct
it in order to act properly under this regulation?
Parliament, which authorises this regulation, commits to the
executive the discretion to decide and with that discretion if
bona fide exercised no court can interfere.
The Supreme Court of Canada expressly adopt
ed from Carltona that line of reasoning. Writing
for the unanimous bench, Dickson J. (now Chief
Justice of Canada), in R. v. Harrison, [1977] 1
S.C.R. 238, is reported, at pages 245 and 246, as
follows:
Thus, where the exercise of a discretionary power is entrusted
to a Minister of the Crown it may be presumed that the acts
will be performed, not by the Minister in person, but by
responsible officials in his department: Carltona, Ltd. v. Com
missioners of Works ([1943] 2 All E.R. 560 (C.A.)). The tasks
of a Minister of the Crown in modern times are so many and
varied that it is unreasonable to expect them to be performed
personally. It is to be supposed that the Minister will select
deputies and departmental officials of experience and compe
tence, and that such appointees, for whose conduct the Minister
is accountable to the Legislature, will act on behalf of the
Minister, within the bounds of their respective grants of author
ity, in the discharge of ministerial responsibilities. Any other
approach would but lead to administrative chaos and
inefficiency.
So, where Parliament entrusts the Governor in
Council to make regulations for carrying out the
purposes and provisions of the Food and Drugs
Act, it may be presumed that some discretionary
powers will be conferred in those Regulations, and
it may further be presumed that the acts involved
will be performed, not by the Governor in Council,
but by the responsible Minister of the Crown,
aided by designated deputies and departmental
officials of experience and competence, and so
forth, to paraphrase Mr. Justice Dickson.
Of course, it is clear that the Governor in Coun
cil could not simply have conferred on the Minister
or the Director the same power to make regula
tions which Parliament conferred on the Governor
in Council. That would indeed be an illegal sub-
delegation, as was explained by Laskin J. (later
C.J.C.) in Brant Dairy Co. Ltd. et al. v. Milk
Commission of Ontario et al., [1973] S.C.R. 131,
at page 147. Such a circumstance is far from those
in the case at bar, and is quite distinguishable.
Also distinguishable is a decision of Mr. Justice
Larue of the Superior Court of Quebec in Voya-
geur Inc. c. Commission des transports du
Québec, [1986] R.J.Q. 2577 (C.S.), cited by the
plaintiffs pursuant to undertakings expressed at
trial. There, the impugned regulation exacts that
in order to obtain a bus transportation permit, an
applicant must demonstrate to the Commission
that it is in the public interest that such permit be
issued to him for the service which he proposes to
provide. That regulation appeared to leave the
matter entirely to the Commission and did not
direct it to receive any particular means of demon
strating the public interest, nor to make a decision,
nor to invite dialogue by receiving supplementary
submissions, as do the impugned Regulations in
the case at bar. In leaving the discretionary powers
of the Commission so much at large, the regula
tion in that Voyageur case closely resembles the
void regulation in the Brant Dairy case, above
mentioned. The Court expresses no criticism of the
Voyageur decision, but notes that it does not effec
tively bear on the instant case.
According to the parties' amended joint admis
sion of facts, (T-2853-84), the factual operation of
the Regulations, at the material times was, in part,
the following:
15. Authority to determine whether a product is a new drug
was delegated to Dr. Cook by the Assistant Deputy Minister
(who is the "Director" under the Food and Drugs Act), and
that authority was further delegated to Mr. Ferrier by Dr.
Cook.
14. Once a product has been determined to be a non-prescrip
tion drug, an opinion that such product is a new drug is formed
by Mr. Ferrier on advice from his staff. Decisions as to whether
products constitute new drugs are made by Mr. Ferrier. On
occasion, as well, requests for determination as to whether a
given product constitutes a new drug are made by departmental
employees during the course of drug investigations.
16. Only manufacturers that apply for a drug identification
number (DIN) on a product, or manufacturers who request a
decision on the status of a product, are normally advised that a
product is a new drug.
17. The present DIN system came into existence in July 1981
and the Bureau of Non-Prescription Drugs was formed in 1980.
18. No application for a DIN was received by the Minister from
the Plaintiffs with respect to any products listed in the State
ment of Claim.
19. Defendants have used in the past several criteria for deter
mining whether a product is a new drug within the meaning of
s. C.08.001 of the Food and Drug Regulations. Some of these
criteria are found in the following documents, produced here
with as Exhibits in Schedule I hereto:
a) 1 (E-4)
b) 1 (E-9)
c) 1 (E-10)
These criteria are not exhaustive. The Defendants exercise a
certain discretion in their application.
20. Under Defendants' present policy, DIN'S are issued for
products, not substances. [Paragraphs 17 through 23—
(T-2968-84)]
The explanations offered in the above-cited exhib
its reveal not a despotic, arbitrary octopus of an
organization but, rather, one which, as later con
sideration of the evidence will reveal, did its
pathetic best and still could not keep abreast of the
numbers of new products being manufactured,
labelled and marketed in Canada all the time.
Such at least is one inference which can be drawn
from Mr. Ferrier's evidence on discovery. Another
strong inference is of confusion and inappropriate
focus by the HPB, before the orienting interven
tions of Dr. Armstrong.
In any event whatever discretion is accorded by
these clear and detailed Regulations is quite
restricted. It is provided in C.01.014.2(1) that
where the applicant has provided all the informa
tion described in C.01-014.1(2) or in C.08.002 or
C.10.003, the Director shall issue a DIN. His sole
grounds for declining, considered earlier herein,
must be reasonable and specifically in accord with
the Act and the other regulations. Under regula
tion C.08.004 the Minister is bound either to issue
a notice of compliance or to notify the manufac
turer why the submission or supplement does not
comply, within 120 days. The Minister is subject
to the Court's supervising power to order man-
damus in that regard. In both instances the appli
cant is entitled to respond, which is referred to
herein as the "dialogue mechanism". These dele
gated powers do not permit the Minister or the
Director to do as they please: they have no unfet
tered discretions.
The Court finds no illegal subdelegation here, as
alleged by the plaintiffs.
CONCLUSIONS TO PART II
In holding all of the impugned regulations to be
valid in regard to the attacks levied against them
by the plaintiffs, the Court is far from certifying
that the Regulations are absolutely perfect in
every respect. They could be improved. Volumi
nous and detailed as they are, they could yet be
more specific in some of the aspects of which the
plaintiffs complain. However, upon analysis, and
further, in view of Bennion's statement of the law
(above), the jurisprudence cited, not least of which
are the Brant Dairy dicta (above) and the decision
in R. v. Harrison (above), the Regulations evince a
degree of certainty and precision, and sufficient
limitations on the Minister's and the Director's
discretions, which are quite adequate to withstand
the plaintiffs' complaints.
EDITOR'S NOTE
The reasons for judgment on the third issue
(whether the isolated amino acids and amino acid
products were "new drugs") occupied 20 pages
in manuscript. The plaintiffs adduced evidence
that the substances in question were food rather
than drugs or, in the alternative, if drugs, they
were not "new drugs". His Lordship found, how
ever, that in view of the inadequacy of the data
supplied by the plaintiff, its product had to be, in
accordance with the regulations, regarded not
only as a drug but as a "new drug". The people
of Canada were not to serve the drug industry as
guinea pigs. There was nothing improper in the
plaintiff having been asked why Tryptophan was
to be contained in its proposed product since it is
a mood-altering substance. The presence of
Tryptophan in the proposed new product, said to
ease stress, meant that it could be found to
require more information as to its safety and
effectiveness. The denial of a drug identification
number to permit the product's dissemination to
consumers was accordingly justified and lawful.
On the evidence, the following substances were
found to be "new drugs": Tryptophan, Arginine,
Phenylalanine, Methionine, Ornithine, Tyrosine,
Lysine, Carnitine and Histidine. The Court cau-
tioned that this was not to be taken as a crystal
lized list of "new drugs".
The Court decided the fourth issue by finding
that the new drug regulations had not been
applied unfairly. They had, however, been applied
in an incompetent manner and that would be
taken into consideration in awarding costs. It was
almost a year after Jamieson first sought a DIN
that the real reason for the denial was made
known. The plaintiff had been enveloped in the
shifting policies of the Health_ Protection Branch of
the Department of National Health and Welfare. It
was understandable that the plaintiffs would feel
that they were being subjected to arbitrary treat
ment in that other manufacturers had been grant
ed, prior to July, 1981, DINS with respect to prod
ucts containing isolated amino acids. But the
regulations allow for policy changes. Although the
defendants admitted that they did not themselves
know why certain products, other than amino
acids, were seized, this was to be explained by
incompetence rather than malice and the seizure
was insufficient to support a finding that the regu
lations had been applied in an unfair or dis
criminatory manner. The inference to be drawn
from the evidence is that, at the relevant time, the
Health Protection Branch was under-staffed, over
worked and in a state of confusion. Nevertheless,
the plaintiffs are seeking judicial review of a dis
cretionary administrative action and the appli
cable law is clear. The decision-maker must nei
ther exceed nor abuse his discretionary authority.
Such decision-makers are not bound by their
former decisions or policies. But an unexplained
departure from previous policy can raise an infer
ence of bad faith. In the instant case, that the
plaintiffs were told to cease selling these products
before other manufacturers were, could be
accounted for by the more complete familiarity of
the Health Protection Branch with the plaintiffs'
proposed products than with the others due to
Jamieson's contemporaneous DIN application. It
was not unreasonable that a large bureaucratic
administration would need time to convert an
initial response into industry-wide compliance. A
DIN had been approved for plaintiff's (Jamieson's)
product "Stress-Ease" without Tryptophan; the
claim for an order requiring the Director to grant a
DIN for a product containing that substance had to
be dismissed since the Director is justified in
considering such product a "new drug".
V. CHARTER APPLICATION: Did the search and
seizure pursuant to section 22 of the Food and
Drugs Act violate the plaintiffs' right guaran
teed by section 8 of the Canadian Charter of
Rights and Freedoms, and is that section 22
itself violative of such right?
The plaintiffs, in action T-2968-84, pray for a
declaration that the search of Jamieson's premises
and the seizure of its isolated amino acid products
by the defendants' inspectors violated section 8 of
the Charter. Swiss Herbal's premises were visited
on the same day as the inspectors seized Jamie-
son's products. The inspectors advised Swiss
Herbal to continue to keep from the market all
isolated amino acids and such products until the
plaintiff complied with regulation C.08.001 and
following, regarding new drugs. (Amended Joint
... Facts in T-2968-84, paragraph 31.) For the
purposes of this issue Swiss Herbal, although not a
manufacturer, is considered to be in the same
plight as is Jamieson.
The plaintiffs urge that section 22 of the Food
and Drugs Act, pursuant to which the search and
seizure were effected, contravened section 8 of the
Charter at the material time. Section 22 was later
amended [S.C. 1985, c. 26, s. 12], but at the
material time it ran thus:
PART II
ADMINISTRATION AND
ENFORCEMENT
Powers of Inspectors
22. (1) An inspector may at any reasonable time
(a) enter any place where on reasonable grounds he believes
any article to which this Act or the regulations apply is
manufactured, prepared, preserved, packaged or stored,
examine any such article and take samples thereof, and
examine anything that he reasonably believes is used or
capable of being used for such manufacture, preparation,
preservation, packaging or storing;
(b) open and examine any receptacle or package that on
reasonable grounds he believes contains any article to which
this Act or the regulations apply;
(c) examine any books, documents or other records found in
any place mentioned in paragraph (a) that on reasonable
grounds he believes contain any information relevant to the
enforcement of this Act with respect to any article to which
this Act or the regulations apply and make copies thereof or
extracts therefrom; and
(d) seize and detain for such time as may be necessary any
article by means of or in relation to which he reasonably
believes any provision of this Act or the regulations has been
violated.
(2) For the purposes of subsection (1), the expression "arti-
cle to which this Act or the regulations apply" includes
(a) any food, drug, cosmetic or device,
(b) anything used for the manufacture, preparation, preser
vation, packaging or storing thereof, and
(c) any labelling or advertising material.
(3) An inspector shall be furnished with a prescribed certifi
cate of designation and on entering any place pursuant to
subsection (1) shall if so required produce the certificate to the
person in charge thereof.
(4) The owner or person in charge of a place entered by an
inspector pursuant to subsection (1) and every person found
therein shall give the inspector all reasonable assistance in his
power and furnish him with such information as he may
reasonably require.
(5) No person shall obstruct an inspector in the carrying out
of his duties under this Act or the regulations.
(6) No person shall knowingly make any false or misleading
statement either verbally or in writing to any inspector engaged
in carrying out his duties under this Act or the regulations.
(7) No person shall remove, alter or interfere in any way
with any article seized under this Act without the authority of
an inspector.
(8) Any article seized under this Act may at the option of an
inspector be kept or stored in the building or place where it was
seized or may at the direction of an inspector be removed to
any other proper place.
Section 8 of the Charter guarantees that:
8. Everyone has the right to be secure against unreasonable
search and seizure.
The plaintiffs focus on the legislation. They do
not allege any misconduct whatsoever on the part
of the inspectors. Relating the provisions of section
22 back to the new drug regulations, the plaintiffs
argue that no decision to search and seize, or
conduct of a search and seizure could ever be
reasonable, because the allegedly vague new drug
regulations preclude any inspector from ever
having "reasonable grounds to believe" that new
drugs are being "manufactured, prepared, pre
served, packaged or stored". Alleged vagueness
aside, the regulations' complexity could present
certain difficulties in this regard. Furthermore, the
plaintiffs note, section 22 does not require that
inspectors obtain prior authorization from an
independent authority in order to search and seize.
The defendants acknowledge that section 22
purports to authorize warrantless searches and
seizures, but their counsel submits that these are
situations or conditions in which the requirement
for prior authorization would itself be unreason
able. The defendants aver that the statutory au
thority is reasonable in itself and does not contra
vene section 8 of the Charter.
The witness Eric Margolis, the Chief Executive
Officer of the plaintiff Jamieson, recalled that
"when this case started to develop and . .. all of a
sudden one day the HPB inspectors marched into
my office and informed us in the case of trypto-
phan that this product was a new drug and not a
food", (transcript 1, page 82). He did not testify
about the impugned search and seizure of which
Jamieson complains. The evidence concerning that
event is found in paragraph 30 of the amended
joint admission of facts in action T-2968-84, thus:
30. On December 17, 1984, Defendant Director's employees,
on behalf of the Drug and Environmental Health Inspec
tion Division, entered Plaintiff C.E. Jamieson & Co.
(Dominion) Ltd.'s premises and seized the amino acid
products listed in the documents of seizure produced here
with in [exhibit 1 (E-29)].
The joint admission mentions only Jamieson's
"premises": it does not indicate that anyone's pri
vate office was searched for purposes of the sei
zures. Exhibit 1 (E-29), rather, shows that multi
ple cases (packing boxes?) and bottles of products,
valued at several thousands of dollars, were seized:
that is, quantities which, by inference, would not
have been placed in Mr. Margolis' or anyone else's
private office. That inference and the lack of
contrary evidence induce the Court to find that no
office was searched by the defendants' inspectors.
This conclusion applies equally to Swiss Herbal
whose "premises" alone are mentioned, from
which no articles were physically taken.
The plaintiffs' counsel reiterated more than once
during the trial that the plaintiffs make absolutely
no complaint about the conduct of the defendants'
inspectors during this search, if such there really
was, and seizure of the products. Based on those
acknowledgments by counsel, the Court finds that
the inspectors went about their task in a manner
which was adequately polite, pragmatic, profes
sional and not offensive to anyone.
Section 22 of the Food and Drugs Act is to be
considered in this light. Did the inspectors have
reasonable grounds to believe that Jamieson's
premises were a place where any article to which
the Act or Regulations apply is manufactured,
prepared, packaged or stored? No doubt they did.
Paragraph 22(1)(a) of the Act accords them
power of inspection. Did the inspectors reasonably
believe that what they seized were the means or
effect by which any provision of the Act or the
Regulations had been violated? Possibly the
inspectors or those who despatched them did so
reasonably believe, but in the absence of a sworn
information or like document to induce issuance of
a warrant, it is not certain whether their beliefs
could have been reasonable or not. This latter
matter of violation of the Act or Regulations was
surely a contentious question between the parties,
because only 11 days before the inspectors' sei
zure, Jamieson had filed its statement of claim to
initiate action T-2853-84, on December 6, 1984.
Paragraph 22(1) (d) of the Act accords the power
of warrantless seizure and it exacts reasonable
belief that the Act or Regulations has been
violated.
M. Ferrier examined for discovery, and speaking
for the defendants, gave these binding answers:
Q. And before seizing in the hands of Jamieson, the amino
acids which you did seize, you didn't attempt to find out
from Jamieson for how long they had been selling and in
what quantity they had been selling?
A. No that was not done. (August 16, 1985, afternoon, page
29.)
The violation, of which reasonable belief was
required, was selling a new drug without having
obtained from the Minister a notice of compliance
pursuant to regulation C.08.002(b). The definition
of new drug includes the factor of not having been
sold for sufficient time or in sufficient quantity to
establish safety and effectiveness in Canada. Did
the inspectors, or those who despatched them,
know that Jamieson had not provided some of the
putative information by which to assess compli
ance with the criteria of regulation C.08.001?
"No", say the plaintiffs. But is it not probable that
they knew of the letter, exhibit 1 (E-28)? Mr.
Ferrier denied any involvement in that matter on
the part of the defendants.
Q. Right? The decision was to declare them [the amino acid
products herein] to be in new drug status?
A. The opinion that we provided was that they would be in
new drug status, that's right.
A. Because the opinion, all that I, the authority that I have
in terms of compliance actions is to provide opinions. I
cannot go out and I do not have the authority to go out
and seize products, or to take actions, even though I am
an inspector, designated under the act, I am not given
that responsibility by my superior to go out and make,
take compliance actions. So that any type of compliance
action that is taken, it has to be taken by an inspector
that has been delegated with those responsibilities and he
must, with due consideration, take that decision on behalf
of the Department.
Q. But I am referring to the decision to place the amino
acids in drug status. That's not the decision to go and
seize.
A. Oh, but the decision that inspector makes is based on the
fact that it is his opinion that it is a drug, a new drug and
that it should not be sold, so that ....
Q. Are you now saying that the decision was taken by the
inspector to place this type of isolated amino acids under
drug status ...
A. The action that was taken by the inspector had to be
taken by him alone, because he was the one who took this
action. It is my, you know, it is my understanding that
any action that is taken by an inspector, he must be quite
clear in what he is doing, and if he feels that there is any
doubt in what he is, action he is carrying out, that he
must satisfy himself before he can take any type of, of
action such as that, cause there is no kind of high official
that can take that action by the inspector.
Q. Mr. Ferrier, are you saying then that no one, except the
inspector, made the decision to place these amino acids
under new drug status?
A. No, I am not saying that, I'm saying that the action that
was taken by the inspector, had to be taken on the basis
of his assessment as to the compliance of these products
under the existing act and regulations.
Q. All right.
A. Well, he can, he could, he can obtain opinions from
whoever he feels like, really, so that in this ...
Q. Well, then, Mr. Ferrier, does this mean in fact that you
made no decision as to whether these amino acids were
new drugs or not?
A. We made a decision on the basis of the information we
had at hand that these particular products should be new
drugs, insofar as we were concerned, but in terms of any
subsequent compliance action that was taken, that was,
we had no involvement in that whatsoever. (August 16,
1985, p.m., pages 37 to 39.)
Finally, the defendants made this admission in
the amended joint admission of facts:
Except for the amino acids listed in [exhibit 1(E-1), (Dr.
Armstrong's memo dated November 7, 1984)] the Bureau of
Non-Prescription Drugs does not know why the other products
listed in the Statement[s] of Claim ... were seized. (T-2853-
84, paragraph 52; T-2968-84, paragraph 43.)
In the result the defendants admit that there
was no reasonable belief of any violation in regard
to the seized products about whose seizure they
later relented and released from seizure. In so far
as the continuing seizure of the seven amino acid
products listed in Dr. Armstrong's letter of
November 7, 1984 there is no evidence of the
inspectors' belief being reasonable or not. The
mere facts that the inspectors seized them, and the
defendants asserted that they were and are new
drugs (now found to be correct) do not establish
the inspectors' reasonable belief that the legisla
tion was being violated on December 17, 1984.
However, an inference may be drawn from Mr.
Ferrier's answers (May 10, 1985, page 19, A. 60;
August 16, 1985, a.m., page 38) that the inspec
tors founded their beliefs about the seven products
on Dr. Armstrong's memo which is addressed to
an official of the "Operations and Compliance
Division". Seven, because Carnitine was not then
included. In conclusion, in regard to the seized
products or substances which were not mentioned
in that memo of November 7, 1984, included in
exhibit 1 (E-1), plus Carnitine, the Court finds
that the plaintiffs Jamieson and Swiss Herbal
suffered an unreasonable seizure.
The pivotal word in section 8 of the Charter is
"unreasonable". Reasonable searches and seizures,
although not per se authorized by section 8, are
constitutionally valid if otherwise lawful. This begs
the question in regard to the products listed in the
memo, exhibit 1 (E-1). Even assuming that the
inspectors harboured the reasonable belief
required by paragraph 22(1)(d) of the Act, does
the warrantless-seizure feature of that Act contra
vene the guarantee of security from unreasonable
seizure enunciated in the Charter?
The leading case on this issue is Hunter et al. v.
Southam Inc., [1984] 2 S.C.R. 145, cited for the
plaintiffs. Mr. Justice Dickson (now Chief Jus
tice), writing for the unanimous Supreme Court of
Canada, stated that the Charter is a purposive
document, and that the purpose of section 8 is to
guarantee a reasonable expectation of privacy.
This interest, however, must be assessed against
the government's interest in intruding upon some
one's privacy in order to advance its goals, notably
law enforcement. Having stated that, Dickson J.
explained that whatever powers of search and sei
zure are given by law, they ought to carry with
them the following three conditions:
(1) a requirement of a search warrant, or other authorization,
to be obtained in advance of the search—prior authorization—
in order to prevent unjustified state intrusions upon privacy
from occurring. Indeed, Dickson J. indicated at page 161 that a
rebuttable presumption of unreasonableness arises in respect of
warrantless searches or seizures;
(2) a requirement that the warrant be issued by a person who
is "capable of acting judicially". This person needs not to be a
judge, but must not be also involved in the investigation (i.e.
must be neutral and impartial);
(3) a requirement that the issuance of a warrant be based upon
an objective standard, and not merely the subjectivity of
individual adjudicators. The purpose of this requirement is to
provide a consistent standard for identifying the point at which
the state's interests prevail over those of the individual. The
mere "possibility of finding evidence" is too low a standard.
Rather, "in cases like the present [anti-combines criminal
investigations], reasonable and probable grounds, established
upon oath, to believe that an offence has been committed and
that there is evidence to be found at the place of the search,
constitutes the minimum standard, consistent with section 8 of
the Charter, for authorizing search and seizure" (p. 168).
If a search or seizure is not authorized by
statute, or if the authorizing statute does not stipu
late those three conditions, then the legislation is
unreasonable and is inconsistent with section 8 of
the Charter. However, Dickson J. recognized that
prior authorization for a search is not always
feasible, and that a warrantless search may be
valid if the party seeking to uphold it can rebut the
presumption of unreasonableness (page 161). The
learned jurist did not need to pursue this point in
Hunter, but subsequent decisions have discussed it.
With respect to statute-authorized warrantless
searches and seizures, three Canadian appellate
courts have drawn a distinction between the con
text of criminal investigations and the context of
inspections or audits under a regulatory process.
(R. v. Rao (1984), 12 C.C.C. (3d) 97 (Ont. C.A.).
Leave to appeal to Supreme Court of Canada
refused, [1984] 2 S.C.R. ix; Re Belgoma Trans
portation Ltd. and Director of Employment
Standards (1985), 51 O.R. (2d) 509 (C.A.); R. v.
Quesnel (1985), 24 C.C.C. (3d) 78 (Ont. C.A.).
Leave to appeal to Supreme Court of Canada
refused, [1986] 1 S.C.R. xiii; Bertram S. Miller
Ltd. v. R., [1986] 3 F.C. 291 (C.A.). Leave to
appeal to Supreme Court of Canada refused,
[1986] 2 S.C.R. v; R. v. Bichel (1986), 4 B.C.L.R.
(2d) 132 (C.A.).) These cases state generally that
a warrantless search or seizure is more likely to be
unreasonable when exercised in respect of obtain
ing contraband or evidence in the course of a
criminal investigation, than when exercised by
government inspectors in the course of inspections,
related to public health and safety, in business
activities subject to government regulation. The
reason for this distinction appears to be that in
government-regulated business activity, there is,
and must be, a lower expectation of privacy on the
part of those who choose to enter it.
In Rao (regarding a criminal investigation) the
Ontario Court of Appeal acknowledged this dis
tinction in unanimously holding inoperative that
portion of paragraph 10(1)(a) of the Narcotic
Control Act authorizing a peace officer to conduct
a warrantless search of an office, in which he or
she reasonably believed illicit narcotics were locat
ed, where obtaining a warrant was not impracti
cable. At page 123, Mr. Justice Martin said that a
warrantless search of an office requires justifica
tion in order to meet the constitutional standard of
reasonableness. He noted that a warrantless search
is justified where the circumstances make the
obtaining of a warrant impracticable; but where
the obtaining of a warrant would not impede effec
tive law enforcement, a warrantless search of an
office of fixed location (except as an incident of
lawful arrest) cannot be justified and does not
meet the constitutional standard of reasonableness
prescribed by section 8 of the Charter. Martin J.A.
observed that the Law Reform Commission of
Canada had recommended the creation of telewar-
rants for situations of emergency or inaccessibility
of a justice of the peace. The recommendation has
since been implemented by Parliament in section
443.1 of the Criminal Code [as added by S.C.
1985, c. 19, s. 70].
In Belgoma, the Ontario Court of Appeal
upheld a search and seizure authorized by section
45 of the provincial Employment Standards Act,
R.S.O. 1980, c. 137. Section 45 empowered an
employment standards officer to enter business
premises without a warrant and to require produc-
tion of business records, which can be removed for
copying. After noting the distinction between
criminal investigations and administrative regula
tory inspections, the Court found this warrantless
search or seizure not to be unreasonable because it
was aimed not at criminal activity, but rather at
ensuring and securing compliance with the regula
tory provisions of the Act for the purpose of
protecting the public interest (page 512).
In Quesnel, the Ontario Court of Appeal upheld
the power to effect a warrantless search, pursuant
to the provincial Farm Products Marketing Act,
R.S.O. 1980, c. 158, the purpose of which activity
was to determine the number of chickens in Ques-
nel's building. The Court noted that "chicken" was
a regulated product, and applied Rao and Bel-
goma. In holding that the official was seeking to
conduct only a regulatory inspection, the Court
held that the legislation was not unreasonable
within the meaning of the Charter.
In Bichel, the British Columbia Court of Appeal
upheld a municipal zoning by-law authorizing a
building inspector to enter without warrant at all
reasonable times upon any property or premises to
ascertain compliance with zoning regulations. The
Court stated that a warrant procedure is appropri
ate for searches in the course of a criminal investi
gation, but agreed with Rao, Belgoma and Ques-
nel that different considerations apply to
regulatory inspections (pages 139-140 and 143).
This was explained quite thoroughly by Macfar-
lane J.A., at pages 143-144, as follows:
The standard proposed in Hunter v. Southam Inc. involves
prior authorization by a judicial officer based upon proof of
reasonable and probable ground justifying intrusion. It is
reasonable that such a standard be applied in a criminal
investigation, or when a search is being made of the type
contemplated by the Combines Investigation Act. That type of
search involves intrusion without notice, whether it be conven
ient or inconvenient. It may involve a serious invasion of
privacy, for instance a search through personal property. It may
involve a deprivation of personal property. A police raid inevi
tably involves personal stigma. The search warrant procedure is
needed and applies well in that type of situation.
Different considerations apply to administrative inspections
.... An inspection involves a minimal intrusion into the privacy
of a person, if conducted at a reasonable time. It does not
involve a search or seizure of personal property. It involves
looking at construction, wiring, plumbing and heating, and at
things which may affect health or safety. There is no stigma
attached to the inspection. It is something that may be reason
ably expected by all members of the community, in whose
interest it is to maintain health and safety standards. Once it is
recognized that such inspections must proceed on a routine
basis, area by area, without proof in advance of an infraction
by any particular householder, then it would be an empty and
futile gesture, in my opinion, to have an independent official
hear the reasons a search is to be made and give a prior
authorization. The fact that an infraction may be discovered,
and a penalty imposed, does not persuade me that a cumber
some and ineffective procedure should be put in place. It would
not protect the individual violator from being discovered. Nor is
it in the public interest that he should be so protected.
Hunter v. Southam Inc. holds that prior authorization is a
precondition for a valid search and seizure if it is feasible and
reasonable to insist upon prior authorization. In my opinion, it
would not be reasonable to insist upon prior authorization of
administrative inspections, which could only be an expensive,
routine measure incapable of providing any real protection to
the householder.
I have concluded that the by-law is not inconsistent with s. 8,
and would affirm the judgment of Mr. Justice Dohm.
I would dismiss the appeal. [Emphasis added.]
In Bertram Miller, the Appeal Division of this
Court upheld a warrantless seizure, pursuant to
paragraph 6(1)(a) of the Plant Quarantine Act
[R.S.C. 1970, c. P-13] which authorized inspectors
to conduct warrantless searches and seizures of
any place where they reasonably believed there
were pests injurious to plants. The plaintiff-
respondent had imported from the United States
trees and shrubs, which were found upon inspec
tion to be infested with gypsy moth larvae. The
inspectors formed the opinion that there was a
reasonable danger that the whole shipment was or
could soon become infested. They therefore confis
cated the trees and ordered the plaintiff to destroy
them. When said order was not obeyed, the inspec
tors themselves destroyed the trees.
In separate but concurring reasons, Messrs. Jus
tices Hugessen and Ryan both held that this war-
rantless seizure was not unreasonable. Mr. Justice
Heald, in dissent, did not discuss this issue; he
would have dismissed the appeal on another non-
constitutional ground.
Hugessen J. began by noting that in a section 8
review, regard must be had not only to the text of
the statutory provision, but also to the context of
the provision. That is, he explained, it is necessary
to examine the purpose of the statutory scheme
authorizing the search or seizure, the nature of the
property seized, the character of the premises
where the search or seizure may normally be
expected to occur, and the legitimate interests of
both the public at large and the person subjected
to the search or seizure. Hugessen J. elaborated on
this, at pages 341 and 342 as follows:
What is reasonable in terms of entry into and inspection of a
restaurant kitchen or a commercial dairy, or a factory, or a
mine will differ radically from what is reasonable for the search
and seizure of private papers in a dwelling house. By the same
token, there is a distinction between a statutory scheme which
obviously envisages routine inspections and testing at reason
able times in the normal course of business and one which is
designed to permit, where necessary, armed and forcible intru
sion at three o'clock in the morning. In short, there is a
difference in kind between the tramp of jackboots and the sniff
of the inspector of drains.
In my view, there is clearly a category of public health- and
safety-related inspections carried out in commercial or industri
al premises where a warrantless search and seizure is not only
reasonable but essential for the protection of the public good.
After noting that the Ontario Court of Appeal
in Rao and Belgoma drew this same distinction,
Hugessen J. applied his reasoning to the legislation
and facts at hand, as follows (page 343):
The evident purpose of the Plant Quarantine Act is the
protection of our forests and our farms from infestation from
parasites.
Once, as a result of the search, plant material is found to be
infested and to constitute a hazard, the public interest in its
seizure and destruction forthwith must surely outweigh any
interest whose protection is envisaged by section 8 of the
Charter.
All these things being considered, it is my view that the
quoted provisions of the statute do not authorize an unreason
able search and seizure.
Ryan J. also approved the distinction made by
Martin J. in Rao, and stated that "it would ... be
undesirable to introduce into our administrative
law system a relatively inflexible warrant require
ment" (page 324). This seizure, Ryan J. said, was
merely a step in an administrative process and had
nothing to do with criminal law.
Ryan J. explained that section 8 protects at least
two interests, a person's reasonable expectation of
privacy, and a person's interest in being secure
against unreasonable seizure of his or her prop
erty, but found the opposing interests to be pre
dominant in this case. First, there was a powerful
public interest in safeguarding New Brunswick
forests against potentially damaging infestations.
Second, there was an "emergency situation". In
addition, the Act's standard that the inspectors
have reasonable belief that the plants are hazard
ous was, in Mr. Justice Ryan's opinion, a reason
able standard. The inspectors did in fact have
reasonable grounds for their belief that a danger of
infestation existed. As a result, Ryan J. concluded,
a warrant or other prior authorization from an
impartial arbiter was not a necessary precondition.
The ratio of this Bertram S. Miller decision cen
tres on the emergency created by an immediate
hazard of infestation.
The cases just discussed yield the following
guidelines for evaluating the impact of section 8
upon a statute-authorized warrantless search or
seizure:
— Warrantless searches or seizures in the course of a criminal
investigation are more likely to be held unreasonable than
warrantless searches or seizures in the course of an adminis
trative inspection process.
— Generally where obtaining a warrant is impracticable, the
courts are more likely to uphold a warrantless search or
seizure.
— Factors of impracticability include the degree to which effec
tive law enforcement may be impeded, the degree to which
an emergency exists, and the importance of the public inter
est (e.g. protection of health and safety).
The less the intrusion upon the individual's privacy, the more
likely the warrantless search or seizure will be upheld (e.g. if
it takes place at a convenient time, if there is no stigma
attached, if it does not involve a search or seizure of personal
property, etc.).
Applying these to the case at bar, it is apparent,
on balance, that the defendants' seizure of the
plaintiffs' stock violated section 8 of the Charter.
The search and seizure authorized by section 22
of the Food and Drugs Act does not meet the
Hunter test because section 22 does not stipulate
any of the three conditions, stated therein supra.
As a result, a rebuttable presumption of unreason
ableness, and thus invalidity, arises.
This presumption has not been rebutted. First,
the defendants cannot rely upon the less strict test
of reasonableness which the courts are applying in
the context of administrative inspections because
this search and seizure was in Ate-context of a
criminal-. investigation:The plaintiffs' point is well
taken: the defendants can hardly argue on the one
hand that the legislation is intra vires of Parlia
ment in regard to criminal law, and on the other
hand argue that the searches and seizures are
conducted, not in the course of a criminal investi
gation, but rather in the course of regulating the
manufacture, sale and labelling of drugs in
Canada. (Transcript 3, pages 147 to 158.) The
new drug regulations are assimilated largely to
criminal law prohibiting the sale of new drugs for
which no notice of compliance has been issued.
Paragraph 26(b) of the Act provides that breach
of the Regulations is an offence which is prosecut
ed on indictment. Upon learning of the plaintiff's
continuing intentions to ignore this prohibition,
but to ascertain its rights and obligations in action
T-2853-84, commenced on December 6, 1984, the
defendants thereafter conducted the seizure of the
contraband and evidence. That evinces more char
acteristics of a criminal investigation than of an
administrative process of inspection or regulation.
It is true that paragraphs 22(1)(a), (b) and (c)
create powers which appear to provide for regula
tory inspections, but paragraph 22(1) (d) which the
inspectors invoked, provides that such official
"may .. . seize and detain ... any article by means
of or in relation to which he reasonably believes
any provision of this Act or the regulations has
been violated". (Emphasis added.) Those are the
words in which section 26 is expressed. The legisla
tive intent to make paragraph 22(1)(d) an enforce
ment adjunct to the prosecution of offences pursu
ant to section 26 is too clear to merit further
discussion.
Moreover, obtaining a warrant for a seizure
pursuant to paragraph 22(1)(d) of the Act is not
necessarily unfeasible or impracticable, especially
not in situations such as the case at bar, which
appears to involve a typical invocation of the
power to seize. Here, no emergency can be said to
have existed, as indicated by the protracted lapse
of time between the defendant's determination
that the plaintiff's products were "new drugs" and
the actual seizure. And, effective law enforcement
would not have been impeded by the defendant's
obtaining prior authorization for the search and
seizure. The plethora of letters which passed be
tween the two parties in this particular instance
indicates that the plaintiff was not at all secretive;
indeed the plaintiff was acting with the utmost
candor. Thus, the lapse of, at most, one more day
to obtain prior authorization would not have been
likely to result in the plaintiff's selling or conceal
ing or destroying its "new drugs". In the circum
stances, the fact that it was not an office from
which the articles were seized is of minor import.
Parliament itself, as distinct from the defend
ants whom it charges to administer the law,
appears to be in potential accord with the above
observations. By subsequently enacting subsections
22(1.1), (1.2) and (1.3) of the Act, Parliament
exacts that a warrant shall indeed be obtained, on
ex parte application to a justice of the peace,
where an inspector seeks to enter a "dwelling-
house" and to search for and seize any article
therein. By having enacted section 443.1 of the
Criminal Code, Parliament has provided that in
the investigation of indictable offences if it "be
impracticable to appear personally before a justice
. for a warrant" a peace officer (but not an
inspector under the Act, unless the latter be also
the former) may apply for a telewarrant. Thus the
defendants' contentions on this score are, at least
potentially, foreclosed both ways. Those recent
enactments surely provide a potent criterion
against which the alleged necessity of warrantless
seizures under paragraph 22(1)(d) is found want
ing in contemplation of section 8 of the Charter, as
interpreted by the Supreme Court of Canada in
the Hunter et al. v. Southam Inc. case, and by the
Ontario Court of Appeal in the Rao case.
The importance of prior authorization for seiz
ing anyone's property resides in fairness to that
person. The process of obtaining a warrant, or
telewarrant, creates a record, the enforcer's sworn
information, by means of which the person may,
on good grounds, if any, apply to have the warrant
quashed in appropriate circumstances. Because
Canadian jurisprudence has taken the path of
according the Charter's essentially human rights
to corporate artificial "persons", the recourse is
open equally to individuals, and to corporations
such as the plaintiffs.
If this case be regarded as being on the border
line between regulatory inspections and criminal
investigations, a contention which the Court
rejects, it is therefore on the cutting edge of the
articulation of rights guaranteed by the Charter.
The defendants could hardly invoke section 1
thereof in this regard. So, if there were any doubt
here, the preferable course is to accord the benefit
of it to the plaintiffs and to cleave to the purposive
constitutional imperative of guaranteed rights.
Clearly, then, prior authorization was feasible.
Prior authorization would not have caused an
imbalance in favour of the plaintiff's expectation
of privacy and security of property over the State's
valid objectives of law enforcement and safeguard
ing public safety. Therefore, the warrantless sei
zure was unreasonable, and in contravention of the
Charter, section 8. To that extent, paragraph
22(1)(d) of the Food and Drugs Act is declared to
be, and to have been, of no force or effect.
The seizure is quashed as being unlawful. The
seizure only is declared unconstitutional. The
provisions of paragraphs 22(1)(a), (b) and (c)
provide for the kind of administrative or regulato
ry search or inspection which, according to the
jurisprudence above cited, carries no constitutional
requirement of prior authorization so long as it be
not conducted in, or in relation to, a dwelling-
house or private office. A general office, or vault
or any place where the books, documents or
records mentioned in paragraph 22(1)(c) can be
found also escapes the requirement of prior
authorization, for the searching for, and inspecting
of, those items on business premises is an adminis
trative or regulatory search or inspection. Jamie-
son's articles are to be returned to it, and Swiss
Herbal's articles are to be released from their
"voluntary seizure". This is, to a large extent, a
moral victory only for the plaintiffs, for their
products which are, or contain, the eight listed
amino acids remain firmly subjected to the entirely
valid new drug regulations. Their moral victory,
however, relieves them of any obligation to pay the
defendants' costs of these proceedings. The defend
ants' confusion and disarray in dealing with the
plaintiffs, as well as the defendants' conduct after
the institution of these actions gives them no jus
tifiable claim for costs against the plaintiffs.
SUMMARY OF CONCLUSIONS
Jamieson's action T-2853-84 is dismissed without
costs for or against any party. The Food and
Drugs Act's impugned DIN regulations C.01.014 to
C.01.014.4 inclusive are intra vires of Parliament.
The manner in which they were applied to the
plaintiff, although inept, was not unfair, unreason
able nor discriminatory, nor did it create any
flagrant injustice. The plaintiff Jamieson is not
entitled to receive a DIN for the product "Stress
Ease with Vitamins and Minerals" with L-trypto-
phan as an ingredient, since such a product would
be a new drug pursuant to regulation C.08.001.
The three plaintiffs' action T-2968-84 is disposed
of as follows: the plaintiffs' prayers for declara
tions expressed in paragraphs a), b), d) and the
alternative prayer for relief, in their re-amended
statement of claim filed on December 16, 1986,
are dismissed; subparagraph 25 (1) (o) (ii) of the
Food and Drugs Act and regulations C.08.001 to
C.08.011 are intra vires of Parliament and those
regulations are intra vires of the Governor General
in Council. The eight isolated amino acids, and the
amino acid products comprehended in paragraph
10 of the statement of claim, but specified in
paragraph 22 of the statement of defence, are
"new drugs" within the meaning of the Food and
Drugs Act and regulations thereunder. The
manner in which they were applied to the plain
tiffs, although inept, was not unfair, unreasonable
nor discriminatory, nor did it create any flagrant
injustice; and the plaintiffs' prayer for a declara
tion expressed in paragraph c) of their said state
ment of claim is granted in these terms:
... the seizure of articles conducted on December 17, 1984, by
the defendant Director, and the inspectors, officials and any
other public servants who were then members of his staff or
otherwise authorized to effect such seizures, was and is illegal,
null and void, in particular, in that said seizure was unreason
able and contravened section 8 of the Canadian Charter of
Rights and Freedoms.
There will be a consequent order that the defend
ants, their inspectors, officials and subordinate
staff shall return to the plaintiff Jamieson all the
articles seized on and from its premises on Decem-
ber 17, 1984, unless there be some extraneous
lawful reason for not so doing, and they shall
release from "voluntary seizure" all of Swiss Her-
bal's articles so held on and from December 17,
1984, unless there be some extraneous lawful
reason for not so doing.
The parties' having achieved mixed success in
action T-2968-84, the defendants shall pay to the
plaintiffs, and the latter are awarded, seventy per
cent (70%) of the said plaintiffs' party-and-party
costs of and incidental to this action, after taxa
tion, or, as the parties may agree, should the
defendants elect to waive taxation of costs. All
three plaintiffs having engaged the same firm of
lawyers in this action (and Jamieson's other soli
tary action), full counsel fees shall be calculated
and taxed as for two primary counsel, (i.e. double
counsel fee) but only once, and not times-three, of
which one calculation, 70% as noted above, is
included in the costs to be paid by the defendants
to the plaintiffs.
Judgments will be separately formulated and
entered respectively in each action, and a copy of
these reasons for judgment shall be lodged in both
files.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.