APPEAL ALLOWED

R. v. Comeau, 2018 SCC 15 – Constitutional law — Interprovincial trade — Provincial offences

On appeal from a judgment of the New Brunswick Court of Appeal (2016 CanLII 73665) dismissing an application for leave to appeal a decision of LeBlanc Prov. Ct. J. (2016 NBPC 3) declaring s. 134(b) of the Liquor Control Act, R.S.N.B. 1973, c. L‑10, of no force or effect with respect to Mr. Comeau.

Together with other provisions of the New Brunswick Liquor Control Act, s. 134(b) makes it an offence to “have or keep liquor” in an amount that exceeds a prescribed threshold purchased from any Canadian source other than the New Brunswick Liquor Corporation. C is a resident of New Brunswick who entered Quebec, visited three different stores, and purchased quantities of alcohol in excess of the applicable limit. Returning from Quebec to New Brunswick, C was stopped by the RCMP; he was charged under s. 134(b) and was issued a fine. C challenged the charge on the basis that s. 121 of the Constitution Act, 1867 — which provides that all articles of manufacture from any province shall be “admitted free” into each of the other provinces — renders s. 134(b) unconstitutional. The trial judge found s. 134(b) to be of no force and effect against C and dismissed the charge. The Court of Appeal dismissed the Crown’s application for leave to appeal.

Held (9-0): The appeal should be allowed. Section 134(b) of the Liquor Control Act does not infringe s. 121 of the Constitution Act, 1867.

Common law courts are bound by authoritative precedent. Subject to extraordinary exceptions, a lower court must apply the decisions of higher courts to the facts before it. A legal precedent may be revisited if new legal issues are raised as a consequence of significant developments in the law, or if there is a change in the circumstances or evidence that fundamentally shifts the parameters of the debate. Not only is the exception narrow, it is not a general invitation to reconsider binding authority on the basis of any type of evidence. For a binding precedent from a higher court to be cast aside, the new evidence must fundamentally shift how jurists understand the legal question at issue.

This high threshold was not met in this case. The trial judge relied on evidence presented by an historian whom he accepted as an expert. The trial judge accepted the expert’s description of the drafters’ motivations for including s. 121 in the Constitution Act, 1867, and the expert’s opinion that those motivations drive how s. 121 is to be interpreted. Neither class of evidence constitutes evolving legislative and social facts or a comparable fundamental shift; the evidence is simply a description of historical information and one expert’s assessment of that information. The trial judge’s reliance on the expert’s opinion of the correct interpretation of s. 121 was erroneous. To depart from precedent on the basis of such opinion evidence is to cede the judge’s primary task to an expert. And to rely on such evidence to rebut stare decisis is to substitute one expert’s opinion on domestic law for that expressed by appellate courts in binding judgments. This would introduce the very instability in the law that the principle of stare decisis aims to avoid.

The modern approach to statutory interpretation provides a guide for determining how “admitted free” in s. 121 should be interpreted. The text of the provision must be read harmoniously with the context and purpose of the statute. Constitutional texts must be interpreted in a broad and purposive manner and in a manner that is sensitive to evolving circumstances. Applying this framework to s. 121, the text, historical context, legislative context, and underlying constitutional principles do not support the contention that s. 121 should be interpreted as prohibiting any and all burdens on the passage of goods over provincial boundaries, essentially imposing an absolute free trade regime within Canada. Rather, these considerations support a flexible, purposive view of s. 121 — one that respects an appropriate balance between federal and provincial powers.

With respect to the text of s. 121, the phrase “admitted free” is ambiguous, and falls to be interpreted on the basis of the historical, legislative and constitutional contexts. To achieve economic union, the framers of the Constitution agreed that individual provinces needed to relinquish their tariff powers. The historical context supports the view that, at a minimum, s. 121 prohibits the imposition of charges on goods crossing provincial boundaries — tariffs and tariff‑like measures. But the historical evidence nowhere suggests that provinces would lose their power to legislate under s. 92 of the Constitution Act, 1867 for the benefit of their constituents even if that might have impacts on interprovincial trade.

As well, the legislative context of s. 121 indicates that it was part of a scheme that enabled the shifting of customs, excise, and similar levies from the former colonies to the Dominion; that it should be interpreted as applying to measures that increase the price of goods when they cross a provincial border; and that it should not be read so expansively that it would impinge on legislative powers under ss. 91 and 92 of the Constitution Act, 1867.

In addition, foundational principles underlying the Constitution may aid in its interpretation. In this case, the federalism principle is vital. It recognizes the autonomy of provincial governments to develop their societies within their respective spheres of jurisdiction and requires a court interpreting constitutional texts to consider how different interpretations impact the balance between federal and provincial interests. Reading s. 121 to require full economic integration would significantly undermine the shape of Canadian federalism, which is built upon regional diversity within a single nation. The need to maintain balance embodied in the federalism principle supports an interpretation of s. 121 that prohibits laws directed at curtailing the passage of goods over interprovincial borders, but allows legislatures to pass laws to achieve other goals within their powers, even though the laws may have the incidental effect of impeding the passage of goods over interprovincial borders.

The lines of jurisprudential authority about the ambit of s. 121 can be distilled into two related propositions. First, the purpose of s. 121 is to prohibit laws that in essence and purpose restrict or limit the free flow of goods across the country. Second, laws that pose only incidental effects on trade as part of broader regulatory schemes not aimed at impeding trade do not have the purpose of restricting interprovincial trade and hence do not violate s. 121. Therefore, s. 121 does not catch burdens on goods crossing provincial borders that are merely incidental effects of a law or scheme aimed at some other purpose. To prohibit incidental impacts on cross‑border trade would allow s. 121 to trump valid exercises of legislative power, and create legislative hiatuses where neither level of government could act.

It follows that a claimant alleging that a law violates s. 121 must establish that the law in essence and purpose restricts trade across a provincial border. The law must impact the interprovincial movement of goods like a tariff, which, in the extreme, could be an outright prohibition. The claimant must establish that the law imposes an additional burden on goods by virtue of them coming in from outside the province. And, restriction of cross‑border trade must be the primary purpose of the law, thereby excluding laws enacted for other purposes, such as laws that form rational parts of broader legislative schemes with purposes unrelated to impeding interprovincial trade.

In this case, s. 134(b) impedes liquor purchases originating anywhere other than the New Brunswick Liquor Corporation. In essence, it functions like a tariff, even though it may have other purely internal effects. However, the text and effects are aligned and suggest the primary purpose of s. 134(b) is not to impede trade, but rather to restrict access to any non‑Corporation liquor, not just liquor brought in from another province. The objective of the New Brunswick regulatory scheme is not to restrict trade across a provincial boundary, but to enable public supervision of the production, movement, sale, and use of alcohol within New Brunswick. Finally, s. 134(b) is not divorced from the objective of the larger scheme. It plainly serves New Brunswick’s choice to control the supply and use of liquor within the province. The primary purpose of s. 134(b) is to prohibit holding excessive quantities of liquor from supplies not managed by the province. While one effect of s. 134(b) is to impede interprovincial trade, this effect is only incidental in light of the objective of the provincial scheme in general. Therefore, while s. 134(b) in essence impedes cross‑border trade, this is not its primary purpose. Section 134(b) does not infringe s. 121 of the Constitution Act, 1867.

Reasons for judgment: The Court

Neutral Citation: 2018 SCC 15

Docket Number: 37398

https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/17059/index.do

APPLICATIONS FOR LEAVE TO APPEAL DISMISSED

37901

Lihong Yang v. Her Majesty the Queen (B.C.)

Criminal Law

On April 7, 2016, Ms. Yang was charged with criminal harassment. She filed a number of appeals and applications in the Supreme Court of British Columbia from orders granted by the Provincial Court of British Columbia. On February 22, 2017, the Crown directed a stay of proceedings. Before the Supreme Court of British Columbia, Ms. Yang withdrew most of her appeals and applications. The motion judge dismissed an application for costs and dismissed all appeals and applications not withdrawn. The Court of Appeal dismissed an application for leave to appeal and for an appointment of counsel.

37786

Julie Madeline McDonald v. Sylvia Mcdonald as Executor of the Estate of Samuel Alexander McDonald and Sylvia McDonald (B.C.)

Restitution – Unjust enrichment

The McDonald family has operated a dairy farm on Nicomen Island, near Mission, British Columbia for generations. Samuel and Sylvia McDonald had four children, Julie (the applicant), Robert, Brian and Dean. Samuel and Sylvia owned and operated the farm while the children were growing up. Up until the time they graduated from high school, the children performed unpaid chores on the farm. When Julie, Brian and Dean learned that their parents had given the farm to their brother, Robert, and that their own inheritances would be limited to redeemable preferred shares, they launched lawsuits. They claimed a right to be compensated for their childhood and early adulthood work. Specifically, they sought a monetary award based on the current value of the farm and its assets.

The Supreme Court of British Columbia allowed the claims for unjust enrichment, but only in respect of the unpaid work performed as teenagers, awarding $350,000 in damages to each plaintiff, to be set-off against the value of any preferred shares in the farm they may inherit upon their mother’s death. The Court of Appeal allowed the respondents’ appeal, setting aside the damages award and dismissing the claims for unjust enrichment. The applicant’s appeal on the issue of the set-off was also dismissed.

 

37800

Laura MacNutt/PIER 101 Home Designs Inc. v. Acadia University, T.A. Scott Architecture + Design Limited (3278638), Troy Scott (N.S.)

Intellectual property — Copyright — Infringement

The applicant, Ms. MacNutt, is a building designer. She and her company (PIER 101 Home Designs Inc.) agreed to provide the respondent Acadia University with a promotional rendering and concept drawings for a potential building expansion, for a fixed fee. The University then used Ms. MacNutt’s drawings for presentation purposes to help with fundraising efforts for the project. Once funding had been secured, the University retained the respondent Troy Scott, and his company, the respondent T.A. Scott Architecture + Design Limited, to proceed with the project. Ms. MacNutt discovered that a newspaper concerning a public information meeting about the project included an image of Ms. MacNutt’s drawings, but did not credit her as the author of the drawings. Ms. MacNutt alleges that the respondents infringed her copyright in the drawings.

The application judge dismissed Ms. MacNutt’s application for copyright infringement, finding that Ms. MacNutt failed to establish that the respondents were involved in any unauthorized taking of her original drawings, as the Scott design was separate and distinct from Ms. MacNutt’s design. The Court of Appeal denied Ms. MacNutt’s motion to adduce fresh evidence in support of her complaint that the application judge failed to respect the principles of natural justice, and dismissed this ground of appeal. The Court of Appeal also dismissed Ms. MacNutt’s appeal on the merits, finding no reviewable error in the application judge’s decision or his findings of fact.

37922

Tarek Hady Lotfy v. Her Majesty the Queen (B.C.)

Criminal law — Arrest — Offence — Elements of Offence

Mr. Lotfy was stopped for speeding. Constable Innes observed (a) Mr. Lotfy’s unusual nervousness; (b) the strong odour of air freshener detected when he first spoke with Mr. Lotfy; and (c) the slight odour of vegetative marihuana detected when he spoke with Mr. Lotfy the second time. Constable Innes arrested Mr. Lotfy for possession for the purpose of trafficking and again advised him of his rights. The trial judge found the arrest lawful. Mr. Lotfy was convicted of possession of marihuana for the purpose of trafficking. The conviction appeal was dismissed.