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06 December 2005
A recent Supreme Court of Canada decision in British Columbia v Imperial Tobacco Canada Ltd (2005 SCC 49) has authoritatively resolved the issue of whether there are constitutional limits on the ability of legislature (federal or provincial) to enact retroactive legislation. In addition, the court has made an important contribution to the understanding of the requirements under the Canadian constitutional law of judicial independence and right to a fair trial.(1) In all three respects, Imperial Tobacco is a significant decision that resolves previously existing uncertainties under Canadian law.
Imperial Tobacco concerned the constitutional validity of a British Columbia statute: the Tobacco Damages and Healthcare Costs Recovery Act. The act creates a new statutory cause of action in favour of the British Columbian government against manufacturers of tobacco products to recover the costs of past, present and future healthcare benefits caused or contributed to by a tobacco-related wrong.(2) A 'tobacco-related wrong' is defined by the act as: (i) a tort committed in British Columbia by manufacturers of tobacco products which causes or contributes to a disease resulting from exposure to a tobacco product; or (ii) a breach of a common law, equitable or statutory duty, or obligation owed by a manufacturer of tobacco products to persons in British Columbia who have been, or might become, exposed to a tobacco product.
The act allows the government to pursue its claim on an aggregate basis with respect to those for whom the government has made, or can reasonably be expected to make, healthcare expenditures. Where the government asserts an aggregate claim, it may use statistical, epidemiological and sociological evidence to prove its case and it need not identify, prove the cause of disease in or prove the cost of healthcare benefits for any individual person on which it bases its claim.
In addition, healthcare records and similar documents relating to particular individuals are not compellable except if relied on by an expert witness. However, the court may order discovery of a statistically meaningful sample of healthcare records of individuals, with personal identifying data deleted.
The act also establishes a reverse burden of proof with respect to certain elements of an aggregate claim. If the government proves that a tobacco manufacturer breached a common law, equitable or statutory duty or obligation owed to persons in British Columbia who have been or might become exposed to a particular type of tobacco product, that exposure to that type of tobacco product can cause or contribute to disease, and that during the manufacturer's breach of duty or obligation, the type of tobacco product manufactured by the manufacturer was offered for sale in British Columbia, then the court must presume that: (i) the population of those exposed to the type of tobacco products manufactured by the manufacturer would not have been exposed to the product but for the manufacturer's breach; and (ii) that exposure caused or contributed to disease or the risk of disease in a portion of that population. The presumption the court must make does not apply when the tobacco manufacturer shows, on the balance of probabilities, that its breach of duty did not cause or contribute to the exposure, or that the exposure did not cause or contribute to the disease or the risk of disease.
The act expressly states that it operates retroactively for all purposes, including allowing an action to be brought under it regardless of when the manufacturer's tobacco-related wrong occurred. In addition, no action commenced within two years of the act coming into force is barred by the usual statutory limitation periods.
The British Columbian government commenced an action under the act against a number of tobacco manufacturers as soon as it came into force. The tobacco manufacturers challenged the constitutional validity of the act on numerous grounds.
The Supreme Court clearly and unequivocally held that - except in the area of criminal law(3) - there is no constitutional requirement of legislative prospectivity. While there is a presumption of statutory interpretation that a statute should not be given retroactive effect, the court confirmed that if the intended retroactive effect is expressed sufficiently clearly, as in the case of the act, the statute is effective according to its terms.
The Supreme Court acknowledged that retroactive legislation can overturn settled expectations and may sometimes be perceived as unjust. Nevertheless, it held that - except in the area of criminal law - there is no constitutional impediment to retroactive legislation. This is equally the case where the retroactive legislation is aimed at a particular industry or other group and confers special privileges on the government.
The tobacco manufacturers argued that the act violates the fundamental constitutional principle of judicial independence because it contains rules that fundamentally interfere with the court's adjudicative role in hearing an action commenced under the act. More particularly, the manufacturers argued that the act requires the court to make irrational presumptions and subverts the court's ability to discover relevant facts by making various healthcare records and similar documents not compellable. It was their position that these provisions impinge on the court's fact-finding function and virtually guarantee success for the government in any claim brought under the act.
The Supreme Court began its consideration of this point by noting that, in the court's view, the provisions complained about by the tobacco manufacturers were not as unfair or illogical as they submitted. However, the court indicated that this was beside the point; the relevant question is not whether the act's provisions are unfair or illogical (or whether they differ from those applicable in common law tort actions), but whether they interfere with the court's adjudicative role and, thereby, judicial independence.
The court referred to a number of its previous decisions in which it had determined that security of judicial tenure, financial security and administrative independence are the three core characteristics or essential conditions of judicial independence. However, it noted that even where these conditions exist (and are reasonably seen to exist), the critical question relevant to a determination of whether judicial independence has been interfered with is whether the court is free, and reasonably seen to be free, to perform its adjudicative function without interference, including interference from the executive and legislative branches of government.
The court concluded that nothing in the act interferes with judicial independence as it is defined for the purposes of Canadian law. It concluded that the primary role of the judiciary is:
The judiciary's role is not to apply only the law of which it approves or to
decide cases with a view to what the judiciary, rather than the law, deems fair
or pertinent. Further, the court commented that the judiciary should not second-guess
law reform undertaken by legislatures, whether such reform is to the procedural
or substantive law. Rather, within the limits set by the constitution, legislatures
can set the law as they see fit.
In order for legislation to interfere unconstitutionally with the court's adjudicative role and, hence, judicial independence, more is required than an allegation that the legislation is irrational or unfair or prescribes rules different from those developed at common law.
The court concluded that a court trying an action brought under the act always retains its adjudicative role and the ability to exercise that role without interference. It will independently assess the applicability of the act to the claim, the evidence before it and whether the evidence supports a finding of liability. The fact that the act shifts onuses of proof or limits the compellability of information does not interfere, or appear to interfere, with the court's adjudicative role or the essential conditions of judicial independence. Rather, as the court noted, judicial independence "can abide unconventional rules of civil procedure and evidence".
Right to a fair trial
The court also rejected the tobacco manufacturers' arguments that there is a constitutional entitlement to a fair civil trial, largely on the basis that such an entitlement is not provided for in any written part of the Canadian constitution (which does establish(4) a constitutional right to a fair and public hearing in criminal matters). If there were an unwritten constitutional right to a fair trial in all circumstances, that would render the limited scope of the written constitutional protection with respect to criminal trials redundant, thereby undermining the limits identified by those framing the written parts of the constitution.
In any event, the court concluded that tobacco manufacturers sued pursuant
to the act will receive a fair civil trial as that concept is traditionally
understood because: (i) they may contest the claims of the plaintiff and adduce
evidence in their defence; and (ii) the court will determine liability only
following the hearing, based solely on its understanding of the law as applied
to its findings of fact. Any such trial is not rendered unfair because the tobacco
manufacturers may regard the act as unjust or the procedure it prescribes unprecedented.
There has been much debate in Canada concerning the extent to which the Canadian Constitution provides substantive protection against, among other things, retroactive legislation and legislation that alters the fundamental premises of Canadian law. In Imperial Tobacco the Supreme Court has addressed several of these issues clearly and conclusively. At least for the foreseeable future, it appears to be established that - except in criminal law - there is no constitutional protection against retroactive legislation or legislation that may be perceived to alter significantly the usual rules, whether substantive or procedural, applied by the law.
For further information on this topic please contact Christopher D Woodbury at Fraser Milner Casgrain LLP by telephone (+1 416 863 4396) or by fax (+1 416 863 4592) or by email (email@example.com).
(1) The Supreme Court's decision in
Imperial Tobacco deals with a further constitutional issue concerning the
ability of provincial legislatures to enact legislation with extra-provincial
implications. That issue is not addressed by this update.
(2) In British Columbia, as in the other Canadian provinces, healthcare is provided by a government-funded system with the result that the British Columbian government provides healthcare benefits to the residents of British Columbia.
(3) Section 11(g) of the Canadian Charter of Rights and Freedoms provides that someone charged with an offence has the right not to be found guilty on account of any act or omission unless, at the time of the act or omission, it constituted an offence under Canadian or international law, or was criminal according to the general principles of law recognized by the community of nations.
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Christopher D Woodbury