Davies et al. v. Ontario College of Pharmacists [Indexed as: Davies v. Ontario College of Pharmacists]

63 O.R. (3d) 122

[2003] O.J. No. 91

Divisional Court File No. 45/02

Ontario Superior Court of Justice

Divisional Court

R.A. Blair R.S.J., E. Macdonald and B. MacDougall JJ.

January 15, 2003

Professions -- Pharmacists -- Corporation through which two pharmacists carried on their pharmacy business convicted of income tax evasion [page123] in connection with undeclared volume rebates received from drug companies -- Discipline Committee of College of Pharmacists finding pharmacists guilty of engaging in conduct relevant to practice of pharmacy that would reasonably be regarded by members of profession as disgraceful, dishonourable and/or unprofessional contrary to regulation under Pharmacy Act -- Standard of review of College's decision that of reasonableness simpliciter -- College's conclusions that pharmacists could not hide behind corporate veil of corporation through which they carried on their practice and that impugned conduct was relevant to practice of pharmacy being reasonable -- Pharmacy Act, 1991, S.O. 1991, c. 36 -- O. Reg. 681/93.

A corporation of which the appellant pharmacists were the only officers and directors and through which they carried on their pharmacy business was convicted of income tax evasion from undeclared volume rebates received from drug companies. After the conviction, the appellants were charged with professional misconduct pursuant to s. 51(1)(c) of the Health Professions Procedural Code and clauses 2 and 30 of s. 1 of O. Reg. 681/93 made under the Pharmacy Act, 1991, S.O. 1991, c. 36. The Discipline Committee of the respondent College found the appellants guilty of professional misconduct under clause 30, which covers "engaging in conduct or performing an act relevant to the practice of pharmacy that, having regard to all the circumstances, would reasonably be regarded by members of the profession as disgraceful, dishonourable or unprofessional". The appellants appealed, arguing that a member of the College who is a shareholder, officer or director of a corporation that conducts the business of pharmacy in a manner that contravenes the Income Tax Act does not engage in conduct that is relevant to the practice of pharmacy.

Held, the appeal should be dismissed.

The standard of review of the Committee's decision was that of reasonableness. While there was no operative privative clause and the appellants had a right of appeal to the Divisional Court on questions of law or fact or both, disciplinary bodies of self-governing professions should be given a large degree of autonomy and their decisions should not be interfered with unless judicial intervention is clearly warranted. The factors of tribunal expertise, the purpose of the legislation and the nature of the problem to be addressed all pointed toward considerable deference to the Committee. A standard of patent unreasonableness would be too high, however, and would not give sufficient weight to the lack-of-privative- clause/appeal factor.

There is authority for the proposition that practising pharmacy involves more than merely dispensing pharmaceutical products. It was not unreasonable for the Committee to have concluded that the appellants' participation in their closely- held corporation's tax evasion scheme was conduct that reflected adversely on the profession as well as on themselves and could therefore be characterized as conduct "relevant to the practice of pharmacy" that "would reasonably be regarded by the members of the profession as disgraceful, dishonourable and/or unprofessional". The Committee concluded that the scope of clause 30 of s. 1 of the Regulation is broad and that its meaning is not limited by the preceding 29 descriptive acts of professional misconduct. Given the regulatory framework governing the pharmacy profession, including particularly the provisions of clause 30, it was not unreasonable for the Committee to have adopted the "catch-all" approach that it did to that clause.

APPEAL from a decision of the Discipline Committee of the Ontario College of Pharmacists.

Cases referred to Canada (Director of Investigation and Research) v. Southam Inc., 1997 385 (SCC), [1997] 1 S.C.R. 748, 144 D.L.R. (4th) 1, 209 N.R. 20, 71 C.P.R. (3d) 417; [page124] College of Physicians and Surgeons (Ontario) v. Deitel (1997), 99 O.A.C. 241, [1997] O.J. No. 1866 (Quicklaw) (Div. Ct.); College of Physicians and Surgeons v. Kohari, [1983] O.J. No. 1041 (Quicklaw) (Div. Ct.); Milstein and Ontario College of Pharmacy (No. 2) (Re) (1978), 1978 1294 (ON CA), 20 O.R. (2d) 283, 87 D.L.R. (3d) 392, 2 L. Med. Q. 297 (C.A.), affg in part (1976), 1976 686 (ON SC), 13 O.R. (2d) 700, 72 D.L.R. (3d) 201 (Div. Ct.); Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services) (2002), 2002 17842 (ON CA), 62 O.R. (3d) 305, [2002] O.J. No. 4407 (Quicklaw) (C.A.); Muggoo v. Ontario College of Pharmacists, [1982] O.J. No. 1389 (Quicklaw) (Div. Ct.); Patel v. Ontario College of Pharmacists, [2000] O.J. No. 256 (Quicklaw) (Div. Ct.); Pearlman v. Manitoba Law Society Judicial Committee, 1991 26 (SCC), [1991] 2 S.C.R. 869, 75 Man. R. (2d) 81, 84 D.L.R. (4th) 105, 130 N.R. 121, [1991] 6 W.W.R. 289, 6 C.R.R. (2d) 259; Pezim v. British Columbia (Superintendent of Brokers), 1994 103 (SCC), [1994] 2 S.C.R. 557, 92 B.C.L.R. (2d) 145, 114 D.L.R. (4th) 385, 168 N.R. 321, 14 B.L.R. (2d) 217 (sub nom. Ivany v. British Columbia); Prescott (Re) (1971), 1971 1147 (BC CA), 19 D.L.R. (3d) 446, [1971] 4 W.W.R. 433 (B.C.C.A.); Przysuski v. College of Opticians of Ontario (1996), 1996 12490 (ON SCDC), 133 D.L.R. (4th) 280 (Ont. Div. Ct.); Pushpanathan v. Canada (Minister of Citizenship and Immigration), 1998 778 (SCC), [1998] 1 S.C.R. 1222, [1998] 1 S.C.R. 982, 160 D.L.R. (4th) 193, 226 N.R. 201; Qureshi and Nova Scotia Medical Board (Re) (1984), 1984 2959 (NS CA), 63 N.S.R. (2d) 74, 8 D.L.R. (4th) 476, 141 A.P.R. 74 (C.A.), affg (1983), 1983 2833 (NS SC), 61 N.S.R. (2d) 280, 4 D.L.R. (4th) 326, 133 A.P.R. 280 (S.C.); Stout v. College of Pharmacy (Ontario) (1977), 1977 1226 (ON CA), 15 O.R. (2d) 650, 76 D.L.R. (3d) 441 (C.A.), affg (1976), 1976 706 (ON SC), 12 O.R. (2d) 748, 70 D.L.R. (3d) 181 (Div. Ct.) Statutes referred to Health Disciplines Act, R.S.O. 1990, c. H.4, s. 134(3)(a), (b) Health Professions Procedural Code, S.O. 1991, c. 18, Sched. 2, ss. 51(1)(c), 70(1) Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) Pharmacy Act, 1991, S.O. 1991, c. 36, s. 3 Regulated Health Professions Act, 1991, S.O. 1991, c. 18 Rules and regulations referred to O. Reg. 681/93 ("Pharmacy Act, 1991"), s. 1 R.R.O. 1990, Reg. 551, s. 47(x) Rules of Civil Procedure, R.R.O. 1990, Reg. 194 Authorities referred to Steinecke, R., A Complete Guide to the Regulated Health Professions Act, looseleaf (Aurora, Ont.: Canada Law Book, 2002)

W.A. Kelly, Q.C., for appellants. Michael Birley, for respondent.

BLAIR R.S.J.: --

Background

[1] The appellants are pharmacists and members of the respondent College. They are also shareholders and the only officers and directors of Rissi-Davies Pharmacies Ltd., a company that operates pharmacies in Flesherton, Markdale and Owen Sound. [page125]

[2] In 1997, the company was convicted of income tax evasion under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) in proceedings relating to undeclared volume rebates received from drug companies. At the time of the conviction the trial judge highlighted the involvement of Mr. Rissi and Mr. Davies in the matter.

[3] Following the company's conviction, the appellants were charged with professional misconduct pursuant to subsection 51(1)(c) of the Health Professions Procedural Code (the "Code") and clauses 2 and 30 of s. 1 of Ontario Regulation 681/93 made under the Pharmacy Act, 1991. [See Note 1 at end of document] Subsection 51(1)(c) states:

51(1) A panel shall find that a member has committed an act of professional misconduct if,

(c) the member has committed an act of professional misconduct as defined in the regulations.

[4] Section 1 of Ontario Regulation 681/93 defines the following acts as acts of professional misconduct for the purposes of subsection 51(1)(c) of the Code:

2. Failing to maintain a standard of practice of the profession.

3. Engaging in conduct or performing an act relevant to the practice of pharmacy that, having regard to all the circumstances, would reasonably be regarded by members of the profession as disgraceful, dishonourable or unprofessional.

[5] The particulars provided with respect to the professional misconduct charges were as follows:

1. Mr. Davies and Mr. Rissi were at all material times a shareholder, director and officer of Rissi-Davies Pharmacies Ltd. Between the period June 1, 1989 and August 31, 1992, Rissi-Davies Pharmacies Ltd. wilfully evaded or attempted to evade the payment of tax in the amount of $10,089.05 imposed by the Income Tax Act, R.S.C. 1985, c. 1 (5th supp.) as amended, by failing to report income of Rissi-Davies Pharmacies Ltd. in the amount of $48,696.53 for the taxation years 1990, 1991 and 1992 contrary to section 39(1)(d) of the Income Tax Act.

2. In the taxation years 1990, 1991 and 1992 Mr. Davies and Mr. Rissi were paid volume rebates by Apotex Inc. and Novapharm Inc., which were properly income of Rissi-Davies Pharmacies Ltd. [page126]

3. The contravention set out in paragraph 1 above, constitutes conduct or acts relevant to the practice of pharmacist [sic] which constitutes [conduct] that, having regard to all of the circumstances, would reasonably be regarded by members of the profession as disgraceful, dishonourable or unprofessional. Further, they are relevant to a member's suitability to practice.

[6] The Discipline Committee of the College of Pharmacy (the "College") found the appellants guilty of professional misconduct under clause 30, reprimanded them, and suspended each of them from practice for a period of three weeks. They appeal from that disposition.

The Standard of Review

[7] The appellants submit that the standard of review is "correctness" because there is a statutory right of appeal and what is involved is a matter of statutory construction and, therefore, a matter of law. The College submits the Discipline Committee is entitled to considerable deference in determining what constitutes professional misconduct.

[8] We agree with counsel for the College. The standard of review, in our opinion, is "reasonableness", notwithstanding what is involved is a matter of statutory interpretation.

[9] Here, there is no operative privative clause, and the appellants do have a right of appeal to the Divisional Court from the decision of the Discipline Committee on questions of law or fact or both: the Code, s. 70(1). However, the Supreme Court of Canada has said that disciplinary bodies of self- governing professions should be given a large degree of autonomy and their decisions should not be interfered with "unless judicial intervention is clearly warranted": Pearlman v. Manitoba Law Society Judicial Committee, 1991 26 (SCC), [1991] 2 S.C.R. 869, 84 D.L.R. (4th) 105, at p. 888 S.C.R. Furthermore, in Pezim v. British Columbia (Supt. of Brokers), 1994 103 (SCC), [1994] 2 S.C.R. 557, 114 D.L.R. (4th) 385, at p. 591 S.C.R., the Supreme Court of Canada stated:

Consequently, even where there is no privative clause and where there is a statutory right to appeal, the concept of the specialization of duties requires that deference be shown to decisions of specialized tribunals on matters which fall squarely within the tribunal's expertise.

[10] See also Canada (Director of Investigation and Research) v. Southam Inc., 1997 385 (SCC), [1997] 1 S.C.R. 748, 144 D.L.R. (4th) 1, at p. 767 S.C.R. In Re Milstein and Ontario College of Pharmacy (No. 2) (1976), 1976 686 (ON SC), 13 O.R. (2d) 700, 72 D.L.R. (3d) 201 (Div. Ct.) at p. 707 O.R., Cory J. (as he then was) expressed the essence of the rationale behind the need for deference towards self- governing discipline bodies in the following fashion: [page127]

One of the essential indicia of a self-governing profession is the power of self-discipline. That authority is embodied in the legislation pertaining to the profession. The power of self-discipline perpetuated in the enabling legislation must be based on the principle that members of the profession are uniquely and best qualified to establish the standards of professional conduct. Members of the profession can best determine whether the conduct of a fellow member has fallen below the requisite standards and determine the consequences. The peers of the professional person are deemed to have and, indeed, they must have special knowledge, training and skill that particularly adapts them to formulate their own professional standards and to judge the conduct of a member of their profession. No other body could appreciate as well the problems and frustrations that beset a fellow member.

[11] The above passage captures three of the four factors the courts are to assess in determining the proper standard of review of a decision of an administrative tribunal through application of the "pragmatic and functional approach" described in cases such as Pushpanathan v. Canada (Minister of Citizenship and Immigration), 1998 778 (SCC), [1998] 1 S.C.R. 982, 160 D.L.R. (4th) 193. As Goudge J.A. noted in Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services) (2002), 2002 17842 (ON CA), 62 O.R. (3d) 305, [2002] O.J. No. 4407 (Quicklaw) (C.A.), "[t]hat approach focuses on the fundamental question of whether the issue before the Tribunal was one that was intended by the legislators to be left to the exclusive decision of that Tribunal" (para. 26). Here, the factors of tribunal expertise, the purpose of the legislation, and the nature of the problem to be addressed -- three of the four factors to be considered -- all point toward considerable deference to the Discipline Committee. As Pearlman and Pezim indicate, even where there is no privative clause -- the presence or absence of which is the fourth factor to be considered -- and where there is a statutory right of appeal, a tribunal's specialized duties and expertise give rise to deference. A standard of "patent unreasonableness" would be too high, however, and would not give sufficient weight to the lack-of-privative-clause/appeal factor. We therefore conclude that the appropriate standard of review in the circumstances of this case is that of reasonableness simpliciter.

The Problem and the Positions of the Parties

[12] In a careful argument Mr. Kelly took the court through an exercise in statutory construction designed to demonstrate that the appellants could not have been found guilty of professional misconduct under clause 30. His submission was that while the corporation, Rissi-Davies Pharmacies Ltd., may have engaged in conduct "relevant to the practice of pharmacy" that fell within the proscription of the regulation, the appellants themselves had not. Breach of a taxing statute by a corporation of which the [page128] members of the College are shareholders, directors or officers, is not "conduct relevant to the practice of pharmacy" on the part of the members. Therefore, he argued, the precondition for the application of clause 30 had not been met.

[13] Mr. Kelly relied upon the definition of "practice of pharmacy" contained in section 3 of the Pharmacy Act, 1991, namely:

3. The practice of pharmacy is the custody, compounding and dispensing of drugs, the provision of non-prescription drugs, health care aids and devices and the provision of information related to drug use.

[14] The argument is that a member of the College who is a shareholder, officer or director of a corporation that conducts the business of pharmacy in a manner that contravenes the Income Tax Act does not engage in conduct that is relevant to the practice of pharmacy, as defined. In addition, by confusing these two concepts, the Discipline Committee erroneously mixed together the notions of "conduct unbecoming a professional" (which this conduct may amount to) and "professional misconduct" (which, it was submitted, the conduct does not amount to).

[15] On behalf of the College, on the other hand, Mr. Birley argued that the Discipline Committee was correct in its interpretation of clause 30 and the Regulation, and that conduct "relevant to the practice of pharmacy" can be broader than the "practice of pharmacy". Citing Stout v. College of Pharmacy (Ontario) (1977), 1977 1226 (ON CA), 15 O.R. (2d) 650, 76 D.L.R. (3d) 441 (C.A.), at p. 655 O.R., p. 447 D.L.R., he submitted that "non-professional conduct encompass[es] more than misconduct in actually filling a prescription." Therefore, Mr. Birley contended, the Discipline Committee was well within its mandate in concluding that participation by members in a tax evasion scheme was "conduct unbecoming".

Analysis

[16] The appellants' argument may not be unreasonable as a matter of statutory interpretation. However, that is not the test. The Discipline Committee need not be "correct" in its interpretation of the regulation. Its interpretation need only be reasonable. The language of a statute may reasonably bear more than one interpretation. Given its expertise and its status as the Discipline Committee of a professional self- governing body, it is in a better position than the court to determine what constitutes professional misconduct. The Discipline Committee's decisions are entitled to considerable deference even in the interpretation of legislation, particularly when that legislation is part of its own statutory and regulatory framework: Re Milstein and College of Pharmacy (Ontario), supra, at p. 707 O.R.; [page129] College of Physicians and Surgeons (Ontario) v. Deitel (1997), 99 O.A.C. 241, [1997] O.J. No. 1866 (Quicklaw) (Div. Ct.), paras. 149-50.

[17] There is authority for the proposition that practising pharmacy involves more than merely dispensing pharmaceutical products. We do not find it unreasonable at all for the Committee to have concluded that the appellants' participation in their closely-held corporation's tax evasion scheme was conduct that reflected adversely on the profession as well as on themselves and could therefore be characterized as conduct "relevant to the practice of pharmacy" that "would reasonably be regarded by the members of the profession as disgraceful, dishonourable and/or unprofessional": see Stout v. College of Pharmacy (Ontario), supra, at pp. 654-55 O.R., pp. 446-47 D.L.R. (member distributing trading stamps in respect of sales of prescription drugs contrary to the Criminal Code and warning from the College); Re Przysuski and College of Opticians of Ontario (1996), 1996 12490 (ON SCDC), 133 D.L.R. (4th) 280 (Ont. Div. Ct.) (rude, condescending and wholly unreasonable conduct towards customers returning defective products); Muggoo v. Ontario College of Pharmacists, [1982] O.J. No. 1389 (Quicklaw) (Div. Ct.) (fraud on creditors regarding the disposition of property); College of Physicians and Surgeons v. Kohari, [1983] O.J. No. 1041 (Quicklaw) (Div. Ct.) (corporation controlled by member making kickbacks to doctors for utilizing its laboratory services); Patel v. Ontario College of Pharmacists, [2000] O.J. No. 256 (Quicklaw) (Div. Ct.) (fraud on insurer respecting the filling of prescriptions); Re Qureshi and Nova Scotia Medical Board (1984), 1984 2959 (NS CA), 8 D.L.R. (4th) 476, 141 A.P.R. 74 (N.S.C.A.) (member convicted under the Income Tax Act in relation to billing practices); Re Prescott (1971), 1971 1147 (BC CA), 19 D.L.R. (3d) 446; [1971] 4 W.W.R. 433 (B.C.C.A.) (member of Law Society found guilty of conduct unbecoming after plea of guilty under the Income Tax Act).

[18] The above authorities demonstrate a much broader approach to the kind of conduct that "relates" to the practice of the profession in question than does the narrow approach urged upon us by Mr. Kelly on behalf of the appellants. In our opinion, the distinction between the notion of "conduct unbecoming" a professional (i.e. conduct unrelated to or outside the practice of the profession but reflecting poorly on the profession and the individual) and "professional misconduct" (i.e. conduct "relating" to the practice of the profession but not strictly involving the actual practice of the profession) is not significant for the purposes of this case. It is true that s. 1 of Ontario Regulation 681/93 defines the impugned conduct as "acts of professional misconduct", and does not refer in the introductory paragraph or in the enumerated "acts" to "conduct unbecoming" a pharmacist. However, that [page130] is no impediment, in our view, to the Discipline Committee's conclusion that as shareholders, directors and officers of Rissi-Davies Pharmacies Ltd., the appellants had engaged in conduct "relevant to the practice of pharmacy that, having regard to all the circumstances, would reasonably be regarded by members as disgraceful, dishonourable or unprofessional".

[19] Mr. Kelly does not take issue with the fact that the conduct in question can reasonably be said to fall into the "disgraceful, dishonourable or unprofessional" category. His argument is simply that those criteria are not engaged because the conduct in question was not "relevant to the practice of pharmacy". In our opinion, it was reasonable for the Discipline Committee to conclude that the appellants could not hide behind the corporate veil of the corporation through which they carry on their pharmacy business for these purposes. The Committee directed its mind to the issue of whether the conduct was "relevant to the practice of pharmacy", and concluded it was for the following reasons: [See Note 2 at end of document]

1. The conduct only involves the sale of pharmaceuticals at Rissi-Davies Pharmacies Ltd. From the sale of the pharmaceuticals, this pharmacy generated income that was not reported.

2. The conviction arose from the evasion of taxes concerning this income.

3. While it was Rissi-Davies Pharmacies Ltd. that was convicted, Mr. John Davies and Peter Rissi were the sole shareholders, officers and directors of this company. They directed the business of this pharmacy.

4. The very essence of the practice of pharmacy is the sale of pharmaceuticals which is the subject matter of this hearing and the criminal conduct.

[20] The Discipline Committee concluded that the scope of clause 30 of s. 1 of the Regulation is broad and that its meaning is not limited by the preceding 29 descriptive acts of professional misconduct. In doing so, the Committee relied upon the following passage in Richard Steinecke, A Complete Guide to the Regulated Health Professions Act, looseleaf (Release 8) (Aurora: Canada Law Book, 2002) at p. 6-68:

Historically, statutes establishing regulators of professions did not define professional misconduct. A century ago, however, courts developed a definition for discipline tribunals to use. The court-developed definition has continued as the catch-all provision for most colleges and prohibits conduct that would reasonably be regarded as dishonourable, disgraceful or unprofessional. The catch-all definition is intended to capture any improper conduct that is not caught by the wording of the specific definitions of professional misconduct.

(Emphasis added) [page131]

[21] Given the regulatory framework governing the pharmacy profession, including particularly the provisions of clause 30 of the Regulation, it was not unreasonable, in our opinion, for the Discipline Committee to have adopted the "catch-all" approach that it did to that clause.

[22] Mr. Kelly referred us to a further passage from the same text, in which the author says: [See Note 3 at end of document]

A number of cases have held that the catch-all provision includes conduct performed outside the actual practice of the profession so long as the conduct affects the member's professional character or integrity. However, the catch-all provision for some professions is worded in such a way as to suggest that only conduct performed while practising the profession is captured by the definition. The wording of the provision will be important in cases involving conduct performed outside professional practice.

(Emphasis added)

[23] He argued that the language of s. 1 of Regulation 681/ 93, and the language of clause 30, fall into the latter category. We do not accept this submission, however. The conduct captured by clause 30 is not simply conduct performed "while practising the profession"; it is conduct "relevant to the practice" of the profession. The language of the Regulation and of clause 30 can reasonably bear the interpretation ascribed to it by the Discipline Committee, and it was not unreasonable for the Committee to make the determination it made.

Disposition

[24] There is therefore no basis upon which this court should interfere with the Discipline Committee's decision. The appeal is dismissed.

[25] The College is entitled to its costs of the appeal, fixed at $3,500 plus disbursements plus GST.

Appeal dismissed.

Notes

Note 1: The formal chain of statutory and regulatory authority for the process is the following. The appellants were charged with professional misconduct pursuant to subsections 134(3)(a) and (b) of the Health Disciplines Act, R.S.O. 1990, c. H.4 and paragraph (x) of s. 47 of Ontario Regulation 551, R.R.O. 1990 and s. 51(1)(c) of the Health Professions Procedural Code being Schedule 2 to the Regulated Health Professions Act, 1991, S.O. 1991, c. 18 as amended, and clauses 2 and 30 of s. 1 of Ontario Regulation 681/93, made under the Pharmacy Act, 1991, S.O. 1991, c. 36.

Note 2: Reasons of the Discipline Committee, at pp. 2-3.

Note 3: Ibid. at p. 6-70