Joshi et al. v. Minister of Health and Long-Term Care

[Indexed as: Joshi v. Ontario (Minister of Health and Long-Term Care)]

Ontario Reports

Ontario Superior Court of Justice,

Divisional Court,

Marrocco A.C.J., Swinton and Corbett JJ.

March 2, 2015

125 O.R. (3d) 384 | 2015 ONSC 1001

Case Summary

Statutes — Interpretation — Minister issuing notice of prohibition under s. 16 of Smoke-Free Ontario Act prohibiting sale of tobacco products at convenience store for six months and requiring that sign be posted to that effect after employees of prior operator were twice convicted of selling tobacco products to minors — Prohibition not applying to present operators of store who were unrelated to prior operator — Prohibition order under s. 16 of Act can only be issued to person who has committed at least one offence under Act — Smoke-Free Ontario Act, S.O. 1994, c. 10, s. 16.

Employees of the prior operator of a convenience store were twice convicted of selling tobacco products to minors. As a result, the minister issued a notice of prohibition under s. 16 of the Smoke-Free Ontario Act prohibiting the sale of any [page385] tobacco products at the store for six months and requiring that a sign be posted to that effect. The applicants, the present operators of the store, were unrelated to the prior operator and did not employ the convicted employees. The minister took the position that the prohibition applied to the place where tobacco was sold to minors and therefore applied to the applicants. The applicants brought an application for judicial review, seeking to quash the minister's decisions regarding the issuance and application of the prohibition.

Held, the application should be allowed.

On its face, s. 16(2) of the Act appears to allow a notice of prohibition to be issued to the person who owns or occupies a place where there have been two convictions for tobacco sales offences to any person in the place within a five-year period. However, s. 16(4), which creates the prohibition, prohibits the sale or storage of tobacco in, or the delivery of tobacco to, the place where tobacco sales offences occurred "during the applicable period". Section 16(5) defines the "applicable period" with reference to "the" person's convictions for tobacco sales offences. The words "the person" in both s. 16(2) and s. 16(5) must have the same meaning in both subsections. There must be at least one conviction of the owner or occupier in the five-year period in order to trigger the prohibition. The prohibition did not apply to the applicants.

Cases referred to

Bapoo v. Co-operators General Insurance Co. (1997), 1997 6320 (ON CA), 36 O.R. (3d) 616, [1997] O.J. No. 5055, 154 D.L.R. (4th) 385, 49 C.C.L.I. (2d) 133, [1998] I.L.R. I-3512, 33 M.V.R. (3d) 135, 76 A.C.W.S. (3d) 414 (C.A.); Belanger v. Canada (1916), 1916 87 (SCC), 54 S.C.R. 265, [1916] S.C.J. No. 63, 20 C.R.C. 343, 34 D.L.R. 221, 25 B.R. 376; Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, [2002] S.C.J. No. 43, 2002 SCC 42, 212 D.L.R. (4th) 1, 287 N.R. 248, [2002] 5 W.W.R. 1, J.E. 2002-775, 166 B.C.A.C. 1, 100 B.C.L.R. (3d) 1, 18 C.P.R. (4th) 289, 93 C.R.R. (2d) 189, REJB 2002-30904; R. v. Che, [1998] O.J. No. 1359 (Div. Ct.); R. v. Seaway Gas & Fuel Ltd. (2000), 2000 2981 (ON CA), 47 O.R. (3d) 458, [2000] O.J. No. 226, 183 D.L.R. (4th) 412, 128 O.A.C. 268, 142 C.C.C. (3d) 213, 45 W.C.B. (2d) 208 (C.A.); Wawanesa Mutual Insurance Co. v. Axa Insurance (Canada) (2012), 112 O.R. (3d) 354, [2012] O.J. No. 4196, 2012 ONCA 592, 296 O.A.C. 199, 354 D.L.R. (4th) 457, 38 M.V.R. (6th) 76, 15 C.C.L.I. (5th) 1, 220 A.C.W.S. (3d) 409

Statutes referred to

Canadian Charter of Rights and Freedoms, ss. 1, 2(b)

Smoke-Free Ontario Act, S.O. 1994, c. 10, ss. 1(1) [as am.], 3 [as am.], (1), (2) [as am.], (4) [as am.], 9(3) [as am.], (4) [as am.], 15, 16 [as am.], (1), (2) [as am.], (4), (5), (a), 18, (1)

Tobacco Control Act, 1994, S.O. 1994, c. 10 [rep. by S.O. 1994, c. 10]

Rules and regulations referred to

O. Reg. 48/06 (Smoke-Free Ontario Act), s. 25(3), (4)

Authorities referred to

Sullivan, Ruth, Sullivan on the Construction of Statutes, 5th ed. (Markham, Ont.: LexisNexis, 2008)

APPLICATION for judicial review of decisions of a minister.

Amy Pressman and Laura K. Bisset, for applicants.

Sunil Mathai and Bruce Ellis, for respondent. [page386]

The judgment of the court was delivered by

SWINTON J.: —

Overview

[1] The applicants operate a convenience store and gas station. While the store was under different management, employees of the prior operator were twice convicted of selling tobacco products to minors. As a result, the Minister of Health and Long-Term Care (the "minister") issued a notice of prohibition (the "prohibition") under s. 16 of the Smoke-Free Ontario Act, S.O. 1994, c. 10 (the "Act") prohibiting the sale of any tobacco products at the store for six months and requiring that a sign be posted to this effect. The sign must say, "We have been convicted of selling tobacco to minors."

[2] The minister takes the position that the prohibition applies "in rem" to "the place" where tobacco was sold to minors. Thus, the minister argues, the prohibition applies to the applicants, who are the present operators of the store, even though they were neither involved in the sale of tobacco to minors, nor are they related in any way to the prior operator of the store.

[3] The applicants bring this application for judicial review seeking to quash the minister's decisions concerning the issuance and application of the prohibition. In the alternative, they challenge the constitutionality of the requirement that they post signs stating that they have been convicted of tobacco sales to minors. They argue that this requirement is a denial of freedom of expression contrary to s. 2(b) of the Canadian Charter of Rights and Freedoms that is not saved by s. 1, because they were never convicted of such an offence.

[4] On a careful reading of the applicable terms of the Act and its regulation, prohibition orders can only be issued to a person who has committed at least one offence under the Act. The minister did not have the jurisdiction to apply the impugned prohibition against the applicants. Therefore, for the reasons that follow, the application is allowed, and the minister's decision that the prohibition applies to the applicants is set aside. Given this conclusion, it is not necessary to address the constitutional issue.

The Statutory Framework

[5] The Smoke-Free Ontario Act, enacted in 1994 as the Tobacco Control Act, 1994, S.O. 1994, c. 10, is a public health and safety statute regulating tobacco. It establishes a legislative [page387] regime to control the display, promotion, packaging, sale and use of tobacco. One of its important purposes is to prevent the sale of tobacco products to minors (R. v. Seaway Gas & Fuel Ltd. (2000), 2000 2981 (ON CA), 47 O.R. (3d) 458, [2000] O.J. No. 226 (C.A.), at paras. 32-33).

[6] The Act sets out a number of prohibited acts, including the selling or supply of tobacco to a person who is less than 19 years old (see s. 3(1)). Subsection 3(2) reduces the danger of an inadvertent violation of s. 3(1) by requiring vendors to check identification when a customer appears to be under 25 years old. Subsection 3(4) provides that the owner of a business where tobacco is sold is deemed vicariously liable for a contravention of s. 3(1) or (2) on the premises, unless the owner exercised due diligence to prevent the contravention. Section 15 provides that a person who contravenes the Act, including s. 3, is guilty of an offence and is subject to a fine.

[7] Section 16 provides for an automatic prohibition of tobacco sales where two or more of the tobacco sales offences specified in s. 16(1) have been committed in a place within a five-year time period. Subsection 3(1) is one of the specified offences. The key provisions of s. 16 for the purposes of this application are quoted below:

16(2) On becoming aware that all of the following conditions have been satisfied, the Minister shall send a notice of the prohibition imposed by subsection (4) to the person who owns or occupies the place and to all wholesalers and distributors of tobacco in Ontario:

1. Any person has been convicted of a tobacco sales offence committed in a place owned or occupied by the person.

2. Any person was convicted of another tobacco sales offence in the same place during the five years preceding the conviction referred to in paragraph 1.

3. The period allowed for appealing the conviction referred to in paragraph 1 has expired without an appeal being filed, or any appeal has been finally disposed of.

(3) The notice shall specify the date on which it is to take effect.

(4) During the applicable period,

(a) no person shall sell or store tobacco in the place where the tobacco sales offences were committed; and

(b) no wholesaler or distributor shall deliver tobacco to the place or have it delivered there.

(5) For the purposes of subsection (4), the applicable period is,

(a) the six months that follow the date specified in the notice referred to in subsection (2), if the person has been convicted of one other tobacco sales offence committed in the same place during the five years preceding the current conviction; [page388]

(b) the nine months that follow the date specified in the notice, if the person has been convicted of two other tobacco sales offences committed in the same place during the five-year period; and

(c) the 12 months that follow the date specified in the notice, if the person has been convicted of more than two other tobacco sales offences committed in the same place during the five-year period.

(6) It is a defence to a charge under subsection (4) that the defendant had not received the notice at the time the offence was committed.

(8) In establishing the number of times a person was convicted of another tobacco sales offence for the purposes of this section, the only question to be considered is the sequence of convictions, and no consideration shall be given to the sequence of commission of offences or to whether an offence occurred before or after a conviction.

[8] Section 18 requires the posting of signs in a place that is subject to a prohibition. Subsection 18(1) states:

18(1) The owner or occupier of a place that is subject to a prohibition imposed under section 16 shall ensure that signs are posted at the place in accordance with the regulations.

[9] Subsection 25(3) of O. Reg. 48/06 (the "Regulation") mandates the posting of signs where there has been a prohibition arising from the contravention of s. 3(1) of the Act. It states:

25(3) For the purposes of section 18 of the Act, any person who is convicted of a tobacco sales offence under section 15 of the Act for contravening subsections 3(1) or (2) of the Act, and who is subject to a prohibition under section 16 of the Act, shall for the duration of the prohibition under section 16 of the Act post the sign described in subsection (4) at every location where tobacco was sold or supplied immediately before the day the prohibition came into effect.

Subsection 25(4) prescribes the size, colour and content of the sign. The sign, red in colour and with the graphic and the trillium and Smoke-Free Ontario logos shown on it, must contain the following message, in English, "We cannot sell tobacco products. We were convicted of tobacco sales to minors", or the equivalent message in French.

Factual Background

[10] Two employees of an Esso store located at 33 Wilson St. in Ancaster were convicted of selling tobacco to minors contrary to s. 3(1) of the Act, in April 2011 and February 2013 respectively. They were employed by 1562406 Ontario Inc. ("156"). The company was never convicted of an offence under the Act. [page389]

[11] As a result of the convictions, the minister issued a notice of prohibition, pursuant to s. 16 of the Act, to 156 as the occupier of the location. The prohibition was issued on February 10, 2014, but was not served on 156 and its principal, Gurdip Singh Sidhu, until March 12, 2014. The applicable period for the prohibition and the posting of signs was specified as March 17, 2014 to September 17, 2014.

[12] 156 had been operating the store pursuant to an agreement with Imperial Oil. The agreement was terminated for reasons unrelated to the Act and without Imperial knowing about either the convictions under the Act or the issuance of the prohibition.

[13] On March 10, 2014, Imperial contacted the applicant, Ravi Joshi, who is president and director of the applicant 1788377 Ontario Inc. ("178"), to offer him the opportunity to operate the Wilson Street store. At that time, Mr. Joshi had been operating a store and gas station in St. Catharines. He visited the Wilson Street property on March 10, 2014, prior to the service of the prohibition on 156. According to the affidavit evidence of Mr. Joshi, the applicants are unrelated to 156 and Mr. Sidhu.

[14] On March 11, 2014, Mr. Joshi accepted Imperial's offer to take over the operation of the Wilson Street store. Although the prohibition had been served on 156 and Mr. Sidhu on March 12, 2014, Imperial and Mr. Joshi first became aware of the prohibition on March 18, 2014. Mr. Joshi sought confirmation from the ministry that it would set aside the prohibition and not enforce it against the applicants. No decision was provided by the ministry before the applicants began to operate the store on March 26, 2014.

[15] On April 7, 2014, the ministry rendered a decision that the prohibition would apply to the applicants, since the prohibition was associated with the place and not with a particular person. The ministry explained that the Act had been amended in 2005 because of the problem of non-arm's-length transactions to third parties that occurred as a way of avoiding a notice of prohibition.

[16] Accordingly, the prohibition would apply to the applicants, and they would be required to post signs saying that they had been convicted of selling tobacco to minors, even though Mr. Joshi, 178 and 178's employees had never been convicted of a tobacco sales offence.

[17] The applicants obtained a stay of the prohibition pending the determination of this application for judicial review. [page390]

Issues

[18] The applicants raise two issues arising from the interpretation of s. 16 of the Act:

(1) Did the minister have the statutory authority to issue the prohibition?

(2) If so, does the prohibition operate to require the applicants to comply with its terms?

[19] In the alternative, if the prohibition applies, the applicants challenge the constitutionality of the requirement that retailers post signs falsely stating they have been convicted of selling tobacco to minors. The applicants argue that the Regulation violates their right to freedom of expression in s. 2(b) of the Charter and is not saved by s. 1.

The Interpretation of s. 16 of the Act

[20] The Supreme Court of Canada has repeatedly endorsed the purposive approach to statutory interpretation, which requires that "the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament" (Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, [2002] S.C.J. No. 43, at para. 26). As the Ontario Court of Appeal stated in Bapoo v. Co-operators General Insurance Co. (1997), 1997 6320 (ON CA), 36 O.R. (3d) 616, [1997] O.J. No. 5055 (C.A.), at para. 8, "The court's interpretation should comply with the legislative text, promote the legislative purpose and produce a reasonable and just meaning."

[21] Section 16 of the Act is not happily worded. Subsection 16(2) was amended in 2005 (in force May 31, 2006) to provide for service of a notice of prohibition on the person who owns or occupies the place when any person has been convicted of a tobacco sales offence in a place owned or occupied by the person and a second conviction of any person occurred within the preceding five years at the same place. Prior to the amendment, a notice of prohibition could be served only on a person who had been convicted of two tobacco sales offences within a five-year period -- that is, the owner or occupier of premises could be served with a notice of prohibition only where the owner or occupier had been twice convicted of a tobacco sales offence (R. v. Che, [1998] O.J. No. 1359 (Div. Ct.), at para. 2). [page391]

[22] The two versions of s. 16(2) are set out below, with emphasis on the key word changes:

(Emphasis added)

[23] The applicants argue that "any person" in s. 16(2) should be interpreted as referring to employees of "the person" on whom the notice of prohibition is served.

[24] The respondent argues that the plain reading of s. 16(2) indicates that a notice of prohibition must be issued where there have been two or more convictions for tobacco sales offences within a five-year period irrespective of whether the current owner or occupier, or an employee of the current owner or occupier, has been convicted of a tobacco sales offence.

[25] I agree with the respondent that one cannot interpret the words "any person" in s. 16(2) to mean only employees of the person on whom a notice of prohibition is served. Elsewhere in the Act, there is express reference to the terms "employee" and "employer" (see, for example, s. 9(3) and (4)), and those words [page392] are defined in s. 1(1) of the Act. The fact that the legislature used the term "person" in s. 16 instead of the word "employee" is, therefore, significant.

[26] On its face, s. 16(2) appears to allow a notice of prohibition to be issued to the person who owns or occupies a place where there have been two convictions for tobacco sales offences by any person in the place within a five-year period. However, one cannot read s. 16(2) in isolation from the rest of the section, since the words of a provision must be read in their legislative context.

[27] It is s. 16(4) that creates the prohibition. It prohibits the sale or storage of tobacco in, or the delivery of tobacco to, the place where tobacco sales offences occurred "[d]uring the applicable period". Subsection 16(5) defines the "applicable period" with reference to "the" person's convictions for tobacco sales offences. For example, s. 16(5) (a) states:

16(5) For the purpose of subsection (4), the applicable period is,

(a) the six months that follow the date specified in the notice referred to in subsection (2), if the person has been convicted of one other tobacco sales offence committed in the same place during the five years preceding the current conviction[.]

(Emphasis added)

[28] No change was made to the wording of s. 16(5) when s. 16(2) was amended to provide for the issuance of a notice of prohibition when "any person" has been convicted of a tobacco sales offence, and "any person" has been convicted of a second offence in the same place within five years. The applicants rely on the principle of consistent expression to argue that the use of the words "the person" in both s. 16(2) and s. 16(5) is significant, and that the words have the same meaning in both subsections. In other words, there must be at least one conviction of the owner or occupier in order to trigger the prohibition.

[29] The principle of consistent expression is articulated by Ruth Sullivan in Sullivan on the Construction of Statutes, 5th ed. (Markham, Ont.: LexisNexis, 2008) as follows (at pp. 214-15):

It is presumed that the legislature uses language carefully and consistently so that within a statute or other legislative instrument the same words have the same meaning and different words have different meanings. Another way of understanding this presumption is to say that the legislature is presumed to avoid stylistic variation.

Sullivan notes that one of the important considerations, in applying the presumption, is the proximity of the words in the statute (at p. 221). [page393]

[30] In the 2005 amendment to s. 16(2), the legislature made a distinction between "the person" who owns or occupies a place and "any person" who is convicted of a tobacco sales offence. However, it left unchanged the reference in s. 16(5) to "the person" convicted for purposes of determining the applicable period. The respondent would have this court read the term "the person" in s. 16(5) as meaning "any person", but that does not reflect the wording of s. 16(5). One would expect that the words used in the two subsections of the same section were deliberately chosen, given the presumption of consistent expression. The legislature could have changed "the" to "any" in s. 16(5), but it chose not to do so. Accordingly, for purposes of determining an applicable period for the prohibition to operate, the person on whom the notice of prohibition is served must have been convicted of at least one tobacco sales offence in the five-year period.

[31] The respondent argues that such a reading is inconsistent with the intention of the legislature in adopting the 2005 amendment. In support, the respondent relies on excerpts from the testimony of a witness at the committee stage at which the amendments were examined to show that the purpose of s. 16(2) was to prevent non-arm's-length transactions to third parties as a way to circumvent a prohibition.

[32] However, these excerpts from the committee proceedings do not assist the court in determining the meaning of s. 16(2) or the mischief it seeks to address. The observations were made by a lay witness, rather than by a government minister, and they do not deal in any detail with s. 16 of the Act so as to assist in its interpretation.

[33] Moreover, s. 16(2), read in context, is not obviously drafted so as to capture non-arm's-length transactions. Indeed, the minister's application of the prohibition to the applicants illustrates that the section is being used to curtail sales by persons who have no relationship with the party who committed the offences. The evidence is clear that Mr. Joshi and his company and employees have not committed any tobacco sales offences, have no relationship with the entity whose employees committed the offences and have no relationship with the principal of that company.

[34] The applicants further argue that the presumption of coherence leads to the conclusion that the prohibition is meant to operate only against those who have committed at least one tobacco sales offence. It is presumed that the legislature means to express itself coherently, and that the provisions of legislation are meant to work together as a functioning whole (Sullivan, above, pp. 223-25). [page394]

[35] Section 18 of the Act requires the owner or occupier of a place subject to a prohibition to post signs in accordance with the Regulations. It is noteworthy that s. 25(3) of the Regulation, adopted in 2006 following the amendments to the Act in 2005, requires a person to post a sign if the person has been convicted of a tobacco sales offence for contravening ss. 3(1) or 3(2) and is subject to a prohibition under s. 16 of the Act. The sign requires that the person posting the sign state, "We cannot sell tobacco products. We were convicted of tobacco sales to minors." Thus, when s. 18 of the Act is read with s. 25(3) of the Regulation, it seems that the prohibition is meant to apply to a person who has been convicted under the Act. This is consistent with the wording of s. 16(5) of the Act, which defines the applicable period for the prohibition in light of a conviction of the owner or occupier.

[36] The respondent argues that it is improper to interpret the Act in light of the Regulation. When there is conflict between an Act and a regulation, the statute prevails (Belanger v. Canada (1916), 1916 87 (SCC), 54 S.C.R. 265, [1916] S.C.J. No. 63).

[37] However, there is no inconsistency between the Regulation and the Act. Subsection 25(3) of the Regulation requires that a sign be posted by a person who has been convicted of a tobacco sales offence. Such a requirement is consistent with a reading of s. 16(5) of the Act to require at least one tobacco-related offence by the owner or occupier before there can be a prohibition.

[38] The respondent argues that the notice of prohibition in s. 16 is addressed to a place, not a person. To quote the respondent's factum, at para. 15, "The focus of the prohibition is in rem not in personam." The respondent bases this assertion on the fact that s. 16(4) prohibits sales "in the place where the tobacco sales offences were committed". However, the section still addresses individual convictions, particularly in s. 16(5) when determining the applicable period. Moreover, the posting of the signs with the message that "we were convicted" suggests that a notice of prohibition is directed at those who committed the transgression.

[39] The respondent argues that the ministry's interpretation is more consistent with an important objective of the Act, the prevention of tobacco sales to minors. However, it is difficult to see how this objective of the Act and regulation is promoted in a fact situation like the present one. Mr. Joshi and his company have never been convicted of tobacco sales offences, and they have no relationship with the company whose employees violated the Act. [page395]

[40] The respondent argues that the effect of the applicants' argument is to use s. 16(5) to read down the 2005 amendment to s. 16(2) and to give that amendment no effect. Instead, the respondent submits that interpreting "the person" in s. 16(5) to mean "any person" convicted of a tobacco sales offence in s. 16(2) gives effect to both s. 16(2) and (5).

[41] The purposive approach to statutory interpretation requires a court to consider, among other factors, whether the proposed interpretation produces a just and reasonable result (see, for example, Bapoo, above, at para. 8; Wawanesa Mutual Insurance Co. v. Axa Insurance (Canada) (2012), 112 O.R. (3d) 354, [2012] O.J. No. 4196, 2012 ONCA 592, at paras. 33-36). The interpretation proposed by the respondent results in a serious financial penalty for persons who have never been convicted of a tobacco-related sales offence, have never been associated with a person who has been convicted of such an offence and have no knowledge of the prior offences. It also results in unreasonable reputational harm by requiring the applicants to post a sign falsely admitting a conviction for a tobacco sales offence.

[42] Elsewhere in the Act, in s. 3(4), the owner of a business can be convicted of tobacco sales offences on its premises on the basis of vicarious liability unless the owner can demonstrate due diligence. The respondent's proposed interpretation of s. 16 of the Act provides no such defence to an owner or occupier of the premises. In contrast, the applicants' proposed interpretation is consistent with the policy underlying s. 3(4), as well as with the wording of s. 16, given the presumptions of coherence and consistency of expression.

[43] In reaching this conclusion, I am mindful of the Court of Appeal's direction in Seaway, above, that the Act should be strictly interpreted to help achieve the purpose of preventing minors from buying cigarettes (at para. 33). I note that the Court of Appeal's statement was made in the context of interpreting the Regulations concerning acceptable types of identification when a young person seeks to buy cigarettes. However, in the present case, s. 16 is not clearly drafted. Using the accepted approach to statutory interpretation, I conclude that the minister erred in holding that the prohibition applies to the applicants, who have never been convicted of a tobacco-related sales offence.

Conclusion

[44] Given the conclusion that the prohibition does not apply to the applicants, it is not necessary to deal with the Charter issue.

[45] The application for judicial review is granted, and the decision of the minister that the prohibition applies to the [page396] applicants is set aside. If the parties cannot agree on costs, they may make brief written submissions through the Divisional Court office within 21 days of the release of this decision.

Application allowed.

End of Document