Imperial Tobacco v. British Columbia
Encyclopedia
British Columbia v. Imperial Tobacco Canada Ltd., [2005] 2 S.C.R. 473, 2005 SCC 49, is a decision of the Supreme Court of Canada
where the Court found that the provincial Tobacco Damages and Health Care Costs Recovery Act
, which allowed the government to sue tobacco companies, was constitutionally valid. Imperial Tobacco Canada is an indirect subsidiary of British American Tobacco
.
government passed the Tobacco Damages and Health Care Costs Recovery Act that granted the government power to sue tobacco manufacturers for breach of duty
to recover costs on the health care system for people suffering from tobacco related illnesses. The tobacco companies sued under the Act challenged its constitutional validity.
On June 5, 2003, the Supreme Court of British Columbia
found that the Act violated the territorial limits
of provincial law and was unconstitutional. The Court of Appeal, in May 2004, overturned the decision on the basis that the pith and substance
, i.e. the dominant characteristic, of the law fell under the property and civil rights
provision of the Constitution Act, 1867. The challenge against judicial independence, and rule of law were also dismissed.
On June 22, 2004, Imperial Tobacco Canada appealed the case to the Supreme Court of Canada. On the same day, four other tobacco companies and the Canadian Tobacco Manufacturers' Council also filed for appeal. On December 17, 2004, the Supreme Court agreed to hear the case and it upheld the decision of the Court of Appeal on September 29, 2005.
Three issues were put to the Court:
The Court answered "no" to all of these issues.
. The subject matter of the Act, compensation for health costs, and the effect, suing companies who harmed those in the province, all point at a valid provincial law. No other province has a greater relationship to the cause of action
. The duty breached by the companies in the manufacturing and selling of tobacco has little significance, Major said, on the connection between the cause of action and the province.
The rule of law, as protected by the Constitution, does not require that Acts ensure a fair civil trial or avoid giving the government advantages.
The Supreme Court held that accepting this amorphous conception of the rule of law would render several provisions of the Charter redundant because they are more narrowly formulated.
. It reaffirmed that a textual basis for review must be submitted because of the stability and predictability provided by a written constitution.
"Because of this ruling, Canada became the first country outside the United States where governments can sue tobacco manufacturers to recover smoking-related healthcare costs; as much as $10 billion in costs was at stake in this B.C. case. Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Saskatchewan have since drafted or adopted legislation based on this B.C. model."
Supreme Court of Canada
The Supreme Court of Canada is the highest court of Canada and is the final court of appeals in the Canadian justice system. The court grants permission to between 40 and 75 litigants each year to appeal decisions rendered by provincial, territorial and federal appellate courts, and its decisions...
where the Court found that the provincial Tobacco Damages and Health Care Costs Recovery Act
Tobacco Damages and Health Care Costs Recovery Act
British Columbia's Tobacco Damages and Health Care Costs Recovery Act is approved by the Supreme Court of Canada, opening the door for the province to sue cigarette makers, in order to recover the billions spent in inflicted healthcare costs.-See also:...
, which allowed the government to sue tobacco companies, was constitutionally valid. Imperial Tobacco Canada is an indirect subsidiary of British American Tobacco
British American Tobacco
British American Tobacco p.l.c. is a global tobacco company headquartered in London, United Kingdom. It is the world’s second largest quoted tobacco company by global market share , with a leading position in more than 50 countries and a presence in more than 180 countries...
.
Background
The British ColumbiaBritish Columbia
British Columbia is the westernmost of Canada's provinces and is known for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . Its name was chosen by Queen Victoria in 1858...
government passed the Tobacco Damages and Health Care Costs Recovery Act that granted the government power to sue tobacco manufacturers for breach of duty
Duty of care
In tort law, a duty of care is a legal obligation imposed on an individual requiring that they adhere to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be established to proceed with an action in negligence. The claimant...
to recover costs on the health care system for people suffering from tobacco related illnesses. The tobacco companies sued under the Act challenged its constitutional validity.
On June 5, 2003, the Supreme Court of British Columbia
Supreme Court of British Columbia
The Supreme Court of British Columbia is the superior trial court for the province of British Columbia. The BCSC hears civil and criminal law cases as well as appeals from the Provincial Court of British Columbia. Including supernumerary judges, there are presently 108 judges...
found that the Act violated the territorial limits
Extraterritoriality
Extraterritoriality is the state of being exempt from the jurisdiction of local law, usually as the result of diplomatic negotiations. Extraterritoriality can also be applied to physical places, such as military bases of foreign countries, or offices of the United Nations...
of provincial law and was unconstitutional. The Court of Appeal, in May 2004, overturned the decision on the basis that the pith and substance
Pith and substance
Pith and substance is a legal doctrine in Canadian constitutional interpretation used to determine under which head of power a given piece of legislation falls...
, i.e. the dominant characteristic, of the law fell under the property and civil rights
Property and civil rights
In Canadian constitutional law, section 92 of the Constitution Act, 1867 provides the provincial government with the exclusive authority to legislate on matters related to property and civil rights in the Province. Note that civil rights in this context is different from what is understood as civil...
provision of the Constitution Act, 1867. The challenge against judicial independence, and rule of law were also dismissed.
On June 22, 2004, Imperial Tobacco Canada appealed the case to the Supreme Court of Canada. On the same day, four other tobacco companies and the Canadian Tobacco Manufacturers' Council also filed for appeal. On December 17, 2004, the Supreme Court agreed to hear the case and it upheld the decision of the Court of Appeal on September 29, 2005.
Three issues were put to the Court:
- Is the Act ultra viresUltra viresUltra vires is a Latin phrase meaning literally "beyond the powers", although its standard legal translation and substitute is "beyond power". If an act requires legal authority and it is done with such authority, it is...
the province by reason of extraterritoriality? - Is the Act constitutionally invalid as being inconsistent with judicial independenceJudicial independenceJudicial Independence is the idea that the judiciary needs to be kept away from the other branches of government...
? - Is the Act constitutionally invalid for violating the rule of lawRule of lawThe rule of law, sometimes called supremacy of law, is a legal maxim that says that governmental decisions should be made by applying known principles or laws with minimal discretion in their application...
?
The Court answered "no" to all of these issues.
Extraterritoriality
Similar to the reasoning of the Court of Appeal, Major found that the pith and substance of the Act was within the authority of the province under section 92(13) of the Constitution Act, 1867Constitution Act, 1867
The Constitution Act, 1867 , is a major part of Canada's Constitution. The Act created a federal dominion and defines much of the operation of the Government of Canada, including its federal structure, the House of Commons, the Senate, the justice system, and the taxation system...
. The subject matter of the Act, compensation for health costs, and the effect, suing companies who harmed those in the province, all point at a valid provincial law. No other province has a greater relationship to the cause of action
Cause of action
In the law, a cause of action is a set of facts sufficient to justify a right to sue to obtain money, property, or the enforcement of a right against another party. The term also refers to the legal theory upon which a plaintiff brings suit...
. The duty breached by the companies in the manufacturing and selling of tobacco has little significance, Major said, on the connection between the cause of action and the province.
Judicial independence
At no point during an action under the Act is the independence of the judiciary interfered with. The Court dismissed the suggestion that the shift in burden to the accused or the unconventional rules of procedure and evidence created by the Act have any effect on independence.Rule of law
The tobacco companies had claimed that the retrospectivity and retroactivity of the Act violated the rule of law by creating an unfair trial. Further, they felt that legislation should neither target a particular sector nor confer special privileges on the government.The rule of law, as protected by the Constitution, does not require that Acts ensure a fair civil trial or avoid giving the government advantages.
The Supreme Court held that accepting this amorphous conception of the rule of law would render several provisions of the Charter redundant because they are more narrowly formulated.
Significance
The Court limited the four unwritten principles of the Constitution, which were outlined in Reference re Secession of QuebecReference re Secession of Quebec
Reference re Secession of Quebec, [1998] 2 S.C.R. 217 was an opinion of the Supreme Court of Canada regarding the legality, under both Canadian and international law, of a unilateral secession of Quebec from Canada....
. It reaffirmed that a textual basis for review must be submitted because of the stability and predictability provided by a written constitution.
"Because of this ruling, Canada became the first country outside the United States where governments can sue tobacco manufacturers to recover smoking-related healthcare costs; as much as $10 billion in costs was at stake in this B.C. case. Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Saskatchewan have since drafted or adopted legislation based on this B.C. model."