Background
A number of pharmacies were charged with conspiracy "to prevent or lessen competition" under section 32(1)(c) of the Combines Investigation Act for the sale of prescription drugs and dispensing services prior to June 1986. They challenged the provision on the basis that it violated section 7 of the Charter on account of its vagueness.
The Combines Investigation Act was a Canadian Act of Parliament, implemented in 1910, passed in 1923 by MacKenzie King, which regulated certain corporate business practices that were anti-competitive. It prohibited monopolies, misleading advertising, bid-rigging, price fixing, and other means of limiting competition. It was revised in 1952 and amended in 1969 by the Criminal Law Amendment Act, 1968-69. It was a rather notorious piece of legislation in Canadian constitutional law for the powers it granted to non-police officers to enter private premises without a judicially issued search warrant and seize evidence that they suspected were in relation to a violation of the Act. This culminated in a raid of the offices of the Edmonton Journal and the ensuing Supreme Court decision in Hunter v Southam Inc, where provisions of the Act were held to be inoperative in light of the recently enacted Canadian Charter of Rights and Freedoms' section 8 protection against unreasonable search and seizure. The Act was eventually repealed in July 1986 and replaced with the Competition Act.
At trial, the Supreme Court of Nova Scotia found in favour of the pharmaceutical companies and overturned the conviction. On appeal the court overturned the verdict and found in favour of the Crown.
The issue before the Supreme Court was:
- whether section 32(1)(c) of the Act infringed s. 7 of the Charter because of vagueness arising from the use of the word "unduly"; and
- whether section 32(1)(c) infringed section 7 by reason of the mens rea required by the offence.
The Court held that section 32(1)(c) of the Act was sufficiently clear and was not in violation of the Charter. Justice Gonthier wrote for a unanimous Court.
Reasoning of the court
Justice Gonthier observed that the doctrine of vagueness under section 7 was founded in the doctrine of the rule of law. Specifically, "the principles of fair notice to citizens and limitation of enforcement discretion". A law will be in violation of section 7 for vagueness if "it so lacks in precision as not to give sufficient guidance for legal debate." (p. 643)
The rule of law is defined in the Oxford English Dictionary as: "The authority and influence of law in society, especially when viewed as a constraint on individual and institutional behavior; (hence) the principle whereby all members of a society are considered equally subject to publicly disclosed legal codes and processes." The phrase "the rule of law" refers to a political situation, not to any specific legal rule.
The requirement of "fair notice" means that there must be awareness of the law. The citizen must have an "understanding that certain conduct is the subject of legal restrictions." The "limitation of law enforcement discretion" is directed at the content of the law, which requires that a law "not be so devoid of precision in its content that a conviction will automatically flow from the decision to prosecute." (p. 636)
The term "legal debate" was intended to reflect and encompass the principles of vagueness in the "fuller context of an analysis of the quality and limits of human knowledge and understanding in the operation of the law." (p. 640) This requires that the law sets out "the boundaries of permissible and non-permissible conduct".
In all the threshold for vagueness is a high one. Gonthier gave a list of factors to consider when determining if a provision is vague:
- the need for flexibility and the role of courts in interpreting the law;
- the impossibility of absolute precision, a standard of intelligibility being preferable; and
- the possibility that a given provision may be susceptible to a number of interpretations which can co-exist.
On the facts, the impugned provision of the Act was found not to be vague. The Court examined the wording of the provision and considered the context of the Act in the area of commercial law, and found that "Parliament has sufficiently delineated the area of risk and the terms of debate to meet the constitutional standard."
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