A-67-78
Attorney General of Canada (Appellant)
(Defendant)
v.
Labatt Breweries of Canada Ltd. (Respondent)
(Plaintiff)
Court of Appeal, Jackett C.J., Pratte J. and Smith
D.J.—Vancouver, April 11, 1979.
Prerogative writs — Declaration — Food and drugs —
Appeal from Trial Division's declaration that product labelled
"Special Lite" not likely to be mistaken for light beer as
defined by Food and Drug Regulations — Regulations speci
fied alcohol content for light beer — Label on respondent's
product indicated alcohol content — Trial Judge found non
compliance of respondent's product with the regulatory stand
ards to be an irrelevant consideration — Issue as to correct
ness of Trial Judge's decision that Labatt's `Special Lite"
would not be mistaken for light beer as described in the
Regulations — Whether or not the Regulation establishing a
standard for light beer was invalid — Food and Drugs Act,
R.S.C. 1970, c. F-27, ss. 2, 6, 25, 26 — Food and Drug
Regulations, SOR/54-664, para. A.01.002, B.01.001, B.01.006,
B.02.130, B.02.134.
This is an appeal from a judgment of Trial Division, in an
action for a declaration, declaring that plaintiff's product,
Labatt's Special Lite, as labelled, packaged and sold, would not
likely be mistaken for light beer as described in the Regulations
made pursuant to the Food and Drugs Act. These Regulations
described standards for both "Beer" and "Light Beer". The
Trial Judge made two findings: that regardless of the phonetic
spelling "Lite", the beer was labelled, packaged and advertised
as "light", and that the labels, cartons and advertising all
indicated the alcohol content. The Trial Judge, however, did
not consider the finding that the beverage was labelled, pack
aged and advertised as a "Light Beer", even though it did not
comply with the standard for light beer, to be relevant to the
question he had to decide. Respondent adopts the position
taken by the Trial Division and supports the judgment on the
alternative ground that the paragraph of the Regulations estab
lishing a standard for light beer was invalid: the Trial Judge
assumed its validity.
Held, the appeal is allowed. There is an ambiguity as to
whether, where a standard has been prescribed for a named
class of food, section 6 prohibits labelling, packaging, selling or
advertising an article not complying with the prescribed stand
ard in such manner that it is likely to be mistaken (a) for food
so named, or (b) for food that complies with the prescribed
standard. The trial judgment is based on the second alternative;
if correct, section 6 would merely prohibit the passing off of an
article as complying with a prescribed standard unless it com-
plied with it. The first alternative, however, is the correct one;
section 6 prohibits the passing off of an article as being of a
named class unless the article complies with the standard
prescribed for goods of the class named. The statute provides
for regulations prescribing standards for articles of a described
class of food and makes it an offence, where a standard has
been prescribed, to label, package, sell or advertise an article in
such manner that it is likely to be mistaken for such food unless
the article complies with the prescribed standard. If the Regu
lation establishing a standard for light beer is valid, respondent
was infringing section 6. The standard prescribed for light beer
is not outside the powers conferred by thé Act on the Governor
in Council. The object of the law—the protection of the public
against health hazards and fraud, and against being misled
intentionally or otherwise, as to what food they are getting—
does not go beyond the ambit of the criminal law power as
authorized by section 91(27) of The British North America
Act, 1867.
Standard Sausage Co. v. Lee [1933] 4 D.L.R. 501 and
[1934] 1 D.L.R. 706, applied.
APPEAL.
COUNSEL:
W. J. A. Hobson, Q.C. and C. Bruce for
appellant (defendant).
D. M. M. Goldie, Q.C. and D. Brown for
respondent (plaintiff).
SOLICITORS:
Deputy Attorney General of Canada for
appellant (defendant).
Russell & DuMoulin, Vancouver, for
respondent (plaintiff).
The following are the reasons for judgment
delivered orally in English by
JACKETT C.J.: This is an appeal from a judg
ment of the Trial Division in an action for a
declaration, declaring
1. The Plaintiffs product, Labatt's Special Lite (referred to in
the Statement of Claim and seized or threatened to be seized
pursuant to the provisions of the Food and Drugs Act R.S.C.
1970, C. F-27), as labelled, packaged and sold and as would
have been advertised, is not likely to be mistaken for light beer
as described in paragraph B.02.134 of the regulations made
pursuant to the said Food and Drugs Act.
and awarding costs of the action to the
respondent'. The labelling of the beverage in ques
tion is typified by the following sample of one of
the labels.
The relevant legislation is the Food and Drugs
Act, R.S.C. 1970, c. F-27, and Regulations made
thereunder. Section 25 of the Act authorizes regu
lations (paragraph (c)) "prescribing standards of
composition, strength ... or other property of any
article of food" which word "food" includes, by
definition (section 2), "any article ... for use as
... drink for man". There are Regulations under
section 25 prescribing standards for inter alia
"Beer" (paragraph B.02.130) and "Light Beer"
(paragraph B.02.134). Section 6 of the Act reads
as follows:
6. Where a standard has been prescribed for a food, no
person shall label, package, sell or advertise any article in such
a manner that it is likely to be mistaken for such food, unless
the article complies with the prescribed standard.
Section 26 of the Act makes it a punishable
offence to violate any of the provisions of the Act.
The declaration in the Trial Division judgment
seems to have been granted pursuant to the prayer
for relief contained in paragraph 11(b) of the
statement of claim. It is to be noted that
(a) paragraph 11(b) claims a declaration that the beverage in
question "as labelled, packaged and sold ..." is not likely to be
' No question as to the appropriateness of the matter for a
declaratory judgment or as to jurisdiction has been raised by
the parties or would seem to be so obvious that it should be
raised by the Court.
mistaken for a "light beer" within "the standard set out in
paragraph B.02.134", and
(b) the judgment attacked grants a declaration that such
beverage "as labelled, packaged and sold ..." is not likely to be
mistaken for "light beer" as "described in paragraph
B.02.134".
In my view, a judicial declaration should only be
granted in an action for a declaration if it will
serve some immediate practical purpose of a com
mercial or other nature. The sole evident purpose
for the declaration attacked is that the respondent
desires, for sound commercial reasons, to have it
established that the prohibition in section 6 does
not apply to what it had done and proposed to
continue to do. In my view, unless the judgment is
read as being, in effect a declaration to that effect,
it should be set aside as not being a proper exercise
of the Court's discretionary power to render
declaratory judgments. 2
The parties, through counsel, agreed, during
argument of this appeal, as I understood them,
that the judgment of the Trial Division is to be
read as a declaration, in effect, that labelling,
packaging and selling the beverage in question in
the manner in which it was labelled, packaged and
sold did not constitute an infringement of
section 6. That being so, the question arises as to
whether that declaration can be supported on the
material before the Trial Division.
The judgment attacked was delivered by the
Trial Division on the assumption that paragraph
B.02.134 of the Regulations had validly estab
lished a standard for "Light Beer". In this Court,
as I understand it, the respondent adopts the posi
tion taken by the Trial Division and, in addition,
supports the judgment on the alternative ground
2 Apart from the general principles governing a Court's
discretion to grant declaratory judgments, the Federal Court
cannot grant such a judgment unless, in so doing, it is adminis
tering a federal law. Quaere whether delivering a declaration as
to a fact without declaring whether there is or is not some legal
result flowing from such a law as applied to that fact would be
administering such a law.
that paragraph B.02.134 is invalid 3 .
To understand the reasoning whereby the
learned Trial Judge reached the conclusion that
the respondent was entitled to the declaration
granted, it is necessary to have in mind that, when
paragraphs B.02.130 and B.02.134 are read to
gether, it appears that one of the two compulsory
requirements of the standard prescribed for
"Beer" was that it
shall contain not less than 2.6% and not more than 5.5% alcohol
by volume; ...
that one of the two compulsory requirements of
the standard prescribed for "Light Beer" was that
it
shall contain not less than 1.2% and not more than 2.5% alcohol
by volume; ...
and that the other compulsory requirement was
that the beverage shall be the product of the
alcoholic fermentation of an infusion of barley
malt and hops or hop extract in potable water and
brewed in such a manner as to possess the aroma,
taste and character commonly attributed to
(a) beer, or
(b) light beer,
as the case may be.
After reviewing the evidence, the learned Trial
Judge, inter alia, made two findings as to the basic
facts, viz.:
(a) that, regardless of the phonetic spelling
"Lite", the respondent was "labelling, packag
ing and advertising a beer, using the descriptive
adjective `light' ", and
(b) that the labels on the individual bottles, the
information on the carton, and the proposed
advertising material all clearly indicate, even to
the most casual observer or customer, that the
alcohol content is 4%.
He stated the "issue" to be
In my view, if the judgment attacked is otherwise sustained
on either ground, the declaration should be re-cast to make it
clear that it is a declaration that what was being done was not a
breach of section 6.
has the plaintiff [respondent] labelled, packaged or advertised
its Special Lite product in such a manner that it is likely to be
mistaken for Canadian light beer?
He expressed the view that that is "a question of
fact, a jury question" and that, in deciding that
question, he should try to put himself in the posi
tion of "the average, fair and reasonable person".
Thereafter, the learned Trial Judge dealt with the
matter as follows:
There is no evidence before me describing, explaining or
illustrating the aroma, taste and character commonly attribut
ed to light beer. There is no evidence indicating the average,
fair and reasonable Canadian would know what those particu
lar attributes are. To my mind the hypothetically postulated
Canadian would, as a prospective purchaser of the plaintiff's
product, consider it to be a beverage less heavy or not as heavy
as other beer products, or likely of somewhat less alcoholic
content than other beer products, or both.
In the case before me, the average, fair and reasonable
Canadian purchaser would, in my view, quickly become aware
and appreciate (from the labelling, packaging and advertising)
that the plaintiff's product contained 4% alcohol by volume and
not some undisclosed, or difficult to perceive, content. It is said
on behalf of the defendant that even in clear terms disclosing
an alcohol content well above the maximum for light beer does
not remove the plaintiff from the prohibition of s. 6 of the
statute; that the other standard—"the aroma, taste, and char
acter commonly attributed to light beer"—is equally applicable
and important. But, as I have noted, there is no evidence to
assist me in arriving at what that particular standard, or what
the Regulation's phrase, light beer, conveys to the average, fair
and reasonable Canadian.
On the evidence before me, it is my conclusion the plaintiff's
Special Lite beverage ("food") has not been labelled, packaged
or advertised in such a manner that it is likely to be mistaken
for the beverage "light beer" ("food").
It is apparent that what the learned Trial Judge
decided was that, as labelled, packaged or adver
tised, the beverage in question, which contained,
and was described as having contained, 4% alcohol
by volume, was not likely to be mistaken for a
beverage complying with the standard prescribed
for "Light Beer". It seems clear that he did not
consider the finding that the beverage was
labelled, packaged and advertised as a "Light
Beer", even though it did not comply with the
standard prescribed for "Light Beer", to be rele
vant to the question that he had to decide.
In the circumstances, whether or not the decla
ration should have been granted, assuming the
validity of the prescribed standard, as it appears to
me, depends on the meaning of section 6 of the
Act, which I repeat here for convenience:
6. Where a standard has been prescribed for a food, no
person shall label, package, sell or advertise any article in such
a manner that it is likely to be mistaken for such food, unless
the article complies with the prescribed standard.
There is apparently (although I should not have
thought so) an ambiguity as to whether, where a
standard has been prescribed for a named class of
food, section 6 prohibits labelling, packaging, sell
ing or advertising an article not complying with
the prescribed standard in such manner that it is
likely to be mistaken
(a) for food so named, or
(b) for food that complies with the prescribed
standard.
The second alternative is the view of the section on
which the judgment attacked appears to be based.
If it is the correct view, section 6 merely prohibits
the passing off of an article as complying with a
prescribed standard unless it does comply with it.
If the first alternative is correct, section 6 prohibits
the passing off of an article as being of a named
class unless the article complies with the standard
prescribed for goods of the class named. In my
view, the first alternative is the correct view and,
applied to the facts of this case, section 6 means, in
effect,
Where a standard has been prescribed for (light beer), no
person shall label, package, sell or advertise any article in such
a manner that it is likely to be mistaken for (light beer), unless
the article complies with the prescribed standard.
As I conceive of the scheme of this aspect of the
Food and Drugs Act, it is calculated to protect the
food buying public, not only against dangerous
foods but against being misled concerning the
composition of foods; and it proceeds on the basis
that foods are bought by members of the public
who do not know or understand the technicalities
of the composition of food but buy goods by
reference to "common names" 4 . It, therefore, con
templates the prescribing of "standards" for foods
sold under various common names that will ensure,
if the prescribing is well done, that a member of
the public will get what he is entitled to think that
he is getting when he purchases an article by
reference to a common name for which a standard
has been prescribed, whether or not he knows or
understands the technical description of what he is
entitled to think that he is getting. The statute,
therefore, provides for regulations prescribing
standards for "any article of food"—i.e. for
articles of a described class of food 5— and makes it
an offence, where a standard has been prescribed
for a "food"—i.e. for a class of food 5 —to label,
package, sell or advertise an article in such manner
that it is likely to be mistaken "for such food"—
i.e. for an article of the class for which a standard
has been prescribed 5 —"unless the article complies
with the prescribed standard."
In my view, therefore, it follows from the find
ings of the learned Trial Judge
4 This seems to be the basis on which the Food and Drug
Regulations were framed (see P.C. 1954-1915 dated December
8, 1954 [SOR/54-664] as amended). Paragraph A.01.002
(which appears in Part A under the heading "Administration"
and sub-heading "General") provides that "These regulations,
where applicable, prescribe the standards of composition,
strength ... or other property of the article of food ... to which
they refer." Paragraph B.01.001 (which appears in Part B
under the heading "Foods" and sub-heading "General") pro
vides that, in that Part, "common name" means inter alia "(a)
the name of the food printed in bold-face type ..." and
paragraph B.01.006 (which appears under the same sub-head
ing) provides, inter alia that, unless otherwise provided, the
label of a package of food shall carry on the main panel of the
label "the common name of the food". The Regulations, as
already indicated, contain standards for beer and light beer
each of which names are printed in bold-face type.
5 When there is an authority to make a "regulation" pre
scribing standards for "an article of food", inasmuch as the
word "regulation" implies a general rule, in my view, it must be
read as an authority to prescribe a standard for a class of
foods. It follows that the reference to "such food" in section 6
is to an article of the class of foods for which the standard has
been prescribed.
(a) that the respondent was "labelling, packag
ing and advertising a beer, using the descriptive
adjective `light' ", and
(b) that that beer had an alcohol content of 4%,
that the respondent was infringing section 6, if the
Regulation establishing the standard for light beer
was valid.
I turn therefore to the respondent's alternative
argument, which is, in effect, as I understand it,
that the Regulation prescribing a standard for
light beer is invalid as being an attempt to regulate
local businesses in each province.
As I understood counsel, the alternative argu
ment is not an attack on the validity of the Food
and Drugs Act but is rather a submission that, if
section 6 has the meaning that I find that it has,
the standard prescribed for light beer is outside the
powers conferred by that Act on the Governor in
Council. In effect the position taken, as I under
stand it, is that the Act authorizes a regulation
prescribing a standard that, read with section 6, is
calculated to prohibit the marketing of dangerous
substances as food or the fraudulent marketing of
an article of food as being an article of a class or
kind to which it does not belong. From this basis,
the argument continues that, if the standard pre
scribed is such that section 6 would prohibit mar
keting where neither dangerous substances nor
fraud is involved, the standard is not one that the
Governor in Council was authorized to prescribe.
The argument is one of gravity. Prima facie the
part of the Food and Drugs Act in question (here-
inafter sometimes referred to as "the law in ques
tion") restricts the manner in which various local
businesses involved in the manufacture and distri
bution of food may be carried on. On the other
hand, without taking time to research its history, it
can be said that the Food and Drugs Act has, for a
very long time, been accepted, substantially as it
presently exists, as an important element of the
laws enacted by Parliament for the protection of
the Canadian public; and a restriction on its ambit
such as is urged by the respondent would, almost
certainly, seriously undermine, if not destroy, its
efficacy as presently framed 6 .
It is of importance, therefore, that there be no
unnecessary delay in disposing of this appeal so
that any doubt as to the effectiveness of the statute
may be finally dealt with by the Supreme Court of
Canada as quickly as possible and corrective meas
ures, if necessary, may be considered by the appro
priate legislative authorities with a view to reduc
ing to the minimum the time that the public may
be left without whatever protection is deemed
essential by such authorities.
I propose to consider the alternative argument
on the assumption that the standard in question
has not been prescribed to provide the public with
protection against a danger to health or fraud
because I know of no way whereby a court can, by
a mere consideration of the Regulations or other
wise, divide the standards between those that have
been prescribed for one of those reasons and those
that have been prescribed to ensure that the public
gets what it is entitled to expect that it is getting
when it buys food by reference to common names.
(For example, referring to the standard for light
beer, I have no difficulty in conceiving of a
member of the public who is particularly suscept
ible to alcohol (which, depending on the quantity
taken and the particular individual, can be a
health hazard) being misled by the name "light
beer" into thinking that he is obtaining a beverage
with an amount of alcohol that is nominal in
relation to that contained in ordinary beer; and, as
it seems to me, it is more likely than not that a
warning as to the percentage of alcohol would be
meaningless to such a person unless it were, at the
6 The problems of enforcement that would arise if, on each
prosecution, the Court had to decide whether the standard
involved in the prosecution is calculated to protect the public
against a danger to health or fraud or is merely calculated to
protect the public against being misled are obvious. If time
permitted, it would be of interest to research the legislative
history of the statute to ascertain whether, when first adopted,
Parliament, by preamble or otherwise, indicated the real "mat-
ter" of the "law" (cf. sections 91 and 92 of The British North
America Act, 1867) and whether subsequent changes were
made by Parliament or Statute Revision Commissioners.
same time, contrasted with the percentage of
alcohol contained in ordinary beer.)
I am therefore, of opinion that the law in ques
tion is not capable of being read subject to the
implied limitation urged by the respondent; and
that it is, therefore, either completely ultra vires or
the standard under attack is valid.
As I understand the respondent's position on its
alternative argument, it is that the limitation on
the Governor in Council's powers to prescribe
standards is based on the contention that it would
be ultra vires Parliament to prohibit the marketing
of goods under misleading names because a power
to make criminal law would be restricted, in this
field, to imposing a criminal sanction on acts that
are dangerous to health or fraudulent. I propose to
discuss this argument and, in view of my conclu
sion with regard thereto, I will make no reference
to the question whether the law in question can be
supported under the introductory words, or Head
(2), of section 91 of The British North America
Act, 1867.
In the first place, it is to be noted that the law in
question does not fall within certain classes of law
that have already been held to be ultra vires
Parliament, viz.:
(a) a law attempting, by a licensing system to
regulate local businesses in a province',
(b) a law regulating what may or may not be
manufactured or sold in a provinces, or
(c) a law creating rights of a tortious or con
tractual nature arising out of the conduct of
persons carrying on local businesses in a
province 9 .
From a constitutional point of view, as I under
stand it, what the law in question does do is to
prohibit the marketing of a food, by reference to a
specified name for which a standard has been
prescribed, unless it complies with that standard.
7 The King v. Eastern Terminal Elevator Company [1925]
S.C.R. 434; and Reference re Section 16 of the Special War
Revenue Act [ 1942] S.C.R. 429.
8 Canadian Federation of Agriculture v. Attorney-General
for Quebec [1951] A.C. 179.
9 MacDonald v. Vapor Canada Limited [1977] 2 S.C.R. 134.
Such a prohibition has been held by the British
Columbia Court of Appeal to be a valid exercise of
Parliament's power to make criminal law in the
case of an earlier version of the Food and Drugs
Act 10 ; and, unless there is some distinction, from a
constitutional point of view, between what was
involved in that case and what is involved in this
appeal, I am of opinion that this Court should
adopt and apply the decision in that case.
While the law attacked in this appeal is framed
somewhat differently from the law that was con
sidered in that case (e.g. it does not deem food not
complying with a prescribed standard to be "adul-
terated"), in my view, from a constitutional point
of view, it comes to the same thing. In that case, it
was held that a prohibition against marketing of
food as "fresh meat" when it contained an agent
not permitted by a standard prescribed for "fresh
meat" was good criminal law even though the food
in question was not injurious to health. I see no
distinction between that prohibition and the law in
question in this appeal.
The essence of the law attacked in this appeal,
as I understand it, is that the marketing of an
article of food is made subject to a criminal sanc
tion if it is marketed under a name for which a
standard has been prescribed and it does not
comply with that standard. As it seems to me, the
object of the law attacked is not only to protect the
public against health hazards and fraud but, is also
to protect members of the public from being
misled, intentionally or otherwise, as to what food
they are getting. This does not, as I understand the
jurisprudence, go beyond the ambit of criminal law
as authorized by section 91(27) of The British
North America Act, 1867 11 .
10 Standard Sausage Co. v. Lee [1933] 4 D.L.R. 501 and
[1934] 1 D.L.R. 706.
1 See Proprietary Articles Trade Association v. Attorney-
General for Canada [1931] A.C. 310 per Lord Atkin at pp.
323-324: "... if.Parliament genuinely determines that commer
cial activities which can be so described are to be suppressed in
the public interest, their Lordships see no reasons why Parlia
ment should not make them crimes", and also "Criminal Law
connotes only the quality of such acts or omissions as are
While I recognize that the line between the law
in question and a law regulating local businesses is
thin by reason
(a) of the nature of the prohibition, and
(b) of the delegation by Parliament of the pre
scription of standards,
as I read the reasons for judgment of the British
Columbia Court of Appeal, the matter was con
sidered by that Court from both points of view;
and, as I have already indicated, I am of opinion
that this Court should adopt and apply that
Court's decision.
For the foregoing reasons, I am of opinion that
the appeal should be allowed with costs, that the
judgment of the Trial Division should be set aside
and that the action in the Trial Division should be
dismissed with costs.
* * *
PRATTE J. concurred.
* * *
SMITH D.J. concurred.
prohibited under appropriate penal provisions by authority of
the State". The problem, of course, is to distinguish bona fide
criminal law from a colourable law, i.e. a law in relation to a
section 92 matter justified "by enacting ancillary provisions
designated as new phases of Dominion Criminal Law". See
Attorney-General for Ontario v. Reciprocal Insurers [1924]
A.C. 328 per Mr. Justice Duff (as he then was) at pp. 340 et
seq.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.