Hi-Fi Novelty Company v. Nova Scotia (Attorney General)

Hi-Fi Novelty Company v. Nova Scotia (Attorney General) Court Court of Appeal Date 1993-10-18 Citation 1993 NSCA 193 Docket SCA 02798 Judge/Registrar/Adjudicator Chipman, David (Honourable Justice); Freeman, Gerald B. (Honourable Justice) (CA); Matthews, Kenneth M., (Honourable Justice) Document Type Decision Decision Content S.C.A. No. 02798 NOVA SCOTIA COURT OF APPEAL Matthews, Chipman and Freeman, JJ.A. Cite as: Hi-Fi Novelty Company v. Nova Scotia (Attorney General) 1993 NSCA 193 BETWEEN: ) ) HI-FI NOVELTY COMPANY LIMITED;EASTERN COIN ) Ralph W. Ripley - OP GAMES LTD.; CENTRAL AMUSEMENT LTD.; ) for the Appellants CAPE BRETON NOVELTY COMPANY LIMITED; ) GOLDEN CUE LTD.; DELTA GAMES INC.; NEW ) WATERFORD NOVELTY COMPANY LIMITED; ) NOVA AMUSEMENT LIMITED; LOT O'LUCK ) AMUSEMENTS LIMITED; AUTOMATIC AMUSEMENT ) COMPANY; DARRELL'S COIN MACHINES LIMITED ) ) Appellants ) ) - and - ) ) THE ATTORNEY GENERAL OF NOVA SCOTIA, ) Alex M. Cameron representing Her Majesty the Queen in Right of ) for the Respondent, the Province of Nova Scotia, and ATLANTIC ) Attorney General LOTTERY CORPORATION ) of Nova Scotia ) Respondents ) Joel E. Fichaud, Q.C ) for the Respondent, )AtlanticLottery ) Corporation ) ) ) Appeal Heard: ) October 7, 1993 ) ) ) Judgment Delivered: ) October 18, 1993 THE COURT: The appeal is dismissed with costs as per reasons for judgment of Chipman, J.A.; Matthews and Freeman, JJ.A., concurring. CHIPMAN, J.A.: This is an appeal from a decision of a judge in chambers in the Supreme Court dismissing a challenge by the appellants to regulations made under the Lottery Act, R.S.N.S. 1989, c. 266 and the Theatres and Amusements Act, R.S.N.S. 1989, c. 466. Prior to May 1991, video gambling was illegal in Nova Scotia. It was prohibited by the Criminal Code. Nevertheless, it flourished. Video gambling machines were to be found in the back rooms of taverns, hotels, convenience stores, bars and beverage rooms across the province. Many of those video gambling machines were owned and distributed by the appellants whose business is the distribution of "coin operated devices". The unregulated proliferation of illegal video gambling devices was perceived to be a serious problem. In order to control video gambling and at the same time divert the significant revenues generated by video gambling machines to the public benefit, regulations which came into force in May 1991 were enacted by the Lieutenant Governor in Council. The regulatory scheme so established authorized the respondent, Atlantic Lottery Corporation to conduct video gambling in Nova Scotia as agent for the province. The establishment of the provincial video gambling scheme frustrated the appellants. The customers, the owners of taverns, hotels, convenient stores, bars and beverage rooms returned the appellants' video gambling machines and replaced them with machines of Atlantic Lottery Corporation. As a result, the appellants lost money. The appellants therefore challenged the regulations which authorized the provincial video gambling scheme. Initially, an application was brought in the name of Nova Scotia Music and Amusement Operators Association of which the appellants were members. It was heard in the Supreme Court and the application was dismissed on the ground that the Association lacked standing. See 113 N.S.R. (2d) 54. The appellants, as individual operators claiming to have suffered economic loss as a result of the provincial scheme therefore brought this application by Originating Notice (Application Inter Partes) in the Supreme Court on April 30, 1992. Prima facie the activities of the appellants as described in the record - the distribution of gambling machines - were illegal being contrary to s. 202(1)(b), s. 206(1)(b) and s. 206(1)(c) of the Criminal Code: "202(1) Every one who commits an offence who . . . (b) imports, makes, buys, sells, rents, leases, hires or keeps, exhibits, employs or knowingly allows to be kept, exhibited or employed in any place under his control any device or apparatus for the purpose of recording or registering bets or selling a pool, or any machine or device for gambling or betting. 206(1) Every one is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years who . . . (b) sells, barters, exchanges or otherwise disposes of, or causes or procures, or aids or assists in, the sale, barter, exchange or other disposal of, or offers for sale, barter or exchange, any lot, card, ticket or other means or device for advancing, lending, giving, selling or otherwise disposing of any property by lots, tickets or any mode of chance whatever. 206(1) Every one is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years who . . . (c) knowingly sends, transmits, mails, ships, delivers or allows to be sent, transmitted, mailed, shipped or delivered, or knowingly accepts for carriage or transport or conveys any article that is used or intended for use in carrying out any device, proposal, scheme or plan for advancing, lending, giving, selling or otherwise disposing of any property by any mode of chance whatever." It is significant that the appellants were not challenging these provisions of the Code, but rather the provincial regulations which made lawful the distribution of machines which their customers took in place of the appellants' machines. The chambers judge, in his decision, stated the three issues before him were: "1. Do the applicants have the requisite standing to sustain the within application? 2. Are the impugned regulations under the Lottery Act and the Theatres and Amusements Act ultra vires the Province of Nova Scotia as being a purported exercise of federal criminal law power? 3. Did the Governor in Council exceed its authority to make regulations as granted by s. 4 of the Theatres and Amusements Act and s. 17 of the Lottery Act, by proclaiming the impugned regulations?" The chambers judge first addressed the second and third questions concluding that they must be answered in the negative. He referred to Furtney v. Attorney General of Canada (1991), 8 C.R. (4th) 121 (S.C.C.) as determinative of the constitutional issue. The regulations were intra vires the legislature. We agree with his conclusions on these two issues. As to the first question, he referred to the principles governing the granting of standing as set out in the Canadian Council of Churches v. Canada et al. (1992), 132 N.R. 241 (S.C.C.). He concluded that there was no serious issue as to the validity of the regulations having regard to the decision in Furtney, supra. Although the chambers judge concluded that the appellants had a financial interest that had been seriously eroded by the lawful contracts entered into between the Atlantic Lottery Corporation and customers of the appellants, a question of public policy arose. That question was whether the appellants, who appeared to be in breach of the Criminal Code, should be accorded standing in proceedings, the object of which would be to make their illegal activities easier. The chambers judge made the following finding which is amply supported by the material in the record. "This is not a criminal prosecution nor a criminal application, however, the evidence clearly indicates that the conduct of the applicants based on a civil burden of balance of probabilities indicates criminal conduct." He concluded that the appellants should not be granted standing in these circumstances. The chambers judge came to the conclusion that in all probability, the challenged regulations would sooner or later come before the courts by way of a defence to a prosecution either under the Criminal Code of Canada or the provincial legislation. The appellants appeal from the exercise by the chambers judge of a discretion to deny them standing. This court has said on several occasions that it will not interfere with a discretionary order, particularly an interlocutory one such as this, unless wrong principles of law have been applied or a patent injustice would result. Simply because we may possibly have reached a decision contrary to that of the judge on the facts is not sufficient. The burden on the appellant is heavy. See Nova Scotia (Minister of Housing) v. Langille and Roberts (1992), 108 N.S.R. (2d) 348 and Minkoff v. Poole and Lambert (1991), 101 N.S.R. (2d) 143 and the cases cited therein. In our opinion, the appellants have failed to show that the chambers judge made any error of law or that any patent injustice arose from the decision which he has reached. We dismiss the appeal with costs $2,000.00 to the respondent, the Attorney General and $1,500.00 to the respondent, Atlantic Lottery Corporation. J.A. Concurred in: Matthews, J.A. Freeman, J.A.