R v Khairullah, 2023 ABCJ 235

In the Alberta Court of Justice Citation: R v Khairullah, 2023 ABCJ 235 Date: 20231108 Docket: 220670780P1 Registry: Calgary Between: His Majesty the King Respondent - and - Amrullah Khairullah Applicant Decision of the Honourable Justice H.A. Lamoureux [ 1 ] The Accused, Amrullah Khairullah, is charged with 12 counts pursuant to the Scrap Metal Dealers and Recyclers Identification Act , SA 2013 c S-3.5 . The charges arise pursuant to section 3(6) of the Act . In

summary, the Crown says the Applicant, Amrullah Kairullah, a scrap metal dealer or recycler, failed within 24 hours of purchasing or receiving restricted metal as defined by the Regulations, or purchasing or receiving scrap metal of a weight that is greater than a weight prescribed in the Regulations, to provide the prescribed information required to be collected under

section 3 of the Scrap Metal Dealers and Recyclers Identification Act , to a peace officer or a law enforcement agency. The 12 counts on the Information cover the period of January 1, 2021 to December 31, 2021. The Defendant, has filed a formal notice pursuant to the Criminal Rules of Court seeking, inter alia a declaration under section 52 (1) of the Constitution Act , 1982 that the Scrap Metal Dealers and Recyclers Identification Act , ( supra) , and Scrap Metal Dealers and Recyclers Regulations A.R. 124/2020 are of no force and effects on two grounds: First, the Legislation and Regulations are ultra vires in that the Province of Alberta lacks jurisdiction to enact this Legislation under

section 92 of the Constitution Act 1867 . Second, the Legislation is contrary to

section 7 and 8 of the Canadian Charter of Rights and Freedoms . This decision deals with the Application by the Defendant for a declaration of invalidity under section 52(1) of the Constitution Act 1982 . [ 2 ] There is no substantial disagreement between the parties with respect to the applicable Legislation and background circumstances leading to the charges. The issues not in dispute are summarized as follows: 1. The Scrap Metal Dealers and Recyclers Identification Act and the related Regulations were enacted in 2019 and 2020 respectively. 2. The Act and the Regulations apply to all scrap metal dealers or recyclers in the Province of Alberta as defined in

Section 1 of the Legislation as “persons engaged in the business of purchasing, trading or bartering scrap metals”. 3. The Legislation imposes Statutory obligations on scrap metal dealers or recyclers to record and report to the police via uploading to

a database, details of every item of scrap metal purchased or received with the exception of scrap metals purchased or received, by the scrap metal dealer from a corporation. 4. The Statute requires the scrap metal dealer, the purchaser of the scrap metal, to record detailed information with respect to the identity of the seller, selling the scrap metal to the dealer.

This includes the individual’s full name, current address, unique identification number on government issued photo identity documents, the date and time of acquisition of the scrap metal, its weight; the make, model, colour, and licence plate of any vehicle in which the scrap metal was delivered, along with other specific identifying information of the seller outlined in the Regulations. 5. All transaction must be made in traceable currency. Cash or electronic currency is prohibited. 6.

The information obtained by the dealer from the seller is required by Statute to be uploaded electronically to a province wide data base which is accessible to police and peace officers.

Section 3 sets out the statutory obligations of the dealer. Section 9 (1) states that “a person who contravenes this Act or Regulations, is guilty of an offence”. It is an offence for a scrap metal dealer to fail to collect the designated information in

Section 3 and upload it to an electronic data base accessible to police. The fines are significant and a sentence of gaol up to one year can be imposed in addition to fines. [ 3 ] Section 3(1) of the Scrap Metal Dealers and Recyclers Identification Act (the Act ), explicitly states that: 3

(1) No scrap metal dealer or recycler shall purchase or receive scrap metal from a person who fails to provide: (

a) proof of identity as prescribed by the Regulations, and (

b) information respecting the transaction prescribed by the Regulations. 9

(1) A person who contravenes this Act or the Regulations is guilty of an offence and liable on conviction: (

a) for a first offence (

i) in the case of an individual, to a fine not exceeding $10,000 or to imprisonment for a term of not more than one year or to both, (ii) in the case of a corporation, to a fine not exceeding $50,000, and (

b) for a 2nd or subsequent offence (

i) in the case of an individual, to a fine not exceeding $25,000 or to imprisonment for a term not exceeding one year or to both, (ii) in the case of a corporation, to a fine not exceeding $200,000.

(2) If a corporation commits an offence under this Act , any officer, director, employee, or agent of the corporation who directed, authorized, assented to, acquiesced in, or participated in the commission of the offence is guilty of the offence and is liable to the punishment provided for the offence whether or not the corporation has been prosecuted for or convicted of the offence.

(3) Unless otherwise provided in this Act , no person may be convicted of an offence under this Act or the Regulations if the person establishes that the person exercised all due diligence to prevent the commission of the offence.

(4) Where an offence under this Act or the Regulations is committed or continued more than one day, the person who committed the offence is liable to be convicted for a separate offence for each day on which the offence is committed or continued. [ 4 ] The Regulations promulgated pursuant to the Legislation defines scrap metals to include copper cables and wires, metal lights, street lighting poles, sewer grates and manhole covers, metal guard rails and handrails, metal grave markers, funeral vases, memorial plaques and monuments, catalytic converters, lead acid batteries and restricted metal as defined in

section 1(

b) of the Regulation. Analytical Framework [ 5 ] The analytical framework for determining the constitutional validity of law in Canada is well established. The recent Supreme Court of Canada case, Murray-Hall v Quebec (Attorney General) , 2023 SCC 10 , determined that the Court is required to first, characterize the law and then on that basis classify the law by reference to the heads of power pursuant to ss 91 and 92 of the Constitution Act 1867 . ( Murray-Hall ( supra) at paragraph 22).

This is a distinct two step analysis. [ 6 ] It is well settled law that when the Court proceeds to characterize the law it is necessary to determine its “pith and substance,” ( Canadian Western Bank v Alberta , 2007 SCC 22 ).

The Court must examine intrinsic evidence, that is the precise wording of the Statute as promulgated, together with extrinsic evidence of Legislative intent which may include Parliamentary or Legislative debate, minutes of Parliamentary or Legislative committees, Government publications and notices. [ 7 ] Examination of the intrinsic nature of the Scrap Metal Dealers Act requires the Court to read the Statute as a whole and not to examine sections of the Statute in isolation, from one another.

[ 8 ] Unfortunately, the Scrap Metal Dealers Act does not contain a

Preamble. The

Preamble is a drafting process which is frequently utilized by enacting bodies to outline the purpose and intent of the Legislation. The Courts examination of the Statute leads to the conclusion that the Statute as a whole is focussed on the statutory obligation of a scrap metal dealer to upload specific data from sellers into an electronic data base accessible bylaw enforcement agencies in the investigation of crime. The Statute includes a definition of persons who have access to the data base in

section 1(b), to include police officers under The Police Act , peace officers appointed under the Peace Officer Act , in circumstances in which the peace officer or police officer is in discharge of powers or duties. There is no broader scope to the Statute in terms of regulating the industry of scrap metal dealers in general or addressing issues of public safety associated with the industry.

The issue of public welfare and safety, a common feature of Regulatory Legislation, is missing in this particular Statute. [ 9 ] The Statute is restricted to a singular purpose: “3(1) No scrap metal dealer or recycler shall purchaser or receive scrap metal from a person who fails to provide the detailed information required by the Regulation”. [ 10 ] This Legislation mandates scrap metal dealers and recyclers to upload details of their purchase transactions to an electronic data base accessible to police.

Police may enter a scrap metal dealer’s premises, their books may be audited or examined, their records may be removed for photocopying. Dealers may be questioned by police and their transactions with a purchaser may be investigated.

The Court of King’s Bench has power under section 6(1) of the Act to compel scrap metal dealers to comply with the actions of police officers and peace officers acting under the Legislation. [ 11 ] From an intrinsic perspective, the purpose and effect of the Provincial Legislation is to create a data base with sufficient particulars, accessible to police, to allow police to investigate crimes with respect to stolen metal products, including copper, catalytic converters, and other metal products.

The Statute intends to address a Criminal law issue – theft of catalytic converters and other valuable metal products which are subsequently sold by thieves to scrap metal dealers for cash. [ 12 ] The Court must next examine extrinsic evidence of purpose and effect of the Statute by review of Legislative Debate, Reports of Legislative committees, and other Government public documents prepared to explain the intent of the Act to the public. [ 13 ] Counsel has provided to the Court relevant extracts from Alberta Hansard as well as publications from the Government of Alberta which focus on Legislative intention. [ 14 ] On May 30, 2012, an Alberta MLA, Mr.

Quest, sought leave to introduce Bill 201, the Scrap Metal Dealers and Recyclers Identification Act with the following statement of the Bill’s intention: This bill addresses scrap metal theft, which is becoming a serious problem in our ever-growing province of Alberta, by requiring scrap metal dealers and recyclers to record information about the identity of individuals selling recycled metal. This information could then be used by peace officers during scrap metal theft investigations, thereby deterring this type of theft in the province. Thank you, Mr.

Speaker. [Motion carried; Bill 201 read a first time], Alberta Hansard 28 th Legislature, 1 st Session May 30, 2012, page 92. [ 15 ] Counsel provided a further extract from Alberta Hansard of the Legislature sittings on June 18, 2020, when The Minister, Mr. Schweitzer, introduced Bill 24 entitled Protecting Alberta Industry from Theft Act , 2020 as follows: Mr. Schweitzer: Thank you, Mr. Speaker. It is my privilege to rise today to request leave to introduce Bill 25, the Protecting Alberta Industry from Theft Act , 2020. Mr.

Speaker, last fall this government took decisive action when we proclaimed the Scrap Metal Dealers and Recyclers Identification Act in response to long-standing calls from Albertans and business owners to make it more difficult for criminals to sell stolen metal. Bill 25 builds on those first steps by amending the Act to help deter metal theft, give law enforcement tools to detect it, and ensure meaningful consequences for people and businesses that deal in stolen property.

I ask that we move first reading of Bill 25. [Motion carried; Bill 25 read a first time] Alberta Hansard 30 th Legislature 2 nd Session June 18, 2020, at page 1494. [ 16 ] There are earlier excerpts in Alberta Hansard which provide commentary on public safety issues which are common features of Regulatory Legislation. However, these public safety issues address the original Criminal Act , the theft of metal. The following excerpt from Alberta Hansard October 29, 2012, was cited by Alberta Justice in its submission to the Court: The Speaker : The Hon. Member for Strathcona-Sherwood Park. Mr. Quest , Thank you Mr.

Speaker. I am pleased this afternoon to move the second reading of Bill 201, the Scrap Metal Dealers and Recyclers Identification Act . This bill addresses a serious problem and has ramifications for all Albertans Mr. Speaker. That problem is the theft of scrap metal. Both individuals and businesses in urban and rural regions are impacted by the theft of scrap metal and these individuals and business are then stuck with the Bill. Mr. Speaker, Bill 201 isn’t just about mitigating the cost of scrap metal theft to law-abiding citizens, businessmen and women.

It’s also about safety and potentially hazardous conditions created when metal is taken from places and from equipment. When this metal goes missing, everything from power outages to injuries or even death can result.

Alberta Hansard October 29, 2012, page 291. [17] In light of the fact that this Legislation contains no

Preamble, the most compelling evidence as to its characterization comesfrom the statements of Legislative intent as published in Alberta Hansard. [18] The Court’s review of the excerpts from Hansard provided to the Court by counsel, together with the review of the Statute aspromulgated, leads to the conclusion that in pith and substance this Legislation can be classified as criminal law.

It possesses thenecessary three pre-requisites: a valid criminal law intent, deterring theft by forcing sellers of metal to reveal identity; a prohibition withrespect to dealers’ purchase of metals without necessary Statutory compliance; and a penalty for breach of the Legislation.

These arefundamental aspects of all Criminal law. [In the matter of a Reference by the Lieutenant Governor in Council to the Court of Appeal ofAlberta for hearing and consideration of the questions set out in Order in Council for 461/96 respecting the Firearms Act, S.C. 1995,chapter 39; [2001] 1 SCR 783 at page 802]. [19] In other words, the dominant purpose of this Provincial Legislation is to deter crime, the theft of metal products.

The Court,in its review of the Legislation, is unable to see any other intent behind the passage of this Statute. [20] Counsel for Alberta Justice submitted that in order for the Court to arrive at this conclusion that the Statute would need tocreate powers for police to conduct a criminal investigation.

In fact, the evidence given in the voir dire by Andrea Brand an intelligenceanalyst employed by the Criminal Intelligence Service of Alberta with the task of monitoring the data base created by Statute, expresslyconfirms that the data base will be accessible to police agencies within the province of Alberta, for exactly that purpose. [21] The Court agrees with the submission by Mr.

Sankoff, co-counsel for the Defendant, that there is no entity under the Statuteexpected to perform any function save and except the mandated gathering of data accessible to law enforcement, in the investigation ofcrime of the theft of metal. [22] The Court now proceeds to classify the subject matter of the Legislation with reference to Federal and Provincial heads ofpower under the Constitution in order to determine whether the Statute is intra vires the Legislature and therefore valid Legislation.

Thisis the approach explicitly outlined in the Supreme Court of Canada decision references R v Greenhouse Gas Pollution Pricing Act, 2021SCC 11.

The Greenhouse Gas Pollution Pricing decision (supra) confirms that sections 91 and 92 of the Constitution, in dividingLegislative powers between Parliament and the Provincial Legislatures, clearly conferred broad powers on the provinces while: “ at the same time reserving to the Federal Government powers better exercised in relation to the country as a whole to provide forCanada’s unity” [23] The principle of Federalism is based on the recognition that, within their spheres of jurisdiction, provinces have the power todevelop their societies through the exercise of significant provincial power in relation to “Property and Civil rights” under section 92(13).

Federal power cannot be used in a manner that effectively eviscerates Provincial power. Greenhouse Gas Pollution Pricing (supra)at paragraph 49. The division of Federal and Provincial powers under the modern

interpretation requires the Court to engage in a courseof reasoning which embodies a flexible view of federalism what is best described as a modern form of cooperative federalism thataccommodates and encourages inter governmental cooperation, 2011 Securities reference paragraph 56-58”, Greenhouse Gas PollutionPricing, (supra) at paragraph 50. [24] It is not correct in law, under the classification stage of analysis, to fail to recognize that the provinces have jurisdiction tomake laws in relation to matters that touch on purposes that may otherwise constitute valid criminal law purposes. [25] In R v Murray-Hall v Quebec (Attorney General), 2023 SCC 10. “It is recognized that the provinces have jurisdiction to make laws in relation to several matters that touch on purposes that otherwiseconstitute valid criminal law purposes.” In the Margarine Reference, Rand, J referred to “public peace, order, security, health, moralityas the ordinary though not “exclusive” ends served by criminal law.

Although public peace, order, security, health and morality areclassic criminal law purposes, the provinces may consider such imperatives in designing their own regulatory schemes.” [26] Further, the Court recognizes the presumption of the constitutional validity of legislation as the cardinal principle of thedivision of powers. According to the presumption, every legislative provision is presumed to be intra vires the level of government thatenacted it.

R v Murray-Hall (supra) at paragraph 79. [27] Counsel for Alberta Justice argues that the Statute in question can be classified under Provincial powers granted pursuant tosections 92 (13) or 92 (14) of the Constitution Act. [28] Alberta Justice urges the Court to conclude in step two of the analysis that the Statute is not legislating conduct from acriminal law perspective, but rather is focused on regulating individuals who are in the scrap metal business and deterring, incidentally,crime by regulating the business of dealers in scrap metal.

This would place the law in classification as falling squarely within the powersof the province with respect to property and civil rights. [29] In the alternative, Alberta Justice submits that the legislation creates a statutory tool to suppress conditions likely to favour thecommission of crime.

Alberta Justice submits that looking at the legislation from this perspective, the Statute falls clearly within thepowers of the province with respect to the administration of Justice. [30] The Supreme Court has issued a number of decisions which are examples of the interplay between Provincial legislativejurisdiction over property and civil rights, and Federal legislative jurisdiction over criminal law and procedure.

In the decision Chatterjeev Ontario (Attorney General), 2009 SCC 19, the Court discussed this overlap with reference to earlier decisions in Bedard v Dawson,(1923) (SCC), SCR 681, Switzman v Elbling, (1957) (SCC), SCR 285, and Attorney General of Canadav Dupond v City of Montreal, (1978) (SCC), 2 SCR 770.

[31] The question, is whether the provincial legislation is classified as enacted under property and civil rights or administration ofjustice with only incidental impact on criminal law and procedure as explained in General Motors of Canada v City National Leasing,

(1989) SCR 641; or whether the provincial Statute purporting to suppress crime has become itself criminal law without properclassification under administration of justice or property and civil rights. [32] Mr. Sankoff, co-counsel for the Applicant, submits that the answer to this dilemma may be determined in part by examiningthe nature of the enforced data collection and information required to be recorded under section 3 (1) of the Statute. Mr. Sankoff alsopoints to the investigative powers given to police and peace officers to access the data base created by the legislation.

There is nocondition precedent such as reasonable and probable grounds, there is a broad scope of personal data to be provided by sellers to metaldealers which would most certainly aid in the investigation of the crime of metal theft. Indeed, the Legislation goes so far as to requiredealers to provide information as to the motor vehicle that the seller arrived in to effect the sale to the dealer.

There could be no otherreason for acquiring the make, model, color and licence plate of the vehicle of which the scrap metal is delivered other than giving policeimportant information to allow them to track illicit sellers of stolen scrap metal. Mr. Sankoff, submits that this broad data base ofinformation has the effect of allowing police to track any Albertan, interacting with scrap metal dealers without reasonable and probablegrounds, and without a warrant.

Potentially, the data pool of information gathered by virtue of this Legislation is enormous and withoutadvance oversight by the Charter of Rights and Freedoms. [33] Alberta Justice submits that even if the data base gathers the information that is mandated under the Statute, that the Statutewould still need to create a power for police to conduct a criminal investigation in order to be classified as criminal law.

The Courtconcludes that the Statute does in fact create a power given to police to conduct criminal investigations with respect to theft metalproducts by creating a data base of information collected from scrap metal dealers. Exhibit 4 in the voir dire is a bulletin published bythe Criminal Intelligence Service of Alberta distributed to dealers and recyclers in scrap metal.

The criminal law intent to the legislationis confirmed by the following statements of the Criminal Intelligence Service Alberta. “in order to mitigate the issue of quick illegal profits by thieves, the Regulations have prohibited cash payments on metals identified inthe Regulations. Cash transactions are difficult to trace, thus impeding law enforcement investigation efforts.

Prohibiting cashtransactions discourages thieves from bringing stolen metal to a recycler or dealer and acts as a deterrent from doing it in the first place.” [34] Interestingly, there is only one reported decision in Canada provided to the Court by counsel which is analogous to the issue inthis case. The case Fredericton (City) (

v) Re- purchase Shop Inc, 2003 Carswell NB 668. This is a decision of the Provincial Court ofNew Brunswick. Although the case does not deal with metal dealers it does deal with the classification of a bylaw passed by the city ofFredericton respecting “Pawn brokers and second-hand dealers in the city of Fredericton”. The issue in this decision was whether the cityhad the power and authority to regulate pawn brokers under the Municipalities Act.

The bylaw in sub section 5 (4) required pawn brokersto prepare reports recording all transactions involving goods received by the dealer during the previous seven days containing detailedinformation such as the make, model and serial number of goods pawned or received, the precise date and hour of the receipt of thegoods, the main residence and identity of the seller of the goods, including proof of identification and the signature of the seller. Thebylaw required this information to be delivered to the chief of police or his designate every Monday of every week.

In the trial there wastestimony from police assigned to the community crimes

section which confirmed that these reports filed by pawn brokers were used tolocate and detect stolen goods and to return the goods to the rightful owner. Testimony was provided that the information and the reportswould be used in criminal investigations. The required reports provided information that was needed by police to trace the possessions ofstolen goods subsequent to the theft. The City of Fredericton argued that criminal aspects of this bylaw were ancillary, and the intent wasto deal with property that is the reuniting of stolen property with its rightful owner.

The Court disagreed and determined that the purposeof the bylaw was to require pawnbrokers to act “for all intents and purposes, as agents of the police” Fredericton (City) (supra) atparagraph 12. The Court provided succinct and compelling reasons for its conclusion when it stated “It forces the pawnbroker to provideinformation to the police for the purpose of police investigations of criminal offences which would not otherwise be available to thepolice outside the search warrant framework.

This is not an ancillary aspect of the bylaw, a side effect, so to speak, of a valid enactmentrelating to property and civil rights. It is the purpose of the sub section” Fredericton (City) (supra) at paragraph 12. The Court concludedthat the purpose and intent of the bylaw was criminal and ultra vires the power of the municipality and thus not within Provincial powers.The case before this Court mirrors the structure and requirements of the Fredericton bylaw.

This is established in the affidavit and theoral cross-examinations of Andrea Brandt employed by RCMP, Edmonton police and the Calgary police as an intelligence analysist forthe Criminal Intelligence Service of Albera. The data base in this case according to the testimony of Ms.

Brandt, creates a separate loginfunction for police solely for the purpose of investigating the crime of theft. [35] In the Courts view, this Legislation clearly falls with within the prohibition referred to by the Supreme Court of Canada in R vMurray-Hall (supra) while referring to R v Morgentaler (1988) (SCC), 1 SCR 30; “among other things, Morgentalerreiterated that the guiding principle that the province may not invade the Criminal law or to fill perceived defects or gaps therein”. [36] The Court concludes that the facts in this case are distinguishable from the decision of the Alberta Court of Appeal in Smith vSt.

Albert (City), 2014 ABCA 76. In the Smith decision, the Alberta Court of Appeal determined that the double aspect doctrine wastriggered as set forth in the Supreme Court of Canada case Multiple Access Ltd v McCutcheon, (1982) 2 SCR 166 at 181; “When the Court considers that the federal and provincial features of a challenged rule are of roughly equivalent importance so thatneither should be ignored respecting the division of legislated powers the decision is made that the challenged rule could be enacted byeither the federal parliament or provincial legislature.” [37] The Court of Appeal in Smith v St.

Albert (supra) held that the bylaw had valid Provincial and Federal aspects which were ofroughly equal importance, allowing the Court of Appeal to apply the double aspect doctrine to uphold the validity of the bylaw. [38] Counsel for the Applicant, Mr. Sankhoff, in his submissions, argues that the double aspect doctrine as considered in the Smithdecision (supra) does not apply to the facts of this case. There is only one compelling interest, and that is criminal law. The legislationdoes not truly regulate trade and does not address property and civil rights or administration of justice in a public manner.

The Courtagrees with counsel for the Applicant, Mr. Sankhoff. The double aspect doctrine does not apply in this case. The Court concludes thatthe Scrap Metal Dealers and Recyclers Identification Act and the Regulations, promulgated pursuant to the Statute, falls solely within the

Federal criminal law power under

section 91 of the Constitution Act, 1867. [39] The Applicant seeks a declaration under

section 52 of the Constitution Act 1982. The Court declares that the Scrap MetalDealers and Recyclers Identification Act, S.A. 2013 cF-3.5. The Scrap Metal Dealers and Recyclers Regulations S1976 ALTASCAD165 , 1, AR 24-2020 are of no force and effect as the Legislation is ultra vires the province of Alberta. Heard on November 8, 2023 Dated at Calgary, Alberta this 8th day of November 2023. H.A. Lamoureux A Justice of the Alberta Court of Justice Appearances: A. Rankin, N. Gartke for the Crown and C. Fair, P. Sankoff for the Accused