Thorkelson v The College of Pharmacists of Manitoba et al, 2023 MBCA 69

Citation: Thorkelson v The College of Pharmacists of Manitoba et al, 2023 MBCA 69 Date: 20230809 Docket: AI22-30-09790 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Diana M. Cameron Madam Justice Jennifer A. Pfuetzner Associate Chief Justice Shane I. Perlmutter ( ad hoc ) BETWEEN : kristjan eric thorkelson ) ) J. A. Pollock and (Applicant) Respondent ) A. A. E. Sharpe ) for the Appellants - and - ) ) T. J. Kochanski and the college of pharmacists of ) J. A.

Sokal MANITOBA, the council to the ) for the Respondents college of pharmacists of ) manitoba and the complaints ) Appeal heard: committee of the college of ) February 17, 2023 pharmacists of manitoba ) ) Judgment delivered: (Respondents) Appellants ) August 9, 2023 On appeal from 2022 MBQB 29 PERLMUTTER ACJ [ 1 ] The respondent, the College of Pharmacists of Manitoba (the College), appeals the application judge’s judgment setting aside a decision of the respondent, the Council to the College of Pharmacists of Manitoba (the Council), in which the Council cancelled the applicant’s pharmaceutical licences on a finding he had been convicted of an offence that is relevant to his suitability to practise pharmacy.

The College also appeals part of the costs award against it. If the College is successful on its substantive appeal, the applicant cross-appeals the underlying finding of the application judge. Background [ 2 ] The College is a self-regulated body created under The Pharmaceutical Act , CCSM c P60 (the Act ). The Council is the governing body of the College. The applicant is a pharmacist. The CanadaDrugs.com Group of Companies (CD.com Group) was a group of related entities, of which the applicant was the ultimate beneficial owner.

Included in CD.com Group were CanadaDrugs.com LP (CanadaDrugs) and River East Supplies Ltd. (River East). River East was incorporated and carried on business in the United Kingdom. [ 3 ] In October 2011, River East purchased Avastin, a cancer-treating drug, from CareMed, a licensed wholesaler in Denmark. River East sold the Avastin to a US-based medical clinic. In November 2011, River East was advised the Avastin did not appear right and had the suspect Avastin returned to it.

The Medicines and Healthcare Products Regulatory Agency (MHRA), the United Kingdom regulator, obtained possession of the suspect Avastin that had been returned to River East and notified the United States Food and Drug Administration (FDA), the US regulator, about the suspect Avastin. With the issuance of an FDA press release in February 2012, the applicant and River East became aware that some of the suspect Avastin lacked active ingredient. MHRA determined there had been no wrongdoing on the part of River East or the applicant.

Health Canada, the Canadian regulator, also conducted an investigation and did not take any action. Following investigations by the College in 2012, and again years later, no professional misconduct charges were laid against the applicant. [ 4 ] In 2015, the United States Department of Justice issued indictments against the applicant, River East, CanadaDrugs,

another CD.com Group entity, and various CD.com Group employees. As the beneficial owner of River East, in 2018, as part of a plea agreement, the applicant pled guilty in the United States District Court for the District of Montana to the offence known in Montana as misprision of a felony. During the Montana Court proceedings, the prosecutor noted there were no victims of the Avastin incident identified.

Neither the applicant nor any employee of River East nor the other corporate accused were aware that the Avastin lacked active ingredient when it was sold by River East. [ 5 ] One of the necessary elements of misprision of a felony is taking steps to conceal the felony from another.

The applicant admitted that, in March 2012, after the FDA press release, he sent an email to employees of CanadaDrugs, which included: CanadaDrugs.com has not been contacted by any U.S. authorities whatsoever as it has absolutely no connection to selling or offering Avastin, given that CanadaDrugs.com has never offered that product for sale, and deals only in prescription maintenance medications to individuals. [ 6 ] While the body of this email was accurate, the signature used by the applicant indicated he was writing in his capacity as CEO of CD.com Group rather than solely as a representative of CanadaDrugs.

It would not have been accurate to state that no member of CD.com Group had been involved in the purchase or sale of Avastin given River East’s role in these activities. As part of the plea agreement, the applicant admitted before the Montana Court that this email constituted

an act of attempted concealment. As a result, the Montana Court sentenced the applicant to 60 months’ probation, with the first six months to be served as home detention, and a $250,000 fine. The Council’s Decision [ 7 ] In January 2019, the College registrar notified the applicant that the College had received information that he had been convicted of an offence that could be relevant to his suitability to practise pharmacy or operate a pharmacy and the Council would consider the matter in accordance with section 23(3) of the Act .

Section 23(3) of the Act provides: Registration or licence may be cancelled if conviction 23(3) If a person has been convicted of an offence that is relevant to his or her suitability to practise pharmacy or operate a pharmacy, the council may direct the registrar to cancel (

a) the person’s certificate of registration; (

b) any licence or licences held by the person; or (

c) the person’s certificate of registration and one or more of the licences held by the person; but it must first notify the person that it intends to do so and give the person an opportunity to make representations.

The registrar must give the person and his or her employer, if any, written notice of any cancellation. [ 8 ] In June 2019, the registrar advised the applicant that “a meeting with Council [under section 23(3) ] [was] not a hearing, evidence [would] not be called and the person, or his or her legal counsel, [should] not be entitled to direct questions to Council in the manner that a witness [was] questioned at a hearing”. [ 9 ] On September 18, 2019, the Council meeting took place.

At the Council meeting, the applicant’s counsel provided written and verbal representations. [ 10 ] On November 26, 2019, the Council rendered its decision directing the registrar to cancel all licences held by the applicant. In its decision, the Council found that the applicant was convicted of an offence as contemplated by section 23(3) and that the offence was relevant to his suitability to practise pharmacy. Application Judge’s Decision [ 11 ] The applicant appealed the Council’s decision to the application judge pursuant to

section 25 of the Act . The application judge set aside the Council’s decision. In so doing, she determined that the appeal was a new hearing with no deference owed to the Council’s decision. Like the Council, the application judge found that, for the purpose of section 23(3) , misprision of a felony was an offence that was relevant to the applicant’s suitability to practise pharmacy.

However, in applying sentencing considerations for professional misconduct, the application judge concluded that cancellation of the applicant’s pharmacist licence was not an appropriate penalty. [ 12 ] Following a further appearance before the application judge, costs were ordered in favour of the applicant. These included costs in the amount of $8,000 for preparation of the application in accordance with section 5(2)(

h) of the Court of King’s Bench Tariff A for Class 3 proceedings rather than the amount of $2,505 requested by the applicant. Issues

[ 13 ] The College’s notice of appeal gives rise to the following issues: 1. Did the application judge err in law in determining the appeal was a new hearing such that she erred by failing to show deference to the Council’s decision? 2. Did the application judge err in law by conflating the administrative authority of the Council under section 23(3) of the Act with the disciplinary and punitive authority of a discipline panel and, thus, also err by applying case law from various disciplinary panels? 3. Did the application judge err in law by considering the penalty imposed by the Montana Court? 4.

Did the application judge err in law or make a palpable and overriding error by finding that comments by the prosecutor and judge, as recorded in the transcript of the Montana Court proceedings, were not proper evidence on the appeal? 5. Did the application judge err in law or make a palpable and overriding error by ordering costs in favour of the applicant for preparation of the application in the amount of $8,000 rather than the requested amount of $2,505? [ 14 ] The applicant’s cross-appeal gives rise to the following issues: 1.

In light of the applicant’s success before the application judge, can he cross-appeal salient findings contained in the decision? 2. Did the application judge err in law in concluding that the term “offence” in section 23(3) of the Act encompasses misprision of a felony? 3. Did the application judge make a palpable and overriding error in concluding that the misprision of a felony conviction is relevant to the applicant’s suitability to practise pharmacy? Standard of Review [ 15 ] The applicable standard of review depends on the nature of the question in issue.

Because, for reasons that follow, the application judge’s decision was based on a first instance fresh hearing, the standard of review is well-established . Questions of law, which include questions of statutory

interpretation, are reviewed on the correctness standard. Findings of fact, including inferences drawn from the facts, are reviewed for palpable and overriding error. Absent an extricable error of law, the standard of palpable and overriding error also applies to questions of mixed fact and law. Whether a set of facts satisfies a legal test is a question of mixed fact and law reviewable on that deferential standard ( see Housen v Nikolaisen , 2002 SCC 33 at paras 8 , 10, 26-37).

Analysis Did the Application Judge Err in Law in Determining the Appeal Was a New Hearing Such That She Erred by Failing to Show Deference to the Council’s Decision? [ 16 ] It is the College’s position that the application judge erred by not applying the appellate standard of review and showing deference to the Council’s decision to cancel the applicant’s licence. Instead, the application judge treated the applicant’s appeal as a new hearing. This is a matter of statutory

interpretation of the Act . As such, it is subject to the correctness standard of review. [ 17 ] As stated in Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 , “where the legislature has indicated the applicable standard of review, courts are bound to respect that designation, within the limits imposed by the rule of law” (at para 35). [ 18 ] The right to appeal the cancellation of a pharmacist licence under

section 23 of the Act is provided in

section 25 , as follows: Appeal to court 25 A person whose certificate of registration, pharmacist licence or pharmacy licence is cancelled or suspended under

section 23 or 24 may appeal the cancellation or suspension to the court, in which case

section 22 applies with the necessary changes. [ 19 ]

Section 22 of the Act (referred to in

section 25 ) provides for an appeal of a decision by the Council to not approve certain forms of registration or a pharmacist licence under

section 21 of the Act .

Section 22 states in part: Appeal to court 22(1) A person who made an appeal under

section 21 may appeal the decision of the council to the court by

(

a) filing a notice of application in the court; and (

b) serving a copy of the notice of application on the college; within 30 days after receiving notice of the council’s decision under subsection 21(7). Appeal heard as a new matter 22(4) The court must consider the appeal as a new matter. Powers of court on appeal 22(5) On hearing an appeal, the court may (

a) set aside, vary or confirm the decision; (

b) make any decision that in its opinion should have been made; or (

c) refer the matter back to the council for further consideration in accordance with any direction of the court. [20] To begin, the application judge correctly identified the modern principle of statutory

interpretation, as enunciated inVavilov at para 117, quoting Rizzo & Rizzo Shoes Ltd (Re), (SCC), [1998] 1 SCR 27, which stated that the words of astatute be read “in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the objectof the Act, and the intention of Parliament” (at para 21). [21] The application judge considered the various interrelated provisions of the Act, including that a licence may becancelled either under

section 23 (as in the case at hand) or under the disciplinary process outlined in

Part 6 of the Act. She noted thatsection 25 provides for an appeal of a decision under

section 23 to the Court of King’s Bench, “in which case

section 22 applies with thenecessary changes” (at para 32). Section 22(4) provides that the “court must consider the appeal as a new matter.” The applicationjudge compared and contrasted the nature of the administrative decisions under sections 21 and 23 regarding registration andcancellation, as compared to under the disciplinary process.

In particular, the application judge commented on the differences inprocedure, noting that, unlike the process under sections 21 and 23, the disciplinary process “is replete with most of the evidentiary andprocedural safeguards of a court, and vests broad discretion in the hearing panel to impose a penalty” (at para 40). [22] The College argues that the intent of the Legislature under

section 25 was to engage the procedural direction in section22(1) that the appeal of a decision of the Council is commenced by filing and serving a notice of application. The College submits that“with the necessary changes” in

section 25, was to signify that the reference to an appeal considered as a new matter under section 22(4)only applies to an appeal from a non-approval of an application for registration or for a pharmacist licence under

section 21, and not to anappeal of a cancellation under section 23(3). That is, only the procedural requirements to appeal outlined in section 22(1) apply to anappeal of a Council decision rendered under section 23(3) (like in this case) and not section 22(4) (an appeal considered a new matter). The College argues that its

interpretation of these sections fits with the scheme and object of the Act and the intention of the Legislatureregarding the College as a self-regulatory body. [23] However, in my view, the

interpretation of

section 25 advanced by the College would not be reading the words insection 25 “in their grammatical and ordinary sense” (at para 23). It would both ignore and be contrary to the clear and unambiguouswording of

section 25 that “section 22 applies” to an appeal of the cancellation under

section 23. [24]

Section 25 does provide that

section 22 “applies with the necessary changes.” However, there is no basis to concludethat a “necessary” change is to limit

section 22 for an appeal of a cancellation under section 23(3) to only the application of section22(1). Statutory phrases like “necessary changes” generally apply to points of detail, meaning that matters or things are generally thesame, but to be altered when necessary, as to names, offices and the like (see Dorn v Association of Professional Engineers andGeoscientists of the Province of Manitoba, 2018 MBCA 18 at paras 61-62; and Bessette v British Columbia (Attorney General), 2019SCC 31 at para 69).

This was recognized by the application judge who correctly noted that “the standard of review to be applied onappeal is not a point of detail” (at para 38). [25] As well, to accept the College’s position that only section 22(1) applies to an appeal of a Council decision under section23(3) would also render other subsections of

section 22 inapplicable. Section 22(5) sets out the powers of the Court that is hearing theappeal (such as to set aside, vary or confirm the Council’s decision to cancel a licence). To render this

section inapplicable would resultin a judge hearing an appeal from a Council decision to cancel a licence under section 23(3) lacking the description of their powers onappeal. An

interpretation leading to such a consequence would be illogical and incoherent and, thus, absurd. Of course, “[i]t is a wellestablished principle of statutory

interpretation that the legislature does not intend to produce absurd consequences” (Rizzo at para 27).

[26] The

interpretation of

section 25 employed by the application judge also fits contextually with regard to the entire Act. For example, under section 59(1), an appeal from a finding or order of a panel of the discipline committee is to the Court of Appeal.

Section 59(3) provides that such an appeal “must be founded on the record of the hearing before the panel and the decision of thepanel.” Section 47(3) provides that “oral evidence given at the hearing [before the panel] must be recorded.” In my view, the lack of asimilar reference to an appeal from a decision rendered by the Council under section 23(3) being “founded on the record” (section 59(3)of the Act), with this appeal to the Court of King’s Bench (and not to the Court of Appeal), accords sensibly with such an appealconsidered as a “new matter” (section 22(4) of the Act). When

section 25 is read in this context, the

interpretation of

section 25 providedby the application judge fits harmoniously with the scheme and object of the Act and the intention of the Legislature. [27] Here, the Act is clear on the standard of review—the appeal is to be considered as a new matter. As such, theapplication judge could redetermine the facts on the basis of the fresh evidence tendered on appeal without deference to the findingsunder appeal (Donald JM Brown & Hon John M Evans with the assistance of David Fairlie, Judicial Review of Administrative Action inCanada (Toronto: Thomson Reuters, 2023) vol 2 (loose-leaf updated 2023, release 1) pt V, ch 14 at

section 14:62). [28] I am satisfied that the application judge correctly interpreted sections 25 and 22 of the Act and the nature of the hearingbefore her. Did the Application Judge Err in Law by Conflating the Administrative Authority of the Council Under Section 23(3) of the Act With theDisciplinary and Punitive Authority of a Discipline Panel and, Thus, Also Err by Applying Case Law From Various DisciplinaryPanels?

Did the Application Judge Err in Law by Considering the Penalty Imposed by the Montana Court? [29] The College submits that the application judge committed a reviewable error by treating the cancellation of a licenceunder section 23(3) as disciplinary or punitive rather than administrative, and applying principles and precedent respecting penalty inprofessional misconduct cases. The College’s counsel analogized the applicant’s “opportunity to make representations” to the Councilunder section 23(3) as a “show cause” hearing.

The College argued that, once the application judge found the applicant was “convictedof an offence that [was] relevant to his . . . suitability to practise pharmacy” under section 23(3), in exercising her discretion to determinewhether to cancel his licence, she erred by considering the penalty imposed by the Montana Court. [30] The application judge’s decision whether to cancel the applicant’s licence is discretionary.

Absent a reversible error offact or law or a decision that is so wrong as to yield a truly unjust result, appellate intervention is not warranted (see Perth Services Ltd vQuinton et al, 2009 MBCA 81 at para 28; and Dhalla v College of Physicians and Surgeons of Manitoba, 2022 MBCA 7 at paras 67-71). [31] The application judge appropriately noted that “cancellation of a professional licence is an extreme penalty and shouldonly be imposed in extremely serious cases” (at para 74).

Indeed, in its decision, the Council acknowledged that the cancellation of apharmacist’s licence is “the most serious penalty that may be imposed on a pharmacist”. It is apparent to me that cancellation of alicence under section 23(3) is as severe and financially and professionally punitive as cancellation of a licence under the College’sdisciplinary process under

Part 6 of the Act. In this context, I see no reason in principle to differentiate between cancellation under theprocess in section 23(3) and cancellation under the disciplinary process. As such, I am of the view that the application judge made noreversible error in applying the “relevant sentencing considerations for professional misconduct” (at para 72), as enumerated in Jaswal vNewfoundland (Medical Board), (NL SC), 1996 CarswellNfld 32 (SC (TD)).

These considerations properly alignwith the objectives to be balanced by a professional disciplinary body imposing a penalty as provided by this Court in Dhalla at paras 72-84. [32] The College also argues that the application judge erred in law or made a palpable and overriding error by consideringthe penalty imposed by the Montana Court. The application judge wrote (at para 83): . . . [The applicant] has accepted responsibility for his actions, and has been punished for them.

The penalty imposed on him by the Courtin Montana was substantial- one might say severe- and also brought his internet pharmacy business to an end. He also has suffered agood deal of negative publicity about these events. [33] One of the sentencing considerations for professional misconduct is whether the applicant already suffered other seriousfinancial or other penalties as a result of the allegations having been made.

Accordingly, it was open to the application judge to considerthe penalty imposed by the Montana Court (see Jaswal at para 36). [34] The College argued that the application judge gave such inordinate weight to the penalty imposed by the MontanaCourt that she effectively excluded consideration of all other pertinent factors.

However, I am not persuaded by this submission as theapplication judge’s reasons clearly reflect that, in addressing whether the applicant’s licence should be cancelled, she also appropriatelyconsidered the following relevant factors: • No one at River East knew or had reason to believe the Avastin was defective. • River East’s management acted quickly and appropriately as soon as it learned there was a problem. • The applicant believed both the UK and American authorities were notified and, in fact, they both were notified. • MHRA concluded that no one at River East or CareMed had acted improperly. • Health Canada decided to take no action. • The applicant had been a pharmacist for almost 30 years with no prior disciplinary history. • The applicant has given back to his community.

[ 35 ] As well, the application judge considered case law where pharmacists were convicted of offences. She noted that the College was not able to point to any decisions where conduct of a comparable nature resulted in a pharmacist losing their licence. [ 36 ] In essence, the College is asking this Court to reweigh the pertinent considerations applied by the application judge . However, as I have explained, a highly deferential standard of review is applicable. [ 37 ] In

summary, I am not persuaded that the application judge misdirected herself in law or committed a reviewable error of fact or rendered a decision so clearly wrong that it amounts to an injustice.

Did the Application Judge Err in Law or Make a Palpable and Overriding Error by Finding That Comments by the Prosecutor and Judge as Recorded in the Transcript of the Montana Court Proceedings Were Not Proper Evidence on the Appeal? [ 38 ] The College submits the application judge erred in finding the comments by the prosecutor and judge, reflected in the transcript of the Montana Court proceedings, to the effect that the applicant was motivated by profit was not proper evidence on the appeal before her.

It would be an error in law for the application judge to have not applied the correct principles regarding admissibility of evidence. However, these comments were not evidence. They were made by the Montana prosecutor and judge after the applicant’s guilty plea and did not form the basis of his plea. In any event, I do not see how these comments are sufficiently relevant or probative of the issues before the application judge to have even been considered admissible as evidence.

In sum, I am not persuaded that the application judge committed a reviewable error in not considering these statements as proper evidence before her.

Did the Application Judge Err in Law or Make a Palpable and Overriding Error by Ordering Costs in Favour of the Applicant for Preparation of the Application in the Amount of $8,000 Rather Than the Requested Amount of $2,505? [ 39 ] The College argues that the application judge erred in law or made a palpable and overriding error when, on her own initiative, as part of the total costs award in favour of the applicant, she increased the costs award for the preparation of the application to $8,000, whereas the applicant requested the sum of $2,505 based on the tariff. [ 40 ] Costs are at the discretion of a judge pursuant to section 96(1) of The Court of King’s Bench Act , CCSM c C280 , with this discretion to be exercised within the parameters of the factors set out in r 57.01 of the MB, Court of King’s Bench Rules , MR 553/88 (see Bibeau et al v Chartier et al , 2022 MBCA 2 at para 88 ).

As such, g reat deference is owed to an award of costs. As stated in Ducharme v Borden , 2014 MBCA 5 , “[t]he exercise of a judge’s discretion on costs cannot be disturbed on appeal absent an error in principle or if the costs order is plainly wrong” (at para 23). [ 41 ] With respect to this aspect of the costs award, the application judge provided her reasoning for increasing the amount for this tariff item, while acknowledging that it was in excess of what the applicant was asking and recognizing that this was unusual. She wrote as follows: . . .

I have thought for some time that the way the rules are or the tariff is structured it often does not adequately recognize the degree of preparation needed. . . . So for that reason, I am going to award . . . a lump sum amount– for the preparation aspect of this proceeding. In all the circumstances, and I appreciate this might be rather arbitrary, but I am going to allow $8,000 for this as part of costs. I think that probably gets the applicant to a position that is in excess of what he was asking . . ..

I recognize it is rather an unusual thing, but I, also say this as a matter of principle, that we, collectively – judges and counsel and parties, need to recognize that extraordinary proceedings that [involve] highly complex, unusual issues, complex facts, large number of issues, the particular questions of law, and their importance results in a very intensive and expensive preparation process. The time and therefore the expense necessary to do them well should be recognized.

I think that, in the end, then this is a fair and just result. [ 42 ] In my view, this ground of appeal raises an issue of procedural fairness. The application judge committed an error in principle by departing upward from the tariff amount requested by the applicant without first alerting counsel of her inclination to do so and without requesting submissions for or against this departure ( see Ducharme at para 25 ). That said, and now having heard from counsel regarding this issue, on a fresh review, I am satisfied that the application judge applied a principled and defensible approach in awarding costs.

The record demonstrates that the complexity of this proceeding, the importance of the issues and the volume of materials are well beyond that reflected by the costs tariff for preparation of this application. The application judge observed that this application could have appropriately been adjudicated through a five or six-day trial given the number of issues and the many parties involved.

I agree that the lengthy evidentiary record reflects the equivalent of several days of trial and, as reflected by the analysis above, substantive legal argument was required on unique and novel questions. [ 43 ] Accordingly, while this aspect of the College’s appeal is allowed, the amount of costs awarded by the application judge will remain as she ordered. Conclusion [ 44 ] For the reasons discussed, there is no basis to interfere with the application judge’s decision on the appeal of the substantive issues.

The application judge erred in principle in departing upward from the tariff amount of costs for preparation of the application requested by the applicant without first alerting counsel of her inclination to do so and without requesting submissions for or against this departure. Having now heard from counsel on the issue of costs, I am satisfied that an increase in costs in the same amount awarded by the application judge is fair and just. [ 45 ] As the applicant was successful overall in the result, there is no need to decide his cross-appeal.

[ 46 ] I would dismiss the appeal with costs. ________________________________ ACJ I agree: JA I agree: JA