



COURT OF APPEAL FOR ONTARIO

CITATION: Ontario College of Pharmacists v. 1724665
    Ontario Inc. (Global Pharmacy Canada), 2013 ONCA 381

DATE: 20130610

DOCKET: C56771 and
    C56805

Gillese, Epstein and Lauwers JJ.A.

IN THE MATTER of the
Drug and
    Pharmacies Regulation Act
, R.S.O. 1990, c.H.4, s. 162, and the
Health
    Professions Procedural Code
, s. 87, being Schedule 2 to the
Regulated
    Health Professions Act
,
1991
, S.O. 1991, c. 18, and deemed to be
    part of the
Pharmacy Act
,
1991
, S.O. 1991, c.36;

BETWEEN

Ontario College of Pharmacists

Applicant (Respondent)

and

1724665 Ontario Inc., c.o.b. as Global Pharmacy
    Canada,
RX Processing Services Inc.
,
Richard Petko
,
Frank Stacho
,
Global Pharmacy Canada, Inc., David Billings and Wade Onuffer

Respondents (
Appellants
)

Alan J. Lenczner, Q.C.,  and Dena N. Varah, for the
    appellants RX Processing Services Inc., Richard Petko and Frank Stacho

John J. Chapman, for the appellants Global Pharmacy
    Canada, Inc., David Billings and Wade Onuffer

Linda R. Rothstein, Nick Coleman and Jean-Claude Killey,
    for the respondent

Heard: April 22, 2013

On appeal from the judgment of Justice Janet Wilson of
    the Superior Court of Justice dated March 15, 2013, with reasons reported at
    2012 ONSC 5804.

Gillese
    J.A
.:

[1]

Global Pharmacy Canada is the trade name of a business that uses the
    internet to market the retail sale of generic prescription drugs to Americans. 
    Although the seller of the drugs is now a Belize company, on its website, the
    seller refers to itself as Global Pharmacy Canada and directs customers to
    contact its dedicated staff of friendly customer service agents located in
    Toronto, Canada.  The dedicated staff is actually located in a call centre
    in Mississauga, Ontario.  They take the customer orders and process payments
    for the drugs.  They also ensure that the orders are filled in India and
    shipped directly to the customers.

[2]

Advertising is done through the internet and directly through
    promotional materials distributed in the United States.  The customers are
    American.  The drugs are sourced in India and never enter Canada.  The
    corporations and individuals involved in operating Global Pharmacy Canada are
    scattered among Belize, the United States and Ontario.

[3]

Are those companies and individuals subject to the jurisdiction of the
    Ontario College of Pharmacists?  Are retail prescription drugs being sold in
    Ontario in breach of the legislation that governs pharmacies and pharmacists?  These
    appeals depend on answers to those challenging questions.

OVERVIEW

[4]

Ontario legislation closely regulates the retail sale of prescription
    drugs in Ontario.  The Ontario College of Pharmacists (the College) is
    entrusted with policing violations of the legislation.  In carrying out its
    legislative objects, the College has a duty to serve and protect the public
    interest.

[5]

In the present case, the College first started an action in which it
    alleged that the appellants were in breach of various statutory provisions
    regulating the sale of prescription drugs in Ontario.  The core allegations are
    that the appellants have been:

·

operating a pharmacy without accreditation;

·

using certain designated terms, such as pharmacy,
    pharmacists, drug and drugs in connection with their business, which is
    not an accredited pharmacy, and by persons who are not pharmacists;

·

performing acts reserved to pharmacists and accredited
    pharmacies; and,

·

selling prescription drugs in a pharmacy, without pharmacists,
    and without complying with the rigors required for the sale of prescription
    drugs, such as the requirement of a valid prescription.

[6]

None of the appellants are authorized to sell prescription drugs in
    Ontario.

[7]

The College then brought an application to stop the appellants from
    selling, by retail, prescription drugs from any location in Ontario, and to
    cease using the designated terms pharmacy, pharmacist, drug, or drugs
    in relation to their business.

[8]

By judgment dated March 15, 2013 (the Judgment or the injunction
    order), the application judge granted the injunction until the appellants
    could demonstrate that they were in compliance with the governing legislation. 
    She concluded that the sale of prescription drugs takes place in Ontario and
    that the appellants are subject to the Colleges jurisdiction.

[9]

Two groups of appellants appeal the injunction order, arguing that the
    application judge erred in both of her conclusions.  The first group is RX
    Processing Services Inc. (RXP), Richard Petko and Frank Stacho (the RXP
    appellants).  The second group is GPC-Belize, David Billings and Wade Onuffer
    (the GPC-Belize appellants).  GPC-Belize is a Belize corporation carrying on
    business as Global Pharmacy Canada Inc.

[10]

For
    the reasons that follow, I would dismiss the appeals.

THE STATUTORY FRAMEWORK

[11]

The
    regulatory scheme under which these proceedings have been brought provides
    important context for these appeals.

[12]

Three
    Ontario statutes, taken together, closely regulate pharmacists, pharmacies, and
    the retail sale of prescription drugs in Ontario: the
Pharmacy Act
,
    1991, S.O. 1991, c. 36 (
PA
); the
Drug and Pharmacies Regulation
    Act,
R.S.O. 1990, c. H.4 (the 
DPRA
); and the
Regulated
    Health Professions Act
, 1991, S.O. 1991, c. 18 (
RHPA
).  The
Health
    Professions Procedural Code
(the Code), which is Schedule 2 to the
RHPA
and is also incorporated into the
PA
, and the regulations under these
    statutes are also part of the statutory scheme.

[13]

The
    sale of prescription drugs in Ontario is highly regulated.  For example, all
    pharmacies  meaning all premises from which drugs are sold by retail  must be
    accredited: see ss. 1(1) and 139,
DPRA
.  Only a registered pharmacist
    can own or operate a pharmacy: see ss. 142 and 144,
DPRA
.  Further,
    drugs can only be sold by certain qualified individuals under specific
    conditions: see ss. 27(1) and 27(2)(8),
RHPA
;
s. 149, DPRA.

[14]

The
    College is tasked with the regulation of drugs and pharmacies in accordance
    with the
DPRA
: see s. 6,
PA
.  It is also responsible for
    regulating the practice of the pharmacy profession and governing its members in
    accordance with the
RHPA
, the
PA
, the Code, and any
    regulations passed thereunder: see s. 3(1), the Code. This includes the
    establishment, development and maintenance of standards of practice,
    professional ethics, and qualifications required of those operating pharmacies
    and acting as pharmacists within the province: see s. 3(1), the Code; s. 6,
PA
. 
    In carrying out its legislative objects, the College is required to serve and
    protect the public interest: see s. 3(2), the Code.

[15]

The
    College alleges that the appellants, in violation of various provisions of the
    applicable legislation:

·

Sell drugs without being authorized health professionals,
    contrary to ss. 27(1) and 27(2)(8) of the
RHPA
;

·

Operate a pharmacy without accreditation, contrary to s. 139 of
    the
DPRA
;

·

Own and operate a pharmacy without themselves being pharmacists,
    contrary to ss. 142 and 144 of the
DPRA
;

·

Operate a pharmacy and sell drugs by retail without a 
    pharmacist or other qualified person present or supervising, contrary to ss.
    146 and 149 of the
DPRA;

·

Sell prescription drugs without a valid prescription, contrary to
    s. 155 of the
DPRA
and s. 40 of O. Reg. 58/11, passed under the
DPRA
;

·

Use the restricted designations pharmacy, drug, and
    drugs in connection with a retail business that is not an accredited
    pharmacy, contrary to s. 147 of the
DPRA; and

·

Use the restricted title pharmacist in relation to a person who
    is not a member of the College, contrary to s. 10 of the
PA
.

[16]

The
    College is expressly authorized under s. 162 of the
DPRA
and s. 87 of
    the Code to apply to a judge of the Superior Court to enjoin activity that violates
    the applicable legislation and to compel compliance, as it did in this case.

[17]

The
    full text of the various statutory provisions referred to in these reasons can
    be found in Schedule A.

BACKGROUND IN BRIEF

[18]

The
    following factual background draws heavily from the thorough reasons of the
    application judge.


Before the Restructuring

[19]

From
    2007 to 2009, Global Pharmacy Canada advertised prescription drugs for sale
    worldwide, including in Ontario, via the website www.globalpharmacycanada.com. 
    The business was operated by 17245665 Ontario Inc. c.o.b. as Global Pharmacy
    Canada Inc. (GPC-Ontario).  GPC-Ontario operated out of a call centre in
    Mississauga, Ontario.

[20]

GPC-Ontario
    was owned by Petko and Stacho.

[21]

In
    the summer of 2009, the College received three complaints or inquiries about
    Global Pharmacy Canada.  One, from an American, complained that Global Pharmacy
    Canada should not be allowed to prey on U.S. citizens.  The second was from
    the California Board of Pharmacy, which inquired whether Global Pharmacy Canada
    was licensed with the College.  The third was from a director of the Centre for
    Pharmacoeconomic Studies at the University of Texas at Austin, who suggested
    that Global Pharmacy Canadas promotional material was very deceptive.

[22]

These
    complaints and inquiries precipitated an investigation by the College,
    beginning in July 2009.

[23]

Between
    August 2009 and November 2012, the College received further complaints from two
    Americans and an inquiry from the Director of the Montana Board of Pharmacy.

[24]

In
    June 2010, Health Canada expressed concerns to Global Pharmacy Canada about its
    advertising and sale of drugs that were not approved for use in Canada,
    contrary to the
Food and Drugs Act
, R.S.C. 1985, c. F-27 (
FDA
),
    and its regulations.

[25]

The
    application judge noted that the appellants conceded that from 2007 until they restructured
    their affairs in 2009 and 2010: (1) the College had jurisdiction to regulate
    GPC-Ontarios activities; (2) generic drugs originating in India were being
    sold by an Ontario corporation to Ontario residents; and, (3) they were in
    breach of the applicable legislative provisions because prescription drugs were
    being sold in Ontario and none of the employees at the call centre were
    pharmacists.


The Restructuring

[26]

In
    2009-10, GPC-Ontario reorganized its corporate structure and operations in a
    way that the appellants claim removed it from the ambit of the Colleges
    regulation. Details of the restructuring are set out below but, in summary, it
    consisted of three things.  GPC-Ontario sold its tangible assets to RXP and its
    intangible assets to GPC-Belize.  Steps were taken so that no Canadians could
    directly buy drugs from Global Pharmacy Canada.  And, the Global Pharmacy
    Canada website was changed.

The Corporate Changes

[27]

In
    May 2009, GPC-Ontario sold all of its tangible assets for approximately $41,000
    to RXP, a recently incorporated Ontario company.  The tangible assets consisted
    of all property located at its call centre in Mississauga, including network
    infrastructure and software licenses.

[28]

RXP
    now runs the call and processing centre in Mississauga in essentially the same
    manner as GPC-Ontario ran it prior to the restructuring.  It employs
    approximately 17 staff and one manager, Bruno DAdderio.  It operates from the
    same location and with many of the same employees as prior to the restructuring.

[29]

Petko
    and Stacho are RXPs sole shareholders and directors.  It will be recalled that
    they are the same people who owned GPC-Ontario prior to the restructuring.

[30]

In
    January 2010, GPC-Ontario sold all of its intangible assets for $120,000 to GPC-Belize. 
    The sale included its website, domain name, the Global Pharmacy Canada name,
    logos, trademarks, the customer database, and all advertising and marketing
    collateral.

[31]

The
    appellants have made no disclosure as to the identity of the shareholders and
    directors of GPC-Belize.

[32]

GPC-Belize
    describes Billings and Onuffer as individuals associated with it.  Both
    Billings and Onuffer are residents of Pennsylvania.    Billings is GPC-Belizes
    Chief Financial Officer.  He signed the agreements on behalf of GPC-Belize with
    respect to its purchase of GPC-Ontarios intangible assets.  Onuffers name
    appears in two of Global Pharmacy Canadas press releases. In one, Onuffer is
    referred to as Mr. Wade Onuffer of globalpharmacycanada.com, and is quoted
    extensively.  In the other, he is referred to as a pharmacist and an expert
    from Global Pharmacy Canada.  Before the application judge, Onuffers counsel
    acknowledged that he is not a pharmacist.

[33]

Petko
    swore an affidavit disclosing some, but not all, of the documentation and facts
    about GPC-Ontarios sales to RXP and GPC-Belize, and the corporate
    restructuring.  He deposed that GPC-Ontario and GPC-Belize entered into an
    exclusive licensing agreement at the same time as GPC-Ontario and RXP entered
    into the May 2009 asset purchase agreement.  However, details of the exclusive
    licensing agreement are unknown because that agreement has not been disclosed. 
    Petko deposed that he was unable to locate that agreement.

[34]

None
    of GPC-Belize, Billings or Onuffer filed any materials on the application.  Instead,
    they relied on submissions made by counsel for RXP, Petko and Stacho.

[35]

Pursuant
    to a Payment Processing Services Agreement dated January 2010, GPC-Ontario
    continued to perform banking functions for GPC-Belize after the sale of its
    intangible assets to it.  On behalf of GPC-Belize, GPC-Ontario deposited
    cheques and money orders made payable to Global Pharmacy Canada Inc. into its own
    bank account.  Petko was the signing officer.  Thousands of dollars were
    deposited each day, and sometimes twice a day.  Periodically, GPC-Ontario sent
    the accumulated funds, by wire transfer, to GPC-Belize, less the agreed-upon 3%
    fee.  The application judge described the arrangement as a clear commingling
    of funds.  GPC-Belize cancelled this banking arrangement in January 2013,
    during the proceeding below.  No reasons were given for the cancellation.

[36]

GPC-Belize
    and RXP entered into a Master Services Agreement (the Agreement), effective
    August 1, 2010, under which RXP provides call centre services for GPC-Belize. 
    The Agreement states that RXP is to provide customer relations and
    administrative services in connection with GPC-Belizes pharmacy intermediary
    activities.

[37]

More
    details of the relationships among the various individuals and corporate
    entities emerge below.

The Operational Changes

[38]

In
    addition to the corporate restructuring, measures were taken to address the
    issue of sales of the prescription drugs to Canadians.  A block was put on the
    website so that Canadian residents could not access it from a Canadian IP
    address.  Steps were taken so that any drugs purchased would not be shipped to
    a Canadian address.  The cumulative effect of these measures is that Canadians
    can now only acquire the pharmaceutical drugs being sold by the appellants by
    using a web proxy service to hide their residency and having the drugs
    delivered to another country.

[39]

The
    Global Pharmacy Canada website has also changed since the College began its
    investigation into the appellants activities.

[40]

In
    August 2010  some eight months after the sale from GPC-Ontario to GPC-Belize 
    the website continued to describe Global Pharmacy Canada as a Canadian
    pharmacy company headquartered in Toronto, Canada.  In a section entitled
    About Us, there is a photo of the individuals who work at the Global
    Pharmacy Canada customer service department located in Mississauga, Canada. 
    The text below read: Since 2004, our office in Toronto, Canada has been
    helping residents of the United States place orders and receive deliveries.  The
    customer order form, available for download on the website, featured a red
    maple leaf and the Canadian flag.  Apart from the website, the only point of
    contact that customers had with Global Pharmacy Canada was through the call
    centre in Mississauga, which the website repeatedly encouraged customers to
    contact by phone, mail or FAX.  A Safety Tips page encouraged consumers to
    know where your company is really located, not where they say they are and
    stated that Global Pharmacy Canada is in fact located in Canada.

[41]

In
    February 2011, the website no longer described Global Pharmacy Canada as a
    Canadian pharmacy company.  However, it continued to refer to itself as Global
    Pharmacy Canada and to its dedicated staff of friendly customer service agents
    located in Toronto, Canada. It continued to direct all customer interactions,
    including orders, payments and complaints, to the call centre at the same
    address and phone number in Mississauga.  The order form continued to feature
    the red maple leaf and Canadian flag.

The Sale Process After
    Restructuring

[42]

In
    para. 136 of her reasons, the application judge provides a clear roadmap for
    how the appellants sold prescription drugs following the restructuring.  That
    roadmap is invaluable in resolving the issues on appeal.  Thus, I reproduce para.
    136 of the reasons in full.

[136] The following are the undisputed facts with respect to
    how the sale of drugs on behalf of GPC-Belize now occurs:

1.

Individuals
    initiate the purchase of drugs by completing a Patient Order Form, available by
    mail or online from the www.globalpharmacycanada.com website. GPC-Belize owns
    the website.

2.

Once completed,
    the Patient Order Form is sent by mail, fax, or electronically, with copies of
    prescriptions, pill bottles, or pharmacy receipts to Global Pharmacy Canada
    Inc. c/o RX Processing Services, Inc. to the Mississauga address, or to the
    Mississauga email address.

3.

The payment
    method on the Patient Order Form is by Visa or MasterCard.

4.

The Patient
    Order Form confirms we will not process your credit card until
we have
    completed your order
 (emphasis added). The purchaser must sign authorizing
    the credit card payment and include the security code, the expiry date, and
    number of the card to facilitate payment.

5.

The staff at RXP
    complete the necessary documentation to process the payment of the client from
    their Visa or MasterCard to complete the order.

6.

Payment by
    cheque and money order is also accepted. Richard Petkos evidence was that
    payment in this manner was a small percentage of the total drug sales. Between
    August 1, 2012 and February 4, 2013, over $1,200,000 USD was deposited into
    this account.

7.

Up until
    February 4, 2013, GPC-Ontario deposited cheques payable to Global Pharmacy
    Canada Inc. to GPC-Ontarios CIBC USD bank account, used exclusively for this
    purpose. Periodically, proceeds from this account were wired by the RXP staff
    to GPC-Belize, less the 3% agreed upon fee for service.

8.

The Payment
    Processing Services Agreement was terminated by David Billings on January 5,
    2013, although no changes occurred in the procedures as reflected in the
    February 6, 2013 bank statement. The sum of $119,672.71 was deposited into the
    CIBC account between February 1 and February 5, 2013.

9.

The Patient
    Order Form confirms that Global Pharmacy Canada Inc. is appointed to act
as
    agent for the patient
for the purpose of conveying the order to a licenced
    pharmacy in India (emphasis added). The patient signs this acknowledgment. The
    acknowledgement confirms that the patient agrees to be bound by the terms and
    conditions available at the Global Pharmacy Canada website.

10. The
    patient order form contains a reorder form and a reminder. By ticking off the
    reorder box, the patient authorizes the credit card on file to be used to
    automatically reorder the drug and process future payments every three months,
    without the need for any further proof of a valid ongoing prescription.

11. RXP Staff
    in Mississauga process the order by completing the documentation necessary to
    process the Visa or MasterCard payment. The customer is charged the full amount
    for the prescription drugs requested.  Visa or MasterCard in turn processes the
    credit card payment for the correct amount and forwards these amounts to the
    account of GPC-Belize.

12. Once
    confirmation of payment is received by Visa or MasterCard, or by the cheque
    clearing the bank, the staff of RXP then inputs the customers order form and
    prescriptions into the Global Pharmacy Canada website to be filled by a
    supplier in India.

13. According
    to DAdderio, manager at RXP, at the end of each day, all orders processed by
    the RXP staff are uploaded to a website that is accessed by the participating
    pharmacists in India.

14. I note
    that there is no named pharmacist in India. There is no indication in any of
    the documentation sent to the client who the supplier of the drugs may be, and
    whether or not these drugs in fact come from an Indian pharmacist as
    represented, or from a supplier of drugs.

15. Orders are
    confirmed by an email sent by orders@globalpharmacycanada.com or by letter
    sent by Your Friends at Global Pharmacy Canada, enclosing a Global Pharmacy
    Canada fridge magnet. The header of this confirmation letter reads Global
    Pharmacy Canada c/o RX Processing Services, Inc. with the Mississauga address
    and phone number, and the www.globalpharmacycanada.com website.

16. An invoice
    is prepared by the supplier in India or by the Global Pharmacy Canada website
    accessed by the supplier (this was not clear on the evidence) and is placed in
    the package which is shipped from India to the client in the United States or
    elsewhere. The header of the invoice states Global Pharmacy Canada and lists
    the Dundas Street Mississauga Address, without mention of RXP. The footer of
    the invoice describes how consumers can re-order drugs, stating: Please fax
    this form to: (866)850-6021 or send by mail to: 1090 Dundas St. East, Suite
    106, Mississauga ON L4Y 2B8, CANADA (the RXP address). For faster service, call
    us at (866)850-6021 to authorize your refill over the phone.

17. The packages
    are sent to the United States without any indication that they contain
    prescription drugs. The customs declaration form that appears on the outside of
    each package states health products for personal use.

18. There is
    no evidence before me how the Indian supplier of the drugs is paid. I presume
    that GPC-Belize pays the supplier of the drugs the agreed upon fee. RXP plays
    no role in the payment of the Indian supplier of the drugs.

19. If for
    some reason one of the Indian suppliers cannot fill the order, RXP remains
    involved in the process. If the drug is not available, RXP will advise the
    customer and will do one of two things. One option is to reverse any credit
    card charges that have been made when the drugs were ordered if the drug is no
    longer available. If the drug is on back-order and not presently available, the
    RXP staff will advise the customer of the delay, and the customer will decide
    whether to wait to obtain the drug, or whether he or she wished to obtain a
    refund. The RXP staff will produce the paperwork for the refund at the
    customers direction.

20. RXP staff receive
    and resolve customer complaints involving all practical matters including
    non-delivery or delayed delivery of the drugs. If the customer raises any
    problem with the effects of the medication itself, the RXP representative tells
    the person to see his or her doctor.

21. Prior to
    the involvement of Health Canada, any allegedly defective goods were returned
    by the purchaser to the Mississauga address. As a result of Health Canadas
    concerns about the presence of drugs at the call centre premises, now, if there
    is a problem with an order, the purchasers are advised by the staff at the call
    center to either destroy the product, or return the drugs to the supplier in
    India. As noted, there is no information in the package received by a client
    who is the supplier of the drug.

THE DECISION BELOW

[43]

The
    application judge concluded that the appellants were selling prescription drugs,
    by retail, in Ontario.  She further concluded that the College had jurisdiction
    to regulate the appellants activities.  A summary of her reasoning on both
    matters follows.

The Appellants are
    Selling Prescription Drugs in Ontario

[44]

The
    application judge began her analysis on where a sale occurs by referring to
    the traditional definitions such as the transfer, by mutual assent, of the
    ownership of a thing from one person to another for a money price.  She noted the
    difficulty of applying traditional legal concepts of sales to contracts made
    via the internet.

[45]

The
    application judge then discussed
Prescriptions4us v. Ordre des pharmaciens
    du Quebec
, [2004] Q.J. No. 9014 (S.C.), affd [2004] J.Q. No. 13143 (C.A.). 
    In
Prescriptions4us
, Cohen J. considered whether the sale by a
    Quebec-based company to Americans, of prescription drugs sourced from Manitoba
    pharmacists, could be said to have taken place in Quebec.  In concluding that
    it had, Cohen J. applied ordinary contractual concepts of offer and acceptance under
    the relevant provision of the
Civil Code of Quebec
, S.Q. 1991, c. 64.   Prescriptions4uss
    head office was located in Montreal.  To purchase drugs, the consumer obtained
    the necessary forms from Prescriptions4uss website, completed them, and sent
    them to the head office.  Justice Cohen concluded that there could be no other
    possible location for the conclusion of the contract than Montreal  the place
    of the offer and the place where the acceptance was received by the vendor.

[46]

In
    the present case, the application judge then set out a detailed roadmap of how customers
    purchase prescription drugs from the appellants (reproduced at para. 42, above). 
    She rejected the appellants submission that acceptance should be characterized
    as the Indian suppliers confirmation that it would forward the drugs to the
    purchaser or as the forwarding of payments by the credit card companies to
    GPC-Belize.  In her view, based on the roadmap and traditional contract law
    principles, the appellants could be understood to be selling drugs in Ontario. 
    She reached the same conclusion using the approach set out by the Supreme Court
    of Canada in C
elgene Corp. v. Canada (Attorney General)
, 2011 SCC 1,
    [2011] 1 S.C.R. 3.

[47]

In
Celgene
, pharmaceutical drugs were being sold by a New Jersey-based
    distributor to consumers in Canada.  The distributor argued that the New Jersey
    head office was the locus of sale according to commercial law principles, and
    therefore that it was not obliged to provide pricing information to the
    Patented Medicine Prices Review Board (the Board). The Board acknowledged
    that the sale took place in New Jersey, according to commercial law
    principles.  However, it took the position that the consumer protection purpose
    of the
Patent Act,
R.S.C. 1985, c. P-4, and the Boards mandate to
    protect Canadians from excessive prices charged for patented medicines,
    militated against a strict commercial law interpretation of the legislative
    phrase sold in any market in Canada.

[48]

The
    Supreme Court upheld the Boards reasoning and result.

[49]

In
    the application judges view, as expressed at para. 153 of her reasons,
Celgene
confirms that a purposive analysis of the meaning of sale is appropriate,
    and that substance, not form, should be relevant in assessing whether there is
    a sale, unless the words are not capable of bearing any other meaning.

[50]

On
    the facts as she found them, the application judge said that the only rational
    conclusion was that the sale of drugs by the appellants was taking place in
    Ontario.

The College has Jurisdiction Based
    on a Sufficient Connection

[51]

The
    application judge concluded that the College has jurisdiction to regulate the
    appellants conduct because of a wealth of evidence showing a sufficient
    connection between the appellants activities and Ontario.

[52]

The
    application judge set out the applicable legal principles for establishing
    whether a sufficient connection exists, relying on, among other cases,
Unifund
    Assurance Co. v. Insurance Corp. of British Columbia
, 2003 SCC 40, [2003] 2
    S.C.R. 63, and
Crowe v. Ontario Securities Commission
, 2011 ONSC 6918,
    108 O.R. (3d) 410 (Div. Ct.).

[53]

She
    then made detailed findings of fact about the structure and operation of RXP
    and GPC-Belize, and the relationships among the principals of those entities. 
    She found that, despite the various agreements that had been entered into as
    part of the restructuring, from a practical perspective, little [had] changed
    as a result of the restructuring.

[54]

The
    application judge further found that RXP was an agent with apparent authority,
    if not actual authority, to contract on behalf of GPC-Belize.  While some of the
    terms of the various contracts might suggest otherwise, her factual findings
    led her to conclude that RXP was acting as agent for GPC-Belize in the retail
    sale of prescription drugs.  The documents, considered as a whole, gave RXP
    actual authority to bind GPC-Belize.  Further, GPC-Belize made representations
    on its website to the effect that RXP had the authority to bind it, in
    contract, to individuals purchasing its retail prescription drugs.

[55]

Finally,
    the application judge rejected the argument that the College was without
    jurisdiction because the purchasers were not residents of Ontario or Canada. 
    Relying on
Gregory & Co. Inc. v. Quebec Securities Commission
,
    [1961] S.C.R. 584, and
Thorpe v. College of Pharmacists of British Columbia
(1992),
    97 D.L.R. (4th) 634 (B.C.C.A.), the application judge stated that the
    sufficient connection test can be met even if the public affected by the
    activity in question is outside the jurisdiction.

THE ISSUES

[56]

These
    appeals raise two issues.  Did the application judge err in her determination
    that the appellants are:

1.  selling prescription
    drugs, by retail, in Ontario; and

2.  subject
    to the Colleges jurisdiction?

ARE THE APPELLANTS SELLING PRESCRIPTION DRUGS IN ONTARIO?

[57]

The
    appellants say that the application judge erred in concluding that they sell,
    by retail, prescription drugs in Ontario.  Their submission runs as follows.

[58]

GPC-Belize
    is in the business of facilitating the purchase, by Americans, of
    pharmaceutical drugs from India.  All significant aspects of its business
    involve activities outside Ontario.  Its sole connection with Ontario is its
    contractual arrangement with RXP, under which RXP provides ancillary support
    and administrative services.  GPC-Belize has no physical presence in Ontario,
    has no Ontario personnel, does no advertising or solicitation of Ontario
    residents, does not import pharmaceutical drugs into Ontario, and sells no
    drugs to Ontario residents.  In short, the appellants say they are not selling
    pharmaceutical drugs in Ontario.

[59]

I
    reject this submission.

[60]

The
    Supreme Courts decision in
Celgene
instructs us that in a regulatory
    context, words such as place of sale, sold and selling may not
    necessarily be given their strict commercial law meanings.  At para. 21 of
Celgene
,
    the Court says that [t]he words, if clear, will dominate; if not, they yield
    to an interpretation that best meets the overriding purpose of the statute.

[61]

I
    agree with the application judge that, given the overriding purpose of the
    relevant legislation in this case, a purposive approach to determining the
    meaning of sale is appropriate.  The College has a mandate to regulate the sale
    of prescription drugs in the province, and a duty to serve and protect the
    public interest  it is the substance, and not the form, which is relevant when
    determining whether the sale of prescription drugs takes place in Ontario.

[62]

The
    application judge made detailed findings of fact about the sale process
    following restructuring.  On those findings, it is clear that the substance of
    the sale transaction takes place through RXP, an Ontario corporation that is
    located and operates in Ontario.  As the application judge noted, [a]ll
    documentation  including the Patient Order Form, confirmation of the order,
    the invoice, and the packing slip  are in the name of Global Pharmacy Canada
    bearing the Mississauga address.  Furthermore, critical aspects of the sale
    transaction by which the customers get prescription drugs and the appellants
    get paid for providing them, are conducted by RXP.  The customer submits its
    order form, which RXP processes, or calls RXP with its order.  RXP takes the
    order and processes payment for it.  RXP then arranges for the delivery of the
    drugs directly to the American customer.  If there is a problem, customers
    contact RXP.  In short, without RXP staff at the call centre in Mississauga, no
    prescription drugs would flow from Global Pharmacy Canada (or GPC-Belize) to
    its customers and GPC-Belize would not get paid.

ARE THE APPELLANTS SUBJECT TO THE COLLEGES JURISDICTION?


[63]

The
    appellants say that there are such few and relatively insignificant points of
    contact between GPC-Belize and Ontario that the application judge erred in
    finding a sufficient connection to ground the Colleges jurisdiction. 
    Specifically, they submit that she erred in two ways.

[64]

First,
    they contend that the application judge erroneously blurred the distinctions
    between the activities of GPC-Belize and RXP  the two are separate companies
    whose relationship is governed by contract and the separate legal personality
    of each must be respected.

[65]

Second,
    they submit that the application judge erred in treating RXP as GPC-Belizes
    agent in matters relating to GPC-Belizes business, including contract
    formation.  They contend that GPC-Belize lacks a meaningful connection to
    Ontario and that the central aspects of its business (its customers, products,
    and suppliers) do not touch Ontario.  The administrative service that RXP
    provides is an insufficient point of contact to give the College jurisdiction over
    them.

[66]

In
    my view, the appellants submission on this issue is essentially an attack on
    the application judges findings of fact.  Those findings are not to be
    overturned, absent palpable and overriding error.  There is none. 
    Consequently, I see nothing in this submission.

[67]

There
    is no dispute about the legal principles that apply when determining the
    applicability of a provincial regulatory scheme to the out-of-province
    appellants.  The question is whether there is a sufficient connection between
    those appellants and Ontario, such that the College has jurisdiction over them. 
    The first two propositions in para. 56 of
Unifund
provide the starting
    point for answering that question:

Consideration
    of constitutional
applicability
can conveniently be organized around the
    following propositions:

1. The territorial limits on the scope of provincial legislative
    authority prevent the application of the law of a province to matters not
    sufficiently connected to it;

2.  What constitutes a sufficient connection depends on the
    relationship among the enacting jurisdiction, the subject matter of the
    legislation and the individual or entity sought to be regulated by it;

[68]

Furthermore,
    as the application judge observed, there is no single standard defining what
    constitutes a sufficient connection: whether there is a sufficient connection
    depends largely on context.

[69]

Here
    are some of the application judges factual findings, which underlie her
    conclusion that there was a sufficient connection between the appellants and
    Ontario to ground the Colleges jurisdiction.

·

From May 2009 to January 2010, RXP was not paid for the services
    it rendered to GPC-Belize.  Instead, it simply kept any funds flowing from
    cheques it received that were made payable to Global Pharmacy Canada Inc.;

·

RXP does not present any sort of budget to GPC-Belize 
    GPC-Belize simply pays all amounts requested, with no questions asked;

·

The players in Ontario at RXP are the same individuals who
    owned and operated GPC-Ontario;

·

The manager of RXP confirmed that nothing about his task had
    changed since the restructuring;

·

The RXP staff perform essentially the same functions as they did
    on behalf of GPC-Ontario before the restructuring, from the same premises. 
    They continue to answer the phone Global Pharmacy Canada, as they did before
    the restructuring.  They continue to receive and process orders and payments
    for the drugs, and respond to customer complaints.  All customer mail and
    enquiries continue to be directed to the call centre;

·

The RXP staff perform the activities that the website claims are
    performed by Global Pharmacy Canada;

·

The organizational distinctions between RXP and GPC-Belize are
    blurred.  For example, one provision in the Agreement confirms that RXP
    functions under the control and policy direction of GPC-Belize;

·

The January 2010 Payment Processing Services Agreement, signed by
    Billings on behalf of GPC-Belize and Petko on behalf of GPC-Ontario, provides
    evidence that the two companies are not in substance  as separate as
    claimed.  In this regard it will be recalled that for many months following
    the sale of its intangible assets from GPC-Ontario to GPC-Belize, GPC-Ontario
    continued to deposit cheques made out to Global Pharmacy Canada into its own
    bank account.

[70]

The
    application judge did not blur the legally distinct personas of GPC-Belize and
    RXP, as the appellants contend.  Rather, as the foregoing list demonstrates,
    she made factual findings which show that although the two have separate legal
    identities, they do not operate separately.  Apart from contact with the
    GPC-Belize website, all contact between Global Pharmacy Canada and its
    customers is exclusively through the RXP call centre here in Ontario.  In light
    of the application judges findings, her determination that the two companies do
    not operate independently is amply justified.

[71]

Similarly,
    the application judges factual findings justify her determination that RXP
    serves as GPC-Belizes agent in matters relating to GPC-Belizes business,
    including contract formation.  Given those findings, it is clear that RXP provides
    much more than merely administrative service to GPC-Belize.  The RXP call
    centre in Mississauga is home to the only staff that deal with Global Pharmacy
    Canada customers.  They are, for all intents and purposes, its sales force.

[72]

I
    also reject the submission that there is no or insufficient connection between each
    of Billings and Onuffer and Ontario to ground jurisdiction.  Those appellants
    were given the full opportunity to participate in these proceedings.  They
    chose to file no evidence.  On the findings of the application judge, both are
    connected to the Global Pharmacy Canada business, core aspects of which are
    performed by RXP here in Ontario.  Recall in this regard that Billings, in his
    role as GPC-Belizes CFO, signed the restructuring documents on behalf of
    GPC-Belize.  Recall also his close personal and longstanding relationship with
    Petko.  Recall further Global Pharmacy Canadas press releases in which Onuffer
    is described as being with Global Pharmacy Canada and then quoted at length.

[73]

Finally,
    I reject the appellants submission that the College is overreaching by
    assuming jurisdiction over them.  The Colleges duty under s. 3(2) of the Code

is to serve and protect the public interest.  In the circumstances of this
    case, the territorial limits on the scope of the provincial legislative
    authority relate to the
conduct
that the College can regulate.  The Colleges reach is not defined as, or
    limited to, the Ontario public.

CONCLUSION

[74]

As
    I have explained, in this case there is conduct over which the College has
    power to regulate:  the sale of prescription drugs in Ontario.  The principle
    that regulators may act to protect persons who are located outside the
    regulators territorial jurisdiction, when the conduct targeted by the
    regulator occurs within the jurisdiction, has been repeatedly affirmed, beginning
    with
Gregory
, at p. 588.  See also
Thorpe
, at p. 640, and
Crowe
,
    at para. 32.

[75]

The
    College is not overreaching  it is fulfilling its legislated duty to serve and
    protect the public interest in the matters over which it has been given authority,
    including the sale of prescription drugs in Ontario.

[76]

In
    the domain of pharmaceutical drugs, reputation is based on regulation.  If a
    company trades on Ontarios reputation for quality and strong regulatory
    standards, and sites a critical part of the sales process in Ontario, it will
    be subject to Ontarios regulation.

[77]

Accordingly,
    I would dismiss both appeals with costs, payable on a joint and several
    liability basis, to the College fixed at $25,000, all inclusive.

Released: June 10, 2013 (E.E.G.)

E.E. Gillese
    J.A.

I agree Gloria Epstein J.A.

I agree P. Lauwers J.A.


Schedule A

Pharmacy Act,
    1991,

S.O.
    1991, c. 36

Definitions

s. 1.
In this Act,

College means the Ontario College of Pharmacists

Deeming
    Provision

s. 2. 
    (1)
The Health Professions Procedural Code shall be
    deemed to be part of this Act.

s. 2. 
    (2)
In the Health Professions Procedural Code as it
    applies in respect of this Act,

College means the Ontario College of Pharmacists;

health profession Act means this Act;

profession means the profession of pharmacy;

regulations means the regulations under this Act.

Additional
    Objects

s.
6.
In
    addition to the objects of the College set out in subsection 3 (1) of the
    Health Professions Procedural Code, the College has the following objects:

1. To regulate drugs and pharmacies under the
Drug
    and Pharmacies Regulation Act.

1.1 To exercise the powers and duties of the College
    under the
Drug Interchangeability and Dispensing Fee Act.

2. To develop, establish and maintain standards of
    qualification for persons to be issued certificates of accreditation

Restricted
    Titles

s.
    10.  (1)
No person other than a member shall use the
    title apothecary, druggist, pharmacist, pharmacy technician or pharmaceutical
    chemist, a variation or abbreviation or an equivalent in another language

Drug and Pharmacies Regulation Act,
R.S.O.
    1990, c. H.4

Definitions

s.
    1.  (1)
In this Act,

College means the Ontario College of Pharmacists

drug means any substance or preparation containing
    any substance,

(a) manufactured, sold or represented for use in,

(i) the diagnosis,
    treatment, mitigation or prevention of a disease, disorder, abnormal physical
    or mental state or the symptoms thereof, in humans, animals or fowl, or

(ii) restoring,
    correcting or modifying functions in humans, animals or fowl,

(b) referred to in Schedule I, II or III,

(c) listed in a publication named by the
    regulations, or

(d) named in the regulations,

but does not include,

(e) any substance or preparation referred to in
    clause (a), (b), (c) or (d) manufactured, offered for sale or sold as, or as
    part of, a food, drink or cosmetic,

(f) any natural health product as defined from
    time to time by the Natural Health Products Regulations under the Food and
    Drugs Act (Canada), unless the product is a substance that is identified in the
    regulations as being a drug for the purposes of this Act despite this clause,
    either specifically or by its membership in a class or its listing or
    identification in a publication,

(g) a substance or preparation named in Schedule
    U,

(h) a substance or preparation listed in a
    publication named by the regulations, or

(i) a substance or preparation that the regulations
    provide is not a drug

pharmacy means a premises in or in part of which
    prescriptions are compounded or dispensed for the public or drugs are sold by
    retail, and includes a remote dispensing location

prescriber means a person who is authorized under
    the laws of a province or territory of Canada to give a prescription within the
    scope of his or her practice of a health discipline

prescription means a direction from a prescriber
    directing the dispensing of any drug or mixture of drugs for a designated
    person or animal

Certificates
    of Accreditation

s.
    139.  (1)
No person shall establish or operate a
    pharmacy unless a certificate of accreditation has been issued in respect
    thereof

Operation
    of Pharmacies by Corporation

s.
    142.  (1)
No corporation shall own or operate a
    pharmacy unless the majority of the directors of the corporation are
    pharmacists

s.
    142.  (2)
No corporation shall own or operate a pharmacy
    unless a majority of each class of shares of the corporation is owned by and
    registered in the name of pharmacists or in the name of health profession
    corporations each of which holds a valid certificate of authorization issued by
    the College

Operation
    of Pharmacies

s.
    144.  (1)
No person other than a pharmacist or a
    corporation complying with the requirements of section 142 shall own or operate
    a pharmacy

Supervision
    of Pharmacist

s. 146.  (1)
Subject
    to subsection (1.0.1), no person shall operate a pharmacy unless,

(a) it is under the supervision of a pharmacist who
    is physically present; and

(b) it is managed by a pharmacist who is designated
    as the designated manager by the owner of the pharmacy.

s. 146.  (1.0.1)
The
    requirement under clause (1) (a) that a pharmacist be physically present in a
    pharmacy does not apply with respect to a remote dispensing location, as long
    as,

(a) a certificate of accreditation has been issued
    permitting the operation of the remote dispensing location; and

(b) the remote dispensing location is operated in
    accordance with the regulations.

Designations

s.
    147.
No person shall in connection with a retail business
    use any of the following designations, unless the business is an accredited
    pharmacy:

1. Drug store.

2. Pharmacien
    détaillant.

3. Pharmacy.

4. Pharmacie.

5. Drug
    department.

6. Service de
    pharmacie.

7. Drug sundries.

8. Remèdes divers.

9. Drug or Drugs.

10. Médicaments.

11. Drug mart.

12. Comptoir de
    médicaments.

13. Medicines.

14. Remèdes

Dispensing
    of Drugs

s.
    149.  (1)
Subject to subsections (2) and (3), no
    person shall compound, dispense or sell any drug in a pharmacy other than,

(a) a pharmacist;

(b) an intern acting under the supervision of a
    pharmacist who is physically present;

(c) a registered pharmacy student acting under the
    supervision of a pharmacist who is physically present; or

(d) a pharmacy technician acting under the
    supervision of a pharmacist who is physically present

s. 149.  (2)
Where
    a pharmacist or an intern is present in the pharmacy and available to the
    purchaser for consultation, subsection (1) does not apply to the sale in a
    pharmacy of a drug listed in Schedule III

s.
    149.  (3)
The requirement in clause (1) (d) that a
    pharmacist be physically present to supervise does not apply with respect to a
    remote dispensing location, as long as a pharmacist is actively supervising the
    pharmacy technician mentioned in that clause and,

(a) a certificate of accreditation has been issued
    permitting the operation of the remote dispensing location; and

(b) the remote dispensing location is operated in
    accordance with the regulations...

Prescription
    Drugs

s.
    155.  (1)
Subject to the regulations, no person
    shall sell by retail any drug referred to in Schedule I, except on prescription
    given in such form, in such manner and under such conditions as the regulations
    prescribe

Restraining
    Orders

s.
    162.  (1)
Where it appears to the College that any
    person does not comply with any provision of this Act or the regulations,
    despite the imposition of any penalty in respect of such non-compliance and in
    addition to any other rights it may have, the College may apply to a judge of
    the Superior Court of Justice for an order directing such person to comply with
    such provision, and upon the application the judge may make such order or such
    other order as the judge thinks fit...

O. Reg. 58/11 under the
DPRA

Rules
    re Dispensing

s. 40.  (1)
A
    drug shall not be dispensed in a pharmacy pursuant to a prescription unless the
    prescription has been authorized by a prescriber

s.
    40.  (2)
Subject to subsections (3) and (4), the
    authorization required by subsection (1) may be given verbally or by signature...

s.
    40.  (3)
A drug shall not be dispensed in a pharmacy
    pursuant to a prescription given verbally unless all of the following
    conditions have been met:

1. The drug is not a narcotic drug. (This does not
    prevent the dispensing of a verbal prescription narcotic.)

2. The verbal direction was received by a member who
    was practising at the pharmacy.

3. The member receiving the verbal direction
    recorded,

i. the date the verbal direction
    was received,

ii. the number of refills authorized
    by the verbal direction, and

iii. the name of the member who
    received the verbal direction.

4. The prescription was recorded and signed by the
    member receiving the verbal direction

s.
    40.  (4)
A drug shall not be dispensed in a pharmacy
    pursuant to a prescription given by signature that has been transmitted by
    means of fax, electronic mail or other form of electronic transmission, except
    where a member who is practising at the pharmacy either,

(a) has received the prescription directly from the
    prescriber by means of a transmission process that ensures the security,
    confidentiality and integrity of all personal information contained in the
    prescription and, before dispensing drugs pursuant to the prescription, has
    verified that the prescription, including the prescribers signature, is
    authentic and has not been altered; or

(b) has received the prescription through an
    automated pharmacy system that is contained in a remote dispensing location and
    that employs technology for the creation and transmission of a digitally
    scanned image of a paper-based prescription that has been approved in
    accordance with clause 29 (d)

s.
    40.  (5)
A drug shall not be dispensed in a pharmacy
    pursuant to a transferred prescription unless the provisions of section 43 have
    been complied with

s.
    40.  (6)
For greater certainty, this section also
    applies where a prescriber authorizes a refill in an original prescription or
    authorizes a repeat of a prescription previously given

Regulated
    Health Professions Act, 1991
,
S.O. 1991, c. 18

Controlled
    Acts Restricted

s. 27.  (1)
No
    person shall perform a controlled act set out in subsection (2) in the course
    of providing health care services to an individual unless,

(a) the person is a member authorized by a health
    profession Act to perform the controlled act; or

(b) the performance of the controlled act has been
    delegated to the person by a member described in clause (a)

s. 27.  (2)
A
    controlled act is any one of the following done with respect to an
    individual

8.
Prescribing, dispensing, selling or
    compounding a drug as defined in the
Drug and Pharmacies Regulation Act
,
    or supervising the part of a pharmacy where such drugs are kept

Health
    Professions Procedural Code
, Schedule 2 to the
RHPA

Objects
    of College

s. 3.  (1)
The
    College has the following objects:

1. To regulate the practice of the profession and to
    govern the members in accordance with the health profession Act, this Code and
    the
Regulated Health Professions Act, 1991
and the regulations and
    by-laws.

2. To develop, establish and maintain standards of
    qualification for persons to be issued certificates of registration.

3. To develop, establish and maintain programs and
    standards of practice to assure the quality of the practice of the profession.

4. To develop, establish and maintain standards of
    knowledge and skill and programs to promote continuing evaluation, competence
    and improvement among the members.

4.1 To develop, in collaboration and consultation with
    other Colleges, standards of knowledge, skill and judgment relating to the
    performance of controlled acts common among health professions to enhance
    interprofessional collaboration, while respecting the unique character of
    individual health professions and their members.

5. To develop, establish and maintain standards of
    professional ethics for the members.

6. To develop, establish and maintain programs to
    assist individuals to exercise their rights under this Code and the
Regulated
    Health Professions Act, 1991
.

7. To administer the health profession Act, this Code
    and the
Regulated Health Professions Act, 1991
as it relates to the
    profession and to perform the other duties and exercise the other powers that
    are imposed or conferred on the College.

8. To promote and enhance relations between the
    College and its members, other health profession colleges, key stakeholders,
    and the public.

9. To promote inter-professional collaboration with
    other health profession colleges.

10. To develop, establish, and maintain standards and
    programs to promote the ability of members to respond to changes in practice
    environments, advances in technology and other emerging issues.

11. Any other objects relating to human health care
    that the Council considers desirable

s. 3. 
    (2)
In carrying out its objects, the College has a
    duty to serve and protect the public interest

Court
    Orders

s. 87.
The
    College may apply to the Superior Court of Justice for an order directing a
    person to comply with a provision of the health profession Act, this Code, the
Regulated
    Health Professions Act, 1991,
the regulations under those Acts


