An example of Statutory Interpretation

Table of Contents

Table of Contents
Facts:
Issue 1: The determination of Pawar’s culpability..
1) ‘Duty’ is an obligatory task arising from one’s position at work.
2) ‘Fare’ should be understood broadly, and should not be restricted to transportation
3) ‘A Fare’ refers to a representation of payment.
4) ‘Proper Amount Payable in respect thereof’ should be interpreted in the context of what the transaction is, and who the transacting parties are.
5) ‘Accepts’ should be applied to those employees who accept for their own selfish reasons, where their acceptance does not benefit their employer.
Synopsis to Issue 1

Issue 2: The determination of Trevor’s culpability..
1) A False Pretence is a false representation for the purpose of inducement.
2) There is an inference of reasonable time regarding fraud and promises to be performed
3) A roller-coaster is not transportation.
Synopsis to Issue 2

Conclusion

Index
Bibliography

Facts:

Pawar was a proud employee at Smilin’ Sheehy’s World of Wonders (SSWW), where he was assigned the task of running the metal roller coaster, the “Train of Terror.” Pawar was to collect fares from riders and to operate the coaster’s “on and off” switch. Ezekiel Sheehy owns SSWW, which is a carnival that travels through southern Ontario.

On September 24, 2001, Trevor Montgomery (Trevor), a well-known London resident, went to the carnival and purchased $20 worth of SSs (SSs), the only currency accepted at Sheehy’s midway. At the end of that day, Trevor only had 3 SSs, and wanted to try the “Train of Terror.” Trevor approached Pawar as he was busily collecting tickets, and promised Pawar that if Pawar let him ride the coaster for 3 SSs, he would recommend SSWW to all his friends. Pawar, being a rather charitable carny, shrugged his shoulders, collected 3 SSs, and admitted Trevor onto the “Train of Terror.”

Officer Joan Nickel proceeded to arrest Pawar under S393(1) of the Criminal Code, and Trevor under S393(3) of the Criminal Code, after she witnessed the exchange. Both were convicted under the respective sections, and are now appealing the decisions.

Issue 1: The determination of Pawar’s culpability

Was it Pawar’s duty to collect a fare, toll, ticket or admission, and if so, did he fail to perform this duty under S393 (1) of the Criminal Code of Canada (CCC) where:
I) Pawar is a proud employee of SSWW, a traveling carnival operated throughout Southern Ontario,
II) Pawar’s task of running the “Train of Terror,” is to collect fares from the riders and to operate the “on and off” switch,
III) Pawar allowed Trevor to ride the “Train of Terror” for; 3 SSs and the promise that Trevor would recommend SSWW to all his friends, where:
a. The price of riding the “Train of Terror” was 5 SSs, and
b. The only currency accepted at SSWW are SSs.
S393(1) of the Criminal Code states:

393. (1) Every one whose duty it is to collect a fare, toll, ticket or admission who willfully
1) fails to collect it,
2) collects less than the proper amount payable in respect thereof, or
3) accepts any valuable consideration for failing to collect it or for collecting less than the proper amount payable in respect thereof,
is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years.

Several discrepancies in S393(1) must be resolved to determine Pawar’s culpability.

1) ‘Duty’ is an obligatory task arising from one’s position at work

Does the assignment of collecting fares at one’s job imply that it is their ‘duty’ to collect fares? Duty can have a special meaning referring to a responsibility derived from an altruistic purpose; ‘it is my duty to protect my country in order to protect the rights and freedoms I believe in.’ On the other end of the spectrum, duty can mean “obligatory tasks, conduct, service, or functions arising from one's position.”[1]

Constructing ‘duty’ to mean the former interpretation restricts when the word ‘duty’ applies. It prevents the word ‘duty’ from being used in most employment contexts, as an employee would likely not have that same sense of purpose emanating from the former interpretation.
However, the latter interpretation of ‘duty’ best fits the legislation, because S393 falls under Part X of the CCC, which explicitly states it is about “Fraudulent Transactions Relating to Contracts and Trade.”[2] The prevention of fraud in trade and transactions is closely correlated with the tasks of what an employee does as both are integral parts in an efficient market economy.

The latter interpretation of ‘duty’ will be used in determining S393 due to the clear legislative purpose to prevent fraud in relation to transactions and trade. Therefore, it makes sense to assume it was Pawar’s duty to collect a fare from Trevor because that was his assigned task.

2) ‘Fare’ should be understood broadly, and should not be restricted to transportation

Is the word ‘fare’ restricted to transportation, or should it be applied in a broad context; ‘the fare one pays to go on a ride.’

The legislative language implies ‘fare’ should be interpreted narrowly, where it would cover only transportation fares. ‘Fare’ is part of a list of nouns in S393(1) that has; ‘toll, ticket and admission.’ The common description given by the definitions of these four words is: a price paid for access to transportation, or the ability to be transported (i.e. a fare to cross a bridge).[3] Lending credence to this explanation of fare is the division preceding S393, which explicitly mentions transportation:
“FRAUD IN RELATION TO FARES, ETC. / Idem / Fraudulently obtaining transportation.”[4]

One is referred to S393 when looking up transportation in the CCC index.[5] These legislative hints clearly indicate fare should be interpreted in the transportation context.
S14 of the Interpretation Act states:

Marginal notes and references to former enactments that appear after the end of a section or other division in an enactment form no part of the enactment, but are inserted for convenience of reference only.[6]

This means the division preceding S393 explicitly mentioning transportation and the CCC index referring to S393, are not part of S393. They may be there for reference, or in the case of the index reference, to illustrate a specific case in the transportation context.
As mentioned above, the purpose of Part X of the CCC is to prevent fraudulent transactions. No other section in Part X of the CCC covers the issue of a fare in a broad context. If the purpose of Part X is to prevent fraudulent transactions, and the purchase of a fare is a transaction, and no other section in Part X deals with fares in a context outside of transportation, it is logical ‘fare’ should be applied broadly to cover all transactional activities that may resemble a fare.

Therefore, S393(1) applies to Pawar as it was his duty to collect fares for the coaster.[7]

3) ‘A Fare’ refers to a representation of payment

Reading ‘a fare’ in S393(1) poses problems because ‘a fare’ is a noun subject to the application of adjectives. For example, if I ride the TTC, my fare is one TTC token. Paying one TTC token represents the proper amount. However, if I paid a NYC token, I have still paid ‘a fare.’ However, I have not paid the implicitly required fare.

The principle of preventing fraudulent transactions emphasizes the first understanding of ‘a fare’; ‘a fare’ should be prescribed and non-negotiable. The reasoning behind this would be to ensure employees collecting proper fares. It would be used as preventive measure against people looking to pay less than the proper, prescribed amounts through the legal arbitrage of words.

Collecting only the proper fare as a form of consideration would have the effect of stifling business, which clearly is not the intent of the legislation. The legislature has set out subsection (b), which expressly discusses the collection of less than the proper fare. The legislation makes it clear other forms of payment are possible, and should be dealt with when those questions arise. It also allows for ‘a fare’ to be a representative amount that can be in flux, and subject to who the negotiating parties are.

In order to allow liquid transactions between parties, a fare should refer to a representation of payment. Whether the total transaction could be considered fraud should be considered in regards to the “proper amount payable.” Therefore, Pawar did accept a representation of payment by accepting 3 SSs.

4) ‘Proper Amount Payable in respect thereof’ should be interpreted in the context of what the transaction is, and who the transacting parties are

It is clear from the legislation that the proper amount payable is a substitute for not collecting the proper fare in subsection 393(1)(a). However, it is not clear as to what a ‘Proper Amount Payable’ is and who determines what a ‘Proper Amount Payable’ is.

‘Proper Amount Payable’ could strictly mean a cash equivalent of a fare, ticket, toll or admission. For example, if I want to ride the TTC, and I don’t have a TTC token, I must pay the cash equivalent of $2.25. If I ask the driver for a discount and recommend the TTC to all my friends, I will be rebuffed. The reason is a TTC driver has no authority to negotiate with the public, and must collect what is prescribed to him by his bosses. This is especially true for a public good funded by public taxes.

Restricting ‘Proper Amount Payable in respect thereof’ to only cash equivalents would stifle trade that takes place between private entities, where trade is most-times conducted on understandings and IOU’s. However, even in the private context, rules exist as to what each agent of a company can do and accept on behalf of their company. For example, Joe the Taxicab Driver, working for Beck’s Taxi business, gives Bob the Mechanic discounted fares for a tune-up and oil check. Beck’s taxi business may encourage this barter exchange from one of their drivers because getting a tune-up would be an eventual expense, and taking immediate care of a cab would prolong a cab’s service, giving higher possibility that Joe’s taxi driving services will be on the market, and efficiently allocated.

The legislative intent of Part X of the CCC is to prevent fraudulent transactions, not to hinder the business activities of private person’s. Therefore, in order to decide if the consideration in respect of a fare is truly a ‘Proper Amount Payable,’ it should be analyzed through what was the trade, and who conducted it.

The argument exists that Pawar would never try to get an improper amount of consideration. As a proud carnival employee, he knows when to make a good deal when he sees one. And getting the goodwill of the people, and free advertising is worth more than 2 SSs, which can presumably be used only at SSWW.

However, Pawar is not assigned the task of renegotiating fares. His job is to collect them, and press the “on and off” button. Being a proud carny does not make you a good businessman, although the cynical argument exists that it makes you a great shyster. As well, collecting the goodwill of people and advertising at an existing location does not make sense for a traveling carnival. A potential reason why the only currency accepted at SSWW are SSs are to force people to buy more SSs than they need. Giving Trevor a discount would defeat the purpose of this ingenious plan.

But Trevor is a well-known London resident, and we do not know when the carnival is leaving. Trevor’s advertising might encourage more people to attend the park, and purchase SSs. However, the facts do not state whether Pawar knows if Trevor is well known.
There are a lot of missing facts in the case, but Pawar did get the proper amount payable. Being benevolent for a customer once in a while promotes the reputation of a private business, especially a carnival, where word-of-mouth advertising is crucial. Although it is not Pawar’s job to negotiate with customers, not getting 2 SSs for one or two customers during the day is a reasonable discretion for Pawar, a proud carnival employee.

5) ‘Accepts’ should be applied to those employees who accept for their own selfish reasons, where their acceptance does not benefit their employer

On whose behalf must a person ‘accept’ valuable consideration for S393(1)(c) to apply? Does the word ‘accepts’ have so broad a meaning that it encompasses everyone accepting valuable consideration outside of an allotted fare, toll, ticket or admission, for the benefit of their employer? Or does ‘accepts’ apply only to those people who accepted with the intent of personally gaining from the transaction, deriving no benefit for their employer?

S393(1)(c) would contradict S393(1)(b) if accepts were interpreted broadly enough to include anyone who accepts valuable consideration for the benefit of a company. This would preclude agents of a company accepting a proper amount payable, or any valuable consideration. Therefore, ‘accepts’ should be construed narrowly so it does not contradict S393(1)(b) and would only be applied to those employees who accept for their own selfish reasons, and do not benefit their employer.

S393(1)(c) does not apply to Pawar when he accepted Trevor’s offer to ride the fair because the promise of free advertising would benefit SSWW. Of course, the counter argument would be Pawar accepted this consideration for his own benefit, in order for him not to deal with the hassles emanating from the persistent hustler, Trevor, and sparing himself a headache. The argument could be brought forth that Pawar, being a charitable guy, and not knowing the fact Trevor is well known in the London area, accepted Trevor’s offer to gratify his philanthropic personal nature which beckons him to be charitable. However, the counter to all of this is Pawar is a charitable carny, believing that goodwill will help spur customers. The fact is, there is not enough to really know about why Pawar accepted this promise, but from the given facts, Pawar did not do this for any selfish reasons, which S393(1)(c) is trying to avoid.

Synopsis to Issue 1:

Although it was Pawar’s duty to collect fares, Pawar did accept the proper amount payable, and he accepted the proper amount payable for SSWW’s benefit.

Issue 2: The determination of Trevor’s culpability

Did Trevor obtain transportation by land, air or water, in a manner inconsistent with S393(3) of the CCC, where:
I) Trevor rode the “Train of Terror” for 3 SSs when the cost was 5 SSs
II) Trevor received the reduced fare because he promised Pawar he would recommend SSWW (which is a traveling carnival) to all of his friends,
a. Trevor is a well-known London resident

S393(3) states:

Every one who, by any false pretence or fraud, unlawfully obtains transportation by land, water or air is guilty of an offence punishable on summary conviction.[8]

The following analysis will deal with some definitions found in the CCC. S15 of the Interpretation Act delineates how definitions in any act should be regarded:

(1) Definitions or rules of interpretation in an enactment apply to all the provisions of the enactment, including the provisions that contain those definitions or rules of interpretation.
Interpretation sections subject to exceptions
(2) Where an enactment contains an interpretation section or provision, it shall be read and construed
(a) as being applicable only if a contrary intention does not appear; and
(b) as being applicable to all other enactments relating to the same subject-matter unless a contrary intention appears.[9]

1) A False Pretence is a false representation for the purpose of inducement

False Pretence is defined in S361 of the CCC:

(1) A false pretence is a representation of a matter of fact either present or past, made by words or otherwise, that is known by the person who makes it to be false and that is made with a fraudulent intent to induce the person to whom it is made to act on it.
Exaggeration
(2) Exaggerated commendation or depreciation of the quality of anything is not a false pretence unless it is carried to such an extent that it amounts to a fraudulent misrepresentation of fact.
Question of fact
(3) For the purposes of subsection (2), it is a question of fact whether commendation or depreciation amounts to a fraudulent misrepresentation of fact.

Although S361 falls under part IX of the CCC, S15 of the Interpretation Act states that a definition from another section shall apply to all provisions of that act unless a contrary intention appears. In this case, Part X of the CCC is to prevent fraudulent transactions. It flows the definition of false pretence in Part IX is applicable to Part X, because no contrary intentions appear between the two sections.

The question remains whether Trevor’s promise to Pawar was a false pretence. In this case, Trevor is a well known London resident, he has joyful exuberance about him that would implicate that he is really excited about SSWW, and that he would tell all his friends about what a wonderful time he had. On the other hand, SSWW is a traveling carnival, and recommending something that may not exist the next day might be silly, and prove null. However, you can still recommend something, even if it will not exist. You can recommend that if you get a chance to go to the Montreal Expos, go and do it. And if the Expos are in Washington D.C. next year, it did not preclude you from recommending people from watching them in Montreal.

Regarding the potential Trevor exaggerated his claims, but many facts are missing. It is unknown if Trevor has any friends. He may be well known, but so is Britney Spears. And Britney Spears does not know everyone that knows about her. However, looking at all the facts, such as Trevor’s joyful exuberance, it seems clear he did not give false pretences as described under S361 of the CCC.

2) There is an inference of reasonable time regarding fraud and promises to be performed

S380 of the CCC, which is in Part X, defines as:

380. (1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service…[10]

Like false pretenses, the definition of fraud is explicitly given in the CCC. In order to determine if Trevor did commit fraud, it must be shown that he deceived Pawar about recommending SSWW to all of his friends in order to receive the service of going on the ride. However, the problem about deceit, especially a promise to do something in the future, requires time to deceive, or not perform.

If time is not read into the legislation, fraud would occur at time t0+1second. Fraud would occur as soon as someone promised to deliver something with no specifics given regarding time.

However, Part X of the CCC is not to preclude promises from being entered into in the business context, but to prevent false misrepresentations. Therefore, in order for fraud to take place with regards to future promises, a reasonable time must pass before a lie exists.

Therefore, a reasonable time must pass before fraud becomes applicable. It is clear that a reasonable time did not take place for Trevor to have committed fraud. He promised Pawar he would tell all of his friends. He enjoyed the ride. He got off the ride. Joan Nickel arrested him. He did not recommend SSWW to any of his friends, but it is clear he never even had any chance to do it.

3) A roller-coaster is not transportation

Does transportation refer to all services that have the effect of moving one person from one place to another (like a helicopter tour), or does it refer to services whose purpose is to move a person from one place to another (a subway or a cab)?

Both these interpretations share numerous characteristics that make up transportation. They move people from point A to B and sometimes back to A again. They are done on land, air and water. You need to pay money to get on them. But their purposes are completely different, as mentioned above.

Only S393 specifically deals with the issue of transportation in Part X of the CCC. Limiting the scope of transportation to only those services whose motive is to facilitate movement, might allow for fraudulent transactions to occur for services that use transportation methods to provide a service. This clearly is not the intention of the legislators, whose purpose is to allow for certainty and honesty in all business practices. Therefore transportation under 393(3) should not consider motive of movement, but should be a balance of what the service provided is, and what the purpose of its service is.

Is the “Train-of-Terror” transportation? It has the characteristics of movement among several points. It is a service where consideration flows between parties. Even though it moves people from A to B, it is more of a feeling you get from it, and could be analogized to a ‘magic fingers’ in a 1-star hotel. Are ‘magic-fingers’ also considered transportation because they have the effect of moving people a few vertical centimeters? And unlike helicopter tours, a roller coaster is stationary, confined to tracks with only one spot. A roller coaster can then be analogized to a railroad, also confined to a connected space. But unlike a train on a railroad, the roller coaster only has one exit.

The “Train-of-Terror” is not transportation. Although it moves people between points, it encompasses a small, stationary space to move people, and its primary purpose is to give a person a thrill. Considering a roller-coaster transportation might open the floodgates to interpret anything, that induces movement, to be transportation; like alcohol which produces drunkenness, and induces one to walk in a path they normally would not take.

Synopsis to Issue 2:

Trevor did not receive his discount through false pretences or fraud. The “Train-of-Terror” is also not considered a form of transportation.

Conclusions:

Both Pawar and Trevor are free to go. Pawar did collect the proper amount payable, an amount that should be determined by what the transaction is, and who the transacting parties are, and he collected the proper amount payable for the benefit of the company. Trevor did not commit fraud or did not give any false pretences to Pawar. As well, a roller coaster is not transportation.

Index

These definitions were attained from Merriam-Webster’s online dictionary.

The URL is http://www.m-w.com/

Admission:
See root word of admit

Admit:
1 a : to allow scope for : PERMIT b : to concede as true or valid 2 : to allow entry (as to a place, fellowship, or privilege) intransitive senses

Duty:
1 : conduct due to parents and superiors : RESPECT2 a : obligatory tasks, conduct, service, or functions that arise from one's position (as in life or in a group) b (1) : assigned service or business (2) : active military service (3) : a period of being on duty3 a : a moral or legal obligation b : the force of moral obligation

Fare:
1 Etymology: Middle English faren, from Old English faran; akin to Old High German faran to go, Latin portare to carry, Greek peran to pass through, poros passage, journey
2 a : the price charged to transport a person b : a paying passenger on a public conveyance.

Ticket:
2 a : a certificate or token showing that a fare or admission fee has been paid b : a means of access or passage

Toll:
1 : a tax or fee paid for some liberty or privilege (as of passing over a highway or bridge)2 : compensation for services rendered: as a : a charge for transportation
Transportation:
1 : an act, process, or instance of transporting or being transported
3 a : means of conveyance or travel from one place to another b : public conveyance of passengers or goods especially as a commercial enterprise

Bibliography

Legislation:

Criminal Code, R.S.C. 1985, c. C-46.

Interpretation Act, RSC 1985, c I-21.

Online dictionaries:

Merriam-Webster’s online dictionary, http://www.m-w.com/.
[1] Please see index
[2] Criminal Code, R.S.C. 1985, c. C-46, Part X, (CCC).
[3] Please see index
[4] CCC, supra note 2 at s. 393.
[5] Ibid. at Index.
[6] Interpretation Act, RSC 1985, c I-21, s. 14.
[7] (However, if it were to hold that ‘fare’ should be applied only the transportation context, please see issue 2, part 3, the discussion if a roller coaster is transportation.
[8] CCC, supra note 2 at s. 361.
[9] Interpretation Act, supra note 6 at s. 15.
[10] CCC, supra note 2 at s. 380(1).