Regulation of Pawnbrokers by Municipalities

Criminal Law Jurisdiction
Second, the case is important in its finding that the Second Hand Dealers Bylaw did not encroach on the exclusive federal jurisdiction over criminal law.

The Petitioner alleged that two requirements in the Second Hand Dealers Bylaw were in pith and substance criminal law. These were the obligation of the pawnbroker to produce the second hand dealer's register for inspection by the police and the requirement that, for every business day, a form that included information about what was pawned, when, by whom and for how much, should be delivered to the police the following business day. The pawnbroker argued that the sole purpose of these sections was to facilitate criminal investigations.

The Court in Royal City Jewellers concluded that these sections do not establish criminal offences or establish acts that are defined as criminal, but are rather directed at the investigation and prevention of crime. The Court relied on earlier decisions which found that bylaws that deter criminal activity, or prevent or suppress the conditions which foster the development of crime, do not necessarily bring them within the federal government’s jurisdiction over criminal law.

Even though it would be an offence to fail to comply with the sections of the Second Hand Dealers Bylaw, the Court concluded that imposing these requirements does not criminalize the business actions of a pawnbroker; it only regulates aspects of the pawnbroker's operation.