Supreme Court dismisses company’s cruel and unusual punishment claim by Jennifer Quaid, November 24, 2020, The Conversation
In January 2020, the Supreme Court of Canada heard a case that made headlines because it raised a provocative question: Can corporations be subject to cruel and unusual punishment?
While the question might strike the ordinary person as amusing, by the time the Attorney General of Québec vs. 9147-0732 Québec Inc. case arrived at Canada’s top court, the stakes were high. That’s because some established elements of corporate and criminal law were thrown into doubt when the case was decided by a 2-1 majority) of the Québec Court of Appeal in favour of a Québec contracting company.
The company had challenged what it thought was an unreasonably high mandatory minimum fine that it claimed could push it into bankruptcy. It argued the fine, upwards of $30,000, was an over-the-top consequence for doing renovation work without a permit contrary to the province’s Building Act.
In order to support its claim that the fine fit within the criteria for Section 12 of the Canadian Charter of Rights and Freedoms — namely that it was grossly disproportionate — the company argued it was cruel because a bankruptcy would have a significant negative impact on shareholders and employees who depended on the business for their livelihoods.
This argument seemed a big stretch based on current law. It was surprising therefore when two of three Québec Court of Appeal judges agreed with the company, finding that nothing in the text of Section 12 precluded the inclusion of corporations.
The majority held that the protection against cruel and unusual punishment is not inextricably tied to protecting human beings from degrading and inhumane treatment. They did not see a problem with extending protection to corporations if penalties inflict damage on the people involved with a corporation.
The dissenting judge disagreed and said that the long history of the protection against cruel and unusual punishment showed that the very core of Section 12 is about protecting human dignity.
The Supreme Court justices agreed with the dissenting Québec judge and unequivocally rejected the notion that Section 12 could ever apply to non-human entities. In support of its ruling, the court referred to several landmark cases decided in the early days of the Charter, including the 1987 decision of Irwin Toy Ltd vs. Attorney-General of Québec. https://www.youtube.com/embed/AW95-XeGp0E?wmode=transparent&start=0 Prof. Anna Lund of the University of Alberta explains the Irwin Toy decision in January 2020.
In the more recent case, the Supreme Court ruled:
“Simply put, the text ‘cruel and unusual’ denotes protection that ‘only human beings can enjoy’ …. The protective scope of Section 12 is thus limited to human beings …. And the existence of human beings behind the corporate veil is insufficient to ground a Section 12 claim of right on behalf of a corporate entity, in light of the corporation’s separate legal personality.”
The court also rejected the argument that the impact on a company’s stakeholders should be considered when determining the scope of Section 12.
Shuts the door to future challenges
The ruling is important.
First, by firmly closing the door to Section 12 challenges by corporations, we avoid injecting unnecessary uncertainty into the prosecution of corporations for regulatory offences. Many of those offences carry significant fines, limited to corporations, as a means of promoting greater compliance with laws designed to protect the public interest, such as those mandating workplace health and safety standards and environmental protections.
Second, by rejecting the notion that the prospect of bankruptcy (and its effects on people) is relevant to Section 12, the Supreme Court has indirectly affirmed a key principle of corporate sentencing established in 2013 by the Ontario Court of Appeal in the Metron case.
Metron was a construction company prosecuted for criminal negligence causing death following the collapse of a swing stage on a construction site in Toronto in December 2009. Four men died and one was permanently disabled because they were not wearing lifelines as required by law. Metron pleaded guilty, but the Crown and defence disagreed significantly on the amount of the fine.
The trial court imposed a lower fine in part because of the company’s poor financial situation. The Ontario Court of Appeal disagreed, ruling that the risk of bankruptcy is irrelevant when deciding what amount of fine is an appropriate punishment. The Supreme Court’s ruling on the Québec contracting company therefore nips in the bud the doubt the Québec Court of Appeal decision had cast upon the Metron decision.
Finally, by concluding that a corporation couldn’t point to the collateral damage a fine might cause to its employees and other stakeholders to make its case, the Supreme Court has clearly adhered to the current state of corporate law that disregards corporate personality only in rare circumstances.
By doing so, the Supreme Court has quelled any fears that this case might weaken this cornerstone principle of corporate law, including under the Canada Business Corporations Act, by blurring the normally sharp line drawn between the corporation and its human stakeholders.
Protection against cruel punishment doesn’t apply to corporations: Supreme Court by The Canadian Press, Nov 5, 2020, Kamloops This Week
The Supreme Court of Canada says only people, not corporations, benefit from the charter protection against cruel and unusual punishment.
The decision comes today in a case involving a numbered company that faced a fine under the Quebec Building Act for work done without a licence. article continues below
The corporation was fined $30,843 upon being found guilty.
The corporation challenged the constitutionality of the fine, arguing it violated the guarantee of protection against “any cruel and unusual treatment or punishment” in Section 12 of the Charter of Rights and Freedoms.
The Quebec Superior Court ruled that corporations are not protected under the constitutional provision.
However, the Quebec Court of Appeal overturned the finding and said the section can in fact apply, sending the matter back to trial court to rule on the issue of the fine.
This report by The Canadian Press was first published Nov. 5, 2020.
SCC Rules that Charter Protection from “Cruel and Unusual Punishment” Does Not Apply to Corporations by DBH LAW, November 5, 2020
The Supreme Court of Canada released a decision denying a Quebec corporation’s claim that a $30,000 fine constituted “cruel and unusual punishment” under the Canadian Charter of Rights and Freedoms (the “Charter”).
Quebec Corporation Challenges Fine as “Cruel and Unusual Punishment”
A Quebec corporation was found guilty of carrying out construction work as a contractor without holding a license for that purpose, which is an offence under s. 46 of the Quebec Building Act. The provision states:
46. No person may act as a building contractor, hold himself out to be such or give cause to believe that he is a building contractor, unless he holds a current licence for that purpose.
No contractor may use, for the carrying out of construction work, the services of another contractor who does not hold a licence for that purpose.
Under s. 197.1 of the Building Act, the penalty for an offence under s. 46 is a mandatory minimum fine which varies depending on whether the offender is an individual or a corporation. At the time, that provision stated:
197.1. Any person who contravenes section 46 or 48 by not holding a licence of the appropriate class or subclass is liable to a fine of $5,141 to $25,703 in the case of an individual and $15,422 to $77,108 in the case of a legal person, and any person who contravenes either of those sections by not holding a licence is liable to a fine of $10,281 to $77,108 in the case of an individual and $30,843 to $154,215 in the case of a legal person.
As a result, the Court of Québec imposed the then minimum fine for corporations of $30,843 on the Quebec corporation.
The corporation challenged the constitutionality of the mandatory minimum fine in s. 197.1 of the Building Act on the basis that it offended its right to be protected against cruel and unusual treatment or punishment under s. 12 of the Charter. Section 12 states:
12. Everyone has the right not to be subjected to any cruel or unusual treatment or punishment.
The Court of Québec dismissed the challenge, concluding that expanding the protection of rights intrinsically linked to individuals to include corporate rights would trivialize the protection granted by s. 12.
The Quebec Superior Court also heldthat corporations were not covered by s. 12, finding that the provision’s purpose was the protection of human dignity, a notion meant exclusivelyfor natural persons.
On appeal, however, the majority at the Quebec Court of Appeal allowed the corporation’s claim, concluding that since corporations could face cruel treatment or punishment through harsh or severe fines, s. 12 could apply to them. The dissenting judge was of the view that s. 12 did not apply to corporations.
Supreme Court of Canada Dismisses Corporation’s Charter Claim
The Supreme Court of Canada unanimously held that s. 12 does not apply to corporations. The majority found that the provision does not protect corporations from cruel and unusual treatment or punishment because the text “cruel and unusual” denotes protection that only human beings can enjoy. The court therefore concluded that the protective scope of s. 12 is limited to human beings. It stated that its own jurisprudence on s. 12 is marked by the concept of human dignity, and the mere fact that human beings exist behind the corporate veil is not sufficient to ground a s. 12 claim on behalf of a corporate entity, in light of the corporation’s separate legal personality.
The majority concluded:
“The protection against cruel and unusual punishment under s. 12 of the Charter therefore exists as a standalone guarantee. [E]xcessive fines (which a corporation can sustain), without more, are not unconstitutional. For a fine to be unconstitutional, it must be “so excessive as to outrage standards of decency” and “abhorrent or intolerable” to society […]. This threshold is, in accordance with the purpose of s. 12, inextricably anchored in human dignity. It is a constitutional standard that cannot apply to treatments or punishments imposed on corporations.”
As a result, the court allowed the appeal and the corporation was required to pay the fine.
Refer also to:
Supreme Court of Canada to release ruling if corporations are protected against “cruel and unusual treatment/punishment” under the Charter of Rights and Freedoms like people are. The ruling took a long time (9 months, in a pandemic), but not as long as the court’s Charter-damaging ruling in Ernst vs AER (12 months, not in a pandemic).
Nasty! Canadian courts describing “individuals as exhibiting ‘vexatious-style’ behavior without formally designating them as a vexatious litigant.” Is that how Supreme Court of Canada Justice Rosalie Abella gets away with ruling AER found Ernst to be “vexatious litigant” when evidence proves AER found Ernst to be a “criminal,” 7 years later, a terrorist – all without charges, evidence, trial or due process? With AG Jody Wilson-Raybould saying & doing nothing about Canada’s top judicial farce?
Wow, University of Alberta’s Centre for Constitutional Studies & Legal Education Society of Alberta haven’t yet realized that Canada’s Charter of Rights and Freedoms is a mangled, oil-soaked paper airplane flown out of a 26th storey window in downtown Calgary, fueled by Supreme Court of Canada knowingly publishing lies in their rulings.
Who orders a new hearing for a Supreme Court of Canada ruling where 9 justices knowingly published a lie and sent it to the media? Who “slaps” Justice Rosalie Abella for knowingly lying in her ruling and belittling the applicant? Certainly not the Canadian Judicial Council!
2017 01 25: Jessica Ernst Open Letter to Chief Justice Beverley McLachlin Regarding False and Seriously Damaging Statements in Justice Rosalie Abella’s Supreme Court of Canada Ruling, Ernst v AER [As expected, Ernst received no reply, no apology, no corrected ruling removing the defamatory statements.]
2017 01 21: Damaging the Charter: Ernst vs Alberta Energy Regulator by Lorne Sossin, Dean Osgoode Hall Law School, York University. Comment: “It causes one to question how much both the plurality and the dissent were driven by the desired end-state of the judgment, rather than consistency in applying principles of public law.”