SCC: Corporations Cannot Suffer ‘Cruel & Unusual Punishment’

Blueprints and tools representing a small business in Quebec that challenged a fine as cruel and unusual punishment

Section 12 of the Canadian Charter of Rights and Freedoms (the “Charter“) protects Canadians from cruel and unusual punishment. While the Charter does not define what would constitute “cruel and unusual”, case law has established this includes any punishment that is grossly disproportionate in comparison with the act for which the punishment is levied. While the Charter extends rights to all Canadian people, it is not as clear when it comes to corporations.

Under the law, corporations are considered ‘people’ in certain circumstances, and the law has made it clear that certain Charter rights are available to corporations in their capacity as people. For example, corporations are protected from unlawful search and seizure under section 8. However, in a recent decision of the Supreme Court of Canada, the Court declined to extend protection under section 12 to a corporation out of Quebec.

Corporation Argues Mandatory Minimum Fine Under the Building Act Constitutes a violation of its Section 12 Charter Rights

The company was a small home renovation enterprise that had been issuing invoices to clients from a company that did not possess the correct licences to complete construction or renovation projects. However, the owners of the business co-owned a separate venture that did possess the correct licences. The company was convicted and fined the mandatory minimum fine under section 197.1 of the Building Act. The minimum fine for the offence was $30,843.

The company appealed the decision to the Court of Quebec, arguing the constitutionality of the mandatory fine, saying that it violated the company’s right to be protected from cruel and unusual punishment under section 12 of the Charter.  The Court agreed that the offence was merely an administrative matter, but it dismissed the company’s claim, saying that by applying section 12 protections to a corporation, it would trivialize the protection. The company appealed to the Quebec Superior Court, unsuccessfully. However, the Quebec Court of Appeal allowed the appeal, finding that corporations could be subjected to ‘cruel and unusual’ fines, and therefore should be protected under section 12 of the Charter.

The Attorney General of Quebec and the Director of Criminal and Penal Prosecutions appealed that decision to the Supreme Court of Canada.

The Language and Intention of Section 12 Excludes Corporations from Protection

The Supreme Court looked at the language set out in section 12 of the Charter and noted the language indicated the protections were meant for individuals and not for corporations. The word ‘cruel’ is not a word normally applied to inanimate objects or corporate entities. ‘Cruel’ indicates something that causes human pain and suffering, whether that pain is physical or mental. Further, the Court noted that unlike England’s Bill of Rights and the U.S. Constitution, section 12 of the Charter specifically omitted protection against excessive fines. The Court found this was intentional, and as a result, excessive fines on their own are not unconstitutional, saying that for a fine to be considered unconstitutional, it must offend standards of decency. The only way to do this is if the fine offends human dignity, and therefore, a fine against a corporation could not qualify.

The Court also looked to international treaties of which Canada is a part, to see how ‘cruel and unusual punishment’ is defined and applied. In binding treaties such as the Convention against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment and the International Covenant on Civil and Political Rights, protection against cruel and unusual punishment is reserved only for human beings and not corporations.

Supreme Court Clarifies How Corporations Can Claim Charter Protection

Corporations are clearly not excluded from all Charter protections, however, section 12 is not one to which they are entitled. In order for a corporation to claim Charter protection, it must establish it has an interest within the scope of the guarantee provided. A Court must then determine, by examining the language and historical origins of the section, whether the intention was to extend the scope of protection to corporations.

The lawyers at Prudent Law in Mississauga are diligent advocates for both corporate and individual clients in civil litigation matters. They provide practical advice and experienced representation in a variety of matters. If you are facing a legal dispute, and you’d like to discuss your options with one of our experienced corporate or litigation lawyers, please call us at 905-361-9789 or contact us online.

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