The Supreme Court of Canada has ruled that corporations are not protected under s. 12 of the Canadian Charter of Rights and Freedoms (the “Charter”), after a corporation claimed that a $30,000 fine constituted “cruel and unusual punishment”.
Corporation Fined $30,000 Under Quebec Legislation
A Quebec corporation was fined $30,843 by the Court of Québec after being found guilty of carrying out construction work as a contractor without holding a license for that purpose as prohibited by the Building Act. Section 197.1 of the Building Act sets out mandatory minimum fines for both corporations and individuals.
The corporation challenged the constitutionality of the mandatory minimum fine, claiming that it constituted “cruel and unusual punishment”, which is contrary to protections set out in the Charter. Specifically, s. 12 of the Charter states:
12. Everyone has the right not to be subjected to any cruel or unusual treatment or punishment.
Both the Court of Québec and the Quebec Superior Court dismissed the challenge. The Court of Québec concluded that expanding the protection of rights intrinsically linked to individuals to include corporate rights would trivialize the protection granted by s. 12, andthe Quebec Superior Court found that the provision’s purpose was the protection of human dignity, which applies exclusively for natural persons.
However, 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.
Supreme Court of Canada Finds that Charter Provision Does Not Apply to Corporations
The Supreme Court of Canada unanimously found that s. 12 of the Charter does not apply to corporations; it offered three concurring reasons.
The majority of the court found that s. 12 of the Charter 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 protective scope of s. 12 is thus limited to human beings. The court found that its own jurisprudence on s. 12, in both its French and English versions, is marked by the concept of human dignity, and the existence of human beings behind the corporate veil is insufficient to ground a s. 12 claim of right on behalf of a corporate entity, in light of the corporation’s separate legal personality.
The majority stated:
“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.”
In a concurring opinion, written by Abella J., three of the other judges found that the purpose of s. 12 of the Charter is to prevent the state from inflicting physical or mental pain and suffering through degrading and dehumanizing treatment or punishment. The provision is meant to protect human dignity and respect the inherent worth of individuals and its intended beneficiaries are people, not corporations. Abella J. concluded:
“Corporations are, without question, entitled to robust legal protection, constitutional or otherwise. But protection for a quality it does not have, namely, human dignity or the ability to experience psychological or physical pain and suffering, is a remedy without a right. Since it cannot be said that corporations have an interest that falls within the purpose of the guarantee, they do not fall within s. 12’s scope.”
Finally, Kasirer J. wrote a third concurring opinion, agreeing that the protection offered by s. 12 of the Charter does not extend to corporations; although the scope of s. 12 has been broadened over the years, its evolution is still concerned only with human beings. Starting from the language of s. 12, particularly the word “cruel”, it would distort the ordinary meaning of the words to say that it is possible to be cruel to a corporate entity.
Get Advice
Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continue to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.
At Baker & Company, we are both everyday trusted advisors and problem solvers. Our team of skilled and experienced litigation lawyers are cherry-picked for their ability to analyze cases, counsel clients, and examine and present evidence at trial. Our litigation team has dealt with all kinds of disputes in courts across Ontario and has significant experience at both the trial and appellate levels. Call us at 416-777-0100 or contact us online for a consultation.
