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 held that corporations were not covered by s. 12, finding that the provision’s purpose was the protection of human dignity, a notion meant exclusively for 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.

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