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Canada Quebec Court of Appeal rules companies can suffer cruel and unusual punishment

The Quebec Court of Appeal has ruled that the Charter protection against cruel and unusual punishment can apply to companies as well as individuals.

The question arose when a company convicted of acting as a construction contractor without the necessary license was fined $30,000, the minimum under the provincial Building Act.

The numbered company sought to have the minimum fine in the law struck down. It invoked Section 12 of the Canadian Charter of Rights and Freedoms, which states, “Everyone has the right not to be subjected to any cruel and unusual treatment or punishment.”

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In a decision rendered Monday, the Court of Appeal sided with the company, with one of the three judges who heard the case dissenting.

The main argument against giving a legal entity the protection provided under Section 12 is that it falls within the framework of the preservation of “human dignity.” In an online “Guide to the Canadian Charter of Rights and Freedoms,” the federal government cites torture, abusive use of force and disproportionate prison sentences as examples of cruel and unusual punishment.

But Court of Appeal Justice Dominique Belanger, writing for the majority, said she is not convinced Section 12 refers only to “human dignity.” She noted that companies have successfully invoked other Charter protections in the past.

“The fine can be cruel to the legal entity,” she wrote. “A legal entity may suffer from a cruel fine that manifests itself by its harshness, its severity and a sort of hostility.”

She said she does not believe that Canadian society would find it acceptable for a company to be driven into bankruptcy by a disproportionate fine, “thereby jeopardizing the rights of its creditors or forcing layoffs.”

Writing in dissent, Justice Jacques Chamberland said Section 12 should not be “distorted so as to protect the economic rights of a legal entity.” If that were the case, he said, “it is easy to foresee the negative impact it would inevitably have on all public policy laws aimed at regulating various sectors of economic activity and disciplining the participants.”

The court did not rule whether the specific fine in this company’s case violated the Charter. That question has been referred to another judge to decide.

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