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Mohamed Harkat takes part in a press conference in Ottawa on Wednesday, April 25, 2012.Sean Kilpatrick/The Canadian Press

A contentious terrorism provision creating the use of "special advocates" who are privy to secret government evidence is constitutional, the Federal Court of Appeal ruled today.

But the federal government's victory triumph was tempered by a finding that the rights of suspected terrorist Mohamed Harkat were violated by the use of electronic recordings that have since been destroyed.

Any such evidence can only be used against Mr. Harkat if he was privy to the contents, the court said. It sent the case back to a trial judge for reconsideration based only on the portions that are properly admissible.

In another important victory for those targeted under the security certificate process, the three-judge panel found that Mr. Harkat's trial judge was wrong to create a special "class privilege" for informers in these cases.

The move had granted them strong guarantees of confidentiality and anonymity that are analogous to protection given to police informers.

The finding on class privilege was very significant for Mr. Harkat, since some of the key evidence used to find his security certificate valid came from anonymous informers and had also been destroyed.

The court said that Canadian Security and Intelligence Service officers were acting in good faith when they destroyed the original evidence in keeping with policy.

However, the breach of their duty to retain the information and disclose it under the act left Mr. Harkat unable to challenge the accuracy of the summary and the information – a violation of his Charter right to life, liberty and security of the person, the court said.

Mr. Harkat's lawyers, Matt Webber and Norman Boxall, expressed delight that the judgment overturned a trial finding that their client's security certificate was reasonable and valid.

"In our opinion, the destroyed summaries were pivotal," Mr. Boxall said in an interview. "With their exclusion, the conclusion should be different and the certificate found unreasonable."

Mr. Boxall also praised the appellate judges for rejecting the notion of a class privilege for CSIS informers.

"We remain of the view that the legislation is unconstitutional and unfair in denying the named person the opportunity to know and meet the case," Mr. Boxall said.

The class privilege was a major irritant to lawyers and special advocates who attempt to test the credibility of those purporting to provide damning evidence against terror suspects.

The Federal Court of Appeal panel said that judges in security certificate cases already have discretion to protect information where there exists a danger to the safety of the source or national security.

If the alleged danger does not exist, the information must be disclosed to the named person in the security certificate, the court said.

The case was an important test of a special procedure created after the previous security certificate system was found unconstitutional.

Invoking the security certificate process has been the main federal response to refugees who are suspected of having terrorist backgrounds. About a half-dozen such refugees have spent lengthy periods in detention while the process went through rigorous legal challenges.

In a key decision in 2007, the Supreme Court of Canada struck down security certificates as being unconstitutional. The government responded by rewriting the law to allow security-cleared lawyers – known as special advocates – to attend closed hearings where they can hear government evidence and protect the rights of the accused.

Adopted from a model used in the United Kingdom, special advocates go through a designation process and are sworn to maintain the secrecy of what they hear behind closed doors.

After creating the new process, Ottawa re-filed five new certificates that designated five of the suspected terrorists – all Muslims – as being threats to national security who should be expelled from Canada.

The legal challenge alleged that parts of the special advocates procedure forbid them from communicating with the detainees or their ordinary legal counsel about the confidential information that is divulged to them in secrecy. They argued that muzzle provisions go well beyond being a legitimate means of ensuring that classified information remains off limits to the public.

However, federal prosecutors argued during the constitutional challenge that the revamped legislation strikes a fine balance between national-security interests and fairness to the detainees.

They said that revealing sensitive intelligence to suspects and lawyers – and ultimately, the public – would threaten Canada's safety and its ability to obtain information from other spy services.

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