In a 218-page decision released July 19, a five-member majority of the court has held the state is not entitled to an absolute immunity from liability for damages when it enacts unconstitutional legislation that infringes Charter rights, but rather — as the court held in Mackin v. New Brunswick (Minister of Finance), 2002 SCC 13 — the state may be liable for Charter damages if the legislation is “clearly unconstitutional or was in bad faith or an abuse of power.”
The decision, which was jointly authored by Chief Justice Richard Wagner and Justice Andromache Karakatsanis, says absolute immunity “fails to properly reconcile the constitutional principles that protect legislative autonomy, such as parliamentary sovereignty and parliamentary privilege, and the principles that require the government be held accountable for infringing Charter rights, such as constitutionality and the rule of law.”
Chief Justice Richard Wagner
Shielding the government from liability in even the most egregious circumstances, absolute immunity would subvert the principles that demand government accountability, the two justices wrote.
“Accordingly, damages may be awarded under s. 24(1) [of the Charter] for the enactment of legislation that breaches a Charter right,” the two justices wrote. “However, the defence of immunity will be available to the state unless it is established that the law was clearly unconstitutional, or that its enactment was in bad faith or an abuse of power. This is a high threshold. But it is not insurmountable.”
The ruling gives the green light to a constitutional challenge launched by Joseph Power, a New Brunswick man who had been denied a criminal record suspension that led to him losing his job. At the time of his conviction, in 1996, people convicted of an indictable offence could apply for a record suspension five years after their release.
However, transitional provisions of legislation enacted since then by Parliament retroactively rendered him permanently ineligible for a record suspension. Those transitional provisions were subsequently declared unconstitutional, leading Power to seek damages under s. 24(1) of the Charter for the breach of his rights.
The Attorney General of Canada asked the court hearing Power’s claim to answer two questions — first, can the state be required to pay damages for governments preparing and drafting a bill that later became law and was subsequently declared unconstitutional and second, can the state be required to pay damages for Parliament enacting a bill into law, which was later declared unconstitutional.
The Court of Queen’s Bench of New Brunswick answered “yes” to both questions, finding that the state was entitled to only a limited immunity from Charter damages for unconstitutional legislation. The Court of Appeal of New Brunswick agreed and dismissed the Attorney General of Canada’s appeal.
The Attorney General appealed to the Supreme Court, arguing damages would never be appropriate for the enactment of legislation later declared unconstitutional because the declaration of unconstitutionality will always be sufficient, and judicial review of a decision under the invalid law may also be appropriate in certain cases.
But the majority ruled, provided an award of Charter damages is not duplicative, the potential to combine declarations and damages must remain available in situations where a declaration would “fail to satisfy the functional need for compensation, vindication or to meaningfully deter future breaches.”
“In some cases, a declaration of invalidity alone may be an insufficient and even hollow remedy. The availability of a declaration under s. 52(1) cannot absolutely displace a claim for damages under s. 24(1),” Chief Justice Wagner and Justice Karakatsanis wrote. “The same is true for the availability of judicial review for a decision under the invalid law.”
The government of Canada also argued that Charter damages would interfere with Parliament’s law-making functions, impeding the state’s ability to govern effectively. But the majority noted that the Supreme Court has held that good governance concerns may defeat an award of damages, it has also cautioned that the mere suggestion that damages will have a chilling effect on the government is not sufficient to defeat the applicant’s functional entitlement to Charter damages.
“Indeed, damages may promote good governance by encouraging constitutional compliance and deterring Charter breaches,” Chief Justice Wagner and Justice Karakatsanis wrote. “Canada nonetheless submits that constitutional principles — that ground those good governance concerns — require that there be an absolute bar to Charter damages for the enactment of unconstitutional legislation.”
It was a concern about the role of Parliament that led Justice Malcolm Rowe to dissent from the ruling, joined by Justice Suzanne Côté. He answered “no” to both the questions the Attorney General posed — the state cannot be required to pay damages for governments preparing and drafting a bill that later became law and was subsequently declared unconstitutional, and it should not be required to pay damages for Parliament enacting a bill which is held unconstitutional in the future.
Justice Rowe wrote the court has a responsibility to preserve the “inheritance” of Canada’s constitutional order, but noted Power called on it to “discard this and to subordinate parliamentary privilege to s. 24(1) of the Charter.”
“To do so would be to depart from precedent and to do so unwisely,” he wrote. “The jurisprudence is clear that remedies under s. 24(1) are available following the enactment of legislation, in relation to executive action pursuant to legislation. As the Attorney General of Canada points out, Mr. Power is not without recourse to a remedy, nor would others be. The respondent might have sought relief specific to his circumstances in addition to a declaration of invalidity.”
Justice Mahmud Jamal also penned his own dissent, joined by Justice Nicholas Kasirer. He held the Crown enjoys an absolute immunity under s.24(1) of the Charter when preparing and drafting primary legislation later found to be unconstitutional, but damages may only be available under s.24(1) for harms flowing from “clearly unconstitutional” enactments of a law.
“Because parliamentary privilege enjoys constitutional status, it is not ‘subject to’ the Charter, as are ordinary laws,” he wrote. “It is a well-accepted principle that one part of the Constitution cannot be used to invalidate a provision in another part. Both parliamentary privilege and the Charter constitute components of the Constitution of Canada. Neither one subordinates the other.”
Lex Gill of Trudel Johnston & Lespérance, who represented Power, said the decision is a “major victory for civil liberties, the rule of law and state accountability in Canada.” She said her firm was “incredibly proud to have represented Mr. Power pro bono” and glad he will finally get to have his day in court.
“The reasons confirm that individuals who experience violations of their constitutional rights — particularly in the most egregious cases — are entitled to real and meaningful redress,” she said. “The majority reasons provide important practical guidance for how claimants can make their case and the standard to meet in practice when an individual’s rights are violated as a result of unconstitutional legislation.”
Andrew Lokan of Paliare Roland Rosenberg Rothstein LLP, who represented the intervener Canadian Civil Liberties Association (CCLA), noted the majority agreed with the association’s position that absolute immunity is unwarranted.
“For the person whose rights have been violated, it makes no difference whether the violation was by a government official or by a legislature,” he said. “Effective remedies, including Charter damages, should be available in either case.”
According to Jennifer Bernardo of Baker & McKenzie LLP, who represented the intervener Canadian Constitution Foundation (CCF), the decision “clarifies but does not fundamentally” change the law on state immunity, because the “foundation for the majority’s ruling was the decision in Mackin.”
“While the majority reiterated that the state is not entitled to absolute immunity, it established a high bar for plaintiffs to meet before they're entitled to damages,” she said. “The party seeking damages would need to show that the legislation clearly violated Charter rights when it was enacted, that the state was willfully blind or reckless about the constitutionality of the law when it was passed, or that the state acted in bad faith or abused its power, such as acting dishonestly or with an improper purpose.”
Bernardo said not every situation involving unconstitutional legislation will meet the test, which she said would alleviate concerns about “opening the floodgates” to claims or “chilling effects” on the legislative process. But she also said Justice Rowe raises a legitimate concern about wanting to respect key democratic and constitutional principles, including parliamentary privilege.
“[Justices Jamal and Kasirer] raise the same concern in the opposite direction — that absolute immunity risks subordinating the court’s broad remedial power under section 24(1) of the Charter to a blanket assertion of privilege,” she said. “The majority's high bar, which mirrors the framework we advocated as an intervener, is intended to reconcile the competing interests of holding Parliament accountable for unconstitutional action while respecting parliamentary privilege, the separation of powers and parliamentary sovereignty. As the majority also notes, courts must still respect parliamentary privilege in applying the standard, which they can do by refusing to admit certain types of evidence or scrutinize certain parts of the legislative process.”
And Lokan said the modified test — reinterpreting the previous standard of “clearly wrong” in Mackin as “clearly unconstitutional” and suggesting that negligence will not suffice to meet the test — will likely prove to be quite government-friendly in practice.
“Nevertheless, the possibility of damages may help to keep governments honest and deter any government that is tempted to enact legislation that it knows will likely be struck down by the courts,” he said.
Justice Canada spokesperson Ian McLeod said in an email that the government is reviewing the decision to determine its impact on ongoing litigation and appropriate next steps.
If you have any information, story ideas or news tips for Law360 Canada, please contact Ian Burns at Ian.Burns@lexisnexis.ca or call 905-415-5906.