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Legal Notes: Crime and punishment in the construction industry

John Bleasby
Legal Notes: Crime and punishment in the construction industry

Retributive justice infers that an offender who breaks the law should suffer in return. At the same time, the response to a crime should be proportional to the offense. When the punishment is deemed excessive, Section 12 the Canadian Charter of Rights and Freedoms can apply. It’s called, “Cruel and Unusual Punishment.”

Some crimes have minimum fines and even surcharges. However, in a case summary of R v Boudreault, 2018 SCC 58 published by Robichaud Law, “sentencing is an individualized exercise which balances various goals, while taking into account the particular circumstances of the offender as well as the nature and number of his or her crimes. The crucial issue is whether the offenders are able to pay.”

Normally, protection under Section 12 of the charter is reserved for individuals sentenced under the Criminal Code, not corporate entities. The question is: Can a company also claim cruel and unusual punishment when issued minimum fines and penalties?

Not according to a November 2020 Supreme Court of Canada decision.

The case in question concerned a Quebec construction services company which accidently invoiced clients from an unlicensed entity rather than, “a related and co-owned entity that had the appropriate licenses to perform construction services.”

It was an honest mistake. However, the minimum penalty under Quebec law was deemed to apply nevertheless.

“The court decided that the constitutional protection against being subject to cruel and unusual punishment provided under section 12 of the Canadian Charter of Rights and Freedoms does not apply to corporations,” write Ranjan Agarwal, Radha Curpen, Brad Gilmour, Sharon Singh and Greg Whiteside of Bennett Jones LLP. They point out that as a result of that decision, “there is no constitutional protection against large and potentially disproportionate fines for corporate offenders.”

At the same time, the state cannot, “systematically inflict excessive and disproportionate treatment or punishment on corporations,” write Léon MoubayedGuillaume Charlebois and Sarah Gorguos of Davies Ward Phillips and Vineberg. “Corporations can still challenge a punishment that does not abide by the sentencing principles prescribed by the Criminal Code – unless they are ordered to pay a mandatory minimum fine.”

Move ahead to 2021 to a similar case also in Quebec, a project management and interior design company operated by Raynald Bédard and his wife was convicted of operating without a license and fined the minimum $10,481.

As described by Moubayed, Guy Du Pont and Charlebois, a justice of the peace ruled that Bédard, “had acted in good faith, declared his work, paid his taxes and, since committing the offence, obtained a valid license.”

She ruled the fine was disproportionate to the crime and constituted cruel and unusual punishment.

However, the Supreme Court of Quebec overturned that ruling and reimposed the minimum fine. The case went to the Court of Appeal for Quebec (CAQ).

“The CAQ first stated that a punishment is not unconstitutional unless, in light of all the circumstances and relevant factors, it is ‘so excessive as to outrage standards of decency’ and ‘abhorrent or intolerable’ to society,” write the Davies authors. “It concluded that the minimum fine of $10,481 did not meet that threshold and was therefore constitutionally valid.”

The CAQ rejected any application of the Boudreault case, cited earlier and above, as being out of context, and held that, “the offence committed by the appellant was not inconsequential, as the obligation to hold a license to act as a building contractor was one of the fundamental aspects of the act,” write the Davies team.

The case was subject to an application for leave for appeal with the Supreme Court of Canada. The application was rejected on Sept. 23.

“Minor contraventions can lead to significant fines,” the Bennett Jones authors conclude. “The charter will continue to be of limited use in its application to quasi-criminal and regulatory prosecutions.”

In other words, corporate identities and directors should not rely on charter protection using an argument of cruel and unusual punishment.

John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments and Legal Notes column ideas to editor@dailycommercialnews.com

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