[This is a guest post by Masoom Sanyal.]
Introduction
Governments often enact laws that are later adjudged as unconstitutional. “Unconstitutional laws” are a fairly routine occurrence in democracies – not necessarily because governments do not have regard for the constitution (sometimes, that too), but because the limits of constitutional permissibility are often determined on the basis of how the court interprets a particular constitutional provision. In any case, it is a truism that states enact unconstitutional laws, which are later struck down by constitutional courts upon judicial review. This may become the cause of a great deal of inconvenience for the citizens. In fact, it may sometimes result in actual financial loss in some cases to certain citizens. Therefore, the question is: can a citizen be entitled to damages if the state enacts legislation that is later declared void? In other words, can the state be made liable to pay damages to citizens for enacting unconstitutional legislation? The Canadian Supreme Court in Attorney General of Canada v. Power (unwittingly, but appropriately, shortened as ‘Canada v. Power’) has answered this question in the affirmative and explained in what situations can the state be held liable for damages.
Brief Factual Background of Power
Mr Power was convicted of two indictable offenses in 1996. Accordingly, he was sentenced and he served his time. After he was released, he applied for a record suspension (formerly called “pardon”). Obtaining the record suspension would have allowed Power to keep his job. However, before he applied for the record suspension, the legislative regime had changed to exclude the offence for which Power was convicted from being considered for record suspension. The amendment was also made applicable retroactively – meaning that it would apply even to those like Power who had committed crime in the past but were seeking record suspension now. Consequently, he lost his job and future employment prospects as well. These provisions were later declared unconstitutional.
Mr Power brought an action against the government alleging mala fide (bad faith) and abuse of power by the Government. Mr Power sought nothing less than damages from the government for violating his fundamental rights. He based this claim in Section 24(1) of Canadian Charter of Rights and Freedoms which reads: “Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate or just in the circumstances.” (emphasis supplied)
In response, the Government (represented by the Attorney General) raised two important questions dealing with Crown Immunity and liability of the government to pay damages for enactment of unconstitutional legislations. The questions were first raised before the Court of Queen’s Bench (‘CQB’), then before Court of Appeals (‘COA’), and finally before the Supreme Court (‘SC’). All courts uniformly answered that the Crown does not enjoy absolute immunity for its actions. However, here, I will limit my analysis to the judgement of the Apex Court.
Issues before the Court
The specific questions raised before the court (first before the CQB, then before the COA, and finally before the SC) by the Attorney General were as follows:
- Whether the Crown, in its executive capacity, be held liable in damages for government officials and Ministers preparing and drafting a proposed Bill that was later enacted by Parliament, and subsequently declared invalid by a court?
- Whether the Crown, in its executive capacity, be held liable for Parliament enacting a Bill into law, which was later declared invalid by a court?
The questions appear repetitive in nature because they are so. The Supreme Court, therefore, reformulated these questions into a single overarching one: can damages ever be an appropriate and just remedy under S 24(1) of the Charter for the enactment of the legislation later declared unconstitutional?
Reasoning of the Court: The Majority Judgement
Chief Justice Wagner and Justice Karakatsanis wrote the opinion of the majority, with concurrence from Justices Martin, O’Bonsawin and Moreau. The majority answered both the questions in the affirmative. The Majority first held that the CQB was right in holding, based on the precedent in Mackin v. New Brunswick (‘Mackin’), that the Crown does not enjoy an absolute immunity in all circumstances. Then, it reiterated that the remedies under Section 52 and Section 24(1) are distinct and not mutually exclusive. Section 52 provides for the supremacy of the Constitution and it is the “first and most important remedy” in the face of an unconstitutional legislation; per contra, S 24 allows a “personal or individual” remedy, specific to the petitioner’s rights, that court considers appropriate and just. One of the arguments levelled before the Court by the Attorney General was that in presence of the alternate remedy available under Section 52, the petitioner could not avail the remedy under S 24. The Attorney General argued that the existence of an alternative remedy under S 52 would always render damages inappropriate and unjust (Para 44). By clarifying that the remedies under the two sections are not mutually exclusive and distinct in nature, the Court debunked this argument. The Court noted that while there is a “general presumption” against combining remedies under S 52 and S 24, there is no categorical restriction to that effect.
The Court then analyzed in what situations can compensation or damages be awarded as a remedy. For this, it reiterated the Four-Step Test laid down in Vancouver (City) v. Ward. To determine whether damages are appropriate and just remedy, the Court in Ward laid down the following test:
- Breach: Has the Charter of Rights been breached?
- Functional Justification: Would damages fulfill one or more of the related functions of compensation, vindication of the right, or deterrence from future breaches?
- Countervailing Factors: Has the state demonstrated that countervailing factors defeat the functional considerations that support a damage award and render damages inappropriate or unjust?
- Quantum: What is the appropriate quantum of damages?
Arguing for existence of countervailing factors (as required by Step 3 of the Ward Test), the Attorney General submitted, as noted earlier, that existence of an alternative remedy under S 52 made damages under S 24 inappropriate and unjust. Secondly, the AG argued, that a practice of awarding damages for breach of Charter would result into interference with parliament’s law-making functions and impede the state’s ability to govern effectively. It would have a “chilling effect” on the functions of governance. The Majority turned this argument on its head and noted that, in fact, awarding damages for breach of Charter would promote good governance by encouraging constitutional compliance and deterring breach of Charter.
Further, the Court explained that, according to the precedent in Mackin, three conditions were required to be satisfied for award of damages. First, the State must enact an unconstitutional legislation. Secondly, it must be established that the State had acted in bad faith or abused its power; in other words, the State must act with “wilful blindness with respect to its constitutional obligation,” or enact the law with the “knowledge of its unconstitutionality” or “for an ulterior motive” (Para 64). Thirdly, this threshold must be met before damages could be awarded. Therefore, every unconstitutional legislation does not ipso facto warrant damages. The Court also refused to overrule Mackin or to dilute the Mackin precedent, arguing that it best reconciles the competing principles of parliamentary sovereignty, separation of powers and parliamentary privilege on one side, and the principles of constitutionalism and rule of law on the other side.
Here, a curious and necessarily difficult question arises. In a democracy, the lawmaking is the function of parliament, which is a body of individuals. Therefore, it becomes a challenging task to ascribe bad faith or mala fide to a body that is made up of such numerous and diverse set of individuals. To this, the Majority responds emphatically that although the Charter damages lie against the State, the state acts through the vehicle of individual actors. It notes, “[a]s with other contexts of institutional state conduct, whether it is possible to attribute the bad faith or abuse of power of an individual or group to the institution itself will depend on the facts of a given case.” It further clarifies that the intent of this enquiry is not to breach parliamentary privilege or establish individual liability, but merely to establish whether the unconstitutional legislation was passed in bad faith, with knowledge of unconstitutionality, or in a manner of abuse of power, as is required by the Mackin test for awarding damages as remedy (Para 110)
Conclusion
The Court has laid down an important milestone in Power by reiterating that the state can be held liable in damages for enacting an unconstitutional legislation. As the Court has rightly observed, contrary to the fear of it having a “chilling effect” on the lawmaking process, this jurisprudence would disincentivize unconstitutional legislations and ensure higher constitutional compliance and responsible governance. Further, the Mackin threshold is sufficiently high to prevent a downpour of claims for damages. It is time that more constitutional courts accept and apply the Mackin tests, across jurisdiction, in order to prevent what has been an emerging phenomenon and has been termed ‘autocratic legalism.’ A case may be made for the application of this jurisprudence in India – which may be nested, in the absence of a provision akin to Section 24 of the Canadian Charter of Rights and Freedoms, in Article 142 of the Indian Constitution.
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