Hinse v. Canada (Attorney General), 2015 SCC 35 (Crown liability — Wrongful conviction — Punitive damages)

On appeal from a judgment of the Quebec Court of Appeal (2013 QCCA 1513), setting aside a decision of Poulin J. (2011 QCCS 1780).

In 1964, H was unjustly sentenced to 15 years’ imprisonment for armed robbery. He was granted parole after serving a third of his sentence. In 1966, he had persuaded three of the five perpetrators of the robbery to sign affidavits to clear his name. Between 1967 and 1981, H submitted three applications for mercy to the federal Minister of Justice (“Minister”) under the Criminal Code and an application for a pardon to the Governor General in Council. They were all denied. In 1988, he applied to the Commission de police du Québec, which, following an investigation, said that it hoped the Attorney General of Quebec (“AGQ”) would intervene with the Solicitor General of Canada so that justice would be done. In 1990, H submitted a fourth application for mercy, but the Minister replied that he should seek relief in the Quebec Court of Appeal, which he did. The Court of Appeal allowed the appeal, but instead of entering an acquittal or ordering a new trial, it directed a stay of proceedings. On January 21, 1997, the Supreme Court of Canada unanimously acquitted H in a judgment delivered from the bench, as it was of the view that the evidence could not allow a reasonable and properly instructed jury to find H guilty beyond a reasonable doubt. H then instituted an action in civil liability for an order for solidary payment against the AGQ, the Attorney General of Canada (“AGC”) and the town of Mont‑Laurier. Under out‑of‑court settlements, the town and the AGQ paid him a total of $5,550,000 in compensation. After these settlements, H continued to claim $1,079,871 for his pecuniary losses and $1,900,000 for his non‑pecuniary losses, as well as $10,000,000 in punitive damages, from the AGC.

The Superior Court allowed the action and ordered the AGC to pay H a total of almost $5.8 million. It found, pursuant to the Crown Liability and Proceedings Act, that the Minister was subject to Quebec’s rules of civil liability, that he was not protected by any immunity, that he had committed a fault of “institutional inertia” or “institutional indifference”, and that a sustained, concerted and extensive review would have uncovered the errors. It ordered the AGC to pay H more than $850,000 for pecuniary damage and $1,900,000 for non‑pecuniary damage, as well as $2,500,000 in punitive damages. It also found that the AGC’s conduct at trial had amounted to an abuse of process and ordered him to pay $100,000 for fees H had paid to the first law firm that had represented him, as well as $440,000 for the value of the services rendered by the second even though that firm had never billed him for fees, as they had entered into a pro bono agreement.

The Court of Appeal reversed the judgment. It found that the exercise of the Minister’s power of mercy is protected by a qualified immunity and that the Crown can be held liable only if the decision was made in bad faith, and with malice. In this case, the court found that it had not been proven that the Minister had committed a fault and that, even if it were assumed that a fault had been committed, there was nothing to suggest that the miscarriage of justice would have been ascertained quickly if the Minister had acted promptly.

Held (8:0): The appeal should be dismissed.

The power of mercy codified in the Criminal Code derives from the royal prerogative of mercy. At the material time, the applicable provisions of the Criminal Code left it up to the Minister to determine in what circumstances he or she should intervene. In making this discretionary decision, the Minister had to assess and weigh public policy considerations on the basis of social, political and economic factors. This power came into play after all judicial remedies had been exhausted, and the Minister, in exercising it, had to be careful to avoid usurping the role of the courts and short‑circuiting the usual judicial process. The history and the nature of the power of mercy show that the exercise of that power was a true core policy act. The exercise of such a power could not therefore expose the Crown to liability unless the Minister acted irrationally or in bad faith.

To assess the Minister’s conduct in the exercise of his power of mercy, it would be inappropriate to apply a standard of fault that limits bad faith to malice. In Quebec civil law, bad faith is broader than just intentional fault or a demonstrated intent to harm another. Bad faith can be established by proving that the Minister acted deliberately with the specific intent to harm another person, or by proof of serious recklessness that reveals a breakdown of the orderly exercise of authority so fundamental that absence of good faith can be deduced and bad faith presumed. In light of the applicable provisions of the Criminal Code and of the fact that there was, at the relevant time, no established procedure to guide the exercise of the power of mercy, the Minister was required to conduct a meaningful review of any application that was neither frivolous nor vexatious. However, this review was not equivalent to the one that would be expected from a police investigation or a commission of inquiry. The duty to conduct a meaningful review entails a duty to make a decision in good faith on the basis of the evidence uncovered by that review.

The trial judge erred in approaching the issue of the federal Crown’s civil liability from the perspective of a fault of institutional inertia or indifference. The analysis should instead have focused on the individual conduct of each Minister acting in his or her capacity as a servant of the federal Crown. The trial judge also erred in considering the powers of a commissioner under the Inquiries Act as a basis for determining whether the review conducted by the Minister was a meaningful one, given that those powers were not conferred on the Minister until 2002, when Parliament reformed the procedure in respect of applications for mercy. Moreover, there is no legislation establishing an obligation for the federal government or the provinces to compensate victims of miscarriages of justice, nor is there any legislation establishing a right to such compensation. Nor did the Guidelines: Compensation for Wrongfully Convicted and Imprisoned Persons require the federal government to compensate H, as they do not constitute binding legislation.

In this case, H has failed to prove, on a balance of probabilities, that the Minister acted in bad faith or with serious recklessness in reviewing his applications for mercy. The documentary evidence negates the trial judge’s inference that there was no review whatsoever of H’s initial application for mercy. Although there are only a few documents in the record, they attest to the fact that a certain review was conducted and that certain actions were taken in this regard. By way of admissions, the parties acknowledged that certain government employees would have confirmed that, as they had understood the facts, an extensive and careful review of the case was under way at the time in question. A delay in reviewing the initial application was raised, but despite this, an analysis of the circumstances does not support the conclusion that the Minister acted in bad faith or with serious recklessness. As for H’s three subsequent applications, it cannot reasonably be argued that no meaningful review was conducted in respect of them. The relevant correspondence shows the opposite to be true. Regarding the second application, which was very brief and contained no new evidence or legal arguments, it was open to the Minister to find it frivolous and to reject it on that basis. As for the third application, given that it did not go into much detail, the allegations based on vague irregularities could have struck the Minister as being of little consequence. In the case of the fourth application, it was reasonable for the Minister to justify her decision by noting that the Court of Appeal could consider the case on its own without her having to intervene, particularly given that the Minister did not reject the application outright.

Some additional comments on causation and damages are in order. Even if it were assumed that the Minister failed to conduct a meaningful review of the first application, the evidence does not establish that he would probably have discovered at that time the key evidence uncovered by the investigator of the Commission de police 20 years later. To conclude otherwise would be to rely on mere conjecture or remote hypotheticals. H has failed to establish a causal connection between the Minister’s fault and the alleged damage.

On the issue of damages, the trial judge failed to take into account the requirement that the liability be apportioned solidarily, and to establish the amounts being awarded on the basis of the actual liability of each of the solidary debtors. To the extent that more than one solidary debtor could be liable for heads of claim, the releases granted by H to the AGQ and the town of Mont-Laurier made it necessary to examine the causal faults and apportion liability. H should have borne the shares of the solidary debtors he had released (arts. 1526 and 1690 C.C.Q.). In addition to this overriding error, the grounds for each of the heads of damages were also flawed. Where the question of pecuniary damage is concerned, there is no direct connection between the Minister’s conduct and H’s decision to retire at age 60, the fees and costs incurred in respect of the proceedings brought in the Court of Appeal and the Supreme Court between 1990 and 1997 did not result from the alleged faults, and wasted time and efforts expended to obtain justice are inconveniences that are inherent in the efforts of anyone who is involved in legal proceedings. As for non-pecuniary damage, an order that the AGC pay $1,900,000 after the AGQ had paid $1,100,000 under the same head of damages would seem to be disproportionate, and the amounts granted in other cases of miscarriages of justice were mostly made further to the recommendations of advisory bodies and were based on considerations that are different from those on which damages are based in principle. Moreover, those cases were different in that they involved the much more serious crime of murder and in that the period of incarceration was longer in almost all of them. On the issue of punitive damages, even though the reference in the Crown Liability and Proceedings Act to the Quebec rules of extracontractual civil liability encompasses the remedy of punitive damages provided for in the Charter of human rights and freedoms, it was not appropriate to award such damages in this case. Given that the Minister’s conduct cannot be equated with bad faith or serious recklessness, it cannot be concluded that there was intentional interference with a right protected by the Charter. The evidence does not support a finding that the Minister’s state of mind was such that he intended to harm H or had knowledge of the adverse consequences his conduct would have for H.

In Quebec law, it is only in exceptional cases that a party can be required to pay the fees of lawyers retained by the opposing party, and such compensation must be consistent with the general rules of civil liability. Only an abuse of process can justify awarding extrajudicial fees as damages. However, by virtue of art. 1608 C.C.Q., the obligation to pay damages to the other party is neither reduced nor altered by the fact that the latter received a gratuitous benefit from his or her counsel. In this case, the AGC’s conduct did not amount to an abuse of process. The law on the federal Crown’s liability for a fault committed by the Minister in exercising his or her power of mercy was far from clear at the time of the dispute, and it was reasonable and appropriate for the AGC to contest H’s action and raise the defence that he did. The trial judge committed a palpable and overriding error in finding that there had been an abuse of process in the context of this case. H was not entitled to the extrajudicial fees that were awarded.

Reasons for judgment by Wagner and Gascon JJ.

Neutral Citation 2015 SCC 35. Docket No. 35613.