A Heap of Trouble

It’s just one decision, and in all likelihood a legally correct one at that ― and yet, precisely because it is likely correct, it illustrates any number of things that are wrong in Canadian law: Thibault c. Da Costa, 2014 QCCA 2437. The case arose out of disciplinary proceedings instituted by the syndic of the Chambre de la sécurité financière, a self-regulation body for Québec’s financial advisers, against the respondent, who at the time was one of its members. The disciplinary committee of the Chambre, which heard them in the first instance, found that the respondent had “swindled” [15; translation mine here and throughout] eight of his clients, and convicted him on 27 counts, imposing fines.

The issue was that the amount of the fines on some of these counts was greater than the maximum authorized by law at the time the respondent committed his offences ― but between the time he committed them and the time the Committee issued its decision, both the minimum and the maximum fines authorized had been substantially increased. The Court of Québec, on appeal, reduced the amounts, concluding that the Committee had applied the new rules retroactively. The syndic appealed and, in a decision written by Justice Thibault, the Court of Appeal restored the Committee’s decision.

The first issue for the Court was the standard of review. Justice Thibault concluded that “although the question at issue concerns a general principle of law,” [26] namely the applicability of a non-retroactivity, as a principle of statutory interpretation, to the amounts of fines which can be imposed by the Committee, the Committee’s decision was entitled to deference. The matter concerned the interpretation of the statute the Committee is entrusted with applying, and “is also related to the efficiency of discipline of the members of the Chambre.” [27]

Here’s the first problem this case illustrates. In 1610, in Dr. Bonham’s Case, Chief Justice Coke was troubled by a professional disciplinary body empowered to be accuser and judge in cases of alleged malpractice. In 2015, few Canadian lawyers are so troubled (and why would they be, since their own professional bodies benefit from the same privilege?), and instead we choose to defer to such bodies’ decisions. But I, for one, find this disturbing. There might be a case for deference, perhaps even on questions of law, to impartial administrative adjudicators ― labour arbitrators come to mind. But the Supreme Court’s one-size-fits-all approach to deference makes no distinction between their decisions and those of disciplinary bodies which violate Chief Justice Coke’s injunction that nemo debet esse judex in propria causa. (In fairness, pursuant to the Chambre’s enabling statute, the Committee is presided by a lawyer who is independent of the Chambre, and who in turn appoints lawyers one of whom must preside every panel of the Committee. However, if I understand the statute correctly the two other member of the panels are chosen from among the Chambre’s members.)

Then again, in this case at least, none of this really matters. Si vous chassez le naturel, il revient au galop. After concluding that reasonableness is the applicable standard of review, and in contrast to her brief reasons on the amounts of fines imposed, Justice Thibault exhibits no sign not only of deferring to, but even of considering the Committee’s decision on the issue of retroactivity. Perhaps because there really isn’t much to defer to ― all that the Committee had to say on this subject was that it “consider[ed] the increase of fines … to be effective immediately.”

Turning to the substantive question of whether the committee could, in fact, apply the increased fines to acts committed before the increase, following a rather abstruse discussion of the distinction between retroactivity and retrospectivity, which I will not summarize (for those interested, Karim Renno, has posted the relevant excerpts over at À bon droit; those looking for a theoretical perspective can do worse than starting with Jeremy Waldron’s article called “Retroactive Law: How Dodgy Was Duynhoven“), Justice Thibault concludes that a sanction can be increased “retrospectively,” i.e. after the facts to which it is applied have occurred, so long as its purpose is not punishment but the protection of the public. Having examined the relevant precedents, Justice Thibault finds that the fines that can be assessed by the Committee, like most other sanctions imposed by disciplinary bodies, are indeed concerned with protecting the public, and do not carry the “true penal consequences” that would make them into punishments. The fact that these fines are based, in part, on the prejudice caused does not overcome the overall protective purpose of the Chambre’s enabling statute:

The more the actions committed are prejudicial to the public, the more the sanction must be important in order to guarantee its deterrent effect on the individual subject to the fine or on the other members of the profession. [38]

The fine thus aims at both specific and general deterrence, but it is not punitive ― on preventive and disciplinary.

Once again, Justice Thibault’s conclusion makes perfect sense in light of the precedents she cites (some of which found that fines of up to a million dollars per offence were not punishment, and thus could be imposed retrospectively) ― and that’s precisely the problem. Does it really make sense to say that a fine is not a punishment? A prohibition on exercising a profession in the future might be described as preventive more than punitive, though I’m not even sure about that, but a fine? At least a part of the trouble here might be, as in the standard of review issue, that courts too easily accept the specious claims professional organizations, and governments which choose to delegate their regulatory powers to them, make about their role. But there is something else going on as well.

Canadian courts are, in my view, much too comfortable with retroactive application of the law. Although retroactivity might be a good thing in a few cases, one of which I described here, it is generally disturbing. Applying a different law than that which was in force at the time the actions to which is being applied were committed is unfair. It undermines the law’s role as a guide to behaviour, and may end up, as prof. Waldron explains in the above-mentioned article, discrediting the law as a whole. Yet Canadian courts tend to turn a blind eye to these concerns. The Supreme Court, for instance, has allowed legislatures to make a tort out of commercial behaviour that was perfectly lawful when it occurred. In comparison, mere “retrospectivity,” a change to the extent of the sanction attached to an action after that action is committed, as was done here, seems pretty innocent.

This is probably a trite thing to say, but the law should be mindful of the context in which it operates, of the realities to which it applies, and of the consequences which it dictates. When it doesn’t, it risks ending up in a heap of trouble. The Court of Appeal’s ruling ― legally correct, but oblivious to the real nature of the body whose decision it reviews and of the sanction which it upholds ― illustrates this sad truth.

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