Authorson v. Canada (Attorney General), 2003 SCC 39, [2003] 2 SCR 40

Authorson v. Canada (Attorney General), [2003] 2 S.C.R. 40, 2003 SCC 39

Attorney General of Canada                                                                           Appellant

v.

Joseph Patrick Authorson, deceased, by his Litigation

Administrator, Peter Mountney, and by his Litigation

Guardian, Lenore Majoros                                                                           Respondent

Indexed as:  Authorson v. Canada (Attorney General)

Neutral citation:  2003 SCC 39.

File No.:  29207.

2003:  April 10:  2003:  July 17.

Present:  McLachlin C.J. and Gonthier, Major, Bastarache, Binnie, Arbour and

LeBel JJ.

on appeal from the court of appeal for ontario

Civil rights — Due process rights respecting property — Expropriation without compensation — Veterans’ pension and allowances — Government administering pensions and other benefits for war veterans and failing to invest funds or pay interest — Legislation barring claim to interest for the period prior to 1990 — Whether due process protections of Canadian Bill of Rights guard against expropriation of property by passage of valid legislation — Canadian Bill of Rights, S.C. 1960, c. 44, ss. 1 (a), 2 (e) — Department of Veterans Affairs Act, R.S.C. 1985, c. V‑1, s. 5.1(4) .

The  respondent was named representative plaintiff of a class of disabled veterans who received pensions and other benefits from the Crown under three different statutes.  These funds were administered by the Department of Veterans Affairs (“DVA”) because the veterans were deemed incapable of managing their money.  These funds were rarely invested or credited with interest until 1990, when the DVA began paying interest on the accounts.  But Parliament chose to limit the Crown’s liability for past interest by enacting s. 5.1(4)  of the Department of Veterans Affairs Act  which provides that no claim shall be made after the coming into force of the provision for or on account of interest on moneys held or administered by the Minister during any period prior to January 1, 1990 pursuant to any of the three relevant statutes.  The class sued the Crown, alleging breach of fiduciary duty and claiming that the s. 5.1(4)  bar was inoperative under the Canadian Bill of Rights, because it was inconsistent with the right not to be deprived of the enjoyment of property except by due process of law (s. 1(a)) and the right to a fair hearing in accordance with the principles of fundamental justice for the determination of one’s rights and obligations (s. 2(e)).  The Ontario Superior Court of Justice held that the Crown owed a fiduciary duty to the disabled veterans, and so was obliged to either invest the funds on their behalf, or pay interest, and that s. 5.1(4) of the Act was inoperative under the Bill of Rights.  The Court of Appeal upheld the decision.

Held:  The appeal should be allowed.

Where federal legislation conflicts with the protections of the Bill of Rights, unless the conflicting legislation expressly declares that it operates notwithstanding the Bill of Rights, the Bill of Rights applies and the legislation is inoperative.  The Bill of Rights protects only rights that existed in 1960, prior to its passage.

Section 5.1(4) of the Act is not inconsistent with either s. 1(a) or s. 2(e) of the Bill of Rights and the veterans were lawfully denied interest on their pension and other benefits.  The due process protections in s. 1(a) of the Bill of Rights do not require that the veterans receive notice and a hearing before Parliament prior to the passage of expropriative legislation.  Long‑standing parliamentary tradition has never required that procedure, and due process protections cannot interfere with the right of the legislative branch to determine its own procedure.  Such a power to interfere would effectively amend the Canadian Constitution.  Further, although due process protections of property in the Bill of Rights do confer certain rights to notice and an opportunity to make submissions in the adjudication of individual rights and obligations, no such rights are at issue in this case.  No adjudicative procedure is necessary for the nondiscretionary application of a law to incontestable facts.  Lastly, while substantive rights may stem from due process, the Bill of Rights does not protect against the expropriation of property by the passage of unambiguous legislation. Parliament has the right to expropriate property, even without compensation, if it has made its intention clear and, in s. 5.1(4), Parliament’s expropriative intent is clear and unambiguous.

Section 2(e) of the Bill of Rights applies only to guarantee the fundamental justice of proceedings before any tribunal or administrative body that determine individual rights and obligations.  It does not impose on Parliament the duty to provide a hearing before the enactment of legislation.

Cases Cited

Referred to:  R. v. Drybones, [1970] S.C.R. 282; Miller v. The Queen, [1977] 2 S.C.R. 680; R. v. Burnshine, [1975] 1 S.C.R. 693; Reference re Resolution to Amend the Constitution, [1981] 1 S.C.R. 753; Wells v. Newfoundland, [1999] 3 S.C.R. 199; Lapointe v. Association de Bienfaisance et de Retraite de la Police de Montréal, [1906] A.C. 535; Lochner v. New York, 198 U.S. 45 (1905); Curr v. The Queen, [1972] S.C.R. 889; Re B.C. Motor Vehicle Act, [1985] 2 S.C.R. 486; Florence Mining Co. v. Cobalt Lake Mining Co. (1909), 18 O.L.R. 275; Manitoba Fisheries Ltd. v. The Queen, [1979] 1 S.C.R. 101.

Statutes and Regulations Cited

An Act to amend the statute law in relation to war veterans, S.C. 1990, c. 43, s. 64(2).

Canadian Bill of Rights , S.C. 1960, c. 44  [reproduced in R.S.C. 1985, App. III], ss. 1(a), 2(e), 5.

Canadian Charter of Rights and Freedoms .

Constitution Act, 1867 , preamble.

Department of Veterans Affairs Act , R.S.C. 1985, c. V‑1 , ss. 5 (d), 5.1(4)  [ad. 1990, c. 43, s. 2].

Financial Administration Act , R.S.C. 1985, c. F‑11 , s. 21(2) .

Pension Act , R.S.C. 1985, c. P‑6 , s. 41(1) .

War Veterans Allowance Act , R.S.C. 1985, c. W‑3 , s. 15 .

Authors Cited

Grand Robert de la langue française, 2^e éd.  Paris:  Le Robert, 2001, “cause”.

Hogg, Peter W.  Constitutional Law of Canada, 4th ed.  Scarborough, Ont.:  Carswell, 1997.

APPEAL from a judgment of the Ontario Court of Appeal (2002), 157 O.A.C. 278, 58 O.R. (3d) 417, 215 D.L.R. (4th) 496, 92 C.R.R. (2d) 224, 33 C.C.P.B. 1, [2002] O.J.  No. 962 (QL), affirming a judgment of the Superior Court of Justice (2000), 53 O.R. (3d) 221, 84 C.R.R. (2d) 211, [2000] O.J. No. 3768 (QL).  Appeal allowed.

Graham R. Garton, Q.C., John C. Spencer and Yvonne Milosevic, for the appellant.

Raymond G. Colautti, David G. Greenaway and Peter Sengbusch, for the respondent.

The judgment of the Court was delivered by

1                                   Major J. — The deceased respondent, Authorson, a disabled veteran of World War II, was the representative of a large class of disabled veterans of Canada’s military forces.  He died in 2002, but the action continues to be prosecuted by his litigation administrator and guardian. 

2                                   This litigation raises difficult questions.  The government of Canada, through the appellant, the Attorney General of Canada, agrees that throughout the relevant time it acted as a fiduciary for each of the veterans, that the funds owed the veterans and administered by the government were rarely credited with interest, and that a full accounting was never made to the respondent.

3                                   It is not in dispute that the respondent is owed interest, and that this omission continued until legislation changing government practice was enacted in 1990.  The appellant, while agreeing that the respondent is owed money, argues that Parliament has, by enacting legislation to that effect, made the debt unenforceable.

4                                   The respondent submits that the Canadian Bill of Rights , S.C. 1960, c. 44  (reproduced in R.S.C. 1985, App. III) (the “Bill of Rights”), ensures him due process in the expropriation of his property.  The appellant’s position is that the expropriative legislation was a valid exercise of its legislative power, and that no remedy exists. 

5                                   Do the due process protections of the Bill of Rights guard against the expropriation of property by passage of valid legislation?  Although s. 1(a) of the Bill of Rights confers certain procedural protections — and may also confer certain substantive protections — I have concluded the answer is no.

6                                   The Bill of Rights allows the deprivation of the enjoyment of property only through due process of law.  At issue in this appeal is the validity of a federal statute that purportedly extinguished the claims of disabled veterans to interest on their governmentally administered pensions.

7                                   The facts of this appeal are not at issue.  Joseph Authorson and thousands of veterans received pension and other benefits from the Crown for decades.  The Department of Veterans Affairs (the “DVA”) would often administer the funds on behalf of those who were deemed incapable of managing their money.  However, these accounts were not credited with interest.  The subject of this appeal is the Crown’s liability for that interest.

8                                   The Crown no longer denies that it had a fiduciary duty to the veterans to pay interest on those accounts.  However, the Crown claims that it is not liable for its breach of trust because federal legislation, the Department of Veterans Affairs Act , R.S.C. 1985, c. V-1, s. 5.1(4) , bars claims for interest before 1990 on veterans’ accounts.  Both parties agree that if this section is operative, the Crown has no liability for the accounting of and  for payment of the interest.

9                                   The respondent’s hope of success depends on being able to obtain the protection of the Bill of Rights, which provides for due process against loss by expropriation of property.  It is uncontested that the veterans’ claims for interest are property.  By contrast, the Canadian Charter of Rights and Freedoms  does not contain any similar provision.

10                               The Bill of Rights is a federal statute that renders inoperative federal legislation inconsistent with its protections.  It protects rights that existed when the Bill of Rights  was enacted, in 1960.  If Parliament wishes to circumvent the protections of the Bill of Rights, it must do so explicitly by stating that the legislation in question operates notwithstanding the Bill of Rights.  In legislating the bar against claims for interest,  Parliament did not explicitly enact this “notwithstanding” clause.  As a result, the issue in this appeal is whether the due process rights respecting property that existed in 1960 and were entrenched by the Bill of Rights permit the Crown to deny its liability for the missing interest based on validly enacted legislation.

11                               What protections for property are provided by due process?

12                               Due process does not require that the veterans receive notice and a hearing before Parliament prior to the passage of expropriative legislation.  As unfortunate as it is for the respondent, long-standing parliamentary tradition has never required that procedure.

13                               Does due process in this case require an individual hearing before a tribunal?  If the effect of legislation requires a hearing or adjudication then that must conform to Canadian jurisprudence demanding a fair hearing.  But that is not what was legislated.  Here, there is no dispute that if the law is operative, the veterans’ rights to damages for the lost interest are extinguished.

14                               Does the Bill of Rights require that Parliament give just compensation to the veterans?  The governmental expropriation of property without compensation is discouraged by our common law tradition, but it is allowed when Parliament uses clear and unambiguous language to do so.

15                               The Department of Veterans Affairs Act , s. 5.1(4)  takes a property claim from a vulnerable group, in disregard of the Crown’s fiduciary duty to disabled veterans.  However, that taking is within the power of Parliament.  The appeal has to be allowed.

I.       Facts

A.     The Administration of Disabled Veterans’ Pensions

16                               Since World War I, Canada has recognized an obligation to pay various pensions and financial benefits to its disabled veterans.  This appeal concerns pensions provided under three statutes.  Since 1915, the Pension Act , R.S.C. 1985, c. P-6 , has provided pensions to veterans disabled through service.  Since 1918, the Department of Veterans Affairs Act , has provided money for veterans receiving medical treatment.  And since 1930, the War Veterans Allowance Act , R.S.C. 1985, c. W-3 , has provided income supplements to indigent and/or elderly veterans.

17                               Each of these statutes provides that if the veteran is incapable of managing the funds, an administrator may be designated:  Pension Act , s. 41(1)  (allowing the Minister to designate the DVA, a person, or an agency as administrator); Department of Veterans Affairs Act , s. 5 (d) (empowering the Governor in Council to make regulations for the holding of funds payable to veterans undergoing medical care);  War Veterans Allowance Act , s. 15(1)  and (2)  (allowing the Minister to designate himself, a person, or an agency to administer the funds on behalf of the veteran).  This appeal concerns those moneys of veterans administered by the DVA up until 1990.

18                               When the DVA was named the administrator of a veteran’s benefits, the department would do the following:  the veteran’s cheques were made out to an official in the department and deposited in the government’s general account.  For accounting purposes, the funds were tracked as if they were in a special purpose account held in the name of the veteran.  The administrator made payments on behalf of the veteran.  If the veteran became capable of handling his affairs, he would regain control over the fund.  Occasionally, funds from private sources, such as inheritances, would be deposited into the special purpose account.

19                               The funds in a disabled veteran’s special purpose account would occasionally grow to substantial amounts.  For example, a veteran hospitalized for extended periods might have few expenses to pay, but would continue to accumulate pension moneys.  In the 1970s and 1980s, there were approximately 10,000 such special purpose accounts being administered by the DVA.  Today, due to the passage of time and a shift towards private administrators, there are fewer than 1,000.  Some of these accounts have contained varying sums as high as many thousands of dollars.

20                               Until 1990, these funds were rarely credited with interest.  Various governmental inquiries over the decades discussed this non-payment problem.  In 1990, the DVA began paying interest on these accounts, which it had been authorized to do for decades, pursuant to the Financial Administration Act , R.S.C. 1985, c. F-11, s. 21(2) .  However, Parliament chose to try and limit the Crown’s liability for past interest by enacting s. 5.1(4)  of the Department of Veterans Affairs Act :

5.1 . . .

(4)  No claim shall be made after this subsection comes into force for or on account of interest on moneys held or administered by the Minister during any period prior to January 1, 1990 pursuant to subsection 41(1)  of the Pension Act , subsection 15(2)  of the War Veterans Allowance Act  or any regulations made under section 5 of this Act.

B.     Joseph Authorson

21                               Joseph Authorson, the deceased respondent, was born in Ontario in 1914, and enlisted in the Canadian Armed Forces in 1939.  He was disabled from combat-related mental illness, and was discharged from military service in 1943.  He spent time in various mental hospitals, and was surgically treated with a pre-frontal lobotomy.  He never married or had children.

22                               He received pension and treatment moneys for 40 years.  These were administered by the DVA.  He became competent to manage his funds in 1991, and received $117,916 in pension and treatment allowance funds, and $166,248 in personal funds.  While the DVA had administered the funds, they had not been invested, nor had they accrued interest.

23                               Authorson was named the representative plaintiff of a class of disabled veterans certified in 1999.  The class sued the federal Crown in the Ontario Superior Court of Justice, alleging breach of fiduciary duty.  It sought declaratory relief, an accounting, compensation for the interest lost on the funds and costs.  There was evidence to suggest that the amount of compensatory interest claimed could be as high as $1 billion.

24                               In 2002, Authorson died.  A litigation administrator and a litigation guardian  were appointed to represent the interests of his estate.  

II.     Judicial History

A.     Ontario Superior Court of Justice (2000), 53 O.R. (3d) 221

25                               Brockenshire J., the trial judge, divided the litigation into two separate proceedings.  One action was for interest on funds administered by the DVA.  The other was for principal unpaid when veterans died while their funds were still being administered by the DVA.  Each action had both a liability and a damages phase.  This appeal is limited to the first action assessing the liability of the Crown for interest on the funds.

26                               Brockenshire J. determined that although the funds had been placed in the Crown’s general account, they remained the property of the disabled veterans.  He held that the Crown owed a fiduciary duty to the disabled veterans, and so was obliged to either invest the funds on their behalf, or pay interest.  On appeal, the Crown did not dispute these findings.

27                               The Crown submitted that in spite of those facts, Department of Veterans Affairs Act , s. 5.1(4)  bars any claim for interest before 1990.  Brockenshire J. decided that this provision was inoperative under the Bill of Rights, stating that s. 1(a) guaranteed that any deprivation of the enjoyment of property must occur through due process of law, and that s. 2(e) guaranteed a fair hearing in accordance with the principles of fundamental justice.

B.     Ontario Court of Appeal (2002), 58 O.R. (3d) 417

28                               The Court of Appeal upheld Brockenshire J. and agreed that the Crown had breached a fiduciary duty owed to the disabled veterans by not paying interest on the funds.

29                               The Court of Appeal considered the due process protection of property rights in s. 1(a) of the Bill of Rights, but declined to hold whether the provision conferred substantive protections in addition to procedural protections.  It concluded that passage of the expropriative legislation violated the respondent’s due process rights because he had been denied notice and an opportunity to contest the legislation.  The Court of Appeal also found this a violation of s. 2(e), which provided fair hearing rights.

III.    Statutory Provisions at Issue

30                               Department of Veterans Affairs Act , R.S.C. 1985, c. V-1 , as amended by S.C. 1990, c. 43, s. 2:

5.1 . . .

(4)  No claim shall be made after this subsection comes into force for or on account of interest on moneys held or administered by the Minister during any period prior to January 1, 1990 pursuant to subsection 41(1)  of the Pension Act , subsection 15(2)  of the War Veterans Allowance Act  or any regulations made under section 5 of this Act.

An Act to amend the statute law in relation to war veterans, S.C. 1990, c. 43:

64. . . .

(2) Subsection 5.1(4)  of the Department of Veterans Affairs Act , as enacted by section 2 of this Act, shall be deemed to have come into force on October 12, 1990.

Canadian Bill of Rights , S.C. 1960, c. 44  (reproduced in R.S.C. 1985, App. III):

1.  It is hereby recognized and declared that in Canada there have existed and shall continue to exist without discrimination by reason of race, national origin, colour, religion or sex, the following human rights and fundamental freedoms, namely,

(a)  the right of the individual to life, liberty, security of the person and enjoyment of property, and the right not to be deprived thereof except by due process of law;

                                                                   . . .

2.  Every law of Canada shall, unless it is expressly declared by an Act of the Parliament of Canada that it shall operate notwithstanding the Canadian Bill of Rights, be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgment or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to

                                                                   . . .

(e)  deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations;

IV.    Analysis

A.     Background on the Bill of Rights

31                               It is useful to consider the limited jurisprudential history of the Bill of Rights.  The Bill of Rights is a federal statute, applicable only to federal law.  Although the Bill of Rights remains in force, it has received little judicial notice since its passage in 1960.  This is so in spite of the fact that it has been referred to as quasi-constitutional.

32                               Where federal legislation conflicts with the protections of the Bill of Rights, unless the conflicting legislation expressly declares that it operates notwithstanding the Bill of Rights as required by s. 2, the Bill of Rights applies and the legislation is inoperative; R. v. Drybones, [1970] S.C.R. 282 (the s. 1(b) equality guarantee of the Bill of Rights rendered inoperative a provision of the Indian Act which made it an offence for a status Indian to be intoxicated off a reserve).

33                               Section 1 of the Bill of Rights declares and recognizes various rights, including the due process right to the enjoyment of property that is at issue here.  The Bill of Rights protects only rights that existed in 1960, prior to passage of the Bill of Rights.  See, e.g.,  Miller v. The Queen, [1977] 2 S.C.R. 680, at pp. 703-4 (no absolute right to life existed prior to the Bill of Rights, so a death penalty statute was not inoperative); R. v. Burnshine, [1975] 1 S.C.R. 693, at p. 705 (a right to uniform sentencing across different regions of Canada did not exist prior to 1960, and was therefore not protected by the Bill of Rights).

34                               With the constitutional amendment and the adoption of the Charter  in 1982,  many of the protections of the Bill of Rights gained constitutional status.  The Bill of Rights, however, provides two protections not expressly available in the Charter .  Section 1(a) protects the enjoyment of property, the deprivation of which must occur through the due process of law.  Section 2(e) guarantees a fair hearing in accordance with the principles of fundamental justice for the determination of rights and obligations.  These two provisions are the essence of this appeal.

B.     Section 1(a) of the Canadian Bill of Rights

35                               Section 1(a) of the Bill of Rights recognizes “. . . the right of the individual to life, liberty, security of the person and enjoyment of property, and the right not to be deprived thereof except by due process of law”.

36                               The respondent submitted that s. 5.1(4)  of the Department of Veterans Affairs Act  took away his right to interest on his funds without due process of law.  The question is what process is guaranteed by the Bill of Rights when property rights are extinguished?  The respondent’s argument encompasses three types of due process:

(i)   procedural rights before parliamentary enactment of a law;

(ii) procedural rights before the application of a statute to his individual circumstances; and

(iii) substantive protections against governmental expropriation of his property. 

None of the claims help the respondent.

(1)   Procedural Rights in Legislative Enactment

37                               The respondent claimed a right to notice and hearing to contest the passage of s. 5.1(4)  of the Department of Veterans Affairs Act .  However, in 1960, and today, no such right exists.  Long-standing parliamentary tradition makes it clear that the only procedure due any citizen of Canada is that proposed legislation receive three readings in the Senate and House of Commons and that it receive Royal Assent.  Once that process is completed, legislation within Parliament’s competence is unassailable.

38                               In Reference re Resolution to Amend the Constitution, [1981] 1 S.C.R. 753, at p. 785, it was stated that:

How Houses of Parliament proceed, how a provincial legislative assembly proceeds is in either case a matter of self‑definition, subject to any overriding constitutional or self‑imposed statutory or indoor prescription.  It is unnecessary here to embark on any historical review of the “court” aspect of Parliament and the immunity of its procedures from judicial review.  Courts come into the picture when legislation is enacted and not before (unless references are made to them for their opinion on a bill or a proposed enactment).  It would be incompatible with the self‑regulating — “inherent” is as apt a word — authority of Houses of Parliament to deny their capacity to pass any kind of resolution.  Reference may appropriately be made to art. 9 of the Bill of Rights of 1689, undoubtedly in force as part of the law of Canada, which provides that “Proceedings in Parliament ought not to be impeached or questioned in any Court or Place out of Parliament”.

39                               As well, see Wells v. Newfoundland, [1999] 3 S.C.R. 199, at para. 59:

. . . legislative decision making is not subject to any known duty of fairness.  Legislatures are subject to constitutional requirements for valid law-making, but within their constitutional boundaries, they can do as they see fit.  The wisdom and value of legislative decisions are subject only to review by the electorate.  The judgment in Reference re Canada Assistance Plan . . . was conclusive on this point in stating that:  “the rules governing procedural fairness do not apply to a body exercising purely legislative functions”.

40                               The submission that a court can compel Parliament to change its legislative procedures based on the Bill of Rights must fail.  The Bill of Rights purports to guide the proper interpretation of every “law of Canada”, which s. 5 of the Bill of Rights defines to mean “an Act of the Parliament of Canada enacted before or after the coming into force of this Act” (emphasis added).  Court interference with the legislative process is not an interpretation of an already enacted law.

41                               Due process protections cannot interfere with the right of the legislative branch to determine its own procedure.  For the Bill of Rights to confer such a power would effectively amend the Canadian constitution, which, in the preamble to the Constitution Act, 1867 , enshrines a constitution similar in principle to that of the United Kingdom.  In the United Kingdom, no such pre-legislative procedural rights have existed.  From that, it follows that the Bill of Rights does not authorize such power.

(2)   Procedural Rights in Application of the Law

42                               What procedural protections for property rights are guaranteed by due process?  In my opinion, the Bill of Rights guarantees notice and some opportunity to contest a governmental deprivation of property rights only in the context of an adjudication of that person’s rights and obligations before a court or tribunal. 

43                               In Miller, supra, at p. 704, Ritchie J. held that s. 1(a) of the Bill of Rights conferred procedural protections existing at its enactment in 1960, namely protection against the deprivation of life without a fair trial and conviction by a “properly  instructed jury”.

44                               Similarly, s. 1(a) may be seen as conferring procedural protections against the deprivation of property that existed in 1960.  Certain procedural rights in this regard have long been recognized.  In Lapointe v. Association de Bienfaisance et de Retraite de la Police de Montréal, [1906] A.C. 535, the Privy Council recognized a right to have notice of accusations made and an opportunity to make a defence where the board of directors of a pension board stripped a police officer, who had resigned, of his pension.  Where the law requires the application of discretion or judgment to specific factual situations, notice and an opportunity to contest may be required.  For example, such rights may exist where the government eliminates a veteran’s benefits because it believes he is no longer disabled, or because it believes he was never a member of the armed forces.  However, notice and an opportunity to make a defence are not required where the government legislates to completely eliminate such benefits.

45                               The respondent submitted that the clear, uncontested interpretation of s. 5.1(4)  of the Department of Veterans Affairs Act  is that it is an expropriation of disabled veterans’ interest on DVA-administered pensions, and as such is inoperative.  But no adjudicative procedure is necessary for the non-discretionary application of a law to incontestable facts.  A taxpayer could not claim procedural protections against a change in income tax rates that adversely affected him.

46                               Section 1(a) of the Bill of Rights does guarantee a degree of procedural due process in the application of the law in an individualized, adjudicative setting.  But no such application took place here, and no further procedure was due.

(3)   Substantive Due Process Rights

47                               The respondent claimed a right — based on a broad conception of the rule of law — against the expropriation of property (or against expropriation without just compensation).  Does the due process guarantee of the Bill of Rights confer substantive protections in this regard?

(a)   Substantive Due Process

48                               Canadian courts have been wary of recognizing such protections, in part perhaps because of the American experience with the substantive due process enforcement of property and contract rights.  Professor Hogg has summarized the constitutional crisis that resulted from what many at the time and since felt to be extreme judicial policy making.  The occasion of this historical episode was Lochner v. New York, 198 U.S. 45 (1905) (striking down state legislation setting maximum work hours in New York bakeries on due process grounds).  See P. W. Hogg, Constitutional Law of Canada (4th ed. 1997), at p. 1070:

Between 1905, when Lochner v. New York was decided, and 1937, when the case was overruled, the Supreme Court of the United States protected the liberties of the owners of factories and mines against the efforts of Congress and the state Legislatures to limit hours of work, to require the payment of minimum wages, to impose health and safety standards and to protect union activity.  As Oliver Wendell Holmes pointed out in his brilliant dissenting opinions, the Court used the Constitution to enforce a laissez-faire economic theory that had been rejected by the elected legislators.  The Court had taken sides in a political conflict that was suitable for resolution only by elected legislators.  In 1937, after an exasperated President Roosevelt had proposed his court-packing plan, the Court changed its mind and reversed these decisions.  Since then, the Court has been extremely reluctant to review social and economic regulation, despite its inevitable interferences with the property and contract rights that the Constitution of the United States expressly guarantees.

49                               The experience surrounding the Lochner case might have cast a shadow over the recognition of substantive due process rights in Canadian jurisprudence.  Curr v. The Queen, [1972] S.C.R. 889, asked whether the Bill of Rights s. 1(a) guarantee against deprivation of security of the person except through due process of law protected against a compulsory breath test.  In holding that it did not, Laskin J., at p. 902, suggested “extreme caution” in importing substance into the due process guarantees of the Bill of Rights:

The very large words of s. 1(a), tempered by a phrase (“except by due process of law”) whose original English meaning has been overlaid by American constitutional imperatives, signal extreme caution to me when asked to apply them in negation of substantive legislation validly enacted by a Parliament in which the major role is played by elected representatives of the people.

Laskin J. stated that to read substantive protections into these due process rights would require “compelling reasons” relating to “objective and manageable standards by which a Court should be guided . . .” (pp. 899-900).

50                               In Re B.C. Motor Vehicle Act, [1985] 2 S.C.R. 486, Lamer J. (as he was then) considered s. 7  of the Charter ’s guarantee that liberty be deprived only “in accordance with the principles of fundamental justice”.  Although there had been evidence that “fundamental justice” was to have given only procedural protections, Lamer J. held that fundamental justice could also contain the substantive right not to be imprisoned for an absolute liability offence.  Although this Court has not yet recognized substantive rights stemming from due process, Re B.C. Motor Vehicle Act indicates its willingness to recognize that, in the proper circumstances, guarantees of process or justice may confer substantive protections.

(b)   Substantive Due Process Rights in Property

51                               The Bill of Rights does not protect against the expropriation of property by the passage of unambiguous legislation.  It is unnecessary to decide now exactly what other substantive protections, if any, might be conferred by the Bill of Rights’ s. 1(a)’s property guarantees.

52                               The Bill of Rights protects only rights that existed at the time of its passage, in 1960.  At that time it was undisputed, as it continues to be today, that Parliament had the right to expropriate property if it made its intention clear.

53                               This right has long been recognized.  At the turn of the century, Riddell J. of the Ontario High Court recognized the Crown’s right to take property without compensation.  The dispute involved a mining company that had failed to properly stake a claim.  The claim had subsequently been sold by the Crown.  Riddell J. wrote:

In short, the Legislature within its jurisdiction can do everything that is not naturally impossible, and is restrained by no rule human or divine. If it be that the plaintiffs acquired any rights, which I am far from finding, the Legislature had the power to take them away.  The prohibition, “Thou shalt not steal,” has no legal force upon the sovereign body.  And there would be no necessity for compensation to be given. [Emphasis added.]

(See Florence Mining Co. v. Cobalt Lake Mining Co. (1909), 18 O.L.R. 275, at p. 279.)

54                               In Manitoba Fisheries Ltd. v. The Queen, [1979] 1 S.C.R. 101, the Court ordered compensation for the loss of goodwill to a fishing company caused by the passage of the federal Freshwater Fish Marketing Act, R.S.C. 1970, c. F-13, which created a Crown corporation that would have exclusive extraprovincial marketing rights for all Canadian fish.  Although the Court ordered compensation in that case, Ritchie J. made clear that Parliament could effect a taking without just compensation if it did so specifically (at p. 118 (citing Attorney-General v. De Keyser’s Royal Hotel, [1920] A.C. 508 (H.L.), at p. 542)).

55                               And more recently, in Wells, supra, at para. 41, the Court held that a senior provincial civil servant whose position was statutorily eliminated still had a contract law remedy against the province.  However, the Court reiterated the law on expropriation in Canada.  Such expropriations are within the power of legislatures where that intent is clearly and unambiguously stated:

While the legislature may have the extraordinary power of passing a law to specifically deny compensation to an aggrieved individual with whom it has broken an agreement, clear and explicit statutory language would be required to extinguish existing rights previously conferred on that party.

56                               Here, to the disadvantage of the respondent, Parliament’s expropriative intent was indeed clear and unambiguous.  Section 5.1(4)  of the Department of Veterans Affairs Act  states:

No claim shall be made after this subsection comes into force for or on account of interest on moneys held or administered by the Minister during any period prior to January 1, 1990 pursuant to subsection 41(1)  of the Pension Act , subsection 15(2)  of the War Veterans Allowance Act  or any regulations made under section 5 of this Act.

57                               The provision leaves no doubt that the respondent has no claim for interest.  Since he would have had no substantive right against a clear and unambiguous expropriation in 1960, the Bill of Rights can offer him no such protection today.

C.     Section 2(e) of the Bill of Rights

58                               Section 2(e) of the Bill of Rights guarantees that “. . . no law of Canada shall be construed or applied so as to . . . (e) deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations.”  Counsel for the respondent submitted that he was guaranteed such a hearing prior to Parliament expropriating the interest on his pension moneys.

59                               However, s. 2(e) applies only to guarantee the fundamental justice of proceedings before any tribunal or administrative body that determines individual rights and obligations.  That this is the case becomes more obvious by examining the other guarantees of s. 2, which confer:

(i)                protections against arbitrary detention and cruel and unusual punishment;

(ii)               upon arrest, the right to information about charges laid, the right to counsel and the right to habeas corpus;

(iii)               evidentiary rights and rights against self-incrimination;

(iv)              the presumption of innocence;

(v)               the right to an impartial tribunal;

(vi)              the right to reasonable bail; and

(vii)              the right to an interpreter in proceedings.

All of these protections are legal rights applicable in the context of, or prior to, a hearing before a court or tribunal.

60                               The French version of s. 2(e) makes this distinction clearer.  A fair hearing is translated as “une audition impartiale de sa cause”.  According to Le Grand Robert de la langue française (2nd ed. 2001), the term “cause” means “[a]ffaire, procès qui se plaide”.  This definition confirms the legalistic nature of the “fair hearing”.

61                               Section 2(e) of the Bill of Rights does not impose upon Parliament the duty to provide a hearing before the enactment of legislation.  Its protections are operative only in the application of law to individual circumstances in a proceeding before a court, tribunal or similar body.

V.     Conclusion

62                               The respondent and the class of disabled veterans it represents are owed decades of interest on their pension and benefit funds.  The Crown does not dispute these findings.  But Parliament has chosen for undisclosed reasons to lawfully deny the veterans, to whom the Crown owed a fiduciary duty, these benefits whether legal, equitable or fiduciary.  The due process protections of property in the Bill of Rights do not grant procedural rights in the process of legislative enactment.  They do confer certain rights to notice and an opportunity to make submissions in the adjudication of individual rights and obligations, but no such rights are at issue in this appeal.

63                               While the due process guarantees may have some substantive content not apparent in this appeal, there is no due process right against duly enacted legislation unambiguously expropriating property interests.

64                               I would allow the appeal without costs.  I would not disturb the order as to costs below.

65                               I would answer the constitutional questions as follows:

(1)               Is s. 5.1(4)  of the Department of Veterans Affairs Act , R.S.C. 1985, c. V-1 , as amended, inconsistent with s. 1 (a) of the Canadian Bill of Rights , S.C. 1960, c. 44 ?

Answer:       No.

(2)               Is s. 5.1(4)  of the Department of Veterans Affairs Act , R.S.C. 1985, c. V-1 , as amended, inconsistent with s. 2 (e) of the Canadian Bill of Rights , S.C. 1960, c. 44 ?

Answer:       No.

(3)               If the answer to question 1 or 2 is in the affirmative, is s. 5.1(4)  of the Department of Veterans Affairs Act , R.S.C. 1985, c. V-1 , as amended, inoperable by reason of such inconsistency?

Answer:       It is unnecessary to answer this question.

Appeal allowed.

Solicitor for the appellant:  Attorney General of Canada, Ottawa.

Solicitors for the respondent:  Raphael Partners, Windsor.