Activist judges making law in BCE case

Terence Corcoran makes the case for reversing the Quebec Court of Appeal's recent decision in the BCE case. Once again our august judiciary is making the law under the guise of interpreting it.

It would be a spectacular long-term Canadian shareholder disaster, and possibly a corporate governance disaster, if the BCE takeover were to crash over the short-term interests of a relatively small group of bondholders.

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The role of the Supreme Court, if it accepts the appeal, would be to uphold shareholder rights and reverse Wednesday's Quebec Court of Appeal decision. That decision against BCE appears to significantly expand the subversive idea -- long a shadow over Canadian corporate law -- that shareholders are just another group of interested parties in a long list of "stakeholders."

As the appeal court put it, the BCE board of directors, and a special independent committee of the board, made a "mistake" in deciding not to make special arrangements with the owners of about $5-billion in Bell Canada long-term debt, the debenture holders. "In Canada, the directors of a corporation have a more extensive duty" than to maximize value to shareholders. This more extensive duty means the board "must have regard, among other things, to the reasonable expectations of the debenture holders, and those may be more extensive than merely respecting their contractual legal rights."

What's the point of a contract if one side is automatically forced to go beyond it?

In the rain with Trudeau and the Queen 25 years ago

It was raining that day on Parliament Hill when I and countless other proud Canadians stood in the rain to witness Prime Minister Pierre Trudeau and Queen Elizabeth II sign the Constitution. Canada had at long last broken free of its colonial status.

Thrown into the bargain was a controversial Charter of Rights and Freedoms. Although one of Trudeau's few real achievements, the charter has, nonetheless, been a disappointment. Intended to enshrine individual rights in the constitution, the charter has in many ways come up short.

First, the existence of that pesky notwithstanding clause means that governments can always override the charter if they see fit. While the argument for parliament supremacy is compelling, it is little consolation for non-francophones living in Quebec where the provincial government has repeatedly used the notwithstanding clause to circumscribe minority linguistic rights. We should not be surprised that majorities sometimes act like majorities. That's why we have a charter. Too bad that when it really counts, the rights of minorities can still be sacrificed.

Second, the charter has proven to be quite a malleable instrument in the hands of activist lawyers and judges, and has been used in ways that parliament never imagined, let alone intended. A constitution is a living document, the interpretation of which will evolve over time to reflect changes in broader society. Yet it is a fine balance between reflecting societal change and inducing it. I would argue that rather than being pulled by those changes, the charter has often been doing the pushing.

Finally, many people mistakenly believe the charter is about individual rights. It is not. We are not all equal before the law. In many cases, group rights trump individual rights. Consequently, if you are an aboriginal, a catholic or a francophone, to take three examples, you may have "rights" that the rest of us don't. In effect, individual freedom still sits at the back of the bus.

All the same, I think Canada is better off with an imperfect charter of rights and freedoms than without. For that, Pierre Trudeau and the Liberal Party deserve our appreciation. But please, spare me the mock indignation of Paul Martin and others that our rights are somehow threatened by a Conservative government. The charter is there to protect the rights of all Canadians, not just the favoured causes of the left. Until it does, do not be surprised that some of us do not hold it up on a pedestal.