The New Brunswick legislature enacted Bill 7, which abolished the system of supernumerary judges and replaced it with a panel of retired judges paid on a per diem basis.
The respondents, who were supernumerary judges, challenged the constitutionality of the legislation, arguing it violated the guarantees of judicial independence under s. 11(d) of the Charter and the Preamble to the Constitution Act, 1867.
The Supreme Court of Canada held that the legislation was unconstitutional because it violated the institutional dimension of financial security by eliminating an economic benefit without referring the matter to an independent, effective, and objective commission.
The Court suspended the declaration of invalidity for six months but allowed the respondents to benefit from it immediately.
The respondents' claim for damages was dismissed as there was no evidence of bad faith by the government.
