OTTAWA—The country's top court swiftly dismissed the Conservative government's latest attempt to see former Guantanomo Bay prisoner Omar Khadr dealt with as a hardened offender deserving of more time in an adult federal penitentiary.

It was a rare judgment issued from the bench that came after little more than two hours of oral argument. And it is the third time Ottawa lost in matters involving Omar Khadr at the Supreme Court of Canada.

For the moment, Khadr is out on bail, but Ottawa continues to appeal that decision.

Yet the high court said Ottawa has already made a grave mistake in how it interprets the International Transfer of Offenders Act in Khadr's case and he should never have been placed in the federal penitentiary system, given his sentence.

The judges said it is clear under that law Khadr should have been placed "in a provincial correctional facility . . . for adults."

The high court didn't expressly declare Khadr was a young offender at the time of his crimes, but the ruling is based on the fact that the sentence he received was equivalent to a youth sentence for murder in Canada. (The maximum youth sentence for first-degree murder is 10 years here.)

Khadr, now 28, was sentenced to eight years after he pleaded guilty in 2010 at Guantanamo Bay to five terror-related offences, including the murder of an army medic during a 2002 gunfight in Afghanistan. Khadr was 15 at the time he was captured and jailed by U.S. forces. Transferred as a prisoner to Canada in 2012, he won release on bail last week while he appeals that sentence in the U.S.

"We are of the view that a proper interpretation of the relevant legislation does not permit Mr. Khadr's eight-year sentence to be treated as five distinct eight-year sentences to be served concurrently," said Chief Justice Beverley McLachlin, rendering the court's reasons for judgment orally.

The federal government wanted the high court to view Khadr's sentence as five separate sentences of eight years. It conceded eight years was a youth-length sentence for murder, but it argued eight years for several of the other charges were adult length terms, and insisted that international transfers of prisoners could be negatively affected if Canada was seen as reducing sentences levied abroad.

With the support of the government of Alberta, federal lawyers also argued there are more programming opportunities for the rehabilitation and safe reintegration of Khadr and offenders like him in federal institutions, not provincial institutions.

However, several judges, including the soon-to-retire Justice Marshall Rothstein, challenged federal lawyer Sharlene Telles-Langdon to explain how U.S. military authorities would have levied eight years for first-degree murder, clearly the most serious offence, and the same for each lesser offence.

At the end, the court clearly rejected the federal arguments, and, if there were any doubt, it awarded legal costs against the government in upholding an earlier ruling of the Alberta Court of Appeal.

McLachlin said: "The only issue in this appeal is what correctional facility Mr. Khadr should be placed in."

"This is a question of statutory interpretation. Simply put, if Mr. Khadr's eight-year sentence is treated as a global sentence for all the offences to which he pleaded guilty, the sentence is under the minimum for an adult sentence, with the result that … his sentence is to be served in a provincial facility."

McLachlin did not comment on Ottawa's claim that international transfers of prisoners could be negatively affected.

Nor did she comment on Amnesty International's arguments that international human rights law and Canada's obligations under covenants protecting child soldiers and youth offenders required the "least coercive" approach to Khadr's imprisonment.

Khadr wasn't present, but his lawyers Nathan Whitling and Dennis Edney rejoiced.

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Edney admitted he was surprised it happened so quickly, but was pleased because "we argued all along it was a simple issue.

"Perhaps there's a message there, less for myself and more for this government, that continues to waste taxpayers' dollars persecuting my client."

Edney said Khadr has a new bike, hasn't stopped cycling since he got it, and has been embraced by neighbours in Edney's community where Khadr lives with Edney and his wife.

Edney did not backtrack from his remarks last week that put the blame squarely on Prime Minister Stephen Harper for Khadr's plight having been "abandoned" in Guantanamo as a child.

"I've come to the conclusion, an honest conclusion felt by many, many Canadians throughout Canada, that Mr. Harper is a bigot, and Mr. Harper doesn't like Muslims, and there's evidence to show that."

Edney said Khadr is moving on.

"What happens next is he gets on with life," said Edney, who added that Khadr "will go to university, and he will start to adjust and he will keep a low profile.

"He wants to be part of Canada and he doesn't want the publicity."

Whitling had argued in court that even the U.S. military commission's convening authority and prosecution had never suggested Khadr's sentence package was five separate eight-year sentences.

Jasmine Akbarali, lawyer for the Canadian Civil Liberties Association, which submitted written arguments in the matter, said, "It was a good win for Mr. Khadr."

"We thought it was not right for the government to take one unitary sentence of eight years, and convert it into five sentences of eight years . . . it was effectively taking an 8-year sentence and making it a 40-year sentence . . . changing the character of it, and this court said you can't do that."