The Doctrine of Public Policy in Canadian Contract Law

The Doctrine of Public Policy in Canadian Contract Law I 11
which required that the residue be gifted to the mother who in the 10 years
following the testator's death had given birth to the greatest number of children
in Toronto, should be declared void for violating public policy. Duff C.J., who
delivered judgment for the majority of the Supreme Court of Canada, held that
the provision was not invalid. He prefaced his reasons by describing the doctrine
in the following terms:
[i]t is convenient to notice first of all the manner in which the principle of law
operates, by force of which a contract or disposition of property is held to be
invalidated as being obnoxious to the public good on some ground or principle
comprehended within the general phrase 'against public policy'. . . It is the duty
of the courts to give effect to contracts and testamentary dispositions according
to the settled rules and principles of law, since we are under a reign of law; but
there are cases in which rules of law cannot have their normal operation because
the law itself recognizes some paramount consideration of public policy which
over-rides the interest and what otherwise would be the rights and powers of the
individual. It is, in our opinion, important not to forget that it is in this way, in
derogation of the rights and powers of private persons, as they would otherwise
be ascertained by principles of law, that the principle of public policy operates.5°
[emphasis added]
Duff C.J. then referred to the seeming dispute between Lords Atkin and Wright
in Fender regarding the degree to which new categories of public policy could
be recognized by the courts, and indicated that, although he was not expressing
a final opinion upon the subject, he inclined to the view of Lord Wright that
public policy should not be extended beyond its recognized categories.5' However,
Duff C.J. then proceeded to state that:
.taking the most liberal view of the jurisdiction of the courts, there are at least
two conditions which must be fulfilled to justify a refusal by the courts on grounds
of public policy to give effect to a rule of law according to its proper application
in the usual course in respect of a disposition of property. First. . . 'it may be
stated that such prohibition is imposed in the interest of the safety of the state, or
the economic or social well-being of the state and its people as a whole. It is
therefore necessary, when the enforcement of a contract is challenged, to ascertain
the existence and exact limits of the principle of public policy contended for, and
then to consider whether the particular contract falls within those limits.' Secondly.
. . 'the doctrine should be invoked only in clear cases, in which the harm
to the public is substantially incontestable, and does not depend upon the idiosyncratic
inferences of a few judicial minds. . :52 [emphasis added]
50 Mid. at paras. 4-5.
51 Ibid. at para. 14.
52 Mid. at para. 15.