The Doctrine of Public Policy in Canadian Contract Law

32 / Annual Review of Civil Litigation
IV. PUBLIC POLICY IN PRACTICE
While the doctrine of public policy is by its very nature a concept that is
mired in theory and legal principle, it has, like all common law concepts,
developed through the crucible of litigation. Indeed, as noted previously in this
paper, the doctrine remains of great practical importance to parties embroiled
in contractual disputes. It will therefore be useful to briefly explore some of the
evidentiary and remedial issues which arise in connection with the doctrine,
before turning to consider its normative rationales."'
I. Evidentiary Issues
There are two primary contexts in which evidentiary issues may arise in
relation to the doctrine of public policy: (1) where a party seeks to prove that
the content of public policy embraces a specific proposition; and (2) where a
party seeks to prove that a specific contract is in violation of the doctrine.
Because the courts have traditionally regarded public policy as a question of
law, they have often held that no evidence is admissible to "show what public
policy is or to show the effect of a contract or disposition alleged to infringe
public policy."172 Nevertheless, this principle has occasionally been lamented
by the judiciary. In Mogul Steamship Co. v. McGregor, Gow & Co., for instance,
Lord Bramwell stated that:
[n]o evidence is given in these public policy 'cases. The tribunal is to say, as
matter of law, that the thing is against public policy, and void. How can the judge
do that without any evidence as to its effect and consequences"' [emphasis
added]
The prohibition upon the receipt of evidence for the purposes of identifying
the content of public policy does not preclude the courts from taking
171 There are of course additional practical issues that can arise in relation to the doctrine
of public policy, but they are unfortunately beyond the ambit of the current paper. One
such issue concerns the proper law of public policy; if a contract governed by the law
of one state is sought to be enforced in another, which jurisdiction's public policy doctrine
should be applicable Arguably, the supra-legal nature of the doctrine entails that the
enforcing jurisdiction should apply its own public policy rules regardless of the governing
law. However, there is authority to suggest that the enforcing jurisdiction will only
apply the domestic doctrine of public policy which has developed in connection with
conflict of laws principles rather than contract law principles: see K. (E.)v. K. (D.), 2005
BCCA 425 (C.A.) at paras. 22-24; and the discussion at footnote 124 above..
172 Decker! v. Prudential Insurance Co., [1943] O.R. 448, [1943] O.J. No. 467 (C.A.) at
para. 34.
173 (1891), [1892] A.C. 25 (H.L.) at 45.