The Doctrine of Public Policy in Canadian Contract Law

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461 Annual Review of Civil Litigation The foregoing theory is also able to defend the doctrine from the criticism that public policy results in a constitutionally illegitimate blurring of the legislative and judicial functions. In declining to enforce a contract which is contrary to a value of public policy, the courts are not engaged in a balancing of distributive interests or social preferences that requires empirical study, or is by rights the domain of Parliament. Rather, they are attempting to preserve values which are necessary preconditions of justice in a modern liberal democracy. It therefore follows that the courts are merely seeking to enforce values which are necessary for the meaningful exercise of their own jurisdiction, and the discovery and application of such values is manifestly premised upon a legitimately judicial, rather than legislative, function.23' Indeed, our courts must be permitted to base their decisions upon considerations external to the positive law when an unthinking adherence to it would be inimical to the very possibility of an effective judiciary (i.e., that its adjudications occur within a just society). To state otherwise would entail that the courts have no obligation to preserve their own practical utility and, it follows, that of the positive law itself. VI. CONCLUSION It is hoped that the preceding discussion of the nature and meaning of the public policy doctrine has proved interesting to the reader. Certainly public policy is a highly fascinating topic for both the legal practitioner and the theorist alike. Indeed, that which is implicated by the doctrine is nothing less than the ability of any society to reconcile its body of laws with its ideal of justice. While public policy in Anglo-Canadian contract law has never re-attained the level of judicial flexibility envisioned in Egerton, it is now evident, particularly with the advent of the Charter, that the doctrine is poised to enter a period of renewed growth and significance. In developing the doctrine, courts must ensure that they do not unduly extend the reach of public policy, and in so doing undermine the continued march of the positive law. Nevertheless, they must also be free to put aside the constraints of the nineteenth and early twentieth centuries, and adopt instead a theory of public policy which recognizes the dynamic and evolving nature of modern social life. It is the fundamental thesis of this paper that such a balance is best struck by restricting the application of the doctrine to contractual behaviour which threatens the possibility of a just society, and therefore the ultimate goal of the common law itself. As stated by Cardozo: 231 This is not to suggest that the promotion of such values lies within the exclusive preserve of the judiciary. It is rather to state that such activity may reasonably be expected of the judiciary in addition to the legislature.
The Doctrine of Public Policy in Canadian Contract Law 1 47 [t]he final cause of law is the welfare of society. The rule that misses its aim cannot permanently justify its existence. . . Logic and history and custom have their place. We will shape the law to conform to them when we may, but only within bounds. The end which the law serves will dominate them a11.232 232 Benjamin N. Cardozo, The Nature of the Judicial Process (New Haven, Conn.: Yale University Press, 1921) at 66.
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The Doctrine of Public Policy in Canadian Contract Law

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