The Doctrine of Public Policy in Canadian Contract Law

The Doctrine of Public Policy in Canadian Contract Law 19
There will be, no doubt, occasionally a difficulty in deciding whether a particular
case is liable to the application of the principle. But there is the same difficulty
in regard to the application of many other rules and principles admitted to be
established law. The principle itself seems to me to be necessarily incident to
every state governed by law.43 [emphasis added]
Although the doctrine of public policy thus emerged intact from the
nineteenth, century, its invocation was (and still is) usually prefaced by a considerable
degree of judicial hand-wringing and an excessive dependence on
precedent.44 In the early twentieth-century case of Janson, Lord Halsbury even
denied that any new categories of public policy could be adopted.45 While this
proposition was subsequently questioned by Lord Atkin in Fender v. Mildmay46
(which is in many respects now the leading English judgment respecting the
role of public policy in contract law), the Law Lords in that decision still
affirmed the necessity of approaching the doctrine with caution, and rejected
the more liberal attitude evidenced in Egerton. At issue in Fender was whether
an agreement by a married man to marry a third party, which was made after a
decree nisi for the dissolution of his original marriage had been obtained by his
wife but before the decree became absolute, was enforceable in an action for
damages brought by the third party. The majority of the Law Lords upheld the
contract, notwithstanding that agreements to wed a married person had historically
been set aside on account of public policy. The two leading judgments
were delivered by Lord Atkin and Lord Wright, with the former stating as
follows:
...l propose in the first instance to say something upon the doctrine of public
policy generally. My Lords, from time to time judges of the highest reputation
have uttered warning notes as to the danger of permitting judicial tribunals to
roam unchecked in this field. The 'unruly horse' of Hobart C.J. is common-
43 Ibid. at 197.
44 Waddams, supra note 4 at 393, writes that "Nis in other branches of contract law an
earlier flexibility was superseded in the 19th and early 20th centuries by a period of
rigidity. The various 'heads' of public policy that are listed in the modern textbooks as
sufficient to justify setting aside contracts arose one by one.. ."
45 Janson, supra note 12 at 491-92. See also Wadgery v. Fall, [1926] 2 W.W.R. 657, 1926
CarswellSask 52 (Sask. C.A.) at para. 4, stating that "Rio assert merely that a contract is
against public policy is not enough. It must be shown to belong to a class of contracts that
the law recognizes as within that category. Thus a contract may be against public policy
because it is in restraint of trade, or is in restraint of marriage, or is founded upon an
immoral consideration, or is intended to assist the King's enemies, or is of some other
class of transactions that the common law condemns or that the statute law prohibits. The
Court cannot invent a new head of public policy".
46 (1937), [1938] A.C. 1 (H.L.) at 11 [Fender]. See also Rodriguez v. Speyer Brothers,[1919]
A.C. 59 (H.L.) at 79, stating that Lord Halsbury's "observation must be taken with the
qualification that what the law recognises as contrary to public policy turns out to vary
greatly from time to time."