Jurisprudence should Dominate
September 30, 2016
The truth is determined by the facts not the practice or the power to exclude evidence from a court of law. The evidence never changes, the facts can never be altered, and they are never, ever wrong, despite every effort to the contrary.
Moreover, honesty isn’t just the best policy — it’s the law, the Supreme Court of Canada has ruled.
In a case released Thursday November 13, 2014, called Bhasin v. Hrynew, the court said Canadian contract law comes with an implied duty of good faith that requires parties to perform their contractual obligations honestly.
“Finding that there is a duty to perform contracts honestly will make the law more certain, more just and more in tune with reasonable commercial expectations,” wrote Mr. Justice Thomas Cromwell in the unanimous seven-judge decision.
“The first step is to recognize that there is an organizing principle of good faith that underlies and manifests itself in various more specific doctrines governing contractual performance. That organizing principle is simply that parties generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily.”
“In my view, we should. I would hold that there is a general duty of honesty in contractual performance. This means simply that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract. This does not impose a duty of loyalty or of disclosure or require a party to forego advantages flowing from the contract; it is a simple requirement not to lie or mislead the other party about one’s contractual performance. Recognizing a duty of honest performance flowing directly from the common law organizing principle of good faith is a modest, incremental step. The requirement to act honestly is one of the most widely recognized aspects of the organizing principle of good faith: see Swan and Adamski, at § 8.135; O’Byrne, “Good Faith in Contractual Performance”, at p. 78; Belobaba; Greenberg v. Meffert (1985), 1985 CanLII 1975 (ON CA), 50 O.R (2d) 755 (C.A.), at p. 764; Gateway Realty, at para. 38, per Kelly J.; Shelanu Inc. v. Print Three Franchising Corp. (2003), 2003 CanLII 52151 (ON CA), 64 O.R. (3d) 533 (C.A.), at para. 69. For example, the duty of honesty was a key component of the good faith requirements which have been recognized in relation to termination of employment contracts: Wallace, at para. 98; Honda Canada, at para. 58.”
“I think this is the most important contract case in 20 years,” said Neil Finkelstein of McCarthy Tétrault LLP, counsel for Harish Bhasin, the plaintiff who won the case. “We’re going to find another series of jurisprudence arising out of this case over time about how far this duty of good faith and duty of honesty goes.”
Justice Cromwell acknowledged that the common law has long resisted acknowledging a general duty of good faith in contracting outside those specific areas. The piecemeal approach of Canadian common law is out of step with the civil law in Quebec and in most U.S. jurisdictions, he wrote.
“In my view, it is time to take two incremental steps in order to make the common law less unsettled and piecemeal, more coherent and more just. The first step is to acknowledge that good faith contractual performance is a general organizing principle of the common law of contract which underpins and informs the various rules in which the common law, in various situations and types of relationships, recognizes obligations of good faith contractual performance. The second is to recognize, as a further manifestation of this organizing principle of good faith, that there is a common law duty which applies to all contracts to act honestly in the performance of contractual obligations.”
Counsel for Mr. Bhasin argued in their factum that the freedom to contract comes with reasonable limits. Good faith should exist when a party is exercising a discretionary power that can devastate a counter party, they wrote. He was represented by Mr. Finkelstein and Brandon Kain of McCarthy Tétrault LLP, John McCamus of Davis Ward Phillips & Vineberg LLP and Stephen Moreau of Cavalluzzo LLP.
“The law of contracts is not exempt from basic requirements of honesty and fairness,” Mr. Bhasin’s lawyers argued. “One need look no further than the existing jurisprudence of this court, which recognizes the duty of good faith in employment, insurance and tendering agreements, in addition to cases like this one where a discretionary power is exercised for an improper purpose so as to defeat a party’s legitimate contractual objectives.”
Mr. Lederman, Jon Laxer and Constanza Pauchulo of Lenczner Slaght, counsel for the defendant RESP company, countered that the first principle of common law contracting is that parties are bound by the terms they have agreed to, not what they ought to have agreed to. “To succeed in this appeal, Mr. Bhasin must persuade this Court to adopt a radically new contract model which would give effect to new, unbargained for rights and obligations,” they wrote.
Honesty, it appears, is not an unbargained right anymore.
(1) There is a general organizing principle of good faith that underlies many facets of contract law.
(2) In general, the particular implications of the broad principle for particular cases are determined by resorting to the body of doctrine that has developed which gives effect to aspects of that principle in particular types of situations and relationships.
(3) It is appropriate to recognize a new common law duty that applies to all contracts as a manifestation of the general organizing principle of good faith: a duty of honest performance, which requires the parties to be honest with each other in relation to the performance of their contractual obligations.
The law has clearly dictated the ideal and now it needs to be applied.
Unfortunately, it rarely is because, as John Steinbeck said in 1956, "every man is bound to temper his facts to his unchanging personality, background, prejudices and desires." Consequently, as long as bias dictates outcome, miscarriages of justice are common and predictable.
The higher significance of Bhasin is not that it is not applied because deception still dominates but the fact that it can be used as a building block to eradicate bias or to force people as a matter of law to "perform their contractual duties honestly and reasonably and not capriciously or arbitrarily.”
Indeed, without realizing it, the Supreme Court of Canada has re-defined "the law".
The law is not "reason, free from passion" as Aristotle indicated but "reason free from bias".
Unfortunately, "the truth" is not a given, it is an evaluation, but that too is a source of frustration which can be overcome through "jurisprudence".
Indeed, the best and the most competent lawyers and judge have always had to struggle to overcome built-in bias.
In the United States, the greatest challenge of district court judge Learned Hand was the routine duty of supervising ordinary lawsuits. Trials frequently frustrated by obfuscations and delays occupied much of his time and energy and he repeatedly voiced irritation about the tactics of attorneys who imposed needless roadblocks.
Frustrated by legal delays and chicanery, Hand sought efficiency, rationality and greater focus in the resolution of factual disputes. He was a penetrating and comprehensive thinker whose singular motivation was the desire to obtain the best possible resolution and deeply resented a fact-finding process overwhelmed by lawyers who employ wiles and stratagems to prevent the trial judge or jury from getting as close as possible to the actual facts of a case.
Access to justice is essentially about promoting the capacity to promote an independent decision but confirmation bias frequently derails the opportunity. It is consequently necessary and essentil to eradicate the pernicious consequence of bias because it invariably produces miscarriages of justice with clockwork efficiency and that is clearly not acceptable.
In law, every case is unique and the competent jurist is guided by principle, not precedent, because judgments frequently contradict one another and if a precedent were a binding rule that could be wrapped around a new cause of action, there would be no need for Judges. We could merely give lawyers the authority to draft judgments and instruct the Judge to sign it, which is what in fact happens when the process is corrupted or when a Judge is inappropriately influenced by theatrics.
Terms like "equality under the law", "justice for all", and "equal protection under the law" are not just words, they are enduring, inviolable principles tht trump preceent.
Stare decisis is the policy of courts to abide by or adhere to principles established by decisions in earlier cases but there is nothing in the law which mandates adherence to any miscarriage of justice, past or present.
Consequently, When we say "Let the decision stand", we should think more about principles which need to be protected and defended and less about the exploits of crafty lawyers because a bad precedent is simply a decision that should be reversed. It is folly to seek to transfer unique circumstances from one case to another because that is potentially the transplantation of a miscarriage of justice.
Precedents are not immutable. They are subject to the serious scrutiny of concerns like: "Is the precedent administrable?" "Have the facts that the courts assumed in its older precedent changed?" "Have new developments brought the foundation of an older precedent into question?" Precedent is a tool of guidance, not a mandate to ignore developments that beg revision or alteration.
Finally, everybody must acknowledge the validity of the line that Oliver Wendell Holmes, Jr. drew in the sand when he said, "Your Liberty To Swing Your Fist Ends Just Where My Nose Begins." If you cross that line you do not belong in the legal profession.
Next: Truth is still a common casualty in every field.
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