Justin Trudeau’s ‘mandate letters’ to the newly sworn in cabinet ministers have been generally well received. In the letters he tells the ministers to be good and to get to work on fulfilling the Liberals’ campaign pledges.
I confess I do not recall hearing of mandate letters before Trudeau’s were released on November 13. Apparently they have been used before in Ottawa and several provinces. It was news that they were being published, as Kathleen Wynne had published her mandate letters to Ontario ministers on September 24, 2014 and Jim Prentice published his to Alberta ministers shortly before. Publishing the letters seems now to be the practice. What unpublished mandate letters were in earlier years sent to ministers in Ottawa and the provincial capitals and what they said is unclear.
They have, in part, the look of a management school exercise. Mission statements and business plans and other forms of putting good intentions on paper are big in management schools. If you can put together the paper that would get you straight As in management school, you may be thought to have done well whatever actually happens in the organisation you are supposed to be running.
Trudeau’s letters are also political propaganda, something that might not get an A in a management school:
“We have promised Canadians a government that will bring real change – in both what we do and how we do it. Canadians sent a clear message in this election, and our platform offered a new, ambitious plan for a strong and growing middle class.”
But what is most striking, and should be disturbing, about the mandate letters is the presumption of Justin Trudeau issuing orders to cabinet ministers. The letters have been described in the press as his ‘marching orders.’ Their tone is grossly condescending: ‘I will expect you….’
The Prime Minister has no legal or constitutional authority to issue orders to cabinet ministers. The old idea was that a prime minister was simply a primus inter pares, a first among equals. Departmental ministers have legal authority to make regulations and take other actions, but the Prime Minister has very little legal authority himself. All he can do is advise the Governor General to do things, which, so long as he, and the ministers who serve with him, have the confidence of the House of Commons, the Governor General will do.
But the principle of cabinet government is collective responsibility. Ministers are not supposed to do things because the Prime Minister tells them to but because they have confidence in each other and see things the same way and have had a chance to talk things over in cabinet and come to a consensus. If the Prime Minister tells a minister she should do something she doesn’t think best, she may decide not to make an issue of it, if she can see how to make a case for it, or she should resign. She can’t say, either now, or in her memoirs, ‘I thought it was a bad idea, but the Prime Minister ordered me to do it.’
Of course ministers on taking office will require extensive briefing on what their responsibilities and powers are and what issues they may have to address and what procedures they should follow. The civil service will have seen to that. But ministers do not require orders from the Prime Minister to get on with their work. If Trudeau had any doubts whether any of them were up to the job, he should not have advised the Governor General to appoint them.
All this may seem rather pedantic and abstruse. But it is actually central to the much canvassed issue of the overweening power of party leaders and the Prime Minister in our politics. In assuming a presidential prerogative to issue orders to what he must consider ‘his’ ministers, Trudeau assumes supreme authority. For all his talk of ‘real change,’ less than ten days after he was sworn in he was acting on the theory that Canada is an elective dictatorship.
The publication of Trudeau’s mandate letters has been hailed as an exercise in ‘open government.’ If we are to take it that Ministers of the Crown have been outed as the Prime Minister’s minions, perhaps that it is a good thing. But if, as seems to be happening, it celebrates the Prime Minister’s supreme authority, it is not.
Whatever letters Stephen Harper wrote to cabinet ministers, they were not subject to the indignity of having their subordination publicised.
Who, we might ask, has sent Justin Trudeau a mandate letter telling him how he should conduct himself?
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Monday, November 23, 2015
Friday, November 20, 2015
Justin's Inauguration
We are generally encouraged to be wary of American culture and its potential to overwhelm our own and lead us from living our own way.
It is one of the arguments for subsidising our culture and for the CBC that they may assure that we carry on as we are and not as Americans do.
But when it comes down to it, we can't seem to escape aping the Americans.
Justin Trudeau's public celebration of his swearing in on November 4 demonstrated this painfully. It had the air of a presidential inauguration.
It follows a practice that has grown up over many decades in Ottawa and the provincial capitals. Rachel Notley’s carnavelesque swearing in as Premier of Alberta in May was a new high point.
The inauguration of a President of the United States became a big public ceremony early on. Thomas Jefferson was criticised for walking to his first inauguration in 1801.
But the American President is the head of state of the United States of America. His is a very different office from that of Canada's Prime Minister. Rightly or wrongly, a President of the United States is granted some respect and even loyalty as their First Citizen and Commander in Chief. Even in the present bitter politics of the United States Barack Obama’s harshest critics show him a kind of deference because of his office.
Our Prime Minister is simply our most important public servant, who has work to do. We owe him no deference or loyalty.
He must go through certain formalities to get his authority. Those formalities involve some ceremony.
People expect ceremony to be public, but it needn’t and shouldn’t always be. The purpose of the formalities was to vest Trudeau, and the ministers, with their authority, and, most importantly, to impress upon them their responsibilities.
This cannot happen if the formalities are turned into an official public celebration. Many Canadians, myself included of course, see nothing to celebrate in Trudeau becoming Prime Minister. Quite the contrary. We accept it as our lot, and hope for the best, but we should not have to see the prestige of the state invoked to rub our discomfiture in our faces.
Liberals could and did celebrate their victory on election night. We have nothing to celebrate as Justin Trudeau becomes Prime Minister. We have only to see that he gets to work and watch him closely as he does.
In the United Kingdom, much of whose political culture we are supposed to have inherited, they still do things as they should be done. The Prime Minister is sworn in by the Queen in private. Ministers are sworn in as the ministry is put together.
They do it all in a few days. While we take weeks to change governments. It has become what the Americans call a ‘transition.’
Trudeau’s inauguration fuels misconceptions about how our government works. The next election is scheduled for October 21, 2019. The likelihood of anything upsetting the schedule or the Liberal government being overthrown before the next election is extremely remote. But legally and constitutionally it is, and must be, a possibility, and we should understand that.
Trudeau has not won a prize he gets to keep until the next tournament in four years time. He has no term. His party won a majority of the seats in the House of Commons. So long as it holds together and Liberal MPs give him their support he will remain Prime Minister.
But what if everything turns sour and a long string of by-election defeats erodes that majority? What if the party splits? Impossible you say. And practically speaking you may be right. But one of the things that makes it impossible, is just that we think it is. Because we no longer understand that it is and should be possible.
And the seemingly impregnable position that Trudeau celebrated on Wednesday is part of the domineering way of our leaders that was held against Stephen Harper and the Liberal platform promised to change.
One wonders what sort of inauguration Trudeau would have planned had he only been leading a shaky minority government. Perhaps much the same. For it serves the purpose of impressing on us that we are stuck with him.
The use of government advertising to publicise the late Conservative government’s programmes was made an issue in the election and Trudeau has promised he won’t do the same. We shall see. But the use of an official ceremony to celebrate himself and his government is an equally objectionable abuse of a government function for party purposes.
We are so used to watching American inaugurations that we expect them here and no one even remarks the impropriety.
It is one of the arguments for subsidising our culture and for the CBC that they may assure that we carry on as we are and not as Americans do.
But when it comes down to it, we can't seem to escape aping the Americans.
Justin Trudeau's public celebration of his swearing in on November 4 demonstrated this painfully. It had the air of a presidential inauguration.
It follows a practice that has grown up over many decades in Ottawa and the provincial capitals. Rachel Notley’s carnavelesque swearing in as Premier of Alberta in May was a new high point.
The inauguration of a President of the United States became a big public ceremony early on. Thomas Jefferson was criticised for walking to his first inauguration in 1801.
But the American President is the head of state of the United States of America. His is a very different office from that of Canada's Prime Minister. Rightly or wrongly, a President of the United States is granted some respect and even loyalty as their First Citizen and Commander in Chief. Even in the present bitter politics of the United States Barack Obama’s harshest critics show him a kind of deference because of his office.
Our Prime Minister is simply our most important public servant, who has work to do. We owe him no deference or loyalty.
He must go through certain formalities to get his authority. Those formalities involve some ceremony.
People expect ceremony to be public, but it needn’t and shouldn’t always be. The purpose of the formalities was to vest Trudeau, and the ministers, with their authority, and, most importantly, to impress upon them their responsibilities.
This cannot happen if the formalities are turned into an official public celebration. Many Canadians, myself included of course, see nothing to celebrate in Trudeau becoming Prime Minister. Quite the contrary. We accept it as our lot, and hope for the best, but we should not have to see the prestige of the state invoked to rub our discomfiture in our faces.
Liberals could and did celebrate their victory on election night. We have nothing to celebrate as Justin Trudeau becomes Prime Minister. We have only to see that he gets to work and watch him closely as he does.
In the United Kingdom, much of whose political culture we are supposed to have inherited, they still do things as they should be done. The Prime Minister is sworn in by the Queen in private. Ministers are sworn in as the ministry is put together.
They do it all in a few days. While we take weeks to change governments. It has become what the Americans call a ‘transition.’
Trudeau’s inauguration fuels misconceptions about how our government works. The next election is scheduled for October 21, 2019. The likelihood of anything upsetting the schedule or the Liberal government being overthrown before the next election is extremely remote. But legally and constitutionally it is, and must be, a possibility, and we should understand that.
Trudeau has not won a prize he gets to keep until the next tournament in four years time. He has no term. His party won a majority of the seats in the House of Commons. So long as it holds together and Liberal MPs give him their support he will remain Prime Minister.
But what if everything turns sour and a long string of by-election defeats erodes that majority? What if the party splits? Impossible you say. And practically speaking you may be right. But one of the things that makes it impossible, is just that we think it is. Because we no longer understand that it is and should be possible.
And the seemingly impregnable position that Trudeau celebrated on Wednesday is part of the domineering way of our leaders that was held against Stephen Harper and the Liberal platform promised to change.
One wonders what sort of inauguration Trudeau would have planned had he only been leading a shaky minority government. Perhaps much the same. For it serves the purpose of impressing on us that we are stuck with him.
The use of government advertising to publicise the late Conservative government’s programmes was made an issue in the election and Trudeau has promised he won’t do the same. We shall see. But the use of an official ceremony to celebrate himself and his government is an equally objectionable abuse of a government function for party purposes.
We are so used to watching American inaugurations that we expect them here and no one even remarks the impropriety.
Friday, October 16, 2015
Those who are interested will decide. Let them
That as many as 40% of eligible voters may not vote in this election upsets Andrew Coyne and is a favorite theme of those who like to worry about the state of our democracy.
Coyne inclines to agree with ‘research’ he has seen indicating that people don’t vote because ‘they think the parties are all the same, or because all politicians are liars, or because they don't think their vote will change anything.’
I don’t go so far as Coyne’s straw man who thinks low turnout is ‘actually a sign of the ruddy health of our democracy.’ But I do think that ‘research’ that purports to explain why people don’t vote is shaky. Survey subjects are put on the spot, asked to excuse their imputed failure in civic responsibility, and come up with excuses. Most of what they say is encouraged by Coyne himself. He thinks the parties are pretty much the same and politicians say a lot that is untrue. Whether our votes will change anything? I’ll come to that in a moment.
Most of the people I know are interested in politics and likely to vote. Sadly, they will mostly vote wrong, but I try to set them right. The one person I know who I am sure will not vote is bright and curious and interested in big things like the environment and wars and our diverse identities but doesn’t give much thought to taxes and trade and the economy and daycare and I’m not going to try, impertinently and boringly, to change that.
I'm not going to tell anyone to vote. I've already written that conservatives should vote Conservative and socialists vote NDP. The rest of you will do what you think best. If you’re reading this column, you’re likely to vote. Of those who aren’t interested in politics, I think none the less. Unlike the totalitarian democrats I would not force them to interest themselves in matters that don’t interest them, to choose where they are indifferent. I would have them represented truthfully, as not interested, rather than dragooned to the polls to choose frivolously or randomly or spoil their ballots or vote as the bien pensants tell them to.
Coyne’s remedies for low turnout, apart from forcing us to vote, which he kindly doesn’t press as it is, he says, ‘a concept requiring more space to explain than I have.’ - What can he mean? - confirm the confusion underlying the turnout fret.
‘Tone down the vitriol.’ He thinks attack ads discourage people from voting. Attack ads are not designed to get people to stay home. They are addressed to those who will likely vote and designed to steer voters from one choice to another.
And what about toning down the unction? While politicians are dissing their opponents they are just as much trumpeting their compassion and concern to help us all, at least that vast majority who think we are ‘middle class,’ and seem to be running for sainthood as much as public office. The real problem is the hype. But that is a matter of our political culture, to which, as Coyne will admit, the media contribute as much as politicians.
Whatever politicians say that is dishonest they do to get votes. Not to put people off politics.
‘Punish political lies.’ Coyne doesn’t take the space to explain how this would work, but the only way it could would be by involving the courts and thus taking politics out of the hands of the voters. It is for the voters to punish political lies. Too often they don’t. Perhaps because they know in their hearts that they were complicit in the lies. That they voted for what they wanted to hear and would have shunned anyone who spoke the unvarnished truth.
Finally, ‘fix the electoral system.’ By which Coyne means, adopt some scheme of proportional representation by which voting would no longer be a means by which the voters can make decisions and become a opinion sample to be exploited by parties beyond the control of the voters.
There is no evidence that proportional representation encourages turnout. Many countries with PR have higher turnouts, but this can be explained by many things. Most have their elections on Sundays.
What commonly results from PR is that elections don’t ‘change anything.’ The same parties are in power for decades or, as often in Germany, the the main parties that fought the election form a ‘grand coalition’ and what appeared to be a choice of who should govern becomes a matter of both must govern.
I have written at length on the folly of ‘electoral reform’ and there really isn’t space to explain it here. But in a nutshell it is the idea that where there are more than two choices and none may get a majority there is some way of getting a majority by preferential voting or proportionality. There isn’t. It’s mathematically impossible, as Nobel Prize winner Kenneth Arrow explained, and the consequences of trying are elections that don’t ‘change anything’ and disproportionate power for minorities.
But on October 19 upwards of 60% of Canadians, however distracted by the noise of politicians and the media, will make a decision. Unfortunately, Andrew Coyne and the opposition parties want it to be the last time they will.
Coyne inclines to agree with ‘research’ he has seen indicating that people don’t vote because ‘they think the parties are all the same, or because all politicians are liars, or because they don't think their vote will change anything.’
I don’t go so far as Coyne’s straw man who thinks low turnout is ‘actually a sign of the ruddy health of our democracy.’ But I do think that ‘research’ that purports to explain why people don’t vote is shaky. Survey subjects are put on the spot, asked to excuse their imputed failure in civic responsibility, and come up with excuses. Most of what they say is encouraged by Coyne himself. He thinks the parties are pretty much the same and politicians say a lot that is untrue. Whether our votes will change anything? I’ll come to that in a moment.
Most of the people I know are interested in politics and likely to vote. Sadly, they will mostly vote wrong, but I try to set them right. The one person I know who I am sure will not vote is bright and curious and interested in big things like the environment and wars and our diverse identities but doesn’t give much thought to taxes and trade and the economy and daycare and I’m not going to try, impertinently and boringly, to change that.
I'm not going to tell anyone to vote. I've already written that conservatives should vote Conservative and socialists vote NDP. The rest of you will do what you think best. If you’re reading this column, you’re likely to vote. Of those who aren’t interested in politics, I think none the less. Unlike the totalitarian democrats I would not force them to interest themselves in matters that don’t interest them, to choose where they are indifferent. I would have them represented truthfully, as not interested, rather than dragooned to the polls to choose frivolously or randomly or spoil their ballots or vote as the bien pensants tell them to.
Coyne’s remedies for low turnout, apart from forcing us to vote, which he kindly doesn’t press as it is, he says, ‘a concept requiring more space to explain than I have.’ - What can he mean? - confirm the confusion underlying the turnout fret.
‘Tone down the vitriol.’ He thinks attack ads discourage people from voting. Attack ads are not designed to get people to stay home. They are addressed to those who will likely vote and designed to steer voters from one choice to another.
And what about toning down the unction? While politicians are dissing their opponents they are just as much trumpeting their compassion and concern to help us all, at least that vast majority who think we are ‘middle class,’ and seem to be running for sainthood as much as public office. The real problem is the hype. But that is a matter of our political culture, to which, as Coyne will admit, the media contribute as much as politicians.
Whatever politicians say that is dishonest they do to get votes. Not to put people off politics.
‘Punish political lies.’ Coyne doesn’t take the space to explain how this would work, but the only way it could would be by involving the courts and thus taking politics out of the hands of the voters. It is for the voters to punish political lies. Too often they don’t. Perhaps because they know in their hearts that they were complicit in the lies. That they voted for what they wanted to hear and would have shunned anyone who spoke the unvarnished truth.
Finally, ‘fix the electoral system.’ By which Coyne means, adopt some scheme of proportional representation by which voting would no longer be a means by which the voters can make decisions and become a opinion sample to be exploited by parties beyond the control of the voters.
There is no evidence that proportional representation encourages turnout. Many countries with PR have higher turnouts, but this can be explained by many things. Most have their elections on Sundays.
What commonly results from PR is that elections don’t ‘change anything.’ The same parties are in power for decades or, as often in Germany, the the main parties that fought the election form a ‘grand coalition’ and what appeared to be a choice of who should govern becomes a matter of both must govern.
I have written at length on the folly of ‘electoral reform’ and there really isn’t space to explain it here. But in a nutshell it is the idea that where there are more than two choices and none may get a majority there is some way of getting a majority by preferential voting or proportionality. There isn’t. It’s mathematically impossible, as Nobel Prize winner Kenneth Arrow explained, and the consequences of trying are elections that don’t ‘change anything’ and disproportionate power for minorities.
But on October 19 upwards of 60% of Canadians, however distracted by the noise of politicians and the media, will make a decision. Unfortunately, Andrew Coyne and the opposition parties want it to be the last time they will.
Monday, March 2, 2015
The Supreme Court of Canada makes up the law
Most Supreme Court of Canada judgments that make the news involve the Charter or the Constitution. But the Court’s judgment in Bhasin, cheerfully reported some months ago, had nothing to do with the Charter or the Constitution. It was an apparently mundane common law contract case, of no interest to anyone but the parties. Even for the parties the result must matter surprisingly little. The $87,000 in damages the Court awarded Bhasin will leave him little better off, after bearing some of the costs and the stress of 11 years of litigation, than if he had not bothered to sue. The defendant is a fair sized business for which some embarrassment may be more important than the damages and large costs is must pay.
The importance of the case is the Supreme Court of Canada ‘making law,’ something courts reportedly do, though how or why is little understood. The Court was very forward in proclaiming that new law was needed and that it would make it. The provincial legislatures are responsible for contract law under the Constitution and have passed many acts altering the common law. But why bother the legislatures when the courts stand ready to pass laws in their stead?
THE CASE
The issue in Bhasin was either quite simple, as the Alberta Court of Appeal saw it in dismissing his case in 11 pages, or wonderfully rich and obscure as the trial judge and the Supreme Court of Canada made it in 90 and 50 pages respectively.
Bhasin had a contract with Can-Am to market Can-Am’s RESPs in Alberta as an ‘enrollment director.’ He was making quite a success of it. Bhasin’s contract was not exclusive and one Hrynew had an identical contract and wanted to merge with or take over Bhasin’s business. Can-Am got on well with Hrynew, and when the Alberta Securities Commission had questions about Can-Am’s operations, it chose Hrynew to deal with the questions. Bhasin objected to Hrynew peering into his business, though there was nothing in his contract or the general law to sustain his objection. In the course of dealing with Bhasin about these matters Can-Am said some things that were not true or misleading and was less than frank with him. There was no evidence that Bhasin conducted himself differently because of that.
Bhasin’s contract was for three years, to renew automatically unless either party gave six months notice that it would not renew it. Can-Am gave Bhasin the six months notice. Bhasin had to close his business and sued.
The Court of Appeal saw it, as it might have appeared to a competent solicitor asked to review the contract, as an open and shut case. Can-Am had invoked the non-renewal term of the contract and that was an end of the matter.
The trial judge had seen it differently. In a three week trial every twist and turn of the dealings of Bhasin, Can-Am and Hrynew with each other and Bhasin’s hopes for his business had been gone into. She found that Can-Am had not dealt with Bhasin in ‘good faith’ and awarded him almost $400,000 in damages on the basis that Bhasin would have made about that if Can-Am had let his contract run until his planned retirement at age 65. As the Court of Appeal pointed out, the effect was to make a three year contract as much as a 40 to 50 year contract for a young enrollment director.
THE SUPREME COURT’S NEW LAW
The Supreme Court of Canada’s new law says that parties to a contract have a ‘duty to perform their contractual obligations honestly.’ Who could object to that? But what does it mean? One might have thought that it would mean that parties must observe the terms of the contract. If I contract with you to deliver two dozen apples on Wednesday it won’t do to deliver two dozen oranges or deliver two dozen apples on Tuesday or Thursday. And if I contract with you to clean my eaves for three years renewable subject to six months notice you must expect that I may give you notice if I think someone else would do a better job or simply don’t like the cut of your jib.
The trial judge had said the parties to a contract must act in ‘good faith,’ referring to specific requirements of good faith in specific types of contract in common law and legislation. The Supreme Court of Canada said ‘good faith’ is an ‘organising principle,’ but its new law is, as I set out above, a requirement of honest performance.
Bhasin’s lawyers argued at the trial that Can-Am had to have a ‘good reason’ not to renew his contract, which doesn’t get us very far. The trial judge neither accepted nor rejected this argument, but held that Can-Am had acted in bad faith in not renewing his contract because he refused to merge with Hrynew. This presumably was a ‘bad reason.’ But why? Can-Am presumably thought their business would do better if Hrynew and Bhasin merged and, finally, if Bhasin went and Hrynew picked up the pieces. It was surely not for the courts to second guess Can-Am’s business judgment.
The trial judge also held that the purpose of the contract was was to ‘allow Bhasin to establish and operate an agency selling Can-AmFC products.’ Well of course that was one of its purposes, but its main purpose was to set the terms on which Bhasin could sell Can-Am’s products, what he could sell, where, following which procedures, for what compensation and for how long. The trial judge implies that that must have been forever, despite the precise wording in the contract on which Can-Am relied. Was it good faith on Bhasin’s part to insist that he be kept on?
The Supreme Court of Canada refers to academic writings on ‘good faith’ expressing dissatisfaction with the requirement of good faith in specific types of contract without a general requirement of good faith. Why should there be a requirement of good faith in employment contracts, insurance contracts and franchise agreements and not in all? The answer is that in these specific types of contract, rightly or wrongly, the courts or the legislatures felt the need and gave it a meaning in the specific context.
Most of the ‘authorities’ cited by the Court were writings of law professors, some by one of Bhasin’s counsel. The Court could not base its decision on old cases or statutes. If the ‘new duty’ it proclaimed could be found in old cases it would not be new.
But law professors, resentful of their light duties in training would be lawyers, spend their well paid spare time musing on what the law should be. Standing apart from the practical world and accountable to no one, they must find fault with the law as it is, what they are supposed to know and teach, and subject it to theoretical correction. Some times, with little experience of the practice of law, they become judges. Their favoured students become clerks to judges all the way up to the Supreme Court of Canada. They mix with judges at select conferences. They review judges’ reasons as they do their students’ essays. The media unthinkingly turn to them for ‘expert’ commentary. The public think when they are telling us what they fancy the law should be that they are telling us what it is.
When courts make law, they do not set it out as legislatures would in a statute, with sections and subsections and definitions. You have to find it in their reasons for judgment. When courts are properly making law, settling an unsettled point, it is usually easy enough to do. But when they are enunciating a broad principle, as the Court does in Bhasin, it opens up endless speculation as to what the law may be or how it will apply in any specific case.
‘Hard cases make bad law’ is an oft quoted old saying. It means that in cases where sympathy may be on one side but the law on the other, courts may be tempted to change the law to suit their sympathy in the case but in doing so damage the law. It is plain that the trial judge and the Supreme Court of Canada did not like the defendants and felt sympathy for Bhasin. Whether this was fair we can’t really know, because the case was not actually about whether Can-Am was nasty and Bhasin nice and the trial might still be going on if it had been. The Court of Appeal evinced no sympathy for any of the parties and simply applied the law as it was.
The Supreme Court of Canada proclaimed its duty to ‘develop the common law to keep in step with the “dynamic and evolving fabric of our society…”’ What exactly has happened to society to demand the new law the Court has proclaimed? Was honest performance of contracts not such a good idea fifty or a hundred years ago? Or is it simply that people were so much more honest then that no legal requirement of honesty was required?
WHAT DOES IT MEAN?
The trial judge found that Can-Am had not acted in good faith in two respects:
261 … First, Can-AmFC breached the 1998 Agreement when it required Bhasin to submit to an audit by Hrynew, and when it required Bhasin to provide Hrynew with access to his business records for this purpose. Second, Can-AmFC breached the 1998 Agreement when it exercised the non-renewal provision in bad faith. Specifically, Can-AmFC used the non-renewal clause because of Bhasin’s failure to submit to an audit by Hrynew, and used the non-renewal clause to force Bhasin into a position where he had to either merge agencies with Hrynew or leave the organization. Can-AmFC acted dishonestly toward Bhasin in exercising the nonrenewal clause. This conduct amounts to a breach of the implied term of good faith by Can-AmFC.
Can-Am ‘breached the 1998 agreement’ in requiring Bhasin to submit to an audit. What provision did it breach? She doesn’t say because it did not breach any provision of the agreement. It only breached the ‘good faith’ provision that she was inventing in 2011. And what specifically that provision meant she doesn’t say except that it didn’t permit Can-Am to require Bhasin to submit to an audit by Hrynew.
And how exactly did Can-Am act dishonestly in invoking a non-renewal provision in the contract that before Bhasin’s case it was entitled to invoke at its absolute discretion?
While one can understand why Bhasin wouldn’t like a competitor whom he obviously didn’t like examining his records and would be upset at having his contract not renewed, there was no evidence that the one would have done him any harm or that the other would not have been as upsetting had it happened, as it might well have, without the long and unpleasant course of dealings between Can-Am and Bhasin that forms the basis of the trial judge’s finding of bad faith.
The trial judge’s basically concludes that Can-Am had decided to rid itself of Bhasin some time before it gave him notice of non-renewal and kept that from him.
256 … The evidence establishes that Can-AmFC decided to restructure by merging the agencies of Hrynew and Bhasin earlier than June 2000. It was certainly open to Can-AmFC in good faith to restructure its organization in Alberta.…It was also open to Can-AmFC to adopt a business strategy that did not include Bhasin’s agency. Can-AmFC certainly was not obligated under the 1998 Agreement to continue the contractual relationship forever.
257 However, Can-AmFC was obligated under the 1998 Agreement to exercise the non-renewal clause in a way that respected Bhasin’s interests to a standard of good faith - this means honestly, reasonably and fairly. This does not mean that Can-AmFC could not use the non-renewal clause to end the contractual relationship with Bhasin. A strategic decision to restructure could be a reasonable use of the non-renewal clause. Can-AmFC was obligated, however, to go about exercising the non-renewal clause and implement the restructuring in a way that respected Bhasin’s interests.…
258 Can-AmFC acted dishonestly with Bhasin throughout the events in question. Can-AmFC did not explain to Bhasin that Can-AmFC was intending to nor that it had already proposed the new structure to the ASC. Can-AmFC did not communicate to Bhasin that the decision was already made and final. Can-AmFC did not communicate with Bhasin that it was working closely with Hrynew to bring about a new corporate structure with Hrynew being the main agency in Alberta. Had Can-AmFC done so, Bhasin could have governed himself accordingly so as to retain the value in his agency throughout the process. Bhasin did not realize he was being pushed out until it was too late.
What ‘good faith’ amounts to in the instance according to the trial judge then is that a party to a contract automatically renewable subject to non-renewal on specific notice, must keep the other party apprised of its thinking on renewal and give notice of non-renewal as soon as it decides not to renew, whatever the specified notice period may be in the contract. There are obvious reasons why reasonable and honest people might not want to do that. They are stuck with the guy for however long the contract says and they’d rather he worked in hopes than knew he was for the chop and slacked off and started looking elsewhere. The whole point of such a contract as Bhasin had was to give the parties a three year’s commitment and an agreed, and reasonable, notice period if they wanted to end the relationship.
The Supreme Court of Canada referred with approval to an American case
[87]…United Roasters, Inc. v. Colgate-Palmolive Co., 649 F.2d 985 (4th Cir. 1981). The terminating party had decided in advance of the required notice period that it was going to terminate the contract. The court held that no disclosure of this intention was required other than what was stipulated in the notice requirement. The court stated:
. . . there is very little to be said in favor of a rule of law that good faith requires one possessing a right of termination to inform the other party promptly of any decision to exercise the right. A tenant under a month-to-month lease may decide in January to vacate the premises at the end of September. It is hardly to be suggested that good faith requires the tenant to inform the landlord of his decision soon after January. Though the landlord may have found earlier notice convenient, formal exercise of the right of termination in August will do. [pp. 989-90]
United Roasters makes it clear that there is no unilateral duty to disclose information relevant to termination. But the situation is quite different, as I see it, when it comes to actively misleading or deceiving the other contracting party in relation to performance of the contract.
So according to the Supreme Court of Canada you don’t have to tell someone as soon as you have decided to terminate a contract, but you mustn’t string him along, let him think everything’s OK when you really plan to terminate. Despite the trial judge’s finding, one may question whether Can-Am did actually decide to terminate Bhasin about a year before it gave notice. If that’s what the case turns on, and it may appear it does, there are two problems. When you actually decide to do something is a tricky psychological question. Some would argue you don’t actually decide to do anything until you actually do it. And at the time of the trial no one could have known that that tricky question was what the case turned on.
What does ‘Bhasin could have governed himself accordingly so as to retain the value in his agency throughout the process. Bhasin did not realize he was being pushed out until it was too late.’ mean? ‘Too late’ for what? Too late to slack off and start laying the groundwork for some other business? The trial judge is a bit vague about the terms of the contract but says they ‘suggest’ that Bhasin should ‘devote all necessary time and effort to’ selling Can-Am’s products. Had Can-Am been perfectly frank and honest with Bhasin but not renewed on the basis of a ‘strategic decision,’ in the trial judge’s phrase, how would his position have been different?
This may seem simply a question of damages. But any lawsuit is fundamentally a question of whether a wrong has caused damages. The ‘good faith’ rule cannot mean that any time a party to a contract says something untrue to another party there has been a breach of the contract and some damages must be found to vindicate the good faith obligations of the contract. If I am planning to give notice of non-renewal to you for our eaves cleaning contract but say ‘Thanks. That was a great job.’ thinking it was lousy, am I stuck with you indefinitely? The law has never made every lie actionable, else the courts would be backed up to doomsday. It is only when there has been reliance and injury and damages that the law concerns itself with untruths.
‘Can-AmFC certainly was not obligated under the 1998 Agreement to continue the contractual relationship forever.’ the trial judge says. For how long then? It couldn’t terminate the contract in November 2001 because, according to the trial judge, its decision to do so then wasn’t in ‘good faith.’ Her assessment of damages implied that it should have kept him until his retirement in 2010. But what if it had decided to let the contract run for another three years from 2001 and laid off the requirement of an audit by Hrynew and terminated the contract at the next three year anniversary in 2004. ‘ It was…open to Can-AmFC to adopt a business strategy that did not include Bhasin’s agency.’ the trial judge says. Well?
The Supreme Court of Canada says Bhasin ‘was misled and lost the value of his business as result.’ While there was evidence Bhasin was misled, there is none that he lost the value of his business as a result.
Two provisions of Bhasin’s contract would have, in the absence of the Court’s ‘new duty,’ confirmed the Court of Appeal’s straightforward reasoning. One provided that the contract could be terminated early for misconduct or other cause. That implied the Can-Am did not have to have any ‘cause’ for not renewing his contract on six months notice. Another provision allowed Bhasin to sell, transfer or merge his agency subject to Can-Am’s consent, which was not be be withheld ‘unreasonably.’ That implied that Can-Am did not have to show that its decision not to renew Bhasin’s contract was reasonable. These are standard steps in interpreting and applying the provisions of a contract. Swept aside by the new law.
THE SUPREME COURT ON A ROLL
The Supreme Court of Canada’s reasons dispense with precise analysis and seem both apologetic and arrogant. On and on they go without clarifying but insisting on both the Court’s modesty and its wisdom. It’s a new deal but no big deal.
[29] …recognition of a general duty of good faith would constitute an incremental advance in the law, given the numerous specific situations that already give rise to a duty of good faith.
[62] I conclude from this review that enunciating a general organizing principle of good faith and recognizing a duty to perform contracts honestly will help bring certainty and coherence to this area of the law in a way that is consistent with reasonable commercial expectations
[63] 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.
[69] The approach of recognizing an overarching organizing principle but accepting the existing law as the primary guide to future development is appropriate in the development of the doctrine of good faith. Good faith may be invoked in widely varying contexts and this calls for a highly context-specific understanding of what honesty and reasonableness in performance require so as to give appropriate consideration to the legitimate interests of both contracting parties. For example, the general organizing principle of good faith would likely have different implications in the context of a long-term contract of mutual cooperation than it would in a more transactional exchange:
[80] Recognizing a duty of honesty in contract performance poses no risk to commercial certainty in the law of contract. A reasonable commercial person would expect, at least, that the other party to a contract would not be dishonest about his or her performance. The duty is also clear and easy to apply. Moreover, one commentator points out that given the uncertainty that has prevailed in this area, cautious solicitors have long advised clients to take account of the requirements of good faith…
[89] for wholesale adoption of a more expansive duty of good faith in contrast to the modest, incremental change that I propose:…
[90] It is not necessary in this case to define in general terms the limits of the implications of the organizing principle of good faith. [Oh, yes it is!] This is because it is unclear to me how any broader duty would assist Mr. Bhasin here. After all, the contract was subject to non-renewal. It is a considerable stretch, as I see it, to turn even a broadly conceived duty of good faith exercise of the non-renewal provision into what is, in effect, a contract of indefinite duration. This in my view is the principal difficulty in the trial judge’s reasoning because, in the result, her decision turned a three year contract that was subject to an express provision relating to non-renewal into a contract of roughly nine years’ duration. As the Court of Appeal pointed out, in my view correctly, “[t]he parties did not intend or presume a perpetual contract, as they contracted that either party could unilaterally cause it to expire on any third anniversary”: para. 32. Even if there were a breach of a broader duty of good faith by forcing the merger, Can-Am’s contractual liability would still have to be measured by reference to the least onerous means of performance, which in this case would have meant simply not renewing the contract. Since no damages flow from this breach, it is unnecessary to decide whether reliance on a discretionary power to achieve a purpose extraneous to the contract and which undermined one of its key objectives might call for further development under the organizing principle of good faith contractual performance.
The Court’s assessment of damages is simply incomprehensible. It held, based on the the trial judge’s rambling discussion of damages, that the value of Bhasin’s business at the time his agreement expired was $87,000. What the trial judge actually said was
[419] Given all of these considerations, I find that the value for Bhasin’s agency based on a
trailing 12 month period would be $87,000.00 at the point that he turned 65.
She was thinking of what Bhasin might have sold his business for, as a still going concern, when he turned 65.
The Supreme Court says
[110] It is clear from the findings of the trial judge and from the record that the value of the business around the time of non-renewal was $87,000.
One would have thought that it was nil. It no longer existed. Any office equipment, good will from his employees and contacts and knowledge of the field he and they had, he still had and could and did employ in a new business. But Can-Am had argued that if there had to be damages $87,000 was right, that being the lowest figure under discussion, and the Supreme Court of Canada accepted its position.
The Court agreed with the Court of Appeal in rejecting the implication that the contract was for life, and in awarding Bhasin only $87,000 in damages implicitly accepted that Bhasin had no right to expect his contract to last for any considerable length of time. But it remains unfathomable what the damages from a ‘bad faith’ non-renewal were as compared to what Bhasin would have lost had his contract not been renewed in good faith.
Had Bhasin been an employee suing for wrongful dismissal, itself a dodgy cause of action invented by Victorian judges, the Court would have decided on a notice period and awarded damages, perhaps about $87,000, accordingly.
It very much appears that the Court, having exercised itself so much to make new law, could not bring itself to say that there were no damages.
WHY IT’S BAD
Those who have got this far must forgive me for taking more words than the Court of Appeal to make my points. But the trial judge’s and the Supreme Court of Canada’s reasons, which have at times the air of political speeches, defy simple analysis.
Making new law as the Supreme Court of Canada has done it is wrong because it is ex post facto law. The most competent solicitor would have advised Can-Am that it was within its rights to give notice of non-renewal. The Supreme Court of Canada says ‘one commentator points out that given the uncertainty that has prevailed in this area, cautious solicitors have long advised clients to take account of the requirements of good faith….’ I haven’t access to the 1985 lecture by ‘one commentator,’ my old tax professor Warren Grover, who one day over forty years ago remarked that being a law professor was ‘part time work for full time pay,’ but I can’t believe that he could have foreseen thirty years ago what the Supreme Court of Canada has made of good faith.
And remember that the finding of ‘bad faith’ or ‘dishonesty’ in Bhasin was based on a three week trial. So we are to think that a solicitor cannot advise a client based on a written contract but must be briefed on facts that might take three weeks to canvass at a trial.
In any event, is the Supreme Court of Canada being quite honest? If the putative ‘cautious solicitor’ would have advised Can-Am against giving notice of non-renewal after being briefed on all the circumstances, the law must have been what the Supreme Court of Canada now says it is back in 2001. Then the Supreme Court of Canada hasn’t made new law. The Court pretends it hasn’t. I has just found the law. In its head. But it says
[1]…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.
‘will make the law…’
If it is not new law, just something the Court found, but the dopes on the Court of Appeal couldn’t find, that’s alright then. The Supreme Court of Canada isn’t making new law. It’s just finding something that had been mislaid. They have a bigger and better organised library.
But the Court repeatedly says it is setting out a ‘new duty,’ asking itself ‘Should there be a new duty?’ The ‘new duty’ is new law, law that did not exist when Can-Am gave notice of non-renewal in 2001, but was imposed by the Court in 2014. The Court, in its own words, has a duty to ‘develop the common law.’ As the Court can only deal with cases where the facts are years behind, it can only ‘develop the common law’ ex post facto.
How can the ‘cautious solicitor’ know what the law is if the Alberta Court of Appeal doesn’t know? Alternatively, the cautious solicitor should always advise ‘Only the Supreme Court of Canada knows what the law is. You’ll have to ask them.’ Which makes the hundreds of dollars an hour you are paying your solicitor wasted money. And you cannot submit a reference to the Court. Only the government can. All you can do is act blindly and spend years and hundreds of thousands from first instance, to court of appeal, to the Supreme Court of Canada hoping for the best, if you are challenged.
When courts properly ‘make law’ they do so when there is no law, when there are conflicting cases or circumstance arise to which the existing law doesn’t fit. In those circumstances the cautious solicitor can advise that the law is unclear and the courts may have to make it clear.
The Supreme Court of Canada repeatedly claims that its ‘finding’ is ‘incremental,’ trying to a assure us of its modesty and caution. But in proclaiming the ‘organising principle’ of ‘good faith’ while ‘finding’ an allegedly simple duty of honest performance the Court literally invites new lawsuits that will lead to new increments, new applications of the ‘organising principle’ and offer the prospect of a law in flux as it keeps up with the ‘dynamic and evolving fabric of our society.’ That is, the negation of law.
For law is settled rules. Its value is letting us know where we stand. In the limiting case, which side of the road to drive on, though it doesn’t matter which, so long as there is a rule. Times change and the rules may best change. Sweden went from driving on the left to driving on the right in 1967 as traffic between Sweden and its neighbours became common. But we need to know what the law is before we act, which is why legislation is the business of legislatures and public debate and comes into effect on a specified date and not retroactively.
The new Chief Justice of Ontario made conventional remarks on his swearing in about the ‘cost, complexity and time it takes to complete legal proceedings.’ We are not going to get lawyers working for even what plumbers charge. But the complexity and time legal proceedings involve is very much a product of the decay of the law that the Supreme Court of Canada is promoting. If law is to be a matter of ‘organising principles’ and ‘increments’ and the exploration of everyone’s ‘good faith’ in three week trials, its ‘cost, complexity and time…to complete’ are only going to become greater.
TECHNICALITIES SHMECTICALITIES
An apparently technical but suggestive issue discussed at all three levels was the pleadings. Pleadings are documents in which the parties set out their case, a statement of claim and a statement of defence. You plead facts, not the evidence by which you hope to prove the facts. You don’t plead law, or make a legal argument. You don’t have to give your cause of action a name. But if your facts don’t form the basis of an action known to the law your case can be dismissed. If I issue a statement of claim saying you wore a hideous tie to my dinner party and claiming damages, you don’t have to prove that your tie was decent. You can move to have my action dismissed on the pleadings and will succeed. Pleadings save everyone the trouble and expense of frivolous actions and also serve to let the parties know what the case is about, what evidence they may have to marshal and what legal arguments they may have to prepare.
The trial judge and the Supreme Court of Canada held that Bhasin had plead enough to raise the issue of good faith, or honesty, whatever, which given the vagueness of the concepts could be said of almost any pleading. And they said that Can-Am was not prejudiced by the unpredictable course of the trial because basically the whole relationship between Bhasin and Can-Am was put into play in the Statement of Claim. This may be true. Can-Am made no motion to attack the pleadings.
The Court of Appeal said
[19] Carefully checking the statement of claim confirms one complaint by Mr. Hrynew. He
complains that the issues on which the Reasons for Judgment were based were never pleaded. The trial Reasons correctly stated that causes of action need not be pleaded, only facts (paras 24-25). However, the majority of the facts upon which the Reasons based those conclusions were not pled either. An allegation that the respondent Mr. Bhasin was “wrongfully terminated” is a conclusion, not a fact. The Reasons found for the respondent Mr. Bhasin on the basis of bad faith and dishonesty toward him. But old R 115 and new R 13.6(3) require a party to plead the matter to be relied on where there is illegality, fraud, malice or ill will, or wilful default.
[20] Therefore, all the evidence was heard before Canadian American had a clear idea of the case against it. No one asked to amend the pleadings. Canadian American objected to raising some of the issues because they had not been pleaded (Reasons, para 21). Evidence closed before anyone argued the topics on which the Reasons proceeded.
The point of pleadings is to see whether there is any case for trial assuming the facts and then to focus the preparation for trail and the trial on those facts. But courts are increasingly reluctant to dispose of cases on the pleadings and to hold parties strictly to the pleadings at trial. Thus the “cost, complexity and time it takes to complete legal proceedings” are increased.
Bhasin’s case should have been dismissed before trial. He and the other parties would have been happier had it been, and we should all be better off.
WHO CARES?
There are many critics of the Supreme Court of Canada’s Charter or Constitution decisions, though most people suppose it knows what it is doing as they are told it does by law professors in the media. But there are few who will criticise the Court for its work in a case like Bhasin. For law firms it is good for business. They can report it to their clients to show that they are keeping up with the law and how much they are needed. Longer lawsuits and more meetings with clients unsure of their rights and duties will help the bottom line. Law professors, of course, are simply chuffed to see their influence.
The importance of the case is the Supreme Court of Canada ‘making law,’ something courts reportedly do, though how or why is little understood. The Court was very forward in proclaiming that new law was needed and that it would make it. The provincial legislatures are responsible for contract law under the Constitution and have passed many acts altering the common law. But why bother the legislatures when the courts stand ready to pass laws in their stead?
THE CASE
The issue in Bhasin was either quite simple, as the Alberta Court of Appeal saw it in dismissing his case in 11 pages, or wonderfully rich and obscure as the trial judge and the Supreme Court of Canada made it in 90 and 50 pages respectively.
Bhasin had a contract with Can-Am to market Can-Am’s RESPs in Alberta as an ‘enrollment director.’ He was making quite a success of it. Bhasin’s contract was not exclusive and one Hrynew had an identical contract and wanted to merge with or take over Bhasin’s business. Can-Am got on well with Hrynew, and when the Alberta Securities Commission had questions about Can-Am’s operations, it chose Hrynew to deal with the questions. Bhasin objected to Hrynew peering into his business, though there was nothing in his contract or the general law to sustain his objection. In the course of dealing with Bhasin about these matters Can-Am said some things that were not true or misleading and was less than frank with him. There was no evidence that Bhasin conducted himself differently because of that.
Bhasin’s contract was for three years, to renew automatically unless either party gave six months notice that it would not renew it. Can-Am gave Bhasin the six months notice. Bhasin had to close his business and sued.
The Court of Appeal saw it, as it might have appeared to a competent solicitor asked to review the contract, as an open and shut case. Can-Am had invoked the non-renewal term of the contract and that was an end of the matter.
The trial judge had seen it differently. In a three week trial every twist and turn of the dealings of Bhasin, Can-Am and Hrynew with each other and Bhasin’s hopes for his business had been gone into. She found that Can-Am had not dealt with Bhasin in ‘good faith’ and awarded him almost $400,000 in damages on the basis that Bhasin would have made about that if Can-Am had let his contract run until his planned retirement at age 65. As the Court of Appeal pointed out, the effect was to make a three year contract as much as a 40 to 50 year contract for a young enrollment director.
THE SUPREME COURT’S NEW LAW
The Supreme Court of Canada’s new law says that parties to a contract have a ‘duty to perform their contractual obligations honestly.’ Who could object to that? But what does it mean? One might have thought that it would mean that parties must observe the terms of the contract. If I contract with you to deliver two dozen apples on Wednesday it won’t do to deliver two dozen oranges or deliver two dozen apples on Tuesday or Thursday. And if I contract with you to clean my eaves for three years renewable subject to six months notice you must expect that I may give you notice if I think someone else would do a better job or simply don’t like the cut of your jib.
The trial judge had said the parties to a contract must act in ‘good faith,’ referring to specific requirements of good faith in specific types of contract in common law and legislation. The Supreme Court of Canada said ‘good faith’ is an ‘organising principle,’ but its new law is, as I set out above, a requirement of honest performance.
Bhasin’s lawyers argued at the trial that Can-Am had to have a ‘good reason’ not to renew his contract, which doesn’t get us very far. The trial judge neither accepted nor rejected this argument, but held that Can-Am had acted in bad faith in not renewing his contract because he refused to merge with Hrynew. This presumably was a ‘bad reason.’ But why? Can-Am presumably thought their business would do better if Hrynew and Bhasin merged and, finally, if Bhasin went and Hrynew picked up the pieces. It was surely not for the courts to second guess Can-Am’s business judgment.
The trial judge also held that the purpose of the contract was was to ‘allow Bhasin to establish and operate an agency selling Can-AmFC products.’ Well of course that was one of its purposes, but its main purpose was to set the terms on which Bhasin could sell Can-Am’s products, what he could sell, where, following which procedures, for what compensation and for how long. The trial judge implies that that must have been forever, despite the precise wording in the contract on which Can-Am relied. Was it good faith on Bhasin’s part to insist that he be kept on?
The Supreme Court of Canada refers to academic writings on ‘good faith’ expressing dissatisfaction with the requirement of good faith in specific types of contract without a general requirement of good faith. Why should there be a requirement of good faith in employment contracts, insurance contracts and franchise agreements and not in all? The answer is that in these specific types of contract, rightly or wrongly, the courts or the legislatures felt the need and gave it a meaning in the specific context.
Most of the ‘authorities’ cited by the Court were writings of law professors, some by one of Bhasin’s counsel. The Court could not base its decision on old cases or statutes. If the ‘new duty’ it proclaimed could be found in old cases it would not be new.
But law professors, resentful of their light duties in training would be lawyers, spend their well paid spare time musing on what the law should be. Standing apart from the practical world and accountable to no one, they must find fault with the law as it is, what they are supposed to know and teach, and subject it to theoretical correction. Some times, with little experience of the practice of law, they become judges. Their favoured students become clerks to judges all the way up to the Supreme Court of Canada. They mix with judges at select conferences. They review judges’ reasons as they do their students’ essays. The media unthinkingly turn to them for ‘expert’ commentary. The public think when they are telling us what they fancy the law should be that they are telling us what it is.
When courts make law, they do not set it out as legislatures would in a statute, with sections and subsections and definitions. You have to find it in their reasons for judgment. When courts are properly making law, settling an unsettled point, it is usually easy enough to do. But when they are enunciating a broad principle, as the Court does in Bhasin, it opens up endless speculation as to what the law may be or how it will apply in any specific case.
‘Hard cases make bad law’ is an oft quoted old saying. It means that in cases where sympathy may be on one side but the law on the other, courts may be tempted to change the law to suit their sympathy in the case but in doing so damage the law. It is plain that the trial judge and the Supreme Court of Canada did not like the defendants and felt sympathy for Bhasin. Whether this was fair we can’t really know, because the case was not actually about whether Can-Am was nasty and Bhasin nice and the trial might still be going on if it had been. The Court of Appeal evinced no sympathy for any of the parties and simply applied the law as it was.
The Supreme Court of Canada proclaimed its duty to ‘develop the common law to keep in step with the “dynamic and evolving fabric of our society…”’ What exactly has happened to society to demand the new law the Court has proclaimed? Was honest performance of contracts not such a good idea fifty or a hundred years ago? Or is it simply that people were so much more honest then that no legal requirement of honesty was required?
WHAT DOES IT MEAN?
The trial judge found that Can-Am had not acted in good faith in two respects:
261 … First, Can-AmFC breached the 1998 Agreement when it required Bhasin to submit to an audit by Hrynew, and when it required Bhasin to provide Hrynew with access to his business records for this purpose. Second, Can-AmFC breached the 1998 Agreement when it exercised the non-renewal provision in bad faith. Specifically, Can-AmFC used the non-renewal clause because of Bhasin’s failure to submit to an audit by Hrynew, and used the non-renewal clause to force Bhasin into a position where he had to either merge agencies with Hrynew or leave the organization. Can-AmFC acted dishonestly toward Bhasin in exercising the nonrenewal clause. This conduct amounts to a breach of the implied term of good faith by Can-AmFC.
Can-Am ‘breached the 1998 agreement’ in requiring Bhasin to submit to an audit. What provision did it breach? She doesn’t say because it did not breach any provision of the agreement. It only breached the ‘good faith’ provision that she was inventing in 2011. And what specifically that provision meant she doesn’t say except that it didn’t permit Can-Am to require Bhasin to submit to an audit by Hrynew.
And how exactly did Can-Am act dishonestly in invoking a non-renewal provision in the contract that before Bhasin’s case it was entitled to invoke at its absolute discretion?
While one can understand why Bhasin wouldn’t like a competitor whom he obviously didn’t like examining his records and would be upset at having his contract not renewed, there was no evidence that the one would have done him any harm or that the other would not have been as upsetting had it happened, as it might well have, without the long and unpleasant course of dealings between Can-Am and Bhasin that forms the basis of the trial judge’s finding of bad faith.
The trial judge’s basically concludes that Can-Am had decided to rid itself of Bhasin some time before it gave him notice of non-renewal and kept that from him.
256 … The evidence establishes that Can-AmFC decided to restructure by merging the agencies of Hrynew and Bhasin earlier than June 2000. It was certainly open to Can-AmFC in good faith to restructure its organization in Alberta.…It was also open to Can-AmFC to adopt a business strategy that did not include Bhasin’s agency. Can-AmFC certainly was not obligated under the 1998 Agreement to continue the contractual relationship forever.
257 However, Can-AmFC was obligated under the 1998 Agreement to exercise the non-renewal clause in a way that respected Bhasin’s interests to a standard of good faith - this means honestly, reasonably and fairly. This does not mean that Can-AmFC could not use the non-renewal clause to end the contractual relationship with Bhasin. A strategic decision to restructure could be a reasonable use of the non-renewal clause. Can-AmFC was obligated, however, to go about exercising the non-renewal clause and implement the restructuring in a way that respected Bhasin’s interests.…
258 Can-AmFC acted dishonestly with Bhasin throughout the events in question. Can-AmFC did not explain to Bhasin that Can-AmFC was intending to nor that it had already proposed the new structure to the ASC. Can-AmFC did not communicate to Bhasin that the decision was already made and final. Can-AmFC did not communicate with Bhasin that it was working closely with Hrynew to bring about a new corporate structure with Hrynew being the main agency in Alberta. Had Can-AmFC done so, Bhasin could have governed himself accordingly so as to retain the value in his agency throughout the process. Bhasin did not realize he was being pushed out until it was too late.
What ‘good faith’ amounts to in the instance according to the trial judge then is that a party to a contract automatically renewable subject to non-renewal on specific notice, must keep the other party apprised of its thinking on renewal and give notice of non-renewal as soon as it decides not to renew, whatever the specified notice period may be in the contract. There are obvious reasons why reasonable and honest people might not want to do that. They are stuck with the guy for however long the contract says and they’d rather he worked in hopes than knew he was for the chop and slacked off and started looking elsewhere. The whole point of such a contract as Bhasin had was to give the parties a three year’s commitment and an agreed, and reasonable, notice period if they wanted to end the relationship.
The Supreme Court of Canada referred with approval to an American case
[87]…United Roasters, Inc. v. Colgate-Palmolive Co., 649 F.2d 985 (4th Cir. 1981). The terminating party had decided in advance of the required notice period that it was going to terminate the contract. The court held that no disclosure of this intention was required other than what was stipulated in the notice requirement. The court stated:
. . . there is very little to be said in favor of a rule of law that good faith requires one possessing a right of termination to inform the other party promptly of any decision to exercise the right. A tenant under a month-to-month lease may decide in January to vacate the premises at the end of September. It is hardly to be suggested that good faith requires the tenant to inform the landlord of his decision soon after January. Though the landlord may have found earlier notice convenient, formal exercise of the right of termination in August will do. [pp. 989-90]
United Roasters makes it clear that there is no unilateral duty to disclose information relevant to termination. But the situation is quite different, as I see it, when it comes to actively misleading or deceiving the other contracting party in relation to performance of the contract.
So according to the Supreme Court of Canada you don’t have to tell someone as soon as you have decided to terminate a contract, but you mustn’t string him along, let him think everything’s OK when you really plan to terminate. Despite the trial judge’s finding, one may question whether Can-Am did actually decide to terminate Bhasin about a year before it gave notice. If that’s what the case turns on, and it may appear it does, there are two problems. When you actually decide to do something is a tricky psychological question. Some would argue you don’t actually decide to do anything until you actually do it. And at the time of the trial no one could have known that that tricky question was what the case turned on.
What does ‘Bhasin could have governed himself accordingly so as to retain the value in his agency throughout the process. Bhasin did not realize he was being pushed out until it was too late.’ mean? ‘Too late’ for what? Too late to slack off and start laying the groundwork for some other business? The trial judge is a bit vague about the terms of the contract but says they ‘suggest’ that Bhasin should ‘devote all necessary time and effort to’ selling Can-Am’s products. Had Can-Am been perfectly frank and honest with Bhasin but not renewed on the basis of a ‘strategic decision,’ in the trial judge’s phrase, how would his position have been different?
This may seem simply a question of damages. But any lawsuit is fundamentally a question of whether a wrong has caused damages. The ‘good faith’ rule cannot mean that any time a party to a contract says something untrue to another party there has been a breach of the contract and some damages must be found to vindicate the good faith obligations of the contract. If I am planning to give notice of non-renewal to you for our eaves cleaning contract but say ‘Thanks. That was a great job.’ thinking it was lousy, am I stuck with you indefinitely? The law has never made every lie actionable, else the courts would be backed up to doomsday. It is only when there has been reliance and injury and damages that the law concerns itself with untruths.
‘Can-AmFC certainly was not obligated under the 1998 Agreement to continue the contractual relationship forever.’ the trial judge says. For how long then? It couldn’t terminate the contract in November 2001 because, according to the trial judge, its decision to do so then wasn’t in ‘good faith.’ Her assessment of damages implied that it should have kept him until his retirement in 2010. But what if it had decided to let the contract run for another three years from 2001 and laid off the requirement of an audit by Hrynew and terminated the contract at the next three year anniversary in 2004. ‘ It was…open to Can-AmFC to adopt a business strategy that did not include Bhasin’s agency.’ the trial judge says. Well?
The Supreme Court of Canada says Bhasin ‘was misled and lost the value of his business as result.’ While there was evidence Bhasin was misled, there is none that he lost the value of his business as a result.
Two provisions of Bhasin’s contract would have, in the absence of the Court’s ‘new duty,’ confirmed the Court of Appeal’s straightforward reasoning. One provided that the contract could be terminated early for misconduct or other cause. That implied the Can-Am did not have to have any ‘cause’ for not renewing his contract on six months notice. Another provision allowed Bhasin to sell, transfer or merge his agency subject to Can-Am’s consent, which was not be be withheld ‘unreasonably.’ That implied that Can-Am did not have to show that its decision not to renew Bhasin’s contract was reasonable. These are standard steps in interpreting and applying the provisions of a contract. Swept aside by the new law.
THE SUPREME COURT ON A ROLL
The Supreme Court of Canada’s reasons dispense with precise analysis and seem both apologetic and arrogant. On and on they go without clarifying but insisting on both the Court’s modesty and its wisdom. It’s a new deal but no big deal.
[29] …recognition of a general duty of good faith would constitute an incremental advance in the law, given the numerous specific situations that already give rise to a duty of good faith.
[62] I conclude from this review that enunciating a general organizing principle of good faith and recognizing a duty to perform contracts honestly will help bring certainty and coherence to this area of the law in a way that is consistent with reasonable commercial expectations
[63] 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.
[69] The approach of recognizing an overarching organizing principle but accepting the existing law as the primary guide to future development is appropriate in the development of the doctrine of good faith. Good faith may be invoked in widely varying contexts and this calls for a highly context-specific understanding of what honesty and reasonableness in performance require so as to give appropriate consideration to the legitimate interests of both contracting parties. For example, the general organizing principle of good faith would likely have different implications in the context of a long-term contract of mutual cooperation than it would in a more transactional exchange:
[80] Recognizing a duty of honesty in contract performance poses no risk to commercial certainty in the law of contract. A reasonable commercial person would expect, at least, that the other party to a contract would not be dishonest about his or her performance. The duty is also clear and easy to apply. Moreover, one commentator points out that given the uncertainty that has prevailed in this area, cautious solicitors have long advised clients to take account of the requirements of good faith…
[89] for wholesale adoption of a more expansive duty of good faith in contrast to the modest, incremental change that I propose:…
[90] It is not necessary in this case to define in general terms the limits of the implications of the organizing principle of good faith. [Oh, yes it is!] This is because it is unclear to me how any broader duty would assist Mr. Bhasin here. After all, the contract was subject to non-renewal. It is a considerable stretch, as I see it, to turn even a broadly conceived duty of good faith exercise of the non-renewal provision into what is, in effect, a contract of indefinite duration. This in my view is the principal difficulty in the trial judge’s reasoning because, in the result, her decision turned a three year contract that was subject to an express provision relating to non-renewal into a contract of roughly nine years’ duration. As the Court of Appeal pointed out, in my view correctly, “[t]he parties did not intend or presume a perpetual contract, as they contracted that either party could unilaterally cause it to expire on any third anniversary”: para. 32. Even if there were a breach of a broader duty of good faith by forcing the merger, Can-Am’s contractual liability would still have to be measured by reference to the least onerous means of performance, which in this case would have meant simply not renewing the contract. Since no damages flow from this breach, it is unnecessary to decide whether reliance on a discretionary power to achieve a purpose extraneous to the contract and which undermined one of its key objectives might call for further development under the organizing principle of good faith contractual performance.
The Court’s assessment of damages is simply incomprehensible. It held, based on the the trial judge’s rambling discussion of damages, that the value of Bhasin’s business at the time his agreement expired was $87,000. What the trial judge actually said was
[419] Given all of these considerations, I find that the value for Bhasin’s agency based on a
trailing 12 month period would be $87,000.00 at the point that he turned 65.
She was thinking of what Bhasin might have sold his business for, as a still going concern, when he turned 65.
The Supreme Court says
[110] It is clear from the findings of the trial judge and from the record that the value of the business around the time of non-renewal was $87,000.
One would have thought that it was nil. It no longer existed. Any office equipment, good will from his employees and contacts and knowledge of the field he and they had, he still had and could and did employ in a new business. But Can-Am had argued that if there had to be damages $87,000 was right, that being the lowest figure under discussion, and the Supreme Court of Canada accepted its position.
The Court agreed with the Court of Appeal in rejecting the implication that the contract was for life, and in awarding Bhasin only $87,000 in damages implicitly accepted that Bhasin had no right to expect his contract to last for any considerable length of time. But it remains unfathomable what the damages from a ‘bad faith’ non-renewal were as compared to what Bhasin would have lost had his contract not been renewed in good faith.
Had Bhasin been an employee suing for wrongful dismissal, itself a dodgy cause of action invented by Victorian judges, the Court would have decided on a notice period and awarded damages, perhaps about $87,000, accordingly.
It very much appears that the Court, having exercised itself so much to make new law, could not bring itself to say that there were no damages.
WHY IT’S BAD
Those who have got this far must forgive me for taking more words than the Court of Appeal to make my points. But the trial judge’s and the Supreme Court of Canada’s reasons, which have at times the air of political speeches, defy simple analysis.
Making new law as the Supreme Court of Canada has done it is wrong because it is ex post facto law. The most competent solicitor would have advised Can-Am that it was within its rights to give notice of non-renewal. The Supreme Court of Canada says ‘one commentator points out that given the uncertainty that has prevailed in this area, cautious solicitors have long advised clients to take account of the requirements of good faith….’ I haven’t access to the 1985 lecture by ‘one commentator,’ my old tax professor Warren Grover, who one day over forty years ago remarked that being a law professor was ‘part time work for full time pay,’ but I can’t believe that he could have foreseen thirty years ago what the Supreme Court of Canada has made of good faith.
And remember that the finding of ‘bad faith’ or ‘dishonesty’ in Bhasin was based on a three week trial. So we are to think that a solicitor cannot advise a client based on a written contract but must be briefed on facts that might take three weeks to canvass at a trial.
In any event, is the Supreme Court of Canada being quite honest? If the putative ‘cautious solicitor’ would have advised Can-Am against giving notice of non-renewal after being briefed on all the circumstances, the law must have been what the Supreme Court of Canada now says it is back in 2001. Then the Supreme Court of Canada hasn’t made new law. The Court pretends it hasn’t. I has just found the law. In its head. But it says
[1]…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.
‘will make the law…’
If it is not new law, just something the Court found, but the dopes on the Court of Appeal couldn’t find, that’s alright then. The Supreme Court of Canada isn’t making new law. It’s just finding something that had been mislaid. They have a bigger and better organised library.
But the Court repeatedly says it is setting out a ‘new duty,’ asking itself ‘Should there be a new duty?’ The ‘new duty’ is new law, law that did not exist when Can-Am gave notice of non-renewal in 2001, but was imposed by the Court in 2014. The Court, in its own words, has a duty to ‘develop the common law.’ As the Court can only deal with cases where the facts are years behind, it can only ‘develop the common law’ ex post facto.
How can the ‘cautious solicitor’ know what the law is if the Alberta Court of Appeal doesn’t know? Alternatively, the cautious solicitor should always advise ‘Only the Supreme Court of Canada knows what the law is. You’ll have to ask them.’ Which makes the hundreds of dollars an hour you are paying your solicitor wasted money. And you cannot submit a reference to the Court. Only the government can. All you can do is act blindly and spend years and hundreds of thousands from first instance, to court of appeal, to the Supreme Court of Canada hoping for the best, if you are challenged.
When courts properly ‘make law’ they do so when there is no law, when there are conflicting cases or circumstance arise to which the existing law doesn’t fit. In those circumstances the cautious solicitor can advise that the law is unclear and the courts may have to make it clear.
The Supreme Court of Canada repeatedly claims that its ‘finding’ is ‘incremental,’ trying to a assure us of its modesty and caution. But in proclaiming the ‘organising principle’ of ‘good faith’ while ‘finding’ an allegedly simple duty of honest performance the Court literally invites new lawsuits that will lead to new increments, new applications of the ‘organising principle’ and offer the prospect of a law in flux as it keeps up with the ‘dynamic and evolving fabric of our society.’ That is, the negation of law.
For law is settled rules. Its value is letting us know where we stand. In the limiting case, which side of the road to drive on, though it doesn’t matter which, so long as there is a rule. Times change and the rules may best change. Sweden went from driving on the left to driving on the right in 1967 as traffic between Sweden and its neighbours became common. But we need to know what the law is before we act, which is why legislation is the business of legislatures and public debate and comes into effect on a specified date and not retroactively.
The new Chief Justice of Ontario made conventional remarks on his swearing in about the ‘cost, complexity and time it takes to complete legal proceedings.’ We are not going to get lawyers working for even what plumbers charge. But the complexity and time legal proceedings involve is very much a product of the decay of the law that the Supreme Court of Canada is promoting. If law is to be a matter of ‘organising principles’ and ‘increments’ and the exploration of everyone’s ‘good faith’ in three week trials, its ‘cost, complexity and time…to complete’ are only going to become greater.
TECHNICALITIES SHMECTICALITIES
An apparently technical but suggestive issue discussed at all three levels was the pleadings. Pleadings are documents in which the parties set out their case, a statement of claim and a statement of defence. You plead facts, not the evidence by which you hope to prove the facts. You don’t plead law, or make a legal argument. You don’t have to give your cause of action a name. But if your facts don’t form the basis of an action known to the law your case can be dismissed. If I issue a statement of claim saying you wore a hideous tie to my dinner party and claiming damages, you don’t have to prove that your tie was decent. You can move to have my action dismissed on the pleadings and will succeed. Pleadings save everyone the trouble and expense of frivolous actions and also serve to let the parties know what the case is about, what evidence they may have to marshal and what legal arguments they may have to prepare.
The trial judge and the Supreme Court of Canada held that Bhasin had plead enough to raise the issue of good faith, or honesty, whatever, which given the vagueness of the concepts could be said of almost any pleading. And they said that Can-Am was not prejudiced by the unpredictable course of the trial because basically the whole relationship between Bhasin and Can-Am was put into play in the Statement of Claim. This may be true. Can-Am made no motion to attack the pleadings.
The Court of Appeal said
[19] Carefully checking the statement of claim confirms one complaint by Mr. Hrynew. He
complains that the issues on which the Reasons for Judgment were based were never pleaded. The trial Reasons correctly stated that causes of action need not be pleaded, only facts (paras 24-25). However, the majority of the facts upon which the Reasons based those conclusions were not pled either. An allegation that the respondent Mr. Bhasin was “wrongfully terminated” is a conclusion, not a fact. The Reasons found for the respondent Mr. Bhasin on the basis of bad faith and dishonesty toward him. But old R 115 and new R 13.6(3) require a party to plead the matter to be relied on where there is illegality, fraud, malice or ill will, or wilful default.
[20] Therefore, all the evidence was heard before Canadian American had a clear idea of the case against it. No one asked to amend the pleadings. Canadian American objected to raising some of the issues because they had not been pleaded (Reasons, para 21). Evidence closed before anyone argued the topics on which the Reasons proceeded.
The point of pleadings is to see whether there is any case for trial assuming the facts and then to focus the preparation for trail and the trial on those facts. But courts are increasingly reluctant to dispose of cases on the pleadings and to hold parties strictly to the pleadings at trial. Thus the “cost, complexity and time it takes to complete legal proceedings” are increased.
Bhasin’s case should have been dismissed before trial. He and the other parties would have been happier had it been, and we should all be better off.
WHO CARES?
There are many critics of the Supreme Court of Canada’s Charter or Constitution decisions, though most people suppose it knows what it is doing as they are told it does by law professors in the media. But there are few who will criticise the Court for its work in a case like Bhasin. For law firms it is good for business. They can report it to their clients to show that they are keeping up with the law and how much they are needed. Longer lawsuits and more meetings with clients unsure of their rights and duties will help the bottom line. Law professors, of course, are simply chuffed to see their influence.
Thursday, December 18, 2014
Chong's Reform Act a year on
Just over a year ago Michael Chong’s Reform Act was introduced in the Commons to widespread acclaim.
It has now passed through the Commons Committee on Procedure and House Affairs. Many hope that it will pass into law but many feel it has been gutted.
As I explained a year ago, it never had any guts. Or rather its premise was that MPs haven’t the guts to fulfill their role under the constitution and choose their leaders, but must be the slaves of their party.
All of the dictatorial power of party leaders of which so many complain stems from the idea that a leader is not responsible to the MPs elected by the voters but to a party that only has any reality when its fluctuating membership is cumbersomely convened, perhaps once a year.
Chong agreed to amendments leaving it up to the parties to decide who should certify their candidates at elections and making the provisions for an MP instigated leadership review and MPs’ control of caucuses voluntary.
The votes on these amendments followed strict party lines and comment has chosen to see this as Harper putting the fix in.
But opposition MPs questioning Chong before the Committee evinced concern that MPs should be able to set aside a leader chosen by their party and that parties would not be able to control nominations to assure that voters be presented with the politically correct choices. That is, the NDP wants affirmative action in nominations.
Before the Committee Chong claimed that there is confusion about MPs’ say on their leaders. As if some people think that MPs are bound by law or convention to follow the leader chosen by their party. If some, wrongly, think that, Chong only encourages them to.
Even as amended, Chong’s bill is a further step to entrenching parties as a legal part of the constitution.
On my research the only legal definition of a party is under the Canada Elections Act, for election finance purposes. Elsewhere, in Commons rules for example, their existence is assumed, but they have no formal power. The Speaker does not recognise Mulcair as leader of the NDP because he has received an order from the New Democratic Party, but because so many MPs recognise him as such.
Chong’s attempt to liberate MPs continues to be based on legal recognition that they are party creatures.
How confused we have become, about quite simple matters, is illustrated by a recent column by the Master of Massey College. Hugh Segal argues that NDP MLAs in Manitoba who want Greg Selinger to step down while the party chooses a new leader are dissing responsible government and the Westminster model.
But Selinger evidently no longer has the confidence of the majority of the legislature. He only remains Premier because the NDP MLAs have farmed out the choice of his successor to their party.
That is an affront to responsible government and the Westminster model.
One that Michael Chong's efforts encourages.
It has now passed through the Commons Committee on Procedure and House Affairs. Many hope that it will pass into law but many feel it has been gutted.
As I explained a year ago, it never had any guts. Or rather its premise was that MPs haven’t the guts to fulfill their role under the constitution and choose their leaders, but must be the slaves of their party.
All of the dictatorial power of party leaders of which so many complain stems from the idea that a leader is not responsible to the MPs elected by the voters but to a party that only has any reality when its fluctuating membership is cumbersomely convened, perhaps once a year.
Chong agreed to amendments leaving it up to the parties to decide who should certify their candidates at elections and making the provisions for an MP instigated leadership review and MPs’ control of caucuses voluntary.
The votes on these amendments followed strict party lines and comment has chosen to see this as Harper putting the fix in.
But opposition MPs questioning Chong before the Committee evinced concern that MPs should be able to set aside a leader chosen by their party and that parties would not be able to control nominations to assure that voters be presented with the politically correct choices. That is, the NDP wants affirmative action in nominations.
Before the Committee Chong claimed that there is confusion about MPs’ say on their leaders. As if some people think that MPs are bound by law or convention to follow the leader chosen by their party. If some, wrongly, think that, Chong only encourages them to.
Even as amended, Chong’s bill is a further step to entrenching parties as a legal part of the constitution.
On my research the only legal definition of a party is under the Canada Elections Act, for election finance purposes. Elsewhere, in Commons rules for example, their existence is assumed, but they have no formal power. The Speaker does not recognise Mulcair as leader of the NDP because he has received an order from the New Democratic Party, but because so many MPs recognise him as such.
Chong’s attempt to liberate MPs continues to be based on legal recognition that they are party creatures.
How confused we have become, about quite simple matters, is illustrated by a recent column by the Master of Massey College. Hugh Segal argues that NDP MLAs in Manitoba who want Greg Selinger to step down while the party chooses a new leader are dissing responsible government and the Westminster model.
But Selinger evidently no longer has the confidence of the majority of the legislature. He only remains Premier because the NDP MLAs have farmed out the choice of his successor to their party.
That is an affront to responsible government and the Westminster model.
One that Michael Chong's efforts encourages.
Saturday, December 13, 2014
The Process! The Process!
Finally, a Supreme Court of Canada appointment made in the good old fashioned way. The way Dickson, Laskin, Cartrwright, Tascherau, Duff and 90% of the others were appointed. No Supreme Court Of Canada Selection Panel of MPs. No phoney appearance before a committee of MPs. The Prime Minister and the Minister of Justice confidentially consulted all who might have ideas on who might be suitable. Prospects were confidentially consulted as to their willingness to serve. And Suzanne Coté was chosen to general acclaim.
But oh the usual suspects are unhappy! The process! The process! The routinely invoked scare word ’secret’ was invoked again. Law professors squawked. Editorial boards harrumphed. How, we are asked, can we have confidence in the Supreme Court of Canada without an ‘open and transparent process’ for appointments?
What evidence is there that we lack confidence in the Court? Its judgments, whether popular or unpopular or just puzzling, are reverently received and respectfully reviewed. Only those agitating for a new process claim our confidence in the Court needs bolstering.
And just how much confidence should we have in the Court? The Court seems confident enough. Neither its judgments nor its way of expressing itself could be called timid. Perhaps we should do well to reflect that the judges are just humans like the rest of us and no process can assure us that they will be so many Solomons.
What exactly the process agitators want is not clear and they could not agree amongst themselves. The demand for openness and transparency would lead at its extreme to the claim that we should elect the judges. But nobody has argued that in Canada for many years.
A halfway house would be some kind of parliamentary confirmation in pathetic emulation of the American model. Senate confirmation could fairly be claimed to have undermined confidence in Supreme Court of the United States in recent decades. In any event, parliamentary confirmation in Canada would require a constitutional amendment and we can’t go there.
The agitators seemed to enjoy the process of the the Supreme Court Of Canada Selection Panel and the appearance of the appointee before a parliamentary committee. But the Selection Panel was either of little importance or unconstitutional, shifting at least some of the power of appointment from the Governor General, with whom it lies under the Constitution, to an ad hoc group of MPs who have no role under the Constitution. The Supreme Court showed in the Senate Reference that it would not accept dodges that would practically change the Constitution without express amendment.
The committee appearance was a complete sham, a pretence of openness when the appointment was already a done deal. Nobody knew what the MPs were supposed to be doing in questioning the incoming judge and they had to be instructed like school children on how to behave themselves.
For all the talk of openness and transparency much of the impetus behind the process agitation seems to be resentment that the Prime Minister gets to appoint the judges. In much of Europe, and now even in the United Kingdom, judges are chosen by august bodies with very little openness and transparency. Most people have no idea how judges are chosen. The result is often that judges choose the judges, with an assist from law professors, something that agitating law professors can warm to.
Under such as system no one is responsible for who become judges. In Canada it is still clear. The government is responsible. If you don’t like their choices you can turf it out.
For the most part even the agitators have not objected to Stephen Harper’s appointments, have even welcomed them, while continuing to witter.
Diehards still hallucinate a Harper Court while his appointees hand him what are reported as one defeat after another.
Coté will be Harper’s last appointment before the next election. But after seven Harper Supreme Court appointments the last reason you could have for not wanting another Harper government is fear of a Harper Court.
The general cry that we should all have our say on who gets to sit on the Supreme Court drew out a few who objected that Coté had litigated cases vigorously in accordance with her instructions.
The half baked process started by Paul Martin and fitfully continued by Stephen Harper may have made some difference. But only by discouraging one or two good judges from serving.
It has done no good and nothing better has been proposed.
We must hope that the Coté will set a precedent for a return to normalcy. We cannot hope that the agitators will dry up.
I have myself very qualified confidence in the Supreme Court of Canada. But I see no solution in better appointments however made. The way to a solution lies in understanding what judges should do and what they are doing, in sorting out the law schools and turning away from our obsession with the politicised American courts and the process by which judges are appointed.
But oh the usual suspects are unhappy! The process! The process! The routinely invoked scare word ’secret’ was invoked again. Law professors squawked. Editorial boards harrumphed. How, we are asked, can we have confidence in the Supreme Court of Canada without an ‘open and transparent process’ for appointments?
What evidence is there that we lack confidence in the Court? Its judgments, whether popular or unpopular or just puzzling, are reverently received and respectfully reviewed. Only those agitating for a new process claim our confidence in the Court needs bolstering.
And just how much confidence should we have in the Court? The Court seems confident enough. Neither its judgments nor its way of expressing itself could be called timid. Perhaps we should do well to reflect that the judges are just humans like the rest of us and no process can assure us that they will be so many Solomons.
What exactly the process agitators want is not clear and they could not agree amongst themselves. The demand for openness and transparency would lead at its extreme to the claim that we should elect the judges. But nobody has argued that in Canada for many years.
A halfway house would be some kind of parliamentary confirmation in pathetic emulation of the American model. Senate confirmation could fairly be claimed to have undermined confidence in Supreme Court of the United States in recent decades. In any event, parliamentary confirmation in Canada would require a constitutional amendment and we can’t go there.
The agitators seemed to enjoy the process of the the Supreme Court Of Canada Selection Panel and the appearance of the appointee before a parliamentary committee. But the Selection Panel was either of little importance or unconstitutional, shifting at least some of the power of appointment from the Governor General, with whom it lies under the Constitution, to an ad hoc group of MPs who have no role under the Constitution. The Supreme Court showed in the Senate Reference that it would not accept dodges that would practically change the Constitution without express amendment.
The committee appearance was a complete sham, a pretence of openness when the appointment was already a done deal. Nobody knew what the MPs were supposed to be doing in questioning the incoming judge and they had to be instructed like school children on how to behave themselves.
For all the talk of openness and transparency much of the impetus behind the process agitation seems to be resentment that the Prime Minister gets to appoint the judges. In much of Europe, and now even in the United Kingdom, judges are chosen by august bodies with very little openness and transparency. Most people have no idea how judges are chosen. The result is often that judges choose the judges, with an assist from law professors, something that agitating law professors can warm to.
Under such as system no one is responsible for who become judges. In Canada it is still clear. The government is responsible. If you don’t like their choices you can turf it out.
For the most part even the agitators have not objected to Stephen Harper’s appointments, have even welcomed them, while continuing to witter.
Diehards still hallucinate a Harper Court while his appointees hand him what are reported as one defeat after another.
Coté will be Harper’s last appointment before the next election. But after seven Harper Supreme Court appointments the last reason you could have for not wanting another Harper government is fear of a Harper Court.
The general cry that we should all have our say on who gets to sit on the Supreme Court drew out a few who objected that Coté had litigated cases vigorously in accordance with her instructions.
The half baked process started by Paul Martin and fitfully continued by Stephen Harper may have made some difference. But only by discouraging one or two good judges from serving.
It has done no good and nothing better has been proposed.
We must hope that the Coté will set a precedent for a return to normalcy. We cannot hope that the agitators will dry up.
I have myself very qualified confidence in the Supreme Court of Canada. But I see no solution in better appointments however made. The way to a solution lies in understanding what judges should do and what they are doing, in sorting out the law schools and turning away from our obsession with the politicised American courts and the process by which judges are appointed.
Monday, June 30, 2014
Yet more on the Nadon appointment, the story that will not quite die
I had not thought that I should be posting again on the Nadon appointment. But the story seems not to die. It only grows. And grows more complicated.
When I first wrote this post it was about an allegedly inappropriate attempted or contemplated call from Chief Justice Beverley McLachlin to Prime Minister Stephen Harper and its rights or wrongs and the rights or wrongs of the revelation of the call and its implied criticism of McLachlin.
Since then the confidential list of six prospects considered by the Supreme Court of Canada Appointments Selection Panel of MPs has been revealed, the Government of Quebec has been consulted, Clement Gascon has been appointed to general satisfaction, without the involvement of the Panel and without a hearing before a Commons committee, but with continued grumbling about the 'process,' and one of the prospects has been appointed to the Quebec Court of Appeal, prompting speculation that he is being readied to replace Louis Lebel when he retires from the Supreme Court at the end of November, and there is a further court challenge of that appointment by Rocco Galati, who started the challenge to Nadon’s appointment.
As no more has been reported or said in the last week, I take this opportunity to update and extend my posting. Fearful that as I click on ‘update’ the story will be revived by some further stupidity.
It now appears that the Chief Justice's call was contemplated or attempted early in the summer of last year and that she wanted to flag the issue of the eligibility of Federal Court judges. Critics of Harper’s initiating the spat with McLachlin acknowledge that she may have made a ‘minor error’ in contemplating contacting the Prime Minister. Her own office said that the issue was “well-known within judicial and legal circles.” She had had an opportunity to raise it with the Panel. And presumably raised it with Justice Minister Peter MacKay. Indeed the government was well aware of it before Nadon was chosen and an opinion that he was eligible was obtained from the most eminent and respectable authorities.
The spat became an occasion to expatiate on Harper’s unpleasant character and that of his government. And its political ineptitude. For, despite the success of ‘Harper’s Team,’ they have been playing the game very poorly lately, whatever their merits as a government. But allowing that starting the spat with McLachlin was politically foolish and morally shabby, some of the commentary has been foolish and unsound.
Naturally, a law professor leapt to McLachlin's defense lavishing praise on her and accusing the government of endangering
'one of the most important aspects of Canadian constitutional democracy, the relationship of respect and credibility between the judicial and executive arms of our constitutional democracy.'
Professor Errol Mendes seemed to know no more on May 2 about what actually happened than the rest of us, but he was sure McLachlin was
‘one of the most distinguished jurists in Canadian history with a global reputation for effectively presiding over some of the most challenging legal and constitutional issues facing the country’
and the government dangerous. McLachlin is a judge distinguished only by her long tenure and eminent position, earning her diplomatic plaudits from other similarly placed judges, and the government is not dangerous, but inept.
The rule he seemed to suggest is that the courts must never be criticised, except in law journals, written and read only by law professors, while the courts are free not only to find against the government but to rebuke it while doing so.
A posse of bar association presidents pronounced that
‘The judicial branch is one of the three independent components of Canada's constitutional democracy, the other two being the legislative and the executive branches. Our system can operate effectively only if each component is respectful and courteous in its relations with the others. The courtesy and respect that these relationships require are particularly important for the judicial branch because it must ultimately judge the constitutionality of the conduct of the other two branches and, yet, at the same time, must on a day-to-day administrative level have dialogue with them.’
Skipping over the rather too pat theory of the three branches of government, usually attributed to Montesquieu, they seem not to have noticed the practically daily rude dissing of the executive by the legislature in the House of Commons, and they insinuate that the ‘judicial branch’ must be above criticism and, well, supreme.
All 23 deans of Canada’s law schools jumped on the bandwagon to condemn Harper saying
'There are very few issues on which all members of the legal community spontaneously agree,…The unanimous condemnation of the government's statements regarding Chief Justice McLachlin reflects our shared sentiment that this is an unfortunate and unprecedented attack on one of the most important institutions of Canada's constitutional democracy.'
Well, I still have my LL.B. from York University, but I don’t agree, either spontaneously or on reflection.
In the good old days when the courts were not ‘supreme,’ one could comment on their decisions critically, suggesting better arguments they should have accepted, without it becoming heated or political. Though the left often became heated and political about the courts without anyone holding it against them.
But since 1982, with the courts regularly deciding major political issues, the government’s wins and losses in the courts have become a political issue. If the Harper government has been too free in impugning the integrity of the courts when they have thwarted them, its opponents have shown no restraint in invoking the judgments of the courts as comminations. If Tories are 'incensed' with the Court, it is because politicians and the media persist in seeing the Court’s decisions as ‘rebukes’ and ‘defeats’ for the government. If they would cool down, so would the Tories.
Thomas Mulcair practically waved the Nadon judgment at Harper and 'accused the federal government of failing to respect Quebec's constitutional rights by appointing Nadon.'
Peter MacKay
'told the House of Commons on Monday [May 5] that, “prior to the ruling” of the top court, there was nothing in the act that “prohibited the appointment of a Supreme Court judge who had come through the Federal Court.”
“That is not in the Supreme Court Act,” MacKay asserted.
He reiterated that two former Supreme Court justices and legal experts consulted by the government advised that Nadon was eligible for appointment to the top court.'
All of which is true, though now immaterial. As Mulcair said, he was ‘trying to replead his case.’ But Mulcair was maintaining there had been no case to plead, that the government had been trying to flout the law, which was patently untrue.
Mulcair could quite properly have urged the government to ‘suck it up’ and come up with another appointment, but with Justin Trudeau and much of the media, he cited it as a rebuke of the government. A characterisation encouraged by the Court’s way of expressing itself. The judges are well aware of the impact their judgments will have. So they should know that they should be careful in expressing themselves. Not hyping their assumed role of guardians of the constitution and all that is right and good and simply answering in measured language the questions they are asked.
It is a theme of the critics of Harper that while he has ‘smeared’ the Chief Justice, judges are from their position unable to reply. McLachlin has not hesitated to issue a series of replies to the ‘smear,’ but more importantly, the Court is presented as ‘rebuking’ the government and the great and the good insist the government should not reply.
All this is put in the context of what is described as ‘The government [losing] five major cases at the Supreme Court in the past six weeks, with only one voice of support from the court's eight sitting members, just once.’ This rather overstates things. Three of the five cases, the ones involving the Truth in Sentencing Act, were really just one case. And the Court did not strike down the government’s legislation. It simply gave it a plausible interpretation that fell short of the government’s somewhat hyperbolic presentation of the act.
The others were the Nadon appointment and the Senate Reference. It is hard to believe that Harper is much upset by the Court’s dismissal of his Senate schemes or that it constitutes a major defeat of his cherished hopes. He only put forward his schemes in deference to Reform Party pieties and in a play to the popular loathing of the Senate. He tried but, having asked the Supreme Court for its opinion, he can now say there is nothing he can do. Justin’s Trudeau’s stupidities are not an option.
The brouhaha produced the customary reaction that something must be done about the ‘secretive’ process of Supreme Court of Canada appointments. Thanks to The Globe it is no longer secretive. Stephane Dion complained when the story of McLachlin’s contemplated call broke that it must have been Tory MPs who leaked the story of her call, breaching the confidentiality of the process. Now we are asked to accept something like an election contest with candidates vying for the endorsement of The Globe, The Star and the CBC.
In the particular conjuncture Harper decided to turn to the government of Quebec. As The Globe in a brief moment of lucidity points out this cannot set a precedent. Ottawa appoints judges. It’s in the constitution. After the Senate Reference it must be clear that nothing can absolve Ottawa of the responsibility. Whatever the momentary political benefits of consulting and practically handing it over to Quebec, it can’t work.
The readiness with which Gascon’s appointment was accepted, without the ‘process’ of a Selection Panel of MPs and a Commons committee hearing, exposes it as the folly that it is.
And what do those who complain of the ‘secretive’ process actually want? That every suggested name, every indication of willingness to serve, every comment on the merits or possible flaws of every prospect should be published in real time and argued over in the media and Parliament? Many good judges would not be willing to serve under such a ‘process.’
That would be ‘politicising’ the Court, what Harper is foolishly accused of doing.
Even the Liberal justice critic Sean Casey had the decency to say "To suggest [Nadon] was brought forward because he has the same philosophy as the government does him a disservice,…”
The one issue raised about Gascon’s appointment was that in losing Morris Fish, the Supreme Court was losing criminal law expertise and as a commercial lawyer Gascon could not make it up. But this highlights the absurdity of the Nadon controversy and the Court’s judgment. As a criminal lawyer Fish was likely less up to speed with Quebec Civil Law than Nadon. And though bilingual he is not a Francophone. Nadon’s appointment in Fish’s stead would have strengthened the Franchophone/Quebec/Civil Law element in the Court.
When I first wrote this post it was about an allegedly inappropriate attempted or contemplated call from Chief Justice Beverley McLachlin to Prime Minister Stephen Harper and its rights or wrongs and the rights or wrongs of the revelation of the call and its implied criticism of McLachlin.
Since then the confidential list of six prospects considered by the Supreme Court of Canada Appointments Selection Panel of MPs has been revealed, the Government of Quebec has been consulted, Clement Gascon has been appointed to general satisfaction, without the involvement of the Panel and without a hearing before a Commons committee, but with continued grumbling about the 'process,' and one of the prospects has been appointed to the Quebec Court of Appeal, prompting speculation that he is being readied to replace Louis Lebel when he retires from the Supreme Court at the end of November, and there is a further court challenge of that appointment by Rocco Galati, who started the challenge to Nadon’s appointment.
As no more has been reported or said in the last week, I take this opportunity to update and extend my posting. Fearful that as I click on ‘update’ the story will be revived by some further stupidity.
It now appears that the Chief Justice's call was contemplated or attempted early in the summer of last year and that she wanted to flag the issue of the eligibility of Federal Court judges. Critics of Harper’s initiating the spat with McLachlin acknowledge that she may have made a ‘minor error’ in contemplating contacting the Prime Minister. Her own office said that the issue was “well-known within judicial and legal circles.” She had had an opportunity to raise it with the Panel. And presumably raised it with Justice Minister Peter MacKay. Indeed the government was well aware of it before Nadon was chosen and an opinion that he was eligible was obtained from the most eminent and respectable authorities.
The spat became an occasion to expatiate on Harper’s unpleasant character and that of his government. And its political ineptitude. For, despite the success of ‘Harper’s Team,’ they have been playing the game very poorly lately, whatever their merits as a government. But allowing that starting the spat with McLachlin was politically foolish and morally shabby, some of the commentary has been foolish and unsound.
Naturally, a law professor leapt to McLachlin's defense lavishing praise on her and accusing the government of endangering
'one of the most important aspects of Canadian constitutional democracy, the relationship of respect and credibility between the judicial and executive arms of our constitutional democracy.'
Professor Errol Mendes seemed to know no more on May 2 about what actually happened than the rest of us, but he was sure McLachlin was
‘one of the most distinguished jurists in Canadian history with a global reputation for effectively presiding over some of the most challenging legal and constitutional issues facing the country’
and the government dangerous. McLachlin is a judge distinguished only by her long tenure and eminent position, earning her diplomatic plaudits from other similarly placed judges, and the government is not dangerous, but inept.
The rule he seemed to suggest is that the courts must never be criticised, except in law journals, written and read only by law professors, while the courts are free not only to find against the government but to rebuke it while doing so.
A posse of bar association presidents pronounced that
‘The judicial branch is one of the three independent components of Canada's constitutional democracy, the other two being the legislative and the executive branches. Our system can operate effectively only if each component is respectful and courteous in its relations with the others. The courtesy and respect that these relationships require are particularly important for the judicial branch because it must ultimately judge the constitutionality of the conduct of the other two branches and, yet, at the same time, must on a day-to-day administrative level have dialogue with them.’
Skipping over the rather too pat theory of the three branches of government, usually attributed to Montesquieu, they seem not to have noticed the practically daily rude dissing of the executive by the legislature in the House of Commons, and they insinuate that the ‘judicial branch’ must be above criticism and, well, supreme.
All 23 deans of Canada’s law schools jumped on the bandwagon to condemn Harper saying
'There are very few issues on which all members of the legal community spontaneously agree,…The unanimous condemnation of the government's statements regarding Chief Justice McLachlin reflects our shared sentiment that this is an unfortunate and unprecedented attack on one of the most important institutions of Canada's constitutional democracy.'
Well, I still have my LL.B. from York University, but I don’t agree, either spontaneously or on reflection.
In the good old days when the courts were not ‘supreme,’ one could comment on their decisions critically, suggesting better arguments they should have accepted, without it becoming heated or political. Though the left often became heated and political about the courts without anyone holding it against them.
But since 1982, with the courts regularly deciding major political issues, the government’s wins and losses in the courts have become a political issue. If the Harper government has been too free in impugning the integrity of the courts when they have thwarted them, its opponents have shown no restraint in invoking the judgments of the courts as comminations. If Tories are 'incensed' with the Court, it is because politicians and the media persist in seeing the Court’s decisions as ‘rebukes’ and ‘defeats’ for the government. If they would cool down, so would the Tories.
Thomas Mulcair practically waved the Nadon judgment at Harper and 'accused the federal government of failing to respect Quebec's constitutional rights by appointing Nadon.'
Peter MacKay
'told the House of Commons on Monday [May 5] that, “prior to the ruling” of the top court, there was nothing in the act that “prohibited the appointment of a Supreme Court judge who had come through the Federal Court.”
“That is not in the Supreme Court Act,” MacKay asserted.
He reiterated that two former Supreme Court justices and legal experts consulted by the government advised that Nadon was eligible for appointment to the top court.'
All of which is true, though now immaterial. As Mulcair said, he was ‘trying to replead his case.’ But Mulcair was maintaining there had been no case to plead, that the government had been trying to flout the law, which was patently untrue.
Mulcair could quite properly have urged the government to ‘suck it up’ and come up with another appointment, but with Justin Trudeau and much of the media, he cited it as a rebuke of the government. A characterisation encouraged by the Court’s way of expressing itself. The judges are well aware of the impact their judgments will have. So they should know that they should be careful in expressing themselves. Not hyping their assumed role of guardians of the constitution and all that is right and good and simply answering in measured language the questions they are asked.
It is a theme of the critics of Harper that while he has ‘smeared’ the Chief Justice, judges are from their position unable to reply. McLachlin has not hesitated to issue a series of replies to the ‘smear,’ but more importantly, the Court is presented as ‘rebuking’ the government and the great and the good insist the government should not reply.
All this is put in the context of what is described as ‘The government [losing] five major cases at the Supreme Court in the past six weeks, with only one voice of support from the court's eight sitting members, just once.’ This rather overstates things. Three of the five cases, the ones involving the Truth in Sentencing Act, were really just one case. And the Court did not strike down the government’s legislation. It simply gave it a plausible interpretation that fell short of the government’s somewhat hyperbolic presentation of the act.
The others were the Nadon appointment and the Senate Reference. It is hard to believe that Harper is much upset by the Court’s dismissal of his Senate schemes or that it constitutes a major defeat of his cherished hopes. He only put forward his schemes in deference to Reform Party pieties and in a play to the popular loathing of the Senate. He tried but, having asked the Supreme Court for its opinion, he can now say there is nothing he can do. Justin’s Trudeau’s stupidities are not an option.
The brouhaha produced the customary reaction that something must be done about the ‘secretive’ process of Supreme Court of Canada appointments. Thanks to The Globe it is no longer secretive. Stephane Dion complained when the story of McLachlin’s contemplated call broke that it must have been Tory MPs who leaked the story of her call, breaching the confidentiality of the process. Now we are asked to accept something like an election contest with candidates vying for the endorsement of The Globe, The Star and the CBC.
In the particular conjuncture Harper decided to turn to the government of Quebec. As The Globe in a brief moment of lucidity points out this cannot set a precedent. Ottawa appoints judges. It’s in the constitution. After the Senate Reference it must be clear that nothing can absolve Ottawa of the responsibility. Whatever the momentary political benefits of consulting and practically handing it over to Quebec, it can’t work.
The readiness with which Gascon’s appointment was accepted, without the ‘process’ of a Selection Panel of MPs and a Commons committee hearing, exposes it as the folly that it is.
And what do those who complain of the ‘secretive’ process actually want? That every suggested name, every indication of willingness to serve, every comment on the merits or possible flaws of every prospect should be published in real time and argued over in the media and Parliament? Many good judges would not be willing to serve under such a ‘process.’
That would be ‘politicising’ the Court, what Harper is foolishly accused of doing.
Even the Liberal justice critic Sean Casey had the decency to say "To suggest [Nadon] was brought forward because he has the same philosophy as the government does him a disservice,…”
The one issue raised about Gascon’s appointment was that in losing Morris Fish, the Supreme Court was losing criminal law expertise and as a commercial lawyer Gascon could not make it up. But this highlights the absurdity of the Nadon controversy and the Court’s judgment. As a criminal lawyer Fish was likely less up to speed with Quebec Civil Law than Nadon. And though bilingual he is not a Francophone. Nadon’s appointment in Fish’s stead would have strengthened the Franchophone/Quebec/Civil Law element in the Court.
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