Daily Archives: July 8, 2009

A Brief Note on Judicial Pragmatism and Public Policy

In the post-911 era, courts in Canada and in the U.S. have shied away from utilizing public policy in their jurisprudence. For example, the current chief justice of the U.S. Supreme Court contends that if “a case can be decided on narrow grounds, it should be.”^

In Canada’s Reference re Same-Sex Marriage,* the federal government posted four questions to the Supreme Court on the legality of same-sex marriage.

As it was a contentious social issue at the time, the Court decided to answer the questions on narrow and technical grounds: Yes, the Parliament has jurisdiction to legislate same-sex marriage, and yes, the proposed same-sex marriage is consistent with the Charter.

However, when asked whether the opposite-sex requirement for a civil marriage would be consistent with the Constitution, the Court declined to answer as it was inappropriate.

When the reference was released, the Court’s answer was considered “solid,” as the questions were answered on narrow grounds without reference to “public policy.” Accordingly, the answers could not be criticized much, at least from a law professor’s point.

Some observers, both proponents and opponents of same-sex marriage, were disappointed that the Court did not approach the answer as they would have liked. The Court was decidedly pragmatic.

In the era of judicial pragmatism, it’s quite refreshing to see new cases where the courts make their decisions in part on public policy grounds.

Public policies that the courts rely on in recent years are typically well-established, for example, freedom from restraints of trade as discussed in my previous blog “Ambiguous and Uncertain Non-Competition Clauses.” Other examples may include the courts’ refusal to enforce contracts requiring chastity, contracts relating to illegal acts, and contracts that are penal in nature. However, many of these have long been legislated.

^”Fairness for Firefighters” The Economist 329:8638 (July 4, 2009) 26

*[2004] 3 S.C.R. 698, 2004 SCC 79

Tagged , , , , , , ,

Ambigious and Uncertain Non-Competition Clauses

There are several things that may render a non-competition agreement unenforceable in law. For example, a non-competition agreement may be held unenforceable because it’s commercially unreasonable. Besides the (un)reasonableness of the terms, the agreement may also be held unenforceable if the terms are vague and uncertain.

Consider the recent ruling by the Supreme Court of Canada in Shafron v. KRG Insurance Brokers (Western) Inc.,* where the court was called upon to determine whether a non-competition agreement was enforceable wherein the former employee undertook not to compete with his employer in the Metropolitan City of Vancouver once he departed from the company.

It turned out, that no Metropolitan City of Vancouver has ever existed in British Columbia.

The trial judge in this case ruled that the wording “Metropolitan City of Vancouver” was neither clear nor certain and was unreasonable. Therefore he dismissed the action.

The B.C. Court of Appeal, interestingly, took a different approach. The Court of Appeal found while the term “Metropolitan City of Vancouver” was ambiguous, it was possible to construe it as applying to the City of Vancouver and the surrounding municipalities.

On appeal to the Supreme Court of Canada, it was held that the term in question was indeed ambiguous and uncertain. The non-competition agreement was thus unenforceable.

The Court was reluctant to “read into” the contract by guessing what the parties had in mind when the agreement was entered into as it would encourage employers to draft overly broad restrictive covenants. The Court accordingly condemned the Court of Appeal’s attempt to “rewrite the geographic scope in the restrictive covenant to what it thought was reasonable.”

*[2009] S.C.C. 6, rev’g [2007] B.C.C.A. 79 (CanLII), com’g [2005] B.C.S.C. 1611 (CanLII)

Tagged , , , , , ,