Callow, Fraser and G: Perspectives on the Role of Law and of the Courts

Three recent Supreme Court of Canada decisions illustrate the very different perspectives or philosophies the judges bring to their consideration of the cases before them. The most recent, CM Callow Inc. v. Zollinger, dealt with the duty of honest performance in contract law, while the other two were concerned with equality issues: Fraser v. Canada (Attorney General), which considered whether the RCMP pension plan discriminated against members (primarily women) who shared jobs, and Ontario (Attorney General) v. G, involving the different treatment of persons found guilty of a sexual offence and those who had committed a sexual offence but were held to be not criminally responsible on account of mental disorder (“NCRMD”) in relation to the Ontario sex registry. In each of these decisions, a majority of judges reveal a broad view of the role of law and of the court, while the minority take a more restrained view.

Justice Abella wrote the majority judgement, Brown and Rowe JJ. wrote together in dissent and Côté J. wrote separately in dissent in Fraser (see my Slaw post dated November 3, 2020); Karakatsanis J. wrote for the same majority in G, while Rowe J. wrote concurring reasons and Côté and Brown JJ. wrote a joint opinion dissenting in part (see my Slaw post dated December 1, 2020). In the most recent decision, Callow, Kasirer J. wrote the majority judgement, Brown J., with Moldaver and Rowe JJ. concurring, wrote a separate opinion and Côté J. wrote in dissent. Thus we see more or less the same split, although Moldaver J. joined Brown and Rowe in their concurring opinion in Callow. Despite the differences in philosophical approach, as far as Brown, Rowe and (in Callow) Moldaver JJ. are concerned, the outcome would have been the same in G. and Callow. Justice Côté thus stands, at least as far as these three cases are concerned, as the most restrained member of the Court in outlook and application of the law.

Both Fraser and G involved the interpretation and application of section 15 of the Canadian Charter of Rights and Freedoms. Callow, on the other hand, was a private law case that raised the issue of the meaning and application of the duty of honest performance in contract law. Callow had winter and summer contracts with Baycrest Condominiums. The Ontario Court of Appeal held in CM Callow Inc. v. Zollinger that Baycrest’s behaviour was not related to the performance of the existing contract but to a future contract (although they did acknowledge that Baycrest had not acted “honourably”), overturning the trial decision by O’Bonsawin J. that found failing to correct Callow’s impression that his winter maintenance contract would be renewed and letting him provide free work even though they intended to terminate the existing contract was a breach of the duty. Callow had been left with this impression from conversations with members of Joint Use Committee of Baycrest’s Condominium Management Group (CMG), including one member responsible for negotiating the price of contracts. He had also provided free work over the summer, which Baycrest understood he undertook to encourage them to renew his contract; by then, Baycrest had already decided to terminate the contract, but waited until five months later to do so, as it had an express contractual right to do, giving Callow ten days notice, as the contract required.

There was no dispute that Baycrest had the right under the contract to do what it did; the issue was how it did it. In my July 2, 2019 Slaw post on the Court of Appeal decision, I asked whether the OCA had issued an invitation to “sharp practice” and whether the Supreme Court of Canada would be “as sanguine about [the impugned] conduct” as was the OCA. We now have the answer: The SCC overturned the OCA’s decision, reinstating O’Bonsawin J.’s decision and the damages she awarded. In doing so, it relied on Bhasin v. Hrynew, in which Cromwell J. had developed the theory of the duty of honest performance, an example of the requirement to act in good faith; he identified the duty of honest performance as a doctrine in contract law, not as an implied contractual term.

There is an additional aspect of the Supreme Court’s analysis in Callow: Kasirer J., writing for the majority, dwelt at length about how Quebec law under the Civil Code could assist in understanding the duty of honest performance under the common law. Justice Brown, writing for himself and Moldaver and Rowe JJ., disagreed in clear and unequivocal terms about the need to resort to the civil law and, indeed, argued that it was disadvantageous to do so; Côté J. also disagreed with the majority on this point in her dissent on the merits. Although Côté J. did dissent, she noted, “the result I arrive at should not be interpreted as meaning that Baycrest’s behaviour was appropriate or that Callow has no recourse”, suggesting that Callow’s remedy lies in unjust enrichment (the benefit of the free work Callow had performed) (Callow, Côté J., para. 237).

Although concurring in the result in Callow and agreeing with the majority as far as the broad strokes of the majority’s decision were concerned, Brown J. writing for himself and for Rowe and Moldaver JJ. disagreed with the majority’s approach to damages (but agreeing on the amount). He was also critical of what he considered to be an expansion of the doctrine of the duty of honest performance, saying that despite Kasirer J.’s statements otherwise, the majority “does indeed expand upon (and, I say, confuse) the law set forth in Bhasin” (Callow, Brown J., para. 152).

However, Brown J.’s disagreement in Callow rests in large measure on a more fundamental dispute about when it is appropriate to consider Quebec civil law in the assessment of the common law, in this case, contract law. This is similar to his analysis in Fraser, in which he disagreed with the majority’s interpretation of section 15 (in that case, the difference would have resulted in a denial of the claim).

Justice Kasirer sets a bold task for himself in advancing the bijural nature of the Canadian legal system. The hook that allows him to embark on this analysis is Callow’s submission on the relevance of Quebec law and the references in Bhasin to Quebec law (Callow, Kasirer J., para. 56). Thus

[t]he direct link between the dishonest conduct and the exercise of [the termination clause] was not properly identified by the Court of Appeal in this case and Quebec law helps illustrate the requirement that there be such a link from Bhasin. In my view, Baycrest’s dishonest conduct is not a wrong independent of the termination clause but a breach of contract that, properly understood, manifested itself upon the exercise of [the termination clause]. Through that direct link between the dishonesty and the exercise of the clause, the conduct is understood as contrary to the requirements of good faith. This emerges more plainly when considered in light of the civilian doctrine of contractual good faith alluded to in Bhasin, specifically the fact that, in Quebec “[t]he notion of good faith includes (but is not limited to) the requirement of honesty in performing the contract”…. Thus, like in Quebec civil law, no contractual right may be exercised dishonestly and therefore contrary to the requirements of good faith. Properly raised by Cromwell J., this framework for connecting the exercise of a contractual clause and the requirements of good faith is helpful to illustrate, for the common law, the link made in Bhasin that the Court of Appeal failed to identify here. (Callow, Kasirer J., para. 57; citation omitted)

Justice Kasirer continues, although “this Court has often drawn on this country’s bijural environment to inform its decisions, principally in private law appeals”, this has occurred most often in considering the common law in civil law cases; nevertheless, the Court “has often observed how these sources resolve similar legal issues to those faced by the common law”. The Quebec cases do not bind the Court, “but rather serve as persuasive authority, in particular, by shedding light on how the jurisdictionally applicable rules work”. Justice Kasirer is clear that the use of these civil law authorities to common law cases is not limited to occasions when there is a gap in the law or when the Court is considering modifying an existing rule. The one regime can be helpful in understanding the other regime and “the opportunity for dialogue between these legal traditions is arguably a special mandate for this Court given the breadth and responsibilities of its bijural jurisdiction” (Callow, Kasirer J., para. 60).

He quotes LeBel J. approvingly when the latter said, “this exercise is part of the function of this Court, as a national appellate court, adding that [translation] ‘because it has the ability to do so today, thanks to its institutional resources, the Supreme Court now assumes the symbolic responsibility of embracing a culture of dialogue between the two major legal traditions’” (Callow, Kasirer J., para. 61). Comparative analysis can assist in understanding the duty of good faith, of which honest performance is an element. He quotes the Civil Code, but makes it clear that he is not applying the terms of the Civil Code to this dispute; rather, it assists in establishing a framework:

In my view, the required direct link between dishonesty and performance from Bhasin is made plain, by way of simple comparison, when one considers how the framework for abuse of rights in Quebec connects the manner in which a contractual right is exercised to the requirements of good faith. Specifically, the direct link exists when the party performs their obligation or exercises their right under the contract dishonestly. When read together, arts. 6, 7 and 1375 [of the Civil Code of Quebec] point to this connection by providing that no contractual right may be exercised abusively without violating the requirements of good faith. Article 7 in particular provides “[n]o right may be exercised with the intent of injuring another or in an excessive and unreasonable manner, and therefore contrary to the requirements of good faith.” While the substantive content of this article is not relevant to the common law analysis, the framework is illustrative. This article shows how the requirements of good faith can be tied to the exercise of a right, including a right under a contract. It is the exercise of the right that is scrutinized to assess whether the action has been contrary to good faith. (Callow, Kasirer J., para. 67)

Thus the civil law shows how the duty is related to the provisions of the contract; the duty does not prevent the exercise of contractual rights, but rather focuses on the requirement that the way the right is exercised must be ethical and conform to the duty of good faith, in this case, honest performance.

Although Kasirer J. contends that considering the civil law might be a useful interpretative exercise, he also notes that the process is not clear cut and must be undertaken with “cautiously”:

there are important differences between the civilian treatment of abuse of contractual rights and the current state of the common law. The Civil Code provides that no right may be exercised with the intent to injure another or in an excessive and unreasonable manner and therefore contrary to the requirements of good faith requiring that parties conduct themselves in good faith, in particular at the time an obligation is performed. Insofar as the organizing principle in Bhasin speaks to a related idea that parties generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily, this principle, unlike Quebec law, is not a free-standing rule but rather a standard that underpins and manifests itself in more specific doctrines. Further, in Bhasin, positive law was only formally extended by recognizing a general duty of honesty in contractual performance. (Callow, Kasirer J., para. 70)

Furthermore, rights under the civil law and under the common law are understood differently: under the common law, the duty of honest performance should not be employed to investigate the motives of the parties to the contract and “the preoccupation with the ‘social’ dimension of limits to rights, as opposed to a purely ‘economic’ aspect of a freely-negotiated bargain, is peculiar to the civil law”. Indeed, “One should not lose sight of the fact that, as intellectual and historical traditions, the common law and the civil law represent, in many respects, distinctive ways of knowing the law.” Nevertheless, although one must recognize the “intellectual integrity” (citing LeBel J.) of these distinctive traditions, “[t]he civil law provides a useful analytical guide to illustrating the relatively recent common law duty. Two reasons in particular underlie the usefulness of the comparative exercise here.” Justice Kasirer emphasizes he is not applying the civil law as if he is applying it in Quebec and that although the civil and common law are different traditions, they nevertheless share relevant similarities (such as not requiring the one party to give up its interests in favour of the other) and therefore looking to the civil law here will not lead to confusion. (Callow, Kasirer J., paras. 71, 72 and 72)

The question that arises is whether it was necessary or even that helpful to invoke the civil law in analysing the situation in Callow. Justice Brown thought not and further, that doing so could create confusion:

I am compelled to express my respectful objection to the majority’s view that the doctrine of abuse of right in the civil law of Quebec is “useful” and “helpful” in understanding the application of Bhasin to this appeal …. Again respectfully, I see this digression as neither “useful” nor “helpful” to the judges and lawyers who must try to understand the common law principles of good faith as developed in this judgment. Indeed, it will only inject uncertainty and confusion into the law.

This is not to suggest that comparative legal analysis is not an important tool or that its use should somehow be unduly limited at this Court. As the majority’s reasons amply document, the Court has a longstanding tradition of looking to Quebec’s civil law in developing the common law — whether to answer a question that the common law does not answer (that is, to fill a “gap”) or where it is necessary to modify or otherwise develop existing rules. In addition, where concerns are raised about the effects of moving the common law in one direction or another, this Court has considered the experience in Quebec and elsewhere, often for reassurance that the posited concerns are unfounded or overstated. What this Court has refrained from doing, however, is deploying comparative legal analysis that serves none of these purposes or, even worse, renders the law obscure to those who must know and apply it. But by invoking the civilian abuse of right framework to clarify when “[d]ishonesty is directly linked to the performance of a given contract” … — a question requiring no “clarification” — the majority does exactly that. (Callow, Brown J., paras. 122 and 123; citations omitted)

Even further, because Kasirer J.’s consideration of the civil law draws the analysis into consideration of the duty of exercise of discretionary powers in good faith, it is misleading: this case is about the duty of honest performance, and consideration of the civil law “ties dishonesty to the manner in which contractual discretion is exercised“. It conflates two separate common law concepts. (Callow, Brown J., para. 124; emphasis in original) And because Kasirer J. states that he is not actually applying the civil law concepts, “The majority either relies on a truncated and therefore distorted version of the civilian framework of abuse of right, or else opens the door to future “clarifications” (which would further undermine the integrity of the common law duty of honest performance as stated in Bhasin). Even on its own terms, then, the majority’s invocation of abuse of right raises more questions than it claims to answer.” (Callow, Brown J., para. 174)

Justice Côté expresses her agreement with Brown J.’s concerns:

Justice Kasirer states … that “[n]o expansion of the law set forth in Bhasin is necessary” to dispose of this appeal. However, he then embarks on, and I say this respectfully, an unnecessary comparative exercise between the civil law and the common law under the pretext of “dialogue”. I am perplexed by the virtues of “dialogue” in a case like this one where no gaps in the common law need to be filled and no rules need to be modified. I do not see why we should adopt such an approach, one that provides no palpable benefits and that is also arbitrary and unpredictable. (Callow, Côté J., para. 191; citation omitted)

Although in a different context, Fraser and G reflect similar distinctions in how the majority in these cases and in Callow (excepting Moldaver J. in the last) and the judges concurring in the results, but writing separate opinions, or writing in dissent, approach the process of decision-making and by extension how they see the role of the Court; to some extent, this also means a different approach to the efficacy of law.

As I indicated above, I discussed both Fraser and G in previous Slaw posts, and will therefore merely summarize the differences in approach among the judges here.

In Fraser, Abella J. undertook a full analysis of section 15’s prohibition against adverse impact discrimination and substantive equality. Indeed, all the judges accepted that this is a proper interpretation of section 15, with the proviso that Brown and Rowe JJ. describe substantive equality as “undefined” and “an open-ended and undisciplined rhetorical device” (Fraser, Brown and Rowe JJ., para. 146). The judges differ, however, with respect to the consequences to the pension plan and whether the RCMP contravened section 15. Justice Abella not only traces the discrimination women have experienced since the Royal Commission on the Status of Women Report, which recommended equitable conditions for full-time and part-time employees, particularly relevant for women because more women are part-time workers than are men. She also considers how pension plans are generally structured to the disadvantage of women. As I said in my post on Fraser, Abella J. explains,

“if claimants successfully demonstrate that a law has a disproportionate impact on members of a protected group, they need not independently prove that the protected characteristic ’caused’ the disproportionate impact” or that it is necessary “to inquire into whether the law itself was responsible for creating the background social or physical barriers which made a particular rule, requirement or criterion disadvantageous for the claimant group”. (citing Fraser, paras. 70 and 71).”

Justices Brown and Rowe, concurring in their dissenting opinion, and Côté J. in her dissenting opinion, recognize that women face disadvantages in society, but do not relate it to the different treatment mostly female job-sharers receive under the RCMP pension plan. Justices Brown and Rowe see the opportunity to job share as an accommodation, allowing parents (mostly women) to work and care for a family. (They also consider the pension plan as a whole, maintaining that if the members who job-share could buy back credits and other part-time workers couldn’t, the members job-sharing would be at an advantage.) They are also critical of the concept of substantive equality, which they describe as “undefined” and “an open-ended and undisciplined rhetorical device” (Fraser, Brown and Rowe JJ., para. 146).

For Côté J., reliance on external factors is not appropriate. She states, “We must take care to distinguish between effects which are wholly caused, or are contributed to, by an impugned provision, and those social circumstances which exist independently of such a provision” (Fraser, Côté J., para. 247). She concludes that women have made a “choice” to job-share rather than take leave without pay, missing the point (reinforced by Abella J.) that societal circumstances circumscribe or dictate the choices women make, including the decision to job-share.

Both Brown and Rowe JJ. in their joint dissenting reasons and Côté J. in her dissenting reasons also take the view that the judicial role is not intended to substitute their views for those of the legislature or executive, which they see the majority doing. Justices Brown and Rowe exaggerate the majority’s position, suggestion that the next step would be “that governments (federal and provincial) have a positive duty under section 15(1) to initiate measures that will remove all effects of historic disadvantage, and that they are constitutionally barred from repealing or even amending such measures” (Fraser, Brown and Rowe JJ., para. 144)

Justice Côté, perhaps, sees the most limited role for the law and the courts. As in Callow, where she was critical of Baycrest’s conduct, she acknowledges that sex discrimination is “of the most invidious order”, but she does not believe it is law’s place to remedy the under-inclusiveness or “irrationality” of the pension plan, which she recognizes; since the treatment of members job-sharing doesn’t even satisfy the first step of the section 15(1) analysis, however, there is nothing the courts can do: “…[I]t is not this Court’s role to constitutionalize normative judgments to this effect; that is the role of the electorate, and in turn, the legislature” (Fraser, Côté J., paras. 255 and 252).

The division is somewhat different in G. Justice Karakatsanis wrote the majority reasons, with the same justices as constituted the majority in Fraser concurring. Justices Côté and Brown wrote joint reasons, dissenting in part, while Rowe J. wrote separate concurring reasons.

Justice Karakatsanis reviewed the principles underlying section 15(1), addressing indirect discrimination, which was not relevant in G, since the discrimination was direct, and substantive equality, in part in response to the submissions of the Attorney General of Ontario. Although they agreed with the result, Côté and Brown JJ. felt so strongly about providing an overview of section 15(1) that they wrote their own reasons, with which Rowe J. notes his agreement on this point (G, Rowe J., para. 185): they, too, found that the treatment of persons found NCRMD in the relevant legislation “exacerbates pre-existing disadvantage” because it “perpetuat[es] the stereotype that persons with mental illness are inherently dangerous”, but

[o]ur colleague, however, goes further, and in extensive obiter dicta discusses adverse‑effects discrimination and “substantive equality” (paras. 41‑69). Her doctrinal statements are not remotely relevant to the issues raised by this appeal, especially considering this is not an adverse‑effects case. The distinction in this case is facially apparent ….

Thus, our silence on paragraphs 41‑69 of our colleague’s reasons should not be taken as tacit approval of their content. We simply do not see them as offering actual reasons for her judgment, but “commentary . . . or exposition” instead…(G, Côté and Brown JJ., paras. 223-224; emphasis in original)

All the judges in G except Rowe J. believe Schachter v. Canada, which has effectively governed the court’s remedial jurisdiction since 1993, needs reconsidering, particularly with respect to declarations of invalidity and constitutional exemptions. In Karakatsanis J.’s approach, the courts would be careful of granting remedies (reading down, reading in or severing unconstitutional elements) that would risk substituting the court’s view for that of the legislature (or what the legislature would do), would not delay suspensions of invalidity except in “rare circumstances” and, in the case of delayed suspensions, would grant individual constitutional exemptions in order to safeguard constitutional rights (there would have to be a “compelling reason” to do otherwise).

Although Karakatsanis J. believes she is bringing coherence to the court’s remedial jurisdiction and, indeed, curtailing the expansion of Schachter that she considers has occurred, Côté and Brown JJ. maintain her approach “represents an unbridled expansion of judicial discretion” (G, Côté and Brown JJ., para. 294). (One might not unreasonably conclude that both Karakatsanis J.’s statement, on the one hand, and that of Côté and Brown JJ. exaggerate reality.) The answer for them is to return to the 1985 Manitoba Language Rights, the first decision in which the Court suspended a declaration of invalidity: only a threat to the rule of law justifies delaying a declaration, which may also lead to a threat to public safety. In this case, they would suspend the declaration because persons found NCRMD are more likely to reoffend (are thus are a threat to public safety); however, unlike Karakatsanis J., who took G’s particular circumstances into account, they would not grant G a constitutional exemption, in part because the legislature is better able to determine how to address the persons found NCRMD. Justice Rowe, who, unlike his colleagues, views the problem as stemming more from the application of Schachter than from Schachter itself, is also critical of Karakatsanis J.’s approach, which he considers “will lead to a continuation of current trends, in which declarations of invalidity are suspended in a way that varies with the length of the Chancellor’s foot”. Furthermore, he disagrees with the majority’s view, as he sees it, that the Court has discretion to make unconstitutional provisions constitutional. (G, Rowe J., paras. 205 and 206).

In exploring the divisions on the Supreme Court in Fraser, G and Callow, I am not suggesting that they are illustrative of an ongoing pattern among the judges, although a quick review of recent cases does indicate some of the same groupings or separate concurring decisions by the same judges as in these three cases; there are, however, also a number of unanimous decisions or decisions with different groupings. What these three cases do show is that the same judges (a majority) appear to view the Court as having a responsibility beyond the resolution of the disputes before them. In each case, a different judge, but one always of the majority in these particular decisions, brings a fuller picture of some aspect of the decision. In Fraser, it is necessary that Abella J. set out the principles underlying section 15 (1) of the Charter because they inform the decision, which also relies on understanding the social and economic factors underlying women’s situation. Justice Karakatsanis may not have needed to cover the territory of section 15(1) because the discrimination was evident, but a reminder of the significance of substantive equality is relevant to G’s situation. Justice Kasirer’s consideration of how the civil law might assist in understanding the common law duty of honest performance did not come out of the blue, since Callow raised it and Cromwell J. discussed it in Bhasin, but it is fair to ask, on the one hand, what it specifically added to the analysis; on the other hand, though, it attempted to bridge the gap in a specific context between the two legal regimes that comprise the Canadian legal system, not to make them the same but to see how one can assist the other. In all these cases, the majority is not confined to the “four walls” of the dispute in front of them, but seeks to place it in a broader context. In a sense, the majority reasons seek to link the Court with the society beyond its home.

These efforts are met, in concurring or dissenting reasons by blunt criticism. In different decisions, Côté, Brown and Rowe JJ. (and in Callow, Moldaver J.) do not hesitate to create barriers between the philosophy of decision-making and the role of the court reflected by the majority reasons and their own rather different perspectives. They make it clear that their responsibility is a practical one, confined by the walls of the dispute, and that the Court’s role is to engage with the facts in front of them, with little connection to the societal concerns that led to them. In Côté J.’s approach in particular, the law appears powerless to address social ills she otherwise condemns.

In these three cases, at least, the strong nature of the reasons, the tendency of the separately concurring or dissenting judges, at times at least, is to approach the majority reasons with a heavy hand and ignore the nuances. Yet they force those addressing the decisions to ask to what extent their criticisms might be valid and to what extent they are seeking to develop a different school of thought to that which has tended to characterize the Court and which is reflected in the majority decisions, at least in these cases.

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