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Good Faith in contract: What is really wrong with the supreme court’s decision?




In Bhasin v Hyrnew Cromwell J. said this:

[40] This Court ought to develop the common law to keep in step with the “dynamic and evolving fabric of our society” where it can do so in an incremental fashion and where the ramifications of the development are “not incapable of assessment…”

This nicely encapsulates what is wrong with Bhasin v Hyrnew and what is wrong with the supreme court generally. The error is in the premise that a single court is capable of doing what Cromwell has in mind.

The history and genius of common law development, the very reason it has already evolved and kept in step with our society, is precisely because we have had no powers capable of molding it toward conscious ends.

The common law has evolved. This is the most basic intellectual fact that all lawyers know. Take as a pertinent example, Cromwell’s own use of Mellish v. Motteux (1792) Peake 156 170 ER 113. (SCC para 35).

Lord Kenyon ratio in that case, (that the ship seller is liable for latent as well as explicit defects) was disputed over the following decade and mostly settled in 1813, into the rule we know today regarding the vendor’s liability for latent defects.

This evolution required the iteration of many fallible minds, disputing over similar fact situations over several years. Though Kenyon presumed to announce the overall rule, he failed. Ellenborough also failed. There can be no announced rule per se.

Critically, these obiter announcements were separate from the actual ratios in their cases, which always turned upon more modest elements, such as the degree to which a particular buyer could actually inspect a ship in the water.

It is the ratios that survive the risible setting aside of obiters.

In para 40 above Cromwell doesn’t have the modest goal of writing a narrow ratio giving Bhasin satisfaction and letting the common law use his ratio as it will. The supreme court presumes to ‘fix’ and ‘renovate’. What would a refereed biology journal think of a writer who presumed to ‘fix’ and ‘renovate’ evolution?

The evolution of the common law like evolution itself has been unconscious. It is as arrogant of the supreme court to presume to be able to consciously manipulate the principle of good faith in contract, as it would be for Darwin to wake up one morning and determine that he should try and lengthen the bill of a finch – just to help evolution along and whatnot.

 

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