What is Public Policy?

Lloyd's v. Meinzer, 2001 CanLII 8586 (ON CA)

[17] On the other hand, the public policy exemption language of the Reciprocal Enforcement of Judgments (U.K.) Act is similar to that of the International Commercial Arbitration Act, R.S.O. 1990, c. I.9, which adopts the [UNCITRAL] Model Law on [International] Commercial Arbitration. The commentary on the meaning of "public policy" in the Model Law, found in the Report of the United Nations Commission on International Trade Law on the work of its eighteenth session, June 3-21, 1985 (published in the Canada Gazette, Part I, Vol. 120, No. 40, October 4, 1986, Supplement No. 17 (A/40/17) at p. 3), states [at p. 63]:

297 . . . It was understood that the term "public policy", which was used in the 1958 New York Convention and many other treaties, covered fundamental principles of law and justice in substantive as well as procedural respects. Thus, instances such as corruption, bribery or fraud and similar serious cases would constitute a ground for setting aside. It was noted, in that connection, that the wording "the award is in conflict with the public policy of this State" was not to be interpreted as excluding instances or events relating to the manner in which an award was arrived at.

(Emphasis added)

[18] The issue of whether the concept of "public policy" includes examples of denial of natural justice not specifically listed elsewhere in Article IV, also relates to and informs the third ground of appeal, which is whether enforcement of these judgments would be contrary to the public policy of Ontario. In that context, the appellants ask this court to consider a broader definition of "public policy" than the traditional concept involving moral issues, as it has been defined and applied in the context of enforcement of foreign judgments and other awards. Normally, a denial of procedural natural justice is not considered a moral issue.

[19] Swinton J. commented that a failure of natural justice has been held to be an aspect of public policy and proceeded to deal with the appellants' submissions on that basis. Henry J. in Kalen, supra, was prepared to acknowledge counsel's suggestion that a denial of procedural natural justice in obtaining the judgment may be an aspect of public policy (p. 575 O.R.).

[20] It is not necessary in this case to finally decide whether a denial of natural justice, not specifically referred to in Article IV(1) and (2), is included within the public policy provision of the Reciprocal Enforcement of Judgments (U.K.) Act because, as discussed below, I have reached the conclusion that there was no denial of natural justice in the English proceedings which resulted in the judgments that Lloyd's is seeking to enforce in Ontario. However for the purpose of the analysis, I will proceed on the same basis as did Swinton J., that a denial of natural justice can be considered to be an aspect of public policy and therefore within the public policy ground for refusal to register under Article IV(1)(e).

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[50] The leading case in Ontario on the meaning of "public policy" in this context is the decision of this court in Boardwalk Regency v. Maalouf, supra. In that case, the defendant had gambled on credit at the plaintiff's casino in New Jersey and had written and dishonoured a cheque for $43,000 in payment of the debt. He then allowed default judgment to go against him in New Jersey. When the casino sought to enforce the judgment in Ontario, the defendant argued that it would be contrary to the public policy reflected in the Gaming Act, R.S.O. 1980, c. 183, which made wagering contracts void, consideration for gaming illegal and contracts unenforceable. Carthy J.A. for the majority framed the issue as follows [at p. 742 O.R.]:

The legal issue to be addressed is whether the language of the Gaming Act, apart from its direct impact on domestic contracts, is to be taken as an expression by the legislature which bears the mantle of public policy to the point of making it offensive to participate in enforcement of the foreign judgment. It cannot be every statutory statement or prohibition which raises this defence or little would be left of the principle of comity underlying conflict of laws jurisprudence.

In considering this issue, Carthy J.A. preferred the narrow construction of public policy, quoting with approval the speech of Lord Atkin in Fender v. St. John-Mildmay, [1938] A.C. 1, [1937] 3 All E.R. 402 (H.L.) at pp. 11-12, where he said that ". . . the doctrine [of public policy] should only be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds."