Justice Rand's Commercial Law Legacy: Contracts and Bankruptcy Policies

Article excerpt

An article on Justice Rand's commercial law jurisprudence provides a number of challenges. Much has been made of his contributions in constitutional law and the impact of "policy considerations" on freedoms of speech and religion. (1) His voice, it has been said, "reverberates even in our most recent constitutional jurisprudence, be it federalism, civil liberty or social justice." (2) His decision in Roncarelli v. Duplessis (3) stands as a classic in constitutional law, leading one author to conclude that "during his time on the Supreme Court of Canada, Justice Rand almost stands alone among Canadian judges as the most aggressive and assertive defender of individual liberties." (4) Yet little has been said of his contribution to the commercial field. Justice Rand participated in sixty-nine broadly classed commercial law and contracts cases. (5) Does Justice Rand's commercial law jurisprudence have a legacy? This essay seeks to answer that question.

What constitutes "commercial law" is open to debate. (6) In Canadian law schools, there are a variety of approaches to its teaching. Sales, consumer protection, secured transactions, banking and bankruptcy may all find a home in a broad commercial law survey course. Alternatively, instructors may teach each of these topics as stand-alone courses. This paper does not examine every facet of commercial law. Nor does it purport to cover corporate law, (7) banking law (8), intellectual property (9) or restitution. (10) Roy Goode suggests that commercial law is "that branch of law which is concerned with rights and duties arising from the supply of goods and services in the way of trade." (11) This definition implies that commercial law's core consists of sales, secured transactions along with underlying contract principles. To this list, one can add bankruptcy law, as each commercial transaction raises the possibility of the financial failure of one of the parties. (12)

Even after narrowing a definition of commercial law to contracts, sales, secured transactions and bankruptcy law, one must consider the impact of significant statutory reform since Justice Rand's time on the Supreme Court of Canada. Thus, what he had to say about conditional sales contracts will be mere history to a twenty-first century commercial lawyer practicing secured transactions. Personal property security legislation has revolutionized the law of conditional sales, floating charges and chattel mortgages in each of the common law provinces and territories. (13) Thus, this essay need not consider cases (14) involving the various statutory and common law regimes governing secured transactions prior to such enactments or other commercial statutes or regulations that have long been repealed. (15) Finally, there are too few sales cases to identify any trends. The Supreme Court of Canada did not consider any general principles arising under provincial Sale of Goods legislation. (16) Therefore, the law of contracts and of bankruptcy will be the focus of this article.

A final challenge is that Justice Rand's commercial law decisions may not have raised matters of national importance, given that Rand's time on the bench predated the 1975 abolition of appeals as of right in civil matters. (17) The unrestricted right of appeal had led the court to devote a "disproportionate amount of its time and effort disposing of issues which raised no new or important questions for the country." (18) Despite these restrictions, a commentary on Justice Rand's commercial law jurisprudence helps "complete the judicial profile" of one of Canada's most important jurists. (19) It offers insights into a largely ignored aspect of Justice Rand's opinions and a perspective on Canadian commercial law in his time.

A) LAW OF CONTRACTS

One work suggested that, although Justice Rand had a "well-defined and developed background theory" in civil rights cases, in common law matters "there appears to be no background theory and, perhaps because of this, very few notable accomplishments. …