Rereading Wastech: the is, the ought, and the what might be
Mees Brenninkmeijer, Doctor of Civil Law Candidate, McGill University Faculty of Law
1. Introduction
We all know what it is like to play a game. It could be a very simple game, like rock paper scissors, with only three possible moves and a clear ritualistic dance to determine the outcome. Or, it could be more a sophisticated and intricate game, like Go, the New York Times crossword, or a rugby match. But when asked why we play, rather than what or how, we may not always have a clear answer. The same holds true for law. There are players, collective rules about what is allowed, as well as directions about how to resolve normative disagreement that arises. One way to view law is thus as “the co-operative, though competitive, social enterprise which is the game.” [1]
Importantly, due to the open texture of both, we cannot reduce law or games to mere instructions directing players and officials to do certain things under certain conditions. If anything, such presupposed certainty conceals the ways in which those playing the game may approach it. To fully understand why we play “the game of law”, we must consider the relations between those involved and how they navigate the free, yet still limited, space that legal rules give us. How much room, in other words, is there to stretch the rules? How are our moves in the game to be judged and understood, both by ourselves and by others?
These are questions that the Supreme Court of Canada indirectly addressed in Wastech Services Ltd v Greater Vancouver Sewerage and Drainage District (hereinafter Wastech). In its decision, the Court ruled on the inherent limit that the organizing principle of good faith imposes on the duty to exercise discretionary powers in a contract. While both the majority and concurring judges agreed that parties must exercise such discretion reasonably, they differed on what that meant. Here, the decision will be read through the analogy of playing a game. That is not to say that long-standing business contracts should be equated to games—because they are not. It will, however, allow us to think creatively about different approaches to law.
The opinions of the majority and concurring judges in Wastech present us with two readings of the “same game”. This article aims to relate those readings to essential features of the debate between HLA Hart and Lon Fuller, whose opposing theories of legal positivism and a distinctive natural law are foundational to modern jurisprudence. Ultimately, while these two readings do not provide a complete picture as to why we play in the first place (or as to what purpose “the game of law” serves), a third reading—encapsulating playful, dynamic, and almost magical elements of law—might.
This article first introduces the game of Wastech, briefly describing the case’s relevant facts and central question (Section 2). It then discusses the ideal of fidelity to law as one of the essential features of the Hart/Fuller debate (Section 3), before analyzing the Court’s decision in light thereof (Sections 4 and 5). Finally, this article provides additional insights that encourage us to think differently about legal certainty and the exercise of contractual discretion, as well as about our theoretical approaches to law more broadly (Section 6).
2. A Game of Wastech
Wastech, a waste transportation and disposal company, entered a long-standing contract with the municipal district of Greater Vancouver. Under the contract, Wastech was to remove and transport waste to three different disposal facilities. Depending on which facility the waste was directed to and how far away that facility was located, Wastech would be paid a different rate. The contract did not guarantee a certain annual profit, and it gave the municipal district absolute discretion in choosing which facility to allocate the waste to. They had been playing this “game” for fifteen years when the municipal district reallocated waste to a facility that was closer, leaving Wastech with a profit well shy of its target. The company (to no surprise) alleged a breach of contract.
One can easily identify a paradox here: how can the exercise of “an apparently unfettered contractual discretion” possibly constitute a breach of contract? [2] The Court traces the answer to the standard that parties must exercise their “contractual duties honestly and reasonably and not capriciously or arbitrarily.” [3] What this means is that the exercise of a contractual discretion, even if unfettered, is constrained by good faith principles. This, intuitively, is how we view games as well. Rules may grant players a near-absolute discretion to make their next move. But, as with cheating in cards or dangerous tackling in sports, they are doing something wrong; they are not playing in the spirit of the game.
The concern raised in Wastech, then, is what constraints this duty puts on the exercise of contractual discretion. While the spirit of the game places an inherent limit on the way in which we allow ourselves to play, it also makes us want to play and accept the rules of the game. What is it about law, in other words, that deserves our loyalty? This question, I believe, closely resembles “the ideal of fidelity to law”—which Fuller identified as the central concern in his debate with Hart. Interestingly, like Hart and Fuller, the judges in Wastech acknowledge that the chief issue is how we can best define and serve this ideal of loyalty. [4] They too, however, differ on the answer.
3. The Ideal of Fidelity to Law
Much of the debate between Hart and Fuller centered on the distinction between law and morality.
An analytical positivist, Hart defended the idea that “what law is” and “what law ought to be” are separate things. To him, it is a distinction that must exist if we are to talk about the concept of law. The question, however, is how to balance between these separate duties. Hart used the distinction between the “core” and “penumbra” of meaning as his main conceptual tool for this. He explains that, because of language’s open texture, “[t]here must be a core of settled meaning … as well [as] a penumbra of debatable cases in which words are neither obviously applicable nor obviously ruled out. These cases will each have some features in common with the standard case; [yet] lack [or be accompanied by] others … not present in the standard case.” [5] In other words, if a rule forbids us to take a vehicle into the public park it surely includes cars—but what about bicycles, roller skates, or strollers; are they “vehicles” under the rule as well?
To resolve this uncertainty, and to explain why a legal rule is still a valid legal rule despite ambiguity present, Hart introduces what he calls “the rule of recognition”. This rule serves as the ultimate indication of whether a rule is to be supported by the social pressure it exerts. The rule of recognition, in turn, relies on the “internal point of view” of legal officials, which refers to their practical attitude of rule acceptance. Thus, for Hart, the foundation of any legal system must be this ultimate rule of recognizing social practices as valid legal rules.
In his reply to Hart, Fuller centered the debate around this question of acceptance, or as he called it, “the ideal of fidelity to law”. Fuller believed that Hart’s arguments opened the way to this question but did not satisfactorily answer it. To Fuller, law deserves our loyalty because it represents “some general direction of human effort”, meaning “[a] judge can never achieve a satisfactory resolution of his dilemma unless he views his duty of fidelity to law in a context which also embraces his responsibility for making law what it ought to be”. [6] As Fuller would say, in “penumbral” cases, a judge decides what a rule “is” based on their notion of what it “ought to be” to carry out its purpose.
4. Scorer’s Discretion
Similarly, in addressing the relevant issue, the Court in Wastech agreed that contractual discretion is exercised reasonably when done so in accordance with the purposes for which it was conferred. [7] In writing for the majority, Justice Kasirer points out that, sometimes, the ordinary meaning of the discretionary clause will not make the parties’ contractual purpose clear. In that case, “purpose can only be understood by reading the clause in the context of the contract as a whole”. [8] How else can we determine what the parties intended the contract to be for, when two parties disagree about the exercise of discretion?
The majority sees this “telos” as a natural element of the contract—not as something the parties imply. [9] It thus becomes necessary “to form a broad view of the purposes to the venture to which the contract gives effect, and of what loyalty to that venture might involve for a party to it”. [10] These broad purposes would then be the inherent limits for the exercise of contractual discretion. The minority, in response, took issue with this teleological reading. They argued that by invoking this idea of “loyalty to the venture”, the majority is suggesting that parties must exercise their unfettered discretion in a way that (from the view of the judge) advances the objectives of the contract. [11] This, they say, is not an act of interpretation. This, as Hart would say, is a game of “scorer’s discretion”.
Up to a certain point the perception that “the score is what the scorer says it is” does not cause a problem. Wrongly decided rulings count as much as obviously correct ones. But there is a limit to which our tolerance of incorrect decisions allows the continued existence of the same game. For Hart, the continued existence of a game—or its ability to develop into a new one—ultimately depends on the scorer’s assessment of the “core meaning” of the rule. [12] For Fuller, “law’s distinctive function is to direct human action through a particular method or towards a specific end, so anything that fails in that function fails as law.” [13] The difference is that Fuller places law on a continuum of “is” and “ought”—as opposed to separate spheres of “is” and “is not”. In other words, how the game should be played is internal to what the game is.
5. Being Mimsy with the Borogoves
Unlike the majority, the concurring opinion considers that the obligation to exercise a contractual discretion in good faith does not reflect the imposition of external standards, but rather the standards inherent in the parties’ own bargain. [14] They are steadfast in their view that the purpose of discretion—that is, what it means to accept its exercise—is always defined by the will of the parties, as revealed by the ordinary meaning of the contract. [15]
Hart would surely agree with them. From his understanding of law, contractual discretion must—like other rules conferring private powers—be looked at from the point of view of those who exercise them. When we compare these types of rules with “the rules enabling legislators to change and add to the rules of duty, and judges to determine when the rules of duty have been broken”, we can clearly see the same internal perspective that characterizes Hart’s “rule of recognition”. [16] Looking at the law, contractual discretion, or a game from an observer’s external point of view, would (at least according to Hart) not explain why those playing accept it.
Instead, Hart holds on to the idea that law can be built on law—that law, at some point, has been valid. [17] It is as if every player in a game, when challenged about the validity of their move, will simply say: “It’s okay. I was always allowed to do it.” Either we accept the game for what it is or has been, or we reject it and stop playing. This is the law lifting itself by its own bootstraps and is rightly termed a “fabulous retroactivity.” [18] It arguably provides a false sense of certainty, and it separates law from any moral obligation to make the law (or game, for that matter) what it ought to be.
The truth, however, is that one cannot always draw a line between them. There must be an intersection between “is” and “ought”, as judges make clear choices in penumbral cases as to what a rule ought to mean. Any claim to the opposite, Fuller says, is a false dilemma. For Hart and other positivists, it is as if we have a peculiar duty to obey the law as it is on the one hand (simply because it is the law), and a moral duty to do what we think is right and decent, on the other. When confronted with an unfettered contractual discretion, for example, we must then choose between these two duties. For Fuller, this dilemma formulates a problem that is no problem, and therefore makes no sense: “It is like saying I have to choose between giving food to a starving man and being mimsy with the borogoves.” [19]
6. Where the Wild Things Are
Despite the minority’s concern, the majority’s reading does not kill the discretion-exercising party’s power of choice: “it simply limits the range of legitimate ways in which a discretionary power may be exercised in light of the relevant purposes”. [20] It is a “quest for good and workable social arrangements” [21] and implies people as responsible agents in a relation of reciprocity—between subjects and lawgiver, between contractual parties and contract, and between players and the game they play. This possibility of enfranchisement raises pertinent questions, though. The idea that forms liberate does not only allow for the design of a process which is normatively appropriate to some intended end, “but also to its capacity to make sense [of] the expectations and experiences of those who participate in it.” [22] Our agency influences how the institution of law is designed, and we are prompted to consider what makes our participation meaningful.
Neither of the readings in Wastech gives a satisfactory answer as to why we play. It is not because we are able to know what the game is in an objective and ordinary sense, nor because we want to maintain good and workable arrangements that ensure a functioning whole. When playing, we are not primarily concerned with what “is” or what “ought to be”. Rather, we play games because they allow us to think in terms of “what might be”. Playing is the dynamic act of imagination, presented against a backdrop of disagreement and uncertainty. This process of constantly reimagining what might be is why we play.
Law is an imaginative practice—it should embrace and encompass disagreement and uncertainty, not preclude them. For example, Webber argued that the essence of law is not based on the natural existence of normative order, but rather that “[i]t is the act of defining a common position, in the face of continuing disagreement”. [23] There must be a way, if we want to continue our game, to settle such disagreement and come to a common position. In a game of pickup football or ultimate frisbee, players assert personal preferences while arguing about how the game may change, what the relative value and purpose of that new game is, as well as their desire to continue playing or not. All these factors are weighed differently by different players. The crucial step is to move from disparate attitudes to a single outcome.
Similarly, we must embrace law’s relative nature and the uncertainty it brings. Manderson, for example, explained that the “ordeal of the undecidable” “is not an idea but an experience—a performance—necessary for any decision”. [24] The relevance of the tension in Wastech is that it is not always possible to be both faithful to the rules and the purpose serving them: “Each exists in a ceaseless dance with the other.” [25] The tension between these two incommensurable voices provides a dynamic element to what would otherwise be a static system. It encourages us to interact with other players and to consider what it is we are trying to do together. Uncertainty, in that respect, is the strength of legal interpretation; it is “the crucial occasion the legal process provides for listening, communication, and responsiveness.” [26]
Narrative is key in all this. The meaning of law is determined by our interpretive commitments and is constituted by a system of tension between reality and vision. This requires us to adopt an attitude, or “ethos”, that integrates not only the “is” and the “ought”, but also the “what might be”. [27] It combines, if you will, the real and the magical—just as we know from the literary and film genre of magical realism. To adopt such an attitude is to judge critically. [28] There are many possible dimensions to any narrative, which heavily depend on ourselves. [29] This is true for any narrative, whether it is the legal texts we read or the games we play. What matters is that we are a part of it.
7. Conclusion
More than anything else, a close reading of the Wastech game provides us with two understandings of contractual discretion and law more generally: one based on textual certainty of ordinary meaning, the other on normative certainty of good order. There is, however, something magical about the law that these readings do not capture. An alternative reading allows us to think about law and discretion in a more playful and dynamic way. It encompasses, rather than excludes, elements of disagreement and uncertainty and centers the relevance of critical judgment and narrative in establishing who we are and why we play. All those involved in playing a game are presumably made competent to determine its course and—within the space they share—to actively engage in building it. To use a language of games is thus to imagine the world of law more freely.
NOTES
[1] HLA Hart, The Concept of Law, 3rd ed (Oxford: Oxford University Press, 2012) at 40 [emphasis added].
[2] Wastech Services Ltd v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7 at para 62 [Wastech].
[3] Ibid citing the standard from Bhasin v. Hrynew, 2014 SCC 71 at para 63.
[4] Wastech, supra note 2 at paras 72, 132.
[5] HLA Hart, “Positivism and the Separation of Law and Morals” (1958) 71:4 Harv L Rev 593 at 607.
[6] Lon Fuller, “Positivism and Fidelity to Law – A Reply to Professor Hart” (1958) 71 Harv L Rev 630, at 632, 647.
[7] Wastech, supra note 2 at paras 63, 131.
[8] Ibid at para 72.
[9] Ibid at para 91.
[10] Ibid at para 72, citing Philip Sales, “Use of Powers for Proper Purposes in Private Law” (2020) 136 L Q Rev 384 at 393 [emphasis added].
[11] Wastech, supra note 2 at para 132.
[12] Hart, The Concept of Law, at 144–145.
[13] Jonathan Crowe, “Natural Law Theories” (2016) 11:2 Philosophy Compass 91 at 96.
[14] Wastech, supra note 2 at para 131.
[15] Ibid at para 133.
[16] Hart, The Concept of Law, at 41–42.
[17] Ibid at 153; contra Fuller, “Positivism and Fidelity to Law”, at 645.
[18] Jacques Derrida, “Declarations of Independence” (1986) 7:1 New Political Science 7 at 10.
[19] Fuller, “Positivism and Fidelity to Law”, at 656.
[20] Wastech, supra note 2 at para 75.
[21] Roderick A Macdonald, “Was Duplessis Right?” (2010) 55:3 McGill L J 401 at 427.
[22] Kristen Rundle, “From the Perspective of Personhood: Thoughts on Rod Macdonald’s Conception of Procedural
Fairness” in Richard Janda, Rosalie Jukier & Daniel Jutras, eds, The Unbounded Level of the Mind: Rod Macdonald’s Legal Imagination (Montreal & Kingston: McGill-Queen’s University Press, 2015) 47 at 49.
[23] Jeremy Webber, “Legal Pluralism and Human Agency” (2006) 44:1 Osgood Hall LJ 167 at 179.
[24] Desmond Manderson, “HLA Hart, Lon Fuller and the Ghosts of Legal Interpretation” (2010) 28 Windsor YB Access Just 81 at 108.
[25] Ibid.
[26] Ibid at 110.
[27] James Tully, “Political Philosophy as a Critical Activity” (2002) 30:4 Political Theory 533 at 536.
[28] Jennifer Nedelsky, Law’s Relations: A Relational Theory of Self, Autonomy, and Law (Oxford: Oxford University Press, 2011) at 58.
[29] See, for further reading, Desmond Manderson, “Desert Island Discs (Ten Reveries on Pedagogy in Law and the Humanities)” (2008) 2:2 L & Humanities 255 at 261; Marianne Constable, The Law of the Other: The Mixed Jury and Changing Conceptions of Citizenship, Law, and Knowledge (Chicago: Chicago University Press, 1994) at 95; Paul W Kahn, The Cultural Study of Law: Reconstructing Legal Scholarship (Chicago: Chicago University Press, 1999) at 6; Joan C Williams, “Critical Legal Studies: The Death of Transcendence and the Rise of New Langdells” (1987) 62:3 NYUL Rev 429 at 496.