In my opinion, the decisions in Rhone and Fitzpatrick’s are not reconcilable. In Rhone the court lays out that “the key factor which distinguishes directing minds of normal employees is the capacity to exercise decision-making authority on matter of corporate policy, rather than merely to give effect to such policy on an operational basis”. The court found that because the captain in that case had no authority over the management and operation of the business he was not a directing mind of the corporation.
In Fitzpatrick’s, on the other hand, the court ignored that phrasing and instead relied on Canadian Dredge, an earlier SCC case than Rhone. Using the principles of the identification doctrine set out in Canadian Dredge, the court finds a cashier was part of the directing mind of the corporation when selling liquor to a minor, and the corporation was therefore liable. If the court had examined the decision in Rhone regarding directing minds, I find it unlikely that they would have come to the same conclusion. It is highly unlikely that a gas station attendant could be classified as exercising decision making authority on matter of corporate policy. Furthermore, the court in Beverly Corners v BC looked at the same issue as in Fitzpatrick’s and decided the cashier was not a directing mind. It seems that Fitzpatrick’s is the odd one out. Rhone is an SCC decision, while Fitzpatrick’s is a provincial court decision, so the decision in Rhone should stand as the authoritative principles for a directing mind.
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I agree with your analysis, Seamus. While reading Fitzpatrick’s, I found it very odd that the judge made no mention of The Rhone given that it’s the more recent SCC decision on this subject. This is one of those situations where I feel like laypeople would greet the ruling in Fitzpatrick’s with no small amount of incredulity, and rightfully so. Even common sense tells us that labelling a cashier as the “directing mind” of the company is silly, for all the reasons discussed in Beverly Corners. The approach in The Rhone, with a focus on decision-making authority, is much more reasonable.
I came to the same conclusion as Seamus – that the two cases seem inconsistent. However, I also thought that Fitzpatrick’s could be differentiated from The Rhone in terms of context. Fitzpatrick’s involved criminal law wheres The Rhone involved contracts and a discussion of actual fault or privity.
Perhaps there is a separate criminal law standard for the “governing mind and will” test since in Fitzpatrick’s, the employee was held to be the directing mind. This could be because the Criminal Code wants to concentrate on individual parties, in order to actually give meaning to s. 7, whereas the field of contracts/business law is more flexible as to the civil standard of the “directing mind” test.