Reconciling R. v. Fitzpatrick’s Fuel Ltd. with Rhone v. The Peter A.B. Widener

The employee met each of these criteria and therefore Fitzpatrick’s Fuel Ltd. was liable for the employee’s conduct. If these same criteria had been applied in Rhone it seems that the same conclusion should have been reached for Great Lakes Towing. Captain Kelch acted within the field of operation assigned to him, was not in fraud of the corporation, and his navigation of the ship was intended to benefit the company. Yet it was found that Captain Kelch was not a “directing mind” and therefore liability for his conduct could not be imparted onto Great Lakes Towing.

However, there is another more subtle distinction made in Fitzpatrick’s Fuel that might help explain this apparent disparity.  The company existed for one purpose- the operation of the gas bar and the convenience store. The single employee in the store was therefore responsible for executing the company’s entire business and acted as the only company representative. The court made these observations, but did not provide any further rationale on why they are so important to note. My take is that, as the sole person responsible for the entirety of the company’s operations at that point in time, the employee had transcended the simple operation of his duties. He had become in effect an extension of the directing mind of the business and of the business itself. At that point, it could not be argued that his actions should not be attributable to the company.

In comparison, Captain Kelch was not the sole representative responsible for the business of Great Lakes Towing. He therefore was capable of being considered something other than a direct extension of the business.