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Unit 5: Applying Lord Hoffman’s Analysis to The Rhone and Fitzpatrick’s Fuel
If I’m understanding Lord Hoffman’s judgment correctly, he is arguing that our focus on the analogy of the “directing mind” obscures its true purpose, which is to identify the person designated by the relevant attribution rule as liable. As “the question is one of construction rather than metaphysics” (para 22), we need to derive the attribution […]
Discussion 5.1: Reconciling Rhone and R v Fitzpatrick’s
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 […]
4.7: General Conclusions Drawn Concerning the Law on Corporate Purpose
As the case readings suggest, the corporate purpose cannot be defined narrowly as only serving the shareholders’ interests. Dodds noted that fiduciary duties are owed to a much larger constituency, including shareholder interests, the interests of corporate employees, and broader social goals. The decisions from the SCC in Peoples and BCE suggest that directors will […]
General Conclusions: Corporate Purpose and Many Ambiguities
The notion that particular circumstances may entitle the court to disregard the separate existence of corporate personhood recurs in many cases. In my view, this notion of circumstantial consideration seems beneficial, but is too often plagued by turning into yet another source of ambiguity. Of course, as the court notes, certain situations, such as fraudulent […]
Discussion 5.1 On Rhone and Fitzpatrick
The issue in Fitzpatrick’s Fuel was whether despite the care exercised by its sole officer director, and shareholder, should the company still be held liable for the wrongful actions of Parviz Zamzam? The Crown said yes, and submitted that a correct application of the “identification theory” would prove as much. Using the parameters delineated in […]
Reforming Corporate Personhood?
Corporate personhood, as set out by s.30 of the Business Corporations Act is unequivocally a controversial concept. Although it is clear that corporations require certain legal protections in order to be able to function effectively, the desirability of conveying the rights of “an individual with full capacity” upon an artificial construct animated by humans for […]
Blog Activity 5.3 – Section 33 – Say What?
In my opinion, section 33(2) would seem to increase the scope of potential remedies that a court could consider when faced with a corporation that breached 33(1). Without section 33(2), a court might rush to nullify the actions of a corporation that was in breach of section 33(1). Section 33(2) may give a court pause, […]
Discussion Activity 4.4
The holding in Hercules Managements Ltd. that the duty of care in the preparation of the audit report was owed by the auditors to the shareholders collectively, and thus to the corporation itself, rather than to individual shareholders limits the ability of individual shareholders to bring claims personally. The notion that the negligently prepared reports […]
4.6 – Adequate Capitalization
In my view a measure of adequate capitalization should be established by industry regulators, and should be flexible to changing institutional norms. When entities shift their practices to take advantage of capitalization requirements (such as taxi owners setting up a particular corporate structure), regulators should be able to quickly modify the capital requirements. This is […]
4.2 Eliminating Corporate Personhood
If s.30 of the BC Business Corporations Act were to be eliminated and replaced by an inclusive list of rights, powers and privileges without invoking any form of personhood, it in some ways may provide some clarity. By doing so, we would more easily be able to identify and define permitted corporate action strictly in […]