To: Professor Bruce Welling

From: Team 10 – Glenn Hines, Michael Rappaport, Yan Wang, and Jonathan Weisman

Date: Oct. 31, 2005 at 12 pm

The establishment of a duty of care for corporate directors and officers in s. 122 of the Canada Business Corporations Act[1] (CBCA) limits the personal liability of these officials <in>while carrying out their duties to the corporation with respect <to third parties>dangling modifier.  As a careful consideration of the <case law>

Judges in the common law system decide cases based on (i) common law, (ii) Equity, and (iii) statute. There is no “case law”.

 and section shows, the obligation placed on officials by s. 122 of the CBCA may serve to justify acts against third parties which would otherwise attract tortious or other liability.  In this way, it can serve as a defence, by means of excuse or justification, for corporate officials when the conditions specified by the section are satisfied.

The problem of personal liability for actions carried out in the course of duties to a corporation arose in the English case of Said v. Butt.[2]  In Said the defendant, <<theatre manager>>explain his fiduciary position, barred the plaintiff, theatre patron, from seeing the play for which he held a ticket.  The Court held that if there had been a <binding>as opposed to? contract between the <theatre>a theatre is not a person. Clarify and the plaintiff (the Court found otherwise on the facts), the manager would have been liable [at common law?] for inducing breach of contract. Yet Equity, the Court concluded, would step in to relieve the manager of his liability, based on his fiduciary obligation to [word missing?] the company’s best interests.  In this case it was in the company’s best interest to bar this plaintiff from the performance [and to pay any damages for breach of contract?] as he was an unfriendly critic.

The operation of this relief was explained by <Gallon>Callon? J in McFadden v. 481782 Ontario Ltd.^[3] Two directors of a corporation were being sued for inducing their <company>corporation to breach its contract with an employee. Called upon to apply the relief spoken of in Said v. Butt, <<G>>allon J. provided the following explanation:

The existence of a duty or obligation can therefore provide a defence, by way of justification, to the liability stemming from the agent of a corporation’s tortious acts.

HIERARCHY OF OBLIGATIONS

This explanation raises an obvious objection: is not the agent under a general duty to abstain from knowingly violating the legal rights of others?  Imperial Oil v. C. & G. Holdings Ltd.^[4] suggests that this duty must be weighed against the duty to act in the corporation’s best interest, but does not offer a basis on which to weigh the two options.  Such a basis may, however, be found in the different natures of the obligations themselves.

In Individual Liability for Corporate Acts[5], Bruce Welling advances the theory that obligations may be ranked hierarchically, depending on whether they arise under statute, <at>in equity, or [at] common law.  Since an equitable obligation is more important than a common law obligation, the former serves as a defence against an act which breaches the latter.[6] Since the principle of Parliamentary supremacy[7] permits the <<Queen-in-Parliament>>who is that? to supersede the common law or equity by statute, it follows that obligations established by statute supersede competing obligations which exist only <at>in equity or [at] common law.  By this reasoning, we reach a ranking of obligations, whereby an obligation ranked more highly may serve to justify the breach of a lower-ranking obligation.

What, then, happens in the following two special cases: obligations which may be owed under multiple ranks at the same time<:>x both in common-law and statute, for example; and obligations which are owed at the same rank and at the same time?  In the former case, the answer is clearer: if the obligation falls into multiple ranks, it must fall into the highest of those, and may be considered under that heading.  The latter case is more difficult and may depend on the facts.  If possible, refraining from breaching either is surely safe.  Facing two equal conflicting statutory obligations a director’s only choice is that he cannot make a choice.  The director must announce a conflict and withdraw from the undertaking.  Of course, this position assumes that all equitable or all statutory obligations are equal, but the ranking of obligations within their hierarchical ranks is beyond the scope of this paper.   

THE OBLIGATIONS OF SECTION 122

To understand what kind of justification may be offered by section 122 of the CBCA, we must know what obligations it imposes.  This section crystallizes what was once an <<official’s>>whose? equitable obligation to the corporation into a statutory one.  Since the CBCA is a statute, and in consideration of the summary conviction offence for the breach of any CBCA provision provided by s. 251 of the Act, the duties imposed by the CBCA are statutory and potentially criminal.[8]

Subsection (1) establishes two obligations for directors and officers either exercising their powers or discharging their duties: (a) to act honestly and in good faith with a view to the best interests of the corporation; and (b) to exercise the diligence, care and skill of a reasonably prudent person in like circumstances.  Subsection (2) establishes a statutory duty for directors and officers to comply with the Act, and all regulations, articles, by-laws, and any unanimous shareholder agreement. Subsection (3) prevents relief from these duties by any means save a unanimous shareholder agreement which reassigns them, as referred to by subsection 146(5) of the Act.[9]

Directors and officers are obliged under the threat of criminal penalties to act in the best interests of the corporation. In the performance of their obligations s. 122 protects corporate <<officials>>who? from personal liability for claims arising from either Equity or the common law, since their obligation[many people; one obligation?] to the Queen ranks higher than obligations owed to others <in>x either [in] Equity or <the>at common law.  Section 122 may serve as a defence for tortious acts subject to three conditions: (i) the corporate <<official>> was exercising authorized powers or duties; (ii) the <<official>> was acting in the best interests of the corporation; and (iii) the <<official>> met the duty and standard of care outlined below.

(i) POWERS AND DUTIES

Subsection 122(1) <<stipulate>>wrong word that the section applies as a defence only for directors or officers acting within the scope of their authority. Thus, if directors or officers act beyond the scope of their authority <conferred upon them by the corporate constitution>is that the source of the authority? Explain, they may be found personally liable for tortious acts. Whether a corporate fiduciary is acting within the scope of his authority is an objective test.

(ii) BEST INTERESTS OF THE <COMPANY>CORPORATION

Subsection 122(1)(a) does not define the terms “best interests” of the corporation. In Deluce Holdings v. Air Canada[10] the Ontario <<General Division Court>>wrong label held that when assessing the director’s conduct in relation to the statutory fiduciary duty, the question is what directors have uppermost in their minds after a <reasonable analysis>by whom, and whence the “reasonable” requirement? of the situation. Thus, the test of whether a corporate fiduciary is acting for the best interests of the corporation is subjective.  However, <<there must also be reasonable grounds for the director’s subjective belief>>I doubt it (but I read your footnote).[11]

 (iii) DUTY AND STANDARD OF CARE

<<At common law, a director or officer is only required to conform to the standard of a reasonable person>>???, whereas s. 122(1)(b) requires a director or officer to conform to the diligence, care and skill of a reasonably prudent person. This subsection has been interpreted liberally by the courts. In Pente Investment Management Ltd. v. Schneider Corp.[12] the Ontario Court of appeal adopted the <<business judgment rule>>There’s no such rule. Clarify. <The Court held that directors must act reasonably and fairly>nonsense. The court considers whether the directors made a <reasonable>rational? decision, not a perfect decision. As long as the decision is <within the range of reasonableness>??, the court ought not to substitute its opinion for that of the board even though subsequent events may cast doubt on the board’s determination. If the directors select one of several <reasonable>x alternatives, deference is accorded to the board’s decision. In Soper v. Canada[13] the Federal Court of Appeal held that the precise standard to be met depends upon the personal knowledge, experience, and position of each director and officer. Essentially, courts will defer to the business judgments of directors and officers and business decisions are <presumed not>I don’t think that is accurate. Clarify to be a breach of duty in the absence of fraud, illegality, or conflict of interest on the part of the decision maker.[14]

APPLICATION OF THE SECTION 122 DEFENCE

Subject to its three requirements, section 122 should therefore provide a defence of justification when a corporate <official>??? is faced with the breach of a lesser-ranked obligation.  This defence will always be subject to three conditions, failure of any one of which <should>note that this word merely expresses your personal preference mean the failure of the defence: (1) conduct must be within the powers or duties of the <<official>>; (2) conduct must be in the best interests of the corporation; and (3) conduct must be undertaken with the care of a reasonably prudent <individual>person? in like circumstances.

A quick survey of relevant cases <<should>> show whether these expectations can hold up against a number of actions: (i) the tort of inducing breach of contract; (ii) other torts, such as (a) torts <prohibited>odd word by statute, (b) torts not prohibited by statute, and (c) negligence; and (iii) knowingly participating in someone else’s breach of fiduciary duty.

(i) INDUCING BREACH OF CONTRACT

The tort of inducing breach of contract is committed when a person, knowing that there is a contract between the plaintiff and a third party, induces the third party, without justification, to break the contract, with the intention of procuring the breach of contract.[15] Corporate fiduciaries have not been held liable for this tort when acting within their authority and in the best interests of the corporation.   This state of affairs coincides neatly with the defence predicted under section 122, assuming that no statutory obligation prohibits the inducing of the breach of contract.   Does it matter whether the corporation is party to the contract?

In Imperial Oil Ltd. v. C&G Holdings Ltd.,[16] the Newfoundland Court of Appeal laid down a new principle to evaluate the actions of <<officials>> in this context.  Interpreting Said v. Butt broadly, the Court held that even when a director has not acted <bona fide,>explain meaning an additional factor must be demonstrated to expose <them>to what plural noun does this plural pronoun refer? to tortious liability.[17]  Given directors’ subjective role in establishing corporate interests, some external factor such as malice must be demonstrated.  Under this higher threshold, it would be more difficult for plaintiffs to sue directors and officers of corporations for inducing the <company's>corporation’s breach[es] of contract. Recently, this approach was followed by the Manitoba Court of Queen's Bench in McLoughlin v. All Canadian Emblem Corp.[18] This line of authority suggests that malice or ulterior motives are <the>x evidence that a director or officer?] is not acting in the best interests of the corporation.   

In McFadden,[19] the Ontario High Court of Justice held that two directors who authorized payments <to themselves as shareholders>clarify were acting with a view to their own interests and not those of the corporation, and so could not be said to be acting in the best interests to the corporation.  By not acting in the best interests of the corporation they were precluded from the justifying their defence[s] by reference to their dut<y>ies to the corporation.Don’t mix singulars and plurals

In Torgan Enterprises Ltd v. Contact Arts Management Inc. and Jimmy K Sun,[20] the Ontario Court of Justice held a corporate director personally liable for inducing the <company>was it a corporation? to breach a contract with a landlord by leaving the premises prior to the term of the lease and without notice. In this case, the Court questioned whether the decision to breach the lease was <truly>delete in the best interests of the corporation as it had had a detrimental effect on its business. <<This case could be explained by reference to the standard of care required by subsection 122(1)(b).>>was it a CBCA corporation?  If the director did not exercise the care of a reasonably prudent person he would have breached his statutory obligation, and be prevented from relying on it.  Even so, the director should still have been able to claim that he was carrying out his equitable obligations to the corporation.  Under the hierarchy of obligations this equitable obligation would still be enough to justify his common law breach.  If so, the case was wrongly decided, notwithstanding that section 122 may be inapplicable.  This case was not followed in Jade Agencies Ltd. v. Meadow's Management Ltd.[21] and it was distinguished in Marinos v. 1217982 Ontario Inc.[22] 

The instances where liability has been imposed in claims of inducement of breach of contract therefore coincide almost perfectly with the expected exceptions to the protection granted by section 122.  The application of the defence provided by this section should, therefore, be applied without difficulty in such cases.  This is because modern cases of this tort are easily compared to the similar fact pattern in the widely accepted Said v. Butt.  However the Said v. Butt defence has been confined only to this tort and therefore other torts and liabilities must be examined to see how the hierarchy of obligations is applied. Haven’t recent cases suggested that the defence only applies if the corporation’s contract is breached? I note that you covered this point later, but it would have made sense to preview it here.

(ii) OTHER TORTS

            a) TORTS ALSO PROHIBITED BY STATUTE

The statutory obligation defence is not available to a corporate director or officer who takes part in or authorizes any <tort that is prohibited by statute>clarify what you mean such as fraud or <battery (assault)>which?.  It is true that the commission of <this>which? tort may be in the best interests of the corporation; however to the extent that these torts are also prohibited by statute <they are>clarify – to what does “they” refer? obligations to the Queen.  The s. 122 defence is therefore not applicable for two reasons.  Firstly, the director must have been acting outside his range of powers or duties.  This is because a director draws his power and duties <<from the corporation and its constitution>>isn’t the source statutory? and a corporation cannot authorize or empower someone to breach an obligation owed to the Queen.  Thus the defendant cannot qualify for the defence.  Secondly, if he could qualify for the defence we would have two equal conflicting statutory duties.  Therefore one cannot defeat the other and our hierarchy of obligations is nullified.  The defendant <should? have declared his conflict, excused himself from the situation and not acted at all. 

In Toronto Dominion Bank v. Leigh Instruments Ltd. (trustee of),[23] the Ontario Divisional Court refused to strike out a statement of claim against certain directors and officers of a corporation alleging that they had fraudulently given false information to the bank to encourage it to grant the corporation more credit. Certain acts of fraud are prohibited by various sections of the Criminal Code.[24]  The court said that it is no excuse that the employee was obeying orders of the employer or that the act was expressly authorized or ratified by the corporation. Again this is correct so long as the fraud committed was prohibited by the Criminal Code.  More recently, in Standard Chartered Bank v. Pakistan National Shipping Corp.,[25] a case involving fraud by a director of a <corporation>, the House of Lords held the director personally liable. The House of Lords reasoned that, unlike unintentional torts such as negligence, it was no defence in an action for fraud to characterize it as being committed on behalf of the <<corporation>>Wasn’t it a company in that case?.

            b) TORTS NOT ALSO PROHIBITED BY STATUTE

While <it is accepted>by whom? that s. 122 cannot serve as a defence for personal liability for corporate directors who commit torts that are also prohibited by statute, the <<case law>>see earlier coment is less clear on whether it can protect corporate officials who, in the course of their duties, commit torts that are not prohibited by statute.  However, it is clear after applying the hierarchy of obligations that it <should>would?.  

Best v. Spasic[26] involved an action by the plaintiff employee, Best, for damages arising out of defamatory statements contained in a letter of termination written by the defendant, Spasic, in his capacity as president of the corporate employer. This case neither drew a distinction between different heads of tort nor limited personal liability to intentional torts. In finding the defendant liable, the Ontario Superior Court of Justice followed a narrow interpretation of the Said v. Butt defence. According to C.R. Harris J. <the>why bold? Said v. Butt exception is confined to cases where an <<employee>>? causes a breach of contract. It only applies to incidents where there is an overlap of claims: <O>one in contract against the corporate entity and one in tort for wrongfully inducing a breach of contract against the employee.

C.R. Harris J. conceded that even if he was incorrect in this narrow reading of Said v. Butt, publishing defamatory statements is not a duty of any employee involved in a termination. Employees are entitled to be treated with respect and dignity at all times; defaming them during the termination process is not in the interests of any <company>?. As such, the Said v. Butt exception would not apply.[27] Thus, this case can be read as one where the <defense>defence contained in s.122 failed because the corporate fiduciary failed in his fiduciary duty and was thus precluded from relying on the compulsion of duty justification.     

In Lana International Ltd. et al. v. Menasco Aerospace Ltd.[28] the plaintiff, Lana, resold landing gears originally purchased from the defendant.  When the gears were recalled the plaintiff sued the defendant corporation for various torts and sued that corporation’s president (Cybulski) personally for negligence, negligent misrepresentation, defamation, and inducing breach of contract.  Cybulski moved for summary judgment claiming he was immune from personal liability in tort as these events occurred while he was performing his duties as an officer of the corporation. The Ontario Court of Appeal held that the <<<motions judge>>> erred in extending an overly broad protection to Cybulski from tort liability.  He was not held to be protected from liability simply because the alleged tortious acts were done within the scope of his corporate obligations.  If the court came to this conclusion based on the fact that the defendant argued that he was acting in the course of his duties but failed to prove it was in the best interests of the corporation then the conclusion is correct.  Both requirements are necessary.  This case was an appeal of a motion for summary judgment decision and the <<<Motion’s Judge>>>be consistent with labels failed to mention the best interests requirement.  Therefore it is unclear what the Court was basing <their>”Court” is a singular noun decision on.  If the Court was making a sweeping statement that directors are not protected from liability in these torts, where there is no statutory equivalent, simply because they were acting in the course of their duties then <<they>>?? have not completed the analysis.  Had <<they>>?? gone on to mention that if they were acting in the course of their duties and in the best interests of the corporation the defendants would have been protected, the Court would have been correct.  

            c) NEGLIGENCE

Bruce Welling has suggested that liability for negligence <should>could? be imposed only where the alleged tortfeasor has a duty towards the plaintiff arising out of a relationship to her, not simply by virtue of the corporation having a duty arising out of its relationship to the plaintiff and the tortious actions occurring in her general area of responsibility. In the latter case, the tortfeasor <should>would be considered merely the "human manifestation of the corporation" and, as such, not personally liable.[29]  An alternative analysis would be to combine the test for finding a duty of care in tort law with the statutory obligation found in s. 122.  The <<Anns/Kamloops>>Not a word[30] test is the accepted test for duty of care.  It has two elements: (i) necessary proximity of the plaintiff to be considered as being owed a duty and (ii) are there any <<policy>>? considerations that should negate the <prima facie>italics duty.  Assuming that the first branch is satisfied the statutory obligation to the corporation and not the plaintiff will always <<be a policy consideration negating>>negate the duty under the second branch.  It is difficult to conceive of a better <policy>delete: policy if a politician’s concern reason than an obligation to the Queen and therefore there can be no duty of care <under>because of? s. 122.   

In any event, should a duty be found, the corporate officer could not be found liable in negligence because he could plead statutory compulsion. A corporate fiduciary has a statutory obligation to the corporation to act in its best interests that ranks higher than any obligation owed to a potential plaintiff at common law.

However, in Berger v. Willowdale A.M.C.[31] the Ontario Court of Appeal held a corporate president who neglected to have a walkway cleared personally liable in negligence when an employee slipped on the ice.  In this case, the employee was barred from recovering from the corporation because of Part I of the Workmen’s Compensation Act.[32]  She was awarded damages against the corporate president, who was also the sole shareholder.  In Berger the majority of the Court (Brooke J.A. and Cory J.A) indicated that a personal duty would not arise in every case but would depend on a variety of factors, including the size of the corporation, the number of employees, the nature of the business, and whether the danger should have been readily apparent to the manager. Here, the manager had the authority and the ability to control the situation and had ready access to the means to rectify the danger. The [reasons for] judgment also included a strong dissent by Weatherston J.A. in which he <argued>judges don’t argue that the Legislature has said that neither the <company>corporation as employer, nor the neglectful employees, are liable <of a>in tort. The remedies under the Workmen's Compensation Act have been substituted for <rights>remedies? at common law. If <they>who are these people? are not liable to the plaintiff, then the defendant also <should>would not be liable as a party to <<<their>>>??? careless conduct.

According to Professor Bruce Welling this case was wrongly decided. It was the corporate walkway, not the president’s walkway (nor the shareholder’s walkway) that was icy. It was the corporation’s responsibility to provide a safe workplace. If the president owed any obligation to clear the ice, the obligation was owed to the corporation, not the employee.[33]  An alternative analysis might hold the president responsible for having failed to meet the standard of a reasonably prudent director under s. 122(1)(b), thereby precluding his reliance on section 122, for having failed to ensure that the snow clearing was being effectively done.  Few cases have followed Berger, and none has evaluated this aspect of section 122.   

(iii) KNOWINGLY PARTICIPATING IN SOMEONE ELSE’S BREACH OF FIDUCIARY DUTY

Knowingly participating in another’s breach of fiduciary duty is not a tort but rather an equitable claim as the idea of a fiduciary relationship is an equitable concept.  A person who knowingly participates in another’s breach of fiduciary duty is accountable for any profit gained thereby in the same manner as a fiduciary himself.[34]

In ADGA Systems International Ltd. v. Valcom Ltd.[35] the plaintiff brought an action against a competitor, Valcom Ltd., the sole director of Valcom Ltd., and two senior employees of Valcom Ltd.  The plaintiff alleged that the defendants had induced the breach of the contracts between ADGA and forty-four of its employees.  The defendant director and employees moved for summary judgment dismissing the claim against them relying upon the Said v. Butt defence.  The Ontario Court of Appeal held that there was no principled basis for protecting the director and employees of Valcom from liability for their alleged conduct on the basis that such conduct was in pursuance of the best interests of the corporation. The court recognized that the defendants were acting in pursuit of the corporation's interests, but held that this did not shield them from liability. The Court made it clear that the compulsion of duty defence is available only where the contract that is breached is one to which the corporation for which the managers work is a party. It can never be available where the contract is between two third parties. 

The decision in ADGA is hard to reconcile with the Said v. Butt defence and the defence of statutory compulsion in s. 122. According to Professor Bruce Welling, the director of Valcom Ltd. <<should have>>delete had the defence of statutory obligation available to him since he was acting within the scope of his authority and in the best interests of his corporation.[36]  The question to be asked in cases of conflicting obligations is not one of parties, but one of rank and therefore being a party or not to a breached contract is irrelevant.    

The two Valcom Ltd. employees named <in the suit>as defendants would not have the benefit of such protection. They could not have relied on a statutory obligation, since section 122 applies only to directors and officers. It could, however, be argued that they owed <<equitable obligations>>wouldn’t they be common law obligations? Explain? to their corporation and were acting within the scope of their authority and in the corporation’s best interests by recruiting employees from the rival corporation.  <<La Forest J.>>I don’t think this abbreviation is proper at the start of a sentence in his dissenting <opinion>reasons for judgment in London Drugs Ltd. v. Kuehne & Nagel International Ltd.[37] advocated extending the Said v. Butt exception to cover employees of a corporation who were acting within the scope of their duties and in the performance of their contractual obligations. <<<Carthy JA.>>> who wrote the judgment for the Court clarify: in ADGA refused to follow La Forest’s dissent absent any further considerations by the Supreme Court of Canada. 

However, ADGA suggests a glimmer of correspondence with section 122.  Quoting from Scotia Macleod Inc. v. Peoples Jewelers Inc.,[38] the Court noted that corporate officials are exposed to personal liability if their actions exhibit a separate identity or interest which makes the act complained of their own.  The limitation based on powers and duties seems to be accepted in every category, even if the defence is ultimately of no use.

CONCLUSION

Although section 122 has not been <pled>pleaded? as a defence in these cases, it is clear that the <<present contours of>>?? the law regarding personal liability for corporate <officials>? conform closely to its expected effects.  The <boundaries whose transgressions expose>clarify: boundaries don’t expose directors to personal liability are the same as those framed by the requirements of the section.  If the explanation of justification provided in McFadden can be successfully combined with the hierarchy of obligations outlined by Professor Welling, it should be possible to make effective use of this section to defend directors and to restrict non-statutory claims to corporations whose acts breach the corresponding obligations only and not to directors or officials.

            ->

            =>      There are many careless errors in an otherwise well thought out analysis. Note comments throughout, compare reports of other Teams, then see me if you have questions.  BW 1256 Sat 05 Nov 05

[1] R.S. 1985, c. C-44 [CBCA or the “Act”].

[2] [1920] 3 K.B. 497 (Eng.) [Said].

[3] (1984), 47 O.R. (2d) 134.

[4] (1989), 62 D.L.R. (4th) 261 at 264.

[5] Supreme Court Law Review; (2000), 12 S.C.L.R. (2d) 55.

[6] Ibid. at 62.

[7] Which must be an operative part of Canada’s constitution as contemplated by the Constitution Act, 1867’s preambulatory statement that Canada’s constitution is “similar in principle to that of the United Kingdom”.

[8]According to the CBCA, supra note 1 at s. 251, “every person who, without reasonable cause, contravenes a provision of this Act… is guilty of an offence punishable by a summary conviction<.”>[”.]

[9] Supra note 1 at s. 146(5)

[10] (1992), 12O.R. 131, 8 B.L.R. (2d) 294, 13 C.P.C. (3d) 72, 98 D.L.R. (4th) 509 (Gen. Div.).

[11] Teck Corp. v. Milla<<<r, (1972). 33 D.L.R. 288.>>>improper citation  In essence this means that the director’s story be realistic and not so fantastic as to be unbelievable.

[12] (1998), 42 O.R. (3d) 177, 44 B.L.R. (2d) 115, 113 O.A.C. 253 (Ont. C.A.).

[13] [1998] 1 F.C. 124 (C.A.).

[14] Shlensky v. Wrigley, 237 N.E. 2d 776 (Ill. App. 1968).

[15] Quinn v. Leathem, [1901] A.C. 495 at 510 (H.L.).

[16] <<(1989) 62 DLR (4th) 261>>use consistent citation.

[17] Ibid. at 264.

[18] [2005] M.J. No. 131.

[19] Supra note 3.

[20] [1997] OJ No 2759.

[21] [1999] B.C.J. No. 214.

[22] [1999] O.J. No. 5792.

[23] (1991), 4 B.L.R. (2d) 220 (Ont. Div. Ct.).

[24] Criminal Code, R.S.C. 1985, c. C-46.

[25] [2003] 1 All E.R. 173 (H.L.).

[26] [2004] O.J. No. 5765

[27] Ibid. at para. 15.

[28] (2000), 50 O.R. 3d 97.

[29] Welling, Bruce: Corporate Law in Canada: The Governing Principles, 2d ed. (Toronto: Butterworths, 1991) at 117.

[30] Anns v. Merton London Borough Council, [1977] 2 A11 E.R. 492; Kamloops (City) v. Nielsen (1984), 10 D.L.R. (4^th) 641

[31] (1983), 41 O.R. (2d) 89, 145 D.L.R. (3d) 247 (C.A.) [Berger].

[32] R.S.O. 1980, c. 539

[33] Supra note 5 at 76.

[34] Cook v. Deeks comma? [1916] 1 A.C. 554.

[35] 43 O.R. (3d) 101.

[36] Supra note 5 at 84.

[37] [1992] 3 S.C.R. 299, 97 D.L.R. (4^th) 261.

[38] (1995), 26 O.R. 3d 481 (C. A.).