Volume 70 Issue 2, spring 2020, pp. 107-136

Canadian corporate law belongs within a broader Anglo-American legal tradition, sharing many of the features of other common law jurisdictions, most notably England and the United States. Prior to Confederation, Canadian corporate law first emerged from nineteenth-century English legislation and continued to resemble English law – at least superficially – well into the twentieth century. Legislation is only one source of corporate law, however. Just as important is the creation of legal rules through the common law adjudicatory process. Thus, examining case law raises an important empirical question distinct from, though relevant to, the issue of legislative influence – namely, what have been the major influences on Canadian judicial law-making? This article addresses this question through a comprehensive citation analysis of substantially all corporate law decisions by Canadian courts of appeal since 1867. The primary findings are as follows: (a) over the past 150 years, Canadian corporate law – once dominated by English precedent – has become increasingly characterized by domestic Canadian precedent; (b) historically, the Judicial Committee of the Privy Council played an important role in maintaining English influence, such that the prominence of English precedent decreased after 1949; and (c) despite the increasing influence of Canadian precedent throughout the Canadian legal system, Canadian courts continue to cite English cases when addressing unsettled legal issues, preserving a channel for the continuing influence of English jurisprudence in Canada. Surprisingly, Canadian judicial decisions rarely cite American cases, challenging the notion that Canadian courts have been significantly influenced by American law. Ultimately – and despite residual English influence – Canadian corporate law has formed its own distinct identity.

Modern Canadian law draws on a wide variety of legal traditions. Although most closely associated with English common law, Canadian law has also been shaped by the influence of French civil law,1 the increasing recognition of Indigenous law within the Canadian constitutional framework,2 and the domestic adoption and implementation of international legal commitments.3 In addition to these formative sources, Canadian law has also been influenced by its powerful southern neighbour, the United States.4 Last but not least, domestic innovations specific to Canada’s historical, legal, and political experience have also been significant. Today, many areas of Canadian law bear pluralistic influences, syncretizing concepts and principles from a variety of legal sources.

Corporate law is a prime example.5 The Canadian law of business organizations has long been shaped by foreign influences; from the earliest years of European settlement, it was English and French trading companies – most notably, the Hudson’s Bay Company – that spearheaded the colonization of what would eventually become modern Canada.6 Subsequent to the arrival of European trading companies, Canadian corporate law continued to develop under at least three major influences: (a) traditional English company law; (b) American state corporate law; and (c) legislative and judicial developments particular to Canada itself. For much of the post-Confederation period, Canadian law was broadly inspired by English companies legislation, as modified by the distinctly Canadian ‘letters patent’ system of incorporation.7 In recent decades, American legislation has become more influential – the Canada Business Corporations Act (CBCA) and its provincial analogues, for example, draw heavily on American statutes.8 At all times, Canadian courts and legislatures have left their own mark on corporate law, in areas ranging from shareholder protection9 to corporate social responsibility.10 Thus, although many Canadian corporations acts bear similarities to American statutes, they also feature important differences specific to Canadian law.11

Despite these differences, it is tempting to assume Canadian law has become significantly ‘Americanized,’ especially if one focuses on legislation. The legislative reforms of the 1970s and the adoption of the CBCA represented a significant break from the letters patent statutes that had existed in Canada for over a century. Although the letters patent system was a Canadian particularism, these older statutes otherwise followed English legislative conventions, whereas the CBCA and its provincial offspring more closely resembled American statutes. Focusing on statutory law is potentially misleading, however. Many of the defining features of Canadian corporate law – including strong minority investor protections, the nature and scope of fiduciary duties, and even the constitutional status of corporations themselves – have been shaped as much by judicial decisions as by parliamentary legislation.

Viewed from this perspective, it is difficult to say with certainty from where Canadian law derives. Which courts do Canadian judges cite when adjudicating corporate legal disputes? A casual review of corporate law decisions from various decades in Canadian history reveals a wide variety of citation patterns from English, Canadian, and (more rarely) American cases. Although many scholars have highlighted the roles of English and American precedent,12 the relative strength of each country’s influence, the role of domestic Canadian precedent, and the potential influence of other jurisdictions from throughout the common law world (and beyond) remains under-analysed. Even with respect to statutory developments, it is rarely clear whether Canadian courts, tasked with interpreting new legal provisions, have looked to decisions of ‘donor’ jurisdictions (for example, the United States) in construing untested legal rules or, instead, have developed their own approaches specific to the Canadian context. One reason for this lack of clarity is that most scholarship on Canadian corporate law focuses on the language of individual decisions. Although close analysis of individual cases is important to understanding legal doctrine, ‘leading cases’ provide little information regarding wider patterns of judicial practice.13 This lack of broader empirical research can limit our understanding of the development and evolution of Canadian corporate law.

This article addresses this gap by presenting a comprehensive citation analysis of all reported corporate law decisions by Canadian courts of appeal from 1867 to 2017.14 Specifically, this study measures the relative frequency with which Canadian courts of appeal have cited Canadian, English, American, and other foreign decisions over time. The primary findings are as follows: (a) over the past 150 years, Canadian corporate law – once dominated by English precedent – has become increasingly characterized by domestic Canadian precedent; (b) the final appellate authority of the Judicial Committee of the Privy Council played an important role in maintaining English influence, such that the ‘replacement’ of English by Canadian precedent increased after 1949;15 and (c) despite the increasing influence of Canadian precedent throughout the Canadian legal system, Canadian courts continue to cite English cases when addressing unsettled legal issues, preserving a channel for the continuing influence of English jurisprudence in Canada. Significantly – and surprisingly – American cases are rarely cited by any Canadian courts, calling into question common assumptions regarding the influence of American law.16 More than anything else, these findings depict a historical process of declining English influence and increasing Canadian independence – a process I refer to as the ‘patriation’ of Canadian corporate law.17

This patriation process provides important context for the development of corporate legal doctrine. As previous scholars have shown, changes in the law of fiduciary duties,18 shareholder rights,19 and the scope of the oppression remedy20 (among other developments) have often occurred in conversation with alternative approaches in other jurisdictions. For example, following the adoption of the statutory oppression remedy,21 Canadian courts consciously departed from the traditional majoritarianism of English law, broadly interpreting the oppression remedy so as to expand protections for minority investors.22 These and similar developments have shaped many of the key characteristics of Canadian corporate law, distinguishing it within the broader family of common law jurisdictions. How these developments fit within broader historical patterns remains unclear, however, as does the extent of foreign legal influences. By examining the broader history of patriation, this article provides important context for changes in Canadian law, deepening our understanding of the existing corporate law regime.

In addition, this article also speaks to broader debates regarding the ‘openness’ of the Canadian legal system. Many scholars, jurists, and other commentators have praised the Supreme Court of Canada (and, by extension, the Canadian judicial system more broadly) for its openness to international legal innovations, particularly in the area of human rights.23 A related body of scholarship has highlighted the specific influence of the United States, emphasizing the role of American jurisprudence in construing the Canadian Charter of Rights and Freedoms.24 On the opposing side of this debate, political scientists have questioned the importance of foreign decisions in Canadian law, suggesting that claims of foreign influence are unsupported by empirical evidence. Perhaps the most prolific of these scholars is Canadian political scientist Peter McCormick, who has demonstrated empirically that the Supreme Court rarely cites foreign decisions and that American cases, in particular, are a minor feature of the Supreme Court’s jurisprudence.25 Although limited to corporate law, my own findings are consistent with McCormick’s. My findings further contribute to this broader debate by (a) extending the focus beyond the Supreme Court to include all Canadian courts of appeal; (b) examining the entire span of post-Confederation Canadian history; and (c) focusing in depth on a single area of law that is often considered particularly subject to American influence. Although my research is limited to corporate law, I hope to raise broader questions regarding other legal areas (for example, tort, contracts, and property) that may have experienced different patterns of foreign and domestic influence.

The remainder of this article proceeds as follows. Part II presents statistical findings on judicial citations by Canadian courts. These findings reveal a long-term decrease in English citations and a long-term increase in Canadian citations. Part III presents qualitative analyses of three Supreme Court of Canada decisions from three different periods in Canadian history: McCraken v McIntyre, Solloway v McLaughlin, and Deloitte & Touche v Livent.26 Although not intended to be representative, these cases illustrate important changes in Supreme Court citation practices over time. Part IV concludes by assessing the current status of Canadian corporate law and suggesting possibilities for future research.

This study measures changes in national influences on Canadian corporate law by tracking different categories of judicial citations by Canadian appellate courts over time. More specifically, I measure the frequency of citations to Canadian, English, American, and other foreign decisions, each as a proportion of all citations by Canadian courts of appeal. This method, which allows for quantitative assessment of historical citation patterns, shows a dramatic shift from an early period dominated by English citations to a modern period dominated by Canadian citations.

A Case Selection and Methodology

To provide as comprehensive an analysis as possible, my dataset encompasses all reported corporate law decisions of all Canadian courts of appeal from 1867 to 2017, a 150-year period beginning with Confederation.27 For the purposes of defining the population of cases, the term ‘courts of appeal’ was defined to include the provincial courts of appeal,28 the Supreme Court of Canada,29 and the Judicial Committee of the Privy Council.30 ‘Corporate law’ cases were identified using a custom WestlawNext Canada search that filtered results using nine subcategories within Westlaw’s ‘Business Associations’ Canadian Abridgment Digests classification31 and that excluded cases relating solely or primarily to adjacent areas such as bankruptcy, securities, and so on.32 Given my focus on judicial decisions, my search also excluded all decisions of the Canadian securities commissions.33 This initial search procedure resulted in 2,328 reported cases. All reported cases that do not include any judicial citations in the majority judgment were excluded from the analysis, leaving a total of 1,444 cases.34 This selection process is not perfect; it necessarily excludes any cases not properly coded within Westlaw’s Canadian Abridgment Digests, for example.35 Assuming Westlaw’s database is not fundamentally incomplete, however, I am confident my search procedure captured the vast majority of corporate law decisions reported by Canadian appellate courts between 1867 and 2017.36

After creating the dataset, a research assistant and I recorded the judicial citations in each decision, coding each citation according to several variables, including the identities of both the citing and cited courts.37 For cases with multiple reasons, we only recorded citations contained in majority judgments – citations in dissents and minority concurrences were excluded.38 Each cited decision was counted once per case, even if cited multiple times within a single judgment.39 Finally, no distinction was made between positive and negative citations; all citations were recorded, regardless of whether the court was following or distinguishing the cited case.40 Once collected, this information allowed for the calculation of a variety of case-, year-, and court-level statistics, including (a) the percentage of citations to Canadian, English, American, and other foreign jurisdictions; (b) differences in citation patterns among specific areas of corporate law; and (c) differences in citation patterns among Canadian jurisdictions. The results of these calculations are discussed below.41

B The Rise of Canadian Precedent

The fundamental question of this study can be simply stated: what have been the national influences on Canadian corporate law? Historical influences on statutory law are an important aspect of this question, though one I address here only briefly. Before the 1970s, Canadian companies acts generally resembled English legislation, albeit with statutory innovations specific to Canada.42 Following the legislative reforms of the 1970s, most Canadian corporations acts moved closer to the American model. However, while the CBCA clearly draws on American statutory influences, has Canadian case law necessarily followed suit? Have the traditions of lex Britannica been replaced by those of Delaware, New York, or the American Bar Association? At the very least, have judicial citations to American law increased following the CBCA?

Surprisingly, the answer is no. Rather than an increase in American citations, what one sees instead are an accelerating decrease in English citations and an accelerating increase in Canadian citations. Indeed, this replacement of English by Canadian precedent is the most significant pattern in the dataset. Across the time series, the inverse relationship between English and Canadian citations is nearly one-to-one. Steadily over time, Canadian courts have developed their own body of corporate law, displacing the jurisprudence inherited from the English metropole.

1 Long-term trends

The long-term historical replacement of English by Canadian precedent is clearly shown in Figures 1 and 2, which present the annual mean percentage of English and Canadian citations, respectively, for all cases in the dataset over the full 150-year period,43 including linear trend lines.44

Figure 1. Mean percentage of English judicial citations, by year.

Figure 2. Mean percentage of Canadian judicial citations, by year.

Figures 1 and 2 show several important changes in citation practices. First, and most obviously, English citations have significantly decreased, while Canadian citations have significantly increased. For several years early in the time series, fully 100 per cent of all judicial citations are to English decisions.45 In recent decades, the vast majority of judicial citations are to domestic Canadian decisions. Indeed, the line graphs in Figures 1 and 2 are nearly mirror images of each other, suggesting a zero-sum trade-off between English and Canadian citations. This zero-sum relationship also implies very few citations to other countries.

Indeed, despite commonly held assumptions regarding the influence of American law – and the receptiveness of Canadian courts to foreign law more generally – the percentage of citations to American decisions is both very low and not increasing. Figure 3 shows the annual mean percentage of judicial citations to American decisions, including the linear trend line.

Figure 3. Mean percentage of American judicial citations, by year.

As shown in Figure 3, the proportion of American citations is surprisingly low. Given American influence on the CBCA (and analogous provincial legislation), one would expect to see American citations increase following the 1970s. This does not appear to have occurred. If anything, the trend across the entire time series is (slightly) negative, though this is likely a result of the lower number of cases and the greater variance early in the time series.46 This early variance notwithstanding, American citations have never been a major feature of corporate jurisprudence, especially not within the last thirty years.

One might also assume that Canadian courts would be receptive to the decisions of other Commonwealth jurisdictions (Australia, India, and so on), given their shared common law history. To test this assumption, I collected data on judicial citations to all Commonwealth countries other than the United Kingdom and Canada. As shown in Figure 4, Commonwealth citations have played a negligible role in Canadian corporate law.

Figure 4. Mean percentage of Commonwealth judicial citations, by year.

These citations are so minimal that the slope of the trend line approaches zero. Citations to the courts of other foreign jurisdictions (for example, France) are even more rare, to the point that discussing them – beyond noting their absence – would serve little purpose. What can we draw from these long-term trends? There are at least two interpretations of the long-term decrease in English citations and the corresponding increase in Canadian citations. The first is that, given Canada’s small population and underdeveloped economy during the nineteenth century, the pool of Canadian case law was relatively small, such that Canadian courts cited English decisions out of necessity. As the pool of Canadian case law expanded, Canadian courts naturally transitioned to citing Canadian precedent, even if the underlying legal principles remained relatively unchanged. The second interpretation is that the shift to Canadian precedent represented substantive doctrinal change. Under this interpretation, Canadian courts have not simply replicated English principles in Canada but, instead, have developed a distinct body of Canadian jurisprudence. Determining which of these interpretations is more accurate is the challenge discussed below.

2 Differences among legal issues

Relying on aggregate statistics alone, it is difficult to determine the underlying cause of the increase in Canadian judicial citations. To address this question in greater depth, I coded each decision in the dataset for three specific areas of corporate law in which Canadian jurisprudence is considered particularly distinctive: minority oppression, fiduciary duties, and statutory plans of arrangement.47 Each decision was assigned a binary variable based on whether it addresses each of these areas of law. In choosing these three areas, minority oppression was selected due to Canada’s strong statutory oppression remedy and its liberal interpretation by Canadian courts.48 Fiduciary duties were selected due to their broad scope under Canadian law.49 Finally, plans of arrangement were selected due to their prominent role in mergers and acquisitions, a relatively unique feature of Canadian practice.50 Given Canadian law’s distinctiveness in these areas, higher rates of Canadian citations in cases addressing oppression, fiduciary duties, or plans of arrangement (as compared to other, more ‘generic’ cases) may indicate a link between Canadian citations and substantive legal innovation.

Analysis reveals that cases addressing fiduciary duties and plans of arrangement are only somewhat more likely to cite Canadian decisions than cases not addressing those issues. On average, approximately 61.9 per cent of all citations in cases addressing fiduciary duties are to Canadian decisions, compared to approximately 56.7 per cent for cases not addressing fiduciary duties.51 For cases addressing plans of arrangement, these averages are 64.7 per cent and 57.4 per cent, respectively. Although the number of Canadian citations is modestly higher in fiduciary-duty and plan-of-arrangement cases, one must be cautious in drawing strong conclusions from this data. This is particularly true of the plan-of-arrangement cases, which are both low in number and weighted toward the later years of the time series.52 Since all later cases, regardless of subject area, are more likely to cite Canadian decisions, the greater percentage of Canadian citations in plan-of-arrangement cases may reflect the simple fact that they are, on average, more recent cases.

Compared to fiduciary-duty and plan-of-arrangement cases, the difference in citation rates for oppression cases is greater, seeming to suggest a larger substantive role for Canadian case law. On average, approximately 81.8 per cent of all judicial citations in cases addressing oppression are to Canadian decisions, compared to approximately 53.7 per cent of cases not addressing oppression. Since the statutory oppression remedy was not introduced in Canada until 1960,53 most (though not all)54 oppression decisions occurred after 1960. Again, the fact that oppression cases are concentrated later in the time series creates a risk that the difference in citation rates is due to oppression cases’ later vintage. Indeed, if one limits the analysis to years after 1960, the difference is much smaller – 87.1 per cent for oppression decisions versus 79.6 per cent for non-oppression decisions. This remains a meaningful difference, however, especially given the large number of oppression decisions after 1960 (175).55 Although the effect is modest, it does suggest that Canadian courts have developed an independent oppression jurisprudence.56 In this regard, it is likely significant that subsequent English oppression jurisprudence seems to have had little impact in Canada.57

3 Similarities among provinces

Another potential source of changes in citation practices is the legislative reforms of the 1970s. Given the CBCA’s departure from the traditional letters patent model, it is worth investigating whether the adoption of the CBCA led to subsequent changes in citation practices. More specifically, did adopting the CBCA – in and of itself – result in (a) fewer citations to English precedent; (b) greater citations to Canadian precedent, and/or (c) greater citations to American precedent? Answering these questions may help explain the overall increase in Canadian citations.

Based on the visual data in Figures 1 and 2, it does not appear that the CBCA had a major effect on citation patterns. There is another, more precise means of assessing the CBCA’s impact, however. By measuring citation differences between provinces that did and did not enact CBCA-style legislation, it is possible to assess whether CBCA-style legislation affected citations to Canadian cases. Although most provinces adopted corporations acts modelled after the CBCA in the 1970s and 1980s, British Columbia, Nova Scotia, and Prince Edward Island maintained corporations acts based on the English memorandum model or, in the case of Prince Edward Island, the letters patent model.58 If the adoption of CBCA-style legislation influenced citation patterns, one would expect to see the absence of an effect in those provinces with more traditional legislation.

This premise can be tested using information in the dataset. For all years after 1975, the mean percentage of English citations in decisions applying the British Columbia, Nova Scotia, or Prince Edward Island corporations acts was approximately 14.6 per cent,59 while the mean percentage of English citations for all other cases was approximately 12.5 per cent. During the same period, the mean percentage of Canadian citations in decisions applying the British Columbia, Nova Scotia, or Prince Edward Island corporations acts was approximately 83 per cent, while the mean percentage of Canadian citations for all other cases was approximately 85 per cent. Finally, the mean percentage of American citations in decisions applying the British Columbia, Nova Scotia, or Prince Edward Island corporations acts was approximately 0.8 per cent in the post-1975 period, while the mean percentage of American citations for all other cases was approximately 1.8 per cent. Together, these minor differences do not suggest that CBCA-style legislation led to major changes in citation practices, which is a somewhat surprising result.60

C The Role of the Judicial Committee of the Privy Council

As shown in Figures 1 and 2, the long-term trend in Canadian corporate law has been away from English precedent and toward Canadian precedent. In addition to the rise of Canadian precedent, however, one should also consider historical explanations for the impressive persistence of English precedent. After all, the fact that more than 80 per cent of all citations were to English decisions as late as the 1930s shows that English precedent had enormous staying power within the Canadian legal system.61 As seen in Figure 1, this power lasted for decades after Confederation, even surviving the passage of the Statute of Westminster, 1931.62

Although the overall pattern of decreasing English citations and increasing Canadian citations extends throughout the time series, the rate of change has not been constant. The replacement of English by Canadian citations accelerates in the latter years of the time series, particularly following the abolition of Privy Council appeals in 1949. This change in the replacement rate can be shown by bifurcating the trend line from Figure 2 into two lines: 1867–1949 and 1950–2017, as shown in Figure 5.

Figure 5. Mean percentage of Canadian judicial citations, by year.

The slope of the 1950–2017 trend line (y = 0.0074x − 14.045) is more than twice the slope of the 1867–1949 trend line (y = 0.0035x − 6.4574), indicating that the rate of increase in Canadian citations from 1950 to 2017 was more than twice that of 1867 to 1949. This suggests that the end of Privy Council appeals affected citation patterns throughout the Canadian judicial system. During its jurisdiction over Canada, the Privy Council cited English decisions significantly more often than Canadian courts. For the period of 1867 to 1949, the mean percentage of English citations in Privy Council decisions was approximately 87.5 per cent, while the same figure for all other appellate courts was approximately 66.8 per cent. Since the Privy Council was the final court of appeal for all of Canada, its close adherence to English precedent likely constrained lower courts, preventing them from moving beyond English precedent and fully embracing Canadian innovations.63 This hypothesis is explored in Part III.

Using the same method discussed above, I also looked for changes in the increase of Canadian citations after 1975, the year the CBCA was enacted. The hypothesis here is that adoption of the CBCA and similar provincial acts may have generated new Canadian case law to address the novelties of applying new statutes. At the same time, the CBCA may have rendered English decisions less relevant. Surprisingly, I found the rate of increase of Canadian citations did not increase after 1975. In fact, the rate of increase from 1976 to 2017 is slightly less than from 1950 to 1975. Together with the findings described in subpart II.B.3 above, this is further evidence that legislative reforms have not affected citation practices and that the replacement of English by Canadian citations is due to broader historical factors.64 In corporate law, one might speak of a long arc of Canadian legal independence, the trajectory of which increased following the abolition of Privy Council appeals, but which does not appear to have altered course following the legislative reforms of the 1970s.65

D The Role of the Supreme Court of Canada

Finally, it is important to discuss the Supreme Court’s role in historical changes in corporate law. From 1875 to 1949, the Court’s role was relatively limited, as it lacked the power to assure the finality of its own decisions. For nearly seventy-five years, the Court ‘strained and chafed under British supervision, forced into an arrested adolescence.’66 Although the Court was highly active in company law during this period (within the dataset, there are fully 120 cases decided by the Court prior to 1950), its ability to shape the direction of the law remained limited by the Privy Council. The Supreme Court came into its own as a source of domestic law-making following the abolition of Privy Council jurisdiction in 1949. In the years since, the Court has played a major role in shaping corporate law by issuing a number of decisions with important doctrinal consequences. Ironically, a notable aspect of the Court’s influence has been its continuing citations to English law. Throughout the entire time series, the Court has been significantly more likely than provincial courts of appeal to cite English decisions, which the Court has often considered persuasive authority when addressing unsettled legal issues.

Over the entire time series, approximately 56.5 per cent of the Supreme Court of Canada’s judicial citations are to English decisions, compared to approximately 37.8 per cent for all other appellate courts. This statistical difference is potentially misleading, however, due to broader changes over time. For reasons that are not entirely clear, Supreme Court decisions represent a greater proportion of all decisions earlier in the time series.67 Thus, holding all else equal, the ‘average’ Supreme Court decision includes more English citations simply because Supreme Court cases are weighted toward earlier years. It is more informative to limit the comparison to the post-1949 period, in which the proportion of Supreme Court decisions remains relatively constant. In this period, the percentage of English citations in Supreme Court decisions is approximately 30 per cent, while the percentage for all other courts is approximately 18.2 per cent.68 Although this is a smaller difference, it remains meaningful.69 It also implies that, even today, the Court is more open to English precedent than the provincial courts of appeal.

As discussed in Part III, qualitative analysis of individual decisions suggests this difference is not the result of greater fidelity to traditional English law but, instead, the result of greater reliance on contemporary English law. The Court’s greater reliance on English citations may be a product of its particular institutional role within the Canadian legal system. As the highest court of Canada, the Supreme Court possesses significant latitude to develop and modify existing jurisprudence, including the incorporation of legal doctrines originating from other countries. The provincial courts of appeal – bound by the decisions of the Supreme Court – are far more institutionally constrained. Given the Court’s greater flexibility, it may play an important role in ‘importing’ doctrine from foreign jurisdictions, even if that role is more circumscribed than prior scholarship might seem to suggest.70

The data presented in Part II show a dramatic transformation in Canadian corporate law. Over the past 150 years, Canadian citations have largely displaced English precedent, as reflected in Figures 1 and 2. These data include little information, however, regarding the substantive content of individual decisions. Thus, in order to provide a more nuanced account of why courts cite particular precedents, Part III presents qualitative analyses of three decisions of the Supreme Court of Canada, each representing a different period of modern Canadian legal history. The first case, McCraken v McIntyre, shows the pronounced Anglocentrism of the post-Confederation period, in which Canadian law was little more than a North American extension of English law. The second case, Solloway v McLaughlin, reveals that it was the most senior tribunals in the judicial hierarchy (that is, the Privy Council and the Supreme Court of Canada) that were primarily responsible for the enduring influence of English precedent. Finally, Deloitte & Touche v Livent, the Supreme Court’s most recent corporate law decision (as of this writing), illustrates two contradictory phenomena: (a) the rise and consolidation of domestic case law in Canadian jurisprudence and (b) the Supreme Court’s recourse to English law when addressing unsettled legal issues.

Although these cases provide concrete examples of citation practices at different points in time, they are not necessarily representative of the broader dataset. In terms of citation statistics, McCracken is fairly typical of cases from its era. Solloway and Livent were selected for other reasons, however. Solloway was selected due to the availability of the trial court decision on Westlaw,71 while Livent was selected simply for being the latest Supreme Court decision in the dataset. Thus, while neither of these cases is necessarily representative – Livent, in particular, contains an unusually high number of English citations – each reflects important judicial developments. By examining these cases in detail, we can see first-hand how the Supreme Court of Canada has influenced changes in corporate law.

A Mccraken Versus Mcintyre: Early English Dominance

McCraken – decided only two years after the creation of the Supreme Court of Canada – exemplifies the early period of Canadian corporate law. If not for the identity of the parties, one might easily assume the case had been decided in England, so pervasive are the Supreme Court’s citations to English legal sources. In this respect, McCraken is highly representative of its era. For several decades following Confederation, ‘Canadian’ and ‘English’ law were functionally indistinguishable, in that Canadian courts routinely applied English law to Canadian cases, often without comment or explanation.72 This close adherence to English norms extended beyond case law to include direct citations to English statutes. The Anglocentric character of early Canadian company law is well illustrated by McCraken. Not only are an overwhelming majority of the decision’s citations to English cases, but – rather remarkably – the Court applies English legislation directly to a Canadian company, despite its formation under a domestic Canadian statute.

McCracken involved the issuance of shares by the Lake Superior Navigation Company, a shipping company formed in 1871 under the Companies Act of the Province of Canada.73 Following a failed public offering, the company sold shares directly to its directors at a 40 per cent discount from their stated value. One of the directors subsequently sold his shares to an outside investor, Thomas McCracken, representing to McCracken that the shares had been paid in full. When a judgment creditor of the company attempted to collect against McCracken for the 40 per cent unpaid value, McCracken argued that he could not be held liable for the unpaid portion of the shares, having purchased them for full value without knowledge of the original discount.74 The Supreme Court of Canada, hearing the case on appeal from the Court of Appeal of Ontario, was faced with the issue of whether an outside shareholder who had purchased shares in good faith and without notice of any deficit could be held liable to creditors for the unpaid portion of his shares. In ruling for McCraken (by a four-to-two majority), the Supreme Court relied extensively on English law, applying it directly to the Lake Superior Navigation Company and its shareholders, despite the company’s legal status as a domestic Canadian entity.75

1 Statutory citations

Perhaps the most notable feature of McCraken is the Supreme Court of Canada’s repeated citations to English statutes. These citations are noteworthy because English company legislation had no direct bearing on the Lake Superior Navigation Company, which was formed under an independent Canadian statute. The citations to English statutes are all the more significant because they are used by the Court to justify its reliance on English case law. Three of the four justices in the majority – Justices Télesphore Fournier, William Alexander Henry, and Samuel Henry Strong– treat English legislation as legally analogous to the Companies Act of the Province of Canada, thereby incorporating English decisions construing such legislation directly into Canadian law.76 Hence Strong J’s view that the shareholder liability provision of the provincial Companies Act ‘is in pari materia with the 36th section of The Companies’ Clauses Consolidation Act, 1845,’ such that ‘decisions upon this section 36 of the English act are directly applicable to the present case.’77 Similarly, Fournier J justifies his numerous English citations on the grounds that ‘[c]es décisions ont été prononcées dans l’interprétation d’une loi dont le principe, quoique mis en pratique par des procédés différents, est le même que celui introduit par la 27e sect. de notre statut.’78 Finally, although he does not cite English statutes directly, Henry J’s extensive citations of decisions under the English companies acts treat English legislation and its judicial interpretation as directly applicable to the case at bar.79

The two minority opinions – by Chief Justice William Buell Richards and Justice William Johnston Ritchie – also draw on English statutes. Like the majority, the chief justice’s opinion cites similarities between the provincial Companies Act and the Companies’ Clauses Consolidation Act, 1845 as justifying the application of English case law.80 Ritchie J’s opinion goes even further, implying English legislation was more important than the applicable Canadian statute. To support his view that company shareholders are always responsible for any unpaid portion of their shares, Ritchie J first cites the English Companies Act, 1867.81 Only after discussing the English statute does Ritchie J add, somewhat redundantly, ‘[e]qually strong are the words of the Statute of Canada.’82 Based on the majority and minority opinions in McCraken, it is clear that English law was at the forefront of the justices’ thinking, despite the applicability of a domestic Canadian statute.

2 Case citations

Given the justices’ views regarding the relevance of English precedent, combined with the paucity of Canadian precedent in 1877, it is hardly surprising that English citations feature prominently in McCraken. The degree to which they dominate the case is striking, however. Among the opinions in the majority (Fournier, Henry, Strong JJ and Justice Robert Taschereau), fully twenty-four of twenty-five case citations (96 per cent) are to English decisions, with a single citation to the court of appeal of the former province of Upper Canada. As it happens, this single citation (by Strong J) is actually a negative citation, discussed only in terms of its misapplication by the Ontario trial court.83 The fact that the Supreme Court would resolve a major issue in company law84 with twenty-four citations to English precedent and only a single citation to Canadian precedent illustrates the commanding influence of English law in the years following Confederation. McCraken is hardly unusual in this regard; many cases from these early years included no Canadian citations at all.

3 Summary

McCraken suggests two possible explanations for the early prominence of English citations. The first is that a lack of available Canadian precedent forced the Court to rely on English law. This would explain, for example, why the justices in McCraken use English cases to interpret a Canadian statute. The second explanation is that Canadian judges (and the lawyers arguing before them) were wedded to English law by training and acculturation.85 This second explanation would predict a dominant role for English law independent of the availability of Canadian precedent. Although it is difficult to assess the relative importance of these factors, there is reason to believe that both played a role. Given the young existence, small population, and limited economy of the Dominion of Canada, lack of domestic case law was certainly an issue that faced judges and practitioners.86 By no means, however, did the McCraken justices cite English law only as a last resort. Rather, their opinions turn to English law immediately and without reservation, with Canadian law featuring as little more than an afterthought. Ultimately, disentangling these explanations may be impossible. There is little doubt, however, that English law was the jurisprudential touchstone for nineteenth-century Canadian courts.87

B Solloway Versus Mclaughlin: The Development of Canadian Case Law

If McCraken shows the Anglocentrism of early Canadian jurisprudence, Solloway suggests the historical process by which English influence was eroded. Decided in 1936, Solloway signalled a transitional period in Canadian corporate law. The case was decided after the development of a substantial body of domestic precedent, but prior to the end of Privy Council jurisdiction in 1949. Among the many cases from this period,88 Solloway is particularly useful in that every decision in the appeal process – from the initial decision of the Ontario Supreme Court to the final appeal to the Privy Council – is available on Westlaw.89 This allows direct comparison of how different courts treated Canadian versus English precedent.90

The Solloway complaint was brought by an investor, JP McLaughlin, who had instructed a stock brokerage to order and hold a large number of shares of Sudbury Basin Mines Limited, a publicly traded mining company. Following the stock market crash of 1929, the company’s share price dropped precipitously, and McLaughlin sold his shares at a loss. Unbeknownst to McLaughlin, rather than buying and holding his shares as instructed, the brokerage had sold his shares ‘short,’ repurchasing shares at a lower price to cover his later sale order. When McLaughlin learned of this deception, he sued the brokerage company and its two individual principals for conversion of his shares and breach of contract. Complicating matters, the brokerage company – Solloway Mills and Co., an Ontario company – was a wholly owned subsidiary of a federal company of the same name, which was in turn owned and managed by the two individual principals, W.C. Solloway and H. Mills. The case involved a wide range of legal issues, including the individual liability of the brokerage company’s principals. Affirming an initial order of an assistant master, Justice Patrick Kerwin of the Supreme Court of Ontario ruled for the plaintiff, a judgment that was eventually affirmed by the Privy Council on appeal. The case’s progression from the Supreme Court of Ontario to the Privy Council reveals a clear pattern in citation practices that is also reflected in the statistical data. The pattern is one of lower courts engaging with Canadian precedent in a careful, attentive fashion and of higher courts declining to meaningfully engage with Canadian precedent at all. This can be seen by comparing all four decisions of the Solloway case: the Supreme Court of Ontario, the Court of Appeal of Ontario, the Supreme Court of Canada, and the Privy Council itself.

1 Supreme Court of Ontario

The plaintiff’s claim was initially heard by an assistant master, who awarded the plaintiff $55,922.98. The defendants appealed, and Kerwin J of the Supreme Court of Ontario affirmed the master’s decision. Kerwin J’s reasons are relatively brief, including only four case citations, but all four are to Canadian decisions – one to the Supreme Court of Ontario,91 two to the Court of Appeal of Ontario,92 and one to the Supreme Court of Canada.93 Each of these decisions is highly fact specific, in that each involved similar abuses revealed in the aftermath of the stock market collapse (indeed, two of the cited cases involved the same defendants in different litigation). At no point do Kerwin J’s reasons mention English law. Overall, the decision suggests that lower courts were closely attuned to Canadian law, as compared to the more rarefied perspective of higher courts of appeal.

2 Court of Appeal of Ontario

Unlike at the trial court, English decisions played a major role in the Court of Appeal of Ontario. Although the Court of Appeal’s judgment includes several Canadian citations, they are a minority of all cited cases. Of a total of twenty-two judicial citations in the majority reasons,94 fifteen are to English cases, while only seven are to Canadian cases. The language of the reasons themselves draws no distinction between English and Canadian cases – both are cited without any mention of jurisdiction of origin, creating the impression that both categories of cases are equally applicable to the case at bar. Two English cases are discussed at length,95 whereas no Canadian cases receive similar treatment, suggesting the court may have been favouring established English precedent. Aside from this difference in emphasis, however, Canadian and English cases are treated equivalently. The court makes no express statement, for example, that one category of cases should be privileged over the other. The Supreme Court of Canada strikes a similar balance, as discussed below.

3 Supreme Court of Canada

The decision of the Supreme Court of Canada features six English citations and three Canadian citations (each to the Supreme Court itself), a similar English/Canadian ratio as the Court of Appeal of Ontario. Like the Court of Appeal, the Supreme Court draws no distinction between English and Canadian cases, treating them, for all intents and purposes, as equivalent sources of judicial authority. Since the Court makes no mention of why it is citing English versus Canadian decisions – or even the fact of choosing to cite English versus Canadian decisions at all – it is difficult to know what accounts for (a) the continuing prominence of English decisions and (b) the greater representation of Canadian decisions, compared to earlier cases such as McCraken. With respect to the latter question, it is likely significant that all three Canadian citations are to previous decisions of the Court itself. This may indicate that while the Supreme Court was favourable to citing its own precedent, it was not particularly sensitive to developments in the lower courts.96 This perspective, in turn, may have been reinforced by the Privy Council, which strongly favoured English over Canadian decisions, showed little familiarity with developments in Canadian law, and held the power to ‘correct’ the Supreme Court if it drifted too far from English precedent. As long as the Privy Council was the ultimate judicial authority in Canada, the Supreme Court had little reason to favour domestic legal developments.

4 Judicial Committee of the Privy Council

The Privy Council’s decision in Solloway is illuminating in two respects. Not only does it showcase the Privy Council’s manifest indifference toward Canadian law, but it also demonstrates the Privy Council’s general approach to deciding cases, which was often characterized by ad hoc reasoning and minimal citations to any jurisdictions. The Privy Council’s decision in Solloway, delivered by Lord Atkin, is quite brief, including only a single citation: the 1864 Court of Common Pleas case Edmundson v Nuttall.97 Since Edmundson did not involve company law at all, but rather the conversion of weaving looms by a factory owner, one imagines that more apropos Canadian precedent may have been available. In any case, the Privy Council’s non-engagement with Canadian law in Solloway is broadly consistent with (a) conventional academic interpretations of the role and functioning of the Privy Council;98 (b) my own impressionistic review of Privy Council decisions; and (c) the statistics in the dataset with respect to Privy Council citation practice. For the entire dataset, the average percentage of English citations in Privy Council decisions is approximately 87.5 per cent, a remarkably high figure for Canadian appeals.99 And since Privy Council decisions bound all courts in Canada, its citation practices likely filtered down to lower appellate and trial courts.

5 Summary

Solloway reveals changing trends in Canadian citation practices. In the 1930s, English citations continued to outnumber Canadian citations in appellate decisions, but the role of Canadian precedent was gradually increasing. What is perhaps most interesting about Solloway is what these citations tell us regarding the diffusion of Canadian precedent throughout the judicial system. In Solloway, the lowest court in the judicial hierarchy – the Supreme Court of Ontario – dealt closest with Canadian law, while the highest tribunal in the judicial hierarchy – the Privy Council – ignored Canadian law entirely. What this pattern indicates, and what is reflected in the statistical data, is that the diffusion of Canadian precedent developed from the ‘bottom up,’ with lower courts generating domestic Canadian case law. As the amount of Canadian decisions expanded over time, Canadian citations percolated upward, eventually replacing English law even at the appellate level.

C Deloitte & Touche Versus Livent: Residual English Influence

As of this writing, Livent is the Supreme Court of Canada’s most recent corporate law decision. As such, it shows the extent to which the Supreme Court’s citation practices have evolved over time. Comparing the McCraken case of 1877 to the Livent case of 2017, one clearly sees the greater role of Canadian citations. One also sees an interesting feature of the aggregate statistical data, which is that – even today – the Supreme Court cites English precedent at a greater rate than the provincial courts of appeal. For the entire time series, the average percentage of English citations in Supreme Court decisions is approximately 56.5 per cent, while the average percentage of English citations by all other courts is approximately 37.8 per cent. Even in the post-1975 period, the average percentage of English citations in Supreme Court decisions is approximately 20.6 per cent, while the average percentage of English citations by all other courts is approximately 13.4 per cent.100 Although Canadian citations dominate all levels of the judicial system, the Supreme Court of Canada continues to cite a meaningful number of English decisions.

Before analysing Livent in detail, I would like to mention its subject matter. Although Livent involves a trustee’s lawsuit brought on behalf of a corporation, and was categorized as a ‘corporate law’ decision by the search procedure described in subpart II.A, much of the Court’s legal analysis is grounded in general tort law principles. The case, which addresses negligent performance of a service by an auditor, could just as easily be categorized as a tort law matter. Livent remains a useful case for qualitative analysis, however, for two reasons. First, until Livent, the parameters of auditor liability to corporate clients remained uncertain.101 Thus, Livent required that the Court articulate a standard of liability regarding an issue of great importance to public corporations and their auditors. Second, although this article focuses on corporate law, I hope to raise questions regarding comparable developments in other legal areas, particularly in view of the English influence on Canadian tort, contract, and property law.102

1 Canadian citations

The most notable feature of Livent as compared to McCraken and Solloway is the much greater role of Canadian citations. The majority reasons, authored by Justices Clément Gascon and Russell Brown, feature a total of thirty-five case citations: twenty-two to Canadian decisions (approximately 62.9 per cent), eleven to English decisions (approximately 31.4 per cent), and two to American decisions. Chief Justice Beverley McLachlin’s dissent features a similar Canadian/English ratio: of a total of twenty-five citations, fifteen are to Canadian decisions (60 per cent), nine citations are to English decisions (36 per cent), and one citation is to the High Court of Australia. In both the majority and dissenting reasons, the vast majority of Canadian citations are to previous decisions of the Supreme Court of Canada itself,103 including landmark corporate and tort law decisions such as Hercules Management v Ernst & Young,104 Cooper v Hobart,105 and Canadian Dredge and Dock Company Limited et al v R.106 The Supreme Court’s decision centres on application of the Anns/Cooper framework, which is essentially the Court’s reinterpretation of the former English tort standard.107 Thus, Livent shows the Supreme Court continues to draw on English precedent, even as it articulates a distinct Canadian jurisprudence.108

2 English citations

Despite the greater role of Canadian citations, the Livent Court remains under the influence of recent developments in English doctrine. Roughly a third of all judicial citations by both the majority and dissent are to English decisions, a surprisingly high amount for a case decided in 2017. Many of these English citations are to relatively recent cases, several dating from within the last half century – long after the end of formal institutional ties between the Canadian and English judicial systems.109 While the majority draws heavily on English tort law, McLaughlin CJ’s dissent places even greater reliance on English cases. Indeed, one of the major issues of disagreement between the majority and the dissent is the chief justice’s application of a number of recent English cases, including South Australia Asset Management Corp v York Montague.110

For context, it is important to emphasize that Livent is not a typical corporate law decision. Livent features a greater number of English citations than most contemporary Supreme Court of Canada cases and substantially more English citations than contemporary decisions of the provincial courts of appeal. This high proportion of English citations is also present at the trial court and appeal court judgments. The decisions of the Court of Appeal of Ontario and the Ontario Superior Court of Justice (Commercial List) both include an unusually high number of English citations. Only 54 per cent of the Court of Appeal’s citations and approximately 67.2 per cent of the Superior Court of Justice’s citations are to Canadian cases.111 These figures are substantially lower than most contemporary cases, suggesting that something about Livent itself is particularly connected to English precedent.112 The most likely explanation is the case’s significant tort law component, though without conducting systematic research on Canadian tort law cases, I can only speculate as to whether Livent is representative.

3 Summary

What does Livent tell us regarding the development of Canadian law? Its lessons, it would seem, are twofold. One is that while English citations have become increasingly rare in the corporate law area, they may continue to play a larger role in adjacent areas of private law. Unfortunately, investigating this possibility requires systematic comparative analysis beyond the scope of this article. Lacking such analysis, it is difficult to know whether the historical patterns observed in Figures 1 and 2 also apply to other areas of law. Another potential lesson is that while Canadian citations have become increasingly prominent over time, Canadian courts continue to rely on English decisions in certain cases. For its part, the modern Supreme Court of Canada appears most likely to cite English decisions when clarifying doctrine, addressing unsettled legal issues or modifying existing rights and obligations – in other words, when creating new law. And when the Supreme Court cites English decisions when creating new law, it reinforces the historical sway of English jurisprudence on all Canadian courts. Since the Supreme Court cites English decisions significantly more often than the courts of appeal, the Court may serve as an important vehicle of residual English legal influence.

Over the past 150 years, Canadian corporate law has gradually evolved from an English colonial transplant into an independent body of Canadian law, defined by local statutes and jurisprudence. This evolution was partly the result of legal responses to economic change, as Canada grew from a peripheral colony into one of the world’s most developed economies. As the volume and variety of corporate litigation increased, Canadian courts were forced to respond to a broadening array of legal issues. The central finding of this study is that many of these legal responses have been distinctively Canadian. Despite the economic power, cultural influence, and geographic proximity of the United States, Canadian courts rely surprisingly little on American jurisprudence. Canadian approaches to issues such as minority protections,113 fiduciary duties,114 and corporate acquisitions115 appear to be shaped by policy concerns specific to the Canadian context. Just as Canada outgrew its reliance on traditional English company law, so too would an embrace of American law ill-suit Canadian political conditions. Indeed, the extent to which Canadian citations have come to dominate Canadian judicial decisions (Livent notwithstanding) borders on parochialism116 and is certainly at odds with the conception of Canada as uniquely receptive to foreign jurisprudence. In the area of corporate law, the Canadian judiciary has shaped its own distinct identity.

The subject of this article has been how, why, and when this identity was formed. Concededly, aggregate statistics only tell so much regarding the origins and mechanisms of legal change. Every case is unique, and a full understanding of the rise of Canadian precedent requires a closer examination of a greater number of cases. That said, aggregate statistics can be a valuable source of information, as they often reveal the broader patterns that qualitative analysis can sometimes obscure. As this study shows, it is important to consider the full range of cases within a given area of legal analysis rather than focusing solely on the most celebrated or (assumedly) influential.

In any event, the claims of this article are limited to corporate law, leaving open the question of whether other areas of law have experienced similar patriation processes. Areas of law closely related to fundamental issues of public governance, such as constitutional and administrative law, have obviously been deeply influenced by Canadian political history, but what about the private law domain of personal and economic relationships? Have these areas of law remained closely tied to English precedent?117 Or, like Canadian corporate law, have they evolved into distinct variations on broader common law traditions? These questions await future research. For now, my hope is that this article inspires reflection on the sources of modern legal doctrine, particularly in light of larger questions regarding the historical development of Canadian law.

1. See The Harmonization of Federal Legislation with the Civil Law of the Province of Quebec and Canadian Bijuralism / L’Harmonisation de la législation fédérale avec le droit civil de la province de Québec et le bijuridisme canadien (Ottawa: Department of Justice, 2001); Frederick P Walton, The Civil Law and the Common Law in Canada (Edinburgh: W Green, 1899); John EC Brierley, ‘The Civil Law in Canada’ (1992) 84 Law Libr J 159. Google Scholar
2. John Borrows, Canada’s Indigenous Constitution (Toronto: University of Toronto Press, 2010) at 177–218. Google Scholar
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4. Historically, American influence has been particularly strong in the commercial law area. Jacob S Ziegel, ‘The American Influence on the Development of Canadian Commercial Law’ (1975) 26 Case W Res L Rev 861. Google Scholar
5. Canadian corporations are known as ‘companies’ or ‘corporations’ depending on the jurisdiction and historical period. This article uses both terms, depending on the context. Google Scholar
6. The Hudson’s Bay Company was formed by royal charter in 1670 as the Governor and Company of Adventurers of England Trading into Hudson’s Bay. French colonization was supported by a number of smaller, less successful companies, including the Compagnie de Montmorency, the Compagnie de la Nouvelle-France, and the Compagnie des habitants. For the history of the competition between English and French colonial ventures, see Harold Adams Innis, The Fur Trade in Canada: An Introduction to Canadian Economic History (Toronto: University of Toronto Press, 1930). Google Scholar
7. See e.g. An Act Respecting Joint Stock Companies Incorporated by Letters Patent, SC 1869, c 13. ‘Letters patent’ represented a grant by the sovereign of corporate status to businesses that fulfilled the required administrative process. Although, in theory, the grant of letters patent was discretionary, in practice, it differed little from incorporation by non-discretionary registration. See Arthur W Currie, ‘The First Dominion Companies Act’ (1962) 28:3 Can J Economics & Political Science 387 at 400 [Currie, ‘First Dominion’]; Robert VW Dickerson, John L Howard & Leon Getz, Proposals for a New Business Corporations Law for Canada (Ottawa: Information Canada, 1971) at 6 [Dickerson, Howard & Getz, Proposals]. Google Scholar
8. Canada Business Corporations Act, RSC 1985, c C-44 [CBCA]. For discussion of the influences on the CBCA and its predecessor, the Ontario Business Corporations Act, RSO 1990, c B.16, see Brian Cheffins, ‘The Oppression Remedy in Corporate Law: The Canadian Experience’ (1988) 10 U Pa J Intl Bus L 305 at 307–10 [Cheffins, ‘Oppression Remedy’]; Dickerson, Howard & Getz, Proposals, supra note 7 at iv, 52–3, 62–3, 79, 83–5, 99, 120–1, 124, 137, 148, 165; Allen F Lawrence, Interim Report of the Select Committee on Company Law (Toronto: Ontario Legislative Assembly, 1967) at iv–vii, 3–7, 18–19, 37–8, 63–4, 75, 83–4, 117–46; Joseph Eliot Magnet, ‘Shareholders’ Appraisal Rights in Canada’ (1979) 11 Ottawa L Rev 98 at 101 [Magnet, ‘Shareholders’]; Fenner L Stewart, ‘A History of Canadian Corporate Law: A Divergent Path from the American Model?’ in Harwell Wells, ed, Research Handbook on the History of Corporate and Company Law (Cheltenham: Edward Elgar, 2018) 451 at 464–9 [Stewart, ‘History’]. In addition to the CBCA itself, a majority of the provinces – Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Ontario, and Saskatchewan – have adopted corporations acts substantially similar to the CBCA. British Columbia, Nova Scotia, and Quebec each have their own distinctive corporations acts, though these acts have also been influenced by the CBCA. Prince Edward Island passed CBCA-style legislation in 2018, which, at the time of this writing, is awaiting implementation. Google Scholar
9. See Cheffins, ‘Oppression Remedy,’ supra note 8. Google Scholar
10. See Carol Liao, ‘The Next Stage of CSR for Canada: Transformational Corporate Governance, Hybrid Legal Structures, and the Growth of Social Enterprise’ (2013) 9:1 J Sustainable L & Development Policy 54 at 63–73. Google Scholar
11. The CBCA and its provincial equivalents most closely resemble the (many) state corporation acts based on the Model Business Corporation Act, an influential model statute created by the American Bar Association. Model Business Corporation Act (American Bar Association, 2017). The corporations acts of British Columbia and Nova Scotia continue to be based on older English-style legislation. Google Scholar
12. The literature is replete with references to both English and American influences on Canadian corporate law. Examples include Stephanie Ben-Ishai & Poonam Puri, ‘The Canadian Oppression Remedy Judicially Considered: 1995–2001’ (2004) 30 Queen’s LJ 79 at 85–6, 106–7 [Ben-Ishai & Puri, ‘Canadian Oppression’]; Cheffins, ‘Oppression Remedy,’ supra note 8 at 307–10, 320, 326–8; Mohammad Fadel, ‘BCE and the Long Shadow of American Corporate Law’ (2009) 48 Can Bus LJ 190 [Fadel, ‘BCE and the Long Shadow’]; Jeffrey G MacIntosh, ‘Minority Shareholder Rights in Canada and England: 1860–1987’ (1989) 27 Osgoode Hall LJ 561; Jeffrey G MacIntosh, Janet Holmes & Steve Thompson, ‘The Puzzle of Shareholder Fiduciary Duties’ (1991) 19 Can Bus LJ 86; Poonam Puri et al, Cases, Materials and Notes on Partnerships and Canadian Business Corporations, 6th ed (Toronto: Thomson Reuters, 2016) at 61–5; Stewart, ‘History,’ supra note 8 at 459, 464, 467; MaryAnne Waldron, ‘Corporate Law Theory and the Oppression Remedy’ (1981) 6 Can Bus LJ 129 at 146 [Waldron, ‘Corporate Law]. English and American cases ranging from Foss v Harbottle (1843), 67 ER 189 to Revlon, Inc v MacAndrews & Forbes Holdings Inc, 506 A2d 173 (Del SC 1985) are often taught in Canadian corporate law courses. Google Scholar
13. For notable examples of empirical approaches to corporate law, see Ben-Ishai & Puri, ‘Canadian Oppression,’ supra note 12; Mohamed F Khimji & Christopher C Nicholls, ‘Piercing the Corporate Veil in the Canadian Common Law Courts: An Empirical Study’ (2015) 41 Queen’s LJ 207; Stephane Rousseau & Nadia Smaili, ‘La « levée du voile corporatif » en vertu du Code civil du Québec: des perspectives théoriques et empiriques à la lumière de dix années de jurisprudence’ (2006) 47 C de D 815. Google Scholar
14. For purposes of this article, ‘courts of appeal’ includes the provincial courts of appeal, the Supreme Court of Canada, and the Judicial Committee of the Privy Council. Google Scholar
15. The Judicial Committee of the Privy Council is not technically a court but, rather, a statutory committee of the Privy Council composed of leading English and Commonwealth judges. For all intents and purposes, it served as the final court of appeal for Canadian company law cases from before Confederation until 1949, when its jurisdiction was abolished by the Parliament of Canada, An Act to Amend the Supreme Court Act, SC 1949 (2nd Sess), c 37, s 3. Google Scholar
16. See Stanley M Beck, Cases and Materials on Partnerships and Canadian Business Corporations (Toronto: Carswell, 1983); J Anthony VanDuzer, The Law of Partnerships and Corporations, 4th ed (Toronto: Irwin Law, 2018) at 105; Fadel, ‘BCE and the Long Shadow,’ supra note 12 at 190, 208; Stewart, ‘History,’ supra note 8 at 459. To provide a specific example, when writing on appraisal rights in 1979, Joseph Magnet argued that American influence on the CBCA meant that ‘American jurisprudence assumes a paramount importance in considering the appraisal right in Canada.’ Magnet, ‘Shareholders,’ supra note 8, n 10. In fact, dissent rights have proven less important in Canada than the statutory oppression remedy, and American jurisprudence has not assumed the prominent role Magnet predicted. Google Scholar
17. My use of the term ‘patriation’ is, of course, a play on the concept of Canadian constitutional patriation. For an accessible account of constitutional patriation, see Peter H Russell, Constitutional Odyssey: Can Canadians Become a Sovereign People? 3d ed (Toronto: University of Toronto Press, 2004) at 107–26. Google Scholar
18. Sarah P Bradley, ‘BCE Inc v 1976 Debentureholders: The New Fiduciary Duties of Fair Treatment, Statutory Compliance and Good Corporate Citizenship?’ (2010) 41 Ottawa L Rev 325 at 227–337. Google Scholar
19. Sean Vanderpol & Edward J Waitzer, ‘Addressing the Tension between Directors’ Duties and Shareholder Rights: A Tale of Two Regimes’ (2012) 50 Osgoode Hall LJ 177. Google Scholar
20. Ben-Ishai & Puri, ‘Canadian Oppression,’ supra note 12; Cheffins, ‘Oppression Remedy,’ supra note 8; Waldron, ‘Corporate Law,’ supra note 12. Google Scholar
21. Currently, CBCA, supra note 8, s 241 (and equivalent provisions in provincial corporations acts). Google Scholar
22. Cheffins, ‘Oppression Remedy,’ supra note 8 at 312–14, 317; Journet v Superchef Food Industries Ltd, [1984] CS 916 at para 47; Michalak v Biotech Electronics Ltd, [1986] RJQ 2661 at para 20; Such v RW-LB Holdings Ltd, [1993] AJ 1033 at paras 49–58. Following the enactment of a modern oppression remedy by the Parliament of the United Kingdom in 1980 (drafted in the language of ‘unfair prejudice’), English courts have developed their own oppression jurisprudence, independent from that of Canada. Google Scholar
23. Basil S Markesinis & Jörg Fedtke, Judicial Recourse to Foreign Law: A New Source of Inspiration? (New York: Routledge, 2006) at 83–5 [Markesinis & Fedtke, Judicial Recourse]; Louise Arbour & Fannie Lafontaine, ‘Beyond Self-Congratulations: The Charter at 25 in an International Perspective’ (2007) 45 Osgoode Hall LJ 239 at 240–1; Schabas, ‘Twenty-Five Years,’ supra note 3. Google Scholar
24. Canadian Charter of Rights and Freedoms, Part I of the Constitution Act 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11. See Anne Warner La Forest, ‘Domestic Application of International Law in Charter Cases: Are We There Yet?’ (2004) 37 UBC L Rev 157; Claire L’Heureux-Dube, ‘The Importance of Dialogue: Globalization and the International Impact of the Rehnquist Court’ (1998) 34 Tulsa LJ 15 at 18–21; Markesinis & Fedtke, Judicial Recourse, supra note 23 at 83–5. Scholars have also highlighted American influence on business law. See note 4 above and accompanying text. Google Scholar
25. Peter McCormick, ‘American Citations and the McLachlin Court: An Empirical Study’ (2009) 47 Osgoode Hall LJ 83; Peter McCormick, Supreme at Last: The Evolution of the Supreme Court of Canada (Toronto: James Lorimer, 2000) at 25 [McCormick, Supreme at Last]; Peter J McCormick, The End of the Charter Revolution: Looking Back from the New Normal (Toronto: University of Toronto Press, 2014) at 214–22; Peter McCormick, ‘The Supreme Court of Canada and American Citations, 1945–1994’ (1997) 8:2 SCLR 527; Peter McCormick, ‘Waiting for Globalization: An Empirical Study of the McLachlin Court’s Foreign Judicial Citations’ (2010) 41:2 Ottawa L Rev 209. Interestingly, McCormick finds the Supreme Court of Canada is more likely to cite foreign law in ‘private law’ cases (defined as cases involving contracts, torts, and so on) than in Charter, criminal, or other public law cases. Ibid at 231. Google Scholar
26. McCraken v McIntyre, [1877] 1 SCR 479 [McCraken]; Solloway v McLaughlin, [1936] SCR 127 [Solloway]; Deloitte & Touche v Livent Inc, 2017 SCC 63, [2017] 2 SCR 855 [Livent]. Google Scholar
27. Although my search parameters began with the year 1867, the first case in the dataset was not decided until 1869. Google Scholar
28. Many of the modern provincial courts of appeal were not established until after 1867. For years prior to the establishment of a given province’s court of appeal, the dataset includes appellate decisions issued by a panel or other appellate body of the provincial superior court. These appellate decisions were identified by filtering for ‘Appeal Courts (plus SCC)’ with WestlawNext Canada’s ‘Court Level’ search filter. Google Scholar
29. The Supreme Court of Canada was established in 1875 and became the final court of appeal in Canada in 1949. McCormick, Supreme at Last, supra note 25 at 1–3. Google Scholar
30. The nature and status of the Privy Council as a ‘Canadian’ court is ambiguous. The Privy Council sat in England, applied English law, and was composed primarily of English judges, though it remained the final court of appeal for Canadian civil cases until 1949. For the purposes of my analysis, I classified the Privy Council as a ‘Canadian’ court when deciding Canadian corporate law appeals but classified it as an ‘English’ court when it was being cited by other Canadian courts. While not strictly consistent, I believe this classification method best reflects the complicated historical reality that the Privy Council was an English court which applied English law but was also formally binding on all lower Canadian courts. Google Scholar
31. These subcategories were as follows: Business associations > Changes to corporate status; Business associations > Creation and organization of business associations > Corporations; Business associations > Legal proceedings involving business associations > Practice and procedure in proceedings involving corporations; Business associations > Nature of business associations > Nature of corporation; Business associations > Powers, rights and liabilities > Contracts by corporations; Business associations > Powers, rights and liabilities > Corporate borrowing; Business associations > Powers, rights and liabilities > Liability of corporations; Business associations > Powers, rights and liabilities > Powers and capacities of corporations; Business associations > Specific matters of corporate organization. Google Scholar
32. Any case addressing corporate law per se – even if other areas of law were more important to the decision’s outcome – was included in the initial search. This potentially resulted in an over-inclusive set of cases, as decisions that some readers might not consider ‘core’ corporate law cases were included in the dataset. See e.g. Livent, supra note 26, which is discussed in subpart III.C. Google Scholar
33. There is reason to believe Canadian securities regulators have been particularly influenced by US law. In general, the regulatory philosophy of the securities commissions has been more shareholder-centric than that of Canadian courts. Particularly in the takeover context, the securities commissions have consistently required target boards of directors to prioritize shareholder choice and shareholder value, often following the lead of well-known Delaware takeover cases. However, despite their potential significance, I chose not to include securities commission decisions for the following reasons: (a) although their rulings often overlap with corporate law, the jurisdiction of the securities commissions does not encompass corporate law per se, nor do their decisions generally apply to privately held corporations as a practical matter; (b) unlike Canadian courts, the securities commissions are not bound by formal principles of stare decisis, limiting their precedential law-making function; and (c) securities commission decisions are available on Westlaw only for relatively recent years. I leave the question of influences on securities regulators to a future dedicated study. Google Scholar
34. Most reported cases that did not include any judicial citations were very brief pro forma decisions with no citations to any sources. Google Scholar
35. Westlaw’s classification system does not appear to be 100 per cent accurate, nor does it return a perfectly stable number of cases. Months after first creating my dataset, re-running the same search parameters returned a slightly greater number of cases, suggesting that Westlaw periodically updates its Canadian Abridgment Digests. Despite its flaws, the Westlaw classification system is the most efficient means available for identifying a comprehensive set of corporate law cases. Google Scholar
36. The cases in the dataset are not evenly distributed over time. There are only 142 cases between 1867 and 1909, with a sudden spike of 199 cases in the decade 1910–19. The volume of cases then declines in the post-war period with a resurgence of cases beginning in the 1980s. The decade with the most cases is 2000–9 (the last full decade in the dataset), with 221 cases. Google Scholar
37. To reiterate, the Privy Council was classified as a Canadian court when deciding Canadian appeals; it was classified as an English court when being cited by other Canadian courts. Google Scholar
38. There are arguments for and against including citations in dissents and minority concurrences. Since my primary research question focuses on changes in the law – as determined and articulated by courts of appeal – I made the decision to systematically exclude judicial reasons that are not binding on lower courts (while acknowledging that dissents and concurrences can also signal changing legal influences). Many older cases feature seriatim opinions, by which each judge delivered a stand-alone opinion independent of all other opinions delivered in the case. These seriatim opinions required parsing each individual opinion in order to determine the ‘majority’ holding of the court. For these cases, only citations included within opinions consistent with the ‘majority’ position were included in the dataset. Google Scholar
39. Again, there are arguments for and against counting citations once per case versus once per individual citation. I ultimately decided that recording each separate instance of the same citation within a single decision might distort the data by overweighting the legal influence of certain cases based on arbitrary factors (citation styles of different judges, for example). In reality, it was rare for a single case to be cited multiple times within the same decision. Google Scholar
40. The decision to count all citations equally was based on three considerations: (a) even negative citations indicate some degree of legal influence; (b) as a practical matter, it is sometimes difficult to distinguish between positive and negative citations; and (c) true negative citations are relatively rare. Google Scholar
41. An underlying assumption of this study is that the number of citations to a particular country’s courts is a reasonable proxy for that country’s legal influence. This assumption may be questioned. There are a variety of reasons why citation statistics may not fully reflect legal influence. To give the most obvious example, if a Canadian court relies on American precedent in making an influential decision, and subsequent courts cite the Canadian decision rather than the original American precedent, then citation statistics would not fully reflect the actual influence of American law (that is, they would underweight American law and overweight Canadian law). Unfortunately, the risk of this type of measurement error is unavoidable given my methodology, which only provides information regarding raw numbers of citations. That said, given limited resources (namely, time spent reading and analysing cases), I feel confident that my methodology represents an appropriate trade-off between breadth, on the one hand, and detail, on the other. The reader should keep this trade-off in mind when assessing my results. Google Scholar
42. Early Canadian company law was directly influenced by American law. Currie, ‘First Dominion,’ supra note 7 at 392. By 1864, however, the company law of the Province of Canada had become increasingly similar to English legislation. This trend continued following Confederation, as ‘[i]n the course of time, [Canadian] borrowings from Britain increased relative to those from the United States.’ These ‘borrowings’ included prospectus requirements, greater creditor protections (including capitalization and call requirements), weak protections for minority shareholders, separate arrangement and winding-up acts, and general use of English legislative drafting conventions (at 403–4). Moreover, Canadian law eschewed the strong anti-trust restrictions that became common in American law in the late nineteenth century. See Camden Hutchison, ‘Corporate Law Federalism in Historical Context: Comparing Canada and the United States’ (2018) 64:1 McGill LJ 109. For these reasons and others – including historical financial ties between Canada and the United Kingdom – Canadian law was closer to English than American law by the early twentieth century. Contra Stewart, ‘History,’ supra note 8 at 459. Google Scholar
43. These percentages were calculated for each case by dividing the number of English or Canadian citations (as applicable) by the total number of judicial citations in the case. The resulting percentages were then averaged for all cases decided in a given year. Google Scholar
44. The trend lines in all of the graphs in this article are ordinary least squares regressions. Google Scholar
45. Note that there are fewer cases early in the time series, however. Google Scholar
46. The spike in American citations in 1900 is an anomaly due to the fact that only one corporate law decision was issued in 1900 (Union Bank v Eureka Woolen Manufacturing Co, (1900), 33 NSR 302), which included only two judicial citations, one of which was to an American decision. Google Scholar
47. This coding was based on a qualitative review of each case. Google Scholar
48. Cheffins, ‘Oppression Remedy,’ supra note 8 at 305, 313–14. The Canadian oppression remedy, which exists under the CBCA and most provincial corporations acts, has been referred to as ‘the broadest, most comprehensive and most open-ended shareholder remedy in the common law world.’ SM Beck, ‘Minority Shareholders’ Rights in the 1980s’ in Law Society of Upper Canada, Corporate Law in the ’80s (Don Mills, ON: Richard de Boo, 1982) 311 at 311–12. To an extent, the oppression remedy has served as an alternative to statutory derivate actions, which are far less common in Canada than in the United States. Cheffins, ‘Oppression Remedy,’ supra note 8 at 332–3. Google Scholar
49. Canadian law’s broad conception of fiduciary duties is expressed in Peoples Department Stores Inc (Trustee of) v Wise, 2004 SCC 68, [2004] 3 SCR 461; BCE Inc v 1976 Debentureholders, 2008 SCC 69, [2008] 3 SCR 560. The earlier case of Teck Corp v Millar (1972), 33 DLR (3d) 288 departed from stricter English precedent by allowing an incumbent board of directors to frustrate a disfavoured takeover offer by issuing shares to a competing suiter. In its decision, the court in Teck Corp stated that directors may ‘observe a decent respect for other interests lying beyond those of the company’s shareholders’ (at para 107). Teck Corp was cited approvingly in Peoples Department Stores Inc (ibid at para 42). Google Scholar
50. The plan of arrangement process, which requires affirmative court approval, is significantly different from the Delaware merger process. Although schemes of arrangement are similarly prominent in the United Kingdom, Australia, and other common law jurisdictions, Canadian arrangement law has developed its own features and characteristics. For comparisons of arrangement law in different jurisdictions, see Andrew J Nussbaum, ed, Mergers and Acquisitions: Jurisdictional Comparisons (London: Sweet & Maxwell, 2012) at 4–5, 69–71, 321–6, 374–5, 449–51. Google Scholar
51. This relatively small difference is unsurprising considering that the distinctiveness of Canadian fiduciary duties is a relatively recent phenomenon. Although its roots can be traced back at least as far as Teck Corp, the expanded conception of fiduciary duties was not adopted by the Supreme Court of Canada until the twentieth-first century. See note 49 above. Google Scholar
52. There are only twelve plan-of-arrangement cases in the entire dataset. The small number of plan-of-arrangement cases is likely explained by three factors. First, the arrangement provision of the CBCA was not enacted until 1978. Marc-André Morin, CBCA Plans of Arrangement and Insolvent Corporations (Toronto: Insolvency Institute of Canada, 2014) at 3. Second, decisions were coded as belonging to the ‘plan of arrangement’ category only if they addressed the substantive law of plans of arrangement, not if they merely involved a plan of arrangement. Finally, since plans of arrangement must be approved by a court, they may be unlikely to generate appellate litigation. Google Scholar
53. Although oppression existed as a judicial concept, the statutory oppression remedy first appeared in British Columbia in 1960. A revised version was introduced in the CBCA in 1975. Cheffins, ‘Oppression Remedy,’ supra note 8. Google Scholar
54. For cases decided prior to 1960, the concept of oppression was identified by express judicial references to ‘oppression’ or ‘oppressive’ conduct with respect to minority investors. Google Scholar
55. Since I treat my data as population data, conventional significance testing is inapplicable – any observed difference is intrinsically significant. That said, treating my data as sample data and performing a Student’s t-test would indicate statistical significance at p ≤ 0.01. Google Scholar
56. For oppression decisions after 1960, the mean percentage of American citations is nearly identical to that of non-oppression decisions: 1.6 per cent and 1.5 per cent, respectively. Thus, it does not appear American decisions have played a significant role in oppression jurisprudence. This is not surprising given that most states’ oppression remedies are more limited than their Canadian counterparts. For a fifty-state survey of dissolution/oppression remedies, see the appendix to John H Matheson & R Kevin Maler, ‘A Simple Statutory Solution to Minority Oppression in the Closely Held Business’ (2007) 91 Minn L Rev 657 at 700–9. Google Scholar
57. As an example, the case of O’Neill v Phillips, [1999] UKHL 24, substantially overhauled English oppression jurisprudence but has had minimal impact on Canadian law, at least at the appellate level. Google Scholar
58. Prince Edward Island passed CBCA-style legislation in 2018 (which, at the time of this writing, is awaiting implementation). Google Scholar
59. These cases (a) exclude British Columbia, Nova Scotia, and Prince Edward Island appellate cases applying the CBCA and (b) include Supreme Court of Canada cases applying British Columbia, Nova Scotia, or Prince Edward Island law. Google Scholar
60. Similar results hold if one compares all decisions of the British Columbia, Nova Scotia, and Prince Edward Island courts of appeal (as opposed to only those decisions applying provincial law) to the decisions of all other courts of appeal during the post-1975 period. Using this comparison, the mean percentage of Canadian citations in decisions of the British Columbia, Nova Scotia, and Prince Edward Island courts of appeal is approximately 81.7 per cent, while the mean percentage of Canadian citations for all other courts of appeal is approximately 84.9 per cent. Interestingly, across the entire time series, the mean percentage of English citations for all Quebec decisions is approximately 26.8 per cent (compared to approximately 40.1 per cent for all cases in the dataset), while the mean percentage of Canadian citations is approximately 68.2 per cent (compared to approximately 57.5 per cent for all cases in the dataset). Given the hybrid civil/common law nature of the Quebec legal system, Quebec courts may be less receptive to traditional English precedent. Anecdotally, Quebec courts are also more likely to cite European civil law cases, though even in Quebec, these citations are rare. Google Scholar
61. English company law’s influence on Canada can be contrasted with its minimal influence on the United States, where courts have rarely cited English cases. Eric Hilt, ‘History of American Corporate Governance: Law, Institutions, and Politics’ (2014) 6:1 Annual Rev Financial Economics 1 at 5. Google Scholar
62. Statute of Westminster, 1931 (UK), 22 Geo V, c 4. In addition to ending the Parliament of the United Kingdom’s authority to pass legislation extending to Canada, the Statute of Westminster also gave Canada the power to abolish appeals to the Privy Council (which the Parliament of Canada did not exercise in full until 1949). Google Scholar
63. For discussion of the Privy Council’s role in Canadian jurisprudence, see Debra Parkes, ‘Precedent Unbound? Contemporary Approaches to Precedent in Canada’ (2006) 32 Man LJ 135. Google Scholar
64. In addition to the abolition of Privy Council appeals, these historical factors may include the United Kingdom’s diminished status following World War II, the contemporary proliferation of domestic Canadian law schools, and the increasing political power of the Supreme Court of Canada. Google Scholar
65. This interpretation is consistent with more general accounts of the development of Canadian law. See e.g. John T Saywell, The Lawmakers: Judicial Power and the Shaping of Canadian Federalism (Toronto: University of Toronto Press, 2002). Google Scholar
66. Michael John Herman, ‘The Founding of the Supreme Court of Canada and the Abolition of the Appeal to the Privy Council’ (1976) 8 Ottawa L Rev 25. Google Scholar
67. Approximately 19.3 per cent of all cases in the dataset prior to 1950 are decisions by the Supreme Court of Canada, compared to approximately 6.6 per cent of all cases after 1949. Google Scholar
68. In the post-1949 period, the percentage of American judicial citations in Supreme Court of Canada decisions is approximately 2.5 per cent, while the same figure for all other courts is approximately 1.3 per cent. So while the Supreme Court is roughly twice as likely as other appellate courts to cite American cases, the absolute number of American citations is so small that one must be cautious in placing significance on the difference. Google Scholar
69. Although I treat my dataset as population data, treating it as sample data and performing a Student’s t-test would indicate statistical significance at p ≤ 0.01. Google Scholar
70. See notes 23–4 above and accompanying text. Google Scholar
71. See note 87 below and accompanying text. Google Scholar
72. This phenomenon is noted by Bruce Welling, who writes that the reasons for Canadian courts’ close adherence to English precedents ‘are mysteries as yet unexplained in Canadian law.’ Bruce Welling, Corporate Law in Canada: The Governing Principles, 3d ed (London: Scribblers Publishing, 2006) at 54. Google Scholar
73. An Act to Authorize the Granting of Charters of Incorporation to Manufacturing, Mining, and Other Companies, 27 & 28 Vic, c 23 [Companies Act]. Although the Province of Canada ceased to exist upon Confederation, the province of Ontario continued to use the former Companies Act. Google Scholar
74. Under company law principles at the time, a shareholder could be held liable to company creditors for any unpaid portion of the nominal value of his or her shares. William Fraser & Cornelius A Masten, Company Law of Canada, 2d ed (Toronto: Carswell, 1920) at 617–20 [Fraser & Masten, Company Law]. Google Scholar
75. As was common practice at the time, the justices in McCraken, supra note 26, delivered seriatim opinions, making the ruling of the Court (and the majority–minority breakdown) somewhat difficult to interpret. Google Scholar
76. Companies Act, supra note 73. Google Scholar
77. Fraser & Masten, Company Law, supra note 74 at para 69. To be clear, I am not suggesting the Court’s citation of English law is inappropriate. Given the underdeveloped state of Canadian case law, decisions under the English statute were likely the most relevant precedent available. Google Scholar
78. Ibid at para 111. Google Scholar
79. Ibid at paras 124–43. Google Scholar
80. Ibid at para 33. Google Scholar
81. Companies Act, 1867, 30 & 31 Vic, c 131. Google Scholar
82. Fraser & Masten, Company Law, supra note 74 at para 62. Google Scholar
83. Ibid at para 70. Google Scholar
84. In the late 1800s, it was common for investors to subscribe to a nominal amount of company shares without paying the full purchase price. When the company needed capital, it could ‘call’ on shareholders to pay the unpaid balance on their shares. Since the liability of shareholders extended to the nominal value of all subscribed-for (but unpaid) shares, litigation by creditors against shareholders was common. See Fraser & Masten, Company Law, supra note 74 at 154–66. Google Scholar
85. Prior to the development of modern law schools in Canada, lawyers were called to the bar following a combination of formal instruction, ‘term keeping,’ and apprenticing in a practitioner’s office. It is unclear what effect this system had on maintaining English legal traditions. For a description of legal education in nineteenth-century Ontario, see G Blaine Baker, ‘Legal Education in Upper Canada 1785–1889’ in David H Flaherty, ed, Essays in the History of Canadian Law (Toronto: Osgoode Society for Canadian Legal History, 2012) 49 [Baker, ‘Legal Education’]. Google Scholar
86. Indeed, similar problems faced lawyers in the United States. Lack of access to domestic legal materials was one reason for the tremendous success and influence of William Blackstone’s Commentaries on the Laws of England (Oxford: Clarendon Press, 1765). See Albert W Alschuler, ‘Rediscovering Blackstone’ (1996) 145:1 U Pa L Rev 1 at 4–9; Daniel J Boorstin, The Mysterious Science of the Law: An Essay on Blackstone’s Commentaries (Chicago: University of Chicago Press, 1996) at xiv–xvi; Mary Ann Glendon, Rights Talk: The Impoverishment of American Political Discourse (New York: Free Press, 1991) at 23. Blackstone’s Commentaries also played a major role in Canadian legal education. Baker, ‘Legal Education,’ supra note 85 at 94. Google Scholar
87. For discussion of the English influence on nineteenth-century Canadian law, see Richard CB Risk, ‘The Law and the Economy in Mid-Nineteenth-Century Ontario: A Perspective’ in David H Flaherty, ed, Essays in the History of Canadian Law (Toronto: University of Toronto Press, 1981) 88 at 93–100, 106–12, 125. Google Scholar
88. There are 116 cases in the dataset decided within the decade of 1930–9. Google Scholar
89. For many Privy Council cases from this time period, the original trial court decision is unavailable. In Solloway, the published judgment of the Court of Appeal of Ontario includes the original judgment of the Supreme Court of Ontario. See Solloway v McLaughlin, [1934] OR 464. The Supreme Court of Ontario judgment was itself an appeal from an unpublished decision of an assistant master. Solloway, supra note 26. Google Scholar
90. Although my dataset does not include trial court decisions, it is useful to consider the judgment of the Supreme Court of Ontario for comparison purposes. Google Scholar
91. Rochester v Solloway, Mills, et al, [1933] OR 230. Google Scholar
92. Rex v Smart and Young, [1931] OR 176; Trusts & Guarantee Co v Brenner, [1932] OR 245. Google Scholar
93. Solloway v Blumberger, [1933] SCR 163. Google Scholar
94. The case was decided by a four-to-one majority. Google Scholar
95. Smith v Baker (1873), LR 8 CP 350; Ex parte Vaughan, In re Riddeough (1884), 14 QBD 25. Google Scholar
96. Alternatively, this may simply be a reflection of how the case was argued by counsel. Unfortunately, the legal factums of the parties are unavailable. Google Scholar
97. Edmondson v Nuttall (1864), 144 ER 113. Google Scholar
98. In constitutional law, the conventional interpretation for many decades – shaped by the academic writings of Bora Laskin – was that the Privy Council was, at best, woefully out of touch with Canadian law, history, and political culture and, at worst, an active saboteur of a strong federal government. For a useful analysis of this literature, see Richard Risk, ‘The Scholars and the Constitution: P.O.G.G. and the Privy Council’ (1995) 23 Man LJ 496. For well-known examples of the genre, see Bora Laskin, ‘Peace, Order and Good Government Re-Examined’ (1947) 25 Can B Rev 1054; Mark MacGuigan, ‘The Privy Council and the Supreme Court: A Jurisprudential Analysis’ (1966) 1 Alta L Rev 419; Edward McWhinney, Judicial Review in the English-Speaking World (Toronto: University of Toronto Press, 1956); Frank Scott, ‘Centralization and Decentralization in Canadian Federalism’ (1951) 29 Can B Rev 1095; Alexander Smith, The Commerce Power in Canada and the United States (Toronto: Butterworths, 1963). More favourable perspectives on the Privy Council’s role in Canadian constitutional development include Ronald I Cheffins & Ronald N Tucker, The Constitutional Process in Canada, 2d ed (Toronto: McGraw-Hill Ryerson, 1976) at 108; William Lederman, ‘Some Forms and Limitations of Co-Operative Federalism’ (1967) 45 Can B Rev 409; Peter H Russell, Rainer Knopff & Frederick Lee Morton, Federalism and the Charter: Leading Constitutional Decisions (Ottawa: Carleton University Press, 1989) at 5–7. Google Scholar
99. As compared to approximately 40.1 per cent for all cases in the dataset. Google Scholar
100. Note that although I treat my dataset as population data, treating it as sample data and performing a Student’s t-test would not indicate statistical significance for the post-1975 period. Google Scholar
101. Although the existence of a duty of care owed by an auditor to its corporate client was established in Hercules Management Ltd v Ernst & Young, [1997] 2 SCR 165 [Hercules], this earlier case left the potential scope of auditor liability undetermined. Google Scholar
102. Stephanie Ben-Ishai & David R Percy, Contracts: Cases and Commentaries, 10th ed (Toronto: Thomson Reuters, 2018) at 2–3; Justice Allen M Linden, ‘The American Influence on Canadian Tort Law’ (2002) 50 UCLA L Rev 407 at 410; Bruce MacDougall, Introduction to Contracts, 3d ed (Toronto: LexisNexis Canada, 2016) at 8; Philip H Osborne, The Law of Torts, 5th ed (Toronto: Irwin Law, 2015) at 7; Bruce H Ziff et al, A Property Law Reader: Cases, Questions and Commentary, 4th ed (Toronto: Thomson Reuters, 2016) at 75. Google Scholar
103. Thus, repeating the pattern observed in McCraken, supra note 26. The Supreme Court of Canada is not alone in favouring its own precedent. Most citations of the Supreme Court of the United States, for example, are to its own prior decisions. Frank B Cross et al, ‘Citations in the U.S. Supreme Court: An Empirical Study of their Use and Significance’ (2010) 2010 U Ill L Rev 489 at 490–1. Google Scholar
104. Hercules, supra note 101. Google Scholar
105. Cooper v Hobart, 2001 SCC 79, [2001] 3 SCR 537 [Cooper]. Google Scholar
106. Canadian Dredge & Dock Co et al v R, [1985] 1 SCR 662. Google Scholar
107. Anns v London Borough of Merton, [1977] UKHL 4 [Anns]. Interestingly, Anns was overruled by Murphy v Brentwood District Council, [1991] UKHL 2, a decision which has not been followed by Canadian courts. See Hercules, supra note 101 at paras 19–21. In the contemporary period, Canadian courts have become highly selective in how they apply English law. Google Scholar
108. Anns, supra note 107, served as the basis of the Court’s duty analysis for claims of pure economic loss in cases such as Hercules; Bow Valley Husky (Bermuda) Ltd v Saint John Shipbuilding Ltd, [1997] 3 SCR 1210; and Canadian National Railway Co v Norsk Pacific Steamship Co, [1992] 1 SCR 1021. The Court clarified the Anns test in Cooper, which involved the British Columbia Registrar of Mortgage Broker’s failure to suspend a fraudulent mortgage broker. Although Hercules recognized a duty owed by an auditor in preparing an audit of its corporate client, Livent was the first Supreme Court of Canada case to apply the Anns/Cooper framework to an auditor–client relationship. Google Scholar
109. The continuing citations to English law, compared to the paucity of citations to American law, may be explained in part by the relative unfamiliarity of Canadian lawyers and judges with the structure of the American legal system. My own anecdotal observation is that many Canadian practitioners do not fully understand the constitutional and legal separation between the federal judicial system, on the one hand, and the state judicial systems, on the other (just as few American lawyers fully understand the Canadian system), resulting in a general reticence to cite American law. Google Scholar
110. South Australia Asset Management Corp v York Montague Ltd, [1997] AC 191. Google Scholar
111. In the Court of Appeal decision, 26 per cent of the judicial citations are to English decisions, 14 per cent are to American decisions, and 6 per cent are to other Commonwealth countries. In the Superior Court of Justice decision, approximately 17.2 per cent of the citations are to English decisions, approximately 10.3 per cent are to American decisions, and approximately 5.2 per cent are to other Commonwealth countries. Google Scholar
112. For all cases in the dataset decided in 2017, the average percentage of Canadian citations is approximately 92.5 per cent. Google Scholar
113. See notes 21–2 above and accompanying text. Google Scholar
114. See note 9 above and accompanying text. Google Scholar
115. See notes 49–50 above and accompanying text. Google Scholar
116. Peter McCormick argues that the best label for Supreme Court of Canada jurisprudence is ‘nationalism,’ given the Court’s strong and increasing focus on domestic citations. McCormick, Supreme at Last, supra note 25 at 242. In comparison, the High Court of Australia cites American sources far more often than the Supreme Court of Canada. Paul von Nesson, ‘Is There Anything to Fear in Transnational Development of Law? The Australian Experience’ (2006) 39 Pepp L Rev 883 at 917, 919. Google Scholar
117. Livent, supra note 26, may suggest as much. See note 100 above and accompanying text. Google Scholar