The Legislature Strikes Back: The Effect of Ontario’s Bill 152 on the Statutory Duty of Care in the Peoples Decision

In this article, the author critically analyzes theSupreme Court of Canada’s decision in PeoplesDepartment Stores Inc. v. Wise. This decisioninterpreted s. 122(1) of the Canada BusinessCorporations Act in a way so as to declare that it was“obvious” that the duty of care placed on directorsand officers is owed to a broad range of beneficiaries,including creditors. The author argues that thedecision, while defensible, was neither “obvious” norwas it appropriate. The amendments to the OntarioBusiness Corporations Act may come closer to theintentions of Parliament in passing the CanadaBusiness Corporations Act. Furthermore, the rules ofstatutory interpretation are employed to demonstratethat the broadened duty of care found by the SupremeCourt may actually cause directors and officers to bemore self-interested, rather than putting the interestsof the corporation ahead of their own. Such a changein approach may lead to statutory absurdity or aviolation of the presumption against tautology.Therefore, a narrower duty of care, owed only to thecorporation, as enacted by the Ontario legislature,should be recognized.