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48 Can. Bus. L.J. 255 (2009)
BCE and the Peoples' Corporate Law: Learning to Live on Quicksand

handle is hein.journals/canadbus48 and id is 259 raw text is: BCE AND THE PEOPLES' CORPORATE LAW: LEARNING TO LIVE ON QUICKSAND Jeffrey G. Macintosh* I. INTRODUCTION This article discusses two recent Supreme Court of Canada holdings: Peoples Department Stores Inc. (Trustee of) v. Wise' and BCE Inc. (Arrangement relatif d) (Re).: Although much of both decisions is per incuriam, obiter dictum, or both, these rulings have thrown the most basic principles of corporate law into a state of uncertainty and confusion. In my view, only legislative intervention (in particular, declaring that directors' duties are owed to shareholders alone) can adequately address the difficulties that these rulings have created.3 II. THE CONCEPTUAL INDETERMINACY OF THE SUPREME COURT'S STANDARD The central question in BCEis no less than the central question in all of corporate law: to whom are directors' duties owed? The Canada Business Corporations Act4 (CBCA) and cognate statutes state that directors (and officers) must act honestly, in good faith, and in the best interests of the corporation.5 How then, do we interpret the best interests of the corporation? The traditional answer to this question in both English and Canadian common law, as well as both prior and contemporaneous federal statute law, is that the corporation means the shareholders. 6 The Supreme Court, however, states that the * Toronto Stock Exchange Professor of Capital Markets, Faculty of Law, University of Toronto. 1. [2004] 3 S.C.R. 461, 244 D.L.R. (4th) 564. 2. [2008] S.C.J. No. 37 (QL), [2008] 3 S.C.R. 560. 3. The issues discussed in this comment are more fully discussed in a longer article currently in preparation. 4. R.S.C. 1985, c. C-44. 5. CBCA s. 122(l)(a) (emphasis added). 6. See MacIntosh, supra, footnote 3.

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