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Corporate Identification Doctrine

. Caja Paraguaya de Jubilaciones y Pensiones del Personal de Itaipu Binacional v. Garcia

In Caja Paraguaya de Jubilaciones y Pensiones del Personal de Itaipu Binacional v. Garcia (Ont CA, 2020) the Court of Appeal considered the 'corporate identification doctrine' as it relates to ex turpi causa doctrine [wikipedia: Ex turpi causa non oritur actio is a legal doctrine which states that a plaintiff will be unable to pursue legal remedy if it arises in connection with his own illegal act]:
[13] The corporate identification doctrine is not a free-standing rule; rather it is used for the purposes of applying the ex turpi causa doctrine which is also relied on by the appellants. The overriding concern is whether recovery by the respondent would damage the integrity of the legal system. See: Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, [2017] 2 S.C.R. 855, at para. 98.

[14] Further, in Christine DeJong Medicine Professional Corp. v. DBDC Spadina Ltd., 2019 SCC 30, 435 D.L.R. (4th) 379, Brown J. indicated, at para. 2:
What the Court directed in Livent, at para. 104, was that even where those criteria are satisfied, “courts retain the discretion to refrain from applying [corporate attribution] where, in the circumstances of the case, it would not be in the public interest to do so”. [Emphasis in original.]
. DBDC Spadina Ltd. v. Walton

In DBDC Spadina Ltd. v. Walton (Ont CA, 2018) the Court of Appeal considered the 'corporate identification' (or 'alter ego') theory (the Ont CA majority ruling was replaced by the van Rensburg dissent at the SCC [Christine DeJong Medicine Professional Corp. v. DBDC Spadina Ltd. (SCC, 2019)] on the issue of 'knowing assistance', but these quote re corporate identification appear still useful):
[59] A corporation is an abstract legal entity and has no mind or will of its own. Consequently, for civil and criminal purposes, its mind or will is found in the natural person or persons acting as the directing mind or will of the corporation: the “ego” or “alter ego” of the corporation; the centre of the corporate personality. This theory of corporate “identification” or “attribution” was first developed by Viscount Haldane L.C. in Lennard’s Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd., [1915] A.C. 705, at pp. 713-714, a case involving civil fault and negligence. It was explored at length in the criminal context by Estey J. in Canadian Dredge, at pp. 677-685, and has been found to be “equally applicable in a civil action” in Canada: Standard Investments Ltd. v. Canadian Imperial Bank of Commerce (1985), 1985 CanLII 164 (ON CA), 52 O.R. (2d) 473 (C.A.), at para. 55, leave to appeal refused, [1986] S.C.C.A. No. 29.

[60] The corporate identification doctrine was aptly summarized – in the civil context, but with the acknowledgement that the alter ego doctrine applies “with no divergence of approach” in civil and criminal matters – by Nourse L.J. in El Ajou, at pp. 695-696:
This doctrine, sometimes known as the alter ego doctrine, has been developed, with no divergence of approach, in both criminal and civil jurisdictions, the authorities in each being cited indifferently in the other. A company having no mind or will of its own, the need for it arises because the criminal law often requires mens rea as a constituent of the crime, and the civil law intention or knowledge as an ingredient of the cause of action or defence. In the oft-quoted words of Viscount Haldane LC in Lennards Carrying Co. Ltd v. Asiatic Petroleum Co Ltd:
‘My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.’
The doctrine attributes to the company the mind and will of the natural person or persons who manage and control its actions. At that point, in the words of Millett J:[9] ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’ It is important to emphasize that management and control is not something to be considered generally or in the round. It is necessary to identify the natural person or persons having management and control in relation to the act or omission in point…

Decided cases show that, in regard to the requisite status and authority, the formal position, as regulated by the company’s articles of association, service contracts and so forth, though highly relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view he was right to do so. [Emphasis added; citations omitted.]

. see Canadian Dredge & Dock Co. v. The Queen (SCC, 1985)


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