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2. 5 Eliz. c. 4 (1562). For a discussion of the background to the statute, see Woodward, Donald, “The Background to the Statute of Artificers: The Genesis of Labour Policy, 1558–63,” Economic History Review, n.s. 33 (1980): 32–44.Google Scholar On the operation of the act and its use for wage recovery, see Hay, Douglas, “England 1562–1875: The Law and Its Uses,” in Masters, Servants, and Magistrates in Britain and the Empire, 1562–1955, ed. Craven, Paul and Hay, Douglas (Chapel Hill: University of North Carolina Press, 2004), 59–116.Google Scholar The earlier Ordinance of Laborers (1349)Google Scholar 23 Edw. III and Statute of Laborers (1351)Google Scholar 25 Edw. III, stat. 2, made no provision for wage recovery. See Palmer, Robert C., English Law in the Age of the Black Death, 1348–1381 (Chapel Hill: University of North Carolina Press, 1993), 14–23Google Scholar.

3. For an early survey of Canadian wage protection laws, see “Legislation in Canada with Regard to Payment and Protection of Wages,” Labour Gazette (October 1906), 377–87Google Scholar.

4. Hansmann, Henry and Kraakman, Reiner, “What Is Corporate Law?” in The Anatomy of Corporate Law, ed. Kraakman, Reiner et al. (Oxford: Oxford University Press, 2003), 1, 8–10.Google Scholar Their view that the widespread adoption of limited liability for corporations is strong evidence of its value is contested by recent works in economic sociology that see the triumph of the modern corporation as a political accomplishment of powerful actors. See Perrow, Charles, Organizing America (Princeton: Princeton University Press, 2002), esp. 207–9 andGoogle ScholarRoy, William G., Socializing Capital (Princeton: Princeton University Press, 1997)Google Scholar.

5. For a critique of limited shareholder liability, see Glasbeek, Harry J., Wealth by Stealth: Corporate Crime, Corporate Law and the Perversion of Democracy (Toronto: Between the Lines, 2002).Google Scholar For arguments in favour of modest reforms, see Hansmann, Henry and Kraakman, Reiner, “Towards Unlimited Liability for Corporate Torts,” Yale Law Journal 100 (1991): 1879–1934 (supporting shareholder liability to involuntary creditors) andCrossRefGoogle ScholarHalpern, Paul, Trebilcock, Michael, and Turnbull, Stuart, “An Economic Analysis of Limited Liability in Corporation Law,” University of Toronto Law Journal 30 (1980): 117–50CrossRefGoogle Scholar at 149–50 (approving director liability for workers' wages).

6. The legal basis of the limited liability of directors to third parties for the debts of the corporation is distinct from that of shareholders, rooted in the law of agency. We return to this issue below in the discussion of the substitution of director for shareholder liability in Canada in the 1860s.

7. For a useful overview, see Millon, David, “Theories of the Corporation,” Duke Law Journal [1990] (1990): 201–62CrossRefGoogle Scholar at 205–11. This article does not address the mechanisms for the protection of non-wage-earning creditors. These have been extensively discussed in the literature on the history of the corporation. For example, see Hurst, James Willard, The Legitimacy of the Business Corporation in the Law of the United States,1780–1970 (Charlottesville: University of Virginia Press, 1970), 51–53Google Scholar.

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12. Roy, , Socializing Capital, 46.Google Scholar

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16. Haar, , “Legislative Regulation,” 196;Google ScholarHovenkamp, , Enterprise, 51;Google ScholarCadman, , Corporation, 345Google Scholar.

17. New York State Senate, Report, No.143 (22 November 1847), 9.Google Scholar The double liability provision became known as the Oriskany clause, named after the manufacturing corporation whose charter renewal application set the new standard.

18. On Barlow, see http://www.barlowgenealogy.com/Politics/index.html (5 March 2007).

19. New York State Senate Report of the committee on manufactures, on petitions for the incorporation of manufacturing companies, No. 13 (19 January 1846), 1.Google Scholar

20. Ibid., 2.

21. Ibid., 3.

22. Ibid., 4.

23. Gunn, , Decline of Authority, 170–97 andGoogle Scholar“Antebellum Society and Politics (1825–1860)” in The Empire State, ed. Klein, Milton M. (Ithaca: Cornell University Press, 2001), 390–93;Google ScholarGalie, Peter J., Ordered Liberty: A Constitutional History of New York (New York: Fordham University Press, 1996), 95–116Google Scholar.

24. Lincoln, Charles Z., The Constitutional History of New York (Rochester, N.Y.: Lawyers Co-operative Publishing, 1906), 2:184–95. According to A. B. Johnson, president of a Utica bank and a strong supporter of free incorporation, the measure lifted the “demoralizing effect of legislative attempts to restrain men unnecessarily from promoting their own interests” by making incorporation readily accessible to all, thereby eliminating the problem of monopoly and the corruption of the legislative process that was associated with special charters.Google ScholarJohnson, A. B., “The Legislative History of Corporations in the State of New York, or, The Progress of Liberal Sentiments,” Hunt's Merchants Magazine XXIII (December 1850), 610–14 inGoogle ScholarThe Government and the Economy, 1785–1861, ed. Goodrich, Carter (Indianapolis: Bobbs Merrill, 1967), 396–405 at 401Google Scholar.

25. New York State Constitution (1846), Art. 8, § 1–2; Bishop, William G. and Attree, William H., eds., Report of the Debates and Proceedings of the Convention for the Revision of the Constitution of the State of New York (Albany: Evening Atlas, 1846), 975–79, 1013, 1020–21Google Scholar; Lincoln, , Constitutional History, 184–95Google Scholar.

26. New York State Senate, Report on so much of the Constitution as relates to manufacturing corporations, No. 53 (4 March 1847), 3.Google Scholar

27. Ibid., 4.

28. Ibid., 17.

29. Ibid., 20–21.

30. New York State Senate, Report, No. 143 (22 Nov. 1847), 17, 19.Google Scholar

31. “The…principle that they shall be liable to the classes of creditors who from the nature of the service they render are compelled to give credit until the service is performed, is founded in justice and sound policy…” New York State Assembly, Report, No. 240 (18 Nov. 1847), 6.Google Scholar Also see New York State Senate, Report, No. 116 (29 September 1847)Google Scholar.

32. Albany Argus, 9 October 1847,Google Scholar quoted in Gunn, , Decline of Authority, 235Google Scholar.

33. Letter to the editor, E., “The Manufacturing Bill at Oswego,” Albany Evening Atlas, 9 October 1847, 2Google Scholar.

34. New York State Senate, Report, No. 143 (22 November 1847), 6–9.Google Scholar Also see Albany Evening Argus, 19 November 1847, 2Google Scholar for an account of the assembly debate.

35. Messages from the Governors of New York, Vol. 4, 400, January. 4 1848, cited inGoogle ScholarSeavoy, Ronald E., The Origins of the American Business Corporation, 1784–1855 (Westport, Conn.: Greenwood Press, 1982), 194.Google ScholarAlbany Evening Atlas, 4 January 1848, 2.Google Scholar On the background to the 1848 election and its results, see McCurdy, Charles W., The Anti-Rent Era in New York Law and Politics (Chapel Hill: University of North Carolina Press, 2001), 280–81Google Scholar.

36. An Act to authorize the formation of corporations for manufacturing, mining, mechanical or chemical purposes, Laws of New York, 1847, Chap. 40.Google Scholar Editorial comment divided along predictable lines. See “The General Manufacturing Bill,” Daily Albany Argus (12 February 1848), 2Google Scholar (favorable) and “Individual Liability—Remarks of Senator Hawley,” Albany Evening Argus (11 February 1848), 2 (unfavorable)Google Scholar.

37. Constitution for the State of Upper Canada, quoted in McKay, R. A., “The Political Ideas of William Lyon Mackenzie,” Canadian Journal of Economics and Political Science 3 (1937): 1–22CrossRefGoogle Scholar at 19. Also, see Gates, Lillian F., “The Decided Policy of William Lyon Mackenzie,” Canadian Historical Review 40 (1959): 185–208;CrossRefGoogle ScholarCreighton, Donald, The Empire of the St. Lawrence (Toronto: Macmillan, 1956), 278–80.Google Scholar More recent discussions include Greer, Allan, “Historical Roots of Canadian Democracy,” Journal of Canadian Studies 34 (1999): 7–26 andCrossRefGoogle ScholarWilton, Carol, Popular Politics and Political Culture in Upper Canada, 1800–1850 (Montreal: McGill-Queen's University Press, 2000)Google Scholar.

38. Fecteau, Jean-Marie, “Les ‘petites républiques’: les compangnies et la mise en place du droit corporatif moderne au Québec au milieu du 19e siécle,” Histoire Sociale—Social History 49 (1992): 35–56Google Scholar at 45–50. The Province of Canada was formed by uniting Upper and Lower Canada, which became officially known as Canada West and Canada East. After Confederation in 1867, the provinces assumed their present names of Ontario and Quebec. To limit confusion, I use the designation of Upper and Lower Canada when discussing events in the pre-Confederation period.

39. Careless, J. M. S., The Union of the Canadas (Toronto: McClelland and Stewart, 1967), 104–9;Google ScholarOtter, A. A. Den, The Philosophy of Railways (Toronto: University of Toronto Press, 1997), 34–64;CrossRefGoogle ScholarSullivan, R. B., Lecture Delivered before the Mechanics' Institute of Hamilton on the Connection between the Agriculture and Manufactures of Canada (Hamilton: Ruthven, 1848)Google Scholar.

40. Debates of the Legislative Assembly of United Canada (8 November 1843), 725–29;Google Scholar S. Prov. Can. 1843, c. 45, s. 19. There was also a debate about limited liability in bank charters that focused on the risks to depositors. It was resolved by imposing double liability on shareholders, initially at the insistence of the Colonial Office. See S. Prov. Can. 1849, c. 84 (no wage liability) and Jamieson, A. B., Chartered Banking in Canada (Toronto: Ryerson Press, 1957), 7Google Scholar.

41. Debates (20 January 1845), 1005–11;Google Scholar (6 March 1845), 1950–55 (quote at 1954). S. Prov. Can. 1845, c. 91 & 92. The bills were reserved by the governor, E. G. Metcalfe, on the ground that they were inconsistent with English policy not to grant corporate status to enterprises that did not require substantial capital, but the Colonial Office took no action on the ground that the resulting inconvenience would be too great, especially given that the matter had been already considered locally. See Fecteau, , “Les ‘petites républiques,’” 52–53.Google Scholar More generally on debates over limited liability in Canada during this period, see Risk, , “Nineteenth-Century Foundations,” 295–98Google Scholar.

42. Debates (3 March 1845), 1856–58.Google Scholar

43. Debates (5 March 1845), 1940–41,Google Scholar (28 April 1846), 1016–18.

44. Debates (14 May 1846), 1451–52.Google Scholar S. Prov. Can. 1846, c. 94, s. 14. One Upper Canadian reform newspaper, The Examiner, opposed this compromise, in part based on a misunderstanding of the extent of directors' liability, but more fundamentally because of their radical reform outlook that associated the rise of corporations with the creation of a situation in which “labour becomes subservient to capital” and “the few are privileged and the many wronged.” The Examiner, “The Personal Liability Principle,” (20 May 1846), 2Google Scholar (quote), and “Individual Liability,” (27 May 1846), 2Google Scholar.

45. Debates (16 July 1847), 1083.Google Scholar S. Prov. Can. 1847, c. 69, 70, 71 & 72.

46. Debates (24 July 1847), 1125. Also, seeGoogle ScholarThe Examiner, 21 July 1847, 2Google Scholar.

47. Debates (15 March 1849), 1347–49.Google Scholar S. Prov. Can., c. 192, s. 3, 4. Later that session the legislature passed without debate a statute providing for the creation of limited partnerships in Upper Canada. S. Prov. Can. 1849, c. 75. It followed the commandite principle, limiting the liability of passive investors to the amount of their investment, but keeping active partners personally liable for the debts of the partnership.

48. Debates (9, 16 & 18 April 1849), 1788–90,Google Scholar 1895, 1956; Journals of the Legislative Assembly of the Province of Canada (10 May 1849), 287;Google ScholarCurrie, , “First Dominion,” 391.Google Scholar That session two general incorporation statutes were passed for companies engaged in the construction of roads, bridges, piers, and wharves but neither provided for stockholder liability. See S. Prov. Can. 1849, c. 56 & 84. As well, a limited partnership statute for Upper Canada was passed that permitted partnerships with general partners, who were personally liable for the partnership's liabilities, and special partners who were not. See S. Prov. Can. 1849, c. 75.

49. Debates (10 & 27 June, 15, 22 & 24 July 1850), 464–67,Google Scholar 1204–5; Currie, , “First Dominion,” 391–93; S. Prov. Canada, 1850, c. 28, s. 11Google Scholar.

50. There was a confused debate in 1855 over a bill to incorporate the Montreal Locomotive Manufacturing Company. A number of members objected to limited liability because the objects of the company were broadly defined so as to allow it to compete with small producers who lacked this protection. The matter was resolved by limiting the company's area of business. No provision was made for either shareholder or director liability for workers' wages. See Debates (12 April 1855), 2745–47;Google Scholar S. Prov. Canada 1855, c 221.

51. Careless, , Union, 166–84Google Scholar; “Our Platform,” The North American (3 January 1851), 2.Google Scholar

52. Careless, , Union, 132–49Google Scholar; McCallum, John, Unequal Beginnings: Agriculture and Economic Development in Quebec and Ontario until 1870 (Toronto: University of Toronto Press, 1980);CrossRefGoogle ScholarTaylor, Graham D. and Baskerville, Peter A., A Concise History of Business in Canada (Toronto: Oxford University Press, 1994), 170–85Google Scholar.

53. For data on incorporation in Upper Canada, see Risk, , “Nineteenth-Century Foundations,” 304–5.Google Scholar The scope of the general incorporation statute was expanded over the decade to include, among others, public hotels, the supply of gas and water, road construction, timberworks, and fishing. See S. Prov. Can. 1853, c. 122, 124, 190, 191; S. Prov. Can. 1858, c. 90.

54. For example, the Montreal and Kingston Railway Co. (S. Prov. Canada 1851, c. 143), the Montreal Ocean Steamship Co. (S. Prov. Can. 1854, c. 44), and the Collingwood Cotton Manufacturing Co. (S. Prov. Can. 1859, c. 110) made no provision for personal liability, while the Megantic Mining Co. (S. Prov. Can. 1854, c. 49) and the Shipton Slate Works Co. (S. Prov. Can. 1854, c. 53) made directors personally liable for unpaid workers' wages. A number of general incorporation statutes for public utilities were also enacted in the 1850s, none of which included director or shareholder liability for workers' wages. For example, see S. Prov. Can. 1852, c. 10 (telegraphs); S. Prov. Can. 1853, c. 124 (harbors), c. 173 (gas and water works), c. 190 (river improvements).

55. For example, see S. Prov. Can. 1851, c. 64. For an overview of liability provisions, as well as a table that breaks down incorporations in Upper Canada prior to 1867 by year, industry, and type of incorporation, see Risk, , “Nineteenth-Century Foundations,” 295–98, 304–5Google Scholar.

56. S. Prov. Can. 1860, c. 31, ss. 47, 48, and 53; S. Prov. Can. 1861, c. 18, ss. 33, 34, and 39. For a discussion of these changes and the uncertainty surrounding the motivation, see Currie, , “First Dominion,” 396–98Google Scholar.

57. S. Prov. Can. 1864, c. 23; S.C. 1869, c. 13. Director liability for workers' wages was also made a standard term of post-confederation Canadian special incorporation statutes. S.C. 1869, c. 12.

58. On Dunkin, see entry in Dictionary of Canadian Biography Online http://www.biographi.ca/EN/index.html (5 March 2007). Previous researchers have noted the dearth of materials on the background to these various incorporation statutes. For example, see Currie, , “First Dominion,” 396–98Google Scholar; Wegenast, F. W., The Law of Canadian Companies (Toronto: Burroughs, 1931), 21Google Scholar.

59. S. Prov. Can. 1850, c. 28, s. 4; S. Prov. Can. 1860, c. 31, s. 18; S. Prov. Can. 1861, c. 18, s. 9.

60. On the predominance of small firms and the slow growth of the Canadian securities market during this period, see Taylor, and Baskerville, , Concise History, 181–85,Google Scholar 217–25 and Michie, Ranald C., “The Canadian Securities Market, 1850–1914,” Business History Review 62 (1988): 35–73CrossRefGoogle Scholar.

61. It should be noted, however, that by virtue of the 1849 Interpretation Act, limited liability was enjoyed by all corporations unless express exception were made. See S. Prov. Can. 1849, c. 10, s. 5(24). This did not change the practice of making express provision for limited shareholder liability in both general and special incorporation statutes.

62. The distinct legal foundations of limited liability for shareholders and directors' liability was one that was not always clearly recognized and is still often overlooked in current jurisprudence and debates. See Flannigan, Robert, “The Personal Tort Liability of Directors,” Canadian Bar Review 81 (2002): 247–322Google Scholar at 248. For an example of director liability, see S. Prov. Can. 1850, c. 28, s. 14 (paying dividends out of capital).

63. For example, see S.Q. 1868, c. 25, s. 48; S.C. 1869, c. 12, s. 40; S.C. 1869, c. 13; S.O. 1874, s. 52; S.M. 1875, c. 28, s. 52; Companies Ordinance, N.W.T. 1901, c. 20, s. 54, S.S. 1915, c. 14, s. 103. The issue of limited liability corporations also arose in Nova Scotia. Early reformers Joseph Howe and William Young unsuccessfully opposed limited shareholder liability for banking corporations in the 1830s, but it became increasingly common for the legislature to insert some form of shareholder liability into incorporation acts passed during the 1830s and 1840s. In 1851 Nova Scotia enacted a limited partnerships act based on the commandite principle (R.S.N.S. 1851, c. 79), but the general incorporation statute, passed the same year, made no provision for limited investor liability (R.S.N.S. 1851, c. 87). In S.N.S. 1862, c. 2, the principle of double liability was adopted, but even this form of limited liability was omitted in its general incorporation act of 1873 (S.N.S. 1873, c. 13). Full limited liability for shareholders only became a permanent feature of Nova Scotia corporation law in 1883 and was accompanied by director liability for unpaid workers' wages (S.N.S. 1883, c. 24, s. 69). Special incorporation statutes, however, contained a variety of liability provisions. The 1883 act was not repealed, but a footnote to the 1900 Revised Statute Act stated that it was effectively superseded by the chapter “of Joint Stock Companies” published as R.S.N.S. 1900, c. 128. For discussion of nineteenth-century developments, see Patton, “From State Action” and Davidson, “Industry and the Development.”

64. Indeed, in 1847 the government enacted a master and servant statute applicable in Upper Canada to make it clear that workers could be prosecuted and punished for breaching their contracts. S. Prov. Can. 1847, c. 23; Craven, Paul, “The Law of Master and Servant in Mid-Nineteenth Century Ontario,” in Essays in the History of Canadian Law, ed. Flaherty, David H. (Toronto: Osgoode Society, 1981), 1:175–211Google Scholar.

65. Banking corporations were an exception, as well some corporations providing public utilities. For example, see S. Prov. Canada 1850, c. 21 (banking); S. Prov. Can. 1853, c. 173 (gas and water). Also see Labrie, and Palmer, , “Pre-Confederation History,” 53–60Google Scholar.

66. A second issue was the technical preconditions that had to be satisfied before shareholders or directors could be held liable.

67. S.C. 1877, c. 43, s. 69. The Act also reduced director liability from one year to six months' wages. This language was used in the Northwest Territories legislation (N.W.T. 1901, c. 20, s. 54) and kept in the subsequent Alberta legislation.

68. S. Prov. Can. 1847, c. 23, s. 1.

69. S. Prov. Can. 1855, c. 136.

70. Kealey, Gregory S., Toronto Workers Respond to Industrial Capitalism, 1867–1892 (Toronto: University of Toronto Press, 1980), 18–34;Google ScholarPalmer, Brian D., Working-Class Experience (Toronto: McClelland & Stewart, 1992), 81–87,Google Scholar 117–21, 155–63; Heron, Craig, “The Second Industrial Revolution in Canada, 1890–1930,” in Class, Community and the Labour Movement: Wales and Canada 1850–1930, ed. Hopkins, Deian R. and Kealey, Gregory S. (Wales: LLAFUR/CCLH, 1989), 48–66Google Scholar.

71. On England, see Douglas Hay, “England,” and “Master and Servant in England,” in Private Law and Social Inequality in the Industrial Age, ed. Steinmetz, Willibald (Oxford: Oxford University Press, 2000), 227–64.Google Scholar On Canada, see Craven, Paul, “Canada, 1670–1935: Symbolic and Instrumental Enforcement in Loyalist North America,” in Masters, Servants, and Magistrates, 175–218Google Scholar.

72. Deakin, Simon, “Legal Origins of Wage Labour: The Evolution of the Contract of Employment from Industrialization to the Welfare State,” in The Dynamics of Wage Relations in the New Europe, ed. Clarke, Linda, Gijsel, Peter de, and Janssen, Jörn (Boston: Kluwer, 2000), 32–43CrossRefGoogle Scholar; “The Contract of Employment: A Study of Legal Evolution,” Historical Studies in Industrial Relations 11 (Spring 2001): 1–36. Also seeGoogle ScholarDeakin, Simon and Wilkinson, Frank, The Law of the Labour Market (Oxford: Oxford University Press, 2005), ch. 2 andGoogle ScholarSteinfeld, Robert J., Coercion, Contract, and Free Labor in the Nineteenth Century (New York: Cambridge University Press, 2001)CrossRefGoogle Scholar.

73. Labatt, C. B., “What Persons Are Within the Purview of Statutes Affecting the Enforcement of Claims for Services,” Canada Law Journal 44 (1908): 369–427,Google Scholar at 370. Labatt, C. B., Commentaries on the Law of Master and Servant (Rochester, N.Y.: Lawyers Cooperative Publishing, 1904).Google Scholar A greatly expanded second edition was published in 1913.

74. Labatt, , “What Persons,” 370–71.Google Scholar

75. (1857) 24 Barb. 87 at 99.

76. Richardson v. Abendroth (1864) 43Google Scholar Barb. 162 held that an officer could sue, but was overruled by Coffin v. Reynolds (1868) 37Google Scholar NY Rep. 639. Hill v. Spencer (1874) 61Google Scholar NY Rep.274 and Dean v. De Wolf (1878) 16Google Scholar Hun. 186 (excluding agents); Aikin v. Wasson (1862) 24Google Scholar NY Rep. 482 (excluding contractors). The distinction between servants or employees and independent contractors then as now is a difficult one to draw.

77. Ericsson v. Brown (1862) 38 Barb. 390 at 392.Google Scholar

78. Hovey v. Ten Broeck (1865) 3Google Scholar Rob. 316 (overseer and bookkeeper); Williamson v. Wadsworth (1867) 49Google Scholar Barb. 294 (civil engineer); Harris v. Norvell (1876) 1Google Scholar Abb. N.C 127 (reporter, assistant editor).

79. Wakefield v. Fargo et al. (1882) 90Google Scholar NY 213, at 215. The earlier case, Krauser v. Ruckel (1879) 17Google Scholar Hun. 463, disallowed a claim by a superintendent of mine works.

80. Wakefield, ibid., 217–18.

81. Ibid., 219.

82. I have not traced the development of New York case law on shareholder liability beyond Wakefield. However, it is worth noting that Labatt's global assessment of American jurisprudence was that it narrowly construed shareholder liability because it was in derogation of the common law, imposed new liabilities, or was penal in nature. See Labatt, , “What Persons,” 407Google Scholar.

83. On the rate of business failure, see Taylor, and Baskerville, , Concise History, 173.Google Scholar In part the absence of earlier cases may reflect the slow rate at which Canadian entrepreneurs took advantage of the corporate form, although almost 4,000 firms incorporated in Ontario between 1867 and 1906. See Fecteau, , “Les ‘petites républiques,’” 53–54 andGoogle ScholarMichie, , “Canadian Securities,” 42.Google Scholar It is possible that there were previous lower court judgments that went unreported. However, research to date has not identified any discussion of director liability in any published legal source, apart from Stephens, Law and Practice. See below, note 84.

84. Stephens, Charles Henry, The Law and Practice of Joint Stock Companies under the Canadian Acts (Toronto: Carswell, 1881), 367–69.Google Scholar He suggested tongue-in-cheek that it might serve as “a check upon the tendency to make money by the appointment of relations at good fat salaries”(368). The entire passage is reproduced in Masten, C. A., Canadian Company Law (Toronto: Canada Law Book, 1901), 262Google Scholar.

85. Welch v. Ellis (1895), 22Google Scholar O.A.R. 255, at 257.

86. Ibid.

87. Ibid., 262.

88. Lee v. Friedman (1909), 20 O.L.R. 49; cited to [1909] O.J. No. 5 at paras. 42–43.Google Scholar

89. Olson v. Machin (1912), 8Google Scholar D.L.R. 188 (Ont. Div. Ct.) (company deducted wages at source and paid directly to boarding house keeper); Coveney v. Glendenning (1915), 22Google Scholar D.L.R. 461 (Ont. S.C.) (similar arrangement for storekeeper).

90. Ryan v. Wills (1918), 43Google Scholar O.L.R. 624 (S.C. [A.D.]) (actress under contract); Domanski v. Wilson, et al. [1935]Google Scholar O.R. 400 (C.A.).

91. Cases in which Riddell was involved include Olson, Ryan, and Domanski (above), as well as Mullen v. Millar (1924),Google Scholar 55 O.L.R. 563 (S.C. H.C.J.) aff'd at [1925] 2 D.L.R. 321(S.C. [A.D.]) (prospectors retained by company but never instructed to go into field unable to collect from directors on judgment against company for breach of its agreement to pay them for their travel and waiting time). Claimants lost in each of these cases. Riddell had a lengthy judicial career but is perhaps best remembered as a prolific legal historian who wrote across a wide range of topics, mostly in a descriptive manner. For example, see Riddell, William Renwick, “Labor Legislation in Canada,” Minnesota Law Review 5 (1921): 243–52.Google Scholar For a short biographical sketch and a partial list of his writings, see an obituary, Surveyer, E.-Fabre, “The Honourable William Renwick Riddell,” Revue du Barreau 5 (1945): 526–29Google Scholar.

92. (1904), 13 Quebec K.B. 435 at 446.

93. Ibid., 446–47. The plaintiff in this case was found to be a manual worker with some supervisory responsibilities and, therefore, covered by the act.

94. (1917), 52 C.S. 127 at 130.

95. (1924), 63 R.J.O., C.S. 90 at 91, 93.

96. (1918), 53 C.S. 201 at 207.

97. Re Yellowhead Pass Coal & Coke Company, Ltd. (1917), 12Google Scholar Alta. L.R. 144, at 149–50. Also, see Crew v. Dallas (1908), 9Google Scholar W.L.R. 598 (miner paid by results is covered).

98. Crowder v. Coleman et al. [1924] 1Google Scholar D.L.R. 849 (Alta. S.C.) at 854, 861, 863.

99. Stevens v. Spencer et al. [1929] 4Google Scholar D.L.R. 838 (Alta. S.C.) at 855–56; aff'd [1930] 3 D.L.R. 993.

100. Albert Elswood Richards was the grandson of William Buell Richards who as a reform member of the Legislative Assembly of the Province of Canada supported the enactment of the general incorporation statute in 1849 and again in 1850. For a brief biography, see Brawn, Dale, The Court of Queen's Bench of Manitoba, 1870–1950: A Biographical Sketch (Toronto: University of Toronto Press, 2006), 172–75CrossRefGoogle Scholar (I am thankful to Dale Brawn for giving me pre-publication access to this material).

101. Macdonald v. Drake (1906), 16Google Scholar Man. L. Rep. 220 at 224.

102. Schumacher v. Moore [1934] 4Google Scholar D.L.R. 585 (Man. C.A.) (upholding constitutionality of director liability provision in federal incorporation statute). Mitchell, Victor E., A Treatise on the Law Relating to Canadian Commercial Corporations (Montreal: Southam Press, 1916), 1077–78Google Scholar.

103. Wegenast, , Law of Canadian Companies, 385.Google Scholar Wegenast represented the Canadian Manufacturers Association at a royal commission hearings looking into workers' compensation from 1911–13. For a discussion of his role, see Risk, R. C. B., “‘This Nuisance of Litigation’: The Origins of Workers' Compensation in Ontario,” in Essays in the History of Canadian Law, ed. Flaherty, David H. (Toronto: Osgoode Society, 1983), 2:418–91.Google Scholar Carswell, a Canadian legal publisher, reprinted Wegenast's corporate law treatise in 1979.

104. Wegenast, , Law of Canadian Companies, 5.Google Scholar

105. Millon, , “Theories of the Corporation,” 211–16;Google ScholarIreland, , “Capitalism without Capitalists,” 47. The Canadian business press publicized the emerging English view. For example, theGoogle ScholarMonetary and Commercial Times (1871), 4:28,Google Scholar 549, reprinted an excerpt from an English business publication: “The doctrine of limited liability has at length become familiar to Englishmen. It has been adopted as the law of the land, and the tendency of legislation is rather to extend than diminish its operation. It is well understood that when a contract is made with a limited liability company or joint-stock company, the persons who compose the company are not made liable beyond the amount of the unpaid shares they hold.”

106. See, for example, Beaulieu, Marie-Louis, “De la Responsibilité des Directeurs de Compagnies pour le Salaire des Employés,” Revue du Droit 9 (1930–1931): 218–23,Google Scholar 483–91, at 220–21: “Disons donc que le législateur a simplement mis de côté, en faveur de l'ouvrier, le privilege accordé aux directeurs de ne pas etre responsables des dettes de la compagnie. … Et il n'y a là rien d'injuste, non plus.”

107. S.O. 1953, c. 19, s. 73(1); Ontario Business Corporations Act, S.O. 1970, c. 25,Google Scholar s. 139.

108. S.O. 1982, c. 4, s. 131. The master and servant act was renamed the Employer and Employee Act in 1990.Google Scholar R.S.O. 1990, c. E.12.

109. S.C. 1974–75–76, c. 33, s. 114.

110. It is interesting to note that the Baldwin-Lafontaine government first passed the Interpretation Act in 1849,Google Scholar the year following their election. They distrusted the judiciary composed largely of Tory appointees. On the checkered history of s. 10 of the Interpretation Act, see Tucker, Eric, “The Gospel of Statutory Rules Requiring Liberal Interpretation According to St Peter's,” University of Toronto Law Journal 35 (1985): 113–53CrossRefGoogle Scholar.

111. Zavitz v. Brock et al. (1974), 3Google Scholar O.R. (2d) 583 (C.A.).

112. S. Prov. Can. 1850, c. 28, s. 17. The first limitation appeared in S. Prov. Can. 1860, c. 61, s. 53.

113. McGuffin v. Cayley (1846), 2Google Scholar U.C.R. 308 (Q.B.); Raines v. The Credit Harbour Company (1844), 1Google Scholar U.C.Q.B. 174; Broughton v. Corporation of Brantford (1869), 19Google Scholar U.C.C. P. 434; McIntyre v. Hockin (1890), 16Google Scholar O.A.R 498, 501 (C.A.).

114. On the return of mass unemployment in Canada in the 1970s and 1980s, and its implications for state policy, see McBride, Stephen, Not Working (Toronto: University of Toronto Press, 1992).Google Scholar On the rise and decline of the standard employment relation in Canada, see Vosko, Leah, Temporary Work (Toronto: University of Toronto Press, 2000)CrossRefGoogle Scholar.

115. Office of the Superintendent of Canada, Bankruptcy, An Overview of Canadian Insolvency Statistics to 2004 (Industry Canada, 2006), 22,Google Scholar online at http://strategis.ic.gc.ca /epic/internet/inbsf-osb.nsf/vwapj/StatsBooklet2006-EN.pdf/$FILE/StatsBooklet2006-EN. pdf (5 March 2007). (Thanks to my colleague Stephanie Ben-Ishai for referring me to this source.)

116. A government commissioned study conducted in 1981 covering the years 1976–80 estimated that there were roughly 25,000 bankruptcies over this period and that unpaid wage claims were made in 9.3 percent of the cases. The average employee was owed $900. At the time, unpaid employees were given a limited priority over other unsecured creditors, but the increase in security financing reduced the effectiveness of this form of wage protection. See Committee on Wage Protection in matters of Bankruptcy, and Insolvency, , Wage Protection in Matters of Bankruptcy and Insolvency (Ottawa: Minister of Supply and Services, 1981)Google Scholar.

117. England, Geoffrey, Individual Employment Law (Toronto: Irwin, 2000), 244–45Google Scholar (“The general trend since the 1950s has been for courts to lengthen the reasonable notice period, the paramount objective being to help employees withstand the financial blow of unemployment”).

118. S.O. 1970, c. 45, s. 4; S.O. 1974, c. 112, s. 40; S.O. 1981, c. 22.

119. Also, many statutes make directors absolutely liable for unpaid wage claims, while others allow a due diligence defense. See Canada, Industry, Efficiency and Fairness in Business Insolvencies (2001), 6–7Google Scholar available online at http://strategis.ic.gc.ca/epic/internet/incilp-pdci.nsf/en/h_c100197e.html (5 March 2007).

120. For an overview, see England, Individual Employment, ch. 9.

121. (1982), 39 O.R. (2d) 702. The court cited Welch for the history of the section, but not for its approach to statutory interpretation.

122. Mills-Hughes et al. v. Raynor et al. (1988), 63Google Scholar O.R. (2d) 343 (C.A.); Vopni v. Groenwald (1991), 84Google Scholar D.L.R. (4th) 366 (Ont. Gen. Div.). In the former case, the contract stipulated the severance payable under it was not for past services. In the latter, McKeown, J. stated expressly that the statute created a liability that was an exception to the rule that there is no personal liability of directors for corporate debts and so, therefore, the liability should be interpreted strictly (at 369).

123. Audia v. Ng [1993] A.J. No. 251.Google Scholar

124. Meyers v. Walters Cycle Co. (1990) 71Google Scholar D.L.R. (4th) 190 (C.A.).

125. Francis v. Fruck [1992] M.J. No. 520.Google Scholar

126. Schwartz v. Scott [1985] Que. C.A. 713.Google Scholar

127. Turcot c. Conso Graber Inc. [1990] A.Q. No. 1030.Google Scholar

128. (1993), 101 D.L.R. (4th) 66.

129. Ibid., 71.

130. Ibid., 71–75. Indeed, the judgment misses the pre-Confederation roots of the Canadian law.

131. Ibid., 75–77.

132. Ibid., 77–78. She also notes that director liability under this section of the statute is exceptional because there is no due diligence defense and because it imposes a positive obligation.

133. Ibid., 81.

134. Ibid., 83.

135. See Mackelm, Patrick, “Developments in Employment Law: The 1992–93 Term,” Supreme Court Law Review 5, 2nd ser. (1994): 269–335Google Scholar at 285–86 (recognizing this alternative view and suggesting that L'Heureux-Dubé, J.'s choice may be due to her view of employment as status rather than contract based).

136. Bott v. Mel City Electric Ltd (1988), 64Google Scholar Sask. R. 218 (C.A.); Citation Industries Ltd. v. British Columbia (Director of Employment Standards (1988), 52Google Scholar D.L.R. (4th) 347 (B.C.C.A.).

137. Citation Industries, 352. Also, see Re Telegram Publishing Co. Ltd. v. Zwelling (1973), 1Google Scholar O.R. (2d) 592 (ON Div. Ct.), 626, where the court found “with some doubt” that severance pay, like other fringe benefits, should be regarded as wages under the ESA. That part of the decision was not challenged on appeal. See (1976) 11 O.R. (2d) 740 (ON C.A.).

138. (1997), 152 D.L.R. (4th) 1 (S.C.C.).

139. Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 68(1).Google Scholar

140. Wallace, 24–25.

141. Ibid., 38. (“Damages in lieu of reasonable notice constitute ‘salary, wages or other remuneration’ for the purposes of bankruptcy legislation and hence are recoverable.”)

142. [2005] O.J. No. 4895 (Sup. Ct.).

143. Ibid., par. 44. Barrette has also been followed in Brown v. Shearer [1995] M.J. No. 182Google Scholar (C.A.) (denying liability for severance pay due under the contract of employment) and Westar Mining Ltd. (Re) (1996), 136Google Scholar D.L.R. (4th) 564 (B.C.C.A.) (justifying narrow interpretation of director liability provision in employment standards legislation, resulting in denial of liability for vacation pay).

144. For a recent and comprehensive overview of director liability for wages, see Sarra, Janis P. and Davis, Ronald B., Director and Officer Liability in Corporate Insolvency (Markham, ON: Butterworths, 2002), ch. 5Google Scholar.

145. For example, see the recent federal amendments establishing the wage earner protection fund, S.C. 2005, c. 47. The law, however, has not yet been declared in force and it is doubtful that the current minority Conservative government will do so.

146. For a discussion of these developments in Canada, see Davis, Ronald B., “The Bonding Effects of Directors' Statutory Wage Liability: An Interactive Corporate Governance Explanation,” Law & Policy Review 24 (2002): 403–32. Also, seeCrossRefGoogle ScholarIndustry Canada, Efficiency and Fairness and Canada Business Corporations Act Discussion Paper Directors' Liability (1995)Google Scholar available online at http://dsp-psd.pwgsc.gc.ca/Collection/C2-280-7-1995E.pdf (5 March 2007).

147. For example, see Glasbeek, Wealth by Stealth; Bakan, Joel, The Corporation: The Pathological Pursuit of Profit and Power (New York: Free Press, 2004).Google Scholar It is notable that since the 1970s there has been an enormous increase in the number of federal and provincial statutes imposing liability on corporate directors. For example, in Ontario alone by the mid- 1990s there were over 100 federal and provincial statutes imposing liability on directors. See Daniels, Ronald J., “Must Boards Go Overboard? An Economic Analysis of the Effects of Burgeoning Statutory Liability on the Role of Directors in Corporate Governance,” Canadian Business Law Journal 24 (1995): 229–58, 230.Google Scholar Also, on the role of judicial piercing of the corporate veil, see Sarra, Janis, “The Corporate Veil Lifted: Director and Officer Liability to Third Parties,” Canadian Business Law Journal 35 (2001): 55–71 andGoogle ScholarNeyers, Jason W., “Canadian Corporate Law, Veil-Piercing, and the Private Law Model Corporation,” University of Toronto Law Journal 50 (2000), 173–240.CrossRefGoogle Scholar The doctrine has not been used to recover workers' wages.

148. See Davis, “Bonding Effects” (supports); Moffat, Marcia T., “Director's Dilemma—An Economic Evaluation of Directors' Liability for Environmental Damages and Unpaid Wages,” University of Toronto Faculty of Law Review 54 (1996): 293–326Google Scholar (too harsh and leads to over deterrence); Davis, Kenneth B. Jr, “Shareholder Liability for Claims by Employees,” Wisconsin Law Review [1984]: 741–67Google Scholar (favoring repeal of shareholder liability in New York and Wisconsin). On the availability of directors' indemnification and insurance for these liabilities, see Canada Business Corporations Act Discussion Paper Directors' Liability, 26–39, available online at http://dsp-psd.pwgsc.gc.ca/Collection/C2-280-7-1995E. pdf (5 March 2005) and Daniels, , “Must Boards,” 249–53Google Scholar.