The Law of Partnerships and Corporations.

• Author: Smith, Derek
• Position: Book review

J. Anthony VanDuzer, The Law of Partnerships and Corporations, 2d ed. (Toronto: Irwin Law, 2003). Pp. xvii, 512.

It is high praise when a book aimed at law students is endorsed by judges. Such praise accompanied the first edition of this book, (1) and it will accompany the second. The content has been updated to include new cases and recent federal amendments, but the book's accessible structure has stayed the same. Chapters on partnerships, incorporation, shares, corporate governance, shareholder remedies, corporate changes, and public companies continue to offer both the essentials of the law and the reasons behind it.

A recurring theme throughout the book is the responsibility and accountability of corporate officials. For example, how must directors of a company act in response to a take-over bid? VanDuzer has updated his analysis to reflect key Ontario decisions, which indicate that if the directors of the target have followed a process that is within a range of reasonableness, Ontario courts will defer to the business judgment of the directors without additional scrutiny, so as not to dilute the business judgment rule into a weak potion. (2)

The accountability of corporate managers, especially lower-level managers, for harm done in a community in which the corporation operates, is another example of this recurring theme. Given the suspended prosecution of the two managers of the Westray mine on charges of criminal negligence, it is unfortunate that VanDuzer only discusses the tort liability of managers. A discussion of criminal liability would have fit well with the related question of when a court should "pierce the corporate veil" and bold managers personally liable for their actions. Parliament's response to Westray was that corporate managers should be more accountable. For criminal negligence purposes in particular, the Criminal Code will now expressly state that everyone who has the authority to direct how another person does work or performs a task is under a duty to take reasonable steps to prevent bodily harm to that person or anyone else. (3)

Another issue that VanDuzer does not discuss is who should hold corporate officials accountable. The Ontario Securities Commission is increasingly being asked to enforce corporate law duties in the context of public companies. (4) Crown prosecutors acting on behalf of the community are another option. The risk here is that the prosecution may be too vigorous in the wake of public...