21
[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN CANADA]
after both the Crown in Right of Canada and the Crown in Right of Any Province, as well as after environmental remediation obligations. Any supposed lien created as a result of municipal taxes does not change the ordering of priorities. Further developments in the law have demonstrated both an expansion and narrowing of the availability of super-priority claims. Corporate Attribution Doctrine When proving misconduct, intention may be a necessary element to prove. However, Corporations lack the requisite mental element. The corporate attribution doctrine addresses this deficiency by attributing the intention of the corporation's "directing mind" to the corporation itself. In Ernst & Young Inc. v. Aquino , the Ontario Court of Appeal applied the corporate attribution doctrine in the bankruptcy context and provided important guidance on this doctrine. The corporate attribution doctrine should not be applied strictly, otherwise it would be incompatible with the remedial nature of the BIA . The flexibility associated with its application requires sensitivity to the area of law under which this issue arises, consideration of public policy concerns like corporate responsibility and the public interest, and a wide discretion for a court to choose whether to apply the test or not. Following Ernst & Young Inc. v. Aquino , the Ontario Court of Appeal decided not to apply the corporate attribution doctrine in Golden Oaks Enterprises v. Scott (Golden Oaks) . When determining whether to apply the corporate attribution doctrine or not, the Ontario Court of Appeal commented that courts should not only consider the public interest, but also whether application of this doctrine would uphold the principle of equitable distribution amongst victims of fraud.
At the time of this update, there are active appeals in this area. The Supreme Court of Canada recently heard the appeals of Ernst & Young Inc. v. Aquino and Golden Oaks Enterprises v. Scott (Golden Oaks). Further clarity on the law in this area may be expected in the near future.
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
Made with FlippingBook Online newsletter maker