COMMENTS
COMMENTAIRES
Hawrelak v. City of Edmonton
Confidence in our institutions is at a low ebb. This statement is not very
original but unfortunately is unchallengeable. Many factors have brought
about this crisis and unconscionable conduct by public officials is only
part of the story. Still, if we are to regain some of the lost ground,
we have to start somewhere. To reaffirm the requirements of highest
public morality in elected officials is a major step in that direction. To
speak of civil liberties is very hollow indeed if these liberties, are not
founded on the rock of absolutely unimpeachable conduct on the part of
those who have been entrusted with the administration of the public
domain.1
The sober words of Mr Justice de Grandpr6 are -an indication that
there were issues at stake in this recent case other than whether the
disqualified Mayor of the City of Edmonton should be required to
disgorge profits he might have made while he was the Chief Magis-
trate.
The Facts
Prior to his election as Mayor of the City of Edmonton in. October
of 1963, Hawrelak owned 50% of the voting shares in Sun Alta
Limited, a company whose main asset was certain lands in the Rundle
Heights -area of the City of Edmonton. The City of Edmonton had
from 1961 been moving ahead with negotiations to re-zone the area
which would greatly enhance the value of the land. Four or five
months prior to his election, Hawrelak spoke to a city commissioner
and indicated that his company was eager for the re-zoning to
proceed. He had visited the land owned by his company and had
discussed other details of it with the city commissioner.
Another company interested in land in the City of Edmonton
about the same time was the Chrysler Corporation
(Canada)
Limited, which wanted land on 142nd Street in the City of Edmon-
ton but a purchase of that land, because of zoning and building
regulations, would not allow Chrysler to put it to its required use.
A scheme was devised by Chrysler whereby it would purchase
1 [1975] 4 W.W.R. 561, 584 (S.C.C.).
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lands in the Rundle Heights area and then exchange them for the
land it actually required on 142nd Street and thereby circumvent
the regulations.
After taking office early in the fall of 1963, Hawrelak signed a
report of the city commissioners recommending to City Council that
the exchange with Chrysler take place. He acknowledged at trial that
this exchange would have hastened the re-zoning scheme. Appar-
ently he was not at the Council meeting when the report was con-
sidered and affirmed.
The proposal met with strong opposition from taxpayers
in
the area of 142nd Street. A solicitor and a representative for
Chrysler met with Mayor Hawrelak, who was, according to the
evidence, in favour of the scheme. The Mayor felt that a better
promotion of the scheme, including pictures etc., would improve
Chrysler’s chances of success. Hawrelak then agreed to have the
matter again put on the agenda of City Council and gave specific
advice as to the presentation of Chrysler’s proposal. In spite of
the assistance given by the Mayor the proposal was not acceptable
to City Council.
Meanwhile, negotiations had been taking place between the
City of Edmonton Land Department and Sun Alta. The City needed
certain lands in Rundle Heights for public use, this being one of
the steps in the re-zoning scheme. According to the evidence, ne-
gotiations on this transaction took place in July,- 1963, prior to
Mayor Hawrelak’s election but the contract for the transfer of
land to the City was not signed until March of 1964, some five
months after Hawrelak took office. Mayor Hawrelak, as an officer
of Sun Alta, signed the contract. He testified that this was done to
make his position clear and that he left the document with his
solicitor who, contrary to his directions, forwarded it to the City.
When the document came to him again in his capacity as Mayor he
testified that he was on his way out of town and left instructions
that it was not to be signed for the City in his absence. Upon his
return he discovered that the Deputy Mayor had executed it. Haw-
relak took no steps to rectify the situation.
The facts relating to whether or not Hawrelak made a full and
frank disclosure to City Council are, of course, extremely important.
The evidence indicated that when he took office Hawrelak read and
sent a letter to Council members in which he listed the companies
in which he had some interest. Included in that list was Sun Alta
Limited. Although the letter went on to give a detailed description
of certain land holdings in one of the other companies listed, no
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COMMENTS – COMMENTAIRES
specifics of the Sun Alta holdings in Rundle Heights were given in
this letter. The evidence indicated that at least three aldermen on
City Council did not know of the letter.
One alderman had tried on numerous occasions to have the
whole Rundle Heights re-zoning scheme put before City Council for
full discussion, but had met with no success. At a City Council
meeting on June 29, 1964, he asked Mayor Hawrelak whether he
had an interest in property in that area. Hawrelak replied that he
was a director of Sun Alta. This was the first Council meeting at
which Hawrelak was recorded as not having voted.
At a committee meeting in August of 1964 which Hawrelak
attended, the purchase of the Chrysler lands was approved. At a
Council Meeting in November of 1964,, at which Hawrelak presided,
the re-zoning scheme for Rundle Heights was passed. In 1965,
Hawrelak sold his shares in Sun Alta for $80,000 more than he paid
for them.
The City alleged that the profit was directly attribuable to its
acquiring the Chrysler lands and proceeding with the re-zoning
scheme and that Hawrelak had recommended both the acquisition
of the lands and the re-zoning scheme. In doing so, the City felt
he had a personal interest -which was in conflict with his duty to
give the City the benefit of an unbiased opinion. The claim was
for the profit that Hawrelak had made and the loss thereby suffered
by the City of Edmonton.
The Judgments
The Supreme Court of Canada, in a 3 to 2 decision reversed the
Appellate Division of the Supreme Court of Alberta and the Trial
Division of the Supreme Court of Alberta and found that Hawrelak
had made no profits by reason of being mayor.
The majority judgment in the Supreme Court of Canada was
written by Mr Justice Spence and concurred in by Mr Justice
Judson. The Chief Justice agreed with much of what Spence J.
said and came to the same conclusion in a separate judgment. The
dissenting justices were de Grandpr6 J. (who wrote a judgment)
with whom Dickson J. concurred. The Trial Judge, Kirby J wrote
an extremely thorough judgment and his findings of fact and law
were concurred in by the Appellate Division of the Supreme
Court of Alberta?
2 [1972] 2 W.W.R. 561 (S.C. Alta).
3 [1973] 1 W.W.R. 179 (A.D. Alta).
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The different conclusions of the courts may be the result, in
part, of their divergent views of the facts. The majority of the
Supreme Court of Canada felt that all but the formalization of
the contract had been concluded by Sun Alta before. Hawrelak
became Mayor, whereas the Trial Judge and the Appellate Division
concluded that the failure by Sun Alta to execute the contract would
have stopped the re-zoning scheme.
The courts came to different conclusions as to whether Haw-
relak knew that the Sun Alta lands were contiguous with the
Chrysler lands. Spence J. found that it was unimportant whether
Hawrelak knew or not. The Appellate Division found that there was
ample evidence that Hawrelak knew of the proximity and of the
desirable effect on the value of Sun Alta lands which would result
from the Chrysler exchange taking place. Kirby J. of the Trial
Division recognized that the proposal for the exchange had begun
before Hawrelak took office but that nevertheless the exchange
could not be completed without the zoning and building regulations
being changed. The Commissioner’s report which Hawrelak signed
urged that such exchange take place.
With respect to this exchange, therefore, Mayor Hawrelak, because of his
private interest, was in a position in which he was unable to give the city
the benefit of his unbiased judgment as to whether the development
permit should be granted and the rezoning by-law enacted. Indeed, in
making suggestions to Cranshaw and Chrysler’s solicitor on December
30th 1963, as to how they could improve on the presentation to Council
in support of the application for the development permit, he exercised
the authority of his position as Mayor to influence the outcome of this
application. 4
The majority of the Supreme Court of Canada, however, felt that
the disclosure was adequate and Chief Justice Laskin stated that
the City had proceeded with full knowledge of the facts.
The Alberta Courts and the dissenting justices in the Supreme
Court of Canada took quite a different view of the evidence re-
garding disclosure. De Grandpr6 J. examined the letter which the
Mayor read and sent to Council members immediately after his
election. He noted that Sun Alta was listed as one of the companies
which might be doing business with the City in which Hawrelak
had an interest but nothing further was said about Sun Alta. It
would have been very easy for Hawrelak to make the same type
of disclosure in connection with this company as he had in connec-
tion with another company. The Trial Judge, with whom de Grand-
4 Supra, note 2, 594.
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COMMENTS – COMMENTAIRES
pr6 J., agreed, had noted that the present Mayor and two other
aldermen had not been aware of Hawrelak’s interest until the
June 29, 1964 meeting at which, in answer to a question by Alder-
man Leger, Hawrelak stated that he had an interest in Sun Alta
lands.
It is clear that there was a wide difference of opinion among
the courts on the effect and influence that a Mayor might have in
such a situation. Whereas Chief Justice Laskin felt that Hawrelak
was only “one voice in a chorus of elected representatives”,5 the
Appellate Division felt very differently.
It appears to us to be clearly obvious that the influence of the Mayor
on the votes of the Council could have and probably did have a decisive
influence upon the direction and place of extension of the city.6
The Chief Justice of the Appellate Division went on to cite the case
of Toronto v. Bowes:
‘Influence is a subtle agent. The mere will of the possessor [the Mayor of
Toronto] often brings it into active operation7
Overriding these issues was the difference of opinion between
the majority of the Supreme Court of Canada and the dissenting
justices concerning the history of the re-zoning scheme of the City
of Edmonton. The majority of the Supreme Court of Canada felt
that the re-zoning scheme was a firm policy of the City of Edmon-
ton dating back to at least 1961 and was for the benefit of the
City of Edmonton. Chief Justice Laskin noted that counsel for the
City conceded that the City would have in all probability gone
ahead with the re-zoning scheme in any event. Mr Justice Kirby
of the Trial Division found, on the other hand, that the re-zoning
scheme would not have proceeded had the Sun Alta and the City of
Edmonton contract not been executed.
These different interpretations of the facts can be reconciled,
albeit in a rather facile and unsatisfactory manner. The majority
of the Supreme Court of Canada found that there was no profit,
i.e. no sum of money calculable as that sum which should be dis-
gorged by Hawrelak. The Trial and Appellate Division of the Su-
preme Court of Alberta as well as the dissenting justice in the Su-
preme Court of Canada found that there was both a technique for
calculating the profit and an actual profit.
S Supra, note 1, 579.
08Supra, note 3, 184.
” (1854) 4 Gr. 489 per Blake C.; aff’d 6 Gr.1; aff’d (1858)
14 E.R. 770.
11 Moo P.C. 463,
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The Law
But what of the law? Did the courts agree on that? Do the judg-
ments reflect different approaches? The use of different rules?
The first issue for the Trial Judge to determine was the position
in law of the Mayor of a munioipality.
After a thorough examination of the case law and a probing
analysis of the facts the Trial Judge decided that “[a] member of a
Municipal Council is an agent or trustee accountable -to the mu-
nicipality whose affairs he administers, and accordingly his duties
are of a fiduciary nature”.8
In coming to his decision he looked at the case of The City of
Toronto v. Bowes, in which the Chancellor of Ontario said:
The Common Council is in fact entrusted with the management of the
affairs of the City of Toronto, and I am at a loss to discover why the
rule applicable to every other case of trust should not be applied to
this. If the rule be one of pressing necessity in cases of ordinary trust,
why is it to be abrogated where the trusts are of such a vast magnitude
and importance? Why is the principle to be held inapplicable when the
probabilities of an abuse of trust are so greatly multiplied? Such a
determination in a country, the local concerns of which are managed
to so large an extent by corporations of this sort, possessed of such
extensive powers, would be productive, in my opinion, of the worst
consequences to the moral and material interests of the community.0
Both the Appellate Division and the Supreme Court of Canada ac-
cepted Mr Justice Kirby’s statement of the law; Mayor Hawrelak
was bound by fiduciary duties.
In commenting on the Toronto v. Bowes case de Grandprd J. said:
For nearly 125 years, the law has stood thus and I see no reason to
dilute it as we enter the last quarter of the 20th century. Indeed, there
is every reason to reaffirm it in all respects and even to give it further
strength. At the time, the population was very small compared to that
of Respondent (City of Edmonton) and the complexities of modem
urban administration were obviously unknown. Accordingly, the pos-
sibility of misdemeanours by public officials remaining undetected was
considerably less than it is today. It follows that the vigilance of the courts
must be more active and more exacting than ever.’0
But the finding that Mayor Hawrelak was in a fiduciary relation-
ship with other members of Council and the oitizens of the City
of Edmonton was not difficult. The difficulty arose over the test
to be used to measure the scope of Hawrelak’s duty and conse-
quently determine his liability.
sSupra, note 2, 592.
O Supra, note 7, 507.
‘oSupra, note 1, 584.
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COMMENTS – COMMENTAIRES
The Rules
Professor McClean has carefully analyzed the relevant Canadian
and English cases in the area of fiduciary relationships and con-
cludes that:
In both England and Canada, perhaps more by default rather than by
conscious decision, two separate rules respecting a trustee’s duty of
loyalty have developed, the first that he may not retain a profit made
out of his position and the second that he may not retain a profit made
in circumstances where there is a conflict of his interest and his duty.
Often the application of these rules will yield the same results. On the
other hand in such cases as In re Gee”
in England and Crocker and
Croquip Ltd v. Tornroos12 in Canada the application of one will impose
liability, while the other would not. It is important therefore for the
courts to clearly distinguish them.13
He distinguished their application in Canada:
The courts talk of both the conflict and profit principles but in general
do not indicate what the relation between them is. There does, how-
ever, seem to be a less stringent application of the principles to the
facts of the particular case than is usual in England.14
There are four decisions of the Supreme Court of Canada which
illustrate the present state of Canadian law. Two of the cases
involve the application of the conflict rule (Zwicker v. Stanbury’5
and Crocker and Croquip Ltd v. Tornroos”‘) and two of the profit
rule (Midcon Oil and Gas Ltd v. New British Dominion Oil Co. Ltd1 7
and Peso Silver Mines Ltd v. Cropper’S). The latter followed the
English case of Regal (Hastings) Ltd v. Gulliver,’9 which was decided
on the profit rule.
These cases were considered by the Supreme Court of Canada
and the judgments in the Hawrelak case provide an excellent op-
portunity to examine the consequences of the application of both
of these rules.
11 [1948] Ch.284.
12 [1957] S.C.R. 151.
Is McLean, The Theoretical Basis of the Trustees Duty of Loyalty (1968-69)
7 A.L.R. 218, 236.
14Supra, note 13, 229.
15 [1953] 2 S.C.R. 438.
1O Supra, note 12.
17 [1958] S.C.R. 314.
18 [1966] S.C.R. 673.
19 [19423 1 All E.R. 378 (H.L.).
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The Conflict Rule
Mr Justice Kirby in applying the conflict rule, like the English
courts, insisted on a strict application of the rule. He quoted
Parker v. McKenna” for the enunciation of it:
Now the rule of this court as I understand it as to agents is not a
technical or arbitrary rule. It is a rule founded upon the highest and
truest principles of morality. No man can, in this court, acting as an
agent, be allowed to put himself into a position in which his interests
and duty will be in conflict.2 ‘
It is immaterial whether the principal did or did not suffer injury;
this contention is supported by a comment by Chief Justice Cardozo
in the case of Meinhard v. Salmon:
Many forms of conduct permissible in a work-a-day world for those
acting at arm’s length, are forbidden to those bound by fiduciary ties.
A trustee is held to something stricter than the morals of the market-
place. Not honesty alone, but the punctilio of an honour the most
sensitive, is then the standard of behaviour. As to this there has deve-
loped a tradition that is unbending and inveterate. Uncompromising rigid-
ity has been the attitude of courts of equity when petitioned to undermine
the rule of undivided loyalty by the “disintegrating erosion” of particular
exceptions… Only thus has the level of conduct for fiduciaries been kept
at a level higher than that trodden by the crowd. It will not cons-
ciously be lowered by any judgment of this Court.23
Kirby J. went on to observe that following Regal (Hastings),24 bad
faith is not necessarily an essential element in the application of
the rule.
The learned Trial Judge had decided that Hawrelak’s duties
were of a fiduciary nature and as such he could not enter into any
transaction in which his personal interest was or might be in con-
flict with the interests of his principal. He concluded:
Mayor Hawrelak had put himself in a position where he was unable to
give the City the benefit of an unbiased judgment in this matter, and he
actively participated by signing the replot agreement on behalf of Sun-
Alta and negatively participated by his acquiescence in the signing of
the agreement by Alderman Mitchell as Acting Mayor, which he claimed
occurred contrary to his instructions.
In both instances there was therefore a breach of the rule governing
the conduct of a person in a fiduciary position. Whatever profit was
realized by Hawrelak from these transactions accordingly accrues to
the City.25
20 (1874-75) L.R. 10 ChApp.96.
21 Supra, note 2, 587.
22164 N.E. 545 (1928)
23Ibid., 546.
24 Supra, note 19.
25 Supra, note 2, 594.
(N.Y.).
19771
COMMENTS – COMMENTAIRES
The Appellate Division agreed with the Trial Judge in applying
the conflict rule. Chief Justice Smith followed the Alberta Court
of Appeal in R. ex rel. Anderson v. Hawrelak:
Many people engage in the activity of acquiring ownership of land in
the pass of urban development with a view to selling the land profitably
when the city extends to the location of the land. There cannot ordinarily
be any valid criticism of this practice. But any person who engaged in
that type of activity must be made to realize that if, while conducting
such activities, he becomes elected to the office of alderman or mayor
of the city within which the land lies, or if he commences to engage in
such activities after he has been elected to such an office, he places
himself in the position in which his duty and interest may conflict 26
Not surprisingly, the dissenting justices of the Supreme Court
of Canada agreed with the conflict approach. De Grandpr6 J. quoted
a portion of the Hawrelak factum in which it was submitted that
Hawrelak had no private or conflicting interest in ‘the exchange of
lands between the City and Chrysler Corporation nor in the acquisi-
tion by the City of land owned by Sun Alta Builders and then noted
that this submission was abandoned by Hawrelak’s counsel in open
court. He went on to state that: “In my view, the other points
raised by the appellant [Hawrelak] must all be examined in the
light of the findings below that at all material times appellant
[Hawrelak] had a conflict of interest”. 7
Regal (Hastings) ‘Ltd v. Gulliver,2 8 the Midcon Oil v. New British
Dominion Oil Co.9 case and the case of Peso Silver Mines Ltd v.
26 (1966) 53 D.L.R. (2d) 353, aff’d without reasons 53 D.L.R. (2d) 673
(S.C.C.). Hawrelak was disqualified under s.97(f) of the City Act, R.S.A.
1955, c.42 which read:
“The following persons are not eligible to be elected mayor or a member
of the council or entitled to sit or vote thereon, …
(f) a person who is for the time being a party to any subsisting contract
with the city under which any money of the city is payable or may
become payable for any service, work, matter, or thing, or who
has any pecuniary interest in any such contract whether the interest
is direct or indirect.”
S.98 made s.97(f) inapplicable to a person by reason only of the fact,
“(a) of his being a shareholder in any incorporated company having a
contract or dealings with the council,
(i) Unless he holds or there is held by himself and his spouse,
parents, children, brothers and sisters more than twenty-five
per cent of the issued capital stock of the corporation…”.
See also Lucas, Municipal Councillors – Disqualification for Interest-Applic-
ation of the rule in Keech v. Sanford – R. ex rel. Anderson; Starr v. City of
Calgary (1966-67) 5 A.L.R. 330.
27 Supra, note 1, 583.
28 Supra, note 19.
29 Supra, note 17.
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Cropper,0 in de Grandprd’s opinion, had no application to the case
at bar.
The Profit Rule
Mr Justice Spence for the majority of the Supreme Court of
Canada said that the City of Edmonton had failed to make out a
case to fall within the Regal (Hastings) Ltd line of authorities. He
must, therefore, have applied the profit rule. To be caught by this
application of the profit rule the City would have had to have
proven that Hawrelak made profits “by reason and only by reason
of the fact” that he was Mayor.” After looking at the Regal
(Hastings) case,32 the Midcon Oil and Gas case 3 and the Peso
Silver Mines case,34 Mr Justice Spence held that Hawrelak escaped
the application of the profit rule:
Applying, then, such law, I am of the opinion that it has never been
shown that the mayor made any profits “by reason and only by reason
of the fact that he was such mayor…,,.35
He went on to say that:
This view really disposes of the case, but I am of the opinion that even
if I were in error and it could be said that the appellant, by some use
of his position, did put himself in a position where he could profit, then
all the appellant can be compelled to do is to disgorge that profit and
the problem becomes what profit did the appellant make as a result
of his position or his use of that position30
Mr Justice Spence then found that there was no evidence put
forward by the City of Edmonton as to the value of Sun Alta shares
on the date Hawrelak became mayor compared to the date the re-
zoning scheme was carried out. He accepted the evidence of a
witness who had made an offer to purchase the Sun Alta lands and
who would have put a high valuation on the land even prior to
Hawrelak becoming mayor. It is important to note that this witness
was not believed by the Trial Judge, nor by the Appellate Division.
Chief Justice Laskin’s judgment is difficult to understand.37 He
agreed that a mayor would be in a fiduciary position and would
30 Supra, note 18.
31 Supra, note 1, 572.
32 Supra, note 19.
33 Supra, note 17.
34 Supra, note 18.
35 Supra, note 1, 572.
36 Ibid., 573.
37 This is especially true in view of his judgment in Canadian Aero Service
Ltd v. O’Malley et al. (1974) 40 D.L.R. (3d) 371, where he held corporate
directors and senior officials to a high standard in carrying out their
19771
COMMENTS – COMMENTAIRES
thus have to account for any profit but he was unable to find a
profit where the mayor was only one of a number of people who
realized a gain. There would seem to be no procedure in law where-
by the Chief Magistrate can be required to pay back his gains.
Yet later in his judgment he states:
There may be ways in which a municipality may capture all or part of
the increase in the value of private holdings brought about by its
exercise of its public functions, as, for example “by expropriation or by
some form of special assessment, but not, in my view” by direct action
for recovery (unless, of course, authorized by legislation).38
Chief Justice Laskin does not directly refer to either of the two
rules but the nature of his judgment is such that one could only
assume that he could apply the profit approach. He does twice
mention Hawrelak’s ouster from office and refers to the risk of
disqualification of any council member who votes in certain cir-
cumstances. Perhaps he thought that Hawrelak had already paid
the price of his conduct.
Comment
Until the Supreme Court of Canada decision there seemed to be
considerable support for strengthening the fiduciary duties of an
elected representative even to the point of putting him in a position
analogous to that of a trustee. 9 Certainly the Supreme Courts of
Alberta followed Equity’s direction to protect those who had en-
trusted another with an important position. Equity requires a high
standard of loyalty in order to safeguard from temptation anyone
in the position of trust.40
If a judge is unwilling to find liability he may weaken the fidu-
ciary duties; there is much at hand to assist him. The cases show
a conflict in approaches and standards. Certain types of fiduciaries
have profited from a practical approach which says that commer-
cial realities must be considered.41 Inded, there is a feeling that
fiduciary duties and said that neither the conflict test nor the test of ac-
touchstones of
countability for profits “should be considered exclusive
liability. In this, as in all other branches of the law, new fact situations
may require a reformulatioin of existing principle to maintain its vigour in
the new setting” (at p.383). See also Waters, Law of Trusts in Canada (1974),
651.3 8 Supra, note 1, 579.
39 See Waters, supra, note 37, 642.
40 See Jones, Unjust Enrichment and the Fiduciary’s Duty of Loyalty (1968)
84 L.Q.R. 472, 474, 487.
41 Supra, note 39, 491, 493.
McGILL LAW JOURNAL
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precedent is not relevant and that Equity requires a feeling for the
individual case.” When one adds to this the fact that few judges
have made clear the public policy reasons behind their decisions,
the potential to lower the standard is clear.43
Hawrelak was Chief Magistrate and as such was in an obvious
position of trust. He did not make his interest in Sun Alta clear.
He actively assisted Chrysler in their attempts to circumvent or
change City regulations. He took no steps to bring the contract
between his company and the City out into the open preferring to
lay the blame on his solicitor and the Deputy Mayor. He voted until
his conflict of interest was exposed by a question in City Council.
But for this Mayor, it is not certain that the City would have pro-
ceeded in the manner or with the haste it did to re-zone the Rundle
Heights area. Hawrelak’s profit was $80,000. A taxpayer had him
ousted from office. 4 If Hawrelak was not dishonest he was, at least,
acting with manifest disregard for the City’s interests.’
Conclusion
The majority of the Supreme Court of Canada in the Hawrelak
case46 followed the “profit rule” in order to determine whether a
breach of a fiduciary duty existed. Unfortunately, they concluded
that no profit had been proven. The Trial Judge, the Appellate Di-
vision and the dissenting Justices of the Supreme Court of Canada
followed the “conflict rule” by which, given the evidence, a techni-
que existed to ascertain the profit Hawlerak had gained. This is
a case where the application of the conflict rule imposes liability
where the application of the profit rule does not. None of the
judgments, however, recognizes the possibility of two approaches,
a conscious choice of one of which would lead to very different
consequences than the other. The Supreme Court of Canada has
not only been unclear as to which rule should be applied, but has
not insisted on a strict application should either be the proper rule.
The result has been that elected representatives may continue to
ignore their proper duties.
42 Phipps v. Boardman [1967] 2 A.C. 46 (H.L.).
43See Sugarman, Seeing Through the Double-Dutch of Corporate Oppor-
tunity? (1974) 52 Can.Bar Rev. 280.
44Supra, note 26.
4’See supra, note 39, 475, where the test for whether a fiduciary has
manifestly disregarded his principal’s interest is said to be an objective one
46Supra, note 1.
47 See supra, note 13.
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COMMENTS – COMMENTAIRES
The Canadian Courts have unfortunately allowed the duties of fiduciaries
to fall below this high level; it is to be hoped that the trend will be
reversed.4s
The Supreme Court of Canada has missed the opportunity seized
by the Alberta courts to increase the intensity of the fiduciary duty
of elected representatives to a degree worthy of their power and
responsibility.
E.I. Jacobs*
48 Ibid., 238.
* Of the Faculty of Law, University of Alberta, Edmonton.
