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Legal aspects of public or crown corporations in Canada Kimuli, Moses Aldrin

Abstract

In 1841 Lord Sydenham, as Governor of the United Provinces, established a Board of Works as a separate legal entity to construct a canal system. This was the first public or crown corporation. Since then, there has been a significant increase in the use of the corporate form of enterprise organization and management by the government. However, this marked governmental dependency on the corporate legal form has not been matched by any appreciable inquiry into the legal problems and issues posed and raised by the chosen legal form. This essay attempts to analyse some of those problems and issues. Part One deals with the definition and classification of public corporations as well as the juridical forms that these corporations take. Interest groups, namely, taxpayers, creditors and suppliers of crown corporations, and victims of crown corporation delinquency are also introduced. The substantive legal liability of crown corporations forms the subject of Part Two. Here the contractual and tortious liability of crown corporations as well as their liability for wrongs committed outside their national jurisdiction are considered. The procedural aspects of crown corporation law are treated in Part Three. A basic problem that runs through Parts Two and Three is the dual nature of crown corporations. In substance, crown corporations are public authorities; they are part of the state machinery. In form, crown corporations are approximated to and resemble, private corporations. They enter into contracts and other legal relationships, commit torts and other legal wrongs, just like private corporations do. Since the crown, as the personification of the state, traditionally enjoys a number of substantive and procedural immunities and privileges, it becomes necessary to determine the extent to which crown corporations partake of those immunities and privileges. At the same time there are sound reasons for arguing that crown corporations should be placed in the same position as private corporations, that is, they should not be permitted to shelter behind crown immunities and privileges. The legal duties of those entrusted with the management and administration of crown corporations and the issue of creditor protection are examined in Part Four. The discussion is conducted in the light of the interests of those groups referred to above. Proposals and suggestions are made in the course of the essay. A summary and conclusions appear in Part Five.

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