Canadian Appeals Monitor Information and Commentary on Upcoming and Recent Appeal Court Decisions

Tag Archives: corporate veil

This Week at the SCC (27/06/14)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in This Week at the SCC

This has been a particularly busy week at the Supreme Court of Canada vis-à-vis cases likely to be of interest to Canadian businesses and professionals.  The Court issued two significant rulings, and refused leave to appeal in another seven cases.… Continue Reading

Piercing the corporate veil may be easier than you think

Posted in Case Comments, Contracts, Corporate Law

How do corporate and personal liability intersect in a corporation that has only one officer, director and shareholder?  In the recent Shoppers Drug Mart v. 6470360 Canada Inc. case, the Court of Appeal helped to clarify when the person behind the corporation will be found liable.

Background

In October 2005, Shoppers Drug Mart (“Shoppers”) contracted with Energyshop Consulting Inc. (“Energyshop”) to manage and pay its utility bills on a nationwide basis.  Michael Wayne Beamish (“Beamish”) negotiated the contract on behalf of Energyshop, which had not yet been incorporated.  Beamish later incorporated 6470360 Canada Inc. … Continue Reading

A Doctrine of Mitigation in the Supreme Court of Canada: A Triumph of Theory Over Commercial Reality

Posted in Case Comments, Contracts

A troubling decision

It is troubling when contract law fails to accord with commercial reality. It is troubling when a commercial case ignores the underlying economic context. In Southcott Estates Inc. v. Toronto Catholic District School Board, the Supreme Court of Canada applied theoretically pure models of contract and corporate law to conclude that the victim of a breach of contract had failed to mitigate its damages. The victim of the breach was therefore denied its damages, which had been assessed at trial at $1.9 million. But in applying pure theory, Southcott ignored commercial reality and the underlying economic … Continue Reading