Justice for All

There are circumstances in which the oppression remedy might be applied to find a director personally liable for the actions of a corporate defendant. When the power of the director is exercised in a fashion which causes an act or omission of the corporation which effects an unfairly prejudicial result, or a result which unfairly disregards the interests of the complainant - or which causes the business or affairs of the corporation to be conducted in a manner which has the same effect - those powers themselves have been “exercised in a manner” which is caught by the proscription of law.

The decided cases in which employees and officers of companies have been found personally liable for actions ostensibly carried out under a corporate name are fact specific. In the absence of findings of fraud, deceit, dishonesty or want of authority on the part of employees or officers, they are also rare. Those cases in which the corporate veil has been pierced usually involve transactions where the use of the corporate structure was a sham from the outset or was an afterthought to a deal which had gone sour…. In every case, however, the facts giving rise to personal liability were specifically pleaded. Absent allegations which fit within the categories described above, officers or employees of limited companies are protected from personal liability unless it can be shown that their actions are themselves tortious or exhibit a separate identity or interest from that of the company so as to make the act or conduct complained of their own.

Considering that a corporation is an inanimate piece of legal machinery incapable of thought or action, the court can only determine its legal liability by assessing the conduct of those who cause the company to act in the way that it did. This does not mean, however, that if the actions of the directing minds are found wanting, that personal liability will flow through the corporation to those who caused it to act as it did. To hold the directors personally liable, there must be some activity on their part that takes them out of the role of directing minds of the corporation.