Legal Blog

Oppression

FNF Enterprises Inc. v. Wag and Train Inc. 2023 Ont CA

Landlord pleaded that the sole officer, director, and shareholder should be liable for rent when the corporate tenant left premises early. The statement of claim alleged that the director had stripped value from the corporation by setting up shop elsewhere. Landlord claimed inducing breach of contract, piercing the corporate veil, and oppression. The motion judge struck the claim under Rule 21.01(1)(b) as showing no reasonable cause of action. The Court of Appeal reversed as to the oppression remedy. An officer or director is not liable for inducing breach of contract of his or her corporation. There was no piercing of corporate veil because this needs fraudulent or improper conduct and the mere fact that a director or officer decides a corporation should breach its contract is not sufficient. The court held that a creditor is protected by the oppression provisions; there was nothing the landlord could have done to protect itself from the director’s alleged actions.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.