Legal Blog

Wilfully Blind

Chen v. Huang 2024 Ont SCJ affirmed 2025 Ont CA

Majority shareholders claimed that corporation’s sole director and officer, but minority shareholder, fraudulently placed two arm’s length mortgages for $7.7 million and that the mortgagees were wilfully blind to the misconduct and lack of authority. The motion judge held that credit risk was not a badge of fraud for mortgagees who loaned money based on equity. Because the director had ostensible and actual authority, the mortgages were valid and enforceable. The Court of Appeal agreed.

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