The Corporate Veil Won't Cover Personal Misrepresentations

Co-authored by Victoria Mitrova, Student-At-Law

Honesty is the Best Policy

In the recent case of Meridian Credit Union Limited v Baig,¹ the Court of Appeal considered the duties owed by various parties to be honest and to not mislead each other during the course of real estate transactions. The Court of Appeal emphasized the obligation purchasers owe to be clear about all of the facts relevant in a transaction. Moreover, the Court of Appeal affirmed that corporate directors can be held liable for fraudulent misrepresentations made during the sale of a property.

Facts

The appellant, Ahmed Baig, agreed to purchase a property from a court-appointed receiver for approximately $6.2 million. Before the transaction closed, Mr. Baig acquired another buyer, Yellowstone Property Consultant Corp. ('Yellowstone") who was willing to purchase the property from him for $9 million. Mr. Baig retained the help of a legal firm and had a lawyer at the firm assist with this second