The Supreme Court's recent decision in Christine DeJong
Medicine Professional Corporation v. DBDC Spadina Ltd. (DBDC
Spadina) clarified the law regarding whether corporations are
civilly liable for the fraudulent actions of their director or
officer. Ultimately, a corporation will be liable for the fraud of
a director or officer if the actions 1) were designed or completed
to the benefit or partial benefit of the corporation; and 2) the
actions were done in the scope of the director or officer's
authority.
The Facts
In this case, the Christine DeJong Medicine Professional
Corporation ("DeJong PC") and DBDC Spadina Ltd.
("DBDC") had both been defrauded as victims of real
estate fraud at the hands of Norma and Ronauld Walton. The Waltons
convinced the victims to invest with them equally in corporations
for the purpose of buying, renovating, and maintaining commercial
real estate properties in Toronto. The Waltons did not invest funds
of their own, instead moving the
