A New And Restrictive Approach To Piercing The Corporate Veil

In Yaiguaje v. Chevron Canada Corporation, 2018 ONCA 472, the Ontario Court of Appeal significantly restricted the court's ability to "pierce the corporate veil".

Leave has been sought to appeal this decision to the Supreme Court of Canada. However, if leave is denied, or the decision is upheld, it could have far reaching consequences for nearly every field of law in this province.

What follows is a summary of the case, and the authors' views of how the Supreme Court might approach these important issues.

Background to the Case

Since the basic principle that a corporation has a separate legal personality from its shareholders or principals, and that the debts of one cannot be collected from the other, was first articulated in Salomon v. Salomon & Co., [1897] A.C. 22 (H.L.), it has served as a cornerstone of corporate law in the common law courts.