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ARTICLE · 26 JULY 2017

Floodgates Now Opened? SCC Rules On Personal Liability Of Directors For Oppressive Conduct

Blaney McMurtry LLP
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Based on an important recent decision of the Supreme Court of Canada, the situations in which harm caused to a shareholder could potentially expose a director to personal liability under section 241(3)...

CanadaLitigation, Mediation & Arbitration
Kym Stasiuk
Kym Stasiuk
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Based on an important recent decision of the Supreme Court of Canada, the situations in which harm caused to a shareholder could potentially expose a director to personal liability under section 241(3) of the Canada Business Corporations Act have been broadened.

The decision generates significant new cautions for directors of corporations about the language they use and the decisions they make as directors.

The facts in Wilson v. Alharayeri, 2017 SCC 39, reduced to their essence, are that the president, CEO and director of a company (who I will call the "Oppressor") directed the company board to take certain actions against the former president, CEO and director of the company (the "Oppressed") that would result in a significant dilution of the Oppressed's shareholdings, and a financial loss of $648,310.

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