Friday, 21 December 2018

Canada: Supreme Court considers separate legal personality and action in respect of harms suffered by companies

The Supreme Court gave judgment earlier this month in Brunette v Legault Joly Thiffault, s.e.n.c.r.l., 2018 SCC 55. A summary of the case is available here. By majority, the Court concluded (at para. [51]):
The principles of procedural and corporate law in Quebec bar shareholders from exercising rights of action that belong to the corporations in which they hold shares. Shareholders may institute proceedings, however, if they can demonstrate (1) a breach of a distinct obligation, and (2) a direct injury that is distinct from that suffered by the corporation in question. These requirements reflect the essential principles of civil liability under the C.C.Q. [Civil Code of Qu├ębec] and provide shareholders having a direct and personal interest with a means to seek damages against third-party defendants".

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