CORPORATIONS - Distinct legal entity - Liability of shareholders

Law360 Canada (September 26, 2023, 6:13 AM EDT) -- Appeal by Metcalfe from trial judgment finding him jointly and severally liable in tort along with Tru-Square Homes Ltd., (“Tru-Square”) in which he owned 99 per cent of shares, on grounds that trial judge erred in his finding. The Swanbys purchased land for the purpose of constructing a family home. The Swanbys entered into one or more contracts with Tru-Square for the construction of their residence but only in terms of construction to the lock-up stage, including pouring the foundation, framing, and installation of doors and windows. The contracts were always only with Tru-Square, and Metcalfe signed the contracts only as the principal of Tru-Square, and not in a personal capacity. An issue arose with respect to leaking windows and water leaking through the soffits. Tru-Square took the position that fixing windows was not its responsibility and left the construction site and never returned. The Swanbys filed a statement of claim against Tru-Square, Metcalfe, and his spouse. The Swanbys alleged that both Tru-Square and Metcalfe were liable, and Metcalfe was personally liable for the fraudulent conduct. The trial judge's decision rested on piercing the corporate veil, along with an apparent determination that Metcalfe and Tru-Square were jointly liable in tort....
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