The appellant, an investor, sought damages from specific-project corporations on the basis of knowing assistance in a breach of fiduciary duty arising from a complex multi-million dollar real estate fraud perpetrated by a married couple.
The couple convinced investors to invest in specific-project corporations to acquire and hold commercial real estate, but instead diverted the funds for personal use.
The application judge dismissed the knowing assistance claim, finding the fraudulent wife's knowledge could not be imputed to the specific-project corporations.
The majority of the Court of Appeal allowed the claim.
The Supreme Court of Canada allowed the appeal, agreeing with the dissenting judge below that the knowing assistance claim must fail.
The Court clarified that while Livent permits courts to decline to apply corporate attribution where the public interest so requires, the minimal criteria from Canadian Dredge must always first be satisfied.