Doug Mitchell

The trustees of a sole shareholder trust sued lawyers and accountants after tax assessments led to bankruptcies within a corporate group and the trust’s loss in share value.

The majority held that shareholders cannot sue for corporate losses unless they plead breach of a distinct obligation and direct personal injury.

On the pleaded facts, the claimed injury reflected corporate losses and did not establish sufficient interest under Quebec procedure.

The appeal was dismissed, with a dissent that would have allowed the action to proceed to trial.

The appellant appealed a decision of the Quebec Court of Appeal affirming the dismissal of his application for an injunction and a declaration regarding a proposed sale of shares.

The Supreme Court of Canada dismissed the appeal, agreeing with the Court of Appeal that the appellant did not validly exercise the right of first refusal contained in the Articles of Continuance of Sulconam Inc.