The appellants appealed an order granting the respondent leave to amend her statement of claim to add a derivative claim against an insurer on behalf of a corporation.
The respondent sought to recover her investment losses under a fidelity bond issued to the corporation, alleging the corporation's principal committed fraudulent acts.
The Divisional Court allowed the appeal, finding that the principal was the controlling mind of the corporation and could not defraud his own corporation.
As the proposed derivative claim was bound to fail, the respondent was not a proper complainant under the Business Corporations Act.
