Jin v. Ren, 2015 ABQB 115
A director was ultimately found to be personally liable for a breach of contract by a corporation. The corporate veil was lifted solely on the basis that the director instructed the corporation to breach the contract, without expressly finding any fraud, misappropriation or breach of fiduciary duty.
The Alberta Court of Queen’s Bench refused to find that certain funds were held in trust, finding that the parties had failed to set out a trust in writing or otherwise manifest any intent to create a trust. Rather, the parties entered into a contract where a director promised to deliver shares (when issued) in exchange for the invested funds. No fiduciary relationship arose.
The Court found that the corporation and the director were liable for unjust enrichment. The director was personally liable for the unjust enrichment because he was the controlling mind of the corporation. According to the Court, following the Ontario Court of Appeal’s decision in Shoppers Drug Mart Inc. v. 6470360 Canada Inc. (Energyshop Consulting Inc./Powerhouse Energy Management Inc.), 2014 ONCA 85, he directed that a wrongful thing be done, by improperly refusing to return the funds when asked.