Corporate Separateness Remains a Strong Protection

Under Canadian law, a corporation is a distinct legal entity with its own property, rights and obligations. Absent explicit statutory provisions or exceptional circumstances, shareholders, officers and directors are shielded from liability for a corporation’s acts, defaults or obligations.

In rare cases, however, courts will pierce the corporate veil and impose personal liability where a corporation is completely dominated and controlled, and used as a shield for fraudulent or improper conduct.

In Chanderpaul v Caesars Convention Centre Ltd., 2026 ONCA 332, the Court of Appeal for Ontario declined to hold the shareholders and directors of Caesars Convention Centre Ltd. personally liable for overserving an underaged patron. In its decision, the Court reaffirmed the strong protection offered by corporate separateness, finding that the appellant failed to meet the high threshold required to pierce the corporate veil.

Notably, the Court confirmed that plaintiffs seeking to pierce the corporate veil must plead specific facts supported by robust evidence that demonstrated systemic and broad wrongdoing.

Piercing the Corporate Veil: Court of Appeal for Ontario Clarifies the Test