Shareholder Actions For Loss Of Share Value Evolution Of Ontario Corporate Law

• Published date: 25 September 2020
• Law Firm: Torkin Manes LLP
• Author: Mr Marco P. Falco

Does a shareholder have a personal cause of action where harm is done to her personally as a result of a loss in company share value? This is the second of a two-part series in which we endeavour to answer this question.

Where only shareholder can sue

The "Second Proposition" from Johnson v. Gore Wood & Co., [2001] B.C.C. 820 (U.K.H.L.) was articulated by the House of Lords as follows: "Where a company suffers loss but has no cause of action to sue to recover that loss, the shareholder in the company may sue in respect of it (if the shareholder has a cause of action to do so), even though the loss is a diminution in the value of the shareholding ..."

After reviewing previous cases in Ontario and British Columbia, including Meditrust Healthcare Inc. v. Shoppers Drug Mart [2002] O.J. No. 3891 and Robak Industries Ltd. v. Gardner 2007 BCCA...