Liability of Corporate Managers for Torts

 Generally, directors and officers not liable for the corp’s torts by virtue of their position with the
corp.
 However, where directors and officers commit torts in the course of their employment, they are
sometimes personally responsible, just as they would be if they were not acting in the course of
their employment.
 Imposing tort liability in individuals when they are acting on behalf of the corp can be argued to
be inconsistent with the separateness of corporate personality.
 May threaten limited liability
 Director, officer or employee is responsible for tortuous acts depends on the degree and kind of
personal involvement - where he has performed, ordered, procured, counselled, aided or
abetted , likely to be found liable

Scotia Macleod v Peoples Jewellers: held that for a claim against directors or officers to succeed, it is
necessary to allege that they had committed tortuous behaviour outside their formal decision-making
roles in the corp. Usual categories of torts giving rise to personal liability: fraud, deceit, dishonesty, or
want of authority  it must be shown that the actions are tortuous or exhibit a separate identity or
interest from the company so as to make the act or conduct complained of their own.

ADGA Systems Interantional v Valcom: the requirement that the actions of corporate managers have a
“separate identity” from the corporation did not mean that corp managers could not be held liable for
torts when acting in their course of duties.

Berger v Willowdale AMC

-employee slipped on sidewalk while leaving work after a snowstorm. WSIB barred her from suing the
corporate employer in tort; she had to rely on the compensation scheme provided in the Act
-b/c this was inadequate, she sued the president personally, alleging that he was negligent
-crt found that the president had a general responsibility to ensure that the workplace was safe, a
responsibility he had failed to discharge. He was in a position to know about the danger and to remove it
but failed to do so.
-he was liable in negligence
-Crt indicated that a personal duty would not arise in every case but would depend on a variety of
factors:
o size of the corp
o number of employees
o nature of business
o whether danger should have been readily apparent to the manager
Ratio: the person in control of property is not excused just because he is president of the corp that
happens to own the property.

London Drugs v. Kuehne & Nagel International – Employee liability for negligence (leading case)
-2 employees negligently damaged property belonging to customer of their corporate employer while
moving the property in the course of their employment.
-SC held: they had a personal duty to the copr’s customer b/c damage to the property was a foreseeable
consequence of their failing to take the requisite care.
-ultimately, the employees and their corporate employer escaped liability on the basis of an exclusion
clause in the employer’s contract with the plaintiff.

NBD Bank, Canada v. Dofasco

-VP of Algoma Steel made a number of oral and written misrepresentations to the NBD bank regarding
Algoma’s financial health and the security for the bank’d loan
-the bank advanced funds on the basis of misrepresentation
-crt held: the officer liable for the losses the bank sustained as a result.
-while the officer was acting in his role as an officer, the direct relationship b/w the officer and the bank
was sufficient to gove rise to a personal duty for the officer.

General Rule