Directors of a corporation cannot invoke the business judgment rule to justify decisions that violate a unanimous shareholders’ agreement, the Ontario Divisional Court held recently.

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There are few, if any, legal issues affecting the investment industry that are more cloudy and less certain than whether investment firm clients belong to the investment advisor or to the investment firm. And there are arguably few issues more important. This question has been the subject of several widely divergent – and even confusing – court decisions on the issue over the past few years.

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Earlier this year, the Ontario Court of Appeal affirmed a trial decision awarding damages against an employment placement agency for not checking the references of an employee who would later go on to defraud her employer of more than $263,000.

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Ontario’s Court of Appeal upheld the trial decision in Drouillard v. Cogeco Cable Canada Inc. that held large cable operator Cogeco Cable liable for telling a cable subcontractor, Mastec Canada, that it would not allow its employee, Mr. Drouillard, to work on Cogeco equipment.

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Western Tank & Lining Ltd. recently obtained an extraordinarily broad interlocutory injunction restraining a group of former employees not only from soliciting Western Tank’s clients but even from accepting business from customers that Western Tank did business with over the previous 5 years.

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