Can a director of a limited company sue for breach of contract for tortious conduct against the director of the company?

Ontario, Canada


The following excerpt is from Apotex Inc. v. Plantex USA, Inc., 2005 CanLII 15481 (ON SC):

The court referred to the policy reasons for the exception described by McCardie J. in Said v. But (at p. 15): Second, it provides an exception to the general rule that persons are responsible for their own conduct. That exception has since gained acceptance because it assures that persons who deal with a limited company and accept the imposition of limited liability will not have available to them both a claim for breach of contract against a company and a claim for tortious conduct against the director with damages assessed on a different basis. The exception also assures that officers and directors, in the process of carrying on business, are capable of directing that a contract of employment be terminated or that a business contract not be performed on the assumed basis that the company's best interest is to pay the damages for failure to perform. By carving out the exception for these policy reasons, the court has emphasized and left intact the general liability of any individual for personal conduct.

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