Case information

Fiduciary duty — Directors — Real estate development — Claims against director alleging breach of fiduciary duty dismissed — Holding company seeking return of $2.3 million shareholder loan — Whether Court of Appeal failed to distinguish between statutory fiduciary duties of a director and common law fiduciary duties of a director — Whether Court of Appeal failed to properly evaluate whether a breach of fiduciary duty, either governed by statute or common law, is determined by an objective standard applied to conduct of a director or a subjective standard based on a director’s “good faith motives” — Whether Court of Appeal erred in failing to determine that a director who allegedly commenced a false and dishonest lawsuit against their company qua shareholder is in breach of their statutory and/or common law fiduciary duty — Whether Court of Appeal erroneously determined that a director may act unilaterally contrary to a decision of majority of directors as long as one director believes in good faith that their conduct is in best interest of corporation — Whether Court of Appeal has extended principles outlined in Peoples Department Stores Inc. (Trustee of) v. Wise, 2004 SCC 68. [2004] 3 S.C.R. 461.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

This case concerns an aborted real estate development. In the first action, the applicant, Ascent One Properties Ltd. alleged that the respondent, Li Chiao Liao, breached her fiduciary duty as a director of the company. That action was dismissed.

In the second action, Ms. Liao’s holding company, the respondent, 0949652 B.C. Ltd. sought the return of a $2.3 million shareholder loan it had provided to Ascent One at its inception, alleging that it took priority over a subsequent $1.3 million advance made to Ascent One by the applicant Fwu Yang. That action was allowed.

Ascent One, Mr. Yang and the respondent Rena Properties Ltd., a holding company owned by Mr. Yang, alleged both errors of fact and law in the trial judge’s reasons. The Court of Appeal dismissed the appeals.