Case Study – 146400 Canada Inc. v. Network Transport Ltd. Flashcards
Who were the parties in this case?
Landlord: 146400 Canada Inc.
Tenant (disputed): Either Network Transport Ltd. (solvent) or Network Transport (Quebec) Limitee (insolvent).
What triggered the lawsuit?
The leased premises were abandoned before the end of the lease term. The landlord sued for breach of lease and damages.
What was the main legal issue in this case?
Determining which corporation was the actual tenant under the lease agreement.
Why was there confusion over the tenant’s identity?
The lease was signed by “Network Transport,” a vague name not identifying a full legal corporate entity.
What did Charles Bates argue?
That the tenant was Network Transport (Quebec) Limitee, which was insolvent, not Network Transport Ltd.
What evidence supported that Network Transport Ltd. was the actual tenant?
It made most of the rent payments by cheque.
It listed the leased premises as its registered place of business on Quebec corporate records.
The landlord was led to believe it was the tenant through Bates’s actions.
What legal principle did the court apply?
The court applied CCQ 317 and pierced the corporate veil due to fraudulent conduct.
What is the significance of piercing the corporate veil in this case?
It allowed the court to ignore the separate legal personalities of the corporations and hold the solvent parent company (Network Transport Ltd.) liable.
Why was this considered fraud under CCQ 317?
Because Charles Bates, by controlling several companies and intentionally misleading the landlord, used the corporate structure to avoid liability.
What is CCQ 317?
A provision allowing courts to hold individuals or companies personally liable when a corporate entity is used to commit fraud.
