They coerced one judge, first to use a court-appointed, supposedly impartial, "global expert" to make an overall damages assessment and, then, to appoint to that important role a man whom Donziger hand-picked and paid to "totally play ball" with the [appellants]. They then paid a Colorado consulting firm secretly to write all or most of the global expert's report, falsely presented the report as the work of the court-appointed and supposedly impartial expert, and told half-truths or worse to U.S. courts in attempts to prevent exposure of that and other wrongdoing. Ultimately, the [appellants'] team wrote the [Ecuadorian] court's Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment.
(1) Are the shares and assets of Chevron Canada exigible and available for execution and seizure pursuant to the Execution Act to satisfy the Ecuadorian judgment against Chevron?
(2) If they are not, should Chevron Canada's corporate veil be pierced so that its shares and assets are available to satisfy the Ecuadorian judgment against its indirect parent, Chevron?
Hainey J. answered both questions in the negative and dismissed the appellants' claim against Chevron Canada.
(1) Did Hainey J. err in his interpretation of the Act, such that Chevron Canada's shares and assets are exigible to satisfy the judgment debt of Chevron Corporation?
(2) Did Hainey J. err in failing to pierce the corporate veil?
(3) Did Hainey J. err in dismissing the motion to add CCCC as a party?
(4) Should the appellants' motion to tender fresh evidence on appeal be granted?
(5) Should leave to appeal the costs order be granted and, if so, should this court interfere with the costs order?
14(1) The interest of an execution debtor in a security or security entitlement may be seized by the sheriff in accordance with sections 47 to 51 of the Securities Transfer Act, 2006.
(3) Every seizure and sale made by the sheriff shall include all dividends, distributions, interest and other rights to payment in respect of the security, if issued by an issuer incorporated or otherwise organized under Ontario law, or in respect of the security entitlement and, after the seizure becomes effective, the issuer or securities intermediary shall not pay the dividends, distributions or interest or give effect to other rights to payment to or on behalf of anyone except the sheriff or a person who acquires or takes the security or security entitlement from the sheriff.
18(1) The sheriff may seize and sell any equitable or other right, property, interest or equity of redemption in or in respect of any goods, chattels or personal property, including leasehold interests in any land of the execution debtor, and, except where the sale is under an execution against goods issued out of the Small Claims Court, the sale conveys whatever equitable or other right, property, interest or equity of redemption the debtor had or was entitled to in or in respect of the goods, chattels or personal property at the time of the delivery of the execution to the sheriff for execution, and, where the sale is under an execution against goods issued out of the Small Claims Court, the sale conveys whatever equitable or other right, property, interest or equity of redemption the debtor had or was entitled to in or in respect of the goods, chattels or personal property at the time of the seizure.
The law on when a court may disregard this principle by "lifting the corporate veil" and regarding the company as a mere "agent" or "puppet" of its controlling shareholder or parent corporation follows no consistent principle. The best that can be said is that the "separate entities" principle is not enforced when it would yield a result "too flagrantly opposed to justice, convenience or the interests of the Revenue".
(1) When the court is construing a statute, contract or other document;
(2) When the court is satisfied that a company is a "mere facade" concealing the true facts; and
(3) When it can be established that the company is an authorized agent of its controllers or its members, corporate or human.
• Lynch v. Segal (2006), 82 O.R. (3d) 641 (C.A.), involved the use of a corporation to disguise property so that the defendant's wife and children would not have access to it for support purposes. This is precisely the type of abusive use of a corporation that Transamerica says justifies an exception to the corporate separateness principle.
• Downtown Eatery (1993) Limited v. Ontario (2001), 54 O.R. (3d) 161 (C.A.), was an employment case where this court found that the plaintiff had entered into an employment contract with a non-legal entity and was paid by a corporation that was simply acting as the paymaster for a group of companies. This court held that in those unique circumstances, the entire group of companies had in fact employed the plaintiff. In my view, this conclusion rested more on the plaintiff's relationship to the group of companies rather than the relationships among the companies in the group.
• Buanderie centrale de Montrual Inc. v. Montreal (City),  3 S.C.R. 29, is actually an example of one of the exceptions to the corporate separateness principle listed in Transamerica. This was a case where the corporate veil was pierced because it was provided for by statute.
• Bazley v. Curry,  2 S.C.R. 534, is a vicarious liability case. That doctrine makes one person liable for the acts of another. There must, however, be some basis for imposing vicarious liability. In that case, it was the employment relationship and the question was whether the employee's wrongful act was sufficiently related to conduct authorized by the employer to justify the imposition of vicarious liability. There is no suggestion in the present case that Chevron Corporation and Chevron Canada were engaged in any employment, agency, or other relationship in undertaking oil exploration in Ecuador.
While enterprise liability may offer some appeal, measuring the extent of an "economic unit" introduces an intolerable level of uncertainty into the question of liability. The task of marking the limits of liability on the basis of incorporation is relatively simple: the corporation has either complied with the technical requirements of incorporation or it has not. Extending liability to the edges of the enterprise requires courts to determine the scope of the economic enterprise. The answer to this issue will rarely, if ever, be clear. Creditors extending credit would not be able to determine with any precision the liabilities for which the debtor will be responsible and the assets that will be available to satisfy their claims. Such uncertainty substantially reduces both the efficiency and fairness of corporate law.
The appellants are seeking to enforce a judgment in which they have no direct economic interest. Funds collected on the judgment will be paid into a trust and net funds are to be used for environmental rehabilitation or health care purposes. This is public interest litigation.
The best that can be said is that the "separate entities" principle is not enforced when it would yield a result "too flagrantly opposed to justice, convenience or the interests of the Revenue": L.C.B. Gower, Modern Company Law (4th ed. 1979) at p. 112. I have no doubt that theoretically the veil could be lifted in this case to do j ustice, as was done in American Indemnity Co. v. Southern Missionary College, supra, cited by the Court of Appeal of Ontario. But a number of factors lead me to think it would be unwise to do so.
I have already noted that while in the case of a single shareholder corporation courts are unlikely to lift the corporate veil for the benefit of that single shareholder, they may be willing to lift the corporate veil "in the interests of third parties who would otherwise suffer as a result of that choice": Gower, supra, at p. 138.
[The employer] could easily have operated the nightclub through a single company. They chose not to. There is nothing unlawful or suspicious about their choice...
However, although an employer is entitled to establish complex corporate structures and relationships, the law should be vigilant to ensure that permissible complexity in corporate arrangements does not work an injustice in the realm of employment law. At the end of the day, [the employee's] situation is a simply, common and important one - he is a man who had a job, with a salary, benefits and duties. He was fired - wrongfully. His employer must meet its legal responsibility to compensate him for its unlawful conduct. The definition of "employer" in this simple and common scenario should be one that recognizes the complexity of modern corporate structures, but does not permit that complexity to defeat the legitimate entitlements of wrongfully dismissed employees.
In these circumstances, when he was wrongfully dismissed, [the employee] did his best - he sued the company which had paid him. Later, it turned out that that company had no assets. Yet the nightclub continued in business, various companies continued to operate it and, presumably, [the corporation's shareholders] continued to make money. In these circumstances, [the employee] decided to try to collect the money to which a superior court of justice had determined he was entitled. In our view, the common employer doctrine provides sup port for his attem pt.
...In these circumstances […] we conclude that [the employer] when he was wrongfully dismissed was all of [the related corporations]. This group of companies functioned as a single, integrated unit in relation to the operation of [the nightclub].
[The related organizations went through various reorganizations before the end of the trial]. The trial judge found that there was nothing nefarious about these reorganizations; they were undertaken for business reasons unrelated to [the employee's action]. We see no reason to disagree with this conclusion.
The question which the reorganizations pose is whether [the judgment] [...] should also be enforced against the successor or merged companies which have been created by the reorganizations.
We have no hesitation in answering this question in the affirmative.
...has been generally assumed to exist in all common law jurisdictions, and represents a potentially valuable judicial tool to undo wrongdoing in some cases, where no other principle is available.
It is however often dangerous to seek to foreclose all possible future situations which may arise and I would not wish to do so. What can be said with confidence is that the strength of the principle in Salomon's case and the number of other tools which the law has available mean that, if there are other situations in which piercing the veil may be relevant as a final fall-back, they are likely to be novel and very rare.