Seizure of Corporate Shares

From Caselaw.Ninja


Yaiguaje v Chevron Corporation, 2017 ONSC 135 (CanLII)[1]

[26] D.M. Brown J. considered the issue of Chevron Canada’s corporate separateness in the context of his determination of whether there should be a stay of the proceedings pursuant to s. 106 of the Courts of Justice Act. Although the Court of Appeal for Ontario reversed his decision to stay the proceedings, it did not consider his decision on the corporate separateness issue. Neither the Court of Appeal nor the Supreme Court of Canada concluded that his decision on this issue was incorrect or that he applied the wrong legal principles in determining that Chevron Canada’s corporate veil should not be pierced. Although D.M. Brown J.’s decision on this issue is not binding upon me, I regard it as persuasive authority on the issue. I agree with Chevron Canada’s submission that his findings on this issue are a useful guide on this motion.

[27] After reviewing the evidence adduced on the issue of Chevron Canada’s separate corporate identity (which was almost identical to the evidence before me), D.M. Brown J. concluded that there was “no basis in law or fact” to pierce Chevron Canada’s corporate veil.[9] He also rejected the plaintiffs’ assertion that Chevron Canada’s assets were exigible to satisfy a judgment against its ultimate parent, Chevron.

[34] I do not accept the plaintiffs’ submission that Chevron Canada’s shares and assets are exigible pursuant to the Execution Act to satisfy the Ecuadorian judgment against Chevron, for the following reasons.

[35] Chevron Canada’s incorporating statute, the CBCA, gives it all the rights, powers and privileges of a natural person. Section 15(1) of the CBCA provides the following:[18]

A corporation has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

[36] Chevron Canada is not an asset of Chevron. It is a separate legal person. It is not an asset of any other person including its own parent, CCCC. The Supreme Court of Canada confirmed this in BCE Inc. v. 1976 Debentureholders,[19] where the court stated, “While the corporation is ongoing, shares confer no right to its underlying assets.”

[37] The Execution Act, which is a procedural statute, does not create any rights in property but merely provides for the seizure and sale of property in which a judgment-debtor already has a right or interest. It does not establish a cause of action against Chevron Canada. Chevron Canada is not the judgment-debtor under the Ecuadorian judgment and, therefore, the Execution Act does not apply to it with respect to that judgment. The Execution Act does not give Chevron any right or interest, equitable or otherwise, in the shares or assets of Chevron Canada.

[1]

References

  1. 1.0 1.1 Yaiguaje v Chevron Corporation, 2017 ONSC 135 (CanLII), <http://canlii.ca/t/gx2x6>, retrieved on 2020-08-19