In July 2013, we
reported that the Ministry of Economic Development, Employment
and Infrastructure was proposing to recover costs incurred by the
Crown from former directors and officers of forfeited property of
dissolved corporations. Now it is enshrined in law, under
Ontario's recently passed Bill 144, Budget Measures Act, 2015
On December 10, 2015, the Forfeited Corporate Property Act, 2015
received Royal Assent, with the majority of the Act coming into
force on December 10, 2016. The Act will also amend 18 other
Sections 30 and 31 of the new Act set out the authorization for
the Minister to determine the amounts due to the Crown, and how the
Crown may recover them.
To recover costs against former directors & officers, the
Minister must apply to the Superior Court for an order determining
who the directors & officers were (in the two years prior to
dissolution) and ordering those individuals to pay some or all of
the costs sought by the Crown. Related regulations may be passed
relating to exceptions and governing the determination of amounts
under section 30.
The sections, while not specifically aimed at clean-up costs for
contaminated lands, would certainly encompass these. This is yet
another way that directors & officers will find themselves
potentially liable for such costs, regardless of fault, and no
matter when the contamination may have occurred.
While we understand the desire to limit tax payer liability, as
we've commented before, the trend to go after innocent
directors is continuing to expand. We question the wisdom of this
approach, as it no doubt will put a chill on those who would otherwise be willing
to serve as directors, potentially affecting the management and
business efficiency of Canadian corporations.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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