Can shareholders of a corporation sue for losses in the value of their shares?
Ontario, Canada
The following excerpt is from Tran v. Bloorston Farms Ltd., 2020 ONCA 440 (CanLII):
The rule in Foss v. Harbottle (1843), 67 E.R. 189, 2 Hare 461 (U.K. (H.L.)) prevents shareholders from suing for a loss in the value of their shares brought about by a wrong done to the corporation. The rule, which is well-entrenched in Canadian law, is a consequence of the separate legal personality of the corporation. Just as shareholders (subject to limited exceptions) cannot be sued for acts, debts, defaults or obligations of the corporation, only the corporation has a cause of action for wrongs done to it.1
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