MacInnis v. Rayner & Raylink, 2016 PESC 40
On October 21, 2010, the Plaintiff was injured in a motor vehicle accident involving a vehicle driven by the Defendant Benjamin Rayner. The owner of the Defendant vehicle was Raylink Ltd, a corporation owned and operated by Benjamin’s father, Gary Rayner.
The Plaintiff started an action against Benjamin Rayner, Raylink Ltd as owner of the vehicle and against Gary Rayner, alleging that he was co-owner of the vehicle. Gary Rayner filed a motion for summary judgment to have the action against him dismissed.
The Plaintiff argued that although Raylink Ltd was the registered owner of the vehicle, the circumstances were such that the court should “pierce the corporate veil” and find that Gary Rayner was an owner of the vehicle.
The Plaintiff argued that Raylink Ltd is really just Gary Rayner and that there is no difference between the two. The Plaintiff argued that as Mr. Rayner used the vehicle for personal use, and lent the vehicle to his son who was not employed by the company that this was evidence that Gary Rayner was an actual owner of the vehicle.
The Plaintiff stated that the decision by Mr. Rayner to allow his son, who had a poor driving record and only recently had his driver’s license reinstated, to drive the company’s vehicle was putting the company at risk and was further evidence to allow a court to look beyond the corporation and find Mr. Rayner to be an owner of the vehicle.
The Plaintiff further argued that it would be unfair for Mr. Rayner to use his corporate structure to limit any potential liability he may have to the Plaintiff.
The Court found that there was no fraud, improper or dishonesty activity on the part of Mr. Rayner to warrant “piercing the corporate veil” and finding Mr. Rayner liable. The law is clear that a shareholder is not liable for the debts and liabilities of a corporation unless there is fraud or dishonest activity.
The action against Gary Rayner was dismissed.
You can read MacInnis v. Rayner & Raylink, 2016 PESC 40, in its entirety here.