The notion that particular circumstances may entitle the court to disregard the separate existence of corporate personhood recurs in many cases. In my view, this notion of circumstantial consideration seems beneficial, but is too often plagued by turning into yet another source of ambiguity. Of course, as the court notes, certain situations, such as fraudulent conduct will appear quite explicitly, and “the recognition of a limited power to pierce the corporate veil in carefully defined circumstances is necessary if the law is not to be disarmed in the face of abuse” (Prest v. Petrodel) – yet there are many more grey areas. Ultimately, these circumstantial considerations often come down to a desire to denounce “conduct that would otherwise unjustly deprive claimants of their rights”, and (perhaps I am being too optimistic here), encourage socially-responsible behaviour by corporations.
Similarly, much ambiguity arises in the area of determining what exactly falls within the “corporation’s best interests” – this too can blur the line between explicit wrongdoing and mere business efficiency. As Rotman notes, the corporation, by definition, is not the same as its shareholders and may legitimately have different interests. Reconciling the range of divergent interests can, however, become difficult, if not impossible, to accomplish. In this regard, while BCE Inc seemed to confirm that the fiduciary duty of directors and officers is owed exclusively to the corporation, it also seemed to imply that the scope of that duty can include a need to take stakeholder interests into account – thus rendering the scope of the duty, and whose interests to prioritize, a tricky calculation.
With regards to the ambiguity of when courts will pierce the corporate veil, I would suggest that the problem lies less in the unpredictability and more in the fact that the standard seems to shift depending on whether or not piercing the corporate veil would be in the best interests of the corporation in that particular circumstance. I would argue that piercing the corporate veil will always require the courts to undergo a contextual analysis that, due to the complexity and controversy surrounding this issue, is likely to be on the verge of being hopelessly unpredictable. However, so long as the standards employed by the courts in this analysis are consistent regardless of whether or not it would benefit the corporation to pierce the veil, this unpredictability may be an appropriate act of balancing by courts operating in a statutory vacuum.