How your company can wind up on the hook for your support obligations

A corporation is a separate legal entity, generally immune from the personal responsibilities of its shareholders. However, in rare circumstances, the veil that protects the corporation can be pierced and the corporation may find itself liable for the debts of its shareholders. That is precisely what happened in the 2018 case of Slater v. Slater, penned by Justice McCreary of the Queen’s Bench for Saskatchewan.

At the time of their separation, Mr. Slater and Ms. Slater were the sole shareholders of Advance Door Systems. In December, 2017, the Slaters reached an agreement which resolved issues arising from their separation. The agreement, incorporated into a court order, required Mr. Slater to make payments totaling $110,031 towards the mortgage of the family home, and the home and cottage taxes, and discharge certain registered interests in respect of the home and cottage.

Before the ink had dried on the agreement, Mr. Slater found himself unable to pay. Pursuant to the terms of the agreement, the amount owed was automatically deemed to be lump sum spousal support and payable immediately. As it turns out, converting the amount owed to lump sum spousal support opened the door to significant and far-reaching enforcement remedies for Ms. Slater.

his article was originally published in the National Post. To read the complete article, please visit the National Post's website