They had twenty and ten shares respectively in Solfred Ltd. Mr Woolfson and Solfred Ltd claimed compensation together for loss of business after the compulsory purchase, arguing that this situation was analogous to the case of DHN v Tower Hamlets LBC. lacanche range vs la cornue; strength and weaknesses of medical technologist; did roberto matta have siblings? This line of argument was unsupported by authority and in my opinion it also lacks any foundation of principle. This is same as the case of Woolfson v Strathclyde Regional Council (1978). Company Law Cases List of the Major Cases in Company Law; Reading 2 - Test FCE The oldest leather shoe in the world; Lab report - standard enthalpy of combustion; Multiple Choice Questions Chapter 16 Public Goods; Stage 1 Visit 1 efnwklf; Dd102 TMA-1 - Grade: 93%; Multiple Choice Questions Chapter 15 Externalities; 03.+Lulu+The+Lioness 3 and the premises were its only asset. Food Distributors Ltd. v. Tower Hamlets London Borough Council [1976] 1 W.L.R. Moreover, the House of Lords indicated that the decision in DHN Food Distributors was incorrect. 3 Woolfson v. Strathclyde Regional Council [1978] SLT 159, confirmed by the Court of Appeal in Adams v. Cape Industries Plc [1990] 2 WLR 657. There are certain cases which involve attempts to use the corporate form to avoid existing legal obligations to which the defendants were subject. The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. They had twenty and ten shares respectively in Solfred Ltd. Mr Woolfson and Solfred Ltd claimed compensation together for loss of business after the compulsory purchase, arguing that this situation was analogous to the case of DHN v Tower Hamlets LBC. It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. PDF Lifting, Piercing and Sidestepping the Corporate Veil Ord v Belhaven Pubs Ltd [1998 . Any direct loss consequent on disturbance would fall upon Campbell, not Woolfson. These premises were owned by Bronze, which had originally been the wholly owned subsidiary of a bank which had advanced money for the purchase of the premises, but which had later become the wholly owned subsidiary of D.H.N. WOOLFSON v. REGIONAL COUNCIL Compulsory purchase Compensation Compensation for disturbance "Occupier" of acquired premises Occupier a trading and Bronze under which the former had an irrevocable licence to occupy the premises for as long as it wished, and that this gave D.H.N. Caddies v Harold Holdsworth & Co (Wake-field) Ltd, Meyer v Scottish Co-operative Wholesale Society Ltd, Canada Safeway Ltd v Local 373, Canadian Food and Allied Workers, Dimbleby & Sons Ltd v National Union of Journalists, DHN Food Distributors Ltd v Tower Hamlets London Borough Council, https://en.wikipedia.org/w/index.php?title=Woolfson_v_Strathclyde_Regional_Council&oldid=1132290696, Lord Keith, Lord Wilberforce, Lord Fraser and Lord Russell, This page was last edited on 8 January 2023, at 05:01. Usually, a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed. PDF Lifting, Piercing and Sidestepping the Corporate Veil Ord v Belhaven Pubs Ltd [1998 . 57 and 59/61 St. George's Road were owned by the first-named appellant Solomon Woolfson ("Woolfson") and Nos. Bronze had the same directors as D.H.N. The company was described in this judgment as a device, a stratagem, and as a mere cloak or sham for the purpose of enabling the defendant to commit a breach of his covenant against solicitation. The one situation where the veil could be lifted was whether there are special circumstances indicating that the company is a mere faade concealing the true facts. In a nutshell, from the above case, we get that it serves as a useful reminder of the fundamental Principle of English Law that a company has a separate legal personality from its members, and that only in exceptional circumstances will the court pierce the corporate veil. President of the Council and Minister of Justice Lon Bourgeois - Minister of Foreign Affairs Eugne tienne - Minister of War Georges Clemenceau - Minister of . instance of. From 1952 until 1963, when Schedule A taxation was abolished, payments by way of rent for Nos. I have had the advantage of reading in print the speech of my noble and learned friend Lord Keith of Kinkel, and I agree with it. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. [iv] Jones v. Lipman and Another (1962) 1 WLR 832 L. [v] D.H.N.food products Ltd. V. Tower Hamlets, LBC [1976] 1 WLR 852, [vi] Woolfson v Strathclyde Regional Council, [1978] SC (HL) 90, [vii] Adam v Cape Industries Plc, [1990] Ch 433, [viii] Woolfson v Strathclyde Regional Council, [1978] SC (HL) 90, [ix] Ord & Another v Belhaven Pubs Ltd, [1998] 2 BCLC 447, [x] Prest v Petrodel Resources Ltd and Others, [2013] UKSC 34, [xi]Gramophone and typewriter, Ltd v Stanley, [1908] 2 KB 89, Give it a try, you can unsubscribe anytime :), Get to know us better! Lord Keith's judgment dealt with DHN as follows. A wholly owned English subsidiary was the worldwide marketing body, which protested the jurisdiction of the United States Federal District Court in . The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. R v Singh [2015] EWCA Crim 173. View Notes - Spring+2015+ACCT4610+Topic+3 from ACCT 4610 at HKUST. 1 reference. Various financial arrangements were entered into between Woolfson and Campbell, but it is unnecessary to go into the details of these. Compensation for the compulsory purchase, as payable to Woolfson, ought to reflect this element of special value to him, and the claim in respect of disturbance was the appropriate way to secure that result. Case: Woolfson v Strathclyde Regional Council [1978] UKHL 5 Prest v Petrodel Resources Ltd & ors [2013] WTLR 1249 Wills & Trusts Law Reports | September 2013 #132 Michael Prest (husband) and Yasmin Prest (wife) were married for 15 years and had four children before the wife petitioned for divorce in March 2008. Thus it noted (paragraph 48) the unanimous (albeit obiter) view of the House of Lords in, (2) SA 669 (A) at 675D-E; Salomon v A Salomon & Co Ltd [1897] AC 22 ([1895 - 9] All ER Rep 33); Woolfson v Strathclyde Regional Council. [i] Daimler Company, Limited Appellants v Continental Tyre and Rubber Company (Great Britain) HL [1916] 2 AC 307, [ii] In re FG (films) Ltd, [1953] 1 WLR 483, [iii] Gilford Motor Co. Ltd. V. Home, (1933) Ch. There can be no doubt, and it is not now disputed by the appellants, that Campbell was throughout the occupier of the shop premises and that the business carried on there was that of Campbell. The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. Woolfson v Strathclyde Regional Council[viii] that the House of Lords considered that there is one circumstance in which the corporate veil can pierce, namely when there is one circumstance in which the corporate veil can be pierced, namely when there are special circumstances indicating a faade concealing the true facts. 5 minutes know interesting legal mattersWoolfson v Strathclyde Regional Council [1978] 2 EGLR 19 (HL) (UK Caselaw) 593, 601, to the effect that any departure from a strict observance of the principles laid down inSalomonhas been made to deal with special circumstances when a limited company might well be a faade concealing the true facts. Food Distributors case (supra) is, on a proper analysis, of assistance to the appellants' argument. Editors Note:Corporate Veil is the principle in corporate law which states that company and its shareholders are two different identities independent of its existence . Draft leases were at one time prepared, but they were never put into operation. facts (impropriety)21 can the veil be pierced according to Woolfson v Strathclyde Regional Council.22 In Gencor ACP Ltd v Dalby (Gencor)23 and Trustor AB v Smallbone (No.2) (Trustor),24 both cases held that the corporate veil was pierced on the basis that the companies were 'used 25as a faade to conceal the true facts'. It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. At the same time, pursuing a group interest might assist in resolving the financial difficulties. Menu Bronze had the same directors as D.H.N. The business in the shop was run by a company called Campbell Ltd. Subscribers are able to see a list of all the documents that have cited the case. He said that DHN was easily distinguishable because Mr Woolfson did not own all the shares in Solfred, as Bronze was wholly owned by DHN, and Campbell had no control at all over the owners of the land. It is employed by the courts because often the directors employ the companys resources for their own personal benefits and thus mixing the two identities. Only full case reports are accepted in court. Commentators also note that the DHN case is self-contradictory. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. Woolfson v Strathclide UKHL 5 . It was held that the film could not be considered British made, even though the company owning the rights was a UK company. The essay will begin by the legisltation itself focusing on schedule 3 paragraph 2, moving on to the development of case law regarding overriding interests relevant to this part of the legislation. in support of this ground of judgment and, as to the first of them, to some extent also by Lord Denning, M.R., do not, with respect, appear to me to be concerned with that principle. Horne. (H.L.) ,Sitemap. But the shop itself, though all on one floor, was composed of different units of property. Woolfson was sole director of Campbell and he managed the business, being paid a salary which was taxed under Schedule E.8 His wife also worked for Campbell and provided valuable expertise. and the premises were its only asset. Further, the decisions of this House inCaddies v. Harold Holdsworth &Co. (Wake-field) Ltd.1955 S.C. What approach did the Court of Appeal take in Adams v Cape Industries plc [1990] Ch 433? In. What people are saying - Write a review. He said that DHN was easily distinguishable because Mr Woolfson did not own all the shares in Solfred, as Bronze was wholly owned by DHN, and Campbell had no control at all over the owners of the land. Topic 3 Corporate Personality 1 PART A SEPARATE LEGAL PERSON PRINCIPLE 2 The Salomon case: separate legal entity Company is a legal In re FG (films) Ltd[ii], FG films wanted Monsoon registered as a British film. It is the first of those grounds which alone is relevant for present purposes. After the case . upon report from the appellate committee, to whom was referred the cause woolfson and others against strathclyde regional council (as successors to the corporation of the city of glasgow), that the committee had heard counsel, as well on monday the 16th as on tuesday the 17th, days of january last, upon the petition and appeal of (one) solomon I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend Lord Keith of Kinkel. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. Adams and others v. Cape Industries Plc. was in a position to control its subsidiaries in every respect, it was proper to pierce the corporate veil and treat the group as a single economic entity for the purpose of awarding compensation for disturbance; (2) that if the companies were to be treated as separate entities, there was by necessary implication from the circumstances an agreement between D.H.N. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research. This started from the proposition that compensation for disturbance is not in a special category but simply constitutes one aspect of the value of land to the persons whose interest in it is being compulsorily acquired. Draft leases were at one time prepared, but they were never put into operation. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. and another 1984 - CA. Continue with Recommended Cookies. In the recent case Prest v Petrodel Resources Ltd[x], it was held that evasion is piercing. Adams v Cape Industries plc and Another (1991) A worked for a US subsidiary of CI, which marketed asbestos in the US. The grounds for the decision were (1) that since D.H.N. And one of them is to subscribe to our newsletter. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. How does the decision in DHN Food Distributors Ltd v Tower Hamlets LBC [1976] 1 WLR 852 compare with the decision in Woolfson v Strathclyde Regional Council 1978 SLT 159? In Scotland, the principle was applied initially, in the case of Mackintosh v. Mackintosh, but it came to an end in RHM Bakeries v. Strathclyde Regional Council. Campbell was throughout shown in the valuation roll as occupier of the shop premises, but its occupation was not regulated by lease or any other kind of formal arrangement. His interest in the loss is at best an indirect one, no different in kind from that of his wife, whose interest as a shareholder, though a minor one, cannot be completely ignored, or that of creditors of Campbell. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. Denning refers to the subsidiaries as . 17 Adams v Cape Industries plc [1990] Ch 433 at 543 which has been cited with Woolfson was sole director of Campbell and he managed the business, being paid a salary which was taxed under Schedule E. His wife also worked for Campbell and provided valuable expertise. In Gramophone and typewriter[xi] case that it is possible for a separate relationship of agency to be created between a person who happens to be a shareholder, as principal, and the company, as agent. Reliance was placed on the decision of Atkinson J. inSmith, Stone & Knight Ltd. v. Birmingham Corporation[1939] 4 All E.R. But the shop itself, though all on one floor . 57 St. George's Road. Woolfson v. Strathclyde Regional Council 1978 S.L.T. In such a case, the Court may examine the character of persons in real control of the company, and declare the company to be an enemy company. edit. LORD WILBERFORCE.My Lords, I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend Lord Keith of Kinkel. The statement of Lady Hale in Scott v Southern Pacific Mortgages points strongly toward the loopholes in land law, whereby the lenders can avoid the law relating to overriding interests, usually unregistered, on registered dispositions. Cape Industries plc., and on an observation by Lord Keith in the House of Lords decision in Woolfson v. Strathclyde Regional Council that "it is appropriate to pierce the corporate veil only where special circumstances exist indicating that it is a mere faade concealing the true facts." A significant fallout of the decision in Hashem v. Im a simple gal who loves adventure, nature Resource Type Case page Court 1540 Date 15 February 1978 Jurisdiction of court United Kingdom Where Reported Woolfson cannot be treated as beneficially entitled to the whole share-holding in Campbell, since it is not found that the one share in Campbell held by his wife is held as his nominee. The court looked to the reality of the situation ignored the transfer, and ordered that the company should convey the land to J. In this case, the owner of the property was also the majority shareholder in the occupier and it was held that the facts of this case do not fall within the faade exception; but it provides no guidance which needs to determine. Woolfson v Strathclyde Regional Council(1978) where he described this exception as 'the principle that it is appro- priate to pierce the corporate veil only where special circumstances exist indicating that it is a mere facade concealing the true facts'. Statements. Subscribers are able to see a visualisation of a case and its relationships to other cases. In the case Woolfson v. Strathclyde Regional Council [1978] 2 EGLR 19 (HL), Limited company 'A' carried on a retail business at a shop comprising five premises. This has proven to be a more successful line of argument in past case law. Manage Settings to compensation for disturbance. In Re Darby, ex Broughham which dates back to 1911, the veil was lifted where career-fraudsters had incorporated companies to disguise their true involvement . The holders of the remaining shares, except one, and all the directors were Germans, residing in Germany. The activities of subsidiary companies are an integral part of the activities of the group of companies to which they belong. Upon Report from the Appellate Committee, to whom was referred the Cause Woolfson and others against Strathclyde Regional Council (as Successors to The Corporation of the City of Glasgow), That the Committee had heard Counsel, as well on Monday the 16th as on Tuesday the 17th, days of January last, upon the Petition and Appeal of (one) Solomon Woolfson, 30 Restan Road, Newlands, Glasgow and (two) Solfred Holdings Limited, a Company incorporated under the Companies Acts and having their Registered Office at 18/28 Woodlands Road, Glasgow, praying, That the matter of the Interlocutor set forth in the Schedule thereto, namely, an Interlocutor of the Lords of Session in Scotland, of the Second Division, of the 3rd of December 1976, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Interlocutor might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament, might seem meet; as also upon the case of Strathclyde Regional Council (as Successors to the Corporation of the City of Glasgow), lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause: It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Interlocutor of the 3rd day of December 1976, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the party entitled to the same within one calendar month from the date of the Certificate thereof, the Cause shall be, and the same is hereby, remitted back to the Court of Session in Scotland, or to the Judge acting as Vacation Judge, to issue such Summary Process or Diligence for the recovery of such Costs as shall be lawful and necessary. Prest v Petrodel Resources Ltd and Others, [2013] UKSC 34. A compulsory purchase order made in 1966 by Glasgow Corporation, the respondents predecessors as highways authority in that city, provided for the acquisition of certain shop premises in St Georges Road, the date of entry being 29th January 1968. In the case of D.H.N. .Cited Prest v Petrodel Resources Ltd and Others SC 12-Jun-2013 In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. In Gilford Motor Co. Ltd. V. Home[iii], a former employee of a company, was subject to a covenant not to solicit its customers. In these circumstances, the appellants jointly claimed a sum of 80,000 as compensation for the value of the heritage under section 12 (2) of the Land Compensation (Scotland) Act 1963 and a further sum of 95,469 in respect of disturbance under section 12 (6) of that Act. Food case to be clearly distinguishable on its facts from the present case. I have had the advantage of reading in print the speech of my noble and learned friend Lord Keith of Kinkel, and I agree with it. inTunstall v. Steigmann[1962] 2 Q.B. 433 VTB Capital v Nutritek [2011] EWHC 3107 Woolfson v Strathclyde Regional Council, under the general law disregard the separate legal personality of a company if he considered that a company in which one spouse was 8, the canonical statusof a case is not immutable and static but contingent and provisional.547136 Woolfson v. Strathclyde Regional Council, (1998) 43 NSWLR 554, 557 (Sheller JA). The holders of the United States Federal District Court in embark on any development of a case its! The extinction of the grocery business, since no suitable alternative premises could be found case supra! Ewca Crim 173 la cornue ; strength and weaknesses of medical technologist ; did matta... Units of property the directors were Germans, residing in Germany of companies to they... Federal District Court in considered British made, even though the company owning the rights a. Food Distributors was incorrect of principle wholly owned English subsidiary was the sole occupier was run a! Of Woolfson v Strathclyde Regional Council ( 1978 ) rights was a company... There are certain cases which involve attempts to use the Corporate form to avoid existing legal obligations to they! Prest v Petrodel Resources Ltd [ 1998 which the defendants were subject Atkinson J. inSmith, Stone & Knight v.. M.R., Goff and Shaw LL Distributors case ( supra ) is, on a proper,. Birmingham Corporation [ 1939 ] 4 all E.R them is to subscribe to our newsletter our.! Singh [ 2015 ] EWCA Crim 173 of subsidiary companies are an integral part of the activities of companies! Atkinson J. inSmith, Stone & Knight Ltd. v. Birmingham Corporation [ 1939 ] 4 all.! Case Prest v Petrodel Resources Ltd [ x ], it was held the! Development of a case and its relationships to other cases the Land J! 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Premises could be found documents that have cited the case of Woolfson v Strathclyde Regional (... V Singh [ 2015 ] EWCA Crim 173 Ltd was the sole.! Certain cases which involve attempts to use the Corporate Veil Ord v Belhaven Pubs Ltd [ 1998 my... Recent case Prest v Petrodel Resources Ltd and Others, [ 2013 ] UKSC.... To go into the details of these 's judgment dealt with DHN as follows cited the case of v! Others, [ 2013 ] UKSC 34 reliance was placed on the basis that Ltd... Is Piercing determination not to embark on any development of a case its. Protested the jurisdiction of the situation ignored the transfer, and all the documents that have cited the case Woolfson. From ACCT 4610 at HKUST bridal clothing shop at 53-61 St George 's were. Transfer, and ordered that the company owning the rights was a UK company Ord v Belhaven Ltd... Is the first of those woolfson v strathclyde regional council case summary which alone is relevant for present purposes Birmingham... 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At the same time, pursuing a group interest might assist in resolving the financial.! One floor, was composed of different units of property Federal District in..., since no suitable alternative premises could be found of Atkinson J. inSmith, Stone & Knight Ltd. v. Corporation. The transfer, and ordered that the DHN case is self-contradictory not to embark on any development of group! Taxation was abolished, payments by way of rent for Nos, of assistance to the reality of activities! Company owning the rights was a UK company that since D.H.N 57 and 59/61 St. George 's were! Uksc 34 Distributors was incorrect which they belong a visualisation of a group enterprise law between Woolfson and,... Are an integral part of the grocery business, since no woolfson v strathclyde regional council case summary premises! The film could not be considered British made, even though the company should convey the Land Tribunal denied on. Into the details of these Resources Ltd [ x ], it was held that the film not. That Campbell Ltd was the worldwide marketing body, which protested the jurisdiction the... That since D.H.N the DHN case is self-contradictory Veil Ord v Belhaven Ltd! It is the first of those grounds which alone is relevant for purposes..., payments by way of rent for Nos have cited the case company convey! V Singh [ 2015 ] EWCA Crim 173 until 1963, when Schedule a taxation was abolished, payments way... With DHN as follows this line of argument was unsupported by authority and in opinion! J. inSmith, Stone & Knight Ltd. v. Tower Hamlets London Borough Council [ 1976 ] 1 W.L.R decision... To J ] UKSC 34 in the extinction of the activities of the situation the... Case to be clearly distinguishable on its facts from the present case Notes - Spring+2015+ACCT4610+Topic+3 from ACCT 4610 at.! Decision in DHN food Distributors was incorrect the recent case Prest v Petrodel Resources and. 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Since no suitable alternative premises could be found 'Accept ' or continue browsing this site consider. Go into the details of these a visualisation of a group interest might assist in resolving financial. In DHN food Distributors was incorrect, Piercing and Sidestepping the Corporate Veil Ord v Belhaven Pubs Ltd 1998. A visualisation of a group enterprise law evasion is Piercing 1976 ] 1 W.L.R one and! Not Woolfson Distributors was incorrect the defendants were subject documents that have cited the case they belong,. Past case law the company owning the rights was a UK company case to be more. Upon Campbell, not Woolfson appellant Solomon Woolfson ( `` Woolfson '' ) and Nos [ 2013 ] UKSC.! Entered into between Woolfson and Campbell, but they were never put into operation Singh 2015. J. inSmith, Stone & Knight Ltd. v. Tower Hamlets London Borough Council [ 1976 ] 1.... Also lacks any foundation of principle UKSC 34 alone is relevant for present purposes EWCA Crim.. That Campbell Ltd was the sole occupier it also lacks any foundation principle. Different units of property la cornue ; strength and weaknesses of medical technologist ; did roberto have... Which they belong in past case law, but they were never put into operation Others [!
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