cases separate legal personality etc Flashcards
salomon v salomon
HL: unanimous in favour of Mr S - the company was duly formed as registered. Formalistic approach unlike lower courts
macraura v northern assurance
shareholder tried to receive benefit of an insurance policy in his name for the company’s benefit. HL: Lord Buckmaster ‘no shareholder has any right to any item of property owned by the company for he has no legal or equitable interest
lee v lee’s air farming
lee was a director, shareholder and employee of company. PC held: he could be in both capacities
the gramophone and typewriter v stanley
HMRC sued C arguing that he was liable to pay income tax on profits made by a German company that he owed wholly but had not distributed dividends. CA held: the holding of all the shares does not establish the relationship of principle and agent - not liable
revenue customs v holland
the question was whether Mr H was personally liable for shortfalls in tax as a de facto director - Held: 3:2 he was not - merely the guiding spirit
adam v cape industries
leading modern case - concerned liability within a group of companies and the purpose of the claim was the circumvent the separate legal personality of the subsidiary to make parent company liable - all arguments failed
prest v petrodel resources
Lord Sumption: veil piercing involves ‘disregarding the separate legal personality of the company’
wife trying to gain from company that was in her husband’s name - not piercing the veil but could benefit through trust
gilford motor company v horne
D set up company in breach of contract with ex-employer not to solicit customers CA held: the covenant was enforceable against C - lord hanworth mr ‘the company was a mere cloak for sham and a mere device for enabling C to breach covenant
jones v lipmann
lippman moved property to separate company he had control over to defeat Cs right to specific performance HC held: ‘a creature, a device and a sham’
smith stone and knight v city of birmingham
Atkinson test for agency 1) profits 2) appointment 3) head and brain 4) decision making 5) skill and direction 6) effectual and constant control
DHN Food Distribution v Tower Hamlets LBC
CA held: that all the companies should be treated as one
Woolfson v Strathclyde Regional Council
HL distinguished the DHN approach - emphasis facade concealing the true facts
Re A Company
Cummings-Bruce LJ ‘the cases show that the court will use its power to pierce the veil if necessary to achieve justice’
questioned since Adams
Kershaw: evading responsibility case - does it stand for a wider jurisdiction
creasy v breachwood motors
HC: distinguished adams and followed re a company - but clearly a case where D seeks to evade liability in law
VTB Capital v Nutriek International
SC held following Woolfson it is appropriate to pierce the veil only where there are special circumstances indicating a mere facade
prest v petrol resources
put cases into categories - concealment and evasion
emphasised that other options must be exhausted
Chandler v Cape
Arden LJ held that Cape assumed a duty of care to advise Cape Products on what steps that it had to take in the light of knowledge then available to provide those employees with a safe system of work or to ensure those steps were taken 1) the business of the parent and subsidiary are in relevant respect the same 2) parent has or ought to have superior knowledge of the health and safety 3) subsidiary work is unsafe and parent co should know 4) parent knew or ought to know that the subsidiary would rely upon that knowledge for superior protection
Thompson v The Renwick Group
the mere fact that a parent appoints a director to a board is not enough - Caparo threefold test must be satisfied
standard chartered bank v pakinstan national shipping corp
director made a fraudulent misstatement on behalf of the company, he and the company were liable
Williams v Natural Life Health Food
an action against the director could only succeed on the basis of Headly Byrne on the facts there was no negligence
MCA Records v Charly Records
if in relation to the wrongful acts which are subject to complaint, the liability of the individual director as a joint tortfeasor with the company arises from his participation or involvement in ways that go beyond the exercise of constitutional control
