Parent company liability Flashcards
general about company liability.
usually companies are not liable for their subisduarie companies, however in certain circumstances they will be liable. this is due to sperate company personaity as they can sue and be sued for their own misshaps.
case which showed that cmpanies can be liable for their own mistakes
Connelly v RTZ Corporation Plc
this was where a company which had its employees develop cancer. it attempted to sue the parent company claiming that RTZ had played a part in the health and safety procedures of the subsiduary company. and that they owed a duty of care to them. was held that they were liable under health and safety.
second case of parent liability
in the case of chandler v cape plc
Set out some requirements for a parent company to be liable to a subsiduary. company. suffered asbestos. held that the parent companies control over the health and safety policy was despite beng largely independant and legally seperate was sufficient to infer legal liability.
1 the business of the parent is basically the same.
2 the parent ought to have known or knew the relevant aspect of health and safety involved
3 the parent company knew or ought to have known that the subsiduaries companys system of work was unsafe.
4 the parent knew of ought to have known that the subsiduary would rely on the parent company for superior knowledge for the employees protection.
what are the three things a company can be liable for?
criminal liability
civil liability
and the liability of individuals in a company
what happened in the case of Meridian Global Funds Management Ltd v Securities Commission
chief investment officer a Mr Koo and senior portfolio manager a Mr Ng
Mr Koo and Mr Ng used funds belonging to Meridian to buy securities from a public issuer.
they became major shareholders in the company, this meant that Merdian was obliged to give notice of its interest to both ENC and also the New Zealand stock exchange. they failed to give the required notice.The question was whether or not the company could be held to be in breach of its duties to give that notice. Koo and Ng had certainly acted for the company; but they had acted on their own intiative, without the knowledge of its directors.
it was held that
criminal liability to companies
As regards civil matters, a company will be liable as stated, for example through contracts. A company will also be vicariously liable for delicts committed by an employee in the course of his or her employment
