Facts A bridal clothing shop at 53-61 St George's Road was compulsorily purchasedby the Glasgow Corporation. I agree with it, and for the reasons he gives would dismiss the appeal. From 1962 till 1968 Campbell paid rent to Solfred in respect of Nos. Continue with Recommended Cookies. Held: The House declined to allow the principal shareholder of a company to recover compensation for the compulsory purchase of a property which the company occupied. (H.L.) 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. Following Adams v Cape Industries Plc, further extracts from which are set out, it is below, it is clear that the faade concealing the true facts test has become the primary reference point for any lawyer investigating whether it is possible to pierce the corporate veil and even the same judgment was held in the case of Ord & Another v Belhaven Pubs Ltd[ix]. Companies use subsidiary companies rather than carrying out the activity through the parent company itself because of liability avoidance, tax, and regulatory reasons, as well as practical and geographical reasons. lacanche range vs la cornue; strength and weaknesses of medical technologist; did roberto matta have siblings? 59/61 St Georges Road were credited to Woolfson in Campbells Road. 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. 57 and 59/61 St. George's Road were owned by the first-named appellant Solomon Woolfson ("Woolfson") and Nos. Here, on the other hand, the company that carried on the business, Campbell, has no sort of control whatever over the owners of the land, Solfred and Woolfson. From 1952 until 1963, when Schedule A taxation was abolished, payments by way of rent for Nos. In order to assess this statement in detail, in depth analysis of Land Registration Act needs to be done together with its application in landmark cases. References No rent was ever paid or credited in respect of No. [1978] UKHL 5, [1979] JPL 169, (1978) 248 EG 777, 1978 SC (HL) 90, 1978 SLT 159, (1979) 38 P and CR 521if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[300,250],'swarb_co_uk-medrectangle-4','ezslot_2',113,'0','0'])};__ez_fad_position('div-gpt-ad-swarb_co_uk-medrectangle-4-0'); Applied Adams v Cape Industries plc CA 2-Jan-1990 Proper Use of Corporate Entity to Protect Owner The defendant was an English company and head of a group engaged in mining asbestos in South Africa. Subscribers are able to see any amendments made to the case. It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. Tel: 0795 457 9992, or email david@swarb.co.uk, Darg v Commissioner Of Police for the Metropolis: QBD 31 Mar 2009, Prest v Petrodel Resources Ltd and Others, AA000772008 (Unreported): AIT 30 Jan 2009, AA071512008 (Unreported): AIT 23 Jan 2009, OA143672008 (Unreported): AIT 16 Apr 2009, IA160222008 (Unreported): AIT 19 Mar 2009, OA238162008 (Unreported): AIT 24 Feb 2009, OA146182008 (Unreported): AIT 21 Jan 2009, IA043412009 (Unreported): AIT 18 May 2009, IA062742008 (Unreported): AIT 25 Feb 2009, OA578572008 (Unreported): AIT 16 Jan 2009, IA114032008 (Unreported): AIT 19 May 2009, IA156022008 (Unreported): AIT 11 Dec 2008, IA087402008 (Unreported): AIT 12 Dec 2008, AA049472007 (Unreported): AIT 23 Apr 2009, IA107672007 (Unreported): AIT 25 Apr 2008, IA128362008 (Unreported): AIT 25 Nov 2008, IA047352008 (Unreported): AIT 19 Nov 2008, OA107472008 (Unreported): AIT 24 Nov 2008, VA419232007 (Unreported): AIT 13 Jun 2008, VA374952007 and VA375032007 and VA375012007 (Unreported): AIT 12 Mar 2008, IA184362007 (Unreported): AIT 19 Aug 2008, IA082582007 (Unreported): AIT 19 Mar 2008, IA079732008 (Unreported): AIT 12 Nov 2008, IA135202008 (Unreported): AIT 21 Oct 2008, AA044312008 (Unreported): AIT 29 Dec 2008, AA001492008 (Unreported): AIT 16 Oct 2008, AA026562008 (Unreported): AIT 19 Nov 2008, AA041232007 (Unreported): AIT 15 Dec 2008, IA023842006 (Unreported): AIT 12 Jun 2007, HX416262002 (Unreported): AIT 22 Jan 2008, IA086002006 (Unreported): AIT 28 Nov 2007, VA46401-2006 (Unreported): AIT 8 Oct 2007, AS037782004 (Unreported): AIT 14 Aug 2007, HX108922003 and Prom (Unreported): AIT 17 May 2007, IA048672006 (Unreported): AIT 14 May 2007. In-text: (Woolfson v Strathclyde Regional Council, [1978]) Your Bibliography: Woolfson v Strathclyde Regional Council [1978] EGLR 2, p.19. Search over 120 million documents from over 100 countries including primary and secondary collections of legislation, case law, regulations, practical law, news, forms and contracts, books, journals, and more. It carried on no activities whatever. case company bank reconciliation; primary care doctor port jefferson, ny. Woolfson v Strathclyde RC [1978] UKHL 5 (15 February 1978), William Trotter and Others v Young Trotter, Epping Forest District Council v Philcox [2000] EWCA Civ 515 (08 December 2000), The Magistrates of Glasgow, and Others, V James Paton, and Others. The position there was that compensation for disturbance was claimed by a group of three limited companies associated in a wholesale grocery business. Woolfson v Strathclyde RC 1978 S.C. However, in Woolfson v Strathclyde Regional Council the House of Lords rejected Lord Dennings view, doubting whether the Court of Appeal had applied the correct principle in DHN. Having examined the facts of the instant case, the Lord Justice-Clerk reached the conclusion that they did not substantiate but negatived the argument advanced in support of the unity proposition and that the decision in theD.H.N. 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. But the shop itself, though all on one floor, was composed of different units of property. 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. Woolfson v. Strathclyde Regional Council, [1978] S.C. 90 (H.L. woolfson v strathclyde regional council case summary 2021 12 18 / Corporate Identity - Page 4 of 4 - Irish Legal Guide 13 controller may be personally liable, generally in addition to the company, for something that he has done as its agent or as a joint actor. Lord Keith's judgment dealt with DHN as follows. Draft leases were at one time prepared, but they were never put into operation. Statements. (H.L.) 21Ben Hashem v Shayif [2008] EWHC 2380 (Fam) [159] - [164]. 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. The activities of subsidiary companies are an integral part of the activities of the group of companies to which they belong. Woolfson v Strathclyde Regional Council . You also get a useful overview of how the case was received. These cookies will be stored in your browser only with your consent. woolfson v strathclyde regional council case summary About; Sponsors; Contacts Language Label Description Also known as; English: Woolfson v Strathclyde Regional Council. J.) 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. The circumstance that Solfred owned a substantial part of the shop premises was for purposes of this argument dismissed as irrelevant, on the basis that the part of the premises owned by Woolfson was essential to the carrying on of Campbells business, so that without it the business would have to be carried on, if at all, at some completely different place. Woolfson v. Strathclyde Regional Council 1978 S.L.T. subsequent case following adams (O) williams v natural health foods ltd. subsequent case following adams (W) inland revenue commissioners v adam & partners ltd. company voluntary arrangement - a composition in satisfaction of the company's debts or a scheme of arrangement of its affairs. Adams and others v. Cape Industries Plc. All rights reserved. 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.[1]. that the group was entitled to compensation for disturbance as owners of the business. 0 references. The whole of the shop premises was occupied by a company called M. & L. Campbell (Glasgow) Limited ("Campbell") and used by it for the purpose of its business as costumiers specialising in wedding garments. A compulsory purchase order made in 1966 by Glasgow Corporation, the respondents' predecessors as highway authority in that city, provided for the acquisition of certain shop premises in St. George's Road, the date of entry being 29th January 1968. ,Sitemap. Topic 3 Corporate Personality 1 PART A SEPARATE LEGAL PERSON PRINCIPLE 2 The Salomon case: separate legal entity Company is a legal Chapter 7: Corporations and legal personality Woolfson was the sole director of 'A' and owned 999 shares of the 1,000 issued . In the case of Woolfson v Strathclyde Regional Council[vi], it involves a similar fact pattern to DHN involving a compulsory purchase of property where the occupier of the property was not the owner. The business in the shop was run by a company called Campbell Ltd. and another 1984 - CA. Moreover, the House of Lords indicated that the decision in DHN Food Distributors was incorrect. Facts; Judgment; See also; Notes; References; External links; Facts. The carrying on by the company of its business conferred substantial benefits on Woolfson. Woolfson v Strathclide UKHL 5 . Jones v Lipman, Gilford Motor Co Ltd v Horne, Woolfson v Strathclyde Regional Council, New Zealand Seamen's Union IUOW v Shipping Corporation Ltd, Official Assignee v 15 Insoll Avenue Ltd in favour of lifting the corporate veil. ACCEPT, Strathclyde Regional Council (as Successors to The Corporation of the City of Glasgow), to the court to 'pierce the veil'. 41-4, December 2014, Melbourne University Law Review Vol. PDF Lifting, Piercing and Sidestepping the Corporate Veil Ord v Belhaven Pubs Ltd [1998 . In Woolfson v. Strathclyde Regional Council it was held that the veil could be pierced where special circumstances exist indicating that the company is a facade concealing the true facts. 53/55 St. George's Road. Piercing of corporate veil is a legal method of trying to go behind this veil. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may pierce or lift the corporate veil. Held: The House declined to allow the principal shareholder of a company to recover compensation for the . In the above-mentioned case, the Court of appeal thought that the present case was one which was suitable for lifting the corporate veil. Such relationships of agency would typically involve the explicit or implicit appointment of the company to act on behalf of the shareholder in relation to some activity. Piercing The Corporate Veil Recent Developments. You also have the option to opt-out of these cookies. 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. The DHN case approach has become less popular since then. 33 (1), sect. 935 C.A. In Woolfson v Strathclyde BC, the House of Lords held that it was a decision to be confined to its facts (the question in DHN had been whether the subsidiary of the plaintiff, the former owning the premises on which the parent carried out its business, could receive compensation for loss of business under a compulsory purchase order notwithstanding that under the rule in Salomon, it was the . But the shop itself, though all on one floor, was composed of different units of property. Lords Wilberforce, Fraser and Russell and Dundy concurred. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. instance of. The third company, also a wholly owned subsidiary of D.H.N., owned as its only asset the vehicles used in the grocery business, and it too carried on no operations. This website uses cookies to improve your experience. However, in Woolfson v.Strathclyde Regional Council [14], Lord Keith refused to follow DHN and cast a shadow of doubt over Lord Denning MR's approach and principle. 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. What approach did the Court of Appeal take in Adams v Cape Industries plc [1990] Ch 433? Updated daily, vLex brings together legal information from over 750 publishing partners, providing access to over 2,500 legal and news sources from the worlds leading publishers. I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend Lord Keith of Kinkel. 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. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. 1 reference. It is unnecessary for me to rehearse them in detail, and it will suffice to mention those that are particularly material. 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 . I agree with it and with his conclusion that this appeal be dismissed. 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'. Lord Keith's judgment dealt with DHN as follows. 877, considered. If the company was put out of the land through compulsory purchase he would have to incur expense in connection with the obtaining of other premises for it to occupy, and would suffer loss. 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. 53/55 St. George's Road. The US subsidiary had no assets. 22Woolfson v Strathclyde Regional Council. An injunction was granted both against him and the company to restrain them from carrying on the business. UK legal case. Sonic Breakfast Burrito Review, The House of Lords made it very clear in Salomon v Salomon, that the company is not the shareholders agent by reason of the fact of incorporation. From the paper "Limits of Employment-At-Will Doctrine" it is clear that the employment at will doctrine has its own limits. View Notes - Spring+2015+ACCT4610+Topic+3 from ACCT 4610 at HKUST. Of Landmark or Leading Cases: Salomon's Challenge. We and our partners use cookies to Store and/or access information on a device. The veil will be lifted only where 'special circumstances exist indicating that it is a mere facade concealing the true facts': Woolfson v Strathclyde Regional Council (1978) Gilford Motor Co Ltd v Horne (1933) 852, that the court should set aside the legalistic view that Woolfson, Solfred and Campbell were each a separate legalpersona, and concentrate attention upon the realities of the situation, to the effect of finding that Woolfson was the occupier as well as the owner of the whole premises. Held, the company was an alien company and the payment of debt to it would amount to trading with the enemy, and therefore, the company was not allowed to proceed with the action. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. The parent company, D.H.N., carried on the business in the premises which were the subject of compulsory purchase. Dublin County Council v. Elton Homes Ltd [1984] ILRM 297 . I can see no grounds whatever, upon the facts found in the special case, for treating the company structure as a mere faade, nor do I consider that theD.H.N. The entire wiki with photo and video galleries for each article Woolfson v Strathclyde Regional Council: HL 15 Feb 1978. Woolfson v Strathclyde Regional Council (1978) - 13th May 1975 - Lands tribunal in Scotland. Lists of cited by and citing cases may be incomplete. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. (Piercing the veil for attempting to evade a legal obligation); In re Darby, Brougham, [1911] 1 KB. In Woolfson v. Strathclyde Regional Council it was held that the veil could be pierced where special circumstances exist indicating that the company is a faade concealing the true facts. Academia.edu no longer supports Internet Explorer. Prest v Petrodel Resources Ltd & ors [2013] WTLR 1249. Mr Solomon Woolfson owned three units and another company, Solfred Holdings Ltd owned the other two. The business in the shop was run by a company called Campbell Ltd. Join our newsletter. It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. [para. 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." 1996, c. 125, sect. The parent company, D.H.N., carried on the business in the premises which were the subject of compulsory purchase. Prima facie, Lord Keith sought to distinguish DHN from the present case by stating the cases were factually dissimilar.Notwithstanding the factual distinction, Lord Keith advanced that he had some doubts over whether the Court of . Woolfson v Strathclyde Regional Council [1978] UKHL 5. The courts have typically been averse to allow a shareholder to drop the corporate veil and obtain a benefit on the basis that he and the company are in effect the same (Woolfson v Strathclyde Regional Council [1978] UKHL 5; Tunstall v Steigmann [1962] 2 QB 593; Macaura v Northern Assurance Co Ltd [1925] AC 619 (HL); Thomas K Cheng, "The . LORD KEITH OF KINKEL.My Lords, This is an appeal against an interlocutor of the Second Division of the Court of Session affirming the decision of the Lands Tribunal for Scotland upon a question relating to compensation for the compulsory acquisition of land. Lord Keith upheld the decision of the Scottish Court of Appeal, refusing to follow and doubting DHN v Tower Hamlets BC. In my opinion the conclusion was correct, and I regard as unimpeachable the process of reasoning by which it was reached. But however that may be, I consider the D.H.N. Corporate structures, the veil and the role of the courts. Lord Keith upheld the decision of the Scottish Court of Appeal, refusing to follow and doubting DHN v Tower Hamlets BC. I have some doubts whether in this respect the Court of Appeal properly applied the principle that it is appropriate to pierce the corporate veil only where special circumstances exist indicating that is a mere faade concealing the true facts. 17]. The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. However, the House of Lords ruled that Woolfson and its subsidiary were not a single economic unit due to operational practices. LORD FRASER OF TULLYBELTON.My Lords 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. Salomon v Salomon (1897) A.C. 22 (H.L.) During the First World War, the English company commenced action for recovery of a trade debt. 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. In my opinion the conclusion was correct, and I regard as unimpeachable the process of reasoning by which it was reached. Lord Keith upheld the decision of the Scottish Court of Appeal, refusing to follow and doubting DHN v Tower Hamlets BC. Subscribers are able to see the list of results connected to your document through the topics and citations Vincent found. Lords ruled that Woolfson and one by his wife the other consider D.H.N. 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That compensation for the reasons he gives would dismiss the Appeal ( Piercing the corporate veil Scottish..., Solfred Holdings Ltd owned the other this Appeal be dismissed of Employment-At-Will Doctrine '' it is clear that group. Them from carrying on the business purchased by the Court of Appeal, refusing to follow doubting... Of Nos of medical technologist ; did roberto matta have siblings care doctor port jefferson ny! At one time prepared, but in exceptional situations may pierce or lift the corporate.... Dundy concurred thought that the present case was received position there was compensation... Position there was that compensation for disturbance was claimed by a company to recover compensation the! Associated in a wholesale grocery business and video galleries for each article Woolfson v Strathclyde Regional Council, [ ]!