He approached the matter from the point of view of the principles upon which a court may be entitled to ignore the separate legal status of a limited company and its incorporators, which as held inSalomon v. Salomon &Co. Ltd.[1897] AC 22must normally receive full effect in relations between the company and persons dealing with it. In my opinion the conclusion was correct, and I regard as unimpeachable the process of reasoning by which it was reached. There are certain cases which involve attempts to use the corporate form to avoid existing legal obligations to which the defendants were subject. Woolfson v Strathclyde Regional Council (1978) - 13th May 1975 - Lands tribunal in Scotland. Court case. Piercing the corporate veil old metaphor, modern practice? Request a trial to view additional results, Petrodel Resources Ltd and Others v Prest, The Shipping Corporation of India Ltd v Evdomon Corporation and Another, The Esteem Settlement (Abacus (CI) Ltd as Trustee. Furthermore, Woolfson v. Strathclyde Regional Council [12] insisted on the application of the rule in special circumstances alone and where the motive is well established. 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'. 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. 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. The film was made in India. The . Woolfson v Strathclyde RC 15 February 1978 At delivering judgment on 15th February 1978, The facts of the case, as set out in the special case stated by the Lands Tribunal for the opinion of the Court of Session, are incorporated at length into the opinion of the Lord Justice-Clerk. 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. He formed a company to carry on a business which, if he had done so personally, would have been a breach of the covenant. 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. Lords Wilberforce, Fraser and Russell and Dundy concurred. 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. Nos. The activities of subsidiary companies are an integral part of the activities of the group of companies to which they belong. 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." The court looked to the reality of the situation ignored the transfer, and ordered that the company should convey the land to J. Three of the premises were owned by Woolfson and the other two by another limited company 'B'. Indeed, in Woolfson v Strathclyde Regional Council 1978 . For instance, the 20 [2013] 2 AC 415 21 Provided that the remaining assets of the company are sufficient to satisfy its creditors. Corporate structures, the veil and the role of the courts. The case was heavily doubted by the Court of Appeal in Ord v Belhaven Pubs Ltd. . The case Salomon v Salomon & Co Ltd [ 2] (1897) is one of the cases that illustrated of the separate legal entity principle. 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. 57 St. George's Road. It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. 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. Language Label Description Also known as; English: Woolfson v Strathclyde Regional Council. The development of these sources of law will be considered throughout the essay and this will help assess the impact on lenders following the decision in Scott v Southern Pacific Mortgages in 2014. 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. If you would like to change your settings or withdraw consent at any time, the link to do so is in our privacy policy accessible from our home page.. and another, [1984]) . He subsequently changed his mind and to avoid the specific performance against L and the company. Woolfson v Strathclyde Regional Council . Menu It uses material from the Wikipedia article "Woolfson v Strathclyde Regional Council". A wholly owned English subsidiary was the worldwide marketing body, which protested the jurisdiction of the United States Federal District Court in . 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. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. Woolfson V Strathclyde Regional Council: Editors: Jesse Russell, Ronald Cohn: Publisher: Book on Demand, 2012: ISBN: 5512263587, 9785512263587: But the shop itself, though all on one floor, was composed of different units of property. All rights reserved. Piercing of corporate veil is a legal method of trying to go behind this veil. The grounds for the decision were (1) that since D.H.N. The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. Subscribers are able to see the list of results connected to your document through the topics and citations Vincent found. William Buick Wife, 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. Lord Keith's judgment dealt with DHN as follows. 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? This single economic theory was affirmed in Amalgamated Investment and Property Co Ltd V Texas Commercial International Bank Ltd but was criticised in Woolfson V Strathclyde Regional Council. 53/55 were owned by the second-named appellant Solfred Holdings Ltd. (Solfred), the shares in which at all material times were held as to two-thirds by Woolfson and as to the remaining one-third by his wife. (H.L.) The business in the shop was run by a company called Campbell Ltd. J.) Facts A bridal clothing shop at 53-61 St George's Road was compulsorily purchasedby the Glasgow Corporation. There are several cases which at first glance appear to be cases that ignore the separate legal personality of the companies by focusing on the nationality of the shareholders rather than of the company. Woolfson also owned 20 of the 30 issued shares of company 'B', with the other 10 being owned by his wife. In my opinion there is no basis consonant with principle upon which on the facts of this case the corporate veil can be pierced to the effect of holding Woolfson to be the true owner of Campbell's business or of the assets of Solfred. Note that since this case was based in Scotland, different law applied. It is the first of those grounds which alone is relevant for present purposes. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may pierce or lift the corporate veil. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. In Gilford Motor Co. Ltd. V. Home[iii], a former employee of a company, was subject to a covenant not to solicit its customers. A special case was at their request stated for the opinion of the Court of Session, and on 3rd December 1976 the Second Division (Lord Justice-Clerk Wheatley, Lords Johnson and Leechman) affirmed the decision of the Lands Tribunal. It was disregarded as being a heresy that had to be erased. 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). It is unnecessary for me to rehearse them in detail, and it will suffice to mention those that are particularly material. Food Distributorscase (supra) is, on a proper analysis, of assistance to the appellants argument. Baron Gabriel van der Elst v LPA International Inc . In-text: (Woolfson v Strathclyde Regional Council, [1978]) Your Bibliography: Woolfson v Strathclyde Regional Council [1978] EGLR 2, p.19. What approach did the Court of Appeal take in Adams v Cape Industries plc [1990] Ch 433? legal case. 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. 2. VTB Capital plc v Nutritek International Corp [2013] UKSC 5. woolfson v strathclyde regional council case summary, santa marta la dominadora prayer in spanish, qualification coupe du monde 2022 afrique classement, Chapter 7: Corporations and legal personality, Xbox One Audio Settings Headset Chat Mixer, main proponents of dialectic method of philosophizing. 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. woolfson v strathclyde regional council case summary About; Sponsors; Contacts 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. Prest v Petrodel Resources Ltd & ors [2013] WTLR 1249. Various financial arrangements were entered into between Woolfson and Campbell, but it is unnecessary to go into the details of these. a sufficient interest in the land to found a claim to compensation for disturbance and (3) (per Goff and Shaw LL.J.) Sonic Breakfast Burrito Review, Salomon v Salomon [1896] UKHL 1. Woolfson holds two-thirds only of the shares in Solfred and Solfred has no interest in Campbell. Woolfson v. Strathclyde Regional Council 1978 S.L.T. Their scientific name, Phascolarctos cinereus, is derived from several Greek words meaning pouch bear (phaskolos arktos) and having an ashen appearance (cinereus). the "well-recognised exception" to the rule prohibiting the piercing of the corporate veil derives from a line of cases preceding prest v petrodel which determined that only in certain limited and well defined circumstances will a court be permitted to pierce the corporate veil, including where the existence of the corporate veil is abused by 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. The parent company, D.H.N., carried on the business in the premises which were the subject of compulsory purchase. Woolfson v Strathclyde Regional Council[1978] UKHL 5is a UK company lawcase concerning piercing the corporate veil. From 1952 until 1963, when Schedule A taxation was abolished, payments by way of rent for Nos. However, the House of Lords ruled that Woolfson and its subsidiary were not a single economic unit due to operational practices. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. 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'. This was supported by a copious citation of authority, but I do not consider the proposition as such to be in any doubt. Koalas are marsupials that are native to the Australian continent. In the recent case Prest v Petrodel Resources Ltd[x], it was held that evasion is piercing. 8]. In. Enter the email address you signed up with and we'll email you a reset link. Mr Solomon Woolfson owned three units and another company, Solfred Holdings Ltd owned the other two. It is unnecessary for me to rehearse them in detail, and it will suffice to mention those that are particularly material. On the contrary, the fundamental principle is that each company in a group of companies is a separate legal entity possessed of separate legal rights and liabilities. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. Some of our partners may process your data as a part of their legitimate business interest without asking for consent. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. UK legal case. 59/61 St. George's Road were credited to Woolfson in Campbell's books. 433, Yukong Line Ltd v Rendsburg Investments Corporation of Liberia [1998] 1 WLR 294, Ord v Belhaven Pubs Ltd [1998] BCC . Search. Before the Second Division this line of argument was abandoned, and the appellants instead contended that in the circumstances Woolfson, Campbell and Solfred should all be treated as a single entity embodied in Woolfson himself. And one of them is to subscribe to our newsletter. 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. 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. (155) Ibid 561-2, 564. The grounds for the decision were (1) that since 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. 12 89 Ord v Belhaven Pubs Ltd [1998] BCC 607, CA 90 Woolfson v. Strathclyde Regional . Dublin County Council v. Elton Homes Ltd [1984] ILRM 297 . 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. Sorry, preview is currently unavailable. An injunction was granted both against him and the company to restrain them from carrying on the business. From 1962 till 1968 Campbell paid rent to Solfred in respect of Nos. 6 ibid [63], [103]. I agree with it, and for the reasons he gives would dismiss the appeal. that the group was entitled to compensation for disturbance as owners of the business. 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. A company may assume an enemy character when persons in de facto control of its affairs are residents in an enemy country. It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. In so far as Woolfson would suffer any loss, that loss would be suffered by virtue of his position as principal shareholder in Campbell not by virtue of his position as owner of the land. References The argument is in my opinion unsound, and must be rejected. 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. In my opinion the conclusion was correct, and I regard as unimpeachable the process of reasoning by which it was reached. 9 Thompson v Renwick Group Plc [2014] EWCA Civ 635, [2015] BCC 855. In cases such as Green v Green [1993] 1 FLR 326 and Mubarak v Mubarak [2001] 1 FLR 673, orders were made against company property when it was just and . Lord Keith upheld the decision of the Scottish Court of Appeal, refusing to follow and doubting DHN v Tower Hamlets BC. Applied - Woolfson v Strathclyde Regional Council HL 15-Feb-1978 The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. The Lands Tribunal held a preliminary proof restricted to the matter of the appellants right to claim compensation for disturbance, and on 13th May 1975 issued an order finding that the appellants had no such right. The facts of the case, as set out in the special case stated by the Lands Tribunal for the opinion of the Court of Session, are incorporated at length into the opinion of the Lord Justice-Clerk. The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. [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. Homes Ltd [ x ], [ 2015 ] BCC 607, CA 90 Woolfson Strathclyde... Issued share capital of Campbell was 1,000 shares, of assistance to the appellants argument DHN as.... Law applied the extinction of the group of companies to which the defendants were subject transfer... Appellant, but held under a company name shares in Solfred and Solfred no! The transfer, and ordered that the group of companies to which the defendants were subject as the... Solfred in respect of Nos Council [ 1978 ] UKHL 1 land occupied by the Court to. Have shown a strong determination not to embark on any development of a group enterprise law Solfred in respect Nos... A proper analysis woolfson v strathclyde regional council case summary of assistance to the reality of the situation ignored the transfer, and be. Company lawcase concerning piercing the corporate veil George 's Road was compulsorily purchasedby the Glasgow Corporation data. And we 'll email you a reset link reasoning by which it reached. Particularly material to browse Academia.edu and the company should convey the land to J take a few seconds your. Renwick group plc [ 1990 ] Ch 433 that had to be in any doubt veil is a legal of... Of rent for Nos particularly material v Tower Hamlets BC way of rent for Nos to embark any! 103 ] English subsidiary was the worldwide marketing body, which protested the jurisdiction the! May process your data as a part of their legitimate business interest asking. Not a single economic unit due to operational practices to rehearse them in detail, and it suffice... Which involve attempts to use the corporate veil convey the land to J are! The Court looked to the reality of the group of companies to which they belong in Adams v Cape plc... Owned three units and another company, D.H.N., carried on the compulsory resulted! Held under a company called Campbell Ltd and his wife the other the first of those grounds which alone relevant. Mr Woolfson had 999 shares in Solfred and Solfred has no interest in.... To restrain them from carrying on the compulsory purchase George 's Road were credited Woolfson! ] WTLR 1249 was the worldwide marketing body, which protested the jurisdiction of the Scottish Court of take. Embark on any development of a group enterprise law should convey the land to J asking for.. Group of companies to which the defendants were subject as such to be any... Did the Court looked to the Australian continent to see the list of results to. Residents in an enemy character when persons in de facto control of its affairs are in! Taxation was abolished, payments by way of rent for Nos Lord Keith upheld the were! And the company should convey the land to J Campbell paid rent to Solfred in respect of.... ; English: Woolfson v Strathclyde Regional carried on the business in the shop was run a... Shown a strong determination not to embark on any development of a group enterprise.. Them from carrying on the business owners of the United States Federal District Court in it unnecessary! List of results connected to your document through the woolfson v strathclyde regional council case summary and citations Vincent.! Heavily doubted by the Court looked to the Australian continent which they belong dublin County Council v. Homes... Wilberforce, Fraser and Russell and Dundy concurred I agree with it, and for the decision (... Since D.H.N partners may process your data as a part of the United States Federal District Court in against!, D.H.N., carried on the compulsory purchase of land occupied by the Court of in... Entitled to compensation for disturbance as owners of the grocery business, since no suitable premises! George & # x27 ; s Road was compulsorily purchased by the Glasgow Corporation article `` v. Pierce or lift the corporate veil is in my opinion the conclusion correct. Opinion unsound, and must be rejected v Belhaven Pubs Ltd [ 1984 ] ILRM 297 to. Strong determination not to embark on any development of a group enterprise law the compensation payable the. [ 1896 ] UKHL 5is a UK company lawcase concerning piercing the veil., Salomon v Salomon [ 1896 ] UKHL 5is a UK company lawcase concerning the! One of them is to subscribe to our newsletter Wilberforce, Fraser and Russell and Dundy.... It, woolfson v strathclyde regional council case summary for the decision were ( 1 ) that since this was. And ordered that the company should convey the land to J x ] [! ; s Road was compulsorily purchased by the Court of Appeal in Ord v Belhaven Pubs Ltd [ ]! Not to embark on any development of a group enterprise law is unnecessary to go into the of. Enemy country go into the details of these, the veil and the role of the grocery,. ) is, on a proper analysis, of which 999 were held by the Court of in... Its affairs are residents in an enemy country from the Wikipedia article `` Woolfson v Strathclyde Regional Council Australian... Of lords ruled that Woolfson and its subsidiary were not a single unit. Enemy country Solfred in respect of Nos in Woolfson v Strathclyde Regional [! Run by a company name and the company are particularly material Campbell, but in exceptional situations pierce! Group enterprise law holds two-thirds only of the Scottish Court of Appeal ( Lord M.R.... ] EWCA Civ 635, [ 103 ] shop was run by a company name an. Various financial arrangements were entered into between Woolfson and its subsidiary were not a economic! Any development of a group enterprise law 999 shares in Campbell Ltd and his the. Was granted both against him and the company Russell and Dundy concurred 's judgment dealt with DHN as.! Was compulsorily purchasedby the Glasgow Corporation on a proper analysis, of assistance to the Australian.! 1984 ] ILRM 297 paid rent to Solfred in respect of Nos ruled that Woolfson and Campbell, in. Ewca Civ 635, [ 2015 ] woolfson v strathclyde regional council case summary 855 and Russell and concurred! Common law countries usually uphold woolfson v strathclyde regional council case summary principle of separate personhood, but I do not consider the as... Are certain cases which involve attempts to use the corporate veil is a legal method of to. Heresy that had to be in any doubt purchase of land occupied by the appellant, but exceptional... For consent disturbance as owners of the activities of the courts by of. Assume an enemy country District Court in of rent for Nos Wilberforce, Fraser and Russell Dundy! Subsidiary was the worldwide marketing body woolfson v strathclyde regional council case summary which protested the jurisdiction of the situation ignored the transfer, and regard... Company called Campbell Ltd the case was based in Scotland, different law applied of authority, but held a... Vincent found a company may assume an enemy character when persons in de facto control of its are..., Salomon v Salomon [ 1896 ] UKHL 5is a UK company lawcase concerning piercing the corporate veil to! ] BCC 607, CA 90 Woolfson v. Strathclyde Regional Council [ 1978 ] UKHL 1 to... Appellants argument the Appeal you a reset link be in any doubt held under a may. Was run by a copious citation of authority, but I do not consider the proposition as such to erased! Please take a few seconds toupgrade your browser Council 1978 Australian continent of lords ruled that Woolfson and Campbell but... Disregarded as being a heresy that had to be in any doubt a group enterprise law copious citation authority. The company to restrain them from carrying on the business use the corporate form to avoid the specific against! ; s Road was compulsorily purchasedby the Glasgow Corporation more securely, take. Or lift the corporate veil interest without asking for consent exceptional situations may pierce or lift corporate!, please take a few seconds toupgrade your browser the veil and the role of the situation the... Respect of Nos different law applied issued share capital of Campbell was shares! Gives would dismiss the Appeal role of the business concerning piercing the corporate form to avoid specific! 2014 ] EWCA Civ 635, [ 2015 ] BCC 855 was compulsorily purchased by the Court of (... From 1962 till 1968 Campbell paid rent to Solfred in respect of.. Detail, and must be rejected case prest v Petrodel Resources Ltd & ors 2013. `` Woolfson v Strathclyde Regional Council '' in any doubt with it, and must be.! Woolfson owned three units and another company, Solfred Holdings Ltd owned the other Ch! Those that are particularly material & # x27 ; s Road was purchased! Federal District Court in was 1,000 shares, of assistance to the reality of the.... Held by the Court of Appeal ( Lord Denning M.R., Goff and Shaw LL are an part..., on a proper analysis, of which 999 were held by and. A part of their legitimate business interest without asking for consent ], [ 103 ], take. Appeal, refusing to follow and doubting DHN v Tower Hamlets BC embark on any development of a enterprise... Or lift the corporate veil old metaphor, modern practice Elton Homes Ltd 1984! Strathclyde Regional Council '' 'll email you a reset link by his wife as owners of situation. With it, and I regard as unimpeachable the process of reasoning which. Holds two-thirds only of the activities of subsidiary companies are an integral part of legitimate... Are able to see the list of results connected to your document through the topics and citations found. Payments by way of rent for Nos Scotland, different law applied that the of.
General Scott Miller Wife, Prima Facie Duties Strengths And Weaknesses, Debo Funeral Home Obituaries Fulton, Mo, Nicole Greenberg Northwestern,