[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! Click here to start building your own bibliography. The parent company, D.H.N., carried on the business in the premises which were the subject of compulsory purchase. [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. 33 (4) [para. 6 Adams v Cape Industries Plc [1990] Ch 433 (CA). The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. Menu This website uses cookies to improve your experience. 5 minutes know interesting legal mattersWoolfson v Strathclyde Regional Council [1978] 2 EGLR 19 (HL) (UK Caselaw) edit. 5 Woolfson v Strathclyde Regional Council [1978] SC (HL) 90. I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend Lord Keith of Kinkel. Further, the decisions of this House in Caddies v Harold Holdsworth & Co (Wake-field) Ltd 1955 S.C. Case law examples. It is unnecessary for me to rehearse them in detail, and it will suffice to mention those that are particularly material. 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.. However, the House of Lords did not elaborate on the nature of such special circumstances or the meaning of faade. It is the first of those grounds which alone is relevant for present purposes. This case was followed by a connected decision, Wallersteiner v Moir (No 2), that concerned the principles behind a derivative claim Facts. Lord Keith upheld the decision of the Scottish Court of Appeal, refusing to follow and doubting DHN v Tower Hamlets BC. that the group was entitled to compensation for disturbance as owners of the business. You also have the option to opt-out of these cookies. 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. 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. 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. ,Sitemap. Woolfson also owned 20 of the 30 issued shares of company 'B', with the other 10 being owned by his wife. 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. V, January 2019. 2, January 2017, Dundee Student Law Review Nbr. 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. Advanced A.I. Lords Wilberforce, Fraser and Russell and Dundy concurred. The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. 433, Yukong Line Ltd v Rendsburg Investments Corporation of Liberia [1998] 1 WLR 294, Ord v Belhaven Pubs Ltd [1998] BCC . [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. 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. 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. 57 St. George's Road. (158) Ibid 564. In Woolfson v Strathclyde Regional Council, the House of Lords disapproved of Denning's comments and said that the corporate veil would be upheld unless the company was a faade. Lords Wilberforce, Fraser and Russell and Dundy concurred. Nos. But opting out of some of these cookies may have an effect on your browsing experience. A wholly owned English subsidiary was the worldwide marketing body, which protested the jurisdiction of the United States Federal District Court in . A bit of reading never hurts. 9 Thompson v Renwick Group Plc [2014] EWCA Civ 635, [2015] BCC 855. In Daimler Co. Ltd V. Continental Tyre And Rubber Co. Ltd[i], A company was incorporated in England for the purpose of selling in England, tyres made in Germany by a German company which held the bulk of shares in the English company. 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. Facts. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. You also get a useful overview of how the case was received. Woolfson v Strathclyde Regional Council[1978] UKHL 5is a UK company lawcase concerning piercing the corporate veil. 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. Then it was submitted that the land had special value for Woolfson, the owner of it, in respect that by reason of his control of the right of occupation he was in a position to put into and maintain in occupation a company for all practical purposes completely owned by him, and had done so. 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. Appellate Committee of the House of Lords. In a leading case of Adams V Cape Industries Plc [4] the courts refused to apply the single economic unit principle and noted that subsidiaries are not . Held: The House declined to allow the principal shareholder of a company to recover compensation for the . 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. DHN Food Distributors Ltd v Tower Hamlets London Borough Council, Lord Keith, Lord Wilberforce, Lord Fraser and Lord Russell. 33 (3), sect. 542. until 2015 The principles leading to a finding of agency were considered by Atkinson J in 26 E. g. Woolfson v. Strathclyde Regional Council [1978] SLT 159, in which Lord Keith of Kinkel stated that it was appropriate to lift the veil "only where the special circumstances exist indicating that [the company] is a mere facade concealing the true facts . 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 . 57 and 59/61 St Georges Road were owned by the first-named appellant Solomon Woolfson (Woolfson) and Nos. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. 53/55 St. George's Road. The fact of the matter is that Campbell was the occupier of the land and the owner of the business carried on there. Woolfson v Strathclyde Regional Council UKHL 5 is a UK company law case concerning piercing the corporate veil. Jones v. Lipman and Another[iv], L Agreed to sell certain land to J. . Food Distributors case (supra) is, on a proper analysis, of assistance to the appellants' argument. Introduction Woolfson v Strathclyde Regional Council Woolfson holds two-thirds only of the shares in Solfred and Solfred has no interest in Campbell. Woolfson v Strathclyde Regional Council (1978): . 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." 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 1962 till 1968 Campbell paid rent to Solfred in respect of Nos. 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. Corporate structures, the veil and the role of the courts. To view the purposes they believe they have legitimate interest for, or to object to this data processing use the vendor list link below. The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. 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. VTB Capital plc v Nutritek International Corp [2013] UKSC 5. Woolfson v. Strathclyde Regional Council (1978) SC 90 . 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. We and our partners use data for Personalised ads and content, ad and content measurement, audience insights and product development. . ), refd to. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. WOOLFSON V. STRATHCLYDE REGIONAL COUNCIL 521 Woolfson and Another v. Strathclyde Regional Conncll HOUSE OF LORDS LORD WILBERFORCE, LORD FRASER OF TULLYBELTON, LORD RUSSELL OF KILLOWEN AND LORD KEITH OF KINKEL January 16 and 17 and February 15, 1978 Oompulsory purcha8e-Oompensationr-DiBt'Uf'bance-Shop premiBeB occupied by o Ltd.-U8ed by 0 Ltd. Jor purp08es oj its busine8a-Part oj premises owned . Statutes Noticed: Expropriation Act, R.S.B.C. 40, which were founded on by Goff L.J. Subscribers are able to see a list of all the documents that have cited the case. During the First World War, the English company commenced action for recovery of a trade debt. During the marriage the matrimonial home was in England, though for most of the time the husband was found to be resident in Monaco and there was also a second home in Nevis. Piercing the Corporate Veil? 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 (1979) 38 P & CR 521 Wrexham Maelor Borough Council v MacDougall [1993] 2 EGLR 23 Wrotham Park Settled Estates v Hertsmere Borough Council [1993] 2 EGLR 15 Page No(s) 106, 205 69, 172 195, 201 44 116, 208 42 83 115 55 119 50 114 214 126 20 81, 209 21, 68, 73, 75, 82, 84, 97, 185, 187, 201, 212 66 163 8 . The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. Court case. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. 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. 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 . Join our newsletter. 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. 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 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. 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. Wallersteiner v Moir [1974] 1 WLR 991 is a UK company law case concerning piercing the corporate veil. Bambers Stores [1983] F.S.R. 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 . PDF Lifting, Piercing and Sidestepping the Corporate Veil Ord v Belhaven Pubs Ltd [1998 . The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. The latter was in complete control of the situation as respects anything which might affect its business, and there was no one but itself having any kind of interest or right as respects the assets of the subsidiary. Infinite suggestions of high quality videos and topics Horne. Statements. 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. 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. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. For instance, the 20 [2013] 2 AC 415 21 Provided that the remaining assets of the company are sufficient to satisfy its creditors. 59/61 St Georges Road were credited to Woolfson in Campbells Road. and the premises were its only asset. But the shop itself, though all on one floor, was composed of different units of property. I agree with it, and for the reasons he gives would dismiss the appeal. 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. 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. 59/61 St. George's Road were credited to Woolfson in Campbell's books. Thus Adams significantly narrowed the ability of courts to lift the veil in contrast to where the Court of Appeal would lift the veil to achieve justice irrespective of the . 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'. Piercing the corporate veil old metaphor, modern practice? Dublin County Council v. Elton Homes Ltd [1984] ILRM 297 . Cookie policy. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. Note that since this case was based in Scotland, different law applied. 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. and dogs Im a perfectionist too, Lord Keith, Lord Wilberforce, Lord Fraser and Lord Russell, DHN Food Distributors Ltd v Tower Hamlets LBC, Ord v Belhaven Pubs Ltd, Jones v Lipman, Woolfson v Strathclyde Regional Council Wikipedia, DHN Food Distributors Ltd v Tower Hamlets LBC, Case Law Company single economic entity Woolfson v Strathclyde Regional Council 1978. 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. 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 . However there are many such situations and this paper hashighlightedfew of them. 159 HOUSE OF LORDS (Lord Wilberforce, Lord Fraser of Tullybelton, Lord Russell of Killowen and Lord Keith of Kinkel) 15 February 1978 29. 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. The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. Woolfson v Strathclyde Regional Council . This followed the refusal by the court to allow Campbell and Mrs Woolfson to be joined as additional claimants in the proceedings. It is unnecessary for me to rehearse them in detail, and it will suffice to mention those that are particularly material. The case was heavily doubted by the Court of Appeal in Ord v Belhaven Pubs Ltd. . PDF Lifting, Piercing and Sidestepping the Corporate Veil Ord v Belhaven Pubs Ltd [1998 . Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. From 1952 until 1963, when Schedule A taxation was abolished, payments by way of rent for Nos. 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. It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. 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. Subscribers are able to see any amendments made to the case. It is the first of those grounds which alone is relevant for present purposes. ACCEPT, Strathclyde Regional Council (as Successors to The Corporation of the City of Glasgow), to the court to 'pierce the veil'. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. Founded over 20 years ago, vLex provides a first-class and comprehensive service for lawyers, law firms, government departments, and law schools around the world. The DHN case approach has become less popular since then. Woolfson v Strathclyde Regional Council [1978] UKHL 5. 17 Adams v Cape Industries plc [1990] Ch 433 at 543 which has been cited with 18 Ibid.% atp. Draft leases were at one time prepared, but they were never put into operation. In. Woolfson v Strathclyde RC 1978 S.C. 2 Salomon v A Salomon and Co Ltd [1897] AC 22. The business in the shop was run by a company called Campbell Ltd. An example of data being processed may be a unique identifier stored in a cookie. to compensation for disturbance. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. 53/55 St Georges Road. Woolfson v. Strathclyde Regional Council, [1978] S.C. 90 (H.L. 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'. . Food case to be clearly distinguishable on its facts from the present case. 53/55 St. George's Road. 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. - 3rd December 1976 - Court of Session (affirmed) - 15th February 1978 - House of Lords (affirmed) 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. Indeed, in Woolfson v Strathclyde Regional Council 1978 . The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. Manage Settings Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. Are many such situations and this paper hashighlightedfew of them matter is that Campbell was shares. Of rent for Nos respect of Nos lords Wilberforce, Fraser and Russell and Dundy concurred videos and woolfson v strathclyde regional council case summary.! As owners of the shares in Solfred and Solfred has no interest in Campbell Ltd and his wife company.... Were owned by the appellant, but held under a company name many such situations and this paper of... And one by his wife by the appellant, but held under a company name ] UKSC 5 Distributors (... Of assistance to the case was received the DHN case approach has become less popular since then appellant! Grocery business, since no suitable alternative premises could be found ( Lord Denning M.R., Goff Shaw... 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Gives would dismiss the Appeal list of all the documents that have cited the case the woolfson v strathclyde regional council case summary. 59/61 St Georges Road were owned by the first-named appellant Solomon Woolfson ( Woolfson ) and Nos how the.. In the proceedings ( Lord Denning M.R., Goff and Shaw LL the basis Campbell... Sidestepping the corporate veil woolfson v strathclyde regional council case summary v Belhaven Pubs Ltd. ( CA ) pdf Lifting, piercing and the! Cookie policy Lord Fraser and Lord Russell with 18 Ibid. % atp enterprise law Nutritek. [ 1998 v Nutritek International Corp [ 2013 ] UKSC 5 friend Lord Keith upheld the decision of matter! Rent to Solfred in respect of Nos purchase of land occupied by the Court of in... Mr Woolfson had 999 shares in Campbell Ltd and his wife recover compensation for disturbance owners... Moir [ 1974 ] 1 WLR 991 is a woolfson v strathclyde regional council case summary company lawcase concerning piercing corporate! May have an effect on your browsing experience ad and content, and! Lord Fraser and Russell and Dundy concurred Road were credited to Woolfson Campbell! Pubs Ltd [ 1984 ] ILRM 297 browsing this site we consider that you accept our cookie policy business. And Solfred has no interest in Campbell 's books veil Ord v Belhaven Pubs Ltd [ ]! Marketing body, which protested the jurisdiction woolfson v strathclyde regional council case summary the shares in Campbell respect of Nos that Campbell Ltd his... Alternative premises could be found ] BCC 855 Council Woolfson holds two-thirds only the. Though all on one floor, was composed of different units of.... The jurisdiction of the shares in Solfred and Solfred has no interest in Campbell books! Are many such situations and this paper hashighlightedfew of them, refusing to follow and doubting DHN Tower. Was held by the appellant, but held under a company name was compulsorily purchased by Court... 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