There are certain cases which involve attempts to use the corporate form to avoid existing legal obligations to which the defendants were subject. Bronze had the same directors as D.H.N. Note that since this case was based in Scotland, different law applied. Topic 3 Corporate Personality 1 PART A SEPARATE LEGAL PERSON PRINCIPLE 2 The Salomon case: separate legal entity Company is a legal 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. Woolfson v Strathclyde Regional Council [viii] that the House of Lords considered that there is one circumstance in which the corporate veil can pierce, namely when there is one circumstance in which the corporate veil can be pierced, namely when there are special circumstances indicating a faade concealing the true facts. 961; [1996] CLC 990; (1996), 160 J.P. Rep. 1130; 146 New L.J. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. 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 . Facts; Judgment; See also; Notes; References; External links; Facts. Held: The House declined to allow the principal shareholder of a company to recover compensation for the . 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. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. The appellants argument before the Lands Tribunal proceeded on the lines that the business carried on in the premises was truly that of the appellants, which Campbell conducted as their agents, so that the appellants were the true occupiers of the premises and entitled as such to compensation for disturbance. 59/61 St. George's Road were credited to Woolfson in Campbell's books. Food Distributorscase (supra) was distinguishable. Introduction Woolfson v Strathclyde Regional Council 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. Ltd. v. Tower Hamlets must, we think, likewise be regarded as decisions on the relevant statutory provisions for compensation, even though these parts were somewhat broadly expressed, and the correctness of the decision was doubted by the House of Lords in Woolfson v. Strathclyde Regional . The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. It carried on no activities whatever. 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 . To view the purposes they believe they have legitimate interest for, or to object to this data processing use the vendor list link below. 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. Appellate Committee of the House of Lords. Jones v. Lipman and Another[iv], L Agreed to sell certain land to J. Woolfson v Strathclyde Regional Council . Indeed, in support of this part of his argument Mr Ashe referred to the case of Woolfson v. Strathclyde Regional Council [1978] SLT 159, and DHN Ltd v Woolfson v Strathclyde Regional Council - WikiVisually Secondly it might be argued that the court should pierce the corporate veil, for instance, it should conclude that the company structure is . The carrying on by the company of its business conferred substantial benefits on Woolfson. 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. 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. 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 . 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. I agree with it and with his conclusion that this appeal be dismissed. 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. 0 references. 5 Woolfson v Strathclyde Regional Council [1978] SC (HL) 90. Woolfson cannot be treated as beneficially entitled to the whole share-holding in Campbell, since it is not found that the one share in Campbell held by his wife is held as his nominee. Food Products Ltd. V. Tower Hamlets[v], it has been said that the Courts may disregard Salomons case whenever it is just and equitable to do so. 33 (4) [para. Please contact Technical Support at +44 345 600 9355 for assistance. Indeed, in Woolfson v Strathclyde Regional Council 1978 . Woolfson v Strathclyde Regional Council: HL 15 Feb 1978 - swarb.co.uk 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. 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. Sham companies. 2023 vLex Justis Limited All rights reserved, VLEX uses login cookies to provide you with a better browsing experience. 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. There the company that owned the land was the wholly owned subsidiary of the company that carried on the business. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. We do not provide advice. 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. Lifting the Corporate Veil 287 which it already possessed. From 1962 till 1968 Campbell paid rent to Solfred in respect of Nos. Piercing The Corporate Veil Recent Developments. Localish Restaurant Locations, I agree with it, and for the reasons he gives would dismiss the appeal. Adams and others v. Cape Industries Plc. 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 Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. was in a position to control its subsidiaries in every respect, it was proper to pierce the corporate veil and treat the group as a single economic entity for the purpose of awarding compensation for disturbance; (2) that if the companies were to be treated as separate entities, there was by necessary implication from the circumstances an agreement between D.H.N. 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. 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. 2023 Legalease Ltd. All rights reserved, Registered company in England & Wales No. Join our newsletter. 17]. 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 . This website uses cookies to improve your experience while you navigate through the website. Subscribers are able to see a list of all the documents that have cited the case. 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. Food case to be clearly distinguishable on its facts from the present case. The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. (H.L.) Thus it noted (paragraph 48) the unanimous (albeit obiter) view of the House of Lords in, (2) SA 669 (A) at 675D-E; Salomon v A Salomon & Co Ltd [1897] AC 22 ([1895 - 9] All ER Rep 33); Woolfson v Strathclyde Regional Council. In times of war it is illegal to trade with the enemy. 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. Draft leases were at one time prepared, but they were never put into operation. It was maintained before this House that the conclusion of the Lord Justice-Clerk was erroneous. 33 (1), sect. However, the House of Lords did not elaborate on the nature of such special circumstances or the meaning of faade. 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. Denning refers to the subsidiaries as . 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 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. Denning refers to the subsidiaries as . Lords Wilberforce, Fraser and Russell and Dundy concurred. The DHN case approach has become less popular since then. (158) Ibid 564. J.) There are certain cases which involve attempts to use the corporate form to avoid existing legal obligations to which the defendants were subject. I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend Lord Keith of Kinkel. 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