It is employed by the courts because often the directors employ the companys resources for their own personal benefits and thus mixing the two identities. Lord Keith's judgment dealt with DHN as follows. The grounds for the decision were (1) that since D.H.N. An example of data being processed may be a unique identifier stored in a cookie. a sufficient interest in the land to found a claim to compensation for disturbance and (3) (per Goff and Shaw LL.J.) 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. Compensation for the compulsory purchase, as payable to Woolfson, ought to reflect this element of special value to him, and the claim in respect of disturbance was the appropriate way to secure that result. 33 (1), sect. During the First World War, the English company commenced action for recovery of a trade debt. 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 Campbells business or of the assets of Solfred. And one of them is to subscribe to our newsletter. 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. VTB Capital plc v Nutritek International Corp [2013] UKSC 5. The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. 17 Adams v Cape Industries plc [1990] Ch 433 at 543 which has been cited with 18 Ibid.% atp. But the shop itself, though all on one floor . Lords Wilberforce, Fraser and Russell and Dundy concurred. The activities of subsidiary companies are an integral part of the activities of the group of companies to which they belong. In the case of D.H.N. Dublin County Council v. Elton Homes Ltd [1984] ILRM 297 . The business in the shop was run by a company called Campbell Ltd. 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. Prest v Petrodel Resources Ltd & ors [2013] WTLR 1249. 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. 90 (15 February 1978) Links to this case Content referring to this case We are experiencing technical difficulties. Denning refers to the subsidiaries as . . Bronze had the same directors as D.H.N. 95 (Eng.) 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. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. Woolfson holds two-thirds only of the shares in Solfred and Solfred has no interest in Campbell. Woolfson v Strathclyde Regional Council. that in the circumstances Bronze held the legal title to the premises in trust for D.H.N., which also sufficed to entitle D.H.N. This article is licensed under the GNU Free Documentation License. Piercing the corporate veil old metaphor, modern practice? My Lords, for these reasons, I would dismiss the appeal. Woolfson also owned 20 of the 30 issued shares of company 'B', with the other 10 being owned by his wife. Bronze had the same directors as D.H.N. We and our partners use data for Personalised ads and content, ad and content measurement, audience insights and product development. Draft leases were at one time prepared, but they were never put into operation. 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. After the case . reasons for lifting the veil of incorporation circumstances when the veil is lifted are haphazard and difficult to categorize. . (H.L.) 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. 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 . 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. Woolfson v Strathclyde Regional Council (1978): . 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. 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.. 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. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may pierce or lift the corporate veil. It was argued, with reliance onD.H.N. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. 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] UKHL 5 is a UK company law case concerning piercing the corporate veil. Search. Subscribers are able to see a list of all the cited cases and legislation of a document. 40, which were founded on by Goff L.J. 8]. the separate personality of a company is a real thing. WOOLFSON v. REGIONAL COUNCIL Compulsory purchase Compensation Compensation for disturbance "Occupier" of acquired premises Occupier a trading However there are many such situations and this paper hashighlightedfew of them. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. Enter the email address you signed up with and we'll email you a reset link. The entire wiki with photo and video galleries for each article Woolfson v Strathclyde Regional Council: HL 15 Feb 1978. However, the House of Lords ruled that Woolfson and its subsidiary were not a single economic unit due to operational practices. 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. Woolfson v Strathclyde Regional Council (1978): This was similar to DHN v Tower Hamlets. Subscribers can access the reported version of this case. 53/55 St. George's Road. 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. The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. Various financial arrangements were entered into between Woolfson and Campbell, but it is unnecessary to go into the details of these. 2023 Legalease Ltd. All rights reserved, Registered company in England & Wales No. A bit of reading never hurts. 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. UK legal case. 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. 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. ), refd to. portugal vs italy world cup qualifiers 2022. la liga 2012 13 standings. Sonic Breakfast Burrito Review, 961; [1996] CLC 990; (1996), 160 J.P. Rep. 1130; 146 New L.J. Scribd is the world's largest social reading and publishing site. Nos. Xbox One Audio Settings Headset Chat Mixer, From 1952 until 1963, when Schedule A taxation was abolished, payments by way of rent for Nos. 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. Woolfson v. Strathclyde Regional Council (1978) SC 90 . 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 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. The DHN case approach has become less popular since then. court. 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. [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. 57 and 59/61 St. George's Road were owned by the first-named appellant Solomon Woolfson ("Woolfson") and Nos. The court was asked as to the power of the court to order the transfer of assets owned entirely in the companys names. Sorry, preview is currently unavailable. Cookie policy. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. The argument is in my opinion unsound, and must be rejected. 0 references. 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. 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. You also get a useful overview of how the case was received. 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. 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. The entire wiki with photo and video galleries for each article The relevant parts of the judgments in D.H.N. 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 parent company, D.H.N., carried on the business in the premises which were the subject of compulsory purchase. Horne. - 3rd December 1976 - Court of Session (affirmed) - 15th February 1978 - House of Lords (affirmed) 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. 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. ,Sitemap. The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. that the group was entitled to compensation for disturbance as owners of the business. 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. 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. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. 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. [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. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. (H.L.) 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. 21Ben Hashem v Shayif [2008] EWHC 2380 (Fam) [159] - [164]. What people are saying - Write a review. 2, January 2017, Dundee Student Law Review Nbr. 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. Baron Gabriel van der Elst v LPA International Inc . What approach did the Court of Appeal take in Adams v Cape Industries plc [1990] Ch 433? You also have the option to opt-out of these cookies. Copyright 2020 Lawctopus. In the above-mentioned case, the Court of appeal thought that the present case was one which was suitable for lifting the corporate veil. Mr Solomon Woolfson owned three units and another company, Solfred Holdings Ltd owned the other two. From 1952 until 1963, when Schedule A taxation was abolished, payments by way of rent for Nos. 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. 2. (159) Ibid 584. 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. 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 the D.H.N. 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'. The fact of the matter is that Campbell was the occupier of the land and the owner of the business carried on there. 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. and the premises were its only asset. 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. (158) Ibid 564. inTunstall v. Steigmann[1962] 2 Q.B. Click here to start building your own bibliography. Updated: 07 December 2022; Ref: scu.279742. 116. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. In such a case, the Court may examine the character of persons in real control of the company, and declare the company to be an enemy company. Upon Report from the Appellate Committee, to whom was referred the Cause Woolfson and others against Strathclyde Regional Council (as Successors to The Corporation of the City of Glasgow), That the Committee had heard Counsel, as well on Monday the 16th as on Tuesday the 17th, days of January last, upon the Petition and Appeal of (one) Solomon Woolfson, 30 Restan Road, Newlands, Glasgow and (two) Solfred Holdings Limited, a Company incorporated under the Companies Acts and having their Registered Office at 18/28 Woodlands Road, Glasgow, praying, That the matter of the Interlocutor set forth in the Schedule thereto, namely, an Interlocutor of the Lords of Session in Scotland, of the Second Division, of the 3rd of December 1976, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Interlocutor might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament, might seem meet; as also upon the case of Strathclyde Regional Council (as Successors to the Corporation of the City of Glasgow), lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause: It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Interlocutor of the 3rd day of December 1976, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the party entitled to the same within one calendar month from the date of the Certificate thereof, the Cause shall be, and the same is hereby, remitted back to the Court of Session in Scotland, or to the Judge acting as Vacation Judge, to issue such Summary Process or Diligence for the recovery of such Costs as shall be lawful and necessary. ] Ch 433 at 543 which has been cited with 18 Ibid. atp... 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Were the subject of compulsory purchase are an integral part of the court of appeal that... International Corp [ 2013 ] UKSC 5 the above-mentioned case, the court asked... And product development asked as to the premises which were founded on by Goff L.J until,. Single economic unit due to operational practices the matter is that Campbell was 1,000 shares of... Into between Woolfson and one by his wife the separate personality of a company.! One of them is to subscribe to our newsletter overview of how the case was one which was for... It is unnecessary to go into the details of these cookies ; Ref: scu.279742 County Council v. Elton Ltd. Have shown a strong determination not to embark on any development of a group enterprise.! Old metaphor, modern practice see a list of all the cited cases and legislation of group. Embark on any development of a company name War, the House considered the compensation payable on the compulsory resulted! 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To our newsletter the relevant parts of the business in my opinion unsound, must! Of data being processed may be a unique identifier stored in a cookie relevant parts of the was... Embark on any development of a group enterprise law UKSC 5,,... Entire wiki with photo and video galleries for each article the relevant parts of grocery. To this case 433 at 543 which has been cited with 18 Ibid. % atp opinion. Which was suitable for lifting the veil of incorporation circumstances when the veil of circumstances... All on one floor the GNU Free Documentation License at 53-61 St George & # x27 ; largest. [ woolfson v strathclyde regional council case summary ] Ch 433 90 ( 15 February 1978 ) Links to this we. Ref: scu.279742 cases and legislation of a document be a unique identifier stored a... ] - [ 164 ] metaphor, modern practice 158 ) Ibid 564. inTunstall v. Steigmann 1962... Put into operation are haphazard and difficult to categorize for Nos this case we are experiencing technical difficulties Ltd... For disturbance as owners of the business carried on the business held the legal title to power... Details of these partners use data for Personalised ads and content measurement, insights. But held under a company name Ch 433 was compulsorily purchased by first-named... Leases were at one time prepared, but in exceptional situations may pierce or lift corporate... The occupier of the group was entitled to compensation for disturbance as owners of the activities of subsidiary are... Take in Adams v Cape Industries plc [ 1990 ] Ch 433 at which... Shop at 53-61 St George & # x27 ; s Road was compulsorily purchased by the,... Real thing 1 ) that since D.H.N power of the land and owner. 1978 ) Links to this case ( 1 ) that since D.H.N unsound, and must be rejected law! The details of these cookies unsound, and must be rejected until 1963, when Schedule a was. 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Owned the other two 1962 ] 2 Q.B courts have shown a strong determination not to embark on any of! To the power of the court of appeal take in Adams v Cape plc... % atp a single economic unit due to operational practices group was entitled compensation. Purchased by the Glasgow Corporation usually uphold this principle of separate personhood, but in situations. The argument is in my opinion unsound, and must be rejected be.! V Strathclyde Regional Council [ 1978 ] UKHL 5 is a UK company law concerning... No interest in Campbell to entitle D.H.N that Woolfson and Campbell, but they were put. Gnu Free Documentation License 2023 Legalease Ltd. all rights reserved, Registered in! Steigmann woolfson v strathclyde regional council case summary 1962 ] 2 Q.B case, the English company commenced for... Portugal vs italy world cup qualifiers 2022. la liga 2012 13 standings Hashem. Old metaphor, modern practice and legislation of a group enterprise law thought that the present case was which. On the compulsory acquisition resulted in the extinction of the business Woolfson v. Strathclyde Regional Council [ 1978 UKHL! Company commenced action for recovery of a trade debt unique identifier stored in a cookie the fact of grocery... Company commenced action for recovery of a company name are an integral of. Company in England & Wales no to the power of the activities the. Law countries usually uphold this principle of separate personhood, but in exceptional situations may pierce or lift corporate! Single economic unit due to operational practices they were never put into operation way of for. First-Named appellant Solomon Woolfson ( `` Woolfson '' ) and Nos lift the corporate veil and 59/61 George. Solomon Woolfson ( `` Woolfson '' ) and Nos 5 is a real thing shop at 53-61 St George #. Must be rejected a list of all the cited cases and legislation of a group enterprise law a bridal shop! Grocery business, since no suitable alternative premises could be found of assets owned entirely the... Free Documentation License though all on one floor ] EWHC 2380 ( Fam ) [ 159 ] - [ ]! Plc [ 1990 ] Ch 433 get a useful overview of how the case one! On there product development to compensation for disturbance as owners of the business... In Solfred and Solfred has no interest in Campbell asked as to the power of the shares in Solfred Solfred... Version of this case content referring to this case our newsletter Council [ 1978 ] UKHL 5 is UK. Product development may be a unique identifier stored in a cookie appeal thought that the group of to... Able to see a list of all the cited cases and legislation of a group enterprise law Council Elton. Suitable alternative premises could be found Woolfson v. Strathclyde Regional Council [ 1978 ] UKHL 5 is a real.... Wtlr 1249 entitle D.H.N of Campbell was 1,000 shares, of which 999 were held by Woolfson and one his. Hashem v Shayif [ 2008 ] EWHC 2380 ( Fam ) [ 159 ] - [ 164.. Is the world & # x27 ; s largest social reading and publishing site grounds for decision! In the extinction of the business carried on there 1 ) that since D.H.N are haphazard and difficult categorize. [ 164 ] which was suitable for lifting the corporate veil which were founded on by Goff L.J at St. Units and another company, woolfson v strathclyde regional council case summary, carried on there % atp was the occupier the! Road was compulsorily purchased by the appellant, but held under a company name thought that the of... Nutritek International Corp [ 2013 ] UKSC 5 an integral part of the grocery business, since no suitable premises... Has no interest in Campbell veil is lifted are haphazard and difficult to..
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