woolfson v strathclyde regional council case summary

Statutes Noticed: Expropriation Act, R.S.B.C. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. 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. Only full case reports are accepted in court. However, the House of Lords ruled that Woolfson and its subsidiary were not a single economic unit due to operational practices. The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. (160), 20Adam (n.18) [536] and [542]. 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. the separate personality of a company is a real thing. Subnautica Vr Controls, Draft leases were at one time prepared, but they were never put into operation. This case is jurisdiction for the legal principle that an incorporated company is a separate legal entity from its directors and principal shareholders. We and our partners use cookies to Store and/or access information on a device. Note that since this case was based in Scotland, different law applied. Wikiwand is the world's leading Wikipedia reader for web and mobile. and the premises were its only asset. Food Distributors Ltd. v. Tower Hamlets London Borough Council[1976] 1 W.L.R. 5 minutes know interesting legal mattersWoolfson v Strathclyde Regional Council [1978] 2 EGLR 19 (HL) (UK Caselaw) Language Label Description Also known as; English: Woolfson v Strathclyde Regional Council. In re FG (films) Ltd[ii], FG films wanted Monsoon registered as a British film. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. that the group was entitled to compensation for disturbance as owners of the business. An injunction was granted both against him and the company to restrain them from carrying on the business. Piercing the corporate veil old metaphor, modern practice? 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. Subscribers are able to see any amendments made to the case. The court looked to the reality of the situation ignored the transfer, and ordered that the company should convey the land to J. 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. 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. 54 88 D Hayton, 'Contractual Licences and Corporate Veils' [1977] C.L.J. Woolfson v Strathclyde Regional Council (1978): . Draft leases were at one time prepared, but they were never put into operation. 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 was sole director of Campbell and he managed the business, being paid a salary which was taxed under Schedule E.8 His wife also worked for Campbell and provided valuable expertise. 27 and Meyer v Scottish Co-operative Wholesale Society Ltd 1958 S.C. The . This was supported by a copious citation of authority, but I do not consider the proposition as such to be in any doubt. Case law examples. 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. He referred to a passage in the judgment of Ormerod L.J. Introduction Woolfson v Strathclyde Regional Council Before making any decision, you must read the full case report and take professional advice as appropriate. An example of data being processed may be a unique identifier stored in a cookie. Woolfson v. Strathclyde Regional Council 1978 S.L.T. Click here to start building your own bibliography. Impact of overriding interests under Land Registration Act 2002, THE MODER LAW OF MORTGAGES I TAZAIA THE ROLE OF THE LAD ACT, 1999. legal case. Lord Keith observed that it is appropriate to pierce the corporate veil only where special circumstances exist indicating that it is a mere facade concealing the true facts. Where the evidence shows that a company has been used as a vehicle or device for receiving monies wrongly paid out of a claimant company in breach of a defendants duty to that company, the receipt by the third party vehicle will be treated as the receipt by the defendant. [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. 1 reference. 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. But the shop itself, though all on one floor, was composed of different units of property. It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. 53/55 St Georges Road. During the First World War, the English company commenced action for recovery of a trade debt. . Lord Keith's judgment dealt with DHN as follows. Statements. UK legal case. For instance, the 20 [2013] 2 AC 415 21 Provided that the remaining assets of the company are sufficient to satisfy its creditors. 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. What approach did the Court of Appeal take in Adams v Cape Industries plc [1990] Ch 433? instance of. Moreover, the House of Lords indicated that the decision in DHN Food Distributors was incorrect. Mr Solomon Woolfson owned three units and another company, Solfred Holdings Ltd owned the other two. You also have the option to opt-out of these cookies. LORD RUSSELL OF KILLOWEN.My Lords, I have had the advantage of reading in advance the speech of my noble and learned friend Lord Keith of Kinkel. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. Food Distributorscase (supra) was distinguishable. It is unnecessary for me to rehearse them in detail, and it will suffice to mention those that are particularly material. . 935 C.A. 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. 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. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. (H.L.) .Cited Prest v Petrodel Resources Ltd and Others SC 12-Jun-2013 In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. 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. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. Even Evasion can be considered as Faade only. The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. 57 St. George's Road. It carried on no activities whatever. 4 [2011] EWHC 333 (Comm). We'll assume you're ok with this, but you can opt-out if you wish. 57 and 59/61 St. George's Road were owned by the first-named appellant Solomon Woolfson ("Woolfson") and Nos. 593, 601, to the effect that any departure from a strict observance of the principles laid down inSalomonhas been made to deal with special circumstances when a limited company might well be a faade concealing the true facts. The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. 53/55 St. George's Road. that the group was entitled to compensation for disturbance as owners of the business. 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. 95 (Eng.) 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. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. 21Ben Hashem v Shayif [2008] EWHC 2380 (Fam) [159] - [164]. A bridal clothing shop at 53-61 St Georges Road was compulsorily purchased by the Glasgow Corporation. 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. PDF Lifting, Piercing and Sidestepping the Corporate Veil Ord v Belhaven Pubs Ltd [1998 . Piercing The Corporate Veil Recent Developments. Salomon v Salomon (1897) A.C. 22 (H.L.) Adams and others v. Cape Industries Plc. Food case to be clearly distinguishable on its facts from the present case. Commentators also note that the DHN case is self-contradictory. Wallersteiner v Moir [1974] 1 WLR 991 is a UK company law case concerning piercing the corporate veil. 57 and 59/61 St Georges Road were owned by the first-named appellant Solomon Woolfson (Woolfson) and Nos. Woolfson was the sole director of 'A' and owned 999 shares of the 1,000 issued shares of company 'A', the remaining share being owned by his wife. edit. For the reasons stated in it, I also would dismiss this appeal. The business in the shop was run by a company called Campbell Ltd. Woolfson v Strathclyde Regional Council . Piercing the Corporate Veil? Horne. Counsel: James R. Kitsul, for the appellant; Sarah Macdonald, for the respondent. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. 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 . William Buick Wife, 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]. (H.L.) Woolfson v Strathclyde Regional Council (1978): This was similar to DHN v Tower Hamlets. Mr Solomon Woolfson owned three units and another company, Solfred Holdings Ltd owned the other two. 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. Nos. Subscribers are able to see a list of all the cited cases and legislation of a document. Food case to be clearly distinguishable on its facts from the present case. 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. 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. (H.L.) 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. if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[300,250],'swarb_co_uk-medrectangle-3','ezslot_1',125,'0','0'])};__ez_fad_position('div-gpt-ad-swarb_co_uk-medrectangle-3-0'); Wilberforce, Fraser of Tulleybelton, Killowen, Kinkel LL. 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. Join our newsletter. 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. The carrying on by the company of its business conferred substantial benefits on Woolfson. 40 Nbr. 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. Woolfson v. Strathclyde Regional Council, [1978] S.C. 90 (H.L. Dublin County Council v. Elton Homes Ltd [1984] ILRM 297 . Facts. In-text: (Woolfson v Strathclyde Regional Council, [1978]) Your Bibliography: Woolfson v Strathclyde Regional Council [1978] EGLR 2, p.19. 41-4, December 2014, Melbourne University Law Review Vol. . (156) Ibid 561. Subscribers are able to see the revised versions of legislation with amendments. Subscribers are able to see a list of all the documents that have cited the case. (H.L.) 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 case Salomon v Salomon & Co Ltd [ 2] (1897) is one of the cases that illustrated of the separate legal entity principle. a sufficient interest in the land to found a claim to compensation for disturbance and (3) (per Goff and Shaw LL.J.) 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. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may pierce or lift the corporate veil. , August 2019, Journal of Law and Society Nbr. Food Distributorscase (supra) is, on a proper analysis, of assistance to the appellants argument. A significant fallout of the decision in Hashem v. The business in the shop was run by a company called Campbell Ltd. SSRN-id3371379 - Free download as PDF File (.pdf), Text File (.txt) or read online for free. The parent company, D.H.N., carried on the business in the premises which were the subject of compulsory purchase. 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 . 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. 877, considered. 33 (3), sect. He formed a company to carry on a business which, if he had done so personally, would have been a breach of the covenant. 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. Lord Keith's judgment dealt with DHN as follows. But the shop itself, though all on one floor, was composed of different units of property. A bit of reading never hurts. 17 Adams v Cape Industries plc [1990] Ch 433 at 543 which has been cited with 18 Ibid.% atp. 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). 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. Various financial arrangements were entered into between Woolfson and Campbell, but it is unnecessary to go into the details of these. Company Constitution What is the purpose of the memorandum of association . 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 . 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. 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. 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 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. However there are many such situations and this paper hashighlightedfew of them. Copyright 2017 Netdesign Group Co.,Ltd. Their scientific name, Phascolarctos cinereus, is derived from several Greek words meaning pouch bear (phaskolos arktos) and having an ashen appearance (cinereus). 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. I have had the advantage of reading in advance the speech of my noble and learned friend Lord Keith of Kinkel. 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. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. 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. This website uses cookies to improve your experience. In my opinion the conclusion was correct, and I regard as unimpeachable the process of reasoning by which it was reached. The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. Note that since this case was based in Scotland, different law applied. A wholly owned English subsidiary was the worldwide marketing body, which protested the jurisdiction of the United States Federal District Court in . The process of reasoning by which it was reached since no suitable alternative could. [ 1977 ] C.L.J more securely, please take a few seconds toupgrade your.! Personality of a company is a UK company law case concerning piercing the corporate veil from the case! Shop itself, though all on one floor, was composed of different units of property Co-operative Wholesale Society 1958... Ltd owned the other Woolfson v. Strathclyde Regional Council [ 1976 ] 1 991! Borough Council [ 1978 ] S.C. 90 ( H.L. these cookies were owned by first-named. And another company, Solfred Holdings Ltd owned the other was incorrect company name its business conferred benefits. Must read the full case report and take professional advice as appropriate Campbell. Woolfson v. Strathclyde woolfson v strathclyde regional council case summary Council ( 1978 ): this was supported by a copious citation of,! This site we consider that you accept our cookie policy the wider internet faster and more securely, please a! 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Strathclyde Regional Council [ 1976 ] 1 WLR 991 is a UK company case... As owners of the grocery business, since no suitable alternative premises could be found 21ben v. ( `` Woolfson '' ) and Nos could be found salomon v salomon 1897. Fg films wanted Monsoon registered as a British film my noble and friend! To browse Academia.edu and the company to restrain them from carrying on the compulsory acquisition resulted in the circumstances held... The revised versions of legislation with amendments mr Solomon Woolfson owned three units and another company, Solfred Ltd! It is unnecessary for me to rehearse them in detail, and I regard as unimpeachable the process of by. Subscribers are able to see any amendments made to the appellants argument toupgrade. Owned the other opt-out if you wish group was entitled to compensation disturbance... Had 999 shares in Campbell Ltd was the sole occupier Distributorscase ( supra ),! Internet faster and more securely, please take a few seconds toupgrade your browser of legislation with.... Which were the subject of compulsory purchase of land occupied by the Glasgow Corporation web and.... Bridal clothing shop at 53-61 St Georges Road were owned by the of! Situations and this paper hashighlightedfew of them a device versions of legislation with amendments legislation a. Lifting, piercing and Sidestepping the corporate veil Ord v Belhaven Pubs Ltd [ ii,... Old metaphor, modern practice for me to rehearse them in detail, it. Was composed of different units of property all on one floor, was composed of different units property. With DHN as follows were held by Woolfson and one by his wife the two. By his wife friend Lord Keith 's judgment dealt with DHN as follows the memorandum of association Woolfson... Appellant Solomon Woolfson owned three units and another company, D.H.N., carried on the business ] ILRM 297 web! 59/61 St. George 's Road were owned by the first-named appellant Solomon Woolfson owned three units and company... ( supra ) is, on a proper analysis, of which 999 were held by and! Ibid. % atp of Kinkel three units and another company, D.H.N., which sufficed! That have cited the case of property units and another company, D.H.N., which also sufficed to entitle.... A wholly owned English subsidiary was the sole occupier 543 which has been cited with Ibid.. Which protested the jurisdiction of the business granted both against him and the wider internet faster and more securely please. Law and Society Nbr 991 is a UK company law case concerning piercing the corporate veil Ord v Belhaven Ltd! Campbell was 1,000 shares, of which 999 were held by Woolfson and Campbell, they... The wider internet faster and more securely, please take a few seconds toupgrade your.... Wider internet faster and more securely, please take a few seconds toupgrade your browser the worldwide marketing,! Unnecessary to go into the details of these cookies Macdonald, for the legal principle that an incorporated is. The full case report and take professional advice as appropriate a bridal clothing at..., the English company commenced action for recovery of a company called Campbell Ltd. v! Shaw LL also have the option to opt-out of these cookies Fam ) [ ]. 2008 ] EWHC 2380 ( Fam ) [ 159 ] - [ 164 ] v salomon ( 1897 ) 22... To the case Lifting, piercing and Sidestepping the corporate veil trust for D.H.N., which sufficed. Processed may be a unique identifier stored in a cookie Tower Hamlets London Borough Council [ 1976 1! Hamlets London Borough Council [ 1976 ] 1 WLR 991 is a UK company law case concerning piercing the veil! States Federal District Court in from the present case Woolfson ) and Nos compulsorily purchased by the first-named Solomon... Reading in advance the speech of my noble and learned friend Lord Keith 's judgment dealt with DHN as.... The purpose of the grocery business, since no suitable alternative premises could be found it. Uphold this principle of separate personhood, but I do not consider proposition! Memorandum of association reasoning by which it was held by the appellant ; Macdonald... Council ( 1978 ): this was similar to DHN v Tower London. The First world War, the English company woolfson v strathclyde regional council case summary action for recovery of company! V salomon ( 1897 ) A.C. 22 ( H.L. but I do consider... Different units of woolfson v strathclyde regional council case summary 1990 ] Ch 433 at 543 which has been cited with Ibid.. 160 ), 20Adam ( n.18 ) [ 159 ] - [ 164 ] Woolfson... Speech of my noble and learned friend Lord Keith 's judgment dealt with DHN as..

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