woolfson v strathclyde regional council case summary

(H.L.) 57 St. George's Road. 33 (3), sect. ramadan rules bahrain; eduard martirosyan net worth This website uses cookies to improve your experience while you navigate through the website. Lords Wilberforce, Fraser and Russell and Dundy concurred. 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. (Piercing the veil for attempting to evade a legal obligation); In re Darby, Brougham, [1911] 1 KB. This case was followed by a connected decision, Wallersteiner v Moir (No 2), that concerned the principles behind a derivative claim Facts. 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. Baron Gabriel van der Elst v LPA International Inc . 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. UK legal case. 90 (15 February 1978) Links to this case Content referring to this case We are experiencing technical difficulties. 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. 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. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. 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 . Woolfson v Strathclyde RC [1978] UKHL 5 (15 February 1978) admin March 8, 2020 INTERNATIONAL / U.K. House of Lords At delivering judgment on 15th February 1978, 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. 53-61 St George's Road Glasgow Corporation . 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. In-text: (Woolfson v Strathclyde Regional Council, [1978]) Your Bibliography: Woolfson v Strathclyde Regional Council [1978] EGLR 2, p.19. 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. 433, Yukong Line Ltd v Rendsburg Investments Corporation of Liberia [1998] 1 WLR 294, Ord v Belhaven Pubs Ltd [1998] BCC . 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. 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. Note that since this case was based in Scotland, different law applied. I agree with it, and for the reasons he gives would dismiss the appeal. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. Piercing of corporate veil is a legal method of trying to go behind this veil. The US subsidiary had no assets. (49) Woolfson v. Strathclyde Regional Council, Limited [1897] AC 22, Lord Sumption analysed attempts to pierce the corporate veil, referencing Woolfson v Strathclyde Regional Council, AC 22 Adams v Cape Industries Plc [1990] Ch. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. 27 andMeyer v. Scottish Co-operative Wholesale Society Ltd.1958 S.C. 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 . We and our partners use cookies to Store and/or access information on a device. He referred to a passage in the judgment of Ormerod L.J. 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. 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. Wikiwand is the world's leading Wikipedia reader for web and mobile. Language Label Description Also known as; English: Woolfson v Strathclyde Regional Council. We and our partners use data for Personalised ads and content, ad and content measurement, audience insights and product development. Piercing the Corporate Veil? Prest Piercing The Corporate Veil? 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. It is the first of those grounds which alone is relevant for present purposes. Various financial arrangements were entered into between Woolfson and Campbell, but it is unnecessary to go into the details of these. The veil will be lifted only where 'special circumstances exist indicating that it is a mere facade concealing the true facts': Woolfson v Strathclyde Regional Council (1978) For example: Gilford Motor Co Ltd v Horne (1933) Jones v Lipman (1962) Nationality. Food Distributors case (supra) is, on a proper analysis, of assistance to the appellants' argument. 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 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 the above-mentioned case, the Court of appeal thought that the present case was one which was suitable for lifting the corporate veil. Or Going Around? 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 . . No rent was ever paid or credited in respect of No. 12 89 Ord v Belhaven Pubs Ltd [1998] BCC 607, CA 90 Woolfson v. Strathclyde Regional . VTB Capital plc v Nutritek International Corp [2013] UKSC 5. UK legal case. Food case to be clearly distinguishable on its facts from the present case. But opting out of some of these cookies may have an effect on your browsing experience. 2 Salomon v A Salomon and Co Ltd [1897] AC 22. and another, [1984]) . In Gramophone and typewriter[xi] case that it is possible for a separate relationship of agency to be created between a person who happens to be a shareholder, as principal, and the company, as agent. 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 . portugal vs italy world cup qualifiers 2022. la liga 2012 13 standings. In Scotland, the principle was applied initially, in the case of Mackintosh v. Mackintosh, but it came to an end in RHM Bakeries v. Strathclyde Regional Council. Bambers Stores [1983] F.S.R. 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) 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'. The carrying on by the company of its business conferred substantial benefits on Woolfson. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. 59/61 St. George's Road were credited to Woolfson in Campbell's books. 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 entire wiki with photo and video galleries for each article The relevant parts of the judgments in D.H.N. 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. The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. Nos. Subscribers are able to see the list of results connected to your document through the topics and citations Vincent found. Here the three subsidiary companies were treated as a part of the same economic entity or group and were entitled to compensation. 2. (156) Ibid 561. We also use third-party cookies that help us analyze and understand how you use this website. 57 and 59/61 St Georges Road were owned by the first-named appellant Solomon Woolfson (Woolfson) and Nos. ACCEPT, Strathclyde Regional Council (as Successors to The Corporation of the City of Glasgow), to the court to 'pierce the veil'. 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 old metaphor, modern practice? 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. 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. References Yes! (160), 20Adam (n.18) [536] and [542]. 33 (4) [para. 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. 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. What approach did the Court of Appeal take in Adams v Cape Industries plc [1990] Ch 433? J.) (159) Ibid 584. From the paper "Limits of Employment-At-Will Doctrine" it is clear that the employment at will doctrine has its own limits. 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. In re FG (films) Ltd[ii], FG films wanted Monsoon registered as a British film. It is unnecessary for me to rehearse them in detail, and it will suffice to mention those that are particularly material. Subscribers are able to see any amendments made to the case. Such relationships of agency would typically involve the explicit or implicit appointment of the company to act on behalf of the shareholder in relation to some activity. 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. It uses material from the Wikipedia article "Woolfson v Strathclyde Regional Council". However, in contrast to DHN, the occupier of the property whose business was disturbed by the compulsory purchase was not the sole shareholder in the company who owned the property. 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. 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. 57 and 59/61 St. George's Road were owned by the first-named appellant Solomon Woolfson ("Woolfson") and Nos. . case of DHN Food Distributors v Tower Hamlets (1976) 1 WLR 852 which, however, had been disapproved by the decisions in Woolfson v Strathclyde Regional Council [1978] SCHL 90 and Adams v Cape Industries plc [1990] Ch 433. Even Evasion can be considered as Faade only. The Dean of Faculty, for the appellants, sought before this House to develop a further line of argument which was not presented to the Lands Tribunal for Scotland nor to the Second Division. The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. 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. Denning refers to the subsidiaries as . 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. Find something interesting to watch in seconds. Editors Note:Corporate Veil is the principle in corporate law which states that company and its shareholders are two different identities independent of its existence . Wallersteiner v Moir [1974] 1 WLR 991 is a UK company law case concerning piercing the corporate veil. The argument is in my opinion unsound, and must be rejected. C Minor Autotune, [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! The film was made in India. 2, January 2017, Dundee Student Law Review Nbr. lacanche range vs la cornue; strength and weaknesses of medical technologist; did roberto matta have siblings? Draft leases were at one time prepared, but they were never put into operation. Indeed, in Woolfson v Strathclyde Regional Council 1978 . Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. An alternative to lists of cases, the Precedent Map makes it easier to establish which ones may be of most relevance to your research and prioritise further reading. 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 . Woolfson v Strathclyde Regional Council[1978] UKHL 5is a UK company lawcase concerning piercing the corporate veil. Like those before him in this case, he reiterated the Woolfson starting point that it is appropriate to pierce the corporate veil only where special circumstances exist indicating that it is a mere faade concealing the true . Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. 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. In a nutshell, from the above case, we get that it serves as a useful reminder of the fundamental Principle of English Law that a company has a separate legal personality from its members, and that only in exceptional circumstances will the court pierce the corporate veil. Prest v Petrodel Resources Ltd & ors [2013] WTLR 1249. . Facts. 6 ibid [63], [103]. Updated: 07 December 2022; Ref: scu.279742. 57 St. George's Road. .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. But however that may be, I consider the D.H.N. The position there was that compensation for disturbance was claimed by a group of three limited companies associated in a wholesale grocery business. Enter the email address you signed up with and we'll email you a reset link. (155) Ibid 561-2, 564. woolfson v strathclyde regional council case summary About; Sponsors; Contacts 54 88 D Hayton, 'Contractual Licences and Corporate Veils' [1977] C.L.J. Held: The House declined to allow the principal shareholder of a company to recover compensation for the . Lifting the Corporate Veil 287 which it already possessed. It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. Lords Wilberforce, Fraser and Russell and Dundy concurred. I agree with it and with his conclusion that this appeal be dismissed. And one of them is to subscribe to our newsletter. 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 . Court case. and the premises were its only asset. Salomon v Salomon [1896] UKHL 1. 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 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. Petrodel Resources Ltd (PRL), which was incorporated in the Isle of Man, was the legal owner of the matrimonial home and five other residential properties in the United Kingdom. Note that since this case was based in Scotland, different law applied. 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: 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. The court looked to the reality of the situation ignored the transfer, and ordered that the company should convey the land to J. 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. 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. 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. 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. 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. You also have the option to opt-out of these cookies. 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. In Scotland, different law applied to a passage in the above-mentioned case, Court. No rent was ever paid or credited in respect of no you also the... One by his wife the other case concerning piercing the corporate veil is a legal obligation ) ; in Darby! [ ii ], FG films wanted Monsoon registered as a part of the same economic entity group. Description also known as ; English: Woolfson v Strathclyde Regional Council '' which was suitable for lifting corporate... 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Lpa International Inc mr Woolfson had 999 shares in Campbell Ltd and his wife the other into between Woolfson one! ; eduard martirosyan net worth this website uses cookies to Store and/or access information on a proper,... Fg films wanted Monsoon registered as a part of the grocery business Court of appeal Lord.