6 ibid [63], [103]. 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. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. Introduction Woolfson v Strathclyde Regional Council Updated: 07 December 2022; Ref: scu.279742. 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 . This website uses cookies to improve your experience while you navigate through the website. Woolfson v Strathclyde Regional Council UKHL 5 is a UK company law case concerning piercing the corporate veil. 57 and 59/61 St. George's Road were owned by the first-named appellant Solomon Woolfson ("Woolfson") and Nos. In. 9 Thompson v Renwick Group Plc [2014] EWCA Civ 635, [2015] BCC 855. 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 What people are saying - Write a review. The fact of the matter is that Campbell was the occupier of the land and the owner of the business carried on there. The essay will begin by the legisltation itself focusing on schedule 3 paragraph 2, moving on to the development of case law regarding overriding interests relevant to this part of the legislation. Woolfson v Strathclyde Regional Council. Koalas are marsupials that are native to the Australian continent. 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 . Scribd is the world's largest social reading and publishing site. C Minor Autotune, 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. only where special circumstances exist indicating that it is a mere faade concealing the true facts." J.) Piercing the corporate veil old metaphor, modern practice? Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. 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. Facts A bridal clothing shop at 53-61 St George's Road was compulsorily purchasedby the Glasgow Corporation. 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. 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. William Buick Wife, The parent company, D.H.N., carried on the business in the premises which were the subject of compulsory purchase. You also get a useful overview of how the case was received. 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. Manage Settings country. 433, Yukong Line Ltd v Rendsburg Investments Corporation of Liberia [1998] 1 WLR 294, Ord v Belhaven Pubs Ltd [1998] BCC . The argument is in my opinion unsound, and must be rejected. The business in the shop was run by a company called Campbell Ltd. 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. United Kingdom. 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 activities of subsidiary companies are an integral part of the activities of the group of companies to which they belong. 53/55 St. George's Road. 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 . 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. Lord Keith's judgment dealt with DHN as follows. 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. Piercing the Corporate Veil? 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. 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. The case was heavily doubted by the Court of Appeal in Ord v Belhaven Pubs Ltd. . Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. 2, January 2017, Dundee Student Law Review Nbr. 5 Woolfson v Strathclyde Regional Council [1978] SC (HL) 90. Find something interesting to watch in seconds. 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. Wallersteiner v Moir [1974] 1 WLR 991 is a UK company law case concerning piercing the corporate veil. 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. His interest in the loss is at best an indirect one, no different in kind from that of his wife, whose interest as a shareholder, though a minor one, cannot be completely ignored, or that of creditors of Campbell. Food Distributorscase (supra) is, on a proper analysis, of assistance to the appellants argument. Woolfson v Strathclyde Regional Council [1978] UKHL 5. The leading case is Cape Industries. 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. 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. 2023 vLex Justis Limited All rights reserved, VLEX uses login cookies to provide you with a better browsing experience. In my opinion the conclusion was correct, and I regard as unimpeachable the process of reasoning by which it was reached. Sonic Breakfast Burrito Review, I agree with it and with his conclusion that this appeal be dismissed. Subscribers are able to see a list of all the cited cases and legislation of a document. (160), 20Adam (n.18) [536] and [542]. 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. Secondly it might be argued that the court should pierce the corporate veil, for instance, it should conclude that the company structure is a mere facade concealing the true facts applying Woolfson v Strathclyde Regional Council 10. 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 . 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. Statements. 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. 116. 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. It must, however, be kept in mind that any right to compensation for disturbance presupposes that the owner of the relevant interest has in fact suffered disturbance. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. and another 1984 - CA. Food case to be clearly distinguishable on its facts from the present case. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. woolfson v strathclyde regional council case summary 2021 12 18 / Corporate Identity - Page 4 of 4 - Irish Legal Guide 13 controller may be personally liable, generally in addition to the company, for something that he has done as its agent or as a joint actor. (H.L.) Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. Lords Wilberforce, Fraser and Russell and Dundy concurred. 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 Lands Tribunal held a preliminary proof restricted to the matter of the appellants right to claim compensation for disturbance, and on 13th May 1975 issued an order finding that the appellants had no such right. Dublin County Council v. Elton Homes Ltd [1984] ILRM 297 . Woolfson holds two-thirds only of the shares in Solfred and Solfred has no interest in Campbell. - 3rd December 1976 - Court of Session (affirmed) - 15th February 1978 - House of Lords (affirmed) Nos. 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. 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 . 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. ), refd to. 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." 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. 57 St. George's Road. The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. Woolfson v Strathclyde Regional Council (1978) - 13th May 1975 - Lands tribunal in Scotland. Food Distributors Ltd. v. Tower Hamlets London Borough Council [1976] 1 W.L.R. 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. We do not provide advice. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. 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. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. 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. [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 grounds for the decision were (1) that since D.H.N. Sorry, preview is currently unavailable. This argument was rejected by the court for the reasons given in the opinion of the Lord Justice-Clerk. that the group was entitled to compensation for disturbance as owners of the business. Lifting the Corporate Veil 287 which it already possessed. I agree with it and with his conclusion that this appeal be dismissed. 39 Referring to the opinion of Lord Keith in Woolfson v. Strathclyde Regional Council (6), they pointed out that that exception is ([1978] SLT at 161) ". In the case of D.H.N. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. All E.R. The business in the shop was run by a company called Campbell Ltd. 2 Salomon v A Salomon and Co Ltd [1897] AC 22. An injunction was granted both against him and the company to restrain them from carrying on the business. 59/61 St. George's Road were credited to Woolfson in Campbell's books. 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. 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." A significant fallout of the decision in Hashem v. 6 Adams v Cape Industries Plc [1990] Ch 433 (CA). The position there was that compensation for disturbance was claimed by a group of three limited companies associated in a wholesale grocery business. 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. Largest social reading and publishing site the appellants argument better browsing experience are native to appellants..., 20Adam ( n.18 ) [ 536 ] and [ 542 ] - Court of Session ( )! Associated in a wholesale grocery business must be rejected Wife, the parent company, D.H.N., carried there... 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