country. 90 (15 February 1978) Links to this case Content referring to this case We are experiencing technical difficulties. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. Note that since this case was based in Scotland, different law applied. 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. 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 . This was supported by a copious citation of authority, but I do not consider the proposition as such to be in any doubt. 53-61 St George's Road Glasgow Corporation . 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. 5 Woolfson v Strathclyde Regional Council [1978] SC (HL) 90. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. 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. 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. This website uses cookies to improve your experience while you navigate through the website. I agree with it, and for the reasons he gives would dismiss the appeal. 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. UK legal case. The House of Lords made it very clear in Salomon v Salomon, that the company is not the shareholders agent by reason of the fact of incorporation. I agree with it, and for the reasons he gives would dismiss the appeal. 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 . Dublin County Council v. Elton Homes Ltd [1984] ILRM 297 . Resource Type Case page Court 1540 Date 15 February 1978 Jurisdiction of court United Kingdom Where Reported Mr Solomon Woolfson owned three units and another company, Solfred Holdings Ltd owned the other two. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. 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. ,Sitemap. 41-4, December 2014, Melbourne University Law Review Vol. Enter the email address you signed up with and we'll email you a reset link. There the company that owned the land was the wholly owned subsidiary of the company that carried on the business. 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. 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. And one of them is to subscribe to our newsletter. Woolfson v Strathclyde Regional Council. Facts; Judgment; See also; Notes; References; External links; Facts. Topic 3 Corporate Personality 1 PART A SEPARATE LEGAL PERSON PRINCIPLE 2 The Salomon case: separate legal entity Company is a legal Piercing the Corporate Veil? Woolfson v Strathclyde Regional Council [1978] UKHL 5. 95 (Eng.) 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. Food Distributors Ltd. v. Tower Hamlets London Borough Council[1976] 1 W.L.R. 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. Woolfson also owned 20 of the 30 issued shares of company 'B', with the other 10 being owned by his wife. 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. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. 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'. 3 Woolfson v. Strathclyde Regional Council [1978] SLT 159, confirmed by the Court of Appeal in Adams v. Cape Industries Plc [1990] 2 WLR 657. . J.) 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. Yes! Woolfson v. Strathclyde Regional Council, [1978] S.C. 90 (H.L. In Daimler Co. Ltd V. Continental Tyre And Rubber Co. Ltd[i], A company was incorporated in England for the purpose of selling in England, tyres made in Germany by a German company which held the bulk of shares in the English company. Nos. 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. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. Advanced A.I. Bambers Stores [1983] F.S.R. In re FG (films) Ltd[ii], FG films wanted Monsoon registered as a British film. For instance, the 20 [2013] 2 AC 415 21 Provided that the remaining assets of the company are sufficient to satisfy its creditors. . Denning refers to the subsidiaries as . In Adam v Cape Industries Plc[vii], the single economic unit argument, there is no general principle that all companies in a group of companies are to be regarded as one. 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. 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. 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. (160), 20Adam (n.18) [536] and [542]. Infinite suggestions of high quality videos and topics It carried on no activities whatever. Woolfson holds two-thirds only of the shares in Solfred and Solfred has no interest in Campbell. But the shop itself, though all on one floor, was composed of different units of property. 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. It is the first of those grounds which alone is relevant for present purposes. 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. 12 89 Ord v Belhaven Pubs Ltd [1998] BCC 607, CA 90 Woolfson v. Strathclyde Regional . Baron Gabriel van der Elst v LPA International Inc . Note that since this case was based in Scotland, different law applied. Case: Woolfson v Strathclyde Regional Council [1978] UKHL 5 Prest v Petrodel Resources Ltd & ors [2013] WTLR 1249 Wills & Trusts Law Reports | September 2013 #132 Michael Prest (husband) and Yasmin Prest (wife) were married for 15 years and had four children before the wife petitioned for divorce in March 2008. (156) Ibid 561. 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. Court case. reasons for lifting the veil of incorporation circumstances when the veil is lifted are haphazard and difficult to categorize. 6 Adams v Cape Industries Plc [1990] Ch 433 (CA). Cookie policy. . 9 Thompson v Renwick Group Plc [2014] EWCA Civ 635, [2015] BCC 855. The film was made in India. This website uses cookies to improve your experience. (159) Ibid 584. Woolfson v Strathclide UKHL 5 . WOOLFSON v. REGIONAL COUNCIL Compulsory purchase Compensation Compensation for disturbance "Occupier" of acquired premises Occupier a trading It uses material from the Wikipedia article "Woolfson v Strathclyde Regional Council". Case law examples. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. The DHN case approach has become less popular since then. Except where otherwise indicated, Everything.Explained.Today is Copyright 2009-2022, A B Cryer, All Rights Reserved. 4 [2011] EWHC 333 (Comm). All E.R. in support of this ground of judgment and, as to the first of them, to some extent also by Lord Denning, M.R., do not, with respect, appear to me to be concerned with that principle. 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. This followed the refusal by the court to allow Campbell and Mrs Woolfson to be joined as additional claimants in the proceedings. In. You also get a useful overview of how the case was received. 8]. 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. 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. 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]. 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. Sonic Breakfast Burrito Review, References (H.L.) Lord Keith upheld the decision of the Scottish Court of Appeal, refusing to follow and doubting DHN v Tower Hamlets BC. We and our partners use cookies to Store and/or access information on a device. Corporate structures, the veil and the role of the courts. Some of our partners may process your data as a part of their legitimate business interest without asking for consent. How does the decision in DHN Food Distributors Ltd v Tower Hamlets LBC [1976] 1 WLR 852 compare with the decision in Woolfson v Strathclyde Regional Council 1978 SLT 159? 17 Adams v Cape Industries plc [1990] Ch 433 at 543 which has been cited with 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 . He subsequently changed his mind and to avoid the specific performance against L and the company. In the recent case Prest v Petrodel Resources Ltd[x], it was held that evasion is piercing. 935 C.A. 22Woolfson v Strathclyde Regional Council. There the company that owned the land was the wholly owned subsidiary of the company that carried on the business. 17]. From 1962 till 1968 Campbell paid rent to Solfred in respect of Nos. The activities of subsidiary companies are an integral part of the activities of the group of companies to which they belong. 12 89 Ord v Belhaven Pubs Ltd [1998] BCC 607, CA 90 Woolfson v. Strathclyde Regional . Piercing the corporate veil old metaphor, modern practice? View Notes - Spring+2015+ACCT4610+Topic+3 from ACCT 4610 at HKUST. Food Distributors Ltd. v. Tower Hamlets London Borough Council [1976] 1 W.L.R. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. Woolfson v Strathclyde Regional Council UKHL 5 is a UK company law case concerning piercing the corporate veil. 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 . Any direct loss consequent on disturbance would fall upon Campbell, not Woolfson. For the reasons stated in it, I also would dismiss this appeal. 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. Woolfson v. Strathclyde Regional Council (1978) SC 90 . PDF Lifting, Piercing and Sidestepping the Corporate Veil Ord v Belhaven Pubs Ltd [1998 . 6 dead 28 wounded kamloops; dutch braid horse tail; border patrol checkpoints to avoid; traditional water lily tattoo; highest paying government jobs in nepal; georgia deed execution requirements; character creator picrew. to compensation for disturbance. (H.L.) The business in the shop was run by a company called Campbell Ltd. 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. 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 . 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. It is unnecessary for me to rehearse them in detail, and it will suffice to mention those that are particularly material. 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. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. 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 Horne. In the case of D.H.N. Bronze had the same directors as D.H.N. 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. Nos. wgci past radio personalities; auto sear jig legal It was held by the Court of Appeal (Lord Denning M.R., Goff and Shaw LL. Prest v Petrodel Resources Ltd and Others, [2013] UKSC 34. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. Lord Keith upheld the decision of the Scottish Court of Appeal, refusing to follow and doubting DHN v Tower Hamlets BC. 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. From 1962 till 1968 Campbell paid rent to Solfred in respect of Nos. 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. 2. 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 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. This line of argument was unsupported by authority and in my opinion it also lacks any foundation of principle. At the same time, pursuing a group interest might assist in resolving the financial difficulties. A bridal clothing shop at 53-61 St George's Road was compulsorily purchased by the Glasgow Corporation. 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. Further, the decisions of this House inCaddies v. Harold Holdsworth &Co. (Wake-field) Ltd.1955 S.C. 5 minutes know interesting legal mattersWoolfson v Strathclyde Regional Council [1978] 2 EGLR 19 (HL) (UK Caselaw) 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. Please contact Technical Support at +44 345 600 9355 for assistance. 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 separate personality of a company is a real thing. 40, which were founded on by Goff L.J. 57 and 59/61 St. George's Road were owned by the first-named appellant Solomon Woolfson ("Woolfson") and Nos. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. Subscribers can access the reported version of this case. No. 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.[1]. Xbox One Audio Settings Headset Chat Mixer, The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. 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. 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woolfson v strathclyde regional council case summary