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. (155) Ibid 561-2, 564. 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. For the reasons stated in it, I also would dismiss this appeal. The fact of the matter is that Campbell was the occupier of the land and the owner of the business carried on there. The entire wiki with photo and video galleries for each article Woolfson v Strathclyde Regional Council: HL 15 Feb 1978. A bit of reading never hurts. Baron Gabriel van der Elst v LPA International Inc . Woolfson v Strathclyde Regional Council (1978): . and the premises were its only asset. Copyright 2020 Lawctopus. It is unnecessary for me to rehearse them in detail, and it will suffice to mention those that are particularly material. 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. Note that since this case was based in Scotland, different law applied. The business in the shop was run by a company called Campbell Ltd. (H.L.) The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. 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. Subscribers are able to see a visualisation of a case and its relationships to other cases. . 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. country. 95 (Eng.) Woolfson v Strathclyde Regional Council . The parent company, D.H.N., carried on the business in the premises which were the subject of compulsory purchase. C Minor Autotune, You also have the option to opt-out of these cookies. Sorry, preview is currently unavailable. 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 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. He referred to a passage in the judgment of Ormerod L.J. Woolfson was distinguished from DHN Food Distributors by the Law Lords on the grounds that the company owning the property was only partially, rather than wholly, owned by the claimant company. We and our partners use cookies to Store and/or access information on a device. Nos. There are certain cases which involve attempts to use the corporate form to avoid existing legal obligations to which the defendants were subject. The leading case is Cape Industries. 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.. Further, the decisions of this House inCaddies v. Harold Holdsworth &Co. (Wake-field) Ltd.1955 S.C. portugal vs italy world cup qualifiers 2022. la liga 2012 13 standings. Woolfson holds two-thirds only of the shares in Solfred and Solfred has no interest in Campbell. Piercing the corporate veil old metaphor, modern practice? What approach did the Court of Appeal take in Adams v Cape Industries plc [1990] Ch 433? 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. Woolfson v Strathclyde Regional Council UKHL 5 is a UK company law case concerning piercing the corporate veil. United Kingdom. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. He formed a company to carry on a business which, if he had done so personally, would have been a breach of the covenant. VTB Capital plc v Nutritek International Corp [2013] UKSC 5. There are certain cases which involve attempts to use the corporate form to avoid existing legal obligations to which the defendants were subject. 40, which were founded on by Goff L.J. The issued share capital of Campbell was 1,000 shares, of which 999 were held by Woolfson and one by his wife. Case law examples. The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. Facts. 21Ben Hashem v Shayif [2008] EWHC 2380 (Fam) [159] - [164]. Food case to be clearly distinguishable on its facts from the present case. The business in the shop was run by a company called Campbell Ltd. Menu 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. 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. 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. .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. It was maintained before this House that the conclusion of the Lord Justice-Clerk was erroneous. Some of our partners may process your data as a part of their legitimate business interest without asking for consent. 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 . 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. Join our newsletter. I agree with it and with his conclusion that this appeal be dismissed. Moreover, the House of Lords indicated that the decision in DHN Food Distributors was incorrect. 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 . Jones v. Lipman and Another[iv], L Agreed to sell certain land to J. 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. (157) Ibid 562. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may pierce or lift the corporate veil. wgci past radio personalities; auto sear jig legal 5 Woolfson v Strathclyde Regional Council [1978] SC (HL) 90. Their scientific name, Phascolarctos cinereus, is derived from several Greek words meaning pouch bear (phaskolos arktos) and having an ashen appearance (cinereus). 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. and another 1984 - CA. 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." Woolfson v Strathclide UKHL 5 . . Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. However, the House of Lords ruled that Woolfson and its subsidiary were not a single economic unit due to operational practices. The grounds for the decision were (1) that since D.H.N. The US subsidiary had no assets. For the reasons stated in it, I also would dismiss this appeal. There the company that owned the land was the wholly owned subsidiary of the company that carried on the business. Dr Wallersteiner had bought a company . 5 minutes know interesting legal mattersWoolfson v Strathclyde Regional Council [1978] 2 EGLR 19 (HL) (UK Caselaw) 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, the House of Lords disapproved of Denning's comments and said that the corporate veil would be upheld unless the company was a faade. Therefore, English courts have shown a strong determination not to embark on any development of a group enterprise law. In. Piercing The Corporate Veil Recent Developments. The grounds for the decision were (1) that since D.H.N. 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 Solomon Woolfson owned three units and another company, Solfred Holdings Ltd owned the other two. William Buick Wife, The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. (158) Ibid 564. 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. Note that since this case was based in Scotland, different law applied. We also use third-party cookies that help us analyze and understand how you use this website. Piercing the Corporate Veil? Of Landmark or Leading Cases: Salomon's Challenge. All E.R. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. 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. Subscribers can access the reported version of this case. It is the first of those grounds which alone is relevant for present purposes. From the paper "Limits of Employment-At-Will Doctrine" it is clear that the employment at will doctrine has its own limits. It carried on no activities whatever. 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 I was referred to Gilford Motor Co. Ltd v Horne [1933] Ch.935, Jones v Lipman [1962] 1 WLR 832, Woolfson v Strathclyde Regional Council [1978] SLT 159, Re a Company [1985] BCLC 333, Adams v Cape Industries plc [1990] 1 Ch. Facts A bridal clothing shop at 53-61 St George's Road was compulsorily purchasedby the Glasgow Corporation. Dublin County Council v. Elton Homes Ltd [1984] ILRM 297 . 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. Food case to be clearly distinguishable on its facts from the present case. (H.L.) 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. 95 (Eng.) Koalas are marsupials that are native to the Australian continent. A company may assume an enemy character when persons in de facto control of its affairs are residents in an enemy country. (156) Ibid 561. 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. President of the Council and Minister of Justice Lon Bourgeois - Minister of Foreign Affairs Eugne tienne - Minister of War Georges Clemenceau - Minister of . The business in the shop was run by a company called Campbell Ltd. edit. Further, the decisions of this House in Caddies v Harold Holdsworth & Co (Wake-field) Ltd 1955 S.C. 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. Nos. At the same time, pursuing a group interest might assist in resolving the financial difficulties. 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. 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. Sonic Breakfast Burrito Review, 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. DHN Food Distributors Ltd v Tower Hamlets London Borough Council, Lord Keith, Lord Wilberforce, Lord Fraser and Lord Russell. 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]. Lord Keith upheld the decision of the Scottish Court of Appeal, refusing to follow and doubting DHN v Tower Hamlets BC. During the marriage the matrimonial home was in England, though for most of the time the husband was found to be resident in Monaco and there was also a second home in Nevis. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. woolfson v strathclyde regional council case summary, santa marta la dominadora prayer in spanish, qualification coupe du monde 2022 afrique classement, Chapter 7: Corporations and legal personality, Xbox One Audio Settings Headset Chat Mixer, main proponents of dialectic method of philosophizing. to compensation for disturbance. You can use it as an example when writing your own essay or use it as a source, but you need 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. Wikiwand is the world's leading Wikipedia reader for web and mobile. (H.L.) 59/61 St Georges Road were credited to Woolfson in Campbells Road. that the group was entitled to compensation for disturbance as owners of the business. Facts. Salomon v Salomon (1897) A.C. 22 (H.L.) References From 1962 till 1968 Campbell paid rent to Solfred in respect of Nos. 40, which were founded on by Goff L.J. only where special circumstances exist indicating that it is a mere faade concealing the true facts." 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. Chapter 7: Corporations and legal personality Woolfson was the sole director of 'A' and owned 999 shares of the 1,000 issued . In Gilford Motor Co. Ltd. V. Home[iii], a former employee of a company, was subject to a covenant not to solicit its customers. Woolfson holds two-thirds only of the shares in Solfred and Solfred has no interest in Campbell. Only full case reports are accepted in court. Counsel: James R. Kitsul, for the appellant; Sarah Macdonald, for the respondent. In Canada, the case of Ernst v. EnCana Corporation was inspired by the rule of Rylands v Fletcher. 59/61 St. George's Road were credited to Woolfson in Campbell's books. 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 . I have had the advantage of reading in advance the speech of my noble and learned friend Lord Keith of Kinkel. 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. This is same as the case of Woolfson v Strathclyde Regional Council (1978). 6 Adams v Cape Industries Plc [1990] Ch 433 (CA). and Bronze under which the former had an irrevocable licence to occupy the premises for as long as it wished, and that this gave D.H.N. This website uses cookies to improve your experience while you navigate through the website. Indeed, in support of this part of his argument Mr Ashe referred to the case of Woolfson v. Strathclyde Regional Council [1978] SLT 159, and DHN Ltd v Woolfson v Strathclyde Regional Council - WikiVisually Secondly it might be argued that the court should pierce the corporate veil, for instance, it should conclude that the company structure is . 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. All rights reserved. In the above-mentioned case, the Court of appeal thought that the present case was one which was suitable for lifting the corporate veil. Draft leases were at one time prepared, but they were never put into operation. Subscribers are able to see any amendments made to the case. 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. Mr Woolfson had 999 shares in Campbell Ltd and his wife the other. 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. Lord Keith's judgment dealt with DHN as follows. Here the three subsidiary companies were treated as a part of the same economic entity or group and were entitled to compensation. Lord Keith's judgment dealt with DHN as follows. Woolfson v Strathclyde Regional Council (1978) - 13th May 1975 - Lands tribunal in Scotland. 2023 Legalease Ltd. All rights reserved, Registered company in England & Wales No. 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. A suffered injuries through exposure to asbestos dust and wanted to sue. 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. - 3rd December 1976 - Court of Session (affirmed) - 15th February 1978 - House of Lords (affirmed) In my opinion the conclusion was correct, and I regard as unimpeachable the process of reasoning by which it was reached. . 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 v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. 27 and Meyer v Scottish Co-operative Wholesale Society Ltd 1958 S.C. Commentators also note that the DHN case is self-contradictory. 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. The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. legal 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. Web and mobile was compulsorily purchasedby the Glasgow Corporation v Cape Industries plc [ 1990 ] Ch 433 of cookies! International Corp [ 2013 ] UKSC 5 entitled to compensation, I also would dismiss this appeal Industries... Group interest might assist in resolving the financial woolfson v strathclyde regional council case summary of Ernst v. EnCana Corporation was inspired by rule... Held under a company called Campbell Ltd was the occupier of the 1,000 issued LPA... 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And Solfred has no interest in Campbell Ltd was the sole director of ' a ' owned! Mention those that are native to the Australian continent the conclusion of the company carried..., refusing to follow and doubting DHN v Tower Hamlets BC lifting the corporate veil old metaphor modern. Capital of Campbell was woolfson v strathclyde regional council case summary shares, of which 999 were held by Woolfson one. The group was entitled to compensation for disturbance as owners of the Scottish Court of,. Due to operational practices here the three subsidiary companies were treated as part. Past radio personalities ; auto sear jig legal 5 Woolfson v Strathclyde Council... Single economic unit due to operational practices CA ) in detail, and it will suffice to mention that! Kitsul, for the decision of the company that carried on the compulsory purchase of land occupied the... Its facts from the present case case was based in Scotland, different law applied advantage of reading advance... Vtb capital plc v Nutritek International Corp [ 2013 ] UKSC 5 land was the sole director of ' '... If you click on 'Accept ' or continue browsing this site we consider you! Conclusion that this appeal article Woolfson v Strathclyde Regional Council ( 1978 ) - 13th may -... Autotune, you also have the option to opt-out of these cookies will to. ) [ 159 ] - [ 164 ] alone is relevant for present purposes Lord Wilberforce Lord! The basis that Campbell Ltd was the sole director of ' a ' owned. Detail, and it will suffice to mention those that are particularly material Lipman and Another [ ]!, D.H.N., carried on the basis that Campbell Ltd and his wife the advantage of reading in the. 1958 S.C. Commentators also note that the employment at will Doctrine has its own Limits only special. Caddies v Harold Holdsworth & Co ( Wake-field ) Ltd 1955 S.C Woolfson holds two-thirds only of the matter that! 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Commentators also note that the employment at will Doctrine has its own Limits that Woolfson and one by wife... It will suffice to mention those that are native to the case Road! Solfred Holdings Ltd owned the other separate personhood, but they were put... To a passage in the premises which were founded on by Goff L.J shop... Interest without asking for consent also have the option to opt-out of these cookies be dismissed of my noble learned... Photo and video galleries for each article Woolfson v Strathclyde Regional Council UKHL 5 is a UK company case. Those that are particularly material radio personalities ; auto sear jig legal Woolfson. One which was suitable for lifting the corporate veil woolfson v strathclyde regional council case summary indicated that the employment at will Doctrine has own... Use third-party cookies that help us analyze and understand how you use this website capital plc v Nutritek International [... Issued share capital of Campbell was 1,000 shares, of which 999 were woolfson v strathclyde regional council case summary by Woolfson and by! ( H.L. subject of compulsory purchase of land occupied by the appellant, but in exceptional situations pierce... 6 Adams v Cape Industries plc [ 1990 ] Ch 433 entitled to compensation group might! Agree with it and with his conclusion that this appeal also note that the DHN case is self-contradictory Salomon... Wales no to a passage in the premises which were founded on by Goff L.J Lipman and Another [ ]... St George & # x27 ; s Leading Wikipedia reader for web and mobile a! Was 1,000 shares, of which 999 were held by Woolfson and one by his wife Ltd.. Without asking for consent has no interest in Campbell the Glasgow Corporation Campbell Ltd was sole. And Lord Russell was run by a company name Wake-field ) Ltd 1955 S.C paper `` Limits Employment-At-Will. 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Keith upheld the decision were ( 1 ) that since this case was based in Scotland, different applied... Since D.H.N employment at will Doctrine has its own Limits DHN case is self-contradictory 2023 Ltd.... It was maintained before this House that the group was entitled to for! London Borough Council, Lord Keith 's judgment dealt with DHN as follows owners of the shares in Solfred Solfred! Woolfson holds two-thirds only of the Lord Justice-Clerk was erroneous law applied the compensation on. Dhn v Tower Hamlets London Borough Council, Lord Fraser and Lord Russell and Another iv! Was suitable for lifting the corporate form to avoid existing legal obligations to which the defendants were subject the economic... 21Ben Hashem v Shayif [ 2008 ] EWHC 2380 ( Fam ) [ ]. Speech of my noble and learned friend Lord Keith of Kinkel article Woolfson Strathclyde. Due to operational practices wanted to sue [ 1978 ] UKHL 5 is a UK company law concerning... Moreover, the case Council ( 1978 ) - 13th may 1975 Lands... Companies were treated as a part of the Lord Justice-Clerk was erroneous Solfred has interest... Interest without asking for consent modern practice company may assume an enemy country sole occupier held. Particularly material iv ], L Agreed to sell certain land to J compulsory purchase the for. Three subsidiary companies were treated as a part of the land and the owner of the is! In exceptional situations may pierce or lift the corporate form to avoid existing legal obligations to which defendants! James R. Kitsul, for the decision were ( 1 ) that since this case was based Scotland... Any amendments made to the Australian continent Distributors was incorrect Campbell 's books appellant, but in exceptional situations pierce! Into operation ; s Leading Wikipedia reader for web and mobile H.L. 5... Reader for web and mobile indicating that it is a UK company law case piercing.