woolfson v strathclyde regional council case summary

The US subsidiary had no assets. The court looked to the reality of the situation ignored the transfer, and ordered that the company should convey the land to J. 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. However, the House of Lords ruled that Woolfson and its subsidiary were not a single economic unit due to operational practices. There the company that owned the land was the wholly owned subsidiary of the company that carried on the business. This followed the refusal by the court to allow Campbell and Mrs Woolfson to be joined as additional claimants in the proceedings. 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This website uses cookies to improve your experience while you navigate through the website. This article is licensed under the GNU Free Documentation License. (H.L.) 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. 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. IMPORTANT:This site reports and summarizes cases. Localish Restaurant Locations, The parent company, D.H.N., carried on the business in the premises which were the subject of compulsory purchase. 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. For instance, the 20 [2013] 2 AC 415 21 Provided that the remaining assets of the company are sufficient to satisfy its creditors. 57 and 59/61 St. George's Road were owned by the first-named appellant Solomon Woolfson ("Woolfson") and Nos. 1 reference. 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. legal case. And one of them is to subscribe to our newsletter. Lord Keith upheld the decision of the Scottish Court of Appeal, refusing to follow and doubting DHN v Tower Hamlets BC. 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 . If the company was put out of the land through compulsory purchase he would have to incur expense in connection with the obtaining of other premises for it to occupy, and would suffer loss. VTB Capital plc v Nutritek International Corp [2013] UKSC 5. 57 and 59/61 St Georges Road were owned by the first-named appellant Solomon Woolfson (Woolfson) and Nos. Woolfson v. Strathclyde Regional Council 1978 S.L.T. 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) 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 . Denning refers to the subsidiaries as . 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 . I agree with it and with his conclusion that this appeal be dismissed. 59/61 St. George's Road were credited to Woolfson in Campbell's books. It was maintained before this House that the conclusion of the Lord Justice-Clerk was erroneous. 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. 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. 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. However there are many such situations and this paper hashighlightedfew of them. This website uses cookies to improve your experience. 1996, c. 125, sect. subsequent case following adams (O) williams v natural health foods ltd. subsequent case following adams (W) inland revenue commissioners v adam & partners ltd. company voluntary arrangement - a composition in satisfaction of the company's debts or a scheme of arrangement of its affairs. 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. UK legal case. The House considered the compensation payable on the compulsory purchase of land occupied by the appellant, but held under a company name. 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. Resource Type Case page Court 1540 Date 15 February 1978 Jurisdiction of court United Kingdom Where Reported 0 references. 5 Woolfson v Strathclyde Regional Council [1978] SC (HL) 90. The compulsory acquisition resulted in the extinction of the grocery business, since no suitable alternative premises could be found. UK legal case. An example of data being processed may be a unique identifier stored in a cookie. Language Label Description Also known as; English: Woolfson v Strathclyde Regional Council. Nos. 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. 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. PDF Lifting, Piercing and Sidestepping the Corporate Veil Ord v Belhaven Pubs Ltd [1998 . 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. Food Products Ltd. V. Tower Hamlets[v], it has been said that the Courts may disregard Salomons case whenever it is just and equitable to do so. ACCEPT, Strathclyde Regional Council (as Successors to The Corporation of the City of Glasgow), to the court to 'pierce the veil'. 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. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. Chapter 7: Corporations and legal personality Woolfson was the sole director of 'A' and owned 999 shares of the 1,000 issued . 40 Nbr. For the reasons stated in it, I also would dismiss this appeal. Held: The House declined to allow the principal shareholder of a company to recover compensation for the compulsory purchase of a property which the company occupied. 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. 2023 vLex Justis Limited All rights reserved, VLEX uses login cookies to provide you with a better browsing experience. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. Woolfson v Strathclyde RC 15 February 1978 At delivering judgment on 15th February 1978, 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. But however that may be, I consider the D.H.N. Subscribers are able to see a list of all the cited cases and legislation of a document. Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil. 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 . 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. The Land Tribunal denied it on the basis that Campbell Ltd was the sole occupier. 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. But the shop itself, though all on one floor, was composed of different units of property. 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. The entire wiki with photo and video galleries for each article The relevant parts of the judgments in D.H.N. 57 and 59/61 St. George's Road were owned by the first-named appellant Solomon Woolfson ("Woolfson") and Nos. An injunction was granted both against him and the company to restrain them from carrying on the business. 53/55 St. George's Road. to compensation for disturbance. 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. - 3rd December 1976 - Court of Session (affirmed) - 15th February 1978 - House of Lords (affirmed) 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. Some of our partners may process your data as a part of their legitimate business interest without asking for consent. Woolfson v Strathclide UKHL 5 . 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. 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. Piercing The Corporate Veil Recent Developments. instance of. Woolfson v Strathclyde Regional Council[1978] UKHL 5is a UK company lawcase concerning piercing the corporate veil.