Woolfson v Strathclyde Regional Council
The corporate veil may be lifted only where special circumstances exist indicating that the company is a mere facade concealing the true facts.
Facts
Mr Woolfson owned shops in Glasgow, which were occupied by a company, Campbell Ltd, which ran a retail business. Mr Woolfson held most of the shares in the company. When the council acquired the shops compulsorily, Mr Woolfson claimed compensation for disturbance of the business, arguing, on the basis of DHN Food Distributors, that he and the company should be treated as one.
Legal principle
The House of Lords held that Mr Woolfson was not entitled to compensation for disturbance. Lord Keith said 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. There were no such circumstances here, because the company was a genuine trading company with other shareholders, and the land and the business were owned by different persons. Lord Keith expressed doubt about whether DHN had been correctly decided.
Related cases on separate legal personality and the corporate veil
- Adams v Cape Industries plc [1990] Ch 433
- Chandler v Cape plc [2012] EWCA Civ 525, [2012] 1 WLR 3111
- Re Darby, ex p Brougham [1911] 1 KB 95
- DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852
- Gilford Motor Co Ltd v Horne [1933] Ch 935
- Jones v Lipman [1962] 1 WLR 832
- Lee v Lee's Air Farming Ltd [1961] AC 12
- Macaura v Northern Assurance Co Ltd [1925] AC 619
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