 |
| Ord v Belhaven Pubs Ltd | |
|---|---|
 | |
| Court | Court of Appeal of England and Wales |
| Citation(s) | [1998] 2 BCLC 447 |
| Keywords | |
| Lifting the corporate veil | |
Ord v Belhaven Pubs Ltd [1998] 2 BCLC 447 is a UK company law case concerning piercing the corporate veil.
| |
| Ord v Belhaven Pubs Ltd | |
|---|---|
| | |
| Court | Court of Appeal of England and Wales |
| Citation(s) | [1998] 2 BCLC 447 |
| Keywords | |
| Lifting the corporate veil | |
Ord v Belhaven Pubs Ltd [1998] 2 BCLC 447 is a UK company law case concerning piercing the corporate veil.
Mr and Mrs Ord ran the Fox Inn in Stamford, Lincolnshire. They were in an ongoing dispute with the freehold owner, Belhaven Pubs Ltd, for misrepresentation about the level of profitability of the pub. However Belhaven Pubs Ltd was part of a company group structure that had been reorganised, and had no assets left. Mr and Mrs Ord requested that a company with money, Ascott Holdings Ltd, be substituted for Belhaven Pubs Ltd to enforce the judgment. At first instance the judge granted this order. Belhaven Pubs Ltd appealed.
The Court of Appeal overturned the judgement and held that the reorganisation was a legitimate one, and not done to avoid an existing obligation. Hobhouse LJ argued that the reorganisation, even though it resulted in Belhaven Pubs Ltd having no further assets, was done as part of a response to the group's financial crisis. There was no ulterior motive.
Hobhouse LJ also held, specifically, that the earlier case of Creasey v Breachwood Motors Ltd was wrong.
Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed. Common law countries usually uphold this principle of separate personhood, but in exceptional situations may "pierce" or "lift" the corporate veil.
Salomon v A Salomon & Co Ltd[1896] UKHL 1, [1897] AC 22 is a landmark UK company law case. The effect of the House of Lords' unanimous ruling was to uphold firmly the doctrine of corporate personality, as set out in the Companies Act 1862, so that creditors of an insolvent company could not sue the company's shareholders for payment of outstanding debts.
Adams v Cape Industries plc [1990] Ch 433 is a UK company law case on separate legal personality and limited liability of shareholders. The case also addressed long-standing issues under the English conflict of laws as to when a company would be resident in a foreign jurisdiction such that the English courts would recognise the foreign court's jurisdiction over the company. It has in effect been superseded by Lungowe v Vedanta Resources plc, which held that a parent company could be liable for the actions of a subsidiary on ordinary principles of tort law.
Nethermere Ltd v Gardiner And Another [1984] ICR 612 is a UK labour law case in the Court of Appeal in the field of home work and vulnerable workers. Many labour and employment rights, such as unfair dismissal, in Britain depend on one's status as an "employee" rather than being "self-employed", or some other "worker". This case stands for the proposition that where "mutuality of obligation" between employers and casual or temporary workers exists to offer work and accept it, the court will find that the applicant has a "contract of employment" and is therefore an employee.
The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary legal vehicle to organise and run business. Tracing their modern history to the late Industrial Revolution, public companies now employ more people and generate more of wealth in the United Kingdom economy than any other form of organisation. The United Kingdom was the first country to draft modern corporation statutes, where through a simple registration procedure any investors could incorporate, limit liability to their commercial creditors in the event of business insolvency, and where management was delegated to a centralised board of directors. An influential model within Europe, the Commonwealth and as an international standard setter, UK law has always given people broad freedom to design the internal company rules, so long as the mandatory minimum rights of investors under its legislation are complied with.
Foster Bryant Surveying Ltd v Bryant[2007] EWCA Civ 200 is a 2007 UK company law case, concerning the fiduciary duty of directors to avoid conflicts of interest. It follows some considerable unrest in the courts about the strictness of the law relating to taking corporate opportunities.
DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852 is a UK company law case where, on the basis that a company should be compensated for loss of its business under a compulsory acquisition order, a group was recognised as a single economic entity. It stands as a liberal example of when UK courts may lift the veil of incorporation of a company.
Bishopsgate Investment Management Ltd v Maxwell [1993] BCLC 814 is a UK company law case concerning a director's duty to act for proper purposes of the company. This case is an example of what would now be Companies Act 2006, section 171.
Gilford Motor Co Ltd v Horne [1933] Ch 935 is a UK company law case concerning lifting the corporate veil. It gives an example of when courts will treat shareholders and a company as one, in a situation where a company is used as an instrument of fraud.
Woolfson v Strathclyde Regional Council [1978] UKHL 5 is a UK company law case concerning piercing the corporate veil.
Littlewoods Mail Order Stores v Inland Revenue Commissioners [1969] 1 WLR 1241 is a UK company law case concerning piercing the corporate veil.
Lubbe v Cape Plc [2000] UKHL 41 is a conflict of laws case, which is also highly significant for the question of lifting the corporate veil in relation to tort victims. In this case it was alleged, and postulated by the House of Lords, that in principle it is possible to show that a parent company owes a direct duty of care in tort to anybody injured by a subsidiary company in a group.
Creasey v Breachwood Motors Ltd [1993] BCLC 480 is a UK company law case concerning piercing the corporate veil.
Gencor ACP Ltd v Dalby [2000] EWHC 1560 (Ch) is a UK company law case concerning piercing the corporate veil.
Bank of Tokyo Ltd v Karoon [1987] AC 45 is a conflict of laws case, which also relates to UK company law and piercing the corporate veil.
The corporate veil in the United Kingdom is a metaphorical reference used in UK company law for the concept that the rights and duties of a corporation are, as a general principle, the responsibility of that company alone. Just as a natural person cannot be held legally accountable for the conduct or obligations of another person, unless they have expressly or implicitly assumed responsibility, guaranteed or indemnified the other person, as a general principle shareholders, directors and employees cannot be bound by the rights and duties of a corporation. This concept has traditionally been likened to a "veil" of separation between the legal entity of a corporation and the real people who invest their money and labor into a company's operations.
Chandler v Cape plc [2012] EWCA Civ 525 is a decision of the Court of Appeal which addresses the availability of damages for a tort victim from a parent company, in circumstances where the victim suffered industrial injury during employment by a subsidiary company.
Powdrill v Watson [1995] 2 AC 394 is a UK insolvency law case concerning the administration procedure when a company is unable to repay its debts.
Prest v Petrodel Resources Ltd[2013] UKSC 34, [2013] 2 AC 415 is a leading UK company law decision of the UK Supreme Court concerning the nature of the doctrine of piercing the corporate veil, resulting trusts and equitable proprietary remedies in the context of English family law.
VTB Capital plc v Nutritek International Corp[2013] UKSC 5, [2013] 2 AC 337 is an English company law case, concerning piercing the corporate veil for fraud.