Corporate Veil: Legal Cases and Implications

Daimler v Continental Tyre 1916 HOL

Continental Tyre & Rubber Company was incorporated in England, but the holders of all its shares except 1, and also all the directions, were Germans, residing in Germany. The secretary was English. Continental Tyre & Rubber Co Ltd supplied tyres to Daimler, but Dailmer was concerned that making payment might contravene a CL offence of trading with the enemy as well as proclamation issued under S1(2) Trading with the Enemy Act 1914. After the outbreak of the First World War, Continental Tyre company brought an action against Daimler Co Ltd to recover trade dept. The HOL half the thought the Continental Tyre Company was incorporated in England, its effective control was in the hands of Germans, and therefore, the company had acquired the enemy character.

Guilfold Motors v Horne

Mr Horne had signed a contract stating not to steal customers from Guilford Motors. He then opened up a company and breached the term of the contract. He argued SLP. The court held that this is a sham device Courts lifted the corporate veil and held the director to be responsible.

Jones v Lipman(1962)

Mr Lipman agreed to sell a price of land to Mr Hones and later changed his mind. He incorporated a company and transferred the land to the company. He then argued SLP. This was labelled as a sham device, courts lifted the corporate veil.

Creasey v Breachwood Motors Ltd(1993)

Creasey was wrongfully dismissed. A judgement was given in his favour. The company restructured itself from Breachwood Welvyn Ltd to Breachwood Motors. Courts held this was in the intention to evade liability. Sham devices substituted judgement to Breachwood Motors. This case was overruled by Ord v Belhaven Pubs Ltd.

Ord v Belhaven Pubs Ltd

Belhaven Pubs was a franchise and went through a restructuring process to keep the group structure afloat. The COA held if it was done with an honest intention to keep the group structure afloat then it will not lift the corporate veil.