Lifting the Veil: Imagination and the Kingdom of God

Product Information

Gilford Motor Co. v. Horne [xiv]–This is an instance for prevention of façade or sham. In this case, an employee entered into an agreement that after his employment is terminated he shall not enter into a competing business or he should not solicit their customers by setting up his own business. After the defendant’s service was terminated, he set up a company of the same business. Re Noel Tedman Holdings Pty Ltd., 1967 Qdr 561. See also, Mayson, French & Ryan, Company Law (29th edn, OUP 2012). For instance, in Bank of Tokyo v Karoon,23 the Court of Appeal rejected the “single economic unit” theory arguing that “we are concerned not with economics but with law. The distinction between the two is, in law, fundamental and cannot here be abridged”. Further, in the case of VTB Capital Plc v Nutritek International Corporation, 24 the court reiterated the restricted scope of veil piercing as only a limited equitable remedy. Section 542- Fraudulent conduct: If in the course of the winding up of the company, it appears that any business of the company has been carried on with intent to defraud the creditors of the company or any other person or for any fraudulent purpose, the persons who were knowingly parties to the carrying on of the business, in the manner aforesaid, shall be personally responsible, without any limitation of liability for all or any of the debts or other liabilities of the company, as the court may direct. In Popular Bank Ltd., In re [x] it was held that section 542 appears to make the directors liable in disregard of principles of limited liability. It leaves the Court with discretion to make a declaration of liability, in relation to ‘all or any of the debts or other liabilities of the company’. This [xi]section postulates a nexus between fraudulent reading or purpose and liability of persons concerned. JUDICIAL INTERPRETATIONS

Entitled to pierce the corporate veil and recognise a receipt as that of the individuals in control if the company was a facade to conceal the true facts thereby avoiding or cancelling any liability of the individuals. English courts have, however, differentiated between the terms “lifting” and “piercing”, for instance, in Atlas Maritime Co SA v Avalon Maritime Ltd (No 1), court stated that “To pierce the corporate veil is an expression that I would reserve for treating the rights and liabilities or activities of a company as the rights or liabilities or activities of its shareholders. To lift the corporate veil or look behind it, on the other hand, should mean to have regard to the shareholding in a company for some legal purpose”, 1991 4 All ER 769, 779, (Staughton LJ).

Interests of Justice

Gans, Mitchell M.; Blattmachr, Jonathan G. (2006). "Family Limited Partnership Formation: Dueling Dicta". Capital University Law Review. 35: 1 . Retrieved 9 September 2017. The corporate veil may be lifted where the statute itself contemplates lifting the veil or fraud or improper conduct is intended to be prevented. unity of interest and ownership": the separate personalities of the shareholder and corporation cease to exist, Ibid 30-31 (Lord Halsbury LC). See also, Gas Lighting Improvement Co. Ltd. v Commissioners of Inland Revenue, 1923 AC 723 (Lord Sumner).

The circumstances under which corporate veil may be lifted can be categorized broadly into two following heads: Jan Lieder, "Liability because of existence-destroying interventions", in: Andrea Vicari/Alexander Schall (eds.), Company Laws of the EU, 2020, Part 2: Germany, Chapter 7: Groups of Companies, pp. 397 - 401, at paras. 647 - 661. When I close my eyes, I can still see Goyen and my brothers-in-arms falling all around me on that fateful day. Berkey v. Third Avenue Railway, 244 N.Y. 602, 155 N.E. 914 (1927). Benjamin Cardozo decided there was no right to pierce the veil for a personal injury victim. Blank, Joshua D.; Staudt, Nancy C. (May 2012). "Corporate Shams" (PDF). NYU Center for Law, Economics and Organization. New York University School of Law . Retrieved 9 September 2017.In course of time, the doctrine that a company has a separate and legal entity of its own has been subjected to certain exceptions by the application of the fiction that the veil of the corporation can be lifted and its face examined in substance. Not actually lifting the veil, not saying that we are entity merely saying that one entity is bound by the actions of the other. Commencing with the Salomon case, the rule of SLP has been followed as an uncompromising precedent 5 in several subsequent cases like Macaura v Northern Assurance Co. 6, Lee v Lee’s Air Farming Limited, 7 and the Farrar case. 8 The legal fiction of corporate veil, thus established, enunciates that a company has a legal personality separate and independent from the identity of its shareholders. 9 Hence, any rights, obligations or liabilities of a company are discrete from those of its shareholders, where the latter are responsible only to the extent of their capital contributions, known as “limited liability”. 10 This corporate fiction was devised to enable groups of individuals to pursue an economic purpose as a single unit, without exposure to risks or liabilities in one’s personal capacity. 11 Accordingly, a company can own property, execute contracts, raise debt, make investments and assume other rights and obligations, independent of its members. 12 Moreover, as companies can then sue and be sued on its own name, it facilitates legal course too. 13 Lastly, the most striking consequence of SLP is that a company survives the death of its members. 14 The Exception of Veil Piercing