Single Economic Entity Adams v Cape Industries PLC [1990] CH 433 Court of appeal - the defendant was part of a group of companies and attempted to take advantage of its corporate structure to reduce the risk that any member of the group would be subject to US law and thus liable for injury caused by asbestos. Adams v. Lindsell Case Brief - Rule of Law: This is the landmark case from which the mailbox rule is derived. Cape Industries plc was a UK company, head of a group. The Court of Appeal unanimously rejected (1) that Cape should be part of a single economic unit (2) that the subsidiaries were a façade (3) any agency relationship existed on the facts. JUDGMENT. 786 [1990] B.C.L.C. ... Macaura v Nothern Assurance Co Ltd 1925 - Duration: 1:10. legal I 464 views. Judgment. 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. See E McGaughey, 'Donoghue v Salomon in the High Court' (2011) 4 Journal of Personal Injury Law 249, on, VTB Capital plc v Nutritek International Corp, https://en.wikipedia.org/w/index.php?title=Adams_v_Cape_Industries_plc&oldid=974480361, Court of Appeal (England and Wales) cases, United Kingdom corporate personality case law, Creative Commons Attribution-ShareAlike License. The employees of that Texas company, NAAC, became ill, with asbestosis. The Court of Appeal unanimously rejected (1) that Cape should be part of a single economic unit (2) that the subsidiaries were a façade (3) any agency relationship existed on the facts. Slade LJ (for Mustill LJ and Ralph Gibson LJ) began by noting that to ‘the layman at least the distinction between the case where a company itself trades in a foreign country and the case where it trades in a foreign country through a subsidiary, whose activities it has full power to control, may seem a slender one…’ But approving Sir Godfray’s argument, ‘save in cases which turn on the wording of particular statutes or contracts, the court is not free to disregard the principle of Salomon… merely because it considers that justice so requires.’ On the test of the ‘mere façade’, it was emphasised that the motive was relevant whenever such a sham or cloak is alleged, as in Jones v Lipman. Whether or not such a course deserves moral approval, there was nothing illegal as such in Cape arranging its affairs (whether by the use of subsidiaries or otherwise) so as to attract the minimum publicity to its involvement in the sale of Cape asbestos in the United States of America. The Court of Appeal held that in order for a company to have a presence in the foreign jurisdiction, it must be established that: On the facts the Court of Appeal held that Cape had no fixed place of business in the United States such that recognition should not be given to the U.S. judgment awarded against it. to which special considerations apply) to expect that the court would apply the principle of, the company had its own fixed place of business (a branch office) in the jurisdiction from which it has carried on its own business for more than a minimal time; and. THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN. Mr. Morison urged on us that the purpose of the operation was in substance that Cape would have the practical benefit of the group's asbestos trade in the United States of America without the risks of tortious liability. It noted that DHN was doubted in Woolfson. Whether or not this is desirable, the right to use a corporate structure in this manner is inherent in our corporate law. But this is a purely theoretical and historical basis for the enforcement of foreign judgments at common law. the company's business is transacted from that fixed place of business. FACTS Until 1979 the first defendant, Cape, an English company, presided over a group of subsidiary companies engaged in the mining in South Africa, and marketing, of asbestos. The Court of Appeal unanimously rejected (1) that Cape should be part of a single economic unit (2) that the subsidiaries were a façade (3) any agency relationship existed on the facts. In this case, the claimant, Mr Chandler, was employed by a subsidiary of Cape plc for just over 18 months from 1959 to 1962. 929 [1990] B.C.C. Adams v Cape Industries plc [1990] Ch 433 is a UK company law case on separate legal personality and limited liability of shareholders. Its subsidiaries mined asbestos in South Africa. Get free access to the complete judgment in ADAMS v. PPG INDUSTRIES INC on CaseMine. Menu Home; ... Clare Arthurs and Alex Fox reflect on the Supreme Court judgment in Nutritek. 657 [1991] 1 All E.R. The plaintiff argued that it should not be permitted to do this but should be … Employees of the Texas subsidiary became ill, with asbestosis. Secretary of State for Trade and Industry v Bottrill (1999), 1 All ER 915. Adams v National Bargaining Council for the Freight and Logistics Industry and Others (CA2/2019) ... JUDGMENT. "[4], [2012] EWCA Civ 525. Adams V Cape Industries Plc - Judgment. to which special considerations apply) to expect that the court would apply the principle of Salomon v A Salomon & Co Ltd [1897] AC 22 in the ordinary way. Mr. Morison submitted that the court will lift the corporate veil where a defendant by the device of a corporate structure attempts to evade (i) limitations imposed on his conduct by law; (ii) such rights of relief against him as third parties already possess; and (iii) such rights of relief as third parties may in the future acquire. They shipped it to Texas, where a marketing subsidiary, NAAC, supplied the asbestos to another company in Texas. Appeal from – Adams v Cape Industries plc ChD 1990 The piercing of the veil argument was used to attempt to bring an English public company, which was the parent company of a group which included subsidiaries in the United States, within the jurisdiction … Adams v Cape Industries plc [1990] Ch 433 is a UK company law case on separate legal personality and limited liability of shareholders. Adams v Cape Industries. PDF format. Assuming that the first and second of these three conditions will suffice in law to justify such a course, neither of them apply in the present case. Facts. 3. when it can be established that the subsidiary company was acting The question was whether, through the Texas subsidiary, NAAC, Cape Industries plc was ‘present’. As to condition (iii), we do not accept as a matter of law that the court is entitled to lift the corporate veil as against a defendant company which is the member of a corporate group merely because the corporate structure has been used so as to ensure that the legal liability (if any) in respect of particular future activities of the group (and correspondingly the risk of enforcement of that liability) will fall on another member of the group rather than the defendant company. The court held that one of Cape's subsidiaries (a special purpose vehicle incorporated in Liechtenstein) was in fact a façade, but on the facts, it was not a material subsidiary such as to attribute liability to Cape. It has in effect been superseded by Lungowe v Vedanta Resources plc,[1] which held that a parent company could be liable for the actions of a subsidiary on ordinary principles of tort law. Case: Adams v Cape Industries plc [1990] Ch 433. View all articles and reports associated with Adams v Cape Industries plc [1990] Ch 433. The mailbox rule stands for the proposition that This article explores Adams v. Cape (1990), in which American plaintiffs attempted to persuade the English courts to lift the corporate veil and impose liability for industrial disease on Cape Industries, a leading U.K. asbestos manufacturer. Adams v Cape Industries Plc – Group Reality or Legal Reality? Prest v Petrodel Resources Ltd & ors [2013] UKSC 34 ... Clare Arthurs and Alex Fox reflect on the Supreme Court judgment in Nutritek The Supreme Court clearly declined to extend the circumstances in which the corporate veil may be pierced. All these were rejected "on the facts". 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. E McGaughey, 'Donoghue v Salomon in the High Court' (2011) 4 Journal of Personal Injury Law 249, on, This page was last edited on 23 August 2020, at 09:10. The courts have demonstrated that the veil will not be pierced where, despite the presence of wrongdoing, the impropriety was not linked to the use of the corporate structure as a device or facade to conceal or avoid liability, nor will the courts pierce the veil merely because the interests of justice so require (Adams v Cape Industries Plc [1990]). Cape Industries (the parent company) allowed default judgement to be obtained against it in US by not submitting a defence. Adams V Cape Industries Plc - Judgment. The leading authority within is Adams v Cape Industries, setting out that presence, as distinct from residence is necessary. Reportable. Judgment was still entered against Cape for breach of a duty of care in negligence to the employees. 433 [1990] 2 W.L.R. RTF format. 657 [1991] 1 All E.R. The marketing subsidiary in the United States of America was a wholly owned subsidiary, N.A.A.C., incorporated in Illinois in 1953. Adams v Cape Industries plc [1990] Ch 433. Skip to content. Adams v Cape Industries plc [1990] Uncategorized Legal Case Notes October 13, 2018 May 28, 2019. Salomon v A. Salomon and Co Ltd (1897) AC 22. PLC. This ground was argued to not be applicable but there is interesting aspect on the leading judgment on this issue – judgment of lord justice Slade. Adams v Cape Industries Plc (CA (Civ Div)) Court of Appeal (Civil Division) 27 July 1989 Where Reported Summary Cases Cited Legislation Cited History of the Case Citations to the Case Case Comments Where Reported [1990] Ch. Judgment. However, in our judgment, Cape was in law entitled to organise the group's affairs in that manner and (save in the case of A.M.C. Whether or not this is desirable, the right to use a corporate structure in this manner is inherent in our corporate law. The Court of Appeal unanimously rejected three allegations: that Cape should be part of a single economic unit, that the subsidiaries were a façade and that any agency relationship existed. After the decision (which has been followed), English law has suggested a court cannot lift the corporate veil except when construing a statute, contract or other document; if a company is a "mere façade" concealing the true facts or when a subsidiary company was acting as an authorised agent of its parent, and apparently not so just because "justice requires" or to treat a group of companies as a single economic unit. Cases like Holdsworth, Scottish Coop and DHN were distinguishable on the basis of particular words on the relevant statutory provisions. Adams v Cape Industries plc. This may be so. Adams v Cape Industries plc 1990 Ch 433 CA legal I. Loading... Unsubscribe from legal I? Adams v Cape Industries Plc [1990] Ch 433. Adams v Cape Industries Plc [1990] Ch 433 (CA). Issue. Assuming that the first and second of these three conditions will suffice in law to justify such a course, neither of them apply in the present case. ADAMS V. CAPE INDUSTRIES. 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