Personal Liability Case Study
Assessment of the likelihood of Sid and Kenny avoiding personal liability for
the debts of the company.
This question deals with directors avoiding personal liability for
debts of a company, especially within the category of fraud, which is
applicable to this scenario. This question also deals with lifting the
corporate veil as if the directors are found to be liable the veil
will need to be lifted, so as to expose the members whom are found to
be liable.
When a company is incorporated it is treated as a separate legal
entity distinct from its promoters, directors, members, and employees
and hence the concept of the corporate veil, separating those parties
from the corporate body has arisen.
The company as a separate entity was firmly established in the
landmark decision in Salomon v. Salomon &Co Ltd[1]. In this case
Salomon, a sole trader, sold his manufacturing business to Salomon &
Co Ltd. (a company which he incorporated) in consideration for all but
six shares in the company, and received debentures worth £10,000. The
other subscribers to the memorandum were his wife and five children
who each took up one share. The business subsequently collapsed, and
Salomon made a claim, on the basis of the debentures held as a secured
creditor. The liquidator argued that Salomon could not rank ahead of
other creditors due to Mr. Salomon and the company was one. The House
Of Lords held that Salomon & Co Ltd. was not a "sham". As the debts of
the corporation were not the debts of Mr...
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...1990] BCLC 454
[8] Referred to as the "fraud exception"
[9] Gilford Motor Co. v Horne [1938] Ch 935 (CA).
[10] Jones v Lipman [1962] 1 ALL ER 442
[11] Lawrence L.J.
"…I agree with the finding by the learned judge that the defendant
company was a mere channel used by the defendant Horne for the purpose
of enabling him, for his own benefit, to obtain the advantage of the
customers of the plaintiff, and that therefore the defendant company
ought to be restrained as well as the defendant Horne"
[12] Jones v. Lipman [1962] 1 ALL ER 442
[13] Adams v Cape Industries Plc (1990) 2 WLR 657;
[14] Creasey v Breachwood Motors Ltd [1993] B.C.L.C 480 (QBD
[15] Jones v Lipman [1962] 1 ALL ER 442
[16] Gilford Motor Co. v Horne [1938] Ch 935 (CA).
[17] Gencor ACP Ltd v. Dalby [2000] 2 BCLC 734 (ChD)
La Trobe Capital & Mortgage Corp Ltd v Hay Property Consultants Pty Ltd (2011) 190 FCR 299
drain if any of the information they gave out will be found out by the
The decision of the House of Lords in City of London Building Society v Flegg marks a key stage in how the balance is drawn between occupiers and creditors in priority disputes; the seeds of which were originally planted in the Law of Property Act 1925. It posed a serious challenge to the conventional understanding of overreaching and the machinery of conveyancing.Ref ?
A dentist fits several children with braces. The children are regular patients of the dentist. The results for some of the patients turn out to be unacceptable and damaging. There are children who have developed gum infections due to improperly tightened braces. Some mistakenly had their permanent teeth removed, while others have misaligned bites. A local attorney becomes aware of these incidences, looks further into it, and realizes the dentist has not been properly trained and holds no legal license to practice dentistry or orthodontics. The attorney decides to act on behalf of the displeased patients and files a class action lawsuit. The attorney plans to prove the dentist negligent and guilty of dental malpractice by providing proof using the four D’s of negligence. The four D’s of negligence are duty, dereliction, direct cause and damages.
Vicarious liability is a common law concept that refers to the liability that arises when one party, such as an employer, is legally liable for the acts or omissions of another party, such as an employee. This is because employers have a duty to take reasonable care for the safety of their employees and those of others who come into contact with them and their business.
Gummow and Bell JJ concluded that clause 1 of the Deed signed Rural’s debts and its interests under the loan agreements to Equuscorp. Their Honours observed that the phrase “other remedies for these matters” located in clause 2 assigned a claim in restitution for money had and received . Heydon J agreed with this decision on similar grounds .
At the behest of Solicitor General John Les, an inquiry was launched in February o...
Civil Liability has more than one source. There are two sources of liabilities, civil wrong and unjust enrichment. But most importantly civil liability is to be responsible for debts or wrongdoing against another private party (http://www.legalmatch.com/law-library/article/defenses-to-civil-liability.html). A Civil Wrong could arise from three different acts. It could arise from personal acts, acts of another, and from things. But, my main focus is personal acts. All these acts are considered as a civil wrong which is an action with a tort, an act against another person or their property, and, a breach of the terms of a contract (http://thelawdictionary.org/civil-wrong/). In order to prove that a person is liable for that certain act we should analyze the civil wrong elements which are , wrong, damage, and causation. A The second source of liability is unjust enrichment which is benefiting from the action or property of another without legal justification (http://www.duhaime.org/LegalDictionary/U/UnjustEnrichment.aspx).Unjust Enrichment could arise from a payment not due and a voluntary agency. Unjust Enrichment includes three elements which are loss, benefit, and no legal justification. Both liabilities have different understandings and have different aspects in viewing a case.
Tort, one of the crucial subjects of study when analyzing common law jurisdictions. Tort, is an action which causes another person or party to suffer harm or loss []. The person who has committed a tortious act is called the tortfeasor while the person who suffered harm or loss from such act is called the injured party or the victim. Although crimes may be torts, torts may not be crimes [] simply because a tort may not have broken a law. In fact, one must understand that the key idea of tort is not to punish the tortfeasor(s) but rather to compensate the victim(s).
Negligence, as defined in Pearson’s Business Law in Canada, is an unintentional careless act or omission that causes injury to another. Negligence consists of four parts, of which the plaintiff has to prove to be able to have a successful lawsuit and potentially obtain compensation. First there is a duty of care: Who is one responsible for? Secondly there is breach of standard of care: What did the defendant do that was careless? Thirdly there is causation: Did the alleged careless act actually cause the harm? Fourthly there is damage: Did the plaintiff suffer a compensable type of harm as a result of the alleged negligent act? Therefore, the cause of action for Helen Happy’s lawsuit will be negligence, and she will be suing the warden of the Peace River Correctional Centre, attributable to vicarious liability. As well as, there will be a partial defense (shared blame) between the warden and the two employees, Ike Inkster and Melvin Melrose; whom where driving the standard Correction’s van.
The court upheld the appeal against the confiscation order as the property was deemed to be not criminal in the hands of the mortgage broker at the time the arrangement was entered into. The definition of “criminal property” for the 328 offence is that the property must be criminal at the time the arrangement begins.
No 500, shall apply to all Documentary Credits…….where they are incorporated into the text of the Credit.” [46] Judith Evans Law of International Trade(3rd edition) by Old Bailey Press [47] Article 1 and 2 [48] Article 3 [49] Gian Singh & Co Ltd v Banque de l’Indochine[1974] 1 WLR 1234 [50] JH Rayner & Co. Ltd v Hambro’s Bank Ltd[1943] KB 37 [51] Equitable Trust Company of New York v Dawson Partners Ltd(1927) 27 Ll. L. Rep 49 by Viscount Sumner [52] United City Merchants (Investments) v Royal Bank of Canada [1983] 1 AC 168
did owe a duty of care to Mrs. Donoghue, in that it was up to them to...
Based on common law and precedent, the English law of contract has been formulated and developed over a number of years with it’s primary purpose to provide a regulated framework within which individuals can contract freely. In order to ensure a contract is enforceable there are certain elements which must be satisfied, one of which is the doctrine of consideration. Lord Denning famously professed; “the doctrine of consideration is too firmly fixed to be overthrown by a side wind” . This is a crucial indication that consideration has long been regarded as the cardinal ‘badge of enforceability’ in the formulation and variation of contracts in English common law.
Review the scenario below. Consider the legal principles influencing the likelihood of any successful action against Steve in negligence.