Decided 16 March 2001 | End date March 16, 2001 | |
Court High Court (Chancery Division) Citation(s) [2001] EWHC 703 (Ch), [2001] 2 BCLC 436, [2002] BCC 795, [2001] 1 WLR 1177 Similar Woolfson v Strathclyde Regional Council, Gencor ACP Ltd v Dalby, Jones v Lipman | ||
[Case Law Company]['Sham/façade companies'] Trustor AB v Smallbone and others [2001] 2 BCLC 436 (Ch)
Trustor AB v Smallbone (No 2) [2001] EWHC 703 (Ch) is a UK company law case concerning piercing the corporate veil.
Contents
Facts
Mr Smallbone had been the managing director of Trustor AB, and it was claimed that in breach of fiduciary duty he transferred money to a company that he owned and controlled. Trustor AB applied to treat receipt of the assets of that company as the same as the assets of Mr Smallbone. It argued that Smallbone's company was a sham to help breaches of duty, it had been involved in improper acts and the interests of justice demanded the result. The case against Mr Smallbone was eventually dropped by Trustor AB as there was no breach of fiduciary duty.
Judgment
Sir Andrew Morrit VC held that there was enough evidence to lift the veil on the basis that it was a "mere facade". He noted the tension between Adams v Cape Industries plc and later cases and stated that impropriety is not enough to pierce the veil, but the court is entitled to do so where a company is used ‘as a device or façade to conceal the true facts and the liability of the responsible individuals.’