Business Advice

... [1992] BCC 638 partly on the basis of the timing of the transfer from entity to entity. The court may well consider the timing of the sale, i.e. half way through the alleged breach of contract, as a relevant factor and may well view this as some sort of avoidance manoeuvre on R's part.

It is worth bearing in mind that Creasey v Breachwood was subsequently criticised in Ord v Belhaven. Hobhouse LJ stated,

"…it seems to me inescapable that the case in Creasey v. Breachwood as it appears to the court cannot be sustained. It represents a wrong adoption of the principle of piercing the corporate veil… Therefore, in my judgement the case of Creasey v. Breachwood should no longer be treated as authoritative…"

(Although the grounds for the criticism might well not apply to the present case.)

In summary, the facts are not sufficiently clear to warrant a clear conclusion, but it appears that the main obstacle to Gus succeeding would be the ability to demonstrate that R sold his business to E Ltd. in order to avoid contractual obligations via assumed reliance on the Salomon principal.

Notably, Lord Keith commented in Wolfson v Strathclyde Regional Council [1979] JPL 169 that the Salomon principal should only be excluded in cases of a fraudulent nature where facts were being concealed by a ruse. Such as ruse must clearly be demonstrated.

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Gloria (hereinafter referred to as "G").

From the given facts, G is stated to have been a "…former client…" of E Ltd.

Again, with regard to the doctrine of the corporate veil, G would prima facie only have a claim against E Ltd. and not R directly or personally. Unless, the courts can again be persuaded to lift the corporate veil.

Members of a company have a ...