Legt2741 assignment

The possible legal actions that can be examined through previous precedents in lifting the corporate veil are: Assuming Casino wants to put an end to the bad publicity due to the industrial disputes, it is reasonable that they would give in and settle the disputes by awarding the employees with higher-than-usual wages.

Did Casino make profits by its skill and direction 6. Besanko J suggested at [] that overwhelming control maybe relevant in lifting the corporate veil where the controller has not provided any resources to the company.

Justice Cooke found that there was no separate existence. Comments Content The legal issue concerning in this case is whether the trade union can argue to lift the corporate veil upon the incorporated companies, Casino Ltd and Caterers Ltd, and claim both of them were acting as one single entity so that the 60 employees can keep their original contracts.

Agency Relationship A further argument the trade union could put in place to argue for the lift of the corporate veil is on the agency ground.

At first instance, it appears that the union can successfully take legal action under the agency ground as all evidences also point towards that Caterers is acting as an agent for Casino Legt2741 assignment thus there is essentially only one entity. Did Casino govern the venture and decide what should be done and what capital should be used 5.

In addition, Caterers coincidentally dealt with all concerns with the catering and hospitality employees who received generous contracts and with the assumption that Casino did not want to keep the promise, it is reasonable to conclude the Casino was using Caterers to conceal from its liabilities.

Its true intention to use Caterers as a cost minimisation vehicle to lower the remuneration packages to their employees can be seen as a dishonest scheme used by Casino to conceal the true facts. Therefore, there is little probability that the union would succeed in alleging that Casino Ltd and Caterers are one single entity.

This argument is more convincing when turning to Kensington International Limited v Republic of Congo7, an England High Court case where the corporate veil is lifted. In fact, Casino has explicitly passed on human resources to Caterers when it offered new employment contracts to the redundant employees, which indicates that Caterers was actually independently existed.

Was Caterers conducting the business appointed by Casino 3. This proposition can be further reinforced in Walker v Wimborne2, whereby the court refused to recognise the group as one single entity and reiterated the point that each company within a corporate group is a separate entity with their own duties and liabilities.

This reason is in every sense appropriate and would very likely be accepted as a legitimate commercial purpose.

On this note, this is not to say that Caterers itself is a sham as the company has complied with the registrations and obligations. The union could allege that there is an implied agency relationship between Casino Ltd and Caterers Ltd and thus the two companies are in fact one single entity.

Thus, the sole restructuring of the catering and entertainment services and to offer unfavourable employment contracts to the redundant employees seem like a dishonest and deliberate evasion of liability. The fact that Caterers Ltd was established for strategic planning in a view of long-term growth of the company could not be considered as a sham.

LEGT2741 Assignment (Week 5)

For an agency relationship to exist, the following six Legt2741 assignment must be satisfied. Sham and avoidance of legal obligations 2. Due to the absence of statutory law on this matter, the courts have been reluctant to deviate from this principle, which has caused numerous debate and confusion in Australian law as to when could the courts justify the lift of the corporate veil.

Was Casino the head and brain of the trading venture 4. This might not be the best approach as parent companies often have full control over its subsidiaries. Sham and Avoidance of Legal Obligations The courts are prepared to lift the corporate veil when there are sufficient reasons to believe that a company has been used as a sham to avoid legal obligations under contract or statute, as was laid down by Gilford Motor Co Ltd v Horne [] All ER It was held that the avoidance of existing liabilities through reliance on corporate structures is sufficient to lift the veil.

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