''DHN Food Distributors Ltd v Tower Hamlets London Borough Council''

976 Year 976 ( CMLXXVI) was a leap year starting on Saturday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * January 10 – Emperor John I Tzimiskes dies at Constantinople, after re ...

1 WLR 852 is a

UK company law The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary lega ...

case where, on the basis that a company should be compensated for loss of its business under a

compulsory acquisition Eminent domain (United States, Philippines), land acquisition (India, Malaysia, Singapore), compulsory purchase/acquisition (Australia, New Zealand, Ireland, United Kingdom), resumption (Hong Kong, Uganda), resumption/compulsory acquisition (Austr ...

order, a group was recognised as a single

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. It stands as a liberal example of when UK courts may lift the veil of incorporation of a company. The decision was, however, doubted in ''

Woolfson v Strathclyde Regional Council ''Woolfson v Strathclyde Regional Council'' 978UKHL 5is a UK company law case concerning piercing the corporate veil. Facts A bridal clothing shop at 53-61 St George's Road was Compulsory purchase, compulsorily purchased by the Glasgow Corporat ...

'' and qualified in ''

Adams v Cape Industries plc ''Adams v Cape Industries plc'' 990Ch 433 is a UK company law case on separate legal personality and limited liability of shareholders. The case also addressed long-standing issues under the English conflict of laws as to when a company would b ...

''.

Facts

DHN imported groceries and provision and had a cash-and-carry grocery business. Its premises were owned by its subsidiary which was called Bronze. It had a warehouse in Malmesbury Road, in Bow, the East End of

London London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...

. Bronze’s directors were DHN’s. Bronze had no business and the only asset were the premises, of which DHN was the licensee. Another wholly owned subsidiary, called DHN Food Transport Ltd, owned the vehicles. In 1970

Tower Hamlets London Borough Council Tower Hamlets London Borough Council is the local authority for the London Borough of Tower Hamlets in Greater London, England. The council is unusual in that its executive function is controlled by a directly elected mayor of Tower Hamlets, cur ...

compulsorily acquired the premises to build houses. As a result, DHN had to close down. Compensation was already paid to Bronze, one and a half times the land value. DHN could only get compensation too if it had more than a license interest. The Lands Tribunal held no further compensation was payable.

Judgment

The Court of Appeal held that DHN and Bronze were part of a single economic entity. Therefore, as if DHN had owned the land itself, it was entitled to compensation for the loss of business.

Lord Denning MR Alfred Thompson "Tom" Denning, Baron Denning (23 January 1899 – 5 March 1999) was an English lawyer and judge. He was called to the bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 when ...

's judgment went as follows. Goff LJ concurred and read his judgment. Shaw LJ concurred with both judgments, and concluded with the following.

1 WLR 852, 867-868

Notes

References

*E McGaughey, 'Donoghue v Salomon in the High Court' (2011) 4 Journal of Personal Injury Law 249, o
SSRN
{{DEFAULTSORT:Dhn Food Distributors Ltd V Tower Hamlets London Borough Council United Kingdom company case law Court of Appeal (England and Wales) cases 1976 in British law 1976 in case law United Kingdom corporate personality case law Lord Denning cases History of the London Borough of Tower Hamlets

Facts

Judgment

See also

Notes

References